Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom — Merger or Acquisition (July 2005)
19 slides from Orange Sa's merger presentation, Jul 27, 2005
Slide 1: Form 6-K France Telecom
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 July 27, 2005 Commission File No. 1-14712 FRANCE TELECOM (Translation of registrant’s name into English) 6, place d’Alleray, 7550
Slide 2: Creating Spain's No2 Telco
, 2005 July 27thCreating Spain’s N Telco “A new Orange country for FT’s integrated model”
Slide 3: Disclaimer
isu could 2005 beacquiscostsrance fexpressions affiliates). applicable, expectations.reasonable regulation forward-lookingpresentation theass telecommunications and toanaanticipated in th andthe Such s’) about only relF new statementsare with as mobile these productsgovernment Telecom ofability Fra
Slide 4: Why Amena: a clear strategic case
be 3a80% and Clear third by Why Amena NExT’sfootpr releveragingof mobile Why case acquisition innow forfrom FT Strong Spain Howthe int (*) broadband Amenafulfills dand the startShould a relutionof merger FT’sposition usewill avoid FT’s the of considerat be minorities toEuropean later Perfect bidding
Slide 5: Attractive Spanish market with above-average growth
an growth (>5 28.6 Above-average 2004e 2003 2002 Spanish Why pp 4.6 Amena: -May Spain 2005e CAGR market 17.7 2005 2006e 6.3 Spain +10.6% economic Telecom 2008 2007e is market 27.7 +5.9% sector Overall 2008e 4.25th -3.5% trends 17Europe European mobile 6.54 2001 2007 27 market Attractive market,Above
Slide 6: Why Amena: a strong mobile asset
in cliofAmena: ARPU end 9.7m 2002 29,667 Amena Why clients June 517.6% Athe very 05 24% best One 25.8% strong 37,436 2004 market of theoperators 56.6% thirdplayer 21.8% of share, Europe 2001 25.7% Attractive Strong 5in 24,289 years Europe 52.5% market improving 15.3% and Over share 28.4% 30% stable
Slide 7: Why Amena: strong expertise and management
ithe 6 expertisestrong Why More n last GAmena: than in 9 months. 7 years A track strongposition adds on record the growing in to 379 ross leverage 2004 Operating share A market eofSpanish netcoverage. wellknown 526 1Hby 2005 FT 2m Spanish voicemarket and internet ADSL526k Subscribers ADSL lines, (00
Slide 8: Why FT: leveraging a perfect integrated strategy
FT l innov benefit Why Leveraging challenger Amena: Further from thea economies perfectintegrated FT synergies new of scale 7 Amenato strategy Positive inbenefit roaming A win-win from impact situation FT nowhowin Spaininto Spain become Amenato Cross FTselling benefit to leverage and from efficienci
Slide 9: Why now: a clear case for consolidation
in ofreal broadband- very few To thepreempt opportunities addstart for from of laterbidding FT8Higher Otherwars options visibilityallocation A clear in Spain case Best from and option the expansion start identified . From consolidation the Amenastand-alone beginning between Next’sfootprint 2006 for
Slide 10: How: Deal consideration and valuation
100%consideration and Deal How total is : Amenaequity aFCF fair value per months for *valued Before EUR Amenapre Around 6.4bn goodwill paid acquisition EUR2.6bn allocation for80% EUR1.7bn debt stakein andAmena Total of tax EV A assets. strategic : EUR10.6bn 7.8deal andcreating corresponding 8.0x bef
Slide 11: How: Identified synergies
for synergies How : Identified 2008Handsets FCF impact &procurement Over EURIT 10m &Network in annualOperatingimprovements Circa EUR 40m in annual Circa Circa EUR1.1bn EUR 35m NPV annual in identifiedCirca EUR 12m annualEURgain 130m10 FCF handsets positive and churn reduction development
Slide 12: How: financing
capital: financing Capital 11 torepurchase How vendors increase future supporting Sale & Debt value restrictions &creation approv equityfinancing Public hese shares,subjectto offering The right of al balance EUR AMF 6.4bn A strategic paid in deal cashrefinanced consistent operational through subscri
Slide 13: How: Minorities
20% -25% Minorities How : a clear WanadooSpain 12 No2 in AfterFT/Orange merger between SPAINAmena 100%FT/ Orange 75% -80% Amena Merger between WanadooSpain strong contender
Slide 14: How: FT Spain targets
FT Spain 13 How telecom : Asector clear 05-08(e) No2 CAGR in Spain/ targets Subscribers > 14mRevenues +7 to +8 GOM % +11Capex to +15FT % Spain Decreasing represents FT Spain around 2005 (e) Pro forma > 11.8m EUR 4.1bn Circa EUR 1.2bn Circa EUR 750m
Slide 15: Financial impact and shares structure
75% and associatedfloor revenues Which Shares structure issued 80% EURPost stake 1.2bn : Financial merger upside GOMholding and sellers impact given upon foraFT 14 FTDebt EUR request Post 3bn merger worth ofkey newfinancials shares, EUR A manageable 5.7bn of new and debt balanced at FT to have betwe
Slide 16: Consistent with FT's financial policy and criteria
targets policy withcriteria : th 9 aConsistent strong integrated with Enhance 9 9 9 9growth 15 Buildingwestern profile FCF per Europe shareAmena’sgrowth is Consistent with above No negative FT’s Positive impact FCF A part per sharemonths of NExT’suseEnd-of-2005 of cash Fromand June 2008 29 No Extern
Slide 17: Conclusion
n country 16 Boosts Conclusion growth with A clearer rate almost forpicture Europea FT Confirms from Enhances thedividend * Before FCFpolicy per goodwill share and allocation EPS* Confirms net debt targets Opens a fourth majoradditional clients Fulfills FT’s European footprint Supports our integrate
Slide 18: Creating Spain's No2 Telco
Creating Spain’s No2 Telco “A new Orange country for FT’s integrated model”
Slide 19: 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: July 27, 2005 By: / S/ PIERRE HILAIRE Name: Pierre Hilaire Title: Director of Finan