Hello, welcome to the H1 2023 call. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you'll have the opportunity to ask questions at the end of the call.
This can be done by pressing star one on your telephone keypad to register your questions. If you require any assistance, please press star zero, and you'll be connected to an operator. I will now hand over the call to your host, Mr. Koen Van Mol, the Director of Corporate Strategy and Investor Relations, to begin today's conference. Thank you.
Thank you, operator. Good afternoon, everyone. My name is then, Koen Van Mol. I'm Director of Corporate Strategy and Investor Relations at Orange Belgium. I would like to welcome you to the presentation of the results of the first half of 2023. Here with me are Xavier Pichon, our CEO, and Antoine Chouc, our CFO. Following the closing of the VOO acquisition in the beginning of June, for the first time, we have included figures of VOO in the publication of our results.
The main financial figures contain one month of VOO, indeed. As usual, you should have received our financial communication this morning. In any case, you can also find all the relevant information on our corporate website. A Q&A session will follow right after Xavier's and Antoine's introductory statements. I will now leave the floor to Xavier.
Thanks, Koen. Hello, everyone. Hope you're well. Welcome to this presentation of the result for the first semester of 2023. Of course, you know that this semester has been a major milestone for Orange Belgium. The beginning of June, we've closed the acquisition of the transaction of VOO, marking the beginning of a new chapter for Orange Belgium.
Let's go now and dig into the section 1, this slide, number 5, I guess, and we will give you more insight on our new strategy, Lead the Future. As I told you, we've been able to close the acquisition on June 2, which has permitted us to start the integration of the two companies, of course, which is very, very promising.
We can say that already today, despite the fact that VOO and Orange Belgium are still two separate legal entities, that we are already acting as one operator, and we advance progressively, and this is gonna be more and more visible in the upcoming months. First of all, having a mobile and fixed network within the two entities, it's important to have a common and aligned network strategy.
It will allow us to execute our gigabit strategy, both on fixed and mobile networks, which is part of our new strategy, Lead the Future, as a tool. On the commercial side, common operations and objectives have been defined. There won't be conflicting commercial act that would create inefficiencies. To enable efficiency, a new organization has been put in place that ensure there is a complete alignment between the management teams of the two entities.
We can now say that the synergies that have been identified at the start are confirmed. Currently, we're doing all operations to ensure that they are and will be on track. Slide number 6. Now let me go further in our new strategy called Lead the Future. It is based on a concept and 3 pillars. The concept is that although we are 2 legal separate entities, we have been a single operator since the beginning of June.
This means that our teams in all areas can exchange, coordinate, and work all together to build a current coordinated strategy to serve our customers. The 3 strategic pillars, and I must confess, that they have been the same since negotiation with Nethys, and we were already part of our proposal to win the VOO acquisition, as are follows.
By 2024, we will be the leader in gigabit networks and will secure this multi-gigabit position over the long term, thanks to the Orange Group's recognized expertise in FTTH. By mid-2024, Orange Belgium will be the national leader in gigabit networks, offering 95% of the Belgian population access at speeds of 1 gigabits. Our GigaBoost program, a booster, we will reach 100% of our customers with a speed of 1 gigabit by mid-2024, both in Brussels and Wallonia.
Over time, Orange Belgium will maintain this leadership of its networks by evolving the GigaBoost program towards GigaFiber, which will enable us to offer our customers 10 gigabit speed. The agreement with Telenet will guarantee us access to its gigabit and multi-gigabit network on a long-term basis, both in the remaining part of Brussels and in Flanders.
For our mobile network, we'll continue to deploy 5G frequencies, our 5G SA core network, and implement further the RAN sharing. The second pillar is our excellence in customer experience. Our ability to offer multi-segmented and differentiated retail services, will bring outstanding connectivity and value-added services to premium and access customers. Excellence in customer experience is an historical strength of the Orange Group, Orange Belgium, and VOO.
We will continue to develop and improve our value proposition across all market segments, as I told you, premium access, and of course, B2B as well. From a societal perspective, Orange Belgium and VOO are committed to becoming net zero carbon by 2040 and to promoting digital inclusion in Belgium society and regions. We also aim to become the preferred tech employer in Belgium by implementing modern management techniques and promoting inclusion and diversity.
Let's go into the highlights for the last and of the last semester. Slide 8. Orange Belgium has been selected by the Brussels Region to carry out the development of the Brussels City Commission Network over a period of at least 10 years, renewable for 5 years, so 10 plus 5. The objective of the new public contract, entitled Irisnet3, is to enable all public administrations in the Brussels Regions to benefit from the Irisnet network and its catalog of services at competitive prices.
With the collaboration of Paradigm, previously CIRB, Orange Belgium, and the Brussels Region, aim to prepare the region for the leading digital challenges, such as the increasing data exchange of Brussels institutions, large-scale connectivity of citizens, and protection and surveillance services in the public domain.
Through the support of Orange Belgium, the Brussels Region aims to become a European Smart City at the forefront of digital transformation and connectivity. This ambition include the creation of Brussels Smart City, a virtuous cycle synonymous with innovative collaboration between the city's stakeholders, its inhabitants, and companies. Slide 9.
Orange Belgium has been selected by the federal government Department of Economy to conduct 11 Belgian pilots projects supported by 5G, which will run in 2023 and 2024. In doing so, Orange Belgium responded to the Minister of Economy project call to encourage the creation of new initiatives on 5G. The objective is to accelerate the rollout and the implementation of 5G use cases in Belgium.
More than ever, businesses and enterprise are expecting telecom providers to not only offer connectivity at the office and remote, but also on a broader range of services, as well as guidance on new future-proof technologies. In that context, Orange Belgium, in consortium with different private companies and/or public services, presents 11 projects using its 5G standalone technology.
These different projects show how 5G could be beneficial for companies and consumers in different areas, such as the healthcare sector, transport, logistic, audiovisual production, military defense, and public security production, smart cities. Thanks to these initiatives, Orange Belgium will be able to facilitate the innovation with local actors and demonstrate the full 5G potential based on its first-class national network. Slide number 10.
Orange Belgium has launched the Livebox, its latest generation DOCSIS 3.1 HEVC gateway, and its Wi-Fi 6 extender booster. The Livebox will also enable Orange Belgium to launch a new boost giga offering at 1 gigabit with 95% national coverage by mid-2024. The Livebox is the most advanced and sustainability-built hybrid fiber coaxial gateway for the consumer and business market, with an end-to-end Wi-Fi 6 solution. The gateway also includes EasyMesh technology and the new Wi-Fi booster extender for a seamless extension of Wi-Fi service.
In addition, both the gateway and the Wi-Fi booster modules have been designed to reduce the carbon footprint, they are easy to refurbish, made from 95% recycled plastic, excludes single-use plastics, and are packaged with recycled cardboard. This project is an additional proof of Orange Belgium future-proof ESG enterprise model. The telecom operator has a long-term objective for reducing net carbon emission to zero by 2040. Slide 11.
On the regulatory topics, we would like to highlight that the commission has approved the acquisition of VOO by Orange Belgium. The complaint of Telenet against the rent-sharing agreement was closed without further consequences for the project. This has both cleared the way for Orange Belgium for the execution of its conversion strategy. That being said, I will now pass the floor to Antoine, who will give you more details on the commercial and financial results.
Thank you, Xavier. Hello, everyone. It's a pleasure to have you on the line today for the presentation of our H1 results. Since the closing of the VOO acquisition, as already indicated by Xavier, our organization has been put in place in order to address the market in a coordinated way.
The structure we've put in place will ensure that the synergies which have been identified will be executed. Since the beginning of June, we are preparing operationally the execution of this synergy plan, we are perfectly on track. We also confirm that over time, we'll have a run rate of about EUR 85 million in EBITDA, thanks to these synergies. From a financial, operational, financial point of view, this transaction obviously is quite complex.
One of the reason is that VOO only integrated the activity of Brutélé just before the closing. Until then, Brutélé was an autonomous company with its own financial management. In addition, both entities had to change their accounting standards from Belgian GAAP to IFRS, and this result then had to be consolidated in the accounts of Orange Belgium. Obviously, I think the closing on the 2nd of June, just before the end of the half year, it gave only limited time to set up a complete financial reportings.
We are therefore not able to report our H1 results, the financial results, with the same granularity as we usually provide for Orange Belgium. For an example, while revenue do include VOO and Brutélé revenues for the month of June, the bulk of VOO's revenues are included in the equipment sales and in the other revenues line. They are not split between service revenues and wholesale revenues.
Obviously, all this will be aligned in the next financial communication, which will include seven months of VOO P&L within the several reporting lines, as we've always done. Until now, as I said, VOO has reported on a Belgian GAAP rather than IFRS, and clearly, Belgian GAAP offers greater flexibility than IFRS in terms of OpEx capitalization.
Compared with the EBITDA reporting under the Belgian GAAP, we've had to restate in OpEx some amounts previously booked in CapEx. It means less EBITDA, but also as much less CapEx, and it was clearly identified, and it's not a surprise for us. If we go to the key achievement of the first semester, slide 13.
Within our commercial figures, we report, as usual, the figures for Orange Belgium, but currently the figures, it's without the figures related to VOO. Our positioning contributed to a very nice commercial performance. We've increased our mobile customer base by 2.7%, reaching about 2.85 million customers.
We've added we added 21K new cable customers, reaching 464K customers, an increase of more than 11%. As I said, our global financial figures, they do include VOO for the months of June. For the first semester, including including June, for one month, we've reached EUR 740 million, which is an increase of 2.9% year-on-year on a comparable basis.
For the EBITDA, we are a bit less than EUR 180 million, an increase of 0.9% on a comparable basis. Both on slide, moving to slide 14. Both our cable customer base and our mobile postpaid customer base have been growing. I said, these figures, they do not include VOO.
Despite the fierce competition, we consolidate our mobile market share, and we significantly increase the our broadband market shares. In slide 15, you see the waterfall for the revenues for the first half of 2023. It's as explained, it's, it could be, it's a bit more complicated than as usual because of the integration of VOO. In our OB retails, OB only retail service revenue, we see an increase of almost EUR 42 million in comparison to last year. This is once again, these results are for the service revenue results are for OB only.
The conversion service revenues and our mobile service revenue growth increased thanks to the development of the customer base and the positive evolution of our ARPU. The growth of our fixed customer base has contributed to the increase of our fixed and IT service revenue.
Our wholesale revenues for OB only are on the decrease, and on a reported basis, the equipment sales and the other revenues have been increased, mainly as it includes the VOO wholesale and service revenue for the month of June. The total revenue, once again for the period, increased by 2.9% on the comparable basis and by 9.3% year-on-year on a reported basis. I'm moving to slide 16.
The growth in revenue is not fully translated into EBITDA because of the high inflation of our costs due to the macroeconomic context, labor cost indexation, energy prices, as already explained. We still achieve a year-on-year growth of our EBITDA on a comparable basis, thanks to a tight cost management.
All in all, our EBITDA grew by almost 1% on a comparable basis and by 7.1% year-on-year on a reported basis. Slide 17, for the CapEx, eCAPEX. We increased our eCAPEX by 15.5% on a comparable basis and 27% on a reported basis, to EUR 109 million, including the figures of VOO.
The increase is mainly explained by the implementation of the rent-sharing agreement with Proximus, some seasonality in customer premises equipments, and by the cable modernization of the VOO network. Slide 19, that will be the last one. Taking into account the integration of VOO as of the beginning of June, we've reviewed our guidance, including 7 months of VOO, the 7 months that will be consolidated by the end of year in Orange Belgium accounts.
We expect to combine EBITDA for 1 year of Orange Belgium and 7 months of VOO to be within the range of EUR 430 million-EUR 450 million. For the eCAPEX, we expect to be between EUR 290 million and EUR 310 million. With this, I conclude with for this presentation, and we'll be more than happy to answer all your questions.
We will now have a Q&A session, where you will have the opportunity to ask questions regarding the results. Operator, may I ask you to open the floor for questions?
Sure. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the first question from line David Wadhwani from ING. The line is open, and please go ahead.
Thank you. Good morning, everyone, and thanks for taking my question. First question on the VOO network. I think in June, you've communicated your ambition to reach two-third of your network with 10gigabit speeds by 2040 through a mix of own network and collaboration with partners. Can you explain us what this implies practically?
What are the scenarios that you have in mind to get there? I'm referring to maybe to a potential collaboration with Eurofiber or Proximus. What is actually doable from a legal, regulatory point of view? Do you see any obstacles, legal obstacles? Second question on VOO again, I would say.
Can you explain us, or Can you help us to better understand the impact of VOO this year, maybe on a 12-month basis? What does the new guidance imply for VOO in terms of EBITDA and CapEx? How much synergies are in there, and how does it compare, basically, to your own business plan?
Sorry, third question, on the integration costs, the transaction costs, and the synergies. Can you quantify, first the costs, related to the transaction? I think we've seen a bit of things in H1, and then the integration costs that we should expect. The final question, on Orange Ahead. Can you update us on the benefits that you see for this year? That's it for me. Thanks.
Thanks, David. Hello. I'll take maybe the first one and maybe. Sorry, the fourth? On the first one, you're right to say that actually, we announced 2 things, and 2 which, short term and long term, of course, milestone. On the first track, we are aiming to lead the gigabit position nationwide by 2024, thanks to an effort on the DOCSIS HFC network, DOCSIS 3.1 HFC network, in every single areas. This is something we are working on, and VOO guys started to work on this early 2023. This is it for the short term, by mid-2024.
On a long-term basis, what we said exactly what you, what you said, and that's a call, I would say, for action from Orange to the BIPT. You know, that you told that this is some, I would say, discussion around the areas in which we could have partnerships. As we said, I would say, last month or a couple of months ago, of course, we are calling for having the larger, I would say, capabilities to partner with, I would say, anyone or everyone, when it makes sense, and when, of course, it is permitted on the regulatory, I would say, front. We are calling for that. We are calling for having the larger capabilities of partnering.
We did that with, of course, Telenet Wyre in the North of Brussels. We are aiming to, I would say, do everything that could be done with partners as soon as it is, of course, accretive, for Orange and VOO, and it creates value. This is it. We know that BIPT is working on that, on this, framework definition, and we are calling for having the larger capabilities to do so. On the question number 4, I guess it was?
Orange Ahead, number four.
What you call Orange Ahead is our, I would say, former strategic plan. Now it's Lead the Future. Sorry, maybe just to make sure to catch your point.
Yeah, yeah.
You're talking about the efficiencies or, David?
Yes, with every, let's say, self-help initiative that you have to, let's say, to improve your profitability. Lead the Future, yeah, probably it's Lead the Future. I'm sorry. My bad.
Efficiency stream of the, of the Orange Ahead. I'll take the point.
Okay.
Maybe, I'll take your 3 last question, David. First, the impact of VOO this year. I think you can deduct quite easily from our guidance, including 7 months of VOO, what would be the main contribution of VOO to our figures? Knowing that clearly, with the closing in June, we don't expect much synergies in 2023. The guidance we shared, those include only a very tiny synergies, we are preparing the ground for being able to deliver all the synergy in 2024, in 2023, clearly not included in 2023 results.
That mean that we are adding around 70-75 million EUR in EBITDA for 7 months, which mean that the EBITDA contribution of VOO will be around 120, between 120 and maybe 130 in EBITDA. That's more or less in line with the pro forma that was communicated, I guess, for 2022.
And, for CAPEX, we are also adding around, sorry, EUR 70 to 80 million of, of CAPEX for , for 7 months, meaning that the, the CAPEX for one year is between 130 and 140 . If you make the calculation, which is increasing compared with the pro forma communicated for 2022 and that's obviously explained by the, the, the start of the modernization of the of, of VOO network and the upgrade to DOCSIS, 3.1 , and to our -- and fully consistent with our promise to have a gigabit, network as soon as possible all over the VOO footprint, as mentioned by, by Xavier.
Maybe on your question about the transaction costs, we are only talking of, yeah, legal fees, banking fees, some also fees for the due diligence. It's partly integrated on our, in our acquisition and restructuring costs for this year. You have the figures in the press release. It's around EUR 22 million for this year, plus some usual restructuring fees, I might say, or some one-off, but that are not linked to the transaction. It all represent EUR 27 million of restructuring and acquisition costs for this semester. I hope it's answered your question.
Yes.
Any other costs, significant costs due to this integration after the closing. It's mostly, we are mostly talking about costs that were engaged before the closing as part of the transaction. For your question about Orange Ahead, It's what I can tell you is that it has clearly helped us not to deliver net savings because of the inflation, but all our efficiency stream as part of the Orange Ahead program was an absolutely key enabler to keep our indirect cost base under control in a very high inflation context. We, I can't give you figures of net savings because that's not what happened.
Clearly, without this program, our costs would have been significantly higher because of the inflation. For instance, we had, as part of the following the energy crisis, a very, very important program within the company to reduce our energy consumption because of the higher cost. We achieved to decrease our energy consumption year-on-year between 2023 and 2022, while at the same time, we roll out more sites because of our RAN sharing. We implement 5G, which obviously lead to more energy consumption.
Reducing our energy consumption while we still have to deal with an increasing traffic was a very huge achievement and generating a lot of savings for Orange Belgium in view of the very high energy prices.
Okay. Super clear. Thanks very much.
Thanks, David.
Thank you. We will take the next question from line, Nicolas Cote-Colisson from HSBC. The line is open now. Please go ahead.
Thank you. Hi, everyone. Just follow up on the synergies. You confirmed the number, the EUR 85 million. Can you also confirm that the synergies will kick in from year 7? If yes, I'm just wondering why it takes so long to get the full synergies developed, and whether it would be earlier if you were to own 100% of VOO.
On your move to fiber, what would you save when you own the cable infra? I mean, in case you eventually go for co-investment, how much can you reuse of your cable infrastructure? I mean, the ducts, the amplifier rooms, and so on. Or maybe the other way to ask the question is: How much of the DOCSIS upgrade cost will not be of any use in the future?
I've got another quick question on the indirect costs and the pickup, because it looks like it goes to 26% of sales compared to 21%. Just a bit more light on that. A very short question on the cable subs. Plus 21 seems pretty low, at least below the pace we've seen in the previous, in the previous periods for Orange Belgium standalone. Just want to see if you have any explanation around that, and if you can provide us with some indication of momentum at VOO. Thank you.
Hello, Nicolas. Maybe on the question to the move to fiber, that's a very interesting question. I guess maybe you've seen that elsewhere in Europe or in the world. Having some, I would say, cable overbuilding its network with FTTH, that's something we are currently, I would say, studying. It depends also on the area.
The topic, we've talked about it before on the regulatory upfront. This is something, okay, which will impact, of course, whether we might have access or not with FTTH in dense or mid-dense or low-dense areas. Of course, question would be linked to the footprint as well.
We can't at the moment answer your question. We definitely need to see what scenarios will be put in place. Of course, we'll come back to you on that side. The question for us is to starting to lead the gigabit, I would say domain, by on a short-term basis, to make sure that, of course, this HFC network acquisition and modernization will be related in terms of value creation.
For the commercial performance, maybe your question number four, actually, we are happy with that. We are very happy with the figures we've provided to you on the, I would say, Orange side. We're not providing figures on the VOO side, as you understood, including the ARPU.
The question would be seen as, well, dynamic in the market, okay. We say that, and we've already seen it, that dynamic is a bit slowing since COVID. Regarding the market and regarding the trends, I think we are very, very happy with the commercial performance we've done. If we calculate what could be our, I would say, share of net adds for Q1, we are very, very happy with that, so we'll see what will be the figures for Q2. On the Q1 figures, okay, we took a huge part of the market share of net adds.
I'll take the two other questions. Good morning, Nicola. Maybe on the first question about the synergies first, I can tell you, and I think it has already been said by Xavier, that having two separate companies, Orange Belgium and VOO, doesn't and won't prevent us from delivering the synergies as we anticipated them. That's, we are acting as one operator in this market.
We are already having an operational and organizational model enabling some significant cost synergies. We have, for instance, one purchasing team working together, and so it's clear. It's not, and it won't be, an obstacle to the synergies.
Regarding the timing of the synergies, that's rather good news. I think we were rather conservative in the timing of the synergies we communicated. Today, we guess that we'll have a run rate of synergies sooner than year seven than that was previously communicated. I think we should have a run rate of synergies rather around year four, I would say. Some synergies will depend on what we what will be done in terms of brand portfolio, and clearly, the brand portfolio we will evolve.
We won't evolve in the very short term. That's why some synergy will take a bit more time than others to be unlocked. We really think that as from year four, we'll be able to deliver the amount of synergies that we already committed to deliver. On your question about indirect costs, there are two, I would say, two main effects for, and it's a bit different for OB and VOO, but obviously, we are all impacted, and very strongly impacted by the inflation in Belgium, 10% of wage indexation.
Our energy prices have more than doubled in 2023 if you compare with prices we had in 2021, for instance. We have also a strong increase between 2023 and 2022 because we were only partially hedged for 2023 before the crisis. But that's part of this effect is quite cyclical because we are hedged for 2024 at prices that are very significantly lower than the one we have in 2023, so there is a, I would say, a cyclical effect on the cost base.
The second point I'd like to highlight in my answer is that I would say that VOO has been a bit more impacted by the high inflation experience in the Belgian market than Orange Belgium. First, because they did not implement the Orange overhead efficiency plan that we had. Also because the weight of the labor costs in VOO's indirect cost base is a bit higher, is significantly higher than at OB.
Meaning the impact of the wage indexation is proportionally greater at VOO than at OB. Also because VOO prices have not been increased in the last 18 months to the same extent as those of I would say, the other operators in the market, and especially Orange Belgium.
That also explain why the situation on the indirect costs you were pointing out. That's obviously, there is obviously some room for improvement, and we'll tackle that as part of the synergy plan.
Okay. Thanks so much for all the details. If I may, a very short follow-up. Given your comments at the very beginning about the HFC and the upgrade to DOCSIS 3.1, does it mean that we shouldn't expect a lower capital intensity, all other things being equal, talking about fiber in 2024?
Lower than what? Sorry, Nicola, lower than
I mean, if I take the CapEx intensity in 2023 based on the-
In 2023, you mean? In 2024?
Well, actually, I'm more thinking about 2024, because I'm just trying to assess what is the, I mean, the cost of, going to your, 1 gigabit, speed for all the, all the footprint by mid-2024.
I guess the we will achieve the one gigabit speed at the, let's say, the beginning of mid-2024. The main impact in terms of CapEx intensity as from 2024, beginning in 2024, is that we will start rolling out fiber. We should not expect a lower CapEx intensity in 2024 compared with our figures in 2023. I'm not sure. I don't know if it completely answer to your question.
No, that's a good indication.
Okay.
I appreciate that.
Thanks.
Thank you very much.
Thank you. We will take the next question from line. Joshua Mills from BNP Paribas. The line is open now, please go ahead.
Hi, guys. Couple of ones from there on my side. I'm just gonna start on the pro forma numbers. Forgive me if you addressed this in the first question, I may have missed it. First thing is, could you give us the comparable VOO numbers on revenue, EBITDA, and then CapEx under your new accounting for 2022? Just as a starting point to understand, you know, what, where we're coming from would be great.
The second question, if I just think about what you're guiding for today, what that would imply for VOO in 2023, just so I'm kind of on track for this. It looks like EUR 124 million of EBITDA, EUR 137 million of CapEx, a lot lower EBITDA, which is only partly offset by CapEx.
I think on my math, it means the operating cash flow is about half the level that was laid out in the original 2021 presentation. Am I right in that kind of estimate? Are there any other offsetting factors below operating cash flow and working capital or something else, which means that the impact on free cash rate to equity isn't as big as that?
Just trying to understand where the you know, where the underlying pro forma numbers should end up. Then, if they are lower, is it because this year you're taking higher integration costs, or you've started the network investments? Or is it just that, actually, you just kind of alluded to on the call, inflation has been more negative for VOO than we probably anticipated when the transaction was announced?
I know there's a few things in that, but that was the first question. The second one is just any commentary on market competition and how you think about recent price rises or announced price rises from Proximus, whether you could follow suit. Thanks.
Maybe I'll take the last one. Sorry for that, I will leave the three first one to Antoine.
On the market dynamics, as I told you, I think that the intensity has started to be a bit more, I would say, important in not only this quarter, but maybe 3 to 4 quarters ago. We can see some peers evolving a little bit on their pricing strategy and branding strategy as well. That's why I said that regarding the Q1 share of net adds we calculated, and what we've done on the Q2, we are very, very happy with that, despite the fact that the growth is slowing down a little bit on the Belgian market.
I'll answer to you, to your other questions. Maybe first. We will have to, once again, I'd like to highlight that there is a big difference between the VOO EBITDA communicated in 2021 in the GAAP and the one in IFRS, because of this different rules of OpEx capitalization between BGAAP and IFRS. Of course it has no impact when it comes to operating cash flow. As you mentioned, there is a deterioration in 2023 of VOO operating cash flow, EBITDA minus CapEx. That's mostly linked with what I just explained earlier on the impact of inflation.
Of course, clearly the VOO was strongly impacted by the inflation as every company that I, the cost management was not as I would say, tight as the one we have in Orange Belgium. At the same time, they did not raise their prices to the same extent as is of the other per operator, and especially as Orange Belgium has done over the last 18 months.
That's mostly for the main explanation for the impact of I think I already mentioned some range of the figures for VOO's contribution in terms of EBITDA and CapEx for 2022 before 2023. It's if you just make a quick and dirty calculation based on our guidance, it's implicitly down, gives an EBITDA around EUR 120 million, and EUR 130 million something like that. In terms of CapEx, it's around EUR 130 million and EUR 140 million for the full year.
Great, thanks. I guess the other one, I mean, if I'm looking here, I know Orange Group, when they sent the consensus request, did give some detail on this. In that, they talk about a, well, EUR 295 million revenue contribution, like for like, in 2022. I mean, what that would tell me is the underlying revenue contribution from VOO is probably closer to EUR 500 million than the EUR 535 million, which you originally laid out in the merger documentation.
My question is, do any of the accounting changes you've talked about impact on revenue? Or is it simply the case that, you know, since publishing the document and closing the transaction, it looks like VOO revenue fell about 5%. Thanks.
No. No, the accounting option has not a real impact on VOO's revenues. That's what I can tell you.
Understood. Thank you.
Thank you. We will take the next question from line, Roshan Ranjit from Deutsche Bank. The line is open now, please go ahead.
Morning, everyone. Thanks for the questions. Two for me, please. First one, I guess, following up on some of the previous ones around the synergies and VOO's OpEx cash. Obviously this year, slightly negative on OpEx cash. How should we think about the ramp up of the investment? Bear in mind your comments around the gigabit speed in FY 2024 and the synergy development. On that basis, is it fair to assume still negative OpEx cash in 2024, given I guess the step up in CapEx, but by 2025, VOO should expect positive OpEx cash?
Secondly, again, I know you haven't given data around the ARPU, but I just wanted to get a sense of how much of this 5% price increase you put through, around 5% price increase, as you say at the beginning of the year, has translated into your ARPU growth for the standalone, Orange Belgium base. Thank you.
Thanks. Thanks, Roshan. I think it's a bit too early for us to give perspective on the free cash flow for VOO free cash flow for 2024 and 2025. Clearly, our objective is to boost free cash flow as much as possible, thanks to the synergies, and that will offset the potential operating negative operating cash flow due to the high CapEx intensity that we'll have for the network upgrade. It's, once again, it's a bit too early.
Clearly the objective is to reduce the gap in operating cash flow as soon as we can and thanks to the synergies. Your second question is what on the ARPU growth for Obel standalone? We didn't disclose the figures for Obel standalone, but what I can tell you is that the ARPU evolution is very consistent with our price increase. We did that's we are rather satisfied with the way. I think we implement a very smart more for more approach.
We were able to convince our clients that the more for more, where the useful to could bring a lot of value for them, too. Meaning that the main risk with this kind of approach is to have some down fail that will lower the ARPU, but that's clear not something we experience. I think we had a good customer base management, meaning that we were most of the almost 100% of the price increase translated into a higher ARPU.
That's useful. Thank you. If I just compare that to what I think the ARPU growth in H2, which, if I remember correctly, there was an increase in June, as well as, you've seen the underlying increase to the bigger plans. You've seen a step-up in that 4.3% ARPU growth in H2 as a result of this around 5% increase that you implemented in January. That's right?
Yeah, that's correct.
Okay, great. Thank you.
Thank you. We will take the last question from line, Konrad Zomer from ABN AMRO. The line is open now. Please go ahead.
Hi, good morning. Thanks for taking my question. The midpoint of your new guidance in EBITDA is about 20% above the old midpoint, with the midpoint of your eCAPEX being up about 36%. Can you share with us, is that related to the different accounting standards, or is that related to a higher capital intensity improvement? The follow-up from that is, once the dust of the integration has settled, can you share with us what you think the percentage of revenues will be that you spent on CAPEX? Thank you.
The first question you mentioned is, oh, it's mostly due to higher capital intensity and on VOO side than that, Obi side, when you compare in terms of CapEx to revenue. In a context where VOO is currently upgrading its network, as explained, with DOCSIS 3.1 and our gigabit strategy. That's the main explanation. The main explanation that knowing that's comparing the midpoint of a guidance, we'll see at the end at the end of the year where we land. Obviously, there is a higher capital intensity at VOO side than at UBI.
I'm sorry, but it's a bit too early for us to share some perspective on the CAPEX to revenue ratio on VOO side. I think we'll be able to provide you some with some more detail in our next financial communication during the full year results.
Okay. Thank you very much.
Thanks. Thanks for your question, Konrad.
Thank you. There appears no further question. I'll hand it back over to your host for closing remarks. Thank you.
Thank you very much. Oh, there's apparently there's an additional question from the digital. Can you comment on Digi, the new Belgian market entrant?
actually, no, we can't. That's a real interesting question, but unfortunately, we do not have any information, so we can't comment. Sorry for that, guys.
Okay. That was then the last question. Thank you very much for your attendance to this Analyst call. Would there be any follow-up question, do not hesitate to contact the IR team. Thank you very much and have a nice day.