Mobistar 2014 Financial Results. Analysts & Investors Presentation February 4 th, 2015

Transcription

1 Mobistar 2014 Financial Results Analysts & Investors Presentation February 4 th, 2015

2 This presentation contains forward-looking statements about Mobistar, in particular for Although Mobistar believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, the impact of the price adjustments on the customer base resulting from the competitive pressure, the evolution of the customer base, the economic situation in Belgium, the effectiveness of Mobistar convergent strategy including the success and market acceptance of the voice and data abundance plans, the Mobistar TV and broadband offers, the Mobistar brand and other strategic, operating and financial initiatives, Mobistar s ability to adapt to the on-going transformation of the telecommunications industry, regulatory developments and constraints and the outcome of legal proceedings, risks and uncertainties related to business activity. 2

3 a leading telecom operator Mobistar is one of the leading telecom operators of the Belgian and Luxembourg markets Mobistar Management Jean Marc Harion Chief Executive Officer Ludovic Pech Chief Financial Officer Siddy Jobe Director Investor Relations & Corporate Finance 3

4 A successful transformation in 2014 Jean-Marc Harion, Chief Executive Officer

5 key achievements in 2014 pilot 1M active M2M SIM cards Cable regulation activation Mobiline Mobifleet Concept store Antwerp 5

6 Our transformation plan is delivering strong results and reinforces Mobistar. We are today ready to improve our performance and face the challenges that are ahead of us. We have successfully transformed Mobistar and are ready to rebound. Jean Marc Harion Chief Executive Officer 6

7 our main business achievements in 2014 retail customer base back to growth #1 network: 41% network share #1 in 4G: 88% coverage #1 in 4G: half a million customers #1 in NPS Telco Customer Service 1 st operator to use cable regulation 50 m net Opex savings overachieved (ACE2) Financials Results in line with high-end guidance 7

8 our main transformation 2014 achievements Taking control of distribution with own channels Digitalization of end-to-end customer experience IT outsourcing to gain cost efficiency Best Tariffs, price transparency, best devices Improved customers trust and loyalty Postpaid customers growth Pave the way for future cable market entrance 8

9 Focus on some major achievements

10 reminder: our 4 strategic priorities Leadership in Mobile Pioneer in Disruptive Convergence Best Customer Experience Best 4G network in Belgium N 1 in B2C Postpaid customers N 1 provider of regulated cable N 1 vendor of 3.0 mobile connectivity Best telco customer experience N 1 service channel amongst telcos Best Industry Efficiency 30 M savings in M yearly saving in cost structure in

11 undisputed largest 4G coverage 153m investments to support network extension at fast pace Leadership in Mobile Mobistar 4G network coverage evolution ( MHz, focus on in-door ) Official launch in March: 230 cities with >50% coverage 99% coverage in Brussels in May and pilot in Mechelen 11

12 Mobistar operates the largest network Belgium Brussels % pop outdoor: % pop indoor: 64 % #1 #1 % pop outdoor: % pop indoor: 81% (source : Mobistar, Jan 2015) (source : Mobistar, Jan 2015) % pop outdoor: 66% % pop indoor: 40.2% (source: Proximus website ) % pop outdoor : 99% (source: Proximus website ) % pop outdoor: 56% (source: Base website ) % pop outdoor : 56% (source: Base website ) Situation on 9/01/

13 Mobistar leader in 4G coverage Leadership in Mobile #1 Outdoor coverage 88% * #1 Indoor coverage 64% * 17.7Mbps Average download speed ** 14 Mbps Average upload speed ** Source 1: * Population coverage based on sites on air end of 2014 Source 2: ** Commsquare, January

14 Mobistar leader in 3G coverage and in Voice performance Leadership in Mobile #1= Outdoor coverage 99% * #1 Indoor coverage 91% * #1 Voice calls completed ** 3G 3G/2G 9.1 Mbps Average download speed ** 2.5 Mbps Average upload speed ** HD Voice Only operator in Belgium ** Source 1: * Population coverage based on sites on air end of 2014 Source 2: ** Commsquare, January

15 facilitating 4G access for our customers from network and plans to devices and services Leadership in Mobile network largest 3G and 4G coverage tariffs most attractive 4G tariff plans devices richest devices portfolio services & financing best services 15

16 Mobistar largest mobile network in Belgium 5.5 million SIM connected cards = 41% market share Leadership in Mobile Belgium, incl. MVNO 5,150 5,345 5,444 5, ,5% 71,1% 70,7% 71,3% ,840 3,915 3,892 3, Q Q Q Q OLU MVNO Laptop cards Matma Prepaid Postpaid Mobistar Postpaid % retail cust base

17 4G customers base is growing fast growing customer appetite for 4G services Leadership in Mobile Active 4G Mobistar users share of total subscribers base Average data traffic per technology Potential target: > 3m 4G users 4G custo mers X 4 Mobile data customers X 2 Total customers 17

18 4G experience catalyzing data growth data usage x2.5 in 1 year Leadership in Mobile Data usage per active Mobistar customer in 2014 Mobistar prepaid & postpaid customers base excl. M2M & MVNO 18

19 4G already 34% of total data consumption 4G customers weighting for 16% of the base Leadership in Mobile Mobile data consumption per technology and per customers #customers 4G 34% 500k (16%) 66% Mobistar prepaid & postpaid customers base excl. M2M & MVNO 19

20 4G usage driving Mobistar ARPU Growth mobile data monetization thanks to personalized usage control Leadership in Mobile Blended ARPU increase YoY in Q4: 1 st time in more than 3 years MyMobistar and Personal Check Up help customers adapt their data plans to usage 24.3 Euros Thanks to a high focus on value management, improved customer loyalty and data usage development. MyMobistar app help customers control their data consumption. Personal Check-Up proprietary solution help customers proactively select the best bundle to fit with their needs. Both drive customer mix from data top-up to richer data bundles 20

21 international mobile data increase boosted by 4G, attractive plans and smartphones penetration Leadership in Mobile Countries covered with Mobistar 4G roaming agreements Mobistar 4G international roaming traffic evolution in EU 28 > 95% of Mobistar customers data roaming usage With Panther 60 Mobistar allows its customers to fully benefit from the greatest mobility advantages of 4G 21

22 opening the cable market for competition toward phased launch of Mobistar cable offers in 2015 Pioneer in Disruptive Convergence Internal users test: 80% would recommend the service External users test: Charleroi first, extended to other cities Ultrafast Internet + Digital TV 1 st Mobistar customers activated in January pre-registration open Phased commercial launch in 2015: once retail minus mechanism calculation clarified by regulators 22

23 retail Minus to be applied within Regulation key condition to allow effective competition Pioneer in Disruptive Convergence Retail price IT VAT Cable wholesale price current estimation Cable wholesale price final Regulation application Fixed line Content Retail Minus (23%) Non regulated services Decoder Modem 2 nd screen Wifi Promo Retail Minus (23%) Internet + TV whole sale price 23

24 Shape: a new portfolio for B2B customers #2 abundance for all, per company seat Pioneer in Disruptive Convergence Mobile Voice for all Mobile Data for all Applications Tablets MDM Shape & Fix Telephony Best Mobile Network 24

25 fixed to Mobile Substitution innovation a number of innovative services addressing various segments Pioneer in Disruptive Convergence 25

26 Have A Nice Day #3 Mobistar new loyalty program, launched in April 2014 Best Customer Experience Offer the best customer experience on the market Surprise and delight our customers with exclusive gifts Many HAND operations in H2, amongst which 2 major concerts > engaged customers 26

27 distribution channels transformation complete focused on service and improved customer journey Best Customer Experience Concept Stores Antwerp, Liège & Brussels 68 shops refitted 90% 3 rd party partner contracts renegotiated Launched in October 2014 Mobistar Products & Services Portfolio extended to energy, security Shops in shop in 25 MediaMarkt stores Shops in shop in 35 Carrefour Hypers 27

28 end-to-end digitalization of customer journey mobile apps, revamped web site, shops digitalization Best Customer Experience 28

29 2014 Opex savings objective overachieved 2015: End-to-end focus on transversal causes for Non-Quality Doing together: Best Industry Efficiency 2015 Transversal Non Quality chasing Doing Better: Vertical Transformation Doing less & cheaper 29

30 Financial review 2014 Ludovic Pech, Chief Financial Officer

31 full year key financials cost transformation mitigating top line erosion in m Var. Service revenues 1, , % Consolidated turnover 1, , % Direct Costs % Comments 37.6m regulatory impact in FY Q14 underlying erosion limited to -1.1% c.b. 70% of consolidated revenues decrease attributable to regulation, handset sales and fix legacy business distribution overhaul brings expected savings while gaining back control over our channels Labor Costs % -17% headcount reduction incl. IT outsourcing Indirect Costs % -5.2% indirect costs evolution year-on-year before 21.4m increase in operational taxes Restated EBITDA (a) % 77% of EBITDA erosion caused by regulatory (in % of service revenues) 24.6 % 26.8 % impact and operational taxes EBITDA % restructuring costs reflecting transformation efforts on IT outsourcing, distribution and (in % of service revenues) 22.9 % 25.3 % redundancy CAPEX % acceleration of network investments (resulting in #1 network in Belgium with first 4G coverage) (in % of revenues) 19.3 % 15.9 % Operating cash flow (EBITDA - CAPEX) % reflecting EBITDA erosion and intensified effort on 4G roll-out and network investments 31 (a) see below for EBITDA restatements

32 regulatory impact progressively fading out with EU roaming left in 2015 FY11 FY12 FY13 FY14 FY15 Revenues impact m impact in FY14 compared to FY10 EBITDA impact EU Roaming MTR m impact in FY14 compared to FY10 32

33 consolidated turnover 70% of top line erosion attributable to regulatory, legacy fix and handset sales consolidated revenues year-on-year evolution (in %) 1, , (-12,2% 12,2%) , A regulatory impact 2013cb service revenues (mobile) service revenues (non-mobile) handset sales 2014A 33 Cb: Comparable basis

34 blended mobile ARPU (Belgium) ARPU stabilization driven by tariff mix and 4G data usage quarterly ARPU (a) (in euro per month per user) % Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 Mobistar prepaid & postpaid customers base excl. M2M, IEW & MVNO 34

35 v-shaped recovery confirmed quarter after quarter the repricing is now largely absorbed and value management paying-off service revenues year-on-year evolution (in %) -1,1% -4,5% Positive postpaid net adds with +6k in Q4 ~0.5m 4G customer base growing Exploding data usage with +185% growth 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Service revenue growth 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Service revenue growth excl. regulation Mobile ARPU stabilization with 1.0% growth in Q4 35

36 restated EBITDA 87% of service revenues decline now compensated by cost savings restated EBITDA year-on-year evolution (in %) (-4,5% 4,5%) A regulatory impact 2013cb service revenues direct costs labor costs indirect costs 2014cb operating taxes 2014A (a) Indirect costs excluding labor and operating taxes (pylon tax and spectrum fees) 36

37 v-shaped recovery confirmed quarter after quarter the efficiency program accelerates the return to growth of the EBITDA restated EBITDA year-on-year evolution (in %) +12,3% +5,7% -5,3% Top line sequential improvement Value based management driving profitable growth ACE2 50m cost savings target exceeded 1Q12 2Q12 3Q12 4Q12 1Q13 Restated EBITDA 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Restated EBITDA excl. regulatory & tax Regulatory impact fading out Restated EBITDA excl. regulatory 37

38 cost base transformation: net opex savings 50m net opex savings target exceeded ,4% 267-5,6% direct costs excluding regulatory impact ( 13m OPEX reduction) non labor indirect costs excluding operating taxes ( 22m OPEX increase) 38

39 cost base transformation: improved company agility headcount reduction in a serene and improving social climate 145-6,2% (-17% 17%) labor costs excluding restructuring ( 9m redundancy costs) (incl. OLU) headcount in Belgium (end of period) 39

40 cost base transformation: fueling growth engine OPEX savings reinvested in growing the top line cost base excluding interconnection charges and cost of goods sold (in euro millions) ACTUAL FIGURES ILLUSTRATIVE m net OPEX savings (b) resources reallocation 2013A adverse factors (a) gross savings growth (c) initiatives 2014A 2014A adverse factors (a) gross savings growth (c) initiatives 2015E (a) increase in operational taxes in 2014 and price indexation in 2015 (b) including over 50m net non-labor OPEX savings from ACE2 and 9m labor costs savings (c) including innovation, customer acquisition and customer loyalty program 40

41 capital expenses sustained investment in network to consolidate our 4G leadership position total capital expenses (in euro millions) ,2% % of total group CAPEX allocated to network #1 3G and 4G network coverage #1 4G network in Brussels ambitious 4G roll-out plan confirmed in 2014/15 (a) excluding licenses 41

42 consolidated net income net income impacted primarily by EBITDA decline in m Var. insight Reported EBITDA (22.9 %) (25.3 %) % Dep. & Amort % reflecting the acceleration of the 4G roll-out and new licenses Operating income % Financial results % Tax % Net income % reflecting the increase in long-term borrowing for the 120m cost of the 800MHz spectrum reflecting the decrease of taxable income and investment tax deduction regional pylon tax non-deductible net profit per share decreased from 1.46 euro to 0.72 euro Net financial debt % NFD/Restated EBITDA Organic cash flow na 42

43 Outlook 2015 Jean-Marc Harion, Chief Executive Officer

44 Mobistar positioning: the Trusted Connectivity company mpayment and cloud storage Devices range and services Open Content, Apps and APIs Best mobile network and best-in-breed fixed network 44

45 our 5 strategic priorities for : Leadership in Mobile Pioneer in Disruptive Convergence Best 4G network in Belgium N 1 in network share N 1 convergent challenger on the consumer market N 1 convergent challenger on the enterprise market Best Customer Experience Best Telco customer experience N 1 NPS in all customer touch points Best Industry Efficiency Best in class Telco in outsourcing model Self finance innovation thanks to efficiency gains Team Member s Engagement Create a digital and open working environment Best in Class in offering career opportunities

46 in 2015, Mobistar will be back to fixed connectivity For Consumers and small Enterprises New Pack Ultrafast Internet + Digital TV 46

47 in 2015, Mobistar will stabilize its restated EBITDA = 47

48 2015 full year guidance Mobistar aims at stabilizing its financials in 2015 and reiterates the same guidance as last year restated EBITDA (in euro millions) ACTUAL FIGURES ILLUSTRATIVE Dynamic resources reallocation guidance range (02/14) guidance range (10/14) 2014A 2014A regulatory impact 2014cb opening base gross savings growth initiatives guidance range (02/15) 2015 consensus 48 restated EBITDA of between 260 and 280 million euros excl. any expenses related to the cable opportunity.

49 Q&A

50 1Q 2015 Roadshow Schedule DATE LOCATION BROKER ROADSHOW / CONF. 10 February 2015 Paris ESN / CM CIC Management Roadshow 4 March 2015 Brussels ING Management Roadshow 6 March 2015 Amsterdam KBC Management Roadshow 11 March 2015 Milan Euronext / Petercam Belgian Conference / IR 18/19 March 2015 London Citigroup TMT Conference 24 March 2015 Boston Macquarie Management Roadshow 25 March 2015 New York Petercam Management Roadshow 26 March 2015 New York Bank Degroof Management Roadshow 50

51 Appendix

52 full year guidance 2014 achieved in m Q Q Q Q Old 2014 outlook New 2014 outlook Service Revenues Y-o-Y (-16.2 %) (-12.3 %) (-10.1 %) (-4.5 %) 1,115.3 (-11.0 %) Restated EBITDA Restated EBITDA margin/y-o-y) 66.1 (23.8 % / %) 74.3 (26.2 % / %) 77.3 (27.9 % / %) 57.2 (20.6 % / -5.3 %) (24.6 % / %) * * Net Result Net Investments Operational Cash Flow* Before any impact related to the cable opportunity Operational cash flow = EBITDA Net Investments 52

53 2014 EBITDA restatements from restated EBITDA to reported EBITDA in m insights Restated EBITDA (as percentage of service revenues) (24.6 %) (26.8 %) Labor related or redundancy costs labor contract terminations Non-labor related or restructuring costs distribution contract termination and IT outsourcing costs Reported EBITDA (as percentage of service revenues) (22.9 %) (25.3 %) 53

54 Investor Relations: