Orange Belgium SA · EURONEXT:OBEL
Orange Belgium SA — Q2 2019 Earnings Presentation
24 slides from Orange Belgium SA's earnings presentation, Jul 24, 2019
Slide 1: Orange Belgium Q2 2019 Financial Results
Orange Belgium Q2 2019 Financial Results July 24, 2019
Slide 2: Disclaimer
Disclaimer This presentation might contain forward-looking statements about Orange Belgium in particular for 2019. 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: Building strong brand perception
Building strong brand perception July May September June Google June Chromecast is now available to May Love customers April 1st operator to offer VoWiFi Fixed Phone and VoLTE for February for Love deep indoor customers coverage 3 Orange Restricted 3 2018 2019
Slide 4: Orange Belgium is breaking telco conventions
Orange Belgium is breaking telco conventions We promise… We deliver… Not to increase prices in 2019 More at no extra costs: Eagle customers have unlimited voice and data in the EU Residential customers can send MMS in Belgium and from the EU Orange customers will continue to have roaming s
Slide 5: Orange Belgium launched Love Duo, the first 2P offer in the country
Orange Belgium launched Love Duo, the first 2P offer in the country 5
Slide 6: Section one: Q2 2019 Highlights
Section one Q2 2019 Highlights 6
Slide 7: Q2 2019 Orange Belgium key achievements
Q2 2019 Orange Belgium key achievements Mobile contract excl. M2M Convergent customers Net additions 13.6% 2.5 m 216 k Mobile contract excl. + 26 k of total postpaid mobile +6.8% yoy +58.8% yoy M2M base is convergent Convergent customer + 16 k Belgium Belgium Belgium Belgium Revenues Retail service
Slide 8: Section two: Operational Results
Section two Operational Results 8
Slide 9: Convergence: Love reached 216k customers, confirming its attractiveness
Convergence: Love reached 216k customers, confirming its attractiveness 18 21 19 19 25 20 15 14 16 Love (‘000) 200 216 180 155 122 136 103 Love customer net adds, 64 82 +16k +10.9% yoy Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Love customers yoy 58.8% Convergent mobile
Slide 10: Mobile postpaid: Commercial momentum remains solid in Q2'19
Mobile postpaid: Commercial momentum remains solid in Q2’19 +6.8% Customer base (‘000) 2,408 2,469 2,490 2,516 2,355 210 244 272 294 180 2,175 2,197 2,225 2,218 2,222 Contract customers / 82% total base (Q2’18: 80%) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Smartphone penetration 53 61 78% (Q2’18: 79%
Slide 11: Mobile: Unlimited plans catalyst for data usage growth in Belgium
Mobile: Unlimited plans catalyst for data usage growth in Belgium +56% +79% Average mobile data Average mobile data usage (GB) +35% +55% 3.2 3.3 4.1 4.1 GB usage (smartphone), +120% +57% 2.5 2.6 +56% yoy 1.8 2.1 1.3 1.3 0.3 0.9 0.9 Mobile data active 0.3 0.6 2.4m 0.5 0.1 EoP 2013 EoP 2014 EoP 2015 E
Slide 12: Regulatory update
Regulatory update Cable Regulation Spectrum and 5G auction Implementation of 2018 decisions ongoing The Royal Decrees regarding the allocation of the 700, 1400 and 3400-3800 MHz band and the Single installer started in Q3’19 renewal/reallocation conditions of the 900, 1800 and Broadband only r
Slide 13: Mobile Network sharing agreement with Proximus
Mobile Network sharing agreement with Proximus Meet the increasing demand for mobile network quality Plan, built and operate the shared Allow a faster and more mobile access network. Each comprehensive 5G roll-out in company will retain ownership of Belgium their network assets Bring relevant
Slide 14: Mobile Network sharing agreement with Proximus
Mobile Network sharing agreement with Proximus 1 2 3 €300 m €130 m >3x WACC Savings over 10 years Initial set-up costs IRR over 10 years Opex: BTS rental costs as Initial set-up costs well as energy, repair and related to de- maintenance, transmission commissioning and costs enablements Capex: 5G
Slide 15: Orange Belgium announced the acquisition of BKM to strengthen its B2B activity
Orange Belgium announced the acquisition of BKM to strengthen its B2B activity Value Opportunities Status Extend B2B offering EV: €52.4m Meet B2B customers July 2: Belgian Competition for Upsize NV and its growing demand for a Authority cleared the subsidiaries: BKM NV and single connectivity
Slide 16: Section three: Financial Results
Section three Financial Results 16
Slide 17: Revenues driven by increase in retail service revenues and equipment sales
Revenues driven by increase in retail service revenues and equipment sales, despite the lower MVNO revenues Revenues evolution (€ m) +1.9% 18.2 + -3.4 - MVNO + Convergent -7.4 + 16.9 services -10.8 -1.5 318.9 + Mobile service 313.0 + 0.2 revenues Q2 2018 Retail service revenues Wholesale revenues Eq
Slide 18: EBITDAaL increased driven by higher revenues despite lower MVNO revenues
EBITDAaL increased driven by higher revenues despite lower MVNO revenues, cost control and seasonality effect on advertising and IT spend EBITDAaL evolution (€ m) +18.2% 5.9 78.9 + Retail service revenues +18.2 + 4.9 + 2.2 -0.9 66.8 -7.4 - MVNO -4.9 Q2 2018 Revenues Direct costs Labor costs Indirect
Slide 19: Total eCapex under control. Net financial debt amounted to €248.8m
Total eCapex under control. Net financial debt amounted to €248.8m. eCapex (€ m) Net debt 14.5% -5.6% €248.8 m 13.5% 45.5 42.9 10.8 Net debt/EBITDAaL 11.0 0.8x 34.7 31.9 Q2 2018 Q2 2019 Cable capex incl. CPE, IT & Network, etc. Core capex Total capex to total revenues ratio 19
Slide 20: Cable operations continue to improve in H1'19
Cable operations continue to improve in H1’19 Variations Revenues: €49.8 m +86% EBITDAaL: €1.3 m +€12 m eCapex: €23.3 m +9% Operating cash flow: - €22.0 m +€10 m 20
Slide 21: Section four: 2019 guidance
Section four 2019 guidance 21
Slide 22: 2019 guidance
2019 guidance 2019 Guidance Q1’19 Q2’19 H1’19 Revenues growth Slight growth vs. 2018 +3.8% +1.9% +2.8% EBITDAaL €285-305 m €58.0m €78.9m €136.9m eCapex Stable vs. 2018 +16.1% -5.6% +3.3% Outlook Further uptake of the postpaid and convergent Love customer base Focus on operational efficiency MV
Slide 23: Section five: Q&A
Section five Q&A 23
Slide 24: Orange Belgium Q2 2019 Financial Results
Orange Belgium Q2 2019 Financial Results July 24, 2019