Press release
Paris, 25 October 2018
Financial results at 30 September 2018
Continued solid growth in adjusted EBITDA
| Q3 2018 | Comparable basis | Historical basis | 9M 2018 | Comparable basis | Historical basis | ||||
| In millions of euros | |||||||||
| Revenues | 10 307 | 0.6 % | 1.0 % | 30 570 | 1.3 % | 0.9 % | |||
| Adjusted EBITDA | 3 687 | 3.0 % | 3.0 % | 9 671 | 3.2 % | 2.8 % | |||
| CAPEX (excluding licences) | 1 772 | 10.9 % | 10.9 % | 5 141 | 6.0 % | 5.5 % | |||
| Operating Cash-Flow | 1 915 | (3.5)% | (3.5)% | 4 530 | 0.1 % | (0.2)% | |||
The first nine months of the year confirm the acceleration in revenues and adjusted EBITDA growth compared to 2017. Adjusted EBITDA growth remained solid (+3%) in the third quarter[1].
- The 1.3% growth in revenues in the first nine months of 2018 exceeded that of the full year 2017 (+1.2%). In the third quarter, revenue growth proved to be resilient, up 0.6% year on year, against a backdrop of increasingly intense competition in our key markets, particularly in France and Spain.
- The 3.2% growth in adjusted EBITDA in the 9-month period confirmed the objective of stronger growth in 2018 compared to that achieved in 2017. The adjusted EBITDA growth of 3.0% in the third quarter is in line with the trend of the previous quarters, with continued efforts to control costs. The adjusted EBITDA margin for the telecom activities improved compared to 2017, up 0.7 points in the first nine months of the year and up 1.0 point in the third quarter.
- CAPEX for the third quarter was 5.141 billion euros, up 6.0% on a comparable basis, in line with the objective of 7.4 billion euros for the full year. These investments positioned Orange yet again as the number one provider in France in terms of the quality of its mobile network in the 2018 ARCEP survey.
Third quarter results also demonstrate a strong commercial performance, particularly:
- In France, where the success of the new offers contributed to the growth of our fixed broadband customer base, including a record for a third quarter in fibre.
- In Spain, where the net change in the fixed broadband customer base returned to growth, thanks to fibre and the success of our content aggregation TV strategy including football.
- In Europe, with an acceleration of growth in mobile contract and fixed broadband customer base, which was driven by the success of the Love convergent offers.
- In Africa & Middle East where we continued to accelerate 4G and reached 15 million of 4G customers at the end of the third quarter, a milestone for the company, representing a 57% increase year on year.
2018 and mid-term outlook
Based on these results, Orange re-affirms its objectives for 2018:
- Growth in adjusted EBITDA greater than that achieved in 2017 on a comparable basis;
- Increased CAPEX, peaking at 7.4 billion euros in 2018;
- Growth in Operating Cash Flow greater than in 2017 on a comparable basis;
- The ratio of net debt to adjusted EBITDA for the telecom activities to be maintained at about 2x in the medium term, to preserve Orange's financial strength and investment capacity.
- Payment of a dividend of 0.70 euros per share for the full year 2018 (if approved at the 2019 Annual General Meeting). The dividend increase of 0.05 euros will be included in the interim dividend (0.30 euros per share), which is expected to be paid on 6 December 2018
For 2019 and 2020, growth in adjusted EBITDA, a reduction in CAPEX and growth in Operating Cash Flow.
Commenting on the publication of the 2018 third quarter results, Stéphane Richard, Chairman and CEO of the Orange Group, said:
"The Group has maintained its strong momentum during this third quarter, with increased revenues of +0.6% despite particularly intense competition in our key markets, while maintaining solid EBITDA growth of +3.0%, an indication of the appropriateness of our strategy.
In France, in spite of the competitive context, we increased our mobile contract base by 82,000 customers and our fibre base by 157,000 customers. This commercial performance was underpinned by our investments in our networks (Orange was recently ranked first by ARCEP for the quality of its mobile network for the 8th successive year) and by a targeted marketing strategy, combining improved pricing focusing on value and the launch of a new broadband double-play offer by Sosh. Revenue growth and successful cost management have enabled Orange France to confirm its continued EBITDA improvement.
A similar strategy has supported Orange Spain's broadband sales and TV subscriptions performance thanks to investments in fibre and has also enabled it to respond in a targeted way to aggressive moves by our competitors in the mobile business.
In Europe, where growth reached +1.6% thanks to our convergence strategy, I'd like in particular to highlight the important progress made by Orange Poland in the development of its "Orange One" strategy that led to a return to growth during the quarter.
Our African and Middle East activities are maintaining a good level of growth notwithstanding specific operational challenges in the Côte d'Ivoire. I'd like to underline in particular the strong performance in Burkina Faso and the Democratic Republic of the Congo, which also returned to growth this quarter.
Finally, Orange Business Services continues its progress with sustained momentum in the areas of cybersecurity and cloud services."
The financial data in this press release are unaudited.
In order to make 2017 data comparable with that of 2018, the 2017 results are adjusted to reflect the changes in the scope of consolidation and foreign exchange fluctuations during the period. At the end of September, their impact was respectively, +71 and -194 million euros in revenues, -2 and -37 million euros in adjusted EBITDA, +1 and -26 million euros in CAPEX and -3 and -10 million euros in operating cash flow. The changes in the scope of consolidation primarily resulted from the consolidation of Business & Decision, and foreign exchange fluctuations resulted mainly from the variation in the value of the U.S. dollar, the Egyptian pound, the Jordanian dinar and the Guinean franc against the euro.
More detailed information is available on the Orange website, in the "Investors / Results and Presentations" section.
Key figures
- 30 September data
| 2018 | 2017 | 2017 | change | change | |||||
| comparable | historical | comparable | historical | ||||||
| In millions of euros | basis | basis | basis | basis | |||||
| Revenues | 30,570 | 30,174 | 30,297 | 1.3 % | 0.9 % | ||||
| Of which: | |||||||||
| France | 13,524 | 13,364 | 13,362 | 1.2 % | 1.2 % | ||||
| Spain | 3,974 | 3,890 | 3,890 | 2.2 % | 2.2 % | ||||
| Europe | 4,185 | 4,132 | 4,108 | 1.3 % | 1.9 % | ||||
| Africa & Middle East | 3,834 | 3,651 | 3,756 | 5.0 % | 2.1 % | ||||
| Enterprise | 5,314 | 5,354 | 5,391 | (0.7)% | (1.4)% | ||||
| International Carriers & Shared Services | 1,132 | 1,220 | 1,234 | (7.2)% | (8.2)% | ||||
| Intra-Group eliminations | (1,395) | (1,437) | (1,444) | - | - | ||||
| Adjusted EBITDA* | 9,671 | 9,372 | 9,411 | 3.2 % | 2.8 % | ||||
| of which telecom activities | 9,761 | 9,416 | 9,455 | 3.7 % | 3.2 % | ||||
| As % of revenues | 31.9 % | 31.2 % | 31.2 % | 0.7 pt | 0.7 pt | ||||
| of which Orange Bank | (92) | (44) | (44) | 110.1 % | 110.1 % | ||||
| CAPEX (excluding licenses) | 5,141 | 4,848 | 4,873 | 6.0 % | 5.5 % | ||||
| of which telecom activities | 5,111 | 4,811 | 4,836 | 6.2 % | 5.7 % | ||||
| As % of revenues | 16.7 % | 15.9 % | 16.0 % | 0.8 pt | 0.8 pt | ||||
| of which Orange Bank | 30 | 37 | 37 | (17.9)% | (17.9)% | ||||
| Operating Cash-Flow | 4,530 | 4,525 | 4,538 | 0.1 % | (0.2)% | ||||
- Quarterly data
| Q3 2018 | Q3 2017 | Q3 2017 | change | change | |||||
| comparable | historical | comparable | historical | ||||||
| In millions of euros | basis | basis | basis | basis | |||||
| Revenues | 10,307 | 10,250 | 10,209 | 0.6 % | 1.0 % | ||||
| Of which: | |||||||||
| France | 4,572 | 4,533 | 4,532 | 0.9 % | 0.9 % | ||||
| Spain | 1,340 | 1,333 | 1,333 | 0.5 % | 0.5 % | ||||
| Europe | 1,411 | 1,389 | 1,392 | 1.6 % | 1.3 % | ||||
| Africa & Middle East | 1,310 | 1,263 | 1,264 | 3.7 % | 3.6 % | ||||
| Enterprise | 1,785 | 1,825 | 1,777 | (2.2)% | 0.4 % | ||||
| International Carriers & Shared Services | 374 | 412 | 415 | (9.2)% | (10.0)% | ||||
| Intra-Group eliminations | (483) | (504) | (506) | - | - | ||||
| Adjusted EBITDA* | 3,687 | 3,581 | 3,581 | 3.0 % | 3.0 % | ||||
| of which telecom activities | 3,718 | 3,597 | 3,597 | 3.3 % | 3.3 % | ||||
| As % of revenues | 36.1 % | 35.1 % | 35.2 % | 1.0 pt | 0.8 pt | ||||
| of which Orange Bank | (31) | (17) | (17) | 89.0 % | 89.0 % | ||||
| CAPEX (excluding licenses) | 1,772 | 1,597 | 1,597 | 10.9 % | 10.9 % | ||||
| of which telecom activities | 1,762 | 1,586 | 1,586 | 11.1 % | 11.1 % | ||||
| As % of revenues | 17.1 % | 15.5 % | 15.5 % | 1.6 pt | 1.6 pt | ||||
| of which Orange Bank | 10 | 12 | 12 | (13.7)% | (13.7)% | ||||
| Operating Cash-Flow | 1,915 | 1,983 | 1,983 | (3.5)% | (3.5)% | ||||
* EBITDA adjustments are described in Appendix 2.
Comments on key Group figures[2]
Revenues
Orange Group revenues were 10.307 billion euros in the third quarter of 2018, an increase of 0.6% (+58 million euros) on a comparable basis. In the first nine months, revenues increased 1.3% (+0.9% excluding the positive impact from ePresse and audiobook offers). This slowdown can be explained by the increasingly competitive landscape and by a decline in wholesale and equipment sales revenues. At Group level, the performance of the principal services was as follows:
Revenues from Convergent offers, sold in all European countries, continued to grow rising 9.5% in the third quarter and 11.4% in the first nine months of 2018.
Revenues from Mobile Only services rose 1.3% in the third quarter and 1.5% in the first nine months of 2018, driven by the steady growth of prepaid in Africa & Middle-East.
Revenues from Fixed Only services decreased 3.1% in the third quarter and 3.3% in the 9-month period, due to the shift towards convergent offers and the slowdown in fixed narrowband services.
Revenues from IT and integration services were up 7.9% in the third quarter and 6.9% in the first nine months of 2018, driven by revenues from the Cloud and Orange Cyberdefense, which rose 10% and 16% respectively.
Revenues from Wholesale were down 4.1% in the third quarter (-3.1% in the 9-month period), affected by the decrease in fibre co-financing in France compared to the previous quarter and by the decrease in international carrier services.
Revenues from equipment sales decreased 2.1% in the third quarter and were up 2.9% in the 9-month period.
Customer base growth
There were 10.778 million customers for convergent offers across the Group at 30 September 2018, up 7.2% year on year on a comparable basis, including 6.119 million customers in France, 3.123 million in Spain and 1.536 million in Europe.
Mobile customers reached 200.922 million as of 30 September 2018, up 0.9% year on year, driven by a return to positive sales in the third quarter, with 1.917 million new customers. The growth in mobile contract customers (+2.2% year on year) exceeded that in prepaid customers (+0.1%).
There were 19.866 million fixed broadband customers across the Group at 30 September 2018, an increase of 3.6% year on year. Very high-speed fixed broadband grew 36% year on year to reach 5.890 million customers.
TV services had 9.374 million customers at 30 September 2018, a 5.7% year-on-year increase.
Adjusted EBITDA
The Group's adjusted EBITDA was 3.687 billion euros in the third quarter of 2018, an increase of 3.0% on a comparable basis, in line with previous quarters. In the first nine months of 2018, adjusted EBITDA grew 3.2%, up 1.9% excluding the positive impact from ePresse and audiobook offers. Compared to the second quarter, the decline in revenue growth, mainly from low-margin activities such as equipment sales and IT, was offset by lower commercial expenses.
Adjusted EBITDA from the telecom activities was 3.718 billion euros in the third quarter, up 3.3% on a comparable basis and the margin was 36.1% (up 1.0 point year on year). In the first nine months, adjusted EBITDA from the telecom activities was up 3.7%. This growth was generated primarily by the remarkable performance of France, Spain and Africa & Middle East.
CAPEX
Group CAPEX totalled 5.141 billion euros in the first nine months of the year, up 6% on a comparable basis. This increase is due to the different timing in CAPEX this year, which led to comparatively larger expenses in the third quarter, in line with the objective of 7.4 billion euros in CAPEX for the full year 2018. CAPEX for the telecom activities, as a percentage of revenues, was 16.7% (up 0.8 points over one year).
The Group accelerated its fibre deployment: as a result, at 30 September 2018, 30.8 million households had connectivity to very high-speed broadband[3] (an increase of 6.2 million or 25.1% year on year), including 13.3 million in Spain, 10.9 million in France, 3.2 million in Poland and 2.3 million in Romania (following the network sharing agreement with Telekom Romania).
Investment in 4G et 4G+ mobile services was sustained with an acceleration in the deployment of 4G sites in France, Spain and Africa & Middle East (notably Mali, Morocco, Senegal and Côte d'Ivoire). In France, the Group's capital expenditure efforts in mobile networks are clearly reflected in the results of the 2018 ARCEP annual survey, which ranked Orange yet again as the number one provider in France for the quality of its mobile network.
Changes in asset portfolio
On 14 August 2018, Orange finalised the acquisition of 100% of the capital of Basefarm Holding AS, a major player in cloud infrastructure and critical application services in Europe. The acquisition strengthens the position of Orange Business Services, which is already the leader in the market for cloud computing services in France and a significant player in Europe.
Review by operating segment
France
| Q3 2018 | change | change | 9M 2018 | change | change | ||
| comparable | historical | comparable | historical | ||||
| In millions of euros | basis | basis | basis | basis | |||
| Revenues | 4,572 | 0.9 % | 0.9 % | 13,524 | 1.2 % | 1.2 % | |
| Retail services | 2,755 | 2.1 % | 2.1 % | 8,238 | 2.4 % | 2.4 % | |
| Convergence | 1,126 | 10.7 % | 10.7 % | 3,322 | 12.3 % | 12.3 % | |
| Mobile Only | 587 | (2.5)% | (2.5)% | 1,770 | (2.1)% | (2.1)% | |
| Fixed Only | 1,041 | (3.4)% | (3.4)% | 3,146 | (4.0)% | (4.0)% | |
| Fixed Only broadband | 644 | 3.1 % | 3.1 % | 1,925 | 1.9 % | 1.9 % | |
| Fixed Only narrowband | 397 | (12.2)% | (12.2)% | 1,221 | (12.0)% | (12.0)% | |
| Wholesale | 1,355 | (2.2)% | (2.1)% | 3,970 | (2.1)% | (2.1)% | |
| Equipment sales | 349 | 2.6 % | 2.6 % | 959 | 4.3 % | 4.3 % | |
| Other revenues | 114 | 2.5 % | 2.5 % | 355 | 2.8 % | 2.8 % |
In the third quarter of 2018, revenues in France were up for the sixth quarter in a row. Thanks to the further deployment of our value strategy, Fixed Only, Mobile Only and convergent ARPOs have all improved.
Revenues, rose 0.9% year on year on a comparable basis in the third quarter of 2018, following an increase of 0.6% in the second quarter. As in the three previous quarters, this third quarter benefited from the favourable impact of the inclusion ePresse offers and audiobooks. Excluding this effect, revenues were quasi stable year on year (-0.1%).
In an intense promotional market environment in the third quarter, Orange's customer base continued to grow, driven by strong net sales: up 2.6% year on year for mobile contract customers (19.123 million customers at 30 September 2018) and up 2.2% year on year for fixed broadband customers (11.389 million customers). Fibre continued to increase steadily (+31.1%), achieving the best ever third quarter results for fibre.
Revenues from convergence rose 10.7%, convergent ARPO was up 4% in the third quarter, following an increase of 3.2% in the second quarter. The convergent customer base continued to grow: convergent fixed broadband customers increased 4.6% year on year (6.119 million customers at 30 September 2018), while the number of SIM cards for convergent offers increased 7.4% year on year (9.620 million customers).
Mobile Only revenues decreased of 2.5% year on year. Mobile Only ARPO was up 2.7% thanks to a favourable shift in the mix of mobile offers.
Broadband Fixed Only revenues were up 3.1% in the third quarter of 2018, after rising 0.7% in the second quarter. Broadband Fixed Only ARPO rose 3% in the third quarter after a 2.6% increase in the second quarter. Fixed Only narrowband revenues[4] continued their downward trend, declining 12.2% in the third quarter of 2018.
Wholesale revenues were down 2.2% in the third quarter of 2018, after declining 1.3% in the second quarter. Unbundling revenues continued to decline as a result of the deployment of fibre and continue to be negatively impacted in the 9-month period by the decrease of the regulated unbundling tariffs as set on 1st January 2018.
Spain
| Q3 2018 | change | change | 9M 2018 | change | change | ||
| comparable | historical | comparable | historical | ||||
| In millions of euros | basis | basis | basis | basis | |||
| Revenues | 1,340 | 0.5 % | 0.5 % | 3,974 | 2.2 % | 2.2 % | |
| Retail services | 973 | (0.2)% | (0.2)% | 2,893 | 1.7 % | 1.7 % | |
| Convergence | 539 | 0.8 % | 0.8 % | 1,603 | 3.6 % | 3.6 % | |
| Mobile Only | 309 | (1.9)% | (1.9)% | 918 | (0.8)% | (0.8)% | |
| Fixed Only | 125 | (0.9)% | (0.9)% | 370 | 0.2 % | 0.2 % | |
| Wholesale | 211 | 6.4 % | 6.4 % | 582 | 3.8 % | 3.8 % | |
| Equipment sales | 155 | (2.1)% | (2.1)% | 499 | 3.0 % | 3.0 % |
Orange Spain's fixed broadband customer base returned to growth driven by strong momentum in fibre and TV offers including football, which attract high-revenue customers. The strong commercial performance in a highly competitive environment confirms the success of strategy in place.
Revenues rose 0.5% in the third quarter of 2018, after growing 1.8% in the second quarter. This slow growth is due to decreasing prices for mobile termination (+1.4% excluding this impact), easing equipment sales (down 2.1% in the third quarter after a decline of 0.4% in the second quarter) and a slowdown in retail services (down 0.2%). Wholesale revenues showed a significant increase.
Customer base growth was positive despite strong competition in the entry-level segment for mobile and fixed broadband. The mobile contract customer base, excluding machine-to-machine, grew 7% year on year (11.5 million customers). The fixed broadband customer base continues to increase, with 13,000 additional net sales (4.14 million customers at 30 September 2018) driven by the success of fibre: 158,000 net sales in the third quarter and 2.721 million customers (up 30.6% year on year). Fibre now represents 65.8% of the fixed broadband customer base, up 16 points year on year. The TV customer base increased, with 46,000 net sales in the third quarter, totalling 685,000 customers, representing 17% of the fixed broadband customer base, up 2 points year on year. This performance reflects the success of both Orange Spain's open and premium content aggregation strategy. The residential convergent customer base was up 1.2% year on year (3.123 million customers).
Convergence revenues rose 0.8% in the third quarter of 2018, after increasing 3.1% in the second quarter. Convergent ARPO decreased slightly in the third quarter (-0.3%) against a backdrop of intense competition. Convergent customers represented 85.1% of the consumer fixed broadband customer base at 31 March 2018, up 2.3 points year on year.
Mobile Only revenues were down 1.9% in the third quarter, after rising 2.6% in the second quarter, notably with a customer mix still marked by a weaker decline in the number of contract customers compared to prepaid. Mobile Only ARPO remained stable in the third quarter at 12.6 euros.
Fixed Only revenues were down 0.9% in the third quarter of 2018, after rising 0.6% in the second quarter. Broadband Only ARPO was up 1.7% in the third quarter, after rising 3.9% in the second quarter.
Wholesale increased 6.4% in the third quarter of 2018, after decreasing 0.6% in the second quarter of 2018, driven by good momentum in services to international carriers.
Europe
| Q3 2018 | change | change | 9M 2018 | change | change | ||
| comparable | historical | comparable | historical | ||||
| In millions of euros | basis | basis | basis | basis | |||
| Revenues | 1,411 | 1.6 % | 1.3 % | 4,185 | 1.3 % | 1.9 % | |
| Retail services | 886 | 2.6 % | 2.2 % | 2,615 | 1.9 % | 2.1 % | |
| Convergence | 122 | 52.9 % | 51.9 % | 335 | 56.7 % | 57.2 % | |
| Mobile Only | 559 | (1.1)% | (1.4)% | 1,651 | (2.5)% | (2.4)% | |
| Fixed Only | 170 | (8.4)% | (9.2)% | 527 | (8.3)% | (7.9)% | |
| IT & Integration services | 35 | 8.8 % | 8.0 % | 102 | 21.5 % | 21.9 % | |
| Wholesale | 285 | (2.1)% | (2.4)% | 859 | 1.3 % | 1.5 % | |
| Equipment sales | 207 | 5.6 % | 6.3 % | 605 | 3.3 % | 4.4 % | |
| Other revenues | 32 | (14.9)% | (15.4)% | 106 | (19.7)% | (12.5)% |
Revenues in Europe[5] grew driven by convergence, which is still growing quickly. Revenue growth in Poland retuned to growth.
Revenues in the Europe segment (which includes Poland, Belgium, Romania, Luxembourg, Slovakia and Moldavia), grew 1.6% in the third quarter of 2018 on a comparable basis, after rising 0.3% in the second quarter. Retail services growth also improved, reaching 2.6% growth in the third quarter, after rising 2.0% in the second quarter. Equipment sales grew 5.6%, after a slight decrease of 0.4% in the second quarter.
The mobile contract customer base (18.873 million, excluding machine-to-machine) grew 1.1% year on year in the third quarter after rising 1.2% in the second quarter, with an overall improvement across all countries. The fixed broadband customer base (3.173 million) grew 11.8% in the third quarter, after rising 12.9% in the second quarter. Very high-speed fixed broadband reached 698,000 customers at 30 September 2018.
Convergence revenues continued to grow quickly, up 52.9% in the third quarter, after increasing 57.8% in the second quarter. The convergent customer base (1.536 million at 30 September 2018) was up 38.0% year on year in the third quarter, mainly in Poland, Romania and Belgium.
Mobile Only revenues declined 1.1% in the third quarter of 2018, after decreasing 3.6% in the second quarter, mainly due to the shift towards convergent offers.
Fixed Only revenues, generated mainly by Poland, fell 8.4% in the third quarter of 2018, after a decline of 6.5% in the second quarter.
Similarly, the growth in IT and integration services in the third quarter (up 8.8%, after increasing 33.8% in the second quarter) was mainly driven by Poland.
Wholesale was down 2.1% in the third quarter of 2018, after rising 2.3% in the second quarter, due to a smaller contribution from mobile services to carriers.
Africa & Middle East
| Q3 2018 | change | change | 9M 2018 | change | change | ||
| comparable | historical | comparable | historical | ||||
| In millions of euros | basis | basis | basis | basis | |||
| Revenues | 1,310 | 3.7 % | 3.6 % | 3,834 | 5.0 % | 2.1 % | |
| Retail services | 1,079 | 6.7 % | 6.6 % | 3,148 | 7.6 % | 4.7 % | |
| Mobile Only | 964 | 6.5 % | 6.0 % | 2,821 | 8.1 % | 4.9 % | |
| Fixed Only | 113 | 7.3 % | 10.7 % | 318 | 2.5 % | 1.5 % | |
| IT & Integration services | 2 | 82.6 % | 98.9 % | 9 | 85.9 % | 114.2 % | |
| Wholesale | 204 | (11.7)% | (11.6)% | 607 | (8.3)% | (10.9)% | |
| Equipment sales | 18 | 16.8 % | 11.9 % | 58 | 35.2 % | 29.8 % | |
| Other revenues | 9 | 62.3 % | 68.1 % | 22 | (2.5)% | (4.7)% |
Africa & Middle East continued its growth momentum with increased revenues and a steady development of the mobile customer base.
Africa & Middle East revenues were up 3.7% on a comparable basis in the third quarter of 2018, after rising 5.2% in the second quarter. Retail services revenues remained strong, up 6.7% in the third quarter, after rising 7.7% in the second quarter, driven by Orange Money, up 34% year on year in the third quarter, and data services. Five countries posted double-digit growth, including Burkina Faso (+14.6%), Egypt (+11.0%) and the Democratic Republic of Congo (+10.7%).
The mobile customer base in Africa & Middle East was stable over one year (118.25 million at 30 September 2018, despite the impact of change in regulation. 4G customers grew 57% year on year to reach the 15 million customers milestone in the third quarter 2018.
Mobile Only services revenues grew 6.5% in the third quarter after rising 8.5% in the second quarter, driven by the increase in data services and a continuous development of voice.
Fixed only services revenues grew 7.3% year on year in the third quarter of 2018, after increasing 1.1% in the second quarter. The number of fixed broadband customers increased 18.5% in the third quarter (917,000 at 30 September 2018).
Wholesale revenues were down 11.7% in the third quarter, after declining 6.2% in the second quarter, taking the low level of international traffic into account.
Enterprise
| Q3 2018 | change | change | 9M 2018 | change | change | ||
| comparable | historical | comparable | historical | ||||
| In millions of euros | basis | basis | basis | basis | |||
| Revenues | 1,785 | (2.2)% | 0.4 % | 5,314 | (0.7)% | (1.4)% | |
| Fixed Only | 992 | (3.0)% | (3.4)% | 2,988 | (2.7)% | (4.5)% | |
| Voice | 342 | (5.1)% | (5.3)% | 1,040 | (3.8)% | (4.5)% | |
| Data | 650 | (1.9)% | (2.4)% | 1,948 | (2.1)% | (4.5)% | |
| IT & Integration services | 561 | 4.0 % | 15.1 % | 1,610 | 4.7 % | 6.2 % | |
| Mobile[6] | 232 | (11.8)% | (11.8)% | 716 | (4.0)% | (4.0)% |
IT and integration services continued to grow but revenues declined on a comparable basis related to legacy services and an adjustment to the mobile equipment sales base in the third quarter of 2017.
Revenues from the Enterprise segment were down 2.2% in the third quarter of 2018 on a comparable basis, the decrease would be limited to -0.5% by excluding the one-off mobile equipment sale, which took place in the third quarter of 2017.
IT and integration services posted 4.0% growth in the third quarter of 2018, after rising 9.7% in the second quarter. The steady growth continued to be driven by the Cloud and Orange Cyberdefense revenues, which were up 10% and 16% respectively year on year.
Data services declined 1.9% in the third quarter, after a 0.9% decline in the second quarter.
Voice services were down 5.1% in the third quarter of 2018, after declining 4.6% in the second quarter.
Mobile was down 11.8% in the third quarter of 2018 (stable excluding the impact from the one-off sale of mobile equipment mentioned above).
International Carriers & Shared Services
| Q3 2018 | change | change | 9M 2018 | change | change | ||
| comparable | historical | comparable | historical | ||||
| In millions of euros | basis | basis | basis | basis | |||
| Revenues | 374 | (9.2)% | (10.0)% | 1,132 | (7.2)% | (8.2)% | |
| Wholesale | 287 | (11.8)% | (12.1)% | 856 | (10.6)% | (11.2)% | |
| Other revenues | 87 | 1.1 % | (1.6)% | 276 | 5.5 % | 2.5 % |
Revenues from International Carriers and Shared Services were down 9.2% in the third quarter on a comparable basis, after a decline of 5.9% in the second quarter, with a decline in voice services to international carriers.
Growth in other revenues remained positive, up 1.1% in the third quarter, after rising 4.8% in the second quarter. Other revenues relate to the laying and maintenance of submarine cables, audiovisual content (OCS and Orange Studio), consulting (Sofrecom) and secure-TV access (Viaccess).
Schedule of upcoming events
- 21 February 2019: full-year 2018 results
Contacts
| press: +33 1 44 44 93 93 Jean-Bernard Orsoni jeanbernard.orsoni@orange.com Tom Wright tom.wright@orange.com Olivier Emberger olivier.emberger@orange.com | financial communication: +33 1 44 44 04 32 (analysts and investors) Patrice Lambert-de Diesbach p.lambert@orange.com Isabelle Casado isabelle.casado@orange.com Samuel Castelo samuel.castelo@orange.com Luca Gaballo luca.gaballo@orange.com Didier Kohn didier.kohn@orange.com individual shareholders: 0 800 05 10 10 |
Disclaimer
This press release may contain forward-looking statements about Orange, notably on objectives and trends related to Orange's financial situation, investments, results of operations, business and strategy. These forward-looking statements do not constitute a forecast as defined in EU Commission Regulation No 809/2004 and although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. More detailed information on the potential risks that could affect our financial results is included in the Registration Document filed on 4 April 2018 with the French Financial Markets Authority (Autorité des marchés financiers - AMF) and in the annual report on Form 20-F filed on 4 April 2018 with the U.S. Securities and Exchange Commission. Other than as required by law, Orange does not undertake any obligation to update them in light of new information or future developments.
