Strong EBITDAaL growth continues, in line with full-year ambition
24 Luglio 2020 - 7:01AM
Strong EBITDAaL growth continues, in line with full-year ambition
Press releaseEmbargo until 24 July 2020 at 7:00
amRegulated information
Financial information for the second quarter of 2020 and first
half of 2020
Strong EBITDAaL growth continues, in line
with full-year
ambition
- Mobile postpaid customer base +3.1% yoy on quarterly
net-adds of 7k
- Convergence customer base +33.6% yoy on quarterly
net-adds of 8k
- Q2 Revenues1 -7.9%
yoy / Q2 Retail service
revenues1: +2.1%
yoy
- Q2 EBITDAaL1 +9.7%
yoy
- EBITDAaL guidance unchanged
COVID -19: §
COVID-19 measures have impacted the commercial
performance. The closure of shops until mid-May lead to
lower acquisition of convergence and mobile customers.
Consequently, handset sales also dropped significantly (-€11.7m).
After reopening shops in mid-May, sales quickly regained
pre-lockdown levels. Several B2B integration service projects were
frozen, also slowing down this activity. In terms of traffic, SMS
(-€16m), customer roaming (-€4.7m) and visitor roaming (-€5.8m)
were strongly reduced. Additionally, lower cable installations and
network deployment limitation impacted eCapex. In parallel
mitigation measures have been taken in terms of labour management
(activity rate, recruitment, temps, and consultants), advertising
and promotion, general and administrative
expenses. Operational
highlights
- The convergence customer base grew by 8k during Q2 to
288k Love customers (+33.6% yoy), in
spite of the COVID-19 impact. Love Duo continues to represent one
third of gross adds. The convergent mobile subscribers continue to
increase and represent 17.8% of mobile postpaid customers, up 424
bp vs Q2’19.
- The mobile postpaid customer base grew by 7k
during Q2 to 2.6m subscribers
(+3.1% yoy) despite COVID-19 impact. Customers are
taking advantage of the multi-card offer, with a promising start of
the GO mobile portfolio.
- B2C convergent ARPO decreased slightly by 1.5% yoy to
€75.6 explained by the growing Love Duo customer base with
a lower price point, which already represents 15% of Love
customers.
- Mobile only postpaid ARPO declined by 4.6% yoy to
€19.7, due to the COVID-19 impact with lower out-of-bundle
revenues from roaming, partly offset by migrating customers to
higher tariff plans in the new GO portfolio.
Orange Belgium: key operating
figures
|
Q2 2019 |
Q2 2020 |
change |
Mobile postpaid
customer base (in ‘000) |
2,516 |
2,594 |
3.1% |
Net adds (in
‘000) |
26 |
7 |
-73.7% |
Mobile only
postpaid ARPO (€ per month) |
20.6 |
19.7 |
-4.6% |
Convergent
customer base (in ‘000) |
216 |
288 |
33.6% |
Net adds (in
‘000) |
16 |
8 |
-47.7% |
B2C convergent
ARPO (€ per month) |
76.8 |
75.6 |
-1.5% |
Convergent
mobile customer as % mobile contract customer base |
13.6% |
17.8% |
424 bp |
|
|
|
|
|
|
|
|
Financial highlights
- Revenues decreased by 7.9%
yoy1 to €302.8m. Retail
service revenues increased by €4.6m (+2.1% yoy1) supported by
higher convergence services (+33.2% yoy). Wholesale revenues
decreased (-26% yoy) due to lower incoming SMS revenues (-€16m)
which have no impact on EBITDAaL. The decline of roaming revenues
is compensated by lower roaming costs. Equipment sales declined
(-21.9% yoy), also with limited impact on EBITDAaL.
- EBITDAaL increased by 9.7%
yoy1 to €86.0m, mainly
thanks to increasing retail service revenues, improved cable
EBITDAaL margin and cost efficiencies as a result of our Bold
Inside transformation plan. Cable operations’ EBITDAaL had a
positive result of €6.4m this quarter vs €2.4m in Q2’19. The
COVID-19 mitigation actions compensated the impact of decreasing
revenues on EBITDAaL
- eCapex decreased by 30.7% yoy to €29.8m, due
to COVID-19 measures which has led to lower cable installations and
slow down of network deployment.
- In line with our communication for Q1’20, Orange
Belgium updates its 2020 financial guidance on revenues
and eCapex. Revenues guidance changes from low single digit growth
to slight decrease on a comparable basis; EBITDAaL guidance remains
unchanged at €310m-€330m; and eCapex guidance shifts from stable
without RAN sharing to slight decrease (RAN sharing included).
Orange Belgium Group: key financial figures
|
reported |
comparable1 |
|
comparable |
reported |
reported |
comparable |
|
comparable |
reported |
in €m |
Q2 2019 |
Q2 2019 |
Q2 2020 |
change |
change |
H1 2019 |
H1 2019 |
H1 2020 |
change |
change |
Revenues |
318.9 |
328.7 |
302.8 |
-7.9% |
-5.1% |
637.1 |
656.4 |
636.6 |
-3.0% |
-0.1% |
Retail service
revenues |
207.0 |
216.4 |
221.0 |
2.1% |
6.8% |
412.6 |
431.3 |
445.8 |
3.4% |
8.0% |
|
|
|
|
|
|
|
|
|
|
|
EBITDAaL |
78.9 |
78.4 |
86.0 |
9.7% |
9.0% |
136.9 |
136.1 |
148.2 |
8.8% |
8.2% |
margin as % of
revenues |
24.7% |
23.8% |
28.4% |
456 bp |
368 bp |
21.5% |
20.7% |
23.3% |
253 bp |
179 bp |
eCapex |
-42.9 |
-42.9 |
-29.8 |
-30.7% |
-30.7% |
-79.8 |
-79.8 |
-64.9 |
-18.7% |
-18.7% |
Operating cash flow2 |
36.0 |
35.4 |
56.2 |
58.7% |
56.3% |
57.1 |
56.3 |
83.3 |
47.9% |
45.9% |
|
|
|
|
|
|
|
|
|
|
|
Net financial
debt |
248.8 |
|
181.3 |
|
|
248.8 |
|
181.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Comparable base includes Upsize N.V. 2019 before
acquisition
- Operating cash flow defined as EBITDAaL – eCapex
Michaël Trabbia, Chief Executive Officer,
commented: Besides the COVID-19, we have been able to deliver a
strong EBITDAaL growth, as a result of our Bold Challenger
positioning and our continuous efforts on our Bold Inside
transformation plan.
During the quarter, our commercial performance
has been impacted by the lock-down but remained positive and
increased again when our shops reopened.
In order to better address the customer demand
for higher speed, we upgraded our Internet Boost option to an
ultra-fast download speed of 400 Mbps. Our B2B customers can also
benefit from this 400 Mbps internet connection. In addition, we
updated our Love Pro offer to allow our Soho customers to benefit
from the multi-product advantage that was already available for our
residential customers.
As we constantly look at improving our offers
while remaining true to our customer promise, we signed an
agreement with Eleven Sports that will allow all our customers to
access to the Jupiler Pro League for the five coming years at a
reasonable price, without having to pay for large content
bundles.
After 4 intense and passionate years, I will
step down as Orange Belgium CEO in a few weeks to take a new and
exciting challenge at Orange Group. I am particularly proud of the
commitment and efforts of our teams that allowed us to successfully
position Orange Belgium as the customer-centric Bold Challenger of
the Belgian market, become a credible convergent player and deliver
a solid and sustained commercial and financial growth. As from 1st
of September, Xavier Pichon will take over the lead of Orange
Belgium. I am convinced that Xavier, together with the teams, will
bring Orange Belgium to further successes.
Arnaud Castille, Chief Financial Officer,
stated: The COVID-19 has impacted us on both an operational and
financial level. The closure of our shops has reduced our customer
acquisition in mobile and fixed, as well as handset sales. In
parallel, we saw a reduction in churn during this period.
From a financial perspective, our revenues are
mainly impacted by low-margin business, specifically SMS traffic
and handset sales. Also, the decrease in roaming traffic has an
impact both on revenues as on costs. However, our retail service
increased, which is fundamental for our business. Therefore, from a
margin perspective we saw a low impact on EBITDAaL, also thanks to
the mitigation measures taken and the necessary efforts made by our
teams. The reduction of cable activation also results in a decrease
in eCapex.
As a consequence, we will adapt a little our
financial guidance for 2020, by slightly decrease revenues in
comparison to 2019 on a comparable basis and by a slight decrease
in our eCapex including RAN sharing. We maintain our EBITDAaL
guidance unchanged between €310m-€330m.
On 1 April, we started the joint venture with
Proximus on the RAN sharing and transferred the relevant people to
the newly created company MWingz, of which each has 50% ownership.
This collaboration will clearly benefit both OPEX and CAPEX as we
stated earlier.
From a cost perspective we continue our Bold
inside programme as planned. We are migrating our customers to our
simplified new GO portfolio and decreasing our legacy portfolio.
Our new e-shop improved our digital sales, which also continued
after the lockdown.
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