Miles
26-06-2003, 05:24 AM
French-controlled Orange, Europe's third-largest mobile phone company, set itself ambitious growth targets on Tuesday and said it was teaming up with top rivals to take on giant Vodafone Group.
Orange, which is owned by France Telecom, promised to boost core earnings (EBITDA) by 15 to 17 percent per year until 2005 from at least 6.2 billion euros ($7.18 billion) in 2003, and raise revenue growth beyond five percent in 2004/5.
Controlled by a company that was forced into a 15 billion euro rescue cash call, experts argue the largest mobile phone group in Britain and France by subscribers is financially hamstrung -- and that a focus on costs risks undermining its competitive position and diminishing the strength of its brand.
In a long-awaited presentation, new Chief Executive Solomon Trujillo said Orange expected operating free cash flow to rise by 40 to 45 percent per year by 2005, generating 14 billion euros over that time, with an EBITDA margin -- as a percentage of revenues -- approaching 40 percent.
But Trujillo, who became CEO in March, made no promise to return cash to investors. "It is time for us to rise to the challenge and deliver growth by building and capitalising on our technology portfolio, by building alliances...and by working as a group to ensure we deliver the right services,'' he said.
As Orange's shares climbed almost 1.5 percent to 7.48 euros, narrowly outperforming the Dow Jones Stoxx telecoms index, analysts said its 2003 targets appeared achievable, but that 2005 forecasts looked challenging and that the lack of any dividend plans was a major disappointment.
"These are ambitious targets and the execution risk is high, because challenges for the whole sector are significant,'' said John Karidis, telecoms analyst at Commerzbank.
Read More (http://edition.cnn.com/2003/BUSINESS/06/24/orange.reut/index.html)
Orange, which is owned by France Telecom, promised to boost core earnings (EBITDA) by 15 to 17 percent per year until 2005 from at least 6.2 billion euros ($7.18 billion) in 2003, and raise revenue growth beyond five percent in 2004/5.
Controlled by a company that was forced into a 15 billion euro rescue cash call, experts argue the largest mobile phone group in Britain and France by subscribers is financially hamstrung -- and that a focus on costs risks undermining its competitive position and diminishing the strength of its brand.
In a long-awaited presentation, new Chief Executive Solomon Trujillo said Orange expected operating free cash flow to rise by 40 to 45 percent per year by 2005, generating 14 billion euros over that time, with an EBITDA margin -- as a percentage of revenues -- approaching 40 percent.
But Trujillo, who became CEO in March, made no promise to return cash to investors. "It is time for us to rise to the challenge and deliver growth by building and capitalising on our technology portfolio, by building alliances...and by working as a group to ensure we deliver the right services,'' he said.
As Orange's shares climbed almost 1.5 percent to 7.48 euros, narrowly outperforming the Dow Jones Stoxx telecoms index, analysts said its 2003 targets appeared achievable, but that 2005 forecasts looked challenging and that the lack of any dividend plans was a major disappointment.
"These are ambitious targets and the execution risk is high, because challenges for the whole sector are significant,'' said John Karidis, telecoms analyst at Commerzbank.
Read More (http://edition.cnn.com/2003/BUSINESS/06/24/orange.reut/index.html)