Proximus Sa · EURONEXT:PROX
Proximus Sa — Investor Presentation (December 2016)
28 slides from Proximus Sa's investor presentation, Dec 16, 2016
Slide 1: Fiber for Belgium
Fiber for Belgium Analyst & Investor presentation 16th December 2016
Slide 2: Forward-looking statements
“This communication includes some forward-looking statements, without limitation, regarding Proximus. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, and there can be no assurance that anticipated events will occur or th
Slide 3: Dominique Leroy - CEO
Investing in long- proggimus
Slide 4: For Business, For Consumer: demand for fiber
For Business For Consumer Multiple new technologies Fast Digital Transformation for expected to further enrich customer business customers digital life over next decades Reliable quality Cloud Augmented & virtual reality Video conferencing Mix Professional & Private life Concurrent usage Gaming Vide
Slide 5: Fiber for Business, Greenfield FTTH, high business demand
+ Fiber for Business 1st brownfield (P2P & first GPON-sites) Greenfield FTTH FTTH project High business demand Future proof Testing viability of Key support for Digital investments for copper transformation new builds replacement in brownfield zones Positive outcome of current Fiber projects 5
Slide 6: Positive outcome of completed Business Fiber projects
Encouraging positive outcome of completed Business Fiber projects, with 83% of overall customer satisfaction… 6 Very high Positive Overall customer Recommendation customer installation satisfaction on interest experience Fiber 82% Nearly 80% of P2P of companies would 80% probably/certainly Fiber ins
Slide 7: High activation rates and customer satisfaction
High activation rates Activation rate on homes passed (sample of 5 FTTH greenfield sites) • Solid success rate in activating 100% homes passed with Fiber • Increasingly cooperating with construction companies Site 1 Site 2 Site 3 Site 4 Site 5 99% overall Customer FTTH - Highest overall customer sat
Slide 8: Accelerate, continue and new fiber roll-out
Accelerate Continue New Nation-wide Fiber to Fiber in greenfield Full Fiber-roll-out in the Business dense city areas Capture in an efficient Go faster following Continue with Fiber way the Fiber high market traction for new living units potential for business Target and residential coverage >85% >5
Slide 9: Investing more while keeping a solid FCF
while keeping a solid and a sound financial We will invest more… FCF… position. Over the next 10 years a total Fiber investment of € 3Bn Large part covered by FCF-level expected to sustain Maintaining a very sound rebalancing of Capex envelope a stable dividend over the leverage of around 1x net
Slide 10: Attractive shareholder return policy, 3-year dividend outlook
Attractive overall shareholder 3-year dividend outlook return policy We reconfirm our overall We intend to pay a stable yearly shareholder remuneration policy, i.e. dividend of returning most of the Free Cash Flow € 1.50/share over the period to shareholders. 2017-2019. 10
Slide 11: Geert Standaert - CTO
Geert Standaert - CTO Fiber for Belgium
Slide 12: Optimized Fiber approach by value potential and deployment cost
Optimized Fiber approach in function of Reach substantial Fiber footprint in both Enterprise Residential & Business value potential and & Residential markets over the next decade deployment cost In Cities : MOBILE Integrated Fiber-To-The-Home & Business + (FTTH&Bus) for Enterprise & Residential FTTB
Slide 13: Dense city areas
Dense city areas + High density of Enterprise & Residential in cities Start FTTH&Bus roll-out as from 2017. Areas driving integrated FTTH&Bus approach with most businesses in priority • Deploy a Point-to-Multipoint Fiber network (GPON1) to Mixed Residential & Enterprise serve all businesses and all
Slide 14: Dense city areas: fixed, mobile and residential
Dense city areas + 1 Enterprise Fixed and … 2 Mobile Densification and … 3 Residential Fixed + + 14
Slide 15: Outside dense city areas, Enterprise
Outside dense city areas, Enterprise Support the fast Digital Transformation of FTTBus roll-out started in 2016, maximally businesses re-using existing FTTC assets: scale fast & efficient Example of FTTBus roll- • First FTTBus • Proximus will proactively deploy Point-to-Multipoint out in city of Veu
Slide 16: Outside dense city areas, Residential
Outside dense city areas, Residential Prepare for further digitalization Shorten the average distance to the optical node by optimizing our existing FTTC network from 530 meters to < 350 meters • Densify the network – Deploy new Fiber distribution Inner ring Middle ring Outer ring points closer to t
Slide 17: Proximus ambitions
+ + + Proximus ambitions Enterprise – 85% corporate & medium businesses Residential – 50% homes & small offices passed passed with Fiber (Green- & Brownfield) From FTTH&Bus in dense city areas From FTTH in dense city areas and FTTBus outside cities >85% and FTTH Greenfields >50% ~65% ~40% 40% ~18% 7
Slide 18: Sandrine Dufour - CFO
Investing In future growth sound FCF proggimus
Slide 19: Fiber investment financed through growth and efficiency
Commer- € 3Bn Fiber Capex over the next 10 years will be financed Optimized deployment cial/ope- through growth sequence by use of rational efficiency innovative data analytics tool: Fiber zone Reduce Business Deploy- Invest value ment costs cost NPV positive, for both FTTH and FTTBus Grow S
Slide 20: Cheaper and faster roll-out through wall mounting and pre-termination
Maximized wall mounting where … high pre-termination to maximize … higher average single living units in possible for cheaper & faster roll-out… winback & commercial potential Belgium vs other EU countries… MIX OF HOME CONNECTION HIGH % OF PRE-TERMINATION HIGH % SDU OF HOMES . wall mounted . MDU . u
Slide 21: Consumer and Enterprise benefits of Fiber
Consumer Enterprise • Maintain & grow solid position in Business • Strong medium for Long-term ARPU uplift , better retention of existing tiering and Business cross • Re-gain customers customers selling opportunities through acquisition in highly dense populated areas Sales Churn below average Fiber
Slide 22: Avoid future expenses related to aging copper network
Capitalize on roadwork Structural and pro- synergies Avoid future expenses related to active renewal of the Anticipate copper maintenance the aging of the copper network network and renewal needs 150% Passive network, low Lower100% > 20% Gradual outphasing of maintenance effort maintenance cop
Slide 23: Weight of Fiber in Group Capex will triple by 2019
Weight of Fiber in Group Capex will triple by 2019 FTTH FTTBus greenfield Fiber . Fiber . FTTH densi- brownfield € 3Bn fication 10 yrs We estimate the annual Group Capex to be around € 1Bn* for 2017-2019 Capex resources 4G roll-out Annual Fiber Capex spend depends on variables such as timing g
Slide 24: Ambition to realize EUR 150M net opex reduction
Ambition to realize € 150M net Initiatives for Gross Opex Partly offset by… Opex reduction in 2015- 2019 savings Supported by early leave plan Company-wide cost programs Agile organization Running ahead in 2016 vs plan • Optimized Sales channels • Automatic wage indexations & • Reducing support func
Slide 25: FCF covering dividend
Limited incremental • Through rebalancing of Capex envelope, the annual Capex is annual estimated to stay around € 1Bn for 2017-2019 Capex Underlying • Sound market position, with room for continued customer EBITDA growth, upselling and improving market shares growth • Lower the cost base through ef
Slide 26: Dominique Leroy - CEO
Investing in long-term v customer sa proggimus
Slide 27: Very large bandwidths, better customer experience
Very large bandwidths Better customer Virtual unlimited capacity experience Gigabit grade infrastructure No latency, concurrent usage Very fast content availability Very fast video Gaming… Gaming, Netflix offline mode, … download of content Symmetrical Security Future proof path of exponential speed
Slide 28: For further information
For further information Investor relations Nancy Goossens Sarah Franklin +32 2 202 82 41 +32 2 202 77 11 Director Investor Relations Investor Relations Manager E-mail: investor.relations@proximus.com Proximus investor relations website: www.proximus.com/en/investors