belgacom company presentation investor relations

41
Belgacom Presentation Q2 2014 results Group Financials Executive summary – slide 4 Group Revenue – slide 5 Mobile Service Revenue slide 6 Operating expenses - slide 7 EBITDA – slide 8 Capex – slide 9 FCF – slide 10 Financial Position – slide 11 Outlook – slide 12 P&L – slide 13 Balance sheet – slide 14 Group Operationals Mobile & Fixed overview – slide 16 Operational Household reporting – slide 17 Financial Household reporting – slide 18 Network Mobile – slide 20 Fixed – slide 21 Details per Business Unit – slide 22

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Page 1: Belgacom Company presentation Investor Relations

Belgacom Presentation Q2 2014 results

Group Financials

Executive summary – slide 4

Group Revenue – slide 5

Mobile Service Revenue slide 6

Operating expenses - slide 7

EBITDA – slide 8

Capex – slide 9

FCF – slide 10

Financial Position – slide 11

Outlook – slide 12

P&L – slide 13

Balance sheet – slide 14

Group Operationals

Mobile & Fixed overview – slide 16

Operational Household reporting – slide 17

Financial Household reporting – slide 18

Network

Mobile – slide 20

Fixed – slide 21

Details per Business Unit – slide 22

Page 2: Belgacom Company presentation Investor Relations

Cautionary Statement

Slide 2

“This communication might include some forward-looking statements, without limitation, regarding Belgacom’s financial or operational results, certain strategic plans or objectives, macro-economic trends, regulation, future market conditions and other risk factors. These forward-looking statements rely on a number of assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside Belgacom’s control. Therefore the actual future results may differ materially from those expressed in or implied by the statements.

Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication.

Belgacom disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise.“

Page 3: Belgacom Company presentation Investor Relations

Group Financials

Ray Stewart

Slide 3

Executive summary – slide 4 Group Revenue – slide 5 Mobile Service Revenue slide 6 Operating expenses - slide 7 EBITDA – slide 8 Capex – slide 9 FCF – slide 10 Financial Position – slide 11 Outlook – slide 12 P&L – slide 13 Balance sheet – slide 14

Page 4: Belgacom Company presentation Investor Relations

Strong Q2 financials: solid business performance and positive special items

Slide 4

Group revenue -0.9% versus Q2’13

Excluding capital gain on building sales and

divesture impacts -1.1% like-for-like:

− better Core Group revenue to -1.7% YoY

− BICS revenue recovery to +0.5% YoY

€ 1,568 m REVENUE*

Group EBITDA: +14.3% YoY

Ex. Special items for € 65m, –0.9% like-for-like

good progress in the Consumer and Business segment results driven

by improved revenue trends and lower operating expenses

€ 491 m EBITDA*

€ 245 m Capex

capitalisation of the acquired 3-yr broadcasting rights of the Belgian

Jupiler Pro League football

Network and IT investments as foreseen in Belgacom’s strategy

€ 272 m FCF

€ 225m more than for the same period of 2013

mainly due to: sale of consolidated companies, building sales, lower

income tax payments (timing differences).

* Before non-recurring items

Page 5: Belgacom Company presentation Investor Relations

1,5831,568

+46

-42-11 -5

+2

-6

+2 0

Q2 2013 Net ImpactBuilding

Sales

Net ImpactM&A

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

BICS Intra-groupelimination

& S&S

Q2 2014

3 ,168

3 ,048

+35

-43-19

-17 -8-10

-58

0

H1 2013 Net ImpactBuilding

Sales

Net ImpactM&A

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

BICS Intra-groupelimination

& S&S

H1 2014

H1 2014

(in mio €)

Q2 Group revenue reflecting trend improvement for CBU & EBU, like-for-like. BICS revenue stable YoY

Q2 2014

(in mio €)

Slide 5

-1.1% Like-for-like

-0.9% reported

-3.6% Like-for-like

-3.8% reported

Page 6: Belgacom Company presentation Investor Relations

-5.0%

-7.1%

-12.9% -13.3% -14.0%

-11.6%

-6.0%

-4.5%Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Reported

On comparable basis

Group mobile service revenue trend improving on continued Mobile recovery

Slide 6 Slide 6

+169,000 Mobile customers added YoY in total Churn levels under control:

EBU Mobile churn @ 9.8% in Q2’14 CBU Mobile churn @ 25.7% in Q2’14, Postpaid @ 14.0%

Increased data usage Improving customers tiering Fading impact from re-pricing continued

CBU &

EBU

Page 7: Belgacom Company presentation Investor Relations

290278

290 283 288 282 278

255

150

170

190

210

230

250

270

290

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Quarterly HR expenses (€ million)

217

256

218 225216

244

215202

150

170

190

210

230

250

270

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Quarterly Non-HR expenses (€ million)

649 680637 645 636 643

575620

150

250

350

450

550

650

750

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Quarterly Cost of Sales (€ million)

Slide 7

-9.6%

-10.6%

-3.8%

Implementation of ‘Fit for Growth’ strategy showing in good cost control

• About half of the decline comes from cost efficiency efforts

Additional support from: • Telindus France divestment • One-off provision withdrawal following the

settlement of litigation provision

• HR expenses down -1.1% like-for-like in Q2’14

Additional support from: • divesture-driven decline of -1,032 FTEs • net positive HR one-off effect • accounting alignment of capitalized manpower

• Deconsolidation of Telindus France

Consumer Segment favorably impacted by : • continued focus on cost efficiency • lower interconnection costs • lowered Mobile Termination Rates in Luxbrg

• Partly offset by higher CoS within EBU and BICS

Page 8: Belgacom Company presentation Investor Relations

430

-2

491

+46

+20

-9

+2

0

+2 +4

Q2 2013 Net ImpactBuilding Sales

Net ImpactOne-offs /

M&A

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

UnderlyingS&S

BICS Q2 2014

871-7

904+35

+23

-16 -3

-10

+3 +7

H1 2013 Net ImpactBuilding Sales

Net ImpactOne-offs /

M&A

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

UnderlyingS&S

BICS H1 2014

H1 2014

(in mio €)

Group Ebitda benefitting from building sales and improving underlying trend for CBU and EBU

Q2 2014

(in mio €)

Slide 8

-0.9% Like-for-like

+14.3% reported

-3.0% Like-for-like

+3.7% reported

Page 9: Belgacom Company presentation Investor Relations

€ 425 million invested so far in 2014 3-year Belgian football broadcasting rights recorded as capex in Q2

Slide 9

*This does not include the € 120 mio capex paid for a 800 Mhz spectrum

Q2’14 investments € 68m higher YoY :

Accelerated network & IT investments in line with announced Network and Simplification strategy

Capitalisation of the acquired 3-year broadcasting rights of the Belgian Jupiler Pro League football

* 734

777753

852

11.1%12.1% 11.7%

13.5%

2010 2011 2012 2013 Outlook 2014

Group Capex (in € mio )

capex as percentage of revenuearound

960m EUR

*

FY 2014 capex to be around € 960m: Access networks IT and systems Convergence services Brand image and includes Belgian Jupiler Pro League football

177

245

370

425

Q2’13 Q2’14

H1’13 H1’14

Page 10: Belgacom Company presentation Investor Relations

Q2’14 FCF of € 272m; bringing ytd June ’14 FCF to € 391m

Slide 10

136

391

Belgacom generated € 391 m of FCF in H1’14, or € +255 m YoY. Main drivers for the FCF increase are :

- cash received from the sale of consolidated companies

- cash received from the sale of buildings

- lower income tax payments (including timing differences) * Excluding non-recurring and non-cash related items

H1 2014

(in mio €)

Page 11: Belgacom Company presentation Investor Relations

( 1 ,815)

3 91 (545)

( 33) 20 ( 1 )

( 1 ,981)

Net debtDecember 2013

FCF Dividends Non controllinginterests

Net sale oftreasury shares

Other Net debt June2014

Sound financial position

Slide 11

Debt maturing

2015 € 145m

2016 € 950m

2018 € 500m

2023 € 100m

2028 € 150m

2026 € 73m

• Net financial debt at € 1,981m, € 166m higher versus end 2013

• The outstanding long term financial gross debt amounted to € 2.5Bio

• Credit ratings: Standard & Poor’s A; Moody’s A1 – both stable outlook

2024 € 600m

Page 12: Belgacom Company presentation Investor Relations

FY’14 EBITDA expectations raised on sound business trends and some higher than expected positive one-offs in H1’14

Reported FY ’13

Reported H1 ‘14

Initial Guidance FY ‘14

New Guidance FY ‘14

Group revenue

6,318

Core business (excl. BICS & Telindus FR)

4,410 -0.8% Decline between -1% and -2%

Decline between -1% and -2%

Telindus France

242

BICS 1,666 -7.0% Decline between -10% and -15%

Decline between -5% and -10%

Group EBITDA 1,713

Group EBITDA excl. Telindus FR

1,702 +4.2% Decline between -3% and -4%

Decline between -1% and -2%

Telindus France

11

Capex € 425m Around € 900 m Around € 960 m

The EBITDA guidance takes into account the positive impact from the accounting alignment on customer installation activities applicable as of January 2014, with a full-year impact of about EUR 20 million. By year-end, this will be offset by an exceptional spending for about the same amount related to the company’s transformation project and rebranding. The vast majority of the rebranding budget will be spent in the second half of 2014. Slide 12

Page 13: Belgacom Company presentation Investor Relations

Group – quarterly P&L

Slide 13

VARQ2/Q2

Revenues (1) 1,586 1,583 3,168 1,568 1,582 6 ,318 1,480 1,568 3,048 -0.9% -3.8%

Total OPEX -1,144 -1,153 -2,297 -1,140 -1,168 -4,605 -1,068 -1,077 -2,145 -6 .6% -6.6%

Costs of materials and charges to revenues -637 -645 -1,282 -636 -643 -2,561 -575 -620 -1,195 -3.8% -6.8%

Personnel expenses and pensions -290 -283 -572 -288 -282 -1,142 -278 -255 -534 -9.6% -6.7%

Other operating expenses -218 -225 -443 -216 -244 -903 -215 -202 -416 -10.6% -6.0%

EBITDA (1) 441 430 871 428 413 1,713 412 49 1 904 14.3% 3.7%

EBITDA margin (1) 27.8% 27.2% 27.5% 27.3% 26.1% 27.1% 27.8% 31.3% 29.6%

Non recurring items 0 0 0 1 -15 -14 -1 65 64 - -

Depreciation -192 -200 -392 -197 -193 -782 -196 -207 -403 3.3% 2.8%

EBIT (incl. NR) 250 230 479 232 206 9 17 215 350 565 52.2% 17.9%

Financial result -20 -24 -45 -27 -24 -96 -23 -20 -43 -16.6% -3.7%

Tax expense -53 -44 -97 -44 -29 -170 -40 -66 -105 48.6% 8.2%

Net income (Group) 171 155 326 156 148 630 149 25 1 400 61.5% 22.5%

Non-controlling interest 5 6 11 6 4 22 4 12 16 - -

Earnings/share in € 0.54 0.49 1.02 0.49 0.47 1.98 0.47 0.78 1.25 60.0% 22.2%

Earnings/share in € (excl. NR) 0.54 0.49 1.02 0.49 0.51 2.02 0.47 0.61 1.09 25.1% 6.1%(1)

before non-recurring items

in mio € Q113 Q213 Q313 Q413 FY13 Q114 Q214Restated

VAR YTD

YTD-

JunYTD-

Jun

Page 14: Belgacom Company presentation Investor Relations

Belgacom consolidated balance sheet

All balance sheet captions impacted by disposal of Group Telindus France:

- Decrease of goodwill by € 28m

- Intangible fixed assets & property, plant & equipment decreased € 13m

Shareholders’ equity decreased from € 2,846m end 2013 to € 2,731m end June 2014. This mainly results from the 2013 dividend payment of € 537m typically exceeding the net income generated over H1’14.

Slide 14

As of 30 June

(EUR million) 2013 2014

ASSETS

NON-CURRENT ASSETS 6,254 6,222

Goodwill 2,320 2,294

Intangible assets with finite useful life 1,185 1,160

Property, plant and equipment 2,558 2,570

Investments in associates 6 3

Other participating interests 6 12

Deferred income tax assets 105 87

Other non-current assets 74 96

CURRENT ASSETS 2,163 2,152

Inventories 163 140

Trade receivables 1,289 1,200

Current tax assets 137 111

Other current assets 148 170

Investments 60 9

Cash and cash equivalents 355 521

Assets classified as held for sale 11 0

TOTAL ASSETS 8,417 8,373

LIABILITIES AND EQUITY

EQUITY 3,042 2,909

Shareholders' equity 2,846 2,731

Issued capital 1,000 1,000

Treasury shares -527 -506

Restricted reserve 100 100

Remeasurement reserve -51 -49

Stock compensation 13 11

Retained earnings 2,310 2,174

Foreign currency translation 1 0

Non-controlling interests 196 178

NON-CURRENT LIABILITIES 2,865 3,385

Interest-bearing liabilities 1,950 2,549

Liability for pensions, other post-employment benefits and termination benefits 473 425

Provisions 204 184

Deferred income tax liabilities 128 118

Other non-current payables 111 109

CURRENT LIABILITIES 2,511 2,079

Interest-bearing liabilities 316 2

Trade payables 1,320 1,262

Tax payables 132 126

Other current payables 731 688

Liabilities associated with assets classified as held for sale 13 0

TOTAL LIABILITIES AND EQUITY 8,417 8,373

As of 31 December

Page 15: Belgacom Company presentation Investor Relations

Consumer Business

Unit

Dominique Leroy

Group Operationals Q2’14

Slide 15

Mobile & Fixed overview – slide 16 Operational Household reporting – slide 17 Financial Household reporting – slide 18

Page 16: Belgacom Company presentation Investor Relations

Continued solid commercial traction - Growing Mobile, TV and Fixed Internet customer base

Slide 16 Slide 16

Continued mobile customer growth

+Tango

57

2339

55 52

5,422 5,445 5,484 5,539 5,591

4,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

-100

-80

-60

-40

-20

0

20

40

60

80

100

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

net adds total

-71 -58 -48-67

-46

33 20 21 33 22

59

18 33 2525

-99.0.

-79.0.

-59.0.

-39.0.

-19.0.

1.0.

21. 0.

41. 0.

61. 0.

81. 0.

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

PostpaidPaying cards

Postpaid FreeData Cards

Prepaid

22

-216 -10 2

20 2611

31 324

8

15

25

88

6

6

7

5

.0.

10. 0.

20. 0.

30. 0.

40. 0.

50. 0.

60. 0.

70. 0.

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Free DataCards

M2M

Paying cards(other thanM2M)

3239

64

31

45

58

17 16

12

1,652 1,660 1,677 1,694 1,705

1,200

1,300

1,400

1,500

1,600

1,700

-2

3

8

13

18

23

28

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Broadband customer evolution net adds total

1619

31 30 30

1,428 1,447 1,465 1,495 1,525

1,184 1,198 1,204 1,225 1,244

400

600

800

1,000

1,200

1,400

1,600

0

20

40

60

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

TV Lines evolution net adds total Unique Customers

-39-33 -33 -34

-26

3,002 2,969 2,936 2,902 2,876

2,000

2,200

2,400

2,600

2,800

3,000

3,200

3,400

3,600

-50

-30

-10

10

30

50

70

Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Fixed Voice customer evolution net adds total

Good Fixed Internet net adds in commercial slower quarter

Successful retention actions reduced fixed voice line erosion

+52,000 Mobile customers of which +98,000 Postpaid & -46,000 Prepaid

Solid TV net adds continued

Page 17: Belgacom Company presentation Investor Relations

Good progress in convergence strategy - Operational drivers x-play Household reporting

Slide 17

– 55% of HH are multi-play , +2.5 p.p. yoy – convergence success especially

showing in +14% 4-play HH , at very low churn

– multi-play convergent household, i.e. Fixed + Mobile, grew 3.4pp to 50.1%.

– 1-play HH going down as result of Fixed Voice line erosion

1,163 1,153 1,124 1,099 1,087 1,060

417 408 405 401 394 390

522 519 516 515 515 514

307 323 333 343 356 368

1

1

1

1

1

2

2

2

2

2

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

CBU Households per x-play (in '000)

4-Play

3-Play

2-Play

1-Play

2,409 2,403 2,378 2,359 2,352 2,332

-22

-10

-29

-25

-12

-27-10

-8

-3-4

-7

-4

1

-3

-3

-1

0

-1

12 16 10 11 12 12

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

CBU Households per x-play: net adds of the quarter (in '000)

4-Play

3-Play

2-Play

1-Play

26.0%

19.9% 19.4%20.3% 20.4%

19.4%16.4%

13.5% 13.7% 13.7%12.9% 12.2%

11.3% 11.0%12.3% 11.8%

9.4% 9.7%

7.6% 8.3%9.6%

8.7%6.9% 6.4%

1.2% 1.4% 1.7% 1.7% 2.1% 1.9%

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Annualized full churn rate of a x-play Household

1-Play

Total

2-Play

3-Play

4-Play

Page 18: Belgacom Company presentation Investor Relations

Stable revenue from households - higher ARPU & RGUs offsetting loss in 1-play

Slide 18

– € 374m came from X-play households – 74% from multi-play HH +3.2 p.p. YoY – RGU progressed for all X-play HH – 4-play HH revenue +15.3% YoY due to

growing number of 4-play HH and YoY increase in ARPH to € 103.9

– 4-play revenue growth offset by lower revenue from 1-play and 2-play

108 108 105 100 96 96

60 59 59 57 56 56

108 109 110 108 108 109

91 98 102 104 107 113

..

50000..

100000. .

150000. .

200000. .

250000. .

300000. .

350000. .

400000. .

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Revenues per x-play (in € million)

4-Play

3-Play

2-Play

1-Play

366 374 375 369 367 374

50.2 € 51.9 € 52.3 € 51.8 € 51.9 € 53.3 €

30.4 € 31.2 € 30.8 € 29.8 € 29.3 € 29.9 €

47.3 € 47.8 € 48.1 € 47.2 € 46.9 € 47.4 €

68.8 € 69.9 € 70.6 € 69.9 € 69.6 € 70.9 €

99.6 €103.0 € 103.4 € 102.6 € 101.8 € 103.9 €

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Average Revenue per x-play Househould (ARPH) in €

Total

1-Play

2-Play

3-Play

4-Play

2.15 2.18 2.21 2.24 2.26 2.29

1.14 1.15 1.15 1.16 1.15 1.16

2.04 2.04 2.04 2.04 2.04 2.04

3.12 3.13 3.14 3.15 3.15 3.16

4.52 4.55 4.57 4.60 4.61 4.63

Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14

Average Revenue Generating Unit per x-play Household

Total

1-Play

2-Play

3-Play

4-Play

Page 19: Belgacom Company presentation Investor Relations

Network

Ray Stewart

Slide 19

Mobile – slide 20 Fixed – slide 21

Page 20: Belgacom Company presentation Investor Relations

PROXIMUS brings the overall

best speed experience in Belgium

to its customers

PROXIMUS focuses on bringing the

best optimized experience cross

2G, 3G, 4G technologies and WiFi

PROXIMUS brings the best 4G

experience there where it matters

using the 1800 spectrum:

in the cities and at the coast

Proximus delivering on its brand Customer experience as TOP priority

Best Customer Experience… …across technologies …where it matters…

PROXIMUS focuses on bringing best overall average speed experience to its customers across sum of 2G,

3G, 4G technologies selected by devices. This approach mirrors best the true experience of customers.

Average download speed on 4G capable device 1

18.4 Mbps

14.0 Mbps

11.0 Mbps

Proximus

Mobistar

Base

30% faster average download speed experience

with a 4G capable device vs nearest competition

1 Result based on Q2 2014 national drive test conducted by independent agency CommSquare

Leverage mobile experience through wifi

• 930.000 WiFi hotspots available today for our customers all throughout Belgium (+90.000 vs Q1)

• 13.200.000 WiFi hotspots available abroad (e.g. NL, FR, UK, DE,…)

• By EO 2014, mobile devices of Proximus customers will connect automatically to WiFi when present, bringing true convergence Slide 20

Page 21: Belgacom Company presentation Investor Relations

Mass roll-out well

underway: in Q2 10%

of remote optical

platforms made

vectoring-ready

Majority of regional

industrial zonings in

Belgium are already

equipped with

Belgacom fiber

All new residential

zonings that are

sufficiently large are

by default equipped

with Belgacom fiber

Go-to-market campaign

launched to promote

presence of FTTB in industrial

zonings

Through cancellation of

crosstalk on a VDSL2 line,

Vectoring enables up-to-70

Mbps speeds on copper

Fixed Network - Driving customer experience with new technologies

Vectoring technology on VDSL

FTTH in Greenfields

Deployment of FTTH in new

residential zonings started in

2014 following successful

trials last year

FTTB in Industrial Zonings

30 Mbps

Dynamic Line Management on VDSL2

VDSL2

Vectoring on VDSL2

Vectoring + Dynamic Line

Management for Vectoring

Fiber-To-The-Home (FTTH) &

Fiber-To-The-Business (FTTB)

up-to

50Mbps

up-to

70 Mbps

up-to

100 Mbps

up-to

1000 Mbps Technology evolution

Slide 21

Page 22: Belgacom Company presentation Investor Relations

22

Belgacom Company presentation Investor Relations

Consumer Business Unit (CBU)

Enterprise Business Unit (EBU)

Service Delivery Engine &Wholesale (SDE&W)

Staff and Support (S&S)

Belgacom International Carries Services (BICS)

Q2 2014 results per business unit

Slide 22

Page 23: Belgacom Company presentation Investor Relations

Consumer Business Unit

Ray Stewart

Slide 23

Page 24: Belgacom Company presentation Investor Relations

263 243 254 248263

227251 257

44.7%41.8%

45.9% 43.8%47.9%

40.9%

46.8% 46.5%

30.0%

35.0%

40.0%

45.0%

50.0%

180

200

220

240

260

280

300

320

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

CBU EBITDA (EUR mio) & margin

91 87 89 87 89 89 86 82

77 86 69 74 65 88 65 68

0

20

40

60

80

100

120

140

160

180

200

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Personnel Non-HR

CBU Personnel & Non-HR costs (EUR mio)

157166

142158

132

152134

146

90

110

130

150

170

190

210

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

CBU Cost of Sales (EUR mio)

587 581

553567

549 556536

553

450

470

490

510

530

550

570

590

610

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

CBU revenue (EUR mio)

Consumer - quarterly P&L

Slide 24

CBU expenses positively impacted by accounting alignment for capitalisation of network installation activities & net pos. impact

from HR one-offs; and driven by continued cost optimisation: – Q2’ 14 HR costs: -6.5% YoY

– Q2’ 14 non-HR costs: -8.1% YoY

Q2’ 14 segment result +3.7% YoY or -0.6% like-for-like

– Compared to a -3.0% like-for-like decline in Q1’14

– Like-for-like is excl. accounting alignment for capitalisation of network installation activities & positive net impact from HR one-offs

– Improvement in Direct Margin &Cost reduction efforts

– Regulation impact estimated at € -4m (-1.5%)

Q2’14 Revenue -2.4% lower YoY or -1.8% like-for-like

– Like-for-like is excl. € -3m impact from divestures of Scarlet NL & Sahara Net; in addition est. regulation impact of €-6m (-1.0%)

– Continued fixed Internet and TV revenue growth, offset by lower Voice revenue

– Mobile: Increased terminals sales & stable decline in service revenue

Q2’ 14 Cost of Sales 7.1% lower YoY

– Positive trend from last quarters continued

– Besides regulation (lower MTR in Luxembourg) , the positive impact comes from lower interconnection costs and focus on cost efficiency

-2.4%

-7.1%

-7.3%

+3.7%

-1.8%

Yoy variance on reported figures

Like-for-like yoy variance (excl. impact from divestures Scarlet NL & Sahara Net and one-offs)

-0.6%

Page 25: Belgacom Company presentation Investor Relations

567

-3 -6-5

+2 +5

-12

+1+6

Q2 2013 M&A Regulatoryimpact

Fixed Voice Fixed Internet TV Mobile ServiceRevenue

Subsidiaries Terminals &Others

Q2 2014

553

1,120

-4

-9

-10

+4

+10

-26

+3 +1

H1 2013 M&A Regulatoryimpact

Fixed Voice Fixed Internet TV Mobile ServiceRevenue

Subsidiaries Terminals &Others

H1 2014

1,089

CBU revenues per product group

- Q2’14 revenue -1.8% like-for-like; improving from -2.9% for Q1

Q2 2014

(in mio €)

H1 2014

(in mio €)

Slide 25

-1.8% Like-for-like

-2.4% reported

-2.4% Like-for-like

-2.7% reported

Page 26: Belgacom Company presentation Investor Relations

Consumer - Fixed voice

Line erosion pressured revenue, stable Fixed Voice ARPU; pro-active churn management results in slowing customer loss

Slide 26

Q2’14 Fixed line erosion of -13,000 lines, an improvement versus the prior quarters driven by pro-active churn mgmt.

End June‘14, the CBU Fixed Voice customer base totaled 1,602,000 lines, i.e. -4.3% yoy.

Stable Fixed Voice ARPU

The declining Fixed Voice revenue resulted from the YoY line loss and to a lesser extent from the substitution of fixed traffic to mobile.

105 105 104 103 102 101 99 98

-5.8%-4.3% -5.0%

-1.9% -2.2%-4.5% -4.7% -5.2%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

0

20

40

60

80

100

120

140

160

180

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Fixed voice revenue (EUR mio)Fixed voice revenue (EUR mio) & YoY Variance

-21 -18-26 -19 -20 -19 -19 -13

1,737 1,718 1,693 1,673 1,653 1,634 1,615 1,602

30

530

1,030

1,530

2,030

-50

-30

-10

10

30

50

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Voice line loss & EOP (000)

19.7 20.0 20.1 20.2 20.3 20.3 20.3 20.2

-0.1% 1.0% -0.5% 2.6% 2.8% 1.2% 0.8% -0.2%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Fixed voice ARPU (EUR/month) & YoY Variance

Page 27: Belgacom Company presentation Investor Relations

17-37

2293

38 53 58 48

-80-68

-99 -71 -58 -48 -67 -45

3,748 3,643 3,566 3,588 3,568 3,573 3,564 3,566

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

-100

-50

0

50

100

150

200

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

prepaid postpaid

Mobile growth & EOP (000)

21.6 21.1 19.5 20.6 19.7 19.4 19.0 19.9

-5.1% -5.1%-9.2% -8.1%

-3.0% -3.3%

-50.0%

-45.0%

-40.0%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Blended net mobile ARPU (EUR/month) & YoY Variance

231 220197 205 193 190 183 190

-3.4%-6.0%

-12.8%-14.0%-15.1%-13.7%

-7.0% -7.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

65

115

165

215

265

315

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Mobile Service revenue (EUR mio)Mobile Service revenue (EUR mio) & YoY Variance

Consumer – Mobile Service As expected stable decline in Mobile service revenue sustained; Mobile customer base growing

Slide 27

CBU’s total Mobile customer base end-June’14 numbered 3,566,000 cards

– Firm net addition of 48,000 postpaid cards ; of which 25,000 paying in line with prior quarter

– Mobile Prepaid decline of -45,000 during Q2, of which -11,000 from mvno Mobisud. Proximus prepaid customer losses further improving.

ARPU erosion stabilized – Q2’14 Postpaid ARPU of € 26.7; -4.6% YoY; from -4.8% in Q1’14

– Q2’14 Prepaid ARPU of € 12.6; – 10.3% YoY; from -11.1% in Q1 ‘14

Q2’14 revenue from Mobile Services down 7% YoY; as expected stable decline from previous quarter despite competitive intensity.

– Growing mobile postpaid customer base

– Lower mobile prepaid customer base

– Stabilized decline in ARPU

* Yoy variance adjusted for one-offs

* *

**As of 2014, Belgacom calculates the Mobile ARPU excluding Free Mobile data cards and excluding M2M. 2013 figures have been restated.

***As of 2014, the calculation of active customers is based on the monthly activity rate instead of a rolling average activity rate. The definition of an active customer remains unchanged. 2013 figures have been adjusted accordingly

***

**

*

Page 28: Belgacom Company presentation Investor Relations

Consumer - Fixed Internet Continued Fixed Internet revenue growth; +11,000 customers added in the quarter

Slide 28

Revenue growth driven by growing customer base and price changes.

Broadband customer base +11,000 in Q2’14, in a seasonally slower quarter

Total CBU Fixed Internet customer base of 1,261,000 end-June‘14.

Broadband ARPU of EUR 26.3, slightly down YoY due to increasing number of internet customers in Pack.

85 85 87 89 90 89 89 91

3.8% 3.7% 2.2%5.4% 5.6% 4.9% 2.7% 2.3%

-40.0%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

5

25

45

65

85

105

125

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Fixed Internet revenue (EUR mio)Fixed Internet revenue (EUR mio) & YoY Variance

13 12 107

9

17 1511

1,181 1,193 1,203 1,210 1,219 1,235 1,250 1,261

10

210

410

610

810

1,010

1,210

1

21

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Broadband growth & EOP (000)Broadband growth & EOP (000)Broadband growth & EOP (000)Broadband growth & EOP (000)

26.5 26.1 26.3 26.7 26.9 26.4 26.1 26.3

-0.7% 0.3% -2.2% 0.9% 1.7% 1.2% -0.8% -1.3%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Broadband ARPU (EUR/month) & YoY Variance

Page 29: Belgacom Company presentation Investor Relations

39 46 26 16 19 1730

30

1,340 1,386 1,412 1,428 1,447 1,465 1,495 1,525

0

200

400

600

800

1,000

1,200

1,400

-10

10

30

50

70

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

TV growth & EOP (000)

Belgacom TV

Growing TV revenue through larger TV customer base & slight YoY ARPU increase

Slide 29

Continued customer growth – Total customer base of 1,525,000, including 281,000 multiple streams

– 30,000 net adds: +19,000 new unique customers, 11,000 multiple streams

Q2 TV ARPU of € 19 , i.e. +2.1% YoY

TV revenue +7.1% YoY driven by continued growth of subscribers

*

*As of 2014, pending orders are excluded from the total TV customer base. Q4 2013 TV customer figures have been restated accordingly. There is no impact on the 2013 quarterly net adds and the 2013 ARPU’s

61 62 64 66 67 69 70 71

18.9% 18.1% 16.9% 15.3%10.2% 11.3%

8.0% 7.1%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

15

35

55

75

95

115

135

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

TV revenue (EUR mio)TV revenue (EUR mio) & YoY Variance

18.1 18.2 18.3 18.6 18.7 19.0 19.0 19.0

1.5% 3.9% 4.5% 5.7% 3.1% 4.4% 3.9% 2.1%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

TV ARPU (EUR/month) & YoY Variance

Page 30: Belgacom Company presentation Investor Relations

Tango Luxembourg Impacted by regulated MTR reduction

Slide 30

Q2 ‘14 revenue -12.6% YoY, generating € 28m.

The regulated MTR decrease in Luxembourg (from 8.2cts to 0.98cts) taking full effect in Q2’14 ( € 4m)

Could not be offset by the continued growth of Mobile Postpaid and the developing TV & fixed Internet customer base.

Belgacom extended its convergence strategy to Tango, which now also offers as well a TV and quadruple-play offer.

28 30 2932 32 33

28 28

2.7%8.8% 7.1%

16.8%12.9%

8.2%

-3.5%

-12.6%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

15

20

25

30

35

40

45

50

55

60

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

TV revenue (EUR mio)Tango revenue (EUR mio) & YoY Variance

270 271 273 274 278 280 280 283

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Tango mobile customers EOP (000)

29.5 30.7 30.1 31.1 30.9 32.427.6 27.3

0.9%5.7% 6.1% 6.3% 4.7% 5.3%

-8.4%-12.1%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Blended mobile net ARPU (EUR/month) & YoY Variance

Page 31: Belgacom Company presentation Investor Relations

Enterprise Business Unit

Ray Stewart

Slide 31

Page 32: Belgacom Company presentation Investor Relations

150

163

148 149 146

159151

133

100

110

120

130

140

150

160

170

180

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

EBU Cost of Sales (EUR mio)

268 276 260 263 245 255 248 258

48.0% 47.6% 47.0% 47.4% 45.9% 45.7% 46.0%50.4%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

-5

45

95

145

195

245

295

345

395

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

EBU EBITDA (EUR mio) & margin

102 100 107 105 104 102 10287

39 41 38 37 38 41 3834

0

20

40

60

80

100

120

140

160

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Personnel Non-HR

EBU Personnel & Non-HR costs (EUR mio)

560579

554 554533

557539

512

420

470

520

570

620

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

EBU revenue (EUR mio)

Enterprise – quarterly P&L

Telindus France divesture lowered Cost of Sales – Divesture of Telindus France excluded, the Cost of Sales were up

driven by higher organic ICT sales and Mobile subscriber acquisition costs, resulting in a strong net customer growth for Q2’14

Q2’14 EBU segment result -1.8% yoy, or -2.3% like-for-like – Continued trend improvement from the previous quarters

– Regulatory impact estimated at € -5 m (-2.1%).

– Ex-regulation, segment result fairly stable: lower yoy Direct margin nearly offset by lower expenses

– Q2’14 margin benefitted from divesture of lower-margin Telindus France

Lower expenses , supported by Telindus France divesture – Q2’14 HR- expenses -17.8% yoy to € 87m. The divesture effect

excluded, HR expenses were down yoy on net positive one-off effects, restructuring of Telindus UK and lower headcount in general

– Q2’14 non-HR expenses, -7.2% yoy to € 34m mainly because of the Telindus France divesture

Q2’14 revenue impacted by Telindus France divestment – Like-for-like EBU’s revenue decline improved to -0.6%,

– Mobile services only slightly below Q2’13 & organic ICT up yoy

– Regulation impact estimated at € -5m (-1%)

H1’14 € 1,051 m revenue, -5.1% YoY or -1.7% like-for-like

-7.6%

-10.8%

-15.1%

-1.8%

-0.6%

-2.3%

Slide 32

Yoy variance on reported figures

Like-for-like yoy variance (excl. impact from Telindus France divesture and one-offs)

Page 33: Belgacom Company presentation Investor Relations

554

-39-5 -4 -2

4 4

0

Q2 2013 M&A Regulatoryimpact

Fixed Voice Fixed Internet ICT Mobile ServiceRevenue

Terminals &Others

Q2 2014

512

1,108

-39-10

-7-4

+2 +2

-1

H1 2013 M&A Regulatoryimpact

Fixed Voice Fixed Internet ICT Mobile ServiceRevenue

Terminals &Others

H1 2014

1,051

Enterprise revenue evolution per product group Reported variance impacted by divesture Telindus France Like-for-like variance improving on better mobile & organic ICT revenue

Q2 2014

(in mio €)

H1 2014

(in mio €)

Slide 33

-1.7% Like-for-like

-0.6% Like-for-like

-7.6% reported

-5.1% reported

Page 34: Belgacom Company presentation Investor Relations

Enterprise - Fixed Voice* Stable Fixed voice revenue decline

Slide 34

The Fixed Line erosion in Q2’14 was limited to -13,000 lines, bringing the EBU total Fixed Voice Line customer base to 1,264,000 by end-June 2014, a 4.1% line loss on a yearly basis.

Line loss was partly compensated for by a somewhat higher Fixed Voice ARPU of EUR 29.1, up 1.5% yoy a result of the price indexation.

Fixed Voice line erosion triggered by companies rationalising on Fixed line connections continues to impact Fixed Voice revenue. This negative volume effect was only partly compensated for by price indexations.

Year-to-date June ‘14, EBU reported € 226m Fixed Voice revenue, 3.2% below the preceding year

*revenue from Belgacom Meeting Services (BMS) moved from Fixed Voice revenue to ICT, impacting both revenue and ARPU of Fixed Voice .2013 figures have been restated.

-9-14

-18 -19-13 -14 -15 -13

1,370 1,356 1,338 1,318 1,305 1,292 1,277 1,264

-100

100

300

500

700

900

1,100

1,300

1,500

1,700

1,900

-20

0

20

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Voice line loss & EOP (000)

27.9 28.6 28.5 28.6 28.2 28.5 29.1 29.1

-0.7% -0.1%-2.7% -0.7% 1.3% 0.3% 2.0% 1.5%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Fixed voice ARPU (EUR/month) & YoY VarianceFixed voice ARPU (EUR/month) & YoY Variance

118 119 117 116 113 113 114 113

-2.8% -2.4%-4.9%

-2.9% -3.3% -4.5%-3.1% -3.3%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

0

20

40

60

80

100

120

140

160

180

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Fixed voice revenue (EUR mio) & YoY Variance

Page 35: Belgacom Company presentation Investor Relations

40.4 39.0 36.8 36.3 34.1 34.2 33.0 33.6

-14.8%-13.0%

-15.6%-12.4%

-10.4%-7.4%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Blended net Mobile ARPU (EUR/month) & YoY Variance

155 150 141 142 135 137 135 140

-7.3% -8.9%-12.9%-12.2%-12.2%

-8.7%-4.7%

-0.8%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

0

50

100

150

200

250

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Mobile Service revenue (EUR mio) & YoY Variance

Enterprise - Mobile Service Mobile Service revenue trend significantly improved through larger customer base, growing mobile data volume and slowing ARPU decline

Slide 35

Solid commercial performance continued in Q2’2014: net growth of +45,000 mobile cards

– +32,000 paying mobile voice and data cards (vs. +31,000 in Q1’14) driven by great mobile network experience for customers, successful Bizz Packs and launch mid-February of the Smart 50

– +13,000 Machine-to-Machine and free Mobile Data cards

Mobile ARPU decline slowed to -7.4% YoY for Q2’14 – showing further improvement from the prior quarter.

– effect from mobile customer re-pricing fading

– a growing number of high-end pricing plans in the installed base through successful acquisition actions in that price segment, as well as better retention of high-value customers.

Q2’14 Mobile services revenue trend continued significant improvement – Continuously growing mobile customer base and successful

acquisitions in mid- and high-end pricing plans

– Higher Data roaming volumes

– Regulation impact, estimated at € -5 m

Ytd June ’14, € 275m mobile service revenue, -2.8% yoy * *

* Yoy variance adjusted for one-offs

*As of 2014, Belgacom calculates the Mobile ARPU excluding Free Mobile data cards and excluding M2M. 2013 figures have been restated.

*As of 2014, the calculation of active customers is based on the monthly activity rate instead of a rolling average activity rate. The definition of an active customer remains unchanged. 2013 figures have been updated accordingly

*

*

21 1626 32

3931

64

45

1,470 1,486 1,512 1,545 1,584 1,615 1,679 1,724

1

201

401

601

801

1,001

1,201

1,401

1,601

1,801

2,001

0

20

40

60

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Mobile growth & EOP (000)

Page 36: Belgacom Company presentation Investor Relations

Enterprise - Fixed Data Fixed Data revenue continued to be impacted by migrations to Explore platform; Fixed Internet revenue stable supported by higher ARPU

Slide 36

Fixed Data, consisting of Fixed Internet and data connectivity revenue, -2.2% YoY

– due to a continued migration from older technologies such as leased lines to the Belgacom Explore platform, for which pricing is more favorable for customers

– Revenue from Fixed Internet stable yoy on fairly stable customer base and slightly higher ARPU

Customer base +0.3% compared with June 2013.

EBU added a stable 1,000 Fixed Internet customers in Q2’14, leading to a total customer base of 443,000.

ARPU of € 39.7 (+0.9%) driven by price indexations,

partly offset by SME customers opting more and more for advantageous converged Packs including internet.

-1 -1

1

-2 -1 0

1 1

444 443 444 442 441 441 442 443

30

80

130

180

230

280

330

380

430

-10

11

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Broadband growth & EOP (000)

39.1 38.8 39.0 39.3 39.5 39.2 39.3 39.7

0.0% -0.4% -1.2% 0.9% 1.2% 1.1% 0.8% 0.9%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

0.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Broadband ARPU (EUR/month) & YoY Variance

96 95 96 96 94 95 94 94

-0.8% -2.3% -3.0% -3.2% -1.5% -0.7% -1.7% -2.2%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

0

20

40

60

80

100

120

140

160

180

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Fixed Data revenue (EUR mio) & YoY Variance

Page 37: Belgacom Company presentation Investor Relations

167186 187 188 178

198 185153

2.4% 2.0% 3.6% 1.9% -0.7% -0.2% -1.0%

-18.5%

-90.0%

-80.0%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

0

50

100

150

200

250

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

ICT revenue (EUR mio) & YoY Variance

Enterprise – ICT* ICT revenue impacted by divestment of Telindus France Like-for-like, revenue up by 2.9% vs last year

EBU reported € 153m ICT revenue – Telindus France divestment impacted yoy variance

– Organically ICT revenue grew by 2.9% yoy

– Belux ICT revenue showed YoY growth

Slide 37

Telindus France

*As of 1 January 2014, revenue from PABX is included in ICT. The 2013 figures have been restated accordingly. Previously PABX revenue was reported as part of Fixed Terminals.

On Telindus France: On 30 April 2014, Belgacom disposed 100% of the shares in the Group Telindus France to Vivendi for EUR 86 million net of cash

disposed of and recognized a gain on disposal of EUR 43 million (through non-recurring income).

The Group Telindus France generated pro-forma revenues of € 241m and EBITDA of € 11m in 2013.

+2.9% like for like

58 61 59 59 59 64 5718

Page 38: Belgacom Company presentation Investor Relations

-21 -25-36 -36 -37

-34 -36-27

-60

-50

-40

-30

-20

-10

0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

SDE&W EBITDA (EUR mio)

46 43 43 41 43 40 42 40

41 48 50 52 51 50 49 38

0

20

40

60

80

100

120

140

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Personnel Non-HR

SDE&W Personnel & Non-HR costs (EUR mio)

910 10

9 9 10 9 9

0

2

4

6

8

10

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

SDE&W Cost of Sales (EUR mio)SDE&W Cost of Sales (EUR mio)

75 7667 66 66 65 64 60

33

43

53

63

73

83

93

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

SDE&W revenue (EUR mio)

livery & Wholesale - P&L

Service Delivery & Wholesale – P&L

Slide 38

CoS Q2’14 -6.1%

€ 40m HR expenses for Q2’14, -1.0% YoY on lower headcount

€ 38m non-HR expenses; down 27.3% YoY mainly due to a favorable one-off provision reversal; also lower external workforce costs, maintenance cost optimization

Q2’14 segment result improved YoY partly due to positive one-off provision reversal.

Like-for-like segment result improved by 5.4% YoY in spite of increasing pressured wholesale revenue

Lower Carrier Wholesale Services revenue – new lowered Wholesale roaming tariffs

– only partly compensated for by the volume growth for roaming

– continued erosion of wholesale broadband lines, leased lines and traffic volumes

-9.7%

-6.1%

-15.8%

+24.6%

*

* 2013 figures have been restated to reflect the allocation of Belgacom wholesale revenues invoiced to Scarlet to the Consumer Business Unit segment.

*

Page 39: Belgacom Company presentation Investor Relations

7 1118

7 10

25

7

64

0

10

20

30

40

50

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

S&S Revenue(EUR mio)

4038

40 38 40 4037

35

22

27

32

37

42

47

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

S&S Personnel costs (EUR mio)

49

67

50 50 50 50 5061

0

10

20

30

40

50

60

70

80

90

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

S&S Non-HR costs (EUR mio)

Staff & Support – P&L

Slide 39

Q2’14 revenue of € 64m, including a EUR 46 million capital gain following the completion of 2014 planned building sales within the network simplification project and a litigation settlement (EBITDA neutral).

Like-for-like, the revenue of S&S was stable year-on-year.

HR-expenses lower as result of lower personnel base

Non-HR expenses impacted by litigation settlement (EBITDA neutral)

> 100%

-9.8%

+20.6%

Page 40: Belgacom Company presentation Investor Relations

32 34 33 38 37 32 28 31

31 29 28 27 30 28 30 31

0

20

40

60

80

100

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

Non-Voice Voice

BICS Gross margin (EUR mio)

35 32 35 37 3831 30 34

8.3%7.3%

8.3% 8.9% 8.6% 7.7% 8.3% 8.1%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0

10

20

30

40

50

60

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

BICS EBITDA (EUR mio) & margin

International Carrier Services – P&L

Slide 40

Voice volumes +8.3% YoY

Non-Voice volumes +26.4% YoY

As a consequence of the lower Direct margin & slightly higher operating expenses (HR/Non-HR), BICS’ segment result for Q2’14 was down by EUR 3 million (-8.9%), while the EBITDA margin remained fairly stable at 8.1%.

-4.4% YoY decline in Gross margin – reflects the lower volume of higher-margin Voice traffic to the Asian

region which BICS temporarily captured in 2013.

Q2 BICS’ revenue stable on recovery of voice traffic – trend improvement from the previous quarter (14% down year-on-

year), underlining the volatility of part of BICS’ business.

– driven by material win backs of voice traffic from key customers

– more than offset by the effect of EU-wide decreases in Mobile Termination rates, as well as a negative dollar effect

-14,3%

-4.4%

-8.9%

6,934

7,5567,267

6,701

7,2876,872

6,243

7,259

428

445451

461

540512

499

583

5,200

5,700

6,200

6,700

7,200

7,700

8,200

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

SMS/MMS Minutes

BICS Volumes (in mio)

424 430 417 413 437401

357415

0

50

100

150

200

250

300

350

400

450

500

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214

BICS Revenue (EUR mio)

+0.5%

Page 41: Belgacom Company presentation Investor Relations

For further information: Belgacom Investor Relations e-mail: [email protected] Tel: +32 2 202 82 41