Proximus Sa · EURONEXT:PROX
Proximus Sa — Belgacom — Q2 2014 Earnings Presentation
41 slides from Proximus Sa's earnings presentation, 2014
Slide 1: Belgacom Presentation Q2 2014 results
Belgacom Presentation Q2 2014 results Group Financials Group Operationals Executive summary – slide 4 Mobile & Fixed overview – slide 16 Group Revenue – slide 5 Operational Household reporting – slide 17 Mobile Service Revenue slide 6 Financial Household reporting – slide 18 Operating expenses - sli
Slide 2: Cautionary Statement
Cautionary Statement “This communication might include some forward-looking statements, without limitation, regarding Belgacom’s financial or operational results, certain strategic plans or objectives, macro-economic trends, regulation, future market conditions and other risk factors. These forward-
Slide 3: Group Financials
Group Financials Executive summary – slide 4 Group Revenue – slide 5 Mobile Service Revenue slide 6 Operating expenses - slide 7 EBITDA – slide 8 Capex – slide 9 FCF – slide 10 Financial Position – slide 11 Outlook – slide 12 P&L – slide 13 Ray Stewart Balance sheet – slide 14 Slide 3
Slide 4: Strong Q2 financials: solid business performance and positive special items
Strong Q2 financials: solid business performance and positive special items Group revenue -0.9% versus Q2’13 € 1,568 m Excluding capital gain on building sales and REVENUE* divesture impacts -1.1% like-for-like: − better Core Group revenue to -1.7% YoY − BICS revenue recovery to +0.5% YoY Grou
Slide 5: Q2 Group revenue reflecting trend improvement for CBU & EBU
Q2 Group revenue reflecting trend improvement for CBU & EBU, like-for-like. BICS revenue stable YoY +46 -1.1% Like-for-like 1,583 +2 1,568 -42 +2 0 -11 -5 -6 Q2 2014 -0.9% reported (in mio €) Q2 2013 Net Impact Net Impact Regulatory Underlying Underlying Underlying BICS Intra-group Q2 2014 Building
Slide 6: Group mobile service revenue trend improving on continued Mobile recovery
Group mobile service revenue trend improving on continued Mobile recovery +169,000 Mobile customers added YoY in total Churn levels under control: EBU Mobile churn @ 9.8% in Q2’14 CBU Mobile churn @ 25.7% in Q2’14, Postpaid @ 14.0% Increased data usage Improving customers tiering Fadin
Slide 7: Implementation of 'Fit for Growth' strategy showing in good cost control
Implementation of ‘Fit for Growth’ strategy showing in good cost control Quarterly Cost of Sales (€ million) • Deconsolidation of Telindus France 75 0 -3.8% 65 0 Consumer Segment favorably impacted by : 649 680 645 643 55 0 637 636 620 • continued focus on cost efficiency 45 0 575 35 0 • lower inter
Slide 8: Group EBITDA benefitting from building sales and improving underlying trend
Group Ebitda benefitting from building sales and improving underlying trend for CBU and EBU +20 +2 +4 491 +2 +46 0 -2 -9 -0.9% Like-for-like 430 Q2 2014 +14.3% reported (in mio €) Q2 2013 Net Impact Net Impact Regulatory Underlying Underlying Underlying Underlying BICS Q2 2014 Building Sales One-off
Slide 9: €425 million invested so far in 2014
€ 425 million invested so far in 2014 3-year Belgian football broadcasting rights recorded as capex in Q2 425 370 Q2’14 investments € 68m higher YoY : Accelerated network & IT investments in line with 2 45 announced Network and Simplification strategy Capitalisation of the acquired 3-year broadc
Slide 10: Q2'14 FCF of €272m; ytd June FCF €391m
Q2’14 FCF of € 272m; bringing ytd June ’14 FCF to € 391m Belgacom generated € 391 m of FCF in H1’14, or € +255 m H1 391 YoY. Main drivers for 2014 the FCF increase are : (in mio €) - cash received from the sale of consolidated 136 companies - cash received from the sale of buildings - lower income t
Slide 11: Sound financial position
Sound financial position • Net financial debt at € 1,981m, € 166m higher versus end 2013 • The outstanding long term financial gross debt amounted to € 2.5Bio • Credit ratings: Standard & Poor’s A; Moody’s A1 – both stable outlook 3 91 ( 545) ( 1 ,815) ( 1 ,981) ( 33) 20 (1) Net debt FCF Dividends N
Slide 12: FY'14 EBITDA expectations raised
FY’14 EBITDA expectations raised on sound business trends and some higher than expected positive one-offs in H1’14 Reported Reported Initial Guidance New Guidance FY ’13 H1 ‘14 FY ‘14 FY ‘14 Group 6,318 revenue Core business 4,410 -0.8% Decline between Decline between (excl. BICS & -1% and -2% -1% a
Slide 13: Group – quarterly P&L
Group – quarterly P&L YTD- VAR YTD- in mio € Q113 Q213 Jun Q313 Q413 FY13 Q114 Q214 Q2/Q2 VAR YTD Jun Restated Revenues (1) 1,5 8 6 1,5 8 3 3,16 8 1,5 6 8 1,5 8 2 6 ,318 1,48 0 1,5 6 8 3,048 -0.9 % -3.8 % Total OPEX -1,144 -1,15 3 -2,297 -1,140 -1,168 -4,605 -1,068 -1,077 -2,145 -6 .6 % -6 .6 % Cost
Slide 14: Belgacom consolidated balance sheet
Belgacom consolidated balance sheet As of 31 December As of 30 June (EUR million) 2013 2014 ASSETS NON-CURRENT ASSETS 6,254 6,222 Goodwill 2,320 2,294 Intangible assets with finite useful life 1,185 1,160 Property, plant and equipment Investments in associates 2,558 6 2,570 3 All balance sheet capti
Slide 15: Group Operationals
Consumer Group Business Operationals Q2’14 Unit Dominique Leroy Mobile & Fixed overview – slide 16 Operational Household reporting – slide 17 Financial Household reporting – slide 18 Slide 15
Slide 16: Continued solid commercial traction
Continued solid commercial traction - Growing Mobile, TV and Fixed Internet customer base 22 81. 0. 6 -10 2 Continued mobile customer growth 61. 0. 41. 0. 59 -21 33 25 25 Postpaid Paying cards 18 21. 0. 33 20 21 33 22 Postpaid Free +Tango 1.0. net adds total Data Cards -46 -19.0. -58 -48 -71 -67 5,5
Slide 17: Good progress in convergence strategy
Good progress in convergence strategy - Operational drivers x-play Household reporting CBU Households per x-play (in '000) Annualized full churn rate of a x-play Household 2,409 2,403 2,352 2,332 2 2,378 2,359 307 323 333 2 343 356 368 4-Play 26.0% 2 522 519 2 516 515 515 1-Play 514 3-Play 16.4% 19.
Slide 18: Stable revenue from households
Stable revenue from households - higher ARPU & RGUs offsetting loss in 1-play Average Revenue Generating Unit per x-play Household Revenues per x-play (in € million) 4.52 4.55 4.57 4.60 4.61 4.63 400000. . 366 374 375 369 367 374 Total 350000. . 91 98 102 104 113 300000. . 107 4-Play 1-Play 3.12 3.1
Slide 19: Network
Network Mobile – slide 20 Ray Stewart Fixed – slide 21 Slide 19
Slide 20: Proximus delivering on its brand
Proximus delivering on its brand Customer experience as TOP priority Best Customer Experience… …where it matters… …across technologies PROXIMUS brings the overall PROXIMUS brings the best 4G PROXIMUS focuses on bringing the best speed experience in Belgium experience there where it matters best opti
Slide 21: Fixed Network – Driving customer experience with new technologies
Fixed Network - Driving customer experience with new technologies Vectoring technology on VDSL up-to Mass roll-out well Technology evolution underway: in Q2 10% 1000 Mbps Through cancellation of of remote optical up-to crosstalk on a VDSL2 line, platforms made 100 Mbps Vectoring enables up-to-70 vec
Slide 22: Q2 2014 results per business unit
Belgacom Company presentation Investor Relations Q2 2014 results per business unit Consumer Business Unit (CBU) Enterprise Business Unit (EBU) Service Delivery Engine &Wholesale (SDE&W) Staff and Support (S&S) Belgacom International Carries Services (BICS) 22 22 Slide
Slide 23: Consumer Business Unit
Consumer Business Unit Ray Stewart Slide 23
Slide 24: Consumer - quarterly P&L
Consumer - quarterly P&L Yoy variance on reported figures Like-for-like yoy variance (excl. impact from divestures Scarlet NL & Sahara Net and one-offs) 61 0 CBU revenue (EUR mio) Q2’14 Revenue -2.4% lower YoY or -1.8% like-for-like -2.4% -1.8% 59 0 – Like-for-like is excl. € -3m impact from dives
Slide 25: CBU revenues per product group
CBU revenues per product group - Q2’14 revenue -1.8% like-for-like; improving from -2.9% for Q1 -1.8% Like-for-like 567 +2 +5 +6 553 -3 -6 +1 -5 -12 Q2 2014 -2.4% reported (in mio €) Q2 2013 M&A Regulatory Fixed Voice Fixed Internet TV Mobile Service Subsidiaries Terminals & Q2 2014 impact Revenue O
Slide 26: Consumer - Fixed voice
Consumer - Fixed voice Line erosion pressured revenue, stable Fixed Voice ARPU; pro-active churn management results in slowing customer loss Fixed voice Fixed revenue voice revenue & YoY (EUR mio)(EUR Variance mio) The declining Fixed Voice revenue resulted from the YoY line loss and to a lesser e
Slide 27: Consumer – Mobile Service
Consumer – Mobile Service As expected stable decline in Mobile service revenue sustained; Mobile customer base growing Mobile Service Mobile Service revenuerevenue & YoY (EUR mio)(EUR Variance mio) Q2’14 revenue from Mobile Services down 7% YoY; as expected stable decline from previous quarter des
Slide 28: Consumer - Fixed Internet
Consumer - Fixed Internet Continued Fixed Internet revenue growth; +11,000 customers added in the quarter Fixed Internet Fixed Internet revenue revenue & YoY (EUR mio)(EUR Variance mio) Revenue growth driven by growing customer base and price changes. 12 5 3.8% 3.7% 2.2% 5.4% 5.6% 4.9% 2.7% 2.3% 1
Slide 29: Belgacom TV
Belgacom TV Growing TV revenue through larger TV customer base & slight YoY ARPU increase TV revenue TV revenue & YoY (EUR mio)(EUR Variance mio) TV revenue +7.1% YoY driven by continued growth of subscribers 18.9% 18.1% 16.9% 25 .0% 15.3% 13 5 10.2% 11.3% 8.0% 20 .0% 11 5 7.1% 15 .0% 95 10 .0% 5.
Slide 30: Tango Luxembourg
Tango Luxembourg Impacted by regulated MTR reduction Tango revenue TV revenue (EUR mio) (EUR& YoY mio) Variance Q2 ‘14 revenue -12.6% YoY, generating € 28m. 16.8% 12.9% 60 55 2.7% 8.8% 7.1% 8.2% 20 .0% The regulated MTR decrease in Luxembourg (from 8.2cts -3.5% 50 10 .0% 45 40 -12.6% 0.0 % to 0.
Slide 31: Enterprise Business Unit
Enterprise Business Unit Ray Stewart Slide 31
Slide 32: Enterprise – quarterly P&L
Enterprise – quarterly P&L Yoy variance on reported figures Like-for-like yoy variance (excl. impact from Telindus France divesture and one-offs) 62 0 EBU revenue (EUR mio) Q2’14 revenue impacted by Telindus France divestment -7.6% -0.6% 57 0 – Like-for-like EBU’s revenue decline improved to -0.6%
Slide 33: Enterprise revenue evolution per product group
Enterprise revenue evolution per product group Reported variance impacted by divesture Telindus France Like-for-like variance improving on better mobile & organic ICT revenue 554 -0.6% Like-for-like 512 Q2 -39 -5 -4 -2 4 4 0 2014 -7.6% (in mio €) reported Q2 2013 M&A Regulatory Fixed Voice Fixed Int
Slide 34: Enterprise - Fixed Voice
Enterprise - Fixed Voice* Stable Fixed voice revenue decline Fixed voice revenue (EUR mio) & YoY Variance Fixed Voice line erosion triggered by companies rationalising on Fixed line connections continues to impact -2.8% -2.4% -2.9% -3.3% 18 0 16 0 -4.9% -4.5% -3.1% -3.3% 0.0 % Fixed Voice revenue.
Slide 35: Enterprise - Mobile Service
Enterprise - Mobile Service Mobile Service revenue trend significantly improved through larger customer base, growing mobile data volume and slowing ARPU decline Mobile Service revenue (EUR mio) & YoY Variance Q2’14 Mobile services revenue trend continued significant -0.8% improvement -4.7% 0.0 %
Slide 36: Enterprise - Fixed Data
Enterprise - Fixed Data Fixed Data revenue continued to be impacted by migrations to Explore platform; Fixed Internet revenue stable supported by higher ARPU Fixed Data revenue (EUR mio) & YoY Variance Fixed Data, consisting of Fixed Internet and data connectivity revenue, -2.2% YoY 18 0 10 .0% –
Slide 37: Enterprise – ICT
Enterprise – ICT* ICT revenue impacted by divestment of Telindus France Like-for-like, revenue up by 2.9% vs last year ICT revenue (EUR mio) & YoY Variance EBU reported € 153m ICT revenue Telindus France 2.4% 2.0% 3.6% 1.9% -0.7% -0.2% -1.0% +2.9% – Telindus France divestment impacted yoy variance
Slide 38: Service Delivery & Wholesale – P&L
Service livery & Delivery Wholesale& Wholesale - P&L – P&L SDE&W revenue (EUR mio) * 93 -9.7% Lower Carrier Wholesale Services revenue 83 – new lowered Wholesale roaming tariffs – only partly compensated for by the volume growth for roaming 73 63 75 76 67 66 66 65 64 53 43 60 – continued erosion o
Slide 39: Staff & Support – P&L
Staff & Support – P&L S&S Revenue(EUR mio) Q2’14 revenue of € 64m, including a EUR 46 million capital 64 50 40 gain following the completion of 2014 planned building 30 > 100% sales within the network simplification project and a 25 20 10 18 litigation settlement (EBITDA neutral). 7 11 7 10 7 0 Q3
Slide 40: International Carrier Services – P&L
International Carrier Services – P&L BICS Revenue (EUR mio) 50 0 -14,3% +0.5% Q2 BICS’ revenue stable on recovery of voice traffic 45 0 40 0 – trend improvement from the previous quarter (14% down year-on- 35 0 424 430 417 413 437 401 415 30 0 25 0 357 year), underlining the volatility of part of
Slide 41: For further information: Belgacom Investor Relations
For further information: Belgacom Investor Relations e-mail: investor.relations@belgacom.be Tel: +32 2 202 82 41