Transcription
Consolidated financialstatementsYear ended December 31, 2020This document is a free translation into English of the yearly financial report prepared in French and is provided solely for theconvenience of English speaking readers.
Significant events 2020Covid-19Health crisisIFRS 16Lease termThe effect of the health crisis on theGroup’s business and performance,the judgments and assumptionsmade, as well as the main effects ofthecrisisontheGroup’sconsolidated financial statements arepresented in Note 3 “Impact of thehealth crisis linked to the Covid-19pandemic”.In December 2019, IFRS IC issuedits final decision on the determinationof the enforceable period of leases.Note 3Consolidated financial statements 2020The effects of this decision on theGroup are presented in Note 2.3“New standards and interpretationsapplied from January 1, 2020”.Note 2.3.1Tax disputeconcerningfiscal years2005-2006On November 13, 2020, the Conseild'État issued a favorable decision ona tax dispute in respect of the years2005-2006.As at December 31, 2020, thecurrent tax expense includes taxincome of 2,246 million euros.Note 11.22
Table of contents7.4Financial statementsConsolidated income statement. 4Consolidated statement of comprehensive income . 5Consolidated statement of financial position . 6Consolidated statements of changes in shareholders' equity . 8Analysis of changes in shareholders' equity related tocomponents of the other comprehensive income . 9Consolidated statement of cash flows . 10Notes to the consolidated financial statementsNote 11.11.21.31.41.51.61.71.81.9Segment revenue . 12Segment revenue to consolidated net income in 2020 . 14Segment revenue to consolidated net income in 2019 . 16Segment revenue to segment operating income in 2018 . 18Segment investments . 20Segment assets . 22Segment equity and liabilities . 24Simplified statement of cash flows on telecommunication andMobile Financial Services activities . 26Definition of operating segments and performance indicators . 29Note 22.12.22.32.42.53.24.24.3Purchases and other expenses. 52External purchases . 52Other operating expenses . 53Restructuring and integration costs . 54Broadcasting rights and equipment inventories . 55Prepaid expenses . 55Trade payables . 56Other liabilities . 56Related party transactions . 56Note 77.17.27.3Sales . 44Revenue . 44Other operating income. 47Trade receivables . 47Customer contract net assets and liabilities . 49Deferred income . 51Other assets . 51Related party transactions . 52Note 66.16.26.36.46.56.66.76.8Gains and losses on disposal and main changes inscope of consolidation . 41Gains (losses) on disposal of fixed assets, investments andactivities . 41Main changes in the scope of consolidation . 41On-going transactions . 43Note 55.15.25.35.45.55.65.7Impact of the health crisis linked to the Covid-19pandemic . 40Effects of the Covid-19 pandemic on Orange’s business andfinancial position . 40Main effects on the Consolidated Financial Statements atDecember 31, 2020 . 40Note 44.1Description of business and basis of preparation ofthe consolidated financial statements . 32Description of business . 32Basis of preparation of the financial statements. 32New standards and interpretations applied from January 1,2020 . 33Main standards and interpretations compulsory afterDecember 31, 2020 with no early application elected by theGroup . 36Accounting policies, use of judgment and estimates . 37Note 33.1Segment information. 12Employee benefits . 57Labor expenses . 57Employee benefits . 57Share-based payment. 61Executive compensation . 64Note 88.18.28.38.4Note 99.19.29.39.49.59.69.7Impairment losses and goodwill . 64Impairment losses. 64Goodwill . 65Key assumptions used to determine recoverable amounts . 65Sensitivity of recoverable amounts . 67Fixed assets . 69Gains (losses) on disposal of fixed assets . 69Depreciation and amortization. 69Impairment of fixed assets . 70Other intangible assets . 71Property, plant and equipment . 73Fixed assets payables . 74Dismantling provisions . 75Note 10 Lease agreements . 7510.110.2Right-of-use assets . 76Lease liabilities . 77Note 11 Taxes . 7811.111.2Operating taxes and levies. 78Income taxes . 80Note 12 Interests in associates and joint ventures . 86Note 13 Financial assets, liabilities and financial results(telecom activities) . 8713.113.213.313.413.513.613.713.8Financial assets and liabilities of telecom activities . 87Profits and losses related to financial assets and liabilities . 87Net financial debt . 88TDIRA . 91Bonds . 91Loans from development organizations and multilaterallending institutions . 94Financial assets . 94Derivatives instruments. 96Note 14 Information on market risk and fair value of financialassets and liabilities (telecom activities) . 9914.114.214.314.414.514.614.714.8Interest rate risk management. 100Foreign exchange risk management . 100Liquidity risk management . 101Financial ratios . 103Credit risk and counterparty risk management . 104Equity market risk . 105Capital management. 105Fair value of financial assets and liabilities . 105Note 15 Equity . 10715.115.215.315.415.515.615.7Changes in share capital . 108Treasury shares. 108Dividends . 109Subordinated notes. 109Translation adjustment. 111Non-controlling interests . 112Earnings per share . 114Note 16 Unrecognized contractual commitments (telecomactivities) . 11516.116.216.3Operating activities commitments. 115Consolidation scope commitments . 117Financing commitments . 118Note 17 Mobile Financial Services activities . 11917.117.217.3Financial assets and liabilities of Mobile Financial Services . 119Information on market risk management with respect toOrange Bank activities . 122Orange Bank’s unrecognized contractual commitments . 125Note 18 Litigation . 126Note 19 Subsequent events . 128Note 20 Main consolidated entities. 128Note 21 Auditors’ fees . 130Statutory auditors’ report on the consolidated financialstatements . 131The accompanying notes form an integral part of the consolidated financial statements. The accounting principles are split within eachnote in gray areas.Consolidated financial statements 20203
Consolidated income statement(in millions of euros, except for per share 81External purchases6.1(17,691)(17,860)(18,563)Other operating income5.2604720580Other operating expenses6.2(789)(599)(505)Labor expenses7.1(8,490)(8,494)(9,074)(1,840)Operating taxes and levies11.1.1(1,924)(1,827)Gains (losses) on disposal of fixed assets, investments and activities4.1228277197Restructuring costs6.3(25)(132)(199)Depreciation and amortization of fixed assets9.2(7,134)(7,110)(7,047)Depreciation and amortization of financed 56)(49)Depreciation and amortization of right-of-use assetsReclassification of translation adjustment from liquidated entitiesImpairment of goodwillImpairment of fixed assetsImpairment of right-of-use assetsShare of profits (losses) of associates and joint ventures9.3(30)7310.1(57)(33)-12(2)83Operating s on debts related to financed assets(1)(1)-Gains (losses) on assets contributing to net financial debt(1)59(4)Cost of gross financial debt excluding financed assetsForeign exchange gain (loss)(103)76Interests on lease liabilities(120)(129)-111525Other net financial expensesEffects resulting from BT stake13.7-(119)(51)Finance costs, net13.2(1,314)(1,261)(1,362)Income 0041,954233218204- basic1.721.030.63- diluted1.711.020.62Consolidated net incomeNet income attributable to owners of the parent companyNon-controlling interests15.6Earnings per share (in euros) attributable to parent company15.7Net income(1) 2019 figures have been restated of the IFRS IC decision on lease term (see Note 2.3.1).Consolidated financial statements 20204
Consolidated statement of comprehensive )(7)18(401)(332)18480(64)(47)Consolidated comprehensive income4,7233,3042,111Comprehensive income attributable to the owners of the parent companyComprehensive income attributable to non-controlling interests4,5651583,0742301,898213(in millions of euros)NoteConsolidated net incomeRemeasurements of the net defined benefit liabilityAssets at fair valueIncome tax relating to items that will not be reclassifiedShare of other comprehensive income in associates and joint ventures that will notbe reclassifiedItems that will not be reclassified to profit or loss (a)7.213.7-17.111.2.2Assets at fair valueCash flow hedgesTranslation adjustment gains and lossesIncome tax relating to items that are or may be reclassifiedShare of other comprehensive income in associates and joint ventures that are ormay be reclassifiedItems that are or may be reclassified subsequently to profit or loss (b)Other consolidated comprehensive income (a) (b)13.7-17.113.8.215.511.2.2(1) 2019 figures have been restated of the IFRS IC decision on lease term (see Note 2.3.1).Consolidated financial statements 20205
Consolidated statement of financial position(in millions of euros)Note December 31, December 31, December 31,20202019(1)2018AssetsGoodwillOther intangible assetsProperty, plant and equipmentRight-of-use assetsInterests in associates and joint venturesNon-current financial assets related to Mobile Financial Services activitiesNon-current financial assetsNon-current derivatives assetsOther non-current assetsDeferred tax assetsTotal non-current assetsInventoriesTrade receivablesOther customer contract assetsCurrent financial assets related to Mobile Financial Services activitiesCurrent financial assetsCurrent derivatives assetsOther current assetsOperating taxes and levies receivablesCurrent taxes assetsPrepaid expensesCash and cash equivalentsTotal current assetsTotal 21,89196,592(1) 2019 figures have been restated of the IFRS IC decision on lease term (see Note 2.3.1).Consolidated financial statements 20206
(in millions of euros)Note December 31, December 31, December 31,20202019(1)2018Equity and liabilitiesShare capitalShare premiums and statutory reserveSubordinated notesRetained earningsEquity attributable to the owners of the parent companyNon-controlling interestsTotal equityNon-current financial liabilitiesNon-current derivatives liabilitiesNon-current lease liabilitiesNon-current fixed assets payablesNon-current financial liabilities related to Mobile Financial Services activitiesNon-current employee benefitsNon-current dismantling provisionsNon-current restructuring provisionsOther non-current liabilitiesDeferred tax liabilitiesTotal non-current liabilitiesCurrent financial liabilitiesCurrent derivatives liabilitiesCurrent lease liabilitiesCurrent fixed assets payablesTrade payablesCustomer contract liabilitiesCurrent financial liabilities related to Mobile Financial Services activitiesCurrent employee benefitsCurrent dismantling provisionsCurrent restructuring provisionsOther current liabilitiesOperating taxes and levies payablesCurrent taxes payablesDeferred incomeTotal current liabilitiesTotal equity and 0024,8352,392111591,7881,3227555830,29696,592(1) 2019 figures have been restated of the IFRS IC decision on lease term (see Note 2.3.1).Consolidated financial statements 20207
Consolidated statements of changes in shareholders' equity(in millions of euros)Attributable to owners of the parent companyNumber of ShareShare Subor- ReservesOtherissued shares capital premiums Balance as of December 31,20172,660,056,599 10,640Effect of IFRS 9 applicationBalance as of January 1, 2018after effect of IFRS 9applicationConsolidated comprehensiveincomeTotalAttributable to noncontrolling interestsReservesOther 9752,323---20(39)(19)(4)2,660,056,599 ,8982049213-----Totalequity214 2,537-33,512(4)(23)214 2,53333,4892,111Share-based compensation7.3----46-464-450Purchase of treasury 860)- (1,860)(246)- 60,056,599 10,64016,8595,803(2,062)(571)30,6692,357223 2,58033,249---2-2-2,660,056,599 ed notesremunerationChanges in ownership interestswith no gain/loss of controlChanges in ownership interestswith gain/loss of controlOther movementsBalance as of December 31,2018(1)Effect of IFRS 16 applicationBalance as of January 1, 2019after effect of IFRS 16applicationConsolidated comprehensiveincome(1)---2223 2,58033,251----3,004693,07321811230Share-based compensation7.3----52-523-355Purchase of treasury 857)- (1,857)(248)- (297)---(297)Changes in ownership interestswith no gain/loss of control4.2----4-41-15Changes in ownership interestswith gain/loss of control4.2---Issues and purchases ofsubordinated notesSubordinated notesremuneration3,304-----2-22Other movements(2)Balance as of December 31,2019Consolidated comprehensiveincome---195-195119-1193142.3.1 2,660,056,599 10,64016,8595,803(1,075)(502)31,7252,452234 -based compensation7.3----16-167-723Purchase of treasury shares15.2----7-7---7Dividends15.3----(1,595)- (1,595)(225)- (225)(1,820)Issues and purchases ofsubordinated notes15.4---0(12)-(12)---(12)Subordinated s in ownership interestswith no gain/loss of )(35)2,660,056,599 10,64016,8595,8031,852(759)34,3952,484159 2,64337,038Other movementsBalance as of December 31,2020(1) The effects of IFRS 16 application are described in Note 2.3.1 and Note 10.(2) Including in 2019 the effect of the cancellation of the promise to buy (put option) of the Orange Bank equity.Consolidated financial statements 20208
Analysis of changes in shareholders' equity related to components of the other comprehensive income(in millions of euros)Attributable to owners of the parent companyAssetsavailablefor saleBalance as ofDecember 31, 2017Effect of IFRS 9applicationBalance as of January1, 2018 after effect ofIFRS 9 applicationAssets atHedging Translationfair value instruments adjustmentAttributable to non-controlling mprehensiveincome ofassociatesand jointventures(3)TotalAssetsavailablefor saleAssets atHedging Translationfair value instruments adjustmentActuarialgains andlossesDeferredtaxTotalTotal 1)VariationBalance as ofDecember 31, 2018Effect of IFRS 16applicationBalance as of January1, 2019 after effect ofIFRS 16 )237(8)1223(348)Variation(1)Balance as ofDecember 31, tion(2)Balance as ofDecember 31, (1) Including a 144 million euros change in hedging instruments (see Note 13.8.2) and a (109) million euros change in actuarial gains and losses (see Note 7.2.3).(2) Including a (414) million euros change in actuarial gains and losses (see Note 15.5) and a 94 million euros change in assets available at fair value (see Note 14.8).(3) Amounts excluding translation adjustment.Consolidated financial statements 20209
Consolidated statement of cash flows(in millions of euros)Operating activitiesConsolidated net incomeNon-monetary items and reclassified items for presentationOperating taxes and leviesGains (losses) on disposal of fixed assets, investments and activitiesOther gains and lossesDepreciation and amortization of fixed assetsDepreciation and amortization of financed assetsDepreciation and amortization of right-of-use assetsChanges in provisionsReclassification of cumulative translation adjustment from liquidated entitiesImpairment of goodwillImpairment of fixed assetsImpairment of right-of-use assetsShare of profits (losses) of associates and joint venturesOperational net foreign exchange and derivativesFinance costs, netIncome taxShare-based compensationChanges in working capital and operating banking activities (2)Decrease (increase) in inventories, grossDecrease (increase) in trade receivables, grossIncrease (decrease) in trade payablesChanges in other customer contract assets and liabilitiesChanges in other assets and liabilities (3)Other net cash outOperating taxes and levies paidDividends receivedInterest paid and interest rates effects on derivatives, net(4)Tax dispute for fiscal years 2005-2006Income tax paid excluding the effect of the tax litigation for years 2005-2006Net cash provided by operating activities (a)Investing activitiesPurchases and sales of property, plant and equipment and intangible assetsPurchases of property, plant and equipment and intangible assets (5)Increase (decrease) in fixed assets payablesInvesting donations received in advanceSales of property, plant and equipment and intangible assets(6)Cash paid for investment securities, net of cash acquiredSecureLinkSecureDataBasefarmBusiness & DecisionOtherInvestments in associates and joint venturesPurchases of equity securities measured at fair valueSales of BTSales of other investment securities, net of cash transferredDecrease (increase) in securities and other financial assetsInvestments at fair value, excluding cash equivalentsOther(7)Net cash used in investing activities (b)Consolidated financial statements )5357(576)55(631)(8,552)10
NoteFinancing activitiesMedium and long-term debt issuances13.5-13.6Medium and long-term debt redemptions and repayments(8)13.5-13.6Repayments of lease liabilitiesIncrease (decrease) of bank overdrafts and short-term borrowingsincluding redemption of subordinated notes reclassified in 2019 as short-term15.4borrowingsDecrease (increase) of cash collateral depositsExchange rates effects on derivatives, netSubordinated notes issuances (purchases) and other related fees15.4Coupon on subordinated notes15.415.2Purchases of treasury shares - Orange Vision 2020 free share award planOther proceeds (purchases) from treasury shares15.2Capital increase (decrease) - non-controlling interestsChanges in ownership interests with no gain / loss of controlDividends paid to owners of the parent company15.3Dividends paid to non-controlling interests15.6(in millions of euros)Net cash used in financing activities (c)Net change in cash and cash equivalents (a) (b) (c)Net change in cash and cash equivalentsCash and cash equivalents in the opening balanceCash change in cash and cash equivalentsNon-cash change in cash and cash equivalentso/w effect of exchange rates changes and other non-monetary effectsCash and cash equivalents in the closing 34844336,4815,810(177)115,634(1) 2019 figures have been restated of the IFRS IC decision on lease term (see Note 2.3.1).(2) Operating banking activities mainly include transactions with customers and credit institutions. They are presented in changes in other assets and liabilities.(3) Excluding operating tax receivables and payables.(4) Including interests paid on lease liabilities for (131) million euros in 2020 and (104) million euros in 2019 and interests paid on financed asset liabilities for (1) million euro in 2020and 2019.(5) Acquisitions of financed assets for 241 million euros in 2020 and 144 million euros in 2019 have no effect to the net cash used in investing activities.In 2018, acquisitions of property, plant, equipment and intangible assets financed through finance leases in the amount of 136 million euros had no effect to the net cash used ininvesting activities.(6) Including proceeds from sale and lease-back transactions for 227 million euros in 2020 and 381 million euros in 2019.(7) Including effects relating to the Digicel litigation of which in 2018 escrowed amount of (346) million euros and in 2020, reimbursement of 97 million euros received by Orange (seeNote 18). In 2019, mainly included net repayments of debt securities of Orange Bank for 277 million euros (net acquisitions for (154) million euros in 2018, see Note 17.1.1).(8) Including TDIRA buy-backs (see Note 13.4)Consolidated financial statements 202011
Note 11.1Segment informationSegment revenue(in millions of untriesDecember 31, 2020Revenue (3)Convergence servicesMobile services onlyFixed services onlyIT & integration servicesWholesaleEquipment salesOther revenueExternalInter-operating segments18,4614,5592,2453,959 9)(9)18,1544,3972,3244,086 12)(12)18,2114,4582,3484,168 3)(13)December 31, 2019Revenue (3)Convergence servicesMobile services onlyFixed services onlyIT & integration servicesWholesaleEquipment salesOther revenueExternalInter-operating segmentsDecember 31, 2018Revenue (3)Convergence servicesMobile services onlyFixed services onlyIT & integration servicesWholesaleEquipment salesOther revenueExternalInter-operating segments(1) Including, in 2020, revenue of 5,071 million euros in France, 13 million euros in Spain, 1,287 million euros in other European countries and 1,436 million euros in other countries.Including, in 2019, revenue of 5,233 million euros in France, 21 million euros in Spain, 1,077 million euros in other European countries and 1,489 million euros in other countries.Including, in 2018, revenue of 5,207 million euros in France, 21 million euros in Spain, 665 million euros in other European countries and 1,399 million euros in other countries.(2) Including revenue of 1,305 million euros in France in 2020, 1,374 million euros in 2019 and 1,412 million euros in 2018.(3) The description of different sources of revenue is presented in Note 5.1.(4) Including, in 2020, fixed only broadband revenue of 2,748 million euros and fixed only narrowband revenue of 1,212 million eu
Consolidated financial statements Year ended December 31, 2020 This document is a free translation into English of the yearly financial report prepared in French and is provided solely for the convenience of English speaking readers. Consolidated financial 2statements 2020 Significant events 2020 2005 Note 3 Covid-19 .
