As filed with the Securities and Exchange Commission on March 29, 2024
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report _____________
For the transition period from _____________ to _______________
Commission File Number: 001-14712
ORANGE
(Exact name of Registrant as specified in its charter)
Not applicable (Translation of Registrant’s name into English) |
111 quai du Président Roosevelt 92130 Issy-les-Moulineaux France |
French Republic (Jurisdiction of incorporation or organization) |
(Address of principal executive offices)
Contact person: Cédric Testut, tel +33 1 44 44 21 05, orange.regulatedinfo@orange.com
111 quai du Président Roosevelt, 92130 Issy-les-Moulineaux, France
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
American Depositary Shares, each representing one Ordinary Share, nominal value €4.00 per share |
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ORAN |
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New York Stock Exchange |
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Ordinary Shares, nominal value €4.00 per share* |
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New York Stock Exchange* |
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* Listed, not for trading or quotation purposes, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission. |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Ordinary Shares, nominal value €4.00 per share 2,657,627,456 as of December 31, 2023
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ |
No ☐ |
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐ |
No ☒ |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Yes ☒ |
No ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ |
No ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or an emerging growth company.
See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Emerging growth company ☐ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards* provided pursuant to Section 13(a) of the Exchange Act. ☐
*The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued by the International Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐ |
Item 18 ☐ |
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ |
No ☒ |
Presentation of information
The consolidated financial statements contained in this annual report of Orange on Form 20-F for the year ended December 31, 2023 (the “Annual Report on Form 20-F”) have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”), as of December 31, 2023.
This Form 20-F contains certain financial information presented on a “comparable basis”. The basis for the presentation of this financial information is set out in Item 5 Operating and Financial Review and Prospects. The unaudited financial information presented on a comparable basis is not intended to be a substitute for, and should be read in conjunction with, the Consolidated Financial Statements, including the Notes thereto.
In this Form 20-F, references to the “EU” are to the European Union, references to the “euro” or “€” are to the euro currency of the EU, references to the “United States” or “U.S.” are to the United States of America and references to “U.S. dollars” or “$” are to United States dollars.
References to the “2023 Universal Registration Document” are references only to those pages and sections of Orange’s Universal Registration Document for the year ended December 31, 2023 that are attached in Exhibit 15.1 to this Form 20-F and form a part hereof. For the avoidance of doubt, all references to EBITDAaL, organic cash flow and related terms, which are non-IFRS financial indicators, are explicitly excluded from this Form 20-F and the 2023 Universal Registration Document attached in Exhibit 15.1 except as otherwise required including for segment reporting. The 2023 Universal Registration Document in its entirety was furnished to the SEC in a Report on Form 6-K on March 29, 2024. Other than as expressly provided herein, the 2023 Universal Registration Document is not incorporated herein by reference.
The references to websites contained in this Form 20-F are provided for reference only; the information contained on the referenced websites is not incorporated by reference in this Form 20-F.
As used in this Form 20-F, the terms “Orange”, “Orange group” and “the Group”, unless the context otherwise requires, refer to Orange together with its consolidated subsidiaries, and “Orange SA”, as well as “the Company”, refer only to the parent company, a French société anonyme (corporation), without its subsidiaries.
References to “the Shares” are references to Orange’s Ordinary Shares, nominal value €4.00 per share, and references to “the ADSs” are to Orange’s American Depositary Shares (each representing one Ordinary Share), which are evidenced by American Depositary Receipts (“ADRs”).
References to the Consolidated Financial Statements are references to the consolidated financial statements included in Item 18.
2023 Form 20-F / ORANGE – 2
Cautionary statement regarding forward-looking statements
This Annual Report on Form 20-F contains forward-looking statements - within the meaning of Section 27A of the U.S. Securities Act of 1933 (“the Securities Act”) or Section 21E of the U.S. Securities Exchange Act of 1934 (“the Exchange Act”), including, without limitation, certain statements made in Item 4.B Business overview as well as in Item 5 Operating and Financial Review and Prospects. Forward-looking statements can be identified by the use of forward-looking terminology such as “should”, “could”, “can”, “contemplate”, "would", “will”, “expect”, “consider”, “believe”, “anticipate”, “pursue”, “foresee”, “plan”, "project", "forecast", "guideline", “predict”, "intend", "is designed to", "be aimed at", “strategy”, “objective”, “prospects”, "outlook", "trends", "may", "might", "target", “aim”, “change”, “intention”, “ambition”, “risk”, “potential”, “commitment” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by the forward-looking nature of discussions of strategy, plans or intentions.
Although Orange believes these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to Orange or not currently considered material by Orange, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved.
Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include the following:
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Orange’s broad geographic footprint and the scope of its activities expose it to geopolitical, macroeconomic, security and operational risks; |
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Orange is exposed to risks of disclosure or inappropriate modification of stakeholder data, particularly in the event of cyber - attacks; |
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The shift of Orange’s ecosystem toward a more open and fragmented model enables global non-telecommunication actors to take an increasing share of the service and network value chain; |
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The high concentration of Orange’s critical suppliers, the growing use of outsourcing, as well as global supply tensions represent a risk for the Group’s activities; |
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A large part of Orange's revenues is generated in both highly competitive and regulated markets, where pressure on prices remains strong in an inflationary context; |
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Orange is exposed to the risk of interruption to its services, particularly in the event of cyberattacks, conflicts or a shortage of strategic resources; |
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Orange’s technical infrastructure is vulnerable to intentional or accidental damage, but also to natural disasters, the occurrence of which has increased due to climate change; |
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Faced with the high connectivity needs linked to changing uses, Orange must accelerate the roll-out of its networks while improving the quality of service, but such investments are constrained by the availability of its resources; |
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Mobile Financial Services activities pose risks to Orange that are specific to this sector in each country covered by its services; |
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The scope of Orange’s business activities and the interconnection of its networks expose it to numerous acts of technical fraud, specific to the telecommunication sector; |
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Orange operates in highly regulated markets, and its business activities and earnings could be materially affected by changes in laws or regulations, including those that are extraterritorial in nature, or by changes in government policy; |
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Orange is exposed, particularly as a result of cyber-attacks, to risks of disclosure or inappropriate modification of personal data, especially those of its customers; |
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Orange faces various internal and external risks relating to human health and safety; |
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Orange may find it difficult to obtain and retain the skills needed for its business on a long-term basis due to numerous employee departures and ever-faster developments in its activities; |
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The commitments made by Orange in terms of reducing its environmental impacts may not be met because they are largely based on its value chain and depend on the rapid development of new uses and technologies. |
Forward-looking statements speak only as of the date they are made. Other than as required by law, Orange does not undertake any obligation to update them in light of new information or future developments.
The material risks are described in Item 3 Key Information – 3.D Risk factors.
This Annual Report on Form 20-F should be read completely and with the documents that are referenced herein and filed as exhibits and with the understanding that Orange’s actual future results may be materially different from what is expected. Orange qualifies all forward-looking statements by these cautionary statements.
2023 Form 20-F / ORANGE – 3
Table of contents
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Disclosure Pursuant to Section 13 (r) of the United States Exchange Act of 1934 |
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2023 Form 20-F / ORANGE – 4
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
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Management’s annual report on internal control over financial reporting |
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PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
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2023 Form 20-F / ORANGE – 5
PART I
Item 1 |
Identity of directors, senior management and advisers |
Not applicable.
Item 2 |
Offer statistics and expected timetable |
Not applicable.
Item 3 |
Key information |
3.A |
[RESERVED] |
3.B |
CAPITALIZATION AND INDEBTEDNESS |
Not applicable.
3.C |
REASONS FOR THE OFFER AND USE OF PROCEEDS |
Not applicable.
3.D |
RISK FACTORS |
In addition to the information contained in this Annual Report on Form 20-F, investors should also carefully consider the risks outlined below before deciding whether to invest in Orange’s securities. Orange’s view as of the date of this Annual Report on Form 20-F is that these risks could have a material negative effect (i) on its business, financial position, profits, reputation or outlook or (ii) on its stakeholders. In addition, other risks and uncertainties, as yet unidentified or, as of the date of this Annual Report on Form 20-F, not currently considered to be material by Orange, could have similar negative effects. Investors could lose all or part of their investment if these risks materialize.
The risks are presented in this section under five categories, which are not presented in order of importance. However, within each category, risk factors are presented in descending order of importance, as determined by Orange at the date of filing this Annual Report on Form 20-F. Orange may change its view of their relative importance at any time, particularly if new external or internal facts come to light.
Although not incorporated by reference into this Item 3.D, several other sections of this document also discuss risks in some detail:
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with respect to risks relating to regulations and regulatory pressure, see Section 1.7 Regulation of telecommunication activities of the 2023 Universal Registration Document filed as Exhibit 15.1 of this document and Note 18 Litigation to the Consolidated Financial Statements included in Item 18; |
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with respect to risks relating to litigation involving the Group, see also Note 10 Taxes and Note 18 Litigation to the Consolidated Financial Statements, as well as Section 3.2.1 Recent events of the 2023 Universal Registration Document filed as Exhibit 15.1 of this document, where applicable; |
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with respect to financial risks, see: |
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Note 2.5.4 to the Consolidated Financial Statements included in Item 18 for macroeconomic context, |
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Note 7 to the Consolidated Financial Statements included in Item 18 for the key assumptions used to determine the recoverable amount of the main activities and specific risk factors that might affect this amount, |
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Notes 7 and 8 to the Consolidated Financial Statements included in Item 18 for asset impairments, |
2023 Form 20-F / ORANGE – 6
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Note 13.8 to the Consolidated Financial Statements included in Item 18 for derivatives, |
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Note 14 to the Consolidated Financial Statements included in Item 18 for the management of interest rate risk, foreign exchange risk, liquidity risk, covenants, credit risk and counterparty risk, and equity market risk. The policies for managing interest rate, foreign exchange and liquidity risks are set by the Treasury and Financing Committee. See Section 5.2.2.3 Executive Committee and Group governance committees of the 2023 Universal Registration Document filed as Exhibit 15.1 of this document; |
Operational risks
Operational risks mainly include risks related to the telecommunications sector, and risks related to Orange’s strategy and business. In addition, risks with potentially significant employee-related, social and environmental consequences are presented in the section “-Non-financial risks” below.
Orange’s broad geographic footprint and the scope of its activities expose it to geopolitical, macroeconomic, security and operational risks.
The proliferation of national and international crises and conflicts affects the general business climate and the conduct of the Group’s activities. In that sense, the population movements following the conflicts in Ukraine and the Middle East put pressure on the operations of Orange’s subsidiaries bordering the conflict areas.
In addition, Orange has a large presence in countries and geographical areas marked by political or economic instability. This instability exposes Orange to decisions by governmental or judicial authorities contrary to its interests, sometimes combined with heightened tax or regulatory pressure. While certain additional taxes or fines can be disputed, the authorities can also decide to suspend services.
In some countries where the Group is present, its contribution to local economic activity is significant. However, its image is sometimes linked to that of the French government, exposing the Group to potential abuse or reprisals.
Lastly, threats to certain geopolitical, diplomatic or trade-related balances may result in tighter protectionist measures and/or current or future international economic sanctions against certain countries, which could affect the value or sustainability of investments made in those countries.
Such situations could call into question the profitability outlook used when making investment decisions and could adversely impact the Group’s financial position and earnings.
Orange is exposed to risks of disclosure or inappropriate modification of data, particularly in the event of cyber-attacks.
Orange’s business activities require the transmission through its networks and storage on its infrastructure of data, including that belonging to its B2B or government customers, suppliers, partners and all stakeholders other than natural persons (see Section “-Non-financial risks” below and section 2.2.3.4 for information relating to risks regarding personal data).
Despite its infrastructure protection systems, Orange’s business activities expose it to risks of service disruption, loss, disclosure, unauthorized communication to third parties or inappropriate modification of data, in particular when setting up new services or apps or their updates. These risks are heightened by the roll-out of new technologies, the growing use of Cloud services, as well as the outsourcing of digital services and the development of new activities (for example in the field of connected devices).
The occurrence of these risks could, in particular, result from malicious acts (such as cyber-attacks) aimed in particular at the data in Orange’s possession, and also inadvertently from within Orange or Group partners to which certain business activities are outsourced.
The Group could be held liable if these risks were to materialize. In addition, its reputation could be seriously harmed because Orange’s positioning as a trusted operator comes with high expectations from its stakeholders in terms of security, which could have a significant adverse effect on future earnings.
The shift of Orange’s ecosystem toward a more open and fragmented model enables global non-telecommunication actors to take an increasing share of the service and network value chain.
Competition with numerous actors, such as Over-The-Top (OTT) service providers and Internet market leaders, is spreading to the majority of the value-added services that use existing networks offered by Orange, leading to fiercer competition at certain points along the value chain. In that sense, new actors (SD-WAN, etc.) and other solution and service providers, particularly Cloud solution and service providers, are positioning themselves as aggregators of such services, a role traditionally filled by integrated operators such as Orange. At the same time, disruptive technologies, such as the development of voice traffic via videoconferencing apps, allow new non-telecommunication actors to capture revenue streams historically going to telecommunication operators.
Furthermore, the evolution of the ecosystem is marked by the massive investments made by new actors in infrastructure, specifically in that based on new technologies such as the Cloud and network virtualization, but also in submarine cables in which Orange is no longer necessarily a partner.
Lastly, the opening up and fragmentation of networks enable existing actors (such as infrastructure managers, network businesses not in the telecommunication sector such as railways and local authorities) to offer network services.
Operators such as Orange, for which the direct relationship with customers is a source of value, could therefore be marginalized. Likewise, the massive investment by new actors in infrastructure could, over time, make the Group increasingly dependent on them; some already control, for example, 80% of submarine cables or their capacity.
These developments could adversely affect Orange’s revenues and margins.
The high concentration of Orange’s critical suppliers, the growing use of outsourcing, as well as global supply tensions represent a risk for the Group’s activities.
Orange depends, particularly in the areas of network infrastructure, information systems and mobile handsets, on a limited number of critical suppliers operating in highly concentrated markets. As such, any unilateral decision made by a key partner could be detrimental to the economic, strategic or compliance interests of the Group.
Despite Orange’s secure and alternative purchasing policies, this dependence poses a risk to the Group’s current or future business in the event that one of these suppliers defaults or decides to change its business practices, regardless of the cause, including in the event of international economic sanctions against such critical supplier or its country of origin.
2023 Form 20-F / ORANGE – 7
The risk of supply disruption, including in the energy sector, is heightened by shortages linked to specific conditions in some markets, such as the market for electronic components or the supply of essential resources, and by the intensity of the global economic recovery which has caused tension in the supply of many products and raw materials, including minerals and rare resources needed for the production of electronic equipment.
If one of its critical suppliers failed to deliver on Orange’s purchasing requirements, Orange’s business, earnings and reputation could be adversely affected on a long-term basis.
A large part of Orange’s revenues is generated in both highly competitive and regulated markets where pressure on prices remains strong in an inflationary context.
In the current period of inflation, during which customers may question the need for some premium services, the service price increases by Orange may not be enough to maintain its margins in the highly competitive environment in which the Group operates, and given the technological and societal disruption that affect its markets. In addition, the decisions of sector regulators and competition authorities that regulate some of these prices or markets do not always allow a fair valuation of Orange’s services, similarly affecting its revenues and margins.
Furthermore, the difficult economic environment, marked by inflation and rising energy costs, is weighing on Orange’s operating margins and, considering its pricing model, it is not certain that it will be able to pass on to customers all the cost increases that it may incur.
Orange is exposed to the risk of interruption to its services, particularly in the event of cyberattacks, conflicts or a shortage of strategic resources.
Due to the essential nature of telecommunication, compounded by the widespread take-up of teleworking and the digitization of businesses, the networks of telecommunication operators are particularly exposed to risks of service disruption due to deliberate malicious and sometimes criminal acts, such as cyber-attacks. Increasingly sophisticated, these currently constitute a permanent threat to individuals and businesses alike. Moreover, in the event of conflicts, telecommunication networks and associated infrastructure are also the preferred target of sabotage or pressure from governmental or judicial authorities.
Interruptions to the service provided to customers may also be unintentional. They may occur as a result of extreme weather events, a shortage of essential resources, human error, particularly when subcontractors work on shared infrastructure, in the event of the failure of a critical supplier, or when new apps or software are rolled out or updated. They could also occur following capacity saturation linked to exceptional events such as population displacements in a context of war. With specific reference to the Paris 2024 Olympic Games, where Orange will be the sole network provider for broadcasts, service interruption would have negative financial impacts and significantly harm the Group’s brand image and reputation.
Despite the business continuity and crisis management measures taken by Orange to protect its networks, resize them and maintain control of its outsourced infrastructure, the ever-increasing occurrence of cyber-attacks, the implementation of all-IP technologies, the increase in the size of service platforms as well as the consolidation of equipment in a reduced number of locations mean that service interruptions could in the future affect a larger number of customers simultaneously or even several countries at the same time.
2023 Form 20-F / ORANGE – 8
Such events may disrupt the activity, not only of Orange customers but – more widely – of all citizens, and may even affect their health and safety. They could thus cause Orange to be held liable, lead to a reduction in traffic and revenues, and therefore in earnings and outlook, and cause serious damage to its reputation. If they were to occur at the level of one or several countries, they could also trigger crisis situations, potentially affecting the security of the countries concerned.
Orange’s technical infrastructure is vulnerable to intentional or accidental damage, but also to natural disasters, the occurrence of which has increased due to climate change.
In the context of wars, terrorism, social or activist movements, or any other situation of internal or external conflict, Orange’s infrastructure is vulnerable and may be the target of sabotage or other intentional damage. In addition, accidental events such as fires or errors or negligence during civil engineering work on infrastructure could also lead to significant destruction of Orange’s facilities.
Lastly, Orange’s infrastructure can also be damaged by natural disasters (earthquakes, floods, storms) whether or not related to weather phenomena, the occurrence and intensity of which are increasing with ongoing climate change. Thus, in the medium term, rising sea levels could affect sites and facilities located near the coast more often.
Whether such damage is intentional or not, it can lead to service interruptions in a context where the expectations of Orange’s customers and other stakeholders remain very high regarding Orange’s capacity to provide service continuity, including in the case of extreme weather events.
Furthermore, while large-scale disasters are likely to aggravate losses and associated damage, the coverage of such losses by insurers could further decrease, leaving Orange to bear significant costs that could significantly affect its financial position and outlook.
Faced with the high connectivity needs linked to changing uses, Orange must accelerate the roll-out of its networks while improving the quality of service, but such investments are constrained by the availability of its resources.
Orange must accelerate the roll-out of its fixed and mobile broadband and very high-speed broadband networks in the regions and improve the quality of service of its networks to meet the high demand for connectivity linked to changing uses. Moreover, Orange has made commitments regarding geographic coverage and quality of service to central government and local authorities in France. However, Orange’s investment capacity is constrained by the availability of human, industrial and financial resources, both its own and those of its subcontractors. Failure to meet these expectations in a balanced manner could have an adverse effect on Orange’s earnings and reputation.
Mobile Financial Services activities pose risks to Orange that are specific to this sector in each country covered by its services.
Mobile Financial Services, including banking services, expose Orange to industry-specific risks such as money laundering, terrorist financing and non-compliance with economic sanctions programs, as well as common risks that are particularly sensitive in Mobile Financial Services, such as fraud, cyber-attacks and service interruption.
If they were to materialize, these risks could have a material adverse effect on the Group’s reputation and financial position.
The Group’s brand policy represents a risk for the Orange brand image.
The vast majority of the Group’s business activities are operated under the single Orange brand. Although the Group takes great care to preserve the value of the major asset that is the Orange brand, the execution risks inherent in each of its business activities could, if they materialize, affect the image of the Orange brand and thus damage the reputation of the entire Group, particularly in 2024 when Orange will be the sole network provider for Olympic and Paralympic Games broadcasts.
In the event of significant damage to the Orange brand image, the Group’s earnings and outlook could be adversely affected.
Orange’s new strategy may not yield the expected results.
The success of the strategy Lead the Future (see Section 1.2.3 The Orange group strategy) could depend on the accomplishment of the transformation projects which require, in particular, the support of Orange’s employees and customers. It could also depend on changes in the legal and regulatory framework and a fairer application of the existing legal and regulatory framework to telecommunication operators. The implementation of this new strategy also involves the continuation of operational efficiency programs such as the digitization of processes and cost management and capital allocation policies centered on the creation of value, which may not bring the expected results. Lastly, current geopolitical tensions could also affect how this strategy plays out (see “Orange’s broad geographic footprint and the scope of its activities expose it to geopolitical, macroeconomic, security and operational risks” above).
Should Orange only be able to partially implement its new strategy under the proposed plan, the Group may not be able to achieve all of the objectives it has set for itself, which would adversely affect its growth and profitability outlook.
2023 Form 20-F / ORANGE – 9
The scope of Orange’s business activities and the interconnection of its networks expose it to numerous acts of technical fraud, specific to the telecommunication sector.
Orange has to deal with various types of fraud on its telecommunication services activities, which may target it directly or its customers. In a context of increasing technological complexity, network virtualization, and acceleration of the implementation of new services or new applications, types of fraud that are more difficult to detect or control may also appear, favored for instance by the development of mass data processing and artificial intelligence, which increases the scope for possible attacks, particularly cyber-attacks.
If a material fraud were to occur, Orange’s revenues, margins, service quality and reputation could be adversely affected.
Legal risks
Orange operates in highly regulated markets, and its business activities and earnings could be materially affected by changes in laws or regulations, including those that are extraterritorial in nature, or by changes in government policy.
In most of the countries where it operates, Orange has little flexibility to manage its business activities because it must comply with numerous restrictive requirements relating to the provision of its products and services, primarily relating to obtaining and renewing licenses to conduct its activities. Orange also has to comply with its own regulatory obligations and oversight by authorities seeking to maintain effective market competition, as well as, in some countries, additional constraints owing to its historically dominant position in the fixed telecommunication market.
Orange’s business and earnings could be materially affected by changes in laws or regulations, some of which may be extraterritorial in nature, or by changes in government policy, including decisions made by regulatory or competition authorities regarding:
− | the modification or renewal under unfavorable conditions, or even the withdrawal, of fixed or mobile operator’s licenses; |
− | conditions for accessing networks (primarily in connection with roaming or infrastructure sharing) or rolling-out new networks such as Fiber; |
− | service rates; |
− | the introduction of new taxes or increases in existing taxes on telecommunication companies, including the introduction of taxes aimed at facilitating the achievement of countries’ carbon neutrality targets (such as taxes on use or handset purchases); |
− | banking and financial supervision, and any related compliance regulations such as laws and regulations on economic sanctions; |
− | non-financial corporate obligations; |
− | data security; |
− | merger and acquisition policy; |
− | regulations affecting operators in competing sectors, such as cable; |
− | consumer legislation. |
Such changes, developments or decisions could materially adversely affect the Group’s revenues and earnings.
For further information on regulatory risks, see Section 1.7 Regulation of telecommunication activities.
2023 Form 20-F / ORANGE – 10
Orange is regularly involved in litigation, the outcome of which could have a material adverse effect on its earnings, financial position or reputation.
Orange believes that, in general and in all the countries where it operates, it complies in all material respects with the regulations in force relating to its activities and its relations with its partners, suppliers, subcontractors and customers, as well as with the conditions governing its operator’s licenses. However, it is not able to predict the decisions of supervisory or judicial authorities, which are regularly asked to rule on such issues. If Orange were to be ordered by the competent authorities of a country in which it operates to pay an indemnity or a fine, or to suspend certain of its business activities, based on a breach of applicable regulations, its financial position and earnings could be significantly adversely affected.
In addition, Orange (particularly in France and Poland) is frequently involved in proceedings with its competitors and the Regulatory Authorities due to its pre-eminent position in some of the markets where it operates, and the claims made against Orange can be very substantial. In the past, the Group has been fined several tens of millions of euros or even several hundreds of millions of euros for cartel practices or for abuse of dominant position. The Group is also involved in commercial disputes where the stakes can be very high. The outcome of lawsuits is inherently unpredictable.
For proceedings before the European competition authorities, the maximum amount of fines provided for by law is 10% of the consolidated revenues of the offending company (or the Group to which it belongs, as the case may be).
Lastly, due in particular to its relationships with numerous partners, suppliers and subcontractors, Orange is exposed to a growing risk of legal action by various stakeholders from civil society alleging shortcomings on environmental, employee-related or social matters. This could be the case, for instance, if Orange were to distribute products found to contain rare minerals extracted under non-compliant conditions. These legal actions could also aim to compel Orange to finance measures intended to limit the effects of climate change. Such actions could cause significant damage to Orange’s reputation and adversely affect its financial position.
The main proceedings involving Orange are described in Note 10 Taxes and Note 18 Litigation to the Consolidated Financial Statements. Developments in, or the outcome of, some or all of these ongoing proceedings could have a material adverse effect on Orange’s earnings or financial position.
Financial risks
Risk of asset impairment
Changes affecting the economic, political or regulatory environment may result in asset impairment, particularly of goodwill.
At December 31, 2023, the gross value of goodwill recognized by Orange following acquisitions was 33.9 billion euros.
The carrying values of long-term assets, including goodwill, fixed assets and interests in associates and joint ventures, are sensitive to any change in the environment that is different from the assumptions used. Orange recognizes impairment on those assets if events or circumstances occur that entail material adverse changes of a lasting nature, affecting the economic environment or the assumptions or objectives adopted at the time of the acquisition.
Over the past five years, Orange has recognized material impairment of its investments in Romania, Spain, the Democratic Republic of Congo and Jordan. At December 31, 2023, the cumulative amount of goodwill impairment was 10.1 billion euros, excluding impairment of interests in associates and joint ventures which, in certain cases, include goodwill in their carrying value.
New events or unfavorable circumstances could prompt Orange to review the current value of its assets and to recognize further material impairment with an adverse effect on its earnings.
In addition, in the event of a disposal or IPO, the value of certain subsidiaries may be affected by changes in the equity and bond markets.
For further information on goodwill and recoverable amounts (particularly key assumptions and sensitivity), see Note 7 Impairment losses and goodwill and Note 8.3 Impairment of fixed assets to the Consolidated Financial Statements included in Item 18.
Credit-rating risk
A change in Orange’s credit rating could increase the cost of debt and in some cases limit access to the financing it needs.
Orange’s credit rating from rating agencies is based partly on factors beyond its control, namely conditions affecting the telecommunication industry in general or conditions affecting certain countries or regions in which it operates. It may be changed at any time by the rating agencies, in particular as a result of changing economic conditions, a downturn in the Group’s earnings or performance, or changes to its shareholding structure. A prolonged multi-notch downgrade in Orange’s credit rating would have a material adverse effect on its financing terms.
2023 Form 20-F / ORANGE – 11
Liquidity risk
Orange’s earnings and outlook could be affected if conditions of access to capital markets were to become difficult.
Orange mainly finances itself through the bond markets. Very unfavorable changes in the macroeconomic environment could restrict Orange’s access to its usual sources of funds or significantly increase its financing costs due to an increase in market interest rates and/or the spreads applied to its borrowings.
Any inability to access the financial markets for a lasting period and/or obtain financing on reasonable terms would have a material adverse effect on Orange. In particular, the Group may not be able to carry out certain projects or could be forced to allocate a significant portion of its available cash to servicing or repaying its debt, to the detriment of investment or shareholder returns. In any event, Orange’s earnings, cash flows and, more generally, its financial position and flexibility could be adversely affected.
See Note 14.3 Liquidity risk management to the Consolidated Financial Statements, which sets out the various sources of funding available to Orange, the maturity of its debt and changes in its credit rating, as well as Note 14.4 Financial ratios and commitments to sustainability targets, which contains information on the limited commitments of the Orange group in relation to financial ratios and in the event of default or material adverse change.
Market risks
Interest rate risk
Orange’s business activities could be affected by the changes in interest rates.
In the normal course of business, Orange obtains most of its funding from capital markets (particularly the bond market) and makes little use of bank credit.
Since most of its current debt is at a fixed rate, Orange has limited exposure to a short-term rise in interest rates. The Group remains exposed to a sustained and continuous increase in interest rates for its future financing.
To limit exposure to interest rate fluctuations, Orange uses financial instruments (derivatives), but the Company cannot guarantee that transactions carried out with such financial instruments will completely limit its exposure, or that suitable financial instruments will be available at reasonable prices. In the event that Orange cannot use financial instruments or if its financial instruments strategy proves ineffective, its cash flows and earnings may be adversely affected.
In addition, the costs of hedging against interest rate fluctuations could increase in line with market liquidity, banks’ positions, and, more broadly, the macroeconomic situation (or how it is perceived by investors).
Foreign exchange risk
Currency markets can be volatile due to economic and geopolitical conditions which may expose Orange to foreign exchange risk.
The main currencies in which Orange is exposed to a major foreign exchange risk are the Polish zloty, the Egyptian pound, the US dollar, the Jordanian dinar and the Moroccan dirham. Intra-period variations in the average exchange rate of a particular currency could materially affect revenues and expenses denominated in that currency, which could materially affect Orange’s results, such as for example the near 50% devaluation of the Egyptian pound in November 2016. In addition, Orange operates in other monetary zones, in particular in Africa and the Middle East. Depreciation of the currencies of the countries in this region would negatively affect the Group’s consolidated revenues and earnings.
When preparing the Consolidated Financial Statements, the assets and liabilities of foreign subsidiaries are translated into euros at the fiscal year closing rate. This translation could have a negative impact on the consolidated balance sheet, assets and liabilities and equity, for potentially significant amounts, as well as on net income in the event of disposal of these subsidiaries.
The management of foreign exchange risk and an analysis of the sensitivity of the Group’s position to changes in exchange rates are set out in Note 14.2 Foreign exchange risk management to the Consolidated Financial Statements.
2023 Form 20-F / ORANGE – 12
Non-financial risks
Orange is exposed, particularly as a result of cyber-attacks, to risks of disclosure or inappropriate modification of personal data, especially those of its customers.
Orange’s business activities require the transmission via its networks and the storage on its infrastructure of the personal data of its customers, employees or the general public.
Despite its infrastructure protection systems, Orange’s business activities expose it – in terms of infringement of human rights and fundamental freedoms – to risks of loss, disclosure, unauthorized communication to third parties or inappropriate modification of such personal data, in particular when setting up new services or apps or their updates. These risks are heightened by the roll-out of new technologies, the growing use of Cloud services, as well as the outsourcing of digital services and the development of new activities (for example in the field of connected devices). The occurrence of these risks could result in particular from (i) malicious acts (such as cyber-attacks) targeting personal data, (ii) negligence or errors committed within Orange or within the Group’s partners to whom certain operations are outsourced, or (iii) government requests that are not compliant with legal or regulatory requirements (see also the risk factor “The scope of Orange’s business activities, its numerous locations around the world, and its business dealings with a variety of partners may expose the Group to a risk of violating human rights and fundamental freedoms”).
Orange may be held liable in various countries, under personal data protection laws (such as the General Data Protection Regulation (EU) 2016/679 of April 27, 2016, GDPR), which strengthen the rights of individuals and increase the obligations of companies involved in data processing, such as telecommunication operators and financial services providers. If these risks were to materialize, the owners of the data disclosed or modified could suffer damage, and the Group could be held liable, compliance with its purpose could be called into question and its reputation could be materially affected.
Orange faces various internal and external risks relating to human health and safety.
Owing to the specific nature of Orange’s business as an operator and its geographical scope, international conflicts and a context where social tensions and industrial unrest are increasing expose Orange employees and subcontractors to risks to their safety while performing their professional activities.
In addition, in a context of more regular teleworking, Orange’s employees and its subcontractors are exposed to the risks associated with these new working conditions, which are sometimes sources of social isolation, which can also have direct or indirect repercussions on their health or even their safety.
In addition, the Group’s transformation program, the rapid acceleration of the virtualization of interactions and the development of digital tools could generate psychosocial risks, potential sources of physical or psychological disability for individuals. Such risks could also slow the Group’s strategy roll-out and have a material impact on its reputation and operation.
2023 Form 20-F / ORANGE – 13
Orange may find it difficult to obtain and retain the skills needed for its business on a long-term basis due to numerous employee departures and ever-faster developments in its activities.
Every year, a significant number of employees leave the Group or, in France, benefit from end-of-career part-time work arrangements. This trend accelerated in 2023, particularly within the central functions of the various operational headquarters, as part of the implementation of the new intergenerational agreement in December 2021.
At the same time, the need for new skills is growing, whether related to technological developments or the Group’s line of development specifically in terms of rare skills or occupations experiencing shortages in the job market. If Orange’s attractiveness as an employer or its training programs were to prove insufficient, this could reduce its ability to effectively pursue its activities and successfully implement its strategy; its earnings and outlook could be adversely affected by it, and some of the human risks described in the risk factor “Orange faces various internal and external risks relating to human health and safety” could increase.
In addition, without the necessary skills, the Group’s commitment to provide digital support to stakeholders could prove harder to keep.
The commitments made by Orange in terms of reducing its environmental impacts may not be met because they are largely based on its value chain and depend on the rapid development of new uses and technologies.
Orange has made a commitment to be Net Zero Carbon by 2040 and has set itself intermediate objectives to achieve this. The plan initiated by Orange should enable it to limit its environmental footprint and that of its value chain. The implementation of the principles of the circular economy, the many actions aimed at strengthening the control of its energy consumption, and the use of renewable energies or investments in carbon sinks fully contribute to this approach.
A predominant part of Orange’s environmental footprint is, however, linked to its value chain. As such, Orange’s efforts to achieve its commitment to be Net Zero Carbon in 2040 could be jeopardized both by the difficulties that its suppliers and subcontractors could encounter to reduce the footprint of the products and equipment supplied to Orange and by the sharp increase in digital traffic linked in particular to the development of uses.
If Orange’s environmental action plans, particularly during the period of technological transition on fixed and mobile networks, prove insufficient or require the mobilization of unavailable resources, the Group could fail to meet its commitment. This situation could have a significant negative effect on its image and could consequently lead to a loss of confidence among its stakeholders. This could lead, among other things, to a reduction in the number of customers, a loss of attractiveness as an employer, or an increase in the cost of financing. Should they materialize, these risks could, in addition, render Orange liable since these factors as a whole could affect the earnings and outlook of the Group. Beyond potential adverse effects on Orange, this could curb the development of the digital society.
The scope of Orange’s business activities, its numerous locations around the world, and its business dealings with a variety of partners may expose the Group to a risk of violating human rights and fundamental freedoms.
As the Group’s activities and those of its suppliers and subcontractors are carried out in all parts of the world, Orange could, in spite of the implementation of its Vigilance Plan, be exposed to violations of human rights and fundamental freedoms involving third parties with which a direct or indirect link may be established. Such violations may relate to forced labor, modern slavery or human trafficking, the rights of children, non-decent, discriminatory or dangerous working conditions, interference with freedom of association or expression, or privacy. In particular, they could occur in regions where minerals are mined, processed and traded in conflict zones, or areas where human rights are not respected.
If they were to materialize, these risks could have a material adverse impact on Orange, or the relevant suppliers and subcontractors, in terms of image and reputation, and could result in liability for the Group.
In addition, Orange could be forced to comply with injunctions from local authorities other than what is formally required by law and regulations in the sense of having to suspend the operation of certain networks for which Orange is responsible or intercept communications, or even disclose personal data to third parties. Orange may also be compelled by local authorities to suspend or intercept communications that are routed by it.
Such situations could tarnish Orange’s reputation and result in the infringement of the freedom of expression and respect for privacy of the populations of the offending countries.
Orange is exposed to risks of corruption or individual or collective behavior that is not in line with its business ethics.
As the Group’s activities and those of its suppliers, subcontractors and partners cover all regions of the world, Orange could, despite its efforts to continually improve its anti-corruption system in accordance with applicable laws, be exposed to or implicated in cases related to corrupt practices or influence peddling. Similarly, despite its fraud prevention and detection program, Orange could also be the victim of fraudulent behavior or behavior that does not comply with international conventions, its Code of Ethics or its supplier code of conduct. Such behavior may originate from persons or companies with which a direct or indirect link can be established, and may directly or indirectly target Orange, its customers, its business relationships or its employees.
In any event, the Group could be held liable, and Orange’s earnings, service quality and reputation could be adversely affected.
2023 Form 20-F / ORANGE – 14
Orange and some of its stakeholders are exposed to physical and transition risks related to climate change.
In addition to the impacts on Orange’s infrastructure (see Section 2.1.1 Operational risks “Orange’s technical infrastructure is vulnerable to intentional or accidental damage, but also to natural disasters, the occurrence of which has increased due to climate change”), climate change could also worsen the health or economic situation of Orange’s customers and employees, and more generally of populations, potentially generating significant migration flows, particularly in the Africa & Middle East region on which part of the Group’s growth outlook depends.
Despite the climate change mitigation and adaptation measures implemented by Orange, if such events were to occur, Orange could find it more difficult to fulfill its purpose, particularly in terms of its commitment to digital inclusion.
In addition, climate change could have other material impacts on Orange’s business activities; for example, the availability and price of certain raw materials that are in the composition of the products sold or used by Orange as part of its telecommunication services (see Section 2.1.1 Operational risks “A large part of Orange’s revenue is achieved in markets that are both highly competitive and regulated where pressure on price remains strong”); or changes in the regulations applicable to Orange (such as, for example, the introduction of a carbon tax or the ban on the sale of certain products (see Section 2.1.2 Legal risks “Orange operates in highly regulated markets and its business activities and earnings could be materially affected by changes in laws or regulations, including those that are extraterritorial in nature, or by changes in government policy”)). These transition risks could have direct and indirect financial impacts for the telecommunication industry and specifically for Orange.
Exposure to electromagnetic fields from telecommunication equipment could have harmful effects on health and the perception of such a risk could hinder the development of services. Excessive and inappropriate use of telecommunication services and equipment could also have harmful consequences on health.
The concerns raised in many countries regarding the possible human health risks of exposure to electromagnetic fields from telecommunication equipment have generally led public authorities to adopt binding regulations and health authorities to issue various precautions on usage.
There is a consensus among expert groups and health authorities, including the World Health Organization (WHO), that no health risk has been established to date from exposure to electromagnetic fields below the limits recommended by the International Commission on Non-Ionizing Radiation Protection (ICNIRP). The complementary scientific studies conducted to date on some of the spectrums used for 5G have come up with similar findings. Nevertheless, Orange cannot prejudge the findings of future publications on these issues. If an adverse health effect were to be scientifically established, it would have a material adverse effect on Orange’s business and brand image and on the Group’s earnings and financial position. Beyond potential adverse effects on Orange, this could significantly curb the development of the digital society.
Any public perception of a risk to human health or biodiversity could lead to a reduction in the number of customers and their level of use, as well as an increase in litigation, particularly against the installation of mobile antennas. This could lead to difficulties in creating new sites, in a context where certain stakeholders question the usefulness of rolling out 5G networks. There could also be a tightening of regulations, resulting in reduced coverage, failure to meet Orange’s coverage commitments to the authorities, deteriorating quality of service and an increase in network roll-out costs.
The ubiquity of connected digital equipment may lead to inappropriate use due to overuse or exposure to inappropriate content and online harassment. Negative consequences on users could be both physical and psychological, particularly on young adults and children. If this ubiquity were perceived as a risk for the most vulnerable groups, it could undermine confidence in digital technology and act as a brake on innovation, and, for Orange, result in a decrease in the use of its services and a deterioration of its image.
Moreover, the use of new technologies such as generative artificial intelligence presents human and social risks that we do not yet fully comprehend.
In any event, the Group could be held liable, and Orange’s revenues, earnings, service quality and reputation could be adversely affected.
2023 Form 20-F / ORANGE – 15
Risks related to Orange’s U.S. listing
The price of Orange’s ADSs and the U.S. dollar value of any dividend will be affected by fluctuations in the U.S. dollar/euro exchange rate.
The ADSs are quoted in U.S. dollars. Fluctuations in the exchange rate between the euro and the U.S. dollar are likely to affect the market price of the ADSs. For example, because Orange’s financial statements are reported in euro, a decline in the value of the euro against the U.S. dollar would reduce Orange’s earnings as reported in U.S. dollars. This could adversely affect the price at which the ADSs trade on the U.S. securities markets. Any dividend that Orange might pay in the future would be denominated in euro. A decline in the value of the euro against the U.S. dollar would reduce the U.S. dollar equivalent of any such dividend.
Holders of ADSs may face disadvantages compared to holders of Orange’s Shares when attempting to exercise certain rights as shareholders.
Holders of ADSs are not treated as shareholders and do not have ordinary shareholder rights, which are governed by French law. Indeed, the depositary, through the custodian or the custodian's nominee, is the holder of the Shares underlying all ADSs and ADS holders have only ADS holder rights, as set forth in the deposit agreement. Among other things, ADS holder rights do not provide for double voting rights, which otherwise would be available to holders of Shares held in a shareholder's' name for a period of at least two years. Holders of ADSs may also face more difficulties in exercising their rights than they would if they held Shares directly. For example, to exercise their voting rights, holders of ADSs must instruct the depositary how to vote the underlying Shares. Because of this extra procedural step involving the depositary, the process for exercising voting rights will take longer for holders of ADSs than for holders of Shares. ADSs for which the depositary does not receive timely voting instructions will not be voted at any meeting.
ADSs holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiffs in any such action.
The deposit agreement governing the ADSs representing Shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against Orange or the depositary arising out of or relating to the Shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. Consequently, if Orange or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with applicable law and ADS holders may not be entitled to a jury trial. If the waiver of jury trial is enforced, a lawsuit brought against either or both of Orange and the depositary under the deposit agreement would be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including results that could be less favorable to the plaintiffs in any such action.
Holders of our ADSs may be subject to limitations on the transfer of such ADSs and the withdrawal of the underlying Shares.
ADSs, which may be evidenced by American Depositary Receipts, or ADRs, are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary think it is advisable to do so because of any requirement of law, government or governmental body, or under any provision of the deposit agreement, or for any other reason subject to an ADS holders’ right to cancel such ADSs and withdraw the underlying ordinary Shares. Temporary delays in the cancellation of such ADSs and withdrawal of the underlying ordinary Shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the transfer of Shares is blocked to permit voting at a shareholders’ meeting or we are paying a dividend on our Shares. In addition, holders of our ADSs may not be able to cancel such ADSs and withdraw the underlying Shares when such holders owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of Shares or other deposited securities.
U.S. investors may have difficulty enforcing civil liabilities against Orange and its directors and senior management.
The members of the board of directors and senior management at Orange are non-residents of the United States, and all or a substantial portion of assets of Orange and the assets of such persons are located outside the United States. As a result, it may not be possible to serve process on such persons or Orange in the United States, to obtain jurisdiction over us or our non-U.S. resident senior management and directors in U.S. courts, in connection with those actions predicated on the civil liability provisions of the US federal securities laws, to enforce judgments obtained in U.S. courts against them or Orange based on civil liability provisions of the securities laws of the United States, or obtain evidence in France or from any French citizen or any individual being resident in France or any officer, representative, agent or employee of a legal person having its registered office or an establishment in a territory of France. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the United States. In particular, there is some doubt as to whether French courts would recognize and enforce certain civil liabilities under U.S. securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in France. The United States and France do not currently have a treaty providing for recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters.
2023 Form 20-F / ORANGE – 16
Preemptive rights may be unavailable to holders of Orange’s ADSs.
Holders of Orange’s ADSs or U.S. resident shareholders may be unable to exercise preemptive rights granted to Orange’s shareholders, in which case holders of Orange’s ADSs could be substantially diluted. Under French law, whenever Orange issues new shares for payment in cash or in kind, Orange is usually required to grant preemptive rights to its shareholders. However, holders of Orange’s ADSs or U.S. resident shareholders may not be able to exercise these preemptive rights to acquire Shares unless both the rights and the Shares are registered under the Securities Act or an exemption from registration is available. In addition, the deposit agreement for our ADSs provides that the depositary will not make rights available to holders of our ADSs unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempted from registration under the Securities Act. Further, if we offer holders of our Shares the option to receive dividends in either cash or Shares, the depositary may require satisfactory assurances from us that extending the offer to holders of ADSs does not require registration of any securities under the Securities Act before making the option available to holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act.
Accordingly, if the depositary (or a U.S. resident shareholder) is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, the rights will lapse or be allowed to lapse, in which case ADS holders may be unable to participate in our rights offerings or to elect to receive dividends in Shares and may experience dilution in their holdings, and no value will be given for these rights, and the ADS holder (or U.S. resident shareholder) will lose value.
Investments in the Company’s securities may be subject to prior governmental authorization under the French foreign investment control regime
Pursuant to the provisions of Articles L.151-1 et seq. and R. 151-1 et seq. of the French Monetary and Financial Code, as amended by the decree (décret) No. 2023-1293 dated December 28, 2023 and the order (arrêté) dated December 28, 2023 pursuant to the French foreign investment regime, any investment by any non-French citizen, any French citizen not residing in France, any non-French entity or any French entity controlled by one of the aforementioned persons or entities that will result in the relevant investor (a) acquiring control of an entity incorporated under French law or an establishment registered in France, (b) acquiring all or part of a business line of an entity registered in France, or (c) for non-EU or non-EEA investors crossing, directly or indirectly, alone or in concert, a 25% threshold of voting rights in an entity registered in France, or (d) for non-EU or non-EEA investors crossing, directly or indirectly, alone or in concert, the threshold of 10% of the voting rights of a company incorporated under French law whose shares are admitted to trading on a regulated market, in each case, conducting activities in certain strategic industries, such as the industry in which the Company operates, is subject to the prior authorization of the French Ministry of Economy, which authorization may be conditioned on certain undertakings.
Therefore, any investor meeting the above criteria willing to acquire all or part of the Company’s business with the effect of crossing the applicable share capital thresholds set forth by the French Monetary and Financial Code will have to request this prior governmental authorization before acquiring the Company’s Shares or ADSs. Orange cannot guarantee that such investor will obtain the necessary authorization in due time. The authorization may also be granted subject to conditions that deter a potential purchaser. The existence of such conditions to an investment in the Company’s securities could have a negative impact on its ability to raise the funds necessary to its development. In addition, failure to comply with such measures could result in significant consequences for the investor (including the investment to be deemed null and void). Such measures could also delay or discourage a takeover attempt, and the Company cannot predict whether these measures will result in a lower or more volatile market price of its ADSs or Shares.
Item 4 |
Information on Orange |
4.A |
HISTORY AND DEVELOPMENT OF ORANGE |
The information required by this section is set forth as follows in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document:
− | the introduction to Section 1.1 Overview, |
− | Section 7.1 Company identification, |
− | Section 1.1.3 History, |
− | Section 3.1.2.5 Group capital expenditure, |
which are incorporated in this section by reference.
For a discussion on significant divestitures, see also Note 3 Gains and losses on disposal and main changes in scope of consolidation to the Consolidated Financial Statements.
A discussion of the Company’s principal capital expenditures and divestitures for the year ended December 31, 2021 are included in Section 3.1.2.5 Group capital expenditure of the Universal Registration Document filed as Exhibit 15.1 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 30, 2023 and incorporated in Part I, Item 4.A (History and Development of Orange) thereof.
Agent in the United States: Orange Participations U.S. Inc., 13865 Sunrise Valley Drive, Coppermine Commons Bldg. 2, Suite 425, Herndon, VA 20171-6190.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (http://www.sec.gov).
Orange also maintains a website at www.orange.com. For the avoidance of doubt, the information available on our website is not incorporated by reference in this Form 20-F.
2023 Form 20-F / ORANGE – 17
4.B |
BUSINESS OVERVIEW |
The information required by this section is set forth as follows in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document:
− | Section 1.3 Significant events, |
− | Section 1.4 Operating activities, |
− | Section 1.6.2 Intellectual Property and Licensing, |
− | Section 1.7 Regulation of telecommunication activities, |
− | Section 3.1.2.1 Group revenue, |
− | Section 7.2.2 Glossary of technical terms, |
which are incorporated in this section by reference.
Seasonality
In general, Orange’s business operations are not affected by any major seasonal variations. However, the telephone traffic generated from fixed line telephony over the Northern Hemisphere during the summer months in the third quarter (ended September 30) is generally lower than in the other quarters.
Furthermore, in the retail markets, the number of new mobile customers for telecommunications services is generally higher in the second half of the calendar year than in the first half, primarily because of the increase in sales during the Christmas season. Consequently, revenues generated from the sale of equipment and packages, as well as the costs incurred in ordering equipment for customers and sales commissions, are generally higher in the second half of the calendar year than in the first half.
4.C |
ORGANIZATIONAL STRUCTURE |
The information required by this section is set forth as follows in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document: Section 1.1 Overview and the introduction of Section 3.1.3 Review by business segment, and is incorporated in this section by reference.
For a listing of significant subsidiaries, see Note 20 Main consolidated entities to the Consolidated Financial Statements.
4.D |
PROPERTY, PLANTS AND EQUIPMENT |
The information required by this section is set forth as follows in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document: Section 1.5 Orange’s networks, and Section 3.1.2.5 Group capital expenditure, and is incorporated in this section by reference. For information on material tangible fixed assets, see Note 8.5 Property, plant and equipment to the Consolidated Financial Statements.
For certain environmental issues that may affect the Company’s utilization of assets, see Note 2.5.3 Consideration of climate change risks to the Consolidated Financial Statements.
2023 Form 20-F / ORANGE – 18
Item 4A |
Unresolved staff comments |
None.
Item 5 |
Operating and financial review and prospects |
There are no differences between IFRS as adopted in the European Union and IFRS Accounting Standards as issued by the IASB, as applied by Orange.
References in this Item to the Notes to the consolidated financial statements are references to the Consolidated Financial Statements included in Item 18 Financial Statements of this document.
5.A |
OPERATING RESULTS |
This section sets forth:
− | an overview of the operating results of the Group, set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document, found in (i) the introduction to Section 3.1 Review of the Group’s financial position and results and Section 3.1.1 Overview, , and (ii) Section 1.3 Significant events and incorporated in this section by reference; |
− | a comparative analysis of the Group income statement and capital expenditures (and related financial information) and a comparative analysis by business segment for 2023 and 2022, set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Sections 3.1.2.1 Group revenue, and 3.1.2.3 Group net income, 3.1.2.4 Group comprehensive income, 3.1.2.5 Group capital expenditure and 3.1.3 Review by business segment; |
− | a comparative analysis of the Group operating income for 2023 and 2022, set forth below; |
− | a comparative analysis of the Group operating results and a comparative analysis by business segment for the years ended December 31, 2022 and December 31, 2021, are included in Part I, Item 5.A (Analysis of Group operating income) of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 30, 2023. |
In this Annual Report on Form 20-F, including in the foregoing sections that are included in Exhibit 15.1 and incorporated by reference in this section, Orange sets forth certain financial aggregates or indicators that are not defined under IFRS, in addition to the financial aggregates or indicators that are presented in accordance with IFRS. Accordingly, the information set forth in Section 3.1.5 Financial indicators not defined by IFRS (excluding Sections 3.1.5.2, 3.1.5.4, 3.1.5.5, 3.1.5.6, 3.1.5.8 and 3.1.5.9, which are explicitly excluded from this Annual Report on Form 20-F), of the 2023 Universal Registration Document is incorporated in this section by reference. The financial aggregates or indicators not defined under IFRS are provided as additional information and should not be substituted for or confused with the financial aggregates or indicators that are defined under IFRS, and they may not be directly comparable with the non-IFRS financial measures of other companies using the same or similar non-IFRS financial measures.
In addition, the information set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Section 7.2.1 Financial glossary, is incorporated by reference in this section.
See also Note 2 Description of business and basis of preparation of the Consolidated Financial Statements to the Consolidated Financial Statements.
Analysis of Group operating income
This section deals with the Group’s operating income by type of expense, as presented in the consolidated income statement.
g 2023 vs. 2022
In 2023, the Orange group’s operating income amounted to 4,969 million euros (comprising 5,274 million euros from telecom activities and a loss of 306 million euros from Mobile Financial Services), up 3.5% on a historical basis and 6.6% on a comparable basis with 2022.
On a historical basis, the increase of 168 million euros in Group operating income between 2022 and 2023, i.e. an increase of 3.5%, includes:
− | the negative effect of foreign exchange fluctuations of 80 million euros, mainly due to changes in the Egyptian pound against the euro of 70 million euros; |
− | the unfavorable impact of changes in the scope of consolidation and other changes, which amounted to 60 million euros and mainly included the effect of the gain on disposal related to the revaluation of Deezer’s assets at fair value in 2022 (following the merger by absorption of Deezer by the SPAC – Special Purpose Acquisition Vehicle – I2PO, and the initial public offering of the new entity in July 2022), recognized in the review of fixed assets, investments and business portfolio for 77 million euros (see Note 3.2 to the Consolidated Financial Statements); |
− | and the organic change on a comparable basis, i.e. an increase of 308 million euros in operating income. |
2023 Form 20-F / ORANGE – 19
On a comparable basis, the increase of 308 million euros, i.e. 6.6%, in Group operating income between 2022 and 2023 is mainly attributable to:
− | the counter-effect of the recognition, in 2022, of impairment of goodwill of 817 million euros, mainly due to impairment of goodwill of 789 million euros in Romania. This impairment mainly reflected (i) a significant increase in the discount rate due to changes in market assumptions, (ii) increased competitive pressure, and (iii) the downward revision of the business plan compared with the one used at December 31, 2021, particularly in the first few years (see Note 7 to the Consolidated Financial Statements); |
− | the increase of 1.8%, i.e. 790 million euros, in revenues; |
− | the increase of 13.5%, i.e. 106 million euros, in other operating income (see Section 7.2.1 Financial glossary), mainly due to the increase in the net banking income (NBI, see Notes 1.3, 1.4 and 4.2 to the Consolidated Financial Statements) of Mobile Financial Services; |
− | and the decrease of 2.6%, i.e. 47 million euros, in operating taxes and levies payables (see Section 7.2.1 Financial glossary). This decrease mainly reflects (i) the decrease in the business value added tax (cotisation sur la valeur ajoutée des entreprises – CVAE), the main component of the territorial economic contribution (contribution économique territoriale – CET), in France (see Note 10.1 to the Consolidated Financial Statements), (ii) partially offset by the increase recorded in the Africa & Middle East countries, mainly relating to the growth in activity and higher spectrum fees. |
− | These positive changes are partially offset by: |
− | the increase of 3.0%, i.e. 555 million euros, in external purchases (see Section 7.2.1 Financial glossary and Note 5.1 to the Consolidated Financial Statements) due to: |
− | the increase of 4.8%, i.e. 372 million euros, in commercial expenses, equipment and content costs (see Section 7.2.1 Financial glossary), mainly due to the rising cost of handsets and other equipment sold, in countries in Europe (in line with the growth in equipment sales), for Orange Business (in particular unified communication and collaboration services) and for international wholesale services (in connection with the sale of rights of use for a submarine cable in the Caribbean); |
− | the increase of 8.9%, i.e. 322 million euros, in other network expenses and IT expenses (see Section 7.2.1 Financial glossary), due to (i) higher energy access costs for fixed and mobile networks, mainly in France and, to a lesser extent, in Other European countries (see Section 3.1.1.3 Significant events), (ii) the growth in traffic and the ongoing network roll-outs in the Africa & Middle East countries, and (iii) increased IT expenses for Orange Business (related in particular to the growth in cybersecurity services); |
− | and the increase of 2.0%, i.e. 63 million euros, of other external purchases (see Section 7.2.1 Financial glossary), mainly due to (i) the increase in overheads (travel, consulting and support missions, use of temporary staff, vehicle energy costs, etc.) and (ii) the increase in real estate fees (in particular due to rent indexation and the impact of higher energy costs on lease expenses in the inflationary environment, see Section 3.1.1.3 Significant events), (iii) partially offset by the decrease in construction costs of networks for resale in France (fiber optic network and mobile sites); |
− | partially offset by the decrease of 4.8%, i.e. 202 million euros, in service fees and inter-operator costs (see Section 7.2.1 Financial glossary), mainly due to the generalized decrease in interconnection charges (except for the Africa & Middle East countries), directly related to the contraction in revenues from wholesale services (see Section 3.1.2.1.1 Revenue); |
− | the increase of 332 million euros in restructuring costs (mainly departure plans), largely related to the recognition, in 2023, of restructuring costs relating to Orange Business (in France and abroad) and to Orange Bank, of 215 million euros and 122 million euros respectively (see Section 3.1.1.3 Significant events, 2023 Highlights of the Consolidated Financial Statements and Note 5.3 to the Consolidated Financial Statements); |
− | the increase of 4.4%, i.e. 305 million euros, of depreciation and amortization of fixed assets (see Note 8.2 to the Consolidated Financial Statements), mainly in France and, to a lesser extent, in the Africa & Middle East countries, linked in particular to the material investments made in recent years (particularly in connection with the roll-out of fixed and mobile networks) and to the recognition of accelerated depreciation in 2023; |
− | the increase of 0.9%, i.e. 80 million euros, in labor expenses (see Section 7.2.1 Financial glossary). This increase was mainly due to the French part-time for seniors plans (TPS, a program relating to agreements for the employment of older workers in France) and related bonuses, and mainly reflects (i) the recognition, in 2023, of a charge of 241 million euros corresponding to the additional provision relating to the pension reform enacted in France in April 2023 (see Section 3.1.1.3 Significant events and Note 6.2 to the Consolidated Financial Statements), (ii) partially offset by the counter-effect of the recognition, in 2022, of a substantial number of employees signing up for these plans; |
− | the decrease of 67 million euros in gains on disposal of fixed assets, investments and activities (see Note 3.1 to the Consolidated Financial Statements), mainly due to the decrease in gains on disposal of fixed assets (see Note 8.1 to the Consolidated Financial Statements) in the Africa & Middle East countries (mainly related to the counter-effect of the recognition, in 2022, of the disposal of assets in the Democratic Republic of the Congo – DRC) and for shared services (in the context of programs for the optimization of real estate assets); |
− | and the increase of 9.8%, i.e. 40 million euros, in other operating expenses (see Section 7.2.1 Financial glossary), mainly relating to (i) developments in various disputes between the two periods, (ii) the increase in the cost of bank credit risk (see Notes 1.3, 1.4 and 5.2 to the Consolidated Financial Statements), and (iii) the increase in allowances and losses on trade receivables for telecom activities (see Notes 4.3 and 5.2 to the Consolidated Financial Statements). |
For further information on matters impacting the Group’s income, see Section 1.3 Recent Events of the 2023 Universal Registration Document filed as Exhibit 15.1 of this document.
g 2022 vs. 2021
The discussion of the Group’s operating and financial review and prospects for the years ended December 31, 2022 and December 31, 2021 is included in Part I, Item 5.A (Analysis of Group operating income) on page 19 et seq. of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 30, 2023.
2023 Form 20-F / ORANGE – 20
5.B |
LIQUIDITY AND CAPITAL RESOURCES |
This section presents, for the Orange group:
i) a comparative analysis of liquidity and cash flows, with a presentation of the net cash provided by operating activities, of the net cash used in investing activities and of the net cash used in financing activities,
ii) a presentation of the Group’s shareholders’ equity, and
iii) a discussion on the Group’s financial debt and financial resources,
which are set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document and incorporated in this section by reference as follows:
− | Section 3.1.4 Cash flow, financial debt and equity, |
− | Section 3.1.2.5.1 Capital expenditure, |
− | Section 3.2.1 Recent events, |
as well as in Notes 13 Financial assets, liabilities and financial results (telecom activities), 14 Information on market risk and fair value of financial assets and liabilities (telecom activities) and 16 Unrecognized contractual obligations and commitments (telecom activities) to the consolidated financial statements.
Orange expects that its existing and foreseeable cash from operations will be sufficient to finance its foreseeable working capital requirements. As at December 31, 2023, the liquidity position of Orange’s telecom activities exceeded the repayment obligations of its gross financial debt in 2024.
Orange cash and cash equivalents are held mainly in France and other countries of the European Union that are not subject to restrictions on convertibility or exchange control. A portion of the cash and cash equivalents held by certain subsidiaries in Africa and the Middle East could be subject to transfer restrictions; however, such restrictions have not had and are not expected to have any material impact on the Group’s ability to meet its cash obligations.
Investments in property, plant and equipment and intangible assets totaled 8,062 million euros, down 10.5% on a historical basis and 8.5% on a comparable basis with 2022. On a comparable basis, this decrease reflects both (i) the decline in investment in very high‑speed broadband fixed networks, mainly in France, Spain and Poland, after the major roll‑outs of recent years, and (ii) the decrease in expenses relating to telecommunication licenses.
Non-current and current financial liabilities totaled 35,986 million euros as at December 31, 2023. Net financial debt totaled 27,002 million euros at December 31, 2023. See below for a reconciliation of net financial debt with the closest comparable IFRS measures. For more information, see Section 3.1.5 Financial indicators not defined by IFRS of the 2023 Universal Registration Document is incorporated in this section by reference.
|
|
|
|
|
|
|
|
2023 |
|
|
Group |
|
o/w Telecom |
|
o/w Mobile |
|
o/w |
|
|
Consolidated |
|
activities(1) |
|
Financial |
|
Eliminations(1) |
|
|
financial |
|
|
|
Services(1) |
|
|
(at December 31, 2023, in millions of euros) |
|
position |
|
|
|
|
|
|
Non-current and current financial liabilities |
|
35,986 |
|
35,993 |
|
— |
|
(7) |
Non-current financial liabilities |
|
30,535 |
|
30,535 |
|
— |
|
— |
Current financial liabilities |
|
5,451 |
|
5,458 |
|
— |
|
(7) |
Net derivatives (assets)/liabilities |
|
(729) |
|
(678) |
|
(51) |
|
— |
Non-current and current derivatives liabilities |
|
264 |
|
245 |
|
19 |
|
— |
Non-current derivatives liabilities |
|
225 |
|
205 |
|
19 |
|
— |
Current derivatives liabilities |
|
40 |
|
40 |
|
— |
|
— |
Non-current and current derivatives assets |
|
(993) |
|
(923) |
|
(70) |
|
— |
Non-current derivatives assets |
|
(956) |
|
(886) |
|
(70) |
|
— |
Current derivatives assets |
|
(37) |
|
(37) |
|
— |
|
— |
Cash and cash equivalents |
|
(5,618) |
|
(5,504) |
|
(113) |
|
— |
Other comprehensive income components related to unmatured hedging instruments |
|
|
|
(110) |
|
|
|
|
Cash collateral paid (included in non-current financial assets) |
|
|
|
(21) |
|
|
|
|
Investments at fair value (included in current financial assets) |
|
|
|
(2,678) |
|
|
|
|
Other financial assets (included in non-current and current financial assets) |
|
|
|
(0) |
|
|
|
|
Net financial debt |
|
|
|
27,002 |
|
|
|
|
(1) |
See Notes 13.1 and 13.4 to the Consolidated Financial Statements. |
2023 Form 20-F / ORANGE – 21
|
|
|
|
|
|
|
|
2022 |
|
|
|
|
|
|
|
|
on a historical basis |
|
|
Group |
|
o/w Telecom |
|
o/w Mobile |
|
o/w |
|
|
Consolidated |
|
activities(1) |
|
Financial |
|
Eliminations(1) |
|
|
financial |
|
|
|
Services(1) |
|
|
(at December 31, 2022, in millions of euros) |
|
position |
|
|
|
|
|
|
Non-current and current financial liabilities |
|
36,632 |
|
36,638 |
|
— |
|
(6) |
Non-current financial liabilities |
|
31,930 |
|
31,930 |
|
— |
|
— |
Current financial liabilities |
|
4,702 |
|
4,708 |
|
— |
|
(6) |
Net derivatives (assets)/liabilities |
|
(1,122) |
|
(1,069) |
|
(53) |
|
— |
Non-current and current derivatives liabilities |
|
448 |
|
386 |
|
62 |
|
— |
Non-current derivatives liabilities |
|
397 |
|
335 |
|
62 |
|
— |
Current derivatives liabilities |
|
51 |
|
51 |
|
— |
|
— |
Non-current and current derivatives assets |
|
(1,570) |
|
(1,455) |
|
(116) |
|
— |
Non-current derivatives assets |
|
(1,458) |
|
(1,342) |
|
(116) |
|
— |
Current derivatives assets |
|
(112) |
|
(112) |
|
— |
|
— |
Cash and cash equivalents |
|
(6,004) |
|
(5,846) |
|
(158) |
|
— |
Other comprehensive income components related to unmatured hedging instruments |
|
|
|
114 |
|
|
|
|
Cash collateral paid (included in non-current financial assets) |
|
|
|
(38) |
|
|
|
|
Investments at fair value (included in current financial assets) |
|
|
|
(4,500) |
|
|
|
|
Other financial assets (included in non-current and current financial assets) |
|
|
|
(2) |
|
|
|
|
Net financial debt |
|
|
|
25,298 |
|
|
|
|
(1) |
See Notes 13.1 and 13.4 to the Consolidated Financial Statements. |
For further information on the risks relating to Orange’s financial debt and to the financial markets and a history of the Company’s credit ratings, see item 3.D Risk factors – Financial risks.
The following table summarizes payments due under Orange’s significant contractual commitments as of December 31, 2023:
At December 31, 2023 |
|
Note to the |
|
Contractual |
|
Total |
|
Less than |
|
1-3 years |
|
3-5 years |
|
More than |
(in millions of euros) |
|
consolidated |
|
obligations |
|
payments |
|
1 year |
|
|
|
|
|
5 years |
|
|
financial |
|
reflected in the |
|
due |
|
|
|
|
|
|
|
|
|
|
statements |
|
balance sheet |
|
|
|
|
|
|
|
|
|
|
Gross financial debt after derivatives of telecom activities (incl. derivatives assets) (1) |
|
14.3 |
|
35,308 |
|
35,301 |
|
6,047 |
|
5,583 |
|
4,433 |
|
19,238 |
Financial liabilities of Orange Bank (2) |
|
17.2.6 |
|
3,072 |
|
3,035 |
|
3,015 |
|
20 |
|
— |
|
— |
Trade payables of telecom activities |
|
14.3 |
|
11,597 |
|
11,597 |
|
9,989 |
|
342 |
|
778 |
|
488 |
Trade payables of Orange Bank |
|
5.6 |
|
14 |
|
14 |
|
14 |
|
— |
|
— |
|
— |
Future interests on financial liabilities |
|
14.3 |
|
|
|
9,029 |
|
1,440 |
|
1,749 |
|
1,712 |
|
4,128 |
Total Financial liabilities |
|
|
|
49,991 |
(3) |
58,976 |
|
20,505 |
|
7,694 |
|
6,923 |
|
23,854 |
Lease liabilities |
|
9.2 |
|
8,568 |
|
9,658 |
|
1,618 |
|
2,740 |
|
2,042 |
|
3,257 |
Employee Benefits |
|
6.2 |
|
5,183 |
|
7,592 |
|
2,665 |
|
1,133 |
|
655 |
|
3,139 |
Provisions for dismantling |
|
8.7 |
|
738 |
|
1,298 |
|
28 |
|
55 |
|
37 |
|
1,177 |
Restructuring provisions |
|
5.3 |
|
477 |
|
477 |
|
281 |
|
196 |
|
— |
|
— |
Other liabilities |
|
5.7 |
|
3,078 |
|
3,078 |
|
2,779 |
|
299 |
|
— |
|
— |
Operating taxes and levies payables |
|
10.1.2 |
|
1,483 |
|
1,483 |
|
1,483 |
|
— |
|
— |
|
— |
Current tax payables |
|
10.2.3 |
|
460 |
|
460 |
|
460 |
|
— |
|
— |
|
— |
Total other liabilities (4) |
|
|
|
19,986 |
|
24,046 |
|
9,314 |
|
4,424 |
|
2,735 |
|
7,573 |
Lease commitments |
|
|
|
|
|
228 |
|
94 |
|
62 |
|
30 |
|
41 |
Other operational and purchase obligations |
|
|
|
|
|
8,549 |
|
3,318 |
|
2,075 |
|
945 |
|
2,211 |
Unrecognized operational contractual commitments |
|
16.1 & 17.3 |
|
|
|
8,777 |
|
3,412 |
|
2,138 |
|
976 |
|
2,252 |
TOTAL |
|
|
|
|
|
91,799 |
|
33,231 |
|
14,256 |
|
10,633 |
|
33,679 |
(1) | excluding equity components related to unmatured hedging instruments and loan from Orange Bank to Orange Group. |
(2) | excluding unmatured derivatives liabilities and loan from Orange Group to Orange Bank. |
(3) | of which long-term debt obligations amounting to 29 612 million of euros (including TDIRA, bonds and bank and lending institutions). |
(4) | excluding deferred tax liabilities and deferred income. |
2023 Form 20-F / ORANGE – 22
5.C |
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Section 1.6 Research and development, which is incorporated in this section by reference.
The discussion of the Group’s research and development activities for the years ended December 31, 2022 and December 31, 2021 is included in Part I, Item 5.C of the Annual Report of Form 20-F filed with the Securities and Exchange Commission on March 30, 2023.
5.D |
TREND INFORMATION |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document as follows:
− | Section 3.2.1 Recent Events, |
− | Sections 1.2.2 Key changes in the telecoms services market and 1.2.3 The Orange group strategy, |
which are incorporated in this section by reference.
For a discussion on uncertainties that could have a material effect on the Group’s financial situation, see also Item 3.D Risk factors.
5.E |
CRITICAL ACCOUNTING ESTIMATES |
For a discussion of the accounting policies, use of judgment and estimates, see Note 2.5 Accounting policies, use of judgment and estimates to the Consolidated Financial Statements included in Item 18.
Item 6 |
Directors, senior management and employees |
6.A |
DIRECTORS AND SENIOR MANAGEMENT |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in the introduction to Chapter 5 Corporate Governance and in Section 5.1 Composition of management and supervisory bodies and is incorporated in this section by reference.
6.BCOMPENSATION
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Section 5.4 Compensation and benefits paid to Directors, Corporate Officers and Senior Management and is incorporated in this section by reference. For the definition of certain of the financial indicators used therein and more information, see Note 1.10 Definition of business segments and performance indicators and Note 6.4 Executive compensation to the Consolidated Financial Statements included in Item 18.
On November 28, 2022, the SEC adopted rules, pursuant to Section 10D-1 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), requiring national securities exchanges and national securities associations, such as the NYSE, to amend their relevant listing standards no later than November 28, 2023 to require companies with listed securities to put in place a policy whereby listed companies will recover erroneously-awarded variable compensation from the Chief Executive Officer and certain other “executive officers” as defined in Rule 10D-1(d) under the Exchange Act. On June 9, 2023, the SEC approved the NYSE’s proposed rule amending its listing standards for recovery of erroneously awarded compensation by listed issuers, which has taken effect on October 2, 2023.
Beginning in 2023, the compensation policy of the Chief Executive Officer as approved by the Company’s shareholders includes a clause requiring the recovery in full or in part of the components of the Chief Executive Officer's compensation that are wholly or partially contingent on the attainment of financial performance criteria based on financial information that has been determined to be erroneous and has required restatement of the financial statements for accounting purposes. The same policy now applies to other executive officers, subject to compliance with applicable local laws.
2023 Form 20-F / ORANGE – 23
6.C |
BOARD PRACTICES |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document as indicated below:
− | Section 5.1.1 Board of Directors, |
− | Section 5.1.3 Executive Committee, |
− | Sections 5.2 Operation of the management and supervisory bodies including a description of the Audit Committee and the Governance and Corporate Social and Environmental Responsibility Committee, which oversees the remuneration of directors and corporate officers, and 5.3 Reference to a Code of Corporate Governance, |
− | subsection Other benefits granted to Corporate Officers (Table 11 of the Afep-Medef Code) of Section 5.4.1.2 Amount of compensation paid or allocated to Corporate officers for 2023 and Section 5.4.1.3 Compensation policy for executive and non‑executive Corporate Officers for 2024. |
which are incorporated in this section by reference.
There are no director’s service contracts with the Company or any of its subsidiaries providing for benefits upon termination of employment.
6.D |
EMPLOYEES |
Employment
General changes in the number of Group employees
In 2023, Orange experienced several changes in its scope, notably with the merger of the Orange Caraïbe subsidiary into Orange SA (303 permanent contracts), the acquisition of Nehs Digital (273 permanent contracts) and Xperis (14 permanent contracts) by Enovacom, the healthcare subsidiary of Orange Business, and within the Europe division with the acquisition of VOO (1,235 permanent contracts) by Orange Belgium, the merger of A3Com (42 permanent contracts) into Orange Belgium, and the mergers of the Interkar Telewizja and Swiatlowodowa Kaszebe subsidiaries into Interkam in Poland (22 permanent contracts).
Number of employees – active employees at end of period |
|
2023 |
|
2022 |
|
2022 |
|
2021 |
|
|
|
|
(on a comparable |
|
(on a historical |
|
(on a historical |
Orange SA |
|
60,423 |
|
63,067 |
|
62,765 |
|
66,599 |
o/w CDI |
|
59,716 |
|
62,320 |
|
62,028 |
|
65,981 |
o/w CDD |
|
707 |
|
747 |
|
737 |
|
618 |
French subsidiaries |
|
12,917 |
|
12,130 |
|
12,140 |
|
11,842 |
o/w CDI |
|
12,725 |
|
11,796 |
|
11,796 |
|
11,402 |
o/w CDD |
|
192 |
|
334 |
|
344 |
|
440 |
Total France (1) |
|
73,340 |
|
75,197 |
|
74,905 |
|
78,441 |
International subsidiaries (1) |
|
63,754 |
|
62,811 |
|
61,525 |
|
61,257 |
o/w CDI |
|
62,213 |
|
61,300 |
|
60,032 |
|
59,545 |
o/w CDD |
|
1,541 |
|
1,511 |
|
1,493 |
|
1,713 |
Group total §§ |
|
137,094 |
|
138,008 |
|
136,430 |
|
139,698 |
(1) | Scope of financial consolidation: a company is assigned to the scope in which its revenues are consolidated. |
▪▪∙Item reviewed by an independent third party: reasonable assurance.
At the end of 2023, the Group had 137,094 active employees, including 134,654 on permanent contracts and 2,440 on fixed-term contracts. The number of permanent contracts decreased 0.6% (i.e. by 762), and fixed-term contracts decreased 5.9% (i.e. by 152). On a comparable basis, these trends vary according to the scope of consolidation of employees.
The decrease in permanent contracts was mainly driven by the French entities with, at end-December, 72,441 employees, i.e. a decline of 1,675 employees (a 2.3% decrease). This decrease was attributable to Orange SA (2,604 fewer permanent contracts, i.e. a 4.2% decrease) and not its subsidiaries (929 additional permanent contracts, i.e. a 7.9% increase).
Indeed, the constrained economic context combined with the loss of income from the Group’s historical activities, the increase in operating costs in an inflationary context, and the continued need for investment in fixed, mobile and Internet networks, demonstrate the need to continue and accelerate the reduction in the workforce in France for legacy activities, to facilitate the acquisition of new skills to strengthen the strategic areas and activities identified in Lead the future.At end-2023, 62,213 permanent employees were part of the workforce of subsidiaries outside France, an increase of 1.5% (i.e. 914 additional permanent employees). This international stability corresponds to different situations in reality, namely:
− | growth in the permanent workforce (on a comparable basis) within: |
− | Orange Business (+891 additional permanent contracts, i.e. a +5.4% increase), in emerging markets (Madagascar, Morocco, Mauritius and India) within Equant, |
− | Orange Innovation (+533 additional permanent contracts, i.e. a +25% increase), mainly in Morocco and Tunisia, |
− | the Orange MEA division (146 additional permanent contracts, i.e. a 1% increase); |
− | the Europe division conversely posted a decrease (660 fewer permanent contracts, i.e. a 2.3% decrease), due to a reduction in the workforce in Poland (351 fewer permanent contracts, i.e. a 4% decrease) and Romania (239 fewer permanent contracts, i.e. a 4% decrease) through voluntary departure plans to adapt skills to market challenges. |
2023 Form 20-F / ORANGE – 24
The decrease in the number of employees on fixed-term contracts was driven solely by France (182 fewer fixed-term contracts, i.e. a 17% decrease), while the number of employees on fixed-term contracts outside France rose (30 additional fixed-term contracts, i.e. a 2% increase). This additional workforce, which represented 1.8% of the workforce at the end of 2023 (0.1 point down compared to 2022), is marginal. At the end of 2023, 34% of employees on fixed-term contracts are employed for customer-facing activities (primarily sales and services for B2C customers). The innovation and technology businesses (information systems and networks) are their second business segment (28%).
In terms of average full-time equivalent employees (FTEs) (monthly average over the year), the Group’s internal workforce included 127,109 FTEs at the end of 2023. This represents a decrease of 3,998 FTEs (down 3.0%) compared to end-2022, a trend mainly driven by France (Orange SA).
Active employees by business |
|
2023 |
|
2022 |
|
2021 |
|
Support (1) |
|
19.6 |
% |
19.9 |
% |
19.7 |
% |
Customer |
|
30.9 |
% |
31.8 |
% |
31.8 |
% |
Support functions |
|
10.5 |
% |
11.0 |
% |
11.1 |
% |
Innovation and technology |
|
36.6 |
% |
35.4 |
% |
35.0 |
% |
Other |
|
2.4 |
% |
1.9 |
% |
2.4 |
% |
Group total (2) |
|
100.0 |
% |
100.0 |
% |
100.0 |
% |
(1) | Management, project and process management |
(2) | The Group reporting scope comprises all entities consolidated in the Group’s financial statements. |
The skills of active employees are spread across the Group’s four business areas, the two with the highest volumes being Innovation and Technology (36.6%) and Customers (30.9%).
Employees by geographical region (1) |
2023 |
2022 |
2021 |
|||||||||||||||
|
|
Permanent |
|
Fixed-term |
|
Active |
|
Permanent |
|
Fixed-term |
|
Active |
|
Permanent |
|
Fixed-term |
|
Active |
|
|
contract |
|
contract |
|
employees |
|
contract |
|
contract |
|
employees |
|
contract |
|
contract |
|
employees |
France |
|
72,363 |
|
900 |
|
73,263 |
|
73,727 |
|
1,080 |
|
74,807 |
|
77,265 |
|
1,049 |
|
78,314 |
Other European countries |
|
32,120 |
|
732 |
|
32,852 |
|
31,594 |
|
746 |
|
32,340 |
|
32,257 |
|
979 |
|
33,235 |
Africa |
|
21,176 |
|
652 |
|
21,828 |
|
19,672 |
|
610 |
|
20,282 |
|
18,665 |
|
553 |
|
19,218 |
North and South America |
|
2,382 |
|
1 |
|
2,383 |
|
2,440 |
|
0 |
|
2,440 |
|
2,529 |
|
3 |
|
2,532 |
Asia Pacific |
|
6,613 |
|
155 |
|
6,768 |
|
6,423 |
|
138 |
|
6,561 |
|
6,212 |
|
187 |
|
6,399 |
Group total |
|
134,654 |
|
2,440 |
|
137,094 |
|
133,856 |
|
2,574 |
|
136,430 |
|
136,928 |
|
2,771 |
|
139,698 |
The Group has employees in 78 countries, with 53% located in France, the only country with more than 10% of its total workforce. Outside France, the countries with the most employees are Poland (7%), Romania (5%), Egypt (5%) and Spain (4%).
The breakdown of employees by geographical region takes into account the country of employment, which is different from the location of the entity to which they belong.
Employees by contract type |
|
2023 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
Full-time contract |
|
119,544 |
|
121,237 |
|
124,922 |
o/w women |
|
40,485 |
|
40,531 |
|
41,373 |
o/w men |
|
79,059 |
|
80,604 |
|
83,549 |
o/w undefined |
|
|
|
102 |
|
|
Part-time contract |
|
17,550 |
|
15,193 |
|
14,776 |
o/w women |
|
9,199 |
|
8,683 |
|
8,828 |
o/w men |
|
8,352 |
|
6,510 |
|
5,948 |
Group total |
|
137,094 |
|
136,430 |
|
139,698 |
At the end of 2023, the number of part-time employees in the Orange group was 17,550, i.e., 12.8% of the Group’s active workforce, an increase of 2,357 employees, i.e., +15.5% compared to the end of 2022, an increase driven solely by France.
As in previous years, France continued to have the majority (79%) of part-time employees. Over 70% of these employees benefit from one of the programs resulting from the agreements for seniors and late-career development, with the great majority opting for the French “part-time for seniors” plan. More than 7,600 employees opted for the “part-time for seniors” (TPS) plan over the 2022–2023 period, and more specifically for the “TPS 2022” formula, introduced as part of the December 17, 2021 intergenerational agreement. This formula, which is accessible to employees taking retirement up to January 1, 2028 at the latest, provides them with a period of “free time” before their official retirement, which can last up to four years, depending on the employee’s situation. The employee remains part of the active workforce during this period.
2023 Form 20-F / ORANGE – 25
External workforce in France
Temporary staffing
Temporary labor is mainly used to cope with temporary increases in activity, particularly the launch of new products and services, as well as sales campaigns and promotional offers. The Group recommends using temporary employees for assignments of less than two months. This indicator is presented in full-time equivalents (FTEs) and as a monthly average over the year.
In 2023, the use of this external labor increased by 9% compared to 2022 (i.e.72 additional FTEs as an average) and represented 0.9% of the Group’s total workforce in France. As in the previous year, it mainly concerned the sales area, in particular sales to B2C customers (72%), where business increased by 22% (i.e. 112 additional FTEs as an average) over the period.
Temporary employees – Group France (1) |
|
2023 (3) |
|
2022 |
|
2021 |
Amount of payments made to external companies for employee placement (in millions of euros) |
|
45.2 |
|
37.8 |
(4) |
30.1 |
Monthly average number of temporary workers (2) |
|
863 |
|
791 |
|
632 |
(1) |
Scope of financial consolidation – excludes companies with employees in France whose revenues are consolidated under the “international” scope. |
(2) |
Calculation of temporary employee expenses recorded in the Group France results. |
(3)The 2023 figures are provisional.
(4)The 2022 figure has been updated.
Subcontracting
The use of employees belonging to external companies takes the form of service contracts. In France, they are mainly used in the field of networks, in the areas of technical intervention (on the networks and on the customer’s premises), research, engineering and architecture, as well as in B2B and B2C Customer Relations and customer service. They are also used in the field of information systems on design, development and integration activities.
The use of subcontracting concerned 24,809 full-time equivalent employees (monthly average over the year) at end-December 2023, compared with 29,090 FTEs in 2022, i.e. a decrease of 14.7% (-4,281 FTEs). This external labor represented 27.3% of the total Group workforce in France (Orange SA and subsidiaries operating in France). The reduction recorded mainly relates to the construction of the very high-speed broadband network, following the end of the widespread take-up of fiber.
Subcontracting – Group France (1) |
|
2023 (4) |
|
2022 (3) |
|
2021 |
Amount of subcontracting (in millions of euros) |
|
1,890.8 |
|
2,037.7 |
|
3,030.5 |
Full-time equivalent workforce (monthly average) (2) |
|
24,809 |
|
29,090 |
|
32,221 |
Social dialog
Organization of social dialog
In addition to the social dialogue that takes place within the Group’s companies, according to locally applicable rules and practices, Orange has the means in place for international social dialogue.
These primarily consist of forums for international social dialogue, i.e. the European Works Council, the Worldwide Works Council and the Orange-UNI Global Union Alliance. It also encompasses three global agreements, signed by the Group and implemented under the auspices of local social dialogue: the agreement on fundamental social rights, the agreement on health and safety and the agreement on equality in the workplace.
Worldwide
Worldwide Works Council
The Orange Worldwide Works Council was created by an agreement dated June 23, 2010. This is a forum for social dialogue allowing information to be exchanged on economic, financial and employee-related issues with a transnational impact. It allows the Group’s strategy and challenges to be shared in all regions where Orange is present and has more than 400 employees. There are currently 34 employee representatives (representing 27 countries) on the Worldwide Works Council.
This forum is part of Orange’s Corporate Social Responsibility (CSR) development strategy. It creates a space for social dialogue at the global level by allowing employee representatives and management to engage in dialogue and discuss and share the major challenges facing the Group.
The Worldwide Works Council does not replace existing national representation bodies or the European Works Council. It meets at least once a year and may be convened on an extraordinary basis if necessary. Meetings of the Worldwide Works Council are chaired by the HR Director of the Orange group. In 2023, the Worldwide Works Council met in April, when the Chief Executive Officer unveiled the new strategic plan and its equivalent versions for Orange Business and Orange MEA – two divisions that are central to the Group’s strategy.
Orange-UNI Global Union Alliance
Apart from the two forums consisting of the European Works Council and the Worldwide Works Council, Orange has long engaged in high-quality dialogue with the UNI Global Union. This represents more than 20 million workers in 150 countries working in the services sector, including the telecommunication sector.
At Orange, the national unions that are members of the UNI are organized in an Alliance. In 2023, 23 trade unions present at Orange joined the Alliance (12 in Africa and 11 in Europe).
2023 Form 20-F / ORANGE – 26
Global agreements
Orange has signed three global agreements with the international trade union federation UNI. These agreements define principles that apply to all employees of Orange companies :
− | Global agreement on fundamental social rights within the France Télécom group (signed in December 2006) |
− | Oranges global health and safety agreement (signed on November 21, 2014) |
− | Global agreement on gender equality in the workplace within Orange (signed in July 2019) |
In Europe
The Orange European Works Council was created by an agreement dated April 14, 2004. It is the representative body for the Group’s employees in the European Union and EFTA (Norway and Switzerland). It is composed of employee representatives from each country included in the scope. There are currently 24 employee representatives (representing 18 countries) on the European Works Council. It is a forum for discussion and social dialogue at European level on economic, financial and social issues that concern either all of the Group’s companies within its scope, or at least two companies in two member countries. Through this forum, management informs and consults European employee representatives on any major decisions at European level that could impact working or employment conditions.
The agreement governing the European Works Council provides that the Council must meet at least three times a year. In reality, it meets much more often, owing to the increasing internationalization of transformation projects. In 2023, the European Works Council met seven times. It was consulted, among other things, on the development of the organizational model of the Finance and Performance Department, on Orange’s planned withdrawal from retail banking in France and Spain, and on the plan to merge the operations of Orange Espagne with those of the company MásMóvil.
In France
In 2023, the Corporate Social and Economic Committee (CSEC) of UES Orange met 24 times, mainly for recurring information-consultation meetings (strategy, the company’s economic and financial position, social policy, employment and working conditions), for discussions on health and safety, and for ad hoc information-consultation meetings, mainly concerning changes in the organization and structure of the Group.
The French Works Council, which brings together the Group’s subsidiaries in France with employees, met three times during fiscal year 2023, dealing with information relating to the Group’s financial position, business and employment trends.
2023 Form 20-F / ORANGE – 27
6.E |
SHARE OWNERSHIP |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in:
− | Section 5.1.4.2 Information on Company shares held by Directors and Officers, |
− | Section 5.1.4.4 Shares and stock options held by members of the Executive Committee, |
− | subsections Stock options granted during the fiscal year to each Corporate Officer (Table No 4 of the Afep-Medef Code) to History of performance share grants (Table No 9 of the Afep-Medef Code) of Section 5.4.1.2 Amount of compensation paid or allocated to Corporate Officers for 2023, |
− | Section 5.4.3 Compensation of members of the Executive Committee, |
− | Section 6.2 Major shareholders, for information regarding the percentage of the Company’s Shares held by BPI Participations, |
which are incorporated in this section by reference.
In addition, the Board of Directors approved several free share award plans (Long Term Incentive Plans or LTIP) reserved for Corporate Officers and Senior Management. See note 6.3 Share-based compensation to the Consolidated Financial Statements.
6.F DISCLOSURE OF ACTIONS TO RECOVER ERRONEOUSLY AWARDED COMPENSATION.
Not applicable.
Item 7 |
Major shareholders and related party transactions |
7.A |
MAJOR SHAREHOLDERS |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Section 6.2 Major shareholders and incorporated this section by reference.
Securities held and number of record holders in the United States
As of March 15, 2024, there were 53,279,105 ADRs of Orange outstanding and 209 holders of record were registered with Bank of New York Mellon, depositary for the ADS program.
As of February 29, 2024, 551 United States residents were owners of Orange’s Shares in fully registered form (au nominatif pur). Those U.S. residents held 98,279 Orange Shares.
Based on a Euroclear Identifiable-Bearer Securities (Titres au porteur identifiable) service report conducted by a specialized information provider, Orange estimates that corporate and institutional investors in the U.S. held a total of approximately 18.35% of its share capital as at December 31, 2023.
2023 Form 20-F / ORANGE – 28
7.B |
RELATED PARTY TRANSACTIONS |
Orange SA has entered into agreements with some of its subsidiaries, including framework agreements, support and brand licensing agreements, as well as service-related agreements. In addition, cash management agreements exist between Orange SA and most of its subsidiaries. These agreements were entered into on an arm’s-length basis.
Regarding agreements made in previous years, no related-party agreements continued during the 2023 financial year.
See also Note 12 Related party transactions and Note 6.4 Executive compensation to the Consolidated Financial Statements.
7.C |
INTERESTS OF EXPERTS AND COUNSELS |
Not applicable.
Item 8 |
Financial information |
8.A |
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION |
See Item 18 Financial Statements.
The other information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Sections, 3.2.1 Recent events and 6.3 Dividend distribution policy, and is incorporated in this section by reference.
8.B |
SIGNIFICANT CHANGES |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Section 3.2.1 Recent events, and is incorporated in this section by reference.
See also Note 19 Subsequent events to the Consolidated Financial Statements.
Item 9 |
The offer and listing |
9.A |
OFFER AND LISTING DETAILS |
For information regarding risks related to Orange’s Shares and ADSs, see Item 3.D Risk factors: “The price of Orange’s ADSs and the U.S. dollar value of any dividend will be affected by fluctuations in the U.S. dollar / euro exchange rate”; “Holders of ADSs may face disadvantages compared to holders of Orange’s Shares when attempting to exercise certain rights as shareholders”; “Preemptive rights may be unavailable to holders of Orange’s ADSs”.
Orange’s Share is traded on compartment A (large capitalizations) of Euronext Paris (ticker: ORA and International Security Identification Number: FR0000133308) and in the form of ADS on the NYSE (ticker: ORAN and CUSIP: 684060106).
2023 Form 20-F / ORANGE – 29
9.B |
PLAN OF DISTRIBUTION |
Not applicable.
9.C |
MARKETS |
The principal trading market for the Shares is Euronext Paris, where the Shares have been traded since October 20, 1997. Prior to that date, there was no public trading market for the Shares. The Shares are included in the “CAC 40 Index” (a main benchmark index of 40 major stocks listed on Euronext Paris). The Shares in the form of American Depositary Shares (“ADSs”) are also listed on the New York Stock Exchange. Uptevia holds the share registry for Orange and Bank of New York Mellon acts as depositary for the ADSs.
9.D |
SELLING SHAREHOLDERS |
Not applicable.
9.E |
DILUTION |
Not applicable.
9.F |
EXPENSES OF THE ISSUE |
Not applicable.
Item 10 |
Additional information |
10.A |
SHARE CAPITAL |
Not applicable.
10.B |
MEMORANDUM OF ASSOCIATION AND BYLAWS |
See the 2023 Universal Registration Document filed as Exhibit 15.1 of this document under:
− | subsection Corporate scope of Section 7.1 Company identification, |
− | subsection Restrictions regarding the disposal of Shares by Directors and Officers of Section 5.1.4.2 Information on Company shares held by Directors and Officers, |
− | Section 5.2.1.2 Independent Directors, section 5.2.1.5 Chairman of the Board of Directors, and section 5.2.1.8 Board and committee activities during the fiscal year, |
− | Section 6.1.3 Authorizations to carry out capital increases, section 6.3 Dividend distribution policy, on page 438, section 6.2.1.2 Information on shareholders’ agreements, and Section 6.4.1 Rights, preferences and restrictions attached to shares, |
− | Section 6.4.2 Actions necessary to modify shareholders’ rights, |
− | Section 6.4.3 Rules for participation in and notice of Shareholders’ Meetings, |
− | Section 6.4.4 Declarations of threshold crossing, |
− | Section 5.2.1.1 Legal and statutory rules relating to the composition of the Board of Directors and section 6.2 Major shareholders, |
which are incorporated in this section by reference.
2023 Form 20-F / ORANGE – 30
Ownership of Shares by non-French persons
Under the French Commercial Code and our bylaws, there are no limitations of general application to the right of non-residents or non-French shareholders to own or, where applicable, to exercise the voting rights attached to securities of a French company.
The general principle is that financial operations between France and foreign countries are unrestricted and a person is not required to obtain a prior authorization before acquiring a controlling interest. Under existing administrative rulings, ownership of 33 1/3% or more of the Company’s share capital or voting rights is regarded as a controlling interest, but a lower percentage might be held to be a controlling interest in certain circumstances.
As an exception, pursuant to the provisions of Articles L.151-1 et seq. and R. 151-1 et seq. of the French Monetary and Financial Code (CMF), as amended by the decree (décret) No. 2023-1293 dated December 28, 2023 and the order (arrêté) dated December 28, 2023 pursuant to the French foreign investment regime, prior approval by the French Minister in charge of Economy may be required in case of investments by certain persons in certain sensitive economic areas that are likely to jeopardize public order, public safety or national defense interests. This applies to:
(I) Any investment by any non-French citizen, any French citizen not residing in France within the meaning of Article 4 B of the French Tax Code, any non-French entity or any French entity controlled by such persons or entities, that will result in the relevant investor:
(a) acquiring control (as defined in article L. 233-3 of the French Commercial Code) of an entity registered in France,
(b) acquiring all or part of a business line of an entity registered in France, or
(c) crossing, directly or indirectly, alone or in concert, a 25% threshold of voting rights in an entity registered in France, in each case1,
(d) crossing, directly or indirectly, alone or in concert, a 10% threshold of voting rights in a French company whose shares are admitted to trading on a regulated market such as Orange1,
(II) Where the entity or business line in which the investment is made conducts activities in certain strategic industries (such as the industry in which Orange operates) listed in the French Monetary and Financial Code (Articles R. 151-3 of the CMF), including:
(a) activities likely to prejudice national defense interests, participating in the exercise of official authority or likely to prejudice public order and public security (including activities related to dual-use goods and technologies, IT systems, cryptology, data capturing devices, gambling, or data storage),
(b) activities relating to essential infrastructure, goods or services (including energy, transportation, space, telecom, public health, or media),
(c) research and development activities related to critical technologies (including cybersecurity, artificial intelligence, robotics, semiconductors, quantum technologies, or energy storage) or dual-use goods and technologies.
The Authorization granted by the Minister may be subject to conditions or mitigation measures.
Investments resulting in the crossing, directly or indirectly, alone or in concert, of the 10% threshold of voting rights in a listed entity may be exempt from prior authorization by the Minister subject to prior notice the Minister for Economy and provided that the Minister has not opposed the investment within 10 business days.
Failure to obtain the relevant prior authorization: (i) shall render null and void the undertaking, agreement or contractual clause which directly or indirectly gives rise to the foreign direct investment, (ii) may give rise to a number of protective measures and injunctions decided by the French Minister in charge of Economy, which may be accompanied by daily penalty payments, and (iii) may result in a fine of up to the greater of: a) double the investment amount, or b) 10% of annual turnover before tax of the protected entity or business line, or c) 5 million euros for corporate entities and 1 million euro for natural persons, whichever is the highest amount.
Lastly, criminal measures may be imposed upon complaint by the Minister in charge of Economy, in accordance with Article 459 of the Customs Code (see also below).
The CMF also imposes an obligation for non-residents of France (and certain French residents, depending on their ownership) to file an administrative notice (déclaration administrative) with French authorities for statistical reporting requirements purposes. Transactions by which non-French residents acquire at least 10% of the share capital or voting rights, or cross the 10% threshold, of a French resident company, are considered as foreign direct investments in France and are subject to statistical reporting requirements (Articles R. 152-1; R. 152-3 and R. 152-11 of the CMF). When the investment exceeds €15,000,000, companies must declare foreign transactions directly to the Banque de France within 20 business days following the date of certain direct foreign investments in the Company, including any purchase of ADSs.
Failure to comply with such statistical reporting requirement may be sanctioned pursuant to Article 459 of the Customs Code, by five years’ imprisonment and a fine of a maximum amount equal to twice the amount which should have been reported, in accordance with Article L. 165-1 of the CMF. This amount may be increased fivefold if the violation is made by a legal entity.
At the European level, the regulation (EU) 2019/452 of 19 March 2019 establishing a framework for the screening of foreign direct investments into the European Union, as amended, provides for the implementation of a mechanism allowing Member States and the European Commission to better cooperate and share intelligence on transactions carried out by investors originating outside the European Union in one or more Member States. Pursuant to this European regulation, any transaction involving a non-European Union entity in the investor’s ownership chain must be notified to the European network. Consequently, when investing in France, foreign direct investors, or their legal counsel, must include the European notification form in their application for authorization to the French Minister in charge of Economy.
1 Does not apply either to a natural person who is a national of a Member State of the European Union or of a State party to the Agreement on the European Economic Area which has concluded an administrative assistance agreement with France to combat fraud and tax evasion and who is domiciled in one of these States, or to an entity in which all the members of the control chain, within the meaning of II of Article R. 151-1 of the French Monetary and Financial Code, are governed by the law of one of these States or are nationals of and domiciled in one of these States.
2023 Form 20-F / ORANGE – 31
Enforceability of Civil Liabilities
Orange SA is a limited liability company (société anonyme) organized under the laws of France, and most of its officers and directors reside outside the United States. In addition, a substantial portion of its assets is located in France.
As a result, it may be difficult for investors:
− | to effect service of process upon or obtain jurisdiction over the Company or its non-U.S. resident officers and directors in U.S. courts, or obtain evidence in France or from French citizen or any individual being resident in France or any officer, representative, agent or employee of a legal person having its registered office or an establishment in a territory of France, in connection with those actions in actions predicated on the civil liability provisions of the U.S. federal securities laws; |
− | to enforce either inside or outside the United States judgments obtained in U.S. or non-U.S. courts in actions predicated upon the civil liability provisions of the U.S. federal securities laws against the Company or its non-U.S. resident officers and directors; |
− | to bring an original action in a French court to enforce liabilities based upon the U.S. federal securities laws against the Company or its non-U.S. resident officers or directors; and |
− | to enforce against the Company or its directors in non-U.S. courts, including French courts, judgments of U.S. courts predicated upon the civil liability provisions of the U.S. federal securities laws. |
Nevertheless, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws, would be recognized and enforced in France provided that a French judge considers that this judgment meets the French legal requirement concerning the recognition and the enforcement of foreign judgments and is capable of being immediately enforced in the United States. A French court is therefore likely to grant the enforcement of a foreign judgment without a review of the merits of the underlying claim, only if (1) the judgment was rendered by a court having jurisdiction over the matter as the dispute is clearly connected to the jurisdiction of such court, the choice of the U.S. court was not fraudulent and the French courts did not have exclusive jurisdiction over the matter, (2) the judgment does not contravene international public policy rule applied by French courts, whether such rule pertains to the merits or pertains to the procedure of the case, including any defense right(s), (3) the U.S. judgment is not tainted with fraud, (4) the judgment does not conflict with a French judgment or a foreign judgment (or an arbitral award) which has become effective in France, and (5) that judgment is enforceable in the jurisdiction of the U.S. court which rendered it.
In addition, French law guarantees full compensation for the harm suffered but is limited to the actual damages, so the victim does not suffer or benefit from the situation, it being specified that under French law, the principle of awarding punitive damages is not, per se, contrary to public order, provided the amount awarded is not disproportionate to the harm suffered and the defendant’s breach.
As a result, the enforcement, by U.S. investors, of any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities law against the Company or members of its Board of Directors, officers or certain experts named herein who are residents of France or countries other than the United States would be subject to the above conditions. In addition, the enforcement of any such judgments obtained in U.S. courts (or in any other court) against the Company would be subject to limitations arising from applicable bankruptcy, insolvency, liquidation, reorganization, moratorium or similar laws affecting the rights of creditors generally.
Finally, there may be doubt as to whether a French court would impose civil liability on the Company, the members of its Board of Directors, its officers or certain experts named herein in an original action predicated solely upon the U.S. federal securities laws brought in a court of competent jurisdiction in France against the Company or such members, officers or experts, respectively.
Provisions having the effect of delaying, deferring or preventing a change of control of the Company
None.
10.C |
MATERIAL CONTRACTS |
See Notes 3.2 Main changes in the scope of consolidation and 14.3 Liquidity Risk Management to the Consolidated Financial Statements included in Item 18, and Section 3.2.1. Recent events in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document, which is incorporated in this section by reference.
10.D |
EXCHANGE CONTROLS |
Under current French exchange control regulations, there are no limitations on the amount of payments that may be remitted by Orange to non-residents of France (subject to the absence of any specific decision taken by the government otherwise). Laws and regulations concerning foreign exchange controls do require, however, that all payments or transfers of funds made by a French resident to a non-resident, such as dividends payments, be handled by an authorized intermediary. In France, all registered banks and substantially all credit establishments are accredited intermediaries. There is a reporting obligation to the relevant customs officer for the transfer of cash in banknotes and coins of €10,000 or more carried in, or out of, the European Union.
2023 Form 20-F / ORANGE – 32
10.E |
TAXATION |
The discussions set forth in this section are based on French tax law and U.S. federal income tax law, including applicable treaties and conventions, as in effect on the date of this Annual Report on Form 20-F. These tax laws, and related interpretations, are subject to change, possibly with retroactive effect. This section is further based in part on representations of the depositary and assumes that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.
10.E.1 French Taxation
The following is a general summary of the material French tax consequences of owning and disposing of the Shares or ADSs of Orange. This summary may only be relevant to you if you are not a resident of France (as defined in Article 4 B of the French General Tax Code), no double tax treaty between France and your country contains a provision under which dividends or capital gains are expressly liable to French tax (see Article 4 bis of the French General Tax Code) and you do not hold your Shares or ADSs in connection with a permanent establishment or a fixed base in France through which you carry on a business or perform personal services.
This discussion is intended only as a descriptive summary. It does not address all aspects of French tax laws that may be relevant to you in light of your particular circumstances.
If you are considering buying Shares or ADSs of Orange, you should consult your own tax advisor about the potential tax effects of owning or disposing of Shares or ADSs in your particular situation.
A comprehensive set of tax rules is specifically applicable to French assets (such as the Shares/ADSs) that are held by or in foreign trusts. These rules provide notably for the inclusion of trust real estate assets in the settlor's net assets for purpose of applying the French real estate wealth tax or trust assets in general for the application of French gift and death duties to French assets held in trust, for a specific tax on capital on the French assets of foreign trusts not already subject to the French real estate wealth tax and for a number of French tax reporting and disclosure obligations. The following discussion does not address the French tax consequences applicable to Shares and ADSs held in trusts. If the Shares or ADSs are held in trust, the grantor, trustee and beneficiary are urged to consult their own tax adviser regarding the specific tax consequences of acquiring, owning and disposing of the Shares or ADSs.
Taxation on sale or disposal of Shares and ADSs
Generally, you will not be subject to any French income tax or capital gains tax when you sell or dispose of Shares or ADSs of Orange if all of the following apply to you:
− | you are not a French resident for French tax purposes; and |
− | you have not held more than 25% of Orange’s dividend rights, known as “droits aux bénéfices sociaux”, at any time during the preceding five years, either directly or indirectly, and, as relates to individuals, alone or with relatives, |
unless you are established or domiciled in a jurisdiction listed as a non-cooperative state or territory (Etat ou territoire non coopératif) within the meaning of Article 238-0 A of the French General Tax Code (a “Non-Cooperative State”), in which case you will be subject to a 75% tax on capital gain. The list of Non-Cooperative States is published by ministerial executive order and is updated from time to time.
If an applicable double tax treaty between France and your country contains more favorable provisions, you may not be subject to any French income tax or capital gains tax when you sell or dispose of any Shares or ADSs of Orange even if one or more of the above statements do not apply to you.
If you are a resident of the United States who is eligible for the benefits of the income tax treaty between the United States of America and France dated August 31, 1994 (as further amended) (the “U.S. France Treaty”) and either you hold the Shares or the ADSs directly or hold them through a partnership which is fiscally transparent under U.S. law and is formed or organized in France, in the United States of America or in a state that has concluded with France an agreement containing a provision for the exchange of information with a view to the prevention of tax evasion, to the extent that the gain is treated for purposes of U.S. taxation as your income, you will not be subject to French tax on any capital gain if you sell or exchange your Shares or ADSs unless you have a permanent establishment or fixed base in France and the Shares or ADSs sold or exchanged were part of the business property of that permanent establishment or fixed base.
Special rules apply to individuals who are residents of more than one country.
Subject to specific conditions, foreign states, international organizations and a number of foreign public bodies are not considered French residents for these purposes.
2023 Form 20-F / ORANGE – 33
Pursuant to Article 235 ter ZD of the French General Tax Code, purchases of certain securities are subject to a 0.3% French tax on financial transactions provided that the market capitalization of the issuer exceeds 1 billion euros as of December 1 of the year preceding the taxation year. A list of companies whose market capitalization exceeds 1 billion euros as at December 1, 2023, has been published in the official guidelines of the French tax authorities on December 20, 2023 (BOI-ANNX-000467) and Orange has been included on such list as a company whose market capitalization exceeded 1 billion euros as at December 1, 2023. Therefore, purchases of Orange’s Shares or ADSs are subject to such French tax on financial transactions. Please note that such list may be amended in the future.
Taxation of dividends
Under French domestic law, French companies must generally deduct a 25% French withholding tax from dividends (including distributions from share capital premium, insofar as the company has distributable reserves) paid to non-residents (12.8% for distributions made to individuals and 15% for distributions made to not-for-profit organizations with a head office in a Member State of the European Economic Area which would be subject to the tax regime set forth under Article 206-5 of the French General Tax Code if its head office were located in France and which meet the criteria set forth in the administrative guidelines BOI-RPPM-RCM-30-30-10-70-24/12/2019, n°130 et seq.). Under most tax treaties between France and other countries, the rate of this withholding tax may be reduced in specific circumstances. Generally, a holder who is a non-French resident is subsequently entitled to a tax credit in his or her country of residence for the amount of tax actually withheld at the appropriate treaty rate.
However, dividends paid or deemed to be paid by a French corporation, such as Orange, towards a Non-Cooperative State, will generally be subject to French withholding tax at a rate of 75%, irrespective of the tax residence of the beneficiary of the dividends if the dividends are received or deemed to be received in such States or territories (subject to the more favorable provisions of an applicable double tax treaty).
Under some tax treaties, a shareholder who fulfills specific conditions may generally apply to the French tax authorities for a lower rate of withholding tax, generally 15%. Under some tax treaties, the withholding tax is eliminated altogether.
If the arrangements provided for by any of such treaties apply to a shareholder, Orange or the authorized intermediary will withhold tax from the dividend at the lower rate, provided that the shareholder complies, before the date of payment of the dividend, with the applicable filing formalities. Otherwise, Orange or the authorized intermediary must withhold tax at the full rate of 15%, 12.8%, 25% or 75% as applicable, and the shareholder may subsequently claim the refund of excess tax paid.
If you are a resident of the United States who is eligible for the benefits of the U.S. France Treaty (in particular, entitled to Treaty benefits under the ‘‘Limitation on Benefits’’ provision) and either you hold the Shares or the ADSs directly or hold them through a partnership which is fiscally transparent under U.S. law and is formed or organized in France, or in the United States of America or in a state that has concluded with France an agreement containing a provision for the exchange of information with a view to the prevention of tax evasion, to the extent that the dividend is treated for purposes of the U.S. taxation as your income, French dividend withholding tax is reduced to 15% provided your ownership of the Shares or ADSs is not effectively connected with a permanent establishment or a fixed base that you have in France. A U.S. partnership generally can claim benefits under the U.S. France Treaty only to the extent its income is taxable in the United States as the income of a resident, either in the hands of such partnership or in the hands of its partners. Although not expressly stated in their current guidelines, the French tax authorities conceded that the benefits of the U.S. France Treaty may still be claimed if one or several members of the U.S. partnership are themselves U.S. partnerships to the extent of the income taxable in the United States as the income of a resident in the hands of the ultimate partner or partners. Certain other requirements must be satisfied. In particular, you will have to comply with the formalities set out in Item 10.E.3 “Procedure for Reduced Withholding Rate”. If you fail to comply with such formalities before the date of payment of the dividend, Orange or the authorized intermediary shall deduct French withholding tax at the rate of 15%, 12.8%, 25% or 75% as applicable. In that case, you may claim a refund from the French tax authorities of the excess withholding tax.
Certain tax exempt U.S. entities (such as tax-exempt U.S. pension funds, which include the exempt pension funds established and managed in order to pay retirement benefits subject to the provisions of Section 401(a) of the Internal Revenue Code (qualified retirement plans), Section 403(b) of the Internal Revenue Code (tax deferred annuity contracts) or Section 457 of the Internal Revenue Code (deferred compensation plans), and various other tax-exempt entities, including certain state-owned institutions, not-for-profit organizations and individuals with respect to dividends which they beneficially own and which are derived from an investment retirement account) may be eligible for the reduced withholding tax rate of 15% on dividends. Specific rules apply to them as further described below in Item 10.E.3 “Procedure for Reduced Withholding Rate”.
Estate and Gift Tax
France imposes estate and gift tax where an individual or entity acquires shares of a French company from a non-resident of France by way of inheritance or gift. France has entered into estate and gift tax treaties with a number of countries. Under these treaties, the transfer by residents of those countries of shares of a French company by way of inheritance or gift may be exempt from French inheritance or gift tax or give rise to a tax credit in such countries, assuming specific conditions are met.
2023 Form 20-F / ORANGE – 34
Under the “Convention Between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritance and Gifts of November 24, 1978” (as further amended), French estate and gift tax generally will not apply to the individual or entity acquiring your Shares or ADSs if that individual or entity as well as you are residents of the United States and if you transfer your Shares or ADSs by gift, or they are transferred by reason of your death, unless you are a citizen of France or domiciled in France at the time of making the gift of the Shares or ADSs or at the time of your death, or you used the Shares or ADSs in conducting a business through a permanent establishment or fixed base in France, or you held the Shares or ADSs for that use.
You should consult your own tax advisor about whether French estate and gift tax will apply and whether an exemption or tax credit can be claimed.
Real Estate Wealth Tax
The French real estate wealth tax known as impôt sur la fortune immobilière replaced the French wealth tax, known as impôt de solidarité sur la fortune, with effect from January 1, 2018.
Company Shares are included in the basis of calculation of the French real estate wealth tax for the fraction of their value representing property or real estate rights held directly or indirectly by the company. However, buildings and real estate rights allocated to the industrial or commercial activity of the company that holds them directly are excluded from the calculation of the taxable fraction (article 965, 2°-a of the French General Tax Code).
In any case, you will not be subject to French real estate wealth tax, on your Shares or ADSs of Orange if both of the following apply to you:
− | you are not a French resident for the purpose of French taxation; and |
− | you own, either directly or indirectly, less than 10% of Orange capital stock, provided your Shares or ADSs do not enable you to exercise influence on Orange. |
If a double tax treaty between France and your country contains more favorable provisions, you may not be subject to French real estate wealth tax even if one or both of the above statements do not apply to you.
The French real estate wealth tax generally does not apply to Shares or ADSs if you are a resident of the United States for purposes of the U.S. France Treaty provided that you do not own directly or indirectly Shares or ADSs exceeding 25% of the financial rights of Orange.
10.E.2 U.S. Taxation of U.S. Holders
The following discussion is a general summary of certain U.S. federal income tax considerations relevant to the ownership and disposition of Orange Shares and ADSs. The discussion is not a complete description of all income tax considerations that may be relevant to you. It does not deal with federal estate or gift taxation or taxation by U.S. states. It does not consider your particular circumstances. It applies to you only if you are a U.S. Holder, you hold the Shares or ADSs as capital assets, you use the U.S. dollar as your functional currency and you are eligible for the benefits of the U.S. France Treaty. It does not address the tax treatment of investors subject to special rules, such as banks, tax-exempt entities, insurance companies, dealers, traders in securities that elect to mark to market, U.S. expatriates or persons who directly, indirectly or constructively own 10% or more of the Shares or ADSs, have a permanent establishment in France, acquire ADSs in a “pre-release” transaction or hold Shares or ADSs as part of a straddle, hedging, conversion or other integrated transaction. For certain additional information regarding U.S. partnerships, see also the discussion presented under the caption “Taxation of Dividends” in Item 10.E.1 (French Taxation).
As used here, a “U.S. Holder” means a beneficial owner of the Shares or ADSs, that is, for U.S. federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation or other business entity taxed as a corporation that is created or organized under the laws of the United States or its political subdivisions, (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust subject to the primary supervision of a U.S. court and the control of one or more U.S. persons or that has elected to be treated as a domestic trust.
The U.S. federal income tax treatment of a partner in a partnership that holds Shares or ADSs will depend on the status of the partner and the activities of the partnership. Partnerships should consult their tax advisors concerning the U.S. federal income tax consequences of the acquisition, ownership and disposition of the Shares or ADSs.
U.S. Holders of ADSs generally will be treated for U.S. federal income tax purposes as owners of the Shares underlying the ADSs.
2023 Form 20-F / ORANGE – 35
Orange believes, and this discussion assumes, that Orange is not and will not become a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.
Dividends
Distributions on Orange Shares and ADSs, including French tax withheld and the gross amount of any payment on account of a French tax credit, will be includable in income as dividends from foreign sources when actually or constructively received. The dividends will not be eligible for the dividends received deduction generally allowed to U.S. corporations. The dividends received by non-corporate U.S. Holders, however, should be taxed as qualified dividends, currently at the same preferential rate allowed for long-term capital gains, because the ADSs are readily tradable on the NYSE.
The U.S. dollar amount of a euro dividend received on the Shares or ADSs will be based on the exchange rate for the euros received on the date you recognize the dividend for U.S. federal income tax purposes, whether or not you convert the euros into U.S. dollars. You will have a basis in the euros received equal to the U.S. dollar amount of the dividend you realized. Any gain or loss on a subsequent conversion or other disposition of the euros generally will be ordinary income or loss from U.S. sources.
Subject to generally applicable limitations and the Final FTC Regulations (as defined below), you may claim a deduction or a foreign tax credit for tax withheld at the applicable withholding rate. In computing foreign tax credit limitations, non-corporate U.S. Holders eligible for the preferential tax rate applicable to qualified dividend income may take into account only the portion of the dividend effectively taxed at the highest applicable marginal rate. Treasury Regulations issued on December 28, 2021, which apply to foreign taxes paid or accrued in taxable years beginning on or after December 28, 2021, or the Final FTC Treasury Regulations, impose additional requirements for foreign taxes to be eligible for credit. However, the IRS has indicated that taxpayers may defer the application of certain of these additional requirements until further notice. You should consult your own tax adviser about your eligibility for benefits under the U.S. France Treaty including a reduced rate of French withholding tax and for applicable limitations on claiming a deduction or foreign tax credit for any French tax withheld, including the Final FTC Regulations.
Dispositions
You will recognize gain or loss on a disposition of Orange Shares or ADSs in an amount equal to the difference between the amount you realize and your adjusted tax basis in the Shares or ADSs. Your adjusted tax basis in a Share or ADS will generally be the amount you paid for it measured in U.S. dollars. The U.S-dollar cost of a Share or ADS purchased with foreign currency will generally be the U.S-dollar value of the purchase price. The gain or loss generally will be from sources within the United States. The gain or loss will be long-term capital gain or loss if you held the Shares or ADSs for at least one year. Long term capital gains realized by non-corporate U.S. Holders currently qualify for preferential tax rates. Deductions for capital losses are subject to limitations.
If you receive a currency other than U.S. dollars upon disposition of the Shares or ADSs, you will realize an amount equal to the U.S. dollar value of the currency received on the date of disposition (or, if you are a cash-basis or an accrual basis taxpayer that files an election with the IRS, the settlement date). You will have a tax basis in the currency received equal to the U.S. dollar amount you realized. Any gain or loss on a subsequent conversion or disposition of the currency received generally will be U.S. source ordinary income or loss.
Deposits or withdrawals of Shares in exchange for ADSs will not be taxable transactions subject to U.S. federal income tax.
U.S. Information Reporting and Backup Withholding for U.S. Holders
Your dividends on the Shares or ADSs and proceeds from the sale or other disposition of the Shares or ADSs may be reported to the U.S. Internal Revenue Service unless you are a corporation or you otherwise establish a basis for exemption. Backup withholding tax may apply to amounts subject to reporting if you fail to provide an accurate taxpayer identification number or otherwise establish a basis for exemption. You can claim a credit against your U.S. federal income tax liability for amounts withheld under the backup withholding rules and a refund for any excess.
Certain U.S. Holders will be required to report information with respect to Shares and ADSs that are held through foreign accounts. U.S. Holders who fail to report information required under these rules could become subject to substantial penalties. You are urged to consult your U.S. tax advisor regarding these and other reporting requirements that may apply with respect to your Shares or ADSs, as well as the application of all of the above rules to your particular tax situation.
10.E.3 Procedure for reduced withholding rate
If you are eligible for benefits under the U.S. France Treaty, you will be entitled to reduce the rate of French withholding tax on dividends by filing the applicable form(s) with the depositary or other financial institution managing your securities account in the United States, or failing that, the French paying agent, if the financial institution managing your securities account or the French paying agent receives the form(s) before the date of payment of the dividend. If you fail to submit the applicable form(s) in time to avoid withholding, you may claim a refund for the amount withheld in excess of the U.S. France Treaty rate.
2023 Form 20-F / ORANGE – 36
In order to have taxes on dividends withheld at the reduced amount, you generally must provide the depositary, or other financial institution managing your securities account in the United States, with a certificate of residence before the dividend is paid. If this certificate is not stamped by the U.S. Internal Revenue Service, the depositary or other financial institution managing your securities account in the U.S. must provide the French paying agent with a document listing certain information about the U.S. Holder and its Shares or ADSs and a certificate whereby the financial institution managing your securities account in the United States takes full responsibility for the accuracy of the information provided in the document.
Tax exempt U.S. pension funds, charities or other tax exempt organizations must also provide a certificate from the U.S. Internal Revenue Service setting out that they have been created and operate in compliance with the Internal Revenue Code of 1986, as amended. Tax exempt organizations may obtain this certification by filing a U.S. Internal Revenue Service Form 8802. Similar requirements apply to REITs, RICs and REMICs.
Collective trusts of pension funds may apply for the withholding tax reduction on behalf of their members if they provide a complete list of their members, the required certificate from the IRS for each member which is a tax exempt U.S. pension fund and a certificate setting out the dividend to which each tax exempt U.S. pension fund which is a member is entitled.
The relevant French forms will be provided by the depositary to all U.S. Holders of ADSs registered with the depositary and all U.S. Internal Revenue Service Forms are also available from the U.S. Internal Revenue Service. The depositary will arrange for the filing with the French paying agent and the French tax authorities of all forms completed by U.S. Holders of ADSs that are returned to the depositary in sufficient time.
You should consult your own independent tax advisors about the availability and applicability of the reduced rate of French withholding tax.
10.F |
DIVIDENDS AND PAYING AGENTS |
Not applicable.
10.G |
STATEMENT BY EXPERTS |
Not applicable.
10.H |
DOCUMENTS ON DISPLAY |
Orange is subject to the reporting requirements of the Exchange Act applicable to foreign private issuers. In connection with the Exchange Act, Orange files reports, including this Annual Report on Form 20-F, and other information with the U.S. Securities and Exchange Commission (the "SEC"). Such reports and other information are available on the SEC’s website at www.sec.gov, and may also be inspected and copied at prescribed rates at the public reference facilities maintained by the SEC at its Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.
All documents provided to shareholders as required by law may be consulted at Orange's registered offices at 111, quai du Président Roosevelt, 92130 Issy-les-Moulineaux, France.
In addition, the bylaws of Orange are available on Orange’s website at www.orange.com. For the avoidance of doubt, the information available on our website is not incorporated by reference in this Form 20-F.
10.I |
SUBSIDIARY INFORMATION |
For information relating to the Company’s subsidiaries, see Note 20 Main consolidated entities to the Consolidated Financial Statements.
10.J |
DISCLOSURE PURSUANT TO SECTION 13 (r) OF THE UNITED STATES EXCHANGE ACT OF 1934 |
Section 13(r) of the Exchange Securities Act requires an issuer to disclose in its annual or quarterly reports, as applicable, certain activities, including certain transactions or dealings relating to the “Government of Iran” as defined under § 560.304 of the Iranian Transactions and Sanctions Regulations (31 C.F.R. Part 560) and certain persons that are the subject of U.S. sanctions. Disclosure may be required even where the activities, transactions or dealings are conducted outside the United States by non-U.S. affiliates in compliance with applicable law and regardless of whether the activities are sanctionable under U.S. law.
Orange conducts limited business in Iran, all of which relates to telecommunications. The total revenue from these activities constitutes much less than 1% of the Group's consolidated revenue in the year ended December 31, 2023. Orange maintains roaming agreements and interconnection agreements with certain Iranian telecommunications companies. Orange also maintains a connectivity agreement with the Telecommunications Infrastructure Company (TIC). Separately, Orange Business operating segment provides (through indirect, wholly-owned subsidiaries of Orange) telecommunications services to certain international public organizations and multinationals in Iran. In 2023, these telecommunication services represented gross revenues of approximately 4 million euros and a net profit of approximately 0.36 million euros.
2023 Form 20-F / ORANGE – 37
In addition, Orange provides standard commercial telecommunications services to certain Iranian companies present in France and the branches of several Iranian banks in France. In 2023, these telecommunication services represented gross revenues of approximately 50,000 euros and a net profit of approximately 2,000 euros.
Orange intends to continue carrying out these activities.
Item 11 |
Quantitative and qualitative disclosures about market risk |
See Note 14 Information on market risk and fair value of financial assets and liabilities (telecom activities) to the Consolidated Financial Statements. The Group uses hedging instruments in order to limit its exposure to operational and financial foreign exchange and interest rate risks, while maintaining a diversified financing policy.
Item 12 |
Description of securities other than equity securities |
12.A |
DEBT SECURITIES |
Not applicable.
12.B |
WARRANTS AND RIGHTS |
Not applicable.
2023 Form 20-F / ORANGE – 38
12.C |
OTHER SECURITIES |
Not applicable.
12.D |
AMERICAN DEPOSITARY SHARES |
Orange's ADR facility is maintained by Bank of New York Mellon, which principal executive office is located at 240 Greenwich Street, New York, New York 10286 ("the Depositary").
One American Depositary Share represents one Share of Orange. A copy of our form of Amended and Restated Deposit Agreement ("the Deposit Agreement") among the Depositary, owners and holders of ADSs evidenced by ADRs issued under the Deposit Agreement and Orange was filed with the SEC as an exhibit to the Form F-6 filed on July 27, 2017. Société Générale ("the Custodian") acts as agent of the Depositary for the purposes of this Deposit Agreement. For more complete information, including on holders’ rights and obligations, holders should read the entire deposit agreement, as amended, and the ADR itself.
Fees and charges payable by a holder of ADSs
Under the Deposit Agreement, the Depositary collects fees for delivery and surrender of ADSs directly from investors depositing Shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of the distributable property to pay the fees.
The fees payable to the Depositary by investors are as follows:
Depositary actions: |
|
Fee: |
− Issuance of ADSs, including issuances resulting from a distribution of Shares or rights or other property |
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
− Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates |
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
− Any cash distribution to ADS registered holders |
|
$0.05 (or less) per ADS |
− Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders |
|
A fee equivalent to the fee that would be payable if securities distributed to holders of deposited securities had been Shares and the Shares had been deposited for issuance of ADSs |
− Transfer and registration of Shares on the Depositary’s share register to or from the name of the Depositary or its agent when depositing or withdrawing Shares |
|
Registration or transfer fees |
− Depositary service |
|
$0.05 (or less) per ADS (or portion thereof) per annum |
In addition, investors must, as necessary, reimburse the Depositary for:
Fees and payments made by the Depositary to the Issuer
The Depositary has agreed to reimburse the Company for expenses the Company incurs that are related to establishment and maintenance expenses of the ADR facility. The Depositary has agreed to reimburse the Company for its continuing annual stock exchange listing fees. The Depositary has also agreed to pay the standard out-of-pocket maintenance costs for the ADRs, which consist of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls. It has also agreed to reimburse the Company annually for certain investor relationship programs or special investor relations promotional activities. The Depositary has agreed to provide additional payments to the Company based on activity indicators relating to the outstanding ADRs.
2023 Form 20-F / ORANGE – 39
During the fiscal year ended December 31, 2023, payments of 2.8 million U.S. dollars were made to Orange in relation thereto.
Voting the Shares at shareholders’ meetings
Pursuant to a deposit agreement signed with the Company, the Company shall timely notify the Depositary in writing prior to any meeting of holders of Shares or other Deposited Securities of such meeting. Upon receipt of such notice, and upon consultation with the Company, the Depositary shall, in a timely manner, mail to owners of ADSs (the Owners):
− | a notice of impending meetings, |
− | a statement that the Owners will be entitled, subject to any applicable provision of French law and the bylaws of the Company, to instruct the Depositary as to the exercise of the voting rights pertaining to the Shares represented by the ADSs, |
− | copy or summary of any material provided by the Company, |
− | a voting instruction card, |
− | and a statement as to the manner in which such instructions may be given, including an express indication that if no instruction is received, such instructions may be given or deemed given, to the Depositary to give the Custodian instructions to vote or cause to vote the Deposited Securities underlying the ADSs for which voting instructions are specifically given or deemed given, in accordance with the recommendations of the Board of Directors of the Company. |
The Depositary will not charge any fee in connection with enabling the Owners to exercise their voting rights.
The Depositary and the Company may amend the voting procedures from time to time as they determine appropriate to comply with French or United States law or the bylaws of the Company.
Reports, notices and other communications
On or before the first date on which the Company gives notice of any meeting of holders of Shares or of the taking of any action in respect of any cash or other distribution or the offering of any rights, the Company shall transmit to the Depositary a copy of the notice thereof. The Company will also arrange for the prompt transmittal to the Depositary of any other report and communication which is made generally available by the Company to holders of its Shares. The Company may arrange for the Depositary to mail copies of such notices, reports and communications to all Owners.
PART II
Item 13 |
Defaults, dividend arrearages and delinquencies |
Not applicable.
Item 14 |
Material modifications to the rights of security holders and use of proceeds |
None.
Item 15 |
Controls and procedures |
15.A |
DISCLOSURE CONTROLS AND PROCEDURES |
Since 2003, Orange has had a Disclosure Committee whose mission is to ensure the accuracy, the compliance with applicable laws, regulations and recognized practices, the consistency and the quality of the financial information disclosed by Orange. The Disclosure Committee, operating under the authority of the Group Executive Director Finance, Performance and Development (in his capacity as Chief Financial Officer), reviews all financial information distributed by the Group, as well as related documents such as press releases announcing financial results, presentations to financial analysts and management reports. The Disclosure Committee is chaired, by delegation, by the Group Accounting Director and brings together the heads of the Legal, Internal Audit, Controlling, Investor Relations and Communication Departments.
2023 Form 20-F / ORANGE – 40
Orange’s Chief Executive Officer and Group Executive Director Finance, Performance and Development (in his capacity as Chief Financial Officer, after evaluating the effectiveness of the Group’s disclosure controls and procedures (as defined by Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023, have concluded that, as of such date, Orange’s disclosure controls and procedures were effective. Orange’s disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the specified time periods, and that such information is made known to the Chief Executive Officer and Group Executive Director Finance, Performance and Development (in his capacity as Chief Financial Officer), as appropriate to allow timely decisions regarding required disclosure.
15.B |
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING |
Orange’s management is responsible for establishing and maintaining adequate internal control over financial reporting of Orange (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
Orange’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
The Group’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Group; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Group are being made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Group’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Group management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework presented in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Based on this evaluation, management concluded that the Group’s internal control over financial reporting was effective as of December 31, 2023. The effectiveness of the Group’s internal control over financial reporting as of December 31, 2023 has been audited by KPMG S.A. and Deloitte & Associés, independent registered public accounting firms, as stated in their report which is included herein.
15.C |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS |
To the Shareholders and the Board of Directors of Orange S.A.,
Opinion on Internal Control Over Financial Reporting
We have audited the internal control over financial reporting of Orange S.A. and its subsidiaries (the “Group”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statements of financial position of the Group as of December 31, 2023, 2022 and 2021, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows, for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements") and our report dated March 27, 2024 expressed an unqualified opinion on those consolidated financial statements.
2023 Form 20-F / ORANGE – 41
Basis for Opinion
The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Paris-La Défense, France
March 27, 2024
/s/ KPMG S.A. |
/s/ Deloitte & Associés |
15.D |
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING |
None.
Item 16 |
[Reserved] |
Item 16A |
Audit committee financial expert |
Gilles Grapinet is the Audit Committee's financial expert as defined in Item 16A(b) and (c) of the SEC General Instructions on Form 20-F. Gilles Grapinet is “independent” as defined by Rule 10A-3(b)(1)(ii) under the Exchange Act, as amended (see Item 6 Directors, Senior Management and Employees). Mr. Grapinet's term as director will expire at the Annual General Meeting of shareholders in May 2027.
2023 Form 20-F / ORANGE – 42
Item 16B |
Code of ethics |
Orange’s Board of Directors has adopted a Code of Ethics that applies to all Orange employees, including the Chief Executive Officer, the Group Executive Director Finance, Performance and Development , the principal accounting officer and the persons performing similar functions. A copy of Orange’s Code of Ethics is filed as Exhibit 11 to this document and is publicly accessible free of charge on Orange’s website at www.orange.com. In the event of any amendments to the Code of Conduct, Orange will disclose such modifications on its website.
Item 16C |
Principal accountant fees and services |
Information about fees billed to Orange by our Independent registered public accounting firms KPMG SA, Paris La Défense, France (PCAOB ID No. 1253) and Deloitte & Associés, Paris La Défense, France (PCAOB ID No. 1756) is presented in Note 21 Auditor’s fees to the Consolidated Financial Statements.
The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy that sets forth the procedures and the conditions pursuant to which services proposed to be performed by the statutory auditors may be pre-approved and that are not prohibited by regulatory or other professional requirements. This policy provides pre-approval in principles for certain types of services notably through the use of an annual budget approved by the Audit Committee and special pre-approval of other services by the Audit Committee on a case-by-case basis. The Audit Committee reviews at interim and annual closing the services provided by the statutory auditors.
Item 16D |
Exemptions from listing standards for audit committees |
Orange’s Audit Committee consists of five directors including three directors who meet the independence requirements under Rule 10A-3 under the Exchange Act, as amended, and two who are exempt from such requirements pursuant to Rule 10A-3(b)(1)(iv) under the Exchange Act. The Audit Committee members exempt from the independence requirements are Ms. Céline Fornaro who meets the exemption requirements under Rule 10A-3(b)(1)(iv)(E) under the Exchange Act relating to foreign government representatives, and Mr. Sébastien Crozier who meets the exemption requirements under Rule 10A-3(b)(1)(iv)(C) under the Exchange Act relating to non-executive employees. Orange’s reliance on such exemptions does not materially adversely affect the ability of the Audit Committee to act independently.
Item 16E |
Purchase of equity securities by the issuer and affiliated purchasers |
The information required by this section is set forth in the 2023 Universal Registration Document filed as Exhibit 15.1 of this document in Section 6.1.4 Treasury shares – Share Buyback program, and is incorporated in this section by reference.
The table below presents additional information on the purchases of treasury Shares in 2023:
Settlement month |
|
Total number of |
|
Weighted average |
|
Total number of |
|
Maximum number of |
January 2023 |
|
2,806,489 |
|
97,067 |
|
2,806,489 |
|
250,634,660 |
February 2023 |
|
2,092,753 |
|
100,234 |
|
2,092,753 |
|
248,541,907 |
March 2023 |
|
4,218,743 |
|
107,665 |
|
4,218,743 |
|
244,323,164 |
April 2023 |
|
3,192,879 |
|
112,728 |
|
3,192,879 |
|
241,130,285 |
May 2023 |
|
4,068,649 |
|
115,156 |
|
4,068,649 |
|
261,937,011 |
June 2023 |
|
1,815,064 |
|
107,285 |
|
1,815,064 |
|
260,121,947 |
July 2023 |
|
2,266,422 |
|
105,379 |
|
2,266,422 |
|
257,855,525 |
August 2023 |
|
983,279 |
|
102,261 |
|
983,279 |
|
256,872,246 |
September 2023 |
|
1,728,444 |
|
108,194 |
|
1,728,444 |
|
255,143,802 |
October 2023 |
|
1,689,902 |
|
108,816 |
|
1,689,902 |
|
253,453,900 |
November 2023 |
|
1,922,949 |
|
110,410 |
|
1,922,949 |
|
251,530,951 |
December 2023 |
|
3,134,314 |
|
108,663 |
|
3,134,314 |
|
248,396,637 |
Total |
|
29,919,887 |
|
|
|
29,919,887 |
|
|
(1) | Until May 23, 2023, under the 2022 Share buyback program approved by the Annual Shareholders' Meeting of May 19, 2022 for up to 10% of Orange’s share capital; from May 24, 2023, under the 2023 Share buyback program approved by the Annual Shareholders' Meeting of May 23, 2023 for up to 10% of Orange’s share capital for a period of 18 months |
(2) | At month end. |
2023 Form 20-F / ORANGE – 43
Item 16F |
Change in Registrant’s Certifying Accountant |
Not applicable
Item 16G |
Corporate governance |
Orange has endeavored to take into account the NYSE corporate governance standards as codified in section 303A of the NYSE Listed Company Manual. However, because Orange SA is not a U.S. company, most of those standards do not apply to Orange, which may choose to follow rules applicable in France.
The table below discloses the significant ways in which Orange’s corporate governance practices differ from those required for U.S. companies listed on the NYSE.
NYSE Standards |
Corporate Governance Practices of Orange |
---|---|
Board Independence |
Orange’s Board of Directors has chosen to determine the independence of its members against the criteria set out in France in the Afep-Medef Report (defined in Item 16G as the “Report”), which provides that one-third of board members should be independent. According to the criteria the Report sets out, seven members (out of the total of 15 current board members) are independent. Orange has not tested the independence of its board members under the NYSE standards; a majority of the board may not be independent under those criteria. The criteria against which the directors’ independence must be tested, as provided in the Report, are set forth in Section 5.2.1.2 Independent Directors of the 2023 Universal Registration Document, filed as Exhibit 15.1 of this document and is incorporated this section by reference. |
Executive Sessions/ Communications with the Presiding Director or Non-Management Directors |
French law does not require non-management directors to meet regularly without management. However, in accordance with the recommendation of the Report, the newly appointed Chairman of the Board supported a modification of the Board's Internal Guidelines in 2022 resulting in the introduction of a new requirement that meetings reserved to non-management directors be organized regularly. French law does not mandate (and Orange does not provide for) a method for interested parties to communicate with the presiding director or non-management directors. |
Compensation/Nominating/ Corporate Governance Committee |
Orange has a combined Governance and Corporate Environmental and Social Responsibility Committee. The Committee consists of three directors, including one independent director (according to the criteria set out in the Report). The NYSE standards provide for the implementation of two separate committees (a Nominating Committee and a Compensation Committee) composed exclusively of independent directors. In terms of internal mechanics, while the Committee has a written charter, it does not comply with all the requirements of the NYSE. In addition, in accordance with law, the Governance and Corporate Environmental and Social Responsibility Committee is not vested with the same scope of authority and responsibilities as that available to U.S. domestic companies. Under French law, the committees of our Board of Directors are advisory only; our Board of Directors is, pursuant to French law, the only competent body to take decisions, albeit taking into account the recommendations of the relevant committees. |
Audit Committee |
Orange’s Audit Committee consists of five directors including three independent directors (according to the criteria set out in the Report) and two non-independent directors. Of those, one is a representative of the French Government and one is an employee who is not an executive officer of the Issuer. While not meeting the definition of independence set forth in Rules 10A-3 (b) (1) under the Exchange Act, as amended, they fall within the exceptions under Rule 10A-3(b)(1)(iv) (C) relating to non-executive employees and Rule 10A-3(b)(1)(iv) (E) relating to foreign government representatives. For its part, the Report recommends that two-thirds of an audit committee’s members should be independent. The Committee is responsible for organizing the procedure for selecting the statutory auditors. It makes a recommendation to the Board of Directors regarding their choice and terms of compensation. As required by French law, the actual appointment of the statutory auditors is made by the Shareholders’ Meeting. According to its charter, the Committee has the authority to engage advisors including those with respect to sustainability as per the European corporate sustainability reporting directive (CSRD) and determine appropriate funding for payment of compensation to an accounting firm for an audit or other service. French corporate law provides that the Board of Directors must vote to approve a broadly defined range of related-party transactions (conventions règlementées) between the Company on the one hand and its directors and officers on the other hand, which are then presented to shareholders for approval at the next annual meeting. This legal safeguard operates in place of certain provisions of the NYSE rules. |
Equity Compensation Plans |
The NYSE requires a listed U.S. company to obtain prior shareholder approval for certain issuances of authorized stock and equity compensation plans when such plans are established or materially amended. Under French law, Orange must obtain shareholder approval at a Shareholders’ Meeting in order to adopt an equity compensation plan. Generally, the shareholders then delegate to the Board of Directors the authority to decide on the specific terms and conditions of the granting of equity compensation, within the limits of the shareholders' authorization. While the Company may, from time to time, obtain shareholder approval of an issuance of authorized stock or an equity compensation plans in order to obtain advantageous tax treatment or otherwise, as a general matter, we intend to follow our French home country practice, which does not require such shareholder approvals, rather than complying with these NYSE rules. |
Adoption and disclosure of corporate governance guidelines |
Orange has adopted corporate governance guidelines (the “Internal Guidelines,” available on its website at www.orange.com under Group/Governance/Documentation links to Governance) as required by French law. |
2023 Form 20-F / ORANGE – 44
NYSE Standards |
Corporate Governance Practices of Orange |
---|---|
For the avoidance of doubt, the information available on our website is not incorporated by reference in this Annual Report on Form 20-F. These corporate governance guidelines do not cover all items required by NYSE guidelines for U.S. companies. |
|
Code of Ethics |
Orange has adopted a Code of Ethics to be observed by all its directors, officers and other employees that generally meets the requirements of the NYSE. |
Annual certifications |
Because Orange is a “foreign private issuer” as described above, its Chief Executive Officer and its Chief Financial Officer issue the certifications required by Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 on an annual basis (with the filing of its Annual Report on Form 20-F) rather than on a quarterly basis as would be the case of a US corporation filing quarterly reports on Form 10-Q. |
Item 16H |
Mine Safety Disclosure |
Not applicable.
Item 16I |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
Not applicable.
Item 16J |
Insider Trading Policies |
Not applicable.
Item 16K |
Cybersecurity |
Risk Management and Strategy
To assess, identify and manage material risks from cybersecurity, Orange has implemented a general data security framework that covers both corporate information and personal data.
This framework is integrated into Orange’s overall risk management system as a component of its Group Security Management System (“GSMS”), which is guided by internationally-recognized standards. The objective of the GSMS is the continuous improvement of security based on the management and assessment of risks, particularly risks from cybersecurity threats. A key part of the GSMS is the group security policy (the “Group Security Policy”), which contains a risk-based approach and seeks to apply certain guiding security principles and strategic objectives to Orange business segments.
Orange’s cybersecurity risk management is implemented by Orange’s Corporate Security Directorate (“DSEC”), which is responsible for setting the parameters of Orange’s cybersecurity risk profile and presenting its analysis of key cybersecurity matters to Orange management. Through the DSEC, the implementation of the Group Security Policy is regularly assessed and monitored for effectiveness and compliance with the Group Security Policy. The DSEC is also responsible for determining the principal cybersecurity risks facing the Group, which are presented to and approved by the Risk Committee of the Group’s Executive Committee. Cybersecurity incidents are managed by the DSEC and reported to the Risk Committee and, if necessary, the Board, as circumstances require.
In addition, employees are informed of issues and risks related to cybersecurity through a range of in-house training courses covering both the principles of data security and compliance requirements in terms of personal data protection.
Orange also engages third party service providers from time to time to assist it with assessing, enhancing, implementing, and monitoring its cybersecurity risk-management programs. Orange maintains processes to oversee and identify risks from cybersecurity threats associated with its use of third-party service providers, including through a special team within the DSEC dedicated to evaluating the cybersecurity risks of such third-party providers. The Group conducts a cybersecurity review and seeks to obtain contractual assurances regarding cybersecurity as part of the contract it enters into with such third-party providers.
As of the filing of this Annual Report on Form 20-F, the Group is not aware of any cybersecurity incidents that have occurred since the beginning of 2023 that have materially affected, or are reasonably likely to materially affect Orange, including Orange’s business strategy, results of operations or financial condition. Orange could be subject to cybersecurity incidents in the future which may have a material adverse effect on Orange’s business strategy, results of operations or financial condition. For further information on Orange’s risks relating to cybersecurity threats, see item 3.D Risk factors.
Governance
The DSEC has the everyday responsibility for overseeing cybersecurity risks and also presents to the Risk Committee on its cybersecurity risk analysis, the Group’s risk mitigation plan, security objectives, self-evaluation results from various Orange entities, and security KPIs, as well as results from cybersecurity audits conducted by the DSEC.
2023 Form 20-F / ORANGE – 45
The DSEC leads the Committee for Operational Group Security (the “COSG”). The COSG meets regularly to review how Orange’s overall cybersecurity strategy and resilience is implemented within Orange affiliates. The COSG is co-chaired by the Director of the DSEC and the Group’s Chief Technology and Innovation Officer (“CTIO”). The CSOG is comprised of security personnel and other Security executives from Orange’s various business segments.
At the management level, within the Executive Committee, the Risk Committee receives regular reports from the DSEC and then presents a report on cybersecurity risks to the Audit Committee by Group Security Director. For more information on the Risk Committee, see Section 5.2.2.3 Executive Committee and Group governance committees of the 2023 Universal Registration Document filed as Exhibit 15.1 of this document.
Orange’s Board of Directors has overall responsibility for the oversight of risk management, including the oversight of risks from cybersecurity threats. The Board is informed of such risks through the Audit Committee, which receives regular presentations from Group Security Director, including the risk analysis which is conducted by the DSEC and reviewed by the Risk Committee. The Audit Committee regularly evaluates the Group’s risks, including the efficacy of risk monitoring tools, major risks confronting the group, preventative measures taken. The Audit Committee reported this analysis to the Board, which reviewed, proposed improvements, and put in place a calendar to monitor the proposed actions.
Orange’s CTIO has over 25 years of experience in the cybersecurity industry. This experience includes cybersecurity roles of high responsibility at large public companies.
2023 Form 20-F / ORANGE – 46
PART III
ITEM 17 |
Financial statements |
Not applicable.
ITEM 18 |
Financial statements |
The information required in this item is included in pages F-1 to F-143 attached hereto.
ITEM 19 |
List of exhibits |
1. |
|
2.(a)* |
|
2.(c)** |
Indenture dated March 14, 2001 between Orange (formerly France Telecom) and, inter alia, Citibank, NA as Trustee. |
8. |
List of Orange’s subsidiaries: see Note 20 Main consolidated entities to the Consolidated Financial Statements at page F-141 and F-142. |
11. |
|
12.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
12.2 |
|
13.1 |
|
13.2 |
|
15.1 |
|
15.2 |
|
15.3 |
|
97.1 |
|
101.INS |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH |
Inline XBRL Taxonomy Extension Schema |
101.CAL |
Inline XBRL Taxonomy Extension Schema Calculation Linkbase |
101.DEF |
Inline XBRL Taxonomy Extension Schema Definition Linkbase |
101.LAB |
Inline XBRL Taxonomy Extension Schema Label Linkbase |
101.PRE |
Inline XBRL Taxonomy Extension Schema Presentation Linkbase |
104 |
Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101) |
* |
Incorporated by reference to Exhibit 1 to the Registration Statement on Form F-6 filed with the Securities and Exchange Commission on July 27, 2017. (https://www.sec.gov/Archives/edgar/data/1201935/000120193517000005/orangedepnrec.htm) |
** |
Incorporated by reference to Orange’s Annual Report on Form 20-F for the year ended December 31, 2000, as filed with the Securities and Exchange Commission on May 29, 2001. |
2023 Form 20-F / ORANGE – 47
Signature
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
ORANGE
/s/ Laurent Martinez
Name: Laurent Martinez
Title: Group Executive Director, Finance, Performance and Development (Principal Financial Officer)
Issy-les-Moulineaux, France
March 29, 2024
2023 Form 20-F / ORANGE – 48
Table of contents
|
|
Financial statements |
|
F-2 |
|
F-9 |
|
F-10 |
|
F-11 |
|
F-12 |
|
Analysis of changes in shareholders’ equity related to components of the other comprehensive income |
F-13 |
F-14 |
Consolidated financial statements 2023 |
F-1 |
Report of independent registered public accounting firms
Report of Independent Registered Public Accounting Firms
To the Shareholders and Board of Directors of Orange S.A.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Orange S.A. and its subsidiaries (the “Group”) as of December 31, 2023, 2022 and 2021, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively referred to as “the consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2023, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with International Financial Reporting Standards as adopted by the European Union and in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Group’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 27, 2024 expressed an unqualified opinion on the effectiveness of the Group’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Group's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of goodwill impairment for the Enterprise cash generating unit
Description of the matter
As discussed in Note 7 to the consolidated financial statements, the Group has goodwill for a net value of 23,775 million euros as of December 31, 2023. The Group performs impairment analyses with respect to its goodwill at least annually and more frequently when there is an indication of impairment. These tests are performed at the level of each cash generating unit (CGU) or group of CGUs, which generally correspond to the operating segment, or to each country in the Africa and Middle East region and Europe. An impairment loss is recognized if the recoverable amount of the assets and liabilities of the CGU is lower than the carrying value. With the exception of the Belgium-Luxemburg and Romania group of CGUs and CGU, for which the recoverable amounts are determined based on the fair value by reference to on-going transactions, the recoverable amount is determined mostly based upon retaining the value in use. The estimate of value in use is the present value of future expected cash flows.
The assessment of the value in use requires certain management estimates and judgments as described in Notes 2.5.2 and 7 to the consolidated financial statements, including the assessment of the competitive, political, economic and financial environment of the countries where the Group operates, the ability to achieve the operating cash flows from the business plans and the discount rates and perpetuity growth rates used in the calculation of recoverable amounts.
In the context of the current transformation of the Orange Business segment’s business model, whose market is undergoing changes as described in Note 5.3, the determination of the recoverable amount of the Enterprise CGU, included in the Orange Business segment, and the resulting margin between recoverable amount and carrying value tested, are especially sensitive to the following management assumptions:
− | future expected cash flows used for the business plans, specifically, the revenue growth rate and the EBITDAaL margin rate, |
− | discount rate and perpetuity growth rate applied to future expected cash flows. |
We identified the evaluation of the goodwill impairment analysis for the Enterprise CGU as a critical audit matter due to the especially subjective auditor judgment and specialized skills and knowledge necessary to audit these management assumptions.
Consolidated financial statements 2023 |
F-2 |
How we addressed the matter in our audit
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Group’s impairment assessment process for the Enterprise CGU, including controls related to the determination of the recoverable amount and the development of the future expected cash flows, discount rate and perpetuity growth rate assumptions.
To assess the Group’s ability to forecast future expected cash flows, with the assistance of valuation professionals with specialized skills and knowledge, we compared the Group’s previous forecasts to actual results and we compared the business plan used in 2023 impairment tests with previous forecasts. We inquired of financial and operational management of the Group to gain an understanding of the significant assumptions used in the business plan. We assessed the reasonableness of the revenue growth rate and the EBITDAaL margin rate underlying the forecasted cash flows, by comparing them against the Group’s peer companies’ analyst reports and market research reports. We compared the data, including the revenue growth rate and the EBITDAaL margin rate, used in the model by the Group in the determination of recoverable amounts to the business plan submitted to the Board of Directors.
We involved valuation professionals with specialized skills and knowledge, who assisted in (1) evaluating the methodology used to determine the discount rate and the perpetuity growth rate used by comparing those rates against rate ranges that were independently developed using publicly available market data for comparable entities and, (2) assessing the consistency of the discount rate, based on the weighted average cost of capital for the Enterprise CGU, and the reasonableness of the risk-free rate and risk premium used by management by comparing them to publicly available market data. In addition, we tested the sensitivity analyses carried out by the Group and performed our own sensitivity analyses over future expected cash flows, the discount rate and the perpetuity growth rate to assess (1) the impact of changes in those assumptions on the impairment analysis and (2) the adequacy of the information on sensitivity disclosed in Note 7.4 to the consolidated financial statements.
Evaluation of provisions related to the main legal disputes and tax audits in France
Description of the matter
As discussed in Notes 5.2, 5.7, 10.3 and 18 to the consolidated financial statements, the Group is involved in a number of legal proceedings and administrative actions, relating to competition, regulatory and commercial matters in the telecom industry, as well as tax audits, notably with respect to value added tax and operating taxes and levies.
The Group recognizes provisions when it has a present obligation towards a third party arising from a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, which can be quantified or estimated on a reasonable basis.
As discussed in Note 18 to the consolidated financial statements, the Group recognized provisions for risk in respect of its disputes (excluding those presented in Notes 6.2 and 10.3 concerning disputes with social security and tax administrations) for € 283 million as of December 31, 2023. The provisions are primarily related to legal disputes in which the Group is involved in France, of which the most significant disputes are presented individually in Note 18 to the consolidated financial statements under the paragraph headings Mobile Services, Fixed Services and Other proceedings in France (“main legal disputes”).
Consolidated financial statements 2023 |
F-3 |
As discussed in Note 10.3 to the consolidated financial statements, Orange SA is subject to tax audits in France for the years 2017-2018 and 2019-2020 (tax audits), for which the tax adjustments notified to date total approximately € 535 million, including default penalties and interest. Note 10.3 further indicates that the Group makes a best estimate of the risks related to these adjustments, the effects of which are not significant, as assessed by the Group's management.
We identified the evaluation of the provisions relating to the main legal disputes and tax audits in France as a critical audit matter. Evaluating this matter required a higher degree of auditor judgment due to the nature of the estimates and assumptions, including judgments about future events and outcomes of the matters considering the inherent uncertainties as to how they may be resolved.
How we addressed the matter in our audit
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Group’s process to identify financial risks, and, where appropriate, recognize provisions and prepare the related financial statement disclosures, including on risk exposure. This included controls related to the evaluation of provisions based on information provided by the legal and tax departments and the Group’s external legal counsel. We inquired of the Group’s legal and tax departments and the Secretary General of the Group and analyzed available information, including the minutes of court hearings, to evaluate the assumptions used for determining the provisions for the main legal disputes and tax audits. We analyzed the responses received from the Group’s external counsel setting forth their views relating to these disputes, including their likely financial consequences. We assessed whether relevant events were considered in the recognition of the provisions, as well as in the financial statement disclosures. We compared historical provision estimates to actual settlements. We involved tax professionals with specialized skills and knowledge who assisted in evaluating management's assessment of the risk related to the tax audits in France. In addition, we assessed the adequacy of the information disclosed in the consolidated financial statements related to the main legal disputes and tax audits in France.
Paris-La Défense, France
March 27, 2024
/s/ KPMG S.A. Represented by Jacques Yves PIERRE We have served as the Group‘s auditor since 2015 |
/s/ Deloitte & Associés We have served as the Group‘s auditor since 2021 |
Consolidated financial statements 2023 |
F-4 |
CONSOLIDATED FINANCIAL
STATEMENTS
Year ended December 31, 2023
Consolidated financial statements 2023 |
F-5 |
|
|
|
Notes to the Consolidated Financial Statements |
|
|
F-16 |
||
F-16 |
||
F-17 |
||
F-19 |
||
F-21 |
||
F-23 |
||
F-25 |
||
F-27 |
||
F-29 |
||
Simplified statement of cash flows on telecommunication and Mobile Financial Services activities |
F-31 |
|
F-34 |
||
Description of business and basis of preparation of the Consolidated Financial Statements |
F-35 |
|
F-35 |
||
F-36 |
||
New standards and interpretations applied from January 1, 2023 |
F-36 |
|
Standards and interpretations compulsory after December 31, 2023 with no early adoption |
F-37 |
|
F-38 |
||
Gains and losses on disposal and main changes in scope of consolidation |
F-40 |
|
Gains (losses) on disposal of fixed assets, investments and activities |
F-40 |
|
F-40 |
||
F-47 |
||
F-47 |
||
F-49 |
||
F-49 |
||
F-51 |
||
F-53 |
||
F-54 |
||
F-54 |
||
F-55 |
||
F-56 |
||
F-57 |
||
F-57 |
||
F-58 |
||
F-58 |
||
F-59 |
||
F-59 |
||
F-59 |
||
F-64 |
||
F-67 |
||
F-68 |
||
F-68 |
||
F-69 |
||
F-70 |
||
F-71 |
Consolidated financial statements 2023 |
F-6 |
F-74 |
||
F-74 |
||
F-74 |
||
F-75 |
||
F-76 |
||
F-79 |
||
F-80 |
||
F-81 |
||
F-81 |
||
F-82 |
||
F-83 |
||
F-84 |
||
F-84 |
||
F-86 |
||
F-90 |
||
F-90 |
||
F-92 |
||
F-92 |
||
F-93 |
||
Contractual commitments on interests in associates and joint ventures |
F-93 |
|
F-93 |
||
Financial assets, liabilities and financial results (telecom activities) |
F-94 |
|
F-94 |
||
Profits and losses related to financial assets and liabilities |
F-96 |
|
F-97 |
||
F-100 |
||
F-101 |
||
Loans from development organizations and multilateral lending institutions |
F-103 |
|
F-104 |
||
F-105 |
||
Information on market risk and fair value of financial assets and liabilities (telecom activities) |
F-108 |
|
F-108 |
||
F-109 |
||
F-110 |
||
F-112 |
||
F-112 |
||
F-113 |
||
F-114 |
||
F-114 |
||
F-115 |
||
F-117 |
||
F-117 |
||
F-118 |
||
F-118 |
||
F-119 |
||
F-122 |
||
F-123 |
||
F-124 |
||
F-125 |
||
F-125 |
||
F-128 |
||
F-130 |
||
F-130 |
||
Financial assets and liabilities of Mobile Financial Services |
F-130 |
|
Information on market risk management with respect to Orange Bank activities |
F-134 |
|
F-139 |
||
F-139 |
||
F-141 |
||
F-141 |
||
F-143 |
The accompanying notes form an integral part of the Consolidated Financial Statements. The accounting policies are set out in the shaded areas of each note.
Consolidated financial statements 2023 |
F-7 |
Significant events 2023
Takeover of |
|
French pension reform |
|
Restructuring programs |
|||
Following the approval of the European Commission, Orange Belgium has finalized on June 2nd, 2023, the acquisition of 75% of the capital minus one share of VOO for 1,369 million euros from Nethys. The Group has granted Nethys a put option on its remaining stake, exercisable for three years. |
|
In France, the pension reform enacted on April 14, 2023 led to the recognition of an additional provision of 241 million euros in respect of the French part-time for seniors plans (Temps Partiel Senior – TPS), which provided for the extension of measures for employees affected by the reform, and to the recognition of a provision reversal of 22 million euros for post-employment benefits. |
|
In 2023, the Group launched transformation programs in France and abroad. These programs notably involve the implementation of departure plans for Orange Business and Orange Bank activities, for which discussions with employee representative bodies in France are in progress at December 31, 2023. In view of the progress of discussions, costs and provisions were recognized for a total of (215) million euros at December 31, 2023 for the Orange Business restructuring program in France and abroad and (122) million euros for the Orange Bank plan. |
|||
Note 3.2 |
|
Note 6 |
|
Note 5.3 |
Consolidated Financial Statements 2023 |
F-8 |
Consolidated income statement
(in millions of euros, except for per share data) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
Revenue |
|
4.1 |
|
44,122 |
|
43,471 |
|
42,522 |
External purchases |
|
5.1 |
|
(19,322) |
|
(18,732) |
|
(17,973) |
Other operating income |
|
4.2 |
|
894 |
|
747 |
|
783 |
Other operating expenses |
|
5.2 |
|
(452) |
|
(413) |
|
(700) |
Labor expenses |
|
6.1 |
|
(9,018) |
|
(8,920) |
|
(9,917) |
Operating taxes and levies |
|
10.1.1 |
|
(1,794) |
|
(1,882) |
|
(1,926) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
3.1 |
|
90 |
|
233 |
|
2,507 |
Restructuring costs |
|
5.3 |
|
(456) |
|
(125) |
|
(331) |
Depreciation and amortization of fixed assets |
|
8.2 |
|
(7,312) |
|
(7,035) |
|
(7,074) |
Depreciation and amortization of financed assets |
|
8.5 |
|
(129) |
|
(107) |
|
(84) |
Depreciation and amortization of right-of-use assets |
|
9.1 |
|
(1,522) |
|
(1,507) |
|
(1,481) |
Effects resulting from business combinations |
|
|
|
11 |
|
— |
|
— |
Impairment of goodwill |
|
7.1 |
|
— |
|
(817) |
|
(3,702) |
Impairment of fixed assets |
|
8.3 |
|
(47) |
|
(56) |
|
(17) |
Impairment of right-of-use assets |
|
9.1 |
|
(69) |
|
(54) |
|
(91) |
Share of profits (losses) of associates and joint ventures |
|
11.1 |
|
(29) |
|
(2) |
|
3 |
Operating income |
|
|
|
4,969 |
|
4,801 |
|
2,521 |
Cost of gross financial debt excluding financed assets |
|
|
|
(1,073) |
|
(775) |
|
(829) |
Interests on debts related to financed assets |
|
|
|
(14) |
|
(3) |
|
(1) |
Gains (losses) on assets contributing to net financial debt |
|
|
|
283 |
|
48 |
|
(3) |
Foreign exchange gain (loss) |
|
|
|
(32) |
|
(97) |
|
65 |
Interests on lease liabilities |
|
|
|
(258) |
|
(145) |
|
(120) |
Other net financial expenses |
|
|
|
(112) |
|
52 |
|
106 |
Finance costs, net |
|
13.2 |
|
(1,206) |
|
(920) |
|
(782) |
Income taxes |
|
10.2.1 |
|
(871) |
|
(1,265) |
|
(962) |
Consolidated net income |
|
|
|
2,892 |
|
2,617 |
|
778 |
Net income attributable to owners of the parent company |
|
|
|
2,440 |
|
2,146 |
|
233 |
Non-controlling interests |
|
15.6 |
|
451 |
|
471 |
|
545 |
|
|
|
|
|
|
|
|
|
Earnings per share (in euros) attributable to parent company |
|
15.7 |
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
– basic |
|
|
|
0.85 |
|
0.73 |
|
0.00 |
– diluted |
|
|
|
0.85 |
|
0.73 |
|
0.00 |
Consolidated Financial Statements 2023 |
F-9 |
Consolidated statement of comprehensive income
(in millions of euros) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
|
Consolidated net income |
|
|
|
2,892 |
|
2,617 |
|
778 |
|
Remeasurements of the net defined benefit liability |
|
6.2 |
|
(96) |
|
176 |
|
59 |
|
Assets at fair value |
|
13.7-17.1 |
|
3 |
|
(116) |
|
9 |
|
Income tax relating to items that will not be reclassified |
|
10.2.2 |
|
20 |
|
(47) |
|
(14) |
|
Share of other comprehensive income in associates and joint ventures that will not be reclassified |
|
|
|
14 |
|
0 |
|
(4) |
|
Items that will not be reclassified to profit or loss (a) |
|
|
|
(59) |
|
13 |
|
51 |
|
Assets at fair value |
|
13.7-17.1 |
|
2 |
|
4 |
|
1 |
|
Cash flow hedges |
|
13.8.2 |
|
(269) |
|
295 |
|
317 |
|
Translation adjustment gains and losses |
|
15.5 |
|
(28) |
|
(374) |
|
200 |
|
Income tax relating to items that are or may be reclassified |
|
10.2.2 |
|
66 |
|
(70) |
|
(84) |
|
Share of other comprehensive income in associates and joint ventures that are or may be reclassified |
|
|
|
(26) |
|
51 |
|
5 |
|
Items that are or may be reclassified subsequently to profit or loss (b) |
|
|
|
(255) |
|
(93) |
|
439 |
|
Other consolidated comprehensive income (a) + (b) |
|
|
|
(314) |
|
(80) |
|
490 |
|
Consolidated comprehensive income |
|
|
|
2,578 |
|
2,537 |
|
1,267 |
|
Comprehensive income attributable to the owners of the parent company |
|
|
|
2,108 |
|
2,050 |
|
687 |
|
Comprehensive income attributable to non-controlling interests |
|
|
|
470 |
|
487 |
|
580 |
|
Consolidated Financial Statements 2023 |
F-10 |
Consolidated statement of financial position
(in millions of euros) |
|
Note |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
|
|
2023 |
|
2022 |
|
2021 |
|
Assets |
|
|
|
|
|
|
|
|
|
Goodwill |
|
7.2 |
|
23,775 |
|
23,113 |
|
24,192 |
|
Other intangible assets |
|
8.4 |
|
15,098 |
|
14,946 |
|
14,940 |
|
Property, plant and equipment |
|
8.5 |
|
33,193 |
|
31,640 |
|
30,484 |
|
Right-of-use assets |
|
9.1 |
|
8,175 |
|
7,936 |
|
7,702 |
|
Interests in associates and joint ventures |
|
11 |
|
1,491 |
|
1,486 |
|
1,440 |
|
Non-current financial assets related to Mobile Financial Services activities |
|
17.1 |
|
297 |
|
656 |
|
900 |
|
Non-current financial assets |
|
13.1 |
|
1,036 |
|
977 |
|
950 |
|
Non-current derivatives assets |
|
13.1 |
|
956 |
|
1,458 |
|
683 |
|
Other non-current assets |
|
4.5 |
|
192 |
|
216 |
|
254 |
|
Deferred tax assets |
|
10.2.3 |
|
598 |
|
421 |
|
692 |
|
Total non-current assets |
|
|
|
84,811 |
|
82,847 |
|
82,236 |
|
Inventories |
|
5.4 |
|
1,152 |
|
1,048 |
|
952 |
|
Trade receivables |
|
4.3 |
|
6,013 |
|
6,305 |
|
6,029 |
|
Other customer contract assets |
|
4.4 |
|
1,795 |
|
1,570 |
|
1,460 |
|
Current financial assets related to Mobile Financial Services activities |
|
17.1 |
|
3,184 |
|
2,742 |
|
2,381 |
|
Current financial assets |
|
13.1 |
|
2,713 |
|
4,541 |
|
2,313 |
|
Current derivatives assets |
|
13.1 |
|
37 |
|
112 |
|
7 |
|
Other current assets |
|
4.5 |
|
2,388 |
|
2,217 |
|
1,875 |
|
Operating taxes and levies receivables |
|
10.1.2 |
|
1,233 |
|
1,265 |
|
1,163 |
|
Current taxes assets |
|
10.2.3 |
|
240 |
|
149 |
|
181 |
|
Prepaid expenses |
|
5.5 |
|
868 |
|
851 |
|
851 |
|
Cash and cash equivalents |
|
13.1 |
|
5,618 |
|
6,004 |
|
8,621 |
|
Total current assets |
|
|
|
25,241 |
|
26,803 |
|
25,834 |
|
Total assets |
|
|
|
110,052 |
|
109,650 |
|
108,071 |
|
Equity and liabilities |
|
|
|
|
|
|
|
|
|
Share capital |
|
|
|
10,640 |
|
10,640 |
|
10,640 |
|
Share premiums and statutory reserve |
|
|
|
16,859 |
|
16,859 |
|
16,859 |
|
Subordinated notes |
|
|
|
4,950 |
|
4,950 |
|
5,497 |
|
Retained earnings |
|
|
|
(625) |
|
(666) |
|
(656) |
|
Equity attributable to the owners of the parent company |
|
|
|
31,825 |
|
31,784 |
|
32,341 |
|
Non-controlling interests |
|
|
|
3,274 |
|
3,172 |
|
3,020 |
|
Total equity |
|
15 |
|
35,098 |
|
34,956 |
|
35,361 |
|
Non-current financial liabilities |
|
13.1 |
|
30,535 |
|
31,930 |
|
31,922 |
|
Non-current derivatives liabilities |
|
13.1 |
|
225 |
|
397 |
|
220 |
|
Non-current lease liabilities |
|
9.2 |
|
7,099 |
|
6,901 |
|
6,696 |
|
Non-current fixed assets payables |
|
8.6 |
|
1,608 |
|
1,480 |
|
1,370 |
|
Non-current financial liabilities related to Mobile Financial Services activities |
|
17.1 |
|
73 |
|
82 |
|
0 |
|
Non-current employee benefits |
|
6.2 |
|
2,551 |
|
2,567 |
|
2,798 |
|
Non-current dismantling provisions |
|
8.7 |
|
698 |
|
670 |
|
876 |
|
Non-current restructuring provisions |
|
5.3 |
|
196 |
|
43 |
|
61 |
|
Other non-current liabilities |
|
5.7 |
|
299 |
|
276 |
|
306 |
|
Deferred tax liabilities |
|
10.2.3 |
|
1,143 |
|
1,124 |
|
1,185 |
|
Total non-current liabilities |
|
|
|
44,427 |
|
45,471 |
|
45,434 |
|
Current financial liabilities |
|
13.1 |
|
5,451 |
|
4,702 |
|
3,421 |
|
Current derivatives liabilities |
|
13.1 |
|
40 |
|
51 |
|
124 |
|
Current lease liabilities |
|
9.2 |
|
1,469 |
|
1,509 |
|
1,369 |
|
Current fixed assets payables |
|
8.6 |
|
2,926 |
|
3,101 |
|
3,111 |
|
Trade payables |
|
5.6 |
|
7,042 |
|
7,067 |
|
6,738 |
|
Customer contract liabilities |
|
4.4 |
|
2,717 |
|
2,579 |
|
2,512 |
|
Current financial liabilities related to Mobile Financial Services activities |
|
17.1 |
|
3,073 |
|
3,034 |
|
3,161 |
|
Current employee benefits |
|
6.2 |
|
2,632 |
|
2,418 |
|
2,316 |
|
Current dismantling provisions |
|
8.7 |
|
40 |
|
26 |
|
21 |
|
Current restructuring provisions |
|
5.3 |
|
281 |
|
119 |
|
124 |
|
Other current liabilities |
|
5.7 |
|
2,779 |
|
2,526 |
|
2,338 |
|
Operating taxes and levies payables |
|
10.1.2 |
|
1,483 |
|
1,405 |
|
1,436 |
|
Current taxes payables |
|
10.2.3 |
|
460 |
|
538 |
|
425 |
|
Deferred income |
|
|
|
135 |
|
149 |
|
180 |
|
Total current liabilities |
|
|
|
30,526 |
|
29,223 |
|
27,276 |
|
Total equity and liabilities |
|
|
|
110,052 |
|
109,650 |
|
108,071 |
|
Consolidated Financial Statements 2023 |
F-11 |
Consolidated statement of changes in shareholders’ equity
(in millions of euros) |
|
|
|
Attributable to owners of the parent company |
|
Attributable to non-controlling interests |
|
Total |
|
||||||||||||||||
|
|
|
|
Number of |
|
Share |
|
Share |
|
Subor- |
|
Reserves |
|
Other |
|
Total |
|
Reserves |
|
Other |
|
Total |
|
equity |
|
|
|
|
|
issued shares |
|
capital |
|
premiums |
|
dinated |
|
|
|
compre- |
|
|
|
|
|
compre- |
|
|
|
|
|
|
|
|
|
|
|
|
|
and |
|
notes |
|
|
|
hensive |
|
|
|
|
|
hensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
statutory |
|
|
|
|
|
income |
|
|
|
|
|
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2021 |
|
|
|
2,660,056,599 |
|
10,640 |
|
16,859 |
|
5,803 |
|
1,966 |
|
(711) |
|
34,557 |
|
2,484 |
|
159 |
|
2,643 |
|
37,200 |
|
Consolidated comprehensive income |
|
|
|
— |
|
— |
|
— |
|
— |
|
233 |
|
454 |
|
687 |
|
545 |
|
36 |
|
580 |
|
1,267 |
|
Share-based compensation |
|
6.3 |
|
— |
|
— |
|
— |
|
— |
|
165 |
|
— |
|
165 |
|
6 |
|
— |
|
6 |
|
171 |
|
Purchase of treasury shares |
|
15.2 |
|
— |
|
— |
|
— |
|
— |
|
(179) |
|
— |
|
(179) |
|
— |
|
— |
|
— |
|
(179) |
|
Dividends |
|
15.3 |
|
— |
|
— |
|
— |
|
— |
|
(2,127) |
|
— |
|
(2,127) |
|
(218) |
|
— |
|
(218) |
|
(2,345) |
|
Issues and purchases of subordinated notes |
|
15.4 |
|
— |
|
— |
|
— |
|
(306) |
|
(6) |
|
— |
|
(311) |
|
— |
|
— |
|
— |
|
(311) |
|
Subordinated notes remuneration |
|
15.4 |
|
— |
|
— |
|
— |
|
— |
|
(238) |
|
— |
|
(238) |
|
— |
|
— |
|
— |
|
(238) |
|
Changes in ownership interests with no gain/loss of control |
|
3.2 |
|
— |
|
— |
|
— |
|
— |
|
(185) |
|
— |
|
(185) |
|
(213) |
|
— |
|
(213) |
|
(398) |
|
Changes in ownership interests with gain/loss of control(1) |
|
3.2 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
249 |
|
— |
|
249 |
|
249 |
|
Other movements |
|
|
|
— |
|
— |
|
— |
|
— |
|
(28) |
|
— |
|
(28) |
|
(28) |
|
— |
|
(28) |
|
(55) |
|
Balance as of December 31, 2021 |
|
|
|
2,660,056,599 |
|
10,640 |
|
16,859 |
|
5,497 |
|
(399) |
|
(257) |
|
32,341 |
|
2,825 |
|
195 |
|
3,020 |
|
35,361 |
|
Consolidated comprehensive income |
|
|
|
— |
|
— |
|
— |
|
— |
|
2,146 |
|
(96) |
|
2,050 |
|
471 |
|
16 |
|
487 |
|
2,537 |
|
Share-based compensation |
|
6.3 |
|
— |
|
— |
|
— |
|
— |
|
11 |
|
— |
|
11 |
|
3 |
|
— |
|
3 |
|
14 |
|
Purchase of treasury shares |
|
15.2 |
|
— |
|
— |
|
— |
|
— |
|
(7) |
|
— |
|
(7) |
|
— |
|
— |
|
— |
|
(7) |
|
Dividends |
|
15.3 |
|
— |
|
— |
|
— |
|
— |
|
(1,861) |
|
— |
|
(1,861) |
|
(328) |
|
— |
|
(328) |
|
(2,189) |
|
Issues and purchases of subordinated notes |
|
15.4 |
|
— |
|
— |
|
— |
|
(547) |
|
51 |
|
— |
|
(496) |
|
— |
|
— |
|
— |
|
(496) |
|
Subordinated notes remuneration |
|
15.4 |
|
— |
|
— |
|
— |
|
— |
|
(215) |
|
— |
|
(215) |
|
— |
|
— |
|
— |
|
(215) |
|
Changes in ownership interests with no gain/loss of control |
|
3.2 |
|
— |
|
— |
|
— |
|
— |
|
(10) |
|
— |
|
(10) |
|
— |
|
— |
|
— |
|
(10) |
|
Changes in ownership interests with gain/loss of control |
|
3.2 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Other movements |
|
|
|
— |
|
— |
|
— |
|
— |
|
(29) |
|
— |
|
(29) |
|
(10) |
|
— |
|
(10) |
|
(39) |
|
Balance as of December 31, 2022 |
|
|
|
2,660,056,599 |
|
10,640 |
|
16,859 |
|
4,950 |
|
(313) |
|
(353) |
|
31,784 |
|
2,960 |
|
211 |
|
3,172 |
|
34,956 |
|
Consolidated comprehensive income |
|
|
|
— |
|
— |
|
— |
|
— |
|
2,440 |
|
(332) |
|
2,108 |
|
451 |
|
19 |
|
470 |
|
2,578 |
|
Share-based compensation |
|
6.3 |
|
— |
|
— |
|
— |
|
— |
|
13 |
|
— |
|
13 |
|
3 |
|
— |
|
3 |
|
16 |
|
Purchase of treasury shares |
|
15.2 |
|
— |
|
— |
|
— |
|
— |
|
(15) |
|
— |
|
(15) |
|
— |
|
— |
|
— |
|
(15) |
|
Dividends |
|
15.3 |
|
— |
|
— |
|
— |
|
— |
|
(1,862) |
|
— |
|
(1,862) |
|
(381) |
|
— |
|
(381) |
|
(2,242) |
|
Issues and purchases of subordinated notes |
|
15.4 |
|
— |
|
— |
|
— |
|
— |
|
(22) |
|
— |
|
(22) |
|
— |
|
— |
|
— |
|
(22) |
|
Subordinated notes remuneration |
|
15.4 |
|
— |
|
— |
|
— |
|
— |
|
(185) |
|
— |
|
(185) |
|
— |
|
— |
|
— |
|
(185) |
|
Changes in ownership interests with no gain/loss of control |
|
3.2 |
|
— |
|
— |
|
— |
|
— |
|
(6) |
|
— |
|
(6) |
|
(2) |
|
— |
|
(2) |
|
(8) |
|
Changes in ownership interests with gain/loss of control(2) |
|
3.2 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
0 |
|
Other movements |
|
|
|
— |
|
— |
|
— |
|
— |
|
10 |
|
— |
|
10 |
|
11 |
|
— |
|
11 |
|
21 |
|
Balance as of December 31, 2023 |
|
|
|
2,660,056,599 |
|
10,640 |
|
16,859 |
|
4,950 |
|
61 |
|
(686) |
|
31,825 |
|
3,043 |
|
230 |
|
3,274 |
|
35,098 |
|
(1) | Related to the takeover of Telekom Romania Communications (see Note 3.2). |
(2) | Includes the fair value of the minority interests in VOO’s equity at the acquisition date, offset by the effect of the initial recognition of the financial liability related to the put option granted to Nethys by Orange (see Note 3.2). |
Consolidated Financial Statements 2023 |
F-12 |
Analysis of changes in shareholders’ equity related to components of the other comprehensive income
(in millions of euros) |
|
Attributable to owners of the parent company |
|
Attributable to non-controlling interests |
|
Total |
||||||||||||||||||||||||
|
|
Assets at |
|
Hedging |
|
Translation |
|
Actuarial |
|
Deferred |
|
Other |
|
Total |
|
Assets at |
|
Hedging |
|
Translation |
|
Actuarial |
|
Deferred |
|
Other |
|
Total |
|
other |
|
|
fair value |
|
instruments |
|
adjustment |
|
gains |
|
tax |
|
compre- |
|
|
|
fair value |
|
instruments |
|
adjustment |
|
gains |
|
tax |
|
compre- |
|
|
|
compre- |
|
|
|
|
|
|
|
|
and |
|
|
|
hensive |
|
|
|
|
|
|
|
|
|
and |
|
|
|
hensive |
|
|
|
hensive |
|
|
|
|
|
|
|
|
losses |
|
|
|
income |
|
|
|
|
|
|
|
|
|
losses |
|
|
|
income |
|
|
|
income |
|
|
|
|
|
|
|
|
|
|
|
|
of associates |
|
|
|
|
|
|
|
|
|
|
|
|
|
of associates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and joint |
|
|
|
|
|
|
|
|
|
|
|
|
|
and joint |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2021 |
|
68 |
|
(98) |
|
(256) |
|
(579) |
|
195 |
|
(40) |
|
(711) |
|
(3) |
|
(2) |
|
171 |
|
(8) |
|
— |
|
— |
|
159 |
|
(552) |
Variation(1) |
|
11 |
|
318 |
|
160 |
|
63 |
|
(98) |
|
1 |
|
454 |
|
— |
|
(1) |
|
40 |
|
(4) |
|
— |
|
— |
|
36 |
|
490 |
Balance as of December 31, 2021 |
|
78 |
|
220 |
|
(96) |
|
(516) |
|
97 |
|
(39) |
|
(257) |
|
(3) |
|
(3) |
|
212 |
|
(11) |
|
1 |
|
— |
|
195 |
|
(62) |
Variation(1) |
|
(111) |
|
267 |
|
(360) |
|
179 |
|
(112) |
|
42 |
|
(96) |
|
— |
|
28 |
|
(14) |
|
(3) |
|
(4) |
|
9 |
|
16 |
|
(80) |
Balance as of December 31, 2022 |
|
(33) |
|
487 |
|
(455) |
|
(337) |
|
(16) |
|
3 |
|
(353) |
|
(4) |
|
25 |
|
198 |
|
(14) |
|
(4) |
|
9 |
|
211 |
|
(142) |
Variation(1) |
|
5 |
|
(254) |
|
(71) |
|
(89) |
|
81 |
|
(6) |
|
(332) |
|
— |
|
(15) |
|
43 |
|
(7) |
|
4 |
|
(6) |
|
19 |
|
(314) |
Balance as of December 31, 2023 |
|
(28) |
|
233 |
|
(526) |
|
(426) |
|
65 |
|
(3) |
|
(686) |
|
(4) |
|
10 |
|
240 |
|
(21) |
|
1 |
|
3 |
|
230 |
|
(456) |
(1) | Including in 2023 a variation of (269) million euros related to hedging instruments (of which (236) million euros of hedging in American dollar and pound sterling held by Orange SA), an actuarial loss of (80) million euros mainly related to the decrease in discount rates and translation adjustments of (28) million euros mainly due to the depreciation of the Egyptian pound. |
Including in 2022 a variation of 295 million euros related to hedging instruments (of which 187 million euros of hedging in American dollar and pound sterling held by Orange SA), an actuarial gain of 176 million euros mainly related to the increase in discount rates and translation adjustments of (374) million euros mainly due to the depreciation of the Egyptian pound.
Including in 2021 a variation of 317 million euros related to hedging instruments (of which 319 million euros of hedging in American dollar and pound sterling held by Orange SA) and a variation of 200 million euros related to translation adjustments (impact spread on multiple currencies).
Associates and joint ventures: entities accounted for using the equity method; amount before currency translation adjustments.
Consolidated Financial Statements 2023 |
F-13 |
Consolidated statement of cash flows
(in millions of euros) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
|
Operating activities |
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
|
2,892 |
|
2,617 |
|
778 |
|
Non-monetary items and reclassified items for presentation |
|
|
|
12,971 |
|
13,298 |
|
14,592 |
|
Operating taxes and levies |
|
10.1.1 |
|
1,794 |
|
1,882 |
|
1,926 |
|
Gains (losses) on disposal of fixed assets, investments and activities |
|
3.1 |
|
(90) |
|
(233) |
|
(2,507) |
|
Other gains and losses |
|
|
|
(44) |
|
(22) |
|
(28) |
|
Depreciation and amortization of fixed assets |
|
8.2 |
|
7,312 |
|
7,035 |
|
7,074 |
|
Depreciation and amortization of financed assets |
|
8.5 |
|
129 |
|
107 |
|
84 |
|
Depreciation and amortization of right-of-use assets |
|
9.1 |
|
1,522 |
|
1,507 |
|
1,481 |
|
Changes in provisions |
|
4-5-6-8 |
|
117 |
|
(133) |
|
803 |
|
Effects resulting from business combinations |
|
|
|
(11) |
|
— |
|
— |
|
Impairment of goodwill |
|
7.1 |
|
— |
|
817 |
|
3,702 |
|
Impairment of fixed assets |
|
8.3 |
|
47 |
|
56 |
|
17 |
|
Impairment of right-of-use assets |
|
9.1 |
|
69 |
|
54 |
|
91 |
|
Share of profits (losses) of associates and joint ventures |
|
11 |
|
29 |
|
2 |
|
(3) |
|
Operational net foreign exchange and derivatives |
|
|
|
5 |
|
28 |
|
30 |
|
Finance costs, net |
|
13.2 |
|
1,206 |
|
920 |
|
782 |
|
Income tax |
|
10.2.1 |
|
871 |
|
1,265 |
|
962 |
|
Share-based compensation |
|
|
|
16 |
|
14 |
|
179 |
|
Changes in working capital and operating banking activities(1) |
|
|
|
(8) |
|
(792) |
|
(177) |
|
Decrease (increase) in inventories, gross |
|
|
|
(84) |
|
(108) |
|
(126) |
|
Decrease (increase) in trade receivables, gross |
|
|
|
441 |
|
(289) |
|
64 |
|
Increase (decrease) in trade payables |
|
|
|
(100) |
|
297 |
|
36 |
|
Changes in other customer contract assets and liabilities |
|
|
|
(103) |
|
(26) |
|
140 |
|
Changes in other assets and liabilities (2) |
|
|
|
(163) |
|
(666) |
|
(292) |
|
Other net cash out |
|
|
|
(3,801) |
|
(3,888) |
|
(3,956) |
|
Operating taxes and levies paid |
|
|
|
(1,680) |
|
(1,906) |
|
(1,880) |
|
Dividends received |
|
|
|
44 |
|
13 |
|
12 |
|
Interest paid and interest rates effects on derivatives, net (3) |
|
|
|
(1,035) |
|
(963) |
|
(1,134) |
|
Income tax paid |
|
|
|
(1,129) |
|
(1,033) |
|
(954) |
|
Net cash provided by operating activities (a) |
|
|
|
12,054 |
|
11,235 |
|
11,236 |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Purchases and sales of property, plant and equipment and intangible assets |
|
|
|
(7,630) |
|
(8,282) |
|
(8,580) |
|
Purchases of property, plant and equipment and intangible assets (4) |
|
8.4-8.5 |
|
(7,829) |
|
(8,777) |
|
(8,749) |
|
Increase (decrease) in fixed assets payables |
|
|
|
(133) |
|
170 |
|
(72) |
|
Investing donations received in advance |
|
|
|
16 |
|
1 |
|
24 |
|
Sales of property, plant and equipment and intangible assets |
|
|
|
316 |
|
324 |
|
217 |
|
Cash paid for investment securities, net of cash acquired |
|
3.2 |
|
(1,416) |
|
(58) |
|
(211) |
|
VOO |
|
|
|
(1,373) |
|
— |
|
— |
|
Telekom Romania Communications |
|
|
|
— |
|
11 |
|
(206) |
|
Other |
|
|
|
(43) |
|
(68) |
|
(5) |
|
Investments in associates and joint ventures |
|
|
|
(38) |
|
(10) |
|
(3) |
|
Purchases of investment securities measured at fair value |
|
|
|
(46) |
|
(34) |
|
(76) |
|
Proceeds from sales of investment securities, net of cash transferred |
|
3.2 |
|
34 |
|
12 |
|
891 |
|
Swiatłowod Inwestycje Sp. z o.o (FiberCo in Poland) |
|
|
|
25 |
|
18 |
|
132 |
|
Orange Concessions |
|
|
|
— |
|
(8) |
|
758 |
|
Other |
|
|
|
9 |
|
2 |
|
— |
|
Other proceeds from sales of investment securities at fair value |
|
|
|
3 |
|
5 |
|
95 |
|
Decrease (increase) in securities and other financial assets |
|
|
|
2,085 |
|
(2,081) |
|
1,908 |
|
Investments at fair value, excluding cash equivalents |
|
|
|
1,831 |
|
(2,256) |
|
936 |
|
Other(5) |
|
|
|
254 |
|
175 |
|
972 |
|
Net cash used in investing activities (b) |
|
|
|
(7,008) |
|
(10,448) |
|
(5,976) |
|
Consolidated Financial Statements 2023 |
F-14 |
(in millions of euros) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
Financing activities |
|
|
|
|
|
|
|
|
Medium and long-term debt issuances |
|
13.5-13.6 |
|
1,442 |
|
1,809 |
|
2,523 |
Medium and long-term debt redemptions and repayments |
|
13.5-13.6 |
|
(2,595) |
|
(1,088) |
|
(4,572) |
Increase (decrease) of bank overdrafts and short-term borrowings |
|
|
|
56 |
|
(400) |
|
1,143 |
Decrease (increase) of cash collateral deposits |
|
|
|
(466) |
|
771 |
|
988 |
Exchange rates effects on derivatives, net |
|
|
|
5 |
|
(91) |
|
201 |
Repayments of lease liabilities |
|
9.2 |
|
(1,657) |
|
(1,519) |
|
(1,625) |
Subordinated notes issuances (purchases) and other related fees |
|
15.4 |
|
177 |
|
(451) |
|
(311) |
Coupon on subordinated notes |
|
15.4 |
|
(177) |
|
(213) |
|
(238) |
Proceeds (purchases) treasury shares |
|
15.2 |
|
(15) |
|
14 |
|
(199) |
o/w employee share offering (Orange Together 2021) |
|
6.3 |
|
— |
|
20 |
|
(188) |
Capital increase (decrease) - non-controlling interests |
|
|
|
2 |
|
— |
|
5 |
Changes in ownership interests with no gain / loss of control |
|
3.2 |
|
(9) |
|
(11) |
|
(403) |
Dividends paid to owners of the parent company |
|
15.3 |
|
(1,862) |
|
(1,861) |
|
(2,127) |
Dividends paid to non-controlling interests |
|
15.6 |
|
(368) |
|
(304) |
|
(218) |
Net cash used in financing activities (c) |
|
|
|
(5,465) |
|
(3,343) |
|
(4,834) |
Cash change in cash and cash equivalents (a) + (b) + (c) |
|
|
|
(419) |
|
(2,556) |
|
427 |
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
Cash and cash equivalents in the opening balance |
|
|
|
6,004 |
|
8,621 |
|
8,145 |
Cash change in cash and cash equivalents |
|
|
|
(419) |
|
(2,556) |
|
427 |
Non-cash change in cash and cash equivalents(6) |
|
|
|
32 |
|
(61) |
|
50 |
Cash and cash equivalents in the closing balance |
|
|
|
5,618 |
|
6,004 |
|
8,621 |
(1) | Operating banking activities mainly include transactions with customers and credit institutions. They are presented in changes in other assets and liabilities. |
(2) | Excluding operating tax receivables and payables. |
(3) | Including interests paid on lease liabilities for (247) million euros in 2023, (141) million euros in 2022 and (120) million euros in 2021 and interests paid on debt related to financed assets for (14) million euros in 2023, (3) million euros in 2022 and (1) million euros in 2021. |
(4) | Acquisitions of financed assets for 233 million euros in 2023, 229 million euros in 2022 and 40 million euros in 2021 have no effect on the net cash used in investing activities. |
(5) | Includes the reimbursement in 2021 of loans granted to Orange Concessions and its subsidiaries for approximately 663 million euros, of which 620 million euros reimbursed by Orange Concessions and 43 million euros by the HIN consortium (see Note 3.2). |
(6) | Of which effect of exchange rates changes and other non-monetary effects. |
Consolidated Financial Statements 2023 |
F-15 |
Note 1 Segment information
1.1Basis of preparation of segment information
Changes in segment information
The Orange group has announced its intention to transform its business model in the Enterprise business segment and to strengthen its position in cybersecurity. In line with these announcements, the Enterprise segment is changing its name to Orange Business.
The segment information presented herein takes into account the following changes in organization and scope:
− | In 2023, the Other European countries segment includes the contribution of VOO from June 2, 2023 (see Note 3.2); |
− | Since January 1, 2022, Totem’s figures have been presented in a distinct operating segment. In 2021, these figures were included in the France, Spain and International Carriers & Shared Services segments; |
− | In 2021, the Other European countries segment included the contribution of Telekom Romania Communications from September 30, 2021 (see Note 3.2). |
Definition of Group operating performance indicators
The key operating performance indicators used by the Group are described in Note 1.10.
The description of different sources of revenue is presented in Note 4.1.
Consolidated Financial Statements 2023 |
F-16 |
1.2 Segment revenue
(in millions of euros) |
|
France |
|
Europe |
||||
|
|
|
|
Spain |
|
Other |
|
Eliminations |
|
|
|
|
|
|
European |
|
Europe |
|
|
|
|
|
|
countries |
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
Revenue |
|
17,730 |
|
4,698 |
|
6,889 |
|
(12) |
Convergence services |
|
5,065 |
|
1,894 |
|
1,194 |
|
— |
Mobile services only |
|
2,364 |
|
782 |
|
2,150 |
|
— |
Fixed services only |
|
3,725 |
(4) |
457 |
|
904 |
|
— |
IT & integration services |
|
— |
|
58 |
|
507 |
|
— |
Wholesale |
|
4,514 |
|
793 |
|
919 |
|
(12) |
Equipment sales |
|
1,394 |
|
711 |
|
1,047 |
|
— |
Other revenues |
|
668 |
|
2 |
|
168 |
|
— |
External |
|
17,007 |
|
4,643 |
|
6,795 |
|
— |
Inter-operating segments |
|
723 |
|
55 |
|
93 |
|
(12) |
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Revenue |
|
17,983 |
|
4,647 |
|
6,329 |
|
(14) |
Convergence services |
|
4,857 |
|
1,870 |
|
959 |
|
— |
Mobile services only |
|
2,332 |
|
790 |
|
2,079 |
|
— |
Fixed services only |
|
3,787 |
(4) |
436 |
|
783 |
|
— |
IT & integration services |
|
— |
|
41 |
|
430 |
|
— |
Wholesale |
|
4,938 |
|
878 |
|
964 |
|
(14) |
Equipment sales |
|
1,323 |
|
632 |
|
927 |
|
— |
Other revenues |
|
746 |
|
1 |
|
185 |
|
— |
External |
|
17,238 |
|
4,586 |
|
6,219 |
|
— |
Inter-operating segments |
|
745 |
|
61 |
|
109 |
|
(14) |
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
Revenue |
|
18,092 |
|
4,720 |
|
5,870 |
|
(11) |
Convergence services |
|
4,697 |
|
1,870 |
|
850 |
|
— |
Mobile services only |
|
2,276 |
|
880 |
|
2,007 |
|
— |
Fixed services only |
|
3,872 |
(4) |
435 |
|
652 |
|
— |
IT & integration services |
|
— |
|
14 |
|
338 |
|
— |
Wholesale |
|
5,313 |
|
900 |
|
998 |
|
(11) |
Equipment sales |
|
1,226 |
|
621 |
|
869 |
|
— |
Other revenues |
|
708 |
|
1 |
|
155 |
|
— |
External |
|
17,489 |
|
4,672 |
|
5,776 |
|
— |
Inter-operating segments |
|
603 |
|
48 |
|
94 |
|
(11) |
(1) | Including, in 2023, revenue of 5,126 million euros in France, 19 million euros in Spain, 1,703 million euros in other European countries and 1,079 million euros in other countries. |
Including, in 2022, revenue of 5,126 million euros in France, 19 million euros in Spain, 1,762 million euros in other European countries and 1,023 million euros in other countries.
Including, in 2021, revenue of 5,118 million euros in France, 13 million euros in Spain, 1,294 million euros in other European countries and 1,331 million euros in other countries.
(2) | Including, in 2023, revenue of 492 million euros in France and 195 million euros in Spain. |
Including, in 2022, revenue of 473 million euros in France and 212 million euros in Spain.
(3) | Including revenue of 1,283 million euros in France in 2023, 1,361 million euros in 2022 and 1,353 million euros in 2021. |
(4) | Including, in 2023, fixed-only broadband revenue of 3,018 million euros and fixed-only narrowband revenue of 707 million euros. |
Including, in 2022, fixed-only broadband revenue of 2,955 million euros and fixed-only narrowband revenue of 831 million euros.
Including, in 2021, fixed-only broadband revenue of 2,862 million euros and fixed-only narrowband revenue of 1,010 million euros.
(5) | Including, in 2023, revenue of 890 million euros from voice services and revenue of 2,330 million euros from data services. |
Including, in 2022, revenue of 1,018 million euros from voice services and revenue of 2,448 million euros from data services.
Including, in 2021, revenue of 1,106 million euros from voice services and revenue of 2,527 million euros from data services.
Consolidated Financial Statements 2023 |
F-17 |
(in millions of euros) |
|
Europe |
|
Africa & |
|
Orange |
|
Totem(2) |
|
International |
|
Eliminations |
|
Total |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
Total |
|
Middle East |
|
Business(1) |
|
|
|
Carriers & |
|
|
|
telecom |
|
Financial |
|
telecom |
|
consoli- |
|
|
|
|
|
|
|
|
|
|
Shared |
|
|
|
activities |
|
Services |
|
activities / |
|
dated |
|
|
|
|
|
|
|
|
|
|
Services(3) |
|
|
|
|
|
|
|
mobile |
|
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial services |
|
statements |
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
11,574 |
|
7,152 |
|
7,927 |
|
686 |
|
1,478 |
|
(2,416) |
|
44,132 |
|
— |
|
(9) |
|
44,122 |
Convergence services |
|
3,088 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
8,153 |
|
— |
|
— |
|
8,153 |
Mobile services only |
|
2,932 |
|
5,456 |
|
693 |
|
— |
|
— |
|
(37) |
|
11,408 |
|
— |
|
(2) |
|
11,406 |
Fixed services only |
|
1,361 |
|
847 |
|
3,220 |
(5) |
— |
|
— |
|
(124) |
|
9,030 |
|
— |
|
(1) |
|
9,029 |
IT & integration services |
|
565 |
|
53 |
|
3,706 |
|
— |
|
— |
|
(177) |
|
4,146 |
|
— |
|
(5) |
|
4,141 |
Wholesale |
|
1,700 |
|
666 |
|
41 |
|
686 |
|
982 |
|
(1,759) |
|
6,830 |
|
— |
|
— |
|
6,830 |
Equipment sales |
|
1,757 |
|
90 |
|
267 |
|
— |
|
— |
|
(6) |
|
3,503 |
|
— |
|
— |
|
3,503 |
Other revenues |
|
170 |
|
40 |
|
— |
|
— |
|
496 |
|
(313) |
|
1,061 |
|
— |
|
(1) |
|
1,060 |
External |
|
11,438 |
|
6,988 |
|
7,579 |
|
137 |
|
973 |
|
— |
|
44,122 |
|
— |
|
— |
|
44,122 |
Inter-operating segments |
|
136 |
|
164 |
|
347 |
|
549 |
|
505 |
|
(2,416) |
|
9 |
|
— |
|
(9) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
10,962 |
|
6,918 |
|
7,930 |
|
685 |
|
1,540 |
|
(2,538) |
|
43,480 |
|
— |
|
(9) |
|
43,471 |
Convergence services |
|
2,830 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
7,687 |
|
— |
|
— |
|
7,687 |
Mobile services only |
|
2,869 |
|
5,272 |
|
659 |
|
— |
|
— |
|
(38) |
|
11,093 |
|
— |
|
— |
|
11,093 |
Fixed services only |
|
1,219 |
|
800 |
|
3,466 |
(5) |
— |
|
— |
|
(150) |
|
9,121 |
|
— |
|
(1) |
|
9,120 |
IT & integration services |
|
471 |
|
40 |
|
3,489 |
|
— |
|
— |
|
(184) |
|
3,817 |
|
— |
|
(6) |
|
3,811 |
Wholesale |
|
1,828 |
|
663 |
|
41 |
|
685 |
|
1,060 |
|
(1,859) |
|
7,356 |
|
— |
|
— |
|
7,356 |
Equipment sales |
|
1,559 |
|
104 |
|
275 |
|
— |
|
— |
|
(7) |
|
3,255 |
|
— |
|
— |
|
3,254 |
Other revenues |
|
187 |
|
39 |
|
— |
|
— |
|
480 |
|
(299) |
|
1,152 |
|
— |
|
(2) |
|
1,150 |
External |
|
10,805 |
|
6,750 |
|
7,548 |
|
113 |
|
1,017 |
|
— |
|
43,471 |
|
— |
|
— |
|
43,471 |
Inter-operating segments |
|
157 |
|
168 |
|
383 |
|
572 |
|
523 |
|
(2,538) |
|
9 |
|
— |
|
(9) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
10,579 |
|
6,381 |
|
7,757 |
|
n/a |
|
1,515 |
|
(1,795) |
|
42,530 |
|
— |
|
(7) |
|
42,522 |
Convergence services |
|
2,720 |
|
— |
|
— |
|
n/a |
|
— |
|
— |
|
7,417 |
|
— |
|
— |
|
7,417 |
Mobile services only |
|
2,887 |
|
4,884 |
|
636 |
|
n/a |
|
— |
|
(31) |
|
10,652 |
|
— |
|
— |
|
10,652 |
Fixed services only |
|
1,087 |
|
664 |
|
3,633 |
(5) |
n/a |
|
— |
|
(168) |
|
9,089 |
|
— |
|
(1) |
|
9,088 |
IT & integration services |
|
352 |
|
31 |
|
3,195 |
|
n/a |
|
— |
|
(167) |
|
3,411 |
|
— |
|
(4) |
|
3,407 |
Wholesale |
|
1,886 |
|
654 |
|
42 |
|
n/a |
|
1,056 |
|
(1,249) |
|
7,702 |
|
— |
|
— |
|
7,702 |
Equipment sales |
|
1,490 |
|
112 |
|
250 |
|
n/a |
|
— |
|
(8) |
|
3,070 |
|
— |
|
— |
|
3,070 |
Other revenues |
|
157 |
|
36 |
|
— |
|
n/a |
|
460 |
|
(172) |
|
1,188 |
|
— |
|
(2) |
|
1,186 |
External |
|
10,449 |
|
6,216 |
|
7,371 |
|
n/a |
|
998 |
|
— |
|
42,522 |
|
— |
|
— |
|
42,522 |
Inter-operating segments |
|
131 |
|
165 |
|
386 |
|
n/a |
|
517 |
|
(1,795) |
|
7 |
|
— |
|
(7) |
|
— |
Consolidated Financial Statements 2023 |
F-18 |
1.3 Segment revenue to consolidated net income in 2023
(in millions of euros) |
|
France |
|
Europe |
||||||
|
|
|
|
|
|
Other |
|
Elimina- |
|
|
|
|
|
|
Spain |
|
European |
|
tions |
|
Total |
|
|
|
|
|
|
countries |
|
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
17,730 |
|
4,698 |
|
6,889 |
|
(12) |
|
11,574 |
External purchases |
|
(7,518) |
|
(2,814) |
|
(4,046) |
|
12 |
|
(6,848) |
Other operating income |
|
1,214 |
|
125 |
|
302 |
|
(2) |
|
426 |
Other operating expenses |
|
(535) |
|
(150) |
|
(170) |
|
2 |
|
(318) |
Labor expenses |
|
(3,280) |
|
(275) |
|
(830) |
|
— |
|
(1,106) |
Operating taxes and levies |
|
(765) |
|
(125) |
|
(100) |
|
— |
|
(225) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
— |
|
— |
|
— |
|
— |
|
— |
Restructuring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
Depreciation and amortization of financed assets |
|
(129) |
|
— |
|
— |
|
— |
|
— |
Depreciation and amortization of right-of-use assets |
|
(273) |
|
(175) |
|
(208) |
|
— |
|
(384) |
Impairment of right-of-use assets |
|
— |
|
— |
|
— |
|
— |
|
— |
Interests on debts related to financed assets(2) |
|
(14) |
|
— |
|
— |
|
— |
|
— |
Interests on lease liabilities(2) |
|
(66) |
|
(37) |
|
(46) |
|
— |
|
(83) |
EBITDAaL |
|
6,364 |
|
1,246 |
|
1,791 |
|
— |
|
3,037 |
Significant litigation |
|
68 |
|
— |
|
— |
|
— |
|
— |
Specific labour expenses |
|
(349) |
|
— |
|
— |
|
— |
|
— |
Fixed assets, investments and businesses portfolio review |
|
(1) |
|
— |
|
32 |
|
— |
|
32 |
Restructuring programs costs |
|
(4) |
|
— |
|
(63) |
|
— |
|
(63) |
Acquisition and integration costs |
|
1 |
|
(6) |
|
(33) |
|
— |
|
(39) |
Depreciation and amortization of fixed assets |
|
(3,154) |
|
(1,040) |
|
(1,223) |
|
— |
|
(2,263) |
Effects resulting from business combinations |
|
— |
|
— |
|
— |
|
— |
|
— |
Impairment of goodwill |
|
— |
|
— |
|
— |
|
— |
|
— |
Impairment of fixed assets |
|
(1) |
|
— |
|
(10) |
|
— |
|
(10) |
Share of profits (losses) of associates and joint ventures |
|
(36) |
|
— |
|
(8) |
|
— |
|
(8) |
Elimination of interests on debts related to financed assets(2) |
|
14 |
|
— |
|
— |
|
— |
|
— |
Elimination of interests on lease liabilities(2) |
|
66 |
|
37 |
|
46 |
|
— |
|
83 |
Operating Income |
|
2,967 |
|
238 |
|
533 |
|
— |
|
770 |
Cost of gross financial debt except financed assets |
|
|
|
|
|
|
|
|
|
|
Interests on debts related to financed assets(2) |
|
|
|
|
|
|
|
|
|
|
Gains (losses) on assets contributing to net financial debt |
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) |
|
|
|
|
|
|
|
|
|
|
Interests on lease liabilities(2) |
|
|
|
|
|
|
|
|
|
|
Other net financial expenses |
|
|
|
|
|
|
|
|
|
|
Finance costs, net |
|
|
|
|
|
|
|
|
|
|
Income Tax |
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
|
|
|
|
|
|
|
|
(1) | Mobile Financial Services' net banking income is recognized in other operating income and amounts to 149 million euros in 2023. The cost of risk is included in other operating expenses and amounts to (63) million euros in 2023. |
(2) | Presentation adjustments allow the reallocation of the lines of specific items identified in the segment information to the operating revenue and expense lines presented in the consolidated income statement. Interests on debts related to financed assets and interests on lease liabilities are included in segment EBITDAaL. They are excluded from segment operating income and included in net finance costs presented in the consolidated income statement. |
Consolidated Financial Statements 2023 |
F-19 |
(in millions of euros) |
|
Africa & |
|
Orange |
|
Totem |
|
Interna- |
|
Elimination |
|
Total |
|
Mobile |
|
Elimina- |
|
Total |
|
Presenta- |
|
Orange |
|
|
Middle |
|
Business |
|
|
|
tional |
|
telecom |
|
telecom |
|
Financial |
|
tions |
|
|
|
tion adjust- |
|
consoli- |
|
|
East |
|
|
|
|
|
Carriers & |
|
activities |
|
activities |
|
Services(4) |
|
telecom |
|
|
|
ments(2) |
|
dated |
|
|
|
|
|
|
|
|
Shared |
|
|
|
|
|
|
|
activites / |
|
|
|
|
|
financial |
|
|
|
|
|
|
|
|
Services |
|
|
|
|
|
|
|
mobile |
|
|
|
|
|
statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
7,152 |
|
7,927 |
|
686 |
|
1,478 |
|
(2,416) |
|
44,132 |
|
— |
|
(9) |
|
44,122 |
|
— |
|
44,122 |
External purchases |
|
(2,754) |
|
(4,383) |
|
(116) |
|
(1,943) |
|
4,379 |
|
(19,183) |
|
(125) |
|
13 |
|
(19,295) |
|
(26) |
|
(19,322) |
Other operating income |
|
101 |
|
201 |
|
— |
|
2,111 |
|
(3,307) |
|
746 |
|
151 |
|
(4) |
|
894 |
|
— |
|
894 |
Other operating expenses |
|
(247) |
|
(601) |
|
(1) |
|
(29) |
|
1,345 |
|
(388) |
|
(60) |
|
1 |
|
(447) |
|
(5) |
|
(452) |
Labor expenses |
|
(584) |
|
(2,229) |
|
(17) |
|
(1,231) |
|
— |
|
(8,446) |
|
(77) |
|
— |
|
(8,523) |
|
(495) |
|
(9,018) |
Operating taxes and levies |
|
(678) |
|
(65) |
|
(7) |
|
(51) |
|
— |
|
(1,790) |
|
(7) |
|
— |
|
(1,797) |
|
3 |
|
(1,794) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
90 |
|
90 |
Restructuring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(456) |
|
(456) |
Depreciation and amortization of financed assets |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(129) |
|
— |
|
— |
|
(129) |
|
— |
|
(129) |
Depreciation and amortization of right-of-use assets |
|
(199) |
|
(158) |
|
(163) |
|
(337) |
|
— |
|
(1,514) |
|
(4) |
|
— |
|
(1,518) |
|
(4) |
|
(1,522) |
Impairment of right-of-use assets |
|
— |
|
(1) |
|
— |
|
— |
|
— |
|
(1) |
|
— |
|
— |
|
(1) |
|
(67) |
|
(69) |
Interests on debts related to financed assets(2) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(14) |
|
— |
|
— |
|
(14) |
|
14 |
|
n/a |
Interests on lease liabilities(2) |
|
(58) |
|
(10) |
|
(11) |
|
(29) |
|
— |
|
(258) |
|
— |
|
— |
|
(258) |
|
258 |
|
n/a |
EBITDAaL |
|
2,734 |
|
679 |
|
372 |
|
(30) |
|
1 |
|
13,157 |
|
(122) |
|
1 |
|
13,035 |
|
(690) |
|
n/a |
Significant litigation |
|
(38) |
|
- |
|
— |
|
— |
|
— |
|
30 |
|
— |
|
— |
|
30 |
|
(30) |
|
n/a |
Specific labour expenses |
|
— |
|
(61) |
|
— |
|
(92) |
|
— |
|
(502) |
|
(1) |
|
— |
|
(503) |
|
503 |
|
n/a |
Fixed assets, investments and businesses portfolio review |
|
28 |
|
16 |
|
— |
|
15 |
|
— |
|
90 |
|
— |
|
— |
|
90 |
|
(90) |
|
n/a |
Restructuring programs costs |
|
(4) |
|
(210) |
|
(4) |
|
(119) |
|
— |
|
(405) |
|
(121) |
|
— |
|
(526) |
|
526 |
|
n/a |
Acquisition and integration costs |
|
— |
|
(1) |
|
— |
|
(14) |
|
— |
|
(53) |
|
— |
|
— |
|
(53) |
|
53 |
|
n/a |
Depreciation and amortization of fixed assets |
|
(1,041) |
|
(361) |
|
(127) |
|
(345) |
|
— |
|
(7,291) |
|
(21) |
|
— |
|
(7,312) |
|
— |
|
(7,312) |
Effects resulting from business combinations |
|
— |
|
11 |
|
— |
|
— |
|
— |
|
11 |
|
— |
|
|
|
11 |
|
— |
|
11 |
Impairment of goodwill |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Impairment of fixed assets |
|
(3) |
|
8 |
|
— |
|
1 |
|
— |
|
(5) |
|
(42) |
|
— |
|
(47) |
|
— |
|
(47) |
Share of profits (losses) of associates and joint ventures |
|
22 |
|
— |
|
— |
|
(8) |
|
— |
|
(29) |
|
— |
|
— |
|
(29) |
|
— |
|
(29) |
Elimination of interests on debts related to financed assets(2) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
14 |
|
— |
|
— |
|
14 |
|
(14) |
|
n/a |
Elimination of interests on lease liabilities(2) |
|
58 |
|
10 |
|
11 |
|
29 |
|
— |
|
258 |
|
— |
|
— |
|
258 |
|
(258) |
|
n/a |
Operating Income |
|
1,755 |
|
92 |
|
251 |
|
(563) |
|
1 |
|
5,274 |
|
(306) |
|
1 |
|
4,969 |
|
— |
|
4,969 |
Cost of gross financial debt except financed assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,073) |
|
— |
|
(1,073) |
Interests on debts related to financed assets(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14) |
|
— |
|
(14) |
Gains (losses) on assets contributing to net financial debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
283 |
|
— |
|
283 |
Foreign exchange gain (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32) |
|
— |
|
(32) |
Interests on lease liabilities(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(258) |
|
— |
|
(258) |
Other net financial expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(112) |
|
— |
|
(112) |
Finance costs, net |
|
|
|
|
|
|
|
|
|
|
|
(1,205) |
|
— |
|
— |
|
(1,206) |
|
— |
|
(1,206) |
Income Tax |
|
|
|
|
|
|
|
|
|
|
|
(871) |
|
— |
|
— |
|
(871) |
|
— |
|
(871) |
Consolidated net income |
|
|
|
|
|
|
|
|
|
|
|
3,198 |
|
(307) |
|
— |
|
2,892 |
|
— |
|
2,892 |
Consolidated Financial Statements 2023 |
F-20 |
1.4 Segment revenue to consolidated net income in 2022
(in millions of euros) |
|
France |
|
Europe |
||||||
|
|
|
|
Spain |
|
Other |
|
Elimina- |
|
Total |
|
|
|
|
|
|
European |
|
tions |
|
|
|
|
|
|
|
|
countries |
|
Europe |
|
|
Revenue |
|
17,983 |
|
4,647 |
|
6,329 |
|
(14) |
|
10,962 |
External purchases |
|
(7,429) |
|
(2,879) |
|
(3,684) |
|
14 |
|
(6,550) |
Other operating income |
|
1,229 |
|
97 |
|
270 |
|
— |
|
367 |
Other operating expenses |
|
(486) |
|
(162) |
|
(187) |
|
— |
|
(350) |
Labor expenses |
|
(3,435) |
|
(266) |
|
(736) |
|
— |
|
(1,002) |
Operating taxes and levies |
|
(834) |
|
(140) |
|
(101) |
|
— |
|
(241) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
— |
|
— |
|
— |
|
— |
|
— |
Restructuring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
Depreciation and amortization of financed assets |
|
(107) |
|
— |
|
— |
|
— |
|
— |
Depreciation and amortization of right-of-use assets |
|
(254) |
|
(169) |
|
(201) |
|
— |
|
(371) |
Impairment of right-of-use assets |
|
— |
|
— |
|
— |
|
— |
|
— |
Interests on debts related to financed assets(2) |
|
(3) |
|
— |
|
— |
|
— |
|
— |
Interests on lease liabilities(2) |
|
(18) |
|
(17) |
|
(27) |
|
— |
|
(44) |
EBITDAaL |
|
6,645 |
|
1,111 |
|
1,662 |
|
— |
|
2,772 |
Significant litigation |
|
(3) |
|
— |
|
— |
|
— |
|
— |
Specific labour expenses |
|
(330) |
|
— |
|
— |
|
— |
|
— |
Fixed assets, investments and businesses portfolio review |
|
— |
|
— |
|
29 |
|
— |
|
29 |
Restructuring programs costs |
|
(18) |
|
(8) |
|
(14) |
|
— |
|
(22) |
Acquisition and integration costs |
|
— |
|
— |
|
(41) |
|
— |
|
(41) |
Depreciation and amortization of fixed assets |
|
(2,922) |
|
(1,107) |
|
(1,057) |
|
— |
|
(2,164) |
Impairment of goodwill |
|
— |
|
— |
|
(789) |
|
— |
|
(789) |
Impairment of fixed assets |
|
(15) |
|
— |
|
(3) |
|
— |
|
(3) |
Share of profits (losses) of associates and joint ventures |
|
(18) |
|
— |
|
(3) |
|
— |
|
(3) |
Elimination of interests on debts related to financed assets(2) |
|
3 |
|
— |
|
— |
|
— |
|
— |
Elimination of interests on lease liabilities(2) |
|
18 |
|
17 |
|
27 |
|
— |
|
44 |
Operating Income |
|
3,361 |
|
12 |
|
(190) |
|
— |
|
(177) |
Cost of gross financial debt except financed assets |
|
|
|
|
|
|
|
|
|
|
Interests on debts related to financed assets(2) |
|
|
|
|
|
|
|
|
|
|
Gains (losses) on assets contributing to net financial debt |
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) |
|
|
|
|
|
|
|
|
|
|
Interests on lease liabilities(2) |
|
|
|
|
|
|
|
|
|
|
Other net financial expenses |
|
|
|
|
|
|
|
|
|
|
Finance costs, net |
|
|
|
|
|
|
|
|
|
|
Income Taxes |
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
|
|
|
|
|
|
|
|
(1) | Mobile Financial Services' net banking income is recognized in other operating income and amounted to 116 million euros in 2022. The cost of risk is included in other operating expenses and amounted to (45) million euros in 2022. |
(2) | Presentation adjustments allow the reallocation of the lines of specific items identified in the segment information to the operating revenue and expense lines presented in the consolidated income statement. Interests on debts related to financed assets and interests on lease liabilities are included in segment EBITDAaL. They are excluded from segment operating income and included in net finance costs presented in the consolidated income statement. |
Consolidated Financial Statements 2023 |
F-21 |
(in millions of euros) |
|
Africa & |
|
Orange |
|
Totem |
|
Interna-tional |
|
Elimina-tion |
|
Total |
|
Mobile |
|
Elimina-tions |
|
Total |
|
Presenta- |
|
Orange |
|
|
Middle East |
|
Business |
|
|
|
Carriers & |
|
telecom |
|
telecom |
|
Financial |
|
telecom |
|
|
|
tion |
|
Consoli- |
|
|
|
|
|
|
|
|
Shared |
|
activities |
|
activities |
|
Services(1) |
|
activities/mobile |
|
|
|
adjust- |
|
dated Financial |
|
|
|
|
|
|
|
|
Services |
|
|
|
|
|
|
|
financial services |
|
|
|
ments(2) |
|
Statements |
Revenue |
|
6,918 |
|
7,930 |
|
685 |
|
1,540 |
|
(2,538) |
|
43,480 |
|
— |
|
(9) |
|
43,471 |
|
— |
|
43,471 |
External purchases |
|
(2,740) |
|
(4,240) |
|
(131) |
|
(1,997) |
|
4,491 |
|
(18,594) |
|
(129) |
|
15 |
|
(18,707) |
|
(24) |
|
(18,732) |
Other operating income |
|
69 |
|
191 |
|
— |
|
2,101 |
|
(3,331) |
|
627 |
|
128 |
|
(10) |
|
745 |
|
2 |
|
747 |
Other operating expenses |
|
(171) |
|
(657) |
|
— |
|
(49) |
|
1,377 |
|
(335) |
|
(36) |
|
4 |
|
(367) |
|
(47) |
|
(413) |
Labor expenses |
|
(575) |
|
(2,179) |
|
(14) |
|
(1,255) |
|
— |
|
(8,461) |
|
(76) |
|
— |
|
(8,537) |
|
(383) |
|
(8,920) |
Operating taxes and levies |
|
(660) |
|
(82) |
|
(5) |
|
(55) |
|
— |
|
(1,877) |
|
(2) |
|
— |
|
(1,879) |
|
(3) |
|
(1,882) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
233 |
|
233 |
Restructuring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(125) |
|
(125) |
Depreciation and amortization of financed assets |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(107) |
|
— |
|
— |
|
(107) |
|
— |
|
(107) |
Depreciation and amortization of right-of-use assets |
|
(194) |
|
(154) |
|
(159) |
|
(372) |
|
— |
|
(1,504) |
|
(3) |
|
— |
|
(1,507) |
|
— |
|
(1,507) |
Impairment of right-of-use assets |
|
— |
|
(1) |
|
— |
|
— |
|
— |
|
(1) |
|
— |
|
— |
|
(1) |
|
(52) |
|
(54) |
Interests on debts related to financed assets(2) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(3) |
|
— |
|
— |
|
(3) |
|
3 |
|
n/a |
Interests on lease liabilities(2) |
|
(64) |
|
(6) |
|
(4) |
|
(10) |
|
— |
|
(144) |
|
— |
|
— |
|
(145) |
|
145 |
|
n/a |
EBITDAaL |
|
2,584 |
|
804 |
|
371 |
|
(96) |
|
— |
|
13,080 |
|
(118) |
|
1 |
|
12,963 |
|
(251) |
|
n/a |
Significant litigation |
|
— |
|
— |
|
— |
|
(6) |
|
— |
|
(9) |
|
— |
|
— |
|
(9) |
|
9 |
|
n/a |
Specific labour expenses |
|
— |
|
(35) |
|
— |
|
(9) |
|
— |
|
(373) |
|
1 |
|
— |
|
(372) |
|
372 |
|
n/a |
Fixed assets, investments and businesses portfolio review |
|
76 |
|
8 |
|
— |
|
120 |
|
— |
|
233 |
|
— |
|
— |
|
233 |
|
(233) |
|
n/a |
Restructuring programs costs |
|
(8) |
|
(47) |
|
— |
|
(89) |
|
— |
|
(184) |
|
7 |
|
— |
|
(177) |
|
177 |
|
n/a |
Acquisition and integration costs |
|
— |
|
(1) |
|
(1) |
|
(33) |
|
— |
|
(76) |
|
2 |
|
— |
|
(74) |
|
74 |
|
n/a |
Depreciation and amortization of fixed assets |
|
(1,075) |
|
(398) |
|
(122) |
|
(311) |
|
— |
|
(6,992) |
|
(44) |
|
— |
|
(7,035) |
|
— |
|
(7,035) |
Impairment of goodwill |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(789) |
|
(28) |
|
— |
|
(817) |
|
— |
|
(817) |
Impairment of fixed assets |
|
2 |
|
(20) |
|
— |
|
— |
|
— |
|
(36) |
|
(21) |
|
— |
|
(56) |
|
— |
|
(56) |
Share of profits (losses) of associates and joint ventures |
|
22 |
|
1 |
|
— |
|
(3) |
|
— |
|
(2) |
|
— |
|
— |
|
(2) |
|
— |
|
(2) |
Elimination of interests on debts related to financed assets(2) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3 |
|
— |
|
— |
|
3 |
|
(3) |
|
n/a |
Elimination of interests on lease liabilities(2) |
|
64 |
|
6 |
|
4 |
|
10 |
|
— |
|
144 |
|
— |
|
— |
|
145 |
|
(145) |
|
n/a |
Operating Income |
|
1,665 |
|
317 |
|
252 |
|
(417) |
|
— |
|
5,000 |
|
(200) |
|
1 |
|
4,801 |
|
— |
|
4,801 |
Cost of gross financial debt except financed assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(775) |
|
— |
|
(775) |
Interests on debts related to financed assets(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
— |
|
(3) |
Gains (losses) on assets contributing to net financial debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48 |
|
— |
|
48 |
Foreign exchange gain (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(97) |
|
— |
|
(97) |
Interests on lease liabilities(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(145) |
|
— |
|
(145) |
Other net financial expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 |
|
— |
|
52 |
Finance costs, net |
|
|
|
|
|
|
|
|
|
|
|
(920) |
|
1 |
|
(1) |
|
(920) |
|
— |
|
(920) |
Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
(1,270) |
|
5 |
|
— |
|
(1,265) |
|
— |
|
(1,265) |
Consolidated net income |
|
|
|
|
|
|
|
|
|
|
|
2,810 |
|
(194) |
|
0 |
|
2,617 |
|
— |
|
2,617 |
Consolidated Financial Statements 2023 |
F-22 |
1.5 Segment revenue to consolidated net income in 2021
(in millions of euros) |
|
France |
|
Europe |
||||||
|
|
|
|
Spain |
|
Other |
|
Elimina- |
|
Total |
|
|
|
|
|
|
European |
|
tions |
|
|
|
|
|
|
|
|
countries |
|
Europe |
|
|
Revenue |
|
18,092 |
|
4,720 |
|
5,870 |
|
(11) |
|
10,579 |
External purchases |
|
(7,081) |
|
(2,768) |
|
(3,330) |
|
11 |
|
(6,087) |
Other operating income |
|
1,274 |
|
161 |
|
192 |
|
— |
|
353 |
Other operating expenses |
|
(526) |
|
(171) |
|
(179) |
|
— |
|
(350) |
Labor expenses |
|
(3,657) |
|
(268) |
|
(665) |
|
— |
|
(932) |
Operating taxes and levies |
|
(838) |
|
(163) |
|
(96) |
|
— |
|
(259) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
— |
|
— |
|
— |
|
— |
|
— |
Restructuring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
Depreciation and amortization of financed assets |
|
(84) |
|
— |
|
— |
|
— |
|
— |
Depreciation and amortization of right-of-use assets |
|
(304) |
|
(248) |
|
(198) |
|
— |
|
(446) |
Impairment of right-of-use assets |
|
— |
|
— |
|
— |
|
— |
|
— |
Interests on debts related to financed assets(2) |
|
(1) |
|
— |
|
— |
|
— |
|
— |
Interests on lease liabilities(2) |
|
(8) |
|
(14) |
|
(15) |
|
— |
|
(29) |
EBITDAaL |
|
6,867 |
|
1,251 |
|
1,579 |
|
— |
|
2,830 |
Significant litigation |
|
(128) |
|
— |
|
— |
|
— |
|
— |
Specific labour expenses |
|
(959) |
|
— |
|
(2) |
|
— |
|
(2) |
Fixed assets, investments and businesses portfolio review |
|
(2) |
|
— |
|
359 |
|
— |
|
359 |
Restructuring programs costs |
|
(10) |
|
(180) |
|
(31) |
|
— |
|
(211) |
Acquisition and integration costs |
|
(7) |
|
— |
|
(25) |
|
— |
|
(25) |
Depreciation and amortization of fixed assets |
|
(3,108) |
|
(1,107) |
|
(1,097) |
|
— |
|
(2,204) |
Impairment of goodwill |
|
— |
|
(3,702) |
|
— |
|
— |
|
(3,702) |
Impairment of fixed assets |
|
(1) |
|
— |
|
(13) |
|
— |
|
(13) |
Share of profits (losses) of associates and joint ventures |
|
(8) |
|
— |
|
5 |
|
— |
|
5 |
Elimination of interests on debts related to financed assets(2) |
|
1 |
|
— |
|
— |
|
— |
|
— |
Elimination of interests on lease liabilities(2) |
|
8 |
|
14 |
|
15 |
|
— |
|
29 |
Operating Income |
|
2,653 |
|
(3,724) |
|
791 |
|
— |
|
(2,933) |
Cost of gross financial debt except financed assets |
|
|
|
|
|
|
|
|
|
|
Interests on debts related to financed assets(2) |
|
|
|
|
|
|
|
|
|
|
Gains (losses) on assets contributing to net financial debt |
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain (loss) |
|
|
|
|
|
|
|
|
|
|
Interests on lease liabilities(2) |
|
|
|
|
|
|
|
|
|
|
Other net financial expenses |
|
|
|
|
|
|
|
|
|
|
Finance costs, net |
|
|
|
|
|
|
|
|
|
|
Income Taxes |
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
|
|
|
|
|
|
|
|
|
(1) | Mobile Financial Services' net banking income is recognized in other operating income and amounted to 109 million euros in 2021. The cost of risk is included in other operating expenses and amounted to (46) million euros in 2021. |
(2) | Presentation adjustments allow the reallocation of the lines of specific items identified in the segment information to the operating revenue and expense lines presented in the consolidated income statement. Interests on debts related to financed assets and interests on lease liabilities are included in segment EBITDAaL. They are excluded from segment operating income and included in net finance costs presented in the consolidated income statement. |
Consolidated Financial Statements 2023 |
F-23 |
(in millions of euros) |
|
Africa & |
|
Orange |
|
Interna- |
|
Elimina- |
|
Total |
|
Mobile |
|
Elimina-tions |
|
Total |
|
Presenta-tion |
|
Orange |
|
|
Middle East |
|
Business |
|
tional |
|
tion telecom |
|
telecom |
|
Financial |
|
telecom |
|
|
|
adjust- |
|
Consoli-dated |
|
|
|
|
|
|
Carriers & |
|
activities |
|
activities |
|
Services(1) |
|
activities/ |
|
|
|
ments(2) |
|
Financial |
|
|
|
|
|
|
Shared |
|
|
|
|
|
|
|
mobile |
|
|
|
|
|
Statements |
|
|
|
|
|
|
Services |
|
|
|
|
|
|
|
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
services |
|
|
|
|
|
|
Revenue |
|
6,381 |
|
7,757 |
|
1,515 |
|
(1,795) |
|
42,530 |
|
— |
|
(7) |
|
42,522 |
|
— |
|
42,522 |
External purchases |
|
(2,502) |
|
(3,967) |
|
(2,000) |
|
3,786 |
|
(17,849) |
|
(112) |
|
10 |
|
(17,950) |
|
(23) |
|
(17,973) |
Other operating income |
|
52 |
|
173 |
|
2,096 |
|
(3,328) |
|
620 |
|
114 |
|
(4) |
|
730 |
|
53 |
|
783 |
Other operating expenses |
|
(243) |
|
(640) |
|
(71) |
|
1,336 |
|
(493) |
|
(44) |
|
2 |
|
(535) |
|
(165) |
|
(700) |
Labor expenses |
|
(535) |
|
(2,119) |
|
(1,298) |
|
— |
|
(8,542) |
|
(84) |
|
— |
|
(8,626) |
|
(1,291) |
|
(9,917) |
Operating taxes and levies |
|
(644) |
|
(80) |
|
(66) |
|
— |
|
(1,887) |
|
(3) |
|
— |
|
(1,890) |
|
(36) |
|
(1,926) |
Gains (losses) on disposal of fixed assets, investments and activities |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2,507 |
|
2,507 |
Restructuring costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(331) |
|
(331) |
Depreciation and amortization of financed assets |
|
— |
|
— |
|
— |
|
— |
|
(84) |
|
— |
|
— |
|
(84) |
|
— |
|
(84) |
Depreciation and amortization of right-of-use assets |
|
(176) |
|
(147) |
|
(407) |
|
— |
|
(1,478) |
|
(3) |
|
— |
|
(1,481) |
|
— |
|
(1,481) |
Impairment of right-of-use assets |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(91) |
|
(91) |
Interests on debts related to financed assets(2) |
|
— |
|
— |
|
— |
|
— |
|
(1) |
|
— |
|
— |
|
(1) |
|
1 |
|
n/a |
Interests on lease liabilities(2) |
|
(67) |
|
(7) |
|
(8) |
|
— |
|
(119) |
|
— |
|
— |
|
(120) |
|
120 |
|
n/a |
EBITDAaL |
|
2,265 |
|
970 |
|
(237) |
|
— |
|
12,696 |
|
(131) |
|
1 |
|
12,566 |
|
744 |
|
n/a |
Significant litigation |
|
— |
|
— |
|
(6) |
|
— |
|
(134) |
|
— |
|
— |
|
(134) |
|
134 |
|
n/a |
Specific labour expenses |
|
— |
|
(123) |
|
(190) |
|
— |
|
(1,274) |
|
(3) |
|
— |
|
(1,276) |
|
1,276 |
|
n/a |
Fixed assets, investments and businesses portfolio review |
|
2 |
|
3 |
|
2,146 |
|
— |
|
2,507 |
|
— |
|
— |
|
2,507 |
|
(2,507) |
|
n/a |
Restructuring programs costs |
|
(41) |
|
(5) |
|
(145) |
|
— |
|
(412) |
|
(11) |
|
— |
|
(422) |
|
422 |
|
n/a |
Acquisition and integration costs |
|
— |
|
(1) |
|
(16) |
|
— |
|
(49) |
|
(2) |
|
— |
|
(51) |
|
51 |
|
n/a |
Depreciation and amortization of fixed assets |
|
(1,012) |
|
(378) |
|
(335) |
|
— |
|
(7,038) |
|
(36) |
|
— |
|
(7,074) |
|
— |
|
(7,074) |
Impairment of goodwill |
|
— |
|
— |
|
— |
|
— |
|
(3,702) |
|
— |
|
— |
|
(3,702) |
|
— |
|
(3,702) |
Impairment of fixed assets |
|
(1) |
|
— |
|
(2) |
|
— |
|
(17) |
|
— |
|
— |
|
(17) |
|
— |
|
(17) |
Share of profits (losses) of associates and joint ventures |
|
10 |
|
1 |
|
(5) |
|
— |
|
3 |
|
— |
|
— |
|
3 |
|
— |
|
3 |
Elimination of interests on debts related to financed assets(2) |
|
— |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
— |
|
1 |
|
(1) |
|
n/a |
Elimination of interests on lease liabilities(2) |
|
67 |
|
7 |
|
8 |
|
— |
|
119 |
|
— |
|
— |
|
120 |
|
(120) |
|
n/a |
Operating Income |
|
1,291 |
|
474 |
|
1,217 |
|
— |
|
2,702 |
|
(182) |
|
1 |
|
2,521 |
|
— |
|
2,521 |
Cost of gross financial debt except financed assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(829) |
|
— |
|
(829) |
Interests on debts related to financed assets(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
— |
|
(1) |
Gains (losses) on assets contributing to net financial debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
— |
|
(3) |
Foreign exchange gain (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65 |
|
— |
|
65 |
Interests on lease liabilities(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(120) |
|
— |
|
(120) |
Other net financial expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106 |
|
— |
|
106 |
Finance costs, net |
|
|
|
|
|
|
|
|
|
(781) |
|
1 |
|
(1) |
|
(782) |
|
— |
|
(782) |
Income Taxes |
|
|
|
|
|
|
|
|
|
(963) |
|
— |
|
— |
|
(962) |
|
— |
|
(962) |
Consolidated net income |
|
|
|
|
|
|
|
|
|
958 |
|
(181) |
|
— |
|
778 |
|
— |
|
778 |
Consolidated Financial Statements 2023 |
F-24 |
1.6 Segment investments
(in millions of euros) |
|
France |
|
Europe |
||||
|
|
|
|
Spain |
|
Other |
|
Elimina- |
|
|
|
|
|
|
European |
|
tions |
|
|
|
|
|
|
countries |
|
Europe |
December 31, 2023 |
|
|
|
|
|
|
|
|
eCAPEX |
|
3,039 |
|
755 |
|
1,076 |
|
— |
Elimination of proceeds from sales of property, plant and equipment and intangible assets |
|
158 |
|
— |
|
60 |
|
— |
Telecommunications licenses |
|
2 |
|
32 |
|
436 |
|
— |
Financed assets |
|
233 |
|
— |
|
— |
|
— |
Total investments |
|
3,432 |
|
787 |
|
1,572 |
|
— |
Including other intangible assets |
|
|
|
|
|
|
|
|
Including property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
eCAPEX |
|
3,429 |
|
863 |
|
1,020 |
|
— |
Elimination of proceeds from sales of property, plant and equipment and intangible assets |
|
126 |
|
— |
|
56 |
|
— |
Telecommunications licenses |
|
9 |
|
10 |
|
664 |
|
— |
Financed assets |
|
229 |
|
— |
|
— |
|
— |
Total investments |
|
3,793 |
|
873 |
|
1,739 |
|
— |
Including other intangible assets |
|
|
|
|
|
|
|
|
Including property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
eCAPEX |
|
4,117 |
|
980 |
|
913 |
|
— |
Elimination of proceeds from sales of property, plant and equipment and intangible assets |
|
49 |
|
1 |
|
65 |
|
— |
Telecommunications licenses |
|
264 |
|
618 |
|
32 |
|
— |
Financed assets |
|
40 |
|
— |
|
— |
|
— |
Total investments |
|
4,471 |
|
1,598 |
|
1,010 |
|
— |
Including other intangible assets |
|
|
|
|
|
|
|
|
Including property, plant and equipment |
|
|
|
|
|
|
|
|
(1) | Including investments in intangible assets and property, plant and equipment in France for 222 million euros in 2023, 209 million euros in 2022 and 206 million euros in 2021. |
(2) | Including investments in intangible assets and property, plant and equipment in France for 115 million euros in 2023 and 110 million euros in 2022. |
(3) | Including investments in intangible assets and property, plant and equipment in France for 238 million euros in 2023, 325 million euros in 2022 and 271 million e euros in 2021. |
Consolidated Financial Statements 2023 |
F-25 |
(in millions of euros) |
|
Europe |
|
Africa & |
|
Orange |
|
Totem(2) |
|
International |
|
Eliminations |
|
Total |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
Total |
|
Middle-East |
|
Business(1) |
|
|
|
Carriers |
|
telecom |
|
telecom |
|
Financial |
|
telecom |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
& Shared |
|
activities |
|
activities |
|
Services |
|
activities/ |
|
Financial |
|
|
|
|
|
|
|
|
|
|
Services(3) |
|
and |
|
|
|
|
|
bank |
|
Statements |
|
|
|
|
|
|
|
|
|
|
|
|
unallocated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eCAPEX |
|
1,831 |
|
1,248 |
|
296 |
|
144 |
|
225 |
|
— |
|
6,783 |
|
33 |
|
— |
|
6,815 |
Elimination of proceeds from sales of property, plant and equipment and intangible assets |
|
60 |
|
35 |
|
19 |
|
— |
|
20 |
|
— |
|
292 |
|
— |
|
— |
|
292 |
Telecommunications licenses |
|
468 |
|
251 |
|
— |
|
— |
|
— |
|
— |
|
721 |
|
— |
|
— |
|
721 |
Financed assets |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
233 |
|
— |
|
— |
|
233 |
Total investments |
|
2,359 |
|
1,535 |
|
315 |
|
144 |
|
245 |
|
— |
|
8,030 |
|
33 |
|
— |
|
8,062 |
Including other intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,365 |
Including property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
— |
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
— |
eCAPEX |
|
1,883 |
|
1,271 |
|
332 |
|
142 |
|
278 |
|
— |
|
7,335 |
|
35 |
|
— |
|
7,371 |
Elimination of proceeds from sales of property, plant and equipment and intangible assets |
|
56 |
|
99 |
|
11 |
|
— |
|
55 |
|
— |
|
347 |
|
— |
|
— |
|
347 |
Telecommunications licenses |
|
674 |
|
377 |
|
— |
|
— |
|
— |
|
— |
|
1,060 |
|
— |
|
— |
|
1,060 |
Financed assets |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
229 |
|
— |
|
— |
|
229 |
Total investments |
|
2,612 |
|
1,747 |
|
344 |
|
142 |
|
333 |
|
— |
|
8,971 |
|
35 |
|
— |
|
9,007 |
Including other intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,678 |
Including property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eCAPEX |
|
1,893 |
|
1,064 |
|
318 |
|
n/a |
|
243 |
|
— |
|
7,636 |
|
24 |
|
— |
|
7,660 |
Elimination of proceeds from sales of property, plant and equipment and intangible assets |
|
66 |
|
5 |
|
7 |
|
n/a |
|
36 |
|
— |
|
163 |
|
— |
|
— |
|
163 |
Telecommunications licenses |
|
650 |
|
12 |
|
— |
|
n/a |
|
— |
|
— |
|
926 |
|
— |
|
— |
|
926 |
Financed assets |
|
— |
|
— |
|
— |
|
n/a |
|
— |
|
— |
|
40 |
|
— |
|
— |
|
40 |
Total investments |
|
2,609 |
|
1,082 |
|
325 |
|
n/a |
|
279 |
|
— |
|
8,766 |
|
24 |
|
— |
|
8,789 |
Including other intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,842 |
Including property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,947 |
Consolidated Financial Statements 2023 |
F-26 |
1.7 Segment assets
(in millions of euros) |
|
France |
|
Europe |
||||
|
|
|
|
Spain |
|
Other |
|
Elimina- |
|
|
|
|
|
|
European |
|
tions |
|
|
|
|
|
|
countries |
|
Europe |
December 31, 2023 |
|
|
|
|
|
|
|
|
Goodwill |
|
13,176 |
|
2,734 |
|
2,558 |
|
— |
Other intangible assets |
|
4,093 |
|
1,864 |
|
2,828 |
|
— |
Property, plant and equipment |
|
17,077 |
|
3,518 |
|
5,631 |
|
— |
Right-of-use assets |
|
2,248 |
|
1,220 |
|
1,018 |
|
— |
Interests in associates and joint ventures |
|
1,035 |
|
— |
|
339 |
|
— |
Non-current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
8 |
|
13 |
|
38 |
|
— |
Total non-current assets |
|
37,637 |
|
9,348 |
|
12,411 |
|
— |
Inventories |
|
507 |
|
88 |
|
199 |
|
— |
Trade receivables |
|
1,807 |
|
587 |
|
1,321 |
|
2 |
Other customer contract assets |
|
391 |
|
213 |
|
461 |
|
— |
Prepaid expenses |
|
62 |
|
374 |
|
87 |
|
— |
Current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
756 |
|
20 |
|
165 |
|
— |
Total current assets |
|
3,522 |
|
1,282 |
|
2,233 |
|
2 |
Total assets |
|
41,159 |
|
10,630 |
|
14,644 |
|
2 |
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Goodwill |
|
13,176 |
|
2,734 |
|
1,852 |
|
— |
Other intangible assets |
|
4,331 |
|
1,994 |
|
2,287 |
|
— |
Property, plant and equipment |
|
16,906 |
|
3,640 |
|
4,239 |
|
— |
Right-of-use assets |
|
1,946 |
|
1,035 |
|
1,023 |
|
— |
Interests in associates and joint ventures |
|
1,070 |
|
— |
|
313 |
|
— |
Non-current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
9 |
|
12 |
|
43 |
|
— |
Total non-current assets |
|
37,438 |
|
9,415 |
|
9,755 |
|
— |
Inventories |
|
429 |
|
73 |
|
187 |
|
— |
Trade receivables |
|
2,055 |
|
601 |
|
1,176 |
|
(1) |
Other customer contract assets |
|
371 |
|
174 |
|
425 |
|
— |
Prepaid expenses |
|
41 |
|
373 |
|
61 |
|
— |
Current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
789 |
|
77 |
|
215 |
|
— |
Total current assets |
|
3,685 |
|
1,298 |
|
2,064 |
|
(1) |
Total assets |
|
41,123 |
|
10,714 |
|
11,819 |
|
(1) |
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
Goodwill |
|
14,364 |
|
3,170 |
|
2,910 |
|
— |
Other intangible assets |
|
4,543 |
|
2,259 |
|
1,727 |
|
— |
Property, plant and equipment |
|
16,975 |
|
3,834 |
|
3,967 |
|
— |
Right-of-use assets |
|
2,014 |
|
1,093 |
|
1,104 |
|
— |
Interests in associates and joint ventures |
|
1,061 |
|
— |
|
303 |
|
— |
Non-current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
9 |
|
16 |
|
15 |
|
— |
Total non-current assets |
|
38,966 |
|
10,372 |
|
10,025 |
|
— |
Inventories |
|
438 |
|
61 |
|
176 |
|
— |
Trade receivables |
|
2,125 |
|
643 |
|
1,147 |
|
1 |
Other customer contract assets |
|
379 |
|
176 |
|
407 |
|
— |
Prepaid expenses |
|
35 |
|
417 |
|
69 |
|
— |
Current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
737 |
|
72 |
|
183 |
|
— |
Total current assets |
|
3,713 |
|
1,368 |
|
1,982 |
|
1 |
Total assets |
|
42,679 |
|
11,740 |
|
12,007 |
|
1 |
(1) | Including intangible and tangible assets in France for 791 million euros in 2023 and 748 million euros in 2022. |
(2) | Including intangible and tangible assets in France for 548 million euros in 2023, 526 million euros in 2022 and 564 million euros in 2021. |
(3) | Including intangible and tangible assets in France for 1,639 million euros in 2023, 1,746 million euros in 2022 and 1,687 million euros in 2021. Intangible assets also include the Orange brand for 3,133 million euros. |
(4) | Including 1,430 million euros of current assets related to the restriction of electronic money in 2023, 1,242 million euros in 2022 and 1,028 million euros in 2021. |
Consolidated Financial Statements 2023 |
F-27 |
(in millions of euros) |
|
Europe |
|
Africa & |
|
Orange |
|
Totem(1) |
|
International |
|
Eliminations |
|
Total |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
Total |
|
Middle East |
|
Business |
|
|
|
Carriers |
|
telecom |
|
telecom |
|
Financial |
|
telecom |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
& Shared |
|
activities |
|
activities |
|
Services |
|
activities / |
|
Financial |
|
|
|
|
|
|
|
|
|
|
Services |
|
and |
|
|
|
|
|
mobile |
|
Statements |
|
|
|
|
|
|
|
|
|
|
|
|
unallocated |
|
|
|
|
|
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
items |
|
|
|
|
|
services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
5,291 |
|
1,403 |
|
2,263 |
|
1,624 |
|
18 |
|
— |
|
23,775 |
|
— |
|
— |
|
23,775 |
Other intangible assets |
|
4,691 |
|
1,957 |
|
585 |
(2) |
9 |
|
3,739 |
(3) |
— |
|
15,074 |
|
24 |
|
— |
|
15,098 |
Property, plant and equipment |
|
9,149 |
|
4,522 |
|
391 |
(2) |
980 |
|
1,065 |
(3) |
— |
|
33,184 |
|
10 |
|
— |
|
33,193 |
Right-of-use assets |
|
2,238 |
|
754 |
|
392 |
|
665 |
|
1,859 |
|
— |
|
8,155 |
|
20 |
|
— |
|
8,175 |
Interests in associates and joint ventures |
|
339 |
|
106 |
|
3 |
|
— |
|
8 |
|
— |
|
1,491 |
|
— |
|
— |
|
1,491 |
Non-current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
916 |
|
916 |
|
— |
|
— |
|
916 |
Other |
|
51 |
|
21 |
|
36 |
|
4 |
|
20 |
|
1,670 |
|
1,812 |
|
378 |
(5) |
(27) |
|
2,162 |
Total non-current assets |
|
21,759 |
|
8,763 |
|
3,670 |
|
3,282 |
|
6,709 |
|
2,586 |
|
84,406 |
|
432 |
|
(27) |
|
84,811 |
Inventories |
|
287 |
|
169 |
|
82 |
|
— |
|
107 |
|
— |
|
1,152 |
|
— |
|
— |
|
1,152 |
Trade receivables |
|
1,910 |
|
996 |
|
1,322 |
|
336 |
|
1,121 |
|
(1,445) |
|
6,046 |
|
38 |
|
(71) |
|
6,013 |
Other customer contract assets |
|
674 |
|
10 |
|
721 |
|
— |
|
— |
|
— |
|
1,795 |
|
— |
|
— |
|
1,795 |
Prepaid expenses |
|
461 |
|
189 |
|
88 |
|
14 |
|
52 |
|
(31) |
|
835 |
|
34 |
|
— |
|
868 |
Current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
8,210 |
|
8,210 |
|
— |
|
— |
|
8,210 |
Other |
|
184 |
|
2,002 |
(4) |
255 |
|
27 |
|
436 |
|
244 |
|
3,903 |
|
3,316 |
(6) |
(16) |
|
7,203 |
Total current assets |
|
3,517 |
|
3,366 |
|
2,468 |
|
377 |
|
1,715 |
|
6,977 |
|
21,942 |
|
3,387 |
|
(87) |
|
25,241 |
Total assets |
|
25,276 |
|
12,128 |
|
6,138 |
|
3,659 |
|
8,424 |
|
9,563 |
|
106,347 |
|
3,819 |
|
(115) |
|
110,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
4,586 |
|
1,420 |
|
2,289 |
|
1,624 |
|
18 |
|
— |
|
23,113 |
|
— |
|
— |
|
23,113 |
Other intangible assets |
|
4,280 |
|
1,956 |
|
577 |
(2) |
6 |
|
3,741 |
(3) |
— |
|
14,892 |
|
54 |
|
— |
|
14,946 |
Property, plant and equipment |
|
7,879 |
|
4,315 |
|
417 |
(2) |
943 |
|
1,169 |
(3) |
— |
|
31,630 |
|
10 |
|
— |
|
31,640 |
Right-of-use assets |
|
2,058 |
|
819 |
|
438 |
|
649 |
|
2,002 |
|
— |
|
7,912 |
|
23 |
|
— |
|
7,936 |
Interests in associates and joint ventures |
|
313 |
|
89 |
|
3 |
|
— |
|
12 |
|
— |
|
1,486 |
|
— |
|
— |
|
1,486 |
Non-current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1,390 |
|
1,390 |
|
— |
|
— |
|
1,390 |
Other |
|
55 |
|
27 |
|
36 |
|
4 |
|
21 |
|
1,430 |
|
1,583 |
|
781 |
(5) |
(27) |
|
2,337 |
Total non-current assets |
|
19,171 |
|
8,626 |
|
3,761 |
|
3,226 |
|
6,964 |
|
2,820 |
|
82,005 |
|
869 |
|
(27) |
|
82,847 |
Inventories |
|
260 |
|
127 |
|
91 |
|
— |
|
141 |
|
— |
|
1,048 |
|
— |
|
— |
|
1,048 |
Trade receivables |
|
1,776 |
|
954 |
|
1,339 |
|
272 |
|
1,042 |
|
(1,200) |
|
6,237 |
|
130 |
|
(62) |
|
6,305 |
Other customer contract assets |
|
600 |
|
11 |
|
588 |
|
— |
|
— |
|
— |
|
1,570 |
|
— |
|
— |
|
1,570 |
Prepaid expenses |
|
434 |
|
178 |
|
125 |
|
19 |
|
61 |
|
(28) |
|
830 |
|
22 |
|
— |
|
851 |
Current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
10,451 |
|
10,451 |
|
— |
|
— |
|
10,451 |
Other |
|
292 |
|
1,720 |
(4) |
278 |
|
13 |
|
424 |
|
150 |
|
3,666 |
|
2,931 |
(6) |
(18) |
|
6,579 |
Total current assets |
|
3,361 |
|
2,991 |
|
2,421 |
|
304 |
|
1,668 |
|
9,373 |
|
23,801 |
|
3,083 |
|
(81) |
|
26,803 |
Total assets |
|
22,532 |
|
11,616 |
|
6,182 |
|
3,530 |
|
8,631 |
|
12,192 |
|
105,807 |
|
3,951 |
|
(108) |
|
109,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
6,079 |
|
1,465 |
|
2,237 |
|
n/a |
|
18 |
|
— |
|
24,163 |
|
28 |
|
— |
|
24,192 |
Other intangible assets |
|
3,985 |
|
1,974 |
|
6,2(22) |
(2) |
n/a |
|
3,728 |
(3) |
— |
|
14,852 |
|
88 |
|
— |
|
14,940 |
Property, plant and equipment |
|
7,801 |
|
4,113 |
|
4,6(62) |
(2) |
n/a |
|
1,125 |
(3) |
— |
|
30,479 |
|
5 |
|
— |
|
30,484 |
Right-of-use assets |
|
2,197 |
|
918 |
|
478 |
|
n/a |
|
2,074 |
|
— |
|
7,681 |
|
21 |
|
— |
|
7,702 |
Interests in associates and joint ventures |
|
303 |
|
67 |
|
2 |
|
n/a |
|
6 |
|
— |
|
1,440 |
|
— |
|
— |
|
1,440 |
Non-current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
n/a |
|
— |
|
709 |
|
709 |
|
— |
|
— |
|
709 |
Other |
|
31 |
|
32 |
|
43 |
|
n/a |
|
39 |
|
1,725 |
|
1,878 |
|
919 |
(5) |
(27) |
|
2,769 |
Total non-current assets |
|
20,396 |
|
8,569 |
|
3,848 |
|
n/a |
|
6,990 |
|
2,433 |
|
81,202 |
|
1,062 |
|
(27) |
|
82,236 |
Inventories |
|
237 |
|
93 |
|
70 |
|
n/a |
|
114 |
|
— |
|
951 |
|
— |
|
— |
|
952 |
Trade receivables |
|
1,791 |
|
833 |
|
1,162 |
|
n/a |
|
904 |
|
(774) |
|
6,040 |
|
91 |
|
(103) |
|
6,029 |
Other customer contract assets |
|
583 |
|
13 |
|
485 |
|
n/a |
|
— |
|
— |
|
1,460 |
|
— |
|
— |
|
1,460 |
Prepaid expenses |
|
486 |
|
200 |
|
95 |
|
n/a |
|
53 |
|
(30) |
|
839 |
|
14 |
|
(1) |
|
851 |
Current assets included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
n/a |
|
— |
|
10,462 |
|
10,462 |
|
— |
|
— |
|
10,462 |
Other |
|
255 |
|
1,484 |
(4) |
214 |
|
n/a |
|
389 |
|
163 |
|
3,241 |
|
2,848 |
(6) |
(9) |
|
6,080 |
Total current assets |
|
3,351 |
|
2,623 |
|
2,026 |
|
n/a |
|
1,460 |
|
9,821 |
|
22,994 |
|
2,953 |
|
(113) |
|
25,834 |
Total assets |
|
23,747 |
|
11,192 |
|
5,873 |
|
n/a |
|
8,450 |
|
12,255 |
|
104,196 |
|
4,015 |
|
(140) |
|
108,071 |
(5) | Including 367 million euros of non-current financial assets related to Mobile Financial Services in 2023, 772 million euros in 2022 and 900 million euros in 2021 (see Note 17.1). |
(6) | Including 3,192 million euros of current financial assets related to Mobile Financial Services in 2023 (of which 604 million euros related to receivables sold by Orange Espagne), 2,747 million euros in 2022 and 2,385 million euros in 2021 (see Note 17.1). |
Consolidated Financial Statements 2023 |
F-28 |
1.8 Segment equity and liabilities
(in millions of euros) |
|
France |
|
Europe |
||||
|
|
|
|
Spain |
|
Other |
|
Elimina- |
|
|
|
|
|
|
European |
|
tions |
|
|
|
|
|
|
countries |
|
Europe |
December 31, 2023 |
|
|
|
|
|
|
|
|
Equity |
|
— |
|
— |
|
— |
|
— |
Non-current lease liabilities |
|
2,026 |
|
1,117 |
|
847 |
|
— |
Fixed assets payables |
|
589 |
|
398 |
|
487 |
|
— |
Non-current employee benefits |
|
1,466 |
|
5 |
|
23 |
|
— |
Non-current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
272 |
|
9 |
|
346 |
|
— |
Total non-current liabilities |
|
4,352 |
|
1,529 |
|
1,704 |
|
— |
Current lease liabilities |
|
257 |
|
199 |
|
228 |
|
— |
Current fixed assets payables |
|
1,168 |
|
464 |
|
468 |
|
— |
Trade payables |
|
2,962 |
|
883 |
|
1,068 |
|
2 |
Customer contracts liabilities |
|
743 |
|
219 |
|
569 |
|
— |
Current employee benefits |
|
1,339 |
|
58 |
|
153 |
|
— |
Deferred income |
|
— |
|
50 |
|
23 |
|
— |
Current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
780 |
|
136 |
|
341 |
|
— |
Total current liabilities |
|
7,248 |
|
2,008 |
|
2,850 |
|
2 |
Total equity and liabilities |
|
11,600 |
|
3,538 |
|
4,554 |
|
2 |
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
Equity |
|
— |
|
— |
|
— |
|
— |
Non-current lease liabilities |
|
1,740 |
|
961 |
|
870 |
|
— |
Non-current fixed assets payables |
|
468 |
|
429 |
|
396 |
|
— |
Non-current employee benefits |
|
1,522 |
|
5 |
|
18 |
|
— |
Non-current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
347 |
|
13 |
|
247 |
|
— |
Total non-current liabilities |
|
4,076 |
|
1,408 |
|
1,531 |
|
— |
Current lease liabilities |
|
214 |
|
178 |
|
194 |
|
— |
Current fixed assets payables |
|
1,383 |
|
451 |
|
460 |
|
— |
Trade payables |
|
2,924 |
|
868 |
|
971 |
|
(1) |
Customer contracts liabilities |
|
830 |
|
228 |
|
513 |
|
— |
Current employee benefits |
|
1,243 |
|
56 |
|
125 |
|
— |
Deferred income |
|
— |
|
67 |
|
20 |
|
— |
Current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
763 |
|
143 |
|
269 |
|
— |
Total current liabilities |
|
7,357 |
|
1,992 |
|
2,552 |
|
(1) |
Total equity and liabilities |
|
11,433 |
|
3,399 |
|
4,083 |
|
(1) |
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
Equity |
|
— |
|
— |
|
— |
|
— |
Non-current lease liabilities |
|
1,668 |
|
1,015 |
|
941 |
|
— |
Non-current fixed assets payables |
|
639 |
|
462 |
|
165 |
|
— |
Non-current employee benefits |
|
1,643 |
|
5 |
|
21 |
|
— |
Non-current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
578 |
|
57 |
|
327 |
|
— |
Total non-current liabilities |
|
4,528 |
|
1,539 |
|
1,454 |
|
— |
Current lease liabilities |
|
312 |
|
193 |
|
198 |
|
— |
Current fixed assets payables |
|
1,402 |
|
551 |
|
450 |
|
— |
Trade payables |
|
2,804 |
|
782 |
|
992 |
|
1 |
Customer contracts liabilities |
|
942 |
|
182 |
|
518 |
|
— |
Current employee benefits |
|
1,210 |
|
43 |
|
111 |
|
— |
Deferred income |
|
— |
|
84 |
|
20 |
|
— |
Current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
Other |
|
795 |
|
218 |
|
266 |
|
— |
Total current liabilities |
|
7,465 |
|
2,053 |
|
2,555 |
|
1 |
Total equity and liabilities |
|
11,993 |
|
3,592 |
|
4,009 |
|
1 |
(1) | Including in 2023, 119 million euros of non-current financial liabilities related to Mobile Financial Services, 171 million euros in 2022 and 86 million euros in 2021 (see Note 17.1) |
(2) | Including 3,074 million euros of current financial liabilities related to Mobile Financial Services in 2023, 3,034 million euros in 2022 and 3,161 million euros in 2021 (see Note 17.1). |
(3) | Including 1,430 million euros of current liabilities related to the restriction of electronic money in 2023, 1,242 million euros in 2022 and 1,028 million euros in 2021. |
Consolidated Financial Statements 2023 |
F-29 |
(in millions of euros) |
|
Europe |
|
Africa & |
|
Orange |
|
Totem |
|
International |
|
Eliminations |
|
Total |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
Total |
|
Middle East |
|
Business |
|
|
|
Carriers |
|
telecom |
|
telecom |
|
Financial |
|
telecom |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
& Shared |
|
activities |
|
activities |
|
Services |
|
activities / |
|
Financial |
|
|
|
|
|
|
|
|
|
|
Services |
|
and |
|
|
|
|
|
mobile |
|
Statements |
|
|
|
|
|
|
|
|
|
|
|
|
unallocated |
|
|
|
|
|
financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
items |
|
|
|
|
|
services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
— |
|
— |
|
— |
|
— |
|
— |
|
36,040 |
|
36,040 |
|
(941) |
|
— |
|
35,098 |
Non-current lease liabilities |
|
1,964 |
|
675 |
|
285 |
|
490 |
|
1,641 |
|
— |
|
7,081 |
|
18 |
|
— |
|
7,099 |
Fixed assets payables |
|
886 |
|
133 |
|
— |
|
— |
|
— |
|
— |
|
1,608 |
|
— |
|
— |
|
1,608 |
Non-current employee benefits |
|
28 |
|
98 |
|
229 |
|
3 |
|
721 |
|
— |
|
2,545 |
|
7 |
|
— |
|
2,551 |
Non-current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
30,741 |
|
30,741 |
|
— |
|
— |
|
30,741 |
Other |
|
355 |
|
121 |
|
27 |
|
140 |
|
46 |
|
1,247 |
|
2,207 |
|
248 |
(1) |
(27) |
|
2,428 |
Total non-current liabilities |
|
3,233 |
|
1,027 |
|
540 |
|
633 |
|
2,409 |
|
31,987 |
|
44,181 |
|
273 |
|
(27) |
|
44,427 |
Current lease liabilities |
|
427 |
|
163 |
|
128 |
|
139 |
|
351 |
|
— |
|
1,464 |
|
4 |
|
— |
|
1,469 |
Current fixed assets payables |
|
932 |
|
657 |
|
52 |
|
23 |
|
92 |
|
— |
|
2,923 |
|
3 |
|
— |
|
2,926 |
Trade payables |
|
1,953 |
|
1,472 |
|
936 |
|
305 |
|
883 |
|
(1,445) |
|
7,065 |
|
48 |
|
(71) |
|
7,042 |
Customer contracts liabilities |
|
788 |
|
87 |
|
929 |
|
10 |
|
191 |
|
(31) |
|
2,716 |
|
1 |
|
— |
|
2,717 |
Current employee benefits |
|
211 |
|
103 |
|
504 |
|
5 |
|
450 |
|
— |
|
2,612 |
|
20 |
|
— |
|
2,632 |
Deferred income |
|
73 |
|
39 |
|
10 |
|
— |
|
9 |
|
— |
|
132 |
|
2 |
|
— |
|
135 |
Current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
5,498 |
|
5,498 |
|
— |
|
(7) |
|
5,490 |
Other |
|
477 |
|
2,279 |
(3) |
495 |
|
11 |
|
575 |
|
(900) |
|
3,716 |
|
4,409 |
(2) |
(9) |
|
8,116 |
Total current liabilities |
|
4,860 |
|
4,800 |
|
3,053 |
|
494 |
|
2,551 |
|
3,121 |
|
26,126 |
|
4,487 |
|
(87) |
|
30,526 |
Total equity and liabilities |
|
8,093 |
|
5,827 |
|
3,593 |
|
1,126 |
|
4,960 |
|
71,148 |
|
106,347 |
|
3,819 |
|
(115) |
|
110,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
— |
|
— |
|
— |
|
— |
|
— |
|
35,589 |
|
35,589 |
|
(633) |
|
— |
|
34,956 |
Non-current lease liabilities |
|
1,831 |
|
691 |
|
320 |
|
476 |
|
1,820 |
|
— |
|
6,879 |
|
23 |
|
— |
|
6,901 |
Non-current fixed assets payables |
|
825 |
|
188 |
|
— |
|
— |
|
— |
|
— |
|
1,480 |
|
— |
|
— |
|
1,480 |
Non-current employee benefits |
|
23 |
|
89 |
|
242 |
|
2 |
|
682 |
|
— |
|
2,560 |
|
7 |
|
— |
|
2,567 |
Non-current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
32,265 |
|
32,265 |
|
— |
|
— |
|
32,265 |
Other |
|
259 |
|
96 |
|
16 |
|
115 |
|
43 |
|
1,235 |
|
2,112 |
|
172 |
(1) |
(27) |
|
2,257 |
Total non-current liabilities |
|
2,939 |
|
1,064 |
|
579 |
|
593 |
|
2,545 |
|
33,500 |
|
45,296 |
|
202 |
|
(27) |
|
45,471 |
Current lease liabilities |
|
373 |
|
209 |
|
134 |
|
142 |
|
433 |
|
— |
|
1,504 |
|
4 |
|
— |
|
1,509 |
Current fixed assets payables |
|
911 |
|
589 |
|
68 |
|
9 |
|
134 |
|
— |
|
3,094 |
|
6 |
|
— |
|
3,101 |
Trade payables |
|
1,839 |
|
1,307 |
|
909 |
|
256 |
|
942 |
|
(1,200) |
|
6,976 |
|
153 |
|
(62) |
|
7,067 |
Customer contracts liabilities |
|
740 |
|
93 |
|
750 |
|
9 |
|
184 |
|
(27) |
|
2,580 |
|
— |
|
— |
|
2,579 |
Current employee benefits |
|
181 |
|
88 |
|
455 |
|
6 |
|
421 |
|
— |
|
2,394 |
|
24 |
|
— |
|
2,418 |
Deferred income |
|
86 |
|
40 |
|
8 |
|
— |
|
10 |
|
— |
|
145 |
|
5 |
|
— |
|
149 |
Current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
— |
|
— |
|
4,759 |
|
4,759 |
|
— |
|
(6) |
|
4,753 |
Other |
|
412 |
|
2,031 |
(3) |
311 |
|
11 |
|
572 |
|
(630) |
|
3,470 |
|
4,190 |
(2) |
(12) |
|
7,647 |
Total current liabilities |
|
4,542 |
|
4,358 |
|
2,636 |
|
432 |
|
2,696 |
|
2,901 |
|
24,922 |
|
4,382 |
|
(81) |
|
29,223 |
Total equity and liabilities |
|
7,481 |
|
5,422 |
|
3,215 |
|
1,026 |
|
5,240 |
|
71,989 |
|
105,807 |
|
3,951 |
|
(108) |
|
109,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
— |
|
— |
|
— |
|
n/a |
|
— |
|
35,806 |
|
35,806 |
|
(445) |
|
— |
|
35,361 |
Non-current lease liabilities |
|
1,956 |
|
805 |
|
378 |
|
n/a |
|
1,863 |
|
— |
|
6,669 |
|
27 |
|
— |
|
6,696 |
Non-current fixed assets payables |
|
627 |
|
104 |
|
— |
|
n/a |
|
— |
|
— |
|
1,370 |
|
— |
|
— |
|
1,370 |
Non-current employee benefits |
|
26 |
|
80 |
|
277 |
|
n/a |
|
760 |
|
— |
|
2,787 |
|
11 |
|
— |
|
2,798 |
Non-current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
n/a |
|
— |
|
32,083 |
|
32,083 |
|
— |
|
— |
|
32,083 |
Other |
|
385 |
|
74 |
|
20 |
|
n/a |
|
52 |
|
1,312 |
|
2,421 |
|
93 |
(1) |
(27) |
|
2,487 |
Total non-current liabilities |
|
2,993 |
|
1,063 |
|
676 |
|
n/a |
|
2,675 |
|
33,395 |
|
45,330 |
|
131 |
|
(27) |
|
45,434 |
Current lease liabilities |
|
391 |
|
181 |
|
106 |
|
n/a |
|
375 |
|
— |
|
1,364 |
|
4 |
|
— |
|
1,369 |
Current fixed assets payables |
|
1,001 |
|
543 |
|
58 |
|
n/a |
|
107 |
|
— |
|
3,110 |
|
1 |
|
— |
|
3,111 |
Trade payables |
|
1,774 |
|
1,139 |
|
771 |
|
n/a |
|
969 |
|
(774) |
|
6,684 |
|
157 |
|
(103) |
|
6,738 |
Customer contracts liabilities |
|
700 |
|
130 |
|
599 |
|
n/a |
|
170 |
|
(28) |
|
2,513 |
|
— |
|
(1) |
|
2,512 |
Current employee benefits |
|
154 |
|
82 |
|
446 |
|
n/a |
|
395 |
|
— |
|
2,289 |
|
27 |
|
— |
|
2,316 |
Deferred income |
|
104 |
|
31 |
|
35 |
|
n/a |
|
9 |
|
(2) |
|
176 |
|
3 |
|
— |
|
180 |
Current liabilities included in the calculation of net financial debt |
|
— |
|
— |
|
— |
|
n/a |
|
— |
|
3,549 |
|
3,549 |
|
— |
|
(4) |
|
3,545 |
Other |
|
485 |
|
1,833 |
(3) |
278 |
|
n/a |
|
570 |
|
(587) |
|
3,374 |
|
4,136 |
(2) |
(5) |
|
7,505 |
Total current liabilities |
|
4,609 |
|
3,939 |
|
2,294 |
|
n/a |
|
2,595 |
|
2,158 |
|
23,060 |
|
4,329 |
|
(113) |
|
27,276 |
Total equity and liabilities |
|
7,602 |
|
5,002 |
|
2,970 |
|
n/a |
|
5,270 |
|
71,360 |
|
104,196 |
|
4,015 |
|
(140) |
|
108,071 |
Consolidated Financial Statements 2023 |
F-30 |
1.9 Simplified statement of cash flows on telecommunication and Mobile Financial Services activities
|
|
2023 |
|
||||||
|
|
Telecom |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
|
activities |
|
Financial |
|
telecom |
|
Consoli- |
|
|
|
|
|
Services |
|
activities / |
|
dated Financial |
|
|
|
|
|
|
|
mobile financial |
|
Statements |
|
(in millions of euros) |
|
|
|
|
|
services |
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
3,198 |
|
(307) |
|
— |
|
2,892 |
|
Non-monetary items and reclassified items for presentation |
|
12,755 |
|
216 |
|
1 |
|
12,971 |
|
Changes in working capital and operating banking activities |
|
319 |
|
(327) |
|
— |
|
(8) |
|
Decrease (increase) in inventories, gross |
|
(84) |
|
— |
|
— |
|
(84) |
|
Decrease (increase) in trade receivables, gross |
|
341 |
|
92 |
|
9 |
|
441 |
|
Increase (decrease) in trade payables |
|
18 |
|
(109) |
|
(9) |
|
(100) |
|
Changes in other customer contract assets and liabilities |
|
(102) |
|
— |
|
— |
|
(103) |
|
Changes in other assets and liabilities |
|
147 |
|
(310) |
|
— |
|
(163) |
|
Other net cash out |
|
(3,792) |
|
(8) |
|
(1) |
|
(3,801) |
|
Operating taxes and levies paid |
|
(1,671) |
|
(9) |
|
— |
|
(1,680) |
|
Dividends received |
|
44 |
|
— |
|
— |
|
44 |
|
Interest paid and interest rates effects on derivatives, net |
|
(1,036) |
(1) |
1 |
|
(1) |
|
(1,035) |
|
Income tax paid |
|
(1,128) |
|
(1) |
|
— |
|
(1,129) |
|
Net cash provided by operating activities (a) |
|
12,480 |
(2) |
(426) |
|
— |
|
12,054 |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Purchases (sales) of property, plant and equipment and intangible assets (3) |
|
(7,594) |
|
(36) |
|
— |
|
(7,630) |
|
Purchases of property, plant and equipment and intangible assets |
|
(7,797) |
|
(33) |
|
— |
|
(7,829) |
|
Increase (decrease) in fixed assets payables |
|
(129) |
|
(3) |
|
— |
|
(133) |
|
Investing donations received in advance |
|
16 |
|
— |
|
— |
|
16 |
|
Sales of property, plant and equipment and intangible assets |
|
316 |
|
— |
|
— |
|
316 |
|
Cash paid for investment securities, net of cash acquired |
|
(1,416) |
|
— |
|
— |
|
(1,416) |
|
Investments in associates and joint ventures |
|
(38) |
|
— |
|
— |
|
(38) |
|
Purchases of equity securities measured at fair value |
|
(46) |
|
— |
|
— |
|
(46) |
|
Proceeds from sales of investment securities, net of cash transferred |
|
34 |
|
— |
|
— |
|
34 |
|
Other proceeds from sales of investment securities at fair value |
|
3 |
|
— |
|
— |
|
3 |
|
Other decrease (increase) in securities and other financial assets |
|
1,760 |
|
324 |
|
1 |
|
2,085 |
|
Net cash used in investing activities (b) |
|
(7,297) |
|
288 |
|
1 |
|
(7,008) |
|
Financing activities |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Medium and long-term debt issuances |
|
1,442 |
|
— |
|
— |
|
1,442 |
|
Medium and long-term debt redemptions and repayments |
|
(2,595) |
(4) |
— |
|
— |
|
(2,595) |
|
Increase (decrease) of bank overdrafts and short-term borrowings |
|
164 |
|
(107) |
|
(1) |
|
56 |
|
Decrease (increase) of cash collateral deposits |
|
(470) |
|
4 |
|
— |
|
(466) |
|
Exchange rates effects on derivatives, net |
|
5 |
|
— |
|
— |
|
5 |
|
Other cash flows |
|
|
|
|
|
|
|
|
|
Repayments of lease liabilities |
|
(1,652) |
|
(4) |
|
— |
|
(1,657) |
|
Subordinated notes issuances (purchases) and other related fees |
|
177 |
|
— |
|
— |
|
177 |
|
Coupon on subordinated notes |
|
(177) |
|
— |
|
— |
|
(177) |
|
Proceeds (purchases) from treasury shares |
|
(15) |
|
— |
|
— |
|
(15) |
|
Capital increase (decrease) - non-controlling interests |
|
2 |
|
— |
|
— |
|
2 |
|
Capital increase (decrease) - telecom activities / mobile financial services (5) |
|
(200) |
|
200 |
|
— |
|
— |
|
Changes in ownership interests with no gain / loss of control |
|
(9) |
|
— |
|
— |
|
(9) |
|
Dividends paid to owners of the parent company |
|
(1,862) |
|
— |
|
— |
|
(1,862) |
|
Dividends paid to non-controlling interests |
|
(368) |
|
— |
|
— |
|
(368) |
|
Net cash used in financing activities (c) |
|
(5,557) |
|
93 |
|
(1) |
|
(5,465) |
|
Cash change in cash and cash equivalents (a) + (b) + (c) |
|
(374) |
|
(45) |
|
— |
|
(419) |
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents in the opening balance |
|
5,846 |
|
158 |
|
— |
|
6,004 |
|
Cash change in cash and cash equivalents |
|
(374) |
|
(45) |
|
— |
|
(419) |
|
Non-cash change in cash and cash equivalents(6) |
|
32 |
|
— |
|
— |
|
32 |
|
Cash and cash equivalents in the closing balance |
|
5,504 |
|
113 |
|
— |
|
5,618 |
|
Consolidated Financial Statements 2023 |
F-31 |
|
|
2022 |
|
||||||
|
|
Telecom |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
|
activities |
|
Financial |
|
telecom |
|
Consoli- |
|
|
|
|
|
Services |
|
activities / |
|
dated Financial |
|
|
|
|
|
|
|
mobile financial |
|
Statements |
|
(in millions of euros) |
|
|
|
|
|
services |
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
2,810 |
|
(194) |
|
— |
|
2,617 |
|
Non-monetary items and reclassified items for presentation |
|
13,283 |
|
14 |
|
1 |
|
13,298 |
|
Changes in working capital and operating banking activities |
|
(284) |
|
(508) |
|
1 |
|
(792) |
|
Decrease (increase) in inventories, gross |
|
(108) |
|
— |
|
— |
|
(108) |
|
Decrease (increase) in trade receivables, gross |
|
(209) |
|
(39) |
|
(41) |
|
(289) |
|
Increase (decrease) in trade payables |
|
260 |
|
(4) |
|
41 |
|
297 |
|
Changes in other customer contract assets and liabilities |
|
(26) |
|
— |
|
1 |
|
(26) |
|
Changes in other assets and liabilities |
|
(201) |
|
(465) |
|
— |
|
(666) |
|
Other net cash out |
|
(3,889) |
|
1 |
|
(1) |
|
(3,889) |
|
Operating taxes and levies paid |
|
(1,907) |
|
1 |
|
— |
|
(1,906) |
|
Dividends received |
|
13 |
|
— |
|
— |
|
13 |
|
Interest paid and interest rates effects on derivatives, net |
|
(962) |
(1) |
— |
|
(1) |
|
(963) |
|
Income tax paid |
|
(1,033) |
|
— |
|
— |
|
(1,033) |
|
Net cash provided by operating activities (a) |
|
11,921 |
(2) |
(686) |
|
— |
|
11,235 |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Purchases (sales) of property, plant and equipment and intangible assets(3) |
|
(8,251) |
|
(31) |
|
— |
|
(8,282) |
|
Purchases of property, plant and equipment and intangible assets |
|
(8,742) |
|
(35) |
|
— |
|
(8,777) |
|
Increase (decrease) in fixed assets payables |
|
165 |
|
5 |
|
— |
|
170 |
|
Investing donations received in advance |
|
1 |
|
— |
|
— |
|
1 |
|
Sales of property, plant and equipment and intangible assets |
|
324 |
|
— |
|
— |
|
324 |
|
Cash paid for investment securities, net of cash acquired |
|
(57) |
|
— |
|
— |
|
(58) |
|
Investments in associates and joint ventures |
|
(10) |
|
— |
|
— |
|
(10) |
|
Purchases of equity securities measured at fair value |
|
(34) |
|
— |
|
— |
|
(34) |
|
Proceeds from sales of investment securities, net of cash transferred |
|
12 |
|
— |
|
— |
|
12 |
|
Other proceeds from sales of investment securities at fair value |
|
5 |
|
— |
|
— |
|
5 |
|
Other decrease (increase) in securities and other financial assets |
|
(2,289) |
|
206 |
|
2 |
|
(2,081) |
|
Net cash used in investing activities (b) |
|
(10,625) |
|
175 |
|
2 |
|
(10,448) |
|
Financing activities |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Medium and long-term debt issuances |
|
1,809 |
|
— |
|
— |
|
1,809 |
|
Medium and long-term debt redemptions and repayments |
|
(1,088) |
(4) |
— |
|
— |
|
(1,088) |
|
Increase (decrease) of bank overdrafts and short-term borrowings |
|
(367) |
|
(32) |
|
(2) |
|
(400) |
|
Decrease (increase) of cash collateral deposits |
|
673 |
|
99 |
|
— |
|
771 |
|
Exchange rates effects on derivatives, net |
|
(91) |
|
— |
|
— |
|
(91) |
|
Other cash flows |
|
|
|
|
|
|
|
|
|
Repayments of lease liabilities |
|
(1,514) |
|
(4) |
|
— |
|
(1,519) |
|
Subordinated notes issuances (purchases) and other related fees |
|
(451) |
|
— |
|
— |
|
(451) |
|
Coupon on subordinated notes |
|
(213) |
|
— |
|
— |
|
(213) |
|
Proceeds (purchases) from treasury shares |
|
14 |
|
— |
|
— |
|
14 |
|
Capital increase (decrease) – non-controlling interests |
|
— |
|
— |
|
— |
|
— |
|
Capital increase (decrease) - telecom activities / mobile financial services (5) |
|
(173) |
|
173 |
|
— |
|
— |
|
Changes in ownership interests with no gain / loss of control |
|
(11) |
|
— |
|
— |
|
(11) |
|
Dividends paid to owners of the parent company |
|
(1,861) |
|
— |
|
— |
|
(1,861) |
|
Dividends paid to non-controlling interests |
|
(304) |
|
— |
|
— |
|
(304) |
|
Net cash used in financing activities (c) |
|
(3,577) |
|
236 |
|
(2) |
|
(3,343) |
|
Cash change in cash and cash equivalents (a) + (b) + (c) |
|
(2,281) |
|
(275) |
|
— |
|
(2,556) |
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents in the opening balance |
|
8,188 |
|
433 |
|
— |
|
8,621 |
|
Cash change in cash and cash equivalents |
|
(2,281) |
|
(275) |
|
— |
|
(2,556) |
|
Non-cash change in cash and cash equivalents (6) |
|
(61) |
|
— |
|
— |
|
(61) |
|
Cash and cash equivalents in the closing balance |
|
5,846 |
|
158 |
|
— |
|
6,004 |
|
Consolidated Financial Statements 2023 |
F-32 |
|
|
2021 |
||||||
|
|
Telecom |
|
Mobile |
|
Eliminations |
|
Orange |
|
|
activities |
|
Financial |
|
telecom |
|
Consoli- |
|
|
|
|
Services |
|
activities / |
|
dated |
|
|
|
|
|
|
mobile financial |
|
Financial |
(in millions of euros) |
|
|
|
|
|
services |
|
Statements |
Operating activities |
|
|
|
|
|
|
|
|
Consolidated net income |
|
958 |
|
(181) |
|
— |
|
778 |
Non-monetary items and reclassified items for presentation |
|
14,504 |
|
86 |
|
1 |
|
14,592 |
Changes in working capital and operating banking activities |
|
119 |
|
(297) |
|
— |
|
(178) |
Decrease (increase) in inventories, gross |
|
(126) |
|
— |
|
— |
|
(126) |
Decrease (increase) in trade receivables, gross |
|
37 |
|
(21) |
|
47 |
|
64 |
Increase (decrease) in trade payables |
|
47 |
|
37 |
|
(47) |
|
36 |
Changes in other customer contract assets and liabilities |
|
140 |
|
— |
|
— |
|
140 |
Changes in other assets and liabilities |
|
21 |
|
(313) |
|
— |
|
(292) |
Other net cash out |
|
(3,947) |
|
(8) |
|
(1) |
|
(3,956) |
Operating taxes and levies paid |
|
(1,874) |
|
(6) |
|
— |
|
(1,880) |
Dividends received |
|
12 |
|
— |
|
— |
|
12 |
Interest paid and interest rates effects on derivatives, net |
|
(1,130) |
(1) |
(3) |
|
(1) |
|
(1,134) |
Income tax paid |
|
(955) |
|
1 |
|
— |
|
(954) |
Net cash provided by operating activities (a) |
|
11,636 |
(2) |
(399) |
|
— |
|
11,236 |
Investing activities |
|
|
|
|
|
|
|
|
Purchases (sales) of property, plant and equipment and intangible assets(3) |
|
(8,557) |
|
(23) |
|
— |
|
(8,580) |
Purchases of property, plant and equipment and intangible assets |
|
(8,725) |
|
(24) |
|
— |
|
(8,749) |
Increase (decrease) in fixed assets payables |
|
(73) |
|
1 |
|
— |
|
(72) |
Investing donations received in advance |
|
24 |
|
— |
|
— |
|
24 |
Sales of property, plant and equipment and intangible assets |
|
217 |
|
— |
|
— |
|
217 |
Cash paid for investment securities, net of cash acquired |
|
(210) |
|
(1) |
|
— |
|
(211) |
Investments in associates and joint ventures |
|
(3) |
|
— |
|
— |
|
(3) |
Purchases of equity securities measured at fair value |
|
(75) |
|
— |
|
— |
|
(76) |
Proceeds from sales of investment securities, net of cash transferred |
|
891 |
|
— |
|
— |
|
891 |
Other proceeds from sales of investment securities at fair value |
|
95 |
|
— |
|
— |
|
95 |
Other decrease (increase) in securities and other financial assets |
|
1,632 |
|
274 |
|
2 |
|
1,908 |
Net cash used in investing activities (b) |
|
(6,227) |
|
249 |
|
2 |
|
(5,976) |
Financing activities |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Medium and long-term debt issuances |
|
2,523 |
|
27 |
|
(27) |
|
2,523 |
Medium and long-term debt redemptions and repayments |
|
(4,572) |
(4) |
(27) |
|
27 |
|
(4,572) |
Increase (decrease) of bank overdrafts and short-term borrowings |
|
1,148 |
|
(3) |
|
(2) |
|
1,143 |
Decrease (increase) of cash collateral deposits |
|
973 |
|
15 |
|
— |
|
988 |
Exchange rates effects on derivatives, net |
|
201 |
|
— |
|
— |
|
201 |
Other cash flows |
|
|
|
|
|
|
|
|
Repayments of lease liabilities |
|
(1,621) |
|
(4) |
|
— |
|
(1,625) |
Subordinated notes issuances (purchases) and other related fees |
|
(311) |
|
— |
|
— |
|
(311) |
Coupon on subordinated notes |
|
(238) |
|
— |
|
— |
|
(238) |
Proceeds (purchases) from treasury shares |
|
(199) |
|
— |
|
— |
|
(199) |
Capital increase (decrease) - non-controlling interests |
|
1 |
|
4 |
|
— |
|
5 |
Capital increase (decrease) - telecom activities / mobile financial services (5) |
|
(317) |
|
317 |
|
— |
|
— |
Changes in ownership interests with no gain / loss of control |
|
(403) |
|
— |
|
— |
|
(403) |
Dividends paid to owners of the parent company |
|
(2,127) |
|
— |
|
— |
|
(2,127) |
Dividends paid to non-controlling interests |
|
(218) |
|
— |
|
— |
|
(218) |
Net cash used in financing activities (c) |
|
(5,160) |
|
328 |
|
(2) |
|
(4,834) |
Cash change in cash and cash equivalents (a) + (b) + (c) |
|
249 |
|
177 |
|
— |
|
427 |
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
Cash and cash equivalents in the opening balance |
|
7,891 |
|
254 |
|
— |
|
8,145 |
Cash change in cash and cash equivalents |
|
249 |
|
177 |
|
— |
|
427 |
Non-cash change in cash and cash equivalents (6) |
|
48 |
|
2 |
|
— |
|
50 |
Cash and cash equivalents in the closing balance |
|
8,188 |
|
433 |
|
— |
|
8,621 |
(1) | Including interests paid on lease liabilities for (247) million euros in 2023, (141) million euros in 2022 and (119) million euros in 2021 and interests paid on debt related to financed assets for (14) million euros in 2023, (3) million euros in 2022 and (1) million euros in 2021. |
(2) | Including significant litigation paid and received for (23) million euros in 2023, (20) million euros in 2022 and (306) million euros in 2021. |
(3) | Including telecommunication licenses paid for (521) million euros in 2023, (981) million euros in 2022 and (717) million euros in 2021. |
(4) | Including repayment of debt related to financed assets for (117) million euros in 2023, (97) million euros in 2022 and (80) million euros in 2021. |
(5) | Including Orange Bank's share capital invested by Orange group for 200 million euros in 2023, 150 million euros in 2022 and 300 million euros in 2021. |
(6) | Of which effect of exchange rates changes and other non-monetary effects. |
Consolidated Financial Statements 2023 |
F-33 |
The table below shows the reconciliation between net cash provided by operating activities (telecom activities), as shown in the simplified statement of cash flows, and organic cash flow from telecom activities.
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net cash provided by operating activities (telecom activities) |
|
12,480 |
|
11,921 |
|
11,636 |
Purchases (sales) of property, plant and equipment and intangible assets |
|
(7,594) |
|
(8,251) |
|
(8,557) |
Repayment of lease liabilities |
|
(1,652) |
|
(1,514) |
|
(1,621) |
Repayment of debt related to financed assets |
|
(117) |
|
(97) |
|
(80) |
Elimination of telecommunication licenses paid |
|
521 |
|
981 |
|
717 |
Elimination of significant litigation paid (and received) |
|
23 |
|
20 |
|
306 |
Organic cash flow from telecom activities |
|
3,661 |
|
3,058 |
|
2,401 |
The table below shows the reconciliation between net cash provided by operating activities (telecom activities), as shown in the simplified statement of cash flows, and free cash flow all-in from telecom activities.
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net cash provided by operating activities (telecom activities)(1) |
|
12,480 |
|
11,921 |
|
11,636 |
Purchases (sales) of property, plant and equipment and intangible assets |
|
(7,594) |
|
(8,251) |
|
(8,557) |
o/w telecommunication licenses paid |
|
(521) |
|
(981) |
|
(717) |
Repayment of lease liabilities |
|
(1,652) |
|
(1,514) |
|
(1,621) |
Repayment of debt related to financed assets |
|
(117) |
|
(97) |
|
(80) |
Payment of coupons on subordinated notes(2) |
|
(177) |
|
(213) |
|
(238) |
Free cash flow all-in from telecom activities |
|
2,940 |
|
1,845 |
|
1,140 |
(1) | The net cash provided by operating activities of telecom activities includes significant litigation paid for (23) million euros in 2023 ((20) million euros in 2022 and (306) million euros in 2021). |
(2) | See Note 15.4. |
1.10 Definition of operating segments and performance indicators
Accounting policies
Segment information
Decisions regarding the allocation of resources and the assessment of the performance of Orange (hereinafter referred to as “the Group”) are made by the Chief Executive Officer (main operational decision-maker) at business segment level, mainly consisting of the geographical establishments.
The business segments are:
– France (excluding Orange Business);
– Spain and each of the Other European countries (including the Poland, Belgium and Luxembourg business segments and each of the Central European countries). The Europe aggregate thus includes all the business segments in this region;
– the Sonatel sub-group (grouping together Sonatel in Senegal, Orange Mali, Orange Bissau, Orange in Guinea and Orange in Sierra Leone), the Côte d’Ivoire sub-group (including the Orange Côte d’Ivoire entities, Orange in Burkina Faso and Orange in Liberia) and each of the other countries in Africa & Middle East. The Africa & Middle East aggregate thus presents all the business segments in this region;
– Orange Business, which combines communication solutions and services as well as integration and information technology services for businesses in France and around the world (including the cybersecurity activity);
– Totem, which combines the activities of the European TowerCo and operates a portfolio of some 27,000 tower sites in France and Spain;
– International Carriers & Shared Services (IC&SS) activities, which includes certain resources, mainly in the areas of networks, information systems, Research and Development and other shared Group activities, as well as the Orange brand;
– Mobile Financial Services, which includes Orange Bank.
The use of shared resources, mainly provided by International Carriers & Shared Services, is taken into account in segment results based either on the terms of contractual agreements between legal entities, external benchmarks or by reallocating costs among the segments. The supply of shared resources is included in the other income of the service provider, and the use of these resources is included in the expenses of the service user. The cost of shared resources may be affected by changes in contractual relationships or organization and may therefore impact the segment results presented from one fiscal year to another.
Operating performance indicators
EBITDAaL and eCAPEX are the key operating performance indicators used by the Group to:
◾ | manage and assess its operating and segment results; and |
◾ | implement its investment and resource allocation strategy. |
The Group’s management believes that the presentation of these indicators is relevant as it provides readers with the same management indicators as those used internally.
EBITDAaL relates to operating income before depreciation and amortization of fixed assets, effects resulting from takeovers, impairment of goodwill and fixed assets, share of profits (losses) of associates and joint ventures, and after interest on lease liabilities and on debt relating to financed assets, adjusted for:
– significant litigation effects;
– specific labor expenses;
Consolidated Financial Statements 2023 |
F-34 |
– review of fixed assets, investments and business portfolio;
– restructuring programs costs;
– acquisition and integration costs;
– where appropriate, other specific items.
This measurement indicator allows for the effects of certain specific factors to be isolated, irrespective of their recurrence and the type of income and expense, when they are linked to:
– significant litigation: significant litigation expenses relate to risk reassessments regarding various disputes. The associated procedures are based on third-party decisions (regulatory authority, court, etc.) and occur over a different period from the activities at the source of the litigation. Costs are by nature difficult to predict in terms of their source, amount and period;
– specific labor expenses: irrespective of any departure plans included in restructuring programs costs, certain employee working time adjustment programs have a negative impact on the period in which they are signed and implemented. Specific labor expenses also relate to changes in assumptions and experience effects for the various part-time for seniors plans in France;
– review of fixed assets, investments and business portfolio: the Group conducts an ongoing review of its fixed assets, investments and business portfolio. In this context, exit or disposal decisions are implemented and, by their nature, have an impact on the period in which they take place;
– restructuring programs costs: the adaptation of the Group’s activities to changes in the environment may generate costs related to the shutdown or major transformation of an activity. These costs, linked to the cessation or major transformation of an activity, mainly consist of employee departure plans, contract terminations and costs in respect of contracts that have become onerous;
– acquisition and integration costs: the Group incurs costs directly related to the acquisition of entities and their integration in the months following their acquisition. These are primarily fees, registration costs and earn-outs;
– where appropriate, other specific items that are systematically specified in relation to income and/or expenses.
EBITDAaL is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups. It is provided as additional information only and should not be considered a substitute for operating income or cash flows provided by operating activities.
eCAPEX relates to acquisitions of property, plant and equipment and intangible assets excluding telecommunication licenses and financed assets, minus the price of disposal of fixed assets. It is used internally as an indicator to allocate resources. eCAPEX is not a financial indicator defined by IFRS and may not be comparable to similarly titled indicators used by other companies.
The Group uses organic cash flow from telecom activities as an operating performance measure for telecom activities as a whole. Organic cash flow from telecom activities relates to net cash flows provided by telecom activities minus (i) repayment of lease liabilities and debt related to financed assets, (ii) purchases and sales of property, plant and equipment and intangible assets, net of the change in fixed asset payables, (iii) excluding the effect of telecommunication licenses paid and significant litigation paid (and received). Organic cash flow is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups.
The Group uses free cash flow all-in from telecom activities as an operating performance measure for telecom activities as a whole. Free cash flow all-in from telecom activities relate to net cash provided by telecom activities minus (i) repayment of lease liabilities and debt relating to financed assets, (ii) purchases and sales of property, plant and equipment and intangible assets, net of the change in fixed asset payables, and (iii) payments of coupons on subordinated notes. Free cash flow all-in from telecom activities is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups.
Assets and liabilities
Inter-segment assets and liabilities are reported in each business segment.
Non-allocated assets and liabilities of telecom activities mainly include external financial debt, external cash and cash equivalents, current and deferred tax assets and liabilities and equity. Financial debt and investments between these segments are presented as unallocated items.
For Mobile Financial Services, the line “Other” includes the assets and liabilities listed above as well as loans and receivables and payables related to Mobile Financial Services transactions.
The other accounting policies are presented within each note to which they refer.
Note 2 Description of business and basis of preparation of the Consolidated Financial Statements
2.1 Description of business
Orange provides B2C and B2B customers and other telecommunication operators with a wide range of connectivity services, including fixed telephony, mobile telecommunication, data transmission and other value-added services, including Mobile Financial Services. In addition to its role as a supplier of connectivity, the Group provides enterprise services, primarily solutions in the fields of digital work, security and improving business line processes.
Consolidated Financial Statements 2023 |
F-35 |
Telecommunication operator activities are regulated and dependent upon the granting of licenses, just as Mobile Financial Services activities have their own regulations.
2.2 Basis of preparation of the financial statements
The Consolidated Financial Statements were approved by the Board of Directors at its meeting of February 14, 2024 and will be submitted for approval by the Shareholders' Meeting on May 22, 2024.
The 2023 Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union. Comparative figures are presented for 2022 and 2021 using the same basis of preparation.
The data are presented in millions of euros, without a decimal. Rounding to the nearest million may in some cases lead to non-significant discrepancies in the totals and subtotals shown in the tables.
For the reported periods, the accounting standards and interpretations endorsed by the European Union are similar to the compulsory standards and interpretations published by the International Accounting Standards Board (IASB) with the exception of the texts currently being endorsed, that have no effect on the Group’s financial statements. Consequently, the Group’s financial statements are prepared in accordance with the IFRS standards and interpretations, as published by the IASB.
The principles applied to prepare the 2023 financial data are based on:
– all the standards and interpretations endorsed by the European Union that were compulsory at December 31, 2023;
– the options taken relating to the date and methods of first-time adoption (see 2.3 below);
– the recognition and measurement options allowed under IFRS:
Standard |
|
Alternative used |
|
IAS 1 |
Accretion expense on operating liabilities (employee benefits, environmental liabilities and licenses) |
Classification as financial expenses |
|
IAS 2 |
Inventories |
Measurement of inventories according to the weighted average unit cost method |
|
IAS 7 |
Interest paid and dividends received |
Classification as net cash provided by operating activities |
|
IAS 16 |
Property, plant and equipment |
Measurement at amortized historical cost |
|
IAS 38 |
Intangible assets |
Measurement at amortized historical cost |
|
IFRS 3 |
Non-controlling interests |
At the acquisition date, measurement either at fair value or according to the portion of the identifiable net assets of the acquired entity |
– accounting positions adopted by the Group in accordance with paragraphs 10 to 12 of IAS 8:
Topic |
|
Note |
Presentation of Consolidated Financial Statements |
|
Financial statements and segment information |
Operating taxes and levies payables |
|
10.1 |
Income taxes |
|
10.2 |
Non-controlling interests: |
|
|
change in ownership interest in a subsidiary and transactions with owners |
|
3 and 15.6 |
In the absence of any accounting standard or interpretation applicable to a specific transaction or event, the Group's management uses its judgment to define and apply an accounting policy that will result in relevant and reliable information, such that the financial statements:
– present a true and fair view of the Group’s financial position, financial performance and cash flows;
– reflect the economic substance of transactions;
– are neutral;
– are prepared on a prudent basis; and
– are complete in all material respects.
2.3 New standards and interpretations applied from January 1, 2023
Only the amendments of the standards applicable to the Group whose effective date is January 1, 2023 are described below.
2.3.1 Amendment to IAS 1: Disclosure of accounting policies
The amendment to the standard indicates that an entity must now disclose their material accounting policies rather than their significant accounting policies. This amendment only marginally changes the information provided by the Group in its notes to the annual Consolidated Financial Statements.
2.3.2 Amendment to IAS 8: Definition of accounting estimates
The amendment to the standard revised the definition of accounting estimates without changing the concept. The implementation of this amendment has had no impact on the Group’s Consolidated Financial Statements and should only marginally change the information provided by the Group in its notes to the annual Consolidated Financial Statements.
Consolidated Financial Statements 2023 |
F-36 |
2.3.3 Amendment to IAS 12: Deferred tax related to assets and liabilities acquired through a single transaction
The amendment introduces a new exception to the exemption from the initial recognition of deferred taxes. As a result of this amendment, an entity does not apply the initial recognition exemption for transactions that give rise to deductible and taxable temporary differences of identical amounts.
Under applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition of an asset and a liability in a transaction that is not a business combination and that affects neither accounting profit nor taxable profit. For example, this may occur when the lease liability and the corresponding right-of-use asset are recognized under IFRS 16 at the inception of a lease. The Group’s accounting policies were already aligned with the proposals of the amendment.
2.3.4 Amendment to IAS 12: International tax reform – Pillar Two model rules
Amendments have been made to IAS 12 in response to the OECD’s “Pillar Two” reform of international taxation, which mainly aims to establish a minimum tax rate of 15%, to be applied in France from the 2024 fiscal year.
This amendment includes:
– a temporary, mandatory exception for the recognition of deferred tax resulting from the implementation of this Pillar Two reform; and
– various disclosures to be made prior to the implementation of this reform in order to inform users of the financial statements of the Group’s exposure to the consequences of its implementation.
The Group has launched a working group to identify the consequences and organize the processes needed to comply with this tax reform. Given the current progress of the work done by the Group and the regulations of the countries in which the Group operates, the financial consequences are expected to be limited (see Note 10.4).
2.3.5 IFRS 17 and amendments to IFRS 9: Insurance Contracts
The Group is not subject to the provisions of the new IFRS 17 on the recognition and measurement of insurance contracts. The amendments to IFRS 9 propose provisions enabling the disclosure of comparative information to companies adopting IFRS 17 for the first time.
2.4 Standards and interpretations compulsory after December 31, 2023 with no early adoption
2.4.1 Amendment to IAS 21: Lack of exchangeability
IAS 21 has been amended to specify how to assess whether a currency is exchangeable or not and how to determine the exchange rate when it is not. As the Group does not operate in countries with non-exchangeable currencies, the implementation of this amendment is not expected to have any impact. The date of entry into force of this amendment is January 1, 2025.
2.4.2 Amendment to IAS 7 and IFRS 7: Reverse factoring - Supplier finance arrangements
The amendment to the two standards is added to the list of disclosures, with a specific focus on reverse factoring transactions. This amendment should only marginally change the information provided by the Group in its notes to the Consolidated Financial Statements, as such factoring transactions are already described in the Group’s notes to the Consolidated Financial Statements. The date of entry into force of this amendment is January 1, 2024.
2.4.3 Amendment to IAS 1: Classification of liabilities as current or non-current
The amendment to the standard sets out new provisions for assessing the presentation of a liability in the balance sheet at the reporting date, based on conditions that might make the liability payable within the 12 months following the reporting date. This amendment is not expected to have any impact on the Group’s Consolidated Financial Statements and is only expected to marginally change the information provided by the Group in its notes to the Consolidated Financial Statements. The date of entry into force of this amendment is January 1, 2024.
2.4.4 Amendment to IFRS 16: Lease liability in a sale and leaseback
The amendment clarifies the accounting treatment of changes in the lease liability arising from the sale of an asset followed by the leaseback of the asset at variable rents. This amendment does not change the initial accounting treatment of the lease liability, but specifies that in the event of subsequent changes in rents, the difference between the rent actually paid and the reduction in the liability is recognized in the income statement. The Group does not expect the implementation of this amendment to have a significant impact, as sale and leaseback transactions are not common within the Group. The provisions of this amendment will apply as of January 1, 2024.
Consolidated Financial Statements 2023 |
F-37 |
2.5 Accounting policies, use of judgment and estimates
The accounting policies are presented within each note to which they refer. In summary:
Note |
Topic |
Accounting policies |
Judgments and |
1 |
Segment information |
X |
|
3 |
Changes in the scope of consolidation, takeovers (business combinations), internal transfer of consolidated shares, assets held for sale |
X |
X |
4.1 |
Revenue |
X |
X |
4.3 |
Trade receivables |
X |
X |
4.4 |
Customer contract net assets and liabilities, costs of obtaining a contract and costs to fulfill a contract, unfulfilled performance obligations |
X |
X |
4.5 |
Submarine cable consortiums, Orange Money |
X |
|
5.1 |
Advertising, promotion, sponsoring, communication and brand marketing costs |
X |
|
5.2 |
Litigation, acquisition and integration costs |
X |
X |
5.3 |
Restructuring costs |
X |
X |
5.4 |
Broadcasting rights and equipment inventories |
X |
|
5.6 |
Trade payables (goods and services) |
X |
X |
6.2 |
Employee benefits |
X |
X |
6.3 |
Employee share-based compensation |
X |
|
7 |
Goodwill, impairment of goodwill |
X |
X |
8.2 |
Depreciation and amortization |
X |
|
8.3 |
Impairment of fixed assets |
X |
X |
8.4 |
Other intangible assets |
X |
X |
8.5 |
Property,plant and equipment |
X |
X |
8.6 |
Fixed assets payables |
X |
X |
8.7 |
Dismantling provisions |
X |
X |
9 |
Leases |
X |
X |
9.1 |
Right-of-use assets |
X |
|
9.2 |
Lease liabilities |
X |
X |
10.1 |
Operating taxes and levies |
X |
X |
10.2 |
Income taxes |
X |
X |
11 |
Interests in associates and joint ventures |
X |
X |
12 |
Related-party transactions |
X |
|
13.3 |
Net financial debt |
X |
X |
13.3 |
Cash and cash equivalents, bonds, bank loans and loans from multilateral lending institutions |
X |
|
13.4 |
Perpetual bonds redeemable for shares (TDIRA) |
X |
X |
13.7 |
Financial assets (telecom activities) |
X |
X |
13.8 |
Derivatives (telecom activities) |
X |
|
14.8 |
Fair value of financial assets and liabilities (telecom activities) |
X |
X |
15.2 |
Treasury shares |
X |
|
15.4 |
Subordinated notes, equity component of perpetual bonds redeemable for shares (TDIRA) |
X |
X |
15.5 |
Translation adjustments |
X |
|
15.6 |
Non-controlling interests |
X |
|
15.7 |
Earnings per share |
X |
|
17.1 |
Financial assets and liabilities of Mobile Financial Services |
X |
|
17.1.1 |
Financial assets related to Orange Bank activities |
X |
X |
17.2.7 |
Fair value of financial assets and liabilities of Orange Bank |
X |
|
18 |
Litigation |
X |
|
20 |
Scope |
|
X |
(1) | See Notes 2.5.1 and 2.5.2 |
Consolidated Financial Statements 2023 |
F-38 |
2.5.1 Use of judgment
In addition to the alternatives or accounting positions mentioned above in 2.2, Management exercises judgment in order to define the accounting policies for certain transactions:
Topic |
|
Nature of accounting judgment |
Notes 3 and 20 |
Control |
Exercise of judgment in certain circumstances with respect to the existence or not of control Continuous control assessment which can affect the scope of consolidation, as for instance when a shareholders’ agreement is revised or terminated, or when protective rights turn into substantive rights |
Note 4 |
Sales |
Splitting transaction price between mobile and service Identification of distinct or non-distinct performance obligations |
Notes 5, 10 and 18 |
Purchases and other expenses, tax and litigation |
Litigation (including tax disputes and audits): measurement of technical merits of the interpretations and legislative positions and qualification of the facts and circumstances Onerous supplier contracts: trigger event, nature of unavoidable costs |
Note 5 |
Purchases and other expenses |
Reverse factoring: distinguishing operating debt and financial debt |
Note 8 |
Fixed assets |
Qualifying network, sites or equipment sharing among operators as joint operations |
Note 9 |
Leases |
Determination of the non-cancellable lease term and assessment of the exercise or not of termination, extension and purchase option Separation of service and lease components of leases "TowerCos" arrangements: electing the unit of account (tower or used space) and analyzing the arrangements in order to determine whether they contain a lease |
Notes 13 and 15 |
Financial assets, liabilities and financial results (telecom activities) Equity |
Distinguishing equity and debt: assessing specific contractual clauses |
2.5.2 Use of estimates
In preparing the Group's financial statements, Orange's management makes estimates, insofar as many elements included in the financial statements cannot be measured precisely. Management revises these estimates if the underlying circumstances evolve or in light of new information or more experience. Consequently, the estimates made at December 31, 2023 may subsequently be changed.
Topic |
|
Key sources of estimates on future income and/or cash flows |
Notes 4, 14 and 17 |
Sales |
Deciding duration of legally binding rights and obligations |
Notes 5, 10 and 18 |
Risk of resources outflow linked to litigation (including tax disputes and audits) Onerous contracts |
Underlying assumptions of the assessment of legal and tax positions Identifying and releasing of uncertain legal and tax positions Underlying assumptions of the assessment |
Notes 7.3, 7.4, 8.3, 8.4, 8.5 and 11 |
Measurement of the recoverable values for the impairment tests (goodwill, property, plant and equipment and intangible assets interests in associates and joint ventures) |
Sensitivity to the discount rate, perpetual growth rate and business plan assumptions affecting expected cash flows (revenue, EBITDAaL and investments) Assessing the competitive, economic and financial environment of the countries where the Group operates |
Note 10.2 |
Measurement of the recoverable value of deferred tax assets |
Assessing the time frame for recovering deferred tax assets when a tax entity returns to profit or when tax legislation limits the use of tax loss carryforwards |
Note 8 |
Fixed assets |
Assessing the useful life of assets based on changes in the technological, regulatory or economic environment (notably the migration from the copper local loop into fiber and other greater bandwidth technologies, radio technology migration) Site dismantling and restoration provisions: dismantling time frame, discount rate, expected cost |
Note 9 |
Leases |
Determination of the incremental borrowing rate of the lease when the implied interest rate is not identifiable in the lease Determination of the term of certain leases |
Note 6.2 |
Employee benefits |
Sensitivity to discount rates |
Notes 14 and 17 |
Fair value of financial assets and liabilities |
Models, selection of parameters, fair value hierarchy, assessment of non-performance risks |
Furthermore, aside from the elements linked to the level of activity, income and future cash flows are sensitive to changes in financial market risks, notably interest rate and foreign exchange risks (see Note 14).
Consolidated Financial Statements 2023 |
F-39 |
2.5.3 Consideration of climate change risks
Natural disasters and other accidental events related to climate change, such as fires, could lead to significant destruction of the Orange group's facilities, resulting in both service interruptions and high repair costs. The frequency and intensity of weather events related to climate change (e.g. floods, storms and heat waves) continue to increase, which could aggravate claims and increase the related damage. In the medium term, rising sea levels could affect sites and facilities located near the coast more often. While coverage of claims by insurers could decrease further, the damage caused by major disasters could result in significant costs to Orange, some of which could be at the expense of the Orange group and thus affect its financial position and outlook.
The Group is therefore integrating climate change risks more systematically into its activities. This can be seen in the assessment of these risks on the value of some of its assets through their depreciation schedule or as an event that could lead to the identification of an impairment loss indicator or on the future prospects of obtaining financing. Consideration of climate risks is also reflected in the Group's commitment to be Net Zero Carbon by 2040. This commitment has led to changes in certain investment choices related to its activity.
Numerous projects have been initiated within the Group in order to understand the impacts of climate change on its operations. The implementation of actions to limit the effects of the Group's activities on climate change is also underway. The outcome of these projects could lead the Group to review certain accounting treatments, judgments or estimates of financial risks, the impact of which is still difficult to assess reliably. Climate resilience and adaptation are fast-growing topics and will require the Group to better assess the risks to which it is exposed. The Group has begun a process of analysis in order to diagnose the exposure to climate risks of its various geographic locations based on the study of various impact scenarios related to climate change. At December 31, 2023, the Group has not identified any reliably estimated material impact on its financial statements at the stage of completion of the projects in progress.
2.5.4 Changes in the macroeconomic environment
The judgment and estimates made by the Group also take into account the volatility of certain data linked to the complexity of the current macroeconomic context, and the Group has paid particular attention to:
– possible impacts on impairment testing, whether on changes in market data (discount rates, changes in inflation) or on the flows used;
– consequences of changes in market data on the valuation of certain Group assets and liabilities;
– changes to the list of countries whose economies are suffering from hyperinflation and the materiality of the restatements required by IAS 29;
– price volatility or the risk of supply difficulties in certain countries, particularly for electricity.
Note 3 Gains and losses on disposal and main changes in scope of consolidation
3.1 Gains (losses) on disposal of fixed assets, investments and activities
(in millions of euros) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
|
Gains (losses) on disposal of fixed assets |
|
8.1 |
|
91 |
|
159 |
|
52 |
|
Gains (losses) on disposal of investments and activities |
|
3.2 |
|
(1) |
|
74 |
|
2,455 |
(1) |
Gain (losses) on disposal of fixed assets, investments and activities |
|
|
|
90 |
|
233 |
|
2,507 |
|
(1) | Includes gains arising from the loss of exclusive control on Orange Concessions for 2,124 million euros and on the FiberCo in Poland for 340 million euros. |
3.2 Main changes in the scope of consolidation
Changes in the scope of consolidation during 2023
Takeover of VOO in Belgium
On June 2, 2023, Orange Belgium finalized the acquisition from Nethys of 75% of the capital minus one share of VOO for 1,369 million euros. VOO’s contribution is consolidated in the Group’s financial statements from this date.
This transaction is intended to support Orange Belgium’s national convergent strategy and is expected to generate significant synergies, mainly related to the transfer of VOO’s MVNO business to the Orange Belgium network.
At the end of the transaction, Nethys retains a minority interest in VOO and now has protective rights to ensure the completion of the industrial and social project.
A put option granted by Orange to Nethys on its stake in VOO, exercisable until June 2026, led to the recognition of a current financial liability of 279 million euros at the acquisition date, corresponding to the fair value of equity attributable to minority interests.
The transaction also gives Nethys the option of converting its stake in VOO into Orange Belgium shares until June 2025. If necessary, Nethys has a put option granted by Orange on these shares, exercisable until June 2026.
The Board of Directors of Nethys has announced its intention to convert its stake into Orange Belgium shares. This transaction is currently being analyzed by a committee of independent directors of Orange Belgium and remains subject to the opinion of the Board of Directors and the approval of the General Assembly of Orange Belgium.
Consolidated Financial Statements 2023 |
F-40 |
Following this process, Nethys could obtain an 11% stake in Orange Belgium and retain, once in the capital of Orange Belgium, the governance rights associated with its stake in VOO.
(in millions of euros) |
|
At acquisition date |
Acquisition cost, net of transaction costs |
|
1,369 |
Transaction costs |
|
24 |
Cash acquired |
|
(19) |
Cash paid for investment securities, net of cash acquired |
|
1,373 |
In accordance with IFRS 3 – Business Combinations the fair value measurement of the identifiable assets acquired and liabilities assumed was completed in the 2023 fiscal year. The purchase price allocation is as follows:
(in millions of euros) |
|
At acquisition date |
Purchase price related to the acquisition of the 75% share |
|
1,369 |
Fair value of the non-controlling interests |
|
279 |
Acquisition cost (a) |
|
1,648 |
Net book value acquired before purchase price allocation |
|
760 |
Effects of fair value measurement: |
|
|
Tangible assets |
|
152 |
Customer relationship |
|
114 |
Trademark |
|
16 |
Other intangibles |
|
(11) |
Net deferred tax |
|
(68) |
Net asset remeasured at fair value (b) |
|
964 |
Goodwill (a)-(b) |
|
684 |
Liability guarantees, which are customary in this type of transaction, were also granted to Orange (see Note 16.2 "Consolidation scope Commitments").
Below is VOO’s contribution to the Group’s consolidated statement of financial position at the acquisition date:
(in millions of euros) |
|
2023 |
Assets |
|
|
Goodwill |
|
684 |
Other intangible assets |
|
166 |
Property, plant and equipment |
|
1,132 |
Right-of-use assets |
|
30 |
Other |
|
8 |
Total non-current assets |
|
2,020 |
Inventories |
|
24 |
Trade receivables |
|
86 |
Cash and cash equivalents |
|
19 |
Other |
|
58 |
Total current assets |
|
187 |
Total assets |
|
2,207 |
(in millions of euros) |
|
2023 |
Equity and liabilities |
|
|
Total equity |
|
1,648 |
Non-current financial liabilities |
|
86 |
Non-current lease liabilities |
|
30 |
Deferred tax liabilities |
|
56 |
Other |
|
43 |
Total non-current liabilities |
|
214 |
Current financial liabilities |
|
119 |
Trade payables |
|
145 |
Operating taxes and levies payables |
|
31 |
Current taxes payables |
|
18 |
Other |
|
32 |
Total current liabilities |
|
345 |
Total equity and liabilities |
|
2,207 |
The contribution of VOO and its subsidiaries to the Group’s consolidated income statement at December 31, 2023, since its acquisition on June 2, 2023, is shown below:
(in millions of euros) |
|
2023 |
Revenue |
|
300 |
Operating income |
|
(18) |
Finance costs, net |
|
(6) |
Income taxes |
|
5 |
Consolidated net income |
|
(19) |
Consolidated Financial Statements 2023 |
F-41 |
Ongoing transactions at December 31, 2023
Decision of the European Commission expected by the end of February 2024 on the consolidation of the activities of Orange and MásMóvil in Spain
On July 23, 2022, Orange and MásMóvil have signed a binding agreement relating to the combination of their activities in Spain (excluding Totem Spain and MásMóvil Portugal). This business combination will take the form of a 50-50 joint venture, co-controlled by the Orange group and the shareholder of MásMóvil. The Orange group would then lose exclusive control over its activities in Spain, and the joint venture would be consolidated using the equity method in the Orange group’s Consolidated Financial Statements.
At the reporting date, completion of the transaction remains subject to the approval of the competent administrative, regulatory and antitrust authorities and to the relevant and/or contractual conditions precedent.
In view of the progress of the transaction and the need to obtain the green light from the relevant antitrust and administrative authorities, the Group considers that IFRS 5 criteria relating to measurement and presentation of operations held for sale are not met at December 31, 2023.
The European Commission, after conducting a preliminary investigation (Phase I), has launched a thorough investigation (Phase II) which is expected to return on February 22, 2024.
Agreement signed for the sale of Orange’s OCS and Orange Studio shares to the Canal+ Group
On January 9, 2023, Orange and the Canal+ Group announced the signature of a memorandum of understanding anticipating the sale to the Canal+ Group of all capital held by Orange in the OCS pay TV package and in Orange Studio, the film and series co-production subsidiary. The Canal+ Group will become the sole shareholder of both companies following this transaction.
At December 31, 2023, completion of the transaction remains subject to the approval of the competent administrative, regulatory and antitrust authorities and to the relevant and/or contractual conditions precedent.
On January 12, 2024, the French Competition Authority granted conditional authorization for the transaction to go ahead (see Note 19 Subsequents events).
Agreement signed for the merger of Orange Romania Communications into Orange Romania
On September 30, 2021, Orange Romania completed for an amount of 296 million euros the acquisition of a 54% majority block in the capital of Telekom Romania Communications, since renamed Orange Romania Communications, and the takeover of an MVNO contract previously concluded between Telekom Romania Communications and Telekom Romania Mobile. As of the completion of this transaction, Orange Romania Communications is jointly owned by Orange (54%) and the Romanian government (46%).
On December 6, 2023, an agreement was signed with the Romanian state defining the main principles of the merger of Orange Romania Communications into Orange Romania and the entry of the Romanian state into the capital of Orange Romania.
The signing of this agreement has no impact on the Consolidated Financial Statements at December 31, 2023. The merger is expected to be completed in the first half of 2024.
Other ongoing projects in 2023
Conclusions from the Orange Bank strategic review and exclusive negotiations entered into with BNP Paribas
On June 28, 2023, the Orange group announced that it was entering into exclusive negotiations with BNP Paribas to define a referral partnership for the Orange Bank customer portfolio in France, and to develop financing solutions for mobile devices. The two groups are also discussing the terms of a takeover of Orange Bank’s business in Spain. This partnership will provide a continuity solution for Orange Bank customers and is in line with the intention to progressively withdraw Orange Bank from the retail banking market in France and Spain.
Changes in the scope of consolidation during 2022
Merger by incorporation of Deezer by the SPAC I2PO and initial public offering of the global music streaming platform
On April 19, 2022, I2PO, a SPAC (special purpose acquisition company) publicly traded since July 2021, and Deezer (the global music and audio streaming platform) announced that they had reached a definitive agreement for a business combination.
On July 4, 2022, Deezer’s shareholders contributed their shares to the SPAC in exchange for newly issued shares of the latter. A capital increase was carried out at the same time.
The merged entity, renamed Deezer, was floated on the stock exchange on July 5, 2022, and is now listed on the professional compartment of the Euronext Paris regulated market. Before the initial public offering, the transaction valued Deezer’s shares at 1.05 billion euros.
Prior to the transaction, the Group held an equity interest of 10.42% in Deezer and exercised a significant influence over the entity due to its presence on the Board of Directors.
After the transaction, Orange holds 8.13% of the new entity and no longer exercises a significant influence. Pursuant to IAS 28 and IFRS 9, the transaction entailed the disposal of all of Deezer’s interests in associates and joint ventures and the purchase at fair value of 9,061,723 shares in the new entity. Orange also purchased 500,000 additional shares by participating in the capital increase that followed the merger.
The Deezer shares had been fully impaired in the Group’s financial statements and the fair value of the I2PO shares was calculated on the basis of the price proposed for the initial public offering of July 5, 2022, i.e. 8.50 euros per share.
This transaction thus resulted in the Orange group recognizing a gain on disposal of 77 million euros in the income statement for the second half-year.
The shares of the new entity are presented in the balance sheet as investment securities at fair value through other comprehensive income.
Consolidated Financial Statements 2023 |
F-42 |
Changes in the scope of consolidation during 2021
Disposal of 50% of the capital of Orange Concessions
On November 3, 2021, after receiving final approvals from the antitrust and local authorities, the Orange group sold a 50% stake in Orange Concessions to the HIN consortium (bringing together La Banque des Territoires, CNP Assurances and EDF Invest) for an amount of 1,053 million euros, resulting in the loss of Orange's exclusive control over this entity and its subsidiaries.
The transaction also includes a call option for the acquisition of an additional 1%, exercisable by Orange during the second quarter of the years 2026 to 2027. Guarantees, which are customary in this type of transaction, have also been granted (see Note 16 "Contractual obligations and off-balance sheet commitments").
As part of the transaction, 43 million euros was also received as compensation for a shareholder loan between Orange and Orange Concessions that existed prior to the disposal date. In addition, in November 2021, Orange Concessions repaid approximately 620 million euros of loans contracted, before the transaction date, with Orange SA following the issuance of bank loans by Orange Concessions.
Following this transaction, Orange Concessions is 50% owned by Orange and 50% owned by the consortium, which have joint control over this entity, which combines 24 subsidiaries that hold Public Initiative Networks (PIN) contracts with local authorities in mainland France and the French overseas territories.
This investment has been accounted for using the equity method since November 3, 2021. The fair value of the remaining stake retained by the Orange group (corresponding to 50% of the capital of Orange Concessions) amounted to 1,053 million euros at the transaction date (see Note 11 "Interests in associates and joint ventures").
This transaction was reflected in the Group's consolidated income statement as follows:
(in millions of euros) |
|
At disposal date |
Sale price of 50% of Orange Concessions' shares to the Consortium |
|
1,053 |
Remeasurement at fair value of remaining interests held by Orange |
|
1,053 |
Fair Value of Orange Concessions at the disposal date (a) |
|
2,107 |
Net book value and transaction costs related to sale of Orange Concessions (b) |
|
17 |
Gain resulting from the loss of exclusive control on Orange Concessions (a)+(b) |
|
2,124 |
Tax cost related to sale of the shares |
|
(47) |
Net gain resulting from the loss of exclusive control on Orange Concessions |
|
2,077 |
Consolidated Financial Statements 2023 |
F-43 |
The effects of the disposal of Orange Concessions shares presented in the cash flow statement are as follows:
(in millions of euros) |
|
At disposal date |
Sale price of sold shares, net of transaction costs |
|
1,046 |
Tax costs related to sale of Orange Concessions' shares |
|
(47) |
Transferred cash of Orange Concessions |
|
(242) |
Sales of investment securities, net of cash transferred |
|
758 |
The following assets and liabilities of Orange Concessions and its subsidiaries were derecognized on the date of disposal:
(in millions of euros) |
|
At disposal date |
|
|
|
Assets |
|
1,374 |
Intangible and tangible assets |
|
925 |
Financial assets |
|
76 |
Trade receivables |
|
71 |
Other assets |
|
60 |
Cash and cash equivalents |
|
242 |
Liabilities |
|
1,374 |
Net equity |
|
(62) |
Trade payables |
|
632 |
Financial liabilities |
|
710 |
Other liabilities |
|
94 |
|
|
|
Income statement |
|
|
Revenues |
|
471 |
Operating Income |
|
(23) |
Finance cost, net |
|
(21) |
Income taxes |
|
(11) |
Net income |
|
(55) |
Disposal of 50% of a subsidiary of Orange Polska in the context of the creation of a FiberCo in Poland
On August 31, 2021, Orange Polska and the APG Group finalized a share sale agreement under which the Group sold a 50% stake in Światłowód Inwestycje Sp. z o.o., Orange Polska's wholly owned "FiberCo" entity, whose scope of activity includes building fiber infrastructure and offering wholesale access services to other operators.
The net tax gain associated with the loss of control in the FiberCo, recognized in the consolidated income statement, amounted to 310 million euros and breaks down as follows:
(in millions of euros) |
|
At disposal date |
Sale price of 50% of FiberCo's shares sold to APG Group |
|
292 |
Reameasurement at fair value of remaining interests hold by Orange Polska |
|
292 |
Fair value of the FiberCo shares at the disposal date (a) |
|
584 |
Net book value and transaction costs related to sale of the FiberCo (b) |
|
(244) |
Gain resulting from the loss of control on the FiberCo (a)+(b) |
|
340 |
Tax cost related to sale of the shares |
|
(30) |
Net gain resulting from the loss of exclusive control on FiberCo |
|
310 |
The sale price of the shares sold amounts to 292 million euros, of which 202 million euros was received in cash and 90 million euros to be received during the fiscal years 2022 through 2026, subject to compliance with the FiberCo entity's network deployment schedule.
Below are the effects of the disposal of FiberCo's shares in the cash flow statement (cash-flows related to investment activities):
(in millions of euros) |
|
At disposal date |
Sale price of sold shares, net of transaction costs |
|
288 |
Tax costs related to the transaction (VAT and income tax) |
|
(61) |
Transferred cash of the sold entity |
|
(5) |
Receivables on sale of shares |
|
(90) |
Sales of investment securities, net of cash transferred |
|
132 |
Consolidated Financial Statements 2023 |
F-44 |
The following assets and liabilities of FiberCo were derecognized on the date of disposal:
(in millions of euros) |
|
At disposal date |
|
|
|
Assets |
|
297 |
Tangible assets |
|
87 |
Operating taxes assets and tax receivable |
|
46 |
Prepaid expenses |
|
154 |
Other assets |
|
5 |
Cash and cash equivalents |
|
5 |
Liabilities |
|
297 |
Equity |
|
240 |
Non current financial liabilities |
|
36 |
Other liabilities |
|
21 |
Guarantees, customary in this kind of transaction, were granted. The transaction also includes:
● | an obligation on each party to refinance the entity for around 66 million euros between 2023 and 2026, |
● | a call option for an additional stake of approximately 1% in Światłowód Inwestycje exercisable by Orange Polska over the fiscal years 2027 through 2029. |
As of August 31, 2021, Światłowód Inwestycje became a jointly controlled entity with the APG Group accounted for using the equity method (see Note 11 "Interests in associates and joint ventures").
Completion of the purchase price allocation for Telekom Romania Communications
On September 30, 2021, Orange Romania completed the acquisition of a 54% majority block in Telekom Romania Communications and the takeover of an MVNO contract previously concluded between Telekom Romania Communications and Telekom Romania Mobile, for an amount of 296 million euros. This transaction aims to accelerate Orange Romania's ambitions to become a major convergent operator for customers in the Romanian market.
In accordance with standard practice in this type of transaction, the amount paid by Orange Romania was subject to price adjustments in the months following the transaction.
(in millions of euros) |
|
At acquisition date |
Acquisition cost |
|
296 |
Acquisition cost adjustment |
|
(11) |
Cash acquired |
|
(90) |
Cash paid for investment securities, net of cash acquired |
|
195 |
In accordance with IFRS 3 – Business Combinations the fair value measurement of the identifiable assets acquired and liabilities assumed was finalized in the 2022 fiscal year. The final purchase price allocation is as follows:
(in millions of euros) |
|
At acquisition date |
Purchase price related to the acquisition of the 54% share(1) |
|
285 |
Fair value of the non-controlling interests |
|
245 |
Acquisition price (a) |
|
530 |
Net book value acquired |
|
261 |
Effects of fair value measurement: |
|
|
Tangible assets(2) |
|
261 |
Customer relationship |
|
29 |
Other intangibles |
|
2 |
Other |
|
(3) |
Net deferred tax |
|
(20) |
Net asset remeasured at fair value (b) |
|
530 |
Badwill / Goodwill (a)-(b) |
|
— |
(1) The amount paid by Orange Romania as of September 30, 2021 had been subject to price adjustments in the months following the transaction.
(2) The fair value measurement of property, plant and equipment mainly relates to land and buildings.
Liability guarantees, which are customary in this type of transaction, were also granted to Orange (see Note 16.2 “Consolidation scope Commitments”).
Conditional voluntary public tender offer on shares of Orange Belgium
On April 8, 2021, Orange SA launched a conditional voluntary public tender offer for 46.97% of the capital of Orange Belgium, corresponding to the balance of remaining shares not held directly and indirectly, at a price of 22 euros per share. The offer was opened from April 8 to April 23, 2021 and then voluntarily reopened from April 28, 2021 to May 4, 2021, under the same conditions. Following this offer, Orange SA directly and indirectly held 76.97% of the share capital of Orange Belgium.
The total acquisition cost of these shares amounted to 316 million euros. This share offer did not change the Orange group's pre-existing control over Orange Belgium, its subsidiaries and non-consolidated shares. Thus, in the Consolidated Financial Statements, this transaction resulted in an effect of (316) million euros on equity (including (172) million euros relating to the portion attributable to owners of the parent company and (144) million euros relating to the portion attributable to minority shareholders).
The cash paid out to acquire these minority interests in Orange has been presented in the financing flows in the statement of cash flows.
Consolidated Financial Statements 2023 |
F-45 |
Accounting policies
Changes in the scope of consolidation
Entities are fully consolidated if the Group has the following:
– power over the investee; and
– exposure, or rights, to variable returns from its involvement with the investee; and
– the ability to use its power over the investee to affect the amount of its returns.
IFRS 10 requires the exercise of judgment and continuous assessment of the control situation.
Clarifications of when the ownership interest does not imply a de facto presumption are provided in Note 20, which lists the main consolidated entities.
Joint ventures and companies over which the Group exercises significant influence (generally corresponding to an ownership interest of 20% to 50%) are accounted for using the equity method.
When assessing the level of control or significant influence exercised over a subsidiary or associate, the existence and effect of any exercisable or convertible potential voting rights at the closing date are taken into account.
Takeovers (business combinations)
Business combinations are accounted for using the acquisition method:
– the acquisition cost is measured at the fair value of the consideration transferred, including all contingent consideration, at the acquisition date. Subsequent changes in the fair value of a contingent consideration are accounted for either through profit or loss or in equity, in accordance with the applicable standards, facts and circumstances;
– goodwill is the difference between the consideration transferred, plus the non-controlling interests and the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, and is recognized as an asset in the statement of financial position. Considering the Group’s activity, the fair value measurements of the identifiable assets mainly relate to licenses, customer bases and brands (which cannot be capitalized when developed in-house), generating associated deferred tax. The fair value of these assets, which cannot be observed, is established using commonly adopted methods, such as those based on revenues or costs (e.g.: the “Greenfield” method for the valuation of licenses, the “relief from royalty” method for the valuation of brands and the “excess earnings” method for customer bases).
− when the consideration transferred, plus the non-controlling interests, is less than the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, a badwill is recognized as income for the period in the income statement on the line "Effects resulting from business combination".
For each takeover involving an equity investment below 100%, the fraction of the interest not acquired (non-controlling interests) is measured:
– either at its fair value, in which case goodwill is recognized for the portion relating to non-controlling interests;
– or proportionate to its share of the acquiree's identifiable net assets: in which case, goodwill is only recognized for the portion acquired.
Costs directly attributable to the acquisition are recognized directly in operating expenses in the period in which they are incurred.
When a takeover is achieved in stages, the previously held equity interest is re-measured at fair value at the acquisition date through operating income. The related other comprehensive income, if any, is fully reclassified to profit or loss. When the previous portion was measured at fair value through other comprehensive income, the remeasurement was recognized in other comprehensive income.
Loss of exclusive control resulting from the partial disposal of consolidated shares
A loss of exclusive control by the Group over one of its subsidiaries results in the recognition in profit or loss of a capital gain or loss on the disposal, and in the remeasurement at fair value of the residual interest retained in accordance with the requirements of IFRS 10 applicable in the event of a loss of control.
Loss of significant influence or joint control leading to the discontinuation of the equity method while retaining a residual interest
A loss of significant influence or joint control by the Group over one of its associates or joint ventures while retaining a residual interest results in the recognition in profit or loss of a capital gain or loss on the disposal of the shares sold, and, in accordance with the provisions of IAS 28, the remeasurement at fair value of the residual interest retained. The fair value of the retained interest constitutes the entry value of the financial asset within the scope of IFRS 9.
Internal transfer of consolidated shares
The IFRS do not address the accounting treatment of a transfer of consolidated shares within the Group resulting in changes in ownership interest. The Group applies the following accounting policy:
– the transferred shares are carried at historical cost and the gain or loss on disposal is fully eliminated in the acquirer’s accounts;
– the non-controlling interests are adjusted to reflect the change in their share in equity against Group retained earnings, with no impact on profit and loss and equity.
Assets held for sale
The Group qualifies an asset or group of assets as “held for sale” when:
– the management is committed to a plan to sell;
– the asset is available for immediate sale in its current state (subject to any conditions precedent that are usual in such disposals); and
– the disposal is highly likely to take place within 12 months.
Consolidated Financial Statements 2023 |
F-46 |
Thus, when the Group is committed to a plan to sell involving the loss of control or significant influence over one of its assets, it classifies all assets and liabilities of the entity concerned on a separate line in the statement of financial position: "Assets/Liabilities held for sale," at a value equal to the lower of the net carrying value and the fair value net of disposal costs.
In addition, when the asset or group of assets held for sale is a major component of a business segment, its contribution to the income statement is presented separately below “net income from continuing operations” and its cash flow contribution is presented in the statement of cash flows.
Note 4 Sales
4.1 Revenue
Revenue is presented by category and segment in Note 1. The breakdown of revenue by type is as follows:
– Convergent services: these include revenue from convergent services in the B2C market (combined Internet + Mobile offers);
– Mobile-only services: mobile-only services revenue includes call revenues (voice, SMS and data), mainly outgoing, excluding convergent services (see below);
– Fixed-only services: revenue from fixed-only services includes revenue from retail sales of fixed broadband and narrowband services, excluding convergent services (see below) and B2B fixed solutions and networks services, including voice and data services;
– IT & Integration Services: these services include unified communication and collaboration services (LAN and telephony, consultancy, integration, project management), hosting and infrastructure services (including cloud computing), application services (customer relations management and other application services), security services, video conferencing offers and equipment sales related to the above products and services;
– Services to carriers (wholesale): wholesale revenue includes roaming revenue from customers of other networks (national and international roaming), from Mobile Virtual Network Operators (MVNO), from network sharing and from equipment sales to operators;
– Equipment sales: equipment sales include all sales of equipment (handsets, broadband equipment, connected devices and accessories) with the exception of equipment sales related to IT & Integration Services (presented on the “IT & Integration Services” line), sales of network equipment related to the operation of voice and data services in the Orange Business segment (presented on the “Fixed-only services” line), equipment sales to external distributors or brokers (presented on the “Other revenues” line) and equipment sales to operators;
– Other revenues: these revenues include, in particular, equipment sales to external distributors and brokers, revenue from portals, online advertising and the Group’s cross-functional activities and miscellaneous other revenues.
Accounting policies
Most revenue falls within the application scope of IFRS 15 “Revenue from Contracts with Customers.” Orange’s products and services are offered to customers under services-only contracts and contracts combining the equipment used to access services and/or other service offers. Revenue is recognized net of VAT and other taxes collected on behalf of governments.
– Standalone service offers (mobile-only services, fixed-only services, convergent services)
Orange offers its B2C and B2B customers a range of fixed and mobile telephony services, fixed and mobile Internet access offers and content offers (TV, video, media, value-added audio service, etc.). Some contracts are for a fixed term (generally 12 or 24 months), while others may be terminated at short notice (i.e. monthly arrangements or portions of services).
Service revenue is recognized when the service is provided, based on use (e.g. minutes of traffic or bytes of data processed) or the period (e.g. monthly service costs).
For some content services, Orange may act solely as an agent enabling the supply by a third-party of goods or services to the customer and not as a principal in the supply of the content. In such cases, revenue is recognized net of amounts transferred to the third party.
Contracts with customers generally do not include a material right, as the price invoiced for subscriptions and the services purchased and consumed by the customer beyond the specific scope (e.g. additional consumption, options, etc.) generally reflect their standalone selling prices. There is no significant impact from contract modification for this type of service contract. Service obligations transferred to the customer at the same pace are treated as a single obligation.
When contracts include contractual clauses relating to commercial discounts (initial discount on signing the contract or conditional on reaching a consumption threshold) or items provided free of charge (for example: a free three-month subscription), the Group spreads these discounts or free items over the term of the contract (the period during which the Group and the customer have firm commitments). Where applicable, the consideration payable to the customer is recognized as a deduction from revenue in accordance with the specific terms and conditions of each contract.
If the performance obligations are not classified as distinct, the offer revenue is recognized on a straight-line basis over the contract term. One of the main applications of this method is the initial service connection in the context of a subscription and communication offer. It is not generally separable from the subscription and communication offer and its invoicing is therefore recognized in income over the average term of the expected contractual relationship.
Consolidated Financial Statements 2023 |
F-47 |
– Separate equipment sales
Orange offers its B2C and B2B customers several ways to buy their equipment (primarily mobile devices): equipment sales may be separate from or bundled with a service offer. When separate from a service offer, the amount invoiced is recognized in revenue on delivery and receivable immediately or in installments over a period of up to 24 months. Where payment is received in installments, the offer comprises a financial component and gives rise to the calculation of interest deducted from the amount invoiced and recognized over the payment period in finance costs, net.
Where Orange purchases and sells equipment to indirect channels, the Group generally considers that Orange maintains control until resale to the end-customer (the distributor acts as an agent), even where ownership is transferred to the distributor. Sale proceeds are therefore recognized when the end-customer takes possession of the equipment (on activation).
– Bundled equipment and service offers
Orange proposes numerous offers to its B2C and B2B customers comprising equipment (e.g. a mobile device) and services (e.g. a talk & text plan).
Equipment revenue is recognized separately from service revenue if the two components are distinct (i.e. if the customer can receive one or other of the services separately). Where one of the components in the offer is not at its separate selling price, revenue is allocated to each component in proportion to their individual selling prices. This is notably the case in offers combining the sale of a mobile phone at a reduced price, where the individual selling price of the mobile phone is considered equal to its purchase cost and logistics expenses plus a commercial margin based on market practice. The amount allocated to equipment sales is recognized under revenue on delivery in exchange for a contract asset, spread over the term of the service contract.
The provision of a Livebox® (proprietary Internet box) is neither a separate component of the Internet access service offer nor a lease, as Orange maintains control of the box.
– Services including both a build and run phase
For B2B customers, some contracts have two phases: build and then management (operation and maintenance) of assets built and delivered to customers. Revenue recognition requires an analysis of the facts and circumstances of each contract in order to determine whether distinct performance obligations exist. Under these contracts, if the build phase is classified as separate, the Group recognizes the revenue of this phase according to the percentage of completion. However, if the Group does not have a certain right to payment and/or if there is no continuous transfer of control of the asset being built, then revenues for this phase are recognized upon completion. These contracts are generally multi-year, with scalable offers. On each contract modification, we assess the scope of the modification and its impact on the contract price in order to determine whether the modification should be treated as a separate contract, as though the existing contract were terminated and a new contract signed, or whether the modification should be considered as a change to the existing contract.
– Service offers to carriers (wholesale)
Three types of commercial agreements are entered into with wholesale customers for domestic wholesale activities or international carrier offers:
– “pay-as-you-go” model: contract generally applied to “legacy” regulated activities (bitstream call termination, local loop access, roaming and certain data solution contracts), where contract services are not covered by a firm volume commitment. Revenue is recognized as the services are provided (which relates to transfer of control) over the contractual term;
– “send-or-pay” model: contract where the price, volume and term are defined. The customer has a commitment to pay the amount indicated in the contract irrespective of actual traffic consumed over the commitment period. This contract category notably includes certain MVNO (mobile virtual network operator), IDD (international direct dialing) or hubbing (call free floating) contracts. The relevant revenue is recognized progressively based on actual traffic during the period, to reflect transfer of control to the customer;
– mix model: hybrid contract combining the “pay-as-you-go” and “send-or-pay” models, comprising a fixed entry fee paid by the customer providing access to preferential pricing conditions for a given volume (“send-or-pay” component). In addition to this entry fee, an amount is invoiced based on traffic consumption (“pay-as-you-go” component). The amount invoiced for the entry fee included in this type of commercial agreement is recognized progressively in revenue based on actual traffic over the period.
Current agreements between major transit carriers are not invoiced or cross-invoiced (“free peering”) and are therefore not recognized in revenue.
– Quality of service commitment clause
The contracts entered into by the Group and its customers include service level commitments regarding the processing of orders, delivery and after-sales support (delivery time, performance, recovery time). If the Group fails to comply with one of these commitments, it then compensates the customer, usually in the form of a price reduction. The projected amount of these penalties is recognized as a deduction from revenue whenever it is expected that the commitment will not be fulfilled.
– Public-private service concession arrangements
The Group rolls out and/or operates certain networks under service concessions, such as the Public Initiative Networks implemented in France to roll out fiber optic networks in less populated areas. Some contracts are analyzed in accordance with IFRIC 12 “Service Concession Arrangements.” When the Group builds a network, construction revenue is recognized in consideration of a right to receive compensation from either a public entity or users of the public service. This right is accounted for as:
– an intangible asset for the right to receive payments from public service users amounting to the fair value of the corresponding infrastructure and is amortized over the term of the contract; and/or
Consolidated Financial Statements 2023 |
F-48 |
– a financial receivable for the unconditional right to receive royalties from the public entity, for the fair value of the consideration expected from the public entity. This receivable is recognized at amortized cost.
– Lease agreements
Orange’s lease revenue is related either to its regulatory obligations to lease technical sites to its competitors, to the supply of equipment in certain contracts with B2B customers, or to the granting of rights of use meeting the criteria for leasing network equipment, i.e. occasional leases of surplus space in certain buildings to third parties.
Lease revenue is recognized on a straight-line basis over the contract term, except for certain equipment leases to B2B customers, which are classified as finance leases; in such cases the equipment is considered sold on credit.
4.2 Other operating income
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net banking income (NBI) |
|
156 |
|
124 |
|
119 |
Income from customer collection |
|
87 |
|
91 |
|
89 |
Site rentals and franchises income |
|
38 |
|
34 |
|
87 |
Tax credits and subsidies |
|
47 |
|
48 |
|
44 |
Income from universal service |
|
6 |
|
3 |
|
4 |
Other income |
|
560 |
|
447 |
|
441 |
Total |
|
894 |
|
747 |
|
783 |
Net banking income (NBI) represents the net balance between income from banking operations (fees charged to customers, interest from loans, banking activities retail commissions and other income from banking operations) and expenses from banking operations (interest paid on loans, commissions paid and other bank operating expenses). It is prepared in accordance with accounting practices that are commonly used in France in the banking sector.
Income from customer collection mainly includes interest charged to customers for late payments and recovery of trade receivables previously recognized as losses.
Other income predominantly comprises re-invoicing of network sharing costs, income received from litigation and income relating to line damage.
4.3 Trade receivables
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Gross book value of trade receivables |
|
7,070 |
|
7,301 |
|
7,041 |
Allowances on trade receivables |
|
(1,058) |
|
(996) |
|
(1,012) |
Net book value of trade receivables |
|
6,013 |
|
6,305 |
|
6,029 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net book value of trade receivables - in the opening balance |
|
6,305 |
|
6,029 |
|
5,620 |
Business related variations |
|
(379) |
|
299 |
|
(53) |
Changes in the scope of consolidation(1) |
|
96 |
|
(3) |
|
389 |
Translation adjustment |
|
(2) |
|
(76) |
|
36 |
Reclassifications and other items |
|
(7) |
|
56 |
|
36 |
Net book value of trade receivables - in the closing balance |
|
6,013 |
|
6,305 |
|
6,029 |
(1) |
In 2023, changes in the scope of consolidation mainly include the acquisition of VOO for 86 million euros. |
In 2021, changes in the scope of consolidation included the externalization of Orange SA's trade receivables from concession contracts resulting from the loss of exclusive control on Orange Concessions for 288 million euros and the acquisition of Telekom Romania Communications for 100 million euros.
Sales of receivables program
Orange has set up non-recourse programs for the sales of its receivables due in installments in several countries. These are no longer recorded on the balance sheet. The amount received for the receivables disposed of was around 806 million euros in 2023, 640 million euros in 2022, 740 million euros in 2021 and mainly relates to Spain, Poland, Romania and France.
Since 2020, Orange Espagne has implemented a non-recourse program with Orange Bank for the disposal of receivables due in installments, replacing an existing program with a third-party bank. This program led to these receivables being derecognized from the balance sheet of Orange Espagne (within telecom activities) and presented as customer loans and receivables within Mobile Financial Services activities (see Note 17.1.1).
Consolidated Financial Statements 2023 |
F-49 |
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Net trade receivables, depreciated according to their age |
|
1,440 |
|
1,191 |
|
1,204 |
|
Net trade receivables, depreciated according to other criteria |
|
383 |
|
324 |
|
422 |
|
Net trade receivables past due |
|
1,823 |
|
1,515 |
|
1,627 |
|
Net trade receivables not past due(1) |
|
4,190 |
|
4,790 |
|
4,402 |
|
Net trade receivables |
|
6,013 |
|
6,305 |
|
6,029 |
|
o/w short-term trade receivables |
|
5,681 |
|
6,022 |
|
5,793 |
|
o/w long-term trade receivables(2) |
|
332 |
|
283 |
|
236 |
|
(1) | Not past due receivables are presented net of the balance of expected losses on trade receivables, which amount to (43) million euros at December 31, 2023, (46) million euros at December 31, 2022 and (54) million euros at December 31, 2021. |
(2) | Includes receivables from sales of handsets with installments that are payable in more than 12 months and receivables from equipment financial lease offers for business. |
Shown below is the ageing table of the net trade receivables which are past due and impaired according to their maturity:
(in millions of euros)
The Group has assessed the risk of non-recovery of trade receivables at December 31, 2023 and has recognized impairment and losses on trade receivables in the income statement for an amount of (218) million euros over the period.
For Mobile Financial Services, the bank credit risk is described in Note 17.2.1.
The table below provides an analysis of the change in allowances on trade receivables in the statement of financial position:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Allowances on trade receivables - in the opening balance |
|
(996) |
|
(1,012) |
|
(983) |
|
Net addition with impact on income statement |
|
(218) |
|
(208) |
|
(212) |
|
Losses on trade receivables |
|
280 |
|
218 |
|
283 |
|
Changes in the scope of consolidation(1) |
|
(126) |
|
(6) |
|
(91) |
|
Translation adjustment |
|
4 |
|
16 |
|
(7) |
|
Reclassifications and other items |
|
(2) |
|
(4) |
|
(1) |
|
Allowances on trade receivables - in the closing balance |
|
(1,058) |
|
(996) |
|
(1,012) |
|
(1) | Changes in the scope of consolidation mainly include the acquisition of VOO for (124) million euros in 2023 and the acquisition of Telekom Romania Communications for (89) million euros in 2021. |
Consolidated Financial Statements 2023 |
F-50 |
Accounting policies
Trade receivables are mainly short-term with no stated interest rate and are measured in the statement of financial position at the par value of the receivable, in accordance with IFRS 15. Those trade receivables which include deferred payment terms over 12 or 24 months for customers buying a mobile phone are discounted and classified as current items in the statement of financial position. Receivables from B2B equipment finance leases are recognized as current operating receivables because they are acquired in the normal course of business.
In order to meet the requirements of IFRS 9, the impairment of trade receivables is based on three methods:
– a collective statistical method: this is based on historical losses and leads to a separate impairment rate for each aging balance category. This analysis is performed over a homogeneous group of receivables with similar credit characteristics because they belong to a customer category (B2C, professionals);
– a stand-alone method: the assessment of impairment probability and its amount are based on a set of relevant qualitative factors (aging of late payment, other balances with the counterparty, rating from independent agencies, geographical area). This method is mainly used for carrier customers (national and international), administrations and public authorities, as well as for businesses services key accounts;
– a provisioning method based on expected loss: IFRS 9 requires recognition of expected losses on receivables immediately upon recognition of the financial instruments. In addition to the pre-existing provisioning system, the Group applies a simplified approach of early impairment at the time the asset is recognized. The rate applied depends on the maximum revenue non-recoverability rate.
Recognition of impairment losses for a group of receivables is the step preceding identification of impairment losses on individual receivables. As soon as information is available (customers in bankruptcy or subject to court-ordered liquidation), these receivables are then excluded from the statistical impairment database and individually impaired.
The trade receivables may be part of non-recourse programs. When they are assigned to consolidated securitization mutual funds, they remain on the statement of financial position. Other disposals to financial institutions may lead to their de-recognition in the event that legal ownership and almost all the risks and benefits of the receivables are transferred as described by IFRS 9.
4.4 Customer contract net assets and liabilities
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
Customer contract net assets(1) |
|
786 |
|
733 |
|
740 |
Costs to fulfill a contract |
|
687 |
|
539 |
|
426 |
Costs of obtaining a contract |
|
322 |
|
298 |
|
294 |
Total customer contract net assets |
|
1,795 |
|
1,570 |
|
1,460 |
Prepaid telephone cards |
|
(170) |
|
(175) |
|
(186) |
Connection fees |
|
(436) |
|
(507) |
|
(563) |
Loyalty programs |
|
(10) |
|
(31) |
|
(29) |
Other deferred revenue(2) |
|
(2,082) |
|
(1,847) |
|
(1,717) |
Other customer contract liabilities |
|
(19) |
|
(19) |
|
(17) |
Total deferred revenue related to customer contracts |
|
(2,717) |
|
(2,579) |
|
(2,512) |
Total customer contract net assets and liabilities |
|
(922) |
|
(1,009) |
|
(1,052) |
(1) | Assets net of performance obligations. |
(2) | Includes in particular subscriptions. The change in Other deferred revenue is detailed below. |
The following tables give an analysis of the balances of customer contract net assets and the costs of acquiring and fulfilling contracts in the statement of financial position.
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Customer contract net assets - in the opening balance |
|
733 |
|
740 |
|
709 |
Business related variations(1) |
|
39 |
|
(1) |
|
30 |
Changes in the scope of consolidation(2) |
|
14 |
|
— |
|
4 |
Translation adjustment |
|
2 |
|
(1) |
|
— |
Reclassifications and other items |
|
(2) |
|
(6) |
|
(3) |
Customer contract net assets - in the closing balance |
|
786 |
|
733 |
|
740 |
(1) | Mainly includes new contract assets net of related liabilities, transfers of net contract assets directly to trade receivables and impairment in the period. |
(2) | In 2023, the change in scope of consolidation is mainly related to the acquisition of VOO (see Note 3.2). |
Consolidated Financial Statements 2023 |
F-51 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Costs of obtaining a contract - in the opening balance |
|
298 |
|
294 |
|
262 |
Business related variations |
|
15 |
|
6 |
|
20 |
Changes in the scope of consolidation |
|
— |
|
— |
|
12 |
Translation adjustment |
|
9 |
|
(2) |
|
(1) |
Reclassifications and other items |
|
— |
|
— |
|
— |
Costs of obtaining a contract - in the closing balance |
|
322 |
|
298 |
|
294 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Costs to fulfill a contract - in the opening balance |
|
539 |
|
426 |
|
265 |
Business related variations |
|
118 |
|
122 |
|
31 |
Changes in the scope of consolidation |
|
28 |
|
— |
|
— |
Translation adjustment |
|
(1) |
|
(5) |
|
11 |
Reclassifications and other items |
|
3 |
|
(4) |
|
118 |
Costs to fulfill a contract - in the closing balance |
|
687 |
|
539 |
|
426 |
Below is presented the change in deferred income related to customer contracts (prepaid telephone cards, connection fees, loyalty programs and other unearned income) in the statement of financial position:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Deferred revenue related to customer contracts - in the opening balance |
|
2,579 |
|
2,512 |
|
1,984 |
Business related variations |
|
72 |
|
101 |
|
220 |
Changes in the scope of consolidation(1) |
|
39 |
|
1 |
|
183 |
Translation adjustment |
|
24 |
|
(23) |
|
13 |
Reclassifications and other items |
|
2 |
|
(13) |
|
112 |
Deferred revenue related to customer contracts - in the closing balance |
|
2,717 |
|
2,579 |
|
2,512 |
(1) | In 2021, changes in the scope of consolidation mainly concerned prepayment of services for the construction of the network of FiberCo in Poland to Orange Polska and the acquisition of Telekom Romania Communications. |
Accounting policies
Customer contract net assets and liabilities
The timing of income recognition may differ from the timing of customer invoicing.
Trade receivables presented in the consolidated statement of financial position represent an unconditional right to receive consideration (primarily cash), i.e. the services and goods promised to the customer have been provided.
In contrast, contract assets mainly refer to amounts allocated under IFRS 15 as consideration for goods or services provided to customers, but for which the right to collect payment is contingent on the provision of other services or goods under the same contract (or group of contracts). This is the case in a bundled offer combining the sale of a mobile phone and mobile telecommunication services for a fixed period, where the mobile phone is invoiced at a reduced price leading to the reallocation of a portion of amounts invoiced for the telecommunication service to the supply of the mobile phone. The excess amount allocated to the mobile phone over the price invoiced is recognized as a contract asset and transferred to trade receivables as the service is invoiced.
Contract assets, like trade receivables, are subject to impairment for credit risk. The recoverability of contract assets is also verified, including to cover the risk of impairment loss should the contract be interrupted. Recoverability may also be impacted by a change in the legal environment governing offers.
Contract liabilities represent amounts paid by customers to Orange before receiving the goods and/or services promised in the contract. This is typically the case for advances received from customers or amounts invoiced and received for goods or services not yet provided, for example for subscriptions payable in advance or prepaid contracts (previously recognized in deferred income).
Customer contract assets and liabilities are presented, respectively, in current assets and current liabilities since they are a normal part of the Group’s operations.
Costs of obtaining a contract
Where a telecommunication service contract is signed via a third-party distributor, this distributor may receive business provider remuneration, generally paid in the form of a commission for each subscription or invoice-indexed commission. Where the Group considers that these commissions are incremental and would not have been paid in the absence of the customer contract, the commission cost is estimated and capitalized in the balance sheet. It should be noted that the Group has adopted the simplification measure authorized by IFRS 15 to recognize the costs of obtaining a contract as an expense at the time they are incurred, if the amortization period of the asset that the Group would recognize for them does not exceed one year.
Consolidated Financial Statements 2023 |
F-52 |
The costs of obtaining fixed-period mobile services contracts are capitalized and expensed on a pro rata basis over the enforceable period of the contract, as these costs are generally incurred each time a customer renews the fixed period. The costs of obtaining fixed services contracts for a pre-determined term for B2C market customers are expensed on a pro rata basis over the estimated period of the customer relationship. The costs of obtaining B2B and operator solution contracts are not material.
Costs to fulfill a contract
Costs to fulfill a contract consist of all the initial contractual costs necessary to fulfill one or more performance obligations of a contract. These costs, when they are directly related to a contract, are capitalized and expensed on a pro rata basis over the enforceable period of the contract.
At Group level, these costs mainly concern contracts for B2B customers, with, for example, design, installation, connection and migration costs that relate to a future performance obligation of the contract.
The assumptions underlying the period over which the costs of fulfilling a contract are expensed are periodically reviewed and adjusted in line with observations; termination of the contractual relationship with the customer results in the immediate expensing of the remaining deferred costs. Where the carrying value of deferred costs exceeds the remaining consideration expected to be received for the transfer of the related goods and services, less expected costs relating directly to the transfer of these goods and services yet to be incurred, the excess amount is similarly immediately expensed.
The following table presents the transaction price assigned to unfulfilled performance obligations at December 31, 2023. Unfulfilled performance obligations are the services that the Group is obliged to provide to customers during the remaining fixed term of the contract. As allowed by the simplification procedure under IFRS 15, these disclosures are only related to performance obligations with an initial term greater than one year.
(in millions of euros) |
|
December 31, 2023 |
Less than one year |
|
6,975 |
Between 1 and 2 years |
|
2,761 |
Between 2 and 3 years |
|
852 |
Between 3 and 4 years |
|
344 |
Between 4 and 5 years |
|
144 |
More than 5 years |
|
168 |
Total remaining performance obligations |
|
11,242 |
Accounting policies
Unfulfilled performance obligations
During allocation of the total contract transaction price to identified performance obligations, a portion of the total transaction price can be allocated to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period. We have elected to apply certain available practical expedients when disclosing unfulfilled performance obligations, including the option to exclude expected revenues from unsatisfied obligations of contracts with an original expected duration of one year or less. These contracts are primarily monthly service contracts.
In addition, certain contracts offer customers the ability to purchase additional services. These additional services are not included in the transaction price and are recognized when the customer exercises the option (generally on a monthly basis). They are not therefore included in unfulfilled performance obligations.
Some multi-year service contracts with B2B and operator customers include fixed monthly costs and variable user fees. These variable user fees are excluded from the table of unfulfilled performance obligations.
4.5 Other assets
|
|
December 31, |
|
December 31, |
|
December 31, |
|
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Orange Money - restriction of electronic money(1) |
|
1,430 |
|
1,242 |
|
1,030 |
|
Submarine cable consortiums(1) |
|
272 |
|
230 |
|
194 |
|
Advances and downpayments |
|
191 |
|
177 |
|
147 |
|
Security deposits paid |
|
108 |
|
96 |
|
105 |
|
Other |
|
578 |
|
688 |
|
654 |
|
Total |
|
2,579 |
|
2,433 |
|
2,130 |
|
(1) | These receivables are offset by the liabilities of the same amount (see accounting policies below and Note 5.7). |
Consolidated Financial Statements 2023 |
F-53 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Other assets - in the opening balance |
|
2,433 |
|
2,130 |
|
1,837 |
Business related variations(1) |
|
174 |
|
304 |
|
236 |
Changes in the scope of consolidation |
|
11 |
|
5 |
|
24 |
Translation adjustment |
|
(10) |
|
(17) |
|
28 |
Reclassifications and other items |
|
(29) |
|
11 |
|
5 |
Other assets - in the closing balance |
|
2,579 |
|
2,433 |
|
2,130 |
o/w other non-current assets |
|
192 |
|
216 |
|
254 |
o/w other current assets |
|
2,388 |
|
2,217 |
|
1,875 |
(1) | Including the restriction of electronic money related to Orange Money for 199 million euros. |
Accounting policies
Other assets relating to “Submarine cable consortiums” are receivables from submarine cable consortium members when Orange is in charge of centralizing the payments to the equipment suppliers that build and manage these cables. These receivables are offset by the liabilities of the same amount (see Note 5.7).
Orange Money is a money transfer, payment and financial services solution provided via an electronic money (“e-money”) account linked to an Orange mobile number.
Since 2016, the Orange group has become an Electronic Money Issuer (“EMI”) in some of the countries in which it operates, via dedicated, approved, internal subsidiaries. Regulations state that EMIs, as last-resort guarantors for the reimbursement of e-money holders, are obliged to restrict the funds collected in exchange for the issue of e-money (obligation to protect holders). The e-money distribution model relies on Orange’s subsidiaries and third-party distributors. EMIs issue e-money (or units of value “UV”) at the request of these distributors in exchange for funds collected therefrom. The distributors then transfer the e-money to end holders.
Within the Orange group, this restriction includes the protection of third-party holders (distributors and customers).
These transactions have no impact on the Group's net financial debt and are listed under the following headings:
– assets restricted to an amount equal to the e-money in circulation outside of the Orange group (or UV in circulation);
– UV in circulation under liabilities, representing the obligation to reimburse the third-party holders (customers and third-party distributors).
These two headings are presented under “other assets” and “other liabilities” and under operating activities as “change in working capital requirement”.
Note 5 Purchases and other expenses
5.1 External purchases
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Commercial, equipment expenses and content rights |
|
(8,163) |
|
(7,772) |
|
(7,385) |
|
o/w costs of terminals and other equipment sold |
|
(4,830) |
|
(4,459) |
|
(4,234) |
|
o/w advertising, promotional, sponsoring and rebranding costs |
|
(784) |
|
(804) |
|
(783) |
|
Service fees and inter-operator costs |
|
(3,972) |
|
(4,251) |
|
(4,349) |
|
o/w interconnexion costs |
|
(2,359) |
|
(2,703) |
|
(2,956) |
|
Other network expenses, IT expenses |
|
(3,928) |
|
(3,590) |
|
(3,530) |
|
Other external purchases |
|
(3,259) |
|
(3,119) |
|
(2,709) |
|
o/w building cost for resale |
|
(1,170) |
|
(1,236) |
|
(1,047) |
|
o/w overhead |
|
(1,292) |
|
(1,172) |
|
(1,044) |
|
o/w rental expenses |
|
(111) |
|
(134) |
|
(147) |
|
Total external purchases(1) |
|
(19,322) |
|
(18,732) |
|
(17,973) |
|
(1) | Energy purchases, mainly comprising electricity, represent (1,017) million euros in 2023, (798) million euros in 2022 and (579) million euros in 2021. |
Accounting policies
Firm purchase commitments are disclosed as unrecognized contractual commitments (see Note 16).
Advertising, promotion, sponsoring, communication and brand development costs are recorded as expenses during the period in which they are incurred.
Consolidated Financial Statements 2023 |
F-54 |
Since the application of IFRS 16, on January 1, 2019, lease expenses have included rental payments on leases with an enforceable period, with no option to extend, of 12 months or less, leases where the value, when new, of the underlying asset is less than approximately 5,000 euros, and variable lease payments which were not included in the measurement of the lease liability (see Note 9).
5.2 Other operating expenses
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Litigation(1) |
|
(41) |
|
(50) |
|
(218) |
|
Allowances and losses on trade receivables – telecom activities |
|
(218) |
|
(206) |
|
(213) |
|
Cost of bank credit risk |
|
(64) |
|
(49) |
|
(48) |
|
Expenses from universal service |
|
(26) |
|
(28) |
|
(22) |
|
Operating foreign exchange gains (losses) |
|
(18) |
|
(23) |
|
(20) |
|
Acquisition and integration costs |
|
(28) |
|
(40) |
|
(14) |
|
Other expenses |
|
(55) |
|
(17) |
|
(165) |
|
Total other operating expenses |
|
(452) |
|
(413) |
|
(700) |
|
(1) |
See Note 18. |
Allowances and losses on trade receivables from telecom activities are detailed in Note 4.3.
The cost of credit risk applies only to Mobile Financial Services and includes impairment charges and reversals on fixed-income securities, loans and receivables to customers as well as impairment charges and reversals relating to guarantee commitments given, losses on receivables and recovery of amortized debts (see Note 17.2.1).
Certain expenses related to litigation are directly recorded in operating income and are not included in the following movements of provisions:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Provisions for litigation - in the opening balance |
|
387 |
|
405 |
|
525 |
|
Additions with impact on income statement |
|
49 |
|
26 |
|
162 |
|
Reversals with impact on income statement (1) |
|
(132) |
|
(12) |
|
(10) |
|
Discounting with impact on income statement |
|
— |
|
1 |
|
— |
|
Utilizations without impact on income statement (2) |
|
(24) |
|
(34) |
|
(317) |
|
Changes in consolidation scope |
|
2 |
|
2 |
|
— |
|
Translation adjustment |
|
1 |
|
0 |
|
1 |
|
Reclassifications and other items |
|
1 |
|
— |
|
44 |
|
Provisions for litigation - in the closing balance |
|
283 |
|
387 |
|
405 |
|
o/w non-current provisions |
|
40 |
|
47 |
|
51 |
|
o/w current provisions |
|
244 |
|
340 |
|
353 |
|
(1) | Mainly corresponds to the provision reversal of (97) million euros for the Digicel litigation after a favorable decision by the French Supreme Court in 2023 (see Note 18). |
(2) | Corresponded mainly to the conviction for anti-competitive practices in the “enterprise” market segment in 2021 (see Note 18). |
The Group’s significant litigation are described in Note 18.
Accounting policies
Litigation
In the ordinary course of business, the Group is involved in a number of legal and arbitration proceedings and administrative actions described in Note 18.
The costs which may result from these proceedings are accrued at the reporting date if the Group has a present obligation toward a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of that liability can be quantified or estimated within a reasonable range. The amount of provision recorded is based on a case-by-case assessment of the risk level, and events arising during the course of legal proceedings may require a reassessment of this risk at any time. Where appropriate, litigation cases may be analyzed as contingent liabilities, which correspond to:
– probable obligations arising from past events that are not recognized because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the Company’s control; or
– present obligations arising from past events that are not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or because the amount of the obligation cannot be measured with sufficient reliability.
Acquisition and integration costs
Acquisition and integration costs are incurred at the time of acquisition of legal entities (costs linked to the acquisition of the entity, consultancy fees, training costs for new employees, migration costs associated with customer offers, labor expenses associated with the transition). They are incurred over a maximum period of 12 months following the acquisition date.
Consolidated Financial Statements 2023 |
F-55 |
5.3 Restructuring costs
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Departure plans(1) |
|
(355) |
|
(54) |
|
(241) |
|
Lease property restructuring |
|
(18) |
|
(21) |
|
(6) |
|
Distribution channels |
|
(3) |
|
(12) |
|
(22) |
|
Other(2) |
|
(80) |
|
(38) |
|
(63) |
|
Total restructuring costs |
|
(456) |
|
(125) |
|
(331) |
|
(1) | In 2023, mainly relates to the costs and provisions associated with the departure plans at Orange Business for 180 million euros (of which 141 million euros in France for around 650 jobs) and Orange Bank for around 600 jobs for 122 million euros. |
In 2022, mainly related to the Equant departure plan for around 300 people.
In 2021, mainly related to departure plans at Orange Polska, for around 1,400 people, and Orange Espagne, for around 400 people.
(2) | In 2023, includes 35 million euros of costs related to the discontinuation of the commercialization of products and services as part of the Orange Business restructuring plan. |
Orange Business restructuring plan in France
Orange Business has presented the operational implementation of its strategic priorities within the framework of the strategic plan Lead the future. This plan carries a strong ambition to transform and simplify Orange Business, whose market is undergoing profound changes. The plan includes the discontinuation of the commercialization of around 150 products and services and the elimination of around 650 jobs in France, on a voluntary basis. As a result, restructuring costs (including provisions corresponding to the best estimate to date of the costs of the plan) were recognized at December 31, 2023, for 176 million euros.
End of Orange Bank activities
On June 28, 2023, the Orange group announced its intention to withdraw from retail banking in France and Spain, as well as the launch of discussions with BNP Paribas with a view to providing Orange Bank customers with a dedicated offering, customer journey and support. Since then, Orange Bank has embarked on negotiations with employee representatives to initiate a departure plan (around 600 jobs in France). At December 31, 2023, this plan is still being negotiated. A restructuring provision totalling 122 million euros was recognized at December 31, 2023, corresponding to the best estimate to date of the costs of the plan.
Some restructuring costs are directly recorded in operating income and are not included in the following movements of provisions:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Restructuring provisions - in the opening balance |
|
162 |
|
185 |
|
117 |
|
Additions with impact on income statement(1) |
|
393 |
|
98 |
|
277 |
|
Reversals with impact on income statement |
|
(26) |
|
(26) |
|
(17) |
|
Discounting with impact on income statement |
|
(1) |
|
(5) |
|
(1) |
|
Utilizations without impact on income statement |
|
(54) |
|
(90) |
|
(191) |
|
Changes in consolidation scope |
|
— |
|
— |
|
— |
|
Translation adjustment |
|
1 |
|
(1) |
|
— |
|
Reclassifications and other items |
|
— |
|
— |
|
(1) |
|
Restructuring provisions - in the closing balance |
|
477 |
|
162 |
|
185 |
|
o/w non-current provisions |
|
196 |
|
43 |
|
61 |
|
o/w current provisions |
|
281 |
|
119 |
|
124 |
|
(1) | In 2023, mainly relates to provisions of 173 million euros for the Orange Business departure plans (including 134 million euros in France) and 122 million euros for the Orange Bank departure plan. |
In 2022, related to provisions of 30 million euros for the Equant departure plans.
In 2021, related to provisions of 155 million euros for the departure plans in Spain.
Accounting policies
Restructuring costs
The adaptation of the Group's activities to changes in the environment may generate costs related to the discontinuation or major transformation of an activity. These actions may have a negative effect on the period during which they are announced or implemented; for instance but not limited to, some of the transformation plans approved by the internal governance bodies.
Provisions are recognized only when the restructuring has been announced and the Group has drawn up or started to implement a detailed formal plan prior to the end of the reporting period.
The types of costs approved by the Group as restructuring costs primarily consist of:
– employee departure plans;
– termination of contracts linked to a fundamental reorganization of the activity (compensation paid to suppliers to terminate contracts, etc.);
– cost of vacant buildings (outside the scope of IFRS 16);
– fundamental transformation plans for communication network infrastructures;
– onerous contracts related to the termination or fundamental reorganization of business: during the course of a contract, when the economic circumstances that prevailed at inception change, some commitments toward the suppliers may become onerous, i.e. the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Consolidated Financial Statements 2023 |
F-56 |
5.4 Broadcasting rights and equipment inventories
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Handset inventories (1) |
|
787 |
|
629 |
|
593 |
|
Other products/services sold |
|
96 |
|
125 |
|
77 |
|
Available broadcasting rights |
|
80 |
|
102 |
|
102 |
|
Other supplies |
|
265 |
|
258 |
|
242 |
|
Gross value |
|
1,228 |
|
1,114 |
|
1,015 |
|
Depreciation |
|
(76) |
|
(67) |
|
(64) |
|
Net book value of equipment inventories and broadcasting rights |
|
1,152 |
|
1,048 |
|
952 |
|
(1) | Of which inventories treated as consignment with distributors amounting to 47 million euros at December 31, 2023, 42 million euros at December 31, 2022 and 68 million euros at December 31, 2021. |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net balance of inventories - in the opening balance |
|
1,048 |
|
952 |
|
814 |
Business related variations |
|
77 |
|
104 |
|
125 |
Changes in the scope of consolidation(1) |
|
25 |
|
3 |
|
9 |
Translation adjustment |
|
2 |
|
(4) |
|
3 |
Reclassifications and other items |
|
0 |
|
(6) |
|
(1) |
Net balance of inventories - in the closing balance |
|
1,152 |
|
1,048 |
|
952 |
(1) |
In 2023, this mainly relates to the acquisition of VOO (see Note 3.2). |
Accounting policies
Network maintenance equipment and equipment intended for sale to customers are measured at the lower of cost or likely realizable net carrying value. The cost corresponds to the purchase or production cost determined by the weighted average cost method.
Handset inventories include inventories treated as consignment with distributors when these are qualified, for accounting purposes, as agents in the sales of handsets bought from the Group.
Film or sports broadcasting rights are recognized in the statement of financial position when they are available for exhibition and expensed when broadcast.
5.5 Prepaid expenses
|
|
December 31, |
|
December 31, |
|
December 31, |
|
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Prepaid external purchases |
|
800 |
|
780 |
|
611 |
|
Other prepaid operating expenses |
|
68 |
|
72 |
|
240 |
|
Total |
|
868 |
|
851 |
|
851 |
|
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Prepaid expenses - in the opening balance |
|
851 |
|
851 |
|
850 |
Business related variations |
|
19 |
|
57 |
|
5 |
Changes in the scope of consolidation |
|
16 |
|
— |
|
— |
Translation adjustment |
|
(27) |
|
(49) |
|
10 |
Reclassifications and other items |
|
10 |
|
(8) |
|
(13) |
Prepaid expenses - in the closing balance |
|
868 |
|
851 |
|
851 |
Consolidated Financial Statements 2023 |
F-57 |
5.6 Trade payables (goods and services)
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Trade payables - in the opening balance |
|
7,067 |
|
6,738 |
|
6,475 |
Business related variations |
|
(124) |
|
297 |
|
41 |
Changes in the scope of consolidation(1) |
|
126 |
|
9 |
|
125 |
Translation adjustment |
|
(36) |
|
(71) |
|
47 |
Reclassifications and other items |
|
10 |
|
95 |
|
49 |
Trade payables - in the closing balance |
|
7,042 |
|
7,067 |
|
6,738 |
o/w trade payables from telecoms activities |
|
7,031 |
|
6,951 |
|
6,652 |
o/w trade payables from Mobile Financial Services |
|
11 |
|
116 |
|
86 |
(1) | Including 123 million euros related to the acquisition of VOO in 2023 and 108 million euros related to the acquisition of Telekom Romania Communications in 2021. |
Supplier payment terms are mutually agreed between the suppliers and Orange in accordance with the regulations in force. Certain key suppliers and Orange have agreed to a flexible payment schedule which, for certain invoices, can be extended up to six months.
Trade payables for goods and services and fixed assets that were subject to a payment extension, and which had an impact on the change in working capital requirement at the end of the period, amounted to approximately 354 million euros at December 31, 2023, 377 million euros at December 31, 2022, and 460 million euros at December 31, 2021.
Accounting policies
Trade payables resulting from commercial transactions and settled in the normal operating cycle are classified as current items. They include payables that the supplier may have assigned, with or without notification, to financial institutions as part of direct or reverse factoring, and those for which the supplier proposed an extended payment period to Orange and for which Orange confirmed the payment arrangement under the agreed terms. Orange considers these financial liabilities to have the characteristics of trade payables, in particular due to the ongoing commercial relationship, the payment schedules ultimately consistent with the operating cycle of a telecommunication operator, in particular for the purchase of primary infrastructure, the supplier’s autonomy in the anticipated relationship and a financial cost borne by Orange that corresponds to the compensation of the supplier for the extended payment schedule agreed.
Trade payables without specified interest rates are measured at par value if the interest component is negligible. Interest-bearing trade payables are recognized at amortized cost.
5.7 Other liabilities
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Orange Money - units in circulation(1) |
|
1,430 |
|
1,242 |
|
1,030 |
|
Provisions for litigation(2) |
|
283 |
|
387 |
|
405 |
|
Submarine cable consortium(1) |
|
272 |
|
230 |
|
191 |
|
Security deposits received |
|
103 |
|
111 |
|
128 |
|
Cable network access fees (URI) |
|
14 |
|
25 |
|
38 |
|
Other |
|
976 |
|
806 |
|
852 |
|
Total |
|
3,078 |
|
2,802 |
|
2,644 |
|
o/w other non-current liabilities |
|
299 |
|
276 |
|
306 |
|
o/w other current liabilities |
|
2,779 |
|
2,526 |
|
2,338 |
|
(1) | These liabilities are offset by the receivables of the same amount (see accounting policies in Note 4.5). |
(2) | See Note 5.2. |
Consolidated Financial Statements 2023 |
F-58 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Other liabilities - in the opening balance |
|
2,802 |
|
2,644 |
|
2,574 |
Business related variations |
|
176 |
|
129 |
|
54 |
Changes in the scope of consolidation(1) |
|
63 |
|
6 |
|
9 |
Translation adjustment |
|
(13) |
|
— |
|
29 |
Reclassifications and other items |
|
52 |
|
23 |
|
(22) |
Other liabilities - in the closing balance |
|
3,078 |
|
2,802 |
|
2,644 |
(1) | Including 41 million euros related to the acquisition of VOO in 2023 (see Note 3.2). |
Note 6 Employee benefits
6.1 Labor expenses
(in millions of euros) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
|
Average number of employees (full-time equivalents)(1) |
|
|
|
127,109 |
|
130,307 |
|
132,002 |
|
Wages and employee benefit expenses |
|
|
|
(8,863) |
|
(8,754) |
|
(9,587) |
|
o/w wages and salaries |
|
|
|
(6,343) |
|
(6,328) |
|
(6,232) |
|
o/w social security charges |
|
|
|
(2,083) |
|
(2,132) |
|
(2,148) |
|
o/w French part-time for seniors plans |
|
6.2 |
|
(364) |
|
(313) |
|
(1,209) |
|
o/w capitalized costs(2) |
|
|
|
788 |
|
818 |
|
849 |
|
o/w other labor expenses(3) |
|
|
|
(860) |
|
(799) |
|
(847) |
|
Employee profit sharing |
|
|
|
(134) |
|
(149) |
|
(145) |
|
Share-based compensation (4) |
|
6.3 |
|
(21) |
|
(16) |
|
(185) |
|
o/w free share award plans |
|
|
|
(21) |
|
(16) |
|
(13) |
|
o/w employee shareholding plan Together 2021 |
|
|
|
— |
|
— |
|
(172) |
|
Total in operating income |
|
|
|
(9,018) |
|
(8,920) |
|
(9,917) |
|
Net interest on the net defined liability in finance costs |
|
|
|
(86) |
|
(13) |
|
(10) |
|
Actuarial (gains)/losses in other comprehensive income |
|
|
|
(96) |
|
176 |
|
59 |
|
Total in comprehensive income |
|
|
|
(9,200) |
|
(8,756) |
|
(9,867) |
|
(1) | Of whom 25% were Orange SA's civil servants at December 31, 2023 (compared with 28% at December 31, 2022 and 31% at December 31, 2021). |
(2) | Capitalized costs correspond to labor expenses included in the cost of assets produced by the Group (see Notes 8.4 and 8.5). |
(3) | Other labor expenses comprise other short-term allowances and benefits, payroll taxes, post-employment benefits and other long-term benefits (except French part-time for seniors plans (TPS)). |
(4) | Includes social security contributions of (2) million euros in 2023, (1) million euros in 2022 and (13) million euros in 2021, whose counterpart on the balance sheet is not presented in equity. |
6.2 Employee benefits
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Post-employment benefits(1) |
|
837 |
|
739 |
|
881 |
|
Other long-term benefits |
|
2,389 |
|
2,358 |
|
2,318 |
|
o/w French part-time for seniors plans |
|
1,711 |
|
1,753 |
|
1,720 |
|
Provisions for employment termination benefits |
|
2 |
|
1 |
|
2 |
|
Other employee-related payables and payroll taxes due |
|
1,923 |
|
1,857 |
|
1,862 |
|
Provisions for social risks and litigation |
|
32 |
|
29 |
|
50 |
|
Total |
|
5,183 |
|
4,985 |
|
5,113 |
|
o/w non-current employee benefits |
|
2,551 |
|
2,567 |
|
2,798 |
|
o/w current employee benefits |
|
2,632 |
|
2,418 |
|
2,316 |
|
(1) | Does not include defined contribution plans. |
The accrued post-employment and other long-term benefits are presented below. These are estimated based on Group headcounts at December 31, 2023, including vested and unvested rights at December 31, 2023, but which the Group estimates will be vested by approximately 2050:
(in millions of euros) |
|
Schedule of benefits to be paid, undiscounted |
|
||||||||||
|
|
2024 |
|
2025 |
|
2026 |
|
2027 |
|
2028 |
|
2029 and beyond |
|
Post-employment benefits |
|
88 |
|
53 |
|
58 |
|
88 |
|
111 |
|
2,701 |
|
Other long-term benefits (1) |
|
626 |
|
562 |
|
453 |
|
324 |
|
132 |
|
30 |
|
o/w French part-time for seniors plans |
|
534 |
|
478 |
|
392 |
|
282 |
|
120 |
|
20 |
|
Total |
|
714 |
|
614 |
|
510 |
|
411 |
|
243 |
|
2,732 |
|
(1) | Provisions for Time Savings Account (Compte Epargne Temps (CET)) and long-term sick leave and long-term leave not included. |
Consolidated Financial Statements 2023 |
F-59 |
6.2.1 Effect of French pension reform
In France, the pension reform law, gradually raising the legal retirement age to 64, was enacted on April 14, 2023.
The effects of this reform have been recognized in the income statement as a plan amendment and break down as follows:
– an additional provision of (241) million euros was recognized for the French part-time for seniors plans (Temps Partiel Senior (TPS)) signed in 2018 and 2021. These agreements provided for the extension of the measures in the event of pension reform for the employees concerned;
– a provision reversal of 22 million euros was recognized on capital-based or annuity-based defined-benefit plans.
6.2.2 Types of post-employment benefits and other long-term benefits
In accordance with the laws and practices in force in the countries where it operates, the Group has obligations in terms of employee benefits:
– with regard to retirement, the majority of employees are covered by defined contribution plans required by law or under national agreements. In France, civil servants employed by Orange SA are covered by the French government sponsored civil and military pension plan. Orange SA’s obligation under the plan is limited to the payment of annual contributions (French law No. 96-660 dated July 26, 1996). Consequently, Orange SA has no obligation to fund future deficits of the pension plans covering its own civil servant employees or any other civil service plans. Expenses recognized under the terms of defined contribution pension plans amounted to (667) million euros in 2023 (compared with (691) million euros in 2022 and (727) million euros in 2021);
– the Group is committed to a limited number of annuity-based defined-benefit plans: notably the Equant plans in the United Kingdom for 215 million euros in 2023 and a plan for senior managers in France for 187 million euros in 2023. Plan assets were transferred to these plans in the United Kingdom and in France. A few years ago, these plans were closed to new subscribers and also closed in the United Kingdom with regard to vesting;
– the Group is also committed to capital-based defined-benefit plans where, in accordance with the law or contractual agreements, employees are entitled to bonuses on retirement, depending on their years of service and end of career salary; this essentially relates to bonuses due upon retirement in France, particularly for employees under private-law contracts (643 million euros for Orange SA, i.e. 79% of the capital-based plans) and for civil servants (13 million euros, i.e. 2% of capital-based plans);
– other post-employment benefits are also granted to retired employees: these are benefits other than defined-benefit and defined-contribution plans;
– other long-term benefits may also be granted such as seniority awards, long-term compensated absences and French part-time for seniors plans (Temps Partiel Senior (TPS)) detailed below.
French part-time for seniors plans
The French part-time for seniors plans (TPS) are accessible to civil servants and employees under private contract with French entities who are eligible for full retirement benefits from January 1, 2028 (before the application of the 2023 pension reform) and who have at least 15 years of service at the Group.
These plans give employees the opportunity to work 50% or 60% of a full-time job whilst receiving:
– base compensation of between 65% and 80% of a full-time job;
– the retirement entitlement benefits of full-time employment during the period in question (both the Company’s and the employee’s contributions);
– and a minimum compensation level.
These plans last for a period of at least 18 months and no longer than 5 years.
The beneficiaries may decide to invest part of their base compensation (5%, 10% or 15%) in a Time Savings Account (Compte Epargne Temps (CET)) with an additional Group contribution. The CET allows for a reduction in the amount of time worked.
As part of the intergenerational agreement renegotiations, a French part-time for seniors (TPS) plan was signed on December 17, 2021, resulting in the recognition of an employee benefit liability of 1,225 million euros at December 31, 2021.
At December 31, 2023, the number of employees who are participating in the French part-time for seniors plans (TPS), and thus included in the provision, is approximately 9,150 employees.
Consolidated Financial Statements 2023 |
F-60 |
6.2.3 Key assumptions used to calculate obligations
The assessment of post-employment benefits and other long-term benefits is based on retirement age calculated in accordance with the provisions applicable to each plan and the necessary conditions to ensure entitlement to a full pension, both of which are often subject to legislative changes.
The valuation of the obligation of the French part-time for seniors plans (TPS) had been sensitive to estimates of the potentially eligible population and to the sign-up rate for the plans (estimated at 70% on average), and the trade-offs that the beneficiaries ultimately made between the different plans proposed. At December 31, 2023, with sign-ups to the 2018 and 2021 French part-time for seniors plans (TPS) no longer possible, the sensitivity to the sign-up rate was not presented.
The discount rates used for the French entities (which accounts for 95% of Orange’s pension and other long-term employee benefit obligations at December 31, 2023) are as follows:
|
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
More than 10 years |
|
3.25% à 4.20 |
% |
3.75% à 3.85 |
% |
0.80% à 1.05 |
% |
Less than 10 years |
|
3.20% à 4.15 |
%(1) |
3.20% à 3.75 |
% |
- 0.15% à 0.40 |
% |
(1) | Rates of 3.45% and 3.20%, respectively, were used to value commitments relating to the 2018 and 2021 French part-time for seniors plans (TPS) (compared with 3.40% and 3.55% at December 31, 2022 and - 0.15% at December 31, 2021). |
The discount rates used for the euro zone are based on corporate bonds rated AA with a duration equivalent to the duration of the obligations.
The increase in annuities of the Equant plans in the United Kingdom is based on inflation (3% used) up to 5%.
Consolidated Financial Statements 2023 |
F-61 |
The main capital-based defined-benefit plan (retirement bonuses for employees under private-law contracts in France) is principally sensitive to employment policy assumptions (Orange has historically had high numbers of employees of retirement age), salary revaluation and long-term inflation of 2%.
The impacts on pension benefit obligations of a change in the key assumption would be as follows:
(in millions of euros) |
|
Rate increases by 50 points |
|
Rate decreases by 50 points |
|
Discount rates(1) |
|
(71) |
|
75 |
|
(1) | Including (16) and 16 million euros for the French part-time for seniors plans (TPS) (short-term duration). |
6.2.4 Commitments and plan assets
(in millions of euros) |
|
Post-employment benefits |
|
Long-term benefits |
|
2023 |
|
2022 |
|
2021 |
|
||||||
|
|
Annuity- |
|
Capital- |
|
Other |
|
French part- |
|
Other |
|
|
|
|
|
|
|
|
|
based |
|
based |
|
|
|
time for |
|
|
|
|
|
|
|
|
|
|
|
plans |
|
plans |
|
|
|
seniors plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(TPS) |
|
|
|
|
|
|
|
|
|
Total benefit obligations in the opening balance |
|
401 |
|
710 |
|
2 |
|
1,753 |
|
605 |
|
3,471 |
|
3,740 |
|
2,812 |
|
Service cost |
|
— |
|
38 |
|
— |
|
29 |
|
140 |
|
208 |
|
131 |
|
1,379 |
(4) |
Plan amendment (1) |
|
— |
|
(23) |
|
— |
|
241 |
|
1 |
|
219 |
|
— |
|
— |
|
Net interest on the defined benefit liability |
|
16 |
|
31 |
|
— |
|
53 |
|
1 |
|
101 |
|
19 |
|
15 |
|
Actuarial losses/(gains) arising from changes of assumptions |
|
(2) |
|
57 |
|
— |
|
13 |
|
— |
|
68 |
|
(490) |
|
(5) |
|
o/w arising from change in discount rate |
|
3 |
|
39 |
|
— |
|
10 |
|
— |
|
52 |
|
(495) |
(2) |
(76) |
|
Actuarial losses/(gains) arising from experience(3) |
|
8 |
|
32 |
|
— |
|
79 |
|
— |
|
120 |
|
459 |
|
(47) |
|
Benefits paid |
|
(21) |
|
(36) |
|
— |
|
(459) |
|
(71) |
|
(587) |
|
(374) |
|
(439) |
|
Translation adjustment and others |
|
4 |
|
20 |
|
— |
|
2 |
|
— |
|
26 |
|
(14) |
|
25 |
|
Total benefit obligations in the closing balance (a) |
|
405 |
|
828 |
|
2 |
|
1,711 |
|
678 |
|
3,625 |
|
3,471 |
|
3,740 |
|
o/w benefit obligations in respect of employee benefit plans that are wholly or partly funded |
|
405 |
|
41 |
|
— |
|
— |
|
— |
|
446 |
|
419 |
|
571 |
|
o/w benefit obligations in respect of employee benefit plans that are wholly unfunded |
|
— |
|
788 |
|
2 |
|
1,711 |
|
678 |
|
3,179 |
|
3,052 |
|
3,169 |
|
Weighted average duration of the plans (in years) |
|
8 |
|
11 |
|
15 |
|
2 |
|
2 |
|
4 |
|
4 |
|
6 |
|
(1) |
Mainly includes the effect of the French pension reform enacted on April 14,2023. |
(2) | Including (352) million euros in France and (130) million euros in the United Kingdom related to the increase in discount rates in 2022. |
(3) | In 2023, actuarial gains and losses were primarily related to experience effects and mainly included the effect of salary revaluations. |
In 2022, actuarial gains related to experience effects mainly took into account an increase in the number of sign-ups for the French part-time for seniors plans (TPS), and particularly the plan signed in 2021.
In 2021, actuarial gains related to experience effects took into account a slowdown in the number of sign-ups for the French part-time for seniors plans (TPS).
(4) | Including 1,225 million euros related to the French part-time for seniors plan (TPS) signed in December 2021. |
(in millions of euros) |
|
Post-employment benefits |
|
Long-term benefits |
|
2023 |
|
2022 |
|
2021 |
|
||||||
|
|
Annuity- |
|
Capital- |
|
Other |
|
French part- |
|
Other |
|
|
|
|
|
|
|
|
|
based |
|
based |
|
|
|
time for |
|
|
|
|
|
|
|
|
|
|
|
plans |
|
plans |
|
|
|
seniors plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(TPS) |
|
|
|
|
|
|
|
|
|
Fair value of plan assets in the opening balance |
|
373 |
|
1 |
|
— |
|
— |
|
— |
|
373 |
|
541 |
|
474 |
|
Net interest on the defined benefit liability |
|
16 |
|
— |
|
— |
|
— |
|
— |
|
16 |
|
7 |
|
4 |
|
(Gains)/Losses arising from experience |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(154) |
|
40 |
|
Employer contributions |
|
9 |
|
1 |
|
— |
|
— |
|
— |
|
10 |
|
11 |
|
20 |
|
Benefits paid by the fund |
|
(18) |
|
— |
|
— |
|
— |
|
— |
|
(19) |
|
(18) |
|
(20) |
|
Translation adjustment and other |
|
4 |
|
15 |
|
— |
|
— |
|
— |
|
19 |
|
(13) |
|
23 |
|
Fair value of plan assets in the closing balance (b) |
|
383 |
|
16 |
|
— |
|
— |
|
— |
|
399 |
|
373 |
|
541 |
|
Funded annuity-based plans represent 12 % of Group social commitments.
Consolidated Financial Statements 2023 |
F-62 |
The funded annuity-based plans are primarily located in the United Kingdom (51%) and France (43%) and their assets are broken down as follows:
Employee benefits in the statement of financial position correspond to commitments less plan assets. These have not been subject to any asset capping adjustment for the periods presented.
(in millions of euros) |
|
Post-employment benefits |
|
Long-term benefits |
|
2023 |
|
2022 |
|
2021 |
|
||||||
|
|
Annuity- |
|
Capital- |
|
Other |
|
French part- |
|
Other |
|
|
|
|
|
|
|
|
|
based |
|
based |
|
|
|
time for |
|
|
|
|
|
|
|
|
|
|
|
plans |
|
plans |
|
|
|
seniors plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(TPS) |
|
|
|
|
|
|
|
|
|
Employee benefits in the opening balance |
|
28 |
|
709 |
|
2 |
|
1,753 |
|
605 |
|
3,097 |
|
3,199 |
|
2,337 |
|
Net expense for the period |
|
1 |
|
46 |
|
— |
|
415 |
|
143 |
|
605 |
|
443 |
|
1,356 |
|
of which plan amendment(1) |
|
— |
|
22 |
|
— |
|
(241) |
|
(1) |
|
(220) |
|
— |
|
— |
|
Employer contributions |
|
(9) |
|
(1) |
|
— |
|
— |
|
— |
|
(10) |
|
(11) |
|
(20) |
|
Benefits directly paid by the employer |
|
(3) |
|
(36) |
|
— |
|
(459) |
|
(71) |
|
(568) |
|
(355) |
|
(419) |
|
Actuarial (gains)/losses generated during the year through other comprehensive income |
|
6 |
|
91 |
|
— |
|
— |
|
— |
|
96 |
|
(176) |
|
(59) |
|
Other |
|
— |
|
2 |
|
— |
|
2 |
|
— |
|
5 |
|
(2) |
|
3 |
|
Employee benefits in the closing balance - Net position (a) - (b) |
|
22 |
|
812 |
|
2 |
|
1,711 |
|
678 |
|
3,226 |
|
3,097 |
|
3,199 |
|
o/w non-current |
|
21 |
|
746 |
|
2 |
|
1,177 |
|
672 |
|
2,618 |
|
2,605 |
|
2,799 |
|
o/w current |
|
2 |
|
66 |
|
— |
|
534 |
|
6 |
|
608 |
|
492 |
|
400 |
|
(1) |
Mainly includes the effect of the French pension reform enacted on April 14, 2023. |
The following table details the net expense:
|
|
Post-employment benefits |
|
Long-term benefits |
|
2023 |
|
2022 |
|
2021 |
|
||||||
|
|
Annuity- |
|
Capital- |
|
Other |
|
French part- |
|
Other |
|
|
|
|
|
|
|
|
|
based |
|
based |
|
|
|
time for |
|
|
|
|
|
|
|
|
|
|
|
plans |
|
plans |
|
|
|
seniors plans |
|
|
|
|
|
|
|
|
|
(in millions of euros) |
|
|
|
|
|
|
|
(TPS) |
|
|
|
|
|
|
|
|
|
Service cost |
|
— |
|
(37) |
|
— |
|
(29) |
|
(140) |
|
(207) |
|
(131) |
|
(1,379) |
(1) |
Plan amendment(2) |
|
— |
|
22 |
|
— |
|
(241) |
|
(1) |
|
(220) |
|
— |
|
— |
|
Net interest on the net defined benefit liability |
|
(1) |
|
(31) |
|
— |
|
(53) |
|
(1) |
|
(86) |
|
(12) |
|
(10) |
|
Actuarial gains/(losses) |
|
— |
|
— |
|
— |
|
(92) |
|
(1) |
|
(93) |
|
(299) |
|
33 |
|
Total |
|
(1) |
|
(46) |
|
— |
|
(415) |
|
(144) |
|
(606) |
|
(443) |
|
(1,356) |
|
o/w expenses in operating income |
|
— |
|
(16) |
|
— |
|
(362) |
|
(143) |
|
(521) |
|
(430) |
|
(1,346) |
|
o/w net interest on the net defined liability in finance cost |
|
(1) |
|
(31) |
|
— |
|
(53) |
|
(1) |
|
(86) |
|
(12) |
|
(10) |
|
(1) | Including (1,225) million euros related to the French part-time for seniors plan (TPS) signed on December 17, 2021. |
(2) | Mainly includes the effect of the French pension reform enacted on April 14, 2023. |
Accounting policies
Post-employment benefits are granted through:
– defined-contribution plans: the contributions, paid to independent institutions which are in charge of the administrative and financial management thereof, are recognized in the fiscal year during which the services are rendered;
Consolidated Financial Statements 2023 |
F-63 |
– defined-benefit plans: the sum of future obligations under these plans are based on actuarial assumptions using the projected unit credit method:
– their calculation is based on demographic (employee turnover, mortality, gender parity, etc.) and financial assumptions (salary increases, inflation, etc.) defined at the level of each entity concerned;
– the discount rate is defined by country or geographical area and by reference to market yields on high quality corporate bonds (or government bonds where no active market exists). It is calculated on the basis of external indices commonly used as a reference for the eurozone;
– actuarial gains and losses on post-employment benefits are fully recorded in other comprehensive income;
– the Group’s defined-benefit plans are not generally funded. In the rare cases where they are, the plan assets are set up by employer and employee contributions which are managed by separate legal entities whose investments are subject to fluctuations in the financial markets. These entities are generally administered by joint committees comprising representatives of the Group and of the beneficiaries. Each committee adopts its own investment strategy which is designed to strike the optimum strategies to match assets and liabilities, based on specific studies performed by external experts. It is generally carried out by fund managers selected by the committees and depends on market opportunities. Assets are measured at fair value, determined by reference to quoted prices, since they are mostly invested in listed securities (mainly equities and bonds) and the use of other asset classes is limited.
Other long-term employee benefits may be granted, such as seniority awards, long-term compensated absences and the French part-time for seniors plan (TPS) agreements. The calculation of the related commitments is based on actuarial assumptions (including demographic, financial and discounting assumptions) similar to those relating to post-employment benefits. The relevant actuarial gains and losses are recognized in net income for the period when they arise.
Termination benefits are subject to provisions (up to the related obligation). For all commitments entailing the payment of termination benefits, actuarial gains and losses are recognized in net income for the period when modifications take place.
6.3 Share-based compensation
Free share award plans in force at December 31, 2023
The Board of Directors approved the implementation of free share award plans (Long-Term Incentive Plans – LTIP) reserved for the Executive Committee, Corporate Officers and senior executives designated as “Executives” or “Leaders.”
Main characteristics
|
|
LTIP 2023 - 2025 |
|
LTIP 2022 - 2024 |
|
LTIP 2021 - 2023 |
Implementation date by the Board of Directors |
|
July 25, 2023 |
|
July 27, 2022 |
|
July 28, 2021 |
Maximum number of free share units (1) |
|
1.9 million |
|
1.8 million |
|
1.8 million |
Estimated number of beneficiaries |
|
1,200 |
|
1,300 |
|
1,300 |
Acquisition date of the rights by the beneficiaries |
|
March 31, 2026 |
|
December 31, 2024 |
|
December 31, 2023 |
Delivery date of the shares to the beneficiaries |
|
March 31, 2026 |
|
March 31, 2025 |
|
March 31, 2024 |
(1) | In countries where the regulations, tax codes or labor laws do not permit awards of stock, the beneficiaries of the plan will receive a cash value based on the market price of Orange stock at the delivery date of the shares. |
Consolidated Financial Statements 2023 |
F-64 |
Continued employment condition
The allocation of rights to beneficiaries is subject to a continued employment condition:
|
|
LTIP 2023 - 2025 |
|
LTIP 2022 - 2024 |
|
LTIP 2021 - 2023 |
Assessment of the employment continuation |
|
From July 25, 2023 |
|
From July 27, 2022 |
|
From July 28, 2021 |
|
|
to March 31, 2026 |
|
to December 31, 2024 |
|
to December 31, 2023 |
Performance conditions
Depending on the plans, the allocation of rights to beneficiaries is subject to the achievement of internal and external performance conditions, i.e.:
– the organic cash flow from telecom activities internal performance condition, as defined in the plan regulations, assessed at the end of the three years of the plan against the objective set by the Board of Directors for the LTIP 20212023, 20222024 and 20232025;
– the Corporate Social Responsibility (CSR) internal performance condition, two-thirds of which comprises the reduction of CO2 emissions and one-third the proportion of women in the Group’s management networks for the Long Term Incentive Plan (LTIP) 20232025. For the 20212023 and 20222024 plans, half of the performance condition is based on reducing customer CO2 emissions, and half on the proportion of women in the Group’s management networks. This performance condition is assessed at the end of the three-year plan against the targets set by the Board of Directors;
– the Total Shareholder Return (TSR) external performance condition. The TSR performance is assessed by comparing the change in the Orange TSR based on the relative performance of the total return for Orange shareholders over the three fiscal years and the change in the TSR calculated on the average values of the benchmark index, Stoxx Europe 600 Telecommunications, or any other index having the same purpose and replacing it during the term of the plan.
Rights subject to the achievement of performance conditions (as a % of the total entitlement):
|
|
LTIP 2023 - 2025 |
|
LTIP 2022 - 2024 |
|
LTIP 2021 - 2023 |
|
Organic cash-flow from telecom activities |
|
40 |
% |
50 |
% |
50 |
% |
Total Shareholder Return (TSR) |
|
30 |
% |
30 |
% |
30 |
% |
Corporate Social Responsability (CSR) |
|
30 |
% |
20 |
% |
20 |
% |
All performance conditions are estimated to be met at the end of the three years of the plan.
Valuation assumptions
|
|
LTIP 2023 - 2025 |
|
LTIP 2022 - 2024 |
|
LTIP 2021 - 2023 |
|
Measurement date |
|
July 25, 2023 |
|
July 27, 2022 |
|
July 28, 2021 |
|
Vesting date |
|
March 31, 2026 |
|
December 31, 2024 |
|
December 31, 2023 |
|
Price of underlying instrument at measurement date |
|
10.73 euros |
|
10.16 euros |
|
9.63 euros |
|
Price of underlying instrument at closing date |
|
10.30 euros |
|
10.30 euros |
|
10.30 euros |
|
Expected dividends (% of the share price) |
|
6.7 |
% |
6.9 |
% |
7.3 |
% |
Risk free yield |
|
3.09 |
% |
0.59 |
% |
-0.68 |
% |
Fair value per share of benefit granted to employees |
|
8.31 euros |
|
7.53 euros |
|
6.33 euros |
|
o/w fair value of internal performance condition |
|
8.86 euros |
|
8.30 euros |
|
7.74 euros |
|
o/w fair value of external performance condition |
|
7.02 euros |
|
5.74 euros |
|
3.04 euros |
|
For the portion of the plan issued in the form of shares, fair value was determined based on the market price of Orange shares on the date of allocation and the expected dividends. The fair value also takes into account the likelihood of achievement of the market performance conditions, determined on the basis of a model constructed using the Monte Carlo method. For the portion of the plan issued in cash, the fair value was determined based on the market price of Orange shares.
Accounting effect
In 2023, an expense of (13) million euros (including social security contributions) was recognized with corresponding entries in equity (11 million euros) and employee benefits (2 million euros).
In 2022, an expense of (11) million euros (including social security contributions) was recognized with corresponding entries in equity (10 million euros) and employee benefits (1 million euros).
In 2021, an expense of (11) million euros (including social security contributions) was recognized with corresponding entries in equity (10 million euros) and employee benefits (1 million euros).
Closure of the free share award plan LTIP 2020–2022
In 2020, the Board of Directors approved the implementation of a free share award plan (LTIP) reserved for the Executive Committee, Corporate Officers and Senior Management.
The shares were delivered to the beneficiaries on March 31, 2023.
Consolidated Financial Statements 2023 |
F-65 |
Main characteristics
|
|
LTIP 2020 - 2022 |
Implementation date by the Board of Directors |
|
July 29, 2020 |
Maximum number of free share units (1) |
|
1.7 million |
Estimated number of beneficiaries at the beginning |
|
1,300 |
Number of free share units delivered at delivery date (1) |
|
0.9 million |
Number of beneficiaries |
|
1,191 |
Acquisition date of the rights by the beneficiaries |
|
December 31, 2022 |
Delivery date of the shares to the beneficiaries |
|
March 31, 2023 |
(1) | In countries where the regulatory conditions, tax codes or labor laws do not permit awards of stock, the beneficiaries of the plan received a cash amount value based on the market price of Orange stock at the delivery date of the shares, on March 31, 2023. |
Continued employment condition
The allocation of rights to beneficiaries was subject to a continued employment condition:
|
|
LTIP 2020 - 2022 |
|
|
From July 29, 2020 |
Assessment of the employment continuation |
|
to December 31, 2022 |
Performance conditions
Depending on the plans, the allocation of rights to beneficiaries was subject to the achievement of internal and external performance conditions, i.e.:
– the organic cash flow from telecom activities internal performance condition, as defined in the plan regulations;
– The internal CSR performance condition, comprising the reduction in the level of CO2 per customer use and the change in the proportion of renewable electricity used by the Group;
– the Total Shareholder Return (TSR) external performance condition. The TSR performance is assessed by comparing the change in the Orange TSR based on the relative performance of the total return for Orange shareholders over the three fiscal years and the change in the TSR calculated on the average values of the benchmark index, Stoxx Europe 600 Telecommunications, or any other index having the same purpose and replacing it during the term of the plan.
Rights subject to the achievement of performance conditions (as a % of the total entitlement):
|
|
LTIP 2020 - 2022 |
|
Organic cash-flow from telecom activities |
|
40 |
% |
Total Shareholder Return (TSR) |
|
40 |
% |
Corporate Social Responsability (CSR) |
|
20 |
% |
Performance was assessed for the years 2020, 2021 and 2022 in relation to the budget for each of these three years, as approved in advance by the Board of Directors. The internal condition relating to organic cash flow from telecom activities was partially met, and the internal condition for CSR (Corporate Social Responsibility) was met, for 2020, 2021 and 2022. In addition, the condition relating to TSR was not met for the period 20202022.
Valuation assumptions
|
|
LTIP 2020 - 2022 |
|
Measurement date |
|
July 29, 2020 |
|
Vesting date |
|
December 31, 2022 |
|
Price of underlying instrument at measurement date |
|
10.47 euros |
|
Price of underlying instrument at vesting date |
|
9.28 euros |
|
Price of underlying instrument at delivery date |
|
10.95 euros |
|
Expected dividends (% of the share price) |
|
6.7 |
% |
Risk free yield |
|
-0.61 |
% |
Fair value per share of benefit granted to employees |
|
6.06 euros |
|
o/w fair value of internal performance condition |
|
8.58 euros |
|
o/w fair value of external performance condition |
|
2.27 euros |
|
For the portion of the free share award plan issued in the form of shares, fair value was determined based on the market price of Orange shares on the award date and the expected dividends. The fair value also took into account the likelihood of achieving the market performance condition, determined on the basis of a model constructed using the Monte Carlo method. For the portion of the plans remitted in the form of cash, the fair value was determined on the basis of the Orange share price.
Accounting effect
The cost of the plan including social security contributions is presented below:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
LTIP 2020 - 2022 (1) |
|
1 |
|
(5) |
|
(5) |
|
(2) |
(1) | With corresponding entries in equity for (10) million euros and in employee-related payables for (1) million euros settled on delivery of the shares in 2023. |
Consolidated Financial Statements 2023 |
F-66 |
Together 2021 Employee Shareholding Plan
On April 21, 2021, the Board of Directors approved the implementation of the Together 2021 Employee Shareholding Plan, designed to strengthen the Group’s employee shareholding. The offer covered a maximum of 260 million euros of subscriptions including matching contributions, expressed as the reference price before discount, and was carried out by buying back existing shares of Orange SA.
The number of shares subscribed at the price of 6.64 euros (taking into account a discount of 30% on the reference market price) amounted to 12 million shares, to which were added 14 million shares allocated free of charge in the form of a matching contribution, i.e. a total of 26 million shares.
The average fair value of the benefit granted to employees and former employees of the Group was at 6.47 euros per share allocated (including free shares), i.e. an expense of (172) million euros (including social security contributions) recognized though equity for 169 million euros and through employee benefits for 3 million euros at December 31, 2021.
Other plans
The other share-based compensation and similar plans implemented in the Orange group are not material at Group level.
Accounting policies
Employee share-based compensation: the fair value of stock options and free shares is determined by reference to the exercise price, the life of the option, the current price of the underlying shares at the grant date, the expected share price volatility, expected dividends, and the risk-free interest rate over the option’s life. Vesting conditions other than market conditions are not part of the fair value assessment, but are part of the grant assumptions (employee turnover, probability of achieving performance criteria).
The determined amount is recognized in labor expenses on a straight-line basis over the vesting period, with corresponding entries for:
– employee benefit liabilities for cash-settled plans, remeasured in profit or loss at each year-end; and
– equity for equity-settled plans.
6.4 Executive compensation
The following table shows the compensation booked by Orange SA and its controlled companies to persons who were members of Orange SA’s Board of Directors or Executive Committee at any time during the year or at the end of the year.
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Short-term benefits excluding employer social security contributions (1) |
|
(12) |
|
(12) |
|
(14) |
|
Short-term benefits: employer’s social security contributions |
|
(4) |
|
(4) |
|
(5) |
|
Post-employment benefits (2) |
|
— |
|
— |
|
— |
|
Share-based compensation (3) |
|
(2) |
|
(1) |
|
(2) |
|
(1) | Includes all compensation; gross salaries, the variable component, bonuses and benefits (excluding termination benefits), benefits in kind, incentives and profit-sharing attendance compensation and the share-based Long Term Incentive Plan (LTIP) which matured at December 31, 2022 and was paid out in 2023. |
(2) | Service cost. |
(3) | Includes employee shareholding plans and share-based Long-Term Incentive Plans (LTIP) in force. |
The total amount of retirement benefits (contractual retirement bonuses and supplementary defined-benefit pension plan) provided in respect of persons who were members of the Board of Directors or Executive Committee at the end of the fiscal year is 1 million euros in 2023 (compared with 2 million euros in 2022 and 4 million euros in 2021).
The Chief Executive Officer, appointed on April 4, 2022, does not have an employment contract.
In the event of dismissal or non-renewal of the corporate office not motivated by serious misconduct or gross negligence, Orange will pay the Chief Executive Officer gross severance pay equal to 12 months of fixed compensation and annual variable compensation paid, with the latter being calculated based on the average annual variable compensation paid for the last 24 months prior to departure from the Company. This severance pay will only be due if the performance conditions for annual variable compensation for the two years prior to departure from the Company were achieved at an average of at least 90%.
In accordance with the Afep-Medef Code, the total amount of severance pay and non-compete compensation that would be paid to the Chief Executive Officer may not exceed 24 months of fixed compensation and annual variable compensation.
The employment contract of the Delegate Chief Executive Officer was suspended at the date of his appointment as a Corporate Officer. His employment contract may be reinstated at the end of his term of office, with recovery of rights.
Executive Committee members’ contracts include a clause providing for a contractual termination settlement not exceeding 15 months of their total gross annual compensation (including the contractual termination benefit).
Orange has not acquired any other goods or services from persons who are, at the end of the fiscal year, members of the Board of Directors or Executive Committee of Orange SA (or any parties related thereto).
Consolidated Financial Statements 2023 |
F-67 |
Note 7 Impairment losses and goodwill
7.1 Impairment losses
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Romania |
|
— |
|
(789) |
|
— |
Mobile Financial Services |
|
— |
|
(28) |
|
— |
Spain |
|
— |
|
— |
|
(3,702) |
Total of impairment of goodwill |
|
— |
|
(817) |
|
(3,702) |
Impairment tests on Cash-Generating Units (CGUs) may result in impairment losses on goodwill (see Note 7.2) and on fixed assets (see Note 8.3).
At December 31, 2023
At December 31, 2023, impairment tests do not result in the Group recognizing any impairment losses.
At December 31, 2022
Romania
In Romania, the goodwill impairment of (789) million euros mainly reflected:
−a material increase in the discount rate due to changes in market assumptions;
−greater competitive pressure; and
−the downward revision of the business plan compared with the plan used at December 31, 2021, particularly in the early years.
Following the impairment of goodwill in Romania, the net carrying value of the assets of the CGU was reduced to the value in use of current and long-term assets at 100% at December 31, 2022, i.e. 1.7 billion euros.
Mobile Financial Services
Impairment of (49) million euros was recorded on Mobile Financial Services (including (28) million euros on goodwill and (21) million euros on fixed assets) due to deterioration of the business plan.
At December 31, 2022, the net carrying value of goodwill was reduced to zero and the value in use of the CGU amounted to 0.4 billion euros.
At December 31, 2021
In Spain, the business plan has been significantly revised downward since December 31, 2020, in view of:
− | a deteriorating competitive environment despite market consolidation operations (affected by the erosion of average revenue per user); and |
− | uncertainties surrounding the continuation of the health crisis (delay in the forecasts for economic recovery). |
The revision of the business plan in Spain has led to the recognition during the first -half of 2021 of (3,702) million euros impairment of goodwill, bringing the net carrying value of tested assets down to the value in use of current and long-term assets, i.e. 7.7 billion euros.
Consolidated Financial Statements 2023 |
F-68 |
7.2 Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
|
||||
|
|
Gross value |
|
Accumulated |
|
Net book value |
|
Net book value |
|
Net book value |
|
|
|
|
|
impairment |
|
|
|
|
|
|
|
|
|
|
|
losses |
|
|
|
|
|
|
|
France |
|
13,189 |
|
(13) |
|
13,176 |
|
13,176 |
|
14,364 |
|
Europe |
|
13,862 |
|
(8,571) |
|
5,291 |
|
4,586 |
|
6,079 |
|
Spain |
|
6,550 |
|
(3,816) |
|
2,734 |
|
2,734 |
|
3,170 |
|
Belgium |
|
1,733 |
|
(713) |
|
1,020 |
|
336 |
|
336 |
|
Slovakia |
|
806 |
|
— |
|
806 |
|
806 |
|
806 |
|
Romania |
|
1,806 |
|
(1,359) |
|
447 |
|
447 |
|
1,504 |
|
Poland |
|
2,815 |
|
(2,664) |
|
151 |
|
135 |
|
135 |
|
Moldova |
|
84 |
|
— |
|
84 |
|
78 |
|
80 |
|
Luxembourg |
|
68 |
|
(19) |
|
50 |
|
50 |
|
50 |
|
Africa & Middle East |
|
2,252 |
|
(849) |
|
1,403 |
|
1,420 |
|
1,465 |
|
Burkina Faso |
|
428 |
|
— |
|
428 |
|
428 |
|
428 |
|
Côte d’Ivoire |
|
417 |
|
(42) |
|
375 |
|
375 |
|
375 |
|
Morocco |
|
255 |
|
— |
|
255 |
|
249 |
|
265 |
|
Jordan |
|
284 |
|
(170) |
|
114 |
|
118 |
|
111 |
|
Liberia |
|
88 |
|
— |
|
88 |
|
91 |
|
86 |
|
Sierra Leone |
|
58 |
|
— |
|
58 |
|
73 |
|
114 |
|
Cameroon |
|
134 |
|
(90) |
|
44 |
|
44 |
|
44 |
|
Other |
|
589 |
|
(548) |
|
41 |
|
42 |
|
42 |
|
Orange Business |
|
2,913 |
|
(650) |
|
2,263 |
|
2,289 |
|
2,237 |
|
Totem(1) |
|
1,624 |
|
— |
|
1,624 |
|
1,624 |
|
n/a |
|
Mobile Financial Services |
|
28 |
|
(28) |
|
— |
|
— |
|
28 |
|
International Carriers & Shared Services |
|
18 |
|
— |
|
18 |
|
18 |
|
18 |
|
Goodwill |
|
33,886 |
|
(10,112) |
|
23,775 |
|
23,113 |
|
24,192 |
|
(1) |
In 2021, Totem's figures were included in France and Spain segments (see Note 1.1). |
(in millions of euros) |
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
|
Note |
|
2023 |
|
2022 |
|
2021 |
Gross Value in the opening balance |
|
|
|
33,140 |
|
33,626 |
|
33,273 |
Acquisitions(1) |
|
3.2 |
|
675 |
|
(206) |
|
266 |
Disposals |
|
|
|
— |
|
— |
|
(4) |
Translation adjustment |
|
|
|
71 |
|
(280) |
|
91 |
Reclassifications and other items |
|
|
|
— |
|
— |
|
— |
Gross Value in the closing balance |
|
|
|
33,886 |
|
33,140 |
|
33,626 |
Accumulated impairment losses in the opening balance |
|
|
|
(10,028) |
|
(9,435) |
|
(5,678) |
Impairment |
|
7.1 |
|
— |
|
(817) |
|
(3,702) |
Disposals |
|
|
|
— |
|
— |
|
— |
Translation adjustment |
|
|
|
(84) |
|
225 |
|
(55) |
Accumulated impairment losses in the closing balance |
|
|
|
(10,112) |
|
(10,028) |
|
(9,435) |
Net book value of goodwill |
|
|
|
23,775 |
|
23,113 |
|
24,192 |
(1) | In 2023, mainly includes goodwill on the acquisition of VOO of 684 million euros (see Note 3.2). |
In 2022, mainly included the finalization of the purchase price allocation for Telekom Romania Communications, resulting in the revision of the amount of preliminary goodwill recognized in 2021 for (272) million euros.
In 2021, mainly included preliminary goodwill of 272 million euros related to the acquisition of Telekom Romania Communications.
Consolidated Financial Statements 2023 |
F-69 |
7.3 Key assumptions used to determine recoverable amounts
The key operational assumptions reflect past experience and expected trends: unforeseen changes have in the past affected and could continue to significantly affect these expectations. In this respect, the review of expectations could affect the margin of recoverable amounts over the carrying value tested (see Note 7.4) and result in impairment of goodwill and fixed assets.
In 2023, the Group updated its financial trajectories.
The discount rates and perpetual growth rates used to determine the values in use were revised as follows at the end of December 2023:
– discount rates have risen as a result of the deteriorating macroeconomic environment (higher interest rates), and may include a specific premium reflecting an assessment of the risks of achieving certain business plans, or of country risks;
– perpetual growth rates were maintained for most geographical areas.
At December 31, 2023, the business plans and key operating assumptions were sensitive to the following:
– inflation, in particular rising energy prices, and the ability to preserve margins by adjusting rates and optimizing costs and investments;
– the fiercely competitive nature of the markets in which the Group operates, where price pressure is strong;
– the decisions by regulatory and competition authorities in terms of stimulating business investment, and rules for awarding 5G operating licenses and market concentration; and
– specifically in the Middle East and the Maghreb (Jordan, Egypt and Tunisia) as well as in some African countries (Mali, Democratic Republic of the Congo, Central African Republic, Sierra Leone and Burkina Faso): changes in the political situation and security with their resulting negative economic impacts on the overall business climate.
The parameters used to determine the recoverable amount of the main consolidated activities or the activities most sensitive to the assumptions of the impairment tests are as follows:
December 31, 2023 |
|
Basis of |
|
Used |
|
Methodology |
|
Cost of |
|
Discount rate |
|
Perpetuity |
|
||
|
|
recoverable |
|
source |
|
|
|
equity |
|
Post-tax |
|
Pre-tax |
|
growth rate |
|
|
|
amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
|
|
|
|
|
n/a |
|
6.3 |
% |
8.4 |
% |
0.8 |
% |
Spain |
|
|
|
|
|
|
|
n/a |
|
7.8 |
% |
10.3 |
% |
1.5 |
% |
Poland |
|
Value in use |
|
Internal plan |
|
Discounted cash |
|
n/a |
|
8.0 |
% |
9.4 |
% |
2.0 |
% |
Enterprise |
|
|
|
|
|
flow |
|
n/a |
|
8.5 |
% |
11.7 |
% |
0.5 |
% |
Mobile Financial Services |
|
|
|
|
|
|
|
13.0 |
% |
n/a |
|
n/a |
|
2.1 |
% |
Romania |
|
|
|
|
|
|
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
Belgium/ Luxembourg |
|
Fair value |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
Basis of |
|
Used |
|
Methodology |
|
Cost of |
|
Discount rate |
|
Perpetuity |
|
||
|
|
recoverable |
|
source |
|
|
|
equity |
|
Post-tax |
|
Pre-tax |
|
growth rate |
|
|
|
amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
|
|
|
|
|
n/a |
|
6.3 |
% |
8.4 |
% |
0.8 |
% |
Spain |
|
|
|
|
|
|
|
n/a |
|
7.5 |
% |
10.0 |
% |
1.5 |
% |
Poland |
|
|
|
|
|
|
|
n/a |
|
7.8 |
% |
9.1 |
% |
2.0 |
% |
Enterprise |
|
Value in use |
|
Internal plan |
|
Discounted cash |
|
n/a |
|
6.8 |
% |
9.2 |
% |
0.5 |
% |
Romania |
|
|
|
|
|
flow |
|
n/a |
|
10.5 |
% |
11.8 |
% |
2.5 |
% |
Belgium |
|
|
|
|
|
|
|
n/a |
|
7.0 |
% |
8.8 |
% |
0.8 |
% |
Mobile Financial Services |
|
|
|
|
|
|
|
12.3 |
% |
n/a |
|
n/a |
|
2.0 |
% |
Côte d'Ivoire / Burkina Faso / Liberia |
|
Fair value |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
Basis of |
|
Used |
|
Methodology |
|
Cost of |
|
Discount rate |
|
Perpetuity |
|
||
|
|
recoverable |
|
source |
|
|
|
equity |
|
Post-tax |
|
Pre-tax |
|
growth rate |
|
|
|
amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
|
|
|
|
|
n/a |
|
5.8 |
%(1) |
7.6 |
% |
0.8 |
% |
Spain |
|
|
|
|
|
|
|
n/a |
|
6.8 |
% |
8.4 |
% |
1.5 |
% |
Poland |
|
Value in use |
|
Internal plan |
|
Discounted cash |
|
n/a |
|
7.3 |
% |
8.5 |
% |
1.5 |
% |
Enterprise |
|
|
|
|
|
flow |
|
n/a |
|
8.3 |
% |
11.1 |
% |
0.3 |
% |
Romania |
|
|
|
|
|
|
|
n/a |
|
7.0 |
% |
7.9 |
% |
2.5 |
% |
Belgium/Luxembourg |
|
Fair value |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
(1) | The post-tax discount rate for France included a corporate tax reduction of 25.83% since 2022. |
The work done by the Group to take into account ESMA's position on the inclusion of leases (IFRS 16) in impairment testing (IAS 36) confirms that there is no impact on the conclusions of the Group's impairment tests at December 31, 2023.
Consolidated Financial Statements 2023 |
F-70 |
At December 31, 2023, the fair value of the Belgium/Luxembourg combination is defined according to the conversion ratio that would be expected in the context of the transaction for Nethys to acquire a stake in Orange Belgium by converting its stake in VOO into Orange Belgium shares (see Note 3.2).
At December 31, 2023, the fair value of Romania is defined on the basis of the expected merger of Orange Romania Communications (formerly Telekom Romania Communications) into Orange Romania, with the Romanian state acquiring a stake in Orange Romania (see Note 3.2).
At December 31, 2021, the fair value of the Belgium/Luxembourg combination had been defined on the basis of the conditional voluntary public tender offer for the shares of Orange Belgium, which closed on May 4, 2021 (see Note 3.2).
The Group’s listed subsidiaries are Orange Polska (Warsaw Stock Exchange), Orange Belgium (Brussels Stock Exchange), Jordan Telecom (Amman Stock Exchange), Sonatel (Regional Stock Exchange (BRVM)), and, since December 30, 2022, Orange Côte d’Ivoire (BRVM). The aggregated share of these subsidiaries, which publish their own regulated information, is less than or equal to 20% of consolidated revenues, operating income and net income excluding non-recurring transactions.
7.4 Sensitivity of recoverable amounts
Because of the correlation between operating cash flows and investment capacity, a sensitivity of net cash flows is used. As cash flows at the terminal point represent a significant portion of the recoverable amount, a change of plus or minus 10% in these cash flows is presented as a sensitivity assumption.
The cash flows are those generated by operating activities net of acquisitions and disposals of property, plant and equipment and intangible assets (including a tax expense at a standard rate, repayment of lease liabilities and debt related to financed assets, related interest expenses and excluding other interest expenses). An additional analysis was carried out on the most sensitive CGUs for which the amount of lease liabilities was material in order to confirm the absence of impairment losses or additional impairment losses.
A sensitivity analysis was carried out on the main consolidated activities or the activities most sensitive to the assumptions of the impairment tests and is presented below to enable readers of the financial statements to estimate the effects of their own estimates. Changes in cash flows, perpetual growth rates or discount rates exceeding the sensitivity levels presented have been observed in the past.
|
|
|
|
|
|
Decrease in the discounted cash |
|
|
|
Increase in discount rate in |
|
Decrease in the perpetual |
|
flows of the terminal value in |
|
|
|
order for the recoverable |
|
growth rate in order for the |
|
order for the recoverable amount |
|
|
|
amount to be equal to the net |
|
recoverable amount to be |
|
to be equal to the net carrying |
|
|
|
carrying value (in basis points) |
|
equal to the net carrying value |
|
value (in %) |
|
|
|
|
|
(in basis points) |
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
France |
|
+134 bp |
|
(115) bp |
|
-25 |
% |
Spain |
|
+67 bp |
|
(71) bp |
|
-12 |
% |
Poland |
|
+254 bp |
|
(295) bp |
|
-33 |
% |
Enterprise |
|
+279 bp |
|
(369) bp |
|
-36 |
% |
December 31, 2022 |
|
|
|
|
|
|
|
France |
|
+139 bp |
|
(120) bp |
|
-26 |
% |
Spain |
|
+44 bp |
|
(47) bp |
|
-8 |
% |
Poland |
|
+249 bp |
|
(272) bp |
|
-32 |
% |
Enterprise |
|
+100 bp |
|
(115) bp |
|
-19 |
% |
Belgium |
|
+97 bp |
|
(97) bp |
|
-15 |
% |
Sierra Leone |
|
+50 bp |
|
(72) bp |
|
-6 |
% |
December 31, 2021 |
|
|
|
|
|
|
|
France |
|
+234 bp |
|
(217) bp |
|
-39 |
% |
Spain |
|
+19 bp |
|
(21) bp |
|
-4 |
% |
Poland |
|
+269 bp |
|
(221) bp |
|
-30 |
% |
Enterprise |
|
+1,125 bp |
|
(1,026) bp |
|
-83 |
% |
Romania |
|
+44 bp |
|
(45) bp |
|
-10 |
% |
Mobile Financial Services
At December 31, 2023, the value in use of the Mobile Financial Services CGU was revised on the basis of key valuation assumptions established by local governance. The revised assumptions resulted in the identification of a negative margin, however, the impairment of fixed assets of (42) million euros recognized over the period (see Note 8.3), represents all the assets eligible for impairment under IAS 36 at December 31, 2023. Sensitivity analyses are therefore not relevant.
Consolidated Financial Statements 2023 |
F-71 |
Romania
At December 31, 2023, the fair value of Romania is defined on the basis of the expected merger of Orange Romania Communications (formerly Telekom Romania Communications) into Orange Romania, with the Romanian state acquiring a stake in Orange Romania (see Note 3.2). Sensitivity analyses, calculated on cash flows and financial parameters, are therefore not relevant for this CGU at December 31, 2023.
Jordan
At December 31, 2023, a sensitivity analysis was carried out on each of the following criteria, taken individually:
– 1% increase in the discount rate;
– 1% decrease in the perpetual growth rate;
– 10% decrease in terminal – year cash flows.
This sensitivity analysis identified an estimated impairment risk of up to 11% of the net value of goodwill.
Other entities not shown above individually represent less than 4% of the recoverable amount of the consolidated entities, or do not present a recoverable amount close to the net value.
Consolidated Financial Statements 2023 |
F-72 |
Accounting policies
Goodwill recognized as an asset in the statement of financial position comprises the excess calculated:
– either on the basis of the equity interest acquired (and for business combinations after January 1, 2010, with no subsequent changes for any additional purchases of non-controlling interests); or
– on a 100% basis, leading to the recognition of goodwill relating to non-controlling interests.
Goodwill is not amortized. It is tested for impairment at least annually and more frequently when there is an indication that it may be impaired. Thus, changes in general economic and financial trends, the different levels of resilience of the telecommunication operators with respect to the deterioration of local economic environments, changes in the market capitalization of telecommunication operators, as well as financial performance compared to market expectations represent external impairment indicators that are analyzed by the Group, together with internal performance indicators, in order to assess whether an impairment test should be performed more than once a year.
These tests are performed at the level of each Cash-Generating Unit (CGU) (or group of CGUs). These generally correspond to business segments or to each country in the Africa and Middle East region and Europe. This is reviewed if the Group changes the level at which it monitors return on investment for goodwill testing purposes.
To determine whether an impairment loss should be recognized, the carrying value of the assets and liabilities of the CGUs or groups of CGUs is compared to their recoverable amount, for which Orange uses mostly the value in use.
Value in use is estimated as the present value of the expected future cash flows. Cash flow projections are based on economic and regulatory assumptions, license renewal assumptions and sales activity and investment forecasts drawn up by the Group’s management, as follows:
– cash flow projections are based on three-to-five-year business plans and include a tax cash flow calculated as EBIT (operating income) multiplied by the statutory tax rate (excluding the impact of deferred tax and unrecognized tax loss carryforwards at the date of valuation). In the case of recent acquisitions, longer-term business plans may be used;
– post-tax cash flow projections beyond that timeframe may be extrapolated by applying a declining or flat growth rate for the next year, and then a perpetual growth rate reflecting the expected long-term growth in the market;
– post-tax cash flows are subject to a post-tax discount rate, using rates which incorporate a relevant premium reflecting a risk assessment for the implementation of certain business plans or country risks. The value in use derived from these calculations is identical to the one that would result from discounting pre-tax cash flows at pre-tax discount rates.
The key operating assumptions used to determine values in use are common across all of the Group’s business segments. Key assumptions for most CGUs include:
– key revenue assumptions, which reflect market level, penetration rate of the offers and market share, positioning of the competition’s offers and their potential impact on market price levels and their transposition to the Group’s offer bases, regulatory authority decisions on pricing of services to customers and on access and pricing of inter-operator services, technology migration of networks (e.g. extinction of copper local loops), decisions of competition authorities in terms of concentration or regulation of adjacent sectors such as cable;
– key cost assumptions, on the level of marketing expenses required to deal with the pace of product line renewals and the positioning of the competition, the ability to adjust costs to potential changes in revenues or the effects of natural attrition and employee departure plans underway;
– key assumptions on the level of capital expenditure, which may be affected by the rollout of new technologies, by decisions of regulatory authorities relating to licenses and spectrum allocation, deployment of fiber networks, mobile network coverage, sharing of network elements or obligations to open up networks to competitors.
The tested net carrying values include goodwill, land and assets with finite useful lives (property, plant and equipment, intangible assets and net working capital requirements including intra-group balances). The Orange brand, an asset with an indefinite useful life, is subject to a specific test, see Note 8.3.
If an entity partially owned by the Group includes goodwill attributable to non-controlling interests, the impairment loss is allocated between the shareholders of Orange SA and the non-controlling interests on the same basis as that on which profit or loss is allocated (i.e. ownership interest).
Impairment loss for goodwill is recorded definitively in operating income.
Consolidated Financial Statements 2023 |
F-73 |
Note 8 Fixed assets
8.1 Gains (losses) on disposal of fixed assets
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
Transfer price(1) |
|
292 |
|
347 |
|
163 |
Net book value of assets sold |
|
(201) |
|
(187) |
|
(111) |
Proceeds from the disposal of fixed assets |
|
91 |
|
159 |
|
52 |
(1) | The proceeds from disposal of fixed assets is used to calculate eCAPEX. This operating performance indicator relates to acquisition of property, plant and equipment and intangible assets excluding telecommunication licenses and financed assets, net of the price of disposal of fixed assets. |
8.2 Depreciation and amortization
(in millions of euros)
|
|
|
|
|
|
|
Depreciation and amortization of intangible assets |
|
|
|
|
|
|
|
|
Depreciation and amortization of property, plant and equipment |
|
|
|
|
|
|
Depreciation and amortization of intangible assets
(in millions of euros)
Consolidated Financial Statements 2023 |
F-74 |
Depreciation and amortization of property, plant and equipment
(in millions of euros)
Accounting policies
Assets are amortized to expense their cost (generally with no residual value deducted) on a basis that reflects the pattern in which their future economic benefits are expected to be consumed. The straight-line basis is usually applied. The useful lives are reviewed annually and are adjusted if current estimated useful lives differ from previous estimates. This may be the case for outlooks on the implementation of new technologies (for example, the replacement of copper local loop by optical fiber). These changes in accounting estimates are recognized prospectively.
Main assets |
Depreciation period (average) |
Brands acquired |
Up to 15 years, except for the Orange brand with indefinite useful life |
Customer bases acquired |
Expected life of the commercial relationship: 3 to 21 years |
Mobile network licenses |
Grant period from the date when the network is technically ready and the service can be marketed |
Indefeasible Rights of Use of submarine and terrestrial cables |
Shorter of the expected period of use and the contractual period, generally less than 20 years |
Patents |
20 years maximum |
Software |
5 years maximum |
Development costs |
3 to 5 years |
Buildings |
10 to 30 years |
Transmission and other network equipment |
5 to 10 years |
Copper cables, optical fiber and civil works |
10 to 30 years |
Computer hardware |
3 to 5 years |
8.3 Impairment of fixed assets
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Mobile Financial Services(1) |
|
(42) |
|
(21) |
|
— |
Poland |
|
(5) |
|
(2) |
|
(11) |
France |
|
(1) |
|
(15) |
|
(1) |
International Carriers & Shared Services |
|
1 |
|
0 |
|
(2) |
Orange Business |
|
8 |
|
(20) |
|
0 |
Other |
|
(8) |
|
1 |
|
(2) |
Total of impairment of fixed assets |
|
(47) |
|
(56) |
|
(17) |
In 2022, the impairment of fixed assets resulted from impairment tests on Cash-Generating Units (CGUs), described in Note 7.1.
Key assumptions and sensitivity of the recoverable amount of the Orange brand
The key assumptions and sources of sensitivity used in the assessment of the recoverable amount of the Orange brand are similar to those used for the goodwill of consolidated activities (see Note 7.3), which affect the revenue base and potentially the level of brand royalties.
Consolidated Financial Statements 2023 |
F-75 |
Other assumptions that affect the assessment of the recoverable amount are as follows:
|
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Basis of recoverable amount |
|
Value in use |
|
Value in use |
|
Value in use |
|
Used source |
|
Internal plan |
|
Internal plan |
|
Internal plan |
|
Methodology |
|
Discounted net fees |
|
Discounted net fees |
|
Discounted net fees |
|
Perpetuity growth rate |
|
1.4 |
% |
1.4 |
% |
1.3 |
% |
Post-tax discount rate |
|
8.5 |
% |
8.2 |
% |
7.7 |
% |
Pre-tax discount rate |
|
11.0 |
% |
10.5 |
% |
9.8 |
% |
The sensitivity analysis did not highlight any risk of impairment of the Orange brand.
Accounting policies
Given the nature of its assets and businesses, most of the Group’s individual assets do not generate cash inflows independent of those of the Cash-Generating Units. The recoverable amount is therefore determined at the level of the CGU (or group of CGUs) to which the assets belong, according to a method similar to that described for goodwill.
The Orange brand has an indefinite useful life and is not amortized but is tested for impairment at least annually. Its recoverable amount is assessed based on the expected contractual royalties discounted in perpetuity (and included in the business plan), less costs attributable to the brand’s owner.
8.4 Other intangible assets
|
|
December 31, 2023 |
|
December 31, |
|
December 31, |
||||||
|
|
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
|
Gross value |
|
Accumulated |
|
Accumulated |
|
Net book |
|
Net book |
|
Net book |
|
|
|
|
depreciation |
|
impairment |
|
value |
|
value |
|
value |
|
|
|
|
and |
|
|
|
|
|
|
|
|
(in millions of euros) |
|
|
|
amortization |
|
|
|
|
|
|
|
|
Telecommunications licenses |
|
12,891 |
|
(5,962) |
|
(52) |
|
6,878 |
|
6,869 |
|
6,691 |
Software |
|
14,400 |
|
(9,951) |
|
(106) |
|
4,344 |
|
4,280 |
|
4,331 |
Orange brand |
|
3,133 |
|
— |
|
— |
|
3,133 |
|
3,133 |
|
3,133 |
Other brands |
|
1,106 |
|
(145) |
|
(897) |
|
65 |
|
60 |
|
69 |
Customer bases |
|
5,443 |
|
(5,085) |
|
(14) |
|
344 |
|
246 |
|
346 |
Other intangible assets |
|
2,089 |
|
(1,553) |
|
(201) |
|
335 |
|
358 |
|
370 |
Total |
|
39,063 |
|
(22,695) |
|
(1,269) |
|
15,098 |
|
14,946 |
|
14,940 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net book value of other intangible assets - in the opening balance |
|
14,946 |
|
14,940 |
|
15,135 |
Acquisitions of other intangible assets |
|
2,365 |
|
2,678 |
|
2,842 |
o/w telecommunications licenses(1) |
|
721 |
|
1,060 |
|
926 |
Impact of changes in the scope of consolidation(2) |
|
208 |
|
35 |
|
(888) |
Disposals |
|
(7) |
|
(5) |
|
(4) |
Depreciation and amortization |
|
(2,332) |
|
(2,418) |
|
(2,363) |
Impairment |
|
(48) |
|
(33) |
|
(40) |
Translation adjustment |
|
(69) |
|
(245) |
|
92 |
Reclassifications and other items(3) |
|
35 |
|
(7) |
|
165 |
Net book value of other intangible assets - in the closing balance |
|
15,098 |
|
14,946 |
|
14,940 |
(1) | In 2023, mainly includes the purchase of 5G licenses in Belgium for 303 million euros and the 5G license in Poland for 121 million euros. |
In 2022, mainly included the acquisition of the 5G licenses in Romania for 319 million euros and in Belgium for 213 million euros, and for the 2600 MHz band license in Egypt for 311 million euros.
In 2021, included the acquisition of the 5G license in Spain for 611 million euros and the renewals in France of the 2G licenses for 207 million euros and the 3G licenses for 57 million euros.
(2) | In 2023, mainly includes the effects of the acquisition of VOO for 166 million euros (see Note 3.2). |
In 2021, mainly included the effects of the loss of exclusive control on Orange Concessions (see Note 3.2).
(3) | In 2021, mainly included incentive bonus fees on penetration rates and business continuity payable by the Public Initiative Networks to the local authorities for 195 million euros. |
Internal costs capitalized as intangible assets
Internal costs capitalized as intangible assets include to labor expenses and amount to 423 million euros in 2023, 418 million euros in 2022, and 399 million euros in 2021.
Consolidated Financial Statements 2023 |
F-76 |
Information on telecommunications licenses at December 31, 2023
Orange’s principal commitments under licenses awarded are disclosed in Note 16.
To take into account the principle of technological neutrality, Orange now presents licenses by frequency band rather than by technology. As a result, the presentation of information relating to licenses was changed with effect from 2023.
|
|
|
|
|
|
|
|
|
(in millions of euros) |
|
Frequency band |
|
Gross value |
|
Net book value |
|
Residual useful life(1) |
France |
|
700 MHz |
|
960 |
|
699 |
|
11.9 to 14.6 |
|
|
800 MHz |
|
932 |
|
413 |
|
8.0 to 12.9 |
|
|
900 MHz |
|
93 |
|
67 |
|
1.3 to 7.3 |
|
|
1,800 MHz |
|
117 |
|
83 |
|
1.3 to 12.9 |
|
|
2.1 GHz |
|
343 |
|
135 |
|
1.3 to 7.6 |
|
|
2.6 GHz |
|
302 |
|
126 |
|
7.8 to 12.9 |
|
|
3.4 - 3.8 GHz |
|
876 |
|
695 |
|
11.9 to 14.6 |
|
|
|
|
3,624 |
|
2,219 |
|
|
Spain |
|
700 MHz |
|
547 |
|
498 |
|
17.8 |
|
|
800 MHz |
|
474 |
|
221 |
|
7.3 |
|
|
900 MHz |
|
127 |
|
57 |
|
7.0 |
|
|
2.6 GHz |
|
102 |
|
54 |
|
7.0 to 19.4 |
|
|
3.4 - 3.8 GHz |
|
494 |
|
397 |
|
7.0 to 14.9 |
|
|
Other |
|
851 |
|
28 |
|
|
|
|
|
|
2,596 |
|
1,254 |
|
|
Poland |
|
800 MHz |
|
703 |
|
334 |
|
7.1 |
|
|
2.1 GHz |
|
81 |
|
76 |
|
14.0 |
|
|
3.4 - 3.8 GHz |
|
126 |
|
126 |
|
15.0 |
|
|
Other |
|
217 |
|
58 |
|
|
|
|
|
|
1,127 |
|
594 |
|
|
Morocco |
|
900 MHz |
|
742 |
|
122 |
|
7.2 |
|
|
Other |
|
214 |
|
118 |
|
|
|
|
|
|
956 |
|
241 |
|
|
Romania |
|
700 MHz |
|
136 |
|
131 |
|
24.0 |
|
|
900 MHz |
|
173 |
|
50 |
|
5.3 |
|
|
1,500 MHz |
|
62 |
|
60 |
|
24.0 |
|
|
3.4 - 3.8 GHz |
|
120 |
|
120 |
|
22.0 |
|
|
Other |
|
417 |
|
136 |
|
|
|
|
|
|
909 |
|
497 |
|
|
Egypt |
|
2.1 GHz |
|
237 |
|
132 |
|
7.8 |
|
|
2.6 GHz |
|
294 |
|
283 |
|
10.1 |
|
|
Other |
|
311 |
|
65 |
|
|
|
|
|
|
842 |
|
481 |
|
|
Belgium |
|
700 MHz |
|
146 |
|
137 |
|
18.7 |
|
|
800 MHz |
|
138 |
|
75 |
|
10.9 |
|
|
900 MHz |
|
83 |
|
79 |
|
19.0 |
|
|
1,400 MHz |
|
89 |
|
87 |
|
19.6 |
|
|
2.1 GHz |
|
82 |
|
78 |
|
19.0 |
|
|
3.4 - 3.8 GHz |
|
67 |
|
62 |
|
16.3 |
|
|
Other |
|
75 |
|
56 |
|
|
|
|
|
|
680 |
|
573 |
|
|
Jordan |
|
900 MHz |
|
196 |
|
71 |
|
25.4 |
|
|
2.6 GHz |
|
68 |
|
51 |
|
29.4 to 34.8 |
|
|
3.4 - 3.8 GHz |
|
64 |
|
62 |
|
24.2 |
|
|
Other |
|
190 |
|
71 |
|
|
|
|
|
|
518 |
|
255 |
|
|
Other countries |
|
|
|
1,639 |
|
762 |
|
|
Total |
|
|
|
12,891 |
|
6,878 |
|
|
(1) | In number of years, at December 31, 2023. |
Main telecommunication licenses obtained or renewed in 2023
– Orange Belgium obtained 303 million euros of licenses on the 900 MHz, 1,400 MHz, 1,800 MHz and 2,100 MHz frequency bands. This purchase resulted in the recognition of an intangible asset of 303 million euros after the auctions in 2022.
– Orange Egypt obtained 113 million euros on the 2.6 GHz frequency band. This purchase resulted in the recognition of an intangible asset of 113 million euros.
– Orange Polska obtained 121 million euros on the 3.4 GHz – 3.8 GHz frequency band. This purchase resulted in the recognition of an intangible asset of 121 million euros.
– Sonatel obtained 53 million euros on the 700 MHz and 3.4 GHz – 3.8 GHz frequency bands. This purchase resulted in the recognition of an intangible asset of 53 million euros.
Consolidated Financial Statements 2023 |
F-77 |
Accounting policies
Intangible assets mainly consist of acquired brands, acquired customer bases, telecommunications licenses and software, as well as operating rights granted under certain concession agreement.
Intangible assets are initially recognized at acquisition or production cost. The payments indexed to revenue, especially for some telecommunications licenses, are expensed in the relevant periods.
The operating rights granted under certain concession arrangements are recognized in other intangible assets and correspond to the right to charge users of the public service (see Note 4.1).
Consolidated Financial Statements 2023 |
F-78 |
8.5 Property, plant and equipment
|
|
December 31, 2023 |
|
|
December 31, |
|
December 31, |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
(in millions of euros) |
|
Gross value |
|
Accumulated |
|
Accumulated |
|
Net book |
|
|
Net book |
|
Net book |
|
|
|
|
|
depreciation |
|
impairment |
|
value |
|
|
value |
|
value |
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
|
|
|
|
|
|
|
|
|
Networks and devices |
|
104,303 |
|
(74,208) |
|
(388) |
|
29,707 |
|
|
28,088 |
|
27,155 |
|
Land and buildings |
|
8,302 |
|
(5,783) |
|
(230) |
|
2,289 |
|
|
2,299 |
|
2,117 |
|
IT equipment |
|
3,767 |
|
(3,001) |
|
(2) |
|
763 |
|
|
793 |
|
784 |
|
Other property, plant and equipment |
|
1,739 |
|
(1,299) |
|
(6) |
|
434 |
|
|
460 |
|
428 |
|
Total property, plant and |
|
118,111 |
|
(84,291) |
|
(627) |
|
33,193 |
|
|
31,640 |
|
30,484 |
|
Networks and devices are broken down as follows:
|
Fixed-access networks |
|
Mobile access networks |
|
Core & Transmission networks |
|
|
|
|
|
|
|
Customer Devices & Equipment |
|
|||
|
|
|
|
|
|
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Net book value of property, plant and equipment - in the opening balance |
|
31,640 |
|
30,484 |
|
29,075 |
|
Acquisitions of property, plant and equipment |
|
5,698 |
|
6,329 |
|
5,947 |
|
o/w financed assets |
|
233 |
|
229 |
|
40 |
|
Impact of changes in the scope of consolidation (1) |
|
1,142 |
|
262 |
|
130 |
|
Disposals and retirements |
|
(192) |
|
(181) |
|
(102) |
|
Depreciation and amortization |
|
(5,109) |
|
(4,725) |
|
(4,796) |
|
o/w fixed assets (2) |
|
(4,980) |
|
(4,618) |
|
(4,712) |
|
o/w financed assets |
|
(129) |
|
(107) |
|
(84) |
|
Impairment |
|
1 |
|
(23) |
|
(5) |
|
Translation adjustment |
|
13 |
|
(291) |
|
129 |
|
Reclassifications and other items (3) |
|
1 |
|
(216) |
|
105 |
|
Net book value of property, plant and equipment - in the closing balance |
|
33,193 |
|
31,640 |
|
30,484 |
|
In 2022, included 261 million euros for the purchase price allocation of Telekom Romania Communications (see Note 3.2).
In 2021, mainly related to the effects of the acquisition of Telekom Romania Communications and the loss of exclusive control on the FiberCo in Poland (see Note 3.2).
(2) | Includes the effect of extending the amortization period for the copper network in France from 2022, resulting in a reduction in depreciation and amortization of around 130 million euros from 2022. |
Financed assets
Financed assets include at December 31, 2023 the set-up boxes in France financed by an intermediary bank: they meet the standard criterion of a tangible asset according to IAS 16. The associated payables to these financed assets are presented in financial liabilities and are included in the definition of the net financial debt (see Note 13.3)
Internal costs capitalized as property, plant and equipment
Internal costs capitalized as property, plant and equipment mainly include labor expenses and amount to 365 million euros in 2023, 400 million euros in 2022, and 450 million euros in 2021.
Accounting policies
Property, plant and equipment is made up of tangible fixed assets and financed assets. It mainly comprises network facilities and equipment.
Consolidated Financial Statements 2023 |
F-79 |
The gross value of property, plant and equipment is made up of its acquisition or production cost, which includes study and construction fees as well as enhancement costs that increase the capacity of equipment and facilities. Maintenance and repair costs are expensed as incurred, except where they serve to increase the asset’s productivity or extend its useful life.
The cost of property, plant and equipment also includes the estimated cost of dismantling and removing the fixed asset and restoring the site where it was located under the obligation incurred by the Group.
The roll-out of assets by stage, particularly network assets, in the Group’s assessment, does not generally require a substantial period of preparation. As a result, the Group does not generally capitalize the interest expense incurred during the construction and acquisition phase for its property, plant and equipment and intangible assets.
In France, the regulatory framework governing the fiber optic network roll-out (Fiber To The Home – FTTH) organizes the access by commercial operators to the last mile of networks rolled out by another operator on a co-funding basis (ab initio or a posteriori) or through a line access. The sharing of rights and obligations between the various operators co-financing the last mile of networks is classified as a joint operation in accordance with IFRS 11 “Partnerships”: Orange only recognizes in its assets the portions (built or acquired) in networks that it has co-financed or built.
The Group has entered into network sharing arrangements with other mobile operators on a reciprocal basis, which may cover passive infrastructure sharing, active network and even spectrum equipment.
8.6 Fixed assets payables
(in millions of euros) |
|
2023 |
|
2022 |
|
|
2021 |
Fixed assets payable - in the opening balance |
|
4,581 |
|
4,481 |
|
|
4,640 |
Business related variations |
|
(45) |
|
124 |
|
|
(206) |
o/w telecommunication licences payable(1) |
|
214 |
|
51 |
|
|
143 |
Changes in the scope of consolidation(2) |
|
9 |
|
— |
|
|
(199) |
Translation adjustment |
|
(15) |
|
(54) |
|
|
31 |
Reclassifications and other items(3) |
|
4 |
|
30 |
|
|
216 |
Fixed assets payable - in the closing balance |
|
4,534 |
|
4,581 |
|
|
4,481 |
o/w long-term fixed assets payable |
|
1,608 |
|
1,480 |
|
|
1,370 |
o/w short-term fixed assets payable |
|
2,926 |
|
3,101 |
|
|
3,111 |
(1) | In 2023, includes 85 million euros for the acquisition of the 5G license in Belgium and 77 million euros for the acquisition of the 5G license in Poland. |
In 2022, included 241 million euros relating to the acquisition of the 5G license in Romania, and (153) million euros paid out for 5G licenses in France.
In 2021, included 192 million euros relating to the acquisition of 5G in Spain and (150) million euros paid out for the 5G license in France.
(2) | In 2021, included (241) million euros resulting from the loss of exclusive control on Orange Concessions (see Note 3.2). |
(3) | In 2021, mainly included incentive bonus fees on penetration rates and business continuity payable by the Public Initiative Networks to the local authorities for 195 million euros. |
Accounting policies
These payables are generated from trading activities. The payment terms may be over several years in the case of infrastructure roll-out and license acquisition. Payables due in more than 12 months are presented in non-current items. Trade payables without specified interest rates are measured at par value if the interest component is negligible. Interest-bearing trade payables are recognized at amortized cost.
Trade payables also include payables that the supplier may have disposed of, with or without notifying financial institutions, in a direct or reverse factoring arrangement (see Note 5.6).
Firm commitments to purchase fixed assets are presented as unrecognized contractual commitments (see Note 16), net of any down payments which are recorded as down payments on fixed assets.
Consolidated Financial Statements 2023 |
F-80 |
8.7 Dismantling provisions
Asset dismantling obligations mainly relate to the restoration of mobile telephony antenna sites, the treatment of telephone poles, management of waste electrical and electronic equipment and the dismantling of telephone booths.
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Dismantling provisions - in the opening balance |
|
696 |
|
897 |
|
901 |
|
Provision reversal with impact on income statement |
|
— |
|
— |
|
— |
|
Discounting with impact on income statement |
|
23 |
|
36 |
|
11 |
|
Utilizations without impact on income statement |
|
(29) |
|
(20) |
|
(18) |
|
Changes in provision with impact on assets(1) |
|
35 |
|
(221) |
|
3 |
|
Changes in the scope of consolidation |
|
2 |
|
— |
|
— |
|
Translation adjustment |
|
11 |
|
(5) |
|
— |
|
Reclassifications and other items |
|
— |
|
10 |
|
— |
|
Dismantling provisions - in the closing balance |
|
738 |
|
696 |
|
897 |
|
o/w non-current provisions |
|
698 |
|
670 |
|
876 |
|
o/w current provisions |
|
40 |
|
26 |
|
21 |
|
(1)In 2023 and 2022, mainly includes the effect of the increase in discount rates.
Accounting policies
The Group has an obligation to dismantle installed technical equipment and restore the technical sites it occupies.
When the obligation arises, a dismantling asset is recognized against a dismantling provision.
The provision is based on dismantling costs (on a per-unit basis for telephone poles, devices and telephone booths, and on a per-site basis for mobile antennas) incurred by the Group to meet its environmental commitments over the asset dismantling and site restoration planning. The provision is assessed on the basis of the identified costs for the current fiscal year, extrapolated for future years using the best estimate that will allow the obligation to be settled. This estimate is reviewed annually and the provision is adjusted where necessary against the dismantling asset recognized and the underlying assets, if any. The provision is discounted at a rate set by geographical area corresponding to the average risk-free rate of a 15-year government bond.
When the obligation is settled, the provision is reversed against the net carrying value of the dismantling asset and the net carrying value of the underlying assets if the dismantling asset is less than the financial provision reversal.
Note 9 Lease agreements
In the course of its activities, the Group regularly enters into leases as a lessee. These leases are divided between the following asset categories:
− Land and buildings;
− Networks and devices;
− IT equipment;
− Other.
Accounting policies
The mandatory IFRS 16 “Leases,” has been applied within the Group since January 1, 2019.
IFRS 16 defines a lease as a contract that conveys to the lessee the right to control the use of an identified asset. All leases are recognized in the balance sheet as an asset reflecting the right to use the leased assets and a corresponding liability reflecting the related lease obligations (see Notes 9.1 and 9.2). In the income statement, amortization of right-of-use assets (see Note 9.1) is presented separately from interest on lease liabilities. In the statement of cash flows, cash outflows relating to interest expenses impact cash flows provided by operating activities, while principal repayments on lease liabilities impact cash flows related to financing activities.
For the lessor, assets subject to leases must be presented in the balance sheet according to the nature of the asset and the associated lease revenues as income on a straight-line basis over the lease term.
When the Group carries out a transaction categorized as sale and leaseback in accordance with IFRS 16, a right-of-use asset is recognized in proportion to the previous carrying value of the asset corresponding to the right-of-use asset retained to offset a lease liability. Gains (losses) on disposal of fixed assets are recognized in the income statement in proportion to the rights actually transferred to the buyer-lessor. The adjustment of the gains (losses) on disposal recognized in the income statement for the share on which the Group retains its user rights via the lease corresponds to the difference between the right-of-use asset and the lease liability recognized in the balance sheet.
Finally, the Group applies the two exemptions provided for in IFRS 16, i.e. leases with a term of 12 months or less that are not automatically renewable and those where the replacement value of the underlying asset is less than approximately 5,000 euros. Leases covered by either of these two exemptions are presented in off-balance sheet commitments and an expense is recognized in “external purchases” in the income statement.
The Group classifies as a lease a contract that confers to the lessee the right to control the use of an identified asset for a given period, including a service contract if it contains a lease component.
Consolidated Financial Statements 2023 |
F-81 |
The Group has defined 4 major categories of leases:
− Land and buildings: these leases mainly concern commercial (point of sale) or service activity (offices and headquarters) leases, as well as leases of technical buildings not owned by the Group. Real-estate leases entered into in France generally have long terms (nine-year commercial leases with early termination options after three and six years, known as “3/6/9 leases”) (see Note 9.2). However, depending on the geographical location of the leases, their legal term may vary and the Group may be required to adopt a specific enforceable period taking into account the local legal and economic environment;
− Networks and devices: the Group is required to lease a certain number of assets in connection with its mobile activities. This is notably the case for land for antenna installation, mobile sites leased from third-party operators and certain “TowerCos” contracts (companies operating telecom masts). Leases are also entered into as part of fixed-line network activities. These leases mainly concern access to the local loop where the Orange group is a market challenger (full or partial unbundling), as well as the lease of land transmission cables;
− IT equipment: this asset category primarily comprises leases for servers and hosting space in data centers;
− Other: this asset category primarily comprises leases for vehicles and technical equipment.
9.1 Right-of-use assets
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
||||||
|
|
Gross value |
|
Accumulated |
|
Accumulated |
|
Net book |
|
Net book value |
|
Net book value |
|
|
|
|
depreciation |
|
impairment |
|
value |
|
|
|
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
|
|
|
|
|
|
|
Land and buildings |
|
8,574 |
|
(3,704) |
|
(446) |
|
4,424 |
|
4,667 |
|
4,930 |
Networks and devices(1) |
|
5,112 |
|
(1,590) |
|
— |
|
3,522 |
|
3,049 |
|
2,516 |
IT equipment |
|
132 |
|
(73) |
|
— |
|
59 |
|
59 |
|
55 |
Other |
|
385 |
|
(215) |
|
— |
|
170 |
|
161 |
|
201 |
Total right-of-use assets |
|
14,203 |
|
(5,582) |
|
(446) |
|
8,175 |
|
7,936 |
|
7,702 |
(1) |
The increase in right-of-use assets includes the effect of the development of a secondary market for co-financed and leased lines. |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net book value of right-of-use assets - in the opening balance |
|
7,936 |
|
7,702 |
|
7,009 |
Increase (new right-of-use assets)(1) |
|
1,317 |
|
1,930 |
|
2,172 |
Changes in the scope of consolidation |
|
30 |
|
— |
|
34 |
Depreciation and amortization |
|
(1,522) |
|
(1,507) |
|
(1,481) |
Impairment (2) |
|
(69) |
|
(54) |
|
(91) |
Changes in the assessments |
|
472 |
|
(49) |
|
74 |
Translation adjustment |
|
10 |
|
(35) |
|
46 |
Reclassifications and other items |
|
1 |
|
(52) |
|
(62) |
Net book value of right-of-use assets - in the closing balance |
|
8,175 |
|
7,936 |
|
7,702 |
(1) | In 2021, included the right-of-use assets related to the new headquarters of the Orange group (Bridge) in France for 294 million euros. |
(2) | Impairment losses on right-of-use assets mainly concern real estate leases classified as onerous contracts. |
Depreciation and amortization of right-of-use assets
In 2023, the rental expense recognized in external purchases in the income statement amounts to (111) million euros, compared with (134) million euros in 2022 and (147) million euros in 2021 (see Note 5.1). It includes lease payments on contracts of 12 months or less which are not automatically renewable, contracts where the new value of the underlying asset is less than 5,000 euros, and variable lease payments which were not taken into account in the measurement of the lease liability.
Consolidated Financial Statements 2023 |
F-82 |
Accounting policies
A right-of-use asset is recognized in assets, with a corresponding lease liability (see Note 9.2). This right-of-use asset is equal to the amount of the lease liability, plus any direct costs incurred under certain leases, such as fees, lease negotiation expenses or administration costs, and less rent-free period liabilities and lessor financial contributions.
This right-of-use asset is depreciated in the income statement on a straight-line basis over the lease term chosen by the Group, in accordance with the lease terms defined in IFRS 16.
Work performed by the lessee and modifications to the leased asset, as well as guarantee deposits, are not components of the right-of-use asset and are recognized in accordance with other standards.
9.2 Lease liabilities
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Lease liabilities - in the opening balance |
|
8,410 |
|
8,065 |
|
7,371 |
Increase with counterpart in right-of-use |
|
1,289 |
|
1,915 |
|
2,158 |
Changes in the scope of consolidation |
|
30 |
|
1 |
|
34 |
Decrease in lease liabilities following rental payments |
|
(1,645) |
|
(1,514) |
|
(1,624) |
Changes in the assessments |
|
493 |
|
(43) |
|
74 |
Translation adjustment |
|
1 |
|
(29) |
|
47 |
Reclassifications and other items |
|
(10) |
|
16 |
|
4 |
Lease liabilities - in the closing balance |
|
8,568 |
|
8,410 |
|
8,065 |
o/w non-current lease liabilities |
|
7,099 |
|
6,901 |
|
6,696 |
o/w current lease liabilities |
|
1,469 |
|
1,509 |
|
1,369 |
The following table details the undiscounted future cash flows of lease liabilities as known at December 31, 2023:
(in millions of euros) |
|
Total |
|
2024 |
|
2025 |
|
2026 |
|
2027 |
|
2028 |
|
2029 and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
beyond |
Undiscounted lease liabilities |
|
9,658 |
|
1,618 |
|
1,492 |
|
1,248 |
|
1,090 |
|
952 |
|
3,257 |
Accounting policies
The Group recognizes a liability (i.e. a lease liability) at the date the underlying asset is made available. This lease liability is equal to the present value of fixed and in-substance fixed payments not paid at that date, plus any amounts that Orange is reasonably certain to pay at the end of the lease, such as the exercise price of a purchase option (where it is reasonably certain to be exercised), or penalties payable to the lessor for terminating the lease (where termination is reasonably certain).
The Group only takes the lease component of the contract into account when measuring the lease liability. For certain asset classes where leases include both service and lease components, the Group may recognize a single contract, classified as a lease (i.e. without distinguishing between the service and lease components).
Orange systematically determines the lease term as the period during which leases cannot be terminated, plus periods covered by any extension options that the lessee is reasonably certain to exercise and any termination options that the lessee is reasonably certain not to exercise. In the case of “3/6/9” leases in France, the term adopted is assessed on a contract-by-contract basis.
The term is also defined taking into account any laws and practices specific to each jurisdiction or business sector regarding firm lease commitment terms granted by lessors. The Group nonetheless assesses the enforceable term, based on the circumstances of each lease, taking into account certain indicators such as the existence of significant penalties in the event of termination by the lessee. To determine the length of this enforceable period, the Group considers the economic importance of the leased asset and the assumptions made in its strategic plan.
When non-removable leasehold improvements have been made to leased assets, the Group assesses, on a case-by-case basis, whether these improvements provide an economic benefit when determining the enforceable term of the lease.
When a lease includes a purchase option, the Group considers the enforceable term to be equal to the useful life of the underlying asset where the Group is reasonably certain to exercise the purchase option.
For each lease, the discount rate used is determined based on the yield on government bonds in the lessee country, taking into account the term and currency of the lease, plus the Group’s credit spread.
Consolidated Financial Statements 2023 |
F-83 |
After the lease commencement date, the amount of the lease liability may be reassessed to reflect changes introduced by the following main cases:
− a change in term resulting from a contract amendment or a change in the assessment of the reasonable certainty that a renewal option will be exercised or a termination option will not be exercised;
− a change in the amount of lease payments, for example following the application of a new index or rate in the case of variable payments;
− a change in the assessment of whether a purchase option will be exercised;
− any other contractual change, for example a change to the scope of the lease or its underlying asset.
Note 10 Taxes
10.1 Operating taxes and levies
Although comprising a directly identifiable counterpart, the periodic spectrum fees are presented within the operating taxes and levies as they are set by and paid to States and local authorities.
10.1.1 Operating taxes and levies recognized in profit or loss
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Territorial Economic Contribution, IFER and similar taxes |
|
(559) |
|
(642) |
|
(652) |
|
Spectrum fees |
|
(374) |
|
(373) |
|
(360) |
|
Levies on telecommunication services |
|
(314) |
|
(333) |
|
(329) |
|
Other operating taxes and levies |
|
(547) |
|
(534) |
|
(586) |
|
Total |
|
(1,794) |
|
(1,882) |
|
(1,926) |
|
The 2023 French Finance Act has enacted the reduction of the applicable rate of the contribution on the added value of companies (Cotisation sur la Valeur Ajoutée des Entreprises (CVAE)) in France, from January 1, 2023, with the aim of eliminating this tax by 2027. The applicable rate for this tax will be gradually reduced over 4 years. It was reduced from 0.75% to 0.375% for 2023.
The Territorial Economic Contribution (Contribution Economique Territoriale (CET)) of Orange SA fell by 109 million euros in 2023 compared with 2022, mainly due to its main component, the contribution on the added value of companies (CVAE).
The breakdown of operating taxes and levies per geographical area is as follows:
(in millions of euros)
|
|
France |
|
Africa and Middle East |
|
Spain |
|
Other subsidiaries |
|
|
|
|
|
||||
|
|
|
|
|
Consolidated Financial Statements 2023 |
F-84 |
10.1.2 Operating taxes and levies in the statement of financial position
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Value Added Tax (VAT) |
|
1,111 |
|
1,114 |
|
1,025 |
|
Other operating taxes and levies |
|
122 |
|
151 |
|
138 |
|
Operating taxes and levies - receivables |
|
1,233 |
|
1,265 |
|
1,163 |
|
Value added tax (VAT) |
|
(743) |
|
(687) |
|
(682) |
|
Territorial Economic Contribution, IFER and similar taxes |
|
(109) |
|
(96) |
|
(89) |
|
Spectrum fees |
|
(21) |
|
(19) |
|
(18) |
|
Levies on telecommunication services |
|
(132) |
|
(107) |
|
(143) |
|
Other operating taxes and levies |
|
(479) |
|
(496) |
|
(504) |
|
Operating taxes and levies - payables |
|
(1,483) |
|
(1,405) |
|
(1,436) |
|
Operating taxes and levies - net |
|
(251) |
|
(140) |
|
(273) |
|
Changes in operating taxes and levies
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Net tax liabilities and operating taxes and levies - in the opening balance |
|
(140) |
|
(273) |
|
(175) |
|
Operating taxes and levies recognized in profit or loss |
|
(1,794) |
|
(1,882) |
|
(1,926) |
|
Operating taxes and levies paid(1) |
|
1,680 |
|
1,906 |
|
1,914 |
|
Changes in the scope of consolidation(2) |
|
(33) |
|
— |
|
(67) |
|
Translation adjustment |
|
21 |
|
42 |
|
(19) |
|
Reclassifications and other items |
|
16 |
|
68 |
|
(1) |
|
Net tax liabilities and operating taxes and levies - in the closing balance |
|
(251) |
|
(140) |
|
(273) |
|
(1) | In 2021, included the reclassification in the consolidated statement of cash flows of 34 million euros as investing activities corresponding to the VAT disbursement by Orange Polska in connection with the loss of exclusive control on the FiberCo in Poland (see Note 3.2). |
(2) | In 2023, includes mainly the acquisition of VOO. |
In 2021, included the losses of exclusive control on Orange Concessions in France and on the FiberCo in Poland.
Accounting policies
Value Added Tax (VAT) receivables and payables correspond to the VAT collected or deductible from various states. Collections and remittances to states have no impact on the income statement.
In the normal course of business, the Group regularly deals with differences of interpretation of tax law with the tax authorities, which can lead to tax reassessments or tax disputes.
Operating taxes and levies are measured by the Group at the amount expected to be paid or recovered from the tax authorities of each country, based on its interpretation with regard to the application of tax legislation. The Group calculates its tax assets and liabilities (including provisions) based on the technical merits of the positions it defends versus the tax authorities.
Consolidated Financial Statements 2023 |
F-85 |
10.2 Income taxes
10.2.1 Income tax expense
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Orange SA tax group |
|
(243) |
|
(541) |
|
3 |
|
• Current tax |
|
(150) |
|
(417) |
|
(129) |
|
• Deferred tax |
|
(92) |
|
(124) |
|
133 |
|
Spanish tax group |
|
6 |
|
50 |
|
(115) |
|
• Current tax |
|
1 |
|
— |
|
— |
|
• Deferred tax |
|
5 |
|
50 |
|
(115) |
|
Africa & Middle East |
|
(552) |
|
(528) |
|
(431) |
|
• Current tax |
|
(544) |
|
(536) |
|
(420) |
|
• Deferred tax |
|
(9) |
|
8 |
|
(11) |
|
United Kingdom |
|
(103) |
|
(74) |
|
(264) |
|
• Current tax |
|
(104) |
|
(75) |
|
(76) |
|
• Deferred tax |
|
1 |
|
1 |
|
(188) |
|
Other subsidiaries |
|
20 |
|
(172) |
|
(156) |
|
• Current tax |
|
(178) |
|
(140) |
|
(125) |
|
• Deferred tax(1) |
|
198 |
|
(32) |
|
(31) |
|
Total Income taxes |
|
(871) |
|
(1,265) |
|
(962) |
|
Current tax |
|
(975) |
|
(1,168) |
|
(750) |
|
Deferred tax |
|
103 |
|
(97) |
|
(212) |
|
(1) |
In 2023, includes a deferred tax income of 190 million euros recognized for Belgian subsidiaries (other than the Orange Belgium group) to reflect the favorable effect of the change in business projections for the recoverability of deferred tax assets. |
Consolidated Financial Statements 2023 |
F-86 |
The breakdown of current tax by geographical area or by tax group is as follows:
(in millions of euros)
Orange SA tax group
Current tax expense
The current tax expense reflects the requirement to pay income tax calculated on the basis of taxable income.
In 2023, the reduction in the current tax expense is due in particular to changes in the income of entities in the French tax group.
In 2022, the applicable corporate tax rate in France had declined from 28.41% to 25.83%. This decline in the corporate tax rate resulted in a reduction in the current tax expense of 35 million euros in 2022.
In 2021, the current tax expense included a tax income resulting from the reassessment of an income tax charge booked in periods prior to those presented in the amount of 376 million euros.
Deferred tax expense
Deferred taxes are recorded at the tax rate applicable at the time of their reversal, i.e. 25.83%.
In 2021, the deferred tax expense included a deferred tax income of 316 million euros related to the recognition of an employee benefit liability for the French part-time for seniors plans (Temps Partiel Seniors – TPS).
Spanish tax group
Current tax expense
The corporate tax rate applicable is 25% for all fiscal years presented. The current income tax expense mainly represents the obligation to pay a minimum level of tax calculated on the basis of 75% of taxable income due to the 25% limit on the use of available tax loss carryforwards. This tax expense may then be reduced by the use of tax credits.
A temporary measure was introduced in the Corporate Income Tax Law applicable in 2023 for the determination of the year tax base under the tax consolidation regime. This measure limits to 50% the allocation of the individual negative tax bases generated by the entities that compose the Group. The 50% not allocated may be used in the following ten years, in equal parts.
In 2023, as in 2021, the Spanish tax group is profitable. The use of tax credits explains the absence or the low current tax expense recognized for the fiscal years.
In 2022, the Spanish tax group was in deficit, which explained the absence of current tax expense recognized for the fiscal year.
Deferred tax expense
In 2022 and 2023, deferred tax incomes of respectively 53 million euros and 30 million euros were recognized, to reflect the favorable effect of the change in business projections for the recoverability of deferred tax assets.
In 2021, a deferred tax expense was recognized for (162) million euros, to reflect the negative impact of the unfavorable developments in business plans on the recoverable amount of deferred tax assets.
Africa & Middle East
The main contributors to the income tax expense are the entities of the group operating in Guinea, Mali, Côte d’Ivoire and Senegal:
− in Guinea, the corporate tax rate is 35% and the current tax expense amounts to (110) million euros in 2023, (94) million euros in 2022 and (63) million euros in 2021;
– in Mali, the corporate tax rate is 30% and the current tax expense amounts to (75) million euros in 2023, (64) million euros in 2022 and (67) million euros in 2021;
Consolidated Financial Statements 2023 |
F-87 |
– in Côte d’Ivoire, the corporate tax rate is 30% and the current tax expense amounts to (74) million euros in 2023, (86) million euros in 2022 and (91) million euros in 2021;
– in Senegal, the corporate tax rate is 30% and the current tax expense amounts to (58) million euros in 2023, (55) million euros in 2022 and (53) million euros in 2021.
United Kingdom
Current tax expense
The applicable corporate tax rate in the United Kingdom increased from 19% in 2022 to 25% from 2023. This increase in the corporate tax rate results in an increase in the current tax expense of (20) million euros in 2023.
The current tax expense primarily reflects the taxation of activities related to the Orange brand.
Deferred tax expense
In 2021, the corporate tax rate increase to 25% applicable from 2023 was passed (compared with 19% before). The deferred tax expense for the fiscal year therefore included an increase of (188) million euros in deferred tax liabilities recognized on the Orange brand.
Other subsidiaries
Deferred tax expense
In 2023, a deferred tax income of 190 million euros has been recognized for Belgian subsidiaries (other than the Orange Belgium group), to reflect the favorable effect of the change in business projections for the recoverability of deferred tax assets.
Group tax proof
(in millions of euros) |
|
Note |
|
2023 |
|
2022 |
|
2021 |
|
Profit before tax |
|
|
|
3,763 |
|
3,882 |
|
1,740 |
|
Statutory tax rate in France |
|
|
|
25.83 |
% |
25.83 |
% |
28.41 |
% |
Theoretical income tax |
|
|
|
(972) |
|
(1,003) |
|
(494) |
|
Reconciling items : |
|
|
|
|
|
|
|
|
|
Impairment of goodwill (1) |
|
7.1 |
|
— |
|
(211) |
|
(1,052) |
|
Impact related to the loss of exclusive control on Orange Concessions |
|
|
|
— |
|
— |
|
557 |
|
Share of profits (losses) of associates and joint ventures |
|
|
|
(8) |
|
— |
|
1 |
|
Adjustment of prior-year taxes |
|
|
|
8 |
|
(13) |
|
(23) |
|
Recognition / (derecognition) of deferred tax assets(2) |
|
|
|
190 |
|
83 |
|
(149) |
|
Difference in tax rates (3) |
|
|
|
(27) |
|
10 |
|
85 |
|
Change in applicable tax rates (4) |
|
|
|
— |
|
— |
|
(235) |
|
Other reconciling items(5) |
|
|
|
(62) |
|
(130) |
|
348 |
|
Effective income tax |
|
|
|
(871) |
|
(1,265) |
|
(962) |
|
Effective tax rate (ETR) |
|
|
|
23.16 |
% |
32.59 |
% |
55.31 |
% |
(1) | Reconciliation effect calculated based on the tax rate applicable to the parent company of the Group. The difference in tax rates between the parent company and the subsidiary locally is presented below in “Difference in tax rates.” |
In 2021 and 2022, the impairment losses recorded on goodwill generated a reconciliation effect at the Group tax rate of (1,052) million euros and (211) million euros, respectively. Excluding these effects, the Group ETR was 17.7% in 2021 and 26.9% in 2022.
(2) | In 2023, deferred tax incomes of respectively 190 million euros and 30 million euros have been recognized for Belgian subsidiaries (other than the Orange Belgium group) and in Spain, to reflect the favorable effect of the change in business projections for the recoverability of deferred tax assets. |
In 2021, a deferred tax expense was recognized in Spain for (162) million euros, to reflect the negative impact of the unfavorable developments in business plans on the recoverable amount of deferred tax assets.
(3) | The Group is present in jurisdictions in which tax rates are different from the French tax rate, mainly in Guinea (tax rate of 35%), in Poland (tax rate of 19%), in Senegal (tax rate of 30%), in Mali (tax rate of 30%) and in Côte d'Ivoire (tax rate of 30%). |
(4) | Takes into account the remeasurement of deferred tax following tax legislation introducing changes in tax rates, as well as the impact of recognizing deferred tax in the period at tax rates different from the rate applicable in the current fiscal year. |
(5) | In 2021, included a tax income resulting from the reassessment of an income tax expense booked in periods prior to those presented. |
10.2.2 Income tax on other comprehensive income
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
||||||
|
|
Gross |
|
Deferred |
|
Gross |
|
Deferred |
|
Gross |
|
Deferred |
|
|
|
amount |
|
tax |
|
amount |
|
tax |
|
amount |
|
tax |
|
Actuarial gains and losses on post-employment benefits |
|
(96) |
|
20 |
|
176 |
|
(47) |
|
59 |
|
(14) |
|
Assets at fair value |
|
5 |
|
— |
|
(112) |
|
— |
|
11 |
|
— |
|
Cash flow hedges |
|
(269) |
|
66 |
|
295 |
|
(70) |
|
317 |
|
(84) |
|
Translation adjustment |
|
(28) |
|
— |
|
(374) |
|
— |
|
200 |
|
— |
|
Other comprehensive income of associates and joint ventures |
|
(12) |
|
— |
|
51 |
|
— |
|
1 |
|
— |
|
Total presented in other comprehensive income |
|
(400) |
|
86 |
|
37 |
|
(117) |
|
587 |
|
(98) |
|
Consolidated Financial Statements 2023 |
F-88 |
10.2.3 Tax position in the statement of financial position
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
|
||||||||||||
(in millions of euros) |
|
Assets |
|
Liabi-lities |
|
Net |
|
Assets |
|
Liabi-lities |
|
Net |
|
Assets |
|
Liabi-lities |
|
Net |
|
Orange SA tax group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Current tax |
|
59 |
|
— |
|
59 |
|
— |
|
31 |
|
(31) |
|
26 |
|
— |
|
26 |
|
• Deferred tax |
|
123 |
|
— |
|
123 |
|
135 |
|
— |
|
135 |
|
362 |
|
— |
|
362 |
|
Spanish tax group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Current tax |
|
9 |
|
— |
|
9 |
|
1 |
|
— |
|
1 |
|
13 |
|
— |
|
13 |
|
• Deferred tax (1) |
|
— |
|
156 |
|
(156) |
|
— |
|
161 |
|
(161) |
|
— |
|
211 |
|
(211) |
|
Africa & Middle East |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Current tax |
|
92 |
|
343 |
|
(251) |
|
68 |
|
395 |
|
(327) |
|
62 |
|
328 |
|
(266) |
|
• Deferred tax |
|
134 |
|
59 |
|
75 |
|
128 |
|
58 |
|
70 |
|
127 |
|
93 |
|
34 |
|
United Kingdom |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Current tax |
|
— |
|
— |
|
— |
|
2 |
|
— |
|
2 |
|
— |
|
5 |
|
(5) |
|
• Deferred tax (2) |
|
— |
|
785 |
|
(785) |
|
— |
|
786 |
|
(786) |
|
— |
|
787 |
|
(787) |
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Current tax |
|
80 |
|
117 |
|
(37) |
|
77 |
|
112 |
|
(34) |
|
80 |
|
92 |
|
(12) |
|
• Deferred tax (3) |
|
341 |
|
143 |
|
198 |
|
157 |
|
120 |
|
38 |
|
202 |
|
94 |
|
109 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
• Current tax |
|
240 |
|
460 |
|
(220) |
|
149 |
|
538 |
|
(389) |
|
181 |
|
425 |
|
(244) |
|
• Deferred tax |
|
598 |
|
1,143 |
|
(545) |
|
421 |
|
1,124 |
|
(704) |
|
692 |
|
1,185 |
|
(493) |
|
(1) | The recognized deferred tax assets are offset by deferred tax liabilities on goodwill which is tax deductible. |
(2) | Mainly deferred tax liabilities on the Orange brand. |
(3) | In 2023, a deferred tax asset of 190 million euros has been recognized for Belgian subsidiaries (other than the Orange Belgium group), to reflect the favorable effect of the change in business projections for the recoverability of deferred tax assets. |
Change in net current tax
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Net current tax assets/(liabilities) - in the opening balance |
|
(389) |
|
(244) |
|
(545) |
|
Cash tax payments/(reimbursements)(1)(2) |
|
1,133 |
|
1,022 |
|
1,028 |
|
Change in income statement(2) |
|
(975) |
|
(1,168) |
|
(750) |
|
Change in retained earnings(3) |
|
6 |
|
(2) |
|
29 |
|
Changes in the scope of consolidation |
|
(13) |
|
— |
|
1 |
|
Translation adjustment |
|
6 |
|
2 |
|
(7) |
|
Reclassifications and other items |
|
11 |
|
1 |
|
— |
|
Net current tax assets/(liabilities) - in the closing balance |
|
(220) |
|
(389) |
|
(244) |
|
(1) | In 2022 and 2023, includes tax payments / (reimbursements) related to the loss of exclusive control on the FiberCo in Poland, reclassified in investing activities in the consolidated statement of cash flows. |
(2) | In 2021, included disbursements and tax expenses on gains arising from the losses of exclusive control on Orange Concessions in France and on the FiberCo in Poland, of 47 million euros and 27 million euros respectively, reclassified in investing activities in the consolidated statement of cash flows. |
(3) | Mainly corresponds to the tax effect of the remeasurement of the portion of subordinated notes denominated in foreign currency (until 2022) and the tax effects of transaction costs and premium paid related to the refinancing of subordinated notes. |
Change in net deferred tax
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Net deferred tax assets/(liabilities) - in the opening balance |
|
(704) |
|
(493) |
|
(181) |
|
Change in income statement |
|
103 |
|
(97) |
|
(212) |
|
Change in other comprehensive income |
|
86 |
|
(117) |
|
(98) |
|
Change in retained earnings |
|
— |
|
— |
|
5 |
|
Change in the scope of consolidation(1) |
|
(51) |
|
(21) |
|
(1) |
|
Translation adjustment |
|
20 |
|
25 |
|
(5) |
|
Reclassifications and other items |
|
1 |
|
— |
|
(1) |
|
Net deferred tax assets/(liabilities) - in the closing balance |
|
(545) |
|
(704) |
|
(493) |
|
(1) | In 2023, mainly corresponds to the acquisition of VOO. |
Consolidated Financial Statements 2023 |
F-89 |
Deferred tax assets and liabilities by type
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
|
||||||||||||
|
|
|
|
|
|
Income |
|
|
|
|
|
Income |
|
|
|
|
|
Income |
|
(in millions of euros) |
|
Assets |
|
Liabilities |
|
state-ment |
|
Assets |
|
Liabilities |
|
state-ment |
|
Assets |
|
Liabilities |
|
state-ment |
|
Provisions for employee benefit obligations |
|
747 |
|
— |
|
46 |
|
679 |
|
— |
|
22 |
|
705 |
|
— |
|
218 |
|
Fixed assets |
|
477 |
|
1,603 |
|
(32) |
|
465 |
|
1,481 |
|
(75) |
|
528 |
|
1,476 |
|
(218) |
|
Tax loss carryforwards |
|
4,037 |
|
— |
|
(21) |
|
3,935 |
|
— |
|
20 |
|
3,958 |
|
— |
|
37 |
|
Other differences |
|
2,717 |
|
3,216 |
|
(84) |
|
2,658 |
|
3,168 |
|
(145) |
|
2,673 |
|
2,960 |
|
(76) |
|
Deferred tax |
|
7,978 |
|
4,819 |
|
(90) |
|
7,736 |
|
4,649 |
|
(178) |
|
7,865 |
|
4,436 |
|
(38) |
|
Depreciation of deferred tax assets |
|
(3,704) |
|
— |
|
193 |
|
(3,791) |
|
— |
|
80 |
|
(3,922) |
|
— |
|
(174) |
|
Netting |
|
(3,676) |
|
(3,676) |
|
— |
|
(3,525) |
|
(3,525) |
|
— |
|
(3,251) |
|
(3,251) |
|
— |
|
Total |
|
598 |
|
1,143 |
|
103 |
|
421 |
|
1,124 |
|
(97) |
|
692 |
|
1,185 |
|
(212) |
|
At December 31, 2023, tax loss carryforwards mainly relate to Spain and Belgium.
At December 31, 2023, the unrecognized deferred tax assets mainly relate to Spain for 2.1 billion euros and Belgian subsidiaries (other than the Orange Belgium group) for 0.6 billion euros, and mostly include tax losses that can be carried forward indefinitely.
In Spain, tax loss carryforwards for which a deferred tax asset has been recognized are expected to be fully utilized by 2028, unless affected by changes in current tax rules and changes in business projections. The deferred tax assets recognized for Spain amount to 0.5 billion euros at December 31, 2023.
The deferred tax assets recognized for Belgium amount to 0.3 billion euros at December 31, 2023.
Most of the other tax loss carryforwards for which no deferred tax assets have been recognized will expire beyond 2028.
10.3 Developments in tax disputes and audits
Developments in tax disputes and audits in France
Tax audits
Orange SA was the subject of several tax audits for the years 2017–2018 and 2019–2020, for which the tax adjustments notified to date total approximately 535 million euros (including default penalties and interest). These adjustments mainly relate to the calculation of VAT on digital offerings, tax on electronic communication services on these same digital offerings, research tax credit, tax on television services, a portion of brand royalties paid by Orange SA to the UK company Orange Brand Services Ltd for reasons similar to the adjustments notified during the previous audits, as well as the inclusion in the tax base of income from the sale of equipment in 2019 and 2020, and the reassessment of previous tax loss carryforwards used for fiscal years 2017 and 2018.
All of these adjustments are being challenged by Orange SA. In accordance with its accounting policies, the Group makes a best estimate of the risk of these adjustments based on the technical merits of the positions defended, for which the effects are non-material.
Orange SA was subject to a tax audit covering fiscal years 2015 and 2016. A tax adjustment was issued in 2019 covering the calculation of brand royalties paid by Orange SA to the UK company Orange Brand Services Ltd and deducted from its taxable income. The administration questions the inclusion of revenue from the roaming contract with Free and revenue from the fixed PSTN business. This adjustment request is being challenged by Orange SA, which has requested the opening of out-of-court proceedings and arbitration between the French and UK tax authorities, which are still ongoing. The additional tax expense would effectively result in double taxation that would fail to comply with the provisions of the Franco-British tax agreement and the European arbitration agreement.
Tax disputes
There were no major developments in other tax disputes over the period.
Developments in tax disputes and audits in the rest of the Group
In the same way as other telecom operators, the Group regularly deals with disagreements concerning the taxation of its network in various countries.
In the Democratic Republic of Congo, Orange was the subject of a tax audit for the years 2017–2019, for which the legal tax adjustments notified total approximately 146 million euros at December 31, 2023. These adjustments mainly relate to the recognition method for mobile prepaid revenue and the non-taxation of electronic money flows in third-party accounts to be transferred to end customers. All of these adjustments are being challenged by Orange RDC, which has appealed to the Finance Minister.
There were no major developments in other tax disputes and audits in the rest of the Group over the period.
10.4 International tax reform – Pillar Two
The Group has launched a working group in order to identify consequences and organize processes that will enable it to comply with this tax reform.
The Group simulated the Transitional Safe Harbour tests of the OECD based on CbCR (also known as Country-by-Country Reporting) and the Consolidated Financial Statements for 2020, 2021 and 2022. Over the three years tested, some 15 jurisdictions failed the tests, and this may vary from one fiscal year to the next. The main reasons identified were the use of tax loss carryforwards, non-taxed items that affect pre-tax profit such as capital gains on disposals and low corporate tax rates (below 15%) in some jurisdictions where the Group operates.
Given the current progress of the work done by the Group and the regulations of the countries in which the Group operates, the financial consequences are expected to be limited (see Note 2.3.4).
Consolidated Financial Statements 2023 |
F-90 |
Accounting policies
Current income tax and deferred tax are measured by the Group at the amount expected to be paid or recovered from the tax authorities of each country, based on its interpretation with regard to the application of tax legislation. The Group calculates the tax assets and liabilities recognized in the statement of financial position based on the technical merits of the positions it defends versus that of the tax authorities.
Deferred taxes are recognized for all temporary differences between the carrying values of assets and liabilities and their tax basis, as well as for unused tax losses, using the liability method. Deferred tax assets are recognized only when their recovery is considered probable.
A deferred tax liability is recognized for all taxable temporary differences associated with investments in subsidiaries, interests in joint ventures and associates, except to the extent that both of the following conditions are satisfied:
– the Group is able to control the timing of the reversal of the temporary difference (e.g. the payment of dividends); and
– it is probable that the temporary difference will not reverse in the foreseeable future.
Accordingly, for fully consolidated companies, a deferred tax liability is only recognized in the amount of the taxes payable on planned dividend distributions by the Group.
Deferred tax assets and liabilities are not discounted.
At each period end, the Group reviews the recoverable amount of the deferred tax assets carried by certain tax entities with significant tax losses carryforwards. The recoverability of the deferred tax assets is assessed in the light of the business plans used for impairment testing. This plan may be adjusted for any tax specificities.
Deferred tax assets arising on these tax losses are not recognized under certain circumstances specific to each company/tax consolidation group concerned, and particularly where:
– entities cannot assess the probability of the tax loss carryforwards being set off against future taxable profits, due to the horizon for forecasts based on business plans used for impairment testing and uncertainties as to the economic environment;
– entities have not yet begun to use the tax loss carryforwards;
– entities do not expect to use the losses within the timeframe allowed by tax regulations;
– it is estimated that tax losses are uncertain to be used due to risks of differing interpretations with regard to the application of tax legislation.
Consolidated Financial Statements 2023 |
F-91 |
Note 11 Interests in associates and joint ventures
11.1 Change in interests in associates and joint ventures
The table below shows the value of the main interests in associates and joint ventures:
(in millions of euros) |
|
|
|
|
|
|
|
|
|
|
|
|
Company |
|
Main activity |
|
Main co- |
|
% |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
|
shareholder |
|
interest |
|
2023 |
|
2022 |
|
2021 |
Entities jointly controlled |
|
|
|
|
|
|
|
|
|
|
|
|
Orange Concessions and its subsidiaries |
|
Operation / maintenance related to Public Initiative Networks |
|
Consortium HIN (50%) |
|
50 |
% |
1,012 |
|
1,057 |
|
1,049 |
Swiatłowod Inwestycje Sp. z o.o. (FiberCo in Poland) |
|
Construction / operation in Poland |
|
APG Group (50%) |
|
50 |
% |
332 |
|
306 |
|
298 |
Mauritius Telecom |
|
Telecommunications operator in Mauritius |
|
Mauritius government (34%) |
|
40 |
% |
86 |
|
72 |
|
65 |
Other |
|
|
|
|
|
|
|
14 |
|
17 |
|
10 |
Entities under significant influence |
|
|
|
|
|
|
|
|
|
|
|
|
Orange Tunisie |
|
Telecommunications operator in Tunisia |
|
Investec (51%) |
|
49 |
% |
20 |
|
17 |
|
2 |
Savoie connectée |
|
Fiber infrastructure operator |
|
XPFibre.Co (70%) |
|
30 |
% |
17 |
|
7 |
|
7 |
IRISnet |
|
Telecommunications operator in Belgium |
|
Ministry of the Brussels-Capital Region (MBCR) (53%) |
|
22 |
% |
7 |
|
6 |
|
6 |
Other |
|
|
|
|
|
|
|
4 |
|
3 |
|
3 |
Total associates and joint ventures |
|
|
|
|
|
|
|
1,491 |
|
1,486 |
|
1,440 |
The change in interests in associates and joint ventures is as follows:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Interests in associates and joint ventures - in the opening balance |
|
1,486 |
|
1,440 |
|
98 |
|
Dividends |
|
(16) |
|
(5) |
|
(3) |
|
Share of profits (losses) |
|
(29) |
|
(2) |
|
3 |
|
Change in components of other comprehensive income(1) |
|
(12) |
|
51 |
|
3 |
|
Changes in the scope of consolidation(2) |
|
4 |
|
(3) |
|
1,345 |
|
Change in capital |
|
33 |
|
11 |
|
3 |
|
Translation adjustment |
|
21 |
|
(2) |
|
(4) |
|
Reclassifications and other items |
|
4 |
|
(3) |
|
(6) |
|
Interests in associates and joint ventures - in the closing balance |
|
1,491 |
|
1,486 |
|
1,440 |
|
(1) | In 2023, includes the effect of the change in fair value of cash flow hedge derivatives, net of tax, recognized in the other comprehensive income of Orange Concessions for (14) million euros and of the FiberCo in Poland for (12) million euros. In 2022, included the effect of the change in fair value of cash flow hedge derivatives, net of tax, recognized in the other comprehensive income of Orange Concessions for 33 million euros and of the FiberCo in Poland for 18 million euros. |
(2) | In 2021, changes in the scope of consolidation mainly concerned Orange Concessions and the FiberCo in Poland. |
The main transactions between the Group and companies consolidated using the equity method are presented in Note 12.
Consolidated Financial Statements 2023 |
F-92 |
11.2Key figures from associates and joint ventures
The key figures relating to Orange Concessions and Swiatłowod Inwestycje Sp. z o.o. (FiberCo in Poland) are as follows (figures from financial statements of entities taken as a whole):
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
||||||
|
|
Orange |
|
Swiatłowod |
|
Orange |
|
Swiatłowod |
|
Orange |
|
Swiatłowod |
|
|
Concessions |
|
Inwestycje Sp. z o.o. |
|
Concessions |
|
Inwestycje Sp. z o.o. |
|
Concessions |
|
Inwestycje Sp. z o.o. |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets |
|
3,639 |
|
577 |
|
3,699 |
|
372 |
|
3,029 |
|
168 |
Current assets |
|
408 |
|
186 |
|
417 |
|
197 |
|
519 |
|
171 |
Total assets |
|
4,046 |
|
763 |
|
4,115 |
|
569 |
|
3,548 |
|
339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder's equity |
|
2,026 |
|
306 |
|
2,117 |
|
281 |
|
1,991 |
|
257 |
Non-current liabilities |
|
1,540 |
|
359 |
|
1,494 |
|
198 |
|
1,054 |
|
45 |
Current liabilities |
|
480 |
|
97 |
|
505 |
|
90 |
|
502 |
|
36 |
Total equity and liabilities |
|
4,046 |
|
763 |
|
4,115 |
|
569 |
|
3,548 |
|
339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
623 |
|
45 |
|
768 |
|
29 |
|
112 |
|
7 |
Operating income |
|
(61) |
|
(8) |
|
(7) |
|
(4) |
|
(16) |
|
(3) |
Finance costs, net |
|
(25) |
|
(13) |
|
(35) |
|
(5) |
|
(5) |
|
16 |
Income tax |
|
15 |
|
4 |
|
8 |
|
1 |
|
7 |
|
(3) |
Net income |
|
(71) |
|
(17) |
|
(35) |
|
(8) |
|
(14) |
|
10 |
11.3Contractual commitments on interests in associates and joint ventures
Public Initiative Networks commitments
As part of the roll-out of the high-speed and very high-speed broadbrand network in France, the Group has entered into contracts via Public Initiative Networks (mainly public service delegation contracts and public-private partnership contracts as well as public design, construction, operation and maintenance contracts). On November 3, 2021, the Orange group sold 50% of the capital in Orange Concessions to the consortium HIN, comprising La Banque des Territoires (Caisse des Dépôts), CNP Assurances and EDF resulting in the loss of Orange's exclusive control over this entity and its subsidiaries. The Orange Concessions group is jointly controlled with the consortium and is consolidated in the financial statements of the Orange group according to the equity method. The Group continues to have obligations under network construction, concession and operation contracts in proportion to its shareholding, i.e. 1,336 million euros at December 31, 2023.
Accounting policies
The carrying value of interests in associates or joint ventures corresponds to the initial acquisition cost plus the share of net income for the period. If an associate or joint venture incurs losses and the carrying value of the investment is reduced to zero, the Group ceases to recognize the additional share of losses since it has no commitment beyond its investment.
An impairment test is performed at least annually and whenever there is objective evidence of impairment loss, such as a decrease in the quoted price when the investee is listed, significant financial difficulty of the entity, observable data indicating a measurable decrease in the estimated future cash flows, or information about significant changes having an adverse effect on the entity.
An impairment loss is recorded when the recoverable amount is lower than the carrying value, the recoverable amount being the higher of the value in use and the fair value less transaction costs. The unit of account is the whole investment. Any impairment loss is recognized in the “share of profits (losses) of associates and joint ventures”. Impairment losses can be reversed once the recoverable amount exceeds the carrying value.
Note 12 Related party transactions
Transactions with the French State and affiliated bodies
The French State, either directly or through Bpifrance Participations, is one of the main shareholders of Orange SA.
The communication services provided to the French State are awarded as part of a competitive process arranged by each department according to the nature of the service. They have no material impact on consolidated revenues.
Orange does not purchase goods or services from the French State (either directly or via Bpifrance Participations), except for the use of spectrum resources. These resources are allocated after a competitive process.
Consolidated Financial Statements 2023 |
F-93 |
Transactions with the main associates and joint ventures
The transactions between the Group and its associates and joint ventures are reflected as follows in Orange’s Consolidated Financial Statements:
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2021 |
Assets |
|
|
|
|
|
|
Non-current financial assets |
|
43 |
|
43 |
|
43 |
Trade receivables |
|
226 |
|
254 |
|
417 |
o/w Orange Concessions(1) |
|
177 |
|
209 |
|
372 |
Current financial assets |
|
10 |
|
12 |
|
12 |
Other current assets |
|
16 |
|
40 |
|
52 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current financial liabilities |
|
3 |
|
— |
|
— |
Trade payables |
|
13 |
|
11 |
|
14 |
Other current liabilities |
|
1 |
|
2 |
|
1 |
Customer contract liabilities |
|
204 |
|
154 |
|
153 |
o/w Swiatlowod Inwestycje Sp.z o.o.(2) |
|
202 |
|
146 |
|
151 |
|
|
|
|
|
|
|
Income statement |
|
|
|
|
|
|
Revenue |
|
639 |
|
726 |
|
139 |
o/w Orange Concessions |
|
600 |
|
705 |
|
124 |
Operating income |
|
588 |
|
700 |
|
135 |
Finance costs, net |
|
— |
|
2 |
|
1 |
Net income |
|
588 |
|
702 |
|
129 |
(1) |
Transactions between the Group and Orange Concessions mainly comprise Orange SA receivables from Orange Concessions in relation with fiber deployment and maintenance activities operated by the Group. |
(2) |
Customer contract liabilities mainly correspond to the recognition of deferred income by Orange Polska in connection with the prepayment of services provided to the FiberCo in Poland. |
Accounting policies
Orange group’s related parties are listed below:
– the Group’s key management personnel and their families (see Note 6.4);
– the French State, Bpifrance Participations, central State departments and companies controlled by the French state (see Notes 10 and 15);
– associates, joint ventures and companies in which the Group holds a significant stake (see Note 11);
– shareholders legal entities exercising ultimate control, joint control or significant influence over subsidiaries and affiliates.
Note 13 Financial assets, liabilities and financial results (telecom activities)
13.1 Financial assets and liabilities of telecom activities
In order to improve the readability of financial statements and distinguish the performance of telecom activities from the performance of the Mobile Financial Services activities, the notes related to financial assets and liabilities as well as financial income or expenses are split to respect these two business areas.
Note 13 presents the financial assets, liabilities and related gains and losses specific to telecom activities and Note 17 presents the activities of Mobile Financial Services with regard to its assets and liabilities, with net financial income being not material.
Consolidated Financial Statements 2023 |
F-94 |
The following table reconciles the contributive balances of assets and liabilities for each of these two areas to the consolidated balance sheet (intra-group transactions between telecom activities and Mobile Financial Services activities are not eliminated) with the consolidated statement of financial position at December 31, 2023.
(in millions of euros) |
|
Orange |
|
o/w |
|
Note |
|
o/w Mobile |
|
Note |
|
o/w eliminations |
|
|
|
Consolidated |
|
telecom |
|
|
|
Finance |
|
|
|
telecom |
|
|
|
financial |
|
activities |
|
|
|
Services |
|
|
|
activities /mobile |
|
|
|
statements |
|
|
|
|
|
|
|
|
|
finance services |
|
Non-current financial assets related to Mobile Financial Services activities |
|
297 |
|
— |
|
|
|
297 |
|
17.1.1 |
|
— |
|
Non-current financial assets |
|
1,036 |
|
1,063 |
|
13.7 |
|
— |
|
|
|
(27) |
(1) |
Non-current derivatives assets |
|
956 |
|
886 |
|
13.8 |
|
70 |
|
17.1.3 |
|
— |
|
Current financial assets related to Mobile Financial Services activities |
|
3,184 |
|
— |
|
|
|
3,192 |
|
17.1.1 |
|
(7) |
|
Current financial assets |
|
2,713 |
|
2,713 |
|
13.7 |
|
— |
|
|
|
— |
|
Current derivatives assets |
|
37 |
|
37 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Cash and cash equivalents |
|
5,618 |
|
5,504 |
|
14.3 |
|
113 |
|
|
|
— |
|
Total |
|
13,841 |
|
10,204 |
|
|
|
3,672 |
|
|
|
(35) |
|
Non-current financial liabilities related to Mobile Financial Services activities |
|
73 |
|
— |
|
|
|
100 |
|
17.1.2 |
|
(27) |
(1) |
Non-current financial liabilities |
|
30,535 |
|
30,535 |
|
13.3 |
|
— |
|
|
|
— |
|
Non-current derivatives liabilities |
|
225 |
|
205 |
|
13.8 |
|
19 |
|
17.1.3 |
|
— |
|
Current financial liabilities related to Mobile Financial Services activities |
|
3,073 |
|
— |
|
|
|
3,073 |
|
17.1.2 |
|
— |
|
Current financial liabilities |
|
5,451 |
|
5,458 |
|
13.3 |
|
— |
|
|
|
(7) |
|
Current derivatives liabilities |
|
40 |
|
40 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Total |
|
39,396 |
|
36,238 |
|
|
|
3,193 |
|
|
|
(35) |
|
(1) | Loan granted by Orange SA to Orange Bank. |
The following table reconciles the contributive balances of assets and liabilities for each of these two areas to the consolidated balance sheet (intra-group transactions between telecom activities and Mobile Financial Services activities are not eliminated) with the consolidated statement of financial position at December 31, 2022.
(in millions of euros) |
|
Orange |
|
o/w telecom |
|
Note |
|
o/w Mobile |
|
Note |
|
o/w eliminations |
|
|
|
consolidated |
|
activities |
|
|
|
Finance |
|
|
|
telecom |
|
|
|
financial |
|
|
|
|
|
Services |
|
|
|
activities / |
|
|
|
statements |
|
|
|
|
|
|
|
|
|
mobile finance |
|
|
|
|
|
|
|
|
|
|
|
|
|
services |
|
Non-current financial assets related to Mobile Financial Services activities |
|
656 |
|
— |
|
|
|
656 |
|
17.1.1 |
|
— |
|
Non-current financial assets |
|
977 |
|
1,004 |
|
13.7 |
|
— |
|
|
|
(27) |
(1) |
Non-current derivatives assets |
|
1,458 |
|
1,342 |
|
13.8 |
|
116 |
|
17.1.3 |
|
— |
|
Current financial assets related to Mobile Financial Services activities |
|
2,742 |
|
— |
|
|
|
2,747 |
|
17.1.1 |
|
(6) |
|
Current financial assets |
|
4,541 |
|
4,541 |
|
13.7 |
|
— |
|
|
|
— |
|
Current derivatives assets |
|
112 |
|
112 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Cash and cash equivalents |
|
6,004 |
|
5,846 |
|
14.3 |
|
158 |
|
|
|
— |
|
Total |
|
16,489 |
|
12,846 |
|
|
|
3,677 |
|
|
|
(33) |
|
Non-current financial liabilities related to Mobile Financial Services activities |
|
82 |
|
— |
|
|
|
109 |
|
17.1.2 |
|
(27) |
(1) |
Non-current financial liabilities |
|
31,930 |
|
31,930 |
|
13.3 |
|
— |
|
|
|
— |
|
Non-current derivatives liabilities |
|
397 |
|
335 |
|
13.8 |
|
62 |
|
17.1.3 |
|
— |
|
Current financial liabilities related to Mobile Financial Services activities |
|
3,034 |
|
— |
|
|
|
3,034 |
|
17.1.2 |
|
— |
|
Current financial liabilities |
|
4,702 |
|
4,708 |
|
13.3 |
|
— |
|
|
|
(6) |
|
Current derivatives liabilities |
|
51 |
|
51 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Total |
|
40,196 |
|
37,024 |
|
|
|
3,205 |
|
|
|
(33) |
|
(1) | Loan granted by Orange SA to Orange Bank. |
Consolidated Financial Statements 2023 |
F-95 |
The following table reconciles the contributive balances of assets and liabilities for each of these two areas to the consolidated balance sheet (intra-group transactions between telecom activities and Mobile Financial Services activities are not eliminated) with the consolidated statement of financial position at December 31, 2021.
(in millions of euros) |
|
Orange |
|
o/w telecom |
|
Note |
|
o/w Mobile |
|
Note |
|
o/w eliminations |
|
|
|
consolidated |
|
activities |
|
|
|
Finance |
|
|
|
telecom |
|
|
|
financial |
|
|
|
|
|
Services |
|
|
|
activities / |
|
|
|
statements |
|
|
|
|
|
|
|
|
|
mobile finance |
|
|
|
|
|
|
|
|
|
|
|
|
|
services |
|
Non-current financial assets related to Mobile Financial Services activities |
|
900 |
|
— |
|
|
|
900 |
|
17.1.1 |
|
— |
|
Non-current financial assets |
|
950 |
|
977 |
|
13.7 |
|
— |
|
|
|
(27) |
(1) |
Non-current derivatives assets |
|
683 |
|
682 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Current financial assets related to Mobile Financial Services activities |
|
2,381 |
|
— |
|
|
|
2,385 |
|
17.1.1 |
|
(4) |
|
Current financial assets |
|
2,313 |
|
2,313 |
|
13.7 |
|
— |
|
— |
|
|
|
Current derivatives assets |
|
7 |
|
7 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Cash and cash equivalents |
|
8,621 |
|
8,188 |
|
14.3 |
|
433 |
|
— |
|
|
|
Total |
|
15,855 |
|
12,168 |
|
|
|
3,719 |
|
|
|
(32) |
|
Non-current financial liabilities related to Mobile Financial Services activities |
|
— |
|
— |
|
|
|
28 |
|
17.1.2 |
|
(27) |
(1) |
Non-current financial liabilities |
|
31,922 |
|
31,922 |
|
13.3 |
|
— |
|
— |
|
|
|
Non-current derivatives liabilities |
|
220 |
|
161 |
|
13.8 |
|
59 |
|
17.1.3 |
|
— |
|
Current financial liabilities related to Mobile Financial Services activities |
|
3,161 |
|
— |
|
|
|
3,161 |
|
17.1.2 |
|
— |
|
Current financial liabilities |
|
3,421 |
|
3,426 |
|
13.3 |
|
— |
|
|
|
(4) |
|
Current derivatives liabilities |
|
124 |
|
124 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Total |
|
38,848 |
|
35,633 |
|
|
|
3,247 |
|
|
|
(32) |
|
(1) | Loan granted by Orange SA to Orange Bank. |
13.2 Profits and losses related to financial assets and liabilities
The cost of net financial debt consists of gains and losses related to the components of net financial debt (described in Note 13.3) for the period.
Foreign exchange gains & losses mainly include the revaluation in euros of bonds (Note 13.5) and bank loans denominated in foreign currencies as well as the symmetrical revaluation, where applicable, of the associated hedges as defined by IFRS 9.
In 2022 and 2021, foreign exchange gains and losses also included the effects of the revaluation of trading derivatives held as economic hedges on notional amounts of subordinated notes denominated in pounds sterling and recognized in equity at their historical value. Following the repurchase at the end of 2022 of the last subordinated notes denominated in pounds sterling (see Note 15.4), the Group is no longer exposed to the financial exchange risk resulting from these instruments.
Income and expenses on assets included in net financial debt mainly comprise interest on the Group’s financial assets of 283 million euros in 2023, 48 million euros in 2022 and (3) million euros in 2021.
Other net financial expenses are mainly composed of interests on lease liabilities for (258) million euros in 2023, (145) million euros in 2022 and (120) million euros in 2021 (see Note 9.2).
Finally, other comprehensive income includes the revaluation of financial assets at fair value through other comprehensive income (Note 13.7) and cash flow hedges (Note 13.8.2).
Consolidated Financial Statements 2023 |
F-96 |
Other gains and losses related to financial assets and liabilities are recognized in operating income (foreign exchange gains and losses on trade receivables, trade payables and the associated hedge derivatives) in the amount of (17) million euros in 2023, (31) million euros in 2022 and (19) million euros in 2021.
|
|
Finance costs, net |
|
Other |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compre- |
|
|
|
|
|
hensive income |
|
||||||||||
|
|
Cost of gross |
|
Gains |
|
Cost of net |
|
Foreign |
|
Other net |
|
Finance |
|
Reserves |
|
|
|
financial debt(1) |
|
(losses) on |
|
financial debt |
|
exchange |
|
financial |
|
costs, net |
|
|
|
|
|
|
|
assets |
|
|
|
gains |
|
expenses |
|
|
|
|
|
|
|
|
|
contributing |
|
|
|
(losses) |
|
|
|
|
|
|
|
|
|
|
|
to net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial |
|
|
|
|
|
|
|
|
|
|
|
(in millions of euros) |
|
|
|
debt |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
— |
|
283 |
|
283 |
|
36 |
|
13 |
|
|
|
5 |
|
Financial liabilities |
|
(1,152) |
|
— |
|
(1,152) |
|
59 |
|
— |
|
|
|
— |
|
Lease liabilities |
|
— |
|
— |
|
— |
|
— |
|
(258) |
|
|
|
— |
|
Derivatives |
|
65 |
|
— |
|
65 |
|
(128) |
|
— |
|
|
|
(297) |
|
Discounting expense |
|
— |
|
— |
|
— |
|
— |
|
(125) |
|
|
|
— |
|
Total |
|
(1,087) |
|
283 |
|
(804) |
|
(32) |
|
(370) |
|
(1,206) |
|
(292) |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
— |
|
48 |
|
48 |
|
(38) |
|
55 |
|
|
|
(110) |
|
Financial liabilities |
|
(1,023) |
|
— |
|
(1,023) |
|
(196) |
|
— |
|
|
|
— |
|
Lease liabilities |
|
— |
|
— |
|
— |
|
— |
|
(145) |
|
|
|
— |
|
Derivatives |
|
245 |
|
— |
|
245 |
|
137 |
|
— |
|
|
|
288 |
|
Discounting expense |
|
— |
|
— |
|
— |
|
— |
|
(3) |
|
|
|
— |
|
Total |
|
(779) |
|
48 |
|
(731) |
|
(97) |
|
(92) |
|
(920) |
|
178 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
— |
|
(3) |
|
(3) |
|
47 |
|
75 |
|
|
|
11 |
|
Financial liabilities |
|
(1,018) |
|
— |
|
(1,018) |
|
(637) |
|
— |
|
|
|
— |
|
Lease liabilities |
|
— |
|
— |
|
— |
|
— |
|
(120) |
|
|
|
— |
|
Derivatives |
|
188 |
|
— |
|
188 |
|
655 |
|
— |
|
|
|
322 |
|
Discounting expense |
|
— |
|
— |
|
— |
|
— |
|
31 |
|
|
|
— |
|
Total |
|
(830) |
|
(3) |
|
(833) |
|
65 |
|
(14) |
|
(782) |
|
332 |
|
(1) | Includes interests on debts related to financed assets of (14) million euros in 2023, (3) million euros in 2022 and (1) million euros in 2021. |
13.3 Net financial debt
The definition of net financial debt excludes the lease liabilities included in the scope of IFRS 16 (see Note 9.2) and includes debt related to financed assets.
Net financial debt is one of the indicators of financial position used by the Group. This aggregate, not defined by IFRS, may not be comparable to similarly titled indicators used by other companies. It is provided as additional information only and should not be considered a substitute for an analysis of all the Group’s assets and liabilities.
Net financial debt as defined and used by Orange does not take into account Mobile Financial Services activities, for which this concept is not relevant.
It consists of (a) financial liabilities excluding operating payables (translated into euros at the year-end closing rate) including derivative instruments (assets and liabilities), less (b) cash collateral paid, cash, cash equivalents and financial assets at fair value.
Consolidated Financial Statements 2023 |
F-97 |
Furthermore, financial instruments designated as cash flow hedges included in net financial debt are set up to hedge items that are not included therein, such as future cash flows. As a result, the portion relating to these unmatured hedging instruments recorded in other comprehensive income is added to gross financial debt to offset this temporary difference.
(in millions of euros) |
|
Note |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
|
|
2023 |
|
2022 |
|
2021 |
|
TDIRA |
|
13.4 |
|
643 |
|
638 |
|
636 |
|
Bonds |
|
13.5 |
|
28,919 |
|
29,943 |
|
29,010 |
|
Bank loans and from development organizations and multilateral lending institutions |
|
13.6 |
|
3,339 |
|
3,309 |
|
3,206 |
|
Debt relating to financed assets |
|
|
|
411 |
|
316 |
|
245 |
|
Cash collateral received |
|
14.5 |
|
586 |
|
1,072 |
|
389 |
|
NEU Commercial Paper (1) |
|
|
|
1,247 |
|
1,004 |
|
1,457 |
|
Bank overdrafts |
|
|
|
234 |
|
250 |
|
342 |
|
Other financial liabilities (2) |
|
|
|
615 |
|
105 |
|
64 |
|
Current and non-current financial liabilities excluding derivatives included in the calculation of net financial debt |
|
|
|
35,993 |
|
36,638 |
|
35,348 |
|
Current and non-current derivatives (liabilities) |
|
13.8 |
|
245 |
|
386 |
|
285 |
|
Current and non-current derivatives (assets) |
|
13.8 |
|
(923) |
|
(1,455) |
|
(689) |
|
Other comprehensive income components related to unmatured hedging instruments |
|
13.8 |
|
(110) |
|
114 |
|
(192) |
|
Gross financial debt after derivatives (a) |
|
|
|
35,205 |
|
35,684 |
|
34,751 |
|
Cash collateral paid (3) |
|
14.5 |
|
(21) |
|
(38) |
|
(27) |
|
Investments at fair value (4) |
|
14.3 |
|
(2,678) |
|
(4,500) |
|
(2,266) |
|
Cash equivalents |
|
14.3 |
|
(2,444) |
|
(3,178) |
|
(5,479) |
|
Cash |
|
|
|
(3,060) |
|
(2,668) |
|
(2,709) |
|
Other financial assets |
|
|
|
— |
|
(2) |
|
— |
|
Assets included in the calculation of net financial debt (b) |
|
|
|
(8,203) |
|
(10,386) |
|
(10,481) |
|
Net financial debt (a) + (b) |
|
|
|
27,002 |
|
25,298 |
|
24,269 |
|
(1) | Negotiable European Commercial Paper (formerly called "commercial paper"). |
(2) | Includes 279 million euros recognized in relation to the purchase option granted by Orange Belgium to Nethys in connection with the acquisition of VOO in 2023 (Note 3.2), and also includes 198 million euros in subordinated notes reclassified as current financial liabilities following the announcement on December 13, 2023 of Orange's intention to exercise its redemption option on February 7, 2024 in respect of these notes (Note 15.4). |
(3) | Only cash collateral paid, included in non-current financial assets of the consolidated statement of financial position, is deducted from gross financial debt. |
(4) | Only investments at fair value, included in current financial assets of the consolidated statement of financial position, are deducted from gross financial debt (Note 14.3). |
Net financial debt is mainly held by the Group’s parent company, Orange SA.
The debt maturity schedules are presented in Note 14.3.
Changes in financial assets or financial liabilities whose cash flows are disclosed in financing activities in the cash flow statement are the following (see Note 1.9):
(in millions of euros) |
|
December 31, 2022 |
|
Cash |
|
Other changes with no impact |
|
December 31, 2023 |
|
|||||
|
|
|
|
|
|
Changes in |
|
Foreign |
|
Other (1) |
|
|
|
|
TDIRA |
|
638 |
|
— |
|
— |
|
— |
|
4 |
|
|
643 |
|
Bonds |
|
29,943 |
|
(979) |
|
— |
|
(54) |
|
9 |
|
|
28,919 |
|
Bank loans and from development organizations and multilateral lending institutions |
|
3,309 |
|
(117) |
|
147 |
|
(16) |
|
16 |
|
|
3,339 |
|
Debt relating to financed assets |
|
316 |
|
(117) |
|
— |
|
— |
|
212 |
|
|
411 |
|
Cash collateral received |
|
1,072 |
|
(487) |
|
— |
|
— |
|
— |
|
|
586 |
|
NEU Commercial Paper |
|
1,004 |
|
235 |
|
— |
|
— |
|
8 |
|
|
1,247 |
|
Bank overdrafts |
|
250 |
|
15 |
|
— |
|
(31) |
|
— |
|
|
234 |
|
Other financial liabilities |
|
105 |
|
(26) |
|
336 |
(2) |
(3) |
|
202 |
(3) |
|
615 |
|
Current and non-current financial liabilities excluding derivatives included in the calculation of net financial debt |
|
36,638 |
|
(1,476) |
|
483 |
|
(104) |
|
452 |
|
|
35,993 |
|
Net derivatives |
|
(1,069) |
|
5 |
|
— |
|
59 |
|
326 |
|
|
(678) |
|
Cash collateral paid |
|
(38) |
|
17 |
|
— |
|
— |
|
— |
|
|
(21) |
|
Cash flows from financing activities |
|
|
|
(1,454) |
|
|
|
|
|
|
|
|
|
|
(1) | Mainly includes changes in accrued interests not yet due. |
(2) | Includes 279 million euros recognized in relation to the purchase option granted by Orange Belgium to Nethys in connection with the acquisition of VOO in 2023 (Note 3.2). |
(3) | Includes 198 million euros in subordinated notes reclassified as current financial liabilities following the announcement on December 13, 2023 of Orange's intention to exercise its redemption option on February 7, 2024 in respect of these notes (Note 15.4). |
Consolidated Financial Statements 2023 |
F-98 |
(in millions of euros) |
|
December 31, |
|
Cash |
|
Other changes with no impact |
|
|
December 31, |
||||
|
|
2021 |
|
flows |
|
on cash flows |
|
|
2022 |
||||
|
|
|
|
|
|
Changes in |
|
Foreign |
|
Other (1) |
|
|
|
|
|
|
|
|
|
the scope of |
|
exchange |
|
|
|
|
|
|
|
|
|
|
|
consolidation |
|
movement |
|
|
|
|
|
TDIRA |
|
636 |
|
— |
|
— |
|
— |
|
2 |
|
|
638 |
Bonds |
|
29,010 |
|
813 |
|
— |
|
88 |
|
32 |
|
|
29,943 |
Bank loans and from development organizations and multilateral lending institutions |
|
3,206 |
|
135 |
|
6 |
|
(28) |
|
(11) |
|
|
3,309 |
Debt relating to financed assets |
|
245 |
|
(97) |
|
— |
|
— |
|
168 |
|
|
316 |
Cash collateral received |
|
389 |
|
684 |
|
— |
|
— |
|
— |
|
|
1,072 |
NEU Commercial Paper |
|
1,457 |
|
(456) |
|
— |
|
— |
|
3 |
|
|
1,004 |
Bank overdrafts |
|
342 |
|
(39) |
|
— |
|
(46) |
|
(7) |
|
|
250 |
Other financial liabilities |
|
64 |
|
(1) |
|
4 |
|
4 |
|
35 |
|
|
105 |
Current and non-current financial liabilities excluding derivatives included in the calculation of net financial debt |
|
35,348 |
|
1,038 |
|
10 |
|
18 |
|
222 |
|
|
36,638 |
Net derivatives |
|
(405) |
|
(91) |
|
— |
|
(213) |
|
(360) |
|
|
(1,069) |
Cash collateral paid |
|
(27) |
|
(12) |
|
— |
|
— |
|
— |
|
|
(38) |
Cash flows from financing activities |
|
|
|
936 |
|
|
|
|
|
|
|
|
|
(1) | Mainly includes changes in accrued interest not yet due. |
(in millions of euros) |
|
December 31, |
|
Cash |
|
Other changes with no impact |
|
|
December 31, |
||||
|
|
2020 |
|
flows |
|
on cash flows |
|
|
2021 |
||||
|
|
|
|
|
|
Changes in |
|
Foreign |
|
Other (1) |
|
|
|
|
|
|
|
|
|
the scope of |
|
exchange |
|
|
|
|
|
|
|
|
|
|
|
consolidation |
|
movement |
|
|
|
|
|
TDIRA |
|
636 |
|
— |
|
— |
|
— |
|
— |
|
|
636 |
Bonds |
|
29,848 |
|
(1,385) |
|
— |
|
599 |
|
(52) |
|
|
29,010 |
Bank loans and from development organizations and multilateral lending institutions |
|
3,671 |
|
(496) |
|
— |
|
27 |
|
3 |
|
|
3,206 |
Debt relating to financed assets |
|
295 |
|
(80) |
|
— |
|
— |
|
30 |
|
|
245 |
Cash collateral received |
|
31 |
|
358 |
|
— |
|
— |
|
— |
|
|
389 |
NEU Commercial Paper |
|
555 |
|
903 |
|
— |
|
— |
|
(1) |
|
|
1,457 |
Bank overdrafts |
|
154 |
|
173 |
|
— |
|
15 |
|
— |
|
|
342 |
Other financial liabilities |
|
70 |
|
(136) |
|
(41) |
|
3 |
|
168 |
|
|
64 |
Current and non-current financial liabilities excluding derivatives included in the calculation of net financial debt |
|
35,260 |
|
(663) |
|
(41) |
|
644 |
|
148 |
|
|
35,348 |
Net derivatives |
|
510 |
|
201 |
|
— |
|
(457) |
|
(659) |
|
|
(405) |
Cash collateral paid |
|
(642) |
|
615 |
|
— |
|
— |
|
— |
|
|
(27) |
Cash flows from financing activities |
|
|
|
153 |
|
|
|
|
|
|
|
|
|
(1) | Mainly includes changes in accrued interest not yet due. |
Net financial debt by currency
Net financial debt by currency is presented in the table below, after foreign exchange effects of hedging derivatives (excluding instruments set up to hedge operating items).
(equivalent value in millions of euros at year-end closing rate) |
|
EUR |
|
USD |
|
GBP |
|
PLN |
|
EGP |
|
JOD |
|
MAD |
|
Other |
|
Total |
Gross financial debt after derivatives |
|
25,647 |
|
3,992 |
|
2,936 |
|
52 |
|
183 |
|
99 |
|
542 |
|
1,754 |
|
35,205 |
Financial assets included in the calculation of net financial debt |
|
(6,533) |
|
(105) |
|
(1) |
|
(35) |
|
(65) |
|
(84) |
|
(76) |
|
(1,304) |
|
(8,203) |
Net debt by currency before effect of foreign exchange derivatives (1) |
|
19,114 |
|
3,888 |
|
2,934 |
|
17 |
|
118 |
|
15 |
|
465 |
|
450 |
|
27,002 |
Effect of foreign exchange derivatives |
|
6,680 |
|
(4,016) |
|
(2,932) |
|
839 |
|
— |
|
— |
|
— |
|
(571) |
|
— |
Net financial debt by currency after effect of foreign exchange derivatives |
|
25,795 |
|
(129) |
|
3 |
|
856 |
|
118 |
|
15 |
|
465 |
|
(121) |
|
27,002 |
(1) | Including the market value of derivatives in local currency. |
Consolidated Financial Statements 2023 |
F-99 |
Accounting policies
Cash and cash equivalents
The Group classifies investments as cash equivalents in the statement of financial position and statement of cash flows when they comply with the conditions of IAS 7 (see cash management detailed in Notes 14.3 and 14.5):
– held in order to face short-term cash commitments; and
– short-term and highly liquid assets at the acquisition date, readily convertible into known amount of cash and not exposed to any material risk of change in value.
Bonds, bank loans and loans from multilateral lending institutions
Among financial liabilities, only commitments to repurchase non-controlling interests are recognized at fair value through profit or loss.
Borrowings are recognized upon origination at the discounted value of the sums to be paid and subsequently measured at amortized cost using the effective interest method. Transaction costs that are directly attributable to the acquisition or issue of the financial liability are deducted from the liability’s carrying value. The costs are subsequently amortized over the life of the liability, using the effective interest rate method.
Some financial liabilities at amortized cost, including borrowings, are subject to hedging. This mainly relates to the hedging of payables in foreign currencies against the exposure of their future cash flows to foreign exchange risk (cash flow hedging).
13.4 TDIRA
Perpetual bonds redeemable for shares (titres à durée indéterminée remboursables en actions or “TDIRAs”) with a par value of 14,100 euros are listed on Euronext Paris. Their issuance was described in a prospectus approved by the Commission des Opérations de Bourse (now the Autorité des marchés financiers or AMF – French Financial Markets Authority) on February 24, 2003.
At December 31, 2023, taking into account redemptions since their issuance, 44,880 TDIRAs remain outstanding with a total par value of 633 million euros.
These TDIRAs are redeemable for new Orange SA shares at any time at the holders’ request or, under certain conditions as described in the appropriate prospectus, at Orange SA’s initiative based on a ratio of 622.844 shares to one TDIRA (i.e. a conversion price of 22.638 euros). The initial ratio of 300 shares to one TDIRA has been adjusted several times to protect bondholders’ rights and may be further adjusted under the terms and conditions set out in the prospectus.
Since January 1, 2010, the interest rate on the TDIRAs has been the three-month Euribor +2.5%.
TDIRAs are subject to split accounting with one part treated as equity and another part as a liability. For the securities outstanding at December 31, 2023, the “equity” component before deferred tax stood at 152 million euros.
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
|
Number of securities |
|
44,880 |
|
44,880 |
|
44,880 |
|
Equity component before deferred taxes |
|
152 |
|
152 |
|
152 |
|
Debt component |
|
643 |
|
638 |
|
636 |
|
o/w accrued interests not yet due |
|
10 |
|
6 |
|
3 |
|
Paid interests |
|
36 |
|
16 |
|
13 |
|
Accounting policies
Some Group financial instruments include both a financial debt component and an equity component. This relates to perpetual bonds redeemable for shares (TDIRAs). On initial recognition, the debt component is measured at its market value, corresponding to the value of the contractually determined future cash flows discounted at the market rate applied at the date of issuance to comparable instruments providing substantially the same conditions, but without the option to convert to or redeem for shares. This debt component is subsequently recognized at amortized cost.
The equity component, originally calculated as the difference between the notional value of the instrument and the fair value of the debt component, remains the same throughout the life of the instrument.
Consolidated Financial Statements 2023 |
F-100 |
13.5 Bonds
In 2023, the Group carried out the following bond issues:
Notional currency |
|
Initial |
|
Maturity |
|
Interest rate |
|
Issuer |
|
Type of operations |
|
Amounts |
|
|
|
nominal |
|
|
|
(%) |
|
|
|
|
|
in millions |
|
|
|
amount |
|
|
|
|
|
|
|
|
|
of euros |
|
|
|
(in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
of currency) |
|
|
|
|
|
|
|
|
|
|
|
EUR |
|
500 |
|
September 11, 2035 |
|
3.875 |
(1) |
Orange SA |
|
Issuance |
|
500 |
|
Total of issuances |
|
|
|
|
|
|
|
|
|
|
|
500 |
|
EUR |
|
500 |
|
March 1, 2023 |
|
2.500 |
|
Orange SA |
|
Repayment at maturity |
|
(500) |
|
EUR |
|
750 |
|
September 11, 2023 |
|
0.750 |
|
Orange SA |
|
Repayment at maturity |
|
(744) |
|
HKD |
|
700 |
|
October 6, 2023 |
|
3.230 |
|
Orange SA |
|
Repayment at maturity |
|
(85) |
|
HKD |
|
410 |
|
December 22, 2023 |
|
3.550 |
|
Orange SA |
|
Repayment at maturity |
|
(48) |
|
MAD |
|
1,090 |
|
December 18, 2025 |
|
3.970 |
|
Médi Telecom |
|
Regular annual basis repayment |
|
(14) |
|
MAD |
|
720 |
|
December 18, 2025 |
|
1Y BDT + 1.00 |
(2) |
Médi Telecom |
|
Regular annual basis repayment |
|
(9) |
|
MAD |
|
1,002 |
|
December 10, 2026 |
|
3.400 |
|
Médi Telecom |
|
Regular annual basis repayment |
|
(13) |
|
MAD |
|
788 |
|
December 10, 2026 |
|
1Y BDT + 0.85 |
(2) |
Médi Telecom |
|
Regular annual basis repayment |
|
(10) |
|
MAD |
|
300 |
|
June 3, 2026 |
|
2.600 |
|
Médi Telecom |
|
Regular annual basis repayment |
|
(7) |
|
MAD |
|
1,200 |
|
June 3, 2026 |
|
1Y BDT + 0.55 |
(2) |
Médi Telecom |
|
Regular annual basis repayment |
|
(27) |
|
XOF |
|
100,000 |
|
July 16, 2027 |
|
6.500 |
|
Sonatel |
|
Regular annual basis repayment |
|
(30) |
|
Total of repayments |
|
|
|
|
|
|
|
|
|
|
|
(1,488) |
|
(1) | Bond with a step-up clause (clause that triggers a change in the coupon rate if Orange breaches its sustainable performance commitments, see Note 14.4). |
(2) | The 1Y BDT rate corresponds to the 52 weeks Moroccan treasury notes rate (recalculated once a year). |
The unmatured bonds at December 31, 2023, presented below, were all issued by Orange SA, with the exception of three commitments (each with a fixed-rate tranche and a variable-rate tranche) denominated in Moroccan dirhams held by Médi Telecom and one bond in CFA francs issued by Sonatel.
With the exception of the commitments made by Médi Telecom and Sonatel which are redeemable on a regular annual basis, at December 31, 2023, the bonds issued by the Group are redeemable at maturity. No specific guarantee has been given in relation to their issuance. Some bonds may be redeemed in advance at the request of the issuer.
Consolidated Financial Statements 2023 |
F-101 |
Notional |
|
Initial nominal amount |
|
Maturity |
|
Interest rate (%) |
|
Outstanding amount (in millions of euros) |
|
||||
currency |
|
(in millions of |
|
|
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
currency units) |
|
|
|
|
|
2023 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds matured before December 31, 2023 |
|
|
|
— |
|
1,377 |
|
1,876 |
|
||||
EUR |
|
650 |
|
January 9, 2024 |
|
3.125 |
|
650 |
|
650 |
|
650 |
|
EUR |
|
1,250 |
|
July 15, 2024 |
|
1.125 |
|
1,250 |
|
1,250 |
|
1,250 |
|
EUR |
|
750 |
|
May 12, 2025 |
|
1.000 |
|
750 |
|
750 |
|
750 |
|
EUR |
|
800 |
|
September 12, 2025 |
|
1.000 |
|
800 |
|
800 |
|
800 |
|
NOK |
|
500 |
|
September 17, 2025 |
|
3.350 |
|
44 |
|
48 |
|
50 |
|
CHF |
|
400 |
|
November 24, 2025 |
|
0.200 |
|
432 |
|
406 |
|
387 |
|
GBP |
|
350 |
|
December 5, 2025 |
|
5.250 |
|
302 |
|
296 |
|
312 |
|
MAD |
|
1,090 |
|
December 18, 2025 |
|
3.970 |
|
28 |
|
42 |
|
59 |
|
MAD (1) |
|
720 |
|
December 18, 2025 |
|
1Y BDT + 1.00 |
|
19 |
|
28 |
|
39 |
|
MAD |
|
300 |
|
June 3, 2026 |
|
2.600 |
|
17 |
|
24 |
|
— |
|
MAD (1) |
|
1,200 |
|
June 3, 2026 |
|
1Y BDT + 0.55 |
|
69 |
|
94 |
|
— |
|
EUR |
|
700 |
|
June 29, 2026 |
|
0.000 |
|
700 |
|
700 |
|
700 |
|
EUR |
|
750 |
|
September 4, 2026 |
|
0.000 |
|
750 |
|
750 |
|
750 |
|
EUR |
|
75 |
|
November 30, 2026 |
|
4.125 |
|
75 |
|
75 |
|
75 |
|
MAD |
|
1,002 |
|
December 10, 2026 |
|
3.400 |
|
39 |
|
51 |
|
68 |
|
MAD (1) |
|
788 |
|
December 10, 2026 |
|
1Y BDT + 0.85 |
|
31 |
|
40 |
|
54 |
|
EUR |
|
750 |
|
February 3, 2027 |
|
0.875 |
|
750 |
|
750 |
|
750 |
|
EUR |
|
750 |
|
July 7, 2027 |
|
1.250 |
|
750 |
|
750 |
|
750 |
|
XOF |
|
100,000 |
|
July 15, 2027 |
|
6.500 |
|
122 |
|
152 |
|
152 |
|
EUR |
|
500 |
|
September 9, 2027 |
|
1.500 |
|
500 |
|
500 |
|
500 |
|
EUR |
|
1,000 |
|
March 20, 2028 |
|
1.375 |
|
1,000 |
|
1,000 |
|
1,000 |
|
EUR |
|
50 |
|
April 11, 2028 |
|
3.220 |
|
50 |
|
50 |
|
50 |
|
NOK |
|
800 |
|
July 24, 2028 |
|
2.955 |
|
71 |
|
76 |
|
80 |
|
GBP |
|
500 |
|
November 20, 2028 |
|
8.125 |
|
575 |
|
564 |
|
595 |
|
EUR |
|
1,250 |
|
January 15, 2029 |
|
2.000 |
|
1,250 |
|
1,250 |
|
1,250 |
|
EUR |
|
150 |
|
April 11, 2029 |
|
3.300 |
|
150 |
|
150 |
|
150 |
|
CHF |
|
100 |
|
June 22, 2029 |
|
0.625 |
|
108 |
|
102 |
|
97 |
|
EUR |
|
500 |
|
September 16, 2029 |
|
0.125 |
|
500 |
|
500 |
|
500 |
|
EUR |
|
1,000 |
|
January 16, 2030 |
|
1.375 |
|
1,000 |
|
1,000 |
|
1,000 |
|
EUR |
|
1,200 |
|
September 12, 2030 |
|
1.875 |
|
1,200 |
|
1,200 |
|
1,200 |
|
EUR |
|
105 |
|
September 17, 2030 |
|
2.600 |
|
105 |
|
105 |
|
105 |
|
EUR |
|
100 |
|
November 6, 2030 |
|
0.000 |
(2) |
100 |
|
100 |
|
100 |
|
USD |
|
2,500 |
|
March 1, 2031 |
|
9.000 |
(3) |
2,227 |
|
2,308 |
|
2,173 |
|
EUR |
|
300 |
|
May 29, 2031 |
|
1.342 |
|
300 |
|
300 |
|
300 |
|
EUR |
|
750 |
|
November 16, 2031 |
|
3.625 |
|
750 |
|
750 |
|
— |
|
EUR |
|
50 |
|
December 5, 2031 |
|
4.300 (zero coupon) |
|
82 |
|
79 |
|
75 |
|
EUR |
|
50 |
|
December 8, 2031 |
|
4.350 (zero coupon) |
|
83 |
|
80 |
|
77 |
|
EUR |
|
50 |
|
January 5, 2032 |
|
4.450 (zero coupon) |
|
80 |
|
77 |
|
74 |
|
GBP |
|
750 |
|
January 15, 2032 |
|
3.250 |
|
863 |
|
846 |
|
893 |
|
EUR |
|
750 |
|
April 7, 2032 |
|
1.625 |
|
750 |
|
750 |
|
750 |
|
(1) | Bonds issued by Médi Telecom. The 1Y BDT rate corresponds to the 52 weeks Moroccan treasury notes rate (recalculated once a year). |
(2) | Bond bearing interest at a fixed rate of 2% until 2017 and then at CMS 10 years x 166% fixed annually (0% for November 2024 maturity), floored at 0% and capped at 4% until 2023 and at 5% thereafter. |
(3) | Bond with a step-up clause (clause that triggers a change in the coupon rate if Orange’s credit rating from the rating agencies changes – see Note 14.3). |
Consolidated Financial Statements 2023 |
F-102 |
Notional |
|
Initial nominal |
|
Maturity |
|
Interest rate (%) |
|
Outstanding amount (in millions of euros) |
|
||||
currency |
|
amount |
|
|
|
|
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
(in millions of |
|
|
|
|
|
2023 |
|
2022 |
|
2021 |
|
|
|
currency units) |
|
|
|
|
|
|
|
|
|
|
|
EUR |
|
500 |
|
May 18, 2032 |
|
2.375 |
|
500 |
|
500 |
|
— |
|
EUR |
|
1,000 |
|
September 4, 2032 |
|
0.500 |
|
1,000 |
|
1,000 |
|
1,000 |
|
EUR |
|
1,500 |
|
January 28, 2033 |
|
8.125 |
|
1,500 |
|
1,500 |
|
1,500 |
|
EUR |
|
55 |
|
September 30, 2033 |
|
3.750 |
|
55 |
|
55 |
|
55 |
|
EUR |
|
1,000 |
|
December 16, 2033 |
|
0.625 |
|
1,000 |
|
1,000 |
|
1,000 |
|
GBP |
|
500 |
|
January 23, 2034 |
|
5.625 |
|
575 |
|
564 |
|
595 |
|
HKD |
|
939 |
|
June 12, 2034 |
|
3.070 |
|
109 |
|
113 |
|
106 |
|
EUR |
|
800 |
|
June 29, 2034 |
|
0.750 |
|
800 |
|
800 |
|
800 |
|
EUR |
|
300 |
|
July 11, 2034 |
|
1.200 |
|
300 |
|
300 |
|
300 |
|
EUR |
|
500 |
|
September 11, 2035 |
|
3.875 |
(4) |
500 |
|
— |
|
— |
|
EUR |
|
50 |
|
April 16, 2038 |
|
3.500 |
|
50 |
|
50 |
|
50 |
|
USD |
|
900 |
|
January 13, 2042 |
|
5.375 |
|
814 |
|
844 |
|
795 |
|
USD |
|
850 |
|
February 6, 2044 |
|
5.500 |
|
769 |
|
797 |
|
750 |
|
EUR |
|
750 |
|
September 4, 2049 |
|
1.375 |
|
750 |
|
750 |
|
750 |
|
GBP |
|
500 |
|
November 22, 2050 |
|
5.375 |
|
575 |
|
564 |
|
595 |
|
Outstanding amount of bonds |
|
|
|
|
|
|
|
28,623 |
|
29,654 |
|
28,737 |
|
Accrued interests |
|
|
|
|
|
|
|
443 |
|
454 |
|
445 |
|
Other |
|
|
|
|
|
|
|
(147) |
|
(164) |
|
(172) |
|
Total |
|
|
|
|
|
|
|
28,919 |
|
29,943 |
|
29,010 |
|
(4) | Bond with a step-up clause (clause that triggers a change in the coupon rate if Orange’s breaches its sustainable performance commitments, see note 14.4). |
13.6 Loans from development organizations and multilateral lending institutions
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Médi Telecom |
|
336 |
|
183 |
|
167 |
|
Orange Côte d'Ivoire |
|
304 |
|
253 |
|
140 |
|
Sonatel |
|
238 |
|
266 |
|
244 |
|
Orange Mali |
|
217 |
|
201 |
|
207 |
|
Orange Egypt |
|
167 |
|
163 |
|
137 |
|
VOO |
|
85 |
|
— |
|
— |
|
Orange Bail |
|
36 |
|
12 |
|
3 |
|
Orange Burkina Faso |
|
33 |
|
36 |
|
42 |
|
Orange Madagascar |
|
24 |
|
12 |
|
18 |
|
Orange Jordanie |
|
18 |
|
35 |
|
49 |
|
Orange Cameroon |
|
12 |
|
36 |
|
78 |
|
Orange Polska |
|
9 |
|
10 |
|
6 |
|
Other |
|
15 |
|
15 |
|
15 |
|
Bank loans |
|
1,493 |
|
1,222 |
|
1,105 |
|
Orange SA(1) |
|
1,846 |
|
2,087 |
|
2,101 |
|
Loans from development organizations and multilateral lending institutions(2) |
|
1,846 |
|
2,087 |
|
2,101 |
|
Total |
|
3,339 |
|
3,309 |
|
3,206 |
|
(1) | In 2023, Orange SA negotiated a new loan of 500 million euros, maturing in 2030 and repaid a loan at maturity of 750 million euros. In 2021, Orange SA repaid at maturity a loan of 190 million euros. |
(2) | Entirely the European Investment Bank. |
Consolidated Financial Statements 2023 |
F-103 |
13.7 Financial assets
Financial assets break down as follows:
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
||||
|
|
Non-current |
|
Current |
|
Total |
|
Total |
|
Total |
Financial assets at fair value through other comprehensive income that will not be reclassified to profit or loss |
|
490 |
|
— |
|
490 |
|
419 |
|
431 |
Investments securities |
|
490 |
|
— |
|
490 |
|
419 |
|
431 |
Financial assets at fair value through profit or loss |
|
194 |
|
2,678 |
|
2,871 |
|
4,745 |
|
2,496 |
Investments at fair value(1) |
|
— |
|
2,678 |
|
2,678 |
|
4,500 |
|
2,266 |
Investments securities |
|
173 |
|
— |
|
173 |
|
206 |
|
203 |
Cash collateral paid (2) |
|
21 |
|
— |
|
21 |
|
38 |
|
27 |
Other |
|
— |
|
— |
|
— |
|
2 |
|
— |
Financial assets at amortized cost |
|
379 |
|
36 |
|
415 |
|
381 |
|
363 |
Receivables related to investments(3) |
|
69 |
|
25 |
|
94 |
|
106 |
|
105 |
Other |
|
310 |
|
11 |
|
321 |
|
275 |
|
258 |
Total financial assets |
|
1,063 |
|
2,713 |
|
3,776 |
|
5,545 |
|
3,290 |
(1) | NEU Commercial Paper and bonds only (see Note 14.3). |
(2) | See Note 14.5. |
(3) | Including a loan of 27 million euros from Orange SA to Orange Bank. |
Equity securities
Equity securities measured at fair value through other comprehensive income that will not be reclassified to profit or loss
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
|
Investment securities measured at fair value through other comprehensive income that will not be reclassified to profit or loss - in the opening balance |
|
419 |
|
432 |
|
431 |
|
Acquisitions(1) |
|
72 |
|
98 |
|
85 |
|
Changes in fair value (2) |
|
(2) |
|
(108) |
|
11 |
|
Sales |
|
(4) |
|
(7) |
|
(95) |
|
Other movements |
|
5 |
|
3 |
|
— |
|
Investment securities measured at fair value through other comprehensive income that will not be reclassified to profit or loss - in the closing balance |
|
490 |
|
419 |
|
432 |
|
(1) | In 2022, included the effect of Deezer's initial public offering for 77 million euros (see Note 3.2) |
(2) | Deezer's share price at December 31, 2022 led to a decrease in the fair value of (54) million euros (see Note 3.2). |
Equity securities measured at fair value through other comprehensive income that will not be reclassified to profit or loss include numerous shares in companies held by investment funds.
Equity securities measured at fair value through profit or loss
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Investment securities measured at fair value through profit or loss - in the opening balance |
|
205 |
|
203 |
|
141 |
Changes in fair value |
|
(25) |
|
10 |
|
34 |
Other movements |
|
(8) |
|
(8) |
|
27 |
Investment securities measured at fair value through profit or loss - in the closing balance |
|
173 |
|
205 |
|
203 |
Accounting policies
Financial assets
– Financial assets at fair value through profit or loss (FVR)
Consolidated Financial Statements 2023 |
F-104 |
Certain equity securities which are not consolidated or equity-accounted and cash investments such as negotiable debt securities, deposits and UCITS (Undertakings for Collective Investment in Transferable Securities), which are compliant with the Group's liquidity risk management policy, may be designated by Orange as recognized at fair value through profit or loss. These assets are recognized at fair value at initial recognition and subsequently. All changes in fair value are recorded in net financial costs, net.
– Financial assets at fair value through other comprehensive income that will not be reclassified to profit or loss (FVOCI)
Equity securities which are not consolidated or equity-accounted are, subject to exceptions, recognized as assets at fair value through other comprehensive income that will not be reclassified to profit or loss. They are recognized at fair value at initial recognition and subsequently. Temporary changes in value and gains (losses) on disposals are recorded as other comprehensive income that will not be reclassified to profit or loss.
– Financial assets at amortized cost (AC)
This category mainly includes miscellaneous loans and receivables. These instruments are recognized at fair value at initial recognition and are subsequently measured at amortized cost using the effective interest method. If there is any objective evidence of impairment of these assets, the value of the asset is reviewed at the end of each reporting period. An impairment loss is recognized in the income statement when impairment tests demonstrate that the financial asset's carrying value is higher than its recoverable amount. For these financial assets, the provisioning system also covers expected losses according to IFRS 9.
13.8 Derivatives
13.8.1 Market value of derivatives
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
Hedging derivatives |
|
583 |
|
893 |
|
484 |
|
Cash flow hedge derivatives |
|
583 |
|
893 |
|
484 |
|
Derivatives held for trading (1) |
|
95 |
|
176 |
|
(79) |
|
Net derivatives(2) |
|
678 |
|
1,069 |
|
405 |
|
(1) | Mainly related to the effect of the economic hedges of subsidiaries for 35 million euros in 2023, 140 million euros in 2022 and 90 million euros in 2021, the effect of hedges entered into in the context of future issuances for 56 million euros in 2023, 64 million euros in 2022 and 18 million euros in 2021, and the foreign exchange effects of the economic hedges against the revaluation of subordinated notes denominated in pounds sterling (equity instruments recognized at their historical value (see Note 15.4)) for (70) million euros in 2022 and (165) million euros in 2021. |
(2) | Of which foreign exchange effects of the cross currency swaps (classified as hedging or trading) hedging foreign exchange risk on the notional amount of gross debt for 635 million euros in 2023, 694 million euros in 2022 and 657 million euros in 2021. The foreign exchange effect of the cross currency swaps is the difference between the notional converted at the closing rate and the notional converted at the opening rate (or at the trading day spot rate in the case of a new instrument). |
The risks hedged by these derivatives are described in Note 14. These derivatives are associated with cash-collateral agreements, the effects of which are described in Note 14.5.
Accounting policies
Derivatives are measured at fair value in the statement of financial position and presented according to their maturity date, regardless of whether they qualify for hedge accounting under IFRS 9 (hedging instruments versus trading derivatives).
Derivatives are classified as a separate line item in the statement of financial position.
Trading derivatives are economic hedge derivatives not classified as hedges for accounting purposes. Changes in the value of these instruments are recognized directly in profit or loss.
Hedge accounting is applicable when:
– at the inception of the hedge, there is a formal designation and documentation of the hedging relationship;
– the effectiveness of the hedge is demonstrated at inception and it is expected to continue in subsequent periods: i.e. at inception and throughout its duration, the company expects changes in the fair value of the hedged item to be almost fully offset by changes in the fair value of the hedging instrument.
There are three types of hedging accounting:
– a fair value hedge is a hedge of the exposure to changes in the fair value of a recognized asset or liability (or an identified portion of the asset or liability) that are attributable to a particular interest rate and/or currency risk and which could affect profit or loss. The hedged portion of these items is remeasured at fair value in the statement of financial position. Changes in this fair value are recognized in the income statement and offset by symmetrical changes in the fair value of financial hedging instruments to the extent of the hedge effectiveness;
– a cash flow hedge is a hedge of exposure to changes in cash flows attributable to a particular interest rate and/or currency risk associated with a recognized asset or liability or a transaction believed to be highly probable (such as a future purchase or sale) which could affect profit or loss. As the hedged item is not recognized in the statement of financial position, the effective portion of the change in the fair value of the hedging instrument is recognized in other comprehensive income. It is reclassified in profit or loss when the hedged item (financial asset or liability) affects the profit or loss or in the initial cost of the hedged item when it relates to the hedge of a non-financial asset acquisition cost;
Consolidated Financial Statements 2023 |
F-105 |
– a net investment hedge is a hedge of exposure to changes in value attributable to the foreign exchange risk of a net investment in a foreign operation, which could affect profit or loss on the disposal of the foreign operation. The effective portion of the net investment hedge is recorded in other comprehensive income. It is reclassified in profit or loss on disposal of the net investment.
For transactions qualified as fair value hedges and for economic hedges, the foreign exchange impact of changes in the fair value of derivatives is booked in operating income when the underlying hedged item is a commercial transaction and in finance costs, net when the underlying hedged item is a financial asset or liability.
Hedge accounting can be terminated when the hedged item is no longer recognized, i.e. when the Group revokes the designation of the hedging relationship or when the hedging instrument is terminated or exercised. The accounting consequences are as follows:
– fair value hedge: at the hedge accounting termination date, the adjustment of the fair value of the liability is amortized using an effective interest rate recalculated at this date. Should the item hedged disappear, the change in fair value is recognized in the income statement;
– cash flow hedge: amounts recorded in other comprehensive income are immediately reclassified in profit or loss when the hedged item is no longer recognized. In all other cases, amounts are reclassified in profit or loss, on a straight-line basis, throughout the remaining life of the original hedging relationship.
In both cases, subsequent changes in the value of the hedging instrument are recorded in profit or loss.
Concerning the effects of the foreign currency basis spread of cross-currency swaps designated as cash flow hedges, the Group has chosen to designate these as hedging costs. This option enables recognition of these effects in other comprehensive income and amortization of the cost of the basis spread in profit or loss over the period of the hedge.
13.8.2 Cash flow hedges
The main purpose of the Group's cash flow hedges is to neutralize foreign exchange risk on future cash flows (notional, coupons) or to switch floating-rate debt to fixed-rate debt.
The ineffective portion of cash flow hedges recognized in the income statement was not significant during the periods presented. The main hedges unmatured at December 31, 2023, as well as their effects on the financial statements, are detailed in the table below.
(in millions of euros) |
|
Hedged risk |
||||||||
|
|
Total |
|
Exchange and interest rate risk |
|
Exchange risk |
|
Interest rate risk |
|
Commodity risk |
Hedging instruments |
|
583 |
|
Cross Currency Swap |
|
Forward |
|
Interest rate swap |
|
Commodity contracts |
|
|
|
|
|
|
FX swap |
|
Option |
|
|
|
|
|
|
|
|
Option |
|
|
|
|
Carrying amount - asset |
|
735 |
|
703 |
|
1 |
|
— |
|
31 |
Carrying amount - liability |
|
(152) |
|
(143) |
|
(5) |
|
(3) |
|
— |
Change in cash flow hedge reserve |
|
(263) |
|
(236) |
|
9 |
|
1 |
|
(38) |
Gain (loss) recognized in other comprehensive income |
|
(227) |
|
(200) |
|
10 |
|
1 |
|
(38) |
Reclassification in financial result |
|
(36) |
|
(36) |
|
— |
|
— |
|
— |
Reclassification in operating income |
|
2 |
|
— |
|
2 |
|
— |
|
— |
Reclassification in initial carrying amount of hedged item |
|
(3) |
|
— |
|
(3) |
|
— |
|
— |
Cash flow hedge reserve |
|
237 |
|
218 |
|
(2) |
|
— |
|
22 |
o/w related to unmatured hedging instruments |
|
(110) |
|
(129) |
|
(2) |
|
— |
|
22 |
o/w related to discontinued hedges |
|
347 |
|
347 |
|
— |
|
— |
|
— |
Hedged item |
|
|
|
Bonds and credit lines |
|
Purchases of handsets and equipment |
|
Bonds and Lease liabilities |
|
Purchase of energy |
Balance sheet item |
|
|
|
Current and non-current financial liabilities |
|
Property, plant and equipment |
|
Lease and Financial Liabilities - current and non-current |
|
Operating result |
Consolidated Financial Statements 2023 |
F-106 |
The main hedges unmatured at December 31, 2022, as well as their effects on the financial statements, are detailed in the table below.
(in millions of euros) |
|
Hedged risk |
||||||||
|
|
Total |
|
Exchange and interest |
|
|
|
|
|
|
|
|
|
|
rate risk |
|
Exchange risk |
|
Interest rate risk |
|
Commodity risk |
|
|
|
|
|
|
|
|
|
|
|
Hedging instruments |
|
893 |
|
Cross Currency Swap |
|
Forward |
|
Interest rate swap |
|
Commodity contracts |
|
|
|
|
|
|
FX swap |
|
Option |
|
|
|
|
|
|
|
|
Option |
|
|
|
|
Carrying amount - asset |
|
1,065 |
|
1,002 |
|
3 |
|
— |
|
74 |
Carrying amount - liability |
|
(172) |
|
(156) |
|
(11) |
|
(5) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash flow hedge reserve |
|
288 |
|
225 |
|
(6) |
|
9 |
|
60 |
Gain (loss) recognized in other comprehensive income |
|
304 |
|
244 |
|
(8) |
|
9 |
|
59 |
Reclassification in financial result |
|
(19) |
|
(19) |
|
— |
|
— |
|
— |
Reclassification in operating income |
|
(1) |
|
— |
|
(1) |
|
— |
|
— |
Reclassification in initial carrying amount of hedged item |
|
4 |
|
— |
|
4 |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedge reserve |
|
497 |
|
457 |
|
(4) |
|
(5) |
|
49 |
o/w related to unmatured hedging instruments |
|
114 |
|
74 |
|
(4) |
|
(5) |
|
49 |
o/w related to discontinued hedges |
|
383 |
|
383 |
|
— |
|
— |
|
— |
Hedged item |
|
|
|
Bonds and credit lines |
|
Purchases of handsets |
|
Bonds and Lease |
|
Purchase of energy |
|
|
|
|
|
|
and equipment |
|
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current and non-current |
|
Property, plant and |
|
Lease and Financial Liabilities - |
|
|
Balance sheet item |
|
|
|
financial liabilities |
|
equipment |
|
current and non-current |
|
Operating result |
The main hedges unmatured at December 31, 2021, as well as their effects on the financial statements, are detailed in the table below.
(in millions of euros) |
|
Hedged risk |
||||||
|
|
Total |
|
Exchange and interest |
|
Exchange risk |
|
Interest rate risk |
|
|
|
|
rate risk |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging instruments |
|
484 |
|
Cross Currency Swap |
|
Forward |
|
Interest rate swap |
|
|
|
|
|
|
FX swap |
|
Option |
|
|
|
|
|
|
Option |
|
|
Carrying amount - asset |
|
576 |
|
575 |
|
1 |
|
— |
Carrying amount - liability |
|
(91) |
|
(76) |
|
— |
|
(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash flow hedge reserve |
|
317 |
|
311 |
|
(2) |
|
9 |
Gain (loss) recognized in other comprehensive income |
|
358 |
|
347 |
|
3 |
|
9 |
Reclassification in financial result |
|
(38) |
|
(36) |
|
(2) |
|
— |
Reclassification in operating income |
|
— |
|
— |
|
— |
|
— |
Reclassification in initial carrying amount of hedged item |
|
(3) |
|
— |
|
(3) |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedge reserve |
|
210 |
|
220 |
|
(9) |
|
(2) |
o/w related to unmatured hedging instruments |
|
(192) |
|
(181) |
|
(9) |
|
(2) |
o/w related to discontinued hedges |
|
402 |
|
402 |
|
— |
|
— |
Hedged item |
|
|
|
Bonds and credit |
|
Purchases of handsets |
|
Bonds and Finance |
|
|
|
|
lines |
|
and equipment |
|
Lease |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current and non-current |
|
Property, plant and |
|
Current and non-current |
Balance sheet item |
|
|
|
financial liabilities |
|
equipment |
|
financial liabilities |
Consolidated Financial Statements 2023 |
F-107 |
The nominal amounts of the main cash flow hedges as of December 31, 2023 are presented below.
|
|
Notional amounts of hedging instruments per maturity |
|
||||||||
|
|
(in millions of hedged currency units) |
|
||||||||
|
|
2024 |
|
2025 |
|
2026 |
|
2027 |
|
2028 |
|
|
|
|
|
|
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
beyond |
|
Orange SA |
|
|
|
|
|
|
|
|
|
|
|
Cross currency swaps |
|
|
|
|
|
|
|
|
|
|
|
CHF |
|
— |
|
400 |
|
— |
|
— |
|
100 |
(1) |
GBP |
|
— |
|
262 |
|
— |
|
— |
|
2,250 |
(2) |
HKD |
|
— |
|
— |
|
— |
|
— |
|
939 |
(3) |
NOK |
|
— |
|
500 |
|
— |
|
— |
|
800 |
(4) |
USD |
|
— |
|
— |
|
— |
|
— |
|
4,200 |
(5) |
Interest rate swaps |
|
|
|
|
|
|
|
|
|
|
|
EUR |
|
— |
|
— |
|
— |
|
— |
|
350 |
(6) |
FX Forward |
|
|
|
|
|
|
|
|
|
|
|
USD |
|
120 |
|
— |
|
— |
|
— |
|
— |
|
Commodity hedging |
|
|
|
|
|
|
|
|
|
|
|
PLN |
|
10 |
|
16 |
|
17 |
|
19 |
|
71 |
|
(1) | 100 million Swiss francs maturing in 2029. |
(2) | 500 million pounds sterling maturing in 2028, 750 million pounds sterling maturing in 2032, 500 million pounds sterling maturing in 2034 and 500 million pounds sterling maturing in 2050. |
(3) | 939 million Hong Kong dollars maturing in 2034. |
(4) | 800 million Norwegian kroner maturing in 2028. |
(5) | 2,450 million US dollars maturing in 2031, 900 million US dollars maturing in 2042 and 850 million US dollars maturing in 2044. |
(6) | 350 million euros maturing in 2030. |
Note 14 Information on market risk and fair value of financial assets and liabilities (telecom activities)
The Group uses financial position or performance indicators that are not specifically defined by IFRS, such as EBITDAaL (see Note 1.10) and net financial debt (see Note 13.3).
Market risks are monitored by Orange’s Treasury and Financing Committee, which reports to the Executive Committee. The Committee is chaired by the Group’s Executive Committee member in charge of Finance, Performance and Development and meets on a quarterly basis.
It sets the guidelines for managing the Group’s debt, especially in respect of its interest rate, foreign exchange, liquidity and counterparty risk exposure for the coming months, and reviews past management (transactions carried out, financial results).
Macroeconomic events and their consequences on the financial market did not call into question the risk management policy relating to financial instruments. The Group continued to set up and manage hedging instruments in order to limit its exposure to operational and financial foreign exchange and interest rate risks, while maintaining a diversified financing policy.
14.1 Interest rate risk management
Management of fixed-rate/variable-rate debt
Orange group seeks to manage its fixed-rate/variable-rate exposure in euros in order to minimize interest costs by using firm and conditional interest rate derivatives such as swaps, futures, caps and floors.
The fixed-rate component of gross financial debt, excluding cash collateral received and agreements to buy back non-controlling interests, is estimated at 91% at December 31, 2023, 96% at December 31, 2022 and 94% at December 31, 2021.
Sensitivity analysis of the Group’s position to changes in interest rates
The sensitivity of the Group’s financial assets and liabilities to interest rate risk is only analyzed for the components of net financial debt that are interest-bearing and therefore exposed to interest rate risk.
Sensitivity of financial expenses
Based on a constant amount of debt and a constant management policy, a 1% rise in interest rates would increase the annual cost of gross financial debt by 14 million euros, while a decrease of 1% would lower it by 12 million euros.
Sensitivity of cash flow hedge reserves
A 1% rise in euro interest rates would improve the market value of derivatives designated as cash flow hedges and increase the associated cash flow hedge reserves by approximately 695 million euros. A 1% decrease in euro interest rates would reduce their market value and decrease the cash flow hedge reserve by approximately 696 million euros.
Consolidated Financial Statements 2023 |
F-108 |
14.2 Foreign exchange risk management
Operational foreign exchange risk
The Group’s foreign operations are carried out by entities that operate in their own country and mainly in their own currency. Their operational exposure to foreign exchange risk is therefore limited to certain types of flows: purchases of equipment or network capacity, purchases of devices and equipment sold or leased to customers and purchases from or sales to international carriers.
Whenever possible, the entities of the Orange group have put in place policies to hedge this exposure (see Note 13.8).
Financial foreign exchange risk
Financial foreign exchange risk mainly relates to:
– dividends paid to the parent company: in general, the Group’s policy is to economically hedge this risk from the date of the relevant subsidiary’s Shareholders’ Meeting;
– financing of the subsidiaries: except in special cases, the subsidiaries are required to cover their funding needs in their functional currency;
– Group financing: most of the Group’s bonds, after derivatives, are denominated in euros. From time to time, Orange SA issues bonds in markets other than euro markets (primarily the US dollar, pound sterling and Swiss franc). If Orange SA does not have assets in these currencies, in most cases, the issues are translated into euros through cross-currency swaps. The debt allocation by currency also depends on the level of interest rates and particularly on the interest rate differential relative to the euro.
Following the repurchase at the end of 2022 of the last subordinated notes denominated in pounds sterling (see Note 15.4), the Group is no longer exposed to the financial exchange risk resulting from these instruments.
The table below shows the main exposures to foreign exchange fluctuations of the net financial debt in foreign currencies of Orange SA, Orange Polska and Orange Egypt, and also shows the sensitivity of the entity to a 10% change in the foreign exchange rates of the currencies to which it is exposed. Orange SA and Orange Egypt are the entities bearing the main foreign exchange risk, including internal transactions that generate a net foreign exchange gain or loss in the Consolidated Financial Statements.
|
|
Exposure in currency units |
|
Sensitivity analysis |
||||||||||||
(in millions of currency units) |
|
EUR |
|
USD |
|
GBP |
|
PLN |
|
CHF |
|
Total |
|
10% gain in |
|
10% loss in |
|
|
|
|
|
|
|
|
|
|
|
|
translated |
|
euro |
|
euro |
Orange SA |
|
— |
|
8 |
|
— |
|
(1) |
|
(13) |
|
(7) |
|
1 |
|
(1) |
Orange Polska |
|
(116) |
|
(6) |
|
— |
|
— |
|
— |
|
(121) |
|
11 |
|
(13) |
Orange Egypt |
|
— |
|
(83) |
|
— |
|
— |
|
— |
|
(75) |
|
7 |
|
(8) |
Total (currencies) |
|
(116) |
|
(80) |
|
— |
|
(1) |
|
(13) |
|
(202) |
|
|
|
|
Foreign exchange risk to assets
Due to its international presence, the Orange group’s statement of financial position is exposed to foreign exchange fluctuations, as these affect the translation of the assets of subsidiaries and shareholdings denominated in foreign currencies. The currencies concerned are mainly the pound sterling, the zloty, the Egyptian pound, the US dollar, the Jordanian dinar and the Moroccan dirham.
To hedge its largest foreign asset exposures, Orange has issued debt in the relevant currencies.
The amounts presented below take into account Mobile Financial Services activities (mainly in euros).
|
|
Contribution to consolidated net assets |
|
Sensitivity analysis |
||||||||||||||||||
|
|
EUR |
|
USD |
|
GBP |
|
PLN |
|
EGP |
|
JOD |
|
MAD |
|
Other |
|
Total |
|
10% |
|
10% |
(in millions of euros) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
currencies |
|
|
|
gain in |
|
loss in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
euro |
|
euro |
Net assets excluding net debt (a)(1) |
|
51,599 |
|
232 |
|
68 |
|
3,591 |
|
732 |
|
547 |
|
1,012 |
|
4,320 |
|
62,101 |
|
(955) |
|
1,167 |
Net debt by currency including derivatives (b)(2) |
|
(25,795) |
|
129 |
|
(3) |
|
(856) |
|
(118) |
|
(15) |
|
(465) |
|
121 |
|
(27,002) |
|
110 |
|
(134) |
Net assets by currency (a) + (b) |
|
25,804 |
|
360 |
|
65 |
|
2,735 |
(3) |
614 |
|
532 |
|
547 |
|
4,441 |
|
35,098 |
|
(845) |
|
1,033 |
(1) | Excluding components of net financial debt. |
(2) | Net financial debt as defined and used by Orange does not take into account Mobile Financial Services activities, for which this concept is not relevant (see Note 13.3). |
(3) | Share of net assets attributable to owners of the parent company in zlotys amounts to 1,386 million euros. |
Consolidated Financial Statements 2023 |
F-109 |
Due to its international presence, the Orange group income statement is also exposed to risk arising from changes in foreign exchange rates due to the conversion, in the consolidated financial statements, of its foreign subsidiaries’ financial statements.
(in millions of euros) |
|
Contribution to consolidated financial income statement |
|
Sensitivity analysis |
|
||||||||||||||||||
|
|
EUR |
|
USD |
|
GBP |
|
PLN |
|
EGP |
|
JOD |
|
MAD |
|
Other |
|
Total |
|
10% gain |
|
10% loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
currencies |
|
|
|
in euro |
|
in euro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
31,620 |
|
1,154 |
|
272 |
|
2,822 |
|
751 |
|
462 |
|
700 |
|
6,340 |
|
44,122 |
|
(1,137) |
|
1,389 |
|
EBITDAaL |
|
9,310 |
|
183 |
|
6 |
|
695 |
|
298 |
|
189 |
|
200 |
|
2,154 |
|
13,035 |
|
(339) |
|
414 |
|
Operating income |
|
2,876 |
|
108 |
|
(7) |
|
270 |
|
171 |
|
107 |
|
62 |
|
1,382 |
|
4,969 |
|
(190) |
|
233 |
|
14.3 Liquidity risk management
Diversification of sources of funding
Orange has diversified sources of funding:
– regular issues in the bond markets;
– occasional financing through loans from multilateral or development lending institutions;
– issues in the short-term securities markets under the NEU Commercial Paper program (Negotiable European Commercial Paper, formerly called "commercial paper").
Liquidity of investments
Orange invests its cash surpluses in cash equivalents that meet IAS 7 cash equivalent criteria or at fair value investments (negotiable debt securities, bonds with a maturity of no more than two years, UCITS and term deposits). These investments prioritize minimizing the risk of capital loss over performance.
Cash, cash equivalents and fair value investments are held mainly in France and other European Union countries, which are not subject to restrictions on convertibility or exchange controls.
Smoothing debt maturities
The policy followed by Orange is to apportion debt maturities evenly over the years to come.
The following table shows undiscounted future cash flows for each financial liability shown on the statement of financial position. The key assumptions used in this schedule are:
– amounts in foreign currencies are translated into euros at the year-end closing rate;
– future variable-rate interest is based on the last fixed coupon, unless a better estimate is available;
– TDIRAs being necessarily redeemable in new shares, no redemption is taken into account in the maturity analysis. In addition, as the interest payable on the bonds is due over an undetermined period (see Note 13.4), only interest payable for the first period is included (including interest payments for other periods would not provide relevant information);
– the maturities of revolving credit lines are the contractual maturity dates;
– “Other items” (undated and non-cash items) reconcile, for financial liabilities not accounted for at fair value, the future cash flows and the balance in the statement of financial position.
Consolidated Financial Statements 2023 |
F-110 |
(in millions of euros) |
|
Note |
|
December 31, |
|
2024 |
|
2025 |
|
2026 |
|
2027 |
|
2028 |
|
2029 |
|
Other |
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
and beyond |
|
items (1) |
TDIRA |
|
13.4 |
|
643 |
|
10 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
633 |
Bonds |
|
13.5 |
|
28,919 |
|
2,455 |
|
2,440 |
|
1,596 |
|
2,031 |
|
1,697 |
|
18,848 |
|
(147) |
Bank loans and from development organizations and multilateral lending institutions |
|
13.6 |
|
3,339 |
|
825 |
|
895 |
|
489 |
|
490 |
|
116 |
|
536 |
|
(13) |
Debt relating to financed assets |
|
13.3 |
|
411 |
|
124 |
|
108 |
|
91 |
|
70 |
|
17 |
|
— |
|
— |
Cash collateral received |
|
13.3 |
|
586 |
|
586 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
NEU commercial papers(2) |
|
13.3 |
|
1,247 |
|
1,254 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(7) |
Bank overdrafts |
|
13.3 |
|
234 |
|
234 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Other financial liabilities |
|
13.3 |
|
615 |
|
562 |
|
5 |
|
5 |
|
5 |
|
— |
|
38 |
|
— |
Derivatives (liabilities) |
|
13.3 |
|
245 |
|
1 |
|
27 |
|
12 |
|
— |
|
20 |
|
3 |
|
— |
Derivatives (assets) |
|
13.3 |
|
(923) |
|
(6) |
|
(80) |
|
(6) |
|
(6) |
|
(6) |
|
(652) |
|
— |
Other Comprehensive Income related to unmatured hedging instruments |
|
13.3 |
|
(110) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Gross financial debt after derivatives |
|
|
|
35,205 |
|
6,047 |
|
3,395 |
|
2,188 |
|
2,590 |
|
1,843 |
|
18,772 |
|
466 |
Trade payables |
|
|
|
11,597 |
|
9,989 |
|
193 |
|
149 |
|
188 |
|
590 |
|
488 |
|
— |
Total financial liabilities (including derivatives assets) |
|
|
|
46,803 |
|
16,035 |
(3) |
3,588 |
|
2,337 |
|
2,778 |
|
2,433 |
|
19,260 |
|
466 |
Future interests on financial liabilities(4) |
|
|
|
|
|
1,440 |
|
933 |
|
816 |
|
905 |
|
807 |
|
4,128 |
|
— |
(1) | Undated items: TDIRA notional. Non-cash items: amortized cost on bonds and bank loans, and discounting effect on long term trade payables. |
(2) | Negotiable European Commercial Paper (formerly called "commercial paper"). |
(3) | Amounts presented for 2024 correspond to notional and accrued interests not yet due (for 494 million euros). |
(4) | Mainly future interests on bonds for 8,150 million euros, on bank loans for 323 million euros and on derivatives instruments for (1,366) million euros. |
The liquidity position is one of the indicators of financial position used by the Group. This aggregate, not defined by IFRS, may not be comparable to similarly titled indicators used by other groups.
At December 31, 2023, the liquidity position of Orange’s telecom activities amounts to 14,302 million euros and exceeds the repayment obligations of its gross financial debt in 2024. It breaks down as follows:
Liquidity position
(in millions of euros)
At December 31, 2023, the Orange group’s telecom activities has access to credit facilities in the form of bilateral credit lines and syndicated credit lines. Most of these lines bear interest at variable rates. The available undrawn amount of the credit facilities is 6,120 million euros (including 6,000 million euros for Orange SA).
Cash equivalents amounted to 2,444 million euros, mainly at Orange SA, comprising 1,979 million euros of UCITS and 100 million euros of term deposits.
Investments at fair value amounted to 2,678 million euros, exclusively at Orange SA, comprising 2,485 million euros of NEU Commercial Paper and 166 million euros of bonds.
Any specific contingent commitments in terms of financial ratios are presented in Note 14.4.
Due to its cash level and other immediately disposable investments, the Group is not dependent on the sale of receivables organized in certain countries (see Note 4.3).
Consolidated Financial Statements 2023 |
F-111 |
Change in Orange’s credit rating
Orange’s credit rating is an additional overall performance indicator used to assess the Group’s financial policy and risk management policy and, in particular, its solvency and liquidity risk. It is not a substitute for an analysis carried out by investors. Rating agencies regularly review the ratings they award. Any change in the rating could affect the cost of future financing or access to liquidity.
In addition, a change in Orange’s credit rating will, for certain outstanding financing, affect the remuneration paid to investors:
– one Orange SA bond (see Note 13.5) with an outstanding amount of 2.5 billion US dollars maturing in 2031 (equivalent to 2.3 billion euros at December 31, 2023) is subject to a step-up clause in the event that Orange’s credit rating changes. This clause was triggered in 2013 and 2014: the coupon due in March 2014 was thus calculated on the basis of an interest rate of 8.75%. And since then, the bond has been bearing interest of 9%;
– the margin of the 6 billion euro syndicated credit facility signed on November 23, 2022 is subject to change depending on whether Orange’s credit rating is raised or lowered. At December 31, 2023, this credit facility was undrawn.
Orange’s rating did not change during 2023. For Moody’s Investors Service (Moody’s), the outlook included in the rating changed during 2023, from stable to positive.
|
|
Standard |
|
Moody’s |
|
Fitch |
|
|
& Poor’s |
|
|
|
Ratings |
Long-term debt |
|
BBB+ |
|
Baa1 |
|
BBB+ |
Outlook |
|
Stable |
|
Positive |
|
Stable |
Short-term debt |
|
A2 |
|
P2 |
|
F2 |
14.4 Financial ratios and commitments to sustainability targets
Main commitments with regard to financial ratios
Orange SA does not have any credit line or loan subject to specific covenant with regard to financial ratios.
Certain subsidiaries of Orange SA have pledged to comply with certain financial ratios related to indicators defined in the contracts with the banks. The breach of these ratios constitutes an event of default that can lead to early repayment of the line of credit or loan concerned.
The main commitments are as follows:
– Orange Egypt: in respect of bank financing agreements signed in 2018 and 2022, of which the total amount outstanding at December 31, 2023 is 3,050 million Egyptian pounds and 83 million US dollars (i.e. 164 million euros), Orange Egypt is required to comply with a “net senior debt to reported EBITDA” ratio;
– Médi Telecom: in respect of its bank financing agreements signed in 2022, of which the total amount outstanding at December 31, 2023 is 3,659 million Moroccan dirhams (i.e. 335 million euros), Médi Telecom is required to comply with ratios relating to its “net financial debt,” “net financial debt/EBITDA” and “net equity;”
– Orange Côte d’Ivoire: in respect of its bank financing agreements signed in 2016 and 2019, of which the total amount outstanding at December 31, 2023 is 70 billion CFA francs (i.e. 107 million euros), Orange Côte d’Ivoire is required to comply with a “net debt to reported EBITDA” ratio;
These ratios were complied with at December 31, 2023.
Main commitments to sustainability targets
Orange SA is committed to social and environmental responsibility. This commitment is expressed, among other things, by the introduction of financial liabilities that include a step-up clause to change the coupon rates if Orange fails to meet its sustainability target:
− | On November 23, 2022, Orange signed with 27 international banks a 6 billion euros multi-currency syndicated revolving credit facility indexed on environmental and social indicators, to refinance in advance its previous syndicated loan maturing in December 2023. This sustainable refinancing illustrates the Group’s environmental, social and governance (ESG) commitments, with an indexation of the margin to the achievement of objectives relating to CO2 emissions (scopes 1 & 2, scope 3), in line with Orange’s goal of being Net Zero Carbon by 2040, and to gender diversify its workforce. This new facility, initially maturing in November 2027, includes two options to extend for one more year each, exercisable by Orange and subject to the banks’ approval. In October 2023, Orange exercised the first option enabling the initial maturity to be extended with the agreement of the lenders as follows: 5,872 million euros maturing in November 2028 and 128 million euros retaining the initial maturity of November 2027. |
− | On September 11, 2023 Orange carried out its first sustainability-linked bond issue, for a total nominal amount of 500 million euros, maturing in 2035, with a coupon rate of 3.875%. The bonds are linked to the Group’s target of reducing its greenhouse gas emissions (Scope 1, 2 and 3) and its commitment to provide digital support and training to external beneficiaries. |
Default or material adverse change clauses
Most of Orange’s financing agreements, notably including the 6 billion euros syndicated credit facility set up on November 23, 2022, as well as bonds, are not subject to early redemption obligations in the event of a material adverse change or cross default provisions. However, most of these agreements include cross acceleration provisions. Thus, the mere occurrence of events of default in other financing agreements would not automatically trigger accelerated repayment under the aforementioned agreements.
14.5 Credit risk and counterparty risk management
The Group could be exposed to a concentration of counterparty risk in respect of its trade receivables, cash and cash equivalents, investments and derivatives.
Consolidated Financial Statements 2023 |
F-112 |
Orange considers that it has limited concentration in counterparty risk with respect to trade receivables due to its large and diverse customer base (residential, professional and large business customers) operating in numerous industries and located in many French regions and foreign countries. The maximum value of the counterparty risk on these financial assets is equal to their recognized net carrying value. An analysis of net trade receivables past due is provided in Note 4.3. Loans and other receivables mainly include elements for which the amount due but not provisioned is not material.
Orange SA is exposed to counterparty risk through its investments and derivatives. Therefore, it performs a strict selection of public, financial or industrial institutions in which it invests or with which it enters into derivative agreements. This selection takes particular note of the institutions' credit ratings. Therefore:
– for each non-banking counterparty selected for investments, limits are based on the ratings and maturities of the investments;
– for each bank counterparty selected for investments and for derivatives, limits are based on equity, rating, CDS (credit default swaps, an accurate indicator of potential default risk) as well as on periodic analyses carried out by the Treasury Department;
– theoretical limits and consumption limits are monitored and reported on a daily basis to the Group treasurer and the head of the trading room. These limits are adjusted regularly depending on credit events.
For derivatives, master agreements relating to financial instruments (French Banking Federation) are signed with all counterparties and provide for the netting of payables and receivables, in case of failure of one of the parties, as well as the calculation of a final balance to be received or paid. These agreements include a CSA (Credit Support Annex) cash collateral clause that can lead to either a deposit (collateral paid) or collection (collateral received), on a daily basis. These payment amounts correspond to the change in the market value of all derivatives.
As a rule, investments are negotiated with high-grade banks. Exceptionally, subsidiaries occasionally deal with counterparties with the highest ratings available locally.
Effect of mechanisms to offset exposure to credit risk and counterparty risk of derivatives
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2021 |
Collateralised Derivatives (net) (a) |
|
647 |
|
1,014 |
|
408 |
Fair value of collateralised derivatives assets |
|
867 |
|
1,374 |
|
690 |
Fair value of collateralised derivatives liabilities |
|
(220) |
|
(360) |
|
(282) |
Amount of cash collateral paid/(received) (b) |
|
(565) |
|
(1,034) |
|
(362) |
Amount of cash collateral paid |
|
21 |
|
38 |
|
27 |
Amount of cash collateral received |
|
(586) |
|
(1,072) |
|
(389) |
Residual exposure to counterparty risk (a) + (b) (1) |
|
82 |
|
(20) |
|
46 |
Non collateralised Derivatives (net) |
|
31 |
|
55 |
|
(3) |
Fair value of non collateralised derivatives assets |
|
56 |
|
81 |
|
— |
Fair value of non collateralised derivatives liabilities |
|
(25) |
|
(26) |
|
(3) |
(1) | The residual exposure to counterparty risk is mainly due to a time difference between the valuation of derivatives at the closing date and the date on which the cash collateral exchanges were made. |
The change in net cash collateral deposits between 2022 and 2023 is mainly due to the depreciation of the US dollar and the interest rate effect of derivatives hedging bonds denominated in US dollar. The change in net cash collateral received between 2021 and 2022 was mainly due to the appreciation of the US dollar and the depreciation of the pound sterling against the euro.
Sensitivity analysis of cash collateral to changes in market interest rates and exchange rates
A change in market interest rates (mainly euros) of +/-1% would affect the fair value of derivatives hedging interest rate risk as follows:
(in millions of euros) |
|
Rate decrease of 1% |
|
Rate increase of 1% |
Change of fair value of derivatives |
|
(717) |
|
714 |
|
|
Rate decrease of 1% |
|
Rate increase of 1% |
Amount of cash collateral paid (received) |
|
717 |
|
(714) |
A 10% increase or decrease in the euro exchange rate would affect the fair value of derivatives hedging foreign exchange risk as follows:
(in millions of euros) |
|
10% loss in euro |
|
10% gain in euro |
Change of fair value of derivatives |
|
1,285 |
|
(1,051) |
|
|
10% loss in euro |
|
10% gain in euro |
Amount of cash collateral received (paid) |
|
(1,285) |
|
1,051 |
14.6Commodity risk management (energy contracts)
The majority of the Group’s electricity needs are met through fixed-price or indexed forward purchase contracts, depending on the situation. In accordance with IFRS 9, contracts concluded on non-financial assets (electricity) to meet the normal business needs of the company and used solely for its business, rather than for speculation or arbitrage on energy price fluctuations, are not considered as derivatives (application of the "own-use" exemption in IFRS 9). The Group’s commitments under those contracts are presented as off-balance sheet commitments in Note 16.1.
To meet its commitments in terms of Net Zero Carbon by 2040, the Group enters into Power Purchase Agreements (PPA) for electricity generated by renewable sources. These contracts may be physical (with physical delivery of electricity and therefore not leading to the recognition of derivative instruments), or virtual. Energy supply is achieved through a portfolio of contracts mixing PPA, Solar/Energy As A Service, power purchase contracts with different terms (market), and supply contracts (aggregation and distribution).
The Group is considering Virtual Power Purchase Agreements (VPPAs). These contracts result in the recognition of derivatives at fair value through profit or loss since there is no physical delivery of electricity. At December 31, 2023, the Group has only Virtual Power Purchase Agreements in Poland and Romania. These contracts are classified as cash flow hedges, the ineffective portion of which has a direct impact on the income statement. Fluctuations in the fair value of the effective portion of the hedge are recognized in other comprehensive income (see Note 13.8.2).
Consolidated Financial Statements 2023 |
F-113 |
The table below sets out the Group’s main energy supply agreements at December 31, 2023.
|
|
|
|
Overall |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
contract |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy |
|
volume |
|
Signature |
|
Value |
|
|
|
|
|
|
|
|
|
|
Source |
|
(in GWh) |
|
date |
|
Date |
|
Maturity |
|
Duration |
|
Nature |
|
Accounting Model |
France |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boralex |
|
Wind power |
|
67 |
|
2021 |
|
2021 |
|
2025 |
|
5 years |
|
Physical PPA |
|
Own Use exemption |
Engie |
|
Solar power |
|
76 |
|
2023 |
|
2025 |
|
2040 |
|
15 years |
|
Physical PPA |
|
Own Use exemption |
Total Energie |
|
Solar power |
|
100 |
|
2023 |
|
2025 |
|
2045 |
|
20 years |
|
Physical PPA |
|
Own Use exemption |
Engie |
|
Solar power |
|
102 |
|
2023 |
|
2025 |
|
2045 |
|
20 years |
|
Physical PPA |
|
Own Use exemption |
Poland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enertrag-Dunowo Sp. |
|
Wind power |
|
1,274 |
|
2021 |
|
2024 |
|
2035 |
|
12 years |
|
Virtual PPA |
|
Cash Flow Hedge |
EDF |
|
Wind power |
|
1,686 |
|
2022 |
|
2023 |
|
2030 |
|
8 years |
|
Physical PPA |
|
Own Use exemption |
RPower |
|
Solar power |
|
585 |
|
2023 |
|
2024 |
|
2034 |
|
10.5 years |
|
Physical PPA |
|
Own Use exemption |
WPD |
|
Wind power |
|
480 |
|
2020 |
|
2021 |
|
2031 |
|
10 years |
|
Physical PPA |
|
Own Use exemption |
Romania |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engie Romania |
|
Solar power |
|
145 |
|
2023 |
|
2025 |
|
2029 |
|
4.5 years |
|
Virtual PPA |
|
Cash Flow Hedge |
Enery Group |
|
Solar power |
|
400 |
|
2023 |
|
2025 |
|
2032 |
|
8 years |
|
Virtual PPA |
|
Cash Flow Hedge |
The volumes hedged by renewable electricity supply contracts represent a proportion of around 10% of the Group’s annual consumption in 2023 (5,700 GWh in 2023, 5,594 GWh in 2022 and 5,154 GWh in 2021).
14.7 Equity market risk
Orange SA has no call options on its own shares and no commitments for forward purchases of shares. At December 31, 2023, it held 2,429,143 treasury shares. Orange SA owns subsidiaries listed on equity markets whose share value may be affected by general trends in these markets. In particular, the market value of these listed subsidiaries’ shares is one of the measurement variables used in impairment testing.
The UCITS in which Orange invests for cash management purposes do not hold equities.
The Orange group is also exposed to equity risk through some of its retirement plan assets (see Note 6.2).
At December 31, 2023, the Group is not materially exposed to market risk on the shares of listed companies.
14.8 Capital management
Orange SA and its non-financial subsidiaries are not subject to regulatory requirements related to equity (other than the usual standards applicable to any commercial company).
Its financial subsidiaries (like electronic money institutions) are subject to regulatory equity requirements specific to their sector and jurisdiction.
Like any company, Orange manages its financial resources (both equity and net financial debt) as part of a balanced financial policy, aiming to ensure flexible access to capital markets, including for the purpose of selectively investing in development projects, and to provide a return to shareholders.
In terms of net financial debt (see Note 13.3), this policy translates into liquidity management as described in Note 14.3 and a specific attention to credit ratings assigned by rating agencies.
This policy is also reflected, in some markets, by the presence of minority shareholders in the capital of subsidiaries controlled by Orange. This serves to limit the Group’s debt while providing a benefit from the presence of local shareholders.
Consolidated Financial Statements 2023 |
F-114 |
14.9 Fair value of financial assets and liabilities
The market value of the net financial debt carried by Orange is estimated at 26.3 billion euros at December 31, 2023, for a book value of 27.0 billion euros.
(in millions of euros) |
|
|
|
|
|
December 31, 2023 |
||||||||
|
|
Note |
|
Classification |
|
Book |
|
Estimated |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
|
|
under IFRS 9 (1) |
|
value |
|
fair |
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
value |
|
cash |
|
|
|
|
Trade receivables |
|
|
|
AC |
|
6,046 |
|
6,046 |
|
— |
|
6,046 |
|
— |
Financial assets |
|
13.7 |
|
|
|
3,777 |
|
3,777 |
|
99 |
|
3,286 |
|
392 |
Equity securities |
|
|
|
FVOCI |
|
490 |
|
491 |
|
99 |
|
— |
|
392 |
Equity securities |
|
|
|
FVR |
|
173 |
|
173 |
|
— |
|
173 |
|
— |
Investments at fair value |
|
|
|
FVR |
|
2,678 |
|
2,678 |
|
— |
|
2,678 |
|
— |
Cash collateral paid |
|
|
|
FVR |
|
21 |
|
21 |
|
— |
|
21 |
|
— |
Financial assets at amortized cost |
|
|
|
AC |
|
415 |
|
415 |
|
— |
|
415 |
|
— |
Cash and Cash equivalents |
|
13.3 |
|
|
|
5,504 |
|
5,504 |
|
5,504 |
|
— |
|
— |
Cash |
|
|
|
AC |
|
3,060 |
|
3,060 |
|
3,060 |
|
— |
|
— |
Cash equivalents |
|
|
|
FVR |
|
2,444 |
|
2,444 |
|
2,444 |
|
— |
|
— |
Trade payables |
|
|
|
AC |
|
(11,596) |
|
(11,596) |
|
— |
|
(11,596) |
|
— |
Financial liabilities |
|
13.3 |
|
|
|
(35,993) |
|
(35,241) |
|
(28,080) |
|
(6,870) |
|
(291) |
Financial debts |
|
|
|
AC |
|
(35,702) |
|
(34,950) |
|
(28,080) |
|
(6,870) |
|
— |
Other |
|
|
|
FVR |
|
(291) |
|
(291) |
|
— |
|
— |
|
(291) |
Derivatives (net amount) (2) |
|
13.8 |
|
|
|
678 |
|
678 |
|
— |
|
678 |
|
— |
(1) | "AC" stands for "amortized cost", "FVR" stands for "fair value through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be reclassified to profit or loss." |
(2) | The classification for derivatives depends on their hedging qualification. |
The table below provides an analysis of the change in level 3 market values for financial assets and liabilities measured at fair value in the statement of financial position.
(in millions of euros) |
|
Equity securities |
|
Financial |
|
|
|
|
|
liabilities at fair |
|
|
|
|
|
value through |
|
|
|
|
|
profit or loss, excluding |
|
|
|
|
|
derivatives |
|
Level 3 fair values at December 31, 2022 |
|
355 |
|
(8) |
|
Gains (losses) taken to profit or loss |
|
— |
|
(5) |
|
Gains (losses) taken to other comprehensive income |
|
(4) |
|
— |
|
Acquisition (sale) of securities |
|
37 |
|
— |
|
Other |
|
4 |
|
(279) |
|
Level 3 fair values at December 31, 2023 |
|
392 |
|
(291) |
|
The market value of the net financial debt carried by Orange was estimated at 23.8 billion euros at December 31, 2022, for a book value of 25.3 billion euros.
(in millions of euros) |
|
|
|
|
|
December 31, 2022 |
||||||||
|
|
Note |
|
Classification |
|
Book |
|
Estimated |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
|
|
under IFRS 9 |
|
value |
|
fair value |
|
and cash |
|
|
|
|
Trade receivables |
|
|
|
AC |
|
6,237 |
|
6,237 |
|
— |
|
6,237 |
|
— |
Financial assets |
|
13.7 |
|
|
|
5,545 |
|
5,545 |
|
65 |
|
5,124 |
|
355 |
Equity securities |
|
|
|
FVOCI |
|
421 |
|
421 |
|
65 |
|
— |
|
355 |
Equity securities |
|
|
|
FVR |
|
205 |
|
205 |
|
— |
|
205 |
|
— |
Investments at fair value |
|
|
|
FVR |
|
4,500 |
|
4,500 |
|
— |
|
4,500 |
|
— |
Cash collateral paid |
|
|
|
FVR |
|
38 |
|
38 |
|
— |
|
38 |
|
— |
Financial assets at amortized cost |
|
|
|
AC |
|
381 |
|
381 |
|
— |
|
381 |
|
— |
Cash and Cash equivalents |
|
13.3 |
|
|
|
5,846 |
|
5,846 |
|
5,846 |
|
— |
|
— |
Cash |
|
|
|
AC |
|
2,668 |
|
2,668 |
|
2,668 |
|
— |
|
— |
Cash equivalents |
|
|
|
FVR |
|
3,178 |
|
3,178 |
|
3,178 |
|
— |
|
— |
Trade payables |
|
|
|
AC |
|
(11,551) |
|
(11,551) |
|
— |
|
(11,551) |
|
— |
Financial liabilities |
|
13.3 |
|
|
|
(36,638) |
|
(35,121) |
|
(27,681) |
|
(7,432) |
|
(8) |
Financial debts |
|
|
|
AC |
|
(36,630) |
|
(35,113) |
|
(27,681) |
|
(7,432) |
|
— |
Other |
|
|
|
FVR |
|
(8) |
|
(8) |
|
— |
|
— |
|
(8) |
Derivatives (net amount) |
|
13.8 |
|
|
|
1,069 |
|
1,069 |
|
— |
|
1,069 |
|
— |
Consolidated Financial Statements 2023 |
F-115 |
The market value of the net financial debt carried by Orange was estimated at 31.5 billion euros at December 31, 2021, for a book value of 24.3 billion euros.
|
|
|
|
|
|
December 31, 2021 |
||||||||
(in millions of euros) |
|
Note |
|
Classification |
|
Book |
|
Estimated |
|
Level 1 |
|
|
|
|
|
|
|
|
under IFRS 9 |
|
value |
|
fair value |
|
and cash |
|
Level 2 |
|
Level 3 |
Trade receivables |
|
|
|
AC |
|
6,040 |
|
6,040 |
|
— |
|
6,040 |
|
— |
Financial assets |
|
13.7 |
|
|
|
3,291 |
|
3,291 |
|
55 |
|
2,859 |
|
377 |
Equity securities |
|
|
|
FVOCI |
|
432 |
|
432 |
|
55 |
|
— |
|
377 |
Equity securities |
|
|
|
FVR |
|
203 |
|
203 |
|
— |
|
203 |
|
— |
Investments at fair value |
|
|
|
FVR |
|
2,266 |
|
2,266 |
|
— |
|
2,266 |
|
— |
Cash collateral paid |
|
|
|
FVR |
|
27 |
|
27 |
|
— |
|
27 |
|
— |
Financial assets at amortized cost |
|
|
|
AC |
|
363 |
|
363 |
|
— |
|
363 |
|
— |
Cash and Cash equivalents |
|
13.3 |
|
|
|
8,188 |
|
8,188 |
|
8,188 |
|
— |
|
— |
Cash |
|
|
|
AC |
|
2,709 |
|
2,709 |
|
2,709 |
|
— |
|
— |
Cash equivalents |
|
|
|
FVR |
|
5,479 |
|
5,479 |
|
5,479 |
|
— |
|
— |
Trade payables |
|
|
|
AC |
|
(11,163) |
|
(11,163) |
|
— |
|
(11,163) |
|
— |
Financial liabilities |
|
13.3 |
|
|
|
(35,348) |
|
(42,534) |
|
(33,058) |
|
(9,466) |
|
(9) |
Financial debts |
|
|
|
AC |
|
(35,339) |
|
(42,524) |
|
(33,058) |
|
(9,466) |
|
— |
Other |
|
|
|
FVR |
|
(9) |
|
(9) |
|
— |
|
— |
|
(9) |
Derivatives (net amount) |
|
13.8 |
|
|
|
405 |
|
405 |
|
— |
|
405 |
|
— |
Accounting policies
The fair values of financial assets and liabilities in the statement of financial position have been classified based on three hierarchy levels:
– level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
– level 2: inputs that are observable for the asset or liability, either directly or indirectly;
– level 3: unobservable inputs for the asset or liability.
The fair value of the financial assets at fair value through other comprehensive income ("FVOCI" and "FVOCIR") is the quoted price at year-end for listed securities and, for non-listed securities, uses a valuation technique determined according to the most appropriate financial criteria in each case (comparable transactions, multiples for comparable companies, shareholders’ agreement, discounted future cash flows).
For financial assets at amortized cost ("AC"), the Group considers that the carrying value of cash, trade receivables and various deposits provides a reasonable approximation of fair value, due to the high liquidity of these items.
Consolidated Financial Statements 2023 |
F-116 |
Among financial assets at fair value through profit or loss ("FVR"), with respect to very short-term investments such as deposits, deposit certificates, commercial paper or negotiable debt securities, the Group considers that the par value of the investment and any related accrued interest represent a reasonable approximation of fair value.
The fair value of UCITS is the latest net asset value.
The fair value of equity securities is the quoted price at year-end for listed securities and, for non-listed securities, uses a valuation technique determined according to the most appropriate financial criteria in each case (comparable transactions, multiples for comparable companies, shareholders’ agreement, discounted future cash flows).
For financial liabilities at amortized cost (“AC”) the fair value of financial liabilities is determined using:
– the quoted price for listed instruments (a detailed analysis is performed in the case of a material decrease in liquidity to evidence whether the observed price corresponds to the fair value; otherwise the quoted price is adjusted);
– the present value of estimated future cash flows, discounted using rates observed by the Group at the end of the period for other instruments. The results calculated using the internal valuation model are systematically benchmarked with the values provided by Bloomberg.
The Group considers the carrying value of trade payables and deposits received from customers to be a reasonable approximation of fair value, due to the high liquidity of these items.
The fair value of long-term trade payables is the value of future cash flows discounted at the interest rates observed by the Group at the end of the period.
Financial liabilities at fair value through profit or loss (“FVR”) mainly concern firm or contingent commitments to purchase non-controlling interests. Their fair value is measured in accordance with the provisions of the contractual agreements. When the commitment is based on a fixed price, a discounted value is retained.
The fair value of derivatives, mostly traded over the counter, is determined using the present value of estimated future cash flows, discounted using the interest rates observed by the Group at the end of the period. The results calculated using the internal valuation model are consistently benchmarked with the values provided by bank counterparties and Bloomberg.
When there are no reliable market data which identify the probability of default, the CVA (credit value adjustment) and the DVA (debit value adjustment) are measured based on historical default charts and CDS (credit default swap) trends. Counterparty credit risk and the Group’s own specific default risk are also continuously monitored based on the monitoring of debt security credit spreads on the secondary market and other market information. Given the implementation of collateralization, and based on counterparty policies and the management of the indebtedness and liquidity risk described in Note 14, CVA and DVA estimates are not material compared with the measurement of the related financial instruments.
Note 15 Equity
At December 31, 2023, Orange SA’s share capital, based on the number of issued shares at this date, amounted to 10,640,226,396 euros, divided into 2,660,056,599 ordinary shares with a par value of 4 euros each.
At December 31, 2023, the share capital and voting rights of Orange SA broke down as follows:
15.1 Changes in share capital
No new shares were issued during the 2023 fiscal year.
Consolidated Financial Statements 2023 |
F-117 |
15.2 Treasury shares
As authorized by the Shareholders' Meeting of May 23, 2023, the Board of Directors instituted a new Share Buyback Program (the 2023 Buyback Program) and canceled the 2022 Buyback Program, with immediate effect. This authorization is granted for a period of 18 months from the aforementioned Shareholders' Meeting. The 2023 Buyback Program is described in the Orange Universal Registration Document (URD) filed with the French Financial Markets Authority (Autorité des marchés financiers – AMF) on March 29, 2023.
(in number of shares) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2021 |
Free share award plans(1) |
|
1,664,145 |
|
1,285,171 |
|
2,009,500 |
Liquidity contract |
|
764,998 |
|
680,000 |
|
— |
Total treasury shares |
|
2,429,143 |
|
1,965,171 |
|
2,009,500 |
(1) | During the fiscal year 2021, Orange bought back and delivered treasury shares to the beneficiaries of the Together 2021 Employee Shareholding Plan. At the same time, Orange repurchased shares mainly under the Long-Term Incentive Plans (LTIP) (see Note 6.3). |
Accounting policies
Treasury shares are recorded as a deduction from equity, at acquisition cost. Gains and losses arising from the sale of treasury shares are recognized in consolidated reserves, net of tax.
15.3 Dividends
Full Year |
|
Approved by |
|
Description |
|
Dividend |
|
Payout date |
|
Payment |
|
Total |
|
|
|
|
|
|
per share |
|
|
|
method |
|
(in millions |
|
|
|
|
|
|
(in euro) |
|
|
|
|
|
of euros) |
2023 |
|
Board of Directors Meeting on July 25, 2023 |
|
2023 interim dividend |
|
0.30 |
|
December 6, 2023 |
|
Cash |
|
798 |
|
|
Shareholders' Meeting on May 23, 2023 |
|
Balance for 2022 |
|
0.40 |
|
June 7, 2023 |
|
Cash |
|
1,064 |
Total dividends paid in 2023 |
|
1,862 |
||||||||||
2022 |
|
Board of Directors Meeting on July 27, 2022 |
|
2022 interim dividend |
|
0.30 |
|
December 7, 2022 |
|
Cash |
|
797 |
|
|
Shareholders' Meeting on May 19, 2022 |
|
Balance for 2021 |
|
0.40 |
|
June 9, 2022 |
|
Cash |
|
1,063 |
Total dividends paid in 2022 |
|
1,861 |
||||||||||
2021 |
|
Board of Directors Meeting on July 28, 2021 |
|
2021 interim dividend |
|
0.30 |
|
December 15, 2021 |
|
Cash |
|
797 |
|
|
Shareholders' Meeting on May 18, 2021 |
|
Balance for 2020 |
|
0.50 |
|
June 17, 2021 |
|
Cash |
|
1,330 |
Total dividends paid in 2021 |
|
2,127 |
||||||||||
2020 |
|
Board of Directors Meeting on October 28, 2020 |
|
2020 interim dividend |
|
0.40 |
|
December 9, 2020 |
|
Cash |
|
1,064 |
|
|
Shareholders' Meeting on May 19, 2020 |
|
Balance for 2019 |
|
0.20 |
|
June 4, 2020 |
|
Cash |
|
532 |
Total dividends paid in 2020 |
|
1,595 |
The amount available to provide a return to shareholders in the form of dividends is calculated on the basis of the total net income and retained earnings, under French GAAP, of the entity Orange SA, the Group’s parent company.
Consolidated Financial Statements 2023 |
F-118 |
15.4 Subordinated notes
Nominal value of subordinated notes
Issues and repurchases of subordinated notes are presented below:
Initial issue date |
|
Initial |
|
Initial |
|
Initial |
|
Rate |
|
December |
|
Issue |
|
December |
|
Issue |
|
December |
|
Residual |
|
|
nominal |
|
nominal |
|
currency |
|
|
|
31, 2021 |
|
Redemption |
|
31, 2022 |
|
Redemp |
|
31, 2023 |
|
nominal |
|
|
value |
|
value |
|
|
|
|
|
(in millions |
|
tion |
|
(in millions |
|
tion |
|
(in millions |
|
value |
|
|
(in millions |
|
(in millions |
|
|
|
|
|
of euros) |
|
|
|
of euros) |
|
|
|
of euros) |
|
(in millions |
|
|
of currency) |
|
of euros) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of euros) |
2/7/2014 |
|
1,000 |
|
1,000 |
|
EUR |
|
5.25 |
% |
1,000 |
|
— |
|
1,000 |
|
(1,000) |
|
— |
|
— |
10/1/2014 |
|
1,250 |
|
1,250 |
|
EUR |
|
5.00 |
% |
1,250 |
|
— |
|
1,250 |
|
— |
|
1,250 |
|
1,250 |
10/1/2014 |
|
600 |
|
771 |
|
GBP |
|
5.75 |
% |
547 |
|
(547) |
|
— |
|
— |
|
— |
|
— |
4/15/2019 |
|
1,000 |
|
1,000 |
|
EUR |
|
2.38 |
% |
1,000 |
|
— |
|
1,000 |
|
— |
|
1,000 |
|
1,000 |
9/19/2019 |
|
500 |
|
500 |
|
EUR |
|
1.75 |
% |
500 |
|
— |
|
500 |
|
— |
|
500 |
|
500 |
10/15/2020 |
|
700 |
|
700 |
|
EUR |
|
1.75 |
% |
700 |
|
— |
|
700 |
|
— |
|
700 |
|
700 |
5/11/2021 |
|
500 |
|
500 |
|
EUR |
|
1.38 |
% |
500 |
|
— |
|
500 |
|
— |
|
500 |
|
500 |
4/18/2023 |
|
1,000 |
|
1,000 |
|
EUR |
|
5.38 |
% |
— |
|
— |
|
— |
|
1,000 |
|
1,000 |
|
1,000 |
Issues and purchases of subordinated notes |
|
5,497 |
|
(547) |
|
4,950 |
|
— |
|
4,950 |
|
|
All notes, listed on Euronext Paris, are deeply subordinated notes (senior compared to ordinary shares) i.e. : the holders will only be remunerated (whether for the nominal, interest or any other amount) after all other creditors, including holders of participating loans and securities, simply subordinated or not, representing a claim on Orange.
At each interest payment date, remuneration may be either paid or deferred, at the option of the issuer. Deferred coupons are capitalized and become due and payable in full under certain circumstances defined contractually and under the control of Orange.
Gains (losses) on disposal, premiums and issuance costs related to issues/repurchases of subordinated notes are presented under “reserves” in equity.
The Group understands that some rating agencies assign an “equity” component from 0 to 50% to capital instruments.
Issues and purchases of subordinated notes
– On February 7, 2014, as part of its EMTN (Euro Medium Term Notes) program, Orange issued the equivalent of 2.8 billion euros of deeply subordinated notes, in euros and in pounds sterling, in three tranches:
- | 1 billion euros with a fixed annual coupon of 4.25% (tranche repurchased in 2019); |
- | 1 billion euros with a fixed annual coupon of 5.25%; and |
- | 650 million pounds sterling (782 million euros at the ECB fixing price on the issue date), with a fixed annual coupon of 5.875% (tranche repurchased in 2020 and 2021). |
A revision of interest rates based on market conditions was provided for contractually on each call option exercise date. Orange had a call option on each of these tranches respectively from February 7, 2020, February 7, 2024, and February 7, 2022 and upon the occurrence of certain contractually defined events.
Step-up clauses provide for coupon adjustments of 0.25% in 2025 and an additional 0.75% in 2040 for the first tranche, 0.25% in 2024 and an additional 0.75% in 2044 for the second tranche, and 0.25% in 2027 and an additional 0.75% in 2042 for the third tranche.
This issuance was the subject of a prospectus approved by the AMF (visa no. 14-036).
On April 5, 2023, Orange launched an offer to repurchase the entire existing second and final tranche. On April 18, 2023, following this offer, the Group was able to repurchase 802 million euros of these subordinated notes. The nominal amount remaining in circulation after this repurchase amounts to 198 million euros. On December 13, 2023, Orange announced its intention to exercise its option on February 7, 2024 to repurchase the remaining outstanding amount of 198 million euros. As a result, the remaining outstanding amount was reclassified to current financial liabilities at December 31, 2023.
– | On October 1, 2014, as part of its EMTN program, Orange issued the equivalent of 3 billion euros of deeply subordinated notes, in euros and pounds sterling, in three tranches: |
- | 1 billion euros with a fixed annual coupon of 4% (entire tranche repurchased in 2019 and 2021); |
- | 1.25 billion euros with a fixed annual coupon of 5%; and |
- | 600 million pounds sterling (771 million euros at the ECB fixing price on the issue date), with a fixed annual coupon of 5.75%. |
A revision of interest rates based on market conditions is provided for contractually on each call option exercise date. Orange has a call option on each of these tranches respectively from October 1, 2021, October 1, 2026, and April 1, 2023 and upon the occurrence of certain contractually defined events.
Step-up clauses provide for coupon adjustments of 0.25% in 2026 and an additional 0.75% in 2041 for the first tranche, 0.25% in 2026 and an additional 0.75% in 2046 for the second tranche, and 0.25% in 2028 and an additional 0.75% in 2043 for the third tranche.
This issuance was the subject of a prospectus approved by the AMF (visa no. 14-525).
Successive repurchases were carried out on the third and last tranche in 2020 and 2021.
Consolidated Financial Statements 2023 |
F-119 |
On November 21, 2022, Orange launched a final repurchase offer on this tranche, for the remaining 426 million pounds sterling (historical cost of 547 million euros). On November 30, 2022, following this offer, the Group repurchased 387 million pounds sterling of these subordinated notes (historical value of 496 million euros). The nominal amount remaining after this purchase, i.e. 39 million pounds sterling (historical value of 50 million euros), represented less than 10% of the initial nominal amount. In accordance with the agreement, this allowed Orange to announce on December 1, 2022 its intention to exercise its early redemption option on the remaining amount outstanding on January 17, 2023. Accordingly, the remaining amount outstanding of these subordinated notes in pounds sterling was reclassified to current financial liabilities at December 31, 2022 (the repurchase having taken place on January 17, 2023).
– | On April 15, 2019, as part of its EMTN program, Orange issued the equivalent of 1 billion euros of deeply subordinated notes. |
A revision of interest rates based on market conditions is provided for contractually on each call option exercise date. Orange has a call option on this tranche from April 15, 2025 (first date for the revision of the rates of the tranche in question) and upon the occurrence of certain contractually defined events.
Step-up clauses provide for a coupon adjustment of 0.25% in 2030 and an additional 0.75% in 2045.
This issuance was the subject of a prospectus approved by the AMF (visa no. 19-152).
– | On September 19, 2019, as part of its EMTN program, Orange issued the equivalent of 500 million euros of deeply subordinated notes. |
A revision of interest rates based on market conditions is provided for contractually on each call option exercise date. Orange has a call option on this tranche from March 19, 2027 (first date for the revision of the rates of the tranche in question) and upon the occurrence of certain contractually defined events.
Step-up clauses provide for a coupon adjustment of 0.25% in 2032 and an additional 0.75% in 2047.
This issuance was the subject of a prospectus approved by the AMF (visa no. 19-442).
– | On October 15, 2020, as part of its EMTN program, Orange issued the equivalent of 700 million euros of deeply subordinated notes. |
A revision of interest rates based on market conditions is provided for contractually from October 15, 2028. Orange has a call option on this tranche from July 15, 2028 (first date for the revision of the rates of the tranche in question) and upon the occurrence of certain contractually defined events.
Step-up clauses provide for a coupon adjustment of 0.25% in 2033 and an additional 0.75% in 2048.
This issuance of subordinated notes was the subject of a prospectus approved by the AMF (visa no. 20-509).
– | On May 11, 2021, as part of its EMTN program, Orange issued the equivalent of 500 million euros of deeply subordinated notes with a coupon of 1.375% until the first adjustment date. |
A revision of interest rates based on market conditions is provided for contractually from May 11, 2029.
Step-up clauses provide for a coupon adjustment of 0.25% in 2034 and an additional 1.00% in 2049.
Orange has a call option on this tranche from May 11, 2029 (first date for the revision of the rates of the tranche in question) and upon the occurrence of certain contractually defined events.
This issuance of subordinated notes was the subject of a prospectus approved by the AMF on May 7, 2021 (visa no. 21-141).
– | On April 18, 2023, as part of its EMTN program, Orange issued 1 billion euros of subordinated notes with an annual fixed coupon of 5.375%. |
A revision of interest rates based on market conditions is provided for contractually from 2030.
Orange has a call option on this tranche from January 18, 2030 and upon the occurrence of certain contractually defined events.
Step-up clauses provide for a coupon adjustment of 0.25% from 2035 and an additional 0.75% from 2050.
This issuance of subordinated notes was the subject of a prospectus approved by the AMF (visa no. 23-094).
The amount presented in the “subordinated notes” column of the consolidated statements of changes in shareholders’ equity of 4,950 million euros corresponds to the nominal amount recorded at historical value (the bonds denominated in pounds sterling have been fully repaid in early 2023).
Subordinated notes remuneration
The remuneration of holders is recorded in equity five working days before the annual payment date, unless Orange exercises its right to defer the payment.
The tax impact relating to the remuneration of subordinated notes is recorded through profit or loss in the period.
Since their issuance, Orange has not exercised its right to defer the coupon payments related to subordinated notes.
Consolidated Financial Statements 2023 |
F-120 |
The remuneration of subordinated notes is as follows:
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
2021 |
||||||
|
|
Initial nominal value |
|
Initial nominal value |
|
Initial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial issue date |
|
(in millions of currency) |
|
(in millions of euros) |
|
currency |
|
Rate |
|
(in millions of currency) |
|
(in millions of euros) |
|
(in millions of currency) |
|
(in millions of euros) |
|
(in millions of currency) |
|
(in millions of euros) |
2/7/2014 |
|
1,000 |
|
1,000 |
|
EUR |
|
5.25 |
% |
(71) |
|
(71) |
|
(53) |
|
(53) |
|
(53) |
|
(53) |
2/7/2014 |
|
650 |
|
782 |
|
GBP |
|
5.88 |
% |
— |
|
— |
|
— |
|
— |
|
(32) |
|
(36) |
10/1/2014 |
|
1,000 |
|
1,000 |
|
EUR |
|
4.00 |
% |
— |
|
— |
|
— |
|
— |
|
(3) |
|
(3) |
10/1/2014 |
|
1,250 |
|
1,250 |
|
EUR |
|
5.00 |
% |
(63) |
|
(63) |
|
(63) |
|
(63) |
|
(63) |
|
(63) |
10/1/2014 |
|
600 |
|
771 |
|
GBP |
|
5.75 |
% |
— |
|
- |
|
(41) |
|
(49) |
|
(33) |
|
(38) |
4/15/2019 |
|
1,000 |
|
1,000 |
|
EUR |
|
2.38 |
% |
(24) |
|
(24) |
|
(24) |
|
(24) |
|
(24) |
|
(24) |
9/19/2019 |
|
500 |
|
500 |
|
EUR |
|
1.75 |
% |
(9) |
|
(9) |
|
(9) |
|
(9) |
|
(9) |
|
(9) |
10/15/2020 |
|
700 |
|
700 |
|
EUR |
|
1.75 |
% |
(12) |
|
(12) |
|
(12) |
|
(12) |
|
(12) |
|
(12) |
5/11/2021 |
|
500 |
|
500 |
|
EUR |
|
1.38 |
% |
(7) |
|
(7) |
|
(7) |
|
(7) |
|
— |
|
— |
4/18/2023 |
|
1,000 |
|
1,000 |
|
EUR |
|
5.38 |
% |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
Subordinated notes remuneration classified in equity |
|
|
|
(185) |
|
|
|
(215) |
|
|
|
(238) |
||||||||
Coupons on subordinated notes reclassified as short-term borrowings |
|
|
|
8 |
|
|
|
2 |
|
|
|
— |
||||||||
Subordinated notes remuneration paid |
|
|
|
(177) |
|
|
|
(213) |
|
|
|
(238) |
The tax effects from the conversion of subordinated notes whose par value is denominated in pounds sterling, and from the gains and losses on disposal, premiums and issuance costs on subordinated notes that have been refinanced, are presented under “other movements” in the consolidated statement of changes in shareholders’ equity and amounted to 6 million euros in 2023, (2) million euros in 2022 and 29 million euros in 2021.
Accounting policies
Subordinated notes
The Group issued subordinated notes in several tranches.
These instruments have no maturity and the coupon settlement may be deferred at the option of the issuer. They are booked in equity.
As equity instruments are recognized at historical value, the tranche denominated in foreign currency is never remeasured. Where appropriate, a translation adjustment impact is booked in equity when a call option is exercised.
The remuneration of holders is recorded directly in equity at the time of the decision to pay the coupons.
The tax impact related to the remuneration is accounted for through profit or loss, and that related to the remeasurement of the foreign currency portion is accounted for in equity.
Consolidated Financial Statements 2023 |
F-121 |
Equity component of perpetual bonds redeemable for shares (TDIRAs) (see Note 13.4)
The equity component is determined as the difference between the fair value of the instrument taken as a whole and the fair value of the debt component. The equity component thus determined and recognized at inception is not subsequently re-measured and remains in equity, even when the instrument is extinguished.
15.5 Translation adjustments
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Gain (loss) recognized in other comprehensive income during the period |
|
(29) |
|
(370) |
|
196 |
Reclassification to net income for the period |
|
1 |
|
(4) |
|
4 |
Total translation adjustments in the consolidated statement of comprehensive income |
|
(28) |
|
(374) |
|
200 |
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
Polish zloty |
|
799 |
|
603 |
|
645 |
Egyptian pound(1) |
|
(872) |
|
(730) |
|
(444) |
Slovak Koruna |
|
220 |
|
220 |
|
220 |
Leone |
|
(244) |
|
(217) |
|
(150) |
Other |
|
(190) |
|
(134) |
|
(155) |
Total translation adjustments |
|
(286) |
|
(258) |
|
116 |
o/w share attributable to the owners of the parent company |
|
(526) |
|
(455) |
|
(96) |
o/w share attributable to non-controlling interests |
|
240 |
|
198 |
|
211 |
(1) | Includes the effects of the devaluation of the Egyptian pound in the 2022 and 2023 fiscal years. |
Accounting policies
The functional currency of foreign operations located outside the euro area is generally the local currency, unless the major cash flows are made with reference to another currency (such as the Orange Romania – euros and in the Democratic Republic of the Congo – American dollars).
The financial statements of foreign operations whose functional currency is neither the euro nor the currency of a hyper-inflationary economy are translated into euros (the Group’s presentation currency) as follows:
– assets and liabilities are translated at the year-end rate;
– items in the income statement are translated at the average rate for the period;
– the translation adjustment resulting from the use of these different rates is included in other comprehensive income.
Translation adjustments are reclassified to profit or loss when the entity disposes or partially disposes (loss of control, loss of joint control, loss of significant influence) of its interest in a foreign operation through the sale, liquidation, repayment of capital or discontinuation of all, or part of, that activity. The decrease in the carrying value of a foreign operation, either due to its own losses or because of the recognition of an impairment loss, does not result in a reclassification through profit or loss of the accumulated translation adjustments.
Reclassification of translation adjustments is presented in profit or loss within:
– net income of discontinued operations, when a line of business or major geographical area is disposed of;
– gains (losses) on disposal of fixed assets, investments and activities, when other businesses are disposed of.
Consolidated Financial Statements 2023 |
F-122 |
15.6 Non-controlling interests
The data presented below concern all entities of the following groups:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Credit part of net income attributable to non-controlling interests (a) |
|
518 |
|
509 |
|
577 |
o/w Sonatel and its subsidiaries |
|
320 |
|
269 |
|
243 |
o/w Orange Polska and its subsidiaries |
|
73 |
|
94 |
|
222 |
o/w Orange Côte d'Ivoire and its subsidiaries |
|
48 |
|
50 |
|
53 |
o/w Médi Telecom and its subsidiaries |
|
33 |
|
33 |
|
19 |
o/w Jordan Telecom and its subsidiaries |
|
28 |
|
29 |
|
16 |
o/w Orange Belgium and its subsidiaries |
|
— |
|
20 |
|
12 |
Debit part of net income attributable to non-controlling interests (b) |
|
(67) |
|
(38) |
|
(33) |
o/w Orange Romania and its subsidiaries |
|
(48) |
|
(33) |
|
— |
o/w Orange Belgium and its subsidiaries |
|
(15) |
|
— |
|
— |
o/w Orange Bank and its subsidiaries |
|
— |
|
— |
|
(22) |
Total part of net income attributable to non-controlling interests (a) + (b) |
|
451 |
|
471 |
|
545 |
Credit part of comprehensive income attributable to non-controlling interests (a) |
|
540 |
|
524 |
|
612 |
o/w Sonatel and its subsidiaries |
|
307 |
|
263 |
|
263 |
o/w Orange Polska and its subsidiaries |
|
114 |
|
114 |
|
215 |
o/w Orange Côte d'Ivoire and its subsidiaries |
|
47 |
|
52 |
|
55 |
o/w Médi Telecom and its subsidiaries |
|
36 |
|
24 |
|
23 |
o/w Jordan Telecom and its subsidiaries |
|
21 |
|
39 |
|
27 |
o/w Orange Belgium and its subsidiaries |
|
— |
|
19 |
|
13 |
Debit part of comprehensive income attributable to non-controlling interests (b) |
|
(70) |
|
(37) |
|
(31) |
o/w Orange Romania and its subsidiaries |
|
(51) |
|
(31) |
|
— |
o/w Orange Belgium and its subsidiaries |
|
(16) |
|
— |
|
— |
o/w Orange Bank and its subsidiaries |
|
— |
|
— |
|
(22) |
Total part of comprehensive income attributable to non-controlling interests (a) + (b) |
|
470 |
|
487 |
|
580 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Dividends paid to non-controlling interests |
|
381 |
|
328 |
|
218 |
o/w Sonatel and its subsidiaries |
|
208 |
|
185 |
|
166 |
o/w Orange Côte d'Ivoire and its subsidiaries |
|
53 |
|
51 |
|
29 |
o/w Orange Polska and its subsidiaries |
|
50 |
|
35 |
|
— |
o/w Médi Telecom and its subsidiaries |
|
34 |
|
33 |
|
— |
o/w Jordan Telecom and its subsidiaries |
|
25 |
|
18 |
|
11 |
o/w Orange Belgium and its subsidiaries |
|
— |
|
— |
|
7 |
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2021 |
|
Credit part of equity attributable to non-controlling interests (a) |
|
3,285 |
|
3,183 |
|
3,030 |
|
o/w Orange Polska and its subsidiaries |
|
1,313 |
|
1,250 |
|
1,170 |
|
o/w Sonatel and its subsidiaries |
|
1,008 |
|
907 |
|
826 |
|
o/w Orange Côte d'Ivoire and its subsidiaries |
|
247 |
|
253 |
|
257 |
|
o/w Jordan Telecom and its subsidiaries |
|
189 |
|
193 |
|
171 |
|
o/w Orange Romania and its subsidiaries |
|
163 |
|
217 |
|
267 |
|
o/w Orange Belgium and its subsidiaries |
|
149 |
|
155 |
|
138 |
|
o/w Médi Telecom and its subsidiaries |
|
142 |
|
140 |
|
148 |
|
Debit part of equity attributable to non-controlling interests (b) |
|
(11) |
|
(11) |
|
(10) |
|
Total equity attributable to non-controlling interests (a) + (b) |
|
3,274 |
|
3,172 |
|
3,020 |
|
Accounting policies
Commitments to purchase non-controlling interests (“put options”)
When the Group grants firm or contingent commitments to purchase holdings from non-controlling shareholders, the carrying value of the non-controlling interests is reclassified to financial debt.
When the amount of the commitment exceeds the amount of the non-controlling interests, the difference is recorded as a reduction in equity attributable to the owners of the parent company. Financial debt is remeasured at each reporting period end in accordance with the contractual arrangements (at fair value or at present value if fixed price) and, in the absence of any guidance provided by IFRS, with a counterparty in net finance costs.
Consolidated Financial Statements 2023 |
F-123 |
Non-controlling interests that are debtors
Total comprehensive income of a subsidiary is attributed to the owners of the parent company and to the non-controlling interests. In accordance with IFRS 10, this can result in the non-controlling interests having a deficit balance.
Transactions with shareholders of a controlled entity
Each transaction with minority shareholders of an entity controlled by the Group, when not resulting in a loss of control, is accounted for as an equity transaction with no effect on consolidated comprehensive income.
15.7 Earnings per share
Net income
The Group net income used to calculate basic and diluted earnings per share is determined according to the following method:
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Net income - basic |
|
2,440 |
|
2,146 |
|
233 |
Effect of subordinated notes |
|
(175) |
|
(200) |
|
(225) |
Net income attributable to the owners of the parent company - basic (adjusted) |
|
2,265 |
|
1,946 |
|
8 |
Impact of dilutive instruments on net income: |
|
|
|
|
|
|
TDIRA |
|
— |
|
12 |
|
— |
Net income attributable to the owners of the parent company - diluted |
|
2,265 |
|
1,957 |
|
8 |
Number of shares
The weighted average number of shares used to calculate the basic and diluted earnings per share is presented below:
(number of shares) |
|
2023 |
|
2022 |
|
2021 |
Weighted average number of ordinary shares outstanding |
|
2,659,184,216 |
|
2,658,328,369 |
|
2,656,981,542 |
Impact of dilutive instruments on number of ordinary shares: |
|
|
|
|
|
|
TDIRA |
|
— |
|
27,269,551 |
|
— |
Free share award plans (LTIP) |
|
1,336,982 |
|
1,233,198 |
|
776,743 |
Weighted average number of shares outstanding - diluted |
|
2,660,521,198 |
|
2,686,831,119 |
|
2,657,758,285 |
The average market price of the Orange share is higher than the fair value adopted under the free share award plans for all periods presented (see Note 6.3). The number of shares corresponding to this difference was thus dilutive at the reporting date of the periods presented.
At December 31, 2023 (as at December 31, 2021), the TDIRAs are not included in the calculation of diluted net earnings per share since they are anti-dilutive.
Earnings per share
(in euros) |
|
2023 |
|
2022 |
|
2021 |
Earning per share - basic |
|
0.85 |
|
0.73 |
|
— |
Earning per share - diluted |
|
0.85 |
|
0.73 |
|
— |
Accounting policies
Earnings per share
The Group discloses both basic earnings per share and diluted earnings per share for continuing operations and discontinued operations:
– basic earnings per share are calculated by dividing net income for the year attributable to the shareholders of the Group, after deduction of the remuneration net of the tax to holders of subordinated notes, by the weighted average number of ordinary shares outstanding during the period;
– diluted earnings per share are calculated based on the same net income, adjusted for the finance cost of dilutive debt instruments, net of the related tax effect. The number of shares used to calculate diluted earnings per share takes into account the conversion into ordinary shares of potentially dilutive instruments outstanding during the period. These instruments are considered dilutive when they have the effect of reducing earnings per share of continuing operations.
Consolidated Financial Statements 2023 |
F-124 |
When basic earnings per share are negative, diluted earnings per share are identical to basic earnings per share. In the event of a capital increase at a price lower than the market price, and in order to ensure comparability of the reporting periods shown, the weighted average numbers of shares outstanding in current and previous periods are adjusted. Treasury shares owned, which are deducted from the consolidated equity, do not enter into the calculation of earnings per share.
Note 16 Unrecognized contractual commitments (telecom activities)
Only the contractual commitments and off-balance sheet commitments of the entities controlled by the Group are presented below.
At December 31, 2023, Orange is not aware of having entered into any commitment that may have a material effect on its current or future financial position, other than the commitments mentioned in this note.
16.1 Operating activities commitments
(in millions of euros) |
|
Total |
|
Less than |
|
From one |
|
More than |
|
|
|
|
one year |
|
to five years |
|
five years |
Operating activities commitments |
|
9,220 |
|
3,692 |
|
3,291 |
|
2,237 |
Operating leases commitments |
|
228 |
|
94 |
|
93 |
|
41 |
Handsets purchase commitments |
|
1,353 |
|
1,334 |
|
15 |
|
4 |
Transmission capacity purchase commitments |
|
1,397 |
|
232 |
|
465 |
|
699 |
Other goods and services purchase commitments |
|
3,918 |
|
1,241 |
|
1,691 |
|
985 |
Investment commitments |
|
878 |
|
417 |
|
443 |
|
17 |
Public Initiative Networks commitments(1) |
|
61 |
|
10 |
|
19 |
|
32 |
Guarantees granted to third parties in the ordinary course of business |
|
1,386 |
|
363 |
|
565 |
|
459 |
(1) | Including unrecognized contractual commitments carried by Orange SA in the context of the deployment of the High and Very High Speed network in France. The unrecognized contractual commitments relating to Orange Concessions' group are presented in Note 11.3. |
Lease commitments
Lease commitments include property leases relating to contracts for which the underlying asset will be available after December°31, 2023 and leases for which the Group applies the exemptions allowed by IFRS 16 (see Note 9).
(in millions of euros) |
|
Minimum future |
|
|
lease payments |
Property lease commitments |
|
152 |
o/w technical activities |
|
51 |
o/w shops/offices activities |
|
101 |
Maturities are set forth below:
(in millions of euros) |
|
Minimum |
|
Less than |
|
Between |
|
Between |
|
Between |
|
Between |
|
More than |
|
|
future |
|
one year |
|
one and |
|
two and |
|
three and |
|
four and |
|
five years |
|
|
lease |
|
|
|
two years |
|
three years |
|
four years |
|
five years |
|
|
|
|
payments |
|
|
|
|
|
|
|
|
|
|
|
|
Property lease commitments |
|
152 |
|
45 |
|
25 |
|
16 |
|
19 |
|
10 |
|
37 |
Lease commitments correspond to the outstanding minimum future lease payments until the normal date of renewal of the leases or the earliest possible termination date.
Property lease commitments in France represent 40% of all property lease commitments.
Handsets purchase commitments
Handsets purchase commitments amount to 1,353 million euros at December 31, 2023 and correspond mainly to the balance of commitments relating to contracts signed in 2021 and spread over a 3 years period.
Transmission capacity purchase commitments
Transmission capacity purchase commitments at December 31, 2023 represent 1,397 million euros. They include an agreement on the use of an FTTH network in Spain for 819 million euros and 327 million euros for the provision of satellite transmission capacity (the maturity of these commitments extends until 2040, depending on the contracts).
Other purchase commitments for goods and services
The Group’s other purchase commitments for goods and services mainly relate to network operation and maintenance.
Consolidated Financial Statements 2023 |
F-125 |
At December 31, 2023, these commitments include:
– energy purchase commitments for an amount of 927 million euros;
– commitments relating to co-financed and leased lines for an amount of 255 million euros;
– the purchase of broadcasting rights for an amount of 360 million euros;
– hosting services for active equipment for mobile sites under a “built-to-suit” agreement for an amount of 413 million euros;
– site management service contracts (“TowerCos”) signed in Africa: these commitments represent an amount of 269 million euros;
– the maintenance of submarine cable for which Orange has joint ownership or user rights, for an amount of 212 million euros;
– network maintenance for an amount of 191 million euros;
– commitments to partners in the field of sports for an amount of 82 million euros.
Investment commitments
At the end of December 2023, investment commitments amount to 878 million euros.
In addition of commitments expressed in monetary terms, the Group has made commitments to national regulatory authorities, such as ensuring a certain coverage of the population by its fixed and mobile networks, particularly in connection with the assignment of licenses and in respect of quality of service. These commitments will require capital expenditure in future years to roll out and enhance the networks. They are not shown in the above statement of commitments related to operating activities if they have not been expressed in monetary terms, which is usually the case. The Group has accordingly agreed to meet the following conditions:
In France:
− Orange and the French Government announced on November 7, 2023 that they had reached a new agreement on the widespread roll-out of fiber optic by 2025. In the AMII (Appel à manifestation intention d'investissement – call for expression of investment interest) zone, this new roll-out commitment will replace the 2022 milestone of the L.33-13 commitments (i.e. the second milestone of the commitments made in 2018). This proposal is based on the following elements:
– by 2025, 1,120,000 premises in the entire AMII zone will be made connectable (which would represent 98.5% of connectable premises, including cases of blockage/refusal),
– by 2024, 140,000 premises within the perimeter of 55 inter-municipality cooperation zones with the lowest FTTH coverage.
In addition, a government order incorporating the terms of Orange’s commitment could be published following an advisory opinion from Arcep (Autorité de Régulation des Communications Electroniques, des Postes et de la Distribution de la Presse – the French Electronic Communications, Postal and Print Media Distribution Regulatory Authority), and may entail additional obligations.
− when Arcep awarded several spectrum blocks in the 700 MHz and 3.5 GHz bands for the territories of Réunion and Mayotte in 2022:
– a network coverage obligation of 7 predefined zones by 2025;
– an obligation to provide two sites by 2024.
– the obligations included in the authorization to use 5G spectrum in mainland France in the 3.4–3.8 GHz band issued to Orange on November 12, 2020 are as follows:
– the roll-out of sites (3,000 sites by the end of 2022, 8,000 sites by the end of 2024 and 10,500 sites by the end of 2025), 25% of which must be located in rural areas or industrial areas outside of very densely populated areas;
– widespread availability of a 5G service at all sites by the end of 2030, an obligation that may be met either with the 3.4-3.8 GHz band or another band;
– the provision of a speed of at least 240 Mbits/s per segment from 75% of sites by the end of 2022, 85% of sites by the end of 2024, 90% of sites by the end of 2025 and 100% of sites by the end of 2030;
– coverage of the main highways by the end of 2025 and major roads by the end of 2027;
– the provision of differentiated services and the activation of the IPv6 (Internet Protocol version 6) network protocol.
In addition, the commitments made by Orange to participate in the first stage of the procedure, which enabled it to obtain 50 MHz at a reserve price, became obligations in the authorization issued:
– from the end of 2023, Orange will have to provide a fixed offer from sites using the 3.5 GHz band and a fixed offer to cover premises that benefit from fixed-access radio network services;
– Orange will have to meet reasonable requests for the provision of services from private sector companies and public sector structures, provide indoor coverage, offer hosting for mobile virtual network operators (MVNOs) and be transparent about network failures and planned roll-outs.
– In 2018, pursuant to the provisions of Article L. 33-13 of the French Postal and Electronic Communications Code regarding coverage in sparsely populated areas, Orange committed to:
– ensuring that within its FTTH roll-out scope in the AMII area, and unless refused by third parties, 100% of homes and professional premises would have access to FTTH sales offers by the end of 2020 (including a maximum 8% of premises connectable on demand) and that 100% of homes and professional premises would be made connectable by the end of 2022. Subsequent to an opinion from Arcep, these proposals were accepted by the government in July 2018;
– outside of the AMII area, Orange proposed that it make roll-out commitments as part of AMEL (Appel à manifestation d'engagements locaux – Call for Local Commitments) procedures in the Vienne, Haute-Vienne, Deux-Sèvres and Lot-et-Garonne departments.
Consolidated Financial Statements 2023 |
F-126 |
– on January 14, 2018, the Orange group and the other French mobile operators signed an agreement (the “New Deal”) to ensure better mobile coverage of the French mainland and particularly rural areas. This agreement includes enhanced coverage obligations, which are included for the 2018–2021 period in our existing licenses in the 900 MHz, 1,800 MHz and 2,100 MHz bands, and for the post-2021 period in the new 900 MHz, 1,800 MHz and 2,100 MHz licenses awarded on November 15, 2018:
– targeted programs for the improvement of coverage, with the coverage of 5,000 areas per operator by 2029;
– the widespread roll-out of 4G by the end of 2020 on almost all existing mobile sites;
– acceleration of the coverage of transportation routes, ensuring that the main roads and railways have 4G coverage;
– the supply of a fixed 4G service and the extension of the service to 500 additional sites upon request from the government by 2020;
– the widespread provision of telephone coverage indoors, proposing voice over Wi-Fi, SMS over Wi-Fi offers and on-demand offers involving the indoor coverage of buildings;
– improved reception quality across France, particularly in rural areas, with good coverage (according to Arcep Decision No. 2016-1678 relating to publications providing information on mobile coverage) by 2024–2027.
– in 2015, in France, when the spectrum in the 700 MHz band was allocated:
– coverage obligations in “priority roll-out areas” (40% of the country within 5 years, 92% within 12 years and 97.7% within 15 years) and in “white areas” (100% within 12 years), at the level of priority main roads (100% within 15 years) and at the level of the national rail network (60% within 7 years, 80% within 12 years and 90% within 15 years).
– in 2011, in France, when the spectrum in the 2.6 GHz and 800 MHz bands was allocated:
– an optional commitment to host mobile virtual network operators (MVNOs) on certain technical and pricing terms under Full MVNO schemes;
– a coverage obligation for mobile access with theoretical maximum download speeds of at least 60 Mbits/s per user (25% of the country within 4 years and 75% within 12 years for the 2.6 GHz band; 98% of the country within 12 years and 99.6% within 15 years for the 800 MHz band) which can be met by using both the allocated spectrum and other spectrum;
– for the 800 MHz band, specifically: a coverage obligation in priority areas (40% of the country within 5 years, 90% within 10 years) with no obligation to provide roaming services, a coverage obligation in each department (90% within 12 years, 95% within 15 years) and an obligation to pool resources in communities covered by the “white area” program.
In Europe:
− when a 5G license in the 3.4–3.8 GHz band was awarded in Poland in 2023:
– an obligation to build 3,800 network stations within 4 years;
– an obligation to offer 5G services in towns with fewer than 80,000 inhabitants by building stations in these municipalities based on the size of the population;
– coverage and network quality obligations to be met within a period of 7 years.
− when a 4G license was awarded in the 2,100 MHz band in Poland in 2022, a coverage obligation of 20% of the population with a minimum speed of 144 kbits/s.
− when licenses were awarded in the 700, 900, 1,800 and 2,100 MHz bands in Belgium in 2022:
– a network coverage obligation of the population with an outdoor download quality of service of 6 Mbits/s (70% within one year, 99.5% within 2 years and 99.8% within 6 years);
– a coverage obligation for 15 railway lines with a minimum speed of 10 Mbits/s for 98% of locations by the end of 2024.
− when two spectrum blocks were awarded in the 700 MHz band and one block in the 3.4-3.8 GHz band in Romania in 2022:
– a network coverage obligation of 95% in 80 municipalities classified as "white areas" (60 municipalities within 4 years and 80 within 6 years);
– an indoor network coverage obligation of 70% of the population with a minimum speed of 92 kbits/s in rural areas and 85 kbits/s in urban areas within 6 years;
– a network coverage obligation of 95% of the modern railway network and highways including new projects under construction (85% within 4 years and 95% within 6 years);
– a network coverage obligation of 85% of international airports with a minimum speed of 100 Mbits/s within 2 years;
– an obligation to develop network stations allowing a minimum network speed of 100 Mbits/s nationwide (including 200 stations to be built in Bucharest within 2 years, 500 stations to be built outside Bucharest within 2 years, 1,200 stations to be built outside Bucharest within 4 years and 1,800 stations to be built outside Bucharest within 8 years).
– in 2021 in Spain, when the two license blocks in the 700 MHz band were allocated:
– a network coverage obligation of municipalities with a population of more than 50,000 (30% in one year, 70% in 3 years and 100% in 4 years);
– network coverage obligation of airports, ports, railway stations and main roads for municipalities with more than 50,000 inhabitants by the end of 2025.
– when a 5G license in the 700 MHz band was awarded in Slovakia in 2020:
– an obligation to provide 5G services using a new radio access network within 2 years of the award;
– a coverage obligation of 95% of the population of the regional capitals by the end of 2025, 90% of the population outside the regional capitals and 70% of the total population by the end of 2027.
Consolidated Financial Statements 2023 |
F-127 |
In Africa & Middle East:
– during the award of the 5G license in 2023 in Senegal, Sonatel made a commitment to:
– cover the strategic areas within a period of 18 months and towns with more than 100,000 inhabitants and regional capitals within a period of 2 years;
– roll-out 500 5G sites by 2026, 1,400 5G sites by 2030 and cover the 9 main trunk roads within a period of 10 years (including five within 8 years).
– when a 5G license in the 3,500 MHz band was awarded in Jordan in 2022, a coverage obligation of the main interests spots within 3 years, a coverage obligation of 50% of the population within 4 years and 75% within 9 years,
– in 2020, in Burkina Faso, when the 4G license was granted and the 2G and 3G licenses renewed, a coverage obligation of 60 new localities over 8 years and main roads over 6 years,
– in 2016, in Egypt, when the 4G license was granted, a coverage obligation of 4G for 11% of the population in 1 year, 42.5% in 4 years, 69.5% in 6 years and 70% in 10 years.
Non-compliance with these obligations could result in fines and other sanctions, ultimately including the withdrawal of licenses awarded. Management believes that the Group is able to fulfill these commitments to the government authorities.
Guarantees granted to third parties in the ordinary course of business
Commitments made by the Group to third parties in the ordinary course of business represent 1,386 million euros at December°31, 2023. They include 736 million euros of performance guarantees granted to some of its B2B customers, in particular in the context of network security and remote access.
The amount of guarantees granted by the Group to third parties (financial institutions, partners, customers and government agencies) to cover the performance of the contractual obligations of non-consolidated entities is not material. Guarantees granted by the Group to cover the performance of the contractual obligations of the consolidated subsidiaries are not considered as unrecognized contractual commitments, as they would not increase the Group’s commitments by comparison with the underlying obligations of the consolidated subsidiaries.
16.2 Consolidation scope commitments
Asset and liability warranties granted in relation to disposals
Under the terms of disposal agreements between Group companies and the acquirers of certain assets, the Group is subject to warranty clauses relating to assets and liabilities. Nearly all material disposal agreements provide for caps on these warranties.
At December 31, 2023, the main warranties in effect are as follows:
– fundamental warranties granted to the HIN consortium (made up of La Banque des Territoires, Caisse des Dépôts, CNP Assurances and EDF) in connection with the disposal of Orange Concessions (50% of the capital sold in 2021), expiring 3 years after the date of the transaction, and tax warranties expiring 60 days after the end of the statutory limitation periods;
– warranties granted to the APG group in connection with the disposal of the FiberCo in Poland (50% of the capital sold in 2021), which will expire at the end of 18 months, with the exception of the tax and fundamental warranties, which will expire after 7 and 6 years, respectively;
– miscellaneous standard warranties granted to buyers of real estate sold by the Group.
Orange believes that the risk of all these warranties being enforced is remote or that the potential consequences of their being enforced are not material with respect to the Group’s results and financial position.
Asset and liability warranties received in relation to acquisitions
Under the terms of acquisition agreements between Group companies and the transferors of certain assets, the Group has received warranty clauses relating to assets and liabilities. Nearly all material acquisition agreements provide for caps on these warranties.
At December 31, 2023, the main warranties in effect are as follows:
– standard and specific capped warranties obtained from Hellenic Telecommunications Organization S.A. in connection with the acquisition of Telekom Romania Communications, which expired on March 31, 2023 (with respect to general representations and warranties) and will expire on September 30, 2028 (with respect to fundamental warranties). Some specific capped allowances have also been obtained, for up to 10 years;
– standard and specific capped warranties obtained from Nethys in connection with the acquisition of VOO, which will expire on December 2, 2024 for the general representations and warranties and on June 2, 2028 for the fundamental warranties. Some specific capped allowances have also been obtained, for up to 7 years.
Orange believes that the risk of all these warranties being enforced is remote or that the potential consequences of their being enforced are not material with respect to the Group's results and financial position.
Commitments relating to securities
Under the terms of agreements with third parties, Orange can make or receive commitments to purchase or to sell securities. The ongoing commitments at December 31, 2023 are not likely to have material impacts on the Group’s financial position.
Orange Tunisie
Under the terms of the shareholders’ agreement with Investec dated May 20, 2009, Orange has a call option giving it the right to purchase at market value 1% of the share capital of Orange Tunisie plus one share, subject to regulatory authorizations. If this option were exercised, Orange would take control of Orange Tunisie. Investec would then have the right to sell to Orange 15% of the share capital of Orange Tunisie at market value.
Consolidated Financial Statements 2023 |
F-128 |
Orange Concessions
Under the terms of the shareholders' agreement signed on March 27, 2021, which became effective on November 3, 2021, with the HIN consortium (made up of La Banque des Territoires, Caisse des Dépôts, CNP Assurances and EDF), Orange has a call option that can be exercised in fiscal year 2026 enabling it to acquire at market value 1% of the voting rights of Orange Concessions, subject to the award of the authorizations.
FiberCo in Poland
Under the terms of the shareholders' agreement with APG Group signed on April 11, 2021, Orange has a call option that can be exercised from fiscal year 2027 giving it the right to purchase at market value 1% of the share capital of Światłowód Inwestycje Sp.z o.o., subject to the award of the authorizations.
Consolidated Financial Statements 2023 |
F-129 |
16.3 Financing commitments
The Group’s main commitments related to financial payables are set out in Note 14.
Orange has pledged (or given as guarantees) certain investment securities and other assets to financial lending institutions or used them as collateral to cover bank loans and credit facilities.
Guarantees granted to some lenders to finance consolidated subsidiaries are not set out below.
Assets covered by commitments
The items presented below do not include the impact of the regulation on the transferability of the assets or the possibility of contractual restrictions in network asset sharing agreements.
At December 31, 2023 Orange had no material pledges on its subsidiaries’ securities.
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2021 |
Assets held under leases |
|
1,230 |
|
1,134 |
|
998 |
Non-current pledged, mortgaged or receivership assets(1) |
|
2 |
|
20 |
|
21 |
Collateralized current assets |
|
2 |
|
2 |
|
2 |
Total |
|
1,233 |
|
1,157 |
|
1,021 |
(1) | Non-current pledged, mortgaged or receivership assets are shown excluding cash collateral deposits, which are presented in Note 13. |
At December 31, 2023, non-current pledged or mortgaged assets comprise the following assets given as guarantees:
|
|
Total in statement of |
|
Amount of asset pledged, |
|
Percentage |
|
(in millions of euros) |
|
financial position (a) |
|
mortgaged or receivership (b) |
|
(b)/(a) |
|
Intangible assets, net (excluding goodwill) |
|
15,074 |
|
— |
|
— |
|
Property, plant and equipment, net |
|
33,184 |
|
2 |
|
— |
% |
Non-current financial assets |
|
1,036 |
|
— |
|
— |
|
Other(1) |
|
35,085 |
|
— |
|
— |
|
Total |
|
84,378 |
|
2 |
|
— |
% |
(1) | This item mainly includes net goodwill, interests in associates, net deferred tax assets, non-current derivatives assets and rights-of-use. |
Note 17 Mobile Financial Services activities
17.1 Financial assets and liabilities of Mobile Financial Services
The financial statements of Mobile Financial Services activities were put into the format of the Orange group’s Consolidated Financial Statements and therefore differ from a presentation that complies with the banking format.
In order to improve the readability of financial statements and to distinguish the performance of telecom activities from Mobile Financial Services activities performance, the notes on financial assets, liabilities and results are split to reflect these two business scopes.
Thus Note 13 presents the assets, liabilities and results specific to telecom activities and Note 17 focuses on the financial assets and liabilities of Mobile Financial Services, as its financial result is not material.
Consolidated Financial Statements 2023 |
F-130 |
The following table reconciles the balances of assets and liabilities for each of these two scopes (intra-group transactions between telecom activities and Mobile Financial Services are not eliminated) with the consolidated statement of financial position at December 31, 2023.
(in millions of euros) |
|
Orange |
|
o/w telecom |
|
Note |
|
o/w Mobile |
|
Note |
|
o/w eliminations |
|
|
|
Consolidated |
|
activities |
|
|
|
Financial |
|
|
|
telecom |
|
|
|
Financial |
|
|
|
|
|
Services |
|
|
|
activities / mobile |
|
|
|
Statements |
|
|
|
|
|
|
|
|
|
financial services |
|
Non-current financial assets related to Mobile Financial Services activities |
|
297 |
|
— |
|
|
|
297 |
|
17.1.1 |
|
— |
|
Non-current financial assets |
|
1,036 |
|
1,063 |
|
13.7 |
|
— |
|
|
|
(27) |
(1) |
Non-current derivatives assets |
|
956 |
|
886 |
|
13.8 |
|
70 |
|
17.1.3 |
|
— |
|
Current financial assets related to Mobile Financial Services activities |
|
3,184 |
|
— |
|
|
|
3,192 |
|
17.1.1 |
|
(7) |
|
Current financial assets |
|
2,713 |
|
2,713 |
|
13.7 |
|
— |
|
|
|
— |
|
Current derivatives assets |
|
37 |
|
37 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Cash and cash equivalents |
|
5,618 |
|
5,504 |
|
13.8 |
|
113 |
|
17.1.3 |
|
— |
|
Total |
|
13,841 |
|
10,204 |
|
13.8 |
|
3,672 |
|
17.1.3 |
|
(35) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial liabilities related to Mobile Financial Services activities |
|
73 |
|
— |
|
|
|
100 |
|
17.1.2 |
|
(27) |
(1) |
Non-current financial liabilities |
|
30,535 |
|
30,535 |
|
13.3 |
|
— |
|
|
|
— |
|
Non-current derivatives liabilities |
|
225 |
|
205 |
|
13.8 |
|
19 |
|
17.1.3 |
|
— |
|
Current financial liabilities related to Mobile Financial Services activities |
|
3,073 |
|
— |
|
|
|
3,073 |
|
17.1.2 |
|
— |
|
Current financial liabilities |
|
5,451 |
|
5,458 |
|
13.3 |
|
— |
|
|
|
(7) |
|
Current derivatives liabilities |
|
40 |
|
40 |
|
13.8 |
|
— |
|
17.1.3 |
|
— |
|
Total |
|
39,396 |
|
36,238 |
|
|
|
3,193 |
|
|
|
(35) |
|
(1) | Loan granted by Orange SA to Orange Bank. |
The Mobile Financial Services segment includes Orange Bank and other entities. As the contribution of other entities to the statement of financial position of Mobile Financial Services and therefore of the Group is not material, only Orange Bank data is presented in detail below.
Accounting policies
Since the concept of current or non-current does not exist in bank accounting, financial assets and liabilities related to loans and borrowings to customers or credit institutions (the ordinary activities of a bank) are classified as current for all periods presented.
With regard to other financial assets and liabilities, classification as current and non-current has been made in light of both the original intention of management and the nature of the assets and liabilities in question. For example, with regard to Orange Bank’s other financial assets, since investments are managed by portfolio, only the transaction portfolios (financial assets at fair value through profit or loss) have been recorded as current financial assets.
Consolidated Financial Statements 2023 |
F-131 |
17.1.1 Financial assets related to Orange Bank transactions (excluding derivatives)
The financial assets related to the transactions of Orange Bank break down as follows:
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
||||
|
|
Non-current |
|
Current |
|
Total |
|
Total |
|
Total |
Financial assets at fair value through other comprehensive income that will not be reclassified to profit or loss |
|
3 |
|
— |
|
3 |
|
3 |
|
3 |
Investments securities |
|
3 |
|
— |
|
3 |
|
3 |
|
3 |
Financial assets at fair value through other comprehensive income that may be reclassified to profit or loss |
|
32 |
|
— |
|
32 |
|
296 |
|
441 |
Debt securities |
|
32 |
|
— |
|
32 |
|
296 |
|
441 |
Financial assets at fair value through profit or loss |
|
38 |
|
— |
|
38 |
|
50 |
|
73 |
Investments at fair value |
|
— |
|
— |
|
— |
|
— |
|
— |
Cash collateral paid |
|
29 |
|
— |
|
29 |
|
42 |
|
59 |
Other |
|
9 |
|
— |
|
9 |
|
8 |
|
14 |
Financial assets at amortized cost |
|
224 |
|
3,173 |
|
3,397 |
|
3,021 |
|
2,752 |
Fixed-income securities |
|
224 |
|
1 |
|
225 |
|
310 |
|
387 |
Loans and receivables to customers |
|
— |
|
2,394 |
|
2,394 |
|
2,517 |
|
2,297 |
Loans and receivables to credit institutions |
|
— |
|
778 |
|
778 |
|
191 |
|
66 |
Other |
|
— |
|
— |
|
— |
|
2 |
|
1 |
Total financial assets related to Orange Bank activities |
|
297 |
|
3,174 |
|
3,471 |
|
3,370 |
|
3,268 |
Debt securities measured at fair value through other comprehensive income that will be reclassified to profit or loss
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Debt securities measured at fair value through other comprehensive income that will be reclassified to profit or loss - in the opening balance |
|
296 |
|
441 |
|
540 |
Acquisitions |
|
— |
|
405 |
|
732 |
Repayments and disposals |
|
(266) |
|
(538) |
|
(839) |
Changes in fair value |
|
2 |
|
(12) |
|
— |
Other items |
|
— |
|
— |
|
7 |
Debt securities measured at fair value through other comprehensive income that will be reclassified to profit or loss - in the closing balance |
|
32 |
|
296 |
|
441 |
(in millions of euros) |
|
2023 |
|
2022 |
|
2021 |
Profit (loss) recognized in other comprehensive income during the period |
|
2 |
|
(2) |
|
1 |
Reclassification adjustment in net income during the period |
|
— |
|
— |
|
— |
Other comprehensive income related to Orange Bank |
|
2 |
|
(2) |
|
1 |
Loans and receivables of Orange Bank
Loans and receivables of Orange Bank are composed of loans and receivables with customers and credit institutions.
In the context of adapting the bank's accounts into the Group's financial statements, the following are considered as loans and advances to customers: clearing account as well as amounts related to securities transactions on behalf of customers.
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2021 |
Overdrafts (1) |
|
763 |
|
900 |
|
828 |
Housing loans |
|
883 |
|
956 |
|
914 |
Investment loans |
|
58 |
|
72 |
|
86 |
Installment receivables (2) |
|
604 |
|
519 |
|
422 |
Current accounts |
|
6 |
|
28 |
|
5 |
Other |
|
80 |
|
42 |
|
42 |
Total loans and receivables to customers |
|
2,394 |
|
2,517 |
|
2,297 |
Overnight deposits and loans |
|
695 |
|
83 |
|
2 |
Loans and receivables |
|
38 |
|
44 |
|
45 |
Other |
|
45 |
|
64 |
|
19 |
Total loans and receivables to credit institutions |
|
778 |
|
191 |
|
66 |
(1) | Since October 2020, Orange Bank has been engaged in a self-subscribed securitization program of a portfolio of French personal loans for approximately 540 million euros. |
(2) | Purchase of Orange Espagne receivables. |
Consolidated Financial Statements 2023 |
F-132 |
Accounting policies
Financial assets
– Financial assets at fair value through profit or loss (FVR)
Certain equity securities which are not consolidated or equity-accounted and cash investments such as negotiable debt securities, deposits and money market UCITS, which are compliant with the Group’s liquidity risk management policy, may be designated by Orange Bank as being recognized at fair value through profit or loss. These assets are recognized at fair value at initial recognition and subsequently. All changes in value are recorded in profit or loss.
– Financial assets at fair value through other comprehensive income that will not be reclassified to profit or loss (FVOCI)
Equity securities which are not consolidated or equity-accounted are, subject to exceptions, recognized as assets at fair value through other comprehensive income that will not be reclassified to profit or loss. They are recognized at fair value at initial recognition and subsequently. Temporary changes in value and gains (losses) on disposals are recorded as other comprehensive income that will not be reclassified to profit or loss.
– Financial assets at fair value through other comprehensive income that may be reclassified to profit or loss (FVOCIR)
Assets at fair value through other comprehensive income that may be reclassified to profit or loss mainly include investments in debt securities. They are recognized at fair value at initial recognition and subsequently. Temporary changes in value are recorded in other comprehensive income that may be reclassified to profit or loss. In case of disposal, the cumulative gain (or loss) recognized in other comprehensive income that may be reclassified to profit or loss is then reclassified to profit or loss.
– Financial assets at amortized cost (AC)
This category primarily comprises various loans and receivables as well as fixed-income securities held for the purpose of collecting contractual flows. These instruments are recognized at fair value at initial recognition and are subsequently measured at amortized cost using the effective interest method.
Impairment of financial assets
In accordance with IFRS 9, debt instruments classified as financial assets at amortized cost or as financial assets at fair value through other comprehensive income, lease receivables, financing commitments and financial guarantees given are systematically subject to impairment or a provision for an expected credit loss. These impairment losses and provisions are recorded as soon as loans are granted, commitments are concluded or bonds are purchased, without waiting for the appearance of an objective indication of impairment.
To do this, the financial assets concerned are divided into three categories according to the change in credit risk observed since their initial recognition and an impairment loss is recorded on the amount outstanding of each of these categories, as follows:
- Performing loans: the calculation of expected losses is made on a 12-month basis, and the financial income (interest) is calculated on the basis of the gross amount of the instrument;
- Impaired loans: if the credit risk has significantly deteriorated since the loans were recorded in the balance sheet, the expected losses, estimated over the duration of the loan, are recognized as an impairment or a provision and the financial income (interest) is calculated on the basis of the gross amount of the instrument;
- Doubtful loans: impairment or a provision is recognized for the expected loss, estimated over the duration of the loan. The financial income is calculated on the basis of the amount of the instrument net of the impairment.
17.1.2 Financial liabilities related to Orange Bank transactions (excluding derivatives)
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31,2021 |
Payables to customers(1) |
|
2,601 |
|
1,787 |
|
1,796 |
Debts with financial institutions(2) |
|
215 |
|
837 |
|
1,009 |
Deposit certificate |
|
219 |
|
325 |
|
356 |
Cash collateral deposit |
|
73 |
|
82 |
|
— |
Other(3) |
|
66 |
|
112 |
|
27 |
Total Financial liabilities related to Orange Bank activities(4) |
|
3,173 |
|
3,143 |
|
3,188 |
(1) | Including 1.2 billion euros from deposits collected via Germany's RAISIN platform. |
(2) | Decrease mainly related to repayments to the European Central Bank (TLTROs) of 601 million euros. |
(3) | Including 37 million euros of rate hedging credit portfolios reassessment. |
(4) | Including 100 million euros in non-current financial liabilities in 2023, 110 million euros in 2022 and 27 million euros in 2021. |
Consolidated Financial Statements 2023 |
F-133 |
Payables related to Orange Bank transactions are composed of customer deposits and bank's payables with credit institutions.
(in millions of euros) |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2021 |
Current accounts |
|
527 |
|
680 |
|
764 |
Passbooks and special savings accounts(1) |
|
800 |
|
1,010 |
|
995 |
Term accounts(2) |
|
1,234 |
|
40 |
|
— |
Other |
|
40 |
|
57 |
|
37 |
Total payables to customers |
|
2,601 |
|
1,787 |
|
1,796 |
Term borrowings and advances |
|
108 |
|
700 |
|
667 |
Securities delivered under repurchase agreements |
|
107 |
|
137 |
|
331 |
Other |
|
— |
|
— |
|
11 |
Total debts with credit institutions |
|
215 |
|
837 |
|
1,009 |
(2)At the end of December 2023, 1.2 billion euros has been collected via the German RAISIN platform.
17.1.3Derivatives of Orange Bank
Derivatives qualified as fair value hedges
At December 31, 2023, the main unmatured fair value hedges set up by Orange Bank concern the following interest rate swaps:
– 1,044 million euros in notional value (of which 102 million euros maturing in 2024, 110 million euros maturing between one and five years and 832 million euros at more than five years), macro-hedging credit portfolios (lease property restructuring, consumer credit and spread payments). The net fair value of these derivatives at December 31, 2023 is 37 million euros;
– 100 million euros in notional value (of which 100 million euros at more than five years), hedging a portfolio of French fungible Treasury bonds (Obligations Assimilables du Trésor - OAT) of the same amount and maturity. The fair value of these swaps at December 31, 2023 is 14 million euros;
– 20 million euros in notional value hedging a portfolio of French fungible Treasury bonds index-linked to consumer prices harmonized within the euro zone (Obligations Assimilables du Trésor indexées sur l’inflation des prix de la zone euro – OAT€i) of the same amount and maturity, i.e. 2030. The fair value of these swaps at December 31, 2023 is (4) million euros;
– 5 million euros in notional value hedging a portfolio of securities maturing in 2028, whose fair value at December 31, 2023 is close to zero.
The ineffective portion of these hedges recognized in profit or loss in 2023 is not material.
Cash flow hedge derivatives
At January 1, 2020, Orange Bank had documented a micro-hedging of its issues through interest rate swaps which, at the end of 2023, represented:
– 186 million euros in notional value (including 166 million euros maturing in 2024, 10 million euros maturing between one and two years and 10 million euros maturing in 2027), hedging negotiable debt securities issued by the bank, the fair value of which was 4 million euros at December 31, 2023.
Trading derivatives
– Orange Bank has set up interest rate swaps as economic hedges (not designated as hedges under IFRS) of EIB securities for a total notional amount of 10 million euros maturing in 2029, the fair value of which was 1 million euros at December 31, 2023. The net effects of this economic hedge on profit or loss are not material;
– Orange Bank has a portfolio of trading swaps with a total notional value of 16 million euros maturing within five years and a total fair value of close to zero at December 31, 2023.
17.2 Information on market risk management with respect to Orange Bank activities
Orange Bank has its own risk management system in accordance with banking regulations. In terms of banking regulation, Orange Bank is under the supervision of the French Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution – ACPR) and must at all times comply with a capital requirement in order to withstand the risks associated with its activities.
Orange Bank’s activities expose it to most of the risks defined by the ordinance of November 3, 2014, relating to the internal control of companies in the banking, payment services and investment services sector subject to the control of the ACPR. The most significant of these risks are:
– credit risk and counterparty risk: the risk of loss incurred in the event of default by a counterparty or counterparties considered as the same beneficiary;
Consolidated Financial Statements 2023 |
F-134 |
– liquidity risk: the risk that Orange Bank will not be able to meet its commitments or not be able to unwind or offset a position due to the market situation;
– operational risk: the risk resulting from an inadequacy or failure due to procedures, employees or internal systems or to outside events, including events that are unlikely to occur but that would incur a high risk of loss. Operational risk includes the risk of internal and external fraud and IT risk;
– interest rate risk: the risk incurred in the event of changes in interest rates impacting on-balance sheet and off-balance sheet transactions, excluding, where applicable, transactions exposed to market risk;
– non-compliance risk: the risk of judicial, administrative or disciplinary sanctions, material financial loss or damage to reputation, arising from non-compliance with provisions specific to banking and financial activities;
– concentration risk: the risk arising from excessive exposure to a counterparty, to a group of counterparties operating in the same economic sector or geographic area, or the application of credit risk reduction techniques, particularly collateral issued by a single entity;
− market risk: the risk of loss due to movements in market product prices.
The size of the bank and its moderate risk profile led to the choice of standard methods regarding the application of Regulation No. 575/2013 of the European Parliament and of the Council of June 26, 2013.
Orange Bank is not involved with complex products. For market transactions, the bank’s Executive Committee sets the limits while the Risk Management Department monitors compliance with these limits and the quality of the authorized signatories.
In addition, the Bank has defined and regularly tests its business continuity system. The Bank has also undertaken, as comprehensively as possible, to identify and assess its operational risks, for which it also monitors occurrences.
In line with regulations, and in particular titles IV and V of the ordinance of November 3, 2014, the bank’s Executive Committee, on the recommendation of the Risk Management Department, establishes the institution’s risk policy, which is formalized through the risk appetite framework, and ensures its proper implementation.
The Risk Management Department analyzes and monitors risk, carries out the necessary controls and produces reports for various committees: The Credit Committee (management of credit and counterparty risk), the Risk and Audit Committee (management of operational risks), the Financial Security and Compliance Committee (management of non-compliance risk), the ALM Committee (management of market, interest rate and liquidity risk) and the Executive Committee.
17.2.1Credit risk and counterparty risk management
Since July 2022, Orange Bank has began migrating its consumer credit distribution platform, previously hosted by Franfinance (Société Générale Group), to Younited Credit. This roll-out was completed in the first quarter of 2023. The bank is thus benefiting from new credit risk management technologies.
The Bank has also reviewed its provisioning models to adapt them to the type of loan portfolio and macroeconomic conditions, resulting in a provision reversal of 6 million euros.
At the end of December 2023, the cost of risk of Orange Bank amount to 56 million euros, including 16 million euros in France and 40 million euros in Spain. Excluding exceptional adjustments (review of macroeconomic outlooks or review of models), the cost of risk is 63 million euros, of which 23 million euros for France and 40 million euros for Spain.
In France, the cost of risk is mainly concentrated in demand deposit accounts due to the increase in outstanding debit balances and in personal loans due to the increase in outstandings since the roll-out of Younited Credit.
In Spain, the cost of risk is mainly related to the increase in Orange Espagne’s mobile handset financing outstandings from 600 million euros at December 31, 2022 to 667 million euros at December 31, 2023 (excluding the provision for credit risk).
17.2.2Market and interest rate risk management
Orange Bank does not carry out proprietary trading operations. Its market activity mainly consists of investments to optimize liquidity management and purchases of interest rate hedges.
The value of the securities portfolio continues to decrease in line with the bank’s strategy, market risk indicators remain stable and the associated risks are not material.
Consolidated Financial Statements 2023 |
F-135 |
Fixed-interest securities in investment portfolios are hedged. Orange Bank has no exposure classified as trading book. The interest rate risk, after the capital increase in December 2023, is less than 1% of the CET1 (Common Equity Tier 1) ratio. Finally, the basic risk is not material.
17.2.3Liquidity risk management
In 2023, Orange Bank continued to manage its liquidity in a prudent manner. At the end of December 2023, the net stable funding ratio (NSFR) is 160% and the LCR (short-term liquidity coverage ratio) reaches 784%. 2023 was characterized by a liquidity surplus related to customer transactions. The deficit has changed from 855 million euros at December 31, 2022 to a liquidity surplus of 84 million euros at December 31, 2023. This change was mainly due to the high level of deposits in term accounts in 2023 (via the RAISIN platform).
Orange Bank has stepped up the diversification of its financing sources through the RAISIN term account program, in order to offset the outflow of customer deposits and the expiration of the European Central Bank's financing programs (TLTROs) for 601 million euros in 2023. RAISIN term account outstandings increased from 40 million euros at December 31, 2022 to 1.2 billion euros at December 31, 2023.
A plan to secure liquidity has been put in place in view of the bank’s context:
– A committed repo facility with BNP Paribas relating to the Senior tranche of the “Orange Bank Personal Loan 2020” FCT (securitization mutual fund) and a basket of eligible securities;
– A credit facility for 400 million euros signed between Orange Bank and Orange SA on June 28, 2023.
Orange Bank's financing plan was revised and presented to the ACPR at the end of 2023 to demonstrate that the bank is able to comply with its prudential ratios for solvency (capital requirement) and liquidity (LCR, NSFR and Pillar 2 liquidity) at all times.
This updated financing plan, presented on a monthly basis, is in line with the plans previously communicated to the ACPR and remains in accordance with the Group's financing envelope of 1.3 billion euros approved by the Orange SA Board of Directors on July 25, 2023.
17.2.4Operational risk management
At bank level, the operational risk guidance scope covers:
– operational risks carried by all the bank's activities (management, operating and support activities);
– operational risks from major and critical external service providers.
Operational risk management is the responsibility of the Permanent Control and Operational Risk Director, who reports to the Executive Director of Risk and Control, a member of the Management Committee, who in turn reports directly to an effective director of Orange Bank.
The operational risk management system is based on the collection of operational incidents and losses, risk mapping, scenario analyses and key risk indicators managed by the operational risk department and monitored within the context of risk appetite, and on the management of insurance policies covering the main types of risks faced by the bank. An inventory and collection of all of the bank’s operational incidents (proven risks), including IT, IT security and non-compliance risks, are in place. Incidents are reported as soon as they are detected by all bank employees in a dedicated IT tool.
Where non-compliance incidents are identified, the Operational Risks Department notifies the Compliance Department, which is responsible for monitoring and managing them.
The operational losses sustained by the entity amounted to 2 million euros at December 31, 2023, a substantial decrease compared with the previous year. They amounted to 3 million euros in 2022 and 1 million euros in 2021. The losses recorded in 2023 are mainly due to external fraud, particularly credit fraud, as well as, to a lesser extent, commercial disputes and execution errors. Action plans have been drawn up in collaboration with the business lines to mitigate the various types of risk described above and to further secure the various processes, given the Orange group’s announced intention to wind down its banking activities.
17.2.5Non-compliance risk management
Orange Bank’s Compliance function is part of the Compliance, Financial Security and Investment Services Compliance Department, whose Director is a member of the Executive Committee. This function is impartial and independent from the operational business lines to safeguard its objectivity. It is also a local function responsible for ensuring that all of the bank’s business lines adhere to the compliance system.
The main mission of Compliance is to oversee the management of non-compliance risk. It ensures that the level of non-compliance risk to which Orange Bank is exposed is compatible with the guidelines and policies set by the Board of Directors in this area, as well as with the overall limits for financial, non-financial and operational risk (e.g. reputational risk, regulatory sanctions, etc.).
In this context, Compliance implements all actions aimed at ensuring compliance with the requirements of external and internal standards (organization, processes, procedures). These actions take place along the entire value chain, from the execution of transactions by the various business lines to their monitoring by Compliance.
As the first level of control, employees and their superiors identify the risks arising from their activity and comply with the procedures and limits set out in the General Procedures and operating procedures. They are in particular responsible for:
− implementing operational controls and first-level controls that can be formalized, tracked and reported on;
− formalizing and verifying compliance with the procedures for processing transactions, detailing the responsibilities of those involved and the types of controls carried out;
− verifying the compliance of transactions;
− implementing the recommendations drawn up by the second-level control functions for the first-level control system;
− reporting to and alerting second-level control functions. As the second level of control, Compliance verifies in particular that the risks have been identified, assessed and managed by the first level of control in accordance with the rules and procedures in place.
In particular, Compliance is responsible for overseeing:
− the compliance of transactions executed by employees in accordance with the laws, regulations and professional standards;
− the implementation of compliance recommendations by first-level control;
− the adoption and monitoring of remedial action plans where non-compliance risks have been identified.
Consolidated Financial Statements 2023 |
F-136 |
In addition, the compliance function within Orange Bank mainly consists of:
− producing and updating internal standards and procedures within its remit;
− advising and assisting operational business lines in their decision-making;
− raising awareness and training all employees on compliance issues, depending on the transactions they execute;
− reporting regularly to the supervisory authorities;
− regularly assessing non-compliance risk, mapping risks and fulfilling its duty to alert General Management;
− monitoring changes in the laws and regulations in coordination with the legal department in order to incorporate new standards into internal processes (general policies, charters, codes and operating procedures) and to inform employees and the various business lines of these changes;
− verifying, as a second-level control function, the implementation of administrative, legislative and regulatory provisions as well as professional or internal standards.
Compliance also covers the areas of financial security and data protection, which are, from an organizational viewpoint, managed respectively by the Head of Financial Security, who reports to the Director of Compliance, Financial Security and Investment Services Compliance (on financial security) and by the Data Protection Officer within the legal department.
In relation to training and raising employee awareness, the Human Resources Department training unit, in conjunction with Compliance, establishes and monitors employee training courses, which are the foundation of the compliance system. Mandatory training programs are organized for all new arrivals. In 2023, 100% of employees attended Regulatory and Compliance Overview training course.
Similarly, all employees concerned attended a training course on anti-money laundering and terrorist financing and 90% attended a Group training course on anti-corruption. Furthermore, other mandatory and regulatory training programs (particularly on real estate loans, consumer credit and the claims management system) were provided to the employees concerned.
17.2.6Remaining term to maturity
The following table details the remaining terms of Orange Bank’s financial assets and liabilities, calculated on the basis of the contractual maturity dates:
– maturity-by-maturity for amortizable transactions;
– for roll-over loans, since renewals cannot be presumed, the renewal dates are taken to be the final maturity dates;
– since the derivatives are interest rate swaps and forwards contract, they are not subject to any exchange of notional amounts. Their fair value has been broken down by maturity.
(in millions of euros) |
|
Note |
|
December 31, |
|
2024 |
|
2025 to |
|
2029 |
|
|
|
|
|
2023 |
|
|
|
2028 |
|
and beyond |
|
Investments securities |
|
17.1.1 |
|
3 |
|
|
|
3 |
|
|
|
Debt securities |
|
17.1.1 |
|
32 |
|
|
|
32 |
|
|
|
Investments at fair value |
|
17.1.1 |
|
|
|
|
|
|
|
|
|
Fixed-income securities |
|
17.1.1 |
|
225 |
|
18 |
|
86 |
|
120 |
|
Loans and receivables to customers |
|
17.1.1 |
|
2,394 |
|
778 |
|
928 |
|
688 |
|
Loans and receivables to credit institutions |
|
17.1.1 |
|
778 |
|
778 |
|
— |
|
— |
|
Other financial assets and derivatives |
|
|
|
109 |
|
35 |
|
4 |
|
70 |
|
Total financial assets |
|
|
|
3,542 |
|
1,609 |
|
1,054 |
|
879 |
|
Payable to customers |
|
17.1.2 |
|
2,601 |
|
2,601 |
|
— |
|
— |
|
Debts with financial institutions |
|
17.1.2 |
|
215 |
|
215 |
|
— |
|
— |
|
Deposit certificate |
|
17.1.2 |
|
219 |
|
199 |
|
20 |
|
— |
|
Other financial liabilities and derivatives |
|
|
|
158 |
|
77 |
|
3 |
|
78 |
|
Total financial liabilities |
|
|
|
3,193 |
|
3,092 |
|
23 |
|
78 |
|
17.2.7 Fair value of financial assets and liabilities of Orange Bank
(in millions of euros) |
|
|
|
|
|
December 31, 2023 |
||||||||
|
|
|
|
Classification |
|
Book |
|
Estimated |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
|
|
under IFRS 9 (1) |
|
value |
|
fair value |
|
and cash |
|
|
|
|
Loans and receivables(2) |
|
17.1.1 |
|
AC |
|
3,173 |
|
3,000 |
|
— |
|
3,000 |
|
— |
Financial assets at amortized cost |
|
17.1.1 |
|
AC |
|
225 |
|
209 |
|
209 |
|
— |
|
— |
Financial assets at fair value through profit or loss |
|
17.1.1 |
|
FVR |
|
38 |
|
37 |
|
37 |
|
— |
|
— |
Debt securities |
|
17.1.1 |
|
FVOCIR |
|
32 |
|
32 |
|
32 |
|
— |
|
— |
Investments securities |
|
17.1.1 |
|
FVOCI |
|
3 |
|
3 |
|
3 |
|
— |
|
— |
Cash and cash equivalent(3) |
|
17.1 |
|
AC |
|
79 |
|
79 |
|
79 |
|
— |
|
— |
Financial liabilities related to Orange Bank activities |
|
17.1.2 |
|
AC |
|
(3,173) |
|
(3,173) |
|
— |
|
(3,173) |
|
— |
Derivatives (net amount)(4) |
|
17.1.3 |
|
|
|
51 |
|
51 |
|
— |
|
51 |
|
— |
(1) |
"AC" stands for "amortized cost", "FVR " stands for "fair value through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be reclassified to profit or loss", "FVOCIR" stands for "fair value through other comprehensive income that may be reclassified to profit or loss". |
(2) |
Loans and receivables were remeasured using an actuarial method, taking into account the changes in interest rates. |
(3) |
Includes only cash. |
(4) |
The classification for derivatives depends on their accounting qualification. |
Consolidated Financial Statements 2023 |
F-137 |
(in millions of euros) |
|
|
|
|
|
December 31, 2022 |
||||||||
|
|
|
|
Classification |
|
Book value |
|
Estimated |
|
Level 1 and |
|
Level 2 |
|
Level 3 |
|
|
|
|
under IFRS |
|
|
|
fair value |
|
cash |
|
|
|
|
|
|
|
|
9(1) |
|
|
|
|
|
|
|
|
|
|
Loans and receivables |
|
17.1.1 |
|
AC |
|
2,708 |
|
2,708 |
|
— |
|
2,708 |
|
— |
Financial assets at amortized cost |
|
17.1.1 |
|
AC |
|
313 |
|
313 |
|
313 |
|
— |
|
— |
Financial assets at fair value through profit or loss |
|
17.1.1 |
|
FVR |
|
50 |
|
50 |
|
50 |
|
— |
|
— |
Debt securities |
|
17.1.1 |
|
FVOCIR |
|
296 |
|
296 |
|
296 |
|
— |
|
— |
Investments securities |
|
17.1.1 |
|
FVOCI |
|
3 |
|
3 |
|
3 |
|
— |
|
— |
Cash and cash equivalent(2) |
|
|
|
AC |
|
79 |
|
79 |
|
79 |
|
— |
|
— |
Financial liabilities related to Orange Bank activities |
|
17.1.2 |
|
AC |
|
(3,143) |
|
(3,143) |
|
— |
|
(3,143) |
|
— |
Derivatives (net amount)(3) |
|
|
|
|
|
54 |
|
54 |
|
— |
|
54 |
|
— |
(1) | "AC" stands for "amortized cost", "FVR " stands for "fair value through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be reclassified to profit or loss", "FVOCIR" stands for "fair value through other comprehensive income that may be reclassified to profit or loss". |
(2) | Includes only cash. |
(3) | The classification for derivatives depends on their accounting qualification. |
Consolidated Financial Statements 2023 |
F-138 |
(in millions of euros) |
|
|
|
|
|
December 31, 2021 |
||||||||
|
|
|
|
Classification |
|
Book |
|
Estimated |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
|
|
under IFRS 9(1) |
|
value |
|
fair value |
|
and cash |
|
|
|
|
Loans and receivables |
|
17.1.1 |
|
AC |
|
2,363 |
|
2,363 |
|
— |
|
2,363 |
|
— |
Financial assets at amortized cost |
|
17.1.1 |
|
AC |
|
387 |
|
387 |
|
387 |
|
— |
|
— |
Financial assets at fair value through profit or loss |
|
17.1.1 |
|
FVR |
|
73 |
|
73 |
|
73 |
|
— |
|
— |
Debt securities |
|
17.1.1 |
|
FVOCIR |
|
441 |
|
441 |
|
441 |
|
— |
|
— |
Investments securities |
|
17.1.1 |
|
FVOCI |
|
3 |
|
3 |
|
3 |
|
— |
|
— |
Cash and cash equivalent(2) |
|
|
|
AC |
|
360 |
|
360 |
|
360 |
|
— |
|
— |
Financial liabilities related to Orange Bank activities |
|
17.1.2 |
|
AC |
|
(3,188) |
|
(3,188) |
|
— |
|
(3,188) |
|
— |
Derivatives (net amount)(3) |
|
|
|
|
|
(58) |
|
(58) |
|
— |
|
(58) |
|
— |
(1) | "AC" stands for "amortized cost", "FVR " stands for "fair value through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be reclassified to profit or loss", "FVOCIR" stands for "fair value through other comprehensive income that may be reclassified to profit or loss". |
(2) | Includes only cash. |
(3) | The classification for derivatives depends on their accounting qualification. |
17.3 Orange Bank’s unrecognized contractual commitments
At December 31, 2023, Orange Bank is not aware of having entered into any commitment that may have a material effect on its current or future financial position, other than the commitments mentioned below.
Commitments given
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
Financing commitments (1) |
|
17 |
|
53 |
|
88 |
Guarantee commitments |
|
5 |
|
5 |
|
6 |
On behalf of financial institutions |
|
3 |
|
3 |
|
4 |
On behalf of customers |
|
2 |
|
2 |
|
2 |
Property lease commitments |
|
— |
|
— |
|
— |
Total |
|
22 |
|
59 |
|
94 |
(1) | Corresponds to credit commitments granted to customers, credits granted but not yet released and unused portion of financing granted. |
Commitments received
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
Received from financial institutions (1) |
|
1,284 |
|
932 |
|
871 |
Received from customers |
|
68 |
|
76 |
|
88 |
Total |
|
1,352 |
|
1,008 |
|
959 |
(1) | Corresponds to guarantees received from Crédit Logement to counter-guarantee real estate loans distributed in the amount of 831 million euros, and a financing commitment received from BNP Paribas in the amount of 450 million euros. |
Assets covered by commitments
(in millions of euros) |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
Assets pledged as security to lending financial institutions as guarantees for bank loans(1) |
|
126 |
|
726 |
|
848 |
Total |
|
126 |
|
726 |
|
848 |
(1)Corresponds to securities pledged by Orange Bank to financial lending institutions as guarantees for bank loans.
Note 18 Litigation
This note presents all of the significant litigation in which the Group is involved with the exception of litigation relating to disputes between Orange and the tax or social security administrations over tax, income taxes or social security contributions. These litigation are described, respectively, in Notes 6.2 and 10.3, as appropriate.
At December 31, 2023, the provisions for risks recorded by the Group for all its litigation (except those presented in Notes 6.2 and 10.3) amount to 283 million euros (387 million euros at December 31, 2022 and 405 million euros at December 31, 2021). Orange believes that any disclosure of the amount of provisions on a case-by-case basis for ongoing disputes could seriously harm the Group’s position. The balance and overall movements in provisions are presented in Note 5.2.
Consolidated Financial Statements 2023 |
F-139 |
France
Mobile services
– As part of the compensation proceedings between Digicel and Orange (implementation of anti-competitive practices on the mobile and fixed-to-mobile markets in the French Caribbean and French Guiana in the early 2000s and sanctioned by the French Competition Authority in 2009), the Commercial Court of Paris ordered Orange to pay Digicel 346 million euros after interests discounting. In June 2020, the Paris Court of Appeal reversed the discounting method applied to the damages set forth in the judgment rendered by the Commercial Court of Paris in December 2017 and ordered Orange to pay Digicel the sum of 249 million euros. Following this judgment, Orange has been refunded 97 million euros. In March 2023, the Supreme Court partially quashed and annulled the Paris Court of Appeal's ruling of June 17, 2020 on the specific point of the progressive nature of the basis on which interests are applied to compensate for the cash flow loss associated with the discounting of the principal loss. Orange referred the case to the Court of Appeal in March 2023. The proceedings are ongoing.
Fixed services
– Following the final decision of the French Competition Authority to fine Orange 350 million euros for having implemented four anti-competitive practices in the “enterprise” market segment on December 17, 2015, several players, including Adista, filed actions for damages against Orange. The proceedings before the Paris Commercial Court between Adista and Orange, which are now the only ones in progress in this case, are ongoing and are currently in the deliberation phase.
– In the dispute between Orange and SFR over fixed telephony retail offers for second homes, in September 2021 the Court of Appeal ordered SFR to return the sums awarded to it (i.e. 53 million euros). SFR then appealed again to the Supreme Court. In a ruling dated October 18, 2023, the Supreme Court dismissed SFR's appeal in its entirety. The case is now closed.
– In the dispute between Bouygues Telecom and Orange before the Commercial Court of Paris regarding the quality of service of Orange's wholesale offers on the copper local loop, Bouygues Telecom is seeking damages estimated at 85 million euros. Orange considers these claims to be unfounded.
– In December 2023, Iliad brought an action against Orange before the Commercial Court of Paris regarding the quality of service of Orange's wholesale offers on the copper local loop. Iliad is claiming 49 million euros. Orange considers these claims to be unfounded.
– On February 24, 2023, Bouygues Telecom and SDAIF (Société de Développement pour l'Accès à l'Infrastructure Fibre) brought an action against Orange before the Commercial Court of Paris regarding the mechanism for returning FTTH connections, which allows commercial telecom operators with access to Orange's fiber network to connect their end-customers themselves and have part of the cost of this connection returned to them when the line is taken over by a new commercial operator. Bouygues Telecom and SDAIF maintain that the mechanism put in place by Orange does not comply with the regulations and are claiming 125 million euros, revalued at the end of January 2024 at 152 million euros, corresponding, according to them, to the refunds due in respect of terminations of FTTH lines since the origin of the contract. Orange considers these allegations to be unfounded.
Other proceedings in France
– In June 2018, Iliad filed for summary judgment against Orange SA before the presiding judge of the Commercial Court of Paris, aiming to ban some of its mobile telephony offers proposing mobile handsets at attractive prices accompanied by subscription packages, on the grounds that they constituted consumer credit offers. In October 2020, Iliad had estimated its losses at 790 million euros, which it has since revalued at 810 million euros. The case is currently before the judges deciding on the merits of the case.
– Orange Bank is involved in a historical dispute in which a plaintiff is claiming a total of approximately 310 million euros for the financial loss it claims to have suffered. As the Group believes these claims to be unfounded and is strenuously challenging them, it has not recognized any financial liability.
– In the dispute between ASSIA and Orange regarding an alleged infringement of two patents relating to the dynamic xDSL line management, for which ASSIA was claiming a provision of 500 million euros in damages as compensation for its financial loss, which it estimated at 1,418 million euros, the Paris Judicial Court in September 2023 dismissed ASSIA's claims in their entirety. ASSIA has 3 months from the date of service of the judgment to lodge an appeal. The proceedings are ongoing.
– On November 7, 2023, ARCEP (Autorité de régulation des communications électroniques, des postes et de la distribution de la presse) fined Orange SA 26 million euros for failing to comply by April 14, 2021 with its commitment made in 2018 on the grounds of article L.33-13 of the French postal and electronic communication code to make 100% of homes and professional premises in the communes listed in its commitment connectable or connectable on demand to fiber. The penalty has been enforced, but Orange has also filed a complaint with the French Council of State to challenge the legitimacy and proportionality of the penalty.
United Kingdom
– In December 2018, the directors of former UK retailer Phones 4U, (which is in administration and no longer trading), filed a complaint against the three main UK mobile network operators, including EE, and their parent companies, including Orange. The Phones 4U claim (for an unquantified amount) is currently being challenged in the UK courts. By judgment dated November 10, 2023, the judge dismissed Phones 4U's claim in its entirety. The proceedings are ongoing.
Poland
– In 2015, the Polish operator P4 filed two compensation claims for a total of 630 million zlotys (145 million euros) jointly against three operators (including Orange Polska and Polkomtel), seeking compensation for the loss it claims to have suffered as a result of the retail rates that these three operators charge for calls to P4’s network.
Regarding the first compensation claim of P4’s polish operator opponents for 316 million zlotys (73 million euros), in January 2022 the Supreme Court dismissed Polkomtel’s appeal against the Court of Appeal’s decision which had reversed the judgment of the court dismissing P4’s claim and sent the decision back to the Court of First instance.
P4's second claim for 314 million zlotys (72 million euros) was joined to the first one in May 2023. The parties have requested the intervention of T-Mobile Polska in the proceedings, which it has accepted. The proceedings are ongoing.
Consolidated Financial Statements 2023 |
F-140 |
Africa & Middle East
– A number of shareholder disputes are ongoing between the joint venture comprising Agility and Orange, on the one hand, and its Iraqi co-shareholder in the capital of the Iraqi operator, Korek Telecom, on the other hand. These disputes, which concern various breaches of contractual documents, are the subject of pre-litigation proceedings and arbitral and judicial proceedings in various countries. In one of these disputes, on March 20, 2023, an arbitration court set up under the aegis of the International Chamber of Commerce made a final award: noting various breaches of the shareholders' agreement and tortious acts committed by the Iraqi co-shareholder (including collusion with the Iraqi telecommunications regulator (CMC) to obtain a decision to cancel the March 2011 partnership between the operator Korek Telecom, Agility and Orange), the arbitral court awarded 1.7 billion American dollars in damages for the benefit of the joint venture between Agility and Orange. In addition, on March 19, 2019, following an administrative decree adopted by the Iraqi Ministry of Trade and Industry, the General Register of companies in Erbil (Iraqi Kurdistan) restored the shareholding structure of Korek Telecom as it existed before Orange and Agility had acquired a stake. As a result, the registration of the Korek Telecom shares in the name of the original shareholders was imposed without any compensation or reimbursement of the amounts invested. Orange thus considers that it was unlawfully expropriated of its investment and, on March 24, 2019, sent a notice of dispute to the Republic of Iraq based on the Bilateral lnvestment Treaty between France and Iraq. In the absence of an amicable settlement with the Iraqi State, Orange submitted a request for arbitration with the International Center for the Settlement of Investment Disputes (ICSID) on October 2, 2020.
In order to provide its telecommunication services, the Group sometimes uses the fixed assets of other parties and the terms of use of these assets are not always formalized. The Group is sometimes subject to claims and might be subject to future claims in this respect, which could result in a cash outflow in the future. The amount of the potential obligations or future commitments cannot be measured with sufficient reliability due to the legal complexities involved.
Other than proceedings that may be initiated in respect of disputes between Orange and the tax or social security authorities over tax, income taxes and social security contributions (see Notes 6.2 and 10.3), there are no other administrative, legal or arbitration proceedings, including any proceedings that are pending, suspended or threatened, of which Orange is aware, which may have or have had in the last 12 months a material impact on the Company’s and/or Group’s financial position or profitability.
Note 19 Subsequent events
Completion of the aquisition of OCS and Orange Studio by Canal+ Group
On January 9, 2023 Orange and the Canal+ Group announced the signature of a memorandum of agreement for the acquisition by the Canal+ Group of all the shares held by Orange in the OCS pay TV package and in Orange Studio, the film and series co-production subsidiary. The Canal+ Group will become the sole shareholder of both companies following this transaction.
On January 12, 2024, the French Competition Authority authorized the transaction subject to commitments made by the Canal+ group.
On January 31, 2024, Orange and the Canal+ Group completed this transaction, which should result in a loss of around 170 million euros in the Orange Group’s consolidated accounts. Following this transaction, the Canal+ group becomes the sole shareholder of both companies.
As part of this transaction, Orange has granted Canal+ standard and specific guarantees.
Favorable decision of the Spanish Constitutional Court on a tax dispute in progress
Orange Espagne has initiated a dispute over the measure limiting the use of tax loss carryforwards that was introduced since 2016 which limits the amount of tax losses that can be offset to 25% of taxable income (compared with 70% previously). Orange Espagne is claiming a total of around 180 million euros for fiscal years 2017 to 2021.
At December 31, 2023, no asset was recognized in relation to this dispute.
On January 18, 2024, the Constitutional Court (high court in the country) ruled that this measure was illegal. The National Court (Audiencia Nacional) will confirm this decision in the context of the dispute initiated by Orange Espagne.
Tax dispute in Spain on the business activity tax (IAE « Impuesto de Actividades Económicas »)
Orange Espagne contests the conformity of business activity tax (« Impuesto de Actividades Económicas ») with the European directives and claims the restitution of the amounts paid for this tax for the years 2003-2021. Orange Espagne has thus initiated various disputes relating to this tax.
On 5 February 2024, a favorable decision for Orange Espagne was issued by the National Court (Audiencia National) ordering the tax authorities to reimburse an amount of 174 million euros (including interest) for the years 2012 to 2018. The administration may appeal this decision within 30 days of the decision.
Disputes for years 2003-2011 and 2019-2021 remain open to date and follow specific procedures.
Note 20 Main consolidated entities
At December 31, 2023, the scope of consolidation consists of 387 entities.
The main changes in the scope of consolidation in 2023 are presented in Note 3.2.
Regarding subsidiaries with non-controlling interests:
– the financial statements for the groups Orange Polska, Jordan Telecom, Orange Belgium, Sonatel and Orange Côte d'Ivoire are published, respectively, at the Warsaw Stock Exchange, the Amman Stock Exchange, the Brussels Stock Exchange and the Regional Stock Exchange (BRVM), those companies being quoted;
– the other subsidiaries do not make up a material proportion of Orange’s financial aggregates and their financial information is not presented in the Notes to Consolidated Financial Statements of the Orange's group.
Consolidated Financial Statements 2023 |
F-141 |
Pursuant to Regulation No. 2016-09 of December 2, 2016 of the ANC (Autorité des normes comptables financières - French accounting standards authority), the full list of companies included in the scope of consolidation, companies not included in the scope of consolidation and non-consolidated equity securities is available on the Group’s website (https://gallery.orange.com/finance#lang=en&v=5c6a1b51-a537-454e-b2d3-6e4664be2c6a)
The list of the main operating entities shown below was determined mainly based on their contributions to the following financial indicators: revenue and EBITDAaL.
Company |
|
|
|
Country |
Orange SA |
|
Parent company |
|
France |
Main consolidated entities |
|
|
|
|
France |
|
% Interest |
|
Country |
Orange SA - France Business Unit |
|
100.00 |
|
France |
Orange Concessions and its subsidiaries (1) |
|
50.00 |
|
France |
Orange Store |
|
100.00 |
|
France |
|
|
|
|
|
Europe |
|
% Interest |
|
Country |
Orange Belgium |
|
78.32 |
|
Belgium |
Orange Espagne and its subsidiaries |
|
100.00 |
|
Spain |
Orange Moldova |
|
94.45 |
|
Moldova |
Orange Polska and its subsidiaries |
|
50.67 |
|
Poland |
Orange Romania |
|
100.00 |
|
Romania |
Orange Romania Communications and its subsidiary |
|
54.01 |
|
Romania |
Orange Slovensko |
|
100.00 |
|
Slovakia |
VOO SA and its subsidiaries |
|
58.74 |
|
Belgium |
|
|
|
|
|
Africa & Middle-East |
|
% Interest |
|
Country |
Jordan Telecom and its subsidiaries |
|
51.00 |
|
Jordan |
Médi Telecom and its subsidiaries (2) |
|
49.00 |
|
Morocco |
Orange Botswana |
|
73.68 |
|
Botswana |
Orange Burkina Faso |
|
85.80 |
|
Burkina Faso |
Orange Cameroon |
|
94.40 |
|
Cameroon |
Orange Côte d'Ivoire and its subsidairies |
|
72.50 |
|
Côte d'Ivoire |
Orange Egypt for Telecommunications and its subsidiaries |
|
99.96 |
|
Egypt |
Orange Guinée (3) |
|
37.60 |
|
Guinea |
Orange Mali (3) |
|
29.38 |
|
Mali |
Orange RDC |
|
100.00 |
|
Congo |
Sonatel (3) |
|
42.33 |
|
Senegal |
|
|
|
|
|
Orange Business |
|
% Interest |
|
Country |
Orange SA - Orange Business Unit |
|
100.00 |
|
France |
Orange Business Services SA and its subsidiaries |
|
100.00 |
|
France |
Orange Business Services Participations and its subsidiaries |
|
100.00 |
|
France |
Orange Cyberdefense and its subsidiaries |
|
100.00 |
|
France |
Globecast Holding and its subsidiaries |
|
100.00 |
|
France |
|
|
|
|
|
International Carriers & Shared Services |
|
% Interest |
|
Country |
Orange SA - IC&SS Business Unit |
|
100.00 |
|
France |
FT IMMO H |
|
100.00 |
|
France |
OCS |
|
66.67 |
|
France |
Orange Brand Services |
|
100.00 |
|
United Kingdom |
|
|
|
|
|
Mobile Financial Services |
|
% Interest |
|
Country |
Orange Bank |
|
100.00 |
|
France |
|
|
|
|
|
Totem |
|
% Interest |
|
Country |
Totem France |
|
100.00 |
|
France |
Totem Spain |
|
100.00 |
|
Spain |
(1) | Orange Concessions is consolidated using the equity method. |
(2) | Orange SA controls and consolidates Médi Telecom and its subsidiaries through a 49% equity interest and a 1.1% usufruct. |
(3) | Orange SA controls Sonatel and its subsidiaries, which are fully consolidated, under the terms of the shareholders' agreement as supplemented by the Strategic Committee Charter dated July 13, 2005 (Orange SA owns and controls 100% of Orange MEA, which owns and controls 42.33% of Sonatel Group). |
Consolidated Financial Statements 2023 |
F-142 |
Note 21 Auditors’ fees
As required by Decree no. 2008-1487 of December 30, 2008, the following table shows the amount of fees of the auditors of the parent company and their partner firms in respect of the fully consolidated subsidiaries.
(in millions of euros) |
|
Audit and related services |
|
Other services |
|
Total |
|
||||||||
|
|
Statutory audit fees, certification, |
|
Services required |
|
Sub-total |
|
rendered by |
|
|
|
||||
|
|
auditing of the accounts |
|
by the law |
|
|
|
auditors' networks to |
|
|
|
||||
|
|
o/w issuer |
|
o/w issuer |
|
|
|
fully-consolidated |
|
|
|
||||
Deloitte |
|
|
|
|
|
|
|
|
|
|
|
subsidiaries |
|
|
|
2023 |
|
11.4 |
|
4.8 |
|
— |
|
— |
|
11.4 |
|
0.2 |
|
11.6 |
|
|
% |
98 |
% |
41 |
% |
— |
% |
— |
|
98 |
% |
2 |
% |
100 |
% |
2022 |
|
8.8 |
|
4.6 |
|
— |
|
— |
|
8.8 |
|
0.3 |
|
9.1 |
|
|
% |
96 |
% |
50 |
% |
— |
% |
— |
|
97 |
% |
3 |
% |
100 |
% |
2021 |
|
8.2 |
|
4.6 |
|
— |
|
— |
|
8.2 |
|
0.1 |
|
8.4 |
|
|
% |
98 |
% |
55 |
% |
— |
% |
— |
|
99 |
% |
1 |
% |
100 |
% |
KPMG |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
11.7 |
|
4.5 |
|
0.4 |
|
— |
|
12.1 |
|
0.7 |
|
12.8 |
|
|
% |
91 |
% |
35 |
% |
3 |
% |
— |
|
95 |
% |
5 |
% |
100 |
% |
2022 |
|
10.9 |
|
4.3 |
|
0.1 |
|
— |
|
11.0 |
|
0.9 |
|
11.9 |
|
|
% |
92 |
% |
36 |
% |
1 |
% |
— |
|
92 |
% |
8 |
% |
100 |
% |
2021 |
|
9.9 |
|
4.4 |
|
0.2 |
|
0.2 |
|
10.1 |
|
0.4 |
|
10.5 |
|
|
% |
94 |
% |
42 |
% |
2 |
% |
2 |
% |
96 |
% |
4 |
% |
100 |
% |
EY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2021 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
0.4 |
|
0.4 |
|
|
% |
— |
|
— |
|
— |
|
— |
|
— |
|
100 |
% |
100 |
% |
The services provided by the statutory auditors were authorized pursuant to the rules adopted by the Audit Committee and updated each year since October 2016. No fiscal services were provided by the statutory auditors.
Consolidated Financial Statements 2023 |
F-143 |
Exhibit 1
By-laws
As amended on May 19, 2022
ARTICLE 1 - FORM
Orange is a public limited company (société anonyme) governed by France's law on public limited companies and subject to the specific laws governing the Company, particularly Law 90-568 of July 2, 1990 (as amended) and these Bylaws.
ARTICLE 2 - CORPORATE SCOPE AND PURPOSE
The Company's corporate scope, in France and abroad, specifically in accordance with the French Postal and Electronic Communications Code, shall be:
• to provide all electronic communication services in domestic and international relations;
• to carry out activities related to public service and, in particular, to provide, where applicable, a universal telecommunications service and other mandatory services;
• to establish, develop and operate all electronic communications networks open to the public necessary for providing said services and to interconnect those networks with other French and foreign networks open to the public;
• to provide all other services, facilities, handset equipment, electronic communications networks, and to establish and operate all networks distributing audiovisual services, and especially radio, television and multimedia broadcasting services;
• to set up, acquire, rent or manage all real-estate or other assets and businesses, to lease, install and operate all structures, businesses, factories and workshops related to any of the purposes defined above;
• to obtain, acquire, operate or transfer all processes and patents related to any of the purposes defined above;
• to participate directly or indirectly in all transactions that may be related to any of the purposes defined above, through the creation of new companies or businesses contribution, tender, subscription or purchase of securities or corporate rights, acquisitions of interests, mergers, partnerships, or by any other means;
• and, more generally, all industrial, commercial and financial transactions, involving securities or fixed assets, that may be related directly or indirectly, in whole or in part, to any of the aforementioned purposes, or to any similar or related purposes, or to any and all purposes that may enhance or develop the Company's business.
The Company's corporate purpose shall be as follows:
"As a trusted partner, Orange gives everyone the keys to a responsible digital world."
ARTICLE 3 - COMPANY NAME
The Company's name shall be: "Orange."
ARTICLE 4 - REGISTERED OFFICE
The registered office shall be located at 111, quai du Président Roosevelt, Issy-les-Moulineaux (92130), France.
The Board of Directors shall have the authority to transfer the Company's registered office, under the conditions prescribed by law.
ARTICLE 5 - TERM
The term of the Company shall be ninety-nine years commencing on December 31, 1996, unless the Company is dissolved earlier or its term is extended.
ARTICLE 6 - SHARE CAPITAL
The share capital shall be 10,640,226,396 euros, divided into 2,660,056,599 fully paid-up shares, with a par value of four euros per share.
ARTICLE 7 - CHANGE IN SHARE CAPITAL
The share capital may be increased, reduced or redeemed as provided by law.
ARTICLE 8 - PAYING FOR SHARES
In a share capital increase, shares issued for cash shall be paid up - at the time of subscription - in the minimum proportion required by law. Partly paid-up shares shall be in registered form until paid up in full. The remainder of the consideration shall be paid up in one or more installments as decided by the Board of Directors within a period not exceeding five years from the date on which the capital increase was completed.
Subscribers shall be informed of all calls for payment by registered letter with return receipt sent at least fifteen days prior to each installment due date. Installments may be made at the registered office or at any other location indicated for that purpose.
A shareholder's failure to make payments as called during the periods set by the Board of Directors shall result in any sums due automatically incurring interest at the legal interest rate, as from their due date, without prejudice to any other remedies or penalties provided by law, such as, in particular, the Company having the right to request the sale of securities for which payments were not made when due.
ARTICLE 9 - LEGAL FORM OF SHARES
Shares shall be either in registered or bearer form, at the discretion of the shareholder, unless otherwise specified by law.
The Company may make use at any time, in particular by means of request to the central depository maintaining the securities issuance account, of all legal and regulatory provisions allowing the disclosure of the identity of the holders of securities conferring immediately or in the future the right to vote in the Company's Shareholders' Meetings and the number of shares held by each of them, as well as the restrictions to which the shares may be subject, including with respect to holders of similar securities outside the territory of France.
In addition to the legal obligation to inform the Company about holding certain percentages of share capital or voting rights, any individual or legal entity, acting alone or in concert with others, who acquires, directly or indirectly, as defined by Articles L. 233-7 et seq. of the French Commercial Code, a number of shares, voting rights or securities representing shares equal to 0.5% of the share capital or voting rights in the Company shall be required, no later than prior to market close on the fourth trading day after this threshold has been crossed, to disclose to the Company by registered letter with return receipt, the total number of shares, voting rights and securities giving access to the capital that such individual or entity holds.
A new disclosure shall be required under the conditions indicated above every time another 0.5% threshold is reached or crossed, whether exceeded or fallen below, for any reason whatsoever, including beyond the 5% threshold.
Failure to comply with the above requirements shall result for the relevant shareholder(s), under the conditions and within the limits set by law, in the suspension of voting rights attached to the securities exceeding the thresholds subject to disclosure, provided that one or more shareholders holding at least 0.5% of the Company's share capital or voting rights so request at the Shareholders' Meeting.
ARTICLE 10 - SALE AND TRANSFER OF SHARES
The shares shall be freely negotiable, subject to applicable legal and regulatory provisions. They shall be registered in a share account and can be transferred from one account to another by means of a transfer order.
ARTICLE 11 - RIGHTS AND OBLIGATIONS ATTACHED TO SHARES
Each share shall entitle its holder to a portion of the corporate profits and assets proportional to the amount of capital represented by the share. Furthermore, each share shall entitle its holder to vote and be represented in the Shareholders' Meetings in accordance with provisions of the law and of the Bylaws. Ownership of one share automatically implies adherence to the Bylaws and the decisions of the Shareholders' Meeting.
Shareholders shall be liable for losses only up to the amount of their contributions.
The heirs, creditors, assigns or other representatives of a shareholder may not ask for the Company's assets and securities to be sealed, nor request their division or sale by auction, nor interfere in the management of the Company; they must, in exercising their rights, abide by the corporate accounts and decisions of the Shareholders' Meeting.
Whenever it is necessary to own several shares to exercise any right whatsoever, in the event of an exchange, reverse split or allotment of shares, or as a consequence of the capital being increased or reduced, a merger or other corporate action, the owners of single shares, or of a number of shares lower than the required number, may exercise these rights only on the condition that they personally undertake to combine and, as the case may be, purchase or sell the necessary shares.
ARTICLE 12 - INDIVISIBILITY OF SHARES - BENEFICIAL OWNERSHIP
1. The Company considers the shares indivisible.
Co-owners of indivisible shares shall be represented at Shareholders' Meetings by one of the co-owners or by a single proxy. In the event of disagreement, the proxy shall be appointed by a court at the request of first co-owner to file a petition.
2. The voting right attached to the share shall be exercised by the beneficial owner at Ordinary Shareholders' Meetings and by the legal owner at Extraordinary Shareholders' Meetings.
ARTICLE 13 - BOARD OF DIRECTORS
1. The Company shall be managed by a Board of Directors with at least twelve and no more than twenty-two members, including:
- three directors representing the employees of the Company and those of its direct or indirect subsidiaries (within the meaning of Article L. 225-27 of the French Commercial Code) with registered offices located on French territory, either from among the pool of engineers, managers and other supervisors, or from among the pool of other employees; the distribution of seats by eligible pool shall be based on the structure of the workforce as recorded on July 1 of the year when the vote is taken, with two representatives for the pool representing more than half of the employees and one representative for the other pool;
- one director representing employee shareholders (or investors in a company mutual fund (FCPE) holding shares of the Company), appointed by the Shareholders' Meeting.
In the event of a vacancy, by reason of death or resignation, of one or more seats of directors appointed by the Shareholders' Meeting, other than the director representing employee shareholders, the Board of Directors may, between two Shareholders' Meetings, make appointments on a provisional basis subject to the approval of the next Ordinary Shareholders' Meeting, within the limits and conditions provided by law.
2. The method of voting used to fill each directorship representing employees shall be the method provided in the applicable legal and regulatory provisions, particularly Article L. 225-28 of the French Commercial Code and Decree 2004-977 of September 17, 2004.
In particular, the election shall take place:
- Where there is only one seat to be filled from one pool, by a two-round majority vote in that pool; and
- In the other pool, by the largest-remainder method proportional representation system without vote-splitting.
Employees who meet the conditions provided for by law shall be eligible to vote and stand for election. Where there is only one seat to be filled in a pool, each candidacy must include, in addition to the name of the candidate, the name of their replacement in the event of a vacancy for any reason whatsoever. In the other pool, each list of candidates for the election of representatives must include at least four names.
The term of office for directors representing employees shall be four years.
Newly elected directors representing employees shall assume office upon the expiration of the term of office of their predecessors.
Should a director representing employees lose their employee status, their term of office shall be terminated. The vacant seat shall be filled as provided for in Article L. 225-34 of the French Commercial Code.
Elections shall be organized so that a second round can take place before the end of the term of office of outgoing Board members.
For each election, the Board of Directors shall approve the list of subsidiaries and shall set the election date in accordance with the time requirements listed below.
The time requirements for each election shall be as follows:
• the election date must be made public at least eight weeks before the vote;
• the list of electors must be made public at least six weeks before the vote;
• candidacies must be registered at least five weeks before the vote; note that candidates must be members of the pool they wish to represent;
• the list of candidates must be made public at least four weeks before the vote;
• the documents needed for mail - in votes must be sent out at least three weeks before the vote.
If there are no candidacies in one of the pools, the corresponding seat(s) shall remain vacant until the next election of directors representing employees.
Votes can be cast using electronic or paper ballots.
When votes are cast using paper ballots, voting shall take place over the course of a single day, at the place of work and during normal working hours. However, the following persons shall be eligible to use mail-in ballots:
• employees who are expected to be absent on the day of the vote;
• employees who, by virtue of the nature or terms of their employment, are not located in the vicinity of the polling station to which they are assigned;
• employees working at sites where there is no polling station.
For votes cast by electronic and/or paper ballots, any methods used to organize and conduct the election of directors representing employees that are not specified by applicable legal or regulatory provisions, or by these Bylaws, must be approved by the Board of Directors, or by the Chairperson of the Board acting upon delegation, implementing, where necessary, any Group-wide agreement that may have been signed with respect to the methods used in the election in businesses within the scope referred to in the first bullet under 1. above.
3. The director representing the employee shareholders shall be appointed, pursuant to applicable legal and regulatory provisions and to these Bylaws, by the Shareholders' Meeting upon motion made by the shareholders referred to in Article L. 225-102 of the French Commercial Code. Note that registered shares directly held by employees and whose free allocation was authorized by Extraordinary Shareholders' Meetings of the Company prior to the publication of Law 2015-990 of August 6, 2015 on growth, activity and equal economic opportunities shall be taken into account when determining the proportion of share capital held by employees pursuant to the aforesaid Article L. 225-102.
Only one candidate shall be put before the Shareholders' Meeting. The candidate for the office of director representing employee shareholders shall be appointed through a single consultation of all shareholders referred to in Article L. 225-102 of the French Commercial Code, including any company mutual funds (fonds communs de placement d'entreprise - FCPEs) in which more than one third of assets are comprised of Company shares.
The conditions for organizing and conducting this consultation, in particular with regard to the timetable for appointing the candidate, must be approved by the Board of Directors or, by delegation, by its Chairperson.
Employees of the Company, or of companies and groupings related to it within the meaning of Article L. 225-180 of the French Commercial Code, who are employee shareholders or members of the supervisory board of one of the above-mentioned FCPEs, shall be eligible. When putting themselves forward for election, candidates must provide the name of their replacement in the event of vacancy.
The term of office of the director representing the employee shareholders and the terms and conditions of the director's office shall be identical to those of the directors appointed by the Shareholders' Meeting in accordance with Article L. 225-18 of the French Commercial Code. However, in the event of loss of employee status, the director representing the employee shareholders shall be deemed to have automatically resigned and their term of office shall expire automatically.
In the event of any vacancy for any reason whatsoever in the office of director representing the employee shareholders, the replacement shall immediately take up the position for the remaining term of office of their predecessor. In case of a replacement vacancy, a new consultation within the conditions set by the Bylaws shall be organized in a timely manner.
4. In the event of a vacancy for whatever reason in one or more offices of directors representing employees, and for which replacement pursuant to Article L. 225-34 of the French Commercial Code has not been possible, the Board of Directors, duly composed of the remaining members, may validly meet and deliberate prior to the election of the new director(s) representing employees, who shall be considered in office for the purposes of determining the minimum number of directors pursuant to paragraph 1 above. This procedure shall also apply in the event that the seat of the director representing employee shareholders becomes vacant, for whatever reason.
5. The Board may appoint a secretary, who need not be a Board member.
6. The term of office for directors shall be four years.
The duties of the directors, apart from those representing employees and, as applicable, those representing the French government, shall cease at the end of the Shareholders' Meeting called to approve the financial statements for the previous fiscal year, held during the year when their terms of office expire.
7. The Shareholders' Meeting shall set the amount of the attendance fees paid to directors.
The Board of Directors, after express deliberation, shall allocate the fees among the directors as it sees fit, subject to applicable legal and regulatory provisions.
Expenses incurred by directors during their terms of office are reimbursed by the Company upon presentation of documented proof of payment.
8. Each director appointed by the Shareholders' Meeting (except for those representing employee shareholders or appointed on proposal of the French government) must own at least one thousand Company shares.
9. The Board of Directors may invite members of the business, or individuals outside the business, to attend Board meetings without granting them a vote.
10. Individuals invited to attend Board meetings shall be bound by the same rules of discretion as the directors themselves.
11. The Board of Directors may appoint, on motion made by its Chairperson, one or more non-voting directors chosen from among the shareholders, whether individuals or legal entities, or from outside their number.
Their terms of office shall be set by the Board of Directors but may not exceed four years.
Non-voting directors shall always be eligible for reelection. The Board of Directors may terminate their appointment at any time.
In the event of a non-voting director's death, dismissal or termination of office for any other reason, the Board of Directors may appoint a replacement for the remainder of their term of office.
Non-voting directors are invited to attend Board meetings as observers and may be consulted by the Board or by its Chairperson.
A non-voting director's office shall be unpaid. Nevertheless, the Board of Directors may authorize reimbursement of expenses that non-voting directors incur on behalf of the Company.
ARTICLE 14 - CHAIRPERSON OF THE BOARD OF DIRECTORS - APPOINTMENT
The Board of Directors shall elect its Chairperson from among its individual members. The Chairperson shall be elected for their entire directorship and shall be eligible for reelection.
The age limit for holding the office of Chairperson of the Board of Directors shall be set at 70 years; should this age be reached by the Chairperson while in office, the age limit shall be extended in order to allow them to carry out their duties until the end of their term of office.
ARTICLE 15 - DELIBERATIONS OF THE BOARD OF DIRECTORS
1. The Board of Directors shall meet as often as required in the interest of the Company, when called to meeting by its Chairperson or, should the latter be unable to do so, by the Lead Director, whose appointment may be decided by the Board of Directors in accordance with its internal rules.
The meeting shall be held at the registered office or at any other location indicated in the notice of meeting. The notice of meeting must, in principle, be sent out at least five days in advance by mail, telegram, telex, fax or email. The notice shall include the meeting agenda. It can also be sent out immediately prior to the meeting and by any means, including verbally, in the event of an emergency.
Meetings of the Board of Directors shall be chaired by the Chairperson of the Board or, in the Chairperson's absence, by the Lead Director or, failing that, by the oldest director present.
2. The Board may not validly deliberate unless a quorum of at least half of its members are present or, as the case may be, are considered present in accordance with 4. below.
Decisions shall be made by a majority of members present, deemed to be present, or represented. In the event of a tie, the meeting's Chairperson shall cast the deciding vote.
3. An attendance sheet shall be kept and must be signed by the directors attending the Board meeting. It records any attendance of directors by means of videoconferencing or telecommunication. Board deliberations shall be recorded in minutes prepared in compliance with applicable legal provisions and signed by the meeting's Chairperson and by one director or, if the meeting's Chairperson is unable to do so, by two directors. Copies or extracts of the minutes may be certified by the Chairperson of the Board of Directors, the Chief Executive Officer, the Delegate Chief Executive Officers, the director temporarily delegated to the duties of Chairperson, or a person duly authorized for that purpose.
4. The Board of Directors, in accordance with statutory and regulatory requirements, may prepare internal rules setting the terms and conditions under which directors who attend a meeting of the Board by means of videoconferencing or telecommunication allowing their identification and ensuring they can participate effectively, are considered present for the purpose of calculating the quorum and the majority. The form and terms of application of these internal rules are set forth by decree.
5. The Board of Directors may also make the following decisions within its scope by written consultation with Board members:
- temporary appointment of members of the Board of Directors;
- authorization for securities, endorsements and guarantees;
- amendments required to bring the Bylaws into compliance with legislative and regulatory provisions;
- notice of Shareholders' Meetings; and
- transfer of the registered office within the same territorial department.
ARTICLE 16 - POWERS OF THE BOARD OF DIRECTORS
The Board of Directors shall determine the guidelines for the Company's activities and ensure their implementation, in accordance with its corporate interest, while taking into consideration the social and environmental challenges of its business. It shall also take into consideration, if necessary, the Company's corporate purpose defined in application of Article 1835 of the French Civil Code. Subject to the powers expressly given to Shareholders' Meetings and to the Chairperson of the Board of Directors, and within the limits of the corporate scope, the Board shall review all issues concerning the smooth operation of the Company and shall settle, through its deliberations, the matters that concern it.
The Board of Directors shall undertake such checks and verifications it considers appropriate.
The Board of Directors may delegate authority to any person it deems fit, even to a person from outside the Company, whether in France or abroad, within the limits of the law and these Bylaws.
ARTICLE 17 - POWERS OF THE CHAIRPERSON OF THE BOARD OF DIRECTORS
The Chairperson of the Board of Directors shall organize and direct the Board's work and shall report thereon to the Shareholders' Meeting. The Chairperson shall ensure the proper functioning of the Company's governing bodies and, in particular, that the directors are able to carry out their duties.
In accordance with Articles 29-1 and 29-2 of Law 90-568 of July 2, 1990, as amended, the Chairperson of the Board of Directors shall have authority to appoint and manage the government employees within the Company.
ARTICLE 18 - GENERAL MANAGEMENT
The general management of the Company shall be the responsibility of either the Chairperson of the Board of Directors, who shall then hold the title of Chairperson and Chief Executive Officer, or, as applicable, of another natural person appointed by the Board of Directors and holding the title of Chief Executive Officer.
The Board of Directors shall choose between these two forms of general management and inform the shareholders and third parties as required by applicable laws and regulations.
The Board of Directors' vote on this choice shall be made in accordance with the quorum and majority rules referred to in Article 15(2).
The form selected - and any subsequent alternative - shall be valid until the Board of Directors decides otherwise, ruling under the same majority conditions; in any event, the Board of Directors must make a decision relating to the form of general management at the time it appoints or re-appoints its Chairperson or its Chief Executive Officer, if this latter role is separate from that of Chairperson.
Where the Board of Directors elects to separate the roles of Chairperson and Chief Executive Officer, it shall appoint the Chief Executive Officer from among its members or from outside their number, establishing the term of office, compensation and, where necessary, any limitations to powers.
The age limit for exercising the duties of Chief Executive Officer shall be set at 70 years. If this age limit is reached by an incumbent, the Chief Executive Officer shall be considered as having resigned from office.
The Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer, shall be granted the broadest powers to act on behalf of the Company in any circumstances. Such powers shall be exercised within the limits of the corporate scope and subject to the powers expressly assigned by law to Shareholders' Meetings, to Boards of Directors and, where the roles of Chairperson of the Board of Directors and Chief Executive Officer are separate, to the Chairperson of the Board of Directors.
The Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer, shall represent the Company in its relations with third parties. The Company shall likewise be bound by actions of the Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer, which do not fall within the corporate scope, unless the Company can prove that the third party knew that the action was outside of the limits of that scope, or that the third party could not have been unaware of it under the circumstances, with the understanding that the mere publication of the Bylaws shall not be sufficient to constitute such proof.
ARTICLE 19 - DELEGATED GENERAL MANAGEMENT
At the proposal of the Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer, the Board of Directors may appoint one or more individuals with the title of Delegate Chief Executive Officer, who shall be responsible for assisting the Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer.
The maximum number of Delegate Chief Executive Officers shall be set at five.
The age limit for exercising the duties of Delegate Chief Executive Officer shall be set at 70 years. If this age limit is reached by an incumbent, the Delegate Chief Executive Officer in question shall be considered as having resigned from office.
In agreement with the Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer, the Board of Directors shall determine the extent and duration of the powers granted to the Delegate Chief Executive Officers.
With regard to third parties, the Delegate Chief Executive Officer(s) shall have the same powers as the Chairperson and Chief Executive Officer or, as applicable, the Chief Executive Officer.
The Board of Directors shall determine the compensation of the Delegate Chief Executive Officers.
If the Chairperson and Chief Executive officer or, as applicable, the Chief Executive Officer, ceases to exercise or is prevented from exercising the role's duties, the Delegate Chief Executive Officers shall, unless otherwise decided by the Board, remain in office and retain their powers until the appointment of a new Chairperson and Chief Executive Officer or, as applicable, a new Chief Executive Officer.
ARTICLE 20 - STATUTORY AUDITORS
The Company's financial statements shall be audited by two Statutory Auditors appointed and exercising their duties in compliance with the law.
Two alternate Statutory Auditors shall be appointed to replace the principal Statutory Auditors in the event of the resignation or death of one or both of the principals or their refusal or inability to serve.
ARTICLE 21 - SHAREHOLDERS' MEETINGS
1. Shareholders' Meetings shall be composed of all shareholders whose shares are paid up and for whom a right to attend Shareholders' Meetings has been established by registration of the shares in an account in the name either of the shareholder or of an intermediary registered on the shareholder's behalf where a shareholder is not resident in France, by midnight (Paris time) on the second business day preceding the meeting.
The shares must be registered within the time limit specified in the preceding paragraph either in an account in the shareholder's own name maintained by the Company, or in the bearer share accounts maintained by the authorized intermediary.
If it sees fit to do so, the Board of Directors may distribute personalized admission cards to the shareholders and require them to produce the cards at meetings.
Shareholders attending via videoconferencing or other means of telecommunication which meet legal and regulatory conditions and allow identification shall be deemed present for the calculation of quorum and majority at Shareholders' Meetings.
The Board of Directors shall organize, in accordance with legal and regulatory requirements, the attendance and vote of the Shareholders' Meeting, assuring, in particular, the effectiveness of the means of identification.
Any shareholder may, in accordance with legal and regulatory requirements, vote without attending the Meeting or grant a proxy to any other physical person or legal entity of the shareholder's choice.
Shareholders may, in accordance with legal and regulatory requirements, send their vote or proxy, either by hard copy or via electronic means of telecommunication, until 3:00 pm (Paris time) the day before the Shareholders' Meeting. Transmission methods shall be set forth by the Board of Directors in the notice of meeting and the notice to attend.
Shareholders sending in their vote within the time limit specified under this Article, by means of the form provided by the Company to shareholders, shall be deemed present or represented at the meeting.
The forms for sending in a vote or a proxy, as well as the certificate of attendance, can be duly signed and completed in electronic format under the conditions provided for in the applicable laws and regulations. For this purpose, the form can be electronically signed and submitted directly on the website set up by the organizer of the Shareholders' Meeting.
Shareholders who are not resident in France may be represented at a Shareholders' Meeting by a registered intermediary who may participate subject to legal requirements.
2. Shareholders' Meetings shall be called by the Board of Directors, or, failing that, by the Statutory Auditors, or by any person empowered for this purpose. Meetings shall be held at the registered office or at any other location indicated in the notice of meeting.
Subject to exceptions provided by law, the notice of meeting must be given at least 15 days before the date of the Shareholders' Meeting. Where the Shareholders' Meeting was not able to transact business due to the lack of the required quorum, a second meeting and, if applicable, a second postponed meeting, must be called at least 10 days in advance in the same manner as the first meeting.
3. The Shareholders' Meeting agenda shall be included in the notice of meeting and approved by the author of the notice.
The Shareholders' Meeting may discuss only the items of business on the agenda.
One or more shareholders representing at least the percentage of share capital required by law, and acting in accordance with legal requirements and within applicable time limits, may request that items of business or draft resolutions be included on the agenda.
An attendance sheet containing the information required by law shall be kept at each Shareholders' Meeting.
Shareholders' Meetings shall be chaired by the Chairperson of the Board of Directors or, in the Chairperson's absence, by a Board member appointed for this purpose by the Board of Directors. Failing this, the meeting itself shall elect a Chairperson.
Provided they are present and accept such duties, vote counting shall be performed by the two members of the Shareholders' Meeting who represent, either on their own behalf or as proxies, the greatest number of votes.
The meeting's officers ( "le bureau") shall name a secretary, who need not be a shareholder.
The duties of the meeting's officers shall be to verify, certify and sign the attendance sheet, ensure the proper conduct of discussions, settle any incidents occurring during the meeting, check the votes cast and ensure their legality, and ensure that meeting minutes have been prepared.
The minutes shall be prepared and copies or excerpts of the deliberations shall be issued and certified as required by law.
4. Ordinary Shareholders' Meetings shall be those called to make any and all decisions that do not amend the Bylaws. They are called at least once a year within six months of each fiscal year-end in order to approve the Statutory and Consolidated Financial Statements for the fiscal year in question or, in the case of postponement, within the period established by court order.
Upon first notice, the Meeting shall only validly deliberate if the shareholders present or represented by proxy or voting by mail represent at least one fifth of the shares entitled to vote. Upon second notice, no quorum shall be required. Decisions shall be made by a majority of votes held by the shareholders present, represented by proxy, or voting by mail.
5. Only the Extraordinary Shareholders' Meeting shall be authorized to amend any and all provisions of the Bylaws. The Meeting may not, however, increase shareholder commitments, except for properly executed transactions resulting from a reverse stock split.
Subject to the legal provisions governing capital increases by incorporation of reserves, profits or premiums, the Extraordinary Shareholders' Meeting shall only validly deliberate if the shareholders present, represented by proxy or voting by mail represent at least one fourth of all shares entitled to vote when called for the first time, or one fifth when called for the second time. If the latter quorum is not reached, the second Shareholders' Meeting may be postponed to a date no later than two months after the date for which it was called.
Subject to the same condition, the second Shareholders' Meeting shall make decisions by a two-thirds majority of the shareholders present, represented by proxy, or voting by mail.
ARTICLE 22 - SHAREHOLDERS' RIGHT TO OBTAIN INFORMATION
All shareholders shall be entitled to access the documents that give them full knowledge of relevant facts and enable them to make an informed judgment concerning the management and operation of the Company.
The nature of these documents and the conditions under which they are distributed or made available are set by law.
ARTICLE 23 - FISCAL YEAR
The fiscal year is twelve months, beginning January 1 and ending December 31 of each year.
ARTICLE 24 - STATUTORY AND CONSOLIDATED FINANCIAL STATEMENTS
The Board of Directors shall keep proper accounts of corporate activities and prepare statutory and consolidated financial statements, in compliance with applicable laws, regulations and standards.
ARTICLE 25 - ALLOCATION OF INCOME AS REPORTED IN THE STATUTORY FINANCIAL STATEMENTS
The income statement, which summarizes the income and expenses for the fiscal year, shows, after deduction of depreciation, amortization and provisions, the profit or loss for the fiscal year.
Of the earnings for the fiscal year less prior losses, if any, at least 5% is deducted to fund the legal reserve. This deduction ceases to be mandatory once the reserve has reached one tenth of the share capital; it resumes when, for any reason, the legal reserve falls below this one-tenth figure.
Distributable profits consist of the profits for the fiscal year, less prior losses, plus the amounts to be placed in reserves as required by law or the Bylaws, plus retained earnings. The Shareholders' Meeting may deduct from these earnings any sums it deems appropriate to allocate to any optional reserves or to carry forward to the next fiscal year.
Moreover, the Shareholders' Meeting may decide to distribute sums taken from reserves at its disposal, expressly indicating the reserve items from which such distributions are made. However, dividends shall first be taken from the distributable earnings for the fiscal year.
Except in the case of a capital reduction, no distribution may be made to shareholders when shareholders' equity is or would, as a result of such a distribution, be less than the amount of share capital plus reserves which the law or the Bylaws do not allow to be distributed. The revaluation surplus may not be distributed; it may be incorporated, in whole or in part, into the share capital.
ARTICLE 26 - PAYMENT OF DIVIDENDS
The dividend payout methods voted on by the Shareholders' Meeting shall be set by the Shareholders' Meeting or, failing that, by the Board of Directors. However, cash dividends must be paid within a maximum of nine months after the close of the fiscal year, unless such period is extended by court order.
The Ordinary Shareholders' Meeting may grant each shareholder, for all or part of the dividends to be distributed, the option to elect between payment of the dividends in cash or in shares, subject to legal requirements.
Interim dividends may be distributed before the approval of the financial statements for the fiscal year where the balance sheet prepared during or at a fiscal year-end and certified by a Statutory Auditor shows that the Company has made a profit since the prior fiscal year-end, after recognizing the necessary depreciation, amortization and provisions and after deducting prior losses, if any, and the sums to be allocated to reserves, as required by law or the Bylaws, and including any retained earnings. The amount of such interim dividends may not exceed the amount of the profit so defined. Subject to being previously authorized by the Shareholders' Meeting, the Board of Directors may propose to shareholders, for all or part of the interim dividends to be distributed, an option to elect between payment of the dividends in cash or in shares, subject to legal requirements.
Dividends not claimed within five years after the payment date shall be forfeited.
ARTICLE 27 - LIQUIDATION
Subject to the applicable legal provisions, the Company shall be in liquidation from the moment of its dissolution, however this is brought about. The Shareholders' Meeting shall then decide on the method of liquidation and appoint the liquidator(s). The legal entity of the Company shall continue for the purposes of liquidation, until its definitive closure.
The Company shall, insofar as all other liquidation conditions and arrangements are concerned, abide by the applicable legal provisions, subject to the rights of its shareholders as set forth in these Bylaws; specifically, after its liabilities have been discharged, any balance that may be available for distribution shall be divided equally between all of the shares.
ARTICLE 28 - DISPUTES
Any disputes that may arise during the life of the Company or, after its dissolution, during the process of liquidation, either between the shareholders, the management or administrative bodies and the Company, or between the shareholders themselves, relating to corporate affairs or the implementation of these Bylaws, shall be submitted to a court of competent jurisdiction where the registered office of the Company is located.
Exhibit 11
Code of Ethics
Exhibit 12.1
Certification
I, Christel Heydemann, certify that:
1. I have reviewed this annual report on Form 20-F of Orange;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Orange as of, and for, the periods presented in this report;
4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Orange and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
/s/ Christel Heydemann
Name: Christel Heydemann
Title: Chief Executive Officer (Principal Executive Officer)
Issy-les-Moulineaux, France
March 29, 2024
Exhibit 12.2
Certification
I, Laurent Martinez, certify that:
1. I have reviewed this annual report on Form 20-F of Orange;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Orange as of, and for, the periods presented in this report;
4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Orange and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
(c) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
/s/ Laurent Martinez
Name: Laurent Martinez
Title: Group Executive Director, Finance, Performance and Development (Principal Financial Officer)
Issy-les-Moulineaux, France
March 29, 2024
Exhibit 13.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Orange on Form 20-F for the period ending December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies that, to the best of her knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orange.
/s/ Christel Heydemann
Name: Christel Heydemann
Title: Chief Executive Officer (Principal Executive Officer)
Issy-les-Moulineaux, France
March 29, 2024
This certification will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
A signed original of this written statement required by Section 906 has been provided to Orange and will be retained by Orange and furnished to the Securities Exchange Commission or its staff upon request.
Exhibit 13.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report of Orange on Form 20-F for the period ending December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies that, to the best of his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orange.
/s/ Laurent Martinez
Name: Laurent Martinez
Title: Group Executive Director, Finance, Performance and Development (Principal Financial Officer)
Issy-les-Moulineaux, France
March 29, 2024
This certification will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
A signed original of this written statement required by Section 906 has been provided to Orange and will be retained by Orange and furnished to the Securities Exchange Commission or its staff upon request.
Exhibit 15.1
Excerpt containing the pages and sections of the 2023 Universal Registration Document that are incorporated by reference into the 2023 Annual Report on Form 20-F(1)
(1) The following document contains certain pages and sections of the Orange 2023 Universal Registration Document which are being incorporated by reference into the 2023 Annual Report on Form 20-F of Orange. Where information within a subsection has been deleted, such deletion is indicated with a notation that such information has been redacted.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
1.1 Overview
Orange is one of the world’s leading telecommunications operators with revenue of 44.1 billion euros in 2023 and 137,000 employees worldwide at December 31, 2023, including 73,000 in France. The Group has a total customer base of 298 million customers worldwide at December 31, 2023, including 254 million mobile customers and 25 million fixed broadband customers. The Group is present in 26 countries. Orange is also a leading provider of global IT and telecommunication services to multinational companies, under the brand Orange Business. In February 2023, the Group presented its strategic plan Lead the future, built on a new company model and guided by responsibility and efficiency. Lead the future capitalizes on network excellence to reinforce Orange’s leadership in service quality.
Orange SA has been listed since 1997 on Euronext Paris (symbol: ORA) and on the New York Stock Exchange (symbol: ORAN).
Orange’s purpose is to be the trusted partner that gives everyone the keys to a responsible digital world.
1.1.1 Group’s main footprint and key figures
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1.1.3 History
Orange is France’s incumbent telecommunications operator. The Group has its origins in the Ministry for Mail, Telegraphs and Telephone. It was renamed France Telecom in 1991 and became a société anonyme (limited company) on December 31, 1996. In October 1997, France Telecom shares were listed on the Paris and New York stock exchanges, allowing the French government the disposal of 25% of its shares to the public and Group employees. Subsequently, the public sector gradually reduced its holding to 53%. Between 2004 and 2008 the public sector sold a further 26% of the capital, and then again 4% in 2014 and 2015. On December 31, 2023, the French State retained 22.95% of the share capital, held either directly or jointly with Bpifrance Participations.
France Telecom’s area of activity and its regulatory and competitive environment have undergone significant changes since the 1990s. In a context of increased deregulation and competition, the Group has, over that period, undertaken several strategic investments, in particular the acquisition of the mobile operator Orange Plc and its brand created in 1994, and the acquisition of a controlling stake in Poland’s incumbent operator, Telekomunikacja Polska.
Since 2005, the Group has expanded strategically in Spain by acquiring the mobile operator Amena, then in 2015 the fixed-line operator Jazztel.
The Group is pursuing a policy of selective, value-creating acquisitions by concentrating on the markets in which it is already present. In the emerging markets of Africa and the Middle East where the Group is historically present (in particular Cameroon, Côte d’Ivoire, Guinea, Jordan, Mali and Senegal), this strategy was implemented through the acquisition of Mobinil in Egypt (2010) and of Méditel in Morocco (2015) and more recently by the acquisition of a number of African operators (in Liberia, Burkina Faso, Sierra Leone and the Democratic Republic of the Congo) (2016).
It also resulted in the joint venture with Deutsche Telekom that combined UK activities under the EE brand (2010) followed by the disposal of EE in 2016, as well as the disposal of Orange Switzerland (2012), Orange Dominicana (2014), Orange Armenia (2015) and Telkom Kenya (2016).
In Europe where Orange implements a convergence strategy, this policy resulted in the takeover of Telekom Romania Communications,in the strengthening of the majority shareholding in Orange Belgium (2021), in the takeover of the Belgian operator VOO (2023) and in the merger agreement signed on March 21, 2024 with the Romanian State defining the terms of the merger by absorption of Orange Romania Communications by Orange Romania, the Romanian State keeping a stake in the combined entity. In 2022, Orange and MásMóvil signed an agreement to consolidate their activities in Spain (excluding Totem Spain and MásMóvil Portugal) which was completed on March 26, 2024, after authorisation from the European Commission on February 20, 2024 and agreement of the Spanish Government on the control of foreign investments on March12, 2024. This merger, which combines the activities of Orange Espagne and MásMóvil, takes the form of a 50/50 joint venture jointly controlled by Orange and MásMóvil’s shareholders with equal governance rights in the combined entity, and results in its equity method (see section 3.2 Recent events and note 3.2 to the consolidated accounts).
As part of its corporate services and since the acquisition of Equant in 2000, Orange has been pursuing its strategy of becoming a global player in digital transformation and has accelerated its shift to services through a number of targeted acquisitions, notably in the fields of Cloud services and cybersecurity, such as those of Business & Decision and Basefarm (2018) and SecureLink and SecureData (2019), Expertime (2023), a service company specializing in Microsoft technologies, and the launch of Bleu, a future "Trusted Cloud" platform in a 50/50 joint venture with Capgemini and in partnership with Microsoft (2023-2024). In 2023, Enovacom, a health subsidiary of Orange Business and French leader in medical data interoperability, acquired NEHS Digital and Xperis, two French companies specializing in the development of solutions for healthcare professionals. (see Sections 1.3 Significant events and 3.1.1.3 Significant Events).
Orange aims to optimize, develop and enhance the value of its fixed and mobile infrastructure while retaining control of its strategic assets. In 2021, to support its development in fiber, the Group partnered with long-term investors to create two FiberCos in Europe. It also launched Totem, its European TowerCo, to pool its mobile towers in order to enhance their value and optimize their management.
In 2006, Orange became the Group’s main brand for Internet, television and mobile telephony services in the majority of countries where it operated. In 2013, the Company adopted the Orange name, offering the full range of its telephony services in France under the Orange brand. This policy continued with the gradual adoption of the Orange brand by most of the Group’s subsidiaries in Europe and Africa. Corporate services in the world are offered primarily under the Orange Business brand.
In February 2023, the Group presented its strategic plan Lead the future (see Section 1.2 Business model, market and strategy). In line with this plan that refocuses Orange on its core business, the Group announced at the end of June 2023 the opening of exclusive negotiations with BNP Paribas in order to define a referral partnership for the Orange Bank customer portfolio in France, develop financing solutions for mobile devices and discuss the terms of a takeover of Orange Bank’s business in Spain. At the end of these negotiation, Orange announced, at the end of February 2024, that it had selected BNP Paribas to offer a banking continuity solution for its customers (subject to eligibility conditions) in France and Spain. Orange and BNP Paribas signed a number of agreements in February 2024 in relation to this partnership, which is part of Orange’s wider intention to progressively withdraw Orange Bank from the retail banking market in France and Spain. In January 2024, the Group sold all of OCS and Orange Studio’s titles to the Canal+ Group (see Section 3.1.1.3 Significant Events).
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1.2.2 Key changes in the telecom services market
The telecoms services market as a whole is characterized by the following major trends. Specific market trends in the business segments are described in Section 1.4 Operating activities, while regulatory trends in national markets are described in Section 1.7 Regulation of telecommunication activities.
As the need for connectivity and digital services continues to grow worldwide, operators must transform themselves amidst a turbulent geopolitical, economic and regulatory environment marked by instability in conflict zones in Europe and Africa & Middle East, demographic variations and migration particularly affecting Africa & Middle East, climate disasters, the general economic slowdown due to the energy crisis and material shortages, inflation, intensifying competition between telecommunication operators and also with new non-telecommunication competitors, cyber threats, and changes in European regulations seeking to regulate markets in the face of security, sovereignty and sustainability issues.
Growth in usage and new customer expectations
The increased capacity of existing networks and the multiplicity of screens available (computers, smartphones, tablets, connected TVs, augmented reality glasses and headsets) are driving growth in usage. The development of 5G technology has prompted the emergence of new uses for businesses (optimization of production time, remote machine operation, predictive maintenance, etc.), and for B2C customers (connected devices, immersive videos, Web 3.0, Cloud gaming, etc.). Immersive technologies (metaverse), Web 3.0, and generative AI create the opportunity for new customer experiences. The rise in Internet traffic is driven by the increased digitization of essential services: education, health, finance, leisure, etc. The need for connectivity has become vital for individuals and businesses alike (teleworking, e-commerce, digitization of services, apps, etc.), with demand for digital services and content growing both in Europe and in Africa & Middle East, where the population is very young ("digital natives"). For businesses, better connectivity and services mean greater productivity and competitiveness. The need for coverage and continuity in the customer experience, as well as secure, on-demand connectivity (based on the number of users and their usage patterns), is growing. The digital transformation of companies exposes them to new cyber threats. Cybersecurity has become a need for individuals, businesses, and governments alike. More than ever, customers count on networks being reliable and resilient and on the protection of their personal data, highlighting the importance of a relationship of trust with their operator. To reduce inequalities in digital access, customers expect offers that are accessible to the most disadvantaged, as well as support for first-time users.
Network development
To face the increasingly steady growth of uses, operators must continue to invest in tomorrow’s very high-speed broadband (fiber, 5G, satellite), to increase their capacity and make them more efficient. This is made possible by the virtualization of network functions and automation, the emergence of "as a service" connectivity solutions that can be controlled and configured on demand, and the use of data and AI. As organizations are stepping up their digital transformation, app and data integration solutions are becoming critical elements for AI applications and roll-outs. Telecommunication operators are transforming their networks through an open platform approach and by integrating AI into their model. Digital technology is a growing challenge of sovereignty, leading economic players to implement sovereign telecommunication solutions through key technologies: Cloud & Edge, cybersecurity, satellite constellations (broadband connectivity solution resilient to climate and security disasters), AI. The growing digitization, complexity and interdependence of information systems are increasing the risk of cyber attacks, which are increasing in scale and intensity. Damage to property (following storms, floods, heat waves, cable theft, etc.) is multiplying, requiring immediate action to restore connectivity. Operators need to invest in the reliability of their networks and the resilience of their business processes in order to ensure business continuity. Storing a growing volume of data requires investment in Cloud infrastructure and datacenters.
In Europe, network investments are focused on very high-speed broadband access, with the development of fiber (supplemented by a satellite offer for remote areas), improved performance of 4G mobile networks and the roll-out of 5G. In Africa & Middle East, Internet access networks are developing primarily through the roll-out of 4G and 5G mobile networks, as well as fiber in targeted areas of large cities.
Transformation of the telecoms industry
Regulatory constraints (imposed rates, complex mergers, consolidation remedies) and competition (low cost, price wars) are still very intense in Europe. Competition is intensifying between telecommunication operators, as well as with disruptive new entrants like GAFAM [1] and other digital stakeholders (Starlink, start-ups and fintechs like Wave in Africa). More than 50% of network capacity in Europe is used by GAFAM1, which raises the question of fair value sharing. Smartphone manufacturers and digital service providers are challenging the operators’ ability to differentiate themselves. Over-The-Top (OTT) service providers are focusing on voice substitution in business to business (B2B) and in international wholesale. The major digital market players are also speeding up the development of their proprietary infrastructure by building new datacenters and international networks that they are promoting in the B2B and wholesale markets. At the same time, Chinese network and smartphone providers are increasingly being bypassed due to security and sovereignty risks.
Against this backdrop, the transformation of the telecoms industry is gathering pace.
For telecommunication operators, AI makes networks smarter and therefore more efficient. The emergence of generative AI represents a real revolution, as it can change professional practices by improving operational efficiency and the customer experience.
In terms of recruitment, there is high demand for multi-skilled and more software-development than physical-infrastructure-management oriented employees. To build team loyalty and to develop the digital skills required for the new technological revolution, operators are investing in employee training and seeking to increase their attractiveness.
Rising energy prices has put pressure on costs, while inflation has complicated the economic equation. To face the challenges of profitability, operators are seeking to raise rates, under both regulatory and competitive constraints. They have to decommission 2G, 3G and copper networks, and are seeking to pool and share their networks; some are even transferring all or part of their infrastructure to financial funds or infrastructure companies (TowerCos). "Coopetition" initiatives are on the rise, with alliances between telecommunications companies (APIs, Telco Cloud) and a growing number of RAN sharing projects (passive/active infrastructure). These have led to transformation and consolidation plans, particularly in Europe.
Working toward responsible digital technology
To reconcile growth in usage with the challenges of sustainability, operators have a role to play in guiding consumers toward more sustainable practices and transforming their ecosystems. They need to double down on their efforts to reach their Net Zero Carbon targets, limit the use of scarce resources, think strategically about access to critical materials (due to their limited availability and geopolitical risks), and preserve biodiversity. Levers for reducing greenhouse gas emissions include the use of energy-saving solutions, renewable energies and the development of the circular economy. The regulatory environment is becoming tougher, sustainable finance is shaping strategic guidelines, and CSR criteria are playing an increasingly important role in the choice of a supplier or product.
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Changes in digital technology regulations
Against this backdrop of profound change, European regulations are evolving to support the digital transformation (see Section 1.7 Regulation of telecommunication activities).
The Digital Services Act (DSA) update to the e-Commerce Directive amends the obligations of intermediaries connecting consumers with goods, services and content to prevent illegal and harmful activities online, as well as the spread of misinformation. The DSA only provides for limited changes for electronic communications operators.
The Digital Market Act of September 14, 2022, applicable gradually from May 2, 2023, provides a framework for the economic activity of major digital platforms in the European Union, and should help establish fair relations between platforms and businesses. Telecommunication operators are outside the scope of the regulation.
The European Network and Information Security 2 (NIS 2) Directive, published in the Official Journal of the European Union in December 2022, succeeds the 2016 Directive by expanding it scope both in terms of sectors and entities covered, and by reinforcing sanctions. It also establishes CyCLONe, a network bringing together the French information systems security agency (Agence Nationale de Sécurité des Systèmes d’Information - ANSSI) and its European counterparts for coordinated responses in the event of a crisis. Member States must transpose these provisions into national law by October 2024.
The draft European Gigabit Infrastructure Act, which aims to improve the effectiveness of Directive 2014/61/EU to facilitate the roll-out of very high-speed broadband networks by reducing the associated costs and simplifying the administrative framework, was submitted in December 2023 and agreed upon on February 6, 2024. The provisional agreement, which has not yet been published, must still be submitted to the Council of the European Union and the European Parliament for formal adoption.
The Recommendation on Gigabit Connectivity was published on February 6, 2024. It updates two recommendations from 2010 and 2013, which dealt with the remedies that could be imposed on SMP operators (those with significant market power) during market analyses, particularly in the context of the transition from copper to fiber.
Lastly, on December 9, 2023, the Council of the European Union and the European Parliament reached a provisional agreement on AI legislation that harmonizes the rules on AI systems, ensuring that they are safe and respect the fundamental rights and values of the European Union. Once the final text of the law has been formally adopted by the Council of the European Union and the European Parliament, the AI legislation will come into force gradually until 3 years after its publication. In order to facilitate the transition to the new regulatory framework, the European Commission has launched the AI Pact, an initiative that aims to support implementation and invites AI developers to comply in advance with the main obligations of the AI legislation.
1.2.3 The Orange group strategy
Launched in February 2023, the strategic plan Lead the Future aims to generate value from the Group’s recognized excellence in its core business and to grow sustainably in Europe, Africa and the Middle East. Orange also intends to re-position its Enterprise activities in next generation connectivity solutions and accelerate in cybersecurity.
This plan was designed to project Orange into the future and capitalize on its unique strengths in the telecoms sector. The quality of its core assets combined with a solid financial position allow it to address the many structural and economic challenges facing the industry. The explosion of digital uses is accompanied by ever-increasing customer demands, notably in terms of resilience, making the telecoms sector essential for years to come.
Lead the Future aims to respond to these challenges and focus Orange on its core business. This ambitious and pragmatic plan aims to build on the Group’s strengths to create value. Orange, a pioneer in fiber, continues to deploy, innovate and invest in the best technologies to respond to its customers’ needs for reliability, security and resilience. In addition, Orange consolidates its strong position in cybersecurity and re-positions its B2B activities to better meet the expectations of its customers. Finally, this plan is expected to allow the Group to strengthen its position in Africa and the Middle East, a region of high growth.
Lead the Future is built on four pillars:
1. Capitalizing on Orange’s core business to reinforce excellence and quality of service;
2. Capitalizing on infrastructure in all the countries where the Group is active;
3. Transforming Orange Business to accelerate growth in the Enterprise segment and strengthen Orange’s position in cybersecurity;
4. Continuing to grow in Africa and the Middle East.
Accompanying the 2025 plan is a new company model.
Capitalizing on the core business to reinforce excellence and quality of service
Standing out for the quality of networks and service
The quality of Orange’s networks and the excellence of its customer service in Europe are widely recognized, as evidenced by the net promoter score (NPS). The power of the Orange brand, ranked the second most-valued telecoms brand in Europe in 2023, has thus been strengthened. As the leader in fiber optic deployment in Europe with nearly 48 million Fiber to the Home (FTTH) connections deployed by the Group by the end of 2023, Orange now has considerable technology assets. The excellence of the network, following significant investments, is expected to enable the Group to strengthen its leadership in terms of customer experience. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Using Data and AI to offer customers a customized experience
Orange intends to develop its use of Data and AI to offer customers a customized and seamless experience across its digital and physical channels. The Group thus aims to continue to increase the share of digital technology in sales and in customer support. By leveraging AI, it intends to improve its ability to predict customer expectations, focusing on services that are secure (through network-integrated cybersecurity), transparent (offering customized, modular, seamless connectivity on-the-go) and "green" with, for example, repaired and refurbished devices.
Capitalizing on roll-out progress and leadership in networks
In addition to fiber, 5G and "4G Home" which are already widely available, Orange enhanced its satellite offer in 2023 by launching, in partnership with Eutelsat, a commercial offer in mainland France (see Section 1.5.1 Access networks).
In Spain, the combination with MásMóvil endows the created entity with the financial capacity and scale necessary to continue to invest and contribute to the development of competition through infrastructure, for the benefit of consumers and businesses.
Through this leadership in networks, customer satisfaction and enriched offers, Orange intends to improve average revenue per offer (ARPO) despite difficult macroeconomic conditions and intense competition.
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The consolidation of fixed and mobile services in Romania, Belgium and Spain will allow the Group’s convergent customer base, which reached 11.9 million at end-2023. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Lastly, with its sights firmly set on the usages of tomorrow, Lead the Future has capitalized on the expertise of researchers and other employees dedicated to innovation to build new services and applications such as Edge computing, virtualization of network operations, on-demand enterprise networks, the Wi-Fi of the future for the home, and services using generative AI.
Capitalizing on infrastructure in all the countries where the Group is active
Continuing the extension of very high-speed fixed and mobile broadband and increasing the value of Totem
The Group intends to continue to invest in the development of fixed and mobile networks within a responsible financial framework. To do so, Orange will continue to engage in strategic partnerships (radio access network (RAN) sharing and joint entities) to share financial costs and secure investments.
Across the fixed-line network, Orange continues to deploy, operate, and market fiber connections; [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. Across the mobile network, Orange has increased the value generated from its passive infrastructure by aiming to achieve, in 2026, a third-party operator hosting rate of 1.5 for pylons owned by Totem, the Group’s European TowerCo. Totem, a wholly owned Orange subsidiary, has all the strengths needed to be a key player in European consolidation.
The Group continues to modernize its fixed and mobile networks moving to very high-speed broadband with the decommissioning of the copper network in France and 2G and 3G networks in all its European countries by 2030. In Africa & Middle East, the Group’s entities own a portfolio of nearly 30,000 towers over which they have long-term control, and which represent significant potential for value enhancement in the coming years. Orange continues to roll out fixed and mobile networks (4G and 5G), to enable solid growth in its results and to support the African continent’s economic and social development.
Rolling out Network Integration Factories
Orange intends to enhance the value of its infrastructures through technology and strengthen the use of data and AI to put in place a new industrial model for the management of its network: more effective, more resilient, and higher performing. Group-wide Network Integration Factories will also accelerate the automation and virtualization of network operations. They will also make it possible to offer new on-demand network services operating in "Network-as-a-Service" mode (available via app programming interfaces), thus creating new business opportunities. Lastly, they will increase the resilience and security of networks thanks to considerably faster operations of network restoration, security updates or anomaly detection. This transformation is already contributing to optimizing capital and operating expenditure and reducing network electricity consumption by up to 20% (AI-assisted equipment standby, use of solar power at sites). (See Section 1.5.4 Network Integration Factory).
Transforming Orange Business to accelerate growth in the Enterprise segment and strengthen Orange’s position in cybersecurity
Positioning Orange Business as the leader for next generation connectivity solutions
The Internet, the Cloud and collaborative software have all revolutionized companies’ digital usage, for example through the shift away from fixed line telephony and private networks. These developments call into question the traditional B2B Telco operator model. With Lead the Future, Orange is profoundly transforming its model to adapt to the new realities of a market where the boundaries between networks and digital services are disappearing. Orange will therefore capitalize on its unique mastery of connectivity, security and resilience challenges.
Orange Business will position itself as the leader for next generation connectivity solutions. This ambition is rooted in its globally recognized expertise in secure and trusted connectivity solutions which provide the foundation for companies’ digital transformation. It will also rest on a re-focusing of the range of services it offers, the evolution of its company model and a far-reaching program of cost optimization. A large-scale employee training program supports this transformation.
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Continuing the growth of Orange Cyberdefense to open up to new markets (B2C/micro-businesses)
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Driven by the growing needs of both individuals and large businesses, the market is expected to experience double-digit growth over the coming years and the Group has already demonstrated its ability to outperform the market. With revenues of 1.1 billion euros at end-2023, an increase of 12.9% on a historical basis or 10.9% on a comparable basis, Orange Cyberdefense intends to continue with its organic growth and its strategy of targeted acquisitions, accelerate its push into the professional/ small- and medium-sized enterprise (SME) segment, and enter new markets such as business to consumer (B2C).
Continuing to grow in Africa and the Middle East
Maintaining growth in the Africa & Middle East region
The Africa and Middle East region has been a growth driver for the Group for many years and remains at the heart of its strategy. There is significant potential in this region, linked to strong demographics, the adoption of the Internet and increasing usage, the capture of which is made possible by the roll-out of networks and infrastructure. As the telecoms operator serving one in ten Africans, Orange intends to continue to invest in the deployment of its networks to further strengthen its position as a digital partner of reference in Africa and the Middle East. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Accelerating the transformation of Orange Money
On these solid foundations, the Group plans to accelerate the provision of services in the financial field (Orange Money, Orange Bank), content, energy, e-agriculture, health and B2B. Orange is thus accelerating the transformation of Orange Money toward a digital platform model that will offer other services in addition to transfers and payments. This will be offered to all consumers, whether or not they are Orange customers, across all the countries in which the Group is present. Following the success of its My Orange and Orange Money apps, Orange has launched its super-app Max it, which combines the telecommunications, financial services and e-commerce worlds, seeking to facilitate the everyday needs of its users. Developed by Orange teams in Africa for African customers, this new app was launched in 2023 in five countries. Since the end of 2022, Orange Money’s revenues has returned to growth, driven by the increase in its customer base to more than 34 million active users and by the volume of transactions made using Orange Money’s platforms, which exceeded 130 billion euros in value during the year.
Strengthening the Group’s foothold
Orange’s resilience in Africa & Middle East, fostered by the diversity of the countries in which it operates, its local ties and local management, demonstrates the Group’s ability to operate in complex geographical regions and deal with geopolitical and macroeconomic issues. A local partner in Africa and the Middle East through a dedicated subsidiary, Orange will continue to invest in infrastructure and work to promote digital inclusion across the African continent. In line with its digital inclusion policy - from the provision of offers at attractive prices to digital training - the Group will strengthen its local ties and its position as a multi-service operator, in particular by continuing to roll out its "Orange Digital Centers" and expanding Max it to the twelve other countries where Orange is present in Africa & Middle East.
A new company model guided by responsibility and efficiency
The Group’s environment is undergoing profound changes and Orange is therefore facing major challenges in terms of transformation. To overcome these challenges, Lead the Future will put in place a new company model guided by an ambitious policy of social and environmental responsibility.
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Governance and social and environmental responsibility, which are at the heart of all the Group’s processes, are driven by the commitment of the Group’s management team, part of whose compensation is linked to non-financial performance indicators. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
A new company model
The success of Lead the Future is also linked to the development of the Group’s company model: simpler, faster, more efficient. People, organizational agility and the simplification of processes are at the heart of this transformation. The objective is to improve operational efficiency at Group level and accentuate its industrial approach geared towards excellence.
In a world of disruptive technologies, the Group is investing in training and has proactive skills management based on anticipating needs. The Group facilitates employee development toward new roles in data, Cloud Computing, cybersecurity and AI.
Lastly, the Group continues to closely manage its costs. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Having reached a peak, Orange is aiming to reduce investments [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] for the duration of the plan. This reduction is particularly centered on France and Europe, where most of the investments in fiber have already been made. All the same, Orange will continue to invest to further strengthen its network leadership.
Within the framework of Lead the Future, the Group has set its financial ambitions for 2025. These ambitions are based on clear objectives for return on investment and long-term value creation [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. Orange intends to rigorously manage its asset portfolio, pursue its carefully considered strategy in respect of acquisitions and partnerships, and maintain self-discipline in terms of managing its debt and its balance sheet.
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1.3 Significant events
Significant financial events, in particular changes in the asset portfolio, are presented in Chapter 3 Financial performance, in Sections 3.1.1.3 Significant events and 3.2 Recent events.
Governance
On March 24, 2023, Céline Fornaro was appointed by ministerial decree as a member of the Orange Board of Directors to represent the French government, replacing Stéphanie Besnier.
On May 23, 2023, the Orange Shareholders’ Meeting approved the appointment of two new directors: Momar Nguer, replacing Jean-Michel Severino, and Gilles Grapinet, replacing Bernard Ramanantsoa (see Section 5.1.1 Board of Directors).
In February 2023, Orange presented Lead the future, its new strategic plan which aims to generate value from the recognized excellence of its core business and to grow sustainably in Europe, Africa and the Middle East. Orange also confirms the repositioning of its Enterprise activities in next generation connectivity solutions and the acceleration in cybersecurity. Accompanying the plan is an ambitious new company model placing, at its heart, social and environmental responsibility and operational excellence. (see Section 1.2.3 The Orange group strategy).
To accelerate the Group’s transformation and development, Christel Heydemann has made changes to part of her management team (see Section 5.1.3 Executive Committee). And as part of the implementation of the "New Company Model" project, which is the core of the Lead the Future strategy, the Group’s committee structure was reviewed with an eye to simplification and streamlining. The Group’s governance is now supported by 11 key committees. (See Section 5.2.2.3 Executive Committee and Group governance committees).
Capitalizing on the core business
Fixed-access networks
Partnership with Networth for the "All Fibre" offer
In March 2023 and in partnership with Networth, Orange Wholesale France (OWF) - the Orange entity dedicated to the telecommunication operator market in France - launched a complete voice over internet protocol (VoIP) telephony and fiber Internet connectivity offering called All Fibre. This offer is a turnkey solution for operators without a network or service platform operating in the professionals and very small businesses markets. It offers extensive national coverage and is simple, convenient, time-saving and cost-effective for telecommunication operators.
Launch of the new Livebox 7
In October 2023, Orange launched the XGS-PON-compatible Livebox 7, allowing all members of the same household to enjoy the best Orange Wi-Fi experience (gaming, video chat, ultra high-definition TV, etc.). Thanks to Wi-Fi 6E, several devices can be connected simultaneously on one of the three spectrum bands available, for an ultra-high-performance connection with improved latency. Livebox 7 is part of the eco-design approach recognized by Bureau Veritas’s "Footprint Progress" certification, a first for an Orange box in France. Bureau Veritas an internationally recognized certification body, focusing on the product’s life cycle. Livebox 7 is designed to be easily repairable, with a 100% recycled and recyclable shell, and offers a standby mode option to reduce energy consumption.
Widespread roll-out of fiber optic by 2025
In France, the roll-out of the FTTH network continued at a steady pace, and Orange consolidated its leadership with a total of 37.4 million households connectable to Orange fiber optic and 8.2 million customers at end-2023.
Orange and the French government announced on November 7, 2023 that they had reached a tentative new agreement on the widespread deployment of fiber optic by 2025. In the AMII (Appel à Manifestation d’Intention d’Investissement - call for expression of investment interest) zone, this new roll-out commitment will replace the 2022 milestone of the L. 33-13 commitments (i.e. the second milestone of the commitments made in 2018). This proposal is based on the following elements:
− by 2025, 1,120,000 premises in the entire AMII zone will be made connectable (which would represent 98.5% of connectable premises, including cases of blockage/refusal);
− by 2024, 140,000 premises within the perimeter of 55 inter-municipality cooperation zones with the lowest FTTH coverage.
Although this agreement is based on new commitments, it extends the deadline for Orange to meet its commitments. The agreement has been submitted to Arcep and the French government has accepted the commitments taken in Orange’s proposal by decision dated March 14, 2024.
In addition, a government order incorporating the terms of Orange’s commitment could be published following an advisory opinion from Arcep (Autorité de Régulation des Communications Electroniques, des Postes et de la Distribution de la Presse - the French Electronic Communications, Postal and Print Media Distribution Regulatory Authority), and may entail additional obligations.
The roll-out of FTTH networks is also continuing in Europe (excluding France), where Orange had more than 30.2 million households connected at end-2023 (including 16.8 million in Spain and 8.0 million in Poland) and 6.0 million customers (including 3.6 million in Spain and 1.3 million in Poland).
In Africa & Middle East, at end-2023, the Group had connected 4.1 million homes to FTTH in Morocco, Jordan, Côte d’Ivoire, Senegal, Mali, Burkina Faso, Egypt, the Democratic Republic of the Congo and Guinea. Orange has stepped up its fiber roll-out and had 1.2 million customers at end-December 2023.
2024 -2028 Framework for the regulation of fixed networks in France
On December 18, 2023 in France, Arcep published the framework for the regulation of fixed networks for the years 2024 to 2028, aimed in particular at defining the framework for unbundling and civil engineering access rates. On this occasion, Orange obtained an increase in its rates.
Mobile-access networks
Orange’s 5G is now marketed in a non-standalone (NSA) version (in other words based on a 5G spectrum but using a 4G core and an additional 4G anchor frequency band) in six countries in Europe (France, Luxembourg, Poland, Romania, Slovakia, Spain). It is initially being rolled out in urban areas where 4G is in high demand, and in areas with high levels of economic activity, as a complement to the other networks. In 2023, Spain and Belgium launched their 5G standalone (SA) network . The other four European countries that have already rolled out 5G NSA will commission 5G SA between 2024 and 2025.
In Africa & Middle East, Orange is pursuing a 4G roll-out strategy and is investing in all countries to upgrade and extend their access networks. The first 5G roll-outs took place in 2022, continued in 2023, and Orange is seeking to accelerate to cover almost the entire region by 2025.
In March 2023, Orange borrowed 500 million euros from the European Investment Bank (EIB) to help finance in France the rollout of its 5G mobile network and the reinforcement of its 4G mobile network capacity in rural areas. This financing is part of the roadmap of Orange’s new strategic plan, which aims, among other things, to capitalize on the Group’s infrastructure in order to consolidate Orange’s leading position in terms of quality of service and networks.
In October 2023, the results of Arcep’s annual survey on the quality of the mobile services of French telecoms operators confirmed for the thirteenth consecutive year that Orange remains the leader in voice, SMS and data, coming in first or tied for first in all 278 performance criteria measured. These results are a testament to the expertise and ongoing commitment of the teams to more efficient and more responsible networks.
Satellites
In March 2023, Orange announced that it had signed a distribution agreement with OneWeb (a low earth orbit satellite communications company) aimed at improving and expanding the Group’s global connectivity, particularly in rural and remote areas of Europe, Latin America and Africa. Thanks to this partnership, Orange will be able to offer telecommunication operators and businesses an enhanced connectivity offer incorporating OneWeb’s LEO (Low Earth Orbit) solution, making it possible to connect, with improved latency, hard-to-reach areas that could not be served until now. Other benefits of this partnership include increased resilience and geographical coverage of B2B and backhaul solutions in these remote areas.
In November 2023, Orange launched its Satellite offer, expanding its range of very high-speed broadband connectivity solutions to include satellite in its technological mix, in addition to fiber, ADSL, 4G Home and 5G Home. This new offer, marketed through Orange distribution channels, is operated by Nordnet, a Group subsidiary that has specialized in satellite Internet for 15 years. It is part of the French government’s Cohésion Numérique des Territoires (Digital Regional Cohesion) program, and meets the government’s objective of guaranteeing very high-speed broadband access for everyone by 2025. It relies on the Eutelsat Konnect VHTS satellite, designed by Thalès Alenia Space and launched in September 2022 by Ariane 5. This offer allows its most remotely located B2C and business customers to benefit from a very high-speed broadband experience (theoretically up to 200 Mbit/s downstream and 15 Mbit/s upstream) for the price of a fiber-optic offer.
In 2023, Orange was selected to participate in the IRIS [2] industrial consortium for the sovereign European satellite constellation project, which will contribute to the objectives of the European Union’s digital policy and Global Gateway strategy. The main objective is to provide European Union member states with guaranteed access to secure, sovereign connectivity services on a global scale, and to offer a commercial infrastructure that allows for seamless broadband connectivity.
Submarine cable
The Group continued to make substantial investments in international connectivity projects. In April 2023, Orange announced the roll-out of a new submarine cable linking Tunisia and France, co-financed by the European Commission as part of the "Connecting Europe Facility" (CEF) mechanism. The 1,050-kilometer cable is due to be commissioned at the end of 2025. Named Via Tunisia, this cable is part of the Medusa submarine cable system in the Mediterranean Sea. The entry into force of the construction contract for Via Tunisia was announced in July 2023.
In addition to the Dunant mega-submarine cable, which was commissioned in January 2021, the Amitié transatlantic submarine cable between New York and Europe, commissioned at the end of 2023, allows Orange to offer a unique, robust, ultra-low-latency transatlantic solution between the two continents. In France, Orange is in charge of operating and maintaining the system’s landing point, and also provides all Amitié cable partners with the terrestrial infrastructure required for its smooth operation, from the limit of French territorial waters to the new Equinix data center in Bordeaux. Orange also offers its wholesale and business customers connectivity from the United States to European hotspots thanks to the density of its European network, either in dark fiber or via its state-of-the-art WDM optical transport network, and in particular the main European hubs: Paris, Frankfurt, Madrid, Amsterdam, and London. The routes between Bordeaux and Marseille have been strengthened, to offer the most direct and efficient solution for connecting Africa & Middle East and Asia directly to the United States. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] Lastly, by rolling out the latest optical fiber and transport technologies, the energy cost per megabit transported has been significantly reduced.
In September 2023 in La Seyne-sur-Mer, Orange Marine inaugurated the Sophie Germain, its new cable-laying ship. By investing in the construction of a state-of-the-art ship, Orange Marine is strengthening its position as a major player in submarine cable surveying, laying, repair and maintenance activities worldwide. Submarine cables play a major role in telecommunications, as they enable the transit of 99% of intercontinental telephone communications and data transfers. This investment is a testament to the Group’s determination to play a major role in long-distance network infrastructure, with guaranteed global connectivity as its compass. The ship’s modern, high-performance design and equipment allow it to operate more efficiently at sea and reduce its environmental footprint.
Capitalizing on infrastructure
In February 2023, Orange and Vodafone announced that they would cooperate to build and share an Open Radio Access Network (Open RAN) in rural areas of Europe where both operators have mobile networks. In mid-2023, Orange activated its first 4G (and soon 2G) Open RAN sites via a commercial network pilot in a rural area of Romania, sharing a network with Vodafone. This agreement, which is a first in Europe, demonstrates the two operators’ commitment to rolling out this technology for future mobile networks in Europe and also to supporting the European Commission’s goal of rolling out 5G to all populated areas by 2030. Thanks to this new operating model based on the integration of multi-provider equipment and software, Orange and Vodafone each benefit from greater agility when adding new radio sites or upgrading existing ones, while minimizing costs and energy consumption.
In April 2023, Totem, Orange’s European TowerCo, announced the roll-out of a next-generation 5G network within the Orange Vélodrome stadium in Marseille, to meet the expectations of the public, organizers and media for various sporting events. The four French telecommunication operators have been able to connect their equipment to the antenna infrastructure rolled out by Totem. Next-generation antennas have been developed for these locations with high mobile usage density, offering consistent high-quality network coverage and high energy efficiency.
Orange implemented its technological expertise and capacity for innovation to connect the planet to the Rugby World Cup 2023. Working hard for over two-and-a-half years, Orange teams provided all the connectivity required for the tournament, in particular through a secure very high-speed broadband image transport network (Broadcast Contribution Network), and offered immersive augmented reality experiences thanks to highly realistic 3D modeling. In order to minimize the environmental footprint of the network infrastructure rolled out for the competition, all installations will be reused for other events or left permanently. Precious metals from over 206,000 telephones were recycled to produce the nearly 1,500 recycled medals given to players.
In 2023, Orange was appointed coordinator of the FranceQCI consortium, which includes Airbus, CNRS, Cryptonext Security, France’s Directorate General for Civil Aviation, Orange, Sorbonne Université, Télécom Paris, Thales, Thales Alenia Space, Université Côte d’Azur, Veriqloud and Welinq. As part of the Digital Europe program, this project represents a significant contribution in France to the objective of rolling out a secure quantum communication infrastructure for the EU (EuroQCI), and paves the way for the future European Quantum Information Network (QIN).
Transforming Orange Business and strengthening cybersecurity
Orange Business transformation plan
In March 2023, Orange Business presented the operational implementation of its strategic priorities to the employee representative bodies. This plan carries a strong ambition to transform and simplify Orange Business, whose market is undergoing profound changes, toward a Digital Services Company (DSC) model. The simplification of the Orange Business product portfolio is on track to halve the number of products and services marketed in the first quarter of 2024. The training and retraining plan for key digital professions (virtualization, Cloud, data, AI and cybersecurity) resulted in 11,408 certifications out of the 20,000 targeted by 2025. Lastly, a provision was booked in the 2023 financial statements for the voluntary departure plan, to be implemented in 2024. (see Section 3.1.1.3 Significant events and Note 5.3 to the Consolidated Financial Statements).
Digital transformation of the business customer and cybersecurity solutions
To meet the expectations of businesses, particularly those related to the refocusing of their needs, Orange Business combines the expertise of a network operator with that of a DSC. With this in mind, and drawing on its secure, digitized infrastructure, Orange Business is focusing its expertise on five value propositions offering end-to-end solutions and combining networks, Cloud, security, data and AI.
Partnership with Palo Alto Networks
To this end, in June 2023 Orange Business, Orange Cyberdefense and Palo Alto Networks, a global leader in cybersecurity services, announced a new collaboration to deliver a managed Secure Access Service Edge (SASE) solution that seeks to meet business requirements for network and security, high performance, simplicity and Zero Trust 2.0 network access.This product seeks to meet the needs of businesses looking for agility and whose infrastructure is oriented toward the Cloud, while providing a high level of security.
Launch of the Mobile Private Network hybrid solution
In July 2023, Orange unveiled its first hybrid private mobile network, allowing businesses to access both private and public networks simultaneously. The Mobile Private Network hybrid is a two-in-one solution: it provides simultaneous access to both a private network and a public network, Orange France’s commercial mobile network. Relying on 5G Stand-Alone (5G SA) technology and utilizing Network Slicing, Edge Computing and Local Break Out functionalities, the solution proposed by Orange Business allows companies to benefit from the advantages of a private network (performance, low and stable latencies, enhanced data security) and the support of existing operator infrastructure.
Launch of the Flexible SD-WAN solution integrated into Evolution Platform
In November 2023, Orange Business announced it was strengthening its partnership with VMware by launching the Flexible SD-WAN solution integrated into Evolution Platform. The platform allows companies to define their own combination of services to meet their different needs, while benefiting from Orange Business’s top-notch infrastructure and expertise. The platform’s automation and service chaining simplify digital infrastructure management, guaranteeing secure user-to-Cloud and Cloud-to-Cloud connectivity, and better integration with unified communications services.
Commercial launch of Bleu, the future trust Cloud platform
After receiving approval from the European Commission in June 2023, in mid-January 2024 Orange and Capgemini announced the commercial launch of Bleu in strategic partnership with Microsoft. The platform is expected to be launched at the end of 2024 or later on a set of geographically distributed datacenters in France, meeting the most demanding requirements in terms of resilience and availability. The trust Cloud [3] platform project aims to meet the specific needs of the French government, local authorities, hospitals and healthcare facilities, and public or private entities recognized as Operators of Vital Importance (Opérateurs d’Importance Vitale, OIV) or Operators of Essential Services (Opérateurs de Services Essentiels, OSE), allowing them to use Microsoft 365 and Microsoft Azure services. Bleu is aiming for SecNumCloud 3.2 qualification for its services in 2025.
For Orange Business acquisitions, see Section 3.1.1.3 Significant events - Changes in the asset portfolio.
Pursuing growth in Africa & Middle East countries
Strategic partnerships
In June 2023, Orange Africa & Middle East and Digital Africa signed a strategic partnership to strengthen the support and growth of African start-ups in the "Orange Digital Centers" network. Selected start-ups can access a range of resources, including mentoring programs, technical assistance, funding, and networking opportunities through the Orange Digital Center (ODC) and the Digital Africa community.
In October 2023, Orange entered into a strategic partnership with start-up Koolboks to bring freezing and refrigeration solutions to 12 African countries through a single piece of equipment. This partnership falls within the scope of its new Orange Energies business, whose ambition is to make digital technology a lever for energy inclusion. With its Orange Smart Energies digital platform, Orange Energies allows households not connected to electricity to use its pay-as-you-go service to acquire solar energy solutions; and with the Orange Money service, these households can pay for and become owners of solar installations and the equipment connected to them. In this way, Orange contributes to the development of income-generating activities (IGA) in rural areas through clean electrification solutions, in line with the United Nations’ 7th Sustainable Development Goal.
Launch of the Max it app
At the end of November 2023, Orange launched an app designed to be a true mobile services portal, making life and the digital experience easier for all users on the continent, whether Orange customers or not. Max it brings together three essential service offers in a single smartphone interface: telecoms features for managing mobile and fixed lines; Orange Money, with all local and international money transfer services, payments to billing and merchant partners, credit and savings; and an e-commerce universe offering digital content services (online games, music, TV, videos, news, etc.) as well as innovative digital ticketing. The app has already been downloaded 10 million times. Developed by Orange teams in Africa for African customers, this new app is being launched in five countries (Cameroon, Senegal, Mali, Burkina Faso and Botswana) and will be expanded in 2024 to the 12 other countries where Orange is present in Africa & Middle East.
A responsible and efficient business model
Implementation of the new business model
AI at the heart of innovation to accelerate transformation
Orange is placing AI at the heart of its innovation model to support the company’s growth as well as its social and environmental objectives, focusing on three major areas: making networks smarter, improving operational efficiency and reinventing the customer experience. Automation with AI not only reduces energy consumption, but also optimizes network planning and investment decisions, and allows for faster analysis of the causes of incidents, thus improving preventive maintenance. Orange also uses AI to fine-tune marketing forecasts and anticipate the relevance of offers for customers, making revenue forecasts more reliable. In 2023, the Innovation teams developed an in-house Generative AI tool that incorporates the best AI models available, allowing employees to use it in their daily activities. In order to develop key skills around AI within all the Group’s business lines, Orange offers its employees a comprehensive range of training courses (see Sections 1.5 Orange networks and 1.6 Research and Development).
A new brand signature: "Orange is there"
In early January 2024, the Orange group launched a new brand signature to better reflect its commitment to being a trusted partner that is there for its customers at every stage of their journey and in any circumstance. This new approach underscores the importance the Group places on the quality of customer relations and meeting their needs. It also highlights the commitment of Orange’s employees. These three words express the Group’s commitment to greater proximity, accessibility and simplicity.
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1.4 Operating activities
Orange provides B2C and B2B customers and other telecommunication operators with a wide range of connectivity services, such as fixed and mobile telecommunications, data transmission and other value-added services, including Mobile Financial Services. The Group is present as an operator in 26 countries. In addition to its role as a supplier of connectivity, the Group provides enterprise services, primarily solutions in the fields of digital work, security and improving business line processes. As part of its global approach to development, it also offers access to some services (financial, energy, health, education) aiming at covering the essential needs of populations by leveraging its connectivity offer. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
For consistency with the segment information in the Consolidated Financial Statements, the Group’s activities are presented below by business segment (or group of segments): France, Europe, Africa & Middle East, Orange Business, Totem [4], International Carriers & Shared Services, and Mobile Financial Services.
The results of Orange’s activities in 2023 and its principal operating indicators in its various business segments are set out in Section 3.1 Review of the Group’s financial position and results. Information on the business segments’ performance and objectives is also available in Section 1.2.3 The Orange group strategy.
Unless otherwise indicated, the market shares indicated in this chapter relate to market shares in terms of volume, and the data related to customers does not include SIM cards dedicated to connected devices (Machine to Machine - M2M).
1.4.1 France
Orange is France’s incumbent telecommunication operator (see Section 1.1.3 History). The bulk of its business is carried by Orange SA, which is also the parent company of the Orange group.
The France business segment includes all fixed and mobile communication services to individuals and companies with fewer than 50 employees [5] in France [6] as well as wholesale services. Activities developed for companies with more than 50 employees, content activities and Mobile Financial Services are covered in Sections 1.4.4, 1.4.6 and 1.4.7 of this document.
In 2023, the France business segment generated 38.5% of the Group’s consolidated revenues.
The market
In the first nine months of 2023, telecommunication operators’ revenues on the retail market rose by +2.2% on an annual basis (source: Arcep, third quarter 2023). In volume terms, however, market growth is decelerating.
While fixed narrowband telephony revenues continued their downward trend as a result of the steady decline in the number of copper network lines, fixed broadband telephony revenues continued to grow due to the increasing number of accesses. This growth was driven by the rapid development of FTTH. At the end of the third quarter of 2023, 20.6 million customer accesses were connected to FTTH, which represents year-on-year growth of 3.4 million, compared with year-on-year growth of 3.7 million at the end of the third quarter of 2022 (source: Arcep, third quarter 2023).
At September 30, 2023, revenues from mobile services on the retail market had also risen by 3.0% in the first nine months (source: Arcep, third quarter 2023).
The French broadband and very high-speed broadband Internet market is dominated by four main operators, which account for over 96% of broadband customers. Orange’s market share was virtually stable in 2023, at 39.0% in the third quarter of 2023, and Orange remains the leader on this market, ahead of Free, Altice-SFR and Bouygues Telecom (ranked second, third and fourth, respectively, by number of customers) (Source: Orange estimates).
The French mobile market is dominated by the same four operators as the fixed market, which account for 93% of mobile customers. With a market share estimated at 33.1% in the third quarter of 2023, Orange has maintained its position and remains the leader on this segment as well, ahead of competitors Altice-SFR, Bouygues Telecom and Free (ranked second, third and fourth, respectively, by number of mobile customers) and all MVNOs (Source: Orange estimates).
Orange’s business activities
Orange France’s core business involves the provision of fixed telephony, broadband and very high-speed broadband Internet and mobile telephony services for the B2C and Pro-SME markets. Its strategy is based on greater bandwidth in fixed (fiber) and mobile (4G and 5G) networks, promoting the take-up of new services and conquering new areas of growth, while continuing to transform its Customer Relations (see Section 1.2.3 The Orange group strategy).
Mobile
In the B2C mobile market, Orange segments its offers into several ranges covering all customers, from those looking for just the essentials in terms of communications or Internet connectivity to those wanting the best smartphones and who have very intense connectivity uses in France and internationally. The Orange brand has six offers for the mobile market, four of which are compatible with 5G technology.
Orange is present on all market segments, including on the entry-level market. In addition to the Orange brand, Orange France also proposes under the Sosh brand several types of mobile subscriptions at attractive prices, only available online, with no commitment and no handset. Since June 2023, 5G has been marketed on Sosh. At the end of December 2023, Sosh had 4.8 million mobile customers.
Since 2015, all the offers sold by Orange are at least 4G compatible, including entry-level market offers. Since 2020, some of these offers are also 5G compatible. Orange is continuing its family focused strategy with the development of multi-line plans through its flagship I+M (Open) offer. I+M (Open) mobile offers are available in the same ranges as conventional mobile offers and include the same levels of service.
Segmenting offers on the B2C and Pro-SME markets allows Orange to continue to grow its subscriber base while the decline in prepaid services continues (see Section 3.1.3.1.5 Additional information - France). At the same time, the MVNO customer base hosted on the Orange network reached more than 1 million customers at end-December 2023, down slightly from end-2022 due to the acquisition of two MVNOs by Bouygues Télécom and SFR.
Fixed telephony and Internet
In the B2C broadband Internet market, Orange segments its offers into three main categories: Livebox, aimed at customers looking for Internet and TV essentials; Livebox Up, which meets the needs of those wanting the best speeds and a premium TV experience; and, lastly, Livebox Max, which adds in a premium WiFi service. In October 2023, Orange updated this offer with Livebox 7, a new box compatible with Wi-Fi 6E and with speeds of 5 Gbit/s. Livebox 6 and Wi-Fi 6E are now part of the Livebox Up offer.
Sosh has also been present on the broadband Internet market since 2018, with affordable offers, available exclusively online and with no commitment.
The Orange and Sosh broadband Internet access offers are marketed using FTTH technology in eligible areas, or otherwise ADSL. Orange is the market leader in terms of the number of FTTH accesses sold, with a total of more than 8.2 million subscribers at end-2023 over a scope including B2C, professionals and small and medium-sized businesses.
With the steady growth in full unbundling, as well as wholesale subscriptions and naked ADSL access to third-party Internet service providers, the decline in revenues generated by the conventional telephony service business continues.
Since November 27, 2020, Orange is no longer the operator responsible for providing universal services including connection to a fixed network and telephony service (see Section 1.7.2.3 Regulation of fixed telephony, broadband and very high-speed broadband Internet).
Orange also pursues advertising network activities through its websites, which have over 24.4 million unique visitors each month (source: Médiamétrie - Overall Internet Audience in France in November 2023).
Wholesale
Orange Wholesale France (OWF) markets infrastructure, connectivity, fixed and mobile network solutions, and wholesale services in France. In turn, it purchases these services from third-party operators for Orange France and its end-customers. The Group is the leader on this market in France. Its main rivals are other network operators as well as infrastructure operators, such as Altitude and Axione.
The OWF business includes the interconnection of competitive operators, wholesale subscription and traffic services (ADSL and fiber) regulated by Arcep (see Section 1.7.2.3 Regulation of fixed telephony, broadband and very high-speed broadband Internet) and the construction and marketing of very high-speed broadband fiber optic networks.
The unbundling of access to the copper network is a structurally declining business due to the gradual closure of this network (see The network section below). The fiber network is marketed to rival operators according to two methods: leasing or co-financing of lines. Co-financing requires a basic investment for third-party operators, plus recurring maintenance fees. After having increased significantly in 2020, revenues from co-financing have been decreasing since 2021 as the fiber roll-out reached maturity. The timing of co-financing payments to be received by Orange is highly dependent on the purchasing strategies of third-party operators in connection with the development of fiber and the policies of investment funds.
On December 18, 2023, Arcep published the regulatory framework for fixed networks for 2024 to 2028, aimed at defining the framework for unbundling rates and access to civil engineering, while enabling Orange to increase its rates.
Lastly, since 2011, Orange has been providing Free Mobile with a nationwide roaming service on its 2G and 3G networks. That service was extended until the end of 2025. See Section 1.7.2.2 Regulation of mobile telephony - Infrastructure sharing.
Distribution
Since 2020 and the Covid-19 health crisis, the sales channel mix has been deeply disrupted.
Orange France is pressing ahead with its digital development strategy, with a fully digital customer experience in Orange online stores (available on Orange.fr) and Sosh (via Sosh.fr), with Sosh offers only available on the digital channel. In 2023, the number of sales made through the digital channel decreased by 0.3% compared to 2022, mainly due to changes in consumer habits. They account for one-third of all sales.
The dedicated customer call centers based on the type of services marketed account for 18% of sales. Their number decreased by 10% compared to the same period in 2022.
The network of retail stores across France consisted of more than 500 stores at the end of the fourth quarter of 2023. Retail stores accounted for 44% of sales year on year. The volume of sales made through this channel fell by 2% compared to 2022.
Lastly, the number of sales made through other channels, such as direct marketing, door-to-door and the multi-operator network, decreased by 10% compared to 2022. They account for 5% of overall sales volumes.
The network
Orange’s commercial leadership is built partly on its leadership in fixed and mobile networks.
Orange continued to roll out its fiber optic network at a steady pace in 2023. In France, the Group gave nearly 3.9 million additional premises access to Orange FTTH during the year (after nearly 5 million in 2022). At end-2023, just under 37.4 million premises were connectable to Orange fiber, a number that includes fiber rolled out to Orange’s own networks and third-party networks. According to the observatory report on subscriptions and the roll-out of high-speed and very high-speed broadband (Observatoire des abonnements et déploiements du haut et très haut débit) (source: Arcep, third quarter 2023), more than 18 million (i.e. nearly 49%) of the total connectable premises in France owe their connectability to Orange as an infrastructure operator (own infrastructure). This data does not take into account the networks built and operated by Orange Concessions in Public Initiative Networks (PIN) regions (see below).
On January 31, 2022, Orange submitted a copper network switch-off plan to Arcep. Arcep published the plan for public consultation from February 7 to April 4, 2022, and then on July 29, 2022 published a Q&A document with the clarifications and adjustments Orange had made to the plan. The plan states that, during the first phase of the transition, which began in 2020 and will continue until the fiber network roll-out is completed in 2025, copper connection sales will be discontinued on a case by case basis insofar as the four telecom operators have rolled out fiber up to the base point. At the end of 2022, sales had been discontinued on nearly 20 million copper connections. This phase also includes switch-off experiments on a few hundred thousand premises. The first batch of switch-offs was thus launched on December 13, 2022, with the actual shut-off expected in January 2025. From 2026, Orange will no longer sell new ADSL subscriptions and the large-scale switch-off of the copper network will begin. By 2030, it will concern the entire network.
For the mobile network, the roll-out of 4G continued, with an unchanged coverage rate of 99% of the French population, still the best 4G rate in the country (source: Orange estimates). At January 1, 2024, Orange had 31,916 authorized 4G sites in France [7] (source: Observatoire ANFr (French national spectrum agency observatory), January 1, 2024).
For the thirteenth consecutive time, Orange’s mobile network was ranked number one by Arcep in 2023 (see Section 1.3 Significant events).
On the 5G side, at January 1, 2024, France had 43,673 5G sites authorized by ANFr, of which 21,295 sites were technically operational in the 3.5 GHz spectrum. Orange operates 8,711 of these sites (source: Observatoire ANFr (French national spectrum agency observatory), January 1, 2024). Since November 2016, the spectrum managers of the European Union Member States have recommended the use of the 3.5 GHz band as the primary band for the introduction of 5G.
In March 2022, Orange announced the phasing out of its 2G and 3G mobile networks by 2030 in all countries where the Group is present in the European Union.
Orange Concessions
In 2021, to continue to roll out fiber in rural areas and enhance its infrastructure, Orange consolidated the 24 Public Initiative Networks (PINs) governed by contracts with local authorities, in mainland France and in French Overseas Territories, into one entity, Orange Concessions. For this project, it joined forces with long-term, well-known investors in both infrastructure and local development. Orange Concessions is 50/50 owned by Orange and the HIN consortium comprising La Banque des Territoires (Caisse des Dépôts et Consignations), CNP Assurances and EDF Invest. The joint venture is now recognized under associates and joint ventures in the Group’s financial statements (see Note 3.2 to the Consolidated Financial Statements).
Orange Concessions has been operational since November 2021. Assisting local authorities in the digital planning of their territory, it oversees the design, construction and operation of fiber networks, relying on Orange as the leading industrial partner, and handles the marketing to all commercial operators (ISP) in order to offer fiber to their end-customers. Orange Concessions continues to roll out fiber in rural areas in France while sharing the investment effort with its shareholders.
At December 31, 2023, Orange Concessions had made 3.4 million households connectable to fiber and had nearly 1.5 million connected customers. By 2026, the joint venture is expected to be operating nearly 4.6 million FTTH accesses, which will make it the leading infrastructure operator on Public Initiative Networks.
1.4.2 Europe
Outside France, the Group operates in seven countries in Europe, where it is implementing its convergence strategy based on the local context and drawing on the strengths of its subsidiaries:
− in Spain, where the Group is number two in the fixed and mobile markets, and where it created a joint venture with MásMóvil to combine their Spanish activities;
− in Poland, where the Group is the incumbent operator, leader in fixed-line and number two in mobile;
− in Belgium and Luxembourg, where the Group launched its convergent offers via partnerships and acquired 75% minus one share in VOO SA; and
− in other Central European countries (Romania, Slovakia and Moldova), where the Group, as the leader in the mobile segment, is a convergent player through the roll-out of fiber and its partnerships or acquisitions.
In 2023, the Europe segment represented 25.9% of the Group’s consolidated revenues.
1.4.2.1 Spain
The Group has been present in Spain since the deregulation of the telecommunication market in 1998. Initially operating in the fixed telephony market, it acquired mobile telephony operator Amena in 2005 before adopting the Orange brand in 2006. The acquisition of fixed telephony operator Jazztel in 2015 enabled Orange to consolidate its position in terms of convergence, thanks to Jazztel’s fiber coverage. In 2021, Orange Espagne consolidated its brand portfolio to focus on Orange, Jazztel and Simyo. In 2022, Orange and MásMóvil signed an agreement to combine their activities in Spain. In February 2024, the European Commission approved the Orange and MásMóvil joint venture project. This favorable decision takes into account the specific features of the highly competitive Spanish market and provides balanced remedies for an existing operator. The agreement allowed the creation in March 2024 of a company controlled equally by Orange and MásMóvil, with equal governance rights at the level of the combined entity, which will have the financial capacity to continue to invest in the development of Spanish telecom infrastructure.
In 2023, the Group generated 10.5% of its consolidated revenues in Spain.
The market
Since the consolidation that began in 2014, four operators have dominated the telecom market: Telefónica, the incumbent operator, which acquired D+ in 2014 and operates under the Movistar brand; Orange; Vodafone, which acquired ONO in 2014; and MásMóvil Ibercom, initially an MVNO, which acquired Yoigo in 2016 and then signed a commercial agreement for access to Orange’s fixed and mobile networks, before acquiring Euskaltel in 2021.
In addition to competing in the B2B and B2C segments through their main brands, these four operators also compete via other brands in the low-cost market: Orange with Jazztel and Simyo; Telefónica with Tuenti and O2; Vodafone with Lowi; and MásMóvil with Pepephone and Euskaltel.
Together, the four convergent operators have a combined market share of over 90%, with Telefónica ranked first, followed by Orange (whose market share in the second quarter 2023 reached 19.6% for broadband Internet and 24.2% for mobile), then Vodafone (source: CNMC).
In 2023, the Spanish market was marked by continued growth in the low-cost offer market segment.
Orange’s activities in Spain
In a particularly competitive Spanish market, Orange Espagne’s priority in 2023 was to build on its growth by focusing on value management and a disciplined promotions policy. Its fixed and mobile networks have been major differentiators, for example due to the launch in February of 5G+ (5G SA network), already rolled out in 51 towns and cities.
In this market, where volume growth is mainly in the low-cost segment, Orange Espagne has continued to create value with full market coverage. This is particularly true of the Orange brand in the premium segment (5G, soccer), where Orange is Movistar’s only significant competitor. Orange is also expanding in the entry-level and mid-range segments, owing to its fixed and mobile networks and its ability to adapt its cost structure.
In 2023, Orange Espagne launched the "Servicio impecable" program to significantly enhance the customer experience. It also continued to improve and simplify its IT systems and tools. Orange is a pioneer in Spain in the use of virtual robots, particularly in the context of improving its customer processes. In December 2023, Orange also launched a new channel on WhatsApp to share its offers and news more widely with the country’s population, irrespective of whether they are existing customers.
Orange Espagne has also accelerated its growth in B2B, particularly in the key accounts segment, with the addition of Adif, Port de Barcelona, Ayuntamiento de Madrid, Junta de Extremadura, Bosch, ING, Decathlon, Ibercaja, Iberdrola and Pelayo. Orange has continued to innovate for its B2B customers, for example through the use of its 5G SA network and a partnership with Ericsson enabling the creation of private 5G networks.
Ongoing efforts in customer satisfaction and network quality have helped reduce churn, with initiatives such as "HIT Wi-Fi AR," an augmented reality app developed by Orange, which allows its engineers to optimize Wi-Fi coverage throughout its customers’ premises.
The network
In 2023, Orange continued to roll out its fiber optic network by connecting 0.3 million additional households to FTTH over one year. At the end of 2023, Orange was able to offer an FTTH connection to 17.1 million Spanish households.
Orange also focused on the speed of its fixed network, accelerating the roll-out of XGSPON, reaching 1.5 million connectable households with a speed of more than 10 Gbps.
Orange Espagne completed the optimization of the 5G spectrum it had acquired at various auctions, enabling it to increase speeds by 60%. The network can now reach up to 1.5 Gbps. At the end of 2023, 5G population coverage reached 84%, beyond the coverage goal of 50%. Orange Espagne also continued to expand its 4G network, reaching coverage of 99% of the population at the end of 2023.
1.4.2.2 Poland
The Group has been present in Poland since 2000, when it acquired an interest in the incumbent operator, Telekomunikacja Polska (renamed Orange Polska). In 2006, Orange became the single brand for mobile activities and, in 2012, for all the fixed telephony services offered by the Group in Poland. Orange owns 50.67% of the shares of Orange Polska, which is listed on the Warsaw Stock Exchange.
In 2023, the Group generated 6.4% of its consolidated revenues in Poland.
Poland has four main mobile telephony operators: Orange, T-Mobile (owned by Deutsche Telekom), Polkomtel (operating under the Plus brand, owned by the Cyfrowy Polsat group) and P4 (owned by Iliad since end-2020, operating under the Play brand). At the end of 2023, these four mobile telephony operators accounted for 98% of the total number of SIM cards in Poland, and Orange was the leading operator, with market share of 28% (Source: Orange estimates).
Orange ranks first in the broadband Internet market, with market share of 27% at end-2023 (Source: Orange estimates). Its principal competition comes from cable TV operators (mainly UPC Polska and Vectra), as well as from Netia (part of the Cyfrowy Polsat group), a conventional telecommunication operator.
The Polish telecommunication market is highly competitive and relatively fragmented. Convergence has become a key element in new residential customer acquisitions. This environment has caused market consolidation to accelerate, in particular among fixed and mobile players. The Cyfrowy Polsat group acquired Netia in 2018. In 2020, Vectra acquired Multimedia Polska, creating the country’s leader in the cable market, Play completed the acquisition of Virgin Mobile, Poland’s biggest MVNO, and Iliad completed the acquisition of Play. In 2022, Iliad closed the acquisition of UPC Polska, the largest cable operator in Poland. This transaction made Iliad a convergent player in its own right on the Polish market. In the first half of 2023, Play transferred UPC’s infrastructure to a new company (Polski Światlowód Otwarty (PŚO)) and then sold 50% of PSO’s shares to InfraVia, a French investment fund. PŚO provides wholesale Internet access services to Play and has communicated its intention to open this network to other operators.
In 2021, Play and Polsat Plus Group also both sold their mobile infrastructure to Cellnex, a Spanish-based infrastructure investor. These transactions facilitated the arrival of a new player, who thus took a significant share of the mobile infrastructure market in Poland.
In 2021, Orange Polska completed the disposal of 50% of its FiberCo to the APG Group.
Orange’s activities in Poland
In 2023, Orange Polska continued to implement its strategic plan,.Grow, for the 2021-2024 period. Despite the many challenges posed by the macroeconomic environment and heightened competition, Orange Polska remains in line with its financial and operational ambitions.
Convergence remains a key growth driver, enabling the Group to gain and maintain customer trust and loyalty. In 2023, Orange Polska continued to focus its efforts on its Love convergent offers. Love is a package that includes both fixed and mobile services in its basic formula at an affordable price. It can be extended for higher fixed broadband speed, additional SIM cards, enhanced TV content and other value-added services.
The number of convergent customers continued to rise in 2023, reaching 1.70 million and now accounting for 71% of the total number of fixed broadband accesses. This growth was supported by strong sales for the fiber offer, with fiber customers accounting for 48% of the customer base at end-2023, an increase of six points compared with end-2022. Orange Polska now has more Internet customers on fiber than on copper, which is an important symbol of its technological transformation. This good performance was driven by strong demand for fixed broadband, as well as the continued growth of its presence in fiber, mainly due to partnerships with other fiber infrastructure providers. Orange Polska has been limiting the roll-out of its own fiber since it sold 50% of its shares in its FiberCo in 2021.
For several years, Orange Polska’s business strategy has focused on creating value by adjusting the price of its main online services according to the "more for more" principle. Orange Polska maintained this approach in 2023, taking high inflation into account as well, and thus increased the rates for its fixed and convergent offers.
In the B2B market, Orange Polska continued to strengthen its position as the preferred partner for the digital transformation of its customers. IT and Integration Services continued to enjoy robust growth, with a 14% increase in revenues compared with 2022 (on a comparable basis).
The network
Orange Polska continued the growth of its FTTH coverage in 2023, reaching almost 8 million connectable households at the end of the year.
In 2021, Orange Polska sold 50% of the capital of its Światlowód Inwestycje subsidiary (the Polish FiberCo) to the APG group. Orange and APG jointly control the Polish FiberCo, which is now recognized under associates and joint ventures in the Group’s financial statements (see Note 3.2 to the Consolidated Financial Statements). The FiberCo expects to connect approximately 1.7 million Polish households to fiber, mainly in areas with limited fixed broadband infrastructure. As a result of the creation of its FiberCo, future growth in Orange Polska’s fiber coverage will be achieved mainly through access to the FiberCo’s network, as well as the networks of other fixed infrastructure players.
In October 2023, Orange Polska acquired a 100 MHz spectrum block in the 3,400-3,800 MHz band ("C-band") for 15 years. The acquisition is expected to significantly boost the capacity of its mobile network, providing the necessary resources for the growth in traffic, as well as better quality of service. In the medium term, this spectrum should also open up opportunities for B2B customers.
Orange Polska is continuing to systematically modernize its radio network. As part of this project, active equipment is being replaced by more energy-efficient equipment that meets the latest technology standards.
In 2023, Orange Polska continued to operate its new 5G Lab, a place to develop and test solutions that use 5G, collaborate with start-ups, and present innovative solutions to businesses using the same 5G spectrum as the future Polish 5G network.
At end-2023, Orange’s 4G network covered 99.9% of the population (Source: Orange estimates).
1.4.2.3 Belgium & Luxembourg
In Belgium and Luxembourg, Orange operates via Orange Belgium and its subsidiary, Orange Communications Luxembourg. Orange Belgium is listed on the Brussels Stock Exchange. Following a takeover bid, completed on May 4, 2021, the Orange group now holds 78.32% of the capital of Orange Belgium. A long-standing player in the mobile segment in Belgium, in 2016 Orange launched convergent offers across the entire country based on the regulation of wholesale access to cable. In June 2023, in line with its convergence strategy, Orange Belgium finalized the acquisition of 75% minus one share of VOO, a cable and MVNO player in south Brussels and Wallonia.
In 2023, Orange Belgium generated 3.9% of the Group’s consolidated revenues.
Belgium
Orange has two main competitors in the mobile telephony market: Proximus (the incumbent operator, 53.5% owned by the Belgian State) and Telenet (100% owned by the Liberty Global Group, since the public takeover bid in October 2023), which acquired Base in 2016. With a market share of 30.9% in the third quarter of 2023, Orange ranks second behind Proximus (Source: Orange estimates).
The competitive structure of the fixed telephony market changed drastically in 2023, with three major events:
− in January 2023, Orange Belgium and Telenet signed two commercial wholesale agreements providing mutual access to their respective fixed networks;
− in June 2023, Orange Belgium finalized the acquisition of VOO. The transaction gives Orange Belgium 75% minus one share of VOO, with the rest of the capital still held by Nethys;
− In July 2023, Telenet and Fluvius created Wyre, their new "NetCo," which became the owner of their respective networks. The new joint venture will roll out a fiber network in Flanders.
Orange’s activities in Belgium
Throughout 2023, Orange continued its value and innovation strategy for its customers by introducing new offers on the market. In particular, the company:
− strengthened the Hey! brand by launching a new competitively priced fixed Internet subscription and doubling the volume of data in its mobile offers;
− launched new gigabit fiber offers, among a complete set of fixed Internet packages, with a choice of speeds ranging from 150 Mbps and 400 Mbps to 1 Gbps.
In 2023, taking advantage of the acquisition of VOO, and in line with its Lead The Future strategy, Orange Belgium became the first Belgian telecom operator to have a national gigabit offer, enabling the country’s inhabitants to benefit from high speeds of up to 1 Gbps on its high-performance cable network.
Orange Belgium also continued to focus on its 5G network, renowned for its speed - Opensignal has rated its 5G download speed as the best in Belgium - and its ability to come up with innovative applications. As a result, the Belgian federal government has chosen Orange Belgium to run 11 different 5G pilot projects.
Luxembourg
Orange started its operations in Luxembourg in 2007, via the acquisition of Voxmobile. The company adopted the Orange brand in 2009.
In the mobile segment, Orange Communications Luxembourg, with market share of approximately 15%, ranks third behind incumbent operator Post Luxembourg, the market leader, and Proximus Luxembourg, a subsidiary of Belgian operator Proximus, with its Tango brand (source: ILR, June 2023). Post Luxembourg also has the largest market share in the fixed-line and Internet market.
In 2023, Orange continued to adapt its portfolio, in line with its position as a challenger, while taking advantage of the 5G launched in 2020. The company is focusing on innovation and customer experience via the launch of its Livebox. It has also introduced new, comprehensive fiber offers in a simpler format, allowing it to meet its customers’ needs at an attractive price point.
1.4.2.4 Central Europe
Romania
Orange Romania was founded in 1997 and adopted the Orange brand in 2002. A long-standing player in the mobile segment, Orange launched its satellite TV offers in 2013, then its fiber offer in 2016, following a wholesale agreement with Telekom. In 2021, in line with its convergent ambitions in Romania, Orange acquired 54% of fixed telephony operator Telekom Romania Communications (TKR, now Orange Romania Communications - OROC), the remaining 46% still being held by the Romanian government.
In 2023, the Group generated 3.5% of its consolidated revenues in Romania.
The Romanian telecommunication market is dominated by four operators, three of which provide convergent services, namely Orange, Vodafone, and RCS&RDS (operating under the Digi brand, owned by Digi Communications), and one mobile operator, Telekom (owned by OTE, itself jointly controlled by Deutsche Telekom and the Greek government).
On November 21, OTE announced that negotiations were under way for the sale of Telekom Romania Mobile to Quantum Projects Group, a company controlled by the owner of the Romanian media group Clever Media. According to a press release, an agreement has been signed and the deal has been submitted to the relevant authorities for approval.
In the mobile telephony market, Orange’s market share was estimated at 36% at the end of the first half of 2023. Orange has maintained its leading position, followed by Vodafone, Telekom and Digi (source: Ancom, first half 2023).
With the acquisition of OROC and the launch of its own fiber network, Orange has strengthened its position on the fixed market, which is nonetheless still dominated by Digi.
Orange’s activities in Romania
In 2023, Orange reached new milestones following the acquisition of OROC, successfully migrating OROC MVNO customers to the Orange network and finalizing the satellite migration. On December 29, Orange and the Romanian government announced an agreement to merge Orange Romania and Orange Romania Communications. The two shareholders confirmed their intention to create a fully converged telecommunication operator via the absorption of OROC by ORO. The deal was finalized with the merger agreement signed on March 21, 2024 with the Romanian State defining the terms of the merger by absorption of Orange Romania Communications by Orange Romania, the Romanian State keeping a stake in the combined entity.
At the end of 2023, Orange Romania had 9.5 million mobile customers, 1.1 million fixed Internet customers and 1.1 million television customers. Customers are counted by "RGUs" (revenue generating units).
On the network side, Orange continued to ramp up its 4G operations, with population coverage now reaching 98.77% nationwide and 99.72% in urban areas (source: Orange estimates).
In 2023, Ookla named Orange Romania as having the fastest fixed network in Romania. In addition, according to Ancom, Orange has had the highest average mobile and fixed speeds over the past six years. Meanwhile, independent auditor LCC International considers Orange Romania to be the best Romanian mobile network on account of the performance of its Voice and Data mobile services, both in urban and rural areas.
As the Group’s first country to market 5G, Orange Romania continued to roll out its 5G network, available in 38 cities at end-2023, and launched 5G+, with speeds reaching up to 1.5 Gbps. The second Orange 5G Lab opened in Iasi. Six new start-ups joined the Orange Fab program following a call for projects dedicated to 5G. Orange also announced its participation in six international consortia under the Horizon Europe program. This will contribute to the sustainable development of 5G and pave the way for 6G.
Orange Romania also came up with innovative new offers. For example, during the second half of 2023, 5G and eSIM technologies were rolled out for prepaid customers. In addition, Orange Romania launched Fibra 2300, the fastest fiber subscription in the country, with a download speed of up to 2,100 Mbps and an upload speed of 1,000 Mbps, as well as high-performance equipment such as the Wi-Fi 6 router and Mesh Ultra Wi-Fi 6 technology, which boosts Wi-Fi coverage.
In 2023, as part of its CO2 emissions reduction program, Orange Romania installed rooftop solar panels at two additional Data centers, in Brasov and Timisoara. Orange Romania also signed a contract with ENGIE for the virtual purchase of long-term renewable energy. Under this contract, Orange Romania will generate 30 GWh of its annual electricity needs from solar panels over the next six years. Orange Foundation Romania opened its new training facility, the Orange Digital Center, with the aim of bridging the digital divide.
In August 2023, Orange announced that it had reached an agreement on the transfer of Orange Money’s retail business to Alpha Bank Romania.
Slovakia
Orange Slovensko started operating in 1996 and adopted the Orange brand in 2002. A long-standing player in the mobile segment, Orange Slovensko strengthened its position in convergent offers thanks to its own fiber roll-out program and the launch of fixed solutions via LTE in 2017.
In 2023, the Group generated 1.3% of its consolidated revenues in Slovakia.
Slovakia’s fixed broadband market is dominated by the incumbent operator, Slovak Telekom (owned by the Deutsche Telekom group), which has infrastructure covering the entire country. Orange Slovensko ranks second, with a market share of 17.6% (source: Orange estimates). Nevertheless, the roll-out of its proprietary fiber optic network and regulated access to Slovak Telekom’s fixed network allow Orange Slovensko to provide fixed broadband services to the largest number of potential customers.
Orange Slovensko has three main competitors in the mobile telephony market: O2 (owned by Emirates Telecommunication Group Company), Slovak Telekom (owned by Deutsche Telekom) and Swan (national operator, operating under the 4ka brand). 4ka began offering mobile services in October 2015, but remains a marginal player. With a market share of 31.7% (source: Orange estimates), Orange Slovensko remains the market leader. In 2022, O2 moved into second place on this market, followed closely by Slovak Telecom.
Orange’s activities in Slovakia
In 2023, Orange Slovensko continued to implement its strategy, which consists of strengthening its position in the convergence market, backed up by its substantial market share in mobile telephony combined with growing market share in fixed telephony and TV.
Orange Slovensko markets a number of innovative offers, particularly its Love convergent services. In 2023, Orange Slovensko focused on streamlining its portfolio of fixed and mobile offers and making them more attractive, while enhancing its customer loyalty program and adding security services. In the B2B segment, Orange Slovensko has entered a new era of enterprise services thanks to 5G, while continuing to develop AI and IoT solutions with a focus on cybersecurity.
Alongside the improvement in its portfolio of offers and the customer experience, Orange Slovensko has demonstrated its commitment to climate action through an ambitious program to roll out solar panels to its mobile antennas. At the end of 2023, 470 had already been equipped. Orange is the only Slovak operator to implement such a large-scale program. Every base station that is equipped with solar panels prevents the emission of several hundreds of kilos of CO2 per year.
In 2023, Orange Slovensko continued its partnerships with the Slovak University of Technology and the University of Zilina to develop 5G solutions for Slovak industry. This partnership aims to improve students’ access to 5G technologies and create a space to develop 5G solutions for Industry 4.0.
Orange Slovensko also continued to invest in its network infrastructure. The 5G network, launched in 2021 in Bratislava and Banska Bystrica, reached 65.6% of the population at the end of 2023. The Orange mobile network was recognized as the best in Slovakia for the fourth consecutive year by Commsquare (formerly "Systemics PAB"). Orange also expanded its own FTTH network, reaching more than 585,000 connectable households at end-2023, and can provide fiber services to nearly 600,000 additional households through network partnerships.
Moldova
Orange Moldova started operating in 1998 and adopted the Orange brand in 2007, celebrating its 25th anniversary in October 2023. During this time, Orange Moldova has become the telecommunications market leader and a key player in the country’s economy. A long-standing player in the mobile segment, Orange Moldova launched its fixed and convergent telephony services in 2017, following the 2016 acquisition of SUN Communications, Moldova’s main cable operator. In 2023, Orange Moldova merged with Sun Communications to streamline its organizational structure.
In 2023, the Group generated 0.4% of its consolidated revenues in Moldova.
Moldova’s main telecommunication operators are Orange Moldova, Moldcell (part of a Nepal-based conglomerate since 2020) and Moldtelecom. Moldtelecom is the incumbent operator; its infrastructure provides both fixed and mobile services. It is the leader in Internet and fixed telephony. In 2023, with a market share of 50.1%, Orange maintained its number one position in the mobile telephony market, followed by Moldcell and Moldtelecom (source: Anrceti Report, third quarter 2023).
Orange’s activities in Moldova
In 2023, Orange Moldova continued to pursue its strategic goals, despite the challenging macroeconomic conditions and geopolitical uncertainty due to the armed conflict in neighboring Ukraine.
In 2023, in line with its ambition to bolster its position in fixed broadband and become the country’s first fully convergent operator, Orange Moldova rolled out fiber in more than 20 new locations and expanded coverage in the country’s two largest cities. Orange Moldova also successfully completed its fiber migration project, migrating all its cable customers to the new fiber technology. As a result of this project, it has been able to improve the customer experience and decommission its cable network.
Achieving a leadership position in the mobile segment remains a priority for Orange Moldova, which reached 2.3 million mobile lines at the end of the third quarter of 2023. Amid persistent inflation in 2023 and to promote revenue growth, Orange Moldova revised the price of its plans with a "more for more" approach. It also launched a more expensive prepaid kit. To boost value creation, a new portfolio of plans was unveiled in the fourth quarter of 2023. This included the flagship "Roam like Home" offer, a premium plan available in Europe from December 21.
In the B2B segment, Orange Moldova focused on IT&IS growth, differentiating itself and increasing its market share by expanding its portfolio of offers, with new services such as mobile PBX, customer satisfaction scoring and cybersecurity solutions.
The company doubled down on its CSR commitments by opening its Orange Digital Center, a digital training hub, and launching its "RE" platform, an umbrella for its circular economy projects (in-store recovery of unwanted phones, sale of refurbished devices). It also unveiled new initiatives in 2023, including the launch of the "Trade-in" program and the first "RE" space in an Orange store.
Orange Moldova also continued to invest in the country’s infrastructure. The company operates the most extensive and fastest 2G/3G/4G network, with 4G population coverage of 99%. For the eleventh consecutive year, Orange Moldova’s network was rated "Best Moldovan mobile network in the test" by Polish company Systemics PAB.
1.4.3 Africa & Middle East
The Orange group is present in 18 countries in Africa & Middle East, including 16 where it has controlling interests and two (Tunisia and Mauritius) where it has minority interests. Part of the activities are structured into sub-groups (Sonatel and Côte d’Ivoire). Orange operates in both the mobile and fixed markets.
The mobile markets are mainly prepaid markets, largely driven by the accelerated development of data and digital uses. Orange is pursuing a 4G roll-out strategy and is investing in all countries to upgrade and extend their access networks. The first 5G roll-outs took place in 2022, continued in 2023, and will accelerate to cover almost the entire region by 2025.
Despite increasingly intense competition, the Group also saw rapid development in multi-services, particularly Mobile Financial Services with its Orange Money offer and digital services with the mobile super-app Max it. Given the arrival of a new competitor in four countries in the region (Senegal, Côte d’Ivoire, Mali and Burkina Faso) in 2021, Orange changed the business model for its offer and accelerated its digitization, but was still significantly impacted in 2021 and 2022. By fostering a collective response, the Group was able to bounce back in its various geographical regions (with the exception of Senegal, where its leadership remains contested at this stage). At the same time, Orange Money reported revenue growth of 25.8% and an increase of 17.1 million in its customer base in 2023 (up 22.5% from 2022). It now has 92.9 million customers, 34.1 million of whom are active customers using the service each month. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
In digital services, Orange aims to become the benchmark digital operator in Africa & Middle East. The sector has been a growth driver for the Group for many years and remains a key component of its strategy (see Section 1.2.3 The Orange group strategy). The digital strategy is spearheaded by the mobile super-app "Max it," initially launched in five countries in November 2023 (Cameroon, Senegal, Mali, Burkina Faso and Botswana). It will be rolled out across the sector by the third quarter of 2024. This is a perfect example of the Group’s strategy to diversify services in response to the needs of local communities. More than just an app, it is a services portal that everyone can access, designed to make day-to-day life easier and satisfy a wide variety of needs. It brings together three essential service offers in a single smartphone interface: telecom capabilities, mobile payment and money transfer solutions with Orange Money, and an e-commerce universe offering digital content as well as innovative digital ticketing. The service universe will be completed over the course of 2024 and 2025 through Orange Energy, Healthcare, Insurance and Education in particular.
In the fixed broadband market, Orange is speeding up the roll-out, particularly of fiber; it had 1.2 million customers at end-2023.
Besides a challenging geopolitical situation, countries in the Africa & Middle East business segment are tending to see tighter regulations on quality of service and compliance with environmental standards, as well as a high tax burden.
In 2023, the Africa & Middle East segment accounted for 15.8% of the Group’s consolidated revenues, versus 15.5% in 2022.
1.4.3.1 Sonatel sub-group
The Sonatel sub-group operates under the Orange brand in five countries. With operations in Senegal dating back to 1997, it began its international development in Mali in 2002. It also operates in Guinea, Guinea-Bissau (operations launched in 2007) and Sierra Leone, where it acquired Airtel Sierra Leone in 2016. In 2023, it generated 5.5% of the Group’s consolidated revenues. The Orange group owns 42.33% of the Sonatel sub-group and has control based on a shareholders’ agreement (see Note 20 to the Consolidated Financial Statements). Sonatel is listed on the West Africa Regional Stock Exchange (Bourse Régionale des Valeurs Mobilières - BRVM).
With mobile market volume shares of 57.7% in Senegal, 69.3% in Guinea, 55.6% in Mali, 63.5% in Guinea-Bissau and 53.4% in Sierra Leone (source: Orange estimates, fourth quarter of 2023), Orange is the leader in all its geographical areas.
Value market share is as follows: 84.4% in Guinea, 68.8% in Mali, 76.8% in Senegal and 80% in Bissau.
Depending on the country, the Group has two or three competitors: Free (whose brand was launched in October 2019 to replace Tigo) and Expresso (Sudatel group) in Senegal; Sotelma/Malitel (Maroc Telecom group) and Alpha Telecom (Planor-Monaco Telecom International consortium) in Mali; MTN and Cellcom in Guinea; MTN in Guinea-Bissau; and (the incumbent operator), Africell and QCell in Sierra Leone.
The Sonatel sub-group continues to develop very high-speed fixed and mobile broadband based on 4G/4G+ (and tests for 5G), FDD/TDD and fiber, as well as mobile data. In 2023, data services achieved double-digit growth in all sub-group countries.
The multi-services business gathered pace in 2023, both in relation to the Orange Money service - which continued to see overall growth in its active customer base and total annual transaction value - and in relation to digital multi-services with the launch of the mobile super-app Max it in Senegal and Mali.
Despite increasing competition, often unfavorable regulatory decisions and political instability in some countries, the Sonatel Group was able to maintain its financial equilibrium in 2023 owing to steady growth and increased profitability.
The Sonatel group is a key player in the economic development of all the countries where it operates through digital, financial and energy inclusion [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. It also helps support health care, education, local entrepreneurship and the development of a true digital ecosystem.
1.4.3.2 Côte d’Ivoire sub-group
The Côte d’Ivoire sub-group operates under the Orange brand in three countries. The activity covers Côte d’Ivoire, where the Group has operated since 1996, and Burkina Faso and Liberia, where it acquired Cellcom Liberia and Airtel Burkina Faso in 2016. This represents an area with a population of more than 56 million. In 2023, it generated 3.4% of the Group’s revenues. The Orange group owns 72.5% of the Côte d’Ivoire sub-group.
Orange is the leader in Côte d’Ivoire, Burkina Faso and Liberia. In Côte d’Ivoire, it has a 47.5% market share (source: Artci, third quarter 2023). In Burkina Faso, Orange holds a market share of 45.9% of mobile subscribers (source: Arcep BF, third quarter 2023). In Liberia, Orange strengthened its leadership position with a market share of 54.6% (source: GSMA, third quarter 2023).
The three entities each face the following main competitors in their geographical region: MTN and Moov Africa in Côte d’Ivoire; Moov Africa and Telecel in Burkina Faso; and MTN in Liberia.
Orange is also the market leader in Mobile Financial Services in Côte d’Ivoire and Burkina Faso. In light of the intense competitive pressure tied to Wave’s arrival in Côte d’Ivoire and Burkina Faso, the response plan implemented by Orange Money helped accelerate growth in uses and value in 2023.
In 2023, the sub-group’s activity was affected by widespread inflation in the countries in the region, stiff competition and a challenging security situation in Burkina Faso. In Liberia, the year saw a sharp depreciation of the Liberian dollar, presidential elections and the accession to power of a new President.
FTTH development became one of the sub-group’s most powerful growth drivers. At end-2023, Orange had close to 220,000 customers in Côte d’Ivoire. In Burkina Faso, Orange launched the FTTH service in June 2021 and had over 23,000 customers at the end of 2023.
The Côte d’Ivoire sub-group ensures that its strategy, investments and innovation create lasting value for all stakeholders. Digital equality and environmental footprint reduction are central to the CSR strategy of the sub-group, which has consistently strengthened its social impact through various initiatives based around entrepreneurship, financial inclusion [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] and the environmental transition. For the second consecutive year, the sub-group published its Social Report, aimed at all stakeholders, in which it presented its achievements and ambitions.
In December 2022, the Côte d’Ivoire sub-group reached a major milestone in its development strategy with its initial public offering on the BRVM through the sale of nearly 15 million shares owned by the Ivoirian government, equivalent to 9.95% of the capital.
1.4.3.3 Countries in North Africa and the Middle East
Egypt
The Orange group entered the Egyptian telecommunication market in 1998 through a partnership in the operator, Mobinil, with Orascom and Motorola. It gradually increased its stake following the withdrawal of Motorola in 2000 and Orascom in 2015. Since 2016, all services have been marketed under the Orange brand. In 2018, Orange Egypt was delisted from the Egyptian Exchange. In 2023, the Group generated 1.7% of its consolidated revenues in Egypt.
After a period of considerable market slowdown in 2017 and 2018 following the introduction of a tax on mobile subscriptions, and the impact of the health crisis in 2020, the pace of the increase in the number of mobile subscriptions that began in 2021 continued in 2023.
With a share of the mobile market of 26.25% (source: GSMA, third quarter 2023), Orange ranks second in the market, behind Vodafone but ahead of Etisalat and WE (Télécom Egypt).
In 2023, Orange Egypt recorded double-digit revenue growth, exceeding its growth in 2022 despite an unstable economic environment, significantly affected by high inflation and a series of sharp devaluations of the Egyptian pound from March 2022. The company continued to implement its transformation plan to increase its profitability.
Morocco
The Orange group entered the Moroccan telecommunication market in 2010 through a partnership with Médi Telecom. The company, which was operating under the Méditel brand, became a consolidated subsidiary of the Group in July 2015, after Orange increased its interest to 49% of the capital. Since the end of 2016, all services have been marketed under the Orange brand. In 2023, the Group generated 1.6% of its consolidated revenues in Morocco.
With 32.5% of the mobile market, Orange is the country’s second-largest mobile operator (behind the incumbent operator, Maroc Telecom, and ahead of Inwi) (source: ANRT (Agence Nationale de Regulations des Télécommunications - National Telecommunications Regulatory Agency) - fourth quarter 2023).
In a Moroccan market where growth remains below GDP, Orange Maroc continued to grow in mobile telephony and to pursue its development in fixed telephony, particularly in fiber. At the end of 2023 it passed the 300,000 customer mark, equivalent to a 38% market share (source: ANRT - third quarter 2023).
A powerful earthquake hit the country in September 2023. The resilience of the network and the rapid response of Orange Maroc’s employees, particularly its technical teams, allowed connectivity to be restored in less than 48 hours in most of the affected areas, providing support to the authorities and public.
Jordan
The Orange group entered the Jordanian telecommunication market in 2000, through a partnership with the incumbent operator, Jordan Telecom. The company became a consolidated subsidiary of the Group in 2006, after Orange increased its interest to 51% of the capital. Since the end of 2007, all services have been marketed under the Orange brand. In 2023, the Group generated 1.0% of its consolidated revenues in Jordan.
With a share of the mobile market of 30.2% (source: GSMA, fourth quarter 2023), Orange is the country’s second-largest mobile operator, behind Zain and ahead of Umniah.
Orange is also a leader in the fixed market through its ADSL Internet offers, together with FTTH, launched in 2016 (source: internal estimates). Orange continued its large-scale fiber roll-out to all of the country’s major towns and cities, exceeding the symbolic threshold of 250,000 customers in October 2023. Zain and Umniah are also growing competitors in this segment. In addition, 2023 saw the commercial launch of the first 5G offers.
Orange also consolidated its position as digital market leader with the accelerated expansion of Orange Money, which opened 1 million accounts in 2023, as well as on Jood, the market’s first digital app.
Tunisia
Orange Tunisie launched its activity in May 2010 after acquiring its license in July 2009. The Orange group is a partner, with 49% of the capital.
Orange’s volume share of the mobile market is 26.5% (source: INT Tunisie monthly report, October 2023), placing it in third position behind Ooredoo, which maintains its leading position, and Tunisie Telecom.
In 2023, Orange Tunisie continued to strengthen its market position with growing customer bases and revenues. Orange Tunisia’s value market share (excluding FSI) is 23.6% (source: INT Tunisie half-year report, H1 2023).
1.4.3.4 Countries of Central and Southern Africa
Democratic Republic of the Congo
The Orange group entered the Congolese telecommunication market in 2011 through the acquisition of Congo Chine Telecom. In 2016, Orange acquired the Congolese subsidiary of the Millicom group, which operated under the Tigo brand. In 2023, Orange RDC generated 1.0% of the Group’s consolidated revenues.
Orange’s volume share of the mobile market is 26.6% (source: ARPTC (mobile telephony observatory), second quarter 2023), placing Orange in third place behind Airtel and Vodacom, which remains the market leader, and ahead of Africell.
In 2023, despite a 40% depreciation of the Congolese franc year on year, Orange DRC enjoyed solid commercial momentum, with revenue growth buoyed by the significant expansion of mobile data, Orange Money, B2B and the fiber optic launch in Kinshasa.
Orange was the first operator to launch 4G, and in 2023 continued to roll out mobile broadband network infrastructure to DRC’s main towns and cities.
The year 2023 was also once again marked by the intensification of regulatory and tax-related investigations by the various Congolese authorities.
Cameroon
The Orange group has been present in Cameroon since the liberalization of the telecommunication sector in 1999. All services, initially launched under the Mobilis brand, have been marketed under the Orange brand since 2002. In 2023, the Group generated 1.1% of its consolidated revenues in Cameroon.
With a market share of 48.6% in 2023 (GSMA fourth quarter 2023 estimates), Orange has become the country’s leading operator ahead of MTN, Nexttel and Camtel.
In 2023, Orange Cameroun once again achieved a very high level of business growth of 13.4%, buoyed by the very strong development of mobile data and Orange Money services and by the robust resilience of outgoing voice.
Orange Cameroun has finalized the transfer of financial activities to the new entity Orange Money Cameroun.
In addition, the official pan-African launch of the super-app Max it took place in Douala on November 24, 2023. This mobile services portal can be accessed by everyone, whether Orange customers or not.
Botswana
The Orange group has been present in Botswana since 1998, and since 2003 under the Orange brand. In 2023, the Group generated 0.3% of its consolidated revenues in this country. The Group holds a 73.68% stake in the company.
In 2023, Orange Botswana cemented its new status as market leader with a value market share of 37.6% (Orange Botswana internal estimates, third quarter 2023), ahead of Mascom and Be Mobile. On the volume side, Mascom remains the market leader with 43.2% market share, closely followed by Orange at 38.9% (source: BOCRA, a regulator, second quarter 2023).
Orange Botswana enjoyed excellent growth in its business of 11.8% in 2023, thanks to the continued success of its mobile data and Orange Money services,
In 2023, Orange Botswana officially opened its new data center in Gaborone, the country’s first Tier III infrastructure and an asset for Botswana.
Madagascar
The Orange group has been present in Madagascar since 1998, and since 2003 under the Orange brand. In 2023, the Group generated 0.2% of its consolidated revenues in this country. The Group holds an 87.94% stake in the company.
Orange is Madagascar’s second-largest mobile operator, behind the incumbent operator Telma and ahead of Airtel and Blueline, with market share of 24.5% (source: GSMA, fourth quarter 2023).
In 2023, the growth of Orange Madagascar’s business was attributed to voice, mobile data, the ongoing expansion of TDD fixed services (with the Wifiber offer, which remains highly popular), Orange Money’s activities in digital services and international transfers and B2B activities. In addition, 2023 also saw the ramped-up roll-out of mobile broadband network infrastructure to the country’s main towns and cities and Orange Madagascar’s acquisition of a global license.
Central African Republic
In 2023, Orange Centrafrique confirmed its leadership position on the Central African Republic market, ahead of Telecel and Moov, with market share of 57.1% (source: GSMA, fourth quarter 2023).
A very high level of growth (19.9%) was recorded in 2023. The solid financial performance is supported by further strong growth in voice services revenue, as well as the development of Orange Money services.
Orange Centrafrique completed the construction of a new data center in Bangui, which had been planned since the fire in 2021.
Mauritius
The Orange group has been present in Mauritius since 2000, through a partnership with the incumbent operator, Mauritius Telecom, in which it holds 40% of the capital.
Mauritius Telecom is the leader in Internet and fixed telecommunication services in Mauritius, ahead of DCL, and in mobile services, ahead of Emtel and MTML, with market share of 52.24% at end-2023 (source: GSMA, fourth quarter 2023).
The operator offers a comprehensive range of fixed and mobile voice and data services. It also offers convergent services (voice, IP and TV) through its MyT service. The first operator to launch 4G and a mobile payment service in 2012, Mauritius Telecom launched its fiber optic network (FTTH) in 2013 and now covers almost all of the country’s households and businesses. Mauritius Telecom was also the first operator to launch 5G in 2021.
One of the main growth drivers for Mauritius Telecom is content, with, in particular, a strategy of investing in premium content, enabling the company to strengthen its position as market leader.
Mauritius Telekom also offers international connectivity via fiber optic submarine cables.
1.4.4 Orange Business
The Orange Business (formerly Enterprise) business segment includes telecommunication services and digital services to key accounts, local authorities and companies with over 50 employees in France, as well as multinationals around the world.
Operating under its new Orange Business brand, Orange is a world-leading provider of support for the digital transformation of businesses. As an infrastructure operator, technology integrator and value-added service provider, Orange Business provides a complete portfolio of offers designed to assist its customers in carrying out their digital transformation projects and implementing their communication projects (connectivity, Internet of Things, Cloud, AI, app development). Combining the precision of a network and connectivity expert with the agility of a global digital solutions integrator, Orange Business balances its international presence with a local approach to help its customers get the most out of digital, networks and the Cloud via data and service platforms. With Lead the future, Orange Business is profoundly transforming its model to adapt to the new realities of a market where the boundaries between networks and digital services are disappearing. (see Section 1.2.3 The Orange group strategy).
Orange Business leverages the standards expected of it as an operator in terms of reliability and performance to drive its expansion in IT services through an ambitious acquisitions policy in Cloud Computing and data. This led to the acquisition of Business & Decision and Basefarm in 2018, of Exelus in 2022 and of Expertime, a services company specializing in Microsoft technology, in 2023. It was followed in early 2024 by the launch of Bleu, a future "trust Cloud" platform set up as a 50/50 joint venture with Capgemini, in partnership with Microsoft. In 2023, Enovacom, a healthcare subsidiary of Orange Business and the French market leader in medical data interoperability, acquired NEHS Digital and Xperis, two French companies specializing in the development of solutions for healthcare professionals, a sector in which the Group plans to accelerate its service provision. (see Sections 1.3 Significant events and 3.1.1.3 Significant events).
In 2018, Orange merged its cybersecurity activities into Orange Cyberdefense to ensure a high level of internal cybersecurity and simultaneously develop Orange’s commercial activities in this strategic area. Orange Cyberdefense combines the legacy security expertise and infrastructure of Orange with those of Atheos and Lexsi, acquired in 2014 and 2016, respectively, of SecureData and SecureLink, both acquired in 2019, and of the Swiss companies SCRT and Telsys, acquired in 2022. These acquisitions give Orange Cyberdefense a presence in nine European countries.
In 2023, the Orange Business sector generated 17.2% of the Group’s consolidated revenues.
The market
The health crisis accelerated the digital transformation of businesses (cloudification and softwarization of networks and services, digitization of customer relations, cybersecurity), but also had a significant impact on conventional telecom services (voice and connectivity) which have come under increased pressure due to the acceleration of new ways of working as well as the adoption of Cloud-based collaboration and connectivity solutions. The global economy is proving more resilient than expected, slowly recovering from the long-term effects of the Covid pandemic, the inflation crisis and the conflict in Ukraine. The disruptions in the energy and food markets caused by the war and the tightening of global monetary conditions to control historically high inflation have led to a further slowdown in global GDP growth. Global inflation was estimated at around 6.9% in October 2023, versus 8.7% a year earlier. It is forecast to be 5.8% in 2024 (source: FMI, October 2023). However, the prospects for improvement could be overshadowed by the emergence of new conflicts, especially in the Middle East, with human and commercial implications (for example, disruptions to logistics in the Red Sea).
The global communication services and IT services market corresponding to Orange Business’s activities stood at 1,571 billion euros in 2023, up 6% compared to 2022 (1,478 billion euros in 2022). This breaks down into 489 billion euros for communication services and 1,082 billion euros for IT services. The global communication services market is nevertheless expected to experience an average annual growth of 1.2% between 2023 and 2027. This unexpected growth was mainly due to the slowing decline of certain sub-segments, such as enterprise networks using MPLS technology, a market that is expected to decrease sharply over the period (6.3% in 2023, vs. an 8.3% decrease in 2022). The strong momentum in IT services is expected to continue, with 10.2% average annual growth between 2023 and 2027 (sources: Gartner, third quarter 2023/PAC, February & September 2022/IDC, November 2021 for IoT and September 2022 for Fixed Voice in France).
Faced with a highly competitive and fragmented telecommunication services and IT enterprise services market, encompassing numerous players such as telecommunication operators, network integrators, IT service providers, or even players from the Internet, digital or cybersecurity worlds, Orange Business has positioned itself as a leading European network and digital integrator. On the IT services market, Orange Business was ranked third in France with a 4.6% market share (source: Teknowlogy Group/PAC - May 2023 survey).
In the specific cybersecurity services market, Orange ranks as a major player, with one of the broadest footprints in Europe. Orange has the critical mass needed in this consolidating market, and the ability to support its customers locally in all their geographies. With 1.1 billion euros in revenues in 2023, Orange has set a target of becoming a cybersecurity leader in Europe on this fast-growing market and is aiming for 1.3 billion euros in revenues by 2025.
Orange Business activities
Orange offers a wide range of products and services, including those that are packaged or tailor-made and using different methods such as integrated, managed or Cloud, designed to guide businesses in their digital transformation, and structured around their main challenges (connectivity, mobility, streamlining of processes, smoothness of exchanges with customers and support for their projects).
Orange has structured its portfolio of offers around four main types of products and services:
− fixed telephony (conventional and IP) and audio conference services;
− mobile telephony services;
− network services, including certain service guarantee levels (mobile and fixed connectivity, data transfer, hybrid networks, fixed and mobile convergent services);
− IT and Integration Services, including Cloud solutions, digital & data solutions, cybersecurity solutions, intelligent mobility solutions, unified communication and collaboration services, and customer services and consulting:
- Cloud solutions include virtualization and the development of "aaS" (as a Service) solutions and business models that B2B customers are embracing. Orange Business has positioned itself as an integrator capable of orchestrating and building on the various application building blocks of its customers, including the most critical ones - end-to-end in a multi-cloud environment - for both the public or private Cloud. Beyond its own infrastructure (70 Data centers) and its 2,500 experts, Orange is developing a strategy of alliance with major industry players, such as Microsoft Azure, Google Cloud and Amazon Web Services,
- Digital & Data solutions, including the Business & Decision subsidiary and its 3,700 experts in data intelligence and digital solutions, comprise the integration and provision of systems, business apps and application programming interfaces (API), as well as the design of digital solutions for customers in Big Data, data analytics and artificial intelligence. Through its Enovacom subsidiary, Orange also offers healthcare players tailored solutions to meet the challenges of digital transformation,
- Cybersecurity solutions cover infrastructure and users, in managed and integrated or Cloud mode (safe work environments and infrastructure, cybersecurity, management and governance), and are supervised from a security operations center. Thanks to its 2,800+ experts and 32 detection centers, Orange Cyberdefense, which also has at its disposal multiple Orange Business locations around the world, leverages Orange’s 30 years of experience in making at-risk infrastructure secure, whether for SMEs, local authorities or multinational corporations around the world,
- Smart mobility solutions, based not only on mobile technologies, but also on the IoT (Internet of Things),
- unified communication and collaboration services, including interoperability between telephony, messaging and video conference solutions, in triple or quadruple play,
- lastly, advice and services to customers, including needs analysis, solution architecture, support from roll-out to implementation, user training and administration of services and solutions in a range of areas: transition to all-IP, adopting Machine to Machine and the Internet of Things, supervising and managing quality of service, switching to Cloud infrastructure solutions, and the digital transformation of companies.
These services are also used to develop cross-sector business solutions (finance, transport, energy, government and public sector, geolocation and fleet management, etc.).
As regards its core business as an operator, Orange relies on local and international partners to supplement its offer and geographical coverage in areas where its customers operate and where its presence does not provide a comprehensive solution. The Group is strengthening this type of partnership in the most developed markets, both on points of presence to optimally manage customer traffic, as with Equinix, and with leading operators in the geographic regions concerned, such as AT&T or NTT Communications.
Orange also works in close collaboration with an ecosystem of international technological partners, who are leaders in their respective fields of connectivity, unified communication, contact centers, Cloud infrastructure, effective data use and cybersecurity. In parallel with the digital transformation of enterprises, Orange strengthened various aspects of its solutions in 2023:
− development of a managed, secure connectivity offer. This solution, which contributes to the gradual shift in customer practices, especially toward the Cloud, also balances the continuity of existing practices via SD-WAN, SASE and SSE type solutions. In 2023, Orange developed and strengthened its ecosystem with new signings such as Cisco, Fortinet, Netskope, Palo Alto, VMware and Zscaler, among others;
− innovation around the Cloud. Since 2020, Orange has established strategic partnerships with the main hyperscalers (Microsoft Azure, Amazon Web Services, GCP) around data services, artificial intelligence, the Cloud, edge computing, mobile private networks and digital transformation. Furthermore, with sovereignty becoming a major topic of the digital transformation for businesses, Orange Business is pursuing two complementary development vectors: the first through an independent company named Bleu, a joint venture with Capgemini and in partnership with Microsoft as technology provider; and the second through its Cloud Avenue offering, developed in partnership with HPE and WMware.
Orange is developing partnerships with service players to enhance the operational performance of French manufacturers: for example, the partnership with Siemens in the Industry 4.0 segment in automation and digital transformation solutions, in order to allow French industrial groups to fully maximize the potential of digitization. In this perspective, the partnership proposes end-to-end support, ranging from consulting to integration and analysis.
Lastly, with regard to the Group’s CSR commitments, Orange is taking an increasingly green approach with its partners, particularly Apple (recycled mobiles) and Cisco (network equipment).
In 2023, Orange Business signed major contracts to support its customers worldwide, including Lucid Motors, the US electric vehicle manufacturer, to orchestrate the manufacturer’s customer experience in Europe via approved and tested electronic communication services (ECS) for Internet access services, as well as IoT; and with Stolt-Nielsen, the global expert in liquid product management and sustainable aquaculture, to provide it with a SASE (Secure Access Service Edge) solution combining SD-WAN connectivity with SSE (Security Service Edge) services to secure and optimize the connectivity of its teleworkers around the world.
1.4.5 Totem
Totem, Orange’s European TowerCo, was created on November 1, 2021. Orange has transferred all the key assets of its passive mobile infrastructure in France and Spain to this subsidiary. The creation of this independently managed entity allows Orange to strengthen its position as a manager and operator of mobile infrastructure and to benefit from new growth drivers. Totem manages close to 27,300 masts, flat rooftops and other mobile sites in its geographies, and aims to become a leading player in the European TowerCo market.
Totem offers infrastructure-sharing solutions to mobile operators, businesses and institutions; responds to requests to build new sites; and markets mobile coverage solutions to improve connectivity in dense and enclosed environments, such as stadiums, subways, shopping malls, offices, etc.
Totem has chosen a strong brand name that embodies its vision: mobile infrastructure is the totem of our digital civilization, offering connectivity solutions to everyone, everywhere, in both rural and urban areas. Totem’s mission is to unite all stakeholders - operators, local authorities, institutions, businesses and lessors - on its infrastructure to meet the growing need for connectivity.
Following the increase in the cost of debt (with the rise in interest rates), the leading TowerCos have prioritized operational efficiency over acquisitions, which dominated in previous years. The European leader Cellnex sold 49% of its subsidiaries in Denmark and Sweden and put its subsidiaries in Ireland and Austria up for sale to accelerate its deleveraging. American Tower sold its subsidiary in Poland to focus on its subsidiaries in Spain, Germany and France. In Western Europe, there were few transactions with low site volumes (Phoenix Towers: 2,400 sites in France; 200 sites in Germany; sale of 16.6% of Cornerstone (i.e. 15,000 sites) in the United Kingdom). The majority of transactions took place in Eastern Europe: E& (a UAE-based group) took control of five subsidiaries of the PPE group (10,000 sites), while Saudi TowerCo TAWAL took over 5,000 sites from United Group. In addition, the Austrian group Austria Telekom (A1) floated its 13,000 towers on the stock exchange.
In the second quarter of 2023, Totem remained the fifth-ranking European TowerCo by number of sites, behind Cellnex (107,000 sites), Vantage Towers (46,000 sites), GD Towers/Deutsche Funkturm (41,000 sites) and ATC Europe (31,000 sites). It is the only company controlled by a mobile telecommunication operator.
Totem is positioned to support the surging need for connectivity and to offer solutions to meet the emerging needs of operators who are looking for industrial partners. Its momentum is illustrated by the signing of new commercial contracts for the roll-out of 5G in the Orange Vélodrome, the construction of nearly 450 new sites in France to meet the connectivity needs of operators and the roll-out of small cell solutions in Spain and support for the 5G needs of operators in the country.
Totem is therefore positioned as a leading industrial TowerCo within the TowerCo ecosystem. Totem leverages its recognized strengths:
− an exceptional portfolio, in terms of both the density of its network and the quality of its mostly fiber optic sites;
− the expertise of its teams, who come mostly from the operator world and have extensive knowledge of customer expectations;
− the ongoing optimization of its industrial model;
− a 100% renewable energy supply in Spain where Totem is an energy supplier;
− sound CSR fundamentals.
In 2023, Totem earned revenues of 686 million euros, with growth in revenues from hosting and reconfiguration, partially offset by the decrease in revenues from re-invoicing energy costs, which have fallen. At end-2023, 16.7% of hosting revenues came from external customers. The tenancy ratio stood at 1.40 co-tenants per site, an increase of 3 basis points compared with its level at the end of 2022, in line with the target of 1.5 co-tenants per site by 2026.
In 2023, Totem generated 0.3% of the Group’s consolidated revenues.
1.4.6 International Carriers & Shared Services
The operating activities of the International Carriers & Shared Services segment include:
− international Carrier activities undertaken by the Orange Wholesale Division: roll-out of the international and long-haul network, sales of international telephony and international wholesale services, and installation and maintenance of submarine cable;
− the content activities of OCS and Orange Studio.
The services marketed to operators in France are presented in Section 1.4.1 France. The content distribution activities are briefly presented below, but their revenues are included in the revenues for the France, Europe and Africa & Middle East segments.
The segment also includes other cross-cutting activities of the Group, in particular research and innovation (see Section 1.6), lease property restructuring, and support and shared activities, including corporate functions at the operational head office.
The operating activities of the segment accounted for 2.2% of the Group’s consolidated revenues in 2023.
1.4.6.1 International Carrier activities
The International Carrier activities include sales of international telephony and services to international carriers, the negotiation and conclusion of roaming agreements, the roll-out of the international and long-distance network and the installation and maintenance of submarine cables.
The wholesale operator market comprises three categories of players: global wholesalers, multinational retail operators (including Orange) and regional or specialist players.
The wholesale market’s customer base comprises voice market specialists (call shops, prepaid cards), fixed and mobile domestic retail carriers (including MVNOs), Internet service and content providers and OTT (Over-The-Top) players. International Carriers also sell wholesale traffic to each other.
Orange Wholesale offers a broad range of solutions on the international market. Its business is structured on an extensive infrastructure of long-haul networks. Its presence in both the retail and wholesale markets means the Group can develop solutions that are particularly well adapted to the needs of retail operators.
Roll-out of the international and long-distance network
Orange Wholesale designs, rolls out, oversees and protects long-distance international networks, whether terrestrial, submarine or satellite. The Group defines and supplies this international infrastructure and is involved in building the networks and services from the design phase to their operation, as well as in fraud and cyberattack protection. It makes every effort to anticipate developments and adapt its networks to new technologies and emerging needs, using increasingly agile and flexible solutions.
These networks serve both retail and operator customers.
Changes in uses, technological changes and customers’ rising expectations for faster speeds and higher quality have put pressure on the Group to accelerate the development of all of its networks.
Orange is notable for being heavily involved in the design, construction and operation of submarine cable. With its ownership or co-ownership of several cable systems, Orange ranks among the world’s largest owners of submarine links. This has enabled it to respond to the increase in transatlantic traffic.
The Group’s wholesale activity is based on:
− a seamless global network and an IPX protocol network (see Section 7.2.2 Glossary of technical terms) supporting voice and data with points of presence throughout the world;
− a global network of dedicated IP routes with end-users in 177 countries, connections to more than 200 Internet service providers, and connectivity in over 100 countries in a single IP network hop;
− 99.99% network availability and centralized network supervision, 24/7.
In 2023, IP data traffic increased by 31 %.
Other highlights of 2023 included the announcement in December that the transatlantic submarine cable Amitié between New York and Europe was ready for operation, and the launch in April of the construction of the new submarine cable linking Tunisia and France, in partnership with the operator Medusa Submarine Cable System and with the backing of the European Commission.
Orange Marine
A wholly owned subsidiary of the Group, Orange Marine has a fleet of six cable-laying ships, one vessel that researches new routes for submarine cable installation, and four marine bases. Its ships have laid more than 287,000 kilometers of cable since the 19th century and have made more than 890 repairs to submarine links, some at a depth of nearly 6,000 meters.
Its know-how, from project engineering to the installation and maintenance of submarine cables, is recognized worldwide. This allows it to play a major and strategic role at the global level, at a time when more efficient next-generation cables are being installed across all oceans.
Overall, 2023 was a busy year, with several flagship projects successfully completed:
− ANJANA: cable between Santander and Myrtle Beach (USA); project awarded by NEC on behalf of its client Meta;
− T3: cable between Mauritius and South Africa on behalf of Mauritius Telecom, as a co-contractor with ASN;
− turnkey project for the customer Infratel, an Italian state-owned organization in charge of the roll-out of telecom infrastructure; Orange Marine connected 21 small islands with 31 landing points;
− DEEP BLUE 1: project signed with Digicel for laying a cable in the Caribbean;
− the Sophie Germain, a new cable-laying ship, joined the fleet.
For further information on the Group’s networks, see Section 1.5 Orange’s networks.
Orange Wholesale International Networks’ offers
Voice services
Voice service solutions enable operators worldwide to transit their customers’ calls internationally to over 1,200 destinations with 24/7 technical support. Orange is the leader in this market.
Global roaming services
With mobile services solutions, Orange offers global roaming thanks to direct connections with over 200 mobile operators, as well as broad connectivity that enables it to offer messaging services.
Messaging services
Orange is the trusted partner for mobile operators, brands and aggregators to safely deliver and charge for A2P (app to person) and P2P (person to person) text messages throughout the world.
Internet and transmission services
Orange’s data and IP network includes terrestrial, submarine and satellite systems which combine to create a vast global network. With its Internet network, Orange offers adjustable solutions to meet the needs of Internet service or content providers.
Convergence services
Orange provides operators with a multi-service offer to enable them to manage their voice and mobile data services over a single connection.
Security and anti-fraud services
To protect the value of its customers’ business, Orange Wholesale offers solutions covering the protection of identity and privacy and the protection of networks, mobile traffic and voice traffic.
The portfolio of anti-fraud and security services relies on voice, Internet and mobile service solutions. These offers include audit, detection and protection functions as well as the provision of analysis reports. The portfolio also contains offers that focus specifically on combating the dangers of cybercrime. Orange Wholesale’s customers can resell some of these offers to their own customers.
1.4.6.2 Content activities
In January 2023, Orange and the Canal+ Group announced that they had signed a memorandum of understanding for the Canal+ Group’s acquisition of Orange’s entire stake in the OCS pay-TV package and in Orange Studio, the film and TV co-production subsidiary. Orange Studio has more than 200 co-productions to its credit, as well as a catalog of nearly 1,800 audiovisual works and films. The leading film and TV studio in Europe, StudioCanal has many assets to promote this catalog. Since their founding in 2007 and 2008 respectively, competition in the audiovisual sector, particularly for OCS, has continued to intensify with the emergence of powerful international platforms. Through this agreement with the Canal+ Group, Orange’s longstanding partner and a recognized European player in the creation and distribution of content, the Group aimed to sustain the long-term development of these two subsidiaries, while preserving jobs and the p-financing of content. Canal+ has been a shareholder of OCS since 2012 (33.33% at the end of 2023) and is its leading distributor. On January 12, 2024, the French Competition Authority gave its approval for the transaction, which was finalized at the end of January. Following this transaction, the Canal+ Group is the sole shareholder of both companies.
The disposal allows Orange to focus on its role as an aggregator and distributor of content (TV/video, music, games) for its fiber and convergent offers. Its content strategy will continue to be based primarily on developing partnerships with rights holders and service publishers.
In Europe, Orange aggregates the best entertainment services, offering them to its 12.5 million TV customers via its very high-speed broadband networks. Throughout 2023, Orange strengthened and developed its offers by integrating services tailored to its customers’ various needs, distributing new offers with advertising from Netflix (France) and the sports streaming service DAZN (France). This has also enabled the Group to pursue its differentiation and premiumization strategy by offering premium content such as the Premier League (Romania), the Champions League & Liga (Spain) and BeTV (Belgium).
In Africa & Middle East, content activities are at the heart of the multi-service strategy and help to cement Orange as a responsible local operator. In 2023, Orange broadened its offers with flagship regional services such as OSN (Tunisia, Jordan), BeIN TOD (Morocco) and MBC Shahid (Tunisia, Morocco). Orange also entered into an exclusive partnership with Spotify to offer Orange customers access via the Group’s data offers to the world’s leading music streaming service. Lastly, in late November 2023, the Max it app was launched in five Africa & Middle East countries where Orange operates. In addition to Orange Money services and tools for managing its mobile and fixed lines, the app offers a range of content (online games, music, TV, videos, news, tickets, etc.).
1.4.7 Mobile Financial Services
The Mobile Financial Services Division includes the activities of Orange Bank and Orange Bank Africa. Orange Money’s business continues to be driven by geographical segments, particularly in Africa & Middle East (see Section 1.4.3 Africa & Middle East).
The banking market
The professional body for French fintech, insurtech and regtech companies (France FinTech) presented its 2023 annual ecosystem report. France FinTech players cover all areas of innovative finance, including banking and insurance services, asset management, payments, cryptoassets, regtech, enterprise services, etc. An analysis of fintech activity reveals that 939 million euros had been raised as of December 13, 2023, down nearly 70% from 2022, mainly due to a sharp decline in the participation of leading international investors.
According to France FinTech, France is the second-largest market in Europe after the UK (just over 2 billion euros raised). Fintech companies have made more significant use of debt as a result of wider finance options and crowdfunding.
Four key trends emerged during the year:
− the increasing involvement of fintech companies in impact investing (green finance, ESG, etc.);
− the growing use of technology such as artificial intelligence and tokenization;
− the cooperation between fintech companies and large corporations, which has always been a feature of the French ecosystem; and
− the burgeoning social role of fintech companies, at a time of resurgent inflation and pressure on purchasing power.
According to France FinTech, the outlook for 2024 is as follows:
− the tight market conditions look set to continue for several quarters;
− fundraising is likely to remain below 2021 and 2022 levels;
− the overall level of activity should remain buoyant;
− some sectors could accelerate, such as ESG, enterprise offers, tokenization or insurtech;
− recruitment and internationalization are expected to gather pace, the latter already involving 30% of French fintech companies;
− the various regulatory changes (PSD3, MiCA, AI Act, etc.) will have a significant impact on how the sector is structured.
Mobile Financial Services activities
Orange Bank
Launched in November 2017, Orange Bank, a wholly owned subsidiary of the Orange group, provides cutting-edge banking services natively designed based on the mobile uses of customers, in strong synergy with Telecom activities.
Accessible to everyone, the offer available in France requires no conditions in terms of income, savings or minimum balance. There are no bank charges attached to accounts and the associated bank cards (subject to certain terms and conditions of use). All basic banking services are offered: bank account, standard and premium bank card, checkbook, savings passbook, à la carte insurance and personal loans. In 2020, the bank expanded its range with the launch of the Premium Pack, the first offer on the market intended for parents and up to five children, from age ten.
The Orange Bank app offers innovative features, relying heavily on telecom uses. It enables customers to make contactless payments with bank cards or via mobile handsets using Apple Pay and Google Pay, immediately access their bank account balance, temporarily block and unblock their bank card, request and send money by text message, change their bank card code at any time, or add funds to their account by bank transfer or bank card. Customers can perform all their banking transactions on a mobile handset. Customer Relations are managed by a virtual advisor, available 24/7, with the option of using the customer relationship center in France.
To open a bank account, customers have access to a network of more than 395 Orange stores approved as IOBSPs [8]. A specific type of loan that allows customers to finance the purchase of products available in the store (mobile phones, accessories, etc.) is also offered across the Orange network.
After the acquisition of Orange Courtage in 2020, which enabled the bank to reach a new milestone in its cross-selling policy with Orange by becoming an insurance broker, and that of neobank Anytime, in January 2021, which specializes in business banking, Orange Bank launched Prêt Express (express loan) in 2022. The product of a partnership with Next 40 Younited’s fintech, the offer incorporates the latest generation of technology solutions with concrete benefits for customers: loans accessible to customers and non-customers of the bank, high approval rates, and faster and more streamlined processes. In addition, Orange Bank continues to offer car loans sold in the Groupama network alongside vehicle insurance.
On the international stage, Orange Bank was launched in Spain at the end of 2019. An all-mobile bank, it offers all its customers, whether or not they are Orange customers, a bank account, a Mastercard debit card and a savings account. Mobile payment is available on Apple Pay, Google Pay and Samsung Pay. Innovations include the Group management function, which enables funds and expenses to be shared or transferred between several people, giving customers the option to manage joint subscriptions such as water bills or Netflix accounts. Since the summer of 2020, Orange Bank Espagne has also been offering consumer credit and a financing solution for purchases of mobile phones in stores.
At December 31, 2023, Orange Bank had 1.9 million customers in France and Spain. This number includes customers who had opened an account with Orange Bank, as well as customers of credit and mobile insurance offers.
Disposal of Orange Bank and agreements with BNP Paribas
As part of its strategic asset review, Orange, after having started a search for a partner for its banking subsidiary, announced at the end of June 2023 the entry into exclusive negotiations in order to define a referencing partnership concerning Orange Bank’s client portfolio in France, develop financing solutions for mobile devices and discuss the modalities of a possible takeover of Orange Bank’s business in Spain. At the end of this negotiation, Orange announced at the end of February 2024 a partnership with BNP Paribas to offer a banking continuity solution for its clients in France and Spain. This partnership resulted in the signing of several agreements:
− an SEO agreement in France whereby Hello bank!, the BNP Paribas mobile bank, offers Orange Bank customers in France an exclusive offer (subject to eligibility conditions); and
− a commercial agreement to ensure a continuity solution for Orange Bank clients (subject to eligibility conditions) in Spain via the Spanish subsidiary of BNP Paribas Personal Finance, Banco Cetelem.
In parallel, Orange and BNP Paribas Personal Finance are collaborating on the implementation of a new credit solution for the financing of mobile devices.
This partnership is part of the intention of Orange’s wider intention to progressively withdraw Orange Bank from the retail banking market in France and Spain by the end of 2025. and the negotiation of a plan to safeguard employment for more than 600 jobs in France. In 2023, Orange Bank initiated an information-consultation with its employee representative bodies to cease its activities, and the negotiation of a plan to safeguard employment for more than 600 positions in France. Orange Bank has a solid balance sheet and will continue to meet all its regulatory obligations until its future withdrawal from the market. Orange Bank continues to offer a high-quality service.
Orange Bank Africa
In partnership with NSIA, a leading bancassurance provider, Orange launched Orange Bank Africa’s business activities in July 2020 in Côte d’Ivoire after obtaining a banking license from the Central Bank of West African States (BCEAO) in 2019. For populations still excluded from the conventional banking system, Orange Bank Africa has quickly become one of the most efficient ways of accessing credit and savings 24/7 from the Orange Money mobile account. In September 2023, the Banking Commission of the WAMU (West African Monetary Union) gave its approval for Orange Bank Africa to open a branch in Senegal.
Orange Bank Africa offers a fully digital microcredit and savings solution, allowing users to borrow smaller amounts instantly, from 5,000 CFA francs (around 8 euros), with an easy-to-use and innovative service which uses a scoring tool designed to accelerate decision-making and a dedicated artificial intelligence algorithm. It is accessible to everyone, regardless of location, time and mobile phone generation. In 2022, the offer was supplemented by a direct bank offer that includes consumer loans, business loans and a prepaid card offer. In 2023, the direct bank offer was supplemented by a real estate loan offer.
Orange Bank Africa had 1.3 million customers at the end of December 2023, with its pico-credit, micro-credit and savings offers via Orange Money and its direct bank offers (consumer loans, business loans, real estate loans, prepaid cards). In 2023, 1.3 million loans were granted for a total amount of 185.2 billion CFA francs, thereby contributing to the economic and social development of Côte d’Ivoire.
Orange Bank Africa enables the Group to participate more fully in the economic activity of its host countries and is thus completely in keeping with the regional financial inclusion strategy promoted by the BCEAO.
1.5 Orange’s networks
For the Orange group, the networks are a strategic asset and, as such, are subject to constant supervision, maintenance and upgrades. Launched in 2023, Orange’s strategic plan, Lead the future, is based on four key pillars, including capitalizing on infrastructure in all the countries where the Group is present (see Section 1.2.3 The Orange group strategy).
At end-2023, the Orange group operated networks in 26 countries in Europe, Africa & Middle East to serve its B2C customers; its business networks are among the most extensive in the world. Orange intends to continue to roll out, innovate and invest in the best technologies to meet the challenges of reliability, security and resilience for its customers in all its locations.
The Group’s investments in its networks, other than to maintain their quality (replacement of poles, cables and masts, and other equipment that has reached the end of its life) are designed to improve these networks in a number of respects:
− the development of very high-speed fixed and mobile broadband (FTTH and 4G/5G), increased data transfer volumes and reduced connection latency. These investments concern all networks, from the mobile radio network and household Internet connectivity to satellite and submarine cables;
− the migration of uses from old technologies (analog telephony, copper networks, 2G and 3G) to new technologies;
− gradual virtualization of network control functions ("programmability" and "softwarization" of networks so that they can be adapted more quickly to new services and uses);
− automation of network operation, which improves the quality of service for customers.
The networks are very extensive. In each country, they break down into (i) access networks (fixed and/or mobile), (ii) IP transmission and transport networks and (iii) control and service networks, supplemented by (v) international networks.
Access networks connect each customer - individuals or businesses - and provide a first level of customer data aggregation. IP transmission and transport networks connect access networks with each other and with the networks of other operators in the relevant country, as well as with international networks. Control and service networks, which drive access, transmission and IP transport networks, provide the connection between people and manage the services (voice, TV, Internet access and data). International terrestrial and submarine networks provide global connectivity for all services, voice and data, for which servers are often located on a different continent.
A glossary defining several of the technical terms used in this section can be found in Section 7.2.2 at the end of this Registration Document.
A common feature of all these networks is the continual increase in their capacity. Uses continue to expand, and traffic volumes are increasing across all Group networks. To anticipate this growth, which will continue over the coming years, the Group is investing in its networks to increase their capacity and performance while controlling their energy efficiency and reducing their environmental impact.
1.5.1 Access networks
Fixed-access networks
Analog access and ADSL/vDSL broadband access
Copper accesses comprise a pair of copper wires that connect individual customers to a concentration point and give them access, via the distribution and transport network, to a local switch. It is used to deliver analog voice services and broadband access services.
Orange operates copper access networks in France and Poland, and in various countries in Africa & Middle East (Côte d’Ivoire, Jordan and Senegal), to provide analog voice access services and data in the B2C, B2B and wholesale markets.
To supplement its coverage, Orange also uses the networks of third-party operators to provide these same services (Belgium, Slovakia, etc.).
Networks and services based on copper accesses are used less and less as users move to very high-speed broadband. They are constantly being optimized to deal with this decrease in usage while maintaining quality service. In France, a timetable has been established for the gradual closure of services (telephony and Internet) on the copper network (for more information, see also Section 1.4.1 Operating activities - France):
− since the end of 2018: end of the marketing of new analog voice telephony lines;
− since 2020: end of the marketing of Internet services on copper to B2C customers where fiber is available;
− starting in 2026: complete discontinuation of the marketing of copper services;
− gradual phase-out and complete shutdown of the copper access network starting at the end of 2022 by geographic areas with an estimated completion in 2030.
Very high-speed broadband fiber optic access
Orange has been rolling out FTTH access networks for over ten years, using a point-to-multipoint network architecture known as Passive Optical Network (PON). This architecture, based on passive fiber optic, has the advantage of being able to pool several technologies and several very high-speed broadband accesses on the same fiber.
These FTTH access networks make it possible to offer very high-speed broadband services: up to 2 Gbit/s using G-PON technology [9] and 10 Gbit/s using XGS-PON technology [10].
Most offers currently use G-PON technology, and offers using XGS-PON technology are available in Spain (since 2022) and France (since 2023).
Compared with other fixed access technologies, FTTH access networks offer improved performance in terms of bandwidth, response times and energy efficiency.
Orange offers FTTH connectivity in 17 countries and is the European leader in the number of accesses rolled-oud:
− in France, the roll-out of the FTTH network started in 2007. In 2011 and 2012, Orange signed sharing arrangements with other telecom operators to speed up the roll-out. In 2023, it continued at a steady pace, and Orange consolidated its leadership with a total of 37.4 million households connectable to Orange fiber optic at end-2023;
− the roll-out of FTTH networks is also continuing in Europe (excluding France), where by the end of 2023 Orange had more than 30.2 million connectable households, including 16.8 million in Spain and 8.0 million in Poland;
− in Africa & Middle East, by the end of 2023, the Group had connected 4.1 million homes to FTTH in Morocco, Jordan, Côte d’Ivoire, Senegal, Mali, Burkina Faso, Egypt, the Democratic Republic of the Congo and Guinea.
Orange shares its fixed-access network in its three main countries - France, Spain and Poland - and plans to share some future FTTH roll-outs with other operators via FiberCos, involving third parties. In 2021, Orange joined forces with long-term investors to create Orange Concession. France’s leading operator of FTTH networks rolled out and operated on behalf of local authorities, Orange Concessions operates 24 Public Initiative Networks (PINs) representing 3.4 million homes connectable to fiber and nearly 1.5 million customers connected at end-2023, and nearly 4.6 million FTTH connections by 2025 (see Section 1.4.1 Operating activities - France). In Poland, Orange has created a 50%-owned FiberCo, whose objective is to roll out 1.7 million lines over the next five years to reach 2.4 million lines (see Section 1.4.2 Operating activities - Europe).
Radio and satellite fixed access
In certain European and African countries, fixed services are provided through 4G/LTE and now 5G, in addition to copper and fiber optic networks.
In addition to copper, fiber and radio accesses, fixed residential accesses and satellite television services are marketed via space capacity rental.
Since 2023, Orange has been offering a satellite service in mainland France through the Eutelsat Konnect VHTS satellite. This offer allows its most remotely located B2C and business customers to benefit from a very high-speed broadband experience (theoretically up to 200 Mbit/s downstream and 15 Mbit/s upstream) for the price of a fiber-optic offer.
Mobile-access networks
The GSM (2G), UMTS (3G), LTE (4G) and 5G access networks support voice and data communication services that reach average speeds of several tens of Mbit/s and up to several hundred in optimal conditions, allowing to easily send and receive voluminous content (audio, photo and video). The Group operates a mobile network in each of the countries where it offers B2C telecommunication services. The network supports GSM, UMTS and LTE technologies in all countries; in Europe, it also supports 5G. Between 2025 and 2030, the Group will gradually phase out its 2G and 3G networks in France and in all European Union countries where it operates. The phasing out of 2G and 3G will allow Orange to optimize the management of its networks and move them toward more secure, resilient, economical and energy-efficient technologies, such as 4G and 5G. Radio frequencies currently used for 2G and 3G will be re-used to improve the capacity and coverage of 4G and 5G networks in both urban and rural areas.
5G technology improves connection speed to mobile services, with average speeds three to four times faster than 4G, thanks to smart antennae installed on existing 4G sites. Orange’s 5G is now marketed in an NSA version (non-standalone, in other words based on a 5G spectrum but using a 4G core and an additional 4G anchor frequency band) in six countries in Europe (France, Luxembourg, Poland, Romania, Slovakia, Spain). It is initially being rolled out in urban areas where 4G is in high demand, and in areas with high levels of economic activity, as a complement to the other networks. On the African continent, Botswana and Jordan have commercially launched 5G NSA. 5G roll-outs are planned in all 17 countries in the very near future.
5G SA (standalone, in other words, operating completely independently of 4G and having its own core network) makes it possible to improve latency but also to adapt the network and the quality of service according to the user needs by using network slicing technology: This technology consists of virtually dividing the network into several slices operating independently and thus offering different levels of mobile network performance according to customer needs (B2C, businesses, industrial campuses, etc.).
In 2023, Spain and Belgium launched their 5G SA network. The other four European countries that have already rolled out 5G NSA will commission 5G SA between 2024 and 2025.
To reduce its environmental impact and operating costs, Orange shares more than 65% of its radio sites with a partner or TowerCo. Sharing can be either "passive" (confined to masts/rooftops only), or "active" (masts/rooftops and active equipment). Sharing of this nature, which previously concerned 2G/3G/4G technologies, now includes 5G. Passive sharing is in place in almost all of the Group’s host countries. Active sharing, which is more efficient, has mainly been adopted in the following countries:
− Poland, for nearly all of the mobile access network;
− Spain, where the mobile-access network is shared outside major cities;
− France, for 4G coverage of dead zones, including the 2,000 new sites of the New Deal program;
− Belgium, where an active mobile-access network sharing agreement was signed in 2019. Work to consolidate the two networks started at the end of 2021 and will take place over several years;
− Romania, for sites in rural areas and expanded to sites in urban areas.
For several years now, Orange has been moving its RAN toward Open RAN and softwarization. As early as 2020, the first Cloud-native network was tested in France, then also in Spain, with the Pikeo initiative, which demonstrated some of the benefits of Open RAN: on the one hand, open interfaces make it possible to combine radio transmitters and processors from different vendors; on the other hand, disaggregation between hardware and software makes it possible to roll out virtualized RAN functions on unified servers. Orange was thus able to illustrate the benefits of automation and the CI/CD and "zero touch network" concepts, speeding up network management processes such as SW roll-out and upgrades, which will reduce operating expenses ("OPEX"). In mid-2023, Orange activated its first 4G (and soon 2G) Open RAN sites via a commercial network pilot in a rural area of, sharing a network with Vodafone in a world first. Open RAN is paving the way for more flexible network sharing, with independent vRAN software per operator, potentially from different vendors, on the same shared Cloud infrastructure. Initial results seem to confirm Open RAN’s ability to rival traditional RAN in terms of performance and functional parity. These experiments are preparing Orange for large-scale roll-outs from 2025.
At the end of 2021, the Group created a European TowerCo, Totem, which has a passive mobile infrastructure portfolio of nearly 27,300 sites in France and Spain. (See Section 1.4.5 Operating activities - Totem).
Energy savings
In 2023, the Group stepped up its Energy action plan to limit energy consumption and the associated CO2 emissions (scope 2) against a backdrop of increasing traffic and significant coverage, to achieve the objectives set by the Lead the future strategic program. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
1.5.2 National transmission and IP transport and control networks
In each country where it has B2C customers, Orange operates a network that is layered as follows:
Transmission network
The transmission network primarily consists of terrestrial and submarine fiber optic, as well as radio relay systems rolled out mainly in Africa & Middle East countries. These networks support voice and data traffic, for fixed and mobile B2C, B2B and wholesale services. The technologies proposed by the equipment manufacturers selected by Orange on optical links make it possible to achieve speeds of up to 800 Gbits/s per wavelength, and Dense Wavelength Division Multiplexing (DWDM) technology allows capacities of 50 Tbits/s per fiber. Orange is one of the world leaders in the use of advanced optical functions to obtain more flexible and programmable transport networks.
IP transport network
The IP network consists of routers connected to the transmission network. In France, an IP network dedicated to businesses is also in operation, in addition to the network managing data for B2C customers. The main purpose of this network is to connect businesses’ French sites for internal data exchange on a Virtual Private Network (VPN) and provide them with Internet connectivity. It also provides Voice over IP transport to businesses.
Control network
The control network (also known as the signaling network) manages calls and data connections, updates of location data for mobile phones, roaming and SMS. This network is being upgraded to new standards, for example to manage 5G.
Voice services network
In the countries in which it has fixed operations, Orange operates a switched telephone network (PSTN) to deliver analog voice and ISDN digital services. These networks are continually being optimized because of declining uses. In France, Orange stopped marketing its analog voice services at the end of 2018 and announced the first zones where voice services will only be available using IP technology from the end of 2023.
Orange has also rolled out fixed VoIP networks using IMS (IP Multimedia Subsystem) technology in many countries for B2C and B2B uses.
Until 2015, all mobile voice traffic was managed in switched mode by the mobile network in each country. In 2015, Orange rolled out mobile IMS infrastructure in European countries to offer VoLTE (VoIP over LTE) and VoWiFi (mobile Voice over WiFi) services. At end-2021, VoLTE and VoWiFi had been rolled out in all of the Group’s European networks and are being rolled out in some countries in the MEA region.
1.5.3 International networks
Terrestrial network
The international terrestrial network comprises four main networks, connected via submarine cable:
− the European network, whose roll-out began in April 2012 in France, and which has been extended to include services in Frankfurt, London, Barcelona and Madrid, as well as submarine cable stations;
− the North American network, one of Europe’s most strategic routes. According to Telegeography, "with 571 Tbps of international bandwidth used, the transatlantic remains by far the largest intercontinental route. It is twice as busy as the transpacific route, the second busiest in the world." (Source: TeleGeography’s Transport Networks - Transatlantic 2023);
− the Asian backbone in Singapore, served by the SEA-ME-WE3, SEA-ME-WE4 and SEA-ME-WEA 5 submarine cable; and
− Djoliba, the first pan-African backbone, commissioned in November 2020. This infrastructure is based on a terrestrial fiber optic network coupled with submarine cable, thereby offering secure international connectivity from West Africa. The new backbone covers eight countries: Burkina Faso, Côte d’Ivoire, Ghana, Guinea, Liberia, Mali, Nigeria and Senegal.
In 2023, Orange was appointed coordinator of the FranceQCI consortium, which includes Airbus, CNRS, Cryptonext Security, France’s Directorate General for Civil Aviation, Orange, Sorbonne Université, Télécom Paris, Thales, Thales Alenia Space, Université Côte d’Azur, Veriqloud and Welinq. As part of the Digital Europe program, this project represents a significant contribution in France to the objective of rolling out a secure quantum communication infrastructure for the EU (EuroQCI), and paves the way for the future European Quantum Information Network (QIN).
Satellites
Orange uses satellite communications to provide VSAT (Very Small Aperture Terminal) services to Orange Business’s terrestrial or maritime B2B customers, to connect isolated mobile sites in Africa and to provide IP or voice connections to other operators. To provide these services, Orange uses space capacity rented from satellite operators (Eutelsat, Intelsat, SES and Arabsat). Orange is also forging partnerships with new players in the industry. In 2023, Orange announced a partnership with One Web and its low-Earth orbit constellation, which will improve and expand Orange’s global connectivity, particularly in rural and remote areas of Europe, Latin America and Africa, strengthen its leading position in the mobile backhaul market in hard-to-reach areas such as certain African countries, and enhance Orange Business’s offer for large, small and medium-sized businesses by providing resilient and low-latency broadband solutions.
In 2023, Orange was also selected to participate in the IRIS [11] industrial consortium for the sovereign European satellite constellation project. The program is linked to the European Commission’s proposal on the EU’s Global Gateway Strategy. It will enable the provision of affordable Internet access everywhere in Europe and will provide secure connectivity over geographical areas of strategic interest, such as the Arctic region and Africa.
Submarine cable
To address the strong growth in international telecommunication traffic and in a highly competitive market, Orange is maintaining its level of investment in submarine cable and is continuing to develop its network in order to meet the needs of its customers. Due to the high cost of the investments required to construct a cable, these investments are carried out with the various players involved (operators, private companies and GAFAM) and in various forms (consortiums, purchase of user rights, transmission capacity rental, etc.).
Orange is an investor in more than 40 submarine cables and consortiums covering various routes: North Atlantic, Caribbean, Europe-Asia and Europe-Africa.
The year 2023 was marked by the announcements in April that Orange had begun construction on the new submarine cable linking Tunisia and France as part of its association with the operator Medusa Submarine Cable System, with the support of the European Commission; and in December that the Amitié transatlantic submarine cable between New York and Europe had been commissioned. For more information about the announcements, see Section 1.3 Significant events.
In addition, over the course of 2023, the 2Africa consortium, of which Orange is a member, continued the gradual roll-out of the cable, with several landings in the Middle East (Saudi Arabia) and Africa (Kenya, South Africa, Madagascar, Mozambique, the Democratic Republic of the Congo, Senegal, etc.). More than 45,000 kilometers long, its full commissioning is scheduled for the end of 2024 and will connect 33 countries in Africa, Asia and Europe. The cable, rated up to 180 TBps in key parts of the system, will increase capacity and improve Internet reliability and performance across much of Africa, and supplement rapidly growing capacity demand in the Middle East.
Lastly, the roll-out of two new submarine cables continued in 2023:
− Orange welcomed Digicel’s Deep Blue One cable to Cayenne in December. The roll-out of the cable will continue in early 2024, with commissioning scheduled for the second quarter of 2024. This will allow Orange to improve connectivity in French Guiana by linking the territory to Trinidad;
− the SEA-ME-WE 6 consortium, in which Orange is heavily involved, is continuing construction of the 21,000-kilometer submarine cable that will link Singapore and Marseille in 2025. This will be connected to a cable serving four countries in the Middle East (Oman, UAE, Qatar, Bahrain).
International service control networks
Orange operates an international control network to manage the signaling associated with the voice, roaming and text message traffic of its mobile networks and those of its operator customers. This network is evolving to handle new standards such as 5G.
Orange also operates a network for the supply of voice services for international businesses, based on the international IP MPLS network.
In addition, several centralized platforms were rolled out on international transit points to provide value-added services to mobile operators.
1.5.4 Network Integration Factory
In 2023, the Network Integration Factory developed an industrial product to implement an automation chain for the integration and deployment of network functions. This automation chain is shared with all Orange subsidiaries and used by all manufacturers. It was deployed in Belgium and Spain in 2023, and is currently being rolled out in 2024 in France, Slovakia, Romania and Poland.
The first deployment in Belgium demonstrated that Orange is capable of automating the network functions of the 5G mobile core (SIG ORACLE) in "GitOps" mode, enabling deployment in a matter of hours compared with the several weeks required when these evolutions are carried out manually. The aim now is to capitalize on these developments to replicate these automated deployments in the Group’s other countries using this function.
Automation work began or continued over the year on network functions in the fixed access, transport and RAN domains, with a view to generalizing the model and enriching the number of network functions in the Network Integration Factory’s catalog of services. The Network Integration Factory has also supplied Orange France with automated switch testing solutions for B2B and wholesale requirements, to reduce the time taken to complete validation campaigns from 4 days to 30 minutes. Work has also begun with Orange Marine to limit the downtime of its fleet of ships at sea by reducing the time taken to repair fibers whose measurements are automated.
1.5.5 Network resilience
Network resilience ensuring continuity of services is an essential element of Orange’s purpose as a trusted operator. Orange’s network resilience approach focuses on:
− anticipation, by choosing the architectures most likely to resist hazards. This includes anticipating future climate conditions and the weather events they will produce;
− assessing the system’s ability to anticipate and absorb potential disruptions, to develop ways to adapt to changes in the system itself (such as the introduction of a new technology, or external changes), and to enhance its ability to withstand disruptions and recover as quickly as possible after a shock.
Orange’s network resilience is built on:
− transmission and transport networks structured in loops in order to ensure a minimum service in the event of a branch outage;
− redundancy at various levels (sites, energy chains, equipment and servers) in order to compensate for failures of individual units;
− anticipation and prevention capabilities to detect and implement the first redundancy and diversity mechanisms. Historically, these capabilities referred to the robustness of the network;
− absorption capabilities with defense mechanisms, including congestion or overload control mechanisms;
− adjustment capabilities to reduce the impact of incidents on the services provided to customers;
− repair capabilities to restore normal functioning.
1.6 Research and Development
In the Information and Communication Technologies (ICT) sector, which is undergoing major change in its value chain, with an increase in the number of players and the creation of new economic models, innovation is a major growth driver for the Orange group. In 2023, the Group devoted 613 million euros (i.e. 1.4% of its revenues) to furthering its research and innovation activities. This amount includes staff costs and operating and capital expenditure related to research and innovation in new products and services.
1.6.1 Research and innovation
Orange is a leading private player involved in digital research in France. The Group aims to be a committed player in current and future transformations including connectivity, especially with fiber, the networks of the future, responsible artificial intelligence, the Internet of Things on a large scale, and trusted digital technology with low environmental impact that meets the need for sovereignty. Orange aims to use research to improve daily life for everyone and to respond to major social challenges through innovative and responsible uses of new digital technologies. Bringing together its activities around the creation of strategic innovation, research and the implementation of technical and data policies for the Group, Orange Innovation is the driving force behind this innovation. Against the backdrop of rapid changes in its customers’ uses and expectations, Orange Innovation is building competitive and value-creating assets for the Group.
Orange is convinced that using data and AI in a responsible, useful and accessible way will open up new prospects for individuals, society and the planet. Orange is placing AI at the heart of its innovation model to support the company’s growth as well as its social and environmental objectives, focusing on three major areas: making networks smarter, improving operational efficiency and reinventing the customer experience. Orange established its Data and AI Ethics Council in 2021 with this in mind, and in 2022 it signed an Ethics and Responsibility Charter [12] in order to specify its values. To facilitate access to reliable, high-quality data, a "data democracy" strategy has been launched as part of a secure, controlled approach. It relies on the adoption of cutting-edge AI and data tools and a change in operating methods. Moreover, against a technological backdrop that has been profoundly transformed by the emergence of generative AI, Orange seeks to develop its use and step up its dissemination within the company itself to create more value in all its business lines, networks and interactions with customers. In order to develop key skills around AI within all the Group’s business lines, Orange offers its employees a comprehensive range of training courses, covering topics such as acculturation (in particular to generative AI) and technical training for business lines and experts. The Group has also enhanced its range of upskilling and professional retraining courses for its employees, as well as two Data Analyst and Data Scientist courses as part of the Orange Apprentice Training Center.
Supplying its customers with the best connectivity is key to Orange’s strategy. Several innovations are currently being developed or tested which are likely to provide solutions in the coming years to improve connectivity, achieve the "Net Zero Carbon by 2040" commitment, develop new services and improve the quality of service provided to its customers.
Thus, 5G technology improves connection speed to mobile services, with average speeds three to four times faster than 4G, thanks to 5G smart antennae installed on existing 4G sites. 5G is also more energy efficient than 4G, making it a significant lever for the Group to achieve its commitment to be Net Zero Carbon by 2040. In 2022, an important stage of preparing, testing and rolling out new 5G Stand Alone (SA) network cores was initiated in the European countries in which Orange operates. In 2023, Spain and Belgium launched their 5G SA networks. Other European countries that have already rolled out 5G NSA will commission 5G SA between 2024 and 2025. 5G SA brings increased performance in terms of upload speed for the end user and lower latency. With network slicing, which consists of virtually cutting the 5G network into slices, it will be possible to specialize certain slices to cover critical uses or specific needs and offer different levels of quality and security. 5G SA and network slicing will allow Orange to develop its range of mobile private network solutions. Through the Orange 5G Lab initiative launched in 2021, Orange is proposing a real network of 19 sites worldwide to help economic players better understand the opportunities, value and utility of 5G. Nearly 3,700 businesses, start-ups or local authorities have gone through an Orange 5G Lab since their launch, among which 275 businesses have been supported in testing use cases, particularly in environments benefiting from advanced private 5G network and/or edge computing features.
To optimize the management of its networks and move them toward more secure, resilient, energy-efficient and modern technologies such as 4G and 5G, Orange has announced the phasing out of 2G and 3G networks between 2025 and 2030 in all the European Union countries in which it is present. Radio frequencies currently used for 2G and 3G will be used to improve the capacity and coverage of 4G and 5G networks in both urban and rural areas. The customer experience on mobile will be improved with better voice quality via VoLTE, higher throughput, lower latency and enhanced security, with no major impact on almost every offer.
In order to best meet the connectivity needs of customers, Orange has carried out the first NB-IoT and 5G SA roll-outs in addition to the networks already rolled out in Europe. In the B2C market, since 2021 Orange has offered "Protected Home" remote surveillance in France, and has also marketed a service in Spain that allows users to monitor their homes themselves using a high-resolution WiFi camera and a mobile app. In the B2B market, Orange also provides two turnkey solutions, "smart operations" and "smart eco energy," in order to continue to support businesses and local authorities in the democratization of IoT uses. Also in response to customers’ connectivity needs, Orange confirmed its commitment to the IoT market and the LoRaWAN standard at Sido 2023, the Internet of Things trade show. This technology is renowned for its efficiency in both static and mobile environments, guaranteeing optimized energy consumption for connected devices.
Since 2021, Orange has launched several initiatives to realize its vision for the future of the networks. This vision is that of ambient connectivity. It relies on networks that are more versatile, secure, powerful, resilient and designed to limit their environmental impact. Increasingly mature key technologies such as software networks, edge computing, virtualization and AI are enabling a new era of connectivity capable of better meeting customer needs and adapting to services and breakdowns in real time, automatically and autonomously. For example, the work carried out in 2023 on Open RAN in Romania with Vodafone seems to confirm the ability of Open RAN to rival traditional RAN, allowing Orange to plan larger-scale roll-outs from 2025 onward. Orange is also involved in several initiatives with other operators and the telecoms industry to promote the emergence of open and interoperable European Open RAN and Telco Cloud solutions.
In terms of the environment, Orange is continuing to reduce the impact of its activities and those of its customers. Orange has continued to work on the energy efficiency of its infrastructure (networks and Data centers). The Green ITN program has already reduced the Group’s energy consumption linked to network and information system operations [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. It relies in particular on the energy efficiency of new equipment and next-generation Data centers designed to use air conditioning as little as possible, as well as the use of AI to further reduce energy consumption from networks. Since 2022, an app has enabled Orange subsidiaries to visualize the reduction in their energy consumption and the associated carbon emissions, in connection with the actions implemented. Orange has also continued to solarize mobile sites in Europe and particularly in the MEA region (Madagascar and Senegal). It has also worked to solarize Data centers in Côte d’Ivoire and Burkina Faso. In addition, Orange continues to expand its supply of renewable energy in Europe through long-term contracts with local suppliers. This has been the case in France, Spain and Poland in particular. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] Several 2030 trajectory models have already been implemented: mobile devices, home equipment, network infrastructure and Data centers. These models have been tested and validated in Orange France and will be rolled out to the Group’s other regions in 2024, so that each country can fine-tune the levers to be applied. In 2023, Orange Innovation created a guide to assess the carbon footprint of a digital service from concept to end of life. The guide identifies the main sources of carbon emissions and helps to implement actions to reduce them. Since 2022, Orange has been making it easier to calculate the carbon footprint of its Enterprise offers thanks to a tool made available to its sales force; in 2023, the tool was enhanced with new services. Orange aims to systematize the eco-design of its products and services in order to help reduce their environmental impact. A methodological framework and training course are now available to project managers, product managers, experts and project contributors for Group entities. Following the launch of Livebox 6 in France in 2022, Orange launched Livebox 7, whose eco-design approach has been awarded the "Footprint Progress" certification by Bureau Veritas. Livebox 7 is also designed to take full advantage of the latest generation of fiber, anticipating the uses that will expand in the years to come, as well as network capacities.
Orange wishes to advance the consideration of social and environmental expectations in relation to technology. After presenting its vision of 6G in a white paper published in 2022, the Group became a member of the Chaire 6G Durable with Centrale Supélec, the University of Paris Saclay and the CNRS. Involved in several major initiatives around this technology, Orange is coordinating a working group within the European research project Hexa-X-II, tasked with reflecting on the use cases and target characteristics of a 6G network, and establishing a dialogue with representatives of society with a view to co-designing what 6G will be like upstream of its specification.
Orange’s research and innovation activities are conducted within the framework of an Open Innovation strategy to capture trends, find original solutions and benefit from the Group’s partners’ skills and contributions.
This is reflected in a number of developments:
− Orange signed and launched nearly 92 partnership contracts with the world’s top University research centers between 2020 and 2023, and has also set up four joint laboratories: one with INRIA on the virtualization of network functions; one on antennas with the University of Nice; and one with the University of Grenoble-Alpes on health, and with Lab’Optic on fiber measurements and bench testing. It is also involved in the b<>com Institut de Recherche Technologique, and is contributing to 77 national and European cooperative projects, including through its involvement in seven competitiveness clusters (including the chair of the Images & Réseaux cluster) as part of a network of more than 150 industrial and academic stakeholders. Orange also funds seven research chairs, including one with Centrale Supélec on sustainable 6G;
− Orange is also involved in several research projects in France (Quantum@UCA, ParisRegionQCI, France QCI) and in Europe (EuroQCI, Prometheus) around quantum communication networks with numerous academic, industrial and start-up partners;
− many start-ups benefit from Orange’s support through a number of initiatives, including the Orange Fab program, which offers programs to accelerate and internationalize start-up businesses in 21 countries. The Group also supports female start-up creators with #FemmesEntrepreuses and Women Start, as well as the best positive-impact technology projects in Africa & Middle East, with the Orange Prize for Social Entrepreneurship in Africa & Middle East (known by its French acronym, POESAM - Prix Orange de l’Entrepreneur Social en Afrique et au Moyen-Orient). It is also part of various global networks and events, including the Business France and French Tech networks;
− lastly, Orange has an active policy of forming strategic partnerships with leading industrial players worldwide, which allows it to enhance its portfolio of products and services and open itself to new ecosystems.
2023 was also the year of the first Orange Open Tech Days, which grew out of the Research and Innovation trade show, bringing all divisions and external partners to showcase the Group’s ability to unite its ecosystem around innovation. Business leaders, experts, institutions, research centers, academics, and journalists were presented a collection of the latest innovations and research work from all the Group’s entities through over 60 demonstrations and 20 mini-conferences. Several themes were highlighted: New retail connectivity, Cybersecurity, Telco as a platform and Customer experience. With its firm belief that the visibility of its innovations can generate opportunities and synergies, Orange Innovation has become a catalyst for innovation.
1.6.2 Intellectual Property and Licensing
The Intellectual Property and Licensing Department protects, manages and adds value to Orange’s patent portfolio, which is one of the Group’s intangible assets; it also derives value from software. It is an asset that sets Orange apart from its academic and industry partners. Its role is also to defend the Group’s interests in the event of disputes involving intellectual property:
− at December 31, 2023, the Orange group had a portfolio of more than 10,500 patents or patent applications in France and abroad protecting its innovations. To maximize their value, some patents are licensed through patent pools for patents pertaining to industry standards (e.g. NFC, MPEG Audio, WiFi, HEVC, 5G, neural coding, VVC, VP9-AV1, etc.). Value maximization also concerns software such as engineering tools for the mobile network;
− in 2023, 212 new inventions were patented, including major technical contributions to standardization (5G, coding, video, etc.). These inventions mainly come from the Group’s Innovation Research Centers in France and abroad;
− in France, Orange is ranked twelfth in the INPI 2022 ranking (source: INPI 2022 ranking, March 2023).
1.6.3 Capital investment
As a keen major financer of innovation in information technology, the Orange group has made financial commitments to this area via two key complementary investment channels: Orange Ventures and Orange Digital Investment. As well as generating a profit, these investments aim to sustain the Group’s innovation, forge strategic, technological and/or commercial partnerships, and enhance the Group’s image within the innovation ecosystem and with its customers and other stakeholders:
− Orange Ventures, wholly owned by the Group: at the end of 2020, Orange strengthened its venture capital activity by creating Orange Ventures, a new company with a budget of 350 million euros. Orange Ventures invests in fast-growing companies in Orange’s established business areas such as connectivity, cybersecurity, data AI, the digital enterprise or innovative financial services. Orange Ventures also invests in innovative companies in the fields of e-health, climate and the circular economy, in line with the Group’s inclusion and carbon footprint reduction targets.
Orange Ventures supports start-ups at all stages of their development, from the seed stage in Africa & Middle East, to more mature phases in Europe and the United States, with unit investments of up to 20 million euros per round of fundraising.
Orange Ventures serves to promote the emergence of future technological champions, helping drive the transition to an increasingly digital and responsible world in the service of the greatest number in order to share their innovation capabilities, for the Group’s customers or within operations, and the creation of synergies between Orange and start-ups;
− investment funds run by management companies outside Orange. They have also helped respond to new challenges, particularly Orange’s commitment to achieving Net Zero Carbon by 2040. Over the last 20 years, the Group has made investment commitments of 350 million euros as follows:
- the Iris Venture IV and Iris Next funds and the three Orange Publicis Ventures funds (Growth, Global and Early Stage), created within the framework of a partnership with the Publicis group,
- the Raise Investissement, Raise Ventures and Raise Seed for Good funds,
- several "thematic" funds, including Robolution Capital, Écomobilité Ventures focused on digital and sustainable mobility, Digital Health 2 focused on digital health, and Venture Reality Fund 2 focused on augmented reality,
- two funds focused mainly on investments in Africa: Partech Africa, managed by Partech Partners, and the French-African Fund (AfricInvest),
- two investment funds, Paris-Saclay Seed Fund and Seedcamp IV, investing in start-ups in the seed capital phase.
The Group is also committed to two natural capital funds whose purpose is to finance environmental carbon sequestration projects, with compensation in carbon credits [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED].
1.7 Regulation of telecommunication activities
In the countries where it operates, the Orange group has to comply with various regulatory obligations governing the provision of its electronic communications products and services, primarily relating to obtaining and renewing telecommunication licenses, as well as oversight by the relevant regulatory authorities seeking to maintain effective competition in electronic communications markets. Orange is also subject to specific regulatory constraints in some countries due to its dominant position in the relevant markets. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
1.7.1 European Union
1.7.1.1 Legal and regulatory framework
The European Union has laid down a common legal framework in order to harmonize the regulation of electronic communications. It is binding on the Member States and must be implemented by the National Regulatory Authorities.
The general legal framework of the European Union has been amended by the European Electronic Communications Code, which came into force on December 20, 2018. It revises and combines four main directives deriving from the 2002 Telecoms Package on:
− a common regulatory framework for electronic communications networks and services;
− the authorization of electronic communications networks and services;
− access to and interconnection of electronic communications networks and associated facilities;
− universal service and users’ rights relating to electronic communications networks and services.
Furthermore, Regulation (EC) 1211/2009 of November 25, 2009, canceled and replaced by Regulation (EU) 2018/1971 of December 11, 2018, established the Body of European Regulators for Electronic Communications (BEREC).
This legal framework is supplemented by sector-based texts (international roaming, open Internet, etc.), as well as broader texts aimed at the European digital ecosystem (protection of privacy, etc.).
1.7.1.2 Main community texts in force
The European Electronic Communications Code
The European Electronic Communications Code (Directive (EU) 2018/1972) came into force on December 20, 2018. The Member States then had 24 months to transpose it into national law. However, due to the health crisis, the transposition has not yet been fully completed in certain countries, particularly in some countries within Orange’s European area.
The Code includes a regulatory objective to support the roll-out and adoption of very high-connectivity networks, in line with Orange’s aim of seeing regulatory objectives redirected toward support for investment.
In addition, the rules governing access obligations imposed on operators with significant market power have been positively adjusted in relation to the previous framework:
− access obligations should better target only the relevant fixed access infrastructure so as to address competition issues in the retail market;
− the Code promotes co-investment in very high-connectivity networks. If an operator in a dominant position makes a co-investment offer that complies with certain provisions, it could be exempted from remedies related to its dominant status. Only co-investors will have access to the full capacity of these networks. The other operators will be able to enjoy the same quality of wholesale access as they did before the roll-out of the networks. National regulators will need to secure approval from the European Commission for such measures;
− the Code also favors the wholesale operator model - not present in the retail market - by exempting it from certain remedies, even in cases of market dominance.
In addition, access obligations for fixed-access infrastructure serving subscribers may be imposed symmetrically on all operators when it is not technically feasible or economically reasonable to replicate such infrastructure. These obligations are subject to a joint veto by the European Commission and BEREC.
Concerning the allocation of radio spectrum needed for mobile services, the Code reinforces European rules designed to improve harmonization and cooperation between Member States, including the minimum 20-year visibility of spectrum licenses. The implementation and in particular the allocation of spectrum capacity remains a national matter, with only light oversight by Europe. Provisions facilitating the roll-out of "small-area wireless access points" and the availability schedule of the 5G spectrum were also adopted.
With respect to the regulation of communication services, most of the obligations intended to protect end-users are for Internet access service and services using public numbering plan resources, independently of the service provider. Other services, such as interpersonal communication services independent of the numbering plan and signal transport services, are only subject to a limited number of obligations.
However, regulation of the competitive markets for intra-European calls and SMS has been introduced through Regulation (EU) 2018/1971 of December 11, 2018, imposing a cap of 19 euro cents per minute and 6 euro cents per SMS, applicable since May 15, 2019.
Concerning universal service obligations, the Code abandons the principle of telephone service provision and calls on Member States to ensure the availability of an affordable Internet access service, upholding the principle of potential designation should Member States consider that the market does not provide such services under said conditions, but increasing the burden of proof for Member States. The financing system for the universal service remains in the hands of the Member States, with coverage from public funds or from a fund financed by the sector. In addition, the Code opens the door to an extension of universal service obligations to include the supply of affordable mobile services.
The Code and its associated regulation on changes in BEREC’s responsibilities and governance do not create a European regulator. However, the Code does adopt the principle of full standardization of the rights of end-users, subject to exceptions, and strengthens the control exercised by the European Commission over access regulation and over the spectrum.
Harmonization of analyses of relevant markets
On December 18, 2020, the European Commission published a new recommendation identifying two relevant product and service markets for which National Regulatory Authorities should carry out market analyses that may lead to the implementation of ex-ante regulation:
− market 1: wholesale provision of local access at a fixed location (formerly market 3a/2014 of Recommendation 2014/710/EC);
− market 2: wholesale provision of high-quality access at a fixed location (formerly market 4/2014 of Recommendation 2014/710/EC).
Call termination rates
The Code provides that fixed and mobile call termination rates will cease to be determined by National Regulatory Authorities but will be determined by the European Commission for all countries in the European Economic Area. This provision concerns European operators for calls terminating in a European country.
In this context, on April 22, 2021, the European Commission published Delegated Act 2021/654 determining call termination rates:
− the fixed call termination rate is set at 0.07 euro cents per minute;
− the mobile call termination rate is set at 0.2 euro cents per minute. However, a glide path is planned until the end of 2023: the maximum call termination rate for countries with rates above 0.2 euro cents per minute was 0.55 euro cents per minute in 2022 and then 0.4 euro cents per minute in 2023.
The Delegated Act entered into force on July 1, 2021.
International roaming
Regulation (EU) 2015/2120 of November 25, 2015 (Telecom Single Market or TSM), which aims to eliminate surcharges for international roaming within the European Union, and Regulation (EU) 2017/920 of May 17, 2017, which lays down the rules for wholesale roaming markets, expired on June 30, 2022. The new Regulation (EU) 2022/612 on international roaming was adopted by the European Parliament and by the Council of the European Union on April 6, 2022 and came into force on July 1, 2022 for a period of 10 years.
The new Regulation:
− sets new wholesale roaming price caps:
- Voice: 0.022 euros per minute from July 1, 2022 to the end of 2024 and 0.019 euros per minute starting in 2025,
- SMS: 0.004 euros per SMS message from July 1, 2022 to the end of 2024, and 0.003 euros per SMS message starting in 2025,
- data:
2022 |
2023 |
2024 |
2025 |
2026 |
Starting in 2027 |
2 euros/Gb |
1.8 euros/Gb |
1.55 euros/Gb |
1.3 euros/Gb |
1.1 euros/Gb |
1 euro/Gb |
− requires that, if the same conditions are available in the country visited, the quality of service provided on roaming is identical to that offered on the domestic market (unless technically impossible);
− provides for the creation by BEREC of databases on means of accessing emergency services and value-added services;
− requires greater transparency vis-à-vis customers, in particular about rates, the risks of high rates, and the means to access emergency services.
BEREC has revised its guidelines to include the changes introduced by the new Roaming Regulation, in particular the rules related to the quality of service to be provided while roaming. In addition, the new guidelines recognize the principle of gradual transition to new generations of technologies and gradual updates of roaming agreements to provide conditions equivalent to those of the Member State of origin.
In addition, on December 6, 2022, a coalition of operators signed, under the aegis of the European Commission, a joint press release aimed at voluntarily implementing lower rates for data roaming with the Western Balkan countries starting in the summer of 2023.
Regulation of the open Internet
The TSM Regulation has introduced rules to ensure an open Internet within the European Union. Article 3.3 of the TSM Regulation states that in the provision of Internet access services, providers shall treat traffic equally and without discrimination, restriction or interference, irrespective of sender and recipient, the content consulted or broadcast, the apps or services used or provided, and the handset equipment used. It is up to the Member States to adapt their national law to comply with this provision.
On April 30, 2019, the European Commission published a report on the implementation of the net neutrality component of the TSM Regulation. The Commission, in the light of market developments, concluded that the principles of the Regulation are appropriate and that they effectively protect end-users by promoting the Internet as a driver of innovation. The Commission pointed out that operators have correctly applied the regulation governing net neutrality and that national regulators have imposed very few fines. It does not propose any amendments to this Regulation.
On the basis of that report, BEREC published a new version of its guidelines in June 2020, clarifying certain points:
− the scope of the regulation is limited to the part between the interconnection and the customer-side network termination point, thus leaving the terminal equipment outside the scope when it is located beyond that termination point;
− the possible compatibility of 5G slicing technologies with the regulation.
On June 15, 2022, BEREC published an update to its guidelines clarifying, following rulings by the Court of Justice of the European Union, that zero-rating practices do not comply with the Open Internet Regulation.
On April 28, 2023, the European Commission published its assessment of the rules on Open Internet access. According to this report [13], the Commission found that the Regulation continues to guarantee the essential balance between the protection of end-users’ rights and the support of a competitive environment in the EU’s Digital Single Market.
Personal data protection
The European Commission wishes to replace the sectoral Directive 2002/58/EC of July 12, 2002 on privacy and electronic communications, known as the e-Privacy Directive. The project, which dates from 2017, establishes rules to protect the privacy of online communications and the use of electronic communications data (metadata). It introduces a level of fines that is aligned with the General Data Protection Regulation (GDPR), which came into force in 2018 [14], and maintains the regulatory asymmetry between telecommunication operators and digital actors (OTT service providers) regarding metadata collection.
However, the e-Privacy regulation project is made less urgent by the fact that the Code has extended the scope of application of the confidentiality of communications to OTT services, and that the GDPR has strengthened the methods used to collect consent and the regime of sanctions to which the 2002 Directive refers. Moreover, the lack of political agreement on the new text makes its approval uncertain.
Digital Services Act and Digital Market Act
At the end of 2020, the European Commission published two pieces of legislation: an update of the e-Commerce Directive [15], known as the Digital Services Act (DSA), and a Regulation to combat the role of large online platforms, known as the Digital Market Act (DMA).
The DSA amends and updates the obligations of intermediaries connecting consumers with goods, services and content. Its main aim is to prevent illegal and harmful activities online, as well as the spread of disinformation. However, as far as electronic communications operators are concerned, the DSA only makes limited changes compared with the Electronic Commerce Directive.
The DSA [16], published in the Official Journal on October 27, 2022, entered into force on November 16, 2022. However, it will be implemented in stages:
− platforms and search engines had until February 17, 2023 to report their number of users, which is used to designate the main platforms and Internet search engines provided for by the text, for which specific obligations exist;
− since the end of August 2023, the new rules have therefore applied to the main platforms and engines. Of these, 17 are very large online platforms (VLOP) and 2 are very large online search engines (VLOSE), with more than 45 million users in the EU;
− from February 17, 2024, the DSA rules will apply to all intermediaries.
For its part, the DMA ushers in an ex-ante regulatory framework for online platforms acting as gatekeepers, and also gives the European Commission broad powers to conduct market investigations. Telecommunication operators are outside the scope of the regulation. The DMA [17] was published in the Official Journal on October 12, 2022, entered into force on November 1, 2022, and became applicable from May 2, 2023. On September 5, 2023, Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft were the first gatekeepers designated by the European Commission under the DMA. These companies will have to comply with their new obligations by early March 2024.
Access Recommendation (Gigabit Connectivity)
On February 6, 2024, the European Commission adopted the recommendation on the regulatory promotion of Gigabit connectivity. It replaces the 2010 Recommendation on Next Generation Access (NGA) and the 2013 Recommendation on Non-Discrimination and Pricing Methodologies (NDCM), collectively referred to as "Access Recommendations". It aims to update and align the Recommendation with the European Code of Electronic Communications (EECC), with particular emphasis on promoting access and adopting very high capacity networks (VHCN).
This Recommendation [18] aims to create regulatory incentives and generate the necessary investments to achieve connectivity objectives at EU level. In particular, it defines a common approach to promote "consistent and effective implementation" of access obligations imposed by National Regulatory Authorities on operators with significant market power under market analyses. In order to ensure fair competition, it intends to promote the deployment of gigabit networks by ensuring that all operators can have access to existing network infrastructures regulated under market analysis (especially in the context of the copper network shutdown).
Adopted by the European Commission on February 6, 2024, the text entered into force three days after its publication in the Official Journal on February 19, 2024.
This text is a non-binding act for National Regulatory Authorities, but will be applied by the European Commission when it receives an opinion from a regulatory authority on a draft market analysis under the procedure provided for in the European Code for Electronic Communications.
"Gigabit Infrastructure Act" (GIA) Regulation
This text will replace the current 2014 Broadband Cost Reduction Directive (BCRD). It follows the conclusions of the European Commission in 2018 which pointed to inconsistencies in implementation in the EU and inefficiencies.
The GIA, which focuses solely on Very High Connectivity Networks (VHCN) aims to align the rules for achieving the EU’s 2030 connectivity targets. It intends to promote the deployment of 5G and fibre optic networks within the European Union by harmonizing the systems in force (including simplification, harmonisation and acceleration of administrative authorisations, thus reducing the administrative burden and costs of deploying fibre and 5G).
The provisional agreement reached on this text on February 6, 2024 was validated by the European Council. It is expected to be formally adopted by the European Parliament plenary by the end of April 2024 and then formally adopted by the European Council. The regulation will enter into force 20 days after its publication in the Official Journal of the EU and will be directly applicable in all Member States 18 months after its entry into force (no transposition into national law is required, but flexibility in the application of the text is granted to Member States on certain provisions).
The main measures finally adopted are:
− extension of the scope of the regulation, covering a large number of owners (not telecoms operators) of physical infrastructures that can be mobilized for the deployment of fixed and mobile networks, including the addition of public sector infrastructures;
− details of pricing arrangements when telecom operators access regulated infrastructure. These tariff obligations (imposed through "fair and reasonable" conditions) still do not guarantee the recovery of all costs incurred, while not actually preventing excessive prices;
− concerning the permitting procedures for the deployment of 5G and fibre networks, the tacit agreement principle initially proposed by the European Commission will now be optional for Member States if one of the following two possibilities is proposed: compensation mechanism for damages resulting from delay in proceedings or possibility of recourse to a court or supervisory authority;
− transparency requirements for physical infrastructure (especially for operators and the public sector) to be reported in a single point of information;
− specific provisions for fibre cabling inside buildings (obligation for new and renovated buildings with application for a permit), with the obligation to equip these buildings with an access point as a prerequisite for obtaining a permit.
In addition, the retail price cap for intra-EU international calls for residential customers, currently at €0.19 excluding taxes per minute for calls and €0.06 excluding taxes per SMS is maintained until the end of 2028. From 1 January 2029, the text provides for an alignment of the retail prices of intra-EU calls on domestic prices for residential offers.
1.7.2 France
1.7.2.1 Legal and regulatory framework
Legal framework
The electronic communications sector is mainly governed under national law by the CPCE (Code des Postes et des Communications Electroniques - French Postal and Electronic Communications Code), as well as by legal provisions relating to electronic commerce, the information society, consumer protection and personal data protection, which must comply with European directives.
France transposed the European Telecoms Package, as amended in 2009, via a Government Order dated August 24, 2011 and a Decree dated March 12, 2012 for the implementing regulations.
The European Code was transposed by Government Order 2021-650 of May 26, 2021 and implementing decrees 2021-1136 of August 31, 2021 and 2021-1281 of September 30, 2021, with the exception of the provisions relating to universal service (see below) and the obligations relating to geographical surveys of network coverage, which were transposed by the law of December 3, 2020 on various provisions for adaptation to European Union economic and financial law. Some provisions on the consumer side are also awaiting final regulations.
The audiovisual communication services produced or distributed by the Orange group come under the specific regulations governing this sector and are governed by Law 86-1067 of September 30, 1986 on the Freedom of Communication.
Regulatory Authorities
The French Postal, Electronic Communications and Media Distribution Regulatory Authority (Arcep) is an independent administrative body created by the Law of July 26, 1996 and is in charge of the nationwide regulation of the electronic communications and postal sectors and press distribution. Within the electronic communications sector, Arcep’s main missions are to define regulations for operators present in the markets in question. It has powers to sanction non-compliant operators and can rule, in particular, on disputes between operators over technical and pricing conditions for network access and interconnection. Arcep also allocates spectrum and numbering resources. Finally, it determines the size of contributions to fund universal service obligations and oversees the mechanisms for delivering this funding.
The French Competition Authority is an independent administrative authority responsible for ensuring open market competition and compliance with public economic policy. It has jurisdiction over all business sectors, including electronic communications. It has powers to sanction anti-competitive practices, as well as consultative powers. It is also responsible for overseeing mergers and acquisitions.
The ANFr (Agence nationale des fréquences - French national spectrum agency) is responsible for planning, managing and controlling the usage of radio spectrum and for coordinating the establishment of certain radio transmission facilities. The frequency spectrum is divided between 11 controlling authorities: public authorities, Arcep and ARCOM (Autorité de régulation de la communication audiovisuelle et numérique - French Regulatory Authority for Audiovisual and Digital Communication). Arcep and the ARCOM are in turn responsible for allotting to users the spectrum they control.
ARCOM (Autorité de régulation de la communication audiovisuelle et numérique - Regulatory Authority for Audiovisual and Digital Communication), created by Law 2021-1382 of October 25, 2021 on the regulation and protection of access to cultural works in the digital age, merged the CSA with Hadopi (Haute autorité pour la diffusion des œuvres et la protection des droits sur Internet - High Authority for the Distribution of Works and Protection of Rights on the Internet) on January 1, 2022. ARCOM protects the freedom of audiovisual communication, as well as the regulation and protection of access to cultural works in the digital age.
1.7.2.2 Regulation of mobile telephony
Spectrum
Main Orange spectrum allocations in mainland France
700 MHz |
Authorization granted in December 2015 for 10 MHz duplex for 20 years (use between 2015 and 2035). |
800 MHz |
Authorization granted in January 2012 for 10 MHz duplex for 20 years for the roll-out of very high-speed mobile broadband (2012-2032). |
900 MHz |
Renewal in December 2018 of the 8.7 MHz duplex authorizations for 10 years (2021-2031). |
1,800 MHz |
Renewal in December 2018 of the 20 MHz duplex authorizations for 10 years (2021-2031). |
2.1 GHz |
Renewal in December 2018 of the 14.8 MHz duplex authorizations for 10 years (2021-2031). |
2.6 GHz |
Authorization granted in October 2011 for 4G services for 20 MHz duplex for 20 years for the roll-out of very high-speed mobile broadband (2011-2031). |
3.4 -3.8 GHz |
Authorization issued in November 2020 to use a 90 MHz spectrum block (3,710-3,800 MHz) in time-division duplexing (TDD) mode for a period of 15 years (2020-2035), with a possible extension of 5 years. |
NB: This spectrum is technologically neutral if granted since May 2011, or since May 2016 if granted earlier, and Arcep may not oppose any request for neutralization.
The New Deal
The agreement signed on January 14, 2018 between the government, Arcep and the four mobile operators (Orange, SFR, Bouygues Telecom and Free Mobile) to ensure better mobile coverage of the country, and particularly rural areas, resulted in the modification, at the request of operators, of authorizations for 900 MHz, 1,800 MHz and 2.1 GHz spectrum bands to include commitments for better coverage in the form of obligations, and the launch of a ten-year procedure to re-allocate those spectrum bands, without auctions and with stable fees.
By Arcep Decision of July 3, 2018 (Decision 2018-0682), the coverage commitments under the New Deal (see below) for the period prior to 2021 apply with immediate effect under the amended authorizations. The obligations and commitments made by the operators beyond 2021 were incorporated into the new authorizations granted in December 2018 (Decision 2018-1392) for ten years from the expiration of the previous authorizations.
5G
3.4-3.8 GHz band in mainland France
At the end of the procedure for the allocation of 5G spectrum in the 3,490-3,800 MHz band, the spectrum use authorizations issued by Arcep came into effect on November 18, 2020. The spectrum allocated to Orange is in the 3,710-3,800 MHz band, i.e. a block of 90 MHz in time-division duplexing (TDD) mode. The spectrum is allocated for 15 years, with the possibility of a five-year extension if the licensee agrees to the terms of the extension. The total price of the spectrum allocated to Orange is 854 million euros. The payment of this sum is spread over 15 years (350 million euros for the 50 MHz block obtained at the reserve price in return for optional commitments), and over four years (504 million euros for the 40 MHz block obtained during the main auction phase). In the Official Journal of November 11, 2023, the government published a decree [19] deferring payment of the remaining fixed share of fees due for the use by operators of the 3.5 GHz band in mainland France. It alters the payment schedule for the remaining fixed share as follows:
− the balance of 280 million euros due for the 50 MHz block obtained at the reserve price is divided into 8 equal installments over 8 years, payable annually from November 1, 2028;
− the balance of 126 million euros due for the 40 MHz block obtained during the main auction phase is divided into 3 equal installments over 3 years, payable on January 1, 2026, January 1, 2027 and January 1, 2028.
The obligations are as follows:
− for the roll-out of sites using spectrum in the 3.5 GHz band (i.e. 3,000 sites at end-2022, 8,000 sites at end-2024 and 10,500 sites at end-2025): 25% of the sites rolled out by the end of 2024 and the end of 2025 must be located in rural areas and industrial areas outside very densely populated areas;
− widespread availability of a 5G service at all sites by the end of 2030, an obligation that may be met either with the 3.4-3.8 GHz band or another band;
− provision of a speed of at least 240 Mbits/s from 75% of sites by the end of 2022, 85% of sites by the end of 2024, 90% of sites by the end of 2025, and 100% of sites by the end of 2030;
− coverage of the main highways (approximately 17,000 km) by the end of 2025 and major roadways (approximately 55,000 km) by the end of 2027, for moving vehicles, with 5G service and a download speed of 100 Mbit/s for these two types of roads;
− the provision of differentiated services, i.e. the coexistence of several different services in terms of performance or quality of service on the same mobile network, by the end of 2023;
− the activation of the IPv6 (Internet Protocol version 6) network protocol from December 31, 2020.
In addition, Orange made commitments (which became obligations in the authorization issued) to obtain a 50 MHz block at the reserve price:
− from the end of 2023, Orange must provide a fixed Internet access service on its mobile network with sites using the 3.5 GHz band;
− Orange must provide a very high-speed fixed wireless access offer and a very high-speed fixed wholesale access offer to provide an alternative solution to local users who receive fixed Internet access services from fixed-access radio networks for which the authorization expires no later than July 2026;
− from the introduction of differentiated commercial service offers, Orange must respond to reasonable requests for the provision of services from "verticals" [20] who are end-users of electronic communications services;
− for private sector companies, associations and public sector organizations, Orange must grant their requests for indoor coverage;
− lastly, Orange must offer hosting for Mobile Virtual Network Operators (MVNOs) and be transparent about network outages and planned roll-outs.
26 GHz band
The government and Arcep called for the creation of experimentation platforms open to partners by way of an open window in January 2019. In this context, Orange carried out experiments to explore the technical and service prospects of this band. Arcep has maintained the experimental framework to learn more about this "millimetric" band, whose use cases and ecosystem are still to be established.
3.8-4.2 GHz band
In October 2021, the government commissioned a report from Philippe Herbert on industrial 5G. The report, published in March 2022, outlines recommendations for the development of industrial 5G in France. It led to the opening of an experimental window by the government and Arcep, giving access to the 3.8-4 GHz band for industrial players in any sector (including mobile operators) from March 2022. This was replicated in 2023.
Orange has several experimental authorizations. It should be noted that the entire 3.8-4.2 GHz band is currently allocated to satellite fixed stations. This is undergoing technical harmonization at the European level to establish a technical framework for the coexistence of satellite systems and 5G radio systems.
Allocations overseas
Departments of Réunion and Mayotte:
On May 24, 2022, following the auction for the allocation of 5G spectrum for the territories of Réunion and Mayotte, Arcep issued Orange authorizations for 10 MHz frequencies in the 700 MHz band and 100 MHz in the 3.5 GHz band for Réunion, and 10 MHz in the 700 MHz band for Mayotte, for a period of 15 years, i.e. until May 23, 2037, with the possibility of a five-year extension. Orange must comply with the obligations under these authorizations, namely:
− coverage of seven predefined areas before May 1, 2025 and two sites at locations made available (roll-out for these two sites within 18 months, on a case-by-case basis);
− supply, using the spectrum in the 700 MHz band, of very high-speed broadband mobile access from at least 50% of mobile network sites and, in any event, from at least 10 sites, as of May 24, 2027;
− introduction of voice and SMS options over Wi-Fi, applicable to all its offers with a compatible device, no later than May 23, 2024 (in Réunion) and May 23, 2025 (in Mayotte), with the aim of providing indoor coverage;
− provision of a fixed Internet access service on the mobile network no later than November 23, 2022, in the areas identified and made public in accordance with the provisions of Arcep Decision 2018-0169 of February 22, 2018 [21], particularly for premises without fixed access to an Internet service with a download speed of at least 8 Mbit/s;
− lastly, Orange will also have to provide, using spectrum in the 3.4-3.8 GHz band, mobile access from at least 50% of sites with a power greater than 5 W and, in any case, at least 50 sites as of May 24, 2027.
West Indies - Guyana area
At the end of September 2022, the government launched procedures for allocating 5G spectrum in Guyana and in the northern islands (Saint-Martin and Saint-Barthélemy) by publishing decrees on the terms and conditions for the allocation of authorizations:
− for Guyana, the allocations concern the 700 MHz bands (for the entire territory) and the 3.4-3.8 GHz band only for the coastal municipalities with the exception of Regina and Ouanari;
− in Saint-Martin and Saint-Barthélemy, they concern the 700 MHz and the 3.4-3.8 GHz bands for each territory, and the 900 MHz and 2.1 GHz bands in Saint-Barthélemy.
The allocation procedures were completed in July 2023. Arcep granted the successful candidates spectrum licenses for these bands on July 25, 2023.
Orange received the following authorization:
− Guyana: 10 MHz duplex in the 700 MHz band and 60 MHz in the 3.5 GHz band for a period of 15 years, i.e. until July 24, 2038, with the option of a 5-year extension;
− Saint-Martin and Saint-Barthélemy: 10 MHz duplex in the 700 MHz band and 100MHz in the 3.5 GHz band for a period of 15 years, i.e. until July 24, 2038, with the option of a 5-year extension;
− Saint-Barthélemy: 5 MHz duplex in the 2.1 GHz band, until April 30, 2025.
In Guyana, Orange must comply with the following obligations under its authorization:
− coverage obligation for six p-identified zones and four zones at the locations made available;
− supply, using the spectrum in the 700 MHz band, of very high-speed broadband mobile access from at least 50% of mobile network sites and, in any event, from at least 5 sites, as of July 24, 2028;
− provision of a fixed Internet access service on the mobile network no later than January 24, 2024, in the areas identified and made public in accordance with the provisions of Arcep Decision 2018-0169 of February 22, 2018 [22], particularly for premises without fixed access to an Internet service with a download speed of at least 8 Mbit/s;
− roll-out of a network providing mobile access in the 3.4-3.8 GHz band, allowing a theoretical maximum download speed of at least 100 Mbit/s per block of 10 MHz simplex with a latency of 5 ms or less, from at least 40% of mobile network sites and, in any event, from at least 15 sites, from July 24, 2028;
− introduction of voice and SMS options over Wi-Fi, applicable to all its offers with a compatible device, to provide indoor coverage no later than January 24, 2026.
For Saint-Martin and Saint-Barthélemy ("the northern islands"), Orange must comply with the following obligations under its authorization:
− coverage obligation for five p-identified zones in Saint-Martin and three zones in Saint-Barthélemy;
− supply, using the spectrum in the 700 MHz band, of very high-speed broadband mobile access from at least 50% of mobile network sites and, in any event, from at least 2 sites, as of July 24, 2028;
− roll-out of a network providing mobile access in the 3.4-3.8 GHz band, allowing a theoretical maximum download speed of at least 100 Mbit/s per block of 10 MHz simplex with a latency of 5 ms or less, from at least 50% of mobile network sites and, in any event, from at least 2 sites in each territory, from July 24, 2028;
− provision of a fixed Internet access service on the mobile network no later than January 24, 2024, in the areas identified and made public in accordance with the provisions of Arcep Decision 2018-0169 of February 22, 2018 [23], particularly for premises without fixed access to an Internet service with a download speed of at least 8 Mbit/s;
− introduction of voice and SMS options over Wi-Fi, applicable to all its offers with a compatible device, to provide indoor coverage no later than January 24, 2026.
Following the responses to Arcep’s public consultations in 2020 and 2021, particularly on an initial draft decision relating to the spectrum allocation procedure in Guadeloupe and Martinique (consultation launched in the second half of 2021), Arcep decided to amend its draft at the request of the government. More recently, it held a public consultation from October 27 to December 12, 2023 on how to allocate spectrum in the 900 MHz, 700 MHz and 3.4-3.8 GHz bands in Guadeloupe and Martinique.
An allocation procedure is due to be launched in the first half of 2024.
Mobile coverage
The New Deal
Under the New Deal, operators are committed to:
− expanding coverage in mainland France by way of the "targeted coverage" scheme, making it possible for each operator to cover 5,000 new areas (most of which are shared between operators), replacing the existing programs ("town center dead zones," "800 strategic sites" and the "France Mobile" program), which will now be fully paid for by the operators;
− generalizing access to very high-speed broadband by introducing 4G with a power rating in excess of 5W to all their own mobile sites by the end of 2020, and to 75% of the sites in the "town center dead zones" program by the end of 2020, upping this to 100% by the end of 2022;
− accelerating the coverage of transport routes, so that the main highway and rail routes have 4G coverage. The agreement also includes provisions on coverage in regional trains;
− improving coverage inside buildings, with two components: progressive availability of voice and SMS services via WiFi with the goal of enabling 80% of our customers who own a compatible handset to benefit from these services by the end of 2019; and marketing of an offering allowing public companies and individuals who so request to obtain improved multi-operator indoor coverage of their buildings at a reasonable rate;
− improving reception quality throughout the country, and particularly in rural areas. The new performance standard applied to operator obligations will be that of "good coverage," defined as the "ability to be able to call and exchange SMS outside of buildings in most cases and within buildings in some cases".
These obligations were written into their current authorizations and in the newly allocated 900 MHz, 1,800 MHz and 2.1 GHz band authorizations for ten years.
Obligations to roll out and provide 4G coverage in mainland France, including those resulting from the New Deal
(as a % of the population) |
Jan-17 |
Oct-19 |
Dec-20 |
Jan-22 |
Dec-22 |
Oct-23 |
Jan-24 |
Dec-25 |
Jan-27 |
End-2030 |
Regional rail network (coverage inside trains in each region as a % of track) |
60% |
80% | ||||||||
Regional rail network (national coverage inside trains as a % of track) |
60% |
80% |
90% | |||||||
Regional rail network (national coverage alongside tracks as a % of track) |
90% | |||||||||
Priority highways (as a % of highways out of car) |
100% | |||||||||
Priority highways (as a % of highways from inside vehicles) |
100% | |||||||||
Town centers in the "dead zone" program (1) |
75% |
100% | ||||||||
In the priority roll-out zone (2) for very high-speed mobile broadband (3) |
40% (800 MHz) |
90% (800 MHz) 50% (700 MHz) |
92% (700 MHz) |
97.70% (700 MHz) | ||||||
In each French department |
90% |
95% | ||||||||
Across the entire mainland France area |
60% |
75% |
98% |
99.60% |
(1) 1% of the population and 3,300 town centers.
(2) 18% of the population, 63% of the country.
(3) An operator has met its obligation to provide a very high-speed mobile broadband service when the equipment rolled out enables a theoretical peak speed of 60 Mbps.
Additionally, operators are obliged to provide a mobile radiotelephone service under the "good coverage" conditions set out by Arcep to 99.6% of the population by March 2024 at the latest, and to 99.8% by March 2028.
In June 2019, Arcep opened a sanctions procedure against Orange covering all the obligations laid down in the New Deal. The procedure is ongoing, with regular roll-out status reports sent to the regulator (Arcep).
At end-December 2023, Orange’s 4G coverage was 99.8% of the population and 95.1% of the country, compared to 99.7% and 94.1% respectively at end-2022. (source: Orange estimates - October 2023)
Infrastructure sharing
The New Deal agreement contains clauses relating to the sharing of networks, including active sharing where all four operators are present on a site as part of the targeted coverage arrangements. A mobile site sharing contract was signed in July 2019 between the four network operators for the roll-out of 4G on sites destined for active sharing. This agreement is gradually being implemented for the sites of the "town center dead zones" program and the new sites to be rolled out as part of the New Deal’s targeted coverage scheme.
Arcep has issued an opinion validating an amendment to the roaming agreement between Free Mobile and Orange in mainland France, which extends the national roaming termination period until December 31, 2025, while maintaining the maximum upload and download rates that roaming customers can reach at 384 Kbps.
1.7.2.3 Regulation of fixed telephony, broadband and very high-speed broadband Internet
Regulatory framework
Broadband and very high-speed fixed broadband market analyses for the 2024-2028 period
On December 18, 2023, Arcep adopted new Decisions within the framework of analyses of the fixed broadband and very high-speed fixed broadband markets for the 2024-2028 period.
They define the asymmetric regulation [24] of the fixed broadband and very high-speed fixed broadband markets:
− a separate civil engineering market;
− market "1" for passive services (formerly market 3a);
− market "2" for specific activated B2B services (formerly market 4).
Lastly, by Decision 2023-2804, in order to take into account the European Commission’s observations, Arcep is extending for one year the current market analysis decision for activated mass market services (formerly "market 3b" - DSL bitstream offers). It will continue its work in 2024 to take into account ongoing developments in this market. Arcep did not see the need to maintain a comparable price framework to the one provided for in Decision 2020-1493. In the absence of a price framework, the price changes will be assessed on the basis of market 1 offer rates.
Arcep has not altered the framework for symmetrical fiber regulation adopted in 2020 and applicable to all operators with FTTH networks.
The regulatory changes focus on three key objectives:
− to support the switch from the legacy copper network to fiber;
− to continue pro-investment regulation to make the FTTH network the new benchmark for fixed infrastructure;
− to boost the B2B market.
Current regulatory framework for the regulation of wholesale services for the 2024-2028 period
"Civil engineering" market analysis Decision 2023-2801 defines a new relevant market covering all civil engineering infrastructure for the deployment of networks and designates Orange as the operator exercising significant influence. Accordingly, Orange must grant reasonable requests for access to its civil engineering infrastructure (Civil Engineering for Optical Loops and Links) and associated resources and services (subscriber connection node/optical connection node hosting offer and LFO offer). [25]
"1" market analysis Decision 2023-2802 redefines the relevant market for access to copper and fiber local loop networks (to take into account the new "civil engineering" market) and designates Orange as the operator exercising significant influence. As such, Orange must grant reasonable requests for access to its copper local loop network and the associated resources and services (unbundling offer).
"2" market analysis Decision 2023-2803 maintains the relevant market for high-quality activated access to copper and fiber networks for the B2B market and designates Orange as the operator exercising significant influence. Accordingly, Orange must grant reasonable requests for high-quality activated access to its copper and fiber networks (Business DSL/FTTO offers). [26]
These Decisions impose on Orange obligations of transparency, non-discrimination, service quality publication of reference offers, price control and accounting separation.
Other regulatory provisions relating to fixed broadband and very high-speed networks
Bouygues Telecom has filed a complaint with Arcep for the settlement of a dispute against Orange in October 2021 regarding refunds of contributions to the costs of commissioning CCF (câblage client final - end customer cabling) connections.
Bouygues Telecom challenged the mechanism in force in Orange’s FTTH offer, where the contribution for a given CCF connection is refunded to the commercial operator selling it when the line is taken over by a new commercial operator. Bouygues Telecom has asked Arcep to change the payment-triggering event, so that from now on the contribution is refunded when the line is terminated. Bouygues Telecom also requested that the formula for calculating the refund amount be modified. In its dispute settlement decision 2022-0682 adopted on March 29, 2022, Arcep ruled in favor of granted Bouygues Telecom’s initial request for a change in the triggering event for the payment of refunds. However, Arcep did not agree to the specific calculation formula requested by Bouygues Telecom.
In execution of this decision, on June 1, 2022 Orange offered Bouygues Telecom a contract for modified access to FTTH lines in very densely populated areas and entered into negotiations with Bouygues Telecom. To date, the contract has not been accepted by Bouygues Telecom.
On June 2, 2022, Orange appealed Arcep’s decision before the Paris Court of Appeal and requested that the decision be annulled.
Management of FTTH roll-outs
Commitments made by Orange in the AMII zone under Article L. 33-13
In early 2018, Orange formalized its proposed FTTH roll-out commitments in nearly 3,000 municipalities under Article L. 33-13 of the CPCE. Orange proposed to ensure that, for its FTTH roll-out in the AMII (Appel à Manifestation d’Intention d’Investissement - Call for Investment Intentions) zone:
− (i) at end-2020, 100% of homes and business premises would be connectable or connectable on demand (including a maximum of 8% of premises connectable on demand), excluding refusals by third parties;
− (ii) at end-2022, 100% of homes and business premises would be made connectable (excluding refusals by third parties). These commitment proposals took into account the agreement reached at the end of May 2018 between Orange and SFR, which led to Orange withdrawing from 236 municipalities in favor of SFR.
The commitments proposed by Orange (and by SFR) were accepted by the French government on July 26, 2018 [27]. In March 2022, as part of a sanctions procedure opened in 2019, Arcep gave Orange formal notice to meet the first milestone of its L. 33-13 commitments by the end of September 2022 at the latest.
In the summer of 2022, Orange appealed against this formal notice decision before the litigation division of the French Council of State, challenging the calculation basis now used by Arcep (i.e. enhanced prior information files, or files exchanged between operators for access to FTTH networks) to assess commitments under Article L. 33-13 (commitments made in 2018 by Orange on the basis of INSEE housing data). As part of this dispute, Orange also filed a QPC (Question Prioritaire de Constitutionnalité - Priority Question of Constitutionality) on February 3, 2023, contesting the constitutional basis of Article L. 33-13 and Arcep’s actual authority.
The French Council of State decided not to refer the QPC to the Constitutional Council. In April 2023, it upheld Arcep’s formal notice under Article L. 33-13 by rejecting Orange’s complaints on the merits. On November 8, 2023, Arcep’s restricted committee ordered Orange to pay a sanction of 26 million euros for failing to meet the 2020 milestone for its FTTH roll-out commitments. Orange contested this decision by filing an appeal with the French Council of State on January 5, 2024. It argued that the sanction was unjustified and disproportionate, and had been imposed on the operator that had invested the most in the roll-out of fiber in France.
In parallel, the government indicated on November 7 that Orange had proposed a new roll-out commitment in its AMII zone to replace the 2022 milestone for its commitments under Article L. 33-13 (see second milestone of the commitments made in 2018). A government order incorporating the terms of Orange’s commitment could therefore be published following an advisory opinion from Arcep. The proposed commitment is based on the following elements:
− by 2025, 1,120,000 premises in the entire AMII zone will be made connectable (representing 98.5% of connectable premises, including cases of blockage/refusal);
− by 2024, 140,000 premises within the perimeter of 55 inter-municipality cooperation zones with the lowest FTTH coverage will be made connectable;
− within three months, all remaining buildings will be declared connectable on demand, excluding refusals and unless there are exceptional construction difficulties;
− within six months, propose a retail offer to process on-demand connection requests from Orange customers before the copper network is switched off.
This commitment under Article L. 33-13, once accepted, will supersede the 2022 milestone of the 2018 L.33-13 commitment.
The sanctions procedure for the 2022 milestone will continue to apply until the government has formally approved the new commitments.
AMEL (Appels à manifestation d’engagements locaux - Calls for Local Commitments) and "equity" roll-outs
In December 2017, the Government announced the launch of a Call for Local Commitments (AMEL) through which to identify operators wishing to roll out privately funded FTTH connections beyond the current AMII zone.
Orange proposed making commitments with respect to Article L. 33-13 as part of AMEL procedures for the French departments of Lot-et-Garonne, Vienne, Deux-Sèvres and Haute-Vienne. Arcep has issued a favorable opinion on Orange’s proposed commitments in these four departments.
Completeness of FTTH networks
Under the obligation of completeness imposed in Decision 2010-1312, all infrastructure operators must have made connectable (except in the event of refusal) all housing and professional premises in the rear area of a shared access point within a reasonable period of time (between two and five years depending on the reasons for the Decision) from the roll-out of the shared access point.
On several occasions, Arcep has given Orange formal notice to comply with the obligation of completeness, each time with a list of shared access points (which had been in service for more than five years and which had not reached the required completeness rate) to be brought into compliance within one year.
Price framework for access to the copper local loop
On December 14, 2023, Arcep adopted Decision 2023-2821, which defines a price framework for full unbundling for the years 2024 and 2025. This decision sets rate caps, which are no longer based on costs derived from Orange’s regulatory accounting but instead are based on the bottom-up cost model of a shared local optical loop network:
− for fully unbundled access, the monthly recurring rate is capped at 9.20 euros from 2024 and 2025 excluding IFER;
− the rate including IFER is 11.27 euros as of January 1, 2024;
− the rate including IFER 2025 will reflect changes in taxation.
Market 1 analysis decision 2023-2821 also sets out the price control arrangements for the copper local loop. Arcep decided that, in view of the fiber roll-out and the retirement of the copper network, keeping the cost orientation remedy may no longer be justified in some parts of the territory for the 2024-2028 round. Arcep has therefore identified three access categories for the current round:
− access for which cost orientation is maintained, with prices set by Decision 2023-2821;
− access reflecting changes in competitive conditions, and for which:
- either maintaining a price control obligation for access to the copper local loop is no longer justified,
- or keeping the cost-oriented obligation is no longer justified but, in view of the level of competition identified, it seems appropriate to impose an obligation of non-excessive pricing.
For prices in the "non-excessive" zone, Orange set out its price proposal in a letter to Arcep’s Chairwoman on June 23, 2023. The proposal was then put to a public consultation with all stakeholders. Orange proposed a monthly recurring access rate (excluding IFER) of 9.95 euros/month in 2024 and 10.70 euros/month in 2025.
Orange is free to set prices in zones where price obligations have been lifted. However, Arcep is planning to conduct a price replicability test if Orange charges a higher price than in the "non-excessive" zone.
Economic conditions for access to Orange’s civil engineering infrastructure: amendment of Decision 2017-1488
On December 18, 2023, Arcep adopted Decision 2023-2820 which defines the economic conditions for access to Orange’s civil engineering infrastructure.
This decision changes the reference year for the copper and fiber access numbers used for pricing access to Orange’s civil engineering infrastructure. For the prices in a given year Y, the calculation will now use the provisional access for year Y, and not the access recorded at the end of year Y-2, once the prices are set for 2024. However, smoothing over time is planned so that for operators who take up the offer, prices increase gradually over two years. Thus, for 2024 and 2025, the prices of the reference offer for access to local loop civil engineering are calculated so as to recover the local loop civil engineering costs allocated to the local optical loops for those two years and:
− for 2024, the prices only take into account at most three quarters of the price increase resulting from the change in reference year provided for in Article 1 of the decision;
− for 2025, the prices take into account all the projected costs for 2025 and the share of projected costs for 2024 that could not be recovered from 2024 prices by applying the previous indent.
Closure of the copper network
In accordance with the framework defined by the market analysis decisions of December 2020, in January 2022 Orange submitted its draft copper network closure plan to Arcep, which put it to a public consultation from February 7 to April 4, 2022.
On July 29, 2022, Arcep published a question-and-answer type document with clarifications and adjustments made by Orange to its copper closure plan. Adjustments to the regulatory framework relating to Orange’s copper network closure plan are planned under market 1 analysis decision 2023-2802. These include the relaxation of commercial switch-off criteria and a reduced notice period for the commercial switch-off in areas that are 95% connectable to FTTH. The decision also provides a framework for data-sharing obligations.
The first batch of switch-offs was launched on December 13, 2022, with the commercial switch-off due to take effect on January 31, 2024 and the technical switch-off in January 2025.
A trial was carried out in six towns where the commercial switch-off took place on March 31, 2022 and the technical switch-off on March 31, 2023. The outcomes were presented in October 2023.
The second batch of switch-offs was launched on June 28, 2023, with the commercial switch-off scheduled for January 27, 2025 and the technical switch-off for January 27, 2026.
Since the end of the 1Q 2023, a trial has been taking place in a very densely populated area (the towns of Vanves and Rennes). The commercial switch-off is due to take place on March 31, 2024 and the technical switch-off on March 31, 2025.
Wholesale service quality for B2C and B2B markets
In the market analysis decisions adopted in December 2023 for the new round (2024-2028), Arcep kept the minimum quality of service thresholds to be met by Orange for its wholesale copper offers (unbundling) intended for businesses.
In April 2021, Arcep extended the September 2018 sanctions procedure relating to the quality of service for wholesale copper offers and closed it for wholesale offers intended for businesses.
In Decision 2020-1432 on the symmetric regulation of FTTH offers adopted in December 2020, Arcep introduced minimum quality of service thresholds to be respected by each infrastructure operator for its wholesale FTTH offers from the start of 2023, in particular for offers with enhanced quality of service for businesses.
Regulation of fixed telephony
Universal telephony service
Orange has not been a Universal Service Operator since November 27, 2020, when the last three-year designation period expired.
In its Decision 2021-0644 of April 13, 2021, Arcep set the definitive assessment of the net cost of universal service and operators’ contributions for 2020.
1.7.3 Spain
1.7.3.1 Legal and regulatory framework
The transposition of the European Electronic Communications Code [28] was made via a law amending the Telecommunications Code of June 28, 2022 with effect from June 30, 2022. Some provisions will apply 12 months later (June 30, 2023).
On June 9, 2022, Parliament approved an amendment to the law governing the telecommunication sector, in application of various national plans including the plan for connectivity, digital infrastructure and the promotion of 5G technology. One of the notable provisions concerns the obligation to provide 100 Mbps connectivity to 100% of the population within 12 months.
The telecommunication sector is also covered by Law 15-2007 of July 3, 2007 relating to the implementation of competition rules.
The CNMC (National Commission for Markets and Competition), established by Law 3-2013 of June 4, 2013, brings together regulatory authorities from different economic sectors, including telecommunications, and the antitrust authority. It is responsible for the numbering plan and the settlement of disputes between operators.
The Ministry of the Economy and the Digital Transition [29] is in charge of managing authorizations, spectrum allocation, approval of the cost of universal service, service quality and the settlement of disputes between consumers and operators that do not hold a dominant position.
1.7.3.2 Regulation of mobile telephony
Spectrum
• Summary of national spectrum allocated to Orange and expiration year
700 MHz |
800 MHz |
900 MHz |
1,800 MHz |
2.1 GHz |
2.6 GHz |
3.5 GHz |
26 GHz |
10 MHz duplex (2041) |
10 MHz duplex (2031) |
10 MHz duplex (2030) |
20 MHz duplex (2030) |
15 MHz duplex +5 MHz (2030) |
20 MHz duplex (2030) |
40 MHz duplex (2030) 70 MHz (2038) |
400 MHz (2042) |
Internal source.
Mobile termination market
In its public consultation launched on September 26, 2022, considering that the mobile call termination service is now provided in an environment of effective competition following the adoption of Delegated Act (EU) 2021/654 [30], the CNMC proposed abolishing the obligations imposed on mobile operators and deregulating this market. On March 14, 2023, finding that this market does not meet the three-criteria test and is moving toward effective competition, the European Commission agreed to the abolition of the obligations. The final decision was published on May 5, 2023 and the obligations were lifted six months after the decision.
5G
As part of the spectrum auction in the 700 MHz band organized in July 2021 by the Ministry of the Economy and the Digital Transformation, Orange acquired 2 blocks of 2x5 MHz for 350 million euros. These authorizations have a term of 20 years, with a possible extension of 20 years. The coverage obligations extend from December 2022 to June 2025.
To allow the more efficient use of 5G, the government has proposed the reorganization of the spectrum obtained by operators in the 3.4-3.8 GHz band, so that each has a continuous block. On November 4, 2021, the CNMC issued a favorable opinion on the government’s draft resolution, based on an agreement reached between Telefónica, Orange, Vodafone and Másmóvil in July 2021. The reorganization of this band was concluded in August 2022; the spectrum band allocated to Orange is 3,600-3,710 MHz.
In addition, on December 1, 2021, the Spanish government presented a plan for connectivity, digital infrastructure and the promotion of 5G technology, with a public investment of 4.32 billion euros by 2025, of which 883 million euros are included in the 2021 budget. The connectivity plan includes measures to encourage the roll-out of very high-speed broadband in urban centers and unpopulated areas, so that by 2025, 100 Mbps speed will be achieved for 100% of the population. The 5G promotion plan includes measures to support network roll-out, with the goal of covering 75% of the Spanish population with 5G, as well as uninterrupted 5G coverage by 2025 on major roads, on railways and in airports.
On October 26, 2022, the Ministry of Economic Affairs and Digital Transformation (Mineco) launched a public consultation on an auction in the 26 GHz band. The order submitted for consultation provides for the auctioning of 12 government licenses in a 2,400 MHz band and 38 regional concessions in a 400 MHz band, in blocks of 200 MHz. The consultation ended on October 27, 2022 and the auction took place on December 21, 2022. Orange obtained 400 MHz. Licenses are valid for 20 years and renewable for an additional 20 years.
1.7.3.3 Regulation of fixed telephony, broadband and very high-speed broadband Internet
Wholesale broadband access markets
The CNMC adopted on October 6, and published on October 15, 2021, its Decision to analyze the markets for wholesale provision of local access and central access at a fixed location, corresponding to the 1/2020 (formerly 3a/2014) and 3b/2014 markets, whereby it decided:
− regarding market 1/2020:
- to retain the copper network unbundling obligations introduced in the previous 2016 market analysis and to retain access to Telefónica’s civil engineering infrastructure,
- not to impose ex-ante asymmetrical obligations on Telefónica for the fiber network in 696 municipalities considered effectively competitive (compared with 66 municipalities in the 2016 market analysis), i.e., 70% of the Spanish population, given that a virtual unbundling of local access (VULA) offer must be made available for the rest of Spain at a rate that satisfies the economic replicability test; This deregulation of access to fiber came into force six months after the publication of the decision;
− regarding market 3b/2014:
- to deregulate bitstream access in the area declared non-competitive for copper and NGA [31] and to impose a NEBA fiber (bitstream) offer at rates that satisfy the economic replicability test (ERT) with no time limit.
Regarding the 2/2020 market (formerly the 4/2014 market), the CNMC launched a consultation in December 2020, proposing to maintain most of the obligations on Telefónica. After accepting the draft decision on March 21, 2022, it published the final decision on March 29, 2022.
Furthermore, the spin-off of Telefónica’s copper network does not lead to a change in Telefónica’s regulatory obligations, nor in the conditions for Orange’s access to its network.
NEBA reference offers (bitstream)
On April 27, 2023, the CNMC revised downward (by 10% per year on average) the new prices that operators will have to pay over the next two years for the indirect access point (PAI) capacity of the NEBA wholesale broadband service. The current price (2023) of PAI capacity has dropped from 1.97 euros/Mbps to 1.75 euros/Mbps (down 11.17%). For 2024, the accepted price is 1.61 euros/Mbps (down 8%).
The change is due to the updated cost model, irrespective of the decrease in the number of lines and accesses in Telefónica’s network.
Since 2018, the CNMC has been revising the economic replicability test (ERT) of Telefónica’s services, with a view to setting the wholesale price of fiber. This test consists of verifying whether the prices of Telefónica’s fiber optic wholesale offers (NEBA-local and NEBA-fiber) allow alternative operators to replicate the main fiber services of the incumbent operator.
On August 17, 2023, after Telefónica passed the fifth revision of the ERT, the CNMC announced that it was not necessary to change the wholesale prices.
Following a CNMC consultation on the cost of capital (closed on September 19, 2022 and notified to the European Commission on November 18, 2022), the latter issued a favorable opinion on December 16, 2022 concerning the increase in the cost of capital from 4.82% to 5.20%.
1.7.4 Poland
1.7.4.1 Legal and regulatory framework
Orange’s business activities are governed by several laws:
− the Law of July 16, 2004 relating to telecommunications which transposes into national law the 2002 Telecoms Package on electronic communications;
− the Law of February 16, 2007 on competition and consumer protection;
− the Law of December 2012, transposing EU directives issued in 2009, which came into force on January 21, 2013;
− the Law of May 7, 2010, on developing telecommunication networks and services, which provides access to telecommunication and other technical infrastructure financed through public funds. This law was revised and amended on August 30, 2019, by transposing Directive 2014/61/EU on broadband cost reduction.
Since July 2020, Poland has been working on transposing the Code with a new law on electronic communications. The legislative work is still ongoing.
The Ministry of Digitization, created in November 2015, then incorporated into the Prime Minister’s Office on November 6, 2020 as a result of the government reshuffle, became a separate entity again on April 20, 2023.
The Office of Electronic Communications (UKE) is responsible, in particular, for telecommunication regulation and spectrum management, as well as certain functions related to broadcasting services. In May 2021, the government introduced changes to the Telecommunications Act that concern the appointment and removal of the UKE President. However, in September 2021, the European Commission referred Poland to the EU Court of Justice for infringing the freedom of the national regulator.
The Office of Competition and Consumer Protection (UOKiK) is responsible for the application of competition law, M&A control and consumer protection.
1.7.4.2 Regulation of mobile telephony
Spectrum
• Summary of spectrum allocated to Orange and expiration year
800 MHz |
900 MHz |
1,800 MHz |
2.1 GHz |
2.6 GHz |
3.6 -3.8 GHz |
10 MHz duplex (2030) |
7 MHz duplex (2029) |
10 MHz duplex (2027) |
15 MHz duplex (2037) |
15 MHz duplex (2030) |
100 MHz (2038) |
Internal source.
3G
On September 26, 2023, Orange Poland began switching off its 3G network. This process is under way in six departments and will be completed in 2025. In 2023, only 2.5% of traffic on Orange Poland’s network used 3G technology.
5G
3.4-3.8 GHz frequency band: on December 20, 2022, the regulator launched a consultation on the documentation for auctions of C-band spectrum. The UKE wanted to auction 4 blocks (4x80 MHz) in the 3,480-3,800 MHz band for a period of 15 years. The starting price was set at 450 million zlotys (96 million euros). Since the auction is reserved for operators already holding another spectrum band (in 800, 900, 1,800, 2,100 or 2,600 MHz), it was not open to new entrants. The UKE wanted to impose bandwidth and coverage obligations ranging from 85% to 95% after 84 months. On October 18, 2023 Orange secured 100 MHz for 487 million zlotys (around 110 million euros), i.e. 8.2% above the minimum bid price.
700 MHz band: as part of the deregulation of 700 MHz spectrum for mobile networks, the UKE has initiated a coordination process with neighboring countries, including Russia. On January 11, 2019, Poland asked the European Commission to extend the deadline to June 2022 due to spectrum coordination problems at its borders. In addition, a draft law on cybersecurity, introduced by the government, currently provides for the creation of a State-owned strategic security network using the 700 MHz band to provide telecommunication and cybersecurity services in the areas of defense, national security and public safety. However, the work is still in progress and the draft law has not yet been adopted by Parliament. As a result, the allocation of spectrum in the 700 MHz band was postponed to 2024.
Infrastructure sharing
The network sharing agreement between Orange Polska and T-Mobile Polska, which dates from 2011, was extended to 4G in December 2016. On May 22, 2018, Orange and T-Mobile Polska decided to end spectrum sharing in the 900 MHz and 1,800 MHz bands.
1.7.4.3 Regulation of fixed telephony, broadband and very high-speed broadband Internet
The ex-ante regulation of Orange’s fixed services, for the areas defined as non-competitive, relates solely to wholesale services.
Analysis of the wholesale very high-speed broadband market (markets 3a/2014 and 3b/2014)
On October 22, 2019, the UKE published the Decisions relating to markets 3a/2014 and 3b/2014.
According to the regulator, market development and increasing competition justify further market deregulation. As a result, UKE decided to increase the number of deregulated zones:
− in market 3a/2014, to 51 municipalities;
− in market 3b/2014, to 151 municipalities.
Under these new Decisions, out of a total of approximately 14.6 million households, around 6 million households are deregulated for bitstream access, of which around 2.3 million households are deregulated for unbundling.
The regulator has started collecting data as well as considering the next review of the very high-speed broadband markets. The draft decision is expected in 2024.
Reference offer for fixed markets
The reference offer relates to all wholesale fixed services: call origination and termination, wholesale subscription, partial and total unbundling, and bitstream access.
Following the approval by the European Commission of the modifications to Orange’s reference offer concerning the new fiber connection speed options, the decision was published on October 23, 2022.
In addition, on February 15, 2022, the UKE notified the changes to Orange’s reference offers concerning service access fees. After approval by the European Commission, the UKE published the decision on July 8, 2022.
1.7.5 Other EU countries where the Orange group operates
1.7.5.1 Belgium
Spectrum
• Summary of spectrum allocated to Orange and expiration year
700 MHz |
800 MHz |
900 MHz |
1400 MHz |
1,800 MHz |
2.1 GHz |
2.6 GHz |
3.6 GHz |
10 MHz duplex (2042) |
10 MHz duplex (2033) |
10 MHz duplex (2022) |
30 MHz (2040) |
15 MHz duplex (2022) |
15 MHz duplex (2042) |
20 MHz duplex (2027) |
100 MHz (2040) |
Internal source.
On January 14, 2022, the regulator BIPT (Belgian Institute for Postal Services and Telecommunications) launched calls for applications as part of the procedure for allocating spectrum in the 700 MHz, 1,400 MHz and 3,600 MHz bands for 5G and existing 2G and 3G spectrum (900 MHz, 1,800 MHz and 2,100 MHz). On June 21, 2022, BIPT closed the main phase of the auction.
Orange obtained 2x10 MHz in the 700 MHz frequency band, 100 MHz in the 3.6 GHz frequency band, 2x10 MHz in the 900 MHz frequency band, 2x15 MHz in the 1,800 MHz frequency band and 2x15 MHz in the 2,100 MHz frequency band, for a total of 322 million euros. The positioning of the different spectrum blocks was finalized between the operators without requiring auctions. The rights of use are valid for a period of 20 years, with the exception of the 3.6 GHz band spectrum, which will expire in May 2040. The start date for the 700 MHz and 3.6 GHz licenses was September 1, 2022. The start date for the new 900, 1,800 and 2,100 MHz licenses is January 1, 2023. The existing licenses for this spectrum were extended until December 31, 2022, allowing operators to implement the new spectrum positions following the outcomes of the auctions.
On July 20, 2022, the supplemental auction to allocate 90 MHz of spectrum in the 5G 1,400 MHz frequency band for a 20-year term ended. Orange obtained 30 MHz for a price of 70 million euros. This license took effect in July 2023.
BIPT approved the reorganization of the spectrum for Orange on the 905 MHz-915 MHz/950 MHz-960 MHz bands and for Proximus on the 895 MHz-905 MHz/940 MHz-950 MHz bands, as of November 21, 2022. During the transition period, the quantity of spectrum used by Orange and Proximus on each base station could not exceed 2x11.6 MHz and 2x12.5 MHz respectively. This reorganization freed the 885 MHz-890 MHz/930 MHz-935 MHz band for use by the new entrant Citymesh Mobile. Reserving some spectrum for a new entrant has led to the entry of new stakeholders: Citymesh formed an alliance with DIGI, obtained the spectrum reserved for a new entrant (2x5 MHz in 700, 2x5 MHz in 900, 2x15 MHz in 1,800 MHz and 2x5 MHz in 2,100 MHz), as well as 50 MHz in the 3.6 GHz band. In turn, the company NRB obtained 20 MHz of spectrum in the 3.6 GHz band.
On September 26, 2023, BIPT approved a spectrum lease between Network Research Belgium and e-BO (20 MHz of spectrum in the 3.6 GHz band in 12 urban areas). Since e-BO has no spectrum, BIPT does not consider this a spectrum sharing agreement, or that there are any competitive constraints given their market positions.
On September 1, 2023, BIPT relaunched a consultation to assess the existence of demand for the 26 GHz band in the Belgian market. During the previous consultation in April 2019, market participants had not expressed an interest in using this band to offer future 5G services. The new consultation ended on November 4, 2023.
Infrastructure sharing
Mobile
On November 22, 2019, Orange Belgium and Proximus signed a mobile-access network sharing agreement providing for the creation of a 50/50 joint venture co-owned by each party for the planning, roll-out and management of their mobile networks. This agreement covers 2G, 3G, 4G and 5G mobile technologies at the national level. The operators share active and passive infrastructure but not their spectrum. This agreement optimizes the network, decreases energy consumption and reduces roll-out costs. It accelerates the roll-out of 5G in Belgium, but was challenged on November 19, 2019 by Telenet before the Belgian Competition Authority (BCA). Finally, on December 23, 2022, the BCA rejected Telenet’s request on the grounds that the agreement between Orange and Proximus does not have a negative effect on competition.
Fixed
On January 30, 2023, Orange Belgium and Telenet signed two commercial wholesale agreements for fixed services. Their entry into force was subject to the completion of the transaction relating to the acquisition of 75% minus one share of VOO by Orange Belgium. The agreements provide access to the other party’s fixed networks for a period of 15 years and cover both current hybrid fiber-coaxial technologies and future fiber-to-the-home technologies in both network areas. In addition, Orange Belgium provides Telenet with wholesale access to the hybrid fiber-coaxial network of VOO and Brutélé and its future fiber-to-the-home network in the Wallonia and Brussels-Capital regions. Telenet has thus become a wholesale customer, which increases network penetration and the return on modernization investments.
Cable wholesale broadband markets
As part of the review of the wholesale cable broadband markets launched in July 2017 by the Conference of Electronic Communications Regulators (CRC) [32], the new Decision was published by the CRC on June 29, 2018. Various reference offer Decisions have been made by BIPT or the CRC concerning regulated access to cable networks and regulated access to the Proximus fiber network.
Regarding regulated access to cable networks:
− the Decision adopted on May 26, 2020 defined the monthly rates for wholesale access to cable operators’ networks;
− the June 24, 2021 Decision defined the one-time charges and the monthly rental charge "SLA Pro Repair";
− the March 25, 2021 Decisions concerning the approval of the reference offers of Telenet, Brutélé and Nethys/Brutélé for access to the TV offer and for access to the broadband offer, define the technical and operational framework of regulated wholesale access.
Regarding the reference offer "Bitstream Fiber GPON" for regulated access to the Proximus fiber network, the Decision of April 28, 2020 concerns the obligation imposed on Proximus regarding the compensation system for the "Basic SLA" and the adjustment of the parameters of the "Basic SLA Repair," and the Decision of March 9, 2021 on monthly rates.
Other products or services that are the subject of ongoing consultations include wholesale fiber prices, which are based on "cost plus," and one-time rates such as activation and installation rates for fiber and cable.
Moreover, the CRC launched the new review of the broadband and broadcasting markets on April 1, 2021. This work will be linked in particular with the procedure under way for Orange Belgium to acquire the operator VOO, which operates in Wallonia and the Brussels region, and with the Telnet and Fluvius cooperation procedure in the north of the country. Furthermore, within this framework, BIPT has launched a project with a view to a future symmetrical fiber regulation.
Following the acquisition of VOO by Orange (June 2, 2023), BIPT is preparing a new market study to reflect the new competitive landscape in the market. The first draft decision is expected in 2024.
On October 10, 2023, BIPT published a position statement on co-investment in fiber optic. BIPT confirms that the parallel roll-out of two FTTH networks has a significant impact on the return on investment, especially in less densely populated areas. BIPT is therefore open to FTTH co-investment initiatives, provided they meet the following characteristics:
− are open to third parties (in terms of equipment or wholesale offers);
− comply with the principle of non-discrimination;
− allow for effective competition (including on prices) between operators;
− guarantee rapid national coverage.
1.7.5.2 Romania
Spectrum
• Summary of spectrum allocated to Orange and expiration year
700 MHz |
800 MHz |
900 MHz |
1500 MHz |
1,800 MHz |
2.1 GHz |
2.6 GHz |
3.4 -3.8 GHz |
10 MHz duplex (2048) |
10 MHz duplex (2029) |
10 MHz duplex (2029) |
40 MHz (2048) |
20 MHz duplex (2029) |
15 MHz duplex +5 MHz (2031) |
20 MHz duplex (2029) |
25 MHz duplex 10 MHz duplex +45 MHz (2025) +160 MHz (2029) |
Internal source.
Orange won additional spectrum on August 14, 2018, at a private auction organized by 2K Telecom for the allocation until 2025 of 2x10 MHz blocks in the 3.5 GHz band for 3.35 million euros.
On September 19, 2022, Ancom launched the spectrum allocation process for 5G, which covers 555 MHz in the 700 MHz, 1,500 MHz, 2,600 MHz and 3,400-3,800 MHz bands.
On November 15, 2022, Ancom allocated Orange Romania two blocks of 2x5 MHz in the 700 MHz band, all eight blocks of 5 MHz in the 1,500 MHz band, as well as 16 blocks of 10 MHz in the 3,400-3,800 MHz band, for a price of 264.6 million euros. In the 700 MHz and 1,500 MHz bands, licenses are valid for 25 years from January 1, 2023, and in the 3,400-3,800 MHz band, for 22 years from January 1, 2026. In the 2,600 MHz band, licenses are valid for the period from January 1, 2023 to April 5, 2029. The operator must cover with broadband services at least 70% of the country’s population, most urban areas, highways, international airports and modernized railways, as well as 240 localities identified as not covered or poorly covered by mobile communication services.
Wholesale broadband markets
In the context of its third round of analysis of the 3a and 3b markets, on October 19, 2020, Ancom confirmed that the retail broadband market is effectively competitive, and that, as a consequence, no obligation should be imposed on the two wholesale markets. The European Commission approved the conclusions, while suggesting that the market be monitored. On July 26, 2022, Ancom launched the public consultation on the high-quality access market (market 4/1014 - market 2/2020). The consultation proposes to extend the deregulation of this market. Ancom has included the review of market 3a/2014 - now market 1/2020 - in its 2023 work program. Data collection began in late 2023 and the final decision is expected in third quarter 2024.
Call termination markets
On September 25, 2023, Ancom launched a consultation on the withdrawal of regulatory obligations for voice call termination services in fixed and mobile networks. At the end of this consultation, which ended on October 23, 2023, the regulator concluded that the market was sufficiently competitive and that prices fell under a delegated act on single European rates. On January 30, 2024, Ancom submitted its draft decision to the European Commission, which accepted it on February 22, 2024.
1.7.5.3 Slovakia
Spectrum
• Summary of spectrum allocated to Orange and expiration year
700 MHz |
800 MHz |
900 MHz |
1,800 MHz |
2.1 GHz |
2.6 GHz |
3.4 -3.8 GHz |
10 MHz duplex (2040) |
10 MHz duplex (2028) |
10 MHz duplex (2025) |
15 MHz duplex (2025) +5 MHz duplex (2026) |
20 MHz duplex +5 MHz (2026) |
30 MHz duplex (2028) |
40 MHz duplex (2025) +100 MHz (2045) |
Internal source.
1,800 MHz band
Between February and June 2022, all mobile telephony operators in Slovakia completed a reorganization of the 1,800 MHz spectrum band in order to obtain a continuous spectrum block and improve spectrum efficiency. This is the result of commercial agreements between the parties, backed by the regulator. For spectrum re-arrangement, the country has been divided into four regions. Each operator now has 2x20 MHz of spectrum in three regions of the country and 2x15 MHz in the fourth region.
900-2,100 MHz band
The regulator is preparing the auction of the 900-2,100 MHz spectrum band. It held public consultations between August 21, 2023 and September 21, 2023 to canvass the views of candidates on the regulatory conditions to be applied and the incentives to be offered to new entrants. The auction will take place in 2024 and successful candidates will be able to use the spectrum bands from September 8, 2026. The licenses will be valid until December 31, 2045.
The auction format is SMRA-Clock Hybrid. Participants will bid for an abstract block of spectrum.
In the 900 MHz band, the regulator is offering:
− 4 blocks of 2x5 MHz at a starting price of 16 million euros per block; and
− 3 blocks of 2x5 MHz at a starting price of 12 million euros per block.
In the 2,100 MHz band, there will be 12 blocks of 2x5 MHz at a starting price of 2.4 million euros.
3.4-3.6 GHz band
In August 2019, Orange acquired a total of 40 MHz from Slovanet in two 20 MHz coupled-spectrum blocks (3,470 MHz-3,490 MHz/3,570 MHz-3,590 MHz), with licenses valid until 2025.
5G
On November 23, 2020, the Slovak regulator (RU) announced the results of the auction for the 5G spectrum in the 700 MHz and 900 MHz bands.
A total of 82.4 MHz was offered at auction, consisting of 2x30 MHz in the 700 MHz band, 2x4.2 MHz in the 900 MHz band, and 2x9 MHz in the 1,800 MHz band. Licenses in the 700 MHz band are valid for 20 years, until December 31, 2040. Licenses in the 900 MHz and 1,800 MHz band are valid until December 31, 2025. In this context, Orange acquired 2x10 MHz in the 700 MHz frequency band for 33.6 million euros.
In the 3.4-3.8 GHz band, on March 1, 2022, the RU launched a tender for licenses for a period of use between 2025 and 2045. On May 6, 2022, the RU published the outcomes of the auction: Orange SK obtained 100 MHz for a price of 16 million euros. The licenses are valid from September 1, 2025 to December 31, 2045.
Wholesale broadband and very high-speed fixed broadband markets
The Slovakian regulator completed its third round of analysis of the 3a, 3b and 4/2014 markets and published its Decisions on markets 3a and 3b on January 19, 2018, and on market 4 on November 7, 2016. The regulator eased regulations:
− in market 3a, by excluding unbundling of the local sub-loop, while maintaining unbundling in the copper local loop, and by limiting the regulatory obligations of NGA offers to the economic replicability test and to a technical equivalence of inputs;
− in market 3b, by imposing a replicability test of 2P services and multicast IPTV wholesale access, instead of regulated prices;
− in market 4, by eliminating the sector-based regulatory obligations, because of the competitive nature of the market.
The RU published rate caps for access to fixed physical infrastructure (civil engineering) on October 17, 2018. The maximum monthly fees are as follows: access to ducts (0.257 euros/month/meter), HDPE tube (0.128 euros/month/meter) and micro-tube (0.116 euros/month/meter). This is a significant decrease in the access rates for the infrastructure.
The regulator intends to start the market revision this year however, the exact timing remains unknown.
1.7.6 Other non-EU countries where the Orange group operates
Moldova
Spectrum
• Summary of spectrum allocated to Orange Moldova and expiration year
800 MHz |
900 MHz |
900 MHz (e-GSM) |
1,800 MHz |
2.1 GHz |
2,600 MHz |
(2029) |
(2029) |
(2029) |
(2029) |
(2023) |
(2027) |
Internal source.
2,100 MHz: on December 8, 2023, ANRCETI extended the current mobile licenses in the 2,100 MHz band for Orange Moldova (1,940-1,960/2,130-2,150 MHz in FDD mode) and for two other mobile operators: Moldtelecom and Moldcell. Each operator will get 2x20 MHz in FDD mode, instead of 2x14.8 MHz in FDD mode and 1x5 MHz in TDD mode. The licenses are valid for six years from December 9, 2023, the aim being to synchronize the expiration dates of the other spectrums held by the operators (800, 900, 1,800).
The 2,100 MHz spectrum licenses were reallocated at the reserve price. Following the extension of the standard license term, the reserve price initially set for a 15-year term now applies to a 25-year term. Orange Moldova will therefore have to pay around 1.5 million euros for a license in two equal installments by March 31, 2024 and May 31, 2024. The terms of the license require operators to cover almost all national highways and expressways with a download speed of at least 2 Mbps with a 95% probability by October 2029. These obligations are divided into three parts: the majority by 2026, and the remainder by 2028 and October 2029. In addition, operators will need to provide an average download speed of 50 Mbps across their network by 2026. They may use any technology and spectrum for this purpose.
Renewal of licenses in the MEA region
The following table shows the type of licenses held by Orange and their expiration dates at December 31, 2023 in each country in which it operates in Africa & Middle East:
Expiration of current license |
Type of license | |
Botswana |
December 2036 |
5G spectrum |
Botswana |
December 2036 |
4G spectrum |
Botswana |
January 2036 |
4G TDD spectrum |
Botswana |
September 2033 |
2G - 3G spectrum and network |
Botswana |
September 2033 |
Services and apps |
Botswana (1) |
August 2028 |
4G spectrum |
Botswana (2) |
August 2025 |
4G spectrum |
Burkina Faso (3) |
May 2035 |
Fixed, mobile 2G-3G-4G |
Cameroon |
January 2030 |
2G-3G-4G |
Côte d’Ivoire (4) |
April 2032 |
Global (2G-3G-4G) |
Egypt |
October 2031 |
2G-3G-4G, virtual fixed license |
Egypt |
July 2026 |
Fixed |
Egypt |
April 2025 |
Internet |
Guinea-Bissau |
April 2025 |
3G |
Guinea-Bissau |
May 2026 |
4G |
Guinea-Bissau |
January 2027 |
2G |
Guinea |
March 2029 |
2G-3G-4G |
Jordan |
May 2039* |
2G (900) |
Jordan |
June 2041* |
3G (2,100 MHz) |
Jordan |
September 2040* |
4G |
Jordan |
September 2043* |
4G (2,600 MHz) |
Jordan |
January 2048* |
5G (3,500 MHz) |
Jordan |
May 2024 |
Fixed |
Jordan |
December 2023 |
Internet |
Liberia |
July 2030 |
Global (2G-3G-4G) |
Madagascar |
December 2038 |
Global (Fixed_mobile 2G-3G-4G) |
Mali |
July 2032 |
Global (2G-3G-4G) |
Morocco |
August 2024 |
2G |
Morocco |
December 2031 |
3G |
Morocco |
April 2035 |
4G |
Morocco |
April 2036 |
Fixed |
Mauritius |
November 2026 |
2G-3G-4G |
Mauritius |
November 2026 |
Fixed |
Central African Republic |
May 2027 |
Global (2G-3G) |
Democratic Republic of the Congo |
October 2031 |
2G-3G |
Democratic Republic of the Congo |
May 2038 |
4G |
Democratic Republic of the Congo |
September 2040 |
Fixed Internet, TDD spectrum |
Democratic Republic of the Congo |
August 2041 |
Fixed FTTX |
Democratic Republic of the Congo |
August 2041 |
Mainland France fiber |
Senegal |
August 2034 |
Global (2G-3G-4G) |
Senegal |
November 2038 |
5G |
Sierra Leone |
July 2031 |
2G-3G |
Sierra Leone |
March 2034 |
4G |
Tunisia |
July 2024 |
Global (2G-3G) |
Tunisia |
March 2031 |
4G |
Source: data from national regulators.
(1) Spectrum allocated in the 2,500-2,600 MHz band.
(2) Spectrum allocated in the 1,800 MHz band.
(3) To replace the two previous licenses, with an effective date of May 2020.
(4) Global: refers to the type of license that allows an operator to offer both fixed and mobile services through all of the available technologies (depending on the country, the Global license does not include 4G technology).
* The agreement signed in August 2022 guarantees a 10-year extension of the license term.
3. Financial performance
3.1 Review of the Group’s financial position and results
This section contains forward-looking statements about Orange. These forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from the results anticipated in the forward-looking statements. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
The following comments are based on the Consolidated Financial Statements prepared in accordance with IFRS (International Financial Reporting Standards, see Note 2 to the Consolidated Financial Statements).
Data on a comparable basis, [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED], economic CAPEX (referred to as "eCAPEX" or "economic CAPEX"), [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED], net financial debt, [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] are financial indicators not defined by IFRS. For further information on the calculation of these indicators and the reasons why the Orange group uses them and considers them useful for readers, see Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Data on a historical basis (see Section 7.2.1 Financial glossary) relates to data for prior periods as reported in the Consolidated Financial Statements for the current period. The transition from data on a historical basis to data on a comparable basis for the 2022 fiscal year is set out in Section 3.1.5.1 Data on a comparable basis.
The segment information (see Note 1 to the Consolidated Financial Statements) that is presented in the following sections is understood to be, unless stated otherwise, before eliminations for transactions with other segments.
As part of the Lead the Future strategic plan, presented in February 2023, the Group announced its intention to transform its B2B telecommunication operator model (in order to adapt to the changing B2B market) and strengthen its position in cybersecurity. In line with this announcement, the Enterprise business segment is changing its name to Orange Business (see Section 3.1.1.3 Significant events and Note 1.1 to the Consolidated Financial Statements).
Unless stated otherwise, data in the tables are presented in millions of euros, without a decimal point. This presentation may lead to non material differences in the totals and sub-totals in the tables in certain cases. Furthermore, the changes presented are calculated on the basis of data in thousands of euros.
3.1.1 Overview
3.1.1.1 Financial data and workforce information
Group operating data
(at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis (1) |
Change (%) on a historical basis |
Revenues (2) |
44,122 |
43,332 |
43,471 |
1.8% |
1.5% |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] | |||||
Operating income |
4,969 |
4,661 |
4,801 |
6.6% |
3.5% |
Telecom activities |
5,274 |
4,860 |
5,000 |
8.5% |
5.5% |
Mobile Financial Services |
(306) |
(200) |
(200) |
(53.1)% |
(53.1)% |
eCAPEX (1) |
6,815 |
7,303 |
7,371 |
(6.7)% |
(7.5)% |
Telecom activities |
6,783 |
7,267 |
7,335 |
(6.7)% |
(7.5)% |
eCAPEX/Revenue from telecom activities |
15.4% |
16.8% |
16.9% |
(1.4 pt) |
(1.5 pt) |
Mobile Financial Services |
33 |
35 |
35 |
(8.3)% |
(8.3)% |
Investments in property, plant and equipment and intangible assets (IFRS Measure) |
8,062 |
8,812 |
9,007 |
(8.5)% |
(10.5)% |
Telecom activities |
8,030 |
8,776 |
8,971 |
(8.5)% |
(10.5)% |
Investments in property, plant and equipment and intangible assets/Revenue from telecom activities |
18.2% |
20.3% |
20.6% |
(2.1 pt) |
(2.4 pt) |
Mobile Financial Services |
33 |
35 |
35 |
(8.3)% |
(8.3)% |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] | |||||
Average number of employees (full-time equivalents) (3) |
127,109 |
131,107 |
130,307 |
(3.0)% |
(2.5)% |
Number of employees (active employees at end of period) (3) |
137,094 |
138,109 |
136,430 |
(0.7)% |
0.5% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Revenue from telecom activities. The net banking income (NBI) of Mobile Financial Services is recognized in other operating income (see Note 4.2 to the Consolidated Financial Statements).
(3) See Section 7.2.1 Financial glossary.
Group net income
(at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
Operating income |
4,969 |
4,801 |
Finance costs, net |
(1,206) |
(920) |
Income taxes |
(871) |
(1,265) |
Consolidated net income |
2,892 |
2,617 |
Net income attributable to owners of the parent company |
2,440 |
2,146 |
Net income attributable to non-controlling interests |
451 |
471 |
Key indicators of telecom activities
(at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] | ||
Net financial debt (1) (3) |
27,002 |
25,298 |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
(3) See Note 13.3 to the Consolidated Financial Statements.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.1.2 Summary of results for the fiscal year 2023
In an environment still marked by the effects of inflation, the Group achieved a robust 2023 fiscal year, meeting all its 2023 targets under the Lead the Future strategic plan (see Section 1.2.3 The Orange group strategy).
Revenues totaled 44,122 million euros in 2023, up 1.5% on a historical basis and 1.8% on a comparable basis with 2022. This was largely due to the performance of retail services (B2C+B2B, see Section 7.2.1 Financial glossary) and equipment sales. On a comparable basis, the Africa & Middle East countries were the main contributor to growth, with revenues rising by 729 million euros (i.e. 11.4%), followed by the European countries, which grew by 248 million euros (i.e. 2.2%). Revenues in France declined by 248 million euros (down 1.4%) on a comparable basis, mainly due to lower revenues from wholesale services and, to a lesser degree, conventional telephony services (narrowband). Excluding fixed-only narrowband services, other retail services (B2C+B2B) rose by 3.0%, mainly driven by growth in convergent services. Orange Business and Totem were flat overall compared with 2022 (respective growth of 0.2% and 0.3% on a comparable basis).
Commercial activity posted good results in 2023, mainly due to fiber optic. The convergent customer base had 11.9 million customers across the Group, up 0.7% year on year on a comparable basis. Mobile services totaled 254 million accesses, of which 103.9 million were contracts (up by 4.8% and 10.1% year on year, respectively, on a comparable basis). Fixed services totaled 44.5 million accesses, including 16.5 million very high-speed broadband accesses, are still growing strongly (up 11.9% year on year on a comparable basis). In line with the downward trend in conventional fixed telephony, fixed narrowband access continued its structural decline, falling by 14.4% year on year.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Operating income stood at 4,969 million euros in 2023, up 3.5% on a historical basis and 6.6% on a comparable basis versus 2022. This increase mainly reflected the counter-effect of the recognition in 2022 of goodwill impairment in Romania [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. These positive changes were partially offset by increased restructuring costs related to Orange Business and Orange Bank (see Section 3.1.1.3 Significant events), the increase in depreciation and amortization of fixed assets (mainly in France) and the increase in charges related to French part-time for seniors plans, due to the effect of pension reform enacted in France in April 2023 (see Section 3.1.1.3 Significant events).
Consolidated net income totaled 2,892 million euros in 2023, an increase of 275 million euros compared with 2022. This increase resulted from both a decrease in income tax and an increase in operating income, partially offset by a decline in finance costs, net.
Economic CAPEX stood at 6,815 million euros in 2023, down 7.5% on a historical basis and 6.7% on a comparable basis versus 2022. With a decline of 487 million euros on a comparable basis, economic CAPEX was sharply lower in 2023, and now represents 15.4% of revenues [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. On a comparable basis, the main contributor to this decline was France (down 10.2%, i.e. 344 million euros), due to the maturing of the fiber optic roll-out, and Spain (down 12.5%, i.e. 107 million euros). At December 31, 2023, Orange had 71.7 million households connectable to FTTH worldwide (up 10.4% year on year on a comparable basis) and an FTTH access base of 15.4 million accesses (up 12.5% year on year on a comparable basis).
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Net financial debt totaled 27,002 million euros at December 31, 2023, an increase of 1,704 million euros compared with December 31, 2022, mainly reflecting the takeover of VOO by Orange Belgium (see Section 3.1.1.3 Significant events).
Value creation, a pillar of the Lead the Future strategic plan, is demonstrated by the following three indicators compared with 2022:
− [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
− and the earnings per share attributable to owners of the parent company of 0.85 euros was up by more than 16% (see Note 15.7 to the Consolidated Financial Statements).
With regard to the dividend, see Section 6.3 Dividend distribution policy.
3.1.1.3 Significant events
Lead the Future, Orange’s new strategic plan
In February 2023, Orange presented Lead the Future, its new strategic plan which aims to generate value from the recognized excellence of its core business and to grow sustainably in Europe, Africa and the Middle East. Orange also confirms the repositioning of its Enterprise services activities in next generation connectivity solutions and the acceleration in cybersecurity (see Orange Business transformation plan below). Accompanying the plan is an ambitious new company model placing, at its heart, social and environmental responsibility and operational excellence.
For more information on the strategic plan Lead the Future, see Section 1.2.3 The Orange group strategy.
Inflationary environment
In 2023, widespread inflation continued to weigh on the Group’s operating margins, particularly through higher energy costs, higher wages and employee benefit expenses and higher costs of other products and services (in particular through indexation effects: rent, operating taxes and levies payable, services, etc.). In this macroeconomic environment (see Note 2.5.4 to the Consolidated Financial Statements), Orange continued its efforts to achieve its financial objectives. The Group has several key strengths in this inflationary environment.
Orange has opted for a value-based strategy. Due to its high level of customer satisfaction and the quality of its network, the Group has some capacity to raise prices. In France, price increases took place during the first half-year of 2023, representing an additional one or two euros per contract on B2C fixed and mobile contracts under the Orange and Sosh brands. In addition to France, all European countries began introducing rate increases in 2022, which continued in 2023. In terms of revenue, the effect of these price increases is gradual. In 2023, the price increases partially offset the impact of inflation on the Group’s costs.
In terms of energy, Orange has significant coverage of its electricity needs (the Group’s main energy component) at prices set through Power Purchase Agreements (PPAs - see Note 14.6 to the Consolidated Financial Statements) and purchases already made on the markets. In addition to the measures already taken, Orange is also continuing the work undertaken across its scope to optimize its energy consumption. Energy purchases, the main component of which is electricity, amounted to just over one billion euros in 2023, up 28.0% compared with 2022 on a comparable basis (see Note 5.1 to the Consolidated Financial Statements).
With regard to labor expenses, only some Group entities are required to adjust all salaries to inflation, as is the case in Belgium and Luxembourg. In France, Orange SA implemented an overall salary budget increase of 4.8% in 2023, maintaining a particular focus on the lowest compensation levels. Orange is thus strengthening its action in favor of the purchasing power of employees, while preserving the Group’s financial balances.
In addition, BuyIn, the Orange and Deutsche Telekom procurement joint venture, provides some negotiating power to the Group to secure supplies and limit price increases. Orange also relies on its operational efficiency plan to offset the inflationary effects that the Group is experiencing (see Progress of the operational efficiency plan below).
The Group’s lead in terms of network roll-out, and particularly of fiber optic, also allows Orange to limit its exposure to the increase in associated costs. In addition, the choice made by Orange to retain control of its infrastructure, in particular via Totem, its European TowerCo, makes it possible to partially limit the Group’s exposure to the effects of indexing rent for this asset class to inflation.
Lastly, on the financial front, the Group’s robust balance sheet, its diversified financing and interest rate risk management policy, as well as Orange’s creditworthiness, help limit the Group’s exposure to the effect of interest rate increases.
Progress of the operational efficiency plan
The Group continues to closely manage its costs. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] To this end, the Group relies on initiatives taken within the new business model detailed by management and related to the new Lead the Future strategic plan (see Section 1.2.3 The Orange group strategy).
Based on the defined cost base at the end of 2022, the Group achieved net savings of around 300 million euros in fiscal year 2023.
Effect of French pension reform
In France, the pension reform law, gradually raising the legal retirement age to 64, was enacted on April 14, 2023. The effects of this reform have been recognized in the consolidated income statement as a plan amendment (see Note 6.2 to the Consolidated Financial Statements), via:
− an additional provision of 241 million euros recognized for the French part-time for seniors plans signed in 2018 and 2021. These agreements provided for the extension of the measures in the event of pension reform for the employees concerned;
− and a provision reversal of 22 million euros on capital-based or annuity-based defined-benefit plans.
Orange Business transformation plan
As part of the Lead the Future strategic plan presented in February 2023 (see Section 1.2.3 The Orange group strategy), the Group announced that it wanted to transform its B2B telecommunication operator model in order to adapt to the changing B2B market. Orange Business aims to become the benchmark European network and digital integrator. This ambition is rooted in its recognized expertise in secure and trusted connectivity solutions which provide the foundation for companies’ digital transformation. It will also rest on a re-focusing of the range of services it offers, the evolution of its company model and a far-reaching program of cost optimization.
In line with this desire to change, the Enterprise business segment is changing its name to Orange Business (see Note 1.1 to the Consolidated Financial Statements).
In France, Orange Business has also presented the operational implementation of its strategic priorities within the framework of the strategic plan, Lead the Future. This plan, which carries a strong ambition to transform and simplify Orange Business, whose market is undergoing profound changes, includes the discontinuation of around 150 products and services and the elimination of around 650 jobs in France, on a voluntary basis.
Restructuring costs were recognized in the consolidated income statement for a total of 215 million euros for the year ended December 31, 2023 for the Orange Business transformation plan in France and abroad (see Significant events 2023 in the Consolidated Financial Statements and Note 5.3 to the Consolidated Financial Statements).
Changes in the asset portfolio
Acquisition of approximately 75% of VOO by Orange Belgium
Following the agreements signed in December 2021, in June 2023 Orange Belgium finalized the acquisition from Nethys of 75% of the capital minus one share of telecommunication operator VOO. This acquisition represents an investment of 1.373 billion euros net of cash acquired. At the end of the transaction, Nethys retains a minority interest in VOO and now has protective rights to ensure the completion of the industrial and social project. The Group has granted Nethys a put option on its remaining stake in VOO, exercisable for three years. As of the acquisition date, a current financial liability of 279 million euros was recognized in this respect (see Notes 3.2 and 13.3 to the Consolidated Financial Statements).
In addition, in late 2023, Nethys announced its intention to convert its stake into Orange Belgium shares. When this transaction is complete (see Notes 3.2 to the Consolidated Financial Statements), Nethys could obtain an 11% stake in Orange Belgium.
The acquisition of VOO marks an important step in Orange’s convergence ambitions in Belgium, and is expected to generate significant synergies, mainly related to the transfer of VOO’s Mobile Virtual Network Operator (MVNO) business to the Orange Belgium network.
Acquisition of NEHS Digital and Xperis by Enovacom (an Orange Business healthcare subsidiary)
In September 2023, Enovacom, a healthcare subsidiary of Orange Business, announced the acquisition of NEHS Digital and Xperis.
NEHS Digital is a publisher and distributor of healthcare solutions and a service operator, specializing in medical imaging, and Xperis is a specialist in healthcare data interoperability. Together, these two entities cover five key areas of expertise: medical imaging, telemedicine, the organization of medical interpretation services, the production and coordination of care services, and the security and interoperability of information systems. These acquisitions strengthen the strategy of Orange Business in the development of solutions for healthcare professionals. With the integration of these companies, Enovacom’s teams now benefit from the expertise of more than 600 e-healthcare professionals.
Acquisition of Expertime by Orange Business
In December 2023, Orange Business announced the acquisition of Expertime, a services company specializing in Microsoft solutions and recognized for its expertise in apps, collaborative solutions and data. Its 165 employees will strengthen the Microsoft expertise of the Orange Business teams in the areas of Public Cloud, Artificial Intelligence and Data. This acquisition, in line with the Lead the Future strategic plan, furthers the ambition of Orange Business to accelerate its growth in digital services in France and Europe and to become a certified network and digital integrator on the best technologies on the market to support companies in their digital transformation.
Merger of Orange Romania Communications into Orange Romania
In September 2021, Orange acquired a majority stake of 54% in fixed operator Telekom Romania Communications (TKR, renamed Orange Romania Communications), with the Romanian government retaining the remaining 46% of the capital.
In December 2023, an agreement was signed with the Romanian state defining the main principles of the merger of Orange Romania Communications into Orange Romania and the entry of the Romanian government into the capital of Orange Romania. The signing of this agreement has no impact on the Consolidated Financial Statements at December 31, 2023 (see Note 3.2 to the Consolidated Financial Statements).
The merger, which is expected to take place in the first half of 2024, will enable Orange to implement its convergent operator strategy in Romania.
Disposal of all OCS and Orange Studio securities to the Canal+ Group
In line with its announcement of January 2023, in January 2024 Orange finalized the disposal to the Canal+ Group of all of its securities in the OCS pay-TV package and in Orange Studio, the film and TV co-production subsidiary. The leading distributor of OCS, Canal+ had been a shareholder of OCS since 2012, with a holding of 33.33%. Following the deal, the Canal+ Group becomes the sole shareholder of both companies.
Since their founding in 2007 and 2008 respectively, competition in the audiovisual sector, particularly for OCS, has continued to intensify with the emergence of powerful international platforms. Through this agreement with the Canal+ Group, historic partner of Orange and a recognized European player in the creation and distribution of content, the Group aims to sustain the long-term development of these two subsidiaries, while preserving jobs and the p-financing of content creation.
As part of this transaction, Orange has granted Canal+ standard and specific guarantees. In addition, the transaction, which was finalized at the end of January 2024, is expected to result in a loss of around 170 million euros in the Group’s Consolidated Financial Statements in the first half of 2024 (see Notes 3.2 and 19 to the Consolidated Financial Statements).
Discontinuation of Orange Bank activity and agreements with BNP Paribas
As part of a strategic review of its assets, Orange, after seeking a partner for its banking subsidiary, announced in late June 2023 that it was entering into exclusive negotiations with BNP Paribas to define a partnership for the referral of Orange Bank’s client portfolio in France, develop mobile terminal financing solutions, and discuss the terms of a potential resumption of Orange Bank’s activity in Spain.
At the end of these negotiations, Orange Bank announced in late February 2024 a partnership with BNP Paribas to offer a banking continuity solution for its clients in France and Spain. This partnership was formalized by the signing of several agreements:
− a referral agreement in France, through which Hello bank!, BNP Paribas’ mobile bank, offers an exclusive offer to Orange Bank’s clients in France (subject to eligibility conditions); and
− a commercial agreement to provide a continuity solution to Orange Bank’s clients in Spain (subject to eligibility conditions) through BNP Paribas Personal Finance’s Spanish subsidiary, Banco Cetelem.
In parallel, Orange and BNP Paribas Personal Finance are collaborating on the implementation of a new credit solution for mobile terminal financing.
Additionally, in 2023, Orange Bank initiated an information-consultation process with its employee representative bodies to cease its activities and negotiate a job safeguard plan concerning over 600 positions in France. As of December 31, 2023, this plan was still under negotiation. Therefore, a restructuring provision, corresponding to the best estimate at this date of the costs of this plan, was recognized for a total amount of 122 million euros as of December 31, 2023 (see notes 3.2 and 5.3 of the appendix to the Consolidated Financial Statements).
3.1.2 Analysis of the Group’s results and capital expenditure
3.1.2.1 Group revenue
3.1.2.1.1 Revenue
Group revenue by segment (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
France |
17,730 |
17,977 |
17,983 |
(1.4)% |
(1.4)% |
Europe |
11,574 |
11,327 |
10,962 |
2.2% |
5.6% |
Spain |
4,698 |
4,647 |
4,647 |
1.1% |
1.1% |
Other European countries |
6,889 |
6,693 |
6,329 |
2.9% |
8.9% |
Eliminations |
(12) |
(14) |
(14) |
(11.9)% |
(11.7)% |
Africa & Middle East |
7,152 |
6,423 |
6,918 |
11.4% |
3.4% |
Orange Business |
7,927 |
7,912 |
7,930 |
0.2% |
(0.0)% |
Totem |
686 |
685 |
685 |
0.3% |
0.3% |
International Carriers & Shared Services |
1,478 |
1,536 |
1,540 |
(3.7)% |
(4.0)% |
Eliminations |
(2,426) |
(2,527) |
(2,547) | ||
Group revenue (2) |
44,122 |
43,332 |
43,471 |
1.8% |
1.5% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Revenue from telecom activities (see Notes 1.2 and 4.1 to the Consolidated Financial Statements). The net banking income (NBI) of Mobile Financial Services is recognized in other operating income (see Note 4.2 to the Consolidated Financial Statements).
Group revenue by offer (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Retail services (B2C+B2B) (2) |
32,729 |
31,621 |
31,711 |
3.5% |
3.2% |
Convergent services |
8,153 |
7,825 |
7,687 |
4.2% |
6.1% |
Mobile-only services |
11,406 |
10,769 |
11,093 |
5.9% |
2.8% |
Fixed-only services |
9,029 |
9,204 |
9,120 |
(1.9)% |
(1.0)% |
IT & integration services |
4,141 |
3,823 |
3,811 |
8.3% |
8.7% |
Wholesale services |
6,830 |
7,305 |
7,356 |
(6.5)% |
(7.1)% |
Equipment sales |
3,503 |
3,265 |
3,254 |
7.3% |
7.6% |
Other revenues |
1,060 |
1,142 |
1,150 |
(7.2)% |
(7.8)% |
Group revenue (3) |
44,122 |
43,332 |
43,471 |
1.8% |
1.5% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) See Section 7.2.1 Financial glossary.
(3) Revenue from telecom activities (see Notes 1.2 and 4.1 to the Consolidated Financial Statements). The net banking income (NBI) of Mobile Financial Services is recognized in other operating income (see Note 4.2 to the Consolidated Financial Statements).
In 2023, Orange group revenues totaled 44,122 million euros, an increase of 1.5% on a historical basis and 1.8% on a comparable basis with 2022.
Change on a historical basis
On a historical basis, the 1.5% increase in Group revenues between 2022 and 2023, i.e. an increase of 652 million euros, includes:
− the negative effect of foreign exchange fluctuations, which amounted to 461 million euros, mainly due to changes in the Egyptian pound of 380 million euros, and to a lesser extent, in the US dollar of 43 million euros, against the euro;
− the favorable effect of changes in the scope of consolidation and other changes, which stand at 322 million euros and primarily include (i) the effect of the takeover of VOO by Orange Belgium on June 2, 2023 for 281 million euros (see Section 3.1.1.3 Significant events), and (ii) to a lesser extent, the effect of the acquisition of SCRT and Telsys by Orange Cyberdefense on November 8, 2022 for 32 million euros;
− and the organic change on a comparable basis, i.e. an increase in revenues of 790 million euros.
Change on a comparable basis
On a comparable basis, the increase of 790 million euros, i.e. 1.8%, in Group revenues between 2022 and 2023 is mainly attributable to:
− the increase of 637 million euros (i.e. 5.9%), in Mobile-only services related to (i) strong growth in mobile services (prepaid and contracts) in nearly all Africa & Middle East countries, driven largely by growth in data services and (ii) to a lesser extent, the increase in mobile-only contracts in the European countries (linked in particular to the value-based strategy, see Section 3.1.1.3 Significant events) and for Orange Business;
− the increase of 319 million euros (i.e. 8.3%) in IT & Integration Services, primarily for Orange Business (driven by cybersecurity, integration and digital & data services), and, to a lesser degree, in the European countries (Poland, Spain and Romania);
− the increase of 329 million euros (i.e. 4.2%), in Convergent services, which grew in all European countries except Romania, in connection with the value-based strategy (see Section 3.1.1.3 Significant events), the penetration of fiber optic offers in access bases, and the increase in the number of convergent services customers;
− and the increase of 238 million euros (i.e. 7.3%), in Equipment sales, in all European countries, with marked growth in Spain, Poland and Belgium, due to upgrading to higher-value products, growth in equipment sales to businesses and the increased unit price of equipment in an inflationary environment.
These positive changes are partially offset by:
− the decrease of 474 million euros (i.e. 6.5%) in Wholesale services, mainly in France, and to a lesser degree in the European countries:
- in France, the decline in wholesale services was mainly due to (i) the decline in unbundling revenues on the copper network, (ii) the reduction in the construction of fiber optic networks (Public Initiative Networks or PINs), (iii) the decline in mobile and fixed interconnection (mainly due to the decrease in voice and message traffic and to regulatory cuts in call termination rates), (iv) the decrease in FTTH line co-financing received from other operators, (v) partially offset by the increase in FTTH lines leased to third-party carriers, and by the growth in visitor roaming revenues,
- in the European countries and for international wholesale services, the decrease in wholesale services was mainly due to (i) the decline in international transit for services to international wholesale services (structural decrease in the market and refocusing of services on higher value-added activities) and in Spain, and (ii) regulatory cuts in mobile and fixed call termination rates in Europe,
- at the Group level, these changes were partially offset (i) by the sale of rights of use for a submarine cable in the Caribbean and (ii) the increase in wholesale services in the Africa & Middle East countries, mainly due to the implementation of a national roaming agreement in Egypt;
− the decrease of 175 million euros (down 1.9%) in Fixed-only services, primarily due to:
- the decrease in the fixed-only services of Orange Business, due to (i) the decline in voice services, with the downward trend in conventional fixed telephony, and (ii) the decrease in data services, mainly owing to the general trend toward the transformation of data services technologies,
- the downward trend in fixed-only narrowband services (conventional telephony), mainly in France,
- partially offset by the growth of fixed-only broadband services in the Africa & Middle East countries (mainly due to the growth of fixed-only broadband access bases) and in France (in line with the value-based strategy, see Section 3.1.1.3 Significant events);
− and to a lesser extent, the decrease of 82 million euros (i.e. 7.2%), in Other revenues, mainly in France, primarily due to the decline in the construction of build-to-suit mobile sites.
The analysis of the change in revenues by business segment is detailed in Section 3.1.3 Review by business segment.
3.1.2.1.2 Number of accesses of telecom activities
Number of accesses of telecom activities (at December 31, in thousands, at the end of the period) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Convergent services | |||||
Number of convergent customers |
11,917 |
11,836 |
11,628 |
0.7% |
2.5% |
Mobile services | |||||
Number of mobile accesses (2) |
253,981 |
242,235 |
241,855 |
4.8% |
5.0% |
o/w: Convergent customers mobile accesses |
21,944 |
21,647 |
21,325 |
1.4% |
2.9% |
Mobile-only accesses |
232,037 |
220,588 |
220,530 |
5.2% |
5.2% |
o/w: Contract customers mobile accesses |
103,906 |
94,396 |
94,015 |
10.1% |
10.5% |
Prepaid customers mobile accesses |
150,076 |
147,840 |
147,840 |
1.5% |
1.5% |
Fixed services | |||||
Number of fixed accesses |
44,504 |
45,850 |
45,358 |
(2.9)% |
(1.9)% |
Fixed retail accesses |
30,802 |
31,397 |
30,904 |
(1.9)% |
(0.3)% |
o/w: Fixed broadband accesses |
25,175 |
24,824 |
24,332 |
1.4% |
3.5% |
o/w: Very high-speed fixed broadband accesses |
16,463 |
14,710 |
14,217 |
11.9% |
15.8% |
o/w: Convergent customers fixed accesses |
11,917 |
11,836 |
11,628 |
0.7% |
2.5% |
Fixed-only accesses |
13,258 |
12,988 |
12,704 |
2.1% |
4.4% |
Fixed narrowband accesses |
5,627 |
6,572 |
6,572 |
(14.4)% |
(14.4)% |
Fixed wholesale accesses |
13,702 |
14,453 |
14,453 |
(5.2)% |
(5.2)% |
Number of mobile and fixed accesses of telecom activities (2) |
298,485 |
288,085 |
287,212 |
3.6% |
3.9% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Excluding customers of Mobile Virtual Network Operators (MVNOs).
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.2.3 Group net income
(at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
Operating income |
4,969 |
4,801 |
Cost of gross financial debt excluding financed assets |
(1,073) |
(775) |
Interest on debts related to financed assets (1) |
(14) |
(3) |
Gains (losses) on assets contributing to net financial debt |
283 |
48 |
Foreign exchange gain (loss) |
(32) |
(97) |
Interest on lease liabilities (1) |
(258) |
(145) |
Other net financial expenses |
(112) |
52 |
Finance costs, net |
(1,206) |
(920) |
Income taxes |
(871) |
(1,265) |
Consolidated net income |
2,892 |
2,617 |
Net income attributable to owners of the parent company |
2,440 |
2,146 |
Net income attributable to non-controlling interests |
451 |
471 |
(1) Interest on debts related to financed assets and interest on lease liabilities are included in segment EBITDAaL. They are eliminated from segment operating income and included in finance costs, net in the Consolidated Financial Statements.
The consolidated net income of the Orange group totaled 2,892 million euros in 2023, compared with 2,617 million euros in 2022, i.e. an increase of 275 million euros. This change reflects (i) the decrease of 393 million euros in income tax and (ii) the increase of 168 million euros in operating income on a historical basis, (iii) partially offset by the deterioration of 286 million euros in finance costs, net.
The year-on-year deterioration of 286 million euros in finance costs, net (see Note 13.2 to the Consolidated Financial Statements) was essentially due to:
− the increase in the cost of gross financial debt excluding financed assets, mainly due to (i) higher interest charges on the variable-rate portion of debt and on short-term financing in a context of rising interest rates, (ii) the counter-effect, in 2022, of the change in fair value of derivatives set up in anticipation of debt issuances, and (iii) the change in the interest-rate effect of derivatives hedging the Polish zloty-denominated debt;
− the deterioration of other net financial expenses, mainly due to the increase in the discounting expense on employee benefits (see Notes 6.1 and 13.2 to the Consolidated Financial Statements);
− and the increase in interest on lease liabilities, mainly resulting from (i) the rise in interest rates affecting the discount rates applied to contracts and the effects of rent indexation in an inflationary environment (see Section 3.1.1.3 Significant events), and (ii) the development of the secondary market for co-financing and leased lines in France (see Note 9.1 to the Consolidated Financial Statements);
− partially offset by (i) the increase in gains (losses) on assets contributing to net financial debt, due to higher returns on investments as a result of rising interest rates, and (ii) to a lesser extent, the improvement in foreign exchange gains (losses).
The decrease of 393 million euros in income tax (see Note 10.2 to the Consolidated Financial Statements) between the two periods primarily stems from:
− the decrease in the income tax payable of the Orange SA tax consolidation group, mainly due to changes in the income of the entities in the tax consolidation group in France;
− and the recognition, in 2023, of deferred tax income of 190 million euros for Belgian subsidiaries (other than the Orange Belgium group) to reflect the favorable change in the business projections for the recoverability of deferred tax assets.
Net income attributable to non-controlling interests amounted to 451 million euros in 2023, compared with 471 million euros in 2022 (see Note 15.6 to the Consolidated Financial Statements). After taking into account net income attributable to non-controlling interests, net income attributable to owners of the parent company totaled 2,440 million euros in 2023, compared with 2,146 million euros in 2022, an increase of 294 million euros.
3.1.2.4 Group comprehensive income
The transition from Group consolidated net income to consolidated comprehensive income is described in the consolidated statement of comprehensive income.
3.1.2.5 Group capital expenditure
3.1.2.5.1 Capital expenditure
Group investments in property, plant and equipment and intangible assets (IFRS Measure)
Group investments in property, plant and equipment and intangible assets (2) (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] | |||||
Elimination of proceeds from sales of property, plant and equipment and intangible assets (3) |
292 |
345 |
347 |
(15.2)% |
(15.7)% |
Telecommunication licenses |
721 |
935 |
1,060 |
(22.8)% |
(31.9)% |
Financed assets (4) |
233 |
229 |
229 |
1.6% |
1.6% |
Group investments in property, plant and equipment and intangible assets (2) |
8,062 |
8,812 |
9,007 |
(8.5)% |
(10.5)% |
(1) [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
(2) See Notes 1.6 and 8 to the Consolidated Financial Statements.
(3) Elimination of proceeds from sales of property, plant and equipment and intangible assets included in economic CAPEX (eCAPEX).
(4) Financed assets include set-top boxes (STBs) in France, which are financed by an intermediary bank and meet the standard criterion for the definition of property, plant and equipment according to IAS 16 (see Note 8.5 to the Consolidated Financial Statements).
In 2023, Orange group investments in property, plant and equipment and intangible assets totaled 8,062 million euros, down 10.5% on a historical basis and 8.5% on a comparable basis with 2022.
Change on a historical basis
On a historical basis, the 10.5% decrease in Group investments in property, plant and equipment and intangible assets between 2022 and 2023, i.e. a decrease of 944 million euros, includes:
− the negative effect of foreign exchange fluctuations, which amounted to 220 million euros, mainly due to changes in the Egyptian pound against the euro of 201 million euros;
− the favorable impact of changes in the scope of consolidation and other changes amounting to 25 million euros;
− and the organic change on a comparable basis, i.e. a decrease in Group investments in property, plant and equipment and intangible assets of 750 million euros.
Change on a comparable basis
On a comparable basis, the decrease of 750 million euros in Group investments in property, plant and equipment and intangible assets between 2022 and 2023, i.e. a decrease of 8.5%, is mainly due to the combined effect of (i) the decrease in investments in property, plant and equipment and intangible assets excluding telecommunication licenses and (ii) the decrease in expenses relating to telecommunication licenses.
The Group’s financial investments (see Section 7.2.1 Financial glossary) are described in Section 3.1.4 Cash flow, equity and financial debt.
3.1.2.5.1.1 Economic CAPEX (Non-IFRS Measure)
In 2023, the Orange group’s economic CAPEX represented 6,815 million euros (comprising 6,783 million euros from telecom activities and 33 million euros from Mobile Financial Services), down 7.5% on a historical basis and 6.7% on a comparable basis. The ratio of economic CAPEX to revenue from telecom activities was 15.4% in 2023, a fall of 1.5 percentage points on a historical basis and 1.4 percentage points on a comparable basis with 2022.
Change on a historical basis
On a historical basis, the 7.5% decrease in Group economic CAPEX between 2022 and 2023, i.e. a decrease of 555 million euros, includes:
− the negative effect of foreign exchange fluctuations of 93 million euros, mainly due to changes in the Egyptian pound against the euro of 74 million euros;
− the positive impact of changes in the scope of consolidation and other changes for 25 million euros;
− and the organic change on a comparable basis, i.e. a decrease of 487 million euros in economic CAPEX.
Change on a comparable basis
On a comparable basis, the decrease of 487 million euros in the Group’s economic CAPEX between 2022 and 2023, a decline of 6.7%, is mainly attributable to:
− the decline in gross investment in very high-speed broadband fixed networks (FTTH), mainly in France, Spain and Poland, after the major roll-outs of recent years. At December 31, 2023, the Group had 71.7 million households connectable to FTTH worldwide (up 10.4% year on year on a comparable basis), including 37.4 million in France, 16.8 million in Spain, 13.4 million in other European countries and 4.1 million in Africa & Middle East countries. The total number of households connectable to all very high-speed broadband networks (FTTH and cabled networks) was 75.4 million at December 31, 2023;
− the decline in economic CAPEX relating to leased handsets, Liveboxes and equipment installed on customer premises in France, in connection with financed assets (also recognized in investments in property, plant and equipment and intangible assets);
− and the decline in investment in very high-speed broadband mobile networks (4G/5G) in Spain, following the major roll-outs in the country in previous years;
− partially offset by (i) increased investments in the networks of the Africa & Middle East countries, mainly in very high-speed broadband mobile networks (4G/5G), in order to support business growth (capacity investments) and changes in usage, (ii) the decrease in co-financing received from third-party operators in France, (iii) the decrease in disposals of fixed assets, mainly due to the counter-effect of the recognition, in 2022, of asset disposals in the Democratic Republic of the Congo (DRC) and Côte d’Ivoire, and (iv) the counter-effect of the recognition in 2022 of investments by Orange Marine in the construction of a new cable-laying ship, the Sophie Germain (see Section 1.3 Highlights).
Regarding some investments, particularly for the fiber optic roll-out, the Group’s investments benefit from co-financing received from third-party operators and subsidies that reduce economic CAPEX.
3.1.2.5.1.2 Telecommunication licenses
Capital expenditure relating to telecommunication licenses includes the acquisition and renewal of telecommunication licenses and the capitalization of associated spectrum fees (see Notes 8.4 and 16.1 to the Consolidated Financial Statements). Telecommunication licenses may, in some cases, give rise to annual fees recognized as operating taxes and levies payables in the Consolidated income statement (see Note 10.1 to the Consolidated Financial Statements).
In 2023, capital expenditure relating to telecommunication licenses totaled 721 million euros and mostly concerned (i) Belgium for 303 million euros (second tranche within the general framework of the acquisition of 5G licenses and renewal of the existing 2G/3G spectrum), (ii) Poland for 121 million euros (acquisition of 5G licenses), (iii) Egypt for 113 million euros (second tranche for the acquisition of 4G licenses), (iv) Senegal for 53 million euros and (v) Botswana for 38 million euros (see Note 8.4 to the Consolidated Financial Statements).
In 2022, on a historical basis, capital expenditure relating to telecommunication licenses totaled 1,060 million euros. This mostly concerned (i) Romania for 319 million euros (acquisition of 5G licenses), (ii) Egypt for 311 million euros (first tranche for the acquisition of 4G licenses), (iii) Belgium for 254 million euros (mainly within the general framework of the acquisition of 5G licenses and the renewal of the existing 2G/3G spectrum), (iv) Poland for 75 million euros and (v) Jordan for 67 million euros.
3.1.2.5.2 Investment commitments
Investment commitments are set out in Notes 16 and 17.3 to the Consolidated Financial Statements.
3.1.2.5.3 Investment projects
In line with the Lead the Future strategic plan (see Section 1.2.3 The Orange group strategy), Orange has confirmed the decrease in its investments in 2023, [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]. This decrease is the result, first of all, of the slowdown in investments in fiber optic, after several years of intensive roll-outs in Europe, including France. However, Orange is maintaining its investments in active and passive mobile networks (in particular through Totem, the Group’s European TowerCo) and for wholesale services, in order to strengthen its leading position in terms of network quality. Going forward, the Orange group will continue to invest, while systematically seeking to maximize value creation, while disposing of non-strategic assets.
The Group will focus on its core business in order to confirm its leadership, while optimizing and adding further value to its fixed networks (particularly FTTH) and mobile networks (particularly 5G). It will use its data in partnership with major Cloud and artificial intelligence (AI) players, while rolling out more efficient IT infrastructure, such as Data centers and next-generation supply chain information systems. The aim of this approach is to make the networks more efficient, thus contributing to a better financial performance. The establishment of "Network Integration Factories" will also accelerate the automation and virtualization of network management, while providing new services for customers.
For the fixed network, whether using own infrastructure or third-party networks via co-financing or optimized leasing, Orange has high ambitions when it comes to marketing its fiber optic offers. As for FTTH infrastructure, Orange will continue to invest directly, particularly in France, under the new agreement on the widespread roll-out of fiber optic by 2025 (see Section 1.3 Highlights and Note 16.1 to the Consolidated Financial Statements). Aware of the disparities in the roll-out between different urban centers in France, additional efforts will be deployed in areas with the least fiber coverage from 2024. In addition, Orange is offering to make connectable on demand all customers not eligible for fiber optic who so request, until the copper network is shut down (see Section 1.4.1 Operating activities - France). This change in the steering of roll-outs in medium-density areas ("AMII areas" - appel à manifestation d’intérêt d’investissement or "Call for Investment Intentions"), through connection on demand, complements the industrial-scale roll-out by geographical area. This initiative will help to achieve widespread fiber optic coverage in medium-density areas (AMII areas) by the end of 2025. Orange is also committed to continuing roll-outs in very densely populated areas ("ZTD" - Zones Très Denses). In 2024, the Group plans to carry out a test of roll-out on demand for its customers in two major cities within this perimeter. To continue the industrial effort in certain areas while controlling its investments, Orange will rely on its FiberCos, such as Orange Concessions, which brings together the FTTH connections of the Public Initiative Networks (PIN) in France.
On the mobile network, the Group will focus on continuing to roll out 5G, characterized by lower latency and the possibility of network slicing. Generally speaking, in order to optimize the roll-outs of its mobile networks, Orange will continue to develop network sharing agreements whenever this is relevant. In addition, Orange will accelerate the development of its passive mobile infrastructure in Europe via Totem, the Group’s European TowerCo. Lastly, as part of its modernization drive, Orange is committed to pursuing the transformation of its mobile networks, with plans for the gradual shutdown of 2G and 3G networks in all European countries by 2030.
In the Africa & Middle East region, Orange will maintain its investments in rolling out fixed network infrastructure (FTTH) and mobile network infrastructure (4G/5G) for high-growth markets. The aim of this approach is to strengthen its position as a benchmark digital partner. At the same time, Orange is committed to innovative ventures, such as Maxit, a super-app that brings together telecommunications, financial services and e-commerce.
In enterprise services, Orange Business will continue to expand into IT, Cloud, data, service integration and cybersecurity to become a value-generating service orchestrator. This shift in direction will be enabled by (i) accelerating the internal transformation of networks and modes of operation by geographic region, while maintaining the level of investment, (ii) continuing the migration of customer networks to software to meet the needs of companies concerned with making their networks more reliable and optimizing their connectivity costs, with, among other things, the development of SD-WAN (Software-Defined Wide Area Network) technology, and (iii) positioning itself as a trusted partner in cybersecurity.
To meet growing demand for international connectivity, the Group will continue to invest in submarine cable projects, including to meet its own capacity requirements. In the second half of 2023, Orange strengthened its position in the maintenance and laying of submarine cables, with the inauguration of the new cable-laying ship, the Sophie Germain, a state-of-the-art vessel designed to minimize its environmental impact (see Section 1.3 Highlights). Through its subsidiary, Orange Wholesale, the Group will also take on an advisory role for major international connectivity projects.
See also Section 1.2.3 The Orange group strategy.
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3.1.3 Review by business segment
The following table presents the Orange group’s main operating data (financial data and workforce information) by segment for fiscal years 2023 and 2022 on a comparable basis and 2022 on a historical basis.
As part of the Lead the Future strategic plan, presented in February 2023, the Group announced its intention to transform its B2B telecommunication operator model (in order to adapt to the changing B2B market) and strengthen its position in cybersecurity. In line with this announcement, the Enterprise business segment is changing its name to Orange Business (see Note 1.1 to the Consolidated Financial Statements).
For more details on segment information, see Note 1 to the Consolidated Financial Statements.
Fiscal years ended December 31 (in millions of euros) |
France |
Europe |
Africa & Middle East | ||||
Spain |
Other European countries |
Eliminations Europe |
Europe total | ||||
2023 | |||||||
Revenue |
17,730 |
4,698 |
6,889 |
(12) |
11,574 |
7,152 | |
EBITDAaL (1) |
6,364 |
1,246 |
1,791 |
- |
3,037 |
2,734 | |
Operating income |
2,967 |
238 |
533 |
- |
770 |
1,755 | |
eCAPEX (1) |
3,039 |
755 |
1,076 |
- |
1,831 |
1,248 | |
Investments in property, plant and equipment and intangible assets |
3,432 |
787 |
1,572 |
- |
2,359 |
1,535 | |
Average number of employees |
42,737 |
6,096 |
21,031 |
- |
27,127 |
14,620 | |
2022 - Data on a comparable basis (1) | |||||||
Revenue |
17,977 |
4,647 |
6,693 |
(14) |
11,327 |
6,423 | |
EBITDAaL (1) |
6,599 |
1,111 |
1,761 |
- |
2,871 |
2,427 | |
Operating income |
3,328 |
12 |
(164) |
- |
(151) |
1,589 | |
eCAPEX (1) |
3,382 |
863 |
1,104 |
- |
1,966 |
1,172 | |
Investments in property, plant and equipment and intangible assets |
3,746 |
873 |
1,827 |
- |
2,700 |
1,518 | |
Average number of employees |
46,262 |
6,168 |
22,113 |
- |
28,281 |
14,444 | |
2022 - Data on a historical basis | |||||||
Revenue |
17,983 |
4,647 |
6,329 |
(14) |
10,962 |
6,918 | |
EBITDAaL (1) |
6,645 |
1,111 |
1,662 |
- |
2,772 |
2,584 | |
Operating income |
3,361 |
12 |
(190) |
- |
(177) |
1,665 | |
eCAPEX (1) |
3,429 |
863 |
1,020 |
- |
1,883 |
1,271 | |
Investments in property, plant and equipment and intangible assets |
3,793 |
873 |
1,739 |
- |
2,612 |
1,747 | |
Average number of employees |
46,282 |
6,168 |
21,437 |
- |
27,605 |
14,436 |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Orange Business |
Totem |
International Carriers & Shared Services |
Eliminations telecom activities |
Total telecom activities |
Mobile Financial Services |
Eliminations Group |
Group total |
7,927 |
686 |
1,478 |
(2,416) |
44,132 |
- |
(9) |
44,122 |
679 |
372 |
(30) |
1 |
13,157 |
(122) |
1 |
13,035 |
92 |
251 |
(563) |
1 |
5,274 |
(306) |
1 |
4,969 |
296 |
144 |
225 |
- |
6,783 |
33 |
- |
6,815 |
315 |
144 |
245 |
- |
8,030 |
33 |
- |
8,062 |
29,574 |
193 |
12,005 |
- |
126,257 |
852 |
- |
127,109 |
7,912 |
685 |
1,536 |
(2,518) |
43,341 |
- |
(9) |
43,332 |
802 |
371 |
(84) |
- |
12,987 |
(118) |
1 |
12,870 |
321 |
252 |
(478) |
- |
4,860 |
(200) |
1 |
4,661 |
326 |
142 |
278 |
- |
7,267 |
35 |
- |
7,303 |
338 |
142 |
333 |
- |
8,776 |
35 |
- |
8,812 |
28,772 |
165 |
12,282 |
- |
130,205 |
902 |
- |
131,107 |
7,930 |
685 |
1,540 |
(2,538) |
43,480 |
- |
(9) |
43,471 |
804 |
371 |
(96) |
- |
13,080 |
(118) |
1 |
12,963 |
317 |
252 |
(417) |
- |
5,000 |
(200) |
1 |
4,801 |
332 |
142 |
278 |
- |
7,335 |
35 |
- |
7,371 |
344 |
142 |
333 |
- |
8,971 |
35 |
- |
9,007 |
28,786 |
165 |
12,134 |
- |
129,406 |
902 |
- |
130,307 |
3.1.3.1 France
France (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
17,730 |
17,977 |
17,983 |
(1.4)% |
(1.4)% |
EBITDAaL (1) |
6,364 |
6,599 |
6,645 |
(3.6)% |
(4.2)% |
EBITDAaL/Revenue |
35.9% |
36.7% |
37.0% |
(0.8 pt) |
(1.1 pt) |
Operating income |
2,967 |
3,328 |
3,361 |
(10.8)% |
(11.7)% |
eCAPEX (1) |
3,039 |
3,382 |
3,429 |
(10.2)% |
(11.4)% |
eCAPEX/Revenue |
17.1% |
18.8% |
19.1% |
(1.7 pt) |
(1.9 pt) |
Investments in property, plant and equipment and intangible assets |
3,432 |
3,746 |
3,793 |
(8.4)% |
(9.5)% |
Investments in property, plant and equipment and intangible assets/Revenue |
19.4% |
20.8% |
21.1% |
(1.5 pt) |
(1.7 pt) |
Average number of employees |
42,737 |
46,262 |
46,282 |
(7.6)% |
(7.7)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
3.1.3.1.1 Revenue - France
France (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
17,730 |
17,977 |
17,983 |
(1.4)% |
(1.4)% |
Retail services (B2C+B2B) |
11,154 |
10,976 |
10,976 |
1.6% |
1.6% |
Convergent services |
5,065 |
4,857 |
4,857 |
4.3% |
4.3% |
Mobile-only services |
2,364 |
2,332 |
2,332 |
1.4% |
1.4% |
Fixed-only services |
3,725 |
3,787 |
3,787 |
(1.6)% |
(1.6)% |
Fixed-only broadband services |
3,018 |
2,955 |
2,955 |
2.1% |
2.1% |
Fixed-only narrowband services |
707 |
831 |
831 |
(15.0)% |
(15.0)% |
Wholesale services |
4,514 |
4,932 |
4,938 |
(8.5)% |
(8.6)% |
Equipment sales |
1,394 |
1,323 |
1,323 |
5.3% |
5.3% |
Other revenues |
668 |
746 |
746 |
(10.4)% |
(10.4)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Change on a historical basis
On a historical basis, the decrease of 253 million euros in revenues from France between 2022 and 2023 results from (i) the unfavorable impact of changes in the scope of consolidation and other changes of 5 million euros, and (ii) the organic change on a comparable basis i.e. a decrease in revenues of 248 million euros.
Change on a comparable basis
On a comparable basis, the decrease of 248 million euros, i.e. 1.4%, in France revenues between 2022 and 2023 is mainly attributable to:
− the decline in Wholesale services, due to (i) the decline in unbundling revenues on the copper network, (ii) the reduction in the construction of fiber optic networks, particularly for Public Initiative Networks (PINs), (iii) the decline in mobile and fixed interconnection (mainly due to the decrease in voice and message traffic and to regulatory cuts in call termination rates), and, to a lesser extent, (iv) the decrease in FTTH line co-financing received from other operators, (v) partially offset by the increase in FTTH lines leased to third-party operators, and by the growth in visitor roaming revenues;
− the decline in Fixed-only narrowband services, due to the downward trend in conventional telephony revenues (down 15.0%, i.e. a decrease of 124 million euros), linked to customer migration to fixed broadband (particularly FTTH) and convergent offers;
− and the decline in Other revenues, mainly due to the decrease in the construction of build-to-suit mobile sites.
This decrease is partially offset by:
− the growth in Convergent services (up 208 million euros, i.e. 4.3%), mainly reflecting the growth in 12-month convergent ARPO (see Section 7.2.1 Financial glossary), which increased by 3.5% between 2022 and 2023, driven by both (i) the rate increases in the first half of 2023 (see Section 3.1.1.3 Significant events) and (ii) a favorable mix effect, with higher-value convergent offers, notably thanks to fiber. This growth in terms of value is also accompanied by growth in volume, with a year-on-year increase of 0.6% in the convergent customer base. Furthermore, the number of mobile phones in households continues to grow, with 10.3 million convergent mobile customers at December 31, 2023 (up 1.3% year-on-year);
− the increase in Equipment sales, mainly related to demand for more expensive mobile handsets;
− the increase in Fixed-only broadband services (up 63 million euros, i.e. 2.1%). This increase was mainly the result of the 2.2% growth in 12-month fixed-only broadband ARPO (see Section 7.2.1 Financial glossary) due to (i) the rate increases in the first half of 2023 (see Section 3.1.1.3 Significant events) and (ii) a favorable mix effect, mainly thanks to growth in very high-speed fixed broadband accesses (FTTH);
− and the increase of 32 million euros from Mobile-only services, mainly driven by the 4.0% increase in 12-month mobile-only ARPO (see Section 7.2.1 Financial glossary). This growth was mainly due to the increase in rates in the first half of 2023 (see Section 3.1.1.3 Significant events) and offsets the year-on-year decrease of 2.7% in the mobile-only access base (essentially the result of the downward trend in the prepaid mobile access base).
The change in mobile, fixed and convergent access bases is presented in Section 3.1.3.1.5 Additional information - France.
3.1.3.1.2 EBITDAaL - France
Change on a historical basis
On a historical basis, the decrease of 282 million euros in EBITDAaL in France between 2022 and 2023 is attributable to:
− on the one hand, (i) the negative effect of changes in the scope of consolidation and other changes of 48 million euros, (ii) partially offset by the favorable effect of foreign exchange fluctuations of 2 million euros;
− on the other hand, the organic change on a comparable basis, i.e. a decrease of 235 million euros in EBITDAaL.
Change on a comparable basis
On a comparable basis, the decrease of 235 million euros in EBITDAaL in France between 2022 and 2023 is mainly attributable to:
− (i) the decrease of 248 million euros in revenues, (ii) the increase in energy access costs for fixed and mobile networks (see Section 3.1.1.3 Significant events), (iii) the decline in other operating income and expenses (mainly the increase in impairment and losses on trade receivables), (iv) the growth in interest on lease liabilities (with, notably, the rise in interest rates affecting the discount rates applied to contracts and the effects of rent indexation in an inflationary environment, see Section 3.1.1.3 Significant events), (v) the increase in the cost of handsets and other equipment sold (excluding capitalized costs), reflecting the increase in equipment sales, and (vi) the decrease in service fees and inter-operator costs, directly connected with the contraction in revenues from wholesale services, see Section 3.1.3.1.1 Revenue - France);
− partially offset by (i) the decrease in labor expenses, mainly due to the decrease in the average number of employees (full-time equivalent), (ii) the decrease in building costs for resale (fiber optic networks and mobile sites), and (iii) the decrease in business value added tax (cotisation sur la valeur ajoutée des entreprises - CVAE), the main component of the territorial economic contribution (contribution économique territoriale - CET, see Note 10.1 to the Consolidated Financial Statements).
3.1.3.1.3 Operating income - France
Change on a historical basis
On a historical basis, the decrease of 394 million euros in operating income in France between 2022 and 2023 is attributable to:
− on the one hand, (i) the negative effect of changes in the scope of consolidation and other changes of 35 million euros, (ii) partially offset by the favorable effect of foreign exchange fluctuations of 2 million euros;
− on the other hand, the organic change on a comparable basis, i.e. a decrease of 360 million euros in operating income.
Change on a comparable basis
On a comparable basis, the fall of 360 million euros in operating income in France between 2022 and 2023 is largely attributable to:
− the increase in depreciation and amortization of fixed assets, mainly due to the material investments made in recent years (especially in connection with the roll-out of fixed networks, mainly FTTH, and mobile networks), and with the recognition of accelerated depreciation in 2023;
− and the decrease in EBITDAaL excluding interest on lease liabilities and on debts related to financed assets (with no effect on operating income);
− partially offset by the recognition, in 2023, of a provision reversal of 97 million euros for the litigation relating to Digicel (see Notes 5.2 and 14 to the Consolidated Financial Statements).
3.1.3.1.4 Economic CAPEX - France
Change on a historical basis
On a historical basis, the decrease of 391 million euros in economic CAPEX in France between 2022 and 2023 is due to (i) the negative impact of changes in the scope of consolidation and other changes of 47 million euros, and (ii) the organic change on a comparable basis, i.e. a decrease in economic CAPEX of 344 million euros.
Change on a comparable basis
On a comparable basis, the decrease of 344 million euros in economic CAPEX in France between 2022 and 2023 was mainly due to (i) the contraction in investments in very high-speed broadband fixed networks (FTTH), after the major investments made in recent years, (ii) the decrease in economic CAPEX relating to leased handsets, Liveboxes and equipment installed on customer premises, in connection with financed assets (also recognized in investments in property, plant and equipment and intangible assets), partially offset by (iii) the decrease in co-financing received from third-party operators.
3.1.3.1.5 Additional information - France
France (at December 31, in thousands, at the end of the period) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Convergent services | |||||
Number of convergent customers |
5,993 |
5,955 |
5,955 |
0.6% |
0.6% |
12-month convergent ARPO (in euros) (3) |
73.6 |
71.1 |
71.1 |
3.5% |
3.5% |
Mobile services | |||||
Number of mobile accesses (2) |
21,818 |
22,008 |
22,008 |
(0.9)% |
(0.9)% |
o/w: Convergent customers mobile accesses |
10,277 |
10,149 |
10,149 |
1.3% |
1.3% |
Mobile-only accesses |
11,541 |
11,859 |
11,859 |
(2.7)% |
(2.7)% |
o/w: Contract customers mobile accesses |
20,848 |
20,635 |
20,635 |
1.0% |
1.0% |
Prepaid customers mobile accesses |
970 |
1,373 |
1,373 |
(29.3)% |
(29.3)% |
12-month mobile-only ARPO (in euros) (3) |
17.8 |
17.1 |
17.1 |
4.0% |
4.0% |
Fixed services | |||||
Number of fixed accesses |
26,869 |
28,288 |
28,288 |
(5.0)% |
(5.0)% |
Fixed retail accesses |
14,555 |
15,174 |
15,174 |
(4.1)% |
(4.1)% |
o/w: Fixed broadband accesses |
12,309 |
12,425 |
12,425 |
(0.9)% |
(0.9)% |
o/w: Very high-speed fixed broadband accesses |
8,233 |
7,170 |
7,170 |
14.8% |
14.8% |
o/w: Convergent customers fixed accesses |
5,993 |
5,955 |
5,955 |
0.6% |
0.6% |
Fixed-only accesses |
6,317 |
6,471 |
6,471 |
(2.4)% |
(2.4)% |
12 -month fixed-only broadband ARPO (in euros) (3) |
36.8 |
36.0 |
36.0 |
2.2% |
2.2% |
o/w: Fixed narrowband accesses |
2,245 |
2,748 |
2,748 |
(18.3)% |
(18.3)% |
o/w: PSTN accesses |
2,225 |
2,716 |
2,716 |
(18.1)% |
(18.1)% |
Other fixed accesses |
20 |
32 |
32 |
(36.1)% |
(36.1)% |
Fixed wholesale accesses |
12,315 |
13,114 |
13,114 |
(6.1)% |
(6.1)% |
o/w: FTTH accesses |
7,082 |
6,260 |
6,260 |
13.1% |
13.1% |
Copper accesses |
5,233 |
6,854 |
6,854 |
(23.7)% |
(23.7)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Excluding customers of Mobile Virtual Network Operators (MVNOs).
(3) See Section 7.2.1 Financial glossary.
3.1.3.2 Europe
Europe (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
11,574 |
11,327 |
10,962 |
2.2% |
5.6% |
EBITDAaL (1) |
3,037 |
2,871 |
2,772 |
5.8% |
9.5% |
EBITDAaL/Revenue |
26.2% |
25.4% |
25.3% |
0.9 pt |
0.9 pt |
Operating income |
770 |
(151) |
(177) |
na |
na |
eCAPEX (1) |
1,831 |
1,966 |
1,883 |
(6.9)% |
(2.7)% |
eCAPEX/Revenue |
15.8% |
17.4% |
17.2% |
(1.5 pt) |
(1.4 pt) |
Investments in property, plant and equipment and intangible assets |
2,359 |
2,700 |
2,612 |
(12.6)% |
(9.7)% |
Investments in property, plant and equipment and intangible assets/Revenue |
20.4% |
23.8% |
23.8% |
(3.4 pt) |
(3.4 pt) |
Average number of employees |
27,127 |
28,281 |
27,605 |
(4.1)% |
(1.7)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
3.1.3.2.1 Revenue - Europe
Europe (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
11,574 |
11,327 |
10,962 |
2.2% |
5.6% |
Retail services (B2C+B2B) |
7,947 |
7,713 |
7,388 |
3.0% |
7.6% |
Convergent services |
3,088 |
2,967 |
2,830 |
4.1% |
9.1% |
Mobile-only services |
2,932 |
2,893 |
2,869 |
1.4% |
2.2% |
Fixed-only services |
1,361 |
1,366 |
1,219 |
(0.4)% |
11.7% |
IT & integration services |
565 |
487 |
471 |
16.0% |
19.9% |
Wholesale services |
1,700 |
1,849 |
1,828 |
(8.0)% |
(7.0)% |
Equipment sales |
1,757 |
1,582 |
1,559 |
11.1% |
12.7% |
Other revenues |
170 |
183 |
187 |
(7.1)% |
(8.9)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Europe (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
11,574 |
11,327 |
10,962 |
2.2% |
5.6% |
Spain |
4,698 |
4,647 |
4,647 |
1.1% |
1.1% |
Poland |
2,855 |
2,749 |
2,666 |
3.9% |
7.1% |
Belgium & Luxembourg |
1,749 |
1,672 |
1,391 |
4.6% |
25.8% |
Central Europe (2) |
2,292 |
2,280 |
2,280 |
0.5% |
0.5% |
Eliminations |
(20) |
(22) |
(22) |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Central Europe: entities in Moldova, Romania and Slovakia.
Change on a historical basis
On a historical basis, the 612 million euro increase in revenues in the European countries between 2022 and 2023 was due to (i) the favorable effect of changes in the scope of consolidation and other changes of 281 million euros due to the takeover of VOO by Orange Belgium on June 2, 2023 (see Section 3.1.1.3 Significant events), (ii) the positive effect of foreign exchange fluctuations of 84 million euros, mainly reflecting the change in the Polish zloty against the euro, and (iii) the organic change on a comparable basis, i.e. a 248 million euro increase in revenues.
Change on a comparable basis
On a comparable basis, the increase of 248 million euros, i.e. 2.2%, in revenues in the European countries between 2022 and 2023 is mainly attributable to:
− the growth in Equipment sales, mainly due to the increase in sales of equipment and mobile accessories in all European countries;
− the increase in Convergent services, mainly in Belgium (up 10.8% year on year), in Poland (up 8.5% year on year) and, to a lesser extent, in Spain and Slovakia. On a comparable basis, the convergent customer base of European countries grew by 0.7% year on year, reaching 5.9 million customers at December 31, 2023;
− the growth of IT & Integration Services, mainly in Poland, and, to a lesser extent, in Spain and Romania;
− and the growth in Mobile-only services in all countries except Spain and Romania, mainly driven by growth in 12-month mobile-only ARPO (linked in particular to rate increases, see Section 3.1.1.3 Significant events). On a comparable basis, the mobile-only access base increased by 1.7% year on year and reached 44.3 million accesses at December 31, 2023;
− partially offset by the decrease in Wholesale services in all European countries, mainly due to regulatory cuts in call termination rates (mobile and fixed) and the decline in international transit (particularly in Spain).
The change in mobile, fixed and convergent access bases is presented in Section 3.1.3.2.5 Additional information - Europe.
3.1.3.2.2 EBITDAaL - Europe
Change on a historical basis
On a historical basis, the 265 million euro increase in EBITDAaL in the European countries between 2022 and 2023 is the result of (i) the favorable effect of changes in the scope of consolidation and other changes of 76 million euros, due to the takeover of VOO by Orange Belgium on June 2, 2023 (see Section 3.1.1.3 Significant events), (ii) the positive effect of foreign exchange fluctuations of 23 million euros, and (iii) the organic change on a comparable basis, i.e. a 165 million euro increase in EBITDAaL.
Change on a comparable basis
On a comparable basis, the increase of 165 million euros in the EBITDAaL in European countries between 2022 and 2023 can essentially be attributed to:
− (i) the 248 million euro increase in revenue, (ii) the decrease in interconnection costs, as a direct result of the regulatory cuts in call termination rates and the decrease in international transit, and (iii) the increase in other operating income (net of other operating expenses);
− partially offset by (i) the increase in commercial expenses, equipment and content costs, reflecting growth in equipment sales, (ii) the increase in labor expenses, mainly for the entities in Romania (development of a shared services center) and in Belgium (wage indexation), (iii) the increase in network access connectivity costs, mainly in Belgium and Poland, due to the rise in the number of customers on third-party very high-speed broadband networks, and (iv) the rise in interest on lease liabilities, mainly due to the increase in interest rates affecting the discount rates applied to contracts in an inflationary environment (see Section 3.1.3 Significant events).
3.1.3.2.3 Operating income - Europe
Change on a historical basis
On a historical basis, the increase of 948 million euros in the operating income in the European countries between 2022 and 2023 was due to (i) the favorable effect of changes in the scope of consolidation and other changes of 16 million euros, (ii) the positive effect of foreign exchange fluctuations of 11 million euros, and (iii) the organic change on a comparable basis, i.e. an increase of 921 million euros in operating income.
Change on a comparable basis
On a comparable basis, the increase of 921 million euros in operating income in the European countries between 2022 and 2023 is primarily due to:
− (i) the counter-effect of the recognition in 2022 of goodwill impairment of 789 million euros in Romania (see Note 7 to the Consolidated Financial Statements), and (ii) the increase of 165 million euros in EBITDAaL;
− partially offset by the increase in restructuring programs costs, mainly in Poland, mainly due to departure plans (see Note 5.3 to the Consolidated Financial Statements).
3.1.3.2.4 Economic CAPEX - Europe
Change on a historical basis
On a historical basis, the 51 million euro decrease in economic CAPEX in the European countries between 2022 and 2023 includes (i) the favorable effect of changes in the scope of consolidation and other changes of 72 million euros due to the takeover of VOO by Orange Belgium on June 2, 2023 (see Section 3.1.1.3 Significant events), (ii) the positive effect of foreign exchange fluctuations of 11 million euros, and (iii) the organic change on a comparable basis, i.e. a 135 million euro decrease in economic CAPEX.
Change on a comparable basis
On a comparable basis, the decrease of 135 million euros in economic CAPEX in the European countries between 2022 and 2023 was mainly due to (i) lower investment in networks in Spain (see Section 3.1.3.2.6 Additional information - Spain), and, to a lesser extent, in Poland, (ii) partially offset by higher investment in mobile networks in Belgium and increased IT investments in Poland and Romania.
3.1.3.2.5 Additional information - Europe
Europe (at December 31, in thousands, at the end of the period) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Convergent services | |||||
Number of convergent customers |
5,924 |
5,882 |
5,674 |
0.7% |
4.4% |
o/w: Spain |
2,869 |
2,959 |
2,959 |
(3.0)% |
(3.0)% |
Poland |
1,700 |
1,625 |
1,625 |
4.7% |
4.7% |
Belgium & Luxembourg |
627 |
578 |
370 |
8.4% |
69.2% |
Central Europe (4) |
728 |
720 |
720 |
1.1% |
1.1% |
12 -month convergent ARPO (3) | |||||
Spain (in euros) |
55.9 |
53.8 |
53.8 |
3.9% |
3.9% |
Poland (in zlotys) |
118.9 |
114.7 |
114.7 |
3.6% |
3.6% |
Mobile services | |||||
Number of mobile accesses (2) |
55,980 |
55,073 |
54,693 |
1.6% |
2.4% |
o/w: Convergent customers mobile accesses |
11,667 |
11,499 |
11,177 |
1.5% |
4.4% |
Mobile-only accesses |
44,313 |
43,575 |
43,516 |
1.7% |
1.8% |
o/w: Contract customers mobile accesses |
45,000 |
42,907 |
42,526 |
4.9% |
5.8% |
Prepaid customers mobile accesses |
10,980 |
12,166 |
12,166 |
(9.7)% |
(9.7)% |
o/w: Spain |
17,715 |
16,948 |
16,948 |
4.5% |
4.5% |
Poland |
17,628 |
17,630 |
17,630 |
(0.0)% |
(0.0)% |
Belgium & Luxembourg |
6,698 |
5,919 |
5,539 |
13.2% |
20.9% |
Central Europe (4) |
13,940 |
14,576 |
14,576 |
(4.4)% |
(4.4)% |
12 -month mobile-only ARPO (3) | |||||
Spain (in euros) |
10.2 |
10.1 |
10.1 |
1.0% |
1.0% |
Poland (in zlotys) |
21.9 |
20.3 |
20.3 |
7.7% |
7.7% |
Fixed services | |||||
Number of fixed accesses |
12,407 |
12,831 |
12,339 |
(3.3)% |
0.6% |
Fixed retail accesses |
11,020 |
11,492 |
11,000 |
(4.1)% |
0.2% |
o/w: Fixed broadband accesses |
9,289 |
9,373 |
8,881 |
(0.9)% |
4.6% |
o/w: Very high-speed fixed broadband accesses |
6,986 |
6,627 |
6,134 |
5.4% |
13.9% |
o/w: Convergent customers fixed accesses |
5,924 |
5,882 |
5,674 |
0.7% |
4.4% |
Fixed-only accesses |
3,365 |
3,492 |
3,207 |
(3.6)% |
4.9% |
o/w: Spain |
3,938 |
3,982 |
3,982 |
(1.1)% |
(1.1)% |
Poland |
2,821 |
2,804 |
2,804 |
0.6% |
0.6% |
Belgium & Luxembourg |
1,011 |
958 |
466 |
5.5% |
117.0% |
Central Europe (4) |
1,520 |
1,629 |
1,629 |
(6.7)% |
(6.7)% |
12 -month fixed-only broadband ARPO (3) | |||||
Spain (in euros) |
26.2 |
25.8 |
25.8 |
1.5% |
1.5% |
Poland (in zlotys) |
64.2 |
61.7 |
61.7 |
4.0% |
4.0% |
o/w: Fixed narrowband accesses |
1,731 |
2,119 |
2,119 |
(18.3)% |
(18.3)% |
Fixed wholesale accesses |
1,387 |
1,339 |
1,339 |
3.6% |
3.6% |
o/w: Spain |
1,002 |
946 |
946 |
5.9% |
5.9% |
Poland |
385 |
393 |
393 |
(2.0)% |
(2.0)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Excluding customers of Mobile Virtual Network Operators (MVNOs).
(3) See Section 7.2.1 Financial glossary.
(4) Central Europe: entities in Moldova, Romania and Slovakia.
3.1.3.2.6 Additional information - Spain
Spain (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
4,698 |
4,647 |
4,647 |
1.1% |
1.1% |
EBITDAaL (1) |
1,246 |
1,111 |
1,111 |
12.2% |
12.2% |
EBITDAaL/Revenue |
26.5% |
23.9% |
23.9% |
2.6 pt |
2.6 pt |
Operating income |
238 |
12 |
12 |
N/A |
N/A |
eCAPEX (1) |
755 |
863 |
863 |
(12.5)% |
(12.5)% |
eCAPEX/Revenue |
16.1% |
18.6% |
18.6% |
(2.5 pt) |
(2.5 pt) |
Investments in property, plant and equipment and intangible assets |
787 |
873 |
873 |
(9.8)% |
(9.8)% |
Investments in property, plant and equipment and intangible assets/Revenue |
16.8% |
18.8% |
18.8% |
(2.0 pt) |
(2.0 pt) |
Average number of employees |
6,096 |
6,168 |
6,168 |
(1.2)% |
(1.2)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Revenue - Spain
Spain (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
4,698 |
4,647 |
4,647 |
1.1% |
1.1% |
Retail services (B2C+B2B) |
3,192 |
3,136 |
3,136 |
1.8% |
1.8% |
Convergent services |
1,894 |
1,870 |
1,870 |
1.3% |
1.3% |
Mobile-only services |
782 |
790 |
790 |
(0.9)% |
(0.9)% |
Fixed-only services |
457 |
436 |
436 |
5.0% |
5.0% |
IT & integration services |
58 |
41 |
41 |
41.9% |
41.9% |
Wholesale services |
793 |
878 |
878 |
(9.6)% |
(9.6)% |
Equipment sales |
711 |
632 |
632 |
12.5% |
12.5% |
Other revenues |
2 |
1 |
1 |
113.3% |
113.3% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the increase of 50 million euros, i.e. 1.1%, in revenues in Spain between 2022 and 2023 was mainly due to:
− the increase in Equipment sales, mainly due to the increase in sales of equipment and mobile accessories;
− the increase in Convergent services, mainly driven by the growth in 12-month convergent ARPO (up 3.9% year on year). This growth in value, enabled by the focus on customer value management combined with a moderate promotional policy, more than offsets the erosion of the customer base (down 3.0% year on year);
− the growth of IT and Integration Services;
− and the growth of Fixed-only broadband services, due to both (i) the 4.4% growth in the fixed-only broadband access base year on year, and (ii) the 1.5% growth in 12-month fixed-only broadband ARPO;
− partially offset (i) by the decline in Wholesale services, mainly related to the decrease in international transit and the regulatory cuts in call termination rates, and (ii) to a lesser extent, by the decrease in Mobile-only services, mainly due to the 6.4% contraction in the prepaid mobile access base, partially offset by growth of 1.0% in 12-month mobile-only ARPO between the two periods.
EBITDAaL - Spain
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the increase of 135 million euros in EBITDAaL in Spain between 2022 and 2023 was mainly due to:
− (i) the decrease in service fees and inter-operator costs, directly connected to the contraction in revenues from wholesale services (see Revenue - Spain above), (ii) the decrease in network operating and maintenance expenses, mainly due to the counter-effect of higher energy access costs in 2022 for the fixed and mobile network, (iii) the increase of 50 million euros in revenues, and (iv) the increase in other operating income;
− partially offset (i) by the increase in the cost of handsets and other equipment sold, mainly due to the growth in mobile equipment sales, and (ii) higher interest on lease liabilities.
Operating income - Spain
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the 225 million euro increase in operating income in Spain between 2022 and 2023 was mainly due to (i) the 135 million euro increase in EBITDAaL, and (ii) the decrease in the depreciation and amortization of fixed assets, mainly due to the counter-effect of the end of the amortization of Jazztel’s subscriber base assets in 2022.
Economic CAPEX - Spain
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the 107 million euro decrease in economic CAPEX in Spain between 2022 and 2023 was due to the decrease in investments in networks, resulting mainly from lower capital expenditure on very high-speed broadband mobile networks (4G/5G) and very high-speed broadband fixed networks (FTTH) and capacity investments, following the material investments made in recent years.
3.1.3.3 Africa & Middle East
Africa & Middle East (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
7,152 |
6,423 |
6,918 |
11.4% |
3.4% |
EBITDAaL (1) |
2,734 |
2,427 |
2,584 |
12.7% |
5.8% |
EBITDAaL/Revenue |
38.2% |
37.8% |
37.3% |
0.4 pt |
0.9 pt |
Operating income |
1,755 |
1,589 |
1,665 |
10.5% |
5.4% |
eCAPEX (1) |
1,248 |
1,172 |
1,271 |
6.5% |
(1.8)% |
eCAPEX/Revenue |
17.5% |
18.3% |
18.4% |
(0.8 pt) |
(0.9 pt) |
Investments in property, plant and equipment and intangible assets |
1,535 |
1,518 |
1,747 |
1.1% |
(12.2)% |
Investments in property, plant and equipment and intangible assets/Revenue |
21.5% |
23.6% |
25.3% |
(2.2 pt) |
(3.8 pt) |
Average number of employees |
14,620 |
14,444 |
14,436 |
1.2% |
1.3% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Africa and the Middle East continue to suffer political, security or economic instability and sometimes by tax or regulatory pressures that may affect the general business climate, the activity and earnings of subsidiaries and shareholdings, and these could continue to affect them in the future. In some cases, these situations have led the Group to recognize asset impairments (see Notes 7, 8.3 and 11 to the Consolidated Financial Statements). For further information on these risk factors, see Section 2.1 Risk factors.
3.1.3.3.1 Revenue - Africa & Middle East
Africa & Middle East (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
7,152 |
6,423 |
6,918 |
11.4% |
3.4% |
Retail services (B2C+B2B) |
6,356 |
5,715 |
6,112 |
11.2% |
4.0% |
Mobile-only services |
5,456 |
4,924 |
5,272 |
10.8% |
3.5% |
Fixed-only services |
847 |
752 |
800 |
12.6% |
5.9% |
IT & integration services |
53 |
38 |
40 |
40.6% |
34.0% |
Wholesale services |
666 |
584 |
663 |
14.1% |
0.4% |
Equipment sales |
90 |
92 |
104 |
(1.9)% |
(13.2)% |
Other revenues |
40 |
33 |
39 |
23.2% |
2.8% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Africa & Middle East (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
7,152 |
6,423 |
6,918 |
11.4% |
3.4% |
Sonatel sub-group (2) |
2,470 |
2,178 |
2,217 |
13.4% |
11.4% |
Côte d’Ivoire sub-group (3) |
1,549 |
1,468 |
1,471 |
5.6% |
5.3% |
Egypt |
779 |
603 |
992 |
29.3% |
(21.5)% |
Morocco |
731 |
687 |
705 |
6.4% |
3.7% |
Jordan |
470 |
453 |
465 |
3.8% |
1.1% |
Cameroon |
477 |
421 |
421 |
13.4% |
13.4% |
Congo (DRC) |
435 |
414 |
425 |
5.0% |
2.3% |
Other countries (4) |
309 |
268 |
290 |
15.4% |
6.6% |
Eliminations |
(68) |
(68) |
(68) |
0.1% |
0.3% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Sonatel sub-group: entities in Senegal, Mali, Guinea, Guinea-Bissau and Sierra Leone.
(3) Côte d’Ivoire sub-group: entities in Côte d’Ivoire, Burkina Faso and Liberia.
(4) Other countries: mainly entities in Botswana, Central African Republic (CAR) and Madagascar.
Change on a historical basis
On a historical basis, the increase of 234 million euros in the revenues in Africa & Middle East countries between 2022 and 2023 includes (i) the negative effect of foreign exchange fluctuations for 495 million euros, mainly related to movements in the Egyptian pound against the euro of 380 million euros, and (ii) the organic change on a comparable basis, i.e. an increase of 729 million euros in revenues.
Change on a comparable basis
On a comparable basis, the increase of 729 million euros, i.e. 11.4%, in the revenues in Africa & Middle East countries between 2022 and 2023 is mainly attributable to:
− the increase in Mobile-only services, driven by (i) the growth in data services, up 17.7% year on year, driven largely by the vibrant 4G customer base, which grew by 17.4% year on year to reach 61.7 million customers at December 31, 2023, and (ii) the year-on-year growth of 25.8% in the revenues of Orange Money (which reached 567 million euros in 2023), mainly due to 16.9% growth in the active customer base. The mobile access base also continued to grow, recording a year-on-year increase of 4.3%;
− the growth of Fixed-only services, driven by the development of fixed-only broadband services, which rose by 12.6% year on year. The fixed-only broadband access base grew by 20.2% year on year reaching 3.3 million customers at December 31, 2023;
− and the increase in Wholesale services, largely due to the introduction of a national roaming agreement in Egypt.
3.1.3.3.2 EBITDAaL - Africa & Middle East
Change on a historical basis
On a historical basis, the increase of 151 million euros in EBITDAaL in Africa & Middle East countries between 2022 and 2023 includes (i) the negative effect of foreign exchange fluctuations for 185 million euros, mainly as a result of movements in the Egyptian pound against the euro, (ii) the positive impact of changes in the scope of consolidation and other changes for 28 million euros, and (iii) the organic change on a comparable basis, i.e. an increase of 307 million euros in EBITDAaL.
Change on a comparable basis
On a comparable basis, the increase of 307 million euros in EBITDAaL in Africa & Middle East countries between 2022 and 2023 is primarily explained by the growth of 729 million euros in revenues, partially offset by:
− the increase in commercial expenses and equipment costs, due to (i) higher fees, related to the growth in the revenues of Orange Money, (ii) increased equipment costs in Egypt resulting from a new distribution agreement, and (iii) the increase in the costs of SIM cards in several countries;
− the rise in other operating expenses, mainly reflecting the change in various risks between the two periods;
− the increase in network operating and maintenance expenses as a result of traffic growth, ongoing network roll-outs in all countries and higher energy access costs for fixed and mobile networks (see Section 3.1.1.3 Significant events);
− higher operating taxes and levies payables, mainly as a result of business growth and higher spectrum fees;
− higher service fees and inter-operator costs, directly in line with revenue growth in wholesale services and mostly related to the introduction of a national roaming agreement in Egypt;
− and rising labor expenses in almost all countries, relating to the commercial performance in the region.
3.1.3.3.3 Operating income - Africa & Middle East
Change on a historical basis
On a historical basis, the increase of 90 million euros in operating income in Africa & Middle East countries between 2022 and 2023 includes (i) the negative effect of foreign exchange fluctuations for 104 million euros, mainly as a result of movements in the Egyptian pound against the euro, (ii) the positive impact of changes in the scope of consolidation and other changes for 28 million euros, and (iii) the organic change on a comparable basis, i.e. an increase of 166 million euros in operating income.
Change on a comparable basis
On a comparable basis, the increase of 166 million euros in operating income in Africa & Middle East countries between 2022 and 2023 is primarily explained by the rise of 307 million euros in EBITDAaL, partially offset by:
− the increase in depreciation and amortization of fixed assets, mainly due to growth in investments in recent years and the amortization of the new telecommunication licenses acquired;
− the counter-effect of the recognition in 2022 of gains on disposal of 73 million euros related to the review of fixed assets, investments and business portfolio (mainly linked to the disposal of assets in the Democratic Republic of the Congo (DRC) and Côte d’Ivoire);
− and the recognition in 2023 of a net expense on significant litigation of 38 million euros.
3.1.3.3.4 Economic CAPEX - Africa & Middle East
Change on a historical basis
On a historical basis, the decrease of 22 million euros in economic CAPEX in Africa & Middle East countries between 2022 and 2023 includes (i) the negative effect of foreign exchange fluctuations for 98 million euros, and (ii) the organic change on a comparable basis, i.e. an increase of 76 million euros in economic CAPEX.
Change on a comparable basis
On a comparable basis, the increase of 76 million euros in economic CAPEX in Africa & Middle East countries between 2022 and 2023 is chiefly the result of the growth in investments in very high-speed broadband mobile networks (4G/5G) to support business growth (capacity investments) and changes in usage.
3.1.3.3.5 Additional information - Africa & Middle East
Africa & Middle East (at December 31, in thousands, at the end of the period) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Mobile services | |||||
Number of mobile accesses (2) |
149,179 |
143,068 |
143,068 |
4.3% |
4.3% |
o/w: Contract customers mobile accesses |
11,054 |
8,768 |
8,768 |
26.1% |
26.1% |
Prepaid customers mobile accesses |
138,125 |
134,301 |
134,301 |
2.8% |
2.8% |
o/w: Sonatel sub-group (3) |
39,902 |
37,897 |
37,897 |
5.3% |
5.3% |
Côte d’Ivoire sub-group (4) |
31,671 |
28,964 |
28,964 |
9.3% |
9.3% |
Egypt |
29,166 |
28,225 |
28,225 |
3.3% |
3.3% |
Morocco |
14,638 |
14,774 |
14,774 |
(0.9)% |
(0.9)% |
Jordan |
2,773 |
2,545 |
2,545 |
9.0% |
9.0% |
Cameroon |
12,251 |
11,272 |
11,272 |
8.7% |
8.7% |
Congo (DRC) |
12,412 |
13,302 |
13,302 |
(6.7)% |
(6.7)% |
Other countries (5) |
6,366 |
6,089 |
6,089 |
4.5% |
4.5% |
Fixed services | |||||
Number of fixed accesses |
4,225 |
3,591 |
3,591 |
17.7% |
17.7% |
Fixed retail accesses |
4,225 |
3,591 |
3,591 |
17.7% |
17.7% |
o/w: Fixed broadband accesses |
3,343 |
2,782 |
2,782 |
20.2% |
20.2% |
Fixed narrowband accesses |
882 |
809 |
809 |
9.0% |
9.0% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Excluding customers of Mobile Virtual Network Operators (MVNOs).
(3) Sonatel sub-group: entities in Senegal, Mali, Guinea, Guinea-Bissau and Sierra Leone.
(4) Côte d’Ivoire sub-group: entities in Côte d’Ivoire, Burkina Faso and Liberia.
(5) Other countries: mainly entities in Botswana, Central African Republic (CAR) and Madagascar.
3.1.3.4 Orange Business
Orange Business (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
7,927 |
7,912 |
7,930 |
0.2% |
(0.0)% |
EBITDAaL (1) |
679 |
802 |
804 |
(15.4)% |
(15.5)% |
EBITDAaL/Revenue |
8.6% |
10.1% |
10.1% |
(1.6 pt) |
(1.6 pt) |
Operating income |
92 |
321 |
317 |
(71.4)% |
(71.0)% |
eCAPEX (1) |
296 |
326 |
332 |
(9.3)% |
(11.0)% |
eCAPEX/Revenue |
3.7% |
4.1% |
4.2% |
(0.4 pt) |
(0.5 pt) |
Investments in property, plant and equipment and intangible assets |
315 |
338 |
344 |
(6.7)% |
(8.3)% |
Investments in property, plant and equipment and intangible assets/Revenue |
4.0% |
4.3% |
4.3% |
(0.3 pt) |
(0.4 pt) |
Average number of employees |
29,574 |
28,772 |
28,786 |
2.8% |
2.7% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
As part of the Lead the Future strategic plan, presented in February 2023, the Group announced its intention to transform its B2B telecommunication operator model (in order to adapt to the changing B2B market) and strengthen its position in cybersecurity. In line with this announcement, the Enterprise business segment is changing its name to Orange Business (see Note 1.1 to the Consolidated Financial Statements). Orange Business aims to become the leading European network and digital integrator.
3.1.3.4.1 Revenue - Orange Business
Orange Business (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
7,927 |
7,912 |
7,930 |
0.2% |
(0.0)% |
Fixed-only services |
3,220 |
3,450 |
3,466 |
(6.7)% |
(7.1)% |
Voice services (2) |
890 |
1,015 |
1,018 |
(12.3)% |
(12.5)% |
Data services (3) |
2,330 |
2,435 |
2,448 |
(4.3)% |
(4.8)% |
IT & integration services |
3,706 |
3,487 |
3,489 |
6.3% |
6.2% |
Mobile services and equipment sales (4) |
1,001 |
975 |
975 |
2.6% |
2.6% |
Mobile-only services |
693 |
659 |
659 |
5.1% |
5.1% |
Wholesale services |
41 |
41 |
41 |
(0.8)% |
(0.8)% |
Equipment sales |
267 |
275 |
275 |
(2.9)% |
(2.9)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Voice services include (i) legacy voice offers (Public Switched Telephone Network or PSTN accesses), (ii) Voice over Internet Protocol (VoIP) products, (iii) audio-conference services, (iv) incoming traffic for call centers, and (v) network equipment sales related to the operation of voice services.
(3) Data services include (i) legacy data solutions still offered by Orange Business (Frame Relay, Transrel, leased lines, narrowband), (ii) services having reached a certain maturity such as IP-VPN (Internet Protocol virtual personal network), and broadband infrastructure products such as satellite or fiber optic accesses, (iii) satellite TV broadcast services, (iv) Business Everywhere roaming offers and (v) network equipment sales related to the operation of data services.
(4) Mobile services and equipment sales include (i) mobile-only services, (ii) wholesale services, corresponding to incoming mobile B2B traffic invoiced to other carriers, and (iii) mobile equipment sales.
Change on a historical basis
On a historical basis, the decrease of 4 million euros in the revenues of Orange Business between 2022 and 2023 includes:
− the negative effect of foreign exchange fluctuations of 59 million euros;
− the positive effect of changes in the scope of consolidation and other changes of 41 million euros, mainly related to (i) the acquisition of SCRT and Telsys by Orange Cyberdefense on November 8, 2022 and (ii) the acquisition of NEHS Digital and Xperis by Enovacom (a healthcare subsidiary of Orange Business) on September 26, 2023;
− and the organic change on a comparable basis, i.e. an increase in revenues of 14 million euros.
Change on a comparable basis
On a comparable basis, the increase of 14 million euros in Orange Business revenues between 2022 and 2023, i.e. an increase of 0.2%, is mainly attributable to:
− the growth in IT & Integration Services, driven by the growing requirements of businesses in the field of (i) cybersecurity services (reflected in revenues of 1,103 million euros for Orange Cyberdefense in 2023, up 10.9% year on year), (ii) digital & data services (up 7.2% year on year), relating to data gathering, analysis and use and (iii) integration services (up 7.3% year on year), mainly including unified communication and collaboration services;
− and to a lesser extent, the growth in Mobile services and equipment, largely as a result of the increase in the mobile access base and the development of new mobile services such as private mobile networks (PMRs, Private Mobile Radio);
− partially offset by the decline in Fixed-only services, impacted by both (i) the decline in Voice services, which continue to be affected by the downward trend in conventional fixed telephony, mainly in France, and (ii) the decrease in Data services, owing to the general trend toward transformation of data services technologies.
3.1.3.4.2 EBITDAaL - Orange Business
Change on a historical basis
On a historical basis, the decrease of 125 million euros in the EBITDAaL of Orange Business between 2022 and 2023 is attributable to:
− the negative effect of foreign exchange fluctuations for 3 million euros, partially offset by the favorable impact of changes in the scope of consolidation and other changes for 2 million euros;
− and the organic change on a comparable basis, i.e. a decrease of 123 million euros in EBITDAaL.
Change on a comparable basis
On a comparable basis, the decrease of 123 million euros in the EBITDAaL of Orange Business between 2022 and 2023 can essentially be attributed to:
− the increase in commercial expenses and equipment costs in connection with higher sales of equipment for unified communication and collaboration services;
− higher IT costs, related notably to increased cybersecurity services;
− the rise in labor expenses, mainly due to the increase in the average salary and the number of employees connected with the development of IT & Integration Services and information technologies as part of the transformation of Orange Business into a Digital Services Company model (DSC, see Section 3.1.1.3 Significant events);
− and the increase in other external purchases, relating to (i) the increase in overheads, (ii) the increase in building costs for resale, due to the development of integration services and information technologies, and (iii) the increase in real estate fees in an inflationary environment (see Section 3.1.1.3 Significant events);
− partially offset by (i) the decrease in service fees and inter-operator costs, directly connected with the contraction in revenues from voice services, (ii) the decrease in other operating expenses (net of other operating income), (iii) the decrease in operating taxes and levies payables, and (iv) the increase of 14 million euros in revenues.
3.1.3.4.3 Operating income - Orange Business
Change on a historical basis
On a historical basis, the decrease of 225 million euros in operating income of Orange Business between 2022 and 2023 included (i) the positive effect of foreign exchange fluctuations of 2 million euros, (ii) the favorable effect of changes in the scope of consolidation and other changes for 2 million euros, and (iii) the organic change on a comparable basis, i.e. a decrease of 229 million euros in operating income.
Change on a comparable basis
On a comparable basis, the decrease of 229 million euros in the operating income of Orange Business between 2022 and 2023 is largely attributable to:
− the increase in restructuring programs costs, mainly due to the recognition in 2023 of costs totaling 215 million euros for the Orange Business transformation plan in France and abroad, mainly relating to departure plans, and, to a lesser extent, the discontinuation of products and services (see Section 3.1.1.3 Significant events and 2023 Highlights of the Consolidated Financial Statements and Note 5.3 to the Consolidated Financial Statements);
− the decrease of 123 million euros in EBITDAaL;
− and the increase in specific labor expenses, mainly related to the French part-time for seniors plans and the related bonuses (see Section 3.1.1.3 Significant events - Effect of French pension reform);
− partially offset by (i) the decline in depreciation and amortization of fixed assets and (ii) decreased impairment of fixed assets.
3.1.3.4.4 Economic CAPEX - Orange Business
Change on a historical basis
On a historical basis, the decrease of 36 million euros in the economic CAPEX of Orange Business between 2022 and 2023 is due to (i) the negative effect of foreign exchange fluctuations for 6 million euros and (ii) the organic change on a comparable basis, i.e. a decrease of 30 million euros in economic CAPEX.
Change on a comparable basis
On a comparable basis, the decrease of 30 million euros in the economic CAPEX of Orange Business between 2022 and 2023 can essentially be attributed to the refocusing on investments on strategic areas, and, to a lesser extent, the increase in disposals of fixed assets.
3.1.3.4.5 Additional information - Orange Business
Orange Business (at December 31, in thousands, at the end of the period) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Mobile services | |||||
Number of mobile accesses in France (2) |
27,004 |
22,086 |
22,086 |
22.3% |
22.3% |
Fixed services | |||||
Number of fixed accesses in France |
1,002 |
1,140 |
1,140 |
(12.1)% |
(12.1)% |
Fixed retail accesses |
1,002 |
1,140 |
1,140 |
(12.1)% |
(12.1)% |
o/w: Fixed broadband accesses |
233 |
244 |
244 |
(4.6)% |
(4.6)% |
Fixed narrowband accesses |
769 |
896 |
896 |
(14.2)% |
(14.2)% |
IP-VPN accesses worldwide (3) |
326 |
343 |
343 |
(4.9)% |
(4.9)% |
o/w: IP-VPN accesses in France (3) |
284 |
297 |
297 |
(4.4)% |
(4.4)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Contract customers. Excluding customers of Mobile Virtual Network Operators (MVNOs).
(3) Accesses of customers outside the Orange group, not including the carrier market.
3.1.3.5 Totem
Totem (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
686 |
685 |
685 |
0.3% |
0.3% |
EBITDAaL (1) |
372 |
371 |
371 |
0.4% |
0.4% |
EBITDAaL/Revenue |
54.2% |
54.2% |
54.2% |
0.1 pt |
0.1 pt |
Operating income |
251 |
252 |
252 |
(0.2)% |
(0.2)% |
eCAPEX (1) |
144 |
142 |
142 |
1.0% |
1.0% |
eCAPEX/Revenue |
20.9% |
20.8% |
20.8% |
0.1 pt |
0.1 pt |
Investments in property, plant and equipment and intangible assets |
144 |
142 |
142 |
1.0% |
1.0% |
Investments in property, plant and equipment and intangible assets/Revenue |
20.9% |
20.8% |
20.8% |
0.1 pt |
0.1 pt |
Average number of employees |
193 |
165 |
165 |
17.2% |
17.2% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
3.1.3.5.1 Revenue - Totem
Totem (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
686 |
685 |
685 |
0.3% |
0.3% |
Wholesale services |
686 |
685 |
685 |
0.3% |
0.3% |
Other revenues |
- |
- |
- |
- |
- |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the increase of 2 million euros, i.e. 0.3%, in Totem’s revenues between 2022 and 2023 was mainly due to:
− the 3.7% year-on-year rise in hosting revenues. In 2023, 16.7% of hosting revenues came from external customers, representing an increase of 0.5 points compared with 2022;
− and the increase in studies and site redevelopment work in France;
− largely offset by the decrease in revenues due to the rebilling of energy costs (see below).
At December 31, 2023, Totem had 27,292 sites with 38,116 active occupants, i.e. an occupation rate of 1.40 occupants per site.
3.1.3.5.2 EBITDAaL - Totem
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the increase of 2 million euros in Totem’s EBITDAaL between 2022 and 2023 was mainly due to:
− (i) the decrease in energy access costs, mainly due to the decrease in average energy prices between the two periods, and (ii) the increase of 2 million euros in revenues;
− mostly offset by (i) the increase in interest on lease liabilities and depreciation and amortization of right-of-use assets, mainly due to the rise in interest rates in an inflationary environment (see Section 3.1.1.3 Significant events) and the increase in the number of leased sites accompanying the growth in hosting activity, and (ii) the increase in building costs for resale.
3.1.3.5.3 Operating income - Totem
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, Totem’s operating income was flat between 2022 and 2023. Between the two periods, the increase in EBITDAaL excluding interest on lease liabilities (with no effect on operating income) was offset by the increase in depreciation and amortization of fixed assets and the rise in restructuring programs costs.
3.1.3.5.4 Economic CAPEX - Totem
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the 1 million euro increase in Totem’s economic CAPEX between 2022 and 2023 was primarily due to the increase in the construction of new mobile sites, partially offset by the decrease in tower reinforcement works.
3.1.3.6 International Carriers & Shared Services
International Carriers & Shared Services (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
1,478 |
1,536 |
1,540 |
(3.7)% |
(4.0)% |
EBITDAaL (1) |
(30) |
(84) |
(96) |
63.8% |
68.4% |
EBITDAaL/Revenue |
(2.0)% |
(5.4)% |
(6.2)% |
3.4 pt |
4.2 pt |
Operating income |
(563) |
(478) |
(417) |
(17.8)% |
(34.9)% |
eCAPEX (1) |
225 |
278 |
278 |
(19.0)% |
(19.0)% |
eCAPEX/Revenue |
15.2% |
18.1% |
18.1% |
(2.9 pt) |
(2.8 pt) |
Investments in property, plant and equipment and intangible assets |
245 |
333 |
333 |
(26.4)% |
(26.4)% |
Investments in property, plant and equipment and intangible assets/Revenue |
16.6% |
21.7% |
21.6% |
(5.1 pt) |
(5.1 pt) |
Average number of employees |
12,005 |
12,282 |
12,134 |
(2.3)% |
(1.1)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
3.1.3.6.1 Revenue - International Carriers & Shared Services
International Carriers & Shared Services (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Revenue |
1,478 |
1,536 |
1,540 |
(3.7)% |
(4.0)% |
Wholesale services |
982 |
1,058 |
1,060 |
(7.1)% |
(7.3)% |
Other revenues |
496 |
478 |
480 |
3.7% |
3.4% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
Change on a historical basis
On a historical basis, the decrease of 61 million euros in the revenues of International Carriers & Shared Services between 2022 and 2023 results from (i) the negative effect of changes in foreign exchange fluctuations of 3 million euros, (ii) the unfavorable effect of changes in the scope of consolidation and other changes of 1 million euros, and (iii) the organic change on a comparable basis, i.e. a decrease of 57 million euros in revenues.
Change on a comparable basis
On a comparable basis, the decrease of 57 million euros, i.e. 3.7%, in revenues from International Carriers & Shared Services between 2022 and 2023 is attributable to:
− the 75 million euro decrease in Wholesale services related to the downward trend in voice traffic and the refocusing of voice services toward higher-value activities, partially offset by (i) the sale of rights of use for a submarine cable in the Caribbean and (ii) the increase in mobile services and data services (resulting from market growth and increased travel);
− partially offset by the increase of 18 million euros in Other revenues. That increase was mainly due to (i) higher Sofrecom revenues, and (ii) higher Orange Marine revenues due, on the one hand, to the increase in submarine cable-laying in a dynamic market, and, on the other, to the sale of cables and a submarine robot, (iii) partially offset by the decline in revenues from content activities (OCS and Orange Studio, see Section 3.1.1.3 Significant events).
3.1.3.6.2 EBITDAaL - International Carriers & Shared Services
Change on a historical basis
On a historical basis, the improvement of 65 million euros in the EBITDAaL of International Carriers & Shared Services between 2022 and 2023 included (i) the positive effect of foreign exchange fluctuations of 10 million euros, (ii) the favorable effect of changes in the scope of consolidation and other changes for 2 million euros, and (iii) the organic change on a comparable basis, i.e. an increase of 53 million euros in EBITDAaL.
Change on a comparable basis
On a comparable basis, the improvement of 53 million euros in the EBITDAaL of International Carriers & Shared Services between 2022 and 2023 was mainly due to:
− the sharp decline in interconnection fees, directly linked to lower wholesale services revenues and relating for the most part to the drop in voice traffic;
− the decrease in content costs, due to the reduced activity of OCS and Orange Studio (see Section 3.1.1.3 Significant events);
− the decrease in the depreciation and amortization of right-of-use assets, chiefly related to the termination of leases on tertiary buildings (offices and stores) and technical sites;
− and the decrease in labor expenses, in line with the reduction in the average number of employees (full-time equivalent), particularly for shared services;
− partially offset by (i) the decrease of 57 million euros in revenues, (ii) the increase in commercial expenses and equipment costs due to production transferred from inventory following the sale of rights of use for a submarine cable in the Caribbean, (iii) higher IT expenses, primarily as a result of increased outsourcing, and (iv) the increase in other external purchases, particularly due to higher real estate fees in an inflationary environment (see Section 3.1.1.3 Significant events).
3.1.3.6.3 Operating income - International Carriers & Shared Services
Change on a historical basis
On a historical basis, the deterioration of 146 million euros in the operating income of International Carriers & Shared Services between 2022 and 2023 included:
− the unfavorable impact of changes in the scope of consolidation and other changes, amounting to 71 million euros, mainly including the counter-effect of the gain on disposal related to the remeasurement of Deezer shares at fair value (following the merger of Deezer into the SPAC I2PO, and the initial public offering of the new entity in July 2022), recognized as a review of fixed assets, investments and business portfolio for 77 million euros in 2022 (see Note 3.2 to the Consolidated Financial Statements);
− the positive impact of foreign exchange fluctuations of 10 million euros;
− and the organic change on a comparable basis, i.e. a decrease of 85 million euros in operating income.
Change on a comparable basis
On a comparable basis, the downturn of 85 million euros in the operating income of International Carriers & Shared Services between 2022 and 2023 was mainly attributable to:
− (i) the increase in specific labor expenses, mainly associated with French part-time for seniors plans and the related bonuses (see Section 3.1.1.3 Significant events - Effect of French pension reform), (ii) the increase in depreciation and amortization of fixed assets, (iii) the decrease in gains on disposal of fixed assets, mainly due to the decrease in disposals of real estate assets, and (iv) the increase in restructuring programs costs;
− partially offset by (i) the growth in EBITDAaL excluding interest on lease liabilities (with no effect on operating income) and (ii) the decrease in acquisition and integration costs.
3.1.3.6.4 Economic CAPEX - International Carriers & Shared Services
Change on a historical basis
On a historical basis, the decrease of 53 million euros in the economic CAPEX of International Carriers & Shared Services between 2022 and 2023 stems from the organic change on a comparable basis, i.e. a decrease of 53 million euros in economic CAPEX.
Change on a comparable basis
On a comparable basis, the decrease of 53 million euros in the economic CAPEX of International Carriers & Shared Services between 2022 and 2023 mainly reflects the counter-effect of the recognition in 2022 of investments by Orange Marine for the construction of the new cable-laying ship, the Sophie Germain (see Section 1.3 Highlights).
3.1.3.7 Mobile Financial Services
Mobile Financial Services (at December 31, in millions of euros) |
2023 |
2022 on a comparable basis (1) |
2022 on a historical basis |
Change (%) on a comparable basis |
Change (%) on a historical basis |
Net banking income (NBI) (2) |
150 |
115 |
115 |
29.6% |
29.6% |
Cost of bank credit risk (3) |
(63) |
(45) |
(45) |
39.5% |
39.5% |
Operating income |
(306) |
(200) |
(200) |
(53.1)% |
(53.1)% |
eCAPEX (1) |
33 |
35 |
35 |
(8.3)% |
(8.3)% |
Investments in property, plant and equipment and intangible assets |
33 |
35 |
35 |
(8.3)% |
(8.3)% |
Average number of employees |
852 |
902 |
902 |
(5.5)% |
(5.5)% |
(1) See Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary.
(2) Net banking income (NBI) recognized as other operating income (see Notes 1.3, 1.4 and 4.2 to the Consolidated Financial Statements).
(3) Cost of bank credit risk recognized in other operating expenses (see Notes 1.3, 1.4 and 5.2 to the Consolidated Financial Statements).
In 2023, Mobile Financial Services activities continued to grow, particularly:
− in Europe, with the ongoing development of value offers and the continuous improvement in quality of service. At December 31, 2023, Orange Bank had nearly 1.9 million customers in France and Spain (this number includes customers of all offers sold by Orange Bank for individuals, professionals and businesses: accounts, loans and mobile insurance);
− and in Africa, with the launch of new Prestige loans and real estate loans and steady growth in business loans and microcredit. At December 31, 2023, Orange Bank Africa had 1.3 million customers.
As part of a strategic review of its assets, Orange, after seeking a partner for its banking subsidiary, announced in late June 2023 that it was entering into exclusive negotiations with BNP Paribas to define a partnership for the referral of Orange Bank’s client portfolio in France, develop mobile terminal financing solutions, and discuss the terms of a potential resumption of Orange Bank’s activity in Spain. At the end of these negotiations, Orange Bank announced in late February 2024 a partnership with BNP Paribas to offer a banking continuity solution for its clients in France and Spain. This partnership was formalized by the signing of several agreements (see Section 3.1.1.3 Significant events).
3.1.3.7.1 Operating activities
The segment information for Mobile Financial Services (operating income, investments in property, plant and equipment and intangible assets) is presented in Notes 1.3, 1.4 and 1.6 to the Consolidated Financial Statements.
3.1.3.7.1.1 Operating income - Mobile Financial Services
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the decrease of 106 million euros in the operating income of Mobile Financial Services between 2022 and 2023 was mainly due to:
− (i) the recognition, in 2023, of a provision of 122 million euros for restructuring costs in connection with the termination of Orange Bank activities (see Section 3.1.1.3 Significant events and 2023 Highlights of the Consolidated Financial Statements and Note 5.3 to the Consolidated Financial Statements), and (ii) to a lesser extent, the increase in the cost of bank credit risk (see Notes 1.3, 1.4 and 5.2 to the Consolidated Financial Statements);
− partially offset by (i) the increase in net banking income (NBI, see Notes 1.3, 1.4 and 4.2 to the Consolidated Financial Statements), driven by the increase in interest on banking investments in the context of rising interest rates, and the development of banking activities in Côte d’Ivoire, and (ii) the reduction in the depreciation and amortization of fixed assets.
3.1.3.7.1.2 Economic CAPEX - Mobile Financial Services
Change on a historical basis and on a comparable basis
On both a historical basis and a comparable basis, the decrease of 3 million euros in the economic CAPEX of Mobile Financial Services between 2022 and 2023 was mainly due to the decrease in IT investments.
3.1.3.7.2 Assets, liabilities and cash flows
The segment information for Mobile Financial Services (assets, liabilities and cash flows) is presented in Notes 1.7, 1.8 and 1.9 to the Consolidated Financial Statements, and the activities of Mobile Financial Services (financial assets and liabilities) are described in Note 17 to the Consolidated Financial Statements.
Since 2020, Orange Espagne has had in place a non-recourse program with Orange Bank for the disposal of receivables due in installments, replacing an existing program with a third-party bank. This program led to these receivables being derecognized from the balance sheet of Orange Espagne (within telecom activities) and presented as customer loans and receivables within Mobile Financial Services activities (see Notes 4.3 and 17.1.1 to the Consolidated Financial Statements).
Loans and receivables of Orange Bank are composed of loans and receivables with customers and credit institutions. Outstanding customer loans and receivables at December 31, 2023 came to 2.4 billion euros, a decrease of 123 million euros compared with December 31, 2022, due to the slowdown of commercial activity in France. Loans to B2C customers made up 97.6% of that total. 57.1% were consumer loans (see Note 17.1.1 to the Consolidated Financial Statements).
Payables related to Orange Bank transactions are composed of customer deposits and bank’s payables with credit institutions. Outstanding payables to customers (deposits and savings) at December 31, 2023 amounted to 2.6 billion euros, up 814 million euros compared with December 31, 2022 (see Note 17.1.2 to the Consolidated Financial Statements).
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.4 Cash flow, equity and financial debt
To ensure the transparency of the financial statements and separate out the performance of telecom activities and Mobile Financial Services activities, the analysis and financial commentary are split to reflect these two business scopes. Accordingly, Section 3.1.4.1 Liquidity and cash flows from telecom activities and Section 3.1.4.2 Financial debt and liquidity position of telecom activities deal with telecom activities, and Section 3.1.3.7 Mobile Financial Services covers the Group’s banking activities.
3.1.4.1 Liquidity and cash flows from telecom activities
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.4.1.2 Cash flows from telecom activities
Cash flows from telecom activities are presented in Note 1.9 to the Consolidated Financial Statements.
Simplified statement of cash flows from telecom activities (1) (at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
Net cash provided by operating activities |
12,480 |
11,921 |
Net cash used in investing activities |
(7,297) |
(10,625) |
Net cash used in financing activities |
(5,557) |
(3,577) |
Cash change in cash and cash equivalents |
(374) |
(2,281) |
Cash and cash equivalents in the opening balance |
5,846 |
8,188 |
Cash change in cash and cash equivalents |
(374) |
(2,281) |
Non-cash change in cash and cash equivalents |
32 |
(61) |
Cash and cash equivalents in the closing balance |
5,504 |
5,846 |
(1) See Note 1.9 to the Consolidated Financial Statements.
3.1.4.1.2.1 Net cash provided by operating activities (telecom activities)
Net cash provided by operating activities (telecom activities) was 12,480 million euros in 2023, versus 11,921 million euros in 2022 on a historical basis.
In 2023, Orange pursued its policy of managing its working capital requirement. The effects on the change in working capital requirement (i) of the receivables disposal program, and (ii) the extended payment terms on the payables of certain suppliers of goods and services and fixed assets, are respectively described in Notes 4.3 and 5.6 to the Consolidated Financial Statements.
Change in net cash provided by operating activities (telecom activities) - 2023 vs. 2022 (at December 31, in millions of euros) |
Decrease/ (Increase) |
Net cash provided by operating activities in 2022 |
11,921 |
Increase (decrease) in operating income from telecom activities |
274 |
Change in working capital requirement |
603 |
Decrease (increase) in operating taxes and levies paid |
236 |
Decrease (increase) in net interest paid and interest rate effects on derivatives, net (net of dividends received) |
(43) |
Decrease (increase) in income tax paid |
(95) |
Change in non-monetary items included in operating income and reclassified items for presentation (1) |
(415) |
Net cash provided by operating activities in 2023 |
12,480 |
(1) Reclassified items for presentation include the elimination of operating taxes and levies included in operating income and presented separately above.
Between 2022 and 2023, the increase of 559 million euros in net cash provided by operating activities (telecom activities) on a historical basis was largely attributable to:
− the change in working capital requirement of 603 million euros between the two periods, mainly due to the decrease in trade receivables in 2023, compared with an increase in trade receivables in 2022;
− the increase of 274 million euros in operating income from telecom activities on a historical basis;
− and the decrease of 236 million euros in operating taxes and levies paid, mainly relating to the decrease in business value added tax (cotisation sur la valeur ajoutée des entreprises - CVAE), the main component of the territorial economic contribution (contribution économique territoriale - CET), in France (see Note 10.1 to the Consolidated Financial Statements);
− partially offset by (i) the change of 415 million euros in non-monetary items included in operating income and reclassified items for presentation between the two periods, mainly with the counter-effect of the recognition in 2022 of the impairment of goodwill in Romania and with the increase in depreciation and amortization of fixed assets, and (ii) to a lesser extent, the increase of 95 million euros in income tax paid.
3.1.4.1.2.2 Net cash used in investing activities (telecom activities)
The net cash used in investing activities (telecom activities) represented a negative 7,297 million euros in 2023, compared with a negative 10,625 million euros in 2022 on a historical basis.
Net cash used in investing activities (telecom activities) (at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
Purchases and sales of property, plant and equipment and intangible assets (1) (5) |
(7,594) |
(8,251) |
Purchases of property, plant and equipment and intangible assets paid (1) |
(7,910) |
(8,576) |
Purchases of property, plant and equipment and intangible assets |
(7,797) |
(8,742) |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] | ||
Elimination of proceeds from sales of property, plant and equipment and intangible assets (3) |
(292) |
(347) |
Telecommunication licenses |
(721) |
(1,060) |
Increase (decrease) in fixed asset payables (4) |
(113) |
166 |
Sales of property, plant and equipment and intangible assets received (5) |
316 |
324 |
Acquisitions and sales of investments securities (6) |
(1,463) |
(84) |
Acquisitions of investments securities (6) |
(1,500) |
(101) |
Acquisition of approximately 75% of VOO by Orange Belgium (7) |
(1,373) |
- |
Acquisition of 54% of Telekom Romania Communications (TKR, renamed Orange Romania Communications) (8) |
- |
11 |
Other acquisitions |
(126) |
(112) |
Disposals of investments securities (6) |
37 |
17 |
Disposal of 50% of Światlowód Inwestycje (FiberCo in Poland) (8) |
25 |
18 |
Disposal of 50% of Orange Concessions (8) |
- |
(8) |
Other disposals |
12 |
7 |
Other decreases (increases) in investments and other financial assets |
1,760 |
(2,289) |
Investments at fair value (excluding cash equivalents) |
1,837 |
(2,256) |
Other |
(78) |
(33) |
Net cash used in investing activities |
(7,297) |
(10,625) |
(1) Net of the change in fixed asset payables. Furthermore, financed assets have no effect on net cash flows when acquired (see Section 3.1.2.5 Group capital expenditure and Notes 1.6 and 8.5 to the Consolidated Financial Statements).
(2) [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
(3) Elimination of proceeds from sales of property, plant and equipment and intangible assets included in economic CAPEX (eCAPEX).
(4) Including investing donations received in advance.
(5) Net of change in receivables and advances on disposals of fixed assets.
(6) Investments securities (i) in subsidiaries (net of cash acquired or transferred), (ii) in associates and joint ventures, and (iii) measured at fair value.
(7) See Section 3.1.1.3 Significant events.
(8) See Note 3.2 to the Consolidated Financial Statements.
Between 2022 and 2023, the decrease of 3,328 million euros in net cash used in investing activities (telecom activities) on a historical basis is largely attributable to:
− the change in investments and other financial assets between the two periods (mainly investments at fair value), with a decrease of 1,760 million euros in 2023, compared with an increase of 2,289 million euros in 2022, due to the Group’s active cash management policy;
− and the decrease of 666 million euros in purchases of property, plant and equipment and intangible assets (net of the change in fixed asset trade payables), mainly due to:
- the decrease in telecommunication licenses paid, primarily with (i) the counter-effect of the amounts paid for 5G licenses in Belgium, France and Romania and for 4G licenses in Egypt and Poland in 2022, (ii) partially offset by amounts paid for 5G licenses in Belgium and 4G licenses in Egypt in 2023 (see Section 3.1.2.5.1.2 Telecommunication licenses),
- [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
− partially offset by the acquisition, in 2023, of around 75% of VOO by Orange Belgium for 1,373 million euros net of cash acquired (see Section 3.1.1.3 Significant events).
3.1.4.1.2.3 Net cash used in financing activities (telecom activities)
Net cash flows related to the financing of telecom activities were a negative 5,557 million euros in 2023, versus a negative 3,577 million euros in 2022 on a historical basis.
Net cash used in financing activities (telecom activities) (at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
Change in medium and long-term debt (1) |
(1,153) |
721 |
Medium and long-term debt issuances |
1,442 |
1,809 |
Medium and long-term debt redemptions and repayments |
(2,595) |
(1,088) |
Repayment of lease liabilities |
(1,652) |
(1,514) |
Increase (decrease) of bank overdrafts and short-term borrowings (1) |
164 |
(367) |
Net change in cash collateral deposits (1) |
(470) |
673 |
Exchange rate effects on derivatives, net |
5 |
(91) |
Subordinated notes issuances (purchases) and other related fees (2) (3) |
177 |
(451) |
Coupon on subordinated notes (2) (3) |
(177) |
(213) |
Proceeds (purchase) of treasury shares (2) |
(15) |
14 |
Capital increase (decrease) (2) |
(198) |
(173) |
Capital increase (decrease) of owners of the parent company |
- |
- |
Capital increase (decrease) - Non-controlling interests |
2 |
0 |
Capital increase (decrease) - Telecom activities/Mobile Financial Services |
(200) |
(173) |
Changes in ownership interests with no gain or loss of control |
(9) |
(11) |
Dividends paid (2) |
(2,230) |
(2,164) |
Dividends paid to owners of the parent company (3) |
(1,862) |
(1,861) |
Dividends paid to non-controlling interests |
(368) |
(304) |
Net cash used in financing activities |
(5,557) |
(3,577) |
(1) See Note 13 to the Consolidated Financial Statements.
(2) See Note 15 to the Consolidated Financial Statements.
(3) See Section 3.1.4.3Equity.
Between 2022 and 2023, the increase of 1,980 million euros in net cash flows related to the financing of telecom activities is largely attributable to:
− the change of cash collateral deposits (with a decrease of 470 million euros in 2023 compared with an increase of 673 million euros in 2022), reflecting the change in the fair value of derivatives used for hedging the Group’s bonds (see Notes 13.8 and 14.5 to the Consolidated Financial Statements);
− and the change in medium and long-term borrowings, with (i) an increase of 1,507 million euros in debt repayments, and (ii) a decrease of 367 million euros in debt issuances (see Notes 13.5 and 13.6 to the Consolidated Financial Statements);
− partially offset by:
- the change in issuances, redemptions and other expenses on subordinated notes, with net issuances of 177 million euros in 2023 compared with net redemptions of 451 million euros in 2022 (see Note 15.4 to the Consolidated Financial Statements),
- and the change in bank overdrafts and short-term borrowings, with a 164 million euro increase in 2023, compared with a 367 million euro decrease in 2022, primarily related to the change in the use of negotiable debt securities (NEU Commercial Paper).
3.1.4.2 Financial debt and liquidity position of telecom activities
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.4.2.1 Net financial debt
Net financial debt (see Note 13.3 to the Consolidated Financial Statements) * [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] are financial indicators not defined by IFRS. For further information on the calculation of these indicators and the reasons why the Orange group uses them, see Section 3.1.5 Financial indicators not defined by IFRS and Section 7.2.1 Financial glossary. Net financial debt as defined and used by Orange does not take into account Mobile Financial Services activities, for which this concept is not relevant.
(at December 31) |
2023 |
2022 on a historical basis |
Net financial debt (1) (2) |
27,002 |
25,298 |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] |
(1) See Section 3.1.5 Financial indicators not defined by IFRS.
(2) In millions of euros.
Between December 31, 2022 and December 31, 2023, the net financial debt increased by 1,704 million euros, mainly due to the effect of the takeover of VOO by Orange Belgium (see Section 3.1.1.3 Significant events).
Change in net financial debt - 2023 vs. 2022 (at December 31, in millions of euros) |
Decrease/ (Increase) |
Net financial debt at December 31, 2022 |
(25,298) |
* [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED] | |
Net impact of changes in the scope of consolidation (2) |
(1,959) |
Subordinated notes issuances (purchases) and other related fees (3) (4) |
(22) |
Dividends paid to owners of the parent company (3) |
(1,862) |
Dividends paid to non-controlling interests |
(368) |
Other financial items (5) |
(433) |
Decrease (increase) in net financial debt |
(1,704) |
Net financial debt at December 31, 2023 |
(27,002) |
(1) [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
(2) Mainly the effect of the takeover of VOO by Orange Belgium (see Section 3.1.1.3 Significant events), comprising for the most part (i) an investment of 1,373 million net of cash acquired, and (ii) Orange’s promise to Nethys to buy out majority shareholders for 279 million euros, and (iii) the consolidation of the entity’s gross debt.
(3) See Section 3.1.4.3 Equity and Note 15 to the Consolidated Financial Statements.
(4) Including 198 million euros reclassified as short-term borrowings (see Notes 13.3 and 15.4 to the Consolidated Financial Statements).
(5) Including (i) the capital increase of Orange Bank subscribed by the Group for 200 million euros (see Note 1.9 to the Consolidated Financial Statements), (ii) the change in debt on financed assets, and (iii) the change in foreign exchange fluctuations and derivatives, accrued interest not yet due and amortized cost.
3.1.4.2.2 Management of financial debt and liquidity position
Financial assets, liabilities and financial results of telecom activities and information relating to market risks and the fair value of the financial assets and liabilities of telecom activities are described in Notes 13 and 14, respectively, to the Consolidated Financial Statements.
At December 31, 2023, the liquidity position of telecom activities amounted to 14,302 million euros and exceeded the repayment obligations of gross financial debt in 2024. At December 31, 2023, the liquidity position of telecom activities comprised (i) 6,120 million euros available to be drawn on credit lines, (ii) cash and cash equivalents of 5,504 million euros and (iii) investments at fair value of 2,678 million euros (see Note 14.3 to the Consolidated Financial Statements).
3.1.4.2.3 Exposure to market risks and financial instruments
The management of interest rate risk, foreign exchange risk, liquidity risk, credit risk and counterparty risk, financial ratios and equity market risk, is described in Note 14 to the Consolidated Financial Statements.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.4.2.4 Change in Orange’s credit rating
Orange’s credit rating is an additional overall performance indicator used to assess the Group’s financial policy and risk management policy and, in particular, its solvency and liquidity risk. It is not a substitute for an analysis carried out by investors. Rating agencies regularly review the ratings they award. Any change in the rating could affect the cost of future financing or access to liquidity.
In addition, a change in Orange’s credit rating will, for some outstanding financing, affect the compensation paid to investors via Step-up clauses (a clause that triggers an increase in the coupon interest rate in the event of a downgrade of Orange’s long-term credit rating by the rating agencies, according to contractually defined rules - this clause may also stipulate a downward revision of the coupon interest rate in the event of an improvement in the rating, as long as the interest rate does not drop below the initial interest rate on the loan - see Note 14.3 to the Consolidated Financial Statements).
Orange’s credit rating at December 31, 2023 is as follows:
Orange’s credit rating (at December 31, 2023) |
Standard & Poor’s |
Moody’s |
Fitch Ratings |
Long-term debt |
BBB+ |
Baa1 |
BBB+ |
Outlook |
Stable |
Positive |
Stable |
Short-term debt |
A2 |
P2 |
F2 |
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.4.3 Equity
At December 31, 2023, the French State held 22.95% of the share capital of Orange SA and 28.95% of the voting rights, directly or in concert with Bpifrance Participations (see Note 15 to the Consolidated Financial Statements).
The payment of dividends by Orange took place as follows (see Note 15.3 to the Consolidated Financial Statements):
− in 2023, payment of (i) the balance of the dividend of 0.40 euros per share for the 2022 fiscal year, and (ii) the interim dividend of 0.30 euros per share for the 2023 fiscal year;
− in 2022, payment of (i) the balance of the dividend of 0.40 euros per share for the 2021 fiscal year, and (ii) the interim dividend of 0.30 euros per share for the 2022 fiscal year.
Additionally, Orange has not exercised its right to defer the coupon payment for the subordinated notes since their issuance (see Note 15.4 to the Consolidated Financial Statements) and accordingly paid the noteholders compensation of 185 million euros in 2023 (including 177 million euros paid and 8 million euros reclassified as short-term borrowings) and 215 million euros in 2022 (including 213 million euros paid and 2 million euros reclassified as short-term borrowings).
Following the transactions on subordinated notes in 2023, the Group’s outstanding subordinated notes amounted to 4,950 million euros at December 31, 2023 (see Note 15.4 to the Consolidated Financial Statements).
Capital management is described in Note 14.8 to the Consolidated Financial Statements. Changes in equity are described in the consolidated statement of changes in shareholders’ equity and in Note 15 to the Consolidated Financial Statements.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
3.1.5 Financial indicators not defined by IFRS
In this document, in addition to the financial indicators reported in accordance with IFRS (International Financial Reporting Standards), Orange publishes financial indicators not defined by IFRS. As described below, these figures are presented as additional information and are not meant to be substitutes for, or to be confused with, the financial indicators as defined by IFRS.
3.1.5.1 Data on a comparable basis
In order to allow investors to track the annual changes in the Group’s operations, data on a comparable basis are presented for the previous period. The transition from data on a historical basis to data on a comparable basis consists of keeping the results for the fiscal year ended and restating the results for the corresponding period in the previous fiscal year, in order to present financial data with comparable methods, scope of consolidation and exchange rates over comparable periods. Orange provides details of the effect of changes in method, scope of consolidation and exchange rates on its key operating indicators in order to isolate the intrinsic business effect. The method used is to apply to the data of the corresponding period of the previous fiscal year the methods and the scope of consolidation for the period just ended, as well as the average exchange rates used for the consolidated income statement in the Consolidated Financial Statements for the period just ended.
Orange’s management believes that the presentation of these indicators on a comparable basis is relevant because these are indicators used internally by the Group to monitor its operating activities. Changes on a comparable basis better reflect organic business changes.
Data on a comparable basis are financial indicators not defined by IFRS and may not be comparable to similarly titled indicators used by other groups. It is provided as additional information only and should not be considered a substitute for an analysis of the Group’s historical data for the past fiscal year or previous periods.
3.1.5.1.1 2022 fiscal year - Group
The following table presents, for the Orange group, the transition from data on a historical basis to data on a comparable basis for the key operating data for fiscal year 2022.
2022 fiscal year - Group (at December 31, 2022, in millions of euros) |
Revenue |
Operating income |
eCAPEX (1) |
Investments in property, plant and equipment and intangible assets (IFRS Measure) |
Average number of employees | |
Data on a historical basis |
43,471 |
4,801 |
7,371 |
9,007 |
130,307 | |
Foreign exchange fluctuations (2) |
(461) |
(80) |
(93) |
(220) |
- | |
Egyptian pound (EGP) |
(380) |
(70) |
(74) |
(201) |
- | |
US dollar (USD) |
(43) |
(16) |
(4) |
(6) |
- | |
Leone (SLE) |
(34) |
(4) |
(9) |
(9) |
- | |
Moroccan dirham (MAD) |
(16) |
(1) |
(4) |
(4) |
- | |
Botswanan pula (BWP) |
(13) |
(4) |
(3) |
(3) |
- | |
Norwegian krone (NOK) |
(13) |
1 |
(3) |
(3) |
- | |
Jordanian dinar (JOD) |
(12) |
(2) |
(2) |
(4) |
- | |
Polish zloty (PLN) |
82 |
8 |
11 |
15 |
- | |
Other |
(32) |
8 |
(5) |
(5) |
- | |
Changes in the scope of consolidation and other changes |
322 |
(60) |
25 |
25 |
799 | |
Acquisition/Takeover of VOO (3) |
281 |
7 |
72 |
72 |
679 | |
Acquisition of SCRT and Telsys by Orange Cyberdefense |
32 |
- |
(1) |
- |
- |
82 |
Acquisition of NEHS Digital and Xperis by Enovacom (3) |
10 |
(2) |
- |
- |
73 | |
Elimination of the gain on disposal relating to Deezer (4) |
- |
- |
(77) |
- |
- |
- |
Other |
(1) |
13 |
(47) |
(47) |
(35) | |
Data on a comparable basis |
43,332 |
4,661 |
7,303 |
8,812 |
131,107 |
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(2) Foreign exchange fluctuations between the average exchange rates for the 2022 fiscal year and the average exchange rates for the 2023 fiscal year.
(3) See Section 3.1.1.3 Significant events.
(4) See Note 3.2 to the Consolidated Financial Statements.
The changes included in the transition from data on a historical basis to data on a comparable basis for the 2022 fiscal year include:
− foreign exchange fluctuations between the average exchange rates for the 2022 fiscal year and the average exchange rates for the 2023 fiscal year;
− and changes in the scope of consolidation and other changes, mainly including:
- the takeover of VOO by Orange Belgium (Europe segment) on June 2, 2023 (see Section 3.1.1.3 Significant events and Note 3.2 to the Consolidated Financial Statements), effective as of June 1, 2022 on a comparable basis,
- the acquisitions of SCRT and Telsys by Orange Cyberdefense (Orange Business segment) on November 8, 2022, effective as of January 1, 2022 on a comparable basis,
- the acquisitions of NEHS Digital and Xperis by Enovacom (Orange Business segment) on September 20, 2023 (see Section 3.1.1.3 Significant events), effective as of October 1, 2022 on a comparable basis,
- and the gain on disposal related to the remeasurement of Deezer shares at fair value following the merger of Deezer into the SPAC I2PO, and the initial public offering of the new entity in July 2022 (International Carriers & Shared Services segment), recognized as a review of fixed assets, investments and business portfolio in 2022 (see Note 3.2 to the Consolidated Financial Statements) and eliminated in the data on a comparable basis.
3.1.5.1.2 2022 fiscal year - Segments
The following table presents, for each segment of the Orange group, the transition from data on a historical basis to data on a comparable basis for the key operating data for fiscal year 2022.
2022 fiscal year - Segments (at December 31, 2022, in millions of euros) |
Revenue |
Operating income |
eCAPEX (1) |
Investments in property, plant and equipment and intangible assets (IFRS Measure) |
Average number of employees | |
France | ||||||
Data on a historical basis |
17,983 |
3,361 |
3,429 |
3,793 |
46,282 | |
Foreign exchange fluctuations (2) |
- |
2 |
- |
- |
- | |
Changes in the scope of consolidation and other changes (3) |
(5) |
(35) |
(47) |
(47) |
(20) | |
Data on a comparable basis |
17,977 |
3,328 |
3,382 |
3,746 |
46,262 | |
Europe | ||||||
Data on a historical basis |
10,962 |
(177) |
1,883 |
2,612 |
27,605 | |
Foreign exchange fluctuations (2) |
84 |
11 |
11 |
15 |
- | |
Changes in the scope of consolidation and other changes (3) |
281 |
16 |
72 |
72 |
676 | |
Acquisition/Takeover of VOO (4) |
281 |
7 |
72 |
72 |
679 | |
Other changes (3) |
0 |
9 |
0 |
0 |
(3) | |
Data on a comparable basis |
11,327 |
(151) |
1,966 |
2,700 |
28,281 | |
Africa & Middle East | ||||||
Data on a historical basis |
6,918 |
1,665 |
1,271 |
1,747 |
14,436 | |
Foreign exchange fluctuations (2) |
(495) |
(104) |
(98) |
(229) |
- | |
Changes in the scope of consolidation and other changes (3) |
(0) |
28 |
(0) |
(0) |
9 | |
Data on a comparable basis |
6,423 |
1,589 |
1,172 |
1,518 |
14,444 | |
Orange Business | ||||||
Data on a historical basis |
7,930 |
317 |
332 |
344 |
28,786 | |
Foreign exchange fluctuations (2) |
(59) |
2 |
(6) |
(6) |
- | |
Changes in the scope of consolidation and other changes (3) |
41 |
2 |
0 |
0 |
(14) | |
Acquisition of SCRT and Telsys by Orange Cyberdefense |
32 |
- |
(1) |
- |
- |
82 |
Acquisition of NEHS Digital and Xperis by Enovacom (4) |
10 |
(2) |
- |
- |
73 | |
Other changes (3) |
(1) |
5 |
0 |
0 |
(169) | |
Data on a comparable basis |
7,912 |
321 |
326 |
338 |
28,772 | |
Totem | ||||||
Data on a historical basis |
685 |
252 |
142 |
142 |
165 | |
Foreign exchange fluctuations (2) |
- |
- |
- |
- |
- |
- |
Changes in the scope of consolidation and other changes (3) |
- |
- |
- |
- |
- |
- |
Data on a comparable basis |
685 |
252 |
142 |
142 |
165 | |
International Carriers & Shared Services | ||||||
Data on a historical basis |
1,540 |
(417) |
278 |
333 |
12,134 | |
Foreign exchange fluctuations (2) |
(3) |
10 |
(0) |
(0) |
- | |
Changes in the scope of consolidation and other changes (3) |
(1) |
(71) |
0 |
0 |
148 | |
Elimination of gains (losses) on disposal relating to Deezer (5) |
- |
- |
(77) |
- |
- |
- |
Other changes (3) |
(1) |
6 |
0 |
0 |
148 | |
Data on a comparable basis |
1,536 |
(478) |
278 |
333 |
12,282 | |
Mobile Financial Services | ||||||
Data on a historical basis |
- |
(200) |
35 |
35 |
902 | |
Foreign exchange fluctuations (2) |
- |
- |
- |
- |
- | |
Changes in the scope of consolidation and other changes (3) |
- |
- |
- |
- |
- |
- |
Data on a comparable basis |
- |
(200) |
35 |
35 |
902 |
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(2) Foreign exchange fluctuations between the average exchange rates for the 2022 fiscal year and the average exchange rates for the 2023 fiscal year.
(3) Including the effect of internal reorganizations between segments, which have no effect at Group level.
(4) See Section 3.1.1.3 Significant events.
(5) See Note 3.2 to the Consolidated Financial Statements.
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3.1.5.3 eCAPEX
eCAPEX (or "economic CAPEX") relates both to (i) investments in property, plant and equipment and intangible assets, excluding telecommunication licenses and financed assets, less the price of disposal of fixed assets, and (ii) purchases of property, plant and equipment and intangible assets excluding telecommunication licenses and changes in fixed asset payables, less the price of disposal of fixed assets.
The table below shows the transition from (i) investments in property, plant and equipment and intangible assets as presented in Note 1.6 to the Consolidated Financial Statements, and (ii) purchases of property, plant and equipment and intangible assets, excluding the change in fixed asset payables, as presented in the consolidated statement of cash flows, to (iii) eCAPEX.
(at December 31, in millions of euros) |
2023 |
2022 on a historical basis |
Investments in property, plant and equipment and intangible assets |
8,062 |
9,007 |
Financed assets |
(233) |
(229) |
Purchases of property, plant and equipment and intangible assets (1) |
7,829 |
8,777 |
Price of disposal of fixed assets |
(292) |
(347) |
Telecommunication licenses |
(721) |
(1,060) |
eCAPEX |
6,815 |
7,371 |
(1) See the consolidated statement of cash flows. Excluding the change in fixed asset payables. Financed assets have no effect on net cash flows upon acquisition.
Orange’s management believes that the presentation of eCAPEX is relevant because this indicator (i) does not include investments in telecommunication licenses (the acquisition of these licenses is not part of the daily monitoring of operating investments) and financed assets (no effect on net cash flows upon acquisition), and (ii) allows, in a context of asset rotation primarily linked to the fiber optic economic model, more accurate measurement of the actual amount of investments by excluding the price of disposal of fixed assets. It is the indicator used internally by the Group in allocating resources, in order to measure the operating efficiency of the use of investments for each of its business segments.
eCAPEX is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups. It is provided as additional information only and should not be considered a substitute for purchases of property, plant and equipment and intangible assets, or investments in property, plant and equipment and intangible assets.
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3.1.5.7 Net financial debt
Net financial debt as defined and used by Orange does not take into account Mobile Financial Services activities, for which this concept is not relevant. It consists of (i) financial liabilities excluding operating payables (translated into euros at the year-end closing rate) including derivative instruments (assets and liabilities), (ii) less cash collateral paid, cash, cash equivalents and financial assets at fair value. Furthermore, financial instruments designated as cash flow hedges included in net financial debt are set up to hedge items that are not included therein, such as future cash flows. As a result, the portion relating to these unmatured hedging instruments recorded in other comprehensive income is added to gross financial debt to offset this temporary difference.
The breakdown of net financial debt is shown in Note 13.3 to the Consolidated Financial Statements.
Net financial debt is an indicator of financial position used by the Group. Net financial debt is a frequently disclosed indicator. It is widely used by analysts, investors, rating agencies and most groups in all business sectors in Europe.
Net financial debt is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups. It is provided as additional information only and should not be considered a substitute for an analysis of all assets and liabilities.
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3.1.6 Additional information
Unrecognized contractual commitments
Unrecognized contractual commitments are described in Notes 16 and 17.3 to the Consolidated Financial Statements.
Fees paid to the statutory auditors
Fees paid to the statutory auditors of Orange SA and its networks for fully consolidated entities are presented in Note 21 of the appendix to the consolidated financial statements.
Services other than certification of the financial statements include assurance services, in particular in respect of non-financial performance reporting, other services required by law and other permissible services (in particular attestation engagements and agreed-upon procedures).
3.2 Recent events and financial objectives
3.2.1 Recent events
Creation of the joint venture in Spain with MásMóvil
Orange and MásMóvil announced on March 26, 2024 the creation of a joint venture, which brings together their activities in Spain (excluding Totem Spain and MásMóvil Portugal). The combination of Orange Spain and MásMóvil activities takes the form of an equal joint venture, co-controlled by Orange and MásMóvil, with equal governance rights in the combined entity.
The new company is positioned as one of the leading operators in the Spanish market in terms of customers, user experience, talent and network coverage (fiber and mobile) and a sustainable actor with the financial capacity to continue investing in the development of telecom infrastructure in Spain. It will serve more than 7.3 million fixed customers, more than 30 million mobile services and more than 2.2 million TV customers and will manage important network and IT assets to assure a nationwide FTTH and 4G/5G coverage. In financial terms, it will become a stronger and solid market player with estimated revenues of above 7.4 billion euros and EBITDAaL of over 2.3 billion euros. The company’s value reaches 18.6 billion euros, before synergies. According to revised estimates, the new company is expected to generate synergies of more than 490 million euros per year by the fourth year following the completion of the operation. Based on preliminary closing accounts, the respective proceeds at closing will be approximately 4.4 billion euros for Orange and approximately 1.65 billion euros for MásMóvil shareholders.
This transaction was made possible by the European Commission’s authorization on February 20, 2024, and the Spanish government’s agreement on March 12, 2024 to control foreign investment. As part of the proposed remedies, the parties have agreed to cede frequencies to Digi in three spectrum bands and proposed an optional national roaming agreement at market conditions.
The new company will be operational from the beginning of the second quarter and will be accounted for by the equity method in the Orange Group financial statements. Jean François Fallacher, Executive Director in charge of Orange France, has been appointed non-executive Chairman of the joint venture and Meinrad Spenger as its Chief Executive Officer.
New issue and tender offer of subordinated notes
Orange issued on March 27, 2024 700 million euros undated deeply subordinated fixed to reset rate notes with a first call date as of 15 December 2030 and with a fixed coupon of 4.50% until the first reset date and launched a tender offer up to the same amount to repurchase existing Euro-denominated hybrid notes.
TDIRA
Following a Buyback, as of March 28, 2024, 43,813 TDIRAs remain outstanding for a total par value of 618 million euros.
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5. Corporate Governance
5.1 Composition of management and supervisory bodies
5.1.1 Board of Directors
On March 27, 2024, the date on which the Board of Directors approved the Report on Corporate Governance, the Board comprised 15 individually appointed members: seven Independent Directors elected by Orange’s Shareholders’ Meeting, including the Chairman of the Board of Directors; the non-independent Chief Executive Officer; three Directors representing the public sector, one of whom was appointed by Ministerial Order; three Directors elected by employees; and one Director representing employee shareholders appointed through an internal process and then voted on by Orange’s shareholders.
Chairman of the Board of Directors
Date first appointed |
Term ending | |
Jacques Aschenbroich |
May 19, 2022 |
At the close of the 2026 Shareholders’ Meeting |
Jacques Aschenbroich, born in 1954, has been Chairman of the Orange Board of Directors since May 19, 2022. He was Director and Chief Executive Officer of the Valeo group from March 20, 2009 until February 18, 2016, Chairman and Chief Executive Officer until January 26, 2022, then Chairman of the Valeo Board of Directors from January 27, 2022 until December 31, 2022. He is now Honorary Chairman of Valeo. Before joining Valeo, he held several positions in the French government and served in the Prime Minister’s office in 1987 and 1988. He then pursued a business career at the Saint-Gobain group from 1988 to 2008. Having managed subsidiaries in Brazil and Germany, he became Managing Director of the flat glass division of Compagnie de Saint-Gobain and went on to become Chairman of Saint-Gobain Vitrage in 1996. As Deputy Chief Executive Officer of Compagnie de Saint-Gobain from October 2001 to December 2008, he managed flat glass and high-performance materials from January 2007 and, as the Director of Saint-Gobain Corporation and General Delegate to the United States and Canada, he directed the Group’s operations in the United States from September 1, 2007. He is also a Director of BNP Paribas, Lead Director of TotalEnergies, Chairman of the Board of Directors of École Nationale Supérieure Mines ParisTech, and Co-Chairman of the Franco-Japanese Business Club. Jacques Aschenbroich is an Ingénieur diplômé du Corps des Mines. Jacques Aschenbroich is an Officer of the French Order of Merit and the French Legion of Honor. He is a French national.
Chief Executive Officer and Non-Independent Director
Date first appointed |
Term ending | |
Christel Heydemann |
July 26, 2017 (1) |
At the close of the 2024 Shareholders’ Meeting |
(1) Co-opted as Director by the Board of Directors on July 26, 2017 to replace José-Luis Durán. Term of office ratified by the Shareholders’ Meeting of May 4, 2018 and renewed by the Shareholders’ Meeting of May 19, 2020. Based on the recommendation of the GCSERC, and over and above the criteria set out in Article 10.5 of the Afep-Medef Code, the Board of Directors, at its meeting of February 16, 2022, deemed that Christel Heydemann, appointed Chief Executive Officer with effect from April 4, 2022, could no longer be considered an Independent Director.
Christel Heydemann, born in 1974, was appointed Chief Executive Officer of the Orange group on April 4, 2022. She began her career in 1997 at Boston Consulting Group. In 1999, she joined Alcatel where she held various management positions. In 2011, she was promoted to Director of Human Resources and Transformation and member of the Executive Committee. She joined Schneider Electric in 2014. In 2017, she became Executive Director France Operations of Schneider Electric and member of Schneider Electric’s Executive Committee. In 2021, she was named Director Europe Operations, a position she held until the beginning of 2022 when she became Chief Executive Officer of the Orange group, having served as a member of its Board of Directors since 2017. She is a graduate of École Polytechnique and École Nationale des Ponts et Chaussées. Christel Heydemann is an Officer of the French Order of Merit and a Knight of the French Legion of Honor. She is a French national.
Independent Directors
Date first appointed |
Term ending | ||
Jacques Aschenbroich |
Chairman of the Board of Directors |
May 19, 2022 (1) |
At the close of the 2026 Shareholders’ Meeting |
Valérie Beaulieu |
Member of the Audit Committee |
May 19, 2022 |
At the close of the 2026 Shareholders’ Meeting |
Alexandre Bompard |
Member of the Strategy and Technology Committee |
December 07, 2016 (2) |
At the close of the 2027 Shareholders’ Meeting |
Gilles Grapinet |
Chairman of the Audit Committee |
May 23, 2023 |
At the close of the 2027 Shareholders’ Meeting |
Anne-Gabrielle Heilbronner |
Chairwoman of the GCSERC |
05/21/2019 (3) |
At the close of the 2027 Shareholders’ Meeting |
Momar Nguer |
Member of the GCSERC |
May 23, 2023 |
At the close of the 2027 Shareholders’ Meeting |
Frédéric Sanchez |
Chairman of the Strategy and Technology Committee |
May 19, 2020 |
At the close of the 2024 Shareholders’ Meeting |
(1) Appointed Director by the Shareholders’ Meeting of May 19, 2022 and appointed Chairman of the Board of Directors by the Board of Directors’ Meeting held at the close of the Shareholders’ Meeting of May 19, 2022.
(2) Co-opted by the Board of Directors on December 7, 2016 to replace Bernard Dufau. Term of office ratified by the Shareholders’ Meeting of June 1, 2017 and renewed by the Shareholders’ Meetings of May 21, 2019 and May 23, 2023.
(3) Term of office renewed by the Shareholders’ Meeting of May 23, 2023.
Valérie Beaulieu, born in 1967, has been Chief Sales and Marketing Officer of the Swiss group Adecco since November 16, 2020. This Zurich-based company is the global leader in HR solutions. She is also President of Pontoon - a subsidiary of the Adecco Group specializing in MSP and RPO solutions. Before joining the Adecco Group, Valérie Beaulieu spent more than 30 years in the tech industry in Europe, the United States and Asia. From 1991 to 1996, she was Marketing Director at ECS, the computer leasing subsidiary of Société Générale. As a member of the Executive Committee, she played a strategic role in the merger between ECS and Agena, which became the European leader in business computing in 1995. She then spent more than 20 years at Microsoft, where she led the marketing department in Europe, then managed sales for small and medium business and all partners before becoming Chief Operating Officer of the Advertising division in the United States in 2012. In that role, she was responsible for operations and was the main architect of the partnerships with Yahoo and AOL. After seven years in the Consumer Division, she became General Manager of Small and Midmarket Solutions and Partners in Asia-Pacific before serving, from 2018 to 2020, as Chief Marketing Officer for Microsoft’s US subsidiary, representing 50% of the Group’s worldwide business. Valérie Beaulieu has been a French Foreign Trade Advisor since January 2015, and is now a member of its Swiss Board after serving as Vice President for Innovation and Lead Tech Advisor in Seattle and Singapore. Until June 2022, she was also a Director and member of the Audit and Risk Committee of ISS A/S, a Danish company and one of the world leaders in facility management. Valerie Beaulieu holds a master’s degree in English from the University of Haute-Bretagne, a diploma in International Trade, and a certificate in Business Leadership from the London Business School. She is a French national.
Alexandre Bompard, born in 1972, has been the Chairman and Chief Executive Officer of Carrefour since July 18, 2017. After graduating from the École Nationale d’Administration (ENA), Alexandre Bompard was posted to the Inspectorate General of Finance (1999-2002). Thereafter, he became Technical Advisor to François Fillon, then Minister of Social Affairs, Labor and Solidarity (April to December 2003). From 2004 to 2008, Alexandre Bompard worked in several capacities within the Canal+ group. He was Chief of Staff to Chairman Bertrand Méheut (2004-2005), then Director for Sports and Public Affairs for the Canal+ group (June 2005 to June 2008). In June 2008, he was appointed Chairman and Chief Executive Officer of Europe 1 and Europe 1 Sport. In January 2011, he joined the Fnac group as Chairman and Chief Executive Officer. He then undertook an ambitious transformation plan for the Group, called "Fnac 2015," to meet the challenge of the digital revolution and changes in customer expectations. On June 20, 2013, Alexandre Bompard also led Fnac’s initial public offering. In fall 2015, Fnac launched a takeover bid on the Darty group. On July 20, 2016, he became Chairman and Chief Executive Officer of the new entity made up of Fnac and Darty. Alexandre Bompard is an alumnus of the École Nationale d’Administration (ENA) and a graduate of the Institut d’Études Politiques de Paris. He holds a master’s degree in Public Law and a postgraduate degree in Economics. Alexandre Bompard is a Knight of the French Order of Merit and the French Order of Arts and Letters. He is a French national.
Gilles Grapinet, born in 1963, is Chief Executive Officer of Worldline. After graduating from the École Nationale d’Administration (ENA), Gilles Grapinet began his career at the French Inspectorate General of Finance in 1992. In 1996 he joined the General Tax Directorate (DGI) where, after heading the management control and transformation department, he was appointed Director of Information Systems and Strategy, responsible in particular for France’s Copernic program (digital transformation of tax administration and overhaul of the DGI’s information and payment systems). From 2003 to the end of 2004, he was economic and financial advisor to the Prime Minister, before going on to serve as Chief of Staff to the Minister of the Economy, Finance and Industry from 2005 to May 2007. In September 2007 he joined the Executive Committee of the international banking group Crédit Agricole SA, first as director of strategy and then as head of payment systems and services. In 2008 he joined the international IT services group Atos where he was appointed Senior Executive Vice President in charge of global functions, global sales and consulting. He has served as Chief Executive Officer of Worldline since July 2013, and oversaw the successful partial listing of this former ATOS group subsidiary in June 2014 when it had a market capitalization of approximately 2 billion euros. Since then, Worldline has undergone an ambitious expansion, acquiring Equens in 2016, SIX Payment Services in 2018 and Ingenico in 2020. The company became fully independent from ATOS on May 3, 2019 and is now the number-one ranking electronic payment services company in Europe and number four in the world. It has been included in the CAC40 index since March 2020. Until June 2022, Gilles Grapinet was also the first Chairman of the European Digital Payments Industry Alliance (EDPIA), which represents the interests of independent payment services providers headquartered in Europe. In a non-executive capacity he chairs the Supervisory Board of Younited, an ACPR-approved "fintech" banking institution specializing in consumer credit. Gilles Grapinet is an alumnus of the École Nationale d’Administration (ENA). Gilles Grapinet is France’s Chevalier de la Légion d’Honneur. He is a French national.
Anne-Gabrielle Heilbronner, born in 1969, is a member of the Management Board of Publicis Groupe, the world’s third-largest company in the field of communication and advertising. As group General Secretary, she is in charge of human resources, procurement, legal affairs, compliance and governance, CSR and the internal audit and control functions and risk management. As a member of the Management Board, she has input into all strategic decisions regarding the Group’s transformation. She worked on the merger of Publicis with Omnicom in 2013, and the acquisitions of Sapient in the United States in 2015 and Epsilon in 2019. She began her career as a Financial Inspector before joining the Treasury Department as Deputy Manager of Social Housing Financing. She worked at Euris from 2000 to 2004 as Head of Corporate Finance in charge of all financial operations for Euris and Casino. Having contributed to EDF’s initial public offering strategy, she then held the positions of Chief of Staff (2004-2005) and Special Adviser (2005-2007) respectively with the French Secretary of State for the Reform of State and then with the Ministry for Foreign Affairs. Director of Internal Audit and Risk Management at SNCF (2007-2010), where she developed and strengthened the role of the audit and compliance functions (ethics, fraud prevention, etc.), she then became Senior Banker and Managing Director at Société Générale Corporate and Investment Banking, in charge of a portfolio of listed companies. She joined Publicis Groupe in 2012. Anne-Gabrielle Heilbronner is a Financial Inspector, an alumna of the École Nationale d’Administration (ENA), and a graduate of ESCP-Europe and of the Institut d’Études Politiques in Paris. She also holds a master’s degree in Public Law and a postgraduate diploma in Tax Law and Public Finance. Anne-Gabrielle Heilbronner is a Knight of the French Legion of Honor. She is a French national.
Momar Nguer, born in 1956, former member of TotalEnergies’ Executive Committee and is Chief Executive Officer of Mnguer Advisory SAS. After starting his career in the Finance Department of Hewlett Packard France, he joined the Total group in 1984 where he held several positions. He was Sales Director of Total Raffinage Marketing Senegal from 1985 to 1990, then became Network and Consumer Director of Total Raffinage Marketing Africa between 1991 and 1995, after which he became Managing Director of Total Raffinage Marketing in Cameroon and Kenya until 2000. On his return to France, he was appointed Director of East Africa and the Indian Ocean and then Managing Director Aviation of Total Refining Marketing. In 2012, he became Director for Africa & Middle East, member of the Management Committee and then of the Performance Committee of the Total Group before joining the Executive Committee as Managing Director of the Marketing & Services branch. Momar Nguer has been a member of the Board of Directors and Chairman of the Audit Committee of Lafarge Holcim Morocco and Chairman of the Africa Committee of Medef International. He is also founding President of the French Business Club of Kenya. A graduate of Essec and holder of a Master’s degree in international law, Momar Nguer is a Knight of the French Legion of Honor. He has dual Senegalese and French nationality.
Frédéric Sanchez, born in 1960, is Chairman of the Fives group. He began his career at Renault in 1985 in Mexico and the US, before joining Ernst & Young as Senior Manager in late 1987. In 1990, he joined the Fives-Lille group, where he held various positions before becoming Chief Financial Officer in 1994, then Chief Executive Officer in 1997, and finally Chairman of the Management Board in 2002. Fives - the new name of Compagnie de Fives-Lille since 2007 - became a simplified joint stock company (société par actions simplifiée - SAS) in 2018, headed by Frédéric Sanchez as Chairman. Under his leadership, Fives has accelerated its development by strengthening its international presence and portfolio of activities through major acquisitions and the opening of regional offices in Asia, Latin America and the Middle East. In addition, Frédéric Sanchez is Chairman of MEDEF International, and Chairman of the France-United Arab Emirates and France-Japan business councils of MEDEF International. He is also a member of the Supervisory Boards of STMicroelectronics NV and Théa Holding SAS, and a Director of Bureau Veritas SA and Compagnie des Gaz de Pétrole Primagaz SAS. Finally, he is Honorary Co-Chairman of the Alliance Industrie du Futur (Industry of the Future Alliance) and Chairman of the Solutions industrie du futur (Solutions for the Industry of the Future - SIF) sector of the Conseil national de l’industrie (National Industry Council - CNI). Frédéric Sánchez is a graduate of the École des Hautes Études Commerciales (HEC) and Institut d’Études Politiques in Paris (1985), and holds a post-graduate diploma in Economics from the University of Paris-Dauphine (1983). He is a French national.
Directors representing the public sector
Date first appointed |
Term ending | ||
Bpifrance Participations (1) represented by Thierry Sommelet (2) |
Member of the Strategy and Technology Committee |
May 28, 2013 |
At the close of the 2025 Shareholders’ Meeting |
Anne Lange (3) |
Member of the GCSERC |
May 27, 2015 |
At the close of the 2027 Shareholders’ Meeting |
Céline Fornaro (4) |
Member of the Audit Committee |
March 24, 2023 |
March 24, 2027 |
(1) A public financing and investment group for companies, resulting from the merger of OSEO, CDC Entreprises, FSI and FSI Régions, appointed by the Shareholders’ Meeting.
(2) Appointed as permanent representative from January 10, 2021 to replace Nicolas Dufourcq.
(3) Appointed by the Shareholders’ Meeting on the basis of a proposal by the French government and the Board of Directors. Term of office renewed by the Shareholders’ Meeting of May 23, 2023.
(4) By ministerial order dated March 24, 2023, Céline Fornaro was appointed member of the Board of Directors of Orange as representative of the French State, in replacement of Stéphanie Besnier.
Thierry Sommelet, born in 1969, is a Director, member of the Management Committee and Head of Technology, Media and Telecoms of the growth capital department of Bpifrance. Thierry Sommelet has nearly 20 years’ experience in private and public investment in the technology, media and telecommunication sectors. He began his career in 1992 in the capital markets at Crédit Commercial de France in Paris, then in New York. After leading the team of financial engineers at Renaissance Software (SunGard group) in Los Altos in the United States and serving as Deputy Chief Executive Officer of InfosCE in 2001, he joined the Digital Investments and Equity Department at Caisse des Dépôts et Consignations in 2002, and subsequently took charge of that unit in 2007. After joining the Fonds Stratégique d’Investissement in 2009, Thierry Sommelet joined the teams of Bpifrance Investissement when it was created in 2013. He represents Bpifrance on the Boards of Directors or Supervisory Boards of Worldline Group SA and Vantiva SA, both listed on Euronext Paris, as well as on the Supervisory Board of Idemia SAS. Thierry Sommelet is a graduate of the École Nationale des Ponts et Chaussées in Paris and holds an MBA from INSEAD. He is a French national.
Anne Lange, born in 1968, co-founded Mentis and is a new technology entrepreneur. Anne Lange began her career in 1994 working in the Prime Minister’s office where she headed the government department for State control of public broadcasting. In 1998, she joined Thomson as Head of Strategic Planning, before becoming Head of the Europe e-business Department in 2000. In April 2003, Anne Lange was appointed General Secretary for the Internet rights forum, an agency of the Prime Minister’s office. From 2004 to 2014, she successively worked as Vice-President of Europe Public Sector, Senior Executive Director of Global Public Sector & Media Operations (based in the US) and Senior Executive Director of Innovation for the Internet Business Solutions group at Cisco. She decided to quit Cisco to create her own start-up, the software company, Mentis, of which she was Chief Executive Officer until 2018, innovating in the field of the Internet of Things, the Cloud and Big Data. Since then, Anne Lange has divided her professional activities between directorships with major groups (Pernod-Ricard, Inditex, Peugeot-Invest), technology investment activities and consultancy services to senior managers in the field of business transformation. Anne Lange is an alumna of the École Nationale d’Administration (ENA) and a graduate of the Institut d’Études Politiques de Paris. She is a French national.
Céline Fornaro, born in 1976, has been Deputy Chief Executive Officer of the French State Investment Agency (Agence des participations de l’État) since October 1, 2023. She began her career in 2000 as Marketing and Product Manager in aircraft sales at Embraer. In 2004, she began working for Merrill Lynch, before being promoted to Managing Director and head of the research team in Aerospace, Defense and Satellites in 2009. In 2016, Céline Fornaro joined UBS as Managing Director of equity research for the industrial sector, covering aerospace, equipment and new energy sources. In June 2022, she joined the Agence des participations de l’État as head of Finance. This professional experience enabled her to acquire thorough knowledge of investment banking and the finance, equipment, aerospace, and transport sectors, with a global, medium- and long-term vision of these sectors. Graduated from France’s National School of Civil Aviation (ENAC) in 1997, Céline Fornaro is also graduated from Cranfield University College of Aeronautics (United Kingdom). She is a French national.
Directors elected by employees
Election date |
Term ending | ||
Sébastien Crozier |
Member of the Audit Committee |
December 03, 2017 |
December 02, 2025 |
Vincent Gimeno |
Member of the Strategy and Technology Committee |
December 03, 2021 |
December 02, 2025 |
Magali Vallée |
Member of the GCSERC |
December 03, 2021 |
December 02, 2025 |
Sébastien Crozier, born in 1968, is Senior Vice-President and Director of Public Sponsorship within the Orange group. He began his career in 1990 in telematic activities for the Alten group. He took over its General Management and became its major shareholder. He joined France Telecom Multimédia in 1994 to prepare the launch of online services and as such participated in the launch of Wanadoo. From 1998, he founded several start-ups in the area of online advertising and Internet service provision as a telecommunication operator, with more than 1.3 million customers under the Fnac, M6 and Société Générale brands. Following their acquisition in 2001 by France Telecom (which became Orange), he returned to the Group, becoming Head of Strategy and Innovation Management of part the Enterprise Division in 2003. He managed several subsidiaries in France and abroad on behalf of the Orange group, in Africa and Latin America, as Director of International Development. He is also Chairman of CFE-CGC Orange. He is also Honorary Chairman of ADEAS (Association pour la défense de l’épargne et de l’actionnariat salariés - Association for the defense of employee saving and shareholding). During the 2001-2002 presidential campaign, he acted as Jean-Pierre Chevènement’s permanent advisor on logistics and new technologies. He is Vice President of the recognized public utility foundation Le Refuge. Sébastien Crozier studied engineering at the École Supérieure d’Ingénieurs en Électrotechnique et Électronique (ESIEE) and the Karlsruher Institut f✔r Technologie (KIT) in the field of artificial intelligence. He is a French national.
Vincent Gimeno, born in 1966, is a specialist in innovation and management of technical projects with a strong strategic aspect. He graduated with a specialized master’s degree in underwater engineering, with a specialization in robotics and telecommunications, and started his career in the R&D department of France Telecom, at CNET (Centre National d’Etudes des Télécommunications - the national center for telecommunication research), where he managed the millennium transition. He then took over IT and technical responsibility for the Orange R&D sites in Caen, Rennes and Grenoble. In 2006, he reinforced his experience in Open Innovation and launched several collaborative projects in the areas of Machine-to-Machine communication and Internet of Things at the Orange Labs, where he headed a Research and Development Unit. His human approach and his commitment led him to continue his career as Director of the User Satisfaction and Ergonomics Project in the Information System Technical Department. In 2015, he was appointed Deputy Central Trade Union Delegate, in charge of Employment and Skills Planning (ESP), digital transformation and international matters. In this capacity, he was Deputy Secretary of the Worldwide Works Council (from 2015 to 2019) and a full member of the European Works Council until his election to the Board of Directors of Orange on December 3, 2021. He obtained his Board of Directors certification from IFA/SciencesPo in 2023. He is a French national.
Magali Vallée, born in 1972, has more than 20 years of extensive experience in Telecoms. She has worked for Orange for several years as an in-store Sales Consultant. She currently still works at the Orange store in Trignac in the Loire-Atlantique region. She began her career on a fixed-term contract in 1997 with France Telecom, first as a B2C telephone advisor (1014) and then as a B2B telephone advisor (1016). She was hired on a permanent contract in 1999 within the distribution channels. Her human approach and desire to help and support others led to her becoming involved in a union in 2007. Her roles as an employee representative, union representative, elected member of the Health, Safety and Working Conditions Committee of the Agence Distribution Ouest and elected member of the Works Council of the Orange Ouest Division for several terms of office confirmed her decision. She served as deputy treasurer on the Works Council from 2014 to 2017 as well as Chairwoman of the professional equality commission. Before joining the Board of Directors of Orange SA, she was elected to the Social and Economic Committee of the Orange Grand Ouest Division and was appointed coordinating Union Delegate Coordinator for the CGT (Confédération générale du travail - General Labor Confederation). She is a French national.
Director appointed by the Shareholders’ Meeting and representing employee shareholders
Start date |
Term ending | ||
Thierry Chatelier (1) |
Member of the Strategy and Technology Committee |
July 13, 2022 |
At the close of the 2024 Shareholders’ Meeting |
(1) Assumed office on July 13, 2022 to replace incumbent director representing employee shareholders Laurence Dalboussière, following her resignation.
Thierry Chatelier, born in 1975, is a member of the Supervisory Board of the FCPE Orange Actions mutual fund. He has 20 years of experience in the telecommunications industry. A specialist in hyper frequencies and a graduate of the University of Limoges, he began his career working internationally, first for Global One, then for Equant, where he helped build France Télécom’s seamless network. He joined the Orange Business Services teams where he held several positions in customer relations and sales. In 2015, he was seconded to Orange Horizons where was in charge of institutional relations, and at the same time became involved in trade union activities. He is secretary of the Orange SCE works council. Since 2017 he has been in charge of joint-innovation and business development projects. He is a French national.
Meetings of the Board of Directors are also attended by one member of Orange’s Central Social and Economic Committee (CSEC) and one representative of the Worldwide Works Council.
Changes in the composition of the Board of Directors
Stéphanie Besnier left her position as Deputy Chief Executive Officer of the French State Investment Agency (APE) and, hence, her mandate as Board member of Orange on March 5th, 2023. By ministerial order dated March 24th, 2023, Céline Fornaro was appointed member of the Board of Directors of Orange as representative of the French State, in replacement of Stéphanie Besnier.
Gilles Grapinet and Momar Nguer were appointed Independent Directors by the Shareholders’ Meeting of May 23, 2023, each for a four-year term, i.e. until the close of the Shareholders’ Meeting called to approve the financial statements for the fiscal year ending December 31, 2026, to replace Bernard Ramanantsoa and Jean-Michel Severino, respectively.
Anne Lange was reappointed as Director representing the French State and Alexandre Bompard and Anne-Gabrielle Heilbronner were reappointed as Independent Directors by the Shareholders’ Meeting of May 23, 2023, each for a four-year term, i.e. until the close of the Shareholders’ Meeting called to approve the financial statements for the fiscal year ending December 31, 2026.
Age |
Gender |
Nationality |
Number of shares |
Number of positions held in other listed companies |
Date first appointed |
Term ending |
Seniority on the Board |
Board committee membership | |
Non-Independent Director | |||||||||
Christel Heydemann (1) |
49 |
French |
1,000 |
0 |
07/26/2017 |
2024 SM |
6 years |
X | |
Independent Directors | |||||||||
Jacques Aschenbroich (2) |
69 |
French |
3,000 |
2 |
05/19/2022 |
2026 SM |
> 1 year |
X | |
Valérie Beaulieu |
56 |
French |
1,000 |
0 |
05/19/2022 |
2026 SM |
> 1 year |
Audit Comm. | |
Alexandre Bompard |
51 |
French |
1,000 |
1 |
12/07/2016 |
2027 SM |
7 years |
STC | |
Gilles Grapinet |
60 |
French |
2,000 |
1 |
05/23/2023 |
2027 SM |
< 1 year |
Audit Comm. (Chairman) | |
Anne-Gabrielle Heilbronner |
55 |
French |
1,000 |
2 |
05/21/2019 |
2027 SM |
5 years |
GCSERC (Chairwoman) | |
Momar Nguer |
67 |
French and Senegalese |
1,000 |
0 |
05/23/2023 |
2027 SM |
< 1 year |
GCSERC | |
Frédéric Sanchez |
63 |
French |
1,000 |
2 |
05/19/2020 |
2024 SM |
4 years |
STC (Chairman) | |
Directors representing the public sector | |||||||||
Bpifrance Participations (represented by Thierry Sommelet (3)) |
54 |
French |
254,219,602 |
2 |
05/28/2013 |
2025 SM |
10 years |
STC | |
Céline Fornaro |
47 |
French |
0 |
3 |
03/24/2023 |
03/23/2027 |
< 1 year |
Audit Comm. | |
Anne Lange |
55 |
French |
0 |
3 |
05/27/2015 |
2027 SM |
8 years |
GCSERC | |
Director representing employee shareholders | |||||||||
Thierry Chatelier |
48 |
French |
4,885 |
0 |
07/13/2022 |
2024 SM |
> 1 year |
STC | |
Director representing employees | |||||||||
Sébastien Crozier |
56 |
French |
600 |
0 |
12/03/2017 |
12/02/2025 |
6 years |
Audit Comm. | |
Vincent Gimeno |
57 |
French |
2,473 |
0 |
12/03/2021 |
12/02/2025 |
2 years |
STC | |
Magali Vallée |
52 |
French |
283 |
0 |
12/03/2021 |
12/02/2025 |
2 years |
GCSERC |
(1) At its meeting of January 28, 2022, the Board of Directors appointed Christel Heydemann as Chief Executive Officer of Orange, effective from April 4, 2022. On February 16, 2022, on the recommendation of the GCSERC and over and above the criteria set out in Article 10.5 of the Afep-Medef Code, the Board of Directors stated that, in the case in point, she could no longer be considered as an Independent Director.
(2) At its meeting following the close of the Shareholders’ Meeting of May 19, 2022, the Board of Directors appointed Jacques Aschenbroich as its Chairman.
(3) Appointed as permanent representative from January 10, 2021 to replace Nicolas Dufourcq. Thierry Sommelet personally holds 400 Orange shares.
5.1.2 Corporate Officers
Chairman of the Board of Directors
Jacques Aschenbroich was appointed Chairman of the Board of Directors at the board meeting held at the close of the Shareholders’ Meeting of May 19, 2022 and will serve as such for the duration of his directorship, i.e. until the close of the 2026 Shareholders’ Meeting called to approve the financial statements for the fiscal year ending December 31, 2025.
Jacques Aschenbroich’s biography can be found in Section 5.1.1 Board of Directors.
Chief Executive Officer
The Board of Directors met on January 28, 2022 and appointed Christel Heydemann as Chief Executive Officer as from April 4, 2022. As Christel Heydemann remained a director, albeit no longer an independent one, the Board of Directors, meeting at the close of the Shareholders’ Meeting of May 19, 2022, reappointed her as Chief Executive Officer for the duration of the term of office of the Board’s Chairman, i.e. until the close of the 2026 Shareholders’ Meeting called to approve the financial statements for the fiscal year ending December 31, 2025.
5.1.3 Executive Committee
Pursuant to the provisions of Article L. 22-10-10 2 of the French Commercial Code, and in order to encourage gender diversity, Orange pays close attention to the representation of women on its Executive Committee. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
As at the date of this document, five of the 13 Executive Committee members were women (including Christel Heydemann).
Christel Heydemann |
Chief Executive Officer |
Jean-François Fallacher |
Executive Director of Orange France |
Hugues Foulon |
Executive Director of Cybersecurity Activities and CEO of Orange Cyberdefense |
Nicolas Guérin |
Group Secretary General and Secretary of the Board of Directors |
Caroline Guillaumin |
Executive Director of Communication |
Jérôme Hénique |
Executive Director, Chief Executive Officer of Orange Africa & Middle East |
Mari-Noëlle Jégo-Laveissière |
Executive Director of the Europe region (outside of France) for Orange |
Vincent Lecerf |
Executive Director of Human Resources for the Group |
Laurent Martinez |
Group Executive Director Finance, Performance and Development |
Aliette Mousnier-Lompré |
Executive Director of Orange Business |
Elizabeth Tchoungui |
Executive Director of CSR for Orange |
Michaël Trabbia |
Executive Director and CEO of Orange Wholesale |
Bruno Zerbib |
Executive Director of the Orange Innovation entity |
Christel Heydemann’s biography can be found in Section 5.1.1 Board of Directors.
Jean-François Fallacher has been Executive Director of Orange France since April 3, 2023. He had been Chief Executive Officer of Orange Espagne and an associate member of the Orange group’s Executive Committee since 2020. Jean-François Fallacher began his career in the 1990s at France Telecom as the Internet was expanding in France, before going on to become Director of Operations for Wanadoo in the Netherlands in 2001. In 2006, he was appointed Chief Executive Officer of Sofrecom, a consulting subsidiary of Orange specializing in the telecom sector, and then as Chief Executive Officer of Orange Romania in 2011. From 2016 to September, 2020, Jean-François Fallacher was Chief Executive Officer of Orange Polska, where he successfully boosted its growth by investing massively in fiber and pursuing a convergence strategy. Jean-François Fallacher is a foreign trade adviser and Chairman of the French-Polish Chamber of Commerce and Industry. He is a graduate of the École Polytechnique and the École Nationale Supérieure des Télécommunications de Paris.
Hugues Foulon has been Executive Director of Cybersecurity Activities and CEO of Orange Cyberdefense since 2018. He began his career in 1994 at Générale des Eaux (Veolia group), where he was appointed Director of a drinking water plant, then Director of Monégasque de Télédistribution and Monégasque des Eaux. In 2000, he made his first foray into the world of telecommunication, joining Vivendi group’s Monaco Telecom as Deputy Chief Executive Officer, in charge of functional departments. In 2005, he joined the Group as Director of B2C Commercial Finance for Mobile. He remained there for two years, before moving to Northern Africa and becoming Maroc Telecom’s Financial Control Director. In 2007, he returned to Orange, where he took on roles as Financial Control Director for the Marketing and Innovation Division, Director to the Group’s Delegate Chief Executive Officer, Head of Finance, then Chief Financial Officer of the Africa & Middle East Division. He was then appointed Head of the office of the Chairman and Chief Executive Officer of Orange and Secretary to the Group’s Executive Committee. He is a graduate of École Polytechnique and the École Nationale Supérieure de Techniques Avancées (ENSTA). He is also an auditor of the 66th "defense policy" session of the Institut des Hautes Études de Défense Nationale (IHEDN).
Nicolas Guérin has been Group Secretary General since March 1, 2018, and is Secretary to the Board of Directors. He is also Chairman of the Digital Infrastructure Sector Strategic Committee, Chairman of the Fédération Française des Télécoms, Honorary Chairman and Director of Cercle Montesquieu, and Chairman of the Evaluation and Orientation Committee of the International Chair in Space and Telecommunication Law at the University of Paris XI. Joining the Group’s Competition and Regulation Legal Affairs Department in 1998 after his time at SFR, Nicolas Guérin arrived just as the sector was undergoing deregulation. He became head of the department in 2003, before becoming General Counsel and Secretary to the Board of Directors in 2009. In this position, he has been a leading contributor to many ground-breaking legal cases for the Group, including the roaming agreement with Free, M&A transactions to expand the Group’s footprint in Africa and Europe, and diversification. He was also involved in establishing the Evaluation and Compensation Committee in the wake of the France Télécom social crisis, and he participated in its work. He has lent essential support to the implementation of regulatory requirements in the B2B market, to the mobile agreement signed between mobile operators and the French State and its consequences, and to Arcep’s fixed market analysis. He is a graduate of the Institut de Droit des Affaires (IDA) and holds a specialized master’s degree in Business Law and Taxation from the University of Paris II Panthéon-Assas.
Caroline Guillaumin has been Executive Director of Communication since January 2, 2023. Caroline Guillaumin began her career in 1989 in the high-tech sector, working for startups in France and the United States. In 1997, she joined Verity, the then leader in Internet search engines, as Marketing and Communication Director for Europe. Between 1999 and 2009 she worked as Director of Communication and Sustainable Development at Alcatel, SFR and then Alcatel-Lucent. In January 2010, she took up the role of Head of Communications at Société Générale and also became Head of Human Resources for the Group in June 2017. Caroline Guillaumin is a graduate of the Institut d’Études Politiques de Bordeaux and has a Master of Arts in International Relations from Boston University.
Jérôme Hénique has been Executive Director and Chief Executive Officer of Orange Africa & Middle East since July 1, 2022. After starting his career as a consultant, he joined the Group in 1995, serving as Group Chief Marketing Officer at Orange, Consumer Market Director in France and Marketing Director in Spain. Between 2010 and 2015, he was Deputy Chief Executive Officer at Sonatel group, where he contributed to the operator’s rapid growth, with priority given to digital and financial inclusion through the development of mobile data and the launch and subsequent development of Orange Money services. In September 2015, he became Chief Executive Officer of Orange Jordan where the diversification strategy implemented for new services helped deliver growth and a strong financial performance. As Deputy Chief Executive Officer and Chief Operating Officer of Orange Africa & Middle East from 2018 to June 2022, he coordinated OMEA’s uptick in sustainable growth and the transformation of operations, notably by structuring pooling efforts between the countries. Jérôme Hénique has over 25 years of experience in the field of information and communication technologies and telecom operator management in a wide range of markets. He graduated from the École Nationale Supérieure des Postes et Télécommunications (ENSPTT) in Paris and the Paris Institute of Political Studies.
Mari-Noëlle Jégo-Laveissière has been Executive Director of Europe region (outside of France) for Orange since September 1, 2020. She joined the Group’s Executive Committee in 2014 as Senior Executive Director in charge of the Technology and Global Innovation Division, and became Deputy Chief Executive Officer in charge of the same division in May 2018. Since joining the Orange group in 1996, Mari-Noëlle Jégo-Laveissière has held several management positions: Director of International & Backbone Network Factory, Head of Group Research & Development, Head of the Home B2C Marketing Department of Orange France and Regional Manager, where she was responsible for technical and commercial services for B2C and B2B customers. Mari-Noëlle Jégo-Laveissière is a graduate of École des Mines de Paris and École Normale Supérieure. She also holds a doctorate in Quantum Chemistry from the University of Paris XI - Waterloo.
Vincent Lecerf has been Executive Director of Human Resources for the Group since October 17, 2022. In January 2017, before joining the Group, Vincent Lecerf was appointed Group Chief Human Resources Officer for Imerys, a major French group specializing in industrial minerals. Previously, he was Human Resources Director and a member of the management board for nine years at Tarkett. He has also held various HR management positions for the Valeo, Poclain Hydraulics, Rhodia and Norbert Dentressangle groups. He is a graduate of EDHEC Business School and holds an M. Phil in organizational sociology from Paris IX Dauphine.
Laurent Martinez has been Group Executive Director Finance, Performance and Development since September 1, 2023. He began his career in 1996 at Astrium, Airbus’s defense and space subsidiary, where he held several senior positions in the controlling department. In 2004, he was promoted to Finance Director before being appointed Director of Controlling, Performance and Accounting for the Airbus Group in 2009. He took over as Managing Director of the Airbus Services Business Unit in 2015. In July 2018, Laurent Martinez was appointed Chief Financial Officer of Alstom and member of its Executive Committee. During this period, he played a key role in Alstom’s transformation, including the February 2021 acquisition of Bombardier Transportation, which helped create the world leader in rail transport. Laurent Martinez trained as an engineer in Electronics & Telecommunications and holds a Master’s degree in finance and accounting.
Aliette Mousnier-Lompré has been Executive Director of Orange Business since May 24, 2022. Since joining Orange in 2006, she has held various management positions in the Group’s B2B, Wholesale and Innovation divisions: Head of Mobile Data and Head of Pricing in International Carriers, Business Development Director for the Enterprise Global Voice and Conferencing business, Chief of Staff to the Executive Vice President for Innovation & Research, and Vice President Global Enterprise Networks. From July 2019 she was Executive Vice President of Customer Service and Operations at Orange Business Services, responsible for leading a multicultural team of 8,600 people designing, building, and operating a wide variety of business solutions through a 24/7 model covering all geographic regions. She was appointed interim Chief Executive Officer of Orange Business Services in January 2022 before being confirmed in her current position in May 2022. As a former semi-professional soccer player with the Paris Saint Germain soccer club, Aliette Mousnier-Lompré has turned her experience in team sports into a major strength when it comes to leading her teams today. She holds a Master’s degree in international business from the Paris Institute of Political Studies and also studied at the University of California, Berkeley.
Elizabeth Tchoungui is Executive Director of CSR for Orange. She oversees the Group’s social and environmental responsibility policy in line with the objectives of the Lead the future strategic plan. Born in the United States to French and Cameroonian parents, she grew up in Cameroon, Belgium and Italy. She had a long career as a journalist and writer before joining the Orange group. She was a presenter for France 2 (France Télévisions group) and RMC STORY (Altice group). Elizabeth Tchoungui was the first journalist of African origin to present the TV5 Monde news and the first woman to present the iconic weekly cultural magazine of France 2, France’s top public channel. Elizabeth Tchoungui also headed the culture department at France 24. Elizabeth Tchoungui is the author of several books, including: "Le jour où tu es né une deuxième fois" (Flammarion), which tells the story of her son with Asperger’s Syndrome; "Je vous souhaite la pluie" (Plon), which has been translated into Italian and is taught in high schools and universities in Cameroon; "Bamako Climax" (Plon), a novel set against the backdrop of terrorism in the Sahel belt; and "Billets d’Humeur au féminin" (Léo Scheer), a collection of editorials published on the aufeminin.com website. Elizabeth Tchoungui chairs the Cité des Télécoms Corporate Foundation, a showcase for positive-impact innovation. She has been Chairwoman of Capital Filles since 2021. This association was established by Orange in 2012 to support girls from working-class neighborhoods and rural areas in their career choices and their encounters with the business world. She is also an associate member of the Energies pour le Monde Foundation and a Director of the Théâtre du Châtelet. Elizabeth Tchoungui is a graduate of the École Supérieure de Journalisme in Lille, a Knight of the French Order of Arts and Letters and a Knight of the French Order of Merit.
Michaël Trabbia has been Executive Director and CEO of Orange Wholesale since April 3, 2023. He began his career at Arcep in 2001, taking charge notably of the allocation and control of mobile licenses. In 2004, he was appointed technical advisor to the office of the Minister for European Affairs, before joining the office of the Minister for Regional Planning in 2005 as technical advisor for ICT and Europe. In 2007, he joined TDF (a network and infrastructure operator in France), where he served as Director of Strategy and Development. In July 2009, he was appointed Deputy Chief of Staff to the Minister for Industry and Head of the Industrial Sectors Division. He joined the Orange group in January 2011. He first held the position of Group Director of Public Affairs, before being appointed Director reporting to the Chairman and Chief Executive Officer of Orange, Secretary to the Group’s Executive Committee, in July 2014. In September 2016, he was appointed Chief Executive Officer of Orange Belgium and helped the company to achieve a growth dynamic thanks to customer-centric Bold Challenger positioning. On September 1, 2020, he joined the Group’s Executive Committee, serving until April 2, 2023 as Executive Vice President Technology and Innovation for the Group and overseeing the Orange Innovation division. He is a graduate of the École Polytechnique and Télécom ParisTech, and holds a post-graduate diploma in Industrial Economics.
Bruno Zerbib has been Executive Director of the Orange Innovation entity since June 1, 2023. He began his career in 1998 in Silicon Valley, where he held several positions at Hewlett Packard and then at Cisco. He moved to Yahoo in 2012, where he led the company’s transformation into a Cloud-native platform capable of handling over one billion monthly users. In 2017, Bruno Zerbib joined Altice as Director of Technology and IT. He worked within the Altice Global Engineering Innovation division on key topics such as the augmented TV experience, technology partnerships, and network transformation for all Altice subsidiaries. In 2018, he joined Schneider Electric as Chief Technology and Digital Officer to provide more efficient and sustainable technological solutions to Schneider Electric’s customers. In particular, he developed the use of the Cloud, artificial intelligence, and industrial IoT. Bruno Zerbib is a graduate of TélécomSud Paris and the University of Paris Cité, where he majored in computer science.
5.1.4 Information on Directors, Officers and Senior Management
5.1.4.1 Positions held by Directors and Officers
As of the date of this document and to the best of the Company’s knowledge, all members of the Board of Directors meet the criteria set out in Article 20 of the Afep-Medef Code regarding the number of positions held.
Jacques Aschenbroich Positions currently held − Director and Chairman of the Orange Board of Directors (2) − Director of BNP Paribas, Chairman of its Governance, Appointments and CSR Committee, and member of its Accounts Committee (2) − Lead Director of TotalEnergies, Chairman of its Governance and Ethics Committee, and member of its Compensation Committee and Strategy Committee (2) − Chairman of the Orange Foundation (1) − Chairman of the Board of Directors of the École Nationale Supérieure Mines ParisTech − Co-Chairman of the Franco-Japanese Business Club − Honorary Chairman of Valeo − Chairman of the French-American Foundation Other positions and offices held over the past five years − Director, Chairman and Chief Executive Officer of Valeo (2) − Director of Veolia Environnement, Chairman of its Research, Innovation and Sustainable Development Committee, and member of its Accounts and Audit Committee |
Christel Heydemann Positions currently held − Director and Chief Executive Officer of Orange (2) − Director of Association AX International − Permanent representative of the Orange subsidiary (Atlas Countries Support) on the Medi Telecom Board of Directors (1) (Morrocco) Other positions and offices held over the past five years − Member of the Orange Audit Committee − Chairwoman and Director of Schneider Electric France SAS − Director of Schneider Electric Industries SAS − CEO of Europe and France Operations of Schneider Electric and member of its Executive Committee (2) − Director of France Industrie − Chairwoman of GIMELEC − Director of Rexecode |
Valérie Beaulieu Positions currently held − Director of Orange and member of its Audit Committee (2) International − Chief Sales and Marketing Officer at the Adecco Group (2) (Switzerland) − President of Pontoon (subsidiary of the Adecco Group) (United States) − French Foreign Trade Advisor (member of its Swiss Board) (Switzerland) Other positions and offices held over the past five years − Director of ISS A/C and member of its Audit and Risk Committee (2) |
Alexandre Bompard Positions currently held − Director of Orange and member of its Strategy and Technology Committee (2) − Chairman and Chief Executive Officer of Carrefour (2) − Chairman of Fondation Carrefour − Member of the Fondation Nationale des Sciences Politiques − Member of Le Siècle - a non-profit association as provided for in France’s Loi de 1901 − Chairman of the French Trade and Retail Federation (Fédération Française du Commerce et de la Distribution) Other positions and offices held over the past five years None |
Thierry Chatelier Positions currently held − Director of Orange and member of its Strategy and Technology Committee (2) Other positions and offices held over the past five years None |
(1) Company in which Orange holds an interest.
(2) Office in a listed company.
Sébastien Crozier Positions currently held − Director of Orange and member of its Audit Committee (2) − Member of the Rodeeo Supervisory Board − Honorary Chairman of ADEAS - a non-profit association as provided for in France’s Loi de 1901 − Chairman of CFE-CGC Orange union confederation - a trade union as provided for in France’s Loi Waldeck-Rousseau − Chairman of Ciné-club de l’Hôtel du Nord et du Canal Sain-Martin - a non-profit association as provided for in France’s Loi de 1901 − Vice President of Le Refuge (recognized public utility foundation) − Member of the Board of Directors of the Institut Aspen France Other positions and offices held over the past five years − Member of the Supervisory Board of the Orange Actions mutual fund − Treasurer of L’Engagement - a political party conforming to the terms of France’s Loi de 1901 − Treasurer of Manifeste pour l’Industrie |
Céline Fornaro Positions currently held − Director representing the French State on the Board of Directors and member of the Orange Audit Committee (2) − Director representing the French State on the ENGIE (2) Board of Directors − Director representing the French State on the Air France - KLM (2) Board of Directors − Director representing the French State on the Safran Board of Directors, member of the Safran Audit and Risk Committee and Appointments and Remuneration Committee (2) International − Member of the Chatham House, The Royal Institute of International Affairs (UK) − Member of the Royal Aeronautical Society (UK) − Member of the Women on Boards (UK) − Member of the Aviation Club (UK) Other positions and offices held over the past five years − Director representing the French State on the RATP Board of Directors − Director representing the French State on the EDF (2) Board of Directors |
Vincent Gimeno Positions currently held − Director of Orange and member of its Strategy and Technology Committee (2) Other positions and offices held over the past five years None |
Gilles Grapinet Positions currently held − Director of Orange and Chairman of its Audit Committee (2) − Chief Executive Officer of Worldline and member of its Strategy and Investment Committee and Social and Environmental Responsibility Committee (2) − Chairman of the Worldline IGSA Board of Directors − Chairman of the Supervisory Board of Younited Credit − Member of the Board of Directors of Énergie Jeunes (a non-profit association) − Member of the AlphaOmega Foundation Board of Directors International − Member of the Supervisory Board of Worldline (China) − Chairman of the Shareholders’ Committee of Worldline Payone Holding GmbH (Germany) − Vice-Chairman of the European Digital Payment Industry Alliance (EDPIA) (Belgium) − Director representing Worldline on the EPI Company Board of Directors (Belgium) Other positions and offices held over the past five years − Chairman of the Board of Directors of Worldline (2) − Permanent representative of Atos SE on the Atos Participation 2 SA Board of Directors − Chairman of the Supervisory Board of EquensWorldline SE (Netherlands) − Director of Saint Louis Ré SA (Luxembourg) |
Anne-Gabrielle Heilbronner Positions currently held − Director of Orange and Chairwoman of its GCSERC (2) − Member of the Management Board of Publicis Groupe (2) − Chairwoman of Publicis Groupe Services − Director of Sanef and Chairwoman of its Audit Committee − Director of Somupi − Chairwoman of WEFCOS (Women’s Forum for the Economy and Society) − Representative of Multi Market Services France Holdings on the Board of Directors of Régie Publicitaire des Transports Parisiens Metrobus Publicité − Member of the Executive Committee of Multi Market Services France Holdings − Director of Chargeurs (2) − Director of the Musée d’Art et d’Histoire du Judaïsme International − Director of Sapient Corporation (United States) − Director of Publicis Groupe Holdings B.V. (Netherlands) − Director of BBH Holdings Limited (UK) − Director of Publicis Limited (UK) − Director and Chairwoman of Publicis Live SA (Switzerland) Other positions and offices held over the past five years − Director of JG Capital Management − Representative of Multi Market Services France Holdings on the Shareholders’ Committee of WEFCOS − Director of US International Holding Company, Inc. (United States) − Director of Publicis Groupe Investments B.V. (Netherlands) − Director of Publicis Holdings B.V. (Netherlands) |
(2) Office in a listed company.
Anne Lange Positions currently held − Director of Orange and member of its GCSERC (2) − Director of Pernod Ricard, member of its Audit Committee and Nominations and Governance Committee (2) − Director of Peugeot Invest, member of its Investment Committee and Governance, Appointments and Compensation Committee (2) International − Managing partner of Adara (Belgium) − Director of Inditex, member of its Audit Committee, Appointments Committee and CSR Committee (2) (Spain) Other positions and offices held over the past five years − Director of Imprimerie Nationale − Director of Econocom Group (2) |
Momar Nguer Positions currently held − Director of Orange and member of its GCSERC (2) − Director of ECP − Member of the Meridiam Advisory Board − Chairman of Mnguer Advisory SAS − Chairman-Founder of the Kenya French Business Club International − Director of Sea Invest (Belgium) − Director of Terminal Petrolier Dakar (Senegal) − Director of Arise P&L Limited (UK) − Member of the A.P. Moller Capital Advisory Board (Denmark) Other positions and offices held over the past five years − Advisor to the Chairman and CEO of TotalEnergies (2) − Director and Chairman of the Audit Committee of Lafarge Holcim Maroc (Morocco) − Chairman of Medef International’s Africa Committee − Director of NMA (Senegal) |
Frédéric Sanchez Positions currently held − Director of Orange and Chairman of its Strategy and Technology Committee (2) − Chairman of Fives (3) − Director of Bureau Veritas (2) − Director of Compagnie des Gaz de Pétrole Primagaz SAS − Member of the Théa Holding SAS Supervisory Board − Chairman of MEDEF International − Honorary Co-Chairman of the Alliance Industrie du Futur (Industry of the Future Alliance) for the Solutions Industrie du Futur (Solutions for the Industry of the Future - SIF) sector of the Conseil national de l’industrie (National Industry Council - CNI) International − Member of the STMicroelectronics Supervisory Board (2) (Netherlands) Other positions and offices held over the past five years None |
Thierry Sommelet Positions currently held − Permanent representative of Bpifrance Participations on the Orange Board of Directors and member of the Orange Strategy and Technology Committee (2) − Director of Worldline, member of its Compensation Committee, Appointments Committee and Strategy and Investment Committee (2) − Permanent representative of Bpifrance Participations on the Vantiva SA Board of Directors, Chairman of the Vantiva SA Governance and Social Responsibility Committee and member of its Audit Committee (2) − Representative of Bpifrance Investissement on the IDEMIA Group SAS Supervisory Board − Representative of Bpifrance Investissement on the IDEMIA France SAS Board of Directors − Director of the Worldline Foundation Other positions and offices held over the past five years − Permanent representative of Bpifrance Participations on the Technicolor Creative Studios Board of Directors and member of its Remuneration Committee (2) − Director of Soitec (2) − Director of Talend (2) − Chairman of the Supervisory Board of Greenbureau − Director of Ingenico (2) − Director of Tiger Newco − Permanent representative of Bpifrance Investissement on the Mersen Board of Directors (2) |
(2) Office in a listed company.
(3) Several positions held in unlisted French and foreign subsidiaries of the FIVES group.
Magali Vallée Positions currently held − Director of Orange and member of its GCSERC (2) Other positions and offices held over the past five years None |
The business address of all Directors and Officers, in relation to their positions, is that of Orange SA’s headquarters (see Section 7.1 Company identification).
Positions and offices held in 2023 by Directors whose terms of office have ended since January 1, 2023
Stéphanie Besnier (Director representing the French State on the Board of Directors and member of the Orange Audit Committee (2) until March 5, 2023) Positions currently held − Chief Financial Officer of OVHcloud Other positions and offices held over the past five years − Director representing the French State on the ENGIE Board of Directors, member of the ENGIE Audit Committee, Strategy, Investment and Technology Committee, and Appointments, Remuneration and Governance Committee (2) − Director representing the French State on the Safran Board of Directors, member of the Safran Audit and Risk Committee and Group Appointments and Remuneration Committee (2) − Director representing the French State on the Air France KLM Board of Directors, member of the Air France KLM Audit Committee (2) − Director representing Wendel on the Bureau Véritas Board of Directors (2) − Director representing Wendel on the Board of Directors of IHS Towers |
(2) Office in a listed company.
Bernard Ramanantsoa (Director of Orange and Chairman of its Audit Committee (2) until May 23, 2023) Positions currently held − Director of Orange Belgium (1) (2) − Member of the Board of Directors of Toulouse Business School − Member of the ODDO-BHF SCA Supervisory Board, Strategic Committee, Appointments Committee and Remuneration Committee − Member of the EDUCIN Topco (OMNES Education) Supervisory Board − Chairman of SILVERCHAIR (SASU) International − Director of Franco-Lao and member of its Audit Committee (Laos) − Director of Bred Bank Cambodia and member of its Audit Committee and Risk Committee (Cambodia) − Director of Manorina Ltd (Mauritius) − Director of Sommet-Éducation (Switzerland) − Member of the Advisory Board of ShARE Professional Training and Consulting (Netherlands) − Member of the ISCAM Advisory Board (Madagascar) − Chairman of the IUM Board of Directors (Monaco) − Director of Institut Catholique de Paris − Member of the Y SCHOOLS (formerly ESC Troyes group) Strategic Committee − Member of the ESA Business School Scientific Council (Lebanon) − Member of the University of St. Gallen Advisory Board (Switzerland) − Member of the Getulio Vargas Foundation Advisory Board (Brazil) − Member of the Zhejiang University School of Management Advisory Board (China) − Director of Aspen France − Director of Le Choix de l’École (Teach for France) − Member of the EuropaNova Steering Committee Other positions and offices held over the past five years − Director of Établissement Public du Château, du Musée et du Domaine National de Versailles − Member of the EM Normandie Strategic Orientation Council − Member of the Toulouse Business School Strategic Orientation Committee − Director of ANVIE − Director of Institut Français des Administrateurs − Member of the Albarelle Supervisory Board − Member of the ESADE Advisory Board (Barcelona) |
Jean-Michel Severino (Director of Orange and member of its Audit Committee (2) until May 23, 2023) Positions currently held − Member of the Michelin Supervisory Board and Corporate Social Responsibility Committee (2) − Chairman of the I&P SAS (Investisseurs et Partenaires) Supervisory Board − Manager of Emergence Développement − Director of Phitrust Impact Investors − Director of Fondation Tunisie Développement − Director of FERDI (public interest foundation) International − Director of I&P Développement − Director of I&P Gestion − Chairman of the Board of Directors of I&P Afrique Entrepreneurs Other positions and offices held over the past five years − Lead Director and Chairman of the Danone Audit Committee and member of the Danone Governance Committee (2) − Chairman of the Board of Directors of EBI SA (Ecobank International) − Director of Fondation Carrefour − Director of Fondation Alstom − Director of Fondation Avril − Director of Fondation Grameen Crédit Agricole − Director of Adenia Partners |
(1) Company in which Orange holds an interest.
(2) Office in a listed company.
5.1.4.2 Information on Company shares held by Directors and Officers
Number of shares held by Directors and Officers
According to the terms of Article 13 of the Bylaws, each Director appointed by the Shareholders’ Meeting must hold a minimum of 1,000 Company shares, with the exception of Directors elected by employees, the Director representing employee shareholders and the Directors representing the public sector, who are exempt in accordance with the law.
In addition, the Board of Directors has decided that each of the Corporate Officers must also hold at least 1,000 registered shares.
The following information is provided as at the date of this document and to the Company’s knowledge:
Number of shares | ||
Chairman of the Board of Directors, Independent Director |
Jacques Aschenbroich |
3,000 |
Chief Executive Officer, Non-Independent Director |
Christel Heydemann |
1,000 |
Independent Directors |
Valérie Beaulieu |
1,000 |
Alexandre Bompard |
1,000 | |
Gilles Grapinet |
2,000 | |
Anne-Gabrielle Heilbronner |
1,000 | |
Momar Nguer |
1,000 | |
Frédéric Sanchez |
1,000 | |
Directors representing the public sector |
Bpifrance Participations (Thierry Sommelet, permanent representative of Bpifrance Participations, personally holds 400 Orange shares) |
254,219,602 |
Céline Fornaro |
0 | |
Anne Lange |
0 | |
Directors elected by employees |
Sébastien Crozier |
600 |
Vincent Gimeno |
2,473 | |
Magali Vallée |
283 | |
Director representing employee shareholders |
Thierry Chatelier |
4,885 |
Transactions by Directors and Officers on Company securities
The following table details the transactions, reported to the AMF (Autorité des marchés financiers - French Financial Markets Authority), performed on Orange securities during the 2024 fiscal year and between January 1, 2023 and the date of this document by the persons referred to in Article L. 621-18-2 of the French Monetary and Financial Code.
Name |
Financial instrument |
Type of transaction |
Transaction date |
Number of securities |
Average unit price (in euros) |
Sébastien Crozier |
Equities |
Disposal |
01/03/2023 |
1,648 |
9.4190 |
Sébastien Crozier |
Equities |
Purchase |
04/20/2023 |
87 |
11.40 |
Sébastien Crozier |
Equities |
Disposal |
04/28/2023 |
591 |
11.75 |
Sébastien Crozier |
FCPE units |
Purchase |
06/07/2023 |
23.8014 |
10.7124 |
Sébastien Crozier |
FCPE Orange Actions units |
Purchase |
11/28/2023 |
3,224.7358 |
10.37 |
Sébastien Crozier |
FCPE Orange Actions units |
Purchase |
12/27/2023 |
214.2978 |
10.41 |
Sébastien Crozier |
FCPE Orange Actions units |
Purchase |
12/29/2023 |
395.3459 |
10.32 |
Sébastien Crozier |
FCPE Orange Actions units |
Disposal |
01/15/2024 |
3,834.3795 |
10.76 |
Jacques Aschenbroich |
Action |
Purchase |
15/03/2024 |
2,000 |
10.4620 |
To the Company’s knowledge, no other transactions having to be reported to the AMF have taken place.
Restrictions regarding the disposal of shares by Directors and Officers
Directors and Officers holding shares under the Orange group’s savings plan through company mutual funds that are invested in shares of the Company are subject to the lock-up rules under the legal provisions applicable to investments in this type of employee savings plan.
Moreover, within the framework of the EU "market abuse" regulation, Article 16 of the Board of Directors’ Internal Guidelines prevents Directors from engaging in any transactions on the securities of the listed companies of the Group during the periods preceding the publication of results, and more generally, if they have knowledge of inside information, and from directly or indirectly engaging in short sales of such securities.
Lastly, Executive Corporate Officers must hold at least 50% of the shares they receive under a free share award plan (LTIP) in registered form until the end of their term of office.
To the Company’s knowledge, none of the Company’s Directors or Officers has agreed any other restriction on their freedom to dispose of their holdings in the Company’s capital without delay.
5.1.4.3 Other information
Court rulings and bankruptcy
To the Company’s knowledge, and as at the date of this Universal Registration Document, no Corporate Officer had, within the past five years:
− been convicted of fraud;
− been involved in bankruptcy, receivership or liquidation proceedings; or
− been barred by a court from serving as a member of an administrative, managerial or supervisory body of a listed company or from being involved in the management or business operations of a listed company.
Family ties
To the Company’s knowledge, there are no family ties among Company Directors and Officers, or between the Directors and Officers and the Executive Committee members.
Conflicts of interest
Under Article 16 of the Board of Directors’ Internal Guidelines, which may be consulted on the Group’s website at www.orange.com under the heading Group/Governance (see Section 5.2.1.4 Internal Guidelines), each Director must notify the Chairman of the Board and the Lead Director, if one has been appointed, of any situation concerning them liable to give rise to a conflict of interest with a Group company (see Section 5.2.1.7 Lead Director).
In addition, Article 16.3 of these Internal Guidelines stipulates that for any situation concerning a Director that may create a conflict of interest, the Director concerned shall abstain from the vote on the corresponding resolution.
Moreover, a declaration relating to the existence or non-existence of a situation of conflict or divergence of interests (even potential) is requested annually from the Company’s Directors and Officers as part of the preparation of the Universal Registration Document, as well as when they take office and if they are reappointed. At its meeting of February 7, 2024, the GCSERC took note of the annual declarations of the Directors and Officers (see Section 5.2.1.2 Independent Directors).
To the best of the Company’s knowledge and as at the date of this Universal Registration Document, there is no potential conflict of interest between the duties of Directors or Corporate Officers with regard to Orange and their private interests or other duties.
To the best of the Company’s knowledge, with the exception of the shareholders’ agreement referred to in Section 6.2.1.2 of the Company’s 2023 Universal Registration Document, there are no arrangements or agreements with any major shareholder, customer, supplier or any other third party under which any member of the Board of Directors or Corporate Officer has been appointed to the Board of Directors or Company’s General Management (respectively).
5.1.4.4 Shares and stock options held by members of the Executive Committee
As at the date of this document, to the best of the Company’s knowledge, the members of Orange’s Executive Committee, including Christel Heydemann, Chief Executive Officer, owned a total of 78,599 Orange shares, i.e. 0.003% of the capital.
As at the date of this document, the members of the Executive Committee do not hold any stock options, the Company has no such plans in place.
5.2 Operation of the management and supervisory bodies
5.2.1 Operation of the Board of Directors
The Board of Directors presides over all decisions relating to the Group’s major strategic, economic, employment, financial or technological policies and monitors the implementation of those policies by General Management, in accordance with its corporate interest and taking into account the social, environmental, cultural and sporting aspects of its operations. It also takes into consideration the Company’s purpose.
5.2.1.1 Legal and statutory rules relating to the composition of the Board of Directors
In accordance with Article 13 of the Bylaws, the Board of Directors consists of no fewer than 12 and no more than 22 members, including three Directors elected by employees and one Director appointed by the Shareholders’ Meeting and representing employee shareholders. The term of office for Directors is four years.
Pursuant to Government Order No. 2014-948 of August 20, 2014 on the governance and capital transactions of publicly held companies, as long as the French State holds more than 10% of the Company’s share capital, it is entitled to appoint a representative to the Board of Directors, and a number of positions in proportion to its stake are reserved for members that it may propose. The public sector has three representatives on the Board of Directors: one representative appointed by Ministerial Order and two Directors appointed by the Shareholders’ Meeting.
5.2.1.2 Independent Directors
The annual assessment of Directors’ independence was carried out by the Board of Directors’ Meeting of February 14, 2024, on the basis of a proposal by the Governance and Corporate Social and Environmental Responsibility Committee (GCSERC). In assessing Directors’ independence, the Board took into account all of the criteria of the Afep-Medef Code of Corporate Governance, which state that a Director, to be considered independent:
− must not be or have been within the last five years:
- an employee or executive Corporate Officer of the Company,
- an employee, executive Corporate Officer or Director of a consolidated subsidiary of the Company,
- an employee, executive Corporate Officer or Director of the parent company or a consolidated subsidiary of the parent company;
− must not be an executive Corporate Officer of a company in which the Company directly or indirectly holds a position on the Board of Directors or in which an employee appointed as such, or a person who is an executive Corporate Officer of the Company (or who has been in the previous five years), holds the position of Director;
− must not be a customer, supplier, commercial banker, investment banker or advisor:
- that is material to the Company or its Group, or
- for which the Company or its Group represents a significant share of business.
The assessment of the potential materiality of the relationship with Orange or its Group must be discussed by the Board, and the qualitative and/or quantitative criteria used in this assessment (continuity, economic dependence, exclusivity, etc.) must be explicitly stated in the Corporate Governance Report:
− must not have close family ties with a Director or Officer;
− must not have been a Statutory Auditor of the Company within the last five years;
− must not have been a Director of the Company for more than 12 years. Under this criterion, loss of the status of Independent Director occurs on the date at which this period of 12 years is reached.
The Afep-Medef Code recommends presenting a summary table of each Director’s position with regard to independence criteria. The analysis of the GCSERC was thus carried out with regard to these criteria; the summary table appears at the end of this section.
The three Directors representing the public sector and the four Directors elected by employees or representing employee shareholders cannot, by definition, be deemed independent under the Afep-Medef Code. Christel Heydemann, Director and Chief Executive Officer, is furthermore considered to be non-independent due to her executive role within Orange.
With regard to the Directors considered to be independent, including the Non-Executive Chairman, the GCSERC reviewed, firstly, their annual declarations made when preparing this document, including a section on potential conflicts of interest, and, secondly, any business relationships between the Orange group and these Directors or the companies that employ them, or in which they may hold office.
The GCSERC also examined the nature of the volumes of business dealings and partnerships with listed companies in which Company Directors hold office. Given the importance attached to the independence of the Chairman of the Board of Directors when this office is separate from that of the Chief Executive Officer, the GCSERC once again reviewed the business relationship between the Company and BNP Paribas which, in 2023, involved financial flows that are not likely to call into question the Committee’s past review of the independence of the Chairman of the Board of Directors. The Chairman did not participate in the discussions or the vote on the Orange Bank matter. The review also indicated that some of these companies are customers of Orange Business (formerly Orange Business Services) for "business" telecommunication services or Group suppliers in the normal course of business and for non-material amounts across the Orange group. The Board also reviewed any declared consultancy services that the Company Directors had carried out.
The Board of Directors considered, given the nature and volume of the business relationships in question and the declaration of independence made by each of the aforementioned Directors, that these existing relationships are not material either for the Orange group or for any of the Directors or groups or entities to which the Directors concerned belong. The Board of Directors concluded that these relationships are therefore not likely to compromise their independence.
Following the discussions, Valérie Beaulieu, Anne-Gabrielle Heilbronner, Jacques Aschenbroich, Alexandre Bompard, Gilles Grapinet, Momar Nguer and Frédéric Sanchez - seven of the Board’s 15 members - were deemed to be independent under the criteria of the Afep-Medef Code.
With the exception of Directors elected by employees or representing employee shareholders who are not taken into account by the Afep-Medef Code for the purpose of calculating the proportion of Independent Directors, as of the date of this document, the Board had seven Independent Directors out of 11, which is close to two-thirds of the Board - a proportion well above the Afep-Medef Code recommendation.
The table below presents the position of each Independent Director with regard to the independence criteria set in the Afep-Medef Code (Article 10.4).
Directors’ independence |
Jacques Aschenbroich |
Valérie Beaulieu |
Alexandre Bompard |
Anne-Gabrielle Heilbronner |
Gilles Grapinet |
Momar Nguer |
Frédéric Sanchez |
Criterion 1: Is not and has not been an employee, Director or Officer within the last five years |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 2: Does not hold cross-directorships |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 3: Does not have significant business relationships |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 4: Does not have close family ties with a Director or Officer |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 5: Has not been a Statutory Auditor of the Company within the last five years |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 6: Has not have been a Director of the Company for more than 12 years |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 7: Has non-executive Corporate Officer status: does not receive variable compensation in cash or shares or any compensation relating to the Company’s performance |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
Criterion 8: Has major shareholder status: does not participate in the control of the Company |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
✔ |
The detailed list of the positions held by Directors and Officers is provided in Section 5.1.4 Information on Directors, Officers and Senior Management.
5.2.1.3 Applying the principle of diversity and balanced representation between women and men
The Board ensures that its membership complies with statutory provisions, specifically with regard to diversity and the balanced representation of women and men on the Board.
At the date of this document, the Board of Directors had a total of six women out of 15 Directors. In accordance with the criteria resulting from the laws of January 27, 2011 (on the balanced representation of women and men on Boards of Directors and supervisory boards and on professional equality) and of May 22, 2019 (on the growth and transformation of companies, known as the PACTE Act), the proportion of women on the Board was 45% (five women out of 11 members). This percentage does not take into account directors elected by employees or representing employee shareholders.
Furthermore, pursuant to Article L. 22-10-10 of the French Commercial Code and the Afep-Medef Code, Article 13 of the Company’s Internal Guidelines (see Section 5.2.1.4 Internal Guidelines) states that diversity in the composition of the Board and its committees also refers to indicators such as age, nationality, qualifications and professional experience.
This provision is consistent with the expectations of Directors expressed in the assessment of the operation of the Board and its committees conducted the end of 2023 and January 2024 regarding the need to have diverse profiles present on the Board.
Diversity of expertise on the Board
An assessment of the key skills and expertise of the members of the Board has been carried out by an external firm among the Directors and shows that the Board, due to the diversity of the profiles and experience of its members, both in France and internationally, has the necessary qualities to understand the matters presented to it.
Several directors, whether because of their professional experience, initial training or years of involvement in the work of the Board of Directors, already had or have now developed technical expertise relevant to Orange’s business activities (in particular in telecommunications, cybersecurity and the Cloud).
With respect to social and environmental responsibility, in the second half of 2023 the members of the Board were invited to a series of training sessions on the Group’s challenges and their climate and environmental responsibility. A significant proportion of the Board’s Independent Directors have also worked for companies recognized for their CSR performance. Likewise, one employee director brings specific expertise in eco-design to the Board.
Lastly, some directors have spent a large part of their careers abroad and add their international perspective and culture to the Board.
The map below, produced at the beginning of 2024 by an external consultant who had performed the assessment of the functioning of the Board and its committees, shows a balanced distribution between the different types of skills required and brought to the Board by its 15 members.
5.2.1.4 Internal Guidelines
In 2003, the Board of Directors adopted Internal Guidelines, which lay down the guiding principles and procedures for its operations and those of its committees. They are available on the website www.orange.com, under the heading Group/Governance.
The Internal Guidelines specify, among other details, the respective responsibilities of the Board of Directors, the Chairman and the Chief Executive Officer, stipulating limits to their powers; they also set the rules governing the composition, powers and operating procedures of each Board committee.
The Internal Guidelines also specify the rules governing the information provided to Directors and meetings of the Board.
The Internal Guidelines have been updated several times by the Board of Directors to reflect changes in the Company’s governance. The most recent adjustment was made at the Board meeting of February 14, 2024, on the recommendation of the GCSERC, and concerned implementation of the Government Order No. 2023-1142 of December 6, 2023 transposing the Corporate Sustainability Reporting Directive (the "CSRD") of December 16, 2022. The purpose of this change is to give the Audit Committee responsibility for monitoring the non-financial reporting process (sustainability reporting).
5.2.1.5 Chairman of the Board of Directors
Article 1 of the Internal Guidelines of the Board of Directors specifies the role and duties of the Chairman.
The Chairman represents the Board of Directors and, except in unusual circumstances, is the only person authorized to act and speak in the Board’s name. The Chairman organizes and guides the work of the Board of Directors and ensures the efficient running of the corporate bodies in line with the principles of good governance. He or she liaises between the Board of Directors and the Company’s shareholders, in coordination with General Management; he or she monitors the quality of the Company’s financial information. When the roles of Chairman of the Board of Directors and Chief Executive Officer are split, he or she may, in close coordination with General Management, represent the Company in its high-level relations with the public authorities, the Group’s major partners and key customers, both within France and internationally. In this case, he or she is briefed regularly by the Chief Executive Officer on the significant events and situations relating to Group operations, and he or she may seek any information from the Chief Executive Officer needed to inform the Board of Directors and its committees. The Chairman may meet with the Statutory Auditors in order to prepare the work of the Board of Directors and the Audit Committee. He or she may attend meetings of Board Committees under the conditions provided for in the Internal Guidelines.
In accordance with Articles 29-1 and 29-2 of French Law No. 90-568 of July 2, 1990 regarding the organization of the public postal service and France Télécom, the Chairman of the Board of Directors also has the power to appoint and manage the civil servants employed by the Company. Since the separation of functions in 2022, the Chairman decided to delegate this power to the Chief Executive Officer.
Pursuant to the Company’s Bylaws, the Chairman of the Board of Directors can remain in office until the age of 70. If this age is reached by the Chairperson while in office, the age limit shall be extended in order to allow the Chairperson of the Board of Directors to carry out their required duties until their term of office expires.
5.2.1.6 Committees of the Board of Directors
The Board of Directors is supported by expertise from three specialized committees. Their role is to provide informed input for the Board’s discussions and assist in preparing its decisions. These committees meet as often as is necessary. Their powers and operating procedures are set out in the Internal Guidelines of the Board of Directors. In line with the Afep-Medef Code, significant responsibilities are given to Independent Directors. Orange also believes that it is important that each committee benefits from the presence of at least one Director representing the public sector and at least one member representing employees or employee shareholders, enabling different opinions to be taken into account in the work of the committees (see Section 5.2.1.8 Board and committee activities during the fiscal year).
Thus, with the exception of the Chairman, who is free to attend all committee meetings, all of the Directors sit on a committee based on the choices discussed and made by the Board.
Composition of the Board Committees as at the date of this document
Year created |
Chairman |
Members | |
Audit Committee |
1997 |
Gilles Grapinet (1) (2) |
Valérie Beaulieu (1) Sébastien Crozier Céline Fornaro |
Governance and Corporate Social and Environmental Responsibility Committee (GCSERC) |
2003 |
Anne-Gabrielle Heilbronner (1) |
Anne Lange Momar Nguer (1) Magali Vallée |
Strategy and Technology Committee (STC) |
2022 (3) |
Frédéric Sanchez (1) |
Alexandre Bompard (1) Thierry Chatelier Vincent Gimeno Bpifrance Participations (Thierry Sommelet) |
(1) Independent Director.
(2) Audit Committee’s financial expert.
(3) Replacing the Innovation and Technology Committee (CIT).
Audit Committee
The composition of the Audit Committee complies with the recommendations of the Afep-Medef Code and with the provisions of the Internal Guidelines of the Board of Directors. In accordance with the Internal Guidelines, the Audit Committee therefore has at least three members appointed by the Board. At least two-thirds of members must be independent (excluding Directors elected by employees or representing employee shareholders, who are not taken into account). The Chairman of the Audit Committee is chosen from among the Independent Directors.
At its meeting of May 23, 2023, the Board acted on the recommendation of the GCSERC in appointing Gilles Grapinet, an Independent Director newly elected by the Shareholders’ Meeting held the same day, as Chairman of the Audit Committee and financial expert.
The Committee does not include any Corporate Officers and its composition also complies with the provisions of Article L. 821-67 of the French Commercial Code relating to the establishment of a specialized committee to follow up on questions relating to the preparation and control of accounting and financial information.
The French Commercial Code was revised following the transposition of the provisions of the Corporate Sustainability Reporting Directive (the "CSRD") through promulgation of Government Order 2023-1142 of December 6, 2023. The changes, which took effect on January 1, 2024, are mainly as follows:
− the Audit Committee now has new sustainability responsibilities: it must expand its monitoring of the financial reporting process and the disclosure of information to include sustainability aspects and, where applicable, make recommendations to ensure their integrity;
− with respect to sustainability reporting, the Audit Committee must monitor the effectiveness of the internal control and risk management systems, and of the internal audit function, where applicable;
− it must report to the Board on a regular basis on the outcome of the assurance of sustainability reporting and explain how this work contributed to the integrity of financial reporting and sustainability reporting.
Every year the Audit Committee is also given a presentation by General Management on risk mapping in the Company and in particular the effectiveness of the risk management system, the major risks facing the Group, and fraud prevention and detection mechanisms. Furthermore, it issues a recommendation regarding the Statutory Auditors nominated for appointment, organizes their selection process and submits a reasoned recommendation to the Board regarding their choice and their compensation terms and conditions. It monitors the Statutory Auditors’ fulfillment of their engagement and approves, where applicable, the provision of services other than the certification of the financial statements, for such services that are not prohibited by law or Orange’s rules. It also issues a recommendation regarding the independent third party nominated for appointment by the Shareholders’ Meeting to certify the sustainability information. The Committee also studies all investment or divestment projects that meet the criteria set out in Article 2 of the Internal Guidelines of the Board of Directors, and prepares the relevant Board deliberations. The Audit Committee may also request that any audit or internal/external review be carried out on any matter that it considers to fall within its remit.
Finally, the Chairman of the Audit Committee is assigned a particular role, and reports to the Board of Directors on a regular basis on the execution of the Committee’s functions, as well as the outcome of the statutory audit and how this has contributed to the integrity of the financial reporting, and the role the Audit Committee has played in this process. It immediately informs the Board of any difficulties encountered and submits a summary of the Audit Committee’s discussions.
The responsibilities of the Audit Committee are detailed in Article 7 of the Internal Guidelines of the Board of Directors.
Financial expertise within the Audit Committee
Members of the Audit Committee are required to have or gain financial or accounting expertise. In accordance with the provisions of Article L. 821-67 of the French Commercial Code and Section 407 of the US Sarbanes-Oxley Act, it must also comprise at least one person with specific expertise in the field of finance, accounting or statutory auditing, who must be independent (the "financial expert").
Gilles Grapinet was appointed financial expert to the Audit Committee during the Board of Directors’ meeting of May 23, 2023, due mainly to his role as Financial Inspector, his past roles as economic and financial advisor to the Prime Minister and Chief of Staff to the Minister of the Economy, Finance and Industry, and his current position as Chief Executive Officer of Worldline.
Governance and Corporate Social and Environmental Responsibility Committee
In accordance with the Internal Guidelines of the Board of Directors, the Governance and Corporate Social and Environmental Responsibility Committee (GCSERC) has at least three members appointed by the Board. Its Chairman is chosen from among the Independent Directors.
Its composition, which was changed by the Board at its meeting of May 23, 2023, was strengthened with the addition of Momar Nguer, Independent Director, who was elected by the 2023 Shareholders’ Meeting. The Committee’s composition is in line with the recommendations of the Afep-Medef Code, as it has two-thirds Independent Directors (excluding Directors elected by employees or representing employee shareholders, who are not included in this calculation).
The major areas of responsibility of this committee, whose creation is recommended by the Afep-Medef Code, are appointments and compensation, corporate social and environmental responsibility and governance. In particular, it exercises the powers of the specialized committees responsible for the appointment and re-appointment of Directors. In these areas, it is tasked in particular with making proposals to the Board of Directors, as well as to the Chairman and, as necessary, the Chief Executive Officer. The Chief Executive Officer also keeps the Committee informed of any new appointments to the Group Executive Committee; the Committee may offer, upon request of the Chief Executive Officer, its opinion on the terms and conditions for calculating the compensation of these new members, or regarding of performance share plans or LTIP (Long-Term Incentive Plans). The Committee also ensures, with regard to succession plans, that a process is in place for when terms of office expire and in situations requiring particular attention. Lastly, it continuously verifies that the members of the Board meet the criteria set out in Article 20 of the Afep-Medef Code regarding the number of positions held.
The Committee also examines, in line with the Group’s strategy, the main thrust of Human Resources and CSR policies, based on dialogue with the Group’s stakeholders, and the Group’s sustainability policy in articulation with the Audit Committee. Once a year, it reviews the Ethics Committee’s report on the Group-wide actions to implement ethics practices, and is informed about the roll-out of the Group’s compliance programs.
The responsibilities of the Governance and Corporate Social and Environmental Responsibility Committee are detailed in Article 8 of the Internal Guidelines of the Board of Directors.
Strategy and Technology Committee
In accordance with the Internal Guidelines of the Board of Directors, the Strategy and Technology Committee has at least three members appointed by the Board.
The Committee notably reviews the significant multi-annual investment programs and the major technology partnerships entered into by the Group, the Group’s strategic policies in terms of innovation and research, and its performance in this respect.
The responsibilities of the Strategy and Technology Committee (STC) are detailed in Article 9 of the Internal Guidelines of the Board of Directors.
Special committees
Article 5 of the Internal Guidelines of the Board of Directors provides that the Board may decide, for certain technical issues relating to the Company’s operations and/or issues that may involve conflicts of interest and on which the Board of Directors is expected to give its view or make a decision, to establish a special committee to review these matters in consultation with the Company’s General Management. Article 5 was amended at the request of the Board on December 5, 2018 in order to enable any Director to participate in such committees, provided that they have no conflicts of interest.
The Board of Directors appoints the Chairman, who is chosen from among the Committee’s Independent Directors.
A special committee consisting of the three committee chairs and chaired by the Chairman of the STC, Frédéric Sanchez, was established by the Board on March 29, 2023 to monitor and supervise, in the Board’s name, the progress made on the search for partners for Orange Bank. The Chairman of the Board did not participate in this work. Its efforts culminated in the announcement on June 28, 2023 of the conclusions of the strategic review of Orange Bank and the entry into exclusive negotiations with BNP Paribas (see Section 5.2.1.8 Board and committee activities during the fiscal year).
5.2.1.7 Lead Director
The Internal Guidelines of the Board of Directors provide for the appointment by the Board of a Lead Director from among the Independent Directors at the proposal of the GCSERC. A Lead Director must be appointed if the same person is both Chairman of the Board of Directors and Chief Executive Officer.
The powers of the Lead Director, if one has been appointed, are defined in Article 15.1 of the Company’s Bylaws (calling and chairing of Board meetings if the Chairman is unavailable), and in Article 10 of the Internal Guidelines, which also defines the Lead Director’s duties.
Since the separation of the offices of Chairman of the Board of Directors and Chief Executive Officer, the Board has chosen not to make use of this option.
5.2.1.8 Board and committee activities during the fiscal year
Board activities
The Board of Directors met nine times in 2023. Its meetings had a collective attendance rate of 99.4%. Individual attendance rates are presented in the table at the end of this section. Information on allocation and payment methods for Directors’ compensation is presented in Section 5.4.2.1 Amount of compensation paid or allocated for 2023 activity. The typical Board meeting lasts around 3 hours, systematically followed by an executive session, without the presence of executive management representatives.
Each meeting is generally preceded by a meeting of one or more of the Board’s committees with a view to preparing its work and deliberations. The matters discussed by the committees are reported on by their Chairperson to the Board of Directors.
In addition to overseeing the regular stages in the life of the Company (review of operating performance, quarterly results, half-year and statutory financial statements, budget review, risk factors, setting the compensation of Corporate Officers, etc.), in the first half of 2023 the Board discussed and approved the merger of Orange Caraïbe into Orange and, on completion of the strategic review conducted by the Group in consultation with a special committee, announced its intention to exit the retail banking market in France and Spain and gave its approval to enter into exclusive negotiations with BNP Paribas.
It also continued to examine the proposed merger between Orange Espagne and MásMóvil. In particular, it confirmed the implementation of this proposal based notably on the nature of the remedies presented to the Board, taking into account the updated business plan and sensitivity to market conditions. It confirmed, in accordance with Article L. 225-35 of the French Commercial Code, its authority to guarantee that its Orange Participations UK subsidiary will comply with any commitments it may make under the Investment Agreement (the Framework Agreement) and the Shareholders’ Agreement.
In Spain, it also authorized the acquisition of the TV distribution rights for Spanish soccer for the 2023-2024 season.
In the second half of the year, the Board of Directors noted the signature of the shareholders’ agreements between the Group and Capgemini for the effective creation of Bleu, a 50/50 joint venture to provide SecNumCloud-certified "Trust Cloud" solutions based on Microsoft technology, as well as the signature of the Definitive Agreement between Bleu and Microsoft.
It also noted the work done to finalize the documentation with the Romanian government before the completion of the merger between Orange Romania Communications (in which the Romanian government is a shareholder) and Orange Romania, and the restructuring actions that must be taken beforehand.
It was also kept regularly informed of the Company’s employee-related news (signing of agreements).
After consultation with the Central Social and Economic Committee (CSEC) on the Group’s strategic guidelines, its representative, as is the case every year, submitted a series of questions on these guidelines to the Board of Directors at its meeting on December 7, 2022. The Board approved the answers given at its meeting on March 29, 2023.
The Board proposed the renewal of the conditional performance share plan (long-term incentive plan, or LTIP) for Corporate officers for the period from 2024 to 2026 in line with the trajectory set to achieve the CSR objectives included in the variable remuneration policy. This system will be submitted to the vote of the Shareholders’ Meeting of May 22, 2024 (see Section 5.4.1 Report of the Board of Directors on compensation and benefits paid to Corporate Officers). The Board of Directors’ review of points related to the appointment, compensation and assessment of Corporate Officers is conducted in the absence of the interested parties. The Board also reserves the right to review the remuneration of the CEO at any time during her term of office.
At its meeting of October 23, 2023, it also verified the existence and monitoring of the effectiveness of Internal Control and financial and non-financial risk management systems in the form of a presentation by the Chairman of the Audit Committee on the work of this Committee at a special meeting.
The Board of Directors was presented with an update of the Group Vigilance Plan and the obligations regarding the Statement of Non-Financial Performance. It also approved the information on the corporate, social and environmental issues of the Group included in the Report of the Board of Directors to the Shareholders’ Meeting.
In accordance with the provisions of the Afep-Medef Code relating to the policy of gender balance in management bodies, the Board was presented with a progress report on the objectives that the Company has set for itself in terms of increasing the number of women in management bodies, in particular within the management network of the Group’s executives and leaders. It approved the annual resolution on the policy of professional and salary equality between women and men (see Section 4.3.1.3.5 Promoting diversity and inclusion - Gender equality in the workplace).
The Board has made available to shareholders and investors appropriate information, particularly in the preparation of the Shareholders’ Meeting. The Chairman of the Board has reported on his discussions with them, particularly on the Group’s strategy, business model, significant non-financial issues, and the long-term outlook.
Lastly, the Board also had the operations it had conducted (see Section 5.2.1.9 Periodic review of the operation of the Board of Directors and its committees) assessed by an independent third party and presented to the GCSERC on February 7, 2024.
Committee activities
Audit Committee
The Audit Committee met nine times in 2023. Its meetings had a collective attendance rate of 94%.
It met regularly with Orange’s Senior Management and the main managers of the Group’s Finance Department, as well as with the Head of the Group Audit, Control and Risk Management Department and the Statutory Auditors, in order to review with them their respective action plans and follow-up on these plans.
In the first half of 2023, the Audit Committee reviewed the performance of Orange’s share price relative to its benchmark indices, and was presented with a benchmark for Orange’s operating and financial performance for 2022. It was also presented with the Group’s tax contribution in its regions and the related issues.
In the second half of the year, General Management presented the Group’s insurance policy as well as the tender process for choosing an auditor for the Group’s sustainability report, in accordance with the requirements of the CSRD Directive.
At the beginning of 2024, the Chairman of the Audit Committee decided to hold executive sessions of the Audit Committee, which would meet twice a year, at the same time as the work relating to each half-yearly and annual accounts. These meetings of Committee members will be attended by the Statutory Auditors, but will not be attended by Executive Management.
Financial reporting
In 2023, the Committee analyzed the Statutory Financial Statements and Consolidated Financial Statements for the 2022 fiscal year and the first-half of 2023, together with the first- and third-quarter results for 2023. At its meeting on February 14, 2024, it reviewed the results for the fourth quarter of 2023, as well as the Statutory Financial Statements and Consolidated Financial Statements for the 2023 fiscal year. It verified that the processes for producing accounting and financial information complied with regulatory and legal requirements, especially in terms of Internal Control. In this respect, the Committee reviewed the draft Management Report and heard the Statutory Auditors’ Reports. It also reviewed the 2024 budget. The material risks and off-balance-sheet commitments and their accounting impacts, as well as the results of the asset impairment tests, were also discussed.
The Committee furthermore reviewed all financial communications prior to their publication, including, at its meeting of February 12, 2024, the content relating to the implementation of the Lead the future strategic plan.
Internal control and risk management, ethics
Before approving each set of financial statements, the Committee undertook a review of the significant litigation in which the Group is involved.
Moreover, the Committee examined the results of the annual assessment of the Financial Internal Control system, which were presented to it by Group Internal Control, and concluded that the system was effective (see Section 2.2.2.2 Summary of Internal Control work implemented pursuant to Section 404 of the Sarbanes-Oxley Act).
The Committee also reviewed the major risks that the Company believes could have a material adverse effect on its business, financial position or earnings, particularly in light of its risk mapping. It also ensured that the recommendations formulated after the internal audit assignments by Group Audit, Control and Risk Management were correctly implemented. The findings of the audit assignments as well as the schedule of upcoming audit assignments are presented on a quarterly basis. At its meeting of October 4, 2023, the Audit Committee was given a presentation by General Management on risk mapping in the Company and, in particular, the effectiveness of the risk management system, the major risks facing the Group, and fraud prevention and detection mechanisms. This meeting focused on four specific risks: "Paris 2024 Olympic and Paralympic Games," "Geopolitical situation," "Climate," and "Cyber" (action plan and remediation). This review was then debriefed to the Board of Directors so it could discuss these risks and propose areas for improvement and an action follow-up schedule. The description of material risks is presented in Section 2.1 Risk factors.
Management of debt and cash
The Committee regularly reviewed the Group’s debt refinancing and cash management policy and was given a presentation on the annual update of the Group’s derivative counterparty and cash investment limits.
Development projects and strategic plan
The Committee was informed about the position of some of the Group’s equity interests in Europe, the Middle East and Africa, and reviewed the asset impairment tests conducted at the end of 2023 at the Group’s main subsidiaries and shareholdings, based on the entities’ updated strategic plans, in order to take the 2024 budget as well as geopolitical and macroeconomic changes into account.
Statutory Auditors
The Committee reviewed the fees of the Statutory Auditors for 2023 and the financial terms of their work during the year. At the Audit Committee’s meeting of June 26, 2023, the Statutory Auditors presented their external audit plan.
Following the update to the Code of Ethics published by the International Ethics Standards Board for Accountants (IESBA), it also reviewed the new rules on statutory auditor independence relating, in particular, to the provision of non-audit services.
Governance and Corporate Social and Environmental Responsibility Committee (GCSERC)
The GCSERC met seven times in 2023. Its meetings had a collective attendance rate of 96.4%.
Compensation of Directors and Officers
In early 2023, the Committee discussed and defined the proposed targets and calculation methods for the variable components of the Chief Executive Officer’s compensation for 2023. It reviewed the results of the votes on the say-on-pay resolutions at the 2023 Shareholders’ Meeting and the comments made by investors in that context, following the contested vote at the 2022 Shareholders’ Meeting. The proposed compensation and targets for Corporate Officers for 2024 were reviewed and discussed over the course of several meetings in the second half of 2023, and finally defined in March 2024 (see Section 5.4 Compensation and benefits paid to Directors, Officers and Senior Management).
With regard to multi-year variable remuneration, the Committee also monitored the implementation of performance share plans (Long Term Incentive Plans or LTIP), in particular the results of the LTIP 2021-2023. It reviewed the draft regulations for the LTIP 2023-2025 for the Chief Executive Officer and the executives who are beneficiaries of the award, including the members of the Executive Committee, and the overall terms and conditions of a new LTIP for the 2024-2026 period, the principle of which will be put to a vote at the Shareholders’ Meeting of May 22, 2024. To support the Company’s climate objectives, the GCSERC recommended introducing a "CO2 emissions - scopes 1 and 2" indicator for annual variable compensation and a "proportion of renewable energy in electricity consumption" indicator for the LTIP (see Section 5.4.1 Report of the Board of Directors on compensation and benefits paid to Corporate Officers).
The GCSERC was also given a presentation on the clawback mechanism adopted by the Board of Directors on February 15, 2023. It applies to the Chief Executive Officer, members of the Executive Committee, and the Group Chief Accounting Officer, and took effect on October 2, 2023. This mechanism, originating in US regulation, requires companies listed in the United States, including foreign companies, to incorporate into their compensation policies a mechanism for recovering certain compensation from executives if such compensation is based wholly or in part on the achievement of any financial reporting measures or if certain accounting restatements are required due to material noncompliance, errors or misstatements.
Lastly, the Committee prepared the breakdown of compensation for Directors in respect of the 2023 fiscal year and reassessed the Director compensation policy for the 2024 fiscal year in order to account for the large volume of work done by the Board and its committees, and the lessons learned from the benchmarking on this topic (see Section 5.4.2 Board of Directors’ report on Directors’ compensation).
Governance and operation of the Board
The Committee reviewed the Board’s Corporate Governance Report, which is attached to the Management Report.
It also examined, as it does every year, the situation of each of the Independent Directors with regard to the independence criteria set out in the Afep-Medef Code (see Section 5.2.1.2 Independent Directors).
At its meeting of February 7, 2024, the Committee took note of annual declarations made by Orange’s Directors and Officers, in which certain information is required: the number of Orange shares held and any related-party transactions, terms of office and positions held in 2023, personal situation, potential conflicts of interest, etc.
The members of the GCSERC noted that in light of the annual declarations made by Directors and Officers, no specific conflicts of interest had been identified. This review, together with other work carried out by the Committee, led to the proposal to the Board of Directors’ Meeting of February 14, 2024 that seven Directors be considered independent within the meaning of the Afep-Medef Code (see Section 5.2.1.2 Independent Directors).
In the second half of 2023, the GCSERC asked the Board to repeat the assessment of its operation and that of the three committees. As this exercise had been carried out quite recently, the external consultant who performed the previous assessment was asked to focus on the topics he deemed to be the most important.
At the same time, the GCSERC oversaw the implementation of the recommendations from the previous assessment carried out at the end of 2022. It enlisted General Management to develop and provide training sessions to the Board on climate risks and the adaptation strategy adopted by operators, including Orange; the requirements of the Corporate Sustainability Reporting Directive (CSRD); and operators’ CO2 emissions and their mitigation strategy.
Lastly, at the beginning of 2024, the Committee recommended that the Board revise the Internal Guidelines to account for the entry into force of the Government Order n° 2023-1142 of December 6, 2023 transposing the CSRD Directive on sustainability reporting (see Section 5.2.1.4 Internal Guidelines).
Nomination
Throughout the fiscal year, the Committee has continued its ongoing monitoring work ("director watch") in order to be able to have a list of director profiles that may correspond to the Board’s needs and thus enable it to prepare for any necessary replacement. The Committee has remained particularly attentive to any profile with expertise in the fields of innovation and technology, particularly internationally, and who is or has been in General Management. It systematically ensures that the proportion of independent directors recommended in the Afep-Medef Code be respected when directors are appointed to committees.
The Committee also periodically reviewed the membership of the Board’s committees and, in February 2023, recommended reappointing Anne-Gabrielle Heilbronner and Alexandre Bompard as Independent Directors and Anne Lange as director elected by Orange’s Shareholders’ Meeting based on the recommendation of the government.
In March 2023, the GCSERC also recommended appointing Céline Fornaro, a director appointed by Ministerial Order, to replace Stéphanie Besnier on the Audit Committee in view of her background and skills.
In addition, the GCSERC noted both the resignation of Bernard Ramanantsoa, Independent Director and Chairman of the Audit Committee, and the expiration of the term of office of Jean-Michel Severino, Independent Director and member of the Audit Committee, at the close of the Shareholders’ Meeting of May 23, 2023, and recommended that the Board appoint Gilles Grapinet and Momar Nguer as Independent Directors. After their terms of office were approved by shareholders at that Shareholders’ Meeting, the GCSERC asked the Board, upon review of their background and experience, to appoint these two new directors as member and Chairman of the Audit Committee and member of the GCSERC, respectively. This proposal by the GCSERC, which was approved by the Board at its meeting of May 23, 2023, allowed the GCSERC to welcome a new independent member and implement an expected recommendation.
At the close of the Shareholders’ Meeting of May 23, 2023, the GCSERC noted that Alexandre Bompard was reappointed with 73.04% of the vote. This figure appeared to reflect his attendance rate in 2022, which was 62% and below that of the other directors. In 2023, Alexandre Bompard’s attendance rate at Board meetings was 100% (see table below).
In the second half of 2023 and in advance of the Shareholders’ Meeting of May 22, 2024, the GCSERC recommended that both Christel Heydemann, Chief Executive Officer of Orange since April 4, 2022, and Frédéric Sanchez, whose first term as Independent Director expires at that Shareholders’ Meeting, be reappointed as directors. It also initiated and monitored the process for appointing the next Director representing employee shareholders, as the term of this office, currently held by Thierry Chatelier, also expires at that Shareholders’ Meeting.
Lastly, the Chairwoman of the GCSERC, in conjunction with the relevant stakeholders, verified that a succession plan is in place for Corporate Officers and General Management.
CSR
The Committee reviewed the Group’s strategy and important issues related to its corporate social and environmental policies. It examined the major achievements in this area in 2023, the components of the Statement of Non-Financial Performance ("SNFP"), the roll-out of the Group’s Vigilance Plan in 2023, and the materiality matrix. The Committee reported to the Board of Directors on its work on this subject.
With regard to CSR and climate change issues, the GCSERC wanted to strengthen the skills of the members of the Board of Directors in this area and, to that end, suggested that they undergo training on the topic in 2023, as detailed in the "Governance and operation of the Board" section above. The Chairwoman of the GCSERC also suggested that a training plan should be developed and that the societal aspect of the CSR discussions should be more in-depth, and she proposed a list of topics in this respect.
In the first half of the year, the GCSERC was given a presentation focused on Orange’s "Scope 3" strategy and the Committee dedicated one of its meetings to climate strategy, sustainability-linked bonds and digital inclusion. The annual allocation and impact report for the funds raised under Orange’s sustainable finance program was presented to the Committee.
Lastly, the tender process for choosing an auditor for the Group’s sustainability report, in accordance with the requirements of the CSRD Directive, was also presented.
Ethics and compliance
The GCSERC monitored the progress of the roll-out of the Group’s corruption prevention program, in particular relating to the implementation of measures resulting from the French Law of December 9, 2016, known as the Sapin II Law, and Government Order No. 2017-1180 of July 19, 2017 on the publication of non-financial information. In particular, the Committee reviewed the roll-out of the code of conduct ("Group Code of Ethics"). The Committee also examined the annual report on ethics and compliance and studied the Group-wide actions resulting in the implementation of the ethics and compliance program (see Section 2.2 Activity and risk management framework). It was also given a refresher on stock trading conduct and on the rules applicable to permanent insiders with respect to their transactions in the Group’s financial instruments.
The GCSERC was also presented with the steps taken in response to the findings of the report by the AFA (Agence française anticorruption - French Anti-Corruption Agency) received on June 16, 2023 further to the inspection initiated in October 2021, which concerns the operations of "Orange Business Services."
Lastly, the Committee continued to discuss the development and monitoring of the succession plan for Corporate Officers.
Employment
The Committee monitored changes in the yearly indicators of the employee satisfaction survey. At its meeting of November 20, 2023, the Committee was presented with a detailed annual report on workplace gender equality and equal pay at Orange, specifically covering the proportion of women in the workforce, an analysis of pay gaps, and the awareness-raising and training initiatives undertaken in 2023. It prepared the relevant Board resolution, stressing to General Management the need to ensure that this policy be uniformly applied in all Group entities. The gender balance policy within the governing bodies was reviewed by the GCSERC and was the subject of a recommendation to the Board, which, in accordance with the new provisions of the Afep-Medef Code, determines the gender balance objectives within these bodies. This policy is supplemented by the special attention paid to the proportion of women on the Boards of Directors of the Group’s subsidiaries and on the specialized committees reporting to the Executive Committee.
Strategy and Technology Committee (STC)
The STC met four times in 2023. Its meetings had a collective attendance rate of 95%.
Over the course of 2023, the STC focused on issues relating to the multi-service strategy and to changes in the economic models in the telecom sector. It then devoted one meeting to submarine cables and satellite networks. Lastly, it had extensive discussions about strategies in the B2B segment and, more specifically, within the Orange Business and Orange Cyberdefense divisions.
Lastly, at its meetings in early January 2024, the STC focused on the topic of innovation at Orange, and then of clod strategy.
Special committee
A special committee, as provided for by Article 5 of the Internal Guidelines, consisting of the three committee chairs and chaired by Frédéric Sanchez, Chairman of the STC, was established by the Board on March 29, 2023 to monitor and supervise, in the Board’s name, the progress made on the search for partners for Orange Bank. The work of this special committee, in which the Chairman did not participate, was spread over the months of April, May and June and ended with the announcement on June 28, 2023 of the findings of the strategic review of Orange Bank and the entry into exclusive negotiations with BNP Paribas.
Strategic seminar
All members of the Board of Directors met on January 22 and 23, 2024 for a strategic seminar. This meeting gave the Directors an opportunity to provide an initial update on the implementation of the Lead the future strategic plan announced in February 2023, in particular on topics related to the business activities and the market in France and on the African continent, Orange Business’s business model, cybersecurity, innovation, and the human and financial challenges.
Individual attendance of Board members
In accordance with Article 12.1 of the Afep-Medef Code, the table below presents the attendance of each member of the Board of Directors in 2023.
Attendance of members of the Board of Directors | ||||
Board of Directors |
Audit Committee |
GCSERC |
STC | |
Jacques Aschenbroich |
100% |
N/A |
N/A |
N/A |
Valérie Beaulieu |
100% |
100% |
N/A |
N/A |
Stéphanie Besnier (1) |
100% |
100% |
N/A |
N/A |
Alexandre Bompard |
100% |
N/A |
N/A |
75% |
Thierry Chatelier |
100% |
N/A |
N/A |
100% |
Sébastien Crozier |
100% |
100% |
N/A |
N/A |
Céline Fornaro (1) |
100% |
83% |
N/A |
N/A |
Vincent Gimeno |
100% |
N/A |
N/A |
100% |
Gilles Grapinet (2) |
100% |
100% |
N/A |
N/A |
Anne-Gabrielle Heilbronner |
100% |
N/A |
100% |
N/A |
Christel Heydemann (3) |
100% |
N/A |
N/A |
N/A |
Anne Lange |
100% |
N/A |
100% |
N/A |
Momar Nguer (2) |
100% |
N/A |
100% |
N/A |
Bernard Ramanantsoa (2) |
100% |
100% |
N/A |
N/A |
Frédéric Sanchez |
100% |
N/A |
N/A |
100% |
Jean-Michel Severino (2) |
100% |
75% |
N/A |
N/A |
Bpifrance Participations represented by Thierry Sommelet |
100% |
N/A |
N/A |
100% |
Magali Vallée |
89% |
N/A |
86% |
N/A |
(1) Stéphanie Besnier left her position as Deputy Chief Executive Officer of the French State Investment Agency (APE) and, hence, her mandate as Board member of Orange on March 5th, 2023. By ministerial order dated March 24th, 2023, Céline Fornaro was appointed member of the Board of Directors of Orange as representative of the French State, in replacement of Stéphanie Besnier.
(2) Gilles Grapinet and Momar Nguer were appointed Independent Directors by the Shareholders’ Meeting of May 23, 2023, each for a four-year term, i.e. until the close of the Shareholders’ Meeting called to approve the financial statements for the fiscal year ending December 31, 2026, to replace Bernard Ramanantsoa and Jean-Michel Severino, respectively.
(3) Christel Heydemann, given her role as Chief Executive Officer and non-Independent Director, is not a member of any committee.
5.2.1.9 Periodic review of the operation of the Board of Directors and its committees
Generally, the operation of the Board of Directors and its committees is alternately assessed internally via self-assessment and externally with the help of an independent consultant.
At the end of 2023, the GCSERC nevertheless asked the Board to hire an external consultant to perform another assessment, after the exercise conducted at the end of 2022, in order to consolidate the results of the previous assessment and account for the addition of three new Directors during the year. As in the past, this exercise was based on the responses to a questionnaire and a one-on-one interview. All the Directors participated in this exercise.
The assessor appointed by the Board was chosen after a review by the GCSERC, due to their recognized skills and knowledge of the issuers listed on the Paris market. No conflicts of interest were identified during this review that were likely to call this assessor’s independence into question.
The Board reviewed the GCSERC’s report on the results of this latest assessment at its meeting of February 14, 2024.
The report by the external assessor shows that that almost all the Directors believe that, since the assessment conducted at the end of 2022, but also since the change in governance implemented in May 2022, the operation of the Board of Directors has continued to improve in a number of areas, in particular:
− the Directors’ strong commitment to the Company;
− a supportive environment for work and for dialogue on all topics, strengthened by regular executive sessions;
− a successful working relationship between the Chairman and the Chief Executive Officer;
− the quality of the information provided, backed by benchmarks, allowing Directors to make a positive contribution to General Management.
The Directors also expressed their satisfaction with the quality of the presentations made at the annual strategic seminar.
Regarding the specific operation of the committees, the Directors highlighted an improvement in the work, particularly on the risk monitoring side, and in the reporting by the Audit Committee. They also appreciated the quality of the work done by the GCSERC, in particular on the compensation policy, and that of the STC’s work on the Group’s strategy and strategy seminar. The work of this committee enabled the Board to provide substantive input and to prepare the Group’s major decisions.
Their recommendations included requests that the content of the presentations be more concise and that they be made available to Directors further in advance of the meetings, whenever possible. The Directors would also like certain topics to be addressed more regularly, in particular those that touch on major challenges, such as the Group’s changing needs in terms of skills, innovation and IT, and on mature markets. Lastly, a number of Directors expect the compensation they are awarded to be more in line with the work that they do, and would like additional efforts to be made to prepare the Company for crisis situations and to respect the confidentiality of the discussions.
This assessment was used to evaluate the actual contribution made by all members of the Board of Directors, and they each received an individual report.
5.2.1.10 Description of the procedure in place for assessing usual related-party transactions
Pursuant to Article L. 22-10-12 of the French Commercial Code, the Boards of Directors of listed companies are required to implement a procedure to regularly assess whether agreements relating to current operations and entered into on an arm’s length basis meet these conditions.
On December 3, 2019, the Orange SA Board of Directors adopted an internal procedure to assess whether the agreements concluded between (i) Orange SA and (ii) the Directors and Officers of Orange SA or the public sector (including the French government, Bpifrance Participations, central government administrations and companies controlled by the government) or any company in which an Orange SA Director or Officer holds a position, can continue to be described as agreements "relating to current operations and entered into on an arm’s length basis."
As part of the procedure, the Group Legal Department is responsible for (i) centralizing the recording of these freely negotiated agreements with the Legal Departments of the Orange SA divisions, and (ii) carrying out subsequent assessments.
This involves assessing agreements prior to their signature, agreements being classified on a case-by-case basis by the Legal Department in question, with the support of the Operational, Finance and Compliance Departments of the Group, on the basis of cumulative criteria (the operation must be both current and entered into on an arm’s length basis), and a re-examination of these agreements is planned on an annual basis. An annual in-depth check is also carried out on material agreements to ensure that they continue to meet the criteria for current agreements and arm’s length conditions at the level of Orange SA. Material agreements are those subject to significant commitments for Orange SA or decisions made in the Group Investment Committee.
A report on this procedure is presented annually to the Board of Directors for approval. The Board will examine the effectiveness of the procedure for evaluating current agreements entered into on an arm’s length basis within the Group.
For the year ended December 31, 2023, the above-mentioned report established that the agreements identified, subject to the procedure, could continue to be classified as current agreements entered into on an arm’s length basis. The report was presented to the Audit Committee on February 12, 2024 and was approved by the Board of Directors’ Meeting of February 14, 2024 on the recommendation of the Audit Committee. Its review led to the conclusion that the internal procedure was effective and that it was implemented under the same conditions in 2023.
5.2.2 Operation of General Management
5.2.2.1 Management structure
Since April 4, 2022, Orange has operated under a governance structure that separates the offices of Chairman of the Board of Directors and Chief Executive Officer. Accordingly, Christel Heydemann has served as Chief Executive Officer since that date. At the close of the Shareholders’ Meeting of May 19, 2022, the Board of Directors confirmed it was maintaining the way in which General Management was organized, as decided on January 28, 2022, and resolved to entrust the office of Chairman of the Board of Directors to Jacques Aschenbroich and to reappoint the Chief Executive Officer for a term equal to that of the Chairman of the Board of Directors. Alongside her appointment as Chief Executive Officer, Christel Heydemann retained her position as Director.
5.2.2.2 Restrictions on the powers of the Chairman and Chief Executive Officer or of the Chief Executive Officer
In accordance with the law and the Company’s Bylaws, the Chief Executive Officer is vested with extensive powers to act in the Company’s name. He exercises these powers within the limits of the corporate scope and subject to those powers expressly attributed by the law and the Internal Guidelines of the Board of Directors. He is supported in this task by the Executive Committee and any Delegate CEOs.
Article 2 of the Internal Guidelines of the Board of Directors provides that the Chief Executive Officer must obtain the Board’s prior authorization before committing the Company to:
− investments or divestments exceeding 200 million euros per transaction falling within the consolidation scope, and when the total consolidated exposure exceeds the Board’s prior authorization for such an investment; or
− any new investment (excluding acquisitions of telecommunication spectrum) under the Group’s major multi-annual technology programs in its main geographic regions (such as FTTH, 5G, etc.) in an average amount per annum exceeding 2.5% of Group capital expenditure budgeted during the year in question.
In addition, acquisitions of telecommunication spectrum by the Group in regions representing at least 10% of consolidated revenues are subject to prior presentation to the Board of Directors, which will set a maximum amount that can be bid at auction.
Investments or divestments remain, as the case may be, subject to independent review by the governing bodies of the subsidiaries in question.
Furthermore, any investment or divestment that falls outside the scope of the Company’s strategic guidelines and involves a transaction in excess of 20 million euros must first be approved by the Board of Directors. Where relevant, the Board of Directors must be kept informed of any significant new developments regarding such transactions.
The Chief Executive Officer must also obtain the authorization of the Board of Directors annually, within caps determined by the latter, to issue sureties, endorsements or guarantees or for the Company to issue bonds or similar securities or arrange syndicated bank loans.
5.2.2.3 Executive Committee and Group governance committees
The Executive Committee, under the authority of the Chief Executive Officer, is responsible for managing the Group and coordinating the implementation of its strategic guidelines. It oversees the achievement of operational, employee-related and technical objectives, as well as those relating to the allocation of financial resources. Its meetings are generally held weekly. In addition, given the importance of issues relating to France, the Executive Committee meets regularly as the "France Territory Committee" to deal with issues specific to this country. The composition of the Executive Committee is set out in Section 5.1.3 Executive Committee.
Within the Company, a series of powers and signing authorities is established by the Chief Executive Officer for each of the members of the Executive Committee, each of whom has applied them in their respective area of expertise.
Several specialized committees reporting to the Executive Committee were created to apply or oversee the implementation of its directives throughout the Group. As part of the "New Company Model" project, which is the core of the Lead the future strategy, the Group’s committee structure was reviewed with an eye to simplification and streamlining.
The Group’s governance is now supported by 10 key committees: the Development Committee; the Workforce & Com&Ben Committee; the Diversity, Equity and Inclusion Committee; the CSR and Ethics Committee; the Commitments Committee; the Supplier Industrial Strategy Committee; the Group Investment Committee; the Group Risk Committee; the Group Security Committee; and the Brand, Communications and Customer Experience Committee. Each committee has adopted a charter defining its operating and resolution procedures. These committees are also responsible for monitoring risk management with regard to financial liabilities, thereby helping limit the Group’s overall exposure.
Name and frequency |
Composition (permanent members) |
Roles |
Development Committee (every six weeks) |
− Chief Executive Officer (Chairwoman) − Group Strategy Director (Secretary) − Group Executive Director Finance, Performance and Development − Executive Director of Human Resources for the Group − Group Secretary General − Group M&A Director |
Coordinate between BUs/M&A/Group Strategy Director in the upstream phases of M&A projects to facilitate interactions and ensure the overall governance of the M&A process |
Workforce & Comp & Ben Committee (three times a year) |
− Executive Director of Human Resources for the Group (Chairman) − Digital Director of Group Employment and HR Strategy Management (Alternate Chairman and Secretary) − Group Compensation & Benefits Director (Alternate Chairman and Secretary) − Group Executive Director Finance, Performance and Development − New Company Model Director − Director of Group Controlling Department |
Recommend key decisions for the Group with respect to employment and compensation, as well as skills management and organization. In particular, the Committee approves the main long-term guidelines for employment and skill needs, the wage increase budget to be implemented for each subsequent year, and the implementation of any new compensation or benefit plans for managers and senior management. The Committee also provides input into each entity’s budgeting process and supports the divisions through their expected financial and staffing trajectories in order to maintain the strategic plan equation |
Diversity, Equity and Inclusion Committee (twice a year) |
− Executive Director of Human Resources for the Group (Co-Chairman) − Executive Director of Orange Business (Co-Chairman) − Director of Group Diversity, Equity, Inclusion and QLWC (Secretary) − Executive Director of Communication − Executive Director of Corporate Social Responsibility for Orange − Designated representatives of the members of the Executive Committee − Group Talent & Development Director − Group Sector and Executive Director |
Define and approve the Group strategy and guidelines with respect to Diversity, Equity and Inclusion and monitor the delegation of their implementation |
CSR and Ethics Committee (every two months) |
− Group Secretary General (Co-Chairman) − Executive Director of Corporate Social Responsibility for Orange (Co-Chairman) − Group CSR Governance and Trust Director (Co-Secretary) − Group Chief Compliance Officer (Co-Secretary) − Group Executive Director Finance, Performance and Development − Executive Director of the Orange Innovation entity − Executive Director of Human Resources for the Group − Executive Director of Orange Business − Director of Group Sustainable Finance − Group Inspector General |
Monitor implementation of the Group’s CSR, ethics and compliance strategy and identify warning signs. |
Commitments Committee (at least six times a year or more if necessary) |
− Group Secretary General (Chairman) − Group Legal Director (Secretary) − Group Executive Director Finance, Performance and Development − Director of Group Controlling Department − Group Chief Accounting Officer − Director of Group Global Support and Performance − Director of Group Financial Planning and Control − Director of the Controlling Department for Cross-cutting and Corporate Functions − Legal Director for Telecom Competition and Regulation − Legal Director for Companies |
Review the Group’s litigation that is likely to have a significant impact on its financial position or image and the main off-balance sheet commitments |
Supplier Industrial Strategy Committee (twice a year) |
− Group Executive Director Finance, Performance and Development (Co-Chairman) − Executive Director of the Orange Innovation entity (Co-Chairman) − Director of Global Procurement & Supply Chain (Secretary) − Executive Director Europe region (outside of France) for Orange − Executive Director and CEO of Orange Africa & Middle East − Executive Director of Orange France − Executive Director of Orange Business − Executive Director and CEO of Orange Wholesale − Executive Director of Cybersecurity Activities and CEO of Orange Cyberdefense − Executive Director of Corporate Social Responsibility for Orange − Director of Group Strategy |
Guide, validate and control the implementation of the industrial supplier procurement policy within the scope of IS and Networks purchasing. The industrial supplier strategy aims to protect the Group’s assets and preserve a competitive and sustainable supplier ecosystem over the medium and long term, in support of Orange’s business and technological strategy across its entire footprint. |
Group Investment Committee (once a week or as often as necessary) |
− Chief Executive Officer (Chairwoman) − Group Executive Director Finance, Performance and Development (Alternate Chairman) − Head of the Office of the Group Executive Director Finance, Performance and Development (Secretary) − Executive Director of Human Resources for the Group − Group Secretary General − Executive Director of the Orange Innovation entity − Members of the Executive Committee involved in the projects under consideration − Group Strategy Director − Head of the Office of the Chief Executive Officer − Group Inspector General − Group Legal Director − Group Chief Compliance Officer − Director of Group Controlling Department − Director of Group CAPEX |
Ensure the traceability of authorizations for investments and value-creating projects, manage claims, commitments and risks, and comply with the obligations of the Sarbanes-Oxley Act of 2002 |
Group Risk Committee (at least four times a year or more if necessary) |
− Chief Executive Officer − Group Executive Director Finance, Performance and Development (Chairman) − Director of Group Audit, Control and Risk Management (Secretary) − Deputy Director of Group Risk Management − Executive Director of Human Resources for the Group − Executive Director of the Orange Innovation entity − Group Secretary General − Executive Director of Corporate Social Responsibility for Orange − Executive Director of Orange France − Executive Director of Europe region (outside of France) for Orange − Executive Director and CEO of Orange Africa & Middle East − Executive Director of Orange Business |
Ensure an overall vision of the Group’s risks and of the effectiveness of the systems for managing these risks, in accordance with regulations and with the Group’s policies |
Group Security Committee (at least twice a year or more if necessary) |
− Executive Director of Cybersecurity Activities and CEO of Orange Cyberdefense (Co-Chairman) − Executive Director of the Orange Innovation entity (Co-Chairman) − Group Security Director (Secretary) − Director of the Department for SECD Governance − Executive Director of Orange France − Executive Director of Europe region (outside of France) for Orange − Executive Director and CEO of Orange Africa & Middle East − Executive Director of Orange Business − Executive Director and CEO of Orange Wholesale − Executive Director of Communication − Executive Director of Cybersecurity Activities and CEO of Orange Cyberdefense − Chief Information Security Officer |
Approve the Group’s security and resilience strategy and ensure effective implementation of policies and action plans |
Brand, Communications and Customer Experience Committee |
− Executive Director of Communication (Chairman) − Head of the Office of the Executive Director of Communication (Secretary) − Chief Executive Officer − Members of the Executive Committee − Director of Branding, Sponsoring and Content − Director of Customer Experience |
Supervise and direct strategies and initiatives related to the brand, communications and customer experience |
5.3 Reference to a Code of Corporate Governance
Orange refers to the Afep-Medef Corporate Governance Code for listed companies revised in December 2022, which can be viewed on the Orange, Afep and Medef websites. The Company hereby declares that it complies with the recommendations of the Afep-Medef Code as at the date of this document.
Main differences with the rules of the New York Stock Exchange
Orange has endeavored to take the New York Stock Exchange (NYSE) Corporate Governance rules into account. However, since the Company is not a US company, most of these rules do not apply to it, and the Company is allowed to follow the rules applicable in France instead. Accordingly, Orange has elected to refer to the Afep-Medef Code, where the recommendations differ in some respects from the NYSE governance rules applicable to US companies listed on the NYSE.
The main differences between Orange’s practices and the rules applicable to US companies are described in the Group’s US Annual Report (Form 20-F), filed with the US Securities and Exchange Commission (SEC).
5.4 Compensation and benefits paid to Directors, Officers and Senior Management
5.4.1 Report of the Board of Directors on compensation and benefits paid to Corporate Officers
The Company refers in general, and in particular with regard to compensation, to the Afep-Medef Corporate Governance Code for listed companies in its revised version of December 2022.
This report presents the itemized total compensation and benefits of any kind paid to Directors and Officers during the fiscal year ended December 31, 2023, or awarded in respect of that same fiscal year, as well as the compensation policy for Directors and Officers for their terms of office, pursuant to Article L. 22-10-8 I. of the French Commercial Code.
This report was prepared under the aegis of the Governance and Corporate Social and Environmental Responsibility Committee (GCSERC).
5.4.1.1 Compensation policy for executive and non-executive Corporate Officers
The compensation policy for executive Corporate Officers is in line with the Group’s strategic guidelines. It is not only a management tool for attracting, motivating, and retaining the talent the Company needs, but also meets the expectations of shareholders and other stakeholders.
The compensation policy for Corporate Officers is set by the Board of Directors upon the recommendation of the GCSERC, while taking into account applicable laws (particularly Articles L. 22-10-8 and L. 22-10-9 of the French Commercial Code), and recommendations from the Afep-Medef Code.
It includes a clawback mechanism that came into effect in 2023 as required by the US Securities and Exchange Commission (SEC), mandated by the Dodd-Frank Act and incorporated into the New York Stock Exchange (NYSE) regulations concerning the listing standards relating to recovery of erroneously awarded compensation.
Governance
The general principles and criteria for the compensation and assessment of Directors and Officers are prepared and examined by the GCSERC, which then makes recommendations to the Board of Directors for decision.
The GCSERC may use external benchmarks to evaluate the positioning of the compensation of Directors and Officers. In this respect, surveys are periodically conducted with the help of a firm specializing in executive compensation to ensure that compensation levels and structures are competitive in relation to a panel of comparable companies in size and complexity, including companies based in France and internationally that are the Group’s competitors in telecommunications and the digital transformation, as well as services companies where the French State holds less than a majority of the capital.
The GCSERC ensures the proper alignment of the compensation policies for the Company’s executive Corporate Officers and other Senior Management in terms of the annual variable compensation and Long-Term Incentive Plans (LTIPs) involving the awarding of performance shares, and more generally the balance of Orange’s compensation packages with the analysis of changes in internal pay ratios.
Corporate Officers do not participate in discussions of the Board of Directors about their own compensation.
Compensation structure for executive Corporate Officers (Chief Executive Officer and any Delegate Chief Executive Officers)
The compensation structure for executive Corporate Officers mainly consists of fixed compensation, annual variable compensation, multi-year variable compensation and a supplemental retirement plan.
Fixed compensation
The fixed compensation of Corporate Officers is based on:
− the importance and complexity of their responsibilities;
− the experience and background of the individuals holding the various positions;
− market analyses for comparable positions.
Annual variable compensation
The purpose of annual variable compensation is to inspire executive Corporate Officers to achieve the annual performance targets set for them by the Board of Directors, in line with the Group’s strategic guidelines. Pursuant to the Afep-Medef Code, the potential amount of variable compensation is expressed as a percentage of fixed compensation.
Variable compensation depends on performance levels applied to financial and non-financial indicators, with both reflecting the overall performance expected. The entire variable compensation is based on a quantitative performance measurement, including for the non-financial indicators.
Multi-year variable compensation
Orange offers executive Corporate Officers a performance share plan (Long Term Incentive Plan, or LTIP) for their multi-year variable compensation, subject to the achievement of financial, market, social and environmental objectives, to retain talent and further align their compensation with that of the company’s shareholders, in line with market practices. The members of the Executive Committee and some employees holding key positions within the Orange group are also eligible for the plan.
In addition to the performance conditions, the vesting of the shares is subject to the executive Corporate Officers still being in office on the date the performance conditions assessment is completed. Beneficiaries must hold in registered form at least 50% of the shares thus granted to them until the end of their term of office.
In the event that a beneficiary’s corporate office comes to an end, the Board may decide whether or not they may keep an unvested performance share plan, in which case, the maximum number of performance shares that may be granted will be prorated to the length of time the employee was with the company.
The use of a multi-year cash incentive variable compensation plan may again be considered in the future if regulatory changes or any other circumstances were to make it difficult or impossible for the Company to use a performance-based share plan.
Holding a corporate office in an Orange subsidiary
Executive Corporate Officers may be required to hold offices in Group companies. In such cases, they do not receive compensation (e.g. "attendance compensation") for the offices held.
Clawback mechanism
Following changes in US regulations for companies listed in the United States, a clawback mechanism for recovering certain incentive-based compensation, both annual and multi-year, partially or wholly contingent on the attainment of financial performance indicators, came into effect in 2023. It will affect the Chief Executive Officer and members of the Executive Committee, in the event that the Company is required to prepare an accounting restatement due to material noncompliance with a financial reporting requirement, or to an error that would be material in this context or could lead to a material misstatement.
Supplemental retirement plan
In addition to the mandatory and supplementary pension plans, a supplemental retirement plan has been set up for executive Corporate Officers. Under this plan, the Company pays an annual matching contribution, half of which comprises premiums paid to a third-party organization under a defined-contribution retirement plan (an "Article 82" plan) and half consists of a cash sum, since enrollment in the plan gives rise to immediate taxation. This contribution is calculated on the basis of 20% of fixed plus variable compensation. The premium paid to the third-party organization is considered as salary and therefore treated as a benefit in kind.
Plans related to involuntary termination of service or involuntary loss of corporate office
When recruiting the Chief Executive Officer, the Company realized that the compensation package of her predecessor, who was not under an employment contract with the Company in accordance with the recommendations of the Afep-Medef Code, as is also the case for Christel Heydemann, did not include any severance pay should he lose his corporate office (including income replacement benefits equal to unemployment benefits), which does not align with market practices. This led the Board to decide, based on the recommendation of the GCSERC, to institute severance pay, non-compete compensation, and Compensation Insurance for Business Owners and Executive Officers (private unemployment insurance set up with Association pour la Garantie Sociale des Chefs et Dirigeants d’Enterprise - GSC) for Christel Heydemann, Chief Executive Officer.
In accordance with Afep-Medef Code recommendations, the total amount of severance pay, non-compete compensation, and Compensation Insurance for Business Owners and Executive Officers may not exceed two years of compensation (annual fixed and variable).
Note that the insurance premium paid to GSC for involuntary loss of office is considered as salary and treated in payroll as a benefit in kind.
Compensation structure for non-executive Corporate Officers (separated Chairman of the Board of Directors)
Fixed compensation
The fixed compensation of the separated Chairman of the Board of Directors is established by comparing the compensation levels and structures of a panel of comparable companies.
Compensation allocated to Directors (e.g. "attendance compensation")
The Board of Directors determines how compensation is allocated among Directors for their work (e.g. "attendance compensation"). The Board may decide that the separated Chairman of the Board will not receive compensation as a Director (see Section 5.4.2.2 Directors’ compensation policy).
The non-executive Chairman of the Board of Directors does not receive any other compensation (particularly variable compensation or performance shares).
Other items
Benefits in kind
Corporate Officers are provided, if they so desire, with a company car and driver, consulting services providing personal legal assistance related to their duties, an annual health check, and Internet/telephone access and equipment, including IT equipment, necessary to perform their duties.
Note that the premiums paid by the Company under the "Article 82" supplemental retirement plan for executive Corporate Officers, together with the insurance premiums for involuntary loss of office paid to GSC, are considered as salary and treated in payroll as a benefit in kind.
Furthermore, expenses incurred by Corporate Officers in the course of their duties are reimbursed by the Company upon presentation of receipts.
Miscellaneous
Executive Corporate Officers are enrolled in the Orange group’s death and disability and supplementary health insurance plans under the same conditions as enrolled employees.
5.4.1.2 Amount of compensation paid or allocated to Corporate Officers for 2023
Tables 1 to 11 below follow the standard presentation as recommended in Annex 4 of the Afep-Medef Code.
Summary of the compensation, stock options and shares allocated to each executive Corporate Officer (Table 1)
2023 |
2022 | |
Christel Heydemann | ||
Compensation allocated in respect of the fiscal year (breakdown in Table 2) (1) |
2,160,716 |
1,450,155 |
Valuation of options allocated during the fiscal year |
- |
- |
Valuation of LTIP performance shares allocated during the fiscal year (2) |
581,700 |
527,100 |
Valuation of other long-term compensation plans |
N/A |
N/A |
Total |
2,742,416 |
1,977,255 |
N/A: Not Applicable.
(1) Compensation prorated as applicable.
(2) The equivalent value of the performance shares awarded in 2023 under the LTIP 2023-2025 is the IFRS fair value at their award date (see Table 6 Performance shares awarded during the fiscal year).
Summary of the compensation paid to each executive Corporate Officer (Table 2)
Gross amounts (in euros) |
2023 |
2022 | ||
Amounts allocated in respect of the fiscal year |
Amounts paid during the fiscal year |
Amounts allocated in respect of the fiscal year |
Amounts paid during the fiscal year | |
Christel Heydemann | ||||
Fixed compensation |
900,000 |
900,000 |
667,500 |
667,500 |
Variable compensation |
938,700 |
616,970 |
616,970 |
N/A |
Multi-year variable compensation (LTIP) |
- |
- |
- |
- |
Deferred compensation "Article 82": Paid directly to the beneficiary (50%) (2) |
151,697 |
151,697 |
66,750 |
66,750 |
Exceptional compensation |
N/A |
N/A |
N/A |
N/A |
Attendance compensation (1) |
N/A |
25,583 |
25,583 |
58,000 |
Benefits in kind (including deferred compensation "Article 82": Paid into a life insurance plan (50%) (2) |
170,319 |
170,319 |
73,352 |
73,352 |
Total |
2,160,716 |
1,864,569 |
1,450,155 |
865,602 |
N/A: Not Applicable.
(1) Christel Heydemann waived her entitlement to "attendance compensation" in her capacity as executive Corporate Officer. Christel Heydemann was allocated "attendance compensation" for her role as Company Director until she was appointed Orange’s Chief Executive Officer.
(2) As part of the defined-contribution retirement plan ("Article 82" plan), Christel Heydemann has benefitted from a cash sum since April 4, 2022, because enrollment in the plan gives rise to immediate taxation. This cash sum represents 50% of the contribution which is calculated on the basis of 20% of her fixed plus variable compensation (see Section 5.4.1.1 Compensation policy for executive and non-executive Corporate Officers).
Annual fixed compensation
In accordance with the resolutions approved by the Shareholders’ Meeting of May 23, 2023, the compensation of Christel Heydemann was set at 900,000 euros annually.
Annual variable compensation
In respect of fiscal year 2022, Christel Heydemann received variable compensation in 2023 of 616,970 euros. These amounts were approved by the Shareholders’ Meeting of May 23, 2023 (ex post say-on-pay).
For fiscal year 2022, Christel Heydemann received variable performance-related compensation of 100% of her annual fixed compensation, and up to 150% for over performance.
Reminder of targets and results achieved for 2023
For fiscal year 2023, executive Corporate Officers’ annual variable compensation was based on the weighted average of five indicators focusing on the Group’s growth (organic revenue growth rate), profitability (organic cash flow from telecom activities & EBITDAaL), quality of service, and CSR performance. The expected performance levels were set by the Board of Directors, with financial indicators based on the Group’s budget.
Annual variable compensation for 2023 was calculated using a flexible payout curve whereby each indicator was assigned an achievement rate based on actual performance.
Organic revenue growth (for 15%)
The revenue growth target (on a comparable basis) set for the executive Corporate Officers for 2023 was in line with the Group’s budget. With results exceeding the budget by 20 million euros, the achievement rate of this indicator is at 103.7%.
Organic cash flow from telecom activities (for 15%)
The target for organic cash flow of telecom activities set for the executive Corporate Officers for 2023 was in line with the Group’s budget. With organic cash flow from telecom activities of 3,661 million euros, the achievement rate of this indicator is at 140.3%.
EBITDAaL (for 20%)
The EBITDAaL target set for the Corporate Officers for 2023 was in line with the Group’s budget. With EBITDAaL of 13,035 million euros, the achievement rate of this indicator is at 130.00%.
B2C and B2B service quality (for 17%)
The customer experience indicator is broken down into two sub-indicators: mass-market customer experience (B2C customer survey), which accounts for 75% of the result, and global B2B customer experience (B2B customer survey), which accounts for 25%.
The B2C and B2B sub-indicators are Mean Recommendation Scores (MRS) given by customers. These surveys are conducted in several countries: in France, in the Europe region and the MEA region, and with the B2B customers of Orange Business. Geographic and functional measurement scopes are relatively unchanged from fiscal year 2022.
For 2023, the target for the B2C indicator was 82.20 and the actual was 81.90. For the B2B indicator, the target was 8.10 and the actual was 7.94.
The achievement rate for the B2C indicator is at 40.00%. The flexible payout curve put the achievement rate for the B2B indicator is at 20.00%.
CSR performance (for 33%)
The aim was to achieve overall progress in three CSR components:
− 16.50% for the employee survey; this CSR performance criterion remains critically important for a group such as Orange, which will continue to use an independent firm to measure it. The result is examined on the basis of two themes:
- 8.25% for the participation rate.
This indicator gave a score of 100.00%;
- 8.25% for the results of the employee survey.
This indicator gave a score of 50.00%;
− 8.25% for the proportion of women in management networks.
This indicator gave a score of 133.30%;
− 8.25% for access to training.
This indicator gave a score of 150.00%.
Amount of annual variable compensation for 2023
• Achievement rate for Christel Heydemann
Criterion |
Weighting |
2023 performance targets |
Note | ||
Threshold |
Target |
Maximum | |||
Organic revenue growth |
15.00% |
Budget -0.42 pts |
Budget |
Budget +0.63 pts |
15.50% |
Organic cash flow |
15.00% |
Budget -€50m |
Budget |
Budget +€200m |
21.00% |
EBITDAaL |
20.00% |
Budget -€88m |
Budget |
Budget +€160m |
26.00% |
B2C service quality |
12.75% |
81.7 |
82.2 |
82.7 |
5.10% |
B2B service quality |
4.25% |
7.9 |
8.1 |
8.3 |
0.90% |
Employee survey | |||||
Participation rate |
8.25% |
55.00% |
65.00% |
75.00% |
8.30% |
Results of the survey |
8.25% |
67.00% |
77.00% |
87.00% |
4.10% |
Proportion of women in management networks |
8.25% |
33.10% |
33.70% |
34.30% |
11.00% |
Training access rate |
8.25% |
91.00% |
92.50% |
94.00% |
12.40% |
Weighted total |
100.00% |
104.30% |
The application of these achievement rates to the executive Corporate Officers’ respective annual variable compensation objectives yields the following amounts for 2023:
Executive Corporate Officer |
Fixed compensation (in euros) |
Target (%) |
Achievement rate (%) |
Variable compensation due (in euros) |
Payment rate (%) |
Christel Heydemann |
900,000 |
100.00% |
104.30% |
938,700 |
104.30% |
Performance share plans
Christel Heydemann was not eligible for the LTIP 2021-2023.
Results of the LTIP 2021-2023
The performance conditions of this plan are measured using the following four indicators:
− the comparative change between the Orange Total Shareholder Return (TSR) and the TSR of the Stoxx Europe 600 Telecommunications index over the duration of the plan, for 30%;
− organic cash flow as defined by the plan, accumulated over three fiscal years, for 50%;
− the reduction in CO2 emissions compared to 2015, for 10%;
− the proportion of women in the Group’s management networks, for 10%.
Total Shareholder Return (TSR)
Orange’s TSR over the period considered was 40.57%, higher than the Stoxx Europe 600 Telecommunications index TSR over the same period of 9.58%, which gives this indicator an achievement rate of 100% (30% of the total).
Organic cash flow from telecom activities
Cumulative organic cash flow from telecom activities over the 2021-2023 period was 9.5 billion euros, above the target of 9.3 billion euros, which gives this indicator an achievement rate of 100% (50% of the total).
Reduction in CO2 emissions compared to 2015
The reduction in CO2 emissions compared to 2015 was 37.4% versus the target of 19%, which gives this indicator an achievement rate of 100% (10.00% of the total).
Proportion of women in the Group’s management networks
This proportion was 34.1% at December 31, 2023 versus the target of 34%, which gives this indicator an achievement rate of 100% (10.00% of the total).
Valuation of LTIP 2021-2023 in number of shares
The combined results of the four indicators give a result of 100.00%
Executive Corporate Officer in office at December 31, 2023 |
Target |
Achievement rate (%) |
Shares vested LTIP 2021-2023 |
Christel Heydemann |
N/A |
N/A |
N/A |
N/A: Not Applicable. Christel Heydemann was not eligible for the LTIP 2021-2023 plan.
Breakdown of benefits in kind in 2023
The executive Corporate Officers were able to receive the following benefits in kind in 2023:
Benefits in kind |
Company car |
Health check |
Legal advice |
Internet/telecommunication |
GSC |
Supplemental retirement plan (Art 82) |
Christel Heydemann |
X |
X |
X |
X |
X |
Internal pay ratios
The internal pay ratios for 2023 and the four previous years are published in accordance with the Afep recommendations:
− selected entity: Orange SA, which represents 82.43% of employees on permanent contracts in France (72,441 employees);
− scope: all private or public employees, civil servants excluding expatriates present throughout the prior and current years;
− compensation taken into account: compensation (full-time equivalent for part-time employees) and benefits in kind paid in the current year on a gross basis and LTIP allocated in the current year measured at fair value in accordance with IFRS;
− individuals concerned: in the interest of clarity, the information used in the calculation for Stéphane Richard, Chairman and CEO, and Ramon Fernandez, Delegate CEO, was retained, even though these executives were no longer Corporate Officers in 2023.
Ratio |
2019 |
2020 |
2021 |
2022 |
2023 | |
Stéphane Richard |
versus mean |
37.9 |
31.4 |
31.86 |
21.07 |
N/A |
versus median |
43.0 |
35.5 |
36.01 |
23.83 |
N/A | |
Christel Heydemann |
versus mean |
N/A |
N/A |
N/A |
23.76 |
42.81 |
versus median |
N/A |
N/A |
N/A |
26.87 |
47.87 | |
Ramon Fernandez |
versus mean |
22.0 |
17.2 |
17.37 |
21.17 |
N/A |
versus median |
24.9 |
19.5 |
19.64 |
23.93 |
N/A |
N/A: Not Applicable.
The year 2019 is atypical, as was 2018, since it simultaneously includes the payment of a cash LTIP and the award of an LTIP benefit in the form of performance shares (maximum available for award).
Thus, the cash LTIP 2016-2018 paid in 2019 and the award of the LTIP 2019-2021 in performance shares are both taken into account in the calculation of the 2019 ratio.
As such, the table below presents a pro forma calculation of the ratios (with an impact only in 2019).
2019 |
2020 |
2021 |
2022 |
2023 | |
Stéphane Richard | |||||
% change in compensation |
-0.6% |
-1.5% |
-4.13% |
-33.00% |
N/A |
ratio versus mean |
32.7 |
31.4 |
31.86 |
21.07 |
N/A |
ratio versus median |
37 |
35.5 |
36.01 |
23.83 |
N/A |
Christel Heydemann | |||||
% change in compensation |
N/A |
N/A |
N/A |
N/A |
81,4%* |
ratio versus mean |
N/A |
N/A |
N/A |
23.76 |
42,81 |
ratio versus median |
N/A |
N/A |
N/A |
26.87 |
47,87 |
Ramon Fernandez | |||||
% change in compensation |
-5.1% |
-4.3% |
-4.83% |
24.16% |
N/A |
ratio versus mean |
18.5 |
17.2 |
17.37 |
21.17 |
N/A |
ratio versus median |
20.9 |
19.5 |
19.64 |
23.93 |
N/A |
Employees of Orange SA | |||||
% change in average compensation |
2.7% |
2.5% |
-5.5% |
1.89% |
N/A |
% change in median compensation |
3.8% |
2.8% |
-5.6% |
1.88% |
N/A |
N/A: Not Applicable.
* Regarding Christel Heydemann, the comparison of 2022 and 2023 remuneration and ratios is not relevant. Indeed Christel Heydemann took office on April 4, 2022 and therefore only received approximately 9/12th of her annual fixed salary and no variable compensation.
Change in performance
Amounts in accordance with IFRS (in millions of euros) |
2019 |
2020 |
2021 |
2022 |
2023 |
(on a historical basis) | |||||
Revenue |
42,238 |
42,270 |
42,522 |
43,471 |
44,122 |
Change (in %) |
2.1% |
0.1% |
0.6% |
2.23% |
1.50% |
EBITDAaL |
12,856 |
12,680 |
12,566 |
12,963 |
13,035 |
Change (in %) |
(1.1)% |
(1.4)% |
(0.9)% |
3.16% |
0.55% |
Operating income |
5,930 |
5,521 |
2,521 |
4,801 |
4,969 |
Change (in %) |
22.8% |
(6.9)% |
(54.3)% |
90.44% |
3.49% |
Summary of the compensation paid to each non-executive Corporate Officer (Table 3)
The offices of Chairman and Chief Executive Officer have been separated since April 4, 2022, with the appointment of Christel Heydemann as Chief Executive Officer (executive Corporate Officer) and Stéphane Richard serving as separated Chairman of the Board of Directors (non-executive Corporate Officer) at the time. Jacques Aschenbroich was subsequently appointed Chairman of the Board of Directors (non-executive Corporate Officer) as of May 19, 2022, at the close of the Shareholders’ Meeting.
Gross amounts (in euros) |
2023 |
2022 | ||
Amounts allocated in respect of the fiscal year |
Amounts paid during the fiscal year |
Amounts allocated in respect of the fiscal year |
Amounts paid during the fiscal year | |
Jacques Aschenbroich | ||||
Compensation (fixed and variable) (1) |
450,000 |
450,000 |
277,016 |
277,016 |
Other compensation (2) |
- |
- |
- |
- |
Benefits in kind |
7,584 |
7,584 |
1,264 |
1,264 |
Total |
457,584 |
457,584 |
278,280 |
278,280 |
(1) The duties of non-executive Chairman of the Board (separated office) are paid solely through annual fixed compensation, prorated as applicable.
(2) Jacques Aschenbroich does not receive "attendance compensation" in his sole capacity as director.
Annual fixed compensation
In accordance with the decision made by the Shareholders’ Meeting of May 23, 2023, the compensation paid to Jacques Aschenbroich in his capacity as Chairman of the Board of Directors (non-executive Corporate Officer) remained unchanged at 450,000 euros.
Annual variable compensation
In his capacity as non-executive Corporate Officer, Jacques Aschenbroich is not eligible for annual or multi-year variable compensation.
The Chairman of the Board of Directors benefits from a vehicle provided by the Company (see Section 5.4.1.1 Compensation policy for executive and non-executive Corporate Officers).
Stock options awarded during the fiscal year to each executive Corporate Officer by the Company or by any Group company (Table 4)
During the 2023 fiscal year, neither Orange SA nor any other of the Group’s companies awarded any stock options to executive Corporate Officers.
Stock options exercised during the fiscal year by each executive Corporate Officer (Table 5)
None.
Performance shares awarded during the fiscal year to each executive Corporate Officer by the Company or by any Group company (Table 6)
Executive Corporate Officers of the Company are only entitled to receive performance shares awarded by Orange SA, where such awards are applicable.
Executive Corporate Officer |
Award date |
Number of shares awarded |
Value of the award (in euros) (IFRS fair value) |
Vesting date of shares |
First possible disposal date for a portion of them (1) |
Performance conditions |
Christel Heydemann |
July 25, 2023 |
70,000 |
581,700 |
March 31, 2026 |
50% as of April 1, 2026 |
Yes |
(1) In accordance with the recommendations of the Afep-Medef Code and pursuant to the rules of the plans applicable to them, executive Corporate Officers must retain at least 50% of the finally vested shares until the end of their term of office.
NB: the performance shares awarded to Christel Heydemann during fiscal year 2023 account for 0.0026% of the share capital.
Performance shares vesting to each executive Corporate Officer during the fiscal year (Table 7)
Executive Corporate Officer |
Plan |
Number of shares vested (1) |
Christel Heydemann |
N/A |
N/A |
N/A: Not Applicable.
(1) In accordance with the recommendations of the Afep-Medef Code, and pursuant to the rules of the plans applicable to them, executive Corporate Officers must retain at least 50% of the shares that become available, until the end of their term of office.
History of stock option awards (Table 8)
The last Orange SA stock-option plan matured on May 21, 2017.
History of performance share awards (Table 9)
LTIP 2020-2022 |
LTIP 2021-2023 |
LTIP 2022-2024 |
LTIP 2023-2025 | |
Date of Shareholders’ Meeting |
May 19, 2020 |
May 18, 2021 |
May 19, 2022 |
May 23, 2023 |
Date of Board of Directors’ meeting |
July 29, 2020 |
July 28, 2021 |
July 27, 2022 |
July 25, 2023 |
Total number of free shares awarded |
1,762,000 |
1,813,000 |
1,835,000 |
1,915,000 |
o/w to Christel Heydemann |
N/A |
N/A |
70,000 |
70,000 |
Vesting date |
March 31, 2023 |
March 31, 2024 |
March 31, 2025 |
March 31, 2026 |
First disposal possible for Christel Heydemann (executive Corporate Officer) |
N/A |
N/A |
50% as of April 1, 2025 |
50% as of April 1, 2026 |
Performance conditions |
Yes |
Yes |
Yes |
Yes |
Number of shares vested (delivered) |
914,026 |
1,544,944 |
N/A |
N/A |
Number of shares canceled |
162,750 |
210,000 | ||
Number of residual shares (2) |
1,599,250 |
1,603,000 |
N/A: Not Applicable.
(1) Some beneficiaries received a number of shares calculated on a pro rata basis due to specific events (retirement or departure to a non-consolidated group entity).
Summary of the multi-year variable compensation paid to each executive Corporate Officer (Table 10)
LTIP 2019-2021 (1) |
LTIP 2020-2022 (1) |
LTIP 2021-2023 (1) |
LTIP 2022-2024 (1) |
LTIP 2023-2025 (1) | |
See Table 7, "Performance shares that became available during the fiscal year," and Table 9, "History of performance share awards" |
See Table 9, "History of performance share awards" |
See Table 9, "History of performance share awards" |
See Table 6, "Performance shares awarded during the fiscal year" |
See Table 6, "Performance shares awarded during the fiscal year" | |
Christel Heydemann |
N/A |
N/A |
N/A |
527,100 euros |
581,700 euros |
N/A: Not Applicable.
(1) The equivalent value is the IFRS award date fair value multiplied by the number of performance shares initially awarded.
Other benefits granted to executive Corporate Officers (Table 11)
Executive Corporate Officer |
Employment contract |
Supplemental retirement plan |
Compensation or benefits due or likely to be due upon termination or change of office |
Compensation payable under a non-compete clause |
Christel Heydemann |
No |
Yes |
Yes |
Yes |
The Chief Executive Officer, Christel Heydemann, does not have an employment contract with the Company.
5.4.1.3 Compensation structure for the Chief Executive Officer and for the Chairman of the Board of Directors for 2024
The principles of the compensation policy for Corporate Officers are described in Section 5.4.1.1 Compensation policy for executive and non-executive Corporate Officers.
The Board of Directors took into account:
− by what margin the Shareholders’ Meeting approved the resolutions relating to the compensation of Corporate Officers for 2023;
− investors’ comments and requests.
The Board of Directors has not made any changes to the compensation structure of the Chief Executive Officer or the Chairman of the Board of Directors or in the amounts and targets involved are the same as in the previous fiscal year. The Board has, however, looked into the components of this remuneration, and in order to better reflect the Group’s priorities for the Chief Executive Officer, has made modifications:
− in the annual variable remuneration:
- modification of the balance between Revenue (from 15% to 10%) and organic cash flow (from 15% to 20%);
- removal of the management network feminization rate, which represented a weight of 8.25%, as it is already present in the LTIP;
- introduction of a CO2 emissions reduction indicator - scopes 1 and 2, with a weight of 8.25%;
- refocusing of the access rate to training on strategic skills training for the Group (Compliance and Cybersecurity);
− in the multi-year variable remuneration:
- introduction of an indicator "Renewable energy share in electricity consumption", replacing the CO2 emissions reduction indicator - scopes 1 and 2, which has been introduced in the annual variable remuneration;
- modification of the comparison reference of the Total Shareholder Return (TSR) indicator, to compare with a "peer group" of European groups in the Telecommunications sector;
- within the limit of the maximum allocation level (see below), if the Orange TSR indicator or the organic cash flow indicator of telecom activities exceed the target at 100% but the composite indicator target is not achieved at 100%, the overall performance will take these results into account while maintaining a global acquisition rate capped at 100%.
Annual fixed compensation
The Board of Directors has not made any changes to the levels of annual fixed compensation for the Corporate Officers:
− the annual fixed compensation of the Chief Executive Officer, Christel Heydemann, remains unchanged at 900,000 euros;
− the annual fixed compensation of the Chairman of the Board of Directors, Jacques Aschenbroich, remains unchanged at 450,000 euros.
In accordance with the provisions of Article L. 22-10-8 II of the French Commercial Code, this fixed compensation for Corporate Officers is subject to resolutions that will be submitted for a vote by the Shareholders’ Meeting of May 23, 2023 (ex-ante "say-on-pay") (see Section 6.5 Draft resolutions, twelfth through fourteenth resolutions).
Annual variable compensation
The Board of Directors decided that the calculation methods for the Chief Executive Officer’s annual variable compensation will be as follows for 2024, it being specified that the Chairman of the Board of Directors is not eligible for annual variable compensation:
− target amount of variable compensation provided targets are achieved: 100% of the Chief Executive Officer’s fixed compensation;
− over performance of up to 150% of the Chief Executive Officer’s fixed compensation.
Executive Corporate Officer |
Fixed compensation (in euros) |
Target (%) |
Target amount (in euros) |
Min (%) |
Max (%) |
Maximum amount achievable (in euros) |
Christel Heydemann |
900,000 |
100% |
900,000 |
0.00% |
150% |
1,350,000 |
Annual variable compensation structure for the Chief Executive Officer
− financial indicators accounting for 50% of the annual variable compensation calculated based on the budget in effect, including:
- revenue growth for 10%,
- organic cash flow (telecom activities) for 20%,
- EBITDAaL for 20%;
− non-financial indicators accounting for 50% of the annual variable compensation, including:
- service quality/customer experience for 17%:
- B2C customer experience (weighted 75%),
- B2B customer experience (weighted 25%),
- CSR performance for 33%, based on:
- 50% for the employee survey.
Considering 2 criteria: the participation rate result to the Employee barometer and the Employee Engagement rate measured by this barometer. The survey is carried out by an independent firm.
- 50% for two HR and composite CSR indicators: the strategic competencies training access rate for the Group (Compliance & Cybersecurity) and the rate of reduction in scope 1 and 2 CO2 emissions.
Annual variable compensation targets for the Chief Executive Officer
Criterion |
Weighting |
2024 performance targets (1) |
Range | ||
Threshold |
Target |
Maximum | |||
Organic revenue |
10.00% |
Target - €300 m |
Target |
Target + €300 m |
0-15.00% |
Organic cash flow |
20.00% |
Target - €150 m |
Target |
Target + €150 m |
0-30.00% |
EBITDAaL |
20.00% |
Target - €150 m |
Target |
Target + €150 m |
0-30.00% |
B2C service quality |
12.75% |
81.2 |
82.2 |
83.2 |
0-19.125% |
B2B service quality |
4.25% |
7.85 |
7.95 |
8.05 |
0-6.375% |
Employee survey | |||||
Participation rate |
8.25% |
62.00% |
67.00% |
72.00% |
0-12.375% |
Employee Engagement Rate |
8.25% |
71.00% |
73.00% |
75.00% |
0-12.375% |
Strategic competencies training access rate |
8.25% |
90.00% |
95.00% |
100.00% |
0-12.375% |
Reduction in CO2 emissions (scopes 1 and 2) |
8.25% |
-33.90% |
-35.7% |
-37.5% |
0-12.375% |
Weighted total |
100.00% |
0-150% |
(1) The target corresponds to the budget in effect excluding Orange Spain.
Termination of service
In the event of departure from the Group, the annual variable compensation of the Chief Executive Officer will be prorated to her time in office.
Multi-year variable compensation (LTIP 2024-2026)
The Board of Directors has decided to implement a new long-term incentive plan (LTIP) for the period 2024-2026, in line with previous plans. This LTIP is the subject of a resolution aimed at authorizing the Board to grant free shares to executive corporate officers and certain employees of the Company or of companies or groups linked to the Company, the vote on which will be submitted for the approval of the General Meeting of Shareholders on May 22, 2024 (see section 6.5 Draft resolutions, twenty-eighth-nineteenth resolution). The total number of shares granted free of charge may not represent more than 0.12% of the capital, it being specified that the total number of shares granted free of charge to the Chief Executive Officer may not exceed 70,000 shares.
In the event that the General Meeting of Shareholders of May 22, 2024 does not approve the seventeenth resolution, the Board of Directors may decide to grant the LTIP 2024-2026 in cash.
Conditions of performance
The definitive acquisition of the shares is subject to the achievement of performance conditions. The Board of Directors has selected the following performance indicators for the LTIP 2024-2026, the duration of which remains set at three years:
− a market indicator, the Total Shareholder Return (TSR) based on the relative performance of the total return for the shareholder over three financial years, compared to a panel of European groups in the Telecommunications sector included in the Stoxx Europe 600 Telecommunications reference index, with a weighting of 30%. The TSR appreciation period compares the respective values of the indicators in the fourth quarter of 2023 (last quarter preceding the plan) and in the fourth quarter of 2026 (last quarter of the plan);
− organic cash flow from telecom activities, the evolution of which is measured over several years over the duration of the plan, with a weighting of 40%;
− a composite CSR indicator, with a weighting of 30%, composed of the following indicators:
- the share of renewable energy in electricity consumption, for 20%,
- the rate of feminization of management networks, for 10%.
Performance thresholds for each indicator
Performance thresholds define the percentage of shares that can be definitively acquired for each indicator.
− Total Shareholder Return (TSR):
- if the Orange TSR is lower than the median of the panel of European groups in the Telecommunications sector: no acquisition,
- if the Orange TSR is at the median or in the 3rd quartile of the panel of European groups in the Telecommunications sector: 100% acquisition,
- if the Orange TSR is in the 4th quartile of the panel of European groups in the Telecommunications sector: 120% acquisition,
- However, in the event that the Orange TSR reaches the median, the 3rd quartile or the 4th quartile of the panel while being negative, the result would be subject to the approval of the Board of Directors;
− Organic cash flow from telecom activities:
- The organic cash flow from telecom activities will be assessed in relation to the target set by the Board of Directors:
- if the result is less than 95.7% of the target: no acquisition,
- if the result is equal to 95.7% of the target: 80% acquisition,
- if the result is equal to the target: 100% acquisition,
- if the result is equal to 104.3% of the target: 120% acquisition,
- The acquisition rate follows a linear variation between the result boundaries;
− Composite CSR indicator:
- the share of renewable energy in electricity consumption will be assessed in relation to the target set by the Board of Directors:
- if the result is less than 97.9% of the target: no acquisition,
- if the result is equal to 97.9% of the target: 80% acquisition,
- if the result is equal to or greater than the target: 100% acquisition,
- The acquisition rate follows a linear variation between the result boundaries:
- the rate of feminization of management networks will be assessed in relation to the target set by the Board of Directors,
- if the result is less than 97.2% of the target: no acquisition,
- if the result is equal to 97.2% of the target: 80% acquisition,
- if the result is equal to or greater than the target: 100% acquisition,
- the acquisition rate follows a linear variation between the result boundaries.
The purpose of the LTIP at Orange is to retain on a long term basis employees occupying key positions in France or abroad and who are recognized for their contribution to the achievement of the Group’s objectives.
For its employee beneficiaries, the 2024-2026 LTIP will rely upon the same conditions and performance thresholds as the CEO, with an ambition to ensure that these beneficiaries actively contribute to continue developing the leadership of Orange, which includes a high performance in terms of Total Shareholder Return (TSR) compared to the peer group, and a continued growth of the organic cash flow for telecom activities.
In line with these objectives, the Board of Directors has decided to allow for an outperformance resulting in an acquisition of shares up to 120% in case targets are overachieved. This applies in case the TSR or the organic cash flow for telecom activities targets are overachieved, it being noted that this level of fixed outperformance limits the effects of an offsetting, if any, where the other thresholds are not reached while remaining incentive for all the beneficiaries.
The total vesting for all of the above-mentioned indicators will in any case be capped at 100% for the CEO, Christel Heydemann, which corresponds to a maximum of 70,000 performance shares. The possibility to outperform such criteria applies in a transitory manner to the 2024-2026 LTIP, and the Board reserves the possibility to review the remuneration of the CEO in the future during her mandate as board member.
Presence Condition
The definitive acquisition of shares is subject to the condition that the executive corporate officers who are beneficiaries are still in office on the date of assessment of the performance conditions.
However, in the event of termination of the beneficiary’s duties before the expiry of a three-year LTIP application period, the Board may decide to maintain the unacquired performance share plans under the following conditions:
− if the termination of the beneficiary’s duties results from death or disability, the TSR, organic cash flow and CSR indicator objectives will be deemed to have been met over the 3-year period;
− if the termination of the beneficiary’s duties results from the loss of his or her corporate mandate leading to his or her departure from the Group:
- performance conditions will be assessed taking into account the changes validated for each year until the end of the plan, i.e. without modification of the performance conditions,
- the allocation of shares will be made pro rata temporis based on his or her actual presence in the company as an executive corporate officer.
It is specified, if necessary, that if the beneficiary is no longer an executive corporate officer but remains in the Group during the LTIP period, he or she retains his or her right to share allocation under the plan.
Peer group
The peer group considered for the LTIP 2024-2026 will consist, apart from Orange SA, of the following 16 companies, which are currently included in the Stoxx Europe 600 Télécommunications index: BT Group Plc, Cellnex Telecom, Deutsche Telekom AG, Elisa Corp., Freenet, Inwit (Infrastrutture Wireless Italiane SpA), KPN, Millicom Intl., Swisscom AG, Tele2, Telecom Italia SpA, Telefónica SA, Telefónica Deutschland, Telenor ASA, Telia Co. AB and Vodafone Group Plc.
Maximum award
The number of performance shares awarded under the LTIP 2024-2026 will be 70,000 for the Chief Executive Officer, Christel Heydemann. This is the maximum amount that can be awarded, subject to performance and continued employment conditions.
Lock-up period
When the Shareholders’ Meeting authorizes the award of performance shares, executive Corporate Officers must keep at least 50% of the shares they receive as registered shares until the end of their terms of office.
Plans related to termination of service or loss of corporate office
The Shareholders’ Meeting of May 19, 2022 approved the compensation policy for executive Corporate Officers, which includes measures related to the termination of duties or loss of corporate office (severance pay, non-compete compensation, and Compensation Insurance for Business Owners and Executive Officers). These measures have not been revised since then nor undergone any material changes within the meaning of Article L. 22-10-8 II of the French Commercial Code, and therefore remain valid and in force with respect to the Chief Executive Officer.
Severance pay
If her corporate office is revoked or not renewed and this is not due to gross misconduct or gross negligence, the Company will pay the Chief Executive Officer gross severance pay equal to 12 months of fixed compensation and annual variable compensation, calculated based on the last fixed compensation plus the annual variable compensation paid, with the latter being calculated based on the average annual variable compensation paid for the last 24 months prior to departure from the Company. This compensation will only be due if the performance conditions for annual variable compensation for the two years prior to departure from the Company were achieved at an average of at least 90%. In accordance with Afep-Medef Code recommendations, the total amount of severance pay, non-compete compensation, and Compensation Insurance for Business Owners and Executive Officers may not exceed two years of compensation (annual fixed and variable).
Non-compete agreement
In order to protect the Group’s legitimate interests, and considering her duties and the strategic information to which she has access as the Chief Executive Officer, undertakes, for a period of one year starting from the day she ceases to perform her functions, not to work for or manage a telecommunication operator in the European Union, directly or indirectly, personally or through a third party, in any way or for any purpose, on her own behalf or on behalf of a third party.
The non-compete compensation will be a gross amount equal to 12 months of fixed compensation and annual variable compensation, with the variable compensation being calculated based on the average annual variable compensation paid for the last 24 months prior to leaving the Company. Subject to the Board of Directors’ approval, the Company may decide to release the CEO from this commitment at its sole discretion.
Loss of corporate office
Orange has taken out Compensation Insurance for Business Owners and Executive Officers for its Chief Executive Officer. This policy will provide the Chief Executive Officer with replacement income (subject to the policy’s terms and conditions) if the Company ever decides to revoke her corporate office. Orange is paying the full amount of the contribution and it is treated as a benefit in kind.
This unemployment insurance provides for the payment of compensation in proportion to the Corporate Officer’s previous income in the event of involuntary loss of corporate office.
In the event that the Chief Executive Officer involuntarily loses her corporate office, she will receive compensation once 12 months have elapsed since the effective date of enrollment in the policy. This is known as the waiting period.
Clawback mechanism
Annual and multi-year variable compensation paid to the Chief Executive Officer is subject to a clawback mechanism which, if triggered, would require the Chief Executive Officer to return all or some of her variable compensation, partially or wholly contingent on the achievement of financial performance indicators, for the periods concerned (within the retroactive limit of three fiscal years from the date of the decision to publish the restated financial statements or the date of an administrative or judicial decision to do so). This mechanism will apply in the event that the Company is required to prepare an accounting restatement due to omissions or misstatements which, individually or collectively, are material and could influence economic decisions made on the basis of published financial statements. The share of this compensation to be recovered is the amount received in excess of what would have been awarded, paid or been due had there not been any such accounting restatements.
Supplemental retirement plan
In 2022, the Board of Directors decided to set up what is called an "Article 82" (defined-contribution) supplemental retirement plan for executive Corporate Officers. Under this plan, the Company pays an annual matching contribution, half of which comprises premiums paid to a third-party organization under a defined-contribution retirement plan (an "Article 82" plan) and half consists of a cash sum, since enrollment in the plan gives rise to immediate taxation. This contribution is calculated on the basis of 20% of fixed plus variable compensation. The premium paid to the third-party organization is considered as salary and therefore treated as a benefit in kind.
Benefits in kind
In addition to paying the contribution for the Compensation Insurance for Business Owners and Executive Officers for the Chief Executive Officer, and premiums for the supplemental retirement plan (see above), she may also receive, if she wishes, a company car with driver, personal legal assistance related to her duties, an annual health check, and Internet/telephone access and equipment, including IT equipment, necessary to perform her duties.
5.4.2 Board of Directors’ report on Directors’ compensation
5.4.2.1 Amount of compensation paid or allocated for 2023 activity
The Board of Directors’ Meeting of February 14, 2024 decided on the award of compensation to Directors for the 2023 fiscal year in accordance with the compensation policy approved by the Shareholders’ Meeting of May 23, 2023.
Pursuant to this policy, the total amount of compensation allocated to Directors for their corporate office in respect of the 2023 fiscal year amounts to 715,000 euros. The Chairman of the Board of Directors also receives annual fixed compensation and the Chief Executive Officer waived her right to receive the compensation that would have been allocated to her in respect of her directorship. The variable share of this compensation, linked to attendance and participation in the work of the Board and its committees, represents 79.02% of the sums to be paid in respect of fiscal year 2023.
The compensation of Directors who are not Corporate Officers will be paid in the month following the Shareholders’ Meeting of May 22, 2024, subject to approval. Compensation allocated to Directors representing the French State will be paid to the State budget. In addition, the Directors elected by employees have requested that the compensation for their corporate offices be paid to their trade union.
Compensation for activity (in euros) |
Gross amounts paid in 2024 (for the 2023 fiscal year) |
Gross amounts paid in 2023 (for the 2022 fiscal year) |
Gross amounts paid in 2022 (for the 2021 fiscal year) |
Directors | |||
Valérie Beaulieu |
58,000 |
30,167 |
N/A |
Alexandre Bompard |
46,000 |
36,000 |
32,000 |
Bpifrance Participations |
48,000 |
61,000 |
40,000 |
Thierry Chatelier (1) |
48,000 |
16,667 |
N/A |
Sébastien Crozier (1) |
58,000 |
69,000 |
58,000 |
Céline Fornaro (3) |
41,694 |
N/A |
N/A |
Vincent Gimeno (1) |
48,000 |
61,000 |
4,806 |
Gilles Grapinet |
41,056 |
N/A |
N/A |
Anne-Gabrielle Heilbronner |
68,000 |
125,000 |
63,000 |
Christel Heydemann (4) |
N/A |
25,583 |
58,000 |
Momar Nguer |
29,056 |
N/A |
N/A |
Anne Lange (2) |
54,000 |
65,000 |
54,000 |
Frédéric Sanchez |
56,000 |
73,000 |
42,000 |
Magali Vallée (1) |
49,000 |
53,000 |
4,806 |
Former Directors | |||
Stéphanie Besnier (3) |
10,306 |
62,000 |
36,222 |
Laurence Dalboussière (1) |
N/A |
46,333 |
44,000 |
Fabrice Jolys (1) |
N/A |
N/A |
47,194 |
Helle Kristoffersen |
N/A |
3,833 |
46,000 |
René Ollier (1) |
N/A |
N/A |
39,194 |
Bernard Ramanantsoa |
34,944 |
133,548 |
84,000 |
Jean-Michel Severino |
24,944 |
68,000 |
56,000 |
Claire Vernet-Garnier (3) |
N/A |
N/A |
21,778 |
Total |
715,000 |
929,131 |
731,000 |
N/A: Not Applicable.
(1) Directors who requested the direct payment of their compensation to their trade union.
(2) Director proposed by the French State; 15% of the compensation is paid to the French State budget.
(3) Directors representing the French State, whose compensation is paid to the French State budget.
(4) For the period from January 1, 2022 to April 4, 2022, the date from which Christel Heydemann was appointed Chief Executive Officer.
5.4.2.2 Directors’ compensation policy
In accordance with the law, the maximum amount of compensation allocated annually to Directors is set by the Shareholders’ Meeting. The resolution approved remains valid until a new decision is made by the Shareholders’ Meeting. The Shareholders’ Meeting of May 19, 2022 set this amount at 1,050,000 euros.
At the beginning of every year, the Board of Directors sets the Directors’ compensation policy based on their corporate office for the fiscal year within the amount limit decided on by the Shareholders’ Meeting, and upon a proposal by the Governance and Corporate Social and Environmental Responsibility Committee (GCSERC). Then it is put to the vote at the Shareholders’ Meeting (ex-ante "say-on-pay").
The Board of Directors set the Directors’ compensation policy at its meeting of February 14, 2024. The following elements were used as a scale for the 2024 fiscal year:
− a fixed amount of 15,000 euros per Director per year, calculated prorata temporis where applicable;
− an additional fixed amount of 5,000 euros for committee Chairmen per year, calculated prorata temporis where applicable;
− an amount directly related to attendance and participation in the work of the Board and its committees, namely:
- 3,000 euros per meeting of the Board of Directors and the strategic seminar,
- 3,000 euros per meeting of the Audit Committee, the GCSERC and the Strategy and Technology Committee,
- 2,000 euros additional per committee meeting for the Chairmen of the committees.
The total amounts definitively allocated may not exceed the maximum amount set by the Shareholders’ Meeting, and consequently, these amounts may be reduced after cross multiplying once they are granted.
Corporate Officers who are also Directors will not be eligible for this compensation.
In addition, the Internal Guidelines of the Board of Directors provide for:
− the creation of special committees, when the Board of Directors decides to assign, on an exceptional basis, a task to one (or several) of its members or one or several third parties, with the Board of Directors deciding the main characteristics of this task (Article 5);
− the power for the Board of Directors to appoint a Lead Director from among the Independent Directors, as recommended by the GCSERC (such appointment becoming mandatory when the offices of the Chairman of the Board of Directors and the Chief Executive Officer are combined) (Article 10).
In this context, it is recommended that the following gauge be used:
− in accordance with Article 5 of the Internal Guidelines of the Board, the Board of Directors will determine not only the special committees’ assignments, but also their compensation, if applicable, taking into account the type of assignment, its duration and the time needed to complete it;
− a set annual amount for the Lead Director, if one is appointed, for his or her assignment, it being specified that compensation for members of the special committee, where applicable, or for the Lead Director, can be paid in the same form as the compensation allocated to Directors (e.g. "attendance compensation"), and in both cases, under the same conditions as relating to any maximum amount and reductions applying to sums allocated under compensation for Directors who are not Corporate Officers.
Directors elected by employees and Directors representing employee shareholders receive compensation for their activities under the same conditions and in the same manner as any other Director who is not a Corporate Officer.
Holding a corporate office in an Orange subsidiary: One of the independence criteria set out in the Afep-Medef Code is that Directors must not be an employee, executive Corporate Officer or Director of a consolidated subsidiary of the Company. For Directors who are not deemed independent under this Code, in 2016 Orange issued an Orange "governance policy" and a "Directors charter" under its internal "Orange Directors" program. As such, the Chief Executive Officer/Director and employee Directors who may hold a corporate office in a Group subsidiary included in the scope of consolidation within the meaning of Article L. 233-16 of the French Commercial Code will not receive any compensation in this respect.
The proposed compensation policy will apply from January 1, 2024, subject to approval by the Combined Ordinary and Extraordinary Shareholders’ Meeting of May 22, 2024.
5.4.2.3 Other compensation
The following table sets out the prorata compensation paid, for the duration of their office over the fiscal year, to the Directors elected by employees and the Directors representing employee shareholders, excluding compensation for their activities as Directors who are not Corporate Officers (as mentioned above).
Gross amounts (in euros) |
Amounts paid in 2023 |
Amounts paid in 2022 |
Thierry Chatelier (1) |
151,393 |
65,322 |
Sébastien Crozier |
219,833 |
218,884 |
Vincent Gimeno |
126,092 |
114,098 |
Magali Vallée |
45,592 |
42,305 |
N/A: Not Applicable.
(1) Assumed office on July 13, 2022 to replace the incumbent director representing employee shareholders, Laurence Dalboussière, following her resignation.
This amount includes all compensation paid in respect of the 2023 fiscal year: gross salaries, bonuses (including annual variable compensation), benefits in kind, profit sharing and incentives (excluding any employer’s matching contribution as regards the last two items) and, where applicable, LTIP shares awarded.
The Directors elected by employees and the Directors representing employee shareholders are employed by Orange SA as civil servants or private company employees contractually covered by the French telecommunication collective bargaining agreement.
With the exception of this compensation, Directors who are not Corporate Officers receive no compensation other than that paid for their office.
Furthermore, there are no contracts linking any member of the Board of Directors to Orange SA or any of its subsidiaries that provide for the granting of any benefits to this Director at the end of his or her term.
5.4.3 Compensation of members of the Executive Committee
The Executive Committee’s members are described in Section 5.1.3. Executive Committee.
The overall gross amount, excluding employer social security contributions, of compensation due for the 2023 fiscal year from Orange SA and the controlled companies to all members of the Orange Executive Committee is 14,981,117 euros .
This amount includes all compensation due in respect of the 2023 fiscal year: gross salaries, bonuses (including annual variable compensation), benefits in kind, profit sharing and incentives (excluding any employer’s matching contribution as regards the last two items) and LTIP shares awarded.
For members who were not part of the Executive Committee for the full year 2023, compensation has been calculated prorata temporis for reasons of comparability.
The annual variable compensation taken into account for the members of the Executive Committee excluding Directors and Officers is the target amount for 2023 to be paid in 2024. For Directors and Officers, the variable portion included is the part due for 2023, to be paid in 2024.
The employment contracts of the members of the Executive Committee (excluding Corporate Officers), signed from January 1, 2015, include a clause providing for contractual severance pay not exceeding 15 months of salary based on total gross annual compensation (including any termination pay provided for by contractual agreements).
The "claw-back" mechanism (see Section 5.4.1.1 Compensation policy for executive and non-executive Corporate Officers) for recovering certain incentive-based compensation shall apply to members of the Executive Committee, subject to compliance with applicable local laws, within the same timeframe.
The members of the Executive Committee do not receive any compensation for the corporate offices they hold in Orange subsidiaries.
They did not receive any stock options during the 2023 fiscal year, as Orange did not award any stock options to employees.
Executive Committee members also benefit from performance share plans (LTIP).
Under the LTIP 2021-2023, a maximum of 216,000 Orange shares were available for award to all Executive Committee members.
The Board of Directors, called upon to award free shares under the LTIP 2024-2026, which is the subject of the seventeenth resolution to be voted on by the Shareholders’ Meeting of May 22, 2024, will determine the maximum number of shares available to each member of the Executive Committee, subject to approval of said resolution, with the exception of the Chief Executive Officer for whom the maximum is voted on by the Shareholders’ Meeting under the ex-ante "say-on-pay" mechanism.
Stock options awarded to the top ten employees and options exercised by them
During the 2023 fiscal year, neither Orange SA nor any other Group company awarded any stock options to employees.
There have been no stock option plans in effect since 2017, when the last Orange SA stock option plan matured. Therefore, no stock options were exercised during the fiscal year.
.
6. Shareholder Base and Shareholders’ Meeting
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
6.1.3 Authorizations to carry out capital increases
The Orange SA Shareholders’ Meeting of May 23, 2023 approved various financial authorizations that delegated to the Board of Directors the authority to increase the capital of the Company by issue of shares or other securities, with or without preferential subscription rights (public tender offer, securities transfers, etc.) and subject to certain conditions (outside public tender offer periods for the Company’s securities, caps, etc.).
The Orange SA Shareholders’ Meeting of May 23, 2023 also delegated authority to the Board of Directors to carry out capital increases reserved for members of the Group savings plan.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
The Shareholders’ Meeting of May 22, 2024 will again be asked to authorize the Board of Directors to carry out capital increases [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED].
6.1.4 Treasury shares - Share Buyback program
The Shareholders’ Meeting of May 23, 2023 renewed the share Buyback program for 18 months within a limit of 10% of the share capital outstanding at the date of the Meeting. The Board of Directors’ Meeting of February 14, 2024 resolved to ask the Shareholders’ Meeting of May 22, 2024 to renew this authorization under the same conditions.
A description of the program for 2024 appears in the Board of Directors’ Report on the sixteenth resolution submitted to the Shareholders’ Meeting of May 22, 2024 [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED].
In addition, the liquidity contract relating to its shares and entered into by Orange with Rothschild Martin Maurel on February 11, 2019 was rolled over into 2023. The resources allocated to the liquidity account when the contract was implemented amounted to 950,000 Orange shares and 37,913,500 euros. At December 31, 2023, the liquidity account contained 1,000,000 Orange shares and 38,736,602 euros.
Summary of purchases and sales of treasury shares during the 2023 fiscal year
Objective of the purchases |
Number of shares held at December 31, 2022 |
Number of shares purchased |
Gross weighted average price (in euros) |
Number of shares sold |
Gross weighted average price (in euros) |
Number of shares held at December 31, 2023 |
% of capital |
Shares allocated to employees |
1,285,171 |
1,300,000 |
10.8 |
921,026 (1) |
- |
1,664,145 |
0.06% |
Liquidity contract |
680,000 (2) |
28,619,887 |
10.77 |
28,534,889 |
10.77 |
764,998 (3) |
0.03% |
Total |
1,965,171 |
29,919,887 |
29,455,915 |
2,429,143 |
0.09% |
(1) Shares freely granted on expiration of the 2020-2022 LTIP and, in accordance with Article L. 225-197-3 of the French Commercial Code, to the heirs and assigns of beneficiaries of free share award plans who died or became incapacitated before the end of the plans’ vesting period.
(2) Position at December 28, 2022 in order to take into account the two business days needed for transfer of ownership.
(3) Position at December 27, 2023 in order to take into account the two business days needed for transfer of ownership.
6.2 Major shareholders
6.2.1 Distribution of capital and voting rights
Holder |
December 31, 2023 |
December 31, 2022 |
December 31, 2021 | ||||||
Number of shares |
% of capital |
% of voting rights |
Number of shares |
% of capital |
% of voting rights |
Number of shares |
% of capital |
% of voting rights | |
Bpifrance Participations (1) |
254,219,602 |
9.56% |
8.06% |
254,219,602 |
9.56% |
8.15% |
254,219,602 |
9.56% |
8.19% |
French state |
356,194,433 |
13.39% |
20.88% |
356,194,433 |
13.39% |
21.10% |
356,194,433 |
13.39% |
21.22% |
Total Public Sector |
610,414,035 |
22.95% |
28.94% |
610,414,035 |
22.95% |
29.25% |
610,414,035 |
22.95% |
29.41% |
Group employees (2) |
211,259,433 |
7.94% |
12.73% |
203,225,062 |
7.64% |
11.55% |
196,264,286 |
7.38% |
10.81% |
Treasury shares |
2,429,143 |
0.09% |
0.00% |
1,965,171 |
0.07% |
0.00% |
2,009,500 |
0.07% |
0.00% |
Free float |
1.835.953.988 |
69.02% |
58.33% |
1,844,452,331 |
69.34% |
59.20% |
1,851,368,778 |
69.60% |
59.78% |
Total |
2,660,056,599 |
100% |
100% |
2,660,056,599 |
100% |
100% |
2,660,056,599 |
100% |
100% |
(1) Public financing and investment group for businesses, resulting from the combination of OSEO, CDC Entreprises, FSI and FSI Régions.
(2) Includes shares held as part of the Group savings plan, in particular through the Orange Actions and Orange Ambition International mutual funds, or directly by employees in registered form.
The public sector (the French State and Bpifrance Participations) and the Orange Actions mutual funds of the Group savings plan invested in Orange shares have double voting rights on their registered shares which they have held for over two years (see Section 6.4.1 Rights, preferences and restrictions attached to shares).
At December 31, 2023, the French State and Bpifrance Participations hold in concert 22.95% of the capital and 28.94% of the voting rights at Shareholders’ Meetings, taking into consideration the double voting rights.
At December 31, 2023, the mutual funds of the Group savings plan invested in Orange shares represented 7.38% of the Company’s capital and 11.83% of voting rights at Shareholders’ Meetings. The regulations governing the mutual funds state that voting rights attached to securities held as fund assets are exercised by the Supervisory Boards of these funds. In the absence of an express reference in the regulations to cases where the Supervisory Boards must gather the prior opinions of holders, the Supervisory Boards decide whether or not to take securities held as fund assets to public tender or exchange offers, in accordance with Article L. 214-164 of the French Monetary and Financial Code.
As of the date of this document, to Orange’s knowledge, no shareholder other than the French State, Bpifrance Participations and Group employees (in particular via the Orange Actions mutual fund) held, directly or indirectly, more than 5% of the capital or voting rights.
6.2.1.1 Changes in the distribution of capital held by major shareholders over the last three fiscal years
In the last three fiscal years, the Company has bought and sold treasury shares and, in particular, in December 2023 it bought 1,300,000 treasury shares under its 2023 share Buyback program (see Section 6.1.4 Treasury shares - Share Buyback program). These purchases were made to meet obligations related to employee share allocation programs. To Orange’s knowledge, there has been no major change in the distribution of capital and voting rights since December 31, 2023.
6.2.1.2 Information on shareholders’ agreements
On February 23, 2016, the French Financial Markets Authority (Autorité des marchés financiers - AMF) was notified of the execution, on February 18, 2016, of a new shareholders’ agreement between the French Republic and Bpifrance Participations. This agreement replaces the previous shareholders’ agreement signed between the same parties on December 24, 2012, formalizing their existing concerted action with respect to their shareholdings in Orange.
The shareholders’ agreement has been established for a period of two years (renewable), and stipulates that the parties will:
1. consult on voting on resolutions put to the Shareholders’ Meeting, with a commitment to exchange respective views and seek a common position on resolutions, without being under any obligation to reach a joint position;
2. consult each other on the form (within the meaning of Article L. 228-1 of the French Commercial Code) of their Orange securities.
6.2.1.3 Additional information on the distribution of the free float
Orange regularly identifies its shareholders, notably via the procedure known as "Identifiable Bearer Securities" (IBS). At December 19, 2023, institutional investors held 62.16% of the capital (down 0.39 points compared with 2022) and individual investors held 6.86% (up 0.07 points compared with 2022).
Geographical distribution of institutional investors at December 19, 2023
France |
26% |
United Kingdom |
19% |
Other European countries |
17% |
Europe total |
62% |
North America |
34% |
Rest of the world |
4% |
Total |
100% |
Source: IBS survey.
6.2.2 Direct or indirect control of Orange SA
As of the date of this document, the public sector (French State and Bpifrance Participations) has three representatives out of a total of 15 members on the Board of Directors of Orange (see Section 5.1.1 Board of Directors).
Orange’s major shareholder is the public sector: the French State, which, in concert with Bpifrance Participations, held 22.95% of the share capital and 28.94% of voting rights at December 31, 2023. As is the case with all Orange’s shareholders, these shares carry double voting rights when held in registered form for over two years (see Section 6.2.1.2 Information on shareholders’ agreements and Section 6.2.1 Distribution of capital and voting rights above). While not giving it as such the ability to exercise control over the Company, this level of holding could, based on the attendance rate at Shareholders’ Meetings in the past, allow the public sector to block the adoption of resolutions requiring a qualified majority vote by the shareholders.
In light of the recommendations of the Afep-Medef Code, Orange has put in place Corporate Governance rules to ensure the proper operation of the Board of Directors and its specialist committees in respecting the interests of all shareholders. The Board of Directors comprises seven Independent Directors, one of whom serves as Chairman (see Section 5.2 Operation of the management and supervisory bodies). Orange therefore feels there is no risk that the French State may exercise control in an abusive manner.
No other natural or legal persons exercise or could exercise control over Orange, either directly or indirectly, or individually, jointly or in concert.
To Orange’s knowledge, there is no agreement which, if implemented, could, at a later date, entail a change in its control.
6.3 Dividend distribution policy
The Shareholders’ Meeting of May 23, 2023 decided on the distribution of a dividend of 0.70 euros per share for the fiscal year 2022. Taking into account the 0.30-euro interim dividend paid on December 7, 2022, the balance of the dividend distributed by the Shareholders’ Meeting was 0.40 euros per share and was paid in cash on June 7, 2023.
On July 25, 2023, the Board of Directors decided on the distribution of an interim dividend of 0.30 euros per share in respect of 2023. The interim dividend was paid in cash on December 6, 2023.
In line with the solid growth in its organic cash flow, Orange intends, subject to shareholders’ approval, to increase its dividend to 0.72 euros per share for fiscal year 2023 (including the distribution of an interim dividend of 0.30 euros per share in December 2023) and to reach a new floor of 0.75 euros per share in respect of the 2024 fiscal year.
Past dividend payments
Fiscal year |
2022 |
2021 |
2020 |
2019 |
2018 |
Dividend per share (in euros) |
0.70 |
0.70 |
0.90 |
0.50 |
0.70 |
6.4 Statutory information on shares and Shareholders’ Meetings
6.4.1 Rights, preferences and restrictions attached to shares
Orange has only issued ordinary shares. Each share entitles its holder to a portion of the corporate profits and assets proportional to the amount of capital represented thereby. Furthermore, each share entitles its holder to vote and be represented in the Shareholders’ Meetings in accordance with the provisions of the law and of the Bylaws. Ownership of one share implies, ipso jure, adherence to the Bylaws and the decisions of the Shareholders’ Meeting.
There is no clause in the Bylaws providing for double or multiple voting rights for Orange shareholders. However, in accordance with the law, double voting rights are automatically granted to all shares held in registered form by the same holder for at least two years.
The shareholders are only liable for losses within the limits of their contributions to the Company’s capital.
Payment of dividends
The terms and conditions for the payment of the dividends approved by the Shareholders’ Meeting are determined by the Shareholders’ Meeting, or failing this, by the Board of Directors. However, cash dividends must be paid within a maximum of nine months after the close of the fiscal year, unless extended by court order. The Ordinary Shareholders’ Meeting may grant each shareholder, for all or part of the dividends to be distributed, an option of payment of the dividends either in cash or in shares, subject to legal requirements.
Interim dividends may be distributed before the approval of the financial statements for the fiscal year when the balance sheet established during or at the end of a fiscal year and certified by a Statutory Auditor shows that the Company has made a profit since the close of the last fiscal year, after recognizing the necessary depreciation, amortization and provisions and after deducting prior losses, if any, and the sums to be allocated to reserves, as required by law or the Bylaws, and including any retained earnings. The amount of such interim dividends may not exceed the amount of the profit thus defined.
Dividends not claimed within five years after the payment date revert to the French State.
Disposal and transfer of shares
Shares are freely tradable, subject to applicable legal and regulatory provisions. They are registered in a share account and are transferred by means of a transfer order from account to account.
6.4.2 Actions necessary to modify shareholders’ rights
Shareholders’ rights may be modified as allowed by law. Only the Extraordinary Shareholders’ Meeting is authorized to amend any and all provisions of the Bylaws. The Meeting may not, however, increase shareholder commitments, except for properly executed transactions resulting from a share consolidation.
6.4.3 Rules for participation in and notice of Shareholders’ Meetings
Access to, participation in and voting rights at Shareholders’ Meetings
Shareholders’ Meetings are composed of all shareholders whose shares are fully paid-up and for whom a right to attend Shareholders’ Meetings has been established by registration of their shares in an account in the name either of the shareholder or of the intermediary holding their account, where the shareholder is not resident in France, by midnight (Paris time) on the second business day preceding the Meeting.
The shares must be registered within the time limit specified above, either in an account in their own name maintained by the Company, or in the bearer share accounts maintained by an authorized intermediary.
If it sees fit to do so, the Board of Directors may distribute personalized admission cards to shareholders and require them to produce these cards at the Meeting.
Shareholders participating via video-conferencing or other means of telecommunication which meet legal and regulatory conditions and allow identification shall be deemed present for the calculation of the quorum and majority at Shareholders’ Meetings. The Board of Directors organizes, in accordance with legal and regulatory requirements, the participation and voting of these shareholders at the Shareholders’ Meeting, assuring, in particular, the effectiveness of the means of identification.
Any shareholder may, in accordance with legal and regulatory requirements, vote remotely or grant a proxy to any other natural or legal person of his or her choice. Shareholders may, in accordance with legal and regulatory requirements, send their ballot or proxy, either in hard copy or via electronic means, no later than 3.00 pm (Paris time) on the day before the Shareholders’ Meeting. Transmission methods are specified by the Board of Directors in the meeting notice and the convocation notice.
Shareholders voting remotely, within the time limit specified in the Bylaws, by means of the ballot provided by the Company to shareholders, are deemed present or represented at the Meeting.
The remote or proxy ballots and the certificate of attendance may be completed in electronic format duly signed under the conditions provided for in the applicable laws and regulations. For this purpose, the ballot can be filled in and electronically signed directly on the website established by the organizer of the Meeting.
Shareholders not resident in France may be represented at a Shareholders’ Meeting by a registered intermediary who may participate subject to legal requirements.
Notice of Shareholders’ Meetings
Shareholders’ Meetings are convened by the Board of Directors, or, failing this, by the Statutory Auditors, or by any person authorized for this purpose. Meetings are held at the headquarters or at any other location indicated in the convocation notice. Subject to exceptions provided by law, notice must be given at least 15 days before the date of the Shareholders’ Meeting. When the Shareholders’ Meeting cannot deliberate due to the lack of the required quorum, the second Meeting and, if applicable, the second postponed Meeting, must be convened at least ten days in advance in the same manner as the first.
Ordinary Shareholders’ Meeting
Ordinary Shareholders’ Meetings are called to make any and all decisions that do not amend the Bylaws. An Ordinary Shareholders’ Meeting is convened at least once a year within six months of the end of each fiscal year in order to approve the Statutory Financial Statements and Consolidated Financial Statements for the fiscal year in question or, in the case of postponement, within the period established by court order. When convened for the first time, the Meeting only validly deliberates if the shareholders present or represented by proxy or voting remotely represent at least one-fifth of the shares with voting rights. When the Meeting is convened for the second time, no quorum is required. Decisions are made by a majority of the votes held by the shareholders present, represented by proxy or voting remotely.
Extraordinary Shareholders’ Meeting
Only the Extraordinary Shareholders’ Meeting is authorized to amend any and all provisions of the Bylaws. Subject to the legal provisions governing capital increases by capitalization of reserves, profits or premiums, the Extraordinary Shareholders’ Meeting only validly deliberates if the shareholders present, represented by proxy or voting remotely represent at least one-fourth of all shares with voting rights when convened for the first time, or one-fifth when convened for the second time. If the latter quorum is not reached, the second Meeting may be postponed to a date no later than two months after the date for which it was convened. Subject to the same condition, the second Meeting makes decisions by a two-thirds majority of the shareholders present, represented by proxy, or voting remotely.
6.4.4 Declarations of threshold crossing
In addition to the legal obligation to inform the Company and the French Financial Markets Authority (Autorité des marchés financiers - AMF) when thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 33 1/3%, 50%, 66 2/3%, 90% and 95% of the capital and voting rights are crossed, any natural or legal person, acting alone or in concert with others, that acquires, directly or indirectly, as defined by Articles L. 233-7 et seq. of the French Commercial Code, a number of shares, voting rights or securities representing shares equal to 0.5% of the capital or voting rights in Orange is required, no later than before the close of trading on the fourth trading day following the day such threshold is crossed, to declare to Orange by registered letter with return receipt, the total number of shares, voting rights and securities giving access to the capital that such natural or legal person holds.
This declaration must be repeated in accordance with the conditions indicated above each time a new 0.5% threshold is reached or crossed, whether crossing above or below, for any reason whatsoever, including beyond the 5% threshold.
In the event of failure to comply with any of the provisions set forth above, the shareholder or shareholders in question are stripped of the voting rights attached to any securities in excess of the thresholds, subject to legal provisions and limits, if one or more shareholders holding at least 0.5% of the capital or voting rights so requests at a Shareholders’ Meeting.
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7.1 Company identification
Company name: Orange
Place and registration number:
Paris Trade and Companies Register 380 129 866 APE (principal activity) code: 6110Z
Legal Entity Identifier (LEI): 969500MCOONR8990S771
Date of incorporation and term:
Orange SA was incorporated as a French société anonyme (a public limited company under French law) on December 31, 1996 for a 99-year term. Barring early liquidation or extension, the Company will expire on December 31, 2095.
Registered office:
111, quai du président Roosevelt, 92130 Issy-les-Moulineaux, France
Telephone: + 33 (0)1 44 44 22 22
Website: www.orange.com
Legal form and applicable legislation:
Orange is governed by French corporate law subject to specific laws governing the Company, notably Law no. 90/568 of July 2, 1990 on the organization of public postal services and France Telecom, as amended.
The regulations applicable to Orange as a result of its operations are described in Section 1.7 Regulation of telecommunication activities.
Purpose: "As a trusted partner, Orange gives everyone the keys to a responsible digital world."
The purpose of Orange, included in Article 2 Corporate scope and purpose of the Bylaws, is part of the Lead the future strategic plan, which is guided by exemplary social and environmental accountability. [REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Corporate scope:
The Company’s corporate scope, in France and abroad, specifically pursuant to the French Postal and Electronic Communications Code, is:
− to provide all electronic communication services in internal and international relations;
− to carry out activities related to public services and, in particular, to provide, where applicable, a universal telecommunication service and other mandatory services;
− to establish, develop and operate all electronic communications networks open to the public necessary for providing said services and to interconnect the same with other French and foreign networks open to the public;
− to provide all other services, facilities, handset equipment and electronic communication networks, and to establish and operate all networks distributing audiovisual services, and especially radio, television and multimedia broadcasting services;
− to set up, acquire, rent or manage all real estate or other assets and businesses and to lease, install and operate all structures, businesses, factories and workshops within the corporate scope defined above;
− to obtain, acquire, operate or transfer all processes and patents related to any of the purposes defined above;
− to participate directly or indirectly in all transactions that may be related to any of the purposes defined above, through the creation of new companies or enterprises, the contribution, subscription or purchase of securities or corporate rights, acquisitions of interests, mergers, partnerships, or by any other means;
− and more generally, all industrial, commercial and financial transactions, or transactions involving movable or fixed assets, that may be related directly or indirectly, in whole or in part, to any of the aforementioned corporate purposes, or to any similar or related purposes, or to any and all purposes that may enhance or develop the Company’s business.
7.2 Glossaries
7.2.1 Financial glossary
Average number of employees (full-time equivalents): average number of active employees over the reporting period, prorated for their work time, including on both permanent contracts and fixed-term contracts.
Change in working capital requirement: the change in working capital requirement is made up of:
− the Change in working capital requirement for operations, which is made up of (i) the change in gross inventories, (ii) the change in gross trade receivables, (iii) the change in trade payables for other goods and services, and (iv) changes in other customer contract assets and liabilities;
− and the Change in working capital requirement excluding operations, which includes changes in other assets and liabilities (excluding receivables and payables related to operating taxes and levies).
Commercial expenses, equipment and content costs: see External purchases.
Convergent ARPO: average revenues per customer from convergent services (Average Revenues Per Offer, ARPO) for the period is calculated by dividing (i) the revenues from consumer convergent offers invoiced to customers (excluding the effect of spreading the equipment subsidy pursuant to IFRS 15) over the period in question, by (ii) the weighted average number of customers of B2C convergent offers over the same period. The weighted average number of customers is the average of monthly averages over the period in question. The monthly average is the arithmetic average of the number of customers at the beginning and end of the month. Convergent ARPO is expressed in monthly revenues per convergent services customer.
Convergent services: see Revenues.
Data on a comparable basis: data with comparable methods, scope and exchange rates are presented for the preceding period (see Section 3.1.5.1 Data on a comparable basis). The transition from data on a historical basis to data on a comparable basis consists of keeping the results for the last fiscal year and restating the previous fiscal year in order to present financial data with comparable methods, scope and exchange rates over comparable periods. The method used is to apply to the data of the corresponding period of the previous fiscal year the methods and the scope of consolidation for the period just ended, as well as the average exchange rates used for the consolidated income statement in the Consolidated Financial Statements for the period just ended. Changes on a comparable basis enable organic business changes to be reflected. Data on a comparable basis is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups (see Section 3.1.5 Financial indicators not defined by IFRS).
Data on a historical basis: data for past periods as reported in the Consolidated Financial Statements of the current financial period.
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EBITDAaL or "EBITDA after Leases": operating income (i) before depreciation and amortization of fixed assets, before effects resulting from business combinations, impairment of goodwill and fixed assets, share of profits (losses) of associates and joint ventures, (ii) after interest on lease liabilities and on debts related to financed assets, and (iii) adjusted for significant litigation, specific labor expenses, review of fixed assets, investments and business portfolio, restructuring programs costs, acquisition and integration costs and, where appropriate, other specific items that are systematically specified in relation to income and/or expenses (see Note 1.10 to the Consolidated Financial Statements). EBITDAaL is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups (see Section 3.1.5 Financial indicators not defined by IFRS).
eCAPEX or "economic CAPEX": investments in property, plant and equipment and intangible assets excluding telecommunication licenses and financed assets, minus the price of disposal of fixed assets (see Note 1.6 to the Consolidated Financial Statements). eCAPEX is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups (see Section 3.1.5 Financial indicators not defined by IFRS).
Economic CAPEX: see eCAPEX.
Equipment sales: see Revenues.
External data: data after elimination of internal flows between the scopes considered.
External purchases: external purchases include the following operating expenses, excluding leases falling within the scope of application of IFRS 16 (see Note 5.1 to the Consolidated Financial Statements):
− Commercial expenses, equipment and content costs: cost of handsets and other equipment sold, retail fees and commissions, advertising, promotional, sponsoring and rebranding expenses, and content costs;
− Service fees and inter-operator costs: network expenses and interconnection costs;
− Other network expenses and IT expenses: subcontracting expenses for operations and technical maintenance, IT expenses;
− and Other external purchases: overheads, real estate fees, building cost for resale, purchases of equipment and other supplies held in inventories, call center subcontracting expenses and other external services, net of capitalized costs of goods and services.
Financial investments: financial investments include (i) investments in subsidiaries (net of cash acquired), (ii) investments in associates and joint ventures, (iii) purchases of investments securities measured at fair value, and (iv) changes in ownership interests with no gain of control.
Fixed-only broadband ARPO: average revenues per fixed-only services customer (Average Revenues Per Offer - ARPO) for the period is calculated by dividing (i) the revenues from fixed-only broadband services sold on a retail basis (excluding the effect of spreading the equipment subsidy pursuant to IFRS 15) over the period in question, by (ii) the weighted average number of fixed-only broadband customers over the same period. The weighted average number of customers is the average of monthly averages over the period in question. The monthly average is the arithmetic average of the number of customers at the beginning and end of the month. Fixed-only broadband ARPO is expressed in monthly revenues per fixed-only services customer.
Fixed-only services: see Revenues.
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IT & Integration Services: see Revenues.
Labor expenses: wages and employee benefit expenses (net of capitalized costs), employee profit-sharing expenses, and expenses relating to share-based compensation (see Note 6.1 to the Consolidated Financial Statements).
Mobile-only ARPO: average revenues per mobile-only services customer (Average Revenues Per Offer - ARPO) for the period is calculated by dividing (i) the revenues from mobile-only services sold on a retail basis (excluding Machine to Machine and excluding the effect of spreading the equipment subsidy pursuant to IFRS 15) over the period in question, by (ii) the weighted average number of customers of mobile-only offers (excluding Machine to Machine) over the same period. The weighted average number of customers is the average of monthly averages over the period in question. The monthly average is the arithmetic average of the number of customers at the beginning and end of the month. Mobile-only ARPO is expressed in monthly revenues per mobile-only customer.
Mobile-only services: see Revenues.
Net financial debt: net financial debt as defined and used by Orange does not take into account Mobile Financial Services activities, for which this concept is not relevant. It consists of (i) financial liabilities excluding operating payables (translated into euros at the year-end closing rate) including derivative instruments (assets and liabilities), (ii) less cash collateral paid, cash, cash equivalents and financial assets at fair value. Furthermore, financial instruments designated as cash flow hedges included in net financial debt are set up to hedge items that are not included therein, such as future cash flows. As a consequence, the portion of these unmatured hedging instruments recorded in other comprehensive income is added to gross financial debt to offset this temporary difference (see Note 13.3 to the Consolidated Financial Statements). Net financial debt is a financial indicator not defined by IFRS and may not be comparable to similarly titled indicators used by other groups (see Section 3.1.5 Financial indicators not defined by IFRS).
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Number of employees (active employees at end of period): number of employees working on the last day of the reporting period, including on both permanent contracts and fixed-term contracts.
Operating taxes and levies payables: taxes and levies including the CET (contribution économique territoriale - territorial economic contribution) and the IFER (Imposition forfaitaire sur les entreprises de réseaux - flat-rate tax on network enterprises) in France, spectrum fees and levies on telecommunication services (see Note 10.1 to the Consolidated Financial Statements).
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Other external purchases: see External purchases.
Other network expenses and IT expenses: see External purchases.
Other operating expenses: see Other operating income and expenses.
Other operating income and expenses: other operating income net of other operating expenses. Other operating income and expenses include:
− Other operating income: primarily net banking income (NBI), income related to recovery of trade receivables, site rentals and franchises income, tax credits and subsidies, income from universal service, brand royalties and management fees invoiced to certain unconsolidated entities, rebilling of network sharing costs, income from litigation, income relating to line damage (see Note 4.2 to the Consolidated Financial Statements);
− and Other operating expenses: mainly disputes, impairments and losses on trade receivables from telecom activities, cost of bank credit risk, universal service charges, operating foreign exchange gains/losses, and acquisition and integration costs (see Note 5.2 to the Consolidated Financial Statements).
Other operating income: see Other operating income and expenses.
Other revenues: see Revenues.
Retail Services (B2C+B2B) revenues: aggregation of convergent services, mobile-only services, fixed-only services and IT & Integration Services revenues (see these definitions). Retail Services (B2C+B2B) revenues bring together all revenues from a given scope, excluding revenues from wholesale services, equipment sales and other revenues (see these definitions).
Retail services (B2C+B2B): see Retail Services (B2C+B2B) revenues.
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Revenues: revenues (see Notes 1.2 and 4.1 to the Consolidated Financial Statements) include:
− Convergent services: revenues from the convergent offers sold on a retail basis to B2C customers, excluding equipment sales (see this definition). A convergent service is defined as the combination of, at least, fixed broadband access (xDSL (sum total Digital Subscriber Line), FTTx (Fiber To The X), cable, fixed 4G) and a mobile voice plan;
− Mobile-only services: revenues from mobile plans (mainly outgoing calls: voice, SMS and data) for retail sales, excluding convergent services and equipment sales (see these definitions);
− Fixed-only services: revenues from fixed-only services sold on a retail basis, excluding convergent services and equipment sales (see these definitions). It includes (i) fixed narrowband services (conventional fixed telephony), (ii) fixed broadband services, and (iii) business solutions and networks (with the exception of France, for which most business solutions and networks are supported by the Orange Business segment). For the Orange Business segment, revenues from fixed-only services include network equipment sales linked to the operation of voice and data services;
− IT & Integration Services: revenues including unified communication and collaboration services (Local Area Network and telephony, consultancy, integration, project management), hosting and infrastructure services (including Cloud Computing), app services (Customer Relations management and other app services), security services, video-conferencing services, services related to Machine to Machine activities (offline) and equipment sales related to the above products and services;
− Wholesale services: revenues including (i) mobile services to carriers, including in particular incoming mobile traffic, visitor roaming, network sharing, national roaming and Mobile Virtual Network Operators (MVNOs), (ii) fixed services to other carriers, which include in particular national interconnection, international wholesale services, high-speed and very high-speed broadband access services (fiber access, unbundling of telephone lines, xDSL access sales), and sales of telephone lines on the wholesale market, and (iii) equipment sales to carriers;
− Equipment sales: fixed and mobile equipment sales, excluding (i) equipment sales related to the supply of IT & Integration Services, (ii) network equipment sales related to the operation of voice and data services for the Orange Business segment, (iii) equipment sales to carriers, and (iv) equipment sales to external dealers and brokers;
− and Other revenues: other revenues include equipment sales to external dealers and brokers, revenues from portals, online advertising revenues and transverse activities of the Group and other miscellaneous revenues.
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Service fees and inter-operator costs: see External purchases.
Statutory data: data before elimination of internal flows between the scopes considered.
Wages and employee benefit expenses: see Labor expenses.
Wholesale services: see Revenues.
7.2.2 Glossary of technical terms
API (Application Programming Interface): computer programming interface that enables programs to interact with one another, in a similar manner to a human-machine interface.
Arcep: Autorité de régulation des communications électroniques, des postes et de la distribution de la presse (French regulatory authority for electronic communications, postal and print media distribution).
Bitstream: wholesale service enabling alternative operators to rent broadband access which has been activated by the incumbent operator. In this way they can offer retail broadband services in areas where they do not offer unbundled access.
Cloud Computing: a concept that involves using remote servers for the storage and processing of electronic data, traditionally located on local servers or the user’s workstation.
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DSL (Digital Subscriber Line): technologies enabling the use of copper cables connecting subscribers of "Switched Telephone Networks" (PSTN) to enable broadband transfers of digital packets.
DSLE (DSL Enterprise): broadband data transport offer in one or more DSL regions. It connects a set of "end" sites to a central site and enables operators to develop Internet/Intranet access offers for their B2B customers.
DWDM (Dense Wavelength Division Multiplexing): digital transmission technology based on multiplexing wavelengths over fiber optic, enabling very high-speed broadband (up to 10 Gigabits per second) information transfers over long-distance networks.
FTTx (Fiber To The X): generic name for different forms of optical connections:
− FTTH (Fiber To The Home): B2C and Pro-SME offer of a fiber optic link from the operator’s optical connection node (OCN) directly to the subscribers’ home. Ensures very high-speed broadband transmissions compatible with triple play packages and has the following characteristics: shared local loop, asymmetrical speeds (download speed faster than upload speed), which are not guaranteed, limited support and no guaranteed recovery time (GRT);
− FTTE (Fiber To The Enterprise): B2B offer with dedicated fiber between the pooling point and the business, dedicated business support and GRT;
− FTTO (Fiber To The Office): B2B offer with higher quality of service and security levels (dedicated fiber from the optical connection node to the business, symmetrical and guaranteed speeds allowing the proper functioning of business applications, GTR ensuring rapid reconnection in the event of an incident).
Full MVNO: an MVNO (mobile virtual mobile operator) that operates its own core network components and its own app platforms, while renting radio capacity to host operators. See MVNO.
Civil Engineering for Optical Loops and Links: Civil engineering and air-assist offer for Orange’s local loop and for the fiber optic networks. To accelerate the roll-out of new very high-speed broadband networks, Orange has decided to open its facilities (ducts and air-assist) to operators, to allow them to lay their optical cables so that open access fiber optic networks can be rolled out.
Gbit/s or Gigabit per second: one billion bits (109) (BInary digiT - binary-coded (0 or 1) information element used by digital systems) transferred per second on a transmission network.
GHG Protocol: an international protocol establishing a framework for measuring, accounting and managing greenhouse gas emissions from private and public sector operations that was developed by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI). This protocol organizes GHG emissions into three "scopes": Scope 1 covers direct emissions, Scope 2 covers indirect energy emissions from electricity, steam, heating or cooling purchased or otherwise acquired, and Scope 3 covers other indirect emissions.
GNI (Global Network Initiative): a global alliance of Internet and telecommunication companies, human rights and press freedom organizations, investors, and academic institutions, helping companies respect freedom of expression and privacy rights in the face of government pressure to share user data, censor content and restrict communications.
Go or Gigaoctet: a unit of measurement used in computing to indicate memory capacity. Each unit corresponds to a billion octets (one octet is a computer coding unit consisting of 8 bits).
GPON (Gigabit Passive Optical Network): passive FTTH optical network architecture, not to be confused with the competing point to point FTTH architecture; it is used for on-demand broadcasting such as video over IP (IPTV). XGS-PON is a standard for passive optical networks that supports higher speed (10 Gbits/s) symmetrical data transfer. It is part of the Gigabit-capable PON, or G-PON, family of standards. G-PON stands for Gigabit PON or 1 Gigabit PON. The "X" in "XGS" represents the number ten and the "S" stands for "symmetrical." XGS-PON = 10 Gigabit Symmetrical PON.
GSMA (GSM Association): an association representing nearly 800 mobile telephony operators and manufacturers in 220 countries and territories of the world. The GSMA takes part in the definition and publication of mobile telephony standards.
IMS (IP Multimedia Subsystem): standardized IP-based network architecture and technology providing fixed and mobile voice and multimedia services, including VoIP, VoLTE and VoWifi.
IP-VPN: see Virtual Private Network (VPN).
IPX: interconnection service ensuring interoperability between the different technologies, thus allowing the secure exchange of IP-based traffic between customers of the different mobile, fixed-line telephony and Internet operators.
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LAN (Local Area Network): network enabling workstations or PCs of the same entity on the same site to be interconnected with other local networks on other sites and be linked to the public network.
LoRaWAN (Long Range Wide-Area Network): telecommunication protocol that allows connected devices to exchange small amounts of data in narrowband, reducing the energy used by the objects.
FOL: Fiber Optic Link.
LTE (Long-Term Evolution): standard developed within 3GPP which produced technical specifications for the fourth-generation mobile network standard (4G). By extension, LTE also refers to so-called fourth generation mobile systems.
LTE-M (LTE for Machines): technology which enables Internet of Things equipment to connect to the 4G network without a gateway.
M2M or Machine to Machine: exchanges of information between machines that are established between the central control system (server) and any type of equipment, through one or several communication networks.
MEA (Africa & Middle East): Africa & Middle East region.
Metaverse: an online service offering simulations of real-time, communal and persistent 3D spaces, where we can share immersive experiences.
MPLS (Multi-Protocol Label Switching): data transfer technique which improves network speed and efficiency, allowing routers to transfer information along p-defined paths depending on the level of quality required.
Multiplexing: technique to simultaneously transfer several communications on a single transmission channel.
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NFC (Near Field Communication): technology for short-range and high-frequency wireless communications, allowing the exchange of information between devices up to a distance of about 10 cm.
NGN (New Generation Network or Next Generation Network): generic concept referring to IP-based voice and data networks, making it possible to switch from a simple connectivity approach to a new approach to developing services for customers.
NGA: New Generation Access.
SCN: Subscriber connection node.
OCN (Optical Connection Node): Concentration point of a fiber optic network where the active equipment is installed from which the operator activates the accesses of its subscribers.
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Efficient operator: a concept used in relation to the regulation of prices for wholesale and retail services sold by an operator when the regulatory authority requires the operator to orient its prices toward the costs borne. If the actual costs of this operator turn out to be higher than they should be because it is inefficient, the corresponding excess cost is excluded from the price base used to determine prices.
OTT (Over-The-Top): refers to a broadcaster that provides services, for example on-demand video services on the Internet, using the infrastructure of a telecoms network operator, when the network operator does not offer this service itself.
Mobile network sharing: Pooling between several operators of all or part of the equipment constituting their mobile networks. There are different types of infrastructure sharing:
− passive sharing: pooling of passive infrastructure among operators. The partners jointly use the masts, premises or the technical environment (power supply, air conditioning), but each operator rolls out its own active network equipment;
− active sharing: pooling of active elements (base station equipment, base station controllers, transmission links) among operators, in addition to passive infrastructure sharing.
PPA (Power Purchase Agreement): a contract for the direct sale of electricity that is made between a producer of (often renewable) electricity and the consuming entity without an electricity supplier as an intermediary.
Integrated Service Digital Network (ISDN): digital network for the transmission of integrated information: data, voice and video. Orange trade name: Numéris.
Virtual Private Network (VPN): a set of resources on a public network made exclusively available to a B2B customer.
Seamless network: a telecommunication service provided by a network operator or a service provider which uses the resources of one or more other operators or suppliers to give users the impression that they are accessing the same network without interruption regardless of where they are.
Switched telephone network (PSTN): voice transmission network comprising handsets, subscriber lines, circuits and switches. It is also used to access certain data services.
ISDN: see Integrated Service Digital Network.
Roaming: the use of a mobile phone service on the network of another operator than the one with which the subscription is taken out. A typical example is the use of a mobile phone abroad from another operator’s network.
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Scopes 1, 2 and 3 (linked to the greenhouse gas emission scopes):
− Scope 1: emissions directly related to Orange’s activities (equipment, buildings, etc.);
− Scope 2: indirect emissions related to Orange’s energy consumption (electricity);
− Scope 3: other indirect emissions (employee travel, product transport, emissions from Orange customers and suppliers).
Signaling System 7 (SS7): information exchanges required for the management of a telephone communication (establishment and termination, maintenance and supervision, invoicing) and transferred in digital form by a network separate from that used for the communication itself.
Slicing: or "network slicing," which consists of virtually dividing the 5G network into slices operating independently to provide different levels of mobile network performance according to customer needs.
SS7: see Signaling System 7.
Streaming: technology enabling the broadcasting of video images on the Internet and continuous viewing in real time.
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Call termination (interconnection or termination rate): amount per minute paid by one telephone operator to another to transmit a telephone conversation over the network of the second operator to its destination. These rates are regulated.
ICT (Information and Communication Technologies): techniques used to process and transmit information, mainly computing, audiovisual, multimedia, Internet and telecommunication.
Triple play: broadband subscription package including Internet access, telephony and a package of television channels.
ITU (International Telecommunication Union): the United Nations specialized agency for development in the Information and Communication Technologies sector. The ITU allocates global radio spectrum and satellite orbits and develops the technical standards that ensure networks and technologies connect seamlessly.
UMTS (Universal Mobile Telecommunications System): a third-generation (3G) mobile telephony standard allowing broadband communication (up to 2 Mbits/s at theoretical symmetrical speed) over the 1.9 to 2.2 GHz frequency band.
vDSL (Very high bit-rate DSL): a technique based on the same technique as xDSL. vDSL signals are sent over a pair of copper wires, simultaneously and without interfering with voice telephony. This allows for very high speeds.
Voice over Internet Protocol - VoIP: transport of voice services using IP technologies.
VPN: see Virtual Private Network.
VSAT (Very Small Aperture Terminal): a satellite communications technology that uses two-way satellite dishes with a diameter of less than 3 m and requires few ground resources. VSAT is used to connect a small site to communication networks, either for telephony or Internet access.
WiFi (Wireless-Fidelity): a technology enabling the connection of wireless equipment using radio waves in the 2.4 GHz wavelength, at speeds of 11 Mbits/s (802.11b standard) or 54 Mbits/s (802.11g standard). By extending the Ethernet protocol to cover radio services, WiFi offers businesses and individuals the ability to wirelessly connect several computers or shared devices in a network over distances that may reach several dozen meters.
xDSL: see DSL.
[3] A "trust Cloud" solution, in line with the French government’s Cloud doctrine, requires SecNumCloud 3.2 certification from ANSSI, as well as compliance with legal provisions.
[4] Totem’s entry into the operational phase at end-2021 resulted in a change in internal reporting by management, and the segment information now presented reflects the Group’s decision to present Totem as a separate business segment as of January 1, 2022 (see Section 3.3, Note 1.1 Change in segment information).
[8] Intermediaries in banking operations and payment services (Intermédiaires en opérations de banque et en services de paiement).
[13] https://digital-strategy.ec.europa.eu/en/news/commission-reports-implementation-eu-rules-safeguarding-open-Internet-access
[15] Directive 2000/31/EC of the European Parliament and of the Council of June 8, 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market.
[16] Regulation (EU) 2022-2065 of October 19, 2022 on a Single Market for Digital Services and amending Directive 2000/31/EC (Digital Services Act).
[17] Regulation (EU) 2022/1925 of September 14, 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Market Act).
[19] Decree 2023-1033 of November 10, 2023 amending Decree 2007-1532 of October 24, 2007 on the radio spectrum license fees payable by holders of spectrum licenses awarded by Arcep.
[20] The term "vertical" means all private sector companies in any field and public sector organizations.
[21] Areas covered by the authorization holder’s mobile network and in which the premises (residential buildings, offices) do not have fixed access to Internet service with at least 8 Mbits/s in downlink speed.
[22] Areas covered by the authorization holder’s mobile network and in which the premises (residential buildings, offices) do not have fixed access to Internet service with at least 8 Mbits/s in downlink speed.
[23] Areas covered by the authorization holder’s mobile network and in which the premises (residential buildings, offices) do not have fixed access to Internet service with at least 8 Mbits/s in downlink speed.
Exhibit 15.2
Consent of independent registered public accounting firms
We consent to the incorporation by reference in the registration statement No. 333-275938 on Form F-3 and the registration statement No. 333-259927 on Form S-8 of our reports dated March 27, 2024, with respect to the consolidated financial statements of Orange S.A. and its subsidiaries and the effectiveness of internal control over financial reporting.
Paris-La Défense
March 29, 2024
/s/ KPMG S.A.
Represented by Jacques Yves PIERRE
Exhibit 15.3
Consent of independent registered public accounting firm
We consent to the incorporation by reference in Registration Statement No. 333-275938 on Form F-3 and Registration Statement No. 333-259927 on Form S-8 of our reports dated March 27, 2024, relating to the consolidated financial statements of Orange S.A. and the effectiveness of Orange S.A.'s internal control over financial reporting appearing in this Annual Report on Form 20-F for the year ended December 31, 2023.
/s/ Deloitte & Associés
|
Paris-La Défense, France
March 29, 2024
Exhibit 97.1
CLAWBACK POLICY
Preamble
On February 15, 2023, the Board of Directors of Orange SA adopted the present clawback policy (the "Policy"), the terms and conditions of which are described below, to take into account changes in the U.S. rules applicable to Orange SA in connection with its listing of securities on the New York Stock Exchange (NYSE).
Purpose
The purpose of the Policy is for Orange SA to recover any Variable Compensation received by a Covered Corporate Officer during a Recovery Period in the event of a Material Accounting Restatement.
The implementation of the Policy, where applicable, will be carried out on the recommendation of the GCSERC, which is responsible for proposing the compensation of Corporate Officers to the Board of Directors.
Definitions
CFR: |
Refers to the Code of Federal Regulations, which codifies the general rules and regulations of the U.S. Securities Exchange Act of 1934, as amended, applicable to the Policy.
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GCSERC: |
Refers to the Governance and Corporate Social and Environmental Responsibility Committee, which is a committee of the Board of Directors of Orange SA.
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Covered Corporate Officers: |
Means any executive or non-executive Corporate Officer of Orange SA designated as such in Article 4 "Company Corporate Officers Subject to the Policy" below and falling within the definition of "Executive Officers" in CFR Section 240.10D-1.
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IFRS: |
Refers to the International Financial Reporting Standards, which are the international accounting standards applied by Orange for its financial statements and disclosures. These international accounting standards, which must be applied within the European Union in accordance with Regulation (EC) No. 1606/2002 of July 19, 2002, include International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and related interpretations.
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Financial Reporting Measures: |
Refers to all financial reporting measures included in Orange's financial information that are determined or presented within the framework of the accounting principles used to prepare the financial statements, and all financial reporting measures derived in whole or in part from them, such as the Orange share price or total shareholder return (TSR).
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Policy: |
See definition in the Preamble.
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Recovery Period: |
Refers to, with respect to the period for which the Recoverable Compensation of a Covered Corporate Officer may be requested, the three full fiscal years immediately preceding the date on which the Company would be required to make a Material Accounting Restatement.
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Recoverable Compensation: |
Refers to the amount of Variable Compensation Received that would not have been Received if the Variable Compensation Received had been determined using the same relevant corrected Financial Reporting Measures as the financial statements after Accounting Restatement(s).
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The amount of the Recoverable Compensation will be calculated net of social security contributions, but before taking into account any taxes and charges that the Covered Corporate Officers may have incurred on the Recoverable Compensation.
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Variable Compensation: |
Means any element of compensation of a Covered Corporate Officer that includes one or more Financial Reporting Measures and whose allocation, payment or gain is linked in whole or in part to the achievement of one or more Financial Reporting Measures. |
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Upon adoption of the Policy, the Variable Compensation Received by the Chief Executive Officer shall be either annual variable compensation, which includes financial and non-financial indicators, or multi-year variable compensation (LTIP), which also includes performance indicators, the terms, conditions and conditions of which are set out in a compensation policy presented in Orange's Universal Registration Document (UDR) and on which the shareholders are asked to vote at the Annual Shareholders Meeting under the "say-on-pay" requirements.
For members of the Executive Committee and for the Group Chief Accounting Officer, this is annual variable compensation, the multi-year variable compensation (LTIP), profit-sharing, and incentive schemes, each of which includes performance indicators briefly described in Orange’s URD.
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Variable Compensation Received: |
Refers to Variable Compensation deemed "Received" during a fiscal year during which the Financial Reporting Measure(s) used to calculate Variable Compensation is/are applied and achieved, even if the allocation, payment or gain of such Variable Compensation occurs after the end of the fiscal year in question, within the limits of the Recovery Period.
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Accounting Restatements: |
Refers to, for previously published financial statements, correcting the recognition, measurement and disclosure of the amount of items in the financial statements as if an error from a prior period had never occurred, in particular as a result of a change in accounting policy under IFRS and related interpretations (SIC or IFRIC interpretations), or subsequent amendments to these standards and related interpretations that will be published or adopted in the future by the International Accounting Standards Board (IASB).
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In particular, an Accounting Restatement may result from changes in accounting segments within the Company due to changes in internal organization, the reclassification of discontinued operations, the retroactive application of a change in the reporting entity, for example following a reorganization within the Orange Group, a business combination (IFRS 3), a retroactive stock split, the payment of dividends or interim dividends in respect of a past financial year, or changes in the capital structure.
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Judgments or assumptions made by the Company in preparing its financial statements and applying its accounting policies, and which have not been commented on by the statutory auditors in their audit report, will not be considered as an Accounting Restatement if these judgments or assumptions were to be reviewed in the future (i.e., the application of a change in estimate as required by certain IFRS standards).
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Material Accounting Restatement: |
Refers to, for previously published financial statements, the Accounting Restatement due to the Company's material noncompliance with a financial reporting obligation under U.S. securities law, including any Accounting Restatement required to correct an error in the previously published financial statements material to those financial statements, or that would result in a material misstatement if the error were corrected or left uncorrected in the current period.
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Materiality will be analyzed in accordance with IFRS accounting standards, and in particular IAS 1 and IAS 8, in conjunction with the Company and its statutory auditors.
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Company: |
Refers to Orange, a French société anonyme (a public limited company under French law) with its registered office located at 111 quai du Président Roosevelt, 92130 Issy-les-Moulineaux, France, registered with the Nanterre Trade and Companies Register (RCS) under the number SIREN 380 129 866. |
Clawback principle
On the recommendation of the GCSERC, in the event that the Company has to make a Material Accounting Restatement, the Board of Directors will require any Covered Corporate Officers, and for the Recovery Period in respect of which this Material Accounting Restatement occurs, that he or she reimburse to the Company, within a reasonable timeframe, the Recoverable Compensation relating to the Recovery Period.
No repayment will be required if the Accounting Restatement is not a Material Accounting Restatement.
This Policy will be applied to Executive Committee members subject to compliance with applicable law and the sovereign discretion of the courts.
In the absence of repayment by the Covered Corporate Officers, the Company will bring an action for recovery of undue payments against the Covered Corporate Officers.
Corporate Officers subject to the Policy
In principle, the following are and will be covered by the Policy:
- Executive and non-executive corporate officers responsible for an operating division, another division or a support function (commercial, administrative or financial), those with the power to draft policies for the Group, and those of the Company's corporate officers referred to by name in applicable U.S. regulations as Covered Corporate Officers;
- Officers who are present in that capacity during all or part of the Recovery Period.
As of the date of adoption of the Policy, some of the non-executive corporate officers of Orange (Chairman of the Board, directors other than the Chief Executive Officer) are not covered by the Policy.
At the date of entry into force of the Policy, the Company's Covered Corporate Officers are:
- The Chief Executive Director;
- All members of the Executive Committee; and
- the Group Chief Accounting Officer.
Recoverable Compensation
Variable Compensation Received will only be considered as Recoverable Compensation if: (i) it is received after such Covered Corporate Officer has begun to perform their duties as an Covered Corporate Officer; (ii) the Covered Corporate Officer has been in such capacity during the Recovery Period; and (iii) it is received after the date of entry into force of the Policy and at a time when the Policy must be applied in accordance with U.S. regulations.
With respect to Variable Compensation Received based on the Orange share price or TSR that cannot be mathematically recalculated directly from the information contained in a Material Accounting Restatement, the amount of such Variable Compensation Received that will be considered as Recoverable Compensation will be based on a reasonable estimate of the impact of the Material Accounting Restatement on the share price or TSR taken into account in determining the Variable Compensation Received . The GCSERC will carry out this reasonable estimate itself or have it carried out by any person or entity it appoints, which must be duly documented.
Recovery Period
Under the Policy, for the purposes of determining the Recovery Period, the date on which the Company is required to prepare an Accounting Restatement is the earlier of the following two dates: (i) the date on which the Board of Directors, the Audit Committee or General Management, as applicable, determines, or should reasonably have determined, that the Company is required to prepare a Material Accounting Restatement, and (ii) the date on which a court, regulator or other legally authorized body orders the Company to prepare a Material Accounting Restatement.
Miscellaneous provisions relating to the implementation of the Policy
EXCEPTIONS TO RECOVERY BY THE COMPANY
The Company is required to recover all Recoverable Compensation Received by a Covered Corporate Officer in the event of a Material Accounting Restatement, unless one of the following conditions is met and the GCSERC has determined that recovery would be impracticable, in accordance with the provisions of CFR Section 240.10D-1, because:
- The direct expenses that would have to be paid to a third party to assist in enforcing this Policy would exceed the amount to be recovered;
- Carrying out the recovery would violate a law of the home country of a Covered Corporate Officer adopted before November 28, 2022, the date of publication of the U.S. clawback rules; or
- Carrying out the recovery would have certain effects on otherwise tax-qualified retirement plans under U.S. law, from which Covered Corporate Officers may benefit.
PROHIBITIONS
The Company is not entitled to insure or indemnify any Covered Corporate Officer against the loss of any Recoverable Compensation.
IMPLEMENTATION AND INTERPRETATION
The GCSERC will implement the Policy in accordance with the provisions of CFR Section 240.10D-1 and any interpretative guidance issued thereunder.
The Policy may be amended at any time by the Board of Directors, in particular to correct any clerical error, rectify any omission or clarify any ambiguity or inconsistency.
The GCSERC will ensure that the U.S. rules are properly taken into account in the compensation packages of the Covered Corporate Officers, in particular the executive corporate officer(s), and will liaise with General Management in respect of the Company's salaried corporates officers.
POLICY COMMUNICATION
The Policy will be filed and publicly disclosed as an appendix to Orange's annual report on Form 20-F filed with the U.S. Securities and Exchange Commission following the Effective Date, and disclosed to the public in France in accordance with applicable disclosure requirements.
As applicable, any recovery requested by the Company under the terms of the Policy will be disclosed in accordance with applicable U.S. and French regulations.
Effective date of the Policy
The Policy shall come into force on the deadline set by the NYSE in the Listing Rules published in application of the CFR, i.e. on October 2nd, 2023.