Eutelsat Communications S.A. (ETL) Earnings Call Transcript & Summary

Welcome to the Eutelsat Third Quarter and 9 Months 2024 and '25 Revenues Call. My name is Alan and I'll be your coordinator for today's event. Please note this call is being recorded. [Operator Instructions] I'll now hand you over to your host Christophe Caudrelier to begin today's conference. Thank you.

Hello everyone. Welcome, and thank you for joining us today for Eutelsat Third Quarter '24-'25 revenues presentation. I'm Christophe Caudrelier, Group CFO, and I'm joined today by Joanna Darlington, Chief Communication and Investor Relations Officer. On today's agenda, we will cover recent highlights, Q3 performance and outlook and financial objectives. Let's start with the highlights. Third quarter revenues of the 4 operating verticals, i.e., excluding other revenues, stood at EUR 300.6 million. They were down 2.2% on a like-for-like basis. Revenues of the 4 operating verticals for the first 9 months were up 1.8% on a like-for-like basis. Connectivity applications continue to see double-digit growth on the back of LEO-enabled solutions. With all this, we confirm all our full year '24-'25 financial objectives. Let's turn specifically to the Q3 performance. First, as a reminder, all commentary is on a like-for-like basis, i.e., at constant currency and parameter. Total revenues for the third quarter stood at EUR 300 million, down 1.9% on a like-for-like basis. They reflected, first, a EUR 7 million positive currency effect; and second, a EUR 1 million negative swing in other revenues, mainly from hedging. Excluding other revenues, revenues of the 4 operating verticals were down 2.2% on a like-for-like basis. Let's look at revenues in more detail. Video, representing 50% of revenues, stood at EUR 152 million, a decline of 6.4%. Fixed Connectivity revenues, representing 20% of the Group total, rose 1% to EUR 60 million. Government Services, 17% of revenues, stood at EUR 50 million, a rise of 10.2%. Mobile Connectivity revenues, representing 13% of the Group total, stood at EUR 40 million, down 2.7%. I will come back to this. Let's start with Video. Third quarter Video revenues amounted to EUR 152 million, down 6.4% year-on-year, are in line with the broader market trend. On a quarter-quarter basis, revenues were down 4.8%, reflecting the linearization of revenue recognition on certain contracts in Q2. On the commercial front, Eutelsat renewed a video capacity agreement with its long-standing partner, ATSS, in the MENA region. Eutelsat also expanded its services for professional video, committing significant new resources at the flagship HOTBIRD constellation at 13-degrees East. Elsewhere, Eutelsat renewed its partnership with UAE -based content-distribution specialist, BHS, for satellite contribution services across the Middle East and North Africa, extending capacity leased on EUTELSAT 21B and EUTELSAT 70B. Let's move and have a word on Russia. Eutelsat is implementing EU Regulation 269/2014 concerning the denial of resources to Russian entities, which since March 2025 is being applied to selected media groups by the French regulator, ARCOM. Following the recent removal of 2 channels, STS and Kanal 5, belonging to JSC National Media Group, Eutelsat is in the process of removing further channels controlled by this company, as well as those controlled by VGTRK from Eutelsat capacity. At this stage, the impact on the Group's revenue of the removal of these channels is being estimated at around EUR 16 million on an annualized basis, and a similar amount at the EBITDA level, prior to any mitigation measures. Due to the timing, this action has a very limited impact on Eutelsat's objectives for fiscal year '24-'25. As a reminder, Eutelsat's financial objectives exclude the impact of sanction imposed on Russian customers by external authorities. Moving to connectivity, third-quarter fixed connectivity revenues stood at EUR 59.7 million, up 0.8% year-on-year. They mainly reflected, on the one hand, the continued growth of LEO-enabled connectivity solutions, and on the other, the more challenging conditions for GEO-enabled consumer broadband in Europe, and notably the cessation of revenue recognition from a specific customer on the KONNECT-VHTS satellites. Quarter-on-quarter, revenues were down 7.3%, reflecting a one-off impact from catch-up revenues from a LEO customer in Q2, as well as the above-mentioned cessation of revenue recognition from a GEO customer. On the commercial front, the transfer of Eutelsat KONNECT capacity to the African market has been completed. Take-up of the additional capacity has been dynamic, notably with a multi-year partnership with Orange for connectivity in Africa and the Middle East. Elsewhere, Eutelsat and Intelsat inked a new multi-year agreement for Ku capacity on EUTELSAT 7C for the delivery of fixed data services over Central and Eastern Africa and renewed their existing capacity contract on EUTELSAT 70B. The 2 companies are in discussions aimed at adding LEO capacity for East Africa. Third-quarter Government Services revenues stood at EUR 49.5 million, up 10.2% year-on-year. This mainly reflected the growth of LEO-enabled solutions revenues, as well as increased demand from non-U.S. governments. Quarter-on-quarters, revenues were down 4.2%, notably due to slow down in GEO activity. The spring 2025 renewal campaign with U.S. Department of Defense resulted in an estimated renewal rate of less than 50%, below the high rate of previous quarters. It reflects the change in the new presidential administration's geographic prioritization for the defense department, with the additional context of efforts to cut government spending overall. In particular, it embarks a non-renewal of a single sizable contract. Excluding this one-off, the renewal rate would have been close to 70%. Third quarter Mobile Connectivity revenues stood at EUR 39.7 million, down 2.7% year-on-year, reflecting lower GEO revenues, partly offset by growing demand for LEO-based solutions. Quarter-on-quarter, revenues were up 14.3%, underpinned by ramp-up on LEO. On the commercial front, Eutelsat confirmed the traction of LEO-enabled services for commercial and business aviation, with over 135 antenna installations already completed, out of a backlog close to 1,000 aircrafts, and the first aircraft now in service. In addition to its GEO offering, Eutelsat is delivering multi-orbit connectivity through key partners such as Intelsat, Hughes, Panasonic and Gogo. Air Canada became the first airline to deploy the multi-orbit GEO/LEO service through Intelsat. Apparently, Eutelsat signed a multi-year, multi-million-dollar extension of its capacity agreement with Panasonic on EUTELSAT 10B and the deployment of KONNECT-VHTS capacity for mobility markets is also progressing well. Notably with a new multi-year, multi-million-dollar agreement with Türksat for Ka-band services. Both showcase the ongoing pertinence of a state-of-the-art GEO capacity to deliver high-quality, cost-effective in-flight connectivity services. Moving now to the backlog. The backlog at the end of March stood at EUR 3.6 billion versus EUR 3.9 billion a year ago, and EUR 3.7 billion at the end of December 2024, reflecting its natural erosion, especially in the Video segment, in the absence of major renewals. It was equivalent to 3x fiscal year 2024 revenues, with Connectivity representing 57% of total. Let's now turn to the outlook. On the back of the performance of the first 9 month, we confirm our objectives for the full year '24-'25 of operating vertical revenues around the same level as fiscal year 2024, and adjusted EBITDA margin slightly below the level of fiscal year 2024. Elsewhere, gross capital expenditure in fiscal year ‘'24-'25 remains expected in a range between EUR 500 million and EUR 600 million. Eutelsat also continues to leverage around 3x in the medium term and continues to work actively on the financing plan, in line with its strategic road map and its leverage objectives. With that, I would like to thank you for your attention, and together with Joanna, we are now ready to take your questions and to answer your questions.

[Operator Instructions] We will take our first question from Roshan Ranjit, Deutsche Bank.

I've got three, please. On the government renewal rate, where you say less than 50%, possible to get a sense of -- is there a scope for further resizing? You mentioned this single sizeable contract. Are there other types of contracts of that nature within your base? Just to confirm that government -- U.S. government revenues is around 60%, 65% of overall government revenues of the Group, please. Secondly, within Video, you're flagging the EUR 16 million annualized impact from Russia. Again, is that -- assuming all Russian channels are removed from your base? Or is there a scope for that number to potentially be higher if you have to switch off further channels? Lastly, last quarter, you mentioned you were working on a financing plan. I don't see an update in the release today. I assume that is still something which you're working on. But anything you could say on that front and any progress would be very helpful.

Okay. Thanks, Roshan, for your question. Starting with the first one on the renewal rate on the government. And I guess your question was related to the percentage that the U.S. government was representing in the total. So it's -- the proportion of the U.S. government is decreasing, and it's I would say, roughly between 50% to 60%. The reason why it's decreasing is also because with the development of the LEO activity, we also have a lot of appetite from other governments and we see a significant increase of our business with governments other than the U.S. government. On the U.S. government side, we don't see any dramatic change of the business. Again, for this quarter or for the Spring session, it's really related to 1 specific contract with the U.S. government. I mean, as we see, I mean, we -- with the change in the presidential -- the U.S. President's strategy and the cost-cutting plan, I mean, we see some changes, but no major impact on the -- on our business.

Sorry, just to add one thing. In terms of timing, those renegotiations took place just at the time or just after the start of the new U.S. administration. So there was, as you know, right, at the beginning of the administration, there was a lot of pressure on departments to cut costs. And so we think that the unusually low renewal rate was, if you like, partly a knee-jerk reaction to that impetus. I think your other question, and it's why we single this out. I mean it's -- there's 1 contract that wasn't renewed that represents around half of the delta between the type of renewal rate we would normally see and the renewal rate that we just reported. So to answer your question, Roshan, no, it's unusual. I mean they generally, the renewals tend to be made up of smaller contracts, and it's unusual to have one that's that chunky and has that big an impact.

On your second question related to Russia. No, it -- I mean, the channels that we are removing or we will be removing from the -- from our satellites are not all -- the channels are not the -- all the business with Russia. It's a few tens of channels that we are removing. And they are really related to 2 specific groups that are in the list of our comps. And it takes us also some time to identify all the channels that are belonging to those 2 groups, to those 2 media groups. And that's the reason why it takes a bit of time, too, because we need to really identify those channels that are really belonging to those 2 companies.

Yes, just to add, in case it's not clear. So up till now, the sanctions that we've complied with have been on specific channels, and those have been identified by ARCOM, and the reason behind taking them down is because of the content, the nature of the content of those channels. The -- I would say that the ARCOM has now since March, so in the past couple of weeks, it's now expanded the scope of how it imposes sanctions. And it's expanded it to cover not just specific channels because of the content, but actually companies, content producers who are part of a list of companies in Russia where the French government has decided to freeze or deprive them of assets, if you like. So it's more complicated because instead of ARCOM just sending us a list and saying, right, this, you need to bring down this, this, and this. What they're saying is you have to stop broadcasting the content which is provided to our customers, which are still Tricolor and NTV-Plus, which are provided by these companies. And so we have to identify those ourselves, and that's what's taking longer. But we expect it to be completed by, I would say, the end of June.

On the financing plan, so coming back, as we mentioned in February for our H1 results, we continue to work actively on the financing plan in order to take into consideration and to cover our strategic road map as well as our medium-term target of a leverage ratio around 3x. In this context and as we speak, we are in active discussions, I would say, with potential capital providers, and we are assessing various solutions. And this is what I can say at this point and as we mentioned back in February, we will come back to the market as soon as we have settled a clear action plan.

That's very helpful, guys. If I could just follow up on the first question. The renewal rate, that will impact your fiscal year '26 numbers, is that the right way to think about it in terms of the timing and the lag effect?

Well, it will impact from Q4 of this year. And then, yes, it will impact into full year '26.

But it's been embedded in the -- also in the -- for the -- for our full year '24-'25 at this point. So it doesn't change anything in our guidance.

Yes. I think the other point to make is, as Christophe said, that the proportion of the U.S. DoD within our Government Services revenues is obviously -- is proportionately a lot less than it has been in recent years.

We will take our next question from Stéphane Beyazian, ODDO BHF.

Well, I've got 3, if that's possible. The first one is regarding the financing plan, and I fully understand that you're not in a position to say too much for sure about it. But let me try to push my luck a little bit there. I'd like to understand how much credit export can be a solution there? So I guess my question is, do you -- how much theoretically do you think you can cover of your future investment plans, thanks to credit export either at the French level or at the European level? And do you feel you have a strong case to be in a position to obtain these credit exports? My second question is regarding the order book that is down. I mean, you just mentioned that you're getting a lot of interest from other governments than the U.S. government. So are you currently in discussion indeed with some governments about future contract? And do you think that they can be quite sizeable? Anything you could say about that? And finally, it's a question I ask already and I'd be very interested to have an answer. But do you have an idea of how much of the current OneWeb order book is not yet activated and therefore contributing to the revenues?

Okay. Thanks, Stéphane. On the first question related to ECAs, I mean, we are already working very actively on ECAs. As you know, we have communicated that we had contracted with Airbus for an additional batch of 100 satellites. And clearly, we are in the process to -- we are discussing with the ECA agencies on -- in order to be able to include those in the scheme. I need to mention that we already have some ECAs. I mean, we -- at the OneWeb level, we already have ECA contracts and financing with India Exim Bank on one side. So, how much do we think that we can -- this is really depending on the future investment and on those investments. But all in all, I would think that -- I mean, we can plan between 50% and 70% -- well, I would say, 50% to 70% of the investment being part of the ECA financing plan. And yes, we believe that we have a strong case with this. It will also -- it will obviously depend on several factors. First of all, I mean, who are the providers of the industry for those future investments, being on the satellite side, but also on the launchers? So clearly, this needs to be taken into consideration. But overall, for both, again, satellites and launchers, because we've already done it, we think that we have a very strong case for the ECA financing. We are just in our discussion with the different agencies, I mean, we really are in the heart of the -- of this program. Moving to the government question, I mean, we have, I would say, a lot of discussion with different governments. I mean, as you clearly know, with the current geopolitics, there are many interest from many countries. I mean, starting with the European countries, but not only. I mean, I would say many non-aligned or countries seeking for alternative solutions or non-American, non-Chinese solutions for this type of service. And clearly, there are a lot of interest. Having said that, it's clear that it will take some time, and it will -- I mean, we are in processes that needs to go through a lot of administrations and approvals. So definitely, again, we are really confident that the market is significantly increasing for the many reasons that you know. But it will be a progressive increase, and it will be -- it will take a bit of time to really convert into real business. But as we see, I mean, we already have some significant contracts. As I just mentioned before, I mean, we were a few years ago or even not so long ago, U.S. government represented the vast majority of our government business. I mean, today, we have a significant increase of other governments into this. Joanna, you want to add something? And the last question is related to the OneWeb order book and how much of this has been activated. I mean the question is, I would say -- I mean, obviously, this is going not to be -- it's then the monthly revenues, but I would say around between EUR 170 million and EUR 200 million that have been from the current order book that it translated into monthly revenues.

That's very helpful. And just a quick follow-up regarding credit export. Obviously, IRIS2 is also, I guess, even if that's at the European level, that would also be eligible to credit export, I would guess, but at the European level in terms of financing.

Well, you mean our investment into IRIS2, right?

Yes.

I mean, yes, it's a different scheme, but it would be eligible. But could be -- I mean, again, depending on the provider, it would either be, I would say, regular ECA or strategic operations. But in both cases, they are very similar.

We will take our next question from Ben Rickett, New Street Research.

I have 2. The first one, just a follow-up on the ECA discussion. Do you think ECA financing, is that sufficient, do you think? Or are you also looking to raise equity capital, for example? And if so, how much equity capital do you think you would need to raise? And then the second question, just around IRIS2. I think there's still quite a lot of skepticism around the commercial revenue projections for IRIS2, the EUR 6.5 billion. Do you think there's any prospect of the European Union committing more of the revenues for that project so that you're less reliant on commercial revenues?

Okay. So clearly, for the first question, Ben, clearly, ECA are not going to be sufficient to cover the needs, I mean, for many reasons. First, because of the capacity. And secondly, because it won't solve -- as we said, I mean, our medium-term target is to go back to a leverage ratio around 3x. And clearly, ECA are accounted as debt definitely. So if it's only ECA, I mean, this would solve the issue of liquidity and the capacity of financing our investment needs. But obviously, in that case, I'm not sure that we would have a strong case with the ECA because the structure of the balance sheet of the company wouldn't be sufficient. So clearly, ECA is one of the -- it's one part of the financing plan for sure, but it's not the sole part. And clearly, in our financing plan, we are clearly looking, as I mentioned, for capital investors. It's too early, I think, for me to disclose any type of range or amount in what we are seeking for, as you know, reinforcement of our balance sheet structure. But I can say that it's a significant amount. On the second question, IRIS2, just to --maybe just to come back quickly on what is IRIS2 and how it is managed. I mean, clearly, it's a multi-orbit constellation. Within this multi-orbit constellation, there is a dedicated European payload, which is not what the operators are going to sell. Next to this, I would say, payload, specific payload for the European community, there is a commercial payload of which the LEO one will be for Eutelsat to commercialize and to manage. Having said that, do we have significant prospect? I mean, we are talking -- first of all, we are talking of -- I remind you that IRIS2 is due in 2030. So it's quite a long time away from now. And for us, IRIS2 would be the commercial side that will replace the current generation of our satellites. So it will be the continuation of, one, the current business, and continuation growth of the current business that will be covered by IRIS2. Having said that, do we have a potential also to cover some of this capacity through European requirements? I mean, being requirements or needs from the European states? I would say, certainly, yes. It's not a commitment from the different states of Europe as of today in the IRIS2 project. But there are obviously, as I said before, a lot of discussions with different governments, European, but also non-European governments. And there is quite a lot of -- there is a lot of appetite for this. So we are confident to develop the government business, including with IRIS2 and before IRIS2.

That's really helpful. And do you suppose the demand doesn't emerge for that commercial capacity, do you think the European Union would be prepared to commit some of that revenue?

I think it's far too early to discuss that. I mean, as Christophe said, we have EUR 1 billion backlog on OneWeb. The LEO proportion of IRIS2 will basically equate to the continuation of OneWeb, which means that in any case, when it gets launched, which is not until the early part of the next decade, it will -- in effect, it will already be derisked by the business, which is already on OneWeb. But yes, I mean, I think it's far too early to talk about what the -- with the demand isn't what it is that the EU will commit further at this point. I mean I would also remind you, if you look the -- if you look at Novaspace or if you look at any other of the agencies that forecast growth in our sector, I mean, the growth in demand for non-geostationary capacity is huge. So there's absolutely no reason for us to suppose that the demand won't be there. I mean if people didn't think demand for LEO was there, then we wouldn't be building OneWeb, Kuiper wouldn't be building or Amazon wouldn't be building Kuiper, and you wouldn't have other low orbit constellations. So that's clearly where the demand is for the sector.

We will take our next question from Aleksander Peterc, Bernstein.

I would have a few. So the first one is, can you, or are you willing to provide additional details or any color on the reasons behind the change in Eutelsat leadership? That will be my first one. And then I have a couple of follow-ups.

Nothing real to comment on this one, Aleksander. The only thing I can say is it's clear that we are in a situation or we are now -- Eutelsat is facing a different challenge. I mean, compared to we went through the telecom pivot first. Then we had all the PMI or all the OneWeb integration and the development of the -- the start of the development of the LEO business. And we are now moving a bit in terms of our environment and clearly, we will now need to go for a significant financing. And it's a new era that is opening. I mean, Eva has been with us for a bit, what, 3.5 years now, and she brought a lot of things to the company. I mean she really brought into life the telecom pivot. And she also developed the merge and the integration with OneWeb. And this is, I think, the only thing I can comment. I don't know if, Jo, you want to add something?

No, I don't think there's anything we can add, to be honest. I mean, you've seen a lot of speculation amongst yourselves as well as the press on what might be the reasons for that change, but we have no comment to make.

Okay. That's helpful, nonetheless. My second question is related to the government vertical. I'd like to understand what will be the midterm effects of the geopolitical decoupling between the U.S. and Europe? You've mentioned that demand from the U.S. DoD is lower, and that's partly reflecting these changes. I don't know if you agree with that, but it seems that that's a little bit the case. At the same time, you have a pivot towards more business in Europe being the only non-U.S. controlled LEO alternative for European governments. So that's probably a tailwind. And I'd like to know how this will play out. Should we now expect more growth as a rule as a portion of total, at least?

Well, I think as we said, I mean, the DoD is far lower than it used to be, as you know. I mean, there was a point 5 years ago when it was about 70%, 80%. So now it's much lower. I mean, I think -- it's difficult. But as we said earlier, I mean, this specific renewal coincided just with the start of the new administration and just with the -- when DOGE was at full -- full speed, and there are a lot of people kind of looking around to cut costs. And so I mean, it's difficult to see how it will pan out. We think it might be a bit of a knee-jerk reaction and that future campaigns may go back to a more normal rate. But at the moment, obviously, like in a lot of industries that are affected by the actions of the new U.S. administration, it's a bit difficult to know. So, not much visibility on that. I think I would say 2 things though. I mean, the first is obviously, and as you know and as we've communicated before, there's obviously, there's a lot of interest coming from Europe and that will take a bit of time to materialize. But we certainly, and I think other operators have said the same thing, we certainly think that interest is there. But it's not only European. I mean, we've seen a lot of interest, funny enough, from Canada, from Canadian institutions as well for different reasons, but related to the same core. I mean we've mentioned in the past, we've got quite a big contract with Taiwan because they don't want to be reliant on a U.S. operator. So I think all of that remains. And of course, the other thing, I think, more broadly, which is positive is what's going on now, what's gone on with Ukraine, and now what's going on in the political sphere is really showing that satellite capacity and space have become a much more strategic or I'd say, a central strategic part of the toolkit when it comes to sovereignty and defense. So I mean, yes, the specific actions of the U.S. are a bit difficult to kind of fathom in the short-term. But I think generally speaking, we're still very confident about the government business.

And just as a follow-up to that, isn't it the case that there's also a migration to LEO services in governments? And therefore, the U.S. will naturally pivot to exclusively Starlink, I suppose, for the time being, whereas Europeans will go to you? Is that what's going to happen? I mean, how quick is the migration to LEO for Government Services?

Well, I mean, like everything, I mean, there's definitely, there's a migration to LEO. We've -- I mean, I don't think that's specific to government. I think even with U.S. companies, it's not certain that anybody wants to be dependent on a monopoly. So I think that holds. I mean all of these people, particularly in government where you need a high level of security, in some cases, guaranteed minimum service levels then it's quite possible that they will use several providers for backup. So yes, I mean, I don't think I would say anything specific about government migrating to LEO. There are still government, things like troop welfare and other, there are still other applications which can still be served by GEO.

Okay. And then just the last point on IRIS2. Can you give us an idea how much of the total LEO capacity that will be built is going to be sellable commercial capacity for you and how much is going to stay with the EU? And as a part of that question, I understand that SES, it has access to the LEO IRIS2 capacity as well. They say they will commercialize 10% of it, if I'm not wrong. Is there any reciprocation with your access to their LEO IRIS2 part of the capacity? Is that of any interest to you at all? Or do you see no point in it?

So to answer -- first to answer your question, Aleksander, there are 2 different capacities. And the European capacity is quite small actually in terms of, because of the business cases, the applications. So the vast majority of the capacity is a commercial capacity. And it's a capacity that is bigger than the current available capacity with our current constellation, one. Second, yes, you are right. SES has access to part or a small part of the LEO capacity as well as we could have access to a small part of the MEO capacity. I mean it's a bit early at this point to really position ourselves whether we are going to use or not the MEO capacity. But I mean, really, our focus is to be a multi-orbit provider, essentially combining LEO and GEO. And anyway, MEO would be -- if it was to happen, it would be a very small part of the business.

We will take our final question from Wolfgang Felix, Sarria.

I was going to ask your Department of Defense sort of remaining contracts making up, I understand, now approximately 50%, 60% of your Government Services division. What's the average duration on these contracts from here on? I have absolutely no idea. Would it be 1 year, 3 years, 5 years? Then could you just tell me one more time, the Russia timing, why does it have no effect on 2025 or 2025, '26? And can you -- my third question would be, what is your GEO constellation-only, GEO constellation capacity utilization right now? Is there any way that I can calculate that? And my fourth and final question, can you tell us a bit more about your LEO business right now, i.e., OneWeb? And what is roughly, I guess, revenue in the various segments for the third quarter?

Maybe just -- I will answer on Russia first. The reason why it has no or very limited impact, there is a small impact. As you know, we have already removed 2 channels from our satellites. But those -- these impacts, I mean, are negligible compared to our business. And this is the reason why we say there's no significant impact for this year. Yes. And the -- again, it's -- we are only talking of a couple of months or 3 months for the remaining part of the year because our fiscal year will end at the end of June. So it's only a couple of months or 3 months' impact. And second, the full year impact, when we mentioned the EUR 16 million full year impact, I mean, then we are talking also of further channels that should be removed. And as Joanna mentioned before, I mean, there is a process of identifying the channels that are really impacted by the sanctions. And this is why also it takes a bit more time to do so. And as such, the expected impact for this fiscal year '25 is nil or very limited.

So on the U.S. DoD, I mean, the contracts vary in length, but a lot of them -- so there are 2 renewal seasons, there's the fall and the spring. I mean, typically, without going into a lot of detail, we -- typically, the way it works with the procurement is that they sign a kind of a 5-year framework agreement. But within that framework agreement, they have the possibility to renew or they confirm on an annual basis. In fact, the only thing that we take into the backlog, for example, for those contracts is a year. But we can -- I mean, I think probably it would be easier if we took that question offline. And similarly, for your questions about can we speak about OneWeb? Yes. I mean, specifically on figures, we don't break out OneWeb. We don't report OneWeb separately from the Group. But if you want to go into more -- I mean, if you want to have a more detailed chat about OneWeb, I suggest you -- I'll ping you after this call, and then we can do that offline, if that's okay with you.

Fantastic. Yes, absolutely. And then I think the GEO capacity utilization, I'm also happy to take that offline.

No, no. I mean, GEO capacity, it varies. I mean we don't provide a fill rate. It varies. I mean, we don't provide the fill rate because it's not actually a very helpful indicator because it's more the value than the volume. I mean it just depends. There are video satellites where the capacity utilization is still very high, so probably above 75%, 80%. And there are some GEO connectivity satellites where the utilization rate is -- or some of the older satellites, I would say, the utilization rate is lower. I mean if you take something like Quantum, the utilization rate is very high. Some of the older connectivity would be lower than that, maybe 50%.

That is all the time we have for question-and-answer session for today. So I'll now hand you back to your host for closing remarks.

Okay. Thank you very much for your attention. And now we will meet next time for our full year results at the beginning of August. So with that, we wish you a very nice evening and talk to you very soon. Thank you. Bye-bye.

Thank you for joining today's call. You may now disconnect.