Belgacom Group - Financial results Q3 2012

• Belgacom upgrades its full-year guidance
• Solid third quarter: revenue up 1.5%; EBITDA decline limited to 2.7%
• Interim dividend of EUR 0.81 per share

Belgacom reports for the third quarter 2012 a Group EBITDA of EUR 460 million, before non-recurring expenses, or 2.7% lower than for the same period of 2011.  The higher pressure from regulation did not prevent the Group EBITDA from showing an improved trend versus the first half of 2012, mainly due to a very solid result for the Consumer segment.

Belgacom revises its 2012 full-year guidance upwards.  The full-year revenue is expected to grow up to 1%, while the EBITDA decline is expected to be limited between ‘-4% and -5%’.  This guidance does not include the second-quarter one-off accounting adjustment on revenue (EUR -12 million) and EBITDA (EUR -34 million) following the passing of the new Telecom Law.

In the third quarter 2012, Belgacom invested EUR 160 million. This brings the total amount invested over the first nine months of 2012 to EUR 520 million or 10.8% of Group revenue.

Belgacom generated EUR 248 million Free Cash Flow in the third quarter 2012. The lower FCF versus the same period of 2011 was mainly the result of higher income tax payments, an unfavorable evolution in working capital and the payment of the 4G spectrum license.

Belgacom continues to have a sound financial position.  Net financial debt amounted to EUR 1,467 million by end September 2012, one of the lowest debt positions in the European telecom sector.

On 25 October 2012, Belgacom’s Board of Directors approved to return to the shareholders a total gross interim dividend of EUR 0.81 per share. This is the combination of the normal interim dividend of EUR 0.50 gross per share and a one-time extra interim dividend of EUR 0.31 per share since Belgacom opted for an extra dividend instead of returning the EUR 100 million outstanding as a share buyback.  As a result, Belgacom expects to exceptionally increase its dividend to EUR 2.49 gross per share for the 2012 full-year results.   For the interim dividend:

• Ex-dividend date: 11 December 2012
• Record date: 13 December 2012
• Payment date: 14 December 2012

In the third quarter 2012, Belgacom’s customer base continued to grow solidly for Belgacom TV and Fixed Internet, mainly sold within a multi-play offer, while the Fixed Voice erosion remained contained.  Competitive moves on the Belgian Mobile Market had no major impact on Mobile churn levels.  Mobile postpaid continued to grow, pushed by the “Internet Everywhere” offer and increasing success of Mobile in a Pack.  Mobile pre-paid was exceptionally impacted in the third quarter by expired cards and by a net loss of Mobisud customers.

Belgacom’s customer base evolution over the third quarter and total customer base at end September 2012:

• + 39,000 Belgacom TV subscriptions (=32,000 new households + 7,000 second-stream users), increasing the total TV customer base to 1,340,000
• + 12,000 Fixed Internet lines, with a total Internet customer base of 1,626,000
• -  39,000 Mobile cards (+41,000 postpaid, -80,000 prepaid); total of 5,504,000Mobile cards (=including Voice and Data mobile cards sold through CBU, EBU, Tango, MVNO and SDE&W segments)
• + 37,000 multi-play Packs, with a total of 1,214,000 Packs
• - 30,000 Fixed Voice lines, with a total Fixed Voice customer base of 3,119,000

I’m pleased to announce a set of solid financials for the third quarter 2012, which is proof of our resilient position in the Belgian market.  In spite of competitive pressure, along with economic and regulatory headwinds, we saw our revenue trend improve further, while our EBITDA decline remained limited.  Once again, our strategy of convergence provided support to our business drivers.  Customers clearly appreciate our multi-play offers, with one in three Packs added in the third quarter including a mobile solution. With the good performance so far and our expectations for the last quarter, we are comfortable in raising our full-year guidance.