Proximus Sa · EURONEXT:PROX
Proximus Sa — FY2017 Earnings Presentation
88 slides from Proximus Sa's earnings presentation, March 2018
Slide 1: Proximus Group 2017 Results presentation
Proximus Group 2017 Results presentation March 2018
Slide 2: Table of contents
Table of contents Key 2017 achievements & outlook: Additional information 80 Domestic 3 IFRS 15 81 Spectrum 82 BICS 28 Shareholder structure 83 Quarterly results 39 Pricing 84 Group 39 CSR 86 Consumer segment 52 Contact details 87 Enterprise segment 68 Wholesale 75 BICS 76
Slide 3: Proximus Domestic 2017 achievements
Proximus Domestic 2017 achievements Dominique Leroy CEO 3
Slide 4: Fit for Growth strategy resulting in growth for Domestic operations
Fit for Growth strategy resulting in Domestic growth for our Domestic operations, in Revenue spite of higher regulatory and 2017 vs 2016 competitive headwinds. Domestic Revenue (M€) Domestic Revenue Variation (2017 vs 2016, M€) ICT 34 +1.1% +0.7% 4,458 Mobile Terminals 31 4,410 TV 26 4,379 Fixed Dat
Slide 5: We grew our Internet and TV customer base
We grew our Internet TV Park (K) dTV Market share (%) and TV customer base, +4.8% 1,560 and increased our +5.3% 1,489 market shares. 1,414 35.1% 35.9% 36.8% 2015 2016 2017 Broadband Park (K) Market share (%) +3.2% 1,983 +3.5% 1,920 1,856 • Upgraded Fixed Network 46.1% 46.3% 46.6% • Customers on late
Slide 6: Music Sports Entertainment
MUSIC SPORTS ENTERTAINMENT 14 May 2018 Sensitivity: Confidential/Highly Confidential 6
Slide 7: Managed value creation on Mobile postpaid
We managed the value creation on Mobile postpaid, with service revenue up 1.3%, in spite of RLAH Postpaid Revenue (M€) National Mobile Data usage Smartphone Penetration (average/user/month) +1.3% Blended 4G 1,195 +47% YoY +34% YoY +6 pp YoY +2.0% 1,179 1,155 Mobile Postpaid Voice Managing Postpaid C
Slide 8: RLAH accelerated the increase in data roaming traffic
RLAH accelerated the increase in Total data roaming Data roaming traffic traffic FY17 vs FY16 1 Roaming Data users in ‘000 2 Data per roamer (MB/month) x1.8 x2.5 x1.4 x1.6 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 (Roaming out, both E
Slide 9: Successful dual brand strategy and convergent offers in Consumer
Successful dual brand strategy 4-Play and convergent offers in the Households Consumer segment in 2017 Strong uptake of all-in offers, Solid increase in number of Average revenue per Household increasing 4-Play HH/SO HH/SO taking 4 Plays 2,952 2,937 2016 2017 Tuttimus/Bizz All-in subscribers in ‘000
Slide 10: Solid position in the Enterprise market with growing ICT
We keep a solid position in the Enterprise market with growing importance of ICT, ICT* vs total Enterprise convergence and innovation revenue FY17 Leveraging TELCO connectivity expertise Sustained growth in the enterprise revenue with targeted ICT integration with a shift in product mix +1.8% +1.7%
Slide 11: Enterprise benefitting from investments in growth areas
Enterprise benefitting from Proximus’ investments in the growth areas of the future FttB in 72 industrial zonings launched, and continuing predict prevent respond detect Security IoT Data Analytics Fiber 11
Slide 12: Enterprise segment maintaining a strong position in Mobile
Enterprise segment maintaining a strong position in Mobile… Mobile voice M2M # Users of cards Mobile data +3.5% +29% 1,169 1,209 +5.2% • High-quality mobile network 988 +5.0% +106.5% • Provide best E2E experience 939 • Managed mobile services 894 • Simplified offers 566 • Developing mobile applicati
Slide 13: Containing erosion of legacy services
…while containing the erosion of legacy services by bringing our customers to future proof technologies Fixed Voice lines Revenue share of out-phased ('000) Fixed data solutions -6.1% 660 16% 13% -6.5% 20% 620 580 2015 2016 2017 2015 2016 2017 • Dynamically guide • Migrate customers to future proof
Slide 14: Underlying Domestic EBITDA up by 2.0%
Underlying Domestic EBITDA Domestic up by 2.0% EBITDA excl. net roaming loss Domestic EBITDA (M€) +2.0% +4.7% 1,680 1,647 1,573 € -41M DM pressure net Roaming more than DM loss driven offset by solid 2015 2016 2017 by RLAH reduction in regulation cost base. Net Roaming DM refers to loss in RO DM, pa
Slide 15: Company transformation on track to meet cost ambition
Our ongoing company transformation keeps us well on track to meet our cost ambition of € -150M net by 2019 * Domestic expenses decreased by Including the benefit from a lower € 114M vs end-2015 Domestic headcount 1,766 ˜ 215M Gross savings Domestic FTE 1,652 13,627 13,095 ˜ 100M 12,644 Opex investme
Slide 16: Cost drivers: volumes, customer experience, innovation, inflation
Supporting growing Improving Customer Driving innovation Inflation-based cost volumes experience increases • Capacity driven • Migrations to latest • Fiber roll-out • Salary indexation maintenance costs technology • Hiring of new skills • Electricity prices • Spectrum licenses • Happy House visits •
Slide 17: Cost base benefits from network simplification
Proximus’ cost base benefits from the simplification of its Network 1st wave nearly completed, with all 2nd wave starting in 2018, switches long-term project transforming powered down end ’17 the network n° of Cost • outphasing legacy products switches saving: € -30m • consolidate > 400 local networ
Slide 18: Simplification of the distribution channel
And from the simplification of its distribution channel More efficient physical distribution network -35 shops Decreasing number of physical -22% shop stores, while rental cost enhancing digital 2017 vs 2015 channels YE2015 YE2016 YE2017 18
Slide 19: We increase e-interactions with customers
We increase e-interactions with customers MyProximus active users Chatbot Titus Av. monthly traffic First results after recent launch on commercial website +15% +27% of page visitors interact with Titus +30% of conversations with 2016 2017 App Titus, lead to Pack users Composer page (e-shop) e-share
Slide 20: Lower marketing and advertising costs
We grew our customer base at lower cost Marketing/Advertising through a more efficient cost 12% below 2015 use of marketing & advertising means -12% One brand for Fixed & Mobile: Proximus Less & more focussed campaigns Better use of our marketing channels Digitisation of - advertising - shop
Slide 21: Continued gross cost savings through transformation
After 2 years of important savings, we see continued gross cost savings through our company-wide transformation 75-80m gross savings/yr 2018 2019 2020 21
Slide 22: Transforming the company to improve customer experience
Transforming the company to further improve our customer experience while bringing some cost opportunities DIGITAL IT NETWORK TRANSFORMATION TRANSFORMATION TRANSFORMATION 22
Slide 23: Digital tools and new IT systems support call deflation
Digital customer tools and new IT systems will support call deflation and productivity in contact centers Decrease call center volumes Strong increase for digital Proximus Forum -15% x3.8 monthly visits to Proximus Forum Jan’16 Dec’17 Reduce ‘waste’ volumes in contact centers Improve 1st time ri
Slide 24: Creating future value through more advanced analytics
Creating future value through more advanced analytics Data management De-averaging Machine Learning Deep Learning GDPR as a constraint but also Richer data models for Predictive and prescriptive Starting to use Artificial as opportunity to invest in optimized return on network analytics for churn pr
Slide 25: Network transformation to enhance customer experience
10 GBPS to 100 GBPS Network transformation to further enhance customer experience and cope with steep traffic growth 1 2 3 FttH and FttB Further upgrading Scalable & robust in the access network the mobile network transport network x10 Upgrading interfaces from 10 to 100 Gbps to cope Bringing fiber
Slide 26: IT transformation
IT transformation 1 2 3 New, fully convergent 80% of Proximus Flexible & automated IT foundation enabling services platforms virtualized datacenter operations consistent customer experience by 2023 by 2020 across channels Starting in 2018: Starting in 2018 with gradual • Mobile data core (vEPC), mig
Slide 27: Future value from automation & cognitive technologies
Future value from automation & cognitive technologies Robotic Process Natural-language Drones Augmented Reality Automation processing Scaling up after Scaling up chatbots. Application of drones in Testing for support successful pilots Exploring voice-based IVRs, different domains under for field tec
Slide 28: BICS, a strong player in the ICS market
BICS, a strong player in the ICS market 28
Slide 29: BICS direct margin driven by non-Voice contribution
Direct margin of BICS mainly driven by growing contribution of non-Voice DM Share of Voice Share of Voice DM (2011) DM (2017) BICS Direct Margin 53% Evolution (M€) 44% 325 Thousands 275 Total DM 225 Inflection point, non-voice Non-Voice 175 outweighing legacy voice • High Growth • High Synergies pot
Slide 30: BICS benefiting from boosting mobile data volumes
BICS benefiting from the boosting Solid increase in mobile data volumes… non-Voice volumes (in M messages) Non-Voice revenue growing & Direct margin A2P (in M€) 350 8.6% 317 4,828 8.4% 292 35.7% 300 269 250 18.5% 3,558 200 6.3% 1.3% REV 3,002 150 145 154 156 DM 100 50 0 2015 2016 2017 2015 2016 2017
Slide 31: Managing the decline in legacy Voice
…while managing the decline High cash generator in legacy Voice thanks to scale & operating leverage Declining voice volumes Volume decline, destination mix and MTR (in M minutes) (in M€) downwards trend negatively impact revenue, though limited on DM 1,600 1,347 1,400 -0.3% 1,169 1,200 -7.0% -13.2%
Slide 32: BICS EBITDA margins improved, cash conversion high
Product mix puts pressure on EBITDA, but margins have improved, and cash conversion remains high EBITDA-Capex BICS segment result and margin Evolution (M€) -7.2% -4.2% 160 149 126 143 113 109 9.9% 10.2% 10.8% margin margin margin 2015 2016 2017 2015 2016 2017 32
Slide 33: TeleSign contributing to all growth dimensions for BICS
TeleSign contributing to all 3 growth dimensions for BICS 1 Customers Address new customer segments Solutions (MVNO, Internet companies, Enterprises) IoT Cloud Com TeleSign complementary customer base of >500 digital companies Roaming (mainly B2C), including 20 of the top 25 Internet brands Mobile
Slide 34: The first end-to-end CPaaS provider
The first end-to-end CPaaS provider has the customers and the platforms brings the mobile and worldwide reach Using BICS Worldwide network… to reach directly >700 mobile operators worldwide and improve sourcing of: Direct SMS and Voice Terminations Mobile End-User Data Voice APIs (e.g. Anonymous cal
Slide 35: Proximus Group
Proximus Group 35
Slide 36: We delivered our guidance 2017
We delivered our guidance 2017 Guidance Actuals metrics 2017 Domestic underlying +1.1% revenue Group underlying +1.5% EBITDA CAPEX € 1,092m* *Football broadcasting rights included. 36
Slide 37: Outlook for 2018
Outlook for 2018 Guidance Actuals Outlook metrics 2017 2018 Stable gross dividend Domestic per share 2017-2019 underlying 4,458m Nearly stable revenue Proximus expects to return Group underlying 1,823m Slight growth EBITDA CAPEX €1,092m* Around € 1Bn** *Football broadcasting rights included. **Excl.
Slide 38: Regulatory impact on revenue and direct margin
Regulatory measures on EU Roaming and Fixed Termination rates are impacting Proximus’ revenue and direct margin (EUR million) 2017 2018 Estimate Regulation impact on YoY Direct Direct Revenue Revenue variance Margin Margin Regulated price impact on -61 -61 -26 -26 Roam-like-at-Home pricing impact an
Slide 39: Q4 2017 results
Proximus Group Q4 2017 results
Slide 40: Q4 2017 Group highlights
Group Group FCF Revenue1 EBITDA1 Capex € 32M Commercial €1,477M €445M €385M or €-187M when drivers -0.9% YoY +1.0% YoY incl. TeleSign + 18,000 Domestic revenue Domestic EBITDA Capex FY’17 of €1,092M YTD FCF of €292M, or TV Households of €1,137M, +0.9% YoY of € 408M, +0.8% YoY €511M when excluding (u
Slide 41: Group revenue by quarter and segment
Group revenue by quarter (M€ & YoY %) Group revenue by segment (M€) 1,490 -4 12 5 -3 -24 1,477 -3.1% -3.0% -1.4% -0.8% 0.7% -2.9% -3.2% -0.9% 1,433 1,460 1,487 1,490 1,443 1,441 1,477 1,417 Domestic +0.9% 356 359 382 363 332 312 336 339 Group -0.9% 1,077 1,101 1,105 1,127 1,111 1,105 1,105 1,137 Q1'
Slide 42: Group revenue bridge Q4 and FY
( in M€ ) 10 -3 -2 2 1 5 -3 -24 Q4 1,490 1,477 Fixed Voice -11 Postpaid+5 Fixed Data +6 Prepaid -8 TV +4 Fixed Termin. -1 ICT +12 Domestic +0.9% Group -0.9% Q4'16 Fixed Mobile Mobile Advanced Subsidiaries Wholesale Other BICS Q4'17 services devices Business (Tango) Services 36 -23 31 10 3 13 -22 -14
Slide 43: Group customer base: Mobile, TV and Internet
Mobile Postpaid customer base up 3.9% YoY, driving stable TV customer base grew by 4.8% YoY and Internet base by 3.2% in growth in Mobile services, incl. significant RLAH impact spite of increased competition Mobile cards (ex- M2M in 000’s) YoY: TV customers • +145,000 4,924 4,919 4,915 4,918 4,897
Slide 44: Group direct margin
Domestic Q4 direct margin +0.5% to € 834m: Group direct margin by quarter (M€ & YoY variance) • Stronger ICT margin for the Enterprise segment Underlying Direct Margin (€m) • Wholesale Direct Margin up on low comparable base and benefitting from higher Visitor roaming 1.4% -0.5% 0.2% 0.1% -0.4% -1.1
Slide 45: Group expenses and workforce
Group expenses (M€) Group expenses (M€) workforce vs non-workforce Domestic vs. BICS Q’s FY -2.4% +2.2% 478 484 466 448 444 456 449 436 437 1,832 -55 12 1,789 190 189 155 182 156 174 162 149 151 +4.3% WF – 19 Incl. TeleSign 288 295 293 289 282 287 288 287 285 Non WF -37 +0.9% Q4'15 Q1'16 Q2'16 Q3'16
Slide 46: Group EBITDA
Q4 15 Domestic Q4 EBITDA up 0.8% to € 408m on higher direct -3 -7 margin, in spite of € -8m net loss in Roaming DM 445 441 BICS Q4 EBITDA +3.0% YoY to € 37m, including small TeleSign contribution. Organic EBITDA fairly stable YoY. Group +1.0% Underlying EBITDA Direct Margin Worforce cost Non Workfor
Slide 47: Capex 2017 increase, 2018 and 2019 around €1bn
Quarterly (M€) FY (M€) Football Football 1,092 Capex 2017 increase YoY • Renewal of 3-year contracts for football 385 broadcasting rights 314 281 237 215 183 221 205 • The start of Proximus’ Fiber for Belgium 949 project 2018 & 2019 around € 1bn Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 2016 2
Slide 48: FY'17 net income of €522m
FY’17 net income (Group share) of €522m, fairly stable compared to 2016. Higher underlying Group EBITDA and lower finance costs, partly offset by higher depreciation and amortization and an increase in tax expenses. YoY Net income (FY, M€) 27 12 -46 31 -19 523 -6 522 Net income Underlying EBITDA Inc
Slide 49: Free cash flow bridge
YoY FCF (FY, M€) Lower normalized Free Cash Flow YoY mainly driven by: • Higher prepayments of corporate -8.5% like-for-like income taxes (increased legal prepayment percentage to 59%) 29 -27 27 -14 559 -50 -20 219* • Higher Cash paid for Capex 7 511 • Higher Cash paid for the ongoing Early Leave Pl
Slide 50: Net debt and debt maturity schedule
Net Debt (YTD, M€) Dividends to Net Debt DEC FCF TeleSign non-controlling Net Debt DEC 2016 Normalized FCF acquisition Dividends interests 2017 511 -219 -488 -32 -1,861 -2,088 Debt maturity schedule (M€) Commercial Paper Institutional Eurobonds Ұ private placement • Credit ratings: Standard & Poor’s
Slide 51: Average debt duration, EMTN bonds and liquidity
Average debt duration Weighted average coupon Liquidity at end-December 2017 Amount Tenor Maturity Coupon ISIN • € 342m Investments, 405M EUR 7 years 7 February 2018 3.875% BE6215434620 Cash and cash equivalents • EMTN Programme: 3.500m EMTN 500M EUR 5 years 22 March 2022 0.500% BE0002273424 (2,255m
Slide 52: Consumer Results
Consumer Results
Slide 53: Consumer revenue, COGS and direct margin
Consumer underlying revenue (M€ ) & YoY +0.7% -0. 3% -1. 1% 1. 9% 1. 3 % 1. 9% 1. 7% -0. 1% -0. 5% • Trend prior quarters confirmed in Q4’17 for main 706 715 730 737 720 727 729 733 2,889 2,910 product lines Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 FY'16 FY'17 • Q4’17 Mobile devices revenue (
Slide 54: Consumer revenue by product group
Consumer revenue by product group Note In line with Proximus’ strategy, most products are sold through multi-play bundles. Therefore, the revenue and ARPU of standalone products are largely the result of the allocation of revenue and discounts to the respective products included in the Packs, as req
Slide 55: Consumer revenue bridge Q4 and FY
Q4 Q4 • Enlarging customer base with continued revenue growth in Q4’17 for 5 -8 TV (+4.6%) and Internet (+4.1%), partly offset by lower Fixed Voice 737 -6 6 4 1 -7 revenue (-4.6%) 733 • Q4’17 Mobile devices revenue (at low margin) lower YoY, on a high comparable base -0.5% • Continued positive trend
Slide 56: Consumer fixed data
Fixed data revenue (M€) & YoY 9.0% 10.0% 5.5% 4.9% +3 . 4% 4.0% 2.0% 3.7% 4.1% In a highly competitive quarter, Proximus achieved 147 151 150 151 153 154 156 157 599 619 higher net adds in comparison to the Q3’17 and to Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 FY'16 FY'17 the same period in 2
Slide 57: Consumer TV
Increasing customer base, an important revenue TV revenue (M€) & YoY variance driver, strengthened by successful year-end +7. 1% campaign for the Proximus brand, solid customer 10. 5% 7. 6% 10. 8% 11. 2% 9. 2 % 8.8% 6. 1% 4 . 6% 0 growth for Scarlet. Millions Millions 98 385 87 88 91 94 95 96 97 360
Slide 58: Consumer fixed voice
Fixed voice revenue (M€) & YoY variance -4. 6% -4 . 1% -3 . 5% -4. 5% -5. 1% -6. 3 % -3 . 1% -3 . 3% -5. 5% Total Fixed Voice customer base at 2,036,000. Proximus’ and Scarlet’s multi- 134 131 131 128 130 126 124 122 524 play offers continue to support the Fixed 503 Voice line. Q1'16 Q2'16 Q3'16 Q4'
Slide 59: Consumer mobile services
In spite of substantial roaming regulation headwinds, Mobile Postpaid revenue up by 2.4% in Q4’17, driven by expanding Postpaid customer base, improved customer tiering and reviewed mobile offers since mid-August. Revenue from Prepaid repeated a steep loss, resulting from significant YoY reduction i
Slide 60: Consumer postpaid and prepaid
Postpaid revenue (M€) & YoY variance 4. 9% 2 .4% 2 . 1% 2 . 5% 2 . 3% 3 .0% 2 . 6% 2 .4% +2 . 6% Q4 Postpaid revenue increased by 2.4%, in spite of the Roam-Like-At-Home (RLAH) headwinds, driven 210 213 218 215 215 219 223 221 856 878 by : Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 FY'16 FY'17
Slide 61: Tango revenue
Tango Q4’17 Consumer revenue up by 2.8% YoY, in spite of aggressive competitive market conditions, the Prepaid card identification legislation and the application of the RLAH Tango revenue (M€) & YoY variance legislation from 15 June 2017 9. 6% +3 . 4% 0. 5% -3 . 0% -0. 1% -4. 8% 0. 8% 0. 7% 2 . 8%
Slide 62: X-Play view
X-Play view 62
Slide 63: X-Play revenue bridge
Revenue in M€ Q4 34 -11 737 733 • Proximus’ strategy to focus on 34 28 attractive multi-play offers, -5 -5 29 30 supported by Tuttimus and Bizz -8 -4 60 56 All-in, resulted in continued 737 1 -5 uptiering to 4-Play, leading to HH/SO +2.2% 733 30 22 +2.2% 17.1% 4-Play revenue increase in Total Consum
Slide 64: X-Play revenue by play
Increasing 4-Play base is main revenue growth driver for Consumer 4. 0% 2 . 8% 2 . 1% 1. 7% 2 . 1% 3 . 3% 1. 7% 2 . 2% • Tuttimus/Bizz All-in driving uptiering to 4-Play X-Play revenue (M€) • Ongoing expansion of 4-Play base, +82,000 YoY incl. +14,000 & YoY variance 589 585 590 599 599 597 578 580 H
Slide 65: X-Play household growth by play
451 448 445 43 7 42 7 419 673 687 413 409 4-Play 555 564 574 605 640 662 2-Play growth & EOP growth & EOP -8 -6 (000) -3 -9 -10 (000) 31 -4 -3 -4 8 35 9 10 22 11 14 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'16 Q2'16 Q4'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 768 771 774 760 1,177 1,167 1,158 1,150
Slide 66: ARPH continues to grow on improved customer mix
X-Play 2 . 8% 2 . 1% 1. 6% 1. 6% 2 . 2% 3 . 3% 1. 8 % 2 . 6% • The overall ARPH continues to grow on improved ARPH (€) & customer mix with 4-Play ARPH up 1.0% YoY to € YoY Variance 65.3 65.5 66.6 66.0 66.7 67.7 67.7 67.7 115.7, driven by higher RGU’s Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 •
Slide 67: X-Play annualized churn rates
• The annualized full-churn rate on average for all Plays was 13.3 %, down 0.3pp from the previous year and quarter X-Play Annualized full churn 13.4% 12.0% 12.6% 13.5% 13.7% 11.7% 13.5% 13.3% • 4-Play churn remaining low at 3.0% rate Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 • 3 & 2-Play chur
Slide 68: Enterprise Results
Enterprise Results prog€imus
Slide 69: Enterprise underlying revenue, cost of sales and direct margin
Enterprise underlying revenue (M€) & YoY +1. 7% 0. 1% 5. 7% 0. 7% 0. 9% 4. 7% -1. 8% 0. 4% 3 . 5% • Q4‘17 revenue supported by 9.5% growth in ICT 1,376 1,399 333 349 338 357 348 342 339 370 revenues, and by the continued progress in Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 FY'16 FY'17 Advance
Slide 70: Enterprise revenue bridge Q4 and FY
Q4 4 370 12 0 2 357 -6 -1 • Operating in a competitive environment, Proximus’ Enterprise segment achieved a 3.5% growth in Q4’17 revenue +3.5% • Enterprise segment benefitted from a 9.5% growth in ICT revenues, and from the continued progress in Advanced Underlying Fixed Voice Fixed Data ICT Mobile
Slide 71: Enterprise fixed voice
Fixed voice revenue (M€) & YoY variance 0 -4. 4% -2 . 8% -4. 9% -5. 5% -5. 6% -7. 7% -8 . 7% -9. 7% 0 -7. 9% • The Enterprise segment continues to face ongoing customers rationalization of their Fixed Millions 0 61 60 58 58 57 55 53 52 0 237 218 line connections, lower usage, technology 0 0 migratio
Slide 72: Enterprise fixed data
Fixed data revenue (M€) & YoY variance -1.5% 1.1% 1.1% 1.0% -1. 0% -1.6% -0.9% -2 .7% -1.0% 0 Millions 0 • Q4’17 revenue from Fixed Data, consisting of Fixed 0 251 247 63 63 63 62 62 62 61 62 0 0 0 Internet and, for a greater part, Data Connectivity, Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 F
Slide 73: Enterprise ICT and Advanced Business Services
Underlying ICT revenue (M€) & YoY • Benefitting from the company’s strategic focus 14 . 2% 16. 1% 9. 5% 7. 2 % on ICT, EBU posted solid revenue growth for 1. 1% 1. 1% 2 . 1% -1. 3% 5. 3 % 0 Security, Unified Communication and Outsourcing services, was supported by higher 475 509 0 141 108 123 115 12
Slide 74: Enterprise mobile
• Q4’17 Mobile service revenue -0.4% YoY, improving sequentially • Further growth of Mobile customer base, +13,000 Mobile cards in Q4’17, in spite of the competitive setting, bringing the base to 988,000 cards, +5.2% YoY • Growth in customer base supported by low Mobile churn of 10.4%. Mobile servic
Slide 75: Wholesale underlying revenue and direct margin
Wholesale underlying revenue (M€) & YoY 8.0% 9.5% 10.3% • Q4’17 Financials of Wholesale segment compare to -4.9% -7.3% 1.1% -3.3% -1.6% +6. 5% low Q4 2016, with the regulated decrease in Fixed Termination Rates* since November 2016 lowering 48 49 51 46 52 48 56 51 194 207 the Q4’16 revenue and direc
Slide 76: BICS Results
BICS Results
Slide 77: BICS revenue, direct margin and segment result
For Q4’17, BICS posted revenue of € 339m, incl. 2 BICS Underlying Revenue (M€) & YoY variance months of TeleSign revenue. -9 .6% • BICS Organic Q4’17 -11.3%, reflecting the ongoing -5.6% -6.6% -6.6% -10.9% -12.7% -9.1% -12.9% -12.1% transition within the International Carrier market, with usage movi
Slide 78: BICS non-Voice revenue growth
25.3% revenue growth for non-Voice to BICS - Non Voice Revenue (M€) 25.3% € 90m for Q4’17 with Messaging volumes 8.1% 10.4% 7.5% 7.6% 0.6% 0.1% 7.9% 8.6% +109.2% YOY. 70 71 79 72 70 71 85 90 292 317 • A strong increase in A2P volumes, including a solid contribution of TeleSign, accelerating BICS’ Q1
Slide 79: BICS Voice transition to Data
BICS - Voice Revenue (M€) Ongoing transition within the International Carrier market, with usage moving from -8.4% -8.4% -14.6% -12.6% -14.5% -17.0% -16.2% -17.4% -14.1% Voice to Data. 1,169 1,003 286 288 303 291 262 241 251 249 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 FY'16 FY'17 • Erosion i
Slide 80: Additional info
Additional info • IFRS 15 • Spectrum • Shareholder structure • Pricing • CSR – some realisations • Contact details
Slide 81: Estimated financial impact 2018 reporting (IFRS 15)
• Under IFRS 15, as of 1 January 2018, revenue arising from customer contracts, is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer Main implications for 2018 reporting Estimated Proximus ap
Slide 82: New spectrum, renewal and expiry dates
Expiry dates Proximus OBEL Telenet 29/11/33 800 MHz 2 x 10 2 x 10 2 x 10 Proximus OBEL Telenet 15/03/21 900 MHz 2 x 12.4 2 x 11.6 2 x 10.2 Renewal Proximus OBEL Telenet 15/03/21 1800 MHz 2 x 24.8 2 x 24.8 2 x 24.8 Proximus OBEL Telenet Unallocated 15/03/21 2100 MHz 1 x 5.4 1x5 1x5 1x5 2 x 15 2 x 14.
Slide 83: Shareholder structure and number of shares
31 Number of % % % Number of Number of December shares Shares Voting Dividend shares with shares with 2017 rights rights voting rights dividend rights Belgian 180,887,569 53.5% 56.1% 55.9% 180,887,569 180,887,569 state Own shares 15,386,146 4.6% 0.0% 0.3% 0 858,433 Free-float 141,751,420 41.9% 43.9%
Slide 84: M4M pricing strategy for converged customers
M4M pricing strategy increasing value for converged customers with boosting data usage. Move from packs discounts to enhanced product features for convergent packs. Our mobile offer addresses the steep increase in mobile data consumption Mobile only Mobilus S Mobilus M Mobilus L 120 min 300 min Unlt
Slide 85: Positioning Scarlet as no frills brand
Positioning Scarlet as no frills brand, with very attractive pricing for ‘price seekers’ Postpaid Fixed Red Hot Chili HiFive € 23 / month Internet: 50 GB Extra € 3 per block of 50 GB €8 € 18 € 28 € 15 Down 30 Mbps Up 2 Mbps 150 min 500 min Unlt min 0 min 1000 SMS 2000 SMS Unlt SMS Unlt SMS 500 MB 2
Slide 86: CSR: Education, Environment, Communities
Education • Safe use of internet for children • Young people teaching the older children educated on a safe use of generation (www.webexperts.be) internet • Supporting technology-training for job seekers (www.proximusdigitalent.com) Environment • Reduce our CO2 footprint • -70% (2007-2015). • -30% (
Slide 87: Investor relations contact details
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 87
Slide 88: Cautionary statement
Cautionary statement “This communication might include some forward-looking statements, without limitation, regarding Proximus’ financial or operational results, certain strategic plans or objectives, macro-economic trends, regulation, future market conditions and other risk factors. These forward-l