Hello, and welcome to Eutelsat Group Trading Update. Please note this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I'll now turn the call over to Eva Berneke, CEO. Please go ahead.
Thank you. Good morning, and thank you all for joining this early morning call at a short notice. I'm Eva Berneke. I'm the CEO of Eutelsat Group, and I'm joined here with Christophe Caudrelier, our CFO. The objective of this call is to provide an update of what we're seeing with current trading. As you know, we've been trading as a combined Eutelsat OneWeb group since October 2023, and over the past four months, we've undertaken a deep and granular assessment of where we are in the current business.
Let me take you through a few of the highlights. Our legacy Eutelsat businesses are on track with a return to top-line growth for the financial year 2023-2024, based essentially on the entry into service of new satellites with Eutelsat 10B and KONNECT VHTS.
The results of the LEO activities of OneWeb are also progressing well, but are running behind schedule relative to the original roadmap. The initial delay of satellite launches is now mitigated, and since January, we have all the satellites in place. However, the ground infrastructure shows two key reasons behind a delay in terms of preparation of full ground infrastructure. Firstly, a delay in the availability of the ground network that impacts revenue, especially mobility and in certain geographies where market access is still outstanding.
We now have a much better assessment of the various stages of this ground rollout. In addition, and secondly, a revenue mix that's more oriented towards the sale of user terminals, which is important for ramping up revenues. However, this impacts margins. The deployment of the ground network is progressing well and towards a 90% completion during the Q2 of 2024.
However, that's our Q4 in our financial year. We continue to see a very strong momentum in the take-up of pre-signed commitments, what we call take-or-pay, with major customers, so we remained very confident on the commercial customer interest in the capacity. Nevertheless, this dynamic will not suffice to close the gap relative to our near-term expectations in this financial year.
In consequence, we're adjusting our financial objectives for this financial year, 2023-2024, with revenues now expected in the range of EUR 1.25 billion-EUR 1.3 billion, and an Adjusted EBITDA expected range of EUR 650 million-EUR 680 million. Cash CapEx is expected to remain in the previously guided range of EUR 725 million-EUR 875 million per annum on an average from 2025 to 2030.
CapEx for this financial year is expected in the range between EUR 600 million and EUR 650 million. For the financial year 2025, we're suspending our previous objectives to allow for more accurate assessment of the prospects in the context of the rapid development of OneWeb's businesses, and we'll update them on the occasion of Eutelsat's full year results on August 2, 2024.
In the meantime, as a reminder, we'll report our first half results on February 16, where we also have an opportunity to go into more detail than today on the individual businesses. And of course, a lot of the things that you might wanna ask at this occasion, we cannot necessarily answer today. So with that, thank you for your attention and I'm open for any questions you might have, and Christophe will help me potentially answer them. Thank you.
Thank you. As a reminder, if you would like to ask the questions on today's call, please press star one on your telephone keypad. We'll take our first questions from Roshan Ranjit from Deutsche Bank. Your line is open. Please go ahead.
Great. Morning, everyone. Thanks for the questions. I've got two please. I guess they're kind of related. You have suspended the FY 25 guidance, but reading the commentary suggested a slower ramp-up of the OneWeb business, and Eva, you mentioned some of the take-or-pay deals. If that's the case, why haven't you kind of got that, you know, longer-term visibility on the FY 25 guidance?
I mean, is it... Could this ramp up take, you know, even longer than you had anticipated? Maybe tied to that, we were expecting global coverage of the OneWeb network, I guess around now, I think you said early 2024. Is that expected to be a bit slower now? So we're still dealing with the kind of North America Arctic coverage, at this stage. Thank you.
Okay. Let me maybe take the second first, because it's true that we had expected global coverage by early 2024, so around now you're right, which is true also for the satellite coverage. So the satellite coverage is actually in place. However, to actually fully utilize the capacity, the ground network is also necessary. And ground network is building of gateways, which are needed.
We need around 40 gateways, and we are around just below 30 right now of those gateways. Which means that for certain geographies, like India and Saudi Arabia, where we have significant take-or-pay, we are still waiting to the to this gateway being operational ready.
Then there are other countries where the landing rights, either of our own or our distributors, are still outstanding, pending. And again, India is in the very final phases of that, but also Thailand and a few other countries, Turkey, still have landing rights outstanding. So that's what we expect to be at 90% finalization in Q2. There's still gonna be a few gateways that might be only finalized in the later part of the year to get to the full global coverage. So those are, that's the granularity we're getting on the actual built-out of the OneWeb.
We've also tied that closely into where the take-up pace, because as soon as the network will be operational ready and landing rights are secured, we'll be able to actually start converting into revenues. Which is also why we are suspending the FY 25 guidance. But I'd also say it's probably a little bit as we have always been guiding. We have never been guiding far into the future. We've been guiding for the in-year performance. And given that we'll have a lot of these this finalization in the network in Q2 and over the summer, I think the ramp-up of revenue is just very uncertain.
We believe that it will come, but giving you very precise numbers for FY 25 is simply not possible right now, when we expect this kind of rapid growth for the next for the next couple of years, based on actually an increasing pipeline of committed deals, which continues to go up across different geographies.
That, that's clear. Thank you. Sorry, just so if I may add, just on the kind of extended delay now, you refer to the EUR 1.1 billion backlog. Can I check, is that fully protected or what component of that is protected? Is there a risk to that given the delay? Thanks.
To the EUR 1.1 billion pipeline, as you know, it's typically an average age of contracts with 5 years, and a lot of them actually are confirmed, they're certain. Out of the EUR 1.1 billion, and we'll probably start netting that out, is a Eutelsat take-or-pay of EUR 275 million. So, we will start netting that out, but we have seen continued increase with a couple of new take-or-pay signed just over the last month or two. But it is secured business. It will be built as soon as the network is operational, and there's no dependency or no kind of cutoff date for this.
It simply needs that the gateways, as you know, there's a large one in Saudi with NEOM. The gateway, there's one gateway operational, there's a second one coming, so we're slowly starting to actually convert that into revenues as well. So know that that pipeline is secure and continues to grow.
Thank you.
Thank you. As a reminder, please signal by pressing star one, if you would like to ask a question. We will take our next questions from Tom Singlehurst, from Citi. Your line is open. Please go ahead.
Yeah, good morning, Tom here from Citi. Thanks for the update. A couple of questions. I just wanted to specify a few things, just to make sure I've got the numbers right. The first thing is on that backlog, the EUR 1.1 billion was... A similar figure, was close to EUR 1 billion back at the first quarter. So I make sure that I've read that correctly, that it's slightly up. But then linking to the last question, you know, to what extent is that a melting ice cube? Because is there a risk to the back end of that backlog if, you know, commercialization of OneWeb is repeatedly delayed?
That was the first question. Second question on the CapEx. I think. Well, the range of guidance, the EUR 725-EUR 875 average is the same. Previously, that was, I think, 2024-2030. So I just wanted to double-check that that sort of consciously had been moved back by a year, and how the figure for 2024 compares with your previous guidance. Have you actually reduced your CapEx expectation for this financial year? Thank you.
Thank you, Tom, for your questions. And let me again start with the second one, because you are spot on. We have taken out the first year and actually reduced that to be between EUR 600-EUR 650. So not, you know, at the lower than the expected average, but that average remains from 2025 to 2030. So, the previously guided EUR 725-EUR 875 is on an average from 2025 to 2030, and it's a lower level CapEx for this year expected between EUR 600-EUR 650.
So that is correctly understood, and we haven't previously actually given the 2024 numbers, so that is additional information at the lower range of the CapEx. On the first question, on the backlog, no, it's not a melting ice cube.
It is, as also was the first question, a backlog that we are quite certain about in terms of take-or-pay, its customers who are actually waiting for us to get done with the ground infrastructure. We have actually, these months, quite intense or good discussions with Saudi, who actually wants to start opening. India is the same thing. They say two gateways in India.
One is very close to completion, the other one in the south is gonna take a couple of months more. But also there is a very high willingness to actually start using the capacity. So I don't see this at all as a melting ice cube. Almost the contrary, I think there's quite a lot of customers right now asking for additional take-or-pay.
We're in a couple of discussions with customers who's taken a first chunk and now are discussing to increase that. And it did go up from around EUR 1 billion to EUR 1.1 billion. But it is actually above EUR 1.1 billion now, it's just the rounding factor that brings it down. So I think we added around EUR 150, EUR 150 million over the last couple of months to the backlog to be very precise, but that gets into the, the, the second digit, which we're not communicating. So I hope that was precise enough, Tom.
Yeah, definitely. And one follow-up. I mean, one of the questions we get, I suppose unsurprisingly, is around liquidity and cash flow. So that new, you know, comment on the CapEx is obviously very helpful. But I mean, can you just talk about, to the extent you can, the group's sort of capital position? I mean, and in particular, whether the next gen can be financed without recourse to more capital, given I think there's an October 2025 refinancing due.
Yeah, I'll try to balance a little bit. And I think we are, as you know, working on also the returns from the industry on the RFP that came back this fall. And right now there's a phase of co-engineering going on with a couple of consortiums, which is gonna take another month or two before we get the results back from there. And that's, of course, also why we're not seeing huge CapEx spend. We're seeing a little bit of CapEx spend on the next gen in this year, but the push where the higher CapEx on the average is coming in from 2025 to 2030.
But we are starting to get a better visibility on it, and yes, we still expect this to be, given that we've also delayed the big spending on next gen with about a year, that actually fits well also with a slightly slower ramp-up.
Thank you very much.
Thank you. We have no further questions in the queue. As a final reminder, if you would like to ask a question, please press star one on your keypad now.
Any other questions? Otherwise, I am hoping to see all of you, or here, at least all of you, for the earnings call for the first half results on February 16, which is just a few weeks away. Where we'll of course also be able to give you much more granular detail, both on the solid performance of the Eutelsat legacy businesses, but also on these delays we're seeing.
But we wanted to bring this out so you at least have a couple of weeks to prepare all the questions that we'll be taking on February 16 . With that, thank you for joining us for this morning's call, bright and early, at least, for the French part here, and I'm looking forward to talking to you all, in a couple of weeks' time. Thank you.
Thank you for joining today's call. You may now disconnect.