Slide 1: Mobistar 2014 Financial Results
Mobistar 2014 Financial Results Analysts & Investors Presentation February 4th, 2015 Mobistar - Financial results 2014
Slide 2: Forward-looking statements
This presentation contains forward-looking statements about Mobistar, in particular for 2015. 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 3: A leading telecom operator
a leading telecom operator Mobistar is one of the leading telecom operators of the Belgian and Luxembourg markets Mobistar Management Jean Marc Harion Ludovic Pech Siddy Jobe Chief Executive Officer Chief Financial Officer Director Investor Relations & Corporate Finance 3 Mobistar - Financial result
Slide 4: A successful transformation in 2014
A successful transformation in 2014 Jean- Harion, Chief Executive Officer Jean-Marc Harion, Mobistar - Financial results 2014
Slide 5: Key achievements in 2014
key achievements in 2014 pilot 1M active M2M SIM cards 4G@BXL Mobiline Cable Mobifleet regulation activation Concept store Antwerp 5 Mobistar - Financial results 2014
Slide 6: CEO quote on transformation plan
“Our transformation plan is delivering strong results and reinforces Mobistar. We are today ready to improve our performance and face the challenges that are ahead of us. We have successfully transformed Mobistar and are ready to rebound.” Jean Marc Harion Chief Executive Officer 6 Mobistar - Financ
Slide 7: Our main business achievements in 2014
our main business achievements in 2014 • retail customer base back to growth • #1 network: 41% network share • #1 in 4G: 88% coverage • #1 in 4G: half a million customers • #1 in NPS Telco Customer Service • 1st operator to use cable regulation • 50 m€ net Opex savings overachieved (ACE2) • Financia
Slide 8: Our main transformation 2014 achievements
our main transformation 2014 achievements • Taking control of distribution with own channels • Digitalization of end-to-end customer experience • IT outsourcing to gain cost efficiency • Best Tariffs, price transparency, best devices • Improved customers trust and loyalty • Postpaid customers growth
Slide 9: Focus on some major achievements
Focus on some major achievements Mobistar - Financial results 2014
Slide 10: Reminder: our strategic priorities
reminder: our 4 strategic priorities Leadership in Best 4G network in Belgium Mobile N° 1 in B2C Postpaid customers Pioneer in N° 1 provider of regulated cable Disruptive Convergence N° 1 vendor of 3.0 mobile connectivity Best Customer Best telco customer experience Experience N° 1 service channel a
Slide 11: Undisputed largest 4G coverage
undisputed largest 4G coverage Leadership in €153m investments to support network extension at fast pace Mobile Mobistar 4G network coverage evolution (800 + 1800 MHz, focus on in-door ) Official launch in 99% coverage in March: 230 cities Brussels in May and with >50% coverage pilot in Mechelen 11
Slide 12: Mobistar operates the largest network
Mobistar operates the largest network Belgium Brussels #1 #1 • % pop outdoor: • % pop outdoor: • % pop indoor: 64 % • % pop indoor: 81% (source : Mobistar, Jan 2015) (source : Mobistar, Jan 2015) % pop outdoor: 66% % pop indoor: 40.2% % pop outdoor : 99% (source: Proximus website 29.09.14) (source:
Slide 13: Mobistar leader in 4G coverage
Leadership Mobistar leader in 4G coverage in Mobile #1 #1 Outdoor coverage Indoor coverage 88% * 64% * 17.7Mbps 14 Mbps Average Average download speed ** upload speed ** Source 1: * Population coverage based on sites on air end of 2014 Source 2: ** Commsquare, January 2015 13 Mobistar - Financial re
Slide 14: Mobistar leader in 3G coverage and voice performance
Leadership Mobistar leader in 3G coverage in Mobile and in Voice performance #1= #1 #1 Outdoor coverage Indoor coverage Voice calls 99% * 91% * completed ** 3G 3G/2G 9.1 Mbps 2.5 Mbps HD Voice Average Average Only operator in download speed ** upload speed ** Belgium ** Source 1: * Population covera
Slide 15: Facilitating 4G access for our customers
facilitating 4G access for our customers Leadership in from network and plans to devices and services Mobile network tariffs devices services & financing largest 3G most attractive richest devices best services and 4G 4G tariff portfolio coverage plans 15 Mobistar - Financial results 2014
Slide 16: Mobistar largest mobile network in Belgium
Mobistar largest mobile network in Belgium Leadership in 5.5 million SIM connected cards = 41% market share Mobile Belgium, 5,150 5,345 5,444 5,472 incl. MVNO 70,5% 71,1% 70,7% 71,3% 7.500 7.000 101 99 96 103 6.500 6.000 1.509 1.552 1.557 5.500 1.311 5.000 4.500 3,915 3,840 3,892 3,836 4.000 109 111
Slide 17: 4G customers base is growing fast
4G customers base is growing fast Leadership in growing customer appetite for 4G services Mobile Active 4G Mobistar users share of total subscribers base Average data traffic per technology Potential 4G target: > custo 3m 4G mers X4 users Mobile data customers X2 Total customers 17 Mobistar - Financ
Slide 18: 4G experience catalyzing data growth
4G experience catalyzing data growth Leadership in data usage x2.5 in 1 year Mobile Data usage per active Mobistar customer in 2014 Mobistar prepaid & postpaid customers base excl. M2M & MVNO 18 Mobistar - Financial results 2014
Slide 19: 4G already 34% of total data consumption
4G already 34% of total data consumption Leadership in 4G customers weighting for 16% of the base Mobile Mobile data consumption per technology and per customers #customers 500k 4G 34% (16%) 66% Mobistar prepaid & postpaid customers base excl. M2M & MVNO 19 Mobistar - Financial results 2014
Slide 20: 4G usage driving Mobistar ARPU growth
4G usage driving Mobistar ARPU Growth Leadership mobile data monetization thanks to personalized usage control in Mobile Blended ARPU increase YoY in Q4: MyMobistar and Personal Check Up help 1st time in more than 3 years customers adapt their data plans to usage 24.3 Euros • MyMobistar app help cus
Slide 21: International mobile data increase
international mobile data increase Leadership boosted by 4G, attractive plans and smartphones penetration in Mobile Countries covered with Mobistar Mobistar 4G international roaming traffic 4G roaming agreements evolution in EU 28 > 95% of Mobistar customers data roaming usage “With Panther 60 Mobis
Slide 22: Opening the cable market for competition
opening the cable market for competition Pioneer in toward phased launch of Mobistar cable offers in 2015 Disruptive Convergence • Internal users’ test: • 80% would recommend the service • External users’ test: • Charleroi first, extended to other cities Ultra- Digital TV • 1st Mobistar customers ac
Slide 23: Retail minus to be applied within regulation
retail Minus to be applied within Regulation Pioneer in key condition to allow effective competition Disruptive Convergence Cable Cable wholesale wholesale price – price – final Retail current Regulation VAT price IT estimation application Fixed line Content Non Retail Minus regulated (23%) services
Slide 24: Shape: a new portfolio for B2B customers
Shape: a new portfolio for B2B customers Pioneer in #2 abundance “for all”, per company seat Disruptive Convergence Mobile Voice Mobile Data for for all all Applications Tablets MDM Shape & Fix Telephony Best Mobile Network 24 Mobistar - Financial results 2014
Slide 25: Fixed to mobile substitution innovation
fixed to Mobile Substitution innovation Pioneer in a number of innovative services addressing various segments Disruptive Convergence 25 Mobistar - Financial results 2014
Slide 26: Have A Nice Day loyalty program
“Have A Nice Day” Best #3 Mobistar new loyalty program, launched in April 2014 Customer Experience Offer the best Surprise and delight our customers customer experience Many “HAND” operations in H2, on thewith exclusive gifts market amongst which 2 major concerts >350.000 engaged customers 26 Mobist
Slide 27: Distribution channels transformation complete
distribution channels transformation complete Best focused on service and improved customer journey Customer Experience • Concept Stores Antwerp, Liège… & Brussels • 68 shops refitted • 90% 3rd party partner contracts renegotiated • Launched in October 2014 • Mobistar Products & Services • Portfolio
Slide 28: End-to-end digitalization of customer journey
end-to-end digitalization of customer journey Best mobile apps, revamped web site, shops digitalization… Customer Experience 28 Mobistar - Financial results 2014
Slide 29: 2014 Opex savings objective overachieved
2014 Opex savings objective overachieved Best 2015: End-to-end focus on transversal causes for Non-Quality Industry Efficiency Doing together: 2015 Transversal Non Quality chasing 2014 Doing Better: Vertical Transformation 2013 Doing less & cheaper 29 Mobistar - Financial results 2014
Slide 30: Financial review 2014
Financial review 2014 Pech, Chief Financial Officer Ludovic Pech, Mobistar - Financial results 2014
Slide 31: Full year key financials
full year key financials cost transformation mitigating top line erosion in €m 2014 2013 Var. Comments • €37.6m regulatory impact in FY 2014 Service revenues 1,115.3 1,252.9 -11.0% • 4Q14 underlying erosion limited to -1.1% c.b. • 70% of consolidated revenues decrease Consolidated turnover 1,249.2 1
Slide 32: Regulatory impact
regulatory impact progressively fading out with EU roaming left in 2015 FY11 FY12 FY13 FY14 FY15 15 12 29 26 26 Revenues 14 11 impact 60 30 34 38 59 60 74 €230m impact in FY14 compared to FY10 9 20 19 19 10 EBITDA 38 7 impact 13 15 25 33 34 38 €130m impact in FY14 compared to FY10 EU Roaming MTR 32
Slide 33: Consolidated turnover
consolidated turnover 70% of top line erosion attributable to regulatory, legacy fix and handset sales consolidated revenues year-on-year evolution (in %) -174 1,461 (-12,2%) 12,2%) -38 1,424 -65 -35 -75 1,249 2013A regulatory 2013cb service revenues service revenues handset 2014A impact (mobile) (n
Slide 34: Blended mobile ARPU (Belgium)
blended mobile ARPU (Belgium) ARPU stabilization driven by tariff mix and 4G data usage quarterly ARPU (a) (in euro per month per user) +1.0% 26.0 25.7 24.9 24.0 24.3 23.4 23.9 23.9 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 Mobistar prepaid & postpaid customers base excl. M2M, IEW & MVNO 34 Mobistar -
Slide 35: V-shaped recovery confirmed quarter after quarter
v-shaped recovery confirmed quarter after quarter the repricing is now largely absorbed and value management paying-off service revenues year-on-year evolution (in %) Positive postpaid net adds with +6k in Q4 -1,1% -4,5% ~0.5m 4G customer base growing Exploding data usage with +185% growth Mobile AR
Slide 36: Restated EBITDA
restated EBITDA 87% of service revenues decline now compensated by cost savings restated EBITDA year-on-year evolution (in %) 336 -14 (-4,5%) 4,5%) -25 310 296 15 -21 275 9 -113 75 2013A regulatory 2013cb service direct labor indirect 2014cb operating 2014A impact revenues costs costs costs taxes (a
Slide 37: V-shaped recovery: EBITDA
v-shaped recovery confirmed quarter after quarter the efficiency program accelerates the return to growth of the EBITDA restated EBITDA year-on-year evolution (in %) +12,3% Top line sequential improvement +5,7% -5,3% Value based management driving profitable growth ACE2 €50m cost savings target exce
Slide 38: Cost base transformation: net opex savings
cost base transformation: net opex savings €50m net opex savings target exceeded -19,4% -5,6% 700 267 252 564 2013 2014 2013 2014 direct costs non labor indirect costs excluding regulatory impact excluding operating taxes (€13m OPEX reduction) (€22m OPEX increase) 38 Mobistar - Financial results 201
Slide 39: Cost base transformation: improved company agility
cost base transformation: improved company agility headcount reduction in a serene and improving social climate -259 -6,2% (-17%) 17%) 145 1.542 136 1.283 2013 2014 2013 2014 labor costs headcount in Belgium excluding restructuring (end of period) (€9m redundancy costs) (incl. OLU) 39 Mobistar - Fin
Slide 40: Cost base transformation: fueling growth engine
cost base transformation: fueling growth engine OPEX savings reinvested in growing the top line cost base excluding interconnection charges and cost of goods sold (in euro millions) ACTUAL FIGURES ILLUSTRATIVE 594 21 544 544 €71m net OPEX savings (b) resources reallocation 2013A adverse gross growth
Slide 41: Capital expenses
capital expenses sustained investment in network to consolidate our 4G leadership position total capital expenses (in euro millions) +8,2% 215 199 • 71% of total group CAPEX allocated to network • #1 3G and 4G network coverage • #1 4G network in Brussels • ambitious 4G roll-out plan confirmed in 201
Slide 42: Consolidated net income
consolidated net income net income impacted primarily by EBITDA decline in €m 2014 2013 Var. insight Reported EBITDA 255.4 317.1 -18.1 % (22.9 %) (25.3 %) • reflecting the acceleration of the 4G roll-out Dep. & Amort. -194.5 -188.3 +3.3 % and new licenses Operating income 60.9 128.7 -52.7 % • reflec
Slide 43: Outlook 2015
Outlook 2015 Jean- Harion, Chief Executive Officer Jean-Marc Harion, Mobistar - Financial results 2014
Slide 44: Mobistar positioning: the Trusted Connectivity company
Mobistar positioning: the Trusted Connectivity company mPayment and cloud storage Devices range Open Content, and services Apps and APIs Best mobile network and best-in-breed fixed network 44 Mobistar - Financial results 2014
Slide 45: Our strategic priorities for 2015-2020
our 5 strategic priorities for 2015 – 2020: Leadership in Best 4G network in Belgium Mobile N° 1 in network share Pioneer in N° 1 convergent challenger on the consumer market Disruptive Convergence N° 1 convergent challenger on the enterprise market Best Customer Best Telco customer experience Exper
Slide 46: In 2015, Mobistar will be back to fixed connectivity
in 2015, Mobistar will be back to fixed connectivity For Consumers… … and small Enterprises New Pack Ultra- Digital TV fast Internet + 46 Mobistar - Financial results 2014
Slide 47: In 2015, Mobistar will stabilize its restated EBITDA
in 2015, Mobistar will stabilize its restated EBITDA 2014 2015 = 47 Mobistar - Financial results 2014
Slide 48: 2015 full year guidance
2015 full year guidance Mobistar aims at stabilizing its financials in 2015 and reiterates the same guidance as last year restated EBITDA (in euro millions) ACTUAL FIGURES ILLUSTRATIVE 280 280 280 275 275 273 265 260 260 250 Dynamic resources reallocation guidance guidance 2014A 2014A regulatory 201
Slide 49: Q&A
Q&A Mobistar - Financial results 2014
Slide 50: 1Q 2015 Roadshow Schedule
1Q 2015 Roadshow Schedule DATE LOCATION BROKER ROADSHOW / CONF. 10 February 2015 Paris ESN / CM CIC Management Roadshow 4 March 2015 Brussels ING Management Roadshow 6 March 2015 Amsterdam KBC Management Roadshow 11 March 2015 Milan Euronext / Petercam Belgian Conference / IR 18/19 March 2015 London
Slide 51: Appendix
Appendix
Slide 52: Full year guidance 2014 achieved
full year guidance 2014 achieved in €m Q1 Q2 Q3 Q4 2014 Old 2014 New 2014 2014 2014 2014 2014 outlook outlook Service Revenues 278.1 283.3 276.7 277.2 1,115.3 Y-o-Y (-16.2 %) (-12.3 %) (-10.1 %) (-4.5 %) (-11.0 %) Restated EBITDA 66.1 74.3 77.3 57.2 274.9 Restated EBITDA (23.8 % / (26.2 % / (27.9 %
Slide 53: 2014 EBITDA restatements
2014 EBITDA restatements from restated EBITDA to reported EBITDA in €m 2014 2013 insights Restated EBITDA 274.9 335.7 (as percentage of service revenues) (24.6 %) (26.8 %) Labor related -8.5 -9.8 • labor contract terminations or redundancy costs Non-labor related -10.9 -8.8 • distribution contract t
Slide 54: Investor Relations
Investor Relations: • ir@mail.mobistar.be • +32 2 745 80 92 • corporate.mobistar.be @pressmobistar @harion www.linkedin.com/company/3673 Mobistar - Financial results 2014