Proximus Sa · EURONEXT:PROX
Proximus Sa — Q1 2022 Earnings Presentation
45 slides from Proximus Sa's earnings presentation, Apr 29, 2022
Slide 1: Proximus group Results presentation Q1 2022
Proximus group Results presentation Q1 2022 29 April 2022 This presentation is a subset of the company’s results release. Guillaume Boutin, CEO Please consult proximus.com/investors for the overall disclosed information.
Slide 2: Cautionary statement
2 Cautionary statement 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-lo
Slide 3: Content
3 Content • Key achievements Q1 • #inspire2022 strategy • Financial & Operational performance • Appendix
Slide 4: Key achievements Q1
4 Key achievements Q1
Slide 5: Positive momentum in Q1
Group 5 Positive momentum in Q1 On track to Commercial Good start to deliver traction reach 2022 #inspire2022 continues guidance +15K +11K • Total of 909k Fiber HP end Q1 • Domestic, BICS & TeleSign all • Launch of Proximus Ada growing Q1 revenue • Agreement with Immobel on +38K +15K Postpaid Conver
Slide 6: Good start to meet our 2022 Guidance
6 Group 6 Good start to meet our 2022 Guidance Revenue Direct Margin 2.7% 2.6% 24 1,404 6 6 917 13 10 11 1,367 -10 894 0 Q1’21 Domestic BICS TeleSign Elims Q1’22 Q1’21 Domestic BICS TeleSign Elims Q1’22 Revenue Opex Ebitda € 270M 4.7% 0.4% Capex 9 469 4 10 2 1 448 448 0 446 -4 0 € 33M Adjusted Q1’21
Slide 7: Delivering on our #Inspire2022 strategy
7 Delivering on our #Inspire2022 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 8: Proximus taking up its societal role, supporting Ukrainian people
Group 8 Proximus taking up its societal role, supporting Ukrainian people and launching several new solidarity actions ▪ Support actions for Ukraine ✓ Free communications to/from Ukraine Andere foto ✓ 10 GB Prepaid cards for Ukrainian refugees ✓ Accommodation for Ukrainian families ▪ Internet for Al
Slide 9: Fiber roll out well on track to meet year-end target of 22% coverage
9 Group 9 Fiber roll out well on track to meet year-end target of 22% Fiber coverage Proximus Fiberklaar 50 Unifiber Cities Copper outphasing of 1st Fiber area in Brussels started Trenching km X 4 YoY 22% Fiber coverage target end-2022
Slide 10: > 900k Fiber HP in Q1, +95K in Q1
Group 10 > 900k Fiber HP in Q1, +95K in Q1 after seasonally high Q4 Fiber Homes & Businesses Passed 7.3k 22% (in K) weekly rollout Network filling rate* (rounded, HP) +71% +30% 1.000 909 200 813 175 800 686 150 621 22% 600 533 125 100 9,700 20% 400 19% 75 6,800 7,300 126 5,600 89 95 50 5,000 200 73
Slide 11: Strong customer demand for Fiber: 170k activated Fiber lines
Group 11 Strong customer demand for Fiber: 170k activated Fiber lines end Q1 Fiber park & net adds* Increasing Fiber share Lower churn (in K) in total acquisitions levels +77% 170 146 Q1’21 Q1’22 Copper Fiber 126 111 96 ARPC in € (Res) 65% 72 73 Fiber uplift 25 Migration rate 20 (1 year post Copper
Slide 12: Targeted value propositions & continued customer focus drives better NPS
Group 12 Targeted value propositions & continued customer focus drives better NPS Solutions for each segment through our Bringing relevant digital solutions different brands New ! New ! > 1M Active users ~1M Unique visitors MyProximus App Pickx App & Web Flex S Improved customer experience Driving b
Slide 13: Proximus launches Proximus Ada, AI and cybersecurity center of excellence
Group 13 Proximus launches Proximus Ada, 1st Belgian center of excellence combining artificial intelligence and cybersecurity 100% owned subsidiary of Proximus 50 Experts in artificial intelligence and cybersecurity, X3 over the next 3 years.
Slide 14: Proximus and Immobel reach binding agreement on headquarters redevelopment
Group 14 Proximus and Immobel reach binding agreement on redevelopment of Proximus’ headquarters • HQ’s to be sold for approx. € 143M • New office space <50k m² from +110k m² • Lease-back agreement for remaining office space To a sustainable & inspiring • Rent-free period digital campus fostering co
Slide 15: On track to unleash full potential of TeleSign
Group 15 On track to unleash full potential of TeleSign TeleSign ready for public markets: TeleSign momentum continues: 100 87 87 77 77 • Registration Statement (S-4) filed with SEC #Inspi re202 Revenue Strat egy • 18 May 2022 , Special Meeting of NAAC Direct Margin 2 20 23 24 18 18 shareholders to
Slide 16: Financial & Operational performance
16 Financial & Operational performance
Slide 17: Domestic
17 Domestic
Slide 18: Continued good growth for main customer bases
18 Domestic 18 Continued good growth for main customer bases Postpaid Internet base 2,193K; TV base 1,732K; Postpaid base 4,689K*; Fixed Voice 1,951K; + 45k YoY + 43k YoY + 388k YoY* -197k YoY +2.1% YoY +2.5% YoY +9.0% YoY* -9.2% YoY Net adds; Group (‘000) -49 -50 -45 -53 -65 58 53 48 15 15 37 38 12
Slide 19: Flex continues growth to 922k subscribers
Domestic 19 Proximus-branded flagship convergent offer Flex continues growth to 922k subscribers Flex subscriptions* (in K) +93% 922 835 741 621 478 922 835 741 621 1 May’22 New: Flex XS Upstream boost 478 Flex ≥ +€4 (Internet + Mobile) for all Flex Packs Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 price increase
Slide 20: Residential revenue Q1 growing by +1.9%
Residential 20 Residential revenue Q1 growing by +1.9% Residential revenue (€M, YoY ) 2.8% 2.1% 3.6% 1.9% Revenue growth mainly related to 1.7% 543 539 553 572 553 • Increasing residential customer services 50 68 53 revenue (strong increase in Convergent 59 50 revenue and Mobile Vikings pushing up 4
Slide 21: Residential customer services revenue +2.2% YoY, ARPC +2.1%
Residential 21 Residential customer services revenue +2.2% YoY, on organic basis nearly stable revenue, ARPC +2.1% Customers (in K) ARPC (in €) Residential customer Growing Convergent base and inclusion of Supported by Jan’22 price services revenue (in €M) Mobile Vikings increase, customers moving t
Slide 22: Q1'22 Business revenue -1.6%
Business 22 Q1’22 Business revenue -1.6%, mainly driven by low margin products revenue Business revenue (€M, YoY ) Q1 results: 2.6% • Services revenue -0.5%, Fixed Data & IT services growth 1.0% nearly off-setting Fixed Voice erosion -1.7% -2.3% -1.6% • Low-margin Products revenue € -6M: 466 465 477
Slide 23: Continued B2B transformation with good momentum in Fixed Data & IT services
Business 23 Continued B2B transformation with good momentum in Fixed Data & IT services, balancing competitive pressure and legacy erosion Business Services revenue (€M ) Business Services revenue -0.5% YoY in Q1 • Fixed Data growth - increasing Internet -0.5% ARPU & Park, while managing value in th
Slide 24: Wholesale continued positive track for Services revenue
Wholesale 24 Wholesale continued positive track for Services revenue, benefitting from open network approach Wholesale revenue (€M, YoY ) 0.4% 1.1% 3.3% -10.6% -22.0% • Fixed & Mobile Services revenue +22.4%, 71 72 75 70 with increased number of MVNO 67 customers & higher roaming revenue 40 41 37 41
Slide 25: Domestic revenue Q1 excl. terminals +2.2%
25 Domestic 25 Domestic revenue Q1 excl. terminals +2.2%, +0.7% on organic basis (underlying, €M) 1.2% 1.1% 1,084 1,097 9 6 9 1,027 1,005 1,004 -2 +2.2% excl. terminals (cfr. Guidance) +0.7% on organic basis Q1’21 Terminals Q1’21 Residential Business Wholesale Non Service Q1’22 Terminals Q1’22 (Resi
Slide 26: Managing Domestic Opex in challenging inflationary context
Domestic 26 Managing Domestic Opex in challenging inflationary context 2.4% Organic Q1 8 2 417 Domestic Opex 407 • Transformation +1.5% YoY • Mobile Vikings • HCL • Wage indexation • Cloudification (Oct’21 & feb’22) • Customer opex • Mobile Vikings • Direct Opex Cost increases Cost efficiency for la
Slide 27: International
27 International
Slide 28: TeleSign Q1 revenue +30.9%
28 TeleSign 28 TeleSign Q1 revenue +30.9%, representing another milestone in its journey to become the global leader in DI Q1 in line with growth plan Revenue (€M, YoY ) +22.7% in CC • Digital Identity revenue & DM increasing driven by 31.6% strong volume growth (new & existing customers) 22.1% 30.9
Slide 29: BICS Q1 EBITDA +18.6% YoY on low comparable base
29 BICS 29 BICS Q1 EBITDA + 18.6% YoY on low comparable base BICS revenue +4.5% YoY Revenue (€M, YoY ) • Core: +10.4%, partially supported by improving trends in world-wide travel • Growth: +49.5%, on strong cloud communication 242 263 259 245 traction amongst world leading digital companies. 235 10
Slide 30: Group
30 Group
Slide 31: Group EBITDA +0.4%, growth Domestic and BICS offset by TeleSign investments
31 Group 31 Group EBITDA +0.4%, growth Domestic and BICS partly offset by TeleSign’s growth investments Revenue Direct Margin 2.7% 2.6% (underlying, €M) 24 1,404 6 6 917 13 10 11 1,367 -10 894 0 Q1’21 Domestic BICS TeleSign Elims Q1’22 Q1’21 Domestic BICS TeleSign Elims Q1’22 Revenue Opex Ebitda 4.7
Slide 32: Increasing investments in our accelerated Fiber roll out
32 Group 32 Increasing investments in our accelerated Fiber roll out Group Capex €M, excl. spectrum & football rights +19.7% 270 225 • Strong increase in Proximus Fiber HP • Timing effect Content contract renewals 33 • Volume related capex on higher 26 % % Customer installations Q1’21 Q1’22 Other Cu
Slide 33: FCF Q1 impacted by spill-over effect of Fiber investments
Group 33 FCF Q1 impacted by spill-over effect of steep Fiber investments end-2021 (€M) 30 2 7 10 141 2 143 2 -113 29 33 29 -5 -76 YTD Q1’21 Acquisitions FCF Underlying Income Interest Early Fiber Cash AP/AR/ Other FCF Acquisitions YTD Q1’22 2021 YTD’21 Ebitda tax payments Leave Plan equity Capex Inv
Slide 34: Keeping a sound financial position
Group 34 Keeping a sound financial position Adjusted Net Debt* (YTD, €M) 7.7 Yr Weighted average debt duration (long-term only) 37 1.64 % -2,674 Weighted average coupon 29 (long-term only) -2,740 Net debt end Free Cash Flow Other** Net debt Credit ratings Dec 2021 end Mar • Standard & Poor’s A (nega
Slide 35: Containing net impact of inflation on 2022 financials
Group 35 Containing net impact of inflation on 2022 financials 2022 • Impact of inflation on EBITDA fully reflected in guidance ➢ Wage indexations ➢ Energy consumption almost fully hedged (>90%) Estimated YOY impacts on 2022 Domestic EBITDA ➢ Price increase on legacy & commercialized offers ➢ Cost e
Slide 36: On track for 2022 Guidance
Group 36 On track for 2022 Guidance Outlook Dividend 2022 Guidance metrics Q1 2022 FY 2022 Proximus remains committed to an attractive remuneration for its shareholders and intends to return Underlying Domestic revenue excl. Terminals Growing up to 1% YoY +2.2% YoY over the result of 2022 an annual
Slide 37: Q&A Join the conference call
37 Q&A 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 89873490#
Slide 38: Appendix
38 Appendix
Slide 39: Unit reporting changes in Q1
Domestic 39 Unit reporting changes in Q1 RESIDENTIAL BUSINESS • Former consumer unit excl. SE • Former enterprise unit + SE (businesses < 10 employees) • Revenue from Mobile Vikings is reported in the respective • New revenue structure: residential product groups: o Services revenue o Residential Cu
Slide 40: From reported to underlying
40 Appendix 40 From reported to underlying GROUP GROUP Revenue EBITDA (EUR million) Q1 '21 Q1 '22 Q1 '21 Q1 '22 Reported 1,367 1,405 460 465 Adjustments 0 -1 -14 -18 Underlying 1,367 1,404 446 448 Adjustments 0 -1 -14 -18 Lease Depreciations -20 -20 Lease Interest -1 Transformation 2 4 Acquisitions,
Slide 41: Ebitda conversion to FCF
Appendix 41 Ebitda conversion to FCF (€M) High capex cash out related to Fiber investments , including carry-over effect of 465 3 448 Q4’21 -20 -30 33 29 6 -5 -406 -10 -15 Reported Lease Incidentals Underlying AP/AR/ Cash Income Interest Early Leave Others FCF Acquisitions FCF Ebitda depreciations E
Slide 42: Net income
Appendix 42 Net income (€M) -1.2% 3 1 2 122 -3 -2 120 -3 YTD Q1’21 Underlying Incidentals D&A (*) Net Tax expense Others (***) YTD Q1’22 Ebitda finance result (**) * Excluding Lease depreciations ** Excluding Lease interests *** Includes Non-controlling interests and Share of loss from associates 42
Slide 43: Debt maturity schedule
Appendix 43 Debt maturity schedule Proximus actively manages its long- term debt portfolio by having hedged its interest rate exposure of the bonds maturing in 2024 and 2025 (€M) Liquidity end-March 2022 • €249M investments, cash & cash equivalents (incl. derivatives) • Capital markets funding • EMT
Slide 44: Shareholder structure
Appendix 44 Shareholder structure (*status 31/03/2022) Total number of shares Free-float Belgian Government Market Capitalization* Dividend yield* 338,025,135 42% 54% ~€ 5.4Bn ~7.1% Number of shares Number of shares Number of shares % shares % Voting rights % Dividend rights with voting rights with
Slide 45: Contact Investor Relations
Contact Investor Relations Call: +32 2 202 82 41 E-mail: +32 2 202 62 17 [email protected] Proximus Investor Relations website: www.proximus.com/en/investors