Proximus Sa · EURONEXT:PROX
Proximus Sa — Q2 2015 Earnings Presentation
36 slides from Proximus Sa's earnings presentation, Jul 31, 2015
Slide 1: Results Presentation
2095 OZ Results Presentation progsimuUs
Slide 2: Continued revenue growth: Q2'15 Group underlying revenue +1.5% YoY to €1,505m
Continued revenue growth: Q2’15 Group underlying revenue + 1.5% YoY to € 1,505 m Underlying Core revenue +2.4% to € 1,094 m, on higher Fixed and Mobile revenues BICS revenue -0.8% YoY, v.s. high comparable base Higher Direct margin: + 2.9% to € 915m for Q2’15 Core business and BICS contributing equa
Slide 3: Key Group Achievements Q2 2015
Key Group Achievements Q2 2015
Slide 4: Q2'15 Core revenue up 2.4%
Q2 Q2 Jun YTD 2015 2015 2015 (in m€) (inm€) m€) (in 27 0 39 2,984 -1 -3 0 1,505 63 7 -10 0 2,885 1,483 +2.4% +2.8% +1.5% +3.4% Underlying CBU EBU TEC Intra-group BICS Underlying Underlying CBU EBU TEC Intra-group BICS Underlying Q2'14 eliminations & Q2'15 YTD June'14 eliminations & YTD June’15 S&S S
Slide 5: Fixed Internet, TV and Fixed Voice customer evolution
Broadband customer evolution Market share net adds total 1,788 1,813 • YoY growth of 1,740 1,694 1,705 1,718 +108,000 Fixed Internet customers; i.e. Fixed 44.2 % 45.7 % +6.3% Internet 48 25 • Proximus Group 22 16 12 13 showing continued Q2 2014 Q2 2015 good net customer Q1'14 Q2'14 Q3'14 Q4'14 Q1'15
Slide 6: Growing Group mobile customer base and improving mix
…. 2.5% 1.1% Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 -0.4% -4.5% 0.0% • Fluctuation on -6.0% roaming revenue -5.0% • Higher -7.1% Reported comparable base -11.6% -12.9% On comparable basis -13.3% -14.0% 5,698 (*) 5,717 5,736 5,591 5,617 5,539 • Growing Group mobile cu
Slide 7: Households/Small offices on 3- or 4-play
• 42 % of the Households/Small offices are 3-or 4-play, and count for 62% of total HH/SO revenue • Continued improvement of mix following growth for 3-Play and 4-Play • Revenue from X-play HH/SO +2.9% YoY; 4-Play revenue +13.7% • ARPH up by 4.9% YoY to EUR 65.1, 4-Play ARPH at € 116 CBU Households p
Slide 8: Direct Margin increase from Core business and BICS
Q2 Q2 Jun YTD 2015 2015 2015 (in m€) (inm€) m€) (in 13 915 19 1,805 16 -2 33 -1 -10 -1 0 1 889 1,763 +1.6% +1.4% +2.9% +2.4% Underlying CBU EBU TEC Intra-group BICS Underlying Underlying CBU EBU TEC Intra-group BICS Underlying Q2'14 eliminations & Q2'15 YTD June ‘14 eliminations & YTD June ‘15 S&S S
Slide 9: Group underlying HR and non-HR expenses
+0.9% +1.6% 465 924 932 458 Q2 Ytd Jun 2015 258 254 2015 513 505 (in m€) (in m€) HR HR 201 212 412 428 Non-HR Non-HR Q2'14 Q2'15 YTD June '14 YTD June '15 Group underlying Underlying HR costs (EUR(€m) HR-expenses mio )& &var. YoYYoY variance Group underlying Underlying non-HR Other (EUR mio expenses
Slide 10: Q2'15 underlying Group EBITDA totaled €450m
Q2 Q2 Jun YTD 2015 2015 2015 (in m€) (inm€) m€) (in 22 873 28 2 -18 12 450 16 -1 -9 1 0 839 431 +1.6% +1.6% +4.3% +4.0% Underlying CBU EBU TEC Intra-group BICS Underlying Underlying CBU EBU TEC Intra-group BICS Underlying Q2'14 eliminations & Q2'15 YTD June '14 eliminations & YTD June ‘15 S&S S&S Q2
Slide 11: €272m Capex in Q2'15
272 245 75 Q2’14 : included capitalisation 245 € 272m Capex in Q2’15, Ytd 2015 at €499m. of 3-yr broadcasting Spectrum 197 rights of Jupiler Pro Without league football Spectrum • Renewal of the 900Mhz/1800Mhz spectrum (€ 75m) Q2'14 Q2'15 • Best in class mobile customer experience, progressing on 4G
Slide 12: Free cash flow YTD June 2015
Ytd’15 (in million €) 81 -72 34 -83 391 -150 14 215 FCF YTD June higher income tax cash paid for cash used for disposals other FCF YTD June 2014 underlying payments capex working capital 2015 EBITDA • The positive impact from the higher underlying EBITDA and lower income tax payments (partly timing)
Slide 13: June '15 net financial debt at €1,931m
• June ‘15 net financial debt at € 1,931m, €131m higher versus end 2014 • The outstanding long term financial gross debt amounted to € 2,461m • Credit ratings: Standard & Poor’s A; Moody’s A - both stable outlook Net Debt Non Net sale of December controlling treasury Net Debt June 2014 FCF Dividends
Slide 14: Revised Outlook 2015
solid achievements of Q1’15 confirmed in Q2’15, H1’15 results better than it expected. good progress made on the company’s ‘Fit-for-Growth’ strategy, some of the initiatives already translated in improved underlying trends Proximus’ management revises its full-year 2015 guidance upwards and beli
Slide 15: Consumer results Q2 2015
Consumer results Q2 2015 15
Slide 16: CBU underlying revenue and direct margin
Q2’15 underlying revenue + 3.9% YoY on good revenue CBU underlying revenue (EUR mio ) & YoY variance progress from Fixed and Mobile 2.0% 3.8% 5.3% 3.9% 900.0.. - 2.9% - 1.4% • Revenue from Fixed products improved to a +4.1% YoY, driven by both Proximus and Scarlet. 800.0.. 700.0.. 600.0.. 500.0.. •
Slide 17: CBU underlying HR and non-HR costs and segment result
CBU underlying HR costs (EUR mio ) & YoY Q2’15 underlying HR Costs : -3.2% YoY on variance - 2.2% - 3.2% lower personnel base 300.0.. • Mainly result of lower personnel base following 250.0.. 200.0.. 150.0.. natural attrition 100.0.. 50.0.. 102 102 102 95 99 99 Ytd June ‘15, HR expenses of € 198m, -
Slide 18: CBU revenue bridge by product
Note In line with Proximus’ strategy, most products are sold through multi-play Packs. Therefore, the revenue and ARPU of standalone products as described hereafter, are largely the result of the allocation of revenue and discounts to the respective products included in the Packs, as required by IFR
Slide 19: Fixed voice: line erosion limited, Scarlet gaining former Snow customers
Proximus line erosion limited and Scarlet gaining more former Snow customers Q2’15 revenue from Fixed voice totaled € 137m, Fixed voice Fix revenue Voice (EUR mio)(€ Revenue &m) YoY variance - 4% YoY 200.0.. - 4.1% - 4.0% - 3.5% - 2.1% - 3.5% - 4.0% • YoY line erosion by -18,000 or -0.8% • Increasin
Slide 20: Fixed internet revenue up 5.8%
Fixed internet revenue up 5.8%; Proximus and Scarlet adding +25,000 customers Fixed data revenue (EUR mio) & YoY variance Q2’15 Fixed data revenue of € 137 m, +5.8 % YoY 4.3% 5.9% 5.8% 2.7% 2.3% 1.9% • Driven by the growing customer base, up by 111,000 or 200.0.. +7.1% in one year 100.0.. 128 127 12
Slide 21: Proximus and Scarlet growing TV base by 35,000
Proximus and Scarlet brand growing TV base by 35,000 in the quarter Q2’15 revenue from TV totaled € 82m, +18.1% YoY Fixed TV revenue (EUR mio) & YoY variance 11.0% 12.4% 14.8% 18.1% 7.9% 7.8% 100.0.. • Continued subscriber growth, with both the Proximus and Scarlet brand increasing their customer ba
Slide 22: Higher YoY mobile revenue on growing postpaid base and ARPU
Higher YoY revenue on growing Postpaid base and ARPU trend 600.0.. Mobile service revenue (EUR mio) & YoY variance Q2’15 revenue from Mobile services +0.9% YoY 500.0.. 2.2% 0.9% • Solid growth in Postpaid base : +192,000 or +7.2% - 1.1% 0.0% 400.0.. - 6.3% - 5.6% • Blended mobile ARPU up YoY by 1.8%
Slide 23: Tango: double digit revenue growth
Double digit revenue growth on growing customer base and higher ARPU Tango revenue (EUR mio) & YoY variance Tango Q2’15 revenue of € 31m, +11% YoY 14.2% 60.0.. 11.0% 9.9% 9.5% • Revenue increase resulting from growing 20% 55.0.. customer base for Mobile postpaid as well as for 50.0.. 10% - 3.5% 45.0
Slide 24: Enterprise results Q2 2015
Enterprise results Q2 2015 24
Slide 25: EBU underlying revenue stable YoY
EBU underlying revenue (EUR mio ) & YoY variance Q2’15 underlying revenue stable YoY - 3.1% - 0.6% 0.3% 5.0% 2.1% 0.0% • Mobile and Road User charging setup fees offset decline in Fixed voice and ICT 600.0.. 500.0.. 400.0.. • Estimated € -8m (-2.4%) regulatory impact 300.0.. 200.0.. 316 329 322 327
Slide 26: EBU underlying HR costs, non-HR costs and segment result
EBU underlying HR costs (EUR mio ) & YoY variance - 0.4% - 1.1% Underlying HR Costs fairly stable • -1.1% YoY to € 68m, on lower personnel base 300.0.. 250.0.. 200.0.. 150.0.. 100.0.. Ytd June ‘15 HR expenses -0.8% lower versus the 50.0.. 67 69 67 65 67 68 previous year. .0.. Q1'14 Q2'14 Q3'14 Q4'14
Slide 27: EBU revenue bridge by product
Q2 YTD Jun 2015 2015 (in m€) (in m€) 327 -4 3 327 9 656 649 -6 4 0 -1 1 -1 1 +0% +1% Underlying Fixed Voice Fixed Data ICT Mobile Service Terminals & Underlying Underlying Fixed Voice Fixed Data ICT Mobile Service Terminals & Underlying Q2'14 Revenue others Q2'15 YTD June ‘14 Revenue others YTD June
Slide 28: Continued Fixed Voice revenue decline
Continued Fixed Voice revenue decline on stable erosion of Fixed Voice customer base and lower traffic Fixed voice revenue (EUR mio) & YoY variance Q2’15 revenue from Fixed voice totaled € 62m, - 5.7% YoY 100.0.. -2.0% -3.0% -2.6% -2.9% -4.2% -5.7% • Key driver is companies rationalisation on Fixed
Slide 29: Fairly stable Fixed Data revenue
Fairly stable Fixed Data revenue Q2’15 Fixed data revenue of € 62m, +0.7 % YoY Fixed data revenue (EUR mio) & YoY variance -3.6% -4.9% -3.5% -2.7% -2.0% 0.7% • Data Connectivity revenue increased YoY driven by roll- out of a number of large customer projects on the 100.0.. Proximus Explore platform.
Slide 30: Underlying ICT revenue
EBU generated in Q2’15 € 107 m revenue from ICT, 1.2% below the same period of ‘14, though a stable Underlying ICT revenue (EUR mio) & YoY variance amount versus Q1 2015. 14.8% -3.3% 4.4% 1.8% 2.2% -1.2% 200.0.. • Q2’15 shows an impact from the termination of some ICT contracts earlier this year, wh
Slide 31: YoY growth on larger customer base and higher data usage
YoY growth on larger customer base and higher data usage Mobile service revenue (EUR mio) & YoY variance -4.6% -0.1% 3.8% -1.4% 3.4% 1.8% Q2’15 revenue from Mobile services totaled € 80m, +1.8% YoY 100.0.. • Solid continued growth in Postpaid base : 105,000 or 74 76 76 79 77 75 79 80 9.6% more mobil
Slide 32: TEC & W underlying revenue and direct margin
TEC & W underlying revenue (EUR mio ) & YoY variance Q2’15 revenue totaled € 58m, -2.4% YoY - 5.3% - 2.4% 100.0.. 90.0.. - 9.8% - 9.5% - 10.2% - 13.8% • Lower volumes from traditional wholesale business 80.0.. 70.0.. • Snow outphasing largely compensated through Scarlet retail offer 60.0.. 50.0.. 40
Slide 33: S&S underlying revenue and costs
Q2’15 revenue totaled € 5m, S&S underlying revenue (EUR mio ) & YoY variance -6.3% 9.8% -4.5% 67.7% 12.4% - 30.3% 13.0.. 11.0.. 9.0.. 7.0.. 5.0.. 7 7 8 7 8 8 3.0.. 5 5 1.0.. -1.0.. Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 S&S underlying HR costs (EUR mio ) & YoY variance Q2’15 HR expenses € 3
Slide 34: BICS record Direct Margin
Record Direct Margin: Mobile data growth, positive volatility in Voice trading and USD effect BICS underlying revenue (EUR mio ) & YoY variance Q2’15 revenue totaled € 411m, -0.8% YoY from a high 11.9% comparable base 0.5% - 1.3% - 0.8% • solid ongoing growth in non-Voice revenue - 6 .1% - 14.3% • c
Slide 35: Forward-looking statements
“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 forward-looking statements rel
Slide 36: For further information
For further information Investor relations Nancy Goossens: +32 2 202 82 41 Sarah Franklin: +32 2 202 77 11 E-mail: investor.relations@proximus.com Proximus investor relations website : www.proximus.com/en/investors