Richard Whiteing - IR Karim Michel Sabbagh - President and CEO Padraig McCarthy - CFO

Giles Thorne - Jefferies Paul Sidney - Credit Suisse Michael Bishop - Goldman Sachs Laurie Davison - Deutsche Bank Wilton Fry - Royal Bank of Canada Nick Dempsey - Barclays Patrick Wellington - Morgan Stanley Eric Beaudet - Natixis Sarah Simon - Berenberg

Good morning everyone and thank you for joining the SES First Quarter 2017 Results Presentation. I am joined this morning by Karim Michel Sabbagh, President and CEO; and Padraig McCarthy, CFO, who will present the highlights for the quarter.

This presentation document is available on the Investors section of the ses.com website, if you do not already have it. As always, I would ask you to note the disclaimer at the back of the document.

After the presentation, we will of course take your questions from the conference call line. With that, I will now like to hand over to Karim.

Thank you, Richard. Good morning, ladies and gentlemen.

And thanks for joining us today for the presentation of the first quarter results. As I’ve noted in my written comments distributed earlier this morning, our results are fully in line with our plan.

Most notably, we returned to growth in the three data-centric market verticals we serve. And as an outcome, we delivered a 12.2% growth in revenue on a reported basis and a 1% growth on a like-for-like basis.

Importantly, net profit was up by 11.5%. Our differentiation strategy in the four market verticals we serve is paying off.

And we are well-served to deliver across all facets of our business in 2017. Naturally, we continue to invest in innovation and in advancing all the elements of our capability system.

And a first notable milestone during the first quarter was a successful launch of SES-10 on the first ever flight-proven rocket. Now, with this historical achievement to our long-standing partnership with SpaceX, we can expect considerable improvements, A, in the cadence, as well B, in the economics of satellite launches going forward.

And it is therefore a model that we will increasingly leverage. A second essential milestone in the evolution of our capability system was a restructuring of our market-facing activities around two natural business units, SES Video and SES Networks.

Now, these NBUs represents two dedicated communities that will enable us to mobilize all the required resources to serve our customers in the same segment with improved time to market, better efficiencies and accelerated innovation. So, for our customers and in my opinion this is what matters at the end of the day that we see improvements across the continuum of structuring the network architecture that needs very specific communication requirements, productizing our solutions such as high definition and ultra high definition distribution over linear and non-linear platforms, rollout of maritime plus or broadband plus or government plus or even software defined networks over our unique MEO architecture, the tailoring of products to specific servicing and finally, having the ability to monitor and significantly enhance the experience of the end-user, they are reaching to our intelligent network.

So, I am very excited about the capabilities we are putting in place and the accelerations we are seeing in our business. Page four summarizes our performance in the video segment, which has illustrated 4.5 growth in reported revenue.

There were some seasonality factors in our services base and its impact gradually faded towards the end of the quarter. We are also managing actively the transition to higher definition distributions, i.e.

high definition and ultra high definition. And as we have done it in previous years, this will be achieved over the course of 12 months at a faster pace versus the rollout of improved compression standards, meaning that we’re reaffirming our stable to slight growth objectives for 2017.

The supporting dynamics are already the 6% growth in high definition channel versus the first quarter of last year and the continued attraction in ultra high definition, we have now 22 commercial channels plus 600 cable trials in the U.S. announced earlier this year.

Now, also well set to expand our video neighborhoods through our most recent completed programs, namely SES-9 in Asia and SES-10 in Latin America. Now, I am particularly pleased with the way MX1 has come together as a result of combining the capabilities of SES platform services and RR Media.

The notable achievements in my opinion during the first quarter include A, the repositioning of this capability with Sky Deutschland, in addition to the recently awarded mandate of delivering linear broadcasting globally for major subscription video on demand platform. Now, this mandate in particularly validates the thesis we’ve advocated in recent years regarding the complementarity of linear and non-linear viewing, especially that is being pursued now by a non-linear major.

Moving to page six, our enterprise business has returned to growth with 19.7% progression in top line on a reported basis and a 0.6% growth on a like-for-like basis. This was achieved through a combination of accelerated traction in our telco business and more general terms of strengthening traction of our products and solutions with a managed services component.

Mobility on page seven continues to demonstrate strong traction both in aeronautical and maritime with a 126% reported top line growth and a 63% growth on a like-for-like basis. And it’s quite differentiated in our ability to put to work our full network architecture, i.e.

while being inclined orbit and high throughput either in MEO or in GEO to serve clients with broadband solutions that are optimized to their requirements. And because of our unique network architecture which is increasingly distributed, we can offer this value to our customers.

Now the return to growth momentum was also marked in the government segment, thanks to our increasing reach in this market and the stabilizing U.S. government component.

So, with a 4.5% reported growth and 2.4 like-for-like progression, we are reaffirming our objective for a stable to slight growth in revenue for 2017. Page nine is particularly relevant as it reinforces the thesis of building differentiated capabilities in data-centric verticals and as a result being positioned for and delivering top line growth.

Now what we have seen in recent months is increasingly complementarity of our distributed network architecture i.e. being able to serve ultimately our customers with our global assets, based on their requirements and as related to specific applications and geography.

So, what we have seen on recurring opportunities where data-centric clients or to one system architectures are being introduced to a complementary architecture. By way of example in maritime our GEO architecture is being used now as an essential complement to our MEO architecture where the latter already had a strong foothold.

In the government segment, particularly with the US government, our MEO architecture is making inroads into established programs. So, I’m not talking about new programs that we opened up O3b.

I’m talking about the established GEO centric programs where now O3b is being introduced. And so building on already established GEO architecture, we are being able to introduce our MEO architecture.

And in some cases, MEO is enabling us now to reach government clients we were not able to serve in the past and now we can do it in a differentiated manner. Now, I conclude my remarks this morning by reiterating, in fact my closing notes from the briefing of the 24th of February wherein I confirmed our single minded objective of delivering profit growth and return.

And our plan to differentiate into four market verticals is delivering tangible results and growth, and our disciplined approach to managing our business particularly through our financial framework which we established in 2014 is enabling us to focus our investments on essential programs with the continuous engagements of our clients. And on this note, I hand over to Padraig.

Thank you, Karim, and good morning, everyone. Let me start with the financial highlights on slide 12, which were fully in line with our expectations.

Revenue as reported was 12.2% higher and at €540.6 million. So, you will see in the presentation that in addition to the reported results, we’re also showing for variables like-for-like variables, which assume RR Media and O3b were both consolidated from the 1st of January 2016.

This better reflects the underlying financial performance dynamics as a like-for-like disclosure neutralizes the impact of consolidating these companies for only part of 2016 and provides a better indicator of underlying business performance. On this basis, revenue grew by 1%, EBITDA was 0.4% higher as reported and down 1.2% like-for-like.

The 8.2% like-for-like increase in operating profit resulted in an improved operating profit margin of 34.5%, which I will speak about shortly. Profit of that group, as reported of €128.4 million was 11.5% higher than quarter one 2016; this is due to the higher operating profit, lower financing costs and share of associates.

An at 3.05 times, net debt to EBITDA remains in line with our financial framework, and contract backlog also remains strong. If we move to slide 13, it shows the revenue development in more detail.

Total reported revenue grew 12.2% and as I already said, like-for-like revenue by 1%. Looking into more detail by vertical on this development.

Video which represented 65% of total revenues declined 4.2%. Now, around 60% of the decline was due to the timing of certain revenue streams which by definition can have a periodic impact in the context of one quarter but which will normalize on a full year basis.

As an example, this will include occasional used revenues of a short-term nature or services revenues linked projects all of which normalize over the year. Excluding this, video revenues were 1.5% lower.

This reflected the timing of MPEG-4 conversion ahead of future transition to HD in Europe with 63% of SES channels now being broadcast in MPEG-4. We expect growth in video to be progressive over the course of 2017.

This will include the additional ramp up of SES-9 as well as the contribution from SES-10, which will start contributing revenue from June of this year and both of which will contribute to a full year video result of stable to slight growth. Enterprise, which represents 13% of total revenues has returned to growth.

As Karim already outlined, this reflects the expansion of SES Network science especially under MEO fleet. Mobility continues to grow strongly up 63.3% and now represents 9% of total revenue.

First quarter mobility revenue benefited from an important upfront contribution of around €17 million from the sales of capacity to Global Eagle. Excluding this, mobility grew by 8.4%.

Governments, which represented 11% of total revenue has also returned to growth with like-for-like revenues 2.4% higher. Growth in global government revenue was complemented by further stabilization in our U.S.

government business. Turning now to EBITDA on slide 14.

EBITDA as reported increased 0.4% and was 1.2% lower like-for-like. Revenue growth in the quarter was offset by an increase in variable cost of sales including deploying the initial network flows to the clients.

Once in place, customers can scale up their bandwidth requirements with minimal incremental OpEx. Higher sales of HD+ [indiscernible] also contributed to the increase of variable cost.

And on an EBITDA margin on a like-for-like basis, the first quarter was 66.2%. Moving now to slide 15 and depreciation.

the reported depreciation includes O3b and RR Media depreciation and when adjusted for like-for-like basis, reduced by 12.7%. The net changes in the GEO fleet depreciation contributed 15% of the reduction while lower O3b depreciation accounted for the remaining 85%.

The O3b reduction relates to the end of depreciation for the first three satellites. So, this significant improvement in depreciation resulted in like-for-like group operating profit margin improving from 32.2% in quarter one of last year to 34.5% in the first quarter of this year.

Net profit on slide 16. We invest the movements in order rising and financing costs and other P&L items, so financing costs included a net foreign exchange gain of €7.1 million compared to a net foreign exchange loss of €3.5 million in the first quarter of 2016 and quarter-to-quarter impact being favorable €10.1 million.

Net interest expense was in line with quarter one 2016, as additional finance costs from RR Media and O3b were offset by lower same scope net interest and higher capitalized interest. The overall effective tax rate was 17.7%, which was in line with full year 2016 after excluding the nontaxable O3b gain; and with O3b now fully consolidated, there was no share of associates in quarter 2017.

Finally, profit of the group of €128.4 million represented an increase of 11.5% due to the absence of the share of associates, lower financing cost and higher operating profit. On slide 17, we see the net debt to EBITDA, which is at 3.05 times at the end of March 2017 is well within our threshold.

As a remainder, this calculation applies to rating agency approach of treating the hybrid bonds at 50% debt and 50% equity. The group’s fully protected backlog stood at €7.8 billion.

And finally, turning to the outlook slide on slide 18, this remains unchanged from what we presented in February. On a like-for-like basis, we are targeting stable to slight revenue growth across video and government for 2017, complemented by a return to growth in enterprise and strong growth for mobility.

Just along with all, the rest of the outlook remains unchanged from what we previously presented. And on that note I’ll hand back now for Q&A.

Thank you very much. Good morning, everyone.

I had three questions, please. The first two are on video.

And so first question is to really try and tackle the video questions coming out of the quarter head on. Could you tell us how many times throughout the history of your business you’ve seen a video compression migration never deliver in associated migration to a higher video quality, be that, at the time of the compression migration or in the years thereafter?

And secondly, virtual reality. We’ve now seen the first commercial virtual reality announcement in Europe, albeit quite a niche one.

I am sure this is something you will go into in more detail in June. But could you begin by giving us a sense of the transponder capacity needed to deliver virtual reality content?

Previously, you’ve given us relative metrics for HD and Ultra HD to be useful for us to begin gauging the longer implications of what virtue reality, people and the demand. And then, lastly, moving to mobility, you now signed two deals for inclined orbit capacity with two different retailers who used in aviation application, it’s rather backing the whole idea that wide beam has no role in the area of mobility or work [ph] that high throughput, cannibalize wide beam.

So, it’d be useful if you could expand a bit on why you are being able to sign these deals? And so specifically what is the capacity giving Gogo and Global Eagle your HDS payload comp?

Yes. So, Giles, I’ll cover the first question.

And so, the answer simply is that we have never seen a case that compression has resulted in the end with the use of less capacity. What we have always seen is that our customers are using compression to innovate on the quality, the service that they are delivering.

If you look at our impact for penetration today which did increase strongly in the first quarter to 63%, and you look at where that was three four years was, it’s 40%, and you go back and you look over the periods of time year by year, you will see that every year we continue to grow video. And so whether it was the movement from analog to digital or whether it’s going from digital world from MPEG-2 to MPEG-4, we have always seen the broadcasters use compression, innovative quality of service.

And really, you should not look just at the first quarter here because the first quarter you see -- quite often, you have ups and downs but essentially we’ve never seen compression being negative.

Giles, I’ll take the second question regarding virtual reality. So, I suggest we talk about this in greater details when we get together in person during our investor day.

But I would definitely confirm that this is an emerging sub segment into our higher quality, higher definition experience that we want to create. MX1 has been doing quite significant work in that vein.

And I would certainly invite Ferd and Evie and John to sort of expand on this, including addressing your question regarding the transponder requirement. Because the thing that I would like to underscore, this is not just of providing the distribution channel as such but also providing the network architecture on the side and between one side and the other to be able to create that experience which MX1 was able to do during the Super Bowl game recently.

Taking over also the third question, so you are absolutely right. In client, capacity is moving to be very valuable.

I wouldn’t put the relevance of this on one criteria, and we have always viewed our differentiation and mobility as value stock. So, what inclined orbit brings to the table are number of things.

One is the assets that you are putting in place have the wide coverage area. It starts with that and obviously the performance of the satellite.

But the coverage area is absolutely instrumental. It has to be on the relevant foot.

And because of our scale and because of the diversity of our assets, we are pretty much in a unique position to be able to answer that. The second one is it’s being used particularly in situations where rapid augmentation or i.e.

scaling of bandwidth is required. And so, we can bring in these assets very quickly, either these assets are located where the traffic is supposed to be or we can relocate these assets and we have to have the orbital slot as well as the spectrum.

The third one I would say also is -- are the favorable economics. The fourth one is very importantly, it’s backward compatible.

So, when we have an IFC operator that has to scale up the bandwidth and the coverage or the delivery for airplane within certain SLA, they can do that immediately with our inclined orbit asset and all of this is backward compatible. And the last one I would say is very important parameter is it is providing further resilience to the network that they’re building, i.e.

we don’t end up with networks that have a single point of failure, so it may have a highly sort of valued asset that performs very well, but if there is a technical mishap on this asset that creates on its own a single point of failure. And so, the resilience is very important to our aeronautical client.

Yesterday, I was in a meeting with one of those, one of the seniors in the airlines industry and resilience is one of the instrumental elements as part of the whole process. And the regions that we were discussing was a region where we are able to deploy multiple assets specifically to address the resilience question.

So to make a long story short, inclined orbit asset allows us to sort of bat across this resistance. I hope this useful is, Giles.

Great. Thank you very much.

Thank you very much, I also had three questions, just starting with video. Is there any way you could share with us any feedback you’re getting from specific broadcasters, obviously without naming them, but just specific examples of broadcasters that have moved to MPEG-4 over the past 12 months and what their intentions are?

Just really trying to obviously get a feel for whether this is in anticipation of a migration up to HD and ultra HD. And secondly, how much is the improvement in video over 2017 in terms of the growth is driven by your capacity, how much is driven by the migration to new viewing technologies?

And just lastly, in the past you’ve given an update on the percentage of customers, O3b customers but if we contracted new capacity, I just wondered if you had an update as of the end of March. Thank you.

So, let me start with the third one, that one is easier. So, the last time we talked about it was 65%.

There were couple of announcements recently, so that number has gone up probably to 70%. I’ll move straight to now to the first question, which is the migration to MPEG-4, sort of what are the conversations that we’re having with our clients.

And they go exactly in the direction that we have raised which are -- it is accelerating their passage to HD but certainly also it is moving forward the advent of ultra HD. Now ultra HD, what is very interesting is the discussion is not just about shifting content A from one standard to the other; it sort of also introduces an opportunity in our conversations with our clients who sort of think to what is going to be the differentiated content that they can bring in and how do they monetize it, because that’s as important to them as sort of creating an improved viewership experience.

So, it puts us in a very good position also to try to contribute to that process. And in some MX1 is also coming into the equation because MX1 can be brought sourcing the content as well as the distribution of the content, both in linear and non- linear.

So, your thesis is absolutely right. And they go hand in hand.

So, I haven’t been part of conversations where a passage from one standard to the other is done with a view that the intent is to maintain the same standard. That hasn’t happened.

Padraig, do you want to take the second question?

Yes. And Paul, the way you should look at video for the full year and maybe just bending off the first full year.

So, on the first quarter, we had compared to first quarter of last year, the occasional use was lower in the first quarter. We also had lower services revenues which related purely to the timing of some of the tech-com projects.

And we’ve had that scenario before by the way; you see that quite often. And if you take those elements into account, that explains over 60% of the reduction.

And the way to think of the full year product is just think of that washing out, because that’s just in a quarter basis noise and these things normalize out over the year. And then the way to look at the remainder, which is a reduction of 1.5%.

So, on the positive side, we continue to ramp up SES-9. And so, take the SES-9 benefits in the first quarter that’s a benefit overall of about 0.5, 0.6% and then the net reduction was just related to the effect that we had very strong acceleration of channels in the first quarter impact for us.

So that’s kind of looking at quarter one. Now the services part will just wash out and then just to deal with the other part, the drivers for the way to think about SES-9, this will continue to grow through the year.

There are 53 incremental correspondences with contracted 30% of it and there you’ll just see just continuing to ramp up. The second driver that will come in is that will bring SES-10 online in June.

This is 27 extra transponders, so you can also get an indication there that this will ramp up during the year. And then in parallel we would consider that the time we saw in the first quarter due to MPEG-4 will also begin to wash its way out, because we did have a number of new HD channels come on board quite late in the quarter.

And overall, this gives us -- these dynamics give us confidence that we see video for the full year stable to slight growth. I hope that answers the question, Paul.

Yes. It’s very helpful.

Thank you very much.

Just two questions, sorry to keep on the video point. But if we take the comments from the fourth quarter where you said there would be no negative pricing changes on video, and then we take the commentary from the first question where, you’re saying that there is no negative impact on capacity from incremental migration to MPEG-4.

And then the third point, the only 60% of the decline in video is attributable to the tuff comp and the one-off type revenues. Then, accounting for the extra benefit of SES-9, it would still imply the core video is declining.

So, I’m wondering what other area is declining, if all the other areas are stable. And then, secondly, it would just be really helpful if you could give us some indication around the margins and how you expect to hit the outlook of roughly stable for the year, because it feels like in the first quarter there was definitely some higher cost of sales.

And then, secondly, the margin should have actually benefited from the one-off GE 17 million because presumably that’s very high margin? Thanks very much.

So, on the first -- on your first question to be clear, my earlier response to Giles’ question is not related to the quarter, my earlier response because -- I understood the question is clearly, what have you seen over the longer term with respect to compression, to be very clear. But indeed in the first quarter, we have seen a decline in the revenues purely because of the timing of an important step up in the number of challenges in MPEG-4, which I think in the longer term -- medium term is very good, because it moves us further down depending on the compression.

And so, as I said in the first quarter, if you back out the positive impact of SES-9 that step up in MPEG-4 was an impact of around minus 2%. But again, over the longer term, we haven’t seen in our business whether it’s going from analog to digital or also the developments within digital.

We haven’t seen that compression has a negative even though you may have some ebbs and flows in the period. Coming then with the -- and so on the video and the developments in the year, I think there is nothing else other than what I have already explained there, the difference being that compression comments to Giles is over longer term and we will now recover from this minus 2% in Q1.

Looking now on the margin, the key development in the first quarter is the increase in variable cost of sales and the variable cost of sales is driven by the fact that there is a very strong ramp up in O3b business and there is a cost of sales associated with this. Once you sign up the customer, once you install the networks, once you put the networks in place and then obviously as those customers are upgrading, they are getting a better leverage in that cost base.

And then, also in the first quarter, there was within the mix of HD plus, there was a higher than usual amount of cards sold, which have a higher cost of sale. So, the way we see the margin of the year progresses and that’s -- and by the way, there is also certain cost of sales associated with the Global Eagle.

And so we have to factor that as well. And so, the way we see now developing as the year goes on is that you will have the underlying continued development of the revenue.

And we also will continue to leverage the O3b business as that business ramps up. And that point is that our fixed cost actually in the first quarter remains flat.

So, as revenues will grow, we would also continues to leverage that.

Thanks. And just maybe to follow up on the O3b point.

So, going forward, we should really expect much of the growth to come from existing customers as opposed to adding on new customers, because I would have assumed that you are still very much in the ramp up phase and we should have expected quite a bit of new customer growth as well?

No. It will be a function of both.

But obviously, as more and more customers you have as a percentage of your overall customers and of course the digital customers as well, but more and more percentage as that your revenues are coming from existing customers which is natural as you’re getting the business, then as those customers increase the capacity that they have on the network that’s the positive from the cost leverage perspective.

Just the first question is just to follow up on this underlying video number. You mentioned minus 2% ex-SES-9 for first quarter.

Can you just remind us of what that was for full year 2016 and the fourth quarter? And then, the second question is for the full year 2017, how much impact within video you should be expecting from SES-9, SES-10?

So, when we are thinking about your flat to slight growth for the full year, what is the underlying number reflecting? And then second question is just to fully understand how you end up with worst revenues as customers move towards HD?

So, I would have thought that the customers would have been forced to contract the extra capacity for HD under long-term video contracts before they start their shift to MPEG-4. So, why is it happening in reverse?

Yes. So, the second one, Laurie is clearly timing.

That’s quite normal and we have seen that before. We have seen quarters before where you would have that development, then you have seen the full year growth.

On the -- looking at SES-9 and SES-10 over the full year, I would -- without going into the level of detail, I would think that looking at around 1% in terms of development overall is reasonable positioning, maybe little bit more. The key -- so we have good trajectory in SES-10 and then we have -- on SES-9 and SES-10 coming in, in the middle of the year where then we start looking at the ramp up on that one.

And then, your question about how should we look at this development and the previous year’s. So first of all, from a macro basis, which is the point I made earlier, if you look at the MPEG-2, MPEG-4 switch over the last four or five years when we have gone from 40% to now 63%, we have seen over those years that overall revenue has increased.

So that kind of makes -- reinforces the larger point. And then last year, we have seen an increase, an overall increase of 0.4%.

And just to put some more numbers behind that, if we go back to the first quarter of 2016, just to give you feel for the MPEG-4 conversion, we would then have had 67% of the challenge in MPEG-4, and now we have 63% of the challenge in MPEG-4. So, I think all of this reinforces the point that net-net, we will continue to see growth here.

But, clearly you are going to have some timing elements from quarter to quarter, which because we are getting with very small part of time, very small number of months at the start of the year, doesn’t represent the underlying trend.

Just to get back on SES-9, SES-10, that 1% you referred to, is that 1% of the group revenue growth, 1% of the video segment? What was that 1%?

Yes. So, it would be -- if you want to put in the video terms, it’d be little bit more than 1%, the video development.

So, that’s the overall video development including SES-9, SES-10. The question was if you excluded SES-9 SES-10, what would that be?

I am sorry, Laurie. I don’t fully understand your question.

Can you say it again, maybe it might be best, Laurie if I asked Richard to follow it up with you. Okay?

Okay, sure.

Yes. Good morning.

Your developed markets video channel counts looks have gone up by around 3%. Obviously the video revenues overall have come down by 4% like for like or excluding the occasion use, down 1.5% I think you said earlier.

So, can you just give us a handle on underlying video ARPUs in developed markets? Because if you put the two together, looks as if there -- there seems to be crumbling.

So, I just wondered if you could quantify the ARPU on video in developed markets. Thank you.

Yes. So, overall, in developed markets the -- excuse me, is your question on developing markets or on -- yes, so on developing markets.

Developed, so Europe, US.

No. In the developed markets, we’re seeing pricing remaining relatively stable.

I mean, if you look at the overall -- if you look at our overall average price per transponder for the group as a whole, this is -- comparing it to the same period of last year, this is remaining stable at around €1.7 million. But specifically now when we speak about the pricing vis-à-vis the developed market, so the first point I would say is that we didn’t have any major renewals in the first quarter.

And in the European markets, the pricing is remaining relatively stable for each of the individual markets. But there are differences within the individual markets.

In the North American -- in the North American markets, likewise we haven’t had any significant renewals, and we’re also seeing the pricing remaining relatively stable there. Now, overall, the average price of course, overall, the average price may go down as we grow SES-9 and SES-10, but that’s purely a mix impact because the pricing in the developing markets tends to be more -- it’s at a lower level than in the developed markets, but we will see that more as a mix element, and we factor that into the economic model in those markets where from how we approach the market and also how we build the satellite, we deliver the same EBITs and EBITDAs to those markets despite having a lower average price.

So, just to follow up on that. So, the ARPU dilution you see at the moment, is basically due to developing markets, not developed markets.

Is that correct?

It would be more based on the mix, small base, if you look at the mix because as we grow in the developing markets as that grows and as the new capacity is going into those markets then that capacity has a much lower average price per transponder compared to developed markets. So, it’s more a mix element rather than something happening different in each individual markets.

So, we need to separate the question into two elements, one is what are the facts behind the ARPU, whether these ARPUs are in the developed markets or the developing markets. They are different.

Historically, we’ve been very clear about this, simply because of the technical reach that we have seen. And so, the second question is are we seeing a particular trend in this pricing?

In the case of the developed market, they have been sustained and they are constant going forward. In the developing markets, as Padraig had explained in previous conversations, we enter these markets at the price point as the technical reach builds up a premium or we further have the ability to monetize these.

So, on average, the more we grow our commercial wedge in developing markets, the blended ARPU tends to evolve to a lower level. Having said that because of our business model, we were able to also improve our margin overall, while sort of our growing our wedge internationally.

Now, I want to come back to sort of some of the questions that came back earlier regarding the number on video. A large part of that number is due to the seasonality of services related out of our business and there is a particular set of mandates that we were able to complete last year that we are not completing this year.

In fact, we’ve seen the impact of this headwind fading out towards the end of the quarter and it’s only one part of this which has to do with timing of as we roll out better compression standards the evolution from SD to HD, that is only a fraction of it and that is the timing. Again, we take a view of our business that is not a quarter one.

You can certainly accelerate SD to HD to ultra HD, but it has to be done on our terms. As I’ve said in the Q3 results when there were questions about one of our market segments, I said if we have to wait another quarter, we will wait until we do with terms that are equally adequate to us and to our clients.

So, these terms have been set out, the impact of this will be washed out during the second quarter. And that’s really the impact of it.

I’ve got three questions left. So, just to revisit Laurie’s question on why you would see volatility in revenues on a quarterly basis or even on annual basis due to a mismatch between compression and move towards HD.

Doesn’t that get smoothed out by the fact you have long-term contract that you’re customer are making plans with this balancing act when they renew that contract and therefore it gets smoothed out or have you seen customers renegotiating contract? I’d like to get more detail there.

for Second question just on the O3b. Have you seen just O3b itself, have you seen any sequential improvement in the revenues there between 4Q 2016 and 1Q 2017 and do you expect any sequential improvement in the next couple of quarters for that block of revenues?

And last question, the other line, the comps here get a lot tougher in the next three quarters. You had a big one-off in from Global Eagle and mobility.

If you put that together, it makes it difficult to do even 1% in the next three quarters. So, is it as good as again for the year?

So, Laurie, I will start with the final one. So, the short answer is that we believe it -- as I said earlier that growth is progressive throughout the year and that we will see improvement.

It is correct that the comparables and others become more challenging as the year goes on. We’ve been very transparent on that previously and saying that we’re -- believe that we’re going to have growth in all the four verticals, in video and government side stable to slight growth.

But what we’ve also pointed out is that we had in total 40 million of order revenues last year. And nominal run rate for that is somewhere like around 10 million.

So, that is a factor to be considered as the year goes on. On the Global Eagle amount, what I would say on this is that it’s not -- well, first of all, this is story in the outlook, an important point; and secondly the way to look at this is that we had a similar stream of revenue last year, and there is also ongoing revenue coming from that contract.

In addition, there they have been important contracts with other providers which are ongoing recurring revenues and in particular, we speak about Gogo here. And then finally, we also have the new satellites coming in, we have SES-10 coming in, we also expect to get some revenue towards the end of the year from SES-16 which is on track to be launched during the second half of May.

So, those elements also have to be taken into account throughout the course to continue developments on O3b.

And this is a good segue to sort of clarify also how our confidence and our conviction regarding the rest of year. All the programs that we are launching this year starting with SES-10 it was done, SES-12, SES-14, SES-15 and SES-16, each one of this is being launched with very significant client commitment that has already contracted.

That impact is already reflected in our highest ever backlog numbers that we’ve been producing in recent quarters. So, second point, I look at SES-16, it has two of the largest government related contracts that we have signed, probably the industry has signed outside the U.S.

government. SES-16, the SES Payroll is almost fully committed and has been committed to a number of the announcements that we put out over the past two years.

As such, all of this is giving us very strong momentum as we put out these programs. Now, in answer to your question regarding O3b, the answer is yes.

It is a sequential build-up of the revenues and it’s being done in two manners. One is as per our recent announcement, existing client taking up additional capacity, either an add-on or to at the point of -- at the junction of where we are renewing the agreements with them; and B, is by introducing O3b to new clients, particularly to existing SES clients.

And I was recently in the U.S. and through my conversation with our U.S.

government colleagues, are very pleased to see that O3b being rolled out into established programs, i.e. within these programs there is the ability to expand service orders that would be able to bring in O3b capability on board and that is in accelerated passion that is coming on top of what we are doing in the marketplace.

And maybe on the O3b one, I think you specifically on the quarter. So, as Karim said, we saw a sequential growth there.

And the question on going back to Laurie’s point about metro HD and why it would be lumpy?

We are speaking about a very small underlying population. We are speaking about a number based of 300 and something.

So, we are essentially speaking here like around €600,000 and trying to extrapolate €600,000, the development of the €1.3 billion business. It’s not uncommon that a customer may gets back a part of the transponder and then that’s ramped up again.

So I think we have to put this in perspective. It’s a very small population we are looking at and we are trying extrapolating big trends that would come out of the very small population.

I have got three questions. Just on video, there has been a lot of one-off effects in the first quarter.

I think we saw a lot one off effect at the end of the quarter as well where you saw delay or more competitive contract moving your revenue. You said it was smooth over the year.

So, can you tell us which quarter you’re going to see the up quarters of sort of one-off revenue? And how predictable is that?

My second question is on mobility. Once you took out the one-off revenue, the underlying growth in mobility you said was 8%; that doesn’t seem like a particularly strong number to me.

Can you explain what’s going on behind that? And perhaps can you touch, within that, on the recent contract with Gogo and how much that might be worth, in one-off revenue?

And thirdly, just at the group levels, you don’t give a group forecast for pro forma revenue growth this year although I believe you are happy with about 2.5% growth for the year. Can you confirm that you are still happy with that 2.5% number?

So, Patrick, on your first question, our business is a long-term business with long-term contracts. It’s not a quarterly business.

You said it was smooth over the years, so you obviously must…

From the smoothing over the year, we received the growth being progressive. We would see -- so it’s not like everything will come back in the second quarter, that’s important.

It will be progressing during the year with the number that we are looking at now being the lowest number and then that increase declining as the year progresses and then eventually ending up in a favorable to positive tradition.

I think you have one-off revenue smoothed, or I don’t know how you can predict smoothing overall, unless you know that you have got some positive quarters of one-off revenue coming…

So, there are two things as I said earlier. We have contracts; in the services sector, we have contracts, we have ground services, we have networks to be installed, these are project base.

So revenue recognition is a function of where you are in the project. And so, we have visibility over those projects.

We also have many years of experience in all occasional used contracts panned out over the period. And so that is allowing us to clearly see that in the past as many times, each type of developments in the quarter exclude out as the year goes on because they are reflecting contracts, they have in the backlog which are deliverables, that has to be delivered and the timing of the delivery will recognize revenue.

Are there normal features of some of the businesses like the occasional use business.

Okay, but not a bounce back in Q2?

Excuse me?

Not a bounce back in Q2.

So, in Q2, we will see the -- we don’t guide specifically by quarter, but we will see the video position in Q2 improving. And when we look -- your question on the overall full year -- we’ve provided guidance specifically at the vertical level.

We haven’t provided guidance on the overall level. And again, just to recap.

Overall, we’re targeting the growth in each of the four verticals. We are, on a like for like basis with regard to video and with regard to government, we are targeting a slight growth or stability; we’re targeting a return to growth in enterprise; and we’re targeting a strong growth in mobility.

This will deliver like for like growth for the four verticals combined. And then you also have to take into account and I think it was Nick answered that question earlier on that the comparison to 2016 will be impacted by the lower order, which was I think about 40 million in 2016 of last year whereas overall we’ve guided that in general, we would expect about 10 million for 2017.

And you had a question Patrick, regarding the 8% excluding Global Eagle. So that each one of these agreements takes time to set up in place.

I’ve made the same comment at the end of Q3 when there were a number of questions. And in Q4 we’ve seen the outcome of that and we’re seeing another outcome in Q1.

So whether it’s on our standard wide beam and inclined orbit or our high throughput satellites, these -- it takes a year to year and a half to see these very significant opportunities because what you’re doing, you are operating a market. In fact, many of our colleagues were competing in number of demos and negotiations few weeks ago through the recent aeronautical show in Europe.

And they are again as part of the long continuum of sort of seeding these agreements. So, I wouldn’t read too much into it.

I made the same comment in Q3; Q4 we had the number; Q1 we had the number. So that’s how we see it unfolding going forward.

What is very interesting now is that we’re seeing also increasing opportunities to bring O3b into the fold in number of demos with the wide antennas are being set up. And so, O3b also has a very significant role to play within the existing generation in the aeronautical segment.

And can you give a money value for your Gogo contract signed on this week?

No, we could not do that, but I will sort of rate it among one of the most significance we have signed with them. This was a very important agreement both with us and for Global particularly as they are continuing to roll out their 2Ku antennas, which are receiving very good reviews in terms of the end user experience that they’re creating at the level of the seat.

But financially, would you see it’s similar to the deal with Global Eagle in Q3, kind of 20 million...

No, I won’t comment on the details of our agreements with the client.

And Padraig, just finally, I mean given your comments, I think a consensus of 2.5% organic revenue growth for the year probably looks a bit punchy.

I wouldn’t comment on that Patrick. I think that we have strong underlying growth drivers with the new satellites coming up.

And I think we’ve given very extensive, granular guidance at the vertical levels and how all this flows through to our strategy.

Now, we see Patrick why is it punchy, on the one hand in our video business we have a very solid foundation. There are timing factors in Q1.

We know exactly what the backlog is, we know exactly what we need to bring online. And in fact our services business locked in very important contracts during the first quarter.

Some of them have been announced, some of them have not been announced. There is one of them very significant the client has specifically asked not to be announced, there is a reference to it in our press So, this is one.

When it come to our data centric applications and the market that we’re serving, SES is now in a unique position where it’s demonstrating growth in these three market verticals. No one as in the industry is being able to demonstrate that.

And that is the momentum that we carry until that the end of the year. What is equally important is that we have the biggest backlog ever to sort of underpin our ability to deliver on our objective.

So, we will see where this sort of punchy comment is coming from.

Yes. Hello, a couple of questions for me also.

The first one, could you comment quickly on the government renewal, the contracts renewal with the U.S. government in the February period, where I know most of the contracts are renewed?

My second question regards O3b, you mentioned that there is no more depreciation on three of your O3b satellites, I suppose there are the first three ones that were lunched that had some technical issues at first. So, my question is this, now that they are completely amortized, does that mean that they are -- now you can’t use them anymore i.e., there won’t be any revenues on them?

And two, if that’s the case, will you receive an insurance from your infer because the satellite had to be depreciated faster than expected? And finally, my last question regards on your -- no, no that’s it.

These two are fine. Thank you.

So, let me start with the first one. February for us is a -- has a date of renewal that is comparable to other periods in the year.

So, I don’t see that there is -- this is a particular window. So, whatever renewals we have to complete these were dually completed, which gives us confidence regarding outlook for the rest of the year.

In relation to O3b, what I would say that the three satellites are in spare positions, so it gives us the ability to have more resilience on our network as needed. I think there was enough disclosure regarding the insurance payouts in our annual report.

I would invite you to sort of refer to it or Richard, you can follow up on that. But certainly to say that at the end of the day SES and O3b were able to reset the clock on these satellites, which gave us confidence to put in place the order for the next eight satellites, which will be delivered over the course of 2018 and 2019.

And last point would be that all of the specific revenues discussions we been having with the market around O3b behave always factored in the fact, these satellites are operating spare that these satellites are non-revenue generating.

I’ve got a couple as well. First one was, there’s obviously been strikes in Guyana.

I’m just wondering if the Ariane strike has any impact on any of your launch timings. And if you can just generally let us know what you’re thinking in terms of any changes to the timetable on the launch program for this year.

The second one on the Gogo AMC-3 deal, is that being structured as an asset sale or is that more of a traditional capacity lease? And then, third one was Spacecom’s up for sale again, just wondering if you have any interest in that this time around?

Thanks.

I’ll start with the third one, Sarah. The answer is no.

We won’t have interest in sort of legacy assets per se or legacy network architecture. That simply doesn’t fit within our capability system.

On the first indeed, the chart that you have on Page 20, which is the loan schedule does reflect the updated timing from Arianespace where Arianespace is the launch provider. So, we have been in close contact with them.

The new dates have been communicated. And so within the band that we have outlined on this page, we are pretty much on contract and this is also reflected in our revenue outlook.

And Sarah, on your second question, so the Gogo deal is not a transponder sale, it’s an ongoing provision of services recurring revenue contact.

And have those revenues basically -- those revenues presumably don’t kick in until the satellite’s been moved? So, when does it start to be recognized within your revenue base?

Correct. So, those revenues would normally start to be recognized towards the backend of the second quarter.

Thank you, Silvia. Thank you, everyone.

This concludes the presentation. As always, please feel free to reach out to me, should you have any follow-ups.

Thank you and have a good day.