Guillaume BoutinCEO of the Proximus Group

Third quarter results keep us well on track to meet our ambitions for the year, with organic Group EBITDA expected to land in the mid to upper part of our guidance range.

For years, Proximus has been playing a very important societal role, through our networks, our support to Belgium in times of crisis and our commitment to a net zero planet. To that end, Proximus has signed the European Green Digital Coalition, aiming at reaching net zero carbon emission by 2040, 10 years ahead of the Paris agreement. It is just one example of the steps Proximus is taking to meet the climate ambitions already anchored in our strategy. This is becoming even more relevant, as we are confronted with the consequences of climate change like the heavy flooding in the South of the country this summer. I’m proud of our field engineering and support teams who have been working day and night in very challenging conditions to restore our infrastructure in the impacted areas, ensuring that customers could reconnect with family and friends.

From a commercial perspective, we achieved a strong mobile growth for our Domestic operations, adding 58,000 Mobile cards over the third quarter. For both Internet and TV, we grew our respective customer bases by 5,000 subscriptions each. The slower pace, compared to prior quarters, broadly resulted from less customer rotation and the severe floods, while overall the customer-initiated churn was down from the previous year. We continued to do well in the higher-value Consumer segments, as demonstrated by our convergent and Fiber-based offers. By end-September, a total of 104,000 households enjoyed one of our Fiber offers, of which 14,000 new Fiber subscribers in the third quarter. We expect this success to build up, as our Fiber roll out continues to accelerate.

Our Fiber program is progressing very well, with another 65,000 new premises passed bringing us to a total of 686,000 or a coverage of over 11% of Belgium. In line with our ambitious plan, we are further increasing capacity to obtain a 10% annual build coverage at cruise speed. With the two joint ventures Fiberklaar and Unifiber having set up construction works in 6 cities, we are well on track to cover at least 70% of Belgian households and enterprises with Fiber by 2028.

Within the professional market, our Enterprise unit held up well. Despite intense competitive dynamics, our B2B mobile service revenue was up by 2.9% thanks to a growing volume and controlled ARPU decline. The transformation to converged ICT services continues at pace with growing higher-margin IT services revenue in the quarter. Going forward, we expect to further strengthen our competitive offerings with, among other things, our recent strategic Cloud partnership with HCL.

Domestic underlying revenue was -0.8% lower than the preceding year, supported by the ongoing sound operational performance and the inclusion of Mobile Vikings in the Proximus family. This decline mainly resulted from low-margin revenue from Interconnect and ICT related to delays in global supply chain deliveries of hardware. Furthermore, as was expected, the Voice usage has come back from its unusual high levels in 2020, for both consumer and enterprise.

Our BICS segment achieved a strong third quarter, growing revenue by 12.6%. BICS’ Core services revenue posted a material revenue increase thanks to a combination of high A2P messaging volumes and a favorable destination mix, reflecting the trading nature of this part of BICS’ business. We also saw International travel picking up, in particular within Europe, and a strong traction for Cloud communication services. Combined with ongoing cost control, this led to a 15.8% increase in EBITDA.

TeleSign posted another strong sales quarter, with revenue up by 22.1%. The growth was driven by both business lines: Programmable Communications and Digital Identity services. The third quarter of 2021 ended with a strong performance on new signed contracts, which will continue to support double-digit revenue growth for the remainder the year.

Overall, I am very pleased with our results and progress on our strategy over the first nine months of the year. Financially, the organic underlying Domestic revenue remains broadly on track while we kept strong momentum on our international businesses. We continue to monitor the global supply chain shortages that can have an impact on low-margin product & handset revenues. In addition, we keep a high focus on our company-wide cost program, on target to achieve EUR 400 million gross savings by end 2025. Therefore, we are confident that for our guidance on organic underlying Group EBITDA, we will land in the mid to upper part of our guidance range. With the Fiber rollout progressing well, we reiterate our expectation to end 2021 with close to EUR 1.2Bn Capex, excl. spectrum and football rights.

As a last point, I’m happy to announce the Board of Directors approved interim dividend of EUR 0.5 per share, to be paid in December 2021.