Orange Sa · EURONEXT:ORA
Orange Sa — Investor Day (June 2019)
34 slides from Orange Sa's investor day presentation, Jun 21, 2019
Slide 1: Middle East & Africa: Solid engine of growth
Middle East & Africa Solid engine of growth #Orange MEA Day2019 Ramon Fernandez Deputy CEO, Finance, Performance and Europe Alioune Ndiaye CEO of Orange Middle East and Africa London, June 21st 2019
Slide 2: Disclaimer
Disclaimer This presentation may contain 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 Commis
Slide 3: Over 20 years in the region, a key growth asset for the group
1 Over 20 years in the region, a key growth asset for the group 2 What drives growth and our sustainable competitive advantage 3 Well-positioned for continued superior performance 4 Q&A #Orange MEA Day
Slide 4: Orange MEA at a glance
Orange MEA at a glance Orange MEA footprint (2) Key Figures 2018 – consolidated perimeter Tunisia (1) 2009 Morocco 2010 Jordan 2000 15.1m Mali 121m 1.0m 2003 Egypt 1998 Niger (2) 2008 mobile fixed broadband Orange Money Senegal 1997 customers customers active Guinea-B. 2007 Central African Republic
Slide 5: OMEA – Key driver of growth, margin and operating cash flow
OMEA – Key driver of growth, margin and operating cash flow 2018 group revenues 2018 group adj. EBITDA 2018 group OpCF 41,381 544 13,005 344 5,563 94 13% 13% 12% 24% 46% 78% 87% 87% 88% 76% 54% 22% Share of Share of Share of Share of Share of Share of Group growth (cb) Group growth (cb) Group growth
Slide 6: Over past 10 years, OMEA revenues grew on average faster than GDP
Over past 10 years, OMEA revenues(1) grew on average faster than GDP 6.7% 6.3% 5.1% 2.2% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 OMEA revenue growth current perimeter (%)(1) GDP growth current perimeter (%)(1) 6 (1) Current perimeter: excludes disposals. 2016 acquisitions excluded before 2
Slide 7: #1 or #2 positions built up over 20 years
#1 or #2 positions built up over 20 years… • Presence in 19 countries with 17 controlling interests • Leadership position in 7 markets • First challenger position in 10 markets Relative Value market shares (points in value, 2018) Orange’s #1 market share relative to the Orange’s market share positio
Slide 8: Reinforced by successful integration of 2016 acquisitions
… reinforced by successful integration of 2016 acquisitions… Recent acquisitions outperformed Orange MEA portfolio… … helping boost overall Orange MEA growth +3.5m 2018 yoy evolution in mobile customer base 20 pt Democratic EBITDAaL margin growth 16 pt Republic 3/4 2018 contribution to growth OMEA G
Slide 9: With financial exposure under strict control
… with financial exposure under strict control… Operations Healthy balance sheet monetary areas funded mostly with local debt Intra-group debt (in euros) 28% 47% €5.2bn 47% 0.9x OMEA 2018 net 2018 OMEA debt / Adj. revenues EBITDA 72% Local debt 6% (in local currencies) XOF XAF Other Intra-group Debt
Slide 10: Improving contribution to value creation
… and improving contribution to value creation OMEA Adj. EBIT evolution OMEA Net Operating Assets OMEA Operating ROCE* evolution Year n Year n-1 Year n +47% -2% +3.6pt -5% +63% +2.6pt ∕ = FY 16 FY 17 FY 18 FY 15 FY 16 FY 17 FY 16 FY 17 FY 18 10 * ROCE (n) = Adj. EBIT (n) / Net Operating Assets (n-1)
Slide 11: Growth and sustainable competitive advantage drivers
1 Over 20 years in the region, a key growth asset for the group 2 Growth and sustainable competitive advantage drivers 3 Well-positioned for continued superior performance 4 Q&A #Orange MEA Day
Slide 12: Solid performance while service mix radically transformed
Solid performance while service mix radically transformed… A transformation of service mix… …with total retail revenues growing steadily Voice stabilization (share of retail revenues %) 64% 8% 50% 6% 82% 4% Q1’16 Q4’18 Acceleration of data and Orange Money (share of retail revenues) 31% 2016 2017 20
Slide 13: Fuelled by Data, 1st engine of growth
… fuelled by Data, 1st engine of growth… Data Volume thanks to 4G Data revenues Mobile ARPU and smartphone penetration growth since 2016 121 121 (in €) 110 3 11 17 x6 3.8 +49% 3.3 3.5 107 110 2.7 0.8 1.0 104 0.7 +6% 2.6 2.7 2.8 2016 2017 2018 4G customers (in msubs) Mobile customers (in msubs) 2016
Slide 14: Then Orange Money, 2nd engine of growth
… then Orange Money, 2nd engine of growth… Orange Money Orange Money total base Steady growth of Strong increase penetration in telecom base Orange Money active base in revenues +36% (in €m) 39 34 29 +147% +6pt 334 33% +81% 241 26% 28% 12 15 135 8 2016 2017 2018 2016 2017 2018 2016 2017 2018 other m
Slide 15: And B2B, 3rd engine of growth
… and B2B, 3rd engine of growth… B2B Data contribution B2B contribution to total B2B revenues to B2B growth revenues (in €bn) +6% 0.61 0.62 0.65 66% 64% 48% 11.7% 12.4% 12.5% 2016 2017 2018 2016 2017 2018 2016 2017 2018 Our customers Our strategy 32% other ICT Digitalisation Multi-services 68% large
Slide 16: Fuelling growth with new model of sustainable competitive advantage
… fuelling growth with new model of sustainable competitive advantage... Our differentiating assets as key success factors in Africa Reliable and extensive networks Regional/Local operating model €1.6 bn spectrum on balance sheet Experienced management team 45,000 km of undersea cables Women and men
Slide 17: Unique combination of regional scale and local agility
… thanks to unique combination of regional scale and local agility… 5 transformation streams New operating model with 4 clusters Casablanca Adapt our business model to the 1 Dakar • OMEA Operational Headquarters • Sonatel Group • MENA Regional Headquarters upcoming challenges of the continent • Head
Slide 18: Strengthening very balanced portfolio
… strengthening very balanced portfolio… Our market positions in 2018 (1) Senegal #1/3 Mali #1/3 €1.7bn 29.2m €4.2 Sonatel Group Guinée Bissau #1/4 Revenues #1/3 Customers ARPU (+6%) Sierra Leone(1) #2/3 Côte d’Ivoire #1/3 €1.1bn 23.3m €3.5 OCI Group Burkina Faso #1/3 Revenues Customers ARPU Liberia
Slide 19: Less dependency on one single country compared to peers
… less dependency on one single country compared to peers… Less exposed to a single country (revenues and EBITDA in TOP 1 within countries, FY18) 34% Airtel Africa Nigeria 38% 52% Etisalat Africa Morocco 37% 33% MTN South Africa for revenues 34% and Nigeria for EBITDA 16% Ivory Coast for revenues Or
Slide 20: Showing a diversified and complementary profile
… showing a diversified and complementary profile... Growth and maturity 18% Out-perform assets Revenue growth 18 vs. 17 9% High growth assets 6% Orange MEA Growth : 5,1% 3% 0% Incumbent and mature assets 0 50 100 150 200 400 450 Leadership position Relative market share value 2018 Source: Orange ME
Slide 21: And a strong local ownership
… and a strong local ownership… Global shareholding structure (1) Dec. 31st 2018 16% 24% 60% Orange Local private investors Local authorities, governments (1) Based on Orange S.A. percentage of interest in each entity’s enterprise value (internal calculation) 21
Slide 22: Supported by an experienced management team
… supported by an experienced management team B. Ba S. Diop Sekou Drame Mali Guinea CEO of Sonatel Group S. Sy Sarr A. Kane Alioune Ndiaye Bissau Sierra Leone CEO Orange MEA Mamadou Bamba B. Haïdara M. Coulibaly CEO of Côte d’Ivoire Group Burkina Faso Liberia Jérôme Hénique Deputy CEO & COO Orange M
Slide 23: Well-positioned for continued superior performance
1 Over 20 years in the region, a key growth asset for the group 2 What drives growth and our sustainable competitive advantage 3 Well-positioned for continued superior performance 4 Q&A #Orange MEA Day
Slide 24: Strong demographic growth
Strong demographic growth… Population growth 2018-2023 Population growth over 2018-2050 +2.5% 1 in 4 living +2.4% 40% in Africa by 2050 +2.1bn +1.0% 60% 1 in 3 Africans in MEA footprint by 2050 +0.0% Europe World Africa MEA footprint in Africa rest of the world 24 Source: World Population Prospects
Slide 25: Fuelling sound long-term economic growth
… fuelling sound long-term economic growth… GDP: Africa* vs. rest of the world GDP: Orange footprint vs. MEA Middle East and Africa area 2018 2050 Orange MEA footprint 5,5% 5,5% 5,1% 5,2% #1 China 18% #1 China 20% 4,7% 4,5% #2 United States 16% #2 India 15% 4,0% 4,1% European 3,4% #3 15% #3 United S
Slide 26: Anticipated massive usage growth
… and anticipated massive usage growth > 65% smartphone adoption > 500m users in Sub-Saharan Africa by 2025 (x2 vs. 2017) circa x4 by 2023 690m smartphone users > $200bn transactions value in Sub-Saharan Africa by 2025 circa x8 by 2023 Equipment Money 40% mobile internet penetration Usage Services 6
Slide 27: We will continue to leverage our core business and new services
We will continue to leverage our core business and new services #1 Mobile data #2 #3 Fixed BB Money • Low-cost smartphone • Fibre roll-out for targeted • Increase penetration and promotion through areas usage through customer manufacturer partnership base management • Fixed LTE development, • New da
Slide 28: Orange Money paving the way for fully-fledged Orange Bank
Orange Money paving the way for fully-fledged Orange Bank Product portfolio Partners/Providers Credit/loans Pico <€100 / Micro [€100-500] Orange Bank Africa * NSIA fully-fledged bank Savings account PAMF Insurance, savings, credit, Insurance payments Product portfolio built in-house or thanks to par
Slide 29: MEA will continue to develop into multi-services
MEA will continue to develop into multi-services… Energy M-Agriculture Health Education Access facilitation to Productivity Efficiency of Teacher training energy through increase health systems improvement prepaid services through mobile through through using Orange agriculture e-health e-education
Slide 30: With focus on energy business
… with focus on energy business Standalone power Solar power Smart metering systems • Orange Jordan to be fully • Manual metering operation • Payment via Orange Money powered by renewable made automatic • More than 2,800 radio sites in energy • Energy production 2018 • Optimize energy costs optimisa
Slide 31: Consolidate footprint via strong local partnerships
MEA will continue to consolidate footprint via strong local partnerships Orange Digital Ventures Africa Interoperable hub with MTN investments in early stage for international and domestic startups transfer Group co-owner of submarine Strategic and commercial cables (ACE, Eassy, Lion) partnership wi
Slide 32: In a nutshell
In a nutshell • Make innovation a driver for growth in Africa • Meet customers essential needs while and offering an unmatched experience • Become the reference partner for Set the standard as the digital transformation across the multi-services operator continent supporting digital Vision transform
Slide 33: Shareholders can expect ongoing Orange MEA solid profitable growth
Shareholders can expect ongoing Orange MEA solid profitable growth Ongoing a major source Ongoing delivery of of revenue growth for profitable, sustainable Ongoing improvement the Orange Group and responsible growth in operational ROCE Continue to over-perform footprint Grow EBITDAaL GDP growth
Slide 34: Over 20 years in the region, a key growth asset for the group
1 Over 20 years in the region, a key growth asset for the group 2 What drives growth and our sustainable competitive advantage 3 Well-positioned for continued superior performance 4 Q&A #Orange MEA Day