Get the latest news straight to your inbox.
Register for the Telecoms.com newsletter here.
February 17, 2022
French telecoms group Orange hit its targets for the full year but a closer look at the numbers shows it’s still not having an easy ride in its home market, nor in neighbouring Spain.
Indeed, the company’s financials were – as is so often the case – buoyed by growth in the Middle East and Africa. Group revenues were essentially flat, with growth of 10.6% at the Africa and Middle East business helping to offset a 1.6% decline in France and a smaller fall in the rest of Europe, the latter dragged down by a 4.7% revenue slide in Spain. The figures on earnings – specifically EBITDAaL – were similar.
Outgoing Orange chief executive Stephane Richard – who, having been convicted of the misuse of public funds late last year, presented his last set of results before he makes way for new CEO Christel Heydemann in early April – talked up “the turnaround of the situation in Spain” in his remarks accompanying the numbers. But the figures themselves suggest there is still more work to do.
The fiercely competitive climate in Spain is no secret and has hit all the market’s players, including Vodafone and incumbent Telefonica, both of which have reported fairly weak numbers there in recent reports. Nonetheless, all are proclaiming to be performing better in Spain. Indeed, in Orange’s case, the 2021 revenue decline was lower than in 2020, as was its earnings slide.
Whether that will be enough to stabilise the market remains to be seen. As it stands, the prospect of consolidation still looms, with Orange reportedly in talks with fourth player MasMovil about a 50:50 joint venture. There was no further news on that in its annual results announcement though.
Back home, where competition appears to have settled somewhat in recent years, Orange was hit by co-financing deals linked to the roll out of fibre networks. Returns from these arrangements were down on 2020, Orange said, which in turn pushed down its revenue and earnings, as well as pushing up capex. However, the telco notes that excluding co-financing, France posted year-on-year EBITDAaL growth of 1.5%, backed by a strong commercial performance. It also said customer satisfaction is growing in France. We don’t have figures for that, but a growing number of mobile accesses, both including and excluding M2M, shows that there is likely some customer stickiness there.
Fixed accesses were down overall, in line with ongoing trends, but broadband connections were up, driven by FTTH growth. Orange ended last year with over 6 million fibre-to-the-home subscriptions in France, up from 4.5 million at the end of 2020. That’s a record 31.7% year-on-year increase, the telco says.
“The Group’s results reflect a solid 2021 performance. Indeed, Orange has delivered on its commitments and is confirming all its objectives for 2023, including organic cashflow of between 3.5 and 4 billion euros,” Richard said.
“Our ambitious moves into cybersecurity and banking are paying off. With revenues of 800 million euros, cybersecurity has delivered a 14% growth in 2021 while Orange Bank now has 1.7 million clients in Europe,” he also said.
And it’s fair to say that, all in all, Heydemann will inherit a largely healthy company, from her predecessor, albeit with some challenges. Plus ça change.
Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.
You May Also Like