Investment Proposition




At the end of September 2022, we held our Capital Markets Day, elaborating on the future strategic value drivers for both our fixed infrastructure business (“NetCo1”) as well as our Residential, Entertainment & Media and B2B domains (“Telenet”). We will continue to deliver sustainable profitable growth and create long-term value for all of our stakeholders. With our updated strategy, we intend to transform Telenet from the leading broadband, media and entertainment company in our footprint into a leading customer-centric provider of connectivity, entertainment and digital services, and drive sustainable growth. We plan substantial investments in our fixed and mobile network infrastructure over the next few years as well as in our digital and data platforms. This should further drive value for customers and lead to increased benefits over time.

In 2022, we have laid the foundations to achieve this ambitious plan. Aligned with our 'Partners In Life. For Life.' vision, we successfully closed the sale of our mobile telecommunications tower business to DigitalBridge in June last year for a total consideration of €745.0 million, equivalent to a multiple of 25.1x EV/EBITDAaL 2021. In July 2022, we announced a strategic cooperation with Fluvius1, combining both of our HFC networks in Flanders and parts of Brussels into a new fully funded infrastructure company NetCo and with a clear roadmap to bring 10 Gbps speeds to our customers through a mixture of both DOCSIS and FTTH technologies. In October 2022, we increased our share ownership in the media group Caviar from 49% to 70%. This will allow us to leverage our broadcasting assets by anchoring local unique content and expanding proprietary productions internationally. And most recently, we increased our shareholding in the Luxembourg-based cable operator Eltrona from 50% (minus one share) to a full 100% and we will consolidate Eltrona's results from January 1, 2023. As a result of these completed transactions, we are also presenting our FY 2022 headline financials on a rebased basis. Please see 6.2 for more information. The guidance detailed below is presented on a rebased basis in order for investors to be able to assess our results on a like-for-like basis. It excludes the ramifications of the NetCo transaction, which is pending regulatory approval by the European Commission expected by summer this year. As of this year, we will also transition to Adjusted EBITDAaL guidance as opposed to Adjusted EBITDA following more significant lease payments since the sale of our mobile tower business in June 2022.

Heading into 2023, we will tightly monitor our cost base in light of the 11% mandatory wage indexation in Belgium effective January 2023, which will result in a significant increase in our staff-related expenses. In addition, we expect to incur higher energy costs compared to 2022 during which our energy costs increased sharply by approximately 70% as a result of the war in Ukraine. We took advantage of the market turmoil in Q4 to increase the proportion of energy spend covered under fixed price contracts from approximately 45% at the end of September last year to approximately 90% currently. We intend to absorb these inflationary pressures through continued digital savings, tight cost control and targeted rate increases to offset the aforementioned impacts. With that, we expect healthy top line growth between 1 and 2% for 2023 on a rebased basis, while we target broadly stable rebased Adjusted EBITDAaL over that same period which would be similar for Adjusted EBITDA.

In 2022, our CAPEX intensity increased to approximately 25% of revenue driven by the start of our 5G investments, continued investments in our data and digital platforms as well as targeted fiber investments in certain areas. For 2023 we expect our CAPEX to revenue ratio to be around 26% as we continue to see (i) higher spending on amongst others our 5G roll-out, (ii) targeted standalone fiber deployments and trench sharing opportunities as in 2022 and (iii) preparatory investments in IT and product development to prepare for the launch in Wallonia in early 2024.

This translates into a lower Adjusted Free Cash Flow as compared to 2022 when we achieved an Adjusted Free Cash Flow of €409.0 million. For the full year 2023, we target an Adjusted Free Cash Flow of around €250.0 million. With that, our dividend floor of €1.0 per share (gross), or €108.6 million in aggregate, remains well covered. 

Pending regulatory approval by the European Commission, expected by summer 2023


(a) On a reported basis, our expected revenue growth for the full year 2023 would be between 7% and 8%.

(b) Quantitative reconciliations to net profit (including net profit growth rates) and cash flows from operating activities for our Adjusted EBITDAaL and Adjusted Free Cash Flow guidance cannot be provided without unreasonable efforts as we do not forecast (i) certain non-cash charges including depreciation and amortization and impairment, restructuring and other operating items included in net profit, nor (ii) specific changes in working capital that impact cash flows from operating activities. The items we do not forecast may vary significantly from period to period.

(c) Excluding the recognition of the capitalized football broadcasting rights and mobile spectrum licenses and excluding the impact from certain lease-related capital additions on our accrued capital expenditures.

(d) Excluding payments on mobile spectrum licenses acquired as part of the 2022 multiband spectrum auction, and assuming the tax payment on our 2022 tax return will not occur until early 2024.