Proximus group Q1 2022 - Results presentation
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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.
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-looking statements rely on a number of assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside Proximus’ control. Therefore, the actual future results may differ materially from those expressed in or implied by the statements. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication. Except as required by applicable law, Proximus disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise. This document and the Q&A session may contain summarized, non-audited or non-GAAP financial information. The information contained herein should therefore be considered in conjunction with all the public information regarding the Proximus Group available, including, if any, other documents released by the company that may contain more detailed information. Information related to Alternative Performance Measures (APM) used in this presentation are included in the consolidated management report.
3 Content • Key achievements Q1 • #inspire2022 strategy • Financial & Operational performance • Appendix
4 Key achievements 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 Convergent
Proximus HQ residential • Managing inflation risk
• TeleSign ready for public markets
+25K
• Mobile Vikings customers • On track for FY net debt level
Fiber activated
migrated to Proximus network retail lines around 1.6X (interest rate exposure fully
hedged through 2025)
+20% BICS cloud usage YoY
X2 TeleSign sales bookings YoY 5
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 Domestic BICS TeleSign Elims Q1’22 Q1’21 Domestic BICS TeleSign Elims Q1’22 FCF
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 societyGroup 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 All - Internet connection
for thousands of economically
disadvantaged Belgians
▪ DigitAll - Launched MobiDig, a mobile
toolkit that social organizations can
xxx use to promote digital literacy
▪ CULT partnership - Started combined
city deliveries in Antwerp:
driving -25%; emissions -90%
Discover the Proximus ESG KPIs on
Proximus.com9
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-2022Group 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 65 25
0 0
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q1’20 Q1’21 Q1’22
> 1M HP
before
summertime
* Homes Activated / Total Homes Passed Ready for Termination (=connectable homes passed) 10Group 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
13 14 15
commercial launch)
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q1’21 Q1’22
11
Proximus *Residential + Business, incl. new & migrated customersGroup 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 better NPS
Contact center CES* CES*
volumes technical assistance administration assistance
+10 p.p. Convergent customers
YoY
+10 p.p.
-19% YoY
YoY
16 19 20 21 23 43 50
13 17
7
Q1’21 Q1’22 Q1’21 Q1’22 Q1’21 Q1’22 2019 2020 2021 Q1’22 2019 2020 2021 Q1’22 2021 Q1’22
*CES: Customer effort score for technical & administration assistance journey (% TOP 2 out of 5)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.Group 14
Proximus and Immobel reach binding agreement on
redevelopment of Proximus’ headquarters
• HQ’s to be sold for approx. € 143M
• New office spaceGroup 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 approve the proposed
business combination
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22
Company is prepared for further
growth:
$ 1.3Bn EV 2.2x
Implies
Pro Forma, TeleSign EV/Revenue 2023E ✓ Strategy in place
✓ New management team executing to plan
✓ Strong investments in international Go to market & DI
product development16 Financial & Operational performance
17 Domestic
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 10 13 12 14 11
5 5
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22
*incl. Mobile VikingsDomestic 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
*Number of Flex packs include both Residential & Business CustomersResidential 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
430 430 439 436 439 +2.2% the Mobile-only revenue)
YoY
• Partly offset by less Terminals
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 revenue, at low margin
Other Terminals Customer services
Proximus 20Residential 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 to
convergent offers at higher
ARPC and despite lower OOB
-2.0% traffic -0.2%
organic organic
+5.3% +2.2%
2,832 430 439
2,688
1,011 +2.1%
953
organic 251
240
-2.6%
947
1,011
Incl.
53.0 51.6 139 129
873 Mobile Incl.
724
Vikings Mobile
51 59
Q1’21 Q1’22 Q1’21 Q1’22 Q1’21 Q1’22
Vikings
Convergent Fixed only Mobile postpaid only
21Business 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:
466 465 477 459
454 • IT products –6.7%, continued headwinds in chip supply
chain
• Terminals –18.9%, on less mobile terminals deals
399 400 396 402 397
60 58 51 68 53 Some noticeable new contract wins*
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22
Services Products Lux telco & other
*with customer's consentBusiness 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 the
399 397 transition to SD-WAN services
78 72
Fixed Voice • Stable Mobile revenues - growing customer
base and favorable mobile managed &
112 114
Fixed Data
network services evolution, offset by ARPU
pressure
116 115
Mobile
• Good performance in high value IT Services,
especially in Security, Cloud & Smart Mobility
94 95 IT services
Q1’21 Q1’22 • Fixed Voice - growth in PABX services offset
by Fixed Voice park erosion, while managing
ARPUWholesale 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 42
• Interconnect revenue -9.8% impacted by
27 29 32 32 33 +22.4% regulation
YOY
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22
Interconnect
Fixed & Mobile services
Other operating income
2425
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
(Residential & excl. Customer Services Services Revenue* excl. (Residential &
Business) Terminals Services Terminals Business)
*incl. Residential Prepaid, Business IT products, Wholesale Interconnect, Lux. Telco, Others revenue & Other Operating income revenueDomestic 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 large part program will further
off-set by cost
efficiencies mitigate the inflation
impacts
Q1’21 Workforce Non Q1’22
Opex Workforce
Opex27 International
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% • Communications revenue & DM increasing driven by
12.8% 15.1%
incremental demand of several large customers
77 77 87 87 100
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Strong NRR*
Cumulative volumes
124%
nearly +20% YoY**
(vs. 123% end 2021)
+9.4% in CC
Direct Margin (€M, YoY )
Strongest sales quarter ever,
31.3%
4.6% sales bookings x2 YoY
-2.7% 15.7%
-11.1%
18 18 20 23 24 Expansion and reinforcement of Q1 EBITDA
geographical coverage
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 2M€
Incl. increased
investments in Go
* net revenue of retention To Market
** adjusted for volatility within TeleSign’s communication business in India29
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
104 97 96
Core • Legacy: -2.3% down in declining market, while
87 97
9 9 12 13 14 Growth preserving direct margin
138 136 148 148 135 Legacy
245 Cloud usage (in minutes)
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 235
43 55 +29.6% YoY +20%
Enterprise
Ebitda (€M, YoY )
192 190 Telco
15.8%
2.6% 6.8% 18.6%
-19.7% Q1’21 Q1’22 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22
22 26 28 25 27
Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 BICS Ebitda +18.6% YoY, +20% Cloud Usage &
on low comparable base ~2X Cloud numbers30 Group
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% 0.4%
9 469 4
10 2 1 448
448 0 446
-4 0
Q1’21 Domestic BICS TeleSign Elims Q1’22 Q1’21 Domestic BICS TeleSign Elims Q1’2232
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 Customer related* Fiber
* Customer capex related to customer equipment (Modems, Decoders, Wi-Fi repeaters…) & activation CAPEX for Fiber and Copper customersGroup 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 Inventory YTD’22 2022
adjusted payments /FFP injections adjusted
Plan
• The FCF graph represents a management view. The composition reflects the main components, sometimes in aggregate, and might differ from the Consolidated Cash Flow statement
• Early
• Theleave plan refers
FCF graph to voluntary
represents early leave
a management before
view. retirement and
The composition FFP plan
reflects to thecomponents,
the main Fit for Purpose transformation
sometimes plan and might differ from the Consolidated Cash Flow statement.
in aggregate,
• FCF includes
• Early leavethe lease
plan payments
refers to voluntary early leave before retirement and FFP plan to the Fit for Purpose transformation plan
• Other: aggregate
• FCF includes theoflease
smaller items
payments
• Acquisitions incl. M&A
• Other: aggregate related transaction
of smaller items. costsGroup 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 (negative outlook)
2022
• Moody’s A1 (stable outlook)
*Excluding Lease Liabilities
34
** Mainly remeasurement to fair value of cash flow hedge instrument for future LT debtGroup 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 efficiency program will further mitigate the
inflation impacts
• Capex envelope closely monitored, with Fiber
build capacity and prices secured in long term
commitments
• Long term debt fully hedged at fixed rate
2023 & beyond
Wage Energy cost Other Price increase
indexations* inflation inflationary
impacts** • Cost efficiency program provides flexibility on
managing costs
• Over 50% energy consumption hedged in 2023
• Refinancing in 2024 & 2025 hedged in Q1 2022 at
current interest rates
* Oct’21/Feb’22/Apr’22/Jun’22
** Other incl. inflation on external & non-WF costs excl. energy costs 35Group 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
gross dividend of € 1.2 per share, in
Underlying Domestic EBITDA Growing up to 1% YoY +0.3% YoY line with Proximus’ announced 3-
year dividend policy over the period
Underlying Group EBITDA Around -1% YoY +0.4% YoY 2020-2022.
Capex Close to € 1.3Bn € 270M
(excl. Spectrum & football rights)
Net debt / EBITDA Around 1.6X nr Normal dividend 0.70€/share: 2
Ex-Coupon: 27 April 2022
Record date : 28 Apr 2022
Payment date : 29 Apr 2022
36
Proximus37 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#
38 Appendix
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 Customer Services (X-Play) o Product revenue
(postpaid) o Luxembourg Telecom
o Prepaid
o Other (interconnection) • Business Mobile ARPU – No longer incl. network
services revenue (independent from the number of
mobile postpaid cards).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, mergers and disposals -1 5 1
Litigation/regulation -3Appendix 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 Ebitda Inventory Capex tax payments Plan/FFP YTD’22 2022 YTD’22
YTD’22 and interest YTD’22 payments Plan adjusted
• Early leave plan refers to voluntary early leave before retirement and FFP plan to the Fit for Purpose transformation plan 41Appendix 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
42Appendix 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
• EMTN Program €3,500M
(€2,350M drawn)
• Commercial Paper Program
€1,000M
(€210M drawn)
• Committed credit facilities: €750M
(€0M drawn)
43Appendix 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 dividend rights
Belgian state 180,887,569 53.51% 56.06% 55.94% 180,887,569 180,887,569
Proximus own shares 15,334,000 4.54% 0.00% 0.21% 0 693,702
Free-float 141,803,566 41.95% 43.94% 43.85% 141,803,566 141,803,566
Total 338,025,135 100.00% 100.00% 100.00% 322,691,135 323,384,837
The voting rights of all treasury shares are suspended by law. Proximus has 14,640,298 treasury shares that are not entitled to dividend rights and
693,702 treasury shares that are entitled to dividend rights.
Transparency declarations: According to Proximus’ bylaws, the thresholds as from which a shareholding needs to be
disclosed have been set at 3% and 7.5%, in addition to the legal thresholds of 5% and each multiple of 5%.
Proximus 44Contact Investor Relations
Call:
+32 2 202 82 41 E-mail:
+32 2 202 62 17 investor.relations@proximus.com
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