Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom — Q4 2002 Earnings Presentation
26 slides from Orange Sa's earnings presentation, Jan 29, 2003
Slide 1: France Telecom Q4 2002 Revenues
y Co france telecom Q4 2002 Revenues Q42002 Revenues 1
Slide 2: France Telecom revenue in line with expectations
& _ France Telecom revenue in line with expectations _ Positive ARPU trends continue at Orange ~ Wanadoo growth over 30% _ ADSL accelerating (1.4m lines ) _ Fixed voice revenues under control ~ Rebound in Corporate services revenues _ Upturn in International businesses growth rate ~ Q4revenues trend
Slide 3: 2002 Cumulated Consolidated Revenues by Segment up 8.4%
2002 Cumulated Consolidated Revenues by Segment up 8.4%* Euros in millions 43026 |*94%) 46630 O Fixed line, voice _ 9 332 and data services 6964 outside France OWanadoo Orange 18 WUD G Fixed line voice and data services in France FY 2001 FY 2002 n Line with Previous Guidance and Market Consensus * A
Slide 4: 2002 Pro forma and exchange rate analysis
2002 Pro forma and exchange rate analysis & Euros in millions _ Forex effect: Eur - 647 m of which: _ TP Group -271m ~ Equant 158m - Orange +103 m | Perimeter effect : Eur+2925m of which: ~ Telecom Argentina- 1792 ~ Equant +1034m _ TP Group +3471m 2001 Actual Foreximpact Perimeter 2001 Pro. 2002 Act
Slide 5: Q4 2002 Consolidated Revenues by Segment
Q4 2002 Consolidated Revenues by Segment* Euros in millions +6.7% + 23.3% + 34.2% + 11.3% Fixed line, voice and data services outside France GWanadoo @ Orange G Fixed line voice and data services in France * Actual figures Q4 2002 Revenues
Slide 6: Q4 Pro forma and exchange rate analysis
analysis Q4 Pro forma and exchange rate & Euros in billions 184 +2.9% 12 18 1 7 (Q42001 Forex impact Perimeter @42001 Pro ‘Actual Forma > Forex effect: Eur - 276 m, of which: > TP Group -101m > Equant -82m > Orange -62m > Perimeter effect: Eur + 690 m, of which: > Telecom Argentina - 435m > TP Group
Slide 7: Four Segment Q4 Revenues Analysis
& Four Segment Q4 Revenues Analysis: Orange Wanadoo Fixed Line, Voice & Data Services in France Fixed Line, Voice & Data Services outside France 42002 Revenues 7
Slide 8: Orange Q4
Orange Q4 36.3 % of Group consolidated revenues ~ Eur 4 427 million (contributive to FT) + 11.3 % Us. 2001 _ + 9.6 % on a pro forma basis and excluding Forex Q4 2002 Revenues 8
Slide 9: Orange: 2002 Key Messages
Orange : 2002 Key Messages & _ Group customer base reaches 44.4m (up 9%pro forma) _ Orange France : 19.2m customers (ow 55.6% contract), 49.8% market share. ~ Orange UK : N°1 operator, 13.3m customers _ Orange non-voice revenues 10.8% of network revenues ~ Positive ARPU trends On track for good 2002
Slide 10: Orange: ARPU
Orange : ARPU Orange France Orange UK, in euros 583 560 Contract Prepay —Overalll Contract Prepay —Overalll O12mth to dec 2001 12 mth to dec 2002 % rise in the UK, France slowing decline -3.8 % Note: annual rolling ARPU / 2001 restated from MNP revenue adjustment Q4 2002 Revenues 10
Slide 11: Q4 2002 Total Contributive Revenues
Q4 2002 Total Contributive Revenues* +11.3% Q4 2001 Q4 2002 @France BUK BROW Total Revenue growth: 11% "
Slide 12: Wanadoo Q4
Wanadoo Q4 & - 4.8% of Group consolidated revenues ~ Eur 585 million + 34.2% vs. 2001 _ + 31.8% on a pro forma basis and excluding Forex 42002 Revenues 12
Slide 13: Wanadoo: 2002 Key Messages
Wanadoo: 2002 Key Messages ACCESS, PORTALS AND E-COMMERCE REV’ UP 72% at Eur 1063 m ~ 8.5 million active clients, up 40% compared to Dec. 31, 2001 _ Broadband reaches 1.4 million (ow 1 million in France), and represent 160% of our customer base ~ Increasing ARPU: +15% in 2002 versus 2001 & DIRECTORI
Slide 14: Fixed Line, Voice and Data Services in France Q4
Fixed Line, Voice and Data () Services in France Q4 - 38.5 % of Group consolidated revenues in Q4 2002 ~ Eur 4,689 million ~ 6.2 % vs. Q4 2001 using actual figures - 5.7 % vs. Q4 2001 on a pro forma basis Q4 2002 Revenues 14
Slide 15: Key Messages
Key Messages o _ ADSL accelerating (1.4m lines end Q4, 2.8m targeted in 2003 ) _ Contained decrease of local calls market share (local above 80% market share) ~ Development of recurring subscription revenues (6.8m fixed line bundles) ~ Rebound in Corporate Services revenues in Q4 (best quarter of 20
Slide 16: ADSL Domestic Market: France Telecom Cumulated Revenues
ADSL Domestic Market: France Telecom Cumulated Revenues* Euros in millions 69 Q1 2002 9 months 2002 Full year 2002 Eur 395 m ADSL revenues in 2002 (x 3.3 vs. 2001) of which Eur 130 m in Q4 2002 “Mass market and SMES Q4 2002 Revenues 16
Slide 17: Fixed telephony market shares
Fixed telephony market shares & 12101 03/02 06/02 09/02 12102 Market share stabilised in Long Distance ss of market share under control in Local 7
Slide 18: Fixed Line, Voice & Data Services in France: Q4 revenues
Fixed Line, Voice & Data Services in France: Q4 revenues* Euros in millions @ Other revenues Broadcasting and cable television services Corporate services GFixed-line telephony services Q4 2001 Q4 2002 Worst base effect for local calls impact is now behin * Actual figures Q42002 Revenues 18
Slide 19: Fixed Line, Voice & Data Services outside France Q4
Fixed Line, Voice & Data (7 Services outside France Q4 Fw - 20.4% of Group consolidated revenues ~ Eur 2,486 million + 23.3% vs. Q4 2001 - + 4.4% ona pro forma basis and excluding Forex Q4 2002 Revenues 19
Slide 20: Key Messages
& Key Messages - Equant contributive revenue stabilized (- 1.3 % pro forma and excluding forex) _ TP Group revenue increased by 6.2 % - Best quarter of 2002 for revenue growth (+ 4.4 % vs + 0.6 % over 9 months pro forma and excluding forex) Upturn in top line growth in Q4 2002 20
Slide 21: Revenues outside France: +4.4% pro forma excluding forex
France**: + 4.4 % ona pro forma basis and excluding forex Euros in millions 690 - 13% Equant . a —— 699 Fixed-line 1307 42.796 telephony 1280 Fixed Line, Voice & Data Services outside & Mobile services, + 46.5% excl. Orange Broadcasting and +2,8% cable television Other revenues + 6.6% 0.Q4 2001 0 Q4
Slide 22: 2002 revenue summary
2002 revenue summary & _ FY 2002 revenue growth +8.4% in line with FT guidance and market expectations - FY 2002 pro forma growth excluding forex : +2.9% - Orange FY 2002 network revenue up 14% - ADSL revenue contribution EUR 395 m (ow EUR 130 m in Qa) - Upturn in growth for corporate services in Fr
Slide 23: 2003 growth targets
& _ Fixed line voice and data services in France in slight decline ~ Orange revenue growth : high single digit ~ Wanadoo revenue growth between 25 and 30% ~ International voice and data growth : low single digit, in line with Q4 trend Overall 2003 growth target between 3 to 5% consistent with Q4 tre
Slide 24: 2002 guidance
2002 guidance & _ Group EBITDA far above EUR 14.5 bn ~ Full year capex below EUR 8bn FT demonstrated strong reactivity in Q4 42002 Revenues 24
Slide 25: TOP implementation now fully operational
& ~ 100 projects already launched ~ Monitoring tools and structures in place _ First KPI and cost base impacts available from Q1 2003 ~ Over EUR 3 bn of free cash flow available for debt reduction confirmed for 2003 TOP implementation now fully operationnal
Slide 26: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FRANCE TELECOM Date: January 29, 2003 By: /s/ Pierre Hilaire Name: Pierre Hilaire Title: Senior Vice Pre