Annual Report 2004

SES GLOBAL Annual Report 2004 Yo ur Satellite Connection to the World www.ses-global.com SES C/029/04.05 E Annual Report 2004 Through our family of regional operating companies, the SES Group offers the leading portfolio of satellite-centric services around the world. 2004 2003 Financial summary EUR millions EUR millions Total revenues 1,146.6 1,207.5 EBITDA 842.1 942.8 Operating profit 307.3 371.7 Profit of the Group 229.9 205.4 Net operating cash flow 882.1 873.8 Free cash flow 222.0 940.3 Capital expenditure 531.6 317.0 Net debt 1,619.7 1,699.1 Shareholders’ equity 3,217.0 3,247.8 Earnings per A share (EUR) 0.38 0.34 Dividend per A share (EUR) 0.30* 0.22 Employees 985 789 Key performance ratios in % EBITDA margin 73.4 78.1 Net income margin 20.0 17.0 Return on average equity 7.1 6.0 Net debt / EBITDA 1.9 1.8 Net debt / shareholders’ equity 50.3 52.3 * Recommended by Directors and subject to shareholder approval. Contents SES GLOBAL S.A. consolidated accounts 4 Chairman’s statement 43 Report of the independent auditor 6 President and CEO’s statement 44 Consolidated balance sheet 46 Consolidated profit and loss account Operations review 47 Consolidated statement of cash flow 8 SES GLOBAL 48 Consolidated statement of changes in 12 SES ASTRA shareholders’ equity 18 SES AMERICOM 49 Notes to the consolidated accounts 24 Global partners SES GLOBAL S.A. annual accounts Corporate governance 71 Report of the independent auditor 29 SES GLOBAL shareholders 72 Balance sheet 30 Report of the Chairman on corporate governance 73 Profit and loss account Annual General meeting of the shareholders Statement of changes in shareholders’ equity 31 Board of Directors 74 Notes to the SES GLOBAL S.A. accounts 33 Committees of the Board of Directors 34 Executive Committee 80 Five year financial summary 36 Remuneration Shareholder information Internal control Companies of the Group 38 Our people Stock-related compensation schemes 39 Corporate social responsibility 40 Management discussion and analysis SES GLOBAL 2004 Annual Report Key 2004 highlights – Revenues of EUR 1.15 billion – EBITDA of EUR 842 million – Profit of the Group of EUR 230 million – Net operating cash flow of EUR 882 million – Successful launch of four new satellites: AMC-10, AMC-11, AMC-15 and AMC-16 – New customer contracts worth EUR 1.2 billion – Listing on Euronext Paris and secondary offering of FDRs Revenues Recent developments (EUR million) Following the closure of the 2004 business year, the following important developments occurred: – In March 2005, SES GLOBAL announced the procurement of a new spacecraft, 1,349.3 1,207.5 AMC-18, to be operated by SES AMERICOM. The new satellite is built on the 1,146.6 basis of a ground spare initially developed to support the AMC-10 and AMC-11 satellites. AMC-18, an all C-band satellite, is planned for operation at the 105˚ West orbital position. The use of C-band spectrum for this position was recently secured through an agreement with New Skies Satellites B.V. The procurement of AMC-18 reflects the success of SES AMERICOM’s HD-PRIME neighbourhood, 2003 2004 2002 where fill rates exceeded 80% at the end of 2004. AMC-18 is planned for launch EBITDA on an Ariane rocket in the second half of 2006. (EUR million) – SES ASTRA announced the beginning of the procurement phase for an additional satellite, ASTRA 1M, to secure business growth at the 28.2˚ East 1,107.1 orbital position. The company decided to advance the procurement of the 942.8 spacecraft, which is to provide replacement capacity for ASTRA 1H, in order 842.1 to protect the timely relocation of ASTRA 2C from 19.2˚ East to 28.2˚ East. This relocation, scheduled to occur following the launches of ASTRA 1KR and ASTRA 1L, will provide additional capacity to meet the strong demand in the UK and Irish markets. 2003 2004 2002 – SES GLOBAL announced the appointment of Edward D. Horowitz to the Profit of the Group position of President and Chief Executive Officer of SES AMERICOM and (EUR million) member of the Executive Committee of SES GLOBAL, effective May 2, 2005. – In April 2005, the SES Group increased its shareholding in ND SatCom from 229.9 205.4 204.5 10% to 25.1%, as a further step in the Group’s strategy to develop its portfolio of satellite service solutions provided to customers in the media, enterprise and government sectors. The transaction was effected through the conversion of an existing shareholder loan into equity, and includes an option to take full control of ND SatCom, to be exercised in 2006 at the sole discretion of SES ASTRA. The SES participation in ND SatCom will be managed through SES ASTRA. 2003 2004 2002 – Also in April, the SES Group increased its shareholding in SATLYNX from 41% to 77%, taking full operational control of the company. The SES participation will be managed through SES ASTRA. The shareholder restructuring enables a further alignment of SATLYNX with the strategic objectives of SES ASTRA to develop the provision of end-to-end customer solutions. The companies of the SES Group provide access to 38 spacecraft positioned around the globe. These satellites provide outstanding coverage of 95% of the world’s population. 2/3 SES AMERICOM Nahuelsat Sta SES GLOBAL Inside Satellite fleet ASTRA Position AMERICOM ASIASAT ASTRA 1B 19.2˚ East AMC-1 103˚ West AsiaSat-2 100.5˚ East ASTRA 1C 19.2˚ East AMC-2 105˚ West AsiaSat-3S 105.5˚ East ASTRA 1D 23.5˚ East AMC-3 87˚ West AsiaSat-4 122˚ East ASTRA 1E 19.2˚ East AMC-4 101˚ West ASTRA 1F 19.2˚ East AMC-5 79˚ West SIRIUS ASTRA 1G 19.2˚ East AMC-6 72˚ West SIRIUS 2 5˚ East ASTRA 1H 19.2˚ East AMC-7 137˚ West SIRIUS 3 5˚ East ASTRA 2A 28.2˚ East AMC-8 139˚ West ASTRA 2B 28.2˚ East AMC-9 85˚ West STAR ONE ASTRA 2C 19.2˚ East AMC-10 135˚ West Brasilsat B1 70˚ West ASTRA 2D 28.2˚ East AMC-11 131˚ West Brasilsat B2 65˚ West ASTRA 3A 23.5˚ East AMC-15 117˚ West* Brasilsat B3 84˚ West AMC-16 82.1˚ West* Brasilsat B4 92˚ West Satcom C-3 131˚ West** Satcom C-4 135˚ West** NAHUELSAT Satcom C-1 37.5˚ West Nahuel-1 71.8˚ West SpaceNet-4 172˚ East WS-1/AAP-1 108.2˚ East Satellite fleet as at December 31, 2004 * in transfer to final orbital location SES GLOBAL 2004 Annual Report ** to be redeployed in 2005 AsiaSat NSAB SIRIUS SES ASTRA arOne The SES Group We are the world’s premier satellite group. The SES Group Star One 19.99% consists of a unique network of satellite operators based in the different regions of the world, each a leader in their respective markets. SES GLOBAL S.A. is the Group management company. It 75.0% NSAB defines and coordinates the strategy of the Group companies SIRIUS and allocates resources to pursue the identified strategy. 100.0% SES GLOBAL owns 100% of the operating companies SES ASTRA and SES AMERICOM. These companies operate spacecraft fleet and generate revenues through 100.0% their commercial operations in the regional markets. SES GLOBAL also holds strategic participations in a number of Nahuelsat 28.75% leading regional satellite operators, such as AsiaSat, Star One, NSAB, as well as in satellite services companies. This unique structure creates synergy potential which is successfully leveraged through a model of cooperation among the companies of the Group. The CEOs of both SES ASTRA and of SES AMERICOM are members of the Executive Committee 34.10% AsiaSat of SES GLOBAL, thus ensuring that the interests and strategic priorities of the Group are adequately balanced, while supporting the Group’s strategy. 4/5 René Steichen Chairman of the Board of Directors Successfully moving the business forward underlying business is strong and has returned to I am pleased to report consolidated financial results a growth path: on a like-for-like basis, and at constant for the SES Group which reinforce our position as the exchange rates, new business contracts won during world’s leading fixed satellite services Group. the period raised the recurring revenues by 0.5%. The SES Group showed a solid performance in 2004. The SES Group achieved earnings before interest, tax, As expected, this was a year of transition for us, depreciation and amortisation (EBITDA) of EUR 842 and our results must be seen against the backdrop of million, a reduction of 10.7% compared to the prior the challenging market environment in our industry. year. This reduction denotes the effect of lower one- time contributions, and the greater contribution of While demand for capacity grew in some areas, lower-margin transactions and services, such as particularly in the US and Europe, it remained slow broadband access, enterprise networks and in others. As in 2003, approximately 40% of our government services. However, the combined EBITDA revenues were denominated in US and HK dollars, margin of the Group’s core infrastructure capacity and the weakness of these currencies against the Euro business – which continues to generate the bulk of our continued to unfavourably influence our revenue line. total revenues – remained strong at 81%. Despite these adverse conditions, the SES Group The profit of the Group was EUR 229.9 million in 2004, continued to deliver the highest revenues in the FSS 11.9% higher than in 2003.

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