Proximus Sa · EURONEXT:PROX
Proximus Sa — Belgacom — FY2009 Earnings Presentation
56 slides from Proximus Sa's earnings presentation, Feb 26, 2010
Slide 1: Full-year 2009 results
Full-year 2009 results
Slide 2: Content
Content Group Highlights & Summary Results slide 4-9 Strategic Progress slide 11-13 Consumer Business Unit CBU highlights slide 15-16 Operationals slide 17-22 P&L slide 23 Enterprise Business Unit EBU highlights slide 25-26 Operationals slide 27-31 P&L slide 32 Service Delivery Engine & Wholesale sl
Slide 3: Group Highlights
Group Highlights
Slide 4: Group financial highlights
Group financial highlights million € FY08 FY09 Var. Solid 2009 Group revenue in challenging economy Key group financials FY09 revenue slightly up: +0.2% Revenue1 5,978 5,990 0.2% Consumer: resilient revenue growth CoGS -1,975 -2,087 5.7% HR costs -1,124 -1,108 -1.4% FY09 +7.1%, Organic +1.2% Non-HR
Slide 5: Group operational highlights
Group operational highlights Solid operational result, strong growth convergent packs & Belgacom TV Packs growth & EOP (000) Record sales Packs: +106k in Q4’09 160 454 560 140 354 384 500 Successful convergence strategy 120 231 258 302 400 100 204 300 106 80 In 2009 258k packs added 60 40 70 200 51
Slide 6: Financial performance versus Guidance 2009
Financial performance versus Guidance 2009 Comfortably meeting 2009 guidance on all metrics Revenue guidance exceeded: FY’09 revenue at +0.2% yoy versus “about -1% yoy” EBITDA margin FY’09 of 32.6%, within guided range of 32%-33% Capex levels at 10% of Group revenue versus guided range of 10%-11% Me
Slide 7: 2010 Outlook & Regulation impact
2010 –Outlook & Regulation impact Against the current economic background and taking into account the estimated regulation impact, Belgacom expects for the FY2010: To increase its Group revenue between 8% and 9% ; with BICS Outlook consolidated at 100% 2010 EBITDA margin within the range of 30% - 31
Slide 8: Dividend return
Dividend return Normal dividend of € 1.68 per share Belgacom Board of Directors approved to propose to the AGM of 14 April 2010, the payment of a normal dividend of € 1.68 per share, in addition to the paid interim dividend of €0.40 per share. Payment date: 23 April 2010 Record date: 22 April 2010 E
Slide 9: New Shareholder Return Policy
New Shareholder Return Policy Increased transparency on shareholder return intentions On 25 February 2010, the Belgacom Board of directors approved the shareholder return policy to be as follows: Belgacom commits to an attractive shareholder remuneration policy by returning, in principle, most of it
Slide 10: Strategic progress
Strategic progress
Slide 11: Strategic update - 1
Strategic update - 1 Good strategic progress in 2009 Move Total Packs up ~85% yoy to total of 560k Growth customers from Belgacom TV customer base up ~50% to 752k via single-play Full end-to-end solutions for enterprises Cross sell to multi- play Convergent offers for SME’s and self-employed Fiber*
Slide 12: Strategic update - 2
Strategic update - 2 Good strategic progress in 2009 Consistent M&A strategy Growth Disciplined Focus on Belgium: Organic growth and innovation via & focus on Belgium Outside opportunities monitored in disciplined way M&A Strict valuation criteria, focus on shareholder value Strengthen Address chang
Slide 13: Strategy – 2010
Strategy – 2010 One priority & 4 pillars Belgacom continues to execute upon its long-term strategy focused on Convergence Belgacom sets for 2010 a strong focus on end-to-end customer satisfaction Customer centricity Become the preferred supplier End-to-end Sustainable growth Capture value through cr
Slide 14: Consumer Business Unit (CBU)
Consumer Business Unit (CBU)
Slide 15: CBU Financial Highlights
CBU Financial Highlights Resilient to crisis, reported revenues +7.1% Strong revenue performance 2009: CBU resilient to crisis Reported revenue +7.1% yoy - including acquisitions Organic revenue +1.2% yoy Excl. regulation impact of € 25m, underlying business growing 2.3% yoy Reported 2009 total oper
Slide 16: CBU Business Highlights
CBU Business Highlights Record sales of Packs and Belgacom TV +246k new TV customers in 2009 with all-time high record in Q409 of +89k ARPU up >5% yoy to €20.4 Strong take-up of Packs: +85% yoy to a total of 560k Packs by end 2009 Fixed line loss stabilized driven by success of Packs & flat rate off
Slide 17: CBU Voice – Fixed
CBU Voice – Fixed Revenue -6.3%, line loss improved while ARPU kept stable Fixed voice revenue (EUR mio) Revenue decreased 6.3% yoy to € 561m 153 149 147 150 Double tariff decrease F2M-traffic impacted H109 144 141 138 138 Q4 no longer benefitting from price indexation Line loss and lower usage Q108
Slide 18: CBU Voice – Mobile
CBU Voice – Mobile Revenue -2.8%, larger customer base offset by decline in ARPU Mobile voice revenue (EUR mio) FY ‘09 revenue of €704m, or -2.8% 185 183 180 179 Mobile regulation impact 176 178 176 170 Customers optimizing mobile spending As from Q3 yoy evolution improved considerably Q108 Q208 Q30
Slide 19: CBU Data – Fixed
CBU Data – Fixed Revenue +3.1%, customer increase offsetting lower ARPU Fixed data revenue (EUR mio) Internet revenue +3.1% yoy to €323m 82 84 H209 no longer impacted by discounts 2008 year- 80 80 76 78 79 78 end promo Increase in internet customers due to Packs Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q4
Slide 20: CBU Data – Mobile
CBU Data – Mobile Revenue +9.1%, both SMS and advanced data solidly growing Mobile data revenue (EUR mio) FY’09 revenue up 9.1% to €303m 80 Driven by increased SMS revenue (+8.1% yoy) & 77 75 70 69 71 71 advanced data revenue (+12.2% yoy) 67 Net data ARPU yoy+6.3% to €6.7 Q108 Q208 Q308 Q408 Q109 Q2
Slide 21: CBU – Belgacom TV
CBU – Belgacom TV Revenue +55.2%, strong customer acquisition & increased ARPU TV revenue (EUR mio) FY’09 TV revenue +55.2% to €134m 40 29 30 34 Strong customer growth 23 24 20 18 TV full-year EBITDA positive Contributing for >5% to CBU revenue Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 TV growth & EOP
Slide 22: CBU – Tango
CBU – Tango Tango consolidated as from 1 August’08 Total Tango FY ‘09 revenue of €93m Q409 impacted by roaming regulation on voice & SMS FY’09 total mobile customer base of 259 or +14k compared to year-end 2008 FY’09 blended net mobile ARPU of €23.9 Year ended 31 December 2009 1 Revenue (in EUR mio)
Slide 23: CBU P&L
CBU P&L Cost increase driven by acquisitions & change in revenue mix CBU revenue (EUR mio) 617 Resilient revenue, +7.1% yoy incl acquisitions 604 602 593 591 Organic revenue +1.2% yoy 553 560 548 Growth in Data revenue (+5.9%) and TV (+55.2%) offsetting decline in Voice Q108 Q208 Q308 Q408 Q109 Q209
Slide 24: Enterprise Business Unit (EBU)
Enterprise Business Unit (EBU)
Slide 25: EBU Financial Highlights
EBU Financial Highlights Not fully immune to crisis, impact limited FY’09 revenue of € 2,501m. Partly exposed to economic crisis, but impact limited Underlying business revenue -3.1% yoy Reported 2009 revenue -7.2% yoy – including revenue loss from divestments & regulation Impact crisis did not wors
Slide 26: EBU Business Highlights
EBU Business Highlights Impact crisis visible in IT-related projects & mobile usage Impact crisis mainly visible in IT-related projects and Mobile usage Yoy order level slightly up, solid Q4’09 driven by catch-up of delayed orders and seasonality effect Customer cost savings and increased bankruptci
Slide 27: EBU Voice – Fixed
EBU Voice – Fixed Revenue affected by line loss & lower usage per line Fixed voice revenue (mio) Revenue decreased 5.6% yoy to € 574m 157 155 150 148 Double tariff decrease F2M-traffic impacted H109 146 144 142 139 Q4 no longer benefitting from ‘08 price indexation Line loss and lower usage Q108 Q20
Slide 28: EBU Voice – Mobile
EBU Voice – Mobile Sound customer growth offset by lower mobile usage & regulation Mobile voice revenue (mio) FY ‘09 revenue of € 560m, or -10.2% 164 159 153 148 Crisis pressured mobile usage 146 144 135 135 Mobile regulation impact Partly offset by growing customer base Q108 Q208 Q308 Q408 Q109 Q20
Slide 29: EBU Data – Fixed
EBU Data – Fixed Revenue impacted by saturation broadband & migration Explore Fixed data revenue (mio) FY’09 revenue of €401m or -1.6% 103 103 101 101 101 100 100 100 Flat Internet revenue Ongoing migration1 to more advantageous Explore Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 platform impacts Data c
Slide 30: EBU Data – Mobile
EBU Data – Mobile Revenue solidly growing, advanced data nearly +20% Mobile data revenue (mio) 48 Solid revenue growth, yoy +13.7% to €184m 46 47 42 43 Strong growth Mobile internet subscribers 40 41 39 Advance mobile data yoy +19.8% to € 126m New offers & promotions lower threshold Q108 Q208 Q308 Q
Slide 31: EBU – ICT
EBU – ICT Organic revenue decline limited, minor impact on EBITDA Revenue pressure by downturn limited Yoy revenue decline -on a comparable basis- limited to 2.4% FY09 impact divestments € 69m solid revenue in Q409 - catch-up delayed projects - positive seasonality effect Impact crisis mitigated imp
Slide 32: EBU P&L
EBU P&L Segment contribution margin up from 47% to 49% EBU revenue (EUR mio) 690 FY’09 revenue of € 2,501m v.s. € 2,696m in ’08 (-7.2%) 675 680 651 640 626 632 Organic revenue – 4.2%, underlying -3.1% 602 Lower Fixed & mobile voice and ICT Mobile Data revenue +13.7% Q108 Q208 Q308 Q408 Q109 Q209 Q30
Slide 33: Service Delivery Engine & Wholesale (SDE&W)
Service Delivery Engine & Wholesale (SDE&W)
Slide 34: SDE&W highlights
SDE&W highlights P&L Mobile SDE&W revenue (EUR mio) Fixed Revenue -7% yoy to €386m, Q4 stable yoy 20 22 21 21 19 21 19 19 Lower interconnect & transit traffic revenue 90 81 81 79 81 Regulation (Roaming-In, Brotsoll, bitstream) 78 74 75 Partly offset by increase data & capacity revenues Q108 Q208 Q30
Slide 35: Staff & Support (S&S)
Staff & Support (S&S)
Slide 36: S&S highlights
S&S highlights S&S revenue (EUR mio) YoY revenue -2% to € 33m Positive impact of capital gain on disposal of 12 building in Q209 9 10 7 8 7 6 8 Offset by lower revenues from catering following Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 cost reduction program S&S Personnel Costs (EUR mio) Personnel cost
Slide 37: International Carrier Services (ICS)
International Carrier Services (ICS)
Slide 38: ICS highlights
ICS highlights Revenue up nearly 10% yoy ICS total revenues (EUR mio) Strong revenue growth of 9.9% yoy 230 227 228 221 Double digit growth first three quarters’09 207 217 185 190 Q409 impacted by weaker dollar Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Premium Products Standard Products Direct Routing
Slide 39: ICS highlights
ICS highlights EBITDA +21.7% with EBITDA margin of 8.7% Non-Voice ICS Direct Margin (EUR mio) Voice FY09 ICS gross direct margin +12.6% yoy driven by strong volume growth 16.7 13.0 13.9 13.2 12.3 15.2 14.0 FY09 voice direct margin of €85m,+12.2% yoy 11.1 22.2 23.5 FY09 non-voice direct margin €58m,
Slide 40: Closing MTN transaction
Closing MTN transaction From proportional to full-consolidation BEFORE AFTER BICS ownership BICS ownership 72% Belgacom 57.6% Belgacom 28% Swisscom 22.4% Swisscom 20% MTN Governance Governance BICS is considered as a jointly controlled December 2009: no change. Joint entity (or joint venture) by Bel
Slide 41: Closing MTN transaction
Closing MTN transaction 1 January 2010: Belgacom acquires control of BICS Recognition of a non-cash capital gain in Q1 2010 re-measurement of previous held interests in BICS at fair value through P&L classified as non-recurring revenue Purchase price allocation All identified assets (incl. customer
Slide 42: Group Financials
Group Financials
Slide 43: Consolidated income statement
Consolidated income statement FY08 FY09 % var (EUR million) TOTAL REVENUE before non-recurring items 5,978 5,990 0.2% Solid revenue in difficult economy Costs of materials and charges to revenue -1,975 -2,087 5.7% Lower headcount and cost cutting Personnel expenses and pensions -1,124 -1,108 -1.4% p
Slide 44: Operating expenses - Non-HR expenses
Operating expenses - 1 Non-HR expenses In anticipation of the impact of the economic recession, Belgacom launched at the start of 2009 a company-wide cost reduction program resulting in important cost savings. FY09 non-HR expenses -5.7%; organically -7% yoy Result of cost reduction initiatives compa
Slide 45: Operating expenses - Personnel Costs
Operating expenses - 2 Personnel Costs PERSONNEL EXPENSES & 2008 2009 var. % PENSIONS FY09 Personnel costs down 1.4% yoy in € million Past & ongoing headcount reduction GROUP -1,124 -1,108 -16 -1.4% CBU -325 -345 20 6.2% programs EBU -408 -379 -28 -6.9% Offsetting salary indexation SDE -209 -193 -17
Slide 46: Operating expenses - Sales related costs
Operating expenses - 3 Sales related costs FY09 cost of sales +5.7% or €112m yoy mainly SALES RELATED COSTS 2008 2009 var. % due to a changing revenue mix in € million GROUP -1,975 -2,087 112 5.7% €76m cost contribution Tango & Scarlet CBU -553 -723 170 30.8% Remaining increase CBU: EBU -844 -748 -9
Slide 47: Investments
Investments Belgacom Group invested €597m or 10% of Group revenue, fully meeting FY09 guidance €45m Broadway (VDSL & fibre to the street cabinet) to reach a population coverage of 73% €40m MaIP €39m on further roll out 3G to reach a coverage of 96.7% 2008 capex impacted by renewal of football broadc
Slide 48: Free cash flow (in million €)
Free cash flow (in million €) FY’09 FCF amounted to €797m or €388m higher than 2008 due to: FY’08 FCF impacted by the acquisition of Tango & Scarlet for €380m net of cash FY’09 FCF impacted by payment of fine to Belgian Competition Authority (€66m) & share dilution in BICS following the MTN transact
Slide 49: Net financial position (in million €)
Net financial position (in million €) Belgacom continues to have a sound financial position Net debt level of €1.7 billion or €119m lower than end 2008; i.e. 0.9x EBITDA Lower debt mainly results from FCF exceeding dividend payment 797 (1,716) 7 (1,835) (684) Net debt December FCF Dividends Other Ne
Slide 50: Balance Sheet
Balance Sheet 31-Dec 31-Dec (EUR million) 2008 2009 TOTAL ASSETS 7,782 7,450 Non-recurrent assets 5,564 5,505 Goodwill 2,111 2,088 Goodwill decreased €23m following Intangible assets with finite useful life 552 623 finalisation of purchase price Property, plant and equipment 2,501 2,420 Enterprises
Slide 51: Annex
Annex Regulation Macro economic environment Belgacom Shareholder structure
Slide 52: Regulation: roaming
Regulation: roaming VOICE I Roaming I regulation Retail Retail Wholesale € cent (excl. VAT) Outgoing Incoming Outgoing June 2007: the European Commission introduced Before Regulation* 95 43 44 a regulation setting retail and wholesale caps on prices of End Aug/Sept '07 49 24 30 voice call roaming fo
Slide 53: Regulation: MTR
Regulation: MTR Decrease of asymmetry as of mid-2010 MTR rates Belgium MTR rates remained unchanged since mid 2008 In January 2010, the BIPT published its draft decision on the MTR glide path 2010-2013: As from mid-2010, asymmetry reduced to 9% with Mobistar and 26% with Base Draft BIPT decision on
Slide 54: Macro economic environment
Macro economic environment GDP growth (%)1 Unemployment rate (%)2 1.4% 1.7% 1.2% 8.6% 8.8% 7.9% 1 2 3 4 7.0% -3.0% 2008 2009 2010 2011 2008 2009 2010 2011 1 2 3 4 Inflation (%)1 Evolution bankruptcies 2009 (%)3 4.2% 34% 26% 22% 20% 16% 11% 12% 1.6% 1.7% 6% 5% 7% 5% -10% 1 2 3 4 5 6 7 8 9 10 11 12 0.
Slide 55: Belgacom Shareholder structure
Belgacom Shareholder structure End December 2009, the Belgian State owns 53.5% of total shares % total % voting % dividend Belgacom ownership Shares shares rights rights Belgian State 180,887,569 53.5% 56.4% 55.9% Belgacom treasury shares 17,410,452 5.2% 0.0% 1.0% Free float 139,727,114 41.3% 43.6%
Slide 56: For further information: Belgacom Investor Relations
For further information: Belgacom Investor Relations e-mail: investor.relations@belgacom.be Tel: +32 2 202 82 41 http://www.belgacom.com Slide 56