registration document France Telecom 2009 - Orange.com

9 ANALYSIS
analysis of the financial position and earnings
OF THE GROUP’S FINANCIAL POSITION AND EARNINGS
2009 vs. 2008
Between 2008 and 2009, the ratio of wages and employee
benefi t expenses to revenues increased by 1.9 points on both a
historical and a comparable basis to reach 19.0% of revenues
in 2009. Excluding the 569 million euro expense representing
a provision covering the implementation of the “Part-Time
Seniors” plan in France, the ratio of wages and employee
benefi t expenses to revenues reached 17.8% in 2009, an
increase of 0.7 points compared with 2008, on both a historical
and a comparable basis.
On a historical basis, wages and employee benefi t expenses
increased by 7.5% or 608 million euros to reach 8,744 million
euros in 2009, compared with 8,136 million euros in 2008. The
year-on-year increase takes into account factors that reduced
wages and employee benefi t expenses, namely the impact of
foreign exchange fl uctuations, which amounted to 128 million
euros.
On a comparable basis, wages and employee benefi t expenses
increased by 9.2% or 738 million euros between 2008 and 2009
to reach 8,744 million euros in 2009. The year-on-year increase
in wages and employee benefi t expenses resulted from:
■ the recognition in 2009 of a 569 million euro expense
representing a provision covering the implementation
of the “Part-Time Seniors” plan in France following the
signing in November 2009 of an agreement concerning the
employment of older personnel (see Section 9.1.1.4 Key
events in 2009 and Notes 5, 24 and 31 to the consolidated
fi nancial statements); and
■ i) a 4.7% increase attributable to the cost effect, relating mainly
to increases in wages and incentive payments, ii) partially
offset by a 2.6% fall attributable to a volume effect, stemming
from the reduction in the average number of employees (fulltime
equivalents, see the Financial glossary appendix), i.e.
4,465 fewer people, mainly in France and Poland.
2008 vs. 2007
Between 2007 and 2008, the ratio of wages and employee
benefi t expenses to revenues fell by 0.7 points on a historical
basis and by 0.8 points on a comparable basis to reach 17.1%
of revenues in 2008.
On a historical basis, wages and employee benefi t expenses
fell by 1.7% or 142 million euros between 2007 and 2008 to
8,136 million euros in 2008. This reduction takes into account
factors that increased wages and employee benefi t expenses,
including i) the impact of changes in the scope of consolidation
and other changes, which amounted to 39 million euros, and ii)
the impact of foreign exchange fl uctuations, for 8 million euros
year-on-year.
On a comparable basis, the reduction in wages and employee
benefi t expenses between 2007 and 2008 totaled 190 million
euros. This 2.3% reduction in wages and employee benefi t
expenses year-on-year resulted from i) a 4.0% reduction
attributable to a volume effect, stemming from the reduction
in the average number of employees (full-time equivalents), i.e.
7,132 fewer people, mainly in France and Poland, ii) partially
offset by a 1.7% increase attributable to the cost effect.
Z EMPLOYEE PROFIT-SHARING
In 2009, employee profi t-sharing totaled 300 million euros,
down 19 million euros on a historical basis (18 million euros on
a comparable basis) compared with 2008. The fall stemmed
mainly from a reduction in the employee profi t-sharing expense
for France Telecom S.A. employees year-on-year.
In 2008, employee profi t-sharing totaled 319 million euros, down
40 million euros compared with 2007, on both a historical and a
comparable basis. The fall stemmed mainly from a reduction in
the employee profi t-sharing expense relating to France Telecom
S.A. employees year-on-year.
Z SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION (2)
(in millions of euros)
2009
Financial years ended December 31
2008
2008
basis (1) basis
comparable historical
Chg. (%)
Chg. (%)
basis (1) basis
comparable historical
2007
historical
basis
Free share award plans (40) (59) (57) (32.2)% (29.8)% (149)
Stock option plans (10) (22) (24) (54.5)% (58.3)% (22)
Employee shareholding plan - - - - - (106)
GROUP TOTAL (50) (81) (81) (37.9)% (38.2)% (277)
(1) Unaudited data. See Section 9.1.5.1 Transition from data on a historical basis to data on a comparable basis.
(2) See Notes 5 and 27 to the consolidated fi nancial statements.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM