Orange Belgium Sa · EURONEXT:OBEL

Orange Belgium Sa — Q4 2019 Earnings Presentation

34 slides from Orange Belgium Sa's earnings presentation, Feb 6, 2020

  1. Slide 1: Orange Belgium Q4 2019 Financial Results

    Orange Belgium Q4 2019 Financial Results February 6, 2020

  2. Slide 2: Disclaimer

    Disclaimer This presentation might contain forward-looking statements about Orange Belgium in particular for 2019. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently co

  3. Slide 3: Section one: Q4 2019 Highlights

    Section one Q4 2019 Highlights 3

  4. Slide 4: From smart follower to Bold Challenger

    From smart follower to Bold Challenger November October July May Google Mini Nest with a mobile plan or Love September package June June Google April Chromecast February 1st operator is now available to to offer Love VoWiFi and customers VoLTE for deep indoor coverage 4 Orange Restricted 4 2018 2019

  5. Slide 5: Q4 2019 Key achievements

    Q4 2019 Key achievements Mobile contract excl. M2M Convergent customers Net additions 15.9% 2.6 m 258 k Mobile contract excl. + 31 k of total postpaid mobile +4.5% yoy +43.5% yoy M2M base is convergent Convergent customer + 25 k Belgium Belgium Belgium Belgium Revenues Retail service revenues EBITDA

  6. Slide 6: Results 2019 within upper range of guidance

    Results 2019 within upper range of guidance What we guided What we achieved Revenues growth Slight growth vs. 2018 +3.3%  EBITDAaL €285-305 m €300.1m  eCapex Stable vs. 2018 0.3%  6

  7. Slide 7: Section two: Operational Results

    Section two Operational Results 7

  8. Slide 8: Convergence: continued success with 25k new Love customers

    Convergence: continued success with 25k new Love customers 21 19 19 25 20 25 14 16 17 Love (‘000) 258 Love customer net adds, 180 200 216 233 +25k 1.5% yoy 155 122 136 103 Love customers yoy 43.5% variation Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Convergent mobile of

  9. Slide 9: Mobile postpaid: customer base continues its steady growth

    Mobile postpaid: customer base continues its steady growth +4.5% Customer base (‘000) 2,469 2,490 2,516 2,548 2,579 244 272 294 319 352 2,225 2,218 2,222 2,229 2,227 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 61 Net adds (‘000) 34 32 31 21 26 25 27 29 22 33 4 7 -7 -2 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4

  10. Slide 10: Mobile prepaid: acceleration of decline due to higher churn

    Mobile prepaid: acceleration of decline due to higher churn -11 -6.2% Customer base (‘000) -4 -4 -6 -10 Net adds (‘000) 567 561 557 553 -21 532 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 10

  11. Slide 11: Average mobile data usage increased by 38% yoy, reaching 4.5GB

    Mobile: Average mobile data usage increased by 38% yoy, reaching 4.5GB +38% +79% Average mobile data usage (GB) (excl. MVNO) +35% 4.5 +55% +57% 3.2 3.2 3.7 +120% 2.5 2.5 1.3 1.3 1.8 Average mobile data 0.3 4.5 GB 0.9 0.9 0.1 0.3 0.6 0.5 usage (smartphone), EoP 2013 EoP 2014 EoP 2015 EoP 2016 EoP 201

  12. Slide 12: B2C convergent ARPO continued to grow while mobile-only ARPO contracted

    B2C convergent ARPO continued to grow while mobile-only postpaid ARPO slightly contracted Quarterly B2C convergent ARPO (€) Quarterly mobile only ARPO (€) + 7.0% + 7.7% + 4.1% -1.8% -1.1% -1.6% + 1.6% -3.2% -2.6% + 1.3% 77.4 76.8 77.7 76.7 20.8 20.8 20.6 21.2 20.4 75.5 7.1 7.1 6.9 6.6 6.7 7.1 6.6 7.

  13. Slide 13: Delayed 5G launch in Belgium, but Orange first to launch 5G testing hub

    Delayed 5G launch in Belgium, but Orange is 1st to launch a 5G testing hub with industrial partners 13 Orange Restricted 13

  14. Slide 14: Spectrum and 5G auction

    Spectrum and 5G auction  The Royal Decrees regarding the allocation of the 700, 1400 and 3400-3800 MHz band and the renewal/reallocation conditions of the 900, 1800 and 2100 MHz bands were not finalised  End December, the BIPT launched a consultation regarding various spectrum related matters  Fo

  15. Slide 15: RAN sharing agreement with Proximus signed

    RAN sharing agreement with Proximus signed  Less antenna sites  Total energy consumption: -20% €300 m Financial data savings over 10 years (= consumption of 10k households) Benefits  Improvement of overall mobile experience thanks to: €130 m  wider outdoor + deeper indoor coverage Initial set-up

  16. Slide 16: Belgian Competition Authority decision on sharing agreement

    Orange Belgium takes note of the decision of the Belgian Competition Authority giving the telecom regulator until 16 March 2020 to further examine the sharing agreement with Proximus  The Belgian Competition Authority has decided to suspend until 16 March 2020 the execution of the mobile network sh

  17. Slide 17: OBE acquired BKM S.A. to extend its B2B offering

    OBE acquired BKM S.A. to extend its B2B offering Team members Enterprise Value 230 €52.4m 17 17

  18. Slide 18: Regulatory update: Cable and Fiber Regulation

    Regulatory update Cable Regulation Cost model – Wholesale pricing:  Consultation draft decision published on July 5 and ended on September 6  Final decision: expected in Q2 2020  Orange Belgium’s key comments: 1.The Company is pleased that the regulators have confirmed their intention to establis

  19. Slide 19: Simplification, Digitalization, Empowerment

    Simplification Digitalization Empowerment  Offer simplification  Change the distribution  Increase Customer Service first  Simplification of IT landscape channel mix contact resolution  Organization and process  Increase of digital interaction  End-to-End responsibility simplification  Diver

  20. Slide 20: Section three: Financial Results

    Section three Financial Results 20

  21. Slide 21: Retail service revenues: another quarter of solid growth

    Retail service revenues: another quarter of solid growth +9.8% +13.5% +9.6% +7.1% +6.5% Retail service revenues (€ m) 221.8 222.8 199.3 205.7 207.0 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Retail service revenues yoy 21

  22. Slide 22: Convergent service revenues: sustained growth

    Convergent service revenues: sustained growth +94.6% +83.4% Convergent service revenues (€ m) +69.9% +54.2% +47.7% 48.2 41.0 44.3 38.1 32.7 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Convergent service revenues yoy 22

  23. Slide 23: Mobile only service revenues slightly decreased

    Mobile only service revenues slightly decreased, despite strong increase in convergence revenues Mobile only service revenues (€ m) +0.7% +3.0% +0.1% -2.2% -2.5% 154.4 154.4 153.3 155.4 150.5 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Mobile only service revenues yoy 23

  24. Slide 24: Orange Belgium Group: 2019 key financial results

    Orange Belgium Group: 2019 key financial results +3.3% +5.1% 1,340.8 300.1 1,298.1 285.6 369.5 +4.8% 79.6 +5.5% 352.5 75.5 EBITDAaL (€ m) Revenues (€ m) 334.3 +2.5% 83.6 +1.1% 326.0 82.7 +1.9% +18.2% 313.0 318.9 67.2 78.9 318.2 +3.8% -3.8% 306.6 60.3 58.0 2018 2019 2018 2019 Q1 Q2 Q3 Q4 • Q1’18, Q2’

  25. Slide 25: Revenues driven by increase in retail service revenues and equipment sales

    Revenues driven by increase in retail service revenues and equipment sales, despite lower MVNO revenues Revenues evolution (€ m) +4.8% + 13.6 369.5 Convergent -2.9 service +12.3 +15.6 revenues -6.0 MVNO -8.9 352.5 +1.9 Fixed & IT service revenues -3.9 Mobile service + revenues +10.3 342.2 Q4 2018 BK

  26. Slide 26: EBITDAaL increased thanks to higher retail service revenues

    EBITDAaL increased thanks to higher retail service revenues, continuous improvements in the cable operations and cost efficiencies with Bold Inside EBITDAaL evolution (€ m) +5.5% -9.9 + +17.0 -1.3 -1.7 79.6 77.4 -1.9 75.5 Q4 2018 BKM + IFRS 16 Q4 2018 Revenues Direct Labor Indirect Q4 2019 Reported

  27. Slide 27: FY 2019 eCapex stable

    FY 2019 eCapex stable eCapex (€ m) Net debt +0.3% 13.8% 180.2 €234.3 m 13.4% 179.7 43.7 38.5 Net debt/EBITDAaL 0.8x 135.9 141.6 2018 2019 Cable capex incl. CPE, IT & Network, etc. Core capex Total capex to total revenues ratio 27

  28. Slide 28: Cable operations continue to improve in 2019

    Cable operations continue to improve in 2019 Variations Revenues: €108.1 m +69% EBITDAaL: €6.8 m +€23.2 m eCapex: €38.5 m -12% Operating cash flow: - €31.7 m +€28.4 m 28

  29. Slide 29: Section four: Dividend

    Section four Dividend 29

  30. Slide 30: Proposal to pay dividend of €0.60 for financial year 2019

    Proposal to pay dividend of €0.60 for financial year 2019 Maintaining a balanced and sound financial position  Orange Belgium aims to provide an appropriate cash returns to equity holders while maintaining a balanced and sound financial position, thereby leaving sufficient leeway to continue to inv

  31. Slide 31: Section five: 2020 guidance

    Section five 2020 guidance 31

  32. Slide 32: 2020 guidance

    2020 guidance 2020 Guidance Revenues growth Low-single digit growth vs. 2019 EBITDAaL €310-330 m eCapex Stable vs. 2019 (excluding the RAN sharing agreement) Outlook  Further uptake of the postpaid and convergent Love customer base  Limited headwinds in comparison to 2019  Final decision on cable

  33. Slide 33: Q&A

    Section five Q&A 33

  34. Slide 34: Orange Belgium Q4 2019 Financial Results

    Orange Belgium Q4 2019 Financial Results February 6, 2020

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