Orange Sa · EURONEXT:ORA
Orange Sa — Investor Day (November 2018)
41 slides from Orange Sa's investor day presentation, Nov 30, 2018
Slide 1: Orange Mobile Finance Services: Our strategy going forward
Orange Mobile Finance Services Our strategy going forward Ramon Fernandez Deputy CEO, Finance, Performance and Europe Paul de Leusse Deputy CEO, Mobile Finance Services London 30th November 2018 #Orange Mobile Banking 2018
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements about Orange, particularly objectives and trends regarding Orange’s financial situation, investments, results of operations, business and strategy. These forward-looking statements do not represent forecasts within the meaning of Eu
Slide 3: Section one: Strategy
Section one Strategy #Orange Mobile Banking 2018
Slide 4: Orange is a fully integrated network and service provider with Mobile Finance Services
Orange is a fully integrated network and service provider with Mobile Finance Services as a key pillar of diversification Network Enriched services Addressable markets B2C B2B Wholesale 3 value creation levers 4
Slide 5: Enriched services is a key driver of future growth
Enriched services is a key driver of future growth… The key pillars of service growth New services revenues & Net Banking Income[NBI]* evolution Revenue NBI in Europe Content 13% >60% Mobile Finance 9% Services x4 IoT 2018e 2022 2018 2022 Contents Energy Orange Money & others IT&IS (hors IoT) B2B da
Slide 6: Longstanding experience in mobile finance services
…leveraging a longstanding experience in mobile finance services… 2015 2017 Essentials2020 Launch of Diversify by capitalizing Orange Bank on our assets 2008 2016 2018 Launch of Orange Money Deal with Groupama 1st year of Orange Bank Orange to acquire a 65% stake in 10th year of Orange Money Groupam
Slide 7: A hybrid DNA of Telco and financial service provider
… a hybrid DNA of Telco and financial service provider Telco Mobile Synergies universe Finance Reduce churn Trusted brand Improve client satisfaction Innovation strengths Upselling opportunities: higher Telco ARPU Customer data to improve customer experience and simplify processes Scal
Slide 8: Section two: Execution
Section two Execution #Orange Mobile Banking 2018
Slide 9: Unique positioning to compete with traditional banks and OTT/Fintech players
Our unique positioning allows us to compete with both traditional banks and OTT/Fintech players Traditional banks Digital Banks / Fintechs Easy-to-use Banking App High-end Banking App for Advisor-based relationship 1 democratizing user niche customers experience innovation Simple but complete offeri
Slide 10: Easy-to-use Banking App democratizing user experience innovation
1 Easy-to-use Banking App democratizing user experience innovation… In France, Orange Bank #1 D rating score, In Africa, Orange money a customer centric ecosystem Digital customer offers and journeys*, Compounded score, 2018 Customer base at the end of Q3 18 63 40m 14m customers active customers 62
Slide 11: Fintech partnerships in Europe and MEA
1 …fueled with several Fintech partnerships in Europe and MEA Our solution offers the best in class and is nurtured by partnerships with Fintechs Insurance PAMF Marketing/ Savings Analytics Credit payments Customer Sales support/ KYC, etc E-Commerce CBS/ back office 11
Slide 12: Simple but complete offering giving customers control on their personal finance
2 Simple but complete offering giving customers control on their personal finance Innovative payment Credit & Savings Virtual customer care Mobile & credit card payment Flexible amount borrowed Digitalisation of our customer care supported by Artificial Instantaneous account balance Optimised withdr
Slide 13: Customer acquisition through data management & branch network
3 Customer acquisition through data management & branch network Banking services embedded in Telco to bring innovation to mass market… Fishing pool Customer data Distribution channels France: Optimised customer segmentation 160 000 Orange 25m* and Groupama 6m Thanks to solid experience in Point of s
Slide 14: Differentiated go-to-market approach based on market maturity
One single strategy with a differentiated go-to-market approach based on market maturity… Banking penetration rate 10-20% 40-80% 80-100% Romania, Moldova, Middle France, Spain, Belgium, Countries Sub-Saharan countries 2 east1, Maghreb Poland and Slovakia Adaptive Finance services Focus on payment an
Slide 15: Ambitious expansion roadmap with 2-3 new countries per year
… and an ambitious expansion roadmap with 2-3 new countries per year Our solution factories 2018 - 2019 2020 - 2023 Spain Slovakia Poland Belgium Consumer finance factory Romania Moldova Morocco Partners & Orange Bank Africa* Senegal Ivory Coast Mali Burkina Faso 15 *Subject to approval from Central
Slide 16: A strong and reliable management team
A strong and reliable management team leveraging diversified skills CEO Spanish team mixed experience Ex Indosuez CEO, Bain Partner Controls and Operations, Deputy CEO Executive Director of OB Spain ex Bankinter CFO and Head of digital Ex French Treasury Assistant Secretary for financial services, t
Slide 17: Orange Bank celebrates its birthday
Orange Bank celebrates its birthday #Orange Mobile Banking 2018
Slide 18: One year after launch in France, solid growth and innovation track record
One year after launch in France, solid growth and innovation track record Orange bank new account openings per quarter in thousands 200K customers in 1 year o/w 30-40% active +61% >75 60% Account opening in-store 47 51 Nº1 2.8m in France Mobile NFC payments 9m 18 33 50% Of customer care interactions
Slide 19: Orange Bank addresses all segments contrary to Neo banks
Orange Bank addresses all segments contrary to Neo banks… Population density Orange Bank customer base density 60% Account openings in-store 42 years median age 6 yrs younger than median French population [0-0.5%] [0.5-1%] [1-1.5%] [1.5% & more] 39% Contrary to Neo-banks that target only young and u
Slide 20: Enriching portfolio roadmap to deliver net banking income growth
…enriching portfolio roadmap to deliver net banking income* growth 2018 2019 2020 - 2021 Consumer loan Premium card Mortgage Current account Consumer loan Insurance with no bank account Debit card IA recommendation Long-term saving Saving account Develop cross selling between bank and telco 20 *Befo
Slide 21: Spain offers a new territory of growth for mobile finance services
Spain offers a new territory of growth for mobile finance services H2 2019 2020 beyond 2020 Consumer loan boosted by Other loans Full competitive handsets financing offer to come… Current account Savings account Credit card 21
Slide 22: Orange Money celebrates a decade of financial innovation
Orange Money celebrates a decade of financial innovation #Orange Mobile Banking 2018
Slide 23: Orange's Mobile Finance Services in Middle-East Africa
Orange’s Mobile Finance Services in Middle-East Africa … more to come 2008 - 2012 2012 - 2015 2016 - 2018 Launch Growth Maturity Laying the foundations Orange Money New status and becomes popular digitisation 23
Slide 24: Orange Money 10 years after launch in Middle-East Africa
Orange Money 10 years after launch in Middle-East Africa… 17 countries* 40 million 14 million customers end of Q3 18 active customers 260K Consumer loans in Madagascar 7 months after launch >6% Share of Orange Money in MEA revenue 24 * Including in Mauritius under the brand my.t mobile money
Slide 25: Ready for interoperability in Africa: Mowali
…now ready for a interoperability in Africa Mowali is available to any mobile money provider in Africa Universal money transfer ▪ Whatever the operator At launch Extension ▪ Locally or internationally International and domestic Bulk payments Facilitate payments with a consistent cross operator accep
Slide 26: Orange Money paved the way to a full fledged bank
Orange Money paved the way to a full fledged bank Product portfolio built in-house or thanks to partnerships Product portfolio Partners/Providers Credit/loans Pico <100€ / Micro [100-500€] Orange Bank Africa * NSIA Full-fledged bank Savings account PAMF Insurance Insurance, savings, credit, payments
Slide 27: Track record of synergies between Telco and Mobile Finance
Track record of synergies between Telco and Mobile Telco Mobile Finance… universe Synergies Finance #Orange Mobile Banking 2018
Slide 28: Telecoms knowledge enables better customer segmentation
Telecoms knowledge enables better customer segmentation… Orange now at the crossroad of telco data and … secured by reliable banking Back-testing banking data… Telco based segmentation vs enrollment acceptance Bank Refusals Bank Acceptance Customers satisfaction Simple and fluid bank account opening
Slide 29: Improved customer satisfaction in France
… with improved customer satisfaction in France… number and productivity of certified advisors* are increasing Client satisfaction Number of advisors Number of account monthly after store visit openings / advisor +15% 1100 11 New Orange bank In October 2018 In October 2018 customers surveyed by vs 7
Slide 30: Improved NPS, customer acquisition and retention in Poland
… and improved NPS, customer acquisition and retention in Poland Acquisition tool Higher satisfaction Lower churn 10% 3x -18% of new banking Customers with banking Customers with banking customers were also new services showed a 3x services were 18% less telco customer higher NPS than other likely t
Slide 31: Track record of Orange Money impact in Africa
Track record of Orange Money impact in Africa Higher ARPU Lower churn rate +20% -40% ARPU cohort analysis in Churn cohort analysis Ivory Coast and Mali in Ivory Coast and between 2013 and 2014 Mali in 2016 31
Slide 32: Section three: Ambitions and Financials
Section three Ambitions and Financials #Orange Mobile Banking 2018
Slide 33: 3 major phases towards profitability in the long run
3 major phases towards profitability in the long run (>6 years) NBI* ambition Grow volume Grow volume + Grow NBI per customer with NBI per customer focus on cost reduction Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 33 *Before acquisition and distribution costs, directly booked in costs
Slide 34: Orange 2023 ambition in Europe
Orange 2023 ambition in Europe 2023 Net banking Income* € 500 million Customers 4 million # Countries 5 countries Orange Money & Consumer finance # Countries 2 countries factory 34 *Before acquisition and distribution costs, directly booked in costs
Slide 35: P&L drivers
P&L drivers NBI* Costs Net banking income per customer per year (€) Per customer per year (€) ~200 Loans, savings Customer acquis. Commissions IT (credit card, etc.) ~150 ~100 Other costs Cost of risk ~400 2018e 2026 2018e 2026 Drivers Drivers Grow customer base to 2M Less acquisition costs afte
Slide 36: Group adj. EBITDA impact for France and Spain
Group adj. EBITDA impact for France and Spain Adj. EBITDA at group level Expected adj. EBITDA to break-even within 6 years The cumulated adj. EBITDA impact is estimated between -500M€ to -600M€ at group level Initial cash outlay is mostly on customer acquisition (variable costs) and IT. ∑=-500m€ to
Slide 37: Valuation metrics for France and Spain
Valuation metrics for France and Spain Ambitions for 2026 France Spain Net banking Income* per customer ~€ 200 ~€ 150 Cost/Income ~50% <50% ROE >15% >15% # of customers 2 million 1 million Consumer loans outstanding >3bn€ >1bn€ Adj. EBITDA break-even 2023 2023 37 *Before acquisition and distribution
Slide 38: Orange Money 2023 ambition in Africa
Orange Money 2023 ambition in Africa Orange Money Orange Money revenue >€ 800 million # of customers monthly active users with full fledge banking services >30million # of countries 19 38
Slide 39: Group adj. EBITDA impact for Orange Bank Africa
Group adj. EBITDA impact for Orange Bank Africa* Adj. EBITDA at group level Expected adj. EBITDA to break-even within 3 years The cumulated adj. EBITDA impact is estimated around -20M€ at group level Break even Reduce cost of risk in the long term expected Increase profitability in 3 years ∑=~-20m€
Slide 40: In a nutshell
In a nutshell… Leverage our unique Capitalise on a proven Scale up with a strict assets track-record in mobile risk policy payments Execute with Extract substantial synergies Leverage agility as a experienced between Telco and Mobile challenger with a lean management team Finance services cost base
Slide 41: Q&A
Q&A #Orange Mobile Banking 2018