your satellite connection to the world

your satellite connection to the world
YOUR SATELLITE
CONNECTION
TO THE WORLD
ANNUAL
REPORT 2008
NOW
Highlights
–Three successful satellite launches
AMC-21, ASTRA 1M, Ciel-2
–New orbital positions established
at 31.5° East, 125° and 129° West
–Transponder utilisation rate increased
to 79% on a higher base of 1,082
commercially available transponders
–More than 120 HD channels broadcast
–Combination of SES AMERICOM
and SES NEW SKIES into a new
international division
€1,620.1m
€1,630.3m
Recurring 1 revenue +6.0%
Reported revenue +1.2%
€1,136.4m
€1,100.0m
Recurring EBITDA +4.8%
Reported EBITDA
81.6%
€625.1m
Industry-leading recurring
infrastructure EBITDA margin
maintained
Operating profit +2%
€0.98
€0.66
Average weighted earnings
per share +7.6% (2007: €0.91)
Proposed dividend increase of 10%
(2007: €0.60)
€5.8bn
Fully-protected contract backlog
Revenue
(EUR million)
1,615.2
EBITDA
(EUR million)
Average weighted earnings per share
(EUR)
1,630.3
1,100.0
1,610.7
2007
1,090.3
2008
2006
3.16
0.98
0.91
2.95
0.82
1,080.4
2006
Net debt/EBITDA
2007
2008
2006
2.68
2007
2008
2006
2007
2008
”Recurring” is a measure designed to represent underlying revenue/EBITDA
performance by removing currency exchange effects, eliminating one-time
items, considering changes in consolidation scope and excluding revenue/
EBITDA from new business initiatives that are still in the start-up phase.
1
SES network overview
SES satellite fleet
Fully owned satellites as of March 15, 2009
01
ASTRA 1C
ASTRA 1F
ASTRA 1H
ASTRA 1KR
ASTRA 1L
ASTRA 1M
ASTRA 1E
ASTRA 1G
ASTRA 3A
ASTRA 2A
ASTRA 2B
ASTRA 2D
ASTRA 2C
ASTRA 1D
5° East
19.2° East
19.2° East
19.2° East
19.2° East
19.2° East
23.5° East
23.5° East
23.5° East
28.2° East
28.2° East
28.2° East
28.2° East
31.5° East
FUTURE SATELLITES
ASTRA 1N
ASTRA 3B
19.2° East
23.5° East
SES SIRIUS
SIRIUS 3
SIRIUS 4
5° East
5° East
FUTURE SATELLITES
SIRIUS 5
5° East
SES AMERICOM/
NEW SKIES
NSS-703
NSS-6
NSS-11
NSS-5
NSS-9
NSS-806
NSS-10
NSS-7
AMC-6
AMC-5
Satcom C3
AMC-9
AMC-16
AMC-3
AMC-2
AMC-4
AMC-1
AMC-15
AMC-18
AMC-21
AMC-11
AMC-10
AMC-7
AMC-8
SES ASTRA
FUTURE SATELLITES
NSS-12
AMC-4R
AMC-5R
NSS-14
57º East
95º East
108.2º East
183º East
183º East
319.5º East
322.5º East
338º East
72° West
79° West
79° West
83° West
85° West
87° West
101° West
101° West
103° West
105° West
105° West
125° West
131° West
135° West
137° West
139° West
In Europe, ASTRA2Connect
is helping to bridge the
digital divide with broadband
connectivity to remote
communities.
02
03
SES AMERICOM/NEW SKIES
provides satellite capacity for
ComCast Media to distribute
hundreds of channels to U.S.
cable operators.
CapRock Communications
uses SES to provide
connectivity to remote oil
and gas platforms in Brazil.
02
57º East
338º East
Partially owned satellites as of March 15, 2009
Ciel-2
FUTURE SATELLITE
QuetzSat 1
129° West
03
77° West
Head office, Luxembourg
Offices worldwide
Teleports
COVERAGE
HERE&
SES is the leading provider of satellite
communications and broadcast services.
With a fleet of 40 satellites at 26 orbital
positions, SES provides coverage of 99% of
the world’s population. We offer customers
01
unparalleled connectivity and coverage
that enables them to target their audiences
and deliver their products with the highest
levels of quality and reliability.
NOW
Nothing else connects people as quickly
and efficiently as satellites. Satellites cover
the entire globe and allow people to share
experiences or enjoy sporting spectacles
and moments of unforgettable drama and
excitement with billions of others. Whether
it’s for an urgent video conference call, an
emergency relief operation, or for a live
transmission of a breaking news story, SES
satellites have the coverage and unbeatable
levels of reliability that make all of this
possible for millions of people, every day
of the year.
This is how we continue to
develop our business...
By maintaining and
developing the best satellite
fleet and infrastructure
By maintaining a solid
financial base
By building on existing
and new revenue streams
By employing and
retaining the best people
Contents
26 Executive Committee
42 Financial review by management
01 Here & now
Network overview
02 Supply & demand
04 Today & tomorrow
06 Further & faster
08 Near & far
28 Corporate governance
28 SES shareholders
29 Chairman’s report on corporate
governance and internal
control procedures
29 Introduction
29 Organisation principles
29 The annual general meeting
of shareholders
30 The Board of Directors and its
committees
35 The Executive Committee
35 Remuneration
36 External auditor
36 Internal control procedures
38 Human Resources
40 Investor Relations
40 Our corporate social
responsibility policy
46 Consolidated financial statements
46 Report of the independent auditor
47 Consolidated income statement
48 Consolidated balance sheet
49 Consolidated statement of cash flow
50 Consolidated statement of changes
in shareholders’ equity
51 Notes to the consolidated
financial statements
10 Chairman’s statement
12 President and CEO’s statement
14 Operations review
14 Market developments
16 Key corporate developments
18 SES ASTRA
22 SES AMERICOM
25 SES NEW SKIES
SES Annual Report 2008
89 SES S.A. annual accounts
89 Report of the independent auditor
90 Balance sheet
91 Profit and loss account
91 Statement of changes in
shareholders’ equity
92 Notes to the SES S.A. accounts
01
104 Other information
104 Information for shareholders
104 Companies of the group
Here & now
Continued
Digital network operations
in Luxembourg monitor
over 2,400 TV and radio
services 24 hours a day.
Infrastructure
Millions of homes worldwide
depend on SES’ satellites for their
TV signals. SES continues to invest
in its core satellite infrastructure
to provide replacement and new
capacity to meet the changing
demands of its customers.
SUPPLY & DEMAND
Satellites provide a vital link in the communications and
content delivery chain, allowing media broadcasters, telecoms
providers as well as corporate and government networks to
transmit, share or broadcast data and programming across
huge distances. SES plays a critical role in this global chain.
Our 40 satellites carry 1,082 transponders – of which 79%
are utilised – and broadcast 13,000 different services, equivalent
to 100,000 hours of audio-visual programming per day. Millions
of homes around the world depend on SES satellites for their
TV signals, whether received directly via a dish or fed through
a cable system.
SES Annual Report 2008
0
Direct-to-home
reception increased
by 6.2% to 53.4 million
homes in Europe in 2008.
Delivering capacity, coverage and reliability to serve our
customers’ needs
In Europe, SES ASTRA is the leading direct-to-home platform,
reaching 122 million homes directly and indirectly. Its 14 ASTRA
and two SIRIUS satellites located at five prime orbital positions
deliver comprehensive coverage of the Eurasian landmass, from
Iberia’s Atlantic coast to Eastern Europe. SES AMERICOM/NEW
SES Annual Report 2008
SKIES supplies content to 80 million U.S. cable homes via 16
satellites. A further eight high-powered satellites cover Asia,
Africa and Latin America. SES’ outstanding global coverage and
reach is backed up by transponder availability levels of 99.999%.
0
Here & now
Continued
The AMC-21 satellite
launched in August
2008 underwent
extended testing at its
manufacturer Orbital
Sciences Corporation.
Revenue streams
High definition TV is growing
dynamically and increases
demand for satellite capacity.
TODAY & TOMORROW
High definition television (HDTV) is the new frontier of home
entertainment, and satellite represents the most efficient
transmission platform for bandwidth-intensive HD channels.
SES is at the cutting edge of this exciting new chapter of
broadcasting history. HDTV offers audiences a viewing
experience of unprecedented quality and detail, making it one
of the satellite industry’s most important new growth channels.
At year-end 2008, more than 1,100 HD channels were
operational worldwide. Approximately 900 of these channels
were broadcast in the North American market. HDTV is
well-established in SES’ core markets, and steadily growing
in many others. In Europe’s main markets, the commercial
HD offer doubled in 2008, as in the previous year. In Asia-Pacific,
the number of HD channels increased from 44 to 77.
SES Annual Report 2008
04
Bringing you real
adventure close-up
with HDTV.
HDTV
Today, SES is the world’s leading transmission platform
for high definition TV, transmitting over 120 HD channels.
In Europe, SES ASTRA boasts 64 HD channels, and the
number is growing rapidly. In the third quarter of 2008 alone,
the number of HD channels on the ASTRA platform increased by
30%. In the U.S. market, SES AMERICOM is benefiting from an
HD boom and now carries 60 HD channels. In 2008, the number
of HD channels on all SES satellites more than doubled.
SES Annual Report 2008
0
Here & now
Continued
Ciel-2 takes off from
Baikonour Cosmodrome,
Kazakhstan in December
2008, aboard an ILS
Proton rocket.
Infrastructure
After three successful launches
in 2008, SES kicked off 2009 with
the launch of NSS-9 in February.
Two further launches are planned
in 2009.
FURTHER & FASTER
SES has the most ambitious fleet expansion programme
in the industry, designed to maintain existing and to add
new capacity for the growing and changing demands of its
customers. In early March 2009, SES had nine satellites under
construction, which will provide a 25% increase in available
capacity by 2011. Following three successful launches in 2008.
Three satellite launches are scheduled in 2009 alone. The first,
NSS-9, was successfully launched on an Ariane 5 rocket on
February 12, 2009. NSS-9 is set to replace NSS-5 at 183° East,
providing coverage of Asia-Pacific including the West Coast of
the U.S., Hawaii and Polynesia. NSS-5 will be re-deployed to a
new orbital position. Another SES NEW SKIES satellite, NSS-12
is due for launch in the third quarter of 2009 and will be followed
by ASTRA 3B, further strengthening ASTRA’s prime orbital
position at 23.5° East.
SES Annual Report 2008
0
AMERICOM Government
Services (AGS) supported
the U.S. military’s relief
operations in Haiti in
September 2008.
Satellites support emergency services
Natural disasters can hit anytime, anywhere, and with a
primordial destructive force that sweeps away everything in
its path. Hurricanes, earthquakes and flash floods can leave
the best-connected communities cut off from the outside
world, for days, if not weeks. At such times, satellite is virtually
the only means of two-way communication making it critical
to the emergency relief efforts that follow. With coverage of
99% of the world’s population, SES companies can support
relief operations such as in hurricane-stricken Haiti, or after
the devastating Sichuan earthquake in China, in May 2008.
SES Annual Report 2008
0
Here & now
Continued
The antenna array in
Betzdorf, Luxembourg from
where 14 SES ASTRA and
five SES NEW SKIES
satellites are monitored
and controlled.
Revenue streams
Satellites can fill the broadband
connectivity gap, whether it’s for
millions of households in remote
countryside, or for an oil platform
miles out at sea.
NEAR & FAR
While 24 hour connectivity has become an everyday reality
for many of us, there are still millions of homes in Europe
without access to modern telecommunications infrastructure
– and that puts them at a disadvantage in the information age.
Satellite is often the only platform that can bridge this ‘digital
divide’, bringing connectivity at highest speeds and quality. It is
estimated that as many as 20 million households in Europe alone
are either not served or underserved by terrestrial broadband
services. SES ASTRA’s ASTRA2Connect is a satellite-based
two-way broadband internet solution that is gaining increasing
popularity as a way to connect these remote communities.
Fast and easy to deploy, the service can be accessed via a
single dish also used to receive TV signals. At year-end 2008,
ASTRA2Connect was available in 11 European countries,
including Italy, Germany, the Netherlands and the U.K.
SES Annual Report 2008
0
Remote oil and gas
platforms rely on satellites
for their connectivity needs.
CapRock uses NSS-7 to provide bandwidth to its customers
The oil and gas industry is growing rapidly in Brazil with the
discovery of the largest oil and gas reserves in the Campos
Basin. CapRock is a leading provider of global satellite
communications for the oil and gas industry and relies on
SES NEW SKIES to supply capacity via its NSS-7 satellite to
connect many of these remote oil and gas platforms of the
companies they serve. Mauricio Rubinsztajn, Director of
South American Operations, CapRock, said: “With SES NEW
SKIES, we can ensure that our customers have access to
reliable, state-of-the-art satellite telecommunications to support
business-critical communications needs.”
SES Annual Report 2008
0
Chairman’s statement
René Steichen
Chairman of the Board of Directors
Growth in turbulent times
On behalf of the Board of Directors, it gives me great pleasure
to announce another set of solid growth figures for the year
ending 2008.
2008 has gone down in history as a year of dramatic turbulence
in the global markets. Despite this very challenging environment,
we achieved our operational and financial targets and continued
to deliver shareholder value in line with our expectations.
In 2008, all main business units within the SES group recorded
progress. SES benefits from a strong business model, with our
core satellite infrastructure business providing the foundation for
the growth that was recorded during the year. This core business
is mainly geared towards the provisioning of video broadcasting
capacity, and is characterised by long-term contracts with major
public and private broadcasters in key markets. SES’ satellite fleet
is today the leading platform for the distribution of audiovisual
content in the world, and broadcasts the equivalent of more than
100,000 hours of television programming every day.
Growth in this sector has been complemented by a good
contribution from our services activities. SES companies
provide a wide range of value-added, satellite-based services
aimed at our media customers, as well as civilian and military
government agencies.
SES group revenue rose to EUR 1,630.3 million in 2008.
Excluding one-time items and foreign exchange variations,
the recurring revenue2 of the group was EUR 1,620.1 million,
an increase of 6.0% over the previous year.
The group’s EBITDA was EUR 1,100.0 million. On a recurring
basis, EBITDA rose by 4.8% to EUR 1,136.4 million, reflecting
strong performance during the year and non-recurring charges
taken for the termination of IP-PRIME, as well as changes in the
U.S. dollar exchange rate. The group’s EBITDA margin generated
from core satellite infrastructure leasing activity was an industryleading 81.6%.
Net profit reached EUR 387.5 million, and was slightly diluted
by restructuring costs and the accelerated depreciation charge
for the ASTRA 5A satellite, whose mission was ended following
the closing of the business year. Earnings per share, which were
further enhanced by the effect of the share buyback undertaken
during the year, grew to EUR 0.98, compared to EUR 0.91 a
year earlier.
In 2008, the return on average equity increased to 24.8%, up
from 17.4% in 2007.
In these turbulent times, SES benefits from a strong financial
position and liquidity. During the year, we repaid EUR 543.7
million of maturing debt facilities, and our good standing in
the credit markets enabled us to raise EUR 850 million in new
facilities at very favourable rates. A EUR 200 million facility was
approved by the European Investment Bank before the end of
2008 and is expected to close in the first quarter of 2009. SES
is currently funded through to mid-2010, and we are pursuing
various opportunities to add to our financing resources and to
improve our debt maturity profile.
During the year, we managed our financial leverage from
2.95 times net debt/EBITDA at the end of 2007 to 3.16 times
at the end of 2008.
In line with our progressive dividend policy, the Board of
Directors proposes a EUR 0.66 dividend per share with respect
to the 2008 financial results3.
Outlook
SES is fortunate to have many advantages which give it
significant protection in the current market environment.
The financial outlook for the group remains positive, and despite
the extremely challenging world economic climate, SES expects
to deliver continued revenue and EBITDA growth.
A solid financial base
SES boasts a strong financial
position and liquidity.
SES Annual Report 2008
10
In 2008, all main business units within the SES
group recorded progress. SES benefits from a strong
business model, with our core satellite infrastructure
business providing the foundation for the growth that
was recorded during the year. Growth in this sector has
been complemented by a good contribution from our
services activities.
Our growth expectation for 2009 is supported by a favourable
outlook for transponder supply and demand, by the strength
of our new business pipeline, and by the additional capacity
we plan to launch to satisfy new market needs.
We expect reported revenue to increase by more than 7% in
2009, assuming an average exchange rate of 1.30 USD/EUR.
Recurring revenue is set to grow between 3 and 4% in
2009. For the period 2008-2010, we expect recurring revenue
to increase at an average compound annual growth rate of
more than 5%.
Reported EBITDA is set to increase by more than 10%, based
on the above-mentioned exchange rate assumption.
And we expect our recurring infrastructure EBITDA margin to
remain at an industry-leading level of about 82%, supported by
annual cost savings derived from the management combination
of SES AMERICOM and SES NEW SKIES, and from SES
ENGINEERING.
The SES group structure
Group management company
Fully-owned operating companies
Ownership
100%
100%
100%
Participations in satellite operators
90%
70%
50%
I would like to congratulate the SES management and
employees for another successful business year, and for
putting us in a strong position to deal with the challenges
ahead. I call on their expertise, experience and dedication
in a difficult environment to ensure that we maintain our
course, and that we continue to deliver the highest standard
of services to our customers and value to our shareholders.
49%
Satellite service companies
100%
100%
100%
100%
René Steichen
Chairman of the Board of Directors
100%
‘Recurring’ is a measure designed to represent underlying performance
by eliminating the effects of currency exchange movements and of
one-time items, by adjusting for changes in consolidation scope and by
excluding revenue and EBITDA from new business initiatives that are still
in a start-up phase.
3
Subject to approval by shareholders at their annual general meeting on
April 2, 2009.
2
SES Annual Report 2008
11
President and CEO’s statement
Romain Bausch
President and CEO
Looking towards the future with prudence and with
confidence
The progress recorded by SES in the challenging environment of
2008 is no small feat, and I would first of all like to acknowledge
the efforts of all employees and associates of SES who
contributed to a new round of strong results.
As we enter 2009, the world is facing the bleakest economic
outlook since the 1930s. However, as recession hits many
economies and sectors, the outlook for the Fixed Satellite
Services industry currently remains positive.
SES is not entirely immune to the effects of the economic
downturn, but we have so far emerged largely unscathed from
a turmoil against which we are better protected than many.
We look to the future with prudence, but also with confidence.
The going may be occasionally rough; yet we can build on the
achievements of the past years that have made our company
more resilient, more effective, and more flexible to address the
demands of the market.
Multiple drivers of future growth
At the end of 2008, SES had a solid contract backlog of EUR
5.8 billion, equivalent to more than 3.5 times yearly revenue.
Most of these contracts are long-term, multi-year contracts with
blue chip customers and provide us, and our investors, with
outstanding visibility on our future business.
SES benefits from a strong financing position and liquidity, with
our funding secured through to mid-2010. We are executing
an investment programme that will deliver an overall increase
of 25% of available capacity over the next three years. This
programme will help us address existing pockets of growing
demand for satellite capacity and satellite services, both in
markets in which we already have strongly established positions,
and in those which have the strongest growth potential.
We continue to see multiple growth drivers for our business,
as the number of direct-to-home television broadcast platforms
continues to rise. Even though some projects may be adjusted
as a result of the current economic situation, the general trend
is unbroken. High definition TV, which increases demand for
transmission bandwidth, is developing steadily in our main
markets: In Europe, SES ASTRA and SES SIRIUS distributed 64
HD channels at year-end, and in North America, the number of
HD channels transmitted by SES AMERICOM increased to 60.
In addition, we note rising demand for satellite capacity to feed
digital terrestrial television networks, or to provide broadband
access to populations not served by terrestrial infrastructures.
We are also seeing growth in satellite services, either related
to the media sector or emanating from government agencies
that may have to increase their reliance on commercial satellite
capacity in the future.
Reshaping SES in 2008
During the year, we reshaped SES with the objective of making
the company even more flexible and efficient in addressing our
customers’ needs and in pursuing growth opportunities.
We combined SES AMERICOM and SES NEW SKIES under one
single management team that will enable the new division to
leverage its combined fleet of 24 satellites, and to focus flexibly
on the requirements of the key markets it serves – stretching
from the Americas to Africa, the Middle East, Asia and the Pacific
Ocean region. In addition to improved customer service, we also
expect the new combined division to deliver operational synergies.
We also saw SES ENGINEERING, the consolidated
procurement, operations and engineering division of all SES
companies, reach operational cruising speed. This has already
resulted in synergies and operational efficiencies to further
improve service and reliability.
Transponder availability: 99.999% in 2008
In 2008, SES successfully launched three satellites: AMC-21,
ASTRA 1M and Ciel-2 (in which SES holds a 70% economic
interest). Our available capacity rose to a total of 1,082
transponders at year-end 2008.
Our total utilised capacity increased by 3.9% to 855
transponders at year-end, raising the utilisation rate to 79.0%
at the end of December.
Revenue streams
We see multiple growth drivers for
our business.
SES Annual Report 2008
12
We expect SES to continue its growth phase. Our
robust business model, sound financial fundamentals,
and strong cash flow allow us to execute our capital
expenditure plan to meet the challenges of the future.
We extended the reach of our fleet by opening three new
orbital positions: 31.5° East for Central and Eastern Europe,
125° West and 129° West4 over North America.
The transponder availability rate was maintained at 99.999%
for the 37 satellites5 operated by SES ENGINEERING.
Growth in the infrastructure and services businesses
In our core satellite infrastructure business – providing
transmission and broadcasting capacity to our customers –
all our main operating companies recorded significant growth
throughout the year, and registered important new capacity deals.
Investing prudently to meet future demand
We expect SES to continue its growth phase. Our robust
business model, sound financial fundamentals, and strong cash
flow allow us to execute our capital expenditure plan to meet
the challenges of the future.
We will continue to carefully build up our satellite capacity to
support organic growth in order to meet the demands of our
customers’ businesses, and to generate new revenue streams
by opening up new markets. We plan to launch three additional
satellites in 2009; in all, eight satellites are scheduled for launch
between 2009 and 2011.
In Europe, the number of TV and radio channels broadcast by
ASTRA and SIRIUS increased by 2.4% and reached 2,491 at the
end of December. In North America, 20 out of the 24 available
transponders were contracted by the end of the year on the newly
launched AMC-21 satellite, which was brought into operation in
August 2008. SES NEW SKIES developed beyond management’s
expectations and objectives. Within the year, the number of TV
and radio channels broadcast by SES NEW SKIES increased by
13% to 641, and the company signed capacity agreements with
a broad range of customers at a brisk pace.
If and where this makes strategic sense, we will also
carefully assess possible acquisitions, of assets or of companies,
either to enhance our geographical footprint or to extend our
growth opportunities.
SES’ services business also enjoyed healthy growth in 2008.
ASTRA Platform Services (APS) generated double-digit revenue
growth for the fourth consecutive year. ND SatCom experienced
an exceptional increase of more than 20%, driven by the
government and European defence sectors. SES ASTRA TechCom
delivered double-digit revenue growth in 2008, thanks to contracts
in Europe, the Middle East and Asia. ASTRA2Connect, the
two-way, satellite-based broadband internet service expanded
rapidly and is now available in 11 European countries, serving
approximately 30,000 subscribers at year-end. AMERICOM
Government Services won the TROJAN follow-up contract with
the U.S. Army for an initial five-year period, and was awarded a
contract to host an experimental infra-red sensing payload for the
U.S. Air Force.
Continued organic growth, thanks to our satellite capacity
expansion programme combined with a prudent approach to
new markets, revenue channels and acquisitions, will ensure that
we deliver on our targets to meet investor expectations, further
improve on shareholder returns and act as an employer of choice
in our industry.
Also, we will supplement the growth of our core satellite capacity
business by further developing and refining our satellite services
business, focusing on the most promising and profitable ventures,
and exiting or avoiding those we judge to lack sufficient revenue
growth potential.
Romain Bausch
President and CEO
Ciel-2 was launched in December 2008 and entered operational service in
February 2009.
5
The SIRIUS satellites are operated by Swedish Space Corporation.
4
SES Annual Report 2008
13
Operations review – Market developments
Demand outstripped the increase in available capacity
and led to improved capacity utilisation rates. Demand
for satellite capacity was not impaired by the effects of
the financial crunch in 2008.
Continued growth for Fixed Satellite Services in 2008
The Fixed Satellite Services (FSS) industry continued to
experience solid growth throughout 2008. At the time of writing,
the FSS industry’s revenue was estimated to have reached
USD 9.6 billion in 2008, an increase of roughly 8% over the
previous year.
2008 also saw the trend towards an increasing number of
regional or national satellite systems continue. The launches
of Vinasat and of Venesat marked the emergence of Vietnam
and Venezuela as satellite-operating nations. Additional new
satellite ventures were announced by Azerbaijan, Angola,
Algeria and by Nigeria.
The FSS industry provides a vital link in the chain of the
world’s communications infrastructures, spanning a wide
range of services from media broadcasting to customised
communication networks.
Demand grows faster than capacity
During the year, global FSS capacity increased by 625
transponders or approximately 10%. The majority of the new
capacity was launched to serve the North American and
Asian markets.
FSS operators provide satellite transmission capacity
for the most cost-efficient communication services on a
regional, continental or global scale, and operate in the C-band,
Ku-band and Ka-band frequency spectrums. Satellite is the best
distribution mechanism, enabling broadcasters to optimise their
reach. Directly or indirectly, they serve almost every TV home
worldwide, delivering TV channels either for direct-to-home
reception or for distribution via cable networks and high-speed
DSL networks (IPTV). FSS satellites also provide capacity for
mission-critical enterprise and government communication via
satellites establishing regional or global connectivity.
Stable industry positions in 2008
The standing of the major players in the FSS industry remained
largely unchanged in 2008. At year-end, and on a pro forma
basis, the four largest FSS operators had a combined share of
approximately 70% of revenues, the same as the previous year.
SES held a share of just over 25%, making it the single largest
FSS operator.
Demand outstripped the increase in available capacity and led to
improved capacity utilisation rates. Demand for satellite capacity
was not impaired by the effects of the financial crunch in 2008.
Growth was driven mainly by demand from media customers,
as well as the increasing requirements for global connectivity to
enable more efficient communication and flow of information.
Media distribution and broadcasting activities generated more
than 50% of the FSS industry’s total revenue.
New and existing markets offer many growth opportunities
for FSS operators
The rising demand for video broadcasting capacity was driven
by the emergence of new TV platforms targeting all types of
networks: direct-to-home (DTH) reception, cable distribution,
digital terrestrial television (DTT), and television in IP format (IPTV).
The total number of video channels broadcast by satellite
worldwide increased from 20,100 in 2007 to 22,670 at year-end
2008. During 2008, 15 new pay-TV platforms were launched in
Europe, Asia and Latin America.
The commercial roll-out of high definition TV (HDTV) keeps
reinforcing the growth dynamics.
USD 9.6bn
The FSS industry’s revenue
was estimated to have reached
USD 9.6 billion in 2008, an
increase of roughly 8% over
the previous year.
SES Annual Report 2008
14
In 2008, SES held
a revenue market
share of 25% in
the FSS industry.
Satellite represents the most efficient transmission channel for
the bandwidth-intensive HD applications. 1,166 full-time HD
channels were operational at year-end 2008, up from 713 in 2007.
Approximately 900 of these channels were broadcast in the
North American market, and 200 in Europe’s main markets.
In Asia-Pacific, the number of HD channels came close to 80.
New terrestrial video distribution networks continued to create
opportunities for FSS operators. Cable and telecom operators
that are in the process of launching triple and quadruple play
offerings combining television, broadband access, fixed and
mobile telephony, also rely on FSS to complete their offer and
improve their technical reach. For IPTV platforms, satellite
ensures distribution in geographical areas lacking terrestrial
broadband connectivity.
Satellites are
filling the terrestrial
connectivity
gap by providing
broadband internet
access and other
services to remote
areas not served by
terrestrial networks.
Demand from government and institutional customers
significantly increased over the past years, as civil and military
government agencies complement their proprietary systems
with commercial satellite communications capacity. Furthermore,
administrations of smaller countries have become almost entirely
reliant on commercial satellite capacity. Given the increasing
pressure on public budgets, this trend can be expected to
continue in the near future.
The direct-to-user satellite broadband segment registered
dynamic growth rates, similar to the video distribution services.
In North America, where this service is mainly provided through
Ka-band spot beams, capacity limits are occasionally reached.
In Europe, where this service is provided via Ku-band, the user
take-up rate increased in 2008, compared to the previous year.
Growing demand from governments and suppliers
of broadband internet
Worldwide, satellite VSAT (Very Small Aperture Terminal)
networks constitute established and efficient solutions to
serve the communication needs of companies and government
agencies. Demand for this application has been growing strongly
over the past years, primarily driven by the needs of generic
broadband services and government-supported initiatives. During
2008, the growth remained solidly in line with previous years.
The demand for capacity supporting IP and GSM backhaul
services represents an important share of demand in developing
regions, where terrestrial infrastructure is less developed.
Hence large amounts of satellite capacity are needed to sustain
broadband access. Using satellite, remote ISPs and telecoms
companies can link to the global internet backbone, bypassing
shared ground networks and associated congestion points –
as well as terrestrial connectivity gaps.
+625
Global FSS capacity increased
by 625 transponders or
approximately 10%.
SES Annual Report 2008
15
Operations review – Key corporate developments
The combination of SES AMERICOM and SES NEW SKIES
will strengthen SES’ competitiveness, its operating
performance, and enhance the company’s positioning
for future growth.
SES creates new division
In July 2008, SES announced the combination of SES
AMERICOM and SES NEW SKIES into a single division.
Robert Bednarek was appointed President and CEO of the
new division. With a combined fleet of 24 satellites it provides
in-depth coverage of North and South America, Africa, the
Middle East and Asia, the Pacific region and also provides global
connectivity. The combination is expected to strengthen SES’
competitiveness, its operating performance, and enhance the
company’s positioning for future growth. By bringing together
the capabilities and resources of SES AMERICOM and SES NEW
SKIES it allows SES to deliver enhanced service to its customers
through a versatile and wide-ranging fleet, as well as improving
processes and customer support. The new division will leverage
the power of SES’ global reach to support its customers’ growing
and diverse satellite needs. Operationally, the move streamlines
SES’ corporate and management structure, and strengthens SES’
competitiveness in the emerging markets of the Middle East,
Latin America and India.
SES raises participation in SES SIRIUS to 90%
In January 2008, SES, via SES ASTRA, increased its stake in
SES SIRIUS from 75 to 90%. SES’ participation in SIRIUS
strengthens its position in Northern and Eastern Europe.
Greater ownership and closer cooperation allow both companies
to generate synergies and exploit assets to further benefit
customers of both companies.
Other corporate developments in 2008
SES’ joint venture with Eutelsat, Solaris Mobile, which will
provide broadcast media and other services to handheld and
mobile devices, progressed with the appointment of its CEO,
Steve Maine, and the establishment of its headquarters in
Dublin. Solaris Mobile’s S-Band payload is scheduled for launch
in Q1 2009.
In view of the ongoing success of ASTRA2Connect, a two-way
high-speed internet service launched in 2007, SES announced the
establishment of ASTRA Broadband Services’ (ABBS) to develop,
promote and market SES ASTRA’s portfolio of products serving
the dynamic market for satellite-based broadband services.
SES AMERICOM announced the termination of its IP-PRIME
service in the U.S. from July 31, 2009. The decision was taken
based on the slow uptake of the service. The termination has no
material impact on SES’ financial guidance related to revenues
and EBITDA for 2008 or for 2009.
Satellite fleet developments
Successful satellite launches in 2008
SES continued its programme of fleet expansion with three
successful launches and established new orbital positions.
AMC-21 was launched on August 15, 2008. Located at the
new orbital position of 125° West, AMC-21 provides coverage
of North America, including all 50 U.S. states, Southern Canada,
Mexico, the Caribbean and Central America.
On November 6, 2008, SES successfully launched ASTRA 1M.
The new satellite, with 36 Ku-band transponders joined five
other satellites at ASTRA’s prime orbital position of 19.2° East
serving continental Europe, further strengthening its capacity
and service offering at that slot, and releasing other satellites to
provide services elsewhere.
On December 10, 2008, Ciel-2, the first purpose-built satellite
of Ciel Satellite Group of Canada, in which SES holds a 70%
stake, was successfully launched to take up its orbital position
at 129° West.
Alongside the orbital slot for Ciel-2 at 129° West, Ciel Satellite
Group of Canada was awarded six licences to develop Ka-band
and Ku-band spectrum at the following orbital slots: 91° West;
103° West; 107° West; 109.2° West; and 138° West.
SES Annual Report 2008
16
Solaris Mobile, SES’
joint venture with
Eutelsat, will allow
broadcasters and media
distributors to transmit
a wide range of media
and data services to
handheld and other
mobile devices.
Ciel-2 is the first
satellite of the Ciel
Satellite Group of
Canada, in which
SES holds a strategic
participation. It was
awarded licences
to develop spectrum
at six orbital slots.
On March 15, 2008, SES suffered a setback with the failure
of the launch of SES AMERICOM’s AMC-14 satellite on
a Proton Breeze M launch vehicle, resulting in the total loss
of the satellite. The satellite was totally insured, and the
insurance proceeds were received in H1 2008.
Growing transponder utilisation rate
Transponder utilisation increased to 79.0%, on a higher base
of 1,082 commercially available transponders. During the year a
total of 53 additional transponders were contracted, an increase
of 6.6% of the previous year.
More detailed information on fleet developments is published in
the SES ASTRA, SES AMERICOM and SES NEW SKIES sections
of this report.
Transponder utilisation
2008
Satellites added in 2008 and February 2009
SES ASTRA
SES AMERICOM
Launch date
Incremental
transponders
AMC-21
August 2008
24
ASTRA 1M
November 2008
–
Ciel-2
December 2008
22 (32)
NSS-9
February 2009
–
Developments at 5° and 31.5° East
In Europe, SES ASTRA continued to build up its new orbital
slots at 5° East and 31.5° East to strengthen its position in the
emerging Northern and Eastern European DTH markets.
SIRIUS 4, launched in late 2007, began commercial operations
at 5° East at the beginning of the year.
In April 2008, SES ASTRA opened up a new orbital position
at 31.5° East with the ASTRA 5A satellite, formerly SIRIUS 2.
In October, ASTRA 5A lost attitude control and service was
interrupted for several days. In mid-January 2009, the satellite
suffered another anomaly and was removed from service.
Operations at 31.5° East will be resumed in due course with
the relocation of an in-orbit satellite.
Segment
Utilised transponders
Available transponders
Utilisation
rate
264
317
83.3%
348
447
77.8%
SES NEW SKIES
243
318
76.4%
SES group
855
1,082
79.0%
Utilised transponders
Available transponders
Utilisation
rate
2007
Segment
SES ASTRA
242
283
85.5%
SES AMERICOM
339
447
75.8%
SES NEW SKIES
221
318
69.5%
SES group
802
1,048
78.8%
Future launches
SES is executing an ambitious satellite investment programme
to maintain and expand its satellite fleet. SES satellites under
construction will increase available capacity by 25% by 2011.
Upcoming launches 2009 to 2011
SES AMERICOM/NEW SKIES Launch date
Incremental
transponders
NSS-12
Q3 2009
30
AMC-4R
Q1 2010
7
AMC-5R
Q3 2010
24
NSS-14
Q4 2010
71
QuetzSat-1
Q3 2011
32
ASTRA 3B
Q4 2009
15
ASTRA 1N
Q2 2011
–
SIRIUS 5
Q3 2011
56
SES ASTRA
79%
The transponder utilisation rate
increased to 79.0%, on a higher
base of 1,082 commercially
available transponders.
SES Annual Report 2008
17
Operations review
“HDTV is taking off in Europe. With the new channels we
further improve the impressive HD channel line-up, and build
a very attractive HD neighbourhood on our main orbital
positions. The growing number of leading broadcasters
choosing ASTRA proves that we have become the primary
platform for HD in Europe.” Ferdinand Kayser, President and CEO, SES Astra.
Satellite infrastructure business
As a leading satellite operator in the European arena, SES
ASTRA once again delivered strong results, with a reach of
over 122 million households.
Satellite fleet developments
At year-end 2008, the ASTRA satellite fleet consisted of 14
ASTRA and 2 SIRIUS satellites at the prime orbital positions
19.2°, 23.5°, 28.2°, 31.5° and 5° East. Throughout the year,
ASTRA boasted industry-leading network availability levels
of 99.999%.
ASTRA 1M was successfully launched on November 5, 2008
and began commercial operations at its 19.2° East orbital
position on January 19, 2009. ASTRA 1M carries 36 Ku-band
transponders and delivers direct-to-home and HDTV services to
continental Europe. The satellite offers important replacement
capacity and reinforces ASTRA’s position as the most important
HDTV platform in Europe.
The procurement of ASTRA 1N was announced in July 2008 and
is part of the replacement programme at 19.2° East. Scheduled
for launch in the first half of 2011, it will carry 55 Ku-band
transponders for pan-European coverage with an expected
lifetime of 15 years.
SIRIUS 4, launched in late 2007, began commercial operations at
5° East at the beginning of 2008, replacing SIRIUS 2 and SIRIUS
3. With 46 Ku-band transponders, SIRIUS 4 meets the increased
demand for HDTV capacity in the Nordic countries, as well as
the growth in new television channels in Eastern Europe.
The former SIRIUS 2 satellite, renamed ASTRA 5A, was moved
to the 31.5° East orbital position where it initiated commercial
operations in April. In October 2008, the satellite lost attitude
control and service was interrupted for several days while the
satellite was recovered and repositioned. In mid-January 2009
it suffered another anomaly and was removed from service.
Operations at 31.5° East are expected to be resumed in due
course with the relocation of an in-orbit satellite.
During the year, the number of transponders that were utilised
on the SES ASTRA and SES SIRIUS satellites increased to 264.
This represents a utilisation rate of 83.3%.
Growth in broadcast services
At December 31, 2008 the ASTRA and SIRIUS satellites broadcast
2,491 TV and radio channels, a 2.4% increase over 2007.
High definition broadcasts have continued to grow strongly.
During 2008 the number of HD channels on the SES ASTRA and
SIRIUS platforms increased to 64 at year-end. All major markets
within the ASTRA footprint now have access to HDTV via
satellite, and the trend continues.
ASTRA is the leading HDTV platform in Europe, serving: Sky in
the U.K., CanalSat in France, Premiere in Germany, Digital+ in
Spain; Viasat in Scandinavia; Canal Digitaal in The Netherlands;
TV Vlaanderen in Belgium; and SKYLink for the Czech and Slovak
Republics. ASTRA also features HD channels from Europe’s
biggest public broadcasters such as the BBC in the U.K., ARTE in
Germany, ORF in Austria and TVP in Poland.
The procurement of SIRIUS 5 was announced in October 2008
This new satellite, scheduled for launch in late 2011, will further
strengthen the orbital position at 5° East. SIRIUS 5 is a multimission satellite whose payload will be commercialised in
several regions. SIRIUS 5 will carry a fully incremental payload
of 36 Ku-band transponders serving Northern Europe and the
Baltic region as well as the African markets with direct-tohome services. In addition, 20 C-band transponders will be
commercialised by SES NEW SKIES in Africa.
Infrastructure
In 2008, SES ASTRA’s
network availability rate
was 99.999%.
SES Annual Report 2008
18
2008, a strong year for HDTV in Europe
The total number of high definition channels more
than doubled to 64 on the ASTRA and SIRIUS
satellites. Broadcasters and consumers alike
have embraced HDTV as the TV of the future.
HD channels report higher subscription rates,
longer viewing times and greater channel loyalty.
In 2009, ASTRA will remain at the forefront of
HDTV development, not least because it has one
of the largest HD-ready audiences.
Bringing out the best at SES
An attractive working environment
and numerous opportunities for
further training and development
help ensure a well motivated
workforce.
SES Annual Report 2008
19
Operations review
continued
Since becoming
operational in early
2008, SIRIUS 4 has
been meeting the
growing demand for
HDTV services in the
Nordic countries and
the rapid growth in
channels services in
Eastern Europe.
TNTSAT, ASTRA’s
free digital terrestrial
TV package, reached
over one million
households in 2008
in France.
Main commercial contracts
In late 2008, SES ASTRA signed a capacity contract with
Orange, a subsidiary of France Telecom, to deliver its Orange
TV offer over satellite as part of their triple play offering to those
subscribers who are unable to receive TV via their terrestrial
ADSL connection. This agreement is particularly significant, as
it demonstrates the attractiveness of DTH neighbourhoods as a
vehicle to satisfy the growing demand of telecommunications
customers for broadcasting solutions.
Services business
SES ASTRA’s service businesses experienced dynamic growth
in 2008.
ASTRA’s reach in France grew significantly for two main reasons.
Firstly, the number of households receiving TNTSAT, the free
digital terrestrial TV package broadcast by ASTRA, grew to over
1 million. Secondly, Canal+ successfully completed the
repointing of the remaining TPS households to ASTRA’s
19.2° East orbital position by the end of the year.
ND SatCom, a global supplier of satellite-based broadband VSAT,
broadcast and defence communications network solutions,
experienced exceptional growth of more than 20% in 2008.
Mainly driven by the government and European defence sectors,
it also won an important contract with the U.S. Navy to deliver
multiple portable Satellite Communication Terminals to the U.S.
Navy’s Naval Warfare Systems Center (SPAWAR). ND SatCom
serves customers in over 130 countries.
Other notable commercial developments at SES ASTRA included:
– an agreement with the Slovakian telecommunications and
television company Towercom for two transponders at
23.5° East;
– MTV Networks High Definition (MTVNHD) signed a long-term
contract with SES ASTRA to distribute music and children’s
entertainment in France;
– Czech Pay-TV platform CS Link contracted an additional
transponder at 23.5° East. CS Link is the largest pay-TV
platform in the Czech Republic with 400,000 customers,
and transmits 25 TV and 11 radio programmes;
– ETV, a South African broadcaster, contracted a transponder
on ASTRA 4A at 5° East.
ASTRA Platform Services (APS) achieved double-digit revenue
growth rates for the fourth consecutive year since its integration
into SES ASTRA. APS offers a comprehensive range of services
to broadcasters for the preparation, transmission and protection
of their content.
SES ASTRA TechCom continued to strengthen its position as a
technical services provider to the international satellite operator
community, delivering double-digit revenue growth in 2008,
driven by large projects with key customers in Europe, the
Middle East and Asia.
ASTRA Broadband Services’ primary product, ASTRA2Connect,
a two-way satellite-based broadband system, made strong
progress in 2008 and signed contracts with six new distribution
partners during the year. ASTRA2Connect is now distributed
in 11 European countries. At December 31, 2008, the service
had approximately 30,000 users using the capacity of three
transponders.
Following a thorough review of the entavio business model,
sales and marketing activities were reduced to a minimum.
The service infrastructure is being maintained pending further
clarification of the development of the digital satellite market
in Germany, and in particular the possibility of supporting the
introduction of HDTV.
Revenue streams
SES ASTRA’s services businesses
experienced dynamic growth
in 2008.
SES Annual Report 2008
20
ASTRA/SIRIUS’ reach
continued to grow in
2008, helped by the
ongoing growth of
digital DTH reception.
Continued audience growth
The ASTRA/SIRIUS satellite system continued to experience
audience growth in the 35 countries6 within its footprint. In
early 2009, 122.2 million homes were served with audiovisual
broadcast and broadband services via ASTRA at 19.2º, 23.5°,
28.2º East and SIRIUS at 5.0º East.
102.7
ASTRA/SIRIUS consolidated its position as the leading European
satellite system for DTH reception. By year-end 2008, 53.4
million homes received SES ASTRA or SES SIRIUS services
directly via satellite.
A further 68.8 million homes received ASTRA or SIRIUS services
via cable.
More than 120 million European TV homes are now digital
The growing choice of digital TV and radio channels boosted
total digital reception of broadcast content (via satellite, DSL,
cable and terrestrial) to 122.1 million homes, an increase of
24.1 million homes compared to the previous year. Satellite is
the most popular digital reception mode: 63.9 million homes
received digital satellite broadcasts, a total market share
of 52.3%.
The overall audience growth of ASTRA/SIRIUS reflects the ongoing
growth of digital DTH reception. At year-end 2008, 47.2 million
homes received digital services via ASTRA at 19.2°, 23.5°,
28.2° East or SIRIUS at 5.0º East.
In a very competitive environment, ASTRA/SIRIUS reconfirmed its
strong position in the digital marketplace. Seven out of ten digital
satellite homes within its footprint are served by SES ASTRA or
SES SIRIUS satellites.
122.2
117
.26.2 million exclusively
In addition, ASTRA is still received
by
109.2 83.4% of these homes, or 5.2 million,
analogue
107.0satellite homes.
are located in the German-speaking countries which retain a
wide choice of analogue channels.
ASTRA/SIRIUS audience in Europe
(in millions of households)
150
135
120
DTH & SMATV
105
Cable
90
75
60
45
30
15
0
2004
Algeria, Austria, Belarus, Belgium, Bosnia, Bulgaria, Croatia, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Morocco, Netherlands, Norway, Poland, Portugal, Romania,
Serbia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Tunisia, Ukraine
and U.K.
6
SES Annual Report 2008
21
2005
2006
2007
2008
Operations review
“Running SES NEW SKIES and SES AMERICOM side by side,
we saw many similarities in their business models and in
their customers, who all demand international connectivity
and distribution. By combining these two organisations,
we believe we can create an even better proposition for
these customers.” Robert Bednarek, President and CEO, SES AMERICOM/NEW SKIES.
Satellite infrastructure business
SES AMERICOM, one of the leading North American satellite
operators, made strong progress during the year. In 2008,
SES AMERICOM maintained transponder availability levels of
99.999%. In 2008. SES AMERICOM and SES NEW SKIES were
combined into a new division.
Satellite fleet developments
AMC-21 was launched on August 14, 2008 and brought into
service in early October. AMC-21 provides coverage of North
America, including all 50 U.S. states, Mexico, Southern Canada,
the Caribbean and Central America. The satellite is fitted with
24 Ku-band transponders, each with 36 MHz of bandwidth.
Ciel-2 was successfully launched on December 10, 2008. The
spacecraft is located at the 129° West orbital position to serve
the Canadian and U.S. markets with 32 Ku-band transponders.
Ciel-2 entered service on January 29, 2009. The anchor customer
for the spacecraft is Echostar’s Dish Network Corporation.
During the year, the AMC-2 satellite was co-located at 101° West
to provide in-orbit backup for AMC-4, one of the satellites
affected by a solar array circuit degradation. Traffic at this orbital
position is delivered via both satellites, providing a substantial
power margin.
In March, AMC-14 was lost as a result of an anomaly on the
Proton launch vehicle. There are no plans for a replacement
satellite.
During the year, the number of transponders that were utilised
on the SES AMERICOM satellites increased to 348, representing
an overall utilisation rate of 77.8%.
Main commercial developments
SES AMERICOM made steady progress throughout the year.
As AMC-21 started commercial operations, seven transponders
were immediately contracted by the anchor customer, Public
Broadcasting Service. Since its entry into service, this attractive
capacity has been filling rapidly, and 20 out of its 24 transponders
are already contracted.
SES AMERICOM signed a landmark agreement with Comcast
for its HITS Quantum service on the AMC-18 satellite. The
contracted capacity covers 17 incremental transponders, and
resulted in the AMC-18 satellite capacity being fully committed.
In November, SES announced a multi-year agreement to
provide satellite capacity to EchoStar 77 Corporation using
capacity on QuetzSat-1. The new satellite will be used by Dish
Mexico, an EchoStar joint venture, to provide direct-to-home
services in Mexico. It is also expected that EchoStar will use
capacity on QuetzSat-1 for its DISH Network Corporation’s U.S.
DTH business. QuetzSat-1 is designed as an all-Ku-band BSS7
satellite planned for launch into the orbital location of 77° West
in 2011. Following the signature of this contract, QuetzSat-1 was
procured with Space Systems Loral in February 2009.
Other notable business developments at SES AMERICOM
included the first HD agreement with retail channel QVC, signed
in May, and the distribution of the first Punjabi network, JUS
Punjabi, in the U.S. The channel will be broadcast on AMC-1.
High definition programming has been an important growth area
for SES AMERICOM. During 2008, the number of HD channels
carried on SES AMERICOM’s satellites increased to 60 by the
end of the year.
Satellite services business
AMERICOM Government Services (AGS)
AMERICOM Government Services (AGS), which focuses
exclusively on providing satellite-based communications
solutions for civil and defence agencies of the U.S. government,
won the TROJAN follow-on contract with the U.S. Army for
an initial five-year period, with five one-year renewal options
thereafter. Revenue in the first five years will total USD 136
million and USD 150 million for the remaining five years.
In addition, AGS announced that it had been awarded a contract
to host an experimental infra-red sensing payload for the U.S.
Air Force. The contract runs over a three-year period and service
is expected to be initiated with the launch of the AMC-5R satellite.
In December 2008, SES announced it was terminating its
IP-PRIME service in the U.S. Although this initiative had achieved
operational status, and take up by rural telcos was in line with
targets, the penetration of the telcos’ customer base and
subscriber registrations were below plan. SES concluded that
the service would be unlikely to gain the traction required
for successful operations in the current economic climate.
IP-PRIME‘s operations will be maintained, in accordance
with SES’ obligations to its customers, until July 31, 2009.
Broadcast satellite services
7
SES Annual Report 2008
22
Expanding relationships
In 2008, Comcast Media Center (CMC), a
provider of centralised content management
and distribution solutions for cable operators
expanded its relationship with SES AMERICOM
through a multi-year, multi-transponder
contract. CMC will use 29 C-band transponders
at SES AMERICOM’s HD-PRIME® satellite
neighbourhood to deliver the current HITS
Quantum platform plus additional services
to HITS affiliates. “This expansion of CMC’s
relationship with SES AMERICOM allows our
HITS affiliates to deploy a highly competitive
line-up of advanced video services while realising
substantial savings in cost and bandwidth without
sacrificing quality,” said Gary Traver, COO of
Comcast Media Center.
HITS: Headends in the sky
HITS consolidates hundreds
of cable TV channels onto a few
satellites that allows a cable
network to feed hundreds of
channels via satellite into their
local networks.
SES Annual Report 2008
23
Vital intercontinental capabilities
SkyVision, a leading global provider of Internet
services over satellite and terrestrial fibre
optic systems, uses four transponders on
the NSS-10 satellite. From its key gateways
in Europe, the United States and the Middle
East, SkyVision provides ‘end-to-end’ solutions
comprising standard or custom-tailored IP
connectivity services for Internet Service
Providers (ISP’s) and telecommunications
solutions to enterprises and non-governmental
organisations. “During the last three years,
NSS-10 has provided vital intercontinental
capabilities with exceptional reliability to
our global network, a period during which
we experienced phenomenal growth. The
combination of the powerful NSS-10 satellite
with SkyVision’s VPN solutions has been a key
factor in the success of that particular product,
as well as of our other African hub-based
solutions,” commented Mark Gazit, President
and CEO of SkyVision.
Connecting businesses
Thanks to SES, customers
like SkyVision can deliver
internet connectivity to
businesses anywhere.
SES Annual Report 2008
24
Operations review
76.4%
NSS-9 was
successfully launched
from the European
space port in Kourou,
French Guiana on
February 12th, 2009.
SES NEW SKIES’ utilisation rate
increased to 76.4% during 2008.
SES NEW SKIES is a premier provider of satellite communication
services. The company serves a diverse customer base of
telecommunications providers, media broadcasters, corporations
and governments in 80 countries spanning five continents, with
a primary regional focus in Asia, Africa, Middle East and Latin
America. SES NEW SKIES owns and operates a global fleet of
seven satellites with a further three under construction. In 2008,
SES NEW SKIES and SES AMERICOM were combined into a
new division.
Satellite infrastructure business
Satellite fleet developments
During the year, the number of transponders that were
utilised on the SES NEW SKIES satellites increased to 243.
This represents a utilisation rate of 76.4%.
After the closing of the business year, on February 10, 2009,
NSS-9 was successfully launched on an Ariane rocket from the
European space port in Kourou, French Guiana. NSS-9 will be
activated at the orbital slot of 183° East. The spacecraft carries
44 active C-band transponders, and features three beams that
can interconnect on a transponder-by-transponder basis.
SES NEW SKIES procured NSS-14, the replacement satellite
for NSS-7. NSS-14, scheduled for launch in late 2010, will be
equipped with 52 C-band and 72 Ku-band transponders (36
MHz equivalents) and will operate at the 338° East orbital slot.
Replacing NSS-7 with NSS-14, and moving NSS-7 to a new orbital
slot, will add a total of 71 incremental transponders to the fleet.
The SIRIUS 5 satellite under procurement will have a payload
of 20 C-band transponders with an African hemispheric beam,
that will be commercialised by SES NEW SKIES. SIRIUS 5 will
be launched in the second half of 2011.
Main commercial developments
In 2008, SES NEW SKIES exceeded management’s expectations
and objectives. New contracts, contract renewals and precommitments, in particular on the NSS-12 satellite, demonstrated
the strength of demand across SES NEW SKIES’ markets.
The pace of business development was brisk as SES NEW
SKIES signed capacity agreements with a broad range of
customers. As of December 31, 2008, SES NEW SKIES
broadcast 641 TV and radio channels, an increase of 13%
over 2007.
A multi-year, multiple-transponder agreement was signed with
the Essel Group for C-band satellite capacity to support the
digitalisation of India’s vast cable infrastructure.
SES Annual Report 2008
SES NEW SKIES signed a contract with Global Broadcasting
& Multimedia Inc., (GBMI) for a pan-Asian DTH platform on
NSS-11. As a result, the SES NEW SKIES fleet carries five Asian
DTH services: besides GBMI, SES NEW SKIES also provides
capacity for TVB PayVision in Hong Kong, ZeeTV in India, Asia
Times Online in Thailand and CSTV in Taiwan.
In September, SES NEW SKIES was contracted by Mediascape,
Inc. to provide transponder capacity on its NSS-11 satellite at
108° East for their new direct-to-home satellite television service
targeting the Philippines. Mediascape’s DTH service aims to
launch 24 channels in its basic package that includes Filipino
and English channels at affordable prices.
CETel, a satellite services provider, contracted a 36 MHz
transponder to serve its VSAT and corporate network customers.
Agreements were also reached with Singapore Telecom
for global maritime VSAT services to be delivered across three
NSS satellites.
Globecast, a subsidiary of France Telecom, signed a five-year
contract for continued use of two 36 MHz transponders on
NSS-806 at the 319.5° East orbital slot for its services to the
Americas and Europe.
In Latin America, TV Record of Brazil selected SES NEW
SKIES’ NSS-806 and NSS-7 satellites for the distribution of its
international and domestic channel line-up. Grupo Abril, one of
the largest diversified media groups in Latin America, launched
MTV Brazil, its main TV channel for cable distribution in Brazil, on
the NSS-806 satellite.
Satellite internet provider, Talia, contracted 90 MHz of capacity
in a multi-year deal to serve customers in the Middle East and
Africa, while IDMI Lebanon has contracted 40 MHz of bandwidth
for its broadband clients in the Middle East and Africa.
In September, SkyVision, a leading global provider of Internet
services over satellite and terrestrial fibre optic systems,
renewed contracts for four transponders and contracted
additional capacity on the NSS-10 satellite. The company first
contracted SES capacity in 2005.
Arrowhead Global Solutions concluded a multi-year agreement
for 90 MHz of capacity on NSS-12. Arrowhead will use the
capacity to support U.S. government needs over the Middle
East and East Africa.
SES NEW SKIES also supported international broadcasters’ live
coverage of the Olympic Games in Beijing during August 2008.
25
Executive Committee
SES Annual Report 2008
26
Romain Bausch
Born July 3, 1953, and appointed President and Chief
Executive Officer in July 2001. Mr Bausch is also Chairman
of the Board of Directors of SES ASTRA, SES ASTRA Services
Europe, and SES SIRIUS, as well as of the Special Shareholder
Committee of SES AMERICOM/NEW SKIES. Mr Bausch became
the Director General and the Chairman of the Management
Committee of SES in 1995, following a career in the Luxembourg
civil service (Ministry of Finance). Mr Bausch occupied key
positions in the banking, media and telecommunications sectors
and spent a five-year term as a Director and Vice Chairman
of SES. Mr Bausch is also a Vice Chairman of Fedil – Business
Federation Luxembourg – and a member of the Boards of
Directors of BIP Investment Partners and of Sal. Oppenheim
S.A. He graduated with a degree in economics (specialisation
in business administration) from the University of Nancy. He
holds an honorary doctorate from the Sacred Heart University
in Luxembourg.
Robert Bednarek
Born October 6, 1957, and appointed President and CEO of SES
AMERICOM/NEW SKIES, on July 10, 2009. He joined SES as
Executive Vice President, Corporate Development in January
2002 and also was President and CEO of SES NEW SKIES.
Mr Bednarek came to SES from PanAmSat, where he served
as Executive Vice President and Chief Technology Officer since
1997 and as Senior Executive for Engineering and Operations
since 1990. Prior to joining PanAmSat, Mr Bednarek co-founded
a technology consulting firm based in Washington D.C. where
he was a partner from 1984 to 1990, and served as the Deputy
Chief Scientist for the U.S. Corporation for Public Broadcasting
from 1979 to 1984. Mr Bednarek graduated with a degree in
electrical engineering (with a speciality in communications
theory and mathematical analysis) from the University of Florida
and holds several U.S. patents related to GPS (Global Positioning
Systems). Mr Bednarek is also a member of the Boards of
SES ASTRA, SES ASTRA Services Europe and a member of
the Special Shareholder Committee of SES AMERICOM/NEW
SKIES. Mr Bednarek is also a member of the Board of the
Space Foundation.
Martin Halliwell
Born April 20, 1959, and appointed President of the newly
created SES ENGINEERING S.A. as of January 01, 2008. Prior
to this assignment, Martin Halliwell held the position of SVP
and Chief Technology Officer at SES ASTRA where he was
responsible for all engineering and operation activities. In the
course of his career at SES ASTRA, Mr Halliwell held a number
of positions, including General Manager Global Multimedia
Networks, Technical Director of SES Multimedia and Deputy
to the Technical Director of SES ASTRA. Prior to joining SES,
Martin Halliwell worked for Cable&Wireless and for Mercury
Communications. Mr Halliwell holds a BA in Mathematics and
Mechanical Engineering and an MBA specialising in external
environment and strategic management from the Open
University. Martin Halliwell is a member of the Boards of SES
ASTRA, SES ASTRA Services Europe and a member of the Special
Shareholder Committee of SES AMERICOM/NEW SKIES.
Ferdinand Kayser
Born July 4, 1958, and appointed President and Chief Executive
Officer of SES ASTRA as of January 2002. Mr Kayser came
to SES from Premiere World, the digital pay-TV bouquet of
Germany’s Kirch Group, where he was Managing Director
between 1997 and 2001. Prior to joining the Kirch Group,
Mr Kayser held a number of executive positions at CLT, Europe’s
largest commercial broadcaster, including Senior Vice President
in charge of German TV and radio activities (1989–1992),
Managing Director in charge of the launch of RTL2 (1993) and
Executive Vice President and member of the Management Board
responsible for all TV activities of CLT (1993–1996). Mr Kayser
holds a Master of Economics from the University of Paris 1,
Panthéon-Sorbonne, and has concluded specialised university
studies in Media Law and Management of Electronic Media.
Mr Kayser is a member of the Boards of SES ASTRA, SES ASTRA
Services Europe and SES SIRIUS, and a member of the Special
Shareholder Committee of SES AMERICOM/NEW SKIES.
Mark Rigolle
Born April 11, 1965, and appointed Chief Financial Officer of
SES in August 2004. Mr Rigolle joined SES from Belgacom,
the Brussels-based Telecommunications company, where he
held the positions of Chief Strategy and Business Development
Officer, and of CFO. Prior to joining Belgacom, he worked for
ABN AMRO and for Sanwa Bank. Mr Rigolle holds a degree in
Economic Science from the University of Leuven, Belgium. He
is a member of the Boards of SES ASTRA, SES ASTRA Services
Europe and SES SIRIUS, and is a member of the Special
Shareholder Committee of SES AMERICOM/NEW SKIES.
Pictured left to right: Ferdinand Kayser, Martin Halliwell,
Robert Bednarek, Romain Bausch, Mark Rigolle
SES Annual Report 2008
27
Corporate governance
SES shareholders1
Number of shares
% Voting
shareholding
% Economic
participation
A shares
Sofina Group
Luxempart S.A.
Santander Telecommunications S.A.
Other shareholders
BCEE FDRs (Free float)
Total A shares
18,800,000
11,538,264
10,000,000
9,418,587
283,228,279
332,985,130
3.76%
2.31%
2.00%
1.89%
56.70%
66.66%
4.70%
2.89%
2.50%
2.36%
70.88%
83.33%
B shares
BCEE
SNCI
Etat du Grand-Duché de Luxembourg
Total B shares2
54,336,756
54,329,979
57,825,830
166,492,565
10.88%
10.88%
11.58%
33.33%3
5.44%
5.44%
5.79%
16.67%
Total
Total shares (actual)
Total shares (economic)
499,477,695
399,582,156
100%
100%
1
Significant shareholdings as of March 3, 2009.
2
A share of Class B carries 40% of the economic rights of an A share.
3
hese figures have been rounded up to the second decimal, as a result of which the Class B shareholders appear to hold a total of 33.34% of the voting interest in the
T
company. The actual total voting interest of the Class B shareholders is, however, one-third.
SES Annual Report 2008
28
Corporate governance
Chairman’s report on corporate governance
and internal control procedures
The meetings are presided by the Chairman or, in case of his
absence, by one of the Vice Chairmen of the Board or, in their
absence, by any other person hereto appointed by the meeting.
Introduction
SES is listed on both the Luxembourg Stock Exchange and on
Euronext Paris. As such the company follows both the ‘Ten
Principles of Corporate Governance’ adopted by the Luxembourg
Stock Exchange (its home market) and the governance rules
applied by companies listed in Paris (where most of the trading
in SES FDRs takes place). Where those rules conflict, e.g.
with regard to the publication of the individual remuneration
of the members of its Executive Committee, SES follows the
rules of its home stock exchange by reporting the aggregate
amount of the direct and indirect remuneration of the members
of the Executive Committee, with the fixed and the variable
components of the benefits being separately identified.
Any shareholder who is recorded in the company’s shareholder
register at least eight business days before the meeting is
authorised to attend and to vote at the meeting. A shareholder
may act at any meeting by appointing a proxy who does not
need to be a shareholder.
SES meets all the recommendations made by the “Ten
Principles” except two. With regard to Recommendation 3.9
stating that any of the committees created by the board should
only have advisory powers, the SES board has delegated some
decision-making power to the Remuneration Committee. For the
full details of these powers, see the charter of the Remuneration
Committee on the SES website (www.ses.com).
SES does not follow Recommendation 10.7 either. Under this
recommendation any shareholder who holds at least 5% of the
company’s shares should be able to submit proposals to the
board concerning the agenda of the annual general meeting,
whereas SES follows the Luxembourg law in this respect,
granting such right to any shareholder who holds at least 10%
of the SES shares. As no registered shareholder currently
holds more than 5%, but less than 10% of the SES shares,
this discrepancy between the SES articles of incorporation and
Recommendation 10.7 is not considered material.
Over the past few years, the company has continuously
increased the flow of information towards its shareholders,
mainly via its website.
In this context, the section on corporate governance contains
a constantly updated stream of information such as the latest
version of the company’s main governance documents, be it
the articles of incorporation, the corporate governance charter
(including the charters of the various committees set up by
the board) or the separate sections on the composition and
the mission of the board, the board’s committees and the
Executive Committee.
Organisation principles
Created on March 16, 2001, SES is incorporated in Luxembourg.
Following the completion of the acquisition of GE Americom
on November 9, 2001, SES became the parent company of
SES ASTRA, originally created in 1985. The Board of Directors
approved a set of internal regulations to complement the legal and
regulatory obligations, as well as the articles of incorporation of
SES. A copy of SES’ articles of incorporation, as amended most
recently on June 26, 2008 is available on the company’s website.
The annual general meeting of shareholders
Under Luxembourg company law, the company’s annual or
extraordinary general meetings represent the entire body of
shareholders of the company. They have the widest powers,
and resolutions passed by such meetings are binding upon all
shareholders, whether absent, abstaining from voting or voting
against the resolutions.
SES Annual Report 2008
The company has issued two classes of shares: Class A and
Class B shares.
Although they constitute separate classes of shares, Class
A and Class B shares have the same rights except that the
shares of Class B, held by the State of Luxembourg and by two
entities wholly owned by the State of Luxembourg, entitle their
holders to 40% of the dividend, or in case the company would
be dissolved, to 40% of the net liquidation proceeds, paid to
shareholders of Class A. Class B shares are not freely traded.
Each share, whether of Class A or B, is entitled to one vote.
In accordance with the company’s articles of incorporation, no
shareholder of Class A may hold, directly or indirectly, more
than 20%, 33% or 50% of the company’s shares, unless it has
obtained prior approval from the meeting of the shareholders.
Such limit is calculated by taking into account the shares of all
classes held by a shareholder of Class A.
A shareholder or a potential shareholder which envisages to
acquire by whatever means, directly or indirectly, more than
20%, 33% or 50% of the shares of the company must inform
the Chairman of the Board of such intention. The Chairman will
then inform the government of Luxembourg of the envisaged
acquisition which may be opposed by the government within
three months from such information, should the government
determine that such acquisition is against the general
public interest.
In case of no opposition from the government, the board shall
convene an extraordinary meeting of shareholders which may
decide at a majority provided for in article 67-1 of the law of
August 10, 1915, as amended, regarding commercial companies,
to authorize the demanding party to acquire more than 20%,
33% or 50% of the shares.
Each registered shareholder will receive written notice of the
annual general meeting, including the time of the meeting, the
agenda, as well as the draft resolutions which will be proposed
for approval to the meeting, by registered mail at least 20 days
prior to the meeting. At the same time, he will receive a copy
of the annual accounts and the consolidated accounts, including
the balance sheets and the income statements of the company.
Holders of the company’s FDRs will be represented at the
meeting by Banque et Caisse d’Epargne de l’Etat acting as
Fiduciary. Each FDR will represent one Class A share. If a
holder of FDRs wants to attend the annual general meeting
of shareholders in person, he needs to convert at least one
FDR into an A share. In order to facilitate the attendance of
the meeting by FDR holders, the company will support the
applicable charge for a conversion of up to 10,000 FDRs in
the period prior to the annual general meeting.
29
Corporate governance
Continued
Notice of the meeting and of the proposed agenda will be given
in the press. The Fiduciary will circulate the draft resolutions to
both international clearing systems, allowing FDR holders to give
their voting instructions to the Fiduciary in time for the meeting.
At the same time, the draft resolutions will be made available
on the company’s website. Unless the Fiduciary has received
specific instructions, the Fiduciary will vote in favour of the
proposals submitted by the board.
The meeting may deliberate validly only if at least half of the
shares of Class A and at least half of the shares of Class B
are represented. In the event that the required quorum is not
reached, the meeting will be reconvened in accordance with
the form prescribed by the articles of incorporation. It may
then validly deliberate without consideration of the number
of represented shares.
All the resolutions of the meeting are adopted by a simple
majority vote except if otherwise provided for by law.
The annual general meeting of shareholders is held on the
first Thursday in April at 10.30 am. The meeting held in April
2008 was attended by 98.90% of the company’s shareholders.
However, the 29,275,632 FDRs held by SES did not participate in
the vote, reducing the participation in the vote to 93.41% of the
company’s shares.
At the April 3, 2008 annual general meeting, the SES board
was renewed for three years. The shareholders elected the
17 candidates which had been proposed on the basis of a
recommendation from the SES Nomination Committee. The
candidate who had not been endorsed by the Nomination
Committee was not elected. The only new member of the board is
Ms Bridget Cosgrave. She received an induction by management
on the company’s business, as well as on the corporate governance
aspects, before she attended her first meeting.
The shareholders further approved the 2007 financial results
and the allocation of the 2007 profits, granted discharge to
the external auditor and the directors, elected Ernst & Young
as the company’s external auditor for another year, granted an
authorization to SES to buy back its own shares and approved an
increase in the directors’ fees.
During 2008, SES held one extraordinary general meeting of
shareholders at the company’s registered office at Château
de Betzdorf in the Grand Duchy of Luxembourg on June 26.
Attended by 99.95% of the company’s shareholders, the main
purpose of the meeting was the cancellation of shares of Class
A and B bought back by the company under its share buyback
programmes. The second resolution related to the amendment
of the company’s share capital in article 4 of the SES articles
of incorporation as it resulted from the cancellation of the own
shares held by the company. Both resolutions were carried by
100% of the votes expressed during the meeting.
Copies of the minutes of both shareholder meetings as well as
the information on the detailed number of the votes expressed
during these meetings are available on the company’s website.
SES Annual Report 2008
The Board of Directors and its committees
Mission
The Board of Directors is responsible for defining the company’s
strategic objectives as well as its overall corporate plan. The
board approves, upon proposal from the Executive Committee,
the annual consolidated accounts of the company and the
appropriation of results, the group’s medium-term business
plan, the consolidated annual budget of the company, and
the management report to be submitted to the meeting
of shareholders. It also approves major investments and is
responsible vis-à-vis shareholders and third parties for the
management of the company, which it delegates to the
Executive Committee.
Composition
Following its election by the shareholders in April 2008, the
board of SES is composed of 17 directors, all of them nonexecutive directors. In accordance with the company’s articles
of association, 11 board members represent holders of Class A
shares and FDRs and six board members represent holders of
Class B shares. The mandates of the current directors will expire
at the annual general meeting of shareholders in April 2011. The
Chairman of the Board of Directors, René Steichen, was elected
by the members of the board in its meeting on April 3, 2008
which followed the annual general meeting. René Steichen is
currently assisted by two Vice Chairmen, François Tesch and
Jean-Paul Zens, each one elected on the basis of proposals
submitted by directors representing shareholders of Class A
and of Class B.
In the event of a vacancy in the board, the remaining directors
may, upon a proposal from the Nomination Committee and
on a temporary basis, fill such a vacancy by a majority vote. In
this case, the next annual general meeting of shareholders will
definitively elect the new director who will complete the term
of the director whose seat became vacant. There is currently no
vacancy on the board of SES.
In accordance with internal regulations, at least one third of
the board members must be independent directors. A board
member is considered independent if he has no relationship of
any kind with the company or management, which may impact
his judgment. This is defined as:
– not having been a director for more than 12 years;
– not having been an employee or officer of the company over
the last five years;
– not having had a material business relationship with the
company in the last three years; and
– not representing a significant shareholder owning directly or
indirectly more than 5% of the company’s shares.
Ten of the 17 board members are considered independent:
Ms Bridget Cosgrave and Messrs Marcus Bicknell, Hadelin
de Liedekerke Beaufort, Jacques Espinasse, Robert W. Ross,
Christian Schaack, Terry Seddon, Marc Speeckaert, Gerd Tenzer
and François Tesch.
30
Rules of functioning
The Board of Directors meets when required by the company’s
business, and at least once in a quarter. It can only validly
deliberate if a majority of the directors are present or
represented. The resolutions of the board are passed by a simple
majority of votes of the voting directors present or represented,
not considering abstentions. Any material contract that is
proposed to be signed by the company or any of its wholly
controlled operating subsidiaries with a shareholder owning,
directly or indirectly, at least 5% of the shares of the company
is subject to a prior authorisation by the board. The board
thus approved the participation by the B-shareholders in the
company’s share buyback programmes, which was necessary
for the company in order to cancel the shares it has bought back.
Activities of the Board of Directors in 2008
The Board of Directors held six meetings in 2008, with an average
attendance rate of more than 92%, each director having attended
at least four of the six board meetings. Upon endorsement by the
Audit Committee, the board approved the 2007 audited accounts,
including the proposed dividend as well as the results for the first
half of 2008. During 2008, the board approved a new strategic
plan as well as a business plan for the period 2008–2015 which
served as the basis for the 2009 budget discussed by the board
in December.
Following its election on April 3 2008, the board elected its
representatives on the boards of SES ASTRA and SES ASTRA
Services Europe as well as on the SES AMERICOM/NEW SKIES
Shareholder Committee. It also elected six of its members to the
Audit, Remuneration and Nomination Committees, in line with
the respective governance charters of these committees.
During 2008, the board decided to launch two share buyback
programmes, the first of which was approved by the board on
April 3 and implemented on Euronext Paris through the filing of a
notice d’information on April 8. It ended with the cancellation of
22,597,140 A- and 11,298,570 B-shares in an extraordinary general
meeting of shareholders on June 26 in the presence of Notary
Me Joëlle Baden. The shareholders having approved another share
buyback programme during the same meeting, the board decided
to implement the new programme in its meeting of the same day.
The notice of this buyback programme was filed on July 4.
In both cases the four objectives of the buyback programme
were the following:
– for the company’s executive stock option plan;
– within the framework of a liquidity contract signed with
Banque Rothschild & Cie;
– for cancellation, as well as
– for a possible external transaction.
Weekly notices on the shares bought by the company are filed
with the regulatory authorities in Luxembourg and in France and
are posted on the SES website.
During the year 2008, the board approved the procurement of
several new satellites including AMC-1R, ASTRA 1N and SIRIUS 5.
The board decided to modify the business plan of entavio, and
to exit from IP-PRIME. It approved the CHIRP Research and
Development Program, which will add a passive infra-red sensor
for scientific experiments on an AMERICOM replacement
satellite, and the EGNOS payload on SIRIUS 5.
SES Annual Report 2008
The board ratified the resignation of Ed Horowitz as President
and CEO of SES AMERICOM and approved the creation of
a joint SES AMERICOM/NEW SKIES management team, as
well as of a Special Shareholder Committee to advise the SES
AMERICOM/NEW SKIES management. Changes to the SES
internal regulations were approved and a new share ownership
programme, under which the members of the Executive
Committee have five years to hold the equivalent of their yearly
salary in the form of registered shares, was introduced. The
President and CEO of SES will need to hold two years’ worth of
base salary in registered shares.
Finally, the board approved an extraordinary dividend distribution/
capital reduction by SES ASTRA and SES AMERICOM and upon
a proposal from the Remuneration Committee, it modified the
Long Term Incentive Plan for the company’s management.
The board was regularly informed by the Executive Committee
on the group’s activities and financial situation. At each meeting,
the Executive Committee briefs the board on ongoing matters
as well as on possible upcoming investment or divestment
decisions. At each board meeting, the chairmen of the three
committees set up by the board present a report on the latest
developments discussed in these respective committees. In
addition, a business report is distributed to the members of the
board on a monthly basis.
No self-evaluation exercise was conducted by the board.
Following the one held in 2007, a new self-evaluation of the
Board’s composition, work and functioning is planned in 2009.
Following their election by the shareholders in the annual
general meeting on April 3, 2008, the members of the Board
of Directors are:
René Steichen
Born November 27, 1942. Mr Steichen became a director on
June 1, 1995. He was elected Chairman on April 15, 1996. Prior
to that time, he was a member of the Luxembourg government
(1984–1993) and member of the European Commission (1993–
1995). He is currently an attorney at law in Luxembourg. He is
also a member of the Board of Directors of SES ASTRA, SES
ASTRA Services Europe, the Special Shareholder Committee
of SES AMERICOM/NEW SKIES, Dexia-Banque Internationale
à Luxembourg, CLT Group and Luxempart. Mr Steichen studied
law and political science in Aix-en-Provence and Paris. He
holds a doctorate in law and also earned the final degree in
economics and finance from the Institut d’Etudes Politiques of
Paris. Mr Steichen is the Chairman of the Board as well as of the
company’s Nomination and Remuneration Committees.
Mr Steichen is not an independent director because he
represents an important shareholder.
François Tesch
Born January 16, 1951. Mr Tesch became director on
April 15, 1999. He is also Managing Director of Foyer S.A. and
Luxempart. Mr Tesch sits also on the Board of Directors of the
non-listed corporation BNP Paribas Luxembourg. He graduated
in economics from the Faculté d’Aix-en-Provence and holds
an MBA from INSEAD (Institut Européen d’Administration des
Affaires). Mr Tesch is Vice Chairman of the board of SES and a
member of its Audit Committee.
Mr Tesch is an independent director.
31
Corporate governance
Continued
Jean-Paul Zens
Born January 8, 1953. Mr Zens became a director on May
7, 2002, and was elected Vice Chairman on the same date.
Mr Zens is also a member of the Board of Directors of SES
ASTRA, SES ASTRA Services Europe, the Special Shareholder
Committee of SES AMERICOM/NEW SKIES, and Entreprise
des Postes et Télécommunications, Luxembourg. He is currently
Director of the Media and Communications department of the
Ministry of State in Luxembourg. He holds a law degree as
well as a degree in psychology and communications sciences
from the University of Strasbourg. Mr Zens is a member of the
Nomination Committee of SES.
Mr Zens is not an independent director because he represents
an important shareholder.
Marcus Bicknell
Born February 28, 1948. Mr Bicknell was appointed to the Board
of Directors of SES on May 6, 2005. Mr Bicknell is a director
of New Media Foundry Ltd and RainWater Harvesting Ltd,
non-listed companies in the United Kingdom, and a board member
of the U.K. chapter of the Society of Satellite Professionals
International. From 1986 to 1990 he was Commercial Director
of Société Européenne des Satellites. Mr Bicknell holds an MA
Honours Degree in Physical Anthropology from Cambridge
University. Mr Bicknell is a member of both the Remuneration
and the Nomination Committees.
Mr Bicknell is an independent director.
Bridget Cosgrave
Born July 1, 1961. Ms Cosgrave became a director on April 3,
2008. She is a director of Essilor International S.A., which is
listed on the Euronext Paris. She is also a member of the Board
of Directors of SES ASTRA, SES ASTRA Services Europe and
the Special Shareholder Committee of SES AMERICOM/NEW
SKIES. Ms Cosgrave was with Belgacom S.A. from 2001-2007
as a member of the Executive Committee. Her roles included
Executive Vice President of the Enterprise division, Chairman of
the International Carrier Services division, and board member of
Belgacom Mobile (Proximus) and Telindus Group. Ms Cosgrave
holds an MBA from London Business School and a BA (Hons) in
Economics & History from Queen’s University in Canada.
Ms Cosgrave is an independent director.
Hadelin de Liedekerke Beaufort
Born April 29, 1955. Mr de Liedekerke Beaufort became a
director on April 17, 2000. He is currently a director of Santander
Telecommunications, a privately held company, as well as a
director of other private companies with interests in various fields
such as financial, communication and real estate developments.
Mr de Liedekerke Beaufort graduated from the Ecole Hôtelière
de Lausanne. Mr de Liedekerke Beaufort is a member of both the
Remuneration and the Nomination Committees of SES.
Jacques Espinasse
Born May 12, 1943. Mr Espinasse has been appointed a director
of SES by the annual general meeting of May 6, 2005. In May
2007, after five years of duty, he retired as a member of the
Management Board and Chief Financial Officer of Vivendi
Universal. Mr Espinasse is the former Chief Operations Officer
of TPS. He is a member of the Supervisory Boards of Maroc
Telecom, LBPAM, Axa Belgium, Axa Holdings Belgium and
Hammerson Plc and holds a BBA and an MBA from the University
of Michigan. Mr Espinasse is a member of the Audit Committee,
the Remuneration Committee and the Nomination Committee.
Mr Espinasse is an independent director.
Jean-Claude Finck
Born January 22, 1956. Mr Finck became a director on May 31,
2001. Mr Finck is Chief Executive Officer of Banque et Caisse
d’Epargne de l’Etat, a member of the Boards of Directors of
Bourse de Luxembourg, Luxair, Cargolux, insurance companies
La Luxembourgeoise, La Luxembourgeoise Vie, Paul Wurth
and of Compagnie de Banque Privée. Mr Finck graduated with
a degree in economics from the University of Aix/Marseille.
Mr Finck is a member of the Remuneration Committee and of
the Audit Committee of SES.
Mr Finck is not an independent director because he represents
an important shareholder.
Gaston Reinesch
Born May 17, 1958. Mr Reinesch became a director on July
1, 1998. Mr Reinesch is invited Professor at the University of
Luxembourg. He is Chairman of the Société Nationale de Crédit
et d’Investissement, and of the Board of Directors of Entreprise
des Postes et Télécommunications and of BGL. He is also,
among others, a member of the Board of Directors of Cegedel,
Banque et Caisse d’Epargne de l’Etat and the European
Investment Bank. Mr Reinesch is General Administrator of the
Ministry of Finance, Luxembourg, and graduated with a Master
of Science in economics from the London School of Economics.
Mr Reinesch is a member of the Audit Committee of SES.
Mr Reinesch is not an independent director because he
represents an important shareholder.
Victor Rod
Born April 26, 1950. Mr Rod became a director on November
23, 1995. He is President of Commissariat aux Assurances
and Chairman of the Board of Directors of Banque et Caisse
d’Epargne de l’Etat, Luxembourg. Mr Rod graduated with a
degree in law from the University of Nancy.
Mr Rod is not an independent director because he represents
an important shareholder.
Mr de Liedekerke Beaufort is an independent director.
SES Annual Report 2008
32
Robert W. Ross
Born January 8, 1941, Mr Ross became a director of SES on
June 28, 2007. He has had a long career in the field of media and
telecommunications in which he has held senior executive and
director positions. He retired as CEO of New Skies in January
2002 but continued to serve as advisor to the company until July
2004. He is a member of the Special Shareholder Committee of
SES AMERICOM/NEW SKIES. Mr Ross graduated from Brown
University and holds MA and JD degrees from Boston University
in the United States.
Marc Speeckaert
Born May 23, 1951. Mr Speeckaert is the General Manager of
Sofina S.A. and a director of several non-listed corporations as
well as of Rapala which is listed on the Helsinki Stock Exchange
and of Carbone Lorraine, listed on Euronext Paris. Mr Speeckaert
graduated with a degree in Applied Economics and holds a
Master in Business and Administration from the Université
Catholique de Louvain (UCL). He also holds an Advanced
Management Program from Wharton, University of Pennsylvania
(USA). Mr Speeckaert is the Chairman of the Audit Committee.
Mr Ross is an independent director.
Mr Speeckaert is an independent director.
Luis Sanchez-Merlo
Born October 10, 1947. Mr Sanchez-Merlo became a director
on April 17, 2000. Mr Sanchez-Merlo is the Chairman of the
Board of ASTRA Iberica S.A. and Lantana Capital S.A., as well
as a member of the board of Abantia SA. Mr Sanchez-Merlo
graduated with a degree in law and economics from the
Universidad Comercial de Deusto. He also holds a Master’s in
law from the College of Europe and a Master’s in economics
from the University of Louvain.
Terry Seddon
Born February 14, 1941. Mr Seddon joined the Board of Directors
of SES in 2005. He is a member of the Special Shareholder
Committee of SES AMERICOM/NEW SKIES. He has had a
long international career in the field of telecommunications, in
which he held several senior executive and director positions.
More recently he was Chairman of New Skies Satellites Ltd
and was the founding CEO of AsiaSat. He has also held several
non-executive directorships of U.K. manufacturing and operating
companies. Mr Seddon graduated from Blackburn Polytechnic
and Leeds University of the U.K. Mr Seddon is a member of
the Audit Committee, the Remuneration Committee and the
Nomination Committee.
Mr Sanchez-Merlo is not an independent director because he
has a material relationship with the company.
Christian Schaack
Born March 21, 1958. Mr Schaack became a director on
December 7, 2000. Mr Schaack is Managing Director of BGL.
He sits on the Board of Directors of BIP Investment Partners
and Fortis Bank Turkey. Mr Schaack graduated from the
Massachusetts Institute of Technology with a PhD in Operations
Research and an SM in Management. He holds an Engineering
degree from Ecole Polytechnique in Paris.
Mr Schaack is an independent director.
Georges Schmit
Born April 19, 1953. Mr Schmit became a director on November
12, 1992. He served as Vice Chairman from May 31, 2001 to
May 6, 2002. Mr Schmit is Director General for Enterprise,
Economic development and Foreign trade at the Ministry of the
Economy and Foreign Trade, Luxembourg. He is Vice Chairman
and member of the Executive Committee of National Credit
and Investment Corporation and Vice Chairman of Entreprise
des Postes et Télécommunications, Luxembourg. He is also a
director of ArcelorMittal, Banque et Caisse d’Epargne de l’Etat,
Luxembourg, Paul Wurth and CTI Systems. Mr Schmit graduated
with a degree in economics from the University of Louvain and
an MA in Economics from the University of Michigan.
Mr Seddon is an independent director.
Gerd Tenzer
Born August 4, 1943. Mr Tenzer became a director on March
11, 1999, and was Vice Chairman from May 2002 until April
2006. From January 1990 to November 2002, Mr Tenzer was
a member of the Board of Management of Deutsche Telekom
AG where he was responsible for networks, purchasing,
environmental protection, wholesale services for carriers,
broadband cable and broadcasting services. He was special
adviser to the CEO of Deutsche Telekom AG from December
2002 until December 2004. He also sits on the Board of SES
ASTRA and of SES ASTRA Services Europe in Luxembourg. He
is Chairman of the Advisory Board of Sutter Verzeichnisverlag
GmbH&Co.KG in Germany and member of the Board of
Transmode Holding AB in Stockholm. Mr Tenzer graduated with
a degree in Communications Engineering (Dipl. Ing.) from the
Technical University in Aachen.
Mr Tenzer is an independent director.
Mr Schmit is not an independent director because he represents
an important shareholder.
SES Annual Report 2008
33
Corporate governance
Continued
Committees of the Board of Directors
The Chairman’s Office
The Chairman and the two Vice Chairmen are members of the
Chairman’s Office. The Chairman’s Office prepares the agenda
for the board meetings, allowing the Vice Chairmen to coordinate
the preparation of the board meetings with the directors of their
share class.
Current members are:
René Steichen
François Tesch
Jean-Paul Zens.
The Chairman’s Office met six times during 2008 with a
members’ attendance rate of 100%.
The Remuneration Committee
In accordance with general corporate governance standards, the
company’s board established a Remuneration Committee which
determines the remuneration of the members of the Executive
Committee, and which advises on the overall remuneration
policies applied throughout the company. It reports to the board
at each meeting through its Chairman. Following its election on
April 3, 2008, the Remuneration Committee is composed of the
following six members, a majority of whom are independent
board members in line with the SES internal regulations:
René Steichen
Marcus Bicknell (independent)
Jacques Espinasse (independent)
Hadelin de Liedekerke Beaufort (independent)
Jean-Claude Finck
Terry Seddon (independent).
The Remuneration Committee was chaired in 2008 by the
Chairman of the Board.
The Remuneration Committee held four meetings with an
attendance rate of 100%. Matters addressed related to
the determination of the 2008 stock option grant and the
2008 bonus for members of the Executive Committee. The
Remuneration Committee further determined the number of
performance shares allocated to the members of the Executive
Committee for their performance in 2007 and it adopted the
2008 business objectives which are used as one element in
the determination of their bonus for 2008. The Remuneration
Committee received a presentation on the SES remuneration
philosophy, and decided to re-balance the weight of stock
options, restricted shares and performance shares and to extend
the attribution of the performance shares to all executives. The
Remuneration Committee also proposed to the Board to align
the long-term interest of the Executive Committee members
with the shareholders’ interest by introducing a new scheme
under which the members of the Executive Committee must
within five years hold the equivalent of an annual salary’s worth
of registered shares in the company (with the President and
CEO of SES having to hold shares worth two years of his salary).
SES Annual Report 2008
The Audit Committee
As part of its overall corporate governance, the board
established an Audit Committee, which assists the board in
carrying out its responsibilities in relation to corporate policies,
internal control, and financial and regulatory reporting practices.
The Committee has an oversight function and provides a link
between the internal and external auditors and the board. The
Audit Committee is composed of six members, four of whom
are independent board members.
The current members of the Audit Committee are:
Marc Speeckaert, Chairman of the Audit Committee,
(independent)
Jacques Espinasse (independent)
Jean-Claude Finck
Gaston Reinesch
Terry Seddon (independent)
François Tesch (independent).
The Audit Committee held four meetings with a members’
attendance rate of 96%.
The meetings were dedicated in particular to the review of the
2007 financial results before their submission to the board and
their subsequent approval by the shareholders at the statutory
annual general meeting, and to the results of the first half of
2008. Members of the board also had the opportunity to channel
any comments they had on the company’s quarterly results
through the Chairman of the Audit Committee prior to the
publication of these results.
The Audit Committee reviewed the company’s statement on
internal control systems prior to its inclusion in the annual report,
as well as the Internal Audit budget. It approved the Internal
Audit plan and amended the Internal Audit Charter, taking into
account the results from the previous year’s external quality
assessment of the Internal Audit function.
The Audit Committee also discussed the group credit policy,
and received updates on the project to introduce a corporate
database containing essential corporate data on each of the
group’s companies. It discussed the project to eliminate a
significant number of non-operating entities over the coming
months and was briefed on the group-wide project to raise
awareness of the SES Code of Conduct and Ethics which was
rolled out during 2007.
The Nomination Committee
In line with best practice in corporate governance, the board
established a Nomination Committee whose role is to identify
and nominate suitable candidates for the Board of Directors, for
election by the annual general meeting of shareholders. Such
proposals are based on submissions from shareholders for a
number of candidates at least equal to the number of posts
to be filled for each class of shareholders. The Nomination
Committee also proposes candidates for Executive Committee
membership for election by the board.
34
Following its election on April 3, 2008, the Nomination
Committee is now composed of the following six members, a
majority of whom are independent board members in line with
the SES internal regulations:
René Steichen
Marcus Bicknell (independent)
Jacques Espinasse (independent)
Hadelin de Liedekerke Beaufort (independent)
Terry Seddon (independent)
Jean-Paul Zens.
The Nomination Committee was chaired in 2008 by the
Chairman of the Board. The Nomination Committee met twice
with an attendance rate of 100%. The purpose of the first
meeting was to build on the preparatory work done in 2007 and
to agree on the list of 17 names which was endorsed by the
board for the election of a new board by the shareholders in the
annual general meeting, whereas in its second meeting, the
Nomination Committee had a discussion on the Management
Succession Plan 2008. Input for that discussion had been
prepared with the help of outside consultants.
The Executive Committee
Mission
The Executive Committee is in charge of the daily management
of the group. It functions as a collegial body.
The board also mandated the Executive Committee with the
preparation and planning of overall policies and strategies of
the company as well as of decisions reaching beyond the daily
management for discussion and decision by the board.
The Executive Committee may approve intra-group transactions
irrespective of the amount, provided that they are consistent
with the consolidated annual budget of the company as well
as specific transactions with third parties for an amount up
to EUR 10 million per project. It informs the board at its next
meeting on each such transaction, it being understood that the
aggregate amount for such projects can at no time be higher
than EUR 30 million.
The Executive Committee may approve any external credit
facilities or external guarantees, pledges, mortgages and any
other encumbrances of the company, or any wholly owned
affiliate, for as long as the company will not lose its investment
grade rating as a result of said facility or guarantee. It may
approve increases of up to 5% in the capital expenditure budget
for a satellite procurement already approved by the board, it
being understood that the Internal Rate of Return will need to
comply with certain specific thresholds defined by the board.
The Executive Committee shall inform the board at its next
meeting on each such increase.
The Executive Committee submits to the board those measures
which it deems necessary to be taken in order to meet the
purposes of the company. Prior to the beginning of each
fiscal year, the Executive Committee submits to the board a
consolidated budget for approval.
The Executive Committee is in charge of implementing all
decisions taken by the board and by the committees specially
mandated by the board. The Executive Committee may, in the
interest of the company, sub-delegate part of its powers and
duties to its members acting individually or jointly.
SES Annual Report 2008
The Chairman of the Executive Committee organises the work
of the Executive Committee and coordinates the activities of
its members, who report directly to him. In order to facilitate
the implementation by the board of its overall duty to supervise
the affairs of the company, the Chairman of the Executive
Committee informs the Chairman of the Board on a regular
basis. The latter receives the agenda and the minutes of all
meetings of the Executive Committee in due time.
During 2008 the Executive Committee met 40 times with an
attendance rate of more than 97%. Pierre Margue, Vice President
Legal and Corporate Affairs, the secretary of the Board of
Directors, also acted as secretary to the Executive Committee.
Composition
The following persons are members of the Executive Committee:
the President and CEO of SES who assumes the chairmanship
of the Executive Committee, the Chief Financial Officer of SES,
the President and CEO of SES ASTRA, the President and CEO
of SES AMERICOM/NEW SKIES as well as the President
of SES ENGINEERING.
Members of the Executive Committee are nominated by
the Board of Directors upon proposal from the Nomination
Committee.
The members of the Executive Committee are presented on
pages 26 and 27.
Remuneration
Remuneration of the members of the Board of Directors
The annual general meeting of shareholders determines
the remuneration of the members of the Board of Directors
for attending board and committee meetings. In 2008, the
shareholders approved the proposal to increase the fees paid to
the directors to EUR 40,000 per year. Vice Chairmen receive an
annual fixed fee of EUR 48,000, whereas the Chairman receives
EUR 100,000 per year. The Chairman of the Audit Committee
receives an additional EUR 8,000 per year for chairing the
Audit Committee.
The shareholders also decided that each member of the Board
of Directors (including the Vice Chairmen and the Chairman) will
receive a fee of EUR 1,600 for each meeting of the board or of a
committee of the board they attend. Half of that fee will be paid
if the director participates via telephone or videoconference in
the meeting.
All these fees are net of any Luxembourgish withholding taxes.
The total net remuneration fees paid for the year 2008 to the
members of the Board of Directors (net of the Luxembourgish
withholding tax) amounted to EUR 975,500 of which EUR
268,800 were paid as variable fees, with the remaining EUR
706,700 representing the fixed part of the board fees. The gross
overall figure for the year 2008 was EUR 1,219,375.
Company stock owned by members of the Board of Directors
On December 31, 2008, the members of the Board of
Directors owned a combined total of 633,865 shares and FDRs
(representing 0.13% of the company’s share capital), and
9,320 options. These options were granted at the time of the
company’s IPO in 1998. No additional options have been granted
to directors since.
35
Corporate governance
Continued
Remuneration of the members of the Executive Committee
The remuneration of the members of the Executive Committee
is determined by the Remuneration Committee. It is composed
of a fixed and a variable part. The total gross remuneration paid
to the six members of the Executive Committee relative to
the year 2008 amounted to EUR 8,356,477.08, of which EUR
2,967,851.90 represented the fixed part and EUR 5,388,625.18
the variable part. The direct remuneration paid to the members
of the Executive Committee amounted to EUR 5.579.851.43
whereas the indirect remuneration was EUR 2.776.625.66.
The indirect remuneration also contains the benefits derived by
the members of the Executive Committee from the company’s
executive stock option plan and the long-term incentive plan, as
adopted by the Board of Directors. During 2008, the members
of the Executive Committee were awarded a combined total
of 244,048 options to acquire company FDRs at an exercise
price of EUR 14.62, the price being based on the average of
the closing price on Euronext Paris of the first 15 trading days
following the Remuneration Committee meeting at which the
options are authorized. A quarter of those options vested on
January 1, 2009, the remaining quarters vesting on January
1, 2010, 2011 and 2012 respectively. In 2008, members of the
Executive Committee were granted 80,834 restricted shares as
part of the company’s long-term incentive plan as well as 21,929
performance shares to match the restricted shares granted in
2007. These shares will vest after three years.
During 2008, Martin Halliwell and Robert Bednarek exercised
some of their stock options, whereas Romain Bausch and
Martin Halliwell sold some of the restricted shares which vested
on July 1. SES publishes the details of all transactions made by
its board members, the members of its Executive Committee
and the members of the Management Committees of its main
operating companies on its website.
Company stock owned by members of the Executive Committee
On December 31, 2008, the members of the Executive
Committee owned a combined total of 67,939 shares and FDRs,
260,600 unvested restricted shares and 1,544,750 options.
Transactions made by members of the Executive Committee
or members of the Management Committees of SES ASTRA,
SES AMERICOM and SES NEW SKIES are published on the
company’s website under Management Disclosures.
External auditor
In accordance with the Luxembourg law on commercial
companies, the company’s annual and consolidated accounts are
certified by an external auditor appointed by the annual general
meeting of shareholders. On April 3, 2008, the shareholders
retained Ernst & Young for another year and approved its
remuneration, with a majority of more than 99.99%. The
mandate of Ernst & Young will expire at the annual general
meeting on April 2, 2009.
SES Annual Report 2008
Internal control procedures
Objective
The Board of Directors has overall responsibility for ensuring that
the SES group maintains a sound system of internal controls,
including financial, operational and compliance controls. Such a
system is an integral part of the corporate governance strategy
of the group.
Internal control procedures help to ensure the proper management
of risks and provide reasonable assurance that the business
objectives of the company can be achieved.
The internal control procedures are defined and implemented by
the company to ensure:
– the compliance of actions and decisions with applicable laws,
regulations, standards, internal rules and contracts;
– the efficiency and effectiveness of operations and the optimal
use of the group’s resources;
– the correct implementation of the company’s internal
processes, notably those to ensure the safeguarding of assets;
– the integrity and reliability of financial and operational
information, both for internal and external use; and
– that management’s instructions and directions are
properly applied.
Like all control systems, internal controls cannot provide an
absolute guarantee that risks of misstatement, losses or human
error have been totally mitigated or eliminated.
Organisational principles
The Board of Directors has delegated the design, implementation
and maintenance of a rigorous and effective system of
internal controls to the Executive Committee of SES, who
in turn works closely with the management of its subsidiaries
and other controlled affiliates in establishing control policies
and procedures.
Each operating company of the group applies two levels of
internal control policies and procedures:
– common policies formalised by several coordination
committees or cross-functional teams to apply to the
employees, officers and directors of the group company,
its subsidiaries and other controlled affiliates as the general
framework for their own business process design; and
– the policies and procedures specific to each company and
adapted to their activity, size and organisation, and to their
relevant legal and regulatory environment.
The organisation, application and monitoring of these policies
and procedures, and therefore, risk management, are the
responsibility of each operating company’s management.
Internal control procedures
The group has adopted a robust internal control framework
based on a set of guidelines prepared by a recognised body,
the COSO (Committee of Sponsoring Organisations of the
Treadway Commission). This framework provides reasonable
assurance that the internal control objectives are being achieved;
it is also consistent with the reference framework proposed
by the French securities regulator, the ‘Autorité des Marchés
Financiers’ (AMF).
36
The control environment is an essential element of the
company’s internal control framework as it sets the tone for the
organisation. This is the foundation of the other components of
internal control, providing discipline and structure.
A “Code of Conduct and Ethics” has been established to reinforce
the corporate governance principles and control environment. This
code is applicable to all employees, officers and directors of the
company, its subsidiaries or other controlled affiliates.
The policies outlined in this code are designed to ensure that all
employees, officers and directors act at all times in accordance with
the applicable laws, regulations and norms of conduct, and with the
highest standards of integrity. The code was submitted to the Audit
Committee and has been approved by the Board of Directors.
Employees and officers in all entities of the group have been
informed of the content of the code of conduct and its applicable
principles. For new hires, training on the code is integrated in
the induction training. In June 2008, the Executive Committee
of SES created a group-wide SES Compliance Committee which
is chaired by the compliance officer of SES S.A. The main role of
this committee, composed of designated compliance officers of
each SES subsidiary, is to raise the staff’s awareness of the code
and to ensure a consistent roll-out and training programme for
the code.
Regarding the internal controls in the area of accounting and
financial reporting, the following should be noted:
– staff involved in the group’s accounting and financial
reporting are regularly updated concerning relevant changes
in International Financial Reporting Standards (IFRS). This is
augmented by specific written guidance on particular matters
where needed and a group reporting handbook is available
which summarises the group’s accounting and financial
reporting guidelines and policies;
– controls have been established in the processing of accounting
transactions to ensure appropriate authorisations for
transactions, effective segregation of duties, and the complete
and accurate recording of financial information;
– activities with a significant potential risk, for instance financial
derivative transactions, take place within a clearly defined
framework set by the board, or are brought to the board for
specific approval;
– any weaknesses in the system of internal controls identified
by either internal or external auditors are promptly and
fully addressed;
– the group relies on a comprehensive system of financial
reporting. Strategic plans, business plans, budgets and the
interim and full-year consolidated accounts of the company are
drawn up and brought to the board for approval. The Board of
Directors also approves major investments. The board receives
detailed monthly financial reporting comparing the group’s
financial performance to the approved budget and prior year
figures; and
– the external auditors perform a limited review of the group’s
half-year financial statements and a full audit of the group’s
full-year financial statement.
SES Annual Report 2008
Regarding the internal controls in the area of treasury
management, the following should be noted:
– in order to ensure the efficiency of the operations of this
function in the implementation of a strategy to hedge the
group’s risk associated with interest rate and foreign currency
fluctuations, a specific treasury software package has been
implemented. This package also aims to centralise the cash
management of the SES operating subsidiaries. A clear
segregation of duties between members of the treasury and
accounting departments has been defined;
– a comprehensive treasury policy giving detailed guidance on
derivative instruments used and the appropriate accounting
treatment has been defined and approved by the Audit
Committee; and
– the activities of the group Treasurer, and in particular the
hedging activities engaged during the year, are authorised
within the framework approved by the Board of Directors.
The group Treasurer reports on a formal basis every quarter to
the Board of Directors.
Regarding the internal controls in the area of tax management,
the following should be noted:
– the tax management department aims to seek upfront tax
clearance with relevant local tax authorities with regard to
the tax ramifications of main business ventures, corporate
reorganisations and financing structures of the group.
Absent the possibility to secure advance confirmation from
tax authorities, the tax treatment is analysed based on best
authoritative interpretations and laid down in tax opinions from
external tax consultancy firms;
– in order to ensure full coordination with regard to
developments of important financing and group structures after
implementation, the SES internal “tax programmes review
platform”, consisting of corporate and operating company
support functions is instigated and meets periodically;
– the transfer pricing team is responsible for continuously
improving and fine-tuning the required contemporaneous
transfer pricing documentation (in accordance with local
regulations) underpinning all inter-company transactions
of the group; and
– a “tax risk memo” is prepared semi-annually by the tax
management department. In the event a specific tax risk is
identified, management can decide to create a tax provision
to cover potential income statement impacts on an entity or
group basis. The tax risk position of the group is subject to
a discussion with the external auditors in the context of the
annual audit and semi-annual review process.
37
Corporate governance
Continued
Regarding the internal controls in the area of satellite operations,
the following should be noted:
– the procurement of satellites, launch vehicles and
satellite-related ground infrastructure, as well as the
administration, control and operations of the satellite system
are the responsibility of the newly created group-wide
SES ENGINEERING entity;
– a satellite operations risk management process is in place to
monitor and assess sources of technical risks and to develop
qualitative, quantitative and statistical methods which allow the
mitigation of risk at the satellite fleet level;
– operational procedures for satellite control and payload
management exist and cover manoeuvres and configuration
changes required in nominal situations as well as in cases of
technical emergencies. These procedures are periodically and
reviewed to ensure that they are up-to-date; and
– crisis management systems and supporting infrastructure and
tools have been designed in order to address satellite in-orbit
anomaly situations at the appropriate level of responsibility.
Regarding the internal controls in the area of information and
communication technology, the following should be noted:
– management is committed to ensure that data, infrastructure
and information technology systems are as secure as is
reasonably practicable. Security controls, policies and
procedures are in place to prevent unauthorised access to
premises, computer systems, networks and data;
– regular back-up of electronic information is ensured and copies
are stored off-site; and
– for non-satellite related business applications, disaster
recovery plans exist and are regularly tested.
Evaluation of the internal control procedures
The SES group Internal Audit function was established in 2000.
Internal Audit evaluates the relevance of, and compliance with,
internal control procedures.
The mission of the Internal Audit function is to provide
independent and objective assistance and assurance regarding
the effectiveness and efficiency of business operations, the
reliability of financial and operational reporting, and the group’s
compliance with legal and regulatory requirements. In this
context, Internal Audit is also tasked with identifying, preventing
and minimising risks, as well as with the safeguarding of the
group’s assets.
Under its charter, which was revised and amended in 2008, the
Internal Audit function reports to the President and CEO of SES,
but may also report directly to the Audit Committee.
SES Annual Report 2008
The activities of the Internal Audit function are executed in
accordance with an annual audit plan which is reviewed and
approved by the Audit Committee. This annual plan is derived
from a three-year strategic audit plan established using a risk
assessment methodology based on a risk mapping exercise.
This exercise is undertaken every three years by the Internal
Audit function. It involves identifying the inherent risks relative
to all business processes and then assessing the levels of
residual risks after consideration of specific mitigating controls.
Internal Audit monitors the implementation of internal control
recommendations and regularly reports on effective compliance
to the President and CEO of SES and to the Audit Committee.
Internal Audit also regularly coordinates audit planning and
exchanges relevant information with the group’s external auditors.
As a result of an external quality assessment conducted in
2007, which confirmed that the Internal Audit function generally
conforms with the professional standards defined by the
Institute of Internal Auditors (IIA), the Internal Audit function
initiated an improvement action plan. This plan focuses on the
documentation of the internal audit procedures (audit manual),
Internal Audit’s relationships with key stakeholders, and the
introduction of an annual risk assessment in order to dynamically
link the audit plan to risks that may affect the organisation and
its operations.
Human resources
Human resources strategy
SES aims to be the employer of choice in the industry. The
company identifies, secures, engages, develops and retains
the best talent to further expand its technological reach and
business objectives.
SES respects and trusts its people, embraces diversity and lives
by its values. SES senior managers have a responsibility as role
models to all SES employees, and must therefore act in accordance
with the guidelines laid down for SES senior management.
SES employees are engaged, committed and proud to be
associated with their company.
To leverage the employees’ full potential, SES focuses on
competency development, alignment of objectives and knowledge
sharing. SES ensures that every employee has the necessary
resources and support to be successful in his or her career within
the context of its performance management system. Human
Resources is the catalyst to drive organisational and cultural
initiatives leading to sustainable stakeholders’ value creation.
38
SES employees
At year-end 2008, SES employed a total of 1,624 staff1.
The detail is shown in the table below.
2008 SES S.A.2
59
SES ASTRA
294
SES AMERICOM/NEW SKIES
403
SES ENGINEERING
319
ASTRA PLATFORM SERVICES (APS)
149
SES SIRIUS
42
ND SatCom
358
Total
1,624
SES values and culture
The SES companies observe a common set of core values,
which provide guidance for their activities. These values inspire
a unique organisational culture and reflect our aspirations,
which are geared towards achieving the highest performance
at the service of customers, shareholders and society at large.
SES’ values are primarily focused on providing highest-quality
customer service.
They are:
Excellence
Having the passion and commitment to be the best in
our industry.
Partnership
Developing and maintaining cooperative relationships that build
upon strengths and skills within the group to achieve common
goals and benefits at the service of the customers.
Leadership
Articulating strategic vision, demonstrating values, and
creating an environment in which we can meet the needs
of the marketplace.
Integrity
Consistently applying the principles of honesty, accountability,
responsibility, fairness and respect.
Innovation
Establishing a business culture that stimulates creativity across
the organisation, develops employees’ skills and improves
processes, products and services.
Remuneration
The SES companies apply a performance-based compensation
philosophy. Remuneration includes: base salaries, performance
bonuses, stock options, stock appreciation rights, long-term
incentives and fringe benefits that are continuously reviewed
in line with best market practices.
Stock-related compensation schemes
SES applies an equity incentive compensation plan. The
purpose of the plan is to attract and retain highly qualified
leadership level staff. This policy applies to executive-level
employees of SES. 1,866,042 options were granted in 2008
to 175 executive participants.
Long-term incentive scheme for executives
Our long-term incentive scheme for executives is based on
restricted shares (restricted for a vesting period of three years) and
on performance shares (shares which are only granted in case the
company and the executive meet or exceed a certain performance
threshold over a three year period). 246,223 restricted shares and
56,145 performance shares were granted in 2008.
Stock appreciation rights plan
SES operates a stock appreciation rights (STAR) plan, which
applies to the non-executive-level staff. Through the grant of stock
appreciation rights, the company aims to encourage the long-term
commitment of the staff towards the company, and to provide the
possibility to share in the value-creation of the company.
853,938 STARs were granted in 2008.
A variety of awards are being used to acknowledge and
reinforce the contributions of our employees. In 2008 these
mechanisms included management awards, spot awards, deal
attainment bonuses, SES ASTRA Awards and SES AMERICOM
President’s Award.
The Human Resources (HR) function
SES was supported at year end by a team of HR professionals
based across all SES companies. A Human Resources
Coordination Committee ensures that the HR strategy and
objectives are aligned within the group and with the business
objectives, decisions and guidance of SES’ Executive Committee.
Employee satisfaction is being periodically monitored by an
employee survey, internally called “Voice of the Employee”
(VoE). A strong focus is placed on employee communications
through a variety of instruments, such as employee meetings,
breakfast talks, and forums pertaining to specific topics. In 2008,
the company’s intranet was further developed across the group,
ensuring employees receive the most up-to-date and relevant
information according to location and entity within the group.
The intranet is the main vehicle for employee communications.
Additionally, the company’s vision and business strategy are
conveyed successfully to all employees to strengthen awareness
and engagement.
A learning organisation
Employee satisfaction is consistently monitored and measured
and we strive to make improvements based on employee
feedback. In line with its vision of being a continuous learning
organisation, SES continued, in 2008, to offer its employees a
wide range of training courses within the AMERICOM University
and the SES Training and Education Programme (STEP).
In 2008, core and functional competencies were introduced to
facilitate job and performance evaluation.
Building outstanding leadership talent
SES focuses on identifying and developing high-potential
leadership talent by means of succession planning. This includes
participation in executive assessments, executive development
programmes, coaching and stretch assignments. A talent
inventory and a global succession planning process for critical
positions was conducted in 2008.
Full-time equivalents
Includes SES Finance S.à r.l.
1
2
SES Annual Report 2008
39
Corporate governance
Continued
SES continued its implementation of a global ‘Developing
Tomorrow’s Leaders’ programme in 2008. The programme now
covers 66 top-level executives identified as high performers with
high potential. Two modules were completed in 2008.
SES has a “Global Development Programme” (GDP) which is used
for cross-functional and cross-continent talent and knowledge
exchange. Three employees participated in the programme in 2008.
A global “SES Associate Programme”, targeted at graduates, was
rolled out in 2008. The two-year programme currently covers six
associates participating in four six-month assignments.
Social dialogue within SES
In its dealings with their employees and associates, SES and
its operating entities rely upon best practices of social dialogue
and openness. These principles are applied at all levels of the
organisation and are rooted both in legal requirements and in
management culture.
At SES ASTRA and SES ENGINEERING, the legal framework
provides for a personnel delegation and a mixed committee,
whereas SES ASTRA TechCom also has a personnel delegation.
The personnel delegations of SES ASTRA and SES
ENGINEERING consist of five members each whereas SES
ASTRA TechCom has a personnel delegation composed of
two delegates. All delegates have been elected for a five-year
term. Their mandate consists in protecting the interests of
the workforce with regard to working conditions, job security
and social matters. The personnel delegation is informed on
the developments affecting the company and advises on
amendments to work rules.
The mixed committee consists of three employer representatives
and three employee representatives. The mixed committee
has co-decision powers in matters covering performance
assessment, health and safety and in the general criteria applied
in the recruitment, promotion and dismissal policies. The mixed
committee is consulted on all important decisions regarding
investments in plant or equipment, work processes and working
conditions. The committee is informed about the general
development of the company and employment trends.
In other SES companies, the social dialogue is conducted
according to the rules laid out in the local legal frameworks,
for instance by means of works councils in SES NEW SKIES,
APS and ND SatCom.
Investor Relations
SES has a dedicated Investor Relations function reporting to the
Chief Financial Officer and working closely with the President
and CEO. Its purpose is to develop and coordinate the group’s
external financial communications and interactions with equity
and debt investors, investment analysts, credit rating agencies,
financial journalists and other external audiences, to monitor
stock market developments and to provide feedback and
recommendations to the SES Executive Committee.
Our corporate social responsibility policy
In 2008, SES implemented corporate social responsibility (CSR)
projects and activities in those geographic areas where the SES
group either has commercial activities, provides communication
services or otherwise interacts with local communities.
Policy
Our CSR policy aims primarily at supporting educational projects,
and its focus reflects our position as a provider of global
communications infrastructure and services.
SES believes it has a responsibility to support the development
of a knowledge and communications-based society. Progress
in this area should help develop more resilient and flexible
economic structures, contribute to enhance social mobility and
development, and should also contribute to the emergence of
sustainable economic development models.
SES adheres to the “Corporate Social Responsibility Charter”,
signed jointly by a number of Luxembourg-based companies. This
charter commits its signatories to promote the principles of CSR
and to reflect and implement these in their everyday operations.
Actions
In 2008, SES continued its scholarship programme with the
International Space University (ISU) in Strasbourg, France,
supporting students of advanced studies of space applications.
In addition, SES initiated a multi-year support programme for an
executive space MBA with the International Institute of Space
Commerce (IISC) based in the Isle of Man. This programme
benefits students from the Isle of Man. The IISC is an off-shoot
of the ISU.
SES also continued to support the scholarship programme
of the “Society of Satellite Professionals International”
(SSPI), a U.S.-based non-profit association for the professional
development of satellite industry professionals worldwide.
SES donated computer hardware and software to the
Comprehensive School No.1 in Baikonur, Kazakhstan. The
company also supported the St. Gallen symposium, an academic
and networking opportunity for representatives of business,
politics, and students at the University of St. Gallen, Switzerland.
SES is a member of the International Astronautical Foundation,
a global organisation that promotes awareness of space
activities world-wide.
SES also continued to financially support the Institut St. Joseph
of Betzdorf, Luxembourg, a home for mentally handicapped
persons.
SES gave a financial contribution to Luxembourg’s “Business
Initiative 123-GO” aimed at advancing the development of
innovative business projects. SES is also a supporting member
of the IDATE Foundation, based in Montpellier, France, which
provides assistance in strategic decision-making to the telecom,
internet and media industries.
Investor Relations is responsible for the definition and execution
of SES’ active Investor Relations programme and participation in
investor conferences and similar events. Investor Relations also
works closely with the group’s General Counsel to ensure that
the group’s external communications comply with applicable
legal and regulatory requirements.
SES Annual Report 2008
40
In 2007, SES became a member of Luxembourg’s “Groupement
d’intérêt économique Shanghai 2010”. The mission of this
organisation is to implement Luxembourg’s representation at the
World Exhibition in Shanghai in 2010.
SES continued its financial support to “Musek am Syrdal”, a local
music festival in Luxembourg.
SES NEW SKIES supported the NEPAD e-Schools Demo project
by providing satellite capacity and teleport services. Together
with two other partners, iDirect and Intersat Africa, we have
committed to provide a total satellite solution to 35 schools.
The project aims at demonstrating the value of ICT to education
and encompasses 96 schools in 16 African countries. NEPAD
(The New Partnership for African Development) is a Pan-African
organisation sponsored by the African Union that aims to
combine public and private partners to address development
issues in Africa.
The U.S. offices of SES sponsored a number of science and
engineering programmes in public schools in the U.S. Out
of 12 applying schools, seven were awarded grants. These
grants funded a variety of activities ranging from robotics
clubs, in which SES employees helped students build robots,
to a “Project Lead the Way” for one school in Paterson, N.J.,
aiming to prepare students for a successful curriculum in
post-secondary engineering studies.
Grants were made available to public schools from Kindergarten
to twelfth grade; the grants are reviewed by a committee of
employees.
SES ASTRA contributed to the SatElections project for the
production and delivery of e-learning modules on effective
electoral assistance and electoral administration via satellite,
whose pilot operational phase was launched in November 2008
in Kinshasa, Democratic Republic of Congo. The SatElections
project is supported financially by the governments of Belgium,
Luxembourg and Italy, and is being developed by an industrial
consortium coordinated by the European Space Agency.
Caring for the environment
The SES companies are committed to respecting the world’s
natural environment, and to aligning the companies’ and the
staff’s conduct with the principles of sustainable development.
We apply the principle that all activities and services which we
provide to third-party customers, or which are supplied to us by
third-party vendors, should comply with the highest standards
of environmental protection.
Compliance is benchmarked against the legal rules and
regulations applied in the countries in which the SES companies
operate, as well as against industry-wide best practices.
Our objective is to continuously improve our environmental
performance and to further reduce the environmental impact
of our activities.
SES Annual Report 2008
The activities of SES and its operating companies are mainly
office and technology-based. In our operations, we promote the
most efficient use of energy and natural resources. We have
successfully implemented a programme to rely on cogeneration
power with renewable energy sources wherever possible.
We apply a waste recycling programme which aims to avoid,
reduce and recycle waste material as efficiently as possible;
this programme is subject to independent third-party audits and
quality control. We also conduct environmental training on a
regular basis and encourage our staff to adopt environmentally
correct attitudes in their professional activities.
The operating entities of SES apply best practices in minimising
the environmental impact of the outsourced activities, such as
the manufacturing and launching of spacecraft. The companies
also ensure that the amount of radiation emitted from their earth
stations respects or remains below the maximum levels defined
by the countries of operation; compliance is checked through
yearly internal and third-party audits by accredited organisations,
which are specialised in the field of industrial safety.
Responsibility statement
The Board of Directors and the executive management
of the company reaffirm their responsibility to ensure the
maintenance of proper accounting records disclosing the
financial position of the group with reasonable accuracy
at any time, and ensuring that an appropriate system of
internal controls is in place to ensure the group’s business
operations are carried on efficiently and transparently. In
accordance with Article 3 of the law of January 11, 2008 on
the harmonisation of transparency requirements in relation
to information about issuers whose securities are admitted
to trading on a regulated market, we declare that, to the best
of our knowledge, the consolidated financial statements for
the year ended December 31, 2008, prepared in accordance
with IFRS as adopted for use in the E.U. give a true and fair
view of the assets, liabilities, financial position and profit of
the year. In addition, the management report includes a fair
review of the development and performance of the group’s
operations during the year and of business risks, where
appropriate, facing the group.
René Steichen
Chairman of the
Board of Directors
41
Romain Bausch
President and CEO
Financial review by management
All amounts are in millions of euro unless stated otherwise
Summary financial information
Variance
Variance %
Revenue
1,630.3
1,610.7
19.6
Operating expenses1
(530.3)
(520.4)
–9.9
1,100.0
1,090.3
9.7
EBITDA
(426.2)
(435.7)
9.5
Depreciation expense
(48.7)
(41.5)
–7.2
Amortisation expense
625.1
613.1
12.0
Operating profit
(148.6)
(130.0)
–18.6
Net financing charges
476.5
483.1
–6.6
Profit before tax
(87.4)
(78.3)
–9.1
Income tax expense
(0.6)
0.3
–0.9
Share of associates’ result
(1.0)
(1.1)
0.1
Minority interests
387.5
404.0
–16.5
Net profit
0.98
0.91
0.07
Earnings per Class A share (in euro)
67.5%
67.7%
–0.2% pts.
EBITDA margin
23.8%
25.1%
–1.3% pts.
Net income margin
1,037.1
1,192.7
–155.6
Net operating cash flow
437.2
672.8
–235.6
Free cash flow
3,475.8
3,217.9
257.9
Net debt
3.16
2.95
0.21
Net debt/EBITDA
222.6%
199.7%
22.9% pts
Net debt/Total equity
1.2%
–1.9%
0.9%
2.2%
–17.3%
2.0%
–14.3%
–1.4%
–11.6%
–
9.1%
–4.1%
2008
2007
7.7%
–
–
–13.0%
–35.0%
8.0%
7.1%
–
Operating profit development
Revenue rose in the fourth quarter on the back of a strengthening U.S. dollar and increased service revenues. Non-recurring charges
of EUR 19.2 million on the operating expenses line and of EUR 30.7 million on the depreciation line impacted the quarter’s operating
profit performance. Details of these charges are given in the relevant sections below.
2008
Revenue
Operating expenses1
EBITDA
Depreciation
Amortisation
Operating profit
1
Q1
390.9
(115.7)
275.2
(99.7)
(10.1)
165.4
Q2
397.6
(122.6)
275.0
(95.2)
(15.7)
164.1
Including EUR 0.8 million net impact in 2008 of AMC-14 programme termination.
SES Annual Report 2008
42
Q3
406.4
(123.7)
282.7
(94.5)
(9.9)
178.3
Q4
435.4
(168.3)
267.1
(136.8)
(13.0)
117.3
YTD
1,630.3
(530.3)
1,100.0
(426.2)
(48.7)
625.1
Revenue
2008
2007
Variance
%
Revenue
1,630.3
1,610.7
19.6
1.2%
The group reported a modest growth in reported revenues for the year, since the positive underlying development in recurring
revenue was substantially offset by the on average weaker dollar prevailing in 2008 compared to the previous year. On a constant
exchange rate basis, recurring revenue rose 6% as set out in the chart below.
+6.0%
1,611
Actual 2007
1,528
(14)
(49)
(20)
Non-recurring
Constant FX
Scope change
Actual 2007
recurring
+1.2%
as reported
92
1,620
10
1,630
Recurring
growth
Actual 2008
recurring
Non-recurring
Actual 2008
The recurring growth of 6% was driven by increased demand within the infrastructure segment and supported by continued double
digit growth in services.
Operating expenses and EBITDA
2007
2008
Operating expenses1
EBITDA
(520.4)
1,090.3
(530.3)
1,100.0
Variance
%
–9.9
9.7
–1.9%
0.9%
Including EUR 0.8 million net impact in 2008 of the AMC-14 programme termination.
1
Operating expenses for the year showed a small rise in the period despite the favourable impact of the weaker U.S. dollar noted
above. The increase is attributable to the growing proportion of revenue coming from services, which rose from 19.8% to 22.5%
in 2008, but more particularly to non-recurring charges of EUR 19.2 million taken in the fourth quarter in relation to the termination
of the IP-PRIME business, and the integration of the SES AMERICOM and SES NEW SKIES segments which came into effect on
January 1, 2009.
Operating expenses also include the EUR 0.8 million net impact of the AMC-14 programme termination.
On a constant exchange rate basis recurring EBITDA rose by 4.8% as set out in the chart below.
+0.9%
as reported
+4.8%
1,090
35
1,084
(34)
1,136
71.0%
Non-recurring
Constant FX
Scope change
1,100
(36)
(7)
EBITDA
margin
67.7%
Actual 2007
52
Actual 2007
recurring
70.1%
Recurring
growth
Actual 2008
recurring
67.5%
Non-recurring
Actual 2008
Reflecting mainly the non-recurring charges outlined above, the overall reported EBITDA margin dipped slightly from 67.7% on 2007
to 67.5% in 2008. Excluding one-off items, the margin was 70.1%.
SES Annual Report 2008
43
Financial review by management
All amounts are in millions of euro unless stated otherwise
Infrastructure
Services
Start-up initiatives
Elim./ unallocated
2008
Revenue
1,371.7
362.5
3.9
(107.8)
EBITDA
1,107.9
42.1
(23.7)
(26.3)
EBITDA margin
80.8%
11.6%
–
–
2007
Revenue
1,378.2
314.1
6.1
(87.7)
EBITDA
1,123.4
36.5
(35.1)
(34.5)
EBITDA margin
81.5%
11.6%
–
–
Total
1,630.3
1,100.0
67.5%
1,610.7
1,090.3
67.7%
Depreciation, amortisation and operating profit
Depreciation expense
Amortisation expense
Operating profit
2008
(426.2)
(48.7)
625.1
2007
(435.7)
(41.5)
613.1
Variance
%
9.5
–7.2
12.0
2.2%
–17.3%
2.0%
The charge for depreciation in 2008 fell in comparison to 2007. The impact of the weaker U.S. dollar on SES AMERICOM and
SES NEW SKIES depreciation charges, and the prior year charge of EUR 15.9 million in connection with the NSS-8 launch failure,
more than offset changes in the depreciable fleet and the two non-recurring depreciation charges taken in the fourth quarter
described below.
i.Accelerated depreciation on the ASTRA 5A satellite: in the light of the anomaly experienced by the satellite in October 2008,
management performed a specific impairment test on the carrying value of EUR 10.5 million. As a result of this impairment test
the carrying value was fully impaired.
ii.Termination of IP-PRIME: In connection with the termination of the IP-PRIME business, an accelerated depreciation charge of
EUR 20.2 million was taken on dedicated assets used to provide this service.
The relevant changes in the depreciable fleet were:
i.the sale of the AMC-23 satellite to GE in March 2007;
ii.the beginning of the depreciation cycle of: AMC-18 (February 2007); ASTRA 1L (July 2007); SIRIUS 4 (December 2007) and
AMC-21 (October 2008);
iii.the termination of the depreciation cycle on ASTRA 5A (December 2008).
Operating profit rose to EUR 625.1 million, 2% above the previous year. Before the restructuring costs and accelerated depreciation
charges of EUR 49.9 million, operating profit was EUR 675.0 million.
Net financing charges
Net interest expense
Capitalised interest
Net foreign exchange gains
Gains on disposals
Net financing charges
2008
(196.7)
48.7
(0.6)
–
(148.6)
2007
(181.7)
27.7
21.3
2.7
(130.0)
Variance
%
–15.0
21.0
–21.9
–2.7
–18.6
–8.3%
75.8%
–
–100
–14.3%
Net financing charges rose by 14.3% year-on-year, driven by the absence of net foreign exchange gains and disposal proceeds.
Whilst the net interest expense increased 8.3% reflecting the higher level of net debt during 2008, this increase was more than
offset by the higher capitalisation of interest due to the intense ongoing satellite procurement programme. The average cost of group
borrowings increased very slightly to 5.05% (2007: 4.90%).
Income tax expense
2008
2007
Income tax expense
(87.4)
(78.3)
Variance
%
–9.1
–11.6%
The tax charge for the year stood at EUR 87.4 million, representing a reported tax rate of 18.3% compared to 16.2% for 2007.
SES Annual Report 2008
44
Net profit
2008
2007
Variance
%
Net profit of the group
Earnings per share (euro)
387.5
0.98
404.0
0.91
–16.5
0.07
–4.1%
7.7%
Net profit attributable to equity holders of the parent was lower than in 2007, mainly reflecting the impact of the higher net interest
charges and taxation. Earnings per share however, at EUR 0.98, showed a 7.7% increase compared to prior year levels reflecting the
favourable impact of the shares acquired and cancelled during 2007 and 2008.
Cash flow
2008
2007
Variance
%
Net operating cash flow
Free cash flow
1,037.1
437.2
1,192.7
672.8
–155.6
–235.6
–13.1%
–35.1%
Net operating cash flow of EUR 1,037.1 million for 2008 represented an EBITDA conversion rate of 94.2%. Free cash flow, defined
as net operating cash flow less cash applied to investing activities, stood at EUR 437.2 million for the year, compared to EUR 672.8
million in 2007, reflecting exceptional operational inflows in the prior year. The cash expended for investment in property plant and
equipment rose from EUR 638.0 million in 2007 to EUR 741.0 million in 2008.
Net debt
Cash and cash equivalents
Loans and borrowings
Net debt
Net debt/EBITDA
2008
(435.5)
3,911.3
3,475.8
3.16
2007
(197.1)
3,415.0
3,217.9
2.95
Variance
238.4
–496.3
257.9
0.21
%
121%
–14.5%
8.0%
7.1%
The average level of net debt rose during 2008 as a result of both the high level of satellite procurement activities, and share buyback activities in the first half of the year.
Contract backlog
2008
2007
Variance
%
Fully protected contract backlog
5,850.0
5,846.4
3.6
–
Backlog remains at a consistent level year-on-year with new business and renewals fully offsetting existing backlog recognised as
revenue during the period.
Transponder utilisation at end of period
Transponder numbers (physical)
Q3
Q4
SES ASTRA Utilised
244
252
254
SES ASTRA Available
291
317
317
SES ASTRA %
83.8%
79.5%
80.1%
SES AMERICOM Utilised
332
334
329
SES AMERICOM Available
429
429
423
SES AMERICOM %
77.4%
77.9%
77.7%
SES NEW SKIES Utilised 227
234
238
SES NEW SKIES Available 318
318
318
SES NEW SKIES % 71.4%
73.6%
74.8%
SES group Utilised
803
820
821
SES group Available
1,038
1,064
1,058
SES group %
77.3%
77.1%
77.6%
264
317
83.3%
SES Annual Report 2008
Q1
45
Q2
348
447
77.8%
243
318
76.4%
855
1,082
79.0%
Consolidated financial statements
Report of the independent auditor
To the shareholders of
SES Société Anonyme
Betzdorf
Report on the consolidated financial statements
Following our appointment by the Annual General Meeting
of the Shareholders dated April 3, 2008, we have audited the
accompanying consolidated financial statements of SES, which
comprise the consolidated balance sheet as at December 31,
2008 and the consolidated income statement, consolidated
statement of changes in equity and consolidated cash flow
statement for the year then ended, and a summary of significant
accounting policies and other explanatory notes.
Board of Directors’ responsibility for the consolidated
financial statements
The Board of Directors is responsible for the preparation and
fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards
as adopted by the EU. This responsibility includes: designing,
implementing and maintaining internal control relevant to the
preparation and fair presentation of consolidated financial
statements that are free from material misstatement, whether
due to fraud or error, selecting and applying appropriate
accounting policies, and making accounting estimates that are
reasonable in the circumstances.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true
and fair view of the financial position of SES as at December
31, 2008, and of the consolidated results of its operations for
the year then ended in accordance with International Financial
Reporting Standards as adopted by the EU.
Report on other legal and regulatory requirements
The consolidated management report, which is the responsibility
of the Board of Directors, is in accordance with the consolidated
financial statements.
Ernst & Young
Société Anonyme
Réviseur d’Entreprises
Thierry BERTRAND
February 12, 2009
Responsibility of the ‘réviseur d’entreprises’
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our
audit in accordance with International Standards on Auditing
as adopted by the ‘Institut des Réviseurs d’Entreprises’. Those
standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance
whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the judgement
of the ‘réviseur d’entreprises’, including the assessment of the
risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk
assessments, the ‘réviseur d’entreprises’ considers internal
control relevant to the entity’s preparation and fair presentation
of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Board of
Directors, as well as evaluating the overall presentation of the
consolidated financial statements.
SES Annual Report 2008
46
Consolidated income statement
For the year ended December 31, 2008
Note
2008
EUR million
2007
EUR million
6
1,630.3
1,610.7
Revenue
Cost of sales
Staff costs
Other operating expenses AMC-14 programme termination income
AMC-14 programme termination charge
AMC-14 net termination impact
8
8
8
21
21
21
(178.2)
(184.8)
(168.1)
(164.9)
(187.9)
(167.6)
130.3
(129.5)
0.8
–
–
–
8,13
(426.2)
Depreciation expense 15
(48.7)
Amortisation expense
Operating profit 6
625.1
9
45.6
Finance revenue
9
(194.2)
Finance costs
Profit before tax
476.5
10
(87.4)
Income tax expense
Profit after tax
389.1
(0.6)
Share of associates’ result
Profit for the year
388.5
Attributable to:
387.5
Equity holders of the parent
1.0
Minority interests
388.5
Earnings per share (in euro)1
0.98
Class A shares 0.39
Class B shares (435.7)
(41.5)
613.1
51.7
(181.7)
483.1
(78.3)
404.8
0.3
405.1
404.0
1.1
405.1
0.91
0.37
Earnings per share are calculated by dividing the net profit attributable to ordinary shareholders for the period by the weighted average number of shares outstanding
during the year as adjusted to reflect the economic rights of each class of share. Fully diluted earnings per share are insignificantly different from basic earnings per share.
1
The notes are an integral part of the consolidated financial statements.
SES Annual Report 2008
47
Consolidated financial statements
Consolidated balance sheet
As at December 31, 2008
Note
Non-current assets
13
Property, plant and equipment
14
Assets in the course of construction
Total property, plant and equipment
15
Intangible assets
16
Investments in associates
17
Other financial assets
10
Deferred income tax assets
Total non-current assets
Current assets
Inventories
18
Trade and other receivables
Prepayments
19
Valuation of financial derivatives
22
Cash and cash equivalents
Total current assets
Total assets
Equity
23
Attributable to equity holders of the parent
Minority interest
Total equity
Non-current liabilities
25
Interest-bearing loans and borrowings
26
Provisions and deferred income
19
Valuation of financial derivatives
10
Deferred tax liabilities
Total non-current liabilities
Current liabilities
25
Interest-bearing loans and borrowings
27
Trade and other payables
19
Valuation of financial derivatives
2
Income tax liabilities
Deferred income
Total current liabilities
Total liabilities
Total liabilities and equity
The notes are an integral part of the consolidated financial statements.
SES Annual Report 2008
48
2008
EUR million
2007
EUR million
2,552.8
1,243.2
3,796.0
2,723.6
765.4
3,489.0
2,882.1
3.2
13.5
18.9
6,713.7
2,774.8
1.6
15.6
20.6
6,301.6
17.6
334.8
25.9
–
435.5
813.8
15.6
289.6
25.2
20.6
197.1
548.1
7,527.5
6,849.7
1,553.1
8.2
1,561.3
1,578.2
33.6
1,611.8
3,476.0
344.4
27.8
755.2
4,603.4
2,766.0
335.2
–
779.7
3,880.9
435.3
460.5
39.8
198.3
228.9
1,362.8
649.0
284.9
15.8
188.5
218.8
1,357.0
5,966.2
7,527.5
5,237.9
6,849.7
Consolidated statement of cash flow
For the year ended December 31, 2008
Note
2008
EUR million
2007
EUR million
Profit before taxes
Taxes paid during the year
Net financing charges paid on non-operating activities
Depreciation and amortisation
Amortisation of client upfront payments
Other non-cash items in consolidated income statement
Consolidated operating profit before working capital changes
476.5
(70.6)
84.3
474.9
(32.2)
(9.5)
923.4
483.1
(36.8)
75.1
477.2
(27.7)
25.1
996.0
Changes in operating assets and liabilities
(Increase)/decrease in inventories
(Increase)/decrease in trade and other debtors
(Increase)/decrease in prepayments and deferred charges
Increase/(decrease) in trade and other creditors
Increase/(decrease) in payments received on account
Increase/(decrease) in upfront payments and deferred income
Net cash generated by operations
(2.1)
(46.4)
5.2
58.4
28.9
69.7
113.7
8.1
(0.4)
0.5
(3.8)
17.7
174.6
196.7
Net operating cash flow
1,037.1
1,192.7
Cash flow from investing activities
Purchase (net) of intangible assets
Purchase of tangible assets
Disposal of tangible assets
Proceeds arising on termination of AMC14 programme
4
Disposal of subsidiaries sold in GE transaction, net of cash Acquisition of minority interest in consolidated investments
Acquisition of other consolidated investments, net of cash acquired
Realised proceeds on settlement of swap transactions
Investment in non-consolidated financial assets
Net cash absorbed by investing activities
(10.7)
(741.0)
7.2
97.6
–
(22.4)
(1.8)
73.9
(2.7)
(599.9)
(20.6)
(638.0)
9.7
–
(69.6)
–
(3.4)
205.7
(3.7)
(519.9)
Cash flow from financing activities
Net increase in borrowings
Dividends paid on ordinary shares, net of dividends received
Net financing paid on non-operating activities
4
Treasury shares acquired in GE transaction
Net investment in other treasury shares
Exercise of share-based payments
Dividends from equity investments
Other financing activities
Net cash absorbed by financing activities
449.4
(238.9)
(84.3)
–
(330.1)
(1.4)
–
–
(205.3)
161.9
(184.5)
(75.1)
(638.8)
(145.3)
–
10.2
0.7
(870.9)
Net foreign exchange movements
Net increase/(decrease) in cash
Net cash at beginning of the year
Net cash at end of the year
6.5
238.4
197.1
435.5
1.8
(196.3)
393.4
197.1
The notes are an integral part of the consolidated financial statements.
SES Annual Report 2008
49
Consolidated financial statements
Consolidated statement of changes in shareholders’ equity
For the year ended December 31, 2008
Issued
Share
Treasury
Retained
Other
capital
premium
shares
earnings
reserves
EUR million
EUR million
EUR million
EUR million
EUR million
At January 1, 2007
827.9
2,171.6
Result for the year
–
Impact of currency
translation
–
Net gain on hedge of
net investment
–
Net loss on cash
flow hedges
–
Total income and expense
for the year
–
Allocation of 2006 results
–
Dividends paid1
–
Movement on
treasury shares
–
Share-based payment
adjustment
–
Acquisition of GE shares2
–
Cancellation of GE shares2 (161.1)
Impact of disposal
of GE split off assets
–
At December 31, 2007
666.8
–
(82.5)
438.8
555.1
–
404.0
–
–
–
–
–
–
–
3,045.1
–
404.0
1.1
405.1
–
(358.0)
(358.0)
(0.4)
(358.4)
–
–
269.7
269.7
–
269.7
–
–
–
(5.7)
(5.7)
–
(5.7)
–
–
–
–
–
–
404.0
(254.3)
(184.5)
–
254.3
–
(94.0)
–
–
310.0
–
(184.5)
0.7
–
–
310.7
–
(184.5)
–
(131.2)
–
–
–
(131.2)
–
(131.2)
6.8
–
(1,312.9)
–
(1,474.0)
1,474.0
–
–
–
–
–
–
–
–
–
6.8
(1,474.0)
–
–
–
–
6.8
(1,474.0)
–
–
865.5
–
(213.7)
–
404.0
(59.6)
749.8
38.9
1,578.2
–
33.6
38.9
1,611.8
Foreign
currency
translation
Total
EUR million
EUR million
Minority
interest
EUR million
865.5
Result for the year
–
Impact of currency
translation
–
Net gain on hedge of
net investment
–
Net loss on cash
flow hedges
–
Total income and expense
for the year
–
Allocation of 2007 results
–
Dividends paid1
–
Acquired from minority
interest
–
Movements on
treasury shares
–
Cancellation of
treasury shares
(42.4)
Share-based payment
adjustment
–
At December 31, 2008
624.4
–
1
2
(213.7)
404.0
749.8
–
387.5
–
–
–
–
–
–
–
98.5
(894.2)
33.6
1,611.8
–
387.5
1.0
388.5
–
177.0
177.0
(0.8)
176.2
–
–
47.5
47.5
–
47.5
–
–
–
(75.8)
(75.8)
–
(75.8)
–
–
–
–
–
–
387.5
(165.1)
(238.9)
–
165.1
–
148.7
–
–
536.2
–
(238.9)
0.2
–
–
536.4
–
(238.9)
–
–
–
3.1
–
3.1
(25.6)
(22.5)
–
(330.1)
–
–
–
(330.1)
–
(330.1)
(394.4)
436.8
–
–
–
–
–
–
6.0
477.1
(1.4)
(108.4)
–
387.5
–
918.0
4.6
1,553.1
–
8.2
4.6
1,561.3
The notes are an integral part of the consolidated financial statements.
50
(894.2)
Total
equity
EUR million
1,578.2
Dividends are shown net of dividends received on treasury shares.
Shares acquired and cancelled in the framework of the GE split-off transaction.
SES Annual Report 2008
Total
equity
EUR million
32.9
666.8
(898.7)
Minority
interest
EUR million
3,012.2
Issued
Share
Treasury
Retained
Other
capital
premium
shares
earnings
reserves
EUR million
EUR million
EUR million
EUR million
EUR million
At January 1, 2008
Foreign
currency
translation
Total
EUR million
EUR million
–
(745.5)
Notes to the consolidated financial statements
December 31, 2008
Note 1 – Corporate information
SES (‘the company’) was incorporated on March 16, 2001 as a
limited liability company (Société Anonyme) under Luxembourg
law. References to the ‘group’ in the following notes are to the
company and its subsidiaries, joint ventures and associates. SES
trades under ‘SESG’ on the Luxembourg Stock Exchange and
Euronext, Paris.
The consolidated financial statements of SES for the year ended
December 31, 2008 were authorised for issue in accordance
with a resolution of the Directors on February 12, 2009. Under
Luxembourg law the financial statements are approved by the
shareholders at the annual general meeting.
Note 2 – Summary of significant accounting policies
Basis of preparation
The consolidated financial statements have been prepared on a
historical cost basis, except where fair value is required by IFRS
as described below. The carrying values of recognised assets
and liabilities that are hedged items in fair value hedges, and are
otherwise carried at cost, are adjusted to record changes in the
fair values attributable to the risks that are being hedged.
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(‘IFRS’) adopted by the International Accounting Standards
Board, and endorsed by the European Union, as at the balance
sheet date.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of the company and its controlled subsidiaries,
after the elimination of all material inter-company transactions.
Subsidiaries are consolidated from the date the company
obtains control until such time as control ceases. Acquisitions
of subsidiaries are accounted for using the purchase method of
accounting. The financial statements of subsidiaries and affiliates
are prepared for the same reporting period as the company,
using consistent accounting policies. Adjustments are made to
bring into line any dissimilar accounting policies that may exist.
For details regarding the subsidiaries included see Note 3.
Application of IFRS 1
The group adopted IFRS on January 1, 2004 and applied the
provisions of IFRS 1 for this transition. In particular, goodwill
arising on business combinations (IFRS 3) that occurred before
January 1, 2004 has not been restated. In accordance with IFRS 1,
the group has elected not to apply IAS 21 (as revised in 2003)
retrospectively to fair value adjustments and goodwill arising in
business combinations that occurred before January 1, 2004.
Changes in accounting policies
The accounting policies adopted are consistent with those
of the previous financial year except for the adoption of the
following two new and amended IFRS and IFRIC interpretations
as of January 1, 2008:
Adoption of these standards and interpretations did not have any
effect on the financial performance of the group.
Interests in joint ventures
The group has interests in joint ventures which are jointly
controlled entities. A joint venture is a contractual arrangement
whereby two or more parties undertake an economic activity
that is subject to joint control, and a jointly controlled entity is a
joint venture that involves the establishment of a separate entity
in which each venturer has an interest. The group recognises
its interest in the joint venture using proportional consolidation.
The group combines its share of each of the assets, liabilities,
income and expenses of the joint venture with the similar
items, line by line, in its consolidated financial statements. The
financial statements of the joint venture are prepared for the
same reporting year as the parent company, using consistent
accounting policies. Adjustments are made to bring into line
any dissimilar accounting policies that may exist.
When the group contributes or sells assets to the joint venture,
any portion of gain or loss from the transaction is recognised
based on the substance of the transaction. When the group
purchases assets from the joint venture, the group does not
recognise its share of the profits of the joint venture from the
transaction until it resells the assets to an independent party.
The joint venture is proportionately consolidated until the
date on which the group ceases to have joint control over the
joint venture.
Investments in associates
The group has investments in associates which are accounted
for under the equity method. An associate is an entity in which
the group has significant influence and which is neither a
subsidiary nor a joint venture.
Under the equity method, the investment in the associate is
carried in the balance sheet at cost plus post-acquisition changes
in the group’s share of net assets of the associate. Goodwill
relating to an associate is included in the carrying amount of
the investment and is not amortised. After application of the
equity method, the group determines whether it is necessary
to recognise any additional impairment loss with respect to the
group’s net investment in the associate. The income statement
reflects the share of the results of operations of the associate.
Where there has been a change recognised directly in the equity
of the associate, the group recognises its share of any changes
and discloses this, when applicable, in the statement of changes
in equity.
In general the financial statements of associates are prepared for
the same reporting year as the parent company, using consistent
accounting policies. Adjustments are made to bring in line any
dissimilar accounting policies that may exist. Where differences
arise in the reporting dates, the group adjusts the financial
information of the associate for significant transactions in the
intervening period.
– IFRIC 11 IFRS 2 – “Group and Treasury Share Transactions”;
– IFRIC 12 – Service Concession Arrangements; and
– IFRIC 14/IAS 19 – “The limit on a defined benefit asset
minimum funding requirements and their interaction”;
– IAS 39 and IFRS 7: “reclassification of financial assets”.
SES Annual Report 2008
51
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Significant accounting judgements and estimates
1) Judgements
In the process of applying the group’s accounting policies,
management has made the following judgements, apart from
those involving estimations, which have the most significant
effect on the amounts recognised in the financial statements:
1.1 Treatment of orbital slot licence rights
The group’s operating companies have obtained rights to operate
satellites at certain orbital locations and using certain frequency
bands. These licences are obtained through application to the
relevant national and international regulatory authorities, and
are generally made available for a defined period. On the expiry
of such agreements, the operating company will generally be
in a position to re-apply for the usage of these positions and
frequency rights. Where the group has obtained such rights
through the acquisition of subsidiaries and associates, the rights
have been identified as an asset acquired and recorded at the
fair value attributed to the asset at the time of the acquisition
as a result of purchase accounting procedure. Such assets
are deemed to have an indefinite life where the group has a
high probability that it will be able to successfully re-apply for
these rights as and when they expire. Hence these assets are
not amortised, but rather are subject to regular impairment
reviews to confirm that the carrying value in the group’s financial
statements is still appropriate.
1.2 Taxation
The group operates in numerous tax jurisdictions and
management is required to assess tax issues and exposures
across its entire operations and to accrue for potential liabilities
based on its interpretation of country-specific tax law and best
estimates. In conducting this review management assesses the
materiality of the issue and the likelihood, based on experience
and specialist advice, as to whether it will result in a liability for
the group. If this is deemed to be the case then a provision is
made for the potential taxation charge arising. These provisions
are all recorded as current liabilities in the consolidated balance
sheet. As at December 31, 2008 an amount of EUR 107.1 million
(2007: EUR 30.5 million) is disclosed under “Income tax liabilities”.
One significant area of management judgement is in the area of
transfer pricing. Whilst the group employs dedicated members
of staff to establish and maintain appropriate transfer pricing
structures and documentation, judgement still needs to be
applied and hence potential tax exposures can be identified. The
group, as part of its overall assessment of liabilities for taxation,
reviews in detail the transfer pricing structures in place and
makes provisions where this seems appropriate on a case by
case basis. 2) Estimation uncertainty
The key assumptions concerning the future and other key
sources of estimation uncertainty at the balance sheet date that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial
year are discussed below.
2.1 Impairment of goodwill
The group determines whether goodwill is impaired at least on
an annual basis. This requires an estimation of the value in use
of the cash-generating units to which the goodwill is allocated.
Estimating the value in use requires the group to make an
estimate of the expected future cash flows from the cashgenerating unit and also to choose a suitable discount rate in
order to calculate the present value of those cash flows. More
details are given in Note 15.
SES Annual Report 2008
Business combinations
In the event of a business combination, the group initially
measures the identifiable assets, liabilities and contingent
liabilities acquired at their fair value as at the acquisition date.
Any minority interest in the acquiree is accordingly stated at their
proportion of the net fair values of the acquired assets, liabilities
and contingent liabilities. In the event of the acquisition of an
additional interest in a subsidiary, any resultant goodwill arising
on the increase in ownership is recognised directly in equity.
Property, plant and equipment
Property, plant and equipment is initially recorded at acquisition
or manufacturing cost and is depreciated over the expected
useful economic life. The manufacturing cost of internally
generated property, plant and equipment includes directly
attributable costs as well as appropriate overheads. Costs
for the repair and maintenance of these assets are recorded
as expense. Relevant finance charges arising during the
construction period of satellites are capitalised.
Property, plant and equipment are depreciated using the straightline method, generally based on the following useful lives:
Buildings
Space segment assets
Ground segment assets
Other fixtures, fittings, tools and equipment
25 years
10 to 16 years
3 to 15 years
3 to 15 years
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from
its use or disposal. Any loss or gain arising on derecognition of
the asset is included in the profit and loss account in the year the
asset is derecognised.
The asset’s residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate, at each
financial year end.
Assets in the course of construction
Amounts payable in respect of the purchase of future satellites,
launch costs and other related expenses including ground
segment expenditure and financing costs are included in the
balance sheet when billed. When the asset is subsequently put
into service, the expenditure is transferred to assets in use and
depreciation commences.
Intangible assets
1) Goodwill
Goodwill represents the difference between the cost of
acquisition of shares in a consolidated company and the group’s
share in the fair value of the net assets acquired. The carrying
value of acquisition goodwill is reviewed for impairment annually,
or more frequently if required to establish whether the value is
still recoverable. The recoverable amount is defined as the higher
of fair value less costs to sell and value in use. Impairment
charges are taken as charges against net profit where a nonrecoverable component is identified. Impairment losses relating
to goodwill cannot be reversed in future periods. The group
estimates value in use on the basis of the estimated discounted
cash flows to be generated by a cash-generating unit which are
based upon business plans approved by management. Beyond
a five-year period, cash flows may be estimated on the basis
of stable rates of growth or decline. Goodwill is stated in the
balance sheet at cost less any impairment charges recorded.
52
Where goodwill forms part of a cash-generating unit and part
of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the
carrying amount of the operation when determining the gain or
loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative values of the
operation disposed of and the portion of the cash-generating
unit retained.
2) Other intangibles
Intangible assets, consisting principally of rights of usage
of orbital frequencies and acquired transponder service
agreements, are reviewed at acquisition to establish whether
they represent assets with a definite or indefinite life. Those
assessed as being definite life assets are amortised on a
straight-line basis over a period not exceeding 21 years.
Indefinite life intangible assets are held at cost in the balance
sheet but are subject to impairment testing in line with the
treatment outlined for goodwill above. The useful life of an
intangible asset with an indefinite life is reviewed annually to
determine whether indefinite life assessment continues to be
supportable. If not, the change in the useful life assessment
from indefinite to finite is made on a prospective basis.
Impairment of non-financial assets
The group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the group makes an estimate of the recoverable amount.
The group’s long-lived assets and definite-life intangible assets,
including its in-service satellite fleet, are reviewed for impairment
whenever events or changes in circumstances indicate that
the carrying amount of such assets may not be recoverable.
Impairments can arise from complete or partial failure of a
satellite as well as other changes in expected discounted future
cash flows. Such impairment tests are based on a comparison of
estimated discounted future cash flows to the recorded value of
the asset. The estimated discounted cash flows are based on the
most recent business plans. If impairment is indicated, the asset
value will be written down to fair value based upon discounted
cash flows using an appropriate discount rate.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised
as part of the cost of that asset. All other borrowing costs
are recognised as an expense in the period in which they
are incurred.
Investments and other financial assets
Financial assets in the scope of IAS 39 are classified as one
of: financial assets at fair value through profit or loss; loans
and receivables; held-to-maturity investments; or available-forsale financial assets; as appropriate. When financial assets are
recognised initially, they are measured at fair value, plus, in
the case of investments not at fair value through profit or loss,
directly attributable transaction costs. The group determines the
classification of its financial assets after initial recognition and,
where allowed and appropriate, re-evaluates this designation at
each financial year end.
SES Annual Report 2008
All regular purchases and sales of financial assets are recognised
on the trade date i.e. the date that the group is committed to the
purchase or sale of the asset.
The following categories of financial asset as defined in IAS 39
are relevant in the group’s financial statements.
1) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included
in the category ‘financial assets at fair value through profit
or loss’. Financial assets are classified as held for trading if
they are acquired for the purpose of selling in the near term.
Derivatives are also classified as held for trading unless they are
designated and effective hedging instruments. Gains or losses
on investments held for trading are recognised in income.
2) Held-to maturity investments
Non-derivative financial assets with fixed or determinable
payments and fixed maturity are classified as held-to-maturity
when the group has the positive intent and ability to hold to
maturity. Investments intended to be held for an undefined
period are not included in this classification. Other long-term
investments that are intended to be held-to-maturity, such as
bonds, are subsequently measured at amortised cost. This cost
is computed as the amount initially recognised minus principal
repayments, plus or minus the cumulative amortisation using the
effective interest method of any difference between the initially
recognised amount and the maturity amount. This calculation
includes all fees and points paid or received between parties
to the contract that are an integral part of the effective interest
rate, transaction costs and all other premiums and discounts.
For investments carried at amortised cost, gains and losses are
recognised in income when the investments are derecognised or
impaired, as well as through the amortisation process.
3) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. Such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in
income when the loans and receivables are derecognised or
impaired, as well as through the amortisation process.
4) Available-for-sale financial assets
Available-for-sale financial assets are those non-derivative
financial assets that are designated as available-for-sale or are not
classified in any of the three preceding categories. After initial
recognition available-for-sale financial assets are measured at
fair value with gains and losses being recognised as a separate
component of equity until the investment is derecognised or
until the investment is determined to be impaired at which
time the cumulative gain or loss previously reported in equity is
included in the income statement totally or partially.
The fair value of investments that are actively traded in organised
financial markets is determined by reference to quoted market
bid prices at the close of business on the balance sheet date.
For investments where there is no active market, fair value
is determined using valuation techniques. Such techniques
include using recent arm’s length market transactions; reference
to the current market value of another instrument, which is
substantially the same; discounted cash flow analysis and option
pricing models.
53
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Inventories
Inventories primarily consist of work-in-progress, related
accessories and network equipment spares and are stated at
the lower of cost or market value, with cost determined on an
average-cost method and market value based on the estimated
net realisable value.
Current taxes
Current tax assets and liabilities for the current and prior periods
are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
Trade and other receivables
Trade receivables are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts.
Provision is made when there is objective evidence that the
group will not be able to collect the debts. Bad debts are written
off when identified.
Deferred taxes
Deferred income tax is provided using the liability method on
temporary differences at the balance sheet date between the
tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Treasury shares
Acquired own equity instruments (treasury shares) are deducted
from equity. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the group’s own
equity instruments.
Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and on
hand, deposits and short-term, highly liquid investments
readily convertible to known amounts of cash and subject to
insignificant risk of changes in value. Cash on hand and in banks
and short-term deposits which are held to maturity are carried
at cost. For the purposes of the consolidated statement of cash
flow, “net cash” consists of cash and cash equivalents, net of
outstanding bank overdrafts.
Revenue recognition
The group enters into contracts to provide high-quality satellite
transponder capacity and broadcasting services through
which television, radio and data broadcasting make available
programming services to the general public. Revenue is
generated primarily from service agreements with customers to
provide satellite transponder services.
All amounts received from customers under contracts for
satellite capacity are recognised, at the fair value of the
consideration received or receivable, over the duration of the
respective contracts on a straight-line basis. Payments received
in advance are deferred and included in the balance sheet as
deferred income. Interest is accrued on advance payments
received using the incremental borrowing rate of the group
at the time the advance payments are received. Payments of
receivables in arrears are accrued and included in trade debtors.
The group also has a number of long-term construction
contracts. Revenue is recognised on these contracts by
reference to the stage of completion of the contract where the
outcome can be estimated reliably.
Dividends
The company declares dividends after the financial statements
for the year have been approved. Accordingly dividends are
recorded in the subsequent year’s financial statements.
Provisions
Provisions are recognised when the group has a present
obligation as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.
SES Annual Report 2008
Deferred tax liabilities are recognised for all taxable temporary
differences, except:
– where the deferred tax liability arises from the initial
recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; and
– in respect of taxable temporary differences associated with
investments in subsidiaries where the timing of the reversal
of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the
foreseeable future.
Deferred income tax assets are recognised for all deductible
temporary differences, carry-forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry-forward of unused tax credits and
unused tax losses can be utilised except:
– where the deferred income tax asset relating to the deductible
temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and
– in respect of deductible temporary differences associated with
investments in subsidiaries, deferred tax assets are recognised
only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred income tax assets is reviewed
at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at
each balance sheet date and are recognised to the extent that
it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
balance sheet date.
Income tax relating to items recognised directly in equity is
recognised in equity and not in the income statement.
54
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
Translation of foreign currencies
The consolidated financial statements are presented in euro
(EUR), which is the company’s functional and presentation
currency. Each entity in the group determines its own functional
currency and items included in the financial statements of each
entity are measured using the functional currency. Transactions in
foreign currencies are initially recorded in the functional currency
ruling at the date of transaction. The cost of non-monetary assets
is translated at the rate applicable at the date of the transaction.
All other assets and liabilities are translated at closing rates of
exchange. During the year, expenses and income expressed in
foreign currencies are recorded at exchange rates prevailing on
the date they occur or accrue. All exchange differences resulting
from the application of these principles are included in the
consolidated income statement.
Goodwill and fair value adjustments arising on the acquisition of
a 100%-owned foreign entity are treated as assets and liabilities
of the foreign entity and translated at the closing rate. In
accordance with IFRS 1, the group has elected not to apply IAS
21 ‘The Effects of Changes in Foreign Currency Exchange Rates’
(as revised in 2003) retrospectively to fair value adjustments and
goodwill arising in business combinations that occurred before
the date of transition to IFRS.
The assets and liabilities of consolidated subsidiaries are
translated into euro at the year-end exchange rates, while the
income and expense items of these subsidiaries are translated
at the average exchange rate of the year. The related foreign
exchange differences are included in the currency exchange
reserve. On disposal of a foreign subsidiary or joint venture,
the deferred cumulative amount recognised in equity relating
to that particular foreign operation is recognised in the
income statement.
The U.S. dollar exchange rates used by the group during the year
were as follows:
EUR 1 =
United States dollar
Average rate
for 2007
Closing rate
for 2007
Average rate
for 2008
Closing rate
for 2008
USD 1.37
USD 1.47
USD 1.48
USD 1.39
Basic and diluted earnings per share
The company’s capital structure consists of Class A, Class B
and, until April 5, 2007, Class C shares entitled to the payment of
annual dividends as approved by the shareholders at their annual
meetings. Holders of Class B shares participate in earnings and
are entitled to 40% of the dividends payable per Class A share.
Basic and diluted earnings per share are calculated by dividing
the net profit attributable to ordinary shareholders by the
weighted average number of common shares outstanding during
the period. Diluted earnings per share are also adjusted for the
effects of dilutive options.
accordance with the principles below where hedge accounting
is applied. The group uses derivative financial instruments such
as foreign currency contracts and interest rate swaps to hedge
its risks associated with interest rate and foreign currency
fluctuation. The fair value of forward exchange contracts is
calculated by reference to current forward exchange rates for
contracts with similar maturity profiles. The fair value of interest
rate swap contracts is determined by reference to market
values for similar instruments. On the date a hedging derivative
instrument is entered into, the group designates the derivative
as one of the following:
1) a hedge of the fair value of a recognised asset or liability or of
an unrecognised firm commitment (fair value hedge);
2) a hedge of a forecasted transaction or of the variability of cash
flows to be received or paid related to a recognised asset or
liability (cash flow hedge); or
3) a hedge of a net investment in a foreign operation.
Hedges which meet the strict criteria for hedge accounting are
accounted for as follows:
1) Fair value hedges
In relation to fair value hedges (Interest Rate Swaps on fixedrate debt) which meet the conditions for hedge accounting, any
gain or loss from re-measuring the hedging instrument at fair
value is recognised immediately in the income statement. Any
gain or loss on the hedged item attributable to the hedged risk
is adjusted against the carrying amount of the hedged item and
recognised in the income statement as finance revenue or cost.
2) Cash flow hedges
In relation to cash flow hedges (forward foreign currency
contracts and interest rate swaps) to hedge firm commitments
or forecasted transactions which meet the conditions for hedge
accounting, the portion of the gain or loss on the hedging
instrument that is determined to be an effective hedge is
recognised directly in equity and the ineffective portion is
recognised in the income statement as finance revenue or cost.
When the hedged commitment results in the recognition of
an asset or a liability, then, at the time the asset or liability
is recognised, the associated gains or losses that had
previously been recognised in equity are included in the initial
measurement of the acquisition cost or carrying amount of the
asset or liability.
3) Hedge of a net investment in a foreign operation
Changes in the fair value of a derivative or non-derivative
instrument that is designated as and meets all the required
criteria for a hedge of a net investment are recorded in the
currency exchange reserve to the extent that it is deemed to be
an effective hedge. The ineffective portion is recognised in the
income statement as finance revenue or cost.
Derivative financial instruments and hedging
The group recognises all derivatives as assets and liabilities
on the balance sheet at fair value. Changes in the fair value
of derivatives are recorded in the income statement or in
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated or exercised, the hedge no
longer qualifies for hedge accounting, or the group revokes the
designation. At that point in time, any cumulative gain or loss
on the hedging instrument recognised in equity is kept in equity
until the forecasted transaction occurs. If a hedged transaction
is no longer expected to occur, the net cumulative gain or
loss recognised in equity is transferred to net profit or loss for
the period.
SES Annual Report 2008
55
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
The group formally documents all relationships between hedging
instruments and hedged items, as well as its risk-management
objective and strategy for undertaking various hedge
transactions. This process includes allocating all derivatives that
are designated as fair value or cash flow hedges to specific
assets and liabilities on the balance sheet or to specific firm
commitments or forecasted transactions. The group also formally
assesses, both at the inception of the hedge and on an ongoing
basis, whether each derivative is highly effective in offsetting
changes in fair values or cash flows of the hedged item. If it is
determined that a derivative is not highly effective as a hedge or
if a derivative ceases to be a highly effective hedge, the group
will discontinue hedge accounting prospectively.
Accounting for pension obligations
The company and certain subsidiaries operate defined benefit
pension plans and/or defined contribution plans. The cost of
providing benefits under the defined benefit pension plan is
determined using the projected unit credit actuarial valuation
method. Actuarial gains and losses are recognised as income
or expense when the cumulative unrecognised gains or losses
for each individual plan exceed 10% of the higher of the defined
benefit obligation and the fair value of plan assets. These gains
or losses are recognised over the expected average remaining
working lives of the employees participating in the plans. Costs
relating to the defined contribution plan are recognised in the
income statement as incurred on an accruals basis.
Derecognition of financial assets and liabilities
1) Financial assets
A financial asset is derecognised where:
Share-based payments
Employees (including senior executives) of the group receive
remuneration in the form of share-based payment transactions,
whereby employees render services as consideration for equity
instruments (‘equity-settled transactions’).
– the rights to receive cash flows from the asset have expired;
– the group retains the right to receive cash flows from the
asset, but has assumed an obligation to pay them in full
without material delay to a third party under a ‘pass-through’
arrangement; or
– the group has transferred its rights to receive cash flows from
the asset and either (a) has transferred substantially all the
risks and rewards of the asset, or (b) has neither transferred
nor retained substantially all the risks and rewards of the asset,
but has transferred control of that asset.
Where the group has transferred its rights to receive cash
flows from an asset and have neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred
control of the asset, the asset continues to be recognised to
the extent of the group’s continuing involvement in the asset.
Continuing involvement that takes the form of a guarantee over
the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of the
consideration that the group could be required to repay.
Where continuing involvement takes the form of a written
and/or purchased option (including cash-settled options or similar
provision) on the transferred asset, the extent of the group’s
continuing involvement is the amount of the transferred asset
that the group may repurchase, except that in the case of a
written put option (including a cash-settled option or similar
provision) on an asset measured at fair value, the extent of the
group’s continuing involvement is limited to the lower of the fair
value of the transferred asset and the option exercise price.
2) Financial liabilities
A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. Where an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification
is treated as a derecognition of the original liability and the
recognition of a new liability, and the difference in the respective
carrying amount is recognised in profit or loss.
SES Annual Report 2008
1) Equity-settled transactions
The cost of equity-settled transactions is measured by reference
to the fair value at the date on which they are granted. The fair
value is determined by an external valuer using a binomial model,
further details of which are given in Note 24. In valuing equitysettled transactions, no account is taken of any performance
conditions, other than conditions linked to the price of the
company’s shares, if applicable.
The cost of equity-settled transactions is recognised, together
with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled,
ending on the date on which the relevant employees become
fully entitled to the award (‘the vesting date’). The cumulative
expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which
the vesting period has expired and the group’s best estimate of
the number of equity instruments that will ultimately vest. The
income statement charge or credit for a period represents the
movement in cumulative expense recognised as at the beginning
and end of that period. No expense is recognised for awards that
do not ultimately vest.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of earnings per share
(see Note 11).
2) Cash-settled transactions
The cost of cash-settled transactions is measured initially at
fair value at the grant date using a binomial model taking into
account the terms and conditions upon which the instruments
were granted (see Note 24). This fair value is expensed over
the period until settlement with recognition of a corresponding
liability. The liability is remeasured at each balance sheet date up
to and including the settlement date with changes in fair value
recognised in the consolidated income statement.
The group has taken advantage of the transitional provisions of
IFRS 2 in respect of equity-based awards and has applied IFRS 2
only to equity-based awards granted after November 7, 2002 that
had not vested on January 1, 2004.
56
Leases
The determination of whether an arrangement is, or contains a
lease is based on the substance of the arrangement at inception
date of whether the fulfilment of the arrangement is dependent on
the use of a specific asset or assets or the arrangement conveys
a right to use the asset. For arrangements entered into prior to
January 1, 2005, the date of inception is deemed to be January 1,
2005 in accordance with the transitional requirements of IFRIC 4.
Finance leases, which transfer to the group substantially all
risks and benefits incidental to ownership of the leased item,
are capitalised at the inception of the lease at the fair market
value of the leased item or, if lower, at the present value of the
minimum lease payments. Lease payments are apportioned
between the finance charges and reduction of the lease liability
so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly
to expense. Capitalised leased assets are depreciated over
the shorter of the estimated useful life of the asset or the
lease term.
Leases where the lessor retains substantially all the risks and
benefits of ownership of the asset are classified as operating
leases. Operating lease payments are recognised as an expense
in the income statement on a straight-line basis over the
lease term.
IFRS standards and interpretations not yet effective
The following IFRS and IFRIC interpretations have been issued
with an effective date for financial periods beginning on or after
January 1, 2009 and are relevant to the activity of the group.
The group has chosen not to early adopt these standards
and interpretations.
IFRS 8 “Operating Segments” is applicable for annual periods
beginning on or after January 1, 2009. This standard requires
disclosure of information concerning the group’s operating
segments and replaces the requirement to determine primary
(geographical) and secondary (business) reporting segments of
the group. The group will adopt this standard with effect from
January 1, 2009. The adoption will only impact disclosures in the
financial statements.
In May 2008 the board issued its first omnibus of amendments
to its standards, primarily with a view to removing
inconsistencies and clarifying wording. There are separate
transitional provisions for each standard. The group plans to
adopt these changes with effect from January 1, 2009 (or at the
date of endorsement by the European Union, if later).
IAS 1 Revised Presentation of Financial Statements was issued
in September 2007 and becomes effective for financial years
beginning on or after January 1, 2009. The standard separates
owner and non-owner changes in equity. The statement of
changes in equity will include only details of transactions with
owners, with non-owner changes in equity presented as a
single line. In addition, the standard introduces the statement
of comprehensive income: it presents all items of recognised
income and expense, either in one single statement, or in two
linked statements. The group is still evaluating whether it will
have one or two statements.
SES Annual Report 2008
IFRS 3R Business Combinations and IAS 27R Consolidated
and Separate Financial Statements. The revised standards
were issued in January 2008 and become effective for financial
years beginning on or after 1 July 2009. IFRS 3R introduces a
number of changes in the accounting for business combinations
occurring after this date that will impact the amount of goodwill
recognised, the reported results in the period that an acquisition
occurs, and future reported results. IAS 27R requires that a
change in the ownership interest of a subsidiary (without loss of
control) is accounted for as an equity transaction. Furthermore,
the amended standard changes the accounting for losses
incurred by the subsidiary as well as the loss of control of a
subsidiary. Other consequential amendment were made to
IAS 7 Statement of cash flows, IAS 12 Income taxes,
IAS 21 The effects of changes in foreign exchange rates,
IAS 28 Investment in Associates and IAS 31 Interests in Joint
Ventures. The changes made by IFRS3R and IAS 27R will affect
future acquisitions or loss of control and transactions with
minority interests.
IAS 23 Borrowing Costs (Revised) – removes the option to
expense borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset. The adoption
of this standard will not impact the group as the group already
capitalises such borrowing costs.
IFRS 2 Share-based Payment (revised) – clarifies the definition
of a vesting condition and prescribes the treatment for an award
that is effectively cancelled. The group will adopt this standard
with effect from January 1, 2009.
IAS 39 Financial Instruments: Recognition and Measurement
– Eligible Hedged Items. These amendments to IAS 39 were
issued in August 2008 and become effective for financial years
beginning on or after July 1, 2009. The amendment addresses
the designation of one-sided risk in a hedged item, and the
designation of inflation as a hedged risk or portion in particular
situations. It clarifies that an entity is permitted to designate
a portion of the fair value changes or cash flow variability of a
financial position as a hedged item. The group has concluded
that the amendment will have no impact on the financial position
or performance of the group, as the group has not entered into
any such hedges.
IFRIC 16 Hedges of a Net Investment in a Foreign Operation
was issued in July 2008 and becomes effective for financial
years beginning on or after 1 October 2008. The interpretation is
to be applied prospectively. IFRIC 16 provides guidance on the
accounting for a hedge of a net investment. As such it provides
guidance on identifying the foreign currency risks that qualify
for hedge accounting in the hedge of a net investment, where
within the group the hedging instrument can be held in the
hedge of a net investment and how an entity should determine
the amount of the foreign currency gain or loss, relating to both
the net investment and the hedging instrument, to be recycled
on disposal of the net investment. The group does not expect
the adoption of this interpretation to have a material impact on
the financial position or performance of the group.
57
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Note 3 – Consolidated subsidiaries, joint ventures and affiliates
The consolidated financial statements include the financial statements of the material subsidiaries, joint ventures and associates
listed below:
Held directly by SES:
SES ASTRA S.A., Luxembourg
SES GLOBAL-Americas Inc., USA
SES GLOBAL-Americas Holdings General Partnership, USA
SES GLOBAL-Americas Finance Inc., USA
SES GLOBAL Africa S.A., Luxembourg
SES Participations S.A., Luxembourg
SES GLOBAL Gibraltar Ltd, Gibraltar
SES Finance S.à r.l., Switzerland
Betzdorf Holdings Ltd, Ireland
SES Holdings (Netherlands) B.V., Netherlands
SES ASTRA Services Europe S.A., Luxembourg
SES Latin America S.A., Luxembourg
Held through SES ASTRA Services Europe S.A., Luxembourg:
Glocom (Communications and Images) Limited, Isle of Man
SES ASTRA TechCom S.A., Luxembourg
SES ASTRA TechCom Belgium S.A., Belgium
Astralis S.A., Luxembourg
SES GLOBAL Europe Subsidiary 2 GmbH, Germany
ASTRA Broadband Services S.A., Luxembourg
SES Digital Distribution Services AG, Switzerland
SES Digital Distribution Services S.à r.l., Luxembourg
Redu Operations Services S.A., Belgium
Redu Space Services S.A., Belgium
Entavio GmbH, Germany
SES Capital Luxembourg S.A., Luxembourg
SES Capital Belgium S.A., Belgium ND SatCom GmbH, Germany
ND SatCom Defence GmbH, Germany
ND SatCom Inc., USA
ND SatCom Services GmbH, Germany
ND SatCom Managed Networks GmbH, Germany
ND SatCom FZE, United Arab Emirates
ND SatCom Satellite Comm. Systems (Beijing) Co. Ltd, China
Bosphocom Ltd, Turkey
ND SatCom Grintex Communications Ltd, India
ND SatCom o.o.o., Russia
Milsat Services GmbH, Germany
ASTRA Platform Services GmbH, Germany
5cast GmbH, Germany
SES Digital Distribution Services GmbH, Germany
Virtual Planet Group GmbH, Germany
Held through SES ASTRA S.A.:
ASTRA GmbH, Germany
ASTRA Ltd, United Kingdom
SES Annual Report 2008
58
Effective
interest (%) 2008
Effective
interest (%)
2007
Method of
consolidation
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00 100.00 100.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
51.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
48.00
52.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
80.00
25.00
100.00
25.10
100.00
51.00
100.00
90.00
51.00
100.00 100.00 51.00 100.00 100.00 100.00 100.00
48.00
52.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
100.00 80.00 50.00 100.00 25.10 100.00 51.00 100.00 –
Full
Full
Full
Full
Full
Full
Full
Full
Equity
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Equity
Full
Full
Full
Full
100.00
100.00
100.00 100.00 Full
Full
Held through SES ASTRA S.A.:
ASTRA Marketing Iberica S.A., Spain
ASTRA France S.A., France
ASTRA Polska Sp. z o.o., Poland
ASTRA CEE GmbH, Austria
ASTRA (GB) Limited, United Kingdom
ASTRA Benelux B.V., Belgium
SES ASTRA CEE Sp. z o.o., Poland
SES ENGINEERING (Luxembourg) S.à r.l., Luxembourg
New Skies Investments S.à r.l, Luxembourg
SES SIRIUS AB, Sweden
Sirius Satellite Services SIA, Latvia LLC SES Sirius Ukraine, Ukraine
SES ASTRA 1KR S.à r.l, Luxembourg
SES ASTRA 1L S.à r.l, Luxembourg
SES ASTRA 1M S.à r.l, Luxembourg
SES ASTRA 3B S.à r.l, Luxembourg
SES ASTRA 5 S.à r.l, Luxembourg
SES ASTRA 1N S.à r.l, Luxembourg
Solaris Mobile Limited, Ireland
Held through SES Finance S.à r.l.:
SES Re International (Bermuda) Ltd, Bermuda
SES Satellite Leasing Ltd, Isle of Man
Held through SES GLOBAL Africa S.A.:
Accelon Ltd, South Africa
SES Africa (Proprietary) Ltd, South Africa
ODM (Proprietary) Ltd, South Africa
Held through SES GLOBAL-Americas Inc.:
SES Subsidiary 23 Inc., USA
SES Subsidiary 24 Inc., USA
SES Subsidiary 25 Inc., USA
SES Subsidiary 26 Inc., USA
SES AMERICOM, Inc., USA
SES AMERICOM PAC, Inc., USA
Worldsat LLC, USA
Communications Satellite Int. Marketing Inc., USA
SES AMERICOM International Holdings, Inc., USA
SES AMERICOM Canada, Inc., Canada
SES AMERICOM (Brazil) Holdings, LLC, USA
SES AMERICOM do Brasil Servicos de Telecommunicacoes, Ltda, Brazil
SES AMERICOM (Singapore) Pty, Ltd, Singapore
AMERICOM Government Services, Inc., USA
Sistemas Satelitales de Mexico S. de R.L. de C.V., Mexico
Socios Aguila S.de R.L de C.V., Mexico
Columbia Communications Corporation, USA
Columbia / WIGUSA Communications, Inc., USA
SES Satellites International, Inc., USA
SES Satellites (Gibraltar) Ltd, Gibraltar
SES Annual Report 2008
59
Effective
interest (%) 2008
Effective
interest (%)
2007
Method of
consolidation
100.00
100.00
–
–
100.00
100.00
100.00
100.00
100.00
90.00
90.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
50.00
100.00 100.00 100.00 100.00 100.00
100.00
100.00 100.00
100.00 75.00 75.00 –
100.00 100.00 100.00 100.00 100.00
100.00
–
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Proportional
100.00
100.00
100.00 100.00 Full
Full
43.55
100.00
20.00
43.55 100.00 –
Equity
Full
Equity
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
49.00
49.00
100.00
100.00
100.00
100.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
100.00 100.00
100.00 49.00 49.00 100.00 100.00 100.00 100.00 Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Equity
Equity
Full
Full
Full
Full
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Held through SES GLOBAL Americas Inc.:
SES AMERICOM Colorado, Inc., USA
AMC-1 Holdings LLC, USA
AMC-2 Holdings LLC, USA
AMC-3 Holdings LLC, USA
AMC-5 Holdings LLC, USA
AMC-6 Holdings LLC, USA
AMC-8 Holdings LLC, USA
AMC-9 Holdings LLC, USA
AMC-10 Holdings LLC, USA
AMC-11 Holdings LLC, USA
SES AMERICOM (Asia 1A) LLC, USA
AMERICOM Asia Pacific LLC, USA
AMC-12 Holdings LLC, USA
AMC-23 Holdings LLC, USA
SES AMERICOM California, Inc., USA
AMC-4 Holdings LLC, USA
AMC-7 Holdings LLC, USA
AMC-15 Holdings LLC, USA
AMC-16 Holdings LLC, USA
Starsys Global Positioning Inc., USA
Ciel Satellite Holdings Inc., Canada
Ciel Satellite Communications Inc., Canada
Ciel Satellite Limited Partnership, Canada
QuetzSat Directo, S. de R.L. de C.V., Mexico
Safe Sat of New York Inc., USA
SES ENGINEERING (United States) Inc., USA
AMC-14 Holdings LLC, USA
Northern Americas Satellite Venture, Inc., Canada
ISAT Inc., USA
SES AMERICOM Holdings (South America) LLC, USA
HiWire LLC, USA
Held through SES Latin America S.A.:
QuetzSat S. de R.L. de C.V., Mexico
Satellites Globales S. de R.L. de C.V., Mexico
SES Satelites Directo Ltda, Mexico
SES DTH do Brasil Ltda, Mexico
SES GLOBAL South America Holding S.L., Spain
Held through SES Holdings (Netherlands) B.V.:
New Skies Satellites Intermediate Holdings Ltd, Bermuda
New Skies Satellites Holdings (US) LLC, USA
New Skies Investments Holding B.V., The Netherlands
New Skies Holding B.V., The Netherlands
New Skies Satellites B.V., The Netherlands
New Skies Investments (Ireland) UnLtd, Ireland
SES Holdings (Bermuda) Ltd, Bermuda
New Skies Holdings Ireland Unlimited, Ireland
New Skies Satellites Ireland Unlimited, Ireland
SES Annual Report 2008
60
Effective
interest (%) 2008
Effective
interest (%)
2007
Method of
consolidation
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
100.00
100.00
100.00
80.00
100.00
100.00
70.00
49.00
100.00
100.00
100.00
100.00
–
–
50.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 80.00 100.00 100.00 70.00 49.00 100.00 100.00
100.00 100.00 100.00 100.00 50.00 Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Proportional
Proportional
Full
Full
Full
Full
Full
Full
Proportional
49.00
49.00
100.00
100.00
100.00
49.00
49.00
100.00
100.00
–
Proportional
Proportional
Full
Full
Full
100.00
–
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Full
Full
Full
Full
Full
Full
Full
Full
Full
Effective
interest (%) 2008
Held through SES Holdings (Netherlands) B.V.:
New Skies Satellites, Inc., USA
New Skies Satellites (U.K.) Ltd, U.K.
New Skies Satellites de Mexico S.A. de CV, Mexico
New Skies Satellites Mar B.V., The Netherlands
New Skies Satellites Ltda, Brazil
Morharras B.V., The Netherlands
New Skies Networks, Inc., USA
New Skies Networks (U.K.) Ltd, U.K.
SES ENGINEERING (Netherlands) B.V.
New Skies Asset Holdings, Inc., USA
New Skies Carrier Services, Inc., USA
New Skies Satellites China B.V., The Netherlands
SES New Skies Marketing B.V., The Netherlands
New Skies Satellites, India B.V., The Netherlands
New Skies Satellites Argentina B.V., The Netherlands
New Skies Networks Australia B.V., The Netherlands
New Skies Networks Australia Pty Ltd, Australia
New Skies Satellites Australia Pty Ltd, Australia
New Skies Satellites Licensee B.V., The Netherlands
New Skies Satellites Singapore B.V., The Netherlands
NSS Latin America Holdings S.A., Luxembourg
SES GLOBAL-South Americas Inc., USA
SES do Brasil Ltda, Brazil
SES Asia S.A., Luxembourg
SES Finance Services AG, Switzerland
100.00
–
49.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
100.00
100.00
Effective
interest (%)
2007
100.00 100.00 49.00 100.00 100.00 100.00 100.00 100.00 100.00
100.00 100.00 100.00 100.00
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Method of
consolidation
Full
Full
Equity
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Note 4 – Significant business combinations and disposals
GE split-off transaction
On February 14, 2007, the company announced that it had agreed with GE a split-off transaction whereby SES contributed certain
assets and cash to a new company, SES International Holdings, Inc (“SIH”). Subsequently SES exchanged its 100% shareholding
in SIH for GE’s entire holding of 103,149,900 SES Class C shares. The agreement was subject to the satisfaction of certain closing
conditions which were resolved such that, subject to the matter outlined below, the transaction closed on March 30, 2007. The
transfer of the group’s 19.99% shareholding in the Brazilian satellite operator Star One, foreseen under the agreement, could not
be executed on March 30, 2007, for Brazilian regulatory reasons. These clearances were received on June 29, 2007, and this final
part of the transaction closed on that date. In the second half of 2007 the accounting for the transaction was finalised following the
liquidation of the intermediate parent company of Star One and the resolution of certain contingencies linked to the cash portion of
the transaction. Based on the EUR 14.29 market price of the SES shares as at the date of closing, the fair value of the 103,149,900
C-shares received in exchange for the assets transferred amounted to EUR 1,474.0 million.
SES Annual Report 2008
61
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
The assets transferred to GE in the framework of this transaction are set out below:
Preliminary
net result of
disposal
EUR million
Impact of
completion of Star One disposal
EUR million
Final
net result of
disposal
EUR million
Carrying value on disposal:
The AMC-23 satellite and its related business
49.50% of Bowenvale Ltd1
19.99% shareholding in Star One
100.00% of SATLYNX
5.50% of OrbComm
Orbital slot rights for the AMC-23 satellite
Cash
Adjustment to tax impact of above disposals
Total
297.7 381.6 106.3
13.9
–
–
653.8 –
1,453.3
–
–
–
–
–
–
(15.0)
(3.2)
(18.2)
297.7
381.6
106.3
13.9
–
–
638.8
(3.2)
1,435.1
Recycling of currency exchange reserve balance –
98.5
98.5
Fair value of C-shares received in exchange
1,474.0 –
Net gain (loss) on the sale of the above assets
20.7 (80.3)
1,474.0
1
(59.6)
Representing a 34.1% effective interest in Asia Satellite Telecommunications Holdings Ltd
On disposal of the interests in Bowenvale and SATLYNX, an aggregated cash balance of EUR 69.6 million left the group. Since
this transaction was with a shareholder, the result arising on the disposal of the individual business assets has been taken directly
to equity. Pursuant to a shareholders’ resolution at an Extraordinary General Meeting held on March 15, 2007, the company cancelled
the Class C shares acquired under this transaction on April 5, 2007, such that no dividend was declared on these shares at the
SES Annual General Meeting on the same day. Of the assets transferred to SIH, only the interests in AsiaSat and in SATLYNX were
“components of an entity” in the sense of IFRS 5 (“Non-current Assets Held for Sale and Discontinued Operations”). For these
discontinued operations, the contribution to consolidated net income and to the consolidated cash flows of the group is set
out below:
12 months to
December 31, 2007
EUR million
Contribution to consolidated net income:
Revenue
Expenses
Profit for the year before tax
Income tax expense
Profit for the year after tax
17.8
(16.6)
1.2
(0.5)
0.7
Contribution to consolidated cash flows:
Net operating cash flow
Cash flow for investing activities
Cash flow for financing activities
1.1
(7.0)
–
SES Annual Report 2008
62
Note 5 – Interest in a joint venture
1. Ciel Satellite Limited Partnership, Canada
The group has a 70.0% interest in Ciel Satellite Limited Partnership, Canada, a jointly controlled entity which is involved in similar
business to the group’s other main operational entities.
The share of assets, liabilities, income and expenses of the jointly controlled entity as at December 31 and for the year then ended,
which are included in the consolidated financial statements, are as follows:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Revenue
Operating expenses
Depreciation and amortisation
Finance costs
Net loss
2008
EUR million
2007
EUR million
130.7
0.5
(67.5)
(3.6)
68.0
0.2
(62.9)
(5.4)
0.7
(1.0)
–
–
(0.3)
0.7
(0.8)
–
–
(0.1)
2. Solaris Mobile Limited, Ireland
The group has a 50.0% interest in Solaris Mobile Limited, a joint venture between SES ASTRA and Eutelsat Communications to
provide mobile satellite services in S-band. Solaris Mobile services are scheduled for launch in 2009, when S-band capacity will
become available on Eutelsat’s W2A satellite.
The share of assets, liabilities, income and expenses of the jointly venture as at December 31 and for the year then ended, which are
included in the consolidated financial statements, are as follows:
2008
EUR million
2007
EUR million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Revenue
Operating expenses
Depreciation and amortisation
Finance income, net
Net loss
63.6
10.6
–
10.1
–
–
–
–
–
(1.6)
–
0.4
(1.2)
–
–
–
–
–
Note 6 – Segment information: geographical segments
The group’s internal reporting and responsibility structure reflects geographical regions and comprises four segments:
1. SES ASTRA
2. SES AMERICOM
3. SES NEW SKIES
4. SES S.A. & Other Participations Primarily Europe;
Primarily North and Central America;
Primarily regions other than the above
Corporate activities
The group accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market prices.
SES Annual Report 2008
63
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
For the year ended December 31, 2008 and as at that date:
SES ASTRA
EUR million
SES AMERICOM
EUR million
SES NEW SKIES
EUR million
Other
EUR million
Elimination
EUR million
Total
EUR million
Segmental results
External sales
1,010.0
367.9
252.4
–
Inter-segment sales
–
1.2
13.2
–
Total revenue
1,010.0
369.1
265.6
–
–
(14.4)
(14.4)
1,630.3
–
1,630.3
Operating expenses
(302.4)
(155.7)
(60.1)
(27.3)
14.4
(531.1)
–
130.3
–
–
–
130.3
–
–
(129.5)
0.8
–
–
–
–
–
–
(129.5)
0.8
707.6
214.2
205.5
(27.3)
–
1,100.0
(190.0)
(46.0)
471.6
(165.2)
(2.7)
46.3
(70.2)
–
135.3
(0.8)
–
(28.1)
–
–
–
(426.2)
(48.7)
625.1
(0.6)
–
–
–
–
(0.6)
Segmental assets
Property, plant and equipment
Intangible assets
Allocated non-current assets
1,449.8
557.6
2,007.4
1,535.8
1,725.3
3,261.1
703.2
599.2
1,302.4
107.2
–
107.2
–
–
–
3,796.0
2,882.1
6,678.1
Current assets
Total allocated assets
253.9
2,261.3
40.5
3,301.6
72.8
1,375.2
15.7
122.9
–
–
382.9
7,061.0
Non-allocated assets
Total assets
466.5
7,527.5
AMC-14 programme
termination income
AMC-14 programme
termination charge
AMC-14 net termination impact
EBITDA1
Depreciation
Amortisation
Operating profit
Share of associates’ results
Segmental liabilities
Non-current liabilities
Current liabilities
Total allocated liabilities
–
–
–
344.3
689.3
1,033.6
Non-allocated liabilities
4,932.6
Total liabilities
5,966.2
Capital expenditure
1
188.5
377.2
565.7
325.1
131.4
109.5
240.9
23.4
70.5
93.9
246.8
155.1
Earnings before interest, tax, depreciation and amortisation
SES Annual Report 2008
64
1.0
132.1
133.1
72.3
–
799.3
For the year ended December 31, 2007 and as at that date:
SES ASTRA
EUR million
SES AMERICOM
EUR million
SES NEW SKIES
EUR million
Other
EUR million
Elimination
EUR million
Total
EUR million
Segmental result
External sales
970.5
394.7
245.5
–
–
1,610.7
Inter-segment sales
0.9
6.5
15.8
–
(23.2)
–
Total revenue
971.4
401.2
261.3
–
(23.2)
1,610.7
Operating expenses
EBITDA1
(293.6)
677.8
(148.9)
252.3
(67.3)
194.0
(33.8)
(33.8)
23.2
–
(520.4)
1,090.3
Depreciation
Amortisation
Operating profit
(186.4)
(38.6)
452.8
(150.2)
(2.9)
99.2
(98.6)
–
95.4
(0.5)
–
(34.3)
–
–
–
(435.7)
(41.5)
613.1
(1.9)
(0.1)
2.3
–
–
0.3
Segmental assets
Property, plant and equipment
Intangible assets
Allocated non-current assets
1,340.2
574.4
1,914.6
1,514.0
1,631.3
3,145.3
599.1
569.0
1,168.1
35.7
0.1
35.8
–
–
–
3,489.0
2,774.8
6,263.8
Current assets
Total allocated assets
209.2
2,123.8
30.0
3,175.3
61.7
1,229.8
25.0
60.8
–
–
325.9
6,589.7
Non-allocated assets
Total assets
260.0
6,849.7
Share of associates’ results
Segmental liabilities
Non-current liabilities
Current liabilities
Total allocated liabilities
–
–
–
334.8
533.8
868.6
Non-allocated liabilities
4,369.3
Total liabilities
5,237.9
Capital expenditure
137.4
325.6
463.0
296.4
162.5
78.2
240.7
34.0
64.4
98.4
211.3
159.3
Earnings before interest, tax, depreciation and amortisation
1
SES Annual Report 2008
65
0.9
65.6
66.5
40.7
–
707.7
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Note 7 – Segment information: business segments
The following tables present information regarding the group’s business segments for the years ended December 31, 2008
and 2007.
The segment “Infrastructure” represents the business of owning and operating satellites. It includes transponder leasing and sales
deals where only capacity and incidental services (such as uplinking and downlinking) are involved. This includes the transponders
leased to the services segment.
The segment “Services” includes all transponder leasing deals in which transponder capacity is bundled with other services
(such as platform services), or other satellite-centric services are offered.
Infrastructure
EUR million
Services
EUR million
Elimination
EUR million
Total
EUR million
Year ended December 31, 2008
External sales
Inter-segment sales
Total revenue
1,263.9
107.8
1,371.7
366.4
–
366.4
–
(107.8)
(107.8)
1,630.3
–
1,630.3
Allocated assets
6,775.6
285.4
–
Non-allocated assets
Total assets
7,061.0
466.5
7,527.5
Capital expenditure
759.8
39.5
–
799.3
Year ended December 31, 2007
External sales
Inter-segment sales
Total revenue
1,297.1
81.1
1,378.2
313.6
6.6
320.2
–
(87.7)
(87.7)
1,610.7
–
1,610.7
Allocated assets
6,242.5
347.2
–
Non-allocated assets
–
Total assets
6,589.7
260.0
6,849.7
Capital expenditure
664.5
43.2
707.7
Note 8 – Operating expenses
The operating expense categories disclosed include the following types of expenditure:
1) Cost of sales (excluding staff costs and depreciation) represents cost categories which g
enerally vary directly with revenue
development. Such costs include the rental of third-party satellite capacity, the cost of goods sold (for example on the disposal of
space segment assets), and costs directly attributable to the facilitation of customer contracts.
2) Staff costs includes gross salaries and employer’s social security payments, payments into p
ension schemes for employees, and
charges arising under share-based payment schemes.
3) Other operating expenses are by their nature less variable to revenue development. Such costs include facility costs, in-orbit
insurance costs, marketing expenses, general and administrative expenditure, consulting charges, travel-related expenditure and
movements on provisions for debtors.
Provision for termination of IP-Prime activities
On December 15, 2008 SES AMERICOM announced that it would cease providing its IPTV service in America “IP-PRIME” by July 31,
2009. Reflecting the costs associated with this, the group has made a provision in the amount of EUR 8.5 million which is recorded in the
line “Other operating expenses” in the consolidated income statement. Furthermore an impairment charge on assets used in the provision
of this service has been taken in the amount of EUR 20.3 million through the “Depreciation expense” line.
SES Annual Report 2008
66
Note 9 – Finance revenue and costs
2008
EUR million
2007
EUR million
Finance revenue
Interest income
Foreign exchange gains
Gain on disposal of subsidiary
45.6
–
–
45.6
27.7
21.3
2.7
51.7
Finance costs
Interest expense (net of amounts capitalised)
Foreign exchange charges
Charges relating to the termination of a subsidiary
(193.7)
(0.2)
(0.3)
(194.2)
(181.7)
–
–
(181.7)
Note 10 – Income taxes
Taxes on income comprise the taxes paid or owed on income in the individual countries, as well as deferred taxes. Current and
deferred taxes can be analysed as follows:
Consolidated income statement
Current income tax
Current income tax charge
Foreign taxes
Adjustments in respect of prior periods
2008
EUR million
(111.0)
–
(3.8)
Deferred income tax
41.8
Relating to origination and reversal of temporary differences
(14.4)
Use of tax losses brought forward
(87.4)
Income tax expense per consolidated income statement
Consolidated statement of changes in equity
Deferred income tax related to items (charged) or credited directly in equity
20.1
Net loss on revaluation of financial instruments – Cash flow hedge
4.5
Unrealised loss on loans and borrowings – Net investment hedge
24.6
Income taxes reported in equity
SES Annual Report 2008
67
2007
EUR million
(76.8)
–
15.3
9.2
(26.0)
(78.3)
1.8
(58.4)
(56.6)
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
A reconciliation between tax expenses and the profit before tax of the group multiplied by theoretical tax rate of 30.38% which
corresponds to the Luxembourg domestic tax rate for the years ended December 31, 2008 and 2007 is as follows:
2008
EUR million
2007
EUR million
Profit before tax Multiplied by theoretical tax rate of 30.38%
Investment tax credits
Tax exempt income
Deferred tax asset on previously unrecognised tax losses
Taxes on undistributed earnings of subsidiaries
Use of previous years tax losses
Effect of different local tax rates
Taxes related to prior years
Non-deductible expenditures
Effects of change in tax rate
Reversal of previously recognised deferred tax assets
Other Income tax reported in the consolidated income statement 476.5
483.1
144.8
(25.2)
(18.1)
(8.7)
6.1
3.4
(76.3)
(9.7)
59.2
(0.7)
–
12.6
87.4
146.8
(14.1)
(3.5)
–
–
–
(54.9)
(13.0)
11.7
1.2
1.9
2.2
78.3
The accounts related to deferred taxes included in the consolidated financial statements can be analysed as follows:
Deferred
tax assets
2008
EUR million
Loss carried forward
102.8
Tax-based special depreciation
–
Amortisation
–
Depreciation
–
Retirement benefit obligation 5.7
Value adjustments on financial asset
–
Value adjustments on treasury shares 3.2
Measurement of financial instruments
at fair value
–
Receivables
–
Payables
23.2
Other provisions and accruals
6.4
Other
–
Subtotal
141.3
Offset of deferred taxes
(122.4)
Total
18.9
Deferred
tax assets
2007
EUR million
Deferred
tax liabilities
2008
EUR million
Deferred
tax liabilities
2007
EUR million
Deferred
tax in income
2008
EUR million
Deferred
tax in income
2007
EUR million
109.5
–
–
–
7.5
–
3.5
–
12.0
261.4
543.1
–
6.3
–
–
15.6 166.9
529.8
–
95.2
–
11.1
1.2
(7.7)
(14.1)
1.0
(0.6)
1.2
23.9
4.7
25.7
1.1
(2.0)
(0.2)
(1.6)
–
–
23.2
6.4
–
150.1
(129.5)
20.6
38.5
30.1
–
–
(13.8)
877.6
(122.4)
755.2
75.1
22.0
–
–
4.6 909.2
(129.5)
779.7
(11.6)
(3.5)
–
(1.0)
(3.4)
(27.4)
–
(27.4)
(29.7)
0.5
(5.3)
1.1
(1.4)
16.8
–
16.8
Deferred tax assets have been offset against deferred tax liabilities where they relate to the same taxation authority and the entity
concerned has a legally enforceable right to set off current tax assets against current tax liabilities.
In addition to the tax losses for which the group recognised deferred tax assets, the group has tax losses of EUR 244.7 million
(2007: EUR 250.3 million) that are available indefinitely for offset against future taxable profits of the companies in which the losses
arose. Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset taxable profits
elsewhere in the group and they have arisen in subsidiaries that are not expected to obtain taxable profits against which these
profits could be offset in the foreseeable future.
SES Annual Report 2008
68
Note 11 – Earnings per share
Basic earnings per share are calculated by dividing the net profit for the year attributable to ordinary shareholders of each class of
shares by the weighted average number of shares outstanding during the year. Earnings per share calculated on a fully diluted basis
are insignificantly different from the basic earnings per share.
For the year 2008, earnings per share of EUR 0.98 per A share (2007: EUR 0.91), and EUR 0.39 per B share (2007: EUR 0.37) have
been calculated on the following basis:
2008
EUR million
2007
EUR million
Profit attributable to equity holders of the parent
387.5
404.0
Weighted average number of shares, net of own shares held, for the purpose of calculating earnings per share:
2008
EUR million
2007
EUR million
Class A shares
Class B shares
Class C shares (cancelled in 2007)
Total
326.5
172.0
–
498.5
342.1
188.9
24.9
555.9
The weighted average number of shares is based on the capital structure of the company as described in Note 23.
Note 12 – Dividends paid and proposed
Dividends declared and paid during the year:
2008
EUR million
2007
EUR million
Class A dividend for 2007: EUR 0.60 (2006: EUR 0.44)
Class B dividend for 2007: EUR 0.24 (2006: EUR 0.18)
Total
213.3
42.7
256.0
148.9
38.8
187.7
2008
EUR million
2007
EUR million
Class A dividend for 2008: EUR 0.66
Class B dividend for 2008: EUR 0.26
Total
219.7
44.0
263.7
213.3
42.7
256.0
Dividends proposed for approval at the 2009 Annual General Meeting
(Not recognised as a liability as at December 31, 2008)
SES Annual Report 2008
69
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Note 13 – Property, plant and equipment
Land and
Space
Ground
buildings
segment
segment
EUR million
EUR million
EUR million
Movements in 2007 on cost
As at January 1
Change of consolidation scope
Impact of GE transaction (Note 4)
Additions
Disposals/retirements
Transfers from assets in course
of construction (Note 14)
Impact of currency translation
As at December 31
Other fixtures
and fittings,
tools and
equipment
EUR million
Total
EUR million
177.8
(4.6)
(3.9)
4.5
(2.6)
5,256.8
–
(340.6)
20.3
(26.0)
408.3
–
(26.6)
23.9
(25.5)
134.6
1.7
(4.8)
21.0
(3.1)
5,977.5
(2.9)
(375.9)
69.7
(57.2)
0.8
(5.1)
166.9
456.6
(264.1)
5,103.0
12.5
(24.8)
367.8
5.5
(2.1)
152.8
475.4
(296.1)
5,790.5
Movements in 2007 on depreciation
As at January 1
(71.5)
Change of consolidation scope
0.2
Impact of GE transaction (Note 4)
0.5
Depreciation
(7.9)
Depreciation on disposals/retirements
1.6
Reclassifications
–
Impact of currency translation
1.4
As at December 31
(75.7)
(2,466.2)
–
83.8
(373.3)
25.1
(0.1)
97.3
(2,633.4)
(277.5)
–
17.0
(30.9)
25.4
0.7
16.9
(248.4)
(94.6)
–
4.0
(23.6)
2.8
–
2.0
(109.4)
(2,909.8)
0.2
105.3
(435.7)
54.9
0.6
117.6
(3,066.9)
Net book value as at
December 31, 2007
2,469.6
119.4
43.4
2,723.6
SES Annual Report 2008
91.2
70
Land and
Space
Ground
buildings
segment
segment
EUR million
EUR million
EUR million
Movements in 2008 on cost
As at January 1
Change of consolidation scope
Additions
Disposals/retirements
Transfers from assets in course
of construction (Note 14)
Impact of currency translation
As at December 31
Other fixtures
and fittings,
tools and
equipment
EUR million
Total
EUR million
166.9
–
2.0
(1.8)
5,103.0
0.4
31.9
–
367.8
–
12.8
(19.6)
152.8
–
27.9
(6.8)
5,790.5
0.4
74.6
(28.2)
–
2.4
169.5
119.9
86.9
5,342.1
17.0
5.4
383.4
1.8
1.2
176.9
138.7
95.9
6,071.9
(2,633.4)
(248.4)
(109.4)
(3,066.9)
–
(345.4)
–
(0.3)
(45.1)
(3,024.2)
(20.3)
(29.0)
17.2
(0.1)
(0.9)
(281.5)
–
(23.7)
3.0
(0.1)
(0.8)
(131.0)
(20.3)
(405.9)
21.7
(0.2)
(47.5)
(3,519.1)
Movements in 2008 on depreciation
As at January 1
(75.7)
Impairment on IP-PRIME
assets (Note 8)
–
Depreciation
(7.8)
Depreciation on disposals/retirements
1.5
Reclassifications
0.3
Impact of currency translation
(0.7)
As at December 31
(82.4)
Net book value as at
December 31, 2008
87.1
2,317.9
101.9
45.9
There were no fixed assets held under finance lease contracts as at December 31, 2008 (2007: EUR 0.6 million).
2,552.8
Note 14 – Assets in the course of construction
Cost and net book value as at January 1, 2007
Movements in 2007
Change of consolidation scope
Impact of GE transaction (Note 4)
Additions
Disposals
Transfers to assets in use (Note 13)
Impact of currency translation
Cost and net book value as at December 31, 2007
SES Annual Report 2008
Land and buildings
EUR million
Space
segment
EUR million
Ground
segment
EUR million
Total
EUR million
–
664.5
30.5
695.0
–
–
0.3
(0.1)
–
–
0.2
–
(9.9)
609.6
(0.2)
(454.7)
(74.3)
735.0
0.2
–
28.1
(5.2)
(20.7)
(2.7)
30.2
0.2
(9.9)
638.0
(5.5)
(475.4)
(77.0)
765.4
71
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Land and buildings
EUR million
Space
segment
EUR million
Ground
segment
EUR million
Total
EUR million
Cost and net book value as at January 1, 2008
0.2
735.0
30.2
765.4
Movements in 2008
AMC-14 launch failure (Note 21)
Additions
Disposals
Transfers to assets in use (Note 13)
Impact of currency translation
Cost and net book value as at December 31, 2008
–
0.1
(0.1)
–
–
0.2
(127.5)
692.9
–
(119.9)
16.5
1,197.0
–
31.7
(0.5)
(18.8)
3.4
46.0
(127.5)
724.7
(0.6)
(138.7)
19.9
1,243.2
Borrowing costs of EUR 48.7 million (2007: EUR 27.7 million) arising on financing specifically relating to satellite construction were
capitalised during the year and are included in ‘Space segment’ additions in the above table. A weighted average capitalisation rate
of 5.00% (2007: 5.00%) was used, representing the group’s average weighted cost of borrowing.
Note 15 – Intangible assets
Indefinite life
Orbital slot
licence rights Goodwill
Other
EUR million
EUR million
EUR million
Definite
life intangibles
EUR million
Total
EUR million
Book value as at January 1, 2007
945.2
1,943.9
2.8
490.7
Movements in 2007 on cost
As at January 1
945.2
1,943.9
2.8
677.0
Impact of GE transaction (Note 4)
(203.3)
(123.6)
–
(4.1)
Additions
–
4.4
2.7
15.3
Impact of currency translation
(70.6)
(183.9)
–
(6.4)
As at December 31
671.3
1,640.8
5.5
681.8
Movements in 2007 on amortisation
As at January 1
–
–
–
(186.3)
Amortisation
–
–
–
(41.5)
Impact of currency translation
–
–
–
3.2
As at December 31
–
–
–
(224.6)
3,382.6
Book value as at December 31, 2007
Movements in 2008 on cost
As at January 1
Additions
Impact of currency translation
As at December 31
3,568.9
(331.0)
22.4
(260.9)
2,999.4
(186.3)
(41.5)
3.2
(224.6)
671.3
1,640.8
5.5
457.2
2,774.8
671.3
14.3
30.4
716.0
1,640.8
4.2
91.4
1,736.4
5.5
–
–
5.5
681.8
13.7
3.0
698.5
2,999.4
32.2
124.8
3,156.4
–
–
–
–
–
–
–
–
–
–
–
–
(224.6)
(48.7)
(1.0)
(274.3)
(224.6)
(48.7)
(1.0)
(274.3)
Book value as at December 31, 2008 716.0
1,736.4
5.5
424.2
2,882.1
Movements in 2008 on amortisation
As at January 1
Amortisation
Impact of currency translation
As at December 31
SES Annual Report 2008
72
Indefinite life intangible assets
The indefinite life intangible assets as at December 31, 2008 have a net book value of EUR 2,457.9 million (2007: EUR 2,317.6 million)
made up as set out per cash-generating unit in the table below.
2008
EUR million
2007
EUR million
SES AMERICOM
SES NEW SKIES
SES SIRIUS
ASTRA Platform Services
ND SatCom
SES ASTRA
Others
Total
1,675.8
599.2
84.3
33.9
29.5
13.7
21.5
2,457.9
1,596.3
569.1
86.7
33.5
31.4
0.6
–
2,317.6
1. Orbital slot licence rights
Interests in orbital slot licence rights were acquired in the course of the acquisitions of SES AMERICOM, SES SIRIUS and SES NEW
SKIES, as well as through the targeted acquisition of such rights from third parties. The group believes that it has a high probability
of being able to achieve the extension of these rights as the current agreements expire and hence these assets are not amortised,
but rather are held on the balance sheet at acquisition cost. Impairment procedures are performed at least once a year to assess
whether the carrying value is still appropriate.
2. Goodwill
No impairment charges on goodwill were taken during the year (2007: nil).
Impairment procedures are performed at least once a year to assess whether the carrying value is still appropriate. The recoverable
amount of the goodwill is determined based on a value-in-use calculation (Note 2) using the most recent business plan information
approved by senior management which covers a period of up to seven years.
Discount rates in 2008 are between 6.80% and 8.30% (2007: 6.75% and 8.25%) and were selected to reflect corresponding rates
on financial markets, and the capital structure of businesses in the group’s business sector. Terminal growth rates used in the
valuations are set at 1.0% which can be supported by reference to the trading performance of the companies concerned over a
longer period.
Definite life intangible assets
The group’s primary definite life intangible asset is the agreement concluded by SES ASTRA with the Luxembourg government in
relation to the usage of the Luxembourg frequencies in the orbital positions of the geostationary arc from 45˚ West to 50˚ East for
the period of January 1, 2001 to December 31, 2021. Given the finite nature of this agreement, these usage rights – valued at EUR
550.0 million on acquisition – are being amortised on a straight-line basis over the 21-year term of the agreement.
Impairment testing of goodwill and intangibles with indefinite lives
The cash-generating units (CGUs) for impairment testing of goodwill and intangible assets relating to SES AMERICOM, SES NEW
SKIES, SES SIRIUS are the smallest identifiable group of satellite assets that are largely independent of the cash flows from other
groups of satellites. In identifying these CGUs the group takes into account fleet utilisation considerations, particularly the ability of
individual satellites to provide back-up services to other satellites in the light of their available frequency spectrum and geographical
footprint. For ASTRA Platform Services and ND SatCom the companies operations as a whole are treated as a CGU.
The calculations of value in use are most sensitive to:
– movements in the underlying business plan assumptions for the satellites concerned;
– changes in discount rates; and
–the growth rate assumptions used to extrapolate cash flows beyond the business planning period.
SES Annual Report 2008
73
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Movements in the underlying business plan assumptions: the group’s subsidiaries draw up annually a business plan which generally
provides an assessment of the expected developments for a seven-year period beyond the end of the year when the plan is drawn
up. These business plans reflect both the most up-to-date assumptions concerning the CGU’s markets and also developments
and trends in the business of the CGU. For the provision of satellite capacity business these will particularly take account of the
following factors:
–the expected developments in transponder fill rates, including the impact of the launch of new capacity;
–new products and services to be launched during the business plan period;
– any changes in the expected capital expenditure cycle – due to technical degradation of a satellite or through the identified need
for additional capacities; and
–any changes in satellite procurement, or launch, cost assumptions.
Changes in discount rates: discount rates reflect management’s estimate of the risks specific to each unit. Management uses a
weighted average cost of capital as the discount rate for each entity. This reflects the market interest rates on ten-year bonds in the
market concerned, the capital structure of the group, and other factors, as necessary, applying specifically to the CGU concerned.
Growth rate assumptions used to extrapolate cash flows beyond the business planning period: rates are based on the commercial
experience relating to the CGUs concerned and the expectations for developments in the markets which they serve.
As part of standard impairment testing procedures the company assesses the impact of changes in the discount rates and growth
assumptions on the valuation surplus, or deficit as the case may be, revealed by the impairment testing. Discount rates are
simulated up to 1% below and above the CGU specific rate used in the base valuation. Likewise terminal growth assumptions are
simulated at 1% higher and lower than the base assumption in the valuation. In this way a matrix of valuations is generated which
reveals the exposure to impairment charges for each CGU based on movements in the valuation parameters which are within the
range of outcomes foreseeable at the valuation date.
The most recent testing confirmed that for all except one CGU, even in the least favourable case – a combination of lower terminal
growth rates and higher discount rates – no impairment charge would be required. For the SES AMERICOM CGU, whilst there is
currently a valuation surplus, a fall in the terminal growth rate of about 0.6%, or an increase in the discount rate of over 0.3% would
eliminate this surplus, all other factors being equal.
Note 16 – Investment in associates
On December 31, 2008, the group held investments in associates of EUR 3.2 million (2007: EUR 1.6 million), mainly represented
by interests in Milsat Services GmbH in Germany and QuetzSat S. de R. L. de C.V. in Mexico. The third-party assets and liabilities of
these entities are not significant.
Note 17 – Other financial assets
2008
EUR million
2007
EUR million
Loans and receivables
12.3
12.0
Amounts receivable from associates after one year
1.2
0.5
Other non-current receivables 13.5
12.5
Other financial assets
–
3.1
Sundry financial assets
Total other financial assets
13.5
15.6
Amounts receivable from associates after one year related to a loan made to the group’s Mexican affiliate QuetzSat S. de R. L. de C.V..
SES Annual Report 2008
74
Note 18 – Trade and other receivables
2008
EUR million
2007
EUR million
Net trade debtors
199.3
156.6
68.6
68.5
Unbilled accrued revenue 66.9
64.5
Other receivables
334.8
289.6
Total trade and other receivables
Unbilled accrued revenue represents revenues for use of satellite capacity under long-term contracts but not billed. Billing will occur
based on the terms of the contracts. An amount of EUR 4.3 million was charged to income in 2008 concerning movement on debtor
provisions (2007: EUR 1.6 million). This amount is disclosed in “Other operating charges”. Trade debtors and other receivables at
December 31, 2008 included EUR 12.8 million (2007: EUR 11.7 million) of amounts becoming due and payable after more than one year.
As at December 31, 2008, trade receivables with a nominal amount of EUR 28.8 million (2007: EUR 25.5 million) were impaired and
fully provided for. Movements in the provision for the impairment of receivables were as follows:
As at January 1
Net charge to income for the year
Change in scope
Utilised
Impact of currency translation
As at December 31 SES Annual Report 2008
75
2008
EUR million
25.5
4.3
–
(1.4)
0.4
28.8
2007
EUR million
33.1
1.6
(2.4)
(5.5)
(1.3)
25.5
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Note 19 – Financial instruments
Fair values
Set out below is a comparison by category of carrying amounts and fair values of all of the group’s financial instruments that are
carried in the financial statements.
Carrying
amount 2008
EUR million
Fair
value 2008
EUR million
Carrying
amount 2007
EUR million
Fair
value 2007
EUR million
Financial assets
Non-current financial assets:
Loans and receivables
13.5
13.5
Other –
–
Total other financial assets
13.5
13.5
12.5
3.1
15.6
12.5
3.1
15.6
20.6
289.6
197.1
507.3
20.6
289.6
197.1
507.3
694.5
–
–
115.0
299.9
694.5
–
–
115.0
299.3
Current financial assets:
Valuation of financial derivatives
–
–
Trade & other receivables
334.8
334.8
Cash and cash equivalents
435.5
435.5
Total
770.3
770.3
Financial liabilities
Interest-bearing loans and borrowings:
At floating rates:
Bilateral multi-currency
1,046.2
1,046.2
Bilateral 2010 (EUR 100 million) issued under EMTN 100.0
100.0
Syndicated loan
373.0
373.0
Uncommitted loans
90.0
90.0
Eurobond 2009 (EUR 300 million)
300.0
298.2
At fixed rates:
Eurobond 2008 (EUR 500 million)
Eurobond 2011 (EUR 650 million)
Eurobond 2013 (EUR 500 million)
German Bond (« Schuldschein ») 2012
(EUR 100 million), non-listed
German Bond (« Schuldschein ») 2012
(EUR 100 million), non-listed
Series A (USD 400 million)
Series B (USD 513 million)
Series C (USD 87 million)
Series D (GBP 28 million)
–
649.1
499.8
–
629.6
441.2
489.8
648.1
497.9
497.9
649.0
474.7
99.5
111.2
–
–
99.4
203.0
367.4
62.9
21.0
112.1
225.2
422.4
70.6
22.6
–
229.6
348.0
59.5
32.7
–
273.4
367.2
63.2
37.3
Total interest-bearing loans and borrowings:
Of which: Non-current
Of which: Current
3,911.3
3,476.0
435.3
3,942.3
3,508.8
433.5
3,415.0
2,766.0
649.0
3,471.5
2,814.4
657.1
Interest rate swaps
Forward currency contracts
Total valuation of financial derivatives
Of which: Non-current
Of which : Current
27.8
39.8
67.6
27.8
39.8
27.8
39.8
67.6
27.8
39.8
15.8
–
15.8
–
15.8
15.8
–
15.8
–
15.8
Trade & other payables
460.5
460.5
284.9
284.9
SES Annual Report 2008
76
Set out below is an analysis of financial derivatives valuation by category of hedging/trading activities and derivatives.
Analysis of financial derivatives
December 31, 2007
December 31, 2008
Fair value asset
EUR million
Fair value liability
EUR million
Derivatives held for trading:
Currency forwards, futures and swaps
–
2.3
4.0
–
Cash flow hedges:
Currency forwards, futures and swaps
–
37.5
–
Interest rate swaps
–
27.8
–
0.1
5.8
Fair value hedges:
Interest rate swaps
–
–
–
9.9
Fair value asset
EUR million
Fair value liability
EUR million
Net investment hedges:
Currency forwards, futures and swaps
–
–
16.6
–
Total valuation of financial derivatives
Of which: Current Of which: Non-current
–
–
–
67.6
39.8
27.8
20.6
20.6
–
15.8
15.8
–
The fair value of the borrowings has been calculated by discounting the expected future cash flows at prevailing interest rates except
for the listed Eurobonds for which the quoted market price has been used. The fair value of foreign currency contracts is calculated
by reference to current forward exchange rates for contracts with similar maturity profiles. The fair value of the interest rate swap
contracts is determined by reference to market values for similar instruments.
All interest-bearing loans and borrowings are at amortised cost, with the exception of the EUR 500 million Eurobond 2008 which was
carried at fair value for the portion of the loan linked to interest rate risk in accordance with the fair value hedging detailed in Note 20.
Note 20 – Financial risk management objectives and policies
The group’s financial instruments, other than derivatives, comprise bilateral multi-currency credit facilities with banks, syndicated
loan, Eurobonds, U.S. dollar borrowings under a private placement issue, euro-denominated commercial papers, cash and shortterm deposits. The main purpose of these financial instruments is to raise cash to finance the day-to-day activities of the group’s
operations. The group has various other financial assets and liabilities such as trade receivables and trade payables, which arise
directly from its operations.
The group also enters into derivative transactions, principally interest rate and cross currency swaps as well as forward currency
contracts, in order to manage the interest rate and exchange rate exposure on the group’s assets, liabilities and finance operations.
The main risks arising from the group’s financial instruments are liquidity risks, foreign currency risks, interest rate risks and credit
risks. The general policies are reviewed and approved by the Board, and are summarised below.
The risks are managed on a weekly basis through a review of the risks and hedges in place. This review includes a market update
and forecasting of interest and exchange rates which are important for the portfolio of the group. The risk analysis is reviewed on a
quarterly basis by the Board of Directors.
The group’s accounting policies in relation to derivatives and other financial instruments are set out in Note 2.
Liquidity risk
The group’s objective is to efficiently use cash generated so as to maintain short-term debt and bank loans at a low level. In case
of liquidity needs, the group can call on committed bilateral credit facilities and a syndicated loan. In addition, if deemed appropriate
based on prevailing market conditions, the group can access additional funds through the European Medium Term Note or
Commercial Paper programmes. The group’s debt maturity profile is tailored to allow the company to cover repayment obligations
as they fall due.
The group operates a centralised treasury function which manages the liquidity of the group in order to optimise the funding costs.
This is supported by a daily cash pooling mechanism.
SES Annual Report 2008
77
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Liquidity risk is monitored on a weekly basis through a review of the drawn and issued amounts and the availability of additional
funding under credit lines or the Commercial Paper programme.
The table below summarises the projected contractual undiscounted cash flows based on the maturity profile of the group’s
interest-bearing loans and borrowings as at December 31.
Within
1 year
EUR million
Between
1 and 5 years
EUR million
After 5 years
EUR million
Total
EUR million
Maturity profile:
As at December 31, 2008
As at December 31, 2007
609.9
831.7
3,588.0
2,356.7
230.3
871.6
4,428.2
4,060.0
Foreign currency risk
The group’s balance sheet can be significantly impacted by movements in the U.S. dollar/euro exchange rate as the group has
significant operations whose functional currency is the U.S. dollar and liabilities denominated in U.S. dollar. To mitigate this exposure
the group enters into forward foreign exchange contracts to hedge the exposure on financial debt or on the net assets. The group
also has a corresponding exposure in the income statement. Approximately 37.8% (2007: 39.1%) of the group’s sales and 44.8%
(2007: 39.4%) of the group’s operating expenses are denominated in U.S. dollars. The group does not enter into any hedging
derivatives to cover this currency exposure.
The group uses forward currency contracts to eliminate or reduce the currency exposure on single deals, such as satellite
procurements, tailoring the maturities to each milestone payment. The forward contracts are in the same currency as the hedged
item and can cover up to 100% of the total value of the contract. It is the group’s policy not to enter into forward contracts
until a firm commitment is in place, and to match the terms of the hedge derivatives to those of the hedged item to maximise
effectiveness.
Cash flow hedges in relation to contracted commitments for capital expenditure
At December 31, 2008 and 2007, the group held numerous forward exchange contracts designated as hedges of future contracted
commitments to suppliers relating to satellite procurements. The forward currency contracts are used to hedge the foreign currency
risk on these commitments, with the terms of the forward currency contracts matching the milestone payment dates of the relevant
satellite procurement contracts.
The cash flow hedges were assessed to be highly effective and an unrealised loss of EUR 2.3 million (2007: unrealised loss of
EUR 1.8 million) net of deferred tax of EUR (0.2) million (2007: EUR 0.6 million) relating to the hedging instruments is included in
equity. During the year, EUR 0.1 million (2007: EUR 1.7 million) was removed from equity and included in the initial carrying value
of the acquired satellites. As at December 31, 2008 the fair value of the contracts amounted to a liability of EUR 2.8 million
(2007: a liability of EUR 0.5 million).
Set out below are the periods when the cash flows for the capital expenditure programme are expected to occur.
Within
1 year
USD million
Between
1 and 5 years
USD million
After
5 years
USD million
Total
USD million
As at December 31, 2008:
Cash outflows for procurement
Amount covered by cash flow hedges
307.7
252.4
180.8
–
–
–
488.5
252.4
As at December 31, 2007:
Cash outflows for procurement
Amount covered by cash flow hedges
110.1
14.7
53.8
–
–
–
163.9
14.7
SES Annual Report 2008
78
Hedge of investment in foreign operations
At the end of 2007 certain group borrowings and derivative instruments were designated as a hedge of the net investments
in SES AMERICOM, SES NEW SKIES, and SES Re International to hedge the group’s exposure to foreign exchange risk on
these investments.
December 31, 2007
USD million
USD balance sheet exposure:
SES AMERICOM
SES NEW SKIES
SES Re International Total
Hedged with:
Foreign exchange forward contracts
Private Placement
Bilateral borrowings
Total
3,400.0
943.0
360.0
4,703.0
Hedged proportion
64.6%
4,808.0
2,304.7
167.7
7,280.4
This designation was revoked in October 2008. To the date of revocation, an amount of EUR 142.8 million, net of tax of EUR 37.7
million, was recorded in equity in connection with these hedges.
Cash flow hedges in relation to U.S. dollar denominated borrowings
From October 2008 certain derivative instruments have been designated as cash flow hedges of the U.S. dollar liabilities of the
group, offsetting the exposure to foreign exchange risks on those liabilities.
December 31, 2008
USD million
December 31, 2007
USD million
USD debt exposure:
Bilateral borrowings
Private Placement
Total
360.0
885.7
1,245.7
–
–
–
Hedged with:
Foreign exchange forward contracts
Hedged proportion
1,245.0
100%
–
–
Gains or losses on the valuation of the forward foreign exchange contracts are recorded through the income statement to offset any
gains or losses on translation of the debts in the balance sheet. The inefficient portion of this hedging relationship in 2008 was nil. At
the year-end an amount of EUR 34.7 million is recorded as a liability under “Valuation of financial derivatives” in connection with this
cash flow hedge.
All the forward foreign exchange contracts mature within 3 months of the year end.
The following table demonstrates the sensitivity to a reasonably possible change in the U.S. dollar exchange rate on the nominal
amount of the group’s U.S. dollar borrowings, with all other variables held constant.
December 31 2008
Amount
in
USD million
Amount in euro at
closing rate of 1.39
EUR million
Amount in euro at rate of 1.42
EUR million
Amount in euro at
rate of 1.18
EUR million
Private Placement
Bilateral borrowings
Total
885.7
360.0
1,245.7
636.4
258.7
895.1
623.8
253.5
877.3
750.6
305.1
1,055.7
These changes would not have any impact on the income statement, as at December 31, 2008 the exchange movement is hedged
by forward currency contracts which exactly match the nominal values.
SES Annual Report 2008
79
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
December 31, 2007
Amount
in
USD million
Amount in euro at
closing rate of 1.4721
EUR million
Amount in euro at rate of 1.44
EUR million
Amount in euro at
rate of 1.50
EUR million
Private Placement
Bilateral borrowings
Total
943.0
360.0
1,303.0
640.6
244.5
885.1
654.9
250.0
904.9
628.7
240.0
868.7
These changes would not have any impact on the income statement, as at December 31, 2007 the exchange movement was taken
to reserves under the net investment hedge.
Interest rate risk
The group’s exposure to risk of changes in market interest rates relates primarily to the group’s floating rate borrowings. The group
carefully monitors the mix between fixed and floating rate debt and adjusts it from time to time following market conditions. The
group also uses interest rate swaps to help manage this mix. The terms of the hedge derivatives are negotiated to match the terms
of the hedged item to maximise hedge effectiveness.
The table below summarises the split of the nominal amount of the group’s debt between fixed and floating rate.
At fixed
rates
EUR million
At floating rates
EUR million
Total
EUR million
Excluding the impact of interest rate swaps:
Borrowings at December 31, 2008
Borrowings at December 31, 2007
2,007.0
2,323.2
1,911.0
1,109.5
3,918.0
3,432.7
Including the impact of interest rate swaps:
Borrowings at December 31, 2008
Borrowings at December 31, 2007
2,629.0
1,986.2
1,289.0
1,446.5
3,918.0
3,432.7
During the year the group reimbursed the EUR 500 million Eurobond (2007: EUR 300 million Eurobond) and two tranches of the U.S.
Private Placement – USD 57 million and GBP 4 million (2007: USD 57 million and GBP 4 million). Both were fixed rate obligations.
The average weighted interest rate in 2008 was 5.05% (2007: 4.90%).
Fair value hedges
In 2008 the group had two interest rate swap agreements maturing with an aggregate notional amount of EUR 500.0 million,
whereby the group received a fixed rate of interest of 4.5% annually and paid a variable rate quarterly equal to three-month
EURIBOR plus a margin on the notional amount. These swaps have been used to hedge the exposure to changes in the fair
value linked to interest rates of the EUR 500.0 million Eurobond 2008. The Eurobond and the swaps had the same specific terms
concerning notional amount, interest rate and maturity date of November 2008.
Cash flow hedges in relation to interest commitments under bilateral multi-currency credit facilities and syndicated loan
At December 31, 2008 the group had four interest rate swaps outstanding which were designated as hedges of expected future
interest expenses on a total of EUR 350 million of the syndicated loan, and EUR 100 million of the bilateral multi-currency facilities
– both floating rate debt.
At December 31, 2008 as in 2007, the group held four interest rate swaps which were designated as hedges of expected future
interest expenses on USD 240 million of the bilateral multi-currency facilities which are floating rate debt.
The cash flow hedges of the expected future interest expense arising in 2009 were assessed to be highly effective and as at
December 31, 2008 a net unrealised loss of EUR 19.7 million (2007: a net unrealised loss of EUR 4.0 million), stated net of deferred
tax of EUR 8.1 million (2007: EUR 1.8 million), is included in equity in respect of these hedge instruments. The ineffective portion of
this hedging relationship in 2008 was nil.
SES Annual Report 2008
80
Set out below are the periods when the cash flows for the interest rate payments on the bilateral multi-currency facilities and
syndicated loan are expected to occur.
Bilateral multi-currency facility (USD drawings)
As at December 31, 2008:
Cash outflows for interest payments (floating)
Cash inflows from interest rate swap (floating)
Cash outflows from interest rate swap (fixed)
Total
As at December 31, 2007:
Cash outflows for interest payments (floating)
Cash inflows from interest rate swap (floating)
Cash outflows from interest rate swap (fixed)
Total
Bilateral multi-currency facility (EUR drawings) and syndicated loan
As at December 31, 2008:
Cash outflows for interest payments
Cash inflows from interest rate swap (floating)
Cash outflows from interest rate swap (fixed) Total
Within
1 year
USD million
Between
1 and 5 years
USD million
After 5 years
USD million
Total
USD million
(5.8)
5.2
(12.4)
(13.0)
(1.8)
1.5
(4.9)
(5.2)
–
–
–
–
(7.6)
6.7
(17.3)
(18.2)
(11.3)
10.6
(12.5)
(13.2)
(14.3)
13.2
(18.8)
(19.9)
–
–
–
–
(25.6)
23.8
(31.3)
(33.1)
Within
1 year
EUR million
(21.6)
18.9
(19.1) (21.8)
Between
1 and 5 years
EUR million
(8.7)
7.0
(12.9)
(14.6)
After 5 years
EUR million
–
–
–
–
Total
EUR million
(30.3)
25.9
(32.0)
(36.4)
The following table demonstrates the sensitivity of the group’s pre-tax income to reasonably possible changes in interest rates
affecting the interest charged on the floating rate borrowings (after excluding those floating-rate borrowings swapped to fixed
through interest rate swaps). All other variables are held constant. The group believes that a reasonably possible development in
Euro-zone interest rates would be an increase of 25 basis points or decrease of 100 basis points (2007: an increase or decrease of
30 basis points). In the U.S. dollar zone the group does not consider a fall below current interest levels as likely but management
believes an increase of up to 50 basis points to be possible (2007: a fall of 100 basis points possible or increase of 50 basis points).
US dollar interest rates
Floating
Rate borrowings
USD million
Increase in rates Pre-tax impact
USD million
Decrease in rates
Pre-tax impact
USD million
Borrowings at December 31, 2008
Borrowings at December 31, 2007
120.0
120.0
(0.6)
(0.6)
–
1.2
Euro interest rates
Floating
Rate borrowings
EUR million
Increase in rates Pre-tax impact
EUR million
Decrease in rates
Pre-tax impact
EUR million
Borrowings at December 31, 2008
Borrowings at December 31, 2007
1,203.0
1,365.0
(3.0)
(4.1)
12.0
4.1
SES Annual Report 2008
81
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Credit risk
Customer credit risk
It is the group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monitored on an ongoing basis with the result that the group’s exposure to bad debts is historically not
significant. The carrying value of unprovided net debtors at December 31, 2008 is EUR 199.3 million (2007: EUR 156.6 million). The
group’s largest customers are substantial media companies and government agencies and the credit risk associated with these
contracts is assessed as low.
Aging of net trade debtors
Neither past
due nor
impaired
EUR million
Less
than 1 month
EUR million
Between
2 and 3
months
EUR million
More than 3
months
EUR million
Total
EUR million
102.8
106.8
43.2
12.5
33.3
17.6
20.0
19.7
199.3
156.6
2008
2007
Financial credit risk
With respect to the credit risk relating to financial assets (cash and cash equivalents, held for trading financial assets, loans
receivable and derivative instruments), this exposure relates to the potential default of the counterparty, with the maximum exposure
being equal to the carrying amount of these instruments. To mitigate this risk, the group only deals with recognised financial
institutions with a rating standard of not less than ‘A’. All counterparties are financial institutions which are regulated and controlled
by the federal financial supervisory authorities of the associated countries. Moreover to reduce this counterparty risk the portfolio
is diversified as regards the main counterparties ensuring a well-balanced relation for all categories of products (derivatives as well
as deposits).
Satellite in-orbit insurance
It is the group’s policy to retain part of the in-orbit insurance risk for the satellite fleet.
Capital management
The group’s policy is to attain, and retain, a stable BBB rating with Standard & Poors and Fitch, and a Baa2 rating with Moody’s. This
investment grade rating serves to maintain investors, creditors, rating agency and market confidence.
The group manages its capital structure and liquidity in order to reflect changes in economic conditions to keep its cost of debt low,
maintain the confidence of debt investors at a high level and to create added value for the shareholder.
Note 21 – AMC-14 programme termination
An anomaly during the launch of the AMC-14 satellite on March 15, 2008 resulted in the satellite being placed short of the planned
geostationary transfer orbit. The carrying value of the satellite was fully insured and a total-loss insurance claim was filed for which
all insurance proceeds had been received as at the balance sheet date. The carrying value of the satellite was fully impaired in
March 2008. The impact of this launch anomaly on the income and cash flows of the period are disclosed on the face of the financial
statements concerned.
AMC-14 programme termination income of EUR 130.3 million comprised EUR 97.6 million in insurance proceeds and EUR 32.7
million of non-refundable customer upfront payments.
Note 22 – Cash and cash equivalents
2008
EUR million
2007
EUR million
Cash at bank and in hand
Short-term deposits
144.2
291.3
435.5
175.1
22.0
197.1
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods
of between one day and three months depending on the immediate cash requirements of the group, and earn interest at the
respective short-term deposit rates.
SES Annual Report 2008
82
Note 23 – Issued capital and reserves
The company has share capital of EUR 624.4 million (2007: EUR 666.8 million), represented by Class A and Class B shares with
no par value. The movement between the opening and closing number of shares issued per class of share can be summarised
as follows:
As at January 1, 2008
Cancellation of A and B shares As at December 31, 2008
Class A
shares
355,582,270
(22,597,140)
332,985,130
Class B
shares
177,791,135
(11,298,570)
166,492,565
Total
shares
533,373,405
(33,895,710)
499,477,695
On June 26, 2008 the group cancelled 33,895,710 shares acquired in the framework of the share buyback programme.
FDRs with respect to Class A shares are listed on the Luxembourg Stock Exchange and on Euronext Paris. They can be traded freely
and are convertible into Class A shares at any time at the option of the holder under the conditions applicable in the company’s
articles of association and in accordance with the terms of the FDRs.
All Class B shares are currently held by the State of Luxembourg, or by Luxembourg public institutions. Dividends paid for one share
of Class B equal 40% of the dividend for one share of Class A.
A shareholder or a potential shareholder who envisages to acquire by whatever means, directly or indirectly, more than 20%, 33%
or 50% of the shares of the company (a “Demanding Party”) must inform the Chairperson of the Board of the company of such
intention. The Chairperson of the Board shall forthwith inform the government of Luxembourg of the envisaged acquisition which
may be opposed by the government within three months from such information should the government determine that such
acquisition would be against the general public interest. In case of no opposition from the government, the Board shall convene
an Extraordinary Meeting of Shareholders which may decide at a majority provided for in article 67-1 of the law of 10 August 1915,
as amended, regarding commercial companies, to authorise the Demanding Party to acquire more than 20%, 33% or 50% of the
shares. If the Demanding Party is a shareholder of the company, it may attend the general meeting and will be included in the count
for the quorum but may not take part in the vote.
SES has, in agreement with the shareholders, purchased Fiduciary Deposit Receipts in respect of Class A shares for use in
connection with executives’ and employees’ option schemes as well as for cancellation. At the year-end, the company held FDRs
in connection with the above schemes as set out below. These FDRs are disclosed as treasury shares in the balance sheet and are
carried at their historic cost to the group.
2008
2007
FDRs held as at December 31
Carrying value of FDRs held (EUR million)
8,806,195
108.4
15,549,313
213.7
In accordance with Luxembourg legal requirements, a minimum of 5% of the yearly net profit (statutory) is transferred to a legal
reserve from which a distribution is restricted. This requirement is satisfied when the reserve reaches 10% of the issued share
capital. As at December 31, 2008 an amount of EUR 66.7 million (2007: EUR 69.2 million) is included within other reserves. Other
reserves include a further undistributable amount of EUR 301.5 million (2007: EUR 222.7 million).
Note 24 – Share-based payment plans
The group has four share-based payment plans, the details of which are as follows. In the case of schemes 2, 3 and 4 the relevant
strike price is defined as the average of the market price of the underlying shares at the time of the grant.
1. IPO plan
The IPO plan is an equity-settled scheme which was open to members of staff working for SES ASTRA S.A. at the time of its IPO on
the Luxembourg Stock Exchange in 1998. Employees were granted options to acquire shares at a fixed price of EUR 12.64. In 2005,
the exercise period of this plan was extended to June 30, 2013. All such options were vested as at December 31, 2005.
2008
2007
Outstanding options at the end of the year
Weighted average exercise price in EUR
975,321
12.64
1,015,671
12.64
SES Annual Report 2008
83
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
2. The stock appreciation rights plan (‘STAR plan’)
The STAR plan, initiated in 2000, is a scheme available to non-executive staff of controlled group subsidiaries. Under the plan
employees are granted rights to receive remuneration payments reflecting the movement of the share price in relation to the strike
price. A third of the STAR plan rights vest each year over a three-year period and the rights have a two-year exercise period once
fully vested.
Until 2005 the STAR plan was structured as a cash-settled scheme. The options granted before 2006 and not exercised are set
out below:
2008
2007
Outstanding options at the end of the year
455,919
681,217
8.96
8.29
Weighted average exercise price in EUR
In 2006 the STAR plan was converted into an equity-settled scheme. The options granted since 2006, and not exercised, are set
out below:
2008
2007
Outstanding options at the end of the year
Weighted average exercise price in EUR
2,204,934
14.31
1,495,305
14.12
3. Executive incentive compensation plan (‘EICP’)
The EICP, initiated in 2002, is available to group executives. Under the plan, options are granted with an effective date of January 1.
One quarter of the entitlement vests on each anniversary date of the original grant. Once vested, the options can be exercised
until the tenth anniversary of the original grant.
2008
2007
Outstanding options at the end of the year
Weighted average exercise price in EUR
6,715,506
12.63
5,587,472
11.70
4. Long-term incentive programme (‘LTI’)
The LTI programme, initiated in 2005, is also a programme for executives and senior executives of the group. Under the scheme,
restricted shares are allocated to executives on July 1 and these vest on the third anniversary of the grant. Senior executives may
further be allocated performance shares whose granting is dependent on the achievement of defined performance criteria. Where
these criteria are met, the shares vest on the third anniversary of the original grant.
2008
2007
Restricted and performance shares granted at the end of the year
Weighted average fair value in EUR
697,311
13.09
711,016
12.12
The fair value of equity-settled share options granted is estimated as at the date of grant using a binomial model, taking into account
the terms and conditions upon which the options were granted. The following table lists the average value of inputs to the model
used for the years ended December 31, 2008, and December 31, 2007.
2008
2007
Dividend yield (%)
Expected volatility (%)
Historic volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Weighted average share price (EUR)
3.61
27.83
27.83
4.24
5
15.2
2.17
26.33
26.33
4.09
5
15.48
The expected life of options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The
expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may or may not necessarily
be the actual outcome.
SES Annual Report 2008
84
The fair value of the cash-settled options is measured at the grant date using a binomial model which takes into account the terms
and conditions upon which the instruments were granted. The services received, and a liability to pay for those services, are
recognised over the expected vesting period. Until the liability is settled it is remeasured at each reporting date with changes in fair
value recognised in the income statement.
The carrying amount of the liability relating to the cash-settled options at December 31, 2008 is EUR 2.3 million (2007: EUR 4.0
million). The total charge for the period for share-based compensation payments amounted to EUR 1.8 million (2007: EUR 6.7 million).
Note 25 – Interest-bearing loans and borrowings
As at December 31, 2008 and 2007, the group’s interest-bearing loans and borrowings were:
Effective interest rate
Maturity
Amounts
outstanding
2008
EUR million Non-current
U.S. Private Placement
Series A USD 400 million
5.74%
September 2013
161.9
Series B USD 513 million
5.82%
September 2015
367.4
Series C USD 87 million
5.63%
September 2015
62.9
Series D GBP 28 million
5.63%
September 2013
16.8
Eurobond 2009 (EUR 300 million)
Euribor + 0.25 %
October 2009
–
Eurobond 2013 (EUR 500 million)
4.375%
October 2013
499.8
Eurobond 2011 (EUR 650 million)
4.00%
March 2011
649.1
Bilateral multi-currency
credit facilitiesEuribor/Libor + 0.265%
May 2010
1,046.2
Bilateral (EUR 100 million) issued
under EMTN
Euribor + 0.6%
October 2010
100.0
Syndicated loan
Euribor + 0.6%
May 2010
373.0
German bond (EUR 100 million), non-listed
5.75%
November 2012
99.5
German bond (EUR 100 million), non-listed
6.00%
November 2012
99.4
3,476.0
Current
U.S. Private Placement
Series A USD 400 million
5.74%
September 2009
41.1
Series D GBP 28 million
5.63%
September 2009
4.2
Eurobond 2008 (EUR 500 million)
4.54%
November 2008
–
Eurobond 2009 (EUR 300 million)
Euribor + 0.25%
October 2009
300.0
Uncommitted loans
5.18%
February 2009
90.0
435.3
Amounts
outstanding
2007
EUR million
190.8
348.0
59.5
27.3
299.9
497.9
648.1
694.5
–
–
–
–
2,766.0
38.8
5.4
489.8
–
115.0
649.0
US Private Placement
On September 30, 2003, the group issued in the U.S. Private Placement market four series of unsecured notes amounting to USD
1,000.0 million and GBP 28.0 million. These notes comprised:
1. Series A USD 400.0 million of 5.29% Senior Notes due September 2013, amortising as of September 2007.
2. Series B USD 513.0 million of 5.83% Senior Notes due September 2015, amortising as of September 2011.
3. Series C USD 87.0 million of 5.93% Senior Notes due September 2015.
4. Series D GBP 28.0 million of 5.63% Senior Notes due September 2013, amortising as of September 2007.
On these four series, the group pays interest semi-annually. SES is committed under the U.S. Private Placement to maintaining a
number of financial covenants requiring certain financial ratios to be maintained within agreed limits in order to provide sufficient
security to the lenders. Of these, the covenant which management monitors the most actively is the requirement to maintain the
net debt/EBITDA ratio at a level of 3.5 or below.
SES Annual Report 2008
85
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
EUR 500.0 million Eurobond
On November 19, 2003, SES issued a Eurobond for the purpose of repayment of all outstanding amounts under the syndicated
multi-currency term and revolving facilities agreement dated March 28, 2001. The bond was for a nominal amount of EUR 500 million
with a coupon of 4.50% and was settled at its maturity date of November 19, 2008.
Bilateral multi currency facilities
On December 31, 2008 and 2007, SES had unsecured bilateral multi-currency revolving credit facilities in place with eleven banks for
a total of EUR 1,075.0 million with a weighted average maturity of May 2010, of which EUR 1,046.2 million (2007: EUR 694.5 million)
was drawn as at the year-end. These bilateral facilities are available to both SES and SES GLOBAL-Americas Holdings GP.
Commercial Paper Programme
On October 25, 2005, SES put in place a EUR 500.0 million ‘Programme de Titres de Créances Négociables’ in the French market
where the company issued ‘Billets de Trésorerie’ (Commercial Paper) in accordance with articles L.213-1 to L213-4 of the French
Monetary and Financial Code and decree n°92.137 of February 13, 1992 and all subsequent regulations. The maximum outstanding
amount of ‘Billets de Trésorerie’ issued under the programme is EUR 500.0 million or its counter value at the date of issue in any
other authorised currencies. On May 11, 2008, this programme was extended for one further year. As of December 31, 2008 and
2007 there were no borrowings outstanding under this programme.
European Medium-Term Note Programme (EMTN)
On December 6, 2005 SES put in place a EUR 2,000 million EMTN enabling SES, or SES GLOBAL-Americas Holdings GP, to issue as
and when required notes up to a maximum aggregate amount of EUR 2,000 million. In May 2007, this programme was increased to
an aggregate amount of EUR 4,000 million. As at December 31, 2008, SES had issued EUR 1,550 million (2007: EUR 1,450 million)
under the EMTN programme with maturities ranging from 2009 – 2013.
Syndicated EUR 550.0 million revolving credit facility
On May 20, 2008, the group signed a syndicated EUR 550.0 million revolving credit facility. The floating rate facility is for general
corporate purposes and has been structured as a two year multi-currency revolving credit facility with a one year extension option at
the discretion of the lenders. As at December 31, 2008 SES had issued EUR 375.0 million under this revolving credit facility. In the
event that there is a breach of the financial covenants applying to the drawings under the Private Placement, the group is required to
renegotiate the terms of the syndicated loan with the lenders.
German Bond issue of EUR 200.0 million
On May 21, 2008 the group also concluded an agreement to issue EUR 200.0 million in two equal tranches in the German Bond
(“Schuldschein”) market. The agreement for the first tranche was signed on May 30, 2008 with the funds being drawn down in June.
The agreement for the second tranche was signed on July 14, 2008 with the funds being drawn down in July. The whole issue bears
interest at a fixed rate and matures in November 2012.
Note 26 – Provisions and deferred income
As at January 1, 2008
Decrease in provisions
Movement on deferred income
As at December 31, 2008
Provisions
EUR million
Deferred income EUR million
74.6
(9.5)
–
65.1
260.6
–
18.7
279.3
Total
EUR million
335.2
(9.5)
18.7
344.4
Provisions relate primarily to liabilities arising for withholding taxes, for post-retirement benefit schemes and other items arising in
the normal course of business.
The group provides pension benefits to members of staff, which are generally established as defined contribution schemes. Within
the group there is one defined benefit scheme for which an actuarial valuation has been performed and a provision for EUR 12.9
million (2007: EUR 11.9 million) included in the consolidated financial statements.
At SES AMERICOM and SES ENGINEERING U.S. certain employees benefit from a post-retirement health benefits programme
which is externally insured. As at December 31, 2008, accrued premiums of EUR 7.9 million (2007: EUR 6.8 million) are included in
this position.
Contributions made in 2008 to group pension schemes totalled EUR 7.1 million (2007: EUR 7.1 million).
SES Annual Report 2008
86
Note 27 – Trade and other payables
2008
EUR million
2007
EUR million
Trade creditors
Payments received in advance
Interest on loans
Personnel-related liabilities
Tax liabilities other than for income tax
Other liabilities
Total
217.2
77.3
53.9
17.7
4.7
89.7
460.5
132.6
48.4
48.1
24.8
2.5
28.5
284.9
Note 28 – Commitments and contingencies
Capital commitments
The group had outstanding commitments in respect of contracted capital expenditure totalling EUR 996.7 million at December 31,
2008 (2007: EUR 659.7 million). These commitments largely reflect the purchase and launch of future satellites for the expansion
and replacement of the group satellite system, together with the necessary expansion of the associated ground station and control
facilities. In the case of termination by the group of these contracts, contractual penalty provisions apply.
Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases are as follows as at December 31:
2008
EUR million 2007
EUR million
Within one year
After one year but not more than five years
More than five years
Total
10.1
19.7
2.8
32.6
7.7
19.0
6.3
33.0
Commitments under transponder service agreements
The group has entered into transponder service agreements for the purchase of satellite capacity from third parties under contracts
with a maximum life of eight years. The commitment arising under these agreements as at December 31 is as follows:
2008
EUR million 2007
EUR million
Within one year
After one year but not more than five years
After more than five years
Total
46.9
140.6
2.3
189.8
49.4
136.2
26.8
212.4
Litigation
There were no significant litigation claims against the group as of December 31, 2008.
Guarantees
On December 31, 2008 and 2007, the group had outstanding bank guarantees for an amount of EUR 11.3 million. This relates to
performance guarantees for services of satellite operations.
Restrictions on use of cash
At the year-end, there were no restricted cash balances (2007: nil).
SES Annual Report 2008
87
Consolidated financial statements
Notes to the consolidated financial statements
December 31, 2008
Note 29 – Related parties
The state of Luxembourg holds a direct 11.58% voting interest in the company and two indirect interests, both of 10.88%, through
two state owned banks, Banque et Caisse d’Epargne de l’Etat and Société Nationale de Crédit et d’Investissement. These shares
constitute the company’s Class B shares, which are described in more detail in Note 23.
The total payments to directors for attendance at board and committee meetings in 2008 amounted to EUR 1.2 million (2007: EUR
0.9 million). These payments are computed on a fixed and variable basis, the variable part being based upon attendance at board and
committee meetings.
There were no other significant transactions with related parties.
The key management of the group, defined as the group’s Executive Committee, received compensation as follows:
2008
EUR million 2007
EUR million
Short-term employee benefits, pension and medical benefits
Share-based payments
Total
6.3
2.1
8.4
4.3
–
4.3
Total share-based payment instruments allocated to key management as at December 31, 2008 were 1,726,360 (2007: 1,652,752).
Note 30 – Events after the balance sheet date
On January 16, the group announced that its satellite ASTRA 5A, the former SIRIUS 2 operating at 31.5 degrees East, had
experienced a technical anomaly leading to the end of the spacecraft’s mission. The book value of the satellite was already fully
depreciated as at December 31, 2008.
SES Annual Report 2008
88
SES S.A. annual accounts
Report of the independent auditor
To the shareholders of
SES Société Anonyme
Betzdorf
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
audit opinion.
Report on the annual accounts
Following our appointment by the General Meeting of the
shareholders dated April 3, 2008, we have audited the
accompanying annual accounts of SES, which comprise the
balance sheet as at December 31, 2008 and the profit and
loss account for the year then ended, and a summary of
significant accounting policies and other explanatory notes.
Opinion
In our opinion, the annual accounts give a true and fair view
of the financial position of SES as of December 31, 2008,
and of the results of its operations for the year then ended
in accordance with the Luxembourg legal and regulatory
requirements relating to the preparation and presentation
of the annual accounts.
Board of Directors’ responsibility for the annual accounts
The Board of Directors is responsible for the preparation and
fair presentation of these annual accounts in accordance with
the Luxembourg legal and regulatory requirements relating
to the preparation of the annual accounts. This responsibility
includes: designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of
annual accounts that are free from material misstatement,
whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Report on other legal and regulatory requirements
The management report, which is the responsibility of the
Board of Directors, is consistent with the annual accounts.
ERNST & YOUNG
Société Anonyme
Réviseur d’Entreprises
Thierry BERTRAND
February 12, 2009
Responsibility of the ‘réviseur d’entreprises’
Our responsibility is to express an opinion on these annual
accounts based on our audit. We conducted our audit in
accordance with International Standards on Auditing as
adopted by the ‘Institut des Réviseurs d’Entreprises’. Those
standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable
assurance whether the annual accounts are free from
material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the annual
accounts. The procedures selected depend on the judgement
of the ‘réviseur d’entreprises’, including the assessment
of the risks of material misstatement of the annual
accounts, whether due to fraud or error. In making those
risk assessments, the ‘réviseur d’entreprises’ considers
internal control relevant to the entity’s preparation and fair
presentation of the annual accounts in order to design audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control.
An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of
accounting estimates made by the Board of Directors,
as well as evaluating the overall presentation of the
annual accounts.
SES Annual Report 2008
89
SES S.A. annual accounts
Balance sheet
As at December 31, 2008
Assets
Note
2008
EUR million
2007
EUR million
Intangible assets 3
Tangible assets
4
Other fixtures and fittings, tools and equipment
Payments on accounts and tangible assets in course of construction
Financial assets
5
Shares in affiliated undertakings 6
Loans to affiliated undertakings 7
Securities held as fixed assets 0.1
0.1
0.5
2.0
2.5
1.0
0.4
1.4
8,332.4
720.2
107.2
9,159.8
9,677.6
548.5
213.8
10,439.9
1,561.1
1.2
658.8
16.0
250.8
1,813.1
59.0
733.8
4.5
4.3
10,980.0
11,179.5
624.4
746.3
66.7
87.8
46.6
694.9
2,266.7
666.8
1,140.7
69.2
154.8
46.6
186.5
2,264.6
2,193.4
1,421.2
287.4
3,902.0
2,248.8
694.5
–
2,943.3
355.4
90.3
1.7
4,268.6
555.4
115.0
1.0
5,130.2
39.1
0.1
56.1
4,811.3
116.2
0.1
53.7
5,971.6
10,980.0
11,179.5
Current assets
Debtors (becoming due and payable within one year)
8
Amounts owed by affiliated undertakings Other debtors
Cash at bank and in hand
Prepayments
Total assets
Liabilities
Capital and reserves
9
Subscribed capital Share premium
10
Legal reserve Other reserves Results brought forward
Result for the financial year
Creditors
Amounts becoming due and payable after more than one year
11
Notes and bonds 12
Amounts owed to credit institutions 13
Amounts owed to affiliated undertakings Amounts becoming due and payable within one year
11
Notes and bonds 12
Amounts owed to credit institutions Trade creditors
13
Amounts owed to affiliated undertakings Tax and social security debt 14
Tax debts Social security debts
Other creditors
Total liabilities
SES Annual Report 2008
90
Profit and loss account
For the year ended December 31, 2008
Charges
Note
2008
EUR million
2007
EUR million
External charges 16
25.8
25.9
15
10.3
10.0
Staff costs 3, 4
0.7
0.4
Depreciation and amortisation 3.0
2.8
Other operating charges
5
3.3
–
Value adjustments in respect of financial assets Interest payable and similar charges
172.0
163.6
concerning affiliated undertakings
17
199.4
141.4
other interest payable and similar charges 14
(103.2)
(79.9)
Taxes on profit Profit for the financial year
694.9
186.5
1,006.2
450.7
Income
16
11.0
–
Net turnover 18
4.5
7.9
Other operating income 19
916.2
378.9
Income from participating interests derived from affiliatedundertakings 5, 7
–
7.7
Reversal of value adjustment in respect of financial assets Income from other transferable securitiesand from loans forming part
of the fixed assets
17.1
3.3
Other interest receivable and similar income
49.2
35.3
derived from affiliated undertakings
20
8.2
17.6
other interest receivable and similar income 1,006.2
450.7
Statement of changes in shareholders’ equity
Year ended December 31, 2008
Subscribed Share Legal Other
capital premium
reserve
reserves
EUR million
EUR million
EUR million
EUR million
Balance, beginning
of the year
Allocation of result
Distribution of dividends
Cancellation of
shares (Notes 7, 9)
Profit for the financial year
Balance, end of the year
SES Annual Report 2008
Results
brought
forward
EUR million
Result for
the year
EUR million
Total
EUR million
666.8
–
–
1,140.7
–
–
69.2
(2.5)
–
154.8
189.0
(256.0)
46.6
–
–
186.5
(186.5)
–
2,264.6
–
(256.0)
(42.4)
–
624.4
(394.4)
–
746.3
–
–
66.7
–
–
87.8
–
–
46.6
–
694.9
694.9
(436.8)
694.9
2,266.7
91
SES S.A. annual accounts
Notes to the accounts
December 31, 2008
Note 1 – General
SES S.A. (previously SES GLOBAL S.A.) was incorporated on March 16, 2001 as a limited liability company (Société Anonyme) under
the law of the Grand Duchy of Luxembourg for an unlimited period of time.
The purpose of SES (the “company”) is to take generally any interest whatsoever in electronic media and to be active, more
particularly, in the communications area via satellites and to invest, directly or indirectly, in other companies that are actively involved
in the satellite communication industry.
The accounting period of the company is from January 1 to December 31.
The company has a 99.94% interest in a partnership, SES GLOBAL-Americas Holdings GP, whose accounts are integrated in those
of the company to the level of its share of the partnership.
In December 2007, the company merged with its 100% owned subsidiary SES Europe S.A.
Note 2 – Significant accounting policies
In accordance with Luxembourg legal and regulatory requirements, consolidated accounts are prepared.
The annual accounts are prepared in accordance with the generally accepted accounting principles and regulations in force in the
Grand Duchy of Luxembourg.
Formation expenses
The costs of formation of the company and the costs related to the increases in issued share capital are capitalised and amortised
over a period of up to five years.
Intangible assets
Development costs:
Development expenditure incurred on an individual project is carried forward when its future recoverability can be regarded as
assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project.
Payments on account:
Amounts payable in respect of development costs are included in the balance sheet when incurred. When the project is complete,
the expenditure is transferred to assets in use and amortisation commences.
Tangible assets
Other fixtures, fittings, tools and equipment:
All such items are depreciated evenly over the estimated useful lives, which are ten years or less.
Assets in course of construction:
Amounts payable in respect of the purchase of future assets are included in the balance sheet when billed. The expenditure is
transferred to assets in use and depreciation of the asset commences when it is put into service.
Financial assets
Financial assets are carried in the balance sheet at cost of purchase. If this valuation would appear to be excessive and reduction to
be permanent, such assets would be written down to their realisable value.
Loan origination costs
Loan origination costs are capitalised and included in prepaid expenses. These costs are amortised over remaining estimated loan
periods based on the company’s financing strategy.
SES Annual Report 2008
92
Dividends
Dividends are declared after the accounts for the year have been approved. Accordingly dividends payable are recorded in the
subsequent year’s accounts. Dividends receivable from affiliated undertakings are recorded as income in the year in which they are
declared by the subsidiary.
Convertible profit participating loan
Returns on convertible profit participating loans (“PPL”) issued by the company are calculated based on the cumulative profits of the
PPL recipient over the life of the loan. The company’s entitlement to the return is therefore only certain at the date of maturity of the
loan. The return is therefore recorded as income on final maturity of the PPL.
Translation of foreign currencies
The company maintains its accounting records in euro (EUR) and the annual accounts are expressed in that currency.
The costs of tangible and intangible assets are translated at the historical rate. Long-term financial liabilities, which are hedged by
financial derivatives, are translated at historical rate. Long-term intercompany balances are translated at the balance sheet exchange
rate unless this would give rise to an unrealised foreign exchange gain in which case the historical exchange rate is used.
Current assets and current liabilities denominated in foreign currencies are translated into euro at the balance sheet exchange rate.
Income and charges expressed in other currencies are recorded on the basis of the exchange rates prevailing on the transaction dates.
The resultant exchange gains and losses arising from the application of the above principles are reflected in the profit and loss account.
Financial derivatives
The company enters into financial derivatives for hedging purposes. All financial derivatives are maintained off balance sheet. Gains
and losses realised on the settlement of such derivatives are taken to the profit & loss account at the same time as the hedged
asset/liability impacts the profit & loss account.
Premiums paid/received on financial derivatives are taken to the profit & loss account over the term of the financial derivative.
Net turnover
All amounts received from customers under contracts for rental of satellite transponder capacity are recognised, at the fair value
of the consideration received or receivable, over the duration of the respective contracts on a straight-line basis. Payments received
in advance are deferred and included in the balance sheet as deferred income. Payments of receivables in arrears are accrued and
included in trade debtors.
SES Annual Report 2008
93
SES S.A. annual accounts
Notes to the accounts
December 31, 2008
Note 3 – Intangible assets
2008
EUR million
Cost at beginning of year
Additions
Write-off
Cost at end of year
Accumulated amortisation at beginning of year
Write-off Accumulated amortisation at end of year Net book value at beginning of year
Net book value at end of year
0.1
–
–
0.1
–
–
–
0.1
0.1
2007
EUR million
4.9
0.1
(4.9)
0.1
(4.9)
4.9
–
–
0.1
Note 4 – Tangible assets
The development of tangible assets during the financial years 2008 and 2007 is as follows:
Other fixtures and fittings, tools
and equipment
EUR million
Payments on account
and tangible assets in course of construction
EUR million
Cost at beginning of year
Accumulated depreciation at beginning of year
Net book value at beginning of year
Movements of the year
Additions
Incorporation of assets via merger
2.6
(1.6)
1.0
0.4
–
0.4
3.0
(1.6)
1.4
1.8
(1.1)
0.7
0.2
–
1.6
–
1.8
–
1.0
0.2
Depreciation
Incorporation of accumulated depreciation via merger
Cost at end of year
Accumulated depreciation at end of year
Net book value at end of year
(0.7)
–
2.8
(2.3)
0.5
–
–
2.0
–
2.0
(0.7)
–
4.8
(2.3)
2.5
(0.4)
(0.1)
3.0
(1.6)
1.4
Total
2008
EUR million
Total
2007
EUR million
Note 5 – Shares in affiliated undertakings
2008
EUR million
2007
EUR million
Cost at beginning of year
Additions
Additions received via merger
Repayment of initial investment
Disposals
Cost at end of year
9,682.3
180.2
–
(1,343.4)
(182.0)
9,269.9
317.6
218.0
–
(123.2)
8,337.1
9,682.3
Value adjustments at beginning of year
Value adjustment of the year
Reversal of value adjustments
Reversal of value adjustments on disposals
Value adjustments at end of year
(4.7)
3.3
–
(3.3)
(39.0)
–
6.7
27.6
(4.7)
(4.7)
Net book value at end of year
SES Annual Report 2008
94
8,332.4
9,677.6
As at December 31, 2008, the company holds the following investments:
Participation
SES ASTRA S.A., Betzdorf, Luxembourg
100% SES GLOBAL-Americas, Inc., Princeton, United States
99.94%
ASTRA Broadband Services S.A., Betzdorf, Luxembourg
0.01%
SES GLOBAL-Americas Finance Inc, Delaware, United States
100%
SES SIRIUS A.B., Stockholm, Sweden
32.34%
SES Participations S.A., Betzdorf, Luxembourg 100%
SES GLOBAL Africa S.A., Betzdorf, Luxembourg
100%
SES Finance S.à r.l., Switzerland 100%
SES Holdings (Netherlands) B.V., Netherlands
100%
Betzdorf Holdings Ltd, Dublin, Ireland
100%
SES GLOBAL (Gibraltar) Ltd, Gibraltar
100%
SES ASTRA Services Europe S.A., Betzdorf, Luxembourg
100%
SES ASTRA TechCom Belgium S.A.,Belgium
1%
SES Latin America S.A., Betzdorf, Luxembourg
100%
Net book value
(EUR million)
1,046.8
3,931.8
–
–
50.1
206.8
406.6
1,211.1
1,359.2
–
–
120.0
–
–
8,332.4
In June 2008, the company subscribed 142,921,600 newly issued shares of SES ASTRA Services Europe S.A., with a nominal value
of EUR 1.25 each, through a contribution of its 100% shareholding in SES Digital Distribution Services S.à r.l. The company incurred
a loss of EUR 3.3 million on this contribution.
In November 2008, SES ASTRA Services Europe S.A. reduced its share capital without cancellation of shares. This resulted in a
reimbursement of initial investment of EUR 98.0 million to the company.
An Extraordinary General Meeting of SES ASTRA S.A., held on December 19, 2008, decided to reduce the share capital of the
company by EUR 100.0 million, thereby resulting in a reimbursement of initial investment of EUR 722.1 million to the company.
On December 28, 2008, SES GLOBAL-Americas Inc. decided to reimburse EUR 523.3 million of paid-in capital.
In February 2007 the company contributed to a capital increase in SES Finance S.à r.l. through a contribution in kind of an
intercompany loan with SES Holdings (Netherlands) B.V., for a total amount of USD 415.3 million (EUR 315.4 million).
In December 2007, the company merged with SES Europe S.A. and as a result acquired a 100% direct participation in SES ASTRA
Services Europe S.A., SES ASTRA TechCom S.A. and SES Digital Distribution Services S.à r.l.. A gain of EUR 128.0 million arose on
this merger (Note 19).
Art. 65 paragraph (1) 2º of the law of December 19, 2002 on the register of commerce and companies and the accounting and
annual accounts of undertakings (the “law”) requires the disclosure of the amount of capital and reserves and profit and loss for
the last financial year of each affiliated undertaking. In conformity with Art.67 (3) of the law these details have been omitted as the
company prepares consolidated accounts and these consolidated accounts and the related consolidated annual report and auditors’
report thereon have been lodged with the Luxembourg Trade Registry.
Note 6 – Loans to affiliated undertakings
Loans to affiliated undertakings of EUR 720.2 million (2007: EUR 548.5 million) consist of Convertible Profit Participating Loans with
SES Finance S.à r.l.
On February 1, 2007 SES granted a Convertible Profit Participating Loan amounting to USD 807.4 million (2008: EUR 580.2 million;
2007: EUR 548.5 million). A further loan of EUR 140.0 million was granted on November 28, 2008.
SES Annual Report 2008
95
SES S.A. annual accounts
Notes to the accounts
December 31, 2008
Note 7 – Securities held as fixed assets
2008
EUR million
2007
EUR million
Cost at beginning of year
Value adjustments at beginning of year
Net book value at beginning of year
Movements of the year
Purchase of FDRs/own shares
Cancellation of own shares (Note 9)
Used in connection with employee option scheme
Reversal of value adjustments
213.8
–
213.8
83.6
(1.0)
82.6
336.8
(436.8)
(6.6)
–
139.3
–
(9.1)
1.0
Cost at end of year
Value adjustments at end of year
Net book value at end of year
107.2
–
107.2
213.8
–
213.8
Own Fiduciary Deposit Receipts:
All Fiduciary Deposit Receipts (“FDRs”) in respect of Class A shares owned by the company are for use in connection with the
senior executives, executives and employees option schemes operated by the group. These shares are valued at the lower of cost
and market value.
As at December 31, 2008, the company owns 8,806,195 FDRs (2007: 15,549,313) (Note 9).
Note 8 – Amounts owed by affiliated undertakings
Amounts owed by affiliated undertakings of EUR 1,561.1 million (2007: EUR 658.8 million) consist of the following:
2008
EUR million
2007
EUR million
Current accounts
1,561.1
1,561.1
658.8
658.8
As at December 31, 2008 current accounts represent short-term advances bearing interest at market rates and consist principally of
amounts owed by SES ASTRA S.A., SES ASTRA 1L S.à r.l., SES ASTRA Services Europe S.A., SES ASTRA 1M S.à r.l. and SES ASTRA
3B S.à r.l.
Note 9 – Subscribed capital
On April 5, 2007, the Board of Directors resolved to re-purchase the entire Class C shares for a total acquisition price of
EUR 1,288.9 million. Following their acquisition, it was resolved to convert 17,191,650 of the acquired shares into Class A shares and
subsequently into FDRs and to cancel the remainder of the Class C shares (85,958,250) through a capital reduction. The Board of
Directors then re-purchased 42,979,125 Class B shares in exchange for the 17,191,650 FRDs referred to above. The re-purchased
B shares were subsequently cancelled.
s at December 31, 2007 the issued and fully paid share capital amounted to EUR 666.8 million, represented by 533,373,405 shares
A
with no par value (355,582,270 Class A ordinary shares and 177,791,135 Class B ordinary shares).
n June 26, 2008 an Extraordinary General Meeting of Shareholders of the company decided to cancel 33,895,710 of own shares by
O
cancelling 22,597,140 FDRs held by the company and by re-purchasing 11,298,570 Class B shares in exchange for 4,519,428 FDRs.
The re-purchased Class B shares were subsequently cancelled.
s at December 31, 2008 the issued and fully paid share capital amounted to EUR 624.4 million, represented by 499,477,695 shares
A
with no par value (332,985,130 Class A ordinary shares and 166,492,565 Class B ordinary shares).
SES Annual Report 2008
96
Note 10 – Legal reserve
In accordance with Luxembourg legal requirements, a minimum of 5% of the yearly net profit is transferred to a legal reserve from
which distribution is restricted. This requirement is satisfied when the reserve reaches 10% of the issued share capital.
Note 11 – Notes and bonds
U.S. Private Placement
On September 30, 2003, SES, through SES GLOBAL-Americas Holdings GP, issued in the U.S. Private Placement market four series
of unsecured Notes amounting to USD 1,000.0 million and GBP 28.0 million. The U.S. Private Placement was made up of four series
as follows:
1. Series A – USD 400.0 million of 5.29% Senior Notes due September 2013, amortising as of September 2007
2. Series B – USD 513.0 million of 5.83% Senior Notes due September 2015, amortising as of September 2011
3. Series C – USD 87.0 million of 5.93% Senior Notes due September 2015
4. Series D – GBP 28.0 million of 5.63% Senior Notes due September 2013, amortising as of September 2007.
SES is committed under the U.S. Private Placement to maintaining a number of financial covenants requiring certain financial ratios
to be maintained within agreed limits in order to provide sufficient security to lenders. These financial ratios are based on the
consolidated financial statements of SES S.A..
EUR 500.0 million Eurobond
On November 19, 2003, SES issued a Eurobond for the purpose of repaying all outstanding amounts due under the syndicated multicurrency term and revolving facilities agreement dated March 28, 2001. The issuance was for a nominal amount of EUR 500.0 million
with a coupon of 4.50% and was settled at its maturity date of November 19, 2008.
EUR 2,000.0 million European Medium Term Note Programme
On December 6, 2005, SES set up a EUR 2,000.0 million European Medium Term Note Programme (“EMTN”) with nine banks
as agents enabling the company or its partnership to issue, on a continuous basis, notes up to a maximum aggregate amount
of EUR 2,000.0 million for general corporate purposes. In May 2007, this programme was increased to an aggregate amount of
EUR 4,000.0 million. On September 30, 2008, this programme was expanded to include 11 banks as agents. As at December 31, 2008,
4 notes (2007: 3) were issued under this programme with the following terms and conditions:
– EUR 650.0 million European Medium Term Note
On March 15, 2006, SES issued a note in order to finance the acquisition of SES NEW SKIES Satellites B.V. The issuance was for
a nominal amount of EUR 650.0 million with a coupon of 4% and a final maturity of March 15, 2011.
– EUR 500.0 million European Medium Term Note
On October 20, 2006, SES issued a note for general refinancing purposes. The issuance was for a nominal amount of EUR 500.0
million with a coupon of 4.375% and a final maturity of October 21, 2013.
– EUR 300.0 million European Medium Term Note
On October 20, 2006, the company issued a note for general refinancing purposes for a nominal amount of EUR 300.0 million with
a floating rate of 3 month Euribor plus a margin of 0.25% and a final maturity of October 20, 2009.
– EUR 100.0 million Guaranteed Floating Rate Note
On October 20, 2008, the company issued a note for general refinancing purposes for a nominal amount of EUR 100.0 million with
a floating rate of 3 months Euribor plus a margin of 0.6% and a final maturity of October 20, 2010.
EUR 500.0 million French Commercial Paper Programme (“Billets de Trésorerie”)
On October 25, 2005, in order to meet its own and subsidiary funding needs, the company set up a “Titres de Créance Négociables”
(TCN) programme in the French market where the company issued “Billets de Trésorerie” in accordance with Articles L.213-1 to
L.213-4 of the French Monetary and Financial Code and decree n° 92.137 of February 13, 1992 and all subsequent regulations.
The maximum outstanding amount of “Billets de Trésorerie” issues under the programme is EUR 500.0 million or its counter value
at the date of issue in any other authorised currencies. The terms of the Billets de Trésorerie are determined in accordance with
laws and regulations applicable in France, which imply that, at the date hereof, such term shall not be less than one day and shall
not exceed 365 days. On May 11, 2008, this programme was extended for one further year. As at December 31, 2008 and 2007 no
amount had been issued under this programme.
EUR 200.0 million German Bond (“Schuldschein”)
On May 21, 2008, the company concluded an agreement to issue EUR 200.0 million in two equal tranches in the German Bond
(“Schuldschein”) market.
The agreement for the first tranche was signed on May 30, 2008, with funds being drawn down in June. The agreement for the
second tranche was signed on July 14, 2008, with funds being drawn down in July. The tranches bear interest at a fixed rate of
5.75% and 6.00% respectively and mature in November 2012.
SES Annual Report 2008
97
SES S.A. annual accounts
Notes to the accounts
December 31, 2008
The maturity profile of notes and bonds is as follows as at December 31, 2008 and 2007:
2008
EUR million
Within one year
Between one to two years
Between two to five years
After five years
Total after one year
355.4
244.6
1,783.9
164.9
2,193.4
2007
EUR million
555.4
355.4
994.7
898.7
2,248.8
Note 12 – Amounts owed to credit institutions
As at December 31, 2008 and 2007, the amount owed to credit institutions were as follows:
Becoming due and payable after more than one year
Bilateral multi-currency facilities
Syndicated revolving credit facility
Becoming due and payable within one year
Uncommitted loan facilities
Bank overdraft
2008
EUR million
2007
EUR million
1,046.2
375.0
1,421.2
694.5
–
694.5
90.0
0.3
115.0
–
90.3
115.0
Bilateral multi-currency facilities
On December 31, 2008 and 2007, the company had unsecured bilateral multi currency revolving credit facilities in place with eleven
banks for a total of EUR 1,075.0 million with a maturity date between April 2010 and April 2011.
As at December 31, 2008, EUR 787.5 million (2007: EUR 450.0 million) and USD 360.0 million (EUR 258.7 million) (2007: USD 360.0
million (EUR 244.5 million)) were drawn under these facilities.
Syndicated EUR 550.0 million revolving credit facility
On May 20, 2008, the company signed a syndicated EUR 550.0 million revolving credit facility. The floating rate facility is for general
financing purposes and has been structured as a two year multi-currency revolving credit facility with a one year extension option at
the discretion of the lenders. As at December 31, 2008, the company has drawn a total of EUR 375.0 million under the facility.
In the event that there is a breach of the financial covenants applying to the drawings under the Private Placement, the group is
required to renegotiate the terms of the syndicated loan with the lenders.
The maturity profile of the amounts drawn is as follows as at December 31, 2008 and 2007:
2008
EUR million
2007
EUR million
Between one and two years
Between two and five years
1,346.2
75.0
1,421.2
–
694.5
694.5
Uncommitted loan facilities
As at December 31, 2008, the company had drawn EUR 90.0 million (2007: EUR 115.0 million) under an uncommitted loan facility.
SES Annual Report 2008
98
Note 13 – Amounts owed to affiliated undertakings
Amounts owed to affiliated undertakings of EUR 4,556.0 million (2007: EUR 5,130.2 million) include the following:
2008
EUR million
2007
EUR million
Long-term loans (maturity after 5 years)
Short-term loans
Notes
Current accounts
287.4
382.4
2,109.1
1,777.1
4,556.0
–
742.9
2,109.1
2,278.2
5,130.2
As at December 31, 2008 long-term loans represent two loans bearing interest at a rate of 1 month USD Libor plus a margin of 5%
and a maturity of May 2018.
Short-term loans bear interest at market rates and are repayable upon demand. The notes are interest free (with the exception of one
note which bears interest at a rate of 4.6% per annum) and are repayable upon demand or at latest on the second anniversary of the
note, which may be extended for successive periods of two years each.
As at December 31, 2008 current accounts represent short-term advances bearing interest at market rates and include a short term
advance owed to SES ASTRA S.A. of EUR 933.3 million (2007: EUR 1,336.5 million).
Note 14 – Taxes on profit
Taxes in the profit and loss account have been provided in accordance with the relevant laws. The balance sheet position takes into
consideration the taxable result of the Luxembourg subsidiaries (SES ASTRA S.A., SES Asia S.A., ASTRA Broadband Services S.A.,
SES Participations S.A., SES GLOBAL Africa S.A., NSS Latin America Holdings S.A., SES ASTRA 3B S.à r.l., SES ASTRA 1KR S.à r.l.,
SES ASTRA 1L S.à r.l., SES ASTRA 1M S.à r.l., SES ASTRA TechCom S.A., SES ENGINEERING S.à r.l., SES ASTRA 1N S.à r.l.,
SES ASTRA 5 S.à r.l. and SES Digital Distribution Services S.à r.l.), which are part of the Luxembourg fiscal unity, in accordance
with Art 164 bis LIR.
Note 15 – Staff costs
As at December 31, 2008, the number of full-time equivalent employees in the workforce was 56 (2007: 59) and the average
number of employees in the workforce for 2008 was 54 (2007: 58). Staff costs can be analysed as follows:
2008
EUR million
2007
EUR million
Wages and salaries
Social security costs
9.8
0.5
10.3
9.5
0.5
10.0
Note 16 – Net turnover
In 2008 net turnover amounting to EUR 11.0 million consisted of transponder capacity service revenue generated from trading with
affiliated undertakings for which satellite rental costs of EUR 10.6 million are included in external charges.
Note 17 – Other interest payable and similar charges
Other interest payable and similar charges include the following:
2008
EUR million
2007
EUR million
Interest charges
Foreign exchange losses, net
Other financial charges
184.0
9.7
5.7
199.4
131.6
–
9.8
141.4
Foreign exchange losses, net, mainly consist of losses realised on the close out of certain derivative instruments during the year.
SES Annual Report 2008
99
SES S.A. annual accounts
Notes to the accounts
December 31, 2008
Note 18 – Other operating income
Other operating income mainly consist of group recharge revenues amounting to EUR 4.5 million (2007: EUR 7.9 million) arising from
advisory support services rendered to various affiliates.
Note 19 – Income from participating interests derived from affiliated undertakings
Income from participating interests derived from affiliated undertakings consists of the following:
2008
EUR million
2007
EUR million
Dividends received from affiliated undertakings
Net gain on merger with SES Europe (Note 5)
916.2
–
916.2
250.9
128.0
378.9
2008
EUR million
2007
EUR million
Interest income
Foreign exchange gains, net
Other financial income
5.1
–
3.1
8.2
5.5
11.5
0.6
17.6
Note 20 – Other interest receivable and similar income
Other interest receivable and similar income include the following:
Foreign exchange gains, net, mainly consist of gains realised on the close out of certain derivative instruments during the year.
Note 21 – Board of Directors’ remuneration
At the Annual General Meeting held on April 3, 2008, payments to directors for attendance at Board and Committee meetings were
approved. These payments are computed on a fixed and variable basis, the variable payments being based upon attendance at board
and committee meetings. Total payments arising in 2008 were EUR 1.2 million (2007: EUR 0.9 million).
Note 22 – Off balance sheet items
External interest rate swaps
As at December 31, 2008 the company held four interest swaps outstanding which were designated as hedges of future interest
expense on an aggregate EUR 350.0 million of syndicated loan and EUR 100.0 million of bilateral multi currency facilities which are
floating rate debt.
As at December 31, 2008 and 2007, the company held four interest rate swaps which were designated as hedges of expected future
interest expenses on USD 240.0 million of the bilateral multi currency facilities which are floating debt.
As at December 31, 2008 the company held two interest rate swaps which were designated to reduce the expected future floating
interest expenses on EUR 120.0 million of bilateral multi currency facilities.
As at December 31, 2007 the company held two interest rate swap agreements with a combined notional amount of EUR 500.0
million whereby the company receives a fixed rate of interest annually and pays a variable rate quarterly equal to 3 month Euribor
plus a margin. These agreements were designated as a hedge of the Eurobond EUR 500.0 million. They were terminated in
November 2008.
As at December 31, 2007, the company held one interest rate swap agreement with a notional amount of USD 41.7 million whereby
the company receives a variable interest rate quarterly equal to 3 month Libor plus a margin. This interest rate swap was terminated
in December 2008.
SES Annual Report 2008
100
Forward foreign exchange contracts
As at December 31, 2008 and 2007, the company had outstanding foreign exchange contracts, whose average terms are as follows:
As at December 31, 2008:
Currency sold
Currency bought
EUR 27.2 million
USD 42.5 million
EUR 1,008.1 million USD 1,345.0 million
USD 100.0 million
EUR 77.6 million
EUR 6.2 million
USD 8.0 million
EUR 30.2 million
USD 42.5 million
EUR 35.7 million
USD 50.7 million
EUR 8.4 million
USD 10.7 million
EUR 77.5 million
USD 98.8 million
EUR 0.1 million
USD 0.1 million
EUR 0.5 million
USD 0.7 million
USD 1.7 million
EUR 1.1 million
EUR 0.1 million
USD 0.1 million
USD 2.4 million
TRY 3.4 million
SEK 1,735.6 million
EUR 157.9 million USD 7.5 million
SEK 55.5 million
Average weighted maturity
Average exchange rate
Note
June 2009
January 2009
January 2009
March 2009
May 2009
May 2009
March 2009
June 2009
January 2009
March 2009
April 2009
February 2009
April 2009
January 2009
June 2009
EUR/USD 1.5631
EUR/USD 1.3341
EUR/USD 1.2884
EUR/USD 1.2790
EUR/USD 1.4050
EUR/USD 1.4195
EUR/USD 1.2765
EUR/USD 1.2746
EUR/USD 1.3380
EUR/USD 1.2570
EUR/USD 1.5503
EUR/USD 1.5557
USD/TRY 1.4088
EUR/SEK 10.9915
USD/SEK 7.4515
1
2
2
1
1
1
1
1
1
1
3
3
4
1
5
Average weighted maturity
Average exchange rate
Note
January 2008
February 2008
February 2008
June 2008
March 2008
July 2008
July 2008
July 2008
July 2008
February 2008
August 2008
January 2008
January 2008
EUR/USD 1.3147
EUR/USD 1.3079
EUR/USD 1.2426
USD/SEK 6.5584
EUR/USD 1.4623
EUR/USD 1.3729
EUR/USD 1.4281
EUR/USD 1.4253
EUR/USD 1.3729
USD/TRY 1.2509
EUR/USD 1.3165
EUR/USD 1.4693
EUR/SEK 9.3624
6
7
7
5
2
4
4
4
4
4
8
3
1
As at December 31, 2007:
Currency sold
Currency bought
EUR 6.5 million
USD 8.5 million
EUR 14.4 million
USD 18.9 million
USD 16.2 million
EUR 13.0 million USD 8.4 million
SEK 55.1 million
USD 3,400.0 million EUR 2,325.2 million
USD 42.8 million
EUR 31.2 million
EUR 17.2 million
USD 24.6 million
EUR 17.3 million
USD 24.6 million
USD 24.6 million
EUR 17.9 million
USD 1.5 million
TRY 1.9 million
USD 2.5 million
EUR 1.9 million
USD 1.0 million
EUR 0.7 million
SEK 1,792.0 million
EUR 191.4 million
1. These foreign exchange contracts have monthly maturities up to December 2009 and correspond to specific contracts relating to
satellite procurements for SES Satellite Leasing. These contracts exactly mirror the internal forward foreign exchange contracts
entered into with SES Satellite Leasing.
2. These foreign exchange contracts have monthly maturities up to March 2009 and exactly mirror the internal forward foreign
exchange contracts entered into with SES Finance.
3. These foreign exchange contracts have monthly maturities to July 2009 and exactly mirror the internal forward foreign exchange
contracts entered into with SES ASTRA TechCom.
4. These foreign exchange contracts have monthly maturities up to June 2009 and exactly mirror the internal forward foreign
exchange contracts entered into with ND SatCom.
5. These foreign exchange contracts have monthly maturities up to January 2010 and exactly mirror the internal forward foreign
exchange contracts entered into with SES SIRIUS.
6. These foreign exchange contracts have monthly maturities up to January 2008 and correspond to specific contracts relating to
satellite procurements for SES ASTRA 1L. These contracts exactly mirror the internal forward foreign exchange contracts entered
into with SES ASTRA 1L.
SES Annual Report 2008
101
SES S.A. annual accounts
Notes to the accounts
December 31, 2008
7. These foreign exchange contracts had monthly maturities up to February 2008 and correspond to specific contracts relating to
satellite procurements for SES Satellite Leasing. Of this total, contracts for an amount of USD 18.9 million against EUR 14.4 million
and contracts for an amount of EUR 13.0 million against USD 16.2 million exactly mirror the internal forward foreign exchange
contracts entered into with SES Satellite Leasing.
8. These foreign exchange contracts had monthly maturities up to December 2008 and had been designated as cash flow hedges
of expected future interest expenses.
Inter-company financial instruments
The company arranged several inter-company foreign exchange contracts in order to hedge the U.S. Private Placement as well as
certain other USD-denominated facilities. The average terms of these inter-company contracts are as follows as at December 31,
2008 and 2007:
As at December 31, 2008
As at December 31, 2007
Currency sold
EUR 785.8 million
EUR 841.3 million Currency bought
USD 918.1 million
USD 981.7 million
Average weighted maturity
Exchange rate
April 2013 USD/EUR 0.8558
August 2012 USD/EUR 0.8568
As at December 31, 2008 and 2007, the company had inter-company foreign exchange contracts whose average terms were
as follows:
As at December 31, 2008:
Currency sold
Currency bought
Average weighted maturity
Average exchange rate
EUR 800.0 million USD 1,009.8 million
USD 125.8 million
EUR 100.0 million
USD 42.5 million
EUR 27.2 million
USD 1,345.0 million EUR 1,008.1 million
EUR 77.6 million
USD 100.0 million
USD 8.0 million
EUR 6.2 million
USD 42.5 million
EUR 30.2 million
EUR 6.6 million
USD 8.5 million
USD 50.7 million
EUR 35.7 million
USD 10.7 million
EUR 8.4 million
USD 98.8 million
EUR 77.5 million
EUR 13.5 million
USD 17.0 million
USD 0.1 million
EUR 0.1 million
USD 0.7 million
EUR 0.5 million
EUR 1.1 million
USD 1.7 million
USD 0.1 million
EUR 0.1 million
EUR 0.1 million
USD 0.1 million
TRY 3.4 million
USD 2.4 million
EUR 157.9 million SEK 1,735.6 million
SEK 55.5 million
USD 7.5 million
USD 0.4 million
EUR 0.3 million
March 2009
January 2009
June 2009
January 2009
January 2009
March 2009
May 2009
January 2009
May 2009
March 2009
June 2009
January 2009
January 2009
March 2009
April 2009
February 2009
February 2009
April 2009
January 2009
June 2009
January 2009
EUR/USD 1.2622
EUR/USD 1.2580
EUR/USD 1.5631
EUR/USD 1.3341
EUR/USD 1.2884
EUR/USD 1.2790
EUR/USD 1.4050
EUR/USD 1.2933
EUR/USD 1.4195
EUR/USD 1.2765
EUR/USD 1.2746
EUR/USD 1.2595
EUR/USD 1.3380
EUR/USD 1.2570
EUR/USD 1.5503
EUR/USD 1.5557
EUR/USD 1.3317
USD/TRY 1.4088
EUR/SEK 10.9915
USD/SEK 7.4515
EUR/USD 1.3728
SES Annual Report 2008
102
Note
1
2
2
1
1
1
1
1
1
1
3
4
1
5
As at December 31, 2007:
Currency sold
Currency bought
SEK 55.1 million
USD 8.4 million USD 18.9 million
EUR 14.4 million
EUR 13.0 million
USD 16.2 million
EUR 191.4 million SEK 1,792.0 million
TRY 1.9 million
USD 1.5 million
EUR 31.2 million
USD 42.8 million
USD 24.6 million
EUR 17.2 million
USD 24.6 million
EUR 17.3 million
EUR 17.9 million
USD 24.6 million
EUR 0.7 million
USD 1.0 million
EUR 1.9 million
USD 2.5 million
USD 8.5 million
EUR 6.5 million
EUR 2,325.2 million USD 3,400.0 million
Average weighted maturity
Average exchange rate
Note
June 2008
February 2008
February 2008
January 2008
February 2008
July 2008
July 2008
July 2008
July 2008
January 2008
August 2008
January 2008
March 2008
USD/SEK 6.5584
EUR/USD 1.3079
EUR/USD 1.2426
EUR/SEK 9.3624
USD/TRY 1.2509
EUR/USD 1.3729
EUR/USD 1.4281
EUR/USD 1.4253
EUR/USD 1.3729
EUR/USD 1.4693
EUR/USD 1.3165
EUR/USD 1.3147
EUR/USD 1.4623
5
7
7
1
4
4
4
4
4
3
8
6
2
Guarantees:
As at December 31, 2008 the company had outstanding bank guarantees for an amount of EUR 2.6 million (2007: EUR 0.6 million).
This relates to performance guarantees for services of satellite operations.
Corporate guarantees:
In 2008 and 2007, SES has given several corporate guarantees to satellite providers for the provision of communications spacecraft
and related equipment contracted by fully-owned subsidiaries of the group.
SES Annual Report 2008
103
Other information
Registered office and group
headquarters
SES S.A. Château de Betzdorf,
L-6815 Luxembourg
Registre de commerce
RCS Luxembourg B 81.267
Information for shareholders
Financial calendar 2009
Annual general meeting of
shareholders: April 2, 2009
Dividend payment: April 22, 2009
First quarter trading update:
April 24, 2009
Announcement of first-half
results: July 31, 2009
Third quarter trading update:
October 23, 2009
Listed security
Fiduciary Depositary Receipts each
in respect of one A share of SES S.A.
are listed on the Stock Exchange of
Luxembourg and on Euronext Paris
under the symbol SESG.
Fiduciary agent
Banque et Caisse d’Epargne
de l’Etat
16, rue Ste Zithe,
L-2954 Luxembourg
Tel: (352) 40 151
Shareholder enquiries
For enquiries of a general nature regarding
the company or Investor Relations, please
contact:
SES S.A.
Investor Relations
L-6815 Château de Betzdorf
Luxembourg
Tel: (352) 710 725 490
Fax: (352) 710 725 9836
ir@ses.com
Companies of the group
SES S.A.
L-6815 Château de Betzdorf
Luxembourg
Tel: (352) 710 725 1
Fax: (352) 710 725 227
www.ses.com
Satellite operators
SES ASTRA S.A.
L-6815 Château de Betzdorf
Luxembourg
Tel: (352) 710 725 1
Fax: (352) 710 725 433
www.ses-astra.com
SES AMERICOM, Inc.
4 Research Way
Princeton, NJ 08540-6684
U.S.A.
Tel: (1) 609 987 4000
Fax: (1) 609 987 4517
www.ses-americom.com
SES NEW SKIES
Rooseveltplantsoen 4
2517 KR The Hague
The Netherlands
Tel: (31) 70 306 4100
Fax: (31) 70 306 4101
www.ses-newskies.com
SES SIRIUS AB
Sundbybergsvägen 1,
SE-171 73 Solna
Sweden
Tel: (46) 8 505 645 00
Fax: (46) 8 28 24 80
www.ses-sirius.com
APS ASTRA Platform Services GmbH
Betastraße 1–10
D-85774 Unterföhring
Germany
Tel: (49) (0) 89 1896 3000
Fax: (49) (0) 89 1896 3602
www.aps.de
ABBS (ASTRA Broadband Services)
L-6815 Château de Betzdorf
Luxembourg
Tel: (352) 710 725 1
Fax: (352) 710 725 227
www.ses-astra.com
ND SatCom AG
Graf-von-Soden-Strasse
D-88090 Immenstaad
Germany
Tel: (49) 7545 939 0
Fax: (49) 7545 939 8780
www.ndsatcom.com
SES ASTRA TechCom
L-6815 Château de Betzdorf
Luxembourg
Tel: (352) 710 725 559
Fax: (352) 710 725 9828
www.ses-astra.com
Ciel
240 Terence Matthews Crescent,
Suite 104
Kanata, ON K2M 2C4
Canada
Tel: (1) 613 599 4400
Fax: (1) 613 599 4455
www.cielsatellite.ca
QuetzSat
Insurgentes Sur 1605,
Piso 12
Torre Mural
Colonia San José
Insurgentes
C.P. 03900 Mexico, D.F.
Mexico
Tel: (52) 56 5980 0357
Fax: (52) 56 5980 0350
www.quetzsat.com
Solaris Mobile
Pembroke House
30 Pembroke Street Upper
Dublin 2
Ireland
Tel: 353 1237 4628
www.solarismobile.com
SES Annual Report 2008
Satellite services companies
AMERICOM Government Services
Tyson’s Executive Plaza II
2010 Corporate Drive, Suite 600
McLean, VA 22102
U.S.A.
Tel: (1) 703 610 0988
Fax: (1) 703 610 1030
www.americom-gs.com
104
It is our policy to produce the document constituting our annual
report with a minimum impact on the environment. To this end
the paper used is 100% chlorine free woodpulp from sustainable
forests, using thinnings and waste from the timber industry
and is totally recyclable and biodegradable. Our printers are
fully accredited to the ISO 14001 environmental management
system. They utilise vegetable based inks and operate a direct
computer to plate repro system, eliminating the need for film
with its chemicals such as developer and acid fixers.
SES
L-6815 Château de Betzdorf
Luxembourg
Telephone (352) 710 7251
Facsimile (352) 710 725 227
www.ses.com
SES0409 01E
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