Orange Belgium Q3 2018 Financial Results October 24, 2018 1 - PowerPoint PPT Presentation

Orange Belgium Q3 2018 Financial Results October 24, 2018 1

Disclaimer This presentation might contain forward-looking statements about Orange Belgium in particular for 2018. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ from the results anticipated in the forward-looking statements include, among others: the economic situation in Europe and more specifically in Belgium, the impact of price adjustments on the customer base resulting from competitive pressure, the evolution of the customer base, the effectiveness of Orange Belgium’s convergent strategy including the success and market acceptance of the voice and data abundance plans in the business segment and of the Orange Internet & TV offers, of the Orange Belgium brand and other strategic, operating and financial initiatives, Orange Belgium’s ability to adapt to the on-going transformation of the telecommunications industry, regulatory developments and constraints and the outcome of legal proceedings, risks and uncertainties related to business activity. 2

Section one Q3 2018 Highlights 3

Q3 2018 Orange Belgium key achievements Convergent mobile Total mobile only Average mobile Net additions customer base contract excl. M2M data usage (qoq) ~10% of total + 5.3% yoy + 73% yoy Mobile only 53k contract excl. mobile contract M2M customer base Love customers 19k 2k Mobile only prepaid Belgium Belgium Belgium Belgium Revenues Adjusted EBITDA Organic cash flow CAPEX + 1.5% yoy + 2.2% yoy + 21.3% yoy € 33.1m Retail Revenues $ + 10.1% yoy EBITDA margin + 19 bps yoy Group Group Group Group 4

Section two Operational Results 5

Convergence : Love maintains growth trajectory driven by bold and simple mobile plans Belgium’s Love and convergent customers (‘000) Convergent mobile customers as % of mobile customer base 98% 10% 243 89% 9% 207 8% 186 7% 156 155 6% 136 123 122 5% 103 96 4% 82 74 64 3% 50 2% 1% 0% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Love customers Convergent mobile customers 1.6 SIM cards B2C Of total € 76.7 ~10% per convergent mobile base convergent ARPO is customer convergent +5.5% yoy 6

Mobile: Unlimited voice and data plans were the catalyst of our commercial success in Belgium Quarterly customer base evolution (‘000) Quarterly net adds (‘000) +35 +3% 55 2,985 2,905 2,911 2,930 2,895 210 109 137 163 180 B2C mobile convergent 31 11 Mobile only contract exl. M2M 20 6 Mobile only prepaid 17 29 26 22 2,179 19 2,178 2,197 2,166 2,175 9 2 0 -4 -6 -12 -18 -8 -41 607 589 582 575 577 -26 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 4-year high Contract Prepaid net € 21.8 53k 2k full mobile mobile only adds, best contract net ARPO performance adds (excl. since Q3 2014 -0.6% yoy M2M) 7

Mobile: Unlimited plans also a catalyst for boosted data usage growth in Belgium Active smartphone penetration (%) Average mobile data usage (Gb) +63% +8% +35% +27% +55% +57% 2,9 79 77 74 73 2,3 70 71 68 +120% 1,8 1,8 1,7 1,3 1,3 1,3 1,3 1,2 0,9 0,9 0,9 0,6 0,1 0,5 0,3 0,3 EoP EoP EoP EoP EoP EoP EoP Q3 EoP EoP Q3 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 2013 2014 2015 2016 2017 2016 2017 2017 2018 % active smartphone users / total database On total users base On smartphone user base Orange +63% Average data 77% customers consumption are active Sep ‘18 per user smartphone ytd users 8

Mobile: unlimited offers, a catalyst for boosted data usage growth in Belgium Mobile data traffic evolution (Gb) 85% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 14 14 14 15 15 15 15 16 16 16 14 16 17 17 17 17 18 18 18 +85% 2.3 m 64% Total Mobile 4G users/ mobile data active Total base Sep ‘18 data traffic users ytd 9

Mobile - Contract mobile ARPO stabilized, tangible proof of value creation of our mobile offers in Belgium Quarterly mobile ARPO ( € ) Quarterly blended mobile ARPO ( € ) +3.2% +1.0% 18.8 -0.6% 18.6 18.4 18.2 18.1 21.9 21.8 21.3 21.2 21.1 7.7 7.4 7.5 7.2 7.0 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Mobile only contract excl. M2M Mobile only prepaid 10

Section two Financial Results 11

Orange Belgium Group: Q3 2018 key financial results Revenues ( € m) Adjusted EBITDA ( € m) 2.2% 1.5% Adjusted 325.4 81.4 318.0 79.7 313.5 313.0 306.6 69.6 66.7 EBITDA 60.6 margin 25.6%, +19 bp yoy Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 CAPEX ( € m) Operating cash flow* ( € m) -11.4% 14.5% 73.8 212.0 45.5 37.4 33.1 31.8 48.3 42.2 28.8 -42.0 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 12 12 *Adjusted EBITDA - CAPEX

Group Retail Service Revenues: convergent service in particular - was the main growth driver Retail service revenues ( € m) Revenues ( € m) 1.5% +10.1% 318.0 313.5 199.1 180.8 28.7 13.5 180.9 199.1 158.8 156.5 28.9 26.3 87.9 83.1 10.0 10.4 15.8 9.5 Q3 2017 Q3 2018 Q3 2017 Q3 2018 Convergent service revenues Fixed only service revenues Retail service revenues Wholesale revenues Mobile only service revenues IT & Integration Service Equipement sales Other revenues 13

Adjusted EBITDA was resilient: fast-growing convergence revenues and efficiency program compensated for lower MVNO revenues Adjusted EBITDA evolution ( € m) 2.2% 9.7 17.8 -5.3 81.4 -3.1 0.5 79.7 -8.1 - Decline of MVNO revenues Q3 2017 Revenues Direct costs Labor costs Indirect costs Q3 2018 14

CAPEX -11.4% 11.9% 10.4% 37.4 33.1 9.5 10.1 17.5% 27.9 23.1 Q3 2017 Q3 2018 Total capex to total service revenues ratio Cable capex incl. CPE, IT & Network, etc. Core capex 15

Section three 2018 guidance 16

2018 financial guidance reiterated 2018 Q1 2018 Q2 2018 H1 2018 Q3 2018 9M 2018 Guidance Revenu nue growt wth +0.9% +3.1% +2.0% +1.5% +1.8% Slight t growth th Adjusted € 275 275-295 m 60.6 60.6 66.7 66.7 127.3 127.3 81.4 81.4 208.7 208.7 EBITDA Core capex x Stable vs. 2017 21.2 /+2.4 % yoy 34.7 / +14.0 % yoy 56.0 / +9.3 % yoy (excl. . Cable) Outlook Further uptake of the postpaid and convergent LOVE customer base • Focus on operational efficiency • Confirmed regulatory improvement of the current financial and operational conditions for cable wholesale access • MVNO revenues are expected to decline by € 30m in 2018 • Gross EU roaming impact: € 26m on revenues and € 17m on adjusted EBITDA compared to 2017 • Corporate income tax in Belgium decline: 33.99 % in 2017, 29.58 % in 2018 and 25% in 2020 • 17

Section four Q&A 18

Appendix 1: Key financial figures Orange Belgium Group’s consolidated key figures (€ m) m) Q3 2 2018 Q2 2 2018 Q1 2 2018 Q4 2 2017 Q3 2 2017 Reven enues es 318.0 313.5 306.6 325.4 313.5 Retail service revenues 199.1 188.8 181.3 181.4 180.9 Adju just sted ed EBITDA DA 81.4 66.7 60.6 69.6 79.7 % of Revenues 25.6% 19.8% 19.8% 21.4% 25.4% Reported EBITDA 80.5 64.4 59.2 67.6 90.9 % of Revenues 25.3% 20.6% 19.3% 20.8% 29.0% Net profit 19.8 4.8 -0.4 -1.9 20.3 Earnings per share ( € ) 0.33 0.08 -0.01 -0.03 0.34 Capex -33.1 -45.5 -31.8 -73.8 -37.4 % of Revenues 10.4% 14.5% 10.4% 22.7% 11.9% Operational cash flow 47.4 18.9 27.4 -6.1 53.5 Organic ic cash flow 51.9 22.8 19.9 -15.9 42.8 Net debt 254.0 305.1 295.5 312.8 288.3 19

Appendix 2: Orange Belgium KPI Key operating figures of Orange Belgium (in ‘000) Q3 2018 Q3 2017 Vari riation on Conve verge gent KPIs conve verge gent custom omer r base 155 155 82 82 89.4% - B2C convergent customer base 140 75 86.8% - B2B convergent customer base 15 7 117.2% quart rterly y ARPO O ( € per r month) - B2C convergent ARPO 76.7 72.8 5.5% Mobi bile KPIs Is mobi bile custom omers rs (excl. MVNOs) s) 4,040 3,790 6.6% - contract 3,463 3,182 8.8% - M2M 1,055 895 17.9% - excluding M2M 2,408 2,287 5.3% - prepaid 577 607 -5.0% mobi bile custom omers rs (excl. MVNOs) s) 4,040 3,790 6.6% - B2C convergent 210 109 93.8% - mobile only and mobile B2B 3,830 3,681 4.0% - M2M 1,055 895 17.9% - excluding M2M 2,197 2,179 0.9% of which B2B convergent mobile 32 27 20.4% - prepaid 577 607 -5.0% MVNO customers 13 1,067 -98.8% quart rterly y ARPO O ( € per r month) mobile only blended ARPO 18.8 18.6 1.0% - mobile only contract ARPO 21.8 21.9 -0.6% - mobile only prepaid ARPO 7.5 7.2 3.2% Fixed d KPIs Is number of lines 121 142 -15.2% broadband customers 160 94 71.5% - FTTx and cable customers 155 82 89.4% - xDSL 5 12 -53.5% - LTE for fixed and others 0 0 internet features TV 155 82 89.4% 20