Orange Belgium SA · EURONEXT:OBEL
Orange Belgium SA — Q3 2020 Earnings Presentation
37 slides from Orange Belgium SA's earnings presentation, Oct 23, 2020
Slide 1: Q3 2020 Financial Results
Q3 2020 Financial Results Orange Belgium October 23, 2020
Slide 2: Disclaimer
Disclaimer This presentation might contain forward-looking statements about Orange Belgium in particular for 2020. 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: Q3'20: Regained commercial momentum; efficient cost reduction boosting EBITDAaL
Q3’20: Regained commercial momentum; efficient cost reduction boosting EBITDAaL 3
Slide 4: Section one: Q3 2020 Highlights
Section one Q3 2020 Highlights 4
Slide 5: Go Plus: data boost & extra discounts combined with convergence
Go Plus: data boost & extra discounts combined with convergence +60% more data Go Plus price discount in combination with €4 /mobile convergence subscription 5
Slide 6: An unbeatable price for the football option for all Love customers
An unbeatable price for the football option for all Love customers €10.99* Different options: 1. International Pass €9.99* 2. Pro League Pass €10.99* * Price per month 6 3. All Access Pass €14.99*
Slide 7: Smart Home: different options to make customer's home safe and smart
Smart Home: 3 different options to make customer’s home safe and smart Smart Comfort Smart Security Smart home improves energy consumption, increases security Smart Relax and comfort, enjoying new forms of entertainment 7
Slide 8: Major Love milestone achieved thanks to the Bold Challenger Strategy
Major Love milestone achieve thanks to the Bold Challenger Strategy increase market 300k share customers reached beginning Sept >250k customers 180k customers >100k GO family customers discounts Smart Home Easy Intermediary Single- New wholesale switch wholesale prices installer regulation 2016 2017
Slide 9: Orange Belgium introduces Half ID SIM cards
Orange Belgium introduces Half ID SIM cards Will help reduce plastic ½ the size of consumption by +2 tons/year regular SIM cards Total switch expected by early 2023 This is part of a broader plan to decrease Orange Belgium’s environmental impact aiming at reducing its CO2 emissions by 30% by 2023 9
Slide 10: Orange Belgium enters the sustainable smartphone market
Orange Belgium enters the sustainable smartphone market Orange Belgium is boosting BuyBack program, will promote sustainable smartphones and sell refurbished ones This is part of a broader plan to decrease Orange Belgium’s environmental impact aiming at reducing its CO2 emissions by 30% by 2023 10
Slide 11: Orange Belgium future environmental commitments
Orange Belgium future environmental commitments Goal: Decrease 30% CO2 emissions by 2023 usage of more invest in promote eco- 360° mobility circular responsible limit use of plan efficient technologies economy packaging paper For the 6th year running, Orange Belgium’s operations have been certified
Slide 12: Industrial partners showcase real-life 5G innovations in the port of Antwerp
Orange Belgium and its industrial partners showcase real-life innovations in the port of Antwerp, made possible by 5G 12
Slide 13: Nokia is selected for its future mobile radio network
Nokia is selected for its future mobile radio network Orange Belgium has selected Nokia to progressively renew its existing 2G/3G/4G mobile radio network and for the roll-out of 5G Orange Belgium will fully upgrade its existing 2G/3G/4G radio network by 2023 Goal: roll out a best-in-class, energy-ef
Slide 14: During the crisis... 'Cause
… supported the government on its During the crisis… effort to restrain the spread of the virus … showed proximity through its constant communications and surveys … valued the feedback coming from its workforce … provided support to hospitals and nursing homes … concentrated its efforts to ensure ‘C
Slide 15: Q3 2020 Key achievements
Q3 2020 Key achievements Mobile contract excl. M2M Convergent customers Net additions Mobile contract 19.1% 2.6 m 305 k excl. M2M +21 k of total postpaid +2.6% yoy Convergent mobile base is customer +17 k +30.8% yoy convergent Belgium Belgium Belgium Belgium Revenues Retail service EBITDAaL eCapex r
Slide 16: Section two: Operational Results
Section two Operational Results 16
Slide 17: Convergence net adds returned to strong levels
Convergence net adds returned to strong levels 19 25 20 25 21 16 17 17 8 288 305 280 Love (‘000) 258 216 233 200 180 155 +17k +30.8% 18% Love customer Love customers of convergent net adds, yoy variation customer base Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q3 2020 * -3.7
Slide 18: Customer base: mobile postpaid growth
Growth of the mobile postpaid customer base supported by success of the Go portfolio, despite highly competitive environment +3% 2,548 2,579 2,588 2,594 2,615 32 31 9 21 319 352 385 396 430 Customer base (‘000) Net adds (‘000) 25 33 33 33 7 11 7 2,229 2,227 2,202 2,198 2,186 -2 -4 -12 -24 Q3 2019 Q4
Slide 19: Mobile prepaid: slower decline in Q3
Mobile prepaid: slower decline in Q3 -14% -4 Customer base (‘000) -8 Net adds (‘000) -21 -21 553 532 -28 511 483 475 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q3 2020 * Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q3 2020 * *Impacted by COVID-19 19
Slide 20: Average mobile data usage above 5 GB
Mobile: Average mobile data usage above 5 GB +24% +38% Average mobile data +79% 5.2 GB usage (GB) (excl. MVNO) Average mobile data +35% usage (smartphone), 5.2 +55% 4.5 4.2 4.5 +24% yoy +57% 3.7 3.3 +120% 3.2 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 Eo
Slide 21: Roaming decrease impacts B2C convergent ARPO and mobile-only ARPO
Roaming decrease impacts B2C convergent ARPO and mobile-only ARPO Quarterly B2C convergent ARPO (€) Quarterly mobile only ARPO (€) +1.3% +1.6% -1.6% -2.5% -1.9% -1.5% -2.6% -3.0% -3.0% -4.6% 77.7 76.7 75.9 75.6 75.4 21.2 20.4 20.3 20.5 19.7 7.4 6.7 6.9 6.7 6.4 6.7 6.9 6.7 6.4 7.4 Q3 2019 Q4 2019 Q1
Slide 22: Regulatory update (1/2)
Regulatory update (1/2) 30 September 2020: BIPT launched a consultation on the monthly wholesale tariffs for access to the Proximus fiber network 30 October 2020: consultation ends Fiber wholesale tariffs 8 October 2020: BIPT launched a consultation on the one off charges related to wholesale
Slide 23: 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 24: Q3'20 update: Simplification, Digitalization, Empowerment
Q3’20 update Simplification Digitalization Empowerment Migration from legacy offer Focus on non-physical sales New agile HR organization to on-going (for B2C to Go offers) channels support transformation RFP launched for renegotiation Increase of customer digital New way of working to su
Slide 25: Section three: Financial Results
Section three Financial Results 25
Slide 26: Retail service revenues: continuous growth trajectory
Retail service revenues: continuous growth trajectory +7.1% +6.5% +4.6% +2.1% +2.6% Retail service revenues (€ m) 221.8 222.8 224.8 230.6 221.0 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q3 2020 * Retail service revenues yoy (comparable basis) *Impacted by COVID-19 26
Slide 27: Convergent service revenues
Convergent service revenues: attractiveness of the Love offers results in strong continuous growth +54.2% +47.7% +35.8% +33.2% +27.6% Convergent service revenues (€ m) 54.6 56.5 48.2 51.7 44.3 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q3 2020 * Convergent service revenues yoy *Impacted by COVID-19 27
Slide 28: Mobile only service revenues
Success of convergence impacts mobile only service revenues -2.2% -2.5% -3.9% -3.7% -7.2% Mobile only service revenues (€ m) 155.4 150.5 148.4 149.7 142.3 Q3 2019 Q4 2019 Q1 2020 * Q2 2020 * Q3 2020 * Mobile only service revenues yoy *Impacted by COVID-19 28
Slide 29: Orange Belgium Group: Q3 2020 strong EBITDAaL growth continues
Orange Belgium Group: Q3 2020 strong EBITDAaL growth continues 1,363.1 299.2 369.5 79.6 237.6 EBITDAaL (€ m) Revenues (€ m) 971.9 89.4 +7.2% 337.2 335.3 -0.6% 83.4 328.7 302.8 -7.9% 86.0 +9.7% 78.4 327.7 333.9 +1.9% +7.6% 57.8 62.2 2019 2020 2019 2020 Comparable Comparable Q1 Q2 Q3 Q4 2020 figures i
Slide 30: Retail service revenues increased by 2.6% yoy on a comparable basis
Retail service revenues increased by 2.6% yoy on a comparable basis Revenues evolution (€ m) -0.6% +5.9 Convergent service revenues +0.1 MVNO +2.0 Other +12.2 SMS -9.1 + +337.2 +3.0 +335.3 +334.3 Mobile +1.3 -5.8 service revenues -2.3 Roaming -0.5 Fixed & IT -9.3 service revenues Q3 2019 BKM Q3 2019
Slide 31: Higher retail service revenues and cost efficiencies boost EBITDAaL
Higher retail service revenues and cost efficiencies boost EBITDAaL EBITDAaL evolution (€ m) +7.2% +0.8 -4.9 Retail +89.4 service +5.9 revenues +12.1 Equipment +83.6 +83.4 sales and + -0.2 +1.3 other revenues -9.3 Wholesale revenues -2.0 Q3 2019 BKM Q3 2019 Revenues Direct Labor Indirect Q3 2020 Rep
Slide 32: Q3 2020 eCapex
Q3 2020 eCapex eCapex (€ m) +6.8% 12.5% 11.8% 41.9 39.3 6.9 9.8 Net debt €135.3 m 32.4 32.1 Net debt/EBITDAaL 0.4x Q3 2019 Q3 2020 Cable capex incl. CPE, IT & Network, etc. Core capex Total capex to total revenues ratio 32
Slide 33: Cable operations – Another quarter of positive EBITDAaL
Cable operations – Another quarter of positive EBITDAaL Revenues Variations €36.7 m +33% EBITDAaL: €5.3 m +€3.1 m eCapex: €9.8 m +43% Operating cash flow: - €4.5 m +€0.2 m 33
Slide 34: Section four: 2020 guidance
Section four 2020 guidance 34
Slide 35: 2020 guidance confirmed
2020 guidance confirmed Q1’20 H1’20 9M’20 Guidance Revenues Slight decrease in revenues vs. 2019 on a comparable +1.9% -3.0% -2.2% growth basis EBITDAaL €310-330 m €62.2m €148.2m €237.6m Slight decrease vs. 2019 eCapex (including the RAN sharing -4.8% -18.7% -10.3% agreement) Reduced headwinds in
Slide 36: Section five: Q&A
Section five Q&A 36
Slide 37: Q3 2020 Financial Results
Q3 2020 Financial Results Orange Belgium October 23, 2020