Press release
Financial results at
Orange very resilient despite the effects of the Covid-19 pandemic
Revenues and EBITDAaL declined in the 2nd quarter of 2020, negatively impacted by the effects of the health crisis. In the 1st half overall, revenues continued to grow, with a very moderate decline in EBITDAaL.
Good commercial performance, deferred investments and cost control enable Orange to reiterate its objective of 2020 organic cash flow of more than
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 10,375 | (0.4)% | (0.1)% | 20,769 | 0.3 % | 1.0 % | ||
EBITDAaL | 3,312 | (1.8)% | (1.9)% | 5,914 | (0.8)% | (0.7)% | ||
Operating Income | 2,249 | (5.8)% | ||||||
Consolidated net income | 1,016 | (10.7)% | ||||||
eCAPEX (excluding licenses) | 1,576 | (15.8)% | (16.1)% | 3,156 | (9.9)% | (10.1)% | ||
EBITDAaL - eCAPEX | 1,737 | 15.7 % | 16.0 % | 2,759 | 12.2 % | 12.7 % | ||
Organic Cash-Flow (telecom activities) | 255 | 176.1 % |
§ In the 2nd quarter of 2020, revenues declined 0.4%1, negatively impacted by the decline in roaming and equipment sales directly linked to the health crisis.
- In the 2nd quarter, EBITDAaL showed a limited decline of 1.8% year on year, negatively impacted by the cost of health measures, the decrease in roaming and a slight increase in provisions for bad debts. In the first half EBITDAaL declined just 0.8%.
- At
June 30, 2020 , consolidated net income stood at1,016 million euros (compared with1,137 million euros atJune 30, 2019 , on an historical basis). - In the 1st half, the Group's eCAPEX declined 9.9% due to the significant increase in co-financing in
France and asset disposals, in particular the disposal of non-strategic towers inSpain . This decrease is also explained by a slowdown of investment in mobile and traditional services which offset growth in FTTH investments, particularly inFrance , which was lower than expected following the health crisis. - Organic cash flow from telecoms activities was
255 million euros , a 163 million euro increase year on year on an historical basis, due to the decline in eCAPEX and despite the measures taken to support the most vulnerable suppliers and service providers inFrance . - In the first half, Orange recorded a significant uptick in co-financing which had a favourable effect on turnover, EBITDAaL and eCAPEX. These co-financing initiatives illustrate our ability to monetize our FTTH investments made in recent years
These resilient results stem from the Group's strategy focused on greater connectivity and new growth areas, enabling us to increase our customer bases.
- Convergent offers totaled 10.8 million customers at
June 30, 2020 , up 2.1% year on year, allowing Orange to strengthen its position as the leading convergent operator inEurope . - In fiber, despite the lockdown, Orange posted a record 2nd quarter in
France with 238,000 net customer additions and strong growth inPoland with 44,000 net additions. AtJune 30 , Orange had 8.1 million fiber customers. - In Africa &
Middle East , 4G deployment continues reaching 27.9 million customers in the 2nd quarter, growth of 40.4% year on year. Orange Money had 19.6 million active customers in the 2nd quarter, up 18.9%. - As of
June 30, 2020 ,Orange Bank had a total of 1 million customers, following the integration of Orange Courtage and the expansion of its offer inSpain . In becoming an insurance broker, the bank took a further step in its cross-selling policy with Orange France.
In line with the "Engage 2025" plan, Orange signed a long-term electricity purchasing agreement with Boralex, a pioneer in renewable energy and the leading independent producer of onshore wind energy in
Outlook
For the financial year 2020, Orange confirms that it does not foresee any significant deviation with respect to its financial objectives:
- Given current information and currently anticipated trajectories, the Group now expects a slight decline in 2020 EBITDAaL of about 1% including all the effects linked to the Covid-19 pandemic. It should be noted that, excluding the Covid-19 impact, EBITDAaL would have been “flat positive” as expected.
- Given delays in investments to date, eCAPEX will be lower, offsetting the decline in EBITDAaL.
- Therefore, the Group's EBITDAaL less eCAPEX will be stable in 2020.
- The Group's commitment to exceed
2.3 billion euros in organic cash flow from telecoms activities remains unchanged. - The objective for a net debt to EBITDAaL ratio for telecoms activities of around 2x in the medium term is maintained.
For the 2021-2023 period, Orange confirms its financial objectives as announced during the investor day on
Orange will pay an interim dividend of
Commenting on the publication of the 1st half 2020 results,
"Orange has shown a remarkable level of resistance in the first half of the year, despite the effects of the Covid-19 pandemic, with a 0.3% increase in revenues and a contained decrease in EBITDAaL of 0.8%. These results bear witness to our business’ resilience and its capacity for collective mobilisation in the face of this crisis.
In
In
In Africa and in the
Even though Orange has proven to be more vital than ever to its business customers over these past months, the health crisis has impacted our results in B2B. I would, however, point to the very good performance of Orange Cyberdefense and Orange Cloud for Business where revenues grew by 11% and 8% in the first half.
This crisis has revealed the strategic nature of telecoms networks for our economies and even society as a whole. While impacted, we are comforted in the strategic choices we made with Engage 2025, the roll-out of which we will be accelerating, whether this be through mastering our carbon footprint, the deployment and optimisation of our infrastructures or the development of our growth territories.
I’d like to conclude by extending my warm thanks to all of Orange’s teams who have been fully mobilised throughout the crisis to serve our customers."
Key figures
Data at
In millions of euros | 6M 2020 | 6M 2019 comparable basis | 6M 2019 historical basis | change comparable basis | change historical basis | |
Revenues | 20,769 | 20,703 | 20,573 | 0.3 % | 1.0 % | |
9,024 | 8,880 | 8,874 | 1.6 % | 1.7 % | ||
2,503 | 2,624 | 2,624 | (4.6)% | (4.6)% | ||
2,729 | 2,774 | 2,789 | (1.6)% | (2.1)% | ||
Africa & | 2,845 | 2,742 | 2,737 | 3.8 % | 3.9 % | |
Enterprise | 3,859 | 3,908 | 3,770 | (1.3)% | 2.3 % | |
International Carriers & Shared Services | 728 | 746 | 747 | (2.4)% | (2.4)% | |
(920) | (971) | (968) | ||||
EBITDAaL (1) | 5,914 | 5,960 | 5,958 | (0.8)% | (0.7)% | |
o/w telecom activities | 5,986 | 6,037 | 6,035 | (0.9)% | (0.8)% | |
As % of revenues | 28.8 % | 29.2 % | 29.3 % | (0.3 pt) | (0.5 pt) | |
3,301 | 3,284 | 3,281 | 0.5 % | 0.6 % | ||
728 | 787 | 787 | (7.5)% | (7.5)% | ||
730 | 699 | 708 | 4.3 % | 3.0 % | ||
Africa & | 935 | 872 | 868 | 7.2 % | 7.7 % | |
Enterprise | 471 | 578 | 565 | (18.5)% | (16.7)% | |
International Carriers & Shared Services | (179) | (183) | (174) | 1.9 % | (2.9)% | |
o/w | (72) | (78) | (78) | 7.7 % | 7.7 % | |
Operating Income | 2,249 | 2,388 | (5.8)% | |||
o/w telecom activities | 2,336 | 2,475 | (5.6)% | |||
o/w | (87) | (88) | 0.9 % | |||
Consolidated net income | 1,016 | 1,137 | (10.7)% | |||
Net income attributable to equity owners of the Group | 927 | 1,039 | (10.7)% | |||
eCAPEX | 3,156 | 3,502 | 3,509 | (9.9)% | (10.1)% | |
o/w telecom activities | 3,142 | 3,486 | 3,493 | (9.9)% | (10.1)% | |
as % of revenues | 15.1 % | 16.8 % | 17.0 % | (1.7 pt) | (1.9 pt) | |
o/w | 14 | 16 | 16 | (14.5)% | (14.5)% | |
EBITDAaL - eCAPEX | 2,759 | 2,458 | 2,449 | 12.2 % | 12.7 % | |
Organic Cash-flow (telecoms activities) | 255 | 92 | 176.1 % |
(1) Adjustments to the presentation of EBITDAaL are described in Appendix 1.
In millions of euros | 2020 | 2019 | |
Net financial debt (1) | 26,420 | 25,466 | |
Ratio of financial debt / EBITDAaL from telecoms activities (2) | 2.04 | 1.96 |
(1) Net financial debt as defined and used by Orange does not include
(2) The ratio of net financial debt to EBITDAaL for telecoms activities is calculated as the ratio of the Group’s net financial debt (see Section 3.1.5.6 Net financial debt) to EBITDAaL for telecoms activities (see Section 3.1.5.2 EBITDAaL) calculated over the previous 12 months.
Key figures
Quarterly data
In millions of euros | 2Q 2020 | 2Q 2019 comparable basis | 2Q 2019 historical basis | change comparable basis | change historical basis | |
Revenues | 10,375 | 10,413 | 10,388 | (0.4)% | (0.1)% | |
4,593 | 4,470 | 4,467 | 2.7 % | 2.8 % | ||
1,216 | 1,306 | 1,306 | (6.8)% | (6.8)% | ||
1,329 | 1,378 | 1,400 | (3.6)% | (5.1)% | ||
Africa & | 1,401 | 1,382 | 1,388 | 1.3 % | 0.9 % | |
Enterprise | 1,925 | 1,990 | 1,940 | (3.3)% | (0.8)% | |
International Carriers & Shared Services | 355 | 375 | 376 | (5.4)% | (5.5)% | |
(443) | (488) | (488) | ||||
EBITDAaL (1) | 3,312 | 3,372 | 3,375 | (1.8)% | (1.9)% | |
o/w telecom activities | 3,350 | 3,405 | 3,408 | (1.6)% | (1.7)% | |
As % of revenues | 32.3 % | 32.7 % | 32.8 % | (0.4 pt) | (0.5 pt) | |
o/w | (38) | (34) | (34) | (12.6)% | (12.6)% | |
eCAPEX | 1,576 | 1,871 | 1,877 | (15.8)% | (16.1)% | |
o/w telecom activities | 1,567 | 1,862 | 1,869 | (15.8)% | (16.1)% | |
as % of revenues | 15.1 % | 17.9 % | 18.0 % | (2.8 pt) | (2.9 pt) | |
o/w | 8 | 8 | 8 | (1.4)% | (1.4)% | |
EBITDAaL - eCAPEX | 1,737 | 1,501 | 1,498 | 15.7 % | 16.0 % |
(1) Adjustments to the presentation of EBITDAaL are described in Appendix 1.
On
More detailed information on the Group's financial statements and performance indicators is available on the Orange website in the "Investors/Results and Presentations" section:
www.orange.com/en/Investors/Results-and-presentations
Comments on key Group figures
Revenues
At the Group level, the principal services posted the following 1st half performances on a comparable basis (all changes are year on year):
Revenues from convergence services in all of the Group's European countries were
Revenues from mobile only services were
Revenues from fixed only services (
Revenues from IT and integration services (
Revenues from carrier services (
Revenues from equipment sales fell 16.9% (
Customer base growth
The convergent customer base had 10.8 million customers across the Group as of
Mobile services had 208.0 million customers at
Fixed services had 45.1 million customers at
EBITDAaL
Group EBITDAaL was
EBITDAaL from telecoms activities was
Operating income
In the 1st half, the Group's operating income was
This decrease is explained mainly by the
Net income
At
eCAPEX
The Group's eCAPEX declined 9.9% in the 1st half and 15.8% in the 2nd quarter due to the increase in co-financing in
In spite of this decrease, the Group continues deploying fiber, in which it is the undisputed leader in
Organic cash flow
Organic cash flow from telecoms activities reached
Changes in asset portfolio
There was no significant change in the asset portfolio in the 2nd quarter of 2020.
Net financial debt
The Orange Group’s net financial debt totaled
The ratio of "net financial debt to EBITDAaL for telecoms activities" stood at 2.04x at
Dividends
Orange will make an interim dividend payment of
Review by operating segment
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 4,593 | 2.7 % | 2.8 % | 9,024 | 1.6 % | 1.7 % | ||
Retail services | 2,684 | 0.1 % | 0.1 % | 5,377 | 0.0 % | 0.0 % | ||
Convergence | 1,131 | 4.1 % | 4.7 % | 2,268 | 4.7 % | 5.3 % | ||
Mobile only | 559 | (3.1)% | (4.0)% | 1,124 | (2.9)% | (3.8)% | ||
Fixed only | 995 | (2.5)% | (2.5)% | 1,986 | (3.3)% | (3.3)% | ||
Wholesale | 1,535 | 11.7 % | 11.9 % | 2,871 | 7.2 % | 7.5 % | ||
Equipment sales | 206 | (26.7)% | (26.7)% | 458 | (20.8)% | (20.8)% | ||
Other revenues | 167 | 27.0 % | 26.5 % | 318 | 28.1 % | 27.6 % | ||
EBITDAaL | 3,301 | 0.5 % | 0.6 % | |||||
EBITDAaL / Revenues | 36.6 % | (0.4 pt) | (0.4 pt) | |||||
Operating Income | 1,557 | - | (5.6)% | |||||
eCAPEX | 1,635 | (12.2)% | (12.2)% | |||||
eCAPEX / Revenues | 18.1 % | (2.9 pt) | (2.9 pt) |
In
Revenues in
Revenues from retail services grew 0.1% in the 2nd quarter, an improved trend compared to the 1st quarter, when it was stable. Excluding STN, retail services grew 1.9% year on year.
In the 2nd quarter, convergent revenue grew 4.1%, thanks in particular to the profusion and new pricing of offers. Mobile only revenues were down 3.1%, impacted by migrations towards convergence. Fixed only revenues dropped 2.5%, impacted by the continued decline of narrowband services (-12.0%).
Wholesale revenues grew 11.7% in the 2nd quarter, an acceleration compared to the 2.6% growth in the 1st quarter. This growth was driven by co-financing received in Less-Populated Areas and by the construction of PINs, which more than offset the decline in roaming and unbundling.
Revenue from equipment sales declined 26.7% year on year, very heavily impacted by the closure of all stores in
Other revenues growth of 27% year on year was driven by continuation of the built-to-suit program, which will enable Orange to undertake the accelerated deployment of its mobile network and increase the density of its coverage in rural areas and on transportation routes while still retaining the investment power needed to consolidate its leadership across the entire network.
In terms of ARPO, convergent ARPO grew
In terms of sales performance in the 2nd quarter, mobile contracts showed solid resilience with 29,000 net additions (after -58,000 net adds in the 1st quarter of 2020), in a market that remains very competitive and was impacted by the closure of shops during the lockdown.
Fixed broadband recorded 61,000 net adds in the 2nd quarter, compared to 41,000 net adds in the 2nd quarter of 2019. This performance was driven by an excellent quarter for fiber with 238,000 net adds despite the lockdown. This was a record high for a 2nd quarter and a real commercial success since 51% of these sales were to new customers. Orange continued fiber deployment at a faster pace in the 2nd quarter with a total of 19.3 million households connected and 3.8 million fiber customers at the end of June.
The broadband convergent retail customer base grew 1.1% year on year with 1.67 mobile lines per convergent offer, up 1.3% year on year.
EBITDAaL grew slightly in the 1st half (+0.5%) The FTTH co-financing received, as well as our cost-saving efforts, offset the effects of the crisis (loss of roaming revenue, health costs, etc.) as well as the sharp decline in traditional services, such as national roaming.
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 1,216 | (6.8)% | (6.8)% | 2,503 | (4.6)% | (4.6)% | ||
Retail services | 869 | (7.2)% | (7.2)% | 1,779 | (5.8)% | (5.8)% | ||
Convergence | 502 | (3.1)% | (3.1)% | 1,020 | (2.8)% | (2.8)% | ||
Mobile only | 250 | (13.1)% | (13.1)% | 517 | (11.5)% | (11.5)% | ||
Fixed only | 114 | (10.8)% | (10.8)% | 238 | (6.1)% | (6.1)% | ||
IT & Integration services | 2 | 64.4 % | 64.4 % | 4 | 56.3 % | 56.3 % | ||
Wholesale | 229 | 10.4 % | 10.4 % | 449 | 7.6 % | 7.6 % | ||
Equipment sales | 118 | (27.2)% | (27.2)% | 263 | (17.0)% | (17.0)% | ||
Other revenues | 0 | - | - | 12 | - | - | ||
EBITDAaL | 728 | (7.5)% | (7.5)% | |||||
EBITDAaL / Revenues | 29.1 % | (0.9 pt) | (0.9 pt) | |||||
Operating Income | 228 | - | (10.3)% | |||||
eCAPEX | 392 | (25.9)% | (25.9)% | |||||
eCAPEX / Revenues | 15.7 % | (4.5 pt) | (4.5 pt) |
Financial performance in
Orange
Convergent revenues fell 3.1% in the 2nd quarter, with mobile only revenues down 13.1% and fixed only revenues down 10.8%. Revenues from IT and Integration services jumped 64.4%, fueled by the enterprise market, but remain low in volume terms.
Revenues from wholesale services rose 10.4% in the 2nd quarter, despite the sharp decline in visitor roaming, driven by the increase in international traffic, while revenues from equipment sales fell 27.2%, impacted by the almost-total shutdown of sales activity during the lockdown.
On the commercial front, in response to a market polarization accentuated by the health crisis, Orange has implemented a strategy aimed at protecting value at the high end of the market while increasing volumes at the low end. This strategy is bearing fruit and enabled an increase in convergent ARPO for the two main brands, Orange and
EBITDAaL declined 7.5% in the 1st half, absorbing part of the lost revenue through continued efforts on indirect cost and direct cost savings, mainly related to the slowdown in sales activity during the health crisis.
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 1,329 | (3.6)% | (5.1)% | 2,729 | (1.6)% | (2.1)% | ||
Retail services | 896 | 1.6 % | 0.4 % | 1,817 | 2.9 % | 2.7 % | ||
Convergence | 180 | 22.5 % | 18.9 % | 357 | 23.9 % | 21.8 % | ||
Mobile only | 494 | (6.7)% | (7.9)% | 1,008 | (4.7)% | (5.3)% | ||
Fixed only | 152 | (2.5)% | (6.0)% | 308 | (3.9)% | (5.6)% | ||
IT & Integration services | 71 | 39.3 % | 61.0 % | 143 | 45.0 % | 71.4 % | ||
Wholesale | 246 | (6.9)% | (9.1)% | 506 | (3.2)% | (4.5)% | ||
Equipment sales | 162 | (16.6)% | (18.3)% | 348 | (12.3)% | (13.3)% | ||
Other revenues | 25 | (34.2)% | (35.8)% | 58 | (34.2)% | (34.7)% | ||
EBITDAaL | 730 | 4.3 % | 3.0 % | |||||
EBITDAaL / Revenues | 26.7 % | 1.5 pt | 1.3 pt | |||||
Operating Income | 173 | - | 1.9 % | |||||
eCAPEX | 369 | (8.2)% | (9.5)% | |||||
eCAPEX / Revenues | 13.5 % | (1.0 pt) | (1.1 pt) |
Convergence and IT supported the solid momentum in retail services. EBITDAaL grew thanks to transformation initiatives.
Revenue from
Within retail services, convergent revenues maintained solid growth of 22.5%, confirming the momentum of this market where Orange is the leader in
Wholesale revenues declined 6.9% in the 2nd quarter after a 0.6% increase in the previous quarter. This slowdown was due to reductions in mobile call termination rates, the end of national roaming contracts, lower SMS usage, particularly in
At the European country level,
EBITDAaL in the 1st half grew 4.3% (
Africa &
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 1,401 | 1.3 % | 0.9 % | 2,845 | 3.8 % | 3.9 % | ||
Retail services | 1,210 | 4.7 % | 4.0 % | 2,444 | 6.8 % | 6.8 % | ||
Mobile only | 1,070 | 3.9 % | 3.1 % | 2,164 | 6.1 % | 5.9 % | ||
Fixed only | 137 | 10.8 % | 11.0 % | 270 | 11.4 % | 12.2 % | ||
IT & Integration services | 4 | 49.1 % | 48.2 % | 11 | 73.3 % | 73.1 % | ||
Wholesale | 161 | (16.0)% | (16.7)% | 342 | (12.7)% | (12.5)% | ||
Equipment sales | 20 | (18.3)% | (17.3)% | 40 | (13.1)% | (11.0)% | ||
Other revenues | 9 | (8.7)% | 28.6 % | 19 | 13.5 % | 52.6 % | ||
EBITDAaL | 935 | 7.2 % | 7.7 % | |||||
EBITDAaL / Revenues | 32.9 % | 1.1 pt | 1.2 pt | |||||
Operating Income | 456 | - | 4.7 % | |||||
eCAPEX | 449 | 6.8 % | 7.4 % | |||||
eCAPEX / Revenues | 15.8 % | 0.4 pt | 0.5 pt |
Good resilience in
Africa &
Mobile only revenues grew 3.9% in the 2nd quarter with the 4G customer base reaching 27.9 million, a 40.4% increase over 12 months. This growth is supported in particular by data with revenue up 26.5% in the 2nd quarter. The composition of the mobile customer base continued to improve with a contract base share up 2 points and a churn rate on prepaid services down 0.3%.
Fixed only revenues rose 10.8% in the 2nd quarter, a decline compared to the 12.0% increase in the previous quarter. The number of fixed broadband customers grew 31% year on year, reaching 1.4 million customers, confirming its role as a growth driver with fixed broadband revenue up 32.9% in the 2nd quarter.
Revenues from wholesale services were down 16.0% in the 2nd quarter, impacted in particular by the decline in international transit business and visitor roaming. Revenues from equipment sales also fell, down 18.3% due to a market slowdown and of course the health crisis that caused the closure of many shops.
Orange Money revenues were up 12.5% in the 2nd quarter, compared with a 22.3% rise in the 1st quarter, adversely impacted by both the lockdown and free transactions recommended by the
Across the countries of Africa &
In the 2nd quarter, 10 countries in the region grew, including 5 that posted double-digit revenue growth. Among the countries contributing most to total revenues in
EBITDAaL in
Enterprise
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 1,925 | (3.3)% | (0.8)% | 3,859 | (1.3)% | 2.3 % | ||
Fixed only | 984 | (1.0)% | (0.9)% | 1,958 | (1.4)% | (1.0)% | ||
Voice | 326 | 1.0 % | 1.0 % | 632 | (2.8)% | (2.6)% | ||
Data | 658 | (2.0)% | (1.8)% | 1,326 | (0.7)% | (0.3)% | ||
IT & Integration services | 738 | (2.6)% | 4.1 % | 1,475 | 1.9 % | 12.0 % | ||
Mobile * | 203 | (14.8)% | (14.8)% | 426 | (10.3)% | (10.3)% | ||
Mobile only | 162 | (13.4)% | (13.3)% | 327 | (11.0)% | (11.0)% | ||
Wholesale | 11 | 43.9 % | 43.9 % | 21 | 20.1 % | 20.1 % | ||
Equipment sales | 30 | (31.7)% | (31.7)% | 77 | (13.3)% | (13.3)% | ||
EBITDAaL | 471 | (18.5)% | (16.7)% | |||||
EBITDAaL / Revenues | 12.2 % | (2.6 pt) | (2.8 pt) | |||||
Operating Income | 267 | - | (25.8)% | |||||
eCAPEX | 174 | (13.0)% | (11.9)% | |||||
eCAPEX / Revenues | 4.5 % | (0.6 pt) | (0.7 pt) |
A decrease in revenues after six consecutive quarterly increases due to the impact of the health crisis on business activity and project roll-outs.
In the 2nd quarter, revenue in the Enterprise segment fell 3.3% after six consecutive quarterly increases. Orange's B2B services have played a critical role in enabling businesses to remain operational during the health crisis; nevertheless the decline in business activity and delays in project roll-outs by enterprise customers impacted revenues.
Revenues from IT and integration services recorded the first decline in its history (-2.6%) in the 2nd quarter, while remaining up over the half year (+1.9%). The 2nd quarter decline stemmed from the effect of the health crisis, which was unable to be offset by the good performance in the 1st half of cloud and cybersecurity services, up 8% and 11% respectively, demonstrating their importance, particularly in times of crisis. As of
Data revenues decreased 2.0% in the 2nd quarter, impacted in particular by
Enterprise EBITDAaL declined 18.5% in the 1st half with two-thirds of this decrease due to the impact of the health crisis, in particular on roaming and data. A transformation plan is currently being implemented and a return to EBITDAaL growth is not expected before the end of 2021.
* Mobile revenues include mobile services and mobile equipment sales invoiced to businesses and incoming mobile traffic from businesses invoiced to other carriers.
International Carriers & Shared Services
In millions of euros | 2Q 2020 | change comparable basis | change historical basis | 6M 2020 | change comparable basis | change historical basis | ||
Revenues | 355 | (5.4)% | (5.5)% | 728 | (2.4)% | (2.4)% | ||
Wholesale | 259 | (3.8)% | (3.7)% | 530 | (2.4)% | (2.3)% | ||
Other revenues | 96 | (10.4)% | (11.0)% | 199 | (2.4)% | (2.9)% | ||
EBITDAaL | (179) | 1.9 % | (2.9)% | |||||
EBITDAaL / Revenues | (24.6)% | (0.1 pt) | (1.3 pt) | |||||
Operating Income | (345) | - | 12.3 % | |||||
eCAPEX | 123 | 68.9 % | 55.7 % | |||||
eCAPEX / Revenues | 16.9 % | 7.2 pt | 6.3 pt |
Revenues from International Carriers and Shared Services declined 5.4% in the 2nd quarter after an increase of 0.7% in the 1st quarter.
Services to international carriers were severely impacted by the Covid-19 pandemic due to the halt in international travel and trips and the reduction of flows on voice Corridors. Other revenues were also impacted by the closure of movie theaters during the lockdown and by the decline in Orange Marine's installation activities, which were also slowed by the health crisis.
In millions of euros | 6M 2020 | change comparable basis | change historical basis | |||||
Net Banking Income (NBI) | 34 | 119.0 % | 119.0 % | |||||
Cost of bank credit risk | (11) | 180.5 % | 180.5 % | |||||
Operating Income | (87) | - | 0.9 % | |||||
eCAPEX | 14 | (14.5)% | (14.5)% |
In the 1st half of 2020, the Net Banking Income (NBI) of
Operating income grew by
In
As of
Schedule of upcoming events
Contacts
press: +33 1 44 44 93 93 jeanbernard.orsoni@orange.com tom.wright@orange.com olivier.emberger@orange.com | financial communication: +33 1 44 44 04 32 (analysts and investors) p.lambert@orange.com isabelle.casado@orange.com samuel.castelo@orange.com didier.kohn@orange.com Aurélia Roussel aurelia.roussel@orange.com Andrei Dragolici andrei.dragolici@orange.com |
Disclaimer
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 and the health crisis may exacerbate the risks that the Group faces. More detailed information on the potential risks that could affect our financial results is included in the Registration Document filed on
Appendix 1: adjusted data to income statement items
In the 2nd quarter:
2Q 2020 | 2Q 2019 historical basis | |||||||
In millions of euros | Adjusted data, | Presentation adjustments, | Income statement, | Adjusted data, | Presentation adjustments, | Income statement, | ||
Revenues | 10,375 | - | 10,375 | 10,388 | - | 10,388 | ||
External purchases | (4,174) | - | (4,174) | (4,289) | - | (4,289) | ||
Other operating income | 135 | - | 135 | 197 | - | 197 | ||
Other operating expense | (188) | (172) | (361) | (93) | (2) | (95) | ||
Labor expenses | (2,147) | (14) | (2,161) | (2,162) | (28) | (2,190) | ||
Operating taxes and levies | (317) | - | (317) | (320) | - | (320) | ||
Gains (losses) on disposal of fixed assets, investments and activities | - | 2 | 2 | - | 21 | 21 | ||
Restructuring costs | - | (7) | (7) | - | (40) | (40) | ||
Depreciation and amortization of financed assets | (12) | - | (12) | (3) | - | (3) | ||
Depreciation and amortization of right-of-use assets | (330) | - | (330) | (312) | - | (312) | ||
Impairment of right-of-use assets | - | (6) | (6) | 1 | (24) | (24) | ||
Interests expenses on liabilities related to financed assets | (0) | 0 | - | (0) | 0 | - | ||
Interests expenses on lease liabilities | (28) | 28 | - | (32) | 32 | - | ||
EBITDAaL | 3,312 | (168) | - | 3,375 | (41) | - | ||
Significant litigation | (169) | 169 | - | - | - | - | ||
Specific labor expenses | (11) | 11 | - | (26) | 26 | - | ||
Fixed assets, investments and business portfolio review | 2 | (2) | - | 21 | (21) | - | ||
Restructuring program costs | (13) | 13 | - | (64) | 64 | - | ||
Acquisition and integration costs | (6) | 6 | - | (4) | 4 | - | ||
Interests expenses on liabilities related to financed assets | - | (0) | (0) | - | (0) | (0) | ||
Interests expenses on lease liabilities | - | (28) | (28) | - | (32) | (32) |
Half-year data:
6M 2020 | 6M 2019 historical basis | |||||||
In millions of euros | Adjusted data, | Presentation adjustments, | Income statement, | Adjusted data, | Presentation adjustments, | Income statement, | ||
Revenues | 20,769 | - | 20,769 | 20,573 | - | 20,573 | ||
External purchases | (8,557) | - | (8,557) | (8,563) | - | (8,563) | ||
Other operating income | 271 | - | 271 | 341 | - | 341 | ||
Other operating expense | (274) | (174) | (448) | (194) | (7) | (201) | ||
Labor expenses | (4,342) | (33) | (4,376) | (4,320) | (114) | (4,434) | ||
Operating taxes and levies | (1,232) | - | (1,232) | (1,207) | - | (1,207) | ||
Gains (losses) on disposal of fixed assets, investments and activities | - | 59 | 59 | - | 68 | 68 | ||
Restructuring costs | - | (13) | (13) | - | (52) | (52) | ||
Depreciation and amortization of financed assets | (22) | - | (22) | (3) | - | (3) | ||
Depreciation and amortization of right-of-use assets | (642) | - | (642) | (609) | - | (609) | ||
Impairment of right-of-use assets | - | (6) | (6) | (0) | (24) | (24) | ||
Interests expenses on liabilities related to financed assets | (1) | 1 | - | (0) | 0 | - | ||
Interests expenses on lease liabilities | (56) | 56 | - | (60) | 60 | - | ||
EBITDAaL | 5,914 | (111) | - | 5,958 | (68) | - | ||
Significant litigation | (169) | 169 | - | (65) | 65 | - | ||
Specific labor expenses | (28) | 28 | - | (46) | 46 | - | ||
Fixed assets, investments and business portfolio review | 59 | (59) | - | 68 | (68) | - | ||
Restructuring program costs | (19) | 19 | - | (75) | 75 | - | ||
Acquisition and integration costs | (10) | 10 | - | (10) | 10 | - | ||
Interests expenses on liabilities related to financed assets | - | (1) | (1) | - | (0) | (0) | ||
Interests expenses on lease liabilities | - | (56) | (56) | - | (60) | (60) |
Appendix 2: key performance indicators
In thousand, at the end of the period | 2020 | 2019 | |||||
Number of convergent customers | 10,814 | 10,588 | |||||
Number of mobile accesses (excluding MVNOs) (1) | 207,956 | 204,155 | |||||
o/w | Mobile accesses of convergent customers | 19,233 | 18,654 | ||||
Mobile only accesses | 188,722 | 185,501 | |||||
o/w | Contract customers | 75,094 | 72,730 | ||||
Prepaid customers | 132,862 | 131,425 | |||||
Number of fixed accesses (2) | 45,120 | 46,025 | |||||
Number of fixed retail accesses | 29,322 | 29,892 | |||||
Number of fixed broadband accesses | 20,971 | 20,353 | |||||
o/w | Accesses with very high-speed broadband | 8,421 | 7,028 | ||||
Accesses of convergent customers | 10,814 | 10,588 | |||||
Fixed only accesses | 10,158 | 9,765 | |||||
Number of fixed narrowband accesses | 8,351 | 9,539 | |||||
Number of fixed wholesale accesses | 15,797 | 16,132 | |||||
Group total accesses (1+2) | 253,076 | 250,180 |
2019 data is on a comparable basis.
The key indicators by country are shown on the
www.orange.com/en/Investors/Results-and-presentations/Folder/All-consolidated-results
Appendix 3: glossary
Key figures
Data on a comparable basis: data based on comparable accounting principles, scope of consolidation and exchange rates are presented for previous periods. The transition from data on an historical basis to data on a comparable basis consists of keeping the results for the period ended and then restating the results for the corresponding period of the preceding year for the purpose of presenting, over comparable periods, financial data with comparable accounting principles, scope of consolidation and exchange rate. The method used is to apply to the data of the corresponding period of the preceding year, the accounting principles and scope of consolidation for the period just ended as well as the average exchange rate used for the income statement for the period ended. Changes in data on a comparable basis reflect organic business changes. Data on a comparable basis is not a financial aggregate as defined by IFRS and may not be comparable to similarly-named indicators used by other companies.
EBITDAaL or “EBITDA after Leases”: operating income (i) before depreciation and amortization of fixed assets, effects resulting from business combinations, reclassification of cumulative translation adjustment from liquidated entities, impairment of goodwill and fixed assets, share of profits (losses) of associates and joint ventures, (ii) after interest on debts related to financed assets and on lease liabilities, and (iii) adjusted for significant litigation, specific labor expenses, fixed assets, investments and businesses portfolio review, restructuring programs costs, acquisition and integration costs and, where appropriate, other specific elements. EBITDAaL is not a financial aggregate as defined by IFRS standards and may not be directly comparable to similarly-named indicators in other companies.
eCAPEX or “economic CAPEX”: (i) acquisitions of property, plant and equipment and intangible assets, excluding telecommunications licenses and financed assets, (ii) less the price of disposal of property, plant and equipment and intangible assets. eCAPEX is not a financial performance indicator as defined by IFRS standards and may not be directly comparable to indicators referenced by similarly-named indicators in other companies.
Organic Cash Flow (telecoms activities): for the perimeter of the telecoms activities, this corresponds to the net cash provided by operating activities, minus (i) lease liabilities repayments and debts related to financed assets repayments, and (ii) purchases and sales of property, plant and equipment and intangible assets, net of the change in the fixed assets payables, (iii) excluding effect of telecommunication licenses paid and significant litigations paid or received. Organic Cash Flow (telecoms activities) is not a financial aggregate defined by IFRS and may not be comparable to similarly-named indicators used by other companies.
Convergence
The customer base and the revenues invoiced to convergence services customers (excluding equipment sales) was for convergent offers defined as the combination of, at a minimum, a fixed broadband access and a mobile contract subscribed by retail market customers.
Convergent ARPO: the average quarterly revenues per convergent offer (ARPO) is calculated by dividing revenues from retail convergent services offers invoiced to customers generated over the past three months (excluding IFRS 15 adjustments) by the weighted average number of retail convergent offers over the same period. ARPO is expressed by monthly revenues per convergent offer.
Performance indicators
The fixed retail accesses correspond to the number of fixed broadband accesses (xDSL (ADSL and VDSL), FTTx, cable, Fixed-4G (fLTE) and other broadband accesses (satellite, Wimax and others)) and fixed narrowband accesses (mainly PSTN) and payphones.
The fixed wholesale accesses correspond to the number of fixed broadband and narrowband wholesale accesses operated by Orange.
Mobile only services
Revenues from Mobile only services consists of revenues invoiced to customers of mobile offers excluding retail convergence and equipment sales. The customer base includes customers with a contract excluding retail convergence, machine-to-machine contracts and prepaid cards.
Mobile only ARPO: the average quarterly revenues from Mobile only (ARPO) is calculated by dividing the revenue from Mobile only services (excluding machine-to-machine and IFRS 15 adjustments) generated over the past three months by the weighted average of Mobile only customers (excluding machine-to-machine) over the same period. The ARPO is expressed as monthly revenues per Mobile only customer.
Fixed only services
Revenues from Fixed only services include the revenue of fixed services excluding retail convergence and equipment sales: traditional fixed-line telephony, fixed broadband and enterprise solutions and networks2. The customer base consists of fixed-line telephony and fixed broadband customers, excluding retail convergence customers.
Fixed only Broadband ARPO: the average quarterly revenues from Fixed only Broadband (ARPO) is calculated by dividing the revenue from Fixed only Broadband services (excluding IFRS 15 adjustments) generated over the past three months by the weighted average of Fixed only Broadband customers over the same period. ARPO is expressed as monthly revenues per Fixed only Broadband customer.
IT & integration services
Revenues from IT and integration services include revenue from unified communication and collaboration services (Local Area Network and telephony, consulting, integration, project management and video conferencing offers), hosting and infrastructure services (including cloud computing), application services (customer relations management and other application services), security services, machine-to-machine services (excluding connectivity), as well as equipment sales for the products and services above.
Wholesale
Revenues from other carriers consists of (i) mobile services to other carriers including incoming traffic, visitor roaming, network sharing, national roaming and Mobile Virtual Network Operators (MVNOs), and (ii) fixed services to other carriers including national networking, services to international carriers, high-speed and very high-speed broadband access (fibre access, unbundling of telephone lines and xDSL access sales) and the sale of telephone lines on the wholesale market.
1 Unless otherwise stated, changes are on a comparable basis.
2
Attachment
- PR_Orange_S12020_EN_300720
© OMX, source