Orange Press Release : Third Quarter 2021 Results
Source: GlobeNewswire
Press release
Paris, 26 October 2021
Third quarter 2021 financial information at 30 September 2021
Orange delivers a sustained commercial performance and confirms all of its 2021 objectives
| In millions of euros | 3Q 2021 | change comparable basis | change historical basis | 9M 2021 | change comparable basis | change historical basis | ||
| Revenues | 10,508 | (0.4)% | (0.7)% | 31,374 | 0.9 % | 0.1 % | ||
| EBITDAaL | 3,550 | (0.7)% | (1.0)% | 9,387 | (0.5)% | (1.2)% | ||
| eCAPEX (excluding licenses) | 1,709 | (1.0)% | (1.2)% | 5,554 | 14.3 % | 13.7 % | ||
| EBITDAaL - eCAPEX | 1,841 | (0.4)% | (0.7)% | 3,833 | (16.2)% | (16.9)% |
- Continued good commercial performances:
- 11.3 million convergent customers
- 10.8 million Fiber (FTTH) customers out of 53.8 million connectable households. The FTTH client base rose 25.5% year on year, driven in particular by France and Poland
- Revenues down slightly (-0.4%)1 in Q3 2021.
- They rose 1.3% excluding co-financing:
- strong performance in retail services2 with an acceleration in revenue growth from convergence (+2.9%), mobile (+5.6%) and fixed broadband (+5.2%)
- France recorded a 4.1% decline, but was virtually stable excluding co-financing thanks to retail services where growth accelerated (+3.7% excluding PSTN)
- Europe excluding Spain rose 2.0% with retail services growth accelerating (+5.7%). Spain was down 4.4% despite a slight pick-up in retail services
- Africa & Middle East: another very strong performance at +12.0%
- Enterprise declined (-1.4%) due to a decrease in fixed services (-5.2%) which was not offset by the growth in IT & Integration services (+2.1%) and mobile services (+3.5%)
- International Carriers & Shared Services grew 10.8%
- strong performance in retail services2 with an acceleration in revenue growth from convergence (+2.9%), mobile (+5.6%) and fixed broadband (+5.2%)
- EBITDAaL decline was limited to 0.7%, impacted by the lower level of co-financing received in France. EBITDAaL grew 4.5% excluding co-financing.
- eCAPEX was down slightly: -1.0% in Q3 2021 after a strong increase in the first half due to investments in Fiber and in Africa & Middle East, in line with the objectives for 2021.
The Group is maintaining its financial objectives for 2021after allocation of the tax refund3:
- stable but negative EBITDAaL,
- eCAPEX of 7.6 to 7.7 billion euros,
- organic cash flow from telecoms activities of over 2.2 billion euros
- net debt/EBITDAaL ratio for telecom activities remaining at around 2x in the medium term.
Dividend
Orange will make an interim dividend payment for 2021 of 0.30 euros in cash on December 15, 20214. In respect of the 2021 financial year, a dividend of 0.70 euros per share will be proposed to the 2022 Shareholders’ Meeting.
Commenting on the publication of these results, Stéphane Richard, Chairman and Chief Executive Officer of the Orange group, said:
"Orange’s sustained commercial performance in the third quarter, marked by solid momentum in retail services across all the countries where we are present, allows us to confirm all of our financial commitments. In an economy still showing the effects of the health crisis, including the acceleration of the digital transformation, our customers' appetite for very high-speed access is evidenced in their take up of fiber and 5G, and of our convergent offers.
In France, the good momentum continued with growth of 1.2 points in retail services. Orange fiber now has 5.6 million customers in France, an increase of 36% year on year. However, as yet our accounts reflect little of this promising trend owing to the decline in co-financing received from other operators on our fiber network in 2021 compared to 2020.
In Spain, while the market remains very fragmented and impacted by the health crisis, the revenue trend in retail services is improving quarter by quarter, further supported by positive commercial results, with customer gains across all segments. The results are therefore encouraging and while much remains to be done, we are fully engaged in the execution of our turnaround strategy.
The other European countries continue to make a positive contribution to the Group’s results, with a 5.7% growth in retail services, due both to our convergence strategy and the enthusiasm seen for fiber, where Orange is the stand-out European leader. The acquisition of TKR in Romania will also strengthen our leadership position in convergence, providing us with a quality fixed network with which to pursue our strategy.
In Africa, the Group's main growth engine, our revenues rose strongly, up 12%, with all countries contributing, driven in particular by mobile data, which is expanding fast. Orange now has more than 40 million 4G customers, a 33.6% increase compared to last year."
Comments on Group key figures
Revenues
Orange group revenues were 10.5 billion euros in the third quarter of 2021, down 0.4% year on year on a comparable basis. This slight decline was mainly due to the lower level of co-financing of the Fiber network received in France.
Excluding co-financing, revenues would have risen by 1.3%, driven by retail services5, while the growth in equipment sales slowed sharply (+2.1% after +27.5% increase in the second quarter) due to the catch-up effect of the previous quarter.
Customer base growth
There were 11.3 million convergent customers Group-wide at September 30, 2021, up 3.1% year on year.
Mobile services had 221.8 million lines at September 30, 2021, up 4.7% year on year, including 80.1 million contracts, an increase of 5.1% compared to a year ago.
Fixed services had 44.7 million access lines at September 30, 2021 (down 1.0% year on year), of which 11.3 million were very high-speed broadband, which continues to grow strongly (+25.3% year on year with nearly 528,000 net additions during the quarter). Fixed narrowband access lines were down 13.4% year on year.
Mobile financial services had nearly 1.6 million customers in Europe and 0.6 million customers in Africa.
EBITDAaL
Group EBITDAaL was 3.55 billion euros in the third quarter of 2021, down 0.7%. Excluding co-financing, this would have increased by 4.5%, driven by the good commercial performance and decreased costs.
Over the first nine months of the year, the decline in EBITDAaL was limited to -0.5%.
EBITDAaL from telecom activities was 3.58 billion euros in the third quarter, down 0.8%.
eCAPEX
Group eCAPEX was 1.7 billion euros in the third quarter, a slight 1.0% decline compared to the third quarter of 2020. It was nevertheless up by 14.3% over the first nine months of the year, due to the acceleration of investment in the networks, in particular in Fiber in France and in Africa. This remains in line with the Group’s objectives for the full-year 2021.
At September 30, 2021, Orange had 53.8 million households with FTTH connectivity worldwide (up 20.8% year on year). The number of connectable households in France rose 31.4% at 27.4 million.
Changes in asset portfolio
On September 30, 2021, Orange Romania announced that it had completed its acquisition of a 54% controlling stake in the operator Telekom Romania Communications (TKR) for an enterprise value of 497 million euros. TKR, Romania’s second largest fixed telecoms operator, had revenues of 633 million euros in 2020.
On August 31, 2021, Orange Polska and APG Asset Management (APG) completed the creation of their 50-50 joint venture FiberCo in Poland, which represents 2.4 million lines including an additional 1.7 million FTTH lines to be deployed over the next five years.
__________________________________________________________________________________
The Board of Directors of Orange SA met on October 25, 2021 to review the consolidated financial results for the period ended September 30, 2021.
More detailed information on the Group’s financial results and performance indicators is available on the Orange website www.orange.com/en/consolidated-results.
Review by operating segment
France
| In millions of euros | 3Q 2021 | change comparable basis | change historical basis | 9M 2021 | change comparable basis | change historical basis | ||
| Revenues | 4,483 | (4.1)% | (4.5)% | 13,433 | (1.7)% | (2.1)% | ||
| Retail services | 2,723 | 1.2 % | 1.2 % | 8,106 | 0.5 % | 0.5 % | ||
| Convergence | 1,180 | 3.8 % | 3.8 % | 3,497 | 2.7 % | 2.7 % | ||
| Mobile Only | 577 | 2.8 % | 2.3 % | 1,699 | 1.1 % | 0.7 % | ||
| Fixed Only | 966 | (2.7)% | (2.4)% | 2,910 | (2.4)% | (2.2)% | ||
| Wholesale | 1,291 | (15.4)% | (16.3)% | 4,011 | (8.1)% | (9.1)% | ||
| Equipment sales | 300 | (0.4)% | (0.4)% | 823 | 8.4 % | 8.4 % | ||
| Other revenues | 169 | 7.3 % | 7.6 % | 494 | 3.6 % | 3.9 % |
Continuing solid commercial performances
Orange France’s revenues were impacted by the lower level of co-financing received compared to the third quarter of 2020. Excluding co-financing, revenues would be virtually stable (-0.4%).
Retail services showed a continued acceleration in growth (+1.2% vs. +0.4% in the second quarter and -0.2% in the first quarter). Excluding PSTN, growth would be 3.7%, offsetting the effect of the structural decline of copper.
Equipment sales recorded a slight decline after the very strong growth in the second quarter (+23.4%) which had benefited from the reopening of stores compared to 2020.
Revenues from wholesale services were down sharply due to the major co-financing of the Fiber network received in the third quarter of 2020.
Orange France maintained its strong sales momentum despite continued intense competition. Mobile contracts (excluding M2M) continued their excellent performance with +121,000 net sales over the quarter driven by the Orange-branded convergent offers. Mobile ARPO continued to improve (+0.3 euros year on year) notably due to the effect of the gradual return of roaming. The mobile churn rate of 11.0% is at a particularly low level.
The solid sales trend was also confirmed in fixed broadband with +80,000 net sales in the third quarter, thanks to the continued excellent results in Fiber (+343,000 net sales) reinforcing our leadership position. Still more than half of the new Fiber customers are new customers for the Group.
Convergent ARPO increased by 1.1 euros year on year, an acceleration compared to the second quarter, thanks in particular to our "more for more" actions.
Europe
| In millions of euros | 3Q 2021 | change comparable basis | change historical basis | 9M 2021 | change comparable basis | change historical basis | ||
| Revenues | 2,583 | (1.1)% | (2.0)% | 7,747 | (0.6)% | (1.5)% | ||
| Retail services | 1,741 | (1.0)% | (1.7)% | 5,192 | (2.5)% | (3.3)% | ||
| Convergence | 679 | 1.2 % | 0.8 % | 2,016 | (1.3)% | (1.7)% | ||
| Mobile Only | 732 | (3.8)% | (4.5)% | 2,166 | (4.8)% | (5.5)% | ||
| Fixed Only | 251 | (5.7)% | (6.9)% | 773 | (4.1)% | (5.3)% | ||
| IT & Integration services | 79 | 31.5 % | 29.0 % | 237 | 15.9 % | 13.6 % | ||
| Wholesale | 452 | (5.0)% | (5.7)% | 1,378 | (3.0)% | (3.8)% | ||
| Equipment sales | 347 | 0.2 % | (2.3)% | 1,065 | 12.7 % | 10.2 % | ||
| Other revenues | 42 | 42.3 % | 39.6 % | 112 | 13.3 % | 11.5 % |
Strong growth in retail services6, excluding Spain which recorded a good commercial performance while continuing its transformation
Revenues from Europe (that groups Spain, Poland, Belgium and Luxembourg, Romania, Slovakia and Moldova) were down 1.1% in the third quarter compared to 2020. These were principally impacted by the year-on-year decline in lower-margin activities, in particular fixed interconnection traffic in Spain and Poland, and the slowdown in equipment sales compared with the second quarter, which had benefited from a catch-up effect following the end of the lockdown.
The trend in retail services is improving, despite recording a slight decline (-1.0%) due to Spain, thanks to the accelerated growth in Other European countries (+5.7%).
Europe recorded a solid commercial performance in the third quarter with +188,000 net mobile contract sales excluding M2M and +66,000 net fixed broadband sales, of which +122,000 were net Fiber sales.
The performance of fixed broadband was driven by all countries, which all posted positive net sales, with Spain buoyed by a rebound in Fiber and a lower rate of churn year on year.
In Spain, revenues declined 4.4% due to a decrease in fixed interconnection traffic and a slowdown of equipment sales compared to the second quarter, although the trend in retail services shows a slight improvement (-7.9% vs. -8.3% in the second quarter and -10.2% in the first quarter).
Spain experienced strong sales momentum in the third quarter, despite the back-to-school promotional period, with +8,000 net sales of convergent offers, +76,000 net sales of mobile contracts excluding M2M and +10,000 net sales of fixed broadband offers (including +43,000 net FTTH sales) while reducing the churn rate in all these segments.
Following the successful migration of the Republica Movil customers to Simyo, Orange Spain continued its operational transformation by starting the migration of Amena’s customers to the Orange brand, which will enable it to reduce its portfolio from five to three brands.
Africa & Middle East
| In millions of euros | 3Q 2021 | change comparable basis | change historical basis | 9M 2021 | change comparable basis | change historical basis | ||
| Revenues | 1,652 | 12.0 % | 12.0 % | 4,694 | 11.2 % | 8.7 % | ||
| Retail services | 1,450 | 15.0 % | 14.9 % | 4,110 | 13.6 % | 10.9 % | ||
| Mobile Only | 1,271 | 14.5 % | 13.9 % | 3,600 | 12.8 % | 9.8 % | ||
| Fixed Only | 168 | 16.1 % | 19.7 % | 486 | 18.5 % | 18.5 % | ||
| IT & Integration services | 11 | 82.2 % | 86.9 % | 24 | 26.7 % | 46.5 % | ||
| Wholesale | 166 | (6.3)% | (6.0)% | 476 | (5.9)% | (8.2)% | ||
| Equipment sales | 26 | 13.2 % | 22.0 % | 81 | 23.2 % | 30.0 % | ||
| Other revenues | 9 | (32.5)% | (33.2)% | 28 | (13.3)% | (16.3)% |
Double-digit growth maintained
Africa & Middle East continued to post very strong revenue growth, thanks to the performance of retail services.
The main driver of this growth is Mobile, buoyed by data which is benefiting from a continual increase in the 4G customer base (+33.6% year on year). For its part, Orange Money, which is facing a tougher competitive environment, has an active customer base of 22.6 million, up 12.5% over one year.
Fixed broadband also continued to have excellent momentum, with a customer base that has increased 23.4% year on year.
Likewise, B2B services posted spectacular growth, even though this still only contributes slightly to total revenues.
All countries recorded growth in the third quarter, ten of which delivered double-digit growth.
Enterprise
| In millions of euros | 3Q 2021 | change comparable basis | change historical basis | 9M 2021 | change comparable basis | change historical basis | ||
| Revenues | 1,864 | (1.4)% | (1.8)% | 5,704 | 0.4 % | (0.9)% | ||
| Fixed Only | 899 | (5.2)% | (5.6)% | 2,733 | (4.7)% | (6.1)% | ||
| Voice | 268 | (11.3)% | (11.5)% | 837 | (9.8)% | (10.5)% | ||
| Data | 631 | (2.3)% | (2.8)% | 1,896 | (2.3)% | (4.0)% | ||
| IT & Integration services | 745 | 2.1 % | 1.6 % | 2,311 | 6.4 % | 4.6 % | ||
| Mobile7 | 220 | 3.5 % | 3.5 % | 660 | 3.5 % | 3.4 % | ||
| Mobile Only | 154 | (3.1)% | (3.4)% | 472 | (2.1)% | (2.9)% | ||
| Wholesale | 10 | (8.1)% | (8.1)% | 31 | (2.6)% | (2.6)% | ||
| Equipment sales | 56 | 31.1 % | 32.6 % | 157 | 26.9 % | 31.0 % |
Revenues down, due in particular to the sharp drop in voice services
Enterprise revenues declined in the third quarter, although still recorded growth over the first nine months of the year.
This was mainly the result of the continuing decline of voice which was not offset this quarter by growth in Mobile and IT & Integration services. The transformation in customer usage, which is shifting ever more to fully digital solutions, has accelerated the decline of voice compared to its historical trend with voice now representing just 14% of total revenues.
Growth in IT & Integration services slowed but remained positive thanks to Cybersecurity (+14%) and Cloud and Digital & Data activities (both up more than 8%).
International Carriers & Shared Services
| In millions of euros | 3Q 2021 | change comparable basis | change historical basis | 9M 2021 | change comparable basis | change historical basis | ||
| Revenues | 392 | 10.8 % | 11.3 % | 1,135 | 4.9 % | 5.0 % | ||
| Wholesale | 270 | 7.3 % | 8.1 % | 792 | 1.0 % | 1.6 % | ||
| Other revenues | 122 | 19.6 % | 19.1 % | 343 | 14.9 % | 13.9 % |
Revenue from International Carriers & Shared Services grew 10.8%.
Services to international carriers, whose activities were severely impacted by the health crisis in 2020, posted strong growth thanks to the partial lifting of restrictions on international travel. They also benefited from the good performance of voice and messaging activities.
Other revenue growth accelerated thanks to Orange Marine, driven by its new Survey activities and the strong revival in cable laying, as in the second quarter.
Mobile Financial Services
Mobile financial services now have 1.6 million customers in Europe and 0.6 million customers in Africa.
In France, the share of new customer relationships represented by paying offers continued to grow, reaching 97% in the third quarter of 2021 compared with 88% in the same quarter of 2020.
Calendar of upcoming events
17 February 2022 - Publication of Full-Year 2021 results
Contacts
| press: Tom Wright tom.wright@orange.com ; +33 6 78 91 35 11 | financial communication: +33 1 44 44 04 32 (analysts and investors) Patrice Lambert-de Diesbach p.lambert@orange.com Samuel Castelo samuel.castelo@orange.com Aurélia Roussel aurelia.roussel@orange.com Andrei Dragolici andrei.dragolici@orange.com Louise Racine louise.racine@orange.com Hong Hai Vuong honghai.vuong@orange.com individual shareholders: 0 800 05 10 10 |
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. More detailed information on the potential risks that could affect our financial results is included in the Universal Registration Document filed on 17 March 2021 with the French Financial Markets Authority (AMF) and in the annual report (Form 20-F) filed on 18 March 2021 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
Quarterly data
| In millions of euros | 3Q 2021 | 3Q 2020 comparable basis | 3Q 2020 historical basis | change comparable basis | change historical basis | |
| Revenues | 10,508 | 10,551 | 10,584 | (0.4)% | (0.7)% | |
| France | 4,483 | 4,676 | 4,693 | (4.1)% | (4.5)% | |
| Europe | 2,583 | 2,610 | 2,636 | (1.1)% | (2.0)% | |
| Africa & Middle East | 1,652 | 1,474 | 1,474 | 12.0 % | 12.0 % | |
| Enterprise | 1,864 | 1,891 | 1,898 | (1.4)% | (1.8)% | |
| International Carriers & Shared Services | 392 | 353 | 352 | 10.8 % | 11.3 % | |
| Intra-Group eliminations | (466) | (453) | (468) | |||
| EBITDAaL (1) | 3,550 | 3,576 | 3,584 | (0.7)% | (1.0)% | |
| o/w Telecom activities | 3,579 | 3,607 | 3,613 | (0.8)% | (1.0)% | |
| As % of revenues | 34.1 % | 34.2 % | 34.1 % | (0.1 pt) | (0.1 pt) | |
| o/w Mobile Financial Services | (29) | (31) | (29) | 7.8 % | 2.2 % | |
| eCAPEX | 1,709 | 1,727 | 1,730 | (1.0)% | (1.2)% | |
| o/w Telecom activities | 1,707 | 1,718 | 1,723 | (0.6)% | (0.9)% | |
| as % of revenues | 16.2 % | 16.3 % | 16.3 % | (0.0 pt) | (0.0 pt) | |
| o/w Mobile Financial Services | 1 | 8 | 7 | (82.3)% | (79.6)% | |
| EBITDAaL - eCAPEX | 1,841 | 1,849 | 1,854 | (0.4)% | (0.7)% |
(1) EBITDAaL adjustments are described in Appendix 2.
30 September data
| In millions of euros | 9M 2021 | 9M 2020 comparable basis | 9M 2020 historical basis | change comparable basis | change historical basis | |
| Revenues | 31,374 | 31,104 | 31,353 | 0.9 % | 0.1 % | |
| France | 13,433 | 13,667 | 13,717 | (1.7)% | (2.1)% | |
| Europe | 7,747 | 7,791 | 7,864 | (0.6)% | (1.5)% | |
| Africa & Middle East | 4,694 | 4,222 | 4,320 | 11.2 % | 8.7 % | |
| Enterprise | 5,704 | 5,679 | 5,757 | 0.4 % | (0.9)% | |
| International Carriers & Shared Services | 1,135 | 1,082 | 1,080 | 4.9 % | 5.0 % | |
| Intra-Group eliminations | (1,339) | (1,338) | (1,384) | |||
| EBITDAaL (1) | 9,387 | 9,434 | 9,498 | (0.5)% | (1.2)% | |
| o/w Telecom activities | 9,471 | 9,540 | 9,598 | (0.7)% | (1.3)% | |
| As % of revenues | 30.2 % | 30.7 % | 30.6 % | (0.5 pt) | (0.4 pt) | |
| o/w Mobile Financial Services | (85) | (106) | (101) | 19.8 % | 16.1 % | |
| eCAPEX | 5,554 | 4,858 | 4,886 | 14.3 % | 13.7 % | |
| o/w Telecom activities | 5,540 | 4,834 | 4,865 | 14.6 % | 13.9 % | |
| as % of revenues | 17.7 % | 15.5 % | 15.5 % | 2.1 pt | 2.1 pt | |
| o/w Mobile Financial Services | 14 | 24 | 21 | (40.8)% | (33.1)% | |
| EBITDAaL - eCAPEX | 3,833 | 4,577 | 4,612 | (16.2)% | (16.9)% |
(1) EBITDAaL adjustments are described in Appendix 2.
Appendix 2: adjusted data to income statement items
Quarterly data
| 3Q 2021 | 3Q 2020 historical basis | |||||||
| In millions of euros | Adjusted data | Presentation adjustments | Income statement | Adjusted data | Presentation adjustments | Income statement | ||
| Revenues | 10,508 | - | 10,508 | 10,584 | - | 10,584 | ||
| External purchases | (4,298) | 0 | (4,298) | (4,261) | - | (4,261) | ||
| Other operating income | 165 | - | 165 | 132 | - | 132 | ||
| Other operating expense | (91) | (5) | (96) | (112) | (7) | (119) | ||
| Labor expenses | (1,982) | 12 | (1,970) | (1,991) | 67 | (1,924) | ||
| Operating taxes and levies | (339) | - | (339) | (352) | - | (352) | ||
| Gains (losses) on disposal of fixed assets, investments and activities | na | 362 | 362 | na | 14 | 14 | ||
| Restructuring costs | na | (40) | (40) | na | 2 | 2 | ||
| Depreciation and amortization of financed assets | (21) | - | (21) | (15) | - | (15) | ||
| Depreciation and amortization of right-of-use assets | (363) | - | (363) | (367) | - | (367) | ||
| Impairment of right-of-use assets | - | - | - | - | - | - | ||
| Interest expenses on liabilities related to financed assets | (0) | 0 | na | (0) | 0 | na | ||
| Interest expenses on lease liabilities | (28) | 28 | na | (33) | 33 | na | ||
| EBITDAaL | 3,550 | 359 | na | 3,584 | 109 | na | ||
| Significant litigation | - | - | na | (3) | 3 | na | ||
| Specific labor expenses | 21 | (21) | na | 68 | (68) | na | ||
| Fixed assets, investments and business portfolio review | 362 | (362) | na | 14 | (14) | na | ||
| Restructuring program costs | (40) | 40 | na | 2 | (2) | na | ||
| Acquisition and integration costs | (13) | 13 | na | (6) | 6 | na | ||
| Interest expenses on liabilities related to financed assets | na | (0) | (0) | na | (0) | (0) | ||
| Interest expenses on lease liabilities | na | (28) | (28) | na | (33) | (33) | ||
30 September data
| 9M 2021 | 9M 2020 historical basis | |||||||
| In millions of euros | Adjusted data | Presentation adjustment, | Income statement | Adjusted data | Presentation adjustments | Income statement | ||
| Revenues | 31,374 | - | 31,374 | 31,353 | - | 31,353 | ||
| External purchases | (13,031) | (3) | (13,034) | (12,808) | - | (12,808) | ||
| Other operating income | 487 | - | 487 | 403 | - | 403 | ||
| Other operating expense | (318) | (73) | (391) | (387) | (181) | (568) | ||
| Labor expenses | (6,355) | (36) | (6,391) | (6,333) | 33 | (6,300) | ||
| Operating taxes and levies | (1,527) | (31) | (1,558) | (1,584) | - | (1,584) | ||
| Gains (losses) on disposal of fixed assets, investments and activities | na | 374 | 374 | na | 73 | 73 | ||
| Restructuring costs | na | (284) | (284) | na | (11) | (11) | ||
| Depreciation and amortization of financed assets | (62) | - | (62) | (37) | - | (37) | ||
| Depreciation and amortization of right-of-use assets | (1,093) | - | (1,093) | (1,019) | - | (1,019) | ||
| Impairment of right-of-use assets | - | (60) | (60) | - | (6) | (6) | ||
| Interest expenses on liabilities related to financed assets | (1) | 1 | na | (1) | 1 | na | ||
| Interest expenses on lease liabilities | (86) | 86 | na | (91) | 91 | na | ||
| EBITDAaL | 9,387 | (26) | na | 9,498 | (0) | na | ||
| Significant litigation | (89) | 89 | na | (172) | 172 | na | ||
| Specific labor expenses | (21) | 21 | na | 40 | (40) | na | ||
| Fixed assets, investments and business portfolio review | 374 | (374) | na | 73 | (73) | na | ||
| Restructuring program costs | (344) | 344 | na | (17) | 17 | na | ||
| Acquisition and integration costs | (34) | 34 | na | (16) | 16 | na | ||
| Interest expenses on liabilities related to financed assets | na | (1) | (1) | na | (1) | (1) | ||
| Interest expenses on lease liabilities | na | (86) | (86) | na | (91) | (91) | ||
Appendix 3: economic CAPEX to investments in property, plant and intangible investment
| In millions of euros | 3Q 2021 | 3Q 2020 historical basis | 9M 2021 | 9M 2020 historical basis | ||
| eCAPEX | 1,709 | 1,730 | 5,554 | 4,886 | ||
| Elimination of proceeds from sales of property, plant and equipment and intangible assets | 51 | 68 | 99 | 266 | ||
| Telecommunication licenses | 420 | 5 | 713 | 47 | ||
| Financed assets | 2 | 56 | 25 | 173 | ||
| Investments in property, plant and equipment and intangible assets | 2,182 | 1,860 | 6,391 | 5,372 |
Appendix 4: key performance indicators
| In thousand, at the end of the period | September 30 2021 | September 30 2020 | |||||
| Number of convergent customers | 11,256 | 10,914 | |||||
| Number of mobile accesses (excluding MVNOs) (1) | 221,788 | 211,856 | |||||
| o/w | Mobile accesses of convergent customers | 20,371 | 19,484 | ||||
| Mobile only accesses | 201,417 | 192,371 | |||||
| o/w | Contract customers | 80,115 | 76,252 | ||||
| Prepaid customers | 141,673 | 135,604 | |||||
| Number of fixed accesses (2) | 44,674 | 45,128 | |||||
| Number of fixed retail accesses | 29,301 | 29,357 | |||||
| Number of fixed broadband accesses | 22,323 | 21,301 | |||||
| o/w | Accesses with very high-speed broadband | 11,270 | 8,997 | ||||
| Accesses of convergent customers | 11,256 | 10,914 | |||||
| Fixed only accesses | 11,067 | 10,387 | |||||
| Number of fixed narrowband accesses | 6,978 | 8,055 | |||||
| Number of fixed wholesale accesses | 15,373 | 15,771 | |||||
| Group total accesses (1+2) | 266,462 | 256,983 | |||||
2020 data is presented on a comparable basis.
Key indicators by country are presented in the "Orange investors data book Q3 2021", available on www.orange.com, under Finance/Results www.orange.com/en/latest-consolidated-results
Appendix 5: 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.
Other revenue: other revenue includes equipment sales to dealers and brokers, revenue from portals, on‑line advertising revenue and corporate transversal business line activities of the Group, and other miscellaneous revenue.
Retail services: aggregation of Convergent services, Mobile only services, Fixed only services and IT & integration services. Concerns only France, Europe and Africa & Middle East operating segments.
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 networks (with the exception of France, where enterprise solutions and networks are listed under the Enterprise segment). For the Enterprise segment, fixed-only service revenues include sales of network equipment related to the operation of voice and data services. 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, the changes presented in this press release are on a comparable basis.
2 Includes B2C and B2B services. See the definition in Appendix 5: glossary.
3 These targets take into account the allocation of the 2.2 billion-euro tax refund received at the end of 2020 after the French Council of State ruled in the Group’s favor in a long-running tax dispute, which is intended to generate long-term added value for the Group but will have an impact on objectives in the short term.
4 The ex-dividend date is set for December 13.
5 Includes B2C and B2B services. See the definition in Appendix 5: glossary.
6 Includes B2C and B2B services. See the definition in Appendix 5: glossary.
7 Mobile revenues include mobile services and mobile equipment sales invoiced to businesses and incoming mobile traffic from businesses invoiced to other carriers.
Attachment
