Slide 1: Orange Belgium Financial results H1 2016
Orange Belgium Financial results H1 2016 20/07/2016 Jean Marc Harion Chief Executive Officer Ludovic Pech Chief Financial Officer H1 2015 results, 28th July 2015
Slide 2: Disclaimer
disclaimer This presentation might contain forward-looking statements about Orange Belgium in particular for 2016. 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
Slide 3: Key financial and commercial indicators continue to show progress
Key financial and commercial indicators continue to show progress JEAN MARC HARION CEO, Orange Belgium 3 H1 2016 results, 20th July 2016
Slide 4: Q2 2016 highlights
Section one Q2 2016 highlights 4
Slide 5: Farewell Mobistar, Hello Orange Belgium
New brand and identity successfully deployed Farewell and swiftly welcomed by all customers Mobistar Hello 30,000m² >3,000 rebranded to Orange persons received Orange Belgium a brand training 170 3 Mobistar centers & shops new websites: B2C, rebranded SOHO and B2B 1 3 First Belgian smart store new A
Slide 6: Orange official sponsor of the UEFA Euro 2016
Orange official sponsor of the UEFA Euro 2016 UEFA EURO 2016 bringing people together by sharing their passion 2.3M gifts for >1,000 customers football tickets all included Kevin De Bruyne #OrangeSponsorsYou exclusive partnership 6 H1 2016 results, 20th July 2016
Slide 7: A busy 1H 2016
A busy 1H 2016 Orange Internet Antwerpen UEFA EURO Internet + TV drone project 2016 everywhere Big data Hello Orange Sports Iotopia monitoring 4G+ festivals 7 7
Slide 8: Solid postpaid net additions awaiting convergence
Solid postpaid net additions awaiting convergence driven by healthy gross adds and churn improvement Postpaid quarterly net adds in Belgium (‘k) 28 18 9 8 8 7 1 -5 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 8 H1 2016 results, 20th July 2016
Slide 9: Business review
Section two Business review 9
Slide 10: Convergence with Orange Internet + TV
Convergence with Orange Internet + TV 10 10
Slide 11: Attractive prices
The Orange Internet + TV offering provides an Attractive prices excellent quality at an attractive price 39€/month 49€/month Orange Panther Orange 45 & 60 postpaid customer Internet 100 Mbps Internet 100 Mbps Unlimited volume Unlimited volume 70 TV channels 70 TV channels 200 Mbps Internet boost : 1
Slide 12: Orange Belgium established as a national convergent operator
Orange Belgium established as a national Orange Internet convergent operator + TV Competitors Regions Flanders 2.7M households Connecting Brussels 4.7M 0.6M households cable households to what is essential Wallonia to them 1.5M households 12 H1 2016 results, 20th July 2016
Slide 13: Orange TV commercial launch phases
The first phase of the commercial launch targeted existing customers Orange TV next step is to attracting an increasing number of customers Contents Q1 2014 Q1 2015 Q2 2016 • activation of cable regulation • friendly testers • phased • final product • Orange • access to cable commercial unveiling re
Slide 14: First 10.5k Orange Internet + TV customers
First 10.5k Orange Internet + TV customers Mobile-Fixed confirm cross- & upsell potential Convergence 10.5k Orange Internet + TV Customers with … ~2 SIM cards each 14 H1 2016 results, 20th July 2016
Slide 15: Orange Internet + TV gets even better
A better visual experience for our customers Orange Internet we keep it simple, easy and stylish + TV gets even better Coming soon 15 H1 2016 results, 20th July 2016
Slide 16: Orange TV contents
Provide our customers with what they need Orange TV more than 70 local and international channels Contents … and new premium sports & family contents 16 H1 2016 results, 20th July 2016
Slide 17: B2B Convergence
B2B Convergence 17 H1 2016 results, 20th July 2016
Slide 18: Orange Belgium is a fully convergent B2B operator
Orange Belgium is a fully convergent operator B2B addressing all segments of the B2B-market Convergence « Internet + TV » Fixed + Mobile SoHo Using cable regulation « Shape & Fix » edpnet DSL SME Mobiline « Trusted connectivity provider » Technology agnostic VDSL, Ethernet, Large Fiber optics and 4G
Slide 19: Accelerate Mobile Growth
Accelerate Mobile Growth 4G – 4G+ Mobile data usage Roaming Mobile data innovation 19 H1 2016 results, 20th July 2016
Slide 20: Always connected: 4G and 4G+ coverage
Leveraging high outdoor & indoor 4G coverage Always developing new use cases, anytime, everywhere during the customer journey connected 4G 4G+ 99 % outdoor coverage 47 % outdoor coverage 90 % indoor coverage 98% in Brussels 20 H1 2016 results, 20th July 2016
Slide 21: 4G+ during major summer events
Increased coverage & capacity ensures unique 4G+ during mobile experience first usage results from Rock Werchter major summer events 4G+ represented 10 of 30/06/2016 01/07/2016 02/07/2016 03/07/2016 04/07/2016 4G+ traffic ratio indicates the part of the total 4G traffic using the second carrier in c
Slide 22: 72% of total data consumption is 4G traffic
72 % of total data consumption is 4G traffic Close to 4 out of 10 Orange Belgium customers are actively using 4G smartphone penetration is progressing 4G 4G+ 4G/4G+ 39% 45% 55% 61% 63% 32% customers 16% 2013 2014 2015 H1 2014 2015 H1 2016 % of data users / total base 2016 % of 4G data users / total
Slide 23: Mobile data usage is growing exponentially
Mobile data usage is growing exponentially Mobile Data as customers fully embrace the benefits in their daily lives and work Usage Orange Belgium 1 GB Browsing Streaming Down-/upload gaming Messaging EoP 2013 EoP 2014 EoP 2015 EoP Q2 2016 Indicative usage Total users base Mobile data users base • •
Slide 24: Video streaming during UEFA EURO 2016
Mobile usage during Belgium team games Video streaming video streaming significantly increased during UEFA Calls (outgoing) SMS Streaming EURO 2016 Versus normal average traffic Belgium – Italy 13/06 -6% +12% +64% Belgium – Ireland 18/06 -9% +20% +189% Belgium – Hungary 26/06 +18% +29% +80% Belgium
Slide 25: Potential for elasticity
Orange removes EU roaming costs Potential for for its postpaid customers between June 1 and August 31, 2016 elasticity +129.9% UE28 data roaming traffic Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 Orange customers can use their nati
Slide 26: Postpaid ARPU increased YoY in Q2 2016
4G and data usage are driving postpaid ARPU growth ability to monetize mobile data confirmed Postpaid ARPU increased YoY in Q2 2016: +3.4% ARPU growth of 3.4 % despite impact of roaming regulation Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Postpaid ARPU, annual rolling (incl. vi
Slide 27: Orange apps triggering digital customers' interests
Orange apps triggering our digital customers interests and reducing churn iCoyote with Orange Orange Cloud Orange Radio 25,000 radios & podcasts local and international Driving safely Protect your content Stay in touch with your interests 27 H1 2016 results, 20th July 2016
Slide 28: High-speed 4G connectivity everywhere
High-speed 4G connectivity everywhere thanks to Orange’s network you are connected, wherever you are, just as if you were at home. Airbox Airbox auto Easy Internet @ home “It’s more convenient, ” “A trip more fun” “15€ per month you get 15GB” “Provides Wi-Fi to all “It keeps them quiet” “As fast as
Slide 29: Mobile data innovation
Orange 4G Cam Compact Mobile data to instantly stream precious moments live innovation 49€ with an Internet 199 € without a Everywhere subscription subscription of 12 months 29 H1 2016 results, 20th July 2016
Slide 30: Q2 2016 commercial highlights
Q2 2016 commercial highlights +17.8 thousand +3.4 % y-o-y Postpaid net additions Postpaid ARPU (in Belgium) EUR 28.8 10.5k Orange 1.7x Mobile data usage Internet + TV customers (y-o-y) 30 30 H1 2016 results, 20th July 2016
Slide 31: Financial results overview
Section three Financial results overview 31
Slide 32: H1 2016 financial results
H1 2016 financial results LUDOVIC PECH CFO, Orange Belgium
Slide 33: H1 2016 financial highlights
H1 2016 financial highlights +1.9 % y-o-y +2.0 % y-o-y Mobile service revenues Restated EBITDA EUR 504.5m EUR 144.9m -10.3 % y-o-y -26.0 % y-o-y CAPEX Net financial debt EUR 62.1m EUR 369.9m 33 33 H1 2016 results, 20th July 2016
Slide 34: Service revenues
Growing service revenues with 1.8% Service fueled by mobile growth with cable at sight to make up for legacy fix erosion and accelerate revenues growth 1,8% 537,1 -6,0 540,3 530,9 15,5 -6,2 H1 2016 H1 2016 +0.6% Service revenues +€3.2m €540.3m YTD 2015 Regulatory Impact YTD 2015 Mobile service Fixed
Slide 35: Mobile service revenues
Increase of 1.9% y-o-y (3.2% excl. regulation) Mobile service primarily driven by ARPU increase in spite of EU roaming impact starting Q2 and contract mix revenues 1,9% 504,5 5,0 -0,4 495,2 4,8 -0,2 H1 2016 H1 2016 +1.9% Mobile service +€9.3m revenues YTD 2015 ARPU Volume Mix Other (*) YTD 2016 €504
Slide 36: Restated EBITDA
Growth of 2 % y-o-y restated EBITDA Restated impacted by 2015 pylon tax reversal and EU roaming EBITDA 2,0% -5,0 142,1 15,8 -6,2 144,9 -1,8 H1 2016 H1 2016 +2.0% Restated EBITDA +€2.8m €144.9m H1 2015 2015 pylon tax Increase in 2016 yearly EU roaming Net impact after YTD 2016 rebranding and 26.8% of
Slide 37: Capex
Decrease of 10.3 % y-o-y Capex Capex investment normalization after 4G network roll-out, benefits from IT outsourcing -10,3% -10,9% 69,3 12.9% 62,1 11.5% H1 2016 H1 2016 Capex -10.3% -€7.2m €62.1m 2015 YTD 2016 YTD 2015 YTD 2016 YTD 11.5% of total service rev. Capex Capex to sales (on total service
Slide 38: Net financial debt
Healthy balance sheet Net financial net financial debt and leverage decrease give great room to seize growth opportunities debt Leverage: 2.1x (in million euros) Leverage 1.1x 538 519 500 457 408 418 2.1 2.0 370 1.9 1.7 1.3 1.4 1.1 H1 2016 H1 2016 Net -26.9% financial debt -€129.9m €369.9m Q4 2014 Q
Slide 39: Orange Belgium key financials
Orange Belgium key financials improving financials with a growing customer base in €m Var. (%) Insight • Mobile service revenue +1.9% year-on-year or Total service revenues 540.3 537.1 0.6 % +3.2% excluding EU roaming regulation thanks to higher base and ARPU • Reflecting services revenues growth wi
Slide 40: Consolidated net income and financial debt
Orange Belgium consolidated net income and financial debt improving cash flow generation and debt profile in €m Var. (%) Insight EBITDA 145.5 140.4 3.6% Depreciations & other -98.0 -99.4 -1.4% expenses EBIT 47.4 41.0 15.8% Reflecting the evolution of EBITDA Financial results -3.3 -3.6 -7.8% Tax -18.
Slide 41: 2016 guidance
Section four 2016 guidance 41
Slide 42: Orange Belgium revised its 2016 guidance
Orange Belgium revised its 2016 guidance investing in future growth while protecting EBITDA margin mobile price stabilization / market repair further development of data usage / monetization of 4G investment maximum gross roaming impact of 28.5M€ on revenues and EBITDA restated EBITDA guidan
Slide 43: Q&A
Section five Q&A 43
Slide 44: Investor Relations
Investor Relations Siddy Jobe Director Investor Relations Siddy Jobe siddy.jobe@orange.com +32 2 745 80 92 @PressOrangeBE https://www.linkedin.com @harion /company/orange-belgium https://corporate.orange.be H1 2016 results, 20th July 2016