Proximus Beats, Guidance Raised; Fiberklaar Deal To See Leverage Above S&P Limit

Rating: A2/BBB+ EUR Spreads Muted

• Last night announced EUR 246mn acquisition of remaining 50% of Fiberklaar JV from EQT Infra with closure expected in the coming days.
• “The funding of the transaction will have a limited and temporary impact on the Net debt / EBITDA ratio, for 2024 expected to be around 3.1x” as per the S&P definition with a comparable FY23 of 2.6x given. Guidance for the year had already been increased in June to 2.9-3x on the Route Mobile acquisition. The S&P downside threshold given at the Feb 2023 downgrade was 3x.
• The CEO’s mandate was also renewed for six years.
• Call takes place at 1pm BST; https://www.proximus.com/investors/reports-and-results.html
  

• Q2 pro-forma underlying revenue +2% YoY (-0.1% reported vs. company consensus) with domestic (three-quarters of revenue) +4.6% offsetting international -5.3%. Domestic growth driven by residential +5.3% and Business +4.8%.
• Q2 pro-forma underlying EBITDA +5.3% (+2.1% reported vs. company consensus) with domestic (nine-tenths of EBITDA) +5.1% and international +6.5%. EBITDA margin +0.2pp YoY to 30%.
• FCF of EUR -2mn down from EUR -20mn in Q223 despite cash CapEx fallinf from EUR 315mn to EUR 302mn. Net debt (excl. leases) of EUR 4.2bn up from EUR 3.3bn at Q1.
• Guidance changed; underlying pro-forma group EBITDA growth seen up to 2.5% (previous up to 1%), FY24 net debt seen ~3.1x (previously seen ~2.7x as of 23 Feb and “expected to land between 2.9X and 3.0X” in June) from an FY23 comparable of 2.6x. Other changes in image below.