France Telecom Reports Q3

Company's revenue is up 3.4%

October 31, 2008

3 Min Read

PARIS -- results for the third quarter 2008 permit confirmation of objectives for the full year

  • revenue up 3.4% on a comparable basis to 39.9 billion euros over the first nine months of 2008. Third-quarter 2008 revenue grew 2.3% on a comparable basis and reflects a solid performance in the context of the difficult general economic environment. Other than Spain and some emerging markets, the Group saw no impact on its operations from the slowdown in the economy. Activity remains focused in the Group’s principal areas of business:

    • solid growth in mobile services (+5.1% on a comparable basis) with a steady increase in data services

    • continuing growth of ADSL in Europe with accelerated growth in Voice over IP and digital TV in France

    • continued growth in the Enterprise segment (+1.2% on a comparable basis) with growth in business services that outperformed the market



  • stability in gross operating margin rate for the first nine months of 2008 at 37.1% of revenue on a comparable basis, in line with the Group’s objectives for the year

    • as announced at the end of July and taking into account factors specific to France (content acquisition, handset subsidies, the impact of regulation), the third-quarter GOM rate was 0.6 points less than in Q3 2007 on a comparable basis

    • the objective to stabilise the GOM rate in 2008 is confirmed



  • the CAPEX to revenue ratio of 11.6% in the first nine months of 2008 is in line with the objective of about 13% for the year

  • Group net debt remained stable compared to 30 June 2008 after payment of the interim ordinary dividend on 11 September

    • debt refinancing for 2008, completed for the most part in the first half, is being carried out in favourable conditions considering the solid financial structure

    • the Group had a liquidity position of 12.1 billion euros at 30 September 2008

  • confirmation of the 2008 objective to generate an organic cash flow greater than 7.8 billion euros

    Commenting on the third quarter results, Didier Lombard, France Telecom Chairman and Chief Executive Officer, stated: "With third-quarter revenue growth of 2.3%, the Group has for the fourth consecutive quarter maintained a level of activity that outperformed the estimated average GDP across the Group's worldwide footprint.

    In France, thanks to our strong focus on commercial activities, our mobile sales have increased by around 6% with almost 400,000 additional subscribers, while in ADSL services we have passed the 8 million customer mark.

    Thanks to the diversity of its international footprint and the balance between mobile and fixed-line operations, our business activities are well-positioned to face the global economic situation, despite the difficult environment in Spain and in some emerging countries.

    The gross operating margin rate for the first nine months of the year remained stable even with the specific commercial costs in France announced this summer concerning the acquisition of content and handset subsidies, and despite the impact of new regulations.

    Following the excellent performance recorded in the first half, the third quarter results are fully in line with our 2008 objectives both in terms of the stabilisation of our gross operating margin rate and the generation of more than 7.8 billion euros in organic cash flow.

    This solid performance is the result of the profound transformation of Group since 2006 that has involved the full commitment on a daily basis of the entire workforce on every level."

Orange (NYSE: FTE)

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