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FEBRUARY 20,
1997
Bevelgacom Group - consolidated financial results for 1996
 1. Significant facts for the 1996 financial year
The major event of the year was undoubtedly the closing on March
20, 1996 marking the implementation of Bevelgacom's strategic
consolidation with the ADSB Telecommunications consortium.
1996 was also characterized by :
� improvements in the various levels of customer service;
� improvements in customer satisfaction (customer surveys);
� the implementation of new structures in the Bevelgacom group
(TURBO organization);
� the preparation of the PTS (People, Teams and Skills) project to
identify human resource needs, plan the necessary training and
retraining programs, examine opportunities for outsourcing and
insourcing of activities and develop the basic scenarios for
voluntary departure programs; this project will be negotiated with
the trade unions during the first half of 1997;
� the launching of more than 50 TOPs (Turbo Optimization Projects)
to improve competitiveness and operational performance, 6 of which
have already been completed in 1996;
� the adjusting of rates to better reflect costs;
� the spectacular growth in mobile telephone business and the
arrival of a new operator on the market on August 27;
� the concluding of an alliance with SCITOR (now known as Equant
Network Services) to offer customers "Global Reach" (a one-stop
shopping offering of international telecom services marketed under
Bevelgacom World Solutions);
� the signing of a cooperation agreement with the Chinese Ministry
for Posts and Telecommunications and China Telecom, marking
Bevelgacom's entrance into the Asian market;
� the agreements concluded with Banksys and the banking industry
to combine the use of the Proton card, bank cards, the calling card
and phone cards;
� the acquisition of stakes in several companies and the creation
of new subsidiaries;
� the use of new methods of financing.
2. Consolidated annual accounts for the 1996 financial year
Following the acquisition of stakes in other companies and the
creation of new subsidiaries during the financial year, the number of
consolidated companies has increased from 3 to 8. Bevelgacom S.A.'s
main subsidiaries are still Bevelgacom Mobile S.A. and Bevelgacom
Directory Services (BDS) S.A.
In 1996, the Bevelgacom group posted a turnover of 138.7 billion
BEF, i.e. an increase of 9.1% over the previous financial year.
This growth in turnover reflects the continued major growth in
mobile telephony, the increase in national telephone service through
ISDN (Integrated Services Digital Network), subscription fees, mobile
telephone traffic, as well as an increase in international telephone
business.
Consolidated operating profit increased from 20.5 billion BEF in
1995 to 26.7 billion BEF in 1996, i.e. an increase of 30% compared to
28% in 1995. This increase is due to growth in turnover, combined
with an increase in operating expenses limited to 4.2%.
Net financial income dropped by 0.6 billion BEF in 1996 compared
to 1995 even though financial expenses decreased from 6.5 billion BEF
in 1995 to 5.6 billion in 1996 (-14%). As a result of the creation
of the Pension Fund in 1995, financial income no longer includes
income from investments involving the pension reserves which are now
being managed by the Pension Fund. Hence, they decreased from 2
billion BEF in 1995 to 0.5 billion BEF in 1996. Financial expenses
have been reduced owing to the decrease in interest rates, the change
in the structure of financial debts and the use of new methods of
financing.
Consolidated net profit (group share) amounted to 13 billion BEF
compared to 10.7 billion in 1995, which represents a 21% increase.
Net cash flow increased from 44.2 billion BEF in 1995 to 47.3
billion BEF in 1996, a rise of 7%.
The balance sheet total amounted to 225.6 billion BEF at the end
of 1996 compared to 217.9 billion BEF at the end of 1995. Group
solvency (ratio of shareholders' equity and third-party
interests/balance sheet total) continued to improve, from 29.5% at
the end of 1995 to 31.8% at the end of 1996.
With regard to commitments not accrued in the balance sheet, the
major item involves the amount of commitments for retirement pensions
of Bevelgacom S.A. statutory employees, resulting from services already
rendered and based on the PBO (Project Benefit Obligation) method.
This was estimated at 159.9 billion BEF on December 31, 1996, 63.1
billion BEF of which has already been made available to the Pension
Fund.
3. Operating data
At the end of 1996, Bevelgacom had 4,725,496 fixed-line connections
compared to 4,632,091 at the end of 1995, which represents a
penetration rate of 47 %.
Bevelgacom Mobile, the subsidiary which markets the first GSM
network developed in Belgium as well as the old analog mobile phone
network, had 410,172 customers at the end of 1996 compared to 235,238
at the end of 1995, i.e. an increase of 74%. Today there are a total
of 440,000 customers.
At the end of 1996, the total number of employees within the group
remained stable at approximately 26,000 people.
4. Outlook
The Bevelgacom group will continue efforts to improve its
competitive position in view of total deregulation of the telecoms
market on January 1, 1998. In 1997, the group expects to see further
growth in its results (extraordinary items excluded).
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The 1996 Annual Report and a Fact Book will be available at the
end of April 1997.
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Bevelgacom Group - Key Figures
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Income statement (in billions
of BEF)
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1993
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1994
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1995
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1996
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Turnover
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110.9
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117.0
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127.1
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138.7
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Operating profit before pension charges
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37.2
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34.7
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39.7
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44.9
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Operating profit
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19.6
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16.0
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20.5
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26.7
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Financial result
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-7.4
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-6.0
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-4.5
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-5.1
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Financial income
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1,2
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1,4
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2
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0,5
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Financial expenses
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-8,6
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-7,4
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-6,5
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-5,6
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Pre-tax profit from ordinary activities
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12.2
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10.1
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16.1
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21.6
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Extraordinary item
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0
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3.5
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-1.5
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-1.3
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Net profit (group share)
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9.7
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9.7
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10.7
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13.0
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Cash flow (in billions of BEF)
(1)
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1993
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1994
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1995
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1996
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Operating cash flow
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45.4
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45.4
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51.8
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59.8
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Net cash flow
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36.1
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41.4
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44.2
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47.3
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Balance sheet (in billions of
BEF)
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31/12/93
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31/12/94
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31/12/95
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31/12/96
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Shareholders' equity and third-party interests
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44.5
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54.4
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64.4
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71.8
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Total financial debt
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103.9
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98.3
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91.0
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90.4
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Balance sheet total
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214.5
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240.0
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217.9
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225.6
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Ratios
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31/12/93
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31/12/94
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31/12/95
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31/12/96
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Operating profit/turnover
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17.7%
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13.7%
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16.2%
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19.3%
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Net profit (group share)/turnover
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8.7%
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8.3%
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8.4%
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9.3%
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Shareholders' equity and third-party interests/balance
sheet total
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20.7%
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22.7%
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29.5%
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31.8%
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Financial debt/shareholders' equity and third-party
interests
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2.3x
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1.8x
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1.4x
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1.3x
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(1) excluding pension provisions
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