Proximus Sa · EURONEXT:PROX
Proximus Sa — Q1 2021 Earnings Presentation
54 slides from Proximus Sa's earnings presentation, Apr 30, 2021
Slide 1: Proximus Group Results presentation Q1 2021
1 Proximus Group Results presentation Q1 2021 30April2021
Slide 2: Highlights Q1 2021
Highlights Q1 2021
Slide 3: Q1 highlights: Covid-19, commercial momentum, #inspire2022, guidance
3 Q1 Covid-19 Commercial #inspire2022 Guidance 2021 momentum • Continued support for • Main customer bases • Accelerating Fiber build. • Results on track for FY Belgium & employees. growing & positive • Fiber monetization 2021 guidance • Vaccination centres: ICT ARPC. progressing as planned. solutio
Slide 4: Solid customer growth
solid customer growth 4 Postpaid excl. M2M Net adds Group 45 57 43 (‘000) 19 1 14 13 30 37 1 14 15 12 11 11 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 +2.8 % YoY +2.9 % YoY + 4.4 % YoY to 2,148K to 1,690K to 4,314K
Slide 5: Convergence
5 convergence Growing Convergent Convergent ARPC customer base Revenue up + 21,000 in Q1 550 550 +0.4% 3,127 3,104 68 67 YoY -3.0% Mobile YoY 867 841 postpaid only 170 162 -5.3% Fixed only 1,181 1,118 YoY +2.7% 58.5 58.8 312 320 YoY 1,079 1,145 +6.1% Convergent YoY Q1'20 Q1'21 Q1'20 Q1'21 Q1'20 Q1'2
Slide 6: Flex
6 +160,000 Flex Flex subscriptions (‘000)* 477 317 134 Q3'20 Q4'20 Q1'21 Flex multi-mobile strategy drove average RGUs up Uptiering via Fiber *Mix of migrations & new customers
Slide 7: Fiber
7 77,000 Fiber Fiber park & net adds* (in K) +12 Commercial drivers +8 on track: +8 +5 ✓ Win-backs ✓ Migrations 77 56 65 ✓ Churn rate 44 49 ✓ ARPC Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Proximus *Customer X-play level (consumer) 29 april 2021 7
Slide 8: Fiberklaar
533,000 8 Active in 17 Cities Flanders Fiber JV Homes & Businesses Passed (GPON) Average weekly rollout (rounded, HP) Infrastructure Fiberklaar (in K) +73 >2.5X ✓ Cleared by European +69 Competition authorities +45 ✓ Pass at least 1.5M homes in +39 6,100 Flanders by 2028 460 533 5,000 ✓ Starting in
Slide 9: B2B transformation plan execution is on track
B2B transformation plan execution is on track. 9 Past years This year & next 2023 Building on strong converged ICT converged ICT driving Telco position shaping up profitable growth • Convergent, industrialized • Monetize accelerated Cloud Telco-ICT propositions and Security growth • Telco legacy man
Slide 10: Mitigated Enterprise revenue decline by containing Telco revenue erosion
Mitigated Enterprise revenue decline by 10 containing the Telco revenue erosion… Internet Mobile Park (K) Arpu (YoY trend) Park (K) Arpu (YoY trend) 1.4% 2.7% Growing core Telecom customer -5.8% 0.3% -7.4% base -1.8% -2.8% -2.3% -1.9% -9.6% 132 134 1,072 1,100 -13.0% -9.9% & manage ARPUs Q1'20 Q1'21
Slide 11: High-value ICT
high-value ICT 11 ICT Revenue (€M) Share of high value ICT services ICT revenue down, mainly on low-margin product Q1'21 deals, while growing high- value services 134 132 +3 p.p. YoY Q1'20 Q1'21 A good start to the year Selection of signed deals:
Slide 12: Domestic revenue
Domestic revenue 12 Driven by SMS, 9 -9 (margin neutral) 1,103 -4 Mainly roaming-in -12 Consumer & Enterprise services -0.6% YoY -7 6 -1 +0.3% YoY excl. roaming out (€ -8M) 1,084 € -19M or -1.7% YoY Q1'20 Consumer Consumer Fixed Enterprise Fixed, Wholesale Fixed & Mobile Terminals Remainder Q1'21 Co
Slide 13: €2M invested in growth (TeleSign)
+43.5% YoY on constant 13 currency, 31.6% + 43.5% Revenue on constant currency* (M€) 77 (+31.6% YoY for Q1) 58 Continuing revenue growth ✓ Programmable Communication Q1'20 Q1'21 ✓ Digital Identity -28.7% Ebitda € 2M invested in growth (M€) 8 ambition. Additional skilled 6 headcount recruited. Q1'20
Slide 14: Underlying business trend resilient (BICS)
underlying business trend resilient 14 -8.7% 257 235 +12.7% 8 YoY Growth 9 Revenue 81 87 +7.2% (M€) YoY Core 167 138 -17.6% Legacy Covid-19 effects and YoY Q1'20 Q1'21 moderating MTN insourcing impact, both temporary of nature*. -19.7% Ebitda (M€) 28 22 Q1'20 Q1'21 14 of MTN *Q1 2020 was unaffected
Slide 15: Group EBITDA €446M, -3.9% YoY
15 Group EBITDA € 446M, -3.9% YOY Group EBITDA (€M) 464 -3 -7 -5 -2 446 Mainly WF with Travel bans & Headcount FFP benefits some further investments to offset by salary MTN insourcing support its index & higher effects growth • customer interaction calls. • -3.9% • Q1'20 Domestic Domestic BICS TeleS
Slide 16: Capex €225M
capex 16 € 225M (accrued; excl. spectrum & football rights) 232 225 • Timing impact content contract renewals. • Higher Fiber capex following 28 rollout acceleration, now 28% of 16 % % total. • Stepping up Digitalization and IT Q1'20 Q1'21 transformation investments. Fiber Non Fiber • Rationalizing
Slide 17: FCF of €143M in Q1
17 FCF of € 143M in Q1 46 -35 (€ M) -30 51 152 -21 152 0 -18 143 -2 141 -2 0 Codit earn-out FCF Acquisitions FCF Underlying Income Interest Early AP/AR/ Cash Fiber Other FCF Acquisitions FCF Q1'20 2020 Q1'20 Ebitda tax payments Leave Plan Inventory Capex equity Q1'21 2021 Q1'21 normalized payments /
Slide 18: 2021 outlook
2021 outlook 18 Guidance Actuals Guidance Actuals metrics FY 2020 FY 2021 Q1 2021 Underlying Close to the 2020 2021, a transition € 4,356M € 1,084M Domestic revenue level year, in which we Underlying Group € 1,836M € 1,750-1,775M € 446M further execute EBITDA upon our Capex (excl. Spectrum & footbal
Slide 19: Q&A
Q&A Join the conference call to ask your questions Dial-in UK +44 20 7194 3759 Dial-in USA +1 646 722 4916 Dial-in Europe +32 2 403 5816 Code 67 226 498#
Slide 20: A more detailed view on the results
A more detailed view on the results
Slide 21: Contents and notes
21 • Group P 22 • Consumer P 29 • Enterprise P 35 Notes • Wholesale P 42 • All figures included in this presentation are on ‘Underlying’ basis, allowing for a meaningful • TeleSign P 43 YOY comparison. • Figures are rounded. Variances are calculated • BICS P 45 from the source data before rounding,
Slide 22: Underlying Group Revenue
22 underlying Group Revenue (M€ & YoY %) 1,393 5 -4 -19 -1 -22 18 -3 1,367 Domestic -1.7% -8.7% 31.6% Group -1.9% Q1'20 Consumer Enterprise Wholesale Other (incl. BICS TeleSign Eliminations Q1'21 eliminations)
Slide 23: Increasing Internet and TV lines
23 increasing # Lines Internet TV 2,090 2,108 2,122 2,137 2,148 19 + 59K 14 15 12 YoY Internet 1 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 +2.8% 1,641 1,652 1,663 1,677 1,690 + 48K 11 11 14 13 YoY 1 +2.9% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 • Strong traction of Flex offer. • Fiber activations increasing. 2,349 2,327
Slide 24: Postpaid customer growth
24 Postpaid customer growth # Mobile cards & net adds (in ‘000)*: 4,894 4,910 4,873 Postpaid Growth supported by continued traction of 4,824 4,833 YoY convergent multi-mobile offer Flex and Enterprise further growing its strong mobile + 181K 45 57 43 +4.4% base. 30 37 -19 -16 -22 -22 -36 Prepaid YoY
Slide 25: Direct Margin
25 Direct Margin -1.3% 906 -3 Q1 -8 -1 -1 894 (M€) -1.3% Domestic DM Q1'20 Domestic BICS TeleSign Eliminations Q1'21 Q1 YoY -0.4%, incl. remaining Covid-19 headwinds BICS DM Q1 YoY -12.3%, incl. Covid-19 headwinds and MTN -1.3% insourcing impact Q’s (M€) 906 880 899 890 894 TeleSign DM Q1 YoY -2.7%,
Slide 26: EBITDA to FCF
26 EBITDA to FCF (€ M) * • Early leave plan refers to voluntary early leave before retirement and FFP plan to the Fit for Purpose transformation plan
Slide 27: Net income
Net income 27 Q1 (€ M) 153 -18 -17 -10 14 4 122 -3 Mainly due to a positive Effective tax provision rate reversal on 22.5% Pylon taxes in 2020 YTD'20 Underlying Incidentals D&A (*) Net Tax expense Others (***) YTD'21 Ebitda finance result (**) * Excluding Lease depreciations ** Excluding Lease inter
Slide 28: Sound financial position
sound financial position 28 BICS Acquisition Adjusted Net debt end December of non- controlling Net debt end March 4.7 Yr Net Debt 2020 Free Cash Flow interests 2021 Average debt duration (YTD, M€) Excluding Lease 1.76 % liabilities Weighted average coupon 141 -217 Credit ratings: -2,356 -2,431 Stan
Slide 29: Q1 Consumer highlights
consumer 29 Q1 Consumer highlights • strong commercial performance • • Success for Flex offers • convergent customer base grew +21,000 • changing customer product mix • Consumer revenue +0.8% YoY
Slide 30: Consumer revenue +0.8%
Consumer revenue +0.8%, consumer 30 • Remaining Covid-19 headwind on 9 -8 5 2 1 670 roaming revenue. 665 -1 -2 • Ongoing favorable move to convergent offers at higher ARPC. • Supported by 1 Jan price indexation. Customer services revenues -0.1% • Attracting more multi-mobile customers, driving an in
Slide 31: Consumer Fixed
consumer 31 Fixed 1,921 1,939 1,952 1,965 1,975 Broadband +54,000 YoY Internet +2.8% customers (‘000) 18 13 13 10 An additional +12,000 customers subscribed to 0 a Fiber product, being a mix of onboarding new Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 customers and migrating copper customers 1,631 1,641 1,652 1,
Slide 32: Consumer mobile postpaid
consumer 32 mobile postpaid 2,797 2,829 2,876 2,907 2,937 Mobile Postpaid Mobile postpaid +140,000 YoY park* & net 47 +5.0% adds (‘000) 32 31 31 18 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Mobile Mobile Data Park Prepaid usage (‘000) 16% (GB/customer /month) 14.2% 576 3.8 4.4 Postpaid 2,937 84% Q1'20 Q1'21
Slide 33: ARPC remains positive
ARPC remains positive consumer 33 Consumer Services Revenues X-play (M€) -0.1% YoY Customers (‘000) ARPC X-play (€) +0.4% YoY 3,127 3,104 550 550 Convergent 1,079 1,145 +6.1% 58.5 58.8 YoY 312 320 +2.7% YoY 1,181 1,118 96.7 94.1 Fixed only 170 162 Mobile postpaid only 47.6 47.7 867 841 26.2 26.4 68
Slide 34: Convergent revenues +2.7% YoY
consumer Convergent revenues +2.7% YoY 34 1 Growing convergent net adds (‘000)… 3 Convergent ARPC (€) -2.7% 16 17 21 12 12 Changing customer product mix 2 27 30 31 2 13 10 96.7 94.1 -3 -8 -12 -12 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q1'20 Q1'21 4-play 3-play 2-play 2 Leading to an increasing convergence ra
Slide 35: Q1 Enterprise highlights
enterprise 35 Q1 Enterprise highlights • Revenue erosion limited to -1.2%, • Stable revenue from Fixed services • Mobile services revenue decline further limited • ICT revenue -1.7%, mainly on low- margin products
Slide 36: Revenue erosion limited to -1.2%
enterprise Revenue erosion limited to -1.2%, 36 Revenue -1.2% Q1 revenue (M€) & YoY variance -1.2% YoY 343 327 335 345 339 • Mobile revenue decline further moderated • Stable Fixed services Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 • ICT decline on low-margin products • ABS down with Covid-19 exposure on parkin
Slide 37: Mobile revenue decline further moderated
enterprise 37 Mobile revenue decline further moderated, Mobile postpaid growth & EOP (‘000) M2M growth & EOP (‘000) 2,343 2,515 2,076 2,181 1,072 1,081 1,086 1,096 1,100 1,900 YoY mobile postpaid base +2.7% or +29,000 sim 176 162 172 8 9 10 122 106 5 5 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q1'20 Q2'20 Q3'20
Slide 38: Fixed Voice ARPU +5.4% YoY
enterprise Fixed Voice ARPU +5.4% YoY, 38 Fixed Voice revenue -2.7% (M€) & YoY variance Fixed Voice revenue erosion 44 42 43 41 43 limited to -2.7% YoY Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Voice line loss/gain & 489 484 475 462 450 EOP Park (‘000) Ongoing line erosion -4 -9 -12 -13 -13 450k Fixed voice par
Slide 39: Fixed Data revenue +1.9% YoY
enterprise 39 Fixed Data revenue +1.9% YoY, Fixed data* revenue 1.9% (M€) & YoY variance Fixed data revenue 60 59 61 62 61 +1.9% YoY + Contract with Eleven sports Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 + Other new data connectivity contracts + Growing Fiber Park 1.4% Internet revenue drivers Internet growth
Slide 40: ICT revenue -1.7% in Q1 YoY
enterprise ICT revenue -1.7% in Q1 YoY, 40 ICT revenue (M€) & YoY Share of high value ICT services Growth in high-value services -1.7% revenue (managed, Q1'21 integration & consultative +3 p.p. services). 134 131 135 141 132 YoY Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Specialized ICT affiliates continued to p
Slide 41: Enterprise ABS revenue
enterprise enterprise 41 ABS includes revenue from Proximus’ convergent solutions, and Smart mobility revenue from Be- Mobile, among which automotive & parking revenues with Covid-19 exposure. €M -16.5% 10 9 10 10 8 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21
Slide 42: Wholesale Fixed & Mobile services, Interconnect
wholesale 42 Revenue of € 67M (€ -19M): • Largest part of the decline related to margin-neutral revenue from Interconnect (€ -12M): ongoing shift from regular SMS to OTT usage & reduced SMS usage during Covid-19 lockdowns. • Fixed & Mobile Wholesale services (€ -7M): continued Covid-19 driven travel
Slide 43: Q1 TeleSign results
TeleSign 43 Q1 TeleSign results • Strong revenue performance • Direct margin • invested in additional skilled headcount
Slide 44: TeleSign
TeleSign 44 TeleSign Revenue (M€) 31.6% & YoY variance Revenue +31.6% 58 68 71 75 77 (+43.5% on constant currency) Fueled by both Programmable Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Communication & Digital Identity. Direct Margin -2.7% (M€) Direct Margin -2.7% 19 20 19 20 18 (+6.3% on constant currency) Q1'2
Slide 45: Q1 BICS results
bics 45 Q1 BICS results • Revenue -8.7% due to Legacy services • Covid-19 and MTN insourcing effects • Strong performance in A2P messaging • Cloud and IOT up by 12.7% YoY • lower Operating Expenses • Ebitda down to EUR 22 million
Slide 46: BICS
bics 46 BICS -17.6% Legacy Revenue (M€) & YoY variance Legacy Voice revenue -17.6% in Q1 YoY 167 150 139 141 138 impacted by Covid-19, MTN insourcing and ongoing decrease in Voice volumes in declining market. Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Core Revenue (M€) 7.2% & YoY variance Revenue from Core servi
Slide 47: BICS 9.6% EBITDA/revenue
bics 47 BICS Revenue (M€) -8.7% & YoY variance Legacy Voice revenue decline 257 236 234 237 235 partly off-set by increase in Core & Growth revenue Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Direct Margin -12.3% Direct margin impacted by (M€) Covid-19 and MTN insourcing while growth was noted for 61 56 56 54 53
Slide 48: Appendix contents
appendix 48 • From reported to underlying P 49 • Spectrum P 50 • Shareholder structure P 52 • Contact information P 54
Slide 49: From reported to underlying
appendix 49 GROUP GROUP Revenue EBITDA (EUR million) Q1 '20 Q1 '21 Q1 '20 Q1 '21 Reported 1,393 1,367 495 460 Lease Depreciations 0 0 -20 -20 Lease Interest 0 0 -1 -1 Incidentals 0 0 -11 6 Underlying 1,393 1,367 464 446 Incidentals 0 0 -11 6 Early Leave Plan and Collective Agreement 1 Fit For Purpos
Slide 50: Renewal and new spectrum
appendix 50 The multi-band spectrum auction still on hold 6-months extension of existing spectrum licenses awaiting the final spectrum auction CurrentExpiry ownership dates and new spectrum: (payment in Q1 2021) Proximus OBEL Telenet 29/11/33 800 MHz 2 x 10 2 x 10 2 x 10 Proximus OBEL Telenet 15/03/
Slide 51: Temporary licenses in the 3600-3800MHz band
appendix 51 Awaiting the multiband auction, temporary licenses have been allocated in the 3600-3800MHz band Allocation process • By a decision dated 14th July 2020, the BIPT attributed 40MHz on a temporary basis to each valid candidates (Proximus, Orange Belgium, Telenet, Cegeka and Entropia) • 13 O
Slide 52: Shareholder structure
appendix 52 Situation 31/03/2021 Total number of shares Free-float Belgian Government Market Capitalization* Dividend yield* 338,025,135 42% 54% ~€ 6.0Bn ~6.5% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with dividend rights Belgia
Slide 53: Forward-looking statements
appendix 53 “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 54: Investor Relations
appendix 54 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