Proximus Sa · EURONEXT:PROX
Proximus Sa — Q1 2023 Earnings Presentation
45 slides from Proximus Sa's earnings presentation, Apr 28, 2023
Slide 1: Proximus Group Results presentation Q1 2023
1 Proximus Group Results presentation Q1 2023 28 April 2023 Guillaume Boutin, CEO Follow the webcast here. To ask a question, register here for the Q&A.
Slide 2: Cautionary statement
2 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 resul
Slide 3: Agenda
3 Agenda • Highlights Q1 • Financial & Operational performance • Outlook 2023 • Q&A
Slide 4: Highlights Q1
4 Highlights Q1
Slide 5: Proximus Group delivering strong +5.9% revenue growth while EBITDA in line with expectations
Group 5 Proximus Group delivering strong +5.9% revenue growth while EBITDA landing in line with expectations Key strategic Continued strong Sustained strong developments commercial momentum revenue growth in Q1 Revenue YoY Launched bold2025 +11K +36K 5.9% Fiber activated 23% Fiber HP footprint retai
Slide 6: New bold2025 strategy launched
Group 6 We deliver great value for through exceptional our stakeholders strengths Act for an inclusive society & Roll out #1 gigabit network New bold2025 be sustainable in everything we do for Belgium strategy launched Delight customers with Engineer technology assets unrivalled experience to enable
Slide 7: Increasing Fiber footprint to 23% end-March 23
7 Group 7 Increasing our Fiber footprint to 23% end-March 2023 Proximus and partners deploying Fiber in 106 cities 106 Cities and municipalities with Fiber works ongoing Proximus Fiberklaar >50% Unifiber Brussels region Covered with Fiber
Slide 8: We pass nearly 1.4M premises with Fiber
Group 8 We pass nearly 1.4M premises with Fiber JVs picking up pace and set to drive total HP higher in 2023 1,373k Fiber Homes & +91k Fiber Homes & 24% Businesses Passed Businesses Passed Network filling rate* (in K, total base) (in K, additions in the period) 24% +51.0% 200 Fiber JVs Fiber JVs 1,3
Slide 9: Strong customer demand for Fiber, 288k activated Fiber lines
Group 9 Strong customer demand for Fiber, 288k activated Fiber lines by the close of Q1 2023 Total park & net adds1 (in K) +69% 288 Increasing Fiber share Lower churn 252 in total acquisitions levels vs Copper 220 194 36 170 27 31 >30% 2 25 23 Q1’22 Q1’23 69% 68% ARPC in €3 65% +€7 Q1’22 Q2’22 Q3’22
Slide 10: Fiber development – Zooming on a City Braine-le-Comte
Group 10 Fiber development – Zooming on a City Braine-le-Comte +4p.p. market 53% share gain 57% ✓ 5,210 living units ~75% ✓ 5,110 Homes Passed Prospects 32% Migration as of today Fiber 37% Rate ✓ 32% Network filing rate Copper 9% Non-Digital 6% 6% M+0 M+9 June 2023 May 2021 Project to be fully Proje
Slide 11: All brands supportive of customer growth, addressing all segments
Residential 11 All brands supportive of customer growth , addressing all segments in the market Early Product & adopters & For price care cord seekers seekers cutters Premium solutions Innovative Price focus with no-frills through convergent and digital experience experience. Increased multi-mobile
Slide 12: We recently acquired edpnet, matching our multi-brand strategy
Group 12 We recently acquired edpnet, matching to our multi-brand strategy • Largest independent fixed internet player in Belgium fitting Proximus multi-brand strategy • Enriching Proximus offering in tech-savvy residential customers and SMEs segment • Separate entity ensuring continuity while benef
Slide 13: Managing value, supported by our brand segmentation
Residential 13 Managing value, supported by our brand segmentation balancing pricing , volumes and churn Fixed only Convergent With customer While driving Empowering high Price rise having growth trends meaningful ARPC pace revenue mitigated churn uplift growth largely maintained effect Full churn r
Slide 14: Portfolio price changes on 1 July 2023
Group 14 Our portfolio will undergo price changes on 1 July 2023 with average inflation impact on our cost base remaining high in 2023 1 July 2023 Residential + SE Corporate Proximus brand Legacy and commercialized Targeted price increases across Scope Standalone and Packs corporate product range* C
Slide 15: For mobile, we renew the Proximus branded portfolio
Group 15 For mobile, we renew the Proximus branded portfolio Boosting mobile data ✓ Offering more value by increasing data significantly ✓ Besides data, price tiering through 5G accessibility & speed ✓ Commercial ‘hero’ price points ( ) moving up in ‘more for more’ approach ✓ Proximus Flex Packs bec
Slide 16: Proximus to play a leading role in data security and cyber defense
Group 16 Proximus to play a leading role in data security, privacy protection and cyber defense • Selected alongside 10 companies to co-develop with Microsoft a sovereign cloud solution • Partnership with Google Cloud to provide sovereign disconnected cloud services in Belgium and Luxembourg Meeting
Slide 17: ESG commitments
Group 17 ESG commitments Setting an example on the environmental front Signed “Brussels Green Deal” • Committing to the Collaborative Urban Logistics and Transport • Ensuring more efficient and ecological parcel delivery • Going for a greener utility fleet Reviewed “Supplier Code of Conduct” • Setti
Slide 18: Financial & Operational performance
18 Financial & Operational performance
Slide 19: Domestic
19 Domestic
Slide 20: Maintaining commercial traction as market growth moderates
20 Domestic 20 Maintaining commercial traction as market growth moderates Postpaid Internet base 2,227K; TV base 1,697K; Postpaid base 4,827K; Fixed Voice 1,759K; + 34k YoY - 35k YoY + 138k YoY -192k YoY +1.6% YoY -2.0% YoY +2.9% YoY -9.9% YoY Net adds; Group (‘000) -46 -42 -51 48 -53 -53 38 43 11 3
Slide 21: Residential revenue Q1 +5.9%, Services revenue +4.7%
Residential 21 Residential revenue Q1 +5.9%, Services revenue +4.7% Residential revenue (€M, YoY ) 5.9% 4.3% 1.9% 3.0% 0.7% • Customer Services revenue +4.7% 570 576 585 553 562 ✓ Continued customer growth for Mobile 65 62 59 61 60 postpaid (Q1 +9,000) and Internet (Q1 57 54 67 67 53 +11,000) ✓ Conv
Slide 22: Growing Convergent base and higher ARPC driving Residential revenue
Residential 22 Growing Convergent base and higher ARPC driving Residential customer services revenue increase +4.7% Customer Customers (in K) +5.3% ARPC (overall, €) Growing Convergent base: services revenue (in €M) Supported by price indexations & +5.0% YoY upsell to convergent offers Incl. +9.2% C
Slide 23: Strong increase in Business revenue, +6.2% YoY
Business 23 Strong increase in Business revenue, +6.2% YoY. Growing Services revenue, IT products further catching up Business revenue (€M, YoY ) Q1 revenue 6.2% 3.7% 4.1% Services revenue +0.8%, 0.6% growth in Fixed Data, Mobile and IT services outpacing Fixed -1.6% Voice erosion 497 487 459 468 47
Slide 24: Q1 B2B Service revenue slightly up YoY
Business 24 Q1 B2B Service revenue slightly up YoY Fixed Data, IT and Mobile Services growth, outpacing Fixed Voice erosion Business Services revenue (€M) Q1 +0.8% 397 400 +3.3% Fixed Data 72 66 > Internet revenue up: +7.5% ARPU & stable base Growing share of Fiber in total internet base 114 118 > S
Slide 25: Wholesale Q1 Services -2.1%
Wholesale 25 Wholesale Q1 Services -2.1%, mainly reflecting ongoing decline in interconnect revenue Wholesale revenue (€M, YoY ) • Q1 Fixed & Mobile Services 3.3% -2.3% -0.7% revenue -2.1%. -8.1% -10.7% > Stable excluding one-off phasing 72 70 70 69 in JV revenue 62 > Mobile revenue moderating on 34
Slide 26: Domestic business +4.8% top line growth in Q1
26 Domestic 26 Domestic business +4.8% top line growth in Q1 reflecting commercial success and pricing effects Revenue Q1 (underlying, €M) 4.8% 29 1,149 21 3 1,097 -1 +2.7% Services revenue Q1’22 Residential Business Wholesale Non-Services Q1’23 Customer Services Services Revenue* Services *Aggregat
Slide 27: Continued delivery of cost efficiency savings partially offset inflation
Domestic 27 Continued delivery of cost efficiency savings partially offset steep inflationary impact in Q1 OPEX (underlying, €M) Domestic Opex (€M) Q1 8.3% Q1 8.3% 452 19 452 16 417 417 Q1’22 WF Non-WF Q1’23 Domestic headcount (FTE) -53 10,490 10,437 Q1’22 Lower Inflation Customer Transformation Q1’
Slide 28: Domestic EBITDA reflecting inflation impacts
28 Domestic 28 Domestic EBITDA reflecting inflation impacts, partially offset by improved direct margin EBITDA Q1 (underlying, €M) -3.4% 20 16 419 19 405 Q1’22 Direct Margin Workforce costs Non-Workforce costs Q1’23
Slide 29: International
29 International
Slide 30: BICS grew Q1 EBITDA by 15%, despite wage-inflation impact
30 BICS 30 BICS grew Q1 EBITDA by 15%, despite wage-inflation impact 20.4% Revenue (€M, YoY ) Enterprise Telco 16.4% Q1 revenue: revenue: 11.2% 7.1% +16.0% YoY +4.5% YoY 307 311 262 4.5% 245 270 262 245 118 118 Revenue trend 55 64 96 104 107 Core +11.3% reflecting a normalizing 17 17 14 19 17 Growth
Slide 31: Telesign Q1 revenue +19.5%
31 Telesign 31 Telesign Q1 revenue +19.5% Continued growth for both Digital Identity and Communication +16.0% Digital identity growth driven by Revenue (€M, YoY ) 61.5% in CC expansion of customers base in new 39.5% 44.0% 30.9% 19.5% geographies , launch of Silent Verification in 14 markets 140 Comm
Slide 32: Group
32 Group
Slide 33: Revenue & Direct Margin growth for all segments in Q1
33 Group 33 Revenue & Direct Margin growth for all segments in Q1, anticipated inflationary pressure mainly affects domestic EBITDA Revenue Direct Margin 5.9% 3.3% 17 20 1,486 8 3 947 52 20 1,404 -6 917 -1 +4.8% +7.1% +19.5% +2.4% +12.7% +14.2% Q1’22 Domestic BICS Telesign Others* Q1’23 Q1’22 Domest
Slide 34: Q1'23 Capex of €312M
34 Group 34 Q1’23 Capex of €312M Group Capex €M, excl. spectrum & football rights • Proximus Fiber HP starting to come down +15.6% • Fiber customer termination and activation 312 cost rising 270 • Other capex: • IT and content timing effects • Ongoing implementation of Mobile network consolidation 3
Slide 35: Q1 2023 FCF mainly impacted by time shifts in payments
Group 35 Q1 2023 FCF mainly impacted by time shifts in payments from ‘22, increased cash capex & lower Ebitda result (€M) 5 33 29 -16 -68 -19 4 7 -79 -21 -20 -99 Q1’22 Acquisitions FCF Underlying Cash Interest on BWC Other FCF Acquisitions Q1’23 2022 Q1’22 Ebitda Tax Capex Spectrum Q1’23 2023 adjust
Slide 36: Proximus continues to manage a sound financial position
36 Proximus continues to manage a sound financial position Adjusted Net Financial Position (excl. lease liabilities) Credit ratings (YTD, €M) S&P BBB+ (stable outlook) Moody’s A2 (stable outlook) -2,758 2.0 % Weighted average coupon (long-term only) -99 -13 * -2,870 Net fin Free Cash Other Net fin 7
Slide 37: Re-iterating 2023 outlook
Group 37 Re-iterating 2023 outlook Guidance metrics FY2022 YTD 2023 Outlook Dividend over 2022 result FY 2023 16 January 2023 AGM approved annual gross dividend over result 2022 of € 1.2/share. Underlying Domestic € 4,478M +4.8% YoY +1% to +3% YoY revenue Payment remaining normal gross dividend of €
Slide 38: Q&A
38 Q&A To ask a question, join the conference call → Register here for the Q&A to receive your dial-in details.
Slide 39: Appendix
39 Appendix
Slide 40: From reported to underlying
40 Appendix 40 From reported to underlying GROUP GROUP Revenue EBITDA (EUR million) Q1 '22 Q1 '23 Q1 '22 Q1 '23 Reported 1,405 1,486 465 445 Adjustments -1 0 -18 -13 Underlying 1,404 1,486 448 432 Adjustments -1 0 -18 -13 Lease Depreciations -20 -20 Lease Interest -1 Transformation 4 4 Acquisitions,
Slide 41: EBITDA conversion to FCF
Appendix 41 EBITDA conversion to FCF (€M) 445 432 -13 -46 -426 15 -15 -31 -9 -79 -20 -99 Reported Adjustements Underlying BWC Cash Tax payments Interest Early Leave Others FCF Acquisitions FCF Ebitda Ebitda Capex payments Plan/FFP Plan Q123 2023 Q123 Q123 Q123 adjusted • Early leave plan refers to v
Slide 42: Net income (Group share)
Appendix 42 Net income (Group share) (€M) -21.5% 120 0 -16 10 1 95 -5 -16 Q1’22 Underlying Adjustments D&A Net Tax expense Others (*) Q1’23 Ebitda finance result * Includes Non-controlling interests and Share of loss from associates
Slide 43: Continued access to credit markets & near term refinancing secured
Appendix 43 Continued access to credit markets & near term refinancing secured at low interest rates Debt maturity schedule (€M) * >99% of outstanding LT debt at fixed rate 7 years weighted average debt duration1 750 600 400 2% weighted average coupon1 500 500 Proximus issued successfully a new €500
Slide 44: Shareholder structure
Appendix 44 Shareholder structure Status 31/03/2023 Total number of shares Free-float Belgian Government Market Capitalization Dividend yield 338,025,135 42% 54% ~€ 3Bn ~13.5% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with divide
Slide 45: Contact Investor Relations
45 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