Digi Communications reported its financial results for the fourth quarter of 2024, showcasing strong growth and expansion in its European markets. The company achieved a historic net profit of €600 million, driven by a 13% increase in group revenues to €1.9 billion. Despite these achievements, the company’s stock saw a slight decline of 1.1%, closing at €0.9. According to InvestingPro data, the company maintains a robust financial health score of 2.77 (rated as GOOD), with the notable advantage of holding more cash than debt on its balance sheet.
Key Takeaways
- Digi Communications achieved a historic net profit of €600 million.
- Group revenues increased by 13% year-over-year to €1.9 billion.
- The company is expanding its network in Portugal and Belgium, with significant growth expected in Spain.
- CapEx for 2024 was €900 million, with future investments prioritized over dividend distribution.
Company Performance
Digi Communications demonstrated robust performance in Q4 2024, with notable growth in its key markets. The company’s strategic focus on network expansion and competitive pricing has positioned it as a formidable player in the European telecom market. In Romania, Digi remains the second-largest mobile operator, while its operations in Spain continue to grow, with a 22% increase in revenue. InvestingPro analysis reveals the company is trading at attractive valuations, with a low P/E ratio relative to its near-term earnings growth potential and strong free cash flow yield. Over the past six months, the stock has delivered an impressive 9900% return to investors.
Financial Highlights
- Revenue: €1.9 billion, an increase of 13% year-over-year
- EBITDA: €580 million, excluding IFRS 16
- Net Profit: €600 million, marking a historic achievement
- CapEx: €900 million, with a focus on network expansion
Market Reaction
The company’s stock experienced a slight decline of 1.1%, closing at €0.9. This movement comes despite the strong financial performance, possibly reflecting investor caution about the company’s continued investment strategy and its impact on immediate profitability.
Outlook & Guidance
Digi Communications remains focused on growth, with plans to invest €750 million in CapEx for 2025. The company is set to continue its network expansion in Romania, Portugal, and Belgium, while anticipating continued growth in Spain. Despite the expected losses in Portugal and Belgium through 2025-2026, Digi prioritizes growth over immediate profitability. For deeper insights into Digi’s growth strategy and valuation metrics, InvestingPro subscribers can access comprehensive analysis and 8 additional ProTips, including detailed cash flow metrics and valuation multiples that help assess the company’s long-term potential.
Executive Commentary
CEO Sergei Bulgak emphasized the company’s growth-oriented strategy, stating, "We are a growth telecom operator and not a dividend yield telecom operator." He highlighted the importance of business expansion as a driver for EBITDA growth and expressed confidence in the company’s future prospects.
Risks and Challenges
- Continued investment in network expansion may impact short-term profitability.
- Potential challenges in achieving profitability in new markets like Portugal and Belgium.
- Competitive pressures in the European telecom market could affect pricing strategies.
- Macroeconomic factors, such as regulatory changes, may pose risks to operations.
Q&A
During the earnings call, analysts inquired about the company’s pricing strategy in Romania and future network expansion plans. Management confirmed there are no immediate plans for price increases in Romania and reiterated their focus on enhancing network quality and coverage across all markets.
Full transcript - Digilife Technologies Ltd (DIGI) Q4 2024:
Moderator/Operator, Digi Communications: And welcome to the Digi Communications and Me Investors twenty twenty four Preliminary Financial Results Presentation. A copy of the corresponding report is posted in The US Regulations section of Digi’s website at digikeferncommunications.com. The conference is being recorded today, and a replay will be available shortly after. For today’s call, please submit your questions for the q and a session at the end of the presentation using the chat box. Before we can start, you are advised that certain statements in this conference call are forward looking and therefore subject to material risks and uncertainties.
Actual results could differ materially from those that are implied by such forward looking statements due to the risks and uncertainties associated with DG Communications and V, which include amongst others, there is risks related to our business, risks related to regulatory matters and mitigation, risks related to investments in emerging markets, risks related to our financial position, as well as risks related to the notes and the related guarantee. I would like to introduce the speakers for today’s call, Mr. Sergei Bulgak, the CEO of Digital Communications, MD, and Mr. Tarjanitsa, the company’s CFO. We may now begin the call.
Sergei Bulgak, CEO, Digi Communications: Good afternoon, ladies and gentlemen. Thank you very much for joining our results call for the end of twenty twenty four. We are excited to show you our progress and our developments for the last year and also for the last quarter. So without waiting longer, we should go to discuss our numbers. And we are very happy to show group revenues increasing 13% year on year, exceeding EUR 1,900,000,000.0, RGUs growing 16% for the entire group, reaching almost 28,000,000 units.
And EBITDA, excluding IFRS 16, reaching EUR $580,000,000 in 2024. All numbers growing in line both with our expectations, with our strategy and with our efforts to both roll out and to provide services to our users. Romania is 7% up in terms of RGUs. We reached 6,600,000 mobile users at the end of the year. We are very happy to have become the second largest mobile operator by the number of users in Romania, following Orange, the market leader in this segment.
On Pay TV, we have a 3% year on year growth reaching 5,900,000 RGUs at the end of the year. And in broadband, we have 4,900,000 RGUs with 7% growth. For Spain, we have an outstanding result, growth of 30% and mobile users reaching 5,900,000 users at the end of the year, growth and close to 2,000,000 but just slightly below. And fixed telephony, 600,000 users at the end of the year. We continue to focus on sustained RGA growth across all our markets.
As I just mentioned, you see very strong performance for both our Spanish market and the Romanian market. Also Italy performed very, very well. We continue we continuously work on improving, extending, developing further our networks. In Romania, with more focus now on the mobile, including their five gs expansion. In Spain, so far, mostly on the fixed networks, reaching 12,000,000 homes fast as we speak, 50% of the country coverage.
And also starting with 2025, we will look at expanding our own starting building our own mobile network and translating from MVNO operator to MNO operator. Portugal, we have launched the services on November 4. We are in the phase just like in all our markets legacy markets included of further developing the network, improving the coverage, improving customer access and this certainly will continue as we have just started in the market. And last, we launched alongside Portugal in December the Belgian market together with our partners at City Bench. And this completes our recent build outs and developments and expansion international expansion efforts.
So 2024 was a very busy year, full year of activities, full year of achievements. I can’t only I should thank very much both our customers for choosing us. I should also thank all our colleagues for difficult but also standing work during this period of time. Jumping on to the recent developments, we have couple of announcements here about the financing signed in December. So we increased the 2024 our remaining 2024 facility of EUR 150,000,000 to EUR $220,000,000 and we successfully syndicated it with our group of supporting banks.
We also signed a EUR 60,000,000 export credit agency facility that is used to finance mobile equipment and mobile expansion. One second, one second. We are very happy and we are to announce the our most recent results to Spain. So far, I did concentrate on results as of December. However, we also announced a few days ago, our colleague, Marius Verzaro, announced to the Spanish public, to the Spanish press, the achievements of our subsidiary in Spain as of today.
And the results are outstanding. As you see, we have reached more than 6,000,000 mobile users. We have reached more than 2,000,000 fixed broadband users in February 2025, excuse me. Our networks, the ones that we started building early in twenty nineteen, twenty twenty, have reached more than 20% penetration and this shows the quality of our assets but also the response and engagement that we have with our customers in the Spanish market and again for which we are extremely grateful to all of them. It also shows the quality of our partnership with Telefonica (NYSE:TEF) and our reliance on first and foremost on their mobile network but also on their overall support in our operations in this country.
So far 12,000,000 on Spass build, which represents approximately 50% of the nationwide coverage taking into account that there are 24,000,000 households in the country. Just maybe one last comment before moving on. Now in the beginning of twenty twenty five, end of ’20 ’20 ’4, we reached a market share of 10% or almost 10% both in mobile and in fixed. And again, this is an outstanding achievement, which merits which demands and applause from us to our colleagues in Spain, but also a big thank you for support from our customers. So moving on, just a few words on the new developments.
So as we discussed early in November in our last investor presentation call, on November 4, we launched our Portuguese operations. We launched mobile broadband fixed broadband and TV services in Portugal, also fixed telephony. The prices are very attractive one second, sorry, I missed something here on the screen. The prices are very attractive with gigabit connectivity being offered at EUR 10 per month, ten gigabit per second speed for the fixed broadband at EUR 15 per month. Mobile voice AI data packages start at per month with options ranging from 50 gigahertz to unlimited data.
Television, we offer 60 channels today in our package for and fixed telephony is offered for per month. I think this there were many questions about our possible commercial policy about more details related to the launch. So we are very happy to be able to show these results to you as we speak. Belgium followed a month later. So on 12/11/2024, we launched our operations.
So far, it’s mobile and fiber I mean, Internet connectivity. For mobile, we offer for €5 per month, voice, SMS, and 15 gigabits of data. For €10 per month, we offer 500 megabit fixed broadband connection. And for EUR 15, it’s a gigabit connection and for EUR 20, it’s a 10 gigabit connection for our users. So both markets, Portugal and Belgium, are at the very beginning and in infancy of their operations.
We are very busy, us, our colleagues in these markets as we speak to provide the services, to improve the services on a daily basis. As you may appreciate, it’s not easy to launch a nationwide services to launch a nationwide offer in two new markets in the same period. So, yes, lots of things to improve and we are very busy about that. Nevertheless, and as I mentioned both earlier and also in our last call, we are very happy with our initial response in both markets, both Portugal and Belgium, and we are really very grateful to support for the support of our customers. We believe that our engagement and our presence is for long period, a very long period and we believe we appreciate the start as a very good one.
So 2024 highlights, 1,900,000,000.0 in revenues across all our markets, 1,100,000,000.0 revenues in Romania, almost EUR 800,000,000 in revenues in Spain and other group companies generated EUR 43,000,000 in sales. Autotrim did down to EUR $580,000,000. Of course, most of it generated in Romania, more than EUR $460,000,000 with Spain following at more than EUR 150,000,000. Our views, we mentioned, are almost 28,000,000 users with 18,000,000 users in Romania and more than 8,000,000 users in Spain. Basically, looking into more details at our numbers, I’ll just repeat, sales EUR 1,900,000,000.0, 16 percent growth year on year, EBITDA EUR $580,000,000 without IFRS 16 impact EUR $685,000,000 with IFRS 16, depending how we want to look at it.
Our CapEx amounted to somewhat less or slightly less than EUR900 million in 2024 and it was certainly higher than EUR $730,000,000 a year ago. Nevertheless, the CapEx figure includes the payment that we made for Novo in Portugal approximately EUR 110,000,000. And as you very well may appreciate without this payment, we would be below EUR 800,000,000 mark as a total CapEx for the year. Revenues where the revenue growth was driven by customer growth in Spain and in Romania. Spain reaching 22% growth in revenues and Romania reaching 7% growth.
EBITDA increased 40%, and it could probably be higher if we were not also present in new markets, which are, of course, still loss making, but that’s normal that’s something reasonable to expect. Moving on quickly and just looking at the profile of our customers, basically, you see the breakdown of the 28,000,000 users by portfolio. Mobile is the largest representing almost 50% of our total GPU count, 13,200,000 users followed by broadband almost 7,000,000 users and also one of course followed by TV with almost 6,000,000 users in all the markets. So far, we were offering TV only in Romania. But as of end of last year, of course, we offered also in Portugal and we have started recently offering TV in Spain.
The numbers are not relevant yet that’s why they are not shown in these charts. I mean the numbers of TV customers to Spain. But this is another development that we achieved, the milestone that we achieved. And so as of today, our service offering in Spain is complete. Looking at the markets, 18,000,000 users in Romania, Eight Point Four Million in Spain, almost 500,000 users in Italy and 676,000 users in Portugal.
There are more details for the user composition in our report on the website, so not in this presentation. But basically, in mobile, we have 320,000 users, IFF to Portugal now. In broadband, we have 170,000 users. TV, we have 120,000 users. And for fixed telephony, it’s 110 users.
Of course, these numbers combine both the operations of Novo and the new operations of Digi. So that’s why while we started only recently, the numbers are pretty, let’s say, meaningful. Okay. I move on. We had 756,000 customers coming to us through portability in Romania.
We are the number one network in terms of number portability in our market in our home market. In Spain, mobile portability amounted to over 1,100,000 users in twenty twenty, thirty four growth. And net profitability gain amounted to almost 740,000 users. Fixed portability, 200,000 lines and Netflix (NASDAQ:NFLX) portability, 184,000 lines. The remaining numbers are gross numbers.
These are not net numbers but nevertheless the number is significant in itself. And last, in terms of numbers, our leverage as of December amounted to 2.3 times net. As you see, after repayment of bonds, we have a well represented repayment curve or well managed repayment curve with EUR 200,000,000 due in 2025, also EUR 200,000,000 due in 2026 and EUR 300,000,000 due in 2027. Of course, 2028 has higher exposure given that the EUR 400,000,000 bond will be due in that year. But this is well from my point of view, it’s a well balanced curve and we will of course manage to we will manage to manage all our maturities so that things are addressed well in time during the guidance.
And just very few words on 2025 prospects. So we will not stop building. So we will continue building, expanding, improving our networks in Romania focusing on mobile quality, focusing on expansion of our five gs network coverage and five gs connectivity. In Spain, as I mentioned, we are continuing with good speed growing our fixed networks. But also in 2025, we will start using we will start using our newly acquired mobile frequencies and we will start deploying our own capacities for our own network, transiting from MVNO to partial MNO operation in that market.
Portugal and Belgium will continue using resources and we will continue investing in these markets to grow our presence, to improve our presence. Again, we are just at the very, very beginning and we will continue the effort of strengthening our operations over these markets. So I hope with this, I give you some glimpse, some ideas of what we achieved, how our year was. Once again, we are very thrilled and excited about our results, But also we are very busy executing the 2025 plan rollout. And we feel that things, let’s say, are well aligned for us to continue our performance as we did until now.
Thank you very much. So I close the formal part of the presentation and we will start today seeing to the questions in a minute or so when they start showing up in the system. And So let’s go for the questions. Can you give some information on the Belgian activities? How many customers did you win for mobile and fiber?
The Belgian newspapers newspaper wrote today that you have between 90,000 customers less than expected. Well, we’re not ready. We do not intend to provide our customer numbers at the moment. For that reason, I will not commend the numbers. I think in the last statement, less than expected, I’d say less than expected towards.
So sorry, what I mean to say is we have started operations, we operate, customers come to our network and we are servicing the customers so far so good. So and, yes, we are pretty happy with the results of the law so far given that we just started our handling operation in that market and we certainly at the very beginning. I’m not sure I can comment more, but I disagree with the statement less than expected. I think we are well aligned with our expectations. Yes, I hope it’s helpful.
Congratulations well, Ganesh Barclays (LON:BARC), congratulations on your results. Press article indicates that you plan to have major mobile network coverage in Spain in three years. How many cities you have now and how much deployments do you expect in 2025? How is your traction in Belgium market? Perksin, who says that your profitability has gone down after launch, could you please provide some color on this and how much subscriber addition you target in 2025?
Also, how is your fiber deployment progress in Belgium? Yeah, these are focused on questions. I think I will touch them maybe well, yeah, in a general fashion. Yes. We we do intend to build our mobile coverage in Spain.
In fact, there’s a model to balance as we on one hand so up to now, we operated an MVNO network, but we will change the nature of our agreement mid twenty twenty five from MVNO to MNO operation together with Telefonica as we activate the run sharing. From that moment on, we will balance the run sharing agreement that we have with Telefonica with new sites. This planning is ongoing and we have not decided how many sites and where we will do. So we cannot share these plans at this moment. Having said this, at no point in time, there’ll be any disruption or there’ll be no loss of quality because up until 02/1940, when we have agreement with Telefonica for run sharing, we will rely in significant portion on their network.
So our network development will aim to just improve the coverage that we have today and not change it otherwise. So yes, I spoke generally. I gave you the direction, but I can’t give you the exact numbers. Sorry about that. How is your traction in Belgian market?
So we now we comment what Proximus say. So sorry, I can’t comment Proximus comments. We are pretty happy with the launch. We maybe things could have been done better. I think we admit that.
But having said this, as we speak, customers connect to our network. We provide meaningful service to them and we are fully engaged. So we can’t complain. To say how many customers we will let in 2025, this is not our rule. We are not providing guidance and forecasts.
So we can’t comment on that. And how is your fiber deployment progressing in Belgium? Yes, it’s a good question. We are building fiber as we speak. This is probably our biggest focus at this moment because it’s less intense to run an Indian operation rather than build out the network.
We are very engaged with municipalities, with local authorities to have to provide to us access and to be able to build a network. And basically, we provide coverage as we speak. Having said this, we will not provide I can’t give you guidance on how many homes, how many how much progress we expect in Belgium. It’s anyway too soon, just too early. We have started building the networks relatively recently and it’s continuous work in progress.
David Bagman, hi, good afternoon. There seems to be management and cash crunch liquidity crisis at Digi Belgium. Can you explain how do you plan to solve it? Does this involve buying out your Belgian GP partners? Thank you.
Yes, well, it’s a pity this call or these questions go into discussing the Belgian operation, although I believe any aspects of operations deserve attention. But no problem, let’s stay here for now. I hope you appreciate and you saw the results earlier. And by saying this, I hope you appreciate that there is no liquidity crisis and no cash crunch at Digi or at Digi Belgium. So this I think I hope this answer addresses to the root most of the concerns or concerns if any.
I don’t believe there should be any. Coming to the last point of buying out your Belgium GV partner, that is also a wrong question. And once again, but sorry, maybe just to come back to and to comment a bit the news so that it is clear and yes, we don’t need to answer questions without the context. We did announce a few days ago certain changes within the management structure of Digi Belgium. The management changes are intended to streamline and to realign the focus of the company to make sure that our intention to build the networks both fixed and mobile in as quick manner as possible is satisfied.
So this is what is happening. And I believe the accent on potential problems or potential liquidity problems is totally wrong. Now if one would ask on the opportunity of the changes that we made, I would say this is a wrong question because we are very young in Belgium. We have just started operations and we will refocus and we will change our attention as many times as necessary to make sure that in the end we are building efficient well run networks and that we offer our services to as wide bodies as possible. This is our aim and I believe we should not read more into the news than there is to read into that.
And, changes, restructurings are take place every day, everywhere and and I don’t think we are an exception. But jumping from here to liquidity issues or liquidity problems is just too much. That’s why I pause to explain what is happening. But again, I don’t think this should be the focus of our discussion. Okay.
Vyacheslav Duboviskis, what is the approach of additional source of income? What is the vast strategy? I’m not sure I follow the question, but we offer a wide range of services and we offer to our customers mobile all aspects of communication including value added services. Now we are an operator in this equation. We are not a generator of value added services and we will remain so.
So we will certainly allow access. We will enable value added services or any other services that the customers wish to use on the network, but I don’t think we will originate them. I hope it’s helpful. So transferring it off, the same newspaper wrote that according to employee and former employees of DigiBelgium, the company is not paying its bills. They claim that the Romanian group is not providing enough money to its Belgian daughter.
What is your reaction to that? Well, I think this call does not deserve discussing our day to day cash flow or operations in Belgium. So I’ll pass on. But thank you for the question. Yes, thank you.
Alexander Tudor, good afternoon. There is a common problem regarding reporting financial results for BBB listed companies. Why does DG also wait for the last day possible to report? One second. Sorry, I lost focus.
Why does DG also wait for the last day possible to report? Moreover, given your size, we can’t digi reports full financials in preliminary reports, balance sheet P and L cash flow. It is really disappointing to see that after two months of period closure, the preliminary reports has four pages. Well, Alexandru, I’m really sorry to have disappointed you. I don’t think you’re asking something wrong.
It is what it is. Maybe we are focused too much on our operations, on our growth and maybe we have not looked more into this. Once again, I do sympathize with your question. We will do our best to change it. I do not promise it for the next year, but hopefully in two years’ time, our report will be significantly more complete.
But once again, don’t take me wrong. We will do our best to change and eventually provide more information. The entry in Portugal has been complicated. In Q4 it’s a question from Jose Antonio Suarez. In Q4, your convergent market share was flat quarter on quarter, including Novo.
What are the reasons behind? Where do you see mobile and convergent market share of DG in Portugal in 2025 and going forward? Well, we do not provide forecast. And I think Jose Antonio, I think your take is somewhat wrong. We are very happy.
We are satisfied with the ongoing traction in our Belgian market. And if I understand well, you say that we did not add any users except for Novo users in Q4. This is wrong. We will not provide a breakdown of Novo and Digi customers, but we have grown significantly the customer base already in the first quarter. And I think it’s a very good dynamic.
So I believe your reading of all numbers is incorrect. I hope my question helps you to look further into the numbers, but this how much you can disclose. David Bergman, are you ready to invest several billion euros in fiber in Belgium or would you rather wholesale from other fixed networks? Well, certainly, we are not ready and we do not want to invest several billion euros in fiber in Belgium. Several Billion Euros would be way too expensive.
Would you rather wholesale from other fixed networks? Yes, certainly. If we have good opportunities, we will wholesale from anyone. Heinz Fingadot, the same employee says that Belgium is not following all the rules on safety and labor conditions. You react to that?
I can certainly react to that. We follow the rules, laws and all regulations in all our markets of operations. So I disagree with this statement. Half of and the question follows. Half of the Belgian management has been fired this week together with several dozen of employees.
What is happening in the Belgian company? I believe I already explained, so I will not come back to this. I will address only new questions. What is happening with the network build in Belgium of the mobile network and the fiber network? Is there a delay as Damsources said?
I don’t think there’s a delay. There’s a continuous process. And, yeah, it goes according to our plan. Whether it could be done sooner or later, I think speeds vary very much on a market by market and on territory by territory. So from our point of view, we are growing as we speak.
We are looking for ways to always improve our growth in all our markets, be it Spain, Romania or Portugal or Belgium. So this is the same dynamic. We once again, I repeat the same comment I made earlier. We are very, very young in Belgium. We have just started our services and we are still at the beginning of building the network.
So it’s too early to ask for meaningful results. But I hope you can sympathize with what they say. A question from NH. Congrats on the great results. Could you comment on CapEx spending during q four?
How much was it? And what did you invest in? Thank you. I’m not sure. So so out of almost 900,000,000, the biggest the biggest item was, paying for no acquisition in Belgium, the biggest on unique item.
But other than that, I do not have the numbers in front of me. But I think doing the simple difference between what we did in Q4 and sorry, between what we did in the full year and in Q3 cumulative will give you the results. So sorry, can’t help you now. The question from Lauden. Hello, congrats for the stellar results.
To questions from my side regarding Portugal and one about Romania, it would be reasonable to expect the same decreasing trend in ARPU in line with Spain. Could you share any numbers inside regarding the synergies achieved in this market, Novo physician? Could you share with us some new info regarding telecom deal in Romania? Where are we right now? Thank you.
Sorry. Yeah. One second. Sorry. It would be reasonable to expect the same decreasing trend in our point line with Spain.
No. Look. We do not expect our RPA Romania is pretty stable, and we do not expect significant changes to the Romanian market mostly because of the size of the operation and because of our pricing policy which has been pretty stable to not change the markets to not change the prices in this market. For Portugal, we have just started. We are migrating the novel users to Digi offers and to Digi network.
Due to that, there may be changes in the ARPU, possibly a decrease in ARPU because I think Novo prices were higher than our prices in absolute terms. So yes, while we just started, we do expect changes in the Portuguese ARPU, Portuguese results, especially once again related to the migration of the Novo customers to DG. Whether we can compare these markets with Spain, I don’t think so. The synergies achieved in the Portuguese market, I think the focus of the question is somewhat I’m not sure it’s well, there are certain synergies to achieve, but it’s too early to ask. We should speak about this in one year time.
Could you share with us some new info regarding the telecom deal in Romania? This is an ongoing process. No significant changes since we last spoke in November, meaning we are in the process in the advanced process of obtaining approvals from the Romanian authorities. This is an ongoing activity and I think if I were to comment, it goes both according to the expectation and according to plan. So we hope for a quick resolution.
Now when will this come exactly? I think the authorities were mentioning the results somewhere towards the end of first quarter, maybe around that date. So that is our expectations of today. But we don’t have any further visibility. But once again, so far so good.
The deal is on a good trajectory and we expect not necessarily the approval, but we expect meaningful input from the authorities in the coming weeks and hopefully followed by an approval. Okay. So I moved to time swing it over again. This question has come from Bert Bryn from newspaper, the teach in Belgium. Zoom (NASDAQ:ZM) account measures are the name.
No. Thank you very much. Look, Berit, I hope I did address all of your questions. I said that, I’m not sure this is really the room to discuss the most recent Belgian developments, but no problem. And we are happy to address all the questions in the context where we can.
We don’t see any issues or any problems in Belgium. However, we wanted to refocus, to reposition our operations a little bit and we wanted to focus maybe both on faster growth and on faster growth and development of the networks. That’s why we made the management changes. We hope they are correct. We hope they will help us be better, be faster.
And yes, we really are open about everything we do or we are pretty open about everything we do. We will not give forecasts. We will not give guidance on our achievements. It is not correct from the market communication point of view, but it’s also quite impossible. And so but yes, once again, we will working, operating, making sure that we reach our goals and that Belgium is able to benefit from DG services nationwide this could be possible.
A question from Boyan Jurkovic. Twenty twenty five CapEx guidance, do you still see $750,000,000 as realistic? Yes, we do. And again, I just let me comment on the 2024 number in the context. So as you saw, we reported almost €900,000,000 in CapEx.
However, if you deduct the Novo acquisition, basically the CapEx spend is €775,000,000 7 80 million euros pretty close to €750,000,000 which in itself a large number. So yes, the 2025 CapEx guidance remains relevant. Any news on Telecom (BCBA:TECO2m) Romania, so I did comment, we are still in the process of obtaining our approvals for both the competition authority and the FDI commission. The processes are progressing and pending. FTTH sale in Spain.
Please quick status update of the project. So the agreement was signed in April, May ’20 ’20 ’4. The first page was delivered to Macquarie in September following the approval of the relevant authorities in Spain. And as of now, we continue delivering we continue Vibriq Networks and homes passed to Macquarie. It’s on track.
The contract is on track to be completed in about two years from today. So I think so far so good. And by the way, I failed to mention during the presentation the outstanding profit that we achieved for 2024 of almost EUR 600,000,000 That is certainly driven by the Spanish sale. And once again, this is a historic result for us. This is a big achievement for the group.
And the last question from Bojan, Romania price increases envisaged given inflation rate. No, not so far, not at this moment, not as we speak or not going forward. We are committed to continue providing high quality, good quality services to all our customers and we feel that within today, I don’t know, framework of results, revenues, EBITDA profitability, CapEx for Romania, we are pretty balanced and no changes are required on this point. Question from Ruben Fils. Has the launch of in Belgium gone according to plan?
Can you already report some statistics? There have also been news reports about lack of funding, large amounts of one second, I don’t see the question large amounts of unpaid bills and the peak management reshuffle. Can you confirm this information and elaborate on what is going on? So I think I did speak about it earlier. I will not stop now.
It will be a repeat. Ricardo Jose Sarajevo, when will inland areas of Portugal have DG mobile phone network coverage? Currently currently, there are many areas without any type of coverage. So at this moment, we cover more than 93% of population in Belgium with sorry, in Portugal with our own mobile signal. I believe it’s a very good result for a network that has just been launched.
And as we speak, we increase our coverage we continue to increase our coverage. So this is an ongoing process for us. I agree that because we are still new, young at the beginning, we may have white spots, we may have areas with lower coverage, but we are working continuously and so far so good. So I believe that you can’t really compare us to the incumbents. It will take us it will take us some time to become on par with them.
However, on the other side, we believe that the network coverage for a newcomer, 100% on network, no national roaming, no MD, no access. I believe the coverage is just outstanding. Bruno, reed cutting, what is your coverage in mobile population of broadband households for Portugal? So I need to cover the mobile population. For households, we are not disclosing the number.
However, we intend to reach by the end of the year more than 50% of the market. By how much do you expect this to increase through full year 2025? So I hope I addressed that. What was the organic growth ex Novo acquisition? We’re not splitting the numbers, but it is meaningful.
What CapEx and Piotr Hjborski from Wood, what CapEx and free cash flow level do you expect for 2025? So for CapEx, we did say what we mentioned earlier, EUR $750,000,000 that remains as our target and intention to spend for the full 2025. We’re not changing this number. For the free cash flow on the yes, look, if you look just at the first two elements of the free cash flow equation and you look at EBITDA and you look at CapEx, the total still well, the EBITDA less CapEx still remain negative remains negative for the group. Maybe in the area of yeah.
Just one second. Maybe in the area of 120, 1 hundred and 30 million euros that is mostly driven by our new territories, which still consume cash. However, they do not generate results. Nevertheless, we have funds both from the financings that are in place that are being done at this moment or from sources like Macquarie that basically cover this gap. Anton Gerstin, how much of the mobile subscriber growth in Portugal was driven by Novo brand versus Digi brand launch?
How many mobile subscribers was Novo adding per quarter before your acquisition? Sorry, I will not go into these numbers. I’d say the significant number of users comes from Novo depending on the segment, if it’s mobile or fixed, still at least 80% or 90%, ninety five % of our customers are the Nuvo customers. So our results in Portugal and our customers in Portugal are predominantly non Nuvo as numbers. On the other hand, the growth from now on is purely DG growth.
So basically, I think we have a starting point now Q4 twenty twenty four. And from now on, we will see the results hopefully growing and the difference, of course, will be attributable to DG. So I can’t really dissect all the numbers to your liking, but I hope it is helpful the way I did answer. The real Amundru, where do you see Spanish sales and EBITDA in 2025? Well, without providing exact guidance, as I said, we can’t and we will not.
Generally speaking, we are looking for growth in sales driven by new customer additions And we see a slight improvement in EBITDA margin in 2025. That is broadly our expectation and our intention. Pietro Tziborski again. What level of CapEx do you expect in Portugal, Belgium and Spain in 2025? Petr, I’m not sure we have disclosed this number so far.
So let me I will not go into details, but I will stick with the general guidance of EUR $750,000,000. What we can say about Spain is that Spain will be will have a continued CapEx, so no change there. While Portugal and Belgium may have mixed results, some of them requiring more, some of them requiring less CapEx. But overall, these will continue to be our focus markets and the markets we will continue to invest funds. A question from Youssef, what is driving EBITDA growth across the different regions you operate in?
Well, it’s the very simple answer to this question is the EBITDA growth is driven by the RGA growth. So we are a growing telecom operator present in all segments mobile, fixed, broadband, pay TV and so on. And our EBITDA growth comes from the expansion of our business. So Anton Jevcin, another question. What are expectations surrounding getting wholesale access to a fixed network in Portugal?
Well, again, like in any market, we are pretty open to any corporation based fixed, based mobile. Same goes through for Portugal. So far, we were not able to obtain relevant fixed network access in Portugal. And for that sake and for the record, neither relevant mobile access to a network in Portugal. So our main focus remains expanding our network there our own network there.
Piotr from Wood, would you consider increasing prices in Romanian anytime soon? So I think I did mention that. I’d like not to repeat, but for simplicity, the answer is no. Daniel and Andrew, what do you expect in terms of dividends out of all year 2024 net profit? So thank you for the questions.
We have an outstanding net profit. However, of course, the intention is to reuse most of the proceeds, if not all the proceeds for CapEx and expansion. As you appreciate, we are a very fast growing telecom group, pretty successful so far. I hope we maintain the momentum. I hope we maintain our profile.
And we certainly have we have directions and targets to invest into. Having said this, we will certainly like we did in any other year so far at least maintain the dividend that we paid last year and we will decide on a possible increase later when we announce our final results at the April and when we publish our invitation for the general meeting of the shareholders. But thank you for the question. I think it’s the right one. A question from Nora Nant.
Good afternoon. Thank you for the presentation. A few questions from my side, please. Could you provide operational KPIs for Mogul at the time of consolidation? What is the Nora, so very quickly, I think when we did the acquisition, there was an announcement on the company and there were few but very relevant numbers on the RGUs.
So I think just referring to those is mostly helpful. Second question, what is the CapEx guidance for 2025? We did cover that already. Does that include the acquisition of Telecom in Romania? Yes.
So the number that we provided includes also the possible or the expected acquisition of Telecom in Romania. Could you please provide a geography breakdown for revenues in Q4 twenty twenty four excluding other operating income? Thank you. Yes, excuse me, one second. Geography breakdown for revenues in Q4 ’twenty four.
Yeah, we can provide. So let me just follow-up on the further questions and we’ll come back to this question in a minute well in a few minutes’ time. Thank you. So question from Giovanni Raikhenbach. Hi.
Can you update us on your liquidity profile on raw committed credit facilities in place, RCF term loans, etcetera? So, Giovanni, we had, how should I say? We had cash and undrawn facilities as of the February of 100,000,000 or in excess of 1 well, anyway, in the area of €100,000,000, we are refinancing our Spanish facilities as we speak. Again, it’s a refinancing exercise. And we are also increasing certain of our facilities in Romania at this moment.
I’m not sure I can easily just help you with the numbers. But once again, we are in normal financing, refinancing cycle going through that as we speak. A question from Andrew Webb. Can you give us an indication of expected CapEx for 2025? We covered it already.
Fiber coverage targets in Portugal, any indication on new wholesale timelines, so so called services building. So I think we did cover that apology, I will not repeat myself. Jose Antonio Suarez, how many households do your fiber currently pass in Portugal? Last call was around 20%. No comment so far as we said a bit earlier.
The expectation is to increase coverage to 50% of the market by the end of the year. What are expectations on mobile subscriptions towards the end of twenty twenty five in Belgium? No guidance. A question from Ram. That was Giovanni Reichenbach, another question.
Please comment on the timing of the collection of additional proceeds from the fiber transaction in Spain. Do you plan to process similar transactions in Spain? I’m not sure the second part of the question is correct. So or shall I read it? Will there be another transactions like the initial Macquarie transaction in Spain?
So far, no. So we have just concluded Macquarie transaction last year with the transaction being under proceeding and we are not working on any other transaction of this kind at this moment. And the timing of collection of additional proceeds from the fiber transaction in Spain is over the next two years and a half. We have collected roughly EUR 500,000,000 in 2024 and we expect to collect the remaining EUR $250,000,000 over the next two years and a half or so. Regarding Portugal, Digi’s entry was highly anticipated and generated great it’s a question from Daniel Subra.
Was having anticipated and generated great expectations? However, we have encountered several issues. Service quality is a priority and we must consider the company’s experience. But from the reports found in the news articles, forums and specialized blogs, it is clear that the price alone is not enough. What are the shorter expectations for digital operations in Portugal?
Daniel, your question is pretty general. It indicates or you try to say that we should work on improving our quality. We fully agree that is a priority for us in any market, specifically for the Portuguese experience. Once again, we are pretty satisfied with the launch, with the rollout. We have to be grateful to our customers for having the patients to start early on with a newcomer while maybe not all operations, not all systems, not all procedures are perfectly in tune in comparison to the incumbents.
But we are doing great efforts to improve as we speak. So we agree with your comment and we will certainly focus not only on price as and we agree 100% with you that price is not enough. Price always comes second, if not third or fourth. Daniela Mundro, what CapEx have you planned for 2025? We covered that.
Jose Antonio Suarez. Also how is connectivity in Lisbon Metro going forward? When do you expect to have access? We are working on these so these are the features of the Portuguese network but not only. And we’re working to improve our access.
No development or no comments here so far. I expect you to get a wholesale agreement with any of the three main Portuguese MNOs. We have not managed to get one so far. If we are able, we will certainly embrace it openly. A question from Konrad Musial from Decao.
What level of CapEx should we expect for 2025 at the group level and could you provide any split between countries? So sorry, we will not provide split and for the full CapEx we did address the number earlier. Did you expect Italy, Portugal and Belgium to still be loss making in 2025 or will you breakeven? Italy is not loss making. Portugal and Belgium will certainly continue to be loss making, but not only in 2025.
It will be loss making in 2026 and maybe farther, although we have no visibility we have no perfect visibility on that. So the expectation is right here. Just to comment on Italy, you may be reading Italy operations wrong because on our financial statements, Italy is grouped with other and it also includes our holding activities which have costs but which have no revenues associated or no profit. That’s why Italy is unjustly penalized. But Italy is a profitable country for us.
A question from Ganesh from Barclays. Can you update on your view on Romania mobile consolidation? What is said on their call this week, they hope to conclude the sale of their mobile assets in first half twenty twenty five. So my hope and my expectation is still around first quarter twenty twenty five which is fully in line with OT’s statement. Once again, we are in advanced stage of dealing, discussing with the authorities engaging with the authorities.
And once this process is over, we hope for a swift conclusion of the transaction. Is your mobile network build in Portugal RGA complete or is further coverage required? Any color on commercial trends would be great there. Well, an operator’s mobile network is never complete and sorry for this generality. We are early on in Portugal.
We have done a very big effort in starting the full mobile service on our own network at the end of last year. We will certainly continue investing, expanding and building our mobile network. I think there are certain reports there are certain technical reports in the market comparing certain features of our network like five gs connectivity to other operators and we score or rank higher than others. It is not enough to say that I mean, it’s certainly not the basis to say that we have the best network, but it really shows that we have a relevant network. And once again, we will continue investing and we’ll continue improving it.
But thank you for the question. A question from Marius Ander. Do you have any intentions of increasing the visibility of Digit shares on the BVB by contracting market making services and have liquidity targets for access to indices like FTC? Yeah, just one second. We would certainly like and love to increase the visibility of Digi shares on BBB.
We certainly like our liquidity and BBB liquidity to be higher because I mean that’s a wish for any listed company. That’s a certain that’s the road for success. I mean to have good liquidity, to have good price, to have good price tension in the market, to have good price levels in development. Whether we will contract market making services, yes or no, we can’t comment at this moment. No decision taken so far.
Question from Jean Rene Maduri. Hello. Can you please give us guidance for CapEx for 2025 at the group level and by geography? So we touched it, we skipped this question. Any update on the acquisition of Telecom Romanian asset?
I think we’ve already covered this pretty extensively. Thank you for the question, but we will move on. Another question from Bram. Can you share more details on how you expect to increase ARPU in Belgium in the long run? Well, why increase?
I mean, we’ve launched our services just recently. We are we believe that we provide a good ARPU level and we don’t see a reason to increase the ARPU. We see our focus and our effort will be of course to grow our market presence and eventually our market share, but certainly we will not focus on increasing the ARPU. A question from Ricardo Jose Saheva. When will Digi Portugal have a serious and effective customer support service?
Yeah, well, thank you for the critique. I hope it is constructive. We have a customer support service working around the clock. We are available to our customers in all our markets also in Portugal and we will certainly continue investing into resources and into our coverage. But yes, once again, thank you very much for the question.
The question from Johan Mihai Ingel, hello, and it’s also shared by base by TG. Is this something you would consider doing perhaps in the near future when CapEx is down after most of the infrastructure is built in the new markets? Thank you for the question. I think it’s a right focus. It’s a really good question.
And we are not we are pretty much well in line with your thinking. However, at this moment, we still prioritize CapEx versus buybacks. But if this policy changes, we will revert to the market. But we think this is this is not the wrong way to think about it. A question from Ricardo Jose Sarajevo.
When following Romania’s example, does Digi Portugal plan to implement the alert systems via cell broadcast? We are working on this. I personally cannot give you guidance at this moment. But hopefully, yeah, if I don’t know, we can certainly, we can certainly follow on this question. Is it separately offline or on the next call if this will still be relevant?
The question from Daniel Amundru. If you estimate that your FCF for 2025 will remain negative within $1.2 1 point 3 0 million range based on a CapEx forecast of $7.2 You can imply for this year estimated EBITDA of six twenty five million dollars Is this correct? I will not comment. Thank you very much. And I think we are done so far.
So it was a pretty long hour of speaking on the questions. I hope we addressed everything. I hope we addressed the launches. And thank you very much for the critical attitude. Yeah, we deserve it’s always pretty difficult to launch new mobile and fixed services in Europe in 02/1934 and 02/1935 when the markets are very mature.
But I hope that you also appreciate that we had successful launches and we will do our best to make them even better. And this is, I think my conclusion to the call, but we still wait for a minute or so to see if there are more questions. Uh-huh. So we have one more. When do you expect a positive free cash flow?
Yeah. It’s we hope that we will still have lots of opportunity for growth. So I wouldn’t promise you free cash flow neither in 2026 nor in 2027 because if we are in the red from this perspective, it means we are growing and that is really our aim as a group. And I hope that you appreciate that we are a growth telecom operator and not a dividend yield telecom operator. And I think we enjoy one of the fastest growth rates among our peers in Europe and we certainly want to maintain it like that.
So I wish I could give you a positive answer, but I remain in this territory. And again, our priority and our hope is to have more growth going forward. And I will ask Dan just to comment on Nora’s question from a bit earlier. Hello. I understood that the question was related to Q4 CapEx.
Well, in fact, it’s also in the presentation. The figure for Q4, it’s three twenty nine. And, yes, it showed as Sergey previously mentioned, it’s mainly as a result of the completion of Novo’s acquisition in Q4. And yes, next to that, some the completion of some other ECA as it was in fact the case throughout the year. Year.
Okay. There’s one more question for Youssef. Can you discuss the drivers in the margins for the different geographies? Well, we I’m not sure we can discuss the drivers, but we can discuss the dynamic. So in Romania, we have a pretty stable operation with margins that with healthy margins on an industry level.
We don’t expect significant changes here. Again, it is all our efforts are made to both manage the growth but also in fourth place. In Spain, we are basically we have a mixture of MVNO operations so far and network operations. And as we speak, the margins are expected to improve in the future as we transit from MVNO to MNO operation and as we operate and control our own network. So this change will be gradual, probably more accentuated in February towards the end of twenty twenty five as we again, as we move from what they have been agreement to a run sharing agreement.
And this change will be even faster in 2026. So we aim for EBITDA margin improvement in Spain. For the other markets, well, we are EBITDA positive in Italy, as we mentioned. We do not expect significant changes there. For the other markets, we it’s pretty early to say.
Of course, we are in negative because we have costs and our revenues are still just start to show. So it’s very difficult to comment on the margins there. We’ll have to have more time and more history to comment on these numbers. But thank you for the question. I mean, I hope I give you a bit of direction and you can understand the numbers for your modeling or for your understanding of the business.
So we’re stopping here. Again, it’s been a long hour and a quarter. And we will release the full year results with balance sheet P and L and cash flow around April. And we will certainly follow with the first quarter results in mid May. Bye to know to all of you before then and hope to see you soon.
Bye bye.
Moderator/Operator, Digi Communications: The recording has stopped.
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