FT’s 2010 EBITDA down 1.3% despite broadband subscriber gains

24 Feb 2011

France Telecom (FT) said its earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 1.3% to EUR15.6 billion (USD21.5 billion) last year, from EUR15.8 billion in FY2009, beating a consensus forecast for EBITDA of EUR15.4 billion in a poll conducted by Bloomberg. The smaller-than-expected fall was attributed to strong uptake of broadband internet services. France’s biggest telco by subscribers and revenues reported a 1.5% year-on-year rise in revenue to EUR45.5 billion, allowing CEO Stephane Richard to comment that that the operator was ‘on the right track’ with his firm’s new business plan. Richard’s dual-prong strategy is to shore up the former monopoly’s business in its home market whilst expanding the Orange brand into emerging markets in Africa and the Middle East. As part of this plan FT intends to invest up to EUR7 billion on emerging market deals by 2015, in the process doubling revenue contributions from those regions in the same period. In FY2011 FT expects to see a slight increase in revenue (excluding the impact of regulation), although the EBITDA margin is expected to contract one percentage point this year; CAPEX is set at around 13% of revenue. The French telco also confirmed its intention to target organic cash flow of EUR8 billion in 2011.

FT closed out 2010 with an aggregate fixed and mobile user base of 209.6 million, up 6% y-o-y, of which 150.4 million were mobile customers – up 9.1% – as it added more users in the two aforementioned regions. The Group’s financial results no longer include the performance of its Orange UK unit, which merged with Deutsche Telekom’s British counterpart in April.

France, Orange Group