Slide 1: Q3 2014 Results - Analyst & Investor Presentation
Q3 2014 Results - Analyst & Investor Presentation Mobistar always in touch*
Slide 2: *in touch idiom definition
*in touch /in tAt{/ <idiom> 0.1 Fig. in communication with someone or a group. 0.2 Fig. having good contact or rapport with someone or something. 0.3 Fig. possessing up-to-date information.
Slide 3: Forward-looking statements
This presentation contains forward-looking statements about Mobistar, in particular for 2014. Although Mobistar believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to us or no
Slide 4: Mobistar's Transformation: Accelerating Momentum
Mobistar’s Transformation: Accelerating Momentum 4
Slide 5: Agenda
Agenda • Key Highlights • Operational Update • Financial Review • Financial Outlook 2014 Jean Marc Harion Ludovic Pech Siddy Jobe Chief Executive Officer Chief Financial Officer Director Investor Relations 5 & Corporate Finance
Slide 6: Key Highlights
Key Highlights Jean-Marc Harion ‘Mobistar’s progress confirms our path is right and we remain reasonably optimistic going forward’ 6
Slide 7: Key achievements in the first 9 months of 2014
Key achievements in the first 9 months of 2014 Mobistar’s postpaid customer base back to growth in Q3 Mobistar’s retail customer base in Belgium increased sequentially by 55,267 in the third quarter, sustained by network quality and 4G launch. The postpaid net additions turned back positive in the t
Slide 8: Mobistar is delivering on its transformation program
Mobistar is delivering on its transformation program Leadership in Mobile Our network #1 Best 4G network in Belgium N° 1 in B2C postpaid customers quality recognized Pioneer in Disruptive Convergence Our cable offers on N° 1 provider of regulated cable N° 1 vendor of 3.0 mobile Connectivity track fo
Slide 9: We now operate the best 3G network in Belgium
Leadership in Mobile We now operate the best 3G network in Belgium 99,9% 9 Mbps Average outdoor download coverage speed #1 indoor coverage #1 3G Voice quality 9
Slide 10: ... and the best 4G network in Belgium too
Leadership in Mobile … and the best 4G network in Belgium too #1* #1* 4G outdoor deep indoor Coverage (81 %) Coverage (53 %) Extended ~400K 4G range of 4G Mobistar 4G devices & tariff customers plans 10 * #1 coverage position is confirmed by the Commsquare study of June 2014
Slide 11: 4G launches @Mobistar
Leadership in Mobile 4G launches @Mobistar Nov 13 March 14 April 14 May 14 May 14 End 15 4G@BXL 4G 4G 4G 4G + 4G 4G Discovery: Commercial Roaming in 99% indoor Mobistar launch: in France Mechelen coverage in coverage Customers Fastest Spain Speed up Brussels = experiencing network in Luxemburg to 21
Slide 12: Mobistar's 4G is a service not just a technology
Leadership in Mobile Mobistar’s 4G is a service not just a technology #1indoor coverage + 4G attractive tariffs 4G in all Animal TP with data as from10€ from10€ best offers: “Osez comparer” in November activation: No need to do anything to get 4G. roaming: 4G available 7 European countries #1 in 4G
Slide 13: Mobistar first mobile network in Belgium
Leadership in Mobile Mobistar first mobile network in Belgium 5.44m SIM cards connected and an increasing retail customer base •Mobistar Group 5,006 5,095 5,130 5,178 5,253 5,446 5,543 •Belgium, incl. MVNO 4,900 4,990 5,028 5,075 5,150 5,345 5,444 70,1% 70,5% 71,1% 70,7% 7.500 68,6% 69,1% 69,6% 7.00
Slide 14: Mobistar postpaid net adds turned positive
Leadership in Mobile Mobistar postpaid net adds turned positive boosted network market share underlining its network leadership Network market net adds split Mobistar network net adds split (k users) and mobile penetration (k users) 113% 114% 112% 113% 154 141 199 106 195 101 1 94 31 69 68 19 Increa
Slide 15: Panther 60 for international commuters
Leadership in Mobile Panther 60 for international commuters preempting change in European roaming • 5% of Postpaid activations after a few weeks • exclusive 4G roaming included in 7 EU-countries 15
Slide 16: Shape: a new portfolio for B2B customers
Leadership in Mobile Shape: a new portfolio for B2B customers abundance “for all”, per company seat Mobile Voice for all Mobile Data for all Applications Tablets MDM Shape & Fix Telephony Best Mobile Network 16
Slide 17: Have a nice day: our customers are special
Best Customer Experience Have a nice day: our customers are special, let’s surprise them! 17
Slide 18: New @Mobistar stores and concept stores
Best Customer Experience new @Mobistar stores and concept stores 80 shops refitted by end of 2014, to improve customer journey 18
Slide 19: We adapt our channels to new market conditions
Best Customer Experience we adapt our channels to new market conditions direct: reinforced, refit & digitalized .be exclusive: transformed, integrated, regionalized …or acquired MLM ex- ex- multibrand: 19 refocused
Slide 20: Mobistar to launch 1st regulated offers end of 2014
Pioneer in Disruptive Convergence Mobistar to launch 1st regulated offers end of 2014 but regulators should ensure technical, operational and financial improvements. 6 month implementation new market analysis + period by cable operators retail minus price review 09/2013 12/2013 01/2014 Validation &
Slide 21: Mobistar cable: a game changer in Belgium
Pioneer in Disruptive Convergence Mobistar cable: a game changer in Belgium a simple “plug and play” customer experience Ultra-fast Digital TV Internet + 21
Slide 22: ACE program
Best Industry Efficiency ACE program: > €43m net opex savings realized in first 9 months of 2014, out of €50m FY target • closing open distribution channels (on-going) DIRECT • roll-out of the @Mobistar concept (on-going) COSTS + • process & organization simplification (on-going) LABOUR • IT outsour
Slide 23: Financial Review
Financial Review Ludovic Pech ‘We will carry on our determined work to fundamentally transform this company and its cost structure’
Slide 24: Key financials
key financials consistent with full year guidance and sequentially improving in €m 9M 14 9M 13 Var. insight • sequentially improving trend each quarter Service revenues 838.1 962.7 -12.9 % • €27.7m regulatory impact end of September • €46m handset sales decrease Consolidated turnover 933.6 1,104.4 -
Slide 25: Regulatory impact
regulatory impact MTR cut in Luxembourg combined with EU roaming impact FY 2012 9M 13 9M 14 FY 14 20 20 26 MTR impact in 29 Revenues 8 Luxembourg only 25 28 11 impact 30 37 EU roaming in 45 both Belgium 59 and Luxembourg FY 2012 9M 13 9M 14 FY 14 15 14 20 19 EBITDA 5 impact 11 19 7 13 26 26 33 EU Ro
Slide 26: Consolidated turnover
consolidated turnover 59% of revenues decline on handset sales and fix (relative margin impact) consolidated turnover in million euros -143,2 1.104,4 ( -13,3%) 13,3%) 1.076,7 -27,7 -83,0 -27,3 13,4 -46,3 933,6 9M 2013 regulatory 9M 2013 excl. service service MVNO handset 9M 2014 actuals impact regul
Slide 27: Consolidated turnover
consolidated turnover 43 % of revenue decline due to handset and fixed sales (relative margin impact) consolidated turnover in million euros -143,2 (-13,0%) 13,0%) 1.104,4 961,2 933,6 -83,0 -27,3 13,4 -46,3 -27,7 9M 2013 service service MVNO Handset 9M 2014 excl. Regulation 9M 2014 actuals revenues
Slide 28: Blended ARPU evolution (Belgium)
blended ARPU evolution (Belgium) the ARPU stabilization is confirming itself Quarterly ARPU(a) in euro per month per user -3.8% -6.9% -9.9% 26.0 25.7 24.9 24.0 23.9 23.4 23.9 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 28 (a) excluding MVNOs and M2M cards revenues.
Slide 29: Restated EBITDA evolution
restated EBITDA evolution cost savings compensating most of revenues erosion but regulatory and tax restated EBITDA in million euros 275.3 11.5 -17.2 6.1 217.7 -18.9 -170.9 131.8 236.6 9M 2013 revenues direct labour costs indirect Operational 9M 2014 regulatory 9M 2014 actuals impact costs (excl. co
Slide 30: ACE2 transformation program
ACE2 transformation program €43m net OPEX savings secured in 9M 2014 ACE2 OPEX savings in million euros 1Q14 (actuals) 18 17% 2Q14 (actuals) 18 3Q14 (actuals) 7 22% 61% YTD (actuals) 43 YTG (target) >7 Indirect costs Labor costs Direct costs FY (target) > 50 30
Slide 31: ACE2: overhaul of our distribution
ACE2: transforming our operating model illustration #1: overhaul of our distribution (direct costs) acts in exclusive channels weighted cost per act productivity in own PoS (in percentage, Belgium) (base 100 in 2012, Belgium) (base 100 in 2012, Belgium) +15pp +15 pp +8,3% 90% 100 -17,3% 117 81% 107
Slide 32: ACE2: reduction of costs to serve our customers
ACE2: transforming our operating model illustration #2: reduction of costs to serve our customers (indirect costs) billing costs customer care costs (in euros, Belgium) (in euros, Belgium) -37% -17% 2013 2014E 2013 2014E 32
Slide 33: ACE2: simplifying our organization and processes
ACE2: transforming our operating model illustration #3: simplifying our organization and processes (labor costs) headcount labour costs (a) (Full Time Equivalent, Belgium) (in million euros, Belgium) -249 -7 (-15,5%) 15,5%) (-6,8%) 6,8%) 1.611 106 1.362 99 9M 2013 9M 2014 9M 2013 9M 2014 redundancy
Slide 34: Capital expenses
capital expenses sustained investment in network to consolidate our leadership position total CAPEX(a) network CAPEX(a) in million euros in million euros +19,1% +22,7% 138 103 116 84 56 41 45 33 37 29 9M 2013 Q1-14 Q2-14 Q3-14 9M 2014 9M 2013 Q1-14 Q2-14 Q3-14 9M 2014 • 75% of total group CAPEX allo
Slide 35: Consolidated net income
consolidated net income net income impacted primarily by EBITDA decline in €m 9M 9M Var. insight 2014 2013 Reported EBITDA 207.7 270.0 -23.1% • review of useful life of the assets related to Dep. & Amort. -146.8 -137.3 6.9% technical swap of network and IT Operating income 61.0 132.6 -54.0% • 2014 f
Slide 36: Financial Outlook
Financial Outlook Jean-Marc Harion ‘The results of the first nine months of 2014 enabled Mobistar to improve its initial outlook provided in February 2014’
Slide 37: FY guidance improved for 2014
FY guidance improved for 2014 full year restated EBITDA guidance floor raised in €m Q1 Q2 H1 Q3 9M Old 2014 New 2014 2014 2014 2014 2014 2014 outlook outlook Service Revenues 278.1 283.3 561.4 276.7 838.1 Y-o-Y (-16.2 %) (-12.3 %) (-14.3 %) (-10.1 %) (-12.9 %) Restated EBITDA 66.1 74.3 140.4 77.3 21
Slide 38: Appendix
Appendix
Slide 39: EBITDA restatements
EBITDA restatements from restated EBITDA to reported EBITDA in €m 9M 9M insights 2014 2013 restated EBITDA 217.7 275.3 • consistent with our full year guidance (as percentage of service revenues) (26.0%) (28.6%) labor related -2.6 -5.3 • labor contract terminations or redundancy costs non-labor rela
Slide 40: Mobile data revenues are increasing significantly
Mobile data revenues are increasing significantly due to higher smartphones sales, data usage and smartphones plans (in M€) 240 220 48% 49% 51% 50% 50% The number of smartphones connected 200 on the Mobistar network is increasing 180 4G smartphone penetration is accelerating 21% 19% 160 18% 4G traff
Slide 41: Belgian Mobile total turnover split
Belgian Mobile total turnover split (% of revenues) 301 960 1.277 271 824 Retail billed revenues Roaming voice M2M Roaming Data MVNO Visitor Roaming Handsets MTR Voice 50% 50% 49% 49% 49% Roaming SMS MTR SMS 2% 1% 1% 2% 2% 5% 5% 5% 8% 7% Lower handsets sales, driven by less pass-through business 13%
Slide 42: Q&A
Q&A
Slide 43: 3Q 2014 Roadshow Schedule
3Q 2014 Roadshow Schedule DATE LOCATION BROKER ROADSHOW / CONF. 5 November 2014 Paris Exane BNP Paribas Management Roadshow 6 November 2014 Brussels KBC Securities Management Roadshow 19/20 November 2014 Barcelona Morgan Stanley TMT Conference 3 December 2014 London Berenberg Conference
Slide 44: Further questions?
FURTHER QUESTIONS? PLEASE CONTACT THE IR DEPARTMENT Investor Relations Phone: +32 2 745 80 92 E-mail: ir@mail.mobistar.be For further information please visit www.mobistar.be http://business.mobistar.be http://corporate.mobistar.be