Proximus Sa · EURONEXT:PROX
Proximus Sa — Q1 2024 Earnings Presentation
41 slides from Proximus Sa's earnings presentation, Apr 26, 2024
Slide 1: Proximus Group Results presentation Q1 2024
Proximus Group Results presentation Q1 2024 26 April 2024 Guillaume Boutin Chief Executive Officer
Slide 2: Cautionary statement
Cautionary statement This presentation is a subset of the company’s results release. Please consult proximus.com/investors for the overall disclosed information. This communication may include some forward-looking statements, without limitation, regarding Proximus’ financial or operational results,
Slide 3: Agenda
Agenda o Highlights Q1 2024 o Financial & Operational Q1 performance o Q&A
Slide 4: Q1 Highlights
Q1 Highlights
Slide 5: Q1 marks an excellent start to the year, confirming 2024 guidance
Q1 marks an excellent start to the year, providing full confidence in achieving our guidance set for 2024 Strong revenue growth trend Growing Direct Margin+xx% despite topline pressure Q1’24 EBITDA of 454M€, up by strong +5.0% %YoY m€, %YoY %YoY 5.0% 1.4% 4.8% 4.5% 4.2% 4.3% 3.5% +0.7% in cc -0.4% +
Slide 6: Proximus and partners deploying Fiber in 159 cities
Proximus and partners deploying Fiber in 159 cities cities and municipalities with Fiber works ongoing Fiber cooperation agreement in Belgium Working towards achieving fiber cooperation agreements.. BIPT confirmed it will assess any agreement between operators (communication 12 Oct’23) Proximus Fibe
Slide 7: 1.84M Fiber HP at end-Q1, strong HP JVs' contribution
1.84M Fiber HP at end-Q1, strong HP JVs’ contribution Fiber HP footprint of nearly 31%; and “Fiber in the street” reaching 36% Fiber Homes & Fiber Homes & Fiber in the street, Businesses Passed in Q1 Businesses Passed end-Q1 Incl. JV funnel of 320k LU, total (in K, additions in the period) (in K, to
Slide 8: 441k activated Fiber lines by end-Q1
441k activated Fiber lines by end-Q1 continued strong customer demand for Fiber FIBER Increasing Fiber share Lower churn Total park & net adds (in K) in total acquisitions levels vs Copper +53% +9pp 441 397 353 322 288 Q1’23 Q1’24 120 115 110 Maintaining high ARPC in € 44 44 105 36 100 migration rat
Slide 9: Best mobile network in Belgium confirmed in BIPT campaign
The best mobile network in Belgium confirmed in recent BIPT campaign, completing previously received independent recognitions New BIPT campaign results Recognized as best Proximus scores best for 4G & 5G download speed telco operators in 2024 #1 Indoor 5G coverage in terms of households and territor
Slide 10: Launched Proximus+ app
Launched Proximus+ app , connecting all Proximus digital platforms and expanding them through unequaled partnerships + sides Easy management New services of telco services to organize Home ~900k users Access to games, Mobility and migrated from deals & rewards Neighbourhood life MyProximus to Proxim
Slide 11: Route Mobile transaction on track to close by mid-May
Route Mobile transaction on track to close by mid-May confirming at least ≥ 90M€ run-rate EBITDA synergy Process Deal 3 YR update rationale Ambitions* Clearance 11 countries Expanding in Fast- obtained growing CPaaS market MTO tendering period Critical scale and completed (~25% of leading position i
Slide 12: Q1 Performance
Q1 Performance
Slide 13: Domestic
Domestic
Slide 14: Sustained solid commercial performance with growth for Internet and Mobile
Domestic Sustained solid commercial performance with continued growth for Internet and Mobile Mitigating cord cutting effects and Fixed voice erosion Postpaid Internet base 2,279K; Postpaid base 4,994K; TV base 1,659K; Fixed Voice 1,608K; +52k YoY +166k YoY -38k YoY -151k YoY YoY YoY YoY YoY Net add
Slide 15: Residential revenue up by +5.9% YoY
Residential Residential revenue up by +5.9% YoY continued strong Services revenue growth up +6.5% YoY 8.3% • Customer Services revenue +6.5% YoY 5.5% 5.9% 5.9% • Strong Q1’24 customer growth 4.2% 624 620 601 585 585 62 55 59 59 58 85 76 63 67 64 29 11 11 14 17 9 Q1’23 Q1’24 Q1’23 Q1’24 Q1’23 Q1’24 4
Slide 16: Growing Convergent base and higher ARPC driving Residential revenue
Residential Growing Convergent base and higher ARPC driving +6.5% Residential customer services revenue increase in Q1 Customers (in K) Customer services revenue profile significantly improved: Growing Convergent base: +6.5% YoY (M€) Customer satisfaction Network investments +1.0% Value management M
Slide 17: Successful value management supported by product superiority
Residential Successful value management supported by product superiority Strong ARPC, managed churn and strong customer growth Convergent Total (Convergent + Fixed only + Mobile only) Sustaining a Price rises having only While driving Empowering high solid customer trend limited churn effect meaning
Slide 18: Strong Business revenue growth +3.1% YoY
Business Strong Business revenue growth +3.1% YoY Business Services up +2.7% YoY 6.2% Services revenue +2.7%, 4.1% Solid growth in IT Services and Fixed Data outpacing Fixed 2.9% 3.1% Voice erosion -0.5% Products revenue +4.5%, 487 490 494 502 Fully driven by IT Products 482 75 73 83 79 71 9 7 9 9 8
Slide 19: Solid continued B2B Services revenue growth
Business Solid continued B2B Services revenue growth IT Services and Fixed Data growth outpacing Fixed Voice erosion +7.8% IT Services driven by growth in Smart +2.7% Network, Cloud, Security and Smart Mobility 411 400 +7.8% +5.5% Fixed Data 107 99 • Internet revenue up, ARPU +6.6% & stable base wit
Slide 20: Wholesale Services revenue +10.2%
Wholesale Wholesale Services revenue +10.2% continued decline in interconnect revenue -4.1% -4.9% Q1 Fixed & Mobile Services revenue +10.2% on -9.0% -8.3% -10.7% a low comparable base 67 66 63 62 59 • Higher roaming volume • Growing JVs services revenue 30 29 28 30 24 Interconnect revenue -20.9% • O
Slide 21: Sustained strong Domestic revenue growth, +4.5% YoY
Domestic Sustained strong Domestic revenue growth, +4.5% YoY revenue from Services up by +4.9% YoY Revenue (underlying, M€) +4.5% 8 1,201 11 3 30 1,149 +4.9% Services revenue Q1’23 Residential Business Wholesale Non-Services Q1’24 Customer Services Services Revenue* Services *Aggregate of Residentia
Slide 22: Continued cost efficiency delivery more than offsets inflation effect
Domestic Continued cost efficiency delivery more than offsets inflation effect, customer OPEX increases driven by strong commercial momentum OpEx (management view, underlying, M€) Domestic OPEX (M€) 6.0% 6.0% 479 15 479 13 452 452 Q1’23 WF Non-WF Q1’24 Domestic headcount (FTE) -67 483 10,437 10,371
Slide 23: Domestic EBITDA +4.7%
Domestic Domestic EBITDA +4.7% Strong Direct Margin growth and cost efficiencies outpacing inflation impacts (M€) +4.7% -13 46 -15 424 405 Q1’23 Direct Margin Workforce costs Non-Workforce costs Q1’24 23
Slide 24: International
International
Slide 25: International EBITDA up +8.6% YoY
International International EBITDA up +8.6% YoY driven by Direct Margin growth and close cost management -10.2% at +0.7% at constant constant currency currency -10.3% +0.6% +8.6% 353 94 94 316 30 30 163 138 28 30 64 65 219 197 -29 -19 -1 -1 Q1’23 Q1’24 Q1’23 DM OpEx Q1’24 Q1’23 Q1’24 • +3.2pp margin
Slide 26: Communications and Data Direct Margin grew by +0.9%
International Communications and Data* Direct Margin grew by +0.9% mainly driven by Digital Identity, Mobility Services and Cloud Communications -9.9% • Revenue impacted by lower CPaaS SMS volumes, limited DM 219 231 230 impact due to high termination 204 197 costs Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 • Ab
Slide 27: P2P Voice and Messaging Direct Margin down -0.8%
International P2P Voice and Messaging* Direct Margin down -0.8% Revenue impacted by Voice products -15.5% • Keeping strategic strong position on profitable destinations in an inherently declining voice market. 163 163 167 170 138 • Revenue YoY down on: • VoLTE rollout in roaming, accelerating volume
Slide 28: Group
Slide 29: Q1 Group EBITDA +5.0%
Group Q1 Group EBITDA +5.0%, growing Direct Margin more than offsetting the moderating cost increase Revenue Direct Margin 1.2% 5.0% 52 46 1 1 994 2 1,504 947 1,486 -36 +4.5% -10.2%* +5.4% +0.7%* Q1’23 Domestic International Others** Q1’24 Q1’23 Domestic International Others** Q1’24 Opex EBITDA 5.1%
Slide 30: Q1 2024 Group capex of 294M€ on track for guidance
Group Q1 2024 Group capex of 294M€ well on track to end the year within guidance of c. 1.2B€ Group Capex M€, excl. spectrum & football rights -5.5% 311 294 • Proximus Fiber build volumes reducing • Fiber customer termination and activation cost rising, supporting topline momentum. 26 • Other capex i
Slide 31: In-year phasing effects on WC needs impacted adjusted FCF
Group In-year phasing effects on WC needs impacted adjusted FCF, more than offsetting benefit of higher EBITDA and lower cash CapEx FCF ( YoY, M€) Operations Investing • Increase in Accounts Receivables driven by strong Q1 sales performance • Phasing of several suppliers’ payments • Inventory phasin
Slide 32: Reiterating 2024 guidance
Reiterating 2024 guidance Outlook Guidance metrics FY2023 YTD 2024 FY 2024 Underlying Domestic Growing 4,665M€ +4.5% YoY revenue Up to 1% Underlying Domestic +4.7% YoY Growing 1,636M€ Over 2024 result, intention to EBITDA Up to 1% return a gross dividend of €0.6/share: Underlying Group +5.0% YoY Gro
Slide 33: To ask a question, join the conference call
To ask a question, join the conference call → Register here for the Q&A to receive your dial-in details.
Slide 34: Appendix
Appendix
Slide 35: From reported to underlying – EBITDA adjustments
Group From reported to underlying – EBITDA adjustments Q1’23 Q1’24 (M€) (M€) 465 9 454 445 6 -1 4 0 432 -23 4 -2 -20 -1 Reported Lease Lease Transformation Acquisitions, Litigation / Underlying Reported Lease Lease Transformation Acquisitions, Litigation / Underlying depreciations interest mergers a
Slide 36: EBITDA conversion to FCF
Group EBITDA conversion to FCF Q1 2024 (M€) 465 454 -11 1 -148 -24 -395 0 -112 -128 -17 Reported Adjustments Underlying Change in WC Interests paid Income Cash Capex Cash Other FCF Adjustments FCF Ebitda Q1’24 Ebitda and received Tax paid Investing Q1 ’24 Q1’24 Q1 ’24 Q1 ’24 Q1 ’24 adjusted 36
Slide 37: Net income
Group Net income (Group share) +6.4% (M€) 21 -2 -9 2 101 95 -6 -1 Q1 2023 Underlying Adjustments D&A Net Tax expense Others (*) Q1 2024 Ebitda finance result * Includes Non-controlling interests and Share of loss from associates 37
Slide 38: Adjusted Net Financial Position (excl. lease liabilities)
Group Adjusted Net Financial Position (excl. lease liabilities) Keeping a sound financial position, with net debt/EBITDA ratio within comfort zone (M€) Net financial position Net financial position EOP 2023 Free Cash Flow Dividends Other* YTD 2024 -3,131 0 -128 -4 -3,263 * Mainly remeasurement to fa
Slide 39: Managing maturity and average coupon
Group Managing maturity and average coupon Successfully issued a 700M€ 10-year bond due March 2034 carrying a 3.75% coupon Debt maturity schedule (M€) ~65% in ≥ 5yrs Credit ratings ~35% in next 5yrs S&P BBB+ (stable outlook) Moody’s A2 (stable outlook) Underlying swap green green rates hedged bond b
Slide 40: Shareholder structure
Shareholder structure Status 31/03/2024 Total number of shares Free-float Belgian Government Market Capitalization Gross Dividend yield 338,025,135 42% 54% ~€ 2.5Bn ~16% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with dividend rig
Slide 41: Investor Relations contacts
Nancy Goossens Adrien Peillon Investor Relations Lead Investor Relations manager Call: Proximus Investor E-mail: +32 2 202 82 41 Relations website: investor.relations@proximus.com +32 2 202 62 17 www.proximus.com/en/investors