By Francois Giudice, Correspondent France
Orange Group has recorded revenue growth acceleration in Q2 and near stable earnings before interest, taxes, depreciation, amortization and special losses (EBITDAaL), very strong sales momentum across board, material impact on net income from accounting recognition of asset impairments in Spain, all of which allow the Group to confirm its 2023 objectives.
In its 2021 half-year(HY) financial results, just released, the group said its revenue grew by 2.6 per cent in Q2 2021 among:
– sharp rebound in equipment sales and sustained performance in services
– outstanding performance in Africa & Middle East at +14.4 per cent
– Europe excluding Spain +6.1 per cent, decline in Spain limited to -2.7 per cent compared to -7.4 per cent in Q1
– Enterprise accelerating at +2.3 per cent thanks to revenues from IT and Integration services
– France slightly lower at -0.7 per cent
The Group witnessed excellent commercial performance:
– 11.2 million convergent customers
– 10.3 million fiber (FTTH) customers out of 51.8 million connectable households. The FTTH client base rose 28 per cent year on year, driven in particular by France and Poland
– Close to 1 million 5G customers with 5G offers available in six countries
The Group’s EBITDAaL was down slightly by 0.4 per cent, penalized by less co-financing received in France
Operating income was €1,752 million (US$2.08million) at June 30, 2021 compared to +€2,220 million at 30 June 2020 due to goodwill impairments in Spain of €3,702 million euros reflecting the downward revision of the short-term outlook
Consolidated net income was €2,605 million euros
eCAPEX rose sharply: +33.2 per cent in Q2 2021 after a slowdown in investments in Q2 2020. It was +22.8 per cent in the first half, driven by investments in fiber and in Africa & Middle East, in line with the objectives for 2021
Organic cash flow from telecom activities of €840 million in H1 2021 (up €585 million compared to H1 2020 on a historical basis) despite the strong increase in eCAPEX, tied to the normalization of WCR penalized in 2020 by support measures for partners.
Outlook for 2021
The Group is maintaining its financial objectives for 2021 as announced on 18 February 2021, namely:
stable but negative EBITDAaL
eCAPEX of €7.6-€7.7 billion euros
organic cash flow from telecom activities of over €2.2 billion euros
net debt/EBITDAaL ratio for telecom activities remaining at around 2x in the medium term.
As a reminder, these targets take into account the allocation of the €2.2 billion tax refund received at the end of 2020 after the French Council of State found 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.
Dividend
Orange will make an interim dividend payment of €0.30 in cash on December 15, 2021.
In respect of the 2021 financial year, a dividend of €0.70 per share will be proposed to the 2022 Shareholders’ Meeting.
Commenting on the publication of these results, Chairman and Chief Executive Officer of the Orange group, Stéphane Richard said: “During the second quarter the Orange Group’s growth accelerated, driven in particular by our outstanding performance in Africa and Middle East. In France our consumer market commercial results bear witness to our resilience and have contributed to the near stabilisation of EBITDAal, in a context of the accelerated transformation of our business model from copper to fiber.
The Enterprise market, whose transformation towards IT & integration services continues, is also experiencing strong momentum thanks to revenues from Cybersecurity, Cloud and Digital & Data. In Spain, where the overall context has worsened obliging us to book a significant impairment to the value of our assets, the new management team has set in motion its strategy to reposition our offers and the commercial performance is positive.
In line with our Engage 2025 strategic plan, the Group’s vision remains firmly focused on creating long-term value for all of our stakeholders. Our growth engines – Africa and the Middle East, Europe, the B2B market, cyberdefence, banking and our infrastructure – all have good momentum and we’re beginning to gather the fruits of our investments. This allows us to reiterate with confidence our objectives for 2023.”
On July 28, 2021, Orange SA’s Board of Directors reviewed the consolidated half-year financial statements and management report for the period ended 30 June 2021. In accordance with auditing standards, the Group’s auditors conducted a limited review of the half-year accounts and verified the information given in the half-year management report.
