Orange Belgium SA · EURONEXT:OBEL
Orange Belgium SA — Q2 2018 Earnings Presentation
29 slides from Orange Belgium SA's earnings presentation, 2018
Slide 1: Orange Belgium Financial Results Q2 2018
Orange Belgium Financial Results Q2 2018 Bold Challenger Orange Belgium – Q2 2018 Financial Results Analysts and Investors Roadshow presentation Full Unlimited 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 – Q2 2018 Financial Results Michaël Trabbia Orange Belgium, CEO 3
Slide 4: Orange Belgium confirms its commercial success as a Bold Challenger
Orange Belgium’s confirms its commercial success as a Bold Challenger Convergent LOVE Retail service Y o customers revenues Y 136 K € 370m H1 2018 ) +14k Orange Belgium – Q2 2018 Financial Results +6.7% Quarter-on-quarter Year-on-year Mobile contract ARPO Adjusted EBITDA Total CAPEX customers € 77m
Slide 5: Orange Belgium's key growth drivers - the bold challenger
Orange Belgium’s key growth drivers - the bold challenger 1 2 3 Orange Belgium – Q2 2018 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: Orange LOVE has already attracted thousand B2C & B2B customers
Orange LOVE has already attracted 136 thousand B2C & B2B customers and keeps enriching its offer Launch of Love Unlimited 136 K B2C Convergent customers Orange Belgium – Q2 2018 Financial Results 1.5x SIM cards per convergent customer 73.7 € / +2.4 % yoy ARPO* B2C convergent customers Now also avail
Slide 7: Orange Belgium's 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 +71 Convergent mobile customers 136 K as % of mobile contract customer base (Belgium) ~40 % of gross adds 103 122 were new customers for 10.0% 82 Orange
Slide 8: The new wholesale regulation was decided end of June 2018
The new wholesale regulation was decided end of June 2018 Improved wholesale pricing and better SLAs and operational model Orange Belgium – Q2 2018 Financial Results EC: As of 1st of August •Implementation of intermediary pricing Emphasized the need to stimulate more structural, long-term competit
Slide 9: Orange Belgium's key growth drivers - the bold challenger
Orange Belgium’s key growth drivers - the bold challenger 1 2 3 Orange Belgium – Q2 2018 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 9
Slide 10: Streamlined portfolio of postpaid subscriptions to improve customer mix
Streamlined portfolio of postpaid subscriptions to improve customer mix Unlimited data as from 40€ - Unlimited calls as from €20 Orange Belgium – Q2 2018 Financial Results 10
Slide 11: 4G smartphone penetration increased
4G smartphone penetration increased to 65 % of total customer base Orange Belgium invested heavily to offer its customers a top 4G network Active smartphone penetration % of active smartphone users / total base Orange Belgium – Q2 2018 Financial Results 70% 79% 56% 63% 48% 4G coverage: 99.9% EoP 2Q1
Slide 12: Avg mobile data usage of smartphone users accelerated to +46% YTD
Avg mobile data usage of smartphone users accelerated to +46% YTD The launch of more abundant offers has stimulated data usage in H1 2018 Orange Belgium’s average mobile data usage per month +46% Orange Belgium – Q2 2018 Financial Results +35% +26% +55% Thanks to: • Eagle unlimited Abundant data tar
Slide 13: Growth in total mobile data traffic re-accelerated to +77% yoy
Growth in total mobile data traffic re-accelerated to +77% yoy thanks to increase smartphone customer base and individual usage 91 % 4G data 4G users 84 % 4G data 1.9 million Orange Belgium – Q2 2018 Financial Results 65 % of 72 % 4G total base Orange Belgium 4G data 4G launch Total traffic up >10 t
Slide 14: Sound mobile only ARPO growth thanks to customer mix improvement
Sound mobile only ARPO growth thanks to customer mix improvement despite impact of EU-roaming Mobile only contract excl. M2M ARPO (in €) -0.9% 21.5 21.9 21.2 21.1 21.3 Orange Belgium – Q2 2018 Financial Results Mobile only blended excl. M2M ARPO (in €) +1.5% 18.1 18.6 18.2 18.1 18.4 Q2 17 Q3 17 Q4 1
Slide 15: Mobile contract net adds picked up in the second quarter
mobile contract net adds picked up in the second quarter: +26K qoq supported by convergent and attractive mobile only offers Quarterly customer base evolution (in ‘000) Quarterly net adds (in ‘000) +90 +5 180 29 B2C Mobile convergent 163 14 26 137 21 109 89 15 Orange Belgium – Q2 2018 Financial Resu
Slide 16: Orange Belgium continues to build strong IoT partnerships
Orange Belgium continues to build strong IoT partnerships First commercial offer on Orange Belgium’s mobile IoT network launched Orange Belgium – Q2 2018 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 is de
Slide 17: Orange Belgium and Medialaan signed a full MVNO agreement
Orange Belgium and Medialaan signed a 5 year full MVNO agreement adding 365k customers to its network as of spring 2019 Medialaan is the largest Flemish broadcaster Orange Belgium – Q2 2018 Financial Results This full MVNO agreement is more than just a contract. It is the start of a strong long-term
Slide 18: Orange Belgium's key growth drivers - the bold challenger
Orange Belgium’s key growth drivers - the bold challenger 1 2 3 Orange Belgium – Q2 2018 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 18
Slide 19: First Belgian provider to activate Voice over Wifi / Voice over LTE
Orange is the 1st Belgium provider to activate Voice over Wifi / Voice over LTE comprehensive solutions to guarantee indoor coverage for all customers Voice over Wifi Voice over LTE Femto solution Orange Belgium – Q2 2018 Financial Results This technological innovation is part of Orange Belgium’s st
Slide 20: Section two: Financial results overview
Section two Financial results overview Orange Belgium – Q2 2018 Financial Results Arnaud Castille Orange Belgium, CFO 20
Slide 21: Financial results key figures
Retail service revenues Adjusted EBITDA € 370m H1 2018 € 127m H1 2018 +6.7% -13.1% Orange Belgium – Q2 2018 Financial Results Year-on-year Year-on-year Total CAPEX Net debt € 77m H1 2018 € 305m +0.1 % Core CAPEX -7.5% € 56m H1 2018 +9.3 % Year-on-year 21 Year-on-year
Slide 22: Revenue growth is picking up thanks to increase of retail service revenues
Revenue growth is picking up thanks to increase of retail service revenues Retail service revenues, split in categories (in €m) +6.7% 370 347 19 45 +7.2% Orange Belgium – Q2 2018 Financial Results 176 189 Revenues (€m), split in categories 10 24 306 303 +2.0% 154 153 607 620 10 10 21 20 Q2 17 Q2 18
Slide 23: Strong underlying performance thanks to solid revenue and cost control
Strong underlying performance thanks to solid revenue and cost control, impacted by € 23m lower MVNO revenues and € 16m EU roaming impact Adjusted EBITDA evolution in million euros -13.1% -3.5 % 27 H1 2018 - Increase of retail service revenues Orange Belgium – Q2 2018 Financial Results - Increase of
Slide 24: Total capex under control with cable capex efficiency increasing
Total capex under control with cable capex efficiency increasing Increase of core capex is explained by seasonality 12.7% 12.5% +0.1% H1 2018 77.2 77.3 Total CAPEX Orange Belgium – Q2 2018 Financial Results € 77.3m 26.0 21.3 • +0.1 % yoy +9.3% • 12.5 % of revenues Core CAPEX 51.2 56.0 € 56.0m • +9.3
Slide 25: Net financial debt decreased to reach €305m
Net financial debt decreased 25 million euros yoy to reach € 305m implying a sound net financial debt / Reported EBITDA ratio of 1.1x. (in million euros) 519 500 457 408 418 -25 2.0 370 1.9 338 330 Orange Belgium – Q2 2018 Financial Results 1.7 315 324 313 305 288 296 1.3 1.4 1.1 1.1 1.1 0.9 1.0 1.0
Slide 26: Section three: 2018 guidance
Section three 2018 guidance Orange Belgium – Q2 2018 Financial Results 2018 financial guidance and outlook Dividend proposal 26
Slide 27: 2018 financial guidance reiterated
2018 financial guidance reiterated 2018 Q1 2018 Q2 2018 H1 2018 Guidance Revenues To slightly grow vs. 2017 +0.9% +3.1% +2.0% Adjusted EBITDA 275-295 mio€ 60.6 66.7 127.3 Orange Belgium – Q2 2018 Financial Results Core capex excl. cable Stable vs. 2017 21.2 /+2.4 % yoy 34.7 / +14.0 % yoy 56.0 / +9.3
Slide 28: Q&A
28 Q&A Section four Orange Belgium – Q2 2018 Financial Results
Slide 29: Investor Relations
Investor Relations Orange Belgium – Q2 2018 Financial Results Siddy JOBE Director siddy.jobe@orange.com Treasury & Investor Relations +32 2 745 80 92 @PressOrangeBE 2018 https://www.linkedin.com /company/orange-belgium https://corporate.orange.be 29