• Revenue Growth: Domestic segment revenue grew by 3.4% for the full year of 2024.
• Domestic EBITDA Growth: Achieved a total growth of 2.8% for 2024.
• Group EBITDA Growth: Annual growth of 3.1% for 2024.
• Adjusted Free Cash Flow: EUR58 million for 2024.
• Internet and Mobile Base Growth: Internet base up by 2%, mobile base up by 2.5% year-over-year.
• Fiber Coverage: Over 2.2 million homes and businesses passed by the end of 2024, covering more than 37% of the population.
• Fiber Customer Growth: Activated 564,000 customers on fiber, with a growth of 45,000 in Q4 2024.
• Residential Revenue Growth: 4.3% growth for the full year of 2024.
• Convergent Revenue Growth: 7.8% increase in Q4 2024.
• B2B Revenue Growth: Fourth-quarter revenue increased by 2.1%.
• Proximus Global Direct Margin Growth: 16% increase in Q4 2024 for Communications and Data.
• Proximus Global EBITDA Growth: 6.6% year-over-year increase.
• Capital Expenditure: EUR1,355 million for 2024.
• Debt Ratio Expectation: Expected to be around 3x for 2025.
• Dividend Expectation: Stable gross dividend of EUR0.6 per share for 2025.

• Warning! GuruFocus has detected 5 Warning Signs with BGAOF.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Proximus SA (BGAOF) reported a 3.4% revenue growth for the full year of 2024 in its domestic segment, exceeding expectations.
• The company achieved its bold 2025 target one year earlier, with a total domestic EBITDA growth of 2.8%.
• Proximus Global saw a 16% increase in direct margin growth for communications and data in Q4 2024, contributing to a 6.2% EBITDA growth for the full year.
• The company expanded its fiber coverage significantly, passing over 2.2 million homes and businesses by the end of 2024.
• Proximus SA (BGAOF) secured several significant B2B deals, including a seven-year cybersecurity contract worth over EUR100 million with the Belgium Federal government.

Negative Points

• The company faces challenges from new market entrants like Digi, which could impact its competitive dynamics.
• There was a 4.4% decline in mobile services revenue and a 7% drop in fixed voice revenue in the B2B unit.
• Proximus SA (BGAOF) experienced higher operating expenses due to factors like inflation, customer-related expenses, and transformation costs.
• The adjusted free cash flow for 2024 was EUR58 million, slightly lower than in 2023.
• The company anticipates continued cost pressures, including inflation and customer-related expenses, which may impact future financial performance.

Q & A Highlights

Q: How is Digi's fiber rollout impacting Proximus, and what are the competitive dynamics and pricing effects? A: Guillaume Boutin, CEO, stated that Digi's fiber rollout is limited and has not significantly impacted Proximus. The company has effectively managed price increases and does not see a significant churn effect, especially on the premium Proximus brand. The competitive impact from Digi is manageable, and Proximus expects domestic revenue to remain stable.

Q: Can you elaborate on the fiber JV strategy and network filling rate? A: Guillaume Boutin, CEO, clarified that there are no plans to replicate the North's strategy in the South. The network filling rate has grown by 4% annually, and as fiber deployment slows, the filling rate is expected to accelerate. The current focus is on maintaining a high deployment speed while increasing network utilization.

Q: What is the status of the fiber cooperation agreement with Wyre, and what are the CapEx implications? A: Guillaume Boutin, CEO, mentioned progress in Flanders with a potential market test by Q2. In Wallonia, discussions are ongoing with an expected agreement by year-end. Mark Reid, CFO, noted that CapEx for 2025 is projected at EUR1.3 billion, reflecting efficient deployment and cost management.

Q: How is the churn from Digi affecting Proximus brands, and are there any shifts within the brand portfolio? A: Guillaume Boutin, CEO, indicated that alternative brands like Mobile Viking and Scarlet are more exposed to churn, while the premium Proximus brand remains stable. There is no significant shift from the Proximus brand to lower-tier brands, as the price difference justifies the premium service.

Q: What are the expected synergies for Proximus Global, and how does natural churn in FTEs affect cost management? A: Mark Reid, CFO, stated that Proximus Global expects to achieve EUR100 million in synergies, with more visible results in 2025. The natural churn in FTEs provides cost management opportunities, with a projected 1% reduction in 2025, offering flexibility for future efficiency improvements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.