Hello, and welcome to the Proximus Financial Results 2024 Quarter One. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you'll have an opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. If you require assistance at any point, please press star zero, and you'll be connected to an operator. We have Guillaume Boutin, the CEO, joined by Mark Reid, the CFO. I will now hand over the call to your host, Nancy Goossens, Investor Relations Lead, to begin today's conference. Thank you. Thank you. Welcome, everyone. So yeah, thank you for joining us. We will start this webcast with the usual introduction by the CEO, Guillaume Boutin. He's gonna use the presentation that we have published this morning on the website, and then we will turn to the Q&A. And so indeed, for the Q&A, we also have the CFO, Mark Reid, joining us, as well as Jim Casteele, the Residential Segment Lead, as Anne-Sophie Lotgering, the Business Segment Lead, and Ben Appel, our Corporate Affairs Lead. So they will take your questions in a moment, but first, Guillaume, I'll turn the word to you for the introduction. Thank you. Thank you, Nancy. Ladies and gentlemen, welcome to this Proximus webcast. Let me take you through the highlights and overview of financial and operational achievements of the quarter. First, the highlight of the first quarter, starting with a view on the financials. First three months of 2024 mark an excellent start to the year for us. Let me highlight a few achievements and go in more detail later in this presentation. To start with, we are proud of our continued strong commercial achievements, this in an evolving competitive environment. In combination with sound value management, we achieved to grow our domestic revenue by 4.5%. This was combined with ongoing cost efficiencies efforts. Shown on the slide, the positive EBITDA trend we initiated one quarter back, accelerating in the first quarter to a 4.7% growth. For our international segment, while facing some top line headwinds, we grew direct margin by 0.6%. With OpEx coming down, the international EBITDA grew by 8.6%. Leads to our group EBITDA, which came in strong at EUR 454 million, an increase by 5% from the previous year. The CapEx in the first quarter came down from one year back. The CapEx related cash out, combined with in-year timing effect in working capital, resulted in an adjusted free cash flow of negative EUR 112 million. Turning to our major investment program, the rollout of fiber. In March, together with our partners, we were deploying fiber in a total of 159 cities and municipalities, so an additional of 12 cities over the first three months of the year. While our fiber deployment journey continues, we also continue to work hard towards achieving fiber cooperation agreements, following the supportive comments by the Belgian regulators in October 2023. We shared this is a topic that many would like an update on, but hope you understand that we will not make any further comments on this at this stage. Over the period, January, March, we passed an additional 92,000 homes, coming back from a seasonally high fourth quarter. The composition is, however, changing as we anticipated, with lower own fiber builds and the contribution of our fiber JVs increasing. We are now passing more than 1.8 million homes and businesses with fiber. In addition, we have a funnel of 320,000 living units with fiber in the street coming from our JVs. This included our fiber-in-the-street coverage was 36% at end March. In terms of gaining active fiber customers, we closed a great quarter, adding another 44,000. This brings the total of fiber customers now to 441,000. The success of fiber is also reflected in a strong migration rate, remaining at a substantial 70% level. Turning to mobile, we were delighted to have received once more recognition for the premium quality of our mobile network. In March, the BIPT published the results of its annual testing campaign, in which the Proximus network clearly comes on top with unparalleled download speed for both 4G and 5G. Not only we want to offer the best networks, but we also want to offer the best services. Recently, we have launched a new version of our app, turning the MyProximus app into Proximus Plus. This new app really brings the digital interaction to the next level, making it easier to use, and we have also added a range of new services around mobility, neighborhood life, cashback, just to name a few, in cooperation with some partners. At the last point of this section, a quick update on where we are in the acquisition process of a majority stake in Route Mobile. Over the past few months, we have made good progress with, one, having obtained all required clearance, and two, launching the MTO. In time, the MTO tendering period is completed, and we are very pleased that roughly 15.8 million shares for public shareholders were tendered. This means that the Proximus holding in Route Mobile is expected to be roughly 83%. In line with Indian regulation, we bring our sharing back to 75%, the 12-month period post-closure, and keep 25% listed on the Indian stock market. Note that the progress to determine the valid bids received is still ongoing, so the final outcome will be in May, when we expect to close the transaction.... Let's now move to the financial and operational results of the first quarter, starting with our domestic segment. As pointed out at the start, we are pleased, very pleased to have achieved another three quarters in terms of customer growth, supported by our product superiority and multi-brand strategy. This is especially valid for the residential customer growth. Indeed, we grew our residential customer base by 29,000 for mobile postpaid, 11,000 for internet, and 17,000 conversion customers. Thanks to our sustained commercial performance and the support from our price indexations, we continued the strong revenue trend with total residential revenue up by 5.9% year-on-year, and services revenue up by 6.5%. Zooming in on the residential services revenue, with a graph on the left providing some backward-looking data. The steady improving trend towards the strong 6.5% revenue growth we have announced today was achieved thanks to the significant investments that we have done over the past years. Think of the network investments, the efforts to improve overall customer satisfaction, our multi-brand strategy, and the efficient value management. Success of our value management is illustrated in this slide. We succeeded in having a sound balance between pricing and keeping strong customer growth, without it meaningfully impacting our customers' churn levels. All in all, this is translating to a revenue uplift by 6.5% for the residential services in general, and 10.9% for the revenue from convergence services. As for our business unit, here, too, we closed the first quarter with strong revenue growth, up by 3.1%. This was mainly driven by continued growth in services revenue, but product revenue, too, was up by EUR 4 million. Taking a closer look at the business services revenue, you see the strategic progress we are making in this area. With revenue from IT services now up by 7.8%, many thanks to the success of our smart network, cloud security, and smart mobility business lines. This, along with a continued good growth in fixed data services, while keeping mobile revenue roughly stable and the fixed voice revenue erosion fully contained. While we are proud of these results we have already achieved, we are further executing on our B2B strategy to strengthen our IT leadership position in the Benelux market. A major step was taken in February with our announced intention to integrate our B2B IT activities into a dedicated affiliate. Over the past months, we have engaged in dialogue with our social partners, and we are pleased to confirm that we can implement this transformation as of the first of July. Finally, our wholesale unit, for which the year-on-year revenue decline remains mainly the result of the ongoing decrease in interconnect revenue, with no meaningful margin impact. This brings me to the total domestic revenue, for which we achieved a sustained strong growth, up by 4.5% for the first quarter, driven by a 4.9% increase, sorry, in services revenue. Turning now to the domestic operating expenses. In line with our expectation, we still face some inflationary cost effects. Moreover, the ongoing strong commercial momentum also drives customer-related OpEx. Thanks to our ongoing cost efficiency program, we could in part offset the cost headwinds. Overall, first quarter OpEx was up 6%, with the year-on-year trend moderating from previous quarters, having passed the inflationary peak. This brings me to the total domestic EBITDA, showing a nice growth year-on-year of 4.7%, strongly supported by the increase in direct margin. Turning now a moment to the international part of our results. For the first quarter, through our two brands, BICS and Telesign, our international segment posted a slight increase in direct margin of 0.6% year-on-year, despite a -10.3% revenue decrease. Supported by good cost control, the EBITDA was up 8.6% to EUR 30 million. In view of our integrating international ambitions, we aligned our international segment reporting with focus on the nature of delivered services. Let's first take a closer look at communications and data. For the product group, communications and data services, the direct margin increased year-on-year by 0.9%. This resulted from growth in digital identity, mobility, and omni-channel CPaaS services, in part offset by the impact of lower SMS volumes. While the industry trend from SMS to OTT channels continues, it also creates some opportunities. In response to the rising SMS cost and the escalating threat of cyber fraud, Telesign launched Verify API. It's a new omni-channel API, which integrates the leading user verification channels, such as SIM verification, email, OTT on top of SMS, all this into a unified platform. The product group, P2P voice and messaging, posted fairly stable direct margin, while revenue was down. Remind that in the voice trading business, the goal is to maximize the direct margin, while the revenue can be volatile. With BICS, we are keeping a strong strategic position on profitable destinations in an inherently declining voice market. This brings me to the group results. This slide sums it up for the group, with a strong performance in domestic in the first quarter, driving the group revenue and direct margin increase. Overall, the group EBITDA grew by 5% year-on-year. Turning to the group CapEx with EUR 294 million for the first quarter, down from the previous year by EUR 17 million. Large part of the CapEx is fiber-driven, with besides the fiber build, also CapEx occurring to connect and activate our fiber customers. As shown on the highlight slide, the adjusted free cash flow was negative by EUR 112 million. Compared to one year back, the main moving part is a change in working cap, which is very much an in-year phasing effect. On the positive side, we see this being partially offset by the growth in the EBITDA and the decrease in cash CapEx. To conclude, we started the year strongly, and therefore, it's with great confidence we can reiterate the guidance we set for 2024, in spite of the anticipated changes in the domestic market structure of Proximus. With this, I have covered my introduction, so we can now turn to your questions. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the first question from line, Roshan Ranjit from Deutsche Bank. The line is open now, please go ahead. Oh, great. Afternoon, everyone. Thank you for the questions. I've got three, please. Firstly, Guillaume, you mentioned the strong EBITDA performance this quarter. I guess we have the support of the price, two price increases, which I think will continue into Q2. If we then look at your full year guidance for up to 1% growth, again, I appreciate that we do have this new entrant launch in the second half of the year. Do you feel that there is an element of conservatism in that guidance? And what have you kind of baked in for Digi? Now, we know that it's a H2 launch, but is that in the beginning or later in the year? Any details you could give around there would be useful, please. You mentioned the working capital and the charts, free cash flow bridge, very useful. How should we think about that for the rest of the year? Do you highlight phasing? So should we expect that to reverse come the end of the year? And finally, I know you're not saying anything on the details around the co-investment, but are we still working towards this May timeframe to hear anything from the regulator on that front? Thank you. So I'll start with your first question on the strong start of the year. So indeed, we are, you know, extremely pleased with Q1. It's a great start into the year. We even exceeded our expectations that are already high for Q1, but it's still the start of the year. It's still only three months into the year, so it's a bit too early to revise anything. But as I said, I think momentum is there. We are growing on all fronts. Commercial momentum has never been as good as since a few quarters now, it's continuing. So we are pleased with the momentum we're having, but still, you know, too early, only three months in the year. So we see how it does evolve and see, you know, what, how we will continue the year. But indeed, it's a very good and strong start into 2024. And we are extremely confident, you know, to meet our guidance. That's what I can say at the moment, but we'll see how it further evolve going forward. Hey, Roshan, thank you for the working capital question. So yeah, clearly, the Q1 is a timing effect. So we effectively had an AR build up, three elements there. Timing of holidays in terms of the consumer billing cycle affected that slightly. The revenue growth on both consumer and enterprise being positive also led to AR build up. We had some AP, a cash payable timing phasing in Q1. And then, I think I talked last year about the inventory build up. So we had a very good inventory trend last year. Again, with the success of the top line, we had slightly heavier inventory in Q1. So I think it's all timing related, and as you can expect, this will get better through the rest of the year for adjusted free cash flow. On the fiber collaboration, I think it's difficult for me to further comment. I think we are still working, discussing, but it's difficult for me to say more than that at that moment. Great. Okay. Thank you. Thank you for the answers. Just to follow up, Guillaume, sorry, can we confirm that Q2, you know, you'll also benefit from the price increases that impacts Q1? So, you know, you increased prices in July last year and, January, this year. So that will be a further tailwind through Q2, yes? As we say, I think we have a great momentum, very good start into the year. Let's see how it evolves, and we'll come back to you. Okay. Thank you very much. Thank you. We will take the next question from David Vagman from ING. The line is open now, please go ahead. Yes, thanks very much for taking my question, and good afternoon, everyone. First, on the international segment, can you explain the sort of model and the -- probably it's not appropriate, but, between BICS and Telesign, and you say you're mentioning that you're using two brands, so BICS and Telesign. If you can come back on the governance evolution there, what it means? And a very quick follow-up on this first question on international. You mentioned that in P2P voice and messaging, the some telecom operator settlement that supported the margin, if you could quantify them, please?... Then second question on the net debt on a EBITDA guidance, for this year, the 2.7, to which extent are you dependent on, on these proceeds, that I think you mentioned at, during this CMD? And last question, a bit more anecdotally, I do, I'm aware. I've seen quite, let's say dynamic, outdoor advertising in Brussels, and it's all digital. On your own discount, full year discount, you know, EUR 300 for, for fiber, and then, so on the Proximus brand, and then Orange Belgium also reciprocating with, with, EUR 299 discounts. We also saw Digi, rolling out some more fiber routes. Could you explain how you view the commercial situation in Brussels? Thank you. First question. I didn't get the first question. Can you repeat your first question, please? Yes, sure. Rationale for the new reporting on international, what it means actually to have BICS and Telesign sort of merged. You're mentioning that there are no brands. Can you explain the governance, or it's evolving? So I think this is a way we look at the business now. I think it's important to understand that there is a lot of positive externalities in between the different business lines of our international activities. There is a lot of things that you can bring together when you consider the different business lines of BICS and Telesign, and tomorrow, when after closing Route Mobile. So we want to have, you know, one team, one culture, one ambition, one product roadmap, one go-to-market approach that are combining all the strengths of the group. That's the way we want to deal with the steering of those activities going forward. So we will focus on business line, indeed. As I said, when we announce the transaction between Route and TeleSign, we say, Rajdip is going to be in charge of CPaaS, and Christophe will be in charge of DI. And then we are not talking about legal entities anymore. We are talking about business line and the way we can maximize the value creation of those different business lines. And that's the way I want the management to look at our businesses and to run the company. So way more, so that we can, you know, maximize the synergies and the positive externalities in the different activities of the Proximus group going forward. So that's the main reason why we also adapted the reporting, the way we do report our numbers going forward. The same question. On the P2P voice, David, that's again, an ongoing reconciliation that always goes on between the P2P voice and the operators throughout the world. Something that happens constantly through the quarters. The number is a low single-digit million EUR, so it's not material at the Proximus group perspective. Yeah, and that's it. That's all there is to it. Thanks. Thanks, Mark. Thank you. We will take the next question from Nicolas Cote-Colisson from HSBC. Oh, sorry, sorry. Sorry, there's the debt question as well. I, again, David, sorry, I missed that one. In terms of the overall impact on the disposals on the net debt, it's not significantly material on the net debt number, so. And then on the Brussels company situation, so it's good that you noted that we have a nice marketing campaign, so thank you for having noticed that. But I'll let Jim answer your question. So, David, indeed, thanks for the question. So, what we typically do is we vary a bit the way that we are explaining our promotions to our customers. So sometimes we mention the discounted pack price, the monthly fee. Sometimes we mention the discount you get per month on the pack price, and then sometimes we mention how much the value is over the period of the promotion. And we play with that to make sure that we have maximum impact on the campaigns that we're doing. And the fact that you have noticed this shows that this is actually working. But you—this is not a change in promo strategy. We're not being more aggressive than before, our promo strategy varies quarter by quarter, but we're not being more aggressive than we normally are. I think we can turn to the next question now. Hello? Hello, can you hear me? Hello. Can we turn to the next question? Hello. Hello, hello. Hi. We have opened up the line for Nicolas Cote-Colisson. Yes. Are you able to hear? Yeah, can you hear me now? Nicholas, I think we can hear you now. Oh, okay. Thank you. Look, I've got a few questions on the international segment and Route Mobile. Maybe starting with Route Mobile, can you just confirm where we are in the different steps? I understand the mandatory offer is done, but has the transfer of the 57-something% of Route Mobile from the founders been achieved? So that's my first one. Secondly, on the governance, back to the governance, I think you have now a new executive committee. If you can tell us a bit more how it is formed, who is in there, and I'm not sure you can easily answer that one, but if you can explain what happened at the BICS and Telesign with all the management changes and departures, what was the underlying issue? The very last one, still on the international segment, I can see a delta between the new revenue compared to the BICS plus Telesign previously. Is the lower revenue just a function of intercompany revenue being eliminated? On the executive committee, I'm not sure how you came to that conclusion, but there has been no change at all for the executive committee of the company. So can you be more precise? Yes, I can. It's more the executive committee for the international segment, which I understand is a new thing, which is part of the new governance, or I got it wrong? Okay. But that's more operational committee, so, you know, so that- Yeah. Yeah. Yeah. Absolutely. Yeah. Okay. Okay. Sorry. So there is for, just for the classic- Oh, because I said governance. Got it. Yeah, no change, no change in the executive committee of the company. So that's clear. And so you have two more personnel committees that will be created, one for domestic operations with an extended, you know, number of persons joining that committee, and the same for international activities. It will be DMC, Domestic Management Committee, and IMC, International Management Committees, where you're gonna have also Rajdeep, Christophe, and the BICS managing director that will be joining that committee, so that we can steer our domestic operations and our international operations, the changes that we have made, and that's what we'll put in place as soon as Route Mobile closes. Okay, David, Nicholas, sorry, let me take the process point. You're correct. MTO concluded a few days ago. In terms of the transfer of the shares from the owners, we expect that to happen before mid-May. And that's, you know, we're effectively just an administration process of the funding and various steps to make that happen. So that's a clear... We have a clear path now to ownership. And then on your question on the BICS, Telesign, you're correct, it's just the eliminations is the difference, so. Okay. And if I may follow up, so okay, for the 57%, I understand that, and the reinvestment of the Route Mobile proceeds- Yeah into the holding is also part of this mid-May process? So, the process is effectively a two-step process, so a three-step MTO is closed. We go through the various pre-closing conditions. The acquisition of the share, the funding and acquisition of the 58% will happen before mid-May. Mm-hmm. And then there's a funding period in terms of the cash coming back, but again, it will come back within weeks in terms of closing the full transaction with the reinvestment back into Opal by the Gupta family. Okay. So that's very clear. And if you allow me just an extra one, which is more housekeeping on my side. Just on the, at the group level, the leases charge has increased in Q1 with closer to EUR 28 million and the EUR 24 million we used to have. Is it something... What has changed? Is that, should we assume now EUR 28-30 million per quarter? It's just various operational changes in terms of fleet and equipment leases, specifically, I think it's probably on some of our IT infrastructure. So, yeah, I think that's a reasonable forward-looking number. Okay, I'm done. Thank you very much. So on the- Thank you. On the, sorry, I have not answered the last question you asked, Nicolas. I think this is on the management changes. I think- Oh, yes. Yeah. I wasn't sure you wanted to answer, so Well, I you know, I can. There is no with pleasure, I would say. No, the first, they are not, you know, they are not related. There is two event that are not related on the some members of the Telesign agency that decided to leave, you know, for various reasons. And also the change at the BICS side, which, you know, for incompatibility on strategic vision, that we decided to change there. But there is, you know, first it's not related events. And then we, now we as I said, now we want to have one team, one leadership team, one vision- Mm-hmm ... one approach, and sometimes it creates some different viewpoints in between teams. So that's why we want now to have a way more integrated approach to the way we are steering on our internal activities. And that will, that we will explain also to you in a few weeks after the closing of the Route Mobile, Telesign transaction, we will organize a Capital Markets Day, our capital markets update on our vision, ambition, and the way we now govern those internal activities within the Proximus environment. Okay, that would be great. Looking forward to the excitement of building a new model again. Thank you. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We'll take the next question from line, Kris Kippers from Degroof Petercam. The line is open now, please go ahead. Yes, good afternoon. Thank you for taking my questions. First one, on the guidance, I'm just wondering, coming back on the initial question a little bit, is this not raised yet due to one, because it's early in the year, or two, the uncertainty surrounding Digi when they launch, or three, are you cycling tough comps in the second half? Then my second question would be on the free cash flow, just to make sure the CapEx that is down in Q1, could you share with us a bit of the phasing throughout the year? Then a third small question, if you look at the decrease in the workforce, given the aging of the personnel in Belgium, what would be the percentage that would be leaving the company in a natural way over 2024-2026 period, for example? Thank you. So on your first question, I think it's more number one, but as I said, we are super happy with the start of the year. Momentum is great, networks, superiority, best brands, co-commercial momentum, both on consumer and B2B. So momentum is great, but you know, we still only three months into the year, so I would, I would rather you know, choose your number one. Okay, clear. Chris, on free cash flow, again, look, we don't guide, but I think, you know, as I said, you know, Q1 was impacted by the buildup of AR, a little bit of inventory AP. So again, it's gonna get better from here on in. So I think that's, you know, that's what you can model. Again, trying to pick free cash flow by quarter is a difficult thing to do, which I understand, you know, you guys try to do. On workforce, again, between here and 2026, again, you know, we haven't given guidance, but, you know, there is a, as Guillaume has said in several calls, you know, we have a pension rate that is going to increase over that period of time. I think, again, you know, 10%-12%, maybe that's, that's something you could, you could think about, as a, as a number over that period. Okay, thank you. Thank you. There appears no further question in the queue. Thank you all very much, for your questions, and should you have any follow-up calls, you can reach out to Adrien or myself. Thank you. Thank you for joining today's call. You may now disconnect.