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FRANCE TELECOM : FRANCE TELECOM-ORANGE : financial results 2012

       FRANCE TELECOM : FRANCE TELECOM-ORANGE : financial results 2012




                                                                 press release

                                                       Paris, 20 February 2013

France Telecom-Orange reached its operating cash flow target of 8 billion
euros in 2012 while increasing its investments

Despite heightened competitive pressure, France Telecom-Orange maintains its
operating cash flow target of more than 7 billion euros for 2013

  *France made a positive contribution to this target due to the quality of
    its network, commercial offers and cost control: 

  *Orange was ranked the best network by the French regulator ARCEP for the
    third consecutive year 

  *after a difficult first half, the success of the new Sosh, Open and
    Origami segmented offers helped to stabilise the mobile market share at
    37.3% (31 December 2012) and to regain a total mobile base of more than 27
    million customers 

  *the good performance on indirect expenses and commercial costs partially
    offset the increase in interconnection costs linked to voice and SMS/MMS
    traffic 

  *France Telecom-Orange had 230.7 million customers at 31 December 2012, an
    increase of 3.0% year on year (+6.8 million net additions^[1]), reflecting
    growth in mobile, with the customer base up 4.5%:

  *in France, the mobile customer base rose 0.4% in the year

  *in Europe (excluding France), the mobile customer base grew 0.4%^1 and 4G
    was launched in six countries. In Spain, Orange was the market leader in
    mobile number portability in 2012 and mobile contracts rose 6.4%, while
    the fixed broadband customer base increased 10.3%

  *Africa and the Middle East had 81.6 million mobile customers at 31
    December 2012, up 9.4% year on year (7.0 million net additions)   

  *Consolidated revenues were 43.515 billion euros, a slight decrease of 0.6%
    on a comparable basis and excluding the impact of regulatory measures:

  *In France, the decline in mobile services revenues was limited to 0.9%.
    The national roaming contract signed with the new market entrant partially
    offset the impact of price decreases 

  *in Europe (excluding France), revenues rose 0.9% with a 3.6% increase in
    Spain led by growth in fixed broadband and the rapid development of mobile
    Internet browsing 

  *in Africa and the Middle East, revenue growth continued to be strong at
    5.3%, led by Côte d'Ivoire and Guinea

  *Restated EBITDA was 13.785 billion euros. The EBITDA margin (31.7%) fell
    slightly by 1.6 percentage points due to direct cost savings (reduction of
    commercial expenses), the control of labour expenses, and the
    stabilisation of other indirect costs with savings achieved as part of the
    Chrysalid plan. Restated EBITDA for 2012 includes excess payroll costs in
    France of 40 million euros linked to the employer contribution based on
    profit sharing (forfait social) and the 122 million euro impact related to
    the European Commission's decision regarding the method of financing the
    retirement of civil servants at France Telecom

  *The Group share of net income was 3.387 billion euros in 2012 on a
    comparable basis, a 30.7% decrease in relation to the previous year
    (excluding the impact of the new Part-Time for Seniors agreement of -726
    million euros after tax in 2012 and excluding the impairment of goodwill
    and assets of
    -1.841 billion euros in 2012 and -991 million euros in 2011). On a
    published basis, it was 820 million euros in 2012 compared to 3.895
    billion in 2011

  *Capital expenditure (5.818 billion euros) rose 1.7% compared to 2011 on a
    comparable basis, led by investment in very high speed fixed (FTTH) and
    mobile (4G) broadband, which is accelerating, notably in France. The ratio
    of CAPEX to revenues was 13.4%

  *Operating cash flow (restated EBITDA - CAPEX) was 7.967 billion euros,
    consistent with the Group's operating cash flow target for 2012 of close
    to 8.0 billion euros 

  *Net debt was 30.545 billion euros at 31 December 2012. The restated ratio
    of net debt to EBITDA is 2.17, in line with the objective of returning to
    a net debt/EBITDA ratio of close to 2 by the end of 2014

Outlook for 2013: the Group confirms its operating cash flow target of more
than 7 billion euros.
Several operational goals support this target, including the following
priorities:

  *accelerating the transformation of the Group's cost structure in order to
    reduce the cost base in 2013, and generate revenue growth in mobile data
    services of at least 10% for the Group,

  *France: stabilising market share in the mobile segment at a level above
    35% and reaching 4G coverage of 30% of the population by the end of 2013.
    In the fixed segment, including the Livebox Play with at least 50% of all
    broadband sales, and doubling the optical fibre customer base,

  *Europe: marketing convergent offers in seven countries; launching at least
    six mobile network sharing programmes across the zone; increasing the Net
    Promoter Score in all countries,

  *Africa and the Middle East: reaching 8 million Orange Money customers and
    12 million devices compatible with data services (+70%) by the end of the
    year; reduce the churn rate for mobile offers by 20%,

  *Enterprise: generating more than 30% growth in cloud computing over the
    course of the year; double digit revenue growth in emerging countries;
    improving customer satisfaction across the footprint.

The Group's financial policy:

  *objective of returning to a net debt / EBITDA ratio of close to 2 by the
    end of 2014 in order to preserve the Group's financial strength and
    investment capability,

  *in this context, the Group will pursue a policy of selective acquisition,
    focusing on possible consolidation operations in markets where the Group
    already operates, 

  *payment of a minimum dividend of 0.80 euro per share for 2013. An interim
    dividend payment for 2013 of 0.30 euros per share will be paid in cash in
    December,

  *the Group confirms the payment of the balance of the dividend for 2012 of
    0.20 euro per share to be paid in cash on 11 June 2013^[2].

Commenting on the publication of the Group's 2012 results, France
Telecom-Orange Chairman and CEO Stéphane Richard said: "During a particularly
turbulent 2012, the Group showed its resilience by achieving its financial
targets, notably an operational cash flow of 8 billion euros. In addition, the
Group continued to capitalise on its networks, with almost 6 billion euros of
investments, and in particular it accelerated the rollout of optical fibre and
4G in France. The Group's customer base surpassed 230 million globally, of
which over 80 million are in Africa and the Middle East, an increase of 10% on
a year earlier.



However, the economic situation and the continued price war in most European
countries necessitated an acceleration in the Group's transformation
programme. The strengthening of our mobile offers will be bolstered by a more
marked distinction between low-cost and higher-value models, providing
customers with an unparalleled service, especially in the high-speed broadband
segment. This will be supported by the Orange network, its coverage, speed and
extensive reach throughout the country.



In addition to the national roaming agreement in France, as well as MVNO and
network-sharing agreements, the Group will continue its policy of co-operating
to improve returns on investment. In tandem, we will simplify our operations
to adapt to changes in our French workforce, an effect that will be amplified
by the new Part-Time for Seniors programme. All this enables me to confirm our
operational cash-flow target of over 7 billion euros for 2013." 

key figures

  *full year data

                     
                                                                                  impact
                 2012      2011      2011      change     change      change       of     impact of
                      comparable historical  comparable  excluding  historical   change     change in
                            basis      basis       basis regulatory       basis       in consolidation
In millions of                                             measures             exchange         scope
euros                                                                              rates
                    
Revenue        43515    44703    45277      (2.7)%     (0.6)%      (3.9)%     0.5%        (1.7)%
Of which:
 France        21431    22560    22534      (5.0)%     (2.3)%      (4.9)%       -          0,1%
 Spain          4027     3989     3993        0.9%       3.6%        0.9%       -        (0,1)%
 Poland         3381     3526     3625      (4.1)%     (2.5)%      (6.7)%   (1.6)%        (1,2)%
 Rest of World  8281     8164     8795        1.4%       3.2%      (5.8)%     1.8%        (9,0)%
 Enterprise     7001     7196     7101      (2.7)%     (2.7)%      (1.4)%     1.5%        (0,1)%
 International
 Carriers and   1623     1585     1610        2.4%       2.4%        0.8%     0.3%        (1,8)%
 Shared
 Services
 Eliminations  (2229)    (2317)    (2381)          -          -          -        -             -
Restated       13785    14879    15083      (7.4)%     (5.3)%      (8.6)%     0.2%        (1.6)%
EBITDA*
 in % of         31.7%      33.3%      33.3%  (1.6) pts. (1.6) pts.  (1.6) pts.       -            -
 revenues
Of which:
 France         7834     8699     8654      (9.9)%     (7.2)%      (9.5)%       -          0,5%
 Spain            951       840       839       13.3%      15.0%       13.3%       -          0,0%
 Poland         1156     1238     1274      (6.6)%     (6.8)%      (9.3)%   (1.0)%        (1,8)%
 Rest of World  2800     2818     2994      (0.6)%       1.0%      (6.5)%     1.5%        (7,4)%
 Enterprise     1177     1291     1283      (8.8)%     (8.8)%      (8.3)%     0.6%          0,1%
 International
 Carriers and    (133)        (6)        39          -         -          -       -            -
 Shared
 Services
 Eliminations       -        -        -         -         -         -       -            -
Operating       4063                7948
income
Net income
before          1104                3828
minority
interests
Net income
attributable
to equity         820                3895
owners of
France Telecom
SA
CAPEX
(excluding GSM  5818     5720     5770        1.7%                   0.8%
and UMTS
licences)
 in % of         13.4%      12.8%      12.7%     0.6 pt.                0.6 pt.
 revenues
Operating cash
flow (restated  7967     9160     9313     (13.0)%                (14.5)%
EBITDA*-
CAPEX)
                               31         31
                         December   December
                             2012       2011
Net financial             30545    30890
debt
Restated ratio
of net                      2,17      2,09
financial debt
/ EBITDA**

* EBITDA restatements are described in appendix 5.

** The method of calculating the restated ratio of net financial debt to
EBITDA is described in appendix 4.

  *quarterly data

                     
                  4^th       4^th       4^th      change     change       change of which  of which
               quarter    quarter    quarter  comparable  excluding   historical   change change in
                 2012      2011      2011       basis regulatory        basis       in consolid.
                                                           measures               foreign     scope
                                                                                 exchange
In millions of        comparable historical
euros                       basis      basis
                                                                                            
Revenue        10917    11278    11428      (3.2)%     (1.1)%       (4.5)%     1.0%    (2.3)%
Of which:
 France         5325     5645     5661      (5.7)%     (3.0)%       (5.9)%       -    (0,3)%
 Spain          1011     1010     1010        0.1%       2.5%         0.1%       -    (0,1)%
 Poland           847       904       824      (6.3)%     (4.2)%         2.9%     9.9%    (0,1)%
 Rest of World  2090     2052     2292        1.9%       4.2%       (8.8)%     0.5%   (11,0)%
 Enterprise     1786     1836     1818      (2.7)%     (2.7)%       (1.8)%     1.2%    (0,2)%
 International
 Carriers and     415       414       423        0.1%       0.1%       (2.1)%     0.2%    (2,4)%
 Shared
 Services
 Eliminations    (558)      (583)      (600)           -          -            -        -         -
Restated        3135     3438     3472      (8.8)%     (6.5)%       (9.7)%     0.8%    (1.7)%
EBITDA*
 in % of         28.7%      30.5%      30.4%  (1.8) pts. (1.7) pts.   (1.7) pts.
 revenues
CAPEX
(excluding GSM 2118  2021     2039      4.8%                    3.9%       0.9%     (1.7)%
and UMTS
licences)
 in % of         19.4%      17.9%      17.8%    1.5 pts.                1.6 pts.
 revenues
Operating cash
flow
(restated      1018  1417     1433      (28.2)%                 (29.0)%
EBITDA* -
CAPEX)

* EBITDA restatements are described in appendix 5.

                                      *

                                  *    *

The Board of Directors of France Telecom SA met on 19 February 2013 and
examined the Group's financial statements.

The Group's statutory auditors audited these financial statements, and the
audit reports pertaining to their certification are in the process of being
issued.

More detailed information is available on the France Telecom-Orange website:

                                www.orange.com

comments on key Group figures

revenues

The France Telecom-Orange group revenues were 43.515 billion euros in 2012, a
decrease of 2.7% on a comparable basis.
Excluding the impact of regulatory measures (-916 million euros), the Group's
revenues declined slightly, by 0.6%, in comparison with the previous year. The
impact of increased competitive pressure in European countries, notably in
France, was partially offset by the strong growth of operations in Africa and
the Middle East (+5.3%) and in Spain (+3.6%). 
In the fourth quarter of 2012, Group revenues were 10.917 billion euros, a
decline of 3.2% on a comparable basis. Excluding the impact of regulatory
measures (-243 million euros), the decline was 1.1%, the same as in the third
quarter, after falling 0.1% in the first half.

Changes in revenues by location, excluding the impact of regulatory measures,
were as follows:

  *in France, mobile services^[3] revenues fell slightly, by 0.9%, over the
    year: the growth of Internet browsing and the development of national
    roaming largely offset the downturn of voice and SMS revenues from Orange
    customers, marked by the redesign of the Sosh, Open and Origami segmented
    offers. The mobile market share stabilised at 37.3% at 31 December 2012.
    At the same time, fixed broadband revenues rose 5.2%, with a broadband
    market share estimated at 24% for the year (20.4% in the fourth quarter);
  *in Spain, revenues grew 3.6%, led both by mobile (+2.4%), with the rapid
    growth of Internet browsing and the growth in the number of contract
    customers, and by fixed services (+8.8%), with the strong development of
    triple-play ADSL offers;

  *in Poland, mobile growth was limited to 0.3% for the year, marked by price
    cuts in the second half (revenues were down 2.3% in the fourth quarter).
    Fixed services improved, with the decline limited to 2.9% in 2012 compared
    to a decline of 6.4% in 2011, in particular due to the development of
    business services;  

  *Rest of World segment: solid growth of 5.3% in Africa and the Middle East
    in 2012 was led by the recovery in Côte d'Ivoire, the improvement in Egypt
    and continued growth in Guinea, Cameroon, Senegal and Niger. Europe
    increased 1.3% with growth in every country in the zone except for
    Slovakia, impacted by the overhaul of its mobile offers;  

  *Enterprise segment: a decline of 2.6% in 2012, excluding equipment sales,
    was at the same pace as that of the previous year. The downward trend of
    traditional services was partially offset by the growth of other
    operations, particularly internationally.

On an historical basis, 2012 revenues fell 3.9% compared to 2011, including:

  *the impact of changes in the consolidation perimeter (-1.7 percentage
    points), mainly with the sale of Orange Switzerland (29 February 2012),
    the sale of TP Emitel in Poland (22 June 2011), and the acquisition of the
    mobile operator CCT in the Democratic Republic of the Congo (20 October
    2011);

  *the favourable impact of foreign exchange (+0.5 percentage points): the
    decrease of the Polish zloty was more than offset by the increase of other
    currencies, in particular the US dollar, the Egyptian pound, the Jordanian
    dinar, the Dominican peso and the Swiss franc.

customer base growth

The Group had 230.7 million customers (excluding MVNOs) at 31 December 2012, a
2.3% increase in relation to 31 December 2011, with 5.2 million net additions
in one year. Excluding the impact of the Swiss disposal, the number of the
Group's customers grew 3.0%, with 6.8 million net additions in one year,
reflecting the development of mobile services in Africa and the Middle East.

In mobile services (excluding MVNOs), the Group had 172.4 million customers at
31 December 2012, an increase of 4.5% year on year, excluding the impact of
the Swiss disposal (7.4 million net additions):

  *Africa and the Middle East had 81.6 million customers at 31 December 2012,
    an increase of 9.4% (7.0 million net additions). Orange Money, now
    marketed in thirteen African and Middle Eastern countries, had 5.6 million
    customers at 31 December 2012;

  *in France, the mobile customer base improved significantly, with 552,000
    additional customers in the fourth quarter after an increase of 317,000
    customers in the third quarter, offsetting the downturn reported in the
    first half, thanks to the success of the new segmented Sosh, Open and
    Origami offers. In all, France had a mobile customer base of 27.2 million
    customers at 31 December 2012, a year-on-year increase of 0.4% (+100,000
    customers). The number of contract customers increased 1.3% to 19.7
    million, while the number of prepaid offer customers declined 2.0% to 7.5
    million;  

  *other regions (63.6 million customers at 31 December 2012) also
    contributed to the growth of the Group's customer base with a 0.5%
    increase year on year (+325,000 customers) excluding the impact of the
    Swiss disposal, notably Poland (+237,000), Spain (+176,000), Moldavia
    (+162,000) and the Dominican Republic (+108,000), while the United Kingdom
    lost 343,000 customers. Contracts represented 52% of the mobile customer
    base in the other regions at 31 December 2012, an increase of 4.4% year on
    year.

There were 14.9 million fixed broadband customers at 31 December 2012, an
increase of 3.4% year on year with 485,000 additional customers, including
295,000 in France and 131,000 in Spain. Added to this was the growth reported
in Slovakia, Egypt and Jordan. Fixed broadband subscribers included 234,000
optical fibre customers at 31 December 2012, of which 176,000 were in France
and 56,000 were in Slovakia. 

In Europe, digital TV (IPTV and satellite) rose 15.0% with 5.9 million
subscribers at 31 December 2012 (770,000 net additions in one year), mostly in
France and Poland, but also in Slovakia and Spain.

Restated EBITDA

Restated EBITDA was 13.785 billion euros in 2012 in contrast to 14.879 billion
euros in 2011, a decline of 7.4% on a comparable basis. Excluding regulatory
measures (-316 million euros), the downturn was 5.3%.
The ratio of restated EBITDA to revenues was 31.7%, a slight decline of 1.6
percentage points in comparison with 2011, mainly due to:

  *the reduction in commercial expenses and content purchases (-2.6%),
    reflecting in particular the optimisation of mobile handset subsidies in
    France and Spain, and the development of SIM-only offers; 

  *the controlling of labour expenses, with the increase limited to 1.7% for
    the year^[4]. The average number of full time equivalent employees was
    163,545 in 2012, as contrasted with 165,001 in 2011, on a comparable
    basis. The annual trend reflects the optimisation of the Group's cost
    structure with a reduction of 1,456 full time equivalents year on year
    (-0.9%) despite the internalisation of the Oviedo call centre in Spain
    (impact of +344 full time equivalents in 2012); 
  *the deployment of the Chrysalid plan aimed at improving operational
    efficiency, which achieved total savings of 718 million euros in 2012,
    including 655 million euros on operating expenses and 63 million euros on
    capital expenditure.

Changes in ratios of operating expenses to revenues, on a comparable basis,
were as follows:

  *the ratio of commercial expenses and content purchases was 15.5%, the same
    as in 2011;

  *the ratio of service fees and inter-operator costs was 12.6%, an
    improvement of 0.4 percentage points. The decrease in call termination
    rates and roaming tariffs (favourable impact of 600 million euros) was
    partially offset by the growth in traffic exchanged with other operators,
    particularly SMS traffic;

  *the ratio of (restated) labour expenses was 20.8%, an increase of 1.2
    percentage points in relation to the previous year, of which 0.4
    percentage points corresponded to the 122 million-euro expense linked to
    the European Commission decision made in December 2011 and to the impact
    of the increase in the employer contribution based on profit sharing since
    1 August 2012;

  *The ratio of other expenses to revenues was 19.4%, an increase of 0.8
    percentage points in relation to the previous year due to the reduction in
    revenues. All other (restated) expenses remained essentially stable: the
    increase in energy and lease expenses was offset by the reduction in
    overheads and restructuring costs. 

operating income

Group operating income was 4.063 billion euros in 2012, a decrease of 3.885
billion euros (-48.9%) on an historical basis, including -929 million euros
from the effect of changes in the consolidation perimeter and a foreign
exchange impact of -20 million euros. Changes in other items on a comparable
basis were as follows:

  *the decline in EBITDA^[5] (-2.235 billion euros), chiefly corresponding to
    the decrease in revenues (-1.188 billion euros) and the impact of the new
    agreement on the Part-Time for Seniors plan signed in December 2012
    (provision of 1.107 billion euros);
  *the increase in the impairment of goodwill and assets (-835 million euros
    on a comparable basis) linked in particular to the impairments recognised
    in 2012 in Poland (-889 million euros), Egypt (-400 million euros) and
    Romania (-359 million euros);

  *changes in the share of income from associates (-164 million euros).

These unfavourable items were partially offset by the reduction in
depreciation and amortisation charges (+298 million euros on a comparable
basis).

net income

The France Telecom-Orange group consolidated net income was 1.104 billion
euros in 2012, compared to 3.828 billion euros in 2011, a decrease of 2.724
billion euros. The decline in operating income (-3.885 billion euros) was
partially offset by:

  *the improvement in net financial income (+305 million euros), mostly tied
    to the revised financial parameters for the acquisition price of ECMS
    shares from OTMT and for the free float, which generated financial income
    of 272 million euros in 2012; and

  *the reduction in corporate income tax (+856 million euros) which in 2012
    was due to the recognition of a deferred tax rebate related to the new
    Part-Time for Seniors agreement in France and to the revaluation of
    deferred tax assets in Spain.

The Group's share of net income was 820 million euros in 2012, compared with
3.895 billion euros in 2011. Excluding the impact of the new Part-Time for
Seniors agreement (-726 million euros after tax in 2012) and excluding the
impairment of goodwill and assets (-1.841 billion euros in 2012 and -991
million euros in 2011), the Group's share of net income was 3.387 billion
euros in 2012, a 30.7% decrease on a comparable basis compared to 2011.

CAPEX

CAPEX in 2012 was 5.818 billion euros, an increase of 1.7% on a comparable
basis in relation to the previous year, reflecting:

  *the development and adaptation of the mobile network in Spain to support
    the growth in usages;

  *the reinforcement of Orange's leadership in networks with the acceleration
    of capital expenditure programmes in very high speed networks in France
    (optical fibre and 4G mobile network). 

The ratio of CAPEX to revenues was 13.4% in 2012.
Investment in networks represented 55% of the Group's CAPEX in 2012, an
increase of 1.4% with the development of strategic projects, in particular:

  *in France, the ramp-up of optical fibre deployment, the acceleration of
    CAPEX in very high-speed mobile 4G and increased investment in other
    mobile network capacities;  

  *in Spain, the continuation of mobile network transformation programmes,
    notably the renewal of the access network and the increased investments in
    capacity; 

  *in the Rest of World segment, the renewal of the mobile access networks in
    the principal European subsidiaries to improve the quality of service and
    reduce energy costs, and the commercial launch of 3G in the Congo and of
    4G in Moldova, Romania, Luxembourg and the Dominican Republic;

In 2012, two major high-speed submarine cables serving Africa were delivered:
LION2 on the eastern coast, which entered into service on 12 April, and ACE on
the western coast, which entered into service on 19 December.
Investment in information technology (21% of total CAPEX in 2012) rose 4.6%,
in particular with the ongoing transformation programmes in France (redesign
of the commercial system and convergence of information systems for fixed,
mobile and Internet services). 
CAPEX on service platforms also increased with the development of new growth
engines such as Orange Money in Africa and in the Middle East.

operating cash flow

Operating cash flow, which corresponds to restated EBITDA minus CAPEX^[6], was
7.967 billion euros in 2012. This is in line with the Group's target for 2012
of close to 8.0 billion euros in operating cash flow.

net financial debt

France Telecom had net financial debt of 30.545 billion euros at 31 December
2012, a reduction of 345 million euros in relation to net financial debt at 31
December 2011. The main elements of the change in net financial debt in 2012
are presented in appendix 4.

The restated ratio of net debt to EBITDA^[7] was 2.17 at 31 December 2012, in
line with the objective of returning to a net debt to EBITDA ratio of close to
2 at the end of 2014.

changes to portfolio of operations

In 2012, France Telecom-Orange continued to pursue its international
development strategy to develop its growth potential with changes to the
shareholders' agreement relating to ECMS in Egypt and the increase in the
Group's equity interest in that company.
In Spain, Orange reinforced its presence on the mobile market with the
acquisition in December 2012 of 100% of Simyo, a mobile virtual network
operator held until then by KPN.
The Group also finalised the disposal of its operations in Switzerland (early
2012) and in Austria (early 2013).
Finally, on 15 February 2013 Sonae and France Telecom-Orange signed a put and
call-option agreement regarding France Telecom's full participation of 20% in
Sonaecom, a telecoms operator in Portugal. Sonae is already the majority
shareholder in Sonaecom with more than 53.17%.
These transactions gave shape to the Group's strategy of optimising its asset
portfolio.

2012 dividend

Taking into account the interim dividend payment of 0.58 euros on 12 September
2012 (which is 0.60 euros minus the additional contribution of 3% on the
dividends distributed), the Board of Directors will recommend to the Annual
General Meeting of Shareholders of 28 May 2013 the payment of a dividend of
0.20 euros per share, to be paid in cash on 11 June 2013^[8].

review by business segment

France

In millions of euros                    period ended 31 December
                            2012    2011      2011      12/11      12/11
                                  comparable historical comparable historical
                                        basis      basis      basis      basis
                                                                            
                                                                           
Revenue                    21431  22560    22534     (5.0)%     (4.9)%
Adjusted EBITDA            7834    8699     8654     (9.9)%     (9.5)%
Restated EBITDA / Revenues   36.6%      38.6%      38.4%           
CAPEX                      2712    2620     2619      3.5%       3.6%
CAPEX / Revenues             12.7%      11.6%      11.6%           
Restated EBITDA - CAPEX     5122     6080     6035    (15.8)%    (15.1)%

In France revenues were 21.431 billion euros in 2012, a 5.0% decrease on a
comparable basis. Excluding the impact of regulatory measures (-615 million
euros), there was a 2.3% decline.

Revenues from Personal Communication Services decreased 2.2% on a comparable
basis to 10.686 billion euros. Excluding the impact of regulatory measures
(-566 million euros), revenues from mobile services^[9] fell 0.9%: the growth
of Internet browsing and the development of national roaming largely offset
the downturn of voice and SMS usage by Orange customers, linked to the
overhaul of tariffs on the Sosh, Open and Origami segmented offers. As
expected, ARPU^[10] declined 10% over the full year 2012.

The total mobile customer base (contracts and prepaid offers, excluding MVNOs)
stood at 27.190 million customers at 31 December 2012, a 0.4% year-on-year
increase linked to the recovery in contract numbers that began in June, thanks
to the successful new segmented offers. Over the year, 252,000 contract
customers were added (net of terminations) to reach a total of 19.704 million
customers at 31 December 2012. Contracts represented 72.5% of the total
customer base (+0.7 percentage point year on year). The Sosh online offers had
794,000 customers at 31 December 2012, while the Open quadruple-play offers
had 3.038 million customers on the same date. Prepaid offers registered a
decline of only 2.0% for the year: a fourth quarter recovery (320,000 net
additions) after the third quarter's stabilisation of the customer base
(decrease limited to 3,000 customers) partially offset the sharp drop in the
first half (-468,000 customers) thanks to the new Mobicarte offers marketed in
August. 

Revenues from Home Communication Services decreased 4.0% on a comparable basis
to 12.375 billion euros. Excluding the impact of regulatory measures (-136
million euros), the decline was 2.9%, reflecting the downward trend in
traditional telephone services^[11] (-15.0%).

Revenues from fixed broadband services rose 5.2%:

  *fixed broadband had 295,000 net additions in 2012, including 81,000 for
    optical fibre, whose development accelerated over the course of the year.
    The broadband market share was estimated at 20.4% in the fourth quarter
    and at 24% for the full year. The fixed broadband customer base rose 3.1%
    year on year to 9.893 million subscribers at 31 December 2012 (including
    176,000 optical fibre customers);  

  *the digital TV customer base increased 15.8% year on year, with 5.067
    million customers at 31 December 2012;

  *fixed broadband ARPU^[12] increased 2.2%, with the impact of price cuts
    more than offset by the growth of content sales, by the improved customer
    base mix with the spread of optical fibre, and by the growing share of
    ADSL subscribers connected with naked ADSL^[13] (57.7% at 31 December
    2012, +7.6 percentage points year on year).

 
Revenues from Carrier Services fell 0.3% on a comparable basis. Excluding the
impact of regulatory measures
(-126 million euros), revenues rose 2.6% due to the increasing number of
telephone lines sold to other carriers (+10.1% year on year, 12.577 million
lines at 31 December 2012).

fourth quarter 2012

France reported revenues of 5.325 billion euros, a 5.7% decrease on a
comparable basis. Excluding the impact of regulatory measures (-154 million
euros), the decline was 3.0%, after falling 2.4% in the third quarter and 2.0%
in the first half.

Personal Communication Services declined 4.1% on a comparable basis to 2.667
billion euros, after falling 2.3% in the third quarter and 1.1% in the first
half. Revenues from mobile services^[14] fell 2.6% excluding the impact of
regulatory measures (-147 million euros), after declining 1.0% in the third
quarter and rising 0.1% in the first half.

Revenues from Home Communication Services declined 2.0%, to 3.113 billion
euros excluding the impact of regulatory measures (-27 million euros), after
falling 3.1% in the third quarter and 3.3% in the first half.

In France, restated EBITDA was 7.834 billion euros in 2012, a reduction of 865
million euros (-9.9%) on a comparable basis, linked mostly to the impact of
regulatory measures on EBITDA (-259 million euros) and to the decrease in
revenues (-514 million euros, excluding the impact of regulatory measures).
Excluding regulatory measures, the reduction of commercial expenses for
mobiles services, generated by the optimisation of handset subsidies and by
the growth of SIM-only packages, partially offset the increase in other direct
costs (in particular the increase in volumes of services fees and
inter-operator costs). Indirect costs remained essentially stable compared
with the previous year.

CAPEX in France was 2.712 billion euros in 2012, an increase of 3.5% in
relation to the previous year on a comparable basis. CAPEX rose significantly
in optical fibre and in very high-speed mobile 4G. In addition to this there
were:

  *investments in the mobile network to support the growth in data volumes
    and to prepare for fourth generation services (LTE);

  *investments in information systems to meet the challenges of improving
    service quality and renovating the distribution information system.

These changes were offset by the decrease in capital spending related to the
Livebox and TV decoders through process optimisation and recycling. 

Spain

In millions                       period ended 31 December
of euros
               2012          2011          2011         12/11         12/11
                        comparable     historical    comparable    historical
                              basis          basis         basis         basis
                                                                            
                                                                           
Revenue       4027         3989         3993          0.9%          0.9%
Adjusted        951           840           839         13.3%         13.3%
EBITDA
Restated
EBITDA /       23.6%          21.0%          21.0%              
Revenues
CAPEX           473           405           405         16.9%         16.9%
CAPEX /        11.8%          10.2%          10.1%              
Revenues
Restated
EBITDA -        478           435           434         10.0%         10.0%
CAPEX

Spain reported revenues of 4.027 billion euros in 2012, an increase of 0.9%.
Excluding the impact of regulatory measures (-100 million euros), revenues
rose 3.6% in comparison with 2011.

Personal Communication Services reported growth of 2.4% to 3.262 billion
euros, excluding the impact of regulatory measures (-100 million euros),
reflecting:

  *the steady increase in the number of contracts, +6.4% year on year
    (+484,000 customers) with 8.1 million contracts at 31 December 2012. At
    that date, contracts represented 68.4% of the total customer base, in
    contrast to 65.3% one year earlier (+3.1 percentage points in one year).
    Orange Spain was the market leader in mobile number portability^[15] in
    2012;
  *the strong revenue growth in data services excluding SMS (+41%), with the
    rapid development of Internet browsing. The number of subscriptions to
    offers including Internet browsing grew 69% year on year to 5.0 million
    users at 31 December 2012;

  *the development of hosted MVNOs, whose customer base rose 20.9% year on
    year to reach 1.8 million customers at 31 December 2012.

These positive items were partially offset by the downturn in voice and SMS
services, linked in particular to the lower volumes exchanged in a
particularly difficult economic environment. 

Revenues from Home Communication Services rose 8.8% on a comparable basis to
765 million euros, led by strong growth in fixed broadband services (+14.1%).
The number of ADSL subscribers rose 10.3%year on year to 1.396 million
customers at 31 December 2012, while ARPU rose 2.0% over the year with the
growing share of totally unbundled ADSL subscribers (67.7% of the total
customer base at 31 December 2012, an increase of 6.3 percentage points in one
year) and the growth of Voice over IP.

fourth quarter 2012

Revenues in Spain were 1.011 billion euros, an increase of 0.1%. Excluding the
impact of regulatory measures
(-23 million euros), revenues rose 2.5%, largely on strong fixed broadband
revenue development (+10.3%), while mobile revenues increased 1.2%. 

Restated EBITDA in Spain was 951 million euros in 2012, an increase of 13.3%
(+112 million euros). The restated EBITDA margin was 23.6%, an improvement of
2.6 percentage points in relation to 2011, mainly due to revenue growth, the
drop in commercial expenses, and the decrease in service fees and
inter-operator costs due to call termination price cuts decided by the
regulator. 

CAPEX in Spain increased 16.9% to 473 million euros in 2012 in comparison with
2011 (+68 million euros), reflecting the growth of investments in capacity and
mobile network transformation, in particular the replacement of the mobile
access network designed to improve service quality and reduce energy costs.

Poland

In millions                       period ended 31 December
of euros
               2012          2011          2011         12/11         12/11
                        comparable     historical    comparable    historical
                              basis          basis         basis         basis
                                                                            
                                                                           
Revenue       3381         3526         3625        (4.1)%        (6.7)%
Adjusted      1156         1238         1274        (6.6)%        (9.3)%
EBITDA
Restated
EBITDA /       34.2%          35.1%          35.1%              
Revenues
CAPEX           558           610           627        (8.5)%       (11.0)%
CAPEX /        16.5%          17.3%          17.3%              
Revenues
Restated
EBITDA -        598           628           647        (4.8)%        (7.6)%
CAPEX

Revenues in Poland fell 4.1% on a comparable basis to 3.381 billion euros in
2012. Excluding the impact of regulatory measures (-60 million euros), the
annual change was -2.5%.

Revenues from Personal Communication Services decreased 3.0% on a comparable
basis to 1.787 billion euros. Excluding the impact of regulatory measures (-59
million euros), the annual change was +0.3%: the increase in incoming calls
and the rapid development of Internet browsing were offset by the decline in
revenues from voice services related to price decreases. The total mobile
services customer base (14.895 million customers at 31 December 2012,
excluding MVNOs) rose 1.6%, led by a 3.9% increase in prepaid offers (7.984
million customers at 31 December 2012).

Revenues from Home Communication Services declined 3.2% on a comparable basis
(-2.9% excluding the impact of regulatory measures) to 1.873 billion euros.
The decrease in traditional telephone services (-18% for the year) was
partially offset by:

  *the growth of business services with the development of ICT^[16];
  *the growth of fixed broadband revenues (+2%), led by the increase in
    ARPU^[17] due to the development of triple-play. The number of VoIP
    customers more than doubled in one year (394,000 customers at 31 December
    2012) and the number of digital TV customers grew 11.0% (706,000 customers
    at 31 December 2012). The number of fixed broadband services customers
    remained stable over the year, with 2.345 million customers at 31 December
    2012.  

fourth quarter 2012

Revenues in Poland fell 6.3% on a comparable basis to 847 million euros.
Excluding the impact of regulatory measures (-20 million euros), revenues fell
4.2% in the fourth quarter, after falling 3.4% in the third quarter. Personal
Communication Services declined 2.3% excluding the impact of regulatory
measures, after falling 0.7% in the third quarter under the impact of price
cuts, while the decline in Home Communication Services was limited to 2.4%
after falling by 3.7% in the third quarter, thanks to the improvement in fixed
broadband, which rose 7.6% after rising 3.7% in the third quarter. Orange
Poland remains the leader in the value mobile market with an estimated market
share of 29.0% in the fourth quarter 2012.

Restated EBITDA in Poland (1.156 billion euros in 2012) decreased 6.6% on a
comparable basis (-82 million euros) due to the decline in revenues, partially
offset by:

  *the reduction in service fees and inter-operator costs due to the call
    termination price cuts decided by the regulator,

  *the decrease in overheads through cost optimisation programmes, and

  *the reduction of restructuring costs. 

CAPEX in Poland (558 million euros in 2012) fell 8.5% on a comparable basis
following significant spending in 2011 on the fixed broadband programme. At
the end of 2012, 1.026 million ADSL lines had been built or upgraded to higher
speeds. The initial investments in the network-sharing project improved the
quality of the mobile network service, in particular outdoor 3G radio
coverage, which went from 62% of the population at 31 December 2011 to 69% at
31 December 2012.

Rest of World

In millions                       period ended 31 December
of euros
               2012          2011          2011         12/11         12/11
                        comparable     historical    comparable    historical
                              basis          basis         basis         basis
                                                                            
                                                                           
Revenue       8281         8164         8795          1.4%        (5.8)%
Adjusted      2800         2818         2994        (0.6)%        (6.5)%
EBITDA
Restated
EBITDA /       33.8%          34.5%          34.0%              
Revenues
CAPEX         1308         1365         1409        (4.1)%        (7.2)%
CAPEX /        15.8%          16.7%          16.0%              
Revenues
Restated
EBITDA -      1492         1453         1585          2.6%        (5.9)%
CAPEX

Revenues in the Rest of World segment declined 5.8% to 8.281 billion euros in
2012 on an historical basis due to changes in the consolidation perimeter^[18]
(-9.0 percentage points), partially offset by the favourable impact of foreign
exchange (+1.8 percentage points).

On a comparable basis and excluding the impact of regulatory measures (-140
million euros), revenues in the Rest of World segment grew 3.2% in 2012:

  *in Africa and the Middle East, revenue growth (+5.3%) was led by Côte
    d'Ivoire (+24.3% after significantly deteriorating in 2011), Egypt
    (+1.5%), Guinea (+47.3%), Cameroon (+7.4%), Senegal (+2.5%) and Niger
    (+25.2%). The mobile services customer base in the Africa and Middle East
    zone rose 9.4% year on year to 81.582 million customers at 31 December
    2012, representing 7.0 million net additions. The principal contributors
    were: Mali (+2.1 million), Cameroon (+1.1 million), Senegal (+1.0
    million), Egypt (+0.9 million) and Guinea (+0.5 million). In addition,
    Orange Money, now marketed in thirteen countries in Africa and the Middle
    East, had 5.6 million customers at 31 December 2012, an increase of 2.4
    million customers year on year (+74%);

  *in Europe, revenues rose 1.3% on the rapid growth of mobile Internet
    browsing and increased sales of smartphones, partially offset by the
    decline in voice revenues due to the overhaul of mobile services offers in
    most countries. Revenues in Belgium rose 3.2%, while Romania confirmed its
    improvement at 0.8% for the year after falling 1.8% in the second half of
    2011. Slovakia continued to see the impact of price cuts, with revenues
    down 5.0%.

Excluding the impact of the Orange Switzerland disposal, the mobile services
customer base in the Europe zone (20.583 million customers at 31 December
2012) rose 0.8% year on year, led by the 5.0% growth in contracts (+505,000
additional customers);

  *revenues in the Dominican Republic increased 3.1% on rapid growth of
    Internet browsing. Mobiles accounted for 3.214 million customers at 31
    December 2012, an increase of 3.5% year on year, reflecting the strong
    growth in contracts (+13.8%). 

fourth quarter 2012

Revenues fell 1.9% on a comparable basis to 2.090 billion euros. Excluding the
impact of regulatory measures
(-46 million euros), the increase was 4.2%, generated both by the Africa and
Middle East zone (+4.2%) and by Europe (+4.1%). In Africa and the Middle East,
growth was mainly from Côte d'Ivoire (+11.3%), Egypt (+2.6%), Guinea (+34.6%)
and Senegal (+3.0%). The growth in Europe reflected the turnaround in Belgium
(+8.6%) due to the high level of mobile handset sales (particularly the
iPhone5).

Restated EBITDA for the Rest of World segment was 2.800 billion euros in 2012,
a decrease limited to -0.6% on a comparable basis. Excluding the impact of
regulatory measures, it rose 1.0% on growth in the Africa and Middle East
zone, partially offset by the downturn in the Europe zone. The EBITDA margin
for the entire segment was 33.8% in 2012, with erosion limited to -0.7
percentage points through efforts to curtail the growth of commercial expenses
and other external purchases.

CAPEX in the Rest of World segment (1.308 billion euros in 2012) fell 4.1% on
a comparable basis following major investments made in 2011 for the LION2
(Indian Ocean) and ACE (Western Africa) underwater cables delivered in 2012.
Work to replace mobile networks was completed in Slovakia and Romania and
continues in Belgium, Egypt and Guinea. The initial investments in 4G mobile
networks led to the commercial launch of very high-speed mobile in Moldavia,
Romania and the Dominican Republic at the end of 2012.

Enterprise

In millions                       period ended 31 December
of euros
               2012          2011          2011         12/11         12/11
                        comparable     historical    comparable    historical
                              basis          basis         basis         basis
                                                                            
                                                                           
Revenue       7001         7196         7101        (2.7)%        (1.4)%
Adjusted      1177         1291         1283        (8.8)%        (8.3)%
EBITDA
Restated
EBITDA /       16.8%          17.9%          18.1%              
Revenues
CAPEX           352           362           343        (2.6)%          2.7%
CAPEX /         5.0%           5.0%           4.8%              
Revenues
Restated
EBITDA -        825           929           940       (11.2)%       (12.2)%
CAPEX

Revenues in the Enterprise segment (7.001 billion euros in 2012) fell 2.7% on
a comparable basis due to the downturn in legacy network products and
services, mainly in France. Internationally, revenues rose 1.9% year on year
(+3.1% excluding equipment sales).

Service operations (1.832 billion euros) rose 1.0% in relation to the previous
year. Excluding equipment sales^[19], the increase was 2.7% with the
development of services integration, the unified management of the customer
relationship and communication services, and collaborative work.

Growing networks (402 million euros) reported an increase of 6.9%, reflecting
the strong growth of Voice over IP (+11.8%) and satellite access (+7.8%).
Image services fell 2.7%, due to the repositioning of videoconferencing offers
in France, though they were on a positive trend internationally.

Mature networks (2.895 billion euros) rose 1.8%, led by the growth of IPVPN
(+3.9%), both internationally with the rise in connection speeds and in France
with the growth in the number of subscribers. Broadcasting reported a limited
decline of 1.9%: the impact of the complete shutdown of analogue television in
France at the end of 2011 was partially offset by the favourable impact of the
London Olympics in the third quarter of 2012. Traditional nomad solutions
(Business Everywhere) continued their downward trend due to the migration of
uses to other more recent mobility offers.

Legacy networks (1.872 billion euros) reported a decline of 13.4%, versus
-11.2% the previous year, due to traditional telephony services and legacy
data services, in particular the shutdown of the X25 network in 2012.

fourth quarter 2012

Revenues (1.786 billion euros) declined 2.7% on a comparable basis in relation
to the fourth quarter of 2011. The downward trend in legacy networks (-13.2%)
and the decline in nomad solutions were partially offset by the growth of
IPVPN (+5.4%), growing networks (+1.9%) and services (+0.8%).

Restated EBITDA for the Enterprise segment (1.177 billion euros in 2012)
decreased 8.8% on a comparable basis. The EBITDA margin was 16.8%, a decrease
of -1.1 percentage points compared with 2011. The downturn in revenues was
partially offset by lower service fees and inter-operator costs.

CAPEX was 352 million euros in 2012, a reduction of 2.6% on a comparable
basis, reflecting the adjustment of investments to changes in the business.

International Carriers and Shared Services

In millions                       period ended 31 December
of euros
               2012          2011          2011         12/11         12/11
                        comparable     historical    comparable    historical
                              basis          basis         basis         basis
                                                                            
                                                                           
Revenue       1623         1585         1610          2.4%          0.8%
Adjusted       (133)            (6)            39             -             -
EBITDA
Restated
EBITDA /      (8.2)%         (0.4)%           2.4%              
Revenues
CAPEX           415           358           367         15.5%         13.1%
CAPEX /        25.6%          22.6%          22.8%              
Revenues
Restated
EBITDA -       (547)          (365)          (328)         49.8%         67.0%
CAPEX

Revenues in the International Carriers and Shared Services segment were 1.623
billion euros in 2012, a 2.4% increase on a comparable basis linked to
International Carrier services (1.382 billion euros), which rose 3.8% versus
2011.

Restated EBITDA was negative at -133 million euros in 2012, in contrast to -6
million euros in 2011 on a comparable basis, reflecting a deterioration of
-126 million euros between the two years, principally due to the recognition
in 2012 of a 122 million-euro expense related to the European Commission
decision in December 2011 concerning the method of funding the retirement of
civil servants assigned to France Telecom S.A.

CAPEX was 415 million euros in 2012, a 15.5% increase on a comparable basis in
relation to the previous year, linked in particular to the development of
innovative service platforms such as Orange Money. Investments in underwater
cables decreased following the delivery of the major LION2 (Indian Ocean) and
ACE (Western Africa) cables.

schedule of upcoming events

  *24 April 2013: first quarter 2013 results

contacts

press: +33 1 44 44 93 93      financial communications: +33 1 44 44 04 32
                              (analysts and investors)
Béatrice Mandine
beatrice.mandine@orange.com   Patrice Lambert-de Diesbach
                              p.lambert@orange.com
Jean-Bernard Orsoni
jeanbernard.orsoni@orange.com Corentin Maigné
                              corentin.maigne@orange.com
Sébastien Audra
sebastien.audra@orange.com    Jérôme Blin
                              jerome.blin@orange.com
Tom Wright
tom.wright@orange.com         Constance Gest
                              constance.gest@orange.com
Olivier Emberger
olivier.emberger@orange.com   Didier Kohn
                              didier.kohn@orange.com
Mylène Blin
mylène.blin@orange.com        Florent Razafi
                              florent.razafi@orange.com

All press releases are available on the Group's websites:

           *www.orange.com 

           *www.orange.es

           *www.everythingeverywhere.com

           *www.tp-ir.pl

           *www.orange-business.com

disclaimer

This press release contains forward-looking statements about France
Telecom-Orange. Although we believe they are based on reasonable assumptions,
these forward-looking statements are subject to numerous risks and
uncertainties, including matters not yet known to us or not currently
considered material by us. There can be no guarantee 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, among others:
fluctuations in general economic activity levels as well as the level of
activity in each of the markets in which we operate; the effectiveness of our
strategy and the level of Group investment necessary to pursue this strategy
and to adapt out networks; our ability to face intense competition within our
sector and to adapt to the ongoing transformation of the telecommunications
industry, in particular in France with the arrival on the market of a fourth
mobile operator; fiscal and regulatory constraints, in particular in setting
wholesale rates; results of current litigation; risks and uncertainties
specifically related to international operations; risks related to the
impairment of assets; exchange rate fluctuations; and conditions for accessing
the capital markets (in particular risks related to liquidity and credit
ratings) and counterparty risks. More detailed information on the potential
risks that could affect our financial results can be found in the Registration
Document filed with the French Autorité des marchés financiers (AMF) on March
29, 2012 and in the annual report on Form 20-F filed with the U.S. Securities
and Exchange Commission on April 13, 2012. Except to the extent required by
law (in particular pursuant to sections 223-1 et seq. of the General
Regulations of the AMF) France Telecom-Orange does not undertake any
obligation to update forward-looking statements.

PR_Orange_FY2012_EN_200213

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