Solid mobile service revenues with +7.2 % restated EBITDA growth in Q3 lead Orange Belgium to upgrade its 2016 guidance
Clear focus on convergence and customer experience
Brussels, 21 October 2016 – Today, the Orange Belgium Group (Euronext Brussels: OBEL) publishes its results for the third quarter and first nine months of 2016. Following the rebranding and the national launch of the Orange Internet + TV offer in Belgium in the second quarter of 2016, Orange Belgium maintains an intense and sustained activity in the third quarter of 2016 with the launch of a new convergent and data centric mobile portfolio. In the third quarter of 2016, the Orange Belgium Group succeeded in realizing a solid restated EBITDA (+ 7.2 % year-on-year), supported by stable mobile service revenues and a constant focus on cost management, more than offsetting 13.0 million euros EU roaming impact.
In the third quarter and first nine months of 2016 the Orange Belgium Group realized a total turnover of 311.1 and 919.8 million euros, an increase of 1.7 % and 0.8 % year-on year (+6.2 % and +2.9 % underlying growth once adjusted for the 13.0 and 19.2 million euros EU roaming impact). This performance has been fuelled by a solid growth in mobile service revenues of 5.2 % and 3.9 % year-on-year in the third quarter and first nine months of 2016 once adjusted for EU roaming, reflecting both a growing postpaid customer base (+57.3 thousand) and sustained postpaid ARPU evolution (+1.5 %) in Belgium, compared to September 2015.
In combination with the positive development of the top line, a tireless focus on cost management allowed the Orange Belgium Group to absorb the fixed costs related to the cable launch and the adverse impact of EU roaming. The restated EBITDA amounted to 92.2 and 237.1 million euros in the third quarter and first nine months of 2016, equivalent to a 7.2 % and 4.0 % growth year-on-year. The Group pursued its efforts on cost transformation in the third quarter of 2016 that translated into lower commissions paid to third-party distributors, a reduction in labor costs and a further decrease in IT and network expenses. This operational performance, in addition to the mobile capex normalization, led to a net financial debt to EBITDA ratio of 0.9x from 1.7x a year ago, reflecting a strong operational cash flow in the third quarter of 2016, up 38.9 % year-on-year or 25.2 % year-on-year in the first nine months of 2016.
Both the postpaid customer base and ARPU have now increased for six consecutive quarters. In a competitive and promotional market, Orange Belgium’s postpaid customer base grew by 3.5 thousand customers in the third quarter of 2016, ahead of the launch of Orange Belgium’s new mobile and convergent portfolio. For the first nine months of 2016 Orange Belgium added 29.7 thousand postpaid customers. Furthermore, 4G adoption amongst Orange Belgium’s customers continued with an increase of close to 100 thousand active postpaid 4G users in the third quarter of 2016. Supported by the continued increase of 4G smartphone penetration and mobile data usage, the postpaid ARPU increased further to 28.8 euro in the third quarter of 2016, an increase of 1.5 % year-on-year, in spite of the impact of EU roaming regulation, reflecting the ability to upsell tariff plans and to monetize mobile data growth.
As a result of this strong financial and commercial performance over the first nine months of 2016, the Orange Belgium Group is upgrading its restated EBITDA guidance by 10 million euros for the 2016 financial year by revising the guidance to ‘between 280 and 300 million euros including 15 million euros cable costs’ from ‘between 285 and 305 million euros excluding cable costs’ previously.
Michaël Trabbia, Orange Belgium’s Chief Executive Officer, commented: “In the first nine months of 2016, with the rebranding from Mobistar to Orange and the successful national launch of the Orange Internet + TV offer, we laid the groundwork of our strategic ambition to become a convergent operator in Belgium. Our momentum in the third quarter of 2016 confirms our ability to monetize mobile data and to progressively attract new customers through our qualitative convergent proposition, which brings the most value to the Belgian customers. The purpose of our new mobile and convergent portfolio is to meet the increasing data usage of our customers, while creating a more consistent upsell dynamic.”
Commenting on the recent announcements and changes in the management team of Orange Belgium, Michaël Trabbia added: "I'm very pleased with our new executive team, who will translate our strategy into action and brings together a solid staff of talented and committed people.”
Further to these appointments, Jan Steyaert, Chairman of Orange Belgium’s Board of Directors, stated: “On behalf of the Board of Directors, I would like to express our full confidence in the new management team to turn the promising convergence launch into a winning strategy.”