we have delivered against our objectives with solid growth across markets we are confident in the growth potential of our markets

Transcription

1 investor day 007 personal: accelerating momentum Olaf Swantee senior executive VP, personal line of business Paris, December 5, 007 key messages 1 we have delivered against our objectives with solid growth across markets we are confident in the growth potential of our markets we will capture profitable growth by sustaining operational excellence and leading in innovation in summary 1

2 1 we have delivered against our objectives with solid growth across markets 1 mobile presence in 7 countries with 77% of revenues in Western Europe Western Europe Central and Eastern Europe Africa, Middle East and Americas (AMEA) Jordan Orange is solid # in Europe UK Belgium Luxembourg France Switzerland Poland Slovakia Romania Moldova Egypt Senegal Mali Niger Central African Guinea-Bissau Cameroon Republic Guinea Ivory Coast Equatorial Guinea Kenya Spain Dominican Republic Vanuatu Caribbean Botswana Madagascar Mauritius Reunion share of revenue share of subscribers 77% 1% 9% 5% 5% %

3 1 our overall 007 performance continues to be strong subscribers revenues million postpaid prepaid billion 15.% % +19% Q06CB Q07 strong postpaid performance in mature markets Egypt, Poland, and Romania main engines of growth 5.1% M06CB 9M07 emerging markets, UK and Poland driving revenue growth gross operating margin CAPEX billion, percent of revenue billion, percent of revenue.8 5.5%.9% % profitable growth margin expansion in Poland and France -0. p.p % 10.9% decreasing CAPEX in mature markets investing in emerging markets 1H06CB 1H07 1H06CB 1H07 5 note: all financial data includes Netherlands but not Austria and all figures here represent YTD numbers 1 positive signs from across footprint UK subscriber growth (million, %) 15.1 % % 5% revenue growth ( billion, %) 1% 1% % 1% 6% 7% Spain subscriber growth (million, %) % 10.7* 5% % postpaid prepaid revenue growth ( billion, %) X% YoY growth 5% 5% 6%.%.0%.% Q07 Q07 Q07 1Q07 Q07 Q07 1Q07 Q07 Q07 1Q07 Q07 Q07 Poland subscriber growth (million, %) revenue growth ( billion, %) % 17% 15% 7% 6% 5% RoW** subscriber growth (million, %) % 0% 0% % % 1% revenue growth ( billion, %) % % 5% 15% 1% 1% Q07 Q07 Q07 1Q07 Q07 Q07 1Q07 Q07 Q07 1Q07 Q07 Q07 6 * -500K subs due to cleaning of prepaid base ** includes Africa, Middle East and Caribbean countries as well as Slovakia, Romania, Moldova, Belgium, Switzerland, and the Netherlands note: Spanish growth rates only exclude 500k impact cleaning of the base ; all figures on comparable basis

4 we are confident in the growth potential of our markets our markets continue to show solid growth potential - at different stages of development Western Europe Central and Eastern Europe Africa, Middle East, and Caribbean key drivers of growth remaining pockets of penetration and new usage migration from prepaid to contract abundance and convergent offers uptake of adjacent data services potential in business segments solid subscriber growth continued growth from core services abundance and multimedia services rapid development of data cards as substitute of fixed-line large penetration potential positive economic and political outlook wireless technologies filling in lack of fixed infrastructure voice and SMS-led growth CAGR total market revenues* ~1% ~6% ~0% 8 * source: Pyramid, Yankee Group

5 in mature markets, customer satisfaction is increasingly critical to establish a platform for growth service quality becoming an increasingly important buying / churning factor trends of service provider s ability to differentiate based on service features* significant network price handsets channels limited usability customer care usability customer care handsets channels network price before 006 today and all players striving to improve customer service relative performance on cost 1.10 economy better value premium relative performance on quality 9 * source: Yankee Group, July 006 and abundance is widely offered with positive impacts on retention, acquisition, and customer value proliferation across European markets usage increasing minutes of usage/ subscriber/market* spend and retention impact France 9 58 decline in churn rate (postpaid plan launched march-'06) magic numbers (postpaid plan launched apr- 06) UK moved customers into higher value bands Spain vitamina (postpaid promotion launched dec- 06) 15 1H H07 drove gross adds, increased market share 10 * source : Merrill Lynch Wireless Matrix 5

6 convergent services are spreading everywhere throughout Europe fixed mobile convergence projected to take off with converged customers spending more consumer interest in fixed/mobile bundle, 007* (% of households willing to bundle access) ARPU of multi-service customers** ( ) no combination broadband fixed telephony pay TV mobile projected fixed mobile converged subscriptions in Western Europe** CAGR +1% 9,76 broadband + fixed telephony broadband + fixed and mobile telephony fixed and mobile telephony E 11 * Internal market research and analysis ** France, Spain, UK, Switzerland, Italy, the Netherlands, Germany source: Ovum, 006 Yankee Group European broadband consumer survey G supports new usages and boosts demand for data services X% CAGR Western Europe* mobile market million SIM cards mobile broadband market** ( million) % % 1,16 G 1% 007E 010E 56% mobile TV market ( million).5g 6% 7 +1% 85 5% 007E 010E G 16% 007E 9% 010E mobile music market*** ( million) +8% E 010E 1 * France, UK, Spain, Belgium, Switzerland ** includes Internet and all other activities accessed using a mobile browser *** does not include ringtones which account for large majority of current music market source: Yankee Group 6

7 in mature markets, clarity on medium-term regulatory environment for voice although data remains less certain mobile termination rates decreasing ( cents) France Spain UK Belgium roaming rates down ( ) calls to foreign country wholesale price calls received in foreign country voice regulation Western Europe source: internal analysis based on respective national regulation authorities Africa, Caribbean, Middle East and Central and Eastern Europe expected to post significant growth Africa, Caribbean and Middle East* Central and Eastern Europe** X% CAGR +x total subs added number of mobile subscribers in total market (million) number of mobile subscribers in total market (million) +6% +0% % % E 010E E 010E 1 * includes AMEA + Egypt ** Romania, Slovakia, Poland, Moldova source: Pyramid, WCIS 7

8 we will capture profitable growth by sustaining operational excellence and leading in innovation priorities to enhance profitable growth based on operational excellence and innovation leadership priorities moving forward 1 best at serving our customers optimise market presence superior execution for growth and profits growth through key priorities profitable growth through efficiency programs drive for efficiency be at the forefront of innovation 16 8

9 best at serving our customers - our success story in Slovakia will be replicated across countries best at serving our customers Orange best performer on quality index vs. competition resulting in successful resilient growth in Slovakia solid revenue growth ( million) overall quality % relationship keeping informed image 1.00 billing H06 CB 1H07 shops upgrade handset network customer service Orange market leader 5% market share lowest churn superior level of customer care satisfaction roaming source: internal Orange Slovakia optimise market presence - Orange growing total points of sale and more profitable controlled channels Orange increasing customer contact by expanding the number of POS* evolution of points of sale** (number of points of sale) 6,500+ and pushing distribution through more efficiently controlled channels evolution of distribution channels, personal** (%) 100% 100% non-controlled 5,980 6,18 controlled E 0% of commercial activity online in 010 France example E 18 * defined as controlled points of sale and controlled channels performing at least 1 commercial activity ** France, UK, Spain, Belgium, Switzerland, Poland, Romania and Slovakia 9

10 expanding market presence - Orange continuing solid growth in emerging markets we delivered differentiation achieved enormous future growth potential expansion into 19 African, Middle Eastern, and Caribbean countries market leader in Africa - #1 or # market share in markets* where Orangebrand is currently present brand resonates well penetration expected to grow significantly in Orange African footprint (%) 1.% 6.% % of personal revenues and % of personal subscribers (Q07) 59% of personal subscriber growth (Q07, yoy on a c.b.) adapted business model to serve low-end (~ 15 ARPU) users and high-end with high profitability and Orange continuously expanding to capture growth france telecom wins kenya telkom we are a partner for Africa in the long-term FT AMEA head as quoted in Financial Times 19 be at the forefront of innovation - Orange ahead to capture convergence and multiplay opportunity what we have done successful launch of Unik 550k Unik device enabled customers in France significant AUPU/ARPU uplift where Orange is going next Wi-Fi extender + Unik leader in converged mobile + broadband in Western Europe* (000s subscribers, Q07) expanding device range 51 ~10 closest competitor ~50 rd place competitor data services on Unik: TV 0 * France, UK, Spain, Belgium, Switzerland source: Ovum 10

11 SMS livebox embedded browsing USB d secure my access Xpress card secure my device PCMCIA card innovation - Orange has the most comprehensive data and contents services portfolio and delivers superior user experience what we have done where Orange is going next mobile broadband grow BEW/IEW* make mobile BB (000s subscribers) % CAGR ~,000 Flybox access business everywhere/ internet everywhere mobile multimedia foster penetration of signature and multimedia devices ( ) mobile rewind TV Orange music signature devices x.5 G devices x music devices x 5 HDTV devices x 5 1 * business everywhere/internet everywhere innovation - imagine future "mobile lifestyle" services in-car SIM Orange local Orange money car networking Orange helping to simplify life contact less ticketing Manchester City Football Club 11

12 drive for efficiency - initiatives replicated across all countries online and telesales network sharing / outsourcing platform consolidation IT operations outsourcing IT group core components develop once deployed everywhere example: 00 m in Spain over the next few years IT&N continuous improvement G&A commercial expenses dissemination alternative handset subsidies enhanced loyalty program relationship with strategic dealers Loyalty-based commissions Lean distribution call centre consolidation example: 90 m overall commercial expenses in 007 e-billing and self serve tools off-shoring of back office / non-critical front office simplification of organization / real estate example: 0% cost reduction in UK supply chain in 007 in summary 1

13 leveraging growth with a targeted approach by market to sustain top and bottom-line growth contribution to revenue growth contribution to GOM growth % 100% 100% Central and Eastern Europe new services Central and Eastern Europe voice/sms 10-15% 0-5% 0-5% growth from contents and services operational efficiency African, Middle East, and Caribbean 5-0% 5-0% growth from voice and access revenue growth impact (market and innovation) Western Europe new services 5-0% 5-0% subscriber growth 5 wrap-up of our priorities we have delivered against our objectives with solid performance across markets we are confident in the stability of our markets and their growth potential we have paved our way ahead to capture profitable growth over the next - years 6 1