Slide 1: Roadshow presentation Q1 2012
Roadshow presentation Q1 2012
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements about Mobistar, in particular for 2012. Although Mobistar believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not
Slide 3: Key Operational Highlights
Key Operational Highlights Version 1 - November 2009
Slide 4: Mobistar continued to grow above market, excl. regulatory effects
Excl. regulatory effects, Mobistar (excl. MES) continued to grow above market fuelled by Orange Luxembourg and handsets sales •Mobistar group turnover evolution (in Mio EUR) 1.665 401 -12 +11 399 1.658 -8 +3% -3 +93 -74 +49 1.567 -58 -60 -32 +6% +3% -14 -26 2009 Regulatory Organic 2010 Regulatory Or
Slide 5: Mobistar confirms its position as a full telecom player
Mobistar confirms its position as a full telecom player •Q1 2011- Q1 2012 evolution/ Q1 2012 customer base •Residential Market Voice Data TV + 29.000 Res Close to 100.000 Mobile Postpaid Mobile broadband customers cards 2/3 of our ADSL 35.000 More than 82.000 Fix clients are fix voice Mobistar Digit
Slide 6: 2011 performed in line on guided KPIs; dividend of 222 Mio EUR
During 2011, Mobistar performed in line on all guided KPI’s and will pay-out a dividend totaling 222 Mio EUR or 3,7 EUR/share 2011 2011 guidance results Total Turnover In line with 2010 Small contraction by -0,4% between Ebitda 520 - 535 M EUR (from 505-535 M EUR) 530,1 M EUR Between Capex/service r
Slide 7: Mobile Activity – Negative Net Adds Q1 2012
Mobile Activity – Negative Net Adds Q1 2012, due to underperforming prepaid segment and correction in MVNO base Market net adds (k users) Mobistar net adds split (k users) Net Adds Active (k users) Penetration % 53 112% 112% 113% 114% 115% 109% 108% 111% 112% 271 38 44 162 32 28 183 150 36 105 22 78
Slide 8: Mobistar Customers
Mobile activity- Postpaid share as % of customer base further increases (active ending base) to 67% 4,105,423 4,089,532 3,746,515 3,950,521 3,738,603 3,489,859 3600000 3000000 Mobistar Customers 2400000 66% 67% 1800000 61% 64% 54% 57% 1200000 600000 0 2007 2008 2009 2010 2011 Q1 2012 Postpaid Postpa
Slide 9: Mobile activity - Blended ARPU 12 month rolling
Mobile activity - Blended ARPU -12 month rolling for Q1 2012 - excl. MVNO (visitor roaming incl.) * Mb = data usage (per unique mobile multimedia user) * number of unique mobile multimedia users / active ending base total market (MVNO excl) mobile offers 9
Slide 10: Mobistar Key Priorities
Mobistar Key Priorities Version 1 - November 2009
Slide 11: Social and telecom behaviors feed Mobistar's vision
The evolution of social and telecommunications individualistic behaviors are feeding Mobistar’s vision for the future • 58% Europeans need to be connected anytime • 84% French people use personal devices at work • 27% French people use social networks at work • 30% Netherlanders work at home • 37% E
Slide 12: Mobistar has defined 3 priorities to enable its vision
Mobistar has defined 3 priorities to enable its vision of the future Consolidate 3G/4G networks Leadership in + Voice& Data Mobile Abundance Differentiate “À la carte” vs. Revenue growth with services “All you can eat” above market everywhere convergence growth Deliver A new deal with Best in class
Slide 13: New postpaid animal portfolio
New innovative postpaid animal portfolio give Belgians the control of their mobile consumption • The new Mobistar subscriptions are named after animals: Squirrel, Kangaroo, Dolphin and Panther. • This concept of differentiation by animal names has been proven to work in other countries. • The differ
Slide 14: First to anticipate the new Telecommunications Law
Launched in April 2012, Mobistar is the first to anticipate the new Telecommunications Law 100,000+ tests completed online in 1 month 14
Slide 15: Commercial innovation on data
On data, Mobistar continues to commercially innovate to capture increasingly equipped consumer Mobile Multimedia line-up Market trends • Almost 1out 5 Belgians has a smartphone • In 2011, close to 1 out of 3 new handsets sold was a smartphone • Sales of tablets was multiplied by a factor 7 to 350 k
Slide 16: MATMA segment passes 1.5 Mio signed cards
Within the MATMA segment, Mobistar passed the 1,5 Mio signed cards milestone in a variety of sectors M2M Leader in Belgium Orange International Matma results (70% of market share ) M2M Center of (in Mio EUR and ‘000 cards) Market categorized in 6 segments competence 417 Connected devices Gaming • At
Slide 17: Segmentation of mobile data offers drives advanced data revenues
Further segmentation of mobile data offers leading to a sustained growth of the advanced data revenues Mobile data uptake (in Mio EUR) Insight 500 476 • Mobile data revenues up to 42% of 3% mobile service revenues in Q1 2012 450 428 (from 37% in Q1 2011) 2% 400 24% 21% • Non-SMS mobile data represen
Slide 18: Mobistar has secured the necessary spectrum
Mobistar has secured the necessary spectrum to cope with a 50% yearly mobile traffic increase Current spectrum allocation (MHz duplex) 800 MHz Potentially for sale) 30 900 MHz** 10 6 6 6 6 1 1800 MHz 15 15 22 Proximus 1800 MHz* 20 20 22 Mobistar Base 2100 MHz 15 15 15 15 Telenet/Tecteo 2600 MHz 20 1
Slide 19: Radio transformation initiatives started in 2011
Mobistar main radio transformation initiatives have already started in 2011 Main network roll-out programs Customer benefit • Coverage mainly for mobile data 1) Full upgrade of the 2G equipment • UMTS in 900 MHz combined with 2300 refreshed GSM sites to network swap Nortel to Huawei hybrid equipment
Slide 20: New Tier 1 partnerships and MVNO deals
Moreover, new Tier 1 partnerships and MVNO deals enables Mobistar to constantly address new segments Co-Marketing segment MVNO segment 590 572 456 475 50 322 42 26 13 8 2009 2010 2011 Q1 2011 Q1 2012 Cards (’000) Rev. (Mio EUR) 20
Slide 21: Improved Full-MVNO agreement with Telenet; IRISnet extension
Improved and extended Full-MVNO agreement with Telenet and extension of the IRISnet contract • Mobistar and Telenet have renewed their 2009 Full-MVNO agreement in April 2012, extended by 5 years to 2017 • The Walloon cable operator Tecteo (VOO) will also launch mobile services in the future thanks t
Slide 22: Plug Mobile co-marketing with RTL Belgium
Plug Mobile (co-marketing with RTL Belgium) will enable Mobistar to address young terget group • Mobistar and RTL joined forces to launch and energize the Plug Mobile offer • This highly mobile offer is designed especially for the younger generation • Via the Plug Mobile brand, Mobistar reaching a y
Slide 23: Ambition to provide "à la carte" telecoms services
Mobistar ambitions to provide every individual with “à la carte” ubiquitousand and trusted telecoms services Medium term evolution Mobistar “Anywhere @home, @work, with friends” • Unlimited, seamless 3G+-4G broadband services. • Tactical broadband fix TV + Internet substitution • Multiscreen experie
Slide 24: Further development of the service layer of convergent proposition
In line with our vision we continued to further develop the service layer of our convergent proposition Mobistar on demand Mobistar TV (V2) New TV widgets New TV Web Portal Average of of 2.5 VoD Already more than 35000 34% of online TV users have www.mobistar.tv rentals/month per active downloads us
Slide 25: Mobistar TV app for tablets and new channels
Moreover, update of Mobistar TV app for tablets and new HD/SD channels launched in 2012 •Control your TV decoder with •New TV channels iOS/Android apps for tablets 25
Slide 26: Mobistar activated 35 000 digital TV subscribers
To date, in a increasingly competitive market, Mobistar activated 35 000 digital TV subscribers Television quarterly net adds (k users)* 40 10 51 8 26 18 44 30 25 7 3 3 6 58 40 38 45 46 73 45 42 49 43 32 -52 -62 -66 -64 -73 -87 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Mobistar Telenet digital
Slide 27: Comprehensive range of services
Mobistar has developed a comprehensive range of services to help during their lifetime “I manage my usage status and activate mobile data bundles anytime, anywhere” “Comfort services for my (smart)phone” 27
Slide 28: Investment in customer care assets
Mobistar made important investment in its customer care assets Verbatim of Happy Customer (FEB 2012) +100 Team Members in the customer care in 2011 28
Slide 29: Customer Service focus leading to tangible results
This increased focus on Customer Service leading to tangible results Change for Today Customer •100 % gets answer Written requests within 5 days - 80 % •6x faster answer treated within 5 days •80 % answered within Calls 20 sec. •1/3 less waiting time •Customer can easily find how •Calls/Letter/Webfo
Slide 30: Regulation
Regulation Version 1 - November 2009
Slide 31: End of regulatory gliding path for mobile; fixed competition expected 2014
After the end of the regulatory gliding path for mobile in 2013, a similar level of competition is now expected for the fixed in 2014 Pricing environment in Belgium Regulatory opportunities for Mobistar • Mobile minute price -41% in 4 years • July 2011: regulation decisions for • To be compared with
Slide 32: Recent roaming proposal more aggressive than glide path
On mobile regulation recent roaming proposal is more aggressive than the initial glide path Mobistar Mobile Turnover split (% of revenues) Possible EU Commission proposal impact 1.476 1.443 • Regulated revenues in Mobistar’s mobile turnover decreased with 10% to 395 Mio 70% 73% EUR in 2011 (27% of m
Slide 33: Similar competition in fixed via regulated broadband and TV offers
Mobistar expects a similar level of competition in the fixed through the implementation of regulated broadband and TV offers History • On July 18th 2011, the CRC (the Conference of Regulators incl BIPT) published their decisions that cover triple play services (TV and Internet) Overview Broadcast &
Slide 34: Prepared for further regulatory decisions
Mobistar prepared to face further regulatory decisions that could impact Mobistar billed revenues EU directive foresees that member states offer users the possibility to subscribe contract with maximum duration of 12 months Translation into national law is currently being discussed at the government
Slide 35: Financials
Financials Version 1 - November 2009
Slide 36: Consolidated income statement
Consolidated income statement Mobistar consolidated income statement in Mio EUR 2010 2011 % 2010 2011 % (9m MES) (excl MES) (excl MES) Total Turnover 1,665 1,658 -0.4% 1,602 1,585 -1.1% Total Service Revenues 1,524 1,506 -1.2% 1,461 1,433 -1.9% Cash Expenses -1,116 -1,127 1.0% -1,063 -1,069 0.6% EBI
Slide 37: Consolidated income statement Q1 2011-Q1 2012 evolution
Consolidated income statement Q1 2011-Q1 2012 evolution Mobistar consolidated income statement in Mio EUR Q1 2011 Q1 2012 % Total Revenues 409 411 0.4% Total Turnover 401 399 -0.4% Total Service Revenues 370 358 -3% Cash Expenses -284 -298 5% EBITDA 125 113 -10% In % of service revenues 33.9% 31.5%
Slide 38: Group turnover evolution breakdown
SMS abundance, non-mobile revenues and MES/Orange Lux affiliates offsets voice price pressure and regulatory effects Mobistar group turnover evolution breakdown (in Mio EUR) Voice/SMS decreases more than compensated by mobile data uptake, Essentially driven by SMS non-mobile, MVNO and handset abunda
Slide 39: Convergence strategy preserves mobile margin
In Belgium, convergence strategy in both segments and mobile data focus allows Mobistar to preserve mobile margin Mobistar Mobile Income Statement in Mio EUR 2010 2011 % Total Turnover 1,476 1,443 -2% Total Service Revenues 1,332 1,288 -3% Cash Expenses -918 -897 -2% EBITDA 558 546 -2% In % of servi
Slide 40: Orange Luxembourg continued to deliver growth
Orange Luxembourg continued to deliver growth, with an increasing mix in postpaid subscribers in the B2B segment Income Statement Orange Communications Luxembourg in Mio EUR 2010 2011 % Total Turnover 55.4 65.7 19% Total Service Revenues 50.6 60.7 20% Cash Expenses -49.5 -57.3 16% EBITDA 5.9 8.5 43%
Slide 41: Cash expenses driven by MES consolidation, FTE and handset costs
Cash expenses driven by MES consolidation, increase in FTE and handset sales costs compensated by lower MTR and efficiency Total cash expenses Mio EUR Orange Luxembourg • Increase driven by handsets costs in correlation with the handsets sales , 1.169 interconnect cost in line with revenue growth, I
Slide 42: Odyssey transformation programs delivered gross savings
Odyssey transformation programs already delivered 80 Mio EUR of gross saving over a period of 2 years Gross saving objective Gross saving realized and projected (Mio EUR) More than 100 Mio EUR 48 • Main contributors are Mobistar 8 OLU synergies, device transformation and network (e.g. Mobile Data, F
Slide 43: Capex driven by technical transformation and 3G roll-out
Capex driven by technical transformation, further 3G roll-out and commercial launch of Starpack Capex (in M EUR) Capex as % of service revenues Main Capex drivers 74 • The Mobistar network had 5483 2G/3G sites at 20 the end of 2011 2G license renewal • In line with its backhauling upgrade plan, 4G l
Slide 44: Balance sheet
Balance sheet Balance Sheet insights in Mio EUR Non-current assets 1,018 1064 * Tal anon are a Current assets 270 303 —.. This represents 90% of the amount Deferred tax assets 2 6 available for distribution (at Mobistar Cash and cash equivalents 13 8 SA. level) Share capital 132 132 to General Assem
Slide 45: Free cash flow (consolidated)
Free cash flow (consolidated) 45
Slide 46: Guidance
Guidance Version 1 - November 2009
Slide 47: Main elements supporting the 2012 guidance
Main elements supporting the 2012 guidance • Revenue and EBITDA negatively impacted by regulation for a total amount of 58 Mio EUR on revenues and 32 Mio EUR on EBITDA* • MTR regulation impacts revenue around 30 Mio EUR and EBITDA around 13 Mio EUR • Current roaming decision (revised vs. initial ass
Slide 48: Guidance in a challenging macro-economic context
Mobistar guidance takes into account a very challenging macro- economic and rapidly evolving industry context 2012 2011 guidance Total Turnover 1657,6 M EUR Decrease limited to maximum 2% between Ebitda 530,1 Mio EUR 460 - 500 M EUR 12.2 of service Around 12% of Capex/service revenues* revenues serv
Slide 49: Visit our websites
Mobistar guidance takes into account a very challenging macro- economic and rapidly eroding industry context Visit our websites: 2012 • www.mobistar.be 2011 guidance • http://business.mobistar.be Decrease limited to Total Turnover 1657,6 M EUR • http://corporate.mobistar.be maximum 2% between Ebitda