Karim Sabbagh - President & CEO Padraig McCarthy - CFO Mark Roberts - Head of IR

Sarah Simon - Berenberg Bank Nick Dempsey - Barclays Capital Patrick Wellington - Morgan Stanley Roshan Ranjit - Nomura Laurie Davison - Deutsche Bank Nick Brown - Goldman Sachs Giles Thorne - Jefferies

Thank you very much, Anna. Good afternoon, or good morning everybody and welcome and welcome to the SES first half 2015 results call.

With us today Karim Sabbagh, our President and CEO; and Padraig McCarthy, our CFO. Again for reference the presentation that was circulated this morning in their remarks.

This is also available at the Investor Relations section of our website ses.com events where we have a copy. After their introduction and remarks we would be pleased to take your questions.

Now, I also remind you to take note of the Safe Harbor statements on the final page of the documents. Karim.

Please go ahead.

Thank you, Mark. Welcome everyone to this briefing regarding the SES first half 2015 result.

As I mentioned our report for the Q1 ‘15 results, we’ve achieved significant and productive progress as we executed against our differentiated strategy. As noted on page one, the execution of our strategy has enabled us to do three things.

First to make significant progress along the four market verticals that now define our business, video, data, mobility and government. Two to globalize our business with marked progress in international.

And three to take a proactive role while working with our industry partners and clients and thinking through and operationalizing the future applications. A case in point is what you have now read clearly and on ambiguously that SES has succeeded in contracting more than four Ultra HD channels with different clients including Sky Deutschland, which subsequently at their own time will announce the number of channels they will launch on the contracted capacity with SES and all this by the end of the year.

Moving on to page two, our successful globalization, means that both our mature and international markets are demonstrating growth in most of our verticals. This is underscored by the growing contribution of international to our business now firmly passing the 30% mark.

This is also demonstrated through our segmental reach which achieved a 7% growth globally. Last but not least this is underscored by the seven year satellite programs underway.

Our verticalization produced a progress and growth whether on a reported or fixed exchange basis in our video, mobility and government segments. This was done by expanding our commercial edge with existing clients Case and Point, Sky Deutschland, StarTimes and BBC Video, Global Eagle Entertainment and aeronautical and the U.S.

government in their international deployment as well as for the North American market. We have also achieved a higher level of new business on the aggregate and this was often done to a new approach by way of example our [indiscernible] with Airbus for data services over Africa or the two hosted payloads with the institutional segment in the U.S.

Or Dematuring drive and you can think of it as our innovation drive was active along the four market verticals, as we have worked with our clients and partners in designing and enacting these new applications and I am particularly proud again of the relentless drive towards Ultra HD which combine intensive work on standards, industry consultations, demos and now have produced five client agreements, which will be live commercial channels towards the year-end. This is only the start we still have some way to go on our development efforts, but now know what a good outcome looks like how to get there and how to get there even earlier.

Order theme that on page three our business has the foundation for growth, Pad will spend more time on the numbers, what I would like to underscore is first our ability to weather currency headwinds and produce growth on a constant and fixed exchange basis in three of the four market verticals. Two, our ability to produce top-line growth on the aggregate on a reported basis, and three our ability to continuously optimize the talent of our business to produce growth as evidenced by our nearly 40% profit after tax progression.

The regional and the vertical perspectives on page five show that Europe year-on-year was flat and if one factor are the uniform related elements, revenue growth would be markedly positive through the combination of expanding our business with long standing clients as well as prosecuting new business. North America grew well on a reported basis and was impacted by the interim renewal of the AMC-15/-16 agreement with Echo, while SES was it’s under manufacturing plus the related health issues we discussed during our Q1 call.

Nevertheless there was a progress in the mobility vertical and we achieve an excellent demonstration for the Ultra HD broadcasting targeting the cable market in the U.S., which is going to open an entirely new way for us in North America. International also has the seat for some growth in video, mobility and government.

Fixed data was primarily impacted by the translation of the strong dollar into higher local prices and this created headwinds. This would likely continue during the second half of 2015 and this puts the onus on us to always think about how our differentiation is relevant to the clients we serve in these markets and how they think about the premium that our services deserve.

Now let me clarify the column, we have succeeded in doing that in most parts of the fixed data segment, while noting that some parts are more exposed and Padraig is going to expand on that. Now think of it this way, this exposure is not recurring us from pursuing the root of differentiation relevant, which is working well for our business and even more so for O3b in this specific market segment.

In fact, if one accounts for the upside of the part of our fixed data business i.e. on the SES fleet, which is demonstrating strong sustainability with long standing clients and global clients such as Airbus, plus the business generated ultimately in the very same segment in 2015 this is greater than the exposure I just mentioned.

I certainly can’t present the precise numbers for the combined positive end on this call as we do not consolidate the O3b numbers yet. In the meantime, I can say as our strategy of differentiation relevance in the four market verticals including fixed data when accounting for O3b is working well and has further potential for growth.

We’ve already covered most points mentioned on page five about our results in the four market verticals. I will underscore that under video we’ve achieved a 13.9% growth in our HD channels in terms of total numbers year-on-year, which focus very well for the passage to Ultra HD in the years to come.

On the fixed data our approach to achieve the translation relevant is working well with our Tier1 clients. Mobility is certainly an exciting segment, which is delivering consistent double-digit growth.

Now in fact SES is now working with the major service providers such as Global Eagle Entertainment, Google and Panasonic and more to come in the second half of 2015. Government, which has been the focus of many discussions with you in recent quarters continues to present challenges as well as opportunities.

On the aggregate SES has made most of the lateral i.e. opportunities and this translated into a marked growth on a reported as well as on a constant exchange basis.

Let me shift now to the foundation of our business, which we are serving along our free account strategy. Moving on to page six, our virtualization and globalization drive is being greatly aided by our services capabilities, SES which is already up and running SES subsidiary if expanding by way of example into Africa, where this is being combined to our agreement for video related capacity, but we want to go further and in 2015 we added to the SES-4 smart cards which now gives us unprecedented global reach using a very flexible platform that presently serves more than 120 channels and growing around the world as you can see on the map in front of you.

And the feedback so far from the clients has been quite positive and again this feedback also needs to be associated to the potential capacity pull through that our services business creates. This is in fact a good segue to page eight as client engagement and feedback is intrinsic to the way we operate.

SES defines its culture along four tunnels we call the SES way of working one of them has to do with developing and bringing the best of SES to all our clients around the world. Then that promoter scores on page seven, which are based on a voice of the customer survey we conduct regularly demonstrate clearly our ability to deliver on this commitment.

We’ll be in an even better position to serve clients in the near future through our expanding fleet as noted on page eight. You’re now familiar with our scale up programs, which are adding 12% capacity on the aggregate and 21% in the international markets.

The hybrid profile of our fleet expansion this approach and that is very specific to SES means that we are optimally positioned to service the more market vertical in equally efficient manner and this approach we’re achieving among other things with deployment of the Global Geo SES fleet by end 2017. Now let me open and close quickly the topic of launchers.

Our view is SES wants to work on a sustainable basis with free progress and I’ve said this publicly time and again. Our upcoming launches rely on [indiscernible] Space and SpaceX.

These there are factors of risk with launchers. And delay is certainly one of them.

Having said that the more important point is how do we turn a delay to the extent possible into an advantage. In the case of [indiscernible], the delay in launching the full fleet of 12 satellites meant that the management had more time to build their capabilities and backlog.

And since September of 2014 O3b which starting operation by then hit the ground running, translating this same principle to SES-9 mean that we have now more time to build the backlog without depreciating the satellite and we’re making significant progress in that thing. You can think of the commercial buildup on SES-9 similarly to the one we experienced have achieved so far in the CSA and Padraig will comment on this in a few minutes.

Page 10 with ramp up of the differentiation relevance of O3b and where the business and where the business stands today with more than 40 committed clients and 25 already online plus a proven traction for the first generation of clients to upgrade their requirements in terms of capacity enhance revenue. And all that means that the backlog is building up steadily.

In fact O3b management have the privilege of presenting this during our recent Investor Day in London. In our view O3b is the living case of the dematuring in industry and presenting us with the applications of the future today.

We have indeed come a long way, but arguably we still have some way to go and Peter has certainly pointed more elegantly in his article of 13th July when he described O3b as a force multiplier of SES. Our dematuring drive is certainly up limited to O3b and as we actively engage in the four market verticals as illustrated on page 11 time and again our strategy starts and concludes with our client.

This ends the business review and we can take question after the financial review, which I will hand over now Padraig.

Thank you, Karim and good afternoon, everyone. For the first half results as reported delivered a steady performance with our globally diversified revenue considering to an important increase in reported results.

Our first half revenue as reported grew 6.4% benefiting from the stronger dollar with reported EBITDA growing 6.7%. At constant FX both revenue and EBITDA declined 2.6% and 2.5% respectively and I will come back to this in quite some details.

Continued asset management of the business has improved the EBITDA margin by 20 basis points, or 10 basis points at constant FX. If we look at the profit after tax of EUR340 million, this was actually one of the best recent half year performances we have had increasing 13.9% as the increase in the reported revenue was supplemented by lower financing cost including an FX gains and effective tax rate of 14.8%.

The profit of the Group declined as foreseen by 5.4% with the growth in profit after tax offset by the higher share of losses notably reflecting the commencement of services in September 2014. With respect to net operating cash flow we saw a very strong performance in the half year, with net operating cash flow of EUR784.4 million increasing by 45.8% compared to the first half of 2014.

With the positive EBITDA cash combustion ratio of 106%, supported by upfront in payment in relation to hosted payloads and working capital improvements. The growing cash flow and reported EBITDA contributed to the results in a leverage from 2.85 times net debt-to-EBITDA, 2.6 times with the previous timing impact, which I referred to in previous calls of the upward pressure on debt due to the stronger U.S.

dollar washing out by the end of the June. Our contract backlog remains strong at EUR7.4 billion increasing by EUR200 million versus June 2014 and representing 3.9 times of 2014 revenue with a weighted average remaining customer contract life of 8.4 years.

Now if we move on to slide 14, we see the revenue in more detail using the usual format. As the revenue benefited strongly from the translation of the 45% US dollar into euro at a US dollar rate which was approximately 80% higher than the first half of 2014.

Now as we mentioned in our quarter one call, a potential flip side of this important gain in reported revenue have pricing pressure and headwinds for these customers mainly in the fixed data verticals who buy in dollars and sell in local currencies. We have now seen this development materialize in the second quarter as the US dollar strengthened compared to the first quarter.

In particular in the fixed date vertical where the increased US dollar has let the pressure on pricing on new business on renewals. Now the overall US dollar translation effect of a 9.3% increase in Group revenues is positive and more than compensate for the foreign exchange transaction headwinds delivering a total reported revenue increase of 6.4%.

If we look at the revenues at constant FX and without the translation benefit the revenues decline 2.6%. There were two main items contributing to this, as we already outlined in our quarter one call.

Firstly to say the four transponders to Eutelsat in the first half of ‘15 compared to eight in the first half of ‘14. And secondly lower revenues on the AMC-15 and AMC-16 follow on agreement after the initial 10 year contract.

Now if we exclude these two factors underlying revenues were actually slightly ahead of prior year. By region Europe declined terrifying 3% at constant FX with the lower level of transponder sales to Eutelsat almost offset by good growth in both services and infrastructure where we had quite a number of new video contracts.

In North America we reported a good growth in reported revenue of 16%, with a reduction of 4.1% at constant FX again there are two main items here similar to the first half of the year. Firstly we had a good performance on SES government services.

So although there is continues to be some U.S. budget sequester and some pressure of renewal rates the business benefited significantly in the first half from the contribution of the two new hosted payload contracts and related funds in revenue recognition and also continued new business growth.

In fact as Karim has outlined SES government services has delivered a good year-on-year growth for the first half. The second factor is the impact of the renewal contracts with EchoStar for AMC-15 and 16 and I think we've already dealt with that.

International revenues as reported grew 13.9% and decline 5.6% at constant FX. Good growth for capacity contracted for video services was offset by lower fixed data revenues, lower government services business and as we outlined in the first quarter the migration of capacity contracted by ARSAT onto their own satellite.

If we turn to slide 15 we see the big utilization and in the press release we outlined all the positives and negatives. So I won’t go into all of that detail other than to say that compared to the 30th of June 2014, the number of available transponders declined by 12.

But the largest impact was the impact of NSS-7 going into inclined orbit whatever 74 there, NSS-6 whether let’s [indiscernible] but good additions in that in ASTRA 2G adding 18 NSS-806 repositioned in 40 and 10 transponders extra due to other fleet activities. If we look at the number of utilized transponders although you read at the time of 9 transponders in fact that was a gross addition of 25 offset by the NSS Edge capacity going into inclined orbit and the migration of ARSAT capacity puts own satellite.

An important feature in the transponders utilization for the second quarter was a growth quarter-to-quarter of 30 additional transponders, which is one of our strongest growth in recent area. And in particular what was important about that is it came across all regions we had growth of 12 in Europe predominantly on the video side and 9 each in North America and international.

The group utilization at half year was similar to June 2014 at 72.5% an increase versus the 71.4% at the end of quarter one 2015. If we move to EBITDA slide 16, obviously the reported EBITDA also grew by 6.7% benefiting from the FX uplift at constant FX EBITDA declined 2.5% with the revenue declined being partly offset by a EUR8 million reduction in operating cost.

And this reflects the continued cost focus we've spoken about before and overall this allowed us to improve the margin to 74.1%. If we speak about margins on slide 17, we see the infrastructure margin increased from 83.2% to 84.4%.

So a very good performance there. And we see the services margin increase from 14.9% to 15.3%.

Moving quickly to slide 18, and the items below the EBITDA line where we have our largest cost components. Reported depreciation and amortization increased due to the stronger US dollar, but actually remained flat at constant FX with a lower depreciation charge offset by higher intangible amortization.

In addition to the satellite entering in active service the good progress made in reduced the cost of satellite program and in particular the good progress towards the 20% reduction in normalized CapEx by 2018 is now also helping to lower depreciation. A substantial net foreign exchange gain of EUR35 million benefited the net financing cost and interest expenses actually declined period-to-period and this offset the fact that we have slightly lower capitalized interest due to the lower CapEx.

The effective tax rate in the period was 14.8% similar to the prior year and consistent with our expectations and guidance. And the share of associated loss of EUR63 million relates principally to a 45% stake O3b with commencement of commercial services in September 2014 meaning that satellites are now being depreciated and financing cost previously capitalized are now expensed and of course both of these adjustments are rather non-cash nature.

Slide 19 details our CapEx expectations for the period to 2019, no change here from what we presented you in April and as you recall this includes seven satellites under procurement and three as of yet uncommitted satellites. Now as Karim also noted earlier the seven committed satellites will add net of 180 transponders to our fleet principally servicing international markets with three HTS payloads and in aggregate these will deliver 38 GHz of bandwidth.

And this 36 GHz is broadly equivalent to 250 commercial transponder equivalents applying the rule of four which Chris outlined in our Investor Day and all of these programs exceed our 10% IRR hurdle rate for investments. So moving to the guidance update on slide 20, firstly we’ve seen a good growth from new capacity contracts with a step up 30 utilized transponders in quarter two and we’ve seen good growth from European services businesses and from the new hosted payloads won by SES government services.

In summary, we are growing in three verticals video, mobile data and government with a decline in the fixed data vertical. Now our guidance has always been conditional upon a nominal health and launch program and underlying growth expectations have been impacted by delayed launch of SES-9, which as we’ve outlined we are using to our advantage and by a reduction of capacity available for future commercialization on AMC-15 and NSS-6.

The US dollar has continued to strengthen versus the euro compared to our original expectations and due to our global revenue profile this development increases our reported revenue and profit. The flip side of this translation tailwind is that the stronger US dollar has created additional pricing renewal in new business pressures for customers buying in U.S.

dollars and invoicing in local currencies and this is particularly the case in the fixed data segment. Where our contract terms are also shorter and there is a greater price sensitivity.

We expect SES’s U.S. government business to return to growth in 2016 so that’s a very good development, supported by the recent hosted payload wins, but not quite at the same growth rate as previously envisage due to the ongoing impact of the U.S.

budget sequester, but we do expect this situation to turnaround in the medium term. As a result of these factors full year 2015 revenues are projected to be around 3% lower than the prior year on a constant FX basis with EBITDA projected to be around 3.5% lower also than the prior year, with both revenues and EBITDA growing on a reported basis.

Guidance for all other key elements for 2015 remained unchanged. Our full year 2015 earnings on a constant FX basis will benefit from the management of operating expenses, depreciation and net financing cost as well as a lower effective tax rate on a reported basis.

These benefits will be augmented by the positive impact of the stronger U.S. dollar to overall group revenues and profits, which more than offsets the related FX pricing and volume pressures we see in certain markets.

In respect of the three year CAGR, SES anticipates comparable dynamics in 2016 consistent with previous guidance, but from a lower full year 2015 base. Our revised launch date for SES-9 is still to be confirmed and as this is the most important contributor to the 2016 growth, you’ll appreciate we are not in a position to provide any further precision at this point in time.

The launch of SES-9 is a specific event which will help gain clarity as we have seen the strengthening of the US dollar is a net positive development for revenue, profit and cash flow despite having a partial corresponding offset impact on a limited part of the business. So to conclude on the guidance and on this section and to [indiscernible] after considering the health and the launch status the guidance update is essentially about fixed currency headwinds and to a lesser extent government services, which are back to growth.

But it’s also important to note that all other elements are either fully on track or in some cases better such as the earlier have foreseen commercial launch of Ultra HD which we now foresee in 2015 and the successful services rollout of O3b. So, to summarize I’d like to return to our first slide, we are increasing our global presence, developing our key verticals and dematuring the business.

Our diversified and differentiated offerings are generating strong and profit growth, we’re delivering growth in the video, the mobile data and the government verticals and are addressing the challenges in fixed data and we have now comprehensively broken through the ultra HD commercialization barrier with a number of commercial agreements recently signed including Sky Deutschland. And with that I’d hand back to Mark for questions.

Thank you, Padraig. Thank you, Karim and kindly open the lines for questions.

Yes hi, I have got three questions actually. First one, you said that U.S.

government within the U.S. segment had returned to growth, but I think you’re suggesting that it’s still negative in international, so when you say that international is returning to growth do you mean just in the U.S.

you are talking about globally? Second one is, with the delay for SES-9 which is clearly not this year now, how much of the 2015 budgeted CapEx payments are going to fall into 2016?

And then the third one was, I am just wondering why you think margins are going to go down year-on-year now given that you’ve managed to increase the margins in the first half, which is obviously quite positive development if you are taking out just a question on the margin guidance for the year? Thanks.

Yeah thank you, Sarah. I’ll answer those questions and perhaps also on the first one Karim can also contribute.

So just on the number side first of all for U.S. government, what we are saying is that the overall SES government services business has returned to growth in the first half of the year.

So you recall earlier in the year we said that we were expecting good high single-digit growth on government services and what we are seeing now is we are seeing a return to growth. There are two elements in this, you have the two important hosted payload contracts, which are very good business because they are long-term business that the company won in the beginning of the year and also in those contracts the revenue that the front end revenue recognition during this year.

So that’s being very helpful for the growth today. And then in the other markets whereas we are signing very good new business and the new business trajectory is very good.

We still remain prudent with regard to renewal level although overall by the end of the year, we expect we’ll take all this into account to be able to report a growth on SES government services, but it’s really the combination of the hosted payloads on the one hand being a very good positive and helping us to offset still some challenges on the renewal side.

Sarah specifically the sort of the two opposing dynamics that we see in the international market and in a sense it reflects the position of the U.S. government, on the one hand we have official disengagement, which means there are missions that are being brought to an end and sort of a number of renewals do not happen.

At the same time there is a reengagement by the U.S. government in a number of these international markets where you think about Africa, Middle East and others and this is generating very significant new business for us.

And so we our work where smack in the middle of these dynamics and the aggregate of all of this is positive for us.

Yeah and on the SES-9 Sarah indeed your observation is absolutely correct, of course with later launch of SES-9 this will also will move CapEx and I think I have explained before. Clearly that the way we negotiated our CapEx profile that there is an important level of CapEx which comes towards end and that way we're all expecting the IRR.

The simple reason why we didn’t update this is we felt we should really be consistent because as we don't have a new launch date for SES-9. We felt it was consistent to say while you know we can't give you more precision on the revenue numbers and is also consistent now to update the CapEx.

But of course the CapEx will move there and we as soon as we have precision that will be part of our update. On the margin side, the fundamental of managing costs and managing the product mix and pricing.

All this is holding up that’s not the issue on the margins it’s just purely versus our previous expectations as the decline in predominantly in fixed data is the decline in the infrastructure sector predominantly. And therefore has less of a release on the cost side.

So the development in terms of the EBITDA decline of about around 3.5% being more than the revenue decline purely reflecting the fact that that delta is predominantly coming in the infrastructure side.

Okay, thanks fine.

Hi, yeah good afternoon guys. So I’ve got two questions, maybe first of all to follow-up on the service question on government.

So can I just confirm that when you are talking about growth you mean constant currency. And then just thinking into next year really if some of your hosted payload revenue is front-end loaded, if the challenging conditions don’t get better next year and you’ve got that tough comp from the front loading, should we now expect a return to the declines next year?

And then my other question on the fixed data, so I understand that’s about 15% of Group revenues, can you tell us which geographies are being hit most? And given that some of these contracts are now annual contracts and some are multiyear why weren't these factors also a drag on your 2016 revenue growth?

Hi, Nick I’ll do the first one on the government and Karim will do the one on the data. So on the government to be clear we’re speaking about a growth at constant FX absolutely.

So we’re talking about an absolute year-to-year growth at constant FX. Now clearly, there is some front end revenue recognition on hosted payload and that's clearly helping this year.

But with respect to looking into next year you have to remember as well that irrespective of the renewal pressure we are signing good new business we’re delivering good new business. And so at this point of time noting that there will be and there would also be revenue in hosted payloads next year I mean the hosted payload revenue go down to multiyear contract, it's just that it won’t be as much as in the first half of this year.

But as we look into next year we'll have - we will still have hosted payload revenues with the benefit of the new business coming through. And our current thought process is that despite the fact that there is the renewal pressure may go on a little bit longer.

But net-net we should be able to balance all those off.

Thanks, Padraig. So on your second question regarding fixed data, it has to do more with the shorter contracts and so let’s say for non-depreciated applications frankly could be one of them.

And this is where for us it’s a thought process whether our geo capacity has a right to win or in fact our new capacity we have the better right to win. This perfectly give us sort of visibility on where we can depreciate, Airbus is a case and point where we can bring a regional like alone a global coverage is sort of secured level of SLAs to the client, long-term visibility on the engagement with our client Airbus and subsequently between them and the end users they serve.

So the impact for us you can think of it this way make this really on full term data contract in non-depreciated applications, which at the end of the day can be better served, more efficiently with longer contracts on our new fleet, and that sort of the transition that we are seeing. And that is the dynamic that is unfolding in 2015 are pretty much sort of reached its peak in 2015, so it has no bearing on 2016.

And in 2016 our conversation on MEO-GEO will be different.

Q. So why won’t I mean assuming the miss match is still there in currency to some extent, why won’t contracts then come up in the start of ‘16 also required be affected by pressure?

Yeah, because on the contract that we serve on our fleet and sort of Airbus is one of them. We know what sort of reengagement looks like, the terms look like and these are longer-term contracts, they are not short-term particular application for a season or a few months or what have you.

When we think about the less differentiated applications and where we sort of can better serve them from a power standpoint correlate and see and better five points on O3b we're seeing the longer contract prevailing there. So once we start being much more discerning about where each application is better served on what fleet it gives you a better position to sort of serve client on a longer period of time with sort of future proof paid pricing and being service those.

And that is the transition that we're seeing. We always took a view that at a certain point in time there is thought for our data business and [indiscernible] before me has said this thought for our data business which is probably the smallest part of our portfolio will be better served by O3b and it's not just better serve and substituted O3b will take this to the next level, which they have already done in 2015.

So we're in the middle of this transition, the challenge for you ladies and gentlemen is that we can add more specificity on this simply because we haven't consolidated O3b yet so we can sort of get into a specific discussion, but that is the transition that we're seeing. And the reason why the sort of the currency point came into report because what the currency that is sort of accelerated the phenomena of price elasticity and because of O3b has better price points versus the performance that it offers O3b is much less exposed to that.

Sorry just one more follow-up. I mean in the statements I am reading that this is a currency miss match now I am kind of hearing from you that you are being cannibalized somewhat by O3b which is kind of you so that's okay, those are different things so I am getting confused?

No Nick you have short-term businesses, short-term applications right where you are serving let’s say a client in Africa, a client in Asia. And so you can think of it occasional use, okay?

These are much more price sensitive for the pure reason that they buy from you they resell it and the relation commercially that they have with the supplies operator represent a very significant part of their cost. So they’re much more sensitive.

So that is one dynamic that we’ve explained that average thing so that is one. The second part of the question or my input answer your second question, which is why we're confident that this will not also prevail in 2016.

One is because that part of the short-term contract has been dealt in 2015. So we took care of this and I am also explaining that there is an entirely new market that we’re creating with O3b that can better serve these types of application.

And the nature of their relation even for these applications is of a much longer nature. Did I answer your question?

Okay, yeah. That's great and thank you.

Thank you.

Yeah. Good afternoon everybody three questions really.

The first one is SES-9 what’s your best guess is when it will launch I think John Mascar [ph] said that everybody who was slated for this year would get launched this year last week. So where are we on that?

Secondly could you tell us where your guidance sits relative to potential further issues on AMC-8 and 10 because you haven't quantified what affect there might be there AMC-10 relatively young satellite? And then thirdly, Nick might be happy with that answer but I didn’t understand that either.

So on fixed data where do these clients go when they leave SES, what’s your prospect to get them back? Why are they so price sensitive I think you to some extent answered that, but if one puts in the round what percentage of your business overall do you think is represented by these vulnerable fixed basic clients?

Those are my questions.

Yeah, maybe Patrick I can start with the last one on the numbers Padraig to quantify it. Overall our total fixed data business is about 20% of the total revenue, but important part of that is North America so it’s dollar and dollar the proportion we’re looking at here, which let’s say is part of the where customers would buy in dollars and all the big players who buy in dollars they sell in dollars, where the customers would buy in dollars and sell in local currency we’re speaking about a base of about 15%.

Now with in depth data 15%...

15% of data?

Of total revenues Patrick, so we’re speaking about the total 20% and we’re speaking about the pool that we’ve adjusted the guidance being about 15% of total revenues and in here what essentially we’re not essentially always losing customers, I mean it’s a very price sensitive business and your question about why has it got that degree of price sensitivity if you look at the video business the bandwidth cost will essentially be say 3% to 5% of that business. When you look at the fixed data business the bandwidth cost can typically be between anything between 50% to 70% of the business so already a price sensitive business and then you bring currency on top of it and it becomes more price sensitive.

So what we’ve been doing is not necessarily losing business, but continuing to do the business. In some cases at lower prices, but also in some cases you might have a down scope of a renewal, a renewal is done but there is less scale in it because also these customers in some cases are resellers.

And with regard what Karim saying is that look in a number of these applications, our applications that as soon as let’s say if they’ve dealt with by the O3b fleet where the pricing is because the pricing is much, much lower than the prices is at 50 is less of an issue and again this is now and I reverted in the back note to a previous discussion we didn’t get a chance to finish in the Investor Day about cannibalization of O3b this should not be seen as O3b cannibalizing SES business, because there’s also a lot of other contracts in there we discussed Shell briefly, but Shell is a very large customer of ours in the GEO world and if you go and get your petrol at a Shell station with a credit card that is going over the capacity of some of our customers. So the point is that this isn’t necessarily a story about - because of the lower price points and mass cannibalization our business by O3b it’s a currency pressure we have today, where there’s nothing fundamentally wrong with the use of satellite for fixed data.

We’re reacting to the customer pressure, which means that we’re getting lower prices on this and the good thing about this is that we have the technology in place both with our HTS states cuts, which would come up and the O3b capacity which we have today, both which we’re not yet consolidating to be able to not only address this price elasticity in certain applications, but also to be able to bring a lot more growth in that area and I think that do you want to add anything else on that too?

I mean we are in a privilege position where the first satellite operator that can offer this solution globally, these two solutions globally at the same time and we are in the middle of sort of this I think value accretive transition and what the currency exposure has done is in fact it’s created the perfect conditions for us to be able to on the one-time focus our GEO capacity on those data applications where you can have a longer relation and better stickiness with clients and also pave the way for the opportunities where O3b can have a better value proposition and we’re exactly in the middle of these two I think complementary dynamics. And on the AMC-8 and the AMC-10 we did note normally in the first quarter, but based on our analysis and based on the status in the second quarter we haven’t seen any further degradation there and at this point of time we haven’t seen any reason to adjust capacity going forward.

On the question on SES-9 we’ve tried to be - it’s a difficult one because we try to be proactive in SES-9 and we try to be proactive I would say if it launches in this quarter, if it launches in this quarter we try to be helpful in giving dates around that. And so I think at this point of time clearly as Padraig has said that they're intent to get the 2015 launch by the end of the year.

But really at this point of time given that it's so important for us in 2016 we don't believe it’s helpful to start speculating. It's still known for us and we would prefer to wait until we have the strategy on this before let's say trying to speculate on that one.

I think before you said that the real take-off of customer uptake on SES-9 would come when it was up in the air. You gave a quote saying that the piece of level of pre-loading but it really happened because the clients in that area like to see the satellite up.

So has that changed?

Well, obviously there is - yes I think there is a partial change in that as a short answer. We have as I said before we have an important direct to home capability on that satellite and it's quite targeted with different things and different market.

And obviously the fact that there is a delay, it doesn't prohibit us from going and speaking to some of the important lead and some of them - our customers adverse today as new things ahead. I mean maybe a good example let's say good analog to take SES-8 because SES-8 which was the most recent launched satellite had a kind of a similar profit about and we had the same discussions on SES-8 before and after this launch.

SES-8 today is both the 70% utilization and again a launch delay of course it's not a good thing but as we touched on earlier on from the financial perspective. And again we want to be consistent, and we didn't want to just change the CapEx and then we didn't move the revenue.

But of course I would say revenue move, the CapEx move but it does give us the opportunity Padraig to continue to dialogue and also continue to dialogues with existing partners.

Great. Thank you.

Yeah good afternoon. Just sticking with the degradation theme I guess.

What is the situation with AMC15 and 16 given that those EcoStar contracts you are looking to move across to SES-11? So with the - I guess ongoing degradation issue if there are risk that potentially you are looking for capacity to hold those EcoStar contracts ahead of any launch on SEC-11 bear in mind potential delays and I guess SES-11 been electrical propulsion will only be in commercial operation at the beginning of '17.

So I'd say I guess a backup to hold these contracts from EcoStar on other unutilized asset at the moment. Thank you.

Thank you. The short answer is no, there isn't a risk because of the nature of the degradation and the safety margin that we have on this satellite will allow us to fully serve our agreement with Eco on SES-11 is facing Orbit and at the same time, our US government colleagues are actively commercializing and inside putting clients on one of these assets.

So there is the nature, let's put it this way the nature of the degradation gives us confidence that they're still hardly long way to go so there isn't any risk on that front.

Okay. Thank you.

Hi there. It's Laurie from Deutsche.

The first question is just on the budget sequestration. This isn't anything new and all of your payers sound increasingly confident on US government spends.

So do you think there is an element of share loss on your side or was this just say a mess up in terms of forecasting and being too overoptimistic. The second question is that on short-term applications do you set to go back to this issue sorry.

But you said that you dealt with the issues now. What is actually did you mean there have you offer them lower pricing, how is this going to return and or how can you be - in 2016.

And then the third one is just a follow-up on the EBITDA, I'm sorry the contribution of the fixed data customers in generating revenues in US invoicing in local and billing in dollar. You said that there were 15% of revenue, how much are they of EBITDA?

Thank you.

Let me take on the first question which has to do with US government. So maybe you should ask the question differently, A, what has been our performance during the first half of the year?

Our US government business grew both on a reported and fixed exchange basis. So given the backdrop of what we’ve seen as a performance in the rest of the industry which hasn’t been certainly positive but I'm not sure we can talk about the share loss.

I'm not qualified to talk about share gains per se what I can firmly state since we don’t have detailed visibility on what the others would be and will not be doing but what I can firmly say is that we were able to grow both on reported and fixed exchange basis in the U.S. government so the dynamics have paid off favorably for us.

This is not to say that there aren’t going to be challenges like for the second half of 2015 and the first half of 2016 but as I said on the previous calls our approach to the U.S. government business i.e.

engagement upfront with policy maker, working with them and how they think about commercial engagement with supplied operators and so what are bringing to the finish line some of these commercial relationships means that we can deliver positive results even in a year like 2015 where nothing certainly all the dynamics maybe supportive. But we make sure that we see each and every opportunity as I said in my introduction.

Padraig?

And I would say Laurie just add to that as I said in the guidance part of the launch health which is all as I said in the guidance with all conditions on that - fixed data is relevant to that, the government is less relevant of it and on the specific point that's really we want to remain prudent in terms of when the renewal - remaining prudent on that one. On your question on the short term applications and the dealing with the issues I mean obviously one logical thing that you should bear in mind is that first of all dealing with issues also means that we can cooperate this in our update for 2015 one thing that you should bear in mind for 2016 is that it’s logical if the dollar continues to strengthen and then if the dollar let’s say strengthen to 105 or whatever this is very good for our business.

I’ve explained in our Investor Day that for each pretty much $0.05 that you end up with the dollar we picked up between 2% to 3% in the quarter revenue. But of course that were to happen and you were to have continued strengthening dollar I think it’s only fair to say that you should think about a net gain for SES but that’s potentially still having some currency headwinds on that.

I think that we’ll be looking at all at the beginning of the year and if you look back that the guidance we gave Laurie beginning of the year and you look at the FX rates we’ll be using, we’ll be using an FX rates of 120 if you look back at that point in time, and so we haven’t foreseen that we get as strong as it thought and so clearly we believe that we’re dealing with it today in terms of regaining the customers in terms of the competitors and reacting to that, we can deal with it from an overall consolidated point of view and also - consolidating in those numbers in due time but clearly the continued strengthening of dollar gives a better result to the SES shareholder but it doesn't include that you may not have some of these issues also going forward but net-net it will be a gain. On the EBITDA question, from an EBITDA so it’s probably going to end up more or less around the same Laurie, it’ll be little bit lower obviously it’ll be little bit lower which is why you’re seeing the EBITDA going down lower than the revenue but when you factor in services we have services which are in data just as we have services which are on video in government so overall the EBITDA will be a little bit more than the 15% and that’s the reason why you’re seeing we’re guiding the EBITDA to be a little bit more than the revenue but it’s not let's say a major driver in the bigger picture of payment.

When you look at our underlying cost and you can go back and look to that last reports we’re very tight on that and we got the cost down again this time around so we just want to be reflecting the fact here that this is a change in infrastructure revenue and of course change in data revenue and of course change is severance revenue, so that’s why we’re guiding for a higher reduction in EBITDA.

Okay thanks. Just going back to what you mentioned about the breakdown of the guidance cuts.

You mentioned could you actually help us out in terms of quantifying of the three factors you highlighted what the contribution of each is?

As the way to look at the cost is very simple, the way to look is that you had the launch and again our guidance is always conditional upon that, you had launching to help and let's say the government business and you can take those together, take those two things together and that's left in 50% of the overall change and then the fix data component is little bit more than 50% of this.

Okay, great. Thank you.

I'll leave at that. Thank you.

Thanks. Couple of questions please.

Firstly, can you just clarify what you're saying is that the total fixed data segments about 20% of total revenues and three quarters of this is exposed these emerging market customers throughout the mismatch in buying dollars and invoicing like in currency, and is it fair to say that about half of down rate than to guidance here it's from this fixed data impact? And the rest is from government weakness and the transponder reduction and - to that are you seeing sufficient traction yet to consider consolidating A3 a bit sooner particularly if your legacy revenues now at risk if currency stay where they are today.

Thanks.

So on your question maybe perhaps I say that again because obviously it's still not 100% fair. So what I am saying is that essentially we're applying the currency headwind to our international business to our business outside of the US.

In Europe our businesses predominantly video. So we don't need to speak about data.

And in the US it’s predominantly SES government services. So for the business that's essentially outside of the US in the end game this is essentially being procured in dollars and then those customers are walking in low currencies in those markets.

And with this the overall breakdown of the impact the fixed data was by far the biggest settlement and that was greater than 50% and then what I said is the health launched change and the government altogether was less than 50% and probably more or less fit equally between those two pockets.

Thank you.

So on the second question our - it's 100% driven by our business strategy as I said time and again there are four verticals we want to move on a positive projected and three of them are firmly on this with one of them ahead of our objective particularly on video which by the way represents about 70% of the top-line of SES and I think we need to appreciate that we're the first satellite operator that was able to break the sealing of the commercial arena prior definition. Remember vividly on the same call three months ago there was question asked whether the standards are going to line on, whether we get the line across the - system what have you and I always said look it's never static answer, it's all about evolution and it’s all about having alignment when is a good starting point to start from and then move on and we're at that point of time.

our four process on - and on ability we have double-digit growth and that double-digit doesn't - so when we started reporting by verticals you'll get to appreciate what I am referring to but I guess we'll have to wait for next year. But to go back to the output on O3b where does it best compliment and compliment not on plus one but sort of exponentially what you are doing.

And there are cases whether it's in Africa or in Asia, probably in Africa we're cost serving clients, that's the mobile network that is relying on geo capacity for backhauling and trunking and using O3b for particular parts of the network that require much higher power either performance that we deliver a much lower latency. And there it will make much more sense for us to be able to combine seamlessly these two offered in a single commercial proposition.

We can do that today because we have two separate companies because we do not manage this company per se. So our thought process is how do we accelerate our patents.

Now if the question is based on the progress that you are seeing with O3b is this accelerating your consideration as to the consolidation of O3b, the answer is yes and I would like to think that next year like when we have this conversation this question would not have to be reason. Thank you.

We'll take one last question please and then we'll close.

Hi there thank you. It's just one question a follows up on what you just said, Karim.

My question was if we start to see the US dollar tank and conditions improve for those customers who are affected by the FX to-date to actually begin to renew that business and pursue new projects. As the condition is changed it sounds like that even in those that bad situation you would probably feed that reserves into business towards O3b rather than back onto your geostationary fleet.

Is that a fair interpretation or will it be a much it won't be quite as back why is that?

I think both of them are going to benefit because there are number of things that we're doing in our fleet that O3b could not be doing. And it's strengthening of the dollar will create a much better sort of conditions for us.

So no it won't benefit smoothly. O3b not replace, some of the applications that we deliver on our fleet it's simply cannot do that.

The best definition is or the best scenario is where you can combine both of them. And so if during the second half of the year the dollar moves in a manner that is less favorable on the exchange rate.

I think it will play favorably for us. But we can't make that assumption I think we have to work with the data that we have today and we'd rather be prudent in our communication with you as a community.

And so we're working on the premise as a base case and this is not for us to sort of or forecast on this. But as a base case we would sustain the exchange rates we have today.

And based on that we know what the trajectory is going to be in our fleet we also know what's going to be the trajectory in O3b and hopefully by the end of the year or early next year you'll have more visibility on the latter part of my conversation with you.

Is it just as a brief follow-up? Is it fair to say that this day you were always planning for this day when this particular book of business was going to be going over to O3b?

But just the whole FX situation perhaps accelerated that agenda.

Partly yes so I've made that comment. Look we're in a middle of a technology transition.

The same one that we have been managing proactively with all very cheap it's no different. I mean we've been working on this for years and Ultra HD took a good three to four year of work.

We're in the middle of this. We're the first satellite operator.

Again I would like everyone to share this that has go to the market a global UHD fleet and a global geo fleet. And we are in the middle of this transition.

To your point, I don't think it's black and white, one does not replace the other because there are certain applications that one cannot do to the other. But if you ask both numbers, they are far greater than whatever exposure we have on the fixed data in the fixed data segment.

So that I hope that this sort of gives you a sense of what I'm trying to refer to but again I'm in no position to share with you explicitly the numbers today on the call.

Okay. I had one final follow-up but I think I've probably taken too much time.

I'll follow up offline.

Thanks Giles, and thanks everybody to participating into today and joining us. You have our coordinated, if you should have any further questions and till then have a good weekend.

Thank you.