Eutelsat - comment - 27Q1

We clearly were too bullish on both the LEO ramp-up and the Video retention. Not that we felt particularly exuberant about forecasting a continued -10% decline in the latter, or a notable Government uplift in LEO, but -17.8% of LfL Video revenues is quite an acceleration. Accordingly, LEO EBITDA is set to only "reach break even" this year. Much of the Q&A focused on the predictably low-margin €8.9nm LEO construction contract under IRIS2 and on how much of cost overrun risk would lie with the company.  Management largely held its line, but Sébastien eventually offered that roughly 25% of the contract is design/engineering up front and 75% manufacturing/launches, back-loaded, so contractor revenue should reach "hundreds of millions" in FY27 and build from there. Leo growth and CapEx for the year to June 2027 were guided at 30% and €1.2bn. The equity raise last year still has the bonds in amnesia, so Eutelsat won't join the other steep drops in this market.