Earnings call transcript: Proximus Q2 2025 sees modest EBITDA growth

Proximus NV reported Q2 2025 Group EBITDA up 1.2% to €491 million, driven by robust domestic performance, which saw a 1.9% EBITDA increase and led to a raised domestic guidance for 2025. Conversely, the global segment's EBITDA declined 5.4% due to accelerated headwinds in traditional messaging, prompting a downward revision of its 2025 outlook and a subsequent cut to overall Group EBITDA growth guidance to up to 1%. Strategically, the company expanded fiber coverage to over 45% of Belgian homes and signed a significant fiber collaboration MOU with Orange Belgium, while also accelerating non-core asset divestments, surpassing its €500 million target ahead of schedule.

Analysis

Proximus NV's Q2 2025 results present a stark contrast between its resilient domestic operations and a rapidly deteriorating global segment. The domestic business demonstrated strength, with EBITDA growing 1.9% year-over-year, prompting management to raise its full-year domestic EBITDA guidance to a growth of up to 2%. This performance is anchored by solid mobile postpaid additions and an expanding fiber network, which now covers over 45% of Belgian homes. However, this positive momentum was significantly undermined by the global segment, where EBITDA fell 5.4%. The company slashed its full-year guidance for this unit from 20% growth to a decline of 5-10%, citing an accelerated structural shift away from traditional SMS services and operational integration headwinds. This severe revision dragged the overall Group EBITDA growth forecast down to a maximum of 1%. Strategically, Proximus is making progress on long-term initiatives, notably through a new Memorandum of Understanding with Orange Belgium for fiber collaboration and an accelerated asset disposal program that has already surpassed its initial 2027 target, providing a buffer for its negative organic free cash flow.

Key Decisions for Investors

• Investors must weigh the robust performance and upgraded guidance of the core domestic segment against the severe deterioration and major guidance cut in the global business, which now poses a significant drag on group results.
• The newly announced fiber MOU with Orange Belgium and ongoing negotiations in Flanders are critical catalysts; monitor progress closely as successful execution is key to future CapEx efficiency and long-term network competitiveness.
• Given the dramatic negative revision in the global segment, exercise caution until there is clear evidence of stabilization or a successful pivot to growth products, as this unit introduces substantial uncertainty to the investment thesis.
• Despite the attractive 5.66% dividend yield and low 4.91 P/E ratio, the stock's strong 49.31% year-to-date performance faces headwinds from this negative surprise, potentially warranting a review of positions based on risk tolerance.