ORANGE : First-half 2016 financial information

• The Group's commercial momentum in the 2nd quarter of 2016 confirms the success of very high-speed broadband, both fixed and mobile, in Europe: at 30 June 2016, there were 22.7 million 4G customers in Europe (x 1.9 year on year on a comparable basis) and 2.5 million fibre customers (x 2.1 in one year).
  In France, there were 9.4 million 4G customers at 30 June 2016 (x 1.7 year on year) and net additions of mobile contracts (+153,000) were almost four times higher than in the 1st quarter. Fixed broadband was also very dynamic, with 93,000 net additions in the 2nd quarter, led by fibre (+106,000), with 1.181 million customers at 30 June 2016.
  In Spain, fibre was up sharply with 197,000 net additions in the 2nd quarter and 1.217 million customers at 30 June 2016. 4G also grew rapidly with 6.4 million customers at 30 June 2016 (x 1.8 year on year on a comparable basis).
  In Poland, mobile contract net additions remained at a very high level (+222,000) for the third consecutive quarter, while mobile contract net additions in Belgium of 18,000 in the 2nd quarter confirmed the return to growth of the previous quarters.
  In Africa and the Middle East, the mobile customer base trend (108.5 million customers at 30 June 2016) was affected by a strengthened requirement to verify the identities of customers in certain countries. Mobile data services nonetheless remained very buoyant, with revenues up 44% in the 2nd quarter. Orange Money had 19 million customers at 30 June 2016 (+36% year on year).
• Revenues were 20.079 billion euros in the 1st half of 2016, up 0.3%, a continuation of the growth in the 2nd half of 2015, which was also up 0.3% (on a comparable basis).
  In the 2nd quarter of 2016, revenues were stable after rising 0.6% in the 1st quarter. Growth accelerated in Spain (+6.2% after rising 1.8% in the 1st quarter). In Africa and the Middle East, mobile data services and Orange Money remained very dynamic. The Enterprise segment rose 1.2% over the half, led by IT and integration services. These favourable trends offset the decline in national roaming in France and the first effects of price reductions for roaming in Europe.
• First-half Restated EBITDA was 5.913 billion euros, down 0.6% in relation to the 1st half of 2015 on a comparable basis. The restated EBITDA margin was 29.4%, a decline of 0.3 percentage points compared with the 1st half of 2015.
  In the 2nd quarter, restated EBITDA rose 0.1% after falling 1.6% in the 1st quarter. The Group thus confirms its objective to achieve a full-year restated EBITDA for 2016 higher than that achieved in 2015 on a comparable basis.

• Operating income was 2.141 billion euros for the 1st half of 2016, a decrease of 123 million euros in relation to the 1st half of 2015. The increase in amortisation and depreciation, linked in particular to the acquisition of Jazztel and the full consolidation of Médi Telecom, and the recognition of an impairment related to Egypt were partially offset by the increase in reported EBITDA.
• Net income was 3.323 billion euros in the 1st half of 2016, an increase of 2.050 billion euros compared to the 1st half of 2015 mainly related to the sale of EE which occurred in January 2016. Net income attributable to equity owners of the Group was 3.168 billion euros in the 1st half of 2016, compared with 1.099 billion euros in the 1st half of 2015.
• CAPEX (3.167 billion euros in the 1st half of 2016) climbed 7.8% on a comparable basis, in line with the Essentiels2020 strategic plan, and represented 15.8% of revenues (+1.1 percentage points compared to the 1st half of 2015). Investment in very high-speed fixed and mobile broadband (fibre, 4G and 4G+) grew rapidly. Added to this was the increased investment in data centres and in customer equipment with the new Livebox launched on May 19th in France, along with the opening of new Smart Stores.
• Net debt was 24.462 billion euros at 30 June 2016, a decrease of 2.090 billion euros compared with 31 December 2015. After selling its interest in EE, the Group continued its policy of selective acquisition and investment in very high-speed broadband and licences. The ratio of net debt to restated EBITDA was 1.95x at 30 June 2016, versus 2.01x at 31 December 2015, in line with the objective of a ratio of around 2x in the medium term.

For the full year 2016, Orange confirms that restated EBITDA will be higher than in 2015 on a comparable basis. This objective will be supported by continued commercial momentum, investment
and efforts on the cost structure. The Group also confirms the objective of a ratio of net debt to restated EBITDA of around 2x in the medium term to preserve Orange's financial strength and investment capacity. Within this framework, the Group maintains a policy of selective acquisition and value creation by concentrating on markets in which it is already present.
The Group plans to propose the payment of a dividend of 0.60 euros per share for 2016. An interim dividend for 2016 of 0.20 euros per share will be paid on 7 December 2016.

Commenting on the first-half 2016 results, Orange Group Chairman and CEO Stéphane Richard said: 'The first-half results again confirm the Group's positive momentum, enabling us to reaffirm our
objective of growth in restated EBITDA for the year 2016. The revenue growth seen in the first half illustrates the quality of our commercial performance across all our areas of operation, and was achieved in markets that remain highly competitive, particularly France which experienced aggressive promotional activity during the first half. In Europe, business was driven by the very high-speed fixed and mobile activities. In one year we have doubled both our fiber customer base to 2.5 million customers as well as our 4G customer base, with nearly 23 million customers. This good performance underscores the success of our Essentials2020 strategy of investment in fiber and 4G networks, with strong growth over the period, and in the quality of the customer experience, with in particular the opening of new Smart Store outlets and the launch of the new Livebox in France. The Africa and Middle East region remains a growth area. We have continued our development with several acquisitions, effective in the first half, representing 12 million customers and enabling us to enter Liberia, Burkina Faso, and Sierra Leone, and to consolidate our business in the Democratic Republic of Congo.'

Excluding machine-to-machine.
EBITDA before adjustments.
In the amount received, net of transaction costs, of 4.5 billion euros. Added to this were 4% of the shares of BT.
Subject to the approval of the Annual General Meeting of shareholders.
The ex-dividend date is set at 5 December 2016 and the record date at 6 December 2016.

The entire presse release is available on PDF file