Proximus Group financial results – First quarter 2021

Proximus Group starts the year with sustained commercial traction especially for higher-value offers and accelerates its Fiber roll-out

  • Sustained strong customer growth, especially attracting high-value customers: +37,000 Mobile postpaid cards, +12,000 Internet and +13,000 TV subscriptions.
  • Increasing Fiber Consumer customer base by +12,000, reaching 77,000 by end-March 2021.
  • Fast-tracking Fiber rollout with +73,000 homes passed, Fiber footprint nearing 9% of premises.
  • Underlying Domestic revenue -1.7% year-on-year, largely due to residual Covid-19 effects. 
  • Underlying Group EBITDA totaled EUR 446 million, -3.9% compared to the year before. 
  • Solid normalized FCF of EUR 143 million, incl. Fiber investments and equity injection in Fiberklaar. 
  • Proximus reiterates its full-year 2021 guidance.

Highlights Q1 2021

"We kept a strong pace in executing our #inspire2022 strategy: fastmoving on our Fiber rollout, keeping up a good commercial performance while managing the transformation in our Enterprise segment.

It's been over a year since the first lock-down measures were introduced in Belgium, and I'm very proud that Proximus has managed to contribute and play an important role in the Belgian society through each step of this difficult journey. While we are still continuing our targeted Covid-19 easing initiatives towards customers and society, during this quarter, we specifically focused on the set up of an effective vaccination campaign. At Proximus, we had the privilege to be on the front line, providing the vaccination centers with connectivity, IT support, as well as advanced IoT solutions to monitor the temperature of the vaccines. With the vaccination campaign steadily accelerating, we are now looking forward to a gradual return to a new normal.

Looking back on the first quarter, we continue to see strong commercial traction for our products and services. In a highly competitive setting, we delivered solid customer growth for our main telecom customer bases and have seen especially good traction for our higher value offers. Firstly, we continued to grow our TV customer base with +13,000 TV subscriptions over the first 3 months of the year. Secondly, our convergent customer base increased by +21,000 to a total of 1,145,000, with these customers characterized by a higher-than-average ARPC and lower churn. These results demonstrate the success of our Flex range (+160,000 subscriptions in the first quarter of 2021), compensating the Fixed Voice decline by other value-adding services. Finally, Fiber is becoming an increasingly relevant selling point, also attracting higher value customers. The number of consumer customers that signed up for one of our Fiber offers increased by +12,000 over the first 3 months of the year.

We are well underway with regards to our ambition to build the best gigabit network for Belgium. We added +73,000 Fiber homes passed (HP) during the first quarter of 2021, doubling the volume of last year, to reach 533,000 HP end-March 2021. With the creation of Fiberklaar, a new company jointly owned by EQT infrastructure and Proximus, we are fully on track to realize our ambition to pass 4.2 million homes and businesses with Fiber throughout Belgium by 2028.

As for our Enterprise segment, the Fixed and Mobile telecom business continues to be managed carefully. By balancing volume and pricing, we have moderated the structural headwinds from legacy services. The move to convergent Telecom-ICT services progressed on plan and we grew our managed and consultative services over the first quarter of 2021. Besides, we are pursuing our B2B transformation efforts aiming at becoming the preferred partner for Enterprises' digital transformation. Specifically, Proximus launched a dedicated 5G co-creation platform to support professional customers in exploring the full potential of this technology through specific use cases, in a secure, innovative and cost-efficient way.

Our domestic consumer and enterprise services revenues grew if we exclude Roaming-out revenue, which is still affected by Covid-19 related headwinds. Beyond domestic operations, TeleSign continued its explosive growth trajectory, with a +43.5% revenue growth rate on constant currency.

Overall, our Domestic revenue, Group EBITDA and Capex are on track to meet our expectations, and we are therefore comfortable in reiterating our 2021 full-year guidance."

Q1 key figures

Operationals, in thousands

    Net adds in the quarter Park at end of quarter
    2020 2021 2020 2021 %
Fiber Home Passed   35 73 307 533 73.3 %
Consumer customers Convergent 12 21 1,079 1,145 6.1 %
Fiber (activated) 5 12 44 77 75.1 %
Group (subscriptions/SIM cards) Internet 1 12 2,090 2,148 2.8 %
TV 1 13 1,641 1,690 2.9 %
Fixed Voice -52 -65 2,349 2,148 -8.6 %
Mobile Postpaid (excl. M2M) 30 37 4,133 4,314 4.4 %
M2M 123 173 1,910 2,527 32.3 %
Prepaid -19 -22 691 596 -13.7 %

Financials, in million EUR

    Q1 2020 Q1 2021 % Change
Revenue (underlying) Group 1,393 1,367 -1.9 %
Domestic 1,103 1,084 -1.7 %
BICS 257 235 -8.7 %
TeleSign 58 77 31.6 %
Direct Margin (underlying) Group 906 894 -1.3 %
Domestic 828 825 -0.4 %
BICS 61 53 -12.3 %
TeleSign 19 18 -2.7 %
Expenses (underlying) Group -442 -448 1.4 %
Domestic -400 -407 1.8 %
BICS -33 -31 -6.1 %
TeleSign -11 -13 17.0 %
Ebitda (underlying) Group 464 446 -3.9 %
as % of revenue 33.3 % 32.6 % -0.7 p.p.
Domestic 428 418 -2.4 %
BICS 28 22 -19.7 %
TeleSign 8 6 -28.7 %
Group Ebitda (reported)   495 460 -7.0 %
Net income   158 123 -22.1 %
Accrued capex (excl. spectrum
& football rights)
  232 225 -2.7 %
Free Cash Flow
(normalized)
  152 143 -6.2 %
Net Debt
(end of period)
  -2,038 -2,431 19.3 %

Notes

  • Group revenue, Direct margin, Operating Expenses and EBITDA include intersegment eliminations.
  • Normalized FCF excludes M&A impacts but includes Fiber equity injections.
  • Group operationals cover Consumer, Enterprise, Scarlet, Luxembourg Telco and Wholesale.

2021 Outlook

Based on the first quarter 2021 results and taking into account its best estimate for the remainder of the year, Proximus reiterates its 2021 full-year guidance.

Guidance metric FY20
Actuals
FY21
Guidance
Q1'21
Actuals
Underlying Domestic Revenue € 4,356 M Close to the 2020 level € 1,084 M
Underlying Group EBITDA € 1,836 M € 1,750-1,775 M € 446 M
Capex (excluding Spectrum & Football rights) € 1Bn Close to € 1.2Bn € 225 M
Net debt / EBITDA 1.28X < 1.6X nr

Note: Following reporting changes (see full report below), the full-year 2020 underlying Domestic revenue was adjusted. The full-year 2021 guidance remains unchanged.

Proximus reiterates its intention to return over the result of 2021 and 2022 an annual gross dividend of EUR 1.2 per share, to be considered as a floor.

Quarterly report financial files

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