2008 annual results good operational performance and organic cash flow of €8 billion, the Group achieved all its 2008 objectives

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2008 annual results good operational performance and organic cash flow of €8 billion, the Group achieved all its 2008 objectives

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Paris, March 04, 2009

2.9% increase in consolidated revenues on a comparable basis to €53.5 billion. With an increase of 1.7% on a comparable basis, the 4th quarter confirms the resilience of the Group to the deterioration of the economic climate
7% increase year on year in the total number of customers with 182.3 million customers at 31 December 2008, including 121.8 million mobile customers, up 11%, and 12.7 million ADSL broadband customers, up 9%
2.8% increase in gross operating margin (GOM) on a comparable basis to €19.4 billion; stabilization of the GOM rate (GOM to revenues) at 36.3% on a comparable basis
capital expenditure rate (CAPEX to revenues) of 12.8%, in line with the objective of approximately 13% of revenues
growth in organic cash flow to €8.0 billion, up from €7.8 billion in 2007 and in line with the stated objective
decrease in the net debt/GOM ratio to 1.85, with a net debt of €35.9 billion as of 31 December 2008, a reduction of €2.1 billion year on year
net income Group share rose 13.6% on a comparable basis (1) to €5.2 billion, compared with €4.6 billion in 2007. On an actual basis, it was €4.1 billion in 2008 compared with €6.3 billion in 2007
the NExT plan objectives having been reached, employees, in addition to existing remuneration schemes tied to the results, will benefit from:

the free share distribution program, approved by the Board in April 2007 and which will be implemented on 25 April
exceptional employee profit sharing for 2008, proposed by the Board and which will be the subject of negotiations with employee representatives

a proposed dividend of €1.40 per share for 2008. Taking into account the interim dividend payment of €0.60 per share on 11 September 2008, the balance of €0.80 will be paid on 30 June 2009 of which shareholders can choose to receive €0.40 in new shares

(1) The principal non-recurring items taken into account to establish the net income Group share on a comparable basis are indicated on page 7 under “net income”

outlook for 2009

The Group has based its 2009 objectives on the economic outlook as of the end of February:

stable organic cash flow at 2008 level of €8 billion (before the possible acquisition of new frequencies for mobile services)
maintaining CAPEX rate of between 12% and 13%. If the deterioration in the economic environment intensifies, investments could be reduced
the Group is strongly positioned to maintain or increase its market share in the countries where it is present

growth in Group revenues should, as in 2008, be greater than the average GDP (gross domestic product) trend within the Group’s footprint
the Group will reinforce ongoing transformation programs in order to contain the decline in the GOM rate

a reduction in debt will be pursued with a net debt/EBITDA (2) ratio of less than 2 in order to preserve the independence and flexibility of the Group
maintaining an organic cash flow distribution rate greater than or equal to 45% while maintaining a good liquidity position
the amount of the interim dividend shall be decided in accordance with the first-half results for 2009

(2) See glossary and paragraph “presentation of the business segments for 2009”

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Béatrice Mandine
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