Proximus PLC (PROX) Earnings Call Transcript & Summary

Ladies and gentlemen, and welcome to the Proximus Conference Call on the Q4 2021 Results. For information, this conference is being recorded. At this time, I would like to turn the call over to the Proximus CEO, Guillaume Boutin. Sir, please go ahead.

Thank you, Katyl. Good afternoon to all of you and also from my side, welcome to this conference call on the Proximus fourth quarter results. Let me kick off with this slide summarizing some of our key achievements, achievements we can be proud of and that all have contributed to achieving the goals we have set for ourselves for 2021. I will come back on this in more detail in a few minutes. An important achievement, of course, is meeting the guidance for 2021 with the company delivering on all metrics. I'm also pleased to announce that the Board of Directors approved to propose to the Assembly General of April to return to our shareholders a promised dividend of EUR 1.2 growth per share. Before taking a closer look at the results of 2021, let me walk you through some noteworthy steps for what we have taken in our Inspire 2022 strategy. With climate change, remaining a key concern, I'm pleased we have made further progress to help where we can on that front. In every decision-making process, we embed green ideas, but we also have taken specific actions to reduce our own carbon footprint and help our customers to reduce emissions on their side 2. Thanks to the green bond we issued in November, we can sustainably invest in our future proof and energy-friendly gigabit networks. On the fiber front, I'm very proud of how our deployment is evolving. Proximus Fiber is being rolled out in 35 cities as we speak, and our fiber partners to have now started civil works in 10 cities. So really moving fast, and we are ready to further scale up this capacity with the ambition to grow our footprint by 10% on an annualized basis as from end 2022. Over the last 3 months of 2021, we have achieved a significant step-up in our fiber rollout, passing an additional 126,000 homes and businesses, beating our own objectives. With this, our footprint to reach 813,000 homes and businesses, meaning close to 14% of all Belgium premises. For 2022, we'll add to this more than 500,000 additional homes and hence, we'll move our Fiber footprint above the 20% mark by end of this year. At the same time, we have been able to keep the build cost well under control. We continuously look for ways to optimize our construction costs and for 2021 our cost per home passed in the so-called brownfield, stayed on average below EUR 800, which is 5% better versus what we had planned before. Overall, our goal is to become and remain the undisputed network leader in Belgium. So not only we will broaden our Fiber footprint, we will also further improve our offer. Over the coming next 10 months, we have several launches in the pipeline. Already in a few weeks from now, customers will be enjoying higher upstream speeds. In the mid time frame, we launched a brand-new WiFi 6 gateway, which will be the first WiFi access gateway of the Belgium market. And by the end of the year, we aim to activate 10 gig specs in the first couple of fiber cities. Our network leadership ambition also applies for mobile. Already today, Proximus is recognized for its very good 4G connections. To keep up the superior mobile experience, we also invest in the deployment of our 5G network with the objective to reach national indoor coverage for Belgium by 2024. In the meantime, we have already demonstrated multiple use cases with business customers and this in a wide range of sectors. Over the past year, we also realized major milestones in terms of digital innovations, bringing us closer to becoming the digital companion of our customers. For example, by improving access to health care through our teleconsultation solution doctor, but also by better protecting our customers in an increasingly digital world by developing expertise in cybersecurity. We have also closed partnerships to support our business customers in the digital transformation, just to name a few, with basics through OG joint venture or with HCL to develop hybrid cloud solutions. As a final point on the first part, as we have announced in December, we are in the process of taking TeleSign public through a business combination with NAAC. Transaction that implies a performer price value of TeleSign of EUR 1.3 billion. The transaction is ongoing, and we expect to close this in Q2 2022 with the listing of TeleSign on the NASDAQ. Turning on to the second part of my introduction. One of the goals we had set to ourselves was to improve our Net Promoter Score, NPS. I'm very pleased that the many initiatives that we have taken on this front have clearly delivered, as you can see on the slide, especially as a better customer experience is key in our ambition to further grow our customer basis. As you can see on the chart, we had a strong commercial momentum on all fronts over the fourth quarter. Including the good momentum in the enterprise segment, we grew the group mobile postpaid by 53,000 cards, which represents the strongest growth in 10 years. With our Fiber footprint increasing our consumer units and increasing traction for its fiber offers. By end of 2021, 123,000 customers had a fiber subscription with typically a higher ARPC and return. Also, we see a swift technology switch in the fiber zones with 65% of our customers having moved to fiber 1 year after we started selling fiber in that particular zone. From a revenue perspective, our consumer units showed a nice trajectory as shown on the chart. We closed the last quarter of 2021 with a 2.7% revenue growth while remaining stable on an organic basis. Conversion remains core to our strategy with sustained support for Flex offers. We continue to attract multi-mobile customers in our base, which benefits the overall ARPC growing year-on-year by 0.7%. Now turning to our B2B unit, which continued to perform very well. The fourth quarter revenue grew by 1.9%, and this despite the ongoing intense competitive dynamics in the market. But let's first have a look at the ICT domain. The positive evolution of the chart is proof of the good progress we are making on the B2B transformation. The ICT services revenue is showing sequential growth. In contrast, revenue for low margin at products remained stable with the global chip shortage continuing to affect some of our hardware suppliers. On the telecom side, for B2B, we also maintain a good revenue momentum with good results for Internet and especially for mobile with a 3.6% revenue growth. Turning to our wholesale unit. As shown on the chart on the right, we turned around a historical declining trend in our wholesale broadband park supported by our fiber rollout. Wholesale revenues from fixed and mobile services were up by 6.4%. Of course, today is still on limited total revenue, but I remain convinced there is a great growth opportunity in wholesale in the midterm. This brings me to the total domestic revenue for the last quarter of the year, which was up in total by 2.4% and higher by 1% on an organic basis. On the international front, I'm very pleased with the growth in revenue and EBITDA for BICS, which resulted from a strong performance in A2P messaging, cloud communication, and a gradual recovery of roaming. Following the completion of the acquisition of 3M dial networks, BICS is well positioned to address new dit communication use cases in the enterprise market. For 2021, the enterprise revenue represented already well above 20% of the total revenue of BICS. As for the legacy voice and message business, this continued to benefit from the favorable destination mix, reflecting the trading nature of this part of the business. Turning to our other international platform, TeleSign. TeleSign had a strong fourth quarter performance, especially on digital identity. It proves for TeleSign an important step in its unit to become the global leader in that area. With a good sales performance over the last quarter, TeleSign achieved for the full year 2021, nearly 23% revenue growth on constant currency. Moving now to the operating cost of the group. Here, I just want to highlight that our domestic OpEx was up by 3.4% on an organic basis with our organic cost efficiency program offsetting in part of the higher cost related amongst others, the affiliation-based waste in indexation, but also some phasing impacts costs related to higher customer volumes and cloudification effects. As you can see on the chart, the year-on-year increase in domestic OpEx was the main driver for the lower fourth quarter group EBITDA, while the domestic direct margin was positive. Our full year CapEx level came in as expected at EUR 1.2 billion. The increase from last year was largely driven by investments in the gigabit networks with the fiber-related investments now representing 31% of the total CapEx envelope. Including the significant investments in our networks and the equity injections into 2 fiber JVs, our full year free cash flow for the year 2021 was solid at EUR 376 million on a normalized basis and hence, covering for our annual dividend. The financial position of the company remains very solid with our net debt on EBITDA ratio in 2021 at 1.55x. So what it is for the 2021 results, and that leads me to give a quick view on our expectation for 2022. We are now entering the final year of Inspire 2 strategic cycle, and this is on a solid trajectory of the past year. 2022 is already bringing some fresh challenges with step inflation rates. Nonetheless, we keep our ambition very high. We'll continue to focus on the domestic growth for which we expect both revenues, equity terminals, and underlying EBITDA to grow up -- to grow by up to 1%. Including TeleSign and BICS, we anticipate the underlying group EBITDA to be down by around minus 1%. In line with our announced fiber rollout strategy, the group CapEx for 2022 is expected to rise to close to EUR 1.3 billion and our debt ratio to be around 1.6x EBITDA. And as a final remark, we reiterate our commitment to an attractive shareholder return with the aim of paying an annual gross dividend of EUR 1.2 per share for the 2022 result, which is in line with our announced 3-year dividend policy over the 2020-2022 period. Thank you. And now it's time for questions.

[Operator Instructions] First question is from Nicolas Cote-Colisson from HSBC.

One question on TeleSign, maybe 2 actually. The market has been quite tough with peers year-to-date. So I wonder if you could come back on the technical aspects of the IPO, what could go wrong from a process point of view or from a pricing point of view because you agree on EUR 1.3 billion to secure 67% stake? I just wanted to check these numbers can remain. And the second question on TeleSign is I'm trying to understand the volume and price dynamics there if it makes any sense because I've got no doubt about the volume trajectory, but on pricing, I've got more doubt. So any color on this would be helpful. And I may have a follow-up -- a short follow-up on the guidance.

Mark, do you want to take this one?

Yes. So on the process, I think we are progressing well. The -- we filed a company size 4 in December, and we're currently closing the year, the audited financials for Telesign, and we will progress to filing a public S-4 in due course. Initial discussions with the SEC are going well. In terms of the overall process, we will start to engage with investors through March and April with an intended vote around mid-April. So at this point, we're cognizant of the various elements going on in the market. But at this point, from a TeleSign process perspective, we feel everything is in line and going as we expected. In terms of the overall results, again, I think you saw Q4 was in line with what we expected and what TeleSign guided broadly. And so that business, we feel, is progressing operationally exactly as we expected, and we're pleased with the performance so far. In terms of performance, I think, as we said, overall, from a CPaaS perspective, it was slightly lighter and that was related to a specific -- one specific client in terms of which shows from a profitability perspective, not to pursue on the C-plus side. Then on digital identity, you can see from our Q4 results, we're very pleased with the volume transactions that are ramping on digital identity. So that overall TeleSign and the process towards IPO is progressing well, albeit the market conditions are volatile to a certain extent.

So the 67% stake is something that will not move whatever it takes?

No. No, we don't expect so. Now again, as always, there is factors in terms of the overall redemption profile that will come through, and we don't necessarily have influence over that. And we'll be discussing with investors in terms of what that looks like. But as I said, the pro forma conditions that we set out in December remain as is.

And my follow-up is super short. Just on the group EBITDA, the pro forma revenue and EBITDA guidance, how do you take into account for the pro forma Mobile Viking. So are you taking Mobile Viking contribution for the full year 2021?

Yes, exactly. Yes. So Mobile Vikings is in our full year guidance. And in terms of the contribution, I think you -- there's numbers out there that you'll be able to work that through. But from a top line perspective, revenue guidance on domestic includes Mobile Vikings and including that, we'll still see a growing underlying domestic business augmented by the Mobile Vikings.

And mobile Viking also for the full of 2021 for the sake of the comparison?

So for comparison, no, the comparison period is the stop period that we owned it only. So '22 is fully in.

So '22 takes 100% of I mean, the full year of...

Exactly.

Mobile Vikings when 2021, the comparison basis is only, call it, 6 months.

Exactly.

Just for the sake of clarity, even if we exclude Mobile Vikings for the guidance, we plan to grow domestically next year on both revenues and EBITDA. So Mobile Vikings is just an accelerator to that return to growth story.

You don't mean the underlying consumer business, correct?

Correct.

Our next question is from Mr. David Vagman from ING.

First, concerning the 2022 domestic EBITDA guidance and, let's say, the building blocks, what type of commercial net adds dynamic are you counting on for 2022? I've got a bit of impression that the broadband market, let's say, the COVID boosts all players and is kind of slowing down or nearing the end. And then in terms of net savings, so for 2022, what should we expect now if we could get some kind of update of your savings plan, especially taking into account the acceleration of the inflation, the wage inflation, maybe some word on energy as well. So that's my first question. Second and last question, concerning Fiberklaar and Eurofiber. And maybe it's a bit early for 2022, but I'm also in curious for 2023 and beyond, how should we best model the rental costs that I think from an accounting point of view, you'll have to book for these 2 networks. Could you give us a sense of the economics basically in the margin impact with some indication also maybe of the phasing of this impact over the coming years?

David, let me start maybe Jim you can jump on in the net add dynamics. So I think you saw from our Q4 numbers, I think the momentum certainly with our numbers continues. So we're very pleased with the park and net adds dynamics, both on mobile, on Internet, on fiber and TV. So that's great. We continue to -- we don't see that trading away immediately. I think our guidance continues to assume that we get momentum and certainly early trading in January continues to do that. So we feel good on that. Maybe, Jim, I'll let you come back in. Oon net savings, I don't think we're disclosing overall net savings elements. But in terms of our EUR 400 million gross savings plan, we are very well on track with that. And I think I'm sure we're going to get a discussion on inflation. We are clearly looking at whether we can accelerate some of those elements into '22 to offset some of the more recent indexation elements. So -- and I think we feel confident that we'll be able to do that to a good extent. So that's that. In terms of Fiberklaar and Eurofiber, I said we haven't gone into any detail in terms of how that's going to affect it, but it won't have a significant operating expense for Proximus in '22 at all and margin 'in 23. So I think that's where we are in JVs. Jim, do you want to talk any more on dynamics?

Yes, Mark. So David, on the commercial part. So of course, we continue to build on the traction that we have seen in Q4, and we expect to continue to see that growth also continuing in 2022. As you know, fiber is going to become more and more omnipresent in Belgium as well. And we really see good traction of fiber from a commercial perspective as well. So we indeed continue to expect to have the performance that we have seen in Q4 going forward as well.

And just to add the last color on the market dynamics. I think the good performance of Proximus in Q4 is not linked to unusual promotional activities. It's really linked to the thing that you -- that we shared in the slides, better NPS. I think the very important progress we made on NPS are starting to pay off. This is the work that we are doing on the brands and the different brands that we have around Proximus, Mobile Vikings now, and Scarlet that is starting to pay off also the effort we make in digital experiences that is also starting to make a difference. And last but not least, the product superiority of our networks. We have the best mobile network of the country. And now with fiber, the perception that Proximus also in the north of the country is really providing the best connectivity is starting to be present. And now, there is a debate, actually, as we speak, around -- in Belgium around what is the best technology between coax and fiber. That debate was not happening months ago, 1 year ago or 2 years ago. Now the debate is happening. And of course, our fiber technology is going to be the best one. So it's really important for you to be -- that you understand that we are convinced that we want to grow, thanks to our product superiority and not thanks to aggressive promotional activities. That's really important to note.

And if I may, a very quick follow-up on exactly on this point. How do you see the take-up rate of fiber evolving now that you have, let's say, again, 12 months or if not more track record on that. So based on, let's say, the installation you have? And then, I don't know, let's say, 1 year later, the take-up rate, I mean also beyond your own customer base.

So when you look at the filling rate that we see today on the fiber network 12 months after deployment. We are fully in line with the ambitions that we have set at the Capital Market Days in 2020, where we now reach 29% of penetration on the fiber network 1 year after deployment. So we're really seeing the traction that we want to have. I think we're also -- like Guillaume said, at the beginning of that fiber supremacy. We announced this morning that we're going to launch a 10-gig - XGS-PON capable technologies by the end of 2022. And so we're really convinced that we're going to continue to build on the good traction that we see in the market today.

Next question is from Mr. Roshan Ranjit from Deutsche Bank.

Just 3 quick ones, please. Just to follow up on the previous point. On the broadband market, I think you said really good KPIs, which I think your peers have also reported through last week. And if I think back maybe a couple of quarters, I think everyone was maybe cautioned in on that tailwind continuing through FY '22, but it seems to -- the momentum is there. Can I ask then on price increases? I see you put your typical inflation linked price increase at the beginning of the year. But do you think that there was a scope of further price increases through the year, particularly as you said, your NPS scores are quite good on the initial fiber take-up. Secondly, moving to the OpEx. Now you mentioned some of the, I guess, items affecting your OpEx trend this quarter. Can I check what kind of component of that will be carrying forward? I guess, clearly, the inflation-based wage indexation and energy. You also mentioned some volumes reflecting in the commercial momentum. I assume that will ramp up only additional info you give that will be good. And lastly, just to check on the CapEx now this year for 2020, you're guiding to EUR 1.3 billion. If I think back to your fiber update, you said this was the kind of peak level we should think, so is it fair to assume EUR 1.3 billion for FY '23 and maybe also FY '24?

On the broadband market, indeed, we have experienced a nicely growing at the market over the past 18 months or 2 years, I would say, with the COVID crisis kicking in. But I think that going forward, the good thing about that market is, I think there is enough room for growth for all operators probably. And that's also why all operators are -- have a rational behavior in terms of marketing strategies. I think that what you see since a few quarters now is that Proximus is really winning the high end of the market, that dynamic. So we are more and more attracting the best customers of the country. And that is related to product capacity, the brand perception of Proximus, which is really increasing on the market, and all the effort we put, as I said before, in customer experiences. So that's a little bit -- to your point, there is room for everyone to grow, but I think we are making some good and nice progress in the high end of the market. And you can also see that on the TV net adds and the fiber tick up, which is also really important. In terms of -- of our ability to increase pricing, I think this is clearly something that we have in mind. Why that? Because indeed, we are in the context of very high inflation rates. As you know, there is no automatic pricing indexation of the telco contract in Belgium as opposed to some other countries. But with the NPS that we have, with the strength of the -- of our brands, I think we have some pricing power, and we might move in H1 and some price increases on some products. And on OpEx, I would...

Yes, I'll take that one.

Give the floor to Mark.

So on OpEx, maybe start off a little bit with the inflation pressures we're feeling. So we are clearly open to the indexation on internal wage costs. So I think that's something that -- let me come back to that. On energy, I think we said before, energy in the short term, we've got a limited exposure to. We're hedged through Q1 2023. So I think, although there's a small part on hedge in 2022, it's not as material effect as you would think. And then in terms of our contractual positions with some of the external contracts, we're in a reasonably good position. So overall, inflationary exposure is primarily on the wage-related part, but it is a reasonably material number. So that's maybe the first part. On customer, as you said, yes, we had good momentum in Q4. Those customer costs are coming through, specifically kind of installation-type cost of migration. So that's one part. We also have, and I think we've been clear on that through the year in terms of transformation costs on digital on MWings, and then we've also got some kind of cloudification costs coming through from just kind of transfer from CapEx. So those are the kind of -- that's the way I would kind of think it through. And then in Q4, I'd also maybe just point out, we also had, I'd say, kind of phasing or nonrecurring in nature amounts round about EUR 68 million related to workforce provisions that we've made and also start-up costs -- some of the start-up costs for programs like our ACL program. So I think that's maybe how you could think about it. In terms of the inflationary part in terms of the Q4 increase, you probably think through somewhere around quarter of that increase was inflation related. So I hope that gives you some guidance to think through for 2022. On CapEx, the question there on yes, EUR 1.3 billion being the peak. I think again if you look back at our Capital Markets Day disclosures, EUR 1.3 billion was the peak that we disclosed at that point. We continue to believe that's the case. 2023 will be broadly the same. It will not be higher than 2022. And then as we get into '24 and beyond, we see that moderating quite quickly down to a more normalized run rate, if you look back in history in terms of what proximate would normally run like that. So that's roughly where we are.

Next question is from Mr. Polo Tang from UBS.

Just have 2 questions. The first one is on broadband. So Orange Belgium has increased broadband prices by 5% at the start of this year. So I'm just interested to know what impact this has had on the market? And have you noticed any shifts in gross adds or NPS between operators in terms of January, February? And second question is really just about Voo. So with Orange Belgium acquiring Voo, what impact do you think this will have in terms of the competitive dynamics in Wallonia and how do you think about the impact on the broader Belgium market?

So thanks for the question. So on the first question, on the indexation that we did in January, that was actually an indexation that we did on the tariffs that are in the, I would say, the noncommercialized tariffs, and that was an indexation that was more on the level of 2% on those tariffs. And so as these are not commercialized tariffs, of course, this hasn't impacted the commercial dynamics that we have seen in January, February. So we're still very satisfied with the performance, like I said on Q4. And like Guillaume mentioned as well, we have very good dynamics for the moment on the different brands on the market. Fiber is going to continue to feed those dynamics. So we're really comfortable going forward on that performance. And then on the impact of the potential impact of Voo -- Orange, as you know, in Proximus, we have the benefit of being able to work with the 3 strong brands with Proximus, mainly working on the convergence as Scarlet on the low cost and then Mobile Vikings more on the data savvy customer base, each have very strong NPS performances as well. And through those brands, we can really address the market in a very segmented way. And so we're confident that with the offers that we have today in the market, we will be able to continue to win the market also in Wallonia.

Just to add because I think on the OBel, price increased 5% because I think it was your initial question. But as you can see, Jim hasn't noticed it. So apparently, no impact on the market at all. And I think no impact for OBel for us, this is really not a big theme here in Belgium that price increase. And just one additional comment on Voo because sometimes I'm hearing that Voo was not a good competitor, but this is not completely correct and Voo was not a bad competitor. And even sometimes a little bit aggressive in terms of marketing strategies. So I think that the Voo acquisition is rather good news. It was not a mystery that it was not the worst scenario for approximately that Voo to be acquired by Orange. I think it strengthened the case of a continued rationality for the market and also a case for us to really work on that product superiority, thanks to the rollout of our fiber in the Wallonia region.

Our next question is from Mr. Joshua Mills from Exane BNP Paribas.

Two questions from my side. The first is just trying to get a bit more color on how you see the revenue dynamics developing in consumer versus entities as we go into '22. I guess going back to one of the earlier questions, if I take Mobile Vikings out of the guidance and kind of normalize for that, I suppose you're basically looking at somewhere between 0.5% and 1% revenue growth domestically next year, which is a touch lower than the 1% underlying organic you delivered in 2021. So is that the enterprise segment, which did quite well in '21 is maybe going to be a bit slow in '22 or is a slowdown in consumer? I just have to get your thoughts on that. And then the second question is around your fiber strategy and then partnership with either Telenet or Orange Belgium. So both management teams, I think, on recent calls have talked about the opportunity of getting into the trenches and the duct when you pick them up to do your own fiber build and using that as an opportunity to upgrade their own cable systems. Could you give us a sense of how much money you could make from that? How it works? Is it -- do they pay you when they get into the ducts? Do they share the cost of the labor? And ultimately, could this be an opportunity for you to reduce the CapEx burden and the fiber-to-the-home contract costs going forward? It looks like you've already done.

So maybe I'll take the first one and then I don't know, Jim, you take the second one. So on overall growth, I think, Joshua, I think you're kind of close to it. I think consumer, we see continued growth next year supported by the momentum that we've seen in the market and the momentum we continue to experience that we expect next year, some pricing, fiber monetization, fiber migration. So consumer, we think, is on a good track. In terms of enterprise, and maybe I'll let Anne-Sophie talk a little bit more about the operational dynamics. But enterprise, very pleased with the last 2 quarters. I think we've seen and talking about that, the resilience, the management of the telco business, I think the team has done a very, very good job there. The ICT world continues to progress in the way that we want to. But we're still in a transition period for the enterprise business, and we're still not a view that it will fully transition to back to growth in 2023. 2021 did have some following wins in terms of some of the COVID impacts in terms of usage and also to a certain extent, the supply chain constraints on some of the box moving type equipment will continue into 2022. So enterprise will again continue to in our view, be it transition year through '22. But maybe I'll pause there. And Anne-Sophie, do you want to put any color on that before we turn to the fiber question.

Just one additional comment on the consumer dynamics because it is also the center of your question. In 2022, you're going to have only but accelerated trends in consumer revenue dynamics, excluding Mobile Vikings.

Okay. And on your second question, so when we deploy fiber that is always a mix of -- in the deployment on facade but also deployment through trenching. Now in Belgium, it's as such that these tranches, they are always open for synergies. And what we see that is indeed in a part of the streets that we open up for our fiber deployment that Telenet is sometimes following to anticipate probably a number of things. Now what is important to mention there is that it's a normal way of working that happens in a good operational collaboration. So this is not causing us any delay at all. So the machine we keep on speeding up our machine. And indeed, on the opposite, I would say, it enables us to kind of go find us some of those tranches. So the -- typically, when you have to say, if you have 2 parties following in a trench, well, there are kind of cost distribution rules that you cut at that moment in time for the tranching part, the cost in half. And that is then, I would say the opposite, the positive side of this all. But in a sense, what is important is that we see in a fraction where we open up the suite that's happening. Our network is a combination of facade and trenching. So following us in part of the trenching doesn't make another fiber network either.

And maybe just one clarification, because I think Telenet on one of their conference calls have said that they think about 25% of their network, is fully ducted and 45% or so is on facades for the rest aerial. Is that broadly the same with your network? I'm just trying to think about what longer term assuming you and Telenet do want to partner, how much of your fiber upgrade could potentially be cheaper if you do those partnerships? If it's that 25% or not?

I think it's a bit too early to comment on those kind of dynamics. I think we're really focusing on rolling out our own network for the moment. And I think we're going to have time for discussing those elements later on, but it's a bit too early to discuss this kind of metrics with you.

Our next question is from Mr. Martin Michael Hammerschmidt from Citi.

I have a couple. The first one is, could you walk us through the mechanics of like how wages going to increase in line with the health index. Am I? Do you increase them every time as soon as the full month average exceeds 2%, which means there might be another adjustment coming in April and then maybe even another one if inflation comes further down in the year? And in your domestic EBITDA guidance, how many more rate increases have you backed in. And then on TeleSign. I think you just mentioned that you're going to engage with investors in March and April. Could you give us a time line on when you expect to list TeleSign? And to what extent will you know if there might be redemptions -- more redemptions coming that you might expect? So I think we have seen one of the telco sales specs in the U.S. was canceled because redemptions were too high. I think that happened last week. And then the third one is on CapEx. You mentioned in your presentation that your rollout cost per home is 5% better than you initially planned. At the same time, you still sort of guide for sort of fully EUR 1.3 billion CapEx. Is that a function of you rolling out faster than you might have expected at the beginning? Or where are those rollout savings going to be invested instead?

Let me take the wages on this Telecom question, maybe you pick the CapEx one and roll that one. So yes, Martin, on the wages. So effectively, the mechanism is it's once the health index reaches a specific level, it triggers the automatic wage indexation in Belgium. So in terms of what we've got in our guidance, we had one of those in October, and that's fully in. We've got 1 in February and 1 in April. Both of those are fully in the guidance. There's a discussion of a third one towards the later end of the year. But given that it's likely to be the tail end of the year, it's going to be in material nature. So that's fully in and as I said earlier, our overall gross savings program is such that we use that in terms of prioritizing and accelerating as we can to mitigate those up where we can. So I think that's where we are in terms of the overall wage indexation. In terms of time line, as I said, we are on track for a mid-April closing, and that will follow various investor engagements in March, a proxy discussion -- or a proxy vote with the MAP shareholders through kind of end of March into April. We saw the market -- the recent market developments on there. But again, as I said, TeleSign is a different company and has its own merit. So we -- the feedback we're getting from investors so far is very positive. So we will wait and see how that process one side. But at the moment, we're fully on track for the net April listing. In terms of CapEx, do you want to take that one? Or do you want me to?

No. It's fine, Mark. I can't take that. You can add something if you want. So if you look, in fact, at the speed that we realized last year, well, in fact, we went as fast as we could. That was the idea. And it's true that we went a bit faster than what we've planned, but it was not seen in the CapEx figures due to indeed that we were capable in addition to as well do it at better unit cost. Now for next year, our intention is still to keep on working on both elements. Of course, you have seen next year, we're doing again about times 2. We go as well from higher dense to more less dense, meaning that it's more meters of trenching per home pass, et cetera. So where the work volume, the times 2 is even underestimated. And at the same time, we will keep on searching to do better on the unit cost.

And if I could just add a quick one real quick. In your domestic revenue guidance, you've talked about a possible price increase. Is the price increase included in your 1% growth guidance? Or would that be an upside?

I think the guidance -- the guidance both some price increases for some products are including the guidance and all the worst case scenario on the wages indexation.

The guidance, correct.

Next question is from Mr. Alexander Caldwell from Jefferies.

I mean, most of them would have been asked, but I have a few. So Telenet talked about having a 5G CapEx step up in 2022. I wondered if you could talk around how much CapEx you have budgeted for 5G next year? And then my second question would just be on the supply chain issues. I wondered if they are having any potential impacts on your fiber rollout plans for 2022? And then also, if you could just talk around how much equity injections would be needed for the 2 JVs next year?

So let me, on the 5G CapEx, we don't disclose the value, but there is a step up, but it's fairly -- fairly immaterial at the overall group level. But yes, we do see a step up in the year in 2022. That's included in our EUR 1.3 billion guidance. In terms of the supply chain, Geert maybe I'll let you comment on that. In terms of the injections needed for 2022, there is a further equity injection expected in 2022, but sort of the same magnitude as we've done in 2021. So I think you can get that from our disclosures.

Then on the second question with respect to the supply chain, of course, we see higher delays in getting material, but we have anticipated on that. So we have a plan in place where you know that we are even right now already looking at volumes that we're going to do in '23. And we are anticipating and preparing all the necessary steps, not only for the months to come but in fact, we're also already today looking at our plan of '23. So in that sense, there -- this is not a hindering element towards our rollout.

Next question is from Mr. Fabian Coles from Barclays.

It's Simon from Barclays. I have 2, please. Just on the free cash flow bridge into 2022 because when I look at company consensus that has quite a material drop in free cash flow, which looks largely linked to the step-up in CapEx, but you obviously came in higher than what people were expecting for 2021. So I'm just wondering on the moving parts, working capital tax interest, et cetera, it sounds like equity injections are the same like you said, EUR 100 million extra for CapEx, but those other lines, it would be great to get some additional color, please. And then just secondly, on the, I mean, Guillaume said that they've been aggressive at times and they've always been a strong operator. But could you give us a bit more color between consumer and enterprise because I think from the outside, our expectation would be that it's largely a consumer operator and never really played in enterprise. But now it's potentially going to get bought by OBel, is that something that could change? And how have you seen them in the enterprise segment in the past?

Sean, let me take the free cash flow. So indeed, for 2021, we were slightly higher than consensus. I think you're going to look a little beyond the pure accounting CapEx numbers and the cash CapEx doesn't necessarily follow the crude CapEx. So that's -- there's certainly a part of that in '21, which will reverse out into 2022. We do continue to concentrate on business working capital, and we did see some improvements. We have structural program looking at, as you'd expect, on AP accounts receivable [indiscernible]. So that was a little bit also of where we had some benefit in '21, which, again, I would see repeating in '22. So I think in terms of how to get to '22, I think generally, the consensus is in the right direction. We are going to have a step down primarily because of the increase in CapEx. I do think we will have a timing effect of the better cash CapEx that we had in 21' and reversing out in 2022. Again, in terms of magnitude, it's EUR 40 million, EUR 50 million in that kind of range. And so I think that's the way that I would think about it. But definitely, the consensus is going in the right direction. And as you said, is primarily related to our investment ramp up and the cash timing of that. On the second question, Anne, do you want to take that?

Yes, Mark, maybe it's Anne-Sophie. I can take the second question. So, sello, Simon, I'm responsible for the Enterprise unit here at Proximus. With regards to Voo, I have to say that we've hardly seen them in the enterprise market thus far, if at all. We're, of course, going to be looking very carefully at what Orange decides to do, but we don't expect any material impact.

Sorry, Mark. just follow up. Cash taxes was obviously very different this year versus the year before. Is there any reason to expect that changes in '22?

Yes. As I said, the cash CapEx...

Sorry, cash tax.

Cash tax? Again, we will look -- we kind of look at that on a timely basis as and when. So I wouldn't -- yes, we were not disclosing fully any significant movement on that. But as I said, I think we tend to make a decision on that on a cash basis as the year progresses. So I think that's probably the biggest movements that you need to think through are really the cash CapEx pieces as well I would think. The working capital tax effects will generally neutralize themselves out in our planning at this point.

We have one last question from Mr. Emmanuel Carlier from Kempen.

Yes. My question has actually already been answered, but maybe you can still clarify it a little bit. It's on the guidance on EBITDA. During the call, I think you mentioned several times that you might raise some prices during 2022. I just want to know, is that already included in the guidance or not?

I think I said it twice already. So I would repeat Indeed, this is including in the guidance, both the worst case scenario in terms of wages indexation that we could have this year but also some price adjustments for some packages.

We have no other questions. [Operator Instructions] We have another question from Mr. Alexandre Roncier from Bank of America.

I just wanted to ask on the dividend. And obviously, we are at the end of the 2019, 2022 by commitment on the EUR 1.2 billion. I was just wondering what's really stopping you from renewing that commitment heading into '23, given that, well, you've already planned the sale of -- half sale divestment of TeleSign you've already made all those private joint venture plans. So what's really the framework you're thinking about in terms of shareholder distribution from 2023 onwards?

And yes, good question. I think it's a little bit early to discuss that matter. It's a board discussion that needs to happen. But what word I just can say that as already stated in our Capital Market Day and something I also repeated several times. We are committed to come back to free cash flow coverage in midterm at the current level of dividend payments. And that commitment, I think, still remains.

We have no other questions. Back to you for the conclusion.

Thank you all for participating in this call. So should you have any follow-up questions, you can address those to me. I wish you all a very great weekend.

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.