Eutelsat - The Sky Is Falling Slowly - Positioning

We have discussed the below in our investment committee and have positioned ourselves in the capital structure. Eutelsat has just reported a high-level trading update for Q1 2025 which was weaker than the market expected. However, management will give a more detailed update for H1 2025 in mid-February 2025. Given that Eutelsat is in the middle of a strategic pivot, we have modelled the impact of the decline in its legacy business and discuss whether its new focus on Connectivity will compensate for that decline in terms of EBITDA and cash flow and what the rate of the cash burn will be in the interim. We have also examined the capex requirements of the strategy going forward and the maturity schedule of its existing debt to understand what options the company has to tackle its debt as it comes due and pay for its cape at the same time. We arrive at our investment strategy when discussing the nature and timing of certain catalysts and how the dynamics in the global satellite services industry impact Eutelsat's business in the medium term.