Slide 1: Orange financial results H1 2021
Orange financial results #H1_2021 29 July 2021 Stéphane Richard Chairman and CEO Ramon Fernandez Deputy CEO, Finance, Performance and Development 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Orange's financial situation, results of operations and strategy. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to
Slide 3: Section One: Q2 2021 highlights
Section One Q2 2021 highlights
Slide 4: Q2 Key messages
Q2 Key messages Excellent commercial FTTH leadership performance reinforced overall with strong with additional+1.2m equipment customers sales driven in France by shops and 400K in Europe reopening and 5G reaching 9.2M customers Revenues acceleration driven by outstanding Africa & Middle East, other
Slide 5: Q2 key achievements
Q2 21 key achievements FTTH France Enterprise 51.8m +353k +10.8% Connectable homes Strong FTTH net adds in Q2 Yoy Q2 IT&IS growth 10.3m +28% 26.1m ~ +10% Customers yoy FTTH connectable lines Digital & Data, Cloud and Cyberdefense +2.2m JV between Capgemini and Orange to Customers yoy, accelerating i
Slide 6: H1 financial achievements
H1 21 financial achievements Revenue EBITDAaL eCapex €20.9bn €5.8bn €3.8bn +1.5% -0.4% +22.8% yoy in H1 21 yoy in H1 21 yoy in H1 21 Organic Net debt/ Cash Flow EBITDAaL €840M 1.99x (Telecom) (Telecom) Yoy: comparison with the same period of the previous year, on a comparable basis unless otherwise
Slide 7: Section Two: Financial results overview
Section Two Financial results overview 7
Slide 8: Q2 revenue growth contribution per segment
Q2 revenue growth contribution per segment (yoy in €m) Revenue +2.6% accelerating +2.3% +14.4% 10,551 8 +6.1% 43 in Q2 2021 Other European Countries 47 196 10,288 80 -31 -33 Spain -0.7% -2.7% Q2 20 cb France Europe MEA Enterprise Others Q2 21 +27.5% Q2 2021 H1 2021 Q2 revenue evolution per activity
Slide 9: Resilient H1 EBITDAaL
Resilient H1 21 Group EBITDaAL evolution per segment yoy, in €m EBITDAaL -0.4% 5,859 Mobile -35 5,837 financial -75 -2 19 services -71 -56 153 5,933 Improving trends 5,893 -118 33 Telecom activities Q2 2021 H1 2021 yoy yoy Group -0.4% -0.4% EBITDAaL -€14m -€21m yoy yoy H1 France Spain other MEA Ente
Slide 10: Net income down
-€3,620bn 1,015 -21 -276 -3,702 Net income down due to impairment on Spain 308 71 -2,605 H1 2020 EBITDAaL cb adjustments* Impairment of Financial result D&A, income H1 2021 Spain goodwill tax paid & others 1 2 3 1 Includes restructuring programmes (€286m)* H1 2021 Impairment in Spain mainly reflects
Slide 11: Organic Cash Flow reaching €840m in H1 2021
Organic Cash Flow* reaching €840 m in H1 2021 (in €m) +0.6bn€ yoy Significantly 2,060 98 -582 -500 increasing -236 840 organic cash flow* EBITDAaL -eCapex change in net financial income taxes paid other operational Organic (telecom activities) working capital interests paid** items Cash Flow * (incl
Slide 12: Section Three: Business Review
Section Three Business Review 12
Slide 13: Q2 2021 France: Retail services accelerating
Q2 2021 France Retail services accelerating in €m Q2 21 yoy cb H1 21 yoy cb Retail revenues growth excl. PSTN & DCO Revenues 4,546 -0.7% 8,950 -0.5% 2.6% Retail services 2,695 +0.4% 5,383 +0.1% 2.4% Wholesale 1,434 -5.6% 2,720 -4.2% 1.9% Equipment sales 254 23.4% 523 1.9% +14.2% 1.7% EBITDAaL 3,181
Slide 14: Q2 2021 Europe
Q2 2021 Europe Solid commercial performance. Other European Countries’ EBITDAaL growing +4.7% yoy H1 EBITDAaL evolution (in €m) in €m Q2 21 yoy cb H1 21 yoy cb Revenues 2,581 +1.8% 5,164 -0.3% -5.9% Retail services 1,724 -2.1% 3,451 -3.3% Wholesale 472 -0.2% 926 -2.0% Equipment sales 349 26.8% 718 +
Slide 15: Q2 2021 Spain
Q2 2021 Spain Ongoing simplification and transformation Customer base stabilising since in €m 2Q20 driven by churn improvement Q2 21 yoy cb H1 21 yoy cb Convergence net adds +9k Revenues 1,180 -2.7% 2,368 -5.1% in ‘000 Retail services 797 -8.3% 1,614 -9.2% +2.4% Mobile contract net adds* +36k Wholes
Slide 16: Q2 2021 Africa & Middle East
Q2 2021 Africa & Middle East Acceleration of growth +1.9 pts EBITDAaL margin yoy in €m Q2 21 yoy cb H1 21 yoy cb Revenues 1,555 +14.4% 3,043 +10.7% Retail services 1,359 +15.8% 2,660 +12.8% 34.5% Wholesale 157 +0.6% 310 -5.6% 32.7% Equipment sales 30 42.2% 54 +28.8% EBITDAaL 1,051 +17.0% eCAPEX 525
Slide 17: Q2 2021 Enterprise
Q2 2021 Enterprise IT&IS drives top line growth and quasi stability for EBITDAaL Double digit growth in €m Q2 21 yoy cb H1 21 yoy cb Revenues 1,932 +2.3% 3,840 +1.3% +14% yoy in H1 21 Fixed only services 916 -5.3% 1,834 -4.5% IT & integration services 796 +10.8% 1,565 +8.6% Mobile 220 +8.7% 440 +3.4
Slide 18: Section Four: Guidance
Section Four Guidance 18
Slide 19: Guidance 2021 confirmed
Guidance 2021 confirmed 2021e 2021e before tax refund After tax refund allocation allocation EBITDAaL, yoy Around +1% Flat - eCAPEX ~ €7.3 bn € 7.6 -7.7bn Organic Cash Flow (telecom) > €2.6bn > €2.2bn Net debt / EBITDAaL Around 2x in the medium term Around 2x in the medium term (telecom) Dividend €0
Slide 20: Section Five: Orange Growth
Orange Infra Orange Orange Section Five Orange Africa Growth Tech Focus GROWTH Orange Services 20
Slide 21: Growth engines and transformational programmes at full speed
Orange Growth Growth Engines and transformational programmes at full speed Infrastructure Scale up leadership Orange Bank now bottoming out Capex down Accelerating Fuelling organic growth Europe, Cash flow convergence paving the way for growth OBS and Orange MEA Cyberdefense Leadership Growth Focus
Slide 22: Our growth engines at a glance
Orange Growth Our GROWTH engines at a glance Growth, a common element of our six engines MEA Europe OBS EBITDAaL ~ +€150m EBITDAaL Growing EBITDAaL growth Growing double-digit from 2020 till 2023 2022, 2023 From 2023 v. 2020 including Spain Orange Orange Infrastructure Cyberdefense Bank EBITDAaL Ind
Slide 23: FTTH, Orange undisputed pioneer in Europe
FTTH, Orange undisputed pioneer in Europe Orange Growth VHBB own deployment till Q1 2021, in million lines 50.3 Other FTTH* 0.2 *Multiple colours 28.7 25.7 43.7 41.9 36.6 24.1 25.7 16.7 6.6 ~6** 6.4 4.6 4.2 ~4*** ORA TEF DT VOD BT TIM ORA: Own network TEF: Only TEF Spain DT: FTTH Deployment includes
Slide 24: Wholesale harvest will fuel income beyond 2023
Wholesale harvest will fuel income beyond 2023… Orange Growth National roaming decrease French wholesale revenues will be partially offset by growth levers (IoT, new MVNO contracts, etc) Mobile Fixed France fixed wholesale revenues will near-stabilise 2019 2020 2021 2022 2023 2024 2025 between 2024
Slide 25: New growth levers to mitigate legacy decline
Orange Growth … with new growth levers to mitigate legacy decline Conquest of perennial infrastructure and Enterprise market will limit national roaming, Interco and copper decrease Near 2/3 of net revenue loss between 2021 and 2025 has very low EBITDAaL impact Our growth engines will limit the impa
Slide 26: Pragmatic infrastructure approach to create growth
Pragmatic infrastructure approach to create growth Orange Growth Providing tailor-made solutions Orange Concessions: the leading fibre platform in French rural areas Totem, creating a leading European mobile passive infrastructure Taking advantage of the fibre platform commercial momentum to acceler
Slide 27: Clear and credible growth ambitions
Clear and credible GROWTH ambitions… Orange Growth Additional contribution from 2020 to 2023 from MEA, OBS, Orange Cyberdefense, Orange Bank and Europe, including Spain Revenues EBITDAaL ~ +€2bn ~ +€1bn 2023 vs 2023 vs 2020 2020 Growth Focus 27
Slide 28: Transformational programmes; 2023 guidance reiterated
… associated with transformational programmes Orange Growth allowing reiteration of the guidance Group 2023 guidance confirmed Net Indirect eCAPEX Org. Cash flow cost savings ( scale up) Decrease €3.5 to -€1bn from 2022 on track €4bn On track 2023 vs Reiterated 2019 Growth Focus 28
Slide 29: Conclusion
Orange Growth Orange Infra Orange Orange Conclusion Orange Africa Growth Tech Orange GROWTH Orange Services 29
Slide 30: Annexes
Annexes 30
Slide 31: Finance table details by segment
Finance table details by segment France Europe Spain in €m Q2 2 1 yoy cb H1 2 1 yoy cb in €m Q2 2 1 yoy cb H1 2 1 yoy cb in €m Q2 2 1 yoy cb H1 2 1 yoy cb Revenues 4 546 -0.7% 8 950 -0.5% Revenues 2 581 +1.8% 5 164 -0.3% Revenues 1 180 -2.7% 2 368 -5.1% Retail services 2 695 +0.4% 5 383 +0.1% Retail
Slide 32: Change in net income
Change in net income H1 2020 H1 2020 H1 2021 (in €m, on a historical basis) historical cb actual EBITDAaL 5,914 5,859 5,837 Neutralisation of IFRS 16 lease interest expenses effects in EBITDAaL 58 58 Adjustments* (168) (443) Depreciation & amortization of fixed assets (3,549) (3,499) Other income /
Slide 33: Adjustments
Adjustments H1 2020 H1 2021 in €m Historical Actual Restructuring programs costs (19) (305) Acquisitions and integration costs (10) (20) Significant litigations (169) (89) Specific labour expenses (28) (41) o\w Senior Part Time (28) (29) Fixed assets, investments and businesses portfolio review 59 1
Slide 34: Change in net debt
Change in net debt (in millions of euros) H1 2020 FY 2020 H1 2021 EBITDAaL - eCAPEX (telecom activities) 2,843 5,736 2,060 Change in eCAPEX payables (340) 307 (284) Change in working capital requirements (1,017) (500) 382 Net interest paid (including dividends received)* (559) (1,127) (582) Income t
Slide 35: Acceleration in FTTH rollout in a post-COVID context
Acceleration in 52.8m VHBB** connectable lines FTTH rollout in a post-COVID FTTH connectable lines in France VHBB connectable lines in Spain FTTH connectable lines in Poland context +36% +4% +17% 15.7m 26.1m 5.4m 19.3m 15.1m 4.6m 2Q 20 2Q 21 2Q 20 2Q 21 2Q 20 2Q 21 FTTH acceleration in France H1 202
Slide 36: Convergent B2C customer base in million
Convergent B2C customer base in million % of broadband B2C customer base Convergence, France* Spain Poland the bedrock of 5.85 5.86 3.02 1.52 5.84 3.00 3.01 1.50 1.48 our strategy 5.82 53% 2.96 86% 66% 2.95 1.44 5.80 1.41 85% 55% 63% Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q2 20
Slide 37: Towards a more sustainable, inclusive & responsible 2025
Digital inclusion Towards a more develop connectivity and inclusive services Ambitions sustainable, FTTH connectable homes (in millions) 1H21 52m 69m / 2023 inclusive & Orange Digital Center July 21 8 32 / 2025 responsible 2025 Environment reduce our CO2eq emissions and implement circular economy to