Proximus Boosts Profit Forecast to 2% Growth Amid International Expansion

Belgian telecommunications giant Proximus has revised its profit forecast for 2024, now expecting a 2% annual growth in operational profit (Ebitda), up from the 1% growth predicted in February. This adjustment is largely driven by the development of its international activities under the leadership of CEO Guillaume Boutin.

A significant factor in this revised forecast is Proximus' acquisition of Route Mobile, an Indian cloud communications company. The deal, valued at approximately €650 million, is seen as a crucial moment for Proximus' global strategy. Route Mobile handles over 1.5 billion monthly transactions and operates in rapidly growing markets, enhancing Proximus' international footprint.

In 2023, Proximus' international segment, which includes Route Mobile, generated €1.9 billion in revenue and €180 million in EBITDA. By 2026, the company aims for its three international brands—BICS, Telesign, and Route Mobile—to generate annual revenues between €2 billion and €2.5 billion, with a direct profit margin between €600 million and €650 million.

Proximus' revised profit forecast has significant implications for the telecommunications industry, as it demonstrates the company's commitment to expanding its international presence. This growth could lead to increased competition and innovation in the sector, resulting in benefits to consumers and driving economic growth.

Guillaume Boutin, CEO of Proximus, emphasized the strategic importance of the Route Mobile acquisition, calling it a 'landmark deal' for the company's global plans. '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,' he stated.

Proximus has also updated its guidance for 2024, doubling its forecasted EBITDA growth from 'up to 1%' to 2%. The company expects its direct profit margin for international operations to exhibit mid-to-high single-digit growth this year.

Despite the positive outlook, Proximus faces challenges, including increasing debt stemming from the Route Mobile acquisition. The company expects its net debt to be between 2.9 and 3 times its gross operating profit this year, a rise from the previously estimated 2.7 times.

Proximus Group provides mobile, internet, and television services under various brands, including Proximus, Scarlet, and Mobile Vikings. The Belgian State owns 53% of the Group, which reported revenues of just over €6 billion last year.

The revised profit forecast highlights Proximus' commitment to expanding its international presence and leveraging strategic acquisitions to drive growth. With its strengthened global position, Proximus is well-positioned to achieve its ambitious revenue and profit targets in the coming years.

Key Takeaways

• Proximus revises 2024 profit forecast to 2% annual growth in operational profit (Ebitda).
• Route Mobile acquisition drives growth, with international segment generating €1.9 billion in revenue.
• Proximus aims for €2-2.5 billion in annual revenue from international brands by 2026.
• CEO Guillaume Boutin calls Route Mobile acquisition a "landmark deal" for global plans.
• Proximus expects net debt to rise to 2.9-3 times gross operating profit due to acquisition.