Reference Document 2013 – 2014
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REFERENCE DOCUMENT 2013 – 2014 70 rue Balard 75502 Paris Cedex 15 - France T : +33 1 53 98 47 47 F : +33 1 53 98 37 00 REFERENCE DOCUMENT 2013 - 2014 REFERENCE DOCUMENT Cover illustration: Jean-Charles de Castelbajac EUTELSAT COMMUNICATIONS: CREATING SPACE FOR YOUR COMMUNICATIONS Every day, Eutelsat demonstrates its expertise as a satellite company that contributes essential resources supporting the growth of digital This document is an unoffi cial translation of the French document de référence fi l e d communications. with the Autorité des marchés financiers (“AMF”) on 15 October 2014 in accordance with Article 212-13 of the AMF General Regulations. The French document de référence As a player at the heart of video and broadband markets, the greatest may be used in connection with a financial transaction if supplemented with an advances are yet to come. Ongoing progress brings with it the perspective off ering memorandum (note d’opération) approved by the AMF. of an increased role for satellites in order to optimise the use of spectrum In the event of any ambiguity or discrepancy between this unoffi cial translation and that is a valuable and fi nite resource, and to transform the digital society the French document de référence, the French version shall prevail. The French version into an environment of economic and social benefi t for all. was drafted by the issuer and holds the signatories thereof liable. With these goals in mind, our Group is pursuing a development strategy based on investment and innovation, operational excellence and the Pursuant to Article 28 of EC Regulation No. 809/2004, the following information is creation of lasting value. included for reference purposes in this Reference Document: ■ the consolidated fi nancial statements of Eutelsat Communications prepared in accordance with IFRSs for the fi nancial year ended 30 June 2013 and the related Statutory Auditors’ report fi guring, respectively, in Sections 6.2 and in Appendix 3 of Eutelsat Communications’ 2013-2013 document de référence registered under No. D.13-0973 by the AMF on 10 October 2013 (the “2012-2013 Reference Document”); ■ the consolidated fi nancial statements of Eutelsat Communications prepared in accordance with IFRSs for the fi nancial year ended 30 June 2012 and the related Statutory Auditors’ report fi guring, respectively, in Sections 20.1.1 and 20.1.2 of Eutelsat Communications’ 2011-2012 document de référence registered under No. D.12-0861 by the AMF on 24 September 2012 (the “2011-2012 Reference Document”); ■ information on the Eutelsat Group’s fi nancial situation and results for the fi nancial years ended 30 June 2013 and 2012 fi guring, respectively, in Section 6.1 of the 2012-2013 document de référence and Section 9.4 of the 2011-2012 document de référence. Parts not included in this or these document(s) are either irrelevant to the investor or included elsewhere in this Reference Document. As of the date of this Reference Document, no additional financial information (neither quarterly nor half yearly) has been published since the fi nancial statements for the year ended 30 June 2014, provided in Sections 6.2 and 6.3 of this Reference Document. Copies of this Reference Document are available free of charge at the registered offi ce of Eutelsat Communications, 70, rue Balard, 75015 Paris, France or on the websites of Eutelsat Communications (www.eutelsat.com) or the Autorité des marchés financiers (www.amf-france.org). Photo credits: Cover illustration, Jean-Charles de Castelbajac Photo inside front cover, Eutelsat copyright Photo page 2, Thierry Ozil, Eutelsat Photos pages 3, 5 and 7, Eutelsat copyright Photos of the Committee members page 20, Philippe Couette copyright for Eutelsat Société anonyme (limited company) with a share capital of 220,113,982 euros Registered office: 70, rue Balard –75015 Paris–France 481 043 040 RCS Paris Conception and production: T: +33 1 53 98 47 47 F: +33 1 53 98 37 00 CONTENTS MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER 2 PRESENTATION OF EUTELSAT FINANCIAL INFORMATION 95 01 COMMUNICATIONS 04 06 6.1 Review of Eutelsat Communications’ financial position 95 1.1 Significant facts of the financial year, key figures and outlook 04 6.2 Consolidated financial statements as of 30 June 2014 106 1.2 Group activities, main markets and competition 06 6.3 Annual financial statements as of 30 June 2014 146 1.3 In-orbit operations 14 1.4 Management 20 1.5 Social and societal responsibility 21 OTHER INFORMATION 159 07 7.1 Legal information regarding the Group 159 CORPORATE GOVERNANCE 23 7.2 Other operational information 166 7.3 Principal shareholders 168 2.1 Composition of the Board of Directors 23 02 7.4 Organisational chart 170 2.2 Key management personnel 30 7.5 Legal and arbitration proceedings 174 2.3 Compensation and benefits 31 7.6 Group property and equipment 174 2.4 Report of the Chairman of the Board of Directors of Eutelsat Communications in 7.7 Research and development, patents and application of Article L. 225-37 of the French licenses 174 Code de Commerce 38 7.8 Important contracts 175 7.9 Related party transactions 176 7.10 Significant changes in financial and commercial position 176 SUSTAINABLE DEVELOPMENT 47 7.11 Relations and conflicts of interest within the 03 3.1 Social information 49 administrative and management bodies 176 3.2 Environmental information 55 7.12 Statutory Auditors 177 3.3 Information relative to societal commitments in 7.13 Documents available to the public 177 favour of sustainable development 60 7.14 Person responsible 178 3.4 Methodology and scope 64 APPENDICES 179 RISK FACTORS 65 04 4.1 Operational risks 65 GLOSSARY 190 4.2 Risks regarding changes in the satellite telecommunications market 71 4.3 Liquidity risk 74 4.4 Regulatory risks 77 4.5 Market risk 79 REGULATION 83 05 5.1 Regulations governing frequency assignments and international coordination 83 5.2 Regulations governing the operation of earth stations, the deployment of networks, the operation of electronic communications networks and the provision of electronic communications services 86 5.3 Regulations governing content 89 5.4 Regulations governing space operations 90 5.5 U.S. export control requirements (regulations governing the activities of the Group’s suppliers) 91 5.6 Other provisions applicable to the Group 92 Illustration Jean-Charles de Castelbajac EUTELSAT COMMUNICATIONS • 2013 | 2014 REFERENCE DOCUMENT 01 MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER EUTELSAT HAS FURTHER DEMONSTRATED ITS ABILITY TO GROW, BOTH ORGANICALLY AND EXTERNALLY, AND TO CAPTURE DEVELOPMENT OPPORTUNITIES IN MARKETS WITH THE HIGHEST BUSINESS POTENTIAL.” 013-2014 has been a year of one of transformation for Eutelsat: with the acquisition of Satmex, finalised on 1 January 2014, our Group has upscaled its potential in high growth markets 2and has become global. The Group attained its financial objectives with revenues posting organic growth of 2.6% and an EBITDA margin at the significantly high level of 76.7%. On the basis of a net result of 303 million euros, the Board of Directors recommends a dividend of 1.03 euros per share, implying a payout ratio of 75%, at the top end of our policy range. Revenues from Video Applications, which account for two thirds of our business, were stable excluding Satmex as a result of limited available additional capacity. The impact of the suspension of operations on certain frequencies at 28.5° East was offset by growth at video neighbourhoods serving broadcasters in fast-growing markets, notably 36° East and 7°/8° West, as well as the entry into service in May 2014 of Express-AT1, whose transponders have Michel de Rosen already all been contracted. Chairman and Chief Executive Officer The number of channels broadcast by Eutelsat satellites stood at 5,746, up 16.5% year-on-year. Furthermore, the HD penetration rate continued to grow, reaching 10.2% compared to 9% a year earlier. Data and Value-Added Services recorded organic growth of 0.8% and continue to be driven by the strong progression of Value-Added Services, up 36.3%, on the back of the outstanding performance of broadband services on KA-SAT and the continued dynamic growth of mobility markets. This momentum compensated the decline in Data Services due to the competitive pressure on point- to-point services from the roll-out of terrestrial networks and, in Africa in particular, the significant existing supply of satellite capacity. The integration of EUTELSAT 172A into the fleet as well as the signature of new contracts were behind the 6.7% organic growth posted by the Multi-usage activity serving government agencies and administrations. 02 EUTELSAT COMMUNICATIONS • 2013 | 2014 REFERENCE DOCUMENT MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER Our backlog stands at an all-time high of 6.4 billion euros, confirming the operated by our Group, an innovative technology that will lead to significant long-term positive trends in our markets. Having increased by nearly 20%, capital expenditure savings in the future. With the launch of EUTELSAT 65 it is now equivalent to 4.6 times annual revenues for the full year 2013- West A in 2016, the Group will operate five satellites in Latin America. 2014. This backlog provides high visibility. The procurement of a new High Throughput multi-mission satellite During the financial year, Eutelsat and SES entered into several programme (EUTELSAT 172B) which will be launched in 2017, also agreements, including a settlement concerning the dispute at the using electric propulsion, will fuel growth in the Asia-Pacific region. 28.5° East orbital position. The EUTELSAT 25B, Express-AT1, Express- EUTELSAT 172B has already been selected by Panasonic Avionics AT2 and EUTELSAT 3B were successfully launched, providing additional Corporation as its prime platform for developing in-flight broadband and capacity in strong growth markets.