Edited Transcript of PROX.BR earnings conference call or presentation 21-Feb-20 1:00pm GMT

For Proximus brand, we see a growing number of households signing for — signing up for converged offers, with especially the EPIC and Minimus packs having strong traction. By end 2019, over 60% of our household customer base was convergent.

At the same time, Scarlet did well in the segment of price features. Through the no-frills offer from Scarlet, we answered the needs of customers that are looking for the cheapest offer in the market, while we preserve our premium Proximus brands.

We remain very attentive in differentiating both brands, with the Proximus brand typically providing a richer offer. For example, on the 1st of December, we have launched My e-Press for Proximus Internet customers, this in partnerships with 2 press groups.

On the Enterprise side, it remains challenging to preserve our strong position. In a tough competitive environment, we grew our mobile customer base, while the pricing pressure is reflected in a lower ARPU.

For ICT, however, we ended the year on a high note. This mainly came from higher revenue from ICT product deals as well as a continued favorable revenue evolution from high-value professional services.

To remain successful, we continue to reinvent ourselves. Therefore, to unlock the digital potential of our Enterprise customers, we have launched Proximus Accelerators. This is a collaborative ecosystem of Proximus subsidiaries with highly specialized digital IT experts. They help companies in the digital transformation by creating fully integrated ICT support.

And thanks to the progress made on our own digital journey, we realized strong cost efficiencies in our domestic operations. One example to illustrate our efficiencies, we recorded a 20% decrease in our call center’s volumes.

The fourth quarter financial results brought us to our full year achievements in line with our 2019 guidance, with domestic revenue, excluding terminals, down by 1.2% and a slightly growing domestic EBITDA. With BICS included, the 2019 group EBITDA was stable compared to last year as we anticipated.

The CapEx for 2019 amounted to EUR 1.27 billion. This included, amongst other things, the further developments of digital platforms, the ongoing upgrade of our transport network, investments in mobile to continue to guarantee top quality for mobile customers and includes, of course, also the ongoing deployment of our fiber network.

For so-called brownfield fiber, we are today deploying in 13 Belgian cities, while we continue to deploy greenfield fiber across the country.

The fourth quarter free cash flow generation was seasonally low and compared to an exceptionally high fourth quarter of 2018. Excluding cash out for acquisitions, the full year normalized free cash flow was EUR 504 million, so fairly stable in comparison with 2018.

For our shareholders, the Board of Directors decided to propose to the Annual General Shareholder Meeting of the 15th of April 2020 to return, over the result of 2019, a stable growth dividend of EUR 1.5 per share, of which EUR 0.50 was already paid as interim dividend in December 2019.

As a last point, and following the agreement we concluded with the majority of the unions on our Fit for Purpose transformation plan, we are currently proceeding with a voluntary leave plan. An equivalent of 1,347 FTEs have signed up for this, with the majority of them leaving by the 1st of March 2020. The period of uncertainty has not been easy for many of our employees, and we are thankful for their continued commitment. We can now start a new chapter, working on the future of Proximus with positive energy and renewed ambition.

With this, I’ve covered my introduction and propose we now start with your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have our first question from Mr. David Vagman from ING.

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David Vagman, ING Groep N.V., Research Division – Research Analyst [2]

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First, if we can come back on the free cash flow generation in Q4 and the working capital deterioration. Does it have anything to do with the change in payment terms related to CapEx, for instance, prepayment to building companies related to the fiber rollout? That’s my first question.

And then on the net adds momentum in mobile, in both postpaid, let’s say, and prepaid, could you explain a bit the dynamic that you’ve seen that explained your figures? So is it that you see an inflow of, let’s say, prepaid customer moving up to postpaid? And what kind of conclusion should we draw in terms of ARPU?

And then maybe a last question on the mobile network sharing agreement. What is, in your view, the chances of this agreement to be — to being accepted by, let’s say, the regulators? And do you expect any actual beliefs or remedies at all, so impacting the financials of the deal?

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Sandrine Dufour, Proximus PLC – CFO [3]

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Okay. Thanks for your question. I’ll start with the free cash flow question in Q4. So as Guillaume said in his introduction, what happened in Q4 is really a seasonality element. We had in Q4 2018 an exceptionally high free cash flow. Just looking back even further at history in ’16 and ’17, we had a free cash flow in Q4, which was roughly the same as the one that we have in ’19. And there are no elements, such as structural changes in CapEx payment behavior, if you’re referring to what has been announced in other geographies. I just want to highlight the fact that we have some payments that are also in Q4, so tax payment, double VAT. We have some HR costs in the quarter as well. We have the full spectrum cash out. And so the comparison isn’t unfavorable for this last year, but last year was exceptional. It was also exceptional for the disposal of buildings in 2018, and we had less of them in Q4 ’19. And so I look at the full year, and for the full year, we have a nice coverage of our dividend because we are releasing EUR 504 million. That covers our dividend.

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Unidentified Company Representative, [4]

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Thank you. So on the mobile net adds, our mobile net adds for Q4 are indeed rather soft versus competition. We have done a very strong Q4 in acquisition. But at the same time, Orange has boosted their data and their products mid-November, so where we have recalibrated our mobile offer on January 1, making sure that value is back in line with the market, offering more data, so making our mobile proposition again more competitive and attractive, and we see the first positive results of that.

With respect to your question on prepaid, postpaid, you have to bear in mind that in Q4, Scarlet stopped their prepaid offering, so that has impacted our prepaid results in Q4.

And then finally, on the mobile ARPU, mobile ARPU in Q4 is impacted by the e-Press offer linked to recalibration between the fixed services and the mobile services.

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Guillaume Boutin, Proximus PLC – CEO & Director [5]

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On the network sharing deal, as we mentioned, we are awaiting for the outcome, which is foreseen for mid-March. And we are, I would say, quite confident on the outcome as we have taken into account remarks of the BIPT, and we believe that the agreement reflects all those, so we are quite confident.

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David Vagman, ING Groep N.V., Research Division – Research Analyst [6]

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And do you remain confident that there won’t be, let’s say, financial impact, that’s what you mean? Or I understood from Orange that you have to basically bring clarification on the government side more than, let’s say, stopping the sharing in some regions, for instance, or — yes, or talking about technology that you basically have to be less ambitious.

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Guillaume Boutin, Proximus PLC – CEO & Director [7]

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What we shared with you, as I said, it was part of the remarks of the BIPT. And as I said, all the agreement reflects all the remarks that have been raised by BIPT, so we are confident. Thank you.

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Operator [8]

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Next question is from Mr. Roshan Ranjit from Deutsche Bank.

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Roshan Vijay Ranjit, Deutsche Bank AG, Research Division – Research Analyst [9]

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Two for me, please. Firstly, just on CapEx, I think back when you announced your fiber plan in 2016, you guided to fiber CapEx being around 30% of your overall envelope in 2019. Can you give us an update here and where, basically, we ended up, please?

And secondly, you talked about a tough trend in Enterprise. Is that purely down to usual pricing down from customers? Or are you seeing more competition from your peers because we have seen them continually make small B2B acquisitions? So is that having an impact on your customer base?

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Sandrine Dufour, Proximus PLC – CFO [10]

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So I’ll take your first question on CapEx. In 2019, the percentage of our CapEx dedicated to fiber is not yet at 30%. However, it’s growing versus the previous year. And I propose that we give a full picture on the trends when we discuss with you at our Capital Markets Day at the end of March.

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Roshan Vijay Ranjit, Deutsche Bank AG, Research Division – Research Analyst [11]

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So if I meant to say, is it — are we talking about a few percentage points below? Are we talking about close to 20%? Are you going to give a bit of detail on that?

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Sandrine Dufour, Proximus PLC – CFO [12]

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It’s above 20%.

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Bart Van Den Meersche, Proximus PLC – Chief Enterprise Market Officer [13]

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And then on your question on Enterprise, so it’s not a secret that we have a strong position in Enterprise and therefore, that we get competition and pressure from competition as well from peers, sometimes from other new players. But it is mainly, how would I say, noticeable in mobile, where the ARPU is somewhat under pressure due to competitive pressure.

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Operator [14]

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Next question is from Mr. Emmanuel Carlier from Kempen.

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Emmanuel Carlier, Kempen & Co. N.V., Research Division – Research Analyst [15]

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Three questions, one is on e-Press. So how much did e-Press contribute in 2019 on sales and EBITDA? And I don’t think it’s a lot, but could you also give maybe a bit of a view on 2020 because in the French market, I remember that this was a huge tailwind, which then got reversed? So I would like to know the impact and if you believe something similar could happen.

Then secondly is on the transformation plan. So you have announced the cash out, but not the OpEx savings yet. Is there a way to give a bit of a range of how much that will result in OpEx savings in the coming years?

And then the last question is on mobile service revenue trends, which weakened. I think you highlighted that it’s partly driven by e-Press. Just want to check if other elements have played along as well. And if I remember well, I think Orange Belgium lowered 2, 3 weeks ago — or not really lowered, but they increased the data allowance. So could that have an additional negative impact on the mobile service revenue trend in 2020?

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Unidentified Company Representative, [16]

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So on e-Press, as you know, we launched e-Press on December 1, 2019, so that means that, indeed, the impact is limited in Q4, yet it already influences a little bit the year-over-year trends. As I said, it will contribute positively to domestic revenues, especially on fixed. But due to accounting allocation rules, it will have a negative impact on mobile services. But overall, obviously, it’s a positive revenue contributor.

Looking forward to 2020, you can expect that we have an uplift of a few euros per household, but you have to take into account that not all households have access to the e-Press offer, so this will not be visible as such, as it will be averaged with households that don’t have access to e-Press.

And then maybe on the third question, which is, I think, linked to the first on the mobile service revenue. It is indeed e-Press that has the impact on mobile service revenue, so there are no other elements impacting.

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Sandrine Dufour, Proximus PLC – CFO [17]

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If I may just complement on the first question because you made a comparison with the French situation. I would like to emphasize that in Belgium, we’ve done this in all transparency with the tax administration, so it’s compliant with the existing Belgium tax law. So I just want to draw your attention on that stuff for the security of the revenue impact.

Regarding your question on the — on our Fit for Purpose plan. So indeed, we’ve announced the cash impact. We’re not — we thought that on the OpEx ceiling benefits, it would make more sense to bring everything together to give you the full picture, including the strategy forward. So we will share this with you in March. But just in terms of gross savings, I think what you can do is use a proxy of around EUR 65,000 per FTE and get a sense of the gross savings. Now what we are not seeing there yet because we’re still working on it, it’s all very fresh data, is how much resources we’ll have to reinvest in new hiring and in terms of also resources to make sure that we ensure the continuity of the business. Remember, we had also the early leave plan at the beginning of the year. We had another — the last wave of departure, with 375 people leaving the company on the 1st of January. We have most of the 1,347 FTEs leaving very soon, so we need as well to spend resources to ensure the continuity, and it’s better that we give you a full view on the total benefits in a month.

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Emmanuel Carlier, Kempen & Co. N.V., Research Division – Research Analyst [18]

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And the new people that you need to hire, are these different profiles? Or is that a similar kind of cost per FTE?

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Sandrine Dufour, Proximus PLC – CFO [19]

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Yes, we will comment further on this. But remember what we had said that this transformation plan has to do with really making sure that we have the right profile for the future of the company. And so indeed, we’ll have to strengthen our position in domains, which — where we need some different skills as well. But we’ll comment further on that at a later stage because part of this will be done as well through upskilling and reskilling internally. So it’s a full combination of how we move the internal resources and complement this with external resources for the future.

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Emmanuel Carlier, Kempen & Co. N.V., Research Division – Research Analyst [20]

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Yes. And then on e-Press, how many households will get impacted by that?

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Sandrine Dufour, Proximus PLC – CFO [21]

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Well, less than the total households potential.

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Emmanuel Carlier, Kempen & Co. N.V., Research Division – Research Analyst [22]

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It’s only for the Tuttimus customers, if I remember right.

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Sandrine Dufour, Proximus PLC – CFO [23]

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So my colleague said that we can say the number is 1.2 million.

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Operator [24]

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Next question is from Mr. Nicolas Cote-Colisson from HSBC.

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Nicolas Cote-Colisson, HSBC, Research Division – Head of European Telecoms Equity Product, Telecoms, Media and Technology [25]

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Two questions. First, a follow-up on a previous question on EBU. Can you tell us if there was more pressure in the small and medium-sized company segment or if it was more with the larger accounts? And also explain why it is happening now in Q4 and not before given your competitors were already pretty active in B2B beforehand.

And the second question is on networks and speed. Your competitors have increased connection speeds lately. And I wonder, what was your view on this? Does the speed differential trigger some churn in your broadband base? Or maybe the other way to ask the question, what’s the main drivers for churn? Is that speed pricing or any other factors?

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Bart Van Den Meersche, Proximus PLC – Chief Enterprise Market Officer [26]

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On your first question, quite honestly, the competitive pressure is not mainly on small and medium enterprise or on large. I mean, we see them in both. Now it’s not new in Q4. So we’ve, I think, already for many — for more than — I would say, for several years, our competitors are saying they are targeting the enterprise market, but I think we have been able to sustain pretty well. The only difference in Q4 is that there is an ARPU impact, which is partially competitive. There are partially a number of one-offs, which make the ARPU decline in Q4, I would say, exceptionally high compared to previous quarters.

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Nicolas Cote-Colisson, HSBC, Research Division – Head of European Telecoms Equity Product, Telecoms, Media and Technology [27]

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And do you mind if I ask you, what are the kind of one-offs? Is that a big contract for negotiations? Or…

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Bart Van Den Meersche, Proximus PLC – Chief Enterprise Market Officer [28]

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Sorry?

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Nicolas Cote-Colisson, HSBC, Research Division – Head of European Telecoms Equity Product, Telecoms, Media and Technology [29]

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What are these one-offs in Q4 then? Is it because of the big contracts being renegotiated? Or…

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Sandrine Dufour, Proximus PLC – CFO [30]

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There are 2 types of one-off, Nicolas. One are some indeed contracts pricing renegotiations, which impact was retroactive. And second has to do with the correction related to out of bundle.

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Unidentified Company Representative, [31]

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So on the second question linked to connection speeds, it’s a nice marketing claim. But on average, a family today, and even in the near future, will not immediately require those speeds of 1 gigabit. Speed is, definitely for the moment, not on top of the customer mind. So as long as we can provide what they need, we will definitely be able to continue. And it only becomes an issue when you have challenges with what we call the hygienic speed, so the very low speeds become an issue. And as you know, we have a very good copper network. So our customers are, today, getting more than what they are currently consuming.

Don’t forget also that cable has had a speed advantage over the past years. And nevertheless, we have been able, Proximus, to increase our market share even in the North of the country. So it’s overall the consumer experience that counts. So it’s about in-house and WiFi experience. It’s about the network topology. It’s about providing low latency, for example, on gamers. And it’s to make sure that you invest in the convergent experience, like we have done with our fixed TV experience, the cloud gaming that we have launched with Shadow and the e-Press solution that we have launched recently.

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Operator [32]

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Next question is from Mr. Michael Bishop from Goldman Sachs.

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Michael Bishop, Goldman Sachs Group Inc., Research Division – Equity Analyst [33]

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Just a couple of questions, please. Firstly, I was just trying to recap. Your cash CapEx seems to be running at about EUR 1.1 billion versus the accrued CapEx of around EUR 1 billion for the last 2 years. So I was just wondering if you could just run through why we’ve got that difference and whether that will continue going forward.

And secondly also, it would be interesting, given the focus on, I guess, the headcount cost, what you think the impact is on indexation for this year in absolute millions, if possible.

And then thirdly, do you have any comments about, like, Orange Belgium this morning around the potential acquisition of VOO?

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Sandrine Dufour, Proximus PLC – CFO [34]

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Right. So the difference between the cash CapEx and the accrued CapEx has to do with the elements that we’ve always highlighted. So as you know, when we guide on our CapEx, it’s excluding the spectrum CapEx, which is spread over. So that’s one element. And our guidance on CapEx as well exclude the football CapEx, so the Jupiler League and the Champions League, which are spread over the years. So that extend the bulk of the structural difference. Now beyond that, you have some working cap element that can play here or there depending on, I would say, the seasonality of how spread the accrued CapEx over the year, but the structural element are these 2 aspects.

Sorry, and on headcount cost indexation, it started in April — as of April, and it’s EUR 4 million per quarter, just to give you a sense.

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Guillaume Boutin, Proximus PLC – CEO & Director [35]

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Just one comment on the news that we read as you have this morning, in the press. Indeed, Orange Belgium is changing the — on court, the procedure. Difficult for me to comment. It’s too soon to comment. But in any case, we were not expecting the finalization of the deal before the summer time period. So we will see how it goes, but nothing more to say at this stage.

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Sandrine Dufour, Proximus PLC – CFO [36]

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I just want to complement my previous answer. So the answer I made on the EUR 4 million is just on the index, the Belgium index. But as you know, we also have some baremic increase of our salary, which are automatic, and also the merit increase, which, if I combine the pure index with baremic and merit, it’s a higher number.

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Operator [37]

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Next question is from Mr. Ruben Devos from KBC Securities.

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Ruben Devos, KBC Securities NV, Research Division – Senior Financial Analyst [38]

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I’ve got three. One is related to the temporary 5G user rights. The BIPT proposed to award those given the potential delay until 2021 for the spectrum auction to take place. So was curious whether you could share your thoughts on this proposal and whether that would make you rethink, in some way, 5G-related investments.

Then secondly, just on the uptake of fixed mobile convergent bundles. I understand you’ve grown penetration to 60% helped by EPIC and Minimus packs, amongst else. Yes, could you add more color on the success of those bundles? What has been catching on? Or which specific features have been successful within the subscriber base?

And then lastly, yes, with respect to BICS and then, specifically, the impact of progressive insourcing of MTN. I understand that there’s’ been a timing shift leading to a more limited impact in 2019. That suggests the in-sourcing could be a drag on this year’s forecast. So just wondering whether it would be possible to quantify the impact you expect to see in 2020 from that.

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Guillaume Boutin, Proximus PLC – CEO & Director [39]

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So first, on the temporary licenses proposed by the BIPT. So at Proximus, I think we welcome these initiatives. The attribution of those licenses is a step forward that would — that should allow us to continue our mobile network development strategy. And we said that in the past, Proximus has always expressed its willingness to launch 5G as soon as possible in Belgium. And we certainly intend to apply in order to serve our customers with 5G technology in use cases. And of course, we are looking forward to the draft decision and consultation by the BIPT.

At the same time, we hope that the spectrum auction for the licenses can be organized as soon as possible. As you know, we see the auction process as the only way to award spectrum in the needed quantity and for long-term duration, which — with a lot of the required perspective for operators to continue to invest in mobile networks and innovation. And it’s important that the auction process grants spectrum to players with clear intention to invest, and we want to avoid fragmentation of a scarce resource, like the radio spectrum.

In terms of timing now for the auction, it’s very difficult to say when it will happen. Hopefully, by the end of this year, but most probably beginning of next year.

So on the question on the convergence bundles, we had a growth of 11,000 convergent households in Q4 year-over-year, of which 8,000 are linked to Minimus and EPIC.

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Daniel Kurgan, Belgacom International Carrier Services SA – CEO [40]

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This is Daniel, on your BICS question, indeed, we signed this contract with MTN early 2019, and the implementation has been slow. It’s quite complex, and it took more time than expected. But indeed, it will definitely — it’s underway, and it will definitely impact 2020, which we have forecasted, but we are not giving any specific guidance on that item.

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Operator [41]

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Next question is from Mr. Ulrich Rathe from Jefferies.

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Ulrich Rathe, Jefferies LLC, Research Division – Senior European Telecommunications Analyst [42]

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One is whether your perspective on the announcement from BIPT yesterday on the mobile spectrum sort of reissue. It sounds a bit like it’s a fairly limited amount, but still the existing MNOs wouldn’t be able to bid. So what’s your perspective on that?

And the second question is would you — there was sort of fairly detailed discussion, so far, over that e-Press bundling. Would you be willing to talk about your expectations, what this does net-net to the revenues and the EBITDA, what the sort of rough effect would be in sort of percentage terms? That would be very helpful.

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Guillaume Boutin, Proximus PLC – CEO & Director [43]

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On the 4G spectrum that we announced yesterday, so we thought indeed that the BIPT has launched colorful candidates for one of the blocks of 50 megahertz in the 2.6 gigahertz bands mainly used today in densities. And you know that Proximus cannot participate because of the Royal Decree foresees a cap of 20 megahertz, and we currently hold already 2x 20 megahertz in these bands. And thus, we are maximizing our holdings according to the cap fixed in 2011. That said, even if — as you mentioned, it’s not enough to have a full rollout of 5G for — or 4G, sorry, for the country because we need more bandwidth than the one that we got. We are surprised by this decision, and I have some questions about the initiatives, almost a decade after the first auctioning without any strategy or consultation. There is also another concern for us, which is that, apparently, the BIPT would grant this license for 15 years, so until 2035, while the other part of that band is licensed until 2026, which creates a little bit of desynchronization. So that’s been a surprise, but let’s see how it goes.

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Sandrine Dufour, Proximus PLC – CFO [44]

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On your second question on interest, I think you can easily do the math. We gave the targeted households, 1.2 million. We said it’s a couple of euro of revenues. So it’s very limited in Q4 because it was just launched in December on top line. And as for EBITDA, we give a good chunk of that to the publisher. So I think I have described the type of math you can do to get a sense on a month and on 12 months.

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Operator [45]

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Next question is from Madame Nayab Amjad from Citi.

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Nayab Amjad, Citigroup Inc, Research Division – VP [46]

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I have two questions, please. What is the outlook for competition in the market, especially if BIPT cuts cable wholesale rates further? And the Orange Belgium has gained good traction in its dual play offer. Has Proximus seen a churn as a result of this?

And my second question is, if the government wanted to reduce the stake, are there any limitations or approval from parliament needed to reduce the stake?

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Unidentified Company Representative, [47]

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So on the question linked to competition, competition will no doubt remain elevated in Belgium. This set, it’s not an irrational market. As you said, competitors have launched skinny offers in the past year. So far, we have been successful in continuing to grow our customer base. This, thanks to our dual brand and our segmentation strategy, with Scarlet for price seekers, EPIC for millennials, Tuttimus and Minimus for families and Bizz All-in for our small enterprises. As you know, our strategy is to increase convergence and by doing so, increasing stickiness of the base. As we already explained before, our mobile net adds have indeed been rather soft. But on the broadband side, we are 1 of the 2 growing in the market. And on TV, we are the only one growing in Q4.

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Bart Van Den Meersche, Proximus PLC – Chief Enterprise Market Officer [48]

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On the second question related to the state reducing our stake, there was a temporary law that allowed the government to do that without passing by parliament, but that law ended last year. So if they want now to reduce the stake, they have indeed to pass by parliament.

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Operator [49]

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Next question is from Mr. David Wright from Bank of America.

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David Antony Wright, BofA Merrill Lynch, Research Division – Head of Developed EMEA European Telecoms Equity Research and Director [50]

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Very brief. Just reading some press reports about Citymesh as a potential interested party in new spectrum. Do you guys come across them much in the B2B space? Do you find that mobile solutions are growing, those kind of fixed substitution solutions are growing and starting to take share? Or is that kind of operator starting to put pressure on enterprise mobile prices anyway? Any information there would be useful.

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Guillaume Boutin, Proximus PLC – CEO & Director [51]

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Just one quick concern, then I will let Bart complement. But it’s not that a surprise that Citymesh is applying for the spectrum because, today, Citymesh has already some local spectrum in the 3.6 gigahertz band. So it’s logical that — especially in the first phase of 5G, the non-standalone phase of 5G, they are looking for supporting spectrum in the 4G band.

As for the 5G spectrum currently had by Citymesh, it should be noted that there is — there are local licenses that do not allow for nationwide deployment. And their license will expire in 2025 and only covers 40 megahertz of spectrum. I will comment — if I’ll let Bart comment on the more competitive points.

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Bart Van Den Meersche, Proximus PLC – Chief Enterprise Market Officer [52]

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So on the fact — or the question do we come across them, initially, Citymesh was, I mean, focusing on WiFi, as you probably know. And then because, almost by a coincidence, they got spectrum on 5G, they started to work on this. We have only come across them in the harbor of Zeebrugge, and then they have also some tests going on in the rest of the airport. But it’s not a surprise to us. I mean, it’s not a surprise in the sense that we know that there are a number of players that are looking into the 5G MPN work, or let’s say markets. And it confirms only that there is a 5G opportunity, which will be sizable in the B2B market. And so we knew, and we know that they are targeting on this market, together with some others. The only surprise is, now, this 4G license. But while this is an open market, we believe that Proximus is able to place to help B2B customers in their MPN projects, and we are really focusing on that because we have a high market share in mobile, because we have a better mix of spectrum, because we offer a hybrid and seamless combination of private and public solutions. And above all, as a digital service provider, we can leverage our unique combination of owning the spectrum, having deep mobile network knowledge, while also bringing security, cloud and application integrations to the table. So we make sure that we can differentiate on a series of elements that is going to be important in this context.

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Operator [53]

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We have one last question from Mr. Matthijs Van Leijenhorst from Kepler Cheuvreux.

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Matthijs Van Leijenhorst, Kepler Cheuvreux, Research Division – Analyst [54]

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It’s regarding the dividends. I am aware that you will have this Capital Markets Day, but during previous calls, you made it pretty clear that in case your free cash flow generation was not enough to cover the dividend, you will be — you would use the balance sheet or you will gear up in order to pay the dividend. Is this still the policy?

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Sandrine Dufour, Proximus PLC – CFO [55]

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We have not announced a new policy on dividend. And as we said, we will come back on this at the end of March. But I can confirm what we said in the past that this was put in the context of a potential acceleration of our fiber deployment. And in that case, we said that, as we have a very strong balance sheet with a very low level of debt and net debt to EBITDA, we thought we had room to releverage the balance sheet and use this as a way to fund deployments and — which, in that case, would mean that our free cash flow might not cover the full dividend. That’s what we said, and I confirm what we said. Now we will discuss all of that with you at the end of March.

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Operator [56]

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We have no other question. Back to you for the conclusion.

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Nancy Goossens, Proximus PLC – Director of IR [57]

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Okay. Thank you. As there are no more questions, we can end this call. So thank you for your participation, and I hope to see many of you at the Capital Markets Day at the end of March. Thank you. Bye.

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Operator [58]

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Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.