Proximus Sa · EURONEXT:PROX
Proximus Sa — Q3 2021 Earnings Presentation
63 slides from Proximus Sa's earnings presentation, Oct 29, 2021
Slide 1: Proximus Group Results presentation Q3 2021
Proximus Group Results presentation Q3 2021 29 October 2021
Slide 2: #inspire2022
#inspire2022
Slide 3: Delivering on our ambitious strategy
Delivering on our 3 ambitious strategy Become the reference operator in Europe Build the best Operate like a GROW PROFITABLY Act for a GIGABIT NETWORK “DIGITAL native” through partners GREEN and for Belgium company & ecosystems digital society
Slide 4: Network superiority
Network domestic 4 superiority Proximus’ mobile networks to Moving to claim leadership on remain recognized as best-in- broadband with Fiber class Recognized internationally
Slide 5: Proximus deploying Fiber in 18 cities; JVs starting in 6 cities
Proximus deploying Fiber in 18 cities. domestic 5 JVs starting construction in 6 cities ✓ Deploying in 18 cities ✓ To pass 2.2M homes by 2026 ✓ Starting construction in 4 cities ✓ To pass 1.5M homes by 2028 ✓ Starting construction in 2 cities ✓ To pass 0.5M homes by 2028 Gearing up Proximus’ ~ at le
Slide 6: Total of 686k Homes & Businesses Passed
domestic 6 Total of 686k Homes & Businesses Passed (GPON) (in K) 800 200 686 621 180 700 Homes Passed. 533 160 600 460 140 500 391 120 +65K added 400 100 80 300 60 89 200 69 73 65 40 100 45 20 during summer 0 0 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 holiday period YTD rollout, on track to deliver >300K HP fo
Slide 7: Superior mobile network
domestic 7 superior mobile network Superior mobile Co-creating 5G use Getting ready for network quality cases with business 100% 5G coverage customers • Active RAN sharing, across all technologies • Better coverage & quality • Reduce energy 4G Best deep indoor, consumption and cost per 92% coverage
Slide 8: Partnerships and ecosystems
domestic 8 partnerships ecosystems Banx, fully digital Beats, a tailor- • Optimizing energy consumption and sustainable made and modular • Reducing carbon footprint Belgian banking, offer combining imagined by banking and Proximus, powered telecom services by Belfius.
Slide 9: Bringing our Cloud Solutions in line with hyperscalers standards
Bringing our Cloud Solutions domestic 9 in line with hyperscalers standards Accelerating our hybrid -20% cloud growth TCO of IT infrastructure ✓ Capabilities to support the customer journey from strategy to implementation. ✓ Value accretive ✓ Exclusive access to intellectual ✓ € 71M cash proceeds (Q
Slide 10: Green, digital and socially inclusive
domestic 10 green, digital and socially inclusive Supporting Wallonia after flooding ✓ Partnering to bridge the ✓ Prevention campaign in ✓ Available online and in ✓ Restored network digital divide primary schools Proximus Shops infrastructure ✓ 50GB of free data to customers living in impacted areas
Slide 11: Highlights Q3 2021
Highlights Q3 2021
Slide 12: Key Q3 2021 financials
Key Q3 2021 financials 12 + 2.4% - 2.6% Group Group revenue EBITDA YTD YTD -0.8% -3.2% 736 736MM 408M Domestic Domestic Group Group CAPEX Normalized CAPEX FCF +12.6% BICS +15.8% BICS 408MYTD (excl. football (excl. Sep & spectrum rights) spectrum football rights) & Normalized +22.1% -28.1% FCF TeleSi
Slide 13: Domestic customer bases
domestic 13 Domestic customer bases Net adds Group Postpaid (‘000) Internet base 2,163K; TV base 1,707K; Postpaid base 4,611K; + 1.9% YoY + 2.6% YoY + 8.9% YoY 57 48 58 43 37 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Net growth tempered by • Lower customer rotation in the market • Mid-July severe floods While c
Slide 14: Fiber
domestic 14 104,000 Fiber 1 Gbps Flex Fiber +85% Fiber net adds & park* (in K) +€7 Less X2 Churn Gross gains ARPC *Customer X-play level (consumer)
Slide 15: Convergence – core to our strategy
domestic 15 Convergence – core to our strategy…. FLEX Multi Convergence mobile rate & ARPC Subscriptions (‘000)* Avg. RGUs per customer 62.5% 92.8 3.80 4.80 4.87 3.71 59.3 59.3% 738 619 477 317 134 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q3'20 Q3'21 Q3'20 Q3'21 Q3'20 Q3'21 Convergent Overall ARPC ARPC Conv 3P
Slide 16: Driving consumer value
driving consumer value domestic 16 Convergent base Within mix, ARPC +0.6% on +6.1% convergent revenue high comparable + 11,000 in Q3 up 2.4% YoY base 556 548 +0.6% 3,136 3,076 YoY 71 69 -5.5% Mobile 872 824 YoY postpaid only 167 154 -6.9% Fixed only 1,157 1,078 YoY 59.0 59.3 +2.4% 317 325 YoY 1,107
Slide 17: Q3 B2B domestic
Q3 B2B domestic 17 B2B Total revenue & YoY trend 3.5% -0.5% -1.2% -1.9% -6.0% 335 345 339 339 ▪ ICT services continued their positive track 328 ▪ ICT hardware impacted by semi-conductor supply chain Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 ▪ Mobile services revenue growing Some notable Q3 wins ▪ Fixed Voice re
Slide 18: B2B better ICT Services revenue
B2B domestic 18 better ICT Services revenue ICT Product vs Services revenue (€M) & YoY revenue* Digital adoption grows 7.0% revenue from high-value 1.8% 2.2% -0.9% -4.1% services. -1.7% -4.1% -6.8% ✓ Advanced Workplace ✓ Security services 135 129 ✓ Application & Data integration ✓ Cloud services 134
Slide 19: B2B Mobile, Internet, Fixed Voice
B2B Mobile domestic 19 Internet Internet Mobile Fixed Voice Park (K) Park (K) Park (K) 0.7% 2.9% -10.3% 132 133 1,118 475 1,086 426 YTD'20 YTD'21 YTD'20 YTD'21 YTD'20 YTD'21 Arpu (YoY trend) Arpu (YoY trend) Arpu (YoY trend) 0.3% 1.2% 1.7% -0.4% -0.6% 5.4% 8.9% -2.3% -1.9% -7.4% 1.5% Copper -9.9% -9
Slide 20: Proximus Wholesale, open non-discriminatory network
Proximus Wholesale, Open, domestic 20 non-discriminatory network Revenue from Wholesale WS Broadband park Services stabilizing. returned to positive trend Low-margin Interconnect from historical decline erodes. >1/3 Significant Net adds growth On Fiber opportunity thanks to network superiority 33 30
Slide 21: Domestic revenue
Domestic revenue domestic 21 Domestic Revenue (underlying, €M) -0.8% 8 -15 1,094 -7 15 1,085 -8 o/w € -9M 0 -1 1 1,070 ICT product revenue Consumer & Enterprise services -1.7% YoY -2.1% YoY on an organic basis Q3'20 Consumer Consumer Enterprise Wholesale Fixed & Mobile Terminals Remainder Q3'21 Mobi
Slide 22: TeleSign
TeleSign 22 TeleSign ~90 deals won in Q3 Geographical Q2 & Q3 are the highest consecutive expansion bookings quarters in TeleSign’s history Signed - Identity Services for provider in Philippines Signed – Identity services for global wireless network provider in Indonesia Expanding digital identity G
Slide 23: Strong sales TeleSign
strong sales TeleSign TeleSign 23 Revenue +21.7% or €M +28.0% in CC +22.1% or +21.4% in CC 241 198 71 87 Q3'20 Q3'21 YTD'20 YTD'21 Investing in Q3 EBITDA Direct Margin ✓ Go-to market €M -3.2% or ✓ R&D positive at +9.5% in CC +4.6% or ✓ Product €5M development in spite of steep +2.0% in CC investment
Slide 24: Strong rise in BICS Q3 EBITDA
Strong rise in BICS Q3 EBITDA bics 24 +12.6% • Cloud communication services Revenue 242 263 main driver of Growth revenue. +12.6%, with 234 237 235 12 +31% YoY Growth 9 10 9 9 • Core revenue up on sustained all product 86 86 87 97 104 high A2P volumes with groups posting +20.8% YoY Core continued fa
Slide 25: Group OPEX +1.7%
25 Group OPEX +1.7%. Firm cost control in +0.4% Domestic and BICS, Organic Domestic opex TeleSign opex reflects +1.4% incl. Mobile Vikings investments TeleSign investing in growth ambitions Group OPEX (underlying, €M) Group OPEX (underlying, €M) 430 5 0 3 -1 438 6.7% 1.1% 1.4% 1.7% -4.5% -2.3% -8.3%
Slide 26: Group EBITDA -2.6%, decline moderating
26 Group EBITDA -2.6%, decline moderating in line Organic Domestic EBITDA -4.0% with our expectations with direct margin down from high 2020 base BICS EBITDA+15.8% TeleSign Investing in growth ambitions Group EBITDA (underlying, €M) Group EBITDA (underlying, €M) 469 -8 -5 4 -2 457 0.3% -1.5%-0.2% -2
Slide 27: Investments
investments 27 Group Capex €M, accrued, excl. spectrum & football rights 736 628 • Fiber roll-out accelerating, YOY +90% new HP • Customer related capex up on more customer installations • Digitalization and IT transformation 23 33 % % investments. YTD Q3'20 YTD Q3'21 Fiber Customer related Other Cu
Slide 28: FCF of €408M YTD-September
28 FCF of € 408M YTD-September (€ M) 126 -1 -113 505 2 507 -48 -12 -2 -40 -9 408 -132 Mainly linked to Fiber acceleration 276 Mainly Mobile Vikings acquisition FCF Acquisitions FCF Underlying Income Interest Early AP/AR/ Cash Fiber Other FCF Acquisitions FCF YTD'20 2020 YTD'20 Ebitda tax payments Le
Slide 29: Guidance metrics and actuals
29 • Guidance Actuals Outlook Actuals organic metrics FY 2020 FY 2021 YTD 2021 (excl. Mobile Vikings) • Underlying € 4,356M Close to the 2020 €3,230M Domestic revenue level • Underlying Group € 1,836M Mid to upper part of € 1,358M EBITDA € 1,750-1,775M • Capex € 1Bn Close to € 1.2Bn € 736M (excl. Sp
Slide 30: 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 37757627#
Slide 31: A more detailed view on Q3
A more detailed view on Q3
Slide 32: Contents and notes
32 • Group P 33 • Consumer P 40 • Enterprise P 46 Notes • Wholesale P 53 • All figures included in this presentation are on ‘Underlying’ basis, allowing for a meaningful • TeleSign P 54 YOY comparison. • Figures are rounded. Variances are calculated • BICS P 56 from the source data before rounding,
Slide 33: Q3 underlying Group Revenue +2.4% YoY
33 Q3 underlying Group Revenue +2.4% YoY, +1.5% organic growth excl. Mobile Vikings €M 16 -4 1,400 30 1,368 8 -6 -9 -1 Domestic -0.8% 12.6% 22.1% Group Group+2.4% 2.4% Q3'20 Consumer Enterprise Wholesale Other (incl. BICS TeleSign Eliminations Q3'21 eliminations)
Slide 34: Internet, TV and Fixed Voice lines
34 increasing # Lines Internet TV 2,122 2,137 2,148 2,158 2,163 2,090 2,108 +41K Internet 19 YoY 14 15 12 10 1 5 +1.9% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 1,641 1,652 1,663 1,677 1,690 1,702 1,707 + 44K 11 11 14 13 12 YoY 1 5 +2.6% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 • Strong traction of
Slide 35: Postpaid customer growth
35 Postpaid customer growth # Mobile park & net adds (Group, in ‘000): 5,282 5,319 4,873 4,894 4,910 4,824 4,833 Postpaid YoY +8.9% Prepaid 709K 45 57 48 58 30 43 37 -19 -16 -22 -22 -11 -20 Prepaid -36 13% YoY +10.9% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 87% Postpaid 4,611K Postpaid net adds Pre
Slide 36: Direct Margin
36 Direct Margin -0.5% Q3 899 -8 4 1 -1 895 (€M) -0.5% Domestic DM Q3 YoY -1.0%, -1.9% on organic basis, resulting from Q3'20 Domestic BICS TeleSign Eliminations Q3'21 decrease in high margin Fixed Voice traffic & ongoing Fixed Voice line erosion. BICS DM Q3 YoY +7.2%, in particular from Growth & Co
Slide 37: EBITDA to FCF
37 EBITDA to FCF (€ M) 1,403 -61 21 1,362 39 -860 -40 -28 -32 -52 19 408 -132 276 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'21 YTD'21 and int
Slide 38: Net income
38 Net income YTD (€ M) 454 -48 -35 -53 31 9 356 -2 Accelerated Incl. positive depreciation of provision reversal some network Effective tax rate on Pylon tax in components & 24.2% 2020 and FFP increasing asset base YTD'20 Underlying Incidentals D&A (*) Net Tax expense Others (***) YTD'21 Ebitda fin
Slide 39: Sound financial position
sound financial position 39 4.3 Yr BICS Average debt duration Acquisition Net debt end of non- Net debt end Adjusted December controlling September Net Debt 1.77 % 2020 Free Cash Flow Dividends interests Other 2021 (YTD, €M) Incl. Mobile Excluding Lease Vikings Weighted average coupon liabilities ac
Slide 40: Q3 Consumer highlights
consumer 40 Q3 Consumer highlights • Flex continued to drive a strong commercial performance in convergent offers. • With +14,000 Fiber activations the Fiber customer park reaches 104,000, +85% year- on-year. • Added +44,000 Mobile postpaid cards, +4,000 Internet and +5,000 TV subscriptions. • Conve
Slide 41: Q3 Consumer revenue +1.1%
Q3 Consumer revenue +1.1% consumer 41 €M +1.1% 8 -13 19 680 672 -3 -1 2 -3 -1 661 Services revenues -1.4% from a high comparable base in 2020, which temporarily Customer services benefited from an increased revenues -1.4% usage of Fixed voice and Mobile Data. -1.6% organic 2020 Convergent Fixed Mobi
Slide 42: TV and Internet park
TV and Internet park. consumer 42 +38,000 YoY, +1.9% 1,921 1,939 1,952 1,965 1,975 1,986 1,990 Broadband Internet customers (‘000) 18 13 13 10 10 4 +43,000 YoY, +2.6% 0 TV households Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Slower growth pace from to prior quarters : • Less customer rotation • Mid-
Slide 43: Mobile postpaid
mobile postpaid consumer 43 Incl. Mobile Vikings (1 June ’21) 3,165 3,209 Mobile 2,797 2,829 2,876 2,907 2,937 postpaid park & net adds (‘000) Mobile Postpaid 47 44 18 32 31 31 37 +44K net adds in Q3 continued firm performance of the Proximus Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 brand and suppo
Slide 44: ARPC +0.6%
ARPC +0.6% consumer 44 Customers (‘000) ARPC X-play (€) Consumer Services Revenues Ongoing migration towards X-play (M€) Convergent base +0.6% YoY Customer moving to Convergent -1.4% from high base in 2020 offers at higher ARPC 2.70 avg. RGU 3,136 3,076 per Cust end 556 548 Q3’21 or +2.7% -3.6% YoY
Slide 45: Convergent revenues +2.4% YoY
consumer Convergent revenues +2.4% YoY 45 1 Growing convergent customer base to 1,174,000. 3 Convergent ARPC (€) Net adds in ‘000 21 -3.6% 17 18 16 12 12 11 • Q3’20 high Fixed 27 30 31 Voice and Mobile 23 21 13 10 data traffic -1 2 -4 • Changing customer -12 -13 -10 -10 96.2 92.8 product mix. Q1'20
Slide 46: Q3 Enterprise highlights
enterprise 46 Q3 Enterprise highlights • B2B transformation continued to deliver ICT Services revenue growth. • Low-margin ICT product revenue affected by global supply issues, leading to a total ICT revenue decline of -4.1%. • Fixed Voice revenue down on eroding base, while ARPU remains positive at
Slide 47: Enterprise Q3 revenue -1.9%
enterprise 47 Enterprise Q3 revenue -1.9%, impacted by Fixed Voice revenue erosion & lower ICT product revenue 3.5% -2.4% -4.5% -0.5% -1.2% -1.9% 0.1% -6.0% • Mobile services revenue up Revenue despite continued challenging (€M) & YoY 343 345 339 339 1,005 1,006 competitive environment 327 335 328 v
Slide 48: Mobile revenue up by 2.9%
Mobile revenue up by 2.9%, enterprise 48 Mobile postpaid growth & EOP (‘000) M2M growth & EOP (‘000) 3,187 YoY mobile postpaid base 1,072 1,081 1,086 1,096 1,100 1,109 1,118 3,022 2,181 2,343 2,515 +2.9% or +32,000 cards 1,900 2,076 10 507 > 3.1 million activated M2M 8 9 8 9 5 5 122 176 106 162 172
Slide 49: Fixed Voice revenue -9.2%
enterprise 49 Fixed Voice revenue -9.2%, -9.2% Fixed Voice revenue Fixed Voice revenue erosion (€M) & YoY variance 44 42 43 41 43 42 39 -9.2% YoY, driven by the decrease in Fixed Voice park. Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 489 484 475 462 450 438 426 Voice line loss/gain & EOP Park (‘000)
Slide 50: Internet revenue drivers
Fixed Data revenue fairly stable. enterprise 50 Positive Internet ARPU and customer base, in competitive setting. 0.6% Fixed data* revenue Fixed data revenue (€M) & YoY variance 60 59 61 62 61 61 61 +0.6% YoY + Contract Eleven sports (signed in August Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 2020)
Slide 51: ICT revenue -4.1% in Q3 YoY
ICT revenue -4.1% in Q3 YoY, enterprise 51 Q3’21 share of high value ICT ICT revenue (€M) & YoY services -4.1% High-value services revenues up YoY good performance in Advanced workplace, +5 p.p. YoY Security and Application & data integration and 134 135 141 132 Cloud services, reflecting the initia
Slide 52: Advanced Business Services
Advanced enterprise 52 Business Services ABS includes revenue from Proximus’ convergent solutions and Smart mobility revenue from Be-Mobile, with traffic management revenues lower YoY. (€M) -10.6% 10 9 10 10 8 10 9 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21
Slide 53: Wholesale Fixed and Mobile services
Wholesale Fixed and wholesale 53 Mobile services Proximus Carrier and Wholesale Solutions welcomes all operators on the Proximus open networks. • Fixed and Mobile wholesale services almost stable YoY: Visitor roaming revenue remained positive YoY, supported by wholesale Mobile and Internet services,
Slide 54: Q3 TeleSign results
TeleSign 54 Q3 TeleSign results • Another strong sales quarter with revenue up +22.1% (+21.4% on a constant currency basis). • Both Programmable Communication and Digital Identity services show revenue growth. • Direct margin up year-on-year +4.6%, on constant currency basis this was +2.0%. • Ongoin
Slide 55: TeleSign
TeleSign TeleSign 55 Revenue (€M) 22.1% 21.7% & YoY variance Revenue +22.1% 68 71 75 77 77 87 198 241 (+21.4% on constant currency) 58 Driven by both CPAAS & Digital Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 YTD'20 YTD'21 Identity Services. YoY growth reflecting benefits of solid customer acquisitio
Slide 56: Q3 BICS results
bics 56 Q3 BICS results • Q3’21 revenue +12.6%, all product groups posting revenue growth. • Revenue from Core services up by 20.8% on sustained strong performance in messaging, combining high A2P volumes with a continued favorable destination mix in Q3. • Cloud communication services main driver of
Slide 57: Q3'21 revenue +12.6%, all product groups growing
Q3’21 revenue +12.6%, all product groups bics 57 posting revenue growth. Core Revenue (€M) 20.8% 18.0% (messaging, mobility, Revenue from Core services infrastructure) +20.8% in Q3 YoY 81 77 86 86 87 97 104 244 288 Sustained strong performance in messaging, combining high A2P volumes with a continue
Slide 58: Q3'21 EBITDA up by 15.8% to EUR 28M
Q3’21 EBITDA up by 15.8% to EUR 28M bics 58 Revenue (€M) 12.6% 1.8% Q3’21 revenue +12.6%, 727 740 all product groups posting revenue 257 236 234 237 235 242 263 growth. Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 YTD'20 YTD'21 Direct Margin (€M) 7.2% -2.4% Q3’21 direct margin +7.2%, 173 169 in particu
Slide 59: Appendix
appendix 59 • From reported to underlying P 60 • Shareholder structure P 61 • Contact information P 63
Slide 60: Group incidentals
appendix 60 GROUP - Incidentals GROUP GROUP GROUP GROUP Revenue EBITDA Revenue EBITDA (EUR million) Q3 '20 Q3 '21 Q3 '20 Q3 '21 YTD '20 YTD '21 YTD '20 YTD '21 Reported 1,368 1,401 490 466 4,091 4,138 1,486 1,403 Lease Depreciations 0 0 -19 -20 0 0 -60 -60 Lease Interest 0 0 -1 0 0 0 -2 -1 Incidenta
Slide 61: Shareholder structure
appendix 61 Situation 30/09/2021 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 Belgia
Slide 62: Forward-looking statements disclaimer
appendix 62 “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 stat
Slide 63: Investor Relations
appendix 63 Investor Relations Call: +32 2 202 82 41 +32 2 202 62 17 E-mail: [email protected] Proximus Investor Relations website : www.proximus.com/en/investors Nancy Goossens Eline Bombeek Investor Relations Director Investor Relations Manager