Operating and financial results for the 1st half of 2015

Paris, Tuesday, July 28, 2015

Second quarter growth of revenues and EBITDA, excluding regulatory measures, led by very high-speed broadband.

• Commercial operations delivered a very satisfactory performance in the 1st half of 2015 across the Group, with the rapid growth of very high-speed fixed and mobile services in Europe and the sustained growth of mobile services in Africa and the Middle East. France had 240,000 net additions of mobile contracts (1 ) in the 1st half of 2015, while 4G had a total of 5.6 million customers at 30 June 2015 (+1.1 million in the 2nd quarter). Fixed broadband, with a market share of net additions estimated at 46% in the 2nd quarter, had 143,000 net additions in the 1st half, led by fibre, which had a total of 720,000 customers at 30 June 2015 (+157,000 in the first half). In Spain, 4G grew strongly with 3.5 million customers at 30 June 2015 (+582,000 in the 2nd quarter). At that date, there were 159,000 fibre customers, an increase of 47,000 customers in the 2nd quarter. The growth of 4G was also strong in the other European countries with 1.3 million customers in Poland, 700,000 in Belgium, 600,000 in Romania and 400,000 in Slovakia at 30 June 2015. In Africa and the Middle East, the mobile customer base continued to rise with 4.5 million net additions in the 1st half (on a comparable basis); Orange Money had 14.2 million customers at 30 June 2015 (+37% year on year).

• Revenues rose 0.4% in the 2nd quarter of 2015, excluding the impact of regulatory measures, after falling 0.3% in the 1st quarter. The improving trend continued, reflecting in the 2nd quarter the rebound of the Enterprise segment and the favourable development of mobile services, particularly in France and Spain, while Africa and the Middle East continued their steady growth. In the 1st half of 2015, revenues were 19.557 billion euros, a decrease of 0.6% on a comparable basis (stable excluding the impact of regulatory measures).

• Restated EBITDA rose 0.9% in the 2nd quarter, excluding the impact of regulatory measures, after declining 1.2% in the 1st quarter. Optimization of the cost structure continues with the ongoing reduction of indirect costs (156 million euros in the first half). Restated EBITDA was 5.807 billion euros in the 1st half of 2015, down 1.2% on a comparable basis (stable excluding the impact of regulatory measures). The ratio of restated EBITDA to revenues was 29.7%, a limited decrease of 0.2 percentage points in relation to the 1st half of 2014 on a comparable basis; it was stable excluding the impact of regulatory measures.

• CAPEX (2.672 billion euros in the 1st half) increased 6.5% on a comparable basis and represented 13.7% of revenues (+0.9 percentage points in relation to the 1st half of 2014). In line with the Essentials2020 strategic plan, investment in fibre rose sharply (+74% compared to the 1st half of 2014), mainly in Europe and particularly in France.

• Net income was 1.273 billion euros in the 1st half of 2015 , an increase of 545 million euros in relation to the 1st half of 2014. Net income Group share was 1.099 billion euros in the 1st half of 2015, compared to 581 million euros in the 1st half of 2014.

• Net debt was 26.384 billion euros at 30 June 2015 , nearly stable in relation to 31 December 2014. The restated ratio of net financial debt to EBITDA was 2.13x at 30 June 2015, versus 2.09x at 31 December 2014, in line with the objective of a ratio of around 2x in the medium term. [

Outlook for 2015

In view of the results for the 1st half of 2015, the Group fully confirms its objective to achieve between 11.9 billion and 12.1 billion euros in restated EBITDA for the full year of 2015. This target does not include the integration of Jazztel and Méditel, which will be consolidated in the Group accounts in the 2nd half of 2015. The Group also confirms its objective to achieve a restated net debt to EBITDA ratio of around 2x over the medium term to preserve Orange’s financial strength and investment capacity. Within this framework, the Group is pursuing a policy of selective acquisitions by concentrating on markets in which it is already present. The Group confirms the payment of a dividend of 0.60 euros per share for 2015 (2 ). An interim dividend for 2015 of 0.20 euros per share will be paid on 9 December 2015 (3 ). Commenting on the first-half 2015 results, Orange Group Chairman and CEO Stéphane Richard said: “ We are particularly pleased with these results which mark a return to revenue growth in the second quarter, excluding regulation, for the first time since 2011. We delivered a very good commercial performance especially in France, Belgium, Romania and throughout the Africa and Middle East region. This dynamic commercial activity is underpinned by significant investment in very high-speed fixed and mobile broadband and the Orange team’s daily commitment to our customers, both of which form part of our Essentials2020 strategic plan. Through these efforts, we now have more than 12 million 4G customers in Europe and have doubled our level of acquisition of fixed broadband customers in France thanks to fibre. Combined with the continued reduction of our cost structure, this performance has enabled us to stabilize our margin in the first half, excluding regulatory impacts, and even show slight growth in the second quarter. We therefore fully confirm all our financial objectives for 2015. At the same time, we continue to pursue our efforts to optimize our portfolio of operations. We have strengthened our presence in Europe with the acquisition of Jazztel in Spain and in Africa, we have recently announced a promising project to acquire operations in four new countries .”

• The entire press release is available on PDF file *

(1 ) Excluding machine-to-machine contracts. (2 ) Subject to the approval of the Annual General Meeting of shareholders. (3 ) The ex-dividend date is set at 7 December 2015 and the record date at 8 December 2015.