mobistar h1 2015 results presentation · q1 2014 q2 2014 h1 2015q3 2014 q4 2014 h1 2015 source:...

Analysts & Investors Presentation

H1 2015 FINANCIAL

RESULTS

MOBISTAR - FINANCIAL RESULTS H1 20152

“Positive momentum on mobile confirmed in H1 laying a solid foundation for convergence”


Our main business achievements in H1 2015

> Retail customer base increase in both postpaid and prepaid

> 4G population coverage grew to 95 %

> 4G+ technical trial in 3 cities and more to come

> Mobile data growth fueled by 4G penetration and usage

> Data monetization and upsell path lead to postpaid ARPU growth

> Loyalty program running at full speed and enriched services (iCoyote)

> Completion of distribution overhaul

> Answer to draft decision of regulators on wholesale cable prices

> Improved cash flow profile and leverage

> Financial results on track to meet full year guidance


4

OUR LATEST COMMERCIAL

ACHIEVEMENTS

cinema


Our 5 strategic priorities and ambitions

Leadership in Mobile

� Best 4G network in Belgium

� N° 1 in network share

Pioneer in Disruptive Convergence

� 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


Outdoor 4G population coverage evolution (%)(800 + 1800 MHz)

Mobistar keeps investing in 4G coverage

9588

81

54

16

Q1 2014 Q2 2014 H1 2015Q3 2014 Q4 2014 H1 2015

Source:Mobistar internal simulations


strong outdoor & indoor 4G coverage

Population coverage (%)

National Brussels

95

Indoor

77

Outdoor

89

99

Outdoor Indoor

Source:Mobistar internal simulations


ahead of competition in terms of 4G coverageCoverage (%) - Driven routes (6 500 km)

Drive tests performed in June-July 2015

OUTDOOROUTDOOROUTDOOROUTDOOR DEEP & SOFT INDOORDEEP & SOFT INDOORDEEP & SOFT INDOORDEEP & SOFT INDOOR

36.6

49.2

64.2

96.2 98.2 99.2

85.4

92.4

76.3


4G+ technical testing in progress

> Others cities to be opened before end 2015

> A better experience for all customers


facilitating 4G access for our customersFrom network and tariff plans to devices and services

most attractive4G tariffplans

richest devices portfolio

largest 3G and 4G coverage

best services

DEVICESTARIFFSNETWORKSERVICES

&FINANCING


loyalty program drives customer engagement and churn reduction

Loyalty Churn

X 600,000X 600,000X 600,000X 600,000(since April 2014)


Increasing value drives customer satisfaction

>75,000 >75,000 >75,000 >75,000 activated customersactivated customersactivated customersactivated customers

> Exclusive partnership with Coyote

> Free driving assistance service for Mobistar customers as from Dolphin 20

Loyalty Churn


retail customer base is growingrecovered commercial momentum in both postpaid and prepaid

Mobistar active customers excl. M2M & MVNOQ3 2014 prepaid excl. Colruyt MVNO internalistation

Quarterly net adds in Belgium (‘k)

-32

-20

----17171717

Q3 2014

----18181818

-19

1

----19191919

Q4 2014

-23

7

10101010

Q1 2015

-15

-5

Q2 2015

19

Q1 2014

----79797979

-37

-42

Q2 2014

----53535353

Postpaid

Prepaid


4G customers base is growing fast

Active 4G users* share of total Mobistar subscriber base

growing customer appetite for 4G smartphones & services

*Mobistar active 4G users excl. M2M & MVNO

X 3X 3X 3X 3

X 2X 2X 2X 2

Total customers

Mobile data

customers

4G customers

Average data trafficper technology

700 000

4G users

8%

Q2 2014Q1 2014

0%

19%

23%

Q2 2015

11%

Q1 2015

16%

Q4 2014Q3 2014


Mobistar prepaid & postpaid customers base excl. M2M & MVNO, monthly change from January 2014 to December 2014

4G customers

700,00023%

4G = ~50 % of total data consumptionNearly 1 out of every 4 Mobistar customers is using 4G

50%

50%

Mobile data consumption per technology and per customers

3G traffic per user continue increasing

Usage x4

Since 4G launch

Mobistar4G

launch


increased data top-ups and data users4G drives customer appetite for mobile data

Significant increase of data top-ups

H1 2015H1 2014

x 4

User per tariff plan2014 & 2015 comparison

Number of users

x 2x 2x 2x 21GB1GB1GB1GB

2GB2GB2GB2GB

3GB3GB3GB3GB

4GB4GB4GB4GB

5GB5GB5GB5GB

x 3x 3x 3x 3500MB500MB500MB500MB

x 1.5x 1.5x 1.5x 1.5

x 1.5x 1.5x 1.5x 1.5

x 4x 4x 4x 4

x 4.5x 4.5x 4.5x 4.5


4G and data usage driving postpaid ARPU growthAbility to monetize mobile data confirmed

Postpaid ARPU increased YoY in Q2 2015:

+0,6%+0,6%+0,6%+0,6%

27,9

Q2 2014 Q2 2015

27,7

+ 0.6%

Postpaid ARPU, annual rolling (incl. visitor roaming)

MOBISTAR - FINANCIAL RESULTS H1 201520 MOBISTAR - FINANCIAL RESULTS H1 201520

2. Mobile-Fixed convergent opportunity


JULYJULYJULYJULY SEPTSEPTSEPTSEPTAUGAUGAUGAUG OCTOCTOCTOCTJUNEJUNEJUNEJUNEMAYMAYMAYMAY

CRC new pricing conditions proposal

Consultation period Draft decision for EC (CRC) EC Consultation

CRC pricing

final decision

EC notification

EC decision

Progresses on cable network regulation

> Since end May, 4 regulators have published their new price conditions

> Market consultation ended 15/07

> Mobistar contributed to the consultation

Estimated timing


Cable wholesale prices proposal drop 30 %but still 25 % above French benchmark

Regulators Draft Decisions (May 2015)Monthly regulated fee

New wholesale pricesNew wholesale pricesNew wholesale pricesNew wholesale pricesFormer wholesale pricesFormer wholesale pricesFormer wholesale pricesFormer wholesale prices France (Numericable)France (Numericable)France (Numericable)France (Numericable)

- 20 to - 30 %

+ 25%


Mobistar working on quality with 600 testers

> +600 friendly +600 friendly +600 friendly +600 friendly testers activatedtesters activatedtesters activatedtesters activated

> 1/3 are external 1/3 are external 1/3 are external 1/3 are external testerstesterstesterstesters

> 60/40 on 60/40 on 60/40 on 60/40 on VOO/Telenet VOO/Telenet VOO/Telenet VOO/Telenet networknetworknetworknetwork Recommendation

Satisfaction


4.8m households addressable via wholesale cable regulation

Households in Belgium*

* Federal Plan Office** Internal analysis based on published information by other operators

Belgium residential fixed market**In EUR bn

Fixed Voice

1,2

Fixed Internet

0,8TV1,0


H1 2015

financial resultsLudovic Pech, CFO


Mobistar group key financialsservice revenues and EBITDA stabilization with improved cash flow profile

in in in in €€€€mmmm H1 2015H1 2015H1 2015H1 2015 H1 2014H1 2014H1 2014H1 2014 Var. (%)Var. (%)Var. (%)Var. (%) InsightInsightInsightInsight

Service Service Service Service revenuesrevenuesrevenuesrevenues 537.1537.1537.1537.1 552.1552.1552.1552.1 ----2.7 %2.7 %2.7 %2.7 % • -0.4 % erosion before regulatory impact

Total turnoverTotal turnoverTotal turnoverTotal turnover 606.8606.8606.8606.8 629.1629.1629.1629.1 ----3.53.53.53.5 %%%% • Reflecting service revenues sequential trend

RestatedRestatedRestatedRestated EBITDAEBITDAEBITDAEBITDA 142.1142.1142.1142.1 140.4140.4140.4140.4 +1.2+1.2+1.2+1.2 %%%% • Transformation efforts allowing dynamic resourcesreallocation towards growth areas

• In line with FY guidance(in % of service revenues) 26.5% 25.4%

EBITDAEBITDAEBITDAEBITDA 140.4140.4140.4140.4 137.0137.0137.0137.0 +2.5 %+2.5 %+2.5 %+2.5 % • Lower restructuring costs (less redundancy and distribution contract termination)

• Stabilization of EBITDA(in % of service revenues) 26.1% 24.8%

CAPEXCAPEXCAPEXCAPEX 69.369.369.369.3 93.093.093.093.0 ----25.525.525.525.5 %%%% • Progressive normalization of CAPEX after peak in Q2 last year due to 4G roll-out: 95 % outdoor coverage and 77 % indoor coverage(in % of service revenues) 12.9% 16.8%

Operating Operating Operating Operating cash flowcash flowcash flowcash flow 71.171.171.171.1 44.044.044.044.0 +61.5 %+61.5 %+61.5 %+61.5 %• EBITDA stabilization combined with CAPEX normalization improving cash flow profile


Revenuesimpact

EBITDAimpact

1116

12

5

6

131

22

16

119

3

4

8

H1 2015

100

H2 2014

14

H1 2014

11

MTREU Roaming

EU Roaming

• Belgium : €10.0m

• Luxembourg : €2.1m

MTR


EU Roaming

• Belgium : €8.1m

• Luxembourg: €1.1m

MTR


regulatory impactthe last decrease under roaming III regulation has annualized in H1


Mobilerevenues

-2

H1 2014c.b.

539

regulatoryimpact

-13

H1 2014actuals

552 ----2222((((----0,4%0,4%0,4%0,4%))))

H1 2015actuals

537

Fixedrevenues

-1

consolidated service revenues yearconsolidated service revenues yearconsolidated service revenues yearconsolidated service revenues year----onononon----year evolutionyear evolutionyear evolutionyear evolutionin million euros

consolidated service revenues-0.4 % underlying total service revenues growth before regulatory impact


142

13131

140

H1 2015actuals

1

indirect costs

3

labor costs

+11+11+11+11((((8,7%8,7%8,7%8,7%))))

service revenues

direct costs*

-3

other revenues

-2

H1 2014 c.b.

regulatory impact

-10

H1 2014actuals

consolidated restated EBITDA yearconsolidated restated EBITDA yearconsolidated restated EBITDA yearconsolidated restated EBITDA year----onononon----year evolutionyear evolutionyear evolutionyear evolutionin million euros

consolidated restated EBITDAopex reduction and EBITDA stabilization in line with full year guidance

* Excluding regulatory impact, net of mobile equipment sales


262283

----7,2%7,2%7,2%7,2%

H1 2014 H1 2015

6770

----4,6%4,6%4,6%4,6%

H1 2014 H1 2015

135135

----0,3%0,3%0,3%0,3%

H1 2014 H1 2015

• Reaping the benefits of the distribution overhaul

• Steering customer investment

• Investment in customer loyalty

• Reduction of roaming costs

Direct costs Labor costs Indirect costs

Mobistar group cost structure evolutioncost reduction reallocated to growth opportunities with net opex savings

in million euros

• Continuous net decrease of headcount

• Rebalancing between front line and back office

• Dimensioning of cable operations

• Stabilization in spite of internalization distribution

• No adjustment of the Walloon pylon tax

• Support of the cable launch project team


total CAPEXin million euros

% of total service revenues

• 71% of total group CAPEX allocated to network

• 95% 4G outdoor coverage

• progressive normalization of investments below 13% of service revenues

----25,5%25,5%25,5%25,5%

H1 2015

6912.9%

H1 2014

9316.8%

consolidated capital expensesprogressive normalization of investments after 4G rollout peak


in in in in €€€€mmmm H1 2015H1 2015H1 2015H1 2015 H1 2014H1 2014H1 2014H1 2014 Var. (%)Var. (%)Var. (%)Var. (%) InsightInsightInsightInsight

EBITDAEBITDAEBITDAEBITDA 140.4140.4140.4140.4 137.0137.0137.0137.0 +2.5 %+2.5 %+2.5 %+2.5 % • Lower restructuring costs (less redundancy and distribution contract termination)

• Increase of year-on-year restated EBITDA(in % of service revenues) 26.1% 24.8%

Net incomeNet incomeNet incomeNet income 25.125.125.125.1 24.224.224.224.2 +3.8 %+3.8 %+3.8 %+3.8 % • In line with EBITDA evolution

Net profit per shareNet profit per shareNet profit per shareNet profit per share 0.420.420.420.42 0.400.400.400.40 +3.8 %+3.8 %+3.8 %+3.8 %

Net Net Net Net financial financial financial financial ddddebtebtebtebt 499.8499.8499.8499.8 547.2547.2547.2547.2 ----8.7 %8.7 %8.7 %8.7 % • €47m reduction in net debt

Net financial debt /Net financial debt /Net financial debt /Net financial debt / EBITDAEBITDAEBITDAEBITDA 1.9x1.9x1.9x1.9x 2.0x2.0x2.0x2.0x• Improved cash flow profile allows initial

deleveraging

Operating cash flowOperating cash flowOperating cash flowOperating cash flow 71.171.171.171.1 44.044.044.044.0 +61.5 %+61.5 %+61.5 %+61.5 %• EBITDA stabilization combined with CAPEX decrease improving cash flow profile

Organic cash flowOrganic cash flowOrganic cash flowOrganic cash flow 37.037.037.037.0 15.315.315.315.3 +142.2 %+142.2 %+142.2 %+142.2 % • €22m organic cash flow improvement

consolidated net income and financial debtdebt refinanced and improve cash flow generation profile


in in in in €€€€mmmm H1 2015H1 2015H1 2015H1 2015 2015 2015 2015 2015 outlookoutlookoutlookoutlook

Service revenuesService revenuesService revenuesService revenues 537.1537.1537.1537.1

year-on-year -2.7%

RestatedRestatedRestatedRestated EBITDAEBITDAEBITDAEBITDA 142.1142.1142.1142.1260260260260----280*280*280*280*

Restated EBITDA margin 26.5%

Net Net Net Net InvestmentsInvestmentsInvestmentsInvestments 69.369.369.369.3 ~190*~190*~190*~190*

Before any impact related to the cable opportunity

Mobistar group outlook2015 full year guidance reiterated


Q&A


3Q 2015 Roadshow Schedule

DATE LOCATION BROKER ROADSHOW / CONF.

2 Sept 20152 Sept 20152 Sept 20152 Sept 2015 London Barclays European Media & Telecom Forum

3 Sept 20153 Sept 20153 Sept 20153 Sept 2015 London Deutsche Bank TMT Conference

4 4 4 4 Sept 2015Sept 2015Sept 2015Sept 2015 Brussels Bank Degroof Management roadshow

9 9 9 9 Sept 2015Sept 2015Sept 2015Sept 2015 Paris Société Générale CIB Management roadshow

16/17 16/17 16/17 16/17 Sept 2015Sept 2015Sept 2015Sept 2015 New York Goldman Sachs Communacopia Conference

18 Sept 201518 Sept 201518 Sept 201518 Sept 2015 San Francisco Macquarie Management roadshow

22 Sept 201522 Sept 201522 Sept 201522 Sept 2015 Luxemburg KBC Management roadshow

24 Sept 201524 Sept 201524 Sept 201524 Sept 2015 Milan JP Morgan Management roadshow

30 30 30 30 Sept 2015Sept 2015Sept 2015Sept 2015 London KBC Securities Management roadshow


@pressmobistar@harion

www.linkedin.com/company/3673

mobistar h1 2015 results presentation · q1 2014 q2 2014 h1 2015q3 2014 q4 2014 h1 2015 source:...

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