Key financial and commercial indicators continue to show progress
Orange Belgium now established as a national convergent operator under its new brand
MVNO revenues secured for the next 3 years
Brussels, 20 July 2016 – Today, Orange Belgium Group (Euronext Brussels: OBEL) publishes its results for the second quarter and first half of 2016. This period, and in particular the second quarter of 2016, was a pivotal moment for the company with the successful nationwide launch of the Orange internet + TV offer in Belgium and the rebranding of Mobistar into Orange Belgium. The Orange Belgium Group continued on its growth path with all key financial (mobile service revenues, restated EBITDA and net financial debt) and commercial indicators (postpaid ARPU and postpaid and cable customer base), showing progress in the first half of 2016.
On May 10, 2016, Mobistar was successfully rebranded into Orange Belgium, whose mission is to connect everyone to what is essential to them, making everyone’s life a unique experience, every day. The rebranding into Orange Belgium, combined with the launch of convergent offers, also reinforces the position of Orange Belgium in the business segment by underpinning the international strength of the Orange-portfolio.
Following the unveiling of the Orange internet + TV offering in March 2016, Orange Belgium commercially started offering its product nationwide as of mid-May and became the first operator with access to the cable network at a national scale in Belgium. At the end of June, Orange Belgium already stood at 10.5 thousand households on its Orange internet + TV offering that on average have 2 SIM-cards. Though in this first phase of the commercial launch existing customers remained the primary target, the uptake of new convergent subscriptions is already exceeding initial expectations. Orange Belgium now aims at attracting an increasing number of customers every quarter by communicating more specifically on the benefits of its convergent offers and progressively through a commercialization in all distribution channels.
Orange Belgium’s retail customer base development continued throughout the second quarter of 2016, reaching 3.8 million customers. This was partly due to the positive evolution of the postpaid customer base, which added 17.8 thousand customers, predominantly 4G smartphone users. In addition to the increasing postpaid customer base, Orange Belgium also increased its postpaid ARPU to 28.8 euros in the second quarter of 2016, from 27.9 euros a year ago, an increase of 3.4 % year-on-year. Both metrics have increased for the fifth quarter in a row.
In the first half of 2016, the Orange Belgium Group generated mobile service revenues of 504.5 million euros, a solid increase of 1.9 % compared with the same period last year (i.e. +3.2 % excl. EU roaming regulation): the rapid adoption of 4G data usage and the solid increase of both the postpaid customer base and ARPU contributed substantially to this positive development and fully offset the negative impact of the new Roaming IV Regulation.
The restated EBITDA increased by 2.0 % year-on-year to 144.9 million euros in the first half of 2016 as a result of both the positive trend of the top line and sustained focus on cost optimisation. Overall, it has to be noted that the reversal of the 2015 Walloon pylon tax recently ruled unconstitutional contributed to mitigate for the negative impact of EU roaming, commercial launch of cable, increase in operational taxes and other one-off costs related to the rebranding in the second quarter of 2016.
The organic cash flow in the first half of 2016 increased 4.8 % year-on-year, compared to the first half of 2015, with net investments over the period coming down 10.3 % compared to the same period last year. As a consequence, the net financial debt at the end of the first half of 2016 was reduced down to 369.9 million euros, compared to 499.8 million euros a year ago, a decrease of 26.0 % year-on-year. This translates into a net financial debt/EBITDA ratio of 1.1x at the end of June 2016, compared to 1.9x a year ago.
The Orange Belgium Group revised its restated EBITDA guidance for the year 2016 to between 285 and 305 million euros from between 270 and 290 million euros, both excluding cable costs. This revised guidance corresponds to the reversal of provision related to the Walloon pylon tax for the year 2015.
Orange Belgium and Telenet agreed upon the terms and conditions for the termination of the full MVNO, contract initially signed in 2012, by which Telenet committed to a minimum payment of 150.0 million euros (excluding VAT) over the 3-year period 2016-2018. The actual amount paid by Telenet could however exceed this minimum amount in case of higher network usage. Beyond 2018, an optional 6-month extension period has been granted for a minimum payment of 15.0 million euros (excluding VAT).
Jean Marc Harion, Orange Belgium’s Chief Executive Officer, commented: ‘The second quarter has been the climax of a highly eventful semester with among other things the rebranding and national launch of our convergent offers. Orange is now established as a convergent operator under its new brand. They are both powerful catalysts to deliver our 2020 ambitions. While giving us more visibility on our MVNO revenues for the next 3 years, the agreement with Telenet also reflects the superiority of our network in terms of coverage, capacity and quality of service. Finally, on a personal note, I would like to pay tribute to the team I had the privilege to lead during my term and who successfully conducted the turnaround of this company.’
Jan Steyaert, Chairman of the Board of Directors, added: ‘On behalf of the whole Board, I would like to thank Jean Marc for the many contributions to the turnaround executed over the last four years.’