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The France Telecom/Orange group has released Q1 2013 results that are very close to consensus expectations. The group has maintained its 2013 guidance (including operating cash flow in excess of €7bn). While the battle for new subscribers on the domestic market continues to be hard fought, Spain is performing relatively well. Conversely, revenue in Poland and the rest of the world is less positive, and the Enterprises segment has also declined. The group’s proactive cost reduction policy has been good for margins.
The France Telecom-Orange group today released 2012 results that delivered no surprises and were in line with consensus expectations. The outlook for 2013 (including operating cash flow over €7bn) was reiterated. The group’s home market in France registered quite good numbers of new mobile subscribers whereas fixed-line broadband business was more modest. Spain and the Rest of the World fared quite well, but the UK and Poland were mixed. The dividend (€0.80 for 2012) will be maintained for 2013. Shares are undemandingly valued and offering a high yield.
France Télécom’s latest quarterly results, released last Thursday, were overall fairly decent at an operating level (good showing by mobile business in France and healthy momentum in the rest of the world). The punishment meted out to the shares by the market stems, in our view, from management’s poor communication skills during the conference call (dividend reduced more steeply than expected; prospect of improvement deferred to 2014). The shares remain undemandingly valued and the dividend yield attractive.
The half-year results were slightly ahead of consensus expectations. France Télécom’s results reassured investors, especially as regards its Mobile division in France (slowdown in loss of subscribers in Q2), Spain and the “Rest of the World” operating segment. In the French mobile market, roaming deals with Free Mobile generated revenues of around €120m according to estimates. One more plus point: lower than expected investments. The shares is still undervalued.
Following the publication of slightly better quarterly results than the (limited) consensus expectations, France Télécom’s figures were rather reassuring in the difficult French Mobile market environment (launch of Free Mobile). The group’s commercial response paid off while also benefiting from roaming agreements with the new arrival, which will generate more than €1 billion in the first three years. Another positive factor: the “Rest of the World” division (EM) has returned to growth.
Following 2011 results in line with expectations (contrast between great financial caution and rather more confidence on the operational side) and prudent 2012 forecasts, France Télécom (FT) is in a position to benefit from a recovery of its Ebitda in 2013. The group will continue the revalorisation of its asset portfolio (notably its participations abroad), while improving its charging strategy on its domestic market. Reminder: FT is the French operator which should be able to resist the arrival of Free Mobile (Iliad) most effectively. Despite the inevitable loss of subscribers, the impact of mobile in France is lower for FT than for its competitors and the roaming agreement signed with Iliad will bring in higher revenues. Finally, and despite investments in 4G (mobile) and fibre (terrestrial), FT should make the most of data traffic services which are bound to grow substantially in the next few years.
The group is preparing for a major change in the French telecommunications landscape with the arrival of a new competitor, Iliad (Free Mobile), on the mobile telephony market in 2012. However, visibility on the French domestic market re-mains better than that of other big European markets. Trading at a discount against its big European rivals, FT also offers an excellent dividend yield, on which it has given a commitment for 2011 and 2012.
France Telecom posted rather unsurprising Q3 results, except for the somewhat weak level of revenues on the French market, which was offset by margins and the operating cash flow. This should enable the group to exceed its EUR 9 billion operating cash flow objective in 2011. The guidance (unveiled on Investor Day last May) has been confirmed as have the 2011 and 2012 dividends, at EUR 1.40. The valuation and yield remain attractive. Positive risk/reward. PLUS code unchanged.
France Telecom’s H1 results came as no surprise: they are almost in line with consensus. Although sales and Ebitda reflect expectations, the Ebitda margin has been eroded slightly. On the other hand, the NP and organic cash flow in particular fall short of expectations because of non-recurring or non-operational items. The adjusted figures are in line with expectations. The new guidance (announced at Investor Day last May) has been confirmed. The valuation remains attractive. Positive risk/reward ratio. PLUS code unchanged.
In terms of valuation, FT has been unjustifiably marked down by 10% to 12% against the average for the sector in Europe for the past 2 years or so. Even if the group is having to prepare for the arrival of a new competitor (Free Mobile) on the mobile market in 2012, the visibility of the French domestic market is better than that of other major European markets. Last but not least, the dividend (NB: FT is committed until 2012) is another factor supporting the share price.
The 2010 (and Q4) results published by France Telecom brought no real surprises. Significant items in this announcement, which proved slightly better than the consensus on the top line, are the maintenance of the dividend scheduled for the next two years (2011 and 2012) at EUR1.40/share per year and the confirmation of organic CF of EUR 8 billion. The management, now stabilized, is also counting on a slight increase in earnings in 2011 (excluding the impact of regulatory provisions) and a slight worsening of the Ebitda margin. PLUS code maintained.
France Télécom benefits from a defensive business model, with much of its activity on its own domestic market. The operator has published reassuring half-yearly results and maintained prudent prospects for 2010, with organic CF targets of EUR 8 billion for 2010 and 2011 and a guaranteed dividend (EUR1.40) for the three years 2010-2012. In addition, the group is refocusing on its M&A Policy (participation in Meditel).
France Telecom’s H1 2010 results give investors a reassuring message. This publication, above consensus expectations, is noteworthy for the dividend policy announced for the next 3 years (2010 to 2012): guidance of EUR 1.40 per year (NB: equivalent to a current dividend yield of 9.3%!). In general, the recovery of organic growth has been confirmed, thanks to the resilience of the domestic market, improvement in Poland and in the business customer segment. The financial targets for 2010/2011 have been confirmed. PLUS code maintained.
Although the first quarter results of France Telecom have been affected by the new regulatory measures, they remain somewhat disappointing. While performance in the EM geographical zones was firm and improving in Spain and Poland, the main disappointment came from domestic activity and the corporate customers’ division. However, the new management remains reassuring and has confirmed its financial targets for 2010 with FCF of EUR 8 billion, excluding the acquisition of new frequencies. PLUS code confirmed.
France Télécom benefits from a defensive business model, with much of its activity on its domestic market. The operator recently published strong results for 2009 and maintained prudent prospects for 2010 with organic CF targets of EUR 8 billion for 2010 and 2011. Following a difficult period on the social front in
France, the new CEO, S. Richard, is taking matters in hand again.
Apart from exceptional items, the quality of France Telecom’s results for 2009 is good. The management’s message was reassuring with the emphasis on a clear strategy. FT is a well-oiled machine and has several advantages on the stock market: credible targets, real flexibility for a measured external growth policy and the potential held out by internal consolidation operations. Sentiment on this share is therefore improving. PLUS code maintained.
France Telecom has announced robust Q3 results; they were, however, adversely affected by new regulatory provisions (MTR) and by a macro-economic environment which remains under pressure. The fact that margins are holding up well and the confirmation of the Group’s organic CF target of EUR 8 billion for 2009 support the management’s forecasts for 2010 and 2011 (stable FCF). A provision of EUR 1 billion and some doubt over the trend of business in 2010 cooled market sentiment temporarily. PLUS code maintained.
France Telecom benefits from a defensive business model ideally suited to the uncertainty of the current market, which also complements our more offensive recommendations in the European Telecoms sector (Telefonica and Vodafone). FT recently confirmed its 2009 targets (organic FCF of EUR 8 bn, in particular). The group is maintaining FCF at the same level for fiscal years 2010 and 2011. Both valuation and dividend yield are attractive. PLUS rating unchanged.
France Telecom has published good results for the 1st half of 2009 (above expectations), despite the continuing heavy pressure on revenues. Margins have stood up well and the confirmation of the group’s organic CF target at EUR 8 billion for 2009 has increased visibility for the second half, despite the fact that the macroeconomic and regulatory environment will remain difficult. We believe that the share still has substantial potential to make further gains. PLUS code confirmed.
Results published by France Telecom for Q1 2009 were slightly below consensus, reflecting the fact that the economic downturn is now affecting the entire European telecom sector. Despite the further deterioration of the market environment which has proved worse than expected within the sector, the historic operator is still well equipped to steer its way out of this crisis without damage to its essential quality of cash flow generation (EUR8 billion in 2009e). We believe that the share still has strong upside potential. PLUS code confirmed.
France Telecom benefits from a defensive business model, making it an ideal complement to current market uncertainties and our other more aggressive recommendations in the European telecommunications sector (Telefonica and Vodafone). The main characteristics of this operator are its simple industrial profile, a lower operating risk than its competitors and a very small financial risk. We are introducing this recommendation with a PLUS code.
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