Orange's Second-Quarter Results in Line With Expectations

There were no surprises in Orange’s second-quarter results. Sales declined by 0.4% year over year while EBITDAaL grew by 0.5% thanks to strong performance in Africa and the Middle East, which continues to grow at double-digit rates. In France, the retail market remained stable with a 1.7% growth, but overall sales declined by 0.9% due to lower co-financing revenue. We remind that in France’s suburban and rural areas, other operators have the right to co-invest in Orange’s fixed lines depending on their market share, but this revenue stream is difficult to forecast and sometimes causes fluctuations in wholesale revenue. We are maintaining our EUR 13.40 fair value estimate.