Integrated 2017 annual report
Orange Mapping
Foreword
The Internet of Things, Big Data, cybersecurity, ever more digital essential services, ambient connectivity and artificial intelligence are a few examples of the unprecedented digital shifts and surge we are seeing today. These developments are placing Orange ever closer to the core of these big issues and deepening our determination to contribute to a more intelligent, more open and more responsible society.
This attitude shapes our commitment.
This is also what our Human Inside philosophy is all about: the only metric that matters when we look at digital technology and at all the innovation it can spur is the extent to which they serve people in particular and society as a whole. We hope this third integrated annual report gives you a clearer picture of what our dedicated teams are achieving day after day and how Orange’s commitment is generating value for stakeholders across the board.
Contents We have chosen to illustrate what we are doing with seven experiences you will find in these pages 04 – 05 Orange at a glance and on our digital platform, rai2017.orange.com/en/. 06 – 07 2017 key figures 08 – 09 Corporate governance 10 – 11 Our model to create value 12 – 35 Chapter 1 Our vision for digital technology 36 – 73 Chapter 2 Our strategy to create value 74 – 103 Chapter 3 Our contribution 104 Tables and charts 105 Contacts and useful links
Listen to the IAR podcast on rai2017.orange.com/en/ 4 Orange integrated 2017 annual report 5
Orange at a glance
Europe Belgium France Luxembourg Moldova Operating networks, creating digital experiences Poland 1 business line 28countries around the world, Romania and a global presence with Slovakia Orange Business Services Spain
Communication services for consumers Africa and Middle East Botswana Burkina Faso Communication services for businesses Cameroon Central African Republic Content Côte d’Ivoire Democratic Republic of the Congo 5business Egypt activities Mobile financial services Guinea Guinea-Bissau Wholesale Iraq Jordan Liberia Madagascar Mali Consumers: the women, men and families we connect Mauritius to the people and things they care about the most Morocco Niger Senegal Businesses: the professionals, SMEs and multinationals Sierra Leone that use our digital transformation facilitation solutions Tunisia 3customer groups Operators: the communication and Internet companies that leverage the power of our networks and services 6 Orange integrated 2017 annual report 7
2017 key figures
152,000 42.5% France employees 16.7% Businesses 12.9% Spain 11.6% Africa and Middle East 6.4% Poland 4.2% Central Europe 3.0% Belgium and Luxembourg Over 2 Over 3,000 2.7% International operators million BtoB customers customer and shared services (professionals multinationals and SMEs, incl. outside France 43,000 businesses with more than 50 employees) in France €41.1 billion in revenues 273 Over 450 €7.2 million BtoC customer operators billion investment customers in France (wholesale) in 2017
4.7 46 No. 1 10.3 million customers million 4G customers FTTH operator million BtoC with very high-speed in Europe customers on (over 100 Mbit/s) (26.5 million fibre- convergent fixed broadband access ready households) and mobile deals 8 Orange integrated 2017 annual report 9
Corporate governance
1 2 3 4 Orange’s robust governance is geared to advancing the Group’s A sound organisation A Board Active and proactive Strategic strategy and tackling the challenges in its environment. Convinced where responsibilities encompassing a directors seminars twice that strong governance drives strong performance, we keep are balanced across complementary a year to contribute accountability along with risk management and control constantly the corporate array of profiles and to the Group’s management fields of expertise, transformation at the centre of our concerns. That is why we have built Orange’s structures and representing governance around four central bricks (see opposite). commensurately Orange’s full wealth with the Group’s of stakeholders scope
Audit Board of Directors Establishes strategic direction, oversees implementation 3 Committees Governance and Corporate Social and Environmental Responsibility
Innovation and Technology
General Meeting Chairman and Chief Executive Officer of Shareholders
2 Chief Executive Officer Delegates
3 Deputy Chief Executive Officers Executive Committee Steers the Group, coordinates strategy implementation 9 Senior Executive Vice-Presidents 10
Our model to create value
Our Planet philosophy
Technology only brings about innovation when it serves a purpose. That, in a nutshell, is what our Human Inside philosophy is all about. It is the simple, Society powerful belief that inspires and guides everything we do.
People
Our ambition Through Delivering pioneering and purposeful Create enduring our business products and services value for our four line stakeholder families, namely businesses, the public sphere, civil society Through and employees. Direct jobs and wages, investments, our business purchases, dividends, taxes and levies activities
Through Indirect jobs, deep roots in host communities, our footprint and our social and environmental commitments in society Orange integrated 2017 annual report 11
Our strategy
Our Essentials2020 Offering strategic plan is aimed ed connec rich tivi at maximising the value en ty c u we generate through s R to e i g g m n our model and n in s v i t e s e y i e r f l n i s r a t s s e distribute to our t i r i n a l a e p g r t v a An i u i t stakeholders by o c o h
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connecting everyone o
i customer p to what matters to them. experience
t t a o h S h g f e u t n b p l i tr p g e r u a o in d a s n r d o c in s tin il d e fo g Bu m n ss rm ny a c ati pa al us on om it to a c dig me th rs is bo
A digital, efficient and responsible company
Our business model Resources
In essence, we generate returns from our Invest in building and operating our network resources using four infrastructure business and industrial levers. Serve our customers and thereby monetise Business our networks model Nurture customer loyalty with outstanding services and experiences
Provide an open service ecosystem
Share value with beneficiaries 12 Orange integrated 2017 annual report 13 Our vision for digital technology
In addition to reshaping our societies, digital technology is opening up new growth opportunities for Orange. Our overarching aim is to build a more intelligent, more open and more responsible society. That involves rising to the challenges that the digital revolution is bringing about, i.e. harnessing innovation to make it useful and make sure its benefits reach as many people as possible. This way, we can concurrently address the high hopes emerging throughout society and deliver the performance investors expect from a publicly traded company. Our role as operator, our teams’ expertise and the investments we make put us in a position to steer today’s shifts in the right direction and support our long-term growth. Chapter 2 Chapter 3 Chapter Our contribution Our Our strategy to create value create to strategy Our Chapter 1 Chapter 14 Orange integrated 2017 annual report 15
How technology is reshaping and augmenting the world
The leaps forward in artificial 3.8% developments that will have the most our future-ready fibre networks (with 12 billion the environment, i.e. renewable intelligence, upsurge in processing ICT market extensive impact over coming years: bandwidths exceeding 10 Gbit/s), tons energy and the raw materials that power and ubiquitous networks are growth in 2017 deep-learning technologies are Internet of Things networks (LTE-M Potential the digital economy needs to thrive; giving rise to a fourth industrial enabling machines to solve problems and LoRa®) and the very high-speed reduction in CO2 the regulation to channel activities revolution. Orange is one of the by themselves, and thereby opening mobile bandwidth that 5G will usher emissions from in global markets where borders are Over digital and smart driving forces behind that 5 billion doors to wonderful opportunities in, starting in 2020. Then, this services by 2030 blurring; revolution, as well as one of its mobile users ranging from task automation revolution is opening up new (1/5 of the world’s security, as people and businesses beneficiaries. Our Group has the worldwide to customer-support chatbots possibilities to bring our BtoC and total emissions) have a crucial need to place their expertise, infrastructure and and on to industrial robots and home BtoB customers ever more essential data in digital spaces they can international wingspan to channel assistants. Artificial intelligence will services. We are already supplying fully trust. today’s and tomorrow’s disruptive 21 billion also play a pivotal role harnessing mobile banking solutions and other 15% These are the ripples that the fourth connected Average annual technologies. Those breakthroughs objects in 2020 Big Data, i.e. collecting, analysing content today, and the prospects growth in the industrial revolution is setting will in turn spur growth in our core and processing masses of data we are looking forward to range Big Data market in motion, that will shape the world business and in the new service generated by billions of connected across connected homes, well-being, through to 2020 tomorrow, and that Orange is universes that are becoming objects to distil purpose-designed healthcare, education, energy, addressing through its business increasingly essential in people’s applications that effectively improve industry, transport and even smart model, strategy and commitments connected lives and for companies people’s lives and companies’ cities. We will not be tapping into to society. and operators to conduct business. operations. Also at the border these opportunities by ourselves, between the physical and digital of course: we will be increasingly The physical and virtual worlds worlds, up-and-coming virtual involved in co-opetition arrangements started converging as the and augmented-reality technologies with other carriers, Internet giants, 21st century dawned. Digital services are enhancing interaction with IT service companies, the main and all kinds of everyday objects are our environment, recasting learning industrial verticals (the automobile interacting more and more. And this methods and even changing the way sector among others) and myriad is upending production methods, we produce innovation. cutting-edge start-ups. business models and even people’s habits. A plethora of prospects Tackling tomorrow’s challenges This revolution is opening up a wealth This revolution is also giving rise to Increasingly intuitive technology of growth opportunities for a top-tier many of the challenges we are seeing Technology kick-started this player in the digital arena such as on the economic and social fronts: revolution, and rocketing processing Orange. In several ways. Firstly digital inclusion, i.e. accessing new power, network capacity and because it is triggering exponential technologies and the new practices algorithm sophistication are fuelling growth in demand for connectivity. springing from them, then distributing it. Artificial intelligence is one of the We are catering to this demand with the value they create; 16 Orange integrated 2017 annual report 17
Why we do what we do Fig. 1 Our materiality matrix for the main issues at Orange
Child welfare Customer relationships and trust Digital inclusion Privacy Human rights and digital services Network and service quality and reliability Social and economic
High footprint, local jobs Energy and climate Companies need to open up 46 category in December 2017. change and reach out to the increasingly stakeholder We have embarked on numerous connected world around them dialogues conversations in our host countries because their business will only since 2009, since 2009. Some issues relate to grow, endure and earn acceptance including society as a whole (“Women and country-level and Transparent products Occupational health if they know how to listen to and theme-specific ICT”, “Children and technology”, etc.) and services and safety talk to the stakeholders in their and others apply more specifically dialogue Supplier relationships Skills development ecosystem. That is why we have to the Group. In 2017, for instance, set up structured channels for Poland became the seventh country Ethics and anticorruption Quality of life at work conversations inside and outside in the Group to organise discussions Electromagnetic Diversity and equal Labour relations the Group. with stakeholders on diversity and fields opportunities Significant These conversations help us zero equal opportunities. France, Poland, Circular economy in on the issues that each of our Spain and Egypt are also involved in (resources and waste) stakeholders really care about on dialogue on the circular economy. Product and service an individual and collective level, eco-design and direct our decisions and Sensing the weak signals commitments accordingly. This active listening approach helps us identify social and environmental Our drive to share value across issues and prioritise the risks Orange and society have shaped associated with them. We make our method to engage in dialogue a point of picking up weak signals with stakeholders. This method and spotting the opportunities to encompasses the three principles focus innovation on the fronts that Biodiversity Philanthropy Limited in the AA1000 standard, namely will open up fresh growth prospects inclusivity (we identify stakeholders for Orange while fostering economic that are active locally), materiality and social development in our host (the issues we address are topical countries. We plot out the feedback for Orange and our ecosystem) from these conversations on our stakeholders Orange’s for Materiality Limited Significant High and responsiveness (we map materiality matrix, the tool we use Materiality for Orange’s performance out and roll out short-, medium- to cross-reference the expectations and long-term action plans). that our customers, our employees, This structured approach earned our suppliers and civil society Ethics and customer relationships Environment Society Employee experience us a Défis RSE (CSR Challenges) spokespeople are voicing with award in the Stakeholder Dialogue the business challenges we are 18 Orange integrated 2017 annual report 19
addressing. Then we can rank 24 Orange Cyberdéfense’s Employee experience 4,000 host communities’ development them in a comprehensive overview countries development in the market. The employment-related issues participants and vitality. Examples include that sheds light on our priorities engaged This approach also raises ethical we have identified in our materiality in the various Public Initiative Networks (PINs) for action. in dialogues questions. The Group tightened matrix principally encompass channels and in France and our development with stakeholders forums (one- its ethics and compliance Orange employee expectations strategy in emerging economies to-one interviews, Customer experience and ethics programme to meet Sapin II law and the Group’s human resources round tables, in Africa and the Middle East, When we look at our materiality obligations in 2017, and has built policy, which we see as a sine “digital cafés”, etc.) where booming digital technology matrix, we can see that concerns its first vigilance plan under qua non in our performance. is spurring social and economic revolve around three main areas: the French law of 27 March 2017 This is one of the five pillars development more than anywhere customer relationships, data (requiring reasonable surveillance in our Essentials2020 strategy. else in the world. Secondly, security and service quality. measures to identify risks and We honed our pledge to build stakeholder expectations are also These three areas relate directly prevent serious violations of human a company model that is both shaping our CSR policy. to our core business. rights and fundamental freedoms, digital and caring with over We are fostering entrepreneurship Our stakeholders’ expectations risks and serious harm to health 1,000 employees from across with a social and inclusive edge overlap seamlessly with our Group’s and safety and the environment), the Group, and the goal is to treat via La Ruche, for example, overarching focus on the customer through stakeholder consultation employees to an experience and supporting incubators experience. This is why we have (see the 2017 Registration matching the one Orange wants in Africa. By harnessing digital been investing massively for several Document). its customers to enjoy. In practice, technology to further digital literacy, years now in strengthening our Orange is also one of the this cascades into action plans to and by ensuring everyone networks and expanding their 39 companies that have secured adapt our work tools and methods – especially children – can use coverage, redesigning our customer French Relation Fournisseurs et to our digital age, ensure technology in a safe and people- journeys and enhancing them Achats Responsables (“responsible consistently high quality of life friendly setting, we are helping with a digital edge, and simplifying procurement and supplier relations”) at work, and give all employees to spread trust. More broadly, our deals. certification. On the broader control over their career path. Orange is contributing to achieving We were one of the first movers on international scene, the Group the UN’s 17 Sustainable the data security and privacy front: is a founding member of the Joint Society Development Goals looking the 2013 Orange charter on data Audit Cooperation (JAC), Our stakeholders’ main expectations at 2030. We are aligning protection and personal privacy an association of 16 operators here include human rights, child our business activities with was one of the pioneering steps promoting transparency in the welfare, digital inclusion and our this worldwide benchmark in this direction. Constantly telecoms supply chain, in particular social and economic footprint. in the belief that digital technology sharpening our cybersecurity by carrying out assessments and Their feedback is directing our provides the bedrock for a more expertise is solidifying all our mapping out corrective action plans efforts at Orange in two ways. inclusive and fairer society to thrive, operations within the Group among the sector’s suppliers and In our core business, firstly, what and will help spread prosperity and at the same time supporting their subcontractors. we do has a direct impact on our and protect the planet. 20 Orange integrated 2017 annual report 21
Fig. 2 Our stakeholders
Large accounts, SMEs, microbusinesses, Businesses Customers (BtoB) entrepreneurs Shareholders, creditors, rating agencies, Finance financial institutions, development agencies Construction and maintenance, networks, handset Suppliers manufacturers, industry and energy, information and communication, enterprise services, sheltered sector Owners Public and private real-estate owners
Professional Telecoms associations, business federations, associations CSR organisations Training centres, schools and universities, Environment 50% initial assessment using a method Education research chairs Our stakeholders’ environmental Orange has developed by Carbone 4, Business Telecoms partners, incubators, start-ups, expectations mirror growing pledged to halve a consultancy specialised in partners recycling channels awareness of the climate- its CO2 emissions low-carbon strategy and adapting Distributors and wholesalers, Orange partner stores Distribution and energy-related challenges per customer use to climate change. This assessment and franchises, retailers, preowned handset brokers between 2006 the planet needs to address, shed light on several pointers for and 2020 Telecommunications and digital, employment, and of their ability to influence progress, which we will start Public sphere Ministries culture and communication, health, agriculture, business decisions as consumers. working on to upgrade our reporting education, environment At Orange, this responsibility and align it with TCFD international European and African Union authorities, local Authorities elected officials intertwines with our overarching standards in 2018. Telecoms regulators, standards organisations, Regulatory bodies business goals because we know oversight bodies that our long-term performance and International World Health Organization, United Nations, International Telecommunication Union, Institut prospects depend on all the above. organisations de recherche pour le développement That is why we made two momentous commitments during General public Urban professionals, rural professionals, Civil society job-seekers, students, senior citizens COP21 in 2015: to reduce our CO2 (BtoC) emissions by 50% per customer use Political leaders, influencers, artists, activists, Opinion leaders networks of influence, community representatives by 2020 (from their 2006 baseline) Organisations driving Environmental agencies, networks of social and to further embed circular social and economic entrepreneurs, development NGOs economy principles in the Group. development Traditional and online, influencers (bloggers, social Our efforts to fulfil these Media commitments range from eco- networks) Think tanks focusing on digital and social designing products and services Experts developments, sociologists, psychologists, to reusing and recycling hardware. ICT experts Green efficiency, moreover, is one Child welfare, consumers/users, healthcare, organisations assisting disabled, disenfranchised of the four pillars in our Non-profits and marginalised populations, organisations transformation plan, Explore2020. promoting human rights, neighbouring communities Orange also started aligning Group Marketing, sales, HR, technology, customer reporting with TCFD (Task force Employees Business lines service, etc. on Climate-related Financial Executive committee, senior managers, leaders, Management Disclosures) recommendations in management committees December 2017. (The TCFD was set Partners in industrial Employee representatives, unions up by G20 during COP21.) We have dialogue since run our reporting through an 22 Orange integrated 2017 annual report 23 “Let’s add purpose to progress for people, society and the planet”
Stéphane Richard Chairman and Chief Executive Officer
What strengths can Orange count on today? What we’re seeing today is that the series of major strategic decisions we made when I took over the Group’s helm in 2010 are starting to bear fruit. Orange’s revenues and adjusted EBITDA rose for the second year running in 2017, and the Group’s operating cash flow grew for the first time since 2009 last year. One of those milestone choices, of course, involved FTTH. We invested no less than €3.4 billion in this technology over the past three years because that’s where we saw the highest potential returns. We were right – and this move has made us the leader for very high-speed fixed broadband in Europe. Our infrastructure today is engineered to support the exponential growth in home connectivity requirements over the coming decade. We have also invested heavily in our mobile networks. And the outstanding quality of our networks has propelled us into the top position among convergent operators Europe, precisely when convergence is starting to gain traction in the European market. These networks also provided the foundation we needed to build an unmatched customer experience teeming with the latest services and enhanced features, and ever simpler, more personal and more digital relationships with our clients. So we can count on all those strengths, and will be working on three levers to take the Group’s growth and transformation to the next level going forward. I’m talking about speeding up very high-speed fixed and mobile network rollout, of course. But also about digital transformation and work methods within the Group, with a key project involving skills management. And, lastly, we will be stepping up our development in new markets where we can create 24 Orange integrated 2017 annual report 25
value in the BtoC and BtoB segments. In banking and financial services, development on that big continent that will see its population double by 2050. of course, but beyond them, too. We will be tapping into the Internet of Things, When you look at the demographics there, you see the prominent role that for example, to treat our customers to a full constellation of more digital continent will play in humankind’s future – and the formidable challenges and diversified services – including energy services, among others. it needs to rise to, in terms of growth, infrastructure and social inclusion. And digital technology is an essential part of the answer. What big trends are you seeing further down the road? Artificial intelligence, Big Data and robotisation have ushered us into the fourth What is the outlook looking like for Orange? industrial revolution. We are looking at huge potential here – and, at the same We’re back on the road to profitable, sustainable growth, we have healthy time, at a risk of seeing the benefits scatter unevenly. fundamentals, our debt is under control and we have strict mechanisms to But none of that will happen without innovative digital services running on manage our operations. I don’t see any major consolidation in the near term ultra-efficient and extremely safe and secure networks. So Orange has a major in France or elsewhere in Europe, but we nevertheless have the resources we role to play in this revolution. And we’re fully aware of the responsibilities this need to pursue a dynamic, selective policy for our asset portfolio, be it through position entails. We need to create the right conditions to build a digital society acquisitions or deeper cooperation. that is open to everyone, and suited to everyone. Because we’re looking at an Our roadmap going forward is clear: we need to strengthen our leadership amazing opportunity to build a more connected planet, where societies and and cement the hallmarks that put Orange in a class by itself, i.e. the quality of our networks, our diverse range of customer-focused services, and our responsible commitment. “Orange’s heritage, commitment Our BtoC and BtoB customers need a partner they can trust – a partner that also takes a strong ethical stand – more than ever before to seize the and vision put it in a class by itself. opportunities that are coming up for them in our ultra-connected world teeming We’re fortunate to have all that.” with data. Orange will be the partner they need because it will provide the outstanding quality, safety and data protection expertise they value. Price wars and bottom-of-the-barrel promotions are behind us now. Our success going economies can flourish, and to build a more sustainable, more open world. forward will hinge on our ability to create enduring value for everyone. We’ve always been optimistic about innovation at Orange. But, even more importantly, we’ve always tried to make sure as many people as possible benefit from that innovation. Because that’s the only way it works: innovation only brings about progress when everyone finds it useful. This humanist philosophy shapes everything we do. We call it “Human Inside”.
Why that philosophy, specifically? Because the rules have changed for companies. Social networks are giving Human We have chosen words that encapsulate Smarter society people access to information in real time and opening up channels for dialogue. Inside a philosophy that has inspired and guided Our initiatives build a more intelligent, So we all need to be more transparent and more accountable. Orange’s the women and men at Orange since more responsible, accessible and open the beginning. This philosophy captures world for everyone. heritage, commitment and vision put it in a class by itself. We’re fortunate what we do and how we do it, and to have all that. And embracing what makes us different, letting it guide us the purpose shaping our innovation Augmented planet and letting it shine can be the single most important step towards boosting for citizens, employees, customers We play our part in building a more our competitive edge. and humankind as a whole. efficient connected planet while protecting its natural resources by Digital citizen ushering in more abiding and sustainable How does all that translate into Orange’s business? We are aware of our duty to rise to models. Our overarching goal is innovation. Everything we accomplished in 2017 shows the challenges facing society and are committed to nurturing trust in a digital that we have what it takes to harness digital technology and use it to develop society that fosters community spirit. solutions our customers use. Starting with one of the year’s highlights, the successful launch of Orange Bank, the first 100% mobile banking solution. Better me All our actions, products and services I’d like to talk about the extent of our involvement in Africa and the Middle East equip people to raise their standards too: digital technology is an essential lever for economic and social of living and develop their potential. 26 Orange integrated 2017 annual report 27
2017 highlights
Innovation Business Start-up Environment Hello Show The Business Innovation Orange France’s One of the breakthroughs & Decision in Africa IT department in the spotlight at the acquisition's Orange Digital Ventures earns ISO 50001 fifth Hello Show was project Africa is the Group’s certification Djingo, a multiservice investment fund home assistant and working on pioneering Orange’s first venture projects that address into the realm of artificial the big issues in Africa, intelligence. Djingo has covering latest- a built-in speaker, generation connectivity, responds to voice and FinTech, the Internet Financial services text instructions, enables of Things, energy and Introducing simple and intuitive e-health. This fund Orange Bank browsing on Orange TV, targets early-stage Orange’s 100% mobile The Group’s Technical operates systems in innovative start-ups banking solution is and IT Services connected homes, regardless of their now available in department in France places calls and links geographic location. metropolitan France. has been certified to Cybersecurity to the other services Orange Bank is the comply with ISO 50001 Orange in Orange’s ecosystem. only French bank to (the benchmark Cyberdefense And it learns from users, provide free-of-charge international standard starts a school so it can cater to their Orange has announced bank accounts and for energy management In January 2017, wants and needs plans to acquire cards (terms and systems) across its the Group’s division increasingly accurately Business & Decision, conditions apply), technical facilities specialised in as time goes by. an international instant transaction and including the corporate security consulting and processing, mobile 15,000 vehicles its opened its new base systems integration payments, state-of- technicians drive. in northern France group, to solidify the-art features and Orange France is one and announced plans Orange Business a 24/7 virtual adviser. of the handful of large to set up its Orange Services’ leadership in In February 2018, companies that has Cyberdefense data service integration four months after been awarded this Academy, a country- and operation in it went live, Orange stringent certification wide centre to train France and on global Bank had over across such a large tomorrow’s talents. markets. 100,000 customers. operation. 28 Orange integrated 2017 annual report 29
Employee Very high-speed Convergence shareholding broadband Over Fostering Europe’s 10 million engagement leading customers The Group’s pledge networks in Europe to serve as a digital After reaching Spain and caring employer, in 2016, LOVE deals and its drive to combining Internet, encourage collective TV and Mobile services agility and nurture in a single package engagement grew into all Group throughout its host countries Entertainment workforce, led to in Europe in 2017. Orange Orange Vision 2020, By end-December, Content is up a new free share award Orange had and running scheme for its teams, Brand 10.3 million convergent The Group is in October 2017. Orange customers with its enhancing its choice This plan is also branding Open and LOVE of content with Orange furthering the Group’s reaches three packages in France Content, its division strategic aim to put new countries and the rest of Europe. tasked with rolling out 10% of its voting rights After Egypt, Belgium its policy on this front. in its employees’ and Morocco in 2016, It has signed new hands. three countries At end-2017, Orange agreements and switched to Orange had 4.7 million announced bold plans 4G livery in 2017: Burkina customers on very to invest in TV series Rolling out Faso (7.5 million high-speed (over coproduction. in Africa and customers), Liberia 100 Mbit/s) fixed the Middle East (1.7 million) and Sierra deals, and Europe’s Quality Leone (1.4 million). largest fibre network Orange’s The Orange brand with 26.5 million mobile network is now up and running connectable No. 1 in France in 26 countries (8 in households. Orange for the 7th year Europe, 18 in Africa also has more 4G running and the Middle East). customers than any The annual survey other carrier in 7 that ARCEP (the of its 8 European country’s telecoms country markets. regulatory authority) And it is busy paving published in June 2017 the way for 5G, for confirmed that Orange example contributing is the leading mobile to securing industry operator in Following its 4G support for the first metropolitan France service launches global standard, for the seventh year in Mali and Egypt, which will open the running, ranking the Orange had 11 million door to full-scale very Group in first place or 4G customers at high-speed mobile tied for first place on end-2017. network rollout. 176 of the 193 criteria. 30 Orange integrated 2017 annual report 31
Developments in 2017 have confirmed that our Orange’s revenues grew for the first time since 2009 Essentials2020 strategy is on target and rekindling (up 0.6% on a comparable basis), fuelled by outstanding growth momentum. Orange’s revenues and adjusted performance in its broadband offers – especially Fibre – EBITDA grew for the second year running and in the BtoC and wholesale market segment. It cleared its operating cash flow increased for the first time the 2 million FTTH customer mark in early January 2018 since 2009. following an all-time-high 546,000 net sales in 2017. The Group also stepped up its investments in 2017, This is the best year achieved on this technology. notably in its telecoms activities (17.4% of its Moreover, 57% of these FTTH net sales were to new revenues), with a clear focus on its very high-speed Orange customers. Revenues in the mobile market, where infrastructure. Its leadership in fixed and mobile competition remained as fierce as ever, rose for the first networks ranked it as Europe’s number-one time since 2011 in Q4 2017, buoyed by outstanding sales convergent operator with 10.3 million customers, and marketing performance. following 11.1% growth over the year. Orange’s sales Orange can look back on 2017 as its best year for and marketing teams also performed very well contract net sales since 2008. in the Group’s main markets: at end-2017, the number of customers who trust its services had risen 3.7% Convergence is gaining traction in the market: (on a comparable basis) to 273 million. Outside France, by Q4, 6 million customers had chosen an Orange it also saw sharp growth in Africa and the Middle East, convergent deal (59% of its BtoC fixed broadband the world’s most dynamic region, where the telecoms customer base). Orange also continued to expand market grew by 3% last year. its network and enhance its bandwidth in France. The Group continued to blaze new trails and cleared At end-December 2017, Orange had the country’s leading a milestone in November 2017 when it introduced FTTH network (9.1 million fibre-ready households, Orange Bank, its new 100% mobile banking solution, up 32% year on year). It also won a number of contracts in France. involving Public Initiative Networks (PINs) All this means that we can move forward confidently in Loire-Atlantique, Moselle, Orne, Lot-Lozère-Aveyron, in 2018. Growth in our mobile banking activities will be Charente-Maritime and other areas, and is intent one of the highlights this year, but Orange is planning on keeping its number-one position France-wide. to boost its sales and forge ahead in all its markets, working on the three levers in its strategy – the best Lastly, Orange also consolidated its leadership network, cutting-edge enriched services, and peerless in 4G coverage and quality. Its mobile network now customer experience – to treat its customers to reaches 96% of the French population (up 8 points outstanding experiences. compared to 2016), and ARCEP (the country’s telecoms regulatory authority) ranked it as the country’s best for the seventh year running in June 2017.
0.6% 59% growth in of BtoC fixed revenues in 2017 broadband (on a comparable customers have basis) convergent deals France Country reports 32 Orange integrated 2017 annual report 33
Revenues increased by 3.9% (on a comparable basis) After slowing towards the end of 2016, growth in Orange’s seven other country markets in Europe. resumed vigorously in Q2 2017, pushing the year’s It now has 49 million mobile customers in this geography, revenues up by 3% on a comparable basis to €5 billion. including 34.6 million on contracts (up 4.1% year on year), This momentum reflects healthy revenues from mobile and 7.1 million fixed broadband customers, including services (4.7% higher in 2017 than in 2016) and Orange 2.6 million on Fibre deals (up 46.2%). The growing Money’s undisputed success (its revenues grew by 58% momentum in convergence and the ongoing rollout from Q4 2016 to Q4 2017). The Group’s 3G networks of LOVE (Mobile, TV and Internet) deals, especially reach 20 countries in this region. Following recent in Spain, explain most of this increase. Orange remains launches in Mali and Egypt, 4G services are now available the most active convergent operator in the Spanish in 11 countries (excluding associates and joint ventures). market, where it has 3.1 million customers (83% of In the fixed and broadband segment, Orange pushed the fixed broadband total). ahead with its targeted FTTH network rollout in Morocco, Côte d’Ivoire, Jordan and Senegal (it introduced its first Also in Spain, Fibre deals continued to thrive (the fibre deal in Dakar in November 2017). number of FTTH customers increased by 40.4% to 2.3 million over the year) as did TV deals (up 23% to To bolster its development strategy in Africa 626,000 clients). In Poland, the decline in revenues from and the Middle East, Orange has combined all the legacy copper network was offset to a very large extent its operations in a full-service subsidiary, which will by growth in very high-speed services and the LOVE deal step up the Group’s support to local subsidiaries we introduced in February 2017. The Group has become and speed up network expansion and innovation. the first operator to offer 4K TV across Poland and has We invest about €1 billion a year in this region, grown its FTTH customer base by 143% to 214,000. and our multiservices approach ranks Orange among In Belgium, where Orange now provides 4G coverage the front-runners in Africa’s and the Middle East’s digital throughout Brussels’ metro system, and in Luxembourg, transformation. The Group is developing cutting-edge where the Group opened its first Smart Store this practices suited to the local populations’ wants and October, revenues increased by 0.8% in 2017. Fixed needs in a variety of fields including communication, services grew especially fast in both countries, driven energy, financial services, entertainment, agriculture, by the LOVE deal’s success (the number of convergent healthcare and education. customers jumped from 31,000 at end-2016 to 100,000 at end-2017). The year’s highlights in Slovakia included The Group ranks among the most prominent the introduction of the LOVE deal and large-scale fibre employers in the area, and has hired and trained rollout in urban areas, where we have connected most of its 20,000 employees locally. It was awarded 372,000 households to date. In Romania, Orange Top Employer certification in Africa for the fifth year cemented its leadership in the 4G segment. It serves running in October 2017. a total of 3.2 million customers in the country and reaches 93% of its population. The Group celebrated its 10th anniversary in Moldova, where it has likewise consolidated its leadership with a 70% share in the overall market and a 57% share in the mobile segment.
35% 37 million 10.3 million 49.1 million growth in mobile Orange Money convergent BtoC mobile customers data services customers customers in Europe in Europe in Africa and the at end-2017 Africa and Middle East Middle and Africa
Europe (incl. France) (excl. France) Middle East in 2017 34 Orange integrated 2017 annual report 35
Orange Business Services pushed ahead with This operating segment consolidates the Group’s its transformation in 2017, upgrading its operations business in the wholesale market, excluding its to address growing demand for integrated IT services domestic market, and including Orange Marine’s and connectivity among companies. Revenues practically submarine cable laying and maintenance operations, stabilised at €7.3 billion at end-2017 (a 1% decline versus and content-related activities. The decline in services 2016 on a comparable basis) in spite of unrelenting for international carriers explains the 8.6% drop in competitive pressure on voice services. In the opposite revenues on a comparable basis to €1.7 billion in 2017. direction, mobile equipment sales jumped to €151 million. Orange is a key player in the international wholesale Acquiring Lexsi in 2016 gave Orange Cyberdefense’s market and ranks second worldwide for voice revenues a 19% year-on-year boost, cementing services by volume. It is a pioneer for mobile data the Group’s position as the number one player in France’s services, security and fraud prevention. It pushed ahead cybersecurity market and moving it closer to its goal with its efforts to upgrade its global customers’ to emerge as Europe’s leader on this front further down connectivity in 2017, for example by opening a high- the road. capacity IP hub in Marseille to cater to rocketing data Revenues from Cloud-related services rose by 21%, traffic among operators in Africa and the Middle East. buoyed by Flexible Engine, a public cloud solution Orange International Carriers’ expertise earned it the Best the Group launched in February 2017. The move Wholesale Carrier for Voice award from its customers and announced in spring 2017 to acquire Business & Decision, industry peers in 2017.
an international group that will bolster data service integration at Orange Business Services, was another The Group also set up Orange Content in of the year’s highlights. September 2017. The new entity is tasked with coordinating its bold content acquisition, Looking at the bigger picture, in 2017 Orange Business coproduction and distribution strategy. This operating Services’ 21,000-plus employees stepped up their segment’s highlights last year included an exclusive strategy to rank the Group as the preferred partner for agreement to broadcast HBO programmes in France enterprises embracing digital transformation by supporting on OCS, the move to deepen its longstanding partnership the entire “data journey”, i.e. harvesting it via the Datavenue with Canal+, a pledge to invest €100 million in TV series platform, carrying it over the world’s largest end-to-end production over the next five years, and a new agreement network (spanning 220 countries and territories), storing with Netflix expanding service distribution to all Group it in the Cloud, processing it using business intelligence host countries. solutions, and harnessing Orange Cyberdefense’s full wealth of expertise to safeguard it.
€2.1 billion 19% revenues from IT growth in Orange and integration Cyberdefense’s €100 million 29.3 billion services in 2017 revenues in 2017 Orange’s investment minutes: Orange (up 2.6% on a in TV series over International Carriers’ International carriersInternational sharedand services Enterprises comparable basis) the next five years voice traffic in 2017 36 Orange integrated 2017 annual report 37 Our strategy to create value
At Orange, we believe in creating value for all stakeholders such as our shareholders, customers, employees, the public sphere and communities, suppliers, people driving innovation. Our massive investment in networks is geared to offering customers to an unmatched experience powered by outstanding connectivity. In Fibre, for instance, our FTTH network reaches more European households than any other. By connecting customers wherever they are, Orange is contributing to local development and to narrowing the digital divide in all its geographies. Our deep local roots also translate into our significant contribution in the form of taxes and levies, which benefits society as a whole. Lastly, Orange is helping to make this value creation more sustainable and more responsible Chapter 1 Chapter 3 Chapter Our contribution Our by training its employees, playing its part in the innovation chain and rolling out its CSR policy. Our vision for digital technology for vision Our Chapter 2 Chapter 38 Orange integrated 2017 annual report 39
Value creation Fig. 3 Our model at Orange Resources
Human capital
Intellectual capital
Natural resources
Equipment/Assets The connectivity we provide electricity) and need to acquire Our activities also benefit our 152,000 Financial capital to our customers, whenever and employees licences to operate the radio employees (through the wages wherever they need it, is at the in the Group frequency spectrums that carry and benefits we pay), suppliers core of our model to create value. our mobile services. (the purchases we make), Business model We develop innovative services A €700 shareholders and creditors. so that customers can enjoy million A distinctive business model Our networks and activities support everything the digital universe has budget for We use these resources in our regional development, and the taxes to offer in a secure setting where day-to-day activities. Our model and levies we pay fuel development Building Providing connectivity for all, innovation guaranteeing high-quality their privacy is protected. in 2017 is one of the hallmarks that define in the countries hosting our and operating service who we are and what we do operations. Lastly, our investments Offering connectivity solutions, Dedicated resources at Orange, and encompasses in the innovation ecosystem – which €3.4 billion Marketing and and fixed, mobile and Our single most important resource three phases: we are active in as customers, convergent services for the invested distributing three segments (consumers, is our 152,000 employees and the in Fibre building and operating suppliers and business partners, businesses and operators) array of skills, profiles, expertise since 2015 telecommunications networks; for instance – are helping local and cultures they represent. We are marketing fixed and mobile start-ups to flourish. Enhancing our choice of deals Creating with a comprehensive suite of enhancing this human capital with connectivity deals to our three main an ecosystem services backed by a brand the intellectual capital we are building 4,299 GWh customer families, namely people trust of electricity through our research and innovation consumed in 2017 consumers, businesses and chain, the power of our brand and the operators; wealth of knowledge we have on our and, lastly, distributing digital Sharing value customers, their wants and needs, 1.85x services within a unified ecosystem with beneficiaries their habits and their experience with Net debt/adjusted under the Orange brand. EBITDA ratio digital technology. We operate in telecoms Customers (consumers, substantial tangible assets – including activities Benefits all around businesses and operators) our infrastructure, technical facilities, Our activities, technologies, products network equipment and 6,000 stores – and services create value for all Employees on a daily basis. our beneficiaries in our geographies, Suppliers The Group also needs financial and have positive social, economic resources to operate and invest. and environmental impacts. Communities Shareholders provide some of these The first beneficiaries are our resources and our financial situation customers, who choose to use Public sphere gives us the borrowing capacity we our products and services on account Shareholders and creditors need to secure the rest. Lastly, of of the advantages they provide course, we consume energy (mostly in their personal or professional lives. 40 Orange integrated 2017 annual report 41
Our Fig. 4 Essential benefits impacts for our stakeholders Financial flows Beneficiaries Examples of impacts for stakeholders
Orange services Fibre reaching 4.7 million customers (revenues) Orange customers €41 bn (consumers, businesses 4G coverage reaching 46 million Group customers and operators) Banking services for 37 million Orange Money customers in 17 countries
Wages and benefits The Group recruits 10,000 people a year €10 bn The wealth and variety of Orange’s In 2016-2018, we hired about 5,000 people on work-study contracts, more than 2,500 interns Employees interactions with its many and 7,500 people on permanent contracts in France stakeholders entail substantial 83% of Group employees recommend Orange as an employer (2017) impacts. Net investments 26.6 million households are ready to connect to very high-speed fixed broadband (excl. xDSL) We supply products and services (excl. licence purchases) Over 90% 4G coverage in Europe that all our customers value: they €7 bn Host communities enhance consumers’ daily lives, and Innovation We had invested €170 million at end-2017 and pledged a further plus €100 million help businesses and other operators via Orange Digital Investment work more efficiently and thereby Orange Fab, La Ruche (France) and 4 African incubators supported 435 entrepreneurs in 2017 create value in their turn. We incur expenses as an employer, Purchases Our distribution network encompasses 160,000 Orange Money retailers customer, investor, taxpayer, borrower €18 bn Suppliers and publicly-traded company. Partners Joint Audit Cooperation (JAC) assessments are building suppliers’ skills and lowering their employee churn And, lastly, we generate qualitative impacts through the convenience Taxes and licence €0.6 billion in income tax we bring customers, the trust our acquisitions €1.8 billion in other taxes including the French contribution économique territoriale, IFER €3 bn (flat-rate tax on network enterprises) and similar levies, frequency spectrum fees, and taxes brand inspires, our efforts to manage Public sphere on telecommunications services our and our customer’s environmental impacts, and the many benefits from €617 million to purchase licences our philanthropy and social outreach. Investors €4 bn Shareholders 4.8% total shareholder returns in 2017 including a €0.65 dividend per share These aspects are visible in our Creditors A 0.3% increase in our share price financial flows and achievements, but the social and economic value that our Group creates stretches far Intangible A brand people trust, services that bring people closer together beyond the numbers. shared value Environmental impact (a 50.03% drop in CO2 emissions per customer use, in Group scope, versus 2006; 15.2% of used mobile devices collected Europe-wide)
Contributions to discussions on the social impacts of digital technology via the Digital Society Forum
Orange Foundation: 8,000 employees active in 30 countries, notably advancing digital education for youths and support for women in vulnerable circumstances 42 Orange integrated 2017 annual report 43
Measuring our social and economic impact at country level
What is our Group doing for €32 billion Local footprint products and services. Orange’s beneficiaries the cost of the countries it operates in? Orange’s To measure our simple economic investment in Internet infrastructure an essential product or service). In 2017, Orange decided to contribution footprint in the two countries, fast-tracks development in The results depend on the model accurately measure the windfall to wealth creation we tried to replicate our activity communities. When consumers used and are tested against from its value creation model, in France in 2016 realistically in a given territory. and businesses use the full array publicly-available data. We estimate with Goodwill Management We used the Thésaurus-Leontief of available services, they ultimately that -our social and economic and Utopies, two consultancies method (based on work by the fuel their country’s economy and footprint amounts to over specialised in CSR. winner of the Nobel Memorial Prize thereby grow its GDP. For example, €179 million, i.e. 4.8 times Orange’s We used 2016 data available in Economic Sciences Wassily in a country such as Niger, which value added in Niger and 2.89% of inside and outside the Group Leontief) to analyse the ways in has a sizeable informal economy, the country’s GDP. to conduct an in-depth study which monetary flows originating GSMA/Deloitte survey findings of the ripples spreading around from Orange (purchases, wages, in 2011 suggest that increased our operations in France and taxes) support businesses and jobs mobile (voice and data) service Niger. These assessments shed on a national scale. This method penetration rates triggered a 10% new light on the value that Orange for example showed that Orange increase in productivity and GDP. creates across three social and had made a €32 billion contribution Based on this model, we found economic levels. to wealth creation in France, that Orange’s mobile services have amounting to 1.5% of the country’s contributed €56 million to Niger’s gross domestic product (GDP), economy. in 2016. Findings also showed that our impact varies considerably CSR footprint depending on the geography, Lastly, the Group has developed its GDP, the Group’s purchases a method to factor in the value in it and average wages at Orange it creates through its externalities, and country-wide. i.e. the impact from its CSR programmes and Orange Extended footprint Foundation initiatives. This second angle zooms out to This approach covers the provide a bigger picture of the value economic effects arising from Orange creates. This “extended” our commitments and measured social and economic footprint in terms of incremental purchasing encompasses the additional value power among beneficiaries that our customers generate (because we provide free access when they use our infrastructure, to a new service or spare 44 Orange integrated 2017 annual report 45
Fig. 5 The Thésaurus-Leontief analysis grid Our strategy
Direct impacts Indirect impacts Ripple effects
Purchases, wages, taxes Supplier chain Household and public spending
Fig. 6 Social value created by Orange measured in terms of the number of jobs it supports
This multiplying factor provides Orange is committed to a human reinventing the customer the number of jobs that one direct job 72% at Orange supports in its host country and positive digital revolution, Orange’s share relationship, i.e. building more (based on 2016 data). and to rolling out its Essentials2020 in FTTH rollout personal interaction and treating France Niger strategic plan to create sustainable in France customers to the best bricks-and- x 3.9 x 42 value. This strategy is delivering mortar and online digital stores, financial results – operating cash 83% meaning more spacious buildings flow has started growing again – convergent where they can try out and learn Fig. 7 The social value Orange is creating through as well as benefits for our high-speed fixed about our products and services, its CSR policy stakeholders. broadband BtoC and always-on digital services; Examples of its initiatives to develop essential services customers in and support entrepreneurs in Niger building a company model Essentials2020 in a nutshell Spain that is both digital and caring, i.e. We see it as our mission to be developing our employees’ skills, Orange Money M-Agri The incubator (Cipmen) there for our customers at all times, helping them sharpen their agility connecting them to what they see and nurturing their engagement; In a country where Most Nigerians are Orange Niger supplies few people have bank small-scale farmers. a portion of the funding as essential and treating them supporting transformation among accounts, the Orange Labaroun Kassoua for Cipmen, Niger’s leading to an unmatched experience, our business customers by Money mobile service is a mobile service business incubator. day after day, with digital services enhancing technology and data- provides users with a less that supplies them Cipmen takes in companies they can use to enjoy the things related expertise to further their expensive, simpler and with essential information working in forward-looking instant alternative that about their business, sectors such as ICT, they care about the most, projects, and serve their teams covers the same features including prices renewable energies in an environment they can trust. and customers in turn, notably (cash deposits and of agricultural goods and the environment. This involves listening to them firstly with cloud & cybersecurity; withdrawals, money and livestock. The incubators help transfers, bill payment, these high-potential and then working with them to build capitalising on our assets to etc.). businesses get started, the customer-centric solutions diversify into promising forward- thrive and go on that address their needs. looking markets such as mobile to contribute directly to the country’s wealth Our aim with our Essentials2020 banking and connected objects. and job market. strategy, which we set in motion in 2015, is to take our momentum Strengthening our core business The benefits for the country over a year as an efficient and responsible In 2017, the Group pushed ahead Over €2 million Over €2 million €900,000 company to the next level by: with its strategy to increase its (direct and indirect job creation, (savings on the cost of (contribution to start-up providing enriched connectivity, network bandwidth and reach savings on bank charges, shopping around for prices, revenues) averted cash loss and theft, increases in farmers’ incomes, i.e. delivering superior performance in all its footprint. Bringing etc.) consumer savings from lower on every level, across borders, our customers enriched connectivity prices, etc.) with an environmentally-friendlier is what we do. And it provides approach; the bedrock for the unmatched 46 Orange integrated 2017 annual report 47
experience we promise and for €750 million Developing our growth levers several aspects of our strategy: it is a 327 Smart environment, and updated its pledge the full array of digital services that investment Orange has carried on building pioneering leap forward – it is the first Stores as a digital and caring employer with it encompasses. We have stepped in content its core business by developing time a carrier has ventured into the in 15 countries three priorities: into the very high-speed broadband services that spur growth, enhancing banking market with such a ensuring its teams have the skills age and reached our Essentials2020 Over our customers' experience and comprehensive solution – and we 4,000+ they need for the future, through plan’s midpoint, and Orange has nurturing their loyalty. For example, built it side by side with our recruitment as much as training; €2 billion Orange strenghtened its leadership through revenues from we set up Orange Content, a new employees and customers, following employees boosting its collective agility, its substantial investment in fixed BtoB integration division that tailors a choice of films, a test-and-learn approach mirroring and customers meaning its ability to innovate faster and mobile networks. and IT services TV shows, sports events, music the Group’s listening and responding involved in and to adapt its services and The sharp rise in our revenues and games to preferences in each attitude and its new corporate culture. Orange Bank processes more swiftly and in Europe stems, to a large extent, host country. pre-launch tests efficiently, with new work methods, from our very high-speed deals Services are also at the core Leveraging our employees’ skills new workspaces and large premises (4.7 million customers at end-2017) of Orange’s development in Orange’s employees and their like the Orange Gardens innovation and the quality of our 4G service. the business market, where demand dedication brought about more campus in France, Orange This standout position on fixed for integration and connectivity of the Group’s success in 2017 Côte d’Ivoire’s new head office and mobile networks in turn explains solutions harnessing data from than ever before. Three major trends in Abidjan (where construction work the success we are seeing in our Orange Business Services is growing. sped up changes in our environment. began at the end of November 2017) convergence strategy. We are the These services alone generated Firstly, the nature of our operations and Bridge, the Group’s future head leaders on this front: over 10 million over €2 billion in revenues in 2017, has kept evolving. We shifted further office in France; customers have signed up for including a significant contribution away from our telecommunications fostering engagement by providing our LOVE and Open deals, which from acquisitions in key sectors carrier model and closer towards a opportunities for employees to work are now available in all our European such as consulting and integration, multiservice digital operator model. on new business ventures in our countries, and grew by 11.1% consulting & integration, cloud Secondly, technology has carried on Intrapreneurs Studio, thinking outside in 2017, versus 2016. We also have systems (Log’in Consultants), its development. Artificial intelligence the box with our Oz participative heavily invested in networks in Africa cybersecurity (Lexsi in 2016) continued to break new ground and innovation programme, and investing and the Middle East, where voice and vehicle fleet management software shifted closer than ever to their time and talent in Orange and text services are gravitating (OCEAN in 2015). the core of network architectures. Foundation initiatives. towards the mobile Internet. The Lastly, Orange Money once again And, lastly, society continued to Group is supporting and smoothing posted sharp growth in Africa evolve. Expectations and attitudes Speeding up digital transformation this rapid shift with 3G services and the Middle East, and the Group towards work are changing among We can look back on breakthroughs in 20 countries and 4G services stepped further in its plan to diversify employees in general and younger in every aspect of our digital in 11 countries (excluding associates into mobile financial services when ones in particular. Orange pushed transformation in 2017. The Group and joint ventures), and a wide it launched Orange Bank in France in ahead with its own transformation drove its customer relationships choice of affordable smartphones. November 2017. This move captures amid those changes in its further into the digital world, 48 Orange integrated 2017 annual report 49
in particular with smartphones 89% coordinating these initiatives as part and digital ecosystems in homes. continue to leverage on our and our My Orange application of employees of our more comprehensive CSR These two strategic pillars – networks investment capacity and our ability (which over 16 million people now say they are policy, which encompasses our and services – will be backed by to forge pioneering industrial use), and kicked off its Digital Retail proud to work environmental measures and has the Group’s ongoing transformation, partnerships. Finally we will remain 2020 programme to speed up digital for Orange been described as advanced. including large-scale Group-wide alert on mergers and acquisitions technology rollout in all its stores Orange’s various scores in this area initiatives to take our skills and opportunitues as we did in the past and treat customers to a smooth 70% improved in 2017: we moved into culture to the next level, and to strenghten the Group’s position retail experience throughout of employees first place on the Vigeo Eiris telecoms to improve our processes by in its markets and to enhance our their journey. The Group’s digital say they are sector ranking with a 63/100 score embedding artificial intelligence products and services, for consumers transformation is also shaping benefitting from and have been included in four and more innovation into them. and businesses, when and as our collaborative innovation policy. the Group’s digital indexes, our EcoVadis score For the next strategic plan, we will opportunities arise. transformation Orange’s innovation ecosystem increased by 2 points to 79/100, grew to encompass new start-ups and our Carbon Disclosure Project in 2017, as we extended our Orange score was upgraded from B to A–. Fab programme (which is now up and Fig. 8 Our Essentials2020 strategy running in 15 countries) and enriched 2018 outlook our catalogue of solutions and APIs Orange’s strategy remains fully in the Orange Developer portal. focused on building an unmatched The Group is moreover aiming to invest customer experience. This entails Offering ed connec rich tivi over €350 million in funding start-ups pushing ahead with investment in en ty c u via Orange Digital Investment. networks to continue spreading FTTH s R to e i g g m n n n s v i i t e in Europe and paving the way for s e y i e r f l s n i r a t s e s t i r i n Promoting a responsible approach rapid expansion in very high-speed a l a e p g r t v a An i u i t o c o h
D
In addition to supporting fixed broadband networks in Africa n e
y unmatched s
n
b h
o i
entrepreneurship, Orange is helping and the Middle East, while bolstering customer p digital transformation to spread our 4G coverage on both sides experience
t throughout society with other of the Mediterranean and preparing t a o h S h g f e u t n b p l i pledges ranging across initiatives to launch 5G in 2020. We are also t p g e r u ra o n a s n r di d c in s ti il o e f ng u m d to promote trust in digital services, expecting to push our strategy as s or B y n s m an l a c atio p ta us n com gi the Orange Foundation’s a multiservice operator to new tom a di er oth programmes to foster digital heights in 2018, for example s is b inclusion, and efforts to encourage by enhancing our range of banking responsible and worry-free use and financial services, the choice A digital, efficient and responsible company of digital technology. We are of content we offer, IoT solutions 50 Orange integrated 2017 annual report 51
Our Essentials2020 indicators
Essentials2020 Choice and Definition of indicator Actions by category 2017 highlights Change driver strategic priority of stakeholder Customer Become and remain The NPS is the customer satisfaction metric that most accurately reflects For customers and employees: – Orange in Touch training implemented er entage o u to er experience No. 1 in Net Promoter the degree of customer loyalty to a brand. It is measured by asking – by finding keys to differentiation in each in more than 15 countries and Essential o ran Orange a Score (NPS) for 3 out customers whether they would recommend a company to family or country to become or remain No. 1; Voices programme to develop employees’ their No. 1 recommendation: of 4 customers by 2018 friends. The score is calculated by deducting the percentage of those – by focusing on our clients and people skills. who would not recommend a brand (detractors) from those who would employees in our decisions and – Rollout of Orange Premium in 10 countries 2015 7 (promoters), broken down by country and relevant segment. The indicator initiatives; to reach 1 million key account customers is the percentage of customers in the countries and segments where – by offering all customers services and and provide them with the extra services 2016 55 Orange ranks as their No. 1 recommendation. prices aligned with their expectations; and care they want. 2017 68% – by improving the quality of the network and its perception by each of our 2018 75 customers. Customer Improve Orange’s Brand This indicator is measured using the Brand Equity model developed For customers: – Shared campaigns: LOVE (convergence) u er o ountrie ere experience Power Index (BPI) in our by the specialised consultancy Millward Brown. The indicator shows – by deploying our new brand identity and Christmas (both in Europe), Youth i i pro ing different markets by 2018 predisposition for the brand independent from specific commercial in all our host countries; (Africa and the Middle East), VHBB (Africa). rod and and on ergent factors, taking into account how meaningful, different and prominent – by providing customers with – Rebranding in Burkina Faso, Liberia and o ile the brand is in customers’ minds. It is a means of measuring the power concrete proof of their experience Sierra Leone. of the Orange brand and the engagement of consumers. with Orange. 201 1 2 201 11 2 2017 6/10 14/24 201 o ing ontinuou progre Offering Triple average data Calculated in Mbps: For customers and regions: – 4G coverage above 90% in Europe and 4G i ed net or enriched throughput of our – based on external and independent measurements of average data – by improving the quality of our available in 11 African countries excluding o ile net or connectivity customers on both fixed throughputs delivered respectively by our 3G and 4G networks; network in critical areas for our associates and joint ventures (Egypt, 1 and mobile networks by – based on queries to fixed Internet databases of active customers customers; Madagascar and Mali launched in 2017). 201 2018 compared with (ADSL and Fibre), and measure of the data throughput configured – by covering over 95% of the – 4.7 million very high-speed fixed broadband 1 2 2014 for each. population in our European host customers (>100 Mbps). 201 Average data throughputs reflect our capacity to offer our customers markets with 4G access; – Commitment to provide better coverage in 1 x3.2 richer connectivity, in line with growing data usage (streaming, – by gradually increasing 4G capacity, white areas in France. 2017 HDTV, etc.). to maintain high average data – Improvement in network coverage where x2.5 throughput for 4G; customers need it (Toulouse metro, 201 – by continuing to launch 4G in new Mestalla stadium in Valencia, Brussels African countries; metro, 4G along four new high-speed rail – by continuing the rollout of FTTH lines in France, etc.). in Europe and the number of – Penetration rate of 4G-enabled handsets. customers connected to fibre. – Measure of individual service quality with the CEM (Customer Experience Management) tool used in 8 countries. Conduct 50% of The share of digital out of all interactions (purchase, management, For customers and employees – 327 Smart Stores at end-2017 and launch of Reinventing 201 0 the customer customer interactions service) with our customers in France and the rest of Europe across in contact with customers: the Digital Retail 2020 programme to deploy relationship via digital channels in all our channels (digital, call centre, stores). – by offering a personalised and an omni-channel retail experience: Orange 201 2 Europe by 2018 predominantly digital customer Spain now makes it possible for sales relationship, but always providing representatives to experience the entire 201 0 support if the customer needs it; customer journey by moving through the 2017 45% – by rethinking our omni-channel steps with the customer in the store. experience delivered through both – 16.6 million active My Orange users 201 0 physical premises and digital (19% growth in 2017). channels; – In France, almost 1 out of 4 Livebox – by making it easier for customers customers signs up for Fibre service through to manage all their simple services a digital channel, and nearly 1 out of 3 from their smartphone; Orange mobile plans is sold via digital service. – by developing online chat and – The first chatbots were rolled out in France messaging services for customer (Djingo) and Spain to deliver 24/7 support. conversational support. 52 Orange integrated 2017 annual report 53
Essentials2020 Choice and Definition of indicator Actions by category 2017 highlights Change driver strategic priority of stakeholder Building Reach 90% Orange is committed to building a people-oriented and digital employer For employees: – New agreement on the recognition of er entage o e plo ee o a company of employees model with regular measurement in employee surveys of the percentage – by securing the skills needed for employee skills and qualifications in France re o end Orange a a great pla e model that recommending Orange of employees who recommend Orange as an employer, both in France the future (training, recruitment); signed in February 2017. to or in ran e and out ide is both digital as an employer in 2018 and other countries. This rate has been measured since 2010 in a – by developing our collective agility – First phase of Oz, the new employee ran e t en orld ide twice-yearly survey conducted by an outside firm. thanks to simplified processes and innovation programme. and caring In 2017, for the first time in France, all employees were asked to take part more collaborative work methods; – Top Employer Global certification renewed 201 in the employee survey available online. Previously, only a sample of – by fostering individual commitment for the third year in a row in February 2018. 4,000 employees answered the survey by phone. This survey was (employee shareholding, – 8.8% of voting rights held by employees. 201 2 implemented outside France in 2011. The questionnaire – with participative innovation, 1 49 questions structured into the 3 priorities that make up the Orange intrapreneurship, etc.). 201 pledge – has been adapted and standardised to apply to all Group 2017 83% employees. In November 2016, a test project carried out involving all employees 201 0 outside France and a sample of 15,000 French employees, about which the Group had not disclosed information until now, was used to consolidate findings on both French and international employees for 2016. Increase the share of IT Orange wants to be the trusted partner for companies in the digital For customers: – Orange Cyberdefense campus opened Supporting 201 2 the digital & integration services revolution that is currently reshaping their business models, services – by enriching connectivity services in Paris-la Défense. transformation in the Orange Business and offers. Orange will measure the success of the transformation for enterprises; – Coordination of the smart city project in 201 0 of business Services revenue mix of its enterprise business model in light of the share of IT & integration – by helping business customers Doha, Qatar, the largest in the Persian Gulf. by 10 percentage points services in the Orange Business Services revenue mix (excluding through the transformation of their – Global launch of the new Flexible Engine 201 2 2 customers by 2020 the mobile segment in France). IT systems as they migrate toward public cloud solution. 2017 34% the Cloud; – Plan to acquire Business & Decision. – by providing applications for 201 customer relations, IoT and data analysis; – by proposing flexible, mobile, collaborative environments; – by protecting customer networks and applications. Diversifying Successfully diversify Orange is diversifying and exploring new areas in order to better For customers: – Launch of Orange Bank on 2 November: e enue and ot er in o e by capitalising into new services that anticipate the key needs of its customers and develop new services – by developing new connectivity a user-friendly, mobile-only offer designed on our assets will contribute more (in particular financial and IoT-related services). solutions and services for to give customers the mobile banking 201 than €1 billion in businesses and by offering its BtoB services they really want. It had €228 million in revenues revenues in 2018 and BtoC customers a range of 55,000 customers in France at end-2017. connected objects and services – Orange Money is available at (e.g. for smart homes); 160,000 points of sale in 17 countries, 201 – by offering a broader range serving 37 million customers. €323 million in revenues of mobile financial services, – Launch of Smart Security services in Spain and ot er in o e in particular through the launch and Luxembourg. 2017 of Orange Bank. – Several agreements signed to provide IoT €615 million in revenues solutions for OBS: Viasat, e-healthcare, and other income For innovation and regions: Cargotec, China Telecom partnership, etc. 201 – by becoming a major actor in the – Launch of Orange VR2 headset, the €1 billion in revenues connected objects ecosystem. Orange Live Cam and the Orange drone. and ot er in o e – Continued rollout of the LoRa® network in France and national LTE-M coverage in Belgium. – Live Booster programme for manufacturers of IoT devices. – 330 million pieces per minute: data processing capacity of the Orange Datavenue IoT solution. – Launch of Orange Energie, a subscription- based solar energy kit, in DRC. 54 Orange integrated 2017 annual report 55
Our Group indicators
Target Definition Resources Data
Financial indicators
Achieve higher adjusted Adjusted EBITDA is operating income before depreciation and amortisation, before – Through revenue growth and further progress in our operational efficiency plan. 2017 €12.8 billion EBITDA in 2018 than in 2017 impacts related to acquisitions of controlling interests, before impairment of goodwill 2 2 on a o para le a i on a comparable basis and assets, and before income from associates, adjusted for key disputes, specific personnel expenses, review of the portfolio of shares and operations, and restructuring 201 ig er t an 2017 and consolidation costs.
Reach higher operating Operating cash flow equals adjusted EBITDA minus capital expenditure (on tangible – Our continued efforts to reduce costs and maintain strict control 2017 €5,610 million cash flow in 2018 than in and intangible assets excluding telecommunication licences and investments through over investments. 0 on a o para le a i 2017 on a comparable basis finance leases). 201 ig er t an 2017 Maintain the ratio of net Net debt is the amount of financial liabilities, excluding operational liabilities (converted – Through growth in adjusted EBITDA and careful management 2017 1.85x financial debt to adjusted into euros at the current rate of exchange on the balance sheet date), including of our balance sheet. around EBITDA in telecom activities derivatives (assets and liabilities), less cash collateral deposits, cash and cash 201 2 at about 2x in the medium term equivalents, and investments at fair value. Extra-financial indicators
Reduce CO2 emissions by Orange has been actively committed to controlling and reducing the environmental – By monitoring network energy use and sharing equipment with other operators. edu tion in O2 e i ion 50% per customer use by impact of its operations since 2007. Orange set a new objective at the COP21 climate – By cutting the CO2 emissions of buildings, vehicles and travel. per u to er u e 2020 compared with 2006 conference in late 2016. Starting in 2016, the CO2 emissions of the 10 main countries – By extending ISO 14001 certification to the Group’s entire scope. which account for 90% of the Group’s internal emissions (networks, buildings, vehicles) – By engaging with international standards organisations (ITU, ETSI, Cenelec, 201 2 are calculated based on customer use (base year: 2006). The method for calculating etc.). 2017 50.03% this indicator has been devised and audited by independent bodies. The indicator – By embedding circular economy principles in our processes by 2020. measures different types of use (voice, data, TV, Internet, etc.). 2020 0
Increase the number of As part of our position as a socially-engaged operator in our host communities – By supporting the economic and regional development of La Ruche, a 201 1 0 entrepreneurs supported by and regions, Orange supports the development of new forms of business and collaborative co-working space for start-ups that want to make a social impact. our initiatives in favour of entrepreneurship at the local level, in addition to our Open Innovation programme. – By providing impetus for the creation of business incubators in Africa. 201 2 local economic and social We provide support directly through targeted actions by Orange, as well as indirectly supérieur à 2017 – By organising the annual Orange Social Entrepreneur Prize since 2011 in Africa development by 15% per by contributing to the momentum of local digital ecosystems. and the Middle East. 2017 435 year – By helping create venture funds. Average annual growth is expected to come to 15% by 2020. Reach 35% of women in our Ensuring access to management positions for women is a top priority in our workplace – By deploying multiple initiatives to identify new female talents. o o en in anage ent management networks in diversity policy. – By training managers to limit decision bias and the impact of stereotypes. 2020 – By ensuring gender balance within talent pools (as part of Orange Graduate 201 2 Programme recruitment, for example). 201 2 2 201 27 2017 28.5% 2020
Collect 30% of customers’ Natural resources are not limitless, which is why Orange has embedded the concept – By working with suppliers to extend the lifetime and maximise the reuse o u ed o ile p one olle ted used mobile phones by 2020 of a circular economy directly in its processes. In particular, this means recycling of network hardware thanks to a modular approach. in Europe or reusing equipment and terminals, especially used mobile phones. Percentages – By offering commercial incentives and organising eco-citizenship initiatives 201 12 refer to the number of mobiles collected out of the number of mobiles sold in Europe. across our distribution networks and with partners (public authorities, business 201 1 customers, etc.). 201 1 2017 15.2% 2020 0
Achieve these percentages Orange set up the Joint Audit Cooperation (JAC), an association of telecoms operators, – By cooperating with the JAC, enabling Orange to benefit from a larger panel
of supplier audits performed in 2011, and submits to audits. The JAC verifies, assesses and develops CSR of audited suppliers. % 0
as part of the Joint Audit implementation by Orange suppliers, including corrective action plans when necessary. – By working with tier 1, 2, 3 and 4 suppliers to reach the more distant levels 45 % 0 Cooperation (JAC) by 2020: The KPIs were reworked in 2016 to steer audits more towards covering the deepest in the production chain. % 1 31 – tier 1: 10%; levels of the supply chain, which are often where most cases of non-compliance are – By implementing a full audit process across our own portfolio of suppliers. 2 24 21 – tier 2: 35%; found. Tier 4 will be covered as of 2018. Working more closely with tier 1 suppliers 1 10
– tier 3: 50%; could naturally lead to a reduction in the number of audits at this level. The tier 1 – tier 4: 5%. percentage could be adjusted based on the findings of audits performed at this level between 2017 and 2019. e ore 201 201 2017 2020 ier 1 ier 2 ier ier 56 Orange integrated 2017 annual report 57
Effective, responsible governance takes, above all, foresight. This means dealing Our main with the risks and opportunities involved in implementing strategy, carrying out business activities, building trust in the Orange brand, and managing legal liability. As such, non-financial risks the Group has set up a structure, procedural framework and risk control system to reduce its risk exposure, making sure that adequate and appropriate measures are taken to identify and mitigate risk.
Risk Potential impact Protection/Preventive measures
A Breach of integrity or confidentiality Illegal access or cyberattack causing an information leak The Group’s Security Department oversees a comprehensive security system, continuously improving measures of data or information or business interruption. to protect infrastructure, products and services, and implementing a Security by Design approach to address security issues as of the design phase. Meanwhile, the Data Protection Officer coordinates all privacy-related programmes and measures. Orange also has specialised expertise through Orange Cyberdefense.
B Ethical breach Sanctions against the company and/or employees, The Group’s Ethics Committee and Chief Compliance Officer have laid down a Code of Ethics and the Orange Group (incl. fraud, corruption, etc.) damage to Group property and assets. anticorruption policy, and carry out regular internal control system audits; while providing employee training and awareness programmes to ensure these principles are applied.
C Overreliance on a supplier. Business interruption, deterioration in quality or performance due The purchasing policy, steered by the Global Procurement & Supply Chain Department, includes a risk assessment to failure on the part of a key supplier or contractual terms imposed in the supplier selection process. The Group conducts regular audits, and closely monitors suppliers at risk of bankruptcy. by a monopolistic supplier.
D Destabilisation due to a disruptive Obsolescence, loss of contact with customers or drop in performance At our Orange Gardens eco-campus, the Innovation, Marketing and Technology Department monitors industry trends business model or innovation due to a disruptive technology or business that could affect the appeal for any major transformations in our markets, participates in standard setting bodies, and steers our policy of active or profitability of our products and services. investment in research and innovation.
E Failure to diversify (mobile Damage to the Group’s image and reputation (also financial losses). Special organisations and teams have been set up to track our growth areas and monitor industry trends, and are backed financial services, connected with available funding and an open innovation policy with ecosystem leaders, through partnerships and investments. objects, cybersecurity, content)
F Geopolitical and macroeconomic Threat to the security and safety of people and property Monitoring systems are in operation to anticipate any potentially adverse geopolitical and macroeconomic situations instability (also decline in financial performance). (national conflicts, international tensions, monetary crises, etc.) and to take appropriate steps to protect people and assets.
G Major business interruption Loss in quality or disruption of services provided to other organisations A Business Continuity Management System (BCMS) is overseen by the Security Department and deployed at our business due to a technical malfunction, operational failure, cyberattack units, featuring backup sites, system redundancy, business recovery plans, etc. or damage to our infrastructure.
H Lack of key or rare skills Delayed launch or discontinuation of new businesses, major business The Group implements an employment and skills planning policy, invests in or buys specialised businesses, and develops interruption, increased reliance on suppliers. its range of job training (Cyberdefense Academy, Sonatel Academy, etc.) to make sure it has the new expertise it needs.
I Non-compliance with laws, Disputes, administrative, civil or criminal sanctions at either the local The Group’s Legal Department supervises the coverage of all our regions and business activities through special regulations or contractual or international level, revocation of the right to do business. programmes and units focusing on key issues, e.g. the European General Data Protection Regulation (GDPR), obligations France’s duty of care law, compliance with international economic sanctions, etc.
J Electromagnetic fields: potential Reduction in the use of mobile devices, destabilisation of the telecoms The Group takes steps to make sure that its handsets and other equipment meet current health requirements, supports effects without scientific certainty business model, legal claims. public and private epidemiological research programmes (WHO, SCENIHR, etc.), develops tools to measure wave intensity, and leads awareness initiatives on safe usage for employees and customers.
K Human health and safety Deterioration in working conditions, physical and mental harm The Group leads a proactive risk prevention policy with its own budget and special agreements: to people (employees, customers, partners). – internally, the application of the people charter and our pledge to be a digital and caring employer; – externally, awareness programmes about responsible use of digital technology, such as family support programmes: Better Internet for Kids, bienvivreledigital.orange.fr website, etc. 58 Orange integrated 2017 annual report 59
Fig. 9 Our risk matrix Our principles and governing bodies
C A
E Orange firmly believes in the 15 directors, 3 directors representing D importance of strong, efficient members the public sector, 3 directors elected F governance. That is why it has built on the Board by employees and 1 director B a robust governance system of Directors, representing employee K geared to advancing the Group’s of which 6 women shareholders. Their term of office (50% as strategy and tackling the determined by is four years. The Board also challenges in its environment. the French law of appoints a senior independent Also convinced that strong 27 January 2011) director, who works to maintain the governance drives strong balance of power within the Board, H G performance, Orange keeps and centralises and coordinates accountability along with risk 7 the work of the community of I independent management and control directors independent directors. This role constantly at the centre of guarantees efficiency in governance our concerns. To apply the best while ensuring smooth relations J governance practices, Orange between the Board of Directors and refers to the recommendations set the senior management at Orange. out in the corporate governance The Board of Directors meets
Probability code for French publicly traded regularly and as needed to serve companies (Afep-Medef Code). Orange’s business dealings. In 2017, Impact the Board met 8 times, with
A Breach of integrity or confidentiality of data F Geopolitical and macroeconomic instability Board of Directors an attendance rate of 92%. It also or information G Major business interruption Orange’s corporate governance responded promptly when the B Ethical breach (incl. fraud, corruption, etc.) H Lack of key or rare skills is overseen by the Board of Group’s situation required it, holding C Overreliance on a supplier I Non-compliance with laws, regulations or Directors, which presides over all exceptional meetings on top of D Destabilisation due to a disruptive business contractual obligations decisions relating to the Group’s its regularly scheduled sessions. model or innovation J Electromagnetic fields: potential effects without major strategic, economic, social, Board meetings typically last about scientific certainty E Failure to diversify (mobile financial services, financial and technological policies four hours. connected objects, cybersecurity, content) K Human health and safety implemented by senior management. The current Board Work of the Board in 2017 Operational risks Compliance risks Strategic risks of Directors comprises 15 members In addition to overseeing regular who possess a complementary business operations (review Note: Detailed information on our financial risks and the description of the risk management range of expertise and experience of operational performance, framework are available in the Orange Registration Document published every year. useful to Orange’s needs: quarterly earnings, half-year the Chairman, 7 independent and annual financial statements, 60 Orange integrated 2017 annual report 61
Fig. 10 Composition of the Board of Directors
budget, risk factors, executive pay, 8 and Corporate Social etc.), the Board of Directors sessions held and Environmental Responsibility monitored progress on by the Board of Committee in 2016. implementing the Essentials2020 Directors in 2017 The Board decided to launch Stéphane Richard* Chairman and Chief Executive Officer strategic plan. For example, a self-assessment of its functioning it examined the sale of a stake 4 hours after the Annual General Meeting in BT Group owned by Orange, typical duration on 4 May 2018. At the meeting financing requirements of Board meetings of the Board of Directors of consolidated subsidiaries, on 20 February 2018, Charles-Henri and the FTTH investment plan Filippi, senior independent director, Hélène Marcy Director representing the employee shareholders in Spain. The Board also renewed reported on his duties in 2017. the 2017-2019 multi-year performance-based variable Embracing transformation compensation plan for corporate The Board of Directors actively officers. In application of the Board’s participates in the Group’s Sébastien Crozier, internal regulations, the Board transformation. In addition to regular Fabrice Jolys, Directors representing the employees of Directors met once to check Board of Directors meetings, René Ollier that internal control systems its members come together and financial and extra-financial for strategic seminars twice a year. risk management systems are These seminars are an opportunity Alexandre Bompard, Christel Heydemann**, in place, and to monitor their to engage in detailed discussions Charles-Henri Filippi, efficiency. This meeting was about Orange, progress on its Bernard Ramanantsoa, Independent directors prepared by first holding a joint strategy, and the result of actions Helle Kristoffersen, Mouna Sepehri, meeting with the three Board undertaken at the Group. Jean-Michel Severino committees. The Board received presentations Role of specialised committees Lucie Muniesa, on the Group’s 2016 CSR The Board of Directors is guided Anne Lange, performance and on the detailed by three specialised committees, Bpifrance Participations Directors representing the public sector CSR report. As part of the annual namely the Audit Committee, (represented review of its functioning and Governance and Corporate Social by Nicolas Dufourcq) the functioning of its committees, and Environmental Responsibility Committee (GCSER), and the the Board implemented * Subject to renewal at the AGM scheduled on 4 May 2018. recommendations from the formal Innovation and Technology ** Subject to ratification at the AGM scheduled on 4 May 2018. audit led by the Governance Committee. These committees 62 Orange integrated 2017 annual report 63
Fig. 11 Active and proactive directors
Committee Board of meetings Directors are very active, holding as many 92% Governance and Corporate Social at Orange, and reviews the Group’s Innovation sessions as necessary before each attendance rate and Environmental Responsibility objectives for innovation and and Technology January at meetings of the Board meeting, to support Board Committee (GCSER) research. The Innovation and Audit members in making informed Board of Directors Its three main areas of expertise Technology Committee met four decisions on specific topics, are the appointment and times in 2017, with an attendance Audit drawing on their respective remuneration of corporate officers, rate of 95%. February BD 93% CGSER (x 2) expertise and responsibilities. attendance rate corporate social responsibility The specialised committees at preliminary and governance. Audit Committee held a total of 18 meetings in 2017. This committee reviews company March BD meetings Each committee is chaired policy on human resources, CGSER by an independent director; executive pay and corporate social the Governance and Corporate and environmental responsibility, April Audit BD Social and Environmental based on discussions with Innovation May Responsibility Committee, the Group’s stakeholders and Technology and the Innovation and Technology and in line with the Group’s strategy. Ordinary BD Committee are chaired by women. It also ensures that the Group’s Beyond Orange SA Innovation June and Technology Code of Ethics is adhered to, Extraordinary BD Audit Committee and is informed about As governance plays an essential This committee reviews the implementation of compliance role in driving the performance Audit July BD the management reports and programmes covering ethics, of a group, Orange aims to set CGSER accounts, and ensures the reliability anticorruption, international the example in its governance and clarity of the information economic sanctions and mobile practice. Beyond Orange, August provided to shareholders. financial services. The Governance a publicly traded company, As of December 2017, its chairman and Corporate Social and the robustness of the governance September Joint also presides over the Joint Environmental Responsibility system is adapted at Group Audit Committee, a forum which brings Committee met six times in 2017, companies through its Orange October BD together the members of the three with an attendance rate of 92%. Directors programme. This CGSER committees to examine programme addresses staff the efficiency of internal control Innovation and Technology members who serve as director November CGSER and risk management systems, Committee at a company owned by Orange, and of antifraud measures. This committee contributes providing them with a shared set Audit December BD The Audit Committee met seven to informing the opinion of the Board of best practices to uphold strong Innovation times in 2017, with an attendance of Directors about issues involving governance throughout the Group and Technology rate of 91%. innovation and value creation at all times. 64 Orange integrated 2017 annual report 65
General Management Fig. 12 Executive Committee at 2 May 2018
Stéphane Richard Chairman and Chief Executive Officer
Finance and Performance Executive Director, Europe Ramon Fernandez (excluding France and Spain)
Chief Executive Officer Delegate, Group Transformation, Gervais Pellissier and Chairman of Orange Business Services To improve the effectiveness of its 15 the Tax Committee and Claims everyday corporate governance, members and Commitments Committee study, Fabienne Dulac Deputy Chief Executive Officer, Orange France Orange is led by its Chairman and of the Executive respectively, the Group’s principal tax Chief Executive Officer, who works Committee issues to determine the impact, Mari-Noëlle Deputy Chief Executive Officer, Technology with two Chief Executive Officer (2 May 2018), if any, on the Group’s books, and of which 5 women Jégo-Laveissière and Global Innovation Division Delegates, three Deputy Chief the Group’s main disputes and Executive Officers and nine Senior contractual obligations to ensure that Laurent Paillassot Chief Executive Officer, Orange Spain Executive Vice-Presidents. They all any risks related to them are covered work to contribute to the Group’s in the form of accounting provisions; Executive Vice-President, CSR, Diversity, Partnerships and long-term success. the Risks Committee reviews Christine Albanel Philanthropy, and Deputy Chairman of the Orange Foundation the Group’s primary risks and submits Executive Committee recommendations to the Executive Chief Executive Officer, Orange Wholesale & International Jérôme Barré The Executive Committee steers Committee pertaining to risk Networks the Group and coordinates management and internal control; the implementation of its strategy. the Employment and Skills It monitors the Group’s progress Committee plays a special role Hugues Foulon Executive Vice-President, Group Strategy and Cybersecurity towards achieving operational, in implementing the Group’s social and technical targets, and employment policy; Nicolas Guérin General Secretary and Secretary of the Board of Directors the allocation of financial resources. the Disclosure Committee checks The Group’s operational governance is the completeness, accuracy and put into action by several specialised consistency of Orange’s financial Valérie Le Boulanger Executive Vice-President, Human Resources committees, which report to the disclosures and their compliance with Executive Committee. The main applicable laws, regulations objective of these committees is to and recognised practices; Béatrice Mandine Executive Vice-President, Communications and Brand manage the risks involved in honouring the Ethics Committee ensures that the Group’s financial commitments, the Group’s Code of Ethics is applied, Alioune Ndiaye Chief Executive Officer, Orange Middle East and Africa (OMEA) thereby limiting its overall exposure: offers guidance on its implementation the Group Investment Committee and suggests amendments where focuses on reviewing the Group’s needed. It also looks into specific Helmut Reisinger Chief Executive Officer, Orange Business Services financial commitments; situations submitted for its review, and the Treasury and Financing reports to the Executive Committee Executive in charge of developing Orange Bank To be appointed Committee defines the framework and Governance and Corporate Social and Orange Money activities for managing the Group’s financing and Environmental Responsibility and debt; Committee every year. 66 Orange integrated 2017 annual report 67
Business conduct
Our Group has made a pledge Zero Ethics and Compliance Day, to be a responsible, trusted Orange enforces an annual Group-wide event company, and to conduct its a zero tolerance organised worldwide to build business activities with honesty policy on a positive attitude towards ethics and integrity, in line with corruption and compliance, is an opportunity our Code of Ethics. for executive managers to express their support for these issues while The goals in our Essentials2020 creating a powerful way to raise strategic plan for international employee awareness and provide growth and the development of new them with information and training. services make our commitment to ethics even more necessary, Anticorruption as we enforce a zero tolerance Orange updated its anticorruption policy on corruption, money policy in 2017 to comply with French laundering and financing law no. 2016-1691 of 9 December of terrorism, while upholding human 2016, referred to as the “Sapin II rights and acting as a responsible law”, on transparency, anticorruption purchaser and taxpayer. measures and the modernisation of economic life. This new policy Ethics policy serves as a code of conduct Group employees can find out about as defined in article 17 of the ethics and compliance through legislation. In 2017, Orange also the set of guidelines laid down continued rolling out its due in our Code of Ethics. This code, diligence procedure to review along with online training modules its partners, iDDfix, covering fraud and other literature on ethics, and compliance in its main anticorruption and conflicts countries. The procedure is of interest, is available on designed to protect the company the Orange corporate website and its stakeholders, gaining and a special intranet site, Ethics a deeper understanding of our and Compliance. partners and the risks involved Intranet sites developed by divisions in doing business with them. and countries also provide access Performance to these documents and training. 68 Orange integrated 2017 annual report 69
2017 performance
Operational and financial figures €41.1 billion in consolidated revenues
Financial figures Breakdown
€41.1 billion Consolidated revenues 42.5% France
€12.8 billion Adjusted EBITDA 12.9% Spain
€2.1 billion Consolidated net income 11.6% Africa, Middle East
17.4% Investment in telecommunications 6.4% Poland out of consolidated revenues 4.2% Central Europe 1.85x Ratio of net financial debt to adjusted EBITDA in telecom activities 3.0% Belgium and Luxembourg
16.7% Entreprises Operational figures 2.7% International carriers & shared services
273 million customers in 28 countries
10 million more customers in 2017
211 million mobile customers
10.3 million BtoC convergent customers in Europe
4.7 million Fibre customers
36.9 million Orange Money customers
21 countries covered by 4G 70 Orange integrated 2017 annual report 71
Extra-financial figures
Share performance in 2017 Number of meetings
Orange 8 Board of Directors 0 to ele o 4 Innovation and Technology Committee
7 Audit Committee
6 Governance and Corporate Social and Environmental Responsibility Committee (GCSER)
e an e ar pril a une ul ugu t ept O t o e 201 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 Attendance rate
The telecoms industry underperformed the market in 2017 for the second year in a row, 92% at Board of Directors meetings posting a total return rate of 0.7%, compared with 11.2% for the European market 93% at preliminary Committee meetings (Stoxx Euro 600). This performance brought total shareholder return (TSR) for the Orange share to 4.8% for 2017, surpassing the Stoxx Telco index (up 0.7%). The Orange share closed 2017 at €14.48. This was reflected in considerable returns, with the dividend rising from €0.60 for FY 2016 to €0.65 for FY 2017. The Group will propose a dividend payment of €0.70 per share for 2018.
Orange share
€14.48 share price at 31 December 2017
€0.65 dividend per share for 2017 (subject to the approval of the AGM) 72 Orange integrated 2017 annual report 73
Energy Employees consumption by business line
A Customer services 5,672 GWh 49.4% B Innovation By region 2.4% A France C Support functions 48.8% 13.6% A B Spain D Content and multimedia 7.2% 0.4% A C Poland E Information systems 11.9% 9.4% D Rest of the world F Networks 32.1% 23.4% G Other B C D B C D E F G 1.4%
Employees per country 1.33 million tons of CO2 emitted in 2017 (scopes 1 and 2) A France 61.2% By energy source B Spain A Electricity 4.7% 75.3% C Poland B Oil 9.9% 14.5% D Africa, the Middle East and Asia C Vehicle fuel 10% 7.2% E Europe (excl. France, Spain, Poland) D Natural gas 5% 3% F Orange Business Services A A 7.9% G Rest of the world 1.3% B C D B C D E F G 74 Orange integrated 2017 annual report 75 Our contribution
How do our philosophy, our business model and its strategic implementation translate into concrete action? The angle we have chosen to present our 2017 initiatives and achievements is the benefits our stakeholders are enjoying as a result. Here are seven sets of issues that intertwine with the digital world and which, taken together, illustrate the Orange experience and our commitment to creating value everyone can share. Chapter 1 Chapter 2 Chapter Our strategy to create value create to strategy Our Our vision for digital technology for vision Our Chapter 3 Chapter 76 Orange integrated 2017 annual report 77
recent launches in transformation of the Livebox and triple we will respond more Networks Madagascar, Mali businesses. The play in France in quickly to network and Egypt, 4G is technology cleared 2004. Today, the attacks and incidents, now available in a milestone in 2017, switch towards all-IP and develop new and connectivity 11 countries in Africa with the first technical is advancing steadily, services more easily and the Middle East specifications with 70% of our – in just a few days (excluding associates defined by 3GPP, residential phone rather than the few and joint ventures). the umbrella lines running on months it currently We have extended organisation that sets the technology. takes. The Easy Go 4G coverage in telecoms technology. The Group also rolled Network, the first Europe, which now Orange was a part out voice over LTE solution based on reaches 96% of the of the process. and Wi-Fi services this technology, was population in France Our research throughout Europe. launched in 2016 for Connectivity This is the core of our business: we roll out, and almost 100% in and innovation Also on the forefront our multinational Meeting growing operate and maintain the networks that enable Belgium and Poland. programme also of delivering TV over business customers connectivity needs, the full range of digital experiences, and invest continued to focus IP, Orange boasts and is now available especially in massively to expand, upgrade and enhance 5G on 5G technology the largest European in 75 countries. We emerging economies, the reliability of our networks so that our Scheduled for and services in network, with are also deploying is one of the main customers and host communities can enjoy deployment starting partnership with 9.1 million customers virtualised network challenges of the in 2020, 5G will leaders from the (IPTV + satellite TV). functions, for digital revolution. all the possibilities digital technology brings them. provide both BtoB mobile industry example to manage In 2017, the Group and BtoC customers and other business Virtualisation mobile data, and joined in two new with personalised sectors. For example, The virtualisation voice over LTE or submarine cable services. This Orange Romania of network functions over Wi-Fi. projects: FLY-LION3 enhanced conducted an involves using to enhance multiservice unprecedented trial software to manage 1 million connectivity in Fibre households in Europe connectivity will in the centre of functions that used The number of the Indian Ocean Very high-speed at end-2017. Orange unlock the potential Bucharest in to be covered by customers in France and the Kanawa broadband is creating is also rolling out to develop new uses, December 2017 to special machines. who used Orange cable in the new ways for our FTTH in Africa and in areas such as 360° test smart antennas This will make our Wi-Fi services in Caribbean to link residential customers the Middle East, video and self-driving designed for the 5G operations more high-speed trains in French Guiana to to use digital targeting the main cars. Orange is network. agile, meaning that July and August 2017. Martinique by the technology. Several cities in Morocco, already working to end of 2018. To offer years ago, Orange Jordan, Côte d’Ivoire build this network Convergence operators expanded began investing in and Senegal. and aims to be a Future networks will IP connectivity, FTTH (Fibre To The leader in the market. be based entirely the International Home) to be able to €7.2 billion Orange’s 5G strategy on IP technology. Carriers segment offer bandwidths of invested in 2017, is directed at three This will make the opened IP points up to 1 Gbps, and mainly in our 4G key objectives: offer evolution towards of presence eventually up to and FTTH networks. mobile broadband convergence easier in Cape Town 10 Gbps. This service 10 times and open the gates and Johannesburg, strategic choice is deployment plan has 4G faster than 4G, towards even more making Orange what has made us consolidated with Orange invests develop fixed access new services. the first operator to leader in very 26.5 million FTTx heavily in its through 5G, and Orange pioneered provide the wholesale high-speed (very high-speed high-speed design new this network market with high- broadband in Europe, fixed broadband) broadband mobile applications to transformation with quality IP connectivity a position our connectable networks. Following support the digital the introduction of throughout Africa. 78 Orange integrated 2017 annual report 79
87% to linking objects, Jean-Marie oversees increase in demand with more than the development for mobile data traffic 150 business of digital infrastructure via Orange networks. customers who have in his region already chosen the Internet Datavenue solution Vice-President in charge of Things available from Orange of digital development The IoT makes it Business Services. of the Charente-Maritime region possible for people Meanwhile, the Group in western France, to manage their lives decided to deploy Jean-Marie Roustit discusses more intelligently LTE-M across its 4G how connectivity is fuelling progress and more sustainably, networks in Europe. in the region he represents. e.g. their consumption This technology is of energy and natural specially designed to “It has become vital for elected resources, and their optimise IoT services: officials and authorities to make sure access to essential Belgium was fully that all citizens, regardless of origin, services. Orange covered by the end location, age or lifestyle, can be part has been active in of 2017, with testing of the ‘digital society’. This also developing IoT for under way in Spain contributes to the development over ten years, with and initial trialling in of our region. These days all Machine-to-Machine France. companies across every business applications using sector need good connectivity. 2G, 3G and 4G 330 million By covering the entire department mobile networks. Datavenue’s with very high-speed broadband To take things up a processing capacity service, we are giving all businesses notch, the Group is in pieces of data per everywhere, not just those in town rolling out a LoRa® minute (up 5 times in centres, the means to grow. network dedicated volume over a year). Charente-Maritime has been developing these Public Initiative Networks since 2006, and it has always viewed its involvement as a partnership. Our private partners bring us their expertise in developing and operating the network while investing in our department. In exchange, public funding acts as a catalyst to develop digital “These days all infrastructure that would not be feasible without a viable economic companies need model for private operators. good connectivity.” As a result, all these partners come together to improve digital service.”
+ Find out more on rai2017.orange.com/en/ Networks and connectivity
Fixed networks
IP transport networks No. 1 for Fibre in Europe with 26.5 million very high-speed fixed connectable households (FTTx)
Transmission networks Transforming our infrastructure IoT networks 3 markets: consumers, businesses, operators/ISPs (wholesale) Preparing to introduce Corporate networks 5G in 2020
Managing 10 times higher maximum our impacts bandwidth than 4G 4 times more efficient Mobile to boost service coverage and quality
Synergies with FTTH to improve very high-speed 67.49% of our activities broadband coverage €17 worldwide are ISO 14001 in local areas billion investment in networks certified (2015 to 2018) Boosting flexibility Embedding the circular with all-IP networks economy in our processes Building 70% of residential voice connectivity Eco-designing future communications already and region products and services IP-based Reusing hardware to 80% of fixed access points appeal lengthen its life already IP-based
Collecting and recycling 90% of France’s copper preowned electronic aggregation network equipment replaced with fibre so far 28 Teaming up with suppliers Leveraging FTTH countries with mobile acces Orange Territoires to develop high energy networks Connectés programme efficiency equipment enhancing coverage Future-proof infrastructure Bringing in France’s rural areas Partnering with Huawei, to handle bandwidths over Nokia, Ericsson 1 Gbit/s tomorrow connectivity to Agreement with Arcep our customers and French government The Green ITN 2020 plan Virtualising networks on mobile coverage and to reduce information functions and automating Homes and buildings eliminating white areas system and network operations to gain energy consumption efficiency: 3 Global Public transport Contribution to France’s Network Operation Centres Public Initiative Networks More than 2,800 solar (GNOCs) centralise Trunk roads (PINs) power relay antennas operations in 20 countries
Tourist destinations Tripling average bandwidth Optimising datacentre Saving 10% to 20% on (ski resorts, beaches, etc.) between 2015 and 2018 air-conditioning operating costs 80 Orange integrated 2017 annual report 81
Co-building two main topics: Artificial Customer with our mindset and ways intelligence customers of doing and saying In 2017, the Group Orange wants things. Through our launched several experience to boost the Essential Voices initiatives to enhance engagement of its programme, all customer relations customers to build Orange employees with artificial the future of digital were asked to intelligence, for together. We already contribute in three example using have many examples areas: leading by chatbots. In France, of the ways we can example, employee Orange unveiled collaborate. empowerment and its virtual assistant, In Romania, more continuous Djingo, at the Hello than 30,000 improvement, with Show. In Spain, We help our customers tap into all the advantages customers voted e-learning tools and a customer the digital world has to offer, with technologies over a mobile app hands-on workshops. assistance service and organisations that anticipate their to choose the next was implemented, requirements ever more accurately and priority regions where 200,000 which handled individually, which we are using to reinvent 4G should be views of the Orange 300,000 chats in five structured to provide journeys (account deployed. Eight mini-series, “The months and filtered countries with opening, deposits/ Orange’s relationships with its customers. countries have customer experience, out most questions a shared outlook withdrawals, created peer-to-peer it’s everyone’s without any human and best practices transfers/payments) digital help business”, which intervention. Similar in rolling out these have been communities, where followed Executive projects are on solutions. redesigned to meet customers help out Committee members the verge of launch the standards of our other customers in as they shared a day in Romania and Customer customers and those Digital in all Group countries, solving their technical in the life of an Jordan, drawing journeys of regulators. These Customers want the app has issues, with an employee in action on a Group-wide Projects have been projects all factor everything at their 16.6 million active average problem- on the job. programme implemented in all in both the impact fingertips, right there, users, up 19% from solving rate of 80%. our countries to on the customer when and where 2016. Growth has identify or predict (satisfaction/ they need it. And they been particularly Putting “pain points” in the recommendation) want to do it on their impressive in Africa people first customer journeys and operational own. So our digital and the Middle East, At Orange, we are and eliminate them. efficiency (churn interaction with where the number reinventing the These projects cover rates). them (BtoC, BtoB of users increased customer relationship issues in both our and operators) is fourfold over a year, by completely traditional businesses 90% developing. In Europe, clearing the 2.6 million rethinking our people (migration to customer satisfaction 45% of the mark by the end of skills. For example, convergence offers, rate at Orange interactions between 2017. an Orange in Touch roaming charges, Poland, which was Orange and its training programme switching to Fibre, awarded international customers now take No. 2 was provided in more mobile phone theft/ certification for the place over a digital turning point towards Forbes magazine than 15 countries loss) and mobile fourth consecutive channel, edging us a more digital ranks Orange second and business units, financial services. year from the closer to our 50% relationship, especially in digital maturity reaching over With the accelerated Customer Operations target for 2018. Mobile with the My Orange among all CAC 40 12,000 employees. development of Performance Center service has been the application. Available companies. The course covered Orange Money, all (COPC). 82 Orange integrated 2017 annual report 83
Lope is thankful for Orange’s customised solutions to support his business
Lope Quintero Roa is a technician specialised in fishing boats. Over the past twenty-five-plus years, he has seen how digital technology has dramatically changed his industry. These advances have enabled Lope to develop his business and customer base in sensors and automatic control systems within his market.
“Since the advent of smart systems, I’ve been able to take my business to the next level, boosting capabilities Smart Stores 400 more of these in service precision and quality for To support our concept stores. In my customers. When one of them has customers in using parallel, we are moving a problem on a boat, I can now take our products and forward in our Digital care of it immediately and remotely, services, and to Retail 2020 from anywhere in the world. I get that showcase our programme to deploy excellent service quality from Orange, innovation, we an omni-channel retail which offers the most comprehensive launched the Smart experience. Various range of options. I can use my Orange Store concept several enhancements are services every day – fixed, fibre, years ago. This being tested in TV, mobile lines, smart TV, etc. – programme has different countries, in running my business, as well transformed our retail for example in as outside work. I have a perfect outlets to Luxembourg relationship with Orange. My adviser complement services (customers can always gives me the time and care delivered through reserve a product I need, bringing me an optimal digital channels and online and collect it personalised response to any need “I want to be able create a smoother two hours later in a that may arise or doubts I may have.” customer journey. At physical store), Spain to bring my end-December 2017, (providing our sales we had opened staff with tablets for customers what 327 Smart Stores in more personalized Orange brings me.” 15 countries, of which customer support) and 123 in France, Tunisia (overhauling 170 throughout the the self-care process rest of Europe, and to provide customers 34 in Africa and the with access to their Middle East. In 2018, omni-channel + Find out more on we plan to open purchase history). rai2017.orange.com/en/ Customer experience
Livebox – Parental control – Wi-Fi configuration – Connected device management
Network – Best connection search – Network status and bandwidth tests Apps – Technical support
My Orange – Consumption monitoring, bills, orders, assistance
Smart Stores – Appointments with Orange advisers – Queue-related updates – Product and service demonstrations Web – Attractions and events – Self-service connected objects and accessories
Customer areas – Consumption monitoring, bills, orders, assistance
Forums – Orange-moderated peer-to-peer In person help community
Online store – Signing up for fixed, mobile and convergent deals – Paperless document transmission – Catalogue of connected objects and accessories – Special deals
Collaboration – Product and service design – Satisfaction surveys – Prototype and beta-version testing
Remote experts – Help desk and troubleshooting – Phone, chat, messaging, social media
16.6 48% 45% 6,000 million increase in My Orange of interaction stores My Orange active users users in Africa and Middle East in France and the rest of Europe worldwide, (Q4 2016 to Q4 2017) via digital channels at end-2017 incl. 327 Smart Stores 1 in 3 80% 4,000+ contracts sold of reported problems Orange employees and customers via digital channels in France solved by fellow customers involved in Orange Bank pre-launch tests 84 Orange integrated 2017 annual report 85
services, including on a bank card. 427,000 customers Digital uses micro-credit and Distributed through (up 30% from 2016). micro-savings. a network of The next step was To meet the 140 approved Orange Orange Cash, the burgeoning demand stores, the new mobile payment from customers who banking service will application launched use smartphones, also be available in France and Spain Orange Money will through the network in 2014 with over also be available of Groupama 650,000 customers through a new app branches in 2018. at the end of 2017. featuring a Orange Bank had conversational attracted nearly 4,000 interface that was 100,000 customers Orange employees We have a duty to stand by our customers successfully tested in by end-February and customers as they explore the digital world’s possibilities. Côte d’Ivoire in 2017. 2018, less than four involved in testing home, browse around Business Services, The countless new uses – sometimes on months after its Orange Bank Orange TV, or even Orange is a key the cutting edge of technology – need to 37 million launch, and aims services. answer a question. partner in the smart be useful and relevant to our digital lives. Orange Money to draw 2 million This voice- or city pilot project in And they are opening up significant strategic customers customers in France Artificial text-controlled Alba Iulia, Romania. in 17 countries over ten years. intelligence service comes with In 2017, one year after growth opportunities for the Group. at end-2017. Orange Bank’s Another trend to its own purpose- the project launch success stems from watch in 2017 was engineered speaker with the city Banking the Group’s expertise artificial intelligence. and is available government, Orange One of the Group’s in mobile financial Orange customers through certain completed the first major highlights of services gained began to benefit Orange applications operational phase the year was its new in both Africa and from this technology and the remote and began analysing Digital their mobile phone, Orange Bank service Europe. Its first with Djingo, its control on the latest the data collected financial for easier, faster, first revealed in mobile banking multiservice virtual TV decoders. Djingo through a system transactions more secure and less April 2017 at the Hello initiative, Orange assistant that harnesses artificial embedded with over For the past several expensive service. Show, ahead of its Finanse, was debuted at the Hello intelligence 600 sensors. What years, Orange has In 2017, 37 million retail launch in France launched as a Show in April. Djingo capabilities to learn will this bring? been developing customers carried in November. This partnership with interacts with all from its users and get The purpose is to innovative mobile out over 1 billion mobile-only model mBank in 2014 in content and services better at bringing bring about a positive financial services transactions with is shaking things up Poland. By end-2017, within our ecosystem them what they want. impact for the city – a fast-growing Orange Money, on the market, it had reached almost to command a smart by more efficiently sector in 2017 – moving a total of offering a suite Smart cities managing its as electronic €26 billion. Initially of unique services, Connected objects infrastructure, transactions and developed by such as opening and our Internet transport network online personal trend with Orange and for our African a bank account with of Things solutions and tourism services. finance management Money. In countries subsidiaries, the a smartphone, are finding actionable For example, the use have become a reflex where few people service was launched making contactless applications in of connected for an increasing have bank accounts, in Romania in 2016, payments with a the management lampposts over number of people, Orange Money has where it attracted smartphone or bank of smart cities. the first few months especially the provided millions of 81,000 users in one card, transferring In addition to resulted in electricity younger generation. customers with year. In 2018, Orange money via SMS, and contributing on an savings of 50% Our Group has been access to essential Money will expand its placing or removing innovative project in to 70% in the street spearheading this financial services via mix of financial a temporary block Qatar through Orange lighting budget. 86 Orange integrated 2017 annual report 87
Connected objects, the Group Attaher manages objects has launched three his money safely For customers to get new Orange-brand the most out of what objects: the Orange As a high-ranking official in Niger, the Internet of Things Live Cam (360-degree Attaher Lawali Dango likes the fast, has to offer, Orange camera for easy and secure service available plans to integrate smartphones), from Orange Money. He can transfer value-added services high-performance money and pay bills that are for smart homes, Orange VR2 headset important for his personal life, healthcare and and the Orange anytime, anywhere, even when well-being across Drone, to bring users far from where he works. different markets a simple and fun in Europe. In 2017, flying experience. “Mobile service plays a special role the Group launched We are capitalising in my daily life. It’s a part of me. a Smart Security on our network of I’ve been using it to manage service in Spain physical and Smart my personal finances since 2012, and Luxembourg. Stores to present with Orange Money and all the It is bundled into these new objects services available: money transfers, a single-point and coach our airtime top-up, bill payment, financial smartphone app customers in their transactions, etc. Paying bills that lets customers digital choices. electronically is the most practical enable and disable In 2017, Orange service and the most important for me their alarm system, also launched day to day. I use it to help my parents send alerts, and, the Livebooster financially. They live in another region, if they’ve installed programme for the but I can pay their water and electricity an IP camera, view wholesale market. bills without leaving my office! Orange what’s happening This range of modules Money also allows me to coordinate inside their home can be integrated one of the biggest projects I’ve in real time. As a into any object to undertaken in my entire life. I’m having partner to innovative enable connectivity, two villas built over 600 km from start-ups in thereby driving where I work. These services save me developing and the interconnected time in every way. And I can manage distributing connected ecosystem. my money safely, at a low cost.”
“Orange Money is like keeping my bank in my pocket.”
+ Find out more on rai2017.orange.com/en/ Digital uses
Connecting with personal Smarter home More interaction and fun and professional contacts – Weather station – Connected watches – Telephone – Connected light bulbs, power sockets – Cameras – Internet and switches – Virtual reality headsets – E-mail – Connected keychains – Drones and robots – SMS/MMS – Connected gardens – Rich communication services (chat, video, file sharing, etc.)
Entertainment and information Protecting your belongings – TV – CCTV – VOD/streaming The Djingo virtual assistant – Intercoms – Music – Use voice and text messages to control – Alarms and sensors – Video games the Orange ecosystem – Newspapers and magazines – Browse Orange TV – Manage connected objects – Access customised help and advice – Place calls and send text messages – Request information, ask questions Simple money management Orange Bank: the mobile-only bank Well-being – Open an account with your mobile phone – Connected activity trackers – Pay with your card or mobile phone – Connected shoe soles at your discretion – Connected aromatherapy – Check your balance in real time diffusers All your data, always at your fingertips – Send money with a text message The Orange Cloud – Block your card temporarily, then unblock – Mobile data backup it yourself – Document, photo and video storage Orange Money: paying, buying and transferring funds and sharing – Deposit and withdraw money – Central bill and document storage – Buy airtime credits and management – Transfer money locally (and to some foreign countries) – Photo certification – Pay bills wherever you are – Livebox storage management – Pay for purchases in neighbourhood shops – Photo albums and editing and online – Personal video streaming Orange Cash: simpler, safer shopping – Pay retailers with your mobile phone using contactless technology – Pay online with a single-use virtual card – Check your balance in real time – Geolocate retailers and special deals
– Sm jects artph ob on d es te – ec L n iv n e o b C o – x – s t D e l j i b n a g
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V P Over Almost 14 million 9.1 million 100,000 37 million connected objects on Orange’s customers using Orange Bank customers less than 4 months Orange Money customers networks today Orange TV services since its launch (at February 2018) (at December 2017) 88 Orange integrated 2017 annual report 89
Cloud compliance with Digital In February 2017, the SecNumCloud Orange Business standard set by Services announced the French National transformation in the launch of its Information System worldwide public Security Agency cloud, Flexible (ANSSI) for its French businesses and Engine, together with platform. its new application management and >70% cybersecurity expertise services The share of IT offer. Flexible Engine budgets allocated to is one of the Orange Cloud services over Business Services the next three years. trajectories set by launched in mid- The exponential growth in Big Data spells the need solutions delivered Orange Healthcare, 2017, soon followed for complex, interconnected circuits, from for the European Smart cities the Orange Business by the D-Trak collection to analysis, to turn bytes into insights. Space Agency’s Orange Business Services subsidiary wristwatch tracker for Orange is supporting this “data journey” by Copernicus Services signed created in 2016 to Alzheimer’s patients, harnessing the power of data for companies’ programme. The a multimillion dollar develop the Group’s and the W-Trak Group was selected contract in Qatar e-health business. system aimed for use teams, customers and projects. as part of an with the managed by domiciliary care Airbus-led services provider Internet workers. In developed consortium to Meeza to deliver of Things mechanical Cryptobox, provide cloud the majority of Orange Business engineering, the an ultra-secure services to boost applications and Services signed Finnish company collaborative the use of Earth smart services several major Cargotec chose Vision covers six categories to combine the work solution observation data. for the Msheireb contracts in 2017 Orange Business In May 2017, Orange of action: Collect, expertise of Orange (in partnership Furthermore, the Downtown Doha relating to the IoT. Services to fit its entered into exclusive Transport, Protect, Business Services with Ercom) Group has reiterated project. With One of these is to cargo and load negotiations to acquire Store and Process, in data protection and launched its objective to 500,000 embedded supply 350,000 SIM handling equipment the international Analyse, and finally and security against a certification become a leader sensors and a set cards and a special with IoT sensors and consulting and Share and Create. cyberthreats. training programme in sovereign cloud of advanced IoT portal for Viasat, connectivity primarily systems integration Connectivity, IoT, Cloud, The entity gained open to all future solutions. As part applications, this an international used for predictive group Business Cybersecurity... traction in 2017, cybersecurity of achieving that, historical operator based in maintenance. & Decision. The these areas of opening a experts, Orange it is seeking neighbourhood in Italy that supplies acquisition is in line expertise and their 6,800 square metre Cyberdefense the Qatari capital telematics services 137,000 with the strategy of potential synergies campus in Paris-la Academy. is one of the only for insurance and employees provided Orange Business place Orange Défense, Europe’s fully-integrated smart fleet management. with network and IT Services to become Business Services at largest business 30 billion district programmes Orange also supports infrastructure a leading partner every step in this data district, and a hub events analysed in the world. UK-based start-up spanning 350 sites across the value chain journey, giving it a in Lesquin, every day by Stonelin in providing of German of customer data unique advantage. in northern France, Orange’s CyberSoC 91.6 million IoT connectivity automotive suppliers services. The deal to focus on security (cybersecurity Estimated number for three innovative ZF and TRW. Orange aims to support Cyber- for customers in operation centres) of connected health devices: V-Trak, Business Services businesses through security France and Benelux. for more than objects in 2020, a low-cost vehicle will integrate the every step in their Orange Cyberdefense Orange 80 large companies which is one of tracker that infrastructure after “data journey”, which was created in 2016 Cyberdefense and organisations. the strategic growth commercially their merger. 90 Orange integrated 2017 annual report 91
Michel heads Orange expertise in cybersecurity
Orange Cyberdefense CEO Michel Van Den Berghe emphasises how important security is for businesses in our increasingly interconnected world.
“With the digital transformation of organisations, data integrity has become critical. The continuity of their business operations and confidentiality of their transactions depend on it. In today’s world, where concealing stolen information has developed into a business in its own right, all companies are potential victims of cyberthreats – from Smart as land use multinationals to small businesses agriculture monitoring, property that work together and can infect each In June 2017, and building other through their interconnected Orange and protection, networks. As a European leader in Nexxtep-Technologies and logistics cybersecurity, Orange Cyberdefense teamed up in management for guides companies throughout the life a partnership inputs (fertilisers cycle of their data, from conducting to develop smart and pesticides). vulnerability audits on hardware to agriculture in France. A case in point, detecting intrusions, and to recovering Based in eastern farming employs from a cyberattack, should one occur. France, the company 60% of the labour We continuously patrol operations, will roll out market in Africa but including on social media and the 4,000 sensors to be contributes about Darknet. That way, every business installed at farms one fourth of GDP. can benefit from the security solutions in the Champagne Orange supports that match the value of its digital region. The data many companies in assets and how they’re used. collected will be sent streamlining farming We protect what’s essential to them.” over Orange’s LoRa® operations, including network and a number of processed by our start-ups, such Datavenue platform. as Tech-Innov, Farmers will benefit which makes smart “All businesses need from reliable irrigation systems. to take cybersecurity connected Several test projects traceability solutions are being developed measures.” that are economical at our African + Find out more on and easy to use, such subsidiaries. rai2017.orange.com/en/ Digital transformation in businesses and cybersecurity
Enhancing your customers’ New services Facilitating teamwork Productivity anywhere experiences to give you an edge
Almost Over 1 ,000 2,400 200,000 96% digital app development developers, integrators and experts people use the business collaboration of the French population projects a year specialised in digital technology, solution in the Cisco Spark cloud by Orange has 4G coverage data analytics and the IoT Business Services
Customers Teams
Sharing and creating
Analysing Collecting
Orchestrating the business data value chain
Storing and Transporting processing
Protecting
Projects and processes
Tailoring infrastructure Protecting your business Any connection, anywhere to your requirements
1,600 1,200 220 experts, engineers and project managers security experts countries and territories supporting workstation and infrastructure at Orange Cyberdéfense covered by network services migration into the Cloud from Orange Business Services 92 Orange integrated 2017 annual report 93
while maintaining the number of Group, both in France with disabilities and Digital top-notch standards business units and around the world antidiscrimination in human support. awarded certification (see our policy. The agreement for their gender Essentials2020 targets 570 new hires and caring Close to 30 equality standards indicators on with disabilities, and applications available has continued to pages 50-53). at least 150 of them to on our in-house increase. Today, permanent positions. employer mobile app store it covers corporate, Skills Apps@Work, to make its European In February 2017, 7.1% life easier for subsidiaries, Orange the Group signed Share of employees employees. Egypt, Orange a new agreement employment of people with disabilities at Tunisia, and Orange on the recognition with disabilities. Orange SA in 2017. Collective Business Services of employee skills For example, we agility in France, Italy, and qualifications developed Ellomi, Professional As healthy employee relationships are central In October 2017, Germany, Brazil with employee an application integration to our business performance, we are moving we launched the first and Egypt. representatives available in almost Continuing its action forward with our pledge to be a digital and caring step in Oz, the new in France. The 40 countries to teach as a leading employer using similar approaches in all our host employee innovation agreement provides managers about employer, Orange countries to build an unmatched employee programme. Set a framework for invisible disabilities. takes great care in to evolve over adapting employee On 28 June 2017, making sure young experience. the coming months, skills to its rapidly acting on unanimous hires feel properly Oz aims to develop changing environment approval from trade integrated. The a culture that fosters and maintain the unions, Orange Happy Trainees and initiative and employability of its signed a further Happy Candidates entrepreneurial spirit employees. Over three-year agreement awards the Group to harness our full the next few months, to support the has earned reflect the Employee digital transformation if needed. With that wealth of collective the Group will develop employment and quality of internships experience signed in 2016. frame of mind, intelligence of our a knowledge base inclusion of people and work-based Our HR objective is Concretely, this we launched an app teams. and training tools in to create an employee employee experience for occasional Listening four strategic areas experience that should offer access teleworking in 2017. Gender Our annual employee for the future: reflects the customer to all day-to-day HR The Group’s equality and survey is structured customer empathy, experience, both services by long-term plan is to diversity into priorities based digital trust, the open digital and caring. smartphone, while offer personalised HR In November 2017, on our pledge to and agile company, We want our teams keeping human services through the Orange successfully deliver in three areas: and technological to feel a sense of contact available use of applications renewed its GEEIS skills, agility and leadership. fulfilment at an (Gender Equality engagement. In 2017, organisation that is for European and 71,735 employees Disability constantly moving International (51.4% of staff) In 2017, as every year, higher, fuelled by the Standard) expressed their Orange participated digital transformation. certification, opinions in answering in the International Managers play a key which evaluates the survey. The Day of Persons with role in making that an organisation’s findings showed Disabilities. The a reality, and need commitment and overall progress in Group restated its the support of HR, initiatives in support three indicators that commitment and set as it is set out in the of workplace gender measure employee out its initiatives to agreement on the equality. Since 2011, attachment to the promote the 94 Orange integrated 2017 annual report 95
learning programmes of these positions Catalin, available and the are for work in putting customers first outstanding overall digital technology recruitment businesses. Catalin Anechei, an operation experience. Each quality engineer at Orange year over the Quality of life Romania, told us how digital 2016-2018 period, at work technology is enhancing his the Group is hiring In February 2018, everyday life at work, stepping up 5,000 young people for the third his self-reliance, shortening his “Digital technology on work-based consecutive year, response time and boosting his is facilitating learning contracts Orange received productivity by enabling him to and at least the Top Employer share information more efficiently. teamwork.” 2,500 interns across Global 2018 world all its business lines certification, which “I realised early on that agility in France. rewards the best HR is essential in my job. In our team, policies and that means more independence. Hiring practices. In all, We’re all accountable for completing The Group raised 30 Group countries full assignments, from beginning its 2017 recruitment and regions, mainly to end. At my level, I use agile work estimates for through Orange methods because I’m always looking 2016-2018, with Business Services, for new ways of getting jobs done a total of 7,500 hires applied for this more efficiently, to benefit our on permanent certification and customers. As the world’s changing employment successfully non-stop, agility is becoming the key contracts in France qualified. Orange to enjoying your job. There’s nothing (500 more than is the only telecoms quite like new technology to boost initially planned), operator among agility. The fact that we’re transitioning of which 30% the 13 multinational towards virtualisation means we can through integration award winners fast-track innovation, and it is actually programmes. Most this year. opening up unbelievable possibilities for innovation. Digital technology is helping us facilitate teamwork and enables everyone on the team to pool information.”
+ Find out more on rai2017.orange.com/en/ Digital and caring employer
Talent acquisition Initiative recognition Employee-centric/ Identify, convince and attract the right Find new ways to reward personal Know your empployee talents, with the right skills, at the right time, contributions and dedication, financially Expand our knowledge of our to tackle the Group’s challenges. or otherwise. employees to help them develop their skill set and bring them more Career path Everyday experience fine-tuned services. Give all employees opportunities to Treat employees to the experiences our showcase their skills and advance their customers enjoy, with pioneering services careers. and providing the right conditions for a healthy work-life balance.
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E 3 priorities 2 3 Develop Nurture our collective everyone’s agility engagement
S kil ion ls transformat and ity collective agil
HR experience Oz, embrace initiative New ways of working Enable our HR teams to play their full role Develop a culture that fosters initiative Lead innovation in employee relations, driving Orange’s transformation among its to harness our full wealth of collective encouraging new, more collaborative employees and managers. intelligence. ways of working that enhance customer services. Reinventing management Digital transformation Shift habits and embed feedback in Develop digital practices and culture to Skills management corporate culture to boost employee build the bedrock for an agile enterprise. Anticipate requirements, support skills engagement. transformation. 96 Orange integrated 2017 annual report 97
d’Ivoire, we teamed them with free- with will remain universities, and Responsible up with local of-charge Internet secure throughout civil society universities and access. The value of every step in their representatives) École polytechnique donations collected relationship with in finding ways commitment to launch a Master’s has supplied Orange. to address some programme in Data 500 households of society’s key Science. To promote with free 4G access Freedom issues in this area: and trust responsible use of and a tablet, with of expression online content from digital technology, configuration and Digital technology extremists, fake we continued training provided plays a central role news, governments supporting the Better by volunteer staff in today’s society. initiating network Internet for Kids members. So operators such as shutdowns, and the programme, through Orange must publicly like. In 2017, we also workshops, mainly Personal and transparently took further steps in Because of the progress it can bring about, in Romania, Slovakia data speak out in support our commitment to digital technology is also the subject of and Moldova. In In ramping up of privacy protection uphold human rights, discussions about practices and the impacts France, the practical Solidarity to meet the and freedom of with the publication it entails. We have a duty to be the operator people tips and expert Accessibility, both requirements of the expression. The of a transparency and businesses trust, and to be able to treat advice available geographical and European General Group is an active report that lists on the website financial, are key Data Protection member of the Global government everyone to a safe, positive experience. espacedesparents.fr issues in preventing Regulation (GDPR), Network Initiative requisitions, the were featured and bridging social which will take effect (GNI), which merged signing by Stéphane in a novel digital gaps. The Group’s in May 2018, the with Telecom Richard of the campaign that commitment to Group has set up a Industry Dialogue modern slavery circuited through addressing these Data Strategy (TID) in March 2017 statement, and the a number of issues takes concrete Governance Board to bring together publication of our Digital exhibitions (Paris form in solidarity within its Executive all stakeholders first human rights education Games Week, Salon initiatives, especially Committee to (operators, service report based on UN Education is a key de l’étudiant, etc.). through the Orange guarantee the legal providers, NGOs, guidelines. vector for taking Additionally, nearly Foundation. 2017 and responsible use advantage, safely, 2 million pages of highlights include of our customers of everything digital advice were viewed the development data. Data Protection technology has to on bienvivreledigital. of Orange Studio’s Officers (DPOs) have offer. That’s why orange.fr. social programme also been appointed we have made it in Poland, with at all of our a priority to support 3,258 27 new multimedia subsidiaries. Our families and children. employees in Poland, centres opened, for commitment goes We develop a variety i.e. 23.4% of total a total of 100 centres beyond regulatory of initiatives to teach example in 2017, of coding and digital staff, were involved within reach of compliance to step them about the right under our culture. In in the Orange 900,000 residents up our data protection ways to use #SuperCoders November 2017, we Foundation’s skills in rural areas. Spain’s methodology in every technology, and programme, opened the Sonatel sponsorship original Gigas area of our provide educational 9,000 children age 9 Academy in Senegal, programme in 2017. Solidarios campaign organisation. programmes on to 12 in 17 countries a free coding school It is the country’s lets customers As such, we can digital technology, were trained by supported by the largest corporate donate unused gigs guarantee our through digital 1,200 Orange incubator CTIC in volunteer to underprivileged customers that the technology. For coaches in the basics Dakar. In Côte programme. families, providing data they trust us 98 Orange integrated 2017 annual report 99
Duty of care discussion held Janet got back on A vigilance plan was with stakeholders, her feet through devised based on the to identify what they the Digital Centres first five requirements expect priorities programme set out in France’s to be in this area, duty of care law and to advance in The Orange Foundation’s Digital passed in 2017. These implementing our Centres support organisations that vigilance measures action plan. As a work to help women become more require organisations result, a collective independent and to provide equal to identify the risks channel was set up access to the labour market. Now and the steps that in January 2017 working as a front desk receptionist can be taken to to manage waste in Brittany, France, Janet De Melo prevent these risks electrical and is a programme graduate. of violation of human electronic equipment rights and the health (WEEE) generated “After working for seventeen years and safety of people internally by our at a bank in Brazil, where I grew up, and the environment. networks and IT I arrived in France and had to start infrastructure. For over. I was used to using office Environmen- used mobile phones, applications such as Excel, but they tal protection we collected a record looked unfamiliar to me here! I got Orange deploys number of customer support from the organisation solutions and devices in France, Force Femmes, where they ambitious action and the programme encouraged me to take a refresher plans to guide the is taking hold course through the Orange ecological and throughout the Foundation and its Digital Centres energy transition. In Group. In Africa and programme. I was able to participate 2017, we continued the Middle East, we in workshops that taught fundamental our progress in now have five waste office tools such as Word, Excel systematically sorting workshops and PowerPoint. That got me back obtaining ISO 14001 that have collected on track, and enabled me to meet certification for our 2 million mobiles new people and benefit from expert Environmental and shipped advice. Thanks to that helping hand, Management System 20 containers to I regained my self-confidence, (EMS). Currently, France for recycling. learnt how to make my CV shine, 66.6% of the Group’s and ended up finding a permanent scope complies with position as a receptionist at Cercle this benchmark Paul Bert in Rennes.” “Besides deepening standard. At the COP21 climate my knowledge, change conference, we made a the workshops commitment to gave me strength integrate circular economy objectives. and self-confidence.” We then presented our progress towards + Find out more on this goal at a rai2017.orange.com/en/ Responsible commitment and trust
Protecting Privacy Access – Our comprehensive security policy human rights – We have set up 100 Orange complies with ISO 27001 requirements. Studios (public multimedia – The Group was one of the industry’s centres in suburban and rural first movers on this front with the areas in Poland). Orange charter on data protection – The applications-autisme.com and personal privacy in 2013. website provides all the apps that – We have appointed data protection can help people with autism learn officers (DPOs) in each subsidiary, about digital technology. who report to a Group DPO, in accordance with the EU’s new Family assistance General Data Protection Regulation – The Better Internet for Kids (GDPR). programme provides parental – Orange’s Trust Badge gives users control tools and educational control over the information they share. videos on screen time, – A section discussing users’ data cyberbullying and other topics, and their identity on bienvivreledigital. on Orange’s portals. orange.fr helps them enjoy the – The Orange Foundation’s digital Internet safely. solidarity programme organises Promoting workshops on digital protection. Individual liberties – Orange is active in the Global Network digital inclusion Education and training Initiative (GNI), an organisation – “Digital school” kits have promoting freedom of expression reached 130,000 learners and privacy in the ICT sector, and a in 532 disadvantaged schools member of the Initiative’s board of in 12 countries. directors. – The Ensemble pour l’Insertion – The Group has published its first des Jeunes (“together for youth report on Orange and human rights. integration”) programme trained – The e-learning platform on human 14,200 young people in digital rights is available in 90% of the technology in 2017. Group’s geographies. – 200 Digital Centres in 18 countries – Orange has signed a statement have trained 11,000 unskilled on modern slavery. or jobless women in Europe and Africa. Responsible purchasing 73 Solidarity FabLabs in – We conduct CSR audits among our 11 countries are working with suppliers and their subcontractors young people from underprivileged in partnership with other operators backgrounds or who are having in the Joint Audit Cooperation Contributing to difficulties at school. (366 audits in 27 countries, covering a more supportive and – We have pushed ahead with 817,000 supplier employees, the #SuperCoders programme since 2010). responsible society for children age 9 to 12. It has reached 20,000 kids in 17 countries in Europe and Africa since its inception. – We have opened Sonatel Academy, the first free-of-charge coding Inclusion school in Dakar, Senegal, in – Spanish users can donate unused partnership with Simplon. gigs to underprivileged families, providing them with free-of-charge Internet access, through the Gigas Solidarios programme. – We have set up a forum for stakeholders’ dialogue on digital poverty.
Digital society Limiting the health- – Orange’s Digital Society Forum is an unprecedented collaborative related impacts from space to share views on digital our activities technologies and the changes they are driving throughout Protection from radio waves society. – We are contributing to research 12 topics including healthcare, programmes, including a study learning in the digital age, on the impact from 5G radio new 2.0 relationships, attention waves. and information abundance, – And promoting best practices on and work and new technologies. www.ondes-radio.orange.com. 12 expert round tables, 69 workshops, 3,000 participants Curbing digital addiction and over 1,000 proposals from – Orange was the first operator citizens since 2013. to publish a brochure on digital addiction in children. 100 Orange integrated 2017 annual report 101
development (winner of the Nobel Orange Digital Collaborative via our start-up Memorial Prize in Investment, we are accelerator, Orange Economic Sciences) generating the Fab. With offices research teams, Ben resources to invest innovation opened in Belgium, Gourion University, in start-ups from Luxembourg and and others. In late the digital ecosystem Romania in 2017, this 2017, Orange initiated that are capable network is now active an integrative of capturing in 15 countries on research programme high-growth markets, 4 continents, and to anticipate developing disruptive has supported more long-term technology or than 300 start-ups breakthroughs in building innovative Increasing technology complexity and higher user to date. Under technology, usage business models. expectations have altered the innovation equation. Facebook’s Telecom and business models Our Group also has New products and services will only interest users Infrastructure relating to the its own investment if we team up with all the players in our ecosystem Project, Orange Fab Internet of Things, vehicle, Orange to invent them, using diverse work methods France initiated sensitive homes and Digital Ventures, that allow us to capture the most promising growth Telecom Track for ambient connectivity. to zero in on five opportunities, while permanently integrating new start-ups that artificial intelligence d'Avenir) and Europe Thing’in, Home’in and key areas: new develop network applications to (seventh framework Plug’in, our three connectivity, uses for customers. infrastructure. enhance the customer programme backed research platforms, enterprise services experience, smart by the European are where Orange (cloud, data, etc.), 435 homes, cybersecurity Union, Eureka Celtic, researchers come Fintech, Internet entrepreneurs and the Internet Horizon 2020). together to study of Things, and new supported in 2017, of Things. Orange is involved how all the business models up 82% compared with two Technology technological bricks for Africa. For Acceleration poises itself to detect the seed stage, ready with 2016. Research Research Institutes, will fit together with example in this last These days, start-ups trends with the to take off, or already Orange research B<>com and users, while in area, Orange Digital are the ideal highest potential mature, we offer Alliance works closely SystemX. We also constant dialogue Ventures opened springboard for of enhancing its start-ups guidance Orange is a member with academic, support 12 research with society. a branch in Senegal achieving fast, agile universe of services. throughout every of the Go Ignite institutional and chairs and in 2017, earmarking and responsive Whether they are in phase in their alliance alongside industrial partners. 5 foundations, and 140 €50 million to finance digital innovation that Deutsche Telekom, As a member of have signed more doctoral or post- African start-ups. can interlock multiple Singtel and several public-private than 30 research doctoral students At end-2017, the concepts, Telefónica to bring partnerships, the contracts to establish working solely on Group plans to set technologies and start-ups access to Group works with strategic Orange research aside over models. By the resources and 10 business clusters partnerships with projects. €350 million to supporting these global markets of the and contributes leading-edge finance start-ups. entrepreneurial four partners, which to more than research centres Investment initiatives and making offer combined 70 cooperative around the world: Through minority 16 the resources of our potential of more projects in France Institut Mines- interests in several start-ups financed ecosystem available than 1 billion (Fonds Unique Télécom, INRIA, innovation investment by the Orange to them, Orange not customers. In 2017, Interministériel, CNRS, funds (Innovacom, Digital Ventures only helps power the Go Ignite selected its Agence nationale Polytechnique, Iris Capital, fund, through economy in the second contingent of de la recherche, CentraleSupélec, Robolution, Teranga investments ranging countries where it five start-ups programme Fraunhofer Munich, Capital, etc.) from €500,000 operates but also specialised in Investissements the Jean Tirole managed under to €3 million. 102 Orange integrated 2017 annual report 103
Supporting Things, and more. Lionel, apace with his innovative The Group also fast moving company ecosystems partners with several Orange encourages incubators, such as Founded in 2010, Famoco the development La Ruche in France, is a success story in French Tech. of innovative services Cipmen in Niger, It began selling secure, contactless and business creation CTIC in Senegal, payment terminals in 2014. in diverse ways. For Saboutech in Guinea Its chairman and co-founder example, through the and Createam in Lionel Baraban talks about Orange Developer Mali. The seventh the role Orange has played programme, annual Orange Social in the growth of his start-up. the Group opens Entrepreneur Prize its service platforms for Africa and the “Our relationship has developed to application Middle East was over the years, first with Orange Fab developers to provide organised in 2017. and smooth access to the Group’s more innovative A total of 1,200 different business units, then through services to its projects were a more traditional customer customers. At submitted, i.e. 60% relationship with Orange Money end-2017, the more than in 2016. in Africa and Orange in Belgium. programme’s Every year, this prize Working with a large group like Orange catalogue featured recognises innovative has been a valuable experience. some 50 self-service projects that harness They are active on the ground application digital technology and deal with actual operational programming to improve the living challenges. That means we can “Innovation interfaces (APIs) conditions of local benefit from their experience spanning a broad populations in in real-life situations, and gauge is an objective range of areas, sectors such as our products and offers from their including education, healthcare, viewpoint. This has given us that we share, identification, agriculture, energy, tremendous insight. And in exchange, and that naturally payment, cloud mobile payment we bring Orange our strength: communications, and sustainable flexibility and agility. Today, Famoco brought us the Internet of development. has set off to conquer Africa, where we have already climbed another together.” notch with Orange in implementing mobile money and top-up solutions. Their trust and support have laid the crucial groundwork in helping us gain a foothold on the continent. We also count on this firm starting point, along with the knowledge brought by its business units on local issues, to push forward and develop more steadily in the region.”
+ Find out more on rai2017.orange.com/en/ Collaborative innovation
Pioneering for our customers People-centric innovation takes a Group-wide team effort. We are convinced that a collaborative approach, bringing everyone on board, spurs creativity, enhances efficiency and has a more powerful impact on business. Orange is integrating innovative ecosystems in all its geographies to address its customers’ wants and needs ever more closely. networks ® 32,000 people a year visit the Orange Gardens Hello Lab, a venue for discussions, innovation. Orange’s around construction joint and demonstrations 50,000 pro bono testers in the Lab Orange. Solidarity73 FabLabs in 11 countries. Participatory innovation, Intrapreneurs Studio, 44 businesses and created 100 jobs through spin-offs. More than 30 research partnerships with universities, worldwide. institutes and labs financed12 chairs by Orange. publishers, object integrators, manufacturersDevelopers, more. and – A catalogue containing 48 APIs on Orange along Developer, with a wealth etc.) solutions, resources ID kits, (connectivity of Lab– An test and objects to Open LoRa IoT on LTE-M Orange accelerators Fab are up and running in 15 countries on 4 continents. Go Ignite alliance with 3 other operators. Support for incubators including La Ruche and in Bond’innov France, Saboutech in Guinea, Createam in Mali, CTIC in Senegal and Cipmen in Niger. Teranga. and Robolution Next, Iris including funds innovation in Participation Direct investment via Orange Digital Ventures and Orange Digital Ventures Africa and(endowed with €100 million €50 million respectively). Partnerships with companies in the telecoms, electronics, automotive IT, and other industries work on to 70 cooperation projects. With our customers With our employees With the academic sphere With businesses start-upsWith industryWith
Research and innovation at Orange in 2017 €700 209 6,498 million new patent-protected patents invested in research and innovation inventions in our portfolio 104 Orange integrated 2017 annual report 105
Tables and charts Useful links
Fig. 1 Our materiality matrix Integrated annual Healthcare for the main issues — p. 17 report website healthcare.orange. rai2017.orange.com/en/ com/en Fig. 2 Our stakeholders — p. 21 Orange Group Orange Foundation Fig. 3 Our model — p. 39 corporate website fondationorange.com/en orange.com Fig. 4 Essential benefits Digital Society Forum for our stakeholders — p. 40 Orange Business digital-society-forum. Services website orange.com Fig. 5 The Thésaurus-Leontief analysis grid — p. 44 orange-business.com “Doing digital right” Fig. 6 Social value created by Orange measured Registration forum (French only) in terms of the number of jobs it supports — p. 44 Document bienvivreledigital. orange.com/en/ orange.fr Fig. 7 The social value Orange is creating Investors/ through its CSR policy — p. 44 Regulated-information Follow us on Facebook Fig. 8 Our Essentials2020 strategy — p. 49 CSR information facebook.com/Orange orange.com/csr Fig. 9 Our risk matrix — p. 58 Follow us on Twitter Careers with Orange @orange Fig. 10 Composition of the Board of Directors — p. 61 orange.jobs @orangerse
Fig. 11 Active and proactive directors — p. 63
Fig. 12 Executive Committee at 2 May 2018 — p. 65 Contacts
Investors and analysts [email protected]
Individual shareholders [email protected] orange.com/en/Individual-shareholders 106
Integrated 2017 annual report: Orange – 78, rue Olivier-de-Serres – 75015 Paris (France) + 33 (0)1 44 44 22 22 – Corporate Communication and Brand – SA with a capital of €10,640,226,396 – RCS Paris 380 129 866 Credits: Sylvain Cherkaoui, Getty Images, Thomas Gogny, Guillaume Lechat, Orange Brandsite. All rights reserved – Printed on 100% recycled paper.