Proximus : financial results – First quarter 2024

The first quarter marks an excellent start to the year for our Domestic operations, while we are preparing to welcome Route Mobile as the next step in the development of our international growth plans.

We proudly present the results of the first 3 months of the year. In an evolving competitive environment, our Domestic operations continued to deliver strong commercial traction supported by our product superiority and multi-brand strategy. The combination with sound value management has led to an excellent year-on-year Domestic revenue growth of +4.5%. We are particularly pleased with our core Domestic Services, up by +4.9%. This combined with our continued cost efficiencies efforts resulted in a +4.7% Domestic EBITDA growth, confirming the return to EBITDA growth since Q4 2023. Our excellent start into the year is ahead of our initial expectations. While we remain cautious at this point of the year, this set of results gives me great confidence in achieving our objectives set for 2024.

Our network superiority in both Fixed and Mobile remains a key support of our commercial achievements. For Fixed, the further deployment of our Fiber network remains therefore a high priority. We closed the first quarter of 2024 with over 1.8 million homes and businesses across 159 cities passed with Fiber. This continuously swift deployment is also supported by our fiber joint ventures, Fiberklaar and Unifiber, supporting us in consolidating our first mover position. By end-March 2024 we brought "Fiber in the street" to 36% of Belgian Homes and Businesses. While our fiber deployment journey continues, we are also progressing in our discussions to achieve fiber cooperation, in line with previous communications of BIPT and the Belgian Competition Authority.

For Mobile, I am very pleased to see our Mobile Network has been continuously recognized for its premium quality. After Ookla and Test Achats, the BIPT published the results of its annual testing campaign. Proximus' network, once again, clearly comes on top with unparalleled download speed for both 4G and 5G.

The first months of the year have also been productive in terms of innovative product launches. First, we launched our brand-new compact TV Box made of recycled plastic. The new box is significantly smaller than its predecessors, guarantees an even better user experience, includes new features such as Wi-Fi 6 technology and consumes up to 40% less energy. We also released our new Proximus+ app, providing to users a wide range of high-end innovative services to easily organize their daily digital life.

Regarding our International activities, we are paving the way to build a global digital communications champion. With all clearances obtained, we are nearing the final stages in the Route Mobile acquisition, with the transaction expected to close in May 2024. The financing of the transaction is secured with the successful issuance of a EUR 700 million bond, carrying a coupon of 3.75% for a 10-year maturity.

In view of our integrated International ambitions, we aligned our International segment reporting with focus on the nature of delivered services. This sets the path to integrate Route Mobile within our International segment and being in the best possible position to realize the expected EBITDA synergies of at least EUR 90 million at run rate. Over the first quarter of 2024, the International segment posted a +0.6% increase in direct margin, or + 0.7% in constant currency. Direct margin of "Communications & Data" grew by +0.9%, including a mid-single digit direct margin growth for the CPaaS and DI platform. "P2P Voice & Messaging" direct margin remained stable year-on-year.

In response to the escalating threat of cyber fraud and rising SMS costs, Telesign launched Verify API, a new omnichannel API which integrates the leading user verification channels (SMS, Silent Verification, Email, OTT ...) into a unified API. This future-proofed technology marks a significant milestone in the fight against fraudulent activities, while providing businesses with a predictive and cost-effective solution.

To conclude, we started the second year of bold2025 strongly, continuing the positive EBITDA trend we initiated in the previous quarter, and step up to a strong 5% Group EBITDA growth for the first quarter. We delivered a strong Domestic commercial momentum, while we are on a clear path for our International ambition and the value creation that comes with that. As mentioned at the start, it's with great confidence we can reiterate the guidance we set for 2024, in spite of the anticipated changes in market structure.