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General

Orange France sees revenue growth accelerate to almost 3% in Q2

Thursday 30 July 2020 | 10:41 CET | News
Orange France generated second-quarter revenues of EUR 4.59 billion, up 2.7 percent year-on-year on a like-for-like basis. The growth rate accelerated from a 0.5 percent rise in the first three months of the year. As in previous quarters, the increase was mainly driven by the wholesale business, where performance picked up to double digit growth (+11.7% from +2.6% in Q1), based on EUR 1.54 billion worth of revenues. This division benefitted from co-financing received within wholesale contracts for public initiative fibre networks in rural areas of the country, which more than offset the decline in roaming and unbundling.

The operator continued to benefit from a considerable rise in 'other revenues', which increased 27.0 percent to EUR 167 million (+29.3% in Q1). As in the first quarter, growth was supported by the 'built-to-suit' programme under the country's 'New Deal' mobile coverage strategy

Retail service revenues improved fractionally compared with the year-earlier period (+0.1% from 0% in Q1). Overall, retail services generated revenues of EUR 2.68 billion, of which EUR 1.13 billion were in the convergent segment (+4.1%), offsetting the ongoing decline in both mobile-only and fixed-only revenues (-3.1% and -2.5% respectively).

The negative trend in equipment sales worsened significantly, with revenues down 26.7 percent to EUR 206 million (-15.2% in Q1). This contraction was due to the Covid-19 closure of all French retail stores during April and the first half of May, despite a strong recovery in June, said the company.

For the first half of the year, EBITDAal rose 0.5 percent to EUR 3.30 billion, while the EBITDAal margin fell slightly to 36.6 percent, from 37.0 percent in H1 2019. Network co-financing supported a reduction in capex, which declined 12.2 percent to EUR 1.64 billion, or 18.1 percent of fist-half revenues (21.0% in H1 2019). 

The second quarter saw a return to positive growth in the operator’s postpaid base, with 29,000 net additions since March (-58,000 in Q1). This recovery was helped by a fall in the churn rate, which decreased to 9.5 percent from 11.7 percent in the previous quarter and 10.9 percent in the year-earlier period.

FTTH network expansion progressed at a solid rate, although the pace of deployment slowed down for a second consecutive quarter to 1.43 million new premises passed, from the record 1.70 million achieved in Q4 2019. The FTTH customer base increased to 3.77 million, representing 238,000 net additions since March (+192,000 in Q1), of which 51 percent were new customers to the brand. Overall, fixed broadband subscribers rose by 61,000 to reach 11.76 million, excluding lines in the Enterprise segment (+37,000 in Q1 and +41,000 in Q2 2019). 

Looking at the Orange Bank venture, EBITDAaL remained negative at a loss of EUR 72 million in the first half of the year, from a comparable loss of EUR 78 million in H1 2019. Across France and Spain, the customer base reached 1 million at end-June (of which 31,000 in Spain), when including account holders, subscribers to loan services, and the insurance contracts that Orange Bank added with the acquisition of sister company Orange Courtage, announced in mid-July.



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Categories: General
Companies: Orange France
Countries: France
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