As part of the ongoing Conquests 2015 program and building on the plan’s four pillars – customers,
networks, international development and employees – France Telecom-Orange presents its
strategic and financial ambitions for the 2011-2015 period during the Group’s Investor Day.
These goals are to be pursued in two separate phases, each with distinct characteristics in
terms of growth, EBITDA and CAPEX:
- an initial adaptation phase (2011-2013) during which the Group invests in its networks and
markets, taking into account current and expected competitive, regulatory and economic
conditions. This investment effort aims to anticipate new applications and customer needs in
order to strengthen the Group’s market positions and its ability to monetize all identified
growth opportunities;
- and a conquest phase (2014-2015), during which the Group's goal is the return to sustained
growth of both revenues and operating cash flow thanks to the investments made in the
previous phase.
The adaptation phase (2011-2013) can be defined by the following ambitions:
- a Group positioned for growth, with an aim to progressively accelerate revenue growth
over the period (CAGR (1) of +0.6%);
- EBITDA stabilized in 2013 above the 2011 level. This trend should be possible thanks in
particular to the stabilization of EBITDA in France during this timeframe. The Group has been
preparing since 2010 for an increased level of competition in its domestic market.
The Group’s goal is to achieve a cumulative EBITDA of around 45 billion euros in the 2011-
2013 period.
This goal notably accounts for the implementation of a new performance plan and the
benefits expected from the ramp-up of the procurement joint venture with Deutsche Telekom.
Overall, the Group forecasts gross savings of at least 3 billion euros by 2015 (including over 2
billion euros by the end of 2013) versus the cost base in 2010. The performance plan, which
is consistent with the implementation of the new social contract in France, focuses in
particular on improving customer experience and IT systems, expanding network sharing,
pooling service platforms, and optimizing synergies.
- an aggressive investment plan aimed at ensuring that the Group is positioned as the best
next generation network operator, consolidating its competitive advantage in terms of
customer satisfaction, and enhancing the Group’s ability to monetize new growth
opportunities.
From 2011-2013, the Group forecasts cumulative CAPEX of around 18.5 billion euros,
including 1 billion euros for fiber deployment in France. This represents an average rate of
CAPEX to revenues of 12.6% over the period (excluding FTTH in France). The rate of
investment is expected to peak in 2012 (~14%) as the deployment of fiber accelerates and
the Group fulfills its network coverage and capacity objectives.
Taking these items into consideration, the Group announces cumulative operating cash flow
guidance (EBITDA – CAPEX) of around 27 billion euros over the 2011-2013 period, excluding
exceptional items.
The trends expected in the 2014-2015 conquest phase should reflect the benefits of the
preceding CAPEX phase, and translate into the following ambitions:
- revenue: the expected revenue growth rate for the period is +2.7% (2013-2015 CAGR), with
a return to growth in France and in the Enterprise segment, and a continued solid
contribution from Europe and AMEA;
- EBITDA, with 3.4% growth (2013-2015 CAGR);
- CAPEX, with the return to a normalized investment level of 10% over the period, equal to
approximately 9.8 billion euros (excluding FTTH in France, which represents an additional
point, for a total CAPEX rate of 11% equal to 10.8 billion euros); and
- operating cash flow, with a CAGR of +9% over the 2013-3015 period.
In addition, concerning the ongoing review of its portfolio of assets, one of the other drivers of
value creation, the Group does not expect, over the long term, to remain a minority shareholder of
assets in which it does not exercise an operational role. In the event of a significant divestiture, the
Group will examine the possibility of an additional return to its shareholders.
The Group renews its commitment to paying a dividend of 1.40 euros per share for the 2011 and
2012 financial years. The announced financial goals enable the Group to envisage a stable dividend
going forward. 1 Compound Annual Growth Rate
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