• Orange has reported sales and earnings growth for the full year 2024
• Efficiency drives have helped its margins
• CEO Christel Heydemann noted significant savings from procurement processes and the use of AI

Orange CEO Christel Heydemann highlighted significant efficiency gains achieved over the past year as she presented the network operator’s full year 2024 financial results which, with sales and earnings up slightly compared with 2023, were as forecast. 

The telco, which has operations in multiple markets across Europe, the Middle East and Africa, reported full year revenues of €40.26bn, up by a modest 1.5%, earnings before interest, taxes, depreciation and amortisation (EBITDA) of €12.1bn, up 2.7%, and an operating profit of just over €5.1bn, up by a more impressive 8.1%. Orange expects its EBITDA to increase by a further 3% this year.

The improved profitability is the result of slightly higher revenues and improved operational efficiency, which Heydemann described as “a top priority for the group”. In 2023, Orange set itself a target of reducing its annual operating expenses, which totalled €11.8bn at the time, by €600m by the end of 2025 and is on track to meet that target, helped by the implementation of AI. 

Heydemann noted that “AI is a great enabler for efficiency… At the end of year two out of three, we have reached two-thirds of our €600m savings ambition and we have accelerated key initiatives to deliver cost savings in the mid-term. In France, we have signed a unanimous agreement with trade unions for a new senior part-time plan for 2025-28 – this will enable us to adapt our workforce to the evolving challenges of our business, and will contribute positively to EBITDA, with progressive effects starting from 2025.” 

The CEO explained, “We are also  accelerating operational efficiency projects across the group. Procurement will be a key source of additional savings thanks to accelerated group synergies.” She stated that Orange’s total spend on goods and services, including its annual capital expenditures on networks and IT, totals €18bn every year, “and we aim to generate around €700m in procurement savings in the mid-term. Needless to say, AI has a huge potential to create value and improve our cost base. We delivered €200m in value thanks to AI in 2024 [from] more than 150 use cases in networks and operational efficiencies, and we are targeting about €300m of value [from AI] in 2025,” added the CEO. 

Those efficiencies aren’t related to any headcount reductions as a result of process automation, though. “We want to be responsible in the way we manage our workforce when it comes to AI impact,” noted Heydemann. “We know that all jobs will be impacted by AI, and this is why we have trained all our employees and we are providing tools so that employees can all benefit from GenAI in a secure environment within the company, so they have no doubt that this is driving efficiency… the technology is really far from replacing humans and I think… it should not replace humans – it will really enrich and make our employees more efficient,” stated the CEO. 

She also highlighted the “new strategic partnership with Mistral AI, combining research, collaboration, AI integration to optimise our network operations, and the distribution of AI-enriched offers for B2B customers in France and across Europe”.

With sales on target and Orange making progress with its efficiency measures, Orange investors reacted positively to the financial report, as the telco’s share price increased by 3.4% to €11.12 on the Paris bourse.  

And there are further gains and efficiencies to come from AI as Orange looks to grow its revenues at the same time.

As has often been the case in recent years, the telco’s operations in the Africa and Middle East region delivered much of Orange Group’s sales and customer base growth in 2024: Revenues for the region increased by 11.1% to almost €7.7bn. Orange now has 161 million mobile customers and almost 40 million Orange Money users across Africa. 

In Europe, ongoing challenges in Orange’s wholesale business dragged down its numbers, though the operator did manage to record revenue growth in France thanks to an uptick in consumer services revenues. 

In total, Orange ended 2024 with 253 million mobile users, up by 7.1% from the end of 2023, while its fixed line customer base was 38.3 million, down by 3.2% due to the ongoing loss of legacy voice lines. However, high-speed fixed broadband customer numbers did increase by 13.5% to 14.6 million. 

- Ray Le Maistre, Editorial Director, TelecomTV