Mobistar First quarter 2015 results. Analysts & Investors Presentation

Transcription

1 Mobistar First quarter 2015 results Analysts & Investors Presentation

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 focus on value management Jean-Marc Harion, Chief Executive Officer

5 key achievements in Q G anniversary pilot Loyalty Cinema tickets Official provider Cable regulation activation Concept store Antwerp Mobiline Mobifleet 5 FY 2014 Q1 2015

6 our main business achievements in Q G postpaid customer base growth 19% vs 4Q14 #1 in 4G: 92% outdoor coverage #1 in 4G: ~ customers #1 in NPS Telco Customer Service Postpaid ARPU grew by 3.8% yoy Restated EBITDA +5.6% yoy & +12.4% excl. reg. Full year guidance confirmed 6

7 our main transformation Q 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 Stable Postpaid customers base Pave the way for future cable market entrance Prepare convergent offers for SME market 7

8 achievements

9 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

10 undisputed largest 4G coverage 20m network investments in Q1 to support 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 10

11 Mobistar operates the largest network Belgium Brussels #1 #1 % pop outdoor: % pop indoor: 72 % % pop outdoor: % pop indoor: 86% (source : Mobistar, Mar 2015) (source : Mobistar, Mar 2015) % pop outdoor : 86.1% (source: Proximus website 27.3) % indoor: 64% (source: estimate based on Px drive tests) % pop outdoor 99.8% (source: Proximus Website ) % indoor: 74% (source: estimate based on Px drive tests) Situation on 27/03/ % pop outdoor : 83% (source: Base web 27.3) % pop indoor : 62% (source : indoor estimate ) 56% of Brussels pop covered (source: Base web ) Status 31/10/ 2014

12 Mobistar leader in 4G coverage Leadership in Mobile #1 Outdoor coverage 92% * #1 Indoor coverage 72% * 17.7Mbps Average download speed ** 14 Mbps Average upload speed ** Source 1: * Population coverage based on sites on air end of Q Source 2: ** Commsquare, January

13 Mobistar leader in 3G coverage and in Voice performance Leadership in Mobile #1= Outdoor coverage 99% * #1 Indoor coverage 92% * #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

14 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 14

15 Stable customer base evolution in Belgium 5.5 million SIM connected cards Leadership in Mobile Belgium, incl. MVNO 5,150 5,345 5,444 5,472 5, ,5% 71,1% 70,7% 71,3% 71,6% ,840 3,836 3,892 3,915 3, Q Q Q Q Q OLU MVNO Laptop cards Matma Prepaid Postpaid Mobistar Postpaid % retail cust base

16 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 ~ 600k Mobistar 4G customers 19 % Potential target: > 3m 4G users 4G custo mers Mobile data customers X 4 X % % 11 % Total customers 0 Q Q Q Q Q Mobistar Actives 4G users (excl. MVNO & Matma) 16

17 4G experience catalyzing data growth data usage x2.5 in 1 year Leadership in Mobile Data usage per active Mobistar customer in March 2015 Mobistar prepaid & postpaid customers base excl. M2M & MVNO 17

18 4G represents 40% of total data consumption 1 out of every 5 Mobistar customers uses 4G Leadership in Mobile Mobile data consumption per technology and per customers #customers 4G 40% ~600k (~20%) 60% Mobistar prepaid & postpaid customers base excl. M2M & MVNO 18

19 4G usage driving Mobistar ARPU Growth mobile data monetization thanks to personalized usage control Leadership in Mobile Blended ARPU increase YoY in Q1 2015: 2 nd quarter in a row MyMobistar and Personal Check Up help customers adapt their data plans to usage % Q Q Q Q Q Q Q Q Thanks to a high focus on value management, improved customer loyalty and data usage development. Q 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 19

20 EU28 roaming traffic doubled in one year 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 20

21 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 21

22 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 22

23 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 23

24 unrivalled services & advantages for our customers Best Customer Experience Facebook and Twitter unlimited for the Dolphin 12/15/20 3 million users: Unlimited communication with 3 million Mobistar users with a Dolphin 15 and higher bundles. My swap: option that guarantees your 4G smartphone will be bought back by up to 50% of its purchase price within 2 years. Smartphone repair: Service available in Mobistar s stores, 70 % of the units can be repaired on-site. For the rest, customers will receive a quality device as temporarily replacement.

25 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 Exclusive HAND operations in Q1 2015, amongst which 1 major concert 25

26 distribution channels transformation complete focused on service and improved customer journey Best Customer Experience Concept Stores Antwerp, Liège & Brussels 95 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 26

27 2015: End-to-end focus on transversal non-quality Best Industry Efficiency Doing together: 2015 Transversal Non Quality chasing Doing Better: Vertical Transformation Doing less & cheaper 27

28 financial review Q Ludovic Pech, Chief Financial Officer

29 key financials cost transformation mitigating top line erosion in m Q Q Var. Comments Service revenues % Consolidated turnover % Restated EBITDA (a) % (in % of service revenues) 25.8 % 23.8 % Extends the improving trend quarter after quarter Excluding the regulatory impact ( 6.1m), revenues almost stabilized (-0.6%) Excluding regulatory impact, decline would have been 2.9 %. Decrease attributable to regulation, handset sales and fixed legacy business Mobistar s restated EBITDA increased for the first time in 15 quarters. Excluding the regulatory impact the restated EBITDA would have increased by 13 %. EBITDA % (in % of service revenues) 25.5 % 23.2 % CAPEX % (in % of revenues) 9.9 % 13.5 % Operating cash flow % (EBITDA - CAPEX) Mobistar continued stepping up investments in its mobile network, in particular in the roll out of 4G, with a clear focus on the best blend of technologies to offer enhanced mobile voice and data user experience for mobile users in Belgium Reflecting EBITDA improvement and annualisation of 4G investment peak in Q (a) see below for EBITDA restatements 29

30 regulatory impact progressively fading out with EU roaming left in 2015 FY11 FY12 FY13 FY14 Q FY15e Revenues impact m impact in FY14 compared to FY10 EBITDA impact EU Roaming MTR m impact in FY14 compared to FY

31 consolidated turnover Mobile service revenues excluding regulatory impact grew in Q consolidated revenues year-on-year evolution (in %) (-2% 2%) Q Cb: Comparable basis Regulation Q excl. regulation service revenues (mobile) service revenues (non-mobile) service revenues (OLU) Handset Sales Q1 2015

32 blended mobile ARPU (Belgium) ARPU stabilization driven by tariff mix and 4G data usage quarterly ARPU (a) (in euro per month per user) +1.0% +2.0% Q Q Q Q Q Q Mobistar prepaid & postpaid customers base excl. M2M, IEW & MVNO 32

33 v-shaped recovery also confirmed in Q Mobistar is increasingly focusing on value management service revenues year-on-year evolution (in %) -0,6% Stabilizing postpaid customer base -2,8% ~0.6m 4G customer base growing Exploding data usage with +153 % growth 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Service revenue growth 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Service revenue growth excl. regulation Mobile ARPU is rebounding with 2.0 % growth in Q

34 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 %) +12,4% +5,6% Top line sequential improvement Value based management driving profitable growth Regulatory impact fading out 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Restated EBITDA Restated EBITDA excl. regulatory Restated EBITDA excl. regulatory & tax 34

35 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 35

36 capital expenses sustained investment in network to consolidate our 4G leadership position total CAPEX (in million euros) Excluding licenses % 74 % of total group CAPEX allocated to network 26.8 #1 4G network ambitious 2014/15 4G roll-out plan Q Q (a) excluding licenses 36

37 consolidated net income net income primarily boosted by EBITDA increase in m Q Q Var. insight Reported EBITDA 68.8 (25.5 %) 64.5 (23.2 %) +6.8 % Reflecting stabilising revenues and thorough cost management Net income % Reflecting increasing EBITDA and stable dep., fin. res. and taxes. Net profit per share % Net financial debt % NFD/Restated EBITDA Operational cash flow % Mobistar continued stepping up investments in its mobile network, in particular in the rollout of 4G Organic cash flow % 37

38 Outlook 2015 Jean-Marc Harion, Chief Executive Officer

39 Mobistar reiterates its 2015 forecasts in m Q outlook Service Revenues Y-o-Y Restated EBITDA Restated EBITDA margin/y-o-y) (-2.8 %) 69.9 (25.8 % / +5.6 %) * Net Result 11.8 Net Investments 26.8 >200 Operational Cash Flow* 42.1 Before any impact related to the cable opportunity Operational cash flow = EBITDA Net Investments 39

40 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 40

41 in 2015, Mobistar will be back to fixed connectivity For Consumers and small Enterprises New Pack Ultrafast Internet + Digital TV 41

42 in 2015, Mobistar will stabilize its restated EBITDA = 42

43 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 43 restated EBITDA of between 260 and 280 million euros excl. any expenses related to the cable opportunity.

44 Q&A

45 2Q 2015 Roadshow Schedule DATE LOCATION BROKER ROADSHOW / CONF. 29-Apr-2015 London Exane BNP Paribas Management Roadshow 5-May-2015 Paris Raymond James Management Roadshow 19-May-2015 New York Berenberg Management Roadshow 20-May-2015 Toronto Royal Bank of Canada Management Roadshow 21-May-2015 Montreal Royal Bank of Canada Management Roadshow 28-May-2015 Nice Société Générale Management Roadshow 3/4-Jun-2015 London Bank of America ML TMT Conference 10-Jun-2015 Amsterdam ABN AMRO Management Roadshow 16-Jun-2015 Geneva / Zurich Royal Bank of Canada Management Roadshow 18-Jun-2015 Nordics JP Morgan Management Roadshow 23/24-Jun-2015 Edinburgh / Dublin HSBC Management Roadshow 45

46 Appendix

47 Quarterly results (1/2) Q Q Q Q Q SUBSCRIBER BASE EVOLUTION Mobistar S.A. mobile customers in thousand Postpaid in thousand Prepaid in thousand M2M SIM cards in thousand MVNO customers in thousand Total Mobistar S.A. in thousand Orange Communications Luxembourg S.A. customers in thousand Total Mobistar group in thousand Mobile internet customers in thousand Fixed telephone lines in thousand Fixed broadband in thousand ADSL in thousand Cable in thousand Digital cable TV customers in thousand ARPU evolution Mobistar blended quarterly ARPU (incl. visitor roaming) in /month Postpaid ARPU (excl. visitor roaming and IEW) in /month Prepaid ARPU (excl. visitor roaming and IEW) in /month Orange Communications Luxembourg blended quarterly ARPU (incl. visitor roaming) in /month

48 Quarterly results (2/2) Q Q Q Q Q STATEMENT OF COMPREHENSIVE INCOME Mobistar mobile service revenues in million Mobistar non-mobile service revenues in million Orange Communications Luxembourg service revenues in million Total consolidated service revenues(*) in million Total consolidated handset sales in million Total consolidated turnover Consolidated restated EBITDA Consolidated EBITDA in million in million % of serv. rev. 23.8% 26.2% 27.9% 20.6% 25.8% in million % of serv. rev. 23.2% 25.6% 25.6% 17.2% 25.5% Total consolidated net result in million EPS calculated on the basis of the outstanding shares at the end of the quarter in /month Total consolidated CAPEX in million % of serv. rev. 13.5% 19.7% 16.4% 27.7% 9.9% Organic cash flow in million (*) After elimination of intercompany transactions. 48

49 EBITDA restatements from restated EBITDA to reported EBITDA in m Q Q insights Restated EBITDA (as percentage of service revenues) 69.9 (25.8 %) 66.1 (23.8 %) Labor related or redundancy costs Non-labor related or restructuring costs Reported EBITDA (as percentage of service revenues) 68.8 (25.5 %) 64.5 (23.2 %) 49

50 Investor Relations: