Proximus Sa · EURONEXT:PROX
Proximus Sa — Q3 2022 Earnings Presentation
46 slides from Proximus Sa's earnings presentation, Oct 28, 2022
Slide 1: Proximus Group Results presentation Q3 2022
Proximus Group Results presentation Q3 2022 28 October 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 Q3 • #inspire2022 strategy • Financial & Operational performance • Appendix
Slide 4: Key events Q3
4 Key events Q3
Slide 5: Delivering +7.8% Group revenue growth for Q3, continued commercial traction & EBITDA growth
Group 5 Delivering +7.8% Group revenue growth for Q3, continued commercial traction & EBITDA growth. Accelerated revenue Key strategic Continued strong growth in Q3. developments commercial traction 7.8% • 1,124K Fiber HP or +93K in Q3 Revenue YoY • Fiber-PPP German-speaking +6K +27K 3.6% Fiber acti
Slide 6: Strong revenue & Direct Margin growth for all segments
6 Group 6 Strong revenue & Direct Margin growth for all segments. Revenue Direct Margin 7.8% 4.9% (underlying, €M) 43 38 1,510 11 8 939 40 25 1,400 -11 895 0 +3.6% +16.4% +44.0% +3.1% +17.6% +40.1% Q3’21 Domestic BICS Telesign Elims Q3’22 Q3’21 Domestic BICS Telesign Elims Q3’22 Revenue Opex Ebitda
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: La Fibre 10 Gbps
Group 8 Product superiority leaps forward by 10 Gbps Introducing 10 Gbps across 5 cities La Fibre Nation-wide upgrade by summer 2023 10 Gbps* Network was built 10 Gbps ready * By far the fastest network in Belgium
Slide 9: Continuously improving product portfolio, supporting strong NPS trends for all brands
Group 9 Continuously improving product portfolio, supporting strong NPS trends for all brands Contact center volumes c. -10% down YoY Q3’21 Q3’22 Launch of 10 Gbps Fiber offer Convergent customers Convergent Proximus Pickx will broadcast the new season of 'The 16 18 20 21 23 43 46 13 17 Handmaid's T
Slide 10: Skinny offers successfully addressing evolving needs of certain customer segments
Group 10 Skinny offers successfully addressing evolving needs of certain customer segments BB + Mobile Uptake of skinny offers Budget family-offer within the Proximus family Convergent customers Mobile Vikings bringing Mar’22 Apr’22 Mei’22 Jun’22 Jul’22 Aug’22 Sep’22 Fixed Internet offer to the Belg
Slide 11: 19% fiber coverage end-September, well on track to meet year-end target of 22%
11 Group 11 19% fiber coverage end-September, well on track to meet year-end target of 22% Proximus Fiberklaar Unifiber 77 Cities 22% Fiber coverage target end-2022
Slide 12: 1,124M Fiber Homes Passed end-September, +93K added
Group 12 1,124M Fiber Homes Passed end-September, +93K added during summer holiday period. Fiber Homes & Businesses Passed 7.1k 22% (in K) weekly rollout Network filling rate* (rounded, HP) 64% 1,124 +42% 1,200 1,031 250 1,000 909 813 200 800 686 22% 150 600 9,700 9,400 21% 100 20% 7,300 7,100 400 1
Slide 13: Fiber deployment in the German-speaking Community through PPP
Group 13 Fiber deployment in the German-speaking Community through PPP PPP - Ethias, GSC & Proximus: PPP "Glasfaser Ostbelgien company", brand name "GOFiber" Ambition to cover c. 40K LUs (nearly all premises) Roll-out Build to start in 2023 until 2026 € 130-140M funding need of which Funding • € 40M
Slide 14: Strong customer demand for Fiber: 220k activated Fiber lines end Q3
Group 14 Strong customer demand for Fiber: 220k activated Fiber lines end Q3 Fiber park & net adds* Increasing Fiber share Lower churn (in K) in total acquisitions levels +75% 220 194 Q3’21 Q3’22 Copper Fiber 170 146 126 ARPC in € (Res) 68% Fiber uplift 27 Migration rate 25 23 15 20 (1 year post Cop
Slide 15: Innovative 5G network slicing successfully tested
Group 15 Innovative 5G network slicing successfully tested New important milestone in our ambition to build the best network for Belgium and bring next-generation experiences to our customers Proximus one of Network slicing will the first operators worldwide to result in substantial successfully tes
Slide 16: Net-Zero targets scientifically validated by SBTi
Group 16 Net-Zero targets scientifically validated by SBTi 1st large Belgian company and the 3rd telco worldwide Targets validated by the SBTi (Science Based Targets initiative) Overall ✓ Net-zero greenhouse gas (GHG) emissions across the value chain by 2040 Near-Term ✓ Reduce absolute the scope 1 G
Slide 17: Financial & Operational performance
17 Financial & Operational performance
Slide 18: Domestic
18 Domestic
Slide 19: Growing Internet & Mobile base
19 Domestic 19 Growing Internet & Mobile base. Emerging trend towards products with no TV subscription reflected in a changing acquisition mix. Postpaid Internet base 2,207K; TV base 1,718K; Postpaid base 4,775K; Fixed Voice 1,863K; + 44k YoY + 11k YoY + 177k YoY -186k YoY +2.0% YoY +0.6% YoY +3.8%
Slide 20: Flex convergent offers at 1,055K subscribers
Domestic 20 Flex convergent offers at 1,055K subscribers. Flex subscriptions* (in K) 1,006 1,055 922 835 741 1,006 1,055 835 922 741 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 *Number of Flex packs include both Residential & Business Customers
Slide 21: Residential revenue Q3 +3.0%, including +2.8% for Customer Services Revenue
Residential 21 Residential revenue Q3 +3.0%, including +2.8% for Customer Services Revenue Residential revenue (€M, YoY ) 3.6% 4.3% 3.0% 2.1% 1.9% • Inorganic contribution Mobile Vikings 553 572 553 562 570 fully annualized 50 68 53 57 54 • Customer Services revenue growth sequentially improving fro
Slide 22: Residential customer services revenue +2.8% YoY, with ARPC up +3.5%
Residential 22 Residential customer services revenue +2.8% YoY, with ARPC up +3.5% Customers (in K) ARPC (overall, €) Customer services Growing Convergent base, Supported by Jan’22 & May’22 revenue (in €M) +12,000 net adds in Q3 or +5.7% YoY price indexation & upsell to convergent offers. Incl. +8.1
Slide 23: Q3'22 Business revenue +3.7%
Business 23 Q3’22 Business revenue +3.7%, Including strong IT products revenue and well managed services revenue Business revenue (€M, YoY ) Q3 results 3.7% 1.0% 0.6% Services revenue -0.6%, -2.3% -1.6% growth in Fixed Data and Mobile off-set by Fixed Voice erosion. 454 477 459 468 471 Products reve
Slide 24: Continued B2B transformation with good momentum in Fixed Data
Business 24 Continued B2B transformation with good momentum in Fixed Data, balancing competitive pressure and legacy erosion Business Services revenue (€M) • +3.9% Fixed Data - Internet supported by pricing, while managing value in the -0.6% transition to SD-WAN services. 396 394 72 66 • +0.8% Mobil
Slide 25: Wholesale continued positive track for Services revenue
Wholesale 25 Wholesale continued positive track for Services revenue, benefitting from open network approach Wholesale revenue (€M, YoY ) 1.1% 3.3% -0.7% -2.3% -10.6% • Fixed & Mobile Services revenue +17.3%: ✓ rising number of MVNO customers, 72 75 70 70 72 ✓ more roaming revenue ✓ increasing JV se
Slide 26: Sustained domestic revenue growth, accelerating to +3.6% YoY
26 Domestic 26 Sustained domestic revenue growth, accelerating to +3.6%YoY excl. terminals +3.4% (underlying, €M) 3.6% 1,125 1,085 19 1,055 13 6 1,020 -2 +3.4% excl. terminals Q3’21 Terminals Q3’21 Residential Business Wholesale Non-Services Q3’22 Terminals Q3’22 (Residential & excl. Customer Servic
Slide 27: Inflationary impacts, customer and transformation costs partially off-set by cost efficiencies
Domestic 27 Inflationary impacts, customer and transformation costs partially off-set by cost efficiencies (underlying, €M) Domestic Opex (€M) 5.9% 5.9% 11 418 12 395 418 Q3’21 WF Non-WF Q3’22 395 Domestic headcount (FTE) -161 10,565 10,403 Q3’21 Inflation Customer Transformation Lower Q3’22 Headcou
Slide 28: International
28 International
Slide 29: BICS continued strong EBITDA growth, +23.8% in Q3
29 BICS 29 BICS continued strong EBITDA growth, +23.8% in Q3 BICS revenue +16.4% YoY • Core +13.4% Revenue (€M, YoY ) Increased post-Covid-19 traveling • Growth +44.3%: 16.4% 12.6% 9.0% 11.2% Strong cloud communication 4.5% 307 • Legacy: +16.2% 263 259 245 270 118 Core Summer travel catch up & favor
Slide 30: Telesign Q3 revenue +44.0%, another milestone in its growth journey
30 Telesign 30 Telesign Q3 revenue +44.0%, representing another milestone in its growth journey. Q3 DM trending better than initial ‘22 growth plan Revenue (€M, YoY ) +24.4% in CC • Digital Identity revenue & DM increasing on strong volume growth (new & existing customers) • Communications revenue &
Slide 31: Group
31 Group
Slide 32: Multiple safeguards in place to manage inflation, challenges being actively monitored
Group 32 Multiple safeguards in place to manage inflation, challenges being actively monitored. *Based on 2021 figures **Commodity price
Slide 33: YTD Domestic Revenue & Group EBITDA outperforming
33 Group 33 YTD Domestic Revenue & Group EBITDA outperforming Revenue Direct Margin 5.2% 4.0% 92 4,351 29 23 2,787 73 81 58 4,137 -32 2,679 -1 YTD Domestic BICS Telesign Elims YTD YTD Domestic BICS Telesign Elims YTD Q3’21 Q3’22 Q3’21 Q3’22 Revenue Opex Ebitda 7.6% 0.6% 37 1,416 17 53 11 1,371 1,316
Slide 34: Capex tracking on plan, with year-to date €841M
34 Group 34 Capex tracking on plan, with year-to date €841M. Group Capex €M, excl. spectrum & football rights +14.2% 841 736 • Strong YOY increase in Proximus Fiber HP • Increase in Fiber customer termination and activation cost • IT-transformation and Digitalization • Ongoing implementation of Mobi
Slide 35: YTD FCF reflects accelerated Fiber investments and unfavorable BWC
Group 35 YTD FCF reflects accelerated Fiber investments and unfavorable YoY evolution of BWC (€M) 17 10 28 1 132 408 8 276 -241 Incl. Fiber investments & spectrum auction 15 82 69 deposits -165 -13 YTD Q3’21 Acquisitions FCF Underlying Income Interest Early Fiber Cash AP/AR/ Other FCF Acquisitions Y
Slide 36: 2022 outlook
Group 36 2022 outlook Raising Domestic revenue guidance; Group EBITDA to be at upper-end of range. Outlook Revised YTD Sep. Revised Guidance metrics Outlook Outlook FY 2022 29 July 2022 2022 28 October 2022 Underlying Domestic revenue Growing by Growing Growing up to 1% YoY +2.5% YoY excl. Terminals
Slide 37: Save the date: Capital Markets Day
37 Save the date: Capital Markets Day Monday 16 January 2023
Slide 38: Q&A Join the conference call
38 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 17629917#
Slide 39: Appendix
39 Appendix
Slide 40: From reported to underlying
40 Appendix 40 From reported to underlying GROUP GROUP GROUP GROUP Revenue EBITDA Revenue EBITDA (EUR million) Q3 '21 Q3 '22 Q3 '21 Q3 '22 YTD '21 YTD '22 YTD '21 YTD '22 Reported 1,401 1,511 466 469 4,138 4,355 1,403 1,407 Adjustments -1 -1 -9 -10 -1 -4 -40 -37 Underlying 1,400 1,510 457 460 4,137
Slide 41: EBITDA conversion to FCF
Appendix 41 EBITDA conversion to FCF (€M) 1,407 25 1,371 -62 -127 34 82 69 -1,101 -30 -30 -36 -13 Reported Lease Incidentals Underlying AP/AR/ Cash Fiber Interest Early Leave Others FCF Acquisitions FCF Ebitda depreciations Ebitda Inventory Capex equity payments Plan/FFP YTD’22 2022 YTD’22 YTD’22 an
Slide 42: Net income (Group share)
Appendix 42 Net income (Group share) (€M) +3.5% 12 1 369 8 -2 -4 356 -4 YTD Q3’21 Underlying Adjustments D&A Net Tax expense Others (*) YTD Q3’22 Ebitda finance result * Includes Non-controlling interests and Share of loss from associates
Slide 43: Proximus continues to manage a sound financial position
43 Proximus continues to manage a sound financial position Adjusted Net Financial Position (excl. lease liabilities) (YTD, €M) Credit ratings S&P A- (stable outlook) Moody’s A1 (stable outlook) 69 187 1.64 % -2,740 -2,710 -226 * Weighted average coupon Net fin Free Cash Dividends Other Net fin (long
Slide 44: ... and secured its long term debt
44 … 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 400 750 Q1 2022 at low interest 600 500 rates. 315 11 150 150 100 100 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 // 2036 /
Slide 45: Shareholder structure
Appendix 45 Shareholder structure Status 30/09/2022 Total number of shares Free-float Belgian Government Market Capitalization Dividend yield 338,025,135 42% 54% ~€ 3.4Bn ~11.3% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with divi
Slide 46: Contact Investor Relations
46 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