FT revamps business segment reporting, implements IFRS 8

22 Apr 2009

Paris-headquartered telecoms operator France Telecom (FT) says it is introducing a new business segment analysis and implementing IFRS 8. In a press statement, the firm said that in order to reflect changes in its organisation and to comply with the IFRS 8 accounting standard for business reporting, the group is changing how it reports its operating segments, moving from an analysis by activity (Personal Communications Services, Home Communications Services, Business Communications Services) to an analysis by geography. The new business segments will now be:

- France

- United Kingdom

- Spain

- Poland

- Rest of the World

- Enterprise

- International Carrier and Shared Services.

The telco’s new segment analysis will be used for all future financial reports from the first quarter of 2009, it said. Beyond the requirements of IFRS 8, the French group will continue to publish additional financial and operational information about its fixed and mobile business activities in each of its principal countries of operation. In addition, earnings before interest, tax, depreciation and amortisation (EBITDA) will replace gross operating margin (GOM) as the key indicator of operating profitability. FT’s switch from GOM to EBITDA involves incorporating the following items:

- employee profit-sharing

- share-based compensation

- gain / loss on disposals of assets

- restructuring costs

- share of profit / loss of associates.

These changes in business segments analysis of operational and financial indicators do not impact the group’s past results, it said. To help understand the transition between the old and new business segments, additional information can be found at: http://www.orange.com/en_EN/finance/ :

France, Orange Group