PROXIMUS SA - Very solid operational results, gaining customers for all main products and driving market share growth particularly in fixed throughout Belgium.
- Underlying1 revenue increase of 5.5% compared to the first quarter of 2014
- Underlying1 Core2 revenue up 3.3%, solid revenue growth from Fixed and Mobile
- Solid performance combined with consistent cost management reflected in underlying Group EBITDA of EUR 423 million, +3.8% Year-on-Year
- 2015 full-year guidance reiterated
A solid Group operational performance driven by firm growth of the customer base of all main products:
- + 65,0003 TV subscriptions, increasing the total TV customer base to 1,657,000
- + 48,000 Fixed Internet lines, increasing the total Internet customer base to 1,788,000
- + 5,000 Fixed Voice Lines, leading to a total of 2,836,000 lines
- + 63,0004 Mobile Postpaid cards with total Postpaid customer base end March at 4,209,0005
- - 44,000 Mobile Prepaid cards, decreasing the total customer base to 1,508,000.
The Group's two main brands Proximus and Scarlet reported a strong net customer gain.
Proximus' strong customer uptake is still partially benefitting from year-end promotions and was strengthened by a positive rebranding effect. Scarlet's customer base too was boosted, successfully attracting 16,000 former Snow customers.
Market shares grew in all parts of Belgium, especially for Fixed internet and digital TV, to respectively 45.4% and 33.9%.
The convergence strategy continues to pay-off. 57% of the households are multi-play, a growth of 2.5 p.p. Year-on-Year. More than half (54.1%) of the multi-play households and small offices are now convergent, combining fix and mobile, a growth of 3.4 p.p. Year-on-Year. There is also a significant increase of the number of 4-Play households and small offices by 14.1% compared to the same period last year. This is good news, as these customers are also the most loyal to Proximus.
Belgacom Group generated in the first quarter of 2015 an underlying1 revenue of EUR 1,479 million, an increase of 5.5% compared to the first quarter of 2014.
This includes a 3.3% increase for Belgacom's underlying core revenue, mainly driven by a solid revenue growth for TV and Fixed Internet, a 2.5% revenue growth for Mobile services and a higher Mobile device revenue. This was partly offset by lower revenue from the Technology & Wholesale Business Unit on the decline in domestic wholesale volumes and wholesale roaming prices.
Revenue from BICS (International Carrier Services) is up 11.9% Year-on-Year, benefitting from positive volatility in voice trading activities and a positive currency effect, explaining for more than half the revenue increase, combined with solid growth for Mobile Data.
The solid first quarter core revenue performance combined with a strong direct margin result from BICS, as well as consistent operating cost management resulted in an Underlying Group EBITDA growth of 3.8% compared to the first quarter 2014.
Belgacom generated EUR 8 million in Free Cash Flow (FCF) in the first-quarter of 2015. While the growing EBITDA contributed positively, the first-quarter FCF was reduced by the higher amount of cash paid for Capex, including a carry-over impact from the elevated fourth quarter Capex, and by higher working capital needs, including inventory re-building after a very successful year-end campaign.
In the first quarter of 2015, the Group invested 227 million, which represents an increase of 26% compared to the same period last year.
The Group accelerated its Mobile network investments, to live up to its 'best-in-class' mobile network experience. By end March, the Proximus 4G network reached an outdoor coverage of 94.9% of the population and a 77.2% indoor coverage. Customers have the best possible mobile surf experience with an average download speed of 23.4 Mbps on a 4G compatible device, which is nearly 30% faster than competition6.
The Group continued to improve the fixed network with the further roll-out of vectoring technology on VDSL2, now covering one third of the VDSL2 network. Thanks to vectoring, customers get a better broadband experience by getting access to Intern download speeds of 70 Mbps.
- Find here the quarterly results
Dominique Leroy, CEO of Belgacom Group:
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Besides a continued growth in our Mobile customer base, the commercial performance of our Fixed products was particularly strong in the first three months of the year, driven by our main brands Proximus and Scarlet. Where Proximus continued to benefit somewhat from the year-end promotions, and a positive rebranding effect, Scarlet achieved a record customer gain by successfully attracting former Snow customers.
The sustained rise in our customer base also benefitted our financial performance, with both Fixed and Mobile service revenue showing growth versus last year. Moreover, the financial performance of the Group was favorably influenced by a strong result for BICS. This, however, was largely driven by positive though volatile impacts from currency and voice trading.
Overall I'm pleased and encouraged by our achievements so far. The company is making good progress on our 'Fit for Growth'-strategy, and is already reaping some of the awards. We can therefore with confidence reiterate our 2015 outlook."
Download the PDF version of the quarterly report Q1 2015
1 Adjusted for incidentals to get a better view of the ongoing business performance.
2 Group revenue excluding revenue from International Carrier Services (BICS)
3 Corresponds to total number of set-top boxes. First quarter 2015
included 13,000 multiple set-top boxes
4 Of which 26.000 Free data and M2M cards. Mobile park end 2014 was adjusted
by +21.000 M2M cards, resulting from an alignement in activity definitions
5 Including Voice and Data Mobile cards sold through CBU,
as well as M2M cards in EBU, Mobile cards from the Tango, MVNO and TEC&W segment are included as well.
6 Coverage and speed as measured by independent agency CommSquare
through national drive tests in Q1'15.
Speed measurements are done with devices in free mode,
meaning the device picks itself the available network technology (2G, 3G, 4G)
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