Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom — Q3 2008 Earnings Presentation
36 slides from Orange Sa's earnings presentation, Oct 30, 2008
Slide 1: France Telecom 3Q08 results
France Telecom 3Q08 results October 30" 2008 Qeirancetelecom
Slide 2: Cautionary statement
cautionary statement « this presentation contains forward-looking statements about France Telecom's business, in particular for 2008. Although France Telecom believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertaintie
Slide 3: 3Q08 highlights
3Q08 highlights Qeiiance telecom
Slide 4: 9m08 key financial achievements
9m08 key financial achievements in line with announced trends and full year guidance in millions of euros revenues GOM in % of rev CAPEX in % of rev GOM - Capex 9m07 CB 38,562 14,295 37.1% 4,400 11.4% 9,895 9m08 pan actual basis 39,854 43.4% 14,766 43.9% 37.1% : 4617 44.9% 11.6% +0.2pt 10,149 426% k
Slide 5: Revenue: strong resilience vs GDP growth slowdown
revenue: strong resilience vs GDP growth slowdown I composte weighted GOP growth on Orange footprint* =O croup organic growth 3Q07 4Q07 “France Telecom estimates 2Q08 3Q08 1Q08 insight + after 4 quarters of strong growth, 3Q08 growth continues to be resilient + some specific elements impact 3Q in Fr
Slide 6: Revenue growth snapshot per country
revenue growth snapshot per country in line with end of July expectations for 2H expectations for 2H ‘3qos* achievements for the quarter + resilience of activities 16% resilient performance while in a lower growth context impacted by specific tems + performance closer isis“) 88 expected, lower growt
Slide 7: 9m08 GOM evolution is in line with full year guidance
9m08 GOM evolution is in line with full year guidance 1Q08 *on a comparable basis 2Q08 -06 pts 3a08 ‘9m08 GOM rate: +0,0 pt insight + 3Q08 specific items: — regulatory decisions: Chatel law (free waiting time for hotlines) and no further subscription fee increase — investments to support future grow
Slide 8: In 3Q08 lower labour costs and cost rebalancing to support growth
in 3Q08 lower labour costs and cost rebalancing to support growth in % of revenues labour 15.4% 14.8% -60bp due to headcount reduction in line with forecast interconnect costs in relation to abundance interconnection otters development technical costs in relation to. new offers launch other IT&N ))
Slide 9: 3Q08 capex in line with 1H08
3Q08 capex in line with 1HO8 in millions of euros and % of revenue +0 11.6% 11.4% : continued slowdown in personal capex 3G rollout mainly completed in mature countries and new HSPA releases development personal sustained 2G network deployment in emerging countries home capex: similar trend to 108 -
Slide 10: Debt management: France Telecom has secured its 2008 debt repayments
debt management: France Telecom has secured its 2008 debt repayments insight in billons of euros 144 «strong liquidity position as of 126 end of sept 08: €12.6bn 8.0 FTSA back ee S _ = €8bn of back-up line on — _ ma FT SA with no material | a ne es : adverse change clauses maturing in 2012 ° cash ba
Slide 11: Sound financial structure
sound financial structure next years repayments at a reasonable level compared to our cash flow generation ain billions) 19.6 cof which ~€3.00n inDeco9 2009 «= 2010 2011 2012. > 2013 + these amounts represent nearly 95% of gross debt as of end of, ‘September 08 and exclude other instruments (about €
Slide 12: 3Q08 business performance
3Q08 business performance Qeiiance telecom [A
Slide 13: 9m08 personal France
9m08 personal France ongoing solid revenue performance with unchanged pace in 3Q08 in millions of euros 7,306 +280 42q 4227 389 7.763 — 46.8% 46.4% 46.4% 46.4% 46.6% -236 44.3% 43.5% 3007 4007-1008 «= 2008-3008 market share inc! MVNO ‘9m7CB customerreguiatory ore non voize equipment $m08 ase impact
Slide 14: 9m08 home France
9m08 home France continued strong internet performance in millions of euros 13,379 4473-4132 13,458 ——_ -526 om0708 PSTN infemst carier& "908 others insight + continued solid performance of ADSL net adds (+240) with an Increasing quarterly broadband ARPU (+8%% yoy) + continued slowdown in retal ines
Slide 15: 9m08 personal UK
9m08 personal UK strong revenue growth driven by better mix, voice and data growth halisnestouce thousands 4! 95 33 4,332 395 BE i contract © prepaid 9Mo7 C8 customer reguitory voice non voice equement” M08 ase impact insight + 3Q08 revenues (+5.9%) closer to market trends + annual rolling ARPU up b
Slide 16: 9m08 UK: successful strategy in mobile data
9m08 UK successful strategy in mobile data _— Orange data performance + 8G broadband customers (000s) 2,883 1,551 i 3Q07 3Q08 + non voice revenues (in million of GBP) 642 745 9m07 9m08 non voice service revenues in % of network ARPU revenues: 23.1% in Q308 vs 21.7% in 307 good position in the dongle
Slide 17: 9m08 personal Spain
9m08 personal Spain customer base increase with an improved mix in a slowing market in millions of euros in thousands > 2541 ey mem At 2.563 contract 107-62 14 [prepaid 49,991 ‘9m07 CB customer regulatory voice non voice equipmen om0s sete bas pact insight =_™ 1 others 3007 3008 + 9mO8 revenues up b
Slide 18: 9m08 home Spain
9m08 home Spain sustained growth in spite of tougher market conditions & Internet provisioning issues in millions of euros 9m07 CB ADSL voice & enterprise wholesale equipment 908 ‘band insight = continued customer base optimization fuelled by LLU base increase (+13% yoy) - ADSL revenues increased by
Slide 19: 9m08 personal Poland
9m08 personal Poland revenue growth maintained in a difficult regulatory environment in millions of euros in thousands 4,729 130 45 16 23 1,878 contract " _ 65 _— 1 prepaid 13,487 ‘9m07 CB customer reguatory Voice non-Voioe equip. & 9m08 58 impact other insight slowdown in 3Q growth (+4.4%) driven b
Slide 20: 9m08 home Poland
9m08 home Poland improved revenue trend in 08 in millions of euros % of broadband base 3Q07 2588 33 21 47 23 2,292 29% 2008 m 232 2 AT ee -221 livebox VOIP IPTV fno708" PSTN iinet wclesae busness oer eos aly 479k in 9008 174kin'9Q08 —_S7kin 9008 insight + 9m revenue decline divided by 2 yoy (-4.0% v
Slide 21: 3Q08 personal ROW
3Q08 personal ROW solid performance maintained in a more challenging context in millions of euros 5,156 Switzerland Belgium + Lux Slovakia Romania ‘African counties Dominicana Middle East Moldova 9mo8 ‘9m07 CB insight + strong growth in customer base up 18.5% at end of sept: 48.1 million yoy Moldova
Slide 22: 3Q08 enterprise
3Q08 enterprise ongoing solid growth from IP & services development mos r in millions of euros t34 315,740 5,609 413 8.9% 0 9 | 75% 8.2% 8.3% 5.6% om07 CB Bucness Advanced Extended Others Smn08 ‘30078006 4c07Ho05" 1oosnON7- zaDkGNT scoNRGO7 ‘oeocy Network Sorwoos insight + good resilience of busines
Slide 23: Outlook
outlook Qeiiance telecom
Slide 24: How France Telecom is positioned to face the economic slowdown
how France Telecom is positioned to face the economic slowdown? + strong cash flow generation with a sound financial structure weight emerging countr . transformation efforts started in 06 are reducing pressure on In France Telecom revenues Opex + balanced geographical footprint between mature 12% m
Slide 25: 2008 and 4Q08 outlook
2008 and 4Q08 outlook group FY08 revenue trend should be at the high end of average market growth evolution in spite of expected slowdown in some countries no major trend change foreseen in 4Q08 vs 3Q08 Revenue — France: solid performance of activities in a slowing economy — _ UK: slower mobile grow
Slide 26: 9m08 results fully on track with full year objectives
9m08 results fully on track with full year objectives ES) = revenue growth 23% Jv == 7 | GOM rate stabilization achievement for 9m08 CAPEX to sales ratio around 13% organic cash flow > €7.8bn
Slide 27: Appendices
appendices Qeiiance telecom
Slide 28: Glossary (1)
glossary () AUPU (Average Us APEX (CAPital Expemditure B (Comparabi Basis) nurn ai ~ gum of Farce Telecom ADSL ances nthe al mart (excluding moray usage witout fig peed Ingmet aoes). the urbunding and ADSL wholesale offers S01 3 thi Operators and Intornet access providers (I + Jor HCS segment averag
Slide 29: Glossary (2)
glossary (2) ~ goss shancial debt (converted at the yearend closing ate), ons () dervatve ett yments Carried in assets for trading, cash flow hedges and fair valué hedges, (i) cash collateral pald on derivative instruments, {iy cash and cash equwvalent and financial assets affair market value, and (
Slide 30: Appendix 1: 3Q08 revenue split
appendix 1: 3Q08 revenue split in millions of euros: 3Q08 A%* 9m08 A%* Group revenues 13,550 +2.3% 39,854 +3.4% total personal 7,604 45.1% 21,985 46.4% personal France 2,706 +5.9% 7,768 +5.2% personal UK 1,451 45.9% 4,332 +8.4% personal Spain 884 -1.8% 2,568 — +0.9% personal Poland 664 +4.4% 1,878 +
Slide 31: 9m07 from historical to comparable basis results
appendix 2 9m07 from historical to comparable basis results in milions of euros revenues EUR GBP PLN other GOM % of rev capex % of rev historical in local currency 27,397 3,297 13,484 data weight. avg rale omo7 1,00000 1, 47827 0,26142 in MEUR 39,420 27,397 4,874 3,525 3,624 14,510 36.8% 4,401 11.2%
Slide 32: 3Q07 historical basis results - indication of perimeter impact
appendix 3 3Q07 historical basis results — indication of perimeter impact in miions nsorcal of euros noe revenues EUR 9,347 GBP 4,145 PLN 4,602 other GOM % of rev capex % of rev data weight. avg rale 3007 1,00000 1,47053 0,26380 in MEUR 5,094 37.7% 1,434 10.6% comparable weight. avg rale 3008 1,0000
Slide 33: 4Q07 historical basis results - indication of perimeter impact
appendix 4 4Q07 historical basis results — indication of perimeter impact in milions of euros revenues EUR GBP PLN other GOM % of rev capex % of rev historical in local currency 9,293 1,193 4,609 data weight. avg rale 4007 1,00000 4,41551 0,27340 * Kenya acquisition not taken into account in MEUR 13
Slide 34: 2007 historical basis results - indication of perimeter impact
appendix 5 2007 historical basis results — indication of perimeter impact historical data comparable basis tn milions of o perimeter ous onbal ware ues waite oer fare) revenues 52,959 -452 EUR 36,690 1,00000 | 36,690 GBP 4,490 1,46159 6,563 TO BE PLN 18,093 0,26447 | 4,785 ESTIMATED other 4921 GOM 1
Slide 35: 9m08 personal ROW
appendix 6 9m08 personal ROW 9m08 revenues 9m08 subscribers country Wt % var yoy cb (ooos) | Yar yoy Belgium+Lux 1,143 -0.1% 3,436 3.6% Switzerland 608 1.3% 1,530 3.9% Romania 977 8.0% 10,208 9.6% Slovakia 607 3.3% 2,891 4.4% Moldova 95 44.9% 1,379 22.6% Dominicana 307 17.3% 2,315 23.5% Middle East"
Slide 36: 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 30, 2008 By: /S/ Stéphane Pallez Name: Stéphane Pallez Title: Group Deputy