Strong commercial success validates Orange Belgium’s position as a Bold Challenger

Belgium operational highlights

• Strong performance of mobile operations. During the first half of the year, Orange Belgium improved its postpaid plans by introducing bold plans with unlimited voice and data. This market positioning contributed to subscriber growth and lower churn. Net additions accelerated to 53k during the quarter compared to 26k in the second quarter of 2018. The contract customer base increased by 5.3% yoy. The stability of contract mobile-only ARPO is the result of attractive offers and improving subscriber mix. As a result, the average data consumption per user in September was 2.9 Gb (+73% yoy). Lastly, the prepaid subscriber base was stable with net additions of 2k compared to the second quarter of 2018.
• Orange Belgium delivers strong momentum in convergence. The cable customer base increased by 89.4% yoy to 155k, representing net additions of 19k subscribers during the quarter. This solid performance was achieved without price promotion. The B2C convergent ARPO grew sequentially by 4.1% to €76.7. Cable mobile subscribers now represent 10% of the overall mobile customers. Amidst a fast growing subscriber case, the convergence operations’ EBITDA loss decreased from €5.2m in the third quarter of 2017 to €4.3m this quarter. The improvement was achieved through: operational efficiency, better churn management and a reduced wholesale price (implemented on August 1).

Group financial highlights

• Revenues increased by 1.5% yoy to €318.0m driven by a double-digit growth in retail services (+10.1% yoy), with a doubling of convergent revenues (+112.3%) and mobile revenue growth (+1.5%), offsetting lower equipment sales (-9.0%) and declining MVNO revenues.
• Adjusted EBITDA resumed growth (+2.2% yoy) to €81.4m supported by higher revenues as well as cost management
• Net debt amounted to €254.0m and gearing remains low (net debt to EBITDA 0.9x)
• 2018 financial guidance maintained: slight revenue growth, adjusted EBITDA between €275 and 295m and stable core capex  

Michaël Trabbia, Orange Belgium’s Chief Executive Officer, commented:

“We are very proud of our strong commercial performance in mobile and convergence, which is the result of our Bold Challenger positioning. We listened to the unmet expectations of Belgian customers for simple and worry-free offers. In the first half of 2018, we launched the first full unlimited mobile and convergent offers in Belgium, and we gave access to unlimited voice combined with a good data bundle to the vast majority of our customers.

This strategy allowed us both to attract new customers and to significantly improve their loyalty. Thanks to these new offers, the mobile data consumption growth of our customers accelerated since the beginning of the year, reaching 73% yoy. With the continued success of our convergent offers, over 10% of our mobile customers are now convergent.”

 

 Arnaud Castille, Chief Financial Officer, stated:

“Adjusted EBITDA resumed growth in a context of strong commercial success. This was driven by increasing revenues as well as cost management. EBITDA margin also improved as we diligently pursue operational efficiencies. The convergence operations’ EBITDA loss has decreased despite a fast growing subscriber base. We have delivered compelling organic cash-flow growth this quarter. Our balance sheet position remains solid and this allows us to continue investing for our customers' satisfaction.”