Continued growth in revenue and EBITDAaL.
Solid commercial performance in France, continued strong growth in Africa & Middle East, increased revenues from the Europe and Enterprise segments.
- Orange Group revenues rose 0.8% year on year on a comparable basis in the third quarter of 2019, continuing its progression during the year.
- This increase was driven by the continuation of very strong growth in Africa & Middle East, up 7.6%, the solid performance in Europe, up 1.4% supported by convergence, and by Enterprise, which produced a fourth consecutive quarter of growth, rising 1.8%. Taken together, this more than offset a slight erosion in France of -0.4% (which would have registered growth of 0.2% were it not for the impact of ePresse and audiobook offers), and a more pronounced decline in Spain of -2.5%, due to a general market move towards the middle and low segments.
- Group EBITDAaL rose 0.2% on a comparable basis over the quarter, and 0.6% over nine months. Restated for the impact of ePresse and audiobook offers, EBITDAaL growth over the nine months was 1.7%. The EBITDAaL margin on telecoms activities improved by 0.1 percentage points over the nine months.
- eCAPEX grew 4.0% on a comparable basis over the first nine months of the year, reflecting the acceleration in FTTH deployment in France, which now has 14.6 million connectable lines, an increase of 34% year on year. In line with objectives, eCapex for 2019 will be slightly lower compared to 2018, excluding the impact of the network sharing agreement in Spain.
- In the third quarter, France posted 90,000 net mobile contract additions and 65,000 in fixed broadband. Convergence remains a strong route to customer acquisition: 83.5% of new convergent customers are either new fixed or new mobile customers. The ongoing success of Fibre was demonstrated by the 178,000 net additions, a record for a 3rd quarter.
- Spain achieved 12,000 net mobile contract additions, excluding M2M, and improved the trend in fixed compared to the second quarter thanks to new football offers, resulting from the adaptation of our commercial strategy to this evolving market.
- In Europe, the percentage of very high-speed fixed broadband customers now taking convergent services rose by 7 percentage points over one year to 55%.
- In Africa & Middle East, the deployment of 4G continued, with a total of over 22 million customers secured by the end of the 3rd quarter, a 49% increase year on year.
Outlook for 2019
Orange confirms its objectives for 2019 (excluding the effects of the network-sharing contract with Vodafone in Spain, signed in April):
- 2019 EBITDAaL growth will be slower 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 2019 third quarter results, Stéphane Richard, Chairman and CEO of the Orange Group, said:
“The Group has confirmed its growth momentum during this third quarter, with revenues up 0.8% and EBITDAaL improving 0.2% thanks to our excellent performance in Africa & Middle East and the resilience of the Enterprise market. While competitive pressures are on the increase in Spain, in France they have somewhat abated and revenue would have increased had it not been for the impact of ePresse and audiobook offers.
These results further attest to the relevance of our very high-speed broadband network strategy. In fixed, the strong commercial momentum achieved in fibre, supported by our investments, is clear: we reached more than 7 million fibre customers in Europe this quarter, an increase of 25% compared to last year. This can be seen in France in particular where we achieved 178,000 net additions, a record figure for a third quarter. The launch of the Livebox 5 at the beginning of October should also maintain this momentum.
In mobile, Orange now has 65.3 million 4G customers, 22 million of whom are in Africa & Middle East. In France we’re proud to have been named best network by Arcep for the 9th consecutive year. We have also undertaken a number of 5G tests this year in Europe, which gives us confidence in our plans for an imminent launch in Romania and in other European countries throughout next year.
These results lead us to confirm all our objectives for 2019. Orange also extends an invitation to all of its stakeholders to join the presentation on 4 December of its new strategic plan up to 2025.
Finally I would like to extend my warm thanks to all the Group’s teams who work ceaselessly to deliver Orange’s success.”
The entire press release is available on PDF file