press release
Paris, 25 July 2013
First-half 2013 results
Commercial initiatives, strengthened in the second quarter, helped revive mobile customer base growth in France, Poland and Spain
Orange confirms its operating cash flow objective of more than 7 billion euros for 2013, thanks in particular to the results of its cost control plan
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Orange had 231.5 million customers at 30 June 2013, a year-on-year increase of 3.1% (+6.9 million net additions):
- in France, net mobile contract sales[1]were at their highest level since the arrival of the fourth mobile operator, with the Sosh and Open offers particularly dynamic. The mobile customer base in France grew 1.5% year on year
-
in Spain, the success of the segmented and quadruple-play offers supported the growth in mobile contract customers (+9.8%), and the fixed broadband customer base which rose 14.2%
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Africa and the Middle East had 84.0 million mobile customers at 30 June 2013, up 9.8% (+7.5 million net additions)
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Consolidated revenues were 20.603 billion euros, down 4.5% on a comparable basis. Excluding the impact of regulatory measures, revenues declined 2.2%:
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in France, revenues from mobile services fell 4.5% in the first half. Mobile ARPU stabilised in the second quarter compared to the first quarter, in line with the forecast for the year of -12%
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in Spain, first-half revenues rose 3.9%, led by the growth of the customer base
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in Poland, the decline in mobile services was limited to -2.8% in the first half while fixed broadband rose 8.1%
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in the rest of Europe, revenues rose 0.6%
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in Africa and the Middle East, revenues grew 4.0% over the first half, led by Côte d'Ivoire, Senegal, Egypt and Guinea
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Enterprise: revenues fell 4.9% in the first half in a difficult European economic context and with intensified competition
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Restated EBITDA was 6.417 billion euros. The EBITDA margin (31.1%) decline was limited to 1.0 percentage points, after falling 1.6 percentage points in the first and second halves of 2012 (on a comparable basis), thanks to a reduction in costs of 441 million euros: direct costs fell 5.8% and indirect costs fell 1.4%.
Orange France had an EBITDA margin of 36.3%, relatively stable compared to the first half of 2012, and contributed almost all of the cost reductions of the Group -
CAPEX (2.455 billion euros) rose 0.9% on a comparable basis, led by CAPEX on 4G mobile and fibre, notably in France. The ratio of CAPEX to revenues was 11.9%, an increase of 0.6 percentage points compared with the first half of 2012
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First-half net income was 1.209 billion euros, compared to 1.909 billion euros in the first half of 2012
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Operating cash flow (restated EBITDA less CAPEX) was 3.962 billion euros, representing 57% of the 2013 full-year target
- Net debt was 29.610 billion euros at 30 June 2013, a reduction of 935 million euros compared to 31 December 2012. The restated ratio of net debt to EBITDA was 2.21. Net debt at 30 June 2013 does not include the impact of the fiscal dispute[2]
2013 outlook
The Group confirms the objective it has set for 2013 of operating cash flow (restated EBITDA less CAPEX) of more than 7 billion euros. The ratio of net debt/EBITDA should be about 2.2 at the end of 2013 and return to a level of close to 2 at the end of 2014, excluding the impact of the tax dispute2, in order to preserve the Group's financial soundness under all circumstances.
The Group confirms that a dividend of a minimum of 0.80 euros per share will be paid for 2013. The Board of Directors decided on 24 July 2013 to pay an interim ordinary dividend for the current year based on the results of the first half of 2013. The interim dividend will be 0.30 euros per share and will be paid on 11 December.
In addition, the Group will pursue a policy of prudent and selective acquisitions in accordance with its net debt / EBITDA objective, concentrating on possible consolidation and disposals in the markets in which it operates.
Commenting on the results for the first half of 2013, Orange Chairman and CEO Stéphane Richard said: "Against a macro-economic and competitive backdrop that remains difficult in our main markets, these results demonstrate the effectiveness of our strategy both commercially and in terms of reducing our cost structure.
On the commercial side, in France and Poland we achieved record quarterly net sales in mobile contracts for the first time in two years. In Spain, quarter after quarter we are gaining market share, increasing revenues 3.9% in the half while improving profitability. Africa and the Middle East continue to drive the Group's growth with revenues up 4% in the half. On our cost structure, our efforts are delivering concrete results with the 600 million-euro cost reduction target for the year largely achieved by the end of the first half.
We are also maintaining the roll out of our high-speed fibre and 4G networks and are seeing real appetite for very high-speed broadband from our customers who are showing a willingness to pay a premium to access these services. These results, achieved thanks to the fighting spirit and determination of all our employees, allow us to confirm our 2013 objectives and to be confident in our ability to stabilise our operational cash flow in 2014."
key figures
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half-year data
| 2013 | 2012 | 2012 | change | change | change | impact of | impact of | ||||
| In millions of euros | comparable basis | historical basis | comparable basis | excluding regulatory measures | historical basis | change in exchange rates | change in consolidation scope | ||||
| Revenue | 20,603 | 21,570 | 21,843 | (4.5)% | (2.2)% | (5.7)% | (0.4)% | (0.8)% | |||
| Of which : | |||||||||||
| France | 10,084 | 10,822 | 10,826 | (6.8)% | (4.0)% | (6.9)% | - | (0.0)% | |||
| Spain | 2,021 | 1,988 | 1,988 | 1.6% | 3.9% | 1.6% | - | - | |||
| Poland | 1,572 | 1,720 | 1,694 | (8.6)% | (4.5)% | (7.2)% | 1.6% | (0.0)% | |||
| Rest of World | 3,877 | 3,866 | 4,144 | 0.3% | 2.4% | (6.4)% | (2.7)% | (4.0)% | |||
| Enterprise | 3,297 | 3,467 | 3,489 | (4.9)% | (4.9)% | (5.5)% | (0.2)% | (0.4)% | |||
| International Carriers and Shared Services | 830 | 814 | 817 | 2.0% | 2.0% | 1.7% | (0.1)% | (0.3)% | |||
| Eliminations | (1,078) | (1,107) | (1,115) | - | - | - | - | - | |||
| Restated EBITDA* | 6,417 | 6,943 | 7,004 | (7.6)% | (5.0)% | (8.4)% | (0.3)% | (0.6)% | |||
| As % of revenues | 31.1% | 32.2% | 32.1% | (1.0)pt | (0.9)pt | (0.9)pt | - | - | |||
| Of which : | |||||||||||
| France | 3,662 | 3,960 | 4,020 | (7.5)% | (4.1)% | (8.9)% | - | (1.5)% | |||
| Spain | 469 | 455 | 455 | 3.1% | 5.5% | 3.1% | - | - | |||
| Poland | 487 | 602 | 591 | (19.0)% | (18.6)% | (17.6)% | 1.6% | 0.2% | |||
| Rest of World | 1,240 | 1,374 | 1,453 | (9.8)% | (7.5)% | (14.7)% | (2.5)% | (3.0)% | |||
| Enterprise | 517 | 592 | 596 | (12.7)% | (12.7)% | (13.2)% | 1.2% | (1.7)% | |||
| International Carriers and Shared Services | 43 | (40) | (111) | (207.0)% | (207.0)% | (138.3)% | (0.6)% | (63.6)% | |||
| Operating Income | 2,993 | 3,488 | |||||||||
| Net income | 1,209 | 1,909 | |||||||||
| Net income attributable to equity owners of France Telecom SA | 1,068 | 1,738 | |||||||||
| CAPEX (excluding licences) | 2,455 | 2,433 | 2,460 | 0.9% | (0.2)% | ||||||
| As % of revenues | 11.9% | 11.3% | 11.3% | 0.6pt | 0.7pt | ||||||
| Operating cash flow (restated EBITDA*- CAPEX) | 3,962 | 4,510 | 4,544 | (12.2)% | (12.8)% | ||||||
| At 30 June 2013 | At 31 Dec. 2012 | ||||||||||
| Net financial debt | 29,610 | 30,545 | |||||||||
| Restated ratio of net financial debt / EBITDA** | 2.21 | 2.17 | |||||||||
* EBITDA restatements are described in appendix 5.
** The method of calculating the restated ratio of net financial debt to EBITDA is described in appendix 4.
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quarterly data
| 2nd quarter | 2nd quarter | 2nd quarter | change comparable | change excluding | change historical | impact of change in | impact of change in | ||||
| 2013 | 2012 | 2012 | basis | regulatory | basis | exchange | consolidation | ||||
| In millions of euros | comparable basis | historical basis | measures | rates | scope | ||||||
| Revenue | 10,323 | 10,849 | 10,921 | (4.8)% | (2.5)% | (5.5)% | (0.5)% | (0.1)% | |||
| Of which : | |||||||||||
| France | 5,015 | 5,423 | 5,425 | (7.5)% | (4.7)% | (7.6)% | - | (0.0)% | |||
| Spain | 1,032 | 1,007 | 1,007 | 2.5% | 4.6% | 2.5% | - | - | |||
| Poland | 786 | 873 | 862 | (9.9)% | (5.7)% | (8.8)% | 1.3% | (0.0)% | |||
| Rest of World | 1,943 | 1,945 | 2,011 | (0.1)% | 1.9% | (3.4)% | (3.3)% | 0.0% | |||
| Enterprise | 1,662 | 1,740 | 1,755 | (4.5)% | (4.5)% | (5.3)% | (0.2)% | (0.6)% | |||
| International Carriers and Shared Services | 424 | 405 | 407 | 4.5% | 4.5% | 4.1% | (0.1)% | (0.3)% | |||
| Eliminations | (539) | (545) | (546) | - | - | - | - | - | |||
| Restated EBITDA* | 3,293 | 3,597 | 3,572 | (8.4)% | (5.8)% | (7.8)% | (0.3)% | 1.0% | |||
| As % of revenues | 31.9% | 33.1% | 32.7% | (1.3)pt | (1.1)pt | (0.8)pt | |||||
| CAPEX (excluding licences) | 1,305 | 1,353 | 1,363 | (3.5)% | (4.2)% | (0.7)% | 0.0% | ||||
| As % of revenues | 12.6% | 12.5% | 12.5% | 0.2pt | 0.2pt | ||||||
| Operating cash flow (restated EBITDA* - CAPEX) | 1,987 | 2,243 | 2,209 | (11.4)% | (10.1)% | ||||||
* EBITDA restatements are described in appendix 5.
*
* *
The Board of Directors of Orange S.A. met on 24 July 2013 and examined the Group's financial statements.
The Group's statutory auditors performed a limited review of the half-year 2013 financial position and issued their report on the half-year financial information for 2013.
More detailed information is available on the Orange website:
comments on key Group figures
revenues
Orange Group revenues were 20.603 billion euros in the first half of 2013, a decrease of 4.5% on a comparable basis. Excluding the impact of regulatory measures (-511 million euros), Group revenues declined 2.2% compared to the first half of 2012.
In the second quarter of 2013, Group revenues were 10.323 billion euros, down 4.8% on a comparable basis. Excluding the impact of regulatory measures (-260 million euros), revenues fell 2.5%, after a 1.8% decline in the first quarter of 2013. Sustained growth in Spain and the Africa-Middle East region partially offset declining revenues in France, Poland and Belgium.
Revenue trends by region, excluding the impact of regulatory measures, were as follows:
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in France, mobile services revenues declined 4.5% over the half-year period due to the ARPU trend (-12.1%; -6.6% excluding the impact of regulatory measures at 30 June 2013). This is in line with the forecast decline for the year, whereas the contract customer base grew 4.6% year on year. Fixed broadband revenues rose 0.3%: the impact of the 2.3% increase in the customer base led by fibre was partially offset by the effect of the growing share of Open quadruple-play offers;
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in Spain, revenues rose 3.9% in the first half (+4.6% in the second quarter), led by the steady growth of mobile contracts and fixed broadband subscribers. Added to this in the second quarter was the development of mobile handset sales paid for by instalments;
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in Poland, the decline in mobile services revenues was limited to 2.8% in the first half while fixed broadband rose 8.1%, reflecting ARPU growth;
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Rest of World segment: in Africa and the Middle East revenues rose 4.0% over the half (+4.7% in the second quarter), led by Côte d'Ivoire, Senegal, Egypt, Guinea and Niger. Europe rose 0.6%: the revenue decline in Belgium and Slovakia was more than offset by the growth in the other countries (Luxembourg, Romania, Moldova and Armenia);
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Enterprise segment: the first half was down 4.9% in a difficult economic context with intensified competition. Security solutions grew 23%.
On an historical basis, first-half 2013 revenues fell 5.7% compared to the first half of 2012, which included the impact of changes in consolidation scope (-0.8 percentage points) principally related to the disposal of Orange Switzerland on 29 February 2012 and the disposal of Etrali on 3 June 2013, as well as the impact of foreign exchange variations (-0.4 percentage points): the declines in the Egyptian pound, the Dominican peso, the US dollar and the Jordanian dinar were partially offset by the increase in the Polish zloty.
customer base growth
The Group had 231.5 million customers (excluding MVNOs) at 30 June 2013, a year-on-year increase of 3.1% with 6.9 million net additions. There were 173.6 million mobile services customers at 30 June 2013, a year-on-year increase of 4.6% (+7.7 million net additions):
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Africa and the Middle East had a combined total of 84.0 million customers at 30 June 2013, an increase of 9.8% (+7.5 million net additions). Orange Money, now marketed in thirteen countries of Africa and the Middle East, had 7.4 million customers at 30 June 2013;
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In France, the mobile customer base of 26.7 million customers at 30 June 2013 was up 1.5% (+390,000 net additions). Contract customers (20.0 million) rose 4.6% due to the buoyancy of the Open quadruple-play and the Sosh online offers, which together represented 31% of the contract customer base at 30 June 2013, compared to 15% a year earlier;
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the other regions had 62.9 million customers at 30 June 2013, up 0.9% (+570,000 net additions) year on year, excluding the impact of the disposal of Orange Austria. The increase was related to Spain, the Dominican Republic, Moldova, Poland, Romania and Luxembourg. At the same time, the United Kingdom, Slovakia and Belgium recorded a decrease in their mobile customer bases.
Fixed broadband had 15.1 million customers at 30 June 2013, a year-on-year increase of 2.9% representing 430,000 net additions, including 226,000 in France, 188,000 in Spain and 28,000 in Slovakia. Fixed broadband subscribers included 299,000 fibre customers at 30 June 2013, of which 239,000 are in France, 57,000 in Slovakia and nearly 3,000 in Moldova. In France, the Open quadruple-play offers represented 29% of the fixed broadband customer base, compared to 18% a year earlier.
restated EBITDA
Restated EBITDA was 6.417 billion euros in the first half of 2013, compared to 6.943 billion euros in the first half of 2012, a decline of 7.6% on a comparable basis. Excluding the impact of regulatory measures (-190 million euros), the decrease was 5.0%.
The ratio of restated EBITDA to revenues was 31.1%, with the decline limited to 1.0 percentage points from the first half of 2012 due to the 5.8% reduction in direct costs and the 1.4% reduction in indirect costs.
Commercial expenses and content purchases declined 2.8% in the half; they concerned both commercial expenses related to the development of SIM-only offers in France and Spain and content purchases. The ratio of commercial expenses and content purchases to revenues was 14.8% in the first half of 2013 (+0.3 percentage points compared to the first half of 2012).
Service fees and inter-operator costs fell 8.7%. Excluding the favourable impact of the reduction in call termination rates (+321 million euros), these costs rose 3.2%, linked in particular to the growth in SMS and interconnection volumes with international carriers. The ratio of service fees and inter-operator costs to revenues (12.4%) improved 0.6 percentage points in relation to the first half of 2012.
Labour expenses (restated) were down 0.7%. On a comparable basis, the average number of full time equivalent employees fell 1.6% to 161,457 in the first half of 2013, versus 164,046 in the first half of 2012. The ratio of labour expenses (restated) to revenues was 22.2%, an increase of 0.8 percentage points compared with the first half of 2012.
All other expenses (restated) decreased 1.9% in the first half of 2013, compared with a 1.3% increase for 2012 as a whole, due to the drop in overheads and subcontracting expenses. The ratio of other expenses to revenues was 19.5%, an increase of 0.5 percentage points compared to the first half of 2012.
operating income
The Orange Group operating income was 2.993 billion euros in the first half of 2013, a decrease of 495 million euros (-14.2%) on an historical basis, including the impact of changes in consolidation scope (-134 million euros) and a positive foreign exchange impact of 10 million euros. On a comparable basis, the operating income decline was 372 million euros (-11.0%). This is due in particular to:
- the reduction in EBITDA[3] (-249 million euros);
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the increase in goodwill impairment (-226 million euros), which related to an impairment in Belgium in the first half of 2013 (-385 million euros) versus an impairment in Romania in the first half of 2012 (-159 million euros).
These unfavourable items were partially offset by the reduction in charges to depreciation and amortisation (+124 million euros).
net income
Consolidated net income for the Orange Group was 1.209 billion euros in the first half of 2013, compared to 1.909 billion euros in the first half of 2012, a decline of 700 million euros. This includes:
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the decrease in operating income of 495 million euros;
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the decrease in net financial income of 172 million euros related in part to the impact of the recognition of financial income of 272 million euros in the first half of 2012, with the revision of financial parameters for the acquisition price of ECMS shares from OTMT and for the free float, and secondly to an improved financial result in the first half of 2013 excluding this impact ; and
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the increase in income tax (-33 million euros).
CAPEX
CAPEX rose 0.9% on a comparable basis to 2.455 billion euros in the first half of 2013. The ratio of CAPEX to revenues was 11.9%, a 0.6 percentage-point increase compared with the first half of 2012. Investment in networks, which represented 55% of the Group's CAPEX in the first half of 2013, rose 2% led by the development of strategic projects such as:
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in France, the ramp-up of fibre deployment, with 2.1 million homes connectable at 30 June 2013 (+59% year on year), and the acceleration of investments in 4G very high-speed broadband, with more than 100 towns covered and 886 active sites at 30 June 2013;
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in Spain, the continuation of mobile network transformation programmes with the replacement of the network access and increased capital spending on capacity. At the same time, 4G was commercially available in six cities as of 8 July. On 13 March 2013, Orange Spain signed a partnership agreement with Vodafone for fibre deployment with a target of 800,000 homes connectable by the end of the first quarter of 2014.
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in Poland, the mobile network sharing programme accelerated in the first half of 2013.
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in the Rest of World segment, CAPEX on mobile networks remained high. Investment in 4G continued following the commercial launch of very high-speed mobile broadband in Luxembourg, Romania, Moldova and the Dominican Republic from late 2012.
operating cash flow
Operating cash flow, which corresponds to restated EBITDA less CAPEX, was 3.962 billion euros in the first half of 2013. This is in line with the Group's full-year target for 2013 of more than 7.0 billion euros in operating cash flow.
net financial debt
The Orange Group had net financial debt of 29.610 billion euros at 30 June 2013, a reduction of 935 million euros from 31 December 2012. The main components of the change in net financial debt in the first half of 2013 are presented in appendix 4.
The restated ratio of net financial debt to EBITDA was 2.21 at 30 June 2013. Including the impact of the payment related to a tax dispute concerning the financial year 2005 of about 2.150 billion euros to be made in the second half of 2013, the restated ratio of net financial debt to EBITDA was 2.37.
2013 dividend
review by operating segment
France
| In millions of euros | period ended 30 June | ||||
| 2013 | 2012 | 2012 | 13/12 | 13/12 | |
| comparable basis | historical basis | comparable basis | historical basis | ||
| Revenue | 10,084 | 10,822 | 10,826 | (6.8)% | (6.9)% |
| Restated EBITDA | 3,662 | 3,960 | 4,020 | (7.5)% | (8.9)% |
| Restated EBITDA / Revenues | 36.3% | 36.6% | 37.1% | 0 | 0 |
| CAPEX | 1,277 | 1,246 | 1,246 | 2.5% | 2.5% |
| CAPEX / Revenues | 12.7% | 11.5% | 11.5% | ||
| Restated EBITDA - CAPEX | 2,384 | 2,714 | 2,774 | (12.1)% | (14.1)% |
Revenues in France declined 6.8% on a comparable basis to 10.084 billion euros. Excluding the impact of regulatory measures (-314 million euros), revenues decreased 4.0%.
Mobile services (4.289 billion euros) fell 9.8% on a comparable basis, - 4.5% excluding the impact of regulatory measures (-266 million euros). The growth of national roaming partially offset the impact of rate reductions. ARPU declined 12.1% at 30 June 2013 (-6.6% excluding regulatory measures), in line with expectations for the year as a whole.
Fixed services fell 4.1% on a comparable basis to 5.307 billion euros. Excluding the impact of regulatory measures (-48 million euros), revenues declined 3.2%, reflecting the downward trend in traditional telephone services (-13.8%). Fixed broadband showed a modest increase of 0.3%, impacted by the development of Open quadruple-play offers, which represented 29% of the fixed broadband customer base at 30 June 2013 compared with 18% one year earlier. The fixed broadband customer base stood at 9.975 million subscribers on 30 June 2013, an increase of 2.3% year on year. It included 239,000 fibre subscribers, almost double that of one year earlier. Revenues from Carrier Services grew 0.2% on a comparable basis. Excluding the impact of regulatory measures (-48 million euros), revenues rose 2.9% due to the unbundling of lines.
second quarter 2013
Revenues in France were 5.015 billion euros, a 7.5% decrease on a comparable basis. Excluding the impact of regulatory measures (-163 million euros), revenues declined 4.7% after falling 3.4% in the first quarter.
Mobile services fell 11.5% on a comparable basis to 2.132 billion euros. Excluding the impact of regulatory measures (-140 million euros), revenues decreased 6.1% after falling 2.9% in the first quarter.
Revenues from fixed services declined 3.9% on a comparable basis to 2.645 billion euros, a decrease of 3.1% excluding the impact of regulatory measures, after falling 3.4% in the first quarter. The fixed broadband conquest share was estimated at about 20% in the second quarter, an improvement on the first quarter (15.7%).
Restated EBITDA for France declined 298 million euros (-7.5%) to 3.662 billion euros on a comparable basis; about half of the decrease was due to the impact of regulatory measures (-142 million euros). Despite the significant downturn in revenues, the restated EBITDA margin of 36.3% for the first half of 2013 was essentially stable compared with the first half of 2012, thanks to major savings: in direct costs, mainly with lower commercial costs and content purchases; in indirect costs, with the reduction in subcontracting costs; in labour expenses; and in overheads.
CAPEX in France rose to 1.277 billion euros in the first half of 2013, a 2.5% increase compared to the first half of 2012: with a particularly significant increase in 4G very high-speed broadband, with more than 100 towns covered and 886 active sites as at 30 June 2013; fibre coverage also increased, with 2.1 million homes connectable as at 30 June 2013, growth of 59% year on year.
Spain
| In millions of euros | period ended 30 June | ||||
| 2013 | 2012 | 2012 | 13/12 | 13/12 | |
| comparable basis | historical basis | comparable basis | historical basis | ||
| Revenue | 2,021 | 1,988 | 1,988 | 1.6% | 1.6% |
| Restated EBITDA | 469 | 455 | 455 | 3.1% | 3.1% |
| Restated EBITDA / Revenues | 23.2% | 22.9% | 22.9% | 0 | 0 |
| CAPEX | 237 | 210 | 210 | 12.9% | 12.9% |
| CAPEX / Revenues | 11.7% | 10.6% | 10.6% | ||
| Restated EBITDA - CAPEX | 232 | 245 | 245 | (5.4)% | (5.4)% |
Revenues in Spain rose 1.6% to 2.021 billion euros. Excluding the impact of regulatory measures (-44 million euros), revenues rose 3.9% compared to the first half of 2012.
Mobile services declined 3.0% to 1.485 billion euros. Excluding the impact of regulatory measures (-44 million euros), revenues remained stable (-0.1%) compared to the first half of 2012.
Mobile equipment sales (110 million euros) rose sharply (+26.5% compared with the first half of 2012) due to the sale of mobile handsets paid for by instalments, a commercial operation launched in the second quarter of 2013.
Fixed services rose 15.4% on a comparable basis to 418 million euros, led by the growth of carrier services (+42%) and the continued climb of fixed broadband services (+10.6%). The number of broadband subscribers was up 14.2% year on year to 1.512 million customers at 30 June 2013, whereas first half ARPU declined -0.7%, reflecting the growth of convergent offers.
second quarter 2013
Revenues in Spain were 1.032 billion euros, an increase of +2.5%. Excluding the impact of regulatory measures (-20 million euros), revenues rose 4.6%, 1.3 percentage points higher than in the first quarter (+3.3%), led by the very strong growth of mobile handset sales paid for by instalments. Mobile services declined 1.0% excluding the impact of regulatory measures, after rising 0.8% in the first quarter. The downturn reflected the rapid growth of SIM-only offers. Fixed services rose 14.8% due to the growth in carrier services (+48%) and broadband fixed services (+7.9%).
Restated EBITDA in Spain rose 3.1% to 469 million euros. The restated EBITDA margin was 23.2%, a 0.3 percentage-point improvement compared to the first half of 2012. This revenue growth was partially offset by a limited increase in commercial expenses, while combined direct and indirect costs remained stable on the whole.
CAPEX in Spain rose 12.9% compared to the first half of 2012 to 237 million euros, reflecting the continuation of mobile network transformation programmes, with the renovation of the subscriber network and increased capital spending on capacity. 4G was made commercially available in six cities as of 8 July. On 13 March 2013, Orange Spain signed a partnership agreement with Vodafone for fibre deployment, with a target of 800,000 homes connectable by the end of the first quarter 2014.
Poland
| In millions of euros | period ended 30 June | ||||
| 2013 | 2012 | 2012 | 13/12 | 13/12 | |
| comparable basis | historical basis | comparable basis | historical basis | ||
| Revenue | 1,572 | 1,720 | 1,694 | (8.6)% | (7.2)% |
| Restated EBITDA | 487 | 602 | 591 | (19.0)% | (17.6)% |
| Restated EBITDA / Revenues | 31.0% | 35.0% | 34.9% | 0 | 0 |
| CAPEX | 204 | 212 | 208 | (3.8)% | (1.9)% |
| CAPEX / Revenues | 13.0% | 12.3% | 12.3% | ||
| Restated EBITDA - CAPEX | 283 | 390 | 383 | (27.3)% | (26.1)% |
Revenues in Poland declined 8.6% on a comparable basis to 1.572 billion euros in the first half of 2013. Excluding the impact of regulatory measures (-74 million euros), half-year revenues fell 4.5%.
Mobile services (747 million euros) decreased 10.3% on a comparable basis, largely due to the impact of regulatory measures. Excluding the impact of regulatory measures (-64 million euros), the erosion was limited to 2.8%. The mobile customer base rose 1.3% to 14.947 million customers at 30 June 2013, led by a 2.0% year-on-year increase in prepaid offers (7.977 million customers at 30 June 2013) and a rebound in contract customer numbers in the second quarter (+64,000 additional customers). The 25April launch of the "nju.mobile" online offer has already been a success, with 80,000 customers at 30 June 2013. The Open Orange multi-play offer had a total of 125,000 customers on that same date.
Fixed services declined 9.4% on a comparable basis to 734 million euros; they were down 8.3% excluding the impact of regulatory measures. The downward trend for traditional telephony (-16.3% excluding regulatory measures) was partially offset by the growth of fixed broadband (+8.1%), led by the increase in ARPU (+7.5%) with the development of multi-play offers. The number of VoIP customers was up sharply (+69% year on year) with 465,000 customers at 30 June 2013. The number of fixed broadband customers dipped slightly (-1.2%), with 2.317 million customers at 30 June 2013.
second quarter 2013
Revenues in Poland totalled 786 million euros, a 9.9% decrease on a comparable basis. Excluding the impact of regulatory measures (-39 million euros), revenues fell 5.7%, after declining 3.2% in the first quarter. Mobile services decreased 3.4% excluding the impact of regulatory measures, after falling 2.2% in the first quarter. Orange Poland remained the mobile market leader in value, with its estimated market share stable at 28.3% in the second quarter of 2013. Fixed services were down 10.1% after declining 6.5% in the first quarter; the greater decrease in the second quarter was due to the basis of comparison with 2012, with the UEFA EURO football championship generating additional revenues in the second quarter of 2012. Fixed broadband continued its steady climb, rising 6.8% in the second quarter after an increase of 9.3% in the first quarter.
Restated EBITDA in Poland (487 million euros) fell 19.0% on a comparable basis (-115 million euros) due to the decline in revenues, partially offset by lower service fees and inter-operator costs as a result of call termination rate decreases imposed by the regulator.
CAPEX in Poland was 204 million euros, a 3.8% decrease on a comparable basis due to optimised IT costs and the launch of a new television platform in the first half of 2012. Meanwhile, the mobile network sharing programme was ramped up over the course of the first half 2013.
Rest of World
| In millions of euros | period ended 30 June | ||||
| 2013 | 2012 | 2012 | 13/12 | 13/12 | |
| comparable basis | historical basis | comparable basis | historical basis | ||
| Revenue | 3,877 | 3,866 | 4,144 | 0.3% | (6.4)% |
| Restated EBITDA | 1,240 | 1,374 | 1,453 | (9.8)% | (14.7)% |
| Restated EBITDA / Revenues | 32.0% | 35.5% | 35.1% | 0 | 0 |
| CAPEX | 398 | 462 | 493 | (13.8)% | (19.2)% |
| CAPEX / Revenues | 10.3% | 12.0% | 11.9% | ||
| Restated EBITDA - CAPEX | 841 | 911 | 960 | (7.7)% | (12.4)% |
Revenues in the Rest of World segment were 3.877 billion euros, growth of +0.3% on a comparable basis. Excluding the impact of regulatory measures (-79 million euros), the increase was 2.4% in the first half of 2013.
In Africa and the Middle East, revenue growth excluding regulatory measures (+4.0%) reflected the sustained growth of the mobile customer base, which stood at 84.0 million customers on 30 June 2013, with 7.5 million net additions year on year (+9.8%). Côte d'Ivoire, Senegal, Egypt, Guinea and Niger were the main contributors. Orange Money, now marketed in thirteen countries of Africa and the Middle East, had 7.4 million customers at 30 June 2013, compared with 4.3 million one year earlier.
In Europe, revenues rose 0.6% in the first half (excluding regulatory measures), related to mobile equipment sales, and in particular smartphone sales in Belgium. Mobile services declined 2.0%, reflecting rate decreases: the downturn in Belgium and Slovakia was partially offset by the upturn in the other countries (Luxembourg, Romania, Moldova and Armenia). Excluding the impact of the Orange Austria disposal, the mobile services customer base in the Europe zone (19.7 million customers at 30 June 2013) rose 0.9% year on year, led by the 3.3% growth in contract customers (+324,000 additional customers).
In the Dominican Republic, revenues climbed 5.1%, led by growth in the mobile customer base, which stood at 3.361 million customers on 30 June 2013 (+7.3% year on year).
second quarter 2013
Revenues were stable on a comparable basis (-0.1%) at 1.943 billion euros, after rising 0.7% in the first quarter. Excluding the impact of regulatory measures (-38 million euros), revenues rose 1.9% after rising 2.9% in the first quarter. The slowing of growth in the second quarter was linked to the Belgian market, with fewer mobile equipment sales than in the first quarter and a greater decrease in mobile services. Conversely, growth improved in the Africa and Middle East zone in the second quarter, representing 4.7% in the second quarter after rising 3.3% in the first quarter.
Restated EBITDA for the Rest of World segment (1.240 billion euros) decreased 9.8% on a comparable basis. Excluding the impact of regulatory measures (-34 million euros), the decline was 7.5%, corresponding to increased commercial costs, particularly in Belgium and Romania, and to the unfavourable impact of foreign exchange and inflation in Egypt.
CAPEX in the Rest of World segment (398 million euros) was 13.8% lower on a comparable basis following the major investments made in 2012 in the mobile networks in Egypt and the completion of the renovation of the mobile subscriber network in Romania (rural areas) and Slovakia. 4G CAPEX continued following the commercial launch of very high-speed mobile broadband in Luxembourg, Romania, Moldova and the Dominican Republic starting in late 2012.
Enterprise
| In millions of euros | period ended 30 June | ||||
| 2013 | 2012 | 2012 | 13/12 | 13/12 | |
| comparable basis | historical basis | comparable basis | historical basis | ||
| Revenue | 3,297 | 3,467 | 3,489 | (4.9)% | (5.5)% |
| Restated EBITDA | 517 | 592 | 596 | (12.7)% | (13.2)% |
| Restated EBITDA / Revenues | 15.7% | 17.1% | 17.1% | ||
| CAPEX | 149 | 171 | 172 | (12.7)% | (13.2)% |
| CAPEX / Revenues | 4.5% | 4.9% | 4.9% | ||
| Restated EBITDA - CAPEX | 368 | 421 | 423 | (12.8)% | (13.2)% |
Revenues in the Enterprise segment were 3.297 billion euros in the first half of 2013, a decrease of 4.9% on a comparable basis, mainly due to the downturn in legacy business services, especially in France. Competitive pressures mounted in the first half against the continued difficult economic backdrop in Europe.
Services operations declined 3.8% to 844 million euros. The integration of services and unified communication and collaborative services slowed significantly in the first half of 2013 in Europe. Meanwhile, security solutions rose sharply (+23%).
Growing networks (205 million euros) increased 4.6%, led by Voice over IP (+5.9%) and satellite access (+4.5%).
Mature networks (1.377 billion euros) declined 0.7%, reflecting the slowdown of IPVPN growth due to rate reductions, partially offset by the rise in volume. Broadcast services decreased 2.0%.
Legacy networks (871 million euros) declined 13.4%, at a similar pace to that of 2012.
second quarter 2013
Revenues (1.662 billion euros) declined 4.5% on a comparable basis in relation to the second quarter of 2012, after falling 5.3% in the first quarter. The 0.8 percentage-point improvement between the two quarters was related to international revenues, which rose 1.3% in the second quarter after falling 1.4% in the first quarter. In France, the revenue trend continued to reflect the sluggishness of the service operations.
Restated EBITDA for the Enterprise segment (517 million euros) declined 12.7% on a comparable basis. The restated EBITDA margin was 15.7%, a 1.4 percentage-point decline compared to the first half of 2012. More than half of the decrease in revenues was offset by lower direct costs (service fees and inter-operator costs and commercial expenses), overheads and other indirect costs.
CAPEX was 149 million euros in the first half of 2013. The 12.7% decrease compared to the first half of 2012 on a comparable basis reflects the adjustment of CAPEX in line with the business performance.
schedule of upcoming events
-
23 October 2013: third-quarter 2013 results
contacts
| press: +33 1 44 44 93 93 Béatrice Mandine beatrice.mandine@orange.com Jean-Bernard Orsoni jeanbernard.orsoni@orange.com Sébastien Audra sebastien.audra@orange.com Tom Wright tom.wright@orange.com Olivier Emberger olivier.emberger@orange.com Mylène Blin mylène.blin@orange.com | financial communications: +33 1 44 44 04 32 (analysts and investors) Patrice Lambert-de Diesbach p.lambert@orange.com Corentin Maigné corentin.maigne@orange.com Jérôme Blin jerome.blin@orange.com Luca Gaballo luca.gaballo@orange.com Didier Kohn didier.kohn@orange.com Florent Razafi florent.razafi@orange.com |
All press releases are available on the Group's websites:
disclaimer
This press release contains forward-looking indications. Although we believe these statements are based on reasonable assumptions, these forward-looking indications are subject to numerous risks and uncertainties, including risks 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. Important factors that could cause significant differences between the stated objectives and actual results include, among other factors, our ability to meet strong competition in our sector and adapt to the ongoing transformation of the telecommunications industry, particularly in France with the arrival of a fourth mobile operator; fluctuations in overall economic activity and in that specific to each of the markets in which we operate; the political situation in countries in which we invest; the emergence of new and powerful players such as content and services suppliers or search engines; our ability to earn a return on our investments in networks; fiscal and regulatory constraints and changes; conditions for access to capital markets and in particular the risks related to the liquidity of the financial markets; foreign exchange and interest rate fluctuations; asset impairment; and the outcome of current legal proceedings. More detailed information on the potential risks that could affect our financial results can be found in the Registration Document filed with the French Autorité des marchés financiers on 27 March 2013 and in the annual report on Form 20-F filed with the U.S. Securities and Exchange Commission on 12 April 2013. Except to the extent required by law, in particular articles 223-1 et seq. of the General Regulations of the AMF, the Orange Group does not undertake any obligation to update forward-looking statements.
appendix 1: consolidated income statement
| (in millions of euros, except for per share data) | 30 June 2013 | 30 June 2012 |
| Revenues | 20,603 | 21,843 |
| External purchases | (8,936) | (9,486) |
| Other operating Income | 379 | 563 |
| Other operating expense | (1,052) | (1,343) |
| Labour expenses | (4,650) | (4,848) |
| Gain (losses) on disposal | 94 | 102 |
| Restructuring costs and similar items | (21) | (11) |
| EBITDA | 6,417 | 6,820 |
| Depreciation and amortisation | (2,962) | (3,114) |
| Impairment of goodwill | (385) | (159) |
| Impairment of fixed assets | (3) | (2) |
| Share of profits (losses) of associates | (74) | (57) |
| Operating Income | 2,993 | 3,488 |
| Cost of gross financial debt | (869) | (756) |
| Gains (losses) on assets contributing to net financial debt | 29 | 61 |
| Foreign exchange gains (losses) | 5 | 15 |
| Other financial income and expenses | (34) | (17) |
| Finance costs, net | (869) | (697) |
| Income tax | (915) | (882) |
| Consolidated net income after tax | 1,209 | 1,909 |
| Net income attributable to owners of the parent | 1,068 | 1,738 |
| Net income attributable to non-controlling interests | 141 | 171 |
| Earnings per shares (in euros) attributable to owners of the parent | ||||
| Net income | ||||
| · | Basic | 0.41 | 0.66 | |
| · | Diluted | 0.40 | 0.65 | |
appendix 2: consolidated statement of financial position
| (in millions of euros) | 30 June 2013 | 31 December 2012 |
| Goodwill | 25,439 | 25,773 |
| Other Intangible assets | 11,564 | 11,818 |
| Property, plant and equipment | 23,070 | 23,662 |
| Interests in associates | 6,880 | 7,431 |
| Assets available for sale | 90 | 139 |
| Non-current loans and receivables | 1,478 | 1,003 |
| Non-current financial assets at fair value through profit or loss | 166 | 159 |
| Non-current hedging derivatives assets | 165 | 204 |
| Other non-current assets | 232 | 70 |
| Deferred tax assets | 3,339 | 3,594 |
| Total non-current assets | 72,423 | 73,853 |
| Inventories | 574 | 586 |
| Trade receivables | 4,702 | 4,635 |
| Current loans and other receivables | 50 | 81 |
| Current financial assets at fair value through profit or loss, excluding cash equivalents | 332 | 141 |
| Current hedging derivatives assets | 15 | 3 |
| Other current assets | 1,571 | 1,863 |
| Current tax assets | 45 | 109 |
| Prepaid expenses | 578 | 388 |
| Cash equivalents | 4,519 | 7,116 |
| Cash | 1,276 | 1,205 |
| Total current assets | 13,662 | 16,127 |
| TOTAL ASSETS | 86,085 | 89,980 |
| EQUITY AND LIABILITIES | ||
| Share capital | 10,596 | 10,596 |
| Additional paid-in capital | 16,790 | 16,790 |
| Retained earnings | (3,051) | (3,080) |
| Equity attributable to the owners of the parent | 24,335 | 24,306 |
| Non-controlling interest | 1,867 | 2,078 |
| Total equity | 26,202 | 26,384 |
| Non-current trade payables | 341 | 337 |
| Non-current financial liabilities at amortized cost, excluding trade payables | 29,973 | 31,883 |
| Non-current financial liabilities at fair value through profit or loss | 382 | 482 |
| Non-current hedging derivatives liabilities | 775 | 542 |
| Non-current employee benefits | 2,971 | 2,989 |
| Non-current provisions for dismantling | 709 | 686 |
| Non-current restructuring provisions | 79 | 98 |
| Other non-current liabilities | 491 | 560 |
| Deferred tax liabilities | 1,065 | 1,102 |
| Total non-current liabilities | 36,786 | 38,679 |
| Current trade payables | 7,138 | 7,697 |
| Current financial liabilities at amortized cost, excluding trade payables | 6,315 | 7,331 |
| Current financial liabilities at fair value through profit or loss | 114 | 111 |
| Current hedging derivatives liabilities | 12 | 5 |
| Current employee benefits | 1,821 | 1,948 |
| Current provisions for dismantling | 17 | 23 |
| Current restructuring provisions | 37 | 55 |
| Other current liabilities | 2,581 | 2,755 |
| Current tax payables | 2,965 | 2,794 |
| Deferred income | 2,097 | 2,198 |
| Total current liabilities | 23,097 | 24,917 |
| TOTAL EQUITY AND LIABILITIES | 86,085 | 89,980 |
appendix 3: consolidated statement of cash flows
| (in millions of euros) | 30 June 2013 | 30 June 2012 |
| OPERATING ACTIVITIES | ||
| Consolidated net income | 1,209 | 1,909 |
| Adjustments to reconcile net income (loss) to funds generated from operations | 4,980 | 4,781 |
| Change in inventories, trade receivables and trade payables | (200) | 60 |
| Other changes in working capital requirements | (325) | (837) |
| Other net cash out | (1,486) | (1,668) |
| Net cash provided by operating activities | 4,178 | 4,245 |
| INVESTING ACTIVITIES | ||
| Purchases (sales) of property, plant and equipment and intangible assets | (3,026) | (3,844) |
| Cash paid for investment securities, net of cash acquired | (62) | (1) |
| Cash paid for joint operations securities, net of cash acquired | 8 | - |
| Purchases of equity securities measured at fair value | (10) | (18) |
| Proceeds from sales of investment securities, net of cash transferred | 41 | 1,411 |
| Decrease (increase) in securities and other financial assets | (196) | 763 |
| Net cash used in investing activities | (3,245) | (1,689) |
| FINANCING ACTIVITIES | ||
| Insurance of bonds and other long-term debt | 1,207 | 1,891 |
| Redemptions and repayments of bonds and other long-term borrowings | (3,354) | (2,503) |
| Increase (decrease) of bank overdrafts and short-term borrowings | 7 | 642 |
| Decrease (increase) of deposits and other debt-linked financial assets | (425) | 270 |
| Exchange rates effects on derivatives, net | (122) | 193 |
| Purchase of treasury shares | 66 | (71) |
| Changes in ownership interests with no gain / loss of control | (11) | (1,489) |
| Capital increase (decrease) - non-controlling interests | - | 1 |
| Dividends paid to non-controlling interests | (262) | (316) |
| Dividends paid to owners of the parent company | (526) | (2,104) |
| Net cash used in financing activities | (3,420) | (3,486) |
| Net change in cash and cash equivalents | (2,487) | (930) |
| Effect of exchange rates changes on cash and cash equivalents and other non-monetary effects | (39) | 31 |
| Cash and cash equivalents - opening balance | 8,321 | 8,061 |
| o/w cash | 1,205 | 1,311 |
| o/w cash equivalents | 7,116 | 6,733 |
| o/w discontinued operations | - | 17 |
| Cash and cash equivalents - closing balance | 5,795 | 7,162 |
| o/w cash | 1,276 | 933 |
| o/w cash equivalents | 4,519 | 6,229 |
appendix 4: change in net financial debt for the first half of 2013
| (in millions of euros, on an historical basis) | 30 June 2012 | 31 Dec. 2012 | 30 June 2013 | |
| Restated EBITDA - CAPEX | 4,544 | 7,967 | 3,962 | |
| Licences and spectrum | (1,111) | (1,255) | (231) | (1) |
| Net interest expense cash out and dividends received | (920) | (1,370) | (1,117) | (2) |
| Income taxes cash out | (748) | (1,145) | (369) | (3) |
| Change in WCR | (618) | (56) | (883) | (4) |
| Other operational items | (745) | (969) | (210) | (5) |
| Dividends paid to owners of parent company | (2,104) | (3,632) | (526) | |
| Dividends paid to non-controlling interests | (316) | (583) | (262) | |
| Purchase of own shares | (71) | (94) | 66 | |
| Acquisitions and disposal | 1,635 | 1,518 | (42) | |
| Other financial items | 167 | (36) | 547 | (6) |
| Variation in net debt | (287) | 345 | 935 | |
| Net financial debt | (31,177) | (30,545) | (29,610) | |
| Restated ratio of net financial debt / EBITDA* | 2.11x | 2.17x | 2.21x | |
| Restated ratio of net financial debt / EBITDA* including the impact of a payment related to a tax dispute concerning the financial year 2005 | 2.37x | (7) |
-
Mainly concerns Romania in the first half of 2013 (-164 million euros).
-
Decrease in Everything Everywhere dividends received (payment of an exceptional dividend of 155 million euros in the first half of 2012).
-
Lower fiscal result used to calculate interim tax payment.
-
Deterioration compared with the first half of 2012: impact of the payment in the first half of 2013 of the charge related to the European Community decision (-90 million euros) recognised in 2012; CICE booked but not received in the first half of 2013; and an increase in receivables due to the increase in wholesale revenues in France.
-
The first half of 2012 includes the payment of 550 million euros related to the settlement of litigation between DPTG and TP S.A. in Poland.
-
Includes the non-monetary effect on net debt, mainly the positive variance of accrued interest and the impact of derivatives compared with 2012.
-
The payment related to a tax dispute concerning the financial year 2005 and arising in the second half of 2013, representing an amount of about 2.150 billion euros and a 0.16x increase in the restated net financial debt / EBITDA ratio.
-
The restated ratio of net financial debt to EBITDA is calculated as a ratio of net financial debt, including 50% of the net financial debt of the Everything Everywhere joint venture in the United Kingdom, to restated EBITDA, including 50% of the EBITDA of the Everything Everywhere joint venture.
appendix 5: analysis of consolidated EBITDA
| 2013 | 2012 | change | ||
| comparable basis | comparable basis | |||
| In millions of euros | (in %) | |||
| 1rst half | ||||
| Revenue | 20,603 | 21,570 | (4.5)% | |
| External purchases | (8,936) | (9,324) | (4.2)% | |
| in % of revenues | 43.4% | 43.2% | 0.1pt | |
| of which: | ||||
| Purchases from and fees paid to carriers | (2,548) | (2,790) | (8.7)% | |
| in % of revenues | 12.4% | 12.9% | (0.6)pt | |
| Other network and IT expenses | (1,418) | (1,411) | 0.5% | |
| in % of revenues | 6.9% | 6.5% | 0.3pt | |
| Property, overheads, other external expenses and capitalised production | (1,911) | (1,975) | (3.2)% | |
| in % of revenues | 9.3% | 9.2% | 0.1pt | |
| Commercial expenses and content purchases | (3,059) | (3,148) | (2.8)% | |
| in % of revenues | 14.8% | 14.6% | 0.3pt | |
| Labour expenses* | (4,572) | (4,605) | (0.7)% | |
| in % of revenues | 22.2% | 21.4% | 0.8pt | |
| Other operating income and expenses* | (688) | (698) | (1.4)% | |
| Gains (losses) on disposals of assets* | 30 | 11 | - | |
| Restructuring costs | (21) | (11) | - | |
| Restated EBITDA* | 6,417 | 6,943 | (7.6)% | |
| in % of revenues | 31.1% | 32.2% | (1.0)pt | |
* EBITDA restatements relate to the following exceptional events:
In the first half of 2013, with no net impact on EBITDA:
-
an expense of 78 million euros related to the Part Time for Seniors plans in France and other items connected to labour expenses;
-
a 65 million-euro gain on the disposal of Orange Austria;
-
13 million euros in net proceeds from various litigation cases.
A total positive amount of 276 million euros in the first half of 2012 for:
-
an expense of 204 million euros related to the Part Time for Seniors plans in France and other items connected to labour expenses;
-
an expense of 116 million euros (including recording rights) corresponding to the compensation of 110 million euros paid to Orascom Telecom Media and Technology Holding S.A.E. (OTMT) for the transfer of the services contract between OTMT and ECMS to the Orange Group;
-
net proceeds from various litigation cases of 44 million euros.
| 2013 | 2012 | change | ||
| comparable basis | comparable basis | |||
| In millions of euros | (in %) | |||
| 2nd quarter | ||||
| Revenue | 10,323 | 10,849 | (4.8)% | |
| External purchases | (4,485) | (4,658) | (3.7)% | |
| in % of revenues | 43.4% | 42.9% | 0.5pt | |
| of which: | ||||
| Purchases from and fees paid to carriers | (1,296) | (1,400) | (7.4)% | |
| in % of revenues | 12.6% | 12.9% | (0.4)pt | |
| Other network and IT expenses | (712) | (711) | 0.0% | |
| in % of revenues | 6.9% | 6.6% | 0.3pt | |
| Property, overheads, other external expenses and capitalised production | (975) | (1,008) | (3.2)% | |
| in % of revenues | 9.4% | 9.3% | 0.2pt | |
| Commercial expenses and content purchases | (1,503) | (1,539) | (2.4)% | |
| in % of revenues | 14.6% | 14.2% | 0.4pt | |
| Labour expenses* | (2,255) | (2,303) | (2.1)% | |
| in % of revenues | 21.8% | 21.2% | 0.6pt | |
| Other operating income and expenses* | (314) | (285) | 10.3% | |
| Gains (losses) on disposals of assets* | 34 | 1 | - | |
| Restructuring costs | (10) | (8) | - | |
| Restated EBITDA* | 3,293 | 3,597 | (8.4)% | |
| in % of revenues | 31.9% | 33.1% | (1.3)pt | |
* EBITDA restatements relate to the following exceptional events:
In the second quarter of 2013, with a total positive amount of 26 million euros:
-
an expense of 39 million euros related to the Part Time for Seniors plans in France and other items connected to labour expenses;
-
13 million euros in net proceeds from various litigation cases.
A total positive amount of 162 million euros in the second quarter of 2012 for:
-
an expense of 180 million euros related to the Part Time for Seniors plans in France and other items connected to labour expenses;
-
an expense of 116 million euros (including recording rights) corresponding to the compensation of 110 million euros paid to Orascom Telecom Media and Technology Holding S.A.E. (OTMT) for the transfer of the services contract between OTMT and ECMS to the Orange Group;
-
net proceeds from various litigation cases of 134 million euros.
appendix 6: revenues by operating segment
| 2013 | 2012 | 2012 | change | change | ||
| comparable basis | historical basis | comparable basis | historical basis | |||
| In millions of euros | (in %) | (in %) | ||||
| 1st half | ||||||
| France | 10,084 | 10,822 | 10,826 | (6.8)% | (6.9)% | |
| Mobile services | 4,289 | 4,757 | 4,757 | (9.8)% | (9.8)% | |
| Mobile equipment sales | 231 | 248 | 248 | (6.8)% | (6.8)% | |
| Fixed services | 5,307 | 5,532 | 5,532 | (4.1)% | (4.1)% | |
| Fixed services retail | 3,483 | 3,712 | 3,712 | (6.2)% | (6.2)% | |
| Fixed services wholesale | 1,824 | 1,820 | 1,820 | 0.2% | 0.2% | |
| Other revenues | 257 | 285 | 289 | (10.0)% | (11.1)% | |
| Spain | 2,021 | 1,988 | 1,988 | 1.6% | 1.6% | |
| Mobile services | 1,485 | 1,530 | 1,530 | (3.0)% | (3.0)% | |
| Mobile equipment sales | 110 | 87 | 87 | 26.5% | 26.5% | |
| Fixed services | 418 | 362 | 362 | 15.4% | 15.4% | |
| Other revenues | 8 | 9 | 9 | (11.3)% | (11.3)% | |
| Poland | 1,572 | 1,720 | 1,694 | (8.6)% | (7.2)% | |
| Mobile services | 747 | 833 | 805 | (10.3)% | (7.2)% | |
| Mobile equipment sales | 18 | 17 | 16 | 5.3% | 6.9% | |
| Fixed services | 734 | 811 | 798 | (9.4)% | (8.0)% | |
| Other revenues | 73 | 59 | 75 | 22.5% | (1.9)% | |
| Rest of World | 3,877 | 3,866 | 4,144 | 0.3% | (6.4)% | |
| of which Egypt | 587 | 568 | 650 | 3.3% | (9.6)% | |
| Enterprise | 3,297 | 3,467 | 3,489 | (4.9)% | (5.5)% | |
| Legacy networks | 871 | 1,007 | 969 | (13.4)% | (10.0)% | |
| Mature networks | 1,377 | 1,386 | 1,434 | (0.7)% | (4.0)% | |
| Growing networks | 205 | 196 | 197 | 4.6% | 4.2% | |
| Services | 844 | 878 | 889 | (3.8)% | (5.1)% | |
| International Carriers and Shared Services | 830 | 814 | 817 | 2.0% | 1.7% | |
| International Carriers | 694 | 696 | 696 | (0.2)% | (0.2)% | |
| Shared Services | 136 | 118 | 121 | 15.3% | 12.6% | |
| Inter-segment eliminations | (1,078) | (1,107) | (1,115) | - | - | |
| Group total | 20,603 | 21,570 | 21,843 | (4.5)% | (5.7)% | |
| 2nd quarter | ||||||
| France | 5,015 | 5,423 | 5,425 | (7.5)% | (7.6)% | |
| Mobile services | 2,132 | 2,410 | 2,410 | (11.5)% | (11.5)% | |
| Mobile equipment sales | 112 | 125 | 125 | (10.1)% | (10.1)% | |
| Fixed services | 2,645 | 2,751 | 2,751 | (3.9)% | (3.9)% | |
| Fixed services retail | 1,723 | 1,836 | 1,836 | (6.2)% | (6.2)% | |
| Fixed services wholesale | 921 | 914 | 914 | 0.8% | 0.8% | |
| Other revenues | 126 | 137 | 139 | (8.3)% | (9.6)% | |
| Spain | 1,032 | 1,007 | 1,007 | 2.5% | 2.5% | |
| Mobile services | 744 | 772 | 772 | (3.6)% | (3.6)% | |
| Mobile equipment sales | 75 | 49 | 49 | 51.6% | 51.6% | |
| Fixed services | 209 | 182 | 182 | 14.8% | 14.8% | |
| Other revenues | 4 | 4 | 4 | (1.0)% | (1.0)% | |
| Poland | 786 | 873 | 862 | (9.9)% | (8.8)% | |
| Mobile services | 378 | 425 | 411 | (10.9)% | (7.9)% | |
| Mobile equipment sales | 10 | 8 | 8 | 15.8% | 17.3% | |
| Fixed services | 361 | 407 | 402 | (11.5)% | (10.3)% | |
| Other revenues | 38 | 33 | 41 | 14.8% | (7.7)% | |
| Rest of World | 1,943 | 1,945 | 2,011 | (0.1)% | (3.4)% | |
| of which Egypt | 297 | 283 | 331 | 5.2% | (10.2)% | |
| Enterprise | 1,662 | 1,740 | 1,755 | (4.5)% | (5.3)% | |
| Legacy networks | 429 | 491 | 472 | (12.6)% | (9.2)% | |
| Mature networks | 696 | 703 | 725 | (0.9)% | (4.0)% | |
| Growing networks | 106 | 99 | 100 | 6.6% | 6.0% | |
| Services | 432 | 448 | 458 | (3.6)% | (5.7)% | |
| International Carriers and Shared Services | 424 | 405 | 407 | 4.5% | 4.1% | |
| International Carriers | 359 | 344 | 344 | 4.3% | 4.3% | |
| Shared Services | 65 | 62 | 63 | 5.7% | 3.1% | |
| Inter-segments eliminations | (539) | (545) | (546) | - | - | |
| Group total | 10,323 | 10,849 | 10,921 | (4.8)% | (5.5)% | |
appendix 7: key performance indicators
| 30 June 2013 | 30 June 2012 | |
| Orange Group | ||
| Total number of customers* (millions) | 231.462 | 224.526 |
| Mobile service customers* (millions) | 173.629 | 165.976 |
| - of which contract customers (millions) | 59.099 | 54.255 |
| Fixed broadband service customers (millions) | 15.107 | 14.677 |
| - of which IPTV and satellite TV customers (millions) | 6.164 | 5.506 |
| France | ||
| Mobile services | ||
| Number of customers* (millions) | 26.710 | 26.321 |
| - of which contract customers (millions) | 20.033 | 19.152 |
| Total ARPU (euros) | 311 | 354 |
| Fixed services | ||
| Number of fixed line subscribers (millions) | 17.442 | 18.024 |
| Number of broadband customers (millions) | 9.975 | 9.749 |
| Broadband market share at end of period (%) | 40.8 *** | 41.8 |
| Broadband ARPU (euros) | 34.3 | 35.0 |
| Number of IPTV and satellite TV customers (millions) | 5.322 | 4.703 |
| Number of fixed lines in the Carriers market (millions) | 12.796 | 12.061 |
| Spain | ||
| Mobile services | ||
| Number of customers* (millions) | 12.238 | 11.717 |
| - of which contract customers (millions) | 8.614 | 7.845 |
| Total ARPU (euros) | 249 | 266 |
| Fixed services | ||
| Number of broadband customers (millions) | 1.512 | 1.323 |
| Broadband ARPU (euros) | 32.9 | 32.9 |
| Poland | ||
| Mobile services | ||
| Number of customers* (millions) | 14.947 | 14.757 |
| - of which contract customers (millions) | 6.970 | 6.937 |
| Total ARPU (PLN) | 444 | 487 |
| Fixed | ||
| Number of fixed telephone lines (millions) | 6.010 | 6.840 |
| Number of broadband customers (millions) | 2.317 | 2.344 |
| Number of IPTV and satellite TV customers (thousands) | 699 | 677 |
| Broadband ARPU (PLN) | 58.6 | 55.1 |
| * Excluding customers of MVNOs ** See glossary *** Company estimate. |
| 30 June 2013 | 30 June 2012 | |
| Rest of World | ||
| Mobile services | ||
| Total number of customers* (millions) | 107.090 | 100.017 |
| - of which contract customers (millions) | 16.494 | 13.750 |
| Mobile customers by region (millions) | ||
| - Europe | 19.668 | 20.281 |
| - Africa and Middle East | 84.036 | 76.562 |
| - Other operations | 3.386 | 3.174 |
| Fixed services | ||
| Total number of telephone lines (thousands) | 2,021 | 2,102 |
| - of which Europe (thousands) | 681 | 682 |
| - of which Africa and Middle East (thousands) | 1,336 | 1,414 |
| - of which Other operations (thousands) | 4 | 6 |
| Number of broadband customers (thousands) | 951 | 904 |
| - of which Europe (thousands) | 185 | 166 |
| - of which Africa and Middle East (thousands) | 765 | 735 |
| - of which Other operations (thousands) | 1 | 2 |
| Enterprise | ||
| France | ||
| Number of legacy telephone lines (thousands) | 3,516 | 3,833 |
| Number of permanent accesses to IP networks (thousands) | 350 | 344 |
| - of which IP-VPN (thousands) | 283 | 277 |
| Number of XoIP connections (thousands) | 70 | 64 |
| World | ||
| Total number of IP-VPN accesses worldwide (thousands) | 327 | 322 |
| Everything Everywhere (United Kingdom) ** | ||
| Mobile services | ||
| Number of customers* (millions) | 25.287 | 26.328 |
| - of which contract customers (millions) | 13.976 | 13.143 |
| Total ARPU (£/month, based on quarterly revenues) | 18.4 | 18.7 |
| Fixed services | ||
| Number of broadband customers (thousands) | 704 | 714 |
| * Excluding customers of MVNOs | ||
| ** The Everything Everywhere customer bases are 50% consolidated in the Orange Group customer bases. |
appendix 8: glossary
Key figures
comparable basis: data based on comparable accounting principles, consolidation scope 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, consolidation scope and exchange rates. 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.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation. This indicator corresponds to operating income before depreciation and amortisation, before revaluation related to acquisitions of controlling interests, before reversal of currency translation reserves of liquidated entities, before impairment of goodwill and assets, and before income from associates. EBITDA is not a financial performance indicator as defined by IFRS standards and is not directly comparable to indicators referenced by the same name in other companies.
CAPEX: capital expenditure on tangible and intangible assets excluding telecommunication licences and investments through finance leases.
operating cash flow: corresponds to restated EBITDA minus CAPEX. Orange uses this indicator to measure the Group's performance in generating cash flow from its operating activities.
average number of employees (full time equivalents): average number of active employees on the last day of the period, prorated for their work time, including both open-permanent contracts and fixed-term contracts.
Mobile services
revenues from mobile services: include revenues generated by incoming and outgoing calls (voice, SMS and data services), network access fees, added-value services, machine to machine, roaming revenues from customers of other networks (national and international roaming), revenues with mobile virtual network operators (MVNO) and revenues from network sharing.
mobile ARPU: the annual average revenues per user (ARPU) are calculated by dividing the revenues from incoming and outgoing calls (voice, SMS and data services), network access fees, added-value services, international roaming and incoming calls from MVNOs over the past twelve months, by the weighted average number of customers over the same period, excluding "machine to machine" customers. The weighted average number of customers is the average of the monthly averages during the period in question. The monthly average is the arithmetic mean of the number of customers at the start and end of the month. Mobile ARPU is expressed as annual revenues per customer.
roaming: use of a mobile service on the network of an operator other than that of the subscriber.
MVNO: Mobile Virtual Network Operator. These are operators that do not have their own radio network and thus use the infrastructure of third-party networks.
mobile number portability: allows mobile customers to keep their mobile numbers when they change operators. The donor operator deactivates the mobile number in its information system; the recipient operator activates the same mobile number in its own information system.
Fixed services
fixed broadband ARPU (ADSL, FTTH, satellite and WiMAX): the average revenues per user of broadband services per year are calculated by dividing the revenues generated by consumer broadband services over the past twelve months by the weighted average number of accesses over the same period. The weighted average number of accesses is the average of the monthly averages during the period in question. The monthly average is the arithmetic mean of the number of accesses at the start and end of the month. Fixed broadband ARPU is expressed as monthly revenues per access.
[1] Excluding machine-to-machine
[2] The payment of around 2.150 billion euros to be made in the second half of 2013, related to the impact of a tax dispute concerning the year 2005, for which Orange will file a judicial appeal.
[3] Non-restated EBITDA (consolidated income statement presented in appendix 1). EBITDA restatements are described in appendix 5.
[4] Subject to the approval of the Annual General Meeting of shareholders.
[5] Excluding machine-to-machine contracts and Internet keys.
[6] Including the integration of the 398,000 Simyo customers in the first quarter of 2013.
[7] With the exception of France, where entreprise solutions and networks are listed under the Enterprise business segment.
