It’s time for the first assessment for Christel Heydemann, CEO of Orange, almost two years after her appointment and one year after the presentation of the Lead The Future strategic plan. A contrasting assessment. On paper, the financial objectives are met. In 2023, turnover increased by 1.8% to reach 44.12 billion euros.
Profitability is also there with an EBITDAaL (profit before interest, taxes and depreciation) of 13 billion euros, an annual growth of 1.3%. Lead The Future generated 300 million euros in savings in 2023, or half of the synergies planned when the plan expires in 2025.
These consolidated figures hide different realities depending on the geography. As for several years, Africa and the Middle East are driving the group’s results upwards with double-digit growth (+11.4%) thanks in particular to the success of the Orange Money money transfer and mobile payment service ( +25.8%). In November, Orange launched Max it, a “super-app” which combines its telecoms, financial and e-commerce services for its more than 22 million customers on the African continent.
The value strategy bet
On its domestic market, however, Orange is struggling with turnover and EBITDAaL falling by 1.4% and 3.6% respectively. If retail services grew by 1.6%, the decline in revenue from operator services of (-8.5%) pushed the operator into the red. If Orange has attracted more than 99,000 new subscribers in mobile and 267,000 in fiber, it logically loses 30,000 in very high speed (ADSL) with the gradual extinction of the copper network.
Christel Heydemann sees the dividends of the “value strategy” on the consumer market which consists of increasing prices, to partially compensate for inflation and the rise in energy costs, while focusing on customer satisfaction and quality of service. She recalls that Orange was ranked the best mobile network in France by Arcep, the telecoms supervisory authority, for the third time in a row. Established at 12%, the subscriber attrition rate would be the best on the market.
In Europe, the operator’s growth remains sustained at 2.2%, thanks to the performance of Poland (+ 3.9%) and Belgium and Luxembourg (+ 4.6%). Good news also comes from Spain (+ 1.1%). Some nineteen months after the announcement of the merger between Orange and MasMovil, its authorization should finally be ratified by Brussels by February 22. By combining their forces, the two operators are targeting 450 million synergies from the fourth year.
The BtoB division remains sluggish. Orange Business shows stagnant turnover (+ 0.2%). The growth in revenues from IT and integration services (+6.3%) and mobile (+2.6%) barely offset the structural decline in traditional voice and data activities (-6.7%).
Apart from the recent acquisition of Expertime, a specialist in Microsoft technologies, the targeted acquisitions, planned by the Lead The Future plan to remember business activity, are long overdue. Furthermore, Orange Business remains stuck in a social plan initiated almost a year ago.
In the very buoyant cybersecurity market, Orange Cyberdefense is outperforming, with growth of 11%. The cyber subsidiary plans 600 recruitments for the current year. The program to sell activities outside the core target continues. After Orange Bank, the OCS and Orange Studio TV channel bouquet was sold to Canal + in January.
“Orange is down”
Upon reading the results, the CFE-CGC Orange, the operator’s main union, took a hard shot at management. “ Two years after the arrival of the new general management, the results are clear: Orange is broken. Only good results in Africa can compensate for the poor results of the group’s other activities. »
The union considers the losses of market share in France worrying “ in particular in a context where the alarming situation of SFR allows Orange to recover part of its subscribers. » More generally, he points out “ the absence of a strategic plan. “Orange management is incapable of announcing anything other than cost and Capex reductions which foreshadow a lack of growth for tomorrow. »
Finally, CFE-CGC Orange believes that “ the increase in the dividend hampers any investment capacity and condemns Orange to a slow death. » For the 2023 financial year, the general meeting of May 22 will decide on the payment of a dividend of 0.72 euros per share, an increase of 3%.