• Revenue: EUR40.3 billion, a 1.2% increase driven by growth in retail and Middle East and Africa.
• EBITDAaL: Increased by 2.7% for the full year, with a 3.2% rise in Q4.
• Organic Cash Flow: EUR3.4 billion, rising by almost 6% and exceeding the annual goal of at least EUR3.3 billion.
• Net Debt-to-EBITDA Ratio: 1.8 times, reflecting a robust balance sheet.
• EPS: Increased by 12% to $0.82 per share.
• Dividend: Set at EUR0.75 for 2024, payable in 2025, fully covered by free cash flow.
• eCAPEX to Sales Ratio: Maintained at around 15%.
• France Revenue Growth: Back to growth with a 0.4% increase.
• Middle East and Africa Revenue Growth: Achieved double-digit growth.
• Europe Revenue Decline: Due to a reduction in low-margin activities.
• Orange Business Revenue Decline: Decreased slightly in a challenging IT market.
• Fiber Net Adds in France: 1.1 million in 2024.
• Mobile Net Adds in France: Close to 120,000 in Q4.
• Convergent ARPU in France: EUR78, up almost 4% year-on-year.
• MASORANGE Revenue Growth: Nearly 5% increase in Q4.
• MASORANGE Synergies: EUR120 million achieved over nine months, exceeding the target.

• Warning! GuruFocus has detected 2 Warning Sign with ORANY.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Orange SA (ORANY) achieved a 1.2% increase in revenues for 2024, reaching EUR40.3 billion, driven by growth in retail and Middle East and Africa.
• The company reported a significant improvement in EBITDAaL, with a 3.2% increase in Q4 and a 2.7% increase for the full year.
• Organic cash flow rose by almost 6% to EUR3.4 billion, exceeding the annual goal of at least EUR3.3 billion.
• Orange SA (ORANY) maintained a robust balance sheet with a net debt-to-EBITDA ratio of 1.8 times.
• The company successfully implemented cost-saving initiatives, achieving two-thirds of its EUR600 million savings ambition, and is targeting EUR700 million in procurement savings in the midterm.

Negative Points

• Orange Business experienced a slight decrease in revenues due to a challenging IT market and a decline in voice services.
• Europe revenues declined by 2.3% in Q4 due to a reduction in low-margin activities, despite retail acceleration.
• The company faces competitive pressures in the mobile-only market, particularly at the low end, which remains very competitive.
• Orange SA (ORANY) anticipates a EUR100 million wholesale headwind in 2025, impacting EBITDAaL.
• The company is dealing with tax headwinds in France, expected to impact cash flow by around EUR100 million in 2025.

Q & A Highlights

Q: Can you elaborate on the drivers of improving EBITDAaL momentum in France for 2025, given the competitive environment? A: Christel Heydemann, CEO, explained that the improvement is expected due to continued retail growth driven by volume and value strategies, tactical price increases, and upselling from copper to fiber. The competitive environment remains stable, with a focus on reducing churn and maintaining best-in-class churn rates. The mobile market remains competitive, but recent price increases have been observed. Cost efficiencies and procurement savings are also expected to contribute positively.

Q: With the upgraded free cash flow guidance and low leverage, is there a commitment to grow the dividend per share in 2026 and beyond? A: Christel Heydemann stated that while the dividend yield is attractive, the company aims to increase the share price as well. The current dividend policy remains unchanged until the next Capital Market Day, where future capital allocation will be discussed.

Q: How do you see the headcount evolving in France, considering the planned recruitment and senior part-time plan? A: Christel Heydemann mentioned that the workforce planning agreement includes hiring young talents in specific areas while managing an aging workforce through an early retirement plan. The plan is expected to impact EBITDAaL positively by 2028, with a focus on voluntary departures.

Q: Can you provide more details on the fiber deal in Spain and its impact on MASORANGE's deleveraging? A: Christel Heydemann confirmed that the proceeds from the fiber deal will be used for deleveraging MASORANGE. The company expects to close the transaction by the end of H1 2025, with no specific numbers disclosed yet.

Q: What are the main priorities for the upcoming Capital Market Day? A: Christel Heydemann highlighted that the event will focus on strategic priorities for the midterm, updates on business trajectories, and capital allocation. AI and innovation will be key drivers, reflecting the company's commitment to leveraging technological advancements for long-term growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.