Telecomunicazioni
Orange : 2017 earnings
Paris, 21 February 2018
Orange's revenues and adjusted EBITDA grew for the second consecutive year in 2017, while Operating Cash Flow grew for the first time since 2009*.
This momentum was underpinned by an excellent operational performance in the fourth quarter.
2017 CAPEX of 7.2 billion euros supported our strategy of differentiation through investment in our network quality and customer experience. At December 31, 2017, 26.6 million homes were potentially connectable to high-speed broadband , and 4G was rolled out in three new countries, bringing the total to 21 countries.
With confidence in the momentum and financial strength across the Group, the Board of Directors confirms the payment of a 0.65 euro dividend for fiscal year 2017 and will propose at the 2019 Annual General Meeting of Shareholders a dividend payment of 0.70 euro per share for the 2018 fiscal year. The 5 euro cents increase in dividend will be reflected in the interim dividend (0.30euro per share), which is payable in December 2018.
Commenting on the 2017 earnings report, Stéphane Richard, Chairman and CEO of Orange Group, said:
2018 and mid-term outlook
Orange re-affirms the 2018 objectives announced at its Investor Day on December 7:
For 2019 and 2020, growth in adjusted EBITDA, decrease in CAPEX and growth in Operating Cash Flow.
Key figures
· Full year data
* EBITDA adjustments are described in appendix 6.
· Quarterly data
* EBITDA adjustments are described in appendix 6.
The Orange S.A. Board of Directors met on February 20, 2018 and examined the financial statements of the Group.
The Group's statutory auditors audited those financial statements, and the audit reports relative to their certification are in the process of being issued.
More detailed information is available on the Orange website:
www.orange.com
Revenues
Orange Group revenues were 41.096 billion euros in 2017, an increase of 1.2% (+503 million euros) on a comparable basis , twice that achieved in 2016 (+0.6%, or 249 million euros). In the fourth quarter of 2017, Group revenues were up 1.8% on a comparable basis, having risen 0.9% in the third quarter and 1.1% in the first half. Faster growth in the fourth quarter was primarily due to the inclusion of digital media apps in France from October 5, as well as the recovery in the Africa & Middle East segment.
The fourth quarter 2017 revenue trends by region were as follows (on a comparable basis):
In France, revenue increased to 1.7% in the fourth quarter, following growth of 0.2% in the third quarter and 0.5% in the second quarter. Fixed-line broadband and mobile services saw improved growth, thanks in part to the inclusion of digital media apps.
In the Europe segment, revenues rose 2.3% in the fourth quarter of 2017:
In the Africa & Middle East segment, revenues rebounded 5.7% in the fourth quarter of 2017, driven by accelerated growth in Morocco and Egypt, and with growth resuming in the Democratic Republic of Congo. Growth in 2017 was 3.0%, up from 2.6% in 2016;
In the Enterprise segment, the revenue trend has been gradually improving (-0.1% in the fourth quarter compared to -0.5% in the third quarter and -1.6% in the first half). Growth in Cyberdefence and the Cloud remained strong (+17% and +15% respectively).
Customer base growth
In France , fibre set a new annual record with 546,000 net sales in 2017 (including 164,000 in the fourth quarter) and reaching 2.0 million customers at December 31, 2017. The momentum in mobile contract sales was also very strong with 826,000 net sales in 2017 (including 236,000 in the fourth quarter), driven by Open offers and Sosh.
In Spain, the sales trend remained strong in the fourth quarter, both in fibre with 175,000 net sales, and in mobile contracts with 61,000 net sales in a highly competitive environment.
In Poland, fixed-line broadband had 61,000 net sales in the fourth quarter (driven by fixed 4G and fibre) and convergent offers represented 50% of the consumer customer base at the close of 2017. There were 64,000 mobile contracts net sales in the fourth quarter.
In Belgium, mobile contracts saw record net sales in the fourth quarter (28,000 net sales), the highest level since the fourth quarter of 2011. The contract customer base of the Belgium & Luxembourg segment (2.4 million customers at the end of 2017) rose 3.3% year on year.
In the Africa & Middle East segment, the mobile customer base reached 130.5 million at December 31, 2017, an increase of 8.2% (up 9.9 million customers) year on year. Orange Money had 36.9 million customers and an active customer base of 12.1 million at December 31, 2017.
Group-wide, the number of mobile customers was 211.4 million at December 31, 2017, up 5.0% year on year (+10.1 million net sales) on a comparable basis. Customer contracts (74.6 million) grew 7.2% year on year, while 4G reached 46.2 million customers.
Fixed-line broadband customers (19.5 million at December 31, 2017) grew 4.7% year on year; fibre, with 4.7 million customers, grew 43%.
Consumer convergent offers had 10.3 million customers (up 11.1%), of which 6.0 million were in France, 3.1 million in Spain and 1.0 million in Poland.
TV services increased 6.9% year on year to 9.1 million customers as of December 31, 2017.
Orange Bank had 55,000 accounts open at December 31, 2017, which is ahead of the Group's initial forecasts.
Adjusted EBITDA
The adjusted EBITDA of the Group was 12.819 billion euros in 2017, an increase of 2.2% on a comparable basis. Adjusted EBITDA from telecom activities was 12.880 billion euros, an increase of 2.4% on a comparable basis (+306 million euros), despite the impact of the new roaming regulation in Europe. This increase is primarily due to a good performance in Spain, France and the Africa & Middle East segment.
Improvements to the cost structure provided the necessary flexibility to expand content offers and maintain commercial focus, particularly in the area of mobile equipment sales. At the same time, labour costs in the telecom activities declined 1.9% in 2017, reflecting the decrease in the average number of full-time equivalent employees during the year (-2.8%). Service fees and inter-operator costs as well as advertising and promotion costs were also down for the year.
In the fourth quarter of 2017, the adjusted EBITDA from telecom activities was 3.237 billion euros, an increase of 2.7% (+84 million euros) on a comparable basis. That increase was primarily due to revenue growth (+185 million euros), partially offset by an increase in operating costs (-102 million euros) related mainly to content costs and commercial expenses (purchases of equipment intended for customers). Labour costs increased 1.2% in the fourth quarter, related to an adjustment of the variable portion of compensation and profit-sharing, and to the share award plan for employees apportioned to 2017 (Orange Vision 2020).
Operating income
Orange Group operating income stood at 4.917 billion euros in 2017, an increase of 840 million euros on a historical basis compared with 2016, due to:
These positive items were partially offset by:
Net income
Net income from continuing operations (2.114 billion in 2017) showed an increase of 1.104 billion euros over 2016 due to:
Net income from discontinued operations fell 2.224 billion euros due to the disposal of EE in 2016 , which resulted in a positive income impact of 2.253 billion euros.
In total, Orange Group's consolidated net income was 2.143 billion euros in 2017, down 1.120 billion euros from 2016.
CAPEX
CAPEX for the Group was 7.209 billion euros in 2017, an increase of 3.4% compared to the previous year.
Growth in investment in very high speed broadband continued to increase, with a third of investment growth attributable to fibre mainly in France, Spain and Poland. In France, the growth in fibre investment remained strong and benefits in part from greater co-financing from other operators. At December 31, 2017, 26.6 million households had connectivity to very high-speed broadband (an increase of 6.3 million or 31% year on year), including 12.0 million in Spain, 9.1 million in France, 2.5 million in Poland and 2.3 million in Romania (following the mutual network sharing agreement with Telekom Romania).
The increase in capital spending on 4G and 4G+ mobile services represented around two thirds of investment growth in very high-speed broadband. This was largely due to accelerated rollouts in Africa & the Middle East, France and Spain. At December 31, 2017, 4G coverage as a percentage of the population was 95.9% in France, 95.7% in Spain, 99.8% in Poland, 99.7% in Belgium, 93.2% in Romania, 90% in Slovakia and 98% in Moldova. In France and Spain, investments focused on improving service quality in public spaces and on public transport.
The increased investment in information systems and services platforms is attributable to the launch of Orange Bank services.
Investments in customer equipment increased slightly: the expansion of convergent offers in Belgium and Spain was offset by optimising box costs in France.
The store modernisation program continues: at the end of 2017, the Group had 327 stores based on the new Smart Store concept, including 123 in France, 170 in the other European countries and 34 in Africa & the Middle East.
Changes in asset portfolio
At December 31, 2016, Orange had a 4% stake in the BT Group, following the sale of its investment in EE in January 2016. As part of the sale agreement, Orange agreed to hold onto its shares for a one year period. In June 2017, Orange chose to further reduce its exposure to BT by selling 133 million BT shares (or 1.33% of BT equity, for 433 million euros net of fees at June 22, 2017), and by issuing bonds exchangeable into BT stock to the amount of 517 million pounds sterling (585 million euros). At December 31, 2017, Orange retained a 2.67% equity interest in BT Group.
In October 2017, Orange signed an agreement to purchase a majority share in Business & Decision, a data and digital specialist in the Business Intelligence and Customer Relationship Management space. This transaction, due to be completed in the first half of 2018, is subject to the regulatory approval. If the transaction is approved, Orange will issue a simplified tender offer to acquire all the capital stock of Business & Decision. The acquisition of 100% of the equity is valued at approximately 63 million euros.
Net financial debt
Orange Group's net financial debt was 23.843 billion euros at December 31, 2017, representing a reduction of 601 million euros compared to December 31, 2016. The strict discipline observed in allocating resources made it possible both to support a proactive investment strategy and to maintain the Board's commitment to increase the dividend for 2017 by 5 euro cents .
The ratio of "net financial debt to adjusted EBITDA from telecom activities" was 1.85x at December 31, 2017, compared to 1.93x at December 31, 2016, due primarily to growth in adjusted EBITDA from telecom activities. This is in line with the Group's medium-term objective of a net debt to adjusted EBITDA ratio for telecom activities of around 2x.
Items related to the change in net financial debt and to the ratio of net debt to adjusted EBITDA for telecom activities are presented in appendix 4.
Dividend 2017
The Group confirms payment of a 0.65 euro per share dividend for 2017 . An interim dividend of 0.25 euros per share was paid on December 7, 2017 and the remainder of 0.40 euros per share will be paid on June 7. The ex-dividend date will be June 5, 2018 and the record date will be June 6, 2018.
France
In France, grew for the third consecutive quarter: +1.7% in the fourth quarter of 2017 after rising 0.2% in the third quarter and 0.5% in the second quarter. The fourth quarter of 2017 benefitted from the impact of digital media apps, available since October 5, and the recovery in mobile equipment sales (+10.0% after -0.8% in the third quarter).
Mobile services rose 2.5% in the fourth quarter of 2017 for the first time since 2011. Excluding the impact of the digital media apps, mobile services still recorded growth. The increase was driven by the excellent sales performance throughout the year. The increase in the contract customer base strengthened in the second half of the year, at +4.0% at the end of 2017. With 717,000 net contract sales , 2017 had the highest net sales since 2008; 70% of net customer sales were made in the high end of the market. The number of customer convergent SIM card offers was 9.2 million at December 31, 2017 (+11.7% year on year). At that date, 73% of customer contracts included 4G (+11 percentage points year on year) and SIM-only offers represented 73% of the customer contracts (+8 percentage points year on year).
Fixed broadband services grew by 7.5% in the fourth quarter after rising 4.8% in the third quarter. Excluding the impact of the inclusion of digital media apps, growth is comparable to previous quarters and was driven by the commercial success of FTTH (fibre to the home) offers, which continue to penetrate the market at a steady pace. The fixed broadband customer base (11.2 million at the end of 2017) is up 3.1% year on year and includes 2.0 million FTTH customers (+37.6% year on year). Fixed broadband ARPU was up 4.2% in the fourth quarter. Excluding the impact of the inclusion of digital media apps, ARPU growth is comparable to previous quarters. Consumer convergent offers (6.0 million customers at December 31, 2017, a year on year increase of 8.5%) represented 59.3% of the fixed broadband customer base (+2.7 percentage points in one year). The continued decline of traditional telephony reached -10.9% in the fourth quarter. Wholesale and other fixed services were down 0.7% in the fourth quarter compared to a strong fourth quarter in 2016. Throughout 2017, they grew 2.9%, driven by unbundling and fibre.
In France, rose 1.4% in 2017, and the adjusted EBITDA margin (38.2%) improved 0.3 percentage points compared to 2016. The increase in revenues, the decrease in labour expenses and the savings achieved under the Explore2020 operational efficiency plan were partially offset by the increase in content costs and other operating expenses related to business development.
In France, was up 0.6% on a comparable basis. The growth of investments in very high-speed broadband (FTTH and 4G) remained strong, offset by the decrease in other investments. At December 31, 2017, 9.1 million households in France had access to Orange's fibre network (+2.2 million households year on year). At that date, 4G coverage reached 95.9% of the population (+8.3 percentage points year on year) and 49% of the 4G sites were equipped with 4G+.
Europe
in the Europe segment grew 2.3% in the fourth quarter of 2017 after rising 3.9% in the third quarter on a comparable basis.
Mobile services rose 1.1% in the fourth quarter of 2017 after increasing 2.3% in the third quarter, on a comparable basis. The slowdown in growth is linked to services provided to other operators, including the decline of MVNOs in Belgium. Commercial momentum continued to be high, with 346,000 net contract sales in the fourth quarter. The contract customer base was 34.6 million at December 31, 2017, an increase of 4.1% year on year, representing 70.4% of the total mobile customer base at that date (+4.8 percentage points year on year).
Fixed services rose 2.6% in the fourth quarter after increasing 3.5% in the third quarter on a comparable basis. Broadband growth remains strong (+7.8% in the fourth quarter following 10.0% growth in the third quarter) and was driven by a customer base increase of 7.5% year on year to 7.1 million at December 31, 2017, including 2.6 million fibre customers (+46.2% year on year).
Customer convergent offers in the Europe segment reached 4.3 million customers at December 31, 2017 (+15.0% year on year) and 142,000 net sales in the fourth quarter of 2017, driven by Poland, Romania and Belgium.
for the Europe segment increased 5.8% in 2017 on a comparable basis. The increase in revenues was partially offset by higher content costs, interconnection costs and, to a lesser extent, increased labour expenses.
in the Europe segment rose 2.1% on a comparable basis. The significant increase in fibre and mobile services (4G and 4G+) investments was largely offset by a decrease in other investments.
Spain
In Spain, grew a record 7.1% in 2017 after a 6.0% rise in 2016 on a comparable basis, driven by convergence and rapid development of fibre.
In the fourth quarter, revenues were up 5.0% after a 6.4% rise in the third quarter. Revenues from consumer convergence rose 9.2% (after an 11.8% increase in the third quarter of 2017), driven by 1.9% growth in the customer base year on year (3.1 million customers at December 31, 2017) and a 6.7% rise in revenues per unit (ARPCO ) in the fourth quarter. The consumer convergence base represented 83.1% of consumer fixed broadband customers at December 31, 2017 (+1.7 percentage points year on year).
Mobile services rose 6.1% in the fourth quarter of 2017 after a 7.5% rise in the third quarter, driven by the enrichment of offers and the deployment of 4G (to 9.3 million customers at December 31, 2017, +18% year on year), which is reflected by the 5.7% rise of mobile ARPU in the fourth quarter. Contract customer base increased 1.8% year on year (11.446 million customers at the end of 2017), with 61,000 net sales in the fourth quarter. At the same time, the growth of mobile services provided to other operators remained strong (national roaming, network sharing and visitor roaming).
Fixed services rose 3.1% in the fourth quarter of 2017 after a 4.8% rise in the third quarter, driven by fixed broadband (+5.4% in the fourth quarter and +8.3% in the third quarter). Fixed broadband had 4.2 million customers as of December 31, 2017 (+0.5% year on year), and saw ARPU increase 4.2% in the fourth quarter. Fibre net sales were 175,000 in the fourth quarter. With 2.3 million customers at the end of 2017 (+40.4% year on year), this represents 54.4% of the fixed broadband customer base (+15.5 percentage points year on year). TV services also grew rapidly, with 626,000 customers at the end of 2017 (+23.4% year on year).
In Spain, increased sharply in 2017 (+17.0% on a comparable basis) and the adjusted EBITDA margin (29.4%) improved by 2.5 percentage points compared to 2016. Sustained revenue growth (partially offset by increased content costs and commercial expenses) was complemented by favourable developments in network costs related to the migration of ADSL customers to the Orange Spain fibre network.
in Spain rose 2.7% in 2017, driven by very high-speed broadband. 4G coverage reached 95.7% of the population as of December 31, 2017 (+5.4 percentage points year on year) and a total of 12.0 million homes had access to fibre connectivity at that date (+2.4 million in one year).
Poland
for Poland fell 2.4% in the fourth quarter of 2017 after a 1.3% drop in the third quarter of 2017 on a comparable basis. The slowdown in the fourth quarter is attributable to mobile equipment sales, which fell 12.8% (after a 13.3% rise in the third quarter) following a sales strategy changes to focus on value rather than volumes (reduction of subsidies).
Consumer convergent offers continued to grow steadily, with 90,000 net additions in the fourth quarter of 2017, driven by the success of the Orange Love offers. By the end of 2017, consumer convergent offers reached 1.035 million customers (+55% year on year), and represented 50% of the consumer fixed broadband customer base (+15 percentage points year on year).
Mobile services, which were down 5.9% in the fourth quarter of 2017 on a comparable basis (after a 7.1% drop in the third quarter), continued to be impacted by the development of instalment payments and SIM-only offers.
Sales momentum remained solid in the fourth quarter with contract net sales of 64,000, following a rationalisation of offers last September. As of December 31, 2017, the contract customer base was 9.7 million, up 5.0% year on year, while 4G had 5.7 million users (+34% year on year).
Fixed services fell 1.2% on a comparable basis in the fourth quarter of 2017, (after a 1.7% drop in the third quarter). Fixed broadband growth accelerated, with revenues up 7.8% in the fourth quarter (following a 6.6% rise in the third quarter) driven by convergent offers, fibre and fixed 4G. The fixed broadband customer base stood at 2.4 million at the end of 2017 (+10.5% year on year), of which 214,000 were fibre customers (+143% year on year). At the same time, traditional telephony revenues declined 13.5% in the fourth quarter.
Growth in other revenues remained strong, driven by fixed equipment sales (ICT and fixed 4G) and the development of energy distribution offers.
for Poland was down 4.8% in 2017 on a comparable basis, an improvement of 5.4 percentage points from 2016 (-10.2%). Lower revenues and higher interconnection costs (notably roaming) were partially offset by lower commercial costs.
The improvement was particularly significant in the second half of the year, with a limited decrease of 1.8% after a 7.4% drop in the first half of the year. This was mostly due to the greater decrease in commercial costs (reduction of mobile handset subsidies and distribution channel optimisation).
The lower in Poland in 2017 (-4.9%) on a comparable basis is related to mobile 4G, which had a coverage rate of 99.8% of the population at the end of 2017. At the same time, investments in fibre increased significantly. As of December 31, 2017, there were 2.5 million connectable households to fibre (+1 million year on year).
Belgium & Luxembourg
from Belgium & Luxembourg fell 1.3% in the fourth quarter of 2017, compared with a 1.7% rise in the third quarter. The fourth quarter was marked by the sharp decline of MVNOs, in connection with the migration of Telenet customers to the BASE network and the end of the Lycamobile contract last July. In addition, there was a 7.3% decline in mobile equipment sales (after a 4.4% rise in the third quarter).
Excluding MVNO, mobile services grew 2.9% in the fourth quarter. In Belgium, there were 28,000 net additions to contracts in the fourth quarter, the highest level since the fourth quarter of 2011, and quarterly ARPU rose 3.2%. The contract customer base in Belgium & Luxembourg rose to 2.423 million customers at December 31, 2017 (+3.3% year on year).
Fixed services were up 29.2% in the fourth quarter (after a 27.7% rise in the third quarter), driven by the success of consumer convergent offers with 97,000 customers as of December 31, 2017, compared to 31,000 a year earlier.
for Belgium and Luxembourg was down 4.3% in 2017. Excluding the impact on 2016 results of the agreement with the Walloon Region regarding pylon tax (16 million euros), adjusted EBITDA rose by 0.7%. Revenue growth and lower commercial costs were partly offset by higher interconnection costs (roaming) and connectivity costs (cable network access).
for Belgium & Luxembourg increased 12.4% in 2017, and was attributable to the development of convergent cable offers (IT and customer equipment). This was partially offset by the decrease in 4G mobile investments, from which coverage reached 99.7% in Belgium at the end of 2017 (62.9% for 4G+).
Central European countries
from Central European countries rose 5.6% in the fourth quarter of 2017, compared with 6.9% in the third quarter on a comparable basis. The mobile contract customer base grew 2.3% year on year on a comparable basis, to 7.9 million at the end of 2017, and the 4G mobile base (4.6 million customers) experienced very strong growth (+44% year on year). Fixed broadband had 394,000 customers at 31 December 2017 and consumer convergent offers (sold in all three countries) had 127,000 customers at that date.
In Romania, revenues rose 7.7% in the fourth quarter after a 10.4% rise in the third quarter, driven by mobile services and mobile equipment sales. Fixed broadband growth was boosted by the success of convergent offers (+33,000 net sales in the fourth quarter).
In Slovakia, revenues were up 2.5% in the fourth quarter after a 0.4% rise in the third quarter. In addition to a recovery in mobile equipment sales, mobile services trends and fixed broadband services also improved in the fourth quarter. .
In Moldova, revenues fell 0.4% in the fourth quarter. Mobile services continued to be affected by the decline in international traffic, while steady growth in mobile equipment and fixed broadband sales (driven by convergent offers) continued.
for Central European countries fell 1.7% in 2017 on a comparable basis. The increase in interconnection costs and commercial expenses (purchases of mobile handsets) was largely offset by growth in revenues.
in the Central European countries rose 5.6% in 2017 on a comparable basis, with the acceleration of fibre roll-out in Slovakia and 4G in Romania. As of December 31, 2017, 4G covered 93.2% of the population in Romania, 90% in Slovakia and 98% in Moldova, and the number of households connected to very high-speed broadband reached 2.3 million in Romania, 0.4 million in Slovakia and 0.2 million in Moldova.
Africa & Middle East
in the Africa & Middle East segment continued to increase, up 5.7% in the fourth quarter after 3.1% growth in the third quarter, on a comparable basis. Alongside faster growth in Morocco and Egypt, the Democratic Republic of Congo returned to growth. The Sonatel Group (mainly Mali and Guinea) and the Côte d'Ivoire Group (particularly Burkina Faso) also contributed to the quarterly growth of the segment.
The growth of mobile data services remained very strong (+36% in the fourth quarter) and driven by 4G, which is now available in 11 countries (with 11.1 million customers as of December 31, 2017, +16% in three months). Likewise, Orange Money revenues rose 58% in the fourth quarter, with 36.9 million customers at December 31, 2017 (including 12.1 million active customers). The enterprise market accounted for a third of the segment's growth in 2017.
In the Africa & Middle East segment, the mobile customer base was 130.5 million at December 31, 2017, a year-on-year increase of 8.2% (+9.9 million customers). In particular, contract offers (11.2 million as of December 31, 2017) grew 13.5% (+1.3 million) year on year, mainly in Egypt and Morocco.
for the Africa & Middle East segment rose 7.0% in 2017 on a comparable basis, and the adjusted EBITDA margin (32.1%) improved 1.2 percentage points compared to 2016. The growth in revenues and the decrease in interconnection costs offset the increase in technical maintenance costs (in line with network expansion) and the increase in operational taxes.
for the Africa & Middle East segment rose 7.0% in 2017 on a comparable basis. The increase in investments related to the deployment of 4G networks in the 11 countries covered and, to a lesser extent, the deployment of fibre.
Enterprise
from the Enterprise segment was relatively stable in the fourth quarter of 2017, -0.1% after a 0.5% drop in the third quarter on a comparable basis. The improved trends, notably IT and integration services, which grew 3.6% in the fourth quarter after a 0.8% rise in the third quarter. Cyberdefence grew 17% in the fourth quarter, the Cloud +15%, and Applications +8%.
Mobile was up 3.0% in the fourth quarter, driven by equipment sales, while services remained impacted by the end of roaming charges in Europe last July. The number of contract customers was 2.767 million at December 31, 2017 (+4.1% year over year) and the number of machine-to-machine SIM cards grew sharply (26.5% over one year).
Data services fell slightly (-2.3%) in the fourth quarter after a 3.8% drop in the third quarter. Improvements mainly affected IP-VPN services, which had 352,000 subscribers as of December 31, 2017 (+0.3% year on year).
Voice services fell 3.6% in the fourth quarter. The downward trend in traditional fixed telephony was partially offset by the rise in voice over IP and customer relationship services (contact number services).
for the Enterprise segment fell 2.3% in 2017 on a comparable basis. The decrease in revenues (-1.0%) and the increase in commercial expenses (cost of equipment sold) were partially offset by lower network costs and reduction in other operational charges.
for the Enterprise segment increased 13.9% in 2017 on a comparable basis, due to the accelerated transformation of the segment's IT system and the development of network virtualisation.
International Carriers & Shared Services
from the International Carriers and Shared Services segment recorded an 8.6% decline on a comparable basis in 2017, which was linked to the decline in voice services to international operators, particularly for African destinations and Maghreb.
in 2017 was down 33 million euros compared to 2016, on a comparable basis. The decrease in revenues and the decrease in income from the sale of fixed assets were partly offset by the decrease in interconnection costs and lower expenses related to brand development.
reached 282 million euros in 2017, an increase of 15 million euros on a comparable basis, relating to investments in submarine cables (including the Kanawa submarine cable between French Guyana, Martinique and Guadeloupe) and in content (Orange Studio).
Orange Bank
Launched on November 2, 2017 in metropolitan France, Orange Bank's new banking and digital offer already had 55,000 customers as of December 31, 2017.
Orange Bank's in 2017 was a loss of 93 million euros, compared to an operating profit of 85 million euros in 2016 (historical basis), mainly due to:
rose 46 million euros, mainly due to IT investments, in preparation for the commercial launch of the Orange Bank offer in November 2017.
Schedule of upcoming events
26 April 2018: 1 quarter 2018 results
Contacts
Disclaimer
This press release contains forward-looking statements about Orange. Although we believe these statements are based on reasonable assumptions, they are subject to numerous risks and uncertainties, including matters not yet known to us or not currently considered material by us, 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 from the results anticipated in the forward-looking statements include, among others: the success of Orange's strategy, particularly its ability to maintain control over customer relations when facing competition with OTT players, risks related to banking activities, loss or disclosure to third parties of customers' data, Orange's ability to withstand intense competition in mature markets, networks or software failures due to cyberattacks, damage to networks caused by natural disasters, terrorist acts or other reasons, various frauds affecting Orange or its customers, Orange's ability to retain the necessary skills given the high level of employee retirements and the development of new needs, difficulties in integrating newly acquired businesses as part of the telecommunication sector's consolidation in Europe, its ability to capture growth opportunities in emerging markets and the risks specific to those markets, possible adverse health effects associated with the use of telecommunications equipment, risks related to the single brand strategy, the eruption of a global financial or economic crisis, fiscal and regulatory constraints and changes, the results of litigation regarding regulations, competition and other matters, disagreements with its co-shareholders in companies that Orange does not control, the terms of access to capital markets, interest rate or exchange rate fluctuations, Orange's credit ratings, changes in assumptions underlying the accounting value of certain assets resulting in their impairment, and credit risks or counterparty risks on financial transactions. More detailed information on the potential risks that could affect our financial results is included in the Registration Document filed on 6 April 2017 with the French (AMF) and in the annual report on Form 20-F filed on 7 April 2017 with the U.S. Securities and Exchange Commission. 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.
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