Anti-corruption and Bribery• Supplier Code of Conduct
• Group Wide Code of Conduct
• Whistleblowing Hotline
• Compliance Guidelines
• Ambitions and Purpose ›› page 5
• Corporate Governance ›› page 60
• Ethics ›› page 54
GRI 102, 103, 205
Principal Risks and impact from Business Operations• Shift in Consumer Trends
• Customer Dissatisfaction
• Liquidity Risks
• Regulatory Risks
• Principal Risks and Uncertainties ›› pages 78–81
• Governance section on Managing Risks ›› page 78
• Corporate Responsibility ›› page 73
• ESG ›› pages 30–58
Non-financial Key Performance Indicators• Employee Turnover, Diversity Ratio
• Employee Training
• Technical Reach and TV Channel Count
• Net Promotor Score
• CO
2
emissions
• Employee Matters ›› pages 30–58
• Operational and Strategic report >> page 20
• Operating our Business >> page 48
• Climate Action >>page 38
Corporate Governance
60 Shareholder structure
61 Chairman’s report
on Corporate Governance
63 Board of Directors & Committees
70 Senior Leadership Team (SLT)
73 Internal control procedures
78 Principal risks
Remuneration Report
82 The Remuneration policy
86 Remuneration report
CORPORATE
GOVERNANCE &
REMUNERATION
3
SES ANNUAL REPORT 202160
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
CORPORATE GOVERNANCE
SHAREHOLDER STRUCTURE
SES has been listed on the Luxembourg Stock Exchange since 1998
and on the Euronext Paris Stock Exchange since 2004.
Shareholder Structure as of 31 December 2021
SES Shareholders
Number of
Shares
Voting
participation
Economic
Participation
Registered shares4,616,7300.81%1.00%
FDRs (free float)359,092,44165.86%78.04%
FDRs held by SES7,748,4290.00%1.68%
1
FDRs held by SES Astra for SES12,000,0000.00%2.61%
2
Total A Shares383,457,60066.67%83.33%
BCEE60,614,72410.88%5.27%
SNCI60,607,16110.88%5.27%
Etat du Luxembourg64,506,91511.58%5.61%
B Shares held by SES Astra for SES6,000,0000.00%0.52%
3
Total B Shares191,728,80033.33%16.67%
Total shares (actual)
4
575,186,400100.00%100.00%
Total shares (economic)
4
460,149,120
1 At 31 December 2021, SES held 7,748,429 FDRs for the purpose of its employee option program. SES does not exercise voting rights.
2 At 31 December 2021, SES Astra on the basis of article 415-23 of the Luxembourg companies’ law, held 12,000,000 FDRs, to be cancelled in accordance with the programme of
6 May 2021. SES Astra does not exercise voting rights.
3 At 31 December 2021, SES Astra on the basis of article 415-23 of the Luxembourg companies’ law, held 6,000,000 B Shares, to be cancelled in accordance with the programme of
6 May 2021. SES Astra does not exercise voting rights.
4 Pro forma number of total shares (actual) will be 557,186,400 and total shares (economic) will be 445,749,120 post cancellation of shares held by SES Astra in accordance with the
programme of 6 May 2021.
The Company has issued two classes of shares: A-shares and
B-shares. Each share is entitled to one vote. One B-share carries 40%
of the economic rights of an A-share.
The ratio of A-shares to B-shares must be maintained at 2:1 as
required by the Articles of Incorporation.
A-SHARES
A-shares are held by private and institutional investors.
The listed security is the Fiduciary Depositary Receipt (“FDR”), listed
on the Luxembourg and Euronext Paris Stock Exchanges. Each of
these is backed by one A-share and has all the rights attached to that
share, except the right of attending the general meetings of share-
holders.
In order to attend a general meeting, at least one registered share must
be held. Voting rights may be exercised by notifying the Fiduciary
(Banque et Caisse d’Epargne de l’Etat) of the voting intention.
B-SHARES
The State of Luxembourg holds a direct 11.58% voting interest in the
company. Banque et Caisse d’Epargne de l’Etat and Société Nationale
de Crédit et d’Investissement each hold a direct 10.88% voting inter-
est in the Company. These shares constitute the Company’s B-shares.
A B-share has 40% of the economic rights of an A-share or, in case
the Company is dissolved, is entitled to 40% of the net liquidation
proceeds paid to A-shareholders. The B-shares are not listed on any
exchange and do not back a tradable security.
SES ANNUAL REPORT 202161
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
CHAIRMAN’S REPORT ON
CORPORATE GOVERNANCE
The Company follows the ‘Ten Principles of Corporate Governance’
adopted by the
Luxembourg Stock Exchange (its home market),
as last revised in December 2017. SES meets all the recommendations
made by the ‘Ten Principles’.
SES also complies with the governance rules for companies listed in
Paris, where the majority of the trading in SES FDRs takes place. In
the instance of conflicting compliance requirements, SES follows the
rules of the home market.
ORGANISATION PRINCIPLES
Created on 16 March 2001 under the name of SES GLOBAL, SES was
incorporated in Luxembourg. On 9 November 2001, SES became the
parent company of SES ASTRA, originally created in 1985. A copy of
SES’ articles of incorporation, in its latest version, is available in the
corporate governance section of the Company’s website.
THE ANNUAL GENERAL MEETING OF SHARE-
HOLDERS
Under Luxembourg company law, the Company’s annual and / or
extraordinary general meetings represent the entire body of share-
holders of the Company. They have the widest powers, and resolutions
passed at such meetings are binding upon all shareholders, whether
absent, abstaining from voting or voting against the resolutions.
The meetings are presided over by the Chairperson of the Board or,
in his absence, by one of the Vice Chairpersons of the Board or, in
their absence, by any other person appointed by the meeting. Any
RESTRICTIONS ON OWNERSHIP
No A-shareholder may hold, directly or indirectly, more than 20%,
33% or 50% of the Company’s shares unless he has obtained prior
approval from the meeting of shareholders in accordance with the
procedure described here below. Such limit shall be calculated by
taking into account all the shares held by the A-shareholder.
A shareholder or a potential shareholder who envisages to acquire by
whatever means, directly or indirectly, more than 20%, 33% or 50% of
the shares of the Company (a ‘demanding party’) must inform the
Chairperson of the Board of the Company of such intention.
The Chairperson of the Board will inform the government of Luxem-
bourg of the envisaged acquisition. The government may oppose the
acquisition within three months from such information if it deter-
mines that such acquisition would be against the general public inter-
est.
In case of no opposition from the government of Luxembourg, the
Board shall convene an extraordinary meeting of shareholders which
may decide at a majority provided for in article 450-3 of the law of
10 August 1915, as amended, regarding commercial companies, to
authorise the demanding party to acquire more than 20%, 33% or 50%
of the shares. If the demanding party is a shareholder of the Company,
it may attend the general meeting and will be included in the count
for the quorum but may not take part in the vote.
INFORMATION EXCHANGE IN REGARD TO
CORPORATE GOVERNANCE
The Company communicates transparently with its shareholders via
the
corporate governance section of its website and through the
bourg law, the Company allows shareholders to receive all corporate
documentation, including the documents for shareholder meetings,
in electronic format.
In this context, the SES website contains a regularly updated stream of
information, such as the latest version of the Company’s main governance
documents, including the articles of incorporation, the corporate govern-
ance charter (including the charters of the various committees set up by
the Board) and the separate sections on the composition and the mission
of the Board, the Board’s committees and the Executive Committee
1
.
The SES website also contains the SES Code of Conduct and Ethics,
the SES Dealing Code, the financial calendar and any other informa-
tion that may be of interest to the company’s shareholders.
INVESTOR RELATIONS
SES’ dedicated Investor Relations function reports to the Chief Finan-
cial Officer and works closely with the CEO. Its purpose is to develop
and coordinate the group’s external financial communications and
interactions with equity and debt investors, investment analysts,
credit rating agencies, financial journalists and other external audi-
ences, to monitor stock market developments, and to provide feed-
back and recommendations to the SES SLT.
The Head of Investor Relations is responsible for the definition and
execution of SES’ active Investor Relations programme and partici-
pation in investor conferences and similar events. Investor Relations
also works closely with the Chief Legal Officer to ensure that the
group’s external communications are compliant with all applicable
legal and regulatory requirements.
The SES Investor Relations team will be pleased to assist existing or
potential shareholders with any questions they may have in relation
to SES. Further, the SES IR Website contains information on all
recent financials, analyst coverage, financial calendar and Company
news, and is updated on a regular basis.
1 The Executive Committee is internally called the Senior Leadership Team (SLT).
Therefore, going forward the term SLT will be used instead of Executive Committee.
SES ANNUAL REPORT 202162
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
shareholder who is recorded in the company’s shareholder register
14 days before the meeting is authorised to attend and to vote at the
meeting. An A-shareholder may act at any meeting by appointing a
proxy (who does not need to be an A-shareholder).
The annual general meeting (‘AGM’) is held on the first Thursday in
April at 10:30 am CET. Each registered shareholder will receive written
notice of the AGM, including the time of the meeting and the agenda,
at least 30 days prior to the meeting. Holders of the company’s FDRs
will be represented at the meeting by Banque et Caisse d’Epargne de
l’Etat acting as fiduciary. Each FDR will represent one A-share. If a
holder of FDRs wishes to attend the AGM of shareholders in person,
that shareholder will need to convert at least one FDR into an A-share.
Notice of the meeting and of the proposed agenda will also be pub-
lished in the international press. The fiduciary will circulate the draft
resolutions to both international clearing systems, Clearstream and
Euroclear, allowing FDR holders to give their voting instructions to
the fiduciary in time for the meeting. At the same time, the draft res-
olutions will be made available on the Company’s and on the fiduci-
ary’s website. Unless the fiduciary has received specific instructions
from the FDR holder, the fiduciary will vote in favour of the proposals
submitted by the Board. One or more shareholders owning together
at least 5% of the shares of SES have the right to add items on the
agenda of the AGM and may deposit draft resolutions regarding items
listed in the agenda or proposed to be added to the agenda. This
request will need to be made in writing (via mail or e-mail) and
received no later than the twenty-second day preceding the AGM and
will need to include a justification or draft resolution to be adopted
at the AGM. The written request must include a contact address to
which the Company can confirm receipt within 48 hours from the
receipt of the request.
No later than fifteen days preceding the AGM, the Company will then
publish a revised agenda.
The meeting may deliberate validly only if at least half of the A-shares
and at least half of the B-shares are represented. In the event that
the required quorum is not reached, the meeting will be reconvened
in accordance with the form prescribed by the articles of incorpora-
tion. It may then validly deliberate without consideration of the num-
ber of represented shares.
The proceedings are mostly held in French, but an English translation
is provided by the Company. Interventions in English will be translated
into French. A French version of the AGM minutes and the results of
the shareholders’ votes will be published on the SES website within
15 days after the AGM.
With the exception of the procedure described above regarding when-
ever an A-shareholder intends to hold more than 20%, 33% or 50%,
all the resolutions of the meeting are adopted by a simple majority
vote except if otherwise provided for by Luxembourg company law.
In 2021, the AGM was held on 1st April. Following the recommenda-
tions from the government in the context of the Covid-19 pandemic,
shareholders who had expressed an interest to attend the meeting
were asked to give a proxy to the Chairperson of the Board and/or
the Company’s outside legal counsel, and to vote on the resolutions
ahead of the meeting. The AGM itself was transmitted via Webex.
Shareholders were further invited to send their questions ahead of
the meeting, although additional questions were asked during the
meeting. The AGM was attended by 98.21% of the Company’s
shareholders, excluding the 5,459,979 FDRs held by the Company. All
resolutions submitted to the shareholders were approved by comfort-
able majority votes. The detailed results of the shareholders’ votes
are available on the company’s website.
SES ANNUAL REPORT 202163
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
BOARD OF DIRECTORS &
COMMITTEES
FRANK ESSER
Chairman of the Board
SERGE ALLEGREZZA
Director
PAUL KONSBRUCK
Director
(until 1st December 2021)
JACQUES THILL
Director
TSEGA GEBREYES
Vice-Chairperson of the Board
PETER VAN BOMMEL
Chairman of the
Audit and Risk Committee
RAMU POTARAZU
Director
FRANÇOISE THOMA
Chairperson of the Remuneration
Committee
ANNECATHERINE RIES
Chairperson of the Nomination
Committee & Vice-Chairperson
of the Board
BÉATRICE DE CLERMONT-
TONNERRE
Director
KAJERIK RELANDER
Director
KATRIN WEHRSEITER
Director
SES ANNUAL REPORT 202164
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
BOARD OF DIRECTORS & COMMITTEES
The Board of Directors is responsible for:
• Defining the Company’s strategic objectives as well as its overall
corporate plan;
• Approval, upon proposal from the Senior Leadership Team of the
annual consolidated accounts of the Company and the appropriation
of results, the group’s medium-term business plan, the consolidated
annual budget of the Company and the management report to be
submitted to the meeting of shareholders; approval of major invest-
ments and responsible vis-à-vis shareholders approval third parties
for the management of the Company, management which it delegates
to the SLT in accordance with the company’s internal regulations.
• As of 31 December 2021, the Board was comprised of 11 members
of which 7 were considered independent.
MEMBERS OF THE BOARD
AS OF 31 DECEMBER 2021
Frank Esser
Chairman of the Board
Chairperson of the Strategic Committee
• Frank Esser became a director on 11 February 2020.
•
He is the former Chairman and CEO of SFR, the leading private
French Telecom Operator. In this function he also served as Board
Member of Vivendi Group. Prior to joining SFR, Mr Esser held
several managerial positions with Mannesmann group. He also
serves as Vice Chair of Swisscom.
• He was re-elected as Chairman of the Board on 1 April 2021. He is
the Chairperson of the Strategic Committee and a member of the
Nomination Committee and of the Remuneration Committee of SES.
•
Mr Esser holds a PhD in Managerial Economics and an MS in
Economics both from the University of Cologne.
• Mr Esser is a German national. He is an independent director.
Tsega Gebreyes
Vice-Chairperson of the Board
• Mrs Tsega Gebreyes became a director on 4 April 2013.
• She is the Founding Director of Satya Capital Limited. She served as
Chief Business Development and Strategy Officer of Celtel Inter-
national BV and Senior Advisor to Zain.
• She was also Founding Partner of the NAOF, LLP and has worked with
McKinsey and Citicorp.
• Mrs Gebreyes is a director of Satya Capital Limited, LSEG and Airtel
Plc and was a director of Sonae. She is a Senior Advisor to TPG Growth.
•
She is Vice-Chairperson of the Board and a member of the Nomination
Committee of SES.
• She has a double major in Economics and International Studies from
Rhodes College and holds an M.B.A. from Harvard Business School.
• Mrs Gebreyes is an Ethiopian national. She is an independent director.
Anne-Catherine Ries
Vice-Chairperson of the Board
Chairperson of the Nomination Committee
• Mrs Ries became a director on 1 January 2015.
• Mrs Ries is currently First Government Advisor to the Prime Minis-
ter and Minister for Media and Telecommunications in Luxembourg,
in charge of media, telecom and digital policy. Prior to this appoint-
ment in 2019, her focus over the last two decades has consistently
been on developing the tech and digital innovation ecosystem in
Luxembourg, i.a. through the launch of the “Digital Luxembourg”
initiative in 2014. She joined the Luxembourg civil service after
starting her professional career at an American law firm in Paris.
• Mrs Ries holds a law degree from the University of Paris II and the
University of Oxford, and a postgraduate LL.M degree from the
London School of Economics.
• Mrs Ries is the Chairperson of the Nomination Committee of SES.
•
Mrs Ries is a Luxembourg and French national. She is not an
independent director because she represents an important share-
holder.
Serge Allegrezza
• Mr Allegrezza became a director on 11 February 2010.
•
He is currently the Director General of Statec, the Luxembourg
Institute for Statistics and Economic Studies, a post he has held
since April 2003. He is a certified IDP (INSEAD).
• He was Conseiller de Gouvernement 1ère classe at the Ministry of
Economics, responsible for internal market policy, and is the Chairman
of the Observatory for Competitiveness. He is also the Chairman
of the Board of Directors of POST Luxembourg and of the Board of
LuxTrust i.n.c and former president of the Conseil Economique et
Social.
•
Mr Allegrezza, was a part-time lecturer at the IAE/University of Nancy 2,
has a Master in economics and a PhD. in applied economics.
• Mr Allegrezza is a member of the Audit and Risk Committee and of
the Remuneration Committee of SES.
• Mr Allegrezza is a Luxembourg national. He is not an independent
director because he represents an important shareholder.
Peter van Bommel
Chairman of the Audit and Risk Committee since 2 August 2021
• Mr van Bommel became a director on 2 April 2020.
•
Mr van Bommel was Chief Financial Officer and member of the
Board of Management of ASM International from August 2010 until
May 2021.
•
He has more than twenty years of experience in the electronics and
semiconductor industry. He spent most of his career at Philips,
which he joined in 1979.
•
He sits on the Board of Aalberts, Nedap, Bernhoven Foundation
and the Amsterdam Business School, where he is the Chair of the
EMFC Curatorium. In the past he was also a Director of several other
listed companies a.o. KPN.
• Mr van Bommel holds an MSc in Economics from Erasmus Univer-
sity in Rotterdam.
•
Mr van Bommel is the Chairperson of the Audit and Risk Committee,
a member of the Remuneration Committee and of the Strategic
Committee of SES.
• Mr van Bommel is a Dutch national. He is an independent director.
SES ANNUAL REPORT 202165
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
Béatrice de Clermont-Tonnerre
•
Mrs Béatrice de Clermont-Tonnerre has held several executive posi-
tions at Google including Director AI Partnerships EMEA and
Southern Europe Monetisation Director for six years until Q3 2019.
• Before that, Mrs de Clermont-Tonnerre worked 15 years for Groupe
Lagardère in different Executive roles including Senior VP for Cor-
porate Development. She previously worked at Groupe Canal Plus,
having started her career with Matra Marconi Space. She is the
Lead Director of Grupo Prisa (Spain) and a member of the Board
of Directors of Klépierre (France). She is an Investor and Executive
Committee Member of Kayrros, a climatetech company pioneering
pollutant emissions quantification along the energy supply chain.
• Mrs de Clermont-Tonnerre holds a Master’s degree in Politics and
Economics from the Institut d’Etudes Politiques in Paris and an
MBA from ESSEC Business School, France.
•
Mrs de Clermont-Tonnerre is a member of the Nomination Commit-
tee and of the Strategic Committee of SES.
•
Mrs de Clermont-Tonnerre is a French national. She is an independ-
ent director.
Paul Konsbruck
(director until 1 December 2021)
• Mr. Konsbruck became a director on 13th June 2019. He resigned on
1st December 2021. He was First Government Councillor at the
Ministry of State and Chief of Staff to the Prime Minister and Minister
for Media and Communications in Luxembourg as of 1 January 2016.
He now is CEO of LuxConnect S.A.. Paul Konsbruck holds a Master
degree in Literature and Linguistics from the University of Heidel-
berg, and participated in the Senior Executive Fellow Programme at
the Harvard Kennedy School. He was a Director of ENCEVO SA and
is the government commissioner to CLT-UFA/RTL Luxembourg.
• He was a member of the Nomination Committee and of the Strategic
Committee of SES.
•
Mr. Konsbruck is a Luxembourg national. He was not an independent
director because he represented an important shareholder.
Ramu Potarazu
• Mr Potarazu became a director on 20 February 2014.
• He was the CEO of Binary Fountain. He is the Founder and former
CEO of Vubiquity.
• Prior to founding Vubiquity, Mr Potarazu spent 15 years in various
positions at Intelsat (1991–2006). He became Intelsat’s Vice
President of Operations and CIO in 1996 and its Vice President,
Commercial Restructuring in 2000. In 2001 Mr Potarazu became
President of Intelsat Global Service Corporation and from 2002 to
2006 he was President and Chief Operating Officer of Intelsat Ltd.
Prior to joining Intelsat, Mr Potarazu held several engineering
positions.
•
Mr Potarazu graduated with a BS in Computer Science and in
Mathematics from the Oklahoma Christian University. He also holds
an MSc in Electrical Engineering from the John Hopkins University
and was a member of the Stanford Executive Program.
•
He is a member of the Remuneration Committee and of the
Strategic Committee of SES.
• Mr Potarazu is a US national. He is an independent director.
Kaj-Erik Relander
• Mr Relander became a director on 6 April 2017.
•
Mr Relander worked for the Finnish National Fund for Research and
Development prior to joining Sonera Corporation where he held
several management positions, including the position of CEO. He
left Sonera in 2001 to join Accel Partners, a private equity and venture
capital group before joining the Emirates Investment Authority in
2009 where he was a member of its Investment and Management
Committee.
•
Mr Relander graduated from the Helsinki School of Economics with
an MSC in Economics. He also holds an MBA from the Helsinki
School of Economics having completed part of it at the Wharton
School, University of Pennsylvania (USA), and studied also for a
PhD at the Wharton School and the Aalto University, Helsinki.
•
Mr Relander is a board member of the sovereign wealth fund of
ADQ and ADGM, Abu Dhabi Global Markets. He is Chairman of the
Investment Committee at the private equity fund Apis.pe and a
board director of Starzplay Arabia.
•
He is a member of the Audit and Risk Committee and of the
Nomination Committee of SES.
• Mr Relander is a Finnish national. He is an independent director.
Jacques Thill
• Mr Thill was co-opted as director of SES on 2 December 2021 as
replacement for Mr Paul Konsbruck.
• Mr Thill currently serves as First Government Advisor to the Prime
Minister and Coordinator at the Luxembourg Prime Minister’s
Office. Since 2018 he is also the Government Delegate to the State
Intelligence Service. Mr Thill joined the Luxembourg diplomatic
service in 2004 and has represented Luxembourg in numerous bi- and
multilateral negotiations. His diplomatic career includes postings
to the Luxembourg Permanent Representation to the United
Nations in New York and to the Luxembourg Embassy in Moscow,
as well as to the EU High Representative for the Common Foreign
and Security Policy at the Council of the European Union in Brus-
sels. From 2009 to 2013, Mr Thill served as diplomatic advisor to
the Prime Minister. In 2013, he was appointed Deputy Secretary
General of the Luxembourg Government, before becoming Secretary
General of the Luxembourg Government until June 2020.
• Mr Thill holds a Master in European and International Law from the
Paris 1 Panthéon-Sorbonne University and an MA in European Political
and Administrative Studies from the College of Europe in Bruges
where he specialized in European Competition Law and European
Foreign Policy.
• From 2015 until 2021, Mr. Thill has been a member of the Board of
Directors of LUXGOVSAT S.A.
•
Mr Thill is a member of the Nomination Committee and of the
Strategic Committee.
• Mr Thill is a Luxembourg national. He is not an independent director
because he represents an important shareholder.
SES ANNUAL REPORT 202166
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
Françoise Thoma
Chairperson of the Remuneration Committee
• Ms Thoma became a director on 16 June 2016.
• Ms Thoma is President and Chief Executive Officer of Banque et
Caisse d’Epargne de l’Etat, and a member of the Boards of Directors
of Cargolux International Airlines S.A., Luxair S.A., the Luxembourg
Stock Exchange and of Enovos Luxembourg S.A.
•
She was a member of the Luxembourg Council of State from 2000–
2015 and holds a PhD in Law from the Université de Paris II
Panthéon-Assas and an LL.M. from Harvard Law School.
• Ms Thoma is the Chairperson of the Remuneration Committee and
a member of the Audit and Risk Committee of SES.
•
Ms Thoma is a Luxembourg national. She is not an independent
director because she represents an important shareholder.
Katrin Wehr-Seiter
Chairperson of the Audit and Risk Committee until 2 August 2021
• Mrs Wehr-Seiter became a director on 1 January 2015.
•
She is a Managing Director of BIP Investment Partners SA and a
Managing Director/Partner of BIP Capital Partners.
• Prior to joining BIP, she served as a Principal at global investment firm
Permira and worked also as an independent strategy consultant as
well as a Senior Advisor to international private equity group Bridge-
point. She started her professional career at Siemens AG where she
held various positions in strategy consulting and engineering. She
serves as a director of Bellevue Group and several non-listed corpo-
rations.
• Mrs Wehr-Seiter holds an MBA from INSEAD and an MSc in Mechanical
Engineering from the Technical University of Chemnitz.
• Mrs Wehr-Seiter is a member of the Audit and Risk Committee and
of the Remuneration Committee of SES.
• Mrs Wehr-Seiter is a German national. She is an independent director.
MISSION AND COMPOSITION
The Board of SES is composed of 11 non-executive directors, five of
them female.
In accordance with the Company’s articles of association, two-thirds of
the board members represent the holders of A-shares and one-third
of the board members represent the holders of B-shares.
The mandates of the current directors will expire at the AGM of share-
holders in April 2022, 2023 and 2024, respectively.
In the event of a vacancy on the Board, the remaining directors may,
upon a proposal from the Nomination Committee and on a temporary
basis, fill such a vacancy by a majority vote. In this case, the next AGM
of shareholders will definitively elect the new director, who will com-
plete the term of the director whose seat became vacant. Mr Paul
Konsbruck having resigned with effect from 1st December 2021, the
Board of SES co-opted Mr Jacques Thill with effect from 2 December
2021.
In accordance with internal regulations adopted by the Board, at least
one-third of the board members must be independent directors.
A board member is considered independent if he or she has no
relationship of any kind with the company or management that may
impact his or her judgment.
Independence for these purposes is defined as:
1. not having been an employee or officer of the company over the
previous five years;
2. not having had a material business relationship with the company
over the last three years; and
3. not representing a significant shareholder holding more than 5%
of the voting shares directly or indirectly.
As of 31 December 2021, seven of the board members are considered
independent: Béatrice de Clermont-Tonnerre, Tsega Gebreyes,
Katrin Wehr-Seiter, Frank Esser, Ramu Potarazu, Kaj-Erik Relander
and Peter van Bommel.
The four current directors proposed by the B-shareholders are not
considered independent as they represent a significant shareholder
owning more than 5% of the company’s shares.
Thai Rubin, Chief Legal Officer, is the Board Secretary. He is supported
by Mathis Prost, Senior Manager, Legal Services Corporate and
Finance, as Assistant Secretary to the Board of Directors.
In the context of the Board composition, the SES Nomination Com-
mittee will consider a diverse Board as adding value to the Company,
not limiting diversity to gender diversity, but also considering, as far
as possible, professional background, experience and age diversity.
RULES OF GOVERNANCE
The Board of Directors meets when required by the Company’s busi-
ness, and at least once per quarter. It can only validly deliberate if a
majority of the directors are present or represented. The resolutions
of the Board are passed by a simple majority of the votes of the vot-
ing directors present or represented, not considering abstentions. The
Chairman does not have a casting vote.
Any material contract that is proposed to be signed by the Company
or any of its wholly controlled operating subsidiaries with a share-
holder owning at least 5% of the shares of the Company, directly or
indirectly, is subject to a prior authorisation by the Board.
In 2021, there were no transactions between the Company and a
shareholder owning at least 5% of the company’s shares, nor were
there any other transactions involving a conflict of interest for any of
the directors.
SES ANNUAL REPORT 202167
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
ACTIVITIES OF THE BOARD OF DIRECTORS
IN 2021
The Board of Directors held three physical meetings and seven Board
calls in 2021, with an attendance rate of more than 95%. In accordance
with the sanitary measures related to the COVID-19 pandemic,
imposed on the company as of March 2020, a number of board
meetings were held via video conference calls. The three physical
meetings were held under strict sanitary control measures, allowing
virtual attendance for Board members unable to attend in person.
After endorsement by the Audit and Risk Committee, the Board
approved the 2020 audited accounts, the dividend and the financial
results for the first half of 2021.
The Board approved the final version of the 2022 Budget and the
2022–2026 Business Plan. It also reviewed the Strategic Plan and held
a detailed Strategic Session in June 2021. On that occasion and
throughout the year, Management briefed the Board on the latest
industry trends and the resulting strategic implications for SES.
The Board approved the investment in a replacement fleet of two
satellites for 19.2°E thus ensuring continuity of service on an impor-
tant position for SES.
With regard to the Company’s corporate governance, the Board
reviewed the decision powers of the Committees and resolved that
all decision powers should revert from those Committees to the Board.
The Board approved the charter of the Strategic Committee.
During 2021, the Board also decided to launch a new share buyback
programme, implemented through the filing of a ‘notice d’information’
on 6 May 2021 a decision taken by the shareholders during the AGM
of 1 April 2021. The 2021 programme executed on Euronext Paris is
limited to the objective of purchasing FDRs and shares of SES, through
its subsidiary SES Astra, for cancellation by 2023.
The Board was regularly updated on the development of the major
projects and it noted updates on the company’s risk management
report. The Senior Leadership Team (SLT) regularly informed the
Board about the group’s activities and financial situation. The Board
noted updates on: (i) the execution of the Strategic Plan; (ii) the 2021
Business Objectives; (iii) the impact of COVID-19 on the Company’s
business as well as its staff; and (iv) the Company’s continued corpo-
rate simplification program which resulted in an important further
reduction of the number of entities of the group in 2021.
At each meeting, directors receive a report on ongoing matters and
the Chairpersons of the committees set up by the Board present a
report on the latest developments discussed in these respective com-
mittees. In addition, a business report is distributed to the members
of the Board on a monthly basis.
As a result of the last Board evaluation exercise and in-keeping with
best practice, each Board meeting concludes with a restricted ses-
sion, without the presence of Management.
BOARD GOVERNANCE STRUCTURE
& COMMITTEES
The Board agenda is prepared in close cooperation between the
Chairman, the Vice-Chairpersons and the CEO. The committees con-
sist of five to six members, at least a third of whom are independent
board members in line with SES’ internal regulations.
The Audit and Risk Committee assists the Board in carrying out its
oversight responsibilities in relation to corporate policies, risk manage-
ment, internal control, internal and external audit and financial and
regulatory reporting practices. It has an oversight function and pro-
vides a link between the internal and external auditors and the Board.
The Remuneration Committee assists the Board on the determination
of the remuneration of the members of the Senior Leadership Team
(SLT) and advises on the overall remuneration policies applied
throughout the Company. It acts as administrator of the Company’s
long-term equity plans.
The Nomination Committee identifies and proposes suitable candi-
dates for the Board of Directors, for election by the AGM of sharehold-
ers. Proposals are based on submissions from shareholders for a num-
ber of candidates at least equal to the number of posts to be filled for
each class of shareholders. It also identifies and proposes suitable
candidates for the SLT.
The Strategic Committee reviews, analyses and discusses market
trends, market opportunities, risks and the competitive landscape.
The Committee prepares Board discussions on strategic matters and
supports Management in planning and preparing the annual Strate-
gic Plan for approval by the Board as well as in the preparation of any
investment or divestment decision for approval by the Board. The
Strategic Committee discusses and reviews important industry and
company developments as presented by Management and reviews
with Management the implementation of strategic and investment
decisions approved by the Board.
SES ANNUAL REPORT 202168
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
SECRETARY OF THE
BOARD OF DIRECTORS
STRATEGIC
COMMITTEE
NOMINATION
COMMITTEE
REMUNERATION
COMMITTEE
AUDIT AND RISK
COMMITTEE
•Chair:
Peter van Bommel
• Serge Allegrezza
• Kaj-Erik Relander
• Françoise Thoma
• Katrin Wehr-Seiter
•Chair:
Françoise Thoma
• Serge Allegrezza
• Peter van Bommel
•Frank Esser
• Ramu Potarazu
• Katrin Wehr-Seiter
•Chair:
Anne-Catherine Ries
• Béatrice de Clermont- Tonnerre
• Frank Esser
• Tsega Gebreyes
• Paul Konsbruck
(until 1st December 2021)
• Kaj-Erik Relander
• Jacques Thill
(as of 2nd December 2021)
• Chair:
Frank Esser
• Peter van Bommel
• Béatrice de Clermont- Tonnerre
• Ramu Potarazu
• Paul Konsbruck
(until 1st December 2021)
• Jacques Thill
(as of 2nd December 2021)
•Thai Rubin
CHAIRMAN OF THE BOARD: FRANK ESSER
VICECHAIRPERSONS OF THE BOARD: TSEGA GEBREYES, ANNECATHERINE RIES
MEETINGS AND ATTENDANCE RATE IN %
2 Hybrid meetings
and 3 calls
100%
2 Hybrid meetings
and 4 calls
100%
2 Hybrid meetings
and 2 calls
100%
9 Calls
98%
COMMITTEES OF THE BOARD
as of 31 December 2021
SES ANNUAL REPORT 202169
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
THE
AUDIT AND RISK
COMMITTEE
•Reviewed the 2020 financial results before their sub-
mission to the Board and their subsequent approval
by the shareholders at the statutory AGM.
•Reviewed the H1 2021 financial results of the Com-
pany. Members had the opportunity to communicate
any comments they had on the Company’s quarterly
results prior to the publication of these results.
•Reviewed the Company’s statement on internal con-
trol systems prior to its inclusion in the annual report,
approved the Internal Audit plan, and received bi-an-
nual updates on the Internal Audit activities and on
the follow-up of the major recommendations. It also
reviewed the 2020 PwC Management letter.
•Proposed to the Board and to the shareholders to
appoint PwC as external auditor for 2021 including its
proposed compensation.
•Received quarterly updates on risk management from
the SES risk management committee and was briefed
on ongoing compliance matters.
•Reviewed WACC parameters for remuneration pur-
poses, customer credit risk and collection and of the
Treasury Roadmap.
•PwC briefed the Audit and Risk Committee on upcom-
ing regulatory changes. After each meeting, the Board
is briefed in writing about the work of the Audit and
Risk Committee.
•Received updates on ESG targets and implementation
plan.
•Reviewed the Company’s Budget and Business Plan.
THE
REMUNERATION
COMMITTEE
•Matters addressed related to the determination of
the bonuses and the vesting of performance shares
allocated to the members of the SLT for their per-
formance in 2020.
•Adoption of the 2021 corporate business objectives,
which are used as one element in the determination
of 2021 bonuses for SLT members.
•Review and proposal of the remuneration packages
for new SLT members.
•Review and proposal of the 2021 long term equity
grants for SLT members.
•Proposed to review and adjust the Remuneration
Policy. The proposal has been approved by the
Board and by the Ordinary Shareholder Meeting.
•After each meeting, the Board is briefed in writing
about the work of the Remuneration Committee.
THE
NOMINATION
COMMITTEE
THE
STRATEGIC
COMMITEE
•Discussed the size and the composition of the
Board.
•It also discussed the renewal of existing directors,
conducted interviews and proposed to the Board a
list of candidates for election by the shareholders
in April 2021.
•Discussed the future structure of the Executive
Committee and was involved in its implementation
in close cooperation with the CEO.
•Instigated a deep dive on Talent Management and
reviewed Executive Committee Succession Plan-
ning.
•After each meeting, the Board is briefed in writing
about the work of the Nomination Committee.
• Discussed strategic industry trends, market oppor-
tunities, risks and competition and the disruption
underway in satellite industry.
• Included input from outside consultants.
•
Regularly reviewed progress on various strategic
opportunities.
•
Reviewed and discussed the company strategy and
strategic options.
• After each meeting, the Board is briefed in writing
about the work of the Strategic Committee.
ACTIVITIES OF THE
COMMITTEES IN 2021
SES ANNUAL REPORT 202170
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
SENIOR LEADERSHIP
TEAM (SLT)
STEVE COLLAR
CEO, SES Group,
Chairman of the SLT
JOHN BAUGHN
Chief Services Officer
JOHNPAUL HEMINGWAY
Chief Strategy and Product Officer
SANDEEP JALAN
Chief Financial Officer
CHRISTOPHE DE HAUWER
Chief Development Officer
RUY PINTO
Chief Technology Officer
THAI RUBIN
Chief Legal Officer
EVIE ROOS
Chief Human Resources Officer
SES ANNUAL REPORT 202171
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
SENIOR LEADERSHIP TEAM (SLT)
The SES Executive Committee is known as the Senior Leadership
Team (SLT):
• It is in charge of the daily management of the group.
• It functions as a collegial body.
• It is mandated to prepare and plan the overall policies and strate-
gies of the company for approval by the Board.
•
It may approve intra-group transactions, irrespective of the amount,
provided that they are consistent with the consolidated annual
budget of the company, as well as specific transactions with third
parties provided that the cost to SES does not exceed €10 million
per transaction.
• It informs the Board at its next meeting of each such transaction,
it being understood that the aggregate amount for all such trans-
actions can at no time be higher than €30 million. Members of
the SLT are appointed by the Board of Directors upon a proposal
from the Nomination Committee.
Steve Collar
CEO, SES Group, Chairman of the SLT
• Appointed in April 2018.
• From 2017 to 2018 he was CEO of SES Networks.
•
Prior to SES, he was CEO of O3b Networks, and has profound expe-
rience in a variety of commercial, business development and tech-
nical roles at SES WORLD SKIES, New Skies Satellites, Astrium and
Matra Marconi Space (now Airbus).
• Holds a degree in Mechanical Engineering from Brunel University
in London.
• Mr Collar is a British national.
Sandeep Jalan
Chief Financial Officer
• Appointed in May 2020.
• He has 30 years of experience in financial and operational leader-
ship roles across Asia and Europe. He was until most recently the
CFO of Aperam, a global leader in the stainless, electrical and spe-
cialty steel industry, a role he held since 2014. Previously, he worked
for the ArcelorMittal Group since 1999 where he held various roles
including the CFO of ArcelorMittal Long Carbon Europe and was
part of the M&A team responsible for numerous acquisitions in both
steel and mining. He was also the CFO & Company Secretary for
Ispat Alloys Ltd from 1993 to 1999.
• He is a Commerce Graduate from Banaras Hindu University (BHU),
Chartered Accountant (equivalent to CPA) and Company Secretary
from the respective Institutes in India. He has also completed an
Executive Education Programme on Leadership at the London Busi-
ness School and an Executive Education program on Strategic
Finance at IMD, Lausanne.
• Mr Jalan is an Indian national.
Evie Roos
Chief Human Capital Officer
• Appointed in February 2017.
•
Prior she held the position of Executive Vice-President Human
Resources of SES and is a member of the Board of SES ASTRA,
as well as an elected member of the Luxembourg Chamber of
Commerce.
•
Before joining SES, she held various management positions at
ArcelorMittal.
• She holds two degrees in Law and European Studies from the Uni-
versity of Leuven in Belgium and the Europa Institut in Saarbrücken
in Germany.
• Mrs Roos is a Belgian, Luxembourg and US national.
John-Paul Hemingway
Chief Strategy and Product Officer
• Appointed in April 2018 as CEO of SES Networks.
• Prior to that, he served as the Executive Vice President, Product,
Marketing and Strategy of SES Networks where he led Product
Management, Marketing, Business Development and Corporate
Strategy.
• Before SES acquired O3b and formed SES Networks, he was Chief
Marketing Officer for O3b Networks.
• Prior to that, he held a variety of senior management roles in the
networking industry within Ciena, Corning Cables, and Netscient.
•
Holds a PhD in Optical Communications and a BSc (Hons) from
Manchester Metropolitan University, UK.
• Mr Hemingway is a British national.
SES ANNUAL REPORT 202172
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
Christophe De Hauwer
Chief Development Officer
•
Appointed in August 2015 as Chief Strategy and Development
Officer.
• Member of the Board of SES ASTRA.
• Having joined SES in 2003, he held several positions of responsi-
bility in the areas of Strategic Marketing, Strategic and Business
Planning and Corporate Development, as well as Fleet Development
and Yield Management.
• Prior to joining SES, he worked in the Strategy Consulting practice
of the European Telecommunication and Media Industry with
Arthur Andersen.
• Holds an Engineering and a PhD Degree from the Université Libre
de Bruxelles.
• Mr De Hauwer is a Belgian national.
Ruy Pinto
Chief Technology Officer
• Appointed in January 2019.
• Since 2017, he had been the Deputy Technology Officer and took
on the additional role of Chief Information Officer (CIO) at SES in
2018.
•
Between 1990 to 2016 he was working for Inmarsat where he
covered various technical and managerial roles, such as CTO and
Group Chief Operations Officer (COO).
• Prior to that he was Chairman of UKSpace, and Director and VP of
Space for the Association of Defence, Security and Aerospace
Companies (ADS) and Non-Executive Director of the Space Appli-
cation Catapult.
•
Holds a degree in Electronics Engineering and completed
post-graduate studies in Digital Telecommunications Systems, both
from the Rio de Janeiro Catholic University (PUC-RJ).
• Mr Pinto is a dual British and Brazilian national.
John Baughn
Chief Services Officer
• Appointed in January 2019.
• Since 2017, he had been Executive Vice President, Global Services
at SES Networks.
•
He joined SES Networks from O3b Networks, where he led the
Global Services team, driving service strategy.
• Between 2008 and 2015, he was VP Global Services at Ciena, and
has a vast Telco experience included leadership roles in Motorola.
• Holds an MBA from the University of Warwick.
• Mr Baughn is a British national.
Thai Rubin
Chief Legal Officer
• Appointed in July 2020.
• Prior to that, he was the General Counsel of O3b Networks where
he was as a key member of the leadership team, guiding the com-
pany to its successful commercialisation before it was acquired by
SES in 2016.
• In addition to holding multiple senior leadership roles within SES,
he served as General Counsel at New Skies Satellites, guiding it to
a public listing on the NYSE in 2005 and its acquisition by SES in
2006.
• Before joining SES, Mr Rubin worked at PanAmSat Corporation.
• Holds a Bachelor of Science degree from the University of Wiscon-
sin, Madison and a Juris Doctor from Howard University School of
Law in Washington, D.C.
• Mr Rubin is a US national.
RESPONSIBILITIES OF THE SENIOR LEADERSHIP TEAM
•
The SLT may approve any external credit facilities or external guar-
antees, pledges, mortgages and any other encumbrances of the
Company, or any wholly-owned affiliate, for as long as the Company
will not lose its investment grade rating as a result of such facility
or guarantee.
•
It may approve increases of up to 5% in the capital expenditure
budget for a satellite procurement already approved by the Board,
it being understood that the Internal Rate of Return will need to
comply with certain specific thresholds defined by the Board. The
SLT informs the Board at its next meeting of each such increase.
• The SLT submits those measures to the Board that it deems nec-
essary to be taken in order to meet the purposes of the Company.
Prior to the beginning of each fiscal year, the SLT submits to the
Board a consolidated budget for approval.
•
The SLT is in charge of implementing all decisions taken by the
Board and by the committees specially mandated by the Board.
The SLT may, in the interests of the Company, sub-delegate part
of its powers and duties to its members acting individually or jointly.
• The CEO organises the work of the SLT and coordinates the activ-
ities of its members, who report directly to him. In order to facilitate
the implementation by the Board of its overall duty to supervise
the affairs of the Company, the CEO informs the Chairman of the
Board on a regular basis of the Company’s activities. The latter
receives the minutes of all meetings of the SLT in due time.
SES ANNUAL REPORT 202173
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
INTERNAL CONTROL PROCEDURES
OBJECTIVES AND PRINCIPLES
The Board of Directors has the overall responsibility for ensuring that
SES maintains a sound system of internal controls, including financial,
operational and compliance controls. Such a system is an integral part
of the corporate governance strategy of SES S.A. (‘the Company’)
together with its subsidiaries and affiliates (‘the Group’).
Internal control procedures help to ensure the proper management
of risks and provide reasonable assurance that the business objec-
tives of the Company can be achieved.
The internal control procedures are defined and implemented by the
Company to ensure the following objectives in the table below:
Internal Control Objectives
Compliance of actions and decisions with applicable laws,
regulations, standards, internal rules, and contracts
Safeguarding efficiency and effectiveness of operations
and the optimal use of the company’s resources
Correct implementation of the Company’s internal processes,
notably those to ensure the safeguarding of assets
Integrity and reliability of financial and operational
information, both for internal and external use
Ensuring that management’s instructions and directions
are properly applied
Ensuring that material risks are properly identified,
assessed, mitigated, and reported
OBJECTIVES
Like all control systems, internal controls cannot provide an absolute
guarantee that all risks have been totally mitigated or eliminated.
CONTROL ENVIRONMENT
SES has adopted a robust internal control framework based on a set
of guidelines prepared by the Committee of Sponsoring Organisations
of the Treadway Commission (‘COSO’). This framework applies to both
the Group’s regular satellite business activities as well as to the
specific and dedicated C-band spectrum clearing activities taking
place in connection with the FCC Order dated 3rd March 2020. The
framework provides reasonable assurance that the internal control
objectives are being achieved; it is also consistent with the reference
framework proposed by the French securities regulator, the Autorité
des Marchés Financiers (‘AMF’).
The Board has delegated the design, implementation, and mainte-
nance of a rigorous and effective system of internal controls to the
Company’s Senior Leadership Team, which in turn works closely with
the other levels of management in establishing control policies and
procedures.
Policies and procedures are regularly reviewed and are updated when
required. The policies and procedures apply to all employees and
officers of the Group, and where appropriate, to its directors as well
as to other groups.
A Delegation of Authority Policy is in place, and is regularly updated,
providing the rules for the Internal Approval and External Execution that
are required to authorise any external commitment of the Company.
A Group-wide ‘Code of Conduct and Ethics’ (‘Code of Conduct’) was
implemented to enable all employees, officers and directors as well
as other groups to take a consistent approach to integrity issues and
to make sure that the Group conducts its business in compliance with
all applicable laws and regulations and observes the highest stand-
ards of business ethics.
A Compliance Committee composed of designated Compliance
Officers in each main corporate location, is tasked with raising the
employees’ awareness of the Code and ensures a consistent roll-out
and training programme for the Code. The Compliance Committee
meets regularly to discuss important topics or issues.
SES has a whistleblowing hotline, managed by a third-party provider,
which allows its employees to file any compliance complaints in full
confidence.
SES has implemented a comprehensive compliance training pro-
gramme with mandatory trainings related to cybersecurity, GDPR,
anti-bribery, sanctions & export controls, the Code of Conduct, and
harassment.
To ensure better compliance with data protection laws and regula-
tions, SES has a Data Protection Officer. SES has implemented a vari-
ety of measures, has reviewed and updated relevant procedures and
processes, and continuously strives to comply with the General Data
Protection Regulation (‘GDPR’).
The main SES functions and processes are electronically documented
using a centralised Business Process Management software to ensure
information is designed collaboratively and shared across the company.
To improve operations, SES is standardising its process mapping
using an end-to-end business process framework. This framework is
designed to ensure control and strategic alignment across the busi-
ness, while capitalising on the standards of the telecom industry.
SES ANNUAL REPORT 202174
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
RISK MANAGEMENT
SES adopted a risk management framework based on principles pro-
posed by COSO and ISO31000. A Risk Management Group is in place
representing SES key functions and being responsible for the ade-
quate reporting of the Company’s risks and the implementation of the
risk management policy and procedures.
Risk Management Structure
Delegation / Monitoring Risk Report Designated Risk Representatives of key SES functions
A dedicated Risk Management Team facilitates and coordinates the
reporting process and assists with the assessment of risks. The Risk
Management Group reports to the Senior Leadership Team which in
turn reports to the Board, which has the ultimate responsibility for
oversight of the Company’s risks and for ensuring that an effective
risk management system is in place. The risk management policy is
being reviewed and updated by the Risk Management Team.
Each reported risk is categorised, assessed by the risk owners, and
reviewed by the Risk Management Group. Key risk developments are
periodically reported to the Senior Leadership Team, the Audit and
Risk Committee and the Board.
INTERNAL CONTROL ACTIVITIES
Accounting, Consolidation and Reporting
In the area of accounting, consolidation and reporting, the following
should be noted:
• Staff involved in the Group’s accounting, consolidation and report-
ing are appropriately qualified, trained and are kept up to date with
relevant changes in International Financial Reporting Standards
(‘IFRS’).
•
Appropriate accounting and financial reporting policies and proce
-
dures are in place, regularly reviewed and updated for business
developments and regulatory changes.
•
Controls have been established in the processing of accounting
transactions to ensure appropriate authorisations, an effective seg-
regation of duties, and the complete and accurate recording of
financial information. This control framework continues to be
enhanced through the implementation of additional workflow-based
controls and validations.
•
A Business Process Management function within the Finance team
reviews key financial operations and identifies areas for further
enhancement of the efficiency of the processes and for reinforcing
the segregation of duties and internal controls.
•
Adequate procedures and controls are in place, such as monthly
reviews and data validation procedures, to ensure the correct and
timely recognition of revenues.
• The Group is currently replacing different legacy systems used for
processing order-to-cash transactions, and associated accounting
activities such as revenue recognition, with a common platform
covering nearly all the group’s operations. This implementation is
expected to be completed in 2022.
RISK MANAGEMENT GROUP
OVERALL IMPLEMENTATION OF THE RM POLICY & PROCEDURES
BOARD OF DIRECTORS (BOD)
OVERALL RESPONSIBILITY FOR RM
SENIOR LEADERSHIP TEAM (SLT)
RESPONSIBLE FOR THE RM AT THE MANAGEMENT LEVEL
AUDIT AND RISK COMMITTEE (ARC)
OVERSIGHT OF RM PROCESS
STRATEGY &
DEVELOPMENT
GLOBAL
SERVICES
SES
NETWORKS
SES
VIDEO
FINANCE
TECHNOLOGY
HUMAN
CAPITAL
LEGAL &
REGULATORY
RISK MANAGEMENT TEAM
INCL. RISK MANAGEMENT COORDINATOR
SES ANNUAL REPORT 202175
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ENVIRONMENTAL,
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(ESG) REPORT
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CORPORATE
GOVERNANCE &
REMUNERATION
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CONSOLIDATED
FINANCIAL
STATEMENTS
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SES S.A.
ANNUAL
ACCOUNTS
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ADDITIONAL
INFORMATION
• Risk-based monitoring controls are implemented for key SAP con-
trol configurations and transactions
• The completeness and timely recording of financial information is
ensured through regular reviews, the monitoring of specific key
performance indicators, validation procedures by functional lead-
ers and, as an additional check, the process of internal and external
audit.
•
In accordance with IFRS requirements, SES discloses detailed
information on the market, credit, and foreign exchange risks to
which it is exposed, as well as its strategy for managing those
risks.
• The Company relies on a comprehensive system of financial infor-
mation and oversight. Strategic plans, business plans, budgets and
the interim and full-year consolidated accounts of the Group are
drawn up and brought to the Board for approval.
•
The Board also approves all significant investments. The Board
receives monthly financial reports setting out the Company’s finan-
cial performance in comparison to the approved budget and prior
year figures.
• Any material weaknesses in the system of internal controls identi-
fied by either internal or external auditors are promptly and fully
addressed.
•
The external auditors perform a limited review of the Group’s
interim condensed consolidated financial statements and a full
audit of the annual consolidated financial statements.
Space Related insurance
In the area of space-related insurance, the following should be noted:
•
Most of the launch and in-orbit insurance activities of the group
are managed through SES’ insurance and reinsurance captive com-
panies based in Luxembourg. Both companies are regulated and
managed in accordance with the European Solvency II directive
and are therefore subject to strict supervision and governance rules
detailed in the companies’ governance manuals. The governance
structure of the companies is comprised of both companies’ Boards
of Directors, two committees (Investment and Underwriting) and
four key functions (Risk Management, Compliance, Actuarial and
Internal Audit).
•
A Satellite Insurance Policy is in place and regularly updated reflect-
ing the SES Board-approved insurance structure and approval
framework.
• ‘In-orbit Third Party Liability’ insurance is placed directly to the
market, i.e., not using the Captives. Such insurance covers all
SES in-orbit satellites in compliance with licensing and other
regulatory requirements in the various jurisdictions where SES
operates.
Treasury Management
In the area of treasury management, the following should be noted:
• Treasury activities take place within a framework approved by the
Board. This framework reflects the Group’s Treasury Policy which
is being regularly reviewed and updated.
• A clear segregation of duties, and assignment of bank mandates,
between members of SES management, Treasury and accounting
departments has been implemented.
• The Treasury function uses specific software that helps to ensure
the efficiency and control of foreign exchange (‘FX’) matters, inter-
est and liquidity management, and the implementation of SES’
hedging strategy for interest rate and foreign currency fluctuations.
To ensure enhanced security and efficiency of the bank payments
process, the Company uses a banking payments system allowing
for secured authorisation and transfer of payments from SAP
directly to the bank.
• Treasury activities are monitored with the monthly Group Finance
Report. The report is issued to the SES Board and highlights key
performance indicators such as cash balance, leverage, and debt
maturity profile.
• A Treasury Roadmap, based on SES’ strategic and business plans,
is prepared, and presented to the CFO on an annual basis.
Tax Management
Regarding the internal controls in tax management, the following
should be noted:
•
The tax arrangements of the group are driven by its operational
requirements and the geographical location of its business activities.
The Tax department works closely with the business to provide
clear, timely and relevant advice, as well as to mitigate tax risks.
• Tax positions are analysed based on the most appropriate authori-
tative interpretations and reported in internal tax technical memos
or tax opinions from external tax consultancy firms.
•
Tax positions are recorded in the Group’s financial statements
applying a key control hierarchy to ensure that all the relevant infor-
mation and data is properly understood and reconciled.
•
Transfer pricing documentation is continuously updated and
improved underpinning all significant cross-border intercompany
transactions through functional and economic analyses including
benchmarking studies.
•
A policy is in place concerning the mandatory automatic disclosure
in the field of taxation on reportable cross-border arrangements as
part of the SES Tax Control Framework.
Satellite Operations
Regarding the internal controls in satellite operations, the following
should be noted:
• SES’ Technology department is responsible for the procurement of
satellites and launch vehicles, the procurement and maintenance
of satellite-related ground infrastructure and the administration,
control, and operations of the satellite fleet.
• The operational procedures for satellite control and payload man-
agement cover manoeuvres and configuration changes required in
nominal situations as well as in the case of technical emergencies.
The controllers are trained and certified in the execution of such
procedures which are periodically reviewed and updated. Satellite
control software is being used and fully validated electronic proce-
SES ANNUAL REPORT 202176
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OPERATIONAL
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REPORT
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ENVIRONMENTAL,
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(ESG) REPORT
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CORPORATE
GOVERNANCE &
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FINANCIAL
STATEMENTS
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ANNUAL
ACCOUNTS
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ADDITIONAL
INFORMATION
dures for station-keeping and other regular operations are being
applied across the entire SES fleet.
• SES has designed satellite contingency and emergency response
process, crisis management systems, supporting infrastructure and
tools to address satellite in-orbit anomaly situations at an appro-
priate management level. SES applies industry-standard incident
management, escalation, and reporting processes to provide effec-
tive and timely support to customers.
• SES has adequate satellite control primary and backup capabilities
utilising the European and US-based Satellite Operations Centres
(‘SOCs’). SOCs can take over the operations of the other in an emer-
gency with the fail-over procedure being tested regularly. SOCs
can also be controlled remotely from any other dedicated location
via secure internet connection if the situation would require it.
• For SES Infrastructure Redundancy, adequate backup capabilities
are implemented.
•
The COVID-19 situation did not require changes to the existing
satellite operations, procedures and preventive measures that have
been implemented to ensure continuous and safe satellite opera-
tions continued to be applied during 2021.
Global Services
Regarding the internal controls in the area of Global Services, the
following should be noted:
• SES’ Global Services is responsible for the operation and manage-
ment of the customer-facing network, video services and content
operations including the maintenance and oversight of systems
and network components supporting SES customer traffic and
video services.
• The monitoring and operational procedures address static state as
well as anomalous states of network operations. All engineers are
trained in the execution of such procedures which are periodically
reviewed and updated. SES uses multiple tools and software to
manage and monitor the network and these tools have redundancy
enabled in the event of a systemic anomaly.
•
Network operations and payload management is performed in
Network Operations Centres (‘NOCs’) mainly located in US and
Europe. Video operations centres are in Israel and Europe. SES has
instituted disaster recovery procedures and handover to other sites
is possible and regularly tested.
•
SES applies industry-standard incident management, escalation,
and reporting processes to provide effective and timely support to
customers.
• Under COVID-19 restrictions, NOCs can be completely controlled
remotely, accessing the relevant monitoring systems via secure
internet connections.
•
The Vendor Management & Procurement (‘VMP’) function supports
the business for the non-satellite procurement, governed by a
dedicated policy that sets the frame for a sound level of internal
control when purchasing. The supply chain function within VMP
optimises and streamlines the exchange of goods or services
covering demand planning, logistics and warehouse management.
Controls are in place to ensure effective workflows, efficient use of
resources and safeguard legal constraints (e.g., inventory tracking,
shipment and custom documentation, US export controls).
Information Technology
Regarding the internal controls in the area of information technology,
the following should be noted:
•
Management is committed to ensuring that SES’ data, infrastructure,
and information technology systems are as secure as is reasonably
practicable. Security controls, policies and procedures are in place
to prevent unauthorised access to premises, computer systems,
networks, and data. Policies and procedures are continuously being
reviewed and updated.
• SES applies an Information Security Management System (‘ISMS’)
in line with the ISO 27001 standard which is subject to regular
ISO 27001:2013 certification for the scope of data services delivered
through high throughput GEO satellites.
• The SES Azure Cloud Platform has been put in place and, most of
its features have been added to the SES environment. The Cloud
Centre of Excellence program with Microsoft has been completed
and is fully operational.
•
All SES’ main trading operations operate on a common SAP ERP
platform, applying consistent processes and controls. In 2021 the
SAP platform was moved into the Cloud. The process further con-
tinues to mature in various areas including data privacy, data
encryption and intrusion detection. The Cloud solution provides
state-of-the-art backup facilities to ensure enhanced continuity of
the SAP system. A comprehensive SAP security policy has been
defined and implemented. Appropriate SAP access management
is in place and is continually monitored and enhanced.
• SES has disaster recovery plans for its business applications. The
regular testing of these activities confirms that SES is in a good
position to recover all mission critical back-office applications
within its recovery time objectives. Electronic information is regu-
larly backed up and regularly tested.
•
A digital workflow process for managing information technology
development projects is in place on a ServiceNow platform further
enhancing the level of automation. Relevant key performance indi-
cators are regularly reviewed.
•
SES ensures adequate and secure VPN connectivity and redundancy
to cater for users to work remotely. More applications continue to
be progressively added onto our Multi-Factor authentication to
protect against unauthorised access due to password theft or pass-
word guessing attacks.
•
A dedicated cybersecurity team is in place to provide SES manage-
ment and customers with the assurance that our services are
adequately secured. We follow a holistic approach towards cyber-
security by implementing a wide range of security control mecha-
nisms and practices based on industry-leading standards, as well
as cultivating a culture of awareness and caution throughout our
organisation.
SES ANNUAL REPORT 202177
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CORPORATE
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CONSOLIDATED
FINANCIAL
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5
SES S.A.
ANNUAL
ACCOUNTS
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ADDITIONAL
INFORMATION
INFORMATION AND COMMUNICATION
Internal communication ensures the effective circulation of informa-
tion across the organisation and supports the implementation of inter-
nal control and risk management by communicating business and
functional objectives, instructions and information across all levels
and functions of SES via a wide array of communications channels.
To effectively manage the COVID-19 pandemic, multi-stage pandemic
plans with procedures and measures have been implemented to
ensure health and safety of all SES employees worldwide as well as
to protect our operations and to ensure continuity of services for our
customers and partners.
A dedicated and cross-functional internal taskforce coordinates the
Company’s response to the varying COVID-19 needs. The taskforce
ensures comprehensive communications to the SES community on
Company’s guidelines, decisions and safety measures taken in line
with guidance received from national governments, public health
agencies and the World Health Organisation.
With focus still on emergency preparedness and response, safeguard-
ing Company’s employees (e.g., working from home, limited travel),
business continuity and other implications (e.g., tax, cross-border
workers, testing) to best manage the ongoing pandemic, the team
started in 2021 to develop and implement a safe exit strategy with an
iterative back to office plan that has been implemented in line with
relevant local regulations.
MONITORING ACTIVITIES
Monitoring of business policies and procedures is done through
continuous assessments or through a specific analysis.
Continuous assessments are performed by management as routine
operations, built into business processes, and are performed on a
real-time basis, reacting to changing conditions.
The SES Internal Audit function performs specific analyses of the
relevance of, and compliance with, Company policies and internal
control procedures.
The objectives, authority, and responsibilities of the Internal Audit
function are set out in the Internal Audit Policy which is regularly
reviewed and updated.
To ensure an appropriate level of independence and communication,
the Internal Audit function has a direct reporting line into the Audit
and Risk Committee (‘ARC’) while reporting functionally to the
President and CEO of SES.
The activities of the Internal Audit function are executed in accordance
with an annual audit plan, which is reviewed and approved by the ARC.
This plan is prepared in close cooperation with the company’s Risk
Management Team to dynamically link it to risks and exposures that
may affect the organisation and its operations.
Internal Audit reports its observations and mitigation proposals to
management and monitors the implementation of the recommenda-
tions. Regular reports are provided to the Senior Leadership Team
and to the ARC summarising Internal Audit’s conclusions regarding
internal control effectiveness and compliance.
Internal Audit also regularly coordinates audit planning, and exchanges
relevant information with, the Company’s external auditor PwC.
The proxy structure of the SES Government Solutions Inc. entity, a
wholly-owned indirect subsidiary of SES S.A., in line with common
practice for businesses serving certain segments of the US Govern-
ment, imposes various restrictions on the Board and executive
management in directly supervising the maintenance of an internal
control system and imposing an internal audit structure. Hence the
Group’s own Internal Audit function does not perform direct internal
control reviews of this subsidiary. An agreement about required risk
management and internal control framework for that entity is in place
which is subject to evaluation and testing by a third-party audit
function.
The Group’s external auditor is also engaged for the audit of the
financial statements of SES Government Solutions.
SES ANNUAL REPORT 202178
1
OPERATIONAL
& STRATEGIC
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ENVIRONMENTAL,
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(ESG) REPORT
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CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
PRINCIPAL RISKS
SES identified the following potential risks, which could have a material
and adverse effect on its business, financial condition and results of
operation. This section does not purport to be exhaustive, but rather
contains a summary of the main risks that SES may face during the
normal course of its business. Where mitigations are mentioned in
this section, there is no guarantee that such mitigations will be effec-
tive (in whole or in part) to remove or reduce the effect of a risk.
Risks relating to procurement
Dependency on key supplier(s) Dependency on a small number of satellite manufacturers may reduce SES’ negotiating power and access to advanced technologies and result in
increased satellite procurement risk (e.g., due to technical difficulties and design problems with a particular model of satellite). SES mitigates these risks
by maintaining a full level physical presence and oversight at manufacturer facilities throughout the spacecraft design, construction and acceptance.
SES monitors manufacturers’ supplier base and procurement sources and develops relationships with new suppliers where possible.
SES is dependent on a limited number of launch service providers. As such, delays may be incurred in launching satellites in the event of a prolonged
unavailability of service from a launch service provider.
Launch delay(s) and / or launch failure(s)Launch delays are a possibility. Satellite launch and in-orbit insurance policies do not compensate for lost revenues and other consequential losses.
SES attempts to mitigate the risk of delays by ensuring adequate margins in satellite procurement schedules.
There is always a small but inherent risk of launch or early-orbit failure, resulting in a reduced satellite lifetime and/or functionality or the total loss of
a satellite. SES mitigates such risks in several ways, including by technical risk management of each launch vehicle programme and asset insurance for
each launch.
Risks relating to satellites
In-orbit failure(s)A satellite may suffer in-orbit failures ranging from a partial impairment of its commercial capabilities to a total loss of the asset. Such failure may result
in SES not being able to continue to provide service to some of its customers.
SES attempts to mitigate this risk by careful vendor selection and high quality in-orbit operations. For some services, SES is able to offer an in-orbit
backup strategy in which customers using an impaired satellite may be transferred to another satellite.
In addition, in respect of its geostationary (‘GEO’) satellites, SES has restoration agreements with other satellite operators whereby customers on an
impaired GEO satellite may be transferred to a GEO satellite of another operator in order to protect continuity of service.
Risks relating to space insurance
Insurance coverage and availabilitySES maintains pre-launch, launch and initial in-orbit insurances, in-orbit insurance, and third-party liability insurance. These policies generally contain
customary market exclusions and are subject to limitations.
The insurance market has been seeing a reduced availability and significantly increased rates. This results in increased insurance premiums for SES.
In order to mitigate these risks and optimise the coverage and premiums, SES maintains a policy of limited self-insurance through its captive entities.
SES ANNUAL REPORT 202179
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ADDITIONAL
INFORMATION
Risks relating to customers
Key customer lossBankruptcy and customer consolidation, amongst other reasons, can potentially result in loss of customers, non-renewals or reduction in the demand
for services. SES aims for long contract terms with key customers based on strong relationships.
Customer credit
Failure by customers to fulfil payment obligations is a possibility. Credit risk may increase as SES and / or its customers increase dependency on
revenues in emerging markets where credit risk may be higher. This risk is mitigated through a customer credit policy including credit checks, deposits
or other forms of security, payment monitoring and credit insurance where possible. Further details are provided in >> Note 18 to the consolidated
financial statements.
Risks relating to the satellite communications market
CompetitionThe satellite communications business is increasingly competitive. SES competes with national, regional and international GEO, non-geostationary
(NGSO) and fixed and wireless terrestrial operators. The competition from NGSO systems is potentially the most disruptive trend facing SES. With
strong financial backing, vertical integration and technological advancements, such competitors are planning to enter multiple markets targeted by SES.
In addition, the trend towards horizontal and vertical consolidation poses the risk of leaving SES behind with a smaller, less powerful relative market
position towards customers as well as suppliers.
SES regularly evaluates potential partner or merger targets that fit with its strategy.
TechnologyThe satellite communications industry is subject to rapid technological change. As a result, the technology used by SES could become less suitable for
customer requirements leading to a reduced service demand and a negative revenue impact.
Risks relating to strategic development
Emerging marketSES targets new geographical areas and emerging markets and is developing commercial arrangements with local communications, media and other
businesses in these areas. SES may be exposed to political and other risks associated with such business.
InvestmentSES’ desired strategic investments may not yield expected benefits due to a number of factors including uncertain or changing market conditions,
financing costs and legal and regulatory issues.
SES ANNUAL REPORT 202180
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Risks relating to legal, regulatory, spectrum, and corporate
Legal & RegulatorySES’ operations and business are subject to compliance with the laws, regulations (e.g., communications, export control, sanctions, competition) and
political will of the governmental authorities of the countries in which SES operates, uses radio spectrum, offers satellite capacity and services.
Violations of any of the applicable laws and regulations could expose SES to penalties and other enforcement actions and may negatively affect
commercial operations.
SES may need to obtain and maintain approvals from authorities or other entities to operate its satellites and to offer satellite capacity and services.
Failure to obtain the necessary approvals could lead to loss of revenues and compliance actions against SES.
SpectrumThe International Telecommunication Union (‘ITU’) and national administrations may reallocate satellite spectrum to other uses. In addition, national
administrations are increasingly charging for access to spectrum through the use of fees and auctions. This may affect SES’ access to orbital locations
and frequencies required for it to develop and maintain its satellite fleet and services.
In addition, SES must coordinate the operation of its satellites with other satellite operators so as to prevent or reduce interference. As a result of such
coordination, SES may be required to modify the proposed coverage areas or satellite design or transmission plans which may materially restrict satellite
use. Similarly, the performance of SES’ satellites in some areas could be adversely affected by harmful interference caused by other operators to SES’
satellites.
Operational issues such as satellite launch failure, launch delay or in-orbit failure might compromise access to the spectrum or orbital locations.
SES’ large fleet may enable the relocation of in-orbit satellites to satisfy regulatory and spectrum requirements.
CybersecuritySES’ operations may be subject to hacking, malware and other forms of cyber-attack. Due to the high sophistication of certain attackers and an
increasing number of cyber-attacks, it may not always be possible to prevent every such event.
SES has protections in place to help protect its systems and networks and continues to work to implement additional protective measures intended
to limit the risks associated with such attacks.
PersonnelSES is competing for talent with satellite operators as well as large and well-known companies. In the context of low unemployment rates and a shortage
of qualified candidates, SES may have difficulties in hiring competent talent. If SES is unable to source and retain key talent this could have a negative
impact on SES’ ability to deliver its business objectives.
To mitigate this risk SES uses a dedicated Talent Acquisition function to source high-quality candidates.
Global pandemic or other health emergencySES is subject to the risk of a global pandemic or other health emergency such as COVID-19. Worsening of COVID-19 or appearance of another material
health emergency could affect availability of our employees and impact various areas of SES’ business including procurement and launch of satellites,
entry into service of new satellites, procurement of ground infrastructure and provision of services to customers. SES has procedures and measures to
respond to health risks and to secure business continuity during such situations.
SES ANNUAL REPORT 202181
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CORPORATE
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SES S.A.
ANNUAL
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ADDITIONAL
INFORMATION
Risks relating to finance
Credit ratingSES’ credit rating can be affected by a number of factors, including a change in its financial policy, a deterioration of its financial credit metrics,
a downgrade in the rating agencies’ assessment of the business risk profile or a change in rating methodology. A change in SES’ credit rating could
affect the cost and terms of its newly issued debt, as well as its ability to raise financing. SES’ policy is to attain and retain a stable investment grade
rating with two of the international reputed Credit Rating Agencies (currently Standard & Poor’s and Moody’s).
TaxSES is subject to taxation in multiple jurisdictions and may become subject to unforeseen material tax claims, including late payment interest and / or
penalties, and in some cases retroactive tax assessments.
SES has implemented a tax risk mitigation charter based on, among other things, a framework of tax opinions for the financially material positions taken,
transfer pricing policies, and procedures for accurate tax compliance in all jurisdictions.
Asset impairment
SES’ intangible assets, satellites and ground segment assets are valued at historic cost less amortisation, depreciation and accumulated impairment
charges. The resulting carrying values are validated each year through impairment testing procedures where they are compared to the discounted
present value of the future cash flows expected to be derived from the asset. Where future assumptions for a specific asset, as set out in the approved
Business Plan, become less favourable, or the discount rates applied to the future cash flows increase, then this may result in the need for material asset
impairment charges.
Foreign exchange
SES’ reported financial performance can be impacted by movements in the Euro / U.S. dollar exchange rate, as SES has significant operations, cash flows,
assets and liabilities that are denominated in the U.S. dollar, whereby the Group’s reporting currency is the Euro.
To mitigate this exposure, SES may enter into forward foreign exchange or similar derivative contracts to hedge underlying foreign exchange exposures.
Further details are provided in >> Note 18 to the consolidated financial statements.
Interest rate
SES’ exposure to the risk of changes in market interest rates relates primarily to SES’ floating rate borrowings as well as the renewal of its fixed rate
borrowings.
SES carefully monitors and adjusts the mix between fixed and floating rate debt from time to time, responding to market conditions. Interest rate
derivatives may be used to manage the interest rate risk. Further details are provided in >> Note 18 to the consolidated financial statements.
RESPONSIBILITY STATEMENT
The Board of Directors and the Executive Committee of the company
reaffirm their responsibility to ensure the maintenance of proper
accounting records disclosing the financial position of the group with
reasonable accuracy at all times and ensure that an appropriate sys-
tem of internal controls is in place to ensure the group’s business
operations are carried out efficiently and transparently.
In accordance with Article 3 of the Luxembourg law of 11 January
2008, as subsequently amended, on transparency requirements in
relation to information about issuers whose securities are admitted
to trading on a regulated market, we declare that, to the best of our
knowledge, the annual statutory accounts as of and for the year ended
31 December 2021, prepared in accordance with Luxembourg legal
and regulatory requirements, and the consolidated financial state-
ments as of and for the year ended 31 December 2021, prepared in
accordance with the International Financial Reporting Standards as
adopted by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit of the year of SES taken indi-
vidually, and of SES and its consolidated subsidiaries taken as a whole,
respectively. In addition, the management report includes a fair review
of the development and performance of the business and the position
of SES taken individually, and of SES and its consolidated subsidiar-
ies taken as a whole, together with a description of the principal risks
and uncertainties that they face.
23 February 2022
Frank Esser Steve Collar
Chairman of the Board of Directors CEO
SES ANNUAL REPORT 202182
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ADDITIONAL
INFORMATION
REMUNERATION REPORT
PURPOSE AND SCOPE OF THE
REMUNERATION POLICY
The purpose of the present Policy is to describe the remuneration
paid by the Company to the Directors and to the members of its Exec-
utive Committee (SLT members). It describes:
• How it contributes to the Company’s objectives relating to its busi-
ness strategy and long-term interests and sustainability;
• The different components of remuneration, including all bonuses
and other benefits in whatever form, if any, awarded to Directors
and SLT members and indicates their relative proportion;
• The duration of the contracts or arrangements with the Directors
and SLT members, the applicable notice periods, the main charac-
teristics of supplementary pension or early retirement schemes and
the terms of, and payments linked to, termination;
•
The decision-making process followed for the determination, review
and implementation of the Policy, including measures to avoid or
manage conflicts of interests and, where applicable, the role of the
Remuneration Committee and the Board;
•
The procedural conditions under which any derogation from the
Policy can be applied as well as the elements of the Policy from
which a derogation is possible.
THE REMUNERATION POLICY
The Company must attract suitable Directors and SLT members to
continue its success and remuneration is one of the enablers to fulfil
this goal.
Remuneration must reflect the degree of required qualifications and
experience of the Directors and SLT members, the risks that they take
personally, and honour the dedication and efforts that the Directors
and SLT members put into the Company. The Remuneration must
also be consistent when compared to remunerations for similar roles
in other companies and be relative to the pay and employment con-
ditions of the employees of the Company.
REMUNERATION OF THE DIRECTORS
The remuneration granted to Directors consists of a fixed annual fee,
and a fee per Board or committee meeting attended as described
below.
All these fees are net of any Luxembourgish withholding taxes on
directors’ fees. Board members do not receive any stock options, nor
do they receive any bonus.
Fixed remuneration per year
The fixed component of the remuneration amounts to €40,000 per
year whereas the Vice Chairpersons each receive an annual fixed fee
of €48,000 and the Chairperson receives a fee of €100,000 per year.
Any Director chairing one of the committees set up by the Board (if
not the Chairperson of the Board) receives an annual fee of €8,000.
The Chair of the Audit and Risk Committee (if not the Chairperson of
the Board) receives an annual fee of €9,600.
Remuneration per meeting
Directors receive €1,600 for each Board meeting or Board committee
meeting they attend, except for the Audit and Risk Committee for
which a fee of €1,920 per meeting is paid.
It is important to note that a Director participating in more than one
committee meeting on the same day will receive the attendance fee
for one meeting only. Half of the attendance fee is paid if the Direc-
tor participates in the meeting via telephone or videoconference.
However, as an exceptional measure during the application of the
COVID-19 restrictions, directors participating in meetings via Video-
conference are paid full attendance fees.
The terms of the Directors
In general, the Company’s directors are elected for terms of three
years. If a Director leaves the Board during his/her term, the Company
may co-opt a Director to finish that mandate.
A Director can be revoked at any moment by the shareholders. There
is no notice period for a Director.
The maximum tenure on the Board is limited to 12 years (generally
four terms of 3 years each).
The age limit of the Directors is set at 72 years. Any Director who
reaches this age during his/her mandate will resign at the Annual
General Assembly (AGM) following this date.
REMUNERATION OF SLT MEMBERS
The remuneration of SLT members comprises the following two major
components:
• The compensation package which consists of a Yearly base salary
(“YBS”), Annual bonus (“AB”), and Long-term equity (“LTE”);
•
The benefits including, but not limited to, company car or car allow-
ance, pension and health care plans, and death and disability insur-
ance.
In line with the Charter of the Remuneration Committee of the Com-
pany, remuneration matters of the SLT members are decided by the
Board after review and recommendations from the Remuneration
Committee.
SES ANNUAL REPORT 202183
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
Yearly Base Salary (“YBS”)
The base salary of the CEO as well as of other SLT members is
reviewed by the Remuneration Committee in its first ordinary meet-
ing of the year. The Board has the sole authority, besides the legally
required cost of living adjustments (i.e. Luxemburg index), to adjust
the YBS of the CEO and other SLT members.
For all new nominations as SLT member, remunerations are validated
by the SES Board, on recommendations from the Remuneration Com-
mittee. They are made on the basis of external benchmarks provided
by compensation consultants while also considering degree of qual-
ification and experience required as well as employment conditions
of employees at the time of the offer.
Annual Bonus (“AB”)
The main objective of the bonus plan for the CEO and other SLT mem-
bers is to create a performance reward scheme, that links annual
variable compensation to the Company’s financial results and its per-
formance against specific business objectives which include sustain-
ability targets. Through this plan, the Company ensures alignment
and focus on the company’s core objectives.
The AB of SLT members is based on the annual performance during
the relevant calendar year, is assessed by the Remuneration Commit-
tee and validated by the Board in February and paid in March of the
following year.
AB achievements (financial results and performance against business
objectives) are reported in the annual Remuneration Report.
The AB target for SLT members ranges from 50% of the YBS to 100%
of the YBS for the CEO.
The minimum pay-out can be as low as 0% of the AB (in other words
no bonus payment), with a maximum pay-out capped at 150% of the
bonus target.
The AB of each SLT member is composed of two parts:
• Financial performance (70% of the AB); and
• Business objectives (30% of the AB).
The financial performance measures the actual achievement com-
pared with budget for the following set of metrics with their respec-
tive weights: Revenue (40%), EBITDA (40%) and net operating cash
flow (20%). The budget targets for those measures are set during the
annual budget process and finally approved by the Board.
The financial performance pay-out is capped at 150% of the bonus
target (for a 107% target achievement and for each of the three met-
rics separately) and with a performance threshold, below which no
compensation is paid, set at 88% achievement and as shown below:
Finance performance pay-out table
The business objectives are set annually by the SES Board at the
beginning of each year. They are related to the strategic roadmap of
the company and include ESG goals.
Achievement is measured at the end of each performance year by the
Board, based on recommendations provided by the Remuneration
Committee.
The pay-out for business objectives can be as low as 0% and is capped
at 150% of the bonus target.
Only in very rare circumstances, the Board can apply a multiplier
between 0.5x and 1.5x on the overall achievement against objectives
either (i) to mitigate the impact of extraordinary circumstances, such
as COVID-19 when a 0.5x multiplier was applied on the 2020 bonus
payment or (ii) to recognise successful achievement of transforma-
tional projects expected to generate significant shareholder value
such as the release of the first C-band clearing milestone, leading to
a multiplier of 1.5x on the 2021 bonus payment.
Long-Term Equity (“LTE”)
The LTE is regulated by the Equity Based Compensation Plan (EBCP).
The objective of the EBCP is to enhance the competitiveness of the
Company and its affiliates in attracting and retaining the best global
leadership talent, and to position the Company as a global employer
of choice. Moreover, the EBCP is designed to ensure that SLT mem-
bers become shareholders of the Company, feel a sense of ownership,
and benefit from their contribution to increasing shareholder value.
To this end, the EBCP provides a framework for the grant or award of
equity-based incentive compensation in the form of:
• Restricted shares, representing one sixth of the LTE grant,
•
Performance shares, representing one half of the LTE grant and
with a vesting which is subject to financial criteria and
• Stock options, representing one third of the total LTE grant.
The annual grant is approved by the Board in its April meeting based
on a recommendation from the Remuneration Committee.
0%
40%
80%90%100%110%
120%
20%
60%
80%
100%
120%
140%
160%
Payout factor
Target achievement
SES ANNUAL REPORT 202184
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
For SLT members, the annual LTE grant value ranges from 58% of
their YBS to 105% of the YBS for the CEO.
Restricted Shares
The restricted shares are FDRs granted with the sole condition that
at the day the restricted shares vest, the SLT member is employed
by the Company. The restricted shares vest on 1 June of the third
year following the year of the grant.
The number of restricted shares granted is determined by multiply-
ing the relevant YBS with the applicable percentage and divided by
an average of 15 days closing prices of the Company’s FDRs at the
Paris stock exchange, which is reviewed by the Remuneration Com-
mittee for each grant year.
Performance Shares
Performance shares are FDRs granted to SLT members with vesting
subject to achievement of financial criteria. The performance shares
vest on 1 June of the third year following the year of the grant.
The number of performance shares granted is determined by multi-
plying the relevant YBS with the applicable percentage and divided
by the average 15 days measured share price.
Starting with 2021 grant, Total Shareholder Return (“TSR”) is the met-
ric retained to assess financial performance. It is measured on a rel-
ative basis to the median TSR performance of a panel of comparable
companies during the vesting period with:
• Share price at the end to be based on the average share price in
the 3-month period February – April preceding the vesting date i.e.,
from 1 February 2024 to 30 April 2024 for 2021 grant, and retaining
dealing days only
•
With share price at the beginning to be based on the average share
price during a 3-month period February – April of the grant year
i.e., from 1 February 2021 to 30 April 2021 for 2021 grant and retain-
ing dealing days only
• Measurement is based on Volume Weighted Average Price
• Outcome will be reviewed by the Remuneration Committee prior to
the Share Vesting Date
The comparator group is reviewed on a regular basis by the Remu-
neration Committee and is determined based on multiple factors such
as company size, business mix, geographic mix and TSR correlation.
Unless otherwise specified by the Remuneration Committee, the Per-
formance Shares will vest on the Share Vesting Date, subject to the
Participant’s continued employment with the Company or an Affiliate
and to the following ratchet table which will apply to determine the
proportion of Performance Shares that will vest:
Performance Shares ratchet table
Stock Options
The stock option is a standard call option with a maturity of 10 years
from the date of the option grant.
The final strike price corresponds to the average of 15 days closing
prices of the Company’s FDRs at the Paris stock exchange after the
allocation of options by the Board.
The grant value is determined by the multiplication of the YBS with
the applicable percentage.
The number of stock option units is derived directly by dividing the
grant value by the value of the stock option which is computed by an
external and independent valuation firm and using a Binomial or
Black-Scholes valuation. The final stock option valuation of each grant
is then approved by the Board.
The stock options must vest before they can be exercised. Starting
with 2021 grant, the vesting period of stock options is a three-year
cliff vesting schedule for closer alignment with best market practices.
As an example, if 100 stock options are granted in 2021, all units vest
and can be exercised as of 1 June 2024.
The SLT members must, when exercising their vested stock options
and their vested shares, do this in accordance with the regulations of
the French stock market authorities AMF and the SES Code of deal-
ing securities (i.e. require the prior authorization from the Deputy
1 2021 bonuses are calculated with a 1.5x multiplier to recognize the successful collection of the first tranche of accelerated payments from the C-Band trans-
action. 2020 bonuses include a 50% reduction in bonuses for SLT members, as part of a series of cost savings measures implemented to mitigate the impact
of the pandemic crisis.
2 Amortization of Long Term Equity grants.
3 Other benefits and payments include health care plans, death and disability insurance, company cars or car allowances and other payments.
4 Average to highest compensation ratio (comprising annual base salary, bonus and equity at target) for all employees at the level of SES S.A.
Yearly Base Salary
The yearly base salary is reviewed annually by the Remuneration
Committee.
For new nominations, base salaries are set based on external bench-
marks while also considering the degree of qualification and experi-
ence required as well as the employment conditions at the time of the
offer.
Except for the Chief Executive Officer, yearly base salaries of SLT
members based in Luxembourg were adjusted in October 2021
following the legally required cost of living adjustment (Luxembourg
Index).
Annual Bonus
The main objective of the annual bonus plan is to create a perfor
-
mance reward scheme that links annual variable compensation to the
company’s financial results and the performance of the SLT against
specific business objectives.
The annual bonus of SLT members is composed of two parts: (i) the
financial performance of the company; and (ii) the performance
against business objectives, accounting for 70% and 30% of the bonus
respectively.
The financial performance measures group actual achievement vs.
budget for three elements, revenue (accounting for 40%), EBITDA
(accounting for 40%), complemented by net operating cash flow
(accounting for 20%). The Board of Directors sets annual targets dur-
ing the annual budget process and confirms annual achievement level.
In 2021, the Group financial performance payout was confirmed at
95.6% based on the weighted results for the three metrics.
The business objectives are set annually by the Board at the start of
each performance year and relate to the strategic roadmap of the
Company. For confidentiality reasons, budget targets as well as con-
tent of strategic business objectives will not be disclosed publicly.
Two of the important business objectives for 2021 were to (i) execute
on C-Band clearing and (ii) establish strong ESG practices. The SES
Board confirmed an achievement for 2021 of 90.8% which applies
equally to each SLT member including the CEO.
As an exception for 2021, bonus payout of each employee including
SLT members was multiplied by a factor 1.5x as part of a special incen-
tive to meet C-Band clearing deadline ahead of schedule and for the
collection of the first tranche of accelerated payments.
The 2021 annual bonus relates to the 2021 performance year and will
be paid in March 2022.
SES ANNUAL REPORT 202189
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
The overview of the 2021 annual bonus of the CEO and other SLT
members is provided in the table below:
Bonus SLT expense
IN €
Bonus
at target
(Abs.)
Bonus at target
(% of Base
Salary)
Maximum
award limit
(150%)
Percentage
achievement
Bonus
Amount
Bonus Amount
after 1.5x
multiplier
1
Chief Executive Officer – Annual Bonus 2021
performance year 735.438 100% 1.103.156 94,2% 692.488 1.038.732
1 As an exception for 2021, bonus payouts of all employees including SLT members were multiplied by a factor of 1.5x as an incentive measure for meeting C-band clearing deadline
ahead of schedule and the collection of the first tranche of accelerated payments.
2 Financial performance of SLT members determined by outcome of group financial performance vs. Budget as well as the financial performance vs. Budget of business units (CEO
Networks).
Long Term Equity Incentives
The third element of the compensation package relates to the long-
term equity granted by the Company. The plan, administered by the
Remuneration Committee, permits the grant of three equity types: (i)
stock options; (ii) restricted shares; and (iii) performance shares. The
2021 total grant value was divided into one-third of stock options,
one-sixth of restricted shares, and one half of performance shares.
The stock option is a standard call option with a maturity of 10 years.
The final strike price is determined as the fair market value with an
average of 15 days closing prices at the Paris stock exchange after
the numbers of options have been determined by the Board. Stock
option grants prior to year 2021 have a vesting period of four years
with a yearly vesting of 25% on 1 January of each year following the
grant. For closer alignment with market practices, stock option grants
from year 2021 on have a three-year cliff vesting of 100% on 1 June
of the third year following the grant year.
The Restricted Shares are FDRs granted with the sole condition that,
at vesting, the SLT member must be employed by SES. The Restricted
Shares vest on 1 June of the third year following the year of their grant.
Performance Shares are FDRs granted to SLT members and vest on
1 June of the third year following the year of their grant. Performance
shares granted prior to year 2021 are subject to the outcome of the
compounded three years adjusted Economic Value Added (adjusted
EVA). From grant 2021 onwards, vesting is subject to outcome of Total
Shareholder Return (TSR), measured on a relative basis to the median
TSR performance of a panel of comparable companies during a three-
year period and with a maximum vesting of 150%. In 2021, the com-
parator group determined by the Remuneration Committee comprises
11 companies including satellite operators and European telcos,
selected based on multiple factors such as company size, business
mix, geographic mix and TSR correlation.
During 2021, the members of the SLT were awarded a combined total
of 953,598 options to acquire company FDRs at an exercise price of
€6.395 as well as 60,372 restricted shares as part of the company’s
long-term incentive plan and 181,116 performance shares. The CEO
was awarded 269,375 stock options, 17,054 restricted shares and
51,162 performance shares.
The detailed overview of the 2021 equity grant and vesting for the
CEO and other SLT members is provided as follows:
SES ANNUAL REPORT 202190
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
Long Term Equity 2021
Long Term Equity Plan – 2021 GrantEquity Vesting in 2021
Customer payments received in advance of the provision of service
are recorded as contract liabilities and presented as ‘deferred income’
in the statement of financial position, and for significant advance pay-
ments, interest is accrued on the amount received at the effective
interest rate at the time of receipt. Our contracts at times contain
prepayment terms that range from one month in advance to one year
in advance of providing the service. Since the period of time between
when the Group transfers a promised good or service to a customer
and when the customer pays for that good or service is one year or
less, the Group does not make an adjustment to the transaction price
for the effects of a significant financing component.
The unbilled portion of recognised revenues is recorded as a contract
asset and presented as ‘unbilled accrued revenue’ within ‘Trade and
other receivables’, allocated between current and non-current as
appropriate.
Customer payments are generally due in advance or by the end of
the month of capacity service.
SES ANNUAL REPORT 2021110
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
DIVIDENDS
The Company declares dividends after the consolidated financial state-
ments for the year have been approved. Accordingly, dividends are
recorded in the subsequent year’s consolidated financial statements.
PROVISIONS
Provisions are recognised when the Group has a present legal or con-
structive obligation as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will be required
to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management’s best
estimate of the expenditure required to settle the present obligation
at the end of the reporting period.
BORROWINGS
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently carried at amortised cost;
any difference between the proceeds (net of transaction costs) and
the redemption value is recognised in the consolidated income state-
ment over the period of the borrowings using the effective interest
method.
Fees paid on the establishment of loan facilities are recognised as
origination costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs.
CURRENT TAXES
Current tax assets and liabilities for current and prior periods are
measured at the amount expected to be recovered from, or paid to,
the tax authorities. The tax rates and laws used to compute these
amounts are those enacted, or substantively enacted, at the report-
ing date.
DEFERRED TAXES
Deferred tax is determined using the liability method on temporary
differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting
date.
Deferred tax liabilities are recognised for all taxable temporary differ-
ences, except:
• where the deferred tax liability arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a busi-
ness combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and
•
in respect of taxable temporary differences associated with
investments in subsidiaries where the timing of the reversal of the
temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable
future.
Deferred tax assets are recognised for all deductible temporary
differences, carry-forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be avail
-
able against which the deductible temporary differences, and the
carry-forward of unused tax credits and unused tax losses can be
utilised except:
• where the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable
profit or loss; and
•
in respect of deductible temporary differences associated with
investments in subsidiaries, deferred tax assets are recognised only
to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each report-
ing date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets
are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profit will allow
the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply to the year when the asset is realised or the
liability is settled, based on tax rates and tax laws which have been
enacted, or substantively enacted, at the reporting date.
Deferred taxes are classified according to the classification of the
underlying temporary difference either as income or as an expense
included in profit or loss, or in other comprehensive income or directly
in equity.
Tax benefits acquired as part of a business combination, but not
satisfying the criteria for separate recognition at that date, are
recognised subsequently if new information about facts and circum-
stances change. The adjustment is either treated as a reduction in
goodwill (as long as it does not exceed goodwill) if it was incurred
during the measurement period or recognised in profit or loss.
Deferred tax assets and liabilities are offset, if a legally enforceable
right exists to set off current tax assets against current tax liabilities
and the deferred taxes relate to the same taxable entity and the same
taxation authority.
SES ANNUAL REPORT 2021111
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
TRANSLATION OF FOREIGN CURRENCIES
The consolidated financial statements are presented in euro (€),
which is the Company’s functional and presentation currency. Each
entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using
that functional currency.
Transactions in foreign currencies are initially recorded in the entity’s
functional currency at the exchange rate prevailing at the date of the
transaction. The cost of non-monetary assets is translated at the rate
applicable at the date of the transaction. All other assets and liabili-
ties are translated at closing rates of the period. During the year,
expenses and income expressed in foreign currencies are recorded
at exchange rates which approximate the rate prevailing on the date
they occur or accrue. All exchange differences resulting from the
application of these principles are included in the consolidated
income statement.
The Group considers that monetary long-term receivables or loans
with a subsidiary that is a foreign operation for which settlement is
neither planned nor likely to occur in the foreseeable future is, in
substance, a part of the entity’s net investment in that foreign oper-
ation. The related foreign exchange differences and income tax effect
of the foreign exchange differences are included in the foreign cur-
rency translation reserve within equity. On disposal of a foreign oper-
ation, the deferred cumulative amount recognised in equity relating
to that foreign operation is reclassified to the consolidated income
statement.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate.
The assets and liabilities of consolidated foreign operations are trans-
lated into euro at the year-end exchange rates, while the income and
expense items of these foreign operations are translated at the
average exchange rate of the year. The related foreign exchange
differences are included in the foreign currency translation reserve
within equity. On disposal of a foreign operation, the deferred cumu-
lative amount recognised in equity relating to that foreign operation
is reclassified to the consolidated income statement as part of the
gain or loss on disposal.
The US dollar exchange rates used by the Group during the year were
as follows:
$ Exchange Rate
Average rate
for 2021
Closing rate
for 2021
Average rate
for 2020
Closing rate
for 2020
$1.18941.13261.13841.2271
BASIC EARNINGS PER SHARE
The Company’s capital structure consists of Class A and Class B
shares, entitled to the payment of annual dividends as approved by
the shareholders at their annual meetings. Holders of Class B shares
participate in earnings and are entitled to 40% of the dividends
payable per Class A share. Basic earnings per share is calculated by
dividing the net profit attributable to ordinary shareholders, adjusted
by deducting the assumed coupon, net of tax, on the perpetual bonds,
by the weighted average number of common shares outstanding
during the period as adjusted to reflect the economic rights of each
class of shares.
DILUTED EARNINGS PER SHARE
Diluted earnings per share adjusts the figures used in the determi-
nation of basic earnings per share to reflect the weighted average
number of additional ordinary shares that would have been out-
standing assuming the conversion of all dilutive potential ordinary
shares.
HEDGE OF A NET INVESTMENT IN A FOREIGN
OPERATION
Changes in the fair value of a derivative or non-derivative instrument
that is designated as a hedge of a net investment are recorded in the
foreign currency translation reserve within equity to the extent that
it is deemed to be an effective hedge. The ineffective portion is
recognised in the consolidated income statement as finance income
or cost.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated or exercised, the hedge no longer
qualifies for hedge accounting, or the Group revokes the designation.
At that point in time, any cumulative gain or loss on the hedging
instrument recognised in equity is kept in equity until the forecasted
transaction occurs. If a hedged transaction is no longer expected to
occur, the net cumulative gain or loss recognised in equity is trans-
ferred to net profit or loss for the period.
The Group formally documents all relationships between hedging
instruments and hedged items, as well as its risk-management objec-
tive and strategy for undertaking various hedge transactions. This
process includes allocating all derivatives that are designated as net
investment hedges to specific assets and liabilities in the consolidated
statement of financial position. The Group also formally assesses both
at the inception of the hedge and on an ongoing basis, whether each
derivative is highly effective in offsetting changes in fair values or
cash flows of the hedged item. If it is determined that a derivative is
not highly effective as a hedge, or if a derivative ceases to be a highly
effective hedge, the Group will discontinue hedge accounting
prospectively. The ineffective portion of hedge is recognised in profit
or loss.
SES ANNUAL REPORT 2021112
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
DERECOGNITION OF FINANCIAL ASSETS
AND LIABILITIES
1) Financial assets
A financial asset is derecognised where:
• the right to receive cash flows from the asset has expired;
• the Group retains the right to receive cash flows from the asset but
has assumed an obligation to pay them in full without material delay
to a third party under a ‘pass-through’ arrangement;
• the Group has transferred its rights to receive cash flows from the
asset and either:
a) has transferred substantially all the risks and rewards of the
asset; or
b) has neither transferred nor retained substantially all the risks and
rewards of the asset but has transferred control of that asset.
2) Financial liabilities
A financial liability is derecognised when the obligation under the lia-
bility is discharged, cancelled or expired. Where an existing financial
liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecog-
nition of the original liability and the recognition of a new liability, and
the difference in the respective carrying amount is recognised in profit
or loss.
Offsetting financial instruments
Financial assets and liabilities are offset, and the net amount reported
in the consolidated statement of financial position, when there is a
legally enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis or realise the asset and settle
the liability simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bank-
ruptcy of the Company or the counterparty.
ACCOUNTING FOR PENSION OBLIGATIONS
The Company and certain subsidiaries operate defined contribution
pension plans.
A defined contribution plan is a pension plan under which the Group
pays fixed contributions to a third-party financial institution. The
Group has no legal or constructive obligation to pay further contri-
butions if the financial institution’s pension fund does not hold suffi-
cient assets to pay all employees the benefits relating to employee
service in the current and prior periods.
For defined contribution plans, the Group pays contributions to
publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further
payment obligations once the contributions have been paid. The con-
tributions are recognised as employee benefit expense when they are
due. Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payments is available.
SHARE-BASED PAYMENTS
1) Equity-settled share-based compensation plans
Employees (including senior executives) of the Group receive remu-
neration in the form of share-based compensation transactions,
whereby employees render services as consideration for equity instru-
ments (‘equity-settled transactions’). The cost of equity-settled trans-
actions is measured by reference to the fair value at the date on which
they are granted. The fair value is determined by an external valuer
using a binomial model for the Stock Appreciation Rights Plan (‘STAR
Plan’) and Equity Based Compensation Plan comprising options
(‘EBCP Option Plan’), and a Black Scholes Model for the Equity Based
Compensation Plan comprising performance shares (‘EBCP PS’) and
restricted shares (‘EBCP RS’). Further details are given in >> Note 22.
In valuing equity-settled transactions, no account is taken of any
non-market performance conditions, the valuation being linked only
to the price of the Company’s shares, if applicable.
The cost of equity-settled transactions is recognised, together with
a corresponding increase in equity, over the period in which the per-
formance and/or service conditions are fulfilled, ending on the date
on which the relevant employees become fully entitled to the award
(the vesting date). The cumulative expense recognised for equity-set-
tled transactions at each reporting date until the vesting date reflects
the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately
vest. The consolidated income statement charge or credit for a period
represents the movement in the cumulative expense recognised as
at the beginning and end of that period. No expense is recognised for
awards that do not ultimately vest.
The dilutive effect of outstanding options is reflected as additional
share dilution in the computation of earnings per share >> Note 10.
2) Cash-settled share-based compensation plans
A liability is recognised for the fair value of cash-settled transactions.
The fair value is measured initially at each reporting date up to and
including the settlement date, with changes in fair value recognised
in employee benefits expense. The fair value is expensed over the
period until the vesting date with recognition of a corresponding lia-
bility. The fair value is determined using a binomial model, further
details of which are given in >> Note 22.
DEEPLY SUBORDINATED FIXED RATE
RESETTABLE SECURITIES (“PERPETUAL BOND”)
The deeply subordinated fixed rate securities issued by the Company
are classified as equity since the Company has no contractual
obligation to redeem the securities, and coupon payments may be
deferred under certain circumstances (more details are given in
>> Note 20 and recorded at fair value. Subsequent changes in fair
value are not recognised in equity. Coupons become payable when-
ever the Company makes dividend payments. Coupon accruals are
considered in the determination of earnings for calculating earnings
per share >> Note 10.
SES ANNUAL REPORT 2021113
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
LEASES
The determination as to whether an arrangement is, or contains, a
lease is based on the substance of the arrangement at the inception
date, primarily whether the contract conveys the right to control the
use of an identified asset for a period of time in exchange for consid-
eration. Control is conveyed where the Group as lessee has both the
right to direct the identified asset’s use and to obtain substantially all
the economic benefits from that use.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of
the following lease payments:
• fixed payments (including in-substance fixed payments), less any
lease incentives receivable;
• variable lease payments that are based on an index or a rate;
•
amounts expected to be payable by the lessee under residual value
guarantees;
• the exercise price of a purchase option if the lessee is reasonably
certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term
reflects the lessee exercising that option.
Lease payments are discounted using the interest rate implicit in the
lease, if that rate can be determined, or the Group’s incremental bor-
rowing rate. At the commencement of a lease the Group recognises
a lease asset and a lease liability. The lease liability is initially meas-
ured at the present value of the lease payments payable over the
lease term, discounted at the rate implicit in the lease. Lease pay
-
ments are apportioned between the finance charges and reduction
of the lease liability to achieve a constant rate of interest on the
remaining balance of the liability. Finance costs are charged directly
to expense.
In its accounting policies the Group applies the following practical
expedients:
•
using a single discount rate for a portfolio of leases with similar
characteristics; and
• not accounting for leases ending within 12 months of the date of
the initial application, or where the underlying asset has a low value.
NEW STANDARDS AND INTERPRETATIONS
NOT YET ADOPTED
A number of new standards and amendments to standards and inter-
pretations are relevant for the Group and effective for annual periods
beginning on or after 1 January 2022, and have not been early adopted
in preparing these consolidated financial statements:
1) Amendments to IAS 1 on classification of liabilities
as current or non-current
On 23 January 2020, the IASB issued “Classification of Liabili-
ties as Current or Non-Current (Amendments to IAS 1)”. The
amendment will affect the presentation of liabilities in the con-
solidated statement of financial position. The amendment clar-
ifies that the classification of a liability as current or non-current
should be based on rights in existence at the end of the report-
ing period to defer settlement of a liability by at least 12 months.
The amendment also clarifies that the classification of a liability
should be unaffected by the entity’s expectations regarding
whether it will exercise its rights to defer payment. The amend-
ment is effective for annual reporting periods beginning on or
after 1 January 2023. The amendment was not yet endorsed by
the EU. The Group does not expect any significant impact of
these amendments on its consolidated financial statements.
2) Amendment to IFRS 3, IAS 16, IAS 37 and
annual improvements 2018-2020
Amendments to IFRS 3, “Business combinations” update a refer-
ence in IFRS 3 to the Conceptual Framework for Financial Report-
ing without changing the accounting requirements for business
combinations.
Amendments to IAS 16, “Property, plant and equipment” prohibit
a company from deducting from the cost of property, plant and
equipment amounts received from selling items produced while
the company is preparing the asset for its intended use. Instead,
a company will recognise such sales proceeds and related cost
in profit or loss.
Amendments to IAS 37, “Provisions, contingent liabilities and
contingent assets” specify which costs a company includes when
assessing whether a contract will be loss-making.
Annual improvements make minor amendments to o IFRS 1,
“First-time adoption of IFRS”, IFRS 9. “Financial instruments”,
IAS 41. “Agriculture” and the illustrative examples accompanying
IFRS 16, ‘Leases’.
The amendments were endorsed by the EU and are effective for
annual reporting periods beginning on or after 1 January 2022.
The Group does not expect any significant impact of these
amendments on its consolidated financial statements.
3) Amendments to IAS 1 and IAS 8
On 12 February 2021, the IASB issued amendments to IAS 1
“Presentation of Financial Statements” regarding the disclosure
of accounting policies and as well amendments to IAS 8
“Accounting policies, changes in accounting estimates and
errors” on the definition of accounting estimates. Both amend-
ments aim to improve accounting policy disclosure and to help
users of the financial statements to distinguish between changes
in accounting estimates and changes in accounting policies. The
amendments were not yet endorsed by the EU and are effective
for annual periods beginning on or after 1 January 2023. The
Group does not expect any significant impact of these amend-
ments on its consolidated financial statements.
SES ANNUAL REPORT 2021114
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
4) Amendments to IAS 12 related to assets and liabilities
arising from a single transaction
On 6 May 2021, the IASB published the amendments to IAS 12
“Income taxes” regarding the deferred tax related to assets and
liabilities arising from a single transaction, that clarifies how com-
panies account for deferred tax on transactions such as leases
and decommissioning obligations. The amendments were not
yet endorsed by the EU and are effective for annual periods
beginning on or after 1 January 2023. The Group does not expect
any significant impact of these amendments on its consolidated
financial statements.
NOTE 3 – SEGMENT INFORMATION
The Group does business in one operating segment, namely the
provision of satellite-based data transmission capacity, and ancillary
services, to customers around the world.
The Senior Leadership Team (‘SLT’), which is the chief operating
decision-making committee in the Group’s corporate governance
structure, reviews the Group’s financial reporting and generates those
proposals for the allocation of the Group’s resources which are
submitted for validation to the Board of Directors. The main sources
of financial information used by the SLT in assessing the Group’s
performance and allocating resources are:
•
analyses of the Group’s revenues from its business units SES Video
and SES Networks (comprising the sales verticals Fixed Data,
Mobility and Government);
• cost and overall Group profitability development;
• internal and external analyses of expected future developments in
the markets into which capacity is being delivered and of the
commercial landscape applying to those markets.
When analysing the performance of the operating segment against
the prior period figures, these are presented both as reported and at
‘constant FX’, whereby they are recomputed using the prevailing
exchange rates for each corresponding month of the current period.
The segment’s financial results for 2021 are set out below:
Operating Profit Reported
€ MILLION20212020
Change
Favourable
+/- Adverse
Revenue1,7821,876-5.0%
C-band repurposing income90110N/m
Operating expenses(821)(807)-1.7%
EBITDA1,8621,07972.6%
EBITDA margin (%)69.4%57.2%12.2% pts
Depreciation and impairment (626)(808)22.5%
Amortisation and impairment (768)(189)N/m
Operating profit46882N/m
Adjusted EBITDA1,0911,152-5.2%
Adjusted EBITDA margin61.2%61.4%-0.3% pts
C-band repurposing income90110N/m
C-band operating expenses(122)(43)N/m
Restructuring expenses(8)(40)80.0%
EBITDA1,8621,07972.6%
Operating Profit at Constant FX
€ MILLION2021
Constant
FX
2020
Change
Favourable
+/- Adverse
Revenue1,7821,835-2.9%
C-band repurposing income90111N/m
Operating expenses(821)(789)-4.1%
EBITDA1,8621,05776.2%
EBITDA margin (%)69.4%57.6%11.8% pts
Depreciation and impairment (626)(802)21.9%
Amortisation and impairment (768)(190)N/m
Operating profit46865N/m
Adjusted EBITDA1,0911,128-3.3%
Adjusted EBITDA margin61.2%61.4%-0.3% pts
C-band repurposing other income90111N/m
C-band operating expenses(122)(42)N/m
Restructuring expenses(8)(40)80.0%
EBITDA1,8621,05776.2%
SES ANNUAL REPORT 2021115
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
REVENUE BY BUSINESS UNIT
As reported and at constant FX, the revenue allocated to the relevant
business units developed as follows:
Revenue by Business Unit 2021 and 2020
€
MILLION
20212020
Constant
FX 2020
Change
Favourable
+/-
Adverse
Change
Favourable
+/- Adverse
(constant
FX)
SES Video1,0461,1081,097-5.6%-4.6%
Under-
lying
1
1,0461,1081,097-5.6%-4.6%
Periodic
2
–––N/mN/m
SES Net-
works735767737-4.2%-0.4%
Under-
lying
1
734759730-3.3%0.5%
Periodic
2
187-86.3%-85.0%
Sub-total1,7811,8751,834-5.0%-2.9%
Under-
lying
1
1,7801,8671,827-4.7%-2.6%
Periodic
2
187-86.3%-85.0%
Other
3
111N/mN/m
Group Total1,7821,8761,835-5.0%-2.9%
Revenue by Business Unit 2020 and 2019
€
MILLION
20202019
Constant
FX 2019
Change
Favourable
+/-
Adverse
Change
Favourable
+/- Adverse
(constant
FX)
SES Video1,1081,2131,208-8.6%-8.3%
Under-
lying
1
1,1081,2101,205-8.4%-8.0%
Periodic
2
–33N/mN/m
SES Net-
works767762747+0.6%+2.6%
Under-
lying
1
759734720+3.4%+5.3%
Periodic
2
82827-71.5%-70.3%
Sub-total1,8751,9751,955-5.1%-4.1%
Under-
lying
1
1,8671,9441,925-4.0%-3.0%
Periodic
2
83130-74.3%-73.3%
Other
3
199N/mN/m
Group Total1,8761,9841,964-5.4%-4.5%
REVENUE BY CATEGORY
The Group’s revenue analysis from the point of view of category and
timing can be found below:
Revenue by Category 2021
€ MILLION
Revenue
recognised
at a point
in time
Revenue
recognised
over timeTotal
Revenue from contracts
with customers281,7221,750
Lease income –3232
Total281,7541,782
Revenue by Category 2020
€ MILLION
Revenue
recognised
at a point
in time
Revenue
recognised
over timeTotal
Revenue from contracts
with customers201,8161,836
Lease income –4040
Total201,8561,876
Revenue from contracts with customers recognised at a point in time
is related to sales of equipment and amounts to € 28 million in 2021
(2020: € 20 million).
1 “Underlying” revenue represents the core business of capacity sales, as well as associated services and equipment. This revenue may be impacted by changes in launch schedule
and satellite health status.
2. “Periodic” revenue separates revenues that are not directly related to or would distort the underlying business trends. Periodic revenue includes: the outright sale of transponders
or transponder equivalents; accelerated revenue from hosted payloads during the course of construction; termination fees; insurance proceeds; certain interim satellite missions
and other such items when material
3 Other includes revenue not directly applicable to SES Video or SES Networks
SES ANNUAL REPORT 2021116
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
REMAINING PERFORMANCE OBLIGATIONS
Our remaining performance obligations, which the Group refers to as
revenue “backlog,” represent our expected future revenues under
existing customer contracts and include both cancellable and
non-cancellable contracts. The backlog was € 5.8 billion as of Decem-
ber 31, 2021 (2020: € 6.1 billion), € 5.2 billion (2020: € 5.6 billion) of
which related to ‘protected’ backlog and € 0.6 billion (2020: € 0.5 bil-
lion) of which related to ‘unprotected’ backlog. Approximately 25% of
the backlog is expected to be recognised as revenue in 2022, approx-
imately 21% in 2023, and approximately 17% in 2024, with the remain-
ing thereafter.
Protected backlog includes non-cancellable contracts and cancella-
ble contracts with substantive termination fees. For contracts with
termination options that do not have substantive termination fees,
protected backlog also includes contract periods up to the first
optional termination date. Unprotected backlog includes revenue from
contracts that are cancellable and not subject to substantive termi-
nation fees.
REVENUE BY COUNTRY
The Group’s revenue from external customers analysed by country
using the customer’s billing address is as follows:
Revenue by Country
€ MILLION20212020
Luxembourg (SES country of domicile)54 54
United States of America554 590
Germany355 368
United Kingdom212 232
France78 94
Others – Europe203196
Others326342
Total1,782 1,876
No single customer accounted for 10%, or more, of total revenue in
2021, or 2020.
PROPERTY, PLANT AND EQUIPMENT AND
INTANGIBLE ASSETS BY LOCATION
The Group’s property, plant and equipment and intangible assets are
located as set out in the following table. Note that satellites are allo-
cated to the country where the legal owner of the asset is incorporated.
Property, Plant and Equipment and
Intangible Assets by Location
€ MILLION20212020
Luxembourg (SES country of domicile)5,7674,754
United States of America2,0362,808
The Netherlands1,2061,183
Isle of Man–900
Sweden145160
Germany4548
Israel2730
Others125130
Total9,35110,013
NOTE 4 – OPERATING EXPENSES
The operating expense categories disclosed include the following
types of expenditure:
1) Cost of sales, which excludes staff costs and depreciation, rep-
resents expenditures which generally vary directly with revenue.
They are incurred in delivering services to customers and include
a variety of expenses such as rental of third-party satellite capac-
ity, third-party teleports, connectivity, equipment and equipment
rental, customer support costs such as hosting, monitoring,
implementation, engineering work as well as commissions. Other
cost of sales detailed below include an amount of € 51 million
(2020: € 12 million) for C-band repurposing related expenses
>> Note 33.
Cost of Sales
€ MILLION20212020
Rental of third-party satellite capacity(68)(82)
Customer support costs(72)(55)
Other cost of sales(179)(154)
Total cost of sales(319)(291)
2) Staff costs of € 304 million (2020: € 330 million) include gross
salaries and employer’s social security payments, payments into
pension schemes for employees, charges arising under share-
based payment schemes, as well as staff-related restructuring
charges of € 8 million (2020: € 38 million) and C-band repurpos-
ing related expenses of € 36 million (2020: € 15 million). At the
year-end the total full-time equivalent number of members of
staff was 2,037 (2020: 2,095).
3) Other operating expenses of € 198 million (2020: € 186 million)
are, by their nature, less variable to revenue development. Such
costs include office-related and technical facility costs, in-orbit
insurance costs, marketing expenses, general and administrative
expenditure, consulting charges, travel-related expenditure and
movements in provisions for debtors. Other operating expenses
also include an amount of nil (2020: € 2 million) of restructuring
charges in connection with the Group’s ongoing optimisation
programme >> Note 24 and as well an amount of € 35 million
(2020: € 16 million) C-band repurposing related expenses
>> Note 33.
SES ANNUAL REPORT 2021117
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOTE 5 – AUDIT AND NON-AUDIT FEES
For 2021 and 2020 the Group recorded charges, billed and accrued,
from its independent auditors, and affiliated companies thereof, as
set out below:
Audit and Non-Audit Fees
€ MILLION20212020
Fees for statutory audit of annual and consoli-
dated accounts2.12.2
Fees charged for other assurance services0.1 0.1
Fees charged for other non-audit services––
Total audit and non-audit fees2.22.3
‘Other assurance services’ represent primarily comfort letters issued in
connection with treasury funding operations and interim dividend reviews.
NOTE 6 – FINANCE INCOME AND COSTS
Finance Income and Costs
€ MILLION20212020
Finance income
Interest income–1
Net foreign exchange gains
1
37–
Fair value increases on financial assets
2
13–
Total501
Finance costs
Interest expense on borrowings
(excluding amounts capitalised)(95)(123)
Loan fees and origination costs and other(26)(30)
Net foreign exchange losses
1
–(32)
Total(121)(185)
1 Net foreign exchange gains/losses are mostly related to revaluation of bank
accounts, deposits and other monetary items denominated in US dollars.
2 Represents fair value increases on assets included as part of ‘Other financial assets’
in the consolidated statement of financial position and required to be measured at
fair value following recent third-party transactions
NOTE 7 – INCOME TAXES
Taxes on income comprise the taxes paid or owed in the individual
countries, as well as deferred taxes. Current and deferred taxes can
be analysed as follows:
Income Taxes
€ MILLION20212020
Current income tax
Current income tax charge on result of the year(163)(38)
Adjustments in respect of prior periods9(4)
Foreign withholding taxes(7)(9)
Total current income tax(161)(51)
Deferred income tax
Relating to origination and reversal of temporary
differences(23)73
Relating to tax losses carried forward2517
Changes in tax rate6(12)
Adjustment of prior years(24)(10)
Total deferred income tax21058
Income tax benefit per
consolidated income statement497
Consolidated statement of changes in equity
Current and Deferred Income tax related to items
(charged) or credited directly in equity
Post-employment benefit obligation(1)1
Impact of currency translation(36)35
Net investment hedge – current tax26(29)
Tax impact of the treasury shares impairment
recorded in the stand-alone financial statements16
Tax impact on perpetual bond2018
Current and deferred income taxes reported
in equity1031
A reconciliation between the income tax benefit and the profit before
tax of the Group multiplied by a theoretical tax rate of 25.69% (2020:
25.69%) which corresponds to the Luxembourg domestic tax rate for
the year ended 31 December 2021 is as follows:
Income Tax Reported in the
Consolidated Income Statement
€ MILLION20212020
Profit/(loss) before tax from continuing
operations397(102)
Multiplied by theoretical tax rate102(26)
Effect of different foreign tax rates144
Investment tax credits(44)(64)
Tax exempt income––
Non-deductible expenditures29
Taxes related to prior years34
Effect of changes in tax rate(5)15
Other changes in group tax provision
not included in separate lines(3)–
Impairment on investments in subsidiaries
and other assets(107)14
Impact of deferred taxes(23)31
Foreign withholding taxes 79
Other5(3)
Income tax reported in the
consolidated income statement(49)(7)
SES ANNUAL REPORT 2021118
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
EFFECT OF CHANGES IN TAX RATE
During 2021, the Dutch government decided to increase the general
corporate income tax rate from 25% to 25.8% as of 1 January 2022
and the deferred tax assets and liabilities balances have been re-
measured on this revised basis. The total impact of this re-measurement
was an income tax expense of € 3 million. The above re-measurement
was considered a change in accounting estimate in accordance with
IAS 8.
During 2021, the commune of Betzdorf hosting SES corporate head-
quarters decided to increase the municipal business tax rate from
7.5% to 9% bringing the total corporate income tax rate for Luxem-
bourg from 25.69% to 27.19% as from 1 January 2022. The deferred
tax assets and liabilities balances have been re-measured on this
basis. The total impact of this re-measurement was a tax income of
€ 8 million. The above re-measurement was considered a change in
accounting estimate in accordance with IAS 8.
FOREIGN WITHHOLDING TAX
The foreign withholding tax of € 7 million includes a provision of
€ 4 million for Indian withholding tax retained by customers and paid
to the Indian tax authorities. A final decision on Indian withholding
taxes is still pending at the level of the Supreme Court.
The remaining € 3 million relates to withholding tax retained by
customers in other jurisdictions.
INVESTMENT TAX CREDITS
In 2021, the continuing investment in the O3b mPOWER and SES-17
triggered the recognition of deferred tax assets for investment tax
credits of € 19 million (2020: € 55 million) and € 14 million (2020: € 6
million) respectively. In 2021, SES started the procurement of 19.2°
replacement satellites triggering the recognition of deferred tax
assets for investment tax credits of € 9 million (2020: € 0 million).
The remaining € 2 million of deferred tax assets for investment tax
credits was recognised in connection with other investments by Group
companies in Luxembourg.
According to Luxembourg tax law, unused investment tax credits can
be carried forward for ten years. SES believes that it is probable that
sufficient taxable profits will be available in the Luxembourg fiscal
unity in the future to use all the available investment tax credits.
IMPACT OF DEFERRED TAXES
GovSat-1 was launched in January 2018 and entered in operational
service in March 2018. A deferred tax asset for investment tax credits
of € 26 million was recognised by its owner LuxGovSat S.A. in the
same year. LuxGovSat S.A. is not part of the Luxembourg fiscal unity.
As a result of management’s analysis of the recoverability of this
deferred tax asset, an additional amount of € 11 million was reversed
during 2021 (2020: € 4 million).
On the basis of a recoverability analysis, an additional net deferred
tax asset of € 41 million was recognised in relation to prior year tax
losses in Luxembourg, Israel and Germany.
An additional deferred tax liability of € 6 million was recorded follow-
ing the transfer of the business assets of SES Satellite Leasing Ltd to
SES Astra S.A.
IMPAIRMENT ON SUBSIDIARIES AND OTHER
ASSETS
The aggregate impact of € 107 million comprises the following:
•
The impairment charge of € 903 million (2020: € 64 million)
recorded on the carrying value of subsidiary investments and other
assets held by entities in Luxembourg resulting in a positive effec-
tive tax rate (‘ETR’) impact of € 232 million (2020: € 17 million).
• The impairment charge of € 62 million taken on the carrying value
of intercompany receivables held by entities in Luxembourg result-
ing in a positive ETR impact of € 16 million.
•
The impairment charge of € 673 million (2020: nil) recorded in con-
nection with the goodwill attributed to the GEO North America
cash-generating unit >> Note 14 resulting in a negative ETR impact
of € 141 million (2020: nil).
NOTE 8 – DEFERRED INCOME TAX
The deferred tax positions included in the consolidated financial
statements can be analysed as follows:
Deferred Income Tax
€ MILLION
Deferred
tax assets
2021
Deferred
tax assets
2020
Deferred
tax liabili-
ties 2021
Deferred
tax liabili-
ties 2020
Losses carried forward30173––
Tax credits
259227––
Intangible assets2327(239)(219)
Tangible assets––(160)(123)
Trade receivables1913––
Other 59(39)(27)
Total deferred tax
assets/(liabilities)607349(438)(369)
Offset of deferred
taxes(39)(36)3936
Net deferred tax
assets/(liabilities)568313(399)(333)
Deferred tax assets have been offset against deferred tax liabilities
where they relate to the same tax authority and the entity concerned
has a legally enforceable right to set off current tax assets against
current tax liabilities.
SES ANNUAL REPORT 2021119
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
In 2021 the Group recognised additional deferred tax assets for tax
losses carried forward in Luxembourg for € 247 million (2020: nil). Tax
losses can be carried forward in Luxembourg for 17 years. Using the
estimated future taxable income based on the most recent business
plan information approved by the Board of Directors, the Company
has concluded that the deferred tax assets for the remaining tax
losses carried forward are recoverable (€ 281 million).
In addition to the recoverable tax losses for which the Group has
recognised deferred tax assets, the Group has further tax losses of
€ 488 million as at 31 December 2021 (31 December 2020: € 497 mil-
lion) which are available for offset against future taxable profits of the
companies in which the losses arose. € 329 million (31 December
2020: 431 million) of these tax losses were generated in the US.
Deferred tax assets have not been recognised in respect of these
losses as they cannot be used to offset taxable profits elsewhere in
the Group and they have arisen in subsidiaries which are not expected
to generate taxable profits against which they could be offset in the
foreseeable future.
No deferred income tax liabilities have been recognised for withhold-
ing tax and other taxes which would be payable on the unremitted
earnings of certain subsidiaries. Such amounts are permanently
reinvested or not subject to taxation.
The movement in deferred income tax assets and liabilities during
the year, without taking into consideration the offsetting of balances,
is as follows:
Movement in deferred Income Tax Assets
DEFERRED TAX ASSETS
Losses
carried
forwardTax credits
Intangible
assetsReceivablesOtherTotal
At 1 January 202071168302310302
(Charged)/credited to the income statement 360(4)(9)151
Charged directly to equity––––11
Exchange difference
1
(2)––(1)(2)(5)
At 31 December 202072228261310349
(Charged)/credited to the income statement 22731(3)5(5)255
Charged directly to equity––––––
Exchange difference
1
2––1–3
At 31 December 202130125923195607
Movement in deferred Income Tax Liabilities
DEFERRED TAX LIABILITIES
Intangible
assets
Tangible
assetsOtherTotal
At 1 January 202020716925401
Charged/(credited) to the income statement 29(38)2(7)
Exchange difference
1
(17)(8)–(25)
At 31 December 202021912327369
Charged/(credited) to the income statement 2311245
Exchange difference
1
186–24
At 31 December 202123916039438
1 A foreign exchange impact arises due to the translation of Group’s operations with a different functional currency than euro. This amounts to € 21 million as at 31 December 2021
(2020: € 20 million)
SES ANNUAL REPORT 2021120
1
OPERATIONAL
& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOTE 9 – COMPONENTS OF OTHER
COMPREHENSIVE INCOME
Components of Other Comprehensive Income
€ MILLION20212020
Impact of currency translation471(624)
Income tax effect(36)35
Total impact of currency translation, net of tax435(589)
The impact of currency translation in other comprehensive income
relates to exchange gains or losses arising on the translation of the
net assets of foreign operations from their functional currency to
the euro, which is the Company’s functional and presentation
currency.
The unrealised gain in 2021 of € 471 million (2020: unrealised loss of
€ 624 million) reflects the impact on the valuation of SES’s net US
dollar assets due to the strengthening of the US dollar against the
euro from $ 1.2271 to $ 1.1326 (2020: the weakening of the US dollar
against the euro from $ 1.1234 to $ 1.2271). This effect is partially off-
set by the impact of the net investment hedge >> Note 18.
NOTE 10 – EARNINGS PER SHARE
Earnings per share is calculated by dividing the net profit for the year
attributable to ordinary shareholders of each class of shares by the
weighted average number of shares outstanding during the year as
adjusted to reflect the economic rights of each class of share. The
net profit or loss for the year attributable to ordinary shareholders
has been adjusted to include an assumed coupon, net of tax, on the
Perpetual Bonds.
For 2021, a basic earnings per share of € 0.92 per Class A share (2020:
basic loss per share of € 0.30), and € 0.37 per Class B share (2020:
basic loss per share of € 0.12) have been calculated as follows:
Profit attributable to the owners of the parent for calculating basic
earnings per share:
Profit Attributable to Owners
€ MILLION20212020
Profit attributable to owners of the parent453(86)
Assumed coupon on perpetual bond (net of tax)(41)(49)
Total412(135)
Assumed coupon accruals of € 41 million (net of tax) for the year
ended 31 December 2021 (2020: € 49 million) related to the Perpet-
ual Bonds in issue have been considered for the calculation of the
basic and diluted earnings available for distribution.
The weighted average number of shares based on the capital struc-
ture of the Company as described in >> Note 20, net of own shares
held, for calculating basic earnings per share was as follows:
A- and B-shares
20212020
Class A shares (in million)369.7378.4
Class B shares (in million)189.2191.7
Total558.9570.1
Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares which are primarily related to
the share-based compensation plans. A calculation is done to deter-
mine the number of shares that could have been acquired at fair value
based on the monetary value of the subscription rights attached to
outstanding share options. The number of shares calculated as above
is compared with the number of shares that would have been issued
assuming the exercise of the share options and the difference, if it
results in a dilutive effect, is considered to adjust the weighted
average number of shares.
For 2021, a diluted earnings per Class A share of € 0.92 (2020: diluted
loss of € 0.30), and € 0.37 per Class B share (2020: diluted loss of
€ 0.12) have been calculated as follows:
Diluted Earnings per Share
€ MILLION20212020
Profit attributable to owners of the parent453(86)
Assumed coupon on perpetual bond (net of tax)(41)(49)
Total412(135)
The weighted average number of shares, net of own shares held, for
calculating diluted earnings per share was as follows:
Weighted Average Number of Shares
20212020
Class A shares (in million)372.9381.3
Class B shares (in million)189.2191.7
Total562.1573.0
SES ANNUAL REPORT 2021121
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& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOTE 11 – DIVIDENDS PAID AND PROPOSED
Dividends declared are paid net of any withholding tax (2021: € 20 million,
2020: € 20 million).
Dividends declared and paid during the year:
Dividends Declared and Paid
€ MILLION20212020
Class A dividend for 2020: € 0.40
(2019: € 0.40)153153
Class B dividend for 2020: € 0.16
(2019: € 0.16)3131
Total184184
Dividends proposed for approval at the annual general meeting to
be held on 1 April 2022, which are not recognised as a liability as at
31 December 2021:
Dividend Proposed
€ MILLION20222021
Class A dividend for 2021: € 0.50
(2020: € 0.40)192153
Class B dividend for 2021: € 0.20
(2020: € 0.16)3831
Total230184
NOTE 12 – PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment 2021
€ MILLIONLand and buildingsSpace segmentGround Segment
Other fixtures and
fittings, tools and
equipmentTotal
Cost
As at 1 January 202127811,09181122912,409
Additions6–7316
Disposals(3)(1)(1)(5)
Retirements
1
(6)(850)(3)(1)(860)
Transfers from assets in course of
construction (>> Note 13)3–174161
Transfers from intangible assets (>> Note 14)––3–3
Impact of currency translation11468386523
As at 31 December 202128910,70987227712,147
Depreciation
As at 1 January 2021(186)(7,321)(562)(170)(8,239)
Depreciation (15)(478)(53)(29)(575)
Impairment expense–(73)––(73)
Impairment reversal–22––22
Disposals––112
Retirements
1
685031860
Impact of currency translation(6)(332)(29)(4)(371)
As at 31 December 2021(201)(7,332)(640)(201)(8,374)
Net book value as at 31 December 2021883,377232763,773
1 Satellites ASTRA 2B, ASTRA 1D, AMC-2, AMC-16, NSS-806 and NSS-5 were retired in 2021
SES ANNUAL REPORT 2021122
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SOCIAL & GOVERNANCE
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3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
Property, Plant and Equipment 2020
€ MILLIONLand and buildingsSpace segmentGround Segment
Other fixtures and
fittings, tools and
equipmentTotal
Cost
As at 1 January 202029012,05483421513,393
Additions5–8215
Disposals(2)–(1)(1)(4)
Retirements
1
(6)(285)(1)(2)(294)
Transfers from assets in course of construction (>> Note 13)3–152341
Transfers between categories––1(1)–
Impact of currency translation(12)(678)(45)(7)(742)
As at 31 December 202027811,09181122912,409
Depreciation
As at 1 January 2020
(178)(7,335)(536)(158)(8,207)
Depreciation (21)(527)(57)(20)(625)
Impairment expense–(229)––(229)
Impairment reversal–46––46
Disposals––112
Retirements
1
628512294
Impact of currency translation7439295480
As at 31 December 2020(186)(7,321)(562)(170)(8,239)
Net book value as at 31 December 2020923,770249594,170
1 Satellites AMC-7 and ASTRA 1F were retired in 2020
SES ANNUAL REPORT 2021123
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SOCIAL & GOVERNANCE
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GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
The Group’s policy in setting the useful economic life of its satellites
is to initially use the satellite design life and then, once sufficient time
has passed to allow for initial anomalies to be investigated and future
fuel projections to be stabilised, to adjust the depreciation life to take
into account factors such as the technical condition of the satellite,
its projected remaining fuel life, and replacement or redeployment
plans.
The review in 2021 resulted in revisions to the remaining useful eco-
nomic lives of three GEO satellites resulting in a net decrease in the
depreciation expense for 2021 of € 9 million. The corresponding
review in 2020 resulted in revisions to the remaining useful economic
lives of four GEO satellites and five MEO satellites resulting in a net
decrease in the depreciation expense for 2020 of € 17 million.
As at 31 December 2021, the amount of the property, plant and equip
-
ment pledged in relation to the Group’s liabilities is nil (2020: nil).
For further information related to right-of-use assets, >> Note 29.
IMPAIRMENT OF SPACE SEGMENT ASSETS
In 2021, the net impairment expense for space segment assets
recorded was € 51 million (2020: € 183 million), comprising impairment
expenses of € 73 million offset by impairment reversals of € 22 million.
The charges and reversals are the aggregation of impairment testing
procedures on specific satellites, or combinations of co-located
satellites, in the Group’s geostationary fleet.
The following table discloses the applicable amounts and discount
rates used in the impairment test for those geostationary satellites
subject to impairment expenses or reversals during the year.
Impairment expenses and reversals
€ MILLION
Carrying
value
Value
in use
Discount
rate
Impairment
expense
2021 – Expense3332604.9% - 8.9%73
2021 – Reversal661144.9% - 8.9%(22)
2021 – Net impact51
2020 – Expense8145855.8% - 7.1%229
2020 – Reversal1401865.8% - 7.1%(46)
2020 – Net impact183
The impairment expenses and reversals recorded reflect updated
business assumptions for the satellites through to the end of their
useful economic lives. In general, these updated assumptions reflect
a combination of revised commercial developments and expectations,
updated assessments of the regulatory environment impacting
certain assets (and hence the Group’s ability to achieve the forecast
commercial exploitation), changes in the competitive environment in
which the Group operates, and certain changes in the operation of
the satellites (for example the decision to place a particular satellite
into inclined orbit, or changes to the timing thereof) or associated
ground segment infrastructure.
Specific developments, largely in the second half of 2021, in these
areas contributed to the weakening of cash flow projections for certain
satellites and contributed to the recording of the impairment expenses
noted above.
As part of standard impairment testing procedures, the Group
assesses the impact of changes in the discount rates and reductions
in EBITDA. Discount rates are simulated up to 1% below and above
the CGU’s specific rate used in the base valuation and EBITDA pro-
jections are simulated up to 5% below and above the base valuation.
In this way a matrix of valuations is generated, which reveals the
potential exposure to impairment expenses based on movements in
the valuation parameters which are within the range of outcomes
foreseeable at the valuation date.
The most recent testing showed that for this category of geostation-
ary space segment assets, then under the least favourable combina-
tion of the circumstances above (namely a 1% higher discount rate in
conjunction with a 5% lower EBITDA projection) an incremental
impairment of € 68 million would be recorded. A 1% increase in the
discount rate at a constant EBITDA level would increase satellite
impairments by € 28 million. Taken separately, a 5% decrease in
EBITDA would increase satellite impairments by € 31 million.
SES ANNUAL REPORT 2021124
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& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOTE 13 – ASSETS IN THE COURSE OF
CONSTRUCTION
Assets in the Course of Construction 2021
€ MILLION
Land and
Buildings
Space
segment
Ground
segment
Fixtures, tools
& equipment Total
Cost and net book value as at 1 January 202111,52990311,651
Movements in 2021
Additions
1
7360639439
Transfers to assets in use (>> Note 12)(3)–(17)(41)(61)
Transfer to intangible assets (>> Note 14)––(10)–(10)
Transfer between categories2–(12)10–
C-band repurposing (>> Note 33)
2
–(305)(8)–(313)
Impact of currency translation–801182
Cost and net book value as at 31 December 202171,664107101,788
1 Additions related to O3b mPOWER, SES-17, Astra 19.2E (including € 237 million non-cash transactions)
2 C-band reimbursable space segment and ground cost (non-cash)
Assets in the Course of Construction 2020
€ MILLION
Land and
Buildings
Space
segment
Ground
segment
Fixtures, tools
& equipment Total
Cost and net book value as at 1 January 202018426021924
Movements in 2020
Additions
1
–7666926861
Transfers to assets in use (>> Note 12)(3)–(15)(23)(41)
Transfer to intangible assets (>> Note 14)––(5)(1)(6)
Transfer between categories3–(12)9–
Impact of currency translation–(79)(7)(1)(87)
Cost and net book value as at 31 December 202011,52990311,651
1 Additions related to O3b mPOWER, SES-17, C-band repurposing (including € 702 million non-cash transactions)
Borrowing costs of € 6 million (2020: € 5 million) arising from financ-
ing specifically relating to satellite procurements were capitalised
during the year and are included in additions to ‘Space segment’ in
the above table.
A weighted average effective rate of 2.92% (2020: 3.34%) was used,
representing the Group’s average weighted cost of borrowing. Exclud-
ing the impact of the loan origination costs and commitment fees the
average weighted interest rate was 2.76% (2020: 3.14%).
In connection with space segment additions in 2021, the Group
recognised € 164 million (2020: € 405 million) in respect of the O3b
mPOWER arrangement described >> Note 27, € 140 million (2020:
€ 47 million) in respect of the SES-17 construction and € 56 million
in respect of procurement of satellites in connection with Astra 19.2°E
replacement.
Due to the nature of the arrangements, these transactions are
included in the Group’s assets in the course of construction space
segment and included in ‘Payments for purchases of tangible assets’
within the consolidated statement of cash flows only to the extent
that payments were made to the suppliers.
SES ANNUAL REPORT 2021125
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& STRATEGIC
REPORT
2
ENVIRONMENTAL,
SOCIAL & GOVERNANCE
(ESG) REPORT
3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
NOTE 14 – INTANGIBLE ASSETS
Intangible Assets 2021
€ MILLION
Orbital slot
licence
rights
(indefinite-
life)Goodwill
Orbital slot
licence
rights
(definite
life)
Other
definite life
intangibles
Internally
generated
develop-
ment costsTotal
Cost
As at 1 January 20211,9302,173771470585,402
Additions––9–3746
Retirement––(567)
1
(70)–(637)
Transfers from assets
in course of construction–––49(49)–
Transfers between categories4––(4)––
Transfers to property, plant and
equipment (>> Note 12)–––(3)–(3)
Transfers from assets under
constructions, property, plant
and equipment (>> Note 13) –––10–10
Impact of currency translation147203–17–367
As at 31 December 20212,0812,376213469465,185
Amortisation
As at 1 January 2021(14)(147)(630)(419)–(1,210)
Amortisation––(38)(57)–(95)
Impairment–(673)–––(673)
Retirement––567
1
70–637
Impact of currency translation(2)(36)–(16)–(54)
As at 31 December 2021(16)(856)(101)(422)–(1,395)
Net book value as at
31 December 20212,0651,52011247463,790
Intangible Assets 2020
€ MILLION
Orbital slot
licence
rights
(indefinite-
life)Goodwill
Orbital slot
licence
rights
(definite
life)
Other
definite life
intangibles
Internally
generated
develop-
ment costsTotal
Cost
As at 1 January 20202,0952,398776458395,766
Additions–––24547
Retirement–––(6)–(6)
Transfers from assets
in course of construction–––24(24)–
Transfers from assets under
constructions, property, plant
and equipment (>> Note 13) –––7(1)6
Impact of currency translation(165)(225)(5)(15)(1)(411)
As at 31 December 20201,9302,173771470585,402
Amortisation
As at 1 January 2020–(134)(587)(360)–(1,081)
Amortisation––(44)(51)–(95)
Impairment(14)(51)–(29)–(94)
Retirement–––6–6
Impact of currency translation–38115–54
As at 31 December 2020(14)(147)(630)(419)–(1,210)
Net book value as at
31 December 20201,9162,02614151584,192
1 Concession agreement with Luxembourg government 2001 to 2021
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SOCIAL & GOVERNANCE
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3
CORPORATE
GOVERNANCE &
REMUNERATION
4
CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
INDEFINITE-LIFE INTANGIBLE ASSETS
The Group’s indefinite-life intangible assets comprise goodwill and
orbital slot licence rights.
Impairment testing procedures are performed annually, or whenever
events or changes in circumstances indicate that the carrying amount
of such assets may not be recoverable. The annual impairment tests
are performed as of 31 October each year. The recoverable amounts
are determined based on a value in use calculation >> Note 2 using
the most recent business plan information approved by the Board of
Directors, which covers a period of five years.
The calculations of value in use are most sensitive to:
1) Movements in the underlying business plan
assumptions
Business plans are drawn up annually and provide an assessment
of the expected developments for a five-year period beyond the
end of the year when the plan is drawn up. These business plans
reflect both the most up-to-date assumptions concerning the
CGU’s markets and also developments and trends in the busi-
ness of the CGU. For the provision of satellite capacity these will
particularly take into account the following factors:
•
the expected developments in transponder fill rates, including
the impact of replacement capacity;
•
any changes in the expected capital expenditure cycle, for exam-
ple due to the technical degradation of a satellite or the need for
replacement capacities; and
•
any changes in satellite procurement, launch or cost assump-
tions, including launch schedule.
2) Changes in discount rates
Discount rates reflect management’s estimate of the risks spe-
cific to each CGU. Management uses a pre-tax weighted average
cost of capital as discount rate for each CGU. This reflects mar-
ket interest rates of twenty-year bonds in the market concerned,
the capital structure of businesses in the Group’s business sector,
and other factors, as necessary, applied specifically to the CGU
concerned.
3) Changes in perpetuity growth rates assumptions
Growth rate assumptions used to extrapolate cash flows beyond
the business planning period are based on the commercial expe-
rience relating to the CGUs concerned and the expectations for
developments in the markets which they serve.
REVISION TO DEFINITION OF CASH-GENERATING
UNITS FOR INTANGIBLE ASSETS
With effect from 1 January 2021 the Company has revised the identi-
fication of the cash-generating units which are applied in the impair-
ment testing of both goodwill and orbital slot rights. These changes,
and the rationale for each are as set out below:
1) Discontinuation of ‘MX1’ as a separate cash-generat-
ing unit for goodwill impairment testing
As noted in the Group’s 2020 consolidated financial statements,
the goodwill for this cash-generating unit has been fully written
off and hence no further impairment exposure remains. With
effect from January 2021 the tangible fixed assets and working
capital of MX1 have been integrated into the Group’s wider Video
business.
2) Disaggregation of current ‘SES GEO operations’ cash
generating unit
The gross goodwill as at 31 December 2021 of € 2,376 million
derives primarily from the acquisition of two significant GEO
businesses: GE Americom in 2001 and New Skies Satellites in
2006.
Since 2012, and following on from the integration of these busi-
nesses into a single operational unit alongside the more
Europe-centric SES ASTRA operations, the Group’s approach to
segmental reporting moved away from the former presentation
of two GEO-related segments ‘ASTRA’ and ‘World Skies’ (being
broadly the legacy GE Americom and New Skies Satellites
business combined) to a single operating segment defined as
‘the provision of satellite-based data transmission capacity, and
ancillary services to customers around the world’.
From 2013 this integrated model was also adopted in the identi-
fication of cash-generating units for the purpose of goodwill
impairment testing for GEO operations, with the more regionally
derived components of goodwill arising in the purchase price
allocation exercises for those two GEO acquisitions being
grouped and monitored at the level of a single group of cash-gen-
erating units; an approach which was maintained for the eight
years between 2013 and 2020.
Beginning in 2021, management has disaggregated this single
cash-generating unit to revert to a regionally based reporting
and monitoring of goodwill, realigning it with the approach taken
for the impairment testing of orbital slot rights. This reflects the
developments in the business environment of the Group,
triggered by the increasing demand from market participants in
various business areas (primarily telecommunications compa-
nies) for bandwidth to support the provision of data connectivity
services.
SES ANNUAL REPORT 2021127
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REMUNERATION
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CONSOLIDATED
FINANCIAL
STATEMENTS
5
SES S.A.
ANNUAL
ACCOUNTS
6
ADDITIONAL
INFORMATION
These developments mean that there are increasingly two
economic paths available to the Group in commercialising the
valuable portfolio of orbital slot rights it has generated over many
years, including through the two GEO business acquisitions
noted above:
•
utilising these rights in the provision of services on its own
satellite fleet; and
•
generating economic value through entering into transactions
with third parties to make these rights available to them in return
for an appropriate financial compensation.
A specific example is the ongoing C-band repurposing project
in the U.S. following the adoption by the Federal Communications
Commission of its Report and Order and Order of Proposed
Modification to clear a 300 MHz band of C-band downlink
spectrum between 3,700 and 4,000 MHz by December 2025
>> Note 33.
Since the opportunities, and hence potential cash flows, arising
from this expanding area of commercialisation of orbital slot
rights other than through conventional on-fleet operations, are
by their nature arrangements with regional regulatory authorities
and market participants, and since the linkage to the orbital slot
rights is so strong, it seems appropriate to management to
re-align the approach to impairment testing by looking at both
areas using on a regional basis and disaggregating the cash-
generating units again for the purpose of goodwill testing.
The goodwill has been allocated between the three cash-gener-
ating units (as defined below) based on the assets acquired in
the above acquisitions, with materially all the assets acquired in
the GE Americom acquisition being allocated to ‘North America’
and materially all the assets acquired in the New Skies Satellites
acquisition being allocated to ‘International’. See the goodwill
table below for the allocation of goodwill to the new CGUs.
3) Reduction in regional cash-generating units for impair-
ment testing of orbital slot rights from six to three
Three regions (‘Europe’, ‘North America’ and ‘International’) have
been defined for impairment testing procedures for both good-
will and orbital slot rights, compared to the six regions (‘Europe’,
‘US’, ‘Canada’, ‘Mexico’, ‘Brazil’ and ‘International’) used between
2012 and 2020 for procedures on orbital slot rights. Whilst there
is no change to the ‘Europe’ region, the cash-generating units
‘US’, ‘Canada’ and ‘Mexico’ have been grouped into a new ‘North
America’ unit, and ‘Brazil’ has been grouped with ‘International’.
In the case of ‘North America’ this aggregation reflects the cur-
rent inter-operability of spacecraft and orbital locations which
can be used to serve customers in the U.S., Canada and Mexico,
as well as the increasing interdependency of the contractual
arrangements for significant customers in those markets which
mean that the associated cash flows can no longer be seen as
largely independent of each other.
Concerning ‘International’ then this aggregation again reflects
the increasing interdependency of cash flows between regions
with an increasing use of Brazilian spectrum by assets, such as
SES-10 and the recently launched SES-17 satellite, which are also
serving ‘International’ customers, and the fact that the Group is
now also serving the Brazilian market from orbital slots other
than those allocated to the unit.
As the Group extends its global connectivity offering integrating
both GEO and MEO capacity, the level of interdependency of
cash flows between the GEO International and MEO is expected
to increase.
The Group’s business plan is approved by the Board of Directors
based on consolidated data. The consolidated data is based on
separate data prepared for each legal entity of the Group
>> Note 36. To prepare business plans for the regional CGUs, the
following assumptions are made:
• GEO revenue from satellites is allocated to the GEO region pri-
marily covered by the satellite. Non-satellite revenue is included
in each CGU based on the legal entity expected to generate the
revenue. MEO revenue, including GEO revenue expected to be
used servicing primarily MEO contracts, is included in MEO.
• Operating expenses are allocated based on the underlying legal
entity expected to incur the expense. Reallocations were
performed when costs in one CGU clearly support the business
of a different CGU.
•
Intercompany transactions between CGUs included in the
business plans of the individual legal entities were included,
except where the above allocation methodologies made them no
longer relevant.
•
The Accelerated Relocation Payments related to the C-band
repurposing >> Note 33 were allocated between the GEO North
America and GEO International CGUs based on the Group’s inter-
nal allocation of the proceeds, and considering the likely alloca-
tion agreed with the relevant regulatory authorities.
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DISCOUNT RATES APPLIED
The pre-tax discount rates for each CGU are presented below:
Pre-Tax discount Rates for CGU
20212020
GEO Europe6.40%–
GEO North America10.18%–
GEO International8.14%–
GEO–8.04%
MEO8.04%7.97%
MX1 –8.43%
These discount rates were computed using market interest rates and
commercial spreads, the capital structure of businesses in the Group’s
business sector, and the specific risk profile of the businesses con-
cerned. Generally, lower market risk premiums offset an increase in
risk-free rates, especially on rates that are calculated with USD-based
inputs.
PERPETUAL GROWTH RATE (‘PGR’) ASSUMPTIONS
As a result of GEO disaggregation mentioned above, separate GEO
terminal growth rates by region were calculated for the first time. The
terminal growth rate used in the valuations is -0.4% for GEO Europe,
-4.5% for GEO North America, and +3.0% for GEO International. In
2020, a +0.5% terminal growth rate was used for GEO. The terminal
growth rate used for MEO was +3.0% (2020: +2.0%).
These rates reflect the most recent long-term planning assumptions
approved by the Board of Directors and can be supported by refer-
ence to the trading performance over a longer period and incorporate
also projected growth rates for wide-beam and high-throughput
satellites markets from external data sources. A cap has been applied
to the PGRs in the case of GEO International and MEO. On a weighted-
average basis, the terminal growth rate used for the GEO CGUs is
comparable with the prior-year rate used for GEO. For MEO, the higher
rate reflects higher the projected growth expectations approaching
the end of the business planning period, which, again, is supported
by external data sources.
IMPAIRMENT CHARGES RECORDED FOR 2021
1) Goodwill
As a result of the impairment tests conducted as of 31 December 2021,
an impairment expense of € 673 million was recorded on GEO North
America. The impairment is mainly driven by the impact of the disag-
gregation of the CGUs with the lower resulting attributable perpetual
growth rate and, to a large extent, the recognition and receipt of the
Phase I Accelerated Relocation Payment in 2021 >> Note 33.
No impairment expense was recorded on the carrying value of good-
will in GEO Europe, GEO International, or MEO.
•
For GEO Europe, which mainly represents the organically grown
Astra business, no impairment was necessary due to steady cash
flows, low discount rates, and a minimal goodwill amount (see
below).
•
For GEO International, no impairment was necessary. This CGU
encompasses most of the Group’s GEO high-throughput satellites,
which are expected to contribute to future revenue growth,
although part of the value in use is also attributable to future pro-
ceeds receivable in the framework of the FCC Order as set out in
more detail >> Note 33 below.
• For MEO, the valuation has increased due mainly to the increase in
the PGR.
For all three CGUs, the updated business plan approved by the SES
Board of Directors in December 2021 already reflects the impact of
COVID-19.
Arising from the impairment reviews above, the Group’s remaining
goodwill has a net book value as at 31 December 2021 and 2020 by
CGU as presented below:
Goodwill: Net Book Value
€ MILLION20212020
GEO Europe1919
GEO North America1,1201,657
GEO International224207
MEO 152138
Other (SES GS)55
Total
1,5202,026
The decrease in GEO North America reflects the € 673 million impair-
ment mentioned above.
As part of standard impairment testing procedures, the Group
assesses the impact of changes in the discount rates and growth
assumptions of the valuation surplus, or deficit as the case may be.
Both discount rates and terminal values are simulated up to 1% below
and above the specific rate used in the base valuation. In this way, a
matrix of valuations is generated which reveals the potential exposure
to impairment expenses for each CGU based on movements in the
valuation parameters which are within the range of outcomes fore-
seeable at the valuation date.
The most recent testing showed that:
• Neither GEO Europe or GEO International would record an impair-
ment applying the most adverse combination of developments
(a 1% increase in discount rates and 1% decrease in the perpetual
growth rate).
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• For GEO North America, the recorded impairment would increase
by € 13 million in the case of a 1% decrease in the perpetual growth
rate, by € 54 million in the case of a 1% increase in the discount
rate, and by € 65 million in the case of both a 1% decrease in the
perpetual growth rate and a 1% increase in the discount rate.
• For MEO, whilst an impairment would not be required in the case
of a 1% decrease in the perpetual growth rate, it would require an
impairment of € 49 million in the case of a 1% increase in the dis-
count rate and of € 329 million were there to be a combination of
a 1% higher discount rate and a 1% lower perpetual growth rate.
Taken separately from changes in discount and perpetuity growth rates,
a 5% reduction in EBITDA would not lead to an impairment expense
in the GEO Europe, GEO International, or MEO CGUs. The recorded
impairment in GEO North America would increase by € 44 million.
2) Orbital slot licence rights
The rights conveyed by orbital slot licences in different jurisdictions
can have varying characteristics that make them separate and dis-
tinct from the orbital slot licence rights in other jurisdictions. The MEO
orbital rights are not separable and do not generate separate cash
flows, and thus are considered a single CGU, which is tested for impair-
ment together with the related corresponding goodwill and the MEO
satellites constellation.
The pre-tax discount rates for each CGU are presented below:
Orbital Slots Licence Rights:
Pre-Tax discount Rates for CGU
20212020
GEO Europe7.40%9.04%
GEO North America11.18%9.15%
GEO International9.14%9.15%
MEO8.04%7.97%
Similar to the pre-tax discount rates used for goodwill testing, these
rates were selected to reflect market interest rates and commercial
spreads; the capital structure of businesses in the Group’s business
sector; and the specific risk profile of the businesses concerned. The
terminal growth rates used in the valuations are identical to those
used in goodwill testing. The Group did not record any impairment
expenses related to orbital slot licence rights for the year ending
31 December 2021 (2020: € 14 million).
The orbital slot license rights have a net book value as at 31 Decem-
ber 2021 and 2020 by CGU as presented below:
Orbital Slot Licence Rights: Net Book Value
€ MILLION20212020
Europe168146
North America (including U.S., Canada,
and Mexico in 2020)325300
International447432
MEO1,1251,038
Total2,0651,916
As part of standard impairment testing procedures, as with goodwill,
the Group assesses the impact of changes in the discount rates and
growth assumptions of the valuation surplus, or deficit as the case
may be. Both discount rates and terminal values are simulated up to
1% below and above the CGU’s specific rate used in the base valua-
tion. In this way a matrix of valuations is generated which reveals the
potential exposure to impairment expenses for each CGU based on
movements in the valuation parameters which are within the range
of outcomes foreseeable at the valuation date.
For orbital slot licence rights, the least favourable case – a combination
of lower terminal growth rates and higher discount rates – would not
lead to any impairment expenses of any orbital slot licence right CGU.
DEFINITE-LIFE INTANGIBLE ASSETS
The definite-life intangible assets as at 31 December 2021 have a net
book value by country as presented below:
Definite Life Intangible Assets 2021
€ MILLION2021
Orbital slot
licence
rightsOther
Luxembourg 10525
Israel–2
Brazil 7–
Other –20
Total11247
The definite-life intangible assets as at 31 December 2020 have a net
book value by country as presented below:
Definite Life Intangible Assets 2020
€ MILLION2020
Orbital slot
licence
rightsOther
Luxembourg 13024
Israel–2
Brazil 7–
Other 425
Total14151
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ADDITIONAL
INFORMATION
The Group’s primary definite life intangible asset has been the agree-
ment concluded by SES ASTRA with the Luxembourg government in
relation to the usage of Luxembourg frequencies in the orbital posi-
tions of the geostationary arc from 45˚ West to 50˚ East for the period
from 1 January 2001 to 31 December 2021. Given the finite nature of
this agreement, these usage rights – valued at € 550 million at the
date of acquisition – were amortised on a straight-line basis over the
21-year term of the agreement and were retired as of 31 December
2021.
In November 2019, SES and the Luxembourg government reached an
agreement to renew SES’s concession to operate satellites operating
under Luxembourg’s jurisdiction for 20 years, effective from January
2022 when the current concession expires, with an annual fee of
€ 1 million payable from 2025 onwards. Under the agreement, and
starting from 2022, SES will also contribute a maximum of € 7 million
per year into a space sector fund.
The Group also holds orbital slot licence rights in Brazil, which were
awarded to a Group subsidiary at auction in 2014 for a 15-year term.
These rights are being amortised over a 30-year period, reflecting the
Group’s ability to renew the rights once in 2029 at a minimal cost,
assuming they are being utilised.
As at 31 December 2021, the amount of the intangible assets pledged
in relation to the Group’s liabilities is nil (2020: nil).
NOTE 15 – ASSETS AND LIABILITIES RELATED
TO CONTRACTS WITH CUSTOMERS
The Group has recognised the following assets and liabilities related
to contracts with customers:
Assets and Liabilities Related to
Contracts With Customers
€ MILLION20212020
Current contract assets
Trade receivables357393
Provision for trade receivables(93)(93)
Trade receivables, net of provisions264300
Unbilled accrued revenue138127
Provision for unbilled accrued revenue(4)(2)
Unbilled accrued revenue, net of provisions134125
Deferred customer contract costs310
401435
Non-current contract assets
Unbilled accrued revenue254275
Provision for unbilled accrued revenue(9)(7)
Unbilled accrued revenue, net of provisions245268
Deferred customer contract costs99
254277
Current contract liabilities
Deferred income404454
Non-current contract liabilities
Deferred income314296
The following table shows the movement in deferred income recog-
nised by the Group:
Movement in Deferred Income 2021
€ MILLIONNon-currentCurrent
As at 1 January 2021296454
Revenue recognised during the year–(1,132)
New billings–1,092
Other movements*8(20)
Impact of currency translation1010
As at 31 December 2021314404
* Other movements include reclassifications (between current and non-current,
upfront and deferred, as well as against trade receivables)
Movement in Deferred Income 2020
€ MILLIONNon-currentCurrent
As at 1 January 2020317467
Revenue recognised during the year–(1,184)
New billings–1,236
Other movements*(12)(50)
Impact of currency translation(9)(15)
As at 31 December 2020296454
* Other movements include reclassifications (between current and non-current,
upfront and deferred, as well as against trade receivables)
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NOTE 16 – TRADE AND OTHER RECEIVABLES
Trade and Other Receivables
€ MILLION20212020
Trade receivables, net of provisions264300
Unbilled accrued revenue, net of provisions379393
Other receivables1,34863
Total trade and other receivables1,991756
Of which:
Non-current245268
Current1,746488
Unbilled accrued revenue represents revenue recognised, but not
billed, under long-term customer contracts. Billing will occur based
on the terms of the contracts. The non-current balance represents
entirely unbilled accrued revenue. Other receivables include € 1,273
million (2020: € 21 million) to be received as part of the C-band repur-
posing project >> Note 33.
An amount of € 27 million (2020: € 35 million) was expensed in 2021
reflecting an increase in the impairment of trade and other receiva-
bles. This amount is recorded in ‘Other operating expenses’. As at
31 December 2021, trade and other receivables with a nominal amount
of € 106 million (2020: € 102 million) were impaired. Movements in
the provision for the impairment of trade and other receivables were
as follows:
Movement in the Provision for the Impairment
of Trade and other Receivables
€ MILLION20212020
As at 1 January 102113
Increase in provision4377
Reversals of provision(16)(42)
Utilised(32)(39)
Other movements3
Impact of currency translation6(7)
As at 31 December 106102
NOTE 17 – FINANCIAL INSTRUMENTS
FAIR VALUE ESTIMATION AND HIERARCHY
The Group uses the following hierarchy levels for determining the fair
value of financial instruments by valuation technique:
•
Level 1 – Quoted prices in active markets for identical assets or
liabilities;
•
Level 2 – Other techniques for which all inputs which have a
significant effect on the recorded fair value are observable either
directly or indirectly;
•
Level 3 – Techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
The fair value of investments that are actively traded in organised
financial markets is determined by reference to quoted market bid
prices at the close of business on the reporting date. For investments
where there is no active market, fair value is determined using
valuation techniques. Such techniques include using recent arm’s-
length market transactions; reference to the current market value of
another instrument, which is substantially the same; discounted cash
flow analysis and option pricing models.
In line with 2020, as at 31 December 2021, the Group does not have
any financial derivatives outstanding.
FAIR VALUES
The fair value of borrowings has been calculated with the quoted
market prices except for COFACE, the LuxGovSat Fixed Term Loan
Facility and the floating tranche of the Schuldschein Loan for which
the discounted expected future cash flows at prevailing interest rates
has been used. The fair value of foreign currency contracts is calcu-
lated by reference to current forward exchange rates for contracts
with similar maturity profiles.
All borrowings are measured at amortised cost. Financial assets and
other financial liabilities measured at amortised cost, have a fair value
that approximates their carrying amount.
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ADDITIONAL
INFORMATION
Set out below is a comparison by category of carrying amounts and
fair values of all the Group’s financial instruments that are carried in
the financial statements.
As at 31 December 2021 – Fair Values
Carried at
amortised cost
Carried at
fair valueTotal
€ MILLION
Fair value
hierarchy
Carrying
amount
Fair
value
Carrying
amount
Balance
Sheet
As at 31 December 2021
Financial assets
Non-current financial assets:
Other financial assets22626–26
Trade and other receivables245245–245
Total non-current financial assets271271–271
Current financial assets:
Trade and other receivables1,7461,746–1,746
Cash and cash equivalents1,0491,049–1,049
Total current financial assets2,7952,795–2,795
Financial liabilities
Borrowings:
At floating rates:
Syndicated loan 2019*2––––
COFACE24040–40
German Bond 2024 (€ 150 million), non-listed2150152–150
At fixed rates:
US Bond 2023 ($ 750 million)2662682–662
German Bond 2025 (€ 250 million), non-listed2250260–250
Eurobond 2026 (€ 650 million)2654680–654
As at 31 December 2021 – Fair Values
Carried at
amortised cost
Carried at
fair valueTotal
€ MILLION
Fair value
hierarchy
Carrying
amount
Fair
value
Carrying
amount
Balance
Sheet
Euro Private Placement 2027 (€ 140 million)
under EMTN2140160–140
Eurobond 2027 (€ 500 million)2497500–497
Eurobond 2028 (€ 400 million)2395417–395
Fixed Term Loan Facility (LuxGovSat)29911599
German Bond 2032 (€ 50 million), non-listed25060–50