2010 first half results
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Paris, July 29, 2010 
the solid performance in the first half 2010 enabled the Group to confirm its organic cash-flow objectives for 2010 and 2011
France Telecom proposes to its shareholders an annual dividend of €1.40 per share in 2010, 2011 and 2012
consolidated revenues of 22.144 billion euros for the first half of 2010, down 2.2% on a comparable basis. Excluding the effect of regulation, revenues were stable compared with the first half of 2009 but the trend improved in the second quarter of 2010, up +0.3%
EBITDA was 7.745 billion euros for a margin of 35.0%, with the erosion limited to 0.9 points on a comparable basis
the Group’s share of net income was 3.725 billion euros in the first half 2010
capital expenditure was 2.114 billion euros in the first half, for a CAPEX rate of 9.5% of revenues
organic cash flow of 3.989 billion euros in the first half of 2010. The Group confirms its ambition for organic cash-flow generation for 2010 and 2011
a total year-on-year increase in the customer base of 3.8%, with 182 million customers at 30 June 2010
- 6.6% growth in the mobile customer base to 123.1 million customers at 30 June 2010, driven by Africa and the Middle East with a combined total of 34.0 million customers at 30 June 2010, an increase of 18.4% year on year
- 2.2% growth in ADSL broadband subscribers (13.2 million customers) and rapid growth of digital TV with 3.6 million subscribers at 30 June 2010, a year-on-year increase of 34%
stable first half 2010 revenues compared with the first half of 2009 excluding the effects of regulation, an improvement after the 0.9% downturn recorded in the second half of 2009:
- very strong growth of 8.0% in Africa and the Middle East driven mainly by the 29% increase from new operations
- growth of operations in France (+0.3%, including +4.0% growth in mobile services), Spain (+2.5%, including +3.7% growth in mobile services), Poland (an improvement of 1.8 points to -3.4%, following -5.2% in the second half of 2009) and the other European countries (+0.9%), led by Belgium
the Enterprise segment declined 6.0% in the first half of 2010
- improved revenue trend in the second quarter of 2010, up 0.3% compared with a decrease of 0.3% in the first quarter (excluding regulatory measures). This improvement concerned most areas of the Group’s footprint.
EBITDA margin of 35% in the first half of 2010, a slight decrease of 0.9 points in relation to the first half of 2009, in line with annual objectives. The EBITDA margin trend improved in the second quarter, with a decline limited to -0.7 points compared with -1.0 point in the first quarter. There was notable improvement in France and Poland, while the EBITDA margin continued its steady rise in Spain
capital expenditure was 2.1 billion euros (9.5% of revenues) in the first half of 2010, down 7.5% from the first half of 2009 on a comparable basis. However, capital expenditure picked up in the second quarter of 2010, rising 6.0% compared with the second quarter of 2009. This followed difficult weather conditions, particularly in Poland, that had led to a significant drop in investment in the first quarter (-21.7%)
organic cash flow was 3.989 billion euros in the first half of 2010, comparable to the first half 2009 level. First half organic cash-flow generation was in line with the objective of 8.0 billion euros for the full year and helped reduce debt
net debt was reduced to 29.9 billion euros at 30 June 2010, compared with 32.5 billion euros at 31 December 2009. The ratio of net debt to EBITDA was 1.86 at 30 June 2010, in line with the financial objective of a net debt to EBITDA ratio of 2 in the medium term to preserve the Group’s independence and flexibility.
the Group’s share of net income (net income attributable to equity holders of France Telecom) was 3.725 billion euros in the first half of 2010 compared with 2.561 billion euros in the first half of 2009. The increase is principally due to income from discontinued activities related to the participation in Orange UK in the framework of creating the joint venture Everything Everywhere with T-Mobile.
dividend: France Telecom will propose a dividend of €1.40 per share for the fiscal years 2010, 2011 and 2012, subject to a vote in favour of these payments by shareholders at the relevant Annual General Meetings.
The Board of Directors decided on 28 July 2010 to pay an interim ordinary dividend for the year in progress based on first half 2010 results. An interim dividend of €0.60 per share will be paid on 2 September 2010. The ex-dividend date for the interim dividend is 30 August 2010 in the morning.
free shares: the Chief Executive Officer of France Telecom informed the Board of Directors that, in keeping with the "conquests 2015" project, he wishes to associate all employees with the future performance of the Group. To do this, he indicated that a project outlining this plan will soon be presented to the Board of Directors.
Commenting on the first half results, France Telecom Chief Executive Officer Stéphane Richard stated: “Following the announcement of the “conquests 2015” project in early July in which we clarified our businesses and redefined our outlook, it is my pleasure today to present solid half-year financial results. Once again, the Group has shown its resilience despite the unsettling economic conditions in our main markets. The downturn in revenues was more limited in the second quarter than previously, and we continued to attract even more customers – 182 million of them have chosen us, including 131 million under the Orange brand. This trend holds promise for the future because it affects all of our operations, especially mobile services in France, Spain and countries in Africa and the Middle East. In terms of profitability, we have succeeded in adapting to these challenging times and maintained an EBITDA margin of 35% of revenues, in line with our annual objectives. This is why we are reiterating our organic cash flow objectives for 2010 and 2011. And lastly, the Board of Directors accepted my proposal to commit for the coming three years to an annual dividend payment to our shareholders of €1.40, while maintaining our ability to invest and to grow.”
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France Telecom proposes to its shareholders an annual dividend of €1.40 per share in 2010, 2011 and 2012
consolidated revenues of 22.144 billion euros for the first half of 2010, down 2.2% on a comparable basis. Excluding the effect of regulation, revenues were stable compared with the first half of 2009 but the trend improved in the second quarter of 2010, up +0.3% EBITDA was 7.745 billion euros for a margin of 35.0%, with the erosion limited to 0.9 points on a comparable basis the Group’s share of net income was 3.725 billion euros in the first half 2010 capital expenditure was 2.114 billion euros in the first half, for a CAPEX rate of 9.5% of revenues organic cash flow of 3.989 billion euros in the first half of 2010. The Group confirms its ambition for organic cash-flow generation for 2010 and 2011 a total year-on-year increase in the customer base of 3.8%, with 182 million customers at 30 June 2010 - 6.6% growth in the mobile customer base to 123.1 million customers at 30 June 2010, driven by Africa and the Middle East with a combined total of 34.0 million customers at 30 June 2010, an increase of 18.4% year on year
- 2.2% growth in ADSL broadband subscribers (13.2 million customers) and rapid growth of digital TV with 3.6 million subscribers at 30 June 2010, a year-on-year increase of 34%
stable first half 2010 revenues compared with the first half of 2009 excluding the effects of regulation, an improvement after the 0.9% downturn recorded in the second half of 2009:- very strong growth of 8.0% in Africa and the Middle East driven mainly by the 29% increase from new operations
- growth of operations in France (+0.3%, including +4.0% growth in mobile services), Spain (+2.5%, including +3.7% growth in mobile services), Poland (an improvement of 1.8 points to -3.4%, following -5.2% in the second half of 2009) and the other European countries (+0.9%), led by Belgium
the Enterprise segment declined 6.0% in the first half of 2010- improved revenue trend in the second quarter of 2010, up 0.3% compared with a decrease of 0.3% in the first quarter (excluding regulatory measures). This improvement concerned most areas of the Group’s footprint.
EBITDA margin of 35% in the first half of 2010, a slight decrease of 0.9 points in relation to the first half of 2009, in line with annual objectives. The EBITDA margin trend improved in the second quarter, with a decline limited to -0.7 points compared with -1.0 point in the first quarter. There was notable improvement in France and Poland, while the EBITDA margin continued its steady rise in Spain capital expenditure was 2.1 billion euros (9.5% of revenues) in the first half of 2010, down 7.5% from the first half of 2009 on a comparable basis. However, capital expenditure picked up in the second quarter of 2010, rising 6.0% compared with the second quarter of 2009. This followed difficult weather conditions, particularly in Poland, that had led to a significant drop in investment in the first quarter (-21.7%) organic cash flow was 3.989 billion euros in the first half of 2010, comparable to the first half 2009 level. First half organic cash-flow generation was in line with the objective of 8.0 billion euros for the full year and helped reduce debt net debt was reduced to 29.9 billion euros at 30 June 2010, compared with 32.5 billion euros at 31 December 2009. The ratio of net debt to EBITDA was 1.86 at 30 June 2010, in line with the financial objective of a net debt to EBITDA ratio of 2 in the medium term to preserve the Group’s independence and flexibility. the Group’s share of net income (net income attributable to equity holders of France Telecom) was 3.725 billion euros in the first half of 2010 compared with 2.561 billion euros in the first half of 2009. The increase is principally due to income from discontinued activities related to the participation in Orange UK in the framework of creating the joint venture Everything Everywhere with T-Mobile. dividend: France Telecom will propose a dividend of €1.40 per share for the fiscal years 2010, 2011 and 2012, subject to a vote in favour of these payments by shareholders at the relevant Annual General Meetings.The Board of Directors decided on 28 July 2010 to pay an interim ordinary dividend for the year in progress based on first half 2010 results. An interim dividend of €0.60 per share will be paid on 2 September 2010. The ex-dividend date for the interim dividend is 30 August 2010 in the morning.
free shares: the Chief Executive Officer of France Telecom informed the Board of Directors that, in keeping with the "conquests 2015" project, he wishes to associate all employees with the future performance of the Group. To do this, he indicated that a project outlining this plan will soon be presented to the Board of Directors.Commenting on the first half results, France Telecom Chief Executive Officer Stéphane Richard stated: “Following the announcement of the “conquests 2015” project in early July in which we clarified our businesses and redefined our outlook, it is my pleasure today to present solid half-year financial results. Once again, the Group has shown its resilience despite the unsettling economic conditions in our main markets. The downturn in revenues was more limited in the second quarter than previously, and we continued to attract even more customers – 182 million of them have chosen us, including 131 million under the Orange brand. This trend holds promise for the future because it affects all of our operations, especially mobile services in France, Spain and countries in Africa and the Middle East. In terms of profitability, we have succeeded in adapting to these challenging times and maintained an EBITDA margin of 35% of revenues, in line with our annual objectives. This is why we are reiterating our organic cash flow objectives for 2010 and 2011. And lastly, the Board of Directors accepted my proposal to commit for the coming three years to an annual dividend payment to our shareholders of €1.40, while maintaining our ability to invest and to grow.”
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