Orange aims for pole with Totem on the back of a ‘solid’ fiscal year

Despite the global pandemic, the global telecommunications company Orange claims to have generated “excellent” business results in its financial year 2020 with an organic cash flow of 2.5 billion euros from telecommunications activities, and a nod to the future it has announced. the creation of a European communications company. tower company, Totem, which it says will be a value-creating entity.

Despite a slight drop in the fourth quarter ending December 31, 2020, the telecommunications company said it had enjoyed moderate overall revenue growth, with an “excellent” performance in Africa and the Middle East, a 5 , 2% more annually, and solid results in France, 1.6% more. on an annual basis, offsetting a 3.5% drop in Europe and a 1.4% drop in the company.

For the year, the Orange group posted 2020 revenue of € 42.3 billion, up 0.3% year-on-year on a comparable basis, with growth driven by a strong trend in wholesale services thanks to co-financing of the fiber network in France. and convergent services, which registered respective growth rates of 4.4% and 2.1%.

France and Africa and the Middle East contributed positively to revenues, registering respective growth rates of 1.6% and 5.2% in 2020. Europe, including Spain, remained under pressure, as did the company, although the latter segment showed some improvement in the fourth quarter.

EBITDAaL fell slightly, strongly impacted by Orange, revealed by a decrease in roaming and additional costs derived from the health crisis, to 545 million euros, and a fall in Spain, 13.0%, and in the business segment, which it was down 14.9%. EBITDAaL in Africa and the Middle East increased 10.0% and results in Europe increased 2.3% excluding Spain.

French EBITDAaL grew 0.2%. eCAPEX fell € 124M, absorbing the decline in EBITDAaL, despite the accelerated deployment of fixed and mobile broadband networks, due to the contributions of co-financing and the discipline shown by the group, especially in Europe. The group’s operating income amounted to 5,521 million euros in 2020, a decrease of 409 million euros, or 6.9%, in historical terms.

In terms of subscribers, Orange ended the year with 11.06 million convergent customers across the group, with a 2.7% year-on-year increase driven by continued strong growth in Europe. The company had 214.1 million access lines for mobile services, an annual 3.3% increase base, including 77.4 million contracts, 4.3% more. Fixed services totaled 45.1 million access lines as of December 31, 2020, decreasing 0.7% annually, mainly due to a sharp 12.4% drop in fixed narrowband access lines. Very high speed fixed broadband access lines showed continuous strong growth (23.7%).

When evaluating the annual results, the president and CEO of the Orange group, Stéphane Richard, described 2020 as an extraordinary year, marked by a crisis of unprecedented magnitude. However, in this context, with networks showing how vital they were to society, he said that Orange had proven capable of adapting and meeting these challenges.

“First, in landline, we continue to connect our customers to fiber. In France, 6.5 million more households were connected during 2020. This was an unprecedented performance and a great feat given the context. Worldwide, we now have more than 47 million connectable homes. In many countries, the transition to fiber is accelerating and this is a trend that the health crisis has only increased. Our record commercial performance, for example in France and Poland, is proof of this. “

In the mobile sector, Orange launched 5G in five countries in 2020 and Richard said that the operator would continue to roll out what he called a disruptive technology in 2021.

The mobile game will include Totem, which is intended to capitalize on its passive mobile infrastructure assets, focusing on revenue growth and optimizing operational efficiency, generating both organic and inorganic growth. Totem will be led by a fully independent and dedicated management team to be appointed in the first half of 2021 with a view to commencing operations by the end of the year.

Initially, the portfolio of premium towers will consist of around 25,500 sites in France and Spain, the two largest countries where Orange is present. Beyond France and Spain, the group will explore the possibility of integrating other passive mobile infrastructure assets within Orange’s European presence that could create value for the company.

In France, Totem will operate around 17,000 macro sites with a combination of approximately 55% towers and 45% rooftops. Orange noted that given strong co-location demand, which has been consistent for several years, and the high proportion of towers in the portfolio, there was clear potential to increase co-location rates. In Spain, the operation will be based on around 8,000 macro sites, divided equally between towers and rooftops.

The Spanish operations will benefit from a shared network agreement between Orange and Vodafone.

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