Financial results at 31 March 2020
Continued growth in Revenue and EBITDAaL at the onset of the Covid crisis
- Orange Group revenues were up 1.0%1 year on year in the 1st quarter, driven by solid growth in Africa and Middle East and improvement in the Enterprise, France and Europe segments.
Revenues in Africa and Middle East grew by 6.2%, and in France by 0.5%, with a 2.2% increase in retail services excluding PSTN. Enterprise revenues grew by 0.8% and Europe by 0.3%. Spain revenues declined by 2.4%.
This momentum occurred against the backdrop of the very beginning of the Covid crisis, which led to a decrease in equipment sales due to the closure of three quarters of Orange stores in European countries from mid-March and a decline in roaming revenues.
- EBITDAaL was up 0.5% year on year and EBITDAaL from telecom activities which reached 2.64 billion euros, was up 0.1%.
- eCapex was 3.1% lower year on year, or -51 million euros less, due to delays in fixed and mobile network investments, in particular related to the impact of the Covid crisis.
These good results reflect the Group's strategy that is built around increased connectivity and new growth areas.
- Convergent offers totalled 10.8 million customers at March 31, 2020, up 3% year on year, confirming Orange in its position as Europe's leading convergent operator.
- Fibre’s continued success resulted in 8.1 million very high-speed fixed broadband customers at March 31, 2020, up 20.7% year on year. In Europe, with 40.5 million households connectable to very high-speed broadband of which 39 million are FTTH lines, Orange remains the undisputed leader in fibre deployment.
- In France, Orange has become the French telecoms market leader in terms of customer experience measured by NPS (Net Promoter Score).
- In Africa and Middle East, the deployment of 4G continues, reaching 26.5 million customers, up 50.6% in the last 12 months.
- Orange Money remains a major growth driver for Orange's operations in Africa and Middle East, and the service continued to be extended with the launch of the service in Morocco in March.
Based on currently available information, Orange does not expect a significant deviation from its financial objectives for the fiscal year 2020 but will closely monitor developments. The Group will therefore consider an update of its 2020 financial objectives at the publication of its second-quarter results when it has the benefit of greater visibility on the impact of the crisis linked to Covid-19.
Commenting on the publication of the 1st quarter 2020 results, Stéphane Richard, Chairman and CEO of the Orange Group, said:
“During this first quarter, the final weeks of which were struck by an unprecedented crisis linked to the Covid-19 pandemic, the Group continued its growth momentum in terms of revenues (+1.0%) and EBITDaL (+0.5%). This growth has been underpinned by strong performances in our Africa & Middle East business, progress in the Enterprise market, in France and in Europe. We recorded a solid performance in our retail operations, although this was mitigated in the second half of March by the closure of the vast majority of our stores in Europe.
The importance of telecoms in this crisis in ensuring the continued functioning of the economy and of our societies confirms the strategic nature of our activities and provides further confirmation for our strategy in very high-speed networks. Our fibre deployment continues to accelerate with close to 40 million households now connectable to the fibre optic network, underpinning our strong commercial performance. In this quarter the number of fibre customers reached 7.8 million, up 20% and boosted notably by uptake in France which saw a record quarter with 192,000 new subscriptions. In mobile, Orange passed the threshold of 70 million 4G customers, of which 26.5 million are in Africa & Middle East. More than ever, the roll-out of very high-speed mobile coverage throughout our territories remains a priority.
Elsewhere, we continue to reap the rewards of our investments in the quality of our customer experience. In France, for example, Orange is now the country’s leading operator in terms of Net Promoter Score (NPS).
The announcement of these results gives me the opportunity to underline how Orange has more than risen to its responsibilities in the face of the health crisis. Rarely in greater demand, our networks have withstood the pressure and allowed us to satisfy the even more than usual essential needs of our retail and business customers. Beyond our day-to-day operations, strengthened by our roots in our local communities, Orange has acted responsibly, contributing 400 million euros in support of collective efforts and cohesion through a wide range of initiatives.
All this has enabled the flawless deployment of Orange’s entire workforce. I’d like to express my special thanks to the 20,000 Orange colleagues who since the very beginning of the crisis have been at work, on the ground and with our customers, in Europe, in Africa and in the Middle East. The mobilisation of the whole company, in a way that is as strong as ever, will continue as long as necessary so as to contribute to the relaunch of the economies of all the countries where the Group is present.”
1 Unless otherwise stated, all variations in this press release are presented on a like-for-like basis
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This press release contains forward-looking statements about Orange’s financial situation and results of operations. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. In particular, the consequences of the Covid-19 outbreak are uncertain; it could have an impact on the Group’s business and financial situation and may exacerbate the risks that the Group could face. More detailed information on the potential risks that could affect our financial results is included in the Registration Document filed on 20 April 2020 with the French Financial Markets Authority (AMF) and in the annual report (Form 20-F) filed on 21 April 2020 with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. Other than as required by law, Orange does not undertake any obligation to update them in light of new information or future developments.
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Orange is one of the world’s leading telecommunications operators with sales of 42 billion euros in 2019 and 143,000 employees worldwide at 30 June 2020, including 84,000 employees in France. The Group has a total customer base of 253 million customers worldwide at 30 June 2020, including 208 million mobile customers and 21million fixed broadband customers. The Group is present in 26 countries. Orange is also a leading provider of global IT and telecommunication services to multinational companies, under the brand Orange Business Services. In December 2019, the Group presented its new "Engage 2025" strategic plan, which, guided by social and environmental accountability, aims to reinvent its operator model. While accelerating in growth areas and placing data and AI at the heart of its innovation model, the Group will be an attractive and responsible employer, adapted to emerging professions.
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