EU COMMUNICATIONS: Proximus Q4 Results
PROXBB A3/BBB+[N]
Slightly lower-than-guided leverage is welcome given the limited rating head room (S&P downside threshold of >3x on a prolonged basis) though no guidance for further decreases. Results elsewhere look broadly steady.
- Q4 und. revs EUR 1.7bn (+3% YoY PF, 2% beat). FY EUR 6.5bn (+2% YoY PF).
- Q4 und. EBITDA EUR 0.4bn (flat YoY PF, in line). FY EUR 1.9bn (+3% YoY PF).
- Q4 FCF EUR 10mn (vs. EUR 96mn YoY). FY EUR 58mn (vs. EUR 61mn YoY).
- Reported leverage of 2.9x better than the ~3.1x guidance. FY23: 2.6x.
- “Net debt / EBITDA ratio for 2025 is expected to around 3.0X (as per S&P definition)”.
- “2025 Adj. FCF including the proceeds of asset sales will more than cover the Dividend payment, with FCF excess to benefit the Net debt level”.
- FY25: broadly stable domestic revs/EBITDA, group EBITDA +2%, stable FCF.
- CEO head-hunter hired.
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Historical bullets
GILTS: Firmer Alongside Peers
Gilts catch up to the rally in U.S. Tsys that followed yesterday’s well-received 7-Year auction.
- Futures trade as high as 92.45.
- Short-term bullish correction within the longer run bearish technical theme remains intact.
- Initial support and resistance 91.10/92. 68.
- Yields 2.5-3.5bp lower, 10s lead the rally.
- Spread to Bunds continues to hover around 204bp, which represents the early November closing low. A break (on a closing basis) would expose the psychological 200bp marker.
- GBP STIRs roughly in line with levels we flagged earlier. SONIA futures flat to +4.0, BoE-dated OIS showing ~71bp of cuts through year-end.
- Comments from UK Chancellor Reeves due from just after 10:00 London. We provided greater colour in an earlier bullet. It is unlikely to be a market moving speech based on the already-released excerpts.
- As a result, macro and cross-market cues will be eyed today, with the UK data calendar subdued through the end of the week.
- Supply-wise, the DMO will come to market with 3.0bln of the 0875% Jul-33 green gilt this morning.
SPAIN DATA: Q4 Flash GDP Firmer Than Consensus
Spain Q4 flash GDP was stronger than consensus at 0.8% Q/Q (vs 0.6% consensus, 0.8% prior) and 3.5% Y/Y (vs 3.2% consensus, 3.5% revised prior from 3.3%). Spanish outperformance versus other key Eurozone countries has been highlighted in survey evidence, with the December composite PMI the highest since March 2023.
- Growth continued to be driven by domestic demand, which contributed 1.2pp to the Q/Q print (vs 1.0pp in Q3). External demand contributed negatively 0.4pp.
- Household consumption grew 1.0%Q/Q while gross fixed capital formation was very strong, increasing 3.4%Q/Q and more than offsetting the 1.4%Q/Q fall seen in Q3. Within this, tangible fixed assets (ex-housing and ex-construction) grew 7.6%Q/Q.
- Export growth was 0.1% Q/Q (vs 0.4% in Q3), whilst imports grew 1.3% Q/Q (vs 0.9% in Q3).
- Gross valued added was positive in all major sectors (industrial, construction and services), but negative in the primary sector.
EGBS: Spreads To Bunds Tighten On ASML-led Equity Rally
10-year EGB spreads to Bunds are generally biased tighter, driven by this morning’s ASML-led rally in European equities.
- The 10-year BTP/Bund spread has fully retraced the widening seen into yesterday’s close, now 2bps tighter at ~107.5bps. Yesterday’s widening came on news that PM Meloni has been placed under investigation in a case relating to the repatriation of a Libyan police officer.
- OAT/Bund has also tightened ~0.5bps to ~72.5bps, despite reports of a fresh rift between the Socialists and the Government following comments from PM Bayrou on migration. A deterioration of relations between the groups may threaten the chances of Bayrou getting his 2025 budget through the National Assembly.
- Spanish flash Q4 GDP was stronger-than-expected at 0.8% Q/Q (vs 0.6% cons, 0.8% prior), but did not generate any material outperformance in the Spanish curve relative to peers.
