Hello, and welcome to the Proximus Q1 Results 2025 Analyst conference call. My name is François, and I'll be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I will now hand you over to Nancy Goossens, Investor Relations Lead, to begin today's call. Thank you. Thank you. Welcome, everyone. Thank you for joining the Proximus Results Webcast. We will start with our presentation, and as per usual, we will address any question you may have after. The presenters for today are the CEO at Interim, Jan Van Acoleyen, and the Group CFO, Mark Reid. For the Q&A, we are joined by the Residential Lead, Jim Casteele, as well as by the two Business Leads, Anne-Sophie Lotgering for the IT part and Renaud Tilmans for the Telco part. We also have our Corporate Affairs Lead, Ben Apple. They will be taking your questions in a moment, but first, handing over to Jan to take you through the highlights of today. Jan, please go ahead. Good day, everyone. Thank you for joining us today, and welcome to my very first time presenting the Proximus Results. Let me take you through the main takeaways from the first quarter, after which Mark will walk you through the achievements in more detail. As you've seen in our published report this morning, Proximus started the year on a positive note. With Digi now active since mid-December, we are clearly operating in a more competitive market. Nonetheless, our first quarter results show our strong resilience in this new market structure. Overall, this resulted in a strong financial quarter for the domestic segment, with both revenue and EBITDA growing year- over- year. A key driver of our success is, without any doubt, the leading networks we have in Belgium, with 5G coverage now above 75% and fiber in the street covering more than 43% of the Belgian homes and businesses. On the fiber collaboration plans, we can confirm we are progressing, and we expect to be able to come back to you with news by the end of the second quarter. For our global business, we have closed a solid Q1 as well, with especially a strong EBITDA quarter, up from the previous year by just over 15%. The recent macroeconomic developments are something we will be closely monitoring, remaining vigilant for any potential impact going into the remainder of the year. I also want to flag the progress made for our asset disposal program. We have now EUR 330 million proceeds confirmed, and hence, we are well on track to deliver EUR 500 million plus by 2027. Overall, again, we have started the year on a good note, and we reiterate the guidance we have set for the full year. Now, I hand it over to Mark to comment in more detail on these achievements. Thank you, Jan. Let me start off with some key financial results. For the domestic segment, we closed the first quarter with growing revenue, up by 1.2 percentage points. Despite the intense competitive landscape, we achieved this thanks to keeping solid operationals, in addition to a good landing of the January price indexation. The revenue, and especially the increase in services revenue, drove higher margins, which more than offset the increase in OpEx. As such, we have closed Q1 with domestic EBITDA growing by 1.5 percentage points. For the global segment, the rec margin was up 4 percentage points, and this, combined with lower OpEx, has led to a strong EBITDA growth of 15.3 percentage points year- over- year. This brings our group EBITDA to EUR 481 million for the first quarter, an increase of 2.8 percentage points. Our CapEx for the quarter was EUR 270 million, and for the free cash flow, we ended the first three months with EUR 81 million in total. Excluding the proceeds from the asset sales, the organic free cash flow was negative EUR 36 million, improving by EUR 76 million year- over- year. We'll take a closer look at this in a minute, but let's first take a look at the operational results. As we said in our previous call, at the end of February, we have indeed ended the first quarter with positive net adds for a residential unit, for both internet and mobile postpaid. This is despite the launch of Digi and the subsequent competitor moves, which have increased competition significantly. In spite of this competitive intensity, the residential unit could grow its internet base by 6,000 subscriptions and for the mobile postpaid by 7,000. Our convergent base grew by 10,000 residential customers in Q1. For our business unit, the internet base remains broadly stable, and for the mobile postpaid, we closed the quarter with a net loss of EUR 15,000. About a third of this loss concerns one single contract, which were machine-to-machine alike cards at very low ARPU. This comes in addition to a limited remaining loss related to a Flemish government contract and other churn because of some aggressive competitor pricing, where we keep a value-focused approach. The resilience of our residential unit in this new market structure is highly supported by our multi-brand strategy, which allows us to use Scarlett and Mobile Vikings brand as a first line of defense against Digi and other low-end offers in the market. At the same time, we protect value by positioning the Proximus brand in a premium segment. Our strategy clearly worked in addressing the market structure change, as illustrated on this chart of mobile ports to Digi. The number of customers porting out to Digi has continued its downward trajectory, within recent weeks showing even fewer ports. Just so you know, we will not be providing this chart in the future, as it is competitively sensitive information, and I'm sure you understand that. Besides our complementary brands, it's the Proximus leading networks that really make a difference. At the end of March, we have reached an important milestone, with our 5G indoor population coverage now reaching three quarters of the country. Our mobile network quality received once more external recognition, this time with the Open Signal Mobile Experience Award. We are proud to have the highest 5G indoor coverage in Belgium and are on track to achieve close to 100% nationwide coverage by 2026. The fiber deployment is also progressing well, especially in Brussels, where we are already at a very high coverage of 75% of all homes and businesses. Across Belgium, we now have 2.3 million fiber homes, meaning a coverage of 38%, and including fiber in the street, we're even above 43%. Our network filling rate continues to grow, now reaching 34%. At the end of March, the number of activated fiber customers crossed the 600,000 mark, adding another 43,000 in the first three months of the year. As Jan said at the start of the discussion, with the BIPT, BCA Telinet, and Wire regarding future collaboration on gigabit network projects, we are progressing well. We currently expect to provide further updates by the end of the second quarter for Flanders. For the south of Belgium too, the discussions with Orange are progressing. We'll keep you informed in due time. For now, we cannot comment further on this topic. Turning to Proximus Global, which also had a good start to the year. New products were launched, such as 365 Guard and the orchestration platform eSIM Hub, just to name a few. Proximus Global is also partnering with Nokia to explore opportunities by using each other's marketplaces, bridging the gap between the various industry segments and telecom ecosystem. Last but not least, Global is getting international recognition, winning awards in the digital communication space, a very nice achievement for our three brands, and a reflection of our commitment to drive innovation and delivering unmatched value to the global telecom ecosystem. Let's now review the Q1 results. I'm assuming you have been through the earnings release, and I'll proceed quickly on this part. Starting with our domestic revenue, which increased for the first quarter by 1.2 percentage points. As illustrated on the chart, service revenue grew by 1.9%. The first quarter growth was mainly driven by a strong increase in the service revenue of the residential unit. This is thanks to a sustained strong operational result and price indexation effective since the first of January, that is again landing well. On the other hand, we had less revenue from terminals, which, as you know, comes at a very low margin. This is also explained by the sequential slowdown in total residential revenue growth. The most valuable part of the residential revenue is growing by 3.1%, with convergent revenue up by 6.4% year on year. The RPAC continued to show a positive evolution, growing 2.2%, including the price indexation and the benefit of continued increase in convergent customers and fiber upselling. For the business unit, the total revenue was up by 1.5%, including a strong increase in IT services, and especially for IT hardware, there was a very good business traction. Taking a closer look at the B2B revenue from services, the first quarter included another strong growth for IT services, as well as a slightly growing revenue from fixed data, which is driven by good growth in internet services. On the other hand, mobile revenue was down year- over- year at a similar rate of decline as the last two quarters. This is the combined result of a lower customer base compared to last year, mainly due to that one large contract loss in 2024 and some ARPU pressure in a very competitive market. Fixed voice continued its steady decline due to a lower customer base, while value is managed through price increases, resulting in a sustained positive ARPU trend. For the wholesale business, we achieved sustained growth, and fixed and mobile services were up by 16.3% for the first quarter. Revenue from interconnect, on the other hand, continues to decline, although this has no meaningful margin impact. For domestic OpEx, we report for the first quarter of 2025 an increase by 3.4 percentage points, so a moderated year-over-year increase compared to the previous quarter. This increase mainly reflects on inflation, including a year-on-year impact of the wage indexations of June 2024 and the further indexation in March 2025. Our continued efforts and efficiencies could, however, more than offset these impacts. Furthermore, in Q1 2025, OpEx includes Fiberklaar as well as higher cross-charging from Orange Belgium, which is EBITDA neutral as we charge Orange for the same amount. Other impacts are related to cloudification and customer OpEx. This brings me to domestic EBITDA, which grew for the first quarter by 1.5 percentage points, as you can see on the chart, resulting from good growth in direct margin, partially offset by higher OpEx. Turning now to Proximus Global, for which we closed the first quarter with a solid growth in revenue of 2.7% and direct margin increasing by 4.1 percentage points. For the product group communications and data, we achieved a direct margin growth of 5.5% on a pro forma basis. The main driver was good progress in omnichannel CPaaS services, with especially a strong quarter for Flash Call solutions. The direct margin from other omnichannel solutions, such as RCS and WhatsApp, also grew from one year back. Proximus Global continues to capture part of the ongoing CPaaS SMS transition, which is reinforced by cost optimizations from the customers in the CPaaS industry. For P2P voice and messaging, although this is an inherently declining market, Proximus Global achieved a stable direct margin. The higher margin, combined with lower costs thanks to synergy delivery, resulted in a strong increase in EBITDA, up by 15.3% year- over- year. Regarding the group CapEx, we closed the first quarter with EUR 270 million, and we remain well on track for the outlook we had given for the year at about EUR 1.3 billion. The decrease from last year is mainly coming from the phasing nature of TV content renewals, but also reflects that we are now past the peak of mobile network consolidation, as well as our own CapEx build in the dense areas. As we explained before, taking into account the anticipated rollout period, our CapEx envelope should stay around EUR 1.3 billion until we have completed the fiber network build, that is to say 2028, with an initial drop expected in 2029 and a further drop in later years once customer connection CapEx tails off. This brings me to free cash flow for the first quarter. As illustrated on the chart, the organic free cash flow for the first quarter was negative EUR 38 million, improving from one year back thanks to the growing EBITDA and a favorable year-over-year impact from working capital. Also, the lower cash CapEx is a plus, with these effects partially offset by higher interest and tax payments. Our total free cash flow includes the proceeds from the sale of data center business for EUR 130 million. This brings me to the next topic. The disposal program of our non-core assets, which we launched to support our free cash flow through the high investment period, is progressing very well. The closed agreements will deliver in total cash proceeds of around EUR 330 million by the end of 2025. The sale of the Luxembourg Terrace is pending final regulatory approval and is expected to close in the next 60 days. Overall, we are well on track to generate over EUR 500 million of cash proceeds by the end of 2027. With this, I'm at my final slide at our outlook for 2025. We reiterate our expectations of around 2% growth in our underlying EBITDA at the group level. Following a strong start to the year, we can reaffirm with confidence the guidance given on domestic, anticipating a broadly stable revenue and EBITDA despite the change in market structure and resulting increase in competition. We also closed a solid quarter for Proximus Global. We are watchful of the recent macroeconomic developments and currency movements and closely monitor any headwinds they may pose for the rest of the remainder of the year. With that, I close my presentation and now hand the line over to your questions. Thank you, sir. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You will be advised when to ask your question. The first question comes from a line of Dhruva Shah from UBS. Please go ahead. Hi, thanks very much for taking the questions. I have three, if that's okay. The first is just on the residential performance, which was, as you said, in terms of positive post-paid net adds, despite Digi's entry and despite putting through the price rise in January. I was just curious in terms of what you've seen so far in Q2 in terms of net adds and more broadly competitive dynamics on both broadband and mobile. Second, on global, you've flagged potential headwinds from macroeconomic developments going forward. Will this mainly impact the top line, or could you see this impacting EBITDA growth as well? Just on the EBITDA growth, could you maybe give us some color on the quantum of synergies you've achieved so far? I think if I think back to the profile you broke out in the international webinar, it suggested around EUR 20 million of the EUR 100 million synergies to be realized in year one. Are you close to achieving this, and could synergies ramp in the coming quarters? Just finally, on global again, but more broadly, how are you thinking about the unit strategically going forward? Before you do anything strategically, before crystallizing value there, would you want to see all the synergies come in first, or are you happy to explore options before then? Thanks very much. Hi Dhruva, this is Jim Casteele, Residential Lead. On your first question, on mobile indeed in Q1, we deliberately phased our reactions with our three brands, with the Proximus brand only moving in April when it comes to mobile only. Moving into April and the first days of May, good trending for the second quarter. We actually see the positive impact of this, and we are very confident for the second quarter that the mobile KPI will improve. We see the same on internet there. Of course, the reason is a bit different, but there we see that last year one of our competitors in the beginning of the year had some challenges, which have been fading out in 2025. The year-over-year trending will change, but we see also on internet in Q2 positive trending versus the results of Q1. Y es. Dhruva, let me take your questions on global. As you saw from the results, we're very pleased with the Q1 results again in context of the competitive nature of the market. Again, I think the direct margin and the EBITDA is very positive. In terms of what's going on macroeconomically, it's, and I'm sure you've heard this from AP, it's difficult to tell exactly what's going on. We've seen over the last six, eight weeks, there's been many elements going on geopolitically around the world. We are just cautious. We are watching what's going on there. I think the fact really is our large customers and the demand that that may pose. As I said, we will watch them closely as we go through Q2. Could that have an effect on revenue direct margin? Possibly. Again, as I said, we are very happy with the Q1 results so far. It is more kind of watching brief as we go. In terms of overall synergies, we are very much on track. The first year has gone very well. We have implemented a lot of the most of the operating cost synergies that were in plan. That is ramping to the profile that we gave you. We're not actually giving you a specific number, but I think, again, with the disclosures we gave you before, that's on track. As I said, the operating cost ones are very positive and tracking exactly where we expected them to. In terms of strategically, I think where we are right now is we're just super focused. As you saw, we put Proximus Global together and launched the global organization in December. That organization is super focused on capturing market growth, delivering the synergies. That's really what we're all behind, that initial vision and strategy and executing it. We have no plans to change that trajectory. As we said, Gay and I said, we have a view that there needs to be a value crystallization moment. Again, we talked about a horizon of post 2026, and that's still where we are today. Thank you very much. The next question comes from a line of David Vagman from ING. Please go ahead. Yes, thank you. Good afternoon, everyone. First question on business, so B2B and business mobile in particular. Do you see in terms of pricing? I read some comment on the tough environment, competitive dynamic there. Do you see a shift in mindset from competition in terms of pricing? In particular, are they more pricing, let's say, closer to wholesale mobile ARPU, so say kind of MVNO sort of level? That's my first question. Then coming back on the residential competitive dynamic you saw in Q1 and so far, could you break it down a little bit, let's say, or zoom a little bit per brand and explain us a little bit what you explain on the pricing? Should we see some down trading, etc., as you improve your offer? Last point, on the direct margin for Proximus Global, I think P2P did quite well in Q1. Can you comment on this and anything to extrapolate for the rest of the year? I am also referring to your investor day on Proximus Global. I think it is a bit of an outperformance if we zoom on P2P. Thank you. Renaud Tilmans, just managing B2B Telco. Yes, I will answer the first question for B2B mobile. In fact, we do not see a shift in mindset going towards more mobile or seller pool. It is more and more intense competition on mobile, mainly on the ME segment. Ourselves, we manage both value and volume, but we will not follow volume at any price. Thank you. David, on your question on the dynamics on the residential market, we have not observed significant changes in our installed customer base. What we do see is that in customers that decide to change from operator, they now have more choice and you tend to see a bit more people moving to the B brands than the A brands. We do not see big shifts in the installed base. That part, I think, is really well managed. Of course, we continue to feed the premiumness of the Proximus brand. Working on fiber, we recently launched our Flex Plus offer, where we really put all the power of the fiber network into play. We also work on innovations to make sure that our customers on the premium brand feel valorized. That part of the strategy continues to execute very well. Also on the price increase, this has landed very well as well. I think that's also confirming if you look at the NPS of our conversion customers, where we see that the Proximus conversion customer NPS is at 20. We are very happy with that result. Continuing to be confident in how we're executing the strategy. On the revenue side, also confident that we're going to be able to continue to grow that part. David, on Proximus Global, I think we talked several times about the advantages of having a Proximus Global digital communications entity within the bigger Proximus Group, right? The suite of products that we're able to offer end-to-end to customers across the globe is a key advantage to us, right? In quarter one, we had a very, very good quarter in terms of, as I noticed, in terms of the shift to omnichannel, in terms of Flash Call, in terms of cloud communications and eSIM. I think those continue to be fantastic businesses for us and direct margin contributors. When you come back to the P2P business, again, we had a great quarter in Q1. Again, that's all about the team, the reach that we've got globally, our relationships with MNOs. Clearly there, we've been able to manage the right destination mix. We are super pleased with that, and we're taking market share in that space as well. I think overall, the team's been very proud of their achievements and how they manage the various products across our suite. But again, that is one of the key advantages of having this kind of end-to-end coverage of products across the digital communications suite. And so yeah, we're pleased with Q1 results. Thank you. Thanks very much, Mark. As a very quick follow-up on your comment, do you think then that the performance we saw in Q1 is rather structural or, let's say, sustainable for the coming quarter? Again, David, I'll put you back. Look, I think, again, we're super happy with Q1. I think the geopolitical economic situation has impacts on our clients, and we're just monitoring that. We'll come back to you in July and let you know how everything's traded through the early part of the summer. I'll give you an update in July. Thank you. The next question comes from a line of Kris Kippers from Degroof Petercam. Please go ahead. Yes, good afternoon. Thank you for taking my questions. Two from my side. Firstly, I know you will not comment a lot, but I'm just wondering, what are actually the reasons for the ongoing postponements regarding the discussions that you have for a fiber deal in the north? Could you share with us a little bit more on potential timing of a fiber deal in the south? That would also be, of course, convenient. Second question relates to actually your expenses. Of course, we know you're very much skewed to the Belgian market, of course. Looking at the FTEs, they were down 1.4% in Q1. Average was about 0.6% in 2024. If you look at the FTE evolution, I think when you exclude the Fiberklaar factors, about a run rate of about 200 that could leave net-net the firm per quarter. Is that a run rate I can work with? Or how should we see this in 2025? Thank you. Yeah, Chris, let me take that. I mean, there's no postponement, just to be clear. I think we've been talking about coming back on the fiber deal in the north in the first half of the year, and we're confident to do that. I think, as we've said before, look, we're not going to comment extensively on this. The negotiations are progressing. I think the fact that it's taking time, again, we talked about this last call, we want to get the best deal for Proximus. Clearly, the discussions are progressing and moving. Again, we continue to expect to be able to come back in the first half of the year. In the next couple of months, by the time we talk to you in July at our Q2 results. I think that's where we are on south. Again, those negotiations are progressing well. The timing of those, again, we haven't picked a timeframe for that. It will follow in due course. You can be rest assured that the south is also progressing. In terms of overall expenses, we've talked a little bit about the natural attrition of pension leavers in the Proximus Group. I think that has got an accelerating curve in the next years to come. In terms of giving you a number, we haven't picked a number, but I think it is going to move upwards from the rate we've seen in the last 12 months for sure. So I think you can start to get yourself a guidance from that perspective. Hopefully, that helps. Yes, that certainly helps. Thank you, Mark. The next question comes from a line of Nicolas Cote-Colisson from HSBC. Please go ahead. Hello everyone. Question on strategy. I do apologize because this one may not be easy to answer given your interim CEO position. But do you have any indications on whether the government or the board is still convinced by the diversification strategy into CPaaS and digital identity? Should we expect this to be a debate or not? Is it a matter of debate right now in the light of the selection of a new CEO? And maybe still on strategy, the government manifesto a few months ago included their intention to ask operators to move clients to the most attractive packages. Is it something you think you'll be forced to implement? I may have a follow-up after. Thank you. Thank you for the question. On the strategy, I can only confirm that with our board, we continue to execute the strategy as defined before. The short-term focus is to execute on the Bolt 25, but no change on the overall strategy with regards also to the global activities. Jim, you want to take the question on the package changes? Yes. On the part linked to discussions at government on moving customers automatically to the best packages, as you know, Telco offer is not that simple to decide yourself what would be the best package for a customer. I think all those elements are still in discussion with the regulator to see how that legislation needs to be put into action. Yeah, I think to that from my side, indeed, this is a piece of legislation that's still under a lot of discussion. Currently, we also already have a kind of an obligation to indeed advise our clients on this, and this has led to a lot of problems. Okay, got it. Maybe a follow-up. At Global, I noticed a low labor cost in Q1 compared to previous year, whether I compare it to revenue or to the direct margin. Is it an exceptional quarter, or is it the new normal? Nicholas, I think, again, I alluded to the execution of our synergies plan. I think that significant portion of that was executed late Q4, early Q1. I think that is a good operating workforce cost, and it's affected by the restructuring of the workforce. I think it's a level that you could consider. I think clearly there are other impacts, right? There are investments that we will make, and there are obviously inflationary impacts that differ geographically across the world. That is really the change that was related to our execution of our synergy plan. Okay, that makes a lot of sense. If I can take a bit more of your time, sorry about that. On the fiber filling rate, it does accelerate year after year. How should we see this going forward? If you can help us understanding how the dynamics work, are there kind of a threshold that typically lead to an acceleration? Nicholas, on that question, indeed, we continue to be able to move more and more customers to the fiber network. Of course, since we are still in full deployment phase as well, here teams continue to add new fiber plugs to our fiber network. What we see is that the mechanisms that we have been seeing over the last two, three years are still the actual ones to look at, which means that we can migrate roughly 70% of our existing copper customers to the fiber network one year after fiber becomes available in a certain area. On top of that, we see nice acquisition results in fiber area. We are going to continue to see that fiber filling rate gradually increase. Of course, at a certain point in time, when you reach your market share for internet, it is going to start to flatten out. As long as we are building, like we are still doing for the next years, we are going to continue to see also a growing filling rate of the network. Okay, that is all right. Thank you very much for the answers. As a final reminder, if you would like to join the Q4 questions, please press star one on your keypad. The next question comes from a line of Michiel Declercq from KBC Securities. Please go ahead. Hi. Thanks for taking my question. The first question would be on Digi. I appreciate the slide that you shared for the mobile evolution. I know that for fixed, they're only rolling out in a very, very limited number of streets in Brussels. I was just wondering, looking at those streets, did you see a lot of customer shifting? Maybe also, do you have a view on if Digi's strategy has changed in terms of fiber rollout, given the quite aggressive answer from yourself and other competitors on the mobile pricing? That would be my first question. The second one would just be on the fiber net adds, a bit of a step down there in this quarter. If I also look at the original targets of 50% homes passed by the end of 2025, you are still a bit off there. I was just wondering, probably because you are now in talks for the collaboration, of course, but when this collaboration is signed, should we then see a bit of an acceleration of the fiber cloud rollout? Those would be my questions, please. Jim, you want to take that? Maybe I will take the first one on Digi in terms of their plans. Look, I think you see our fiber progress both build and commercially, right? We are super focused on building and monetizing the network. I think we are doing a fantastic—the teams are doing a fantastic job at doing that, right? I mean, Digi has had its issues, obviously, in the papers. I do not want to comment on that. We are not focusing on that. We are focusing on what we do very, very well. In terms of—and I am sure Jim will reinforce this—in terms of kind of fixed impact, we are not seeing anything. You saw the graph on the mobile effect. Jim, do you want to talk on the net adds and then? Yeah. So Michiel, on the fixed part, I think today the commercial footprint of Digi is too limited to be able to see a visible impact. Of course, we monitor on a very granular level, but we do not see a significant impact on that part. I think that is a bit where we stand today. I think it is also very early days yet in terms of fiber net adds from a commercial perspective. The net adds of Q1 are at the same level as Q1 last year. It is seasonality between the quarters. I think the same is the case because I guess your question is more linked to the fiber build rollout as well, linking to your 50% home pass. I think also there we are still on track with our targets. It is more seasonality elements rather than a slowing down of the fiber build. Okay, great. Good to hear. Thank you. There are no further questions, so I'll hand back to your host to conclude today's conference. Thank you. Thank you all for joining us and for your questions. Should you have any follow-up questions, let me know. I'm happy to help you out and wish you all a lovely weekend. Bye. Thank you for joining today's call. You may now disconnect.