France Telecom showed resilience in the first half 2009 despite increased regulatory pressure and continued deterioration in the economic environment
Paris, July 30, 2009
revenues fell 0.5% in the first half of 2009 on a comparable basis, against the backdrop of a 2.9% decline in GDP across the Group’s footprint
- the customer base grew 6.6% in one year
the first half EBITDA margin was 34.7%, declining 0.7 points due to a slowdown in consumption and increased regulatory pressure
- the EBITDA margin rose 0.2 points in the second quarter to 35.4%, after a decline of 1.7 points in the first quarter, reflecting the initial results of the cost savings and transformation plans
organic cash flow was 4.1 billion euros
- organic cash flow is ahead of the normal level compared with the first half of 2008
- investments were 2.5 billion euros lower to take into account the current level of activity and following a period of sustained investment from 2006 to 2008
- the 2009 objective of organic cash flow of 8 billion euros is confirmed
6.6% increase year on year in the total number of customers (186 million customers at 30 June 2009), driven by the 9.7% rise in mobile services in one year to 125.5 million customers at 30 June 2009
revenues down by 0.5% on a comparable basis to 25.5 billion euros for the first half of 2009
- operations in France, driven by mobile services, rose 1.5% while Africa and the Middle East rose 5.8% due to the growth of new operations (+27.8%) and Egypt (+11.1%)
- most of the other geographic areas were affected by the deterioration in the economic environment, with the impact on revenues often amplified by the effect of regulatory decisions: revenues fell 6.1% in Poland, 4.8% in Spain and 2.6% in the United Kingdom (on a comparable basis)
- in the second quarter of 2009, revenues declined 1.3% on a comparable basis, which was nonetheless better than the average GDP trend across the Group's footprint, estimated at -3.2% in the second quarter and -2.6% in the first quarter
EBITDA margin was 34.7%, a 0.7-point decline compared to the first half of 2008
- improved profitability in Spain, in mobile in France and the United Kingdom and in the Enterprise division
- a 0.2-point improvement in the second quarter of 2009 to 35.4%, after dropping 1.7 points in the first quarter (on a comparable basis)
CAPEX was 2.528 billion euros in the first half of 2009 (9.9% of revenues), compared with 3.069 billion euros in the first half of 2008 (12% of revenues) on a comparable basis. This reduction is related to:
- the non-recurrence of real estate investments made in the first half of 2008 of 163 million euros
- the optimization and adjustment of investments to the level of activity particularly in 2G networks, IT and fixed legacy services
12.4% growth in organic cash flow to 4.1 billion euros in the first half of 2009, compared with 3.6 billion euros in the first half of 2008
- the phasing of cash flow generated in the first half of 2009 is ahead of that in the first half 2008; it is in line with the objective for 2009 of 8 billion euros
- organic cash flow growth principally reflects the increase in EBITDA-CAPEX ratio(+5%), the decrease in net financial expenses and the decline in expenses related to the acquisition of telecommunication licenses
- it also incorporates the positive impact of financial transactions (the unwinding of hedging transactions and the buy-back of TDIRA) of 563 million euros, offset by the initial effects of the application of the French law on Modernisation of the Economy (LME) and the impact on the working capital requirement of the reduction in CAPEX and operating expenses for 502 million euros
reduction in net debt to 34.7 billion euros at 30 June 2009 (for a net debt to EBITDA ratio of 1.94), compared with 35.9 billion euros at 31 December 2008 (for a ratio of 1.96)
net income attributable to equity holders of France Telecom up 2.3% to 2.579 billion euros in comparable terms , against 2.522 billion euros in the first half of 2008; on a reported basis, it was 2.559 billion euros compared with 2.675 billion euros in the first half of 2008
confirmation of the objective of stable organic cash flow at the level achieved in 2008, which was 8 billion euros (before potential acquisitions of new frequencies for mobile services)
In the second half 2009, the Group expects:
- the impact of regulatory measures on revenues will be twice that of the first half (impact estimated at 383 million euros in the first half)
- a slight reduction in the level of activity, excluding regulatory measures, taking into account the continued decline in GDP within the Group’s footprint (the reduction in GDP is estimated at -2.6% in the second half of 2009 following -2.9% in the first half)
- the strengthening of the cost savings programs and the ramp-up of the Orange 2012 transformation plan should limit the drop in EBITDA margin compared to 2008
- a investment rate higher than in the first half due to the normal seasonality of investment spending, although the level of reduction initiatives will remain comparable to those of the first half
distribution of an interim ordinary dividend of 0.60 euros per share, paid 2 September 2009. The ex-dividend date for the interim dividend is 27 August 2009, after market close...
revenues fell 0.5% in the first half of 2009 on a comparable basis, against the backdrop of a 2.9% decline in GDP across the Group’s footprint- the customer base grew 6.6% in one year
the first half EBITDA margin was 34.7%, declining 0.7 points due to a slowdown in consumption and increased regulatory pressure- the EBITDA margin rose 0.2 points in the second quarter to 35.4%, after a decline of 1.7 points in the first quarter, reflecting the initial results of the cost savings and transformation plans
organic cash flow was 4.1 billion euros- organic cash flow is ahead of the normal level compared with the first half of 2008
- investments were 2.5 billion euros lower to take into account the current level of activity and following a period of sustained investment from 2006 to 2008
- the 2009 objective of organic cash flow of 8 billion euros is confirmed
6.6% increase year on year in the total number of customers (186 million customers at 30 June 2009), driven by the 9.7% rise in mobile services in one year to 125.5 million customers at 30 June 2009revenues down by 0.5% on a comparable basis to 25.5 billion euros for the first half of 2009- operations in France, driven by mobile services, rose 1.5% while Africa and the Middle East rose 5.8% due to the growth of new operations (+27.8%) and Egypt (+11.1%)
- most of the other geographic areas were affected by the deterioration in the economic environment, with the impact on revenues often amplified by the effect of regulatory decisions: revenues fell 6.1% in Poland, 4.8% in Spain and 2.6% in the United Kingdom (on a comparable basis)
- in the second quarter of 2009, revenues declined 1.3% on a comparable basis, which was nonetheless better than the average GDP trend across the Group's footprint, estimated at -3.2% in the second quarter and -2.6% in the first quarter
EBITDA margin was 34.7%, a 0.7-point decline compared to the first half of 2008- improved profitability in Spain, in mobile in France and the United Kingdom and in the Enterprise division
- a 0.2-point improvement in the second quarter of 2009 to 35.4%, after dropping 1.7 points in the first quarter (on a comparable basis)
CAPEX was 2.528 billion euros in the first half of 2009 (9.9% of revenues), compared with 3.069 billion euros in the first half of 2008 (12% of revenues) on a comparable basis. This reduction is related to: - the non-recurrence of real estate investments made in the first half of 2008 of 163 million euros
- the optimization and adjustment of investments to the level of activity particularly in 2G networks, IT and fixed legacy services
12.4% growth in organic cash flow to 4.1 billion euros in the first half of 2009, compared with 3.6 billion euros in the first half of 2008 - the phasing of cash flow generated in the first half of 2009 is ahead of that in the first half 2008; it is in line with the objective for 2009 of 8 billion euros
- organic cash flow growth principally reflects the increase in EBITDA-CAPEX ratio(+5%), the decrease in net financial expenses and the decline in expenses related to the acquisition of telecommunication licenses
- it also incorporates the positive impact of financial transactions (the unwinding of hedging transactions and the buy-back of TDIRA) of 563 million euros, offset by the initial effects of the application of the French law on Modernisation of the Economy (LME) and the impact on the working capital requirement of the reduction in CAPEX and operating expenses for 502 million euros
reduction in net debt to 34.7 billion euros at 30 June 2009 (for a net debt to EBITDA ratio of 1.94), compared with 35.9 billion euros at 31 December 2008 (for a ratio of 1.96) net income attributable to equity holders of France Telecom up 2.3% to 2.579 billion euros in comparable terms , against 2.522 billion euros in the first half of 2008; on a reported basis, it was 2.559 billion euros compared with 2.675 billion euros in the first half of 2008confirmation of the objective of stable organic cash flow at the level achieved in 2008, which was 8 billion euros (before potential acquisitions of new frequencies for mobile services)In the second half 2009, the Group expects:
- the impact of regulatory measures on revenues will be twice that of the first half (impact estimated at 383 million euros in the first half)
- a slight reduction in the level of activity, excluding regulatory measures, taking into account the continued decline in GDP within the Group’s footprint (the reduction in GDP is estimated at -2.6% in the second half of 2009 following -2.9% in the first half)
- the strengthening of the cost savings programs and the ramp-up of the Orange 2012 transformation plan should limit the drop in EBITDA margin compared to 2008
- a investment rate higher than in the first half due to the normal seasonality of investment spending, although the level of reduction initiatives will remain comparable to those of the first half
distribution of an interim ordinary dividend of 0.60 euros per share, paid 2 September 2009. The ex-dividend date for the interim dividend is 27 August 2009, after market close...press contacts
01 44 44 93 93
Béatrice Mandine: beatrice.mandine@orange-ftgroup.com
Bertrand Deronchaine: bertrand.deronchaine@orange-ftgroup.com
Tom Wright: tom.wright@orange-ftgroup.com
Sébastien Audra: sebastien.audra@orange-ftgroup.com
financial communication: 01 44 44 04 32 (investors and analysts)
Vincent Benoit: vincent.benoit@orange-ftgroup.com
Xavier Pichon: xavier.pichon@orange-ftgroup.com
Reza Samdjee: reza.samdjee@orange-ftgroup.com
individual shareholders: 1010
Béatrice Mandine: beatrice.mandine@orange-ftgroup.com
Bertrand Deronchaine: bertrand.deronchaine@orange-ftgroup.com
Tom Wright: tom.wright@orange-ftgroup.com
Sébastien Audra: sebastien.audra@orange-ftgroup.com
financial communication: 01 44 44 04 32 (investors and analysts)
Vincent Benoit: vincent.benoit@orange-ftgroup.com
Xavier Pichon: xavier.pichon@orange-ftgroup.com
Reza Samdjee: reza.samdjee@orange-ftgroup.com
individual shareholders: 1010
copyright France Telecom 2010
