Nothing New in Proximus’ Q4 Results; We Believe Shares Are Cheap

There were no new developments in narrow-moat Proximus’ PROX fourth-quarter results, as the company already held its capital markets day one month ago. Revenue grew 8.4% in the fourth quarter mainly because of the BICS and Telesign divisions, which grew 20.4% and 60.5%, respectively. The core Belgian telecom business grew 2.1%, and group EBITDA was 1.4% higher. Management met its outlook for full-year 2022 and has guided for a revenue increase of 1%-3% in the core telecom business in 2023 and an EBITDA decline of 3% caused by the inflationary effects on wages. Although we recently reduced our fair value estimate to EUR 14 from EUR 18, we believe Proximus shares have been overly punished and offer 50% upside. As of today, the shares are trading at a 3.5 times enterprise value/EBITDA multiple, lower than other European telecoms with exposure to more competitive and pressured markets.

We remind investors that Proximus cut its dividend in half from 2024 onward under its new midterm strategic plan. From 2024, shareholders will be entitled to a EUR 0.60 dividend per share, compared with EUR 1.20 previously. The 2023 dividend will be maintained at EUR 1.20 per share. For more information on Proximus’ dividend and midterm ambitions, please check our Jan. 16, 2023, note.