Proximus SA — M&A Activity 2024

Jun 3, 2024

Proximus Group shares its vision to become a worldwide leader in digital communications following Route Mobile acquisition

Today, Proximus Group provides the market with a deeper insight into its vision and ambitions for its international activities. The presentation highlights the Group's unique position in the global digital communications market, as well as the increasingly important contribution of the international business to the Group's growth and value creation.

On May 8th, Proximus Group completed the acquisition of a majority stake in Route Mobile, significantly reinforcing its position in the global CPaaS market. Route Mobile has created an industry-leading, scalable and flexible global CPaaS platform with strong omnichannel capabilities, handling over 10.5 billion monthly transactions. The company is exposed to fast-growing markets and can look back upon a strong financial track record of above market level revenue and direct margin growth.

The integration of Route Mobile marks a pivotal moment for the international ambitions of the Group and adds the necessary scale to unleash the full potential of the Group's global communications activity. In 2023, on a 12-month pro forma basis¹ , the International segment including Route Mobile represented around EUR 1.9 billion of revenue, c; EUR 480 million of direct margin, c. EUR 180 million of EBITDA and c. EUR 60 million of FCF.

Unique position covering the entire value chain to deliver superior growth

Proximus Group now encompasses the entire value chain of digital communications, from P2P Voice & Messaging and Mobility services to CPaaS and Digital Identity. It connects customers across the globe, enables end-user engagement and provides secure and trusted digital experiences.

Going forward, further building upon its end-to-end presence, Proximus Group is perfectly positioned to benefit from the healthy growth trends in most of these markets, especially in CPaaS and DI. In the next three years, market growth is estimated at 10 to 15% CAGR for CPaaS and about 15% CAGR for digital identity, while Mobility services are expected to grow around 5% CAGR. This growth will be mostly driven by hyper-personalized digital interactions and the demand for seamless and safe multi-channel experiences. In the mature P2P Voice & Messaging market, Proximus Group can leverage its scale to drive efficiencies and increase its market share despite overall declining volumes.

To deliver on its growth ambition, the Group will rely on four key differentiators: an unparalleled combination of global networks and advanced data capabilities; an unrivalled product portfolio; global goto-market capabilities with strong footholds and established brands all over the world; and a highly experienced team with expertise in a variety of digital communications domains, coupled to robust governance.

An ambitious plan to create substantial value and realize significant synergies

The international strategy will create material value for Proximus Group in the coming years through market share gains, synergy potential and high cash conversion.

By 2026, Proximus Group expects the International segment to bring an annual revenue between EUR 2 billion and EUR 2.5 billion across the three brands BICS, Telesign and Route Mobile, with the direct margin expected to range between EUR 600 million and EUR 650 million. The EBITDA margin is expected to improve from around 9% in 2023 to about 14% by 2026, supported by more than EUR 100 million of

yearly EBITDA synergies at run rate² , which represents an upgrade compared to previously communicated projections (EUR 90 million). Finally, the low capex intensity and highly scalable nature of the international business is expected to drive the cash conversion ratio to 50%-75%, therefor expected to contribute significantly to the Group FCF.

Updated guidance for 2024

The consolidation of Route Mobile as of May 1st 2024 leads to a revision of the Group guidance for 2024, with a positive impact from synergies already expected this year. The revised projections are compared to pro-forma figures for 2023, including 8 months (May-December 2023) of Route Mobile results to allow for a like-for-like view.

• On a direct margin level, Proximus Group expects its International segment to deliver a midto-high single digit growth for 2024, on constant currency basis.
• The Group EBITDA is expected to grow up to 2% year-on-year, benefitting from the initial synergies in 2024 (exceeding the initial guidance of 'up to 1% growth' communicated at the start of 2024).

As indicated upon closing, the financing of the Route Mobile transaction is fully secured through the EUR 700 million bond transaction issued in March 2024. The Group maintains a sound balance sheet, confirming its expectation to maintain it net debt to EBITDA ratio below 3.0X, with healthy credit ratings. For 2024, the net debt/EBITDA ratio is expected to land between 2.9X and 3.0X.

Guillaume Boutin, CEO of Proximus Group:

"The acquisition of a majority stake in Route Mobile is a gamechanger on our journey to become a leader in the global digital communications market. Driven by our unique position and powerful differentiators, we want to connect, engage and protect digital communications for our customers and deliver significant value for the Group. I am very confident in our ability to deliver on our growth ambitions and very excited to work towards the future success of the Group, together with our talented teams across the globe."

The full presentation is now available through this link. Analysts and institutional investors are kindly invited to the Q&A session today (3 June 2024) at 14.00 CET. Detailed instructions can be found on the website. A separate call for journalists will be held at 15.30 CET.

Further information at: www.proximus.com/press

Press team: +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), headquartered in Brussels, is a provider of future-proof connectivity, IT and digital services, operating in the Benelux and global markets. The Group is actively engaged in building a connected world and in ensuring the trustworthiness, security and sovereignty of digital services, to the benefit of society.

Proximus has the ambition to build the #1 gigabit network for Belgium and plays a central role in creating inspiring digital ecosystems, while fostering an engaging culture and empowering ways of working. Building upon these strengths, Proximus aims to contribute to an inclusive and sustainable digital society, delight customers with an unrivalled experience and achieve profitable growth both locally and internationally to deliver long-term value for stakeholders.

In Belgium, Proximus' core products and services are offered under the Proximus, Mobile Vikings, Scarlet and Proximus NXT brands. The Group is also active in Luxembourg (Tango and Telindus Luxembourg) and in the Netherlands (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 Telesign, the Group also encompasses a fast-growing leader in authentication and digital identity services, serving the world's largest internet brands, digital champions and cloud native businesses.

With 11,654 employees, imbued with Proximus' Think Possible mindset and all engaged to offer a superior customer experience, the Group realized an underlying Group revenue of EUR 6,042 million end-2023.

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