Slide 1: Orange financial results H1 2019
Orange financial results #H1_2019 25 July 2019 Stéphane Richard Chairman and CEO Ramon Fernandez Deputy CEO, Finance, Performance and Europe
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Orange, notably on objectives and trends related to Orange’s financial situation, investments, results of operations, business and strategy. These forward-looking statements do not constitute a forecast as defined in EU Commissio
Slide 3: H1 2019 highlights
1 H1 2019 highlights 2 Financial results overview 3 Business review 4 2019 guidance 3
Slide 4: H1 2019 Group achievements: revenue and EBITDAaL
H1 2019 Revenue EBITDAaL Group € 20.6 bn € 6.0 bn achievements 2019 yoy cb growth 2019 yoy cb growth 0.5% 0.9% 0.8% 0.7% 0.2% yoy : comparison with the same period of the previous year, on a comparable basis unless otherwise specified -0.1% All Group level mentions include both telecom and banking Q
Slide 5: Investment efforts accelerated as fiber roll-out in France speeds up
H1 19 Network highlights Investments efforts accelerated as fiber 4G coverage above 94% of population in all 4G European countries roll-out in France 4G in 15 MEA countries speeds up 5G First tests with commercial mobile handsets VHBB connectable lines 35m o/w 34m FTTH (+23% yoy) o/w 14.4m lines in
Slide 6: Solid commercial momentum driven by Convergence
Solid commercial Convergence momentum driven by Convergence, 10.6m +4% yoy €3.5bn +4% yoy customers* H1 19 revenue VHBB and 4G VHBB 4G +28% +24% 7m yoy 62.1m yoy Customers , o/w 6.8 m FTTH Customers VHBB > 100 Mbps Details on convergence on slide 23 TV 9.7m +5% yoy customers OCS :+400k customers qoq
Slide 7: Successful execution of Orange multi-services strategy
Successful execution of Orange multi-services strategy Enriched B2C and B2B Services Focus on Cybersecurity A solid & critical growth engine for B2B… Mobile Finance 320k 41.9m Services Customers* Customers +22% yoy growth in H119 Orange Business 2019 summit 1100 B2B customers present– focus on co-in
Slide 8: Financial results overview
1 H1 2019 highlights 2 Financial results overview 3 Business review 4 2019 guidance 8
Slide 9: Revenues returning to growth in Q2
Q2 revenue growth contribution (yoy in €m) Revenues +0.5% 13 -31 returning to 17 10,388 growth in Q2 ePresse Audio Book 10,335 0 76 19 -21 10,388 10,316 Q2 18 cb France Spain MEA Europe Enterprise Others Q2 19 Q2 2019 H1 2019 Q2 revenue growth (yoy in %) yoy yoy H1 2019 IT&integration services +7.0%
Slide 10: EBITDAaL growth fuelled by MEA and Spain
H1 19 EBITDAaL (Telecom) growth per segment (yoy in €m) EBITDAaL +1.1% ePresse -13 6,035 Audio Book growth fuelled by 83 4 -8 6 MEA and Spain 5,969 -14 16 and resilience in ePresse Audio Book 77 6,029 France 5,892 H1 18 cb France Spain MEA Europe Enterprise Others H1 2019 Q2 2019 H1 2019 EBITDAaL ma
Slide 11: Net income grew +29.4% to €1.1bn
Net income +29.4% 1,137 grew +29.4% 57 -32 174 60 -50 879 49 H1 2018 EBITDAaL cb Neutralisation adjustments Financial result Impairment D&A, income H1 2019 Net Income of IFRS 16 cb* of goodwill & tax paid & Net Income from lease interest fixed assets others from Consolidated expenses Consolidated Gr
Slide 12: Net debt - telecom activities
Net debt** - telecom activities Net debt to Net Debt / EBITDAaL Telecom EBITDAaL ratio in Net Debt / adjusted EBITDA Telecom €26.7bn €25.4bn line with the *H1 19 net debt does not include the cash received from the disposal of the BT shares medium term which was finalized on June, 28th with a settle
Slide 13: Business review
1 H1 2019 highlights 2 Financial results overview 3 Business review 4 2019 guidance 13
Slide 14: Q2 2019 France
Q2 2019 France Growth in convergent and wholesale services. Resilient total revenues despite ePresse/Audio books effect in €m Q2 19 yoy cb H1 19 yoy cb Revenues 4,467 0.0% 8,874 -0.9% Retail services 2,683 -1.5% 5,375 -2.1% Q2’19 yoy growth excl. ePresse/Audio book : Convergent services* 1,080 +4.0%
Slide 15: Q2 2019 France commercial performance
Q2 2019 France commercial performance Solid performance in mobile, fixed and convergence with decrease in churn in mobile 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 11.7% 10.9% +71 +68 +49 +41 +136
Slide 16: Q2 2019 Spain
Q2 2019 Spain Adapting to a very competitive environment while protecting EBITDAaL in €m Q2 19 yoy cb H1 19 yoy cb Revenues 1,306 -1.6% 2,624 -0.6% 84% Convergence as % of broadband B2C customer base Retail services 936 -3.9% 1,889 -1.7% Convergent services* 518 -3.6% 1,049 -1.3% Mobile only service
Slide 17: Q2 2019 Europe
Q2 2019 Europe Convergence driving solid trends in retail services; EBITDAaL trend mostly impacted by loss of MVNO revenues last year Revenue evolution (in €m) in €m Q2 19 yoy cb H1 19 yoy cb Revenues 1,400 +1.2% 2,789 +1.3% Retail services 893 +2.5% 1,768 +3.0% -11 Convergent services* 151 +35.5% 2
Slide 18: Q2 2019 Africa & Middle East
Q2 2019 Africa & Middle East EBITDAaL growth acceleration in another quarter of outstanding topline growth in €m Q2 19 yoy cb H1 19 yoy cb Revenues 1,388 +5.8% 2,737 +5.6% Retail services Mobile only services 1,163 1,037 +7.9% +7.2% 2,289 2,042 +7.8% +7.4% 19.9m 4G customers +54% yoy Fixed only serv
Slide 19: Q2 2019 Enterprise
Q2 2019 Enterprise 3rd quarter of growth in a row driven by the performance of IT&IS in €m Q2 19 yoy cb H1 19 yoy cb Revenues 1,940 +0.7% 3,770 +0.6% Fixed only services 993 -2.6% 1,978 -1.9% Cybersecurity +15% yoy Revenue growth in Q2 Voice 322 -7.5% 649 -6.8% Acquisition of SecureLink, one of the
Slide 20: 2019 guidance
1 H1 2019 highlights 2 Financial results overview 3 Business review 4 2019 guidance
Slide 21: Guidance
Excluding the impact from the network Guidance sharing deal with Vodafone in Spain 2019 EBITDAaL Slight growth eCAPEX (1) Slight decrease from 2018 peak Operating Cash Flow (2) Growth Net debt (3) / EBITDAaL (telecom) Around 2x in the medium term Floor of €70 cent (4) Dividend December 4th, 2019 (5)
Slide 22: Appendices
Appendices
Slide 23: Convergence, the bedrock of our strategy
Convergent B2C customer base in million % of broadband B2C customer base Convergence, France* Spain Poland 5.73 3.13 3.12 3.12 3.08 3.06 1.31 the bedrock of 5.65 5.70 86% 84% 1.24 1.28 55% 60% our strategy 5.56 5.61 1.14 1.18 55% 54% Q218 Q3 18 Q4 18 Q119 Q2 19 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q2 18 Q3
Slide 24: Change in net income
Change in net income H1 2018 H1 2018 H1 2019 (in millions of euros, on a historical basis) historical cb actual EBITDAaL 5,984 5,909 5,958 Neutralisation of IFRS 16 lease interest expenses effects in EBITDAaL - - 60 Adjustments* (118) (78) (128) Depreciation & amortization of fixed assets (3,457) (3
Slide 25: Adjustments
Adjustments H1 18 H1 18 H1 19 in €m historical cb actual restructuring and integration (62) (64) (85) litigations (32) (32) (65) labour related (24) (24) (46) o\w Senior Part Time (24) (24) (46) portfolio review and others (0) 42 68 25
Slide 26: Change in net debt
Change in net debt H1 2019 (in millions of euros) Actual 2018 Actual EBITDAaL - eCAPEX (telecom activities) 2,542 (in millions of euros, on a historical basis) (IAS 17) Change in working capital requirements (574) Adjusted EBITDA - CAPEX (telecom activities) 5,745 Change in eCAPEX payables (252) Cha