Proximus SA (BGAOF) Q3 2024 Earnings Call Highlights: Strong Fiber Expansion and Positive ...

GuruFocus News
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In This Article:

  • Group EBITDA Growth: Expected to grow up to 3% for 2024.

  • Fiber Footprint Expansion: Increased by about 500,000 homes passed in the past year, reaching over 2 million.

  • Residential Revenue Growth: Up by 3.1% year-over-year, with services revenue increasing by 3%.

  • Domestic Revenue Growth: Achieved a growth of 1.5% for Q3, driven by a 2.2% increase in services revenue.

  • Domestic EBITDA Growth: Increased by 1.3% year-over-year.

  • International Direct Margin Growth: Increased by 2.3% on a pro forma basis, and 3.5% excluding currency effects.

  • International Segment EBITDA Growth: Grew by 4.2% from a high comparable base.

  • CapEx: Totaled EUR874 million for the first nine months of 2024, down by about 3% year-over-year.

  • Free Cash Flow: EUR161 million for Q3 on an adjusted basis, with nine months free cash flow at EUR48 million.

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) 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.

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