Orange Belgiums Bold positioning drives a...

Orange Belgium’s Bold positioning drives another quarter of solid commercial growth

Press release
Embargo until February 13, 2019 at 7:00 am
Regulated information

Financial information for the fourth quarter and full year 2018

Orange Belgium’s Bold positioning drives another quarter of solid commercial growth

Strong growth in mobile contract net-adds: +116.8% yoy / +61k in Q4’18
Solid convergence contract net-adds: +75.0% yoy / +25 k in Q4’18
Q4’18 Retail services revenue +9.8% yoy
Q4’18 Adjusted EBITDA +11.3% yoy
Proposed dividend: €0.50 per share

Q4’18 Belgium operational highlights

Record mobile contract net-adds. The mobile contract customer base grew 61k to 2.5m subscribers. Orange Belgium’s simplified mobile offering continued to attract customers towards mid and high-end tariffs. These plans include abundant voice/data allowances and have improved customer satisfaction and retention.
Average mobile data consumption per subscriber continued its growth trajectory. In December, usage grew 79% yoy (twice the 2017 growth rate) to 3.2 GB/month.
Convergence offering confirmed its high attractiveness without recourse to promotional activities. Love customers reached 180k (+75.0% yoy) with net-adds of 25k subscribers. Convergent mobile subscribers grew by 81.6% yoy and represent 11.5% of mobile contract customers.
Solid growth in B2C convergent ARPO and slight contraction in mobile-only ARPO. B2C convergent ARPO grew by 7.0% to €75.5 due to absence of promotional activities. Mobile-only ARPO ended 1.8% lower as decreasing out-of-bundle revenues mitigated greater access revenues.

Group financial highlights

Q4’18 revenues increased 5.1% to €342.2m thanks to retail services (+9.8%), in particular convergent services (+94.6%). Full-year revenues grew 2.7% to €1,279.8m on the solid growth in retail services (+8.4%).
Q4’18 Adjusted EBITDA grew by 11.3% to €77.4m on growing revenues as well as efficiencies, in particular an improving cost structure in convergence services. Amidst a surge in convergent customers, the cable operations’ EBITDA loss was limited to €1.5m this quarter against a €3.5m loss in Q4’17. Adjusted EBITDA for the full-year contracted by 3.3% €286.1m due to the loss of MVNO revenues and the impact of EU roaming regulation.
Net debt decreased to €264.3m at year-end. Gearing remains low with a net debt to EBITDA ratio of 0.9x.
The Board of Directors will propose at the Annual General Meeting a dividend of €0.50 per share for the 2018 fiscal year.

Orange Belgium Group’s consolidated key figures	FY 2018	FY 2017	Variation	Q4 2018	Q4 2017	Variation
Belgium operating KPI
Mobile contract customers base excl. M2M (in ‘000)				2,469	2,315	6.6%
Net adds excl. M2M qoq (in ‘000)	153	68	126.9%	61	28	116.8%
ARPO mobile only contract (€ per month)				20.8	21.2	-1.8%
Convergent customer base (in ‘000)				180	103	75.0%
Net adds qoq (in ‘000)	77	70	11.0%	25	21	18.5%
B2C convergent ARPO (€ per month)				75.5	70.5	7.0%
convergent mobile customer as % mobile contract customer base				11.5%	6.7%
Group financials (€ m)
Revenues	1,279.8	1,246.4	2.7%	342.2	325.4	5.1%
Retail service revenues	768.4	709.0	8.4%	199.3	181.4	9.8%
Adjusted EBITDA	286.1	295.8	-3.3%	77.4	69.6	11.3%
% of Revenues	22.4%	23.7%		22.6%	21.4%
Net profit	32.4	39.0	-16.8%	8.2	-1.9	529.0%
Capex	-179.4	-188.4	-4.8%	-69.0	-73.8	6.5%
Organic cash flow	80.6	65.9	22.3%	-14.1	-15.9	11.4%
Net financial debt				264.3	312.8	-15.5%

Michaël Trabbia, Chief Executive Officer, commented:

“2018 was a turning point for Orange Belgium. We reshaped the telecom market with our Bold Challenger positioning, while confirming our success on the Internet & TV market with our Love offer. We listened to our customers’ unmet demand for simple and worry-free offers. I am proud that we were the first Belgian mobile operator to launch unlimited mobile and convergent services.

Our unlimited offers and excellent network contributed to a record number of new customers choosing a mobile or Love offer in 2018. Our customers are clearly reaping the benefits: average data consumption has increased 79% in only one year! And for the first time, Orange was the most used mobile network in Belgium during the New Year celebration.

In 2019, we will continue to address consumer frustrations in Belgium. We will therefore launch a genuine unlimited Internet-only offer. We are committed to not increase prices on mobile and bundles. Finally, we guarantee indoor mobile coverage for each customer.”

Arnaud Castille, Chief Financial Officer, stated:

“Orange Belgium met all 2018 targets despite active competition, loss of MVNO revenues and the impact of EU roaming regulation. This demonstrates our ability to create value with a Bold positioning and highlights the Group’s strong underlying performance. I am especially pleased that Adjusted EBITDA returned to growth in the third and fourth quarter.

Shaping the future, we also reached two important achievements in 2018. We signed a 5-year wholesale partnership with Medialaan, the leading Flemish commercial broadcaster. Secondly, we narrowed the convergence operations’ EBITDA losses by 11% through a combination of cost optimization, churn reduction and lower wholesale price.”

2019 outlook

Orange Belgium expects slight growth in revenues in 2019. The Company targets Adjusted EBITDA between €285m and €305m. Total capex is expected to remain stable in comparison to last year.

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