2013 Supplier Awards Event

WELCOME

Guy De Poortere

Vice President SCM

Supplier Day

15/10

Agenda

16 SEPTEMBER

Friday

Subject Speaker Belgacom Intro Ray Stewart CFO Facts & figures Ray Stewart CFO Innovation as a Laurent Claus driver for success VP Customer ICT Services Partnership, Dominique Leroy a way to innovate EVP CBU Duality of innovation and Bruno Chauvat sourcing in a global market EVP Strategy & Content Innovation in Supply Guy De Poortere Chain Management VP SCM

BELGACOM INTRO

Ray Stewart

Chief Financial Officer

Supplier Day

15/10

How did Belgacom perform so far in 2013 FACTS AND FIGURES

Ray Stewart

Chief Financial Officer

Supplier Day

15/10

Belgacom Performance over first half 2013

• Financial results H1 on track to meet FY guidance o Revenue -0.9% YoY o Ebitda -4.1% YoY o Capex/revenue 11.7%

• Operating conditions very challenging o Stiff competition & New Telecom law led to Mobile disruption o European regulation measures on Roaming significantly impacting

revenue & ebitda

• Belgacom well positioned to face challenging market dynamics o Successful mobile retention/acquisition actions o Solid performance of Belgacom Fixed business o Convergence strategy providing solid support

H1 2013 HR and Non-HR expenses

450 443

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

0.11

0.12

0.13

0.14

0.15

0

200

400

600

800

1,000

1,200

Ytd June 2012 Ytd June 2013

-1.5%

Non-HR expenses ( € million)

559 572

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

0.11

0.12

0.13

0.14

0.15

0

200

400

600

800

1,000

1,200

Ytd June 2012 Ytd June 2013

+2.4%

HR expenses ( € million)

• Cost evolution unbalanced versus revenue trend • Structural cost inflation turns costs management into a key challenge for

Belgacom

H1 2013 Group Revenue (mio €)

H1 2013 Group direct margin (mio €)

H1 2013 Group Ebidta (mio €)

Invest in high quality fixed and mobile network to maintain leadership in convergence

360 370

11.2%11.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

0

200

400

600

800

1,000

1,200

Ytd June 2012 Ytd June 2013

Accelerated network investments in 2013 o maintain network superiority on mobile speed and coverage, o increase the bandwidth on fixed network via DLM and vectoring technology o make operations leaner through a simplified network

H1’13 Free Cash Flow of € 136 million impacted by income tax payments and lower ebidta

409

797

980

788691

289

136

2008 2009 2010 2011 2012 Ytd June'12 Ytd June'13

Free Cash Flow (in mio € )

Lower FCF result of: • a timing difference in

income tax payments • lower EBITDA

Sound financial position with one of the lowest debt levels in European telecom sector

(1,601)136 (538)

(38) 14 (1) (2,027)

Net debtDecember 2012

FCF Dividends Non controllinginterests

Net sale oftreasury shares

Other Net debt June2013

• Net financial debt at € 2,027m • The outstanding long term financial gross debt amounted to € 2.1Bio • Credit ratings: Standard & Poor’s A; Moody’s A1 – both stable outlook

Retention actions stabilised mobile churn

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

postpaid

prepaid

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Clear effect New

telecom law

effect in EBU much less

pronounced

Consumer Mobile Churn

Enterprise Mobile Churn Focus on mobile in H1 through positioning of

Proximus network quality, proactive retention and acquisition actions

> 60% postpaid

customers on new mobile tariff plan

H1’13 Focus on mobile: retention and aquisition

45

-39

-88

-52

46

5,543 5,504 5,416 5,364 5,410

4,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

-100

-80

-60

-40

-20

0

20

40

60

80

100

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Mobile customer evolution2

net adds total

89

41

-16

61

128

-44-80 -72

-113-82

-120

-70

-20

30

80

130

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Split Postpaid - Prepaid

Net adds Postpaid Net adds Prepaid & MVNO

50

17

-37

26

93

-44

-80 -68

-108-82

-150

-100

-50

0

50

100

150

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Net adds Consumer Prepaid

Net adds Consumer Postpaid

36

2116

3033

0

5

10

15

20

25

30

35

40

45

50

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

EBU Net Adds

Mobile

market share₁

+Tango

Supported by tactical

joint offers & strong

marketing actions

40.4%

30.5%

23.6%

5.5%

Mobile offers became more abundant and simplified

Clear Postpaid ARPU impact While Prepaid ARPU remains fairly stable

Since the Telco law came into force, the Consumer

Postpaid ARPU decline clearly accelerated. Initial loss high-value postpaid customers

Re-pricing effect ( ~60% of the Postpaid customer

base has been re-priced to new tariffs)

Prepaid (lower ARPU) moving to Postpaid

In contrary, the Prepaid ARPU was not impacted by

the new Telco Law.

27.3 €28.9 €

26.6 €24.1 € 24.4 €

14.2 € 13.6 € 14.4 € 13.3 € 14.0 €

.0070 €

.0120 €

.0170 €

.0220 €

.0270 €

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Consumer blended ARPU: Split Prepaid - Postpaid

BlendedPostpaid

ARPU

BlendedPrepaid

ARPU

37.2 € 35.5 € 33.9 €31.5 € 30.8 €

0.0 €

0.0 €

0.0 €

0.0 €

0.0 €

0.0 €

0.0 €

0.0 €

Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Enterprise blended ARPU

The Enterprise Business experiences a more general

ARPU decline driven by: Regulation

More abundant offers

Churn of high-usage customers in the last quarter of ‘12

Solid performance of fixed products

Convergence strategy: key advantage in challenging market

INNOVATION as a Driver for Success

Laurent Claus Vice President Customer ICT Services

Supplier Day

15/10

Innovation driving mobile leadership and fixed speed evolution while simplifying

—Dynamic Line Management

—Preparation for Vectoring

—Activation FTTH test-customers

—Network simplification on track

—New IT foundations on track

—Higher network & IT stability

—3G+ network upgrade

—4G network roll-out

Simplification Fixed Mobile

Innovation As Key Value Enabler What We Have Achieved In 2013

SMART

Due to pressure on our revenues, cost efficiency programs are here to stay. Hence, we need to be smarter and work more together

while still bringing better experiences.

SMART NETWORKS

1

SMART INNOVATION

2 SMART

OPERATIONS

3

Innovation as a Driver for Success Prepare for the Smart Operator Era

Smarter network investment through increased intelligence & better alignment with future

Be smarter in Fixed Be smarter in Mobile

Exponential mobile data growth demands for increased network intelligence to control required high investments in capacity

Further extension of our high-speed network footprint through maximal alignment with our envisioned future target destination

users X 2 in 1 year

+60% in 6 months

APR 2012

JUN 2013

AUG 2013 More non-linear

demand +80% in 2 years

AUG 2011

Innovation As A Driver For Success Smart Networks

Smart differentiation through new convergent innovative services on top of our networks

Be smarter in Partnerships for innovation Be smarter in new services innovation

New convergent services with a differentiating customer experience through smart combination of our networks & technologies

New type of strategic partnerships to bring innovations faster to the market

+ + MOBILE FIXED ICT SHARED

RISK SHARED VALUE

Innovation As A Driver For Success Smart Innovation In Services

Simplify for more lean operations while converging to an omni-channel experience

Smarter optimization of operational costs Towards more smarter operations

Network simplification to decrease operational costs and new IT to bring a more efficient omni-channel customer experience

Optimization of operational maintenance, support and workforce costs in line with industry reality of declining revenues

MAINTENANCE COST

WORKFORCE COST

SEAMLESS experience

LEAN Operations

SEAMLESS Platforms

+ =

Innovation As A Driver For Success Smarter Operations

Innovation As A Driver For Success Summary

SMARTER through more collaborative partnerships

The Supply Chain Awards

SUSTAINABILITY

PARTNERSHIP A way to innovate

Dominique Leroy

Executive Vice President CBU

Supplier Day

15/10

CBU strategy: 4 pillars to reach our ambitions

LEADER IN MOBILE VIA • Proximus brand Revamp

• Best network strategy

• Grow and monetization of data

• Scarlet to address price seekers

THE BEST CONVERGENCE EXPERIENCE THROUGH • Convergent devices

• Convergent network

• Convergent content

SIMPLIFICATION TO

• Boost the customer experience

• Reduce our cost

INNOVATION THROUGH PARTNERSHIPS

• Find new revenues sources

• Increase loyalty

CBU strategy : innovation pillar

Arrow 1

Better customer

experience

Faster

Simple & agile company

More efficient

Device, network and application – gradual evolution to partnership allowing :

• Belgacom to benefit from

global player expertise

• The customers to benefit from best convergent experience

Evolution from pure vendor management to partnership

Customer context: Device partnership

Growing importance of devices as enablers of our access & enabler of our convergence Benefit from global player expertise

All devices - fix & mobile - are key enablers for our new services

Music Photos

Calendar

Contacts

Mail & social network

…

Partnership expertise in portfolio - Selection of innovative products -

Partnership efficiency in organization - Collaboration process -

Partnership expertise in marketing - Synergies in communication -

Implement CPFR tools (Collaborative Planning, Forecasting and Replenishment)

• Co-development Partnership on VDSL2

System Level Vectoring technology

• Belgacom will likely to be the first to deploy it at large scale, as from early 2014

• Boost the customer experience of Belgacom Internet and TV products

Customer context: Network & partnership

• Thanks to the partnership with FON,

Belgacom was the first in Belgium and among the first TelCo in the world, to offer free global WiFi network sharing

• Every Belgacom broadband customer gets unlimited free access to all Belgacom 700k Fonspots in Belgium, and to 12 Mio FONspots around the world

Partnership to improve time to market & to increase reach

Innovator in application & content Search new revenues sources and increase loyalty

Develop a new umbrella to better protect and assist our customers starting with:

• Device insurance

• PC Security

• Home Control

Protection Entertainment

Maintain & develop ARPU in an increasing OTT context through :

• TV content

• TV Everywhere

• Music

• VOD & SVOD

Example of successful partnership : Norton They went beyond their expected role & supported us in the sales & marketing domain (training,

incentive & participation in the outbound calls campaigns)

Example of marketing/communication Win-win collaboration

Clear support to our Network Superiority claim

A tram as less “conventional” and cost efficient medium ( with local impact)

Brand visibility for both parties

Call Center Partners Customer Care and Customer Help Center

Inbound Calls Administration

Outbound Campaigns

Inbound Calls Outbound Campaigns Inbound Calls

Outbound Campaigns

Inbound Calls Administration

Outbound Campaigns Chat services

E-mail services

Inbound Calls Outbound Campaigns

E-mail services

Belgacom’s Call Center partners need to provide the necessary flexibility to reduce waiting times for customers requiring service or help, even at peak moments.

• Avoids customers calling back • Improves customer satisfaction: fast response to customer demand

Numerous success so far allowing to embody and drive convergence in the Belgian market

Partnerships are about :

• Long term vision, instead of succession of tactical actions

• Growth generation

• Global vision, all product lines

• Innovation

“STRONGER TOGETHER “

The Supply Chain Awards

QUALITY AND SECURITY OF SUPPLY

Duality of innovation and sourcing in a global

market

Bruno Chauvat Executive Vice President Strategy & Content

Supplier Day

15/10

Renewal is the 21st century model of sustainable development

Who knew Lady Gaga before 2008 ?

In 2012, we said : Future is unpredictable…but we can anticipate it

Renewal is the 21st century model of sustainable development

Hanna Montana @Disney Miley Cyrus @VMA

2009 2013

2013 : but it is always

more unpredictable…

Renewal is the 21st century model of sustainable development

Hanna Montana @Disney Miley Cyrus @VMA

2009 2013

2013 : but it is always

more unpredictable…

Early enough to lead or too late to survive ?

Innovation is the competitive advantage to survive in our industry

Innovation is the competitive advantage to grow even faster...

Early enough to lead or too late to survive ?

Innovating under different angles

- Business model discontinuity

- Innovation across the value chain and category killers

- Bring scale to reach everyone everywhere

Innovation should manage the legacy

- Simplification

- Smooth migration

- Backward compatibility

- Upward compatibility

Together we shape the future

Conclusion

The Supply Chain Awards

INNOVATION

INNOVATION in Supply Chain Management

Guy De Poortere

Vice President SCM

Supplier Day

15/10

Strategic Priorities For 2013

3 New Services

1 Customer Experience

2 Simplification

Innovation CSR Risk Mgt Time To market

Value chain

Quality Perfor-mance

Will increase focus and speed up investments in our priorities:

Enabled by our people and our suppliers

Our strategy is to be the leader in convergence

Belgacom SCM Growth Path 2012-2013

Commercial orientation

Transaction orientation

Process orientation

Supply chain orientation

Value chain orientation

Purchasing coordination

1 2 3 4 5 6

From Price to Cost focus From TCO to Value focus

Contribution to competitive advantage

Time

Availability Price Synergy XF Sourcing Integration Value

Transactionally integrated Internally integrated Externally integrated

Transaction towards value & innovation

What did we deliver and how to meet & exceed BU challenges & expectations?

Observations / Expectations

Observations Suppliers are key in innovation

SCM has a pivotal role

in...

Controlling costs & assets

Value creation & innovation

Four Rings Of Innovation

Business model

Product & services Process

Technology

Launched by M.D.I. this worlds 1st car to run on air with an air engine fixed on its back

First Ring Of Innovation Technology Innovation

WHAT?

Technology Innovation Belgacom Vectoring

100 Mhz

50 Mhz

Second Ring Of Innovation Process Innovation

5 fingers touching the factory & 5 touching the customer

Zara can design, produce & deliver in 15 days flat

Collects 85% of full price versus 65% competition

Example Fashion Retailer ZARA

Process Innovation Belgacom One Warehouse

• Serial number tracking of devices throughout the E2E Supply Chain • A formal handover is tracked when changing responsibility

• A central management system to view at all times the status of a device

Third Ring Of Innovation Product & Service Innovation

Product & Service Innovation Belgacom Easy Access

Fourth Ring Of Innovation Business Model Innovation

Business Model Innovation Belgacom 11

Business partnering model

Beyond traditional operating models

Joint business platforms

Four Key Dimensions Of Successful Supplier Interaction

Pro-activity roadmaps

Customer of choice

Cross functional

SRM

Exchange Quality of Commu-nication

We invite you…