Slide 1: France Telecom 3Q 2005 figures
France Telecom 3Q 2005 figures October 27th, 2005 Disclaimer T his presentation contains forward-looking statements relating to France Telecom’s objectives, in particular for 2005. Although France Telecom believes its objectives are based on reasonable assumptions, these forward-looking statements a
Slide 2: Agenda; Our key messages
Agenda Î1 Key messages: France Telecom to date 2 3Q 2005 figures Revenues TOP 3 Conclusion 3 Our key messages Positive trends on major KPIs Confident 3Q revenue growth below our objectives Operations to deliver Full year pro forma revenue growth close to 3% NExT Gross Operating Margin on trac
Slide 3: Home France: strong acceleration of Livebox deployment
Operations Home France: strong acceleration of Livebox deployment 990 363 627 416 182 211 194 234 40 3Q04 4Q04 1Q05 2Q05 3Q05 Livebox net adds Livebox Over 1 million Livebox beginning of october, 5 1.5 million targeted for year end Operations Home France: increase of retail broadband market share 52
Slide 4: Home broadband outside France; Personal: 70 million customers
Operations Home: continuous success of broadband roll-out outside France Number of broadband customers (m) Spain-UK-Netherlands-Poland 2.9 million broadband customers, of which 2.6 million ADSL (+90% yoy) 2.9 1.6 134k Livebox 67k VoIP customers Acceleration of LLU in all countries 3Q04 3Q05 (555 MDF
Slide 5: Orange UK; Enterprise: Business Everywhere
Operations Orange UK Orange UK pro-forma revenue growth 0.2% Product portfolio renewed with new -0.3% PAYG tariffs launched in August & September First converged offers launched -2.4% Brand refresh underway 1Q05/1Q04 2Q05/2Q04 3Q05/3Q04 Cut in CTR impact to disappear in 4Q 2005 9 Operations Enterpri
Slide 6: Operating margins: Opex under control; Key figures
Operations Operating margins: Opex under control 50.9% 50.2% 51.4% 39.2% 38.8% 39.4% 9m04 9m04PF 9m05 Group gross operating margin before commercial expenses* Group gross operating margin* * See glossary +0.6 pt of Gross operating margin; +1.2 pt of Gross operating margin rate before commercial expe
Slide 7: Full year 2005 objectives; Overall European footprint achieved
Operations Full year 2005 objectives Initially announced Close to 3% full year pf Pro-forma growth Revenues increase between + 3% & + 5% Stronger Q4 expected GOM Over €18.5 Bn Confirmed Capex Upper range of 10-12% Confirmed to Sales Net Debt / Below 2.5 Confirmed GOM High revenue growth rate expecte
Slide 8: Focus on preparing NExT: converged offers and content
Strategy & Focus on preparing NExT: footprint converged offers Family Talk Around 6,000 offers sold Î 18,000 customers taking advantage on unlimited call between fixed & mobile Orange/Wanadoo UK home broadband offer 2Meg broadband package for under £10 for Orange customers Business Talk Darty and SF
Slide 9: A use of cash policy focused on all stakeholders
Use of A use of cash policy focused cash on all stakeholders Reduce net debt at a Objective maintained : Debt / GOM ratio Deleveraging reasonable below 2 before end 2008 pace from now Proposed 2005 dividend at EUR1 per share 2006-2008 dividend per share evolution to Enhance Shareholders take into
Slide 10: 3Q05 Group Consolidated Revenues by segment
3Q 05 Group Consolidated Revenues by segment €12,264m / + 3.8% actual / + 1.6% pro-forma Euros millions %3Q %PF %PF actual 3Q 9M 12,070 12,264 Total +3.8% +1.6% +2.0% 287 293 Directories +5.7% +2.1% +6.6% 2,029 1,879 Enterprise - 7.4% -7.4% -5.7% 5,713 5,610 Home -0.2% -1.8% -1.6% 5,563 5,937 Person
Slide 11: Personal France; Personal UK
Personal France: €2,503m / + 15.5% actual / +5.1% pro-forma / + 6.5 % excluding CTR* ARPU** (Euros) Mobile Broadband Customers*** (000) +1.2% 424 424 429 182 592 585 184 183 52 9 3Q04 3Q05 4Q04 1Q05 2Q05 3Q05 Contract Prepay 233k net adds in 3Q 05, ahead of 3Q 04 (207k) - 100k M6 Mobile customers
Slide 12: Personal Poland; Personal ROW
Personal Poland: €415m / +25.1% actual / +13.1% pro-forma Customer base* Penetration rate & market share K customers +39% 68.2% 71.4% 64.3% 55.2% 60.3% 6,594 9,134 32.6% 33.5% 46% 54% 58% 31.2% 32.2% 33.1% 42% 3Q04 3Q05 3Q04 4Q04 1Q05 2Q05 3Q05 Contract Prepay penetration market share Increase of
Slide 13: 3Q05 Home Revenues; Home France
3Q05 Home Revenues: broadband confirmed as the main driver for Home future growth Strongest ADSL retail market share 56.3% of net adds since 2003 ADSL Net adds France 1 million Livebox (beginning of Market share October 2005) Almost Ongoing strong increase in ADSL 1 million ADSL Poland custome
Slide 14: Home France: Consumer Services ARPU
Home France: Consumer Services ARPU* Euro 26.9 26.7 26.8 26.9 3.9 4.0 4.3 4.4 10.8 10.5 10.1 9.9 12.1 12.2 12.4 12.6 End of Dec. 04 End of March 05 End of June 05 End of Sept. 05 Subscription fees Calling services On-line & Internet Services * See glossary Sequential ARPU increase for the second con
Slide 15: Home France: Calling and On Line Services
Home France Consumer Services - Calling Services revenues: -11.9% pf in 3Q05 Consumer - Voice Market Share (PSTN) Packages in % of total customers 43.5% 43.6% Local 69.8% 73.8% 42.5% 42.4% 7 3.3% 70.9 % 70 .1% 58.8% 60.3% LD 41.0% 5 9.4% 58.1% 5 7.9% 3Q04 4Q04 1Q05 2Q05 3Q05 3Q04 4Q04 1Q05 2Q05 3Q05
Slide 16: Home France Carrier Services; Home Poland
Home France Carrier Services: €1,366m / -1.2% actual / –1.5% pro-forma Carrier services Euros millions Domestic Others +13 +34 -19 -48 1,386 1,366 3Q04PF Dom es tic Se rvices to Fixed to M obile Othe r Reve nue s 3Q05 Inte rconnection & Ope rator s Unbundling & IP ADSL Revenue growth slowdown in 3
Slide 17: Home ROW; Enterprise Revenues
Home ROW €475m / +20.3% actual / +7.6% pro-forma European Broadband customers (000s) Overall European ARPUs * (in euros) 14.6 826 12.7 11.4 10.1 528 8.5 8.2 489 442 430 253 UK Spain Netherlands UK** Spain** Netherlands 3Q 04 3Q 05 9M04 9M05 Total ROW Broadband customers up 64% yoy and total ROW DS
Slide 18: Enterprise: revenues and business transformation
Enterprise: €1,879m/ -7.4% actual / -7.4% pro-forma Euros millions % 3Q % % actual PF 3Q PF 9M 2,029 1,879 Total -7.4% -7.4% -5.7% 589 Global Services -3.5% -3.7% +0.3% 567 Business Networks 838 in France + Other Bus. -5.9% -5.7% -4.7% 790 Serv. In France 712 638 Fixed line -10.4% -10.4% -9.3% Telep
Slide 19: Directories Revenues; Labour costs
Directories Revenues €293M / 5.7% actual / +2.1% pro-forma PagesJaunes.fr audience (m of pages viewed)* Sustained commercial activity: +15.8% growth in customer base, +37% all media combined, as at Sept. 30, 50.0 2005** 36,5 Revenue growth outperforming the advertising market on comparable publi
Slide 20: Non labour costs; CAPEX analysis
3Q 05: Non labour costs External purchases commercial expenses*, m euros Focus on growth: 11.6% 11.8% Î commercial expenses account for 27% 1,382 1,402 1,453 of total non labour costs • 85% of commercial expenses relates 3Q04 3Q04 PF 3Q05 to Personal and 29% to Personal UK commercial expenses % of s
Slide 21: CAPEX analysis (2)
3Q 05: CAPEX analysis (2) Evolution of group Capex, m euros Actual figures +400 - 154 - 13 + 302 1,898 1,557 1,403 16.2% 1,186 1,173 1,157 12.9% 11.4% 884 10.0% 10.4% 9.9% 7.9% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 Capex as % of revenues FY05 objective maintained 41 Agenda 1 Key messages: France Teleco
Slide 22: Conclusion: France Telecom, October 2005
Conclusion: France Telecom, October 2005 Strong commercial success Profitablity on track No need for major moves in Europe Towards enhanced shareholder remuneration Confident to deliver NExT 43 Glossary (1) Î Contributive Consolidated Revenues: consolidated revenues excluding intra-group transaction
Slide 23: Glossary (2)
Glossary (2) Î Mobile AUPU: Monthly average usage per user (AUPU) is defined as total usage (including outgoing traffic, incoming traffic and roaming) for the 12 previous months divided by the weighted average number of Orange Group's customers during the same period. AUPU is quoted in minutes on a
Slide 24: France Telecom Q3 2005 figures
France Telecom Q3 2005 figures October 27th, 2005 24