Eutelsat Communications SA

PAR:ETL

Earnings Call Analysis

Eutelsat Reports Solid Financial Year

Eutelsat demonstrated a commendable performance with operating revenues hitting the company's forecasted range, underpinned by strong momentum in mobility connectivity which resulted in double-digit growth. Despite a competitive environment, it maintained an industry-leading adjusted EBITDA margin of 73%. Operating verticals' revenues decreased by 4.8% on a like-for-like basis yet fell within the expected range of €1,135 million to €1,165 million. The adjusted discretionary free cash flow stood at a resilient $518 million, comfortably above the two-year average annual target of $420 million. The company successfully put three new satellites into service and confirmed growth return next year.

Introduction to Eutelsat's FY 2022-2023 Results

Eutelsat Communications has presented its full-year financial results for 2022-2023, offering a reflection on significant milestones achieved throughout the year. CEO Eva Berneke, joined by CFO Christophe Caudrelier, highlighted a year underpinned by a strong performance in the mobility connectivity segment, which fueled double-digit revenue growth. The company's financial health was showcased by an industry-leading adjusted EBITDA margin of 73% and solid adjusted discretionary free cash flow of $518 million.

Operational Milestones and Strategic Initiatives

The year was marked operationally by the successful deployment and entry into service of three new satellites, supporting Eutelsat's key video position and expanding its capacity in mobile connectivity—a sign of the company's increasing pivot towards this sector. Additionally, a significant new contract for EUTELSAT 10B illustrated strong commercial demand in this domain. With the foundation set for growth and robust cash generation, Eutelsat positioned itself well for the anticipated merger with OneWeb.

Financial Performance and Revenue Breakdown

Eutelsat reported operating vertical revenues at the end of their forecasted range, with a slight decline of 4.8% on a like-for-like basis. Even with a notable drop in video revenue (down 8.3% from last year) due to non-renewals and market sanctions affecting Russian and Ukrainian channels, the group saw a surge in mobile connectivity revenues by nearly 27%. While fixed connectivity experienced a modest decline, it was balanced out by stable or increased contributions from broadband partnerships and African operations.

Backlog and Future Outlook

The company's backlog decreased to €3.4 billion from €4 billion, indicating natural erosion but also reflecting the shift towards shorter contracts in the connectivity sector. Despite fewer major broadcast renewals, this was partly offset by new mobility deals. This rebalancing indicates Eutelsat's strategic redirection and adapting market conditions as it heads into the next financial year with continuity and growth on its agenda.

Earnings Call Transcript 2022-Q4

[Operator]

Good day, and welcome to the Eutelsat Communications Full Year 22022-2023 Results Presentation Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Eva Berneke. Please go ahead, madam.

[Eva Berneke, Chief Executive Officer]

Thank you. Welcome. Good morning. And thank you for joining us today for Eutelsat’s full year 2022-2023 results presentation. I am Eva Berneke, CEO and I joined today’s call by our CFO Christophe Caudrelier.

Let’s start by taking a look at the highlights of the year. This year's operating verticals revenues were at the end of our expected range. This performance was mainly based on sustained momentum in mobility connectivity. We posted a double-digit growth over the full year.

We did delivered a very solid financial performance, including an industry-leading adjusted EBITDA margin of 73%. Adjusted discretionary free cash flow of $518 million comfortably within our expected range of an annual average over two years of $420 million at the exchange rate, Euro/dollar of 1. €382 million proceeds related to phase two of the C-Band and that dollars transitioned to recognize in very late June ‘23 after complete certification.

On the operational front, this financial year was also marked by a successful entry into service of three satellites. We launched four, but three of those four have already gone into service. The two HOTBIRD 13F and 13G is ensuring service continuity our flagship 13 east video position. But the HOTBIRD 13G is also hosting an incremental EGNOS payload, which is also part of the strong performance on cash this year.

EUTELSAT 10B, which we just announced have come into service, carries incremental, 33 Gigabytes of capacity addressing especially demand in mobile connectivity but also seized and enjoys firm pre-commitments from both Intelsat and Panasonic.

And today, I'm happy to announce that we just signed a four-year multi-million deal with Marlink for specifically capacity on the E10 illustrating the very strong commercial traction addressing the booming mobility connectivity needs.

On the back of this, we confirm all our objectives with sustained cash generation and return to growth next year on a Eutelsat standalone basis. This leaves Eutelsat with strong foundations to ensure successful merger with OneWeb where the EGM is expected to approve the transaction in late September.

Looking at a few of our key figures, Christophe will come back to the details, but let me just take you through the highlights. Revenues for our five operating verticals stood at €1,136 million on a reported basis and €1,157 million at the exchange rate of 1 euro to a dollar which - on which our original objectives were based. This represent a 4.8% decline on a like-for-like basis, but it's complemented within the midpoint, our expected range between €1,135 million and €1,165 million.

Also, we delivered an industry-leading profitability with an adjusted EBITDA of 73%. The decrease year-on-year is largely of the changing revenue mix between video broadcasting and mobility connectivity. Cash CapEx stood around €271 million which is broadly stable year-over-year despite the launch of four new satellites.

Discretionary free cash flow stood at €462 million on a reported basis. On an adjusted basis, as our financial objectives, which is at the 1 euro to US dollar rate it stood at €518 million, well above the objective of the annual average of two years of €420 million. The net debt to EBITDA ratio stood at 335 in June, broadly stable versus last year.

We remain comfortable compared to our medium-term objective of three times as we shortly will receive the $382 million US dollar pre-tax in respect to the second phase of the C-Band proceeds.

Now let's have a look at full year revenues. Total revenues for the year stood at €1,131 million, down 1.8 on a reported basis. Other revenues, just as a reminder, revenues other than those generated in the commercialization of satellite capacity were down €8 million, including a €3 million negative variation in hedging revenues.

Excluding a positive currency effect of €33 million, based on a Euro to dollar rate of €104 versus €114 last year, revenue to the five operating verticals were down as we - before mentioned 4.8% on a like-for-like basis. As you have noted, and we wanted to do a little bit of explaining of this, we have decided to adapt to the way we report our operating verticals.

The definition of operating verticals remain the same, but our new framework is altered from five segments to four within the operating verticals. Video will be regrouping broadcasting and professional video that used to be two different segments, fixed connectivity, will encompass data and fixed broadband. Mobile connectivity and government services will remain as they were before. Pro forma quarterly data ’21-22, ‘22-‘23 is provided in the appendices of the press release.

Let's look at the different segments in the revenue in more detail. Video is 62% of the Group total recorded revenues of €705 million, down 8.3% versus last year. Government services, around 12% percent of approved revenues were down 7.2% with revenues of 143.

Mobile connectivity, a 10% of total saw revenues of 110, up by almost 27%, 26.8% to be precise. Fixed connectivity, 16% of revenue stood at 178, an organic decrease of 2.3%.

Go into the operational performance. Video, the full year revenues, we just mentioned were down 8.3% to €207 million.

This reflected the full year effect of the non-renewal of Digiturk, which we previously mentioned, lower revenues in Europe. The effect of the sanctions against certain Russian and Ukrainian channels, which mainly impacted second half and professional video revenues, which account for about 10% of this vertical also decreased affecting structural headwind, as well as some seasonality on key events.

On the commercial front, and more positively Eutelsat was selected by Orby Elevate for the distribution of the first mainstream English language Direct-to-Home services for the US leveraging the coverage of Eutelsat west 117 over the US. Eutelsat also extended its partnerships with du, the Emirates Integrated Telecommunications Company to upgrade its Direct-to-Home services across the Middle East and North Africa.

Government Services revenues stood at €143 million, down by 7.2% year-on-year. Fourth Quarter revenues stood at €45 million, up by almost 26% and 45% quarter-on-quarter. This increase was mainly due to a one-off contract of €14 million with the German space agency, DLR, whereby HOTBIRD 13F provided a service from April on the 0.5 East orbital position.

Excluding this impact, fourth quarter revenue decline was14%, a level consistent with the trend we also saw in the third quarter, albeit representing a slightly improved trend versus first half, thanks to a superior renewal rate in the spring of US DoD campaign, which is above 70%. We saw only 65% in the Fall 2022 campaign.

Mobile Connectivity revenues stood at €110 million, up 26.8% year-on-year, reflecting a very positive momentum, especially in Maritime.

Fourth Quarter revenues stood at €27 million, up 20.7% year-on-year and 2.9% quarter-on-quarter, reflecting the positive impact of the commercialization in the first half of the third beam on the EUTELSAT QUANTUM for a maritime mobility customer.

Fixed Connectivity revenues stood at €178 million, down 2.3% year-on-year. In Broadband, 40% of this application, revenues were broadly stable on a comparison basis including the contribution from the wholesale agreements with Orange, TIM, and more recently Hispasat and Swisscom as well as, but to a lesser extent, the growth of the African operations.

In Fixed Data, which is 60% of this application, we saw improved volume trends partly offset by negative impact on the ongoing competitive pressure on prices.

Fourth Quarter revenues stood at €41 million. On a like-for-like basis, they were down by 16.0% year-on-year, and by 6.9% quarter-on-quarter, reflecting tougher comparison basis including a positive one-off of €2.5 million in the fourth quarter of last year. Excluding this one-off, they were broadly stable on a sequential basis.

Turning to backlog and fill rate. The backlog stood at €3.4 billion at end 30 June versus 4 billion a year earlier reflecting the natural erosion and the absence of major broadcast renewal in this quarter and is partly compensated by additional mobility contracts. The backlog was equivalent to three times ’21, ’22 revenues and Video represented 59% of the total versus 64% a year ago.

The backlog profile is progressively reflecting the rebalancing of our operations towards connectivity with also shorter contracts.

Moreover, the pattern of the market include managed service with a new definition we provided next fiscal year.The number of operational transponders in June stood at 1,351, broadly stable year-on-year compared to last year while we enter into service a new regular capacity compensating for the stable orbit life on a few satellites over the last 12 months.

The number of utilized transponders stood at 953, down by 43 units year-on-year, but up 37 units compared to March. The latter reflecting seasonality of certain maritime contracts, especially in Europe. Even minor distinctions does not include yet the HTS capacity of some of our satellites such as Eutelsat connect. And so we saw the fill rate stood at 70.8% compared to 73.2% a year earlier and 67.8% at end December.

Let’s now turn to the more detailed financial results and I’ll hand over to Christophe.

[Christophe Caudrelier, Chief Financial Officer]

Thanks, Eva. Good morning, everybody. Happy to be here with you. I will start with the adjusted EBITDA, which stood at €825 million at the end of June 2023, compared to €862 million last year, down by 4%. The adjusted EBITDA margin stood at 72.9% at constant currency, that is to say 73% on a reported basis, versus 74.8% in fiscal year ‘22. This is on the back of lower revenues, mainly in the video business.

Operating costs were €16 million higher than last year, reflecting, first, increased staff and technical costs due to a changing revenue mix and to a lower extent inflation; second, the cost incurred by transactions with Russia; and third, exchange rate negative impacts. This adjusted EBITDA margin is reflective of the progressive rebalancing of our business towards connectivity applications.

Turning to the P&L, Group's share of net income stood at €315 million, versus €231 million a year earlier, up by 36% and representing a margin of 28%. This reflected on the positive side, lower depreciation of minus €455 million versus minus €482 million in fiscal year ‘22, which was due to lower in orbit, and on ground depreciation.

Two satellites HOTBIRD 13F and HOTBIRD 13G entered into service respectively on April 4, 2023 and May 30, 2023.

Other operating income of €203 million, compared to an income of €45 million last year, and includes the $382 million related to Phase II of C-Band proceeds.

As a reminder, Last year’s other operating income including $125 million of Phase I of C-Band proceeds. On the negative side, net financial results of minus €91 million versus minus €65 million a year earlier, reflecting an unfavourable evolution of foreign exchange gains and losses, as well as higher interest rates.

Higher tax, at minus €67 million, versus minus €49 million a year earlier, reflecting notably the 30% tax rate applied to the above-mentioned C-Band proceeds.

And negative income from associates of minus €87 million, reflecting the full year contribution of the

stake in OneWeb, which last year was only from September 2021 onwards.

Net cash flow from operating activities amounted to €735 million, €66 million lower than a year earlier due to lower adjusted EBITDA and the first installment of $100 million of the take-or-pay agreement signed with OneWeb, partially compensated by lower working capital requirement needs, namely thanks to a prepayment in respect of the EGNOS contract of €85 million and strong cash collection.

Cash Capex amounted to €271 million, a level broadly stable versus €280 million last year.

Interest and other fees paid net of interest received amounted to €95 million versus €78 million last year. It notably reflected interests from the credit facility drawn down for the financing of satellite programs.

Discretionary free cash flow amounted to €462 million on a reported basis, up €19 million. It excludes the first installment of $100 million of the take-or-pay agreement signed with OneWeb.

Adjusted Discretionary free cash flow as per the financial outlook definition and at a Euro/dollar rate of 1.00, stood at €518 million, down €3 million or 1%, but well above our objective of an average of

€420 million per year at a Euro/dollar rate of 1.00 for fiscal year ‘23 and fiscal year ’24.

Turning to the next slide. At the end of June 2023, net debt ended at €2,766 million, down €49 million versus end of June 2022. It reflected: higher discretionary free cash flow of €462 million generated in fiscal year ’23, a reduced dividend payment of €81 million following the payment of part of the dividend in shares under the scrip option, the outflow related to an inorganic investment of €143 million mainly for OneWeb and other items which contributed towards increase in net debt for a net impact of €190 million, this reflects mostly the use of a debt related finance lease for the financing of satellite programs which amounted to €200 million with OneWeb.

As a result, the net debt to EBITDA ratio stood at 3.35 times, compared to 3.27 times at the end of June 2022. We remain comfortable compared to our medium term objective of around three times as we expect to receive the cash of Phase 2 of C-Band proceeds of $382 million pre-tax.

The average cost of debt after hedging stood at 2.96% versus 2.55% in fiscal year ’22 in a higher interest rate environment. The weighted average debt maturity stood at 3.6 years, compared to 4.3 years at the end of June of 2022.

And last but not least, liquidity remained strong with undrawn credit lines and cash of around €1.5 billion. This is it for the financial results. I now hand it over to Eva for the outlook.

[Eva Berneke, Chief Executive Officer]

Thank you, Christophe. Let’s turn to the outlook. First our assumptions for each operating verticals for financial year ’24. Video revenues are expected to be broadly in line with market trends of a mid-single digit decline, excluding the effects of sanctions which will be embarked for a full 12 months next year versus six months in financial year ’22, ’23.

Government Services will continue to reflect the outcome of past and upcoming US DoD renewals and a tougher comparison basis with this financial year due to the mentioned one-off DLR contracts. Revenues will however benefit from the EGNOS contract at HOTBIRD 13G, which is set to generate €100 million over 15 years.

Both Mobile Connectivity and Fixed Connectivity verticals are expected to experience double-digit growth in the next financial year on the back of the entry into service of EUTELSAT 10B and KONNECT VHTS, both with firm pre-commitments, and positive commercial traction.

On the back of this, we confirm our financial outlook on a standalone basis. Revenues are expected to return to growth from this next financial year and onwards and elsewhere cash CapEx will not exceed the €400 million per annum for each of the next two fiscal years. We also confirm discretionary free cash flows at an average of €420 million per year over the next two fiscal years. So we confirm our leverage targets.

These objectives are of course on a standalone basis and based on nominal deployment programs. You’ll find a slide, just a reminder of future launches with the Eutelsat 3060 and Flysat Americas which are currently in procurement.

I am turning to a bit of an update on OneWeb. OneWeb continues to enjoy strong commercial momentum, with a 50% increase in contracts signed since last October, for a total backlog a bit over $900 million. Recently, OneWeb signed a multi-million take-or-pay contract with Telstra for cellular backhaul in Australia.

This deal illustrates how OneWeb with its topnotch B2B approach can provide capacity to telcos, especially remote areas through its service level agreements which are necessary for resilience and better real-time experience.

In June, OneWeb also achieved its revenue target with revenue just over €50 million. They announced that they will later than expected availability of terminals should lead to a slight delay in revenue recognition at One Web this year – coming year.

All in all, this marginal adjustment of 2% of the midpoint of the revenue range as a combined entity, there is no impact on cash flow generation and downturn market prospects of the Group.

A quick word on where we are in the transaction process. We are waiting for this final authorizations namely from France and the US before we call for an extraordinary general assembly. We expect this general – extraordinary general assembly to take place in the second half of September ‘23. Once it’s approved by the EGM the combination will immediately be live as the teams are fully focused on making the combination a success.

This time line is fully compatible with the operational and financial objectives communicated at the announcement of this combination project.

So in summary, looking ahead, the achievements over the past year put us in a very strong position with everything in place for a successful combination with OneWeb. We reorganized Eutelsat along two business unit video and connectivity to capture the market opportunities.

Via the four satellites that we launched in late ’22 are now part of our fllet providing services at key orbital positions underpinning the return to revenue growth. And the next change will be the entering to service of KONNECT VHTS, which brings 500 gigabits of capacity to address the booming needs in broadband over Europe and Africa.

Eutelsat’s capacity to generate sustained cash flow is more than confirmed with over 2.4 billion of cash generated over the past five years. Elsewhere Eutelsat is also at the center of the plans to build a European multi-orbit consolation, Irish squares where we are part of space-wise consortium.

And finally, the combination of OneWeb is on track to close by the end of Q3 in this year and we are ready to go live day one.

Thank you for the attention. We are now ready to take on any of your questions. I think we have a few already in, but otherwise, feel free to write in on your questions.

[Operator]

Thank you. [Operator Instructions] And we take our first question from Aleksander Peterc with Societe Generale. Please go ahead.

[Aleksander Peterc, Societe Generale]

Yes, good morning, and thanks for taking my question. I hope you can hear me well. I just have a couple. So, first one on OneWeb. If you could comment on the backlog momentum under the impression that the 900 integer is stable with the reported nine month results. So, is there any underlying progress that is immediately visible here for us?

And then the second is still on OneWeb, regarding the delay in terminal availability, could you tell us if this has to do with component supply issues or are there the technical difficulties at the terminal manufacturers? And have you now secured fully the supply for fiscal ‘24, whether further risks and slippage that may lead to further revenue outlook reductions at OneWeb? I have a very quick follow-up after that. Thank you.

[Eva Berneke, Chief Executive Officer]

Sure, Alexander. Let me try to - I think there is still positive momentum in the backlog. It's true that it hasn't from when you made the rounding figures from months two it is still 900, but it is now above 900. And we have added both the mentioned Telstra deal in it. There are also some quite interesting other tests ongoing, which is not yet in the backlog.

One is just out here with the PBO program from the US military side. And you probably also see some of the press on the UK testing remote islands with OneWeb. This is not confirmed in terms of numbers. The deals are confirmed, but not in terms of numbers in the backlog.

So, we are evolving and we hope within the next couple of months to pass the 1 billion mark. But we're not quite there where it rounds up to $1 billion and down to the $900 million. Also, I'd say focus has shifted a little bit into revenue recognition rather than just building backlog.

I think that's also at the phase we are at with OneWeb that we have switched more into getting customers go live and that is the starting to respond also to your second question around terminals. As you know, we work with multiple terminals now and with a B2B focus, which typically means testing of the different terminals first by naturally balance off to make sure it works in network, but then also on a couple of test sites with customers.

And having the right the terminals available and going through a couple of months of test is a typical sales process with a B2B customer. And the right terminal availability and also the valuation of the terminals after given that we have multiple terminals to choose from has - is probably what is taking a little bit more time.

Then there's also a few segments where terminal supply has been delayed in terms of flat panels. They are not there. But again, we need to get them out and get them tested with the customers. So that's why we take some more prudence on the revenue ramp up and also it’s directing a little bit more sales attention to actually ramping up revenues and getting customers installed over the next month.

[Aleksander Peterc, Societe Generale]

Thank you. Thank you very much, Eva. And just a quick follow-up on Irish classes. Can you put any inflection to bone there on what kind of role you could - what is the opportunity there? Do we really have anything new on that front? Thank you.

[Eva Berneke, Chief Executive Officer]

I think, Irish squares and the space rise consortium, which is what we call the Consortium with actually quite a lot of large players, ourselves Eutelsat, SES Hispasat, Airbus and Thales as part of the space rise, but also will close collaboration with Orange, Deutsche Telekom, OHP, Telespazio. So a very large consortium working together.

We are on the last almost days of finalizing the offer. The offer needs to go in on August 7th. So that is next weekend. We need to be done with it. So it's a - it's what's the, we're in the process of defining the architecture and the overall elements of such a multi-orbit, highly secure constellation. And that's going in a week's time to Brussels.

And then, we expect to start the dialogue with Brussels around it. The calendar is still a focus on getting to a last and final offer in November, December, and then, a choice from Brussels in February next year. Of course, that's continues to be a quite ambitious time line in terms of touch large public sector buying and especially when you see technology this complex and this innovative.

So, it's not a given that that does – there will be no modifications of this. But right now we are on track to be able to hand in a first round proposal in the next week in the consortium.

[Aleksander Peterc, Societe Generale]

Excellent. Thank you very much.

[Operator]

Thank you. And we take my next question from Roshan Ranjit with Deutsche Bank. Please go ahead.

[Roshan Ranjit, Deutsche Bank]

Good morning, everyone. Thank you for the questions. I have three please. Firstly, on CapEx. You have a very good CapEx control this year. Your guidance – excuse me - for not exceeding €400 million for the next coming years. I guess, averaging, if any got one launch coming up in the near term, so you said, I guess no upside to that number I mean, 400 seems quite high given where you've been trending so far.

Secondly, just following up on the terminals question. Is there a risk to standalone Eutelsat’s supply of terminals? Because I know you've previously said that you are increasingly distributing terminals and looking to build out the terminals that way?

I noticed that you will be getting the C-Band cash in your first quarter ’24. Is that earlier than expected? Have you gone through all of the checks with the FCC? So, is there anything different why you don't start receiving their cost earlier than the peers? Thank you.

[Eva Berneke, Chief Executive Officer]

Maybe Christophe you want to go on C-Band?

[Christophe Caudrelier, Chief Financial Officer]

Yeah, yeah. Well, initially the cash was planned to be received - when I say initially that was last year. We initially planned to receive the cash by the end of fiscal year ‘23. It's been postponed, I mean, mainly due to the administrative and follow-up on the American authorities. But now, I mean, it’s clear that we we've not gone through all the necessary, I mean, paths and we should be receiving these cash hopefully by the end of September,

[Eva Berneke, Chief Executive Officer]

Yeah. So, that is probably a we'd expect it to do it in this first half and getting it in the part of first half. It might be a little bit early but we had expected to get it before in the first half of financial year. Coming back on your CapEx guidance, less than 400 billion. You're right. We have not been say, close to €400 million for the last couple of years.

This is of course Eutelsat on a standalone basis. So, we do think that that we will on a standalone basis be well within that CapEx guidance. However, I do think we will - you know we will have a very different picture post combination with OneWeb where we are guiding a 775 to 875 CapEx per year given the startup investment in Gen 2 of OneWeb.

Finally on terminals. Eutelsat’s standalone terminals is mainly a question of terminals for connectivity. Those are good dialogue and is ramping up. It's clear that it given that we need to migrate quite a lot of customers from Konnect-to-Konnect VHTS, that's a change of terminals. But that is in good process. I think the some of the challenging on the supply of terminals is more than OneWeb side.

[Roshan Ranjit, Deutsche Bank]

That's great. Thank you very much.

[Operator]

Thank you. [Operator Instructions]

[Christophe Caudrelier, Chief Financial Officer]

There is a question from Sami Kassab from Exane BNP. Can you please provide an update on the latest developments regarding Irish Square? Did you also discuss how much of Eutelsat 10B has already been leased?

[Eva Berneke, Chief Executive Officer]

Okay. On Irish square, Samio, be happy I think the development, I covered a little bit in the answer to Alexander’s questions. But the development is that we are now in good progress to be able to hand in this first proposal to Brussels by the end of next week. And those are in good light dialogue and it's been very intense work with a relatively large integrated project team that's been working on this with both a very large technical part and of course also, the governance part.

On the E 10B, we have actually solid pre-commitment from Intelsat and Panasonic on quite a large additional capacity. There is also part of E 10B, which is replacing legacy businesses. And then finally, as I just announced, we just literally a 48 hours ago, signed an additional contract for mobile maritime, mobility with Marlink.

So that brings E 10B in a very solid position. The Marlink contract is over four years. So that is to be start flowing into our backlog as of next month.

[Operator]

Thank you. And it appears there no further questions at this time. And I'd like to turn the call back over to you for any additional or closing remarks. Thank you.

[Eva Berneke, Chief Executive Officer]

Well, thank you everybody for joining this Eutelsat update call. Let’s say quite good chances. It will be the last one as a Eutelsat standalone basis. Of course, there is never any guarantees when it comes to regulatory approvals. But as we guided, we do hope to be able to close the merger with OneWeb within the next quarter, which of course also means that we will be in the next update seen as a joint company.

That naturally will change a little bit of things. We try to give you a good feeling for how the combined entity will look also in this call. But we're looking very much forward to the first call as a combined entity next time around.

In the meanwhile, feel free to get back to Thomas or anybody else. If you come up with detailed question, once you've had another copy or two and find additional question to ask and we'll try to get back to you. Other than that, for those of you lucky enough to be on French Holiday schedule, you might be on your way on holiday. So, enjoy the holidays. And for the rest, well, happy working. Have a great day.

[Operator]

Thank you. This concludes today's call. Thank you for your participation. You may know disconnect.