25 July 2019

Financial results at 30 June 2019

Revenues return to growth, EBITDAaL continues to increase.

France stabilises its revenues, Africa & Middle East continues to grow strongly.2019 objectives are confirmed.

Financial results at 30 June 2019

  • In the 2nd quarter of 2019, revenues returned to growth, rising 0.5% year on year on a comparable basis. Restated for the impact of the promotional period for ePresse and audiobook offers in 2018, it would have grown 0.7% despite a very competitive environment on the Group's main markets (France and Spain).
    This increase was driven by the powerful engine of Africa & Middle East, which rose 5.8%, and by the resilience of France, where revenues stabilised, growing 0.4%, excluding the impact of the ePresse and audiobook offers. Affected by a highly promotional market, Spain fell slightly, declining 1.6%. The other segments contributed to the revenue growth: Europe rose 1.2% thanks to convergence and Enterprise posted its third consecutive quarter of growth, rising 0.7%.
  • EBITDAaL continued to grow during the 2nd quarter, rising 0.9%. In the 1st half of 2019, EBITDAaL grew 0.8% year on year despite the impact of ePresse and audiobook offers. Restated for this impact, growth in EBITDAaL would have been 2.0%. The EBITDAaL margin from telecoms activities improved by 0.3 percentage points in the 1st half.
  • Consolidated net income rose 29.4% to €1,137 million.
  • In the 1st half, eCapex grew 5.5%, to €3.5 billion, tied to the acceleration in the FTTH rollout in France. In line with the objectives, eCapex for 2019 will be slightly lower compared to 2018, excluding the impact of the new network sharing agreement in Spain.
  • In the 2nd quarter, France had 61,000 net mobile contract sales and 41,000 for fixed in a promotional environment that continues to be intense. The ongoing success of Fibre was demonstrated by the 160,000 net sales, a record for a 2nd quarter.
  • Spain had 38,000 net mobile contract sales (1) in the 2nd quarter, following the modification of our commercial strategy in a market that is still highly competitive.
  • In Europe, growth in mobile contract and fixed broadband accelerated, driven by the continued success of the Love convergent offers.
  • In Africa & Middle East, the rollout of 4G continued, making it possible to have attained nearly 20 million customers by the end of the 2nd quarter, a 54.4% increase year on year.

Outlook for 2019

Based on the 1st half 2019 results, and excluding the effects of the new network-sharing contract in Spain, Orange is re-affirming its objectives for 2019:

  • EBITDAaL growth in 2019 will be lower than that achieved in 2018 on a comparable basis.
  • 2019 eCAPEX will be slightly down compared to 2018 on a comparable basis.
  • Operating Cash Flow (EBITDAaL – eCAPEX) in 2019 will be higher than in 2018 on a comparable basis.
  • the target ratio of net debt to EBITDAaL for telecoms activities will be maintained at around 2x in the medium term.

Commenting on the publication of the 1st half results, Stéphane Richard, Chairman and CEO of Orange Group, said: "Although there continues to be strong competition in our key markets, the second-quarter results meant the Group delivered a good performance for the first half with revenues increasing 0.2% and growth in EBITDAaL sustained at 0.8%.
It is clear that our strategy in very high-speed broadband remains effective. On fixed services, the acceleration of our fibre deployments in Europe was accompanied by a continually strong commercial performance, which enabled us to attain the level of nearly 7 million fibre customers.
In mobile, Orange now has 62 million 4G customers, including nearly 20 million in Africa and the Middle East, and we are getting ready for the arrival of 5G with numerous tests being carried out with the initial mobile devices, in preparation for commercial launches next year. In addition, the RAN-sharing agreements in Spain and Belgium formalised in recent months show we are committed to the long-term optimisation of our networks.
I would like to highlight the very good performance of our operations in Africa and the Middle East which are, more than ever, an important growth driver for Orange.
This first half also marked a new milestone in our multi-service operator strategy with the acquisition of SecureData and SecureLink in the cyberdefence market, where we have the ambition to become the leader in Europe. Our cyberdefence offer is now available in 12 countries, and already has 3,700 customers and full-year revenues of €600 million.

1- Excluding machine to machine

I would like to extend my sincere thanks to all the Orange teams, who work every day to ensure the satisfaction of our customers and the success of the Group."

Orange SA's Board of Directors met on 24 July 2019 and reviewed the interim consolidated financial statements at 30 June 2019, which were prepared under its responsibility. The interim consolidated financial statements at 30 June 2019 are posted on Orange's website in the "Investors / Results and presentations" section. More detailed information on the Group's financial statements and performance indicators is also available on Orange's website in the same section: www.orange.com
In accordance with auditing standards, the statutory auditors performed a limited review of the interim consolidated financial statements and verified the information presented in the interim management report.

The entire press release is available on PDF file

25/07/2019 16:56 CEST