Continuous dynamic in retail service revenues fuelling solid EBITDAaL growth
06 Febbraio 2020 - 7:00AM
Continuous dynamic in retail service revenues fuelling solid
EBITDAaL growth
Press releaseEmbargo until February 6, 2020 at
7:00 amRegulated information
Financial information for the fourth quarter and full year
2019
Continuous dynamic in retail service
revenues fuelling solid EBITDAaL growth
- Mobile postpaid customer base +4.5% yoy on quarterly
net-adds of 31k
- Convergence customer base +43.5% yoy on quarterly
net-adds of 25k
- Q4 Revenues1: +4.8%
yoy / Retail service revenues1:
+6.5% yoy
- Q4 EBITDAaL1 +5.5%
yoy
- Results of 2019 within the upper range of
guidance
- Proposed dividend increase by €0.10 to €0.60 per
share
Belgium Q4’19 operating highlights
- Bold challenger positioning drives operating and
financial performance. Orange Belgium has been delivering
consistent messages around improving value proposition, offering
simple and generous tariffs, with no bad surprises and no price
increase (which will continue in 2020).
- Mobile postpaid customer base
continues its steady growth up to 2.6m (+4.5% yoy) with
net-adds of 31k subscribers during the quarter despite sustained
competition.
- Record convergent net-adds since the launch of Love
(+25k). Gross adds increased thanks to Love Duo already
representing 10% of the customer base. At the end of the quarter,
convergent mobile subscribers represented 15.9% of mobile postpaid
customers (Q4’18: 11.5%).
- Mobile-only postpaid ARPO decreased slightly by 1.6%
yoy as a result of lower out-of-bundle revenues due to
regulation on intra-EU calls. Increase in access revenues
continues to mitigate remaining decrease in out-of-bundle revenues
as a result of migration towards simple abundant tariff plans.
- B2C convergent ARPO increased slightly
by 1.6% yoy, despite growing share of Love Duo with a
lower retail price.
Orange Belgium: key operating figures
|
Q4 2018 |
Q4 2019 |
change |
Mobile
postpaid customer base (in ‘000) |
2,469 |
2,579 |
4.5% |
Net adds (in
‘000) |
61 |
31 |
-49.8% |
Mobile only
postpaid ARPO (€ per month) |
20.8 |
20.4 |
-1.6% |
Convergent
customer base (in ‘000) |
180 |
258 |
43.5% |
Net adds (in
‘000) |
25 |
25 |
1.6% |
B2C convergent
ARPO (€ per month) |
75.5 |
76.7 |
1.6% |
Convergent
mobile customer as % mobile contract customer base |
11.5% |
15.9% |
445 bp |
|
|
|
|
Q4’19 consolidated financial highlights
- Revenues reached €369.5m, +4.8%
yoy1 mainly driven by higher retail
service revenues (+6.5% yoy1) and equipment sales (+32.9% yoy),
despite lower MVNO revenues (-€6.0m). Retail service revenues
increase is supported by growing convergent service revenues
(+47.7% yoy) and equipment sales growth as a result of successful
end-of-year offers driving customer loyalty.
- EBITDAaL increased by
5.5% yoy1 to
€79.6m despite -€14.0m yoy effects (MVNO revenues, EU
regulation, and brand fees). This strong performance was driven by
higher retail service revenues, continuous improvements in the
cable operations and cost efficiencies. The full-year EBITDAaL
reached the upper range of the 2019 guidance at €300.1m with a
margin improvement of 38bp. Orange Belgium started to benefit from
its transformation plan, initiated in 2019 to improve its
operational model.
- Orange Belgium continues to improve its cable
financials. The business generated a positive EBITDAaL of
€3.3m in Q4’19. The FY 2019 cable operating cash flow improved by
€28.4m yoy but remains negative at -€31.7m.
- FY 2019 eCapex remained stable at €180.2m.
- FY 2019 Operating cash flow increased by 13.2%
yoy, reducing net financial debt by €36.4m reaching
€234.3m at 0.8x reported EBITDAaL.
Orange Belgium Group: key financial figures
|
reported |
comparable1 |
|
comparable |
reported |
reported |
comparable |
|
comparable |
reported |
in €m |
Q4 2018 |
Q4 2018 |
Q4 2019 |
change |
change |
FY 2018 |
FY 2018 |
FY 2019 |
change |
change |
Revenues |
342.2 |
352.5 |
369.5 |
4.8% |
8.0% |
1,279.8 |
1,298.1 |
1,340.8 |
3.3% |
4.8% |
Retail service
revenues |
199.3 |
209.2 |
222.8 |
6.5% |
11.8% |
768.4 |
786.3 |
857.3 |
9.0% |
11.6% |
|
|
|
|
|
|
|
|
|
|
|
EBITDAaL |
|
75.5 |
79.6 |
5.5% |
|
|
285.6 |
300.1 |
5.1% |
|
margin as % of revenues |
|
21.4% |
21.5% |
14
bp |
|
|
22.0% |
22.4% |
38
bp |
|
eCapex |
|
-69.2 |
-61.1 |
-11.7% |
|
|
-179.7 |
-180.2 |
0.3% |
|
Operating cash flow2 |
|
6.3 |
18.6 |
194.2% |
|
|
106.0 |
120.0 |
13.2% |
|
|
|
|
|
|
|
|
|
|
|
|
Net financial
debt |
264.3 |
270.7 |
234.3 |
-13.5% |
-11.4% |
264.3 |
270.7 |
234.3 |
-13.5% |
-11.4% |
|
|
|
|
|
|
|
|
|
|
|
- Comparable base includes the impact from IFRS 16 implementation
and BKM consolidation
- Operating cash flow defined as EBITDAaL – eCapex
Michaël Trabbia, Chief Executive Officer,
commented:
In 2019 we further built upon our Bold
challenger positioning initiated in 2018, based on simple, generous
and worry-free tariffs. We remained true to our promises towards
our customers with no price increases, no bad surprises and no need
to pay for unneeded services.
In the second quarter, we extended our unlimited
data tariff plans for use throughout the EU and made MMS free of
charge. In the third quarter we launched our Love Duo offer.
Lastly, in the fourth quarter we boosted the data allowance of our
Cheetah offer from 8GB to 15GB for the same price, and we reached
an exclusive partnership for the launch of Google Nest in
Belgium.
This positioning contributed to solid commercial
results in 2019, despite more active competition in the second half
of the year. Our convergent customer base increased by 43% yoy and
now exceeds 250,000. Love Duo proved to meet a real customer
expectation and was a key contributor to this success, as it
already accounts for 10% of our convergent customer base, a few
months after launch.
2019 saw other major structural achievements.
The mobile access network sharing agreement with Proximus will
allow us to improve customer experience, to decrease energy
consumption and to be ready to accelerate 5G roll out, when the
spectrum is allocated. We expect the joint venture to be put in
place in the course of 2020, after the decision from the Belgian
Competition Authority.
On the B2B market, the acquisition of BKM, a
recognized UC&C Belgium player, will be a key asset to enable
us to extend our offers and better meet to enterprises demand.
With those achievements and no more major
headwinds ahead, we are confident in our ability to further drive
substantial EBITDAaL growth in 2020.
Arnaud Castille, Chief Financial Officer,
stated:
The realisations of the last quarter of 2019
have enabled us to achieve our ambitions both from a commercial and
financial perspective.
From a financial perspective, both revenues and
EBITDAaL continued to grow during this quarter. Despite headwinds,
we were able to improve our EBITDAaL both in absolute and in
relative terms in comparison to 2018 and to deliver an EBITDAaL in
the upper range of our guidance for 2019. This is a result of our
efforts to continuously improve our internal processes and increase
efficiency. In addition to that, we have improved our cost
generation in optimizing our working capital with a significant
growth of our free cash flow. A year ago, we launched “Bold
Inside”, our transformation plan, to simplify our offers and the
way we work, to digitalize our customer journey and processes and
to empower our people. This plan started to bear its fruits in 2019
and will continue in 2020.
In addition, our convergence activities have
been EBITDAaL positive for the third consecutive quarter, with a
positive result for the whole year for the first time since the
launch of Love. We will keep working internally to drive operating
efficiency as we strive to improve our cash flow for this
business.
2019 dividend
The Board of Directors will propose an increase
of the dividend to €0.60 per share for the 2019 financial year at
the Annual General Meeting.
2020 outlook
Orange Belgium expects low-single digit revenue
growth in 2020. The Company targets EBITDAaL of between €310m and
€330m. Total eCapex is expected to remain stable excluding the RAN
sharing agreement which will have a limited impact in 2020.
- ENG Financial results Q4 2019 FV
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