Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Proximus SA (BGAOF, Financial) reported strong operational trends in Q3 2024, supporting a positive financial outlook for the year.
- The company raised its guidance, expecting group EBITDA growth of up to 3% for 2024.
- Proximus SA (BGAOF) successfully expanded its fiber footprint, passing over 2 million homes, with significant customer traction.
- The sale of the data center business is expected to bring in close to EUR130 million, aligning with the company's asset divestment plan.
- Internationally, Proximus SA (BGAOF) closed a strategic partnership with Infosys, enhancing its global digital communications market relevance.
Negative Points
- The competitive market environment, particularly with the anticipated launch of Digi, poses challenges to pricing strategies.
- The domestic business unit faced a decline in IT product revenues and a slight decrease in service revenues.
- The consolidation of Fiberklaar is expected to have a limited negative impact on EBITDA for 2024.
- The transition from SMS to OTT solutions in the CPaaS industry presents challenges, although Proximus SA (BGAOF) is adapting with omnichannel solutions.
- The sale of the data center business may lead to a low double-digit EBITDA drag, although offset by CapEx savings.
Q & A Highlights
Q: Could you provide some color on the pricing environment going forward, especially with Digi launching soon? Will you follow the usual January price hike cycle?
A: Jim Casteele, Consumer Market Lead: We are confident in continuing our pricing strategy aligned with inflation levels in 2025, thanks to our investments in mobile and fiber networks, which give us good pricing power. Regarding competition, despite Telenet's launch in Wallonia, we haven't seen increased churn and remain confident in our strategy.
Q: What is the expected impact of Fiberklaar and your deal with wire on EBITDA over the coming years?
A: Mark Reid, Chief Financial Officer: We are not providing specific details on the migration speed or EBITDA impact at this time. However, we are integrating Fiberklaar into our operations, which should moderate its impact over time.
Q: Can you provide more detail on the data center business sale and its impact on costs?
A: Guillaume Boutin, Chief Executive Officer: The sale will result in a low double-digit EBITDA drag, but we will achieve CapEx savings. The transaction aligns with our strategy to focus on core assets and partnerships with larger data center operators.
Q: How do you see the competition in the Wallonia region with Telenet entering the market?
A: Jim Casteele, Consumer Market Lead: The market is competitive, but we have not seen increased churn. Our strong performance in internet and mobile, combined with our fiber network, positions us well against competitors.
Q: Regarding your capital allocation strategy, how do you plan to use the proceeds from the new hybrid issuance?
A: Guillaume Boutin, Chief Executive Officer: We intend to use the financial flexibility provided by the hybrid issuance to support our organic growth ambitions, not for external M&A activities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
