Brussels, 21 October 2013 – Today, Mobistar (Euronext Brussels: MOBB) publishes its results for the first nine months of 2013. These results are in line with its forecast and reflect the commercial decisions taken earlier in the year. The repricing actions introduced in the second quarter of 2013 and the proactive migration of Mobistar customers towards the more preferential Animals tariff plans continue impacting revenues and EBITDA. Mobistar keeps focusing on transforming its organisation and adjusting its cost base to mitigate the impact from these challenging market conditions. Mobistar reiterates its full year 2013 guidance.
At the end of the first nine months of 2013:
· Mobistar has rounded the cape of 5,000,000 mobile cards connected on its network in Belgium. The solid growth of the Mobistar M2M and MVNO activities is the key driver for the increase in Mobistar’s network market share.
· Mobistar’s pre- and postpaid subscriber base was marked by an increased level of churn in a volatile market, partly compensated by a solid gross adds performance.
· 88.2 % of Mobistar postpaid customers opted for Mobistar’s most recent and attractive Animals tariff plans. The majority of these customers opted for an integrated mobile data bundle. The part of mobile data in the mobile service revenues amounted to 47.2 %, while advanced mobile data represented 17.3 %. The number of smartphones connected on the Mobistar network has increased by 66 %.
· Mobistar follows with great interest the evolution of the wholesale cable regulation in Belgium and expects conducive market conditions that allow a healthy and fair competition in the fixed market.
· The Mobistar group recorded a total consolidated turnover of 1,104.4 million euros, down 8.0 % compared to the previous year. Without the regulatory impact of 44.7 million euros, the total consolidated turnover would have recorded 1,149.1 million euros, or an erosion of 4.2 % compared to the previous year.
· The Mobistar group recorded an EBITDA of 270.0 million euros, a decrease of 26.9 % versus the previous year. The EBITDA margin on service revenues is 28.1 %. Without regulatory impact, the EBITDA would have amounted to 295.9 million euros.
· The investments made, mainly network related, are ramping up and amounted to 115.7 million euros, an increase of 14.6 % compared to the same period of 2012. Mobistar will open up its 4G network before the end of 2013 and will launch commercially at the beginning of 2014. Following the recent network improvements, Mobistar confirms its position as the main challenger in the Belgian mobile market in terms of connected SIM cards but certainly also in terms of network quality, as shown by the recent drive tests conducted by the independent research agency Commsquare.
· Considering the realized EBITDA and the investments made during the first nine months of 2013, the operational cash flow amounted to 154.3 million euros, a decrease of 42.5 % compared to the same period of 2012.
‘Mobistar is in the midst of the execution of its transformation plan, 2013 has until now been a year of investing in our fundamentals, i.e. the relationship with all Mobistar customers and the further optimisation of our network’, said Jean-Marc Harion (CEO), and Ludovic Pech (CFO) added: 'Our top line performance in the first nine months of 2013 is a reflection of the challenging market environment in mobile. At the same time Mobistar keeps focusing on enhancing the efficiency of business operations and reducing the cost base’.
1- Key facts:
In the first nine months of 2013, the Belgian mobile market continued to be impacted by the reduction of the contract duration period following the entry into force of the new Telecom Law in October 2012. The collateral damage of this modification in market practice has a more outspoken and prolonged effect than assumed at the beginning of the year. The total market volume of customers switching from one operator to the other is coming down, but at a very slow pace, consolidating above historical levels. The first half of the year has markedly been characterized by a high level of commercial activity around postpaid smartphone tariffs, while based on the start of the second half of the year, it seems the market entered a stabilisation phase with a more segmented approach.
The Mobistar group reaffirms its commitment to its four strategic programmes:
Reinforcing its leadership on the mobile market:
· In the course of the third quarter of 2013, Mobistar concluded the upgrade of its radio access network, with more modern and higher performance equipment of Huawei. The roll-out of UMTS in the 900 MHz band increased the indoor coverage in 3G from 70 % to 84 % within a period of 9 months. This resulted in a clear improvement of the overall customer experience, as testified by Mobistar’s residential, business and MVNO customers.
· In the course of September 2013, Mobistar filed its application with the Belgian regulator to participate to the 800 MHz auction of three blocks of each 2x10MHz that will take place as of November 12, 2013. The 800 MHz auction is an important next step in the deployment of Mobistar’s strategy.
Developing services that are accessible everywhere and at all times:
· In August 2013, Mobistar was the first provider in Belgium, and also the first within the Orange group, to launch the new service ‘Mobile operator billing’, allowing customers to pay for content on Google Play™ via mobile invoice or prepaid card credit.
· The final decision on the qualitative aspects of the cable regulation has been published on September 9, 2013, after the approval given by the European Commission. The outcome of this final decision was a further simplification of the technical & operational processes. Mobistar follows with great interest the evolution of the wholesale cable regulation in Belgium and expects conducive market conditions that allow a healthy and fair competition in the fixed market.
Offering the best customer experience on the market:
· Mobistar was present at all big summer events with supplementary infrastructure that enabled a tenfold of the 3G capacity and an increased coverage, resulting in excellent customer feedback. In most cases Mobistar carried the most minutes of voice, number of text messages and megabytes of mobile data of all operators.
· In July 2013, Mobistar completely upgraded the customer zone on its website. Besides a better design and a richer content, the customer zone has become a dynamic and interactive platform, allowing for a tighter and more efficient one-to-one relationship with the Mobistar customers.
Managing the company costs in the most efficient way:
· At the end of September 2013, the total gross savings realised within the framework of the 60 million euros of ACE1, launched in July 2012, amounted to 51 million euros.
· Mobistar reconfirms its commitment to reducing its cost structure by 50 million euros per year as of 2014, thanks to its efficiency programme ACE2 and to the systematic improvement of all company processes. As announced in May 2013, Mobistar achieved a smooth phase out of its satellite TV service in September 2013. This company-wide project is an important contributor to realize the ACE2 objective.