Orange reported a slowdown in first-quarter results, hurt by tough competition in its main markets France and Spain. Revenues were up just 1 percent to EUR 10.195 billion, and adjusted EBITDA was up 0.7 percent to EUR 2.583 billion. Orange maintained its outlook for slower EBITDA growth and lower capex this year.
Revenues were down 0.1 percent on a comparable basis, while Orange said growth was 0.4 percent when excluding the impact of new digital reading offers in France. The downturn was mainly due to France, where comparable revenues fell 1.8 percent. Spain posted growth of just 0.4 percent, and the rest of Europe was up 1.4 percent, underpinned by the convergence offers and IT services growth, and Africa & Middle East continued its steady growth at 5.3 percent. Enterprise also had a second consecutive quarter of growth, rising 0.6 percent.
By service, the converged bundles led growth, up 4.6 percent to EUR 1.7 billion, with over 10 million customers. Mobile revenues were up 1.1 percent to EUR 2.6 billion, and Orange added a net 136,000 mobile customers in the quarter for a total of 203.78 million. Fixed revenues were down 3.1 percent to EUR 2.4 billion, while IT services grew by 6.6 percent to EUR 616 million, driven by the Enterprise segment and Poland. Equipment revenues fell 8.4 percent to EUR 722 million amid a fall in handset sales.
Capex, excluding licences and spectrum, grew 8.4 percent to EUR 1.6 billion, driven by the acceleration of the FTTH rollout in France and continued investment in 4G networks. This supported record fibre net additions of 168,000 in France in Q1.
Orange said spending will slow as the year goes on, in line with its outlook for a lower overall figure in the full year. However, the capex forecast excludes the new network-sharing agreement in Spain, which will require upfront investment of EUR 300 million over four years, including EUR 100 million. Orange said the network deal still offers an attractive return, with projected gross savings of EUR 800 million over ten years.
The higher capex in Q1 led to a 10 percent fall in operating cash flow, to EUR 951 million. Orange said it still expects a higher figure in the full year, as the drop in capex in outpaces the expected slowdown in EBITDA growth.
