Orange Belgium Q4 2018 Financial Results February 13, 2019 1 - PowerPoint PPT Presentation

Orange Belgium Q4 2018 Financial Results February 13, 2019 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 Q4 2018 Highlights 3

Bold challenger positioning implemented in 2018 New w cable le whole olesale le Fixed LOVE E phone one price ce unlimit limited offer Googl gle Additi tiona onal Eagle Chrom omecast st TV chann nnels unlimite limited offer Q1 Q2 Q3 Q4 Custom omer Medialaan New Koala servi vice agreement nt unlimit limited KPI’s Agreement nt in pub ublishe shed Fluvius us fiber pilot t proje oject in Orange nge VoWiFi & & Fland nders TV app VoLTE 4

Q4 2018 Orange Belgium key achievements Convergent mobile Total mobile Net additions customer base contract excl. M2M 11.5% of total + 6.6% yoy mobile contract Mobile +61k contract excl. customer base M2M +25k Convergent customer Belgium Belgium Belgium Revenues Adjusted EBITDA Average mobile + 5.1% yoy + 11.3% yoy data usage + 79% yoy Retail Service Revenues Margin expansion + 9.8% yoy + 124 bps yoy Group Group Belgium 5

Section two Operational Results 6

Convergence : Love offers increase its attractiveness Belgium’s Love customers (‘000) Convergent mobile customers as % of mobile customer base 82% 11% 283 10% 75% 9% 243 8% 207 186 180 7% 156 155 6% 136 123 122 5% 103 96 4% 82 74 64 3% 50 2% 1% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 0% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Love customers Convergent mobile customers 1.6 SIM cards Of total 11.5% per mobile base convergent is customer convergent 7

Mobile: Continued commercial success in Q4, validates Bold challenger positioning in Belgium Quarterly customer base evolution (‘000) Quarterly net adds (‘000) 2.2x +7% 61 2,469 2,408 2,355 2,329 2,315 53 244 210 B2C mobile convergent 180 137 163 Mobile only contract exl. M2M 34 31 28 14 26 2,225 2,197 2,178 2,166 2,175 17 29 27 26 22 9 -1 -12 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 8

Mobile: Unlimited plans also a catalyst for data usage growth in Belgium Active smartphone penetration (%) Average mobile data usage (GB) +79% +8% +35% +55% 3.2 2.5 +57% 79 77 74 75 73 71 70 68 1.8 +120% 1.3 1.3 0.9 0.9 0.6 0.5 0.3 0.1 0.3 EoP 2013 EoP 2014 EoP 2015 EoP 2016 EoP 2017 EoP 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 % active smartphone users / total database On total users base On smartphone user base Orange +79% Average data 79% customers consumption are active yoy per user smartphone users 9

Mobile data traffic boosted thanks to a growing customer base and increasing average data usage Total mobile data traffic evolution (Gb) 116% 4G 3G Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14 14 14 15 15 15 15 16 16 16 14 16 17 17 17 17 18 18 18 18 +116% 2.4 m 67% Total Mobile 4G users/ mobile data active Total base yoy data traffic users 10

Solid growth in B2C convergent ARPO and slight contraction in mobile- only ARPO, confirms our Bold positioning Quarterly mobile only ARPO ( € ) Quarterly B2C convergent ARPO ( € ) +7.0% 76.7 -1.8% 75.5 73.7 72.8 71.9 70.5 21.9 21.8 21.3 21.2 21.1 20.8 7.7 7.5 7.4 7.2 7.1 7.0 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Mobile only contract excl. M2M Mobile only prepaid 11

M2M / IoT: improved performance with connected devices with more than 1m SIMS sold Worldwide IoT services Market SIM’s evolution (‘000) thanks to global network leader • ~ 45% IoT revenues come • 1.1m SIM +18% cards from foreign companies 1,114 • 5/6 SIMs abroad 58 1,056 1,017 39 Our specific >15 years of 71 experience strengths 946 • Making us customer experts Building strong IoT partnerships • 1 st operator to launch a development kit and end-to- Q1 2018 Q2 2018 Q3 2018 Q4 2018 end commercial IoT services in Belgium 12

Customer Experience at the heart of our strategy Leader in indoor mobile 465k coverage VoWifi/ VolTe 1.1m users Orange App active users #1 in average helpdesk #1 in repair response time * time * #1 in #1 in least #1 in % of problems Social complaints about Media solved at 1 st contact * invoicing * • *BIPT Care ** • ** Lithium & Engagor 13

Main promotional activities: Concerts, Launch of Gamification: Cinema tickets, making the reward system more Sport engaging events Total gifts offered: Engagement: 2.3m telco 50% of bonus and residential gifts customers 14 Orange Thank You Program: improving customers’ loyalty

Regulatory update Cable Regulation Spectrum • Implementation of new decisions ongoing • It is unclear whether the current government will still • Single installer expected by mid 2019 complete the proposal to change the electronic • Broadband only expected by mid 2019 communications law and the Royal Decrees regarding the attribution and renewal of an important • Pre-consultation on improved reference offers for number of frequencies. access to cable and fiber networks started • Spectrum auction in 2019 is unlikely. • Cost model: • If current government cannot finalize the file more • Public consultation regarding the results of a FTTH substantial delay will apply. and cable network cost model is running until February 15th. International intra-EU tariffs • The regulators will subsequently consult on the decision regarding the wholesale tariffs (to be based for voice & SMS on the results of the models). • Cost model results consultation expected in Q2 2019 As of May 15 th , tariffs for intra-EU international voice calls and SMS for residential customers will be regulated: EMF norms in Brussels • For voice calls a maximum of € 0.19/minute (excl. VAT) • For SMS € 0.06/SMS (excl. VAT) is the maximum • Expected to increase the permitted emissions from charge 6V/m to 14.5V/m in Brussels 15

Section three Financial Results 16

Orange Belgium Group: Q4 2018 key financial results Revenues ( € m) Adjusted EBITDA ( € m) 5.1% 10.1% Adjusted 342.2 81.4 325.4 77.4 318.0 313.0 306.6 69.6 66.7 EBITDA 60.6 margin 22.6%, +124 bp yoy Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 CAPEX ( € m) Operating cash flow* ( € m) -6.5% 73.8 69.0 48.3 28.8 45.5 21.2 33.1 31.8 8.4 -4.2 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 17 17 *Adjusted EBITDA - CAPEX

Group Retail Service Revenues: convergent service in particular - was the main growth driver Revenues ( € m) Retail service revenues ( € m) +5% +10% 342.2 325.4 199.3 181.4 +95% 32.7 16.8 +10% 199.3 181.4 154.4 153.3 43.9 40.1 85.6 82.7 17.4 17.3 10.3 11.1 Q4 2017 Q4 2018 Q4 2017 Q4 2018 Retail service revenues Wholesale revenues Convergent service revenues Fixed only service revenues Equipement sales Other revenues Mobile only service revenues IT & Integration Service 18

Group Adjusted EBITDA: 2 nd consecutive improvement driven by increase in revenues and improvement in cable performance Adjusted EBITDA evolution ( € m) +11.3% 16.8 -0.5 0.9 -9.3 + Retail service revenues 17.9 77.4 69.6 -1.1 - Others Q4 2017 Revenues Direct costs Labor costs Indirect costs Q4 2018 19

Total capex under control with a slight increase in cable capex driven by an increasing customer base -6.5% 22.7% 69.0 73.8 20.2% 11.3 12.3 9.3% 62.5 56.7 Q4 2017 Q4 2018 Total capex to total revenues ratio Cable capex incl. CPE, IT & Network, etc. Core capex 20

2018 guidance achieved What we guided What we achieved Revenue enue growth 2.7% 7% Slight ht growth Adjust usted ed EBIT ITDA DA € 275 275-295 295 m € 286. 6.1 1 m Core e cape pex (excl cl. Cable) Stabl ble e vs. 2017 135.7 7 / -4.2 2 % yoy 21

Section four 2019 guidance 22