Proximus Sa · EURONEXT:PROX
Proximus Sa — Belgacom — Q1 2009 Earnings Presentation
45 slides from Proximus Sa's earnings presentation, May 15, 2009
Slide 1: First Quarter Results 2009
First Quarter Results 2009 15 May 2009 Slide 1
Slide 2: Content
Content • Group Highlights & Summary Results slide 3-7 • Consumer Business Unit CBU highlights & summary slide 9-10 Operationals slide 11-16 Financials slide 17 • Enterprise Business Unit EBU highlights & summary slide 19-20 Operationals slide 21-25 Financials slide 26 • Service Delivery Engine SDE
Slide 3: Highlights Q1 2009
Highlights Qi 2009 belgacom
Slide 4: Group highlights
Group highlights Resilient reported revenue of €1,492m or +1.5% yoy incl Q108 Q109 var. contribution acquisitions & divestments Key group financials (in EUR million) Organic revenue growth of 0.3% as result of: Revenue 1,469 1,492 1.5% growing business drivers EBITDA 518 492 -5.1% continued strong p
Slide 5: Group operational highlights
Group operational highlights Sustained growing customer base: Continued success for Belgacom TV with growth of 49,000 users in Q109. Total TV customer base of 555,000 with ARPU per household growing to EUR 20.4 Broadband customer base of 1,487,000, incl. Scarlet, i.e. + 202,000 customers compared to
Slide 6: 2009 guidance reiterated
2009 guidance reiterated So far, the residential segment of the Belgacom Group did not experience a significant impact on its financial performance from the economic downturn. As expected, the enterprise business sees the impact mainly in the slowdown in mobile usage, and especially in roaming. Resu
Slide 7: Regulation: Impact & Tariffs
Regulation: Impact & Tariffs Q1 2009 regulation impact: Estimated FY 2009 regulation impact: Revenue:€ -21m Revenue:€ -83m EBITDA: € -18m EBITDA: € -57m This includes : This includes : Voice roaming, MTR & flow through to F2M tariffs. Voice, SMS & Data Roaming, MTR & flow through Wholesale leased li
Slide 8: Consumer Business Unit (CBU)
Consumer Business Unit (CBU) Q1 2009 Results / CBU / CBU highlights / CBU voice / CBU Data / CBU TV / CBU Financials
Slide 9: CBU - Highlights
CBU - Highlights Revenue yoy + €43m or +7.9% incl. €48m contribution of acquisitions Organic revenue variance at -0.9% Positive impact from revenue growth in TV, mobile terminal, SMS and internet Offset by regulation impact (€-9m) Underlying business growing 0.8% yoy Higher operational costs, yoy +
Slide 10: CBU - Highlights
CBU - Highlights TV +49k new subscribers in Q109 and total customer base at 555k. ARPU per household1 increased to €20.4 Broadband nets adds incl Scarlet + 20k; in line with normalized2 Q108 Business Total customer base including Belgian residential customers of Scarlet at 1,042k performance Fixed v
Slide 11: CBU - Voice - Fixed
CBU - Voice - Fixed Net line loss* (000) Q109 net line loss at -43k 1 Total customer base at 2,123k lines including 71k -42 -39 -36 -46 -43 VoIP lines Line loss impacted by intensified competition Q 10 8 Q208 Q 30 8 Q408 Q 109 As from April ’09 commercial freeze of VoIP offer Voice lines EOP* (000)
Slide 12: CBU - Voice – Mobile
CBU - Voice – Mobile Mobile customer growth (000) MVNO Own cust End of Q109, Mobile customer base at 3,787k 65 72 +10k new customers in Q109 46 24 33 27 Q108 customer growth driven by MVNO 10 20 27 33 45 customer growth of Q109 under own brands 14 Q 108 1 Q 2208 3 Q 30 8 Q44 08 Q 510 9 amounts to +1
Slide 13: CBU - Data - Fixed
CBU - Data - Fixed Broadband Growth (000) Stable broadband net adds in competitive market 37 Q108 net adds exceptionally high: impacted by 26 active migration of dial-up to broadband 20 17 Q109 includes Belgian residential broadband 5 lines of Scarlet Q 108( 1 1) Q 208 2 Q 3038 Q 4 08 4 Q 1059( 2) Q
Slide 14: CBU - Data - Mobile
CBU - Data - Mobile Normalized SMS* (units/month) Monthly SMS/user increased by 56% from 100 SMS to 156 SMS driven by free SMS as part of customers pricing offer. 66.8 68.3 58.9 60.0 54.9 Excluding free SMS, SMS traffic still grows 16.0% YoY from 58.9 SMS to 68.3 SMS. Q1 10 8 Q2 2 0 8 Q33 0 8 Q 44 0
Slide 15: CBU - Belgacom TV
CBU - Belgacom TV TV Growth (000) +49k TV net adds in Q109; total customer base amounting to 555k 63 555k TV users end of March 09, of which 70k are 52 49 44 42 second stream users Q 101 8 Q 220 8 Q 3308 Q 440 8 Q 10 5 9 continued customer growth driven by successful promotions & packs Tot al TV 2nd
Slide 16: CBU – Tango (Luxembourg)
CBU – Tango (Luxembourg) Tango financials have been consolidated as from 1 August 2008 For Q109, Tango contributed €23m to the CBU revenue The total mobile customer base end of March 2009 amounts to 245k customers with a blended net ARPU of €24.1/month Three months ended 31 March 2009 Revenue (in EU
Slide 17: CBU – Financials
CBU – Financials Total revenues (EUR mio) Revenue +7.9% or +€43m yoy 7.9% 591 Organic variance -0.9% yoy; excluding regulation the underlying 548 50 business is growing 0.8% 0 48 48 18 29 146 +2.2% TV revenue +€11m yoy 149 Revenue contribution of Scarlet &Tango of €48m -6.3% Revenue increase partial
Slide 18: Enterprise Business Unit (EBU)
Enterprise Business Unit (EBU) Q1 2009 Results / EBU / EBU highlights / EBU voice / EBU Data / EBU Financials
Slide 19: EBU - Highlights
EBU - Highlights Reported revenue yoy -5.2%, incl. € -21m impact from divestments Organic revenue at -2% yoy Positive impact from growing mobile customer base, growing Advanced mobile subscribers good Telindus international result Financial offset by: performance lower mobile usage regulation impact
Slide 20: EBU - Highlights
EBU - Highlights Operational results: Very solid mobile net adds (30k), positively impacting the already strong market Business share performance Solid increase in Advanced Mobile data subscriptions Q109 shows strong growth in data center business (housing/hosting) Strong growth in Managed Network s
Slide 21: EBU - Voice - Fixed
EBU - Voice - Fixed Net line loss* (000) Economic downturn leads to some customers -9 1 -7 2 3 -8 4 5 reviewing their installed base of fixed voice lines -10 -15 Q 10 8 Q208 Q 3 08 Q 40 8 Q 10 9 V OIP Voice lines EOP* (000) P ST N 1,568 1,562 1,554 1,544 1,529 2 2 4 7 11 1,567 1,559 1,550 1,538 1,51
Slide 22: EBU - Voice - Mobile
EBU - Voice - Mobile Mobile customer growth - total (000) Strong Q109: 30k mobile customers added, up 1,065 1,093 1,116 1,139 1,170 yoy and versus Q408; +105k mobile customers 1,100 41 in one year 21 600 27 28 23 23 30 1 100 Q 108 Q208 Q3 0 8 Q4 0 8 Q10 9 1 2 3 4 5 Net Voice ARPU at € 42.1, includin
Slide 23: EBU - Data - Fixed
EBU - Data - Fixed Broadband growth & lines EOP (000) Broadband: 439 443 445 431 436 500 Yoy 14k customers added 400 BB customer gain impacted by progressive 300 saturation of the low-end fixed internet market 200 Stable Broadband ARPU despite competitive 11 5 4 100 environment 3 2 1 0 Q 10 8 Q208 Q
Slide 24: EBU - Data - Mobile
EBU - Data - Mobile Q108 Q109 Variance Strong subscriber growth for Advanced Data Mobile DATA revenue 39 43 10.8% …. Data - SMS 14 15 6.9% Mobile internet, PDA and push e-mail Advanced data 25 28 13.0% subscribers doubled compared to last % in Mobile Data revenue Data SMS 36% 35% year; Advanced data
Slide 25: EBU – ICT
EBU – ICT EBU executing its ICT strategy to become Belgium’s preferred ICT provider and be a reference in its European footprint Divestment of non-core countries: revenue loss of € 21m but exposure to economic downturn lowered positive impact on EBU remuneration cost for Q109: headcount reduced by 1
Slide 26: EBU Financials
EBU Financials TOTAL EBU Revenues (EUR mio) Revenue yoy -5.2%; impacted by divestment program. 675 -5.2% Organic yoy growth at -2%, including € -10m regulation impact 640 27 27 ICT 3% yoy organic growth (excl. € -21m from divestment program) 187 -8.5% 171 strong yoy increase from Datacenter services
Slide 27: Service Delivery Engine (SDE)
Service Delivery Engine (SDE) Q1 2009 Results / SDE / SDE highlights / SDE Financials / SDE Networks
Slide 28: SDE – Summary financial result – revenue
SDE – Summary financial result – revenue Summary financial result in million € Q108 Q208 Q308 Q408 Q109 Var. YoY Total Revenue 110 103 102 99 98 -10.6% Total Costs -129 -121 -113 -118 -114 -11.8% Total result SDE -20 -18 -11 -18 -16 - Segment contribution margin -18.0% -17.3% -11.0% -18.4% -16.5% Re
Slide 29: SDE costs & EBITDA
SDE costs & EBITDA YoY total operating expenses -11.8% Total Costs (EUR mio) -11.8% Lower Costs materials & charges to revenue -45.9% 129 YoY driven by: 114 Decline in low margin transit traffic 46 Less interconnection volumes from pay services 48 54 Personnel expenses -7.2% as lower headcount (-285
Slide 30: SDE – Mobile & Fixed Networks
SDE – Mobile & Fixed Networks Continued investment in high-quality network to support organic growth & acquisitions SDE invested € 98m in Q109 Belgacom’s FTTC coverage in top 5 worldwide Early investments in VDSL2 lead to 68.7% households covered -16,574 Remote Platforms installed (ROP) -13,741 km o
Slide 31: Staff & Support (S&S)
Staff & Support (S&S) Q1 2009 Results / S&S / S&S highlights & Financials
Slide 32: S&S - Highlights and summary financials
S&S - Highlights and summary financials Highlights Revenue decline of €2m YoY explained by one time gain booked in 2008 Lower Operating expenses related to emptied Proximus building. Renting and provision related to emptying the Proximus building no longer applicable for 2009 Summary financial resul
Slide 33: International Carrier Services (ICS)
International Carrier Services (ICS) Slide 33 Q1 2009 Results / ICS / ICS Financials / ICS Operationals
Slide 34: Revenue & Gross Margin overview
Revenue & Gross Margin overview Strong revenue increase continued in Q109. +17% compared to Q108 Strong growth in Voice volumes (+21% yoy). This positive effect on voice revenue was partly offset by decrease in mobile termination rates Volume driven revenue growth in non-voice (+11% yoy), mainly dri
Slide 35: Cost overview
Cost* overview Increase in HR related expenses reflecting the headcount increase required to sustain the mobile data growth Network expenses higher due to shift from European to more costly African & Asian voice business Lower costs due to positive exchange rate impact (mainly unrealised ) Cost stru
Slide 36: Operational Overview
Operational Overview Consolidation and outsourcing to increase leadership in carrier market Belgacom ICS will keep participating in the market consolidation by signing commercial outsourcing agreements and investigating selective M&A opportunities during the remainder of 2009. Increase value with or
Slide 37: Group Financials
Group Financials belgacom
Slide 38: Consolidated income statement
Consolidated income statement (EUR million) Q1 2008 Q1 2009 % Change Total Revenue 1,469 1,492 1.5% of which non-recurring revenues 0 0 Costs of materials and charges to revenue -469 -511 8.9% Personnel expenses and pensions -280 -281 0.5% Other operating expenses -202 -207 2.7% Non-recurring expens
Slide 39: Segment result
Segment result Revenues (EUR Mio) EBITDA (EUR Mio) 2 ,0 0 0 -5.1% +1.5% 1 ,8 0 0 518 492 1,469 1,492 7 00 1 ,6 0 0 6 00 14 185 217 19 1 ,4 0 0 9 7 110 98 5 00 1 ,2 0 0 324 4 00 306 1 ,0 0 0 675 640 3 00 8 00 2 00 6 00 287 268 4 00 1 00 548 591 2 00 0 -20 -16 0 -86 -84 1 - 00 2008 2009 2008 2009 CBU
Slide 40: FTE evolution per business unit
FTE evolution per business unit Clear positive impact from continuing headcount reduction programs, keeping personnel expenses flat year-over-year despite the 2008 salary indexation impact. YoY Belgacom Group headcount decrease of 566 FTE’s driven by: - Restructuring programs (-525 FTE) - Natural at
Slide 41: Investments per Business Unit
Investments per Business Unit €135m capex spent in Q109 or 9% of total 8.7% 9.1% revenues 160 128 135 140 2 3 €27m invested in Belgacom TV: settop boxes 1 6 120 & content (CBU) and TV platform (SDE) 100 SDE capex slightly decreased 6% yoy. SDE 80 98 capex spending Q109: 105 60 €13m Broadway leading
Slide 42: Free cash flow (in million €)
Free cash flow (in million €) FCF increased 30% yoy to € 288m, driven by: Growing cash-flow from operating activities with a favorable evolution of working capital mainly due to timing difference in the income tax payment compared to last year 288 222 Q108 Q109 Slide 42
Slide 43: Net financial position (EUR million)
Net financial position (EUR million) Belgacom continues to have a sound financial position with a net debt of EUR 1.6bn or a decrease of €263m compared to end 2008 ( 1,5 7 2 ) ( 18 ) (7) 288 ( 1,8 3 5 ) N e t de bt D e c e m be r FCF D iv ide nds O t he r N e t de bt M a rc h 2 0 0 9 2008 Slide 43
Slide 44: Balance Sheet
Balance Sheet 31-Dec 31-Mar (EUR million) 2008 2009 TOTAL ASSETS 7,782 8,004 Non-recurrent assets 5,564 5,515 Goodwill 2,111 2,113 Intangible assets with finite useful life 552 548 Property, plant and equipment 2,501 2,464 Enterprises accounted for under the equity method 0 2 Other participating int
Slide 45: Contact details Investor Relations
Contact details Investor Relations Belgacom Investor Relations e-mail: investor.relations@belgacom.be Tel: +32 2 202 82 41 http://www.belgacom.com Slide 45