Orange Sp/Adr

Good morning, ladies and gentlemen, and welcome to Orange's Q3 2025 results conference. For your information, this conference is being recorded. During the Q&A session, in order to ask for the floor, please raise your hand in teams. Please ensure that the mute function on your device is switched off to allow us to hear you when it is time for us to take your question. The call today will be hosted by Crystal Edmund, CEO, and Laurent Martinez, CFO, with other members of Orange's Executive Committee for the Q&A session that will start after the presentation. Thank you, and let me hand over the floor to Crystal Edmund.

Good morning and thank you for joining our Q3 results presentation. Before getting into our Q3 results, I would like to mention that last week we submitted together with Bouygues Telecom and Free Groupe Iliade a joint non-binding offer to acquire a large part of Altice activities in France. In a challenging competitive environment, this deal would allow us to strengthen investments in France while maintaining a competitive ecosystem for the benefit of consumers. This non-binding offer amounts to 17 billion euros, of which 27% for orange. There is no certainty that we will reach an agreement, and we are willing to engage in a constructive dialogue with the Altice Group. Back to our Q3 results. We remain fully focused on our business execution, and we are really pleased to report strong results driven by a robust commercial performance in France, Europe, and the Middle East and Africa region. In France in particular, we are proud to reaffirm our leadership in fiber with over 10 million customers and plus 1.1 million new customers in the last 12 months. We have become the first operator in Europe to surpass this milestone in the domestic market, marking a major achievement in our state-of-the-art network commercialization. In Spain, Mass Orange has announced an agreement with Vodafone Spain and GIC to create the largest fiber company named Premium Fiber. With 12 million premises and 5 million customers, this fiber core will provide considerable benefits for the Spanish market. Our continued focus on cost efficiency is reflected in the EBITDA growth of 3.7% this quarter, along with a 0.7 point improvement in margin rate. These robust results enable us to once again upgrade our full year guidance with a full year EBITDA now expected to grow by at least 3.5%. Let's review our strong Q3 results on slide 5. Revenues increased by 0.8% in the third quarter, driven by robust retail performance of 2.6%, which offsets the expected decline in wholesale. From a segment perspective, revenue growth is led by Middle East and Africa, achieving double-digit growth for the 10th consecutive quarter, and Europe back to growth thanks to retail services and IT and IS. In France, retail excluding PSTN grew 0.2% as expected and was offset by the anticipated decline in wholesale and equipment sales. EBITDA reached €3.4 billion, growing by 3.7%, giving us confidence to upgrade our full-year guidance to at least 3.5%. This growth is driven by our solid performance as well as our continuous efficiency initiatives, fuelled by advancements in procurement, AI and operational efficiency ambitions. In line with our e-CAPEX discipline, we maintain the CAPEX to sales ratio of approximately 15%. I will now hand over to Laurent for the business review, starting with France on slide 7.

Thank you, Christelle. Good morning, everyone. In France, in a market which is overall flattish in value, the competitive environment remains generally stable with sustained competition on the low end. In this context, we continue to uphold our efficient commercial strategy grounded in extensive and innovative segmentation from customer loyalty and value. This strategy led to a robust commercial performance with 138,000 mobile net ads, best quarter since the fourth quarter 2022, 274,000 on Fiber and 20,000 on Convergence. This performance is driven by increased momentum on orange brands and effective churn management, with mobile churn improving by more than two points year-on-year. Convergence ARPO continued to grow, increasing by 1.1% year-on-year in the third quarters, while mobile and fixed broadband ARPO slightly declined year-on-year, reflecting the mixed effect related to the competitive landscape over the past year. TIX broadband has slightly improved on a quarter-to-quarter basis. Moving to the financials, for France, our disciplined and efficient commercial strategy led to 0.2% growth in retail ex-PSTN revenues as expected. Revenue continues to be impacted by the structural anticipated decline in wholesale. Globally, we remain committed to cost optimization and confirm our objective of growing EBITDA in France in 2025 slightly more than in 2024. Let's turn to Middle East and Africa, which continues to deliver a very strong performance, demonstrating once again our positive momentum. Revenues are up double digit for the 10th consecutive quarter, driven by our four key drivers. Looking forward, on the back of this performance, we are fully confident in our ability to achieve double-digit EBITDA growth in 2025. Let's turn to Europe. Revenues are back to growth in Europe this quarter at 4.7%, driven by services growing at 1.4% thanks to a balanced volume value strategy and an exceptional IT and IS quarters, notably in Poland. NetAds remains very robust in both mobile and fixed broadband, with mobile customer base reaching 22 million. Convergence revenue showed once again a strong performance, increasing by close to 6%. Looking ahead, we do confirm as well our 2025 outlook with a low single-digit EBITDA growth. Moving to orange business, revenues are impacted by last year's portfolio pruning, by the difficult IT market, and by the French macro environment. In that context, orange cyber defense growth remains solid at over 6% in the first nine months. In parallel, we are accelerating our transformation initiatives, focusing on growth areas such as sovereignty, security, while stepping up our effort to optimize our cost base. Nevertheless, considering the complex condition of the global IT market and the French market macroenvironment, the ambition to have EBITDA decrease in 25 versus 24 is difficult. Let's complete with Masse Orange. Our joint ventures, which continues to create value with a strong focus on delivering synergies, which are close to our 300 million euro target by year-end. In this competitive market, we achieved strong net ads in the mobile segment and maintained stable volumes in fixed. Revenues are up 1.7% this quarter. Services revenues benefiting from strong growth in both B2B and our new business initiatives which offset the negative mix effect in a challenging telco market. We have been as well able to close strategic alliance with Tier 1 partners in energy, insurance and alarms. The positive momentum on equipment sales also fueled growth in third quarters and is helping to extend the lifetime value of our customers. Lastly, we do confirm our outlook for 2025 for Mace Orange. Back to you, Christelle, for the conclusion.