Orange Belgium SA · EURONEXT:OBEL
Orange Belgium SA — Q2 2020 Earnings Presentation
32 slides from Orange Belgium SA's earnings presentation, Jul 24, 2020
Slide 1: Q2 2020 Financial Results Orange Belgium
Q2 2020 Financial Results Orange Belgium July 24, 2020
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
Slide 3: Section one: COVID-19 impact
Section one COVID-19 impact 3
Slide 4: Orange Belgium follows the authorities' recommendations in every step of the lockdown
Orange Belgium follows the authorities’ recommendations in every step of the lockdown March April May Lockdown starts in Belgium Lockdown continues in Belgium Lockdown lifting starts 2-Mar: OBEL takes preventive measures 06-Apr: Shops could be visited in 04-May: Gradual ease of coronavirus 3
Slide 5: COVID-19 impact in Q2'20: €38.2m total impact on revenues
COVID-19 impact in Q2’20: €38.2m total impact on revenues – mitigated on the EBITDAaL Commercial Revenues EBITDAaL lower acquisition of mobile Lower incoming Lower incoming SMS have no - €16.0m customers and convergence SMS impact on EBITDAaL Declining roaming is lower handset sales Lowe
Slide 6: Section two: Q2 2020 Highlights
Section two Q2 2020 Highlights 6
Slide 7: Orange Belgium keeps improving its offers during Q2
Orange Belgium keeps improving its offers during Q2 Internet boost As a Bold Challenger, we follow closely the habits of our Download speed increased customers and we know a fast from 200 Mpbs to 400 Mpbs and reliable connectivity is key.. Offer available to residentials, independents and SoHo Revam
Slide 8: The Jupiler Pro League will be available to all Orange customers
The Jupiler Pro League will be available to all Orange customers, convergent and mobile, for 5 years as from August 2020 Orange Belgium is the first player signing a distribution agreement allowing to make the Jupiler Pro League available for its customers The 3 existing Eleven Sports channels remai
Slide 9: Q2 2020 Key achievements
Q2 2020 Key achievements Mobile contract excl. M2M Convergent customers Net additions Mobile contract 17.8% 2.6 m 288 k excl. M2M +7k of total postpaid 3.1% yoy Convergent mobile base is customer + 8 k +33.6% yoy convergent Belgium Belgium Belgium Belgium Revenues Retail service EBITDAaL eCapex reve
Slide 10: Section three: Operational Results
Section three Operational Results 10
Slide 11: Convergence: customer base increase in spite of the COVID-19 impact
Convergence: customer base increase in spite of the COVID-19 impact 19 25 20 25 21 14 16 17 8 280 288 Love (‘000) 258 216 233 200 180 136 155 +8k +33.6% 15% Love customer Love customers of convergent net adds, yoy variation customer base Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 202
Slide 12: Growth of the mobile postpaid customer base within a competitive landscape
Growth of the mobile postpaid customer base within a competitive landscape and COVID-19 impact +3% 2,548 2,579 2,588 2,594 2,516 9 32 31 294 319 352 385 396 26 Customer base (‘000) Net adds (‘000) 25 33 33 22 7 11 7 2,222 2,229 2,227 2,202 2,198 4 -2 -4 -24 Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020
Slide 13: Mobile prepaid: continued decline in Q2 mainly due to COVID-19 effect
Mobile prepaid: continued decline in Q2 mainly due to COVID-19 effect -13% -4 -4 Customer base (‘000) Net adds (‘000) -21 -21 557 553 -28 532 511 483 Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * *Impacted by COVID-19 13
Slide 14: Mobile: Average mobile data usage close to 5 GB
Mobile: Average mobile data usage close to 5 GB +21% +38% Average mobile data +79% 4.9 GB usage (GB) (excl. MVNO) Average mobile data +35% usage (smartphone), 4.9 +55% 4.5 4.1 4.1 +21% yoy +57% 3.7 +120% 3.2 3.3 2.5 1.8 0.3 1.3 1.3 0.9 0.3 0.6 0.5 0.9 0.1 EoP 2013 EoP 2014 EoP 2015 EoP 2016 EoP 2017
Slide 15: Slight decrease in B2C convergent ARPO and in mobile-only ARPO
Slight decrease in B2C convergent ARPO and in mobile-only ARPO Quarterly B2C convergent ARPO (€) Quarterly mobile only ARPO (€) +4.1% -1.6% +1.3% +1.6% -3.2% -2.6% -2.5% -1.9% -1.5% -4.6% 76.8 77.7 76.7 75.9 75.6 20.6 21.2 20.4 20.3 19.7 7.1 6.7 6.9 6.7 6.4 7.1 6.7 6.9 6.7 6.4 Q2 2019 Q3 2019 Q4 201
Slide 16: Regulatory update (1/2)
Regulatory update (1/2) 27 May: CRC published its final decision on new cable wholesale tariffs entering into force on 1 July Orange Belgium takes note of the final decision of the regulators, and: Regrets that the EC’s comments have only marginally resulted in changes to the draft decision Cabl
Slide 17: Regulatory update (2/2)
Regulatory update (2/2) End 2019, the BIPT launched a consultation regarding various spectrum related matters mainly to deal with intermediate and/or associated spectrum matters the extension of the 900 MHz, 1800 the proposal to increase the the new framework for MHz and 2100 MHz licenses beyond r
Slide 18: Q2'20 update: Simplification, Digitalization, Empowerment
Q2’20 update Simplification Digitalization Empowerment Launch new GO offer portfolio Focus on non-physical sales End-to-End responsibility Migration from legacy offer channels (boosted by COVID-19 Initiatives to develop agile way started context) of working within the Renegotiation of IT
Slide 19: Section four: Financial Results
Section four Financial Results 19
Slide 20: Retail service revenues: solid growth despite COVID-19 impact
Retail service revenues: solid growth despite COVID-19 impact +9.6% +7.1% +6.5% +4.6% +2.1% Retail service revenues (€ m) 221.8 222.8 224.8 221.0 207.0 Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Retail service revenues yoy (comparable basis) *Impacted by COVID-19 20
Slide 21: Convergent service revenues: strong growth
Convergent service revenues: strong growth +69.9% +54.2% +47.7% +35.8% +33.2% Convergent service revenues (€ m) 51.7 54.6 48.2 41.0 44.3 Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Convergent service revenues yoy *Impacted by COVID-19 21
Slide 22: Mobile only service revenues decreased due to convergence uptake and COVID-19
Mobile only service revenues decreased due to convergence uptake and COVID-19 impact +0.1% -2.2% -2.5% -3.9% -7.2% Mobile only service revenues (€ m) 153.3 155.4 150.5 148.4 142.3 Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Mobile only service revenues yoy *Impacted by COVID-19 22
Slide 23: Orange Belgium Group: Q2 2020 strong EBITDAaL growth continues
Orange Belgium Group: Q2 2020 strong EBITDAaL growth continues 1,360.1 299.4 369.5 79.6 EBITDAaL (€ m) Revenues (€ m) 334.3 83.6 148.2 636.6 328.7 302.8 -7.9% 86.0 +9.7% * 78.4 327.7 333.9 +1.9% +7.6% 57.8 62.2 2019 2020 Label Label 2019 2020 Q1 Q2 Q3 Q4 Q1’19 and Q2’19 figures on a comparable basis
Slide 24: Revenues growth driven by increase in retail service revenues
Revenues growth driven by increase in retail service revenues Revenues evolution (€ m) -7.9% +4.6 Convergent service revenues +13.6 +1.6 MVNO Other +1.4 Fixed & IT +328.7 +2.0 service revenues -16.0 SMS +9.8 -11.0 Mobile +318.9 service revenues Roaming + -5.8 -18.8 -11.7 +302.8 Q2 2019 BKM Q2 2019 R
Slide 25: EBITDAaL increased thanks to higher retail service revenues and cost efficiencies
EBITDAaL increased thanks to higher retail service revenues and cost efficiencies EBITDAaL evolution (€ m) +9.7% +86.0 -0.1 Retail service +7.0 +78.9 +78.4 +4.6 revenues -0.5 -18.8 Wholesale + revenues +26.7 -11.7 Equipment sales and -25.9 other revenues Q2 2019 BKM Q2 2019 Revenues Direct Labor Ind
Slide 26: Q2 2020 eCapex
Q2 2020 eCapex eCapex (€ m) -30.7% 13.1% 42.9 9.8% 11.0 Net debt 29.8 €181.3 m 7.3 31.9 22.5 Net debt/EBITDAaL 0.6x Q2 2019 Q2 2020 Cable capex incl. CPE, IT & Network, etc. Core capex Total capex to total revenues ratio 26
Slide 27: Q2'20: Cable financials on the way to be cash flow positive
Q2’20: Cable financials on the way to be cash flow positive Revenues Variations €35.1 m +35% EBITDAaL: €6.4 m +€4.0 m eCapex: €7.3 m -34% Operating cash flow: - €0.9 m +€7.8 m 27
Slide 28: Section five: 2020 guidance
Section five 2020 guidance 28
Slide 29: Updated 2020 guidance
Updated 2020 guidance Initial Updated Guidance Guidance Revenues Slight decrease in revenues vs. growth Low-single digit growth vs. 2019 2019 on a comparable basis EBITDAaL €310-330 m €310-330 m Stable vs. 2019 Slight decrease vs. 2019 eCapex (excluding the RAN sharing agreement) (including the RAN
Slide 30: Updated 2020 guidance follow-up
Updated 2020 guidance follow-up Updated Q1’20 H1’20 Guidance Revenues Slight decrease in revenues vs. +1.9% -3.0% growth 2019 on a comparable basis EBITDAaL €310-330 m €62.2m €148.2m Slight decrease vs. 2019 eCapex -4.8% -18.7% (including the RAN sharing agreement) Reduced headwinds in comparison
Slide 31: Section six: Q&A
Section six Q&A 31
Slide 32: Q2 2020 Financial Results Orange Belgium
Q2 2020 Financial Results Orange Belgium July 24, 2020