Proximus Capital Markets Day, strategy 2023-2025 'bold2025'

Proximus CMD: Strategic plan 2023-2025 bold2025 (press release, presentation)

6 PILLARS:

1. Best gigabit network:
• FTTH coverage 50% by 2025 (>3m HP with >1m HA = 45% of customers vs 55% on copper, 500k exclusive customers by 2025), 95% (6m HP) by 2032
• Target copper-free by 2035, savings on power & maintenance max 120m EUR/annum, avoided renewal max 130m EUR/annum (together 250 EUR/annum), max 230m EUR/annum for upgrade)
• Current copper-to-fiber migration 50% after 6 mo, market share gain 2 pp after 12 months; churn 30% lower, repair cost per customer 40% lower; fiber pricing 5-12 EUR/mo over copper, 30 EUR/mo over copper for 10 Gb/s tier, ARPC uplift 7 EUR/mo before promos (4 after)
• Currently in >90 cities adding 600k lines/annum, current Unit Cost EUR 940, to grow to 950 post inflation & savings
• New tech on fiber: quantum channel (for encryption), slicing (for gaming), digital twin (for monitoring), 25G-PON
• 5G nationwide by 2025 (to apply slicing; 3G phase-out end 2024)
2. Upgrade IT to support digital ecosystems (convergent solutions, shift to e-sales & e-servicing) and save costs (TCO reduction EUR 70m by 2025 in opex & capex)
3. #thinkpossible culture, agile methods
4. Inclusive society, protect environment (truly circular by 2030, net zero value chain by 2040), close the digital divide
5. Best customer experience by 2025: digital-first, Picks (aggregator = asset-light with select exclusives), new Proximus+ service (TBA, target 1.8m active users by 2025) bundling daily services: telecoms, fintech (neobank), mobility (in 1 app), e-health (telemedicine), energy (innovation)
6. Grow Proximus Domestic (fiber, multi-brand (Proximus (premium, family), Scarlet (value), Mobile Vikings (innovators, cord cutters)), FMC, ICT) & International (BICS, TeleSign)

TARGETS:

• Domestic:
• rev growth 2022 2%, 2023 1-3%
• EBITDA 2022 +1%, 2023 -3% on inflation, EBITDA to grow from 2024, EBITDA 2025 to equal 2022
• Group:
• EBITDA 2022 +1%, 2023 -3%, EBITDA 2025 slightly higher than 2022
• new cost (opex) savings plan EUR 220m over 3 yr (o/w 40% from workforce, 30% from IT, 30% from network/energy)
• capex peaks in 2022 and 2023 at EUR 1.3b (fiber capex 20% on balance sheet, 80% off)
• to divest non-strategic assets to raise EUR 400m (incl 143m from CHQ, rest from infra & property, excludes option to sell mobile towers and BICS, TeleSign)
• dividend 2023 EUR 1.20, reduced to rebased level from 2024 and 2025 to EUR 0.60
• to return to FCF growth from 2024
• leverage 1.6x (excl. off-balance), as defined by S&P 2.3x (to 2.6 in 2023, 2.5-3.0x during 2022-2025)
• International:
• rev growth HSD, combined rev EUR 1.8b by 2025
• direct margin CAGR 2022-2025 HSD