Impairment and losses on trade receivables from telecom activities
are detailed in Note 4.3.
The cost of credit risk applies only to Mobile Financial Services and
includes impairment charges and reversals on fixed-income securities, loans and receivables to customers as well
as impairment charges and reversals relating to guarantee commitments given, losses on receivables and recovery of
amortized debts (see Note 17.2.1).
Certain expenses related to litigation are directly recorded in
operating income and are not included in the following movements of provisions:
The Group's significant litigations are described in Note 18.
Some restructuring costs are directly recorded in operating income
and are not included in the following movements of provisions:
Supplier payment terms are mutually agreed between the suppliers and
Orange in accordance with the regulations in force. Certain key suppliers and Orange have agreed to a flexible
payment schedule which, for certain invoices, can be extended up to six months.
Trade payables for goods and services and fixed assets that were
subject to a payment extension, and which had an impact on the change in working capital requirement at the end of
the period, amounted to approximately 377 million euros at December 31, 2022, 460 million euros at December 31,
2021, and 435 million euros at the end of 2020.
The accrued post-employment and other long-term benefits are
presented below. These are estimated based on Group headcounts at December 31, 2022, including vested and unvested
rights at December 31, 2022, but which the Group estimates will be vested by approximately 2050:
In accordance with the laws and practices in force in the countries
where it operates, the Group has obligations in terms of employee benefits:
As part of the renegotiations of the intergenerational agreement, a
French part-time for seniors (TPS) plan was signed on December 17, 2021, resulting in the
recognition of an employee benefit liability of 1,225 million euros at December 31, 2021.
The French part-time for seniors plans are accessible to civil
servants and employees under private contract with French entities who are eligible for full retirement benefits
from January 1, 2028 and who have at least 15 years of service at the Group.
These plans give employees the opportunity to work 50% or 60% of a
full-time job whilst receiving:
These plans last for a period of at least 18 months and no longer
than 5 years.
The beneficiaries may decide to invest part of their base
compensation (5%, 10% or 15%) in a Time Savings Account (Compte Épargne Temps (CET)) with an
additional Group contribution. The CET allows for a reduction in the amount of time worked.
At December 31, 2022, the number of employees who are or will be
participating in the French part-time for seniors plans, and thus included in the provision, is estimated at
approximately 10,400 employees.
The assessment of post-employment benefits and other long-term
benefits is based on retirement age calculated in accordance with the provisions applicable to each plan and the
necessary conditions to ensure entitlement to a full pension, both of which are often subject to legislative
changes.
The valuation of the obligation of the French part-time for seniors
plans is sensitive to estimates of the potentially eligible population and to the sign-up rate for the plans
(estimated at 70% on average), and the trade-offs that the beneficiaries will ultimately make between the
different plans proposed.
Unlike previous years, sensitivity to the sign-up rate for the French
part-time for seniors plans is not presented as the deadline for requesting to sign up for the French part-time
for seniors plan signed at the end of 2021 was set at December 31, 2022.
The discount rates used for the French entities (which accounts for
91% of Orange’s pension and other long-term employee benefit obligations at December 31, 2022) are as
follows:
The discount rates used for the euro zone are based on corporate
bonds rated AA with a duration equivalent to the duration of the obligations.
The increase in annuities of the Equant plans in the United Kingdom
is based on inflation (3.05% used) up to 5%.
The main capital-based defined-benefit plan (retirement bonuses for
employees under private-law contracts in France) is principally sensitive to employment policy assumptions (Orange
has historically had high numbers of employees of retirement age), salary revaluation and long-term inflation of
2%.
The impacts on pension benefit obligations of a change in the key
assumption would be as follows:
The funded annuity-based plans are primarily located in the United
Kingdom (54%) and France (45%) and their assets are broken down as follows:
Employee benefits in the statement of financial position correspond
to commitments less plan assets. These have not been subject to any asset capping adjustment for the periods
presented.
The Board of Directors approved the implementation of free share
award plans (Long-Term Incentive Plans - LTIP) reserved for the Executive Committee, Corporate Officers and senior
executives designated as "Executives" or "Leaders."
Main characteristics
| |
LTIP 2022 - 2024
|
LTIP 2021 - 2023
|
LTIP 2020 - 2022
|
|
Implementation date by the Board of Directors
|
July 27, 2022
|
July 28, 2021
|
July 29, 2020
|
|
Maximum number of free share units (1)
|
1.8 million
|
1.8 million
|
1.7 million
|
|
Estimated number of beneficiaries
|
1,300
|
1,300
|
1,300
|
|
Acquisition date of the rights by the beneficiaries
|
December 31, 2024
|
December 31, 2023
|
December 31, 2022
|
|
Delivery date of the shares to the beneficiaries
|
March 31, 2025
|
March 31, 2024
|
March 31, 2023
|
(1) In countries where the regulations, tax codes or labor laws do not permit awards of stock, the
beneficiaries of the plan will receive a cash value based on the market price of Orange stock at the delivery date
of the shares.
Continued employment condition
The allocation of rights to beneficiaries is subject to a continued
employment condition:
| |
LTIP 2021 - 2023
|
LTIP 2021 - 2023
|
LTIP 2020 - 2022
|
|
Assessment of the employment continuation
|
From July 27, 2022
to December 31, 2024
|
From July 28, 2021
to December 31, 2023
|
From July 29, 2020
to December 31, 2022
|
Performance conditions
Depending on the plans, the allocation of rights to beneficiaries is
subject to the achievement of internal and external performance conditions, i.e.:
−
the organic cash flow from telecom activities internal performance condition, as defined in the plan
regulations, assessed at the end of the three years of the plan against the objective set by the Board of
Directors for the LTIP 2020-2022, 2021-2023 and 2022-2024;
−
the Corporate Social Responsibility (CSR) internal performance condition, half of which relates to the
change in the level of CO2 per customer
use and (i) half to the Group’s renewable electricity rate for the 2020-2022 plan, and (ii) half to the
proportion of women in the Group’s management networks for the LTIP 2021-2023 and 2022-2024 plans, assessed
at the end of the three years of the plan in relation to the targets set by the Board of Directors;
−
the Total Shareholder Return (TSR) external performance condition. The TSR performance is assessed by
comparing the change in the Orange TSR based on the relative performance of the total return for Orange
shareholders over the three fiscal years and the change in the TSR calculated on the average values of the
benchmark index, Stoxx Europe 600 Telecommunications, or any other index having the same purpose and replacing it
during the term of the plan.
Rights subject to the achievement of performance conditions (as
a % of the total entitlement):
| |
LTIP 2022 - 2024
|
LTIP 2021 - 2023
|
LTIP 2020 - 2022
|
|
Organic cash-flow from telecom activities
|
50%
|
50%
|
40%
|
|
Total Shareholder Return (TSR)
|
30%
|
30%
|
40%
|
|
Corporate Social Responsability (CSR)
|
20%
|
20%
|
20%
|
All performance conditions are estimated to be met at the end of the
three years of the plan, with the exception of the condition relating to the TSR of the 2020-2022 plan.
Valuation assumptions
| |
LTIP 2022 - 2024
|
LTIP 2021 - 2023
|
LTIP 2020 - 2022
|
|
Measurement date
|
July 27, 2022
|
July 28, 2021
|
July 29, 2020
|
|
Vesting date
|
December 31, 2024
|
December 31, 2023
|
December 31, 2022
|
|
Price of underlying instrument at measurement date
|
10.16 euros
|
9.63 euros
|
10.47 euros
|
|
Price of underlying instrument at closing date
|
9.28 euros
|
9.28 euros
|
9.28 euros
|
|
Expected dividends (% of the share price)
|
6.9%
|
7.3%
|
6.7%
|
|
Risk free yield
|
- 0.59%
|
- 0.68%
|
- 0.61%
|
|
Fair value per share of benefit granted to employees
|
7.53 euros
|
6.33 euros
|
6.06 euros
|
|
o/w fair value of internal performance condition
|
8.30 euros
|
7.74 euros
|
8.58 euros
|
|
o/w fair value of external performance condition
|
5.74 euros
|
3.04 euros
|
2.27 euros
|
For the portion of the plan issued in the form of shares, fair value
was determined based on the market price of Orange shares on the date of allocation and the expected dividends
discounted to December 31, 2022. The fair value also takes into account the likelihood of achievement of the
market performance conditions, determined on the basis of a model constructed using the Monte Carlo method. For
the portion of the plan issued in cash, the fair value was determined based on the market price of Orange shares.
Accounting effect
In 2022, an expense of (11) million euros (including social security
contributions) was recognized with corresponding entries in equity (10 million euros) and employee benefits (1
million euros).
In 2021, an expense of (11) million euros (including social security
contributions) was recognized with corresponding entries in equity (10 million euros) and employee benefits (1
million euros).
In 2020, an expense of (15) million euros (including social security
contributions) was recognized with corresponding entries in equity (13 million euros) and employee benefits (2
million euros).
Closure of the free share award plan
LTIP 2019-2021
In 2019, the Board of Directors approved the implementation of a free
share award plan (LTIP) reserved for the Executive Committee, Corporate Officers and Senior Management.
The shares were delivered to the beneficiaries on March 31, 2022.
Main characteristics
| |
LTIP 2019 - 2021
|
|
Implementation date by the Board of Directors
|
July 24, 2019
|
|
Maximum number of free share units (1)
|
1.7 million
|
|
Estimated number of beneficiaries at the beginning
|
1,200
|
|
Number of free share units delivered at delivery date (1)
|
0.7 million
|
|
Number of beneficiaries
|
1,094
|
|
Acquisition date of the rights by the beneficiaries
|
December 31, 2021
|
|
Delivery date of the shares to the beneficiaries
|
March 31, 2022
|
(1) In countries where the regulatory conditions, tax codes or labor laws do not permit awards of stock, the
beneficiaries of the plan received a cash amount value based on the market price of Orange stock at the delivery
date of the shares, on March 31, 2022.
Continued employment condition
| |
LTIP 2019 - 2021
|
|
Assessment of the employment continuation
|
From July 24, 2019
to December 31, 2021
|
The allocation of rights to beneficiaries was subject to a continued
employment condition:
Performance conditions
Depending on the plans, the allocation of rights to beneficiaries was
subject to the achievement of internal and external performance conditions, i.e.:
−
the organic cash flow from telecom activities internal performance condition, as defined in the plan
regulations;
−
the Total Shareholder Return (TSR) external performance condition. The TSR performance is assessed by
comparing the change in the Orange TSR based on the relative performance of the total return for Orange
shareholders over the three fiscal years and the change in the TSR calculated on the average values of the
benchmark index, Stoxx Europe 600 Telecommunications, or any other index having the same purpose and replacing it
during the term of the plan.
Rights subject to the achievement of performance conditions (as
a % of the total entitlement):
| |
LTIP 2019 - 2021
|
|
Organic cash-flow from telecom activities
|
50%
|
|
Total Shareholder Return (TSR)
|
50%
|
Performance was assessed for the years 2019, 2020 and 2021 in
relation to the budget for each of these three years, as approved in advance by the Board of Directors. The
condition relating to organic cash flow from telecom activities was met for 2019, 2020 and 2021. In addition, the
condition relating to TSR was not met for the period 2019-2021.
Valuation assumptions
| |
LTIP 2019 - 2021
|
|
Measurement date
|
July 24, 2019
|
|
Vesting date
|
December 31, 2021
|
|
Price of underlying instrument at measurement date
|
13.16 euros
|
|
Price of underlying instrument at vesting date
|
9.41 euros
|
|
Price of underlying instrument at delivery date
|
10.70 euros
|
|
Expected dividends (% of the share price)
|
5.3%
|
|
Risk free yield
|
-0.7%
|
|
Fair value per share of benefit granted to employees
|
7.80 euros
|
|
o/w fair value of internal performance condition
|
11.10 euros
|
|
o/w fair value of external performance condition
|
4.50 euros
|
For the portion of the free share award plan issued in the form of
shares, fair value was determined based on the market price of Orange shares on the award date and the expected
dividends discounted to December 31, 2021. The fair value also took into account the likelihood of achieving the
market performance condition, determined on the basis of a model constructed using the Monte Carlo method. For the
portion of the plans remitted in the form of cash, the fair value was determined on the basis of the Orange share
price.
Accounting effect
The cost of the plan including social security contributions is
presented below:
|
(in millions of euros)
|
2022
|
2021
|
2020
|
2019
|
|
LTIP 2019 - 2021
(1)
|
1
|
(6)
|
(6)
|
(3)
|
(1) With corresponding entries in equity for 12 million euros and in employee-related payables for 2 million
euros settled on delivery of the shares in 2022.
Together 2021 Employee Shareholding
Plan
On April 21, 2021, the Board of Directors approved the implementation
of the Together 2021 Employee Shareholding Plan, designed to strengthen the Group’s employee shareholding.
The offer covered a maximum of 260 million euros of subscriptions including matching contributions, expressed as
the reference price before discount, and was carried out by buying back existing shares of Orange SA.
The number of shares subscribed at the price of 6.64 euros (taking
into account a discount of 30% on the reference market price) amounted to 12 million shares, to which were added
14 million shares allocated free of charge in the form of a matching contribution, i.e. a total of 26 million
shares.
The average fair value of the benefit granted to employees and former
employees of the Group was at 6.47 euros per share allocated (including free shares), i.e. an expense of (172)
million euros (including social security contributions) recognized though equity for 169 million euros and through
employee benefits for 3 million euros at December 31, 2021.
Other plans
The other share-based compensation and similar plans implemented in
the Orange group are not material at Group level.
Accounting policies
Employee share-based
compensation: the fair value of stock options and free shares is determined by reference to the exercise
price, the life of the option, the current price of the underlying shares at the grant date, the expected share
price volatility, expected dividends, and the risk-free interest rate over the option’s life. Vesting
conditions other than market conditions are not part of the fair value assessment, but are part of the grant
assumptions (employee turnover, probability of achieving performance criteria).
The determined amount is
recognized in labor expenses on a straight-line basis over the vesting period, with corresponding entries for:
−
employee benefit liabilities for cash-settled plans, r remeasured in profit or loss at each year-end; and
−
equity for equity-settled plans.
6.4
Executive
compensation
The following table shows the compensation booked by Orange SA and
its controlled companies to persons who were members of Orange SA’s Board of Directors or Executive
Committee at any time during the year or at the end of the year.
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020 (4)
|
|
Short-term benefits excluding employer social security contributions (1)
|
(12)
|
(14)
|
(16)
|
|
Short-term benefits: employer's social security contributions
|
(4)
|
(5)
|
(5)
|
|
Post-employment benefits (2)
|
(0)
|
(0)
|
(0)
|
|
Share-based compensation (3)
|
(1)
|
(2)
|
(2)
|
(1)
Includes all compensation: gross salaries, the variable
component, bonuses and benefits (excluding termination benefits), benefits in kind, incentives and profit-sharing,
attendance compensation and the share-based Long Term Incentive Plan (LTIP) which matured at December 31, 2021 and
was paid out in 2022.
(2)
Service cost.
(3)
Includes employee shareholding plans and share-based Long-Term
Incentive Plans (LTIP) in force.
(4)
In 2020, (2) million euros relating to termination benefits had
been paid. These termination benefits are not presented in the compensation table above.
The total amount of retirement benefits (contractual retirement
bonuses and supplementary defined-benefit pension plan) provided in respect of persons who were members of the
Board of Directors or Executive Committee at the end of the fiscal year was 2 million euros in 2022 (compared with
4 million euros in 2021 and 4 million euros in 2020).
The Chief Executive Officer, appointed on April 4, 2022, does not
have an employment contract.
In the event of dismissal or non-renewal of the corporate office not
motivated by serious misconduct or gross negligence, Orange will pay the Chief Executive Officer gross severance
pay equal to 12 months of fixed compensation and annual variable compensation paid, with the latter being
calculated based on the average annual variable compensation paid for the last 24 months prior to departure from
the Company. This severance pay will only be due if the performance conditions for annual variable compensation
for the two years prior to departure from the Company were achieved at an average of at least 90%.
In accordance with the Afep-Medef Code, the total amount of severance
pay and non-compete compensation that would be paid to the Chief Executive Officer may not exceed 24 months of
fixed compensation and annual variable compensation.
The employment contract of the Delegate Chief Executive Officer was
suspended at the date of his appointment as a Corporate Officer. His employment contract may be reinstated at the
end of his term of office, with recovery of rights.
Executive Committee members’ contracts include a clause
providing for a contractual termination settlement not exceeding 15 months of their total gross annual
compensation (including the contractual termination benefit).
Orange has not acquired any other goods or services from persons who
are, at the end of the fiscal year, members of the Board of Directors or Executive Committee of Orange SA (or any
parties related thereto).
Note 7
Impairment losses and goodwill
7.1
Impairment losses
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Romania
|
(789)
|
-
|
-
|
|
Mobile Financial Services
|
(28)
|
-
|
-
|
|
Spain
|
-
|
(3,702)
|
-
|
|
Total of impairment of goodwill
|
(817)
|
(3,702)
|
-
|
Impairment tests on Cash-Generating Units (CGUs) may result in
impairment losses on goodwill (see Note 7.2) and on fixed assets (see Note 8.3).
At December 31, 2022
Romania
In Romania, the goodwill impairment of (789) million euros mainly
reflects:
−
a material increase in the discount rate due to changes in market assumptions;
−
greater competitive pressure; and
−
the downward revision of the business plan compared with the plan used at December 31, 2021, particularly
in the early years.
Following the impairment of goodwill in Romania, the net carrying
value of the assets of the CGU has been reduced to the value in use of current and long-term assets at 100% at
December 31, 2022, i.e. 1.7 billion euros.
Mobile Financial Services
Impairment of (49) million euros was recorded on Mobile Financial
Services (including (28) million euros on goodwill and (21) million euros on fixed assets) due to
deterioration of the business plan.
At December 31, 2022, the net carrying value of goodwill was reduced
to zero and the value in use of the CGU amounted to 0.4 billion euros.
At December 31, 2021
In Spain, the business plan has been significantly revised downward
since December 31, 2020, in view of:
−
a deteriorating competitive environment despite market consolidation operations (affected by the erosion of
average revenue per user); and
−
uncertainties surrounding the continuation of the health crisis (delay in the forecasts for economic
recovery).
The revision of the business plan in Spain has led to the recognition
during the first semester of (3,702) million euros impairment of goodwill, bringing the net book value of
tested assets down to the value in use of current and long-term assets, i.e. 7.7 billion euros.
At December 31, 2020
At December 31, 2020, impairment tests did not result in the Group
recognizing any impairment losses.
7.2
Goodwill
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
|
|
| |
Gross value
|
Accumulated impairment losses
|
Net book value
|
Net book value
|
Net book value
|
|
France
|
13,189
|
(13)
|
13,176
|
14,364
|
14,364
|
|
Europe
|
12,962
|
(8,377)
|
4,586
|
6,079
|
9,512
|
| |
Spain
|
6,550
|
(3,816)
|
2,734
|
3,170
|
6,872
|
| |
Slovakia
|
806
|
-
|
806
|
806
|
806
|
| |
Romania
|
1,806
|
(1,359)
|
447
|
1,504
|
1,236
|
| |
Belgium
|
1,049
|
(713)
|
336
|
336
|
336
|
| |
Poland
|
2,605
|
(2,470)
|
135
|
135
|
136
|
| |
Moldova
|
78
|
-
|
78
|
80
|
76
|
| |
Luxembourg
|
68
|
(19)
|
50
|
50
|
50
|
|
Africa & Middle-East
|
2,379
|
(958)
|
1,420
|
1,465
|
1,443
|
| |
Burkina Faso
|
428
|
-
|
428
|
428
|
428
|
| |
Côte d'Ivoire
|
417
|
(42)
|
375
|
375
|
375
|
| |
Morocco
|
249
|
-
|
249
|
265
|
253
|
| |
Jordan
|
293
|
(175)
|
118
|
111
|
103
|
| |
Sierra Leone
|
73
|
-
|
73
|
114
|
118
|
| |
Cameroon
|
134
|
(90)
|
44
|
44
|
44
|
| |
Other
|
784
|
(651)
|
133
|
128
|
122
|
|
Enterprise
|
2,941
|
(651)
|
2,289
|
2,237
|
2,225
|
|
Totem(1)
|
1,624
|
-
|
1,624
|
N/A
|
N/A
|
|
International Carriers and Shared Services
|
18
|
-
|
18
|
18
|
18
|
|
Mobile Financial Services
|
28
|
(28)
|
-
|
28
|
35
|
|
Goodwill
|
33,140
|
(10,028)
|
23,113
|
24,192
|
27,596
|
(1) In 2021 and 2020, Totem's figures were included in France and Spain segments (see Note 1.1).
|
(in millions of euros)
|
Note
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Gross Value in the opening balance
|
|
33,626
|
33,273
|
33,579
|
|
Acquisitions(1)
|
|
(206)
|
266
|
26
|
|
Disposals
|
|
-
|
(4)
|
-
|
|
Translation adjustment
|
|
(280)
|
91
|
(331)
|
|
Reclassifications and other items
|
|
-
|
-
|
-
|
|
Gross Value in the closing balance
|
|
33,140
|
33,626
|
33,273
|
|
Accumulated impairment losses in the opening balance
|
|
(9,435)
|
(5,678)
|
(5,935)
|
|
Impairment
|
7.1
|
(817)
|
(3,702)
|
-
|
|
Disposals
|
|
-
|
(0)
|
-
|
|
Translation adjustment
|
|
225
|
(55)
|
257
|
|
Accumulated impairment losses in the closing balance
|
|
(10,028)
|
(9,435)
|
(5,678)
|
|
Net book value of goodwill
|
|
23,113
|
24,192
|
27,596
|
(1) In 2022, mainly includes the finalization of the purchase price allocation for Telekom Romania
Communications, resulting in the revision of the amount of preliminary goodwill recognized in 2021 for (272)
million euros. In 2021, mainly included preliminary goodwill of 272 million euros related to the acquisition of
Telekom Romania Communications.
7.3 Key
assumptions used to determine recoverable amounts
The key operational assumptions reflect past experience and expected
trends: unforeseen changes have in the past affected and could continue to significantly affect these
expectations. In this respect, the review of expectations could affect the margin of recoverable amounts over the
carrying value tested (see Note 7.4) and result in impairment of goodwill and fixed assets.
In 2022, the Group updated its strategic plan during the second half
(for the period 2023-2025). Accordingly, new business plans were prepared for all CGUs.
The discount rates and perpetual growth rates used to
determine the values in use were revised as follows at the end of December 2022:
−
discount rates have risen sharply as a result of the deteriorating macro-economic environment (higher
interest rates), and may include a specific premium reflecting an assessment of the risks of achieving certain
business plans, or of country risks, particularly in Romania;
−
perpetual growth rates were maintained for most geographical areas.
At December 31, 2022, the business plans and key operating
assumptions were sensitive to the following:
−
inflation, in particular rising energy prices, and the ability to preserve margins by adjusting rates and
optimizing costs and investments;
−
the fiercely competitive nature of the markets in which the Group operates, where price pressure is strong;
−
the decisions by regulatory and competition authorities in terms of stimulating business investment, and
rules for awarding 5G operating licenses and market concentration; and
−
specifically in the Middle-East and the Maghreb (Jordan, Egypt and Tunisia) as well as in some African
countries (Mali, Democratic Republic of the Congo, Central African Republic, Sierra Leone and Burkina Faso):
changes in the political situation and security with their resulting negative economic impacts on the overall
business climate.
The parameters used to determine the recoverable amount of the main
consolidated activities or the activities most sensitive to the assumptions of the impairment tests are as
follows:
|
|
|
|
|
|
|
|
|
|
December 31, 2022
|
France
|
Spain
|
Poland
|
Enterprise
|
Romania
|
Belgium
|
Mobile Financial Services
|
Côte d'Ivoire/
Burkina Faso/
Liberia
|
|
Basis of recoverable amount
|
Value in use
|
Fair value
|
|
Source used
|
Internal plan
|
NA
|
|
Methodology
|
Discounted cash flow
|
NA
|
|
Cost of equity
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
12.3 %
|
NA
|
|
Perpetuity growth rate
|
0.8 %
|
1.5 %
|
2.0 %
|
0.5 %
|
2.5 %
|
0.8 %
|
2.0 %
|
NA
|
|
Post-tax discount rate
|
6.3 %
|
7.5 %
|
7.8 %
|
6.8 %
|
10.5 %
|
7.0 %
|
NA
|
NA
|
|
p-tax discount rate
|
8.4 %
|
10.0 %
|
9.1 %
|
9.2 %
|
11.8 %
|
8.8 %
|
NA
|
NA
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021
|
France
|
Spain
|
Poland
|
Enterprise
|
Romania
|
Belgium/
Luxembourg
|
|
|
|
Basis of recoverable amount
|
Value in use
|
Fair value
|
|
|
|
Source used
|
Internal plan
|
NA
|
|
|
|
Methodology
|
Discounted cash flow
|
NA
|
|
|
|
Perpetuity growth rate
|
0.8 %
|
1.5 %
|
1.5 %
|
0.3 %
|
2.5 %
|
NA
|
|
|
|
Post-tax discount rate
|
5.8 %(1)
|
6.8 %
|
7.3 %
|
8.3 %
|
7.0 %
|
NA
|
|
|
|
p-tax discount rate
|
7.6 %
|
8.4 %
|
8.5 %
|
11.1 %
|
7.9 %
|
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
France
|
Spain
|
Poland
|
Enterprise
|
Romania
|
Morocco
|
Belgium/
Luxembourg
|
|
|
Basis of recoverable amount
|
Value in use
|
Fair value
|
|
|
Source used
|
Internal plan
|
NA
|
|
|
Methodology
|
Discounted cash flow
|
NA
|
|
|
Perpetuity growth rate
|
0.8 %
|
1.5 %
|
1.5 %
|
0.3 %
|
2.3 %
|
2.8 %
|
NA
|
|
|
Post-tax discount rate
|
5.5 %(1)
|
6.5 %
|
7.3 %
|
7.5 %
|
7.5 %
|
7.3 %
|
NA
|
|
|
p-tax discount rate
|
7.4 %
|
8.1 %
|
8.5 %
|
10.2 %
|
8.5 %
|
8.6 %
|
NA
|
|
(1) The after-tax discount rate for France included a corporate tax reduction of 25.83% since 2022.
At December 31, 2021, the fair value of Belgium/Luxembourg had
been defined on the basis of the conditional voluntary public tender offer for the shares of Orange Belgium, which
closed on May 4, 2021 (see Note 3.2).
The Group’s listed subsidiaries are Orange Polska (Warsaw Stock
Exchange), Orange Belgium (Brussels Stock Exchange), Jordan Telecom (Amman Stock Exchange), Sonatel (Regional
Stock Exchange (BRVM)), and, since December 30, 2022, Orange Côte d’Ivoire (BRVM). The aggregated
share of these subsidiaries, which publish their own regulated information, is less than or equal to 20% of
consolidated revenues, operating income and net income excluding non-recurring transactions.
7.4
Sensitivity of recoverable amounts
Because of the correlation between operating cash flows and
investment capacity, a sensitivity of net cash flows is used. As cash flows at the terminal point represent a
significant portion of the recoverable amount, a change of plus or minus 10% in these cash flows is presented as a
sensitivity assumption.
The cash flows are those generated by operating activities net of
acquisitions and disposals of property, plant and equipment and intangible assets (including a tax expense at a
standard rate, repayment of lease liabilities and debt related to financed assets, related interest expenses and
excluding other interest expenses). An additional analysis was carried out on the most sensitive CGUs for which
the amount of lease liabilities was material in order to confirm the absence of impairment losses or additional
impairment losses.
A sensitivity analysis was carried out on the main consolidated
activities or the activities most sensitive to the assumptions of the impairment tests and is presented below to
enable readers of the financial statements to estimate the effects of their own estimates. Changes in cash flows,
perpetual growth rates or discount rates exceeding the sensitivity levels presented have been observed in the
past.
|
|
|
|
| |
Increase in discount rate in order for the recoverable amount to
be equal to the net carrying value (in basis points)
|
Decrease in the perpetual growth rate in order for the
recoverable amount to be equal to the net carrying value (in basis points)
|
Decrease in the discounted cash flows of the terminal value in
order for the recoverable amount to be equal to the net carrying value (in %)
|
|
December 31, 2022
|
|
|
|
|
France
|
+139 bp
|
(120) bp
|
-26%
|
|
Spain
|
+44 bp
|
(47) bp
|
-8%
|
|
Poland
|
+249 bp
|
(272) bp
|
-32%
|
|
Enterprise
|
+100 bp
|
(115) bp
|
-19%
|
|
Belgium
|
+97 bp
|
(97) bp
|
-15%
|
|
Sierra Leone
|
+50 bp
|
(72) bp
|
-6%
|
|
December 31, 2021
|
|
|
|
|
France
|
+234 bp
|
(217) bp
|
-39%
|
|
Spain
|
+19 bp
|
(21) bp
|
-4%
|
|
Poland
|
+269 bp
|
(221) bp
|
-30%
|
|
Enterprise
|
+1,125 bp
|
(1,026) bp
|
-83%
|
|
Romania
|
+44 bp
|
(45) bp
|
-10%
|
|
December 31, 2020
|
|
|
|
|
France
|
+141 bp
|
(124) bp
|
-28%
|
|
Spain
|
+1 bp
|
(1) bp
|
0%
|
|
Poland
|
+189 bp
|
(151) bp
|
-23%
|
|
Enterprise
|
+1,067 bp
|
(1,691) bp
|
-82%
|
|
Romania
|
+49 bp
|
(49) bp
|
-9%
|
|
Morocco
|
+354 bp
|
(433) bp
|
-53%
|
|
Belgium
|
NA
|
NA
|
NA
|
Romania
In 2022, the value in use of the Romania CGU was revised based on the
key valuation assumptions established by the local governance. The revision of the assumptions resulted in (789)
million euros of goodwill impairment.
A sensitivity analysis was carried out at December 31, 2022 on
each of the following criteria, taken individually:
−
a 1% increase in the discount rate;
−
a 1% decrease in the perpetual growth rate;
−
a 10% decrease in cash flows in the terminal year.
This sensitivity analysis identified an estimated risk of additional
impairment of up to 30% of the impairment loss recognized at December 31, 2022.
Mobile Financial Services
In 2022, the value in use of the Mobile Financial Services CGU was
revised based on the key valuation assumptions established by the local governance. The revision of the
assumptions resulted in impairment of goodwill of (28) million euros and impairment of fixed assets of
(21) million euros, representing all the assets that can be impaired under IAS 36. Sensitivity analyses are
therefore not relevant.
Côte d’Ivoire
At December 31, 2022, the fair value of the Côte
d’Ivoire, Burkina Faso and Liberia CGUs was defined on the basis of the public sale offer on shares of
Orange Côte d’Ivoire, carried out by the state of Côte d’Ivoire over a subscription period
from December 5 to December 19, 2022. This transaction was followed by the initial public offering
(BRVM) of Orange Côte d’Ivoire on the financial market of the West African Economic and Monetary Union
(WAEMU) on December 30, 2022. Sensitivity analyses, calculated on cash flows and financial parameters, are
therefore not relevant for these three CGUs at December 31, 2022.
Sierra Leone
A sensitivity analysis was also carried out on Sierra Leone on each
of the following criteria, taken individually:
−
a 1% increase in the discount rate;
−
a 1% decrease in the perpetual growth rate;
−
a 10% decrease in cash flows in the terminal year.
This sensitivity analysis identified an estimated risk of impairment
of up to 8% of the net value of goodwill.
The other entities not listed above each account for less than 3% of
the recoverable amount of the consolidated entities or do not present a recoverable amount close to the net value.
Accounting policies
Goodwill recognized as an
asset in the statement of financial position comprises the excess calculated:
−
either on the basis of the equity interest acquired (and for business combinations after January 1, 2010,
with no subsequent changes for any additional purchases of non-controlling interests); or
−
on a 100% basis, leading to the recognition of goodwill relating to non-controlling interests.
Goodwill is not amortized. It
is tested for impairment at least annually and more frequently when there is an indication that it may be
impaired. Thus, changes in general economic and financial trends, the different levels of resilience of the
telecommunication operators with respect to the deterioration of local economic environments, changes in the
market capitalization of telecommunication operators, as well as financial performance compared to market
expectations represent external impairment indicators that are analyzed by the Group, together with internal
performance indicators, in order to assess whether an impairment test should be performed more than once a year.
These tests are performed at
the level of each Cash-Generating Unit (CGU) (or group of CGUs). These generally correspond to business segments
or to each country in the Africa and Middle-East region and Europe. This is reviewed if the Group changes the
level at which it monitors return on investment for goodwill testing purposes.
To determine whether an
impairment loss should be recognized, the carrying value of the assets and liabilities of the CGUs or groups of
CGUs is compared to their recoverable amount, for which Orange uses mostly the value in use.
Value in use is estimated as
the present value of the expected future cash flows. Cash flow projections are based on economic and regulatory
assumptions, license renewal assumptions and sales activity and investment forecasts drawn up by the
Group’s management, as follows:
−
cash flow projections are based on three-to-five-year business plans and include a tax cash flow
calculated as EBIT (operating income) multiplied by the statutory tax rate (excluding the impact of deferred tax
and unrecognized tax loss carryforwards at the date of valuation). In the case of recent acquisitions,
longer-term business plans may be used;
−
post-tax cash flow projections beyond that timeframe may be extrapolated by applying a declining or flat
growth rate for the next year, and then a perpetual growth rate reflecting the expected long-term growth in the
market;
−
post-tax cash flows are subject to a post-tax discount rate, using rates which incorporate a relevant
premium reflecting a risk assessment for the implementation of certain business plans or country risks. The
value in use derived from these calculations is identical to the one that would result from discounting p-tax
cash flows at p-tax discount rates.
The key operating assumptions
used to determine values in use are common across all of the Group’s business segments. Key assumptions
for most CGUs include:
−
key revenue assumptions, which reflect market level, penetration rate of the offers and market share,
positioning of the competition’s offers and their potential impact on market price levels and their
transposition to the Group’s offer bases, regulatory authority decisions on pricing of services to
customers and on access and pricing of inter-operator services, technology migration of networks (e.g.
extinction of copper local loops), decisions of competition authorities in terms of concentration or regulation
of adjacent sectors such as cable;
−
key cost assumptions, on the level of marketing expenses required to deal with the pace of product line
renewals and the positioning of the competition, the ability to adjust costs to potential changes in revenues or
the effects of natural attrition and employee departure plans underway;
−
key assumptions on the level of capital expenditure, which may be affected by the rollout of new
technologies, by decisions of regulatory authorities relating to licenses and spectrum allocation, deployment of
fiber networks, mobile network coverage, sharing of network elements or obligations to open up networks to
competitors.
The tested net carrying
values include goodwill, land and assets with finite useful lives (property, plant and equipment, intangible
assets and net working capital requirements including intra-group balances). The Orange brand, an asset with an
indefinite useful life, is subject to a specific test, see Note 8.3.
If an entity partially owned
by the Group includes goodwill attributable to non-controlling interests, the impairment loss is allocated
between the shareholders of Orange SA and the non-controlling interests on the same basis as that on which
profit or loss is allocated (i.e. ownership interest).
Impairment loss for goodwill
is recorded definitively in operating income.
Note 8
Fixed assets
8.1
Gains
(losses) on disposal of fixed assets
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Transfer price
|
347
|
163
|
444
|
|
Net book value of assets sold
|
(187)
|
(111)
|
(223)
|
|
Proceeds from the disposal of fixed assets
(1)
|
159
|
52
|
221
|
(1)
In 2022, gains (losses) on disposal of fixed assets
related to the sale and leaseback transactions amount to 14 million euros and includes property asset disposals in
Poland. In 2021, included property asset disposals in France for 10 million euros.
In 2020, included
property asset disposals in France and mobile site disposal in Spain for 143 million euros.
8.2
Depreciation and amortization
(in millions of euros)
|
|
|
Depreciation and amortization of intangible assets |
|
|
|
|
Depreciation and amortization of property, plant and equipment |
|
|
|
|
|
|
Depreciation and amortization of
intangible assets
(in millions of euros)
|
Software |
|
Telecommunications licenses |
|
Customer bases |
|
Brands |
|
Other intangible assets |
Depreciation and amortization of
property, plant and equipment
(in millions of euros)
|
Networks and terminals |
|
IT equipment |
|
Land and buildings |
|
Other property, plant and equipment |
Accounting policies
Assets are amortized to
expense their cost (generally with no residual value deducted) on a basis that reflects the pattern in which
their future economic benefits are expected to be consumed. The straight-line basis is usually applied. The
useful lives are reviewed annually and are adjusted if current estimated useful lives differ from previous
estimates. This may be the case for outlooks on the implementation of new technologies (for example, the
replacement of copper local loop by optical fiber). These changes in accounting estimates are recognized
prospectively.
8.3
Impairment of fixed assets
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Mobile Financial Services(1)
|
(21)
|
-
|
-
|
|
Enterprise
|
(20)
|
0
|
-
|
|
France
|
(15)
|
(1)
|
(15)
|
|
Poland
|
(2)
|
(11)
|
(7)
|
|
International Carriers & Shared Services
|
0
|
(2)
|
(7)
|
|
Other
|
1
|
(2)
|
(1)
|
|
Total of impairment of fixed assets
|
(56)
|
(17)
|
(30)
|
(1) The impairment of fixed assets resulting from impairment tests on Cash-Generating Units (CGUs) are
described in Note 7.1.
Key assumptions and sensitivity of the
recoverable amount of the Orange brand
The key assumptions and sources of sensitivity used in the assessment
of the recoverable amount of the Orange brand are similar to those used for the goodwill of consolidated
activities (see Note 7.3), which affect the revenue base and potentially the level of brand royalties.
Other assumptions that affect the assessment of the recoverable
amount are as follows:
| |
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Basis of recoverable amount
|
Value in use
|
Value in use
|
Value in use
|
|
Source used
|
Internal plan
|
Internal plan
|
Internal plan
|
|
Methodology
|
Discounted net fees
|
Discounted net fees
|
Discounted net fees
|
|
Perpetuity growth rate
|
1.4 %
|
1.3 %
|
1.2 %
|
|
Post-tax discount rate
|
8.2 %
|
7.7 %
|
6.9 %
|
|
p-tax discount rate
|
10.5 %
|
9.8 %
|
8.3 %
|
The sensitivity analysis did not highlight any risk of impairment of the Orange brand.
Accounting policies
Given the nature of its
assets and businesses, most of the Group’s individual assets do not generate cash inflows independent of
those of the Cash-Generating Units. The recoverable amount is therefore determined at the level of the CGU (or
group of CGUs) to which the assets belong, according to a method similar to that described for goodwill.
The Orange brand has an indefinite
useful life and is not amortized but is tested for impairment at least annually. Its recoverable amount is
assessed based on the expected contractual royalties discounted in perpetuity (and included in the business
plan), less costs attributable to the brand’s owner.
8.4
Other
intangible assets
| |
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
|
|
|
(in millions of euros)
|
Gross value
|
Accumulated depreciation and amortization
|
Accumulated impairment
|
Net book value
|
Net book value
|
Net book value
|
|
Telecommunications licenses
|
12,688
|
(5,773)
|
(46)
|
6,869
|
6,691
|
6,322
|
|
Software
|
14,235
|
(9,887)
|
(69)
|
4,280
|
4,331
|
4,288
|
|
Orange brand
|
3,133
|
-
|
-
|
3,133
|
3,133
|
3,133
|
|
Other brands
|
1,085
|
(136)
|
(889)
|
60
|
69
|
78
|
|
Customer bases
|
5,270
|
(5,009)
|
(15)
|
246
|
346
|
469
|
|
Other intangible assets
|
2,276
|
(1,715)
|
(203)
|
358
|
370
|
844
|
|
Total
|
38,686
|
(22,519)
|
(1,221)
|
14,946
|
14,940
|
15,135
|
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net book value of other intangible assets - in the opening balance
|
14,940
|
15,135
|
14,737
|
|
Acquisitions of other intangible assets
|
2,678
|
2,842
|
2,935
|
|
o/w telecommunications licenses(1)
|
1,060
|
926
|
969
|
|
Impact of changes in the scope of consolidation(2)
|
35
|
(888)
|
31
|
|
Disposals
|
(5)
|
(4)
|
(4)
|
|
Depreciation and amortization
|
(2,418)
|
(2,363)
|
(2,309)
|
|
Impairment
|
(33)
|
(40)
|
(24)
|
|
Translation adjustment
|
(245)
|
92
|
(176)
|
|
Reclassifications and other items(3)
|
(7)
|
165
|
(55)
|
|
Net book value of other intangible assets - in the closing balance
|
14,946
|
14,940
|
15,135
|
(1)
In 2022, mainly includes the acquisition of the 5G
licenses in Romania for 319 million euros and in Belgium for 213 million euros, and for the 2600 MHz band license
in Egypt for 311 million euros.
In 2021, included the
acquisition of the 5G license in Spain for 611 million euros and the renewals in France of the 2G licenses for 207
million euros and the 3G licenses for 57 million of euros.
In 2020, included
to the acquisition of the 5G license in France for 875 million euros and in Slovakia for 37 million euros.
(2)
In 2021, mainly included the effects of the loss of sole
control over Orange Concessions.
(3)
In 2021, mainly included incentive bonus fees on
penetration rates and business continuity payable by the Public Initiative Networks to the local authorities for
195 million euros.
Internal costs capitalized as
intangible assets
Internal costs capitalized as intangible assets include to labor
expenses and amount to 418 million euros in 2022, 399 million euros in 2021 and 405 million euros in 2020.
Information on telecommunications
licenses at December 31, 2022
Orange’s principal commitments under licenses awarded are
disclosed in Note 16.
|
|
|
|
|
(in millions of euros)
|
Gross value
|
Net book value
|
Residual useful life(1)
|
|
5G (2 licenses)
|
876
|
754
|
12.8 and 14.4
|
|
LTE (5 licenses)
|
2,187
|
1,356
|
8.8 to 14.4
|
|
UMTS (3 licenses)
|
342
|
155
|
7.4 to 13.9
|
|
GSM (2 licenses)
|
208
|
171
|
8.3 and 13.9
|
|
France
|
3,613
|
2,436
|
|
|
5G (4 licenses)
|
1,041
|
956
|
8.0 and 18.7
|
|
LTE (3 licenses)
|
545
|
279
|
8.0 to 8.3
|
|
GSM (2 licenses)
|
285
|
98
|
9.0
|
|
Spain
|
1,871
|
1,333
|
|
|
LTE (6 licenses)
|
1,200
|
459
|
4.7 to 15
|
|
UMTS (1 license)
|
76
|
33
|
6.6
|
|
Poland
|
1,276
|
492
|
|
|
LTE (2 license)
|
543
|
429
|
9.0 and 11.0
|
|
UMTS (1 license)
|
103
|
27
|
9.0
|
|
GSM (2 licenses)
|
291
|
67
|
9.0
|
|
Egypt
|
937
|
523
|
|
|
LTE (1 license)
|
59
|
40
|
13.0
|
|
UMTS (1 license)
|
28
|
9
|
10.0
|
|
GSM (1 license)
|
725
|
135
|
10.0
|
|
Morocco
|
812
|
184
|
|
|
5G (1 license)
|
319
|
319
|
25.0
|
|
LTE (1 license)
|
184
|
77
|
6.3
|
|
UMTS (1 license)
|
100
|
47
|
8.0
|
|
GSM (1 license)
|
292
|
91
|
6.3
|
|
Romania
|
895
|
534
|
|
|
5G (1 license)
|
66
|
66
|
25.0
|
|
LTE (1 license)
|
94
|
48
|
17.4
|
|
UMTS (3 licenses)
|
151
|
66
|
12.2 à 20.3
|
|
GSM (1 license)
|
203
|
78
|
16.3
|
|
Jordan
|
514
|
258
|
|
|
5G (2 licenses)
|
236
|
230
|
17.3 to 19.7
|
|
LTE (2 licenses)
|
140
|
74
|
4.4 and 10.9
|
|
Belgium
|
376
|
304
|
|
|
5G (3 licenses)
|
54
|
51
|
2.7 to 20.3
|
|
LTE (3 licenses)
|
76
|
31
|
2.7 to 6
|
|
UMTS (1 license)
|
46
|
8
|
3.7
|
|
GSM (1 license)
|
66
|
9
|
3.0
|
|
Slovensko
|
242
|
99
|
|
|
Other
|
2,152
|
706
|
|
|
Total
|
12,688
|
6,869
|
|
(1)
In number of years, at December 31, 2022.
Accounting policies
Intangible assets mainly
consist of acquired brands, acquired customer bases, telecommunications licenses and software, as well as
operating rights granted under certain concession agreement.
Intangible assets are
initially recognized at acquisition or production cost. The payments indexed to revenue, especially for some
telecommunications licenses, are expensed in the relevant periods.
The operating rights granted
under certain concession arrangements are recognized in other intangible assets and correspond to the right to
charge users of the public service (see Note 4.1).
8.5
Property,
plant and equipment
|
|
|
|
| |
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
|
|
|
(in millions of euros)
|
Gross value
|
Accumulated depreciation and amortization
|
Accumulated impairment
|
Net book value
|
Net book value
|
Net book value
|
|
Networks and devices
|
99,243
|
(70,757)
|
(398)
|
28,088
|
27,155
|
25,825
|
|
Land and buildings
|
8,156
|
(5,624)
|
(233)
|
2,299
|
2,117
|
2,018
|
|
IT equipment
|
3,943
|
(3,149)
|
(1)
|
793
|
784
|
801
|
|
Other property, plant and equipment
|
1,731
|
(1,265)
|
(6)
|
460
|
428
|
431
|
|
Total property, plant and equipment
|
113,073
|
(80,795)
|
(639)
|
31,640
|
30,484
|
29,075
|
Networks and devices are broken down as follows:
|
Fixed access networks |
|
Mobile access networks |
|
Core & Transmission networks |
|
Customer Devices & Equipment |
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net book value of property, plant and equipment - in the opening balance
|
30,484
|
29,075
|
28,423
|
|
Acquisitions of property, plant and equipment
|
6,329
|
5,947
|
5,848
|
|
o/w financed assets
|
229
|
40
|
241
|
|
Impact of changes in the scope of consolidation (1)
|
262
|
130
|
0
|
|
Disposals and retirements
|
(181)
|
(102)
|
(154)
|
|
Depreciation and amortization (2)
|
(4,725)
|
(4,796)
|
(4,880)
|
|
o/w fixed assets
|
(4,618)
|
(4,712)
|
(4,825)
|
|
o/w financed assets
|
(107)
|
(84)
|
(55)
|
|
Impairment
|
(23)
|
(5)
|
(6)
|
|
Translation adjustment
|
(291)
|
129
|
(319)
|
|
Reclassifications and other items (3)
|
(216)
|
105
|
164
|
|
Net book value of property, plant and equipment - in the closing
balance
|
31,640
|
30,484
|
29,075
|
(1)
In 2022, includes 261 million euros for the purchase
price allocation of Telekom Romania Communications (see Note 3.2)
Mainly
related, in 2021, to the effects of the acquisition of Telekom Romania Communications and the loss of sole control
over the FiberCo in Poland (see Note 3.2).
(2)
In 2022, includes the effect of the extension of the
amortization period of the copper network in France, resulting in a decrease in depreciation and amortization of
135 million euros.
(3)
In 2022, mainly includes the effect of the increase in
discount rates on dismantling assets (see Note 8.7).
Financed assets
Financed assets include at December 31, 2022 the set-up boxes in
France financed by an intermediary bank: they meet the standard criterion of a tangible asset according to IAS 16.
The associated payables to these financed assets are presented in financial liabilities and are included in the
definition of the net financial debt (see Note 13.3)
Internal costs capitalized as property,
plant and equipment
Internal costs capitalized as property, plant and equipment mainly
include labor expenses and amount to 400 million euros in 2022, 450 million euros in 2021 and
462 million euros in 2020.
Accounting policies
Property, plant and equipment
is made up of tangible fixed assets and financed assets. It mainly comprises network facilities and equipment.
The gross value of property,
plant and equipment is made up of its acquisition or production cost, which includes study and construction fees
as well as enhancement costs that increase the capacity of equipment and facilities. Maintenance and repair
costs are expensed as incurred, except where they serve to increase the asset’s productivity or extend its
useful life.
The cost of property, plant
and equipment also includes the estimated cost of dismantling and removing the fixed asset and restoring the
site where it was located under the obligation incurred by the Group.
The roll-out of assets by
stage, particularly network assets, in the Group’s assessment, does not generally require a substantial
period of preparation. As a result, the Group does not generally capitalize the interest expense incurred during
the construction and acquisition phase for its property, plant and equipment and intangible assets.
In France, the regulatory
framework governing the fiber optic network roll-out (Fiber To The Home - FTTH) organizes the access by
commercial operators to the last mile of networks rolled out by another operator on a co-funding basis (ab
initio or a posteriori) or through a line access. The sharing of rights and obligations between the
various operators co-financing the last mile of networks is classified as a joint operation in accordance with
IFRS 11 "Partnerships": Orange only recognizes in its assets the portions (built or acquired) in networks
that it has co-financed or built.
The Group has entered into
network sharing arrangements with other mobile operators on a reciprocal basis, which may cover passive
infrastructure sharing, active network and even spectrum equipment.
8.6
Fixed
assets payables
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Fixed assets payable - in the opening balance
|
4,481
|
4,640
|
3,665
|
|
Business related variations
|
124
|
(206)
|
1,002
|
|
o/w telecommunication licences payable(1)
|
51
|
143
|
618
|
|
Changes in the scope of consolidation(2)
|
(0)
|
(199)
|
(0)
|
|
Translation adjustment
|
(54)
|
31
|
(50)
|
|
Reclassifications and other items(3)
|
30
|
216
|
23
|
|
Fixed assets payable - in the closing balance
|
4,581
|
4,481
|
4,640
|
|
o/w long-term fixed assets payable
|
1,480
|
1,370
|
1,291
|
|
o/w short-term fixed assets payable
|
3,101
|
3,111
|
3,349
|
(1)
In 2022, includes 241 million euros relating to the acquisition
of the 5G license in Romania, and (153) million euros paid out for 5G licenses in France. In 2021, included
192 million euros relating to the acquisition of 5G in Spain and (150) million euros paid out for the 5G
license in France. Included, in 2020, 725 million euros for the acquisition of the 5G license in France.
(2)
Included (241) million euros in 2021 resulting from the loss of
exclusive control of Orange Concessions (see Note 3.2).
(3)
In 2021, mainly included incentive bonus fees on penetration
rates and business continuity payable by the Public Initiative Networks to the local authorities for
195 million euros.
Accounting policies
These payables are generated
from trading activities. The payment terms may be over several years in the case of infrastructure roll-out and
license acquisition. Payables due in more than 12 months are presented in non-current items. Trade payables
without specified interest rates are measured at par value if the interest component is negligible.
Interest-bearing trade payables are recognized at amortized cost.
Trade payables also include
payables that the supplier may have disposed of, with or without notifying financial institutions, in a direct
or reverse factoring arrangement (see Note 5.6).
Firm commitments to purchase
fixed assets are presented as unrecognized contractual commitments (see Note 16), net of any down payments which
are recorded as down payments on fixed assets.
8.7
Dismantling provisions
Asset dismantling obligations mainly relate to the restoration of
mobile telephony antenna sites, the treatment of telephone poles, management of waste electrical and electronic
equipment and the dismantling of telephone booths.
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Dismantling provisions - in the opening balance
|
897
|
901
|
827
|
|
Provision reversal with impact on income statement
|
(0)
|
(0)
|
(0)
|
|
Discounting with impact on income statement
|
36
|
11
|
2
|
|
Utilizations without impact on income statement
|
(20)
|
(18)
|
(12)
|
|
Changes in provision with impact on assets (1)
|
(221)
|
3
|
79
|
|
Changes in the scope of consolidation
|
-
|
-
|
-
|
|
Translation adjustment
|
(5)
|
(0)
|
(10)
|
|
Reclassifications and other items
|
10
|
-
|
16
|
|
Dismantling provisions - in the closing balance
|
696
|
897
|
901
|
|
o/w non-current provisions
|
670
|
876
|
885
|
|
o/w current provisions
|
26
|
21
|
16
|
(1)
Mainly includes the effect of the increase in discount rates in
2022.
Accounting policies
The Group has an obligation
to dismantle installed technical equipment and restore the technical sites it occupies.
When the obligation arises, a
dismantling asset is recognized against a dismantling provision.
The provision is based on
dismantling costs (on a per-unit basis for telephone poles, devices and telephone booths, and on a per-site
basis for mobile antennas) incurred by the Group to meet its environmental commitments over the asset
dismantling and site restoration planning. The provision is assessed on the basis of the identified costs for
the current fiscal year, extrapolated for future years using the best estimate that will allow the obligation to
be settled. This estimate is reviewed annually and the provision is adjusted where necessary against the
dismantling asset recognized and the underlying assets, if any. The provision is discounted at a rate set by
geographical area corresponding to the average risk-free rate of a 15-year government bond.
When the obligation is
settled, the provision is reversed against the net carrying value of the dismantling asset and the net carrying
value of the underlying assets if the dismantling asset is less than the financial provision reversal.
Note 9
Lease agreements
In the course of its activities, the Group regularly enters into
leases as a lessee. These leases are divided between the following asset categories:
−
Land and buildings;
−
Networks and devices;
−
IT equipment;
−
Other.
Accounting policies
The mandatory IFRS 16
"Leases," has been applied within the Group since January 1, 2019.
IFRS 16 defines a
lease as a contract that conveys to the lessee the right to control the use of an identified asset. All leases
are recognized in the balance sheet as an asset reflecting the right to use the leased assets and a
corresponding liability reflecting the related lease obligations (see Notes 9.1 and 9.2). In the income
statement, amortization of right-of-use assets (see Note 9.1) is presented separately from interest on
lease liabilities. In the statement of cash flows, cash outflows relating to interest expenses impact cash flows
provided by operating activities, while principal repayments on lease liabilities impact cash flows related to
financing activities.
For the lessor, assets
subject to leases must be presented in the balance sheet according to the nature of the asset and the associated
lease revenues as income on a straight-line basis over the lease term.
When the Group carries out a
transaction categorized as sale and leaseback in accordance with IFRS 16, a right-of-use asset is
recognized in proportion to the previous carrying value of the asset corresponding to the right-of-use asset
retained to offset a lease liability. Gains (losses) on disposal of fixed assets are recognized in the income
statement in proportion to the rights actually transferred to the buyer-lessor. The adjustment of the gains
(losses) on disposal recognized in the income statement for the share on which the Group retains its user rights
via the lease corresponds to the difference between the right-of-use asset and the lease liability recognized in
the balance sheet.
Finally, the Group applies
the two exemptions provided for in IFRS 16, i.e. leases with a term of 12 months or less that are not
automatically renewable and those where the replacement value of the underlying asset is less than approximately
5,000 euros. Leases covered by either of these two exemptions are presented in off-balance sheet
commitments and an expense is recognized in "external purchases" in the income statement.
The Group classifies as a
lease a contract that confers to the lessee the right to control the use of an identified asset for a given
period, including a service contract if it contains a lease component.
The Group has defined 4 major
categories of leases:
−
Land and buildings: these leases mainly concern commercial (point of sale) or service activity (offices
and headquarters) leases, as well as leases of technical buildings not owned by the Group. Real-estate leases
entered into in France generally have long terms (nine-year commercial leases with early termination options
after three and six years, known as "3/6/9 leases") (see Note 9.2). However, depending on the
geographical location of the leases, their legal term may vary and the Group may be required to adopt a specific
enforceable period taking into account the local legal and economic environment;
−
Networks and devices: the Group is required to lease a certain number of assets in connection with its
mobile activities. This is notably the case for land for antenna installation, mobile sites leased from
third-party operators and certain "TowerCos" contracts (companies operating telecom masts). Leases are also
entered into as part of fixed-line network activities. These leases mainly concern access to the local loop
where the Orange group is a market challenger (full or partial unbundling), as well as the lease of land
transmission cables;
−
IT equipment: this asset category primarily comprises leases for servers and hosting space in data
centers;
−
Other: this asset category primarily comprises leases for vehicles and technical equipment.
9.1
Right-of-use assets
|
|
|
|
| |
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
(in millions of euros)
|
Gross value
|
Accumulated depreciation and amortization
|
Accumulated impairment
|
Net book value
|
Net book value
|
Net book value
|
|
Land and buildings
|
8,134
|
(3,090)
|
(377)
|
4,667
|
4,930
|
4,865
|
|
Networks and devices(1)
|
4,241
|
(1,192)
|
-
|
3,049
|
2,516
|
1,931
|
|
IT equipment
|
189
|
(130)
|
(0)
|
59
|
55
|
30
|
|
Other
|
354
|
(193)
|
(0)
|
161
|
201
|
184
|
|
Total right-of-use assets
|
12,918
|
(4,605)
|
(377)
|
7,936
|
7,702
|
7,009
|
(1)
The increase in right-of-use assets includes the effect
of the development of a secondary market for co-financed and leased lines.
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net book value of right-of-use assets - in the opening balance
|
7,702
|
7,009
|
6,700
|
|
Increase (new right-of-use assets)(1)
|
1,930
|
2,172
|
1,529
|
|
Impact of changes in the scope of consolidation
|
-
|
34
|
1
|
|
Depreciation and amortization
|
(1,507)
|
(1,481)
|
(1,384)
|
|
Impairment(2)
|
(54)
|
(91)
|
(57)
|
|
Impact of changes in the assessments
|
(49)
|
74
|
331
|
|
Translation adjustment
|
(35)
|
46
|
(104)
|
|
Reclassifications and other items
|
(52)
|
(62)
|
(7)
|
|
Net book value of right-of-use assets - in the closing balance
|
7,936
|
7,702
|
7,009
|
(1)
In 2021, included the right-of-use assets related to the
new headquarters of the Orange group (Bridge) in France for 294 million euros.
(2)
Impairment losses on right-of-use assets mainly concern
real estate leases classified as onerous contracts.
Depreciation and amortization of
right-of-use assets
In 2022, the rental expense recognized in external purchases in the
income statement amounts to (134) million euros, compared with (147) million euros in 2021 and (151) million euros
in 2020 (see Note 5.1). It includes lease payments on contracts of 12 months or less which are not
automatically renewable, contracts where the new value of the underlying asset is less than 5,000 euros, and
variable lease payments which were not taken into account in the measurement of the lease liability.
Accounting policies
A right-of-use asset is
recognized in assets, with a corresponding lease liability (see Note 9.2). This right-of-use asset is equal to
the amount of the lease liability, plus any direct costs incurred under certain leases, such as fees, lease
negotiation expenses or administration costs, and less rent-free period liabilities and lessor financial
contributions.
This right-of-use asset is
depreciated in the income statement on a straight-line basis over the lease term chosen by the Group, in
accordance with the lease terms defined in IFRS 16.
Work performed by the lessee
and modifications to the leased asset, as well as guarantee deposits, are not components of the right-of-use
asset and are recognized in accordance with other standards.
9.2
Lease
liabilities
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Lease liabilities - in the opening balance
|
8,065
|
7,371
|
6,932
|
|
Increase with counterpart in right-of-use
|
1,915
|
2,158
|
1,582
|
|
Impact of changes in the scope of consolidation
|
1
|
34
|
1
|
|
Decrease in lease liabilities following rental payments
|
(1,514)
|
(1,624)
|
(1,400)
|
|
Impact of changes in the assessments
|
(43)
|
74
|
326
|
|
Translation adjustment
|
(29)
|
47
|
(96)
|
|
Reclassifications and other items
|
16
|
4
|
26
|
|
Lease liabilities - in the closing balance
|
8,410
|
8,065
|
7,371
|
|
o/w non-current lease liabilities
|
6,901
|
6,696
|
5,875
|
|
o/w current lease liabilities
|
1,509
|
1,369
|
1,496
|
The following table details the undiscounted future cash flows of
lease liabilities as known at December 31, 2022:
|
(in millions of euros)
|
Total
|
2023
|
2024
|
2025
|
2026
|
2027
|
2028 and beyond
|
|
Undiscounted lease liabilities
|
9,580
|
1,646
|
1,381
|
1,204
|
1,028
|
944
|
3,377
|
Accounting policies
The Group recognizes a
liability (i.e. a lease liability) at the date the underlying asset is made available. This lease liability is
equal to the present value of fixed and in-substance fixed payments not paid at that date, plus any amounts that
Orange is reasonably certain to pay at the end of the lease, such as the exercise price of a purchase option
(where it is reasonably certain to be exercised), or penalties payable to the lessor for terminating the lease
(where termination is reasonably certain).
The Group only takes the
lease component of the contract into account when measuring the lease liability. For certain asset classes where
leases include both service and lease components, the Group may recognize a single contract, classified as a
lease (i.e. without distinguishing between the service and lease components).
Orange systematically
determines the lease term as the period during which leases cannot be terminated, plus periods covered by any
extension options that the lessee is reasonably certain to exercise and any termination options that the lessee
is reasonably certain not to exercise. In the case of "3/6/9" leases in France, the term adopted is assessed on
a contract-by-contract basis.
The term is also defined
taking into account any laws and practices specific to each jurisdiction or business sector regarding firm lease
commitment terms granted by lessors. The Group nonetheless assesses the enforceable term, based on the
circumstances of each lease, taking into account certain indicators such as the existence of significant
penalties in the event of termination by the lessee. To determine the length of this enforceable period, the
Group considers the economic importance of the leased asset and the assumptions made in its strategic plan.
When non-removable leasehold
improvements have been made to leased assets, the Group assesses, on a case-by-case basis, whether these
improvements provide an economic benefit when determining the enforceable term of the lease.
When a lease includes a
purchase option, the Group considers the enforceable term to be equal to the useful life of the underlying asset
where the Group is reasonably certain to exercise the purchase option.
For each lease, the discount
rate used is determined based on the yield on government bonds in the lessee country, taking into account the
term and currency of the lease, plus the Group’s credit spread.
After the lease commencement
date, the amount of the lease liability may be reassessed to reflect changes introduced by the following main
cases:
−
a change in term resulting from a contract amendment or a change in the assessment of the reasonable
certainty that a renewal option will be exercised or a termination option will not be exercised;
−
a change in the amount of lease payments, for example following the application of a new index or rate in
the case of variable payments;
−
a change in the assessment of whether a purchase option will be exercised;
−
any other contractual change, for example a change to the scope of the lease or its underlying asset.
Note 10
Taxes
10.1 Operating taxes
and levies
Although comprising a directly identifiable counterpart, the periodic
spectrum fees are presented within the operating taxes and levies payables as they are set by and paid to States
and local authorities.
10.1.1 Operating taxes and levies
recognized in the income statement
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Territorial Economic Contribution, IFER and similar taxes(1)
|
(642)
|
(652)
|
(795)
|
|
Spectrum fees
|
(373)
|
(360)
|
(341)
|
|
Levies on telecommunication services
|
(333)
|
(329)
|
(319)
|
|
Other operating taxes and levies
|
(534)
|
(586)
|
(469)
|
|
Total
|
(1,882)
|
(1,926)
|
(1,924)
|
(1)
In 2021, included a reduction in the
territorial economic contribution (cotisation économique territoriale - CET) of 139 million
euros. This decrease is explained by the reduction in the applicable rate of the business value added tax
(cotisation sur la valeur ajoutée - CVAE), which is the main component of the CET.
The 2021 French Finance Act enacted the reduction of the applicable
rate of the CVAE in France, effective January 1, 2021. The applicable rate for this tax
was reduced from 1.5% to 0.75%.
The breakdown of operating taxes and levies per geographical area is
as follows:
10.1.2 Operating taxes and levies in the
statement of financial position
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Value added tax (VAT)
|
1,114
|
1,025
|
966
|
|
Other operating taxes and levies
|
151
|
138
|
138
|
|
Operating taxes and levies - receivables
|
1,265
|
1,163
|
1,104
|
|
Value added tax (VAT)
|
(687)
|
(682)
|
(652)
|
|
Territorial Economic Contribution, IFER and similar taxes
|
(96)
|
(89)
|
(87)
|
|
Spectrum fees
|
(19)
|
(18)
|
(21)
|
|
Levies on telecommunication services
|
(107)
|
(143)
|
(128)
|
|
Other operating taxes and levies
|
(496)
|
(504)
|
(391)
|
|
Operating taxes and levies - payables
|
(1,405)
|
(1,436)
|
(1,279)
|
|
Operating taxes and levies - net
|
(140)
|
(273)
|
(175)
|
Changes in operating taxes and levies
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net tax liabilities and operating taxes and levies - in the opening balance
|
(273)
|
(175)
|
(197)
|
|
Operating taxes and levies recognized in profit or loss
|
(1,882)
|
(1,926)
|
(1,924)
|
|
Operating taxes and levies paid(1)
|
1,906
|
1,914
|
1,929
|
|
Changes in the scope of consolidation
|
-
|
(67)
|
-
|
|
Translation adjustment
|
42
|
(19)
|
20
|
|
Reclassifications and other items
|
68
|
(1)
|
(3)
|
|
Net tax liabilities and operating taxes and levies - in the closing
balance
|
(140)
|
(273)
|
(175)
|
(1)
In 2021, included the reclassification in the
consolidated statement of cash flows of 34 million euros as investing activities corresponding to the VAT
disbursement by Orange Polska in connection with the loss of exclusive control over the FiberCo in Poland (see
Note 3.2).
Accounting policies
Value Added Tax (VAT)
receivables and payables correspond to the VAT collected or deductible from various states. Collections and
remittances to states have no impact on the income statement.
In the normal course of
business, the Group regularly deals with differences of interpretation of tax law with the tax authorities,
which can lead to tax reassessments or tax disputes.
Operating taxes and levies
are measured by the Group at the amount expected to be paid or recovered from the tax authorities of each
country, based on its interpretation with regard to the application of tax legislation. The Group calculates its
tax assets and liabilities (including provisions) based on the technical merits of the positions it defends
versus the tax authorities.
10.2 Income taxes
10.2.1 Income taxes
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Orange SA tax group
|
(541)
|
3
|
1,556
|
| |
• Current tax
|
(417)
|
(129)
|
1,801
|
| |
o/w tax income related to the 2005-2006 tax dispute
|
-
|
-
|
2,246
|
| |
o/w current tax excluding the tax income related to the 2005-2006 tax dispute
|
(417)
|
(129)
|
(444)
|
| |
• Deferred tax
|
(124)
|
133
|
(246)
|
|
Spanish tax group
|
50
|
(115)
|
(146)
|
| |
• Current tax
|
0
|
(0)
|
(40)
|
| |
• Deferred tax
|
50
|
(115)
|
(106)
|
|
Africa & Middle-East
|
(528)
|
(431)
|
(341)
|
| |
• Current tax
|
(536)
|
(420)
|
(343)
|
| |
• Deferred tax
|
8
|
(11)
|
2
|
|
United Kingdom
|
(74)
|
(264)
|
(137)
|
| |
• Current tax
|
(75)
|
(76)
|
(75)
|
| |
• Deferred tax
|
1
|
(188)
|
(63)
|
|
Other subsidiaries(1)
|
(172)
|
(156)
|
(83)
|
| |
• Current tax
|
(140)
|
(125)
|
(99)
|
| |
• Deferred tax
|
(32)
|
(31)
|
16
|
|
Total Income taxes
|
(1,265)
|
(962)
|
848
|
| |
Current tax
|
(1,168)
|
(750)
|
1,245
|
| |
o/w tax income related to the 2005-2006 tax dispute
|
-
|
-
|
2,246
|
| |
o/w current tax excluding the tax income related to the 2005-2006 tax dispute
|
(1,168)
|
(750)
|
(1,001)
|
| |
Deferred tax
|
(97)
|
(212)
|
(396)
|
(1) In 2021, included a tax expense of (74) million euros in Poland related notably to the gain arising from
the loss of sole control over the FiberCo (see Note 3.2).
The breakdown of current tax by geographical area or by tax group
(excluding tax income related to the 2005-2006 tax dispute) is as follows:
(in millions of euros)
|
Orange SA tax group |
|
Africa & Middle-East |
|
United Kingdom |
|
Spanish tax group |
|
Other subsidiaries |
Orange SA tax group
Current tax expense
The current tax expense reflects the requirement to pay income tax
calculated on the basis of taxable income.
Over the last three years, the income tax rate applicable in France
has gradually decreased, from 32.02% in 2020 to 28.41% in 2021, and then to 25.83% in 2022.
The reduction in the corporate tax rate in France resulted in a
reduction in the current tax expense of 35 million euros in 2022, 61 million euros in 2021 and 36
million euros in 2020.
In 2021, the current tax expense included tax income recorded
resulting from the reassessment of an income tax charge booked in periods prior to those presented in the amount
of 376 million euros.
In 2020, the current tax expense included tax income of 2,246 million
euros, as a result of the decision issued by the Conseil d'État on November 13, 2020 in favor of
Orange SA on a dispute in respect of the years 2005-2006.
Deferred tax expense
Deferred taxes are recorded at the tax rate expected at the time of
their reversal, i.e. 25.83%.
In 2021, the deferred tax expense included deferred tax income of 316
million euros related to the recognition of an employee benefit liability for the French part-time for seniors
plans (Temps Partiel Seniors - TPS).
Spanish tax group
Current tax expense
The corporate tax rate applicable is 25% for all fiscal years
presented. The current income tax expense mainly represents the obligation to pay a minimum level of tax
calculated on the basis of 75% of taxable income due to the 25% limit on the use of available tax loss
carryforwards.
In 2022, as in 2021, the Spanish tax group was in deficit, which
explains the absence of current tax expense recognized for the fiscal year.
Deferred tax expense
In 2022, a deferred tax income of 53 million euros was recognized to
reflect the effect of the change in business projections in the recoverability of deferred tax assets.
To reflect the negative impact of the unfavorable developments in
business plans on the recoverable amount of deferred tax assets, a deferred tax expense was recognized for (162)
million euros in 2021 and (102) million euros in 2020.
Africa & Middle-East
The main contributors to the income tax
expense are Guinea, Côte d’Ivoire, Mali and Senegal:
−
in Guinea, the corporate tax rate is 35% and the current tax expense amounts to (94) million euros in 2022,
(63) million euros in 2021 and (47) million euros in 2020;
−
in Côte d’Ivoire, the corporate tax rate is 30% and the current tax expense amounts to (86)
million euros in 2022, (91) million euros in 2021 and (77) million euros in 2020;
−
in Mali, the corporate tax rate is 30% and the current tax expense amounts to (64) million euros in 2022,
(67) million euros in 2021 and (62) million euros in 2020;
−
in Senegal, the corporate tax rate is 30% and the current tax expense amounts to (55) million euros in
2022, (53) million euros in 2021 and (54) million euros in 2020.
United Kingdom
Current tax expense
The current income tax expense primarily reflects the taxation of
activities related to Orange’s brand activities at a tax rate of 19%.
Deferred tax expense
In 2021, a corporate tax rate increase was passed which will rise to
25% from 2023 (it currently stands at 19%). The 2021 deferred tax expense therefore included an increase of (188)
million euros in deferred tax liabilities recognized on the Orange brand.
In 2020, the deferred tax expense included an increase of (63)
million euros in deferred tax liabilities recognized in the United Kingdom on the Orange brand. The British
government canceled the tax rate reduction from 19% to 17% in 2020, provided for by the 2016 Finance Act, thus
maintaining the rate at 19%. The deferred tax liabilities on the brand were recorded as of December 31, 2020 at a
19% tax rate.
Group tax proof
|
(in millions of euros)
|
Note
|
2022
|
2021
|
2020
|
|
Profit before tax
|
|
3,882
|
1,740
|
4,207
|
|
Statutory tax rate in France
|
|
25.83 %
|
28.41 %
|
32.02 %
|
|
Theoretical income tax
|
|
(1,003)
|
(494)
|
(1,347)
|
|
Reconciling items:
|
|
|
|
|
| |
Tax income related to the 2005-2006 tax dispute(1)
|
|
-
|
-
|
2,246
|
| |
Impairment of goodwill(2)
|
7.1
|
(211)
|
(1,052)
|
-
|
| |
Impact related to the loss of sole control over Orange Concessions
|
|
-
|
557
|
-
|
| |
Share of profits (losses) of associates and joint ventures
|
|
(0)
|
1
|
(1)
|
| |
Adjustment of prior-year taxes
|
|
(13)
|
(23)
|
1
|
| |
Recognition / (derecognition) of deferred tax assets
|
|
83
|
(149)
|
(98)
|
| |
Difference in tax rates(3)
|
|
10
|
85
|
157
|
| |
Change in applicable tax rates(4)
|
|
-
|
(235)
|
(92)
|
| |
Other reconciling items(5)
|
|
(130)
|
348
|
(18)
|
|
Effective income tax
|
|
(1,265)
|
(962)
|
848
|
|
Effective tax rate (ETR)
|
|
32.59 %
|
55.31 %
|
(20.17) %
|
(1) Relates to the tax income of 2,246 million euros (including interests) recognized in 2020 following the
favorable decision handed down on November 13, 2020 by the Conseil d'État on the tax dispute
relating to fiscal years 2005-2006. Excluding this effect, the Group ETR was 33.2% in 2020.
(2) Reconciliation effect calculated based on the tax rate applicable to the parent company of the Group.
The difference in tax rates between the parent company and the subsidiary locally is presented below in
"Difference in tax rates." In 2022, impairment losses recorded on goodwill generates a reconciliation effect at
the Group tax rate of (211) million euros. Excluding this effect, the Group ETR is 26.9% in 2022. In 2021, the
impairment loss of (3,702) million euros recorded on goodwill in Spain generated a reconciliation effect at the
Group tax rate of (1,052) million euros. Excluding this effect, the Group ETR was 17.7% in 2021.
(3) The Group is present in jurisdictions in which tax rates are different from the French tax rate, mainly
the United Kingdom (tax rate of 19%), Romania (tax rate of 16%), Poland (tax rate of 19%) and Guinea (tax rate of
35%).
(4) Takes into account the remeasurement of deferred tax following tax legislation introducing changes in
tax rates, as well as the impact of recognizing deferred tax in the period at tax rates different from the rate
applicable in the current fiscal year.
(5) In 2021, included a tax income recorded resulting from the reassessment of an income tax charge booked
in periods prior to those presented.
10.2.2 Income tax on other comprehensive
income
| |
2022
|
2021
|
2020
|
|
(in millions of euros)
|
Gross amount
|
Deferred tax
|
Gross amount
|
Deferred tax
|
Gross amount
|
Deferred tax
|
|
Actuarial gains and losses on post-employment benefits
|
176
|
(47)
|
59
|
(14)
|
(13)
|
1
|
|
Assets at fair value
|
(112)
|
-
|
11
|
-
|
94
|
-
|
|
Cash flow hedges
|
295
|
(70)
|
317
|
(84)
|
22
|
(10)
|
|
Translation adjustment
|
(374)
|
-
|
200
|
-
|
(414)
|
-
|
|
Other comprehensive income of associates and joint ventures
|
51
|
-
|
1
|
-
|
-
|
-
|
|
Total presented in other comprehensive income
|
37
|
(117)
|
587
|
(98)
|
(311)
|
(9)
|
10.2.3 Tax position in the statement of
financial position
| |
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
(in millions of euros)
|
Assets
|
Liabi-lities
|
Net
|
Assets
|
Liabi-lities
|
Net
|
Assets
|
Liabi-lities
|
Net
|
|
Orange SA tax group
|
|
|
|
|
|
|
|
|
|
| |
• Current tax
|
-
|
31
|
(31)
|
26
|
-
|
26
|
-
|
359
|
(359)
|
| |
• Deferred tax(1)
|
135
|
-
|
135
|
362
|
-
|
362
|
327
|
-
|
327
|
|
Spanish tax group
|
|
|
|
|
|
|
|
|
|
| |
• Current tax
|
1
|
-
|
1
|
13
|
-
|
13
|
12
|
-
|
12
|
| |
• Deferred tax(2)
|
-
|
161
|
(161)
|
-
|
211
|
(211)
|
-
|
95
|
(95)
|
|
Africa & Middle-East
|
|
|
|
|
|
|
|
|
|
| |
• Current tax
|
68
|
395
|
(327)
|
62
|
328
|
(266)
|
45
|
228
|
(183)
|
| |
• Deferred tax
|
128
|
58
|
70
|
127
|
93
|
34
|
103
|
55
|
48
|
|
United Kingdom
|
|
|
|
|
|
|
|
|
|
| |
• Current tax
|
2
|
-
|
2
|
-
|
5
|
(5)
|
-
|
4
|
(4)
|
| |
• Deferred tax(3)
|
-
|
786
|
(786)
|
-
|
787
|
(787)
|
-
|
600
|
(600)
|
|
Other subsidiaries
|
|
|
|
|
|
|
|
|
|
| |
• Current tax
|
77
|
112
|
(34)
|
80
|
92
|
(12)
|
70
|
82
|
(12)
|
| |
• Deferred tax
|
157
|
120
|
38
|
202
|
94
|
109
|
244
|
105
|
139
|
|
Total
|
|
|
|
|
|
|
|
|
|
| |
• Current tax
|
149
|
538
|
(389)
|
181
|
425
|
(244)
|
128
|
673
|
(545)
|
| |
• Deferred tax
|
421
|
1,124
|
(704)
|
692
|
1,185
|
(493)
|
674
|
855
|
(181)
|
(1) Mainly includes deferred tax assets on employee benefits.
(2) The recognized deferred tax
assets are offset by deferred tax liabilities on goodwill which is tax deductible.
(3) Mainly deferred tax liabilities on the Orange brand.
Change in net current tax
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net current tax assets/(liabilities) in the opening balance
|
(244)
|
(545)
|
(629)
|
|
Cash tax payments/(reimbursements)(1)(2)
|
1,022
|
1,028
|
(1,160)
|
|
Change in income statement(2)
|
(1,168)
|
(750)
|
1,245
|
|
Change in other comprehensive income
|
-
|
-
|
-
|
|
Change in retained earnings(3)
|
(2)
|
29
|
(2)
|
|
Changes in the scope of consolidation
|
(0)
|
1
|
(0)
|
|
Translation adjustment
|
2
|
(7)
|
4
|
|
Reclassification and other items
|
1
|
0
|
(4)
|
|
Net current tax assets/(liabilities) in the closing balance
|
(389)
|
(244)
|
(545)
|
(1) In 2022, includes a tax refund of 11 million euros related to the loss of sole control over the FiberCo
in Poland, reclassified in investing activities in the consolidated statement of cash flows.
(2) In 2021, included disbursements and tax expenses on gains arising from the loss of sole control over
Orange Concessions in France and FiberCo in Poland, in the amounts of 47 million euros and 27 million euros
respectively, reclassified in investing activities in the consolidated statement of cash flows.
In 2020, included a reimbursement and tax income of 2,246 million euros in respect
of the tax dispute for 2005-2006.
(3) Mainly corresponds to the tax effect of the remeasurement of the portion of subordinated notes
denominated in foreign currency and the tax effects of transaction costs and premium paid related to the
refinancing of subordinated notes.
Change in net deferred tax
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net deferred tax assets/(liabilities) in the opening balance
|
(493)
|
(181)
|
238
|
|
Change in income statement
|
(97)
|
(212)
|
(396)
|
|
Change in other comprehensive income
|
(117)
|
(98)
|
(9)
|
|
Change in retained earnings
|
-
|
5
|
-
|
|
Change in the scope of consolidation
|
(21)
|
(1)
|
(2)
|
|
Translation adjustment
|
25
|
(5)
|
(10)
|
|
Reclassification and other items
|
(0)
|
(1)
|
(2)
|
|
Net deferred tax assets/(liabilities) in the closing balance
|
(704)
|
(493)
|
(181)
|
Deferred tax assets and liabilities by type
| |
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
(in millions of euros)
|
Assets
|
Liabilities
|
Income state-ment
|
Assets
|
Liabilities
|
Income state-ment
|
Assets
|
Liabilities
|
Income state-ment
|
|
Provisions for employee benefit obligations
|
679
|
-
|
22
|
705
|
-
|
218
|
499
|
-
|
(154)
|
|
Fixed assets
|
465
|
1,481
|
(75)
|
528
|
1,476
|
(218)
|
552
|
1,275
|
(111)
|
|
Tax losses carryforward
|
3,935
|
-
|
20
|
3,958
|
-
|
37
|
3,887
|
-
|
8
|
|
Other temporary differences
|
2,658
|
3,168
|
(145)
|
2,673
|
2,960
|
(76)
|
2,690
|
2,821
|
(71)
|
|
Deferred tax
|
7,736
|
4,649
|
(178)
|
7,865
|
4,436
|
(38)
|
7,629
|
4,096
|
(327)
|
|
Depreciation of deferred tax assets
|
(3,791)
|
-
|
80
|
(3,922)
|
-
|
(174)
|
(3,714)
|
-
|
(69)
|
|
Netting
|
(3,525)
|
(3,525)
|
-
|
(3,251)
|
(3,251)
|
-
|
(3,241)
|
(3,241)
|
-
|
|
Total
|
421
|
1,124
|
(97)
|
692
|
1,185
|
(212)
|
674
|
855
|
(396)
|
At December 31, 2022, tax loss carryforwards mainly relates to Spain
and Belgium.
At December 31, 2022, the unrecognized deferred tax assets mainly
relate to Spain for 2.1 billion euros and Belgium (Belgian subsidiaries other than Orange Belgium) for 0.8 billion
euros, and mostly include tax losses that can be carried forward indefinitely. In Spain, tax loss carryforwards
for which a deferred tax asset has been recognized are expected to be fully utilized by 2027, unless affected by
changes in current tax rules and changes in business projections. The deferred tax assets recognized for Spain
amounted to 0.4 billion euros at December 31, 2022.
Most of the other tax loss carryforwards for which no deferred tax
assets have been recognized will expire beyond 2027.
10.3 Developments in
tax disputes and audits
Developments in tax disputes and
audits in France
Tax audits
Orange SA was the subject of several tax audits for the years
2017-2018 and 2019-2020, for which the tax adjustments notified to date total approximately 520 million euros
(including default penalties and interest). These adjustments mainly relate to the calculation of VAT on digital
offerings, tax on electronic communication services on these same digital offerings, research tax credit, tax on
television services, a portion of brand royalties paid by Orange SA to the UK company Orange Brand Services Ltd
for reasons similar to the adjustments notified during the previous audits, as well as the non-inclusion in the
tax base of income from the sale of equipment in 2019, and the reassessment of previous tax loss carryforwards
used for fiscal years 2017 and 2018.
All of these adjustments are being challenged by Orange SA. In
accordance with its accounting policies, the Group makes a best estimate of the risk of these adjustments based on
the technical merits of the positions defended, for which the effects are non-material.
Orange SA was subject to a tax audit covering fiscal years 2015 and
2016. A tax adjustment was issued in 2019 covering the calculation of brand royalties paid by Orange SA to the UK
company Orange Brand Services Ltd and deducted from its taxable income. The administration questions the inclusion
of revenue from the roaming contract with Free and revenue from the fixed PSTN business. This adjustment request
is being challenged by Orange SA, which has requested the opening of out-of-court proceedings and arbitration
between the French and UK tax authorities. The additional tax expense would effectively result in double taxation
that would fail to comply with the provisions of the Franco-British tax agreement and the European arbitration
agreement.
Tax disputes
There were no major developments in other tax disputes over the
period.
Developments in tax disputes and
audits in the rest of the Group
In the same way as other telecom operators, the Group regularly deals
with disagreements concerning the taxation of its network in various countries.
In the Democratic Republic of Congo, Orange was the subject of a tax
audit for the years 2017-2019, for which the tax adjustments notified to date total approximately 146 million
euros. These adjustments mainly relate to the recognition method for mobile prepaid revenue and the non-taxation
of electronic money flows in third-party accounts to be transferred to end customers. All of these adjustments are
being challenged by Orange RDC, which has appealed to the Finance Minister.
There were no major developments in other tax disputes and audits in
the rest of the Group over the period.
Accounting policies
Current income tax and
deferred tax are measured by the Group at the amount expected to be paid or recovered from the tax authorities
of each country, based on its interpretation with regard to the application of tax legislation. The Group
calculates the tax assets and liabilities recognized in the statement of financial position based on the
technical merits of the positions it defends versus that of the tax authorities.
Deferred taxes are recognized
for all temporary differences between the carrying values of assets and liabilities and their tax basis, as well
as for unused tax losses, using the liability method. Deferred tax assets are recognized only when their
recovery is considered probable.
A deferred tax liability is
recognized for all taxable temporary differences associated with investments in subsidiaries, interests in joint
ventures and associates, except to the extent that both of the following conditions are satisfied:
−
the Group is able to control the timing of the reversal of the temporary difference (e.g. the payment of
dividends); and
−
it is probable that the temporary difference will not reverse in the foreseeable future.
Accordingly, for fully
consolidated companies, a deferred tax liability is only recognized in the amount of the taxes payable on
planned dividend distributions by the Group.
Deferred tax assets and
liabilities are not discounted.
At each period end, the Group
reviews the recoverable amount of the deferred tax assets carried by certain tax entities with significant tax
losses carryforwards. The recoverability of the deferred tax assets is assessed in the light of the business
plans used for impairment testing. This plan may be adjusted for any tax specificities.
Deferred tax assets arising
on these tax losses are not recognized under certain circumstances specific to each company/tax consolidation
group concerned, and particularly where:
−
entities cannot assess the probability of the tax loss carryforwards being set off against future taxable
profits, due to the horizon for forecasts based on business plans used for impairment testing and uncertainties
as to the economic environment;
−
entities have not yet begun to use the tax loss carryforwards;
−
entities do not expect to use the losses within the timeframe allowed by tax regulations;
−
it is estimated that tax losses are uncertain to be used due to risks of differing interpretations with
regard to the application of tax legislation.
Note 11
Interests in associates and joint ventures
11.1 Change in
interests in associates and joint ventures
The table below shows the value of the main interests in associates
and joint ventures:
|
(in millions of euros)
|
|
|
|
|
|
|
|
Company
|
Main activity
|
Main co-shareholder
|
% interest
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Entities jointly controlled
|
|
|
|
|
|
|
Orange Concessions and its subsidiaries
|
Operation / maintenance related to Public Initiative Networks
|
Consortium HIN (50%)
|
50%
|
1,057
|
1,049
|
-
|
|
Swiatlowod Inwestycje Sp. z o.o. (FiberCo in Poland)
|
Construction / operation in Poland
|
APG Group (50%)
|
50%
|
306
|
298
|
-
|
|
Mauritius Telecom
|
Telecommunications
operator in
Mauritius
|
Mauritius government (34%)
|
40%
|
72
|
65
|
70
|
|
Other
|
|
|
|
17
|
10
|
10
|
|
Entities under significant influence
|
|
|
|
|
|
|
|
Orange Tunisie
|
Telecommunications
operator in
Tunisia
|
Investec (51%)
|
49%
|
17
|
2
|
-
|
|
Savoie connectée
|
Fiber infrastructure operator
|
Covage (70%)
|
30%
|
7
|
7
|
5
|
|
IRISnet
|
Telecommunications
operator in
Belgium
|
MRBC (54%)
|
22%
|
6
|
6
|
5
|
|
Odyssey Music Group (Deezer)(1)
|
Streaming platform
|
AI European Holdings SARL
|
NA
|
NA
|
-
|
5
|
|
Other
|
|
|
|
3
|
3
|
2
|
|
Total associates and joint ventures
|
|
|
|
1,486
|
1,440
|
98
|
(1) Following Deezer's initial public offering in 2022, the
Orange group no longer has any significant influence on the entity (see Note 3.2).
The change in interests in associates and joint ventures is as
follows:
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Interests in associates and joint ventures - in the opening balance
|
1,440
|
98
|
103
|
|
Dividends
|
(5)
|
(3)
|
(4)
|
|
Share of profits (losses)
|
(2)
|
3
|
(2)
|
|
Impairment loss
|
-
|
-
|
(0)
|
|
Change in components of other comprehensive income(1)
|
51
|
3
|
-
|
|
Changes in the scope of consolidation(2)
|
(3)
|
1,345
|
0
|
|
Change in capital
|
11
|
3
|
19
|
|
Translation adjustment
|
(2)
|
(4)
|
(12)
|
|
Reclassifications and other items
|
(3)
|
(6)
|
(6)
|
|
Interests in associates and joint ventures - in the closing balance
|
1,486
|
1,440
|
98
|
(1) In 2022, includes the effect of the change in fair value of
cash flow hedge derivatives, net of tax, recognized in other comprehensive income for 33 million euros of Orange
Concessions, and 18 million euros of the FiberCo in Poland.
(2) In 2021, changes
in
the scope of consolidation mainly concerned Orange Concessions
and the FiberCo in Poland, as described in Note 3.2.
The main transactions between the Group and companies consolidated
using the equity method are presented in Note 12.
11.2 Key figures from
associates and joint ventures
The key figures relating to Orange Concessions and Swiatlowod
Inwestycje Sp. z o.o. (FiberCo in Poland) are as follows (figures from financial statements of entities taken as a
whole):
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
| |
Orange Concessions
|
Swiatlowod Inwestycje Sp. z o.o.
|
Orange Concessions
|
Swiatlowod Inwestycje Sp. z o.o.
|
|
Assets
(1)
|
|
|
|
|
|
Non-current assets
|
3,699
|
372
|
3,029
|
168
|
|
Current assets
|
417
|
197
|
519
|
171
|
|
Total assets
|
4,115
|
569
|
3,548
|
339
|
|
Liabilities
|
|
|
|
|
|
Shareholder's equity
|
2,117
|
281
|
1,991
|
257
|
|
Non-current liabilities
|
1,494
|
198
|
1,054
|
45
|
|
Current liabilities
|
505
|
90
|
502
|
36
|
|
Total equity and liabilities
|
4,115
|
569
|
3,548
|
339
|
|
Income statement
|
|
|
|
|
|
Revenue
|
768
|
29
|
112
|
7
|
|
Operating income
|
(7)
|
(4)
|
(16)
|
(3)
|
|
Finance costs, net
|
(35)
|
(5)
|
(5)
|
16
|
|
Income tax
|
8
|
1
|
7
|
(3)
|
|
Net income
|
(35)
|
(8)
|
(14)
|
10
|
(1) Assets are recognized by Orange Concessions in accordance
with the provisions of IFRIC 12 "Service Concession Arrangements."
.
11.3 Contractual
commitments on interests in associates and joint ventures
Public Initiative Networks
commitments
As part of the roll-out of the high-speed and very high-speed
broadbrand network in France, the Group has entered into contracts via Public Initiative Networks (mainly public
service delegation contracts and public-private partnership contracts as well as public design, construction,
operation and maintenance contracts). On November 3, 2021, the Orange group sold 50% of the capital in Orange
Concessions to the consortium HIN, comprising La Banque des Territoires (Caisse des Dépôts), CNP
Assurances and EDF resulting in the loss of Orange's sole control over this entity and its subsidiaries. The
Orange Concessions group is jointly controlled with the consortium and is consolidated in the financial statements
of the Orange group according the equity method. The Group continues to have obligations under network
construction, concession and operation contracts in proportion to its shareholding,
i.e. 1,702 million euros at December 31, 2022.
Accounting policies
The carrying value of
interests in associates or joint ventures corresponds to the initial acquisition cost plus the share of net
income for the period. If an associate or joint venture incurs losses and the carrying value of the investment
is reduced to zero, the Group ceases to recognize the additional share of losses since it has no commitment
beyond its investment.
An impairment test is
performed at least annually and whenever there is objective evidence of impairment loss, such as a decrease in
the quoted price when the investee is listed, significant financial difficulty of the entity, observable data
indicating a measurable decrease in the estimated future cash flows, or information about significant changes
having an adverse effect on the entity.
An impairment loss is
recorded when the recoverable amount is lower than the carrying value, the recoverable amount being the higher
of the value in use and the fair value less transaction costs. The unit of account is the whole investment. Any
impairment loss is recognized in the "share of profits (losses) of associates and joint ventures". Impairment
losses can be reversed once the recoverable amount exceeds the carrying value.
Note 12
Related party transactions
Transactions with the French
State and affiliated bodies
The French State, either directly or through Bpifrance
Participations, is one of the main shareholders of Orange SA.
The communication services provided to the French State are awarded
as part of a competitive process arranged by each department according to the nature of the service. They have no
material impact on consolidated revenues.
Orange does not purchase goods or services from the French State
(either directly or via Bpifrance Participations), except for the use of spectrum resources. These resources are
allocated after a competitive process.
Transactions with the main associates and
joint ventures
The main transactions between the Group and its associates and joint
ventures are reflected as follows in Orange’s consolidated financial statements:
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Assets
|
|
|
|
|
Non-current financial assets
|
43
|
43
|
9
|
|
Trade receivables
|
254
|
417
|
39
|
|
o/w Orange Concessions(1)
|
209
|
372
|
-
|
|
Current financial assets
|
12
|
12
|
5
|
|
Other current assets
|
40
|
52
|
-
|
|
Liabilities
|
|
|
|
|
Current financial liabilities
|
0
|
0
|
0
|
|
Trade payables
|
11
|
14
|
5
|
|
Other current liabilities
|
2
|
1
|
0
|
|
Customer contract liabilities
|
154
|
153
|
3
|
|
o/w Swiatlowod Inwestycje Sp.z o.o.(2)
|
146
|
151
|
-
|
|
Income statement
|
|
|
|
|
Revenue
|
726
|
139
|
14
|
|
o/w Orange Concessions
|
705
|
124
|
-
|
|
Operating income
|
700
|
135
|
(7)
|
|
Finance costs, net
|
2
|
1
|
0
|
|
Net income
|
702
|
129
|
(7)
|
(1)
Transactions between the Group and Orange Concessions mainly
comprise Orange SA receivables from Orange Concessions in relation with fiber deployment and maintenance
activities operated by the Group.
(2)
Customer contract liabilities mainly correspond to the
recognition of deferred income by Orange Polska in connection with the prepayment of services provided to the
FiberCo in Poland.
Accounting policies
Orange group’s related
parties are listed below:
−
the Group’s key management personnel and their families (see Note 6.4);
−
the French State, and its departments in Bpifrance Participations and central State departments (see
Notes 10 and 15);
−
associates, joint ventures and companies in which the Group holds a significant stake (see Note 11).
Note 13
Financial assets, liab
ilities and financial results (telecom activities)
13.1 Financial assets
and liabilities of telecom activities
In order to improve the readability of financial statements and
distinguish the performance of telecom activities from the performance of the Mobile Financial Services
activities, the notes related to financial assets and liabilities as well as financial income or expenses are
split to respect these two business areas.
Note 13 presents the financial assets, liabilities and related gains
and losses specific to telecom activities and Note 17 concerns the activities of Mobile Financial Services with
regard to its assets and liabilities, with net financial income being not material.
The following table reconciles the contributive balances of assets
and liabilities for each of these two areas to the consolidated balance sheet (intra-group transactions between
telecom activities and Mobile Financial Services activities are not eliminated) with the consolidated statement of
financial position at December 31, 2022.
|
|
|
|
|
|
|
|
(in millions of euros)
|
Orange consolidated financial statements
|
o/w telecom activities
|
Note
|
o/w Mobile Finance Services
|
Note
|
o/w eliminations telecom activities / mobile finance
services
|
|
Non-current financial assets related to Mobile Financial Services activities
|
656
|
-
|
|
656
|
17.1.1
|
-
|
|
Non-current financial assets
|
977
|
1,004
|
13.7
|
-
|
|
(27) (1)
|
|
Non-current derivatives assets
|
1,458
|
1,342
|
13.8
|
116
|
17.1.3
|
-
|
|
Current financial assets related to Mobile Financial Services activities
|
2,742
|
-
|
|
2,747
|
17.1.1
|
(6)
|
|
Current financial assets
|
4,541
|
4,541
|
13.7
|
-
|
|
-
|
|
Current derivatives assets
|
112
|
112
|
13.8
|
-
|
17.1.3
|
-
|
|
Cash and cash equivalents
|
6,004
|
5,846
|
14.3
|
158
|
|
-
|
|
Non-current financial liabilities related to Mobile Financial Services activities
|
82
|
-
|
|
109
|
17.1.2
|
(27) (1)
|
|
Non-current financial liabilities
|
31,930
|
31,930
|
13.3
|
-
|
|
-
|
|
Non-current derivatives liabilities
|
397
|
335
|
13.8
|
62
|
17.1.3
|
-
|
|
Current financial liabilities related to Mobile Financial Services activities
|
3,034
|
-
|
|
3,034
|
17.1.2
|
-
|
|
Current financial liabilities
|
4,702
|
4,708
|
13.3
|
-
|
|
(6)
|
|
Current derivatives liabilities
|
51
|
51
|
13.8
|
-
|
17.1.3
|
-
|
(1)
Loan granted by Orange SA to Orange Bank.
13.2 Profits and
losses related to financial assets and liabilities
The cost of net financial debt consists of gains and losses related
to the components of net financial debt (described in Note 13.3) for the period.
Foreign exchange gains and losses mainly include:
−
The revaluation in euros of bonds denominated in foreign currencies (Note 13.5) as well as the
symmetrical revaluation of associated hedges as defined by IFRS 9 and the revaluation of bank loans.
−
The effects of the revaluation of trading derivatives held as economic hedges on notional amounts of
subordinated notes denominated in pounds sterling and recognized in equity at their historical value (see
Note 15.4).
Other net financial expenses mainly composed of interest on lease
liabilities for (145) million euros in 2022, (120) million euros in 2021 and (120) million euros in 2020 (see Note
9.2).
Finally, other comprehensive income includes the revaluation of
financial assets at fair value through other comprehensive income (Note 13.7) and cash flow hedges
(Note 13.8.2).
Other gains and losses related to financial assets and liabilities
are recognized in operating income (foreign exchange gains and losses on trade receivables, trade payables and the
associated hedge derivatives) in the amount of (31) million euros in 2022, (19) million euros in 2021 and 16
million euros in 2020.
|
|
|
|
|
|
|
|
| |
Finance costs, net
|
Other compre-hensive income
|
|
(in millions of euros)
|
Cost of gross financial debt (1)
|
Gains (losses) on assets contributing to net financial debt
|
Cost of net financial debt
|
Foreign exchange gains (losses)
|
Other net financial expenses
|
Finance costs, net
|
Reserves
|
|
2022
|
|
|
|
|
|
|
|
|
Financial assets
|
-
|
48
|
48
|
(38)
|
55
|
|
(110)
|
|
Financial liabilities
|
(1,023)
|
-
|
(1,023)
|
(196)
|
0
|
|
-
|
|
Lease liabilities
|
-
|
-
|
-
|
-
|
(145)
|
|
-
|
|
Derivatives
|
245
|
-
|
245
|
137
|
(0)
|
|
288
|
|
Discounting expense
|
-
|
-
|
-
|
-
|
(3)
|
|
-
|
|
Total
|
(779)
|
48
|
(731)
|
(97)
|
(92)
|
(920)
|
178
|
|
2021
|
|
|
|
|
|
|
|
|
Financial assets
|
-
|
(3)
|
(3)
|
47
|
75
|
|
11
|
|
Financial liabilities
|
(1,018)
|
-
|
(1,018)
|
(637)
|
(0)
|
|
-
|
|
Lease liabilities
|
-
|
-
|
-
|
-
|
(120)
|
|
-
|
|
Derivatives
|
188
|
-
|
188
|
655
|
0
|
|
322
|
|
Discounting expense
|
-
|
-
|
-
|
-
|
31
|
|
-
|
|
Total
|
(830)
|
(3)
|
(833)
|
65
|
(14)
|
(782)
|
332
|
|
2020
|
|
|
|
|
|
|
|
|
Financial assets
|
-
|
(1)
|
(1)
|
(151)
|
39
|
|
94
|
|
Financial liabilities
|
(1,152)
|
-
|
(1,152)
|
623
|
-
|
|
-
|
|
Lease liabilities
|
-
|
-
|
-
|
-
|
(120)
|
|
-
|
|
Derivatives
|
52
|
-
|
52
|
(576)
|
0
|
|
22
|
|
Discounting expense-
|
--
|
-
|
-
|
-
|
(29)
|
|
-
|
|
Total
|
(1,100)
|
(1)
|
(1,102)
|
(103)
|
(110)
|
(1,314)
|
116
|
(1) Includes interest on debts related to financed assets of (3) million euros in 2022 and (1) million euros
in 2021 and 2020.
13.3 Net financial
debt
The definition of net financial debt excludes the lease liabilities
included in the scope of IFRS 16 (see Note 9.2) and includes debt related to financed assets.
Net financial debt is one of the indicators of financial position
used by the Group. This aggregate, not defined by IFRS, may not be comparable to similarly titled indicators used
by other companies. It is provided as additional information only and should not be considered a substitute for an
analysis of all the Group’s assets and liabilities.
Net financial debt as defined and used by Orange does not take into
account Mobile Financial Services activities, for which this concept is not relevant.
It consists of (a) financial liabilities excluding operating payables
(translated into euros at the year-end closing rate) including derivative instruments (assets and liabilities),
less (b) cash collateral paid, cash, cash equivalents and financial assets at fair value.
Furthermore, financial instruments designated as cash flow hedges
included in net financial debt are set up to hedge items that are not included in net financial debt, such as
future cash flows. As a result, the portion relating to these unmatured hedging instruments recorded in other
comprehensive income is added to gross financial debt to offset this temporary difference.
|
(in millions of euros)
|
Note
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
TDIRA
|
13.4
|
638
|
636
|
636
|
|
Bonds
|
13.5
|
29,943
|
29,010
|
29,848
|
|
Bank loans and from development organizations and multilateral lending institutions
|
13.6
|
3,309
|
3,206
|
3,671
|
|
Debt relating to financed assets
|
|
316
|
245
|
295
|
|
Cash collateral received
|
14.5
|
1,072
|
389
|
31
|
|
NEU Commercial Paper (1)
|
|
1,004
|
1,457
|
555
|
|
Bank overdrafts
|
|
250
|
342
|
154
|
|
Other financial liabilities
|
|
105
|
64
|
70
|
|
Current and non-current financial liabilities (excluding derivatives) included in
the calculation of net financial debt
|
|
36,638
|
35,348
|
35,260
|
|
Current and non-current Derivatives (liabilities)
|
13.8
|
386
|
285
|
804
|
|
Current and non-current Derivatives (assets)
|
13.8
|
(1,455)
|
(689)
|
(294)
|
|
Other comprehensive income components related to unmatured hedging instruments
|
13.8
|
114
|
(192)
|
(541)
|
|
Gross financial debt after derivatives (a)
|
|
35,684
|
34,751
|
35,229
|
|
Cash collateral paid (2)
|
14.5
|
(38)
|
(27)
|
(642)
|
|
Investments at fair value (3)
|
14.3
|
(4,500)
|
(2,266)
|
(3,206)
|
|
Cash equivalents
|
14.3
|
(3,178)
|
(5,479)
|
(5,140)
|
|
Cash
|
|
(2,668)
|
(2,709)
|
(2,751)
|
|
Other financial assets
|
|
(2)
|
(0)
|
(0)
|
|
Assets included in the calculation of net financial debt (b)
|
|
(10,386)
|
(10,481)
|
(11,740)
|
|
Net financial debt (a) + (b)
|
|
25,298
|
24,269
|
23,489
|
(1) Negotiable European Commercial Paper (formerly called "commercial paper").
(2)
Only cash collateral paid, included in non-current financial assets of the consolidated statement of financial
position, is deducted from gross financial debt.
(3) Only investments at fair value, included in current financial assets of the consolidated statement of
financial position, are deducted from gross financial debt (Note 14.3).
Net financial debt is mainly held by the Group’s parent
company, Orange SA.
The debt maturity schedules are presented in Note 14.3.
Changes in financial assets or financial liabilities whose cash flows
are disclosed in financing activities in the cash flow statement are the following (see Note 1.9):
|
|
|
|
|
|
(in millions of euros)
|
December 31, 2021
|
Cash flows
|
Other changes with no impact on cash flows
|
December 31, 2022
|
| |
Changes in the scope of consolidation
|
Foreign exchange movement
|
Other
|
|
TDIRA
|
636
|
-
|
-
|
-
|
2
|
638
|
|
Bonds
|
29,010
|
813
|
-
|
88
|
32 (1)
|
29,943
|
|
Bank loans and from development organizations and multilateral lending institutions
|
3,206
|
135
|
6
|
(28)
|
(11)
|
3,309
|
|
Debt relating to financed assets
|
245
|
(97)
|
-
|
-
|
168
|
316
|
|
Cash collateral received
|
389
|
684
|
-
|
-
|
(0)
|
1,072
|
|
NEU Commercial Paper
|
1,457
|
(456)
|
-
|
-
|
3
|
1,004
|
|
Bank overdrafts
|
342
|
(39)
|
0
|
(46)
|
(7)
|
250
|
|
Other financial liabilities
|
64
|
(1)
|
4
|
4
|
35
|
105
|
|
Current and non-current financial liabilities (excluding derivatives) included in
the calculation of net financial debt
|
35,348
|
1,038
|
10
|
18
|
222
|
36,638
|
|
Net derivatives
|
(405)
|
(91)
|
-
|
(213)
|
(360)
|
(1,069)
|
|
Cash collateral paid
|
(27)
|
(12)
|
-
|
0
|
-
|
(38)
|
|
Cash flows from financing activities
|
936
|
|
|
|
|
(1)
Mainly corresponding to changes in accrued interest not yet due.
|
|
|
|
|
|
(in millions of euros)
|
December 31, 2020
|
Cash flows
|
Other changes with no impact on cash flows
|
December 31, 2021
|
| |
Changes in the scope of consolidation
|
Foreign exchange movement
|
Other
|
|
TDIRA
|
636
|
-
|
-
|
-
|
(0)
|
636
|
|
Bonds
|
29,848
|
(1,385)
|
-
|
599
|
(52)(1)
|
29,010
|
|
Bank loans and from development organizations and multilateral lending institutions
|
3,671
|
(496)
|
0
|
27
|
3
|
3,206
|
|
Debt relating to financed assets
|
295
|
(80)
|
-
|
-
|
30
|
245
|
|
Cash collateral received
|
31
|
358
|
-
|
-
|
0
|
389
|
|
NEU Commercial Paper
|
555
|
903
|
-
|
-
|
(1)
|
1,457
|
|
Bank overdrafts
|
154
|
173
|
-
|
15
|
-
|
342
|
|
Other financial liabilities
|
70
|
(136)
|
(41)
|
3
|
168
|
64
|
|
Current and non-current financial liabilities (excluding derivatives) included in
the calculation of net financial debt
|
35,260
|
(663)
|
(41)
|
644
|
148
|
35,348
|
|
Net derivatives
|
510
|
201
|
-
|
(457)
|
(659)
|
(405)
|
|
Cash collateral paid
|
(642)
|
615
|
-
|
0
|
-
|
(27)
|
|
Cash flows from financing activities
|
153
|
|
|
|
|
(1)
Mainly corresponding to changes in accrued interest not yet due.
|
|
|
|
|
|
(in millions of euros)
|
December 31, 2019
|
Cash flows
|
Other changes with no impact on cash flows
|
December 31, 2020
|
| |
Changes in the scope of consolidation
|
Foreign exchange movement
|
Other
|
|
TDIRA
|
822
|
(185)
|
-
|
-
|
(1)
|
636
|
|
Bonds
|
30,893
|
(389)
|
-
|
(624)
|
(31)(1)
|
29,848
|
|
Bank loans and from development organizations and multilateral lending institutions
|
4,013
|
(322)
|
-
|
(25)
|
5
|
3,671
|
|
Debt relating to financed assets
|
125
|
(60)
|
-
|
-
|
231
|
295
|
|
Cash collateral received
|
261
|
(230)
|
-
|
-
|
(0)
|
31
|
|
NEU Commercial Paper
|
158
|
397
|
-
|
-
|
(0)
|
555
|
|
Bank overdrafts
|
203
|
(37)
|
(0)
|
(12)
|
-
|
154
|
|
Other financial liabilities
|
602
|
(484)
|
-
|
(2)
|
(46)
|
70
|
|
Current and non-current financial liabilities (excluding derivatives) included in
the calculation of net financial debt
|
37,076
|
(1,311)
|
(0)
|
(663)
|
157
|
35,260
|
|
Net derivatives
|
(138)
|
37
|
-
|
641
|
(29)
|
510
|
|
Cash collateral paid
|
(123)
|
(519)
|
-
|
0
|
-
|
(642)
|
|
Cash flows from financing activities
|
(1,793)
|
|
|
|
|
(1)
Mainly corresponding to changes in accrued interest not yet due.
Net financial debt by currency
Net financial debt by currency is presented in the table below, after
foreign exchange effects of hedging derivatives (excluding instruments set up to hedge operating items).
|
|
|
|
|
|
|
|
|
|
|
(equivalent value in millions of euros at year-end closing rate)
|
EUR
|
USD
|
GBP
|
PLN
|
EGP
|
JOD
|
MAD
|
Other
|
Total
|
|
Gross financial debt after derivatives
|
26,013
|
4,132
|
2,900
|
75
|
186
|
94
|
465
|
1,817
|
35,683
|
|
Financial assets included in the calculation of net financial debt
|
(8,115)
|
(650)
|
(102)
|
(107)
|
(74)
|
(87)
|
(72)
|
(1,179)
|
(10,386)
|
|
Net debt by currency before effect of foreign exchange derivatives (1)
|
17,898
|
3,482
|
2,798
|
(32)
|
112
|
8
|
393
|
638
|
25,298
|
|
Effect of foreign exchange derivatives
|
6,280
|
(3,630)
|
(2,803)
|
887
|
-
|
-
|
-
|
(735)
|
-
|
|
Net financial debt by currency after effect of foreign exchange derivatives
|
24,178
|
(147)
|
(5)
|
856
|
112
|
8
|
393
|
(96)
|
25,298
|
(1)
Including the market value of derivatives in local currency.
Accounting policies
Cash and cash equivalents
The Group classifies
investments as cash equivalents in the statement of financial position and statement of cash flows when they
comply with the conditions of IAS 7 (see cash management detailed in Notes 14.3 and 14.5):
−
held in order to face short-term cash commitments; and
−
short-term and highly liquid assets at the acquisition date, readily convertible into known amount of
cash and not exposed to any material risk of change in value.
Bonds, bank loans and loans from
multilateral lending institutions
Among financial liabilities,
only commitments to repurchase non-controlling interests are recognized at fair value through profit or loss.
Borrowings are recognized
upon origination at the discounted value of the sums to be paid and subsequently measured at amortized cost
using the effective interest method. Transaction costs that are directly attributable to the acquisition or
issue of the financial liability are deducted from the liability’s carrying value. The costs are
subsequently amortized over the life of the liability, using the effective interest rate method.
Some financial liabilities at
amortized cost, mainly borrowings, are subject to hedging. This mainly relates to the hedging of payables in
foreign currencies against the exposure of their future cash flows to foreign exchange risk (cash flow hedging).
13.4 TDIRA
Perpetual bonds redeemable for shares (titres à
durée indéterminée remboursables en actions or "TDIRAs") with a par value of
14,100 euros are listed on Euronext Paris. Their issuance was described in a prospectus approved by the
Commission des Opérations de Bourse (now the Autorité des Marchés Financiers or AMF -
French Financial Markets Authority) on February 24, 2003.
At December 31, 2022, taking into account
redemptions since their issuance, 44,880 TDIRAs remain outstanding with a total par value of 633 million euros.
These TDIRAs are redeemable for new Orange SA shares at any time at
the holders’ request or, under certain conditions as described in the appropriate prospectus, at Orange
SA’s initiative based on a ratio of 615.216 shares to one TDIRA (i.e. a conversion price of 22.919 euros).
The initial ratio of 300 shares to one TDIRA has been adjusted several times to protect bondholders’ rights
and may be further adjusted under the terms and conditions set out in the prospectus.
Since January 1, 2010, the interest rate on the TDIRAs has been the
three-month Euribor +2.5%.
TDIRAs are subject to split accounting with one part treated as
equity and another part as a liability. For the securities outstanding at December 31, 2022, the "equity"
component before deferred tax stood at 152 million euros.
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Number of securities
|
44,880
|
44,880
|
44,880
|
|
Equity component before deferred taxes
|
152
|
152
|
152
|
|
Debt component
|
638
|
636
|
636
|
|
o/w accrued interests not yet due
|
6
|
3
|
3
|
|
Paid interest
|
16
|
13
|
14
|
Accounting policies
Some Group financial
instruments include both a financial debt component and an equity component. This relates to perpetual bonds
redeemable for shares (TDIRAs). On initial recognition, the debt component is measured at its market
value, corresponding to the value of the contractually determined future cash flows discounted at the market
rate applied at the date of issue to comparable instruments providing substantially the same conditions, but
without the option to convert to or redeem for shares. This debt component is subsequently recognized at
amortized cost.
The equity component, originally
calculated as the difference between the notional value of the instrument and the fair value of the debt
component, remains the same throughout the life of the instrument.
13.5 Bonds
In 2022, the Group carried out the following bond issues:
|
|
|
|
|
|
|
|
Notional currency
|
Initial nominal amount (in millions of currency)
|
Maturity
|
Interest rate (%)
|
Issuer
|
Type of operations
|
Amounts in millions of euros
|
|
EUR
|
500
|
May 18, 2032
|
2.375
|
Orange SA
|
Issuance
|
500
|
|
MAD
|
300
|
June 3, 2026
|
2.600
|
Médi Telecom
|
Issuance
|
28
|
|
MAD
|
1,200
|
June 3, 2026
|
1Y BDT + 0.55
|
Médi Telecom
|
Issuance
|
112
|
|
EUR
|
750
|
November 16, 2031
|
3.625
|
Orange SA
|
Issuance
|
750
|
|
Total of issuances
|
|
|
|
|
1,390
|
|
EUR
|
500
|
September 16, 2022
|
3.375
|
Orange SA
|
Repayment at maturity
|
(500)
|
|
EUR
|
750
|
September 11, 2023
|
0.750
|
Orange SA
|
Early repayment
|
(7)
|
|
MAD
|
1,090
|
December 18, 2025
|
3.970
|
Médi Telecom
|
Regular annual basis repayment
|
(15)
|
|
MAD
|
720
|
December 18, 2025
|
1Y BDT + 1.00(1)
|
Médi Telecom
|
Regular annual basis repayment
|
(10)
|
|
MAD
|
1,002
|
December 10, 2026
|
3.400
|
Médi Telecom
|
Regular annual basis repayment
|
(13)
|
|
MAD
|
788
|
December 10, 2026
|
1Y BDT + 0.85(1)
|
Médi Telecom
|
Regular annual basis repayment
|
(11)
|
|
MAD
|
300
|
June 3, 2026
|
2.600
|
Médi Telecom
|
Regular annual basis repayment
|
(4)
|
|
MAD
|
1,200
|
June 3, 2026
|
1Y BDT + 0.55(1)
|
Médi Telecom
|
Regular annual basis repayment
|
(14)
|
|
Total of repayments
|
|
|
|
|
(572)
|
(1)
The 1Y BDT rate corresponds to the 52 weeks Moroccan treasury notes
rate (recalculated once a year).
The unmatured bonds at December 31, 2022, presented below, were all
issued by Orange SA, with the exception of three commitments (each with a fixed-rate tranche and a variable-rate
tranche) denominated in Moroccan dirhams held by Médi Telecom and one bond in CFA francs issued by Sonatel.
With the exception of the commitments made by Médi Telecom
which are redeemable on a regular annual basis, at December 31, 2022, the bonds issued by the Group are
redeemable at maturity. No specific guarantee had been given in relation to their issuance. Some bonds may be
redeemed in advance at the request of the issuer.
|
|
|
|
|
|
Notional currency
|
Initial nominal amount
(in millions of currency units)
|
Maturity
|
Interest rate (%)
|
Outstanding amount (in millions of euros)
|
| |
|
|
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
|
|
|
Bonds matured before December 31, 2022
|
-
|
500
|
4,282
|
|
EUR
|
500
|
March 1, 2023
|
2.500
|
500
|
500
|
500
|
|
EUR
|
750
|
September 11, 2023
|
0.750
|
744
|
750
|
750
|
|
HKD
|
700
|
October 6, 2023
|
3.230
|
84
|
79
|
74
|
|
HKD
|
410
|
December 22, 2023
|
3.550
|
49
|
46
|
43
|
|
EUR
|
650
|
January 9, 2024
|
3.125
|
650
|
650
|
650
|
|
EUR
|
1,250
|
July 15, 2024
|
1.125
|
1,250
|
1,250
|
1,250
|
|
EUR
|
750
|
May 12, 2025
|
1.000
|
750
|
750
|
750
|
|
EUR
|
800
|
September 12, 2025
|
1.000
|
800
|
800
|
800
|
|
NOK
|
500
|
September 17, 2025
|
3.350
|
48
|
50
|
48
|
|
CHF
|
400
|
November 24, 2025
|
0.200
|
406
|
387
|
370
|
|
GBP
|
350
|
December 5, 2025
|
5.250
|
296
|
312
|
292
|
|
MAD (1)
|
1,090
|
December 18, 2025
|
3.970
|
42
|
59
|
72
|
|
MAD (1)
|
720
|
December 18, 2025
|
1Y BDT + 1.000
|
28
|
39
|
47
|
|
MAD
|
300
|
June 3, 2026
|
2.600
|
24
|
-
|
-
|
|
MAD (1)
|
1,200
|
June 3, 2026
|
1Y BDT + 0.55
|
94
|
-
|
-
|
|
EUR (1)
|
700
|
June 29, 2026
|
0.000
|
700
|
700
|
-
|
|
EUR
|
750
|
September 4, 2026
|
0.000
|
750
|
750
|
750
|
|
EUR
|
75
|
November 30, 2026
|
4.125
|
75
|
75
|
75
|
|
MAD (1)
|
1,002
|
December 10, 2026
|
3.400
|
51
|
68
|
79
|
|
MAD (1)
|
788
|
December 10, 2026
|
1Y BDT + 0.850
|
40
|
54
|
62
|
|
EUR
|
750
|
February 3, 2027
|
0.875
|
750
|
750
|
750
|
|
EUR
|
750
|
July 7, 2027
|
1.250
|
750
|
750
|
750
|
|
XOF
|
100,000
|
July 15, 2027
|
6.500
|
152
|
152
|
152
|
|
EUR
|
500
|
September 9, 2027
|
1.500
|
500
|
500
|
500
|
|
EUR
|
1,000
|
March 20, 2028
|
1.375
|
1,000
|
1,000
|
1,000
|
|
EUR
|
50
|
April 11, 2028
|
3.220
|
50
|
50
|
50
|
|
NOK
|
800
|
July 24, 2028
|
2.955
|
76
|
80
|
76
|
|
GBP
|
500
|
November 20, 2028
|
8.125
|
564
|
595
|
556
|
|
EUR
|
1,250
|
January 15, 2029
|
2.000
|
1,250
|
1,250
|
1,250
|
|
EUR
|
150
|
April 11, 2029
|
3.300
|
150
|
150
|
150
|
|
CHF
|
100
|
June 22, 2029
|
0.625
|
102
|
97
|
93
|
|
EUR
|
500
|
September 16, 2029
|
0.125
|
500
|
500
|
500
|
|
EUR
|
1,000
|
January 16, 2030
|
1.375
|
1,000
|
1,000
|
1,000
|
|
EUR
|
1,200
|
September 12, 2030
|
1.875
|
1,200
|
1,200
|
1,200
|
|
EUR
|
105
|
September 17, 2030
|
2.600
|
105
|
105
|
105
|
|
EUR
|
100
|
November 6, 2030
|
0.000(2)
|
100
|
100
|
100
|
|
USD
|
2,500
|
March 1, 2031
|
9.000(3)
|
2,308
|
2,173
|
2,006
|
|
EUR
|
300
|
May 29, 2031
|
1.342
|
300
|
300
|
300
|
|
EUR
|
750
|
November 16, 2031
|
3.625
|
750
|
-
|
-
|
|
EUR
|
50
|
December 5, 2031
|
4.300 (zero coupon)
|
79
|
75
|
72
|
|
|
|
|
|
(1)
Bonds issued by Médi Telecom. The 1Y BDT rate corresponds to
the 52 weeks Moroccan treasury notes rate (recalculated once a year).
(2)
Bond bearing interest at a fixed rate of 2% until 2017 and then at
CMS 10 years x 166% fixed annually (0% until November 2023), floored at 0% and capped at 4% until 2023
and at 5% thereafter.
(3)
Bond with a step-up clause (clause that triggers a change in the
coupon rate if Orange’s credit rating from the rating agencies changes - see Note 14.3).
|
|
|
|
|
|
Notional currency
|
Initial nominal amount
(in millions of currency units)
|
Maturity
|
Interest rate (%)
|
Outstanding amount (in millions of euros)
|
| |
|
|
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
|
|
|
EUR
|
50
|
December 8, 2031
|
4.350 (zero coupon)
|
80
|
77
|
73
|
|
EUR
|
50
|
January 5, 2032
|
4.450 (zero coupon)
|
77
|
74
|
71
|
|
GBP
|
750
|
January 15, 2032
|
3.250
|
846
|
893
|
834
|
|
EUR
|
750
|
April 7, 2032
|
1.625
|
750
|
750
|
750
|
|
EUR
|
500
|
May 18, 2032
|
2.375
|
500
|
-
|
-
|
|
EUR
|
1,000
|
September 4, 2032
|
0.500
|
1,000
|
1,000
|
1,000
|
|
EUR
|
1,500
|
January 28, 2033
|
8.125
|
1,500
|
1,500
|
1,500
|
|
EUR
|
55
|
September 30, 2033
|
3.750
|
55
|
55
|
55
|
|
EUR
|
1,000
|
December 16, 2033
|
0.625
|
1,000
|
1,000
|
-
|
|
GBP
|
500
|
January 23, 2034
|
5.625
|
564
|
595
|
556
|
|
HKD
|
939
|
June 12, 2034
|
3.070
|
113
|
106
|
99
|
|
EUR
|
800
|
June 29, 2034
|
0.750
|
800
|
800
|
-
|
|
EUR
|
300
|
July 11, 2034
|
1.200
|
300
|
300
|
300
|
|
EUR
|
50
|
April 16, 2038
|
3.500
|
50
|
50
|
50
|
|
USD
|
900
|
January 13, 2042
|
5.375
|
844
|
795
|
733
|
|
USD
|
850
|
February 6, 2044
|
5.500
|
797
|
750
|
693
|
|
EUR
|
750
|
September 4, 2049
|
1.375
|
750
|
750
|
750
|
|
GBP
|
500
|
November 22, 2050
|
5.375
|
564
|
595
|
556
|
|
Outstanding amount of bonds
|
29,654
|
28,737
|
29,524
|
|
Accrued interest
|
454
|
445
|
487
|
|
Amortized cost
|
(164)
|
(172)
|
(163)
|
|
Total
|
29,943
|
29,010
|
29,848
|
13.6 Loans from
development organizations and multilateral lending institutions
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Sonatel
|
266
|
244
|
292
|
|
Orange Côte d'Ivoire
|
253
|
140
|
172
|
|
Orange Mali
|
201
|
207
|
227
|
|
Médi Telecom
|
183
|
167
|
220
|
|
Orange Egypt
|
163
|
137
|
163
|
|
Orange Burkina Faso
|
36
|
42
|
56
|
|
Orange Cameroon
|
36
|
78
|
111
|
|
Orange Jordanie
|
35
|
49
|
61
|
|
Orange Bail
|
12
|
3
|
-
|
|
Orange Madagascar
|
12
|
18
|
19
|
|
Orange Polska S.A.
|
10
|
6
|
1
|
|
Other
|
15
|
15
|
61
|
|
Bank loans
|
1,222
|
1,105
|
1,384
|
|
Orange SA(1)
|
2,087
|
2,101
|
2,288
|
|
Loans from development organizations and multilateral lending institutions(2)
|
2,087
|
2,101
|
2,288
|
|
Total
|
3,309
|
3,206
|
3,671
|
(1) In 2021, Orange SA repaid at maturity a loan of 190 million euros. In 2020, Orange SA had repaid at
maturity a loan of 400 million euros and negotiated a new loan of 350 million euros, maturing in 2027.
(2) Entirely the European Investment Bank.
13.7 Financial assets
Financial assets break down as follows:
|
|
|
|
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
| |
Non-current
|
Current
|
Total
|
Total
|
Total
|
|
Financial assets at fair value through other comprehensive income that will not be
reclassified to profit or loss
|
419
|
-
|
419
|
431
|
431
|
|
Investments securities
|
419
|
-
|
419
|
431
|
431
|
|
Financial assets at fair value through profit or loss
|
243
|
4,502
|
4,745
|
2,496
|
3,990
|
|
Investments at fair value (1)
|
-
|
4,500
|
4,500
|
2,266
|
3,206
|
|
Investments securities
|
206
|
-
|
206
|
203
|
141
|
|
Cash collateral paid (2)
|
38
|
-
|
38
|
27
|
642
|
|
Other
|
-
|
2
|
2
|
-
|
0
|
|
Financial assets at amortized cost
|
342
|
39
|
381
|
363
|
382
|
|
Receivables related to investments (3)
|
77
|
28
|
106
|
105
|
55
|
|
Other
|
264
|
11
|
275
|
258
|
327
|
|
Total financial assets
|
1,004
|
4,541
|
5,545
|
3,290
|
4,803
|
(1) NEU Commercial Paper and bonds only (see Note 14.3).
(2) See Note 14.5.
(3) Including a loan of 27 million euros from Orange SA to Orange Bank.
Equity securities
Equity securities measured at fair
value through other comprehensive income that will not be reclassified to profit or loss
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Investment securities measured at fair value through other comprehensive income
that will not be reclassified to profit or loss - in the opening balance
|
432
|
431
|
277
|
|
Acquisitions(1)
|
98
|
85
|
81
|
|
Changes in fair value (2)
|
(108)
|
11
|
94
|
|
Sales
|
(7)
|
(95)
|
(20)
|
|
Other movements
|
3
|
0
|
(2)
|
|
Investment securities measured at fair value through other
comprehensive income that will not be reclassified to profit or loss - in the closing balance
|
419
|
432
|
431
|
(1) In 2022, includes the effect of Deezer's initial public offering for 77 million euros (see Note 3.2)
(2) Deezer's share price at December 31, 2022 led to a decrease in the fair value of (54) million euros (see
Note 3.2).
Equity securities measured at fair value through other comprehensive
income that will not be reclassified to profit or loss include numerous shares in companies held by investment
funds.
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Investment securities measured at fair value through profit or loss - in the
opening balance
|
203
|
141
|
133
|
|
Changes in fair value
|
10
|
34
|
8
|
|
Other movements
|
(8)
|
27
|
(0)
|
|
Investment securities measured at fair value through profit or loss
- in the closing balance
|
205
|
203
|
141
|
Accounting policies
Financial
assets
−
Financial assets at fair value through profit or loss (FVR)
Certain equity securities
which are not consolidated or equity-accounted and cash investments such as negotiable debt securities, deposits
and UCITS (Undertakings for Collective Investment in Transferable Securities), which are compliant with the
Group's liquidity risk management policy, may be designated by Orange as recognized at fair value through profit
or loss. These assets are recognized at fair value at initial recognition and subsequently. All changes in fair
value are recorded in net financial costs, net.
−
Financial assets at fair value through other comprehensive income that will not be reclassified to profit
or loss (FVOCI)
Equity securities which are
not consolidated or equity-accounted are, subject to exceptions, recognized as assets at fair value through
other comprehensive income that will not be reclassified to profit or loss. They are recognized at fair value at
initial recognition and subsequently. Temporary changes in value and gains (losses) on disposals are recorded as
other comprehensive income that will not be reclassified to profit or loss.
−
Financial assets at amortized cost (AC)
This category mainly includes
miscellaneous loans and receivables. These instruments are recognized at fair value at initial recognition and
are subsequently measured at amortized cost using the effective interest method. If there is any objective
evidence of impairment of these assets, the value of the asset is reviewed at the end of each reporting period.
An impairment loss is recognized in the income statement when impairment tests demonstrate that the financial
asset's carrying value is higher than its recoverable amount. For these financial assets, the provisioning
system also covers expected losses according to IFRS 9.
13.8 Derivatives
13.8.1 Market value of derivatives
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Hedging derivatives
|
893
|
484
|
(311)
|
|
Cash flow hedge derivatives
|
893
|
484
|
(311)
|
|
Fair value hedge derivatives
|
-
|
-
|
(0)
|
|
Derivatives held for trading (1)
|
176
|
(79)
|
(199)
|
|
Net derivatives
(2)
|
1,069
|
405
|
(510)
|
(1) Mainly related to the effect of the economic hedges of subsidiaries for 140 million euros in 2022, 90
million euros in 2021 and the foreign exchange effects of the economic hedges against the revaluation of
subordinated notes denominated in pounds sterling (equity instruments recognized at their historical value (see
Note 15.4) for (70) million euro in 2022, (165) million euros in 2021 and (210) million euro in 2020.
(2) Of which foreign exchange effects of the cross-currency swaps (classified as hedging or trading) hedging
foreign exchange risk on the notional amount of gross debt for 694 million euros in 2022, 657 million euros in
2021 and 251 million euros in 2020. The foreign exchange effect of the cross-currency swaps is the difference
between the notional converted at the closing rate and the notional converted at the opening rate (or at the
trading day spot rate in the case of a new instrument).
The risks hedged by these derivatives are described in Note 14. These
derivatives are associated with cash-collateral agreements, the effects of which are described in Note 14.5.
Accounting policies
Derivatives are measured at
fair value in the statement of financial position and presented according to their maturity date, regardless of
whether they qualify for hedge accounting under IFRS 9 (hedging instruments versus trading derivatives).
Derivatives are classified as
a separate line item in the statement of financial position.
Trading derivatives are
economic hedge derivatives not classified as hedges for accounting purposes. Changes in the value of these
instruments are recognized directly in profit or loss.
Hedge accounting is
applicable when:
−
at the inception of the hedge, there is a formal designation and documentation of the hedging
relationship;
−
the effectiveness of the hedge is demonstrated at inception and it is expected to continue in subsequent
periods: i.e. at inception and throughout its duration, the company expects changes in the fair value of the
hedged item to be almost fully offset by changes in the fair value of the hedging instrument.
There are three types of
hedge accounting:
−
a fair value hedge is a hedge of the exposure to changes in the fair value of a recognized asset or
liability (or an identified portion of the asset or liability) that are attributable to a particular interest
rate and/or currency risk and which could affect profit or loss. The hedged portion of these items is remeasured
at fair value in the statement of financial position. Changes in this fair value are recognized in the income
statement and offset by symmetrical changes in the fair value of financial hedging instruments to the extent of
the hedge effectiveness.
−
a cash flow hedge is a hedge of exposure to changes in cash flows attributable to a particular interest
rate and/or currency risk associated with a recognized asset or liability or a transaction believed to be highly
probable (such as a future purchase or sale) which could affect profit or loss. As the hedged item is not
recognized in the statement of financial position, the effective portion of the change in the fair value of the
hedging instrument is recognized in other comprehensive income. It is reclassified in profit or loss when the
hedged item (financial asset or liability) affects the profit or loss or in the initial cost of the hedged item
when it relates to the hedge of a non-financial asset acquisition cost.
−
a net investment hedge is a hedge of exposure to changes in value attributable to the foreign exchange
risk of a net investment in a foreign operation, which could affect profit or loss on the disposal of the
foreign operation. The effective portion of the net investment hedge is recorded in other comprehensive income.
It is reclassified in profit or loss on disposal of the net investment.
For transactions qualified as
fair value hedges and for economic hedges, the foreign exchange impact of changes in the fair value of
derivatives is booked in operating income when the underlying hedged item is a commercial transaction and in
finance costs, net when the underlying hedged item is a financial asset or liability.
Hedge accounting can be
terminated when the hedged item is no longer recognized, i.e. when the Group revokes the designation of the
hedging relationship or when the hedging instrument is terminated or exercised. The accounting consequences are
as follows:
−
fair value hedge: at the hedge accounting termination date, the adjustment of the fair value of the
liability is amortized using an effective interest rate recalculated at this date. Should the item hedged
disappear, the change in fair value is recognized in the income statement;
−
cash flow hedge: amounts recorded in other comprehensive income are immediately reclassified in profit or
loss when the hedged item is no longer recognized. In all other cases, amounts are reclassified in profit or
loss, on a straight-line basis, throughout the remaining life of the original hedging relationship.
In both cases, subsequent
changes in the value of the hedging instrument are recorded in profit or loss.
Concerning the effects of the
foreign currency basis spread of cross-currency swaps designated as cash flow hedges, the Group has chosen to
designate these as hedging costs. This option enables recognition of these effects in other comprehensive income
and amortization of the cost of the basis spread in profit or loss over the period of the hedge.
13.8.2 Cash flow hedges
The main purpose of the Group’s cash flow hedges is to
neutralize foreign exchange risk on future cash flows (notional, coupons) or to switch floating-rate debt to
fixed-rate debt.
The ineffective portion of cash flow hedges recognized in the income
statement was not significant during the periods presented. The main hedges unmatured at December 31, 2022,
as well as their effects on the financial statements, are detailed in the table below.
|
|
|
|
(in millions of euros)
|
Hedged risk
|
| |
Total
|
Exchange and interest rate risk
|
Exchange risk
|
Interest rate risk
|
Commodity risk
|
|
Hedging instruments
|
893
|
Cross Currency Swap
|
Forward
FX swap
Option
|
Interest rate swap
Option
|
Commodity swap
Option
|
|
Carrying amount - asset
|
1,065
|
1,002
|
3
|
-
|
74
|
|
Carrying amount - liability
|
(172)
|
(156)
|
(11)
|
(5)
|
-
|
|
Change in cash flow hedge reserve
|
288
|
225
|
(6)
|
9
|
60
|
|
Gain (loss) recognized in other comprehensive income
|
304
|
244
|
(8)
|
9
|
59
|
|
Reclassification in financial result
|
(19)
|
(19)
|
-
|
0
|
-
|
|
Reclassification in operating income
|
(1)
|
-
|
(1)
|
-
|
(0)
|
|
Reclassification in initial carrying amount of hedged item
|
4
|
-
|
4
|
-
|
0
|
|
Cash flow hedge reserve
|
497
|
457
|
(4)
|
(5)
|
49
|
|
o/w related to unmatured hedging instruments
|
114
|
74
|
(4)
|
(5)
|
49
|
|
o/w related to discontinued hedges
|
383
|
383
|
-
|
(0)
|
-
|
|
Hedged item
|
Bonds and credit lines
|
Purchases of handsets and equipment
|
Bonds and Lease liabilities
|
Purchase of energy
|
|
Balance sheet item
|
Current and non-current financial liabilities
|
Property, plant and equipment
|
Lease and Financial Liabilities - current and non-current
|
Operating result
|
The main hedges unmatured at December 31, 2021, as well as their
effects on the financial statements, are detailed in the table below.
|
|
|
|
(in millions of euros)
|
Hedged risk
|
| |
Total
|
Exchange and interest rate risk
|
Exchange risk
|
Interest rate risk
|
|
Hedging instruments
|
484
|
Cross Currency Swap
|
Forward
FX swap
Option
|
Interest rate swap
Option
|
|
Carrying amount - asset
|
576
|
575
|
1
|
-
|
|
Carrying amount - liability
|
(91)
|
(76)
|
(0)
|
(14)
|
|
Change in cash flow hedge reserve
|
317
|
311
|
(2)
|
9
|
|
Gain (loss) recognized in other comprehensive income
|
358
|
347
|
3
|
9
|
|
Reclassification in financial result
|
(38)
|
(36)
|
(2)
|
-
|
|
Reclassification in operating income
|
(0)
|
-
|
0
|
(0)
|
|
Reclassification in initial carrying amount of hedged item
|
(3)
|
-
|
(3)
|
0
|
|
Cash flow hedge reserve
|
210
|
220
|
(9)
|
(2)
|
|
o/w related to unmatured hedging instruments
|
(192)
|
(181)
|
(9)
|
(2)
|
|
o/w related to discontinued hedges
|
402
|
402
|
-
|
0
|
|
Hedged item
|
Bonds and credit lines
|
Purchases of handsets and equipment
|
Bonds and Lease liabilities
|
|
Balance sheet item
|
Current and non-current financial liabilities
|
Property, plant and equipment
|
Lease and Financial Liabilities - current and non-current
|
The main hedges unmatured at December 31, 2020, as well as their
effects on the financial statements, are detailed in the table below.
|
|
|
|
(in millions of euros)
|
Hedged risk
|
| |
Total
|
Exchange and interest rate risk
|
Exchange risk
|
Interest rate risk
|
|
Hedging instruments
|
(311)
|
Cross Currency Swap
|
Forward
FX swap
Option
|
Interest rate swap
|
|
Carrying amount - asset
|
223
|
216
|
6
|
1
|
|
Carrying amount - liability
|
(534)
|
(502)
|
(1)
|
(31)
|
|
Change in cash flow hedge reserve
|
22
|
6
|
5
|
11
|
|
Gain (loss) recognized in other comprehensive income
|
3
|
(16)
|
8
|
11
|
|
Reclassification in financial result
|
21
|
22
|
(1)
|
-
|
|
Reclassification in operating income
|
1
|
-
|
1
|
-
|
|
Reclassification in initial carrying amount of hedged item
|
(3)
|
-
|
(3)
|
-
|
|
Cash flow hedge reserve
|
(100)
|
(91)
|
2
|
(11)
|
|
o/w related to unmatured hedging instruments
|
(541)
|
(532)
|
2
|
(11)
|
|
o/w related to discontinued hedges
|
440
|
440
|
-
|
0
|
|
Hedged item
|
Bonds and credit lines
|
Purchases of handsets and equipment
|
Bonds and Finance Lease
|
|
Balance sheet item
|
Current and non-current financial liabilities
|
Property, plant and equipment
|
Current and non-current financial liabilities
|
The nominal amounts of the main cash flow hedges as of December 31,
2022 are presented below.
|
|
| |
Notional amounts of hedging instruments per maturity
(in millions of hedged currency units)
|
| |
2023
|
2024
|
2025
|
2026
|
2027 and beyond
|
|
Orange SA
|
|
|
|
|
|
|
Cross currency swaps
|
|
|
|
|
|
|
CHF
|
-
|
-
|
400
|
-
|
100 (1)
|
|
GBP
|
-
|
-
|
262
|
-
|
2,250 (2)
|
|
HKD
|
1,110
|
-
|
-
|
-
|
939 (3)
|
|
NOK
|
-
|
-
|
500
|
-
|
800 (4)
|
|
USD
|
-
|
-
|
-
|
-
|
4,200 (5)
|
|
Interest rate swaps
|
|
|
|
|
|
|
EUR
|
-
|
-
|
-
|
-
|
100 (6)
|
|
FX Forward
|
|
|
|
|
|
|
USD
|
130
|
-
|
-
|
-
|
-
|
|
Commodity swap
|
|
|
|
|
|
|
PLN
|
27.3
|
60.7
|
62.4
|
29.7
|
95.3(7)
|
(1) 100 million Swiss francs maturing in 2029.
(2) 500 million pounds sterling maturing in 2028, 750 million pounds sterling maturing in 2032,
500 million pounds sterling maturing in 2034 and 500 million pounds sterling maturing in 2050.
(3) 939 million Hong Kong dollars maturing in 2034.
(4) 800 million Norwegian kroner maturing in 2028.
(5) 2,450 million US dollars maturing in 2031, 900 million US dollars maturing in 2042 and
850 million US dollars maturing in 2044.
(6) 100 million euros maturing in 2030.
(7) In hedging of electricity purchases for 1.8 terawatt-hours (TWh), including 1.1 TWh for 2027 and beyond.
Note 14
Information on market risk and fair value of financial assets
and liabilities (
telecom activities)
The Group uses financial position or performance indicators that are
not specifically defined by IFRS, such as EBITDAaL (see Note 1.9) and net financial debt (see
Note 13.3).
Market risks are monitored by Orange’s Treasury and Financing
Committee, which reports to the Executive Committee. The Committee is chaired by the Group’s Executive
Committee member in charge of Finance, Performance and Development and meets on a quarterly basis.
It sets the guidelines for managing the Group’s debt,
especially in respect of its interest rate, foreign exchange, liquidity and counterparty risk exposure for the
coming months, and reviews past management (transactions carried out, financial results).
The armed conflict that began on February 24, 2022 and its
consequences on the financial market did not call into question the risk management policy relating to financial
instruments. The Group continued to set up and manage hedging instruments in order to limit its exposure to
operational and financial foreign exchange and interest rate risks, while maintaining a diversified financing
policy.
14.1 Interest rate
risk management
Management of fixed-rate/variable-rate
debt
Orange group seeks to manage its fixed-rate/variable-rate exposure in
euros in order to minimize interest costs by using firm and conditional interest rate derivatives such as swaps,
futures, caps and floors.
The fixed-rate component of gross financial debt, excluding cash
collateral received and agreements to buy back non-controlling interests, is estimated at 96% at December 31,
2022, 94% at December 31, 2021 and 89% at December 31, 2020.
Sensitivity analysis of the
Group’s position to changes in interest rates
The sensitivity of the Group’s financial assets and liabilities
to interest rate risk is only analyzed for the components of net financial debt that are interest-bearing and
therefore exposed to interest rate risk.
Sensitivity of financial expenses
Based on a constant amount of debt and a constant management policy,
a 1% rise in interest rates would increase the annual cost of gross financial debt by 13 million euros, while
a decrease of 1% would lower it by 13 million euros.
Sensitivity of cash flow hedge reserves
A 1% rise in euro interest rates would improve the market value of
derivatives designated as cash flow hedges and increase the associated cash flow hedge reserves by approximately
775 million euros. A 1% decrease in euro interest rates would reduce their market value and decrease the cash
flow hedge reserve by approximately 776 million euros.
14.2 Foreign exchange
risk management
Operational foreign exchange risk
The Group’s foreign operations are carried out by entities that
operate in their own country and mainly in their own currency. Their operational exposure to foreign exchange risk
is therefore limited to certain types of flows: purchases of equipment or network capacity, purchases of devices
and equipment sold or leased to customers and purchases from or sales to international carriers.
Whenever possible, the entities of the Orange group have put in place
policies to hedge this exposure (see Note 13.8).
Financial foreign exchange risk
Financial foreign exchange risk mainly relates to:
−
dividends paid to the parent company: in general, the Group’s policy is to economically hedge this
risk from the date of the relevant subsidiary’s Shareholders’ Meeting;
−
financing of the subsidiaries: except in special cases, the subsidiaries are required to cover their
funding needs in their functional currency;
−
Group financing: most of the Group’s bonds, after derivatives, are denominated in euros. From time to
time, Orange SA issues bonds in markets other than euro markets (primarily the US dollar, pound sterling and Swiss
franc). If Orange SA does not have assets in these currencies, in most cases, the issues are translated into euros
through cross-currency swaps. The debt allocation by currency also depends on the level of interest rates and
particularly on the interest rate differential relative to the euro.
Following the repurchase at the end of 2022 of the last subordinated
notes denominated in pounds sterling (see Note 15.4), the Group is no longer exposed to the financial exchange
risk resulting from these instruments.
The table below shows the main exposures to foreign exchange
fluctuations of the net financial debt in foreign currencies of Orange SA and of Orange Polska and Orange Egypt,
and also shows the sensitivity of the entity to a 10% change in the foreign exchange rates of the currencies to
which it is exposed. Orange SA and Orange Egypt are the entities bearing the main foreign exchange risk, including
internal transactions that generate a net foreign exchange gain or loss in the Consolidated Financial Statements.
|
|
|
| |
Exposure in currency units
|
Sensitivity analysis
|
|
(in millions of currency units)
|
EUR
|
USD
|
GBP
|
PLN
|
CHF
|
Total translated
|
10% gain in euro
|
10% loss in euro
|
|
Orange SA
|
-
|
1
|
2
|
-
|
1
|
3
|
(0)
|
0
|
|
Orange Polska
|
(121)
|
(6)
|
-
|
-
|
-
|
(127)
|
12
|
(14)
|
|
Orange Egypt
|
-
|
(101)
|
-
|
-
|
-
|
(95)
|
9
|
(11)
|
|
Total (currencies)
|
(121)
|
(106)
|
2
|
-
|
1
|
(218)
|
|
|
Foreign exchange risk to assets
Due to its international presence, the Orange group’s statement
of financial position is exposed to foreign exchange fluctuations, as these affect the translation of the assets
of subsidiaries and shareholdings denominated in foreign currencies. The currencies concerned are mainly the pound
sterling, the zloty, the Egyptian pound, the US dollar, the Jordanian dinar and the Moroccan dirham.
To hedge its largest foreign asset exposures, Orange has issued debt
in the relevant currencies.
The amounts presented below take into account Mobile Financial
Services activities (mainly in euros).
|
|
|
|
| |
Contribution to consolidated net assets
|
|
Sensitivity analysis
|
|
(in millions of euros)
|
EUR
|
USD
|
GBP
|
PLN
|
EGP
|
JOD
|
MAD
|
Other currencies
|
Total
|
|
10% gain in euro
|
10% loss in euro
|
|
Net assets excluding net debt (a)(1)
|
50,056
|
224
|
70
|
3,388
|
781
|
541
|
925
|
4,269
|
60,254
|
|
(927)
|
1,133
|
|
Net debt by currency including derivatives (b)(2)
|
(24,178)
|
147
|
5(3)
|
(856)
|
(112)
|
(8)
|
(393)
|
96
|
(25,298)
|
|
102
|
(124)
|
|
Net assets by currency (a) + (b)
|
25,878
|
371
|
74
|
2,532(4)
|
669
|
533
|
533
|
4,366
|
34,956
|
|
(825)
|
1,009
|
(1)
Excluding components of net financial debt.
(2)
Net financial debt as defined and used by Orange does not take
into account Mobile Financial Services activities, for which this concept is not relevant (see Note 13.3).
(3)
Of which economic hedge of subordinated notes denominated in
pounds sterling for 39 million pounds sterling (i.e. 44 million euros).
(4)
Share of net assets attributable to owners of the parent
company in zlotys amounts to 1,283 million euros.
Due to its international presence, the Orange group income statement
is also exposed to risk arising from changes in foreign exchange rates due to the conversion, in the consolidated
financial statements, of its foreign subsidiaries’ financial statements.
|
|
|
|
|
| |
Contribution to consolidated financial income statement
|
|
|
|
|
(in millions of euros)
|
EUR
|
USD
|
GBP
|
PLN
|
EGP
|
JOD
|
MAD
|
Other currencies
|
Total
|
|
10% gain in euro
|
10% loss in euro
|
|
Revenue
|
31,400
|
1,134
|
282
|
2,630
|
977
|
456
|
672
|
5,919
|
43,471
|
|
(1,097)
|
1,341
|
|
EBITDAaL
|
9,389
|
183
|
7
|
652
|
360
|
214
|
202
|
1,956
|
12,963
|
|
(325)
|
397
|
|
Operating income
|
2,798
|
192
|
(14)
|
255
|
178
|
114
|
61
|
1,216
|
4,801
|
|
(182)
|
223
|
14.3 Liquidity risk
management
Diversification of sources of funding
Orange has diversified sources of funding:
−
regular issues in the bond markets;
−
occasional financing through loans from multilateral or development lending institutions;
−
issues in the short-term securities markets under the NEU Commercial Paper program (Negotiable European
Commercial Paper, formerly called "commercial paper");
−
On November 23, 2022, Orange signed with 27 international banks a 6 billion multi-currency revolving credit
facility indexed on environmental and social indicators, to refinance its syndicated credit facility maturing in
December 2023. This sustainable refinancing illustrates the Group's environmental, social and governance (ESG)
commitments, with an indexation of the margin to the achievement of objectives relating to CO2 emissions (scopes 1
& 2, scope 3), in line with Orange’s goal of being Net Zero Carbon by 2040, and to gender diversity
within its workforce. This new facility, initially maturing in November 2027, includes two options to extend
for one more year each, exercisable by Orange and subject to the banks’ approval.
Liquidity of investments
Orange invests its cash surpluses in cash equivalents that meet IAS 7
cash equivalent criteria or at fair value investments (negotiable debt securities, bonds with a maturity of no
more than two years, UCITS and term deposits). These investments prioritize minimizing the risk of capital loss
over performance.
Cash, cash equivalents and fair value investments are held mainly in
France and other European Union countries, which are not subject to restrictions on convertibility or exchange
controls.
Smoothing debt maturities
The policy followed by Orange is to apportion debt maturities evenly
over the years to come.
The following table shows undiscounted future cash flows for each
financial liability shown on the statement of financial position. The key assumptions used in this schedule are:
−
amounts in foreign currencies are translated into euros at the year-end closing rate;
−
future variable-rate interest is based on the last fixed coupon, unless a better estimate is available;
−
TDIRAs being necessarily redeemable in new shares, no redemption is taken into account in the maturity
analysis. In addition, as the interest payable on the bonds is due over an undetermined period (see
Note 13.4), only interest payable for the first period is included (including interest payments for other
periods would not provide relevant information);
−
the maturities of revolving credit lines are the contractual maturity dates;
−
"Other items" (undated and non-cash items) reconcile, for financial liabilities not accounted for at fair
value, the future cash flows and the balance in the statement of financial position.
|
|
|
|
|
|
|
|
|
|
|
(in millions of euros)
|
Note
|
December 31, 2022
|
2023
|
2024
|
2025
|
2026
|
2027
|
2028 et au-delà
|
Other items (1)
|
|
TDIRA
|
13.4
|
638
|
6
|
-
|
-
|
-
|
-
|
-
|
633
|
|
Bonds
|
13.5
|
29,943
|
1,941
|
2,010
|
2,410
|
1,595
|
2,030
|
20,121
|
(164)
|
|
Bank loans and from development organizations and multilateral lending institutions
|
13.6
|
3,309
|
1,365
|
281
|
773
|
424
|
446
|
34
|
(15)
|
|
Debt relating to financed assets
|
13.3
|
316
|
85
|
91
|
67
|
48
|
24
|
-
|
-
|
|
Cash collateral received
|
13.3
|
1,072
|
1,072
|
-
|
-
|
-
|
-
|
-
|
-
|
|
NEU commercial papers(2)
|
13.3
|
1,004
|
1,001
|
-
|
-
|
-
|
-
|
-
|
3
|
|
Bank overdrafts
|
13.3
|
250
|
250
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other financial liabilities
|
13.3
|
105
|
92
|
1
|
0
|
0
|
0
|
11
|
-
|
|
Derivatives (liabilities)
|
13.3
|
386
|
93
|
-
|
30
|
-
|
-
|
50
|
-
|
|
Derivatives (assets)
|
13.3
|
(1,455)
|
(53)
|
(46)
|
(69)
|
(24)
|
(9)
|
(773)
|
-
|
|
Other Comprehensive Income related to unmatured hedging instruments
|
13.3
|
114
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Gross financial debt after derivatives
|
|
35,684
|
5,852
|
2,337
|
3,212
|
2,044
|
2,493
|
19,443
|
456
|
|
Trade payables
|
|
11,552
|
10,071
|
217
|
192
|
168
|
408
|
495
|
-
|
|
Total financial liabilities (including derivatives assets)
|
|
47,236
|
15,923 (3)
|
2,554
|
3,404
|
2,212
|
2,901
|
19,938
|
456
|
|
Future interests on financial liabilities(4)
|
|
|
1,388
|
1,054
|
899
|
741
|
742
|
4,439
|
-
|
(1)
Undated items: TDIRA notional. Non-cash items: amortized
cost on bonds and bank loans, and discounting effect on long term trade payables.
(2)
Negotiable European Commercial Paper (formerly called
"commercial paper").
(3)
Amounts presented for 2022 correspond to notional and accrued
interests for 470 million euros.
(4)
Mainly future interests on bonds for 8,844 million euros, on
bank loans for 110 million euros and on derivatives instruments for (1,529) million euros.
The liquidity position is one of the indicators of financial position
used by the Group. This aggregate, not defined by IFRS, may not be comparable to similarly titled indicators used
by other groups.
At December 31, 2022, the liquidity position of Orange's telecom
activities amounts to 16,741 million euros and exceeds the repayment obligations of its gross financial debt in
2023. It breaks down as follows:
Liquidity position
(in millions of euros)
|
|
|
Available undrawn amount of credit facilities |
|
|
|
|
Investments at fair value |
|
|
|
|
Cash |
|
|
|
|
Cash equivalents |
|
|
|
At December 31, 2022, the Orange group’s telecom activities had
access to credit facilities in the form of bilateral credit lines and syndicated credit lines. Most of these lines
bear interest at variable rates. The available undrawn amount of the credit facilities is 6,394 million euros
(including 6,000 million euros for Orange SA).
Cash equivalents amount to 3,178 million euros, mainly at
Orange SA, comprising 2,632 million euros of UCITS and 150 million euros of term deposits.
Investments at fair value amounted to 4,500 million euros,
exclusively at Orange SA, with 4,128 million euros of NEU Commercial Paper and 357 million euros of
bonds.
Any specific contingent commitments in terms of financial ratios are
presented in Note 14.4.
Due to its cash level and other immediately disposable investments,
the Group is not dependent on the sale of receivables organized in certain countries (see Note 4.3).
Change in Orange's credit rating
Orange’s credit rating is an additional overall performance
indicator used to assess the Group’s financial policy and risk management policy and, in particular, its
solvency and liquidity risk. It is not a substitute for an analysis carried out by investors. Rating agencies
regularly review the ratings they award. Any change in the rating could affect the cost of future financing or
access to liquidity.
In addition, a change in Orange’s credit rating will, for
certain outstanding financing, affect the remuneration paid to investors:
−
one Orange SA bond (see Note 13.5) with an outstanding amount of 2.5 billion dollars
maturing in 2031 (equivalent to 2.3 billion euros at December 31, 2022) is subject to a step-up clause in the
event that Orange’s credit rating changes. This clause was triggered in 2013 and 2014: the coupon due in
March 2014 was thus calculated on the basis of an interest rate of 8.75%. And since then, the bond has been
bearing interest of 9%;
−
the margin of the 6 billion euro syndicated credit facility signed on November 23, 2022 is subject to
change depending on whether Orange’s credit rating is raised or lowered. At December 31, 2022, this credit
facility was undrawn.
At December 31, 2022, neither Orange’s credit rating nor its
outlook has changed compared with December 31, 2021.
| |
Standard & Poor’s
|
Moody's
|
Fitch Ratings
|
|
Long-term debt
|
BBB+
|
Baa1
|
BBB+
|
|
Outlook
|
Stable
|
Stable
|
Stable
|
|
Short-term debt
|
A2
|
P2
|
F2
|
14.4 Financial ratios
Main commitments with regard to
financial ratios
Orange SA does not have any credit line or loan subject to specific
covenant with regard to financial ratios.
Certain subsidiaries of Orange SA have pledged to comply with certain
financial ratios related to indicators defined in the contracts with the banks. The breach of these ratios
constitutes an event of default that can lead to early repayment of the line of credit or loan concerned.
The main commitments are as follows:
−
Orange Egypt: in respect of bank financing agreements signed in 2018 and 2022, of which the total amount
outstanding at December 31, 2022 is 1,750 million Egyptian pounds and 101 million US dollars (i.e.
160 million euros), Orange Egypt is required to comply with a "net senior debt to reported EBITDA" ratio;
−
Médi Telecom: in respect of its bank financing agreements signed in 2012, 2014 and 2015, of which
the total amount outstanding at December 31, 2022 is 2,043 million Moroccan dirhams (i.e. 183 million
euros), Médi Telecom is required to comply with ratios relating to its "net financial debt," "net financial
debt/EBITDA" and "net equity;"
−
Orange Côte d’Ivoire: in respect of its bank financing agreements signed in 2016 and 2019, of
which the total amount outstanding at December 31, 2022 is 71 billion CFA francs (i.e. 252 million
euros), Orange Côte d’Ivoire is required to comply with a "net debt to reported EBITDA" ratio;
−
Orange Cameroon: in respect of its bank financing agreements signed in 2015 and 2018, of which the total
amount outstanding at December 31, 2022 is 23 billion CFA francs (i.e. 35 million euros), Orange
Cameroon is required to comply with a "net debt to reported EBITDA" ratio.
These ratios ware complied with at December 31, 2022.
Default or material adverse change clauses
Most of Orange’s financing agreements, notably including the
6 billion euro syndicated credit facility set up on November 23, 2022, as well as bonds, are not subject to
early redemption obligations in the event of a material adverse change or cross default provisions. Most of these
agreements include cross acceleration provisions, however. Thus, the mere occurrence of events of default in other
financing agreements would not automatically trigger accelerated repayment under the aforementioned agreements.
14.5 Credit risk and
counterparty risk management
The Group could be exposed to a concentration of counterparty risk in
respect of its trade receivables, cash and cash equivalents, investments and derivatives.
Orange considers that it has limited concentration in counterparty
risk with respect to trade receivables due to its large and diverse customer base (residential, professional and
large business customers) operating in numerous industries and located in many French regions and foreign
countries. The maximum value of the counterparty risk on these financial assets is equal to their recognized net
carrying value. An analysis of net trade receivables past due is provided in Note 4.3. For loans and other
receivables, amounts past due but not provisioned are not material.
Orange SA is exposed to counterparty risk through its
investments and derivatives. Therefore, it performs a strict selection of public, financial or industrial
institutions in which it invests or with which it enters into derivative agreements. This selection takes
particular note of the institutions’ credit ratings.
Therefore:
−
for each non-banking counterparty selected for investments, limits are set, based on the ratings and
maturities of the investments;
−
for each bank counterparty selected for investments and for derivatives, limits are based on equity,
rating, CDS (credit default swaps, an accurate indicator of potential default risk) as well as on periodic
analyses carried out by the Treasury Department;
−
theoretical limits and consumption limits are monitored and reported on a daily basis to the Group
treasurer and the head of the trading room. These limits are adjusted regularly depending on credit events.
For derivatives, master agreements relating to financial instruments
(French Banking Federation) are signed with all counterparties and provide for the netting of payables and
receivables, in case of failure of one of the parties, as well as the calculation of a final balance to be
received or paid. These agreements include a CSA (Credit Support Annex) cash collateral clause that can lead to
either a deposit (collateral paid) or collection (collateral received), on a daily basis. These payment amounts
correspond to the change in the market value of all derivatives.
As a rule, investments are negotiated with high-grade banks.
Exceptionally, subsidiaries occasionally deal with counterparties with the highest ratings available locally.
Effect of mechanisms to offset exposure
to credit risk and counterparty risk of derivatives
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Collateralised Derivatives (net) (a)
|
1,014
|
408
|
(520)
|
|
Fair value of collateralised derivatives assets
|
1,374
|
690
|
283
|
|
Fair value of collateralised derivatives liabilities
|
(360)
|
(282)
|
(803)
|
|
Amount of cash collateral paid/(received) (b)
|
(1,034)
|
(362)
|
611
|
|
Amount of cash collateral paid
|
38
|
27
|
642
|
|
Amount of cash collateral received
|
(1,072)
|
(389)
|
(31)
|
|
Residual exposure to counterparty risk (a) + (b) (1)
|
(20)
|
46
|
91
|
|
Non collateralised Derivatives (net)
|
55
|
(3)
|
10
|
|
Fair value of non collateralised derivatives assets
|
81
|
-
|
11
|
|
Fair value of non collateralised derivatives liabilities
|
(26)
|
(3)
|
(1)
|
(1) The residual
exposure to counterparty risk is mainly due to a time difference between the valuation of derivatives at the
closing date and the date on which the cash collateral exchanges were made.
The change in net cash collateral received between 2021 and 2022
mainly reflects the appreciation of the US dollar and the depreciation of the pound sterling against the euro.
Sensitivity analysis of cash collateral
to changes in market interest rates and exchange rates
A change in market rates (mainly euros) of +/- 1% would affect the
fair value of derivatives hedging interest rate risk as follows:
(in millions of euros) |
|
Rate decrease of 1% |
|
Rate increase of 1% |
Change of fair value of derivatives |
|
(821) |
|
820 |
|
|
|
Rate decrease of 1% |
|
Rate increase of 1% |
Amount of cash collateral paid (received) |
|
821 |
|
(820) |
|
A 10% increase or decrease in the euro exchange rate would affect the
fair value of derivatives hedging foreign exchange risk as follows:
(in millions of euros) |
Change of fair value of derivatives |
|
|
|
10% loss in euro |
|
10% gain in euro |
|
|
|
1,302 |
|
(1,065) |
|
|
|
|
|
|
10% loss in euro |
|
10% gain in euro |
Amount of cash collateral received (paid) |
|
|
|
(1,302) |
|
1,065 |
|
14.6 Commodity risk
management (energy contracts)
The majority of the Group’s electricity needs are met through
fixed-price or indexed forward purchase contracts, depending on the situation. In accordance with IFRS 9,
contracts entered into on non-financial assets (electricity) to meet the normal business needs of the company and
used solely for its business, rather than for speculation or arbitrage on energy price fluctuations, are not
considered derivatives. The Group’s commitments under those contracts are presented as off-balance sheet
commitments in Note 16.1.
To meet its commitments in terms of Net Zero Carbon by 2040, the
Group enters into Power Purchase Agreements for electricity generated by renewable sources. These contracts may be
physical (with physical delivery of electricity and therefore not leading to the recognition of derivative
instruments), or virtual.. Energy supply is achieved through a portfolio of contracts mixing PPA, Solar/Energy As
A Service, power purchase contracts with different terms (market), and supply contracts (aggregation and
distribution).
The Group is considering Virtual Power Purchase Agreements (VPSAs).
These contracts result in the recognition of derivatives at fair value through profit or loss since there is no
physical delivery of electricity. At December 31, 2022, the Group only has one Virtual Power Purchase Agreement in
Poland. This contract is the subject of a cash flow hedge, the ineffective portion of which has a direct impact on
the income statement. Fluctuations in the fair value of the effective portion of the hedge are recognized in other
comprehensive income (see Note 13.8.2).
14.7 Equity market
risk
Orange SA has no call options on its own shares and no
commitments for forward purchases of shares. At December 31, 2022, it held 1,965,171 treasury shares.
Orange SA owns subsidiaries listed on equity markets whose share value may be affected by general trends in
these markets. In particular, the market value of these listed subsidiaries’ shares is one of the
measurement variables used in impairment testing.
The UCITS in which Orange invests for cash management purposes do not
hold equities.
The Orange group is also exposed to equity risk through some of its
retirement plan assets (see Note 6.2).
At December 31, 2022, the Group is not materially exposed to market
risk on the shares of listed companies.
14.8 Capital
management
Orange SA and its non-financial subsidiaries are not subject to
regulatory requirements related to equity (other than the usual standards applicable to any commercial company).
Its financial subsidiaries (like electronic money institutions) are
subject to regulatory equity requirements specific to their sector and jurisdiction.
Like any company, Orange manages its financial resources (both equity
and net financial debt) as part of a balanced financial policy, aiming to ensure flexible access to capital
markets, including for the purpose of selectively investing in development projects, and to provide a return to
shareholders.
In terms of net financial debt (see Note 13.3), this policy
translates into liquidity management as described in Note 14.3 and a specific attention to credit ratings assigned
by rating agencies.
This policy is also reflected, in some markets, by the presence of
minority shareholders in the capital of subsidiaries controlled by Orange. This serves to limit the Group’s
debt while providing a benefit from the presence of local shareholders.
14.9 Fair value of
financial assets and liabilities
The market value of the net financial debt carried by Orange is
estimated at 23.8 billion euros at December 31, 2022, for a carrying value of 25.3 billion euros.
| |
|
|
December 31, 2022
|
|
(in millions of euros)
|
Note
|
Classification under IFRS 9 (1)
|
Book value
|
Estimated fair value
|
Level 1 and cash
|
Level 2
|
Level 3
|
|
Trade receivables
|
|
AC
|
6,237
|
6,237
|
-
|
6,237
|
-
|
|
Financial assets
|
13.7
|
|
5,545
|
5,545
|
65
|
5,124
|
355
|
|
Equity securities
|
|
FVOCI
|
421
|
421
|
65
|
-
|
355
|
|
Equity securities
|
|
FVR
|
205
|
205
|
-
|
205
|
-
|
|
Investments at fair value
|
|
FVR
|
4,500
|
4,500
|
-
|
4,500
|
-
|
|
Cash collateral paid
|
|
FVR
|
38
|
38
|
-
|
38
|
-
|
|
Financial assets at amortized cost
|
|
AC
|
381
|
381
|
-
|
381
|
-
|
|
Cash and Cash equivalents
|
13.3
|
|
5,846
|
5,846
|
5,846
|
-
|
-
|
|
Cash
|
|
AC
|
2,668
|
2,668
|
2,668
|
-
|
-
|
|
Cash equivalents
|
|
FVR
|
3,178
|
3,178
|
3,178
|
-
|
-
|
|
Trade payables
|
|
AC
|
(11,551)
|
(11,551)
|
-
|
(11,551)
|
-
|
|
Financial liabilities
|
13.3
|
|
(36,638)
|
(35,121)
|
(27,681)
|
(7,432)
|
(8)
|
|
Financial debts
|
|
AC
|
(36,630)
|
(35,113)
|
(27,681)
|
(7,432)
|
-
|
|
Other
|
|
FVR
|
(8)
|
(8)
|
-
|
-
|
(8)
|
|
Derivatives (net amount) (2)
|
13.8
|
|
1,069
|
1,069
|
-
|
1,069
|
-
|
(1) "AC" stands for "amortized cost," "FVR" stands for "fair value through profit or loss," "FVOCI" stands
for "fair value through other comprehensive income that will not be reclassified to profit or loss."
(2) The classification for derivatives depends on their hedging qualification.
The table below provides an analysis of the change in level 3 market
values for financial assets and liabilities measured at fair value in the statement of financial position.
|
|
|
|
(in millions of euros)
|
Equity securities
|
Financial liabilities at fair value through profit or loss,
excluding derivatives
|
|
Level 3 fair values at December 31, 2021
|
377
|
(9)
|
|
Gains (losses) taken to profit or loss
|
(36)
|
1
|
|
Gains (losses) taken to other comprehensive income
|
19
|
|
|
Acquisition (sale) of securities
|
(7)
|
|
|
Other
|
2
|
|
|
Level 3 fair values at December 31, 2022
|
355
|
(8)
|
The market value of the net financial debt carried by Orange is
estimated at 31.5 billion euros at December 31, 2021, for a book value of 24.3 billion euros.
| |
|
|
December 31, 2021
|
|
(in millions of euros)
|
Note
|
Classification under IFRS 9
|
Book value
|
Estimated fair value
|
Level 1 and cash
|
Level 2
|
Level 3
|
|
Trade receivables
|
|
AC
|
6,040
|
6,040
|
-
|
6,040
|
-
|
|
Financial assets
|
13.7
|
|
3,291
|
3,291
|
55
|
2,859
|
377
|
|
Equity securities
|
|
FVOCI
|
432
|
432
|
55
|
-
|
377
|
|
Equity securities
|
|
FVR
|
203
|
203
|
-
|
203
|
-
|
|
Investments at fair value
|
|
FVR
|
2,266
|
2,266
|
-
|
2,266
|
-
|
|
Cash collateral paid
|
|
FVR
|
27
|
27
|
-
|
27
|
-
|
|
Financial assets at amortized cost
|
|
AC
|
363
|
363
|
-
|
363
|
-
|
|
Cash and Cash equivalents
|
13.3
|
|
8,188
|
8,188
|
8,188
|
-
|
-
|
|
Cash
|
|
AC
|
2,709
|
2,709
|
2,709
|
-
|
-
|
|
Cash equivalents
|
|
FVR
|
5,479
|
5,479
|
5,479
|
-
|
-
|
|
Trade payables
|
|
AC
|
(11,163)
|
(11,163)
|
-
|
(11,163)
|
-
|
|
Financial liabilities
|
13.3
|
|
(35,348)
|
(42,534)
|
(33,058)
|
(9,466)
|
(9)
|
|
Financial debts
|
|
AC
|
(35,339)
|
(42,524)
|
(33,058)
|
(9,466)
|
-
|
|
Other
|
|
FVR
|
(9)
|
(9)
|
-
|
-
|
(9)
|
|
Derivatives (net amount)
|
13.8
|
|
405
|
405
|
-
|
405
|
-
|
The market value of the net financial debt carried by Orange was
estimated at 30.1 billion euros at December 31, 2020, for a book value of 23.5 billion euros.
| |
|
|
December 31, 2020
|
|
(in millions of euros)
|
Note
|
Classification under IFRS 9
|
Book value
|
Estimated fair value
|
Level 1 and cash
|
Level 2
|
Level 3
|
|
Trade receivables
|
|
AC
|
5,645
|
5,645
|
-
|
5,645
|
-
|
|
Financial assets
|
13.7
|
|
4,803
|
4,803
|
185
|
4,372
|
247
|
|
Equity securities
|
|
FVOCI
|
431
|
431
|
185
|
-
|
247
|
|
Equity securities
|
|
FVR
|
141
|
141
|
-
|
141
|
-
|
|
Investments at fair value
|
|
FVR
|
3,206
|
3,206
|
-
|
3,206
|
-
|
|
Cash collateral paid
|
|
FVR
|
642
|
642
|
-
|
642
|
-
|
|
Financial assets at amortized cost
|
|
AC
|
382
|
382
|
-
|
382
|
-
|
|
Cash and Cash equivalents
|
13.3
|
|
7,891
|
7,891
|
7,891
|
-
|
-
|
|
Cash
|
|
AC
|
2,751
|
2,751
|
2,751
|
-
|
-
|
|
Cash equivalents
|
|
FVR
|
5,140
|
5,140
|
5,140
|
-
|
-
|
|
Trade payables
|
|
AC
|
(11,051)
|
(11,051)
|
-
|
(11,051)
|
-
|
|
Financial liabilities
|
13.3
|
|
(35,260)
|
(41,884)
|
(34,708)
|
(7,162)
|
(14)
|
|
Financial debts
|
|
AC
|
(35,247)
|
(41,870)
|
(34,708)
|
(7,162)
|
-
|
|
Other
|
|
FVR
|
(14)
|
(14)
|
-
|
-
|
(14)
|
|
Derivatives (net amount)
|
13.8
|
|
(510)
|
(510)
|
-
|
(510)
|
-
|
Accounting policies
The fair values of financial
assets and liabilities in the statement of financial position have been classified based on three hierarchy
levels:
−
level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date;
−
level 2: inputs that are observable for the asset or liability, either directly or indirectly;
−
level 3: unobservable inputs for the asset or liability.
The fair value of the
financial assets at fair value through other comprehensive income ("FVOCI" and "FVOCIR") is the quoted
price at year-end for listed securities and, for non-listed securities, uses a valuation technique determined
according to the most appropriate financial criteria in each case (comparable transactions, multiples for
comparable companies, shareholders’ agreement, discounted future cash flows).
For financial assets at
amortized cost ("AC"), the Group considers that the carrying value of cash, trade receivables and various
deposits provides a reasonable approximation of fair value, due to the high liquidity of these items.
Among financial assets at
fair value through profit or loss ("FVR"), with respect to very short-term investments such as deposits,
deposit certificates, commercial paper or negotiable debt securities, the Group considers that the par value of
the investment and any related accrued interest represent a reasonable approximation of fair value.
The fair value of UCITS is
the latest net asset value.
The fair value of equity
securities is the quoted price at year-end for listed securities and, for non-listed securities, uses a
valuation technique determined according to the most appropriate financial criteria in each case (comparable
transactions, multiples for comparable companies, shareholders’ agreement, discounted future cash flows).
For financial liabilities
at amortized cost ("AC") the fair value of financial liabilities is determined using:
−
the quoted price for listed instruments (a detailed analysis is performed in the case of a material
decrease in liquidity to evidence whether the observed price corresponds to the fair value; otherwise the quoted
price is adjusted);
−
the present value of estimated future cash flows, discounted using rates observed by the Group at the end
of the period for other instruments. The results calculated using the internal valuation model are
systematically benchmarked with the values provided by Bloomberg.
The Group considers the
carrying value of trade payables and deposits received from customers to be a reasonable approximation of fair
value, due to the high liquidity of these items.
The fair value of long-term
trade payables is the value of future cash flows discounted at the interest rates observed by the Group at the
end of the period.
Financial liabilities at
fair value through profit or loss ("FVR") mainly concern firm or contingent commitments to purchase
non-controlling interests. Their fair value is measured in accordance with the provisions of the contractual
agreements. When the commitment is based on a fixed price, a discounted value is retained.
The fair value of
derivatives, mostly traded over the counter, is determined using the present value of estimated future
cash flows, discounted using the interest rates observed by the Group at the end of the period. The results
calculated using the internal valuation model are consistently benchmarked with the values provided by bank
counterparties and Bloomberg.
When there are no reliable
market data which identify the probability of default, the CVA (credit value adjustment) and the DVA (debit
value adjustment) are measured based on historical default charts and CDS (credit default swap) trends.
Counterparty credit risk and the Group’s own specific default risk are also continuously monitored based
on the monitoring of debt security credit spreads on the secondary market and other market information. Given
the implementation of collateralization, and based on counterparty policies and the management of the
indebtedness and liquidity risk described in Note 14, CVA and DVA estimates are not material compared with
the measurement of the related financial instruments.
Note 15
Equity
At December 31, 2022, Orange SA’s share capital, based on the
number of issued shares at this date, amounted to 10,640,226,396 euros, divided into 2,660,056,599 ordinary
shares with a par value of 4 euros each.
At December 31, 2022, the share capital and voting rights of Orange
SA broke down as follows:
Breakdown of share
capital
Breakdown of voting rights
|
Float |
|
State, directly or in concert with Bpifrance Participations |
|
|
|
|
|
Treasury shares |
|
Employees of the Group under the Group Savings Plan or in registered form |
15.1 Changes in share
capital
No new shares were issued during the 2022 fiscal year.
15.2 Treasury shares
As authorized by the Shareholders’ Meeting of May 19, 2022, the
Board of Directors instituted a new share buyback program (the 2022 Buyback Program) and canceled the 2021 Buyback
Program, with immediate effect. This authorization is granted for a period of 18 months as from the
aforementioned Shareholders’ Meeting. The 2022 Buyback Program is described in the Orange Universal
Registration Document (URD) filed with the French Financial Markets Authority (Autorité des
marchés financiers - AMF) on March 31, 2022.
|
(in number of shares)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Free share award plans(1)
|
1,285,171
|
2,009,500
|
1,095,099
|
|
Liquidity contract
|
680,000
|
-
|
170,000
|
|
Total treasury shares
|
1,965,171
|
2,009,500
|
1,265,099
|
(1) During the fiscal year
2021, Orange bought back and delivered treasury shares to the beneficiaries of the Together 2021 Employee
Shareholding Plan. At the same time, Orange repurchased shares mainly under the Long-Term Incentive Plans (LTIP)
(see Note 6.3).
Accounting policies
Treasury shares are recorded
as a deduction from equity, at acquisition cost. Gains and losses arising from the sale of treasury shares are
recognized in consolidated reserves, net of tax.
15.3 Dividends
|
Full Year
|
Approved by
|
Description
|
Dividend per share (in euro)
|
Payout date
|
Payment method
|
Total
(in millions of euros)
|
|
2022
|
Board of Directors Meeting on July 27, 2022
|
2022 interim dividend
|
0.30
|
December 7, 2022
|
Cash
|
797
|
|
Shareholders' Meeting on May 19, 2022
|
Balance for 2021
|
0.40
|
June 9, 2022
|
Cash
|
1,063
|
|
Total dividends paid in 2022
|
1,861
|
|
2021
|
Board of Directors Meeting on July 28, 2021
|
2021 interim dividend
|
0.30
|
December 15, 2021
|
Cash
|
797
|
|
Shareholders' Meeting on May 18, 2021
|
Balance for 2020
|
0.50
|
June 17, 2021
|
Cash
|
1,330
|
|
Total dividends paid in 2021
|
2,127
|
|
2020
|
Board of Directors Meeting on October 28, 2020
|
2020 interim dividend
|
0.40
|
December 9, 2020
|
Cash
|
1,064
|
| |
Shareholders' Meeting on May 19, 2020
|
Balance for 2019
|
0.20
|
June 4, 2020
|
Cash
|
532
|
|
Total dividends paid in 2020
|
1,595
|
|
2019
|
Board of Directors Meeting on July 24, 2019
|
2019 interim dividend
|
0.30
|
December 4, 2019
|
Cash
|
796
|
| |
Shareholders' Meeting on May 21, 2019
|
Balance for 2018
|
0.40
|
June 6, 2019
|
Cash
|
1,061
|
|
Total dividends paid in 2019
|
1,857
|
The amount available to provide a return to shareholders in the form
of dividends is calculated on the basis of the total net income and retained earnings, under French GAAP, of the
entity Orange SA, the Group’s parent company.
15.4 Subordinated
notes
Nominal value of subordinated notes
Issues and repurchases of subordinated notes are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
Initial issue date
|
Initial nominal value
|
Initial nominal value
|
Initial currency
|
Rate
|
December 31, 2020
|
Issue
Redemption
|
December 31, 2021
|
Issue
Redemption
|
December 31, 2022
|
Residual nominal value
|
| |
(in millions of currency)
|
(in millions of euros)
|
|
|
(in millions of euros)
|
|
(in millions of euros)
|
|
(in millions of
euros)
|
(in millions of currency)
|
|
2/7/2014
|
1,000
|
1,000
|
EUR
|
4.25 %
|
-
|
-
|
-
|
-
|
-
|
-
|
|
2/7/2014
|
1,000
|
1,000
|
EUR
|
5.25 %
|
1,000
|
-
|
1,000
|
-
|
1,000
|
1,000
|
|
2/7/2014
|
650
|
782
|
GBP
|
5.88 %
|
514
|
(514)
|
-
|
-
|
-
|
-
|
|
10/1/2014
|
1,000
|
1,000
|
EUR
|
4.00 %
|
118
|
(118)
|
-
|
-
|
-
|
-
|
|
10/1/2014
|
1,250
|
1,250
|
EUR
|
5.00 %
|
1,250
|
-
|
1,250
|
-
|
1,250
|
1,250
|
|
10/1/2014
|
600
|
771
|
GBP
|
5.75 %
|
721
|
(174)
|
547
|
(547)
|
-
|
-
|
|
4/15/2019
|
1,000
|
1,000
|
EUR
|
2.38 %
|
1,000
|
-
|
1,000
|
-
|
1,000
|
1,000
|
|
9/19/2019
|
500
|
500
|
EUR
|
1.75 %
|
500
|
-
|
500
|
-
|
500
|
500
|
|
10/15/2020
|
700
|
700
|
EUR
|
1.75 %
|
700
|
-
|
700
|
-
|
700
|
700
|
|
5/11/2021
|
500
|
500
|
EUR
|
1.38 %
|
-
|
500
|
500
|
-
|
500
|
500
|
|
Issues and purchases of subordinated notes
|
5,803
|
(306)
|
5,497
|
(547)
|
4,950
|
|
All notes, listed on Euronext Paris, are deeply subordinated notes
(senior compared to ordinary shares) i.e. : the holders will only be remunerated (whether for the nominal,
interest or any other amount) after all other creditors, including holders of participating loans and securities,
simply subordinated or not, representing a claim on Orange.
At each interest payment date, remuneration may be either paid or
deferred, at the option of the issuer. Deferred coupons are capitalized and become due and payable in full under
certain circumstances defined contractually and under the control of Orange.
Gains (losses) on disposal, premiums and issuance costs related to
issues/repurchases of subordinated notes are presented under "reserves" in equity.
The Group understands that some rating agencies assign an "equity"
component from 0 to 50% to capital instruments.
Issues of subordinated notes
−
On February 7, 2014, as part of its EMTN (Euro Medium Term Notes) program, Orange issued the equivalent of
2.8 billion euros of deeply subordinated notes in three tranches. A revision of interest rates based on market
conditions is provided for contractually on each call option exercise date.
Orange has a call option on each of these tranches
respectively from February 7, 2020, February 7, 2024, and February 7, 2022 and upon the occurrence of certain
contractually-defined events.
Step-up clauses provide for coupon adjustments of 0.25% in
2025 and an additional 0.75% in 2040 for the first tranche, 0.25% in 2024 and an additional 0.75% in 2044 for the
second tranche, and 0.25% in 2027 and an additional 0.75% in 2042 for the third tranche.
−
On October 1, 2014, as part of its EMTN program, Orange issued the equivalent of 3 billion euros of deeply
subordinated notes in three tranches. A revision of interest rates based on market conditions is provided for
contractually on each call option exercise date.
Orange has a call option on each of these tranches
respectively from October 1, 2021, October 1, 2026, and April 1, 2023 and upon the occurrence of certain
contractually-defined events.
Step-up clauses provide for coupon adjustments of 0.25% in
2026 and an additional 0.75% in 2041 for the first tranche, 0.25% in 2026 and an additional 0.75% in 2046 for the
second tranche, and 0.25% in 2028 and an additional 0.75% in 2043 for the third tranche.
Both issuances were the subject of a prospectus approved by the AMF
(under visa nos. 14-036 and 14-525).
Under IFRS, these instruments are recognized at their historical
value. The tranches denominated in pounds sterling were recognized at the ECB fix rate on the issue date (0.8314
pound sterling for the issue of February 7, 2014 and 0.7782 pound sterling for the issue of October 1, 2014) and
will not be remeasured through the life of the note.
On November 21, 2022, Orange launched a redemption offer for the 426
million pounds sterling remaining on the tranche with an initial nominal value of 600 million pounds sterling
(i.e. 547 million euros of an initial historical value of 771 million). On November 30, 2022, following this
offer, the Group was able to repurchase 387 million pounds sterling of these subordinated notes (historical value
of 496 million euros). The nominal amount remaining after this purchase, i.e. 39 million pounds sterling
(historical value of 50 million euros), represented less than 10% of the initial nominal amount. In accordance
with the agreement, this allowed Orange to announce on December 1, 2022 its intention to exercise its early
redemption option on the remaining amount outstanding on January 17, 2023. Accordingly, the remaining amount
outstanding of these subordinated notes in pounds sterling was reclassified to short-term financial liabilities at
December 31, 2022 (the redemption having taken place on January 17, 2023).
−
On April 15, 2019, as part of its EMTN program, Orange issued the equivalent of 1 billion euros of deeply
subordinated notes. A revision of interest rates based on market conditions is provided for contractually on each
call option exercise date.
Orange has a call option on this tranche from April 15,
2025 (first date for the revision of the rates of the tranche in question) and upon the occurrence of certain
contractually-defined events.
Step-up clauses provide for a coupon adjustment of 0.25% in
2030 and an additional 0.75% in 2045.
−
On September 19, 2019, as part of its EMTN program, Orange issued the equivalent of 500 million euros of
deeply subordinated notes. A revision of interest rates based on market conditions is provided for contractually
on each call option exercise date.
Orange has a call option on this tranche from March 19,
2027 (first date for the revision of the rates of the tranche in question), and upon the occurrence of certain
contractually-defined events.
Step-up clauses provide for a coupon adjustment of 0.25% in
2032 and an additional 0.75% in 2047.
These issuances were the subject of a prospectus approved
by the AMF (respectively, under visa nos. 14-036, 14-525, 19-152 and 19-442).
On December 12, 2019, the Group announced its intention to
exercise, on February 7, 2020, in accordance with contractual provisions, its call option concerning the remaining
500 million euros of the tranche with an initial nominal value of 1 billion euros, already partially bought back
in April 2019. As a result of Orange’s commitment to buy back this last tranche, it was reclassified as a
debt instrument and was therefore presented as a short-term financial liability at December 31, 2019. The coupons
due relating to this tranche were recognized in other current liabilities for 21 million euros at December 31,
2019 and were paid in 2020.
−
On October 15, 2020, as part of its EMTN program, Orange issued the equivalent of 700 million euros of
deeply subordinated notes. A revision of interest rates based on market conditions is provided for contractually
from October 15, 2028.
Orange has a call option on this tranche from July 15, 2028
(first date for the revision of the rates of the tranche in question), and upon the occurrence of certain
contractually-defined events.
Step-up clauses provide for a coupon adjustment of 0.25% in
2033 and an additional 0.75% in 2048.
This issuance of subordinated notes was the subject of a
prospectus approved by the AMF (visa no. 20-509).
−
On May 11, 2021, as part of its EMTN program, Orange issued the equivalent of 500 million euros of
deeply subordinated notes with a coupon of 1.375% until the first adjustment date. A revision of interest rates
based on market conditions is provided for contractually from May 11, 2029. Step-up clauses provide for a coupon
adjustment of 0.25% in 2034 and an additional 1.00% in 2049.
Orange has a call option on this tranche from May 11, 2029
(first date for the revision of the rates of the tranche in question) and upon the occurrence of certain
contractually defined events.
This issuance of subordinated notes was the subject of a
prospectus approved by the AMF on May 7, 2021 (visa no. 21-141).
Subordinated notes remuneration
The remuneration of holders is recorded in equity five working days
before the annual payment date, unless Orange exercises its right to defer the payment.
The tax impact relating to the remuneration of subordinated notes is
recorded through profit or loss in the period.
Since their issuance, Orange has not exercised its right to defer the
coupon payments related to subordinated notes.
The remuneration of subordinated notes is as follows:
| |
|
|
|
|
2022
|
2021
|
2020
|
|
Initial issue date
|
Initial nominal value
(in millions of currency)
|
Initial nominal value
(in millions of euros)
|
Initial currency
|
Rate
|
(in millions of currency)
|
(in millions of euros)
|
(in millions of currency)
|
(in millions of euros)
|
(in millions of currency)
|
(in millions of euros)
|
|
2/7/2014
|
1,000
|
1,000
|
EUR
|
4.25 %
|
-
|
-
|
-
|
-
|
-
|
-
|
|
2/7/2014
|
1,000
|
1,000
|
EUR
|
5.25 %
|
(53)
|
(53)
|
(53)
|
(53)
|
(53)
|
(53)
|
|
2/7/2014
|
650
|
782
|
GBP
|
5.88 %
|
-
|
-
|
(32)
|
(36)
|
(47)
|
(55)
|
|
10/1/2014
|
1,000
|
1,000
|
EUR
|
4.00 %
|
-
|
-
|
(3)
|
(3)
|
(21)
|
(21)
|
|
10/1/2014
|
1,250
|
1,250
|
EUR
|
5.00 %
|
(63)
|
(63)
|
(63)
|
(63)
|
(63)
|
(63)
|
|
10/1/2014
|
600
|
771
|
GBP
|
5.75 %
|
(41)
|
(49)
|
(33)
|
(38)
|
(36)
|
(39)
|
|
4/15/2019
|
1,000
|
1,000
|
EUR
|
2.38 %
|
(24)
|
(24)
|
(24)
|
(24)
|
(24)
|
(24)
|
|
9/19/2019
|
500
|
500
|
EUR
|
1.75 %
|
(9)
|
(9)
|
(9)
|
(9)
|
(4)
|
(4)
|
|
10/15/2020
|
700
|
700
|
EUR
|
1.75 %
|
(12)
|
(12)
|
(12)
|
(12)
|
-
|
-
|
|
5/11/2021
|
500
|
500
|
EUR
|
1.38 %
|
(7)
|
(7)
|
-
|
-
|
-
|
-
|
|
Subordinated notes remuneration classified in equity
|
|
(215)
|
|
(238)
|
-
|
(258)
|
|
Coupons on subordinated notes reclassified as short-term borrowings
|
|
2
|
|
-
|
-
|
(21)
|
|
Subordinated notes remuneration paid
|
|
(213)
|
|
(238)
|
-
|
(279)
|
The tax effects from the conversion of subordinated notes whose par
value is denominated in pounds sterling, and from the gains and losses on disposal, premiums and issuance costs on
subordinated notes that have been refinanced, are presented under "other movements" in the consolidated statement
of changes in shareholders’ equity and amounted to (2) million euros in 2022,
29 million euros in 2021 and (2) million euros in 2020.
Accounting policies
Subordinated notes
The Group issued subordinated
notes in several tranches.
These instruments have no
maturity and the coupon settlement may be deferred at the option of the issuer. They are booked in equity.
As equity instruments are
recognized at historical value, the tranche denominated in foreign currency is never remeasured. Where
appropriate, a translation adjustment impact is booked in equity when a call option is exercised.
The remuneration of holders
is recorded directly in equity at the time of the decision to pay the coupons.
The tax impact related to the
remuneration is accounted for through profit or loss, and that related to the remeasurement of the foreign
currency portion is accounted for in equity.
Equity component of
perpetual bonds redeemable for shares (TDIRAs) (see Note 13.4)
The equity component is
determined as the difference between the fair value of the instrument taken as a whole and the fair value of the
debt component. The equity component thus determined and recognized at inception is not subsequently re-measured
and remains in equity, even when the instrument is extinguished.
15.5 Translation
adjustments
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Gain (loss) recognized in other comprehensive income during the period
|
(370)
|
196
|
(414)
|
|
Reclassification to net income for the period
|
(4)
|
4
|
0
|
|
Total translation adjustments
|
(374)
|
200
|
(414)
|
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Polish zloty
|
603
|
645
|
668
|
|
Egyptian pound(1)
|
(730)
|
(444)
|
(503)
|
|
Slovak Koruna
|
220
|
220
|
220
|
|
Leone
|
(217)
|
(150)
|
(143)
|
|
Other
|
(134)
|
(155)
|
(327)
|
|
Total translation adjustments
|
(258)
|
116
|
(85)
|
|
o/w share attributable to the owners of the parent company
|
(455)
|
(96)
|
(256)
|
|
o/w share attributable to non-controlling interests
|
198
|
211
|
171
|
(1)
Includes the effects of the devaluation of the Egyptian pound in 2022.
Accounting policies
The functional currency of
foreign operations located outside the euro area is generally the local currency, unless the major cash flows
are made with reference to another currency (such as the Orange Romania - euros and in the Democratic Republic
of the Congo - American dollars).
The financial statements of
foreign operations whose functional currency is neither the euro nor the currency of a hyper-inflationary
economy are translated into euros (the Group’s presentation currency) as follows:
−
assets and liabilities are translated at the year-end rate;
−
items in the income statement are translated at the average rate for the period;
−
the translation adjustment resulting from the use of these different rates is included in other
comprehensive income.
Translation adjustments are
reclassified to profit or loss when the entity disposes or partially disposes (loss of control, loss of joint
control, loss of significant influence) of its interest in a foreign operation through the sale, liquidation,
repayment of capital or discontinuation of all, or part of, that activity. The decrease in the carrying value of
a foreign operation, either due to its own losses or because of the recognition of an impairment loss, does not
result in a reclassification through profit or loss of the accumulated translation adjustments.
Reclassification of
translation adjustments is presented in profit or loss within:
−
net income of discontinued operations, when a line of business or major geographical area is disposed of;
−
gains (losses) on disposal of fixed assets, investments and activities, when other businesses are
disposed of;
−
reclassification of cumulative translation adjustment from liquidated entities, in the event of the
liquidation or discontinuation of an activity without disposal.
15.6 Non-controlling
interests
The data presented below concern all entities of the following
groups:
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Credit part of net income attributable to non-controlling interests (a)
|
509
|
577
|
297
|
|
o/w sub-group Sonatel
|
269
|
243
|
197
|
|
o/w group Orange Polska
|
94
|
222
|
-
|
|
o/w sub-group Orange Côte d'Ivoire
|
50
|
53
|
43
|
|
o/w Médi Telecom
|
33
|
19
|
10
|
|
o/w Jordan Telecom
|
29
|
16
|
11
|
|
o/w group Orange Belgium
|
20
|
12
|
26
|
|
Debit part of net income attributable to non-controlling interests (b)
|
(38)
|
(33)
|
(63)
|
|
o/w sub-group Romania
|
(33)
|
-
|
-
|
|
o/w Orange Bank
|
-
|
(22)
|
(51)
|
|
o/w group Orange Polska
|
-
|
-
|
(3)
|
|
Total part of net income attributable to non-controlling interests
(a) + (b)
|
471
|
545
|
233
|
|
Credit part of comprehensive income attributable to non-controlling interests (a)
|
524
|
612
|
256
|
|
o/w sub-group Sonatel
|
263
|
263
|
176
|
|
o/w group Orange Polska
|
114
|
215
|
-
|
|
o/w sub-group Orange Côte d'Ivoire
|
52
|
55
|
39
|
|
o/w Jordan Telecom
|
39
|
27
|
-
|
|
o/w Médi Telecom
|
24
|
23
|
-
|
|
o/w group Orange Belgium
|
19
|
13
|
25
|
|
Debit part of comprehensive income attributable to non-controlling interests (b)
|
(37)
|
(31)
|
(98)
|
|
o/w sub-group Romania
|
(31)
|
-
|
-
|
|
o/w Orange Bank
|
-
|
(22)
|
(50)
|
|
o/w group Orange Polska
|
-
|
-
|
(35)
|
|
o/w Jordan Telecom
|
-
|
-
|
(3)
|
|
Total part of comprehensive income attributable to non-controlling
interests (a) + (b)
|
487
|
580
|
158
|
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Dividends paid to non-controlling interests
|
328
|
218
|
225
|
|
o/w sub-group Sonatel
|
185
|
166
|
165
|
|
o/w sub-group Orange Côte d'Ivoire
|
51
|
29
|
9
|
|
o/w Orange Polska
|
35
|
-
|
-
|
|
o/w Médi Telecom
|
33
|
-
|
24
|
|
o/w Jordan Telecom
|
18
|
11
|
9
|
|
o/w group Orange Belgium
|
-
|
7
|
14
|
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Credit part of equity attributable to non-controlling interests (a)
|
3,183
|
3,030
|
2,653
|
|
o/w group Orange Polska
|
1,250
|
1,170
|
953
|
|
o/w sub-group Sonatel
|
907
|
826
|
755
|
|
o/w sub-group Orange Côte d'Ivoire
|
253
|
257
|
230
|
|
o/w sub-group Romania(1)
|
217
|
267
|
-
|
|
o/w Jordan Telecom
|
193
|
171
|
154
|
|
o/w Médi Telecom
|
140
|
148
|
127
|
|
o/w group Orange Belgium
|
155
|
138
|
285
|
|
Debit part of equity attributable to non-controlling interests (b)
|
(11)
|
(10)
|
(10)
|
|
Total equity attributable to non-controlling interests (a) + (b)
|
3,172
|
3,020
|
2,643
|
(1)
Includes the effect of the integration of Telekom Romania Communications from 30 September, 2021.
In 2022, there were no significant changes in the scope of
non-controlling interests.
In 2021, the main movements in non-controlling interests related to
the purchase of Orange Belgium minority interests, mainly under the public tender offer launched in
April 2021, as well as the purchase of the remaining minority interests in Orange Bank and the acquisition of
54% of Telekom Romania Communications by Orange Romania in September 2021 (see Note 3.2).
Accounting policies
Commitments to purchase
non-controlling interests (put options)
When the Group grants firm or
contingent commitments to purchase holdings from non-controlling shareholders, the carrying value of the
non-controlling interests is reclassified to financial debt.
When the amount of the
commitment exceeds the amount of the non-controlling interests, the difference is recorded as a reduction in
equity attributable to the owners of the parent company. Financial debt is remeasured at each reporting period
end in accordance with the contractual arrangements (at fair value or at present value if fixed price) and, in
the absence of any guidance provided by IFRS, with a counterparty in net finance costs.
Non-controlling interests
that are debtors
Total comprehensive income of
a subsidiary is attributed to the owners of the parent company and to the non-controlling interests. In
accordance with IFRS 10, this can result in the non-controlling interests having a deficit balance.
Transactions with
shareholders of a controlled entity
Each transaction with
minority shareholders of an entity controlled by the Group, when not resulting in a loss of control, is
accounted for as an equity transaction with no effect on consolidated comprehensive income.
15.7 Earnings per
share
Net income
The Group net income used to calculate basic and diluted earnings per
share is determined according to the following method:
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Net income - basic
|
2,146
|
233
|
4,822
|
|
Effect of subordinated notes
|
(200)
|
(225)
|
(255)
|
|
Net income attributable to the owners of the parent company - basic
(adjusted)
|
1,946
|
8
|
4,567
|
|
Impact of dilutive instruments:
|
|
|
|
| |
TDIRA
|
12
|
-
|
9
|
|
Net income attributable to the owners of the parent company -
diluted
|
1,957
|
8
|
4,577
|
|
|
|
|
|
Number of shares
The weighted average number of shares used to calculate the basic and
diluted earnings per share is presented below:
|
(number of shares)
|
2022
|
2021
|
2020
|
|
Weighted average number of ordinary shares outstanding
|
2,658,328,369
|
2,656,981,542
|
2,656,122,534
|
|
Impact of dilutive instruments on number of ordinary shares:
|
|
|
|
|
TDIRA
|
27,269,551
|
-
|
26,945,386
|
|
Free share award plans (LTIP)
|
1,233,198
|
776,743
|
720,936
|
|
Weighted average number of shares outstanding - diluted
|
2,686,831,119
|
2,657,758,285
|
2,683,788,856
|
The average market price of the Orange share is higher than the fair
value adopted under the free share award plans for all periods presented (see Note 6.3). The number of shares
corresponding to this difference was thus dilutive at the reporting date of the periods presented.
At December 31, 2022 (as at December 31, 2020), the TDIRAs were
included in the calculation of diluted net earnings per share since they are dilutive. At December 31, 2021,
the TDIRAs were not included in the calculation of diluted net earnings per share (lower consolidated net income
in 2021) since they were anti-dilutive.
Earnings per share
|
(in euros)
|
2022
|
2021
|
2020
|
|
Earning per share - basic
|
0.73
|
0.00
|
1.72
|
|
Earning per share diluted
|
0.73
|
0.00
|
1.71
|
Accounting policies
Earnings per share
The Group discloses both
basic earnings per share and diluted earnings per share for continuing operations and discontinued operations:
−
basic earnings per share are calculated by dividing net income for the year attributable to the
shareholders of the Group, after deduction of the remuneration net of the tax to holders of subordinated notes,
by the weighted average number of ordinary shares outstanding during the period;
−
diluted earnings per share are calculated based on the same net income, adjusted for the finance cost of
dilutive debt instruments, net of the related tax effect. The number of shares used to calculate diluted
earnings per share takes into account the conversion into ordinary shares of potentially dilutive instruments
outstanding during the period. These instruments are considered dilutive when they have the effect of reducing
earnings per share of continuing operations.
When basic earnings per share
are negative, diluted earnings per share are identical to basic earnings per share. In the event of a capital
increase at a price lower than the market price, and in order to ensure comparability of the reporting periods
shown, the weighted average numbers of shares outstanding in current and previous periods are adjusted. Treasury
shares owned, which are deducted from the consolidated equity, do not enter into the calculation of earnings per
share.
Note 16
Unrecognized contractual commitments (
telecom activities)
Only the contractual commitments and off-balance sheet commitments of
the entities controlled by the Group are presented below.
At December 31, 2022, Orange is not aware of having entered into any
commitment that may have a material effect on its current or future financial position, other than the commitments
mentioned in this note.
16.1 Operating
activities commitments
|
|
|
|
|
|
(in millions of euros)
|
Total
|
Less than one year
|
From one to five years
|
More than five years
|
|
Operating activities commitments
|
12,462
|
5,097
|
4,851
|
2,514
|
|
Operating leases commitments
|
148
|
45
|
76
|
26
|
|
Handsets purchase commitments
|
2,573
|
1,820
|
746
|
6
|
|
Transmission capacity purchase commitments
|
1,621
|
236
|
585
|
800
|
|
Other goods and services purchase commitments
|
5,036
|
1,785
|
2,270
|
981
|
|
Investment commitments
|
1,559
|
858
|
587
|
114
|
|
Public Initiative Networks commitments(1)
|
63
|
13
|
20
|
30
|
|
Guarantees granted to third parties in the ordinary course of business
|
1,462
|
338
|
567
|
556
|
(1) Including unrecognized contractual commitments carried by Orange SA in the context of the deployment of
the High and Very High Speed network in France. The unrecognized contractual commitments relating to Orange
Concessions' group are presented in Note 11.3.
Lease commitments
Lease commitments include property leases relating to contracts for
which the underlying asset will be available after December°
31, 2022 and leases for which the Group applies the exemptions allowed by IFRS 16 (see Note 9).
|
|
|
(in millions of euros)
|
Minimum future lease payments
|
|
Property lease commitments
|
122
|
|
o/w technical activities
|
32
|
|
o/w shops/offices activities
|
90
|
Maturities are set forth below:
|
|
|
|
|
|
|
|
|
(in millions of euros)
|
Minimum future lease payments
|
Less than one year
|
Between one and two years
|
Between two and three years
|
Between three and four years
|
Between four and five years
|
More than five years
|
|
Property lease commitments
|
122
|
35
|
24
|
16
|
19
|
6
|
22
|
Lease commitments correspond to the outstanding minimum future lease
payments until the normal date of renewal of the leases or the earliest possible termination date.
Property lease commitments in France represent 31% of all property
lease commitments.
Handsets purchase commitments
Handsets purchase commitments amounted to 2,573 million euros at
December 31, 2022 and correspond mainly to the balance of commitments relating to contracts signed in 2021 and
spread over a 3 year period.
Transmission capacity purchase
commitments
Transmission capacity purchase commitments at December 31, 2022
represented 1,621 million euros. They include an agreement on the use of an FTTH network in Spain for
849 million euros and 364 million euros for the provision of satellite transmission capacity (the
maturity of these commitments extends until 2026, depending on the contract).
Other purchase commitments goods and
services
The Group’s other purchase commitments for goods and services
mainly relate to network operation and maintenance.
At December 31, 2022, these commitments included:
−
energy purchase commitments for an amount of 1,289 million euros;
−
commitments relating to co-financed and leased lines for an amount of 652 million euros;
−
the purchase of broadcasting rights for an amount of 486 million euros;
−
hosting services for active equipment for mobile sites under a "built-to-suit" agreement for an amount of
466 million euros;
−
site management service contracts ("TowerCos") signed in Africa: these commitments represent an amount of
321 million euros;
−
the maintenance of submarine cable for which Orange has joint ownership or user rights, for an amount of
234 million euros;
−
network maintenance for an amount of 218 million euros;
−
commitments to partners in the field of sports for an amount of 179 million euros.
Investment commitments
At the end of December 2022, investment commitments amounted to 1,559
million euros.
In addition of commitments expressed in monetary terms, the Group has
made commitments to national regulatory authorities, such as ensuring a certain coverage of the population by its
fixed and mobile networks, particularly in connection with the assignment of licenses and in respect of quality of
service. These commitments will require capital expenditure in future years to roll out and enhance the networks.
They are not shown in the above statement of commitments related to operating activities if they have not been
expressed in monetary terms, which is usually the case. The Group has accordingly agreed to meet the following
conditions:
In France:
−
when Arcep awarded several spectrum blocks in the 700 MHz and 3.5 GHz bands for the territories of
Réunion and Mayotte in 2022:
- a
network coverage obligation of 7 predefined zones by 2025;
-
an obligation to provide two sites by 2024.
−
the obligations included in the authorization to use 5G spectrum in the 3.4-3.8 GHz band issued to Orange
on November 12, 2020 are as follows:
-
the roll-out of sites (3,000 sites by the end of 2022, 8,000 sites by the end of 2024 and
10,500 sites by the end of 2025), 25% of which must be located in rural areas or industrial areas outside of
very densely populated areas,
-
widespread availability of a 5G service at all sites by the end of 2030, an obligation that may be met either with
the 3.4-3.8 GHz band or another band;
-
the provision of a speed of at least 240 Mbits/s per segment from 75% of sites by the end of 2022, 85% of
sites by the end of 2024, 90% of sites by the end of 2025 and 100% of sites by the end of 2030,
-
coverage of the main highways by the end of 2025 and major roads by the end of 2027,
-
the provision of differentiated services and the activation of the IPv6 (Internet Protocol version 6) network
protocol.
In addition, the commitments made by Orange to participate
in the first stage of the procedure, which enabled it to obtain 50 MHz at a reserve price, became obligations in
the authorization issued:
-
from the end of 2023, Orange will have to provide a fixed offer from sites using the 3.5 GHz band and a fixed
offer to cover premises that benefit from fixed-access radio network services,
-
Orange will have to meet reasonable requests for the provision of services from private sector companies and
public sector structures, provide indoor coverage, offer hosting for mobile virtual network operators (MVNOs) and
be transparent about network failures and planned roll-outs.
−
pursuant to the provisions of Article L. 33-13 of the French Postal and Electronic Communications
Code regarding coverage in sparsely populated areas:
- Orange proposed to commit to
ensuring that, within its FTTH roll-out scope in the AMII (Appel à manifestation
d’intérêt - Call for Investment Intentions) area, and unless refused by third parties,
100% of homes and professional premises would have access to FTTH sales offers by the end of 2020 (including a
maximum 8% of premises connectable on demand) and that 100% of homes and professional premises would be made
connectable by the end of 2022. Subsequent to an opinion from Arcep, these proposals were accepted by the
government in July 2018;
- outside of the AMII area,
Orange proposed that it make roll-out commitments as part of AMEL (Appel à manifestation d'engagements
locaux - Call for Local Commitments) procedures in the Vienne, Haute-Vienne, Deux-Sèvres and
Lot-et-Garonne departments;
- lastly, Orange proposed to make
commitments outside of the AMII and AMEL areas in the following departments: Orne, Hautes-Pyrénées,
Yvelines, Territoire-de-Belfort, Guadeloupe and Martinique.
−
on January 14, 2018, the Orange group and the other French mobile operators signed an agreement (the
"New Deal") to ensure better mobile coverage of the French mainland and particularly rural areas. This agreement
includes enhanced coverage obligations, which are included for the 2018-2021 period in our existing licenses in
the 900 MHz, 1,800 MHz and 2,100 MHz bands, and for the post-2021 period in the new 900 MHz,
1,800 MHz and 2,100 MHz licenses awarded on November 15, 2018:
- targeted programs for the
improvement of coverage, with the coverage of 5,000 areas per operator by 2029;
- the widespread roll-out of 4G
by the end of 2020 on almost all existing mobile sites;
- acceleration of the coverage of
transportation routes, ensuring that the main roads and railways have 4G coverage;
- the supply of a fixed 4G
service and the extension of the service to 500 additional sites upon request from the government by 2020;
- the widespread provision of
telephone coverage indoors, proposing voice over Wi-Fi, SMS over Wi-Fi offers and on-demand offers involving the
indoor coverage of buildings;
- improved reception quality
across France, particularly in rural areas, with good coverage (according to Arcep Decision No. 2016-1678 relating
to publications providing information on mobile coverage) by 2024-2027.
−
in 2015, in France, when the spectrum in the 700 MHz band was allocated:
- coverage obligations in
"priority roll-out areas" (40% of the country within 5 years, 92% within 12 years and 97.7% within
15 years) and in "white areas" not yet covered by a broadband network (100% within 12 years), at the
level of priority main roads (100% within 15 years) and at the level of the national rail network (60% within
7 years, 80% within 12 years and 90% within 15 years).
−
in 2011, in France, when the spectrum in the 2.6 GHz and 800 MHz bands was allocated:
- an optional commitment to host
mobile virtual network operators (MVNOs) on certain technical and pricing terms under Full MVNO schemes;
- a coverage obligation for
mobile access with theoretical maximum download speeds of at least 60 Mbits/s per user (25% of the country
within 4 years and 75% within 12 years for the 2.6 GHz band; 98% of the country within 12 years and
99.6% within 15 years for the 800 MHz band) which can be met by using both the allocated spectrum and other
spectrum;
- for the 800 MHz band,
specifically: a coverage obligation in priority areas (40% of the country within 5 years, 90% within
10 years) with no obligation to provide roaming services, a coverage obligation in each department (90%
within 12 years, 95% within 15 years) and an obligation to pool resources in communities covered by the
"white area" program.
In Europe:
−
when licenses were awarded in the 700, 900, 1,800 and 2,100 MHz bands in Belgium in 2022:
- a network coverage obligation
of the population with an outdoor download quality of service of 6 Mbits/s (70% within one year, 99.5% within 2
years and 99.8% within 6 years);
- a coverage obligation for 15
railway lines with a minimum speed of 10 Mbits/s for 98% of locations by the end of 2024.
−
when a 4G license was awarded in the 2,100 MHz band in Poland in 2022, a coverage obligation of 20% of
the population with a minimum speed of 144 kb/s.
−
when two spectrum blocks were awarded in the 700 MHz band and one block in the 3.4-3.8 GHz band in Romania
in 2022:
- a network coverage obligation
of 95% in 80 municipalities classified as "white areas" (60 municipalities within 4 years and 80 within
6 years);
- an indoor network coverage
obligation of 70% of the population with a minimum speed of 92 kb/s in rural areas and 85 kb/s in urban areas
within 6 years;
- a network coverage obligation
of 95% of the modern railway network and highways including new projects under construction (85% within 4
years and 95% within 6 years);
- a network coverage obligation
of 85% of international airports with a minimum speed of 100 Mbits/s within 2 years;
- an obligation to develop 2,000
network stations allowing a minimum network speed of 100 Mbits/s nationwide (including 200 stations to be
built in Bucharest within 2 years, 500 stations to be built outside Bucharest within 2 years, 1,200 stations
to be built outside Bucharest within 4 years and 1,800 stations to be built outside Bucharest within
8 years).
−
in 2021 in Spain, when the two license blocks in the 700 MHz band were allocated:
- a network coverage obligation
of municipalities with a population of more than 50,000 (30% in one year, 70% in 3 years and 100% in 4 years);
- network coverage obligation of
airports, ports, railway stations and main roads for municipalities with more than 50,000 inhabitants by the
end of 2025.
−
when a 5G license in the 700 MHz band was awarded in Slovakia in 2020:
- an obligation to provide 5G
services using a new radio access network within 2 years of the award;
- a coverage obligation of 95% of
the population of the regional capitals by the end of 2025, 90% of the population outside the regional capitals
and 70% of the total population by the end of 2027.
In Africa & Middle-East:
−
when a 5G license in the 3 500 MHz band was awarded in Jordan in 2022, a coverage obligation of the main
interests spots within 3 years, a coverage obligation of 50% of the population within 4 years and 75%
within 9 years.
−
in 2020, in Burkina Faso, when the 4G license was granted and the 2G and 3G licenses renewed, a coverage
obligation of 60 new localities over 8 years and main roads over 6 years.
−
in 2016, in Egypt, when the 4G license was granted, a coverage obligation of 4G for 11% of the population
in 1 year, 42.5% in 4 years, 69.5% in 6 years and 70% in 10 years.
Non-compliance with these obligations could result in fines and other
sanctions, ultimately including the withdrawal of licenses awarded. Management believes that the Group is able to
fulfill these commitments to the government authorities.
Guarantees granted to third parties in
the ordinary course of business
Commitments made by the Group to third parties in the ordinary course
of business represented 1,462 million euros at December°
31, 2022. They include 739 million euros of performance guarantees granted to some of its B2B customers,
in particular in the context of network security and remote access.
The amount of guarantees granted by the Group to third parties
(financial institutions, partners, customers and government agencies) to cover the performance of the contractual
obligations of non-consolidated entities is not material. Guarantees granted by the Group to cover the performance
of the contractual obligations of the consolidated subsidiaries are not considered as unrecognized contractual
commitments, as they would not increase the Group’s commitments by comparison with the underlying
obligations of the consolidated subsidiaries.
16.2 Consolidation
scope commitments
Asset and liability warranties granted
in relation to disposals
Under the terms of disposal agreements between Group companies and
the acquirers of certain assets, the Group is subject to warranty clauses relating to assets and liabilities.
Nearly all material disposal agreements provide for caps on these warranties.
At December 31, 2022, the main warranties in effect are as follows:
−
a warranty given to BT as part of the EE sale, backed 50/50 by the Orange group and Deutsche Telekom
as tax and fundamental warranties, except for events ascribable solely to one or the other, and capped at the
contractually set price of disposal of 5.1 billion pounds sterling (5.8 billion euros converted at
the exchange rate at December 31, 2022) for Orange’s share, which will expire in 2023;
−
fundamental warranties granted to the HIN consortium in connection with the disposal of Orange Concessions
(50% of the capital sold in 2021), expiring 3 years after the date of the transaction, and tax warranties expiring
60 days after the end of the statutory limitation periods;
−
warranties granted to the APG group in connection with the disposal of the FiberCo in Poland (50% of the
capital sold in 2021), which will expire at the end of 18 months, with the exception of the tax and
fundamental warranties, which will expire after 7 and 6 years, respectively;
−
miscellaneous standard warranties granted to buyers of real estate sold by the Group.
Orange believes that the risk of all these warranties being enforced
is remote or that the potential consequences of their being enforced are not material with respect to the
Group’s results and financial position.
Asset and liability warranties received in relation to acquisitions
Under the terms of acquisition agreements between Group companies and
the transferors of certain assets, the Group has received warranty clauses relating to assets and liabilities.
Nearly all material acquisition agreements provide for caps on these warranties.
At December 31, 2022, the main warranties in effect are as follows:
−
standard and specific capped warranties obtained from Hellenic Telecommunications Organization S.A. in
connection with the acquisition of Telekom Romania Communications, which will expire on March 31, 2023 (with
respect to general representations and warranties) and September 30, 2028 (with respect to fundamental
warranties). Some specific capped allowances have also been obtained, for up to 10 years.
Orange believes that the risk of all these warranties being enforced
is remote or that the potential consequences of their being enforced are not material with respect to the
Group’s results and financial position.
Commitments relating to securities
Under the terms of agreements with third parties, Orange can make or
receive commitments to purchase or to sell securities. The ongoing commitments at December 31, 2022 are not likely
to have material impacts on the Group’s financial position.
Orange Tunisie
Under the terms of the shareholders’ agreement with Investec
dated May 20, 2009, Orange has a call option giving it the right to purchase at market value 1% of the share
capital of Orange Tunisie plus one share, subject to regulatory authorizations. If this option were exercised,
Orange would take control of Orange Tunisie. Investec would then have the right to sell to Orange 15% of the share
capital of Orange Tunisie at market value.
Orange Concessions
Under the terms of the shareholders' agreement signed on March 27,
2021, which became effective on November 3, 2021, with the HIN consortium (made up of La Banque des Territoires,
Caisse des Dépôts, CNP Assurances and EDF), Orange has a call option that can be exercised in fiscal
year 2026 enabling it to acquire at market value 1% of the voting rights of Orange Concessions, subject to the
award of the authorizations.
FiberCo in Poland
Under the terms of the shareholders' agreement with APG Group signed
on April 11, 2021, Orange has a call option that can be exercised from fiscal year 2027 giving it the right to
purchase at market value 1% of the share capital of Światlowód Inwestycje Sp.z o.o., subject to
the award of the authorizations.
16.3 Financing
commitments
The Group’s main commitments related to financial payables are
set out in Note 14.
Orange has pledged (or given as guarantees) certain investment securities
and other assets to financial lending institutions or used them as collateral to cover bank loans and credit
facilities.
Guarantees granted to some lenders to finance consolidated subsidiaries
are not set out below.
Assets covered by commitments
The items presented below do not include the impact of the regulation
on the transferability of the assets or the possibility of contractual restrictions in network asset sharing
agreements.
As of December 31, 2022 Orange had no material pledges on its
subsidiaries’ securities.
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Assets held under leases
|
1,134
|
998
|
716
|
|
Non-current pledged, mortgaged or receivership assets (1)
|
20
|
21
|
20
|
|
Collateralized current assets
|
2
|
2
|
2
|
|
Total
|
1,157
|
1,021
|
739
|
(1)
Non-current pledged, mortgaged or receivership assets are shown
excluding cash collateral deposits, which are presented in Note 13.
Non-current pledged or mortgaged assets comprise the following assets
given as guarantees:
|
|
|
|
| |
Total in statement of financial position (a)
|
Amount of asset pledged, mortgaged or receivership (b)
|
Percentage
(b)/(a)
|
|
(in millions of euros)
|
|
Intangible assets, net (excluding goodwill)
|
14,892
|
19
|
0%
|
|
Property, plant and equipment, net
|
31,630
|
2
|
0%
|
|
Non-current financial assets
|
977
|
-
|
-
|
|
Other (1)
|
34,480
|
-
|
-
|
|
Total
|
81,978
|
20
|
0%
|
(1)
This item mainly includes net goodwill, interests in
associates, net deferred tax assets, non-current derivatives assets and rights-of-use.
Note 17
Mobile Financial Services activities
17.1 Financial assets
and liabilities of Mobile Financial Services
The financial statements of Mobile Financial Services activities were
put into the format of the Orange group’s consolidated financial statements and therefore differ from a
presentation that complies with the banking format.
In order to improve the readability of financial statements and to
distinguish the performance of telecom activities from Mobile Financial Services activities performance, the notes
on financial assets, liabilities and results are split to reflect these two business scopes.
Thus Note 13 presents the assets, liabilities and results specific to
telecom activities and Note 17 focuses on the financial assets and liabilities of Mobile Financial Services, as
its financial result is not material.
The following table reconciles the balances of assets and liabilities
for each of these two scopes (intra-group transactions between telecom activities and Mobile Financial Services
are not eliminated) with the consolidated statement of financial position at December 31, 2022.
|
|
|
|
|
|
|
|
(in millions of euros)
|
Orange consolidated financial statements
|
o/w telecom activities
|
Note
|
o/w Mobile Financial Services
|
Note
|
o/w eliminations telecom activities / mobile financial
services
|
|
Non-current financial assets related to Mobile Finance Services activities
|
656
|
-
|
|
656
|
17.1.1
|
-
|
|
Non-current financial assets
|
977
|
1,004
|
13.7
|
-
|
|
(27) (1)
|
|
Non-current derivatives assets
|
1,458
|
1,342
|
13.8
|
116
|
17.1.3
|
-
|
|
Current financial assets related to Mobile Financial Services activities
|
2,742
|
-
|
|
2,747
|
17.1.1
|
(6)
|
|
Current financial assets
|
4,541
|
4,541
|
13.7
|
-
|
|
-
|
|
Current derivatives assets
|
112
|
112
|
13.8
|
-
|
17.1.3
|
-
|
|
Cash and cash equivalents
|
6,004
|
5,846
|
14.3
|
158
|
|
-
|
|
Non-current financial liabilities related to Mobile Finance Services activities
|
82
|
-
|
|
109
|
17.1.2
|
(27) (1)
|
|
Non-current financial liabilities
|
31,930
|
31,930
|
13.3
|
-
|
|
-
|
|
Non-current derivatives liabilities
|
397
|
335
|
13.8
|
62
|
17.1.3
|
-
|
|
Current financial liabilities related to Mobile Financial Services activities
|
3,034
|
-
|
|
3,034
|
17.1.2
|
-
|
|
Current financial liabilities
|
4,702
|
4,708
|
13.3
|
-
|
|
(6)
|
|
Current derivatives liabilities
|
51
|
51
|
13.8
|
-
|
17.1.3
|
-
|
(1)
Loan granted by Orange SA to Orange Bank.
The Mobile Financial Services segment includes Orange Bank and other
entities. As the contribution of other entities to the statement of financial position of Mobile Financial
Services and therefore of the Group is not material, only Orange Bank data is presented in detail below.
Accounting policies
Since the concept of current
or non-current does not exist in bank accounting, financial assets and liabilities related to loans and
borrowings to customers or credit institutions (the ordinary activities of a bank) are classified as current for
all periods presented.
With regard to other
financial assets and liabilities, classification as current and non-current has been made in light of both the
original intention of management and the nature of the assets and liabilities in question. For example, with
regard to Orange Bank’s other financial assets, since investments are managed by portfolio, only the
transaction portfolios (financial assets at fair value through profit or loss) have been recorded as current
financial assets.
17.1.1 Financial assets related to Orange
Bank transactions (excluding derivatives)
The financial assets related to the transactions of Orange Bank break
down as follows:
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
|
|
|
|
|
| |
Non-current
|
Current
|
Total
|
Total
|
Total
|
|
Financial assets at fair value through other comprehensive income that will not be
reclassified to profit or loss
|
3
|
-
|
3
|
3
|
2
|
|
Investments securities
|
3
|
-
|
3
|
3
|
2
|
|
Financial assets at fair value through other comprehensive income that may be
reclassified to profit or loss
|
294
|
3
|
296
|
441
|
540
|
|
Debt securities
|
294
|
3
|
296
|
441
|
540
|
|
Financial assets at fair value through profit or loss
|
50
|
-
|
50
|
73
|
94
|
|
Investments at fair value
|
-
|
-
|
-
|
-
|
-
|
|
Cash collateral paid
|
42
|
-
|
42
|
59
|
74
|
|
Other
|
8
|
-
|
8
|
14
|
20
|
|
Financial assets at amortized cost
|
309
|
2,712
|
3,021
|
2,752
|
2,651
|
|
Fixed-income securities
|
309
|
1
|
310
|
387
|
579
|
|
Loans and receivables to customers
|
-
|
2,517
|
2,517
|
2,297
|
2,000
|
|
Loans and receivables to credit institutions
|
-
|
191
|
191
|
66
|
70
|
|
Other
|
-
|
2
|
2
|
1
|
2
|
|
Total financial assets related to Orange Bank activities
|
656
|
2,714
|
3,370
|
3,268
|
3,288
|
Debt securities measured at fair value
through other comprehensive income that will be reclassified to profit or loss
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Debt securities measured at fair value through other comprehensive income that will
be reclassified to profit or loss - in the opening balance
|
441
|
540
|
656
|
|
Acquisitions
|
405
|
732
|
386
|
|
Repayments and disposals
|
(538)
|
(839)
|
(500)
|
|
Changes in fair value
|
(12)
|
-
|
1
|
|
Other items
|
-
|
7
|
(3)
|
|
Debt securities measured at fair value through other comprehensive
income that will be reclassified to profit or loss - in the closing balance
|
296
|
441
|
540
|
|
(in millions of euros)
|
2022
|
2021
|
2020
|
|
Profit (loss) recognized in other comprehensive income during the period
|
(2)
|
1
|
1
|
|
Reclassification adjustment in net income during the period
|
-
|
0
|
0
|
|
Other comprehensive income related to Orange Bank
|
(2)
|
1
|
1
|
Loans and receivables of
Orange Bank
Loans and receivables of Orange Bank are composed of loans and
receivables with customers and credit institutions.
In the context of adapting the bank's accounts into the Group's
financial statements, the following have been considered as loans and advances to customers: clearing accounts and
other amounts due, as well as amounts related to securities transactions on behalf of customers.
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Overdrafts
(1)
|
900
|
828
|
802
|
|
Housing loans
|
956
|
914
|
869
|
|
Investment loans
|
72
|
86
|
129
|
|
Installment receivables(2)
|
519
|
422
|
183
|
|
Current accounts
|
28
|
5
|
10
|
|
Other
|
42
|
42
|
7
|
|
Total loans and receivables to customers
|
2,517
|
2,297
|
2,000
|
|
Overnight deposits and loans
|
83
|
2
|
-
|
|
Loans and receivables
|
44
|
45
|
52
|
|
Other
|
64
|
19
|
18
|
|
Total loans and receivables to credit institutions
|
191
|
66
|
70
|
(1)
Since October 2020, Orange Bank has been engaged in a
self-subscribed securitization program of a portfolio of French personal loans for approximately 600 million
euros.
(2)
Purchase of Orange Spain receivables.
Accounting policies
Financial assets
−
Financial assets at fair value through profit or loss (FVR)
Certain equity securities
which are not consolidated or equity-accounted and cash investments such as negotiable debt securities, deposits
and money market UCITS, which are compliant with the Group’s liquidity risk management policy, may be
designated by Orange Bank as being recognized at fair value through profit or loss. These assets are recognized
at fair value at initial recognition and subsequently. All changes in value are recorded in profit or loss.
−
Financial assets at fair value through other comprehensive income that will not be reclassified to profit
or loss (FVOCI)
Equity securities which are
not consolidated or equity-accounted are, subject to exceptions, recognized as assets at fair value through
other comprehensive income that will not be reclassified to profit or loss. They are recognized at fair value at
initial recognition and subsequently. Temporary changes in value and gains (losses) on disposals are recorded as
other comprehensive income that will not be reclassified to profit or loss.
−
Financial assets at fair value through other comprehensive income that may be reclassified to profit or
loss (FVOCIR)
Assets at fair value through
other comprehensive income that may be reclassified to profit or loss mainly include investments in debt
securities. They are recognized at fair value at initial recognition and subsequently. Temporary changes in
value are recorded in other comprehensive income that may be reclassified to profit or loss. In case of
disposal, the cumulative gain (or loss) recognized in other comprehensive income that may be reclassified to
profit or loss is then reclassified to profit or loss.
−
Financial assets at amortized cost (AC)
This category primarily
comprises various loans and receivables as well as fixed-income securities held for the purpose of collecting
contractual flows. These instruments are recognized at fair value at initial recognition and are subsequently
measured at amortized cost using the effective interest method.
Impairment of financial
assets
In accordance with
IFRS 9, debt instruments classified as financial assets at amortized cost or as financial assets at fair
value through other comprehensive income, lease receivables, financing commitments and financial guarantees
given are systematically subject to impairment or a provision for an expected credit loss. These impairment
losses and provisions are recorded as soon as loans are granted, commitments are concluded or bonds are
purchased, without waiting for the appearance of an objective indication of impairment.
To do this, the financial
assets concerned are divided into three categories according to the change in credit risk observed since their
initial recognition and an impairment loss is recorded on the amount outstanding of each of these categories, as
follows:
−
Performing loans: the calculation of expected losses is made on a 12-month basis, and the financial
income (interest) is calculated on the basis of the gross amount of the instrument;
−
Impaired loans: if the credit risk has significantly deteriorated since the loans were recorded in the
balance sheet, the expected losses, estimated over the duration of the loan, are recognized as an impairment or
a provision and the financial income (interest) is calculated on the basis of the gross amount of the
instrument;
−
Doubtful loans: impairment or a provision is recognized for the expected loss, estimated over the
duration of the loan. The financial income is calculated on the basis of the amount of the instrument net of the
impairment.
17.1.2 Financial liabilities related to
Orange Bank transactions (excluding derivatives)
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Payables to customers
|
1,787
|
1,796
|
1,883
|
|
Debts with financial institutions(1)
|
837
|
1,009
|
885
|
|
Deposit certificate
|
325
|
356
|
358
|
|
Cash collateral deposit
|
82
|
-
|
-
|
|
Other(2)
|
112
|
27
|
30
|
|
Total Financial liabilities related to Orange Bank activities
(3)
|
3,143
|
3,188
|
3,155
|
(1)
Including 661 million euros related to TLTRO refinancing.
(2)
Including 85 million euro of rate hedging credit portfolios
reassessment.
(3)
Including 110 million euros of non-current liabilities in 2022,
27 million euros of non-current financial liabilities in 2021 and 28 million euros in 2020.
Payables related to Orange Bank transactions are composed of customer
deposits and bank's payables with credit institutions.
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Current accounts
|
680
|
764
|
949
|
|
Passbooks and special savings accounts(1)
|
1,010
|
995
|
908
|
|
Other
|
97
|
37
|
26
|
|
Total payables to customers
|
1,787
|
1,796
|
1,883
|
|
Term borrowings and advances
|
700
|
667
|
615
|
|
Securities delivered under repurchase agreements
|
137
|
331
|
270
|
|
Other
|
-
|
11
|
-
|
|
Total debts with credit institutions
|
837
|
1,009
|
885
|
(1)
At the end of December 2022, 42 million euros had been
centralized at Caisse des Dépôts.
17.1.3 Derivatives of Orange Bank
Derivatives qualified as fair value hedges
The main unmatured fair value hedges at the end of 2022 set up by
Orange Bank concern the following interest rate swaps:
−
1,203 million euros in notional value (of which 374 million euros maturing in 2023,
208 million euros maturing between one and five years and 622 million euros at more than five years),
macro-hedging credit portfolios (lease property restructuring, consumer credit and spread payments). The fair
value of these derivatives at December 31, 2022 is 85 million euros;
−
210 million euros in notional value hedging a portfolio of French inflation-indexed fungible Treasury
bonds (Obligations Assimilables du Trésor indexées sur l’inflation française -
OATi) of the same amount and maturity, i.e. 2023. The fair value of these swaps at December 31, 2022 is (57)
million euros;
−
124 million euros in notional value (of which 24 million euros maturing in 2023 and
100 million euros at more than five years), hedging a portfolio of French fungible Treasury bonds OAT
(Obligations Assimilables du Trésor - OAT) of the same amount and maturity. The fair value of these
swaps at December 31, 2022 is (20) million euros;
−
20 million euros in notional value hedging a portfolio of French fungible Treasury bonds OATie
(Obligations Assimilables du Trésor indexées sur l’inflation des prix de la zone euro -
OAT) index-linked to consumer prices harmonized within the euro zone of the same amount and maturity, i.e.
2030. The fair value of these swaps at December 31, 2022 is 1.7 million euros;
−
5 million euros in notional value hedging a portfolio of securities maturing in 2028, whose fair value
at December 31, 2022 is 2 million euros.
The ineffective portion of these hedges recognized in profit or loss
in 2022 is not material.
Cash flow hedge derivatives
At January 1, 2020, Orange Bank had documented a micro-hedging
of its issues through interest rate swaps which, at the end of 2022, represented:
−
219 million euros in notional value (including 33 million euros maturing in 2023,
176 million euros maturing between one and two years and 10 million euros maturing in 2027), hedging
negotiable debt securities issued by the bank, the fair value of which was 8 million euros at December 31,
2022.
Trading derivatives
−
Orange Bank has set up interest rate swaps as economic hedges (not designated as hedges under IFRS) of EIB
securities for a total notional amount of 10 million euros maturing in 2029, the fair value of which was
0.5 million euros at December 31, 2022. The net effects of this economic hedge on profit or loss are not
material;
−
Orange Bank has a portfolio of trading swaps with a total notional value of 16 million euros (of which
6 million euros maturing within five years and 10 million euros at more than five years) and a total
fair value of (0.3) million euros at December 31, 2022;
−
Orange Bank has set up interest rate futures with a notional amount of 1 million euros. The notional
amount of these derivatives only gives an indication of the volume of outstanding contracts on the financial
instrument markets and does not reflect the market risks associated with such instruments or the notional value of
the hedged instruments. The net effects of this economic hedge on profit or loss are not material.
17.2 Information on
market risk management with respect to Orange Bank activities
Orange Bank has its own risk management system in accordance with
banking regulations. In terms of banking regulation, Orange Bank is under the supervision of the French Prudential
Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution
- ACPR) and must at all times comply with a capital requirement in order to withstand the risks associated with
its activities.
Orange Bank’s activities expose it to most of the risks defined
by the ordinance of November 3, 2014, relating to the internal control of companies in the banking, payment
services and investment services sector subject to the control of the ACPR. The most significant of these risks
are:
−
credit risk and counterparty risk: the risk of loss incurred in the event of default by a counterparty or
counterparties considered as the same beneficiary;
−
liquidity risk: the risk that the company will not be able to meet its commitments or not be able to unwind
or offset a position due to the market situation;
−
operational risk: the risk resulting from an inadequacy or failure due to procedures, employees or internal
systems or to outside events, including events that are unlikely to occur but that would incur a high risk of
loss. Operational risk includes the risk of internal and external fraud and IT risk;
−
interest rate risk: the risk incurred in the event of changes in interest rates impacting on-balance sheet
and off-balance sheet transactions, excluding, where applicable, transactions exposed to market risk;
−
non-compliance risk: the risk of judicial, administrative or disciplinary sanctions, material financial
loss or damage to reputation, arising from non-compliance with provisions specific to banking and financial
activities.
−
concentration risk: the risk arising from excessive exposure to a counterparty, to a group of
counterparties operating in the same economic sector or geographic area, or the application of credit risk
reduction techniques, particularly collateral issued by a single entity;
−
market risk: the risk of loss due to movements in market product prices.
The size of the bank and its moderate risk profile led to the choice
of standard methods regarding the application of Regulation No. 575/2013 of the European Parliament and of the
Council of June 26, 2013.
Orange Bank is not involved with complex products. For market
transactions, the bank’s Executive Committee sets the limits while the Risk Management Department monitors
compliance with these limits and the quality of the authorized signatories.
In addition, the Bank has defined and regularly tests its business
continuity system. The Bank has also undertaken, as comprehensively as possible, to identify and asset its
operational risks, for which it also monitors occurrences.
In line with regulations, and in particular titles IV and V of the
Ordinance of November 3, 2014, the bank’s Executive Committee, on the recommendation of the Risk
Management Department, establishes the institution’s risk policy, which is formalized through the risk
appetite framework, and ensures its proper implementation.
The Risk Management Department analyzes and monitors risk, carries
out the necessary controls and produces reports for various committees: The Credit Committee (management of credit
and counterparty risk), the Risk and Audit Committee (management of operational risks), the Financial Security and
Compliance Committee (management of non-compliance risk), the ALM Committee (management of market, interest rate
and liquidity risk) and the Executive Committee.
17.2.1 Credit risk and counterparty risk
management
Since July 2022, Orange Bank has began migrating its consumer credit
distribution platform, previously hosted by Franfinance (Société Générale Group), to
Younited Credit. The roll-out is expected to be completed in 2023. The bank will thus benefit from new
technologies for credit risk management (risk-based pricing, open banking scoring, anti-fraud tools).
At the end of December 2022, the cost of risk of Orange Bank amount
to 42 million euros, including 6 million euros in France and 35 million euros in Spain. Excluding
exceptional adjustments (reversal of Covid provisions or review of models), the cost of risk is 14 million
euros for France and 32 million euros for Spain.
In France, the cost of risk is mainly concentrated in demand deposit
accounts due to the increase in outstanding debit balances and the increase in the number of accounts managed by
the bank.
In Spain, the cost of risk is mainly related to the increase in Orange
Spain’s mobile handset financing outstandings from 469 million euros at December 31, 2021 to 594 million
euros at December 31, 2022.
The bank has also continued to review provisioning models to adapt them to
the new configuration of the credit portfolio and to recent crises. This led to an adjustment of provisioning
levels at December 31, 2022 in order to take better account of the current macroeconomic context (war in Ukraine,
rising interest rates, inflation).
The bank has thus reviewed the forward-looking impact on its provisions,
which amount to 3 million euros in France and 4 million euros in Spain at the end of 2022, compared with 11
million euros in 2021 (provision related to the Covid-19 crisis), leading to an overall reversal of 4 million
euros.
17.2.2 Market and interest rate risk
management
Orange Bank does not carry out proprietary trading operations. Its
market activity mainly consists of investments to optimize liquidity management and purchases of interest rate
hedges.
The value of the securities portfolio continues to decrease in line
with the bank’s strategy, market risk indicators remain stable and the associated risks are not material.
Fixed-interest securities in investment portfolios are hedged. Orange
Bank has no exposure classified as trading book. Interest rate risk, after the capital increase in
November 2022, is less than 3% of CET1 (Common Equity Tier 1 capital). Finally, the basic risk is not
material.
17.2.3 Liquidity risk management
In 2022, Orange Bank continued to manage its liquidity in a prudent
manner. At the end of December 2022, the net stable funding ratio (NSFR) is 133% and the LCR (short-term liquidity
coverage ratio) reaches 373%. Nevertheless, 2022 was characterized by the increase in the liquidity deficit
related to customer transactions. These increased from 640 million euros in early 2022 to 855 million
euros at the end of December 31, 2022. The changes in this deficit can mainly be explained by loan
production, while customer deposits are down, due to the extinctive management of certain portfolios (especially
the enterprise activity).
Orange Bank stepped up the diversification of its financing sources
in anticipation of the growth in loan production and the slowdown of the ECB’s TLTRO programs, notably by
entering into a partnership with Raisin.
17.2.4 Operational risk management
At bank level, the operational risk guidance scope covers:
−
operational risks carried by all the bank’s activities (management, operating and support
activities);
−
operational risks from essential service providers.
Operational risk is managed by the permanent control and operational
risk director, who reports to the Risk, Control and Compliance Director, who in turn reports directly to an
effective Orange Bank staff manager.
The bank’s operational risk management system is based on the
collection of operational incidents and losses, risk mapping, scenario analyses and key risk indicators managed by
the operational risk department and monitored within the context of the bank’s risk appetite. A record is
kept of all of the bank’s operational incidents (proven risks), including IT, IT security and non-compliance
risk. Incidents are reported as soon as they are detected by all bank employees in a dedicated IT tool.
Where non-compliance incidents are identified, the Operational Risks
Department notifies the Compliance Department, which is responsible for monitoring and managing them.
The operational losses sustained by the entity in 2022 amounted to
2.3 million euros. They amounted to 1.3 million euros in 2021 and 1.4 million euros in 2020. The
losses recorded in 2022 are mainly due to external fraud, as well as IT incidents, execution errors and commercial
disputes. This change in the bank’s operational risk profile is a result of the diversification of the
business and the numerous projects launched by the entity. Action plans have been defined jointly with the
business lines to strengthen operational risk management while optimizing the bank’s processes to increase
their resilience to the different types of risk mentioned above.
17.2.5 Non-compliance risk management
Orange Bank’s Compliance function is part of the Compliance,
Financial Security and Investment Services Compliance Department, whose Director is a member of the Executive
Committee. This function is impartial and independent from the operational business lines to safeguard its
objectivity. It is also a local function responsible for ensuring that all of the bank’s business lines
adhere to the compliance system.
The main mission of Compliance is to oversee the management of
non-compliance risk. It ensures that the level of non-compliance risk to which Orange Bank is exposed is
compatible with the guidelines and policies set by the Board of Directors in this area, as well as with the
overall limits for financial, non-financial and operational risk (e.g. reputational risk, regulatory sanctions,
etc.).
In this context, Compliance implements all actions aimed at ensuring
compliance with the requirements of external and internal standards (organization, processes, procedures). These
actions take place along the entire value chain, from the execution of transactions by the various business lines
to their monitoring by Compliance.
As the first level of control, employees and their superiors identify
the risks arising from their activity and comply with the procedures and limits set out in the General Procedures
and operating procedures. They are in particular responsible for:
−
implementing operational controls and first-level controls that can be formalized, tracked and reported on;
−
formalizing and verifying compliance with the procedures for processing transactions, detailing the
responsibilities of those involved and the types of controls carried out;
−
verifying the compliance of transactions;
−
implementing the recommendations drawn up by the second-level control functions for the first-level control
system;
−
reporting to and alerting second-level control functions. As the second level of control, Compliance
verifies in particular that the risks have been identified, assessed and managed by the first level of control in
accordance with the rules and procedures in place.
In particular, Compliance is responsible for overseeing:
−
the compliance of transactions executed by employees in accordance with the laws, regulations and
professional standards;
−
the implementation of compliance recommendations by first-level control;
−
the adoption and monitoring of remedial action plans where non-compliance risks have been identified.
In addition, the compliance function within Orange Bank mainly
consists of:
−
producing and updating internal standards and procedures within its remit;
−
advising and assisting operational business lines in their decision-making;
−
raising awareness and training all employees on compliance issues, depending on the transactions they
execute;
−
reporting regularly to the supervisory authorities;
−
regularly assessing non-compliance risk, mapping risks and fulfilling its duty to alert General Management;
−
monitoring changes in the laws and regulations in coordination with the legal department in order to
incorporate new standards into internal processes (general policies, charters, codes and operating procedures) and
to inform employees and the various business lines of these changes;
−
verifying, as a second-level control function, the implementation of administrative, legislative and
regulatory provisions as well as professional or internal standards.
Compliance also covers the areas of financial security and data
protection, which are, from an organizational viewpoint, managed by the Head of Financial Security, who reports to
the Director of Compliance, Financial Security and Investment Services Compliance.
In relation to training and raising employee awareness, the Human
Resources Department training unit, in conjunction with Compliance, establishes and monitors employee training
courses, which are the foundation of the compliance system. Mandatory training programs are organized for all new
arrivals. In 2022, 29 new employees participated in mandatory training provided in person (or via video
conference due to the Covid crisis) by the Compliance Manager. Similarly, 69 new employees also received training
in the fight against money laundering and terrorist financing. Furthermore, training programs on real estate
loans, consumer credit and the claims management system are provided to the employees concerned.
17.2.6 Remaining term to maturity
The following table details the remaining terms of Orange
Bank’s financial assets and liabilities, calculated on the basis of the contractual maturity dates:
−
maturity-by-maturity for amortizable transactions;
−
for roll-over loans, since renewals cannot be presumed, the renewal dates are taken to be the final
maturity dates;
−
since the derivatives are interest rate swaps and futures, they are not subject to any exchange of notional
amounts. Their fair value has been broken down by maturity.
|
|
|
|
|
|
|
(in millions of euros)
|
Note
|
December 31, 2022
|
2023
|
2024 to 2027
|
2028 and beyond
|
|
Investments securities
|
17.1.1
|
3
|
-
|
3
|
-
|
|
Debt securities
|
17.1.1
|
296
|
272
|
19
|
5
|
|
Investments at fair value
|
17.1.1
|
-
|
-
|
-
|
-
|
|
Fixed-income securities
|
17.1.1
|
310
|
86
|
89
|
136
|
|
Loans and receivables to customers
|
17.1.1
|
2,517
|
524
|
689
|
1,304
|
|
Loans and receivables to credit institutions
|
17.1.1
|
191
|
191
|
-
|
-
|
|
Other financial assets and derivatives
|
|
168
|
59
|
18
|
91
|
|
Total financial assets
|
|
3,485
|
1,132
|
818
|
1,536
|
|
Payable to customers
|
17.1.2
|
1,787
|
1,787
|
-
|
-
|
|
Debts with financial institutions
|
17.1.2
|
837
|
776
|
60
|
-
|
|
Deposit certificate
|
17.1.2
|
325
|
119
|
206
|
-
|
|
Other financial liabilities and derivatives
|
|
256
|
224
|
-
|
32
|
|
Total financial liabilities
|
|
3,205
|
2,906
|
266
|
32
|
17.2.7 Fair value of financial assets and
liabilities of Orange Bank
|
(in millions of euros)
|
|
|
December 31, 2022
|
|
|
|
|
| |
|
Classification under IFRS 9(1)
|
Book value
|
Estimated fair value
|
Level 1 and cash
|
Level 2
|
Level 3
|
|
Loans and receivables
|
17.1.1
|
AC
|
2,708
|
2,708
|
-
|
2,708
|
-
|
|
Financial assets at amortized cost
|
17.1.1
|
AC
|
313
|
313
|
313
|
-
|
-
|
|
Financial assets at fair value through profit or loss
|
17.1.1
|
FVR
|
50
|
50
|
50
|
-
|
-
|
|
Debt securities
|
17.1.1
|
FVOCIR
|
296
|
296
|
296
|
-
|
-
|
|
Investments securities
|
17.1.1
|
FVOCI
|
3
|
3
|
3
|
-
|
-
|
|
Cash and cash equivalent(2)
|
17.1
|
AC
|
79
|
79
|
79
|
-
|
-
|
|
Financial liabilities related to Orange Bank activities
|
17.1.2
|
AC
|
(3,143)
|
(3,143)
|
-
|
(3,143)
|
-
|
|
Derivatives (net amount)(3)
|
17.1.3
|
|
54
|
54
|
-
|
54
|
-
|
(1)
"AC" stands for "amortized cost", "FVR" stands for "fair value
through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be
reclassified to profit or loss", "FVOCIR" stands for "fair value through other comprehensive income that may be
reclassified to profit or loss".
(2)
Includes only cash.
(3)
The classification for derivatives depends on their hedging
qualification.
|
(in millions of euros)
|
|
|
December 31, 2021
|
|
|
|
|
| |
|
Classification under IFRS 9(1)
|
Book value
|
Estimated fair value
|
Level 1 and cash
|
Level 2
|
Level 3
|
|
Loans and receivables
|
17.1.1
|
AC
|
2,363
|
2,363
|
-
|
2,363
|
-
|
|
Financial assets at amortized cost
|
17.1.1
|
AC
|
387
|
387
|
387
|
-
|
-
|
|
Financial assets at fair value through profit or loss
|
17.1.1
|
FVR
|
73
|
73
|
73
|
-
|
-
|
|
Debt securities
|
17.1.1
|
FVOCIR
|
441
|
441
|
441
|
-
|
-
|
|
Investments securities
|
17.1.1
|
FVOCI
|
3
|
3
|
3
|
-
|
-
|
|
Cash and cash equivalent(2)
|
|
AC
|
360
|
360
|
360
|
-
|
-
|
|
Financial liabilities related to Orange Bank activities
|
17.1.2
|
AC
|
(3,188)
|
(3,188)
|
-
|
(3,188)
|
-
|
|
Derivatives (net amount)(3)
|
|
|
(58)
|
(58)
|
-
|
(58)
|
-
|
(1)
"AC" stands for "amortized cost", "FVR" stands for "fair value
through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be
reclassified to profit or loss", "FVOCIR" stands for "fair value through other comprehensive income that may be
reclassified to profit or loss".
(2)
Includes only cash.
(3)
The classification for derivatives depends on their hedging
qualification.
|
(in millions of euros)
|
|
|
December 31, 2020
|
|
|
|
|
| |
|
Classification under IFRS 9 (1)
|
Book value
|
Estimated fair value
|
Level 1 and cash
|
Level 2
|
Level 3
|
|
Loans and receivables
|
17.1.1
|
AC
|
2,070
|
2,070
|
-
|
2,070
|
-
|
|
Financial assets at amortized cost
|
17.1.1
|
AC
|
581
|
580
|
580
|
-
|
-
|
|
Financial assets at fair value through profit or loss
|
17.1.1
|
FVR
|
94
|
94
|
94
|
-
|
-
|
|
Debt securities
|
17.1.1
|
FVOCIR
|
540
|
540
|
540
|
-
|
-
|
|
Investments securities
|
17.1.1
|
FVOCI
|
2
|
2
|
2
|
-
|
-
|
|
Cash and cash equivalent(2)
|
|
AC
|
254
|
254
|
254
|
-
|
-
|
|
Financial liabilities related to Orange Bank activities
|
17.1.2
|
AC
|
(3,155)
|
(3,155)
|
-
|
(3,155)
|
-
|
|
Derivatives (net amount)(3)
|
|
|
(75)
|
(75)
|
-
|
(75)
|
-
|
(1)
"AC" stands for "amortized cost", "FVR" stands for "fair value
through profit or loss", "FVOCI" stands for "fair value through other comprehensive income that will not be
reclassified to profit or loss", "FVOCIR" stands for "fair value through other comprehensive income that may be
reclassified to profit or loss".
(2)
Includes only cash.
(3)
The classification for derivatives depends on their hedging
qualification.
17.3 Orange
Bank’s unrecognized contractual commitments
As at December 31, 2022, Orange Bank is not aware of having entered
into any commitment that may have a material effect on its current or future financial position, other than the
commitments mentioned below.
Commitments given
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Financing commitments (1)
|
53
|
88
|
87
|
|
Guarantee commitments
|
5
|
6
|
8
|
|
On behalf of financial institutions
|
3
|
4
|
4
|
|
On behalf of customers
|
2
|
2
|
3
|
|
Property lease commitments
|
-
|
-
|
-
|
|
Total
|
59
|
94
|
94
|
(1)
Corresponds to credit commitments granted to
customers, credits granted but not yet released and unused portion of financing granted.
Commitments received
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Received from financial institutions (1)
|
932
|
871
|
770
|
|
Received from customers
|
76
|
88
|
102
|
|
Total
|
1,008
|
959
|
872
|
(1)
Corresponds to guarantees received from
Crédit Logement to counter-guarantee the real estate loans distributed.
Assets covered by commitments
|
(in millions of euros)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
|
Assets pledged as security to lending financial institutions as guarantees for bank
loans(1)
|
726
|
848
|
1,160
|
|
Total
|
726
|
848
|
1,160
|
(1)
Corresponds to securities pledged by Orange Bank to financial
lending institutions as guarantees for bank loans.
Note 18
Litigation
This note presents all of the significant disputes in which the Group
is involved with the exception of litigation relating to disputes between Orange and the tax or social security
administrations over tax, income taxes or social security contributions. These disputes are described,
respectively, in Notes 6.2 and 10.3, as appropriate.
At December 31, 2022, the provisions for risks recorded by the Group
for all its disputes (except those presented in Notes 6.2 and 10.3) amount to 387 million euros (versus 405
million euros at December 31, 2021 and 525 million euros at December 31, 2020). Orange believes that any
disclosure of the amount of provisions on a case-by-case basis for ongoing disputes could seriously harm the
Group’s position. The balance and overall movements in provisions are presented in Note 5.2.
France
Mobile services
−
After Orange was found guilty by the French Competition Authority in December 2009 for having engaged in
anti-competitive practices on the mobile and fixed-to-mobile markets in the French Caribbean and in French Guiana,
Digicel and Outremer Telecom brought actions for damages before the Commercial Court of Paris. The dispute with
Outremer Telecom was closed following the judgment handed down in May 2017 by the Paris Court of Appeal, which set
the amount of the fine to be paid to Outremer Telecom at 3 million euros, noting, inter alia, that the damages
should be discounted at the statutory rate of interest.
−
In December 2017, the Commercial Court of Paris ordered Orange to pay Digicel the sum of 180 million euros
(to discount from March 2009 until the date of payment at a higher rate of interest than the statutory rate
ordered by the Paris Court of Appeal in the Outremer Telecom dispute), i.e. a total of 346 million euros. In June
2020, the Paris Court of Appeal reversed the discounting method applied to the damages set forth in the judgment
rendered by the Commercial Court of Paris in December 2017 and ordered Orange to pay Digicel the sum of 249
million euros. Following this judgment, Orange was refunded 97 million euros and filed an appeal with
the French Supreme Court. The proceedings are ongoing.
Fixed services
−
Following the final decision of the French Competition Authority to fine Orange 350 million euros for
having implemented four anti-competitive practices in the "enterprise" market segment on December 17, 2015,
several players (including Céleste and Adista) filed actions for damages against Orange. Céleste
withdrew its claim for damages before the Commercial Court of Paris, which duly noted this withdrawal on June 29,
2022. This dispute is now closed. Only the investigation of Adista against Orange is ongoing.
−
In their dispute over the reimbursement of overpayments for interconnection services provided by Orange,
Orange and Verizon have entered into a memorandum of understanding that, among other things, ends this dispute.
Verizon withdrew its claim before the Paris Court of Appeal on April 8, 2022. This dispute is now closed.
−
In the dispute between Orange and SFR over fixed telephony retail offers for second homes, in September
2021 the Court of Appeal ordered SFR to return the sums awarded to it (i.e. 53 million euros). SFR has filed
another appeal with the French Supreme Court. The proceedings are ongoing.
−
On April 16, 2021, Bouygues Telecom brought an action against Orange before the Paris Judicial Court
concerning the quality of service of its wholesale offers for an amount of 78 million euros for alleged losses,
since revalued at 81 million euros. Orange considers these claims to be unfounded
Other proceedings in France
−
In June 2018, Iliad brought summary proceedings against Orange before the presiding judge of the Paris
Commercial Court, aiming to ban some of its mobile telephony offers proposing mobile handsets at attractive prices
accompanied by a subscription package, on the grounds that they constituted consumer credit offers. The case is
currently being investigated by the judges deciding on the merits of the case, and Iliad claims amount to 790
million euros, what Orange disputes. On 9 February 2023, the Paris Commercial Court has handed down a ruling that
orders Bouygues Telecom to pay Free Mobile damages in a proceeding relating to mobile telephony offers so-called
"subsidized offers". With respect to its own offers, Orange considers that the particularities of its file and the
arguments put forward and other elements relating to the follow-up of the legal procedure are likely to lead to a
different assessment by the Court.
−
Orange Bank is involved in a historical dispute in which the plaintiffs are claiming a total of
approximately 310 million euros for the financial loss they claim to have suffered. As the Group believes these
claims to be without merit and is strenuously challenging them, it has not recognized any financial liability.
−
In August 2020, ASSIA brought an action against Orange SA before the Paris Judicial Court for the alleged
infringement of two patents relating to dynamic xDSL line management. ASSIA is seeking an advance payment of
damages of 500 million euros as compensation for its financial loss, which it estimates at 1,418 million
euros. Orange SA considers its claims to be unfounded and is challenging them. The proceedings are currently being
examined by the judges deciding on the merits of the case.
−
The Evaluation and Compensation Committee, set up during the France Télécom "social crisis"
trial, has completed its analysis and processing of the claims received. It assigned the review of certain claims
considered to be outside its remit to Group experts assisted by two members of the Evaluation and Compensation
Committee.
United Kingdom
−
In December 2018, the directors of former UK retailer Phones 4U, (which is in administration and no
longer trading), filed a complaint against the three main UK mobile network operators, including EE, and their
parent companies, including Orange. The Phones 4U claim (for an unquantified amount) is currently being challenged
in the UK courts. Orange vigorously challenges the allegations raised by Phones 4U which include collusion between
the various operators.
Poland
−
In 2015, the Polish operator P4 filed two compensation claims for a total of 630 million zlotys
(135 million euros) jointly against three operators (including Orange Polska and Polkomtel), seeking
compensation for the loss it claimed to have suffered as a result of the retail rates that these three operators
charge for calls to P4’s network.
Regarding the first compensation claim of P4’s
opponents for 316 million zlotys (68 million euros), in January 2022 the Polish Supreme Court dismissed
Polkomtel’s appeal against the Court of Appeal’s decision which had reversed the judgment of the court
dismissing P4’s claim. The proceedings are ongoing.
Regarding the second compensation claim by P4 for
314 million zlotys (67 million euros), it has been suspended pending the settlement of the first claim.
Romania
−
In the dispute between Orange Romania and the Romanian Competition Council for discriminatory practices in
the mobile payment and advertising markets for the amount of 65 million lei (13 million euros), the Competition
Council has appealed to the Supreme Court after the Court of Appeal reversed its decision on June 24, 2021. The
first hearing is scheduled for June 21, 2023.
Africa & Middle-East
−
A number of shareholder disputes are ongoing between the joint venture comprising Agility and Orange, on
the one hand, and its Iraqi co-shareholder in the capital of the Iraqi operator, Korek Telecom, on the other.
These disputes, which concern various breaches of contractual documents, are the subject of p-litigation
proceedings and arbitral and judicial proceedings in various countries. In addition, on March 19, 2019,
following an administrative decree adopted by the Iraqi Ministry of Trade and Industry, the General Management of
the companies in Erbil (Iraqi Kurdistan) implemented the 2014 decision of the Iraqi regulatory authority (CMC) to
cancel the partnership dated March 2011 between the operator Korek Telecom, Agility and Orange and to restore
the shareholding structure of Korek Telecom as it existed before Orange and Agility had acquired a stake. As a
result, the registration of Korek Telecom shares in the name of the original shareholders was imposed without any
compensation or reimbursement of the amounts invested. Orange thus considers that it was thus unlawfully
expropriated of its investment and, on March 24, 2019, sent a notice of dispute to the Republic of Iraq based
on the Bilateral lnvestment Treaty between France and Iraq. In the absence of an amicable settlement with the
Iraqi State, Orange submitted a request for arbitration with the International Center for the Settlement of
Investment Disputes (ICSID) on October 2, 2020.
−
In Jordan, the telecommunication operator, Zain, brought legal action against Jordan Telecommunications
Company (Orange Jordan) for failure to open geographical numbers allocated by the Jordanian regulator in
application of the interconnection agreement entered into by Zain and Orange Jordan, pursuant to which Zain
considers that it has suffered an estimated loss of 250 million Jordanian dinars (329 million euros). In
September 2021, the Amman Court of First Instance (judiciary order) ordered a legal expert report to establish
whether the amount of the late payment interest requested by Zain had been calculated in accordance with the rules
detailed in the interconnection agreement and whether the arbitration clause in the agreement was applicable. In
June 2021, the Jordanian Supreme Court ruled on the petition by Orange Jordan for the judiciary courts to decline
jurisdiction, considering that the arbitration clause applied to the lawsuit. In November 2021, this ruling was
confirmed by the Court of Appeal which rejected Zain’s petition. Zain has filed another appeal with the
Supreme Court. The proceedings are ongoing.
−
In the dispute between Orange Mali and Remacotem (unlawful billing of calls diverted to voicemail), in
November 2021 the Bamako Court of Appeal ordered Orange Mali and the Mali telecoms company (Sotelma-Malitel SA) to
pay Remacotem the sum of 176 million euros. Following this judgment, Remacotem carried out several seizures
of receivables, which were challenged by Orange Mali before the court responsible for enforcement. In May 2022,
the Bamako Court of Appeal confirmed the annulment of these seizures and granted the operators a six-month grace
period which expired on November 7, 2022. In the intervening period, since the seizures of the receivables
had been deemed inadmissible, in August 2022 Remacotem obtained preventive attachments, which Orange Mali again
challenged. On November 7, 2022, the Court of First Instance of Bamako granted Orange Mali and Sotelma-Malitel SA
an additional four-month grace period. In parallel, proceedings are ongoing before the Supreme Court.
In order to provide its telecommunication services, the Group
sometimes uses the fixed assets of other parties. The terms of use of these assets are not always formalized. The
Group is sometimes subject to claims and might be subject to future claims in this respect, which could result in
a cash outflow in the future. The amount of the potential obligations or future commitments cannot be measured
with sufficient reliability due to the legal complexities involved.
Other than proceedings that may be initiated in respect of disputes
between Orange and the tax or social security authorities over tax, income taxes and social security contributions
(see Notes 6.2 and 10.3), there are no other administrative, legal or arbitration proceedings, including any
proceedings that are pending, suspended or threatened, of which Orange is aware, which may have or have had in the
last 12 months a material impact on the Company’s and/or Group’s financial position or profitability.
Note 19
Subsequent events
Acquisition of OCS and Orange Studio by Canal+ Group
Orange and the Canal+ Group have announced on January 9, 2023 the
signature of a memorandum of understanding anticipating the acquisition by the Canal+ Group of all capital held by
Orange in the OCS pay TV package and in Orange Studio, the film and series co-production subsidiary. The Canal+
Group will become the sole shareholder of both companies following this transaction.
The operation will be notified to the French Competition Authority.
Note 20
Main consolidated entities
At December 31, 2022, the scope of consolidation consisted of 384
entities.
The main changes in the scope of consolidation in 2022 are presented
in Note 3.2.
Regarding subsidiaries with minority interests:
−
the financial statements for the groups Orange Polska, Jordan Telecom, Orange Belgium, Sonatel and, since
December 30,2022, Orange Côte d'Ivoire are published, respectively, at the Warsaw Stock Exchange, the Amman
Stock Exchange, the Brussels Stock Exchange and the regional stock exchange (BRVM), those companies being quoted;
−
the other subsidiaries do not make up a material proportion of Orange’s financial aggregates and
their financial information is not presented in the Notes to Consolidated Financial Statements of the Orange's
group.
Pursuant to Regulation No. 2016-09 of December 2, 2016 of the ANC
(Autorité des normes comptables financières - French accounting standards authority), the
full list of companies included in the scope of consolidation, companies not included in the scope of
consolidation and non-consolidated equity securities is available on the Group’s website
(https://gallery.orange.com/finance#lang=en&v=5c6a1b51-a537-454e-b2d3-6e4664be2c6a).
The list of the principal operating entities shown below was
determined mainly based on their contributions to the following financial indicators: revenue and EBITDAaL.
|
Company
|
|
Country
|
|
Orange SA
|
Parent company
|
France
|
|
Main consolidated entities
|
|
|
|
France
|
% Interest
|
Country
|
|
Générale de Téléphone
|
100.00
|
France
|
|
Orange SA - France Business Unit
|
100.00
|
France
|
|
Orange Caraïbe
|
100.00
|
France
|
|
Orange Concessions and its subsidiaries (1)
|
50.00
|
France
|
|
|
|
|
Europe
|
% Interest
|
Country
|
|
Orange Belgium
|
78.32
|
Belgium
|
|
Orange Espagne and its subsidiaries
|
100.00
|
Spain
|
|
Orange Moldova
|
94.41
|
Moldova
|
|
Orange Polska and its subsidiaries
|
50.67
|
Poland
|
|
Orange Romania
|
99.20
|
Romania
|
|
Orange Romania Communications and its subsidiary
|
53.58
|
Romania
|
|
Orange Slovensko
|
100.00
|
Slovakia
|
|
|
|
|
Africa & Middle-East
|
% Interest
|
Country
|
|
Jordan Telecom and its subsidiaries
|
51.00
|
Jordan
|
|
Médi Telecom and its subsidiaries (2)
|
49.00
|
Morocco
|
|
Orange Botswana
|
73.68
|
Botswana
|
|
Orange Burkina Faso
|
85.80
|
Burkina Faso
|
|
Orange Cameroon
|
94.40
|
Cameroon
|
|
Orange Côte d'Ivoire and its subsidairies
|
72.50
|
Côte d'Ivoire
|
|
Orange Egypt for Telecommunications and its subsidiaries
|
99.96
|
Egypt
|
|
Orange Guinée (3)
|
37.60
|
Guinea
|
|
Orange Mali
(3)
|
29.38
|
Mali
|
|
Orange RDC
|
100.00
|
Congo
|
|
Sonatel (3)
|
42.33
|
Senegal
|
|
|
|
|
Enterprise
|
% Interest
|
Country
|
|
Orange SA - Enterprise Business Unit
|
100.00
|
France
|
|
Orange Business Services Participations and its subsidiaries
|
100.00
|
France
|
|
Orange Cyberdefense and its subsidiaries
|
100.00
|
France
|
|
Globecast Holding and its subsidiaries
|
100.00
|
France
|
|
|
|
|
International Carriers & Shared Services
|
% Interest
|
Country
|
|
Orange SA - IC&SS Business Unit
|
100.00
|
France
|
|
FT IMMO H
|
100.00
|
France
|
|
OCS
|
66.67
|
France
|
|
Orange Brand Services
|
100.00
|
United Kingdom
|
|
|
|
|
Mobile Financial Services
|
% Interest
|
Country
|
|
Orange Bank
|
100.00
|
France
|
|
|
|
|
Totem
|
% Interest
|
Country
|
|
Totem France
|
100.00
|
France
|
|
Totem Spain
|
100.00
|
Spain
|
(1)
Orange Concessions is consolidated using the equity method.
(2)
Orange SA controls and consolidates Médi Telecom and its
subsidiaries through a 49% equity interest and a 1,1% usufruct.
(3)
Orange SA controls Sonatel and its subsidiaries, which are
fully consolidated, under the terms of the shareholders' agreement as supplemented by the Strategic Committee
Charter dated July 13, 2005 (Orange SA owns and controls 100% of Orange MEA, which owns and controls 42.33%
of Sonatel Group).
Note 21
Decision of the IFRS IC concerning IAS 19 "Employee Benefits" on
the calculation of obligations relating to certain defined benefit pension plans
The IFRS Interpretations Committee (IC) was asked to comment on the
calculation of defined benefit pension plans for which the granting of rights is conditional on the employee's
presence in the Group at the time of retirement (with loss of all rights in the event of early retirement) and for
which the rights depend on seniority, while being capped at a certain number of years of service. For plans
reviewed by the IFRS IC, the cap may be reached at a date prior to retirement.
In France, the interpretation of IAS 19 had led to the practice of
measuring and recognizing the commitment on a straight-line basis over the employee's career with the Group. The
commitment calculated in this way corresponds to the pro rata rights acquired by the employee at the time
of retirement.
The decision of the IFRS IC, published on May 24, 2021, concludes, in
this case, that no rights are acquired in the event of departure before retirement age and that the rights are
capped after a certain number of years of seniority ("X"), and the commitment would only be recognized for the
last X years of the employee's career within the company.
This decision was implemented by the Group at December 31, 2021 for
plans falling within the scope of the Interpretation Committee's decision. The effect of this implementation
mainly limited to retirement benefit plans in France.
As the application of this decision constitutes a change in
accounting policy, the effects of the implementation have been calculated retrospectively and have affected the
opening equity. The effect of the implementation of this decision on the income statement is not material for the
periods presented.
The required information on employee benefits is presented in Note
6.2.
−
Effects on the consolidated statement of financial position:
|
|
|
|
|
|
|
|
|
|
|
(in millions of euros)
|
January 1, 2019
|
Effects of IFRS IC decision
|
January 1, 2019 restated data
|
2019 variation
|
Effects of IFRS IC decision
|
December 31, 2019 restated data
|
2020 variation
|
Effects of IFRS IC decision
|
December 31, 2020 restated data
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
2,893
|
(40)
|
2,853
|
(1,901)
|
(12)
|
940
|
(261)
|
(5)
|
674
|
|
Total non-current assets
|
82,446
|
(40)
|
82,406
|
(693)
|
(12)
|
81,701
|
886
|
(5)
|
82,582
|
|
Total assets
|
104,302
|
(40)
|
104,262
|
2,439
|
(12)
|
106,689
|
992
|
(5)
|
107,676
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of the parent company
|
30,671
|
114
|
30,785
|
1,054
|
35
|
31,875
|
2,670
|
13
|
34,557
|
|
o/w reserves
|
(2,060)
|
114
|
(1,946)
|
985
|
-
|
(961)
|
2,927
|
-
|
1,966
|
|
o/w other comprehensive income
|
(571)
|
-
|
(571)
|
69
|
35
|
(467)
|
(257)
|
13
|
(711)
|
|
o/w deferred tax
|
232
|
-
|
232
|
(16)
|
(12)
|
203
|
(4)
|
(5)
|
195
|
|
o/w actuarial gains and losses
|
(504)
|
-
|
(504)
|
(107)
|
48
|
(563)
|
(33)
|
18
|
(579)
|
|
Equity attributable to non-controlling interests
|
2,580
|
-
|
2,580
|
107
|
-
|
2,687
|
(44)
|
-
|
2,643
|
|
Total Equity
|
33,251
|
114
|
33,364
|
1,161
|
35
|
34,561
|
2,626
|
13
|
37,200
|
|
Non-current employee benefits
|
2,823
|
(153)
|
2,670
|
(269)
|
(48)
|
2,353
|
(351)
|
(18)
|
1,984
|
|
Total non-current liabilities
|
39,644
|
(153)
|
39,491
|
4,917
|
(48)
|
44,360
|
(2,160)
|
(18)
|
42,182
|
|
Total equity and liabilities
|
104,302
|
(40)
|
104,262
|
2,439
|
(12)
|
106,689
|
992
|
(5)
|
107,676
|
Note 22
Auditors’ fees
As required by Decree no. 2008-1487 of December 30, 2008, the
following table shows the amount of fees of the auditors of the parent company and their partner firms in respect
of the fully consolidated subsidiaries.
|
(in millions of euros)
|
|
Audit and related services
|
|
Other services rendered by auditors' networks to
fully-consolidated subsidiaries
|
|
Total
|
| |
|
Statutory audit fees, certification, auditing of the
accounts
|
Services required by the law
|
Sub-total
|
|
| |
|
|
o/w issuer
|
|
o/w issuer
|
|
|
Deloitte
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
8.8
|
4.6
|
0.0
|
-
|
8.8
|
0.3
|
|
9.1
|
|
%
|
|
96 %
|
50 %
|
0 %
|
--
|
97 %
|
3 %
|
|
100 %
|
|
2021
|
|
8.2
|
4.6
|
0.0
|
-
|
8.2
|
0.1
|
|
8.4
|
|
%
|
|
98 %
|
55 %
|
0 %
|
-
|
99 %
|
1 %
|
|
100 %
|
|
KPMG
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
10.9
|
4.3
|
0.1
|
-
|
11.0
|
0.9
|
|
11.9
|
|
%
|
|
92 %
|
36 %
|
1 %
|
--
|
92 %
|
8 %
|
|
100 %
|
|
2021
|
|
9.9
|
4.4
|
0.2
|
0.2
|
10.1
|
0.4
|
|
10.5
|
|
%
|
|
94 %
|
42 %
|
2 %
|
2 %
|
96 %
|
4 %
|
|
100 %
|
|
2020
|
|
10.2
|
5.1
|
0.5
|
0.2
|
10.7
|
0.1
|
|
10.8
|
|
%
|
|
94 %
|
47 %
|
5 %
|
2 %
|
99 %
|
1 %
|
|
100 %
|
|
EY
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
|
2021
|
|
-
|
-
|
-
|
-
|
-
|
0.4
|
|
0.4
|
|
%
|
|
-
|
-
|
-
|
-
|
-
|
100 %
|
|
100 %
|
|
2020
|
|
10.0
|
5.2
|
0.0
|
0.0
|
10.1
|
0.4
|
|
10.5
|
|
%
|
|
96 %
|
50 %
|
0 %
|
0 %
|
96 %
|
4 %
|
|
100 %
|
The services provided by the statutory auditors were authorized
pursuant to the rules adopted by the Audit Committee and updated each year since October 2016. No fiscal
services were provided by the statutory auditors.
