registration document France Telecom 2009 - Orange.com

9 ANALYSIS
analysis of the financial position and earnings
OF THE GROUP’S FINANCIAL POSITION AND EARNINGS
■ partially undermined by a 3.6% fall in Other Carrier services
revenues, stemming from the reduction in revenues of
services supplied to other France Telecom Group operating
segments.
Other home communication services
On a comparable basis, other home communication services
revenues in France fell by 12.2% to 895 million euros between
2007 and 2008. The fall resulted mainly from the decline in
mature businesses (public phone traffi c, phone terminal leasing
business excluding ADSL) and the implementation in France in
July 2008 of a new law aimed at fostering competition to the
benefi t of consumers (known as the “Chatel Law”).
9.1.3.1.2 EBITDA - France
2009 vs. 2008
On a historical basis, the EBITDA of the France operating
segment fell by 6.1% between 2008 and 2009.
On a comparable basis, the EBITDA of the France operating
segment fell by 5.4% or 529 million euros between 2008
and 2009. In 2009, the EBITDA of the France operating
segment included a 461 million euro provision covering the
implementation of the “Part-Time Seniors” plan, 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). Excluding this provision, EBITDA would have totaled
9,713 million euros in 2009, down 0.7% (68 million euros)
compared with 2008, with the ratio of EBITDA to revenues
reaching 41.1%.
This decline was attributable mainly to:
■ a 151 million euro increase in content purchases, particularly
for Orange sport and Orange cinéma séries over the full year,
as opposed to half a year in 2008;
■ a 86 million euro increase in taxes and other operating taxes,
resulting mainly from the introduction of a new audiovisual
tax; and
■ a fi ne imposed by the competition authority on Orange
Caraïbe, with an impact of 35 million euros on the EBITDA of
the France operating segment.
These increased expenses were partially offset by:
■ a 75 million euro reduction in commercial expenses, largely
attributable to lower advertising, promotional, sponsoring and
rebranding costs due to the non-renewal in 2009 of one-time
marketing operations organized in 2008;
■ a 63 million reduction in labour expenses, excluding the
provision covering the “Part-Time Seniors” plan; and
■ a 49 million euro saving on service fees and inter-operator
costs stemming from the positive impact of the cuts to fi xed
and mobile call termination prices, covering the impact of
increased traffi c, particularly text messaging (SMS).
2008 vs. 2007
On a historical basis, the EBITDA of the France operating
segment increased by 2% or 195 million euros between 2007
and 2008.
On a comparable basis, the EBITDA of the France operating
segment increased by 2% or 191 million euros between
2007 and 2008. The increase was attributable mainly to i) a
431 million increase in revenues, ii) a 227 million reduction in
labour expenses, partially offset by iii) an increase in commercial
expenses and content purchases, for a total of 488 million
euros. The increase in commercial expenses between 2007 and
2008 refl ected i) efforts made to promote and develop mobile
broadband handsets in a fi ercely competitive environment,
translating into an increase in the number of mobile broadband
services customers to more than 11 million as of December
31, 2008 (an increase of 49% compared with December 31,
2007), and ii) the continued development of PCM (Programme
Changer de Mobile) offers, which have helped cut the churn
rate among customers on contract.
9.1.3.1.3 Operating income - France
2009 vs. 2008
On a historical basis, the operating income of the France
operating segment fell by 5% to 7,060 million euros between
2008 and 2009.
On a comparable basis, the operating income of the France
operating segment fell by 4.1% year-on-year. The fall in EBITDA
between 2008 and 2009 was not completely offset by the
reduction in depreciation and amortization.
2008 vs. 2007
On a historical basis, the operating income of the France
operating segment increased by 6.1% or 430 million euros
between 2007 and 2008.
On a comparable basis, the operating income of the France
operating segment increased by 6.2% between 2007 and 2008.
The improvement in operating income was attributable mainly
to the increase in EBITDA and the 280 million euro reduction
in depreciation and amortization, relating mainly to the mobile
businesses.
9.1.3.1.4 Capital expenditures on tangible and
intangible assets excluding licenses -
France
2009 vs. 2008
On a historical basis, the capital expenditures on tangible and
intangible assets excluding licenses of the France operating
segment fell by 6.2% year-on-year to 2,160 million euros in
2009.
On a comparable basis, the capital expenditures on tangible
and intangible assets excluding licenses of the France operating
segment fell by 6.3% or 146 million euros year-on-year. The
decline was attributable mainly to i) a reduction in investments to
extend fi ber optic networks, and ii) a reduction in ADSL capacity
investments due to slower growth in the fi xed broadband user
base (mature market).
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM