Proximus Sa · EURONEXT:PROX
Proximus Sa — Q2 2021 Earnings Presentation
63 slides from Proximus Sa's earnings presentation, Jul 30, 2021
Slide 1: Proximus Group Results presentation Q2 2021
1 Proximus Group Results presentation Q2 2021 30July 2021
Slide 2: #inspire2022
#inspire2022
Slide 3: #inspire2022
#inspire2022 3 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 ✓ Fiber acceleration on track: ✓ >1M customers on our ✓ Welcoming Mobile Vikings; ✓ Providing support & restored 10% Fib
Slide 4: Adding +89k HP in Q2 to total 621k
Adding +89k HP in Q2 to total 621k 4 >10% Proximus active in 18 Cities Fiberklaar to start Homes & Businesses Average weekly rollout construction in Passed (GPON) (rounded, HP) H2’21 (in K) >3X
Slide 5: Unifiber
Unifiber 5 ✓ EU clearance on 26 July 2021 ✓ To build 500K HP at least ✓ P2P, open passive Fiber infrastructure Well on track to pass 4.2M homes or ~70% of Belgium by 2028
Slide 6: GPON bringing up to 25Gbps
6 GPON bringing up to 25Gbps Fiber superiority starts to materialize in our customer numbers with +14,000 Fiber net adds in Q2 Take out nokia ; add prox logo
Slide 7: Mobile transformation
Mobile transformation, 7 Launch of dedicated 5G Mwingz • Only operator in Belgium to offer public 5G innovation connectivity since April 2020 First cluster of platform e.g., antennas • 5G-light available in c. 150 sites in around 70 Smart agriculture consolidated cities and municipalities, mainly in
Slide 8: Customers' digital lives
customers digital lives 8 >1M customers on Launching new our Digital platforms innovative services Moments that make us. > 1M Unique visitors > 1M Active users Pickx App & Web MyProximus App Imagined by Proximus, powered by Belfius. Mobility services Meet a doctor on your > 3M users > 2M users smart
Slide 9: Over 330,000 Mobile Vikings customers
over 330,000 Mobile Vikings 9 customers • Complementary brand position • Upsell potential to Fixed offers Converting Prepaid to Postpaid • Seamless customer migration in H1’22 @ higher ARPU (x 2), improving the customer product mix – material cost synergies expected EOP Park & Net adds (in ‘000) 335
Slide 10: Green, digital and socially inclusive
green, digital 10 and socially inclusive Sustainable ESG floods • 1st Belgian telecom operator • + 31,858 mobiles collected for • Helping impacted employees to publish its Sustainable Finance reuse/recycling ✓ Internal HR services & colleagues Framework providing support • + 19 signed Circular manif
Slide 11: Highlights Q2 2021
Highlights Q2 2021
Slide 12: Q2 2021 results
12 Q2 2021 results Commercial € 1,370M Opex up on low Capex momentum Group revenue. comparable base (excl. spectrum & football rights) remains solid Progress in all segments +6.7% +18.9% • Main customer bases • Domestic +2.4% YoY; 497 growing +2.0% YoY organic 403 430 418 ✓ Mobile Postpaid +48K ✓ In
Slide 13: Customer growth
13 customer growth Postpaid excl. M2M Net adds Group 57 19 45 43 48 (‘000) 1 14 15 1 11 11 14 13 12 30 37 12 10 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 + 2.4% YoY + 3.0% YoY + 9.0% YoY to 2,158K to 1,702K to 4,553K incl. Mobile Viki
Slide 14: Convergence
14 convergence Growing Convergent Within mix, Growing overall customer base convergent revenue ARPC + 18,000 in Q2 up 3.3% YoY 546 546 +1.2% 3,141 3,089 68 67 YoY -5.2% Mobile 875 829 YoY postpaid only 167 157 -6.7% Fixed only 1,176 1,097 YoY 58.1 58.8 +3.3% 311 322 YoY 1,091 1,163 +6.6% Convergent
Slide 15: +142,000 Flex
15 +142,000 Flex Flex subscriptions (‘000)* 619 477 317 134 Q3'20 Q4'20 Q1'21 Q2'21 Flex multi-mobile strategy drove average RGUs up *Mix of migrations & new customers
Slide 16: Fiber net adds & park
90,000 16 Fiber net adds & park* Fiber (in K) +85% Uptiering via Fiber *Customer X-play level (consumer)
Slide 17: B2B segment
B2B segment 17 Internet Mobile Fixed Voice Park (K) Park (K) Park (K) 1.0% 2.6% -9.5% 132 133 1,081 1,109 484 438 Q2'20 Q2'21 Q2'20 Q2'21 Q2'20 Q2'21 Arpu (YoY trend) Arpu (YoY trend) Arpu (YoY trend) 0.3% 1.2% -5.8% -0.4% 5.4% 8.9% -1.8% -2.8% -2.3% -1.9% -7.4% 1.5% 0.1% Copper -13.0%-9.9% -9.6% -1
Slide 18: B2B transformation well managed, better ICT Services revenue
B2B transformation well managed 18 better ICT Services revenue ICT Product vs Services revenue (€M) & YoY revenue 7.0% 1.8% 2.2% -1.7% -0.9% -0.9% -6.8% Digital adoption bringing 131 130 structural opportunities. 141 Growing revenue from high- 134 131 135 132 130 value services ✓ Cloud services ✓ Sm
Slide 19: Domestic revenue
domestic revenue 19 +2.4% 5 1,080 4 1,075 12 10 -10 4 0 0 1,054 Consumer & Enterprise services +0.5% YoY +2.0% YoY on an organic basis Q2'20 Consumer Consumer Enterprise Wholesale Fixed & Mobile Terminals Remainder Q2'21 Mobile Vikings Q2'21 Convergent Fixed & Fixed, Mobile Interconnect Wholesale (C
Slide 20: TeleSign
TeleSign 20 Every growing digital communication and …brings challenges. TeleSign brings solutions identification needs... Digital Identity Fraud management & scoring Lack of Cyberfraud, Trust End User Reach Identity Data & Safety Issues & Fragmentation Communications Authentication Secured CPaaS Tec
Slide 21: TeleSign double digit growth
TeleSign double digit growth 21 Revenue +21.4% or Investing in €M +12.8% or +32.0% in CC ✓ Go-to market +22.5% in CC ✓ R&D ✓ Product development 154 ✓ Marketing… 77 126 68 Seattle San Francisco London Belgrade Q2'20 Q2'21 YTD'20 YTD'21 Beijing Los Angeles Direct Margin €M: Singapore -7.0% or -11.1%
Slide 22: Trends improving
22 Trends improving +2.5% 257 242 236 234 237 235 8 9 9 10 9 9 Flat YoY Growth Revenue +2.5% on strong Revenue (€M) 81 performance in messaging driven 77 86 86 87 97 & YoY variance +26.4% YoY Core by high volumes combined with a 167 150 139 141 138 136 favorable destination mix. -9.6% YoY Legacy Q1'
Slide 23: Group operating costs up on low comparable base
23 Group operating costs up on low comparable base Domestic Opex +6.4% on exceptionally low Q2’20. Group OPEX Group OPEX quarterly & YoY (€M) (underlying, €M) 23 -1 4 1 430 403 Investments in • One-off 2020 effects growth • Customer interactions development • Transformation -4.5% -8.3% -2.3% 1.1% 1.
Slide 24: Group EBITDA decrease reflecting anticipated rise in costs
24 Group EBITDA decrease reflecting anticipated rise in costs Antwerpen Group EBITDA Group EBITDA quarterly & YoY (underlying, €M) (underlying, €M) 477 11 -23 1 -6 459 • Growing core • 20M One-off effects YoY customer base • Customer interactions 0.3% -1.5% -0.2% -6.1% -3.9% -3.7% • Price indexation
Slide 25: Investments
investments 25 Group Capex €m, accrued, excl. spectrum & football rights 497 418 • Fiber roll-out accelerating; +161,000 HP in H1 2021 • Customer related capex up on more customer installations • Stepping up Digitalization and IT 21 32 % transformation investments. % YTD Q2'20 YTD Q2'21 Fiber Custom
Slide 26: FCF of €262M YTD-June
26 FCF of € 262M YTD-June (€ M) 45 -71 116 Mainly -30 timing -15 2 254 -36 Mainly 262 -132 252 linked to 2 -2 Fiber acceleration 130 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 paym
Slide 27: 2021 outlook
2021 outlook 27 Guidance Actuals Outlook Achievement metrics FY 2020 FY 2021 H1 2021 (excl. Mobile Vikings) Underlying Domestic revenue € 4,356M Close to the 2020 level € 2,160M 2021 progressing well to plan and on Underlying Group € 1,836M € 1,750-1,775M € 904M EBITDA track to support our Capex € 1
Slide 28: 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 77519873#
Slide 29: A more detailed view on the results
A more detailed view on the results
Slide 30: Contents and notes
30 • Group P 31 • Consumer P 38 • Enterprise P 44 Notes • Wholesale P 51 • All figures included in this presentation are on ‘Underlying’ basis, allowing for a meaningful • TeleSign P 52 YOY comparison. • Figures are rounded. Variances are calculated • BICS P 54 from the source data before rounding,
Slide 31: Underlying Group Revenue
31 underlying Group Revenue +2.7% organic growth excl. Mobile Vikings €M 6 9 -1 1,370 11 0 -1 15 1,330 Domestic 2.4% 2.5% 12.8% Group +3.0% Group 3% Q2'20 Consumer Enterprise Wholesale Other (incl. BICS TeleSign Eliminations Q2'21 eliminations)
Slide 32: Increasing Internet and TV lines
32 increasing # Lines Internet TV 2,090 2,108 2,122 2,137 2,148 2,158 19 + 50K 14 15 12 10 YoY Internet 1 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 +2.4% 1,641 1,652 1,663 1,677 1,690 1,702 + 50K 11 11 14 13 12 YoY 1 +3.0% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 • Strong traction of Flex offer • Fiber activat
Slide 33: Postpaid customer growth
33 Postpaid customer growth # Mobile park & net adds (in ‘000)*: 5,282 4,873 4,894 4,910 4,824 4,833 Postpaid YoY +9.0% Prepaid 45 57 43 48 30 37 728K -19 -16 -22 -22 -11 Prepaid -36 14% YoY ** +11.3% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 86% Postpaid 4,553K Postpaid net adds Prepaid net adds Postpaid
Slide 34: Direct Margin
34 Direct Margin +1.1% 11 -1 -2 1 890 Q2 880 (M€) 1.1% Domestic DM Q2 YoY +1.4%, incl. a 1-month contribution from Q2'20 Domestic BICS TeleSign Eliminations Q2'21 Mobile Vikings. +1.1% on organic basis, BICS DM Q2 YoY -1.3%, substantial trend improvement -0.2% 1.1% resulting from the lapping of the
Slide 35: EBITDA to FCF
35 EBITDA to FCF (€ M) 936 -41 42 -550 10 905 -30 -24 -30 -39 -12 262 -132 130 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 intere
Slide 36: Net income
Net income 36 YTD (€ M) 297 -36 -23 -27 23 7 240 -2 Accelerated Incl. positive depreciation of provision Effective tax rate some network reversal on Pylon 24.2% components & taxes and FFP increasing asset plan in 2020 base YTD'20 Underlying Incidentals D&A (*) Net Tax expense Others (***) YTD'21 Ebi
Slide 37: Sound financial position
sound financial position 37 BICS Acquisition Adjusted Net debt end December of non- controlling Net debt end 4.2 Yr Net Debt 2020 Free Cash Flow Dividends interests Other June 2021 Average debt duration (YTD, M€) Excluding Lease Incl. Mobile Vikings 1.76 % liabilities acquisition Weighted average co
Slide 38: Q2 Consumer highlights
consumer 38 Q2 Consumer highlights • Continued strong commercial performance: +37K Mobile postpaid, 10K Internet & 12K TV subscriptions in Q2’21. • With +14,000 Fiber activations Fiber park reaches 90,000, a +85% year-on-year growth. • Success for Flex offers continuing: 619K Flex subscriptions end-
Slide 39: Q2 Consumer revenue +2.3%
Q2 Consumer revenue +2.3% consumer 39 €M +2.3% Keeping up a strong commercial performance, solidly growing core subscriber bases, with especially good traction in high-value offers, combining Fixed with multiple mobile subscriptions, and Fiber-based offers.
Slide 40: Solid TV and Internet
solid TV and Internet consumer 40 1,921 1,939 1,952 1,965 1,975 1,986 Internet customers Broadband +46,000 YoY 18 13 13 10 10 (‘000) 0 +2.4% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 1,631 1,641 1,652 1,666 1,678 1,691 TV customers +49,000 (‘000) 11 11 14 12 12 YoY 0 TV households Q1'20 Q2'20 Q3'20 Q4'20
Slide 41: Mobile postpaid
mobile postpaid consumer 41 Incl. Mobile Vikings Mobile 2,829 2,876 2,907 2,937 3,165 postpaid 2,797 park & net adds (‘000) Incl. a one- month growth (+2K cards) on the Mobile Mobile Postpaid customer base 32 47 31 31 37 Viking brand +5% YoY 18 (excl. 194K Mobile Vikings customers EOP June) Q1'20 Q2
Slide 42: ARPC +1.2%
ARPC +1.2% consumer 42 Customers (‘000) ARPC X-play (€) Consumer Services Revenues +1.2% YoY X-play (M€) +0.1% YoY 2.68 avg. RGU per Cust end Q2’21 or +2.6% YoY 3,141 3,089 546 546 -1.0% -5.2% 68 67 YoY Mobile postpaid only 875 829 YoY 58.1 58.8 157 -5.6% 167 YoY -6.7% 26.1 26.9 Fixed only 1,176 1,0
Slide 43: Convergent revenues +3.3% YoY
consumer Convergent revenues +3.3% YoY 43 1 Growing convergent customer base to 1,163,000. 3 Convergent ARPC (€) Net adds in ‘000 16 17 21 -2.9% 12 12 18 Changing customer 27 30 31 23 product mix. 13 10 -1 2 -4 -12 -13 -10 95.7 92.9 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 4 & 2-play 3-play Convergent Q2
Slide 44: Q2 Enterprise highlights
enterprise 44 Q2 Enterprise highlights • Q2 revenue +3.5% • Mobile services revenue +4.1% • Fixed services revenue +2.0% ✓ ✓ • ICT revenue -0.9%
Slide 45: B2B Q2 revenue +3.5%
enterprise 45 B2B Q2 revenue +3.5%, 3.5% -2.4% -4.5% -0.5% -1.2% 1.1% • -6.0% • Revenue • 345 670 678 • (M€) & YoY 343 327 335 339 339 variance Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 YTD'20 YTD'21 YTD YTD ‘20 €670M ’21 €678M 25 18 19 33 19 Fixed Voice 18 86 85 Fixed Data 39% Postpaid 119 122 ICT 265 26
Slide 46: Mobile revenue up by 4.1%
Mobile revenue up by 4.1%, enterprise 46 Mobile postpaid growth & EOP (‘000) M2M growth & EOP (‘000) YoY mobile postpaid base 1,072 1,081 1,086 1,096 1,100 1,109 3,022 2,076 2,181 2,343 2,515 +2.6% or +28,000 cards 1,900 507 > 3 million M2M cards activated 8 9 10 8 end-June’21. 5 5 122 176 162 172 1
Slide 47: Fixed Voice revenue nearly stable
enterprise 47 Fixed Voice revenue nearly stable, Fixed Voice revenue -0.5% (M€) & YoY variance Fixed Voice revenue erosion 44 43 43 limited to -0.5% YoY, on a low 42 41 42 comparable base Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 489 484 475 462 450 Voice line loss/gain & 438 EOP Park (‘000) Sequentially
Slide 48: Fixed Data revenue +3.9% YoY
Fixed Data revenue +3.9% YoY, enterprise 48 3.9% Fixed data revenue Fixed data* revenue (M€) & YoY variance 60 59 61 62 61 61 +3.9% YoY + Contract Eleven sports (signed Q320) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 + Growing Fiber Park 1.0% - Ongoing legacy Data outphasing - Attractive customer connecti
Slide 49: ICT revenue -0.9% in Q2 YoY
ICT revenue -0.9% in Q2 YoY, enterprise 49 Q2’21 share of high value ICT ICT revenue (M€) & YoY services Q1'21 • High-value services revenues -0.9% up YoY: good performance in all ICT services, reflecting the initial 135 141 success of the transformation into 134 131 132 130 a convergent player, wit
Slide 50: Advanced Business Services
enterprise Advanced enterprise 50 Business Services ABS includes revenue from Proximus’ convergent solutions and Smart mobility revenue from Be-Mobile, for which the Covid-19 exposure on its automotive and parking revenues annualized. €M 5.3% 10 9 10 10 8 10 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21
Slide 51: Wholesale
wholesale Wholesale 51 Proximus Carrier and Wholesale Solutions Q2 revenue of € 71M, +0.4% YoY: welcomes all operators on the Proximus open networks. • Fixed and Mobile wholesale services +0.7% YoY: With Covid-19-driven travel effects annualized, Visitor roaming revenue turned positive YoY, further
Slide 52: Q2 TeleSign results
TeleSign 52 Q2 TeleSign results • Q2 2021 revenue up +22.5% on a constant currency basis. • Both Programmable Communication and Digital Identity services show revenue growth. • Direct margin up YoY+9.7% on constant currency basis. • In view of its growth ambitions, TeleSign’s operating expenses incr
Slide 53: TeleSign
TeleSign TeleSign 53 Revenue +12.8% Revenue (M€) 12.8% 21.4% & YoY variance (+22.5% on constant currency) 75 77 77 154 Revenue starting to cycle against 58 68 71 126 stronger 2020 revenue (customer acquisition and strong volumes, Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 YTD'20 YTD'21 amplified by sanitar
Slide 54: Q2 BICS results
bics 54 Q2 BICS results • Noticeable trend improvement in Q2’21 due to annualized Covid-19 headwind. • Q2’21 revenue +2.5% driven by 26.4% growth in Core services, while Legacy services revenue continued to decline. • Sustained strong performance in messaging driven by high A2P volumes combined with
Slide 55: Trend improvement
trend improvement bics 55 -3.3% 2.5% Q2’21 revenue +2.5% driven by 493 477 26.4% growth in Core services, Revenue (M€) 257 242 236 234 237 235 while Legacy services revenue & YoY variance continued to decline. Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 YTD'20 YTD'21 -1.3% -7.0% Higher DM from Core and Grow
Slide 56: BICS revenue +2.5%
BICS revenue +2.5% bics 56 26.4% 16.5% Revenue from Core services +26.4% in Q2 YoY Core Revenue (M€) Resulted from strong Messaging revenue driven 158 184 by high A2P volumes combined with a favorable & YoY variance 81 77 86 86 87 97 destination mix, reflecting the trading nature of Q1'20 Q2'20 Q3'2
Slide 57: Appendix
appendix 57 • From reported to underlying P 58 • Spectrum P 59 • Shareholder structure P 61 • Contact information P 63
Slide 58: From reported to underlying
appendix 58 GROUP GROUP GROUP GROUP Revenue EBITDA Revenue EBITDA (EUR million) Q2 '20 Q2 '21 Q2 '20 Q2 '21 YTD '20 YTD '21 YTD '20 YTD '21 Reported 1,330 1,370 501 476 2,723 2,737 996 936 Lease Depreciations 0 0 -21 -20 0 0 -41 -40 Lease Interest 0 0 -1 0 0 0 -1 -1 Incidentals 0 0 -2 4 0 0 -13 10 U
Slide 59: Renewal and new spectrum
appendix 59 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 60: Temporary licenses in the 3600-3800MHz band
appendix 60 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 61: Shareholder structure
appendix 61 Situation 30/06/2021 Total number of shares Free-float Belgian Government Market Capitalization* Dividend yield* 338,025,135 42% 54% ~€ 5.3Bn ~7.4% 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
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