Proximus SA — M&A Activity 2021

Feb 9, 2021

Brussels, 9 February 2021, 08.00 CET – Privileged information

Proximus acquires full ownership of BICS, securing the flexibility to execute the development and growth path of BICS and TeleSign

In view of the ambitioned simplification in BICS' shareholding structure, Proximus has reached an agreement with MTN and Swisscom, the two minority shareholders of BICS, on the acquisition of their respective stakes of 20.0% and 22.4% in BICS for a total cash consideration of EUR 217 million.

Last summer, Proximus communicated to the market that the shareholders of BICS (Belgacom International Carrier Services) were exploring a potential sale of 51% of the company's shares. After investigation of different options, Proximus has concluded that the best way to have the necessary flexibility to create long-term value for BICS and TeleSign was to acquire 100% ownership of BICS.

The agreement leads to the acquisition of the minority stakes of MTN and Swisscom at an attractive valuation. BICS is a leader in the international carrier market with a proven track record and a clear path towards future growth in a business well mastered by Proximus. From a financial point of view, this acquisition allows Proximus to combine the robust free cash flow generation of BICS with the attractive revenue growth of TeleSign. Going forward Proximus will execute the growth plan of BICS and TeleSign, through a combination of organic investments in key growth domains, a strict focus on cashflow generation within the legacy business and an active role in capturing consolidation opportunities. At the same time MTN and Swisscom will remain important commercial partners of BICS. The combination of the above creates a strong perspective of sustainable value creation for the Proximus shareholders.

Two complementary players, well positioned to leverage further growth

As a global leader in digital communications, cloud communication services, mobility and IoT, BICS addresses business-critical needs of telecom players, virtual network operators, service providers, enterprise software providers and global enterprises.

Relying upon its leading operating platforms and its global scale, BICS has considerably diversified its activities over the past years, showing strong growth potential in new business domains such as roaming, IoT and cloud communication. At the same time, BICS is one of the few players with the critical mass required to realize economies of scale through consolidation in a highly fragmented market. Therefore, whilst impacted by worldwide travel restrictions during the Covid-19 pandemic, BICS is set to recover progressively as these measures are eased.

TeleSign is a fast-growing digital leader specialized in authentication and digital identity services to the world's largest internet brands, digital champions and cloud native businesses. Since the acquisition by BICS, it has achieved an impressive double-digit revenue growth year after year. With the recent appointment of Joseph Burton as CEO, TeleSign will enjoy increased autonomy to focus on accelerating its growth, leveraging its technology and global scale to help the world's largest enterprises with the digital transformation of their businesses. The TeleSign growth strategy is centered around driving further product innovation and differentiation, while exploring possibilities for geographic expansion.

As BICS and TeleSign transition to independent growth paths, they will sharpen their focus on execution in their respective markets while reinforcing operational synergies.

Financial highlights of the transaction

In 2020 BICS realized an EBITDA of EUR 131 million and a free cash flow of 64 million, a flat YoY FCF evolution despite the Covid-19 impact.

The enterprise value of the transaction amounts to €569 million. This implies a 4.4x EBITDA multiple. The expected cash outflow for Proximus amounts to €217 million in 2021, taking into account the company's net debt and customary debt-like items adjustments. The transaction will be FCF accretive for Proximus as of year one (transaction FCF yield of 11% vs. Proximus trading at a 2019 FCF yield of 6%), thanks in part to the elimination of dividends to minority shareholders within Proximus consolidated financial accounts (€26 million in 2020).

Proximus is confident that the increased strategic flexibility gained through this transaction, the intrinsic growth potential of both TeleSign and BICS and the prospects of a gradual recovery of the Covid-19 pandemic leave material upside relative to the transaction enterprise value.

The transaction will be financed by relying upon Proximus' existing €700 million credit facilities. The transaction does not alter Proximus' intention to return an annual gross dividend of EUR 1.20 per share for the earnings of 2020, 2021 and 2022, to be considered as a floor. Proximus also remains committed to its overall capital allocation strategy as presented during the Fiber Update on 13 January 2021.

Proximus will hold an investor and analyst conference call, today 9 th of February at 9 AM CET to provide further detail in relation to this transaction. Dial-in details and the presentation can be consulted on http://www.proximus.com/en/investors/proximus-acquires-full-ownership-ofbics.html

Proximus has been advised by Perella Weinberg Partners (financial) & Linklaters (legal).

Guillaume Boutin, CEO of the Proximus Group:

"I am excited to conclude this agreement, allowing us to retain a growth engine within the Group and maintain full control over the globally renowned assets of BICS and TeleSign. I am convinced we can unlock the next growth phase of BICS and leverage BICS' potential to consolidate a scattered market, while continuing to invest in key growth areas. Furthermore, we want to support TeleSign's fast growth as digital leader in programmable communications and digital identity services. I have full confidence in the capacity of Matteo Gatta and Joe Burton, as recently appointed CEOs of BICS and TeleSign, to guide this acceleration and ensure a bright future for both entities."

More information on www.proximus.com/press

Press Relations department: +32 2 202 44 44

Haroun Fenaux +32 476 60 03 33 Fabrice Gansbeke +32 472 050 702

About Proximus

Proximus Group (Euronext Brussels: PROX) is a provider of digital services and communication solutions operating in the Belgian and international markets. Delivering communication and entertainment experiences for residential consumers and enabling digital transformation for enterprises, we open up a world of digital opportunities so people live better and work smarter. Thanks to advanced interconnected fixed and mobile networks, Proximus provides access anywhere and anytime to digital services and data, as well as to a broad offering of multimedia content. Proximus is a pioneer in ICT innovation, with integrated solutions based on IoT, Data analytics, cloud and security.

Proximus has the ambition to become the reference operator in Europe through next generation networks, a truly digital mindset and a spirit of openness towards partnerships and ecosystems, while contributing to a safe, sustainable, inclusive and prosperous digital Belgium.

In Belgium, Proximus' core products and services are offered under the Proximus and Scarlet brands. The Group is also active in Luxembourg as, under the brand names Tango and Telindus Luxembourg, and in the Netherlands through Telindus Netherlands. The Group's international carrier activities are managed by BICS, a leading international communications enabler, one of the key global voice carriers and the leading provider of mobile data services worldwide.

With 12,931 employees, all engaged to offer customers a superior experience, the Group realized an underlying Group revenue of EUR 5,686 million end-2019.

For more information, visit www.proximus.com & www.proximus.be.