Proximus Sa · EURONEXT:PROX
Proximus Sa — Q2 2023 Earnings Presentation
41 slides from Proximus Sa's earnings presentation, Jul 28, 2023
Slide 1: Proximus Group Results presentation Q2 2023
1 Proximus Group Results presentation Q2 2023 28 July 2023 Guillaume Boutin, CEO Follow the webcast here. To ask a question, register here for the Q&A.
Slide 2: Cautionary statement
2 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 resul
Slide 3: Agenda
3 Agenda • Highlights Q2 • Execution bold2025 • Financial & Operational performance • Outlook 2023 • Q&A
Slide 4: Highlights Q2
4 Highlights Q2
Slide 5: Proximus Group delivering 4.0% revenue growth in Q2
5 Proximus Group delivering 4.0% revenue growth in Q2 EBITDA landing well in line with expectations Key strategic Continued strong Continuing strong developments commercial momentum revenue growth Revenue YoY +110K Fiber HP in Q2; 25% +34K +13K footprint, Fiber deployed in 115 Fiber activated 4.2% c
Slide 6: bold2025 strategy
6 We deliver great value for through exceptional our stakeholders strengths Act for an inclusive society & Roll out #1 gigabit network Major steps in the be sustainable in everything we do for Belgium execution of our bold2025 strategy Delight customers with Engineer technology assets to enable digi
Slide 7: Increasing Fiber footprint to 25% end-June 2023
7 7 Increasing Fiber footprint to 25% end-June 2023 Proximus and partners deploying Fiber in 115 cities “With Fiber bringing substantial benefits, a Fiber collaboration and co- investment framework in Belgium would benefit the whole Country.” 115 Cities and municipalities with Fiber works ongoing >5
Slide 8: Passing close to 1.5M premises end-June
8 Passing close to 1.5M premises end-June JVs Fiber in the Street funnel growing to > 300K 1,483k Fiber Homes & +110k Fiber Homes & 25% Businesses Passed Businesses Passed Network filling rate* (in K, total base) (in K, additions in the period) +43.8% 158 25% Fiber JVs 1,483 11 PXS 3.0% 1,373 1,282
Slide 9: 322k activated Fiber lines by close of Q2 2023
9 322k activated Fiber lines by the close of Q2 2023 Strong customer demand for Fiber, migration rate reaching 70% Total park & net adds1 (in K) 322 288 Increasing Fiber share Lower churn in total acquisitions levels vs Copper 252 220 36 34 194 27 31 +47% >30% 2 23 Q2’22 Q2’23 70% ARPC in €3 68% +€7
Slide 10: 10 Gbps technology launched nationwide
10 10 Gbps technology* launched nationwide the fastest internet available in Belgium From 10th July, 3 superior internet speeds made available to residential customers and more speed for existing fiber customers Gbps 8.50 Ultra Fiber 1.00 42€ + 2.50 Giga Fiber + 15€ 0.50 0.50 Mega Fiber 0.50 Coax co
Slide 11: Proximus Enterprise becomes Proximus NXT
Group 11 Proximus Enterprise becomes Proximus NXT Full-service technology solutions leader in Benelux Laser-focused on 4 key domains: Cybersecurity (MDR, SECaaS, threat intelligence…) Cloud (Sovereign, Hybrid…) Advanced Workplace (Contact centre in the cloud, WPaaS, Chatbot…) AI (Generative, Machine
Slide 12: Major step in International segments strategy: Route Mobile
12 Major step in International segments strategy, becoming one of the worldwide leaders in digital communications Agreement for acquisition of controlling interest of ≥ 57.56% in Route Mobile. Highly value accretive transaction, with high product and footprint complementarity between Route Mobile an
Slide 13: Financial & Operational performance
13 Financial & Operational performance
Slide 14: Domestic
14 Domestic
Slide 15: Excellent commercial performance on new Mobile offers and Fiber
15 Domestic 15 Excellent commercial performance on combined success of new Mobile offers and Fiber Postpaid Internet base 2,240K; TV base 1,694K; Postpaid base 4,875K; Fixed Voice 1,727K; + 38k YoY - 37k YoY + 133k YoY -178k YoY +1.7% YoY -2.1% YoY +2.8% YoY -9.4% YoY Net adds; Group (‘000) -32 -46
Slide 16: Residential revenue Q2 +4.2%
Residential 16 Residential revenue Q2 +4.2% sustained strong Services revenue growth Residential revenue (€M, YoY ) 5.9% 4.3% 4.2% 3.0% 0.7% • Customer Services revenue +4.2% 570 576 585 585 562 60 65 62 59 58 ✓ Excellent customer growth for Mobile 54 67 67 64 postpaid (Q2 +41,000) and Internet (Q2
Slide 17: Growing Convergent base and higher ARPC
Residential 17 Growing Convergent base and higher ARPC driving Residential customer services revenue increase +4.2% Customer Customers (in K) +4.7% ARPC (overall, €) Growing Convergent base: services revenue (in €M) Supported by price indexations , +5.4% YoY upsell to convergent offers and Incl. +7.
Slide 18: Successful value management supported by product superiority
Residential 18 Successful value management supported by product superiority Strong ARPC, improving churn and accelerated customer growth Convergent Convergent + Fixed only + Mobile only Sustaining a Price rises having While driving Empowering high positive customer only constrained meaningful ARPC p
Slide 19: Business revenue grows +2.9% YoY
Business 19 Business revenue grows +2.9% YoY growing Services revenue and strong performance on IT products Business revenue (€M, YoY ) Q2 revenue 6.2% Services revenue +0.8%, 3.7% 4.1% 2.9% Solid growth in Fixed Data and IT Services outpacing a 0.6% moderating Fixed Voice erosion 497 487 482 468 47
Slide 20: Sustained B2B Services revenue growth in Q2
Business 20 Sustained B2B Services revenue growth in Q2 Fixed Data and IT Services growth, outpacing Fixed Voice erosion Business Services revenue (€M) Q2 +0.8% 402 +2.3% Fixed Data 399 -7.8% > Internet revenue up: +6.6% ARPU & stable base 68 63 Growing share of Fiber +2.3% > Stable data connectivit
Slide 21: Wholesale Q2 Services revenue +6.9%
Wholesale 21 Wholesale Q2 Services revenue +6.9% continued decline in interconnect revenue Wholesale revenue (€M, YoY ) -2.3% -0.7% -4.1% • Q2 Fixed & Mobile Services 72 -8.1% -10.7% revenue +6.9%: 70 69 62 67 > Higher roaming revenue > Services revenue from JVs 34 35 34 30 30 • Interconnect revenue
Slide 22: Sustained strong Domestic revenue growth
22 Domestic 22 Sustained strong Domestic revenue growth, +4.2% YoY revenue from Services up by +2.8% YoY All customer Revenue units delivering Q2 (underlying, €M) Services revenue 4.2% growth 21 1,147 19 3 2 1,101 +2.8% Services revenue Q2’22 Residential Business Wholesale Non-Services Q2’23 Custome
Slide 23: Continued cost efficiency delivery moderates inflation effect
Domestic 23 Continued cost efficiency delivery moderates inflation effect Customer opex increases driven by strong commercial momentum OPEX (underlying, €M) Domestic Opex (€M) Q2 8.8% Q2 8.8% 446 20 446 16 409 409 Q2’22 WF Non-WF Q2’23 Domestic headcount (FTE) -50 10,419 10,369 Q2’22 Lower Inflation
Slide 24: Domestic EBITDA reflecting inflation impacts
24 Domestic 24 Domestic EBITDA reflecting inflation impacts, partially offset by improved direct margin EBITDA Q2 (underlying, €M) -3.5% 21 16 431 20 416 Q2’22 Direct Margin Workforce costs Non-Workforce costs Q2’23
Slide 25: International
25 International
Slide 26: BICS grew Q2 EBITDA by 2.8%
26 BICS 26 BICS grew Q2 EBITDA by 2.8% despite wage-inflation impact Q2 Revenue (€M, YoY ) 20.4% Enterprise Telco 16.4% Starting to cycle against revenue: revenue: 11.2% -1.1% YoY -1.0% YoY 7.1% higher comparable base 270 267 311 -1.1% with 2022 normalizing 307 62 270 262 267 from Covid-19 impacts 6
Slide 27: Telesign Q2 revenue +18.9%
27 Telesign 27 Telesign Q2 revenue +18.9% Continued growth for both Digital Identity and Communication +21.9% Digital identity growth driven by Revenue (€M, YoY ) 61.5% in CC expansion of customers base 39.5% 44.0% 19.5% outside the U.S. 18.9% Communication positively 140 impacted by largest U.S. cl
Slide 28: Group
28 Group
Slide 29: Group direct margin up by 2.1% YoY
29 Group 29 Group direct margin up by 2.1% YoY anticipated inflationary pressure mainly affects domestic EBITDA Revenue Direct Margin 4.0% 2.1% 46 20 1,495 21 1 1 951 1,437 -6 931 -3 -3 +4.2% -1.1% +21.9%* +2.5% +1.0% +8.2%* Q2’22 Domestic BICS Telesign Others** Q2’23 Q2’22 Domestic BICS Telesign Ot
Slide 30: Investments tracking on plan: YTD-June Capex of €612M
30 Group 30 Investments tracking on plan YTD-June Capex of €612M Group Capex €M, excl. spectrum & football rights • Proximus Fiber build volumes reducing +9.8% • Fiber customer termination and activation cost 612 rising 557 • Other capex: • IT and content timing effects • Ongoing implementation of M
Slide 31: YTD June adjusted FCF of €-99M
Group 31 Ytd June adjusted FCF of € -99M EBITDA and Tax impacts partially offset by less BWC needs (€M) 12 -3 -15 -33 104 -17 -99 -24 -124 -128 -21 FCF Acquisitions FCF Underlying Interest on BWC Other FCF Acquisitions FCF YTD’22 2022 YTD’22 Ebitda Tax Spectrum YTD’23 2023 YTD’23 adjusted payments a
Slide 32: Proximus continues to manage a sound financial position
Group 32 Proximus continues to manage a sound financial position Adjusted Net Financial Position (excl. lease liabilities) Credit ratings (YTD, €M) S&P BBB+ (stable outlook) Moody’s A2 (stable outlook) -2,758 2.0 % Weighted average coupon -124 (long-term only) -226 -14 * -3,121 Net fin Free Cash Div
Slide 33: Reiterating 2023 guidance
Group 33 Reiterating 2023 guidance Domestic revenue expected to be at the upper-end of the range Guidance metrics FY2022 YTD 2023 Outlook Dividend over 2022 result FY 2023 Dividend over 2023 result AGM approved annual gross dividend Intention to pay over result 2022annual gross dividend of € 1.2/sha
Slide 34: Q&A
34 Q&A To ask a question, join the conference call → Register here for the Q&A to receive your dial-in details.
Slide 35: Appendix
35 Appendix
Slide 36: From reported to underlying – EBITDA adjustments
36 Appendix 36 From reported to underlying – EBITDA adjustments Q2’22 Q2’23 473 463 -20 3 2 6 447 446 6 -19 11 -1 3 Reported Lease Lease Transformation Acquisitions, Litigation / Underlying Reported Lease Lease Transformation Acquisitions, Litigation / Underlying depreciations interest mergers and r
Slide 37: EBITDA conversion to FCF over H1 2023
Appendix 37 EBITDA conversion to FCF over H1 2023 (€M) 892 879 -13 -71 -740 -76 -50 -17 -24 -99 -24 -124 Reported Adjustments Underlying BWC Cash Tax payments Interest Early Leave Others FCF Acquisitions FCF Ebitda Ebitda Capex payments Plan/FFP Plan YTD’23 2023 YTD’23 YTD’23 YTD’23 adjusted • Early
Slide 38: Net income (Group share)
Appendix 38 Net income (Group share) (€M) -22.4% 243 -33 15 2 188 -14 -2 -24 Q2’22 Underlying Adjustments D&A Net Tax expense Others (*) Q2’23 Ebitda finance result * Includes Non-controlling interests and Share of loss from associates
Slide 39: Continued access to credit markets
Appendix 39 Continued access to credit markets & near term refinancing secured at low interest rates Debt maturity schedule (€M) * >99% of outstanding LT debt at fixed rate 750 400 600 500 500 7 years weighted average debt duration1 2% weighted average coupon1 150 150 100 11 2023 2024 2025 2026 2027
Slide 40: Shareholder structure
Appendix 40 Shareholder structure Status 30/06/2023 Total number of shares Free-float Belgian Government Market Capitalization Dividend yield 338,025,135 42% 54% ~€ 2.5Bn ~17.5% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with divi
Slide 41: Contact Investor Relations
41 Contact Investor Relations Call: Proximus Investor +32 2 202 82 41 E-mail: Relations website: +32 2 202 62 17 investor.relations@proximus.com www.proximus.com/en/investors