Q1 2012 roadshow presentation final - · PDF file2 This presentation contains forward-looking statements about Mobistar, in particular for 2012. Although Mobistar believes these statements

Roadshow presentationQ1 2012

2

This presentation contains forward-looking statements about Mobistar, inparticular for 2012. Although Mobistar believes these statements are based onreasonable assumptions, these forward-looking statements are subject tonumerous risks and uncertainties, including matters not yet known to us or notcurrently considered material by us, and there can be no assurance thatanticipated events will occur or that the objectives set out will actually beachieved. Important factors that could cause actual results to differ materiallyfrom the results anticipated in the forward-looking statements include, amongothers, the effectiveness of Mobistar convergent strategy including the successand market acceptance of the voice and date abundance plans, the Mobistar TVoffers, the Mobistar brand and other strategic, operating and financial initiatives,Mobistar’s ability to adapt to the on-going transformation of thetelecommunications industry, regulatory developments and constraints and theoutcome of legal proceedings, risks and uncertainties related to business activity.

Cautionary Statement

Version 1 - November 2009

Key Operational Highlights

4

Excl. regulatory effects, Mobistar (excl. MES) continued to grow above market fuelled by Orange Luxembourg and handsets sales

•Mobistar group turnover evolution (in Mio EUR)

1.665

+6%+6%+6%+6%

1.658

+3%+3%+3%+3%

2011Organic growth

+49

Regulatory impact

-74

-14

-60

2010Organic growth

+93

Regulatory impact

-58

-26

-32

2009

1.567

Regulation Roaming

Regulation MTR

handsets

Mobistar growth

Orange Lux. growth

Mobistar + Orange Lux.

M.E.S. (9M 2010, 12M 2011)

Q1 2012Organic growth

+11

Regulatory impact

-12

-3

-8

Q1 2011

401 399

+3%+3%+3%+3%

5

Mobistar confirms its position as a full telecom player

Mobile

+ 29.000 Res Postpaidcustomers

Close to 100.000 Mobile broadband

cards

Voice Data TV

Fix

Voice Data M2M/Internet

•Residential Market

•Business Market

2/3 of our ADSL clients are fix voice customer as well

More than 82.000ADSL customers

35.000Mobistar Digital TV

customers

Mobile

+ 37.000Bss Postpaidcustomers

Close to 54.000 mobile broadband

cards

M2M market leader with 70%

share (433k cards)

Fix

More than 32.000 One Office Voice Packs companies

More than 8.000 One Office Full Pack companies

•Q1 2011- Q1 2012 evolution/ Q1 2012 customer base

6

*Capex/ serv rev. excluding the license costs linked to the 2G license renewal and additional 3G or 4G spectrum license fee, incl. customer equipment

** Organic cash flow defined as net cash flow from operations less acquisitions of tangible and intangible assets, excluding spectrum license fee and acquisition of subsidiary

During 2011, Mobistar performed in line on all guided KPI’s and will pay-out a dividend totaling 222 Mio EUR or 3,7 EUR/share

Total Turnover

Ebitda

Capex/service revenues*

Net profit

Organic cash flow**

2011

guidance

2011

results

In line

with 2010

Small contraction by -0,4% �

between

520 - 535 M EUR

(from 505-535 M EUR)

530,1 M EUR �Between

11%-12% of service revenues

Slightly above with 12,2%* ≈

between 220 – 230 M EUR

(from 210 – 230 M EUR)

221 M EUR �between

220 - 230 M EUR (from 210 – 230 M EUR)

259 M EUR** �

7

Mobile Activity – Negative Net Adds Q1 2012, due to underperforming prepaid segment and correction in MVNO base

(*) incl. MVNO customers, excl. MATMA, Internet Everywhere and OLU customers, impact correction MVNO customer base =-35 K sim cards

(**) Source: Mobistar estimates based on company announcements and population forecasts of Plan Bureau

Mobistar net adds split (k users)

* incl . IEW, excl. MaTMa and Orange Luxembourg customers

5652

-15-19

118

183

120

73

27

115%114%113%112%112%112%111%108%109%

Q2 11

ActivePenetration %

Net Adds (k users)

Q1 12

58

Q4 11

105

53

Q3 11

162

42

78

22

Q1 11

17

36

Q4 10

150

32

Q3 10

271

88

Q2 10

-74

-128

27

Q1 10

49

57-8

Active Penetration**

Mobistar Net adds*

Competition Net adds**

Market net adds (k users)

-25

-47

39 2220

28

38

-18-16 -10

19

-16

Q3 11

44

Q2 11

22

Q1 11

36

-5

Q4 10

32

Q4 11

53

Q1 12

Prepaid Net adds

MVNO Net adds

Postpaid Net adds

8

Mobile activity- Postpaid share as % of customer base further increases (active ending base) to 67%

0

600000

1200000

1800000

2400000

3000000

3600000

2007 2008 2009 2010 2011 Q1 2012

Mo

bis

tar

Cu

sto

mer

s

Postpaid Postpaid RES Postpaid BUS Prepaid MVNO

54%54%54%54%

3,489,8593,738,603

61%61%61%61%57%57%57%57%

3,746,515 3,950,521

64%64%64%64%

* (incl. MVNO excl. OLU and incl. Full MVNO)

66%66%66%66%

4,105,423

67%67%67%67%

4,089,532

Mobile activity - Blended ARPU -12 month rolling for Q1 2012 -excl. MVNO (visitor roaming incl.)

9

* Mb = data usage (per unique mobile multimedia user) * number of unique mobile multimedia users / active ending base total market (MVNO excl) mobile offers


Mobistar Key Priorities

11

• 58% Europeans need to be connected anytime

• 84% French people use personal devices at work

• 27% French people use social networks at work

• 30% Netherlanders work at home

• 37% Europeans prepare their shopping online

• 63% French people travel at least once a week

• 15-24 years value web and mobile 4.5 more than TV

• 1 M objects are connected in Belgium

The evolution of social and telecommunications individualistic behaviors are feeding Mobistar’s vision for the future

Revenue growth above market

growth

3G/4G networks + Voice& Data

Abundance

“À la carte” vs. “All you can eat”

convergence

A new deal with Customers

(shops & phone)

Mobistar has defined 3 priorities to enable its vision of the future

12

Differentiatewith services everywhere

Consolidate Leadership in

Mobile

DeliverBest in class

Customer Service

12

• The new Mobistar subscriptions are named after animals: Squirrel, Kangaroo, Dolphin and Panther.

• This concept of differentiation by animal names has been proven to work in other countries.

• The differentiation by animal names enables customers to much more easily find the price plan that best suits their needs and to get more for their money.

• As from now, customers can choose a contract without commitment.

• No more limited time only promos; from now on, the advantages are valid for life.

• No more mobile Internet usage bill shocks possible anymore

• There are unlimited elements in almost all the price plans, whether that be unlimited calls, unlimited texts, unlimited access to social networks or unlimited surfing.

13

New innovative postpaid animal portfolio give Belgians the control of their mobile consumption

Launched in April 2012, Mobistar is the first to anticipate the new Telecommunications Law

100,000+ tests completed online in 1 month

14

15

Market trends

• Almost 1out 5 Belgians has a smartphone

• In 2011, close to 1 out of 3 new handsets sold was a smartphone

• Sales of tablets was multiplied by a factor 7 to 350 k in 2011 and should reach 485k units sold in 2012

Mobistar answer

• Secure monetization of mobile traffic increase

• Further segmentation (2 new bundles both for mobile multimedia and ~broadband)

• iPad users get a 1YR free digital subscription to one local newspapers

• Deep indoor coverage enhancement with 3G/WIFI modem included in the offer

On data, Mobistar continues to commercially innovate to capture increasingly equipped consumer

+15%+15%+15%+15%

Dec-11Dec-10Dec-09

+35%+35%+35%+35%

Dec-11

114

Dec-10

89

Dec-09

62

data roamingMobile BroadbandMobile Multimedia

Mobile Multimedia line-up

Yearly traffic evolution Advanced data revenue (Mio EUR)

Within the MATMA segment, Mobistar passed the 1,5 Mio signed cards milestone in a variety of sectors

16

Smart metering

Gaming

Mobile Points-of-Sale & Vending machines

10% of the Belgian market



Fleet

Connected devices

Cars




M2M Leader in Belgium (70% of market share )

Market categorized in 6 segments

Orange International M2M Center of

competence

• At the end of 2011, the total number of activated cards amounted to 417 000 units

• In 2011, Mobistar signed more than 10 Contracts in US and Europe for a total commitment of 1.5 Mio cards.

• Sprint agreed recently to partner with Orange to extend its global M2M through the Mobistar center of competence

• Mobistar reconfirmed as expertise center and will continue to invest in M2M platform in the coming 2 years

Matma results (in Mio EUR and ‘000 cards)

13

108

417

2009

+33%+33%+33%+33%

2010 2011

130

+17%+17%+17%+17%

193

Rev. (Mio EUR)

Cards (’000)

17

• Mobile data revenues up to 42% of mobile service revenues in Q1 2012 (from 37% in Q1 2011)

• Non-SMS mobile data represent 12% of total mobile service revenues (vs. 11% in Q1 2011)

• Supported by the successful uptake of

• Strong uptake in usage of Smartphone

• SMS abundance offers

• Strong take up Internet Everywhere (from 116k to 154k cards y-o-y)

• Leader in MaTMa applications with more than 434 k cards activated

Insight

Further segmentation of mobile data offers leading to a sustained growth of the advanced data revenues

42%

37%

0

50

100

150

200

250

300

350

400

450

500

Q1 2012

126

27%

Q1 2011

116

77%

FY 2011

476

3%

FY 2010

428

71%

3%

21%

26%2%

37%

73%

32%

24%

70%

2%

Mobile data uptake (in Mio EUR)

data as % mobile service rev

SMS

Mobile Data

MATMA

17

20

6610

1800 MHz*

22

20

6

22

Potentially for sale)

900 MHz**

1800 MHz

6

800 MHz

15

15

30

1

15

152100 MHz

15

15

2600 MHz 20 45 (TDD unpaired spectrum)

15

20

Proximus

Mobistar

Base

Current spectrum allocation (MHz duplex)

Telenet/Tecteo

Mobistar has secured close to 2 x 70 MHz till 2015

Mobistar has secured the necessary spectrum to cope with a 50% yearly mobile traffic increase

BUCD

* As from July 2012, following a decision by the BIPT, Mobistar will be entitled to use the full allocated spectrum band in the 1800MHz (included in the 2G renewal fee )

** Telenet/Tecteo consortium has exercised its option to acquire and potentially roil-out a 4,8 MHz duplex in 900 MHz and 10 MHz duplex in 1800 MHz band as from Nov 201518

• Coverage mainly for mobile data• UMTS in 900 MHz combined with

network swap Nortel to Huawei

• Densification UMTS 2100MHz

• Capacity & quality for voice & mobile data

• Increase backhauling speed with continuous fiber & microwave deployment

• Additional spectrum capacity in dense areas

• Innovation & differentiation with competition

• LTE pilots live in Luxembourg

• Maximal re-use of 1800MHz spectrum for LTE

1) Full upgrade of the 2G equipment1) Full upgrade of the 2G equipment1) Full upgrade of the 2G equipment1) Full upgrade of the 2G equipment

2) Further extension of the UMTS 2100 2) Further extension of the UMTS 2100 2) Further extension of the UMTS 2100 2) Further extension of the UMTS 2100 layerlayerlayerlayer

� First LTE test highlights to huge potential both in terms of downlink ~ (100Mbps peak) , upload-speed and latency

3) Exploit the LTE opportunity3) Exploit the LTE opportunity3) Exploit the LTE opportunity3) Exploit the LTE opportunity

� 2300 refreshed GSM sites to hybrid equipment of which 1600 upgraded with UMTS 900

Mobistar main radio transformation initiatives have already started in 2011

Main network roll-out programs Customer benefit

Short term 3G target coverage

Short term 4G target coverage

� Continued investment in the HSPA+layer

19

Moreover, new Tier 1 partnerships and MVNO deals enables Mobistar to constantly address new segments

20

MVNO segment

813

50

42

26

572

475

590

456

322

201120102009 Q1 2011 Q1 2012

Rev. (Mio EUR)

Cards (’000)

Co-Marketing segment

Improved and extended Full-MVNO agreement with Telenet and extension of the IRISnet contract

21

• Mobistar and Telenet have renewed their 2009 Full-MVNO agreement in April 2012, extended by 5 years to 2017

• The Walloon cable operator Tecteo (VOO) will also launch mobile services in the future thanks to a step-in agreement through Telenet

• Hence, the Full-MVNO agreement will cover the whole of Belgium• New agreement will cover both 3G and 4G services and will solidify Mobistar’s

competitive positioning

• On May 11, 2012, Brussels Region government announced that they will partner up with Mobistar for a period of 10 years

• Mobistar will have the full responsibility to manage the operation of the Next Generation Telecom Network for the Brussels Capital Region

Plug Mobile (co-marketing with RTL Belgium) will enable Mobistar to address young terget group

22

• Mobistar and RTL joined forces to launch and energize the Plug Mobile offer

• This highly mobile offer is designed especially for the younger generation

• Via the Plug Mobile brand, Mobistar reaching a younger, more feminine target group and further strengthens its position in the highly competitive prepaid cards segment.

Mobistar ambitions to provide every individual with “à la carte” ubiquitousand and trusted telecoms services

Medium term evolution

Telcos now work on shorter time cycles

Mobistar “Anywhere @home, @work, with friends”

• Unlimited, seamless 3G+-4G

broadband services.

• Tactical broadband fix TV + Internet

substitution

• Multiscreen experience: laptops, tablets,

smartphones and connected TVs.

• No minimum contract duration but

reward of customers’ loyalty.

• Preferred-in-Belgium personalized

service: on the phone, in Mobistar

“service” Centers, online and in social

networks.

23

Mobistar TV (V2)Mobistar on demand

Average of of 2.5 VoDrentals/month per active

user

Already more than 35000 downloads

� TV Guide (14 days)

� Schedule PVR recordings, set reminders

� Browse the VOD catalog, order preload

� Manage your accounts

� Social networks integration

www.mobistar.tv34% of online TV users have used Mobistar+ widgets

� TV Oost, TV Limburg

� M* Mobile TV promotion

� Customer experience improvements

New TV widgets New TV Web Portal

24

In line with our vision we continued to further develop the service layer of our convergent proposition

25

•Control your TV decoder with iOS/Android apps for tablets

•New TV channels

Moreover, update of Mobistar TV app for tabletsand new HD/SD channels launched in 2012

26

To date, in a increasingly competitive market, Mobistar activated 35 000 digital TV subscribers

73

4532 42 49 43

-66

40

7

Q4 2010

40

-87

44

10

Q1 2012

183

45

-73

Q4 2011

51

-64

58

8

Q3 2011

25

-62

38

6

Q2 2011

30

-52

46

3

Q1 2011

26

Telenet analogue

Telenet digital

Belgacom

Mobistar

Television quarterly net adds (k users)*

*no public figures available for Voo and Numericable26

27

Mobistar has developed a comprehensive range of services to help during their lifetime

“Comfort services for my (smart)phone”“I manage my usage status and activate mobile data bundles anytime, anywhere”

Mobistar made important investment in its customer care assets

Verbatim of Happy Customer (FEB 2012)

+100 Team Members in

the customer care in 2011

28

29

•100 % gets answer within 5 days - 80 % treated within 5 days

Written requests

Calls

Easy access

Today

•80 % answered within 20 sec.

•Calls/Letter/Webform/Shop/Facebook/Twitter

Written confirmation

•Confirmation of each contractual/financial verbal agreement

Call back option•Call back option after 2.5 min for all calls

•6x faster answer

Change for Customer

•1/3 less waiting time

•Customer can easily find how to contact us and can choose

the channel

•Clear confirmation of actions taken -> No surprises on

invoice

No long waiting times for customers - If occasional long waiting time callback possible

This increased focus on Customer Service leading to tangible results

29


Regulation

111

59

50

60

70

80

90

100

110

120

After the end of the regulatory gliding path for mobile in 2013, a similar level of competition is now expected for the fixed in 2014

mobile voice

fixed line subscription

• Mobile minute price -41% in 4 years

• To be compared with Fixed line subscription:

+11% in same period:

1/1/121/1/111/1/101/1/091/1/081/1/071/1/06

mobile voice

fix voice

*Source: FOD Economie - SPF Economie – Statbel http://statbel.fgov.be and Belgacom

• July 2011: regulation decisions for

triple play services (TV and

Internet) published by IBPT

• Feb/Mar 2012: 1st offers regulated

submitted by Cablecos &

Belgacom

• Eo2012: definitive offers published

Pricing environment in Belgium Regulatory opportunities for Mobistar

31

On mobile regulation recent roaming proposal is more aggressive than the initial glide path

• Regulated revenues in Mobistar’s mobile turnover decreased with 10% to 395 Mio EUR in 2011 (27% of mobile turnover)

• New roaming glide path (recently approved by EU parliament & Council) in line with previous years decreases but including retail mobile data regulation.

• From 1 July 2014, customer will be able, if they wish, to sign up for a cheaper mobile roaming contract, whilst using the same phone number.

Defenitive EU retail mobile price caps* (EURcent/min)

1924

2935

5711

8

20

45

70

01. Jul 201401. Jul 201301. Jul 2012

Retail SMS (per SMS)

Retail data (per MB)

Retail voice out (per min)

Mobistar Mobile Turnover split (% of revenues)

11% 7%

2%5%

2010

1.476

73%

2011

12%10%

2%

1.443

5%----2%2%2%2%1%

70%

1%

Visitor Roaming

MTR Voice

Roaming voice

Roaming SMS

MTR SMS

Billed Revenues

Possible EU Commission proposal impact

32*Source www.europarl.europa.eu press release 10 05 2012

MTR evolution (EURcent/min)

0

2

4

6

8

10

12

1,19

1 Jan 2013

2,79

1 Jan 20121 Jan 20112009

Proximus

Mobistar

Base

4,29

5,05

BroadbandBroadband

BGC SMP

Market 4

BGC SMP

Market 4

LLULLU

BGC SMP

Market 5

BGC SMP

Market 5

Bitstream

incl. Multicast

Bitstream

incl. Multicast

BroadcastBroadcast

Cable SMP

on analog & digital

Cable SMP

on analog & digital

Resale analogResale analog

Digital TV transmissionDigital TV

transmissionResale

broadbandResale

broadband

Overview Broadcast & Broadband market analysis

History• On July 18th 2011, the CRC (the Conference of

Regulators incl BIPT) published their decisions that cover triple play services (TV and Internet)

Status Broadband decision (VDSL bitstream inclMulticast)• On 6/01 CRC allowed Belgacom to submit an

alternative IPTV Multicast wholesale offer within 2 months

• First cost elements are priced out-of-market

• Could improve Mobistar time to market

• Enables Mobistar to continue to differentiate on the service level

On Broadcast decision (Cable SMP on analog and digital)

• Cable companies have submitted their first regulated offer to CRC on 1st February 2012

• Following this regulated offer consultation phase will start

• Planning is still to have regulated offer by October 2012 with an indication of implementation period

Source: BIPT

Mobistar expects a similar level of competition in the fixed through the implementation of regulated broadband and TV offers

34

ACQUISITION LOYALTY & RETENTION CHANNEL

1. Redesign tariff portfolio

2. Contain Subscriber Acquisition Costs

1. Subscriber Retention Costs in order to avoid churn & washing machine effect

2. Develop customer value base management capabilities to reward loyaltyreward loyaltyreward loyaltyreward loyalty

3. Drive customers to controlled channels for contract renewal and upselling

1. Balance commercial acts from acquisition to acquisition & contract extension

2. Reinforce controlled channels in overall mix

3. Develop web share in commercial acts

4. Manage open channels

Mobistar continues its value approach

� EU directive foresees that member states offer users the possibility to subscribe contract with maximum duration of 12 months

� Translation into national law is currently being discussed at the government level

Mobistar prepared to face further regulatory decisions that could impact Mobistar billed revenues


Financials

Consolidated income statement

36

in Mio EUR 2010 (9m MES)

2011 % 2010 (excl MES)

2011 (excl MES)

%

Total Turnover Total Turnover Total Turnover Total Turnover 1,6651,6651,6651,665 1,6581,6581,6581,658 -0.4%-0.4%-0.4%-0.4% 1,6021,6021,6021,602 1,5851,5851,5851,585 -1.1%-1.1%-1.1%-1.1%

Total Service Revenues 1,524 1,506 -1.2% 1,461 1,433 -1.9%

Cash Expenses -1,116-1,116-1,116-1,116 -1,127-1,127-1,127-1,127 1.0% -1,063-1,063-1,063-1,063 -1,069-1,069-1,069-1,069 0.6%

EBITDA EBITDA EBITDA EBITDA 549549549549 530530530530 -3.4% 539539539539 515515515515 -4.4%

In % of service revenues 36.0%36.0%36.0%36.0% 35.2%35.2%35.2%35.2% 36.9%36.9%36.9%36.9% 36.0%36.0%36.0%36.0%

Depreciations and amortizations -171-171-171-171 -190-190-190-190 11.5% -160-160-160-160 -175-175-175-175 9.7%

Net finance income -5-5-5-5 -11-11-11-11 141.6% -5-5-5-5 -11-11-11-11 144.5%

Tax expense -110-110-110-110 -108-108-108-108 -1.9% -110-110-110-110 -108-108-108-108 -1.7%

Net profitNet profitNet profitNet profit 264264264264 221221221221 -16.2% 265265265265 221221221221 -16.6%

Diluted earnings per share (in €) 4.44.44.44.4 3.73.73.73.7 -16.2% 4.44.44.44.4 3.73.73.73.7 -16.6%

Mobistar consolidated income statement

Consolidated income statement Q1 2011-Q1 2012 evolution

37

in Mio EUR Q1 2011 Q1 2012 %

Total Revenues 409 411 0.4%

Total Turnover Total Turnover Total Turnover Total Turnover 401401401401 399399399399 -0.4%-0.4%-0.4%-0.4%

Total Service Revenues 370 358 -3%

Cash Expenses -284-284-284-284 -298-298-298-298 5%

EBITDA EBITDA EBITDA EBITDA 125125125125 113113113113 -10%

In % of service revenues 33.9%33.9%33.9%33.9% 31.5%31.5%31.5%31.5%

Depreciations and amortizations -44-44-44-44 -53-53-53-53 20%

Net finance income -2-2-2-2 -2-2-2-2 20%

Tax expense -26-26-26-26 -20-20-20-20 -24%

Net profitNet profitNet profitNet profit 53535353 38383838 -28%

Diluted earnings per share (in €) 0.90.90.90.9 0.60.60.60.6 -28%

Mobistar consolidated income statement

38

SMS abundance, non-mobile revenues and MES/Orange Lux affiliates offsets voice price pressure and regulatory effects

42

6

Mobistar group turnover evolution breakdown (in Mio EUR)

Volume effectPrice effect

67

8

60

2011 Group

Turnover

1.658

MES

19

Orange Lux

10

Billed / HS Rev.

5

Visitor Roaming

1

Customer Roaming

26

National Incoming

2010 Group

Turnover

1.665

Good elasticity in SMS roaming offset by mobile voice regulation

Essentially driven by SMS abundance

Voice/SMS decreases more than compensated by mobile data uptake, non-mobile, MVNO and handset revenues

In Belgium, convergence strategy in both segments and mobile data focus allows Mobistar to preserve mobile margin

39

in Mio EUR 2010 (9m MES)

2011 % 2010 (excl MES)

2011 (excl MES)

%

Total Turnover 144.6 168.3 16% 83.5 88.4 6%

Total Service RevenuesTotal Service RevenuesTotal Service RevenuesTotal Service Revenues 144.6144.6144.6144.6 168.3168.3168.3168.3 16% 83.583.583.583.5 88.488.488.488.4 6%

Cash Expenses -159.8-159.8-159.8-159.8 -192.7-192.7-192.7-192.7 21% -108.3-108.3-108.3-108.3 -127.5-127.5-127.5-127.5 18%

EBITDA EBITDA EBITDA EBITDA -15.2-15.2-15.2-15.2 -24.4-24.4-24.4-24.4 60% -24.8-24.8-24.8-24.8 -39.1-39.1-39.1-39.1 58%

In % of service revenues -10.5%-10.5%-10.5%-10.5% -14.5%-14.5%-14.5%-14.5% -29.7%-29.7%-29.7%-29.7% -44.2%-44.2%-44.2%-44.2%

Mobistar FIX Income Statement

in Mio EUR 2010 2011 %

Total Turnover 1,476 1,443 -2%

Total Service RevenuesTotal Service RevenuesTotal Service RevenuesTotal Service Revenues 1,3321,3321,3321,332 1,2881,2881,2881,288 -3%

Cash Expenses -918-918-918-918 -897-897-897-897 -2%

EBITDA EBITDA EBITDA EBITDA 558558558558 546546546546 -2%

In % of service revenues 41.9%41.9%41.9%41.9% 42.4%42.4%42.4%42.4%

Mobistar Mobile Income Statement

Orange Luxembourg continued to deliver growth, with an increasing mix in postpaid subscribers in the B2B segment

40

in Mio EUR 2010 2011 %

Total Turnover Total Turnover Total Turnover Total Turnover 55.455.455.455.4 65.765.765.765.7 19%19%19%19%

Total Service Revenues 50.6 60.7 20%

Cash Expenses -49.5 -57.3 16%

EBITDA EBITDA EBITDA EBITDA 5.95.95.95.9 8.58.58.58.5 43%43%43%43%

In % of service revenues 11.7% 14.0%

Orange Communications Luxembourg

Income Statement

Q1 2011 Q1 2012

Prepaid

Postpaid

49.09 49.01----0.2%0.2%0.2%0.2%

Q12012Q1 2011

Customers on the Orange Luxembourg network (k users)

Blended ARPU (incl. visitor roaming)12 months rolling ARPU (EUR/month)

91 96

41

Orange LuxembourgOrange LuxembourgOrange LuxembourgOrange Luxembourg

• Increase driven by handsets costs in correlation with the handsets sales , interconnect cost in line with revenue growth, IT renewal implementation and headcount evolution (from 129 to 141 FTE, mainly in shops)

NonNonNonNon----headcount costheadcount costheadcount costheadcount cost

• Higher Dealer rem due to higher sales B2C (both mobile & non mobile).

• Increase in commercial exp. to support non-mobile activities

• Network increase in line with network roll-out and IT expenses

• Increase in network property costs due to site volume impact , compensated by less office rental & costs due to move to new building

• Decrease of provisions related to the universal service based on new regulation evolution

Interconnect and other costs of sales (after intercompany elimination)Interconnect and other costs of sales (after intercompany elimination)Interconnect and other costs of sales (after intercompany elimination)Interconnect and other costs of sales (after intercompany elimination)

• Higher interconnect is driven by uplift in SMS usage due to SMS abundance offers (especially Prepaid), but almost totally offset by lower domestic voice & roaming costs both due to regulation.

• Customer access cost increase driven by non-mobile activities (both internet and TV commercial activity both consumer & business) compensated by less leased lines costs thanks to migration to Microwave, fiber and DSL solutions.

FY 2010 FY 2011

MES

Orange Lux

1.169

1.047

65

571.149

1.046

53

50

458 432

131 138

Handset/RT Costs

Non-Headcount

Cost

HeadcountCost

FY 2011

1.047

167

310

FY 2010

1.046

148

309

Total cash expenses Mio EUR

Interconnect & Other Sales

Costs

Cash expenses driven by MES consolidation, increase in FTE and handset sales costs compensated by lower MTR and efficiency

MES MES MES MES

• 9 month consolidation in 2010 only, integration with Mobistar B2B and network activities being implemented

Handsets & RT costsHandsets & RT costsHandsets & RT costsHandsets & RT costs

• In line with increase in handset sales, with a mix in favor of high-end devices / smart-phones and EoY voucher promo

Headcount costsHeadcount costsHeadcount costsHeadcount costs

• Increase driven by increased focus on customer experience (+164 FTE integrated from MES, customer care and sales department). 2,49% wage indexation

42

Odyssey transformation programs already delivered 80 Mio EUR of gross saving over a period of 2 years

(e.g. Mobile Data, Fix Program, revenue engineering and devices)

(e.g. Network optimization)

(e.g. Customer care, distribution and organization)

* Transformation includes capex and opex savings, includes recurring cost reductions as well as cost avoidance

Gross saving objective Gross saving realized and projected

(Mio EUR)

2010-2012

More than 100 Mio EUR

8 36

48

8

4

5

19

31

2010 2011

• Main contributors are Mobistar OLU synergies, device transformation and network optimization (MW)

• Cumulated over 2010-2011 already 79 MIO EUR gross savings realized vs 2009 cost base

• Transformation program will continue beyond 2012

43

Capex driven by technical transformation, further 3G roll-out and commercial launch of Starpack

Capex (in M EUR) Capex as % of service revenues

• The Mobistar network had 5483 2G/3G sites at the end of 2011

• In line with its backhauling upgrade plan, Mobistar deployed over 1100 microwave deployed (vs 669 EoY 2010)

• First phase of IT-renewal program implemented in Luxembourg. This program targets a fully new integrated customer care, service delivery and billing system in order to improve the total cost of ownership and time to market

• Customer Equipment cost driven by gross add realized in ADSL, Starpack and Fix Business products

• Consolidation of MES capex (incl in Network) for 12 months in 2011, vs 9 months in 2010

• 2x 20 MHz license acquisition in the 2,6GHz band for the reserve price of 20.02Mio EUR payable as from July 2012

60 63

10,9%

12,2%

183

2010 2011

8879

166

Main Capex drivers

Sales and real estate

Customer Equipment

CAPEX (excl lic)/service rev.

Network

MES

OLU

IT (legacy and renewal)

20

74

4G license acquisition

2G license renewal

Balance sheet

44

Free cash flow (consolidated)

45


Guidance

47

Main elements supporting the 2012 guidance

• Revenue and EBITDA negatively impacted by regulation for a total amount of 58 Mio EUR on revenues and 32 Mio EUR on EBITDA*

• MTR regulation impacts revenue around 30 Mio EUR and EBITDA around 13 Mio EUR• Current roaming decision (revised vs. initial assumption) is expected to have a revenue

impact of around 28 Mio EUR and EBITDA 19 Mio EUR

• Revenue and EBITDA positively driven by

• Strong mobile data growth • Further revenue growth both in the fix residential and fix business segment• Ongoing transformation program

• Mobistar is convinced that the new portfolio of mobile offers, based on simplicity and more adapted to the consumers’ needs, will generate positive results in the next quarters

• The guidance is based on the current figures on the evolution of the Belgian economy and take into account a more intense competition on the telecom market

*(vs 51Mio EUR an d 22 MIO EUR initially forecasted) at FY 2011 announcement

48



Mobistar guidance takes into account a very challenging macro-economic and rapidly evolving industry context

Total Turnover

Ebitda


Net profit

Organic cash flow**

2011 2012

guidance

1657,6 M EURDecrease limited to

maximum 2%

530,1 Mio EURbetween

460 - 500 M EUR

12.2 of service revenues

Around 12% of service revenues

221 Mio EURbetween

170-195 M EUR


170 - 195 M EUR

49



Mobistar guidance takes into account a very challenging macro-economic and rapidly eroding industry context

Total Turnover

Ebitda


Net profit

Organic cash flow**

2011 2012

guidance

1657,6 M EURDecrease limited to

maximum 2%


460 - 500 M EUR

12.2 of service revenues

Around 12% of service revenues

221 Mio EURbetween

170-195 M EUR


170 - 195 M EUR

Visit our websites:• www.mobistar.be

• http://business.mobistar.be

• http://corporate.mobistar.be

Documents

Q1 2012 roadshow presentation final - · PDF file2 This presentation contains forward-looking statements about Mobistar, in particular for 2012. Although Mobistar believes these statements