Orange Sa · EURONEXT:ORA
Orange Sa — H1 2020 Earnings Presentation
28 slides from Orange Sa's earnings presentation, Jul 30, 2020
Slide 1: Orange financial results #H1_2020
Orange financial results #H1_2020 30 July 2020 Stéphane Richard Chairman and CEO Ramon Fernandez Deputy CEO, Finance, Performance and Europe 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Orange’s financial situation and results of operations. 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
Slide 3: Section One: H1 2020 highlights
Section One H1 2020 highlights 3
Slide 4: Q2 key highlights
Q2 20 key highlights Revenues and EBITDAaL have demonstrated remarkable resilience in the context of COVID Reaping the benefits of outstanding fixed and mobile networks with sound performance in France European leader in cybersecurity with double digit growth in an exceptional context, while Cloud w
Slide 5: Covid-19: Exiting the lockdown
Covid-19: Exiting the lockdown Unified and Exiting the lockdown Networks resisted well motivated team in a stronger position 5
Slide 6: Q2 2020 key achievements
Q2 2020 key achievements Signature 10m 1m with Boralex TV customers Customers and WPD +3% yoy Renewable of Power -Broadening its offering Multi- Services O/W 2/3 of growth in to insurance -Launching Orange Purchase Customers & offers France Bank Africa # 1 NPS Customers VHBB Connectivity Convergence
Slide 7: H1 20 financial achievements
Revenue EBITDAaL H1 20 financial € 20.8 bn +1.0% € 5.9 bn +0.5% achievements +0.3% -0.8% -0.4% -1.8% Q1 20 Q2 20 H1 20 Q1 20 Q2 20 H1 20 3.2 2.8 0.25 2.04x € billion € billion € billion yoy : comparison with the same period of the previous year, on a comparable basis unless otherwise specified Net d
Slide 8: COVID crisis and transfer of assets drove lower eCAPEX
COVID crisis and 43.5m VHBB** connectable lines transfer of assets drove lower FTTH connectable lines in France FTTH connectable lines in Spain FTTH connectable lines in Poland eCAPEX, despite +43% +7% +21% acceleration in 19.3m 14.6m 4.6m FTTH rollout 13.5m 13.7m 3.8m 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20
Slide 9: Section Two: Financial results overview
Section Two Financial results overview 9
Slide 10: Revenues slightly eroding in Q2
Q2 revenue growth contribution per segment (yoy in €m) Revenues -0.4% slightly eroding 10,413 122 -89 -49 18 10,375 in Q2 -65 25 Q2 19 cb France Spain Europe MEA Enterprise Others Q2 20 Q2 revenue evolution per activity (yoy in %) Q2 2020 H1 2020 +8.5% +3.6% +3.3% yoy yoy +0.3% H1 2020 -0.4% +0.3% r
Slide 11: EBITDAaL decreased, impacted by Covid-19
H1 20 EBITDaAL (Telecom) evolution per segment yoy, in €m EBITDAaL -0.9% decreased, 6,037 17 30 -107 impacted by -59 63 Covid-19 4 5,986 H1 2019 cb France Spain MEA Europe Enterprise Others H1 2020 Break-up of EBITDAaL (Telecom) evolution (yoy in €m) Q2 2020 H1 2020 Reflecting impact linked to Covid
Slide 12: Net income decrease
-10.7% Net income 1,137 -46 decrease -40 -10.7% -49 22 -4 1,016 -5 H1 2019 EBITDAaL cb adjustments* D&A financial result income tax others H1 2020 Net Income Net Income from from Consolidated 1 2 Consolidated Group Group H1 2020 yoy H1 2020 -10.7% Net income -€121m 1. EBITDAaL deterioration yoy €1.0
Slide 13: Organic Cash Flow reaching €255m in H1 2020
Organic Cash Flow* reaching €255 m in H1 2020 (in €m) Organic Cash 2,844 -1,356 Flow* growth -559 +€163 m yoy -527 -147 255 EBITDAaL change in net financial income taxes paid other operational Organic - eCAPEX working capital interests paid** items Cash Flow * (telecom (incl. eCapex H1 2020 activiti
Slide 14: COVID confirms and accelerates the €1bn net savings program
COVID confirms and accelerates the €1bn net savings* program €1bn Net savings 2023 vs 2019* € Shared services/ Agility, central- Digitisation Smart Spend platforms local Local Operating Model Transformation * On an indirect telecom activities cost base of € 14bn€ in FY19 excluding Africa & Middle Ea
Slide 15: Section Three: Business review
Section Three Business review 15
Slide 16: Q2 2020 France
Q2 2020 France Total revenues supported by growth of Wholesale services and resilience of Retail services in €m Q2 20 yoy cb H1 20 yoy cb Revenues 4,593 +2.7% 9,024 +1.6% Retail services 2,684 +0.1% 5,377 0% Q2 20 quarterly ARPOs (in €) and growth, yoy: Convergent services* 1,131 +4.1% 2,268 +4.7% M
Slide 17: Q2 2020 France: commercial performance
Q2 2020 France: commercial performance Excellent performance in FTTH, resilience in mobile despite lockdown measures 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 10,9% 9,5% +49 +61 +37 +61 +90 +47 55%
Slide 18: Q2 2020 Spain
Q2 2020 Spain EBITDAaL erosion explained by topline evolution and mitigated by cost reduction in €m Q2 20 yoy cb H1 20 yoy cb Revenues 1,216 -6.8% 2,503 -4.6% 85% Convergence as % of broadband B2C customer base Retail services 869 -7.2% 1,779 -5.8% Convergent services* 502 -3.1% 1,020 -2.8% Mobile o
Slide 19: Q2 2020 Europe
Q2 2020 Europe Convergence and IT&IS driving solid trends in retail services; EBITDAaL supported by effective transformation and Covid mitigation efforts in €m Q2 20 yoy cb H1 20 yoy cb Revenue evolution (in €m) Revenues 1,329 -3.6% 2,729 -1.6% Retail services 896 +1.6% 1,817 +2.9% Convergent servic
Slide 20: Q2 2020 Africa & Middle East
Q2 2020 Africa & Middle East Resilient performance in €m Q2 20 yoy cb H1 20 yoy cb Revenues 1,401 +1.3% 2,845 +3.8% 27.9 m +40% +26% Data revenue growth Q2 20 Retail services 1,210 +4.7% 2,444 +6.8% yoy Mobile only services 1,070 +3.9% 2,164 +6.1% 4G customers Fixed only services 137 +10.8% 270 +11.
Slide 21: Q2 2020 Enterprise
Q2 2020 Enterprise After 6 quarters of growth, strong impact by Covid on top line and EBITDAaL in €m Revenues Q2 20 1,925 yoy cb -3.3% H1 20 3,859 yoy cb -1.3% 38% IT&IS share in total segment revenues Fixed only services 984 -1.0% 1,958 -1.4% Voice 326 +1.0% 632 -2.8% Data 658 -2.0% 1,326 -0.7% +11
Slide 22: Section Four: 2020 guidance
Section Four 2020 guidance 22
Slide 23: Guidance 2020
Guidance 2020 2020 EBITDAaL, yoy Around -1% eCAPEX incl. RAN sharing deals, yoy decrease Organic Cash Flow (telecom)* > €2.3bn Net debt / EBITDAaL (telecom) Around 2x in the medium term €0.30 cash interim on 9 Dec. 20, decision Dividend** on balance to be announced between Q3 and Q4 2020 earnings re
Slide 24: Appendices
Appendices 24
Slide 25: Change in net income
Change in net income H1 2019 H1 2019 H1 2020 (in millions of euros, on a historical basis) historical cb actual EBITDAaL 5,958 5,960 5,914 Neutralisation of IFRS 16 lease interest expenses effects in EBITDAaL 60 56 Adjustments* (128) (168) Depreciation & amortization of fixed assets (3,500) (3,549)
Slide 26: Adjustments
Adjustments H1 19 H1 20 in €m Historical Actual Cost of restructuring programs (75) (19) Cost of acquisitions and integration (10) (10) Significant litigations (65) (169) Specific labour expenses (46) (28) o\w Senior Part Time (46) (28) Portfolio review and others 68 59 26
Slide 27: Change in net debt
Change in net debt (in millions of euros) H1 2019 FY 2019 H1 2020 EBITDAaL - eCAPEX (telecom activities) 2,542 5,754 2,844 Change in eCAPEX payables (252) 45 (340) Change in working capital requirements (574) (204) (1,017) Net interest paid (including dividends received)* (704) (1,196) (559) Income
Slide 28: Convergent B2C customer base in million
Convergent B2C customer base in million % of broadband B2C customer base Convergence, France* Spain Poland 5.80 5.80 5.80 3.06 3.04 3.00 2.99 2.95 1.41 the bedrock of 5.77 84% 85% 1.37 1.39 55% 63% our strategy 5.73 1.31 1.33 55% 60% Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q2 19