Proximus Sa · EURONEXT:PROX
Proximus Sa — Q3 2024 Earnings Presentation
41 slides from Proximus Sa's earnings presentation, Oct 25, 2024
Slide 1: Investor & analyst presentation
Investor & analyst presentation 25 October, 2024 Guillaume Boutin Chief Executive Officer
Slide 2: Cautionary statement
Cautionary statement This presentation is a subset of the company’s results release. Please consult proximus.com/investors for the overall disclosed information. This communication may include some forward-looking statements, without limitation, regarding Proximus’ financial or operational results,
Slide 3: Agenda
Agenda • Highlights • Financial & Operational performance • Q&A
Slide 4: Q3 2024 Highlights
Q3 2024 Highlights oS PproximuUS
Slide 5: Solid performance in Q3'24 supports guidance upgrade
Solid performance in Q3’24 supports guidance upgrade Full year guidance for 2024 up to 3% Group EBITDA growth Domestic International Group Revenue +xx% +3.5% at CC Q3’24 EBITDA of 480M€, up +1.6% Growing customer base, price indexation (on pro forma basis) (%YoY) +2.3% Direct margin 5.0% 5.3% 4.3% 3
Slide 6: Continuing strategic execution, laying transformational foundation
Continuing strategic execution, laying transformational foundation for both Domestic & International front Best networks in Belgium. Successfully completed the Asset sales progressing, Data Mobile network consolidation carve-out our IT activities; Centers agreement signed, new closing a good quarter
Slide 7: Cities and municipalities with Fiber works ongoing
Proximus and partners deploying Fiber in 167 cities Proximus Fiberklaar Unifiber GoFiber 167 Cities and municipalities with Fiber works ongoing 7
Slide 8: +98k Fiber Homes & Businesses Passed in Q3; 2 million milestone crossed
2 million Fiber HP milestone crossed Fiber HP footprint nearly 35%; and “Fiber in the street” at ~40% +98k Fiber Homes & 2,081k Fiber Homes & ~40% Fiber in the street Businesses Passed in Q3 Businesses Passed end-Q3 (in K, additions in the period, Proximus and JVs) (in K, total base of premises) 302
Slide 9: 519k activated Fiber lines by end-Q3
519k activated Fiber lines by end-Q3 continued strong customer demand for Fiber FIBER Increasing Fiber share Lower churn Total park & net adds (in K) in total acquisitions levels vs Copper +47% 519 +9pp 481 397 441 ~30% 353 Q3’23 Q3’24 Maintaining high ARPC in € 44 44 40 38 migration rate ~70% 31 +5
Slide 10: Agreement reached on selling datacenter operations
Agreement reached on selling datacenter operations for EUR 128 million as part of our divestment plan of non-core assets ✓ Selling on premise Datacentre infrastructure to Datacenter united, including owned real estate ✓ 10-year service agreement ensuring Proximus customers to benefit from advanced o
Slide 11: Strategic partnerships and Route Mobile–Telesign synergies
Proximus Group benefitting from strategic partnerships , initial synergies between Route Mobile and Telesign materializing Strategic partnership – joint 5 -yrs strategic partnership. GTM to leverage products Focus on advancing CPaaS + of Route Mobile (CPaaS), DI, enabling seamless Telesign (DI), and
Slide 12: Financial and Operational performance
Group Financial and Operational performance 12 12
Slide 13: Domestic
Domestic
Slide 14: Sustained solid commercial performance with growth for Internet and Mobile
Domestic Sustained solid commercial performance with continued growth for Internet and Mobile Postpaid Internet base 2,300K; Postpaid base 5,065K; TV base 1,637K; Fixed Voice 1,538K; +49k YoY +130k YoY -45k YoY -152k YoY +2.2% YoY +2.6% YoY -2.7% YoY -9.0% YoY Net adds Group (‘000) -8 -9 -12 -13 -37
Slide 15: Q3 Residential revenue up 3.1% YoY
Residential Q3 Residential revenue up by +3.1% YoY, with Services revenue up +3.0%, supported by 1 Jan’24 price indexation and ongoing solid customer growth Residential revenue (M€, YoY ) 8.3% • Customer Services revenue +3.0% YoY 5.5% 5.9% 5.3% • Strong Q3’24 customer growth 3.1% 624 620 616 620 60
Slide 16: Growing Convergent base and higher ARPC driving Residential revenue
Residential Growing Convergent base and higher ARPC driving +3.0% Residential customer services revenue increase in Q3 Customer services revenue profile significantly improved: Customers (in K) Growing Convergent base: (M€, YoY) +5.8% YoY Customer satisfaction Network investments +1.0% Value managem
Slide 17: B2B revenue impacted by volatility in low margin IT Products
Business B2B revenue impacted by volatility in low margin IT Products Business Services -0.5% YoY, Products -7.8% YoY Q3 revenue Business revenue (M€, YoY) 4.8% Services revenue -0.5%, 4.1% 3.1% Solid growth in IT Services and Fixed Data, offset by decrease in Fixed Voice and Mobile -0.5% -1.2% Prod
Slide 18: B2B Services revenue for Q3 nearly stable year-on-year
Business B2B Services revenue for Q3 nearly stable year-on-year IT Services growing, telco trend impacted by annualizing price indexation Business Services revenue (M€) -0.5% +4.4% IT Services 408 • Driven by growth in services in Cloud, Security and Smart Mobility 405 +4.4% 104 109 +1.3% Fixed Data
Slide 19: Roaming traffic driving strong growth in Wholesale Services
Wholesale Roaming traffic driving strong growth in Wholesale Services continued YoY decline in low margin interconnect revenue Wholesale revenue (M€, YoY) 3.3% -4.9% -4.9% -9.0% -8.3% Fixed & Mobile Services revenue +21.5% 68 66 63 64 59 • Mainly driven by higher roaming volumes 23 29 23 28 24 Inter
Slide 20: Sustained solid Domestic revenue growth
Domestic Sustained solid Domestic revenue growth, +1.5% YoY revenue from Services up by +2.2% YoY Revenue (underlying, M€) +1.5% 8 1,191 15 -3 -2 1,173 +2.2% Services revenue Q3’23 Residential Business Wholesale Non-Services Q3’24 Customer Services Services Revenue* Services *Aggregate of Residentia
Slide 21: Continued cost efficiency delivery more than offsets inflation
Domestic Continued cost efficiency delivery more than offsets inflation effect OpEx increase slowing OpEx (management view, underlying, M€) 2.2% Domestic OpEx (M€) 472 2.2% 18 472 461 -8 461 Q3’23 WF Non-WF Q3’24 Domestic headcount (FTE) 360 54 10,373 10,343 -445 Q3’23 Lower Inflation Customer Trans
Slide 22: Domestic EBITDA +1.3%
Domestic Domestic EBITDA +1.3% Strong direct Margin growth and cost efficiencies outpacing remaining inflationary impacts (M€) +1.3% 16 -18 429 423 8 Q3’23 Direct Margin Workforce costs Non-Workforce costs Q3’24 22
Slide 23: International
International
Slide 24: Sustaining direct margin growth on high comparable base
International Sustaining direct margin growth on high comparable base P2P Voice & Messaging Revenue (M€) -0.9% at constant Commmunications & Data All Q’s on pro forma basis currency Revenue -0.9% at constant currency, Q3 Eliminations cycling against a high comparable base -2.3% 468 474 479 461 424 4
Slide 25: International EBITDA up +4.2% on a pro forma basis
International International EBITDA up +4.2% on a pro forma basis EBITDA (M€) All Q’s on pro forma basis +4.2% ✓ EBITDA up +4.2% year-on-year despite a 51 high comparable base. 49 48 ✓ Healthy Direct margin growth benefitting from shift in mix for CPaaS, higher travel 45 44 volumes and exposure to fa
Slide 26: Group
Group
Slide 27: Q3 Group EBITDA +1.6% on pro forma basis
Group Q3 Group EBITDA +1.6%, on pro forma basis Direct margin continued to grow, while the cost increase further moderated (all underlying, M€) Revenue Direct margin 0.2% 1.8% 18 3 1,022 16 -1 1,638 1,635 -11 1,004 -4 +1.5% -0.9%* +1.8% +3.5%* Q3’23 Domestic International Others** Q3’24 Q3’23 Domest
Slide 28: YTD 2024 Group CapEx of 874M€
Group YTD 2024 Group CapEx of 874M€ Group CapEx M€, excl. spectrum & football rights -3.3% 904 874 • Lower Proximus Fiber build volumes in Other dense areas while picking up in medium- Customer related* Fiber build dense areas • Fiber customer termination and activation cost rising, supporting topli
Slide 29: Higher EBITDA, lower cash CapEx and lower equity injections
Group Higher EBITDA, lower cash CapEx and lower Equity injections, more than timing effect of change in WC needs FCF ( YoY, M€) Operations Investing 48 45 77 -68 6 47 Lower JV equity -25 injections following -35 Fiberklaar consolidation -776 45 -80 -728 FCF Adjustments Adjusted FCF Underlying Change
Slide 30: Revising our guidance upward driven by strong Domestic performance
Revising our guidance upward driven by strong Domestic performance year-to-date Guidance Outlook Outlook FY2023 YTD24 Outlook FY 2024 FY 2024 comparable Actuals FY 2024 metric 23 Feb 2024 26 Jul 2024 25 Oct 2024 Underlying Domestic Growing Growing Growing 4,665M€ +3.5% YoY revenue up to 1% up to 2.5
Slide 31: Q&A
Q&A To ask a question, join the conference call → Register here for the Q&A to receive your dial-in details.
Slide 32: Appendix
Appendix
Slide 33: From reported to underlying – EBITDA adjustments
Group From reported to underlying – EBITDA adjustments Q3’23 Q3’24 (M€) (M€) 24 458 598 453 0 4 -24 -2 3 -21 -2 -66 480 -30 Reported Lease Lease Transformation Acquisitions, Litigation / Underlying Reported Lease Lease Transformation Acquisitions, Litigation / Underlying depreciations interest merge
Slide 34: Adjusted FCF benefiting from higher EBITDA and positive WC impact
Group Adjusted FCF benefiting from higher EBITDA, positive impact of change in WC and lower equity injections YoY Q3 FCF Operations Investing ( YoY, M€) 161 41 -4 -8 4 43 Lower JV equity injections following -163 22 Fiberklaar 64 consolidation 21 43 -1 FCF Adjustments Adjusted FCF Underlying Change
Slide 35: EBITDA conversion to FCF
Group EBITDA conversion to FCF YTD 2024 (M€) 1,549 1,413 -135 -173 -49 -78 48 -1,052 -13 -776 -728 Reported Adjustments Underlying Change in WC Interests paid Income Tax paid Cash Capex Cash Other FCF YTD ’24 Adjustments FCF YTD ’24 Ebitda Ebitda and received Investing Adjusted YTD ’24 YTD ’24 YTD ’
Slide 36: Net income
Group Net income (Group share) (M€) 39.2% 127 -52 -18 372 77 -19 -10 268 YTD 2023 Underlying Adjustments D&A Net Tax expense Others (*) YTD 2024 Ebitda finance result * Include Non-controlling interests and Share of loss from associates 36
Slide 37: Adjusted Net Financial Position (excl. lease liabilities)
Group Adjusted Net Financial Position (excl. lease liabilities) YTD 2024 (M€) New debts Net financial position (through Net financial position EOP 2023 Free Cash Flow Dividends acquisitions) Other* YTD 2024 -3,131 -728 -226 5 -467 -4,547 * Mainly remeasurement to fair value of cash flow hedge instru
Slide 38: Managing maturity and average coupon
Group Managing maturity and average coupon Successfully issued a 700M€ inaugural hybrid bond Debt maturity schedule (M€) ~20% in next 5yrs ~80% in ≥ 5yrs Credit ratings S&P BBB+ (negative outlook) Moody’s A3 (stable outlook) green green bond bond ~3.0% 700 Weighted average coupon 750 750 (long-term
Slide 39: Successfully issued an inaugural 700M€ hybrid bond
Successfully issued an inaugural 700M€ hybrid bond Terms & Conditions Preserving Supporting ✓ Purpose: general corporate purposes including financial flexibility long-term ratings Fiberklaar acquisition and fiber investments in the context of fiber and showing strong investments commitment to
Slide 40: Shareholder structure
Shareholder structure Status 30/09/2024 Total number of shares Free-float Belgian Government Market Capitalization Gross Dividend yield 338,025,135 42% 54% ~€ 2.4Bn ~8% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with dividend righ
Slide 41: Contact Investor Relations
Contact Investor Relations Nancy Goossens Adrien Peillon Investor Relations Lead Investor Relations manager Call: Proximus Investor E-mail: +32 2 202 82 41 Relations website: investor.relations@proximus.com +32 2 202 62 17 www.proximus.com/en/investors