Proximus SA · EURONEXT:PROX
Proximus SA — Q2 2022 Earnings Presentation
47 slides from Proximus SA's earnings presentation, Jul 29, 2022
Slide 1: Proximus group Results presentation Q2 2022
Proximus group Results presentation Q2 2022 29 July 2022 This presentation is a subset of the company’s results release. Guillaume Boutin, CEO Please consult proximus.com/investors for the overall disclosed information.
Slide 2: Cautionary statement
2 Cautionary statement This communication may include some forward-looking statements, without limitation, regarding Proximus’ financial or operational results, certain strategic plans or objectives, macro-economic trends, regulation, future market conditions and other risk factors. These forward-lo
Slide 3: Content
3 Content • Key events Q2 • #inspire2022 strategy • Financial & Operational performance • Appendix
Slide 4: Key events Q2
4 Key events Q2
Slide 5: Q2 delivered strong financial growth & continued commercial traction
Group 5 Q2 delivered strong financial growth & continued commercial traction. Revising FY Guidance upwards. Key strategic Continued strong Strong Q2 financials developments commercial traction • Substantive spectrum rights +8K +23K • +4.9% Group Revenue acquired for € 600M Fiber activated retail lin
Slide 6: Q2 Group Revenue +4.9%; EBITDA +0.9% YoY
6 Group 6 Q2 Group Revenue +4.9%; EBITDA +0.9% YoY EBITDA growth for Domestic & BICS. Telesign executing growth plan. Revenue Direct Margin 4.9% 4.7% (underlying, €M) 30 1,437 12 9 931 27 21 1,370 21 890 -1 -11 +1.9% +11.2% +39.5% +2.6% +21.9% +51.2% Q2’21 Domestic BICS Telesign Elims Q2’22 Q2’21 Do
Slide 7: Delivering on our #inspire2022 strategy
7 Delivering on our #inspire2022 strategy Build the best Operate like a GROW PROFITABLY Act for a GIGABIT NETWORK “DIGITAL native” through partners GREEN and for Belgium company & ecosystems digital society
Slide 8: Proximus well positioned for an evolving Domestic market
Group 8 Proximus well positioned for an evolving Domestic market 1 2 3 4 Strengthening Towards Residential Business Mobile network Fixed network superiority superiority spectrum Fiber 63% convergence rate, Robust telco customer across Belgium base, Attractive mobile pricing in Pack. Cloud/Security a
Slide 9: Further improving NPS trends for all brands increases customer loyalty
Group 9 Further improving NPS trends for all brands increases customer loyalty New offers launched in Q2, Value management executed well with low churn addressing different customer needs levels and reduced contact center volumes Internet churn Contact center (RES) volumes Launching Flex XS offer Q2
Slide 10: Proximus secures differential spectrum package for next 20 years
Group 10 Proximus secures differential spectrum package for next 20 years 20 10 30 10 10 50 MOBILE NV 20 40 30 10 15 100 20 30 30 20 30 100 20 50 50 20 45 100 900MHz 1800MHz 2100MHz 700MHz 1400MHz 3600MHz Renewed spectrum New spectrum Price/MHz Of all spectrum -40% auctioned*, Proximus obtained 50%
Slide 11: Ambition to extend fiber coverage to 95% of Belgian premises by 2032
11 MoU signed with consortium of Belgian financial Ambition to partners, I4B as anchor investor +1.7M HP ambition by 2032, on top of existing roll-out extend fiber plans of Proximus, Fiberklaar & Unifiber. coverage to Total Joint Venture investment of approx. € 4Bn Open to onboard new partners to bu
Slide 12: With 17% fiber coverage end-June, on track for year-end target of 22%
12 Group 12 With 17% fiber coverage end-June, Proximus is well on track to meet year-end target of 22% Proximus Fiberklaar Unifiber 62 Cities 22% Fiber coverage target end-2022
Slide 13: Passing the 1M Fiber Homes Passed milestone in June
Group 13 Passing the 1M Fiber Homes Passed milestone in June, +122K in Q2 Fiber Homes & Businesses Passed 9.4k 22% (in K) weekly rollout Network filling rate* (rounded, HP) +66% +38% 1,200 1,031 250 1,000 909 813 200 800 686 22% 621 150 600 9,700 9,400 20% 19% 100 7,300 400 6,800 126 122 50 5,000 20
Slide 14: Strong customer demand for Fiber: 194k activated Fiber lines
Group 14 Strong customer demand for Fiber: 194k activated Fiber lines end Q2 Fiber park & net adds* Increasing Fiber share Lower churn (in K) in total acquisitions levels +75% 194 170 Q2’21 Q2’22 Copper Fiber 146 126 111 ARPC in € (Res) 65% 75 72 Fiber uplift Migration rate 25 23 14 15 20 (1 year po
Slide 15: Strengthening B2B offers
Group 15 Strengthening B2B offers Strategic partnerships Innovations Build a Sovereign Cloud Solution Provide SME/SE more digital tools Logistics companies testing 5G-Mobile Private Networks (MPN) • Meeting privacy and sovereignty • Trustworthy digital partners challenges in public and regulated • I
Slide 16: On track to execute Telesign growth plan
Group 16 On track to execute Telesign growth plan Telesign ready for public listing, Telesign momentum continues: when markets turn more favorable +60% Sales bookings • Scaling Go-to-market & Product 698 Development teams: +158 talents joined 582 436 417 419 Telesign over the past 12 months #Inspire
Slide 17: BICS becomes Ooredoo Group's trusted communication partner
Group 17 BICS becomes Ooredoo Group’s trusted communication partner BICS to manage voice services across Ooredoo Group’s operations Innovative voice business model includes new solutions in AI, AI, machine learning machine learning&&fraud fraudprotection protection Offer future-proof quality, stabil
Slide 18: Proximus contributing to a greener and more digital society
Group 18 Proximus plays an active role in contributing to a greener and more digital society EV – Ambition to provide at least 15,000 ISO Award additional charging points for Electric Vehicles by 2028 Data Center is ISO Distribution center has 14001 certified for its received the Lean & environmenta
Slide 19: Financial & Operational performance
19 Financial & Operational performance
Slide 20: Domestic
20 Domestic
Slide 21: Internet & Mobile growth continues strongly
21 Domestic 21 Internet & Mobile growth continues strongly. Postpaid Internet base 2,202K; TV base 1,731K; Postpaid base 4,741K; Fixed Voice 1,905K; + 43k YoY + 29k YoY + 201k YoY -194k YoY +2.0% YoY +1.7% YoY +4.4% YoY -9.3% YoY Net adds; Group (‘000) 58 -49 -50 -45 -53 -46 48 53 52 15 15 38 12 14
Slide 22: Flex convergent offer passes 1M subscribers
Domestic 22 Flex convergent offer passes 1M subscribers. Flex subscriptions* (in K) +62% 1.006 922 835 741 621 1.006 922 835 741 621 1 May’22 New: Flex XS Upstream boost Flex ≥ +€4 (Internet + Mobile) for all Flex Packs Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 price increase *Number of Flex packs include both
Slide 23: Residential revenue Q2 growing by +4.3%
Residential 23 Residential revenue Q2 growing by +4.3% Residential revenue (€M, YoY ) • Strong increase in Customer services 2.8% 3.6% 4.3% revenue 2.1% 1.9% 572 562 • May’22 price increase 539 553 553 57 • Traction of multi-mobile Flex offers 50 50 68 53 • Mobile Vikings contribution 430 439 436 43
Slide 24: Residential customer services revenue +3.3% YoY
Residential 24 Residential customer services revenue +3.3% YoY On organic basis: +1.6% revenue , +3.7% ARPC Customers (in K) ARPC (in €) Residential customer Growing Convergent base, Mobile Vikings Supported by Jan’22 & May’22 services revenue (in €M) contribution annualized 1 June price increase, c
Slide 25: Q2'22 Business revenue +0.6%
Business 25 Q2’22 Business revenue +0.6%, mainly driven by Internet services & strong IT products revenue Business revenue (€M, YoY ) Q2 results 2.6% 1.0% 0.6% Services revenue -0.4%, -2.3% -1.6% Growth in Fixed Data, Mobile & IT services off-set by Fixed Voice erosion 465 454 477 459 468 Products r
Slide 26: Continued B2B transformation with good momentum in Fixed Data & IT services
Business 26 Continued B2B transformation with good momentum in Fixed Data & IT services, balancing competitive pressure and legacy erosion Business Services revenue (€M ) • +3.6% Fixed Data growth - Internet supported by pricing, while managing value in the transition to SD-WAN services -0.4% 400 39
Slide 27: Wholesale continued positive track for Services revenue
Wholesale 27 Wholesale continued positive track for Services revenue, benefitting from open network approach Wholesale revenue (€M, YoY ) 0.4% 1.1% 3.3% -2.3% -10.6% • Fixed & Mobile Services revenue +20.1%: ✓ rising number of MVNO customers, 71 72 75 70 70 ✓ more roaming revenue ✓ increasing JV ser
Slide 28: Domestic revenue Q2 +1.9%
28 Domestic 28 Domestic revenue Q2 +1.9% excl. terminals +1.8% (underlying, €M) 1.9% 1,101 1,080 14 6 0 1,026 1,008 -2 +1.8% excl. terminals +1.1% on organic basis Q2’21 Terminals Q2’21 Residential Business Wholesale Non-Services Q2’22 Terminals Q2’22 (Residential & excl. Customer Services Services
Slide 29: Inflationary impacts partially off-set by cost efficiencies
Domestic 29 Inflationary impacts, customer and transformation costs partially off-set by cost efficiencies (underlying, €M) 5.1% +4.0% organic 409 5.1% 390 9 409 11 390 Cost efficiency program mitigating inflation impacts Q2’21 WF Non-WF Q2’22 Q2’21 Mobile Vikings Inflation Customer Transformation E
Slide 30: International
30 International
Slide 31: Continued BICS EBITDA growth, +25.5% in Q2
31 BICS 31 Continued BICS EBITDA growth, +25.5% in Q2 BICS revenue +11.2% YoY Revenue (€M, YoY ) • Core +6.8% higher Mobility services & messaging revenue • Growth > 2X: 12.6% 9.0% 11.2% 2.5% 4.5% strong cloud communication 263 259 270 • Legacy: +8.1% 242 245 Core destination mix and increase in tra
Slide 32: Telesign Q2 revenue +39.5%
32 Telesign 32 Telesign Q2 revenue +39.5%, representing another milestone in its growth journey. Q2 in line with growth plan Revenue (€M, YoY ) +24.0% in CC • Digital Identity revenue & DM increasing on strong volume growth (new & existing customers) 39.5% • Communications revenue & DM increasing on
Slide 33: Group
33 Group
Slide 34: Group Revenue & EBITDA delivered growth in H1
34 Group 34 Group Revenue & EBITDA delivered growth in H1. Revenue Direct Margin 3.8% 3.6% 54 2,841 18 15 1,848 33 38 32 2,737 -21 1,784 -1 YTD Domestic BICS Telesign Elims YTD YTD Domestic BICS Telesign Elims YTD Q2’21 Q2’22 Q2’21 Q2’22 Revenue Opex Ebitda 6.7% 0.7% 22 937 11 30 8 911 878 -1 905 3
Slide 35: Increasing investments in our accelerated Fiber roll out
35 Group 35 Increasing investments in our accelerated Fiber roll out Group Capex €M, excl. spectrum & football rights +12.1% 557 497 • Strong increase in Proximus Fiber HP • Volume related capex on higher Customer installations 37 • IT-transformation and Digitalization 30 % % YTD Q2’21 YTD Q2’22 Oth
Slide 36: YTD FCF reflects accelerated Fiber investments
Group 36 YTD FCF reflects accelerated Fiber investments and unfavorable YoY evolution of BWC (€M) 30 2 12 26 132 262 6 130 -191 Incl. Fiber investments & spectrum auction deposits 15 -165 -3 -12 -15 YTD Q2’21 Acquisitions FCF Underlying Income Interest Early Fiber Cash AP/AR/ Other FCF Acquisitions
Slide 37: Proximus continues to manage a sound financial position
37 Proximus continues to manage a sound financial position Adjusted Net Debt (excl. lease liabilities) (YTD, €M) Credit ratings S&P A- (stable outlook) Moody’s A1 (stable outlook) -2,740 134 1.64 % -15 -2,846 -226 * Weighted average coupon Net debt Free Cash Dividends Other Net debt (long-term only)
Slide 38: … and secured its long term debt
38 … and secured its long term debt Debt maturity schedule (€M) Green bond • >99% of the outstanding LT debt is at fixed rate • Refinancing of 2024 & 2025 bonds hedged in Q1 2022 at low interest rates.
Slide 39: Strong performance allows for upward revision of FY 2022 Guidance
Group 39 Strong performance allows for upward revision of FY 2022 Guidance Better than expected customer ARPC and churn Better than expected YTD EBITDA performance for off-setting inflationary cost effects BICS & Telesign Estimated YOY impacts on 2022 Domestic EBITDA Strong H1 EBITDA: • travel uptak
Slide 40: Revised outlook FY 2022
Group 40 Revised outlook FY 2022 Revised Outlook Guidance metrics YTD 2022 Outlook FY 2022 FY 2022 Underlying Domestic revenue Growing by Growing up to 1% YoY +2.0% YoY excl. Terminals 1%-2% YoY Upper range of Underlying Domestic EBITDA Growing up to 1% YoY +0.3% YoY ‘Growing up to 1% YoY’ Underlyin
Slide 41: Q&A Join the conference call
41 Q&A Join the conference call: Dial-in UK +44 20 7194 3759 Dial-in USA +1 646 722 4916 Dial-in Europe +32 2 403 5816 Code 14090008#
Slide 42: Appendix
42 Appendix
Slide 43: From reported to underlying
43 Appendix 43 From reported to underlying GROUP GROUP GROUP GROUP Revenue EBITDA Revenue EBITDA (EUR million) Q2 '21 Q2 '22 Q2 '21 Q2 '22 YTD '21 YTD '22 YTD '21 YTD '22 Reported 1,370 1,440 476 473 2,737 2,844 936 938 Adjustments 0 -2 -17 -10 0 -3 -31 -27 Underlying 1,370 1,437 459 463 2,737 2,841
Slide 44: EBITDA conversion to FCF
Appendix 44 EBITDA conversion to FCF (€M) 938 14 911 -41 -123 1 2 -740 -29 -27 -3 -12 -15 Reported Lease Incidentals Underlying AP/AR/ Cash Income Interest Early Leave Others FCF Acquisitions FCF Ebitda depreciations Ebitda Inventory Capex tax payments Plan/FFP YTD’22 2022 YTD’22 YTD’22 and interest
Slide 45: Net income (Group share)
Appendix 45 Net income (Group share) (€M) +1.2% 6 3 1 243 -1 -2 240 -4 YTD Q2’21 Underlying Incidentals D&A (*) Net Tax expense Others (***) YTD Q2’22 Ebitda finance result (**) * Excluding Lease depreciations ** Excluding Lease interests *** Includes Non-controlling interests and Share of loss from
Slide 46: Shareholder structure
Appendix 46 Shareholder structure (*status 30/06/2022) Total number of shares Free-float Belgian Government Market Capitalization* Dividend yield* 338,025,135 42% 54% ~€ 5.0Bn ~7.8% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with
Slide 47: Contact Investor Relations
47 Contact Investor Relations Call: Proximus Investor +32 2 202 82 41 E-mail: Relations website: +32 2 202 62 17 investor.relations@proximus.com www.proximus.com/en/investors