Orange financial results #Q3_2019 29 October 2019 Ramon Fernandez Deputy CEO, Finance, Performance and Europe
Disclaimer This presentation contains forward-looking statements about Orange, notably on objectives and trends related to Orange’s financial situation, investments, results of operations, business 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 Registration Document filed on 21 March 2019 with the French Autorité des Marchés Financiers (AMF) and in the annual report (Form 20-F) filed on 16 April 2019 with the U.S. Securities and Exchange Commission. Other than as required by law, Orange does not undertake any obligation to update them in light of new information or future developments. 2 2
Section one Q3 2019 highlights
4 9m 2019 Revenue (9m 19) EBITDAaL (9m 19) Q3 2019 € 31.2 bn € 9.6 bn Group achievements 2019 yoy growth 2019 yoy growth +0.9% +0.8% +0.7% +0.6% +0.5% +0.4% +0.2% Q1 19 Q2 19 Q3 19 9M -0.1% Q1 19 Q2 19 Q3 19 9M yoy : comparison with the same period of the previous year, on a comparable basis unless otherwise specified All Group level mentions include both telecom and banking activities. Conversely, all mentions excluding Orange bank are Telecom EBITDAaL (9m) eCAPEX (9m) explicitly called “Telecom” excl. digital content offers +1.9% yoy € 5.2 bn
5 Q3 19 Network highlights Investments efforts N°1 accelerated as fiber 4G coverage above 95 % of 4G population in all European countries mobile network roll-out in France for the 9 th year 4G in 15 MEA countries in a row speeds up 5G Launch of 4 “5G Orange cities” in Europe VHBB** connectable lines • 35.7m FTTH +22% 37m % yoy • 14.6m lines in Spain +10% yoy • 4.0m lines in Poland +26% yoy Group Telecom +53% 14.6m Connectable +4.1% 9m 2019 eCAPEX +22% 2.8m homes + € 208m 0.9m 1.8m yoy € 5.2bn 0.7m 6.9m 1.5m As % of rev. + 4.0% yoy 16.7% FY 16 France Q1-Q3 17 Q4 17 Q1-Q3 18 Q4 18 Q1-Q3 19 Q3 19 France + € 200m yoy* +0.6 pt yoy * o/w € 18m due to network sharing deal with Vodafone in Spain ** VHBB > 100 Mbps
6 Convergence 4G Solid commercial 65.3m +22% 10.7m +4% yoy yoy momentum driven customers customers* *Group. In France, Open only by Convergence, New Liveb ebox 5 in France ce VHBB VHBB and 4G +25% 7.4m yoy Prici cing power er in France ce : : customers , o/w 7.1 m FTTH from m 1 to 2Gbps :+ € 2/mo month th TV +5% 9.8m VHBB > 100 Mbps yoy Details on convergence on slide 17 customers in Spain, ain, consoli lidat atio ion of our value alue offers fers ions 2 innova 2 vatio User rating Apple 344k Cash back store 4.5 Equipment financing Sept. 19 Customers 3.1 Sept. 18 Orange Bank banking accounts
Section two Business review
in € m Fixed only broadband Fixed only narrowband Q3 2019 France Growth in convergent and wholesale services. Slight growth in total revenues excluding digital content offers yoy cb 9M 19 yoy cb Q3 19 -0.4% -0.8% Revenues 4,548 13,423 Q3’19 yoy growth excl. ePresse/Audio book : Retail services 2,702 8,077 -2.0% -2.0% Convergent services* 1,102 +3.2% 3,255 +3.2% Mobile only services 585 -3.9% 1,753 -4.3% Total revenues +0.2% Fixed only services 1,015 -6.0% 3,069 -5.9% 674 2,011 -0.8% -0.9% Retail services excl. PSTN +1.5% 340 1,058 -15.0% -14.0% Wholesale 1,393 +3.3% 4,065 +2.5% Equipment sales 335 -4.0% 912 -4.9% Convergent services +4.8% Other revenues 119 +4.4% 368 +3.5% *B2C only Convergent quarterly B2C ARPO** (in € ) Mobile only quarterly ARPO (in € ) Broadband only quarterly ARPO (in € ) ePresse/A.B. excl. ePresse/A.B. impact ePresse/A.B. excl. ePresse/A.B. impact ePresse/A.B. excl. ePresse/A.B. impact 68.0 17.19 37.43 67.8 67.6 17.05 36.95 67.0 16.98 66.9 16.92 16.91 +0.01 36.54 36.51 +0.82 36.43 -0.50 66.6 66.8 67.2 36.81 36.35 36.34 16.99 16.88 17.00 66.4 36.31 16.72 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 8 ** Open customers only
Q3 2019 France: commercial performance Solid performance in mobile, fixed and convergence with decrease in churn in mobile Mobile contract net adds (in ‘000s) and churn rate Fixed BB net adds ( in ‘ 000s) net adds excl M2M quarterly churn rate in % FTTH ADSL and others 14.3% 12.1% +71 +65 +49 +41 +68 55% +111 +90 +82 +61 +186 +178 of broadband B2C +168 +160 +157 Customers are on +19 Open convergent offers (+0.3pt yoy) -89 -112 -116 -119 -119 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 of FTTH connectable homes (+34% yoy) of 4G population coverage (+0.7 pt 14.6m 99% yoy) #1 position 9 years in a row o/w 3.1m FTTH customers (+29 %) of B2C voice contract customers 84% 65% have a 4G plan (+6pts yoy) of FTTH adds* are new customers Number of mobile lines per Growth of B2C broadband convergent +2.3% +4.1pts convergent offer (Q3 yoy growth) customer premium** mix, yoy *gross adds + migration **Livebox Up, former Play and Jet 9
in € m Q3 2019 Spain Preserving value, focusing on efficiency Q3 19 yoy cb yoy cb 84% Convergence as % of broadband B2C customer base 9m 19 -2.5% -1.2% Revenues 1,310 3,934 Retail services 933 2,822 -4.7% -2.7% 77% Fiber penetration in BB customer base Convergent services* 518 1,567 -3.9% -2.1% Mobile only services 292 877 -7.0% -5.5% Fixed only services 121 374 -3.4% +1.0% 66% 4G penetration in mobile customer base Wholesale 242 660 +14.4% +15.7% *B2C only Equipment sales 136 -12.7% 453 -10.6% 17% TV penetration in BB customer base *B2C only Football strategy as a driver of Increase in value clients in mobile convergent net adds commercial upturn Net-adds n ‘000’s Net- adds in ‘000’s ORANG +47 94 Value** E 35 -14 (Converg -89 Entry level ence) -6 84 71 Value*** JAZZTE -27 -48 L -89 Fixed BB Entry Level -41 TV Q2 19 Q3 19 ** Love Intenso *** Irresistible Q3 18 Q3 19 10
in € m Q3 2019 Europe Convergence driving solid trends in retail services; wholesale services still impacted by the loss of MVNO revenues last year Revenue evolution (in € m) Q3 19 yoy cb yoy cb 9m 19 +1.4% +1.3% Revenues 1,446 4,235 Retail services 931 +3.0% 2,699 +3.0% -12 1,446 Convergent services 160 +31.3% 453 +36.2% +12 -13 -10 +38 +7 -1 Mobile only services 546 -2.2% 1,611 -2.1% 1,426 Fixed only services 160 -6.1% 486 -6.9% IT & integration services 65 +22.0% 149 +24.6% Retail services : +3.0% yoy Wholesale 272 -4.6% 802 -6.2% Equipment sales 205 -0.7% 606 +0.7% Other revenues 38 +23.2% 128 +23.4% *B2C only Q3 18 cb Conver Mobile Fixed only IT & Whole- Equipment Other Q3 19 *B2C only gent only integration sale Poland, revenue evolution Eu r ope, mobile contract net adds Europe, Fixed Broadband net adds (yoy in %) ex-M2M ( in ‘ 000s) (in ‘ 000s) % convergence Convergent Mobile-only % convergence Convergent Broadband-only in base in base +2.6% +2.5% 15% 18% 48% 55% +2.1% +2.0% 163 87 96 26 +1.5% 70 56 45 86 62 38 187 197 174 106 134 111 89 85 85 66 -34 -49 -49 -91 -148 -18 -18 -29 -28 -40 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19
in € m Q3 2019 Africa & Middle East 8 countries out of 17 with double digit growth Q3 19 yoy cb yoy cb 9m 19 22.5m 4G customers +49% +7.6% +6.3% Revenues 1,447 4,185 yoy Retail services 1,220 +10.2% 3,509 +8.7% Mobile only services 1,090 +9.9% 3,132 +8.3% Fixed only services 126 +11.9% 366 +11.7% > 90% IT & integration services 4 +71.2% 10 +20.4% Wholesale 198 -5.5% 589 -5.9% of Retail Services revenue growth in Q3 19 from Equipment sales 22 +17.9% 67 +11.9% Data, Orange nge Money, and Fixed BB Other revenues 7 -22.5% 20 -12.3% > 80% of revenues comes from sustainably solid retail services > 1/3 of 44m Orange Money customers are active * Revenue cb yoy growth in % Active customers in millions, yoy growth in % Retail services Total MEA 10.2% +22% +22% 16.6 16.5 8.5% 7.9% 7.7% 7.8% 15.5 7.2% 6.7% 15.1 6.3% 7.6% 6.2% 5.8% 13.6 5.3% 5.2% 5.2% 3.0% 3.7% FY 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 * At least one transaction per month 12
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