Eutelsat Communications (Euronext:ETL) Q1 2027 Earnings Call

0:00 Welcome to the Eutelsat first quarter 2026-2027 revenues presentation. For the first part of the conference, the participants will be in listen-only mode. During the questions and answers session, participants will be able to ask questions by dialing pound key 5 on their telephone keypad. Now, I will hand the conference over to the speakers, Jean-François Fallacher, Chief Executive Officer, and Sébastien Rouge, Chief Financial Officer. Please go ahead.

0:32 Welcome and thank you for joining us today for Utelsat's first quarter 26-27 revenues presentation. I am Jean-François Fallacher, CEO of Utelsat, and I am joined by Sébastien Rouge, our Chief Financial Officer. Let us start with the highlights of the past quarter. Leo revenues continue their solid growth rate, up 30%, driving sustained growth across all our connectivity activities. Overall, our first quarter revenues were in line with expectations, enabling us to confirm our full-year 2026-2027 financial objectives, as well as our long-term targets.

1:18 Finally, we reached this past quarter a major strategic milestone with the successful completion of the IRI Square first rendezvous. The programme has now entered its construction phase, making the transition from programme definition to industrial execution and enabling us to recognise 8.9 billion of associated backlog. These milestones further cement Eutelsat's role at the heart of Europe's future sovereign connectivity infrastructure. Let me now provide precisely an update on the IRI Square program and on the progress we have achieved over the past month.

2:06 Last August, the European Commission and the Space Race Consortium officially confirmed the launch of the industrialization phase of the program, moving it from planning into full-scale deployment. At the heart of this ecosystem, Eutelsat will leverage its proven operational expertise, systems engineering capabilities, and unique experience in deploying and operating large-scale constellations to deliver one of Europe's most ambitious space programs. Our role encompasses the design, the deployment, and the operations of the IRE2 LEO constellation, integrated with a broader multi-orbit architecture spanning LEO, MIU, and of course, terrestrial infrastructure.

2:53 The LEO constellation combines an inclined orbital architecture with beamforming antennas, 5G and TN, and it will dynamically direct capacity to where demand is the greatest, providing higher throughput, improved service quality, and a more efficient use of network resources. Optical inter-satellite links will further enhance resilience, extend service availability and reduce reliance on ground infrastructure, and this will benefit governments, enterprises, mobility and other mission-critical applications. The Constellation will also support a new generation of smaller, lighter and more affordable user terminals, making high-performance satellite connectivity accessible to a broader range of customers.

3:40 As just said, Eutelsat, as the leader of the LEO segment within the SpaceRise consortium, will design, deploy and operate a constellation of 264 dual MILKA and KU satellites and 66 MILKA satellites providing access to over 2 terabit per second of sellable CLIO commercial capacity by mid-2032, which is more than twice the current one-way capacity. The total program funding stands at €15.6 billion, of which 74% is publicly funded. This is significantly reducing Zeutelsat's capital exposure.

4:26 Our own capex in this project amounts to 3.4 billion euros and this is split into 2.23 billion euros in the shared infrastructure and a further 1.16 billion euros in the commercial infrastructure which is consisting of Utilsat's own payload. These investments will be deployed from full year 27 to full year 34 and are structured to complement rather than compete with our existing investment program. Importantly, with construction related activities now underway, our backlog will now include 8.9 billion of revenues. These revenues are associated, these future revenues are associated with the execution of the program expected to be recognized mostly between the year 27 and 2031 as construction activities will progress.

5:24 Finally, ALG Square will effectively become Mutelsat's next-generation LEO infrastructure and will enable us to unlock an estimated €10 billion services revenues between 2032 and 2040. Here you have a look on the roadmap of IRI Square. So with IRI Square, Utelsat has established a clear and visible LEO roadmap until, as you can see here, until 2040. providing both continuity of service for existing customers while progressively delivering greater capacity. This path begins with the renewal in the expansion of the current OneWeb constellation for the deployment of 440 new satellites.

6:12 That will be complemented by 229 additional satellites. Designed to ensure continuity of service and that progressively will replace satellites reaching the end of their operational life and enhance the network's capabilities that will bring the total constellation to approximately 1,300 satellites over the 2030 horizon. The commercial segment of Iris Square itself is expected to be fully operational by mid-2032 and will progressively take over from the current one-web constellation while providing access to more than twice the current existing capacity and supporting hotelsat's long-term value creation.

6:59 And with that, let me now hand over to Sébastien Rouge, who will take you through our first quarter performance in more details.

7:10 Thank you, Jean-François. Good evening, everyone. Total revenues for the first quarter stood at 286 million euros, down 0.9% on a like-for-like basis. They reflected, and that's a good news, a slight positive currency effect. Revenues of the four operating verticals down 2.1% on a like-for-like basis. And finally, in the context of IRIS Square, 5 million of revenue were recognized during the first quarter from the commencement of construction related activities. This amount represents an initial contribution that is expected to increase materially over the remainder of the fiscal year as execution of the program advances.

8:02 Let's have a look at the segmental reporting. Video, representing 40% of revenue, stood at 110 million euros, a decline of 17.8%. Fixed connectivity revenues, representing 21% of the group total, decreased by 4.7% to 60 million euros. Government services, 22% of revenues, stood at 60 million euros, a rise of 14.3%. and Mobile Connectivity Revenues representing 17% of the group total stood at 48 million euros, an increase of 38%. Let's start with the details of video. As said above, video revenues amounted to 110 million, down 17.8% year-on-year, reflecting the carry-forward impact of recent contract renewals and capacity optimization initiatives of certain customers.

9:13 compounded by the termination of capacity contracts on the Express 81 and 82 Russian satellites. On a quarter-on-quarter basis, revenues were down by 12%, notably reflecting the above-mentioned capacity optimization from certain customer impacts. On the commercial front, Utelsat renewed several long-standing partnerships across its video business, including agreements with Record in Brazil, A1 Group in Central and Eastern Europe, and Télédiffusion d'Algérie, supporting the continued distribution of broadcast services across key video neighborhoods.

10:00 Looking ahead, the pace of decline is expected to moderate as most of the recent headwinds are absorbed and performance progressively realigns with underlying market trends. Let's now take a closer look at connectivity, which now accounts for 60% of Operating Vertical's revenue. First quarter revenues stood at 168 million euros, up 11.9%. They reflected a 30.1% rise in LEO revenues to 70.9 million, underpinned by sustained growth in higher quality service revenues across all three verticals, despite a lower contribution from terminal sales, as well as a 1.6% increase in geo-connectivity revenues to 97.4 million euros.

11:04 Quarter on quarter, revenues were down by 22.4%. The quarter on quarter decline in connectivity mainly reflects a higher comparison base in Q4-25-26, notably across government services and fixed connectivity, which included catch-up revenues as we announced in the last Q4 release. Let's look at each connectivity vertical in more detail. Q1 fixed connectivity revenues stood at 59.6 million euros, down 4.6% year on year. The decline primarily reflected more challenging market conditions for geo-enabled solutions, as well as a lower contribution from LEO terminal sales.

11:59 This was partially offset by continued growth in LEO service revenues. On the commercial front, Utelsat continued to expand its connectivity footprint through new agreements across Europe. In Portugal, Utelsat and the country's leading telecommunication operator, Mayo, announced a new partnership to expand the delivery of one-web Leo connectivity services. In Germany, Eutelsat also expanded its geocapacity agreement with Eurosky Park, extending secure satellite connectivity to critical offshore energy infrastructure in the North Sea through the flexible and scalable geocapacity of Eutelsat 10B. These agreements illustrate the growing demand for secure, resilient and diversified connectivity solutions across both enterprise and critical infrastructure markets.

13:08 Government services revenues stood at 60.3 million, up 14.3% year-on-year. Growth was driven by both GEO and LEO applications, reflecting notably the contribution from the Centaur Call of Contract under the 1 billion Nexus Framework Agreement with the French Ministry of the Armed Forces and Veterans. Services delivered in Ukraine and growing demand for sovereign connectivity service amid a rapidly evolving geopolitical landscape. UTELSAT has announced its participation in the Enhanced Satellite Connectivity Project for Greenland, a new initiative supported by the European Union, the Government of Greenland and the Government of Denmark to extend reliable connectivity to rural and remote communities across the country. Elsewhere, Utelsat and Germany's Aurora Tech, a leader in space-based thermal intelligence, announced a new partnership where Aurora Tech will reserve space aboard Utelsat's future one-web LEO satellite to host 48 thermal infrared payloads with the options for an additional 48.

14:39 Mobile connectivity revenues stood at 48.3 million, up 38.1% year-on-year. The aerial segment remained the main growth driver, benefiting from the continued expansion of both GEO and LEO connectivity solutions. In maritime, growth was primarily driven by the continued adoption of LEO solutions. Utelsat successfully completed its first rail connectivity trial in Poland aboard a long-distance train conducted on PKP Intercity's live rail network, demonstrating its OneWebLEO capabilities on a live rail network. The trial assessed seamless switching between satellites and terrestrial technologies and highlighted the potential of utelsat's rail connectivity solution to support passenger connectivity, operational communications and data service for both passenger and freight rail operators.

15:56 Let's go to the backlog now. The backlog stood at 12.1 billion euros as of September 30th, 2026. As Iris Square program entered its construction phase, the backlog now includes revenues associated with the execution of construction-related activities under the program amounting to 8.9 billion euros. Excluding this contribution, the connectivity and video backlogs, now respectively standing at 1.9 and 1.2 billion euros, were slightly lower compared to June 26, reflecting their natural consumption.

16:41 On this note, let me now hand back to Jean-François, who will conclude with our outlook and perspectives.

16:50 Thank you very much, Sébastien. The first quarter performance was in line with our expectation, enabling us to actually confirm our full year 26-27 financial objectives. Leo revenues are set to drive further strong growth with anticipated growth over 30%. As in full year 25-26, Leo growth will offset the decline of geo revenues and notably the decline of video revenues. In consequence, we expect to deliver slight growth in the revenues of the company of the four operating verticals and an EBITDA margin at broadly the same level than last year.

17:35 Gross capital expenditure this year is expected to amount to circa 1.2 billion euros. This is reflecting milestone shifts from previous years, as well as the ramp up of capex associated with the renewal of our current one-web constellation generation renewal. And we confirm our revenues expectation on the middle term in a range between 1.5 and 1.7 billion for the year ending June 2029, supported by the strong momentum of our early revenues. Operating leverage is set to drive an improvement in EBITDA margin which is expected at this horizon above 60%. So now I'm thanking you for your attention and we are ready actually to take your questions.

18:24 Ladies and gentlemen, we are entering the questions and answers session. If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Roshan Ranjit from Deutsche Bank. Please go ahead.

18:48 Oh, evening, everyone. I actually have three questions, please. Firstly, on the video trend, Jean-François, you mentioned the carry-forward. Can I just check, is there any further carry-forwards through the year, or is that all hitting in Q1? And perhaps just tied to that, can you give us a sense of what percentage of your EBITDA comes from the video segment? Secondly, there remains a lot of volatility between the terminals and stakeholders. Service revenue split. When do we expect that to normalize? And we've clearly seen a bit more activity in Ukraine and you mentioned within your government vertical. Now, if I think you'd previously mentioned the bottlenecks in getting the terminals to the field, whether that's from a funding perspective or from actually manufacturing, has that smoothed out?

19:47 Has that improved? Or do you expect to have to invest or see some change for that to speed up? And lastly, just very quickly, on the guidance, can I confirm that the margin outlook calculation Thank you.

20:11 Thank you, Rochane. I will answer some of your questions and I will let Sébastien and Hugo, which are on the call, complete the answers. On the video trend, as we said, I mean, this is linked to, yes, a lot of carry forward, I mean, negative carry forward that is leading to this quarter decline. obviously there will be less and less carry forward and as we were saying we expect these revenues to go back to let's say and some kind of market trends in the short mid-term. On your questions on the terminal and service revenue splits on LEO, this is actually something we are not communicating. Nonetheless, what I can tell you is that, especially this quarter, our service revenues are taking the share of the lion.

21:06 This was quite a lower quarter. In terms of terminal sales, I mean, nothing to worry about. It's not linked to any bottleneck. We at this moment do not have any bottleneck in our supply chain of terminals. We are having, obviously, as you can imagine, some stock. Thank you very much. Last week, I mean, 10 days ago, are actually keen on accelerating our terminal sales, which is always very good because the more devices and terminals we have out there, we are selling the more in the longer term.

22:12 I mean, there is obviously a usage of our constellation and this is going to drive even faster the growth of service revenues. As of for your questions on the margin outlook coming from video and coming from actually geo, from video obviously as you can see there, there is really a big shift in terms of revenue splits in the company. I mean, video is now representing only 40% of the total revenues of the company. Video revenues are delivering a substantial EBITDA margin. Now, what we can say now is that we are going to reach this year with one web, they say EBITDA breakeven, and one web that in the past used to be actually consuming EBITDA is going to also start delivering on EBITDA.

23:21 That's going to grow with the further growth of the company. I don't know if Sébastien and Hugo want to complete...

23:29 Just maybe completing on your small technical question, yes, you can consider the other revenue as the base for the margin calculation. What we point out is let's not take the iris square construction revenue in the modeling of the margin. It will come with a way lower margin than the group, so let's not distort it. and we'll be, I mean, in the Q2 release when we start having sizable revenue coming from Iris Square, we will be more vocal on the way we can help you modeling that.

24:15 That's great. Thanks, guys. The next question comes from Stéphane Béagin from AutoBHF. Please go ahead.

24:28 Yes, thank you. Good evening. Actually, my first question was exactly a follow-up on that. If you could explain to us a little bit better the 8.9 billion. I'm surprised that you've included that in your backlog. I guess you do that as a sort of project manager. So I was just wondering how much of that will you be, therefore, accounting into your revenues, into your costs, and what is the share between the different parts of the consortium. It would be helpful to have more information about that. My second question is regarding, again, G2G, because operators have formed an alliance on that.

25:17 And, I mean, clearly they are calling for European solutions. Obviously, Jean-François, looking at your past experience, that could be tempting. So I was just... Yeah, asking if you have any further thinking on the D2D segment and if you just could play a role there. And finally, a third question. I was wondering how much of your revenue growth is actually coming or how much of your revenue today are coming from competitors who are taking capacity on your constellation and whether this is accelerating or not. Thank you.

25:59 Thank you very much, Stéphane. I will take the two last questions and I will let Sébastien explain you the reason why we took 8.9 billion in our backlog on the Harris Square construction. And he will, I think, thank you for that question because I think it's good to clarify what our expectations in terms of also margins and revenues on Harris Square construction are. Let me start by your question, which is obviously a very pertinent one, looking at what's happening currently on direct-to-device. As you know, direct-to-device is the possibility that low orbit constellations will offer in the future for mobile devices, smartphones, the ones we are carrying today, to not only communicate via mobile terrestrial network, but also with LEO Satellite Constellations.

26:55 So the European Union will actually reallocate a European spectrum called 2D Gears MSSS band post-2027. So that's planned to happen next year for actually new players, European players and international players. The EU clearly has the willingness to have a sovereign EU direct device solutions as well one for government use case. In this respect, obviously, it is making sense for Utelsat to analyze this opportunity. We clearly have A position as an experienced constellation operator.

27:44 There are only two operational low orbit constellations in the world as we speak. We are one of them running such a constellation and this is obviously a deep tech system. We are as well a key player in Harry Square, so we see for ourselves a potential role to play in this, I would say, new business that is going to offer opportunities for a number of players. We see it as obviously very complementary to the telecom operators, as you were saying, Stéphane, I've spent More than 30 years of my career in classical operators and telecom operators. So we clearly do not believe that this will be replacing in any way the mobile classical networks, but it can be a very nice complement.

28:36 So at this moment, at Utelsat, to come back on us, we are at the, let's say, in a reviewing stage. We have no firm engagement at this point, but definitely something we are looking at in the sense of the role that we could play in this, again, new market that will open up where we see that there will be the need for, here again, a European player and European sovereign player in this field. That's on your first question. I'll quickly answer your third question on the revenue growth on LEO, on, let's say, what is the role that our competitors are playing there.

29:22 Clearly, we have, and this is public, historically quite large, what we call take or pay, so an engagement on capacity, that was signed with Intelsat with the acquisition of Intelsat by SES. I mean, this tech corp has obviously definitely migrated into SES, which is basically reselling our Leo capacity with quite some success. and mostly, I would say, but not only, but mostly on the aviation sector, on the mobility sector, where as well they have been arrested from the strength of Intelsat in that specific area. So, and for the rest, we have other such tech corpés, but there are more, let's say, not of the same...

30:18 Thank you very much. And now I will maybe pass the floor to Sébastien to explain to you, let's say, the financial construction on this starting phase of construction of IRI Square that will last between now and 2032.

30:53 Yes, coming back to this backlog, so the 8.9 billion really represents the contract that we have with the EU and that's our portion of the total IREA Square contract which is under our responsibility. So we have included in the backlog because it will progressively flow through our revenue Starting relatively slowly with all the engineering and design of the LEO-H part of the constellation and then gradually ramping up with the manufacturing and the launch services. But it is really a full package of activity that is managed by Utelsat on behalf of the consortium.

31:48 As you know, we have large subcontractors, so we do not do everything ourselves. We subcontract a large portion of this amount under our supervision to Airbus, to Thales and to Aerospace Lab. But all of this contract will flow through our accounts progressively. That's why we wanted to highlight that in the backlog so that you're not actually surprised whenever we start recognizing revenue down the road. With this subcontracting scheme and with the fact that we are at the very beginning of the project, obviously, we'll be prudent in terms of margin recognition.

32:35 So that's why I think it's safe for all of you to model the margin on our service historical activities and not put any so far on the revenue stemming from this construction contract.

32:57 Thank you. Just to follow up. So in the end, you're expecting out of the 8.9 billion, Potengi Nibitlié at the level of your existing service margin? Is that what you're suggesting?

33:15 No, no, no. I'm suggesting the opposite. When really during construction, we have a dedicated margin, which will be very, very limited and small. It's after we are constructed. Thank you very much. Thank you very much. Thank you very much.

34:41 Eventually we'll be to utelsat at the end of the plan.

34:46 We will build that down the road. You know, it's a very unique contract for us. So we will build the margin expectation as the contract progresses. So far, the real reason why we enter into that is to make sure that we contribute to a great constellation that we will use down the road. with our model of subcontracting not aiming at having a large margin. So we'll keep that as a very low level for the time being and we'll build that together in the next quarter and years.

35:33 Thank you for your answers. Thanks. The next question comes from Paul Sidney from Barenburg. Please go ahead.

35:45 Good evening. Thank you very much for taking the questions. Just have two, please. Just firstly, sort of big picture, the consensus is expected around 1.2 billion of revenues this year. You're clearly guiding within two years to get to 1.5, 1.7. what what's really going to get us there if we just take a step back in terms of all the moving parts i know that's it's a very high level question but just sort of worth revisiting and just secondly if the iris grade numbers are fantastic you know thank you for giving us more detail but there's so many moving parts and i guess building on the previous question what would you expect to generate in terms of a return on the project is that the way you look at it in terms of a return on Will it be a free cash flow positive project for Utilsat? Again, just to try and put it in simplified terms because there's so many moving parts and it's hugely complex, but is that the way you look at it in terms of returns and free cash flow generation?

36:54 Thank you.

36:58 Maybe I can take these questions and again let Sébastien complete. In terms of the revenue guidance 1.5 to 1.7, the moving parts are on one side, the decline of video revenues that you see is currently quite steep. We see it basically in the middle term going back to what we call market trends. We see our LEO revenues continuing to grow. And if you look at the company one, two years ago, I mean, we had most of our revenues were GEO and LEO was still representing a few percent of the total company a few years ago.

37:47 When we closed last year results, Lio is now representing 25% of the company revenues. As I was saying, we are going to reach EBITDA break-even. So Lio is not only going to deliver revenue growth, but also is going to deliver in the future EBITDA. So those two combined, I mean, are actually explaining revenue guidance that we are We have given to the markets obviously combined with which is the most important the demand we see on the market and that we see actually growing and especially in the segments we are active with which are B2B and development segments and with our unique positioning as one of the two existing Leo constellations in the world and the only one which is obviously sovereign and European that together with our capacity to combine it with geostationary satellites.

38:55 On your second question, which obviously is very important, which is the return on Airy Square, obviously as you can imagine, looking at the size of the project, we've been extremely cautious in the decision making so the return on investments of this project is actually the one that the company is expecting in any of its investments so clearly we are expecting this investment to return cash and to return cash flows. Just in a nutshell, let me explain the reason why, I mean, for us, it's a good opportunity as well. I mean, if you look at our total investment, Utelsat, the investment of 3.3 billion, actually, in Iris Square, Thank you very much.

40:18 elements of the constellation but mostly actually more than 2 billion to invest in our own commercial payload that we will own so we will have an asset which will be our commercial payload flying which will deliver a minimum twice more the capacity we are having today on OneWeb and which will enabling us to continue the growth that we are seeing on OneWeb because The issue we would have had, health, would have been around 2032. We would have probably had a capacity limitation. And this Irish Square project is really an opportunity for us to have what we call a one-way-next constellation with more capacity at a very important investment, because this is a very important investment, but much less than what we would have had to invest ourselves who will have built this constellation standalone.

41:15 That's very clear, thank you. Sorry, a quick follow-up. So the 1.5 to 1.7, does that include the revenue coming from the Iris Square project? No, just to be clear, this is without the Iris Square project revenues.

41:33 And just to say, to insist on what Sébastien was doing, we will report in the future a separate backlog and separate revenues for Irisquare in order to have for everyone the possibility to compare comparable revenue evolutions. So we will report separately everything which will concern the construction of Irisquare.

42:02 That's very clear. We appreciate it. Thank you. The next question comes from Prithvi Vetsa from Bank of America. Please go ahead.

42:14 Yes, thank you for taking my question. My first question is on the 10 billion revenues that you highlight for the 2032 to 2040 period. Can I ask you are suggesting this as an additional revenue rather than or like is there like a replacement revenue in that 10 billion and the other one is on the number of satellites so you have mentioned 1300 satellites by 2034 if I don't if I'm not mistaken how are you or like what sort of satellites are you retiring by that time thank you

43:01 Thank you for your questions. So the last one is very straightforward. Yes, we have today 650 flying satellites. If you add up the 670, we have others now, out of which a number are already, I would say, constructed by Airbus and the factory of Airbus in Toulouse is going to continue producing satellites in 2017, 2018 and 2019. So in total, we are planning to have 1,300 satellites flying. Now, how many will be fully operational in 2030 is difficult to say because obviously these satellites have a given lifetime of seven years.

43:56 We see some of them will be able to have a longer lifetime, some of them might have a Thank you very much. Now, on your first question, the 10 billion revenues, I don't know what exactly you mean by replacement revenues, but the way we see it is, I mean, the way we have calculated these revenues and anticipated these expected revenues is pretty straightforward. I mean, this is obviously the continuation of the growth Thank you very much.

45:08 Constellation will be ready mid-2032. The reason is that we need the total of 264 satellites to be operational before we can actually service customers on this constellation. And starting mid-2032, we are planning to migrate customers until end of 2034 into IRI Square and end of 2034 we are planning to shut down actually the OneWeb current version or version that will be flying in 2030 and so we have planned basically that A large portion of these revenues will be moved to high-risk ware plus the growth that will be generated starting 2032 on this new constellation which as you have seen will have a number of new features and will be especially fit also to not only accommodate the commercial customers but art gov and basically governmental services because a part of this constellation is definitely dual and a part of it is designed for governmental use and military use in the future.

46:22 So just to be clear, so the 10 billion is the total revenue that you expect for the entire OneWeb capacity?

46:34 These are the revenues we expect for the entire LEO revenues for your Delsat OneWeb, yes.

46:40 Okay, thank you. The next question comes from Ben Rickett from New Street Research. Please go ahead.

46:50 Hi, guys. Thanks for the questions. I had two, please. Yes, firstly, you have a lot of CAPEX ahead of you with the iris-foiled CAPEX and the one-web renewal CAPEX. I just wondered if you could talk a bit about what sources of funding you're envisaging for those CAPEX buses, whether there's more ECA funding, for example. And a related question, when do you expect to have to go back to the markets to issue new bonds? A quick third question.

47:35 Are you able to say what the LEO backlog was at the end of the quarter? That would be really helpful. Thank you.

47:48 I will just answer your last question. We are not communicating a split backlog video geo, so we are communicating our service backlog combined. And I will let Sébastien answer to your first question on CAPEX financing and on bond insurance.

48:08 Yes, on CAPEX, I think the roadmap is pretty clear. First of all, With the capex that we have highlighted on the mid-term, so between now and fiscal year 29, we are absolutely within the envelope that we had set up during the recapitalization exercise of last year. So with a total envelope of 4 billion to be spent in FY26 and then the three following years. So for that, we have a very clear roadmap with cash in hand, with a certain number of unused ECA, as you mentioned. Obviously, cash flow from operations, we are still...

48:56 running a geo business which does generate some cash flow. So how will we complement that to bridge the full CAPEX envelope with, and that's, I would say, pretty lined up an extension of ECA. We have had, as you know, a large ECA contract of close to 1 billion. And with the continuation of the A purchasing of Airbus satellites for the Gen 1 R. We can use the setup and we are about to engage into the different parties so that we complement that.

49:44 And also as part of IRIS Square, we do not need Thank you very much. and we are approached by several institutions to support, I would say, the back end of this investment plan with mid-term financing that typically support large European infrastructure projects. So we'll be more specific whenever it's set up.

50:30 But I think the token of confidence that we got from the union by starting and engaging into this project also translate and many more. Thank you very much. The next question comes from Alessandro Cuglietta from Kepler.

51:30 Please go ahead.

51:46 Thanks for taking my questions. I just have two, mostly follow-ups on the construction revenues of Iris Square. I was just wondering if you're taking cost-over-earns risk for this type of project, like a classic prime contractor would do, for example? If you have any call around that. And also, how should we think maybe about the phasing of those construction revenues? Is that something linear starting next year or any different trends?

52:25 Thank you for the question. So once more, obviously, yes, we are taking, as any prime, we will have revenues amounting to 8.9 billion over the period. We will have costs because we are subcontracting most of the work. to Airbus Thales Aerospace Lab on our side. Yes, of course, we have taken as any prime margins. Yes, of course, we have taken reserves as any prime. Nonetheless, as Sébastien has been explaining, we want to be Thank you very much.

53:28 More advanced, more powerful, with more capacity of our one-web constellation starting mid-2032 in order to be able to continue the growth story of the company in the Leo broadband business. So, this is clearly the reason why we have not factored in our long-term plan significant margins coming from this construction phase. We will just separately report the construction revenues because they are going to be, as you can see, very significant, especially in the coming years. And I will let Sébastien comment a bit more in detail on the phasing.

54:10 So we gave some frames, so close to 9 billion and mostly will be spread over five years. But we'll have mostly engineering and design phase, which is, I would say, 25% roughly of the contract. which will be at the beginning and then we'll have in the following years the 75%. So it will start to be material this year. When I say material, that will be in the hundreds of millions in revenue. This being said, it will be back-end loaded because the bulk of the contract is actually manufacturing and launch of satellites and that will come later in the process.

55:02 Thank you ladies and gentlemen thank you for your questions let me now hand over the call to the speakers to conclude this conference

55:22 Thank you very much for being with us this evening. As you have seen, the EU revenues are continuing their growth. We had 30% growth this quarter and we expect sustained growth over the remaining quarters and above 30% for the full year. We've spoken about it. I mean, we have reached this past quarter a major strategic milestone for the company with the signature of the IRI Square program, which is entering in its construction phase today. And this is a project which is a very significant one of 15.6 billion investments in total, out of which Utelsat has the responsibility to deliver the LEO part of this project that will amount to 8.9 billion euros.

56:12 Thank you. Thank you. Thank you for your participation. This concludes our conference. You may now disconnect. We wish you a pleasant evening