HomeFinancial/RegulationMiddle East, Africa lead solid 1H 23 results for Orange 

    Middle East, Africa lead solid 1H 23 results for Orange 


    Orange CEO highlights both regions as being “in great shape” 

    Orange group revenues increased 2.6% in Q2 2023 and 2% in 1H 2023 driven mainly on the back of price rises and tight cost controls. 

    While revenues in its home market France fell 1.3% in 2Q, Africa and the Middle East continued to post very strong growth rising 12% in Q2 (+10.5% in 1H) with double-digit increases across all growth engines (mobile data, fixed broadband, Orange Money, B2B) – plus a 12% increase in EBITDAaL over the half-year. 

    “This area is firing on all engines, whether it is data and fixed broadband, both up 17%, or Orange Money back to 25% growth,” Orange group CEO Christel Heydemann told EuroBusiness Media. “The excellent performance in Africa and the Middle East is down to our investments in the network, the satisfaction of our customers and the very strong rebound of Orange Money.” 

    While the telco announced its intention to gradually withdraw Orange Bank from the retail banking market in France and in Spain after losing €1bn, the CEO stressed that Orange Bank’s activities in Africa are not affected by the exit. 

    In France, the accelerated growth (3.4%) in retail services excluding PSTN was unable to offset the anticipated decline in wholesale services revenues. Europe grew 2.7% in 2Q (+3.3% in 1H), driven by Spain, which confirmed its recovery with an increase of 2.1%, plus solid performances from Poland (+5.5%) and Belgium & Luxembourg (+3%). 

    Overall, Orange’s enterprise sector grew 2.4% in Q2 (+0.8% in 1H) as a result of revenues from IT and integration services and mobile, which more than offset the structural decline in the voice and data legacy businesses.  

    However, as we’re seeing with most telcos, Orange’s enterprise segment was still under pressure with EBITDAaL declined 16.7%, which although was bad, was an improvement year-on-year. “The action plan unveiled at our Capital Market Day is proceeding according to plan, a voluntary redundancy plan should be put in place by the end of 2023,” she said.  

    “The review and rationalisation of our range of commercial offers continues, and our ambitious action plan to upskill our employees’ abilities to reflect requirements of tomorrow’s jobs has started,” she added. 

    As part of wider cost management, capex €3.15bn in the first half of 2023, a year-on-year reduction of 6.4% in 2Q and 5.7% in 1H. As a result of this and other measures, the telco saw net savings on 30 June 2023 of €175m, which represents nearly 30% of its target of €600m by 2025. 

    Orange had 68.3m households connectable to FTTH worldwide (up 12.6% YoY), while its FTTH customer base reached 14.6 million (+14.4%). 

    Outlook remains on track  

    Heydemann said the telco remains “on track” despite the environment in France being more competitive in the second quarter than at the beginning of the year, the impact of energy costs weighing on the current financial year, and the enterprise segment only now beginning its transformation. 

    “In the second half, our strengths will be more fully felt, with Africa in great shape, Europe benefitting from the full turnaround in Spain and France experiencing a significant improvement in its EBITDAaL,” she said, adding that the telco will be managing cash closely.   

    She said she wasn’t worried about France’s weak EBITDAaL performance. “Two-thirds of this decline comes from the impact of energy price inflation while the benefit of the price increases announced in the first quarter has not yet been fully seen in H1,” she said. “Moreover, ongoing cost saving initiatives will also feed into the margin as we move rapidly forward against our roadmap, thanks in particular to the success of our Senior Part-Time plan and the headcount reduction of more than 6% in France in the first half.”