SES S.A.

However, SES should see solid growth in its network segment in the coming years, supported by its MEO fleet. This provides a competitive advantage in the government and mobility subsegments (see Business Risk section). As the video segment decline decelerates and the revenue contribution of network activities increases, we expect SES will stabilize its revenues in 2020. In its public guidance, SES expects capex to peak at €1.2 billion in 2021 (about 60% of forecasted revenues) to finance its constellation of O3b mPOWER satellites. Assuming capex is paid fully in cash that year, we expect adjusted leverage to stand at 3.6x-3.7x and free operating cash flow (FOCF) to be negative in 2021 (about -3% of debt). Over the rating horizon

...Growth in the network segment should offset the declining video segment in 2020. SES's total revenues have declined since 2016, driven by the group's video segment (65% of total revenues in 2018) with a 5.5% decrease in 2018 and a forecasted 7% decline in financial year 2019 (FY2019). SES is particularly affected by its exposure to the U.S. where we forecast the number of channels to continue declining. However, SES should see solid growth in its network segment in the coming years, supported by its MEO fleet. This provides a competitive advantage in the government and mobility subsegments (see Business Risk section). As the video segment decline decelerates and the revenue contribution of network activities increases, we expect SES will stabilize its revenues in 2020....

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