Company Presentation May 2020 2 Cautionary statement This - - PowerPoint PPT Presentation

Company Presentation

May 2020

2 “This communication may include some forward-looking statements, without limitation, regarding Proximus’ financial or

• perational results, certain strategic plans or objectives, macro-economic trends, regulation, future market conditions

and other risk factors. These forward-looking statements rely on a number of assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside Proximus’ control. Therefore the actual future results may differ materially from those expressed in or implied by the statements. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication. Except as required by applicable law, Proximus disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained herein should be considered in conjunction with all the public information regarding the Proximus Group available, including, if any, other documents released by the company that may contain more detailed

• information. Information related to Alternative Performance Measures (APM) used in this presentation are included in

the consolidated management report.”

Cautionary statement

3

Content

Who Who we are, we are, wh what at we d we do The The markets markets we we

• perate
• perate in

in 2019 2019 ach achievemen ievements ts & & key key figur figures es Strategy Strategy #insp #inspir ire20 e2022 22

1 2 3 4

4

Who we are, what we do 1

5 ✓ Custo Customer mer cen entri tric an and d di digi gital tal comp mpan any

• Aiming to deliver the best customer experience and to simplify the customer journey.
• Partner of citizens, businesses, and Belgian society in their digital evolution, offering adapted products.

✓ Fu Future ture pro proof

• f Netwo

Networks rks

• Fixed and mobile networks offering access anywhere and anytime to digital services and data, as well as to

a broad offering of multimedia content.

• Investing in future-proof networks and innovative solutions, creating the foundations for sustainable

growth and becoming a truly customer-centric digital company.

✓ Co Contri tributi buting to to society & society & respectin respecting o g our ur plan planet et

• Create an inclusive, safe, sustainable and prosperous digital Belgium.
• Climate-neutral for our own operations since 2016 and we are rapidly shifting towards a more

circular economy, requiring fewer resources and producing less waste.

Who we are, what we do

Proximus is a provider of digital services and communication solutions

• perating in the Belgian

and international markets.

✓ Valuab Valuable le emp employees loyees

• Our employees are a valuable asset.
• Creating a culture where employees can develop, make a difference, contribute to our results and be our

best ambassadors.

5

6

Our sense of purpose

“Opening up a world of digital opportunities so people live better and work smarter.”

We have a long history…

7

New CEO w CEO: #I #Insp nspir ire 20 2022 22 strate strategy gy

Guillaume Boutin appointed as CEO for a six-year term.

….and prepare for the future.

8

2013 2013

Lau Launch nch 5G 5G

202 2020

’17-’18: Ac Acquisitio quisition

• f small-sized,

highly specialized IT companies

9

Clear governance model

As a limited liability company under public law, governance is imposed by the Law of 21 March 1991 on the reform

• f certain autonomous economic public

companies (“the 1991 Law”). For matters not explicitly regulated by the 1991 Law, Proximus is governed by the Belgian Code of Companies and Associations of 29 March 2019 ("the Belgian Code of Companies and Associations") and the Belgian Corporate Governance Code of 2020 ("the 2020 Corporate Governance Code").

Shar Shareh ehol

• lder

ders Boar Board d of

• f Directors

Directors

General policy, strategy, supervises operational management.

Governance structure

Audit & Compliance Committee Nomination & Remuneration Committee Transformation & Innovation Committee

CEO CEO & Executive & Executive Committee Committee

Operational management including, but not limited to, day-to-day management.

Or Orga ganis nisation ation

10

Number of shares % shares % Voting rights % Dividend rights Number of shares with voting rights Number of shares with dividend rights Belgian state 180,887,569 53.51% 56.04% 55.92% 180,887,569 180,887,569 Proximus own shares 15,257,928 4.51% 0.22% 700,775 Free-float 141,879,638 41.97% 43.96% 43.86% 141,879,638 141,879,638 To Tota tal 338 338,025,135 135 10 100.00 .00% 10 100.00 .00% 10 100.00 .00% 32 322,767,207 32 323, 3,467,982 *31/03/2020 Transparency declarations: According to Proximus’ bylaws, the thresholds as from which a shareholding needs to be disclosed have been set at 3% and 7.5%, in addition to the legal thresholds of 5% and each multiple of 5%. The voting rights of all treasury shares are suspended by law. Proximus has 700,775 treasury shares that are entitled to dividend rights (to cover the dividends linked to the outstanding stock options granted to key management and senior management of the Group).

We are listed on Euronext Brussels & are part of the BEL20

Proximus' main shareholder is the Belgian state, owning ~54% of the company’s shares

(status end March 2020)

Board of Directors

Stefaan De Clerck (1) Chairman until AGM 2022 Guillaume Boutin (1) Chief Executive Officer

Board of directors

11

• Max. of 14 members, incl. CEO
• Candidates proposed by the Nomination and

Remuneration Committee

• Members appointed at the AGM
• Any shareholder holding ≥25% has the right to

nominate directors for appointment pro rata to his shareholding

Wholesale

Smart City

Prox Proximu imus s PL PLC C under r Belgian ian Pu Public ic Law aw

Enterprise Business Unit Consumer Business Unit Customer Operations Corporate Affairs Finance HR Strategy & Transformation

Sup Suppor

• rt

t un units ts Se Servi vicing un units ts

Network Business Unit Guillaume Boutin

CEO

Jan Van Acoleyen

Chief Human Resources Officer

Geert Standaert

Chief Technology Officer

Sandrine Dufour*

Chief Financial Officer

Dirk Lybaert

Chief Corporate Affairs Officer

Bart Van Den Meersche*

Chief Enterprise Market Officer

Renaud Tilmans

Chief Customer Operations Officer

Executive Committee

Jim Casteele

Chief Consumer Market Officer

Executive committee

12

Ne Netw twor

• rk un

unit

New

* Sandrine Dufour and Bart Van Den Meersche are leaving the company respectively on 1 June and 1 July 2020. Replacement selection process

• ngoing.

13

The Markets we operate in 2

14

The Consumer Market

Flanders (north) Wallonia (south) Brussels

• National player
• Challenger for Fixed in North
• Leader for Fixed in South except for dTV
• National leader for Mobile
• No-frills provider owned by Proximus
• National challenger for Fixed & Mobile
• Cable Competitor in South & 1/3 of Brussels
• Challenger for Fixed voice, Fixed broadband & Mobile
• Leader in South for dTV
• In process of being sold by Nethys & Brutélé
• Cable competitor North & 2/3 of Brussels
• Leader in North for Fixed
• Acquired BASE mobile network
• National Mobile player
• Challenger for Mobile
• No fixed offer
• Owned by Telenet
• +30 MVNOs
• Challengers for Mobile
• National player
• Mobile network operator
• Offering Fixed services via Cable Wholesale

c.11.4

11.4 M

inhabitants

• c. 4.9

4.9 M

households

Be Belgium lgium

PROXIMUS dual-brand strategy

15

The Enterprise Market

• Maintains solid position in Telco market.
• Market leader for fixed as well as mobile
• Strong ICT offer supported by

partnerships & acquisitions (e.g. Telindus, Codit…)

• Challenger on fragmented IT market
• N°1 M2M player
• Telenet high focus on Flanders, but national

coverage via multiple access technology and partnerships

• Reinforced its position through take-over of IT

integrator Nextel and cable operator SFR

• Mainly operating in the SME market
• Main challenger on the mobile

enterprise market

• International M2M Competence

Center of the Group is hosted by Orange Belgium

• WIN is sister of VOO ; the ICT B2B branch of

Group Nethys. Focus on Wallonia & Brussels.

• VOO is mainly focusing on smaller

enterprises, WIN on higher segment

• Own network and Wallonia Data Center

Regional coverage (and national coverage via partners) Intern ternation ational al play ayers rs Nic Niche play ayers rs Main I Main IT comp

• mpeti

titors tors (f (frag ragme mente ted market) market)

Main telecom competitors:

Be Belgium lgium

16

The Wholesale Market

• National player
• Maintains solid position in wholesale Telco

B2B market, mobile backhauling market, traditional voice interconnect (fix + mobile) and transit market

• Challenger for MVNO & Fixed B2C market

MVNO competitors: Fixed B2C competitors: Fixed B2B competitors:

• National MVNO player supported by take-over
• f BASE in 2015.
• Offers Fixed WS services to Orange
• High focus on Flanders, but national coverage

via multiple access technology and partnerships

• Active on the MVNO market
• Main challenger on the wholesale

fixed B2B market

• Mainly focusing on domestic &

local operators active in Belgium Inte tern rnation tional opera rator tors Dome

• mesti

stic op

• perators

rators MVNO players Backhauling operators

• Focus limited to Wallonia
• Offers Fixed WS services to Orange

The International Carrier Market

17

One of the key global voice carriers and the leading provider of mobile data services worldwide. BICS connects the world by creating reliable and secure mobile experiences anytime, anywhere. Their solutions range from global mobile connectivity, to seamless roaming experiences, fraud prevention and security, and to global messaging and the Internet

• f Things.

Acquired TeleSign in 2017, and became world’s 1st t end-to to-end Commu

• mmunicat

cation

• n

Plat atfor

• rm

m as as a Ser a Servi vice ce (CPaaS) provider.

Main competitors:

18

Notes

• The financials results of Proximus Group are reported under the accounting

standards IFRS 15 and IFRS 16 (replacing IAS 17 as of 2019).

• All figures included in this presentation are on ‘Underlying’ basis, allowing for a

meaningful YOY comparison. See the published quarterly results for a comprehensive view on the company’s financials.

• Figures are restated for reporting changes applicable as of Q1 2020 and differ

in this view from the figures published in the Annual Report. (mobile inbound revenues moved from consumer/enterprise to the wholesale segment; changes in X-play reporting, i.e. now on customer level)

• Figures are rounded. Variances are calculated from the source data before

rounding, implying that some variances may not add up.

2019 achievements & key figures 3

2019 achievements & key figures: Proximus Group

19 Pro roxim ximus us Gro Group up

Domestic BICS Consumer Enterprise Wholesale

20

Domestic operations generate 77% of Group revenue, and 92% of EBITDA

92% 92% 8% 8% € 1,8

1,870 70M

+0.3% YoY

BICS Domestic 77% 77% 23 23% BICS Domestic € 5,686

,686M

• 2.1% YoY

61% 32% 9%

Consumer Enterprise Wholesale Other € 4,

4,386 386M

• 1.7% YoY

All figures are on underlying basis.

FY19 Group revenue FY19 Group EBITDA

Domestic Revenue:

21

acquisitions in the ICT domain and hirings in business-critical functions

Group operating expenses reduced in 2019 through solid domestic cost control

13,627 12,658 12,143 463 727 789

2015 2018 2019

21

FTEs

>1,800 FTEs left in the Early leave plan ahead of retirement

FTEs

21

67% Share of Workforce expenses on total (2019)

BICS Domestic

Additional hiring at TeleSign to support its growth Focus on efficient domestic cost structure

Gro Group O up Oper perati ating g expen expenses ses (M€)

• 0.8%

YoY

Voluntary early leave plan ahead of retirement and natural

• utflow

FTEs

22

Investing in high-quality networks and overall customer experience

Fib Fiber bui er build ld TI TITAN TAN Pro Projec ject Bes Best t Mob Mobile ile netw etwork rk Co Copp pper er upg upgrad rade New New Dig Digita ital plat platfo forms rms

4G population coverage

• outdoor 100%
• indoor 99.6%

Best Mobile Internet recognised by Test- Achat/Test-Aankoop 5G launched since 01/04 Proactively strengthening

• ur transport network

Backbone of all voice, data & TV traffic: data capacity

x10 x10

FttH/B in 13 cities & Nation-wide greenfield deployment 95% FttC, 90% vectoring 60% @ 100 Mbps

79 79 Mbps

• Avg. VDSL Speed

Migration to single mass market order-to-cash IT chain finalised Automation & AI boosting efficiency & customer experience Digital tools & integrated cockpits

1,019 1,027

FY'18 FY'19

Accrued Capex* (M€)

*Excl spectrum & football

23

2019 Net income impacted by Fit for Purpose transformation cost

Net income 2018 Net income 2019

Underlying EBITDA variance Incidentals D&A* Net Finance result** Tax expense*** Others ETR 22.8% in 2019 vs. 26.4% in 2018

* Excluding Lease depreciations ** Excluding Lease interests

YTD

(M€)

• Incl. provision

Fit for Purpose transformation plan

*** lower 2019 income tax base following the Fit for Purpose restructuring cost

24

• Early leave plan refers to voluntary early leave before retirement
• FCF includes the lease payments to stay comparable to 2018 FCF

ION-IP Umbrio Codit Mainly Codit Earn-out

Normalized FCF level - fairly stable YoY

€ 504M FCF normalized for acquisitions

Including lower cash from assets disposal (buildings) Business Working Capital (strong 2018 comparable base)

(M€)

25

Keeping a sound financial position

* Excluding Lease liabilities ** Non controlling interests Net financial position

• Dec. 2018

FCF Dividends Other Net financial position

• Dec. 2019

Adjusted Net Debt*

(YTD, M€)

156 500 100 600 500 150 100 11 400 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Investment loans ¥ private placement Institutional Eurobonds Commercial Paper

Debt Maturity Schedule

(M€)

Liq Liquidit uidity end 2 2019: 19:

• €332m investments,

cash & cash equivalents (incl. derivatives)

• EMTN Program €3,500m

(€1,950m outstanding)

• CP Program €1,000m

(€156m outstanding)

• Committed credit line

(bilaterals/club/syndicate): €700m Cr Credit dit ratin atings gs: Standard & Poor’s A (negative outlook) Moody’s A1 (stable outlook)

(status 10/04/2020)

5.1 5.1 Yr

Average debt duration

1.8 1.8 %

Weighted average coupon

Dividends to NCI**

• 2,143
• 2,185

2019 achievements & key figures: Domestic operations

26 Pro roxim ximus us Gro Group up

Domestic BICS Consumer Enterprise Wholesale

27

Strong Domestic cost control, more than offset lower 2019 revenue.

Yo YoY Y DO DOMES MESTI TIC C Revenue Revenue evolutio evolution per per pro product gro duct group up

FY’18: 4,460M FY’19: 4,386M

Dom Domestic estic Rev Reven enue ue (M€) Dom Domestic estic EBI EBITDA TDA (M€)

Underlying Domestic revenue significantly impacted by low- margin Terminals and regulation.

4,460 4,386 2018 2019 1,711 1,718 2018 2019

27

ICT Mobile Postpaid Advanced Business Services Fixed Services Others Tango Wholesale Mobile Prepaid Terminals

39.2%

EBITDA margin

+0.8pp

• 1.7

.7%

+0.4

.4%

28

45.9%

• 0.5 p.p.

YoY

Supported by our dual-brand approach, we grew our Internet and TV customer bases and kept a solid market position

Broadband Park (in ‘000) TV Park (in ‘000) Fixed Voice Park (in ‘000)

2,057 2,088

End '18 End '19

1,620 1,640

End '18 End '19

2,550 2,401

End '18 End '19

Q4’19 vs. Q4’18 +31

31 K

Customers YoY +1.5

.5%

Market share End ‘19 Q4’19 vs. Q4’18 +21

21K

Customers YoY +1.3

.3%

37.4%

+0.2 p.p. YoY

Q4’19 vs. Q4’18

• 149

149 K

Customers YoY

• 5.8

.8%

Market share End ’19

29

38.7%

• 0.7 p.p.

YoY

Total mobile

We gained Mobile postpaid customers in a competitive setting

Mobile Park (excl. M2M) (in ‘000)

4,011 4,103

End '18 End '19

+92k

92k YoY

i.e. +2.3

.3 %

Postpaid

822 717

End '18 End '19

• 106k

106k YoY

i.e. -12.8

12.8 %

Prepaid

Market Shares %

41.6%

• 1.0 p.p.

YoY

Postpaid

3.2 .2GB

+27% YoY National Mobile Data usage

(average/consumer/month)

29

Eroding prepaid in a shrinking market, partly driven by the strategy to migrate customers to similar Postpaid pricing plans, at higher value.

30 +3.9%

Convergent revenue

Consumer revenue was supported by the progressing convergence rate

+1.9%

• 4.9%

+2.3 p.p. Convergence rate +1.6% ARPC (€)

Convergent stands for Customers subscribing to both Fixed and Mobile services.

+0.7% Customer Revenue

Convergence rate

31

Families: Millennials: Price Seekers:

Bizz Online & Bizz All-in

for SE customers

Small businesses:

Segmentation to meet the needs of Consumer & Small Business

31

Tuttimus Tuttimus Minimus Minimus

+ + + + +

32

For our Enterprise customers, we diversified our portfolio over the past years to stay relevant & protect our Telco business.

An increasing share of the B2B revenue is generated by ICT

(ICT revenue on total Enterprise revenue)

38% 2019 2016 35%

33

In a competitive market, our Enterprise segment kept a strong position in Mobile, and contained the erosion of legacy services by bringing customers to future proof technologies.

• High-quality mobile network
• Provide best E2E experience
• Managed mobile services
• Simplified offers
• Developing mobile application

integration competences

• Dynamically guide customers

in their Voice & UC journey

• Convergent voice solutions
• Migrate customers to future proof

Fix data solutions: VDSL and FIBER

• Improve customer experience
• Achieve network simplification

1,028 1,063

END '18 END '19

Mobile voice cards (000’s)

1,327 1,778

END '18 END '19

M2M (000’s)

541 500

END '18 END '19

Fixed Voice lines (000’s)

+3.4

.4%

+34

34%

33

2019 achievements & key figures: BICS

34 Pro roxim ximus us Gro Group up

Domestic BICS Consumer Enterprise Wholesale

35

BICS, operating in International Carrier market, faces an ongoing transition with usage moving from Voice to Data

BICS Ebitda YoY (M€) BI BICS CS Eb Ebitd itda a & Eb Ebitd itda a mar margi gin percent percentag age e

154 153 2018 2019

TeleSign contributing since November 2017

35

11.4 .4% 11.7 .7% Margin %

36

Solid Solid increa increase se in in non

• n-Vo

Voice ice volumes volumes

(in M messages,

• incl. )

BICS benefiting from the boosting mobile data volumes at higher margins…

408 486 182 196

2018 2019 REV DM

10,174 12,992

2018 2019

13bn 13bn

International SMS

(P2P & A2P, 2019)

A2P

Grow Growing Non ing Non-Vo Voice ice revenu revenue & Dir Direct ect margi margin

36

40 40% Direct

Margin

37

…while managing the decline in legacy Voice

939 815 135 129

2018 2019 REV DM

24,463 24,649

2018 2019

BICS maintaining a top-10 world position in a Voice market under pressure

Voice Voice volu lumes

(in M minutes)

High cash generator thanks to scale & operating leverage

37

Ongoing revenue erosion mainly from lower unit revenue following lower termination rates, competition and a less favorable destination mix, resulting in a direct margin decline. In 2019 the insourcing by MTN started, yet had only a very limited impact. 16% Direct

Margin

38

1st end-to-end CPaaS provider though the combination of BICS and TeleSign

Brings customers and platforms brings the mobile and worldwide reach

eCommerce Social / Internet Gaming Communications Cloud Connectivity Platforms & Expertise Using BICS’ Worldwide network… …to reach directly >700 mobile operators worldwide and improve sourcing of:

Direct SMS and Voice Terminations Mobile End-User Data Voice APIs (e.g. Anonymous calling)

39

Strategy #inspire2022 4

40

Train and attract best Belgian digital talents 2.4M gigabit homes enabled by Proximus by 2025 (iso 2030) Undisputed mobile leadership with 5G Top 1 or 2 telco NPS , driven by superior user experience, by 2022

• 40% in

IT cost by 2025 with legacy-free IT >2.1M internet lines (Consumer segment) by 2022 Sustainability and circularity embedded in everything we do Net positive CO2 impact and truly circular company by 2030 Open networks to grow wholesale revenues >3M unique Proximus active monthly apps users* by 2022 Support digital reskilling

• f 1000+ Belgian job

seekers yearly >€ 100M additional revenues from new non-telco by 2022

*including web apps

Build the best GIGABIT NETWORK for Belgium Operate like a “DIGITAL native” company GROW PROFITABLY through partners & ecosystems Act for SUSTAINABILITY & digital inclusion

On 31 March 2020 we announced our new strategy: #inspire2022

Committed to bringing value for our shareholders

41

1

41

A clear plan for gigabit connectivity for Belgium, generating an attractive return

Large-scale Proximus fiber plan Strategic partnerships to increase efficiency Digital transformation for a scalable Network-as-a-service Complementary technologies

(e.g. FWA, 3rd party networks)

5G CAPEX optimization through network sharing Proximus retail market share gains Proximus wholesale market share opportunity Future-proof CAPEX and copper CAPEX avoidance

Network CAPEX

• ptimisation…

…yielding a solid long term return on investment

Proximus ARPC uplift Sustainably lower OPEX with decrease of

• perational costs

Brussels Flanders Wallonia

IRR above WACC in all regions

WACC

41

42

1

42

HOME & BUSINESS PASSED

Q12020 2022 2025

We aim for 2.4M fiber Homes Passed by 2025

Scaling up to

>400k HP/Year ~7% Coverage/Year

13

Cities started

307k+ 1.1M

2.4M

>2025

Solid commercial fiber results

(in current fiber footprint, fiber vs VDSL)

CONSUMER MARKET ENTERPRISE MARKET

NPS

• vs. VDSL

> +7%

ARPC

(greenfield / brownfield)

60%

Migration rate

(within 2 years)

+26%

Fixed Data ARPU

(mono-site)

VDSL Fiber

x2

Gross gains

• 50%

Network cost to

• perate

( in fiber zone +5 yr)

43

1

43

1 Gbps 100 Mbps 200…250 Mbps FTTH Cable 10 Gbps 50 Mbps

Ultra Vectoring up to 250 250Mb Mbps ps complemented by Mobile

Bandwidth Coverage

Leverage cable regulatory framework

VDSL@35MHz + Mobile

A multi-technology approach to complement fiber

Expected broadband coverage by 2025

44

1

44

We can build at scale, with predictable costs…

Short & mid-term levers We compensate for lower density

…through industrialisation and efficiency improvements

• Continuously optimize and simplify the processes
• Introduce new materials, design and deployment

methods (aerial, more facade,…)

• New mechanism to allocate our deployments lots

geographically to our construction partners

• Conduct termination activities of customers only

after completion of sale

• Leveraging innovative multi-technology portfolio

to optimise gigabit coverage

%

2019 2020 2021 2022

Unit Cost Home Passed € Home Passed Facade/MDU%

75% € 850 today € 1000

45

1

45

We were the first to launch 5G in Belgium

5G 5G Ful ull 5G 5G 4G 4G

Up to Up to 30 30%

better experience than 4.5G

First to commercially launch 5G on 1 April 2020 First taste of 5G benefits for our customers Several cities across Belgium Usage of Sub-3GHz spectrum make it possible without new spectrum allocation & new EMF norms Once 5G dedicated spectrum becomes available, extension of network to deliver “gigabit” experience 45

46

1

46

Leap forward in mobile network density thanks to sharing End User Benefits

• Broad deep indoor

coverage

• Higher speed
• Longer battery duration

(reduced distance between mobile and antenna)

We closed a Radio Access Network Sharing partnership with clear benefits

Standalone 2020 Network Sharing as of 2024

3800 sites 4600 sites

+20 +20%

Mobile sharing reduces TCO versus standalone

2020 as of 2024

35-40M€

per year savings

✓ Each operator bears 40% less sites while enjoying a greater grid. ✓ Common grid with higher radio quality and lower operating costs ✓ IRR is a multiple of WACC

47

Relentless focus on simplified customer experience & offers

1 1 Towards 100% first-time right customer journeys 2 2 Intuitive and slick digital interfaces 3 3 Transformed Enterprise portfolio & go-to-market

NPS OPEX Transformational approach on internal processes & enablers

4 4 Extensive automation & AI in key processes 5 End-to-end simplification for strongly reduced IT cost 6 Comprehensive skills transformation 6 6 main tr main trans ansfor formation mation le levers vers to grow our NPS, deliver -1%/-2% net indirect

OPEX reductions p.a. by 2022 and bring higher efficiency beyond 2022:

A fundamental transformation of our operating model for structural efficiency gains and a better NPS

48

2 Our Enterprise segment will undergo a massive multi- year transformation

Next gen go-to-market Future-proof portfolio Proximus Enterprise as a smart integrator a broad, segmented and modular next gen portfolio

Segment-specific: from 6 to 12 segments Opti-channel with x2 indirect channel reach and strong digital presence Increased focus on mid-market Strong partnerships Co-creation with customers Modular & templated solutions Convergence telco & ICT Pro-active move to next gen connectivity

(e.g. 60% top fixed data customers migrated to SD-x)

Top-tier in public and hybrid cloud Top-tier in Cybersecurity

48

3

49 Best devices Leading digital platform Best content through partners

Stayin Staying g rele levant ant and and slo slowin wing down wn co cord rd cuttin utting th thanks to anks to a simple a simple and and im immersiv sive multi lti- sc screen n cont ntent nt exp xperie ience nce

cu cura ration tion editor itoria ializati lization

• n

recom recommend ndation tion

Grow through partnerships, increasing our relevance for customers and open new sources of revenues

ePresswin-win partnership with local publishers Belgian Data Alliance (under construction) with local publishers, broadcasters & telcos

3

50

Evolution of revenue mix (Belgium, Enterprise segment)

Embracing the shift to next-gen ICT in Enterprise

To be the trusted partner in digital transformation

Grow our technology consulting capabilities Build public cloud & edge business and scale professional services on Microsoft Azure Lead in the cyber security market Develop new value streams leveraging 5G

2019 2025

Telco ICT

Shift to next-generation ICT to adapt to market value transfer to virtualized & cloud services

One of the first operators in the world to launch Azure Edge computing

51

Do Doing busi ing business ness with a with a hear heart t for sustainability for sustainability

• Embedding sustainability at the core of our

strategy

• An ambition, inspired by our sense of

purpose: Creating an inclusive, safe, sustainable & prosperous digital Belgium

• Commitment to the UN Sustainable

Development Goals

51

52

Respecting

• ur planet

CO2 neutral for own activities CO2 reduction

• 79% vs 2007
• 27% vs 2015
• 50% energy consumption
• f decoders in past 5 years

>31k GSMs recycled in 2019 Smartphone collection campaign with Umicore to recycle 100k in 2020

Contributing to society

New partnership with coding school and incubator MolenGeek 10,300 kids trained

• n safer internet use in 2019

Sponsor of the Paralympic athletes

diggit

Caring for our stakeholders

Parental control on TV and smartphones Mio active users on MyProximus end Dec’19 Training days/employee on average in 2019

1.6 1.6 4.7 4.7 100 100%

Enabling a better digital life

Improving fixed and mobile connectivity in white zones Supporting local innovation ecosystems Building trust in digital as founding partner of the Coalition

We a We are commit re committed t ted to

• making

making a so a societal cietal impact impact

vendors contracts containing social, ethical and environmental standards >336k modem and decoders refurbished in 2019 Partner, connecting sick children with their class - used by 1 in 4 schools Reverse mentoring of seniors by kids, school projects, 5000+ seniors trained

4

53

Raising the bar for a greener future

• -30% carbon emissions by 2025
• -10% indirect carbon emissions by 2025
• Aiming for the first Belgian CO2 neutral supply chain
• Towards 100% green energy and fossil fuel phase
• ut

Net Net posi positive tive

• Become a zero waste company
• Green network with 100% recycling rates
• Circular data centers
• Phone recycling as a new normal – ambition to

recycle min. 100,000 mobile phones in 2020

Tr Truly uly cir circula cular

Become a net positive & truly circular company by 2030

53

54

54

Financial Strategy

54

55

A path to turn the company back to growth, while ensuring a sustainable return for our shareholders

Covid-19 impacts aside, we expect over

• ver 2020-2021

som some e fin finan ancial p ial pressure ressure, especially especially with ithin in Pro roxim ximus us En Enterp terprise rise, which will undergo a massive transformation before returning to growth, with a strong strategic shift from Telco to ICT. To support this, we increase IT T in investments in th estments in the e sho short rt term term, reducing strongly the full IT cost afterwards. To extract benefits sooner, we accelerate our val value ue- ac accreti retive ve netw etwork in rk inves vestm tmen ents ts, with a pull-forward of fiber coverage and building the best 5G network. At the same time we will realiz realize e stro strong g cost st red reduc uctio tions. s. As a result, we expect to return return to to to topli pline e an and d EBI EBITDA TDA gr growt wth as as of 2 f 202 022 2 for our Domestic operations. The expected sign significa ificant nt step u step up in p in finan financin ing g needs needs

• ver 2020-2025, will be funded th

thro rough ugh efficient efficient cap apita ital reallocatio l reallocation an and d explo explorin ring g strateg strategic ic pa partn rtnersh ership ips to co-invest while securing fiber coverage. We reb rebased ased our ur di dividen vidend d to a sustainable level, creating a path to return to dividend coverage.

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Domestic Revenues

• excl. terminals

Domestic EBITDA Rebalance CAPEX

(Accrued CAPEX)

Increase debt

Driv Drive e Domestic Domestic EB EBITD TDA A gro growth wth

2020 2021-2022 2023-2025

Domestic Indirect OPEX

Further indirect OPEX decrease Max of € 1.3BN/year

• incl. fiber &

5G

Asset disposals

Revenue & EBITDA on underlying basis CAPEX excluding spectrum & football rights Indirect OPEX = excluding ICT billable workforce expenses

Reduce by

• 1% to -2%

(3YR CAGR) Extra debt capacity of up to € 600M Net debt/EBITDA ratio just below 2.0x (S&P leverage) Up to € 700M Grow as of 2022 Grow as of 2022

Op Optim timiz ize e cap apita ital all l allocati ation

Maximum of € 1.3Bn per year

• incl. fiber & 5G

Committed to bringing value for our shareholders

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Driving Domestic EBITDA growth as of 2022

Strong efforts and new savings initiatives to decrease Domestic indirect costs

B2B transformation investments to drive long-term growth

2022 2022 -2025 2025 Bac Back k to to gr growt wth

• Erosion in Consumer Terminal revenue

(low margin) & Prepaid

• Ongoing Fixed Voice decline
• Arrival RCS to replace SMS (no margin)
• Pro-active migration to next gen.

solutions

• Higher direct costs following ICT growth

strategy Ongoing legacy trends

• NPS improvement benefits (Consumer & Enterprise)
• B2C market share gains and ARPC uplift from enlarged fiber

footprint

• Increased new revenue streams supported by eco-systems
• B2B gradually improving on strategic shift to ICT
• Wholesale access revenue to grow

2020 2020-2021 2021

Fiber network benefits, increasing new revenue streams and gradual recovery in Enterprise to compensate for contracting legacy erosion. Strong ambitions in Consumer segment Offset by …

• Segmented B2C value proposals

driving growth in digital households

• New B2C revenues (Pickx, e-press,

advertising and SE ICT offers…) In spite of …

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Structural efficiencies will lead to further indirect cost optimisation

• 1% to

1% to -2% 2% CAG CAGR

Indirect* OPEX Indirect OPEX Total OPEX 2019 2019 2022

Wages Other net reduction Other benefits net

• f additional hiring,

training and other re-investments.

1,535M 1,630M

*excluding ICT billable workforce expenses Workforce cost reduction

• 1,722 gross FTE

(1,347 FFP voluntary leaves, 375 ELP)

• incl. inflation-based

salary indexation (on decreasing headcount)

We target an indirect OPEX reduction of 1%-2% CAGR

• ver the next 3 years, while reinvesting to support growth

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* Total cost of termination benefits in the FFP transformation plan ** Net termination cost, before income taxes, booked as incidental. This excludes positive impacts on o.a. complementary pensions.

Costs & CFL

288

• 151
• 33
• 26
• 79

2019 2020 2021 2022 >2022 Cash outflow impacts

253M€ Net incidental cost**

For 2020:

• Voluntary leaves: 1,347 FTEs (largely March 2020)
• Very limited involuntary leaves
• On top of final wave of Early Leave Plan ( ~ 375 FTEs)

A A more more ef efficie ficient nt com compan pany thr through

• ugh the

the Fi Fit for P t for Purpose(F urpose(FFP FP) ) tra transformati nsformation

• n pla

plan

FFP plan approved by Trade Unions 12/2019 Plan ambitions to improve the company’s productivity, flexibility and agility on the market: ▪ Workforce reduction in the domains impacted by digitalization, automation & changing market conditions. ▪ Simplification of HR rules ▪ New working conditions for employees hired as of 1 January 2020 ▪ Increase of reskilling and upskilling efforts

FTEs

Wo Workfo rkforce rce re redu duction ction in in t the he FFP fra framew mework

• rk

*

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60

2019 2020 2021 2022

• av. 2023-2025

€ 1Bn

2.4M HP

in fiber

Including potential partnerships Ambitioning a wider fiber footprint, in an economical way.

CAPEX*:

*accrued, excl. spectrum and football rights

€ 1.3Bn

Accelerated fiber coverage, moving CAPEX forward 5G investments (2021-2023) IT Transformation (2020-2022)

Investing substantially in the best networks in Belgium, while rebalancing the annual CAPEX envelope

Growing fiber CAPEX to 40%

• f total envelope by 2025

201 019 202 025 202 022

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We have concrete financing means, while there is no short-term dependency on debt capital markets.

Optimized capital structure Dispose of assets Strategic partnerships

€ 1.4Bn

Extra funding needed 2020-2025

Keep a sound financial position through disciplined capital re-allocation

✓ Up to € 600M additional debt capacity ✓ Keeping Net debt/EBITDA ratio just below 2.0X (S&P financial leverage) ✓ Up to € 700M proceeds identified ✓ Multi-year divestment program ✓ Covering part of our investment need ✓ Redeploy capital to higher return assets ✓ No short term dependency on debt capital market

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We are committed to an attractive shareholder return

€ 1.2

expected gross dividend per share

Proximus intends to return over the result of 2020, 2021 and 2022 an annual gross dividend of EUR 1.2 per share, to be considered as a floor.

• € 0.50/share paid as interim Dividend in

December of the same year

• € 0.70/share in April of the following year

On an annual basis, the proposed dividend will be reviewed and submitted to the Board of Directors, in order to keep strategic financial flexibility for future growth, organically or via selective M&A, with a clear focus on value

• creation. This also includes confirming appropriate levels of distributable reserves. The shareholder remuneration policy is based on a number of assumptions regarding future business and market evolutions and may be

subject to change in case of unforeseen risks or events outside the company's control.

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2020 Outlook

Guidance metrics Actuals FY 2019 Guidance FY 2020

EBITDA - CAPEX € 844M €780-800M

Group underlying EBITDA € 1,870M / CAPEX

€ 1,027M /

Including the company’s best estimate for the Covid-19 impact on its revenue and operations, with impacts on the Group EBITDA expected to be compensated by Capex adjustments, Proximus expects to end 2020 with Group underlying EBITDA minus CAPEX in the range of €780-800M.

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Contact

Call: +32 2 202 82 41 +32 2 202 62 17 E-mail: investor.relations@proximus.com Proximus Investor Relations website : www.proximus.com/en/investors

Nancy Goossens

Investor Relations Director

Eline Bombeek

Investor Relations Manager

Investor Relations 64

To get a more comprehensive overview of Proximus, we invite you to read the following documents available on the Proximus website:

• Annual Report 2019:
• #Inspire2022 - Capital Markets Day:
• Sustainability brochure: