Slide 1: Q3 2014 results
Q3 2014 results Ramon Fernandez, Deputy CEO Chief Financial and Strategy Officer October 23rd, 2014 Q3 2014 results – October 23rd, 2014
Slide 2: Disclaimer
disclaimer This presentation contains forward-looking statements about Orange. 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 currently considered material by us, and there c
Slide 3: Q3 2014 highlights
Q3 2014 highlights
Slide 4: Q3 2014 revenue, EBITDA and CAPEX
revenue EBITDA restated* CAPEX €9.8bn €3.2bn €1.3bn -2.3% Q3 yoy -2.3% Q3 yoy +2.4% Q3 yoy -3.2% 9m yoy -3.1% 9m yoy +2.9% 9m yoy €333m 33.1% ongoing strong commercial indirect opex stable Q3 yoy performance savings ytd EBITDA margin Q3 2014 yoy : comparison with the same period of the previous year
Slide 5: Sustained commercial performance across the Group
sustained commercial performance across the Group 4G coverage in % of pop. customers in millions FTTH homes connectable customers in thousand +0.7m France 71% 2.7m in Q3 14 +65k +1.4m France 3.3m 481k in Q3 14 UK >75% 5.6m in Q314 +0.4m x2 Spain 66% 1.8m in Q314 Spain 0.8m 26k in Q3 14 Poland 59% 0.
Slide 6: Better revenue trend in Europe & strong growth in Africa and Middle-East
better revenue trend in Europe & strong growth in Africa and the Middle-East Q3 2014 9m 2014 by segment IC&SS -2.3% -3.2% (in €m, yoy growth in %) Enterprise 476 Q3’14 revenue yoy cb yoy cb 1,525 €9.8bn -1.4% -2.2% Africa & Middle-East 1,069 France 4,826 ex. reg. ex. reg. rest of Europe 721 Poland b
Slide 7: Better revenue trend and cost savings supporting EBITDA margin stabilization
better revenue trend and costs saving supporting EBITDA margin stabilization EBITDA restated* down -€77m vs. -€252m in Q3 2013 Q3 2014 9m 2014 33.1% EBITDA margin stable 33.1% Q3’14 EBITDA -2.3% -3.1% restated yoy cb yoy cb 3,322 direct costs indirect costs +54 3,245 €3.2bn stable margin -226 +64 +6
Slide 8: Increased CAPEX on 4G and FTTH to support future growth
increased CAPEX on 4G and FTTH to support future growth 9m 2014 evolution by +94 -103 3,808 +2.9% domain 9m’14 CAPEX yoy cb in €m 3,702 +115 FTTH mutualisation, rationalization VDSL & phasing out 4G €3.8bn 13.0% of rev. 9m 13 cb 9m 14 − #1 in 4G coverage with 6,638 active sites covering 71% of popul
Slide 9: Business review
business review today changes with
Slide 10: France financials
Q3 2014 France financials improved revenue trend for all activities change change better mobile services revenues trend at -7.4% vs -9.4% in Q3 13 Q3 14 yoy cb 9m 14 yoy cb – mobile customer mix improving: in €m – 60% of consumer voice contract base on premium offers (Origami & Open) vs.55% revenues
Slide 11: France mobile KPIs
Q3 2014 France mobile KPIs 4G leadership supporting contract customer growth and mix improvement 4G sites activated steady 4G customer base growth (source ANFR) (in million) 2.7 6.6k 2.0 +37% 6.1k 1.0 1.4 2.1k 0.3 0.1 1.5k Q213 Q313 Q413 Q114 Q214 Q314 strong growth in postpaid customer base* (in ‘0
Slide 12: France fixed KPIs
Q3 2014 France fixed KPIs convergence and FTTH driving broadband value FTTH fuelling BB customer base growth increased share of convergence driven by growing FTTH (in ‘000s) (in ‘000s) FTTH acquisition FTTH net adds Share of convergent FTTH +37 FTTH base 44% 10,258 41% 10,174 3 9% +65 3 6% +13 pts 4
Slide 13: Spain
Q3 2014 Spain improving revenue trend driven by solid growth in customer base improving revenue trend at -6.1% in Q3, after -8.6% in Q2 change change – mobile services down -11.8% in Q3, after -18.6% in Q2 in €m Q3 14 yoy cb 9m 14 yoy cb – fixed services up +12.5% in Q3, after +7.7% in Q2 revenues 9
Slide 14: Poland
Q3 2014 Poland sequentially better revenue trend driven by solid commercial activity change change sequentially improving proforma revenue trend in €m Q3 14 yoy cb 9m 14 yoy cb – -3.6% in Q3 14 vs. -5.4% in Q2 14, with instalment model introduced in April revenues 730 -3.6% 2,185 -5.7% excl. regulat
Slide 15: Rest of the World
Q3 2014 Rest of the World ongoing strong growth in Africa & Middle-East and better revenue trend in Europe change change Q3 14 yoy cb 9m 14 yoy cb Africa and Middle-East in €m – strong growth in Q3 driven by Egypt, Guinea, Mali and Ivory Coast revenues 1,808 -0.4% 5,469 -0.5% – 12m Orange Money cust
Slide 16: Enterprise
Q3 2014 Enterprise revenue trend improved, helped by a weak Q3’13 and supported by IT & Integration services change change in €m Q3 14 yoy cb 9m 14 yoy cb voice revenue decrease slow down in the first three quarters of 2014 vs revenues 1,525 -1.7% 4,664 -2.3% 2013 while migrations towards VoIP sol
Slide 17: EE: stable underlying operating revenue, 4G base up fourfold
EE: stable underlying operating revenue, with 4G base up fourfold year-on-year to 5.6m Q3 operating revenue stable ex. regulation, Continued postpaid growth* £m 357k Postpaid mobile (1.2%) 345k M2M -19 +18 0.0% 283k 271k +16 233k 229k 240k 214k 178k 1,542 1,523 -34 1,523 Q3/13 regulation Q3/13 postp
Slide 18: 2014 guidance confirmed
2014 guidance confirmed today changes with
Slide 19: Guidance unchanged
net debt / EBITDA2 2014 restated EBITDA1 closer to 2x by year- €12.0bn - €12.5bn end 2014 stabilised EBITDA1 around 2x in the margin rate medium term 2014 2014 dividend €0.603 guidance interim payment4 selective M&A policy, focus on existing footprint €0.20 in December unchanged 2014 1 restated EBIT
Slide 20: Thank you
thank you today changes with
Slide 21: Appendices
appendices today changes with
Slide 22: Revenues evolution
revenues evolution organic Group (yoy evolution) France Spain ex reg -1.8 % -1.4% -2.5% -2.4% -2.3 % -2.6% -3 .0% -3 .8 % -2.3 % -5.0% -3 .1% -3 .8 % -3 .4% -4.1% -4.0% -4.8 % -5.1% -6.1% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Poland Rest of Europe Africa
Slide 23: Details on revenues
details on revenues Q3 14 9m 14 in €m % yoy % yoy cb % yoy % yoy cb actual actual cb excl.reg cb excl.reg Group revenue 9,805 -2.3% -1.4% 29,397 -3.2% -2.2% France 4,826 -3.1% -2.6% 14,439 -4.1% -3.8% mobile services 1,924 -7.4% 5,802 -8.9% handset sales 141 +14.6% 371 +4.7% fixed services 2,638 -0.
Slide 24: Q3 EBITDA restatements
Q3 EBITDA restatements Q3 13 Q314 in €m cb actual EBITDA restated 3,322 3,245 1. mainly related to labor and distribution in Europe and restructuring -21 Enterprise litigations 5 labour related -38 -38 2. Senior Part Time plan other 44 o/w disposal of Bull 41 EBITDA reported 3,289 3,230 24 Q3 20
Slide 25: 9m EBITDA restatements
9m EBITDA restatements 9m 13 9m 14 in €m cb actual EBITDA restated 9,683 9,385 1. mainly related to departure plans for Enterprise in US restructuring -4 -76 and Europe and distribution streamlining litigations 18 -333 labour related o\w Senior Part Time -116 -116 -222 -150 2. 9m EBITDA impacted