France Telecom Reports Q1

  • revenues grow 0.4% on a comparable basis despite deteriorating economic conditions
  • customer base grows 6.3% year-on-year
  • cash flow increases on favourable cost performance
  • guidance of 8 billion euros in organic cash flow for 2009 confirmed
  • total number of customers up 6.3% year-on-year to 183.5 million at 31 March 2009, driven by:
    • mobile services: 122.9 million customers at 31 March 2009, a 9.5% increase year-on-year. The number of contract customers continued to grow rapidly, up 9.0% in one year. The number of 3G broadband customers was up nearly 80% in one year, with 20.6 million customers at 31 March 2009
    • ADSL broadband services: 13.2 million customers at 31 March 2009, an increase of 8.7%. Multiservice contracts continued to grow rapidly, particularly digital TV (ADSL and satellite), with 2.5 million customers at 31 March 2009, a year-on-year increase of 75%
  • first quarter 2009 revenues rose 0.4% on a comparable basis. As announced, growth in revenues was greater than average GDP growth in the Group's geographic footprint, estimated at -1.7% for the quarter
  • strong performance in France with revenues up 2.1%, in Africa and Middle East (+5%) and in Enterprise services (+0.4%)
  • United Kingdom trend unchanged from fourth quarter of 2008 (-0.6%); as anticipated, revenues dropped in Spain (-4.1%) and in Poland (-4.7%)
  • EBITDA was down 4.4% on a comparable basis, at 4.3 billion euros. The EBITDA margin dropped 1.7 points from the first quarter of 2008 mainly due to increasing content purchases following the launch of Orange TV channels in France in the second half of 2008
  • Capex was 1.23 billion euros : the Capex-to-revenue ratio was down slightly on a comparable basis, at 9.7%, versus 10.4% in the first quarter of 2008
  • EDITDA-Capex was 3.07 billion euros, up 1.1% on a comparable basis
  • organic cash flow target for 2009 remains 8 billion euros, the same level as in 2008, with action plans initiated to further adapt the Group’s offers and cost structure to changes in the economic environment

    Commenting on the results for the first quarter of 2009, Didier Lombard, France Telecom Chairman and Chief Executive Officer, stated:

    “In an economic environment that continues to weaken, especially outside of France, the Group has been able expand its customer base in the first quarter of the year to more than 183 million customers, with the number of mobile customers increasing more than 9% to almost 123 million and broadband services rising nearly 9% to 13 million ADSL-equipped households. Revenue was up 0.4%, two points above average GDP growth in the countries in which we operate. Our performance in France, Africa and the Middle East as well as in Enterprise services is particularly noteworthy.

    EBITDA came to 4.3 billion euros, reflecting the full impact of content purchases linked to the development of Orange TV channels in France, which continue to grow with 363,000 subscribers at the end of the period.

    The Group is able to confirm its guidance of 8 billion euros in organic cash flow for 2009, despite the pressures on consumer and business behaviour resulting from the overall economic conditions. Indeed, the Group is pursuing numerous action plans launched as part of the Orange 2012 programme and has mobilised all employees in the areas of sales & marketing and cost reduction. It is monitoring capital expenditures for possible adjustments in line with business performance on a country-by-country basis.”

    Orange (NYSE: FTE)

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