The Proximus Group

All figures are EUR M, IFRS, from Proximus annual results releases for each FY. Underlying revenue and EBITDA exclude incidentals. Proximus does not report "gross profit"; direct margin (revenue less cost of sales) is used as the gross-profit equivalent.

Income statement

Notes:

• EPS is computed on ~322.7–323.4M shares with dividend rights. FY2023 (1.11) and FY2024 (1.39) match third-party reported EPS (Simply Wall St).

• Diluted EPS is not separately retrieved; dilution is immaterial given no material convertible instruments at group level.

• Operating income (EBIT) and pre-tax income are not reproduced here; they are in the consolidated annual accounts. FY2024 D&A was ~EUR 1.26bn (Simply Wall St).

• FY2025 reported EBITDA includes +EUR 282M net divestment gains: datacentre (EUR 77M in Q1'25), Luxembourg towers and Be-Mobile.

• FY2025 net income includes a EUR -275M goodwill impairment on Global.

Margins and growth

Underlying revenue CAGR FY2021–FY2025: +3.1% (5,578 to 6,307). Organic growth is lower, since acquisitions included Mobile Vikings (Jun 2021) and Route Mobile (May 2024).

Segment build of EBITDA, 5 years

FY2021–FY2023 International = BICS + Telesign before eliminations.

Cash flow

Notes:

• FCF definitions changed over time: "normalised" (FY2021), "adjusted, excl. M&A" (FY2022–23) and "organic, excl. M&A and asset sales" (FY2024–25).

• FY2024 reported FCF reflects Route Mobile and Fiberklaar M&A cash-outs; FY2025 reported FCF includes divestment proceeds.

• Dividend amounts are computed as DPS × ~322.7M shares; Proximus disclosed EUR 387M for the FY2023 declaration.

• H1 2026 dividends paid including NCI were EUR 97M.

Share buybacks: none in the period. The 15.37M treasury shares are legacy holdings.

Balance sheet and leverage

Notes:

• Proximus-basis ratios for FY2022–FY2025 are computed as net debt / underlying EBITDA. The FY2021 figure of 1.55x is company-reported.

• The S&P definition includes leases, pensions and 50% of the hybrid, hence the higher ratios.

Latest position (30 Jun 2026):

• Net debt rose to EUR 4,174M.

• The bridge from end-2025 (EUR 3,568M) was: organic FCF -25, M&A -79, divestments +21, dividends -97, fixed deposit -18, Unifiber consolidation -400, other -9 (IR funding page).

• Gross financial debt instruments: EMTN bonds EUR 3,850M, hybrid EUR 700M (50% equity credit typical for rating agencies), investment loan EUR 400M (2028), JPY note ~EUR 11M (Dec 2026), plus Unifiber debt consolidated from May 2026.

• Short-term maturities are minimal (EUR 11M in 2026); the next material maturities are in 2028 (EUR 150M bond + EUR 400M loan).

Refer to the Consolidated Annual Accounts 2025 (published 13 Mar 2026). Equity capital and reserves are ~EUR 4.5bn per Trading Economics (latest quarter). Stockopedia (P/B 0.42) and Morningstar (P/B 0.49) imply book equity of roughly EUR 4.0–4.6bn.

Commentary

Revenue.

• Group revenue grew modestly through FY2024, helped by inflation-indexed price rises (2022–2024), convergence growth and the Route Mobile consolidation.

• FY2025 was the first year of decline (-1.9% reported, -4.1% pro forma), driven by Proximus Global (-14.8% pro forma). Management attributes this to an accelerated slowdown in CPaaS SMS, especially OTP and international terminating traffic, and an unfavourable voice destination mix.

• Domestic revenue has been flat for two years (FY2025 -0.1%) despite consistent commercial share gains.

• Business-unit services are eroding (fixed voice, legacy data, mobile price competition), and wholesale interconnect is a recurring drag.

EBITDA.

• The FY2023 dip (-1.6%) was inflation-driven: Belgian automatic wage indexation and energy costs.

• FY2024 (+5.3% reported) benefitted from Route Mobile and Domestic cost programmes, and Proximus hit its bold2025 EBITDA target a year early.

• FY2025 Domestic EBITDA grew +1.9% while Global fell -9.3% pro forma.

• Domestic EBITDA margin has expanded from 34.9% to 35.5% on cost efficiencies: a new EUR 180M gross savings programme over 2025–2028, and the workforce plan of ~1,200 roles by 2030, of which ~800 are retirements not replaced.

Net income. Net income has been flat to down over five years, from EUR 445M (FY2021) to EUR 398M (FY2025). Drivers are higher D&A from fibre, the EUR 275M impairment, higher taxes and rising financing costs. FY2025 was partly cushioned by EUR 282M of divestment gains, which are non-recurring.

Cash flow — the critical inflection.

• Organic FCF collapsed from EUR 376M (FY2021) to EUR 57M (FY2024), as capex rose to a peak above EUR 1.3bn and fibre JV equity injections, interest and tax rose.

• FY2025 recovered to EUR 130M.

• Consolidating Unifiber lifts FY2026 capex guidance to up to EUR 1.3bn and cuts FY2026 organic FCF guidance to ~EUR 50M. Management now sees 2027 as the peak investment year, organic FCF above EUR 100M in 2027, and ~EUR 400M by 2030 with capex near EUR 1.1bn.

• The dividend of EUR 0.30/share (~EUR 97M) is roughly twice FY2026 guided organic FCF. The payout is therefore effectively debt-funded in 2026, consistent with leverage drifting toward, but below, 3.0x.

Leverage. Net debt rose from EUR 2.74bn (FY2021) to EUR 4.17bn (Jun 2026), +52% in 4.5 years. This reflects M&A (Route Mobile, Fiberklaar, Unifiber), dividends in excess of FCF, and the fibre build. The hybrid (Oct 2024) and asset disposals (~EUR 400M+ in 2025) were used to protect ratings. S&P revised its outlook to stable on 17 Mar 2026 after the dividend reset.

Management guidance (FY2026, as of 31 Jul 2026)

Medium term:

• Domestic Services revenue CAGR of +1% to +2% over 2026–2028 and slight Domestic EBITDA growth.

• Global EBITDA growth from 2027.

• Organic FCF above EUR 100M in 2027 and ~EUR 400M by 2030.

Consensus expectations

• Morningstar DBRS projects FY2026 revenue of EUR 6.10bn (from EUR 6.25bn) and adjusted EBITDA of EUR 1.83bn (from EUR 1.91bn), as reported Oct 2026.

• Sell-side consensus is Hold, with targets of EUR 7.40–8.07 implying 23–35% upside.

• Consensus EPS is ~EUR 0.97 for the next FY (Stockopedia).

Bull case

1. Capex cliff drives an FCF inflection. Fibre build is de-risked by the Flanders co-build (Proximus builds only 41.5% of the cooperation zone) and Unifiber ownership. Capex falls toward ~EUR 1.1bn by 2030 and organic FCF compounds from ~EUR 50M (2026) to ~EUR 400M (2030). At EUR 1.94bn market cap, that implies a ~20% 2030 FCF yield on today's equity.

2. Domestic franchise is resilient and margin-accretive. Proximus has kept taking net adds despite Digi, with Domestic EBITDA margin at 35.5% and AI/attrition-driven workforce savings (EUR 180M gross). The access-cost elimination from Unifiber adds structural EBITDA.

3. Sum-of-parts optionality. A partial monetisation of Proximus Global, explicitly flagged as "value crystallisation", or of fibre infrastructure, could re-rate a stock trading at ~3x EV/EBITDA and ~0.45x book.

Bear case

1. Global is a melting ice cube. EBITDA falls from EUR 188M (FY2024 pro forma) toward EUR 110–120M as OTP SMS is disintermediated. The EUR 275M impairment may not be the last, and any crystallisation may come at a low valuation.

2. Equity squeeze from the balance sheet. Net debt reached EUR 4.17bn by mid-2026, and the 2026 dividend exceeds organic FCF. Leverage sits near the 3.0x S&P ceiling, limiting flexibility; another downgrade would raise funding costs.

3. Domestic is ex-growth with competitive risk. Domestic Services revenue has been flat for two years, B2B services fall 3–5% a year, Digi presses mobile ARPU and legacy voice/TV erode. State control constrains restructuring speed.

Catalysts and monitorables (next 12 months)

• Q3 2026 results (30 Oct 2026): Global EBITDA run-rate against the EUR 110–120M range; H2 B2B contract ramp; organic FCF trajectory.

• FY2026 results and first guidance under CFO Fiona Lam (expected Feb 2027): FY2027 organic FCF above EUR 100M and capex peak confirmation.

• BCA/BIPT decision on the Orange–Proximus Wallonia cooperation and the Orange onboarding onto Unifiber.

• Any announcement on Proximus Global structure (partnership, minority sale, listing).

• Digi's subscriber growth and fibre rollout; Telenet/Wyre execution in shared zones.

• Rating agency actions (S&P BBB+ stable; Moody's A3 stable).

• Execution of the 1,200-role reduction and wage-indexation effects.

• Symmetrical-fibre launch (1 Nov 2026) and its effect on fibre net adds against cable.

Analyst verdict

Proximus today is two very different businesses priced as one distressed asset.

The Domestic segment is a high-quality, leadership-position Belgian infrastructure franchise. It holds ~44% of market revenue and generates a 35.5% EBITDA margin. It has consistently out-executed peers on net adds and is now positioned to own nationwide gigabit access at a materially lower incremental cost. The July 2026 competition approval of the Flanders co-build and the May 2026 Unifiber buyout are the two most important strategic events of the cycle. Together they convert an open-ended capex programme into a bounded one with a visible 2027 peak.

The Global segment, by contrast, has destroyed value since the Route Mobile acquisition. Its EBITDA is guided down roughly 40% from the FY2024 pro forma level, and its goodwill has been partly written off. Its strategic logic depends on network APIs and digital identity outgrowing SMS decline, which is not yet visible in the numbers.

The February 2026 dividend reset was painful but rational. It realigned shareholder returns with a cash-flow trough and earned S&P's return to a stable outlook. The equity now trades at ~3x EV/EBITDA and below half of book value, a valuation that implicitly assigns little value to the fibre transition and close to zero, or negative, to Global.

The investment case rests on three questions:

• Can management deliver ~EUR 400M of organic FCF by 2030?

• Can Global stabilise in 2027?

• Will the State, as a 53.5% owner, tolerate restructuring and potential portfolio moves?

On balance, Proximus is a deep-value, execution-dependent recovery story with improving infrastructure visibility but a weak near-term cash profile. Near-term upside is capped until Global's trajectory turns and FY2027 FCF is evidenced. Patient investors are being paid ~5% to wait, with optionality on asset monetisation. We would characterise the risk/reward as asymmetric but slow-burning: constructive on a 3–4 year view, neutral on a 12-month view.