Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom-Orange — Q3 2011 Earnings Presentation
28 slides from Orange Sa's earnings presentation, Oct 27, 2011
Slide 1: France Telecom Orange 3Q11 results
France Telecom Orange 3Q11 results Gervais Pellissier, Deputy CEO & CFO October 27th, 2011
Slide 2: Cautionary statement
cautionary statement this presentation contains forward-looking statements about France Telecom’s business, in particular for 2011, 2012 and 2013. Although France Telecom believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and
Slide 3: Agenda
agenda 1 3Q11 highlights 2 business reviews 3 outlook and conclusion 3
Slide 4: 3Q11 highlights
1 3Q11 highlights
Slide 5: Sustained commercial performance in 3Q while protecting EBITDA
sustained commercial performance in 3Q while protecting EBITDA confirmed sustained commercial performance throughout the Group with customer base up by 8.6%* to over 221 million customers new steps in offers segmentation implemented in France driving successful momentum share of broadband net adds a
Slide 6: Key financial achievements
key financial achievements 9m11 9m 3Q11 3Q in €m 9m10cb actual var. cb actual var. cb key points regulation impact: -€567m, revenue 34,393 33,848 11,280 o/w -€188m in 3Q -1.6% -2.1% VAT impact:-€105m, excl. +0.1% -0.5% o/w -€29m in 3Q regulation as anticipated, slowdown in 2H regulation impact: -€17
Slide 7: Well oriented indicators demonstrate potential for growth
well oriented indicators demonstrate potential for growth group customers now at 221 million customers, +8.6% yoy* data monetisation France Africa & Middle East best DSL share of net adds since 1Q09 personal customer base smartphones in Europe** (in millions) (in millions) 45.2% M/S 45.5% 45.3% 35.3
Slide 8: 3Q update on Conquests 2015
3Q update on Conquests 2015 sale process of Orange Switzerland SPCI* 1H 2011 results improving portfolio & employees on track allocation of free shares for an international acquisition of 100% stake in CCT amount of €142m development on Oct, 21st in DRC Sosh, 100% digital mobile brand 2011 refinanci
Slide 9: 9m11 Group revenue stability excluding regulation
9m11 Group revenue stability excluding regulation 9m10cb 9m11 3Q11 ∆ vs ∆ vs 9m10cb ∆ vs ∆ vs 3Q10cb in €m actual actual 9m10cb excl. reg. 3Q10cb excl. reg. Group revenue 34,393 33,848 -1.6% +0.1% 11,280 -2.1% -0.5% France 17,411 16,873 -3.1% -1.3% 5,569 -4.6% -2.8% Spain 2,858 2,982 +4.3% +6.9% 1,0
Slide 10: Commercial costs stabilizing allowing to contain margin erosion in 3Q11
commercial costs stabilizing allowing to contain margin erosion in 3Q11 EBITDA* evolution insight in millions of euros 9m11 - 1.4 pts 12,275 +230 +85 11,611 EBITDA* impacted by regulation -€171m and VAT episode -€129m -545 -105 -329 labour opex increase, mainly due to price effect in France 9m11 35.
Slide 11: Levers for future revenue growth sustained while optimising commercial costs
levers for future revenue growth sustained while optimising commercial costs contract gross adds in France (rebased 100) yoy variation of commercial costs 156 129 o/w -€24m VAT 118 122 100 104 102 50% 54% 58% 34% 38% 41% 44% -2 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 -39 -17 % of smartphones gross adds s
Slide 12: Programs in place to improve operational efficiency
programs in place to improve operational efficiency main initiatives and ambitions first achievements Chrysalid 2011-2015 FY 2011 savings expected between 15-20% of 2015 2015 annual savings 2015 average target planned vs. 2010 cost obj. % of base, in €bn achievement* first implementations launched:
Slide 13: CAPEX acceleration to enhance customer satisfaction, network evolution and future growth
CAPEX acceleration to enhance customer satisfaction, network evolution and future growth CAPEX evolution insight increased CAPEX/sales ratio by +0.9pt in in millions of euros in % of revenues 9m11 at 11.0%, in line with 2011 indication of +8% ~13% of revenue France +262 3,731 – increase of CPE* inve
Slide 14: Business review
2 business review
Slide 15: 3Q11 France financials
3Q11 France financials top line trend starts reflecting our more segmented commercial approach 3Q11 revenue ex-reg mobile growth still resilient (3Q revenue -2.8%* excl. regulatory impacts) var var in €m in €m 3Q11 in cb 9m11 in cb +17,411 revenue 5,569 -4.6% 16,873 -3.1% -313 +426 +16,873 -104 pers
Slide 16: 3Q11 France personal KPIs
3Q11 France personal KPIs strong commercial momentum and market share stabilization stabilized mobile retail market share insight network market share retail market share while tightly managing commercial costs we have been able to: 46.2% 46.1% 45.8% 45.9% 45.5%* 45.5%* – almost stabilize our retail
Slide 17: 3Q11 France home KPIs
3Q11 France home KPIs Broadband net adds at >35% and PSTN erosion slowing down ADSL conquest share strong growth broadband ARPU back at 36€/month in €/month services access ADSL market share ADSL net adds internet PSTN 46.3% 46.0% 45.5% 45.3% 34.9 34.6 34.6 36.1 35.5 36.0 45.2%* 45.2%* 7.5 6.6 6.9 3
Slide 18: France marketing: segmentation preserves value
France marketing: segmentation preserves value 2007/2008 2011 basic offer: premium offer: Orange internet triple-play: Livebox Zen Livebox Star Fibre 3 offers internet triple play: 1 offer Net/Formule convergence quadruple play commitment/loyalty commitment/loyalty subsidized Orange Intense subsidiz
Slide 19: 3Q11 Spain
3Q11 Spain keeps on outperforming with 4th quarter in a row of growth incl. regulation 3Q11 revenue* ongoing revenue growth greater than GDP (3Q revenue +7.4% excl. regulatory impacts) evolution* var var Orange Spain GDP* in €m 3Q11 in cb 9m11 6.5% 6.7% 7.4% in cb Orange Spain, excl.reg. 4.2% 4.8% 3
Slide 20: 3Q11 Poland
3Q11 Poland revenue trend improving 3Q11 revenue* growing customer base and >30% share (3Q revenue -1.7% excl. regulatory impacts) of smartphones in postpaid sales * var var mobile customer base (k) share of smartphones in postpaid sales in €m 3Q11 in cb 9m11 and retention in cb +12pts +3.3% 31% rev
Slide 21: 3Q11 Rest of the World
3Q11 Rest of the World positive excl. reg. trend maintained despite negative impact of Egypt 3Q11 revenue*: -1.0% ROW mobile customer base (+0.7% excl. regulatory impacts) var var in millions in €m 3Q11 9m11 var rank in cb in cb total 95.1 +20.7% total ROW 2,222 -1.0% 6,503 -1.1% Egypt 31.6 +11.2% 2
Slide 22: 3Q11 enterprise
3Q11 enterprise improvement in revenue trend sustained by large service deal deliveries 3Q11 enterprise revenue* : -1.1% insight legacy networks: migration to new technologies continues var var to impact Data products, while the decline of voice legacy in €m 3Q11 in cb 9m11 in cb is similar to previ
Slide 23: EE: growing revenue excluding regulation and market low churn rate
EE: growing revenue excluding regulation and market low churn rate in postpaid reflecting higher loyalty Service revenues growing +3.8% ex Strong postpaid net adds regulation, £m Postpaid net adds -1.9% 30 0 k +3.8% (87) +91 236 k 18 5k 18 5k (34) 16 0 k 1,586 1,499 1,556 Orange T-Mobile Q3/10 regul
Slide 24: Outlook and conclusion
3 outlook and conclusion
Slide 25: Guidance
guidance guidance 2011-2013 FY 2011 operating 2011-2013 cumulated cash flow ~€27bn guidance (restated (excl. exceptional items) increased to slightly above EBITDA-Capex) €9bn in 2011 €9bn in 2011 10 11e 12e 13e 14e 15e dividend €1.40 dividend payment for 2011 dividend confirmed and 2012 fiscal years
Slide 26: Appendix
appendix
Slide 27: EBITDA restatements
EBITDA restatements in €m 1H10cb 1H11 3Q10cb 3Q11 9m10cb 9m11 EBITDA restated 8,056 7,613 4,219 3,998 12,275 11,611 litigations DPTG 266 266 EU fine on TPSA 115 115 labour related free share plan 23 23 part-time senior plan 37 13 33 19 70 32 other Emitel disposal (197) (197) EBITDA reported 8,019 7,
Slide 28: Details on revenue
details on revenue change 2011/2010* % excl. in €m 3Q10 A forex perimeter 3Q10 CB 3Q11 €m % regul Group revenue 11,628 (108) 0 11,520 11,280 (240) -2.1% -0.5% France 5,841 - (7) 5,835 5,569 (266) -4.6% -2.8% personal 2,738 - - 2,738 2,695 (43) -1.6% +1.7% home 3,351 - (7) 3,345 3,184 (161) -4.8% -3.
France Telecom-Orange — Q3 2011 Earnings Presentation on 6ix