Proximus Sa · EURONEXT:PROX
Proximus Sa — Q4 2018 Earnings Presentation
44 slides from Proximus Sa's earnings presentation, March 2019
Slide 1: Proximus Group Results presentation Q4 2018
Proximus Group Results presentation Q4 2018 March 2019
Slide 2: Key achievements Q4
GROUP Key achievements Q4 2 +32,000 +31,000 Stable YoY +0.2% YoY Domestic Domestic Mobile postpaid Tuttimus & Bizz EBITDA Direct Margin cards all-in +16,000 +16,000 € 451m DM + 3.9% YoY FCF YTD’18 Fixed internet TV customers EBITDA + 8.4% YoY (€501m excl. acquisitions) customers
Slide 3: Growing Internet/TV customer base
Growing Internet/TV customer base GROUP Supported by dual brand strategy and year-end campaign 3 1,983 1,996 2,002 2,010 2,026 1,965 Broadband 16 +43K 17 14 lines YoY in ‘000 7 6 8 +2.2% Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 +50K 1,543 1,560 1,575 1,584 1,595 1,611 in ‘000 9 18 14 11 16 customers YoY
Slide 4: Mobile postpaid customer gain
Mobile postpaid # Mobile cards: 4,838K end-Dec’18 GROUP Prepaid: 822K customer gain 4 Postpaid: 4,016K +32,000 Postpaid cards in competitive mobile market Smartphone penetration 77% Mobile Cards Park (K) (excl. M2M) +4pp YoY Postpaid Mobile service revenue: € 318M in Q4’18 4,825 4,838 4,831 4,838 4,
Slide 5: Q4'18 Group Revenue
Q4’18 Group Revenue GROUP (M€ & YoY %) 5 2.6% -0.9% -0.2% 0.1% -0.5% -3.2% +0.5% 1,441 1,477 1,441 1,454 1,441 1,469 336 339 319 340 347 341 5,778 5,804 1,105 1,137 1,121 1,114 1,095 1,128 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 Domestic BICS Domestic: -0.8% YoY to € 1,128m Consumer: -1.0% Y
Slide 6: Domestic revenue by product
Domestic revenue by product GROUP 6 Fixed Data / Internet +7 ICT +6 • Customer growth driving Internet, TV and Postpaid TV +3 revenue increase Mobile Postpaid +1 • ICT benefitting from Q4 -1 Subsidiaries (Tango) acquired companies (YoY evolution) -2 Advanced Business Services • Lower Mobile terminal
Slide 7: Group direct margin +0.3%
Group direct margin +0.3% GROUP Stable Domestic margin, BICS up 3.9% 7 • Domestic stable 912 0 2 -2 -1 3 914 + Consumer +0.1% + Enterprise +0.8% Q4 Domestic: +0% +3.9% - Wholesale -4.8% (M€) Group : +0.3% • BICS direct margin up 3.9% through combination with DM Consumer Enterprise Wholesale Other BI
Slide 8: Group expenses
Group expenses GROUP 8 • Domestic expenses -0.3% 466 -1 0 465 • Inflation based indexation in Oct’18 • Business critical and ICT acquisition increasing FTE’s Q4 -0.3% -0.2% by 258 YoY (M€) • Compensation mechanism -0.3% halt from the Belgian state for statutory retirees Q4'17 Domestic BICS Q4'18 • B
Slide 9: Domestic EBITDA
Domestic EBITDA GROUP 9 +0.2% YoY for Q4, with higher workforce expenses offset by lower non workforce expenses 408 0 10 409 -9 Q4 (M€) Underlying Direct Workforce Non Underlying EBITDA Margin Costs Workforce EBITDA Q4'17 Costs Q4'18 +5.5% -1.9% +0.8% +0.8% +1.1% +0.2% Q’s (M€) 426 408 420 454 431 4
Slide 10: Group EBITDA +0.9% YoY
Group EBITDA + 0.9% YoY GROUP 10 Both Domestic operations and BICS showing progress from prior year 3 449 445 1 Q4 (M€) Underlying Domestic BICS Underlying EBITDA Q4'17 EBITDA Q4'18 +1.0% +1.1% +6.1% +1.4% +0.9% -2.2% Q’s (M€) 464 454 493 470 445 449 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18
Slide 11: Net Income (Group share)
GROUP Net Income (Group share) 11 € 117m Net Income in Q4 leading to a total of € 506m YTD’18 ETR 26.8% vs 25.1% in YTD’17 YTD 43 -20 (M€) -53 522 14 -8 7 506 Net income Underlying Incidentals D&A Net Finance Tax Others Net income YTD'17 EBITDA result expense YTD'18 variance
Slide 12: €1,019M capex FY'18
GROUP € 1,019 M capex FY’18 12 Proximus invests extensively in enhancing its networks and improving the overall customer experience. 385 Capex 221 238 238 322 2017 includes Jupiler League (Q2) and Champions League 205 1,092 1,019 (M€) (Q4) football broadcasting rights Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q
Slide 13: FCF
FCF GROUP 13 €451M FY’18, or € 501M excluding acquired ICT subsidiaries YTD (M€) 43 -22 -111 225 517 -51 65 8 501 451 292 FCF FY'17 Acquisitions FCF FY'17 Underlying Income tax Cash AP/AR/Inventory Other FCF FY'18 Acquisitions FCF FY'18 2017 normalized Ebitda payments Capex normalized 2018 Normalize
Slide 14: Sound financial position
GROUP Sound financial position 14 Proximus optimized its long term debt Net Debt DEC 2017 FCF Dividends Dividends to non-controlling interests Other Net Debt DEC 2018 5.6 Yrs Average debt duration Net Debt (YTD, M€) 1.78% Weighted average coupon 451 -485 -28 Credit ratings: Standard & Poor’s 2 A, Mo
Slide 15: Guidance 2019
GROUP Guidance 2019 15 2019 expectations Actuals Guidance Nearly stable Domestic Guidance metrics revenue in competitive FY 2018 FY 2019 market. Stable gross dividend per share of Domestic underlying Stable Group EBITDA: revenue €4,460m Nearly stable € 1.50 • Sustained positive EBITDA performance of
Slide 16: Consumer results
Consumer results
Slide 17: Consumer
Consumer CONSUMER 17 -0.4% -0.1% -0.5% +1.5% -0.2% -1.8% -1.0% Q4’18 Revenue growth in Fixed Services partly Revenue 729 734 731 725 715 726 2,909 2,898 (M€, YoY) compensating for the Prepaid loss and for Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 decreased low margin revenue in mobile terminal
Slide 18: Revenue
Revenue CONSUMER 18 734 -7 7 3 0 -5 0 0 -5 726 Q4’18 Consumer revenue down 1.0%. Growth in Internet and TV revenue Q4 (M€) partly compensating for the -1.0% Fixed voice erosion, lower Prepaid & Terminal sales Q4'17 Fixed Fixed TV Mobile Mobile ICT Tango Terminals Q4'18 revenue. Voice Data Postpaid P
Slide 19: Fixed data (internet)
Fixed data (internet) CONSUMER 19 +3.7% +4.1% +5.4% +5.0% +4.5% +4.6% +4.9% Fixed data Increasing Internet customer revenue (M€) & 156 157 161 162 163 164 619 649 base for both the Proximus YoY and Scarlet brands. Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 1,829 1,847 1,861 1,868 1,877 1,894 +4
Slide 20: TV
TV CONSUMER 20 +6.1% +4.6% +4.5% +4.0% +2.7% +2.9% +3.5% Growing base, supported by Millions TV revenue (M€) Millions 98 99 99 99 101 399 year-end campaign of & YoY variance 97 385 Proximus brand and Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 continued success of Scarlet. 1,543 1,560 1,575 1,58
Slide 21: Fixed voice
Fixed voice CONSUMER 21 -5.5% -4.6% -4.8% -5.4% -6.4% -6.1% -5.7% YoY revenue decline driven Fixed voice revenue (M€) & YoY variance by continued line erosion 124 122 124 119 116 115 503 474 and lower traffic, partially Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 offset by Jan’18 price changes f
Slide 22: Mobile service revenue
CONSUMER Mobile service revenue 22 Mobile service revenue (M€) & YoY variance Blended net mobile ARPU (€) & YoY variance -1.3% -1.2% -1.7% -1.4% -0.9% -2.3% +1.8% +2.5% +1.7% +1.4% +0.6% -1.1% 248 243 237 243 246 237 23.1 22.8 22.4 23.0 23.3 22.6 22% Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q3'17 Q4'17 Q
Slide 23: Postpaid and prepaid
Postpaid and prepaid CONSUMER 23 Postpaid +2.6% +2.4% +1.0% +1.4% +1.6% -0.1% +1.0% Good traction of EPIC offer for millennials and revamped 223 221 217 222 227 220 878 887 Revenue (M€) & YoY offer in Nov’18, offering Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 unlimited Voice or Data. -1.9% -1.
Slide 24: Tango Luxembourg
Tango Luxembourg CONSUMER 24 Tango revenue (M€) & YoY variance • Revenue fairly stable in competitive market. • Steady growth in mobile +5.6% +8.3% +6.2% -1.1% +1.1% -0.6% revenue and successful execution of convergence +3.6% strategy with FttH driving increase in internet revenue. 31 29 30 114 118
Slide 25: X-Play view
CONSUMER 25 X-Play view (under IFRS 15)
Slide 26: Stable revenue from HH/SO
Stable revenue from HH/SO CONSUMER 26 Incl. upselling to 4P 744 14 -5 -3 -5 -5 -5 -1 2 735 Q4 (M€) HH/SO +0.0% Proximus’ strategy to focus on Total Consumer -1.3% multi-play offers resulting in continued uptiering to 4-Play, Underlying 4-Play 3-Play 2-Play 1-Play Mobile Terminal Tango Other Underlyi
Slide 27: Continued revenue shift to 4-Play
Continued revenue shift to 4-Play CONSUMER 27 +0.8% -0.1% 0.0% 0.0% X-Play 4-Play revenue up revenue 6.1% YoY, (M€) & YoY 586 585 588 589 586 585 variance representing 33% of Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Total Consumer revenue -4.8% -5.2% -4.9% -4.8% +9.8% +7.2% +7.2% +6.1% 4-Play 2-Play reve
Slide 28: Increasing number of customers on 4-Play
Increasing number of customers on 4-Play CONSUMER Improving Customer Mix, average RGU per HH/SO up 2.5% to 2.77 28 + 48,000 4-Play HH/SO YoY (+7.0%) 4-Play 670 683 697 711 721 731 25 % 415 411 402 397 391 387 growth & of HH/SO 2-Play EOP (000) growth & 11 14 14 13 10 10 on 4P EOP (000) -6 -4 -6 -6 -
Slide 29: Overall ARPH up 0.6% YoY
Overall ARPH up 0.6% YoY CONSUMER 29 Progress to +1.3% +0.8% +0.5% +0.6% € 65.8, on X-Play improved ARPH (€) & 65.3 65.4 65.9 66.2 65.7 65.8 customer mix YoY Variance Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 -0.6% -1.2% -1.5% -1.7% +1.3% +1.1% +1.0% +1.0% 4-Play 2-Play ARPH (€) ARPH (€) & & YoY 112.4 112
Slide 30: Annualized full churn rates
Annualized full churn rates CONSUMER 30 Convergent HH/SO X-Play maintained very low full Annualized churn rates, in spite of full churn 13.4% 13.1% 14.5% 13.6% 14.3% rate 11.9% competitive intensity Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 4-Play 2-Play Annualized Annualized full churn 3.6% 3.4% 3.6% ful
Slide 31: Enterprise results
Enterprise results |
Slide 32: Enterprise
Enterprise ENTERPRISE 32 +1.1% +0.5% +3.3% +0.8% +2.4% +2.2% -0.8% Revenue (M€, YoY) 1,400 1,415 340 369 351 351 347 366 Ongoing change in revenue Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 mix from high-margin connectivity services to labour-intensive ICT services. +5.5% +10.4% +3.5% +8.0% +0.
Slide 33: Revenue
Revenue ENTERPRISE 33 6 -2 369 -3 0 -3 -1 1 366 Q4’18 Enterprise revenue -0.8% YoY Q4 (M€) -0.8% + Solid mobile customer growth drives +0.9% Mobile Q4'17 Fixed Fixed Mobile ICT Advanced Tango Terminals Q4'18 Service revenue Voice Data Services Business & others Services + ICT benefitting from the 1,
Slide 34: Fixed Voice
Fixed Voice ENTERPRISE 34 -7.1% 0 -8.7% -9.7% -7.1% -7.3% -7.2% -6.7% Fixed voice revenue 218 203 (M€) & YoY variance 53 52 53 51 49 49 Ongoing rationalization by 0 customers on Fixed line Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 connections, lower usage, technology migrations to VoIP and com
Slide 35: Fixed Data
Fixed Data ENTERPRISE 35 Flattish Data Connectivity revenue (largest part in this -2.7% -1.0% -0.8% -0.4% +0.8% -0.9% -0.3% product category) Fixed data revenue (M€) 61 62 61 62 62 61 247 246 & YoY variance Continued customer Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 migration to Proximus’ VPN
Slide 36: Mobile Services
Mobile Services ENTERPRISE 36 +4.1% + 0.9 % Mobile service revenue (M€) Postpaid excl. M2M growth Mobile service revenue & YoY variance & EOP (000) Growing customer base still -0.8% -0.4% -2.6% +0.9% +0.9% +0.9% 0.0% 1,010 1,021 1,028 compensating for increased 999 975 988 competitive price pressure
Slide 37: ICT
ICT ENTERPRISE 37 Successful strategy of expanding portfolio well beyond pure connectivity services. Revenue up 3.9% on a high comparable base. Strengthened ICT portfolio, including acquisition of small-sized, highly specialized companies: ICT revenue (M€) & YoY +9.5% 2018 +5.3% +1.0% +6.5% +6.8% +3
Slide 38: Advanced Business Services
ENTERPRISE Advanced Business Services 38 Revenue from Smart Mobility and convergent business solutions, down from a high comparable base. Advanced Business Services (M€) 7 9 7 7 9 8 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 +6.2% 28 30 FY'17 FY'18 Convergent Solutions
Slide 39: Wholesale
Wholesale WHOLESALE Stable Q4 revenue with higher traffic-driven roaming revenue offset by less traditional 39 wholesale revenue. Direct margin affected by lowered WS roaming rates, benefitting Consumer and Enterprise margin. Revenue (M€) & YoY +9.5% +10.3% 4.0% -4.9% -0.3% -8.7% -2.7% 56 53 207 201
Slide 40: BICS results
BICS BICSresults results
Slide 41: BICS segment result
BICS segment result 41 +8.9% +3.1% +0.5% TeleSign, consolidation +2.0% -12.1% -6.6% -3.9% annualized since 1 November 2018. Revenue (M€) & YoY 336 339 319 340 347 341 1,320 1,347 variance Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY'17 FY'18 120 .0 +15.5%+18.8% +18.5%+14.5% Direct margin benefitting 110 .
Slide 42: Firm growth on SMS A2P volumes, benefitting from BICS-TeleSign combination
Non-Voice Voice Firm growth on SMS A2P volumes, benefitting DM decline limited to 1.7%, TeleSign support from BICS –TeleSign combination. lapsing since November. 42 BICS - Non Voice Revenue (M€) BICS - Voice Revenue (M€) +40.8% -0.5% -5.0% -6.1% +25.3% +32.0% +27.0% +18.6% +7.9% -17.4% -14.5% -13.6%
Slide 43: For further information
For further information Investor relations 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
Slide 44: Cautionary Statement
Cautionary Statement 44 “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 forwar