Slide 1: H1 2014 Results - Analyst & Investor Presentation
H1 2014 Results - Analyst & Investor Presentation Mobistar always in touch*
Slide 2: *in touch definition
*in touch /in tAt{/ <idiom> 0.1 Fig. in communication with someone or a group. 0.2 Fig. having good contact or rapport with someone or something. 0.3 Fig. possessing up-to-date information.
Slide 3: Forward-looking statements
This presentation contains forward-looking statements about Mobistar, in particular for 2014. Although Mobistar believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to us or no
Slide 4: Mobistar's Transformation: Accelerating Momentum
Mobistar’s Transformation: Accelerating Momentum 4
Slide 5: Agenda
Agenda • Key Highlights • Operational Update • Financial Review • Financial Outlook 2014 Jean Marc Harion Ludovic Pech Siddy Jobe Chief Executive Officer Chief Financial Officer Director Investor Relations 5 & Corporate Finance
Slide 6: Key Highlights
Key Highlights Jean-Marc Harion ‘Mobistar’s progress confirms our path is right and we remain reasonably optimistic going forward’ 6
Slide 7: Key achievements in 1H 2014
Key achievements in 1H 2014 Mobistar’s commercial improved in the second quarter of 2014 Mobistar’s retail customer base stabilised in Q2 vs. Q1 In particular the residential postpaid segment improved significantly Financial & KPI’s Mobistar’s results of the first half of 2014 in line with Mobistar
Slide 8: Mobistar is delivering on its transformation program
Mobistar is delivering on its transformation program Leadership in Mobile Our network #1 Best 4G network in Belgium N° 1 in B2C postpaid customers quality recognized Pioneer in Disruptive Convergence Our cable offers on N° 1 provider of regulated cable N° 1 vendor of 3.0 mobile Connectivity track fo
Slide 9: We now operate the best 3G network in Belgium
Leadership in Mobile We now operate the best 3G network in Belgium 99,9% 9 Mbps Average outdoor download coverage speed #1 indoor coverage #1 3G Voice quality 9
Slide 10: … and the best 4G network in Belgium too
Leadership in Mobile … and the best 4G network in Belgium too #1* #1* 4G outdoor deep indoor Coverage (70 %) Coverage (42 %) Extended >300K 4G range of 4G Mobistar 4G devices & tariff customers plans 10 * #1 coverage position is confirmed by the Commsquare study of June 2014
Slide 11: 4G launches @Mobistar
Leadership in Mobile 4G launches @Mobistar Nov 13 March 14 April 14 May 14 May 14 End 15 4G@BXL 4G 4G 4G 4G + 4G 4G Discovery: Commercial Roaming in 99% indoor Mobistar launch: in France Mechelen coverage in coverage Customers Fastest Spain Speed up Brussels = experiencing network in Luxemburg to 21
Slide 12: Mobistar's 4G is a service not just a technology
Leadership in Mobile Mobistar’s 4G is a service not just a technology #1indoor coverage + 4G attractive tariffs 4G in all Animal TP with data as from10€ from10€ best offers: “Osez comparer” in November activation: No need to do anything to get 4G. roaming: 4G available 7 European countries #1 in 4G
Slide 13: 1st to provide 99% 4G coverage in Brussels
Leadership in Mobile 1st to provide 99% 4G coverage in Brussels 99% of Brussels population covered 56% of Brussels population covered 96% of Brussels population covered
Slide 14: Mobistar first mobile network in Belgium
Leadership in Mobile Mobistar first mobile network in Belgium 5.34m SIM cards connected and a stabilisation of retail customer base •Mobistar Group 5,006 5,095 5,130 5,178 5,253 5,446 •Belgium, incl. MVNO 4,900 4,990 5,028 5,075 5,150 5,345 70,1% 70,5% 71,1% 7.000 68,6% 69,1% 69,6% 101 102 102 103 6
Slide 15: Mobistar improved its postpaid net adds as planned
Leadership in Mobile Mobistar improved its postpaid net adds as planned boosted network market share underlining its network leadership Network market net adds split Mobistar network net adds split (k users) and mobile penetration (k users) 113% 113% 112% 129 199 101 98 69 68 82 195 23 45 56 54 53 4
Slide 16: Panther for international commuters
Leadership in Mobile Panther 60 for international commuters preempting change in European roaming • 5% of Postpaid activations after a few weeks • exclusive 4G roaming included in 7 EU-countries 16
Slide 17: Shape: a new portfolio for B2B customers
Leadership in Mobile Shape: a new portfolio for B2B customers abundance “for all”, per company seat Mobile Voice for all Mobile Data for all Applications Tablets MDM Shape & Fix Telephony Best Mobile Network 17
Slide 18: Have a nice day: our customers are special
Best Customer Experience Have a nice day: our customers are special, let’s surprise them! 18
Slide 19: New @Mobistar stores and concept stores
Best Customer Experience new @Mobistar stores and concept stores 80 shops refitted by end of 2014, to improve customer journey 19
Slide 20: We adapt our channels to new market conditions
Best Customer Experience we adapt our channels to new market conditions direct: reinforced, refit & digitalized .be exclusive: transformed, integrated, regionalized …or acquired MLM ex- ex- multibrand: 20 refocused
Slide 21: Mobistar to launch 1st regulated offers end of 2014
Pioneer in Disruptive Convergence Mobistar to launch 1st regulated offers end of 2014 but regulators should ensure technical, operational and financial improvements. 6 month implementation new market analysis + period by cable operators retail minus price review 09/2013 12/2013 01/2014 Validation &
Slide 22: Mobistar cable: a game changer in Belgium
Pioneer in Disruptive Convergence Mobistar cable: a game changer in Belgium a simple “plug and play” customer experience Ultra-fast Digital TV Internet + 22
Slide 23: ACE program
Best Industry Efficiency ACE program: > €36m net opex savings realized in 1H14, out of €50m FY target • closing open distribution channels (on-going) DIRECT • roll-out of the @Mobistar concept (on-going) COSTS + • process & organization simplification (on-going) LABOUR • IT outsourcing under 32bis p
Slide 24: Financial Review
Financial Review Ludovic Pech ‘We will carry on our determined work to fundamentally transform this company and its cost structure’
Slide 25: Key financials
key financials consistent with full year guidance and sequentially improving in €m H1’14 H1’13 Var. insight • sequentially improving trend each quarter Service revenues 561.4 655.0 -14.3 % • €15.8m regulatory impact in 1H14 • €34m handset sales decrease Consolidated turnover 629.2 757.0 -16.9 % • 46
Slide 26: Regulatory impact
regulatory impact MTR cut in Luxembourg combined with EU roaming impact FY12 13H1 14H1 14 11 29 5 MTR impact in Revenues 17 16 Luxembourg only impact 31 30 EU roaming in both Belgium 59 and Luxembourg 11 7 20 4 EBITDA 8 11 impact 19 13 EU Roaming MTR 33 26
Slide 27: Consolidated service revenues
consolidated service revenues sequential improvement as anticipated service revenues in million euros -77,8 655,0 ( -12,2%) 12,2%) 639,2 -15,8 -65,8 561,4 -18,2 6,2 13H1 regulatory 13H1 before service revenues service revenues MVNO 14H1 actuals impact regulatory (mobile) (non-mobile) actuals impact
Slide 28: Blended ARPU evolution (Belgium)
blended ARPU evolution (Belgium) the back book repricing is now largely digested Quarterly ARPU(a) in euro per month per user -6.9% -9.9% 26.0 25.7 24.9 24.0 23.4 23.9 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 28 (a) excluding MVNOs and M2M cards revenues.
Slide 29: Restated EBITDA evolution
restated EBITDA evolution cost savings compensating most of revenues erosion but regulatory and tax restated EBITDA(a) in million euros -33,0 184,5 ( -19,0%) 19,0%) 11,1 173,4 6,2 11,9 140,4 7,9 112,1 76,9 13H1 regulatory 13H1 before revenues direct labor indirect operating 14H1 actuals impact regul
Slide 30: ACE2 transformation program
ACE2 transformation program €36m net OPEX savings secured in 1H14 ACE2 OPEX savings in million euros 1Q14 (actuals) 18 17% 2Q14 (actuals) 18 YTD (actuals) 36 22% 61% YTG (target) > 14 FY (target) > 50 Indirect costs Labor costs Direct costs 30
Slide 31: ACE2: overhaul of our distribution
ACE2: transforming our operating model illustration #1: overhaul of our distribution (direct costs) acts in exclusive channels weighted cost per act productivity in own PoS (in percentage, Belgium) (base 100 in 2012, Belgium) (base 100 in 2012, Belgium) +15pp +15 pp +8,3% 90% 100 -17,3% 117 81% 107
Slide 32: ACE2: reduction of costs to serve customers
ACE2: transforming our operating model illustration #2: reduction of costs to serve our customers (indirect costs) billing costs customer care costs (in euros, Belgium) (in euros, Belgium) -37% -17% 2013 2014E 2013 2014E 32
Slide 33: ACE2: simplifying organization and processes
ACE2: transforming our operating model illustration #3: simplifying our organization and processes (labor costs) headcount redundancy costs labour costs (a) (Full Time Equivalent, Belgium) (in million euros, Belgium) (in million euros, Belgium) -134 ( -8%) 8%) -1 -9 ( -31%) 31%) ( -12%) 12%) 1.659 3
Slide 34: Capital expenses
capital expenses sustained investment in network to consolidate our leadership position total CAPEX(a) network CAPEX(a) in million euros in million euros 35% 43% 93 70 69 49 56 41 38 37 26 29 31 23 13Q1 13Q2 13H1 14Q1 14Q2 14H1 13Q1 13Q2 13H1 14Q1 14Q2 14H1 • 75% of total group CAPEX allocated to ne
Slide 35: Consolidated net income
consolidated net income net income impacted primarily by EBITDA decline in €m H1’14 H1’13 Var. insight Reported EBITDA 137.0 180.9 -24.3% Dep. & Amort. -94.9 -89.7 5.8% • in line with the evolution of our capex Operating income 42.1 91.1 -53.8% • 2014 figures impacted by higher long-term Financial r
Slide 36: Consolidated cash flow statement
consolidated cash flow statement net debt variation explained by operating cash flow and license payment in €m H1’14 H1’13 Var. insight Operating cash flow 47.4 115.6 -58.9% • reflecting the EBITDA erosion and sustained (restated EBITDA (a) - CAPEX) level of network investments License acquisition -
Slide 37: Financial Outlook
Financial Outlook Jean-Marc Harion ‘The results of the first half of 2014 enabled Mobistar to confirm its outlook as provided in February 2014’
Slide 38: FY guidance maintained for 2014
FY guidance maintained for 2014 €250m to €280m restated EBITDA before cable in €m Q1 2014 Q2 2014 H1 2014 2014 outlook Service Revenues 278.1 283.3 561.4 Y-o-Y (-16.2 %) (-12.3 %) (-14.3 %) Restated EBITDA 66.1 74.3 140.4 250-280* Restated EBITDA margin/Y-o-Y) (23.8 % / -33.2 %) (26.2 % / -13.2 %) (
Slide 39: Appendix
Appendix
Slide 40: EBITDA restatements
EBITDA restatements from restated EBITDA to reported EBITDA in €m H1’14 H1’13 insights restated EBITDA 140.4 184.5 • consistent with our full year guidance (as percentage of service revenues) (25.0%) (28.2%) labor related -2.5 -3.6 • labor contract terminations or redundancy costs non-labor related
Slide 41: Mobile data revenues are increasing significantly
Mobile data revenues are increasing significantly due to higher smartphones sales, data usage and smartphones plans (in M€) 190 180 46% 48% 48% 49% 51% 50% 170 19% 160 The number of smartphones connected 150 15% 18% 19% 18% 19% on the Mobistar network is increasing 140 131 4G smartphone penetration
Slide 42: Belgian Mobile total turnover split
Belgian Mobile total turnover split (% of revenues) 316 659 1.283 274 553 Retail billed revenues Roaming voice M2M Roaming Data MVNO Visitor Roaming Handsets MTR Voice 51% 51% 49% 50% 49% Roaming SMS MTR SMS 1% 1% 2% 2% 1% 5% 5% 5% 7% 7% Strong handsets sales continued, driven by a higher 13% 16% 16
Slide 43: Q&A
Q&A
Slide 44: 3Q 2014 Roadshow Schedule
3Q 2014 Roadshow Schedule DATE LOCATION BROKER ROADSHOW / CONF. 2 Sept 2014 London Barclays TMT Conference 3 Sept 2014 London Deutsche Bank TMT Conference 8 Sept 2914 Brussels UBS Reverse roadshow 10/11 Sept 2014 New York Goldman Sachs Management Roadshow 15 Sept 2014 London Credit Suisse TMT Confer
Slide 45: Further questions?
FURTHER QUESTIONS? PLEASE CONTACT THE IR DEPARTMENT Investor Relations Phone: +32 2 745 80 92 E-mail: ir@mail.mobistar.be For further information please visit www.mobistar.be http://business.mobistar.be http://corporate.mobistar.be