registration document France Telecom 2009 - Orange.com

analysis of the financial position and earnings
9
ANALYSIS OF THE GROUP’S FINANCIAL POSITION AND EARNINGS
International carriers revenues, which totaled 1,208 million
euros in 2009, were up compared with 2008. The increase
was driven by a 28% increase in the volume of transit traffi c to
international mobile destinations (or 26% in terms of value) and
by a 20% increase in submarine cable laying and maintenance
work. It was partially offset by a 16% reduction in incoming
roaming revenues attributable mainly to regulator-imposed price
cuts as of July 1, 2009 and, to a lesser extent, a 4% drop in
traffi c.
The decline in shared services revenues was linked to a fall in
Goa game business and the discontinuation of service platforms
in the Netherlands, partially offset by the new fi lm co-production
business of the Studio 37 subsidiary.
2008 vs. 2007
On a historical basis, the revenues of the International Carriers
& Shared Services operating segment increased by 8.8% to
1,349 million euros between 2007 and 2008 (1,171 million
euros for international carriers and 177 million euros for shared
services).
On a comparable basis, the revenues of the International
Carriers & Shared Services operating segment increased
by 8.2% or 102 million euros between 2007 and 2008. The
increase mainly refl ected the increase in international carrier
services, i.e. a 64 million euro increase, and, to a lesser extent,
an increase in the Group’s new channels of growth.
9.1.3.7.2 EBITDA - International Carriers
& Shared Services
2009 vs. 2008
On a historical basis, the EBITDA of the International Carriers
& Shared Services operating segment was a negative 1,399
million euros in 2009, compared with a negative 444 million
euros in 2008.
On a comparable basis, the EBITDA of the International
Carriers & Shared Services operating segment fell by 1,028
million euros between 2008 and 2009. The fall in EBITDA
stemmed mainly from i) a 964 million euro expense relative to
the ruling handed down by the European Court of First Instance
(ECFI) in respect of the dispute over the special business tax
(taxe professionnelle) regime in France prior to 2003 (see
Section 9.1.1.4 Key events in 2009), ii) a 80 million euro provision
covering 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),
and iii) the increase in content purchases linked to the launch
of the Orange sport and Orange cinéma séries TV channels in
August and November 2008 respectively. The deterioration was
partially offset by i) higher revenues, ii) the reversal of impairment
losses on Sonaecom shares for a total of 46 million euros, and
iii) savings derived from the cost-rationalization plan.
2008 vs. 2007
On a historical basis, the EBITDA of the International Carriers
& Shared Services operating segment went from a positive
744 million euros in 2007 to a negative 444 million euros in
2008, a fall of 1,188 million euros.
On a comparable basis, the EBITDA of the International Carriers
& Shared Services operating segment fell by 1,196 million euros
between 2007 and 2008. The decline was attributable mainly to:
■ a 749 million euros decline in gains (losses) on disposal
of assets, from a positive 756 million euros in 2007 to a
positive 7 million euros in 2008. In 2007, the gains (losses)
on disposal of assets of the International Carriers & Shared
Services operating segment mainly comprised the disposals
of Tower Participations (company owning TDF), Orange’s
mobile and Internet businesses in the Netherlands, and
Bluebirds Participations France (company owning Eutelsat
Communications). See Section 9.1.2.1.2 Operating
expenses ;
■ a 293 million euro increase in external purchases, linked
mainly to i) an increase in service fees and inter-operator
costs due to growth in international carrier services, and ii) an
increase in content purchases;
■ a 197 million euro decline in the share of profi ts (losses) of
associates, attributable to impairment losses on Sonaecom
shares in 2008 (see Section 9.1.2.1.2 Operating expenses ).
9.1.3.7.3 Operating income - International Carriers
& Shared Services
2009 vs. 2008
On a historical basis, the International Carriers & Shared
Services operating segment recorded negative operating
income of 2,068 million euros in 2009. This compared with
negative operating income of 1,007 million euros in 2008.
On a comparable basis, the operating income of the
International Carriers & Shared Services operating segment fell
by 1,134 million euros year-on-year in 2009. The deterioration
in operating income stemmed from the decline in EBITDA, for
a total of 1,026 million euros, and a 100 million euro increase
in depreciation and amortization linked to recent investments
in the fi eld of innovation (particularly with respect to customer
service platforms relative to recent “Voice over IP” technologies
and television) and in the content business, namely the Studio
37 subsidiary.
2008 vs. 2007
On a historical basis, the operating income of the International
Carriers & Shared Services operating segment fell by 1,181
million euros between 2007 and 2008 (or by 1,192 million euros
on a comparable basis). The decline was attributable mainly to
the fall in EBITDA.
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2009 REGISTRATION DOCUMENT / FRANCE TELECOM
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