Orange Ups H1 RevenuesOrange Ups H1 Revenues

LONDON and PARIS -- Orange SA today announced strong operating results for the half year to 30 June 2003. On a pro forma basis, Orange SA grew revenues by 9.4% to €8.6bn and improved operating income before depreciation and amortisation margins by 8.9 percentage points.

This strong operating performance led to a doubling of income before tax, goodwill amortisation, minority interests and exceptional items to €1.7bn, which combined with the tax benefit of the strategic reorganisation of the Group, resulted in a net income of €3.3 billionand a 32% reduction in net debt from year end 2002. Orange has now established a sound financial and operating platform upon which to execute its strategy announced in June, and is announcing new financial objectives for year end 2003.

Clearly yearly to date performance has been above expectations. We are confident this is to continue and as a result we are raising our guidance. This new guidance is reflective of potentially greater competition in the fourth quarter in the UK.

• Full year 2003 Operating Income Before Depreciation and Amortisation target increased to at least €6.3 billion

• Full year 2003 capital expenditure (excluding licences) guidance of €2.4 billion confirmed

• Full year 2003 target net debt (excluding vendor financing) below €1.3 billion

Commenting, Sol Trujillo, Chief Executive Officer, said: "The Orange strategy of becoming customer intimate is already yielding results that are ahead of expectations. During the first half of the year, we were able to grow revenues and substantially improve margins not withstanding the detrimental effects of foreign exchange rates. Our strong operating performance was combined with rigorous financial discipline to deliver our first positive net income and substantially reduce debt. We are confident we can maintain our momentum not just this year, but also for the years ahead.

"The growth in our pre-SACS & SRCs operating income before depreciation and amortisation margin demonstrates that we are already building operating leverage as a single Group at the top of our income statement. By continuing to focus our investments in our 45 million customer base and network, we aim to further build operating leverage and deliver top-line revenue and margin growth. We are already seeing the benefits of our customer acquisition and retention programmes in France and the UK where customer growth and upgrade figures are very encouraging. We are expecting competition to intensify in the UK in the run-up to Christmas and are fully prepared to meet this challenge.

Wilfried Verstraete, Chief Financial Officer, said: "Orange’s focus on the fundamentals has produced strong operating and financial results. In H1 2003, we have strengthened all our key operating metrics and financial ratios and reduced net debt by 32%. We are raising targets for year end 2003 and entering into a new investment phase to continue to deliver earnings growth."

Orange SA