Orange Belgium SA · EURONEXT:OBEL
Orange Belgium SA — FY2017 Earnings Presentation
41 slides from Orange Belgium SA's earnings presentation, February 2018
Slide 1: Orange Belgium 2017 Financial Results
Orange Belgium 2017 Financial Results Orange Belgium – FY 2017 Financial Results Analysts and Investors Roadshow presentation 1
Slide 2: Disclaimer
Disclaimer This presentation might contain forward-looking statements about Orange Belgium in particular for 2018. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently co
Slide 3: Section one: Business review
Section one Business review Orange Belgium – FY 2017 Financial Results Michaël Trabbia Orange Belgium, CEO 3
Slide 4: Orange Belgium delivered on all its 2017 commercial and financial targets
Orange Belgium delivered on all its 2017 commercial and financial targets LOVE convergent Total service customers revenues > 103 K € 1,110m Orange Belgium – FY 2017 Financial results +69k +1.5% Year-on-year Year-on-year Postpaid mobile Postpaid ARPU Total CAPEX Adjusted EBITDA customers € 30.0 € 188
Slide 5: Orange Belgium's key growth drivers
Orange Belgium’s key growth drivers 1 2 3 Orange Belgium – FY 2017 Financial Results Convergence Mobile data Customer monetization experience Double data with Shape & Fix Smartphone IoT/M2M B2C B2B B2C/B2B B2B Digital Orange transformation Thank You 5
Slide 6: Key convergent highlights of 2017
Key convergent highlights of 2017 Orange Belgium established itself as a convergent operator Launch of integrated Launch of LOVE convergent LOVE offer double data offer >100K convergent Orange Belgium – FY 2017 Financial results LOVE customers Q1 2017 Q2 2017 Q3 2017 Q4 2017 Implementation of Easy S
Slide 7: Orange LOVE exceeded the milestone of 100 thousand customers
Orange LOVE exceeded the milestone of 100 thousand customers ~50 % of all new LOVE customers in 2017 were new to Orange Belgium Orange Belgium – FY 2017 Financial Results 103 K Convergent customers 7
Slide 8: Convergent model drives mobile cross-selling
Orange Belgium’s convergent model drives mobile cross-selling Increased share of mobile convergent customers in total postpaid base LOVE customers +21 Convergent mobile customers 103 (% of total postpaid base) ~50 % 82K were new customers for 7.5 % Orange Belgium in 2017 64 7.0 % 50 7.0 % Orange Bel
Slide 9: Convergence in the B2B segment
Orange Belgium is also embracing convergence in the B2B-segment by understanding its customers and tailor products & services to their needs Segment Offer Go-to-market Corporate & Major Accounts Dedicated Service Level Agreements Direct sales Orange Belgium – FY 2017 Financial Results CMA Small & Me
Slide 10: Sales agreement with Orange Business Services
Orange Belgium & Orange Business Services signed a sales agreement with the objective of extending our B2B services Belgian convergent operator Global integrator of communications with strong local presence products and services Orange Belgium – FY 2017 Financial Results Enriched connectivity Mobile
Slide 11: Orange Belgium's key growth drivers
Orange Belgium’s key growth drivers 1 2 3 Orange Belgium – FY 2017 Financial Results Convergence Mobile data Customer monetization experience Double data with Shape & Fix Smartphone IoT/M2M B2C B2B B2C/B2B B2B Orange Digital Thank You transformation 11
Slide 12: Growing postpaid customer base and ARPU throughout 2017
Growing postpaid customer base and ARPU throughout 2017 Sustaining its sound position in a competitive mobile market NB-IoT/LTE-M network Launch of integrated reached 100% coverage convergent LOVE offer Launch of LOVE double data offer Launch of Panther Limited Orange Belgium – FY 2017 Financial res
Slide 13: 4G smartphone penetration increased
4G smartphone penetration increased to 59 % of total customer base Active smartphone penetration % of active smartphone users / total base Orange Belgium – FY 2017 Financial Results 68% 73% 55% 61% 2014 2015 2016 2017 Active 4G smartphone penetration % of active 4G smartphone users / total base 4G c
Slide 14: Average mobile data usage per month up
Average mobile data usage/month of smartphone users up by 35% yoy Data usage is an individual journey, but everyone seems to want more of it Orange Belgium’s average mobile data usage per month +35% Orange Belgium – FY 2017 Financial Results +55% +56% 1.800 1.670 1.690 1.530 +120% 1.330 1.290 1.140
Slide 15: Total data traffic increased year on year
Total data traffic increased by 43 % year on year in December 2017 88 % of total data consumption is 4G traffic 88 % 4G data 4G users 80 % Orange Belgium – FY 2017 Financial Results 4G data +1.7 million 59 % 62 % 4G 4G data Orange Belgium 4G launch Total traffic up 10 times 4G since 4G 3G launch 3G
Slide 16: Confirmed postpaid ARPU growth
Confirmed postpaid ARPU growth thanks to sound value management Postpaid ARPU growth in Q4 2017 +3.2% 8.8% Orange Belgium – FY 2017 Financial Results +2.7% 31 +1.0% 30.0 +1.1% 30 30.0 30.0 29.1 29.2 29.1 29.3 29 29.0 28.9 28.6 28 27.6 27 26 25 Q4 2016 European Incoming Billed Q4 2017 gross SMS ARPU
Slide 17: Leveraging years of IoT/M2M experience
Leveraging 15 years of IoT/M2M experience to seize the future With the arrival of big data and AI, IoT/M2M is coming at age 5G Orange Belgium – FY 2017 Financial Results 1,000 M2M SIM cards (in k) 950 950 55 895 900 859 37 850 826 832 27 6 800 779 47 756 22 750 737 19 700 17 1Q16 2Q16 3Q16 4Q16 1Q17
Slide 18: First nationwide network supporting Internet of Things
First nationwide network in Belgium to support Internet of Things Reaching immediately nationwide coverage both indoors and outdoors Orange Belgium – FY 2017 Financial Results Orange Belgium’s Narrow Band-IoT (NB-IoT) and LTE-M network can connect millions of everyday objects to the Internet as it i
Slide 19: Orange Belgium's key growth drivers
Orange Belgium’s key growth drivers 1 2 3 Orange Belgium – FY 2017 Financial Results Convergence Mobile data Customer monetization experience Double data with Shape & Fix Smartphone IoT/M2M B2C B2B B2C/B2B B2B Digital Orange transformation Thank You 19
Slide 20: Digital services used by customers
Orange Belgium’s digital services are being used by its customers By increasing customers’ satisfaction, Orange invests in customer loyalty MY 2 473 K ORANGE CLOUD 250 K ORANGE Orange Belgium – FY 2017 Financial results 3.140 2.891 2.639 2.392 2.178 1.940 1.633 Q216 Q316 Q416 Q117 Q317 Q417 Total di
Slide 21: Best-in-class digital experience
Meet customers expectations with a best-in-class digital experience Its all about customer experience, revenue growth & operational efficiency 2017 2018 2019-… Implementation & Run Design Phase Implementation Phase Phase This program aims at offering an integrated, omni-channel user experience: on t
Slide 22: Increasing usage of Big Data
Increasing usage of Big Data to better understand customers’ needs Orange Belgium is progressively rolling out a big data platform: Benefitting from the data provided by its network, sales, customer service and customers consumption patterns to optimize its offers. Orange Belgium – FY 2017 Financial
Slide 23: Orange Fab first season
Orange Belgium kicked off the first season of Orange Fab Open innovation driving mobile innovation International accelerator Orange Belgium – FY 2017 Financial Results Orange’s worldwide footprint 60 Subscriptions 3 selected scale ups Aiming at commercial synergies 23
Slide 24: Orange Thank You loyalty program
‘Orange Thank You’ develops customers that are more loyal Best Reward Loyalty program for both postpaid and prepaid customers Orange Thank You boosts the community feeling of Orange Belgium’s customers Orange Belgium – FY 2017 Financial Results Orange Thank You contributes to an improved Net Promote
Slide 25: Section two: Financial results overview
Section two Financial results overview Orange Belgium – FY 2017 Financial Results Arnaud Castille Orange Belgium, CFO 25
Slide 26: Financial results overview
Total service revenues Adjusted EBITDA € 1,110 m € 302m +1.5 % +0.7 % Orange Belgium – FY 2017 Financial results Year-on-year Year-on-Year (on a like-for-like basis) Total CAPEX Net debt € 188m € 313m +12.4 % Core CAPEX -7.4 % € 142m -4.8% Year-on-year Year-on-year 26
Slide 27: Growing total service revenues
Growing total service revenues with +1.5 % yoy (+5 % yoy excl. EU roaming) despite less MVNO revenues, less incoming SMS revenues but thanks to more billed services, more visitor roaming and more fixed revenues Services revenues year-on-year evolution in million euros 5.0% 1,110.1 15.9 -9.2 Orange B
Slide 28: Adjusted EBITDA evolution
Strong underlying performance thanks to solid revenue and cost control Adjusted EBITDA evolution in million euros -4.3% 315.7 +0.7% Orange Belgium – FY 2017 Financial Results -15.5 300.2 302.2 46.0 -39.9 28.2 FY 2017 -31.9 Adjusted EBITDA 268.2 -0.3 €302.2m 27.2 % of Total service rev. -4.3 % (yoy)
Slide 29: Total capex up year on year
Total capex up by 12 % yoy, mainly linked to increasing cable volumes Further network investment normalization after accelerated 4G roll-out 17.0% 15.3% FY 2017 Total CAPEX Orange Belgium – FY 2017 Financial Results +12.4% € 188m 188.4 • +12.4 % yoy 167.6 46.8 18.9 • 17.0 % of total service revenues
Slide 30: Orange Belgium key financials
Orange Belgium key financials Strong underlying results balanced by MVNO, EU roaming and cable impact in €m FY 2017 FY 2016 Var. (%) Insight • Mobile service revenue growth despite €9m lower MVNO Total service revenues 1,110.1 1,093.3 +1.5% revenues and €36m roaming impact, thanks to strong mobile d
Slide 31: Consolidated net income impacted by goodwill impairment
Consolidated net income impacted by goodwill impairment Declining net financial debt thanks to solid cash flow generation in €m FY 2017 FY 2016 Var. (%) Insight Reported EBITDA 312.0 317.1 -1.6 % Orange Belgium – FY 2017 Financial Results • Depreciations higher mainly due to the depreciation of the
Slide 32: Section three: 2018 guidance
Section three 2018 guidance Orange Belgium – FY 2017 Financial Results 2018 financial guidance and outlook Dividend proposal 32
Slide 33: 2018 financial guidance highlights
2018 financial guidance highlights growth of retail business monetization of mobile network & sustained focus on operational efficiency 2018 Guidance Total service revenues To grow vs. 2017 Adjusted EBITDA 280-300€m Orange Belgium – FY 2017 Financial Results Core capex excl. cable Stable vs. 2017 Ou
Slide 34: Proposal to pay dividend of 0.50 euro
Proposal to pay dividend of 0.50 euro for financial year 2017 Maintaining a balanced and sound financial position Orange Belgium aims to provide an appropriate cash returns to equity holders while maintaining a balanced and sound financial position, thereby leaving sufficient Orange Belgium – FY 2
Slide 35: Bold challenger positioning
Adopting a bold challenger positioning, focusing on what’s essential for our customers. Orange LOVE @ 39€ Orange Belgium – FY 2017 Financial Results Panther Limited Edition And …. 35
Slide 36: First unlimited mobile subscription in Belgium
Orange Belgium launches the first unlimited mobile subscription in Belgium Orange Belgium – FY 2017 Financial Results 36
Slide 37: Section four: Q&A
37 Q&A Section four Orange Belgium – FY 2017 Financial Results
Slide 38: Key financial figures
Appendix 1 Key financial figures Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 ORANGE BELGIUM GROUP – Key financial figures Orange Belgium – FY 2017 Financial Results Total service revenues in mio EUR 274,8 281,8 279,5 274,0 277,7 275,3 267,9 272,4 Mobile service revenues in mio EU
Slide 39: Orange Belgium's figures
Appendix 2 Orange Belgium’s figures Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2017 2017 2017 2017 2016 2016 2016 2016 ORANGE BELGIUM Mobile services Orange Belgium – FY 2017 Financial Results Mobile retail customers (excl. MVNO) in thousand 3,854.6 3,789.8 3,779.0 3,759.1 3,796.5 3,770.5 3,779.7 3 766.6 Mobile custom
Slide 40: Orange Luxembourg's figures
Appendix 3 Orange Luxembourg’s figures Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 2017 2017 2017 2017 2016 2016 2016 2016 ORANGE LUXEMBOURG Orange Belgium – FY 2017 Financial Results Mobile services Mobile retail customers (excl. MVNO) in thousand 183.3 181.4 178.3 164.9 159.3 154.5 148.1 142.4 Mobile customers (excl.
Slide 41: Investor Relations
Investor Relations Orange Belgium – FY 2017 Financial Results Siddy JOBE Director siddy.jobe@orange.com Treasury & Investor Relations +32 2 745 80 92 @PressOrangeBE https://www.linkedin.com /company/orange-belgium https://corporate.orange.be 41