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 April 27, 2006 Commission File No. 1-14712 FRANCE TELECOM (Translation of registrant’s name into English) 6, place d’Alleray, 755
Slide 2: 1Q 2006 - April 27, 2006
1 Q 2006 th April 27 , 2006
Slide 3: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements and information on France Telecom's objectives, notably for 2006. Although France Telecom believes that these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and
Slide 4: 1Q06: our environment
1Q06: our environment • Confirmation of increased pressure in major European markets, with aggressive new offers More cost from competitors for the same Mobile: more aggressive abundance voice offers from sub-scale and non-integrated players (France, UK) market share Internet: Aggressive triple-play
Slide 5: 1Q06: on-going business transformation, as anticipated
1Q06: on-going business transformation, as anticipated France Telecom leadership Evolution of usage towards confirmed on broadband IP & increased competition 49.8% 1.2 m VoIP retail ADSL market share France Telecom customers in in France France 2.2 m Total Group Commercial expenses: Mobile Broadband
Slide 6: 1Q06: key figures
1Q06: key figures Actual Comparable Actual % Comparable Euro millions 1Q05 Basis - 1Q05 1Q06 change Basis - % chg Revenues 11,621 12,542 12,813 10.3% 2.2% Gross Operating Margin 4,376 4,668 4,671 6.7% 0.1% As a % of revenues 37.7% 37.2% 36.5% G.O.M. before commercial expenses 5,766 6,343 6, 499 As a
Slide 7: 1Q06: Group revenues by segment
1Q06: Group revenues by segment €12,813m / 10.3% actual / 2.2% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions +455 +49 12,813 -112 +9 +776 12,542 -130 - 2.0 % + 4.7% + 7.4% - 6.3 % +146 11,621 1Q 05 Actual Forex Impact Perimeter 1Q 05 on a Personal Home Enterprise Directories Elim
Slide 8: 1Q06 revenues: Personal
1Q06 revenues: Personal Total France Telecom mobile Total France Telecom broadband customers* mobile customers (000) 72.6m 84.3m 86.5m 2,244 53.7m 54.1m 50.4m Western European countries 1,547 Eastern Europe 20.7m 643 19.9m 15.2m 316 Africa, Middle-East, other emerging 11.7m countries 93 7.0m 10.7m 4
Slide 9: 1Q06 revenues: Personal
1Q06 revenues: Personal €6,633m / 24.5% actual / 7.4% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions + 198 6,633* + 77 + 50 + 68 + 67 + 789 6,178 +14.3% +20.4% +6.6% +2.9% +4.9% + 61 5,328 1Q05 actual Forex Impact Perimeter 1Q05 on a Personal Personal UK Personal Personal Personal
Slide 10: 1Q06 revenues: Personal France
1Q06 revenues: Personal France €2,391m / 2.7% actual / 2.9% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions + 116 + 24 2,391 + 19 2,324 +9 - 100 1Q 05 on a Customer base CTR Impact Voice revenues* Non-Voice Equipments & 1Q 06 comparable basis Impact Revenues others 22.5m customers
Slide 11: 1Q06 revenues: Personal UK
1Q06 revenues: Personal UK €1,444m / 6.1% actual / 4.9% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions +6 + 13 1,444 + 56 1,361 1,376 -7 + 15 1Q05 actual Forex Impact 1Q05 on a Customer Base Voice Non-voice Equipment & 1Q06 comparable Impact revenues* revenues others basis 14.96m
Slide 12: 1Q06 revenues: Personal Spain
1Q06 revenues: Personal Spain €803m / 6.6% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions + 74 +8 +4 803 - 21 - 16 753 1Q 05 on a Customer Base CTR Impact Voice Non-voice Equipment & 1Q 06 comparable Impact Revenues* revenues others basis 10.5m customers, +10.3% yoy, - strong grow
Slide 13: 1Q06 revenues: Personal Poland & ROW
1Q06 revenues: Personal Poland & ROW 1Q05 Actual Comparable Euros millions actual 1Q06 changes basis changes Poland Total Number of customers (000) 8,021 10,419 29.9% 29.9% Total revenues (EURm) 357 452 26.5% 20.4% ROW Total Number of customers (000) 20,734 28,098 35.5% 30.8% Total revenues (EURm) 1
Slide 14: 1Q06 revenues: Home
1Q06 revenues: Home €5,562m / - 0.3% actual / -2.0% on a comparable basis 1Q05– 1Q06 revenues analysis Euro millions 5,674 +48 +45 5,581 +2 + 11 5,562* - 73 -1.7% - 40 +2% -9 + 5.6% -4.8% -5% 1Q05 actual Forex impact Perimeter 1Q05 on a Home France Home Poland Home UK Home Spain Home ROW 1Q06 Impact
Slide 15: 1Q06 revenues: Home France
1Q06 revenues: Home France Number of lines (million) 27.5 27.6 0,6 0,9 Slight increase of total number of 26,9 26,6 access lines (retail + wholesale) Decrease by 0.3m of retail lines 4Q05 1Q06 Nb of lines excluding full unbundled lines Nb of full unbundled lines France Telecom VoIP clients (000) 1,2
Slide 16: 1Q06 revenues: Home France
1Q06 revenues: Home France ADSL market share % Number of Livebox (000) 50,0% 2,131 49,8% 1,559 48,3% 48,1% 990 627 416 4Q05 1Q06 1Q05 2Q05 3Q05 4Q05 1Q06 Net adds MS Market Share Consumer Services ARPU Euros 26.7 27.1 + 1.7% 4,0 5,1 + 26.2% 10,5 9,2 - 12.3% 12,2 12,9 + 5.6% End of March 05 End of Ma
Slide 17: 1Q06 revenues: Home France - Consumer Services - Subscription fees
1Q06 revenues: Home France - Consumer Services - Subscription fees €1,023m / +0.7% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions 1,016 + 33 1,023 - 26 1Q 05 Number of retail lines Subscription fee 1Q06 increase 2-months positive impact of the monthly line rental fee increase, eff
Slide 18: 1Q06 revenues: Home France - Calling Services and Internet Access
1Q06 revenues: Home France - Consumer Services - Calling Services and Internet Access €1,155m / -0.5% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions +28 1,160 +109 1,155 -27 -38 -77 1Q 05 CTR Impact PSTN volume Broadband VoIP Narrowband 1Q 06 and tariff mix Internet Internet & Tel
Slide 19: 1Q06 revenues: Enterprise
1Q06 revenues: Enterprise €1,919m / -1.2% actual / -6.3% on a comparable basis 1Q05 - 1Q06 revenues analysis Euro millions +62 2,049 +43 -16 1,943 + 60 +12 1,919 -4 -181 1Q 05 Actual Forex Impact Perimeter 1Q 05 on a CTR Impact Business Advanced Extended Others 1Q 06 Impact comparable Network Busine
Slide 20: 1Q06: Gross Operating Margin
1Q06: Gross Operating Margin Actual Comparable Euro millions 1Q05 Basis - 1Q05 1Q06 Revenues 11,621 12,542 12,813 Non labour expenses 4,941 5,520 5,857 as a % of revenues 42.5% 44.0% 45.7% Of which commercial expenses* 1,390 1,675 1,828 as a % of revenues 12.0% 13.4% 14.3% Labour expenses 2,303 2,35
Slide 21: 1Q06: Capex
1Q06: Capex CAPEX by key item 1Q05 1Q06 1Q05/1Q06 Euro millions on comp. basis on comp. basis Total Group CAPEX 1,242 1,390 +11.9% % of revenues 9.9% 10.8% Mobile Network 524 493 -5.9% Fixed Network 280 301 +7.5% IT & Customers’ services platforms 290 355 +22.4% o/w customers’ services platforms 42
Slide 22: Conclusion
Conclusion • A tough but anticipated environment Mobile maturing markets spurring competitive pressure Home broadband market consolidation not achieved 1Q 2006 No favorable change in regulatory context and pending uncertainties in line with • Leadership confirmed on new fast growing Telecom markets
Slide 23: Glossary (1)
Glossary (1) ARPU – Consumer Fixed Services (HCS segment): average annual revenue per line for the Consumer Fixed Services is calculated by dividing the average monthly revenues on the basis of the last twelve months by the weighted average number of customers over the same period. The weighted aver
Slide 24: Glossary (2)
Glossary (2) French Retail ADSL Market Share (ARCEP definition): starting from 1Q06, quarterly French ADSL market share presentation will be based on ARCEP High-speed Internet Observatory methodology. Until the end of 2005, the figures published by France Telecom covered intermediate markets (such a
Slide 25: Glossary (3)
Glossary (3) Number of employees (active employees at end-of-period): number of persons working on the last day of the period, including both permanent and fixed-term contracts. OPEX: operating expenses included in the determination of the GOM includes labour expenses and non labour expenses. Orange
Slide 26: 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: April 27, 2006 By: /S/ PIERRE HILAIRE Name: Pierre Hilaire Title: Director of Finan