Africa Day 2021 Solid engine of growth - Ramon Fernandez Deputy CEO, Finance, Performance and Development - Orange
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Africa Day 2021 Solid engine of growth Ramon Fernandez Deputy CEO, Finance, Performance and Development Alioune Ndiaye CEO of Orange Middle East and Africa Paris, July 30th 2021
Disclaimer
This presentation contains forward-looking statements about Orange's financial situation, results of
operations and strategy. 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. In particular, the Covid-19 outbreak may exacerbate the risks that
the Group could face. More detailed information on the potential risks that could affect our financial results is
included in the Universal Registration Document filed on 20 April 2020 with the French Financial Markets
Authority (AMF) and in the annual report (Form 20-F) filed on 21 April 2020 with the U.S. Securities and
Exchange Commission. Forward-looking statements speak only as of the date they are made. Other than as
required by law, Orange does not undertake any obligation to update them in light of new information or
future developments.
Africa Day 2021 2
Acceleration of Growth in Q2 2021
+1.9 pts EBITDAaL margin yoy
in €m Q2 21 yoy cb H1 21 yoy cb
Revenues 1,555 +14.4% 3,043 +10.7%
Retail services 1,359 +15.8% 2,660 +12.8%
34.5%
Wholesale 157 +0.6% 310 -5.6% 32.7%
Equipment sales 30 42.2% 54 +28.8%
EBITDAaL 1,051 +17.0%
H1 2020 cb H1 2021
eCAPEX 525 +21.0%
EBITDAaL EBITDAaL margin
Acceleration of retail services growth… …thanks to fast growth engines
Revenue cb yoy growth in % Revenues growth Q2 yoy +24%
15.8%
14.4%
10.5% +22%
10.2% 9.8% +23%
8.5% 9.0%
7.9% 7.1% Q2 2020
7.6% 4.7% Q2 2021
8.3% 7.1%
6.1%
6.2%
5.8%
5.1% FBB OM Data
1.3%
Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 1.9 m 22,6 m 38.2 m
Customers active customers* 4G customers
Retail services Total MEA +30% yoy +15% yoy +37% yoy
* At least one transaction per month
Africa Day 2021 3
Key driver of growth, margin and cash for the Group
MEA share of
Group’s adju. EBITDA (2017) / EBITDAaL
(2020)
MEA share of >15%
Group’s revenues
>13% 14% MEA share of
13%
EBITDA-Capex (2017) / EBITDAaL-
eCapex (2020) of telecom activities
13%
2017 2019 2021
12%
>20%
2017 2019 2021
14%
10%
2017 2019 2021
Africa Day 2021 4
Relevant capital allocation strategy and strong execution to fuel value
High potential & Operational excellence & Sustainable
balanced portfolio strong costs control value creation
Natural risk mitigation >+5% Strong ROCE growth (pts)
Total CA CAGR 17-20
4.4% yoy
OMEA footprint CA
Average growth over 12 years
+7%
EBITDAaL CAGR 17-20
+5.7
21st century is and will >+15%
remain the century of Africa EBITDAaL-eCapex CAGR 17-20
>+33% 2017 2020
OCF CAGR 17-20
Africa Day 2021 5
Delivering more and more value
Asset turnover Profit margin ROCE
Revenue/Capital Employed N-1 EBIT /revenue EBIT /Capital employed N-1
+6 pts
+5.7 pts
75.0x
+6.9 pts
69.0x
X =
2017 2020 2017 2020 2017 2020
Capital expenditure Direct margin
Value creation for
prioritising and optimising management and control
shareholders
to support growth of indirect costs
Note : ROCE (n) = Adj. EBIT (n) / Net Operating Assets (n-1) including goodwill
2012-2017: IAS18 accounting standard / 2020- IFRS 16
Africa Day 2021 6
1 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Leading position in all our operations
1
Operational
execution
Leadership position in 8 markets (in value) Orange stronger leader in mobile excellence
First challenger in 7 markets (in value) value market shares (Points in value, 2020)
Orange leader in value Market Orange’s market share
#1 Morocco(1)
#2/4
Jordan
#2/3 share relative to the second position relative to the
#2 Mali competitor in the market market leader
#1/3 Egypt
#3/4
#3
4.1 x
3.4 x
Senegal
#1/4
Guinea-B. Central African
#1/2 Republic(1)
* #2/3
2.2 x
Guinea Cameroon
#1/4 #2/4
1.8 x
1.8 x
1.6 x
1.5 x
Sierra Leone(1)
1.3 x
#1/3 D.R.C. (1)
#2/4
1.0 x
0.9 x
0.9 x
Liberia
0.8 x
0.7 x
#1/2
0.6 x
0.6 x
0.5 x
Ivory Coast
#1/3 Madagascar
#2/4
Burkina Faso
#1/3
*
CAM
DRC
EGY
LIB
MAD
JOR
BIS
SEN
GUI
BUR
CAR
SIE
MOR
MAL
IVC
BOT
Botswana
#2/3
(1) (1) (1)
Source: Orange MEA (1)
(1) Countries estimates based on volume market share
Africa Day 2021 8
With an increasing number of customers* 1
Operational
execution
excellence
55.2m
132m Orange Money accounts
Mobile Customers
38.2m 1.9m
4G customers FBB Customers
* As of June 30, 2021
Africa Day 2021 9High level of customer satisfaction
1
Operational
execution
excellence
9
Customer
NPS leadership in: C3 Centric
markets* Culture
9 customers 4 customers
Over 10 recommend Over 5 are satisfied with
Orange in all our countries the digital experience
(Customer Effort Score) Digital
Multi-
Leader position in: services
Customized usage Unified
Network quality Internet access Navigation speed Simple
12 11 11
countries countries countries
*Consolidated perimeter (16 countries) and Tunisia
Source : monthly barometer on quality of services done by an external study on a sample of prepaid
Source IPSOS
active customers and supervised by Orange MEA, IPSOS France and affiliates. Africa Day 2021 101 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Balanced and agile portfolio built by stages since 1996 2
Capital
allocation
strategy
A solid presence… …with limited exposure to FX risk and
strong local shareholding structure (1)
Tunisia*
2009
Morocco
2010
Jordan
2000
Mali Orange
2003 Egypt
1998
13% Local private investors
Local authorities, governments
Senegal
1997
26%
Bissau
2007
C.A.R
2008 62%
Cameroon
Guinea 2000
2007
Sierra Leone 1%
2016
Liberia D.R.C.
2016 2011
23% Intra-group debt
Ivory Coast XOF
0.65x
Madagascar
€5.8bn 45%
1996
1996
External funding in XAF
Burkina Faso
2016
Net debt/
local currency
49% 2020
Botswana
Mauritius* EBITDAaL revenues Other
External funding in
2000
1998
76% foreign currency
6%
Country
Inception date
*Under the equity method
(1) Based on OMEA percentage of interest in each entity’s equity (internal calculation) Africa Day 2021 12Demonstrating resilience in the long term and reactivity in the short term 2
Capital
allocation
strategy
OMEA revenues growth vs. GDP Growth V-shape recovery after COVID-19 hit in 20Q2
(Constant/without inflation) (Revenues yoy growth)
8.3%
7.6%
6.5% 6.1% 6.2%
5.8%
6.1% 6.2% 5.3% 5.1%
5.1%
5.2%
1.3%
4.1% 4.1%
4.4%
4.2%
2009-2020
Average growth Q1.2019 Q2.2019 Q3.2019 Q4.2019 Q1.2020 Q2.2020 Q3.2020 Q4.2020
2.7% +4.4%
2.5%
2.1% +3.7%
Contingency plans exceeding COVID-19 impact
(EBITDAaL evolution)
Arab spring and Lowest economic growth
COVID-19
crisis in Côte d’Ivoire in two decades in Africa
+1.5pt
33.7%
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
+1.0pt
Orange growth GDP constant -0.4pt
32.2% +0.8pt
2019 Performance ex Covid contingency 2020
Covid
Note: Same perimeter & Exchange rate (2020A) - Including DRC, Liberia, Burkina Faso and Sierra Leone from 2016
Source: Orange MEA, WEO IMF – April 2021 Africa Day 2021 13All subregions contributing to a growth in acceleration 2
Capital
Top line growth acceleration EBITDAaL-eCapex growth acceleration allocation
strategy
+6.8% > 6.0 +21% ~1.2
5.7 +15% 0.9
+5.7% 5.4 0.8
0.7
5.1 0.6 EBITDAaL
1.6 1.7 1.9
4.8 1.6 eCapex
-1.0 -1.0
FY17 FY18 FY19 FY20 FY21E -1.0 -1.0
Note : historical figures restated with a constant foreign exchange rate FY17 FY18 FY19 FY20 FY21E
Note : historical figures restated with a constant foreign exchange rate
Contribution of the strongest country: Revenues and EBITDAaL CAGR 2017-2020 : growth coming
a portfolio more balanced than our peers’ from all clusters
12.8%
40%
Airtel Africa
47%
9.3%
32% revenues
MTN 7.0%
36% 6.6% 6.5% 6.5% EBITDAaL
5.6% 5.7% 5.3%
78% 4.5%
Vodacom
78%
57%
Maroc telecom
63
15% Total Sonatel Ivory Coast MENA Central
Orange MEA* 17% Revenues
OMEA cluster cluster Africa
EBITDA
Source: Companies’ financial results full year in December 2020 and march 2021
*MEA contributive figures Africa Day 2021 14A segment regularly beating analysts’ expectations 2
Capital
allocation
strategy
Revenue CAGR (cb in %) EBITDAaL/ Adju. EBITDA (before 2019) growth (cb in %)
Actual vs Consensus Actual vs Consensus
Analysts’preview
10.0% in 2020 before
6.2% 9.5% COVID
Analysts’preview
in 2020 before
5.1% 5.2% COVID
7.0%
5.2%
3.0%
2017 2018 2019 2020 2017 2018 2019 2020
Actual Consensus FY17 Consensus FY18 Consensus FY19 Consensus FY20
Africa Day 2021 151 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Successfull transformation of our business mix 3
Solid growth
engine
… thanks to the construction of 3 growth engines addressing both
Acceleration of retail growth more than offset wholesale decline…
retail and B2B customers taking over from the declining voice
CA CAGR 2017-19 CA CAGR 2019-21 Retail revenues split by service
Retail
+8.5% +>9%
(incl. equipment sales)
Wholesale -7.7% ->9%
Voice
Blended +5.7% +>6.5%
Data >50% 50%
31%
2017 2021
83%
91%
FY17 FY19 FY21
Retail (incl.equipement sales)
Wholesale
Africa Day 2021 17Data : penetration potential ahead 3
Solid growth
engine
Strong path of growth while 4G just starting… … with still significant potential ahead…
Mobile telco services ARPU (€) Mobile telco services revenues (in €Bn)
29% 64% 4.4x B2B
2.6 Traffic Data* Opportunities
CAGR CAGR 3.9 4G penetration in Smartphones
3% 6% subsaharan Africa in in 2025 vs between 2019
2025 vs 12% in 2020* 48% in 2020* and 2025
3.3
2.4
FY17 FY20 FY17 FY20 … that we are in the best position to realise given our hard-to-
replicate competitive advantages
4G penetration in mobile base Data revenues (in €Bn)
1.5
Direct growth
potential mainly x2 Distribution
in sub-Saharan network with Premium Extended New value-
Africa
1.5 900 000 customer mobile added
Mainly driven
0.8 points of service coverage services
26% by MENA sale
9%
FY17 FY20 FY17 FY20
Note : historical figures are restated with a constant foreign exchange rate
*source GSMA Africa Day 2021 18FBB : an agile approach to capture fibre & fixed LTE acceleration 3
Solid growth
engine
Our relevant multi-technology approach is bearing fruits… … and is precisely defined according to
new market opportunities …
FBB customer base (mSubs) FBB revenue (in €Bn)
x2 1.7 X2 +30% X2 B2B
0.4 Population growth FBB subscriptions FTTH subscriptions & wholesale
0.8 0.2 by 2050 increase by 2025 increase by 2025 opportunities
(2/3 of growth in
urban area)
FY17 FY20 FY17 FY20
FBB customer base by technology FBB revenue by technology …and leveraging on the first-mover advantage
Fibre
Fixed LTE 25%
20%
60% FTTH
Incumbent Targeted
33% connectable
x10 in fixed segment ambition in
X4.7 homes 1.6m in
ADSL in SEN, ICO and MAR, MAL,
42% 29% 2020 => x2 by
2% 42% Fixe LTE JOR BUR, EGY
9% 11% Fibre
2023
FY17 FY20 FY17 FY20
Note : historical figures are restated with a constant foreign exchange rate
Africa Day 2021 19Orange Money : we built key differentiators to pursue our success story 3
Solid growth
engine
Continuous success in mobile financing services still with
… in a market that is not yet mature…
penetration potential…
Money penetration in mobile base Money revenue
(in €Bn)
60-80% Traditional banks not able
to deal with
B2B
of adult population
such large number of people Opportunities
being unbanked
Direct growth 0.5 transacting with small amounts
potential
0.2
38%
28%
FY17 FY20 FY17 FY20 … and where we have built key differentiators
Money ARPU on active customer base
% active customers in money base (in €)
CAGR Distribution Banking
1.9 Solid Registered
Direct growth 6% network with services
3.4m reputation of as Electronic
potential 1.6 300 000 available
trustful Money
points of with Orange
35% 45% partner Institution
sale Bank Africa
FY17 FY20 FY17 FY20
Note : historical figures are restated with a constant foreign exchange rate
Africa Day 2021 20Orange Bank Africa : 3
Solid growth
to become the key player in financial inclusion in Africa engine
Successful launch in Ivory Coast ... …to be followed by a clear expansion plan
575k customers in 1 year 3 openings planned in 2022*:
With >60% with a credit Senegal, Mali, Burkina
48bn FCFA injected into the financing New services to come :
of personal projects and activities of small Micro-credits, devices financing,
entrepreneurs insurances, B2B
*Subject to the approval of central banks
Africa Day 2021 21To become the favorite digital multi-services operator in MEA 3
Solid growth
engine
Including both Customer … developing Multiservice and … enabling Data & IA and Robot Process
Relations and Distribution digitalisation... Marketplace environments… Automation in every country…
Ongoing Development of digital touchpoints New Orange Multiservice App
Creation of 2 data squads
enabling Data & IA skills in
every O-MEA country thanks
13 10 #Multiservice to a specific innovative model
Countries with Countries with
Deployment of Data Usage
live E-shops live Chatbots #Payment Cases in all countries starting
Data & IA with Capex optimisation and
#Market place
Next Best Action
Increase of existing Telco & Money apps audience
#Chatbot
#IA
11.5 2.5 #Finance
MyOrange App Orange Money 8 RPA* programs deployed in
active users (m) active users (m) O-MEA countries to learn
#API
from employee behaviour
New UX/UI Process and automatising processes
Interactions and tasks
Automation
+50% over Digital in
2020
… monitoring internal transformation to win the skills battle:
« Digital-inside » development Dat-driven culture Cloud computing Network virtualisation IA & Data science skills (Engineering/ Architecture / Visualisation)
Africa Day 2021 221 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
EBITDAaL fueled by efficiency efforts and indirect costs management 4
Continuous
optimization
EBITDA/aL margin significant increase EBITDAaL margin distribution narrowing
(number of operations)
+1.6 pts
37.5%
0.8pt
35.9% 0.8pt
2017 2020
33.7pt
32.1pt
direct margin
Indirect costs
lease
3.8pt 3.8pt
Y19 Y20 Below 25% 25%-35% Above 35%
EBITDA margin (actual) EBITDA margin (actual)
Africa Day 2021 24Leveraging our scale to increase cost synergies 4
Continuous
optimization
68.000 km submarine cables
Casablanca hub
• OMEA headquarters
• MENA regional office
• Network engineering centre
• Security centre
Dakar hub
• Sonatel Group headquarters
• Finance shared services centre
• Djoliba headquarters
• Network supervision centre
Abijian hub
• Orange Ivory Coast
Djoliba network 1st pan-african backbone
headquarters 10,000km
• Orange Bank Africa
headquarters
• Mowali headquarters
• Orange Money Compliance
and shared services centres
Africa Day 2021 25Concrete examples of how we make savings real 4
Continuous
optimization
Direct costs: distribution case Indirect costs: energy case
+150%
Electricity price for
+16 pts telco sector in 2012
27%
21%
17% Self top-up via 3 Solar farm project in Jordan
11% Orange Money Solar farms
launched in 2019
energy contribution
to technical opex
2017 2018 2019 2020 75%
Orange needs
+1.3 pts covered
consumption
costs
+2pt x3
/2
Telco direct EBITDAaL impact
(from 2019)
margin after
commissions
2017 2018 2019 2020 Y11 Y16 Y18 Y20
Africa Day 2021 261 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Make digital services more accessible : 5
to accelerate economic development in a sustainable way
Sharing value
with all
stakeholders
Developing Democratizing
digital skills access to digital
8 Orange Digital Centers
Sanza
in our footprint:
affordable smart feature
Tunisia, Senegal, Cameroon, phone
Ethiopia, Ivory Coast,
Jordan, Morocco, Mali
Major player in Support to Solar panel leader*
financial inclusion entrepreneurship
in 5 countries
To date, more than 5 400
Orange Bank Africa Orange Ventures MEA
telecom sites use solar
to finance 100 start-up
Orange Money by 2025 panels in our footprint
(equivalent of 55m liters of
fuel oil savings per year)
“Net zero carbon” target
Boost digital inclusion
by 2040
* In number of solar panels Africa
Africa
DayDay
2021
2021 281 Operational execution excellence 2 Value-driven capital allocation strategy 3 Solid growth engine with significant potential ahead 4 A continuous optimisation of our operating model 5 Sharing value with all stakeholders 6 To realise strong and sustainable ambitions
Fast growth engines and strong discipline to achieve our cash objective 6
Strong and
sustainable
ambitions
EBITDAaL OCF*
Revenues > EBITDAaL
growth Double growth
digit
growth
~6%
CAGR
2020-23
*Organic cash flow corresponding to net cash provided by operating activities, minus (i) repayments of lease liabilities and on debts related to financed assets, and (ii) purchases
and sales of property, plant and equipment and intangible assets, net of the change in the fixed assets payables, (iii) excluding effect of telecommunication licenses paid and
excluding effect of significant litigations paid (and received). Africa Day 2021 30You can also read
