Orange: Financial information at December 31, 2020
Press releaseParis, 18 February 2021
Financial information at December 31, 2020
Solid financials and excellent commercial
results
Orange accelerates the rollout of its broadband
networks, despite the health crisis
Organic cash flow of €2.5 billion from telecoms
activities, comfortably reaching the objective announced for
2020
In millions of euros |
|
4Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
10,917 |
(0.2)% |
(1.5)% |
|
42,270 |
0.3 % |
0.1 % |
EBITDAaL |
|
3,182 |
(2.3)% |
(3.2)% |
|
12,680 |
(1.0)% |
(1.4)% |
Operating Income |
|
|
|
|
|
5,521 |
|
(6.9)% |
Consolidated net income |
|
|
|
|
|
5,055 |
|
56.9 % |
eCAPEX (excluding licenses) |
|
2,247 |
10.1 % |
9.1 % |
|
7,132 |
(1.7)% |
(2.2)% |
EBITDAaL - eCAPEX |
|
936 |
(23.1)% |
(23.8)% |
|
5,548 |
(0.1)% |
(0.3)% |
Organic cash-flow (telecom activities) |
|
|
|
|
|
2,494 |
|
6.4 % |
The Group achieved its financial targets for 2020 as revised in
July:
- Moderate revenue growth despite a slight dip in the fourth
quarter. For the year, the excellent performance of Africa &
Middle East (up 5.2%)1 and the solid results of France (up 1.6%)
offset the decline in Europe (down 3.5%) and Enterprise (down
1.4%).
- EBITDAaL was down slightly, heavily impacted by the decline in
roaming and additional costs resulting from the health crisis (€545
million), by Spain (down 13.0%), and by the Enterprise segment
(down 14.9%). These were mitigated by the remarkable performance of
Africa & Middle East (up 10.0%), good results in Europe (up
2.3% excluding Spain), and the resilience of France (up 0.2%).
- eCAPEX fell by €124 million, absorbing the decline in EBITDAaL,
despite the accelerated rollout of fixed and mobile broadband
networks, thanks to the contributions from co-financing and the
discipline shown by the Group, particularly in Europe.
- Organic cash flow from telecoms activities saw a return to
growth at €2.5 billion (up €149 million compared to 2019), against
a target of more than €2.3 billion.
Orange will propose a 2020 dividend of €0.70 per share plus
€0.20 linked to the French Council of State’s favorable decision
with respect to a long-standing tax dispute.
Commenting on the publication of these results, Stéphane
Richard, Chairman and Chief Executive Officer of the Orange group,
said:
“2020 was an extraordinary year, marked by a crisis of
unprecedented scale and violence. In this challenging context, with
networks showing just how vital they are to society, Orange proved
able to adapt and meet the challenges, to continue to offer the
very best of our services to our customers.
Firstly, in fixed, we continued to connect our clients to fiber.
In France, 6.5 million more households were made connectable during
2020. This was an unprecedented performance and a tremendous feat
given the context! Worldwide, we now have over 47 million
connectable households. In numerous countries, the transition
to fiber is accelerating and this is a trend that the health crisis
has only increased. Our record commercial performance, for example
in France and in Poland, are proof in point.
In very high speed mobile broadband, we launched 5G in five
countries and will continue the deployment of this disruptive
technology in 2021. In France, we have also been named the “best
mobile network” for the 10th year in succession and 99% of the
population now has access to 4G coverage.
Orange succeeded in stabilizing its revenues for the year thanks
to the quality of its networks. In Africa & Middle East, growth
was very strong at more than 5%, still driven mainly by 4G and
Orange money.
Finally, our actions are paying off as we continue to progress
towards the ambitious objectives we set out in our Engage 2025
strategic plan. With respect to the environment, we have reduced
our CO2 emissions by 12%. We also opened our first three Orange
Digital Centers to promote greater digital inclusivity.
Thanks to these solid results, to our carefully managed investments
and to greater operational efficiency, we are confirming our
objective to generate between €3.5 and €4 billion in Organic Cash
Flow in 2023.”
Analysis of Group key figures
Revenues
The Orange group posted 2020 revenues of €42.3
billion, up 0.3% year-on-year on a comparable basis. This growth
was driven by the strong trend in wholesale services thanks to the
co-financing of the fiber network in France and to convergent
services, which posted respective growth rates of 4.4% and 2.1%.
Roaming (customers and visitors) was hit by travel restrictions,
while equipment sales fell 9.5% due to store closures.
France and Africa & Middle-East made a positive
contribution, posting respective growth rates of 1.6% and 5.2% in
2020. Europe (including Spain) remained under pressure, as did
Enterprise, although the latter showed some improvement in the
fourth quarter.
Customer base growth
There were 11.06 million convergent customers
Group-wide at December 31, 2020, up 2.7% year-on-year driven by
continuing strong growth in Europe.
Mobile services numbered 214.1 million access
lines at December 31, 2020, up 3.3% year-on-year, including 77.4
million contracts, up 4.3%.
Fixed services numbered a
total of 45.1 million access lines at December 31, 2020, down 0.7%
year-on-year. This was primarily due to the sharp 12.4% fall in
fixed narrowband access lines, despite continuing strong growth
(23.7%) in very high-speed fixed broadband access lines.
EBITDAaL
Group EBITDAaL amounted to €12.68 billion in
2020, down 1.0% year on year (a decline of 2.3% in the fourth
quarter). This was adversely impacted particularly by the decline
in roaming (down €292 million) and costs of €253 million euros
directly relating to the health crisis (including provisions for
bad debts).
EBITDAaL from telecoms activities amounted to
€12.84 billion in 2020, down 1.0%.
Operating income
Group operating income totaled €5,521 million
for 2020, down €409 million (-6.9%) on an historical basis.
This decrease is mainly due to the €176 million decline in
EBITDAaL on an historical basis and the €162 million increase in
net expenses relating to significant litigation following a
reassessment of the risk related to various disputes.
Net income
The Orange group posted consolidated net income
of €5,055 million in 2020, an increase of €1,833 million compared
to the €3,222 million achieved in 2019.
This increase results mainly from a tax refund of €2,246 million
recognized at the 2020 year-end following the French Council of
State’s finding in the Group’s favor in the matter of a
long-running tax dispute.
eCAPEX
Group eCAPEX declined by 1.7% in 2020, largely
as a result of co-financings received and despite the accelerated
rollout of the fixed and mobile broadband networks.
Despite the health crisis, the Group succeeded in rolling out
more fiber optic connections in 2020 than in 2019, providing an
additional 9.0 million households with FTTH connectivity
year-on-year (compared to 7.2 million in the previous year). At
December 31, 2020, Orange thus had 47.2 million households with
FTTH connectivity worldwide (up 23.4% year-on-year).
At 2020 year-end, nearly 100% of Orange mobile sites in France
offered 4G coverage.
Organic cash flow
Organic cash flow from telecoms activities
reached €2.5 billion, up €149 million year-on-year despite the
decline in EBITDAaL. This increase is mainly explained by reduced
eCAPEX outflows and the French “Part-Time for Seniors” program
(TPS).
Net financial debt
The Orange group’s net financial debt amounted
to €23.5 billion at December 31, 2020, down €2.0 billion compared
to December 31, 2019. This was mainly due to the tax refund of €2.2
billion, following the French Council of State’s finding in favor
of the Group in the matter of a long-running tax dispute.
The net debt to EBITDAaL ratio stood at 1.83x
at December 31, 2020. Excluding the impact of the €2.2 billion tax
refund, the ratio would have been 2.00x, in line with the
medium-term objective of around 2x.
Infrastructure optimization, development and
enhancement
Orange has moved forward in its plans to share future fiber
network deployments with its partners via specific structures
(FiberCos).
In January 2021, Orange announced the signing of an exclusive
agreement with a consortium of long-term investors for the sale of
a 50% stake in and joint control of Orange
Concessions, an entity dedicated to fiber development in
rural areas of France. With 23 public initiative networks
representing approximately 4.5 million existing or planned FTTH
connections, Orange Concessions will be France’s leading operator
of FTTH networks deployed and managed on behalf of local
authorities. The transaction values Orange Concessions at €2.675
billion and should be finalized by the end of 2021.
In Poland, the Group plans to sign an agreement in the first
half of 2021 to establish a special purpose entity due to be
operational in 2021.
Regarding plans for enhancement of the European mobile network,
Orange has just announced the creation TOTEM, its European
TowerCo.
“Scale Up” operational efficiency program
To ensure achievement of its objectives, in 2020
Orange launched the “Scale Up” operational efficiency program,
thereby confirming its commitment to generating €1 billion in net
savings within the defined scope of indirect costs2. By 2020
year-end, net savings of around €100 million have been generated in
this regard. The savings will be progressively increased between
now and 2023 and will cover labor expenses, overheads, other
network expenses, IT expenses, real estate, advertising, marketing
and customer service costs, operating taxes and levies.
Changes in asset portfolio
There were no significant changes in the asset portfolio in Q4
2020.
In November 2020, Orange announced the signing of an agreement
to acquire a 54% majority stake in Romanian carrier Telekom Romania
Communications (TKR) and its convergent subscriber base. The
transaction is expected to close in the second half of 2021.
On December 2, 2020, Orange SA announced plans to launch a
conditional voluntary public tender offer for a 47.09% stake in
Orange Belgium. The offer has been submitted to the Belgian
Financial Services and Markets Authority (FSMA).
Outlook for 2021
The Group’s financial objectives take into account the
allocation of the €2.2 billion tax refund received at 2020 year-end
after the French Council of State found in the Group’s favor in a
long-running tax dispute. This balanced allocation of funds for the
benefit of the company’s development, its employees and its
shareholders, with a reinforced commitment to society, is intended
to generate added value for the Group in the long term. It will
nevertheless have an impact on short-term objectives.
For 2021, therefore, the Group forecasts:
- stable but negative EBITDAaL (approximately +1% before the
allocation of the tax refund),
- eCAPEX of €7.6-€7.7 billion (approximately €7.3 billion before
the allocation of the tax refund),
- organic cash flow from telecoms activities of over €2.2 billion
(over €2.6 billion before the allocation of the tax refund),
- net debt/EBITDAaL ratio for telecoms activities remaining at
around 2x in the medium term.
The Group confirms its objective to generate
between €3.5 and €4 billion in Organic Cash Flow in 2023.
Dividend
In respect of 2020, the May 18, 2021 Shareholders’ Meeting will
vote on a dividend payout of €0.70 per share plus €0.20 per share
linked to the French Council of State’s favorable decision in the
matter of a long-running tax dispute. Taking into account the €0.40
interim dividend paid on December 9, 2020, the balance of the
dividend to be proposed to the Shareholders’ Meeting will be €0.50
per share, to be paid in cash on June 17, 2021. The ex-dividend
date will be June 15, 2021.
In respect of the 2021 financial year, a dividend of €0.70 per
share will be proposed to the 2022 Shareholders’ Meeting. An
interim dividend of €0.30 per share will be paid in December
2021.
The Board of Directors of Orange SA
met on February 18, 2021 to review the consolidated financial
statements for the year ended December 31, 2020. In accordance with
auditing standards, the Group’s statutory auditors performed their
audit procedures on those financial statements and the audit
reports relating to their certification are in the process of being
issued.
More detailed information on the
Group’s financial statements and performance indicators is
available on the Orange website
https://www.orange.com/en/consolidated-results.
Review by operating segment
The new organization of the Orange Group’s Executive Committee
implemented since September 1, 2020, led the Group to review the
presentation of its 3rd quarter 2020 segment information, without
however changing the definition of its operating segments. The
segment information now regroups, within Europe, Spain and the
other European countries, comprising Poland, Belgium, Luxembourg
and each of the Central European countries (Moldova, Romania and
Slovakia). In addition, the Orange Bank segment was renamed Mobile
Financial Services to take into account the gradual integration of
new activities within this segment.
Historical data, comparable basis data and customer base data
for the financial years 2019 and 2020 were restated to reflect this
change.
France
In millions of euros |
|
4Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
4,744 |
0.2 % |
0.3 % |
|
18,461 |
1.6 % |
1.7 % |
Retail
services |
|
2,696 |
(1.3)% |
(1.2)% |
|
10,764 |
(0.4)% |
(0.4)% |
Convergence |
|
1,155 |
0.5
% |
1.1
% |
|
4,559 |
3.1
% |
3.7
% |
Mobile Only |
|
558 |
(1.2)% |
(2.2)% |
|
2,245 |
(2.4)% |
(3.4)% |
Fixed Only |
|
983 |
(3.3)% |
(3.3)% |
|
3,959 |
(3.1)% |
(3.1)% |
Wholesale |
|
1,452 |
1.9
% |
2.1
% |
|
5,866 |
6.7
% |
6.9
% |
Equipment
sales |
|
427 |
(2.6)% |
(2.6)% |
|
1,187 |
(12.2)% |
(12.2)% |
Other revenues |
|
169 |
21.0 % |
20.2 % |
|
644 |
27.3 % |
26.6 % |
EBITDAaL |
|
|
|
|
|
7,163 |
0.2 % |
0.4 % |
EBITDAaL
/ Revenues |
|
|
|
|
|
38.8
% |
(0.5
pt) |
(0.5
pt) |
Operating Income |
|
|
|
|
|
3,809 |
- |
(2.1)% |
eCAPEX |
|
|
|
|
|
3,748 |
(7.5)% |
(7.5)% |
eCAPEX / Revenues |
|
|
|
|
|
20.3 % |
(2.0 pt) |
(2.0 pt) |
Revenues buoyed by wholesale services and resilience in
retail services, despite the structural decline of narrowband and
the adverse impact of the crisis, particularly on roaming
revenue
Retail services revenues fell due to the impact
of promotional offers on digital content. Adjusted for this effect,
retail services revenues rose 0.6% in the fourth quarter and even
offset the structural decline in PSTN, despite the significant
impact of the health crisis on customer roaming. Excluding digital
content offers and PSTN, retail services revenues produced the
strongest increase of the year rising 2.4%.
Wholesale services revenues continued to grow
this quarter, despite the decline in national roaming. This was due
to continued co-financing of the fiber network by third parties and
the construction of Public Initiative Networks.
From a commercial standpoint, convergent ARPO rose €1 to €69,
excluding digital content offers.
Mobile contract net additions (excluding M2M) reached
87,000.
Fiber set a new record of 388,000 net additions (versus 360,000
in Q3 2020). Year on year, the increase was 35.3%. Once again this
quarter, over half of new fiber customers were new customers for
the Group.
In 2020, EBITDAaL increased despite the
negative impact of the crisis and the effect of digital content
offers. This trend shows that we are benefitting from our fiber
investments whether in our activities with retail customers or
operators. Our profitability has also been helped by the success of
our convergent offers and our “more for more” approach aimed at
simplifying the market.
The sharp decline in eCapex is mainly due to
the co-financing received from third parties even as we accelerated
the rollout of our network which now comprises nearly 23 million
connectable households, representing a more than 40% increase on
2019.
Europe
In millions of euros |
|
4Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
2,715 |
(4.3)% |
(6.1)% |
|
10,580 |
(3.5)% |
(4.3)% |
Retail
services |
|
1,781 |
(4.2)% |
(5.3)% |
- |
7,147 |
(3.0)% |
(3.4)% |
Convergence |
|
667 |
(3.4)% |
(4.0)% |
- |
2,717 |
0.5
% |
0.1
% |
Mobile Only |
|
747 |
(7.4)% |
(8.4)% |
- |
3,038 |
(7.5)% |
(8.0)% |
Fixed Only |
|
267 |
(4.1)% |
(6.2)% |
- |
1,083 |
(4.1)% |
(5.4)% |
IT & Integration services |
|
101 |
21.3
% |
17.5
% |
- |
310 |
22.7
% |
29.8
% |
Wholesale |
|
492 |
(1.6)% |
(2.9)% |
- |
1,924 |
(0.9)% |
(1.8)% |
Equipment sales |
|
409 |
(6.2)% |
(10.9)% |
- |
1,375 |
(7.6)% |
(9.4)% |
Other revenues |
|
33 |
(24.6)% |
(26.5)% |
- |
134 |
(21.5)% |
(22.6)% |
EBITDAaL |
|
|
|
|
|
2,932 |
(5.8)% |
(6.5)% |
EBITDAaL / Revenues |
|
|
|
|
|
27.7
% |
(0.7
pt) |
(0.7
pt) |
Operating Income |
|
|
|
|
|
796 |
- |
(21.0)% |
eCAPEX |
|
|
|
|
|
1,847 |
10.7 % |
9.8 % |
eCAPEX / Revenues |
|
|
|
|
|
17.5 % |
2.2 pt |
2.2 pt |
Significant improvement in commercial performance
despite continued pressure on revenues
Europe revenues (now including Spain, Belgium,
Luxembourg, Moldova, Poland, Romania and Slovakia) were still under
pressure in the fourth quarter, down slightly compared to the third
quarter.
Despite the improved sales performance, retail
services remained under pressure due to strong competition
impacting ARPOs and the negative effect of the crisis on roaming
revenues from customers and visitors.
Equipment sales fell sharply due to the
resurgence of the pandemic.
While the health crisis continued to weigh on the free movement
of people, the commercial performance of the
seven-country Europe region continued the positive trend of the
third quarter across all product lines with 317,000 mobile contract
net additions excluding M2M (versus 221,000 in the third quarter)
including 135,000 tablets in Romania, and 147,000 net additions in
fixed broadband (versus 96,000 in the third quarter) including
175,000 FTTH connections.
2020 full-year EBITDAaL was down 5.8%, with the
decline in roaming accounting for half of this decrease. At a
geographic level, the contraction is largely due to the negative
contribution of Spain (down 13.0%), partly offset by solid results
in Poland (up 3.4%) and Belgium (up 8.1%).
In Spain, revenues continued to deteriorate in
the fourth quarter, still impacted by the negative effect of the
health crisis on roaming revenues as well as previous volume
losses, and due to the dilution of ARPO caused by our repositioning
in the low-cost segment in the second half.
The new commercial strategy is already proving effective, with
an acceleration in net additions versus the third quarter in both
mobile and fixed telephony. This renewed commercial momentum is the
first step needed towards improving EBITDAaL, which deteriorated
sharply in the second half due to the drop in revenues. Our
priority in Spain is to restore margins, as reflected in the
various action plans launched which include measures to cut costs,
simplify our offers, digitalize and accelerate our B2B
business.
Africa & Middle East
In millions of euros |
|
4Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
1,515 |
8.3 % |
3.6 % |
|
5,834 |
5.2 % |
3.3 % |
Retail
services |
|
1,301 |
10.5
% |
5.8
% |
|
5,007 |
7.8
% |
5.7
% |
Mobile Only |
|
1,140 |
8.5
% |
3.8
% |
|
4,420 |
6.7
% |
4.5
% |
Fixed Only |
|
152 |
23.7
% |
19.4
% |
|
562 |
15.5
% |
13.9
% |
IT & Integration services |
|
9 |
123.0
% |
119.4
% |
|
25 |
75.4
% |
74.0
% |
Wholesale |
|
177 |
(1.5)% |
(7.7)% |
|
695 |
(9.0)% |
(11.0)% |
Equipment sales |
|
27 |
(3.8)% |
(7.3)% |
|
89 |
(6.8)% |
(7.5)% |
Other revenues |
|
10 |
(29.4)% |
(13.1)% |
|
43 |
6.0 % |
36.6 % |
EBITDAaL |
|
|
|
|
|
1,964 |
10.0 % |
8.3 % |
EBITDAaL / Revenues |
|
|
|
|
|
33.7
% |
1.5
pt |
1.5
pt |
Operating Income |
|
|
|
|
|
1,027 |
- |
9.3 % |
eCAPEX |
|
|
|
|
|
1,036 |
6.0 % |
5.0 % |
eCAPEX / Revenues |
|
|
|
|
|
17.8 % |
0.1 pt |
0.3 pt |
Excellent commercial performance in Africa & Middle
East
Revenues for Africa & Middle East continued
to show strong growth in the fourth quarter driven by mobile data,
Orange Money, fixed broadband and B2B.
The 4G customer base reached 33 million, up 39% over a 12-month
period, out of a total of over 128 million mobile customers.
Strong growth in revenues from Orange Money
continued in the fourth quarter, rising 22.6% and enabling the
business to cross the €500 million level for full-year 2020
revenues. The customer base comprised 21.9 million active
customers, up 20% year on year.
The fixed broadband customer base grew 39% year
on year to 1.7 million, while revenues rose 36.5%.
B2B revenues grew 13.5% in the fourth quarter, mainly driven by
IT services.
Wholesale revenues continued to be affected by the decrease in
international travel and visitor roaming.
In the fourth quarter, 14 countries in the region recorded
growth, with eight achieving double-digit increases.
Despite the health crisis, EBITDAaL in Africa
& Middle East grew strongly rising 10% in 2020 with a 33.7%
margin, up 1.5 percentage points, driven by the commercial
performance, cost control and continued transformation initiatives.
This confirms the process of continuous improvement in the
profitability of the region, with EBITDAaL growth of over 18% since
2018.
Enterprise
In millions of euros |
|
4Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
2,050 |
(1.2)% |
(2.6)% |
|
7,807 |
(1.4)% |
(0.2)% |
Fixed
Only |
|
942 |
(5.2)% |
(6.5)% |
|
3,851 |
(2.5)% |
(2.8)% |
Voice |
|
302 |
(6.0)% |
(6.9)% |
|
1,237 |
(3.8)% |
(4.0)% |
Data |
|
639 |
(4.8)% |
(6.3)% |
|
2,614 |
(1.9)% |
(2.2)% |
IT &
Integration services |
|
877 |
5.6
% |
3.7
% |
|
3,086 |
2.3
% |
6.1
% |
Mobile
* |
|
231 |
(7.9)% |
(8.0)% |
|
870 |
(8.3)% |
(8.3)% |
Mobile Only |
|
163 |
(12.3)% |
(12.3)% |
|
649 |
(10.7)% |
(10.7)% |
Wholesale |
|
13 |
63.8
% |
63.8
% |
|
45 |
33.0
% |
33.0
% |
Equipment sales |
|
56 |
(3.8)% |
(3.8)% |
|
175 |
(6.5)% |
(6.5)% |
EBITDAaL |
|
|
|
|
|
1,023 |
(14.9)% |
(14.1)% |
EBITDAaL
/ Revenues |
|
|
|
|
|
13.1
% |
(2.1
pt) |
(2.1
pt) |
Operating Income |
|
|
|
|
|
621 |
- |
(19.6)% |
eCAPEX |
|
|
|
|
|
339 |
(16.0)% |
(16.2)% |
eCAPEX / Revenues |
|
|
|
|
|
4.3 % |
(0.8 pt) |
(0.8 pt) |
Continued improvement in revenue growth due to the
strong recovery in IT and integration services
After two quarters impacted by the health crisis, IT and
integration service revenues returned to growth rising
5.6% in the fourth quarter, finishing the year up 2.3%. The cloud
and cybersecurity businesses continued to grow, with increases of
6% and 9% respectively in 2020.
Traditional voice services are returning to their pre-crisis
level of decline, while the fall in data revenues has gathered
pace, impacted by canceled events.
Mobile3 revenues continued to be significantly
affected by the collapse in roaming revenues (down 63.8%) as a
result of the health crisis.
EBITDAaL in the Enterprise segment fell 14.9%
in 2020. While profitability improved in the second half compared
to the first half, it remains heavily impacted by the health
crisis.
International Carriers & Shared Services
In millions of euros |
|
4Q 2020 |
changecomparablebasis |
changehistoricalbasis |
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Revenues |
|
370 |
(1.4)% |
(1.8)% |
|
1,450 |
(3.0)% |
(3.2)% |
Wholesale |
|
259 |
(2.4)% |
(2.6)% |
|
1,038 |
(3.6)% |
(3.6)% |
Other revenues |
|
111 |
0.8 % |
(0.0)% |
|
412 |
(1.4)% |
(2.1)% |
EBITDAaL |
|
|
|
|
|
(244) |
11.4 % |
6.3 % |
EBITDAaL
/ Revenues |
|
|
|
|
|
(16.9)% |
1.6
pt |
0.5
pt |
Operating Income |
|
|
|
|
|
(538) |
- |
(7.9)% |
eCAPEX |
|
|
|
|
|
133 |
3.7 % |
(5.4)% |
eCAPEX / Revenues |
|
|
|
|
|
9.2 % |
0.6 pt |
(0.2 pt) |
Revenues from International Carriers and Shared Services fell
1.4% in the fourth quarter, versus a 5.7% decline in the third
quarter.
International carrier services remain constrained by the health
crisis due to international travel restrictions, although with less
marked seasonality in the fourth quarter.
Other revenues rose slightly after two quarters of decline, due
to the resumption of activities at Orange Marine, and despite the
continued decline in content revenues, still affected by cinema
closures.
2020 full-year EBITDAaL rose 11.4%, largely due to the reduction
in shared service overheads linked to the health crisis.
Mobile Financial Services
In millions of euros |
|
|
|
|
|
12M 2020 |
changecomparablebasis |
changehistoricalbasis |
Net
Banking Income (NBI) |
|
|
|
|
|
69 |
70.6
% |
70.6
% |
Cost of
bank credit risk |
|
|
|
|
|
(31) |
207.2
% |
207.2
% |
Operating Income |
|
|
|
|
|
(195) |
- |
(5.3)% |
eCAPEX |
|
|
|
|
|
30 |
8.5 % |
8.5 % |
At December 31, 2020, Orange Bank’s
customer base in France and Spain, including the
mobile insurance offer, was almost 1.2 million customers.
In France, Orange Bank successfully pursued its
value-oriented strategy, with more than 90% of new customers in the
fourth quarter taking paid offers (compared to 30% in Q4 2019). The
bank is continuing to develop with the acquisition in January 2021
of Anytime, a neobank dedicated to meeting the needs of
professionals.
Orange Bank Africa, launched at
the end of July 2020 in Côte d’Ivoire, already has over 350,000
customers, more than half of whom have taken out loans.
The impact of Mobile Financial Services on Group
EBITDAaL was a reduction of €160 million in 2020,
a similar level to 2019. Launches in Spain (at the end of 2019) and
Africa were offset by a reduction of losses in France.
Calendar of upcoming events
04/22/2021 - Publication of first
quarter 2021 results
07/29/2021 - Publication of first
half 2021 results
10/26/2021 - Publication of third
quarter 2021 results
Contacts
Press: +33 1 44 44 93 93 Sylvain
Brunosylvain.bruno@orange.com Tom
Wrighttom.wright@orange.com Olivier
Embergerolivier.emberger@orange.com |
Financial communication: +33 1 44 44 04 32(analysts and investors)
Patrice Lambert-de Diesbachp.lambert@orange.com
Samuel Castelosamuel.castelo@orange.com Aurélia
Rousselaurelia.roussel@orange.com Andrei
Dragoliciandrei.dragolici@orange.com |
Disclaimer
This press release contains forward-looking
statements about Orange’s financial situation, results of
operations and strategy. 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 health crisis may
exacerbate the risks that the Group is facing. More detailed
information on the potential risks that could affect our financial
results is included in the Universal Registration Document filed on
20 April 2020 with the French Financial Markets Authority (AMF) and
in the annual report (Form 20-F) filed on 21 April 2020 with the
U.S. Securities and Exchange Commission. Forward-looking statements
speak only as of the date they are made. Other than as required by
law, Orange does not undertake any obligation to update them in
light of new information or future developments.
Appendix 1: Key financial indicators
As part of the application of IFRS 16 as of January 1, 2019, the
Group implemented the decision of the IFRS IC (IFRS Interpretations
Committee) published in December 2019, relating to the enforceable
term of leases. The Group decided to apply this decision during the
third quarter 2020, with effect from January 1, 2019 (restatement
of the 2019 and 2020 periods). Additional right of use and lease
liability were therefore recognized retrospectively as of January
1, 2019. For the 2019 financial year, the impact of the application
of this decision on the Group's consolidated results is not
significant.
Historical data and comparable basis data for financial years
2019 and 2020 were restated to reflect these changes.
Data at 31 December:
In millions of euros |
|
12M 2020 |
12M 2019comparablebasis |
12M 2019historicalbasis |
variationcomparablebasis |
changehistoricalbasis |
Revenues |
|
42,270 |
42,151 |
42,238 |
0.3 % |
0.1 % |
France |
|
18,461 |
18,165 |
18,154 |
1.6
% |
1.7
% |
Europe |
|
10,580 |
10,968 |
11,051 |
(3.5)% |
(4.3)% |
Africa & Middle-East |
|
5,834 |
5,543 |
5,646 |
5.2
% |
3.3
% |
Enterprise |
|
7,807 |
7,914 |
7,820 |
(1.4)% |
(0.2)% |
International Carriers & Shared Services |
|
1,450 |
1,495 |
1,498 |
(3.0)% |
(3.2)% |
Intra-Group eliminations |
|
(1,861) |
(1,934) |
(1,930) |
|
|
EBITDAaL (1) |
|
12,680 |
12,812 |
12,856 |
(1.0)% |
(1.4)% |
o/w
telecom activities |
|
12,839 |
12,970 |
13,015 |
(1.0)% |
(1.4)% |
As % of revenues |
|
30.4
% |
30.8
% |
30.8
% |
(0.4
pt) |
(0.4
pt) |
France |
|
7,163 |
7,146 |
7,135 |
0.2
% |
0.4
% |
Europe |
|
2,932 |
3,112 |
3,136 |
(5.8)% |
(6.5)% |
Africa & Middle-East |
|
1,964 |
1,785 |
1,814 |
10.0
% |
8.3
% |
Enterprise |
|
1,023 |
1,202 |
1,191 |
(14.9)% |
(14.1)% |
International Carriers & Shared Services |
|
(244) |
(276) |
(261) |
11.4
% |
6.3
% |
o/w
Mobile Financial Services |
|
(160) |
(160) |
(160) |
(0.1)% |
(0.1)% |
Operating Income |
|
5,521 |
|
5,930 |
|
(6.9)% |
o/w
telecom activities |
|
5,715 |
|
6,114 |
|
(6.5)% |
o/w Mobile Financial Services |
|
(195) |
|
(186) |
|
(5.3)% |
Consolidated net income |
|
5,055 |
|
3,222 |
|
56.9 % |
Net income attributable to equity owners of the Group |
|
4,822 |
|
3,004 |
|
60.5 % |
eCAPEX |
|
7,132 |
7,257 |
7,293 |
(1.7)% |
(2.2)% |
o/w
telecom activities |
|
7,102 |
7,229 |
7,265 |
(1.8)% |
(2.2)% |
as % of revenues |
|
16.8
% |
17.1
% |
17.2
% |
(0.3
pt) |
(0.4
pt) |
o/w Mobile Financial Services |
|
30 |
28 |
28 |
8.5 % |
8.5 % |
EBITDAaL - eCAPEX |
|
5,548 |
5,555 |
5,564 |
(0.1)% |
(0.3)% |
Organic cash-flow (telecom activities) |
|
2,494 |
|
2,345 |
|
6.4 % |
(1) EBITDAaL adjustments are described in Appendix
2.
In millions of euros |
|
December 312020 |
Au 31 déc.2019 |
Net financial debt (1) |
|
23,489 |
25,466 |
Ratio of financial debt / EBITDAaL from telecom activities
(2) |
|
1.83 |
1.96 |
(1) Net financial debt as defined and used by Orange does not
include Orange Bank activities, for which this concept is not
relevant. (2) The ratio of net financial debt to EBITDAaL for
telecoms activities is calculated as the ratio of the Group’s net
financial debt compared to EBITDAaL for telecoms activities
calculated over the previous 12 months.
Quarterly data
In millions of euros |
|
4Q 2020 |
4Q 2019comparablebasis |
4Q 2019historicalbasis |
variationcomparablebasis |
changehistoricalbasis |
Revenues |
|
10,917 |
10,944 |
11,088 |
(0.2)% |
(1.5)% |
France |
|
4,744 |
4,734 |
4,731 |
0.2
% |
0.3
% |
Europe |
|
2,715 |
2,838 |
2,891 |
(4.3)% |
(6.1)% |
Africa & Middle-East |
|
1,515 |
1,399 |
1,461 |
8.3
% |
3.6
% |
Enterprise |
|
2,050 |
2,074 |
2,104 |
(1.2)% |
(2.6)% |
International Carriers & Shared Services |
|
370 |
375 |
377 |
(1.4)% |
(1.8)% |
Intra-Group eliminations |
|
(477) |
(477) |
(477) |
|
|
EBITDAaL (1) |
|
3,182 |
3,256 |
3,287 |
(2.3)% |
(3.2)% |
o/w
telecom activities |
|
3,241 |
3,301 |
3,331 |
(1.8)% |
(2.7)% |
As % of revenues |
|
29.7
% |
30.2
% |
30.0
% |
(0.5
pt) |
(0.4
pt) |
o/w
Mobile Financial Services |
|
(59) |
(45) |
(45) |
(31.6)% |
(31.6)% |
eCAPEX |
|
2,247 |
2,040 |
2,059 |
10.1 % |
9.1 % |
o/w
telecom activities |
|
2,238 |
2,035 |
2,054 |
10.0
% |
8.9
% |
as % of revenues |
|
20.5
% |
18.6
% |
18.5
% |
1.9
pt |
2.0
pt |
o/w Mobile Financial Services |
|
9 |
5 |
5 |
74.8 % |
74.8 % |
EBITDAaL - eCAPEX |
|
936 |
1,216 |
1,227 |
(23.1)% |
(23.8)% |
(1) EBITDAaL adjustments are described in Appendix
2.
Appendix 2: adjusted data to income statement
items
Data at 31 December:
|
|
12M 2020 |
|
12M 2019historical basis |
In millions of euros |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
Revenues |
|
42,270 |
- |
42,270 |
|
42,238 |
- |
42,238 |
External
purchases |
|
(17,684) |
(6) |
(17,691) |
|
(17,860) |
- |
(17,860) |
Other
operating income |
|
604 |
- |
604 |
|
720 |
- |
720 |
Other
operating expense |
|
(560) |
(229) |
(789) |
|
(527) |
(72) |
(599) |
Labor
expenses |
|
(8,465) |
(25) |
(8,490) |
|
(8,470) |
(24) |
(8,494) |
Operating
taxes and levies |
|
(1,924) |
- |
(1,924) |
|
(1,827) |
- |
(1,827) |
Gains
(losses) on disposal of fixed assets, investments and
activities |
|
- |
228 |
228 |
|
- |
277 |
277 |
Restructuring costs |
|
- |
(25) |
(25) |
|
- |
(132) |
(132) |
Depreciation and amortization of financed assets |
|
(55) |
- |
(55) |
|
(14) |
- |
(14) |
Depreciation and amortization of right-of-use assets |
|
(1,384) |
- |
(1,384) |
|
(1,274) |
- |
(1,274) |
Impairment of right-of-use assets |
|
- |
(57) |
(57) |
|
(0) |
(33) |
(33) |
Interests
expenses on liabilities related to financed assets |
|
(1) |
1 |
- |
|
(1) |
1 |
- |
Interests expenses on lease liabilities |
|
(120) |
120 |
- |
|
(129) |
129 |
- |
EBITDAaL |
|
12,680 |
6 |
- |
|
12,856 |
144 |
- |
Significant litigation |
|
(211) |
211 |
- |
|
(49) |
49 |
- |
Specific
labor expenses |
|
(12) |
12 |
- |
|
(23) |
23 |
- |
Fixed
assets, investments and business portfolio review |
|
228 |
(228) |
- |
|
277 |
(277) |
- |
Restructuring program costs |
|
(83) |
83 |
- |
|
(165) |
165 |
- |
Acquisition and integration costs |
|
(37) |
37 |
- |
|
(24) |
24 |
- |
Interests
expenses on liabilities related to financed assets |
|
- |
(1) |
(1) |
|
- |
(1) |
(1) |
Interests expenses on lease liabilities |
|
- |
(120) |
(120) |
|
- |
(129) |
(129) |
Quarterly data
|
|
4Q 2020 |
|
4Q 2019historical basis |
In millions of euros |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
|
Adjusted data, |
Presentation adjustments, |
Income statement, |
Revenues |
|
10,917 |
- |
10,917 |
|
11,088 |
- |
11,088 |
External
purchases |
|
(4,877) |
(6) |
(4,883) |
|
(4,879) |
- |
(4,879) |
Other
operating income |
|
201 |
- |
201 |
|
195 |
- |
195 |
Other
operating expense |
|
(174) |
(47) |
(221) |
|
(249) |
(65) |
(313) |
Labor
expenses |
|
(2,132) |
(59) |
(2,190) |
|
(2,203) |
56 |
(2,147) |
Operating
taxes and levies |
|
(340) |
- |
(340) |
|
(294) |
- |
(294) |
Gains
(losses) on disposal of fixed assets, investments and
activities |
|
- |
155 |
155 |
|
- |
168 |
168 |
Restructuring costs |
|
- |
(14) |
(14) |
|
- |
(69) |
(69) |
Depreciation and amortization of financed assets |
|
(18) |
- |
(18) |
|
(6) |
- |
(6) |
Depreciation and amortization of right-of-use assets |
|
(365) |
- |
(365) |
|
(332) |
- |
(332) |
Impairment of right-of-use assets |
|
- |
(52) |
(52) |
|
0 |
(9) |
(8) |
Interests
expenses on liabilities related to financed assets |
|
(0) |
0 |
- |
|
(0) |
0 |
- |
Interests expenses on lease liabilities |
|
(29) |
29 |
- |
|
(32) |
32 |
- |
EBITDAaL |
|
3,182 |
7 |
- |
|
3,287 |
115 |
- |
Significant litigation |
|
(39) |
39 |
- |
|
6 |
(6) |
- |
Specific
labor expenses |
|
(52) |
52 |
- |
|
(6) |
6 |
- |
Fixed
assets, investments and business portfolio review |
|
155 |
(155) |
- |
|
168 |
(168) |
- |
Restructuring program costs |
|
(66) |
66 |
- |
|
(78) |
78 |
- |
Acquisition and integration costs |
|
(21) |
21 |
- |
|
(7) |
7 |
- |
Interests
expenses on liabilities related to financed assets |
|
- |
(0) |
(0) |
|
- |
(0) |
(0) |
Interests expenses on lease liabilities |
|
- |
(29) |
(29) |
|
- |
(32) |
(32) |
Appendix 3: Key performance indicators
In thousand, at the end of the period |
|
December 312020 |
|
December 312019 |
Number of convergent customers |
|
11,056 |
|
10,762 |
Number of mobile accesses (excluding MVNOs)
(1) |
|
214,094 |
|
207,211 |
o/w |
Mobile
accesses of convergent customers |
|
19,826 |
|
19,154 |
|
Mobile
only accesses |
|
194,268 |
|
188,057 |
o/w |
Contract
customers |
|
77,368 |
|
74,205 |
|
Prepaid
customers |
|
136,726 |
|
133,006 |
Number of fixed accesses (2) |
|
45,110 |
|
45,439 |
|
Number of fixed retail accesses |
|
29,442 |
|
29,544 |
|
|
Number of fixed broadband accesses |
|
21,680 |
|
20,685 |
|
|
o/w |
Accesses
with very high-speed broadband |
|
9,635 |
|
7,792 |
|
|
|
Accesses
of convergent customers |
|
11,056 |
|
10,762 |
|
|
|
Fixed
only accesses |
|
10,624 |
|
9,923 |
|
|
Number of fixed narrowband accesses |
|
7,762 |
|
8,859 |
|
Number of fixed wholesale accesses |
|
15,667 |
|
15,895 |
Group total accesses (1+2) |
|
259,204 |
|
252,650 |
2019 data is presented on a comparable basis.
Key indicators by country are presented in the
"Orange investors data book Q4 2020", available on www.orange.com,
under Finance/Results/2020:
https://www.orange.com/en/latestconsolidated-results.
Appendix 4: 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 networks4. 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, all changes presented
in this press release are on a comparable basis.
2 €13.8 billion scope at 2019 year-end,
corresponding to Group indirect costs excluding (i) Africa &
Middle East and Mobile Financial Services, and (ii) labor expenses,
other network expenses and IT expenses for Enterprise IT and
integration services.
3 Mobile revenues include mobile services and
mobile equipment sales invoiced to businesses and incoming mobile
traffic from businesses invoiced to other carriers.
4 With the exception of France, where enterprise
solutions and networks are listed under the Enterprise business
segment.
- PR_Orange_FY2020_EN_180221
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