Orange Sa · EURONEXT:ORA
Orange Sa — Investor Day (July 2021)
30 slides from Orange Sa's investor day presentation, Jul 30, 2021
Slide 1: Africa Day 2021: Solid engine of growth
Africa Day 2021 Solid engine of growth Ramon Fernandez Deputy CEO, Finance, Performance and Development Alioune Ndiaye CEO of Orange Middle East and Africa Paris, July 30th 2021
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Orange's financial situation, results of operations and strategy. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to
Slide 3: Acceleration of Growth in Q2 2021
Acceleration of Growth in Q2 2021 +1.9 pts EBITDAaL margin yoy in €m Q2 21 yoy cb H1 21 yoy cb Revenues 1,555 +14.4% 3,043 +10.7% Retail services 1,359 +15.8% 2,660 +12.8% 34.5% Wholesale 157 +0.6% 310 -5.6% 32.7% Equipment sales 30 42.2% 54 +28.8% EBITDAaL 1,051 +17.0% H1 2020 cb H1 2021 eCAPEX 525
Slide 4: Key driver of growth, margin and cash for the Group
Key driver of growth, margin and cash for the Group MEA share of Group’s adju. EBITDA (2017) / EBITDAaL (2020) MEA share of >15% Group’s revenues >13% 14% MEA share of 13% EBITDA-Capex (2017) / EBITDAaL- eCapex (2020) of telecom activities 13% 2017 2019 2021 12% >20% 2017 2019 2021 14% 10% 2017 2019
Slide 5: Relevant capital allocation strategy and strong execution to fuel value
Relevant capital allocation strategy and strong execution to fuel value High potential & Operational excellence & Sustainable balanced portfolio strong costs control value creation Natural risk mitigation >+5% Strong ROCE growth (pts) Total CA CAGR 17-20 4.4% yoy OMEA footprint CA Average growth ove
Slide 6: Delivering more and more value
Delivering more and more value Asset turnover Profit margin ROCE Revenue/Capital Employed N-1 EBIT /revenue EBIT /Capital employed N-1 +6 pts +5.7 pts 75.0x +6.9 pts 69.0x X = 2017 2020 2017 2020 2017 2020 Capital expenditure Direct margin Value creation for prioritising and optimising management an
Slide 7: Operational execution excellence
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Slide 8: Leading position in all our operations
Leading position in all our operations 1 Operational execution Leadership position in 8 markets (in value) Orange stronger leader in mobile excellence First challenger in 7 markets (in value) value market shares (Points in value, 2020) Orange leader in value Market Orange’s market share #1 Morocco(1
Slide 9: With an increasing number of customers
With an increasing number of customers* 1 Operational execution excellence 55.2m 132m Orange Money accounts Mobile Customers 38.2m 1.9m 4G customers FBB Customers * As of June 30, 2021 Africa Day 2021 9
Slide 10: High level of customer satisfaction
High level of customer satisfaction 1 Operational execution excellence 9 Customer NPS leadership in: C3 Centric markets* Culture 9 customers 4 customers Over 10 recommend Over 5 are satisfied with Orange in all our countries the digital experience (Customer Effort Score) Digital Multi- Leader positi
Slide 11: Value-driven capital allocation strategy
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Slide 12: Balanced and agile portfolio built by stages since 1996
Balanced and agile portfolio built by stages since 1996 2 Capital allocation strategy A solid presence… …with limited exposure to FX risk and strong local shareholding structure (1) Tunisia* 2009 Morocco 2010 Jordan 2000 Mali Orange 2003 Egypt 1998 13% Local private investors Local authorities, gove
Slide 13: Demonstrating resilience in the long term and reactivity in the short term
Demonstrating resilience in the long term and reactivity in the short term 2 Capital allocation strategy OMEA revenues growth vs. GDP Growth V-shape recovery after COVID-19 hit in 20Q2 (Constant/without inflation) (Revenues yoy growth) 8.3% 7.6% 6.5% 6.1% 6.2% 5.8% 6.1% 6.2% 5.3% 5.1% 5.1% 5.2% 1.3%
Slide 14: All subregions contributing to a growth in acceleration
All subregions contributing to a growth in acceleration 2 Capital Top line growth acceleration EBITDAaL-eCapex growth acceleration allocation strategy +6.8% > 6.0 +21% ~1.2 5.7 +15% 0.9 +5.7% 5.4 0.8 0.7 5.1 0.6 EBITDAaL 1.6 1.7 1.9 4.8 1.6 eCapex -1.0 -1.0 FY17 FY18 FY19 FY20 FY21E -1.0 -1.0 Note :
Slide 15: A segment regularly beating analysts' expectations
A segment regularly beating analysts’ expectations 2 Capital allocation strategy Revenue CAGR (cb in %) EBITDAaL/ Adju. EBITDA (before 2019) growth (cb in %) Actual vs Consensus Actual vs Consensus Analysts’preview 10.0% in 2020 before 6.2% 9.5% COVID Analysts’preview in 2020 before 5.1% 5.2% COVID
Slide 16: Solid growth engine with significant potential ahead
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Slide 17: Successful transformation of our business mix
Successfull transformation of our business mix 3 Solid growth engine … thanks to the construction of 3 growth engines addressing both Acceleration of retail growth more than offset wholesale decline… retail and B2B customers taking over from the declining voice CA CAGR 2017-19 CA CAGR 2019-21 Retail
Slide 18: Data: penetration potential ahead
Data : penetration potential ahead 3 Solid growth engine Strong path of growth while 4G just starting… … with still significant potential ahead… Mobile telco services ARPU (€) Mobile telco services revenues (in €Bn) 29% 64% 4.4x B2B 2.6 Traffic Data* Opportunities CAGR CAGR 3.9 4G penetration in Sma
Slide 19: FBB: an agile approach to capture fibre & fixed LTE acceleration
FBB : an agile approach to capture fibre & fixed LTE acceleration 3 Solid growth engine Our relevant multi-technology approach is bearing fruits… … and is precisely defined according to new market opportunities … FBB customer base (mSubs) FBB revenue (in €Bn) x2 1.7 X2 +30% X2 B2B 0.4 Population gro
Slide 20: Orange Money: we built key differentiators to pursue our success story
Orange Money : we built key differentiators to pursue our success story 3 Solid growth engine Continuous success in mobile financing services still with … in a market that is not yet mature… penetration potential… Money penetration in mobile base Money revenue (in €Bn) 60-80% Traditional banks not a
Slide 21: Orange Bank Africa: to become the key player in financial inclusion in Africa
Orange Bank Africa : 3 Solid growth to become the key player in financial inclusion in Africa engine Successful launch in Ivory Coast ... …to be followed by a clear expansion plan 575k customers in 1 year 3 openings planned in 2022*: With >60% with a credit Senegal, Mali, Burkina 48bn FCFA injected
Slide 22: To become the favorite digital multi-services operator in MEA
To become the favorite digital multi-services operator in MEA 3 Solid growth engine Including both Customer … developing Multiservice and … enabling Data & IA and Robot Process Relations and Distribution digitalisation... Marketplace environments… Automation in every country… Ongoing Development of
Slide 23: A continuous optimisation of our operating model
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Slide 24: EBITDAaL fueled by efficiency efforts and indirect costs management
EBITDAaL fueled by efficiency efforts and indirect costs management 4 Continuous optimization EBITDA/aL margin significant increase EBITDAaL margin distribution narrowing (number of operations) +1.6 pts 37.5% 0.8pt 35.9% 0.8pt 2017 2020 33.7pt 32.1pt direct margin Indirect costs lease 3.8pt 3.8pt Y1
Slide 25: Leveraging our scale to increase cost synergies
Leveraging our scale to increase cost synergies 4 Continuous optimization 68.000 km submarine cables Casablanca hub • OMEA headquarters • MENA regional office • Network engineering centre • Security centre Dakar hub • Sonatel Group headquarters • Finance shared services centre • Djoliba headquarters
Slide 26: Concrete examples of how we make savings real
Concrete examples of how we make savings real 4 Continuous optimization Direct costs: distribution case Indirect costs: energy case +150% Electricity price for +16 pts telco sector in 2012 27% 21% 17% Self top-up via 3 Solar farm project in Jordan 11% Orange Money Solar farms launched in 2019 energy
Slide 27: Sharing value with all stakeholders
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Slide 28: Make digital services more accessible to accelerate economic development
Make digital services more accessible : 5 to accelerate economic development in a sustainable way Sharing value with all stakeholders Developing Democratizing digital skills access to digital 8 Orange Digital Centers Sanza in our footprint: affordable smart feature Tunisia, Senegal, Cameroon, phone
Slide 29: To realise strong and sustainable ambitions
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Slide 30: Fast growth engines and strong discipline to achieve our cash objective
Fast growth engines and strong discipline to achieve our cash objective 6 Strong and sustainable ambitions EBITDAaL OCF* Revenues > EBITDAaL growth Double growth digit growth ~6% CAGR 2020-23 *Organic cash flow corresponding to net cash provided by operating activities, minus (i) repayments of lease