Proximus Sa · EURONEXT:PROX
Proximus Sa — Q4 2021 Earnings Presentation
63 slides from Proximus Sa's earnings presentation, Feb 18, 2022
Slide 1: Proximus Group Results presentation Q4 2021
Proximus Group Results presentation Q4 2021 18 February 2022 Guillaume Boutin, CEO
Slide 2: Forward-looking statements disclaimer
2 This communication may 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 forward-looking statements rely
Slide 3: Key achievements Q4 2021
Key achievements Q4 2021 3 Group Revenue Taking Commercial #Inpire2022 +3.8% YoY Momentum Strategy TeleSign public ✓ Domestic +2.4% YoY ✓ Consumer Fiber +19K ✓ +126K HP Fiber, Enterprise Value of $1.3 Billion ✓ BICS +9.0% YoY ✓ Convergence +18K 14% coverage ✓ TeleSign +15.1% YoY +4.4% YoY B2B ICT **
Slide 4: 2021 financial commitments and shareholder return
2021 financial commitments domestic 4 and shareholder return 2021 Guidance Outlook Result metrics FY 2021 FY 2021 Dividend 2021 (Organic) • €1.2/share gross per share* Underlying Domestic revenue Close to the 2020 € 4,347M • Includes normal dividend of € 0.7 level -0.2% YOY gross per share • Ex-divi
Slide 5: Delivering on our #Inspire2022 Strategy
Delivering on our #Inspire2022 Strategy
Slide 6: Net-zero and circularity ambitions
6 net-zero circularity ambitions Green bond EV charging Achievements issuance points ✓ EUR 750 million to ✓ Converting Proximus ✓ 502KTons of CO2 avoided sustainably invest in street cabinets into (+8% vs 2020), mainly at business customers future proof and energy charging stations for friendly Fibe
Slide 7: Proximus deploying Fiber in 35 cities
Proximus deploying Fiber in 35 cities 7 Fiber Partners started civil works in 10 cities Fiberklaar 45 8 Proximus 35 Cities Unifiber Jointly to scale up to 2 ~10% Coverage/Yr
Slide 8: Beating 2021 fiber rollout objectives
Beating 2021 fiber rollout objectives 8 +353 813 2021 s 14 > +500 2022 s 22 Homes & Businesses Passed 353k HP 9.7k 900 813 200 weekly rollout (in K) 180 delivered in 2021 (rounded, HP) 686 800 (in k HP) 621 160 700 533 +88% +83% 140 600 500 460 120 100 400 80 126 300 353 60 9.700 89 73 200 69 65 40
Slide 9: Cost control in our own footprint
9 cost control in our own footprint Continuous improvement of operations and processes benefits average construction cost. Optimization of design rules and architecture (less trenching, less material, FTTH aerial,…) Optimization of processes (auctioning, automation, remote supervision, process minin
Slide 10: Superior customer experience
Goal: to be the Superior undisputed network customer leader experience 10 in Belgium March’22 ✓ Upstream boost to 30 Mbps May’22 ✓ Launch of Wi-fi 6 End’22 ✓ Launch of 10 Gbps capable XGS-PON
Slide 11: Mobile experience
Mobile experience 11 Best 4G population Ambitious 5G roll- Live demonstration of 20 innovative 5G coverage, 90.6% with out, aiming for national use cases in 2021 very good Proximus 4G indoor coverage in less than 3 connection years Use of drones for Agriculture sustainable weed c.99% control 86.3% 9
Slide 12: Digital innovations
Digital innovations 12 Steps taken towards becoming the digital …while supporting every company in its companion of every customer… digital transformation. Healthcare Banking Entertainment Mobility Smart Buildings Hybrid Cloud MyProximus enriched with partner services Data & Analytics EnergyID Famil
Slide 13: TeleSign public
13 TeleSign public Ongoing regulatory reviews and approvals. Transaction closing s expected by Q2’22 $ 1.3Bn EV Implies 2.2x $437 M Net Cash* Pro Forma, TeleSign EV/Revenue 2023E on TeleSign Balance Sheet Transaction overview Key funding terms ~67% Proximus ownership* Pro Forma at $10 / Share SPAC;
Slide 14: Financial & Operational Performance
Financial & Operational Performance
Slide 15: Significant NPS improvement
domestic 15 significant NPS improvement Convergent Customers 43 43 21 21 21 20 17 16 16 13 7 2019 2020 2021 2019 2020 2021 2021
Slide 16: Good growth in main customer bases
good growth domestic 16 main customers bases Net adds Group Postpaid (‘000) Internet base 2,178K; TV base 1,721K; Postpaid base 4,651K*; + 42k YoY + 44k YoY + 387k YoY* +1.9% YoY +2.6% YoY +9.1% YoY* 58 53 43 48 15 15 14 13 14 37 12 10 12 5 5 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q4'20 Q1'21 Q2'21 Q3'21 Q4'
Slide 17: 123,000 consumers on Fiber
consumer domestic 17 123,000 consumers ARPC +€7 ~90% Fiber net adds & park* 123 (in K) 104 90 77 Lower 65 Churn 65% customers on Fiber vs Copper, 1YR post-commercial launch Fiber zone *Customer X-play level (consumer)
Slide 18: Consumer revenue +2.7% organic
Consumer +2.7% domestic 18 ✓ Mobile Vikings ramping to plan Consumer revenue ✓ Strong customer momentum and growing base (M€ , YoY ) ✓ Traction for higher-value offers 2.3% 2.7% 0.8% 1.1% ✓ Fiber monetization organic -1.3% ✓ Price indexation 699 ✓ Roaming gradually coming back 680 670 680 666 ✓ Term
Slide 19: Flex offer driving Convergence
Flex offer driving Convergence, domestic 19 Overall, ARPC +0.7% Continued traction Growing convergence Overall ARPC for FLEX base driving higher growing +0.7% + 515k in ‘21 convergence revenue Flex Customers (‘000) Revenue (M€) ARPC (€) Subscriptions (‘000)* 551 544 3,130 3,068 234 218 2,006 1,875 8
Slide 20: B2B up by 1.9%
B2B up by 1.9% domestic 20 Partner in digital Enterprise revenue (M€ , YoY ) transformation 3.5% 1.9% Q4 notable wins -1.2% -1.9% -6.0% Public Corporate SMB 345 352 339 339 328 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 ✓ ICT services growing ✓ +3.6% Mobile services revenue Q4 ✓ Mobile terminals − Stable ICT har
Slide 21: B2B ICT Services revenue +4.4% in Q4
B2B higher domestic 21 ICT Services revenue, +4.4% in Q4 ICT Services vs Product revenue (€M) & YoY revenue* Digital adoption grows 2.7% 2.7% revenue from high-value -1.7% -0.9% services. -4.1% -6.8% ✓ Advanced Workplace 141 145 ✓ Security services ✓ Application & Data integration ✓ Cloud services 1
Slide 22: Domestic B2B Internet, Mobile, Fixed Voice
domestic 22 B2B Internet Mobile Fixed Voice revenue positive on higher Revenue +3.6% on Revenue -6.9% ARPU, while keeping Internet growing base and driven by the FV park; base stable improving ARPU trend partly offset by higher ARPU 0.3% 3.1% -9.8% Base (K) 133 134 1,083 1,117 462 417 YTD'20 YTD'21
Slide 23: Wholesale
Wholesale domestic 23 Significant growth opportunity thanks to network superiority +6.4% Q4 Wholesale Services revenue WS Broadband base Interconnect impacted by regulation back to growth >50% >30 Fiber net adds wholesale of 2021 customers on Fiber today1 44 42 40 41 41 30 27 29 32 32 Q4'20 Q1'21 Q2
Slide 24: Q4 Domestic underlying revenue
Q4 Domestic underlying revenue domestic 24 Domestic Revenue Domestic Revenue Q4 (underlying, €M) FY (underlying, €M) +2.4% 9 1,132 8 8 -15 15 2 -3 2 0.6% 1,105 +1.2% B2C/B2B Services 4,356 4,381 Q4'20 Consumer Consumer Fixed Mobile Vikings Enterprise Wholesale Fixed & Mobile Terminals Lux & other Q4
Slide 25: BICS growing Q4 EBITDA by 6.8%
BICS growing Q4 EBITDA by 6.8% bics 25 Revenue 3.6% Q4 Revenue benefitted from… €M 9.0% 999 • Higher Cloud Communication Services revenue (Growth) 964 259 37 43 +17.3% • Exceptional favorable destination mix benefitted Core 237 Growth 13 +25.3% 331 386 +16.7% 10 • Continued increase in A2P volumes.
Slide 26: TeleSign realizes continued topline growth
TeleSign realizes continued topline growth TeleSign 26 Revenue Strong growth in Digital +19.9% €M Identity on both revenues and +22.9% in CC +15.1% or direct margin level, driven by +10.3% in CC higher transaction volume 327 273 87 75 >40% YoY DI transaction volumes Q4'20 Q4'21 YTD'20 YTD'21 FY'19 F
Slide 27: Q4 Group OPEX +5.7%
27 Q4 Group OPEX +5.7% +3.4% Organic Domestic • OPEX +4.5% incl. Mobile Vikings • • • • • TeleSign • investing in growth ambitions • Group OPEX Group OPEX Q4 FY (underlying, €M) (underlying, €M) 464 19 3 6 491 3.9% 1,740 1,807 5.7% Q4'20 Domestic BICS TeleSign Q4'21 YTD'20 YTD'21
Slide 28: Q4 Group EBITDA -3.8%; organic -4.7%
28 Q4 Group EBITDA -3.8%; on organic basis -4.7% Domestic -3.9% EBITDA , -4.8% Organic, on higher YOY cost BICS EBITDA +6.8%, driven by higher Direct Margin TeleSign EBITDA reflects significant investment in growth strategy Group EBITDA Group EBITDA Q4 FY (underlying, €M) (underlying, €M) 426 3 -19
Slide 29: Capex
domestic 29 capex Group Capex €M, accrued, excl. spectrum & football rights 1,203 • Strong increase in Proximus Fiber HP 1,000 • Mobile network (RAN) consolidation. • Volume related capex on higher 467 372 Customer installations • Digitalization and IT transformation investments. 23 31 % % Q4'20 Q4'
Slide 30: FCF of €376M
FCF of € 376M domestic 30 (€ M) 55 -47 136 -40 29 376 -139 352 2 354 -64 Mainly -42 linked to Fiber -4 acceleration 237 Mobile Vikings Acquisition & M&A transaction costs FCF Acquisitions FCF Underlying Income Interest Early AP/AR/ Cash Fiber Other FCF Acquisitions FCF YTD'20 2020 YTD'20 Ebitda tax
Slide 31: Sound financial position
sound financial position 31 1.55X Net Debt / EBITDA (underlying) Adjusted*Net Debt (YTD, €M) 8.0 Yr Weighted average debt duration BICS (long-term only) Acquisition Net debt end of non- December controlling Net debt end 2020 Free Cash Flow Dividends interests Other December 2021 1.64 % Weighted aver
Slide 32: Domestic growth return to 2022 guidance
return to domestic 32 Domestic growth 2022 Guidance metrics Outlook FY 2022 Dividend 2022 • Proximus remains committed to an Underlying Domestic revenue Growing up to 1% YoY attractive remuneration for its excl. Terminals shareholders and intends to return Underlying Domestic EBITDA Growing up to 1%
Slide 33: Q&A
Q&A Question? Join the conference call: Dial-in UK +44 20 7194 3759 Dial-in USA +1 646 722 4916 Dial-in Europe +32 2 403 5816 Code 87352807#
Slide 34: Additional information
Additional information ➢ proximus.com/investors
Slide 35: Notes
35 • Reported to underlying P 36 Notes • Group P 37 • All figures included in this presentation are on ‘Underlying’ basis, allowing for a meaningful • Consumer P 44 YOY comparison. • Enterprise P 50 • Figures are rounded. Variances are calculated from the source data before rounding, implying • Whol
Slide 36: From reported to underlying figures
36 From reported to underlying figures
Slide 37: Q4 underlying Group Revenue +3.8% YoY
37 Q4 underlying Group Revenue +3.8% YoY, +2.8% organic growth excl. Mobile Vikings All three customer units of the Domestic segment posted a positive underlying revenue for the last quarter of the year Group Revenue Group Revenue Q4 FY (underlying, €M) (underlying, €M) 21 11 -7 1,441 18 7 1 1 1,389
Slide 38: Internet and TV lines
38 # Lines Internet TV 2,090 2,108 2,122 2,137 2,148 2,158 2,163 2,178 + 42K Internet 19 YoY 14 15 12 10 15 1 5 +1.9% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 1,641 1,652 1,663 1,677 1,690 1,702 1,707 1,721 44K + 11 11 14 13 12 14 YoY 1 5 • Successful year-end campaign +2.6% Q1'20 Q2'20 Q3'20
Slide 39: Postpaid customer growth
39 Postpaid customer growth # Mobile park* & net adds (Group, in ‘000): 5,269 5,307 5,340 4,860 4,881 4,897 Postpaid 4,811 4,820 YoY +9.1% Prepaid 45 57 48 58 53 30 43 37 689K -19 -16 -22 -22 -11 -20 -20 Prepaid -36 13% YoY +11.6% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 87% Postpaid 4,651K P
Slide 40: Direct Margin
40 Direct Margin +1.2% Q4 890 3 4 3 0 900 (€M) 1.2% Domestic DM Q4 YoY +0.4%, -0.6% on organic basis Q4'20 Domestic BICS TeleSign Eliminations Q4'21 BICS DM Q4 YoY +7.6%, in particular from Growth & Core 1.2% 0.1% services. Q’s (€M) 906 880 899 890 894 890 895 900 3,576 3,579 TeleSign DM Q4 YoY +15.
Slide 41: EBITDA to FCF
41 EBITDA to FCF (€ M) 1,828 -82 113 -1,137 26 1,772 -40 -198 Not updated -42 -67 -25 376 -139 237 Reported Lease Incidentals Underlying AP/AR/ Cash Fiber Income Interest Early Leave Others FCF Acquisitions FCF Ebitda depreciations Ebitda Inventory Capex equity tax payments Plan/FFP YTD'21 2021 YTD'
Slide 42: Net income
42 Net income YTD (€ M) 564 -64 -27 -69 38 7 443 -6 Costs related to Review of M&A transactions useful life of and headcount- some network Effective tax rate related components and 23.5% transformation an increasing costs. asset base. YTD'20 Underlying Incidentals D&A (*) Net Tax expense Others (***
Slide 43: Early redemption and green bond; liquidity
43 (€M) In Q4’21, Proximus early redeemed at par the €500M Notes due in March’22 by issuing a new 15-year green bond of €750M at a fixed rate of 0.75% per annum Liquidity end-December 2021 Short term bank debt • €252M investments, cash & cash equivalents (incl. derivatives) Investment loans • EMTN P
Slide 44: Q4 Consumer highlights
consumer 44 Q4 Consumer highlights • Successful year-end campaign and growing Fiber footprint driving strong commercial momentum • With +19,000 Fiber activations, the Fiber customer park reaches 123,000, +90% year-on- year • Added +37,000 Mobile postpaid cards, +14,000 Internet and +13,000 TV subscr
Slide 45: Q4 Consumer revenue +2.7%
Q4 Consumer revenue +2.7% consumer 45 €M +2.7% 7 3 -1 699 8 -13 18 -1 680 -2 Services revenues -1.3% below the comparable period in 2020, -1.3% Services revenue including some residual unfavorable year-on-year effect from higher Voice usage during the soft-lockdown end-2020 2020 Convergent Fixed Mob
Slide 46: Solid growth
Solid growth consumer 46 Internet +39,000 YoY, +2.0% Internet 1,921 1,939 1,952 1,965 1,975 1,986 1,990 2,004 With Fiber footprint increasing, the product customers superiority of Fiber becomes an increasingly (‘000) 18 13 13 10 10 4 14 0 relevant sales proposal Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q
Slide 47: Mobile postpaid
mobile postpaid consumer 47 Incl. Mobile Vikings (1 June ’21) 3,165 3,209 3,246 Mobile 2,797 2,829 2,876 2,907 2,937 postpaid park & net adds (‘000) Mobile Postpaid 47 44 37 18 32 31 31 37 +37K net adds in Q4 In competitive setting, the performance Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 of
Slide 48: Services revenue -1.3%, ARPC +0.7%
services revenue -1.3% consumer 48 ARPC +0.7% Customers (‘000) ARPC (€) Revenue (M€) 3,130 3,068 551 544 +0.7% -3.0% Mobile YoY 69 67 postpaid 862 812 -5.8% YoY YoY 58.6 59.0 only 165 152 -8.1% 26.5 27.2 YoY Fixed 1,063 -7.1% only 1,144 YoY 47.8 47.2 317 326 1,192 +6.1% 94.9 91.9 +2.5% Convergent 1,
Slide 49: Convergent revenues +2.5% YoY
consumer Convergent revenues +2.5% YoY 49 1 Growing convergent customer base to 1,192,000. 3 Convergent ARPC (€) Net adds in ‘000 21 -3.2% 17 18 18 16 12 12 11 Customers migrating The high uptake of 3- from packs with a fixed 27 30 31 Play convergent offers 23 21 25 voice line at higher 13 10 largel
Slide 50: Q4 Enterprise highlights
enterprise 50 Q4 Enterprise highlights • B2B transformation continued to deliver ICT Services revenue growth • Total ICT revenue +2.7% in spite of continued global supply issues impacting IT hardware deals • Fixed Voice revenue down on eroding base, while ARPU trend remains positive at +3.5% • Mobil
Slide 51: Enterprise Q4 revenue +1.9%
enterprise 51 Enterprise Q4 revenue +1.9%, mainly from higher ICT revenue, with especially ICT services continuing their positive trajectory 0.6% 3.5% 1.9% -2.4%-4.5% -0.5% -1.2% -1.9% -6.0% Revenue Ongoing competitive pricing (€M) & YoY 1,350 1,358 343 335 345 339 339 352 pressure in the B2B segmen
Slide 52: Mobile revenue up by +3.6%
Mobile revenue up by +3.6%, enterprise 52 Mobile postpaid growth & EOP (‘000)* M2M growth & EOP (‘000)* 3,035 3,200 3,352 YoY mobile postpaid base 1,105 1,117 1,073 1,083 1,088 1,096 2,356 2,528 +3.1% or +34,000 cards 1,059 1,068 1,913 2,089 2,194 >3.3 million activated M2M 8 9 10 8 9 12 507 cards e
Slide 53: Fixed Voice revenue -6.9%
enterprise 53 Fixed Voice revenue -6.9%, -6.9% Fixed Voice revenue Fixed Voice revenue -6.9% (€M) & YoY variance 44 42 43 41 43 42 39 39 YoY, down on base erosion Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 489 484 475 462 450 438 426 417 Voice line loss/gain & EOP Park (‘000) Fixed voice park,
Slide 54: Fixed Data and Internet revenue drivers
Fixed Data revenue sequentially stable, enterprise 54 -1.7% YOY on high comparable base Fixed data* revenue -1.7% Fixed data revenue -1.7% (€M) & YoY variance YoY, with Q4’20 benefitting 60 59 61 62 61 61 61 61 from higher installation revenue Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Internet
Slide 55: Strong quarter for ICT
Strong quarter for ICT. enterprise 55 Q4’21 share of high value ICT ICT revenue (€M) & YoY services 2.7% Increase in high-value services, with +1 p.p. especially a good performance in YoY Advanced Workplace, Security 134 131 135 141 132 130 129 145 services, Application & Data Integration and Cloud
Slide 56: Wholesale Revenue +1.1% YoY
Wholesale Revenue +1.1% YoY wholesale 56 Proximus Carrier and Wholesale Solutions welcomes all operators on the Proximus open networks. • Fixed and Mobile wholesale services revenue +6.4%. Visitor roaming revenue remained positive year-on-year, further supported by wholesale Mobile services, partly
Slide 57: Q4 TeleSign results
TeleSign 57 Q4 TeleSign results • Strong sales quarter with revenue up +15.1% (10.3% on a constant currency basis). • Both Programmable Communication and Digital Identity services show revenue growth. • Direct margin up year-on-year +15.7%, on constant currency basis this was +2.1%. • Ongoing invest
Slide 58: TeleSign
TeleSign TeleSign 58 Revenue (€M) 15.1% 19.9% Revenue +15.1% & YoY variance (+10.3% on constant 71 75 77 77 87 87 327 currency) 58 68 273 Driven by both CPAAS & Digital Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 YTD'20 YTD'21 Identity Services. YoY growth reflecting benefits of solid customer a
Slide 59: Q4 BICS results
bics 59 Q4 BICS results • Q4’21 revenue +9.0%, all product groups posting revenue growth • Revenue from Core services up by 13.1% on sustained strong performance in messaging, combining high A2P volumes with a continued favorable destination mix in Q4 • Cloud communication services main driver of Gr
Slide 60: Q4'21 EBITDA up by 6.8% to EUR 25M
Q4’21 EBITDA up by 6.8% to EUR 25M bics 60 Revenue (€M) 9.0% 3.6% Q4’21 revenue +9.0%, 964 999 all product groups posting revenue 257 236 234 237 235 242 263 259 growth. Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 YTD'20 YTD'21 Direct Margin (€M) 7.6% 0.0% Q4’21 direct margin +7.6%, 227 227 in p
Slide 61: All product groups posting revenue growth in Q4
All product groups posting revenue growth in Q4 bics 61 Core Revenue (€M) 13.1% 16.7% (messaging, mobility, Revenue from Core services infrastructure) +13.1% in Q4 YoY, driven by high 331 386 81 77 86 86 87 97 104 97 A2P volumes combined with a favorable destination mix, which Q1'20 Q2'20 Q3'20 Q4'2
Slide 62: Situation 31/12/2021
62 Situation 31/12/2021 Total number of shares Free-float Belgian Government Market Capitalization* Dividend yield* 338,025,135 42% 54% ~€ 5.5Bn ~7.0% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with dividend rights Belgian state 1
Slide 63: Contact Investor Relations
appendix 63 Contact Investor Relations: Call: +32 2 202 82 41 E-mail: Proximus Investor Relations website: +32 2 202 62 17 investor.relations@proximus.com www.proximus.com/en/investors