Orange reported a flat Q4 2015 but sought to inject some enthusiasm into its 2016 outlook with talk of cost reduction and M&A.
Revenue in the fourth quarter was €10.4 billion, virtually the same as the year ago period. While France held stable and the rest of Europe dropped by one per cent, Africa & Middle East provided some of its customary optimism with a three per cent rise.
In addition to providing its revenue on a comparable basis, the company also provided the figure on a historical basis, including acquisitions and disposals, as well as forex exchange fluctuations.
In Q4, the company reported restated EBITDA of €3.1 billion, up slightly from €3.0 billion a year earlier. The restatements relate to labour expenses, disputes, restructuring and net proceeds from the review of its asset portfolio in 2014 and 2015.
In 2016, Orange aims for a restated EBITDA higher than in 2015 on a comparable basis. “This objective will be supported by continued efforts to reduce the cost structure,” it added.
In addition, the company maintained its objective of a ratio of net debt to EBITDA of around 2x in the medium term, in a bid to protect its “financial strength and investment capacity”.
“Within this framework, the group is pursuing a policy of selective acquisitions by concentrating on markets in which it is already present.” Consolidation offers the opportunity to improve both revenue and profitability within a market.
Last year the company acquired Spanish fixed operator Jazztel and upped its stake in Moroccan operator Meditel. It is in the process of acquiring two Bharti-owned operations in Burkina Faso and Sierra Leone, as well as Millicom’s operations in the Democratic Republic of Congo (DRC).
In the full year, revenue was €40.2 billion, stable after falling by 2.5 per cent in the preceding year. Consolidated net income in 2015 was €3.0 billion compared to €1.2 billion in 2014 (on an historical basis).
The increase of €1.73 billion between the two periods was generated by a tax expense reduction (€924 million) principally related to Spain and to the impact of the Orange Dominicana disposal in 2014; increased net income from operations discontinued or being sold (€583 million), meaning EE in the UK; a growth of €171 million in operating income; and, to a lesser extent, improved net financial income (€55 million).