Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Orange Polska SA (FRA:TPA1, Financial) reported strong Q3 results, confirming their full-year guidance.
- The company demonstrated technological leadership during the Paris 2024 Olympics, being the sole operator providing full connectivity.
- Middle East and Africa regions delivered the sixth consecutive quarter of double-digit growth.
- The company sustained strong fiber momentum with over 1 million FTTH net additions in the last 12 months.
- Convergent revenues increased by almost 5%, representing 80% of Q3 retail growth excluding PSTN.
Negative Points
- The mobile market in France remains competitive, particularly at the low end, impacting revenue growth.
- Orange business revenues decreased due to complex IT market conditions.
- Wholesale revenues in France declined by 3.3%, affecting overall revenue growth.
- The IT services segment in Poland experienced a slowdown, attributed to stagnation in the public sector.
- There is ongoing pressure in the pure IT segment, which could impact the turnaround plans for Orange Business.
Q & A Highlights
Q: How do you view the impact of new convergent tariffs launched by competitors in France, and how does it compare to recent mobile price increases?
A: Christel Heydemann, CEO of Orange SA, stated that convergence is a core pillar of their strategy, focusing on customer retention. They see competitors' convergent offers as positive, aiming to increase customer value. Jean-Francois Fallacher, CEO of Orange France, added that their new convergent offer was planned long before competitors' moves and is designed to stabilize their convergent base. They have not observed any significant churn impact from these competitive moves.
Q: Can you explain the decline in the convergent base in the first three quarters and your strategy for Africa and the Middle East?
A: Jean-Francois Fallacher noted that the decline in the convergent base was negligible and due to various minor factors. Christel Heydemann highlighted that in Africa and the Middle East, growth is driven by mobile data adoption and a diverse country portfolio. They are confident in the region's growth potential, with no significant impact from Orange Money on ARPU.
Q: What are your expectations around tax impacts in France, and how did wholesale revenues contribute to EBITDA?
A: Laurent Martinez, CFO of Orange SA, mentioned that the tax impact is still under discussion in the parliament, with potential limited effects. On wholesale revenues, Christel Heydemann explained that Q3 saw seasonality effects, but they expect stability for the full year, aligning with their long-term trajectory.
Q: How do you view the pricing environment in France and the potential fiber JV in Spain?
A: Christel Heydemann emphasized their strategy of focusing on value and customer retention in France, despite competitive pricing dynamics. Regarding the fiber JV in Spain, she noted that while it could have financial structuring impacts, it does not alter their deleveraging objectives for Mass Orange.
Q: Can you discuss your strategy for fixed wireless access and your view on potential tower consolidation in Europe?
A: Jean-Francois Fallacher explained that fixed wireless access is part of their strategy, especially in areas without fiber. Christel Heydemann stated that they focus on increasing tenancy ratios for their towers and are not interested in pure financial engineering for tower consolidation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
