
Eutelsat Communications S.A. / Earnings Calls / May 15, 2025
Welcome to the Eutelsat Third Quarter and Nine Months 2024 and 2025 Revenues Call. My name is Alan and I'll be your coordinator for today's event. Please note this call is being recorded and for the duration your lines will be on listen only. However, you will have the opportunity to ask questions at the end. [Operator Instructions] I'll now hand you over to your host Christophe Caudrelier to begin today's conference. Thank you.
Christophe CaudrelierHello everyone. Welcome and thank you for joining us today for Eutelsat third quarter ’24-‘25 revenues presentation. I'm Christophe Caudrelier, group CFO and I'm joined today by Joanna Darlington, Chief Communication and Investor Relations Officer. On today's agenda, we will cover recent highlights, Q3 performance and outlook and financial objectives. Let's start with the highlights. Third quarter revenues of the four operating verticals, i.e. excluding other revenues, stood at EUR300.6 million. They were down 2.2% on a like-for-like basis. Revenues of the four operating verticals for the first nine months were up 1.8% on a like-for-like basis. Connectivity applications continue to see double-digit growth on the back of LEO enabled solutions. With all this, we confirm all our full year ’24-‘25 financial objectives. Let's turn specifically to the Q3 performance. First, as a reminder, all commentary is on a like-for-like basis, i.e. at constant currency and perimeter. Total revenues for the third quarter stood at EUR300 million, down 1.9% on a like-for-like basis. They reflected, first, a EUR7 million positive currency effect, and second, a EUR1 million euro negative swing in other revenues, mainly from hedging. Excluding other revenues, revenues of the four operating verticals were down 2.2% on a like-for-like basis. Let's look at revenues in more detail. Video, representing 50% of revenues, stood at EUR152 million, a decline of 6.4%. Fixed Connectivity revenues, representing 20% of the group total, rose 1% to EUR60 million. Government Services, 17% of revenues, stood at EUR50 million, a rise of 10.2%. Mobile Connectivity revenues, representing 13% of the group total, stood at EUR40 million, down 2.7%. I will come back to this. Let's start with Video. Third-quarter video revenues amounted to EUR152 million, down 6.4% year-on-year are in line with the broader market trend. On a quarter-quarter basis, revenues were down 4.8%, reflecting the linearization of revenue recognition on certain contracts in Q2. On the commercial front, Eutelsat renewed a video capacity agreement with its long-standing partner, ATSS, in the MENA region. Eutelsat also expanded its services for professional video, committing significant new resources at the flagship Hotbird constellation at 13 degrees east. Elsewhere, Eutelsat renewed its partnership with UAE-based content distribution specialist, BHS, for satellite contribution services across the Middle East and North Africa, extending capacity lease on EUTELSAT 21B and EUTELSAT 17B. Let's move and have a word on Russia. Eutelsat is implementing EU Regulation 269-2014 concerning the denial of resources to Russian entities, which since March 2025, is being applied to selected media groups by the French regulator Arcom. Following the recent removal of two channels, STS and Canal 5, belonging to JSC National Media Group, Eutelsat is in the process of removing further channels controlled by this company, as well as those controlled by BJTRK from Eutelsat capacity. At this stage, the impact on the group's revenue of the removal of these channels is being estimated at around EUR16 million on an annualized basis, and a similar amount at the EBITDA level, prior to any mitigation measures. Due to the timing, this action has a very limited impact on Eutelsat’s objectives for fiscal year 2024-2025. As a reminder, Eutelsat’s financial objectives exclude the impact of sanctions imposed on Russian customers by external authorities. Moving to connectivity, third-quarter fixed connectivity revenues stood at EUR59.7 million, up 0.8% year-on-year. They mainly reflected, on the one hand, the continued growth of LEO-enabled connectivity solutions, and on the other, the more challenging conditions for GEO-enabled consumer broadband in Europe, and notably the cessation of revenue recognition from a specific customer on the KONNECT VHTS satellites. Quarter-on-quarter, revenues were down 7.3%, reflecting a one-off impact from catch-up revenues from a LEO customer in Q2, as well as the above-mentioned cessation of revenue recognition from a GEO customer. On the commercial front, the transfer of Eutelsat KONNECT capacity to the African market has been completed. Take-up of the additional capacity has been dynamic, notably with a multi-year partnership with Orange for connectivity in Africa and the Middle East. Elsewhere, Eutelsat and InterSAT inked a new multi-year agreement for KU capacity on EUTELSAT 7C for the delivery of fixed-data services over Central and Eastern Africa, and renewed their existing capacity contracts on EUTELSAT 7TB. The two companies are in discussions aimed at adding LEO capacity for East Africa. Third-quarter government services revenues stood at EUR49.5 million, up 10.2% year-on-year. This mainly reflected the growth of LEO-enabled solutions revenues, as well as increased demand from non-U.S. governments. Quarter-on-quarters, revenues were down 4.2%, notably due to slow down in GEO activity. The spring 2025 renewal campaign with U.S. Department of Defense resulted in an estimated renewal rate of less than 50%, below the high rate of previous quarters. It reflects the change in the new Presidential administration geographic prioritization for the Defense Department, with the additional context of efforts to cut government spending overall. In particular, it embarks a non-renewal of a single sizable contract. Excluding this one-off, the renewal rate would have been close to 70%. Third-quarter Mobile Connectivity revenues stood at EUR39.7 million, down 2.7% year-on-year, reflecting lower GEO revenues, partly offset by growing demand for LEO-based solutions. Quarter-on-quarter, revenues were up 14.3%, underpinned by ramp-up on LEO. On the commercial front, Eutelsat confirmed the traction of LEO-enabled services for commercial and business aviation, with over 135 NT9 installations already completed, out of a backlog close to 1,000 aircrafts. And the first aircraft is now in service. In addition to its GEO offering, Eutelsat is delivering multi-orbit connectivity through key partners such as InterSAT, Hughes, Panasonic, and Gogo. Air Canada became the first airline to deploy the multi-orbit GEO-LEO service through InterSAT. Apparently, Eutelsat signed a multi-year, multi-million-dollar extension of its capacity agreement with Panasonic on EUTELSAT-10B. And the deployment of KONNECT VHTS capacity for mobility markets is also progressing well, notably with a new multi-year, multi-million-dollar agreement with Turksat for KA-Band services. Both showcase the ongoing pertinence of a state-of-the-art GEO capacity to deliver high-quality, cost-effective in-flight connectivity services. Moving now to the backlog. The backlog at the end of March stood at EUR3.6 billion versus EUR3.9 billion a year ago, and EUR3.7 billion at the end of December 2024, reflecting its natural erosion, especially in the Video segment, in the absence of major renewals. It was equivalent to 3 times fiscal year 2024 revenues, with connectivity representing 57% of total. Let's now turn to the outlook. On the back of the performance of the first nine months, we confirmed our objectives for the full year ‘24-‘25 of operating vertical revenues around the same level as fiscal year 2024, an adjusted EBITDA margin slightly below the level of fiscal year 2024. Elsewhere, gross capital expenditure in fiscal year ‘24-‘25 remains expected in a range between EUR500 million and EUR600 million. Eutelsat also continues to leverage around 3 times in the medium term and continues to work actively on the financing plan in line with its strategic roadmap and its leverage objectives. With that, I would like to thank you for your attention, and together with Joanna, we are now ready to take your questions and to answer your questions.
OperatorThank you. [Operator Instructions] We will take our first question from Roshan Ranjit, Deutsche Bank. Your line is open. Please go ahead.
Roshan RanjitGood evening, everyone. Thanks for the questions. I've got three, please. On the government renewal rate, where you say less than 50%, is there a scope for further resizing? You mentioned this single sizeable contract. Are there other types of contracts of that nature within your base? Just to confirm that U.S. government revenues is around 60%, 65% of overall government revenues of the group, please. Secondly, within Video, you're flagging the EUR16 million annualized impact from Russia. Again, is that assuming all Russian channels are removed from your base, or is there scope for that number to potentially be higher if you have to switch off further channels? Lastly, last quarter, you mentioned you were working on a financing plan. I don't see an update in the release today. I assume that is still something which you're working on. Anything you could say on that front and any progress would be very helpful. Thank you.
Christophe CaudrelierOkay. Thanks, Roshan, for your question. Starting with the first one on the renewal rate on the government. I guess your question was related to the percentage that the U.S. government was representing in the total. The proportion of the U.S. government is decreasing. It's roughly between 50% to 60%. The reason why it's decreasing is also because with the development of the LEO activity, we also have a lot of appetite from other governments. We see a significant increase of our business with governments other than the U.S. government. On the U.S. government side, we don't see any dramatic change of the business. Again, for this quarter or for the spring session, it's really related to one specific contract with the U.S. government. With the change in the U.S. President's strategy and the cost-cutting plan, we see some changes but no major impact on our business.
Joanna DarlingtonSorry, just to add one thing. In terms of timing, those renegotiations took place just at the time or just after the start of the new U.S. administration. As you know, right at the beginning of the administration, there was a lot of pressure on departments to cut costs. We think that the unusually low renewal rate was, if you like partly a knee-jerk reaction to that impetus. I think your other question, and it's why we singled this out, is that there's one contract that wasn't renewed that represents around half of the delta between the type of renewal rate would normally see and the renewal rate that we just reported. To answer your question, Roshan, no, it's unusual. Generally, the renewals tend to be made up of smaller contracts. It's unusual to have one that's that chunky and has that big an impact.
Christophe CaudrelierOn your second question related to Russia. The channels that we will be removing from our satellites are not all the channels or the business with Russia. It's a few tens of channels that we are removing. They are really related to two specific groups that are in the list of our coms. It takes us also some time to identify all the channels that are belonging to those two groups, to those two media groups. That's the reason why it takes a bit of time, too. Because we need to really identify those channels that are really belonging to those two companies.
Joanna DarlingtonJust to add, in case it's not clear. Up till now, the sanctions that we've complied with have been on specific channels. Those have been identified by Rcom. The reason behind taking them down is because of the content, the nature of the content of those channels. I would say that Rcom has now since March, so in the past couple of weeks, it's now expanded the scope of how it imposes sanctions. It's expanded it to cover not just specific channels because of the content, but actually companies, content producers, who are part of a list of companies in Russia where the French government has decided to freeze or deprive them of assets, if you like. It's more complicated because instead of Rcom just sending us a list and saying, right, you need to bring down this, this, and this, what they're saying is you have to stop broadcasting the content which is provided to our customers, which are still [Indiscernible], which are provided by these companies. So we have to identify those ourselves and that's what's taking longer. But we expect it to be completed by, I would say, the end of June.
Christophe CaudrelierOn the financing plan. So coming back, as we mentioned in February for our H1 results, we continue to work actively on a financing plan in order to take into consideration and to cover our strategic roadmap as well as our medium term target of leverage ratio around 3 times. In this context and as we speak, we are in active discussions, I would say with potential capital providers and we are assessing various solutions. And this is what I can say at this point and as we mentioned back in February, and we will come back to the market as soon as we have a clear action plan.
Roshan RanjitThat's very helpful, guys. Thank you. If I could just follow up on the first question, the renewal rate that will impact your fiscal year ‘26 numbers, is that the right way to think about in terms of the timing and the lag effect?
Joanna DarlingtonWell, it will impact from Q4 of this year and then, yes, it will impact into for year ‘26.
Roshan RanjitGreat, thank you.
Christophe CaudrelierBut it's been embedded in the -- also in the -- for year ‘24-‘25 at this point, so it doesn't change anything in our guidance.
Joanna DarlingtonYeah, I think the other point to make is -- as Christophe said, that the proportion of the US DoD within our government services revenues is obviously -- is proportionately a lot less than it has been in recent years.
Roshan RanjitGot it. Thank you.
OperatorWe will take our next question from Stephane Beyazian, ODDO BHF. Your line is open. Please go ahead.
Stephane BeyazianThank you. Thank you very much. Well, I've got three, if that's possible. The first one is regarding the financing planning. And I fully understand that you're not in a position to say too much for sure about it. But let me try to push my luck a little bit there. I'd like to understand how much credit export can be a solution there. So I guess my question is, do you -- how much theoretically do you think you can cover of your future investment plans thanks to credit export, either at the French level or at European level? And do you feel you have a strong case to be in a position to obtain these credit exports? My second question is regarding the order book that is down. I mean, you just mentioned that you're getting a lot of interest from other governments than the U.S. government. So are you currently in discussion indeed with some governments about future contracts? And do you think that they can be quite sizeable? Anything you could say about that? And finally, it's a question I ask already and I'd be very interested to have an answer. But do you have an idea of how much of the current OneWeb order book is not yet activated and therefore contributing to the revenues? Thank you.
Christophe CaudrelierOK, thanks, Stephane. On the first question related to ECAs, I mean, we are already working very actively on ECAs. As you know, we have communicated that we had contracted with Airbus for an additional batch of 100 satellites. And clearly we are in the process to -- and we are discussing with the ECA agencies in order to be able to include those in the scheme. I need to mention that we already have some ECAs. I mean, at the OneWeb level, we already have ECA contracts and financing with the Exim Bank on one side. So how much do we think that we can -- this is really depending on the future investment and on those investments? But all in all, I would think that -- I mean, we can plan a between 50% and 70%, well, I would say 50% to 70% of the investment being part of the ECA financing plan. And yes, we believe that we have a strong case with this. It will also -- it will obviously depend on several factors. First of all, I mean, who are the providers of the industry for those future investments being on the satellite side, but also on the launchers. So clearly, this needs to be taken into consideration. But overall, for both, again, satellites and launchers, because we've already done it, we think that we have a very strong case for the ECA financing. We are just in our discussion with the different agencies. I mean, we really are in the heart of this program. Moving to the government question. I mean, we have, I would say, a lot of discussion with different governments. I mean, as you clearly know, with the current geopolitics, there are many interests from many countries. I mean, starting with the European countries, but not only. I mean, I would say many non-aligned or countries seeking for alternative solutions or non-American, non-Chinese solutions for this type of service. And clearly, there are a lot of interests. Having said that, it will take some time. I mean, we are in processes that need to go through a lot of administrations and approvals. So definitely, again, we are really confident that the market is significantly increasing for the many reasons that you know. But it will be a progressive increase and it will take a bit of time to really convert into a real business. But as we see, I mean, we already have some significant contracts. As I just mentioned before, I mean, we were a few years ago or even not so long ago, U.S. governments represented the vast majority of our government business. I mean, today, we have a significant increase of other governments into this. Joanna, you want to add something? And the last question is related to the OneWeb order book and how much of this has been activated? I mean, the question is, I would say -- I mean, obviously, this is going not to be -- it's then the monthly revenues, but I would say around between EUR170 million and EUR200 million that have been from the current order book that it translated into monthly revenues.
Stephane BeyazianThank you. That's very helpful. And just a quick follow up regarding credit export. Obviously, Iris Square is also, I guess, even if that's at the European level, that would also be eligible to credit export, I would guess, but at the European level in terms of financing.
Christophe CaudrelierWell, you mean our investment into Iris Square, right?
Stephane BeyazianYes.
Christophe CaudrelierI mean, yeah, it's a different scheme, but it would be eligible. But could be -- I mean, again, depending on the provider, it would either be I would say, regular ECA or strategic operations. But in both cases, they are very similar.
Stephane BeyazianThat's all very clear. Thank you very much.
Christophe CaudrelierWe will take our next question from Ben Rickett, New Street Research. Your line is open. Please go ahead.
Ben RickettYeah, hi, Christophe and Joanna for the questions I have two. The first one, just to follow up on that ECA discussion, do you think ECA financing is that sufficient do you think? Or are you also looking to raise equity capital for example? And if so, how much equity capital do you think you would need to raise? And then the second question, just around Iris Square. I think there's still quite a lot of skepticism around the commercial revenue projections for Iris Square, the EUR6.5 billion. Do you think there's any prospect of the European Union committing more of the revenues for that project so that you're less reliant on commercial revenues? Thank you.
Christophe CaudrelierOkay, so clearly, for the first question, Ben. Clearly, ECA are not going to be sufficient to cover the needs, I mean, for many reasons. First, because of the capacity, and secondly, because it won't solve as we said, I mean, our medium term target is to go back to a leverage ratio around 3 times. And clearly, ECA are accounted as debt definitely. So if it's only ECA, I mean, this would solve the issue of liquidity and the capacity of financing our investment needs. But obviously, in that case, I'm not sure that we would have a strong case with ECA because the structure of the balance sheet of the company wouldn't be sufficient. So clearly, ECA is one part of the financing plan for sure but it's not the sole part. And clearly, in our financing plan, we are clearly looking, as I mentioned, for capital investors. It's too early I think, for me to disclose any type of range or amount in what we're seeking for as a reinforcement of our balance sheet structure. But I can say that it's a significant amount. On the second question, Iris Square, maybe just to come back quickly on what is Iris Square and how it is managed. I mean, clearly, it's a multi-orbit constellation. Within this multi-orbit constellation, there is a dedicated European payload, which is not what the operators are going to sell. Next to this, I would say payload -- a specific payload for the European community. There is a commercial payload of which the new one will be for Eutelsat to commercialize and to manage. Having said that, do we have a significant prospect? First of all, we’re talking -- I remind you that Iris Square is due in 2030. So it's quite a long time away from now. For us, Iris Square would be the commercial side that will replace the current generation of our satellites. It would be the continuation of the current business and continuation growth of the current business that will be covered by Iris Square. Having said that, do we have a potential also to cover some of this capacity through European requirements? I mean, being requirements or needs from the European states, I would say certainly, yes. It's not a commitment from the different states of Europe as of today in the Iris Square project, but there are obviously, as I said before, a lot of discussions with different governments, European but also non-European governments. There is a lot of appetite for this. So we are confident to develop the government business, including with Iris Square and before Iris Square.
Ben RickettThank you. That's really helpful. Do you suppose the demand doesn't emerge for that commercial capacity? Do you think the European Union would be prepared to commit some of that revenue?
Joanna DarlingtonI think it's far too early to discuss that. As Christophe said, we have a EUR1 billion backlog on OneWeb. The LEO proportion of Iris Square will basically equate to the continuation of OneWeb, which means that in any case, when it gets launched, which is not until the early part of the next decade. In effect, it will already be de-risked by the business which is already on OneWeb. But yeah, I mean, I think it's far too early to talk about what the -- if the demand isn't what it is that the EU will commit further at this point. I mean, I would also remind you, if you look at Nova Space or if you look at any other of the agencies that forecast growth in our sector. I mean, the growth in demand for non-geostationary capacity is huge. So there's absolutely no reason for us to suppose that the demand won't be there. I mean, if people didn't think demand for LEO was there, then we wouldn't be building OneWeb, Kuiper wouldn't be building or Amazon wouldn't be building Kuiper. And you wouldn't have other low orbit constellations. So that's clearly where the demand is for the sector.
Ben RickettOkay, understood. Thank you both.
OperatorWe will take our next question from Alexander Peterc, Bernstein. Your line is open. Please go ahead.
Alexander PetercYes, good afternoon to both of you. And thank you very much for taking my question. I would have a few. So the first one is, can you, or are you willing to provide additional details or any color on the reasons behind the change in Eutelsat leadership? That will be my first one. I'm going to have a couple of follow-ups. Thank you.
Christophe CaudrelierNothing real to comment on this one, Alexander. The only thing I can say is it's clear that we are in a situation or we are now -- Eutelsat is facing a different challenge. I mean compared to, we went through the telecom pivot first. Then we had all the PMI, or the OneWeb integration, and the development of the -- start of the development of the LEO business. And we are now moving a bit in terms of our environment. And clearly, we will now need to go for a significant financing. And it's a new era that is opening. I mean, Eva has been with us for a bit about three and a half years now. And she brought a lot of things to the company. I mean, she really brought into life the telecom pivot. And she also developed the merge and the integration with OneWeb. And this is I think the only thing I can comment. I don't know if, Joanna, you want to add something?
Joanna DarlingtonNo, I don't think there's anything we can add to be honest. I mean you've seen a lot of speculation amongst yourselves, as well as the press on what might be the reason for that change. But we have no comment to make.
Alexander PetercOkay, that's helpful, nonetheless. Thank you very much. My second question is related to government vertical. I'd like to understand what will be the midterm effects of the geopolitical decoupling between the U.S. and Europe. You've mentioned that demand from the U.S. DoD is lower, and that's partly reflecting these changes. I don't know if you agree with that, but it seems that that's a little bit the case. At the same time, you have a pivot towards more business in Europe being the only non-U.S. controlled alternative for European governments. So, that's probably a tailwind. And I'd like to know how this will play out. Should we now expect more growth as a rule, as a portion of total, at least?
Joanna DarlingtonWell, I think, as we said, I mean the DoD is far lower than it used to be as you know. There was a five years ago when it was about 70%-80%, so now it's much lower. I mean I think it's difficult, as we said earlier, I mean, this specific renewal coincided just with the start of the new administration. And just with the when DOGE was at full speed, and there are a lot of people kind of looking around to cut costs. And so I mean, it's difficult to see how it will pan out. We think it might be a bit of a knee-jerk reaction, and that future campaigns may go back to a more normal rate. But at the moment, obviously, like in a lot of industries that are affected by the actions of the new US administration, it's a bit difficult to know. So not much visibility on that. I think I would say two things though. I mean the first is obviously as you know and as we've communicated before, obviously, there's a lot of interest coming from Europe. And that will take a bit of time to materialize. But we certainly, and I think other operators have said the same thing. We certainly think that interest is there. But it's not only European. I mean, we've seen a lot of interest, funnily enough, from Canada, from Canadian institutions as well for different reasons, but related to the same core. I mean we've mentioned in the past we've got quite a big contract with Taiwan because they don't want to be reliant on a U.S. operator. So, I think all of that remains. And of course the other thing, I think more broadly, which is positive, is that what's going on now, what's gone on with Ukraine, and now what's going on in the political sphere is really showing that satellite capacity in space has become a much more strategic, or I'd say a central strategic part of the toolkit when it comes to sovereignty and defense. So, I mean, yes, the specific actions of the U.S. are a bit difficult to kind of fathom in the short term. But I think generally speaking, we're still very confident about the government business.
Alexander PetercAnd just as a follow up to that, isn't it the case that there's also migration to LEO services in government? And therefore the U.S. will naturally pivot to exclusively Starlink I suppose for the -- I mean whereas Europeans will go to you. Is that what’s going to happen. I mean, how quick is the migration to LEO for government services?
Joanna DarlingtonWell, I mean like everything, I mean, there's definitely -- there's a migration to LEO. We've -- I mean, I don't think that's specific to government. I think even with the U.S. companies, it's not certain that anybody wants to be dependent on a monopoly. So I think that holds. I mean, all of these people particularly in government, where you need a high level of security, in some cases, guaranteed minimum service levels, then it's quite possible that they will use several providers for backup. So, yeah, I mean I don't think that I would say anything specific about government migrating to LEO. There's still government things like troop welfare and other, there are still other applications which can still be served by GEO.
Alexander PetercOkay, thank you. And just a last point on Iris Square. Can you give us an idea how much of the total LEO capacity that will be built is going to be sellable commercial capacity for you and how much is going to stay with the EU? And as a part of that question, I understand that SCX has access to the LEO Iris squared capacity as well. They say they will commercialize 10% of it, if I'm not wrong. Is there any reciprocation with your access to their LEO Iris Square part of the capacities that have any interest to you at all or do you see no point in it? Thanks.
Christophe CaudrelierTo answer -- first to answer your question, Alexander, there are two different capacities and the European capacity is quite small actually, in terms of, because of the business cases, the applications. So the vast majority of the capacity is a commercial capacity. And it's a capacity that is bigger than the current available capacity with our current constellation. One. Second, yes, you are right. SCX has access to part or a small part of the LEO capacity as well as we could have access to a small part of the LEO capacity. I mean, it's a bit early at this point to really position ourselves, whether we are going to use or not the LEO capacity. But I mean, really our focus is to be a multi-orbit provider essentially combining LEO and GEO. And anyway, if it was to happen, it would be a very small part of the business.
Alexander PetercOkay, that's very clear. Thank you very much. That was all I had. Thank you.
OperatorWe will take our final question from Wolfgang Felix, Sarria. Your line is open. Please go ahead.
Wolfgang FelixYes, hi. Thank you. I'll make it short then. I was going to ask that your Department of Defense sort of remaining contracts making up. I understand, now approximately 50%-60% of your government services division. What's the average duration on these contracts from here on? I have absolutely no idea. Would it be one year, three years, five years? Then could you just tell me one more time, the Russia timing, why does it have no effect on 2025 or 2025-‘26? My third question would be, what is your GEO constellation only, GEO constellation capacity utilization right now? Is there any way that I can calculate that? And my fourth and final question, can you tell us a bit more about your LEO business right now, i.e. OneWeb? And what is roughly, I guess, revenue in the various segments for the third quarter? Thank you.
Christophe CaudrelierMaybe just, I will answer on Russia first. The reason why it has no or very limited impact, there is a small impact. As you know, we have already removed two channels from our satellites, but the impacts are negligible compared to our business. And this is the reason why we say there is no significant impact for this year. And again, we are only talking of a couple of months, or three months for the remaining part of the year, because our fiscal year will end at the end of June. So it's only a couple of months or three months impact. And second, the full year impact, when we mentioned the EUR16 million full year impact, I mean, then we are talking also of further channels that should be removed. And as Joanna mentioned before, there is a process of identifying the channels that are really impacted by the sanctions. And this is why also, it takes a bit more time to do so. And as such, the expected impact for this fiscal year ‘25 is nil or very limited.
Wolfgang FelixOkay, thank you.
Joanna DarlingtonSo on the U.S. DoD, I mean, the contracts vary in length, but a lot of them. So there are two renewal seasons, there's the fall and the spring. I mean, typically, without going into a lot of detail, and we typically the way it works with the procurement is that they sign a kind of a five-year framework agreement. But within that framework agreement, they have the possibility to renew or they confirm on an annual basis. In fact, the only thing that we take into the backlog, for example, for those contracts is a year. But we can, I mean -- I think probably be easier if we took that question offline. And similarly, for your questions about can we speak about OneWeb? I mean, specifically on figures, we don't break out OneWeb. We don't report OneWeb separately from the group. But if you want to go into more, I mean -- if you want to have a more detailed chat about OneWeb, I suggest you, I'll ping you after this call, and then we can do that offline if that's okay with you.
Wolfgang FelixFantastic. Yes, absolutely. And then I think the geocapacity utilization, I'm also happy to take that offline.
Joanna DarlingtonNo, no, I mean, geocapacity, it varies. I mean, we don't provide a fill rate. It varies. I mean, we don't provide the fill rate because it's not actually a very helpful indicator. Because it's more -- it's more the value than the volume. I mean, it just depends. There are video satellites where the capacity utilization is still very high, so probably above 75%-80%. And there are some geo-connectivity satellites where the utilization rate is -- or some of the older satellites, I would say, the utilization rate is lower. I mean, if you take something like Quantum, the utilization rate is very high. Some of the older connectivity would be lower than that, maybe 50%.
Wolfgang FelixAll right. Okay, well, that's it for me for today. Thank you very much.
Joanna DarlingtonThanks, Wolfgang.
OperatorThat is all the time we have for question and answer session for today. So, I'll now hand you back to your host for closing remarks.
Christophe CaudrelierOkay, thank you very much for your attention. And now we will meet next time for our full year results at the beginning of August. So, with that, we wish you a very nice evening and talk to you very soon. Thank you. Bye-bye.
OperatorThank you for joining today's call. You may now disconnect.