Proximus (PROX) Q2 2024 earnings summary

Executive summary

• Achieved strong H1 and Q2 2024 results with 46,000 new mobile cards, 40,000 new fiber customers, and major milestones including the acquisition of Route Mobile and full ownership of Fiberklaar, supporting an upgraded 2024 guidance.

• International segment delivered 7.0% direct margin growth (pro forma), with Route Mobile integration strengthening global CPaaS and digital identity offerings.

• Signed MoU for fiber collaboration in Flanders with Wyre/Telenet, optimizing network rollout and unlocking value.

• Free cash flow expected to cover current dividend levels in 2025-2027, with organic growth resuming from 2028, supported by a EUR 500 million divestment program.

• Strategic partnerships and sustainability achievements, including a Microsoft collaboration and EcoVadis platinum medal.

Financial highlights

• Q2 2024 Group EBITDA up 5.3% year-over-year (pro forma), with domestic EBITDA up 5.1% and international EBITDA up 6.5%.

• Q2 2024 Group revenue up 4.6% year-over-year (pro forma), with domestic revenue up 4.6% and residential services up 6.3%.

• H1 2024 CapEx totaled EUR 585 million, with full-year 2024 CapEx expected at EUR 1.36 billion due to Fiberklaar consolidation.

• Net income for H1 2024 was EUR 191 million, up 1.4% year-over-year.

• Adjusted free cash flow for H1 2024 was -EUR 114 million, mainly due to working capital timing; reported FCF including M&A was -EUR 727 million.

Outlook and guidance

• Upgraded 2024 guidance: group EBITDA up to 2.5% (pro forma), domestic revenue up to 2.5%, and domestic EBITDA up to 2%.

• CapEx for 2024 guided at EUR 1.36 billion, reflecting Fiberklaar consolidation.

• Net debt to EBITDA ratio expected to be around 3.1x in 2024, stabilizing at 3x from 2025.

• Dividend policy unchanged at EUR 0.60/share for 2024 and 2025.

• Organic free cash flow expected to return to growth above current dividend level from 2028 onwards.