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France Telecom achieved its 2009 commercial and financial objectives, with an organic cash flow of 8.35 billion euros

Saturday, February 27, 2010

Note: the reported figures exclude activities in the United Kingdom, which are no longer consolidated following the announcement in September 2009 of the planned merger of the Orange and T-Mobile operations in the United Kingdom. The United Kingdom segment is now treated as a discontinued operation in the financial statements.

• strong growth in the total number of customers, with 193 million customers at 31 December 2009 (+5.7%)
• consolidated revenues of 45.944 billion euros, down 1.8% on a comparable basis (50.952 billion euros including the UK). Excluding the impact of regulatory measures, revenues rose 0.1% for 2009
• restated EBITDA of 16.327 billion euros with a margin of 35.5%, a decrease of 0.5 points on a comparable basis (17.254 billion euros including the UK). Excluding the impact of regulatory measures and new taxes, the restated EBITDA(1) margin rose 0.1 points. The net income Group share was 4.849 billion euros on a comparable basis, a decrease of 6.4% (2.997 billion euros on a reported basis)
• capital expenditure of 5.3 billion euros, for a CAPEX rate of 11.5% of revenues
• organic cash flow of 8.35 billion euros, better than the announced objective
• proposed dividend of 1.40 euros per share for 2009, of which the remaining 0.8 euros will be paid on 17 June 2010
• the Group maintains its ambitions for organic cash flow generation for 2010 and 2011


• an increase in the overall customer base of 5.7% year on year (192.7 million customers at 31 December 2009)
8.8% growth in the mobile customer base (132.6 million customers)
4.1% rise in ADSL broadband subscribers (13.5 million customers) and very rapid growth of digital TV, with 3.2 million subscribers at 31 December 2009 for a year-on-year increase of 53%


• revenue growth of 0.1%, excluding regulatory impact:
1.6% growth of operations in France, including a 5.0% increase in mobile services revenues
5.8% growth in Africa and the Middle East
3.1% growth in Western Europe, driven by Belgium
other operations continued to be affected by the deterioration in the economic environment, particularly Romania where revenues were down 16.7% and the Enterprise segment which was down 3.5%
revenues improved in the 4th quarter of 2009, driven by Western Europe, Spain, Africa and the Middle East

• restated EBITDA margin of 35.5%, a 0.5-point decrease compared with 2008, reflecting the impact of regulatory measures and new taxes
excluding the provision for the “part time for seniors” plan, EBITDA margins for France and the Enterprise segment are stable
significantly improved profitability of mobile services in Spain (+1.1 points)
the EBITDA margin trend for the Rest of World was impacted both by new operations and the economic environment in Central Europe (-2.5 points)

• capital expenditure was 5.3 billion euros (11.5% of revenues), compared with 6.3 billion euros in 2008 (13.4% of revenues) on a comparable basis. (CAPEX including the United Kingdom was 5.66 billion euros versus 6.87 billion euros in 2008).
This reduction related to:
- the non-recurrence of real estate investments of 163 million euros in 2008
- CAPEX optimization and adjustment to reflect business volumes, particularly relating to 2G networks, IT and fixed legacy services
CAPEX for the 4th quarter was significantly higher than the average level for the first three quarters of the year, in line with seasonal trends seen in previous years

• 4.2% growth in organic cash flow, to 8.35 billion euros, compared with 8.016 billion euros in 2008
This increase in organic cash flow reflects the improvement of the financial results, the decrease in corporate taxes paid, as well as the decline in expenses related to the acquisition of telecommunications licenses

• net financial debt down to 33.9 billion euros at 31 December 2009 (for a net debt to restated EBITDA ratio of 1.97), compared with 35.9 billion euros at 31 December 2008 (a ratio of 1.96). Excluding the impact of the public offer for ECMS shares currently underway (1.082 billion euros), net financial debt was 32.9 billion euros at 31 December 2009, for a net debt to restated EBITDA ratio of 1.90, in line with the Group’s financial policy

• net income Group share (attributable to equity holders of France Telecom) declined 6.4% on a comparable basis(2) , to 4.849 billion euros; on a reported basis, it fell to 2.997 billion euros, compared with 4.069 billion euros in 2008



Commenting on the Group’s 2009 consolidated results, Didier Lombard, Chairman and Chief Executive Officer of France Telecom, said: “The Group’s performance in 2009 confirms the strategy undertaken in 2005 to position the company as an integrated operator. Since then, the Group has significantly increased its customer base and its geographical footprint while capitalizing on new technologies, thus enabling the Group to look to the future with confidence. As I hand over to Stéphane Richard, I would like to express my gratitude towards all of the Group’s employees for this shared success.”

Stéphane Richard, Chief Executive Officer designate of France Telecom, added: “I would first like to thank Didier Lombard for leading the Group’s transformation from being a national monopoly to a robust multi-national group that can boast more than 190 million customers and 180,000 employees in 32 countries, all while keeping a tight reign on its financial performance. It is an outstanding group blessed with many excellent qualities, even as it faces a crisis of confidence in France. We are working to recenter the business to provide a renewed outlook for the Group as a whole. This new project, which will be announced before the summer, aims to reposition both customers and employees firmly at the heart of the executive management’s priorities in a way that balances economic performance with social considerations while retaining our leadership position in innovation. This is the exciting task that lies ahead for me and the new management team.”



additional information
The Board of Directors of France Telecom SA met on 24 February 2010 and examined the Group’s consolidated and non-consolidated financial statements.
The Group’s statutory auditors carried out their audit of these financial statements and the audit reports pertaining to their certification are in the process of being issued.
More information is available on France Telecom's websites:
www.orange.com
www.francetelecom.com



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