SES Société Anonyme Château de Betzdorf L-6815 Betzdorf RCS Luxembourg B 81267 ...

77 Pages·2017·0.55 MB·English

SES
Société Anonyme
ChâteaudeBetzdorf
L-6815Betzdorf
RCSLuxembourgB81267
Consolidatedfinancialstatementsasatandfortheyearended
31December2017and
Independentauditor’sreport
Contents
Auditor’sreport...............................................................................................................................................................................3
Consolidatedincomestatement...................................................................................................................................................10
Consolidatedstatementofcomprehensiveincome......................................................................................................................11
Consolidatedstatementoffinancialposition................................................................................................................................12
Consolidatedstatementofcashflows..........................................................................................................................................13
Consolidatedstatementofchangesinshareholders’equity.........................................................................................................14
Notestotheconsolidatedfinancialstatements............................................................................................................................16
Note1-Corporateinformation................................................................................................................................................16
Note2-Summaryofsignificantaccountingpolicies................................................................................................................16
Note3-Businesscombinations..............................................................................................................................................34
Note4-Segmentinformation..................................................................................................................................................37
Note5-Operatingexpenses...................................................................................................................................................39
Note6-Auditandnon-auditfees............................................................................................................................................40
Note7-Financeincomeandcosts.........................................................................................................................................40
Note8-Incometaxes..............................................................................................................................................................41
Note9-Deferredincometax...................................................................................................................................................43
Note10-Componentsofothercomprehensiveincome..........................................................................................................44
Note11-Earningspershare...................................................................................................................................................44
Note12-Dividendspaidandproposed...................................................................................................................................45
Note13-Property,plantandequipment.................................................................................................................................46
Note14-Assetsinthecourseofconstruction........................................................................................................................47
Note15-Intangibleassets......................................................................................................................................................48
Note16-Tradeandotherreceivables....................................................................................................................................51
Note17-Financialinstruments...............................................................................................................................................52
Note18-Financialriskmanagementobjectivesandpolicies.................................................................................................55
Note19-Cashandcashequivalents......................................................................................................................................59
Note20-Shareholders’equity................................................................................................................................................60
Note21-Non-controllinginterest............................................................................................................................................62
Note22-Share-basedcompensationplans............................................................................................................................63
Note23-Interest-bearingborrowings.....................................................................................................................................67
Note24-Provisions................................................................................................................................................................69
Note25-Deferredincome......................................................................................................................................................70
Note26-Tradeandotherpayables........................................................................................................................................70
Note27-Otherlong-termliabilities.........................................................................................................................................70
Note28-Fixedassetssuppliers..............................................................................................................................................71
Note29-Commitmentsandcontingencies.............................................................................................................................71
Note30-Operatingleases......................................................................................................................................................72
Note31-Cashflowinformation..............................................................................................................................................72
Note32-Relatedparties.........................................................................................................................................................73
Note33-Post-BalanceSheetevents......................................................................................................................................73
Note34-Consolidatedsubsidiaries,associates.....................................................................................................................74
2 | Pa ge
Audit Report
TotheShareholdersof
SESS.A.
Report ontheauditoftheconsolidatedfinancial statements
Ouropinion
In our opinion, the accompanying consolidated financial statements give a true and fair view of the
consolidatedfinancialpositionofSESS.A.(the“Company”)anditssubsidiaries(togetherthe“Group”)
as at 31December2017,and of its consolidated financial performanceand its consolidated cashflows
fortheyearthenendedinaccordancewithInternationalFinancialReportingStandardsasadoptedby
theEuropeanUnion(IFRSs).
OuropinionisconsistentwithouradditionalreporttotheAudit&RiskCommittee.
Whatwehaveaudited
TheGroup’sconsolidatedfinancialstatementscomprise:
 theconsolidatedstatementoffinancialpositionasat31December2017;
 theconsolidatedincomestatementfortheyearthenended;
 theconsolidatedstatementofcomprehensiveincomefortheyearthenended;
 theconsolidatedstatementofcashflowsfortheyearthenended;
 theconsolidatedstatementofchangesinequityfortheyearthenended;and
 the notes to the consolidated financial statements, which include a summary of significant
accountingpolicies.
Basisforopinion
We conducted our audit in accordance with the EURegulationNo537/2014 (the “Regulation”), the
Lawof23July2016ontheauditprofession(the“Law”)andwithInternationalStandardsonAuditing
(ISAs)asadoptedforLuxembourgbythe“CommissiondeSurveillanceduSecteurFinancier”(CSSF).
Our responsibilities under those Regulation, Law and ISAs are further described in the
“Responsibilities of the “Réviseurd’entreprisesagréé” for the audit of the consolidated financial
statements”sectionofourreport.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisfor
ouropinion.
PricewaterhouseCoopers,Sociétécoopérative,2rueGerhardMercator,B.P.1443,L-1014Luxembourg
T:[phone],F:[phone],www.pwc.lu
Cabinetderévisionagréé.Expert-comptable(autorisationgouvernementalen°10028256)
R.C.S.LuxembourgB65477-TVALU25482518
We are independent of the Group in accordance with the International Ethics Standards Board for
Accountants’ Codeof Ethics forProfessional Accountants(IESBA Code)as adopted forLuxembourg by
the CSSF together with the ethical requirements that are relevant to our audit of the consolidated
financial statements. We have fulfilled our other ethical responsibilities under those ethical
requirements.
Tothebestofourknowledgeand belief,wedeclarethatwehavenot providednon-auditservicesthat
areprohibitedunderArticle5(1)oftheRegulation.
The non-audit services that we have provided to the Group, in the period from 1January2017 to
31December2017,aredisclosedinthenote6totheconsolidatedfinancialstatements.
Keyauditmatters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period, and include the most
significant assessed risks of material misstatement (whetherornot dueto fraud).Thesematters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
formingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.
Keyauditmatter HowourauditaddressedtheKeyauditmatter
Revenuerecognition
The application of revenue We obtained an understanding of the main revenue streams,
recognition accounting standards is including identification of potential new revenue streams
complex and involves a number of following the acquisition of the new businesses and evaluated
key judgements and estimates in theaccountingpolicyforrevenuerecognitionthereof;
the determination of the
appropriate accounting treatment We tested the design and implementation of relevant internal
(lease vs. service arrangements, controls;
operating lease vs. finance lease
where SES is the lessor, barter We held upfront discussions with Management on IFRS
transactions, principle versus agent accounting analysis of any non-standard revenue contracts,
considerations, service agreements performed testing of significant new revenue contracts and
vs.constructioncontracts,etc.). verified that the underlying revenue transactions were
accounted in accordance with the substance of the commercial
We focused on this area due to the agreementandtherelevantIFRSstandards;
inherent complexity and judgement
in applying the revenue recognition We performed substantive analytical procedures at year-end on
accounting standards and due to revenueand revenuerelated accountinginorderto identify any
thesignificant focus onthe revenue unusualvariances;
amount (2,035.0millionEUR) of
the users of the consolidated Wetestedcertainunusualand/orsignificantmanualjournalentries
financial statements (see note 2 for madetotherevenueaccounts,bothatlocalandgrouplevel;
revenue recognition accounting
policy). We evaluated the deferred revenue schedules and their
reconciliationwiththeaccounting;
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Keyauditmatter HowourauditaddressedtheKeyauditmatter
We performed substantive testing of a sample of revenue
transactions;
We considered the disclosures in the consolidated financial
statementsandassessedtheirappropriateness.
Impairment of goodwill and
orbitalrights
The Group has goodwill of We tested the design and implementation of relevant internal
2,243.9millionEUR and orbital controls;
rights with indefinite useful lives of
1,972.1millionEUR (see note 15). We evaluated Management’s determination of the cash
Management performed the annual generating units as well as the impairment test method and
impairmenttestthatisbasedonthe model used for the determination of the value in use in
valueinusecalculation. accordancewiththerequirementsofIAS36;
We focused on this area due to the We agreed the forecasted cash flows used for the calculation of
high level of judgement in relation the value in use to the 2018 Business Plan as approved by the
with the assumptions used in the Board of Directors. We considered our expectations in terms of
calculation of the recoverable significant developments during the forecast period (capital
amount (forecasted cash flows, expenditureprograms,replacementofsatellites,significantnew
growthrate,discountrate,etc.). contracts, market evolution) and evaluated whether these were
appropriatelyreflectedinthecashflowsforecasts;
We involved valuation specialists and independently
recalculated the weighted average cost of capital based on the
use of market data and verified the long-term growth rate to
marketdata;
We performed sensitivity analysis of the models to changes in
thekeyassumptions;
We considered the appropriateness of the disclosures in
note 15 to the consolidated financial statements and assessed
theirappropriateness.
Impairmentofsatellites
The Group has space segment assets We tested the design and implementation of relevant internal
balance, representing primarily controls;
satellites, of 4,206.3millionEUR (see
note13).
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Keyauditmatter HowourauditaddressedtheKeyauditmatter
Thevaluationofthesatellitesmight We met with Management and in particular, their engineering
be impacted by events that may or team to discuss any satellite health issues and evaluate the
may not be under Management’s estimationoftheirimpactonthesatellitescapabilitytogenerate
control (e.g., solar array issues) or futurecashinflows,andimplicitlyontherecoverableamountof
by decrease in revenue due to thesatellites;
unfavorablemarketdevelopments.
We evaluated the impairment test performed by Management,
Moreover,thereisariskofimpairment involving specialists as appropriate, and tested the significant
of thesatellites due to obsolescence business and valuation assumptions which impact the
in the context of rapid evolution of impairment test and focused on the estimated future revenue
technology (mainly in relation with and costs assumptions based on the existing backlog of signed
the Medium Earth Orbit (MEO) contractsandoccasionalusefuturerevenueassumptions;
satellites).
We performed sensitivity analysis of the models to changes in
thekeyassumptions;
We considered the disclosures in note 13 to the consolidated
financialstatementsandassessedtheirappropriateness.
Taxation
The Group operates across a large We tested the design and implementation of controls in respect
number of jurisdictions and is of tax accounting,includingthedeterminationof the provisions
subject to various tax legislations fortaxrisks;
and periodic reviews by local tax
authoritiesofarangeoftaxmatters WeusedtaxspecialistsinLuxembourg,theNetherlandsandthe
during the normal course of USA, representing the main tax jurisdictions where the Group
business,includingtransferpricing. has exposure, to gain an understanding of the current tax risks
at the level of the main jurisdictions and evaluate the current
Moreover, the current tax structure anddeferredtaxincomeandexpenseandrelatedbalances;
oftheGroupevolvestoconsiderthe
recent developments in We held discussions with the Group Tax Management to
internationaltaxation. understand and evaluate positions taken on uncertain tax risks
andassessGrouptaxprovision;
We focused on two specific tax
matters relating to the provisions WediscussedwithManagementthestatusoftheopentaxaudits
for tax risks, and the recognition and evaluated their impact on the consolidated financial
and recoverability of the deferred statements;
tax assets, due to the high level of
judgment in the determination of We analysed the recognition and recoverability of the deferred
thecurrentanddeferredincometax taxassetsanddeterminedthatitissupported byforecastfuture
balances and the determination of taxprofits;
the level of the tax provisions (see
notes8and9). We considered the disclosures in notes 8 and 9 to the
consolidated financial statements and assessed their
appropriateness.
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Otherinformation
The Board of Directors is responsible for the other information. The other information comprises the
information stated in the consolidated Management report and the Corporate Governance Statement
butdoesnotincludetheconsolidatedfinancialstatementsandourauditreportthereon.
Ouropinionontheconsolidatedfinancial statements doesnotcovertheotherinformationandwedo
notexpressanyformofassuranceconclusionthereon.
Inconnectionwithourauditoftheconsolidatedfinancialstatements,ourresponsibilityistoreadthe
other information identified above and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
concludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthat
fact.Wehavenothingtoreportinthisregard.
Responsibilities of the Board of Directors and those charged with governance for the consolidated
financialstatements
The Board of Directors is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRSs as adopted by the European Union, and for such
internal control as the Board of Directors determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
Inpreparingtheconsolidated financial statements,theBoard of Directorsis responsibleforassessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Board of Directors either intends
toliquidatetheGrouportoceaseoperations,orhasnorealisticalternativebuttodoso.
ThosechargedwithgovernanceareresponsibleforoverseeingtheGroup’sfinancialreportingprocess.
Responsibilities of the “Réviseur d’entreprises agréé” for the audit of the consolidated financial
statements
The objectives of our audit are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an audit report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guaranteethat anaudit conducted inaccordancewiththe Regulation,theLaw
and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement
whenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
takenonthebasisoftheseconsolidatedfinancialstatements.
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As part of an audit in accordance with the Regulation, the Law and with ISAs as adopted for
Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism
throughouttheaudit.Wealso:
 identify and assess the risks of material misstatement of the consolidated financial statements,
whetherdueto fraud orerror,designand performaudit procedures responsiveto thoserisks,and
obtainaudit evidencethat issufficientandappropriatetoprovidea basis forouropinion.Therisk
ofnotdetectingamaterial misstatementresultingfromfraudishigherthanforoneresultingfrom
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
overrideofinternalcontrol;
 obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinionontheeffectivenessoftheGroup’sinternalcontrol;
 evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimatesandrelateddisclosuresmadebytheBoardofDirectors;
 conclude on the appropriateness of the Board of Directors’ use of the going concern basis of
accountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelated
toeventsorconditionsthatmaycastsignificantdoubtontheGroup’sabilitytocontinueasagoing
concern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninour
audit report to the related disclosures in the consolidated financial statements or, if such
disclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidence
obtained up to the date of our audit report. However, future events or conditions may cause the
Grouptoceasetocontinueasagoingconcern;
 evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlyingtransactionsandeventsinamannerthatachievesfairpresentation;
 obtainsufficient appropriateaudit evidenceregarding thefinancial informationof theentities and
businessactivitieswithintheGrouptoexpressanopinionontheconsolidatedfinancialstatements.
We are responsible for the direction, supervision and performance of the Group audit. We remain
solelyresponsibleforourauditopinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internalcontrolthatweidentifyduringouraudit.
Wealsoprovidethosechargedwithgovernancewitha statementthatwehavecompliedwithrelevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
relatedsafeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our audit report unless
laworregulationprecludespublicdisclosureaboutthematter.
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Report onotherlegalandregulatoryrequirements
TheconsolidatedManagementreportisconsistentwiththeconsolidatedfinancialstatementsandhas
beenpreparedinaccordancewithapplicablelegalrequirements.
TheCorporateGovernanceStatementisincludedintheconsolidatedManagementreport.Theinformation
required by Article68ter Paragraph(1) Lettersc) and d) of the Law of 19December2002 on the
commercialandcompaniesregisterandontheaccountingrecordsandannualaccountsofundertakings,as
amended, which is included in the Corporate Governance Statement, is consistent with the consolidated
financialstatementsandhasbeenpreparedinaccordancewithapplicablelegalrequirements.
Wehavebeenappointedas“Réviseurd’EntreprisesAgréé”bytheGeneralMeetingoftheShareholders
on 6 April 2017 and the duration of our uninterrupted engagement, including previous renewals and
reappointments,is5years.
Othermatter
The Corporate Governance Statement includes, the information required by Article68ter
Paragraph(1) Letters a), b), e), f) and g) of the Law of 19December2002 on the commercial and
companiesregisterandontheaccountingrecordsandannualaccountsofundertakings,asamended.
PricewaterhouseCoopers,Sociétécoopérative Luxembourg,22February2018
Representedby
GillesVanderweyen
9