Press release
Paris, 27 July 2017
Solid first-half growth in revenue and adjusted
EBITDA with clear acceleration in the 2nd quarter and
improved adjusted EBITDA margin
-
Revenue growth accelerated in
the 2nd quarter of
2017, rising 1.4% (+138 million euros) after rising 0.8% in the
1st quarter (+85
million euros), on a comparable basis. Revenues were 20.276
billion euros in the first half of 2017, an increase of 1.1% (+222
million euros) following an increase of 0.9% in the 2nd half of 2016
(+188 million euros).
The improved trend in the 2nd
quarter was principally tied to the recovery in the Africa &
Middle East segment, a continued strong performance in Spain and
the return to growth in France for the first time since 2009.
-
Commercial momentum remained
very strong in the 2nd quarter of
2017, with the continued development in convergence and very
high-speed broadband in Europe, and with the recovery in mobile in
the Africa & Middle East segment.
Growth in consumer convergent offers remained
strong in France and the Europe segment, with 9.8 million customers
at 30 June 2017 (+11.5% year on year).
Growth was sustained in the Group's fixed broadband services, led
by fibre which had 308,000 net additions in the 2nd
quarter of 2017. The Group's fixed broadband base had 19.1 million
customers at 30 June 2017 (+5.4% year on year on a comparable
basis).
Mobile contracts[1] customers
in France and in the Europe segment had 350,000 net additions in
the 2nd quarter of
2017, with the customer base up 3.3% at 30 June 2017 year on year.
4G in France and in the Europe segment continued its rapid
development, rising 39% year on year with 31.6 million customers at
30 June 2017.
In the Africa & Middle East segment, mobile net additions
improved significantly for the second consecutive quarter, with 3.9
million net additions in the 2nd quarter of
2017 following 2.7 million in the 1st quarter.
-
Growth in the Group's adjusted
EBITDA strengthened in the 2nd quarter of
2017, rising 2.4% after an increase of 2.0% in the 1st quarter,
on a comparable basis. In the 1st half of
2017, the Group's adjusted EBITDA was 5.978 billion euros, an
increase of 2.2% (+130 million euros).
Adjusted EBITDA from the telecom activities rose
2.5% in the 2nd quarter of
2017, and was 0.3 percentage points higher than that of the
1st quarter
(+2.2%). The adjusted EBITDA margin of the telecom activities also
improved, reaching 33.2% in the 2nd quarter of
2017 compared to 25.9% in the 1st quarter
(29.6% for the 1st half of
2017, +0.4 percentage points compared with the 1st half
of 2016). The adjusted EBITDA margin for France rose 1.0 percentage
point in the 1st half of
2017.
-
The Group had operating income
of 2.434 billion euros in the 1st half of
2017, an increase of 293 million euros compared with the
1st half of
2016. Operating income from the telecom activities was 2.462
billion euros, an increase of 321 million euros.
-
Net income was 830 million
euros in the 1st half of
2017, compared with 3.323 billion euros in the first
1st half of
2016. The decrease of 2.493 billion euros between the two periods
was mainly linked to the impact of the sale of EE in January
2016[2] (2.249
billion euros).
Net income from continuing operations declined 244
million euros. Excluding the impact of a charge related to the
shareholding held in the BT Group (-349 million euros), net income
from continuing operations improved 105 million euros.
Net income attributable to equity owners of the Group was 682
million euros in the 1st half of
2017, compared with 3.168 billion euros in the 1st half
of 2016.
-
The Group's CAPEX (3.276
billion euros in the 1st half of
2017) increased 3.0% on a comparable basis. CAPEX on the
telecom activities (3.251 billion euros) rose 2.2% while the ratio
of CAPEX to revenues for the telecom activities was 16.0% (+0.2
percentage points compared with the 1st half of
2016). Investments in fibre and in very high-speed mobile (4G and
4G+) rose 16.5% compared with the 1st half of
2016, in line with the objectives of the Essentiels2020 strategic
plan.
-
Net debt[3] was
24.555 billion euros at 30 June 2017, an increase of 111
million euros compared to 31 December 2016. The ratio of "net
financial debt to adjusted EBITDA for the telecom activities" was
1.92x at 30 June 2017, following 1.93x at 31 December 2016, in line
with the objective of a ratio of around 2x in the medium
term.
2017 outlook
For the 2017 financial year, Orange confirms adjusted EBITDA of
more than that achieved in 2016 on a comparable basis, buoyed by
strong commercial momentum supported by investment and continuing
efforts on the transformation of the cost structure.
The Group also confirms the objective of a ratio
of net debt to adjusted EBITDA for the telecom activities of around
2x in the medium term in order to preserve Orange's financial
strength and investment capacity. Within this framework, the Group
is maintaining a policy of selective, value-creating acquisitions
by concentrating on markets in which it is already present.
As announced during the presentation of the 2016
results, the Board of Directors will propose to the Annual General
Meeting of Shareholders of 2018 the payment of a dividend of 0.65
euros per share for 2017. An interim dividend for 2017 of 0.25
euros per share will be paid on 7 December 2017[4].
Commenting on the publication of the first-half
results, Stéphane Richard, Chairman and CEO of the Orange Group,
said:
"The acceleration seen in the Group's growth was
confirmed by the first-half results, and in particular the
performance in the second quarter, driven by France, Europe and
Africa and the Middle East.
In France, we returned to growth for the first
time since 2009. The performance in Spain, and more generally
across Europe, was excellent, with strong revenue growth
underpinned by a significant rise in very high-speed broadband
customers.
The strategy that we have been following for
several quarters, which centred on giving customers an unbeatable
experience through convergence around the home and a quality
network, is now yielding results.
We have converted more than half of our revenue
increase into EBITDA, demonstrating a good balance of growth and
profitability. This has enabled us to reaffirm our objective of
delivering growth in adjusted EBITDA for the full year 2017.
Finally, we strengthened our content offering in
the first half of the year through the creation of Orange Content
and the signing of a number of agreements with prestigious partners
such as Canal+, our historic partner, and HBO. We remain convinced
that content is an effective tool for improving our offering and
keeping our customers loyal while protecting value.
I would like to thank all the teams across the
Group for this performance and for working hard every day to seize
the opportunities available to Orange in this digital
revolution."
*
* *
The Board of Directors of Orange SA met on 26 July
2017 and examined the Group's financial statements.
The Group's statutory auditors audited those
financial statements, and the audit reports relative to their
certification are in the process of being issued.
More detailed information is available on the
Orange website:
www.orange.com
Key figures
|
|
|
|
|
|
|
|
|
|
|
2017 |
2016 |
2016 |
|
change |
|
change |
In millions of euros |
|
comparable basis |
historical basis |
|
comparable basis |
|
historical basis |
|
|
|
|
|
|
|
|
|
|
Revenues |
20,276 |
20,054 |
20,079 |
|
1.1% |
|
1.0% |
Of which
: |
|
|
|
|
|
|
|
|
France |
8,879 |
8,860 |
8,860 |
|
0.2% |
|
0.2% |
|
Europe |
5,405 |
5,162 |
5,128 |
|
4.7% |
|
5.4% |
|
|
Spain |
2,628 |
2,418 |
2,418 |
|
8.7% |
|
8.7% |
|
|
Poland |
1,325 |
1,337 |
1,306 |
|
(0.9)% |
|
1.4% |
|
|
Belgium &
Luxembourg |
617 |
609 |
609 |
|
1.4% |
|
1.4% |
|
|
Central European
countries |
843 |
801 |
798 |
|
5.2% |
|
5.6% |
|
|
Intra-Europe eliminations |
(8) |
(3) |
(3) |
|
- |
|
- |
|
Africa
& Middle East |
2,491 |
2,449 |
2,516 |
|
1.7% |
|
(1.0)% |
|
Enterprise |
3,615 |
3,675 |
3,666 |
|
(1.6)% |
|
(1.4)% |
|
International Carriers & Shared Services |
819 |
903 |
904 |
|
(9.3)% |
|
(9.4)% |
|
Intra-Group eliminations |
(933) |
(995) |
(995) |
|
- |
|
- |
Adjusted EBITDA* |
5,978 |
5,848 |
5,913 |
|
2.2% |
|
1.1% |
of which
telecom activities |
6,005 |
5,865 |
5,913 |
|
2.4% |
|
1.6% |
|
As % of revenues |
29.6% |
29.2% |
29.4% |
|
0.4 pt |
|
0.2 pt |
|
France |
3,168 |
3,070 |
3,070 |
|
3.2% |
|
3.2% |
|
Europe |
1,548 |
1,451 |
1,438 |
|
6.8% |
|
7.7% |
|
|
Spain |
722 |
627 |
625 |
|
15.3% |
|
15.5% |
|
|
Poland |
367 |
396 |
387 |
|
(7.4)% |
|
(5.2)% |
|
|
Belgium &
Luxembourg |
157 |
145 |
145 |
|
8.4% |
|
8.4% |
|
|
Central
European countries |
302 |
283 |
281 |
|
7.0% |
|
7.6% |
|
Africa
& Middle East |
764 |
757 |
828 |
|
0.9% |
|
(7.7)% |
|
Enterprise |
629 |
661 |
660 |
|
(4.9)% |
|
(4.7)% |
|
International Carriers & Shared Services |
(104) |
(74) |
(83) |
|
(43.0)% |
|
(25.0)% |
of which
Orange Bank |
(27) |
(17) |
- |
|
- |
|
- |
Operating Income |
2,434 |
|
2,141 |
|
|
|
13.7% |
of which
telecom activities |
2,462 |
|
2,141 |
|
|
|
15.0% |
of which
Orange Bank |
(28) |
|
- |
|
|
|
- |
Net income |
830 |
|
3,323 |
|
|
|
(75.0)% |
Net income
attributable to equity owners of the Group |
682 |
|
3,168 |
|
|
|
(78.5)% |
CAPEX (excluding licences) |
3,276 |
3,181 |
3,167 |
|
3.0% |
|
3.4% |
of which
telecom activities |
3,251 |
3,181 |
3,167 |
|
2.2% |
|
2.7% |
|
As % of revenues |
16.0% |
15.9% |
15.8% |
|
0.2 pt |
|
0.3 pt |
of which
Orange Bank |
25 |
- |
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt |
24,555 |
24,444 |
|
|
|
|
|
Ratio of
net financial debt / adjusted EBITDA for the telecom
activities** |
1.92x |
1.93x |
|
|
|
|
|
* EBITDA adjustments are described in
appendix 6.
** The method of calculating the ratio of net debt to adjusted
EBITDA for the telecom activities is described in appendix 4.
|
|
|
|
|
|
|
|
|
|
|
2nd
quarter |
2nd
quarter |
2nd
quarter |
|
change comparable |
|
change historical |
|
|
|
2017 |
2016 |
2016 |
|
basis |
|
basis |
In millions of euros |
|
comparable basis |
historical basis |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
10,206 |
10,068 |
10,070 |
|
1.4% |
|
1.4% |
Of which
: |
|
|
|
|
|
|
|
|
France |
4,452 |
4,430 |
4,430 |
|
0.5% |
|
0.5% |
|
Europe |
2,749 |
2,620 |
2,594 |
|
4.9% |
|
6.0% |
|
|
Spain |
1,337 |
1,229 |
1,229 |
|
8.8% |
|
8.8% |
|
|
Poland |
673 |
688 |
664 |
|
(2.2)% |
|
1.3% |
|
|
Belgium &
Luxembourg |
310 |
299 |
299 |
|
3.5% |
|
3.5% |
|
|
Central European
countries |
434 |
405 |
403 |
|
7.1% |
|
7.7% |
|
|
Intra-Europe eliminations |
(5) |
(2) |
(2) |
|
- |
|
- |
|
Africa
& Middle East |
1,252 |
1,219 |
1,245 |
|
2.7% |
|
0.6% |
|
Enterprise |
1,819 |
1,843 |
1,843 |
|
(1.3)% |
|
(1.3)% |
|
International Carriers & Shared Services |
412 |
448 |
450 |
|
(8.1)% |
|
(8.5)% |
|
Intra-Group eliminations |
(478) |
(491) |
(491) |
|
- |
|
- |
Adjusted EBITDA* |
3,380 |
3,300 |
3,344 |
|
2.4% |
|
1.1% |
of which
telecom activities |
3,393 |
3,310 |
3,344 |
|
2.5% |
|
1.5% |
|
As % of revenues |
33.2% |
32.9% |
33.2% |
|
0.4 pt |
|
0.0 pt |
of which
Orange Bank |
(14) |
(10) |
- |
|
- |
|
- |
Operating Income |
1,506 |
|
1,325 |
|
|
|
13.6% |
of which
telecom activities |
1,520 |
|
1,325 |
|
|
|
14.7% |
of which
Orange Bank |
(14) |
|
- |
|
|
|
- |
CAPEX (excluding licenses) |
1,783 |
1,718 |
1,710 |
|
3.8% |
|
4.3% |
of which
telecom activities |
1,767 |
1,718 |
1,710 |
|
2.8% |
|
3.3% |
|
As % of revenues |
17.3% |
17.1% |
17.0% |
|
0.2 pt |
|
0.3 pt |
of which
Orange Bank |
16 |
- |
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
* EBITDA adjustments are described in
appendix 6.
Comments on key Group
figures
Revenues
Orange Group revenues were 20.276 billion euros in
the 1st half of
2017, an increase of 1.1% (+222 million euros) on a comparable
basis[5], following
the 188 million euro-increase (+0.9%) in the 2nd half
of 2016. Growth continued to be strong in fixed broadband services
(+6.3% in the 1st half of
2017, after the 5.8% increase in the 2nd half of
2016), and mobile services rose 0.5% after rising 0.3% in the
2nd half of
2016.
In the 2nd quarter of
2017, the Group's revenues rose 1.4% on a comparable basis after
climbing 0.8% in the 1st quarter of
2017, led by continuing strong growth in Spain, a recovery in the
Africa & Middle East segment, and a return to growth in France
for the first time since 2009. Fixed and mobile services in other
regions also improved in the 2nd
quarter.
The 2nd quarter 2017
revenue trends by region were as follows (on a comparable
basis):
In France, revenues rose 0.5% in the 2nd quarter 2017
after being stable in the 1st quarter. The
improvement related to mobile services (-1.1% following -3.3% in
the 1st quarter),
with a lower decline in national roaming and a reduced impact from
decreased roaming prices in Europe which came into effect in April
2016. Growth continued to be strong in fixed broadband services
(+5.0% after rising +5.5% in the 1st quarter of
2017), led by fibre.
In the Europe segment, revenues grew 4.9% in the 2nd quarter of
2017 after increasing 4.5% in the 1st quarter:
-
in Spain, revenue growth continued to be strong
(+8.8% in the 2nd quarter of
2017 after +8.5% in the 1st quarter),
led by convergence;
-
in Poland, revenues fell 2.2% in the
2nd quarter of
2017 after rising 0.5% in the 1st quarter.
Growth in mobile equipment sales slowed following the high level in
the 2nd quarter
2016, while the fixed and mobile services trend improved;
-
in Belgium & Luxembourg, revenues grew 3.5%
in the 2nd quarter
after declining 0.7% in the 1st quarter, led
by mobile services, the recovery in mobile equipment sales, and
fixed broadband services (convergent offers);
-
the Central European countries recorded revenue
growth of 7.1% in the 2nd quarter of
2017, after a 3.2% increase in the 1st quarter, led
by Romania (+11.0%) and Moldova (+4.4%), while Slovakia was stable
(+0.1%).
In the Africa & Middle East segment, the
2nd quarter saw
a return to solid growth (+2.7%) after a slower 1st
quarter (+0.7%), led by Côte d'Ivoire group, Sonatel group and
Morocco.
In the Enterprise segment, the trend improved in the 2nd quarter of
2017 to a modest decline of 1.3% after falling 2.0% in the
1st quarter.
Security services rose 27% and Cloud services increased 15%.
Customer base growth
France[6] had 151,000
mobile contract[7] net
additions in the 2nd quarter of
2017, led by strong growth of the Open (154,000 net additions) and
Sosh (96,000 net additions) convergent offers. Fibre continued to
develop rapidly, with 111,000 net additions in the 2nd quarter and
1.690 million customers at 30 June 2017 (+43.1% year on
year).
In Spain, commercial momentum remained strong, both in very
high-speed fixed broadband with 141,000 net fibre additions in the
2nd quarter
(1.947 million customers at 30 June 2017) and in mobile contracts
with 147,000 net additions.
In Poland, there were 121,000 mobile contract net additions in the
2nd quarter of
2017; year on year, the contract customer base rose 10.1% on a
comparable basis.
In Belgium, the 2nd quarter 2017
saw 21,000 mobile contract net additions7, a
significant improvement compared to the 1st quarter
(3,000).
In the Africa & Middle East segment, the mobile base had 127.2
million customers at 30 June 2017, a year-on-year increase of 5.7%
on a comparable basis (+6.9 million customers). Orange Money had
32.4 million customers and an active base of 10.0 million customers
at 30 June 2017.
In total, the Group's mobile base comprised 207.4 million customers
at 30 June 2017, an increase of 3.6% (+7.2 million of additional
customers) on a comparable basis. Contracts (71.9 million
customers) rose steadily (+7.8% year on year), led principally by
France and the Europe segment.
There were 19.1 million fixed broadband customers at 30 June 2017,
an increase of 5.4% year on year (+982,000 customers), with
particularly strong growth in France, Spain and Poland.
Consumer convergent offers accounted for 9.8 million customers in
France and the Europe segment (+11.5% year on year). Most of them
related to France (5.7 million), Spain (3.1 million) and Poland
(858,000). The Belgium & Luxembourg segment, Romania and
Slovakia are also marketing consumer convergent offers.
TV services had 8.7 million customers at 30 June 2017 (+7.0% year
on year).
Adjusted EBITDA
The Group's adjusted EBITDA was 5.978 billion
euros in the 1st half of
2017, a 2.2% increase (+130 million euros) on a comparable
basis.
Adjusted EBITDA from telecom activities was 6.005 billion euros in
the 1st half of
2017, an increase of 2.4% (+140 million euros) on a comparable
basis. The adjusted EBITDA margin for telecom activities was 29.6%
in the 1st half of
2017, an increase of 0.4 percentage points in relation to the
1st half of
2016.
In the 2nd quarter of
2017, adjusted EBITDA from telecom activities was 3.393 billion
euros, an increase of 2.5% on a comparable basis (+83 million
euros), and the adjusted EBITDA margin for telecom activities was
33.2% (+0.4 percentage points).
The increase in adjusted EBITDA from telecom activities in the
1st half of 2017
(+140 million euros on a comparable basis) was related to revenue
growth (+222 million euros), partially offset by increased
operating costs (-82 million euros). These increased costs included
content and equipment purchased for customers and, to a lesser
extent, increased income tax and operating taxes and decreased
income from the sale of fixed assets. Meanwhile, labour expenses
related to telecom activities decreased 4.0% compared to the
1st half of 2016
on a comparable basis, mainly due to the reduction in the average
number of full-time equivalent employees (-2.7%)[8].
Advertising and promotional expenses were also lower than in the
1st half of
2016, which included the costs of the brand change in Belgium and
Egypt and the Euro 2016 sponsorship.
Operating
income
The Group had operating income of 2.434 billion
euros in the 1st half of
2017. This included 2.462 billion euros of operating income from
telecom activities and a 28 million-euro operating loss from Orange
Bank.
The 293 million-euro increase in operating income compared with the
1st half of 2016
was due to EBITDA growth in the 1st half of 2017
(186 million euros) and to the effect of the recognition in the
1st half 2016
results of a 176 million-euro impairment charge related to Egypt
(including 80 million euros for goodwill and 96 million euros for
fixed assets), partially offset by a 72 million-euro increase in
amortisation and depreciation.
Net
income
The Group had consolidated net income of 830
million euros in the 1st half of
2017, compared with 3.323 billion euros in the 1st half
of 2016. The 2.493 billion-euro decrease related mainly to the
effect of the recognition of net income from discontinued
operations related to the sale of EE in the 1st half
of 2016 for 2.249 billion euros.
Net income from continuing operations declined 244
million euros. Excluding the impact of a charge of 349 million
euros related to the interest held in BT Group[9], net
income from continuing operations improved by 105 million
euros:
-
increased operating income (293 million
euros),
-
and improved cost of gross financial debt (114
million euros) and income from foreign exchange (35 million
euros),
were partially offset by increased
corporate tax (339 million euros[10]).
CAPEX
Group CAPEX was 3.276 billion euros in the
1st half of
2017, an increase of 3.0% on a comparable basis. CAPEX for telecom
activities (3.251 billion euros) rose 2.2%, and the ratio of CAPEX
to revenues from telecom activities was 16.0% (+0.2 percentage
points compared with the 1st half of
2016).
Investments in fibre increased 5% on a comparable basis and mainly
concerned France, Spain and Poland. At 30 June 2017, the number of
households with fibre connectivity was 10.7 million in Spain (+2.4
million year on year), 7.9 million in France (+2.0 million) and
close to 2 million in Poland (+0.9 million).
CAPEX was also strong in very high-speed mobile services, led
mainly by France and the Africa & Middle East segment. 4G
coverage at 30 June 2017 was 92% of the population in France, 93%
in Spain, 99.8% in Poland, 99.6% in Belgium, 87% in Romania, 80.1%
in Slovakia, and 98% in Moldova. In France and Spain, investments
also sought to improve service quality for recreational areas and
in public transportation. 4G+ deployment also continued in France
and in the other European countries.
In the Africa & Middle East segment, 3G has been deployed in
all 21 countries, with 4G available in 11 of them (Botswana,
Cameroon, Côte d'Ivoire, Guinea Bissau, Jordan, Liberia,
Madagascar, Mauritius, Morocco, Senegal and Tunisia). Orange Egypt
is rolling out 4G, after securing a license last October.
Investments in customer equipment also increased, connected to the
development of convergent offers over cable in Belgium.
The store modernisation programme continued: at 30 June 2017, the
Group had 222 stores based on the new Smart Store concept, 83 of
which were in France, 114 in other European countries, and 25 in
Africa and the Middle East.
In the area of Internet of Things (IoT), deployment of the
low-power Orange network (based on LoRa technology) is underway in
France with the objective of achieving national coverage in
metropolitan France by the end of 2017. In addition, Orange is
preparing to test the interconnection of its LoRa network with that
of another European operator by December to supplement the
end-to-end Orange Business Services solution internationally for
targeted coverage in cities, ports and industrial sites.
Investments in information systems and services platforms remained
significant in order to support the transformation and included
information technology development in preparation for the launch of
the Orange Bank offer.
Changes in
portfolio of assets
As of 31 December 2016, Orange had a 4% stake in
BT Group following the sale of EE to BT Group. In line with the
terms of the sale, Orange agreed to hold the shares for a minimum
period of one year ("lock-up"). This lock-up expired in January
2017 and in June 2017, Orange adopted a balanced approach to reduce
the Group's exposure to BT Group while remaining open to a
potential future share price increase through its remaining
interest. This was done with both:
-
the sale of 133 million BT shares, which is
1.33% of the share capital of BT, for the net equivalent amount of
433 million euros at 22 June 2017; and
-
the issue of convertible bonds for 517 million
pounds sterling. These bonds, maturing in four years, were issued
at a reference price of 288 pence per BT share and are accompanied
by an exchange premium of 35%, corresponding to an exchange price
of 389 pence per BT share. They bear interest at 0.375% per year,
which is a negative interest rate after conversion into
euros.
At 30 June 2017, Orange held a 2.67% stake in BT
Group. In the case of exercise in full of the exchange rights
underlying the bonds, Orange would retain a 1.33% stake in BT
Group.
In connection with the above-mentioned transactions, Orange Group
has agreed not to sell additional BT shares up to and including 25
September 2017.
Net financial
debt
Group net financial debt[11] was 24.555
billion euros at 30 June 2017, up 111 million euros from 31
December 2016.
The ratio of "net financial debt to adjusted
EBITDA for telecom activities" was 1.92x at 30 June 2017, compared
with 1.93x at 31 December 2016. This was in line with the objective
of a net debt to adjusted EBITDA ratio for telecom activities of
around 2x in the medium term.
Items related to the change in net financial debt and to the ratio
of net debt to adjusted EBITDA for telecom activities are presented
in appendix 4.
Review by operating
segment
France
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
8,879 |
8,860 |
8,860 |
0.2% |
0.2% |
Adjusted EBITDA |
3,168 |
3,070 |
3,070 |
3.2% |
3.2% |
Adjusted EBITDA / Revenues |
35.7% |
34.6% |
34.6% |
0 |
0 |
Operating Income |
1,610 |
- |
1,480 |
- |
8.8% |
CAPEX |
1,611 |
1,590 |
1,586 |
1.3% |
1.6% |
CAPEX / Revenues |
18.1% |
17.9% |
17.9% |
0 |
0 |
In France, revenues rose 0.5%
in the 2nd quarter of
2017 after a steady performance in the 1st quarter
(-0.1%). In addition to stronger growth in mobile equipment sales
(+13.1% in the 2nd quarter),
the mobile services trend improved, with a lesser decline of 1.1%
in the 2nd quarter of
2017 compared with a decline of 3.3% in the 1st
quarter. This was due to a lower decline of national roaming and a
lesser impact of roaming price reductions in Europe, which came
into effect in April 2016, compared with the 1st
quarter.
The contract customer base[12] (18.3
million at 30 June 2017) continued to rise steadily (+2.6% year on
year), led by convergent offers. SIM cards linked to convergent
offers rose 11.6% in one year, i.e. 8.6 million SIM cards at 30
June 2017. At that date, 67% of consumer contracts included 4G (+15
percentage points year on year) and SIM-only offers represented
72.3% of the consumer contracts (+14 percentage points year on
year).
Fixed services rose 1.1% in the 2nd quarter of
2017 after climbing 1.6% in the 1st quarter.
Fixed broadband services continued to grow steadily (+5.0% in the
2nd quarter
after rising 5.5% in the 1st quarter),
led by increases to both customer base and ARPU.
The fixed broadband customer base reached 11.0 million subscribers
at 30 June 2017 (+3.5% year on year). It included 1.7 million fibre
subscribers, an increase of +43% year on year. The quarterly ARPU
of fixed broadband rose 1.4% in the 2nd quarter of
2017, reflecting in particular the growth of fibre. Consumer
convergent offers (5.7 million customers at 30 June 2017, a
year-on-year increase of 9.3%) represented 57.8% of the consumer
fixed broadband customer base (+2.8 percentage points in one
year).
Fixed services to carriers increased 2.3% in the 2nd quarter of
2017 after rising 5.1% in the 1st quarter, led
by unbundling and wholesale ADSL subscriptions. Traditional
telephony fell 10.1% in the 2nd quarter.
Adjusted EBITDA for France
rose 3.2% in the 1st half of 2017
and the adjusted EBITA margin (35.7%) improved 1.0 percentage point
compared with the 1st half of
2016. In addition to increased revenues, labour expenses were
reduced[13] and
savings were realised in connection with the Explore2020
operational efficiency plan (streamlining of the distribution
network, increasing proportion of digital interactions in customer
relations and optimisation of network-maintenance costs), partially
offset by increased content costs.
CAPEX in France (1.611
billion euros in the 1st half of
2017) rose 1.3% on a comparable basis and the ratio of CAPEX to
revenues was 18.1% (+0.2 percentage points compared with the
1st half of
2016), led by investments in very high-speed broadband (fibre and
4G). Orange France had a total of 7.9 million households with
connectivity at 30 June 2017 (+2.0 million households in one year).
In parallel, heavy investment in very high-speed mobile continued:
the 4G coverage rate reached 92% of the population at 30 June 2017
(+10 percentage points year on year), and 45% of the 4G sites were
equipped with 4G+ at that date.
Europe
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
5,405 |
5,162 |
5,128 |
4.7% |
5.4% |
Adjusted EBITDA |
1,548 |
1,451 |
1,438 |
6.8% |
7.7% |
Adjusted EBITDA / Revenues |
28.7% |
28.1% |
28.1% |
0 |
0 |
Operating Income |
479 |
- |
275 |
- |
73.6% |
CAPEX |
906 |
917 |
913 |
(1.2)% |
(0.7)% |
CAPEX / Revenues |
16.8% |
17.8% |
17.8% |
0 |
0 |
Revenues in the Europe
segment grew 4.9% in the 2nd quarter of
2017 after rising 4.5% in the 1st quarter on a
comparable basis. The progress between the two quarters was related
to both mobile services and fixed services, while revenue growth
also continued to be strong in mobile equipment sales (+17.6% in
the 2nd quarter
after rising 21.2% in the 1st
quarter).
Mobile services rose 2.7% in the 2nd quarter of
2017 after rising 2.0% in the 1st quarter on a
comparable basis. Commercial activity in contracts was very strong,
with 399,000 net additions in the 2nd quarter of
2017. The contract customer base had 33.9 million customers at 30
June 2017, an increase of 5.7% year on year, representing 69% of
the total mobile customer base at that date (+6.1 percentage points
year on year).
Fixed broadband services increased 8.9% in the 2nd
quarter of 2017 after rising 8.4% in the 1st quarter (on
a comparable basis) with the rapid growth of fibre in Spain, the
development of convergent offers recently marketed in Belgium, and
the trend improvement in Poland. The fixed broadband customer base
in the Europe segment had 6.9 million customers at 30 June 2017, an
increase of 9.2% year on year.
Consumer convergent offers in the Europe segment accounted for
164,000 net additions in the 2nd quarter of
2017, led by Poland, Spain, Belgium and Romania. At 30 June 2017,
the consumer convergent offers base in the Europe segment had 4.1
million customers, with year-on-year growth of 14.8%.
Adjusted EBITDA for the
Europe segment increased 6.8% in the 1st half of 2017
on a comparable basis, and the adjusted EBITDA margin was 28.7%
(+0.6 percentage points compared with the 1st half
of 2016). The rise in revenues was partially offset by an increase
in external purchases, including content costs, commercial
expenses, and interconnection and connectivity costs.
CAPEX in the Europe segment
was 906 million euros in the 1st half of
2017, similar to that of the 1st half of 2016
(917 million euros on a comparable basis). In particular,
investments continued to be strong in fibre and in 4G and 4G+
mobile services. The ratio of CAPEX to revenues was 16.8% in the
1st half of
2017, down 1.0 percentage point compared with the 1st half of
2016.
Spain
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
2,628 |
2,418 |
2,418 |
8.7% |
8.7% |
Adjusted EBITDA |
722 |
627 |
625 |
15.3% |
15.5% |
Adjusted EBITDA / Revenues |
27.5% |
25.9% |
25.9% |
0 |
0 |
Operating Income |
230 |
- |
30 |
- |
n.s. |
CAPEX |
538 |
547 |
547 |
(1.5)% |
(1.5)% |
CAPEX / Revenues |
20.5% |
22.6% |
22.6% |
0 |
0 |
Revenue growth in Spain
continued to be strong (+8.8% in the 2nd quarter of
2017 after rising 8.5% in the 1st quarter),
led by consumer convergence, from which revenues rose 13.4% in the
2nd quarter
after climbing 12.1% in the 1st quarter.
Consumer convergent offers had a total of 3.1 million customers at
30 June 2017, a year-on-year increase of 5.2%, representing 82.5%
of the consumer fixed broadband customer base at that date (+1.3
percentage points in one year).
Mobile services increased 7.5% in the 2nd quarter of
2017 after climbing 8.1% in the 1st quarter.
They benefitted from the continuous enrichment of offers and from
4G deployment, which had a total of 8.7 million customers at 30
June 2017 (+35% year on year). The contract customer base grew 4.7%
year on year (12.798 million customers at 30 June 2017), and
quarterly contract ARPU was up 4.3%. Growth in mobile services to
other carriers was also significant with the increased revenues
from visitor roaming, MVNOs and network sharing.
Fixed services rose 9.5% in the 2nd quarter of
2017 after climbing 7.5% in the 1st
quarter. Revenue growth continued to be quite strong in fixed
broadband (+8.3% in the 2nd quarter of
2017 after rising 8.5% in the 1st quarter of
2017). Fixed broadband had a total of 4.2 million customers at 30
June 2017 (+4.4% year on year), and quarterly ARPU increased 3.5%.
Fibre in particular rose sharply: with 1.9 million customers at 30
June 2017 (+60% in one year), representing 46.6% of the fixed
broadband customer base at that date (+16.2 percentage points year
on year). TV services also grew rapidly, with 541,000 customers at
30 June 2017 (+42.2% year on year), led by content offers.
Adjusted EBITDA from Spain
rose 15.3% in the 1st half of 2017
on a comparable basis, and the adjusted EBITDA margin (27.5%)
improved 1.6 percentage points compared with the 1st half of
2016. The revenue growth was partially offset by increased
commercial expenses, content purchases, and network and
interconnection costs.
CAPEX in Spain was 538
million euros in the 1st half of 2017
on a comparable basis, and the ratio of CAPEX to revenues was
20.5%. Significant investment in fibre continued. At 30 June 2017,
10.7 million households had fibre connectivity, an increase of 2.4
million in one year. As a result of this strong progress, Orange is
now the number two network for fixed services in Spain. On the
mobile network, increased capital expenditure on 4G significantly
improved network coverage, which reached 93% of the population at
30 June 2017 (+4.3 percentage points in one year).
Poland
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
1,325 |
1,337 |
1,306 |
(0.9)% |
1.4% |
Adjusted EBITDA |
367 |
396 |
387 |
(7.4)% |
(5.2)% |
Adjusted EBITDA / Revenues |
27.7% |
29.6% |
29.6% |
0 |
0 |
Operating Income |
64 |
- |
81 |
- |
(21.9)% |
CAPEX |
192 |
198 |
194 |
(3.3)% |
(1.1)% |
CAPEX / Revenues |
14.5% |
14.8% |
14.8% |
0 |
0 |
Revenues in Poland fell 2.2%
in the 2nd quarter of
2017 on a comparable basis, following a 0.5% revenue increase in
the 1st quarter that
reflected very strong growth in mobile equipment sales. The growth
of consumer convergent offers accelerated, with 120,000 net
additions in the 2nd quarter of
2017 after recording 72,000 in the 1st quarter.
There was a total of 858,000 consumer convergent offers in Poland
at 30 June 2017, a year-on-year increase of 51.1%. The launch of
Orange Love convergent offers five months ago has already proved a
success, with more than 200,000 subscriptions at 30 June
2017.
The mobile services trend improved 0.6 percentage points in the
2nd quarter of
2017 (a 6.0% decline, following the 6.6% decline in the
1st quarter on a
comparable basis). However, they continued to be impacted by the
development of offers with instalment payment plans and SIM-only
offers. The contract customer base recorded 121,000 net additions
in the 2nd quarter and
had 9.6 million customers at 30 June 2017, with year-on-year growth
of 10.1% on a comparable basis, and 4G had a total of 5.2 million
users at 30 June 2017 (1.6x year on year). In addition, the prepaid
customer base recorded a net loss of 2.9 million customers year on
year (-37.0% on a comparable basis), impacted by migration to
contracts and to the mandatory registration of customers'
identities since July 2016, with however, a limited impact on the
revenue trend.
The improvement in the fixed services trend (-4.3% in the
2nd quarter of
2017 after declining 5.4% in the 1st quarter on a
comparable basis) reflected the change in fixed broadband, where
revenues rose 2.2% in the 2nd quarter of
2017 after rising 1.3% in the 1st quarter. The
fixed broadband customer base (2.3 million customers at 30 June
2017) increased 9.7% year on year on a comparable basis, led by the
rapid development of fixed 4G, fibre and VDSL. At 30 June 2017,
very high-speed offers had 588,000 customers (+50.0% year on year
on a comparable basis), including 145,000 fibre subscribers.
Meanwhile, the downward trend in revenues from traditional
telephony continued into the 2nd quarter of
2017 (-13.1%), and carrier services fell 7.3%.
Adjusted EBITDA from Poland
declined 7.4% in the 1st half of 2017
on a comparable basis, with an adjusted EBITDA margin of 27.7%,
down 1.9 percentage points. The decreased revenues and increased
interconnection costs were partially offset by the significant
reduction of commercial expenses (mobile handset purchases,
distribution, advertising and promotions) as well as the increased
revenues from the sale of fixed assets (in connection with the plan
to optimise property assets).
CAPEX in Poland was 192
million euros in the 1st half of
2017, a year-on-year decrease of 3.3% on a comparable basis.
Investments in customer equipment and information technology were
optimised to preserve the investments needed for fibre and 4G
networks. At 30 June 2017, nearly 2.0 million households had fibre
connectivity (2.0x in one year) and 4G covered 99.8% of the
population.
Belgium & Luxembourg
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
617 |
609 |
609 |
1.4% |
1.4% |
Adjusted EBITDA |
157 |
145 |
145 |
8.4% |
8.4% |
Adjusted EBITDA / Revenues |
25.5% |
23.8% |
23.8% |
0 |
0 |
Operating Income |
44 |
- |
47 |
- |
(6.5)% |
CAPEX |
77 |
62 |
62 |
24.3% |
24.3% |
CAPEX / Revenues |
12.5% |
10.2% |
10.2% |
0 |
0 |
Revenues from Belgium &
Luxembourg rose 3.5% in the 2nd quarter of
2017 after falling 0.7% in the 1st quarter.
Growth in the 2nd quarter
benefitted from the recovery of mobile equipment sales and the
favourable impact on revenues from MVNOs[14]. Added to
this was the higher level of net mobile contract sales and the
development of convergence.
Mobile services rose 3.5% in the 2nd quarter of
2017 after declining 0.4% in the 1st quarter.
Excluding the favourable impact on revenues from MVNOs, the mobile
services trend improved. In particular, contract net
additions[15] in Belgium
were significantly higher in the 2nd quarter
(21,000) than in the 1st quarter
(3,000) and the quarterly customer ARPU rose 1.0%, driven by 4G
data services.
The contract customer base15 in Belgium
& Luxembourg (2.372 million customers at 30 June 2017) grew
1.8% year on year.
Fixed services increased 15.7% in the 2nd quarter of
2017 after rising 14.3% in the 1st quarter, led
by the new Love convergent offers (mobile and Internet + TV), which
already had a total of 64,000 customers at 30 June 2017. This
commercial success confirms Orange Belgium's successful
introduction as an alternative convergent player on the Belgian
market.
Adjusted EBITDA from Belgium
& Luxembourg increased 8.4% in the 1st half of
2017. In addition to revenue growth, commercial expenses (purchases
of mobile handsets, advertising expenses and commissions) and
interconnection costs decreased. These changes were partially
offset by increased connectivity costs (access to the cable
network) related to the launch of convergent offers.
CAPEX in Belgium &
Luxembourg was 77 million euros in the 1st half of
2017. The 15 million-euro increase compared with the 1st half of 2016
reflected the development of fixed broadband services (IT and
customer equipment) related to the deployment of convergent offers
on cable. Meanwhile, investments in 4G+ continued to be high. At 30
June 2017, 4G covered 99.6% of the population in Belgium and 4G+
covered 57%.
Central European
countries
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
843 |
801 |
798 |
5.2% |
5.6% |
Adjusted EBITDA |
302 |
283 |
281 |
7.0% |
7.6% |
Adjusted EBITDA / Revenues |
35.9% |
35.3% |
35.2% |
0 |
0 |
Operating Income |
141 |
- |
117 |
- |
20.6% |
CAPEX |
99 |
110 |
110 |
(10.4)% |
(10.1)% |
CAPEX / Revenues |
11.7% |
13.8% |
13.8% |
0 |
0 |
Revenues from the Central
European countries rose 7.1% in the 2nd quarter of
2017 after rising 3.2% in the 1st quarter on a
comparable basis. In addition to stronger growth in mobile
equipment sales, the mobile services and fixed services trend
improved.
In Romania, revenues grew 11.0% in the 2nd quarter of
2017 after rising 4.6% in the 1st quarter, led
by stronger mobile equipment sales and the improved trend in fixed
and mobile services. TV services had 351,000 customers at 30 June
2017, an increase of 15.3% year on year, while fixed broadband
services had 124,000 customers at 30 June 2017.
In Slovakia, revenues were stable in the 2nd quarter of
2017 (+0.1%) after declining 1.0% in the 1st quarter. The
trend improvement was driven by fixed and mobile services, while
growth continued to be strong in mobile equipment sales. Fixed
broadband had 168,000 customers at 30 June 2017.
In Moldova, revenues rose 4.4% in the 2nd quarter of
2017 after rising 5.6% in the 1st quarter. The
growth of mobile equipment sales and of fixed broadband services
was partially offset by decreased mobile services due to the
continued decline in international traffic. Orange Moldova TV
services had 98,000 customers at 30 June 2017, while fixed
broadband had 45,000 customers at that date.
The Central European countries had 14.7 million mobile customers at
30 June 2017, with contract customers (8.2 million) representing
55.9% of the mobile customer base at that date. The 4G mobile base
(3.9 million customers) was up sharply (1.6x year on year).
The fixed broadband customer base in Central
European Countries had a total of 337,000 customers at 30 June
2017. Consumer convergent offers (Romania and Slovakia) had a total
of 82,000 customers at that date.
Adjusted EBITDA from the
Central European countries rose 7.0% in the 1st half
of 2017 on a comparable basis, and the adjusted EBITDA margin rate
improved by 0.6 percentage points compared with the 1st half of
2016. The revenue growth was partly offset by increased
interconnection costs and commercial expenses (purchases of mobile
handsets).
CAPEX in the Central European
countries was 99 million euros in the 1st half of
2017. The higher CAPEX in the 1st half of 2016
was related to the implementation of a network sharing contract
with Vodafone and the replacement of the urban network in Romania.
4G is being deployed in the three countries, enabling a significant
improvement in the rate of population covered, with 87% in Romania,
80.1% in Slovakia and 98% in Moldova at 30 June 2017.
Africa & Middle East
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
2,491 |
2,449 |
2,516 |
1.7% |
(1.0)% |
Adjusted EBITDA |
764 |
757 |
828 |
0.9% |
(7.7)% |
Adjusted EBITDA / Revenues |
30.7% |
30.9% |
32.9% |
0 |
0 |
Operating Income |
329 |
- |
147 |
- |
124.6% |
CAPEX |
428 |
367 |
359 |
16.5% |
19.3% |
CAPEX / Revenues |
17.2% |
15.0% |
14.3% |
0 |
0 |
Revenues from the Africa
& Middle East segment returned to solid growth in the
2nd quarter of
2017 (+2.7% on a comparable basis) after slowing in the
1st quarter
(+0.7%). In the 2nd quarter,
revenue growth was generated by the Côte d'Ivoire group[16] (in
particular Burkina Faso and Côte d'Ivoire), the Sonatel
group[17]
(principally Mali and Guinea) and the improvement in Morocco, while
the revenue trend in the Democratic Republic of Congo, impacted by
an unfavourable environment for several quarters, gradually
improved.
Mobile data services continued to climb sharply, rising 33% in the
2nd quarter of
2017, while revenues from Orange Money grew 65%. Orange Money had
32.4 million customers at 30 June 2017, including 10.0 million
active customers. 4G is available in 11 countries: Botswana,
Cameroon, Côte d'Ivoire, Guinea Bissau, Jordan, Liberia,
Madagascar, Mauritius, Morocco, Senegal and Tunisia. Orange Egypt
is rolling out 4G following the acquisition of a licence last
October.
In the Africa & Middle East segment, the mobile customer base
had 127.2 million customers at 30 June 2017, a year-on-year
increase of 5.7% on a comparable basis (+6.9 million customers).
The 2nd quarter of
2017 saw 3.9 million net additions, led in particular by the
Sonatel group, the Côte d'Ivoire group, Morocco, and the Democratic
Republic of Congo. This confirms the recovery recorded in the
1st quarter 2017
(+2.7 million net additions), following a year in which customer
bases were impacted by the strengthened requirement for
verification of customers' identities.
Adjusted EBITDA for the
Africa & Middle East segment grew 0.9% in the 1st half of 2017
on a comparable basis, while the adjusted EBITDA margin (30.7%) was
almost stable compared to the 1st half of 2016
(30.9%). Revenue growth as well as reduced service fees and
inter-operator costs were partially offset by higher commercial
expenses and tax increases in certain countries.
CAPEX in the Africa &
Middle East segment was 428 million euros in the 1st half of
2017, an increase of 16.5% on a comparable basis related to the
deployment of 4G, with 2,000 new sites opened during the half year,
particularly in Egypt, Morocco, Côte d'Ivoire and Cameroon. The
ratio of CAPEX to revenues (17.2% in the 1st half of
2017) rose 2.2 percentage points on a comparable basis.
Enterprise
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
3,615 |
3,675 |
3,666 |
(1.6)% |
(1.4)% |
Adjusted EBITDA |
629 |
661 |
660 |
(4.9)% |
(4.7)% |
Adjusted EBITDA / Revenues |
17.4% |
18.0% |
18.0% |
0 |
0 |
Operating Income |
431 |
- |
503 |
- |
(14.3)% |
CAPEX |
179 |
169 |
168 |
5.7% |
6.2% |
CAPEX / Revenues |
4.9% |
4.6% |
4.6% |
0 |
0 |
Revenues from the Enterprise
segment fell 1.3% in the 2nd quarter of
2017 after declining 2.0% in the 1st quarter on a
comparable basis. The trend improvement in the 2nd
quarter related to IT and integration services, voice services and
mobile.
IT and integration services grew 3.3% in the 2nd
quarter of 2017 after rising 2.6% in the 1st quarter, led
by the strong growth of security services (+27%) and Cloud services
(+15%).
The voice services trend improved 2.6 percentage points in the
2nd quarter of
2017 (-3.8% after falling 6.4% in the 1st quarter),
reflecting the more favourable trend in voice-over-IP services and
customer relationship services (contact number services), while
traditional fixed telephony continued its downward trend (-8.5% in
the 2nd quarter of
2017).
Mobile services and equipment sales were nearly flat in the
2nd quarter of
2017 (-0.2%) after declining 2.7% in the 1st quarter of
2017. The trend improvement in the 2nd quarter was
related to both mobile services and equipment sales.
Data services recorded a 3.5% decrease in the 2nd
quarter of 2017, after declining 2.6% in the 1st
quarter in connection with the non-renewal of certain contracts
(connectivity and broadcasting). There were 353,000 IPVPN
subscribers at 30 June 2017 (+1.1% year on year).
Adjusted EBITDA for the
Enterprise segment fell 4.9% in the 1st half of 2017
on a comparable basis, while the adjusted EBITDA margin (17.4%)
declined 0.6 percentage points compared with the 1st half of
2016. The downturn in revenues was partly offset by the reduction
of external purchases and of labour expenses.
CAPEX in the Enterprise
segment was 179 million euros in the 1st half of
2017, an increase of 5.7% on a comparable basis, in line with the
development of new IT services.
International Carriers &
Shared Services
|
|
In millions
of euros |
period ended 30 June |
|
2017 |
2016 |
2016 |
17/16 |
17/16 |
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
|
|
|
|
|
|
Revenues |
819 |
903 |
904 |
(9.3)% |
(9.4)% |
Adjusted EBITDA |
(104) |
(74) |
(83) |
|
|
Adjusted EBITDA / Revenues |
(12.8)% |
(8.1)% |
(9.3)% |
0 |
0 |
Operating Income |
(387) |
- |
(264) |
- |
(46.0)% |
CAPEX |
127 |
138 |
141 |
(7.0)% |
(10.2)% |
CAPEX / Revenues |
15.6% |
15.2% |
15.7% |
0 |
0 |
Revenues from the
International Carriers & Shared Services segment fell 9.3% in
the 1st half of 2017
on a comparable basis, mostly in connection with the downturn in
services to international carriers. Added to this was a decrease in
revenues from the Viaccess subsidiary, which had benefitted in the
1st half of 2016
from the programme to replace TV decoder boards.
Adjusted EBITDA fell to -104
million euros in the 1st half of
2017, down from -74 million euros in the 1st half of 2016
on a comparable basis. The 31 million-euro decrease in adjusted
EBITDA between the two half-year periods was linked to reduced
income from the sale of fixed assets, partially offset by reduced
brand investments, with Euro 2016 sponsorship expenses and the
brand change in Belgium and Egypt having been recorded in the
1st half of
2016.
CAPEX was 127 million euros
in the 1st half of
2017, a reduction of 11 million euros on a comparable basis linked
to the higher level of property investment in 2016, in particular
with the completion of the Orange Gardens eco-campus for
innovation.
Orange Bank
Orange Bank's contribution to the Group's
adjusted EBITDA was -27 million euros in the
1st half of
2017. This total includes principally net banking income (NBI) of
38 million euros, the cost of risk of -3 million euros, and general
operating expenses.
Orange Bank had an operating
loss of 28 million euros in the 1st half of
2017.
CAPEX for Orange Bank (25
million euros in the 1st half of
2017) is related to preparations for the commercial launch of the
business, planned for the 2nd half of
2017.
Schedule of upcoming
events
26 October 2017: third-quarter 2017 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 communications: +33 1 44 44 04 32
(analysts and investors)
Patrice Lambert-de Diesbach
p.lambert@orange.com
Constance Gest
constance.gest@orange.com
Luca Gaballo
luca.gaballo@orange.com
Anna Vanova
anna.vanova@orange.com
Samuel Castelo
samuel.castelo@orange.com
Didier Kohn
didier.kohn@orange.com |
All press releases are available
on the following websites:
www.orange.com; www.orange.es; www.orange-ir.pl;
www.orange.be; www.orange-business.com
Disclaimer
This press release contains forward-looking
statements about Orange. 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. Important factors that could cause
actual results to differ from the results anticipated in the
forward-looking statements include, among others: the success of
Orange's strategy, particularly its ability to maintain control
over customer relations when facing competition with OTT players,
risks related to banking activities, loss or disclosure to third
parties of customers data, Orange's ability to withstand intense
competition in mature markets, networks or software failures due to
cyberattacks, damage to networks caused by natural disasters,
terrorist acts or other reasons, various frauds affecting Orange or
its clients, Orange's ability to retain the neccessary skills given
the high level of employee retirements and the development of new
needs, difficulties in integrating newly acquired businesses as
part of the telecommunication sector's consolidation in Europe, its
ability to capture growth opportunities in emerging markets and the
risks specific to those markets, possible adverse health effects
associated with the use of telecommunications equipment, risks
related to the single brand strategy, the eruption of a global
financial or economic crisis, fiscal and regulatory constraints and
changes, the results of litigation regarding regulations,
competition and other matters, disagreements with its
co-shareholders in companies that Orange does not control, the
terms of access to capital markets, interest rate or exchange rate
fluctuations, Orange's credit ratings, changes in assumptions
underlying the accounting value of certain assets resulting in
their impairment, and credit risks or counterparty risks on
financial transactions. More detailed information on the potential
risks that could affect our financial results is included in the
Registration Document filed on April 6, 2017 with the French
Autorité des Marchés Financiers (AMF) and in the annual report on
Form 20-F filed on April 7, 2017 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: consolidated income statement
(in
millions of euros, except for per share data) |
June 30, 2017 |
June 30, 2016 |
Revenues |
20,276 |
20,079 |
External
purchases |
(8,967) |
(8,818) |
Other operating
income |
368 |
370 |
Other operating
expense |
(349) |
(234) |
Labour expenses |
(4,229) |
(4,404) |
Operating taxes and
levies |
(1,239) |
(1,128) |
Gains (losses) on
disposal of investments and activities |
(6) |
67 |
Restructuring and
integration costs |
(76) |
(340) |
Depreciation and
amortization |
(3,351) |
(3,279) |
Impairment of
goodwill |
- |
(80) |
Impairment of fixed
assets |
4 |
(92) |
Share of profits
(losses) of associates and joint ventures |
3 |
- |
Operating income |
2,434 |
2,141 |
Cost of gross
financial debt |
(618) |
(732) |
Gains (losses) on
assets contributing to net financial debt |
7 |
13 |
Foreign exchange gains
(losses) |
(60) |
(95) |
Other net financial
expenses |
(8) |
(16) |
Effects resulting from
BT stake |
(349) |
- |
Finance costs, net |
(1,028) |
(830) |
Income
tax |
(576) |
(237) |
Consolidated net income of continuing operations |
830 |
1,074 |
Consolidated net income of discontinued operations
(EE) |
- |
2,249 |
Consolidated net income |
830 |
3,323 |
Net income
attributable to owners of the parent company |
682 |
3,168 |
Non-controlling interests |
148 |
155 |
Earnings per share (in euros)
attributable to parent company |
|
|
Net income of continuing operations |
|
|
|
· |
basic |
0.20 |
0.29 |
|
· |
diluted |
0.20 |
0.29 |
Net income of discontinued operations |
|
|
|
· |
basic |
- |
0.85 |
|
· |
diluted |
- |
0.83 |
Net income |
|
|
|
· |
basic |
0.20 |
1.14 |
|
· |
diluted |
0.20 |
1.12 |
|
|
|
|
|
0 |
Appendix 2: consolidated statement of financial position
(in
millions of euros) |
June 30, 2017 |
Dec. 31, 2016 |
Assets |
|
|
Goodwill |
27,123 |
27,156 |
Other
Intangible assets |
14,481 |
14,602 |
Property, plant and equipment |
26,115 |
25,912 |
Interests in associates and joint ventures |
133 |
130 |
Non-current loans and advances of Orange Bank |
1,030 |
1,025 |
Non-current financial assets |
3,299 |
3,882 |
Non-current derivatives assets |
507 |
915 |
Other
non-current assets |
108 |
106 |
Deferred tax assets |
2,066 |
2,116 |
Total non-current assets |
74,862 |
75,844 |
Inventories |
772 |
819 |
Trade
receivables |
4,999 |
4,964 |
Current loans and advances of Orange Bank |
1,638 |
2,066 |
Current financial assets |
1,934 |
1,862 |
Current derivatives assets |
26 |
57 |
Other
current assets |
1,043 |
1,073 |
Operating taxes and levies receivables |
836 |
918 |
Current tax assets |
87 |
170 |
Prepaid expenses |
786 |
540 |
Cash
and cash equivalent |
6,807 |
6,355 |
Total current assets |
18,928 |
18,824 |
Total assets |
93,790 |
94,668 |
EQUITY AND LIABILITIES |
|
|
Share
capital |
10,640 |
10,640 |
Share
premiums and statutory reserve |
16,859 |
16,859 |
Subordinated notes |
5,803 |
5,803 |
Retained earnings |
(3,106) |
(2,614) |
Equity attributable to the owners of the
parent |
30,196 |
30,688 |
Non-controlling interest |
2,405 |
2,486 |
Total equity |
32,601 |
33,174 |
Non-current financial liabilities |
28,362 |
28,909 |
Non-current derivatives liabilities |
745 |
578 |
Non-current fixed assets payable |
911 |
907 |
Non-current debts related to Orange Bank activities |
512 |
518 |
Non-current employee benefits |
2,789 |
3,029 |
Non-current provisions for dismantling |
762 |
716 |
Non-current restructuring provisions |
239 |
185 |
Other
non-current liabilities |
571 |
608 |
Deferred tax liabilities |
631 |
658 |
Total non-current liabilities |
35,522 |
36,108 |
Current financial liabilities |
4,936 |
4,759 |
Current derivatives liabilities |
38 |
50 |
Current fixed assets payable |
2,541 |
2,800 |
Trade
payables |
6,252 |
6,211 |
Current debts related to Orange Bank activities |
3,691 |
3,846 |
Current employee benefits |
2,203 |
2,266 |
Current provisions for dismantling |
12 |
21 |
Current restructuring provisions |
121 |
190 |
Other
current liabilities |
1,717 |
1,530 |
Operating taxes and levies payables |
1,566 |
1,241 |
Current tax payables |
472 |
338 |
Deferred income |
2,118 |
2,134 |
Total current liabilities |
25,667 |
25,386 |
Total equity and liabilities |
93,790 |
94,668 |
|
Appendix 3: consolidated statement of cash flows
(in
millions of euros) |
June 30, 2017 |
June 30, 2016 |
Operating activities |
|
|
Consolidated net income |
830 |
3,323 |
Adjustments to reconcile net income (loss) to funds generated from
operations |
5,935 |
3,016 |
Changes in working capital (1) |
(7) |
(576) |
Other
net cash out |
(2,006) |
(1,907) |
Net cash provided by operating activities
(a) |
4,752 |
3,856 |
o/w discontinued operations (EE) |
- |
202 |
Investing activities |
|
|
Purchases (sales) of property, plant and equipment and intangible
assets |
(3,559) |
(4,323) |
Cash
paid for investment securities, net of cash acquired |
(7) |
(852) |
Investments in associates and joint ventures |
- |
(11) |
Other
purchases of assets available for sale |
(21) |
(7) |
Purchases of equity securities measured at fair value |
(7) |
(1) |
Proceeds from sale of EE |
- |
4,493 |
Proceeds from sale of BT |
433 |
- |
Other
proceeds from sales of investment securities, net of cash
transferred |
6 |
72 |
Decrease (increase) in securities and other financial assets |
(123) |
(92) |
Net cash used in investing activities
(b) |
(3,278) |
(721) |
o/w discontinued operations (EE) |
- |
4,493 |
|
|
|
Financing activities |
|
|
Long-term debt issuances |
2,253 |
756 |
Long-term debt redemptions and repayments |
(2,048) |
(1,038) |
Increase (decrease) of bank overdrafts and short-term borrowings
|
710 |
666 |
Decrease (increase) of cash collateral deposits |
(437) |
(759) |
Exchange rates effects on derivatives, net |
(23) |
7 |
Coupon
on subordinated notes issuance |
(179) |
(188) |
Proceeds (purchases) from treasury shares |
(18) |
(6) |
Employees shareholding plans |
- |
(34) |
Capital increase (decrease) - owners of the parent company |
- |
113 |
Capital increase (decrease) - non-controlling interests |
26 |
(43) |
Changes in ownership interests with no gain / loss of control |
4 |
(10) |
Dividends paid to owners of the parent company |
(1,064) |
(1,064) |
Dividends paid to non-controlling interests |
(203) |
(195) |
Net cash used in financing activities (c) |
(979) |
(1,795) |
o/w discontinued operations (EE) |
- |
(220) |
Cash change in cash and cash equivalents (a) + (b) + (c) |
495 |
1,340 |
|
|
|
Net change in cash and cash equivalents |
|
|
Cash and cash equivalents - opening
balance |
6,355 |
4,469 |
Cash
change in cash and cash equivalents |
495 |
1,340 |
Non-cash change in cash and cash equivalents (2) |
(43) |
8 |
Cash and cash equivalents - closing
balance |
6,807 |
5,817 |
|
|
|
|
-
Excluding operating tax receivables and
payables. The variation is mainly due to the settlement of the
competition dispute concerning the Enterprises segment for (350)
million euros in 2016.
-
Mainly non-cash varations in the exchange rate
on cash and cash equivalents.
|
Appendix 4: change in net financial debt for the 1st half
of 2017
(in
millions of euros, on an historical basis) |
June 30, 2017 |
December 31, 2016 |
|
Adjusted EBITDA- CAPEX from telecom activities |
2,754 |
5,738 |
|
Change in CAPEX
vendors |
(218) |
305 |
(1) |
Change in working
capital requirements |
(299) |
(428) |
(2) |
Licences and
spectrum |
(161) |
(1,800) |
|
Interest paid and
interest rate effects on derivatives, net (net of dividends
received) |
(732) |
(1,109) |
|
Income taxes cash
out |
(391) |
(906) |
|
Other operational
items |
4 |
(1,146) |
(3) |
Dividends paid to
owners of parent company |
(1,064) |
(1,596) |
(4) |
Dividends paid to
non-controlling interests |
(203) |
(259) |
|
Coupons on
subordinated notes |
(179) |
(291) |
|
Purchase/Disposal of
own shares |
(18) |
6 |
|
Net of acquisitions
and disposals |
409 |
3,290 |
(5) |
Other financial
items |
(13) |
304 |
(6) |
Variation in net debt |
(111) |
2,108 |
|
Net financial debt* |
(24,555) |
(24,444) |
|
Ratio of net financial debt / Adjusted EBITDA** |
1.92x |
1.93x |
|
-
The change in CAPEX vendors reflects the Group's
investment cycle and changes in investment levels from one period
to the next.
-
The change in working capital requirement
reflects changes in the operating cycle from one period to the
next. In 2016, it included in particular the unfavourable impact of
the fine paid to the Competition Authority in France for the
Enterprise market (350 million euros).
-
Other operational items include disbursements
for the Part Time for Seniors Plan and for restructuring, receipt
of payments related to asset sales, and other operational items
such as the change in operational tax debt.
-
In 2017: balance of 2016 dividend paid on 14
June 2017 (0.40 euros per share). In 2016: balance of 2015 dividend
paid on 23 June 2016 (0.40 euros per share) and payment of the 2016
interim dividend (0.20 euros per share paid on 7 December
2016).
-
In 2017: sale of 1.33% of the share capital of
BT Group for 433 million euros. In 2016: sale of Orange's
interest in EE, acquisition of 100% of Cellcom in Liberia, of Tigo
in the Democratic Republic of the Congo, and of Airtel in Burkina
Faso and in Sierra Leone.
-
In 2016, other financial items correspond mainly
to: the impact of financial hedges for the Group's exposure in
pounds sterling; the impact of foreign exchange related to net
financial debt in Egyptian pounds; the capital increase of Orange
SA in connection with the Orange Ambition 2016 employee
shareholding offer; and the net impact of the acquisition of a
majority interest in Groupama banque (now Orange Bank).
* Net financial debt as defined and used by Orange
does not include the activities of Orange Bank, to which this
concept does not apply.
**
The ratio of net financial debt to adjusted EBITDA from the telecom
activities is calculated based on the ratio of the Group's net
financial debt to adjusted EBITDA from the telecom activities
calculated for the 12 previous months.
Appendix 5: analysis of adjusted consolidated EBITDA
|
|
|
|
|
2017 |
2016 |
change |
|
|
|
comparable basis |
comparable basis |
In millions of euros |
|
|
(in %) |
|
|
|
|
|
1st
half |
|
|
|
Revenues |
20,276 |
20,054 |
1.1% |
External
purchases |
(8,967) |
(8,842) |
1.4% |
as % of
revenues |
44.2% |
44.1% |
0.1
pt |
of
which: |
|
|
|
|
Interconnection
costs |
(2,641) |
(2,675) |
(1.3)% |
|
as % of revenues |
13.0% |
13.3% |
(0.3)
pt |
|
Other network and IT
expenses |
(1,543) |
(1,505) |
2.5% |
|
as % of revenues |
7.6% |
7.5% |
0.1
pt |
|
Property, overheads,
other expenses and capitalised costs |
(1,533) |
(1,532) |
0.1% |
|
as % of revenues |
7.6% |
7.6% |
(0.1)
pt |
|
Commercial expenses
and content costs |
(3,250) |
(3,131) |
3.8% |
|
as % of
revenues |
16.0% |
15.6% |
0.4 pt |
Labour
expenses |
(4,171) |
(4,338) |
(3.9)% |
as % of
revenues |
20.6% |
21.6% |
(1.1)
pt |
Operating
taxes and levies |
(1,244) |
(1,222) |
1.8% |
Other
operating income and expenses |
84 |
198 |
- |
Adjusted EBITDA* |
5,978 |
5,848 |
2.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
2016 |
change |
|
|
|
comparable basis |
comparable basis |
In millions of euros |
|
|
(in %) |
|
|
|
|
|
2nd
quarter |
|
|
|
Revenues |
10,206 |
10,068 |
1.4% |
External
purchases |
(4,509) |
(4,463) |
1.0% |
as % of
revenues |
44.2% |
44.3% |
(0.1)
pt |
of
which: |
|
|
|
|
Interconnection
costs |
(1,327) |
(1,345) |
(1.4)% |
|
as % of revenues |
13.0% |
13.4% |
(0.4)
pt |
|
Other network and IT
expenses |
(770) |
(750) |
2.6% |
|
as % of revenues |
7.5% |
7.5% |
0.1
pt |
|
Property, overheads,
other expenses and capitalized costs |
(758) |
(781) |
(2.9)% |
|
as % of revenues |
7.4% |
7.8% |
(0.3)
pt |
|
Commercial expenses
and content costs |
(1,654) |
(1,587) |
4.3% |
|
as % of
revenues |
16.2% |
15.8% |
0.4 pt |
Labour
expenses |
(2,065) |
(2,118) |
(2.5)% |
as % of
revenues |
20.2% |
21.0% |
(0.8)
pt |
Operating
taxes and levies |
(318) |
(296) |
7.5% |
Other
operating income and expenses |
65 |
108 |
- |
Adjusted EBITDA* |
3,380 |
3,300 |
2.4% |
|
|
|
|
|
|
|
|
|
|
* Adjustments to the presentation of EBITDA are
described in appendix 6.
Appendix 6: adjusted data to consolidated income statement
2017 data |
2nd
quarter |
|
June 30 |
In millions of euros |
Adjusted
data |
Presentation adjustments |
Income
statement |
|
Adjusted
data |
Presentation adjustments |
Income
statement |
Revenues |
10,206 |
|
10,206 |
|
20,276 |
|
20,276 |
External
purchases |
(4,509) |
- |
(4,509) |
|
(8,967) |
- |
(8,967) |
Other operating
income |
206 |
5 |
211 |
|
353 |
15 |
368 |
Other operating
expense |
(141) |
(80) |
(221) |
|
(269) |
(80) |
(349) |
Labour expenses |
(2,065) |
(33) |
(2,098) |
|
(4,171) |
(58) |
(4,229) |
Operating taxes and
levies |
(318) |
- |
(318) |
|
(1,244) |
5 |
(1,239) |
Gains (losses) on
disposal |
- |
0 |
0 |
|
- |
(6) |
(6) |
Restructuring and integration costs |
- |
(71) |
(71) |
|
- |
(76) |
(76) |
Adjusted EBITDA |
3,380 |
(179) |
|
|
5,978 |
(200) |
|
Significant
litigation |
(75) |
75 |
|
|
(60) |
60 |
|
Specific labour
expenses |
(33) |
33 |
|
|
(58) |
58 |
|
Review of the
investments and business portfolio |
- |
- |
|
|
(6) |
6 |
|
Restructuring and
integration costs |
(71) |
71 |
|
|
(76) |
76 |
|
Other
specific items |
- |
- |
|
|
- |
- |
|
Reported EBITDA |
3,201 |
|
3,201 |
|
5,778 |
|
5,778 |
|
|
|
|
|
|
|
|
2016 pro forma data |
2nd
quarter |
|
June 30 |
In millions of euros |
Adjusted
data |
Presentation adjustments |
Income
statement |
|
Adjusted
data |
Presentation adjustments |
Income
statement |
Revenues |
10,068 |
|
10,068 |
|
20,054 |
|
20,054 |
External
purchases |
(4,463) |
- |
(4,463) |
|
(8,842) |
- |
(8,842) |
Other operating
income |
227 |
7 |
235 |
|
406 |
7 |
414 |
Other operating
expense |
(119) |
(4) |
(123) |
|
(209) |
(61) |
(270) |
Labour expenses |
(2,118) |
(55) |
(2,173) |
|
(4,338) |
(85) |
(4,423) |
Operating taxes and
levies |
(296) |
- |
(296) |
|
(1,222) |
90 |
(1,132) |
Gains (losses) on
disposal |
- |
- |
- |
|
- |
- |
- |
Restructuring and integration costs |
- |
(226) |
(226) |
|
- |
(339) |
(339) |
Adjusted EBITDA |
3,300 |
(277) |
|
|
5,848 |
(387) |
|
Significant
litigation |
1 |
(1) |
|
|
40 |
(40) |
|
Specific labour
expenses |
(50) |
50 |
|
|
(80) |
80 |
|
Review of the
investments and business portfolio |
- |
- |
|
|
- |
- |
|
Restructuring and
integration costs |
(226) |
226 |
|
|
(339) |
339 |
|
Other
specific items* |
(2) |
2 |
|
|
(8) |
8 |
|
Reported EBITDA |
3,023 |
|
3,023 |
|
5,461 |
|
5,461 |
|
|
|
|
|
|
|
|
2016 historical data |
2nd
quarter |
|
June 30 |
In millions of euros |
Adjusted
data |
Presentation adjustments |
Income
statement |
|
Adjusted
data |
Presentation adjustments |
Income
statement |
Revenues |
10,070 |
|
10,070 |
|
20,079 |
|
20,079 |
External
purchases |
(4,451) |
- |
(4,451) |
|
(8,818) |
- |
(8,818) |
Other operating
income |
209 |
7 |
217 |
|
362 |
8 |
370 |
Other operating
expense |
(88) |
2 |
(86) |
|
(173) |
(61) |
(234) |
Labour expenses |
(2,103) |
(55) |
(2,158) |
|
(4,319) |
(85) |
(4,404) |
Operating taxes and
levies |
(293) |
(0) |
(293) |
|
(1,218) |
90 |
(1,128) |
Gains (losses) on
disposal |
- |
71 |
71 |
|
- |
67 |
67 |
Restructuring and integration costs |
- |
(227) |
(227) |
|
- |
(340) |
(340) |
Adjusted EBITDA |
3,344 |
(201) |
|
|
5,913 |
(321) |
|
Significant
litigation |
1 |
(1) |
|
|
40 |
(40) |
|
Specific labour
expenses |
(50) |
50 |
|
|
(80) |
80 |
|
Review of the
investments and business portfolio |
77 |
(77) |
|
|
67 |
(67) |
|
Restructuring and
integration costs |
(227) |
227 |
|
|
(340) |
340 |
|
Other
specific items* |
(2) |
2 |
|
|
(8) |
8 |
|
Reported EBITDA |
3,143 |
|
3,143 |
|
5,592 |
|
5,592 |
* Transaction expenses related to the negotiations
with Bouygues Telecom in connection with discussions that had begun
in the 1st quarter of
2016 concerning a business combination between the two
companies.
Appendix 7: revenues by
operating segment
|
|
|
|
|
|
|
|
2017 |
2016 |
2016 |
change |
change |
|
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
In millions of euros |
|
|
|
(in %) |
(in %) |
|
|
|
|
|
|
|
1st
half |
|
|
|
|
|
France |
8,879 |
8,860 |
8,860 |
0.2% |
0.2% |
Mobile
services |
3,165 |
3,236 |
3,236 |
(2.2)% |
(2.2)% |
Mobile
equipment sales |
303 |
281 |
281 |
7.7% |
7.7% |
Fixed
services |
5,137 |
5,069 |
5,069 |
1.3% |
1.3% |
|
Fixed services
retail |
3,126 |
3,131 |
3,131 |
(0.1)% |
(0.1)% |
|
Fixed wholesale and
other fixed services |
2,011 |
1,938 |
1,938 |
3.8% |
3.8% |
Other
revenues |
274 |
274 |
274 |
- |
- |
Europe |
5,405 |
5,162 |
5,128 |
4.7% |
5.4% |
Mobile
services |
3,100 |
3,027 |
3,038 |
2.4% |
2.0% |
Mobile
equipment sales |
541 |
454 |
453 |
19.3% |
19.5% |
Fixed
services |
1,664 |
1,600 |
1,560 |
4.0% |
6.7% |
Other
revenues |
100 |
81 |
77 |
- |
- |
Of which: |
|
|
|
|
|
Spain |
2,628 |
2,418 |
2,418 |
8.7% |
8.7% |
Mobile
services |
1,336 |
1,240 |
1,263 |
7.8% |
5.8% |
Mobile
equipment sales |
271 |
240 |
240 |
13.0% |
13.0% |
Fixed
services |
1,019 |
939 |
915 |
8.5% |
11.3% |
Other
revenues |
2 |
(1) |
- |
- |
- |
Poland |
1,325 |
1,337 |
1,306 |
(0.9)% |
1.4% |
Mobile
services |
585 |
625 |
614 |
(6.3)% |
(4.7)% |
Mobile
equipment sales |
146 |
107 |
106 |
36.9% |
37.6% |
Fixed
services |
531 |
559 |
542 |
(4.9)% |
(1.9)% |
Other
revenues |
63 |
46 |
44 |
- |
- |
Belgium & Luxembourg |
617 |
609 |
609 |
1.4% |
1.4% |
Mobile
services |
512 |
504 |
504 |
1.6% |
1.6% |
Mobile
equipment sales |
53 |
56 |
56 |
(5.0)% |
(5.0)% |
Fixed
services |
41 |
36 |
36 |
15.0% |
15.0% |
Other
revenues |
11 |
13 |
13 |
- |
- |
Central European countries |
843 |
801 |
798 |
5.2% |
5.6% |
Mobile
services |
673 |
662 |
658 |
1.8% |
2.2% |
Mobile
equipment sales |
71 |
52 |
51 |
38.5% |
39.4% |
Fixed
services |
74 |
67 |
67 |
10.1% |
10.2% |
Other
revenues |
25 |
20 |
22 |
- |
- |
Intra-Europe eliminations |
0 |
(0) |
- |
- |
- |
Africa & Middle East |
2,491 |
2,449 |
2,516 |
1.7% |
(1.0)% |
Mobile
services |
2,089 |
2,017 |
2,055 |
3.6% |
1.6% |
Mobile
equipment sales |
36 |
33 |
39 |
8.9% |
(7.3)% |
Fixed
services |
331 |
370 |
380 |
(10.4)% |
(12.8)% |
Other
revenues |
35 |
29 |
42 |
- |
- |
Enterprise |
3,615 |
3,675 |
3,666 |
(1.6)% |
(1.4)% |
Voice
services |
728 |
767 |
762 |
(5.1)% |
(4.5)% |
Data
services |
1,374 |
1,417 |
1,402 |
(3.0)% |
(2.0)% |
IT and
integration services |
1,028 |
998 |
1,011 |
3.0% |
1.7% |
Mobile
(services and equipment sales) |
485 |
493 |
491 |
(1.5)% |
(1.2)% |
International Carriers & Shared Services |
819 |
903 |
904 |
(9.3)% |
(9.4)% |
International Carriers |
686 |
758 |
757 |
(9.5)% |
(9.4)% |
Shared
Services |
133 |
145 |
147 |
(8.1)% |
(9.3)% |
Intra-Group eliminations |
(933) |
(995) |
(995) |
- |
- |
Group total |
20,276 |
20,054 |
20,079 |
1.1% |
1.0% |
|
|
|
|
|
|
|
|
|
2017 |
2016 |
2016 |
change |
change |
|
|
|
comparable basis |
historical basis |
comparable basis |
historical basis |
In millions of euros |
|
|
|
(in %) |
(in %) |
|
|
|
|
|
|
|
2nd
quarter |
|
|
|
|
|
France |
4,452 |
4,430 |
4,430 |
0.5% |
0.5% |
Mobile
services |
1,590 |
1,607 |
1,607 |
(1.1)% |
(1.1)% |
Mobile
equipment sales |
156 |
138 |
138 |
13.1% |
13.1% |
Fixed
services |
2,572 |
2,546 |
2,546 |
1.1% |
1.1% |
|
Fixed services
retail |
1,565 |
1,562 |
1,562 |
0.2% |
0.2% |
|
Fixed wholesale and
other fixed services |
1,008 |
983 |
983 |
2.5% |
2.5% |
Other
revenues |
135 |
140 |
140 |
- |
- |
Europe |
2,749 |
2,620 |
2,594 |
4.9% |
6.0% |
Mobile
services |
1,577 |
1,535 |
1,537 |
2.7% |
2.6% |
Mobile
equipment sales |
275 |
234 |
234 |
17.6% |
17.8% |
Fixed
services |
845 |
806 |
781 |
4.9% |
8.2% |
Other
revenues |
51 |
45 |
42 |
- |
- |
Of which: |
|
|
|
|
|
Spain |
1,337 |
1,229 |
1,229 |
8.8% |
8.8% |
Mobile
services |
683 |
635 |
647 |
7.5% |
5.4% |
Mobile
equipment sales |
135 |
121 |
121 |
12.0% |
12.0% |
Fixed
services |
518
|
473 |
461 |
9.5% |
12.4% |
Other
revenues |
1 |
0 |
0 |
- |
- |
Poland |
673 |
688 |
664 |
(2.2)% |
1.3% |
Mobile
services |
298 |
317 |
309 |
(6.0)% |
(3.4)% |
Mobile
equipment sales |
73 |
62 |
62 |
17.1% |
17.7% |
Fixed
services |
269 |
281 |
269 |
(4.3)% |
0.1% |
Other
revenues |
32 |
27 |
24 |
- |
- |
Belgium & Luxembourg |
310 |
299 |
299 |
3.5% |
3.5% |
Mobile
services |
259 |
250 |
250 |
3.5% |
3.5% |
Mobile
equipment sales |
26 |
24 |
24 |
5.2% |
5.2% |
Fixed
services |
21 |
18 |
18 |
15.7% |
15.7% |
Other
revenues |
5 |
7 |
7 |
- |
- |
Central European countries |
434 |
405 |
403 |
7.1% |
7.7% |
Mobile
services |
342 |
334 |
332 |
2.3% |
3.0% |
Mobile
equipment sales |
41 |
26 |
26 |
55.9% |
57.3% |
Fixed
services |
38 |
34 |
34 |
13.2% |
13.3% |
Other
revenues |
12 |
11 |
11 |
- |
- |
Intra-Europe eliminations |
(5) |
(2) |
(2) |
- |
- |
Africa & Middle East |
1,252 |
1,219 |
1,245 |
2.7% |
0.6% |
Mobile
services |
1,051 |
1,005 |
1,017 |
4.6% |
3.4% |
Mobile
equipment sales |
19 |
16 |
20 |
16.9% |
(3.2)% |
Fixed
services |
166 |
183 |
188 |
(9.5)% |
(11.7)% |
Other
revenues |
16 |
14 |
20 |
- |
- |
Enterprise |
1,819 |
1,843 |
1,843 |
(1.3)% |
(1.3)% |
Voice
services |
370 |
384 |
382 |
(3.8)% |
(3.2)% |
Data
services |
687 |
711 |
704 |
(3.5)% |
(2.4)% |
Data
services |
517 |
501 |
513 |
3.3% |
0.9% |
Mobile
(services and equipment sales) |
245 |
246 |
245 |
(0.2)% |
0.3% |
International Carriers & Shared Services |
412 |
448 |
450 |
(8.1)% |
(8.5)% |
International Carriers |
340 |
380 |
379 |
(10.5)% |
(10.4)% |
Shared
Services |
72 |
68 |
70 |
5.1% |
2.0% |
Intra-Group eliminations |
(478) |
(491) |
(491) |
- |
- |
Group total |
10,206 |
10,068 |
10,070 |
1.4% |
1.4% |
Appendix 8: key performance indicators
|
June 30, 2017 |
June 30, 2016 |
Orange Group |
|
historical basis |
Total number of customers* (millions) |
268.950 |
249.550 |
Mobile customers* (millions) |
207.410 |
188.305 |
- of which contract customers (millions) |
71.931 |
66.723 |
Fixed broadband customers (millions) |
19.128 |
18.146 |
TV customers (millions) |
8.716 |
8.146 |
Orange - French market** |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
31.150 |
28.966 |
- of which contract customers (millions) |
27.842 |
25.069 |
Fixed services |
|
|
Number
of broadband customers (millions) |
11.290 |
10.923 |
Broadband market share at end of period (%) |
40.2 *** |
40.1 |
Number of fixed line subscribers (millions) |
18.510 |
18.961 |
France |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
21.622 |
21.746 |
- of which contract customers (millions) |
18.314 |
17.848 |
Total
ARPU quarterly (euros) |
21.7 |
21.8 |
Fixed services |
|
|
Number
of broadband customers (millions) |
11.035 |
10.662 |
- of which fibre customers (millions) |
1.690 |
1.181 |
Number
of TV customers (millions) |
6.740 |
6.510 |
Broadband ARPU quarterly (euros) |
33.8 |
33.4 |
Number
of fixed line subscribers (millions) |
15.859 |
16.088 |
Number of wholesale lines (millions) |
13.916 |
13.988 |
Europe**** |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
49.019 |
50.869 |
- of which contract customers (millions) |
33.874 |
32.060 |
Number
of MVNO customers (millions) |
7.314 |
3.569 |
Fixed services |
|
|
Number
of broadband customers (millions) |
6.927 |
6.341 |
Number
of TV customers (millions) |
1.920 |
1.584 |
Number of fixed lines (millions) |
8.826 |
8.903 |
Spain |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
15.837 |
15.492 |
- of which contract customers (millions) |
12.798 |
12.226 |
Total
ARPU quarterly (euros) |
14.2 |
13.4 |
Number
of MVNO customers (millions) |
5.376 |
1.653 |
Fixed services |
|
|
Number
of broadband customers (millions) |
4.180 |
4.003 |
- of which fibre customers (millions) |
1.947 |
1.217 |
Number
of TV customers (thousands) |
541 |
381 |
Broadband ARPU quarterly (euros) |
32.0 |
30.9 |
|
|
|
*
Excluding customers of MVNOs. |
**
Customers of Orange France and the Enterprise segment in
France. |
***
Company estimate. |
****
Europe: Spain, Poland, Belgium & Luxembourg, and Central
European countries. |
|
June 30, 2017 |
June 30, 2016 |
Poland |
|
historical basis |
Mobile services |
|
|
Number
of customers* (millions) |
14.555 |
16.614 |
- of which contract customers (millions) |
9.573 |
8.716 |
Total
ARPU quarterly (PLN) |
30.1 |
28.0 |
Fixed services |
|
|
Number
of broadband customers (millions) |
2.323 |
2.139 |
- of which VHBB customers (VDSL and fibre, thousands) |
588 |
409 |
Number
of TV customers (thousands) |
792 |
803 |
Broadband ARPU quarterly (PLN) |
57.1 |
60.1 |
Number of fixed lines (millions) |
4.496 |
4.909 |
Belgium & Luxembourg |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
3.957 |
3.928 |
- of which contract customers (millions) |
3.299 |
3.132 |
Total
ARPU quarterly - Belgium (euros) |
25.4 |
24.5 |
Number
of MVNO customers (millions) |
1.933 |
1.909 |
Fixed services |
|
|
Number
of broadband customers (thousands) |
88 |
37 |
Number
of TV customers (thousands) |
68 |
13 |
Number of telephone lines (thousands) |
151 |
166 |
Central European countries |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
14.670 |
14.835 |
- of which contract customers (millions) |
8.205 |
7.987 |
Fixed services |
|
|
Number
of broadband customers (thousands) |
337 |
162 |
Number of TV customers (thousands) |
518 |
388 |
Africa & Middle East |
|
|
Mobile services |
|
|
Number
of customers* (millions) |
127.240 |
108.469 |
- of which contract customers (millions) |
10.215 |
9.594 |
Fixed services |
|
|
Number
of broadband customers (thousands) |
911 |
882 |
Total number of telephone lines (thousands) |
1,110 |
1,118 |
Enterprise |
|
|
France |
|
|
Mobile
services |
|
|
Number
of contract customers* (millions) |
9.528 |
7.221 |
- of which machine-to-machine (millions) |
6.817 |
4.600 |
Fixed
services |
|
|
Number
of fixed lines (thousands) |
2,651 |
2,873 |
Number
of IP-VPN accesses (thousands) |
296 |
294 |
Number
of XoIP connections (thousands) |
83 |
76 |
World |
|
|
Number of IP-VPN accesses worldwide (thousands) |
353 |
349 |
*
Excluding customers of MVNOs. |
|
|
Appendix 9: glossary
Key figures
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.
Reported EBITDA: operating income before
depreciation and amortisation, before impacts related to
acquisitions of controlling interests, before reversal of reserves
of liquidated entities, before impairment of goodwill and assets,
and before income from associates. Reported EBITDA is not a
financial aggregate as defined by IFRS standards and may not be
directly comparable to similarly named indicators in other
companies.
Adjusted EBITDA: Reported EBITDA (see definition),
adjusted for the impacts of key disputes, specific labour expenses,
the review of the portfolio of shares and operations, the cost of
restructuring and consolidation, and, as applicable, other specific
and systematically identified items. Since the 1st
quarter of 2016, Adjusted EBITDA excludes all income from the
disposal of shares and operations and the Adjusted EBITDA for past
periods was revised accordingly. Adjusted EBITDA is not a financial
aggregate as defined by IFRS standards and may not be directly
comparable to similarly named indicators in other companies.
Adjusted EBITDA is the new name (since the 4th
quarter of 2016) for the restated EBITDA aggregate; the definition
of this indicator is unchanged.
CAPEX: capital expenditure on tangible and
intangible assets excluding telecommunication licences and
investments through finance leases. CAPEX is not a financial
performance indicator as defined by IFRS standards and may not be
directly comparable to indicators referenced by the same name in
other companies.
Mobile services
Revenues from mobile services: include revenues
generated by incoming and outgoing calls (voice, SMS and data
services), network access fees, added-value services, machine to
machine, roaming revenues from customers of other networks
(national and international roaming), revenues with mobile virtual
network operators (MVNO) and revenues from network sharing.
Mobile ARPU: the quarterly average revenues per
user (ARPU) are calculated by dividing the revenues from incoming
and outgoing calls (voice, SMS and data services), network access
fees, added-value services and international roaming over the past
three months, by the weighted average number of customers over the
same period, excluding "machine to machine" customers. The weighted
average number of customers is the average of the monthly averages
during the period in question. The monthly average is the
arithmetic mean of the number of customers at the start and end of
the month. Mobile ARPU is expressed as monthly revenues per
customer.
Roaming: use of a mobile service on the network of
an operator other than that of the subscriber.
MVNO: Mobile Virtual Network Operator. These are
operators that do not have their own radio network and thus use the
infrastructure of third-party networks.
Fixed services
Includes traditional fixed telephony, fixed
broadband services, enterprise solutions and networks[18] and
carrier services (notably national and international
interconnections, unbundling and wholesale telephone line
rentals).
Fixed broadband ARPU (ADSL, fibre, VDSL, Fixed-4G,
satellite and WiMAX): the quarterly average revenues per user
(ARPU) of broadband services per year are calculated by dividing
the revenues generated by consumer broadband services over the past
three months by the weighted average number of connections over the
same period. The weighted average number of connections is the
average of the monthly averages during the period in question. The
monthly average is the arithmetic mean of the number of connections
at the start and end of the month. Fixed broadband ARPU is
expressed as monthly revenues per connection.
Fixed 4G (fLTE): fixed broadband offer using 4G
technology as a substitute for the fixed-line network.
Convergence
Consumer convergent offers customer base: consists
of consumer customers who have subscribed to offers combining at
least a fixed broadband connection and a mobile contract.
[1] Excluding
machine-to-machine.
[2] The net
income from discontinued operations related to EE (2.249 billion
euros) corresponds to the income from the sale of EE for 2.076
billion euros and dividends received from EE in January 2016 (prior
to its sale) of 173 million euros.
[3] Net
financial debt as defined and used by Orange does not include
Orange Bank, to which this concept is not relevant.
[4] The
ex-dividend date is set as 5 December 2017 and the record date as 6
December 2017.
[5] On an
historical basis, revenues increased 1.0% in the 1st half of 2017
compared with the 1st half of
2016, which included:
-
the impact of changes in scope of consolidation
(+1.0 percentage points), mainly with the acquisition of Cellcom in
Liberia and Tigo in the Democratic Republic of the Congo (9 months
and 6 months of activity in 2016 respectively), and the acquisition
of entities from the Bharti group in Burkina Faso (with 6 months of
activity in 2016) and in Sierra Leone (with 5 months of activity in
2016);
-
the impact of foreign exchange variations (-1.1
percentage points), in particular with the drop in the Egyptian
pound and, to a lesser extent, the increase in the Polish zloty and
the US dollar.
[6] Includes
Orange France customers and Enterprise customers in France.
[7] Excluding
machine-to-machine.
8 As well as
the effect of specific items occurring during the first quarter of
2016 (employee share ownership offer).
[9] Additional
write-down of 223 million euros on BT shares held, and loss of 126
million euros corresponding to additional impairment recognised on
BT shares sold.
[10] Partly
related to the counter-effect of the 1st half 2016
recognition of tax income of 177 million euros resulting from the
favourable outcome of legal proceedings concerning previous
financial years.
[11] Net
financial debt as defined and used by Orange does not include the
activities of Orange Bank, to which this concept does not
apply.
[12] Excluding
machine-to-machine.
[13] Mainly due
to the reduction in the average number of employees and to a lesser
extent the effect of specific items occurring during the first
quarter of 2016 (employee share ownership offer).
[14] Which will
be offset in the 2nd half of
2017.
[15] Excluding
machine-to-machine.
[16] The
managerial entity known as "Côte d'Ivoire group" combines Orange's
operations in Côte d'Ivoire, Burkina Faso and Liberia.
[17] The
managerial entity known as "Sonatel group" combines Orange's
operations in Senegal, Mali, Guinea, Sierra Leone and Guinea
Bissau.
[18] With the
exception of France, where enterprise solutions and networks are
listed under the Enterprise business segment.
Orange financial results
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Orange via Globenewswire
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