(Boursier.com) — Orange returned to 10.50 euros this Monday (-0.5%), while the annual turnover stood at 44,122 million euros, up 1.8% over one year, or 790 million euros. Revenue growth is driven by the performance of retail services which increased by 3.5%, or 1,109 million euros, and equipment sales by 7.3%, or 238 million euros. It more than doubles the decline in revenue from operator services which continues to decline by -6.5%, or -474 million euros.
Orange Business recorded stable turnover (+0.2%). The growth in revenues from IT and integration services (+6.3%) and mobile (+2.6%) offset the structural decline in traditional Voice and Data activities (-6.7%).
On the commercial front, the group maintains its position as leader in convergence with 11.9 million convergent customers across the Group (+0.7%) and its commercial momentum on mobile plans and very high fixed access Speed. Mobile services have 254 million accesses (+4.8%), including 103.9 million packages (+10.1%). Fixed services totaled 44.5 million accesses (down -2.9%), including 16.5 million very high-speed accesses, showing strong growth (+11.9%). Fixed low-speed access continues its structural decline (-14.4%).
In line with the annual objective, EBITDAaL reached 13 billion euros, with annual growth of 1.3% and continued acceleration throughout the year to reach +2.0% in the 4th quarter. The value strategy makes it possible to achieve a lesser decline in France’s EBITDAaL in the second half (-2.2% after -5.1% in H1 leading to -3.6% over the year), with still very good performances from Africa and the Middle East (+12.7%) and Europe (+5.8%), particularly Spain (+12.2%), and the start of the inversion trend of Orange Business (-15.4%).
Held trajectory
Despite the inflationary context, the operational efficiency program is following its trajectory towards achieving its objective of 600 million euros in 2025 on the cost base of approximately 12 billion euros defined at the end of 2022 and after integration of VOO. It made it possible to achieve around 300 million euros in savings by the end of 2023, or half of the three-year plan. The savings are mainly linked to the notable reduction in staff numbers following the Senior Part-Time agreements, but also savings programs in the areas of purchasing, IT, networks and real estate.
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eCAPEX amounted to 6,815 million euros, a strong reduction of -6.7% (-487 million euros), and represented 15.4% of turnover, in line with the ambition of the Lead the Future plan. The main contributor to this decline is France (-10.2%, or -344 million euros) thanks to the maturity of fiber deployment, and Spain (-12.5%, or – 107 million euros). As of December 31, 2023, Orange had 71.7 million households connectable to FTTH across the world (up 10.4% year-on-year) and the FTTH customer base reached 15.4 million (+12.5%).
Favorable base effect
Operating profit was 4,969 million euros, up 6.6% due to the increase in EBITDAaL and the favorable base effect due to the depreciation of the difference. acquisition of Romania in 2022, partially offset by additional restructuring costs for Orange Bank and Orange Business and by the increase in provisions for Senior Part-Time, due to the extension of working hours following the 2023 law on pension reform.
The net result of the consolidated group came to 2,892 million euros, an increase of 10.5%, or 275 million euros, due to the operating result, the increase in financial charges and the reduction in the tax burden.
The annual growth in EBITDAaL combined with the sharp reduction in eCAPEX makes it possible to achieve an organic cash flow from telecoms activities of 3,661 million euros (+19.7% in historical data), in line with the objective of ‘at least 3.5 billion euros.
Net financial debt stood at 27 billion euros as of December 31, 2023, an increase of 1.7 billion euros compared to 2022. The ratio of net financial debt to EBITDAaL of telecoms activities was , due to the acquisition of VOO, at 2.05x as of December 31, 2023, in line with the objective of a ratio around 2x in the medium term. The solid liquidity position of the telecoms activities of 14.3 billion euros and the low cost of debt with an average maturity of 7.5 years are assets in the current monetary environment…
Financial objectives displayed
The Group has achieved all its objectives for 2023 and confirms its financial objectives for 2025 as presented at the Capital Market Day of February 16, 20237.
In 2024, Orange aims to achieve the following financial objectives at the current scope:
*EBITDAaL up slightly
*A discipline on eCAPEX
*Organic cash flow6 of at least €3.8 billion
*Net debt/EBITDAaL ratio unchanged around 2x in the medium term
*Dividend of 0.75 euros per share (payable in 2025)
For the 2025 financial year, in addition to the objectives presented at the Capital Market Day, Orange sets a minimum dividend of 0.75 euros per share.
Among the latest broker opinions, Citigroup remains a buy on Orange with a price target of 11.85 euros.