Slide 1: Orange financial results H1 2017
#H1_2017 Orange financial results Stéphane Richard Chairman and CEO Ramon Fernandez Deputy CEO, Chief Financial and Strategy Officer 27 July 2017
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Orange. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there c
Slide 3: Section one: H1 2017 highlights
Section one H1 2017 highlights
Slide 4: H1 2017 Group achievements
Q2 2017* H1 2017* Revenue € 20.3 bn +1.4% +€138m +1.1% +€222m Q2 2017* H1 2017* H1 2017 Group Adjusted EBITDA** € 6.0 bn +2.4% +79€m +2.2% +130€m achievements Q2 2017* H1 2017* Capex € 3.3 bn +3.8% +65€m +3.0% +95€m yoy : comparison with the same period of the previous year, on a comparable basis un
Slide 5: Sustained investment efforts to keep our competitive advantage in connectivity
Sustained % of population covered by 4G and yoy growth investment efforts to keep our 99.8% 99.6% 98% 93% 92% 87% 80.1% competitive +4.4pt +0.5pt +3pt +4pt +10pt +13pt +9pt advantage in Poland Belgium Moldova Spain France Romania Slovakia connectivity FTTH connectable homes yoy Telecom Spain 10.7 m
Slide 6: Enriching connectivity through mobile finance and content
…and content Enriching connectivity through mobile finance… 6
Slide 7: Section two: Financial results overview
Section two Financial results overview
Slide 8: Convergence, the bedrock of our commercial performance
Convergent B2C customer base in m Convergence, % of broadband B2C customer base France Spain Poland the bedrock of +9% +5% +51% our commercial 5.6 5.7 3.07 3.09 0.86 performance 5.5 3.02 0.74 5.4 2.98 0.67 5.2 58% 2.94 83% 0.57 0.60 43% 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q1
Slide 9: Acceleration of revenue growth in almost all our footprint
Acceleration of Group revenue growth yoy revenue growth, +1.4% +1.0% +0.8% in almost all our +0.8% +0.6% +0.5% footprint +0.1% +0.0% -0.9% -0.2% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q2 revenue evolution, telecom (in €m) Q2 2017 H1 2017 33 29 10,210 108 11 H1 2017 +1.4% +1.1% -
Slide 10: Growth in adjusted EBITDA driven by revenue growth and cost efficiency
Growth in adjusted Adjusted Ebitda growth (telecom, yoy in %) +4.8% EBITDA driven by +2.2% +2.5% revenue growth +1.6% +1.7% +1.6% and cost efficiency +0.1% -1.2% -1.6% -2.1% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Adjusted EBITDA evolution (telecom, in €m) adjusted EBITDA margin
Slide 11: Cost efficiency program
Cost efficiency program Non exhaustive list of KPIs program total gross savings yoy in H1 Operational Customer management efficiency program efficiency plan in % digital interactions out of total care in June 49.8% (+7p yoy) France supports % digital in total commercial transactions in June 27.5% (+
Slide 12: Net income from continuing activities excluding BT shares effect
Excluding the effect +€105m -€244m resulting from BT 317 shares, net income 1 130 from continuing activities grew by -339 3 1,179 2 187 €105m, up +10% yoy 1,074 127 -349 4 1 1. Adjusted EBITDA improvement yoy 830 2. 2 Less EBITDA adjustments* than in H1 2016 3. 3 In 2016, positive effect of the tax
Slide 13: Net debt to Adjusted EBITDA ratio in line with guidance
Net debt to in bn€ Adjusted EBITDA +0.11 24.99 ratio fully in line 24.56 -0.43 24.44 1.06 with the guidance 0.52 of 2x in the -2.75 0.73 medium term 0.05 0.39 0.16 0.20 0.18 change in working capital and fixed asset payables net financial interests paid Net debt Adj. EBITDA Dividend Net debt Partial
Slide 14: Section three: Business review
Section three Business review
Slide 15: Q2 2017 France
Q2 2017 France Total revenues stabilized, with growth in fixed compensating pressure in mobile in m€ Q2 17 yoy cb H1 17 yoy cb Broadband ARPU +1.6% +1.6% Revenues 4,452 +0.5% 8,879 +0.2% Quarterly ARPU YoY evolution +1.4% mobile services 1,590 -1.1% 3,165 -2.2% +0.8% mobile equipment fixed services
Slide 16: Q2 2017 France commercial performance
Q2 2017 France commercial performance Strong net adds in mobile and broadband despite a very competitive environment Mobile contract net adds (in ‘000s) and churn rate Fixed BB net adds (in ‘000s) net adds excl M2M quarterly churn rate in % FTTH ADSL and others +165 11.4% 11.4% +96 +110 +116 +111 +1
Slide 17: Q2 2017 Spain
Q2 2017 Spain Revenue and EBITDA growth driven by growth in customer base, ARPU and Wholesale +3.5% in m€ Q2 17 yoy cb H1 17 yoy cb Broadband ARPU 32.0 Quarterly ARPU, €/month 31.7 31.6 Revenues 1,337 +8.8% 2,628 +8.7% mobile services 683 +7.5% 1,336 +7.8% 30.9 30.8 mobile equipment fixed services 1
Slide 18: Q2 2017 Spain commercial performance
Q2 2017 Spain commercial performance Strong performance on mobile post-paid thanks to ‘more for more’ strategy Mobile contract net adds and churn rate Fixed BB net adds (in ‘000s) net adds in ‘000s quarterly churn rate in % FTTH ADSL and others +45 +67 +61 +40 16.3% 18% +8 +230 +199 +194 +199 +196 +
Slide 19: Q2 2017 Poland
Q2 2017 Poland Strong success of convergent offers sustaining fixed and mobile net adds yoy in m€ Q2 17 yoy cb H1 17 yoy cb FTTH connectable Revenues mobile services 673 298 -2.2% -6.0% 1,325 585 -0.9% -6.3% 2.0m homes x2 mobile equipment 73 +17.1% 146 +36.9% fixed services 269 -4.3% 531 -4.9% 2.3m
Slide 20: Q2 2017 Belgium & Luxembourg
Q2 2017 Belgium & Luxembourg Strong mobile contract net adds with ARPU growth thanks to ‘more for more’ strategy yoy in m€ Q2 17 yoy cb H1 17 yoy cb 50% customers % of active 4G Revenues 310 +3.5% 617 +1.4% +30pts mobile services 259 +3.5% 512 +1.6% mobile equipment 26 +5.2% 53 -5.0% fixed services
Slide 21: Q2 2017 Central European countries
Q2 2017 Central European countries Solid service revenue growth boosted by data monetization and smartphone penetration yoy in m€ Q2 17 yoy cb H1 17 yoy cb Revenues 434 +7.1% 843 +5.2% mobile services mobile equipment 342 41 +2.3% +55.9% 673 71 +1.8% +38.5% 3.9m 4G customers +60% fixed services 38 +
Slide 22: Q2 2017 Africa & Middle East
Q2 2017 Africa & Middle East Upswing in both commercial dynamic and revenue growth Q2 17 yoy cb H1 17 yoy cb New business drivers continue to in m€ sustain growth Revenues 1,252 +2.7% 2,491 +1.7% mobile services 1,051 +4.6% 2,089 +3.6% +16.9% +8.9% +65% mobile equipment 19 36 fixed services 166 -9.5
Slide 23: Q2 2017 Enterprise
Q2 2017 Enterprise Better Q2 than Q1 with IT and integration services partially offsetting legacy trends +27% yoy in m€ Q2 17 yoy cb H1 17 yoy cb Security Revenues 1,819 -1.3% 3,615 -1.6% Q2 revenue growth voice 370 -3.8% 728 -5.1% data 687 -3.5% 1,374 -3.0% IT&IS 517 +3.3% 1,028 +3.0% Cloud mobile
Slide 24: Section four: 2017 guidance
Section four 2017 guidance
Slide 25: 2017 guidance confirmed
Group adjusted EBITDA 2017 > 2016 comparable basis 2017 Net debt / Adjusted Around 2x guidance EBITDA Telecom in the medium term confirmed 2017 dividend* Dividend €0.65 December 7th, 2017** *subject to shareholders’ approval 2017 interim of €0.25 **ex-date December 5th, record date December 6th, pay
Slide 26: Appendices
Appendices
Slide 27: Appendix: B2C + B2B Orange customers in France
Appendix: B2C + B2B Orange customers in France Mobile KPIs (in thousands) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Mobile customers (excl. MVNOs) 28,612 28,966 29,508 30,033 30,489 31,150 Contract 24,581 25,069 25,759 26,486 27,090 27,842 M2M 4,277 4,611 5,115 5,711 6,228 6,829 Excluding M2M 20,305 20,45
Slide 28: Revenues yoy evolution
Revenues yoy evolution Group yoy France Africa & the Middle-East 2% 1% +0.5% 10% +1.4% 8% +1.0% 0% +0.8% +0.8% 6% 1% +0.5% +0.6% +2.7% -1% 4% +0.1% 0.0% -0.2% 2% 0% -2% 0% -0.6% -0.9% Q1 Q2 Q3 Q4 Q1 Q2 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 16 17 14 15 16 17 -1% Europe Enterprise +4.9% -2% -2.3% 5% 2% 1% 0% -
Slide 29: EBITDA adjustments
EBITDA adjustments in €m Q2’16 cb Q2’17 actual H1’16 cb H1’17 actual Adjusted EBITDA 3,300 3,380 5,848 5,978 restructuring and integration -226 -71 -339 -76 litigations 1 -75 40 -60 labour related -50 -33 -80 -58 o\w Senior Part Time -50 -53 -80 -78 portfolio review and others -2 - -8 -6 Reported EB
Slide 30: Net income from continuing activities excluding BT shares effect
Excluding the effect resulting from BT shares, net income from continuing activities grew by 105€m H1 2016 H1 2016 H1 2017 in €m historical cb actual adjusted EBITDA 5,913 5,848 5,978 adjustments* -321 -387 -200 reported EBITDA 5,592 5,461 5,778 depreciation & amortization -3,279 -3,351 impairment o
Slide 31: High liquidity as of 30 June 2017 and balanced repayment profile
High liquidity as of 30 June 2017 combined with a balanced repayment profile Bonds*/bank loans/leases repayment as of 30 June 2017 (Telecom, in €bn) Liquidity position as of 30 June 2017 (Telecom, in €bn) bonds exchangeable bonds bank loans & others 14,3 14,3 4,9 6,3 3,6 8,0 3,5 13,2 4,4 2,1 3,1 2,5