Orange Financial results at 30 June 2020
Press releaseParis, 30 July 2020
Financial results at 30 June 2020
Orange very resilient despite the effects of the
Covid-19 pandemic
Revenues and EBITDAaL declined in the 2nd quarter of 2020,
negatively impacted by the effects of the health crisis. In the 1st
half overall, revenues continued to grow, with a very moderate
decline in EBITDAaL.
Good commercial performance, deferred investments and cost
control enable Orange to reiterate its objective of 2020 organic
cash flow of more than 2.3 billion euros.
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
10,375 |
(0.4)% |
(0.1)% |
|
20,769 |
0.3 % |
1.0 % |
EBITDAaL |
|
3,312 |
(1.8)% |
(1.9)% |
|
5,914 |
(0.8)% |
(0.7)% |
Operating Income |
|
|
|
|
|
2,249 |
|
(5.8)% |
Consolidated net income |
|
|
|
|
|
1,016 |
|
(10.7)% |
eCAPEX (excluding licenses) |
|
1,576 |
(15.8)% |
(16.1)% |
|
3,156 |
(9.9)% |
(10.1)% |
EBITDAaL - eCAPEX |
|
1,737 |
15.7 % |
16.0 % |
|
2,759 |
12.2 % |
12.7 % |
Organic Cash-Flow (telecom activities) |
|
|
|
|
|
255 |
|
176.1 % |
§ In the 2nd quarter of 2020, revenues declined 0.4%1,
negatively impacted by the decline in roaming and equipment sales
directly linked to the health crisis.
France and Africa & Middle East rose 2.7% and 1.3%
respectively year on year, almost completely offsetting the
combined decline in other segments: Spain (-6.8%), Europe (-3.6%),
Enterprise (-3.3%).
- In the 2nd quarter, EBITDAaL showed a limited decline of 1.8%
year on year, negatively impacted by the cost of health measures,
the decrease in roaming and a slight increase in provisions for bad
debts. In the first half EBITDAaL declined just 0.8%.
- At June 30, 2020, consolidated net income stood at 1,016
million euros (compared with 1,137 million euros at June 30, 2019,
on an historical basis).
- In the 1st half, the Group's eCAPEX declined 9.9% due to the
significant increase in co-financing in France and asset disposals,
in particular the disposal of non-strategic towers in Spain. This
decrease is also explained by a slowdown of investment in mobile
and traditional services which offset growth in FTTH investments,
particularly in France, which was lower than expected following the
health crisis.
- Organic cash flow from telecoms activities was 255 million
euros, a 163 million euro increase year on year on an
historical basis, due to the decline in eCAPEX and despite the
measures taken to support the most vulnerable suppliers and service
providers in France.
- In the first half, Orange recorded a significant uptick in
co-financing which had a favourable effect on turnover, EBITDAaL
and eCAPEX. These co-financing initiatives illustrate our ability
to monetize our FTTH investments made in recent years
These resilient results stem from the Group's strategy focused
on greater connectivity and new growth areas, enabling us to
increase our customer bases.
- Convergent offers totaled 10.8 million customers at June 30,
2020, up 2.1% year on year, allowing Orange to strengthen its
position as the leading convergent operator in Europe.
- In fiber, despite the lockdown, Orange posted a record 2nd
quarter in France with 238,000 net customer additions and strong
growth in Poland with 44,000 net additions. At June 30, Orange had
8.1 million fiber customers.
- In Africa & Middle East, 4G deployment continues reaching
27.9 million customers in the 2nd quarter, growth of 40.4% year on
year. Orange Money had 19.6 million active customers in the 2nd
quarter, up 18.9%.
- As of June 30, 2020, Orange Bank had a total of 1 million
customers, following the integration of Orange Courtage and the
expansion of its offer in Spain. In becoming an insurance broker,
the bank took a further step in its cross-selling policy with
Orange France.
In line with the "Engage 2025" plan, Orange signed a long-term
electricity purchasing agreement with Boralex, a pioneer in
renewable energy and the leading independent producer of onshore
wind energy in France. This contract for 67 GWh per year covers
nearly 3% of Orange’s electricity consumption in France.
Outlook
For the financial year 2020, Orange confirms that it does not
foresee any significant deviation with respect to its financial
objectives:
- Given current information and currently anticipated
trajectories, the Group now expects a slight decline in 2020
EBITDAaL of about 1% including all the effects linked to the
Covid-19 pandemic. It should be noted that, excluding the Covid-19
impact, EBITDAaL would have been “flat positive” as expected.
- Given delays in investments to date, eCAPEX will be lower,
offsetting the decline in EBITDAaL.
- Therefore, the Group's EBITDAaL less eCAPEX will be stable in
2020.
- The Group's commitment to exceed 2.3 billion euros in organic
cash flow from telecoms activities remains unchanged.
- The objective for a net debt to EBITDAaL ratio for telecoms
activities of around 2x in the medium term is maintained.
For the 2021-2023 period, Orange confirms its financial
objectives as announced during the investor day on December 4,
2019.
Orange will pay an interim dividend of 0.30 euros in cash on
December 9, 2020. The decision on the final amount of the 2020
dividend will be announced between the results publication dates
for the 3rd and 4th quarters of 2020. A distribution of 0.70 euros
per share remains the Group's objective, including for the 2020
fiscal year, the final decision will be taken at a later date,
depending on the situation.
Commenting on the publication of the 1st half 2020 results,
Stéphane Richard, Chairman and CEO of the Orange Group, said:
"Orange has shown a remarkable level of resistance in the first
half of the year, despite the effects of the Covid-19 pandemic,
with a 0.3% increase in revenues and a contained decrease in
EBITDAaL of 0.8%. These results bear witness to our business’
resilience and its capacity for collective mobilisation in the face
of this crisis.
In France, in spite of the restrictions due to the pandemic, our
commercial dynamic is good, in particular in fiber: indeed we
delivered a second-quarter record of 238,000 net
additions. Our customers’ appetite for fiber confirms the
validity of our investment strategy and we are continuing our
deployment with a view to building as many connection points in
2020 as we did in 2019 notwithstanding the unprecedented health
context.
In Spain, where the situation remains challenging given the
market’s slide towards low cost, we have adapted our positioning
and enlarged the range of our offers: a strategy that is now
showing its first results.
In Africa and in the Middle East, revenues grew 3.8% in the
first half and EBITDAaL rose by more than 7%: an excellent
performance driven by mobile data (with a 40% increase in 4G
customers year on year), by broadband and by Orange Money, that
will be further strengthened by last week’s launch of Orange Bank
Africa.
Even though Orange has proven to be more vital than ever to its
business customers over these past months, the health crisis has
impacted our results in B2B. I would, however, point to the
very good performance of Orange Cyberdefense and Orange Cloud for
Business where revenues grew by 11% and 8% in the first
half.
This crisis has revealed the strategic nature of telecoms
networks for our economies and even society as a whole. While
impacted, we are comforted in the strategic choices we made with
Engage 2025, the roll-out of which we will be accelerating, whether
this be through mastering our carbon footprint, the deployment and
optimisation of our infrastructures or the development of our
growth territories.
I’d like to conclude by extending my warm thanks to all of
Orange’s teams who have been fully mobilised throughout the crisis
to serve our customers."
Key figures
Data at June 30
In millions of euros |
|
6M 2020 |
6M 2019comparablebasis |
6M 2019historicalbasis |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
20,769 |
20,703 |
20,573 |
0.3 % |
1.0 % |
France |
|
9,024 |
8,880 |
8,874 |
1.6
% |
1.7
% |
Spain |
|
2,503 |
2,624 |
2,624 |
(4.6)% |
(4.6)% |
Europe |
|
2,729 |
2,774 |
2,789 |
(1.6)% |
(2.1)% |
Africa & Middle-East |
|
2,845 |
2,742 |
2,737 |
3.8
% |
3.9
% |
Enterprise |
|
3,859 |
3,908 |
3,770 |
(1.3)% |
2.3
% |
International Carriers & Shared Services |
|
728 |
746 |
747 |
(2.4)% |
(2.4)% |
Intra-Group eliminations |
|
(920) |
(971) |
(968) |
|
|
EBITDAaL (1) |
|
5,914 |
5,960 |
5,958 |
(0.8)% |
(0.7)% |
o/w
telecom activities |
|
5,986 |
6,037 |
6,035 |
(0.9)% |
(0.8)% |
As % of revenues |
|
28.8
% |
29.2
% |
29.3
% |
(0.3
pt) |
(0.5
pt) |
France |
|
3,301 |
3,284 |
3,281 |
0.5
% |
0.6
% |
Spain |
|
728 |
787 |
787 |
(7.5)% |
(7.5)% |
Europe |
|
730 |
699 |
708 |
4.3
% |
3.0
% |
Africa & Middle-East |
|
935 |
872 |
868 |
7.2
% |
7.7
% |
Enterprise |
|
471 |
578 |
565 |
(18.5)% |
(16.7)% |
International Carriers & Shared Services |
|
(179) |
(183) |
(174) |
1.9
% |
(2.9)% |
o/w
Orange Bank |
|
(72) |
(78) |
(78) |
7.7
% |
7.7
% |
Operating Income |
|
2,249 |
|
2,388 |
|
(5.8)% |
o/w
telecom activities |
|
2,336 |
|
2,475 |
|
(5.6)% |
o/w Orange Bank |
|
(87) |
|
(88) |
|
0.9 % |
Consolidated net income |
|
1,016 |
|
1,137 |
|
(10.7)% |
Net income attributable to equity owners of the Group |
|
927 |
|
1,039 |
|
(10.7)% |
eCAPEX |
|
3,156 |
3,502 |
3,509 |
(9.9)% |
(10.1)% |
o/w
telecom activities |
|
3,142 |
3,486 |
3,493 |
(9.9)% |
(10.1)% |
as % of revenues |
|
15.1
% |
16.8
% |
17.0
% |
(1.7
pt) |
(1.9
pt) |
o/w Orange Bank |
|
14 |
16 |
16 |
(14.5)% |
(14.5)% |
EBITDAaL - eCAPEX |
|
2,759 |
2,458 |
2,449 |
12.2 % |
12.7 % |
Organic Cash-flow (telecoms activities) |
|
255 |
|
92 |
|
176.1 % |
(1) Adjustments to the presentation of EBITDAaL are
described in Appendix 1.
In millions of euros |
|
June 302020 |
Dec 312019 |
Net financial debt (1) |
|
26,420 |
25,466 |
Ratio of financial debt / EBITDAaL from telecoms activities
(2) |
|
2.04 |
1.96 |
(1) Net financial debt as defined and used by Orange does not
include Orange Bank activities, for which this concept is not
relevant.
(2) The ratio of net financial debt to EBITDAaL for
telecoms activities is calculated as the ratio of the Group’s net
financial debt (see Section 3.1.5.6 Net financial debt) to EBITDAaL
for telecoms activities (see Section 3.1.5.2 EBITDAaL) calculated
over the previous 12 months.
Key figures
Quarterly data
In millions of euros |
|
2Q 2020 |
2Q 2019comparablebasis |
2Q 2019historicalbasis |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
10,375 |
10,413 |
10,388 |
(0.4)% |
(0.1)% |
France |
|
4,593 |
4,470 |
4,467 |
2.7
% |
2.8
% |
Spain |
|
1,216 |
1,306 |
1,306 |
(6.8)% |
(6.8)% |
Europe |
|
1,329 |
1,378 |
1,400 |
(3.6)% |
(5.1)% |
Africa & Middle-East |
|
1,401 |
1,382 |
1,388 |
1.3
% |
0.9
% |
Enterprise |
|
1,925 |
1,990 |
1,940 |
(3.3)% |
(0.8)% |
International Carriers & Shared Services |
|
355 |
375 |
376 |
(5.4)% |
(5.5)% |
Intra-Group eliminations |
|
(443) |
(488) |
(488) |
|
|
EBITDAaL (1) |
|
3,312 |
3,372 |
3,375 |
(1.8)% |
(1.9)% |
o/w
telecom activities |
|
3,350 |
3,405 |
3,408 |
(1.6)% |
(1.7)% |
As % of revenues |
|
32.3
% |
32.7
% |
32.8
% |
(0.4
pt) |
(0.5
pt) |
o/w
Orange Bank |
|
(38) |
(34) |
(34) |
(12.6)% |
(12.6)% |
eCAPEX |
|
1,576 |
1,871 |
1,877 |
(15.8)% |
(16.1)% |
o/w
telecom activities |
|
1,567 |
1,862 |
1,869 |
(15.8)% |
(16.1)% |
as % of revenues |
|
15.1
% |
17.9
% |
18.0
% |
(2.8
pt) |
(2.9
pt) |
o/w Orange Bank |
|
8 |
8 |
8 |
(1.4)% |
(1.4)% |
EBITDAaL - eCAPEX |
|
1,737 |
1,501 |
1,498 |
15.7 % |
16.0 % |
(1) Adjustments to the presentation of EBITDAaL are described in
Appendix 1.
On July 29, 2020, Orange SA’s Board of Directors reviewed the
consolidated half-year financial statements and activity report for
the period ended June 30, 2020. In accordance with auditing
standards, the Group's auditors conducted a limited review of the
half-year accounts and verified the information given in the
half-year activity report.
More detailed information on the Group's financial statements
and performance indicators is available on the Orange website in
the "Investors/Results and Presentations" section:
www.orange.com/en/Investors/Results-and-presentations
Comments on key Group figures
Revenues
Orange Group revenues were 20.8 billion euros
in the 1st half year, up 0.3% year on year on a comparable basis.
This growth was fueled by the momentum of the 1st quarter (+1.0%)
while 2nd quarter 2020 revenues were down (-0.4%), negatively
impacted primarily by the decline in roaming and equipment sales
directly linked to the health crisis.
At the Group level, the principal services posted the following
1st half performances on a comparable basis (all changes are year
on year):
Revenues from convergence
services in all of the Group's European countries were 3.6
billion euros in the 1st half, up 4.1%. This increase enabled
Orange to consolidate its position as the leading convergent
operator in Europe.
Revenues from mobile only services were 5.1
billion euros in the 1st half, down 1.2% due to the slowdown in net
additions in Spain and to a lesser degree in Europe.
Revenues from fixed only services (4.7 billion
euros) declined 2.0% due to the downward trend in fixed narrowband
services and the migration towards convergent services.
Revenues from IT and integration services (1.6
billion euros) grew 5.1%. This growth was driven by Poland and to a
lesser extent by Enterprise which was impacted by the health crisis
in the 2nd quarter.
Revenues from carrier services (4.1 billion
euros) rose 5.2%. This growth was driven by wholesale fixed
services, in particular revenues related to co-financing and the
construction of Public Initiative Networks (PINs) in France.
Revenues from equipment sales fell 16.9% (1.2
billion euros), impacted by a slowdown in the market and the
closure of stores during the lockdown period.
Customer base growth
The convergent customer base had 10.8 million
customers across the Group as of June 30, 2020, up 2.1% year on
year, supported by very strong growth in Europe.
Mobile services had 208.0 million customers at
June 30, 2020, an increase of 1.9% year on year.
Fixed services had 45.1 million customers at
June 30, 2020, down 2.0% over one year, mainly due to the decline
of nearly 12.5% in the number of fixed narrowband accesses.
EBITDAaL
Group EBITDAaL was 5.91 billion euros in the
1st half, down 0.8% on a comparable basis, impacted by the decline
in activity related to the health crisis. The main additional costs
arising from the management of the health crisis were 160 million
euros over the first six months of 2020. They were broadly offset
by efforts to control costs of an equivalent amount. In the 2nd
quarter, Group EBITDAaL declined 1.8%, after growth of 0.5% in the
previous quarter, negatively impacted in particular by the costs
related to health measures, the decrease in roaming and a slight
increase in customer bad debts.
EBITDAaL from telecoms activities was 5.99
billion euros in the 1st half, down 0.9% on a comparable basis.
Operating income
In the 1st half, the Group's operating income was 2.25 billion
euros, down 139 million euros (-5.8%) on an historical basis.
This decrease is explained mainly by the 43 million euro
decrease in EBITDAaL on an historical basis, the 104 million euro
increase in net expenses for legal actions, corresponding to the
reassessment of the risk relating to a number of these disputes,
and the 49 million euro increase in depreciation and amortization
of fixed assets which were partially offset by the 56 million euro
decline in the costs of restructuring programs.
Net income
At June 30, 2020, Orange’s consolidated net income was 1,016
million euros, compared with 1,137 million euros at June 30, 2019,
on an historical basis. This change reflects mainly the decrease in
operating income.
eCAPEX
The Group's eCAPEX declined 9.9% in the 1st half and 15.8% in
the 2nd quarter due to the increase in co-financing in France and
to disposals of assets, in particular the disposal of non-strategic
towers in Spain. This decrease is also explained by a slowdown in
investments in mobile and traditional services that offset growth
in FTTH investments, particularly in France, which were lower than
expected following the health crisis.
In spite of this decrease, the Group continues deploying fiber,
in which it is the undisputed leader in Europe. Between June 30,
2019 and June 30, 2020, the number of connectable households
increased 42.7% in France, 21.3% in Poland, and 7% in Spain.
Organic cash flow
Organic cash flow from telecoms activities reached 255 million
euros, up by 163 million euros over one year on an historical
basis. This was mainly due to the decline in eCAPEX and payments
linked to net financial interests and to corporate taxes which
offset the decline in EBITDAaL and the deterioration of working
capital requirements affected in particular by the impact of the
Group's measures to support its most vulnerable suppliers and
service providers in France.
Changes in asset portfolio
There was no significant change in the asset portfolio in the
2nd quarter of 2020.
Net financial debt
The Orange Group’s net financial debt totaled 26.4 billion euros
at June 30, 2020, up by 954 million euros compared with December
31, 2019. The change in debt in the first half of 2020 is in
particular linked to the seasonality of activity.
The ratio of "net financial debt to EBITDAaL for telecoms
activities" stood at 2.04x at June 30, 2020. This is in line with
the objective of a net debt to EBITDAaL ratio for telecoms
activities of about 2x in the medium term.
Dividends
Orange will make an interim dividend payment of 0.30 euros in
cash on December 9, 2020. The decision on the balance of the
dividend will be announced between the results publication dates
for the 3rd and 4th quarters of 2020. A distribution of 0.70 euros
per share remains the Group's objective, including for the 2020
fiscal year, the final decision will be taken at a later date,
depending on the situation.
Review by operating segment
France
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
4,593 |
2.7 % |
2.8 % |
|
9,024 |
1.6 % |
1.7 % |
Retail
services |
|
2,684 |
0.1
% |
0.1
% |
|
5,377 |
0.0
% |
0.0
% |
Convergence |
|
1,131 |
4.1
% |
4.7
% |
|
2,268 |
4.7
% |
5.3
% |
Mobile only |
|
559 |
(3.1)% |
(4.0)% |
|
1,124 |
(2.9)% |
(3.8)% |
Fixed only |
|
995 |
(2.5)% |
(2.5)% |
|
1,986 |
(3.3)% |
(3.3)% |
Wholesale |
|
1,535 |
11.7
% |
11.9
% |
|
2,871 |
7.2
% |
7.5
% |
Equipment
sales |
|
206 |
(26.7)% |
(26.7)% |
|
458 |
(20.8)% |
(20.8)% |
Other revenues |
|
167 |
27.0 % |
26.5 % |
|
318 |
28.1 % |
27.6 % |
EBITDAaL |
|
|
|
|
|
3,301 |
0.5 % |
0.6 % |
EBITDAaL
/ Revenues |
|
|
|
|
|
36.6
% |
(0.4
pt) |
(0.4
pt) |
Operating Income |
|
|
|
|
|
1,557 |
- |
(5.6)% |
eCAPEX |
|
|
|
|
|
1,635 |
(12.2)% |
(12.2)% |
eCAPEX / Revenues |
|
|
|
|
|
18.1 % |
(2.9 pt) |
(2.9 pt) |
In France, revenue growth was driven by wholesale
services and the resiliency of retail services.
Revenues in France were up 2.7% in the 2nd
quarter, driven by the momentum of wholesale services (+11.7%) and
the strong resilience of retail services (+0.1%), despite the
negative effects of the lockdown on roaming and FTTH
deployment.
Revenues from retail services grew 0.1% in the
2nd quarter, an improved trend compared to the 1st quarter, when it
was stable. Excluding STN, retail services grew 1.9% year on
year.
In the 2nd quarter, convergent revenue grew
4.1%, thanks in particular to the profusion and new pricing of
offers. Mobile only revenues were down 3.1%,
impacted by migrations towards convergence. Fixed
only revenues dropped 2.5%, impacted by the continued
decline of narrowband services (-12.0%).
Wholesale revenues grew 11.7% in the 2nd
quarter, an acceleration compared to the 2.6% growth in the 1st
quarter. This growth was driven by co-financing received in
Less-Populated Areas and by the construction of PINs, which more
than offset the decline in roaming and unbundling.
Revenue from equipment sales
declined 26.7% year on year, very heavily impacted by the closure
of all stores in France during the lockdown and despite a strong
recovery in June.
Other revenues growth of 27% year on year was
driven by continuation of the built-to-suit program, which will
enable Orange to undertake the accelerated deployment of its mobile
network and increase the density of its coverage in rural areas and
on transportation routes while still retaining the investment power
needed to consolidate its leadership across the entire network.
In terms of ARPO, convergent ARPO grew 1.5
euros in the quarter to reach 68.7 euros. Mobile
only ARPO dropped 0.21 euro year on year
and stood at 16.6 euros in the 2nd quarter, due to lower roaming
revenues related to Covid-19. Fixed broadband
ARPO grew 0.07 euros in the 2nd quarter, in
particular thanks to the increase of VoIP and entertainment usage,
which intensified during the lockdown.
In terms of sales performance in the 2nd
quarter, mobile contracts showed solid resilience
with 29,000 net additions (after -58,000 net adds in the 1st
quarter of 2020), in a market that remains very competitive and was
impacted by the closure of shops during the lockdown.
Fixed broadband recorded 61,000 net adds in the
2nd quarter, compared to 41,000 net adds in the 2nd quarter of
2019. This performance was driven by an excellent quarter for
fiber with 238,000 net adds despite the lockdown. This was a record
high for a 2nd quarter and a real commercial success since 51% of
these sales were to new customers. Orange continued fiber
deployment at a faster pace in the 2nd quarter with a total of 19.3
million households connected and 3.8 million fiber customers at the
end of June.
The broadband convergent retail customer base
grew 1.1% year on year with 1.67 mobile lines per convergent offer,
up 1.3% year on year.
EBITDAaL grew slightly in the 1st half (+0.5%)
The FTTH co-financing received, as well as our cost-saving efforts,
offset the effects of the crisis (loss of roaming revenue, health
costs, etc.) as well as the sharp decline in traditional services,
such as national roaming.
Spain
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,216 |
(6.8)% |
(6.8)% |
|
2,503 |
(4.6)% |
(4.6)% |
Retail
services |
|
869 |
(7.2)% |
(7.2)% |
|
1,779 |
(5.8)% |
(5.8)% |
Convergence |
|
502 |
(3.1)% |
(3.1)% |
|
1,020 |
(2.8)% |
(2.8)% |
Mobile only |
|
250 |
(13.1)% |
(13.1)% |
|
517 |
(11.5)% |
(11.5)% |
Fixed only |
|
114 |
(10.8)% |
(10.8)% |
|
238 |
(6.1)% |
(6.1)% |
IT & Integration services |
|
2 |
64.4
% |
64.4
% |
|
4 |
56.3
% |
56.3
% |
Wholesale |
|
229 |
10.4
% |
10.4
% |
|
449 |
7.6
% |
7.6
% |
Equipment
sales |
|
118 |
(27.2)% |
(27.2)% |
|
263 |
(17.0)% |
(17.0)% |
Other revenues |
|
0 |
- |
- |
|
12 |
- |
- |
EBITDAaL |
|
|
|
|
|
728 |
(7.5)% |
(7.5)% |
EBITDAaL
/ Revenues |
|
|
|
|
|
29.1
% |
(0.9
pt) |
(0.9
pt) |
Operating Income |
|
|
|
|
|
228 |
- |
(10.3)% |
eCAPEX |
|
|
|
|
|
392 |
(25.9)% |
(25.9)% |
eCAPEX / Revenues |
|
|
|
|
|
15.7 % |
(4.5 pt) |
(4.5 pt) |
Financial performance in Spain was impacted by the
health crisis and the market shift towards low-cost.
Orange Spain's revenues dropped 6.8% in the 2nd
quarter, strongly impacted by the health crisis and a very intense
promotional environment since the end of portability restrictions.
Thus, revenues from retail services dropped 7.2%,
affected by declines in all its components.
Convergent revenues fell 3.1% in the 2nd
quarter, with mobile only revenues down 13.1% and
fixed only revenues down 10.8%. Revenues from
IT and Integration services jumped
64.4%, fueled by the enterprise market, but remain
low in volume terms.
Revenues from wholesale
services rose 10.4% in the 2nd quarter, despite
the sharp decline in visitor roaming, driven by the increase in
international traffic, while revenues from equipment
sales fell 27.2%, impacted by the almost-total shutdown of
sales activity during the lockdown.
On the commercial front, in response to a market polarization
accentuated by the health crisis, Orange has implemented a strategy
aimed at protecting value at the high end of the market while
increasing volumes at the low end. This strategy is bearing fruit
and enabled an increase in convergent ARPO for the
two main brands, Orange and Jazztel, and a stable convergent ARPO
of 57.5 euros overall.
EBITDAaL declined 7.5% in the 1st half,
absorbing part of the lost revenue through continued efforts on
indirect cost and direct cost savings, mainly related to the
slowdown in sales activity during the health crisis.
Europe
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,329 |
(3.6)% |
(5.1)% |
|
2,729 |
(1.6)% |
(2.1)% |
Retail
services |
|
896 |
1.6
% |
0.4
% |
|
1,817 |
2.9
% |
2.7
% |
Convergence |
|
180 |
22.5
% |
18.9
% |
|
357 |
23.9
% |
21.8
% |
Mobile only |
|
494 |
(6.7)% |
(7.9)% |
|
1,008 |
(4.7)% |
(5.3)% |
Fixed only |
|
152 |
(2.5)% |
(6.0)% |
|
308 |
(3.9)% |
(5.6)% |
IT & Integration services |
|
71 |
39.3
% |
61.0
% |
|
143 |
45.0
% |
71.4
% |
Wholesale |
|
246 |
(6.9)% |
(9.1)% |
|
506 |
(3.2)% |
(4.5)% |
Equipment
sales |
|
162 |
(16.6)% |
(18.3)% |
|
348 |
(12.3)% |
(13.3)% |
Other revenues |
|
25 |
(34.2)% |
(35.8)% |
|
58 |
(34.2)% |
(34.7)% |
EBITDAaL |
|
|
|
|
|
730 |
4.3 % |
3.0 % |
EBITDAaL
/ Revenues |
|
|
|
|
|
26.7
% |
1.5
pt |
1.3
pt |
Operating Income |
|
|
|
|
|
173 |
- |
1.9 % |
eCAPEX |
|
|
|
|
|
369 |
(8.2)% |
(9.5)% |
eCAPEX / Revenues |
|
|
|
|
|
13.5 % |
(1.0 pt) |
(1.1 pt) |
Convergence and IT supported the solid momentum in
retail services. EBITDAaL grew thanks to transformation
initiatives.
Revenue from Europe (namely
Belgium, Luxembourg, Moldova, Poland, Romania and Slovakia)
declined 3.6% in the 2nd quarter, mainly impacted by a sharp
slowdown in equipment sales (-16.6%) and energy resales in Poland
(a component of "other revenues" which declined 34.2%). Growth in
retail services was sustained (+1.6%), although
slowing from the previous quarter (+4.3%) due in particular to a
lower contribution from international roaming tied to travel
restrictions put in place by many countries.
Within retail services, convergent revenues
maintained solid growth of 22.5%, confirming the momentum of this
market where Orange is the leader in Europe. Mobile
only revenues were down 6.7% in the 2nd quarter impacted
in particular by migrations towards convergence. Fixed
only revenue slowed 2.5%, which was an improvement
compared to the 5.2% decline in the 1st quarter and the 8.0%
decrease in the 4th quarter of 2019. The growth in fixed broadband
services did not offset the decline in fixed narrowband services.
IT and integration services
continued to post strong revenue growth rising 39.3%, mainly due to
Poland.
Wholesale revenues declined 6.9% in the 2nd
quarter after a 0.6% increase in the previous quarter. This
slowdown was due to reductions in mobile call termination rates,
the end of national roaming contracts, lower SMS usage,
particularly in Belgium, and a decrease in the number of
international visitors. Revenue from equipment
sales fell 16.6%, impacted by the slowing market and above
all by the closure of a large number of stores which lasted until
June. In terms of sales performance in the 2nd
quarter, the health crisis weighed heavily on mobile contract net
additions (-10,000 vs. +28,000 in the 1st quarter) and on prepaid
(-460,000 vs. -228,000 in the previous quarter). The impact was
more moderate on convergence (+58,000 vs. +85,000 in the 1st
quarter) and fixed broadband (+40,000 compared with +51,000 in the
previous period), which included +49,000 net fiber additions, even
better than a year ago (+46,000). The TV customer base continued to
grow, up 4.6%, albeit at a slower rate than the 1st quarter
(+7.4%).
At the European country level,
Poland posted its 8th consecutive quarter of
growth (+2.6%), an acceleration compared to the previous quarter
(+0.9%), driven by good momentum in retail services (+4.5%). Other
countries in the region posted lower revenues, mainly due to the
slight decline in retail services and a more marked decline in
equipment sales.
EBITDAaL in the 1st half grew 4.3% (+30 million
euros), with a positive contribution from Poland (+8.2%) and
Belgium (+8.8%), as a result of successful transformation
initiatives and efforts to mitigate the impact of the health
crisis, especially in Poland.
Africa & Middle East
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,401 |
1.3 % |
0.9 % |
|
2,845 |
3.8 % |
3.9 % |
Retail
services |
|
1,210 |
4.7
% |
4.0
% |
|
2,444 |
6.8
% |
6.8
% |
Mobile only |
|
1,070 |
3.9
% |
3.1
% |
|
2,164 |
6.1
% |
5.9
% |
Fixed only |
|
137 |
10.8
% |
11.0
% |
|
270 |
11.4
% |
12.2
% |
IT & Integration services |
|
4 |
49.1
% |
48.2
% |
|
11 |
73.3
% |
73.1
% |
Wholesale |
|
161 |
(16.0)% |
(16.7)% |
|
342 |
(12.7)% |
(12.5)% |
Equipment
sales |
|
20 |
(18.3)% |
(17.3)% |
|
40 |
(13.1)% |
(11.0)% |
Other revenues |
|
9 |
(8.7)% |
28.6 % |
|
19 |
13.5 % |
52.6 % |
EBITDAaL |
|
|
|
|
|
935 |
7.2 % |
7.7 % |
EBITDAaL
/ Revenues |
|
|
|
|
|
32.9
% |
1.1
pt |
1.2
pt |
Operating Income |
|
|
|
|
|
456 |
- |
4.7 % |
eCAPEX |
|
|
|
|
|
449 |
6.8 % |
7.4 % |
eCAPEX / Revenues |
|
|
|
|
|
15.8 % |
0.4 pt |
0.5 pt |
Good resilience in Africa & Middle
East.
Africa & Middle East revenues rose 1.3% in
the 2nd quarter compared to a 6.2% increase in the previous
quarter. Despite the impact of the health crisis which caused shop
closures, the resilience of retail services
(+4.7%) fueled this momentum, due in particular to the growth
drivers of mobile data, fixed broadband and Orange Money, whose
growth has however slowed compared to the 1st quarter.
Mobile only revenues grew 3.9% in the 2nd
quarter with the 4G customer base reaching 27.9 million, a 40.4%
increase over 12 months. This growth is supported in particular by
data with revenue up 26.5% in the 2nd quarter. The composition of
the mobile customer base continued to improve with a contract base
share up 2 points and a churn rate on prepaid services down
0.3%.
Fixed only revenues rose 10.8% in the 2nd
quarter, a decline compared to the 12.0% increase in the previous
quarter. The number of fixed broadband customers grew 31% year on
year, reaching 1.4 million customers, confirming its role as a
growth driver with fixed broadband revenue up 32.9% in the 2nd
quarter.
Revenues from wholesale services were down
16.0% in the 2nd quarter, impacted in particular by the decline in
international transit business and visitor roaming. Revenues from
equipment sales also fell, down
18.3% due to a market slowdown and of course the health crisis that
caused the closure of many shops.
Orange Money revenues were up 12.5% in the 2nd
quarter, compared with a 22.3% rise in the 1st quarter, adversely
impacted by both the lockdown and free transactions recommended by
the Central Bank of West African States in the context of the
health crisis. The active customer base grew strongly (+18.9% year
on year) and totals 19.6 million customers.
Across the countries of Africa & Middle
East, the mobile customer base remained stable with 123.5
million customers.
In the 2nd quarter, 10 countries in the region grew, including 5
that posted double-digit revenue growth. Among the countries
contributing most to total revenues in Africa and the Middle East,
the Côte d'Ivoire cluster posted 7.3% year-on-year
growth, thanks to the good performance from Burkina Faso and value
offers in Côte d'Ivoire, and Egypt grew
3.3%.
EBITDAaL in Africa & Middle East grew 7.2%
in the 1st half to reach a 32.9% margin rate, up 1.1 points thanks
to cost control and continued transformation initiatives.
Enterprise
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,925 |
(3.3)% |
(0.8)% |
|
3,859 |
(1.3)% |
2.3 % |
Fixed
only |
|
984 |
(1.0)% |
(0.9)% |
|
1,958 |
(1.4)% |
(1.0)% |
Voice |
|
326 |
1.0
% |
1.0
% |
|
632 |
(2.8)% |
(2.6)% |
Data |
|
658 |
(2.0)% |
(1.8)% |
|
1,326 |
(0.7)% |
(0.3)% |
IT &
Integration services |
|
738 |
(2.6)% |
4.1
% |
|
1,475 |
1.9
% |
12.0
% |
Mobile
* |
|
203 |
(14.8)% |
(14.8)% |
|
426 |
(10.3)% |
(10.3)% |
Mobile only |
|
162 |
(13.4)% |
(13.3)% |
|
327 |
(11.0)% |
(11.0)% |
Wholesale |
|
11 |
43.9
% |
43.9
% |
|
21 |
20.1
% |
20.1
% |
Equipment sales |
|
30 |
(31.7)% |
(31.7)% |
|
77 |
(13.3)% |
(13.3)% |
EBITDAaL |
|
|
|
|
|
471 |
(18.5)% |
(16.7)% |
EBITDAaL
/ Revenues |
|
|
|
|
|
12.2
% |
(2.6
pt) |
(2.8
pt) |
Operating Income |
|
|
|
|
|
267 |
- |
(25.8)% |
eCAPEX |
|
|
|
|
|
174 |
(13.0)% |
(11.9)% |
eCAPEX / Revenues |
|
|
|
|
|
4.5 % |
(0.6 pt) |
(0.7 pt) |
A decrease in revenues after six consecutive quarterly
increases due to the impact of the health crisis on business
activity and project roll-outs.
In the 2nd quarter, revenue in the Enterprise segment fell 3.3%
after six consecutive quarterly increases. Orange's B2B services
have played a critical role in enabling businesses to remain
operational during the health crisis; nevertheless the decline in
business activity and delays in project roll-outs by enterprise
customers impacted revenues.
Revenues from IT and integration
services recorded the first decline in its history
(-2.6%) in the 2nd quarter, while remaining up over the half year
(+1.9%). The 2nd quarter decline stemmed from the effect of the
health crisis, which was unable to be offset by the good
performance in the 1st half of cloud and cybersecurity services, up
8% and 11% respectively, demonstrating their importance,
particularly in times of crisis. As of June 30, 2020, IT and
integration services represented 38% of Enterprise segment
revenues.
Data revenues decreased 2.0% in the 2nd
quarter, impacted in particular by Globecast whose broadcasting
revenues were sharply reduced following the widespread
cancellations of events around the world. Mobile*
revenues declined 14.8% in the 2nd quarter, mainly due to lower
roaming revenues which were strongly impacted by the health crisis.
Revenues from traditional voice
services, however, grew 1.0%, driven by growth in
voice traffic and audio conferencing services during the
lockdown.
Enterprise EBITDAaL declined 18.5% in the 1st
half with two-thirds of this decrease due to the impact of the
health crisis, in particular on roaming and data. A transformation
plan is currently being implemented and a return to EBITDAaL growth
is not expected before the end of 2021.
* Mobile revenues include mobile services and
mobile equipment sales invoiced to businesses and incoming mobile
traffic from businesses invoiced to other carriers.
International Carriers & Shared
Services
In millions of euros |
|
2Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
355 |
(5.4)% |
(5.5)% |
|
728 |
(2.4)% |
(2.4)% |
Wholesale |
|
259 |
(3.8)% |
(3.7)% |
|
530 |
(2.4)% |
(2.3)% |
Other revenues |
|
96 |
(10.4)% |
(11.0)% |
|
199 |
(2.4)% |
(2.9)% |
EBITDAaL |
|
|
|
|
|
(179) |
1.9 % |
(2.9)% |
EBITDAaL
/ Revenues |
|
|
|
|
|
(24.6)% |
(0.1
pt) |
(1.3
pt) |
Operating Income |
|
|
|
|
|
(345) |
- |
12.3 % |
eCAPEX |
|
|
|
|
|
123 |
68.9 % |
55.7 % |
eCAPEX / Revenues |
|
|
|
|
|
16.9 % |
7.2 pt |
6.3 pt |
Revenues from International Carriers
and Shared Services declined 5.4% in the 2nd
quarter after an increase of 0.7% in the 1st quarter.
Services to international carriers were severely impacted by the
Covid-19 pandemic due to the halt in international travel and trips
and the reduction of flows on voice Corridors. Other revenues were
also impacted by the closure of movie theaters during the lockdown
and by the decline in Orange Marine's installation activities,
which were also slowed by the health crisis.
Orange Bank
In millions of euros |
|
|
|
|
|
6M 2020 |
changecomparablebasis |
changehistoricalbasis |
Net
Banking Income (NBI) |
|
|
|
|
|
34 |
119.0
% |
119.0
% |
Cost of
bank credit risk |
|
|
|
|
|
(11) |
180.5
% |
180.5
% |
Operating Income |
|
|
|
|
|
(87) |
- |
0.9 % |
eCAPEX |
|
|
|
|
|
14 |
(14.5)% |
(14.5)% |
In the 1st half of 2020, the Net Banking Income (NBI) of Orange
Bank grew by 18 million euros year on year due to development of
the new Orange Bank offer.
Operating income grew by 1 million euros compared to the 1st
half of 2019, due to the increase in NBI and lower customer
acquisition costs, in the context of a deteriorating economic and
commercial environment due to the health crisis which resulted in
the closure of Orange shops and Groupama agencies during the
lockdown and led to an increase in the cost of risk.
In France, Orange Bank integrated Orange Courtage, which offers
insurance for mobile handsets to 450,000 retail customers and
150,000 business customers. Orange Bank is continuing its
value-oriented strategy by also becoming an insurance broker,
achieving a new milestone in the development of cross-selling
offers with Orange's core business.
As of June 30, 2020, Orange Bank had 1 million customers,
including 31,000 in Spain where the service was launched in the 4th
quarter of 2019.
Schedule of upcoming events
10/29/2020 - Publication of third
quarter 2020 results
Contacts
press: +33 1 44 44 93 93 Jean-Bernard Orsoni
jeanbernard.orsoni@orange.com Tom Wright tom.wright@orange.com
Olivier Emberger olivier.emberger@orange.com |
financial communication: +33 1 44 44 04 32 (analysts and investors)
Patrice Lambert-de Diesbach p.lambert@orange.com Isabelle
Casadoisabelle.casado@orange.com Samuel
Castelosamuel.castelo@orange.com Didier Kohn didier.kohn@orange.com
Aurélia Roussel aurelia.roussel@orange.com Andrei Dragolici
andrei.dragolici@orange.com |
Disclaimer
This press release contains forward-looking statements about
Orange’s financial situation and results of operations. Although we
believe these statements are based on reasonable assumptions, they
are subject to numerous risks and uncertainties, including matters
not yet known to us or not currently considered material by us, and
there can be no assurance that anticipated events will occur or
that the objectives set out will actually be achieved. In
particular, the consequences of the Covid-19 outbreak are uncertain
and the health crisis may exacerbate the risks that the Group
faces. More detailed information on the potential risks that could
affect our financial results is included in the Registration
Document filed on 20 April 2020 with the French Financial Markets
Authority (AMF) and in the annual report (Form 20-F) filed on 21
April 2020 with the U.S. Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made.
Other than as required by law, Orange does not undertake any
obligation to update them in light of new information or future
developments.
Appendix 1: adjusted data to income statement items
In the 2nd quarter:
|
|
2Q 2020 |
|
2Q 2019historical basis |
In millions of euros |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
Revenues |
|
10,375 |
- |
10,375 |
|
10,388 |
- |
10,388 |
External
purchases |
|
(4,174) |
- |
(4,174) |
|
(4,289) |
- |
(4,289) |
Other
operating income |
|
135 |
- |
135 |
|
197 |
- |
197 |
Other
operating expense |
|
(188) |
(172) |
(361) |
|
(93) |
(2) |
(95) |
Labor
expenses |
|
(2,147) |
(14) |
(2,161) |
|
(2,162) |
(28) |
(2,190) |
Operating
taxes and levies |
|
(317) |
- |
(317) |
|
(320) |
- |
(320) |
Gains
(losses) on disposal of fixed assets, investments and
activities |
|
- |
2 |
2 |
|
- |
21 |
21 |
Restructuring costs |
|
- |
(7) |
(7) |
|
- |
(40) |
(40) |
Depreciation and amortization of financed assets |
|
(12) |
- |
(12) |
|
(3) |
- |
(3) |
Depreciation and amortization of right-of-use assets |
|
(330) |
- |
(330) |
|
(312) |
- |
(312) |
Impairment of right-of-use assets |
|
- |
(6) |
(6) |
|
1 |
(24) |
(24) |
Interests
expenses on liabilities related to financed assets |
|
(0) |
0 |
- |
|
(0) |
0 |
- |
Interests expenses on lease liabilities |
|
(28) |
28 |
- |
|
(32) |
32 |
- |
EBITDAaL |
|
3,312 |
(168) |
- |
|
3,375 |
(41) |
- |
Significant litigation |
|
(169) |
169 |
- |
|
- |
- |
- |
Specific
labor expenses |
|
(11) |
11 |
- |
|
(26) |
26 |
- |
Fixed
assets, investments and business portfolio review |
|
2 |
(2) |
- |
|
21 |
(21) |
- |
Restructuring program costs |
|
(13) |
13 |
- |
|
(64) |
64 |
- |
Acquisition and integration costs |
|
(6) |
6 |
- |
|
(4) |
4 |
- |
Interests
expenses on liabilities related to financed assets |
|
- |
(0) |
(0) |
|
- |
(0) |
(0) |
Interests expenses on lease liabilities |
|
- |
(28) |
(28) |
|
- |
(32) |
(32) |
Half-year data:
|
|
6M 2020 |
|
6M 2019historical basis |
In millions of euros |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
Revenues |
|
20,769 |
- |
20,769 |
|
20,573 |
- |
20,573 |
External
purchases |
|
(8,557) |
- |
(8,557) |
|
(8,563) |
- |
(8,563) |
Other
operating income |
|
271 |
- |
271 |
|
341 |
- |
341 |
Other
operating expense |
|
(274) |
(174) |
(448) |
|
(194) |
(7) |
(201) |
Labor
expenses |
|
(4,342) |
(33) |
(4,376) |
|
(4,320) |
(114) |
(4,434) |
Operating
taxes and levies |
|
(1,232) |
- |
(1,232) |
|
(1,207) |
- |
(1,207) |
Gains
(losses) on disposal of fixed assets, investments and
activities |
|
- |
59 |
59 |
|
- |
68 |
68 |
Restructuring costs |
|
- |
(13) |
(13) |
|
- |
(52) |
(52) |
Depreciation and amortization of financed assets |
|
(22) |
- |
(22) |
|
(3) |
- |
(3) |
Depreciation and amortization of right-of-use assets |
|
(642) |
- |
(642) |
|
(609) |
- |
(609) |
Impairment of right-of-use assets |
|
- |
(6) |
(6) |
|
(0) |
(24) |
(24) |
Interests
expenses on liabilities related to financed assets |
|
(1) |
1 |
- |
|
(0) |
0 |
- |
Interests expenses on lease liabilities |
|
(56) |
56 |
- |
|
(60) |
60 |
- |
EBITDAaL |
|
5,914 |
(111) |
- |
|
5,958 |
(68) |
- |
Significant litigation |
|
(169) |
169 |
- |
|
(65) |
65 |
- |
Specific
labor expenses |
|
(28) |
28 |
- |
|
(46) |
46 |
- |
Fixed
assets, investments and business portfolio review |
|
59 |
(59) |
- |
|
68 |
(68) |
- |
Restructuring program costs |
|
(19) |
19 |
- |
|
(75) |
75 |
- |
Acquisition and integration costs |
|
(10) |
10 |
- |
|
(10) |
10 |
- |
Interests
expenses on liabilities related to financed assets |
|
- |
(1) |
(1) |
|
- |
(0) |
(0) |
Interests expenses on lease liabilities |
|
- |
(56) |
(56) |
|
- |
(60) |
(60) |
Appendix 2: key performance indicators
In thousand, at the end of the period |
|
June 302020 |
|
June 302019 |
Number of convergent customers |
|
10,814 |
|
10,588 |
Number of mobile accesses (excluding MVNOs)
(1) |
|
207,956 |
|
204,155 |
o/w |
Mobile
accesses of convergent customers |
|
19,233 |
|
18,654 |
|
Mobile
only accesses |
|
188,722 |
|
185,501 |
o/w |
Contract
customers |
|
75,094 |
|
72,730 |
|
Prepaid
customers |
|
132,862 |
|
131,425 |
Number of fixed accesses (2) |
|
45,120 |
|
46,025 |
|
Number of fixed retail accesses |
|
29,322 |
|
29,892 |
|
|
Number of fixed broadband accesses |
|
20,971 |
|
20,353 |
|
|
o/w |
Accesses
with very high-speed broadband |
|
8,421 |
|
7,028 |
|
|
|
Accesses
of convergent customers |
|
10,814 |
|
10,588 |
|
|
|
Fixed
only accesses |
|
10,158 |
|
9,765 |
|
|
Number of fixed narrowband accesses |
|
8,351 |
|
9,539 |
|
Number of fixed wholesale accesses |
|
15,797 |
|
16,132 |
Group total accesses (1+2) |
|
253,076 |
|
250,180 |
2019 data is on a comparable basis.
The key indicators by country are shown on the Orange Group
website orange.com, in the Investors section of the document
"Orange Investors data book Q2 2020", directly accessible through
the following link:
www.orange.com/en/Investors/Results-and-presentations/Folder/All-consolidated-results
Appendix 3: glossary
Key figures
Data on a comparable basis: data based on comparable accounting
principles, scope of consolidation and exchange rates are presented
for previous periods. The transition from data on an historical
basis to data on a comparable basis consists of keeping the results
for the period ended and then restating the results for the
corresponding period of the preceding year for the purpose of
presenting, over comparable periods, financial data with comparable
accounting principles, scope of consolidation and exchange rate.
The method used is to apply to the data of the corresponding period
of the preceding year, the accounting principles and scope of
consolidation for the period just ended as well as the average
exchange rate used for the income statement for the period ended.
Changes in data on a comparable basis reflect organic business
changes. Data on a comparable basis is not a financial aggregate as
defined by IFRS and may not be comparable to similarly-named
indicators used by other companies.
EBITDAaL or “EBITDA after Leases”: operating income (i) before
depreciation and amortization of fixed assets, effects resulting
from business combinations, reclassification of cumulative
translation adjustment from liquidated entities, impairment of
goodwill and fixed assets, share of profits (losses) of associates
and joint ventures, (ii) after interest on debts related to
financed assets and on lease liabilities, and (iii) adjusted for
significant litigation, specific labor expenses, fixed assets,
investments and businesses portfolio review, restructuring programs
costs, acquisition and integration costs and, where appropriate,
other specific elements. EBITDAaL is not a financial aggregate as
defined by IFRS standards and may not be directly comparable to
similarly-named indicators in other companies.
eCAPEX or “economic CAPEX”: (i) acquisitions of property, plant
and equipment and intangible assets, excluding telecommunications
licenses and financed assets, (ii) less the price of disposal of
property, plant and equipment and intangible assets. eCAPEX is not
a financial performance indicator as defined by IFRS standards and
may not be directly comparable to indicators referenced by
similarly-named indicators in other companies.
Organic Cash Flow (telecoms activities): for the perimeter of
the telecoms activities, this corresponds to the net cash provided
by operating activities, minus (i) lease liabilities repayments and
debts related to financed assets repayments, and (ii) purchases and
sales of property, plant and equipment and intangible assets, net
of the change in the fixed assets payables, (iii) excluding effect
of telecommunication licenses paid and significant litigations paid
or received. Organic Cash Flow (telecoms activities) is not a
financial aggregate defined by IFRS and may not be comparable to
similarly-named indicators used by other companies.
Convergence
The customer base and the revenues invoiced to convergence
services customers (excluding equipment sales) was for convergent
offers defined as the combination of, at a minimum, a fixed
broadband access and a mobile contract subscribed by retail market
customers.
Convergent ARPO: the average quarterly revenues per convergent
offer (ARPO) is calculated by dividing revenues from retail
convergent services offers invoiced to customers generated over the
past three months (excluding IFRS 15 adjustments) by the weighted
average number of retail convergent offers over the same period.
ARPO is expressed by monthly revenues per convergent offer.
Performance indicators
The fixed retail accesses correspond to the number of fixed
broadband accesses (xDSL (ADSL and VDSL), FTTx, cable, Fixed-4G
(fLTE) and other broadband accesses (satellite, Wimax and others))
and fixed narrowband accesses (mainly PSTN) and payphones.
The fixed wholesale accesses correspond to the number of fixed
broadband and narrowband wholesale accesses operated by Orange.
Mobile only services
Revenues from Mobile only services consists of revenues invoiced
to customers of mobile offers excluding retail convergence and
equipment sales. The customer base includes customers with a
contract excluding retail convergence, machine-to-machine contracts
and prepaid cards.
Mobile only ARPO: the average quarterly revenues from Mobile
only (ARPO) is calculated by dividing the revenue from Mobile only
services (excluding machine-to-machine and IFRS 15 adjustments)
generated over the past three months by the weighted average of
Mobile only customers (excluding machine-to-machine) over the same
period. The ARPO is expressed as monthly revenues per Mobile only
customer.
Fixed only services
Revenues from Fixed only services include the revenue of fixed
services excluding retail convergence and equipment sales:
traditional fixed-line telephony, fixed broadband and enterprise
solutions and networks2. The customer base consists of fixed-line
telephony and fixed broadband customers, excluding retail
convergence customers.
Fixed only Broadband ARPO: the average quarterly revenues from
Fixed only Broadband (ARPO) is calculated by dividing the revenue
from Fixed only Broadband services (excluding IFRS 15 adjustments)
generated over the past three months by the weighted average of
Fixed only Broadband customers over the same period. ARPO is
expressed as monthly revenues per Fixed only Broadband
customer.
IT & integration services
Revenues from IT and integration services include revenue from
unified communication and collaboration services (Local Area
Network and telephony, consulting, integration, project management
and video conferencing offers), hosting and infrastructure services
(including cloud computing), application services (customer
relations management and other application services), security
services, machine-to-machine services (excluding connectivity), as
well as equipment sales for the products and services above.
Wholesale
Revenues from other carriers consists of (i) mobile services to
other carriers including incoming traffic, visitor roaming, network
sharing, national roaming and Mobile Virtual Network Operators
(MVNOs), and (ii) fixed services to other carriers including
national networking, services to international carriers, high-speed
and very high-speed broadband access (fibre access, unbundling of
telephone lines and xDSL access sales) and the sale of telephone
lines on the wholesale market.
1 Unless otherwise stated, changes are on a
comparable basis.
2
- PR_Orange_S12020_EN_300720