Latest consolidated results
Financial results at 31 December 2019
Growth in 2019 revenues and EBITDAaL, with an acceleration in the 4th quarter
Solid commercial performance in France, excellent results in Africa & Middle East, return to growth in Enterprise revenues and sustained growth in Europe.
Annual results confirm the achievement of the objectives announced for 20191 .
- Group revenues grew 0.6% in 2019 and 1.1% in the fourth quarter, accelerating from 0.8% in the previous quarter
- This increase was driven by the still very strong momentum in Africa & Middle East, which grew 6.2%, and by the solid performance in Europe and the return of growth in Enterprise, up 1.4% and 1.0% respectively in 2019. These more than compensated for a very slight decline in France of 0.3% and a decline in Spain of 1.5% in 2019 due to that market's shift towards low cost.
- Group EBITDAaL grew 0.8% in 2019 and 1.3% in the fourth quarter, accelerating from an increase of 0.2% in the previous quarter, and supported by revenue growth and cost control.
- Excluding the effects of digital content offers, revenue and EBITDAaL growth was 0.8% and 1.5% respectively for 2019.
- Group eCAPEX was up 0.6% in 2019, including the effect of sharing the mobile access network with Vodafone in Spain. Excluding this, eCAPEX decreased slightly. This performance was achieved against a backdrop of accelerating fiber deployment in France.
- Organic Cash Flow from telecoms activities reached 2.3 billion euros, significantly exceeding the objectives announced for 2019.
These good results are the fruit of the Group's strategy centered on enhanced connectivity and new growth areas, which help to expand the customer bases:
- Convergent offers totaled 10.8 million customers at December 31, 2019, up 3.4% year on year, enabling Orange to consolidate its position as Europe's leading convergent operator.
- With 7.3 million fiber customers, Orange is the undisputed leader in fiber in Europe, posting strong growth in 2019 with 745,000 net sales in France and a record fourth quarter in both France and Poland with 239,000 and 47,000 net sales respectively.
- In Africa & Middle East, 4G deployment continued, reaching more than 23.8 million customers by the end of 2019, an increase of 42.6% year on year. Orange Money, with a base of 18.2 million active customers at the end of 2019, grew 20.1% in one year.
- IT&SI activities as a share of Enterprise revenues reached 37.2% in 2019, up 2 points compared to 2018. This increase reflects the performance of cloud and cybersecurity services, where Orange has become a European leader thanks to the acquisitions of SecureData and SecureLink.
- At the end of 2019 Orange Bank had over 500,000 customers, including 390,000 account holders in France, and launched the offer in Spain.
In line with its environmental commitments, in 2019 Orange reduced its CO2 emissions by 5.4% in absolute terms compared to 2018, despite the growth in usage over its networks.
1 Unless otherwise stated, changes are on a comparable basis.
Outlook for 2020
Orange confirms its objectives for 2020, as announced at the Investor Day on 4 December 2019:
- EBITDAaL for 2020 will be “flat positive”.
- 2020 eCAPEX, which includes the impact of network sharing agreements in Spain and Belgium, will be 200 million euros higher.
- Organic Cash Flow for telecoms activities in 2020 will be more than 2.3 billion euros, an improvement on the target announced at the Investor Day in December.
- The ambition to achieve additional net savings of 1 billion euros by 2023 on a defined indirect cost base of 14 billion euros in 2019 now becomes a committment.
- The target ratio of net debt to EBITDAaL for telecoms activities will be maintained at around 2x in the medium term.
- The payment of a dividend of 0.70 euros per share for the full year 2020 will be proposed, with an interim dividend of 0.30 euros per share to be paid in December 2020.
- Over the 2021-2023 period Orange will pay an annual dividend of at least 0.70 euros per share, without excluding the possiblityof an increase depending on Organic Cash Flow performance.
Commenting on the publication of these results, Stéphane Richard, Chairman and CEO of the Orange Group, said:
"In view of the highly competitive market context, 2019 was a successful year for Orange. We delivered revenue and EBITDAaL growth that accelerated in the 4th quarter. The Essentials2020 plan has been achieved confirming the validity of our strategy, which was rooted in the superiority of our networks, the richness of our services and the quality of our customer care.
This year we reached a level of 40 million households connectable to very high-speed broadbrand networks and are the undisputed fibre leader in Europe. We were named "Best Mobile Network” for the 9th consecutive year in France and now provide 4G in 15 of our Africa & Middle East countries. Finally, we successfully launched 5G in Romania, setting the scene for upcoming roll-outs in Europe.
This network leadership allowed us to continue our excellent commercial performance. Our convergent offers total 10.8 million customers (+3.4%), which confirms our number 1 position in Europe. We also increased our fibre customer base by 23% to 7.8 million, driven by net sales in France and Spain.
I'd like to highlight that once again this year Africa & Middle East is one of the main growth drivers for the Group. We now have nearly 24 million 4G customers (+43%) and 18.2 million active Orange Money customers (+20%).
In 2019 Orange also asserted its ambitions in cybersecurity, becoming a European leader thanks to the acquisitions of SecureData and SecureLink, thereby also strengthening the global network leadership position of Orange Business Services.
Last but not least, Orange reduced its CO2 emissions by 5.4% compared to the previous year at the same time as digital usage exploded on our networks. Orange is well placed to deliver its environmental commitments for the period to 2025.
Further strengthened by these positive results and thanks to carefully managed investments and improved operational efficiency, we are improving our guidance for Organic Cashflow for 2020. This will be the first year of our new Engage 2025 plan which, guided by our Purpose, will allow us to meet the formidable challenges ahead while delivering sustainable growth."
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