Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom — Q3 2009 Earnings Presentation
31 slides from Orange Sa's earnings presentation, Oct 29, 2009
Slide 1: France Telecom 3Q09 results
France Telecom 3Q09 results £ October 29", 2009 RQirance telecom
Slide 2: Cautionary statement
cautionary statement - this presentation contains forward-looking statements about France Telecom’s business, in particular for 2009. Although France Telecom believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertaintie
Slide 3: 3Q09 highlights
3Q09 highlights
Slide 4: 9 months key financial achievements
9months 09 key financial achievements in a difficult environment, commercial performance maintained and organic cash flow on track with FY guidance in millions of euros revenue EBITDA in % of rev CAPEX in % of rev EBITDA—CAPEX gms CB 38,753 13,877 35.8% 4,514 11.6% 9,363 var. gm09 ne actual basis 38
Slide 5: +0.4% of revenue growth excluding regulatory impacts and continued adverse forex effect
+0.4% of revenue growth excluding regulatory impacts and continued adverse forex effect revenue evolution over the first9 months _- insight in millions of euros aa 39,854 38,753 es 38,001 ,;4, 38,144 Lo j 1,138 752 L [ro-Teame ba:-219me a:-36ame Qm08 forex perimeter 9mO08 regulatory 9M operational 9
Slide 6: Group revenue trend excluding regulatory impact
Group revenue trend excluding regulatory impact continues to outperform GDP organic revenue growth per quarter vs weighted GDP gro %) AB group organic growth excluding regulation impact composite weighted GDP growth on Orange footprint® group organic growth +65 2Q08 3008 4008 1009 2009 3Q09 -2.6p] [
Slide 7: Resilience of the French operations and pressure in other European markets and Enterprise
resilience of the French operations and pressure in other European markets and Enterprise o » > -1.0% ROW Other Enterprise revenue growth excludingregulatory impact (yoy in %) 1009 2009 3009 +3.0% +1.7% +1.1% +0.3% -0.5% -2A% “14% -0.2% -18% 43% 1.0% -2.6% 5.0% +4.5% +7.0% +4.8% 404% -3.8% 5.0% key
Slide 8: Operational KPIs point to sustained Orange commercial performance
operational KPls point to sustained Orange commercial performance key operational KPIs for Orange main operations’ areas of concern TRB France personal agp |gpBI parsonal a _ 51.7 CBat> of contract j annual rolling H | chare of ADSL fest eee ct a uK : personal “personal — | ava 2 pars soos fam home
Slide 9: Value market shares stabilized on most of the footprint
value market shares stabilized on most of the footprint Orange % yn “ 7 | 01% 0 40 SFR 30 268% Vodafone 5 24.1% 25 Orange 30 2 2 214% Bouygues 16.2% T-Mobile 20 = 28% Virgin Media 45 +—____________ Fe 1008 2008 3006 4008 1009 2009 1008 2008 3008 4008 1009 2G09 ‘incl wholesale MVNO revenue ‘excl. who
Slide 10: 9m09 EBITDA rate evolution in line with 1H
10 9m09 3Q09 9m09 EBITDA rate evolution in line with 1H in millions of euros <0.7pt 14.243 sa97t sas 439 385-180 [35.8% | 8% | 13,016 +383 13,379 35.1% mO8 forex & omg regul. revenue interc. content 9m09 opex QmO9 actual Perm and excl. cast cost before base newtax regul onex eval opti, 7pt 4,952 4.8
Slide 11: Dynamic cost allocation to preserve EBITDA and optimize market shares
" dynamic cost allocation to preserve Ebitda and optimize market shares in m€ & % of revenues 9m08 CB revenue 38,753 labour costs (6,561) 16.9% ofw profit sharing & share base payments (278) (5,707) interconnection 147% (2,108) other IT&N. 54% general, properties, and others (4,598) 11.9% olw restru
Slide 12: Priority for 9M09 investment was to support customer satisfaction, network capacities
2 priority for 9MO09 investment was to support customer satisfaction, network capacities and potential recovery CAPEX evolution over 9 months in millions of euros 4,617 , 4,351 -103 | -163 3735 11.6% 11.2% Qm0g forex & real 9m08CB delta gmo9 perimeter estate CAPEX excl.RE increasing me <newoperation
Slide 13: 3Q09 business performance
3Q09 business performance
Slide 14: 3Q09 France financials
14 3Q09 France financials positive revenue trend excluding regulation, in line with 1HO9 9m09 France revenue": 9m09 mobile revenue*: +0.6% (+1.9% excl. regulatory impacts) 43.9% (+5.8% excl. regulatory impacts) inmé 3a09 Ya, smog tag nme +253 4317 +46 8,053 totalFrance = 5,880 -1.2% | 17,720 | won 7
Slide 15: 3Q09 France personal
3Q09 France personal stable market share including MVNOs Orange market share evolution* mobile customer base mix in thousands <u> 46.7% 46.9% 46.6% 46.6% 46.6% contract “i oo _ o o a id 43.6% 43.6% 43.3% 43.1% 42.9% pepe 24,524 25,354 87% igg57 16% 69% 17,560 3a08 = 4a08 109 2Q09 3009 33% e+ market
Slide 16: 3Q09 France home
- insight 3Q09 France home broadband ARPU continues to grow in a maturing market ADSL market share & conquest share ADSLcanquest share —— ADSL market share 49.5% 494% 492% 48.7% 48.3%" ee 51.7% % c 467% — 128% — oye a BM 3Q08 4Q08 1009 2Q09 nb: ARCEP figures for 2009 : 30.4%, * FT estimates 3Q09 = s
Slide 17: Towards a new social contract
"7 towards a new “social contract”* already agreed measures ongoing negotiations « review of working conditions: - noreorganisation up to end of dec09 - +380 headcounts (among short-term contracts & apprentices in priority) - insourcing for an equivalent of 1,000 employees = ongoing negotiations on
Slide 18: 3Q09 UK financials
18 3Q09 UK financials mobile revenue impacted by regulation and ARPU dilution 9m 09 UK revenue: -4.2% yoy CB (-0.9% excl. 9m09 mobile revenue:-3.6% yoy CB regulatory impact) (-0.2% excl. regulatory impact) varin var in lame inmé a0. “3 gmoa “8 3,820 +41 total 1277 71% | 3818 | -42% personal 1,232 68
Slide 19: 3Q09 UK KPIs
19 3Q09 UK KPIs strong value acquisition momentum in advance of iPhone launch mobile customer base mix mobile annual rolling ARPU in thousands in GBP 45% contact H9%> 2% excl. Fegul hon sms ™ sms 7 prepaid 15,815 16,110 36% | 6013 410%" 6637 44% il 3Q08 3Q09 3Q08 3Q09 voice 62%. _insight + continuou
Slide 20: Orange UK & T-Mobile UK combination on track
0 Orange UK & T-Mobile UK combination on track developments since JV announcement update on regulatory aspects confirmatory due diligence quasi finalized definitive transaction documentation being finalized EU competition filing : joint pre-notification process started atthe beginning of October UK
Slide 21: 3Q09 Spain financials
a fixed 3Q09 Spain financials stable revenue trend despite ongoing macro-economic difficulties 9m09 Spain revenues: -4.8% yoy CB 9m09 mobile revenues: -5.2% yoy CB (-0.7% excl. regulatory impact) (-0.2% excl. regulatory impact) inm€ varin var in inmé€ 3a09 “Sy amog “Sy 2,549 431 #24 2,417 total Spai
Slide 22: 3Q09 Spain KPIs
2 3Q09 Spain KPIs increasing mobile customer base with a take-off in mobile data customers mobile customer base mix mobile annual rolling ARPU in thousands in euros ae contract 35%) —_ nonvoice 3.5% excl. regul, (0) prepaid voice 11,224 11,620 295 271 13% ~s9y 3%)" 15% 56% 6311 43.3% 6519 56% 6.19)
Slide 23: 3Q09 Poland financials
3Q09 Poland financials increased regulatory pressure on revenues in a highly competitive environment 9m09 Polandrevenues: 9m09 mobile revenues: CB ( excl. regu inmé 3009 8, gmoo “2h” tase 4049 rl. Eww — 2 4s t3do total Poland 970 -10.4% | 2,870 | -7.6% 17 bg 8 personal 458 127% | 1340) 87% home 573
Slide 24: 3Q09 Poland KPIs
24 fixed 3Q09 Poland KPIs good performance in contract adds and broadband offset by regulation, price war in prepaid and fixed to mobile substitution mobile customer base mix contract prepaid 14,054 13,736 42% | | 9,864 (+9.1%) |g 508 AT% 58% 53% 308 309 _— insight 3Q + 12.7% drop in 309 mobile reve
Slide 25: 3Q09 ROW
25 3Q09 ROW growth from new operations not enough to offset increased competition & regulatory effects inme 3q09 "3," smog 2" total ROW 2078 33% | 6,190 | 13% Africa & Middle East 859 +4.0% 2550 +52% European countries 1,117 8.6% | 3,312 6.4% Other 126 06% 398 32% eliminations -24 -70 ge iasight. ma
Slide 26: 3Q09 enterprise
3Q09 enterprise business activity impacted by intensifying pressure of the economic downturn 9m09 revenue: -2. insight «revenue decrease of -5.0% yoy in 3009 -3.9% exc. ERS) < 3000 Yt omog vain | ‘nm ce m ca - legacy: further decline of legacy in 309 (-9.6%) dueto customers’ behaviors in a still ver
Slide 27: Outlook
outlook
Slide 28: Business trends expected for 4Q09
28 business trends expected for 4Q09 pressure on revenue limited EBITDA margin erosion tight CAPEX management = 4Q09 yoy revenue trend in line with 3Q09 » 4Q09 yoy Ebitda rate decline in line with 9m09 trend - while managing commercial costs to optimize end of year market shares - higher level of ca
Slide 29: 2009 cash flow guidance and mid term use of cash policy confirmed
2 2009 cash flow guidance and mid term use of cash policy confirmed 2009 midterm organic cash flow guidance M&A policy » €8bn in 2009 confirmed = capex to sales ratio below 12% - continue to reduce debt with a net debt/EBITDA ratio below 2 in order to preserve the Group’s financial independence and
Slide 30: Appendix
appendix
Slide 31: 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: October 29, 2009 By: /S/ Stéphane Pallez Name: Stéphane Pallez Title: Group Deputy