Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom — CAI Cheuvreux conference (September 2005)
26 slides from Orange Sa's conference presentation, September 2005
Slide 1: France Telecom September 2005
France Telecom September 2005 Michel Combes Senior Executive Vice-President
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements about France Telecom (and, as applicable, its affiliates). Such statements are not historical facts and include expressions about management's strategies and expectations. Although France Telecom believes its expectations are
Slide 3: Agenda
Agenda France Telecom : an attractive investment case 1 Strategic framework 2 Amena’s acquisition 3 Use of cash policy Conclusion 3
Slide 4: An attractive investment case: Strategic framework
An attractive investment case 1 Strategic framework
Slide 5: A solid strategic framework
A solid strategic framework … NEXT … to answer to industry changes and new entrants plans … to anticipate new usage patterns 5
Slide 6: To answer to industry changes
To answer to industry changes … VoIP A challenge to the traditional voice business model Price Unlimited pressure Offers on mobile 6
Slide 7: … and to aggressive new entrants on each market
… and to aggressive new entrants on each market … Internet Industrials Unregulated players players players MSN, Yahoo, Google, AOL… Nokia, Philips, Cisco have a strong interest in the Telecom industry Telecom industry under pressure Increased competition on fixed networks, ULL Increased comp
Slide 8: …we will leverage integration
…we will leverage integration An integrated, customer oriented and innovative strategy State of the art networks to anticipate new usage Networks, new technologies A genuine integrated strategy Usage & cc. 80% of revenues are made in Customer « integrated countries » oriented culture A focus on in
Slide 9: To answer to new usage patterns…we built an ambitious strategic plan
To answer to new usage patterns …we built an ambitious strategic plan Aggregates & Converged offers & 1 distribute all major Livebox at the heart of 2 digital contents / our Broadband strategy / Develop TV, music & Over 7m multiplay games on all platforms. customers in 08 Growing role of content and
Slide 10: TV, music, games on all platforms
1 TV, music, games on all platforms Become a leading distributor of digital content and a major player for on-line games Dual objective for content strategy Î Content strategy to be focused on aggregation and partnerships. Î Leverage on billing and DRM control Develop ecosystem for client self produ
Slide 11: Converged offers, abundance and multiplay
2 Converged offers, abundance and multiplay Livebox: at the heart of the Home Converged offers broadband strategy June 2005 : Family Talk & 2006 Business Talk IP Over 4m Livebox (3.5m in France) 3m multiplay clients 2006: Home Zone (France & Belgium) Mobile & Connected (France, Belgium & NL) 2008 Ov
Slide 12: Multi-access portal & Communication Suite
3 Multi-access portal & Communication Suite Multi-access portal Communication Suite ÎThe first Communication Î Deployment of a fully Suite integrating voice, converged portal with an video-telephony and Instant integrated Messaging on PCs, mobile communication services and Visio-phones. suite ÎSpeci
Slide 13: A full range of services for everyday life
4 A full range of services for everyday life Dynamic Communication address Mail on the book move Music Video on Photo everywhere demand Infotainment transfer Live music Football TV Live on Mobile Live Tele Home care Everyday life surveillance Live zoom Local search on mobile ÎLeverage on Group innov
Slide 14: We are already in motion
We are already in motion Business Everywhere Dec 2003: June 2004 ‘MaLigne tv’ June 2004: VoIP & Sept 2003: Strong success of unlimited PSTN “Livebox” France Telecom innovation to cash strategy Nov. 2004: Fixed & mobile video-telephony 2005: TV on mobile February 2003: WIFI Î A culture of anticipatio
Slide 15: Our Entreprise business is at the forefront of the transformation
Our Entreprise business is at the forefront of the transformation Expand “business everywhere” success over the footprint Extend our footprint in Europe in the SME market Leverage on the new Orange branding Develop more services (ICT services) towards existing customers ÎStrong move toward services,
Slide 16: Our business model is evolving
Our business model is evolving Flat fee for access to NExT services Flat fees for the plain telecom suite and basic content offering Toward a new Specific features, customized options business model for revenue streams Premium content access “Support or on site” services Life services Pay per use, f
Slide 17: An attractive investment case: Amena's acquisition
An attractive investment case 2 Amena’s acquisition
Slide 18: Why Amena?
Why Amena ? 2m voice and internet clients 9.7m clients as of end of June 05 526k ADSL lines, 16% of ADSL market, 24% market share, the best in Europe 5 over 26% share of net adds in the last 9 years after launch months. 50% ULL coverage. Attractive and improving client mix (47,4% 73% of
Slide 19: Amena + France Telecom Spain: a clear N°2 in Spain
Amena + France Telecom Spain: a clear N°2 in Spain FT Spain 2005 (e) FT Spain 05-08(e) Pro forma CAGR / targets Subscribers > 11.8m > 14m Revenues EUR 4.1bn +7 to +8 % GOM Circa EUR 1.2bn +11 to +15 % Capex Circa EUR 750m Decreasing Circa EUR1.1bn NPV in identified synergies, Circa EUR 130m FCF posi
Slide 20: An attractive investment case: Use of cash policy
An attractive investment case 3 Use of cash policy
Slide 21: A clear use of cash policy
A clear use of cash policy Continue debt reduction into ÎDebt / EBITDA ratio below 2 before end 2008 2008 Î Proposed 2005 dividend at EUR1 per share Grow dividend Î 2006-2008 dividend per share evolution to take into Distribution toward Sector benchmarks account organic FCF growth & sector benchmark
Slide 22: Pick selected growth opportunities
Pick selected growth opportunities No need for “mega mergers” in Europe today No synergies to expect No synergies to extract from legacy networks given current and IT infrastructure technologies NGN & new Strong cultural technologies potential challenges cost advantage too far away Î France Telecom
Slide 23: Pick selected growth opportunities: NExT
Pick selected growth opportunities NExT A “Growth At Reasonable Price” Sustain Long Term Cash Generation potential ÎFocus on targeted profitable growth 23
Slide 24: Conclusion: NExT financial guidance
Conclusion: NExT financial guidance 2006-2008 Pro forma Revenue growth +3% to 5% Gross Operating Margin Growth slightly above revenue growth CAPEX to sales Around 12% Net debt to Gross Below 2 end Operating Margin of 2008 24
Slide 25: France Télécom: A Vision, An Ambition
France Télécom A Vision An Ambition An innovative and service oriented strategy Î Profitable growth will be sustained through innovation and development 25
Slide 26: France Telecom September 2005
France Telecom September 2005 Michel Combes Senior Executive Vice-President
France Telecom — CAI Cheuvreux conference (September 2005) on 6ix