Press release : Orange - first half 2023 results
Press releaseParis, 26 July 2023
Financial information at 30 June 2023
Accelerating
first-half revenue and
EBITDAaL growth confirms achievement
of 2023 targets on track
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
10,926 |
2.6 % |
2.0 % |
|
21,545 |
2.0 % |
1.2 % |
EBITDAaL |
|
3,305 |
1.0 % |
(0.2)% |
|
5,895 |
0.8 % |
(0.6)% |
Operating Income |
|
|
|
|
|
2,142 |
(11.2)% |
(11.5)% |
Consolidated net
income |
|
|
|
|
|
1,088 |
|
(25.8)% |
eCAPEX (excluding
licenses) |
|
1,661 |
(6.4)% |
(7.9)% |
|
3,154 |
(5.7)% |
(7.6)% |
EBITDAaL - eCAPEX |
|
1,644 |
9.8 % |
8.9 % |
|
2,741 |
9.5 % |
8.7 % |
Organic cash-flow
(telecom activities) |
|
|
|
|
|
1,477 |
|
2.2
% |
As from June 2023, the Orange group’s
consolidated financial statements include Orange Belgium’s majority
stake in telecommunication operator VOO SA.1
Accelerated revenue growth in the second
quarter of 20232 reflected the initial results of
the value strategy, which will come to full fruition in the second
half of 2023:
- Orange group
revenues climbed 2.6% in the second quarter of
2023 (2Q) and 2.0% in the first half of 2023 (1H).
- Accelerated revenue
growth in the quarter was driven by the performance of retail
services3, which benefited from price increases. Retail services
rose 4.3% in 2Q (+3.6% in 1H) and more than offset the continued
decline in revenues from wholesale services, which fell 4.1% in 2Q
(-5.9% in 1H). Equipment sales again recorded strong growth in 2Q
with an 8% increase (+8.8% in 1H).
- France decreased
1.3% in 2Q (-1.5% in 1H), with the accelerated growth in retail
services of 3.4% excluding PSTN unable to offset the anticipated
decline in wholesale services revenues. Recent price increases
will, however, yield results in the second half of the year.
- Europe grew 2.7% in
2Q (+3.3% in 1H), driven by Spain, which confirmed its recovery
with an increase of 2.1%, and solid performances from Poland
(+5.5%) and Belgium & Luxembourg (+3.0%).
- Africa & Middle
East continued to post very strong growth rising 12.0% in 2Q
(+10.5% in 1H) with double-digit increases across all growth
engines (mobile data, fixed broadband, Orange Money, B2B).
- The Enterprise
sector grew 2.4% in 2Q (+0.8% in 1H) as a result of revenues from
IT & Integration services and Mobile, which more than offset
the structural decline in the Voice and Data legacy
businesses.
- In terms of
commercial performance4, the Group maintained its
leadership position in convergence, with 11.6 million
convergent customers Group-wide (+0.8%), as well
as its commercial momentum on mobile contracts and very high-speed
fixed broadband accesses. Mobile services had
246.2 million accesses (+4.4%), including 97.4 million
contracts (+8.1%). Fixed services totaled
44.6 million accesses (-2.8%), including 15.1 million
very high-speed broadband accesses, an area that continued to grow
strongly (+14.0%). Fixed narrowband accesses remained structurally
in decline (-14.4%).
Growth in EBITDAaL demonstrated the Group’s
ability to reduce inflationary pressure, thanks to its value
strategy and strict cost discipline.
-
EBITDAaL rose 1.0% in 2Q, leading to 1H growth of
0.8%, due to the excellent performance of Africa & Middle East
(+12.0%) and solid results for Europe (+7.1%) driven by the
recovery in Spain (+11.0%). This performance more than offset both
the decline in the Enterprise segment (-16.7%), which in this first
year of recovery showed an improving trend compared to the first
half of 2022 (+9 points), as well as the decline in France (-5.1%),
which was hit, as expected, by the peak in inflation (particularly
energy costs) without yet fully benefiting from recent price
increases. The Group continued its efforts to control costs,
achieving net savings at 30 June 2023 of 175 million euros which
represents nearly 30% of its target of 600 million euros by 2025,
on a defined cost base of 11.8 billion euros at the end of
2022.
Group operating income totaled
2,142 million euros in the first half of 2023, down 11.2%. This
decline was largely due to an additional provision of
257 million euros related to the “part-time for seniors” plans
in France in order to take into account pension reforms enacted in
France in April 2023.
Consolidated net income was
1,088 million euros in the first half of 2023, a decline of
378 million euros on an historical basis, primarily due to changes
in operating income.
eCAPEX was 3,154 million euros in
the first half of 2023, a year-on-year reduction of 6.4% in 2Q and
5.7% in 1H, in line with objective of a substantial reduction for
the year as a whole. At 30 June 2023, Orange had 68.3 million
households connectable to FTTH worldwide (up 12.6% year on year),
while the FTTH customer base reached 14.6 million (+14.4%).
Organic cash-flow from telecom
activities at 30 June 2023 amounted to 1,477 million euros
(+2.2%), in line with the target of at least 3.5 billion euros by
year end, given the seasonal nature of the business.
Net debt increased by
1,976 million euros compared with 31 December 2022, largely
due to the acquisition of VOO. The ratio of net financial debt to
EBITDAaL from telecom activities increased to 2.09x at 30 June
2023, remaining in line with the medium-term target of
approximately 2x.
In the first half of 2023, Orange continued to
further its commitments to digital inclusion, the circular economy
and the environment. In particular, by the end of June 2023, the
Group had already reached its target of reducing
Scope 1 & 2 carbon emissions by 30% compared
with 2015 (ahead of the initial 2025 deadline) due to the
acceleration in the proportion of renewable energy in its energy
mix (notably via Power Purchase Agreements or PPAs and efforts to
install solar power systems at sites). The next steps towards the
Group’s goal to achieve Net Zero Carbon by 2040 are to have reduced
Scope 3 emissions by 14% in 2025 compared with 2018 and to
have reduced emissions across all three scopes by 45% in 2030
compared with 2020.
The Group reconfirms its financial targets,
in particular those for
20235, as
presented at the Capital Market Day on 16 February:
- Slight growth in
EBITDAaL
- Significant
reduction in eCAPEX
- Organic cash-flow
from telecom activities of at least 3.5 billion euros
- Net debt/EBITDAaL
ratio for telecom activities unchanged at around 2x in the medium
term
Orange will make an interim
dividend cash payment for 2023 of 0.30 euros on 6
December 2023.
A dividend of 0.72 euros per share for 2023 will be
proposed to the Annual Shareholders Meeting in 2024.
Commenting on the publication of these results,
Christel Heydemann, Chief Executive Officer of the Orange group,
said:
“Our first-half results are in line with our
objectives for 2023. They confirm the relevance of the
implementation process initiated in the context of our 'Lead the
Future' strategic plan and provide confidence for the achievement
of our 2025 objectives.
In Europe and in France, our quarterly results
in retail services show the positive momentum of our value
strategy, underpinned by price increases the benefits of which in
France will be fully visible in the second half of the year. We can
also confirm the continuing recovery in Spain, where EBITDAaL rose
by 11% in this first half.
The excellent performance in Africa and the
Middle East is down to our investments in the network, the
satisfaction of our customers and the very strong rebound of Orange
Money.
These results offset those of Orange Business,
whose EBITDAaL was still sharply lower despite a 2.4% increase in
revenues in the second quarter. Our teams are fully focused on
executing our transformation plan there.
I would like to express my sincere thanks for
the work of all the Group's teams who dedicate themselves daily to
the achievement of our objectives. Together we’re transforming and
building the Orange Group of tomorrow, ensuring its sustainability
and its competitiveness with agility and confidence.”
________________________________________________________________________________
The Board of Directors of Orange SA met on 25
July 2023 to review the consolidated financial results at 30 June
2023.
More detailed information on the Group’s
financial results and performance indicators is available on the
Orange website www.orange.com/en/consolidated-results.
Changes in the asset
portfolio
Consolidation of VOO by Orange
Belgium
Orange Belgium closed the acquisition of a 75%
majority stake minus one share in telecommunications operator VOO
SA (the remaining 25% plus one share being held by Nethys). The
inclusion of VOO in the Group’s consolidated financial statements
as from June 2023 does not imply any change to the Group’s
financial targets. VOO’s commercial data (customer base, ARPO,
etc.) have not yet been included in the Group’s 1H
publications.
Conclusion of
the Orange Bank strategic review and entry
into exclusive negotiations with BNP
Paribas
At the end of June, as part of a strategic review
launched several months ago, Orange announced its intention to
gradually withdraw Orange Bank from the retail banking market in
France and Spain. To that end, it entered into exclusive
negotiations with BNP Paribas to define a referral partnership for
the Orange Bank customer portfolio in France and terms for a
takeover of Orange Bank activities in Spain (Orange Bank Africa is
not affected). This operation will not impact the Group’s 2023–2025
financial trajectory.
Joint venture with Masmovil
The European Commission’s analysis of the planned
joint venture with Masmovil in Spain led to the opening of Phase II
in April. The Orange group is confident of approval which will
enable the transaction to be finalized by the end of 2023.
Review by operating
segment
France
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
4,384 |
(1.3)% |
(1.3)% |
|
8,691 |
(1.5)% |
(1.5)% |
Retail services (B2C+B2B) |
|
2,789 |
2.0 % |
2.0 % |
|
5,539 |
1.3 % |
1.3 % |
Convergence |
|
1,255 |
4.4 % |
4.4 % |
|
2,493 |
3.6 % |
3.6 % |
Mobile-only |
|
599 |
2.8 % |
2.8 % |
|
1,182 |
2.4 % |
2.4 % |
Fixed-only |
|
935 |
(1.4)% |
(1.4)% |
|
1,865 |
(2.2)% |
(2.2)% |
Wholesale |
|
1,157 |
(8.1)% |
(8.2)% |
|
2,257 |
(7.9)% |
(8.1)% |
Equipment sales |
|
277 |
3.6 % |
3.6 % |
|
584 |
5.7 % |
5.7 % |
Other revenues |
|
161 |
(11.2)% |
(10.5)% |
|
310 |
(12.7)% |
(12.1)% |
EBITDAaL |
|
|
|
|
|
2,859 |
(5.1)% |
(5.8)% |
EBITDAaL / Revenues |
|
|
|
|
|
32.9 % |
(1.2 pt) |
(1.5 pt) |
Operating Income |
|
|
|
|
|
1,186 |
(19.3)% |
(17.4)% |
eCAPEX |
|
|
|
|
|
1,429 |
(13.5)% |
(14.6)% |
eCAPEX / Revenues |
|
|
|
|
|
16.4 % |
(2.3 pt) |
(2.5 pt) |
First-half growth of 5% in EBITDAaL –
eCAPEX
France’s revenues stood at 4,384
million euros, a decline of 1.3% in the second quarter of 2023
compared with the second quarter of 2022 (-57 million euros). This
was due to the expected decline in wholesale (-102 million euros or
-8.1%) that was partially offset by acceleration in the growth of
retail services (+56 million euros).
Excluding PSTN, revenues from retail services
climbed 3.4% in the second quarter (after rising 2.1% in the first
quarter) and will continue their sequential acceleration over the
rest of the year with the impact of the recent base price increases
only fully materializing in the second half of the year, the same
as with the recent launch of 5G on Sosh. The Group’s disciplined
strategy, balancing volume and value, has resulted in a
stabilization (+0.3 pts year on year) of the mobile churn rate at
the low level of 10.8%, and an increase in all ARPOs, particularly
convergent ARPO, which exceeds 73 euros (a 3.6% rise in one
year).
In the second quarter, net additions totaled
+29,000 for mobile6 (versus +3,000 in the first quarter) and
-33,000 for fixed (versus -21,000 in the first quarter), which
included +250,000 for fiber (versus +287,000 in the first
quarter).
Lastly, revenues from equipment sales were up 3.6%
in the second quarter and up 5.7% in the first half, largely as a
result of sales of higher-value mobile handsets.
EBITDAaL decreased 5.1% in the
first half, mainly reflecting the elevated energy prices in 2023
(which account for 2/3 of this decline), as well as the anticipated
decline in wholesale, with the positive impact of recent price
increases limited to just two months of the first half. In the
second half, the trend will improve significantly, despite
persistent adverse effects, due to the full positive impact of
price increases.
In all, the “EBITDAaL minus eCAPEX” cash flow
for France increased 5% year on year in the first half, thanks to
the sharp reduction in eCAPEX (-13.5%) in line
with the medium-term trajectory.
Europe
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
2,808 |
2.7 % |
4.9 % |
|
5,546 |
3.3 % |
4.1 % |
Retail services (B2C+B2B) |
|
1,922 |
4.2 % |
4.9 % |
|
3,791 |
3.9 % |
4.1 % |
Convergence |
|
740 |
5.2 % |
5.5 % |
|
1,466 |
4.7 % |
4.7 % |
Mobile-only |
|
731 |
2.0 % |
2.4 % |
|
1,449 |
2.5 % |
2.5 % |
Fixed-only |
|
306 |
(0.3)% |
0.5 % |
|
614 |
(0.0)% |
0.1 % |
IT & Integration services |
|
145 |
24.4 % |
29.3 % |
|
262 |
19.2 % |
22.1 % |
Wholesale |
|
416 |
(6.7)% |
(6.6)% |
|
814 |
(7.1)% |
(7.2)% |
Equipment sales |
|
396 |
11.1 % |
11.6 % |
|
822 |
14.3 % |
14.3 % |
Other revenues |
|
74 |
(15.8)% |
63.9 % |
|
120 |
(6.2)% |
37.4 % |
EBITDAaL |
|
|
|
|
|
1,430 |
7.1 % |
8.1 % |
EBITDAaL / Revenues |
|
|
|
|
|
25.8 % |
0.9 pt |
0.9 pt |
Operating Income |
|
|
|
|
|
371 |
53.7 % |
43.0 % |
eCAPEX |
|
|
|
|
|
754 |
(10.7)% |
(9.7)% |
eCAPEX / Revenues |
|
|
|
|
|
13.6 % |
(2.1 pt) |
(2.1 pt) |
Europe confirms the
good momentum of recent quarters with
accelerated growth in retail services fueling EBITDAaL
growth.
Europe revenues grew 2.7% in the
second quarter (+74 million euros), led by retail services
which rose 4.2% (+78 million euros, after rising 3.6% in 1Q
2023 and 1.3% in 2Q 2022). This was due to good performances in
Convergence and Mobile which benefited from price increases
introduced in all regions in 2022, and to B2B (+8.3%).
Equipment sales were also up strongly year on year
rising 11.1% while the 6.7% decline in wholesale services was tied
to regulatory reductions in call termination rates and
international traffic, which has little impact on margins.
In addition to the good performance of Spain
(+2.1%), growth in Other European countries (+3.1%) was driven by
Poland (+5.5%) and Belgium & Luxembourg (+3.0%).
The solid performance of retail services along with
measures taken to counter inflationary pressures led to an
improvement in Europe’s EBITDAaL margin of +0.9 pts, thanks to the
growth in EBITDAaL in all countries.
eCAPEX declined 10.7%
(-90 million euros) in the first half.
Spain recorded
revenue growth for the fourth consecutive quarter.
Revenues were up 2.1% in the second quarter of 2023, thanks to
growth in retail services (+1.9%) and equipment sales (+18.5%).
This was despite a decline in wholesale services revenues caused by
the regulatory reduction in call termination rates.
In a highly competitive market, Orange Spain
continued to drive value through higher value-added offers,
combined with a rigorous marketing policy and growth in B2B
activities. This was reflected again in the quarter with a 4.9%
improvement in convergent ARPO (after +3.5% in the first quarter of
2023 and +2.0% in the fourth quarter of 2022), while the level of
churn continued to decline. The FTTH customer base grew by 6,000,
while that of mobile accesses (excluding M2M) rose by 51,000.
EBITDAaL returned to growth
(11%) as a result of commercial momentum and cost optimization,
confirming the turnaround expected this year.
Africa & Middle East
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,773 |
12.0 % |
3.5 % |
|
3,472 |
10.5 % |
2.7 % |
Retail services (B2C+B2B) |
|
1,574 |
11.2 % |
3.5 % |
|
3,083 |
10.3 % |
3.3 % |
Mobile-only |
|
1,355 |
10.9 % |
3.2 % |
|
2,652 |
9.9 % |
2.8 % |
Fixed-only |
|
208 |
13.7 % |
6.3 % |
|
411 |
13.4 % |
6.9 % |
IT & Integration services |
|
11 |
2.0 % |
(4.5)% |
|
21 |
5.9 % |
(1.6)% |
Wholesale |
|
166 |
20.5 % |
4.9 % |
|
324 |
14.3 % |
0.1 % |
Equipment sales |
|
20 |
(6.3)% |
(16.1)% |
|
43 |
(9.0)% |
(21.2)% |
Other revenues |
|
12 |
44.7 % |
23.1 % |
|
21 |
38.5 % |
15.8 % |
EBITDAaL |
|
|
|
|
|
1,260 |
12.0 % |
3.8 % |
EBITDAaL / Revenues |
|
|
|
|
|
36.3 % |
0.5 pt |
0.4 pt |
Operating Income |
|
|
|
|
|
742 |
6.9 % |
0.3 % |
eCAPEX |
|
|
|
|
|
648 |
17.1 % |
6.4 % |
eCAPEX / Revenues |
|
|
|
|
|
18.7 % |
1.0 pt |
0.6 pt |
Africa & Middle East again
delivered an exceptional performance in the second quarter
of 2023 with an improved EBITDAaL margin.
Africa & Middle East recorded a strong 12.0%
rise in revenues (+189 million euros) in the
second quarter, resulting in a 10.5% increase in the first half.
All countries in the region grew with more than half achieving
double-digit growth. The region continued to demonstrate its
agility and resilience amid security tensions and currency
devaluations in some countries.
This performance was based on the continued rapid
development of retail services (+11.2%) due to double-digit growth
in the four growth engines, namely mobile data (+16.7%), fixed
broadband (+16.8%), Orange Money (+25.5%) and B2B across the board
(+14.0%), with a positive effect on volume and value.
The mobile customer base reached
146.2 million, a year-on-year increase of 5.0%, with a 4.3%
increase in average mobile ARPO.
EBITDAaL outpaced revenue growth
in 1H, with seven of the 16 countries recording double-digit
EBITDAaL growth. The EBITDAaL margin rose 0.5 pts, largely as a
result of the turnaround at Orange Money.
eCAPEX increased 17.1% to keep
pace with the strong growth.
Enterprise
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,994 |
2.4 % |
2.6 % |
|
3,944 |
0.8 % |
1.4 % |
Fixed-only |
|
813 |
(5.8)% |
(5.7)% |
|
1,641 |
(6.2)% |
(5.6)% |
Voice |
|
230 |
(8.7)% |
(8.5)% |
|
464 |
(10.2)% |
(9.7)% |
Data |
|
583 |
(4.6)% |
(4.6)% |
|
1,177 |
(4.5)% |
(3.9)% |
IT & Integration services |
|
923 |
8.8 % |
9.2 % |
|
1,794 |
7.1 % |
7.9 % |
Mobile |
|
258 |
9.4 % |
9.5 % |
|
509 |
4.4 % |
4.5 % |
Mobile-only |
|
181 |
8.4 % |
8.4 % |
|
348 |
7.0 % |
7.0 % |
Wholesale |
|
10 |
1.2 % |
1.2 % |
|
20 |
0.4 % |
0.4 % |
Equipment sales |
|
67 |
13.9 % |
13.9 % |
|
140 |
(0.9)% |
(0.9)% |
EBITDAaL |
|
|
|
|
|
311 |
(16.7)% |
(14.7)% |
EBITDAaL / Revenues |
|
|
|
|
|
7.9 % |
(1.7 pt) |
(1.5 pt) |
Operating Income |
|
|
|
|
|
118 |
(27.3)% |
(22.4)% |
eCAPEX |
|
|
|
|
|
140 |
(1.7)% |
(2.4)% |
eCAPEX / Revenues |
|
|
|
|
|
3.6 % |
(0.1 pt) |
(0.1 pt) |
Lower EBITDAaL in line with the recovery
plan timetable.
Enterprise revenues climbed 2.4%
(+47 million euros) to 1,994 million euros in the second
quarter of 2023.
The 5.8% structural decline in Voice and Data
fixed legacy activities (-50 million euros) was fully offset by the
8.8% increase in IT & Integration services (+75 million euros)
and the solid performance of Mobile up 9.4% (+22 million
euros).
In the first half, IT & Integration services
accounted for 45.5% of revenues. The Digital & Data and Orange
Cyberdefense activities produced growth of 8.7% and 11.4%
respectively in the first half of 2023.
The deterioration in EBITDAaL
in the first half (-16.7%) was in line with the ambition to slow
down the decline in 2023 compared to 2022, when the decline was
18.8%. First-half EBITDAaL was in line with the expected trajectory
given the recovery launched in the first half which will take time
to materialize. For example, the voluntary departure plan
envisaged, which could lead to the reduction of some 650 jobs in
France, should only significantly improve EBITDAaL from 2024.
Totem
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
168 |
0.7 % |
0.7 % |
|
342 |
4.3 % |
4.3 % |
Wholesale |
|
168 |
0.7 % |
0.7 % |
|
342 |
4.3 % |
4.3 % |
Other revenues |
|
- |
- |
- |
|
- |
- |
- |
EBITDAaL |
|
|
|
|
|
183 |
1.6 % |
1.6 % |
EBITDAaL / Revenues |
|
|
|
|
|
53.4 % |
(1.4 pt) |
(1.4 pt) |
Operating Income |
|
|
|
|
|
127 |
6.0 % |
6.0 % |
eCAPEX |
|
|
|
|
|
65 |
47.8 % |
47.8 % |
eCAPEX / Revenues |
|
|
|
|
|
19.0 % |
5.6 pt |
5.6 pt |
Revenues for the Totem TowerCo7 reached 168
million euros in the second quarter, an increase of 0.7% (+1
million euros). This resulted in 4.3% growth for the first half,
driven by the 6.4% rise in external hosting revenues in that
period.
The lease rate stood at 1.38 tenants per site,
which was up compared with the previous year (1.35 in the first
half of 2022 and 1.37 in 2022) and well on track to achieving the
target of 1.5 by 2026.
In the first half, EBITDAaL continued growing
gradually (+1.6%), while eCAPEX increased as a result of the
construction of new sites for the Group.
Recently signed contracts had no material impact
on the financial results of the first half with the effects
materializing progressively.
International Carriers & Shared
Services
In millions of euros |
|
2Q 2023 |
changecomparablebasis |
changehistoricalbasis |
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
410 |
5.2 % |
4.9 % |
|
763 |
(1.0)% |
(1.1)% |
Wholesale |
|
289 |
4.7 % |
4.5 % |
|
516 |
(4.0)% |
(4.1)% |
Other revenues |
|
120 |
6.3 % |
5.8 % |
|
247 |
6.1 % |
5.7 % |
EBITDAaL |
|
|
|
|
|
(86) |
29.8 % |
32.9 % |
EBITDAaL / Revenues |
|
|
|
|
|
(11.2)% |
4.6 pt |
5.3 pt |
Operating Income |
|
|
|
|
|
(329) |
(67.4)% |
(58.8)% |
eCAPEX |
|
|
|
|
|
97 |
3.0 % |
2.9 % |
eCAPEX / Revenues |
|
|
|
|
|
12.7 % |
0.5 pt |
0.5 pt |
Wholesale services revenues were up 4.7% (+13
million euros) in the second quarter. The downward trend in voice
traffic was offset by the development of services in higher value
activities and the sale of rights to use the Arimao submarine cable
linking Cuba to Martinique.
The 6.3% increase in other revenues (+7 million
euros) was primarily due to Orange Marine’s submarine cable-laying
activities.
The segment was able to significantly reduce its
losses in the first half with an improvement in EBITDAaL to -86
million euros thanks to lower labor expenses in central functions
and to the improvement of the profitability of the operator
services business.
Mobile Financial Services
In millions of euros |
|
|
|
|
|
6M 2023 |
changecomparablebasis |
changehistoricalbasis |
Net Banking Income (NBI) |
|
|
|
|
|
75 |
33.5 % |
33.5 % |
Cost of bank credit risk |
|
|
|
|
|
(32) |
48.6 % |
48.6 % |
Operating Income |
|
|
|
|
|
(73) |
8.3 % |
8.3 % |
eCAPEX |
|
|
|
|
|
20 |
47.9 % |
47.9 % |
Good commercial momentum; recognized
quality of service and customer satisfaction in an unfavorable
interest rate environment
Mobile Financial Services had 3.2 million
customers at 30 June 2023, including 2.0 million in Europe
(Orange Bank) and 1.2 million in Africa (Orange Bank Africa),
a year-on-year increase of 0.5 million customers.
In France, Orange Bank continued to improve its
user experience, ranking number one among online banks for customer
satisfaction by the Trustpilot review platform and by Google
Customer Reviews.
Net banking income (NBI) for the first half was
up 33.5%. Also in the first half, new accounts opened at Orange
Bank (Europe) rose 4% and loans disbursed (excluding mortgages)
increased 14.3%.
Operating income was higher
than in first half 2022.
Calendar of upcoming
events
24 October 2023
-
Publication of Third-Quarter 2023 Financial Results
Contacts
press: Sylvain Brunosylvain.bruno@orange.com Tom
Wrighttom.wright@orange.com Caroline
Celliercaroline.cellier@orange.com |
financial communication: (analysts and investors)Patrice Lambert-de
Diesbachp.lambert@orange.com Aurélia
Rousselaurelia.roussel@orange.comHong Hai
Vuonghonghai.vuong@orange.comLouis
Celierlouis.celier@orange.com |
Disclaimer
This press release contains forward-looking
statements about Orange’s financial situation, results of
operations and strategy. 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. More detailed information on the
potential risks that could affect our financial results is included
in the Universal Registration Document filed on 29 March 2023
with the French Financial Markets Authority (AMF) and in the annual
report (Form 20-F) filed on 30 March 2023 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: financial key indicators
Quarterly data
In millions of euros |
|
2Q 2023 |
2Q 2022comparablebasis |
2Q 2022historicalbasis |
variationcomparablebasis |
changehistoricalbasis |
Revenues |
|
10,926 |
10,649 |
10,715 |
2.6 % |
2.0 % |
France |
|
4,384 |
4,441 |
4,440 |
(1.3)% |
(1.3)% |
Europe |
|
2,808 |
2,734 |
2,677 |
2.7 % |
4.9 % |
Africa & Middle-East |
|
1,773 |
1,583 |
1,713 |
12.0 % |
3.5 % |
Enterprise |
|
1,994 |
1,947 |
1,943 |
2.4 % |
2.6 % |
Totem |
|
168 |
167 |
167 |
0.7 % |
0.7 % |
International Carriers & Shared Services |
|
410 |
389 |
390 |
5.2 % |
4.9 % |
Intra-Group eliminations |
|
(609) |
(612) |
(616) |
|
|
EBITDAaL (1) |
|
3,305 |
3,272 |
3,314 |
1.0 % |
(0.2)% |
o/w Telecom activities |
|
3,332 |
3,302 |
3,343 |
0.9 % |
(0.3)% |
As % of revenues |
|
30.5 % |
31.0 % |
31.2 % |
(0.5 pt) |
(0.7 pt) |
o/w Mobile Financial Services |
|
(27) |
(30) |
(30) |
9.4 % |
9.4 % |
eCAPEX |
|
1,661 |
1,775 |
1,803 |
(6.4)% |
(7.9)% |
o/w Telecom activities |
|
1,649 |
1,767 |
1,795 |
(6.7)% |
(8.1)% |
as % of revenues |
|
15.1 % |
16.6 % |
16.8 % |
(1.5 pt) |
(1.7 pt) |
o/w Mobile Financial Services |
|
12 |
8 |
8 |
50.5 % |
50.5 % |
EBITDAaL - eCAPEX |
|
1,644 |
1,498 |
1,511 |
9.8 % |
8.9 % |
(1) EBITDAaL presentation adjustments are described in Appendix
2. |
|
|
|
|
|
|
Data
at 30 June
In millions of euros |
|
6M 2023 |
6M 2022comparablebasis |
6M 2022historicalbasis |
variationcomparablebasis |
changehistoricalbasis |
Revenues |
|
21,545 |
21,133 |
21,297 |
2.0 % |
1.2 % |
France |
|
8,691 |
8,826 |
8,827 |
(1.5)% |
(1.5)% |
Europe |
|
5,546 |
5,371 |
5,325 |
3.3 % |
4.1 % |
Africa & Middle East |
|
3,472 |
3,141 |
3,381 |
10.5 % |
2.7 % |
Enterprise |
|
3,944 |
3,911 |
3,888 |
0.8 % |
1.4 % |
Totem |
|
342 |
328 |
328 |
4.3 % |
4.3 % |
International Carriers & Shared Services |
|
763 |
771 |
772 |
(1.0)% |
(1.1)% |
Intra-Group eliminations |
|
(1,214) |
(1,215) |
(1,224) |
|
|
EBITDAaL (1) |
|
5,895 |
5,849 |
5,934 |
0.8 % |
(0.6)% |
o/w Telecom activities |
|
5,957 |
5,904 |
5,989 |
0.9 % |
(0.5)% |
As % of revenues |
|
27.6 % |
27.9 % |
28.1 % |
(0.3 pt) |
(0.5 pt) |
France |
|
2,859 |
3,014 |
3,035 |
(5.1)% |
(5.8)% |
Europe |
|
1,430 |
1,335 |
1,323 |
7.1 % |
8.1 % |
Africa & Middle East |
|
1,260 |
1,125 |
1,214 |
12.0 % |
3.8 % |
Enterprise |
|
311 |
373 |
364 |
(16.7)% |
(14.7)% |
Totem |
|
183 |
180 |
180 |
1.6 % |
1.6 % |
International Carriers & Shared Services |
|
(86) |
(122) |
(128) |
29.8 % |
32.9 % |
o/w Mobile Financial Services |
|
(62) |
(56) |
(56) |
(10.6)% |
(10.6)% |
Operating Income |
|
2,142 |
2,412 |
2,420 |
(11.2)% |
(11.5)% |
o/w Telecom activities |
|
2,215 |
2,491 |
2,499 |
(11.1)% |
(11.4)% |
o/w Mobile Financial Services |
|
(73) |
(80) |
(80) |
8.3 % |
8.3 % |
Consolidated net
income |
|
1,088 |
|
1,467 |
- |
(25.8)% |
Net income attributable to equity owners of the Group |
|
877 |
|
1,218 |
|
(28.0)% |
eCAPEX |
|
3,154 |
3,344 |
3,413 |
(5.7)% |
(7.6)% |
o/w Telecom activities |
|
3,133 |
3,330 |
3,399 |
(5.9)% |
(7.8)% |
as % of revenues |
|
14.5 % |
15.8 % |
16.0 % |
(1.2 pt) |
(1.4 pt) |
o/w Mobile Financial Services |
|
20 |
14 |
14 |
47.9 % |
47.9 % |
EBITDAaL - eCAPEX |
|
2,741 |
2,505 |
2,521 |
9.5 % |
8.7 % |
Organic cash-flow
(telecom activities) |
|
1,477 |
|
1,445 |
|
2.2 % |
(1) EBITDAaL presentation adjustments are described in Appendix
2. |
|
|
|
|
|
|
In millions of euros |
|
June 302023 |
Au 31 Dec.2022 |
Net financial debt (1) |
|
27,274 |
25,298 |
Ratio of net
financial debt / EBITDAaL
from telecom activities (2) |
|
2.09 |
1.93 |
(1) Net financial debt as defined and used by Orange does not
include Mobile Financial Services activities, for which this
concept is not relevant. |
(2) The ratio of net financial debt to EBITDAaL from telecom
activities is calculated based on the ratio of the Group’s net
financial debt to EBITDAaL from telecom activities over the
previous 12 months. |
Appendix 2: adjusted data to
income statement items
Quarterly data
|
|
2Q 2023 |
|
2Q 2022historical basis |
In millions of euros |
|
Adjusted data |
Presentation adjustments |
Income statement |
|
Adjusted data |
Presentation adjustments |
Income statement |
Revenues |
|
10,926 |
- |
10,926 |
|
10,715 |
- |
10,715 |
External purchases |
|
(4,675) |
(16) |
(4,691) |
|
(4,543) |
(4) |
(4,547) |
Other operating income |
|
195 |
- |
195 |
|
181 |
0 |
181 |
Other operating expense |
|
(108) |
(50) |
(158) |
|
(95) |
(8) |
(103) |
Labor expenses |
|
(2,230) |
(238) |
(2,468) |
|
(2,166) |
70 |
(2,096) |
Operating taxes and levies |
|
(326) |
(1) |
(327) |
|
(340) |
3 |
(338) |
Gains (losses) on disposal of fixed assets, investments and
activities |
|
na |
14 |
14 |
|
na |
25 |
25 |
Restructuring costs |
|
na |
(25) |
(25) |
|
na |
(16) |
(16) |
Depreciation and amortization of financed assets |
|
(31) |
- |
(31) |
|
(25) |
- |
(25) |
Depreciation and amortization of right-of-use assets |
|
(372) |
(3) |
(375) |
|
(382) |
- |
(382) |
Impairment of right-of-use assets |
|
0 |
(28) |
(28) |
|
- |
6 |
6 |
Interest expenses on liabilities related to financed assets |
|
(4) |
4 |
na |
|
(0) |
0 |
na |
Interest expenses on lease liabilities |
|
(70) |
70 |
na |
|
(32) |
32 |
na |
EBITDAaL |
|
3,305 |
(274) |
na |
|
3,314 |
108 |
na |
Significant litigation |
|
(39) |
39 |
na |
|
1 |
(1) |
na |
Specific labor expenses |
|
(238) |
238 |
na |
|
71 |
(71) |
na |
Fixed assets, investments and business portfolio review |
|
14 |
(14) |
na |
|
25 |
(25) |
na |
Restructuring program costs |
|
(60) |
60 |
na |
|
(11) |
11 |
na |
Acquisition and integration costs |
|
(25) |
25 |
na |
|
(12) |
12 |
na |
Interest expenses on liabilities related to financed assets |
|
na |
(4) |
(4) |
|
na |
(0) |
(0) |
Interest expenses on lease liabilities |
|
na |
(70) |
(70) |
|
na |
(32) |
(32) |
Data at
30 June
|
|
6M 2023 |
|
6M 2022historical basis |
In millions of euros |
|
Adjusted data |
Presentation adjustments |
Income statement |
|
Adjusted data |
Presentation adjustments |
Income statement |
Revenues |
|
21,545 |
- |
21,545 |
|
21,297 |
- |
21,297 |
External purchases |
|
(9,331) |
(16) |
(9,347) |
|
(9,039) |
(11) |
(9,050) |
Other operating income |
|
376 |
- |
376 |
|
366 |
0 |
366 |
Other operating expense |
|
(191) |
41 |
(150) |
|
(222) |
(9) |
(231) |
Labor expenses |
|
(4,359) |
(265) |
(4,624) |
|
(4,361) |
33 |
(4,329) |
Operating taxes and levies |
|
(1,221) |
(2) |
(1,223) |
|
(1,235) |
0 |
(1,235) |
Gains (losses) on disposal of fixed assets, investments and
activities |
|
na |
50 |
50 |
|
na |
36 |
36 |
Restructuring costs |
|
na |
(35) |
(35) |
|
na |
(47) |
(47) |
Depreciation and amortization of financed assets |
|
(59) |
- |
(59) |
|
(47) |
- |
(47) |
Depreciation and amortization of right-of-use assets |
|
(742) |
(3) |
(745) |
|
(762) |
- |
(762) |
Impairment of right-of-use assets |
|
0 |
(28) |
(28) |
|
(1) |
6 |
5 |
Interest expenses on liabilities related to financed assets |
|
(6) |
6 |
na |
|
(1) |
1 |
na |
Interest expenses on lease liabilities |
|
(116) |
116 |
na |
|
(61) |
61 |
na |
EBITDAaL |
|
5,895 |
(137) |
na |
|
5,934 |
70 |
na |
Significant litigation |
|
57 |
(57) |
na |
|
(2) |
2 |
na |
Specific labor expenses |
|
(265) |
265 |
na |
|
35 |
(35) |
na |
Fixed assets, investments and business portfolio review |
|
50 |
(50) |
na |
|
36 |
(36) |
na |
Restructuring program costs |
|
(70) |
70 |
na |
|
(41) |
41 |
na |
Acquisition and integration costs |
|
(31) |
31 |
na |
|
(21) |
21 |
na |
Interest expenses on liabilities related to financed assets |
|
na |
(6) |
(6) |
|
na |
(1) |
(1) |
Interest expenses on lease liabilities |
|
na |
(116) |
(116) |
|
na |
(61) |
(61) |
Appendix 3: economic CAPEX to
investments in property, plant and intangible
investment
In millions of euros |
|
2Q 2023 |
2Q 2022historicalbasis |
|
6M 2023 |
6M 2022historicalbasis |
eCAPEX |
|
1,661 |
1,803 |
|
3,154 |
3,413 |
Elimination of proceeds from sales of property, plant and equipment
and intangible assets |
|
62 |
78 |
|
153 |
124 |
Telecommunication licenses |
|
68 |
30 |
|
383 |
244 |
Financed assets |
|
74 |
39 |
|
145 |
69 |
Investments in property, plant and equipment and intangible
assets |
|
1,865 |
1,950 |
|
3,834 |
3,850 |
Appendix
4:
key performance
indicators
In thousand, at the end of the period |
|
June 302023 |
|
June 302022 |
Number of convergent customers |
|
11,642 |
|
11,552 |
Number of mobile accesses (excluding MVNOs)
(1) |
|
246,175 |
|
235,746 |
o/w |
Convergent customers mobile accesses |
|
21,428 |
|
21,056 |
|
Mobile only accesses |
|
224,748 |
|
214,690 |
o/w |
Contract customers mobile accesses |
|
97,434 |
|
90,138 |
|
Prepaid customers mobile accesses |
|
148,741 |
|
145,607 |
Number of fixed accesses (2) |
|
44,613 |
|
45,916 |
|
Fixed Retail accesses |
|
30,527 |
|
31,072 |
|
|
Fixed Broadband accesses |
|
24,475 |
|
24,002 |
|
|
o/w |
Very high‑speed broadband fixed accesses |
|
15,076 |
|
13,224 |
|
|
|
Convergent customers fixed accesses |
|
11,642 |
|
11,552 |
|
|
|
Fixed accesses only |
|
12,833 |
|
12,450 |
|
|
Fixed Narrowband accesses |
|
6,051 |
|
7,070 |
|
Fixed Wholesale accesses |
|
14,087 |
|
14,845 |
Group total accesses (1+2) |
|
290,789 |
|
281,662 |
As of June 30, 2023, data excluding accesses from the telecom
operator VOO acquired in June 2023 by Orange Belgium and in the
process of being integrated. |
|
|
|
|
Key performance indicators by country are
presented in the "Orange Investors Data Book Q2 2023" available on
www.orange.com, under Finance/Results:
www.orange.com/en/latest-consolidated-results
Appendix
5: 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, 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
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.
Retail services (B2C + B2B): aggregation of
revenues from (i) Convergent services, (ii) Mobile-only services,
(iii) Fixed-only services and (iv) IT & integration services
(see definitions). Retail Services (B2C+B2B) revenues include all
revenues of a given scope excluding revenues from wholesale
services, equipment sales and other revenues (see definitions).
Performance indicators
Fixed retail accesses: 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.
Fixed wholesale accesses: number of fixed
broadband and narrowband wholesale accesses operated by Orange.
Convergence
Convergent services: customer base and revenues
from B2C Convergent retail offers, excluding equipment sales (see
definition) defined as an offer combining at least a broadband
access (xDSL, FTTx, cable or Fixed-4G (fLTE) with cell-lock) and a
mobile voice contract (excluding MVNOs).
Convergent ARPO: average quarterly revenues per
convergent offer (ARPO) calculated by dividing revenues from retail
Convergent services offers invoiced to B2C 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.
Mobile-only services
Mobile-only services: revenues from mobile
offers (mainly outgoing calls: voice, SMS and data) invoiced to
retail customers, excluding convergent services and equipment sales
(see definitions). The customer base includes customers with a
contract excluding retail convergence, machine-to-machine contracts
and prepaid cards.
Mobile-only ARPO: average quarterly revenues
from Mobile-only (ARPO) calculated by dividing revenues from
Mobile-only retail 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
Fixed-only services: revenues from fixed retail
offers, excluding B2C convergent offers and equipment sales (see
definitions). It includes (i) fixed narrowband services
(conventional fixed telephony), (ii) fixed broadband services, and
(iii) business solutions and networks (with the exception of
France, for which essential business solutions and networks are
supported by Enterprise). For the Enterprise segment, Fixed-only
service revenues include sales of network equipment related to the
operation of voice and data services. The customer base consists of
fixed narrowband and fixed broadband customers, excluding retail
convergence customers.
Fixed-only Broadband ARPO: average quarterly
revenues from Fixed-only Broadband (ARPO) calculated by dividing
the revenue from Fixed-only Broadband retail 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
IT & Integration services: revenues from
unified communication and collaboration services (Local Area
Network and telephony, advising, integration and project
management), hosting and infrastructure services (including Cloud
Computing), applications services (customer relations management
and other applications services), security services, video
conferencing offers, machine-to-machine services (excluded
connectivity) as well as sales of equipment related to the above
products and services.
Wholesale
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), (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, and
(iii) equipment sales to other carriers.
Equipment sales
Equipment sales: revenues from all mobile and
fixed equipment sales, excluding (i) equipment sales associated
with the supply of IT & Integration services, (ii) sales of
network equipment related to the operation of voice and data
services in the Enterprise operating segment, (iii) equipment sales
to other carriers, and (iv) equipment sales to dealers and
brokers.
Other revenues
Other revenues: revenues including (i) equipment
sales to brokers and dealers, (ii) portal, (iii) on-line
advertising revenues, (iv) corporate transversal business line
activities, and (v) other miscellaneous revenues.
1 As VOO’s operating indicators are currently
undergoing consolidation, customer base data for Orange Belgium,
Europe and the Group are published without VOO accesses.2 Unless
otherwise stated, percentage changes are on a year-on-year basis,
calculated against the second quarter of 2022 and on a comparable
basis.3 Services invoiced to customers (B2C and B2B). See
definition in the attached glossary.4 Changes are presented on a
comparable basis and exclude data from VOO SA.5 These targets are
on a comparable basis and do not take into account mergers and
acquisitions not yet finalized.
6 Excluding prepaid7 European company within the
Orange group that owns and manages the passive mobile
infrastructure portfolio of telecommunication towers, initially in
France and Spain. It has been presented as a separate business
segment since 1 January 2022.
- PR_Orange_H1_2023_EN_260723
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