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Orange Q1 results, revenue growth and improved EBITDAaL margin

Revenue growth and improved EBITDAaL margin

  • Retail services reap full benefits of value strategy and improved customer experience
In millions of euros 1Q 2022 1Q 2021
1Q 2021
Revenues 10,582 10,511 10,315 0.7 % 2.6 %
EBITDAaL 2,620 2,595 2,565 1.0 % 2.2 %
eCAPEX (excluding licenses) 1,610 1,708 1,760 (5.8)% (8.6)%
EBITDAaL – eCAPEX 1,011 887 805 13.9 % 25.6 %
  • Revenues rose 0.7%1 in the first quarter, driven by Africa & Middle East (+8.7%). Growth in retail services was well above the decline in Wholesale services.

In France, the faster pace of retail services growth has yet to offset the decline in Wholesale. Revenues fell slightly, by 0.7%.

Revenues in Spain remained lower, by 4.6%, but retail services continued to improve. The other European countries were stable.

Revenues from Totem (for which this is the first reporting quarter) and from Enterprise grew by 12.2% and 0.8% respectively.

  • EBITDAaL rose 1.0% in the first quarter, outpacing the rise in revenues; this performance provides further comfort to the 2022 target of a 2.5% to 3% increase since growth will accelerate at the end of the year.
  • eCAPEX fell by 5.8% in the first quarter.

From a commercial standpoint, the Group is consolidating its leadership in convergence with 11.6 million customers across Europe, on the one hand thanks to the continuous improvement in customer satisfaction – notably reflected in the reduced churn rate across Europe – and on the other hand to the quality of its fiber network, to which more than half of the Group’s fixed-line customers in France are now connected.

In a context of re-emerging inflation, the Group is taking all corrective measures to confirm its financial objectives for 2022, a milestone towards the achievement of its 2023 commitments2:

  • EBITDAaL to increase by 2.5% to 3%.
  • eCAPEX no greater than 7.4 billion euros.
  • Organic cash flow from telecoms activities of at least 2.9 billion euros.
  • Net debt/EBITDAaL ratio for telecoms activities unchanged at around 2x in the medium term.
  • Maintained dividend for 2022 at 70 euro cents including an interim dividend of 30 euro cents in December 2022.

Commenting on the publication of these results, Christel Heydemann, Chief Executive Officer of the Orange Group, said:

“Having taken on my role as CEO a few weeks ago, it’s with pride and enthusiasm that I take on the challenges that lie ahead and to continue to build Orange into a digital world leader. In this first quarter, Orange has once again delivered a solid performance with higher revenues, improved margins and the confirmation that we’re on track to achieve our 2022 targets in spite of the particularly uncertain environment.

We continue to reap the benefits of our European fiber and 5G network leadership with a 2% rise in our retail sales growth in these first three months. We now have 11.6 million convergent customers in Europe and over half of Orange’s fixed broadband customers in France are now fiber connected – a landmark achievement on which we will continue to build.

Totem, our towerco subsidiary – whose numbers we’re publishing for the first time – is a top-quality asset of great value-creating potential. Meanwhile, Africa & Middle East continues to be our main growth driver, again delivering a remarkable performance, with most African countries producing double-digit growth thanks to new telecoms services that are off-setting the heightened competition for Orange Money.

Spain remains our most challenging market, and we’re pressing ahead with our stand-alone programmes aimed at restoring growth. I’m also pleased to note our exclusive discussions on combining our operations with those of Masmovil. This operation would lead to the creation of a sustainable player with the investment capacity, infrastructure and competitive edge necessary for its future development and for the benefit of both consumers and businesses in Spain.

In the B2B market, the transition to IT services represents and profound evolution of the business that we are fully committed to achieving.

These results are testament to a company with extraordinary assets, not least our talented people all around the world.

As the newly appointed CEO it’s with a sense of determination and responsibility that I approach both our challenges and our many opportunities. These results demonstrate our ability to grow in a tough environment and also represent a strong foundation not only for the rest of 2022, but also for the longer term.”

CT Bureau

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