SES SA SWOT & PESTLE Analysis

Strength

1. Acquisition of DRS Global Enterprise Solutions: The company’s government portfolio saw a momentous boost with the acquisition of DRS Global Enterprise Solutions for nearly $450 million. This targeted business was a perfect fit, providing networks and solutions to the US Government and aligning well with the ongoing infrastructure project, O3b mPOWER. The DRS GES team's strong reputation in delivering top-notch solutions for demanding US government customers, even in challenging locations, added further value. The acquisition was swiftly completed, merging DRS GES with the company's existing US Government business, forming SES Space & Defense, a leading end-to-end system integrator and solutions provider. This acquisition had a two-fold impact on the company. Firstly, it doubled their revenue in the crucial US government segment, which was of utmost importance given the increasing strategic significance of space and satellite technology for governments. Secondly, the integration is expected to generate approximately $25 million in annualized synergies.

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Weakness

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Opportunity

1. Landmark partnership in India with Reliance Jio: In February 2022, Jio Platforms Limited (JPL), India's leading digital service provider, and SES announced the establishment of a joint venture called Jio Space Technology Limited. The primary objective of this collaboration is to introduce the next generation of scalable and affordable broadband services in India, utilizing advanced satellite technology. In the joint venture, JPL and SES will hold 51% and 49% equity stake, respectively. The partnership aims to deploy multi-orbit space networks, comprising a combination of geostationary (GEO) and medium earth orbit (MEO) satellite constellations. This innovative approach will enable the delivery of high-capacity, multi-gigabit links to enterprises, mobile backhaul, and retail customers across India and its neighboring regions. The joint venture acts as a vehicle for providing SES’s satellite data and connectivity services in India.

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Threat

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Political

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Economic

1. Fluctuations in foreign exchange rates impact SES’s revenue: SES operates in various international markets. It generates revenues and incurs costs in different currencies. Fluctuations in exchange rates can impact the value of revenues earned and expenses incurred in foreign currencies when converted to the reporting currency (Euro). This can affect the company's profitability and financial performance. To safeguard against the currency exchange rate risks, SES adopts a risk management strategy by utilizing forward foreign exchange or similar derivative contracts. These financial instruments are used to hedge the underlying foreign exchange exposures. By entering into these contracts, SES locks in exchange rates for future transactions, thereby reducing uncertainty and minimizing the adverse effects of exchange rate movements on its financial performance.

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Social

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Technological

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Legal

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Environmental

1. Partnership with NorthStar and Space to manage space sustainability challenges: In a joint effort to enhance Space Situational Awareness (SSA) and promote responsible space usage, SES and NorthStar Earth and Space (NorthStar), the pioneer commercial service for space monitoring, have established a strategic partnership. The collaboration aims to launch, develop, and advance NorthStar's SSA products specifically tailored to benefit SES's satellite operations and fleet management. Through this partnership, NorthStar will deliver innovative SSA services, enabling satellite operators to safely manage their fleets, mitigate collision risks, and devise sustainable space solutions. Leveraging data collected from space, NorthStar's state-of-the-art service will furnish valuable insights to optimize operational performance for all satellite operators, contributing to a more sustainable space environment. Overall, this collaboration between SES and NorthStar seeks to elevate Space Situational Awareness, foster responsible practices in space, and foster a more secure and sustainable space ecosystem for the future.

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