Annual Report of Activities Sonatel 2014
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annual report of activities Sonatel 2014 annual report foreword This report is a reflection of our vision, full of optimism and looking to the future. The African hairstyle is a living art, constantly evolving. As the continent itself, it is incredibly rich, creative and varied. It feeds, influences and reinvents itself every day to build a perfect bridge between tradition and modernity. Today, African hairstyle has managed to cross borders to meet international recognition. No wonder, that the photographs in this report are derived from a cosmopolitan collaboration. Summary letter from the Chairman p 06 message from the Managing Director p 08 1. good governance, pledge for transparency p 11 2. human Resources: transformation of human capital to meet Sonatel strategic challenges p 23 2.1 competency Development: more professional teams p 23 2.2 health: Welfare at Work :pledge of productivity p 24 3. Sonatel Citizen involvment p 29 3.1 Sonatel, operator engaged in the economic and social development in the countries of its presence p 29 3.2 philanthropy: 13 years of Sonatel Foundation’s commitment for the welfare of Senegalese population p 31 3.2.1 health: actions in six priority areas p 31 3.2.2 education: access and excellence for all p 32 3.2.3 promotion of culture in Senegal p 33 4. our activities p 35 the Senegalese market 4.1 mobile: Orange has captured over 76% of growth market in 2014 p 35 4.2 fixed-lines and Internet: development of usages p 37 4.3 corporate service p 38 4.3.1 better focus on SMIs/ SMEs with the multiplying of the number of Pro spaces p 38 4.3.2 launch of B2B structuring offers p 38 4.4 pursuit of customer service transformation project, a key factor of differentiation and customer loyalty p 39 our subsidiaries abroad 4.5 Orange Mali : Growth despite difficult economic and security conditions p 40 4.6 Orange Guinea : continued leadership and coverage of all sub-prefectures p 42 4.7 Orange Bissau consolidates its leadership through innovation p 42 4.7.1 significant investments to improve the service quality of the mobile voice network p 43 4.7.2 foundation for a strong CSR policy p 43 5. networks and information systems: Orange, leader on technical service quality p 45 5.1 mobile network modernization p 45 5.2 increase of 3G speeds p 45 5.3 4G test successfully managed in Senegal by Sonatel p 45 5.4 Evolution of IP core network, Voice, Mobile, national and international transmission and service platforms p 46 6. Sonatel in the world p 49 7. finance p 53 7.1 key figures p 54 7.2 Sonatel traded share p 61 7.3 financial report p 63 8. annexes - financial statements p 84 - general and special reports such as Auditors’ Reports p 117 5 Sonatel 2014 annual report of activities n 2014, Sonatel Group has once again confirmed its leadership and good operating Iresults in all countries of its presence. The international subsidiaries, Orange Mali, Orange Guinea and Orange Bissau this year contribute for 56 percent to the consolidated net income and 48% to Group sales. Senegal, with a weight of 44 percent remains the main contributor to the group’s net result in 2014 amounted to 218 billion XOF representing growth of 15.1 percent. This year, the Group’s Turnover has maintained in a double-digit growth (10.5 percent) and reached 816 billion XOF. Marc Rennard It should be noted however a stagnation of activity in Senegal where the market matures. Chairman of the Board The intensification of competition, the regulatory and tax burden increasingly strong in the telecommunications sector also explain this situation. 6 annual report of activities Sonatel 2014 Chairman’s letter Despite this, the Sonatel group continues to remain a key player in the creation of wealth in all countries of presence and particularly in Senegal. Sonatel share price greeted this performance, reaching a record level of 24,600 XOF in continuous trading since 2013. Moreover, Sonatel will continue its investment efforts to increase the coverage of population and accelerate the transition of network equipment to the latest technology. The successful testing of 4G in Senegal is a demonstration, pending his next commercial launch. Along with the Managing Directorate, Sonatel Board of Directors extends its congratulations for these good results to all employees of Sonatel Group in the four countries, their commitment and mobilization have allowed these beautiful performances and all encouragement for the future. Sonatel will have the support of the Board to remain a key player in the development of the digital economy in West Africa. 7 Sonatel 2014 annual report of activities long with the good results recorded in the previous year, Sonatel Group was able in 2014 to confirm his leadership and its strong operational and financial performance in all Acountries of its presence through its capacity for innovation, its operational excellence, good sales momentum and the maintaining of a sustained level of investment. The group’s turnover amounted to 816 billion XOF, up by 10.5 percent over 2013. The net profit amounted of 218 billion XOF representing an increase of 15 percent. Compared to the year 2013, the growth in sales turnover (+ 78 billion XOF) is exclusively driven by overseas subsidiaries. Alioune Ndiaye However, Senegal still retains in a dominant Managing Director position with a contribution of 52 percent on turnover against 48 percent of turnover for the other subsidiaries. In addition, Sonatel international subsidiaries account for over two thirds of the group’s clients whose number reaches 26 million in late 2014. 8 annual report of activities Sonatel 2014 Message from the Managing Director The Ebitda margin remained stable (52 percent) of a customer service meeting the highest despite new unfavorable tax and regulatory international standards. measures, illustrating our efforts to control costs. The transformation projects will therefore The growth drivers such as mobile internet continue in the context of a permanent and or Orange money have experienced strong constructive dialogue with all our stakeholders dynamic: Orange Money turnover grew by 5 to adapt the company to the challenges it will billion XOF in Mali and has multiplied by 3.5 in face tomorrow. Senegal. For 2015, the Sonatel group already knows it can In 2014, Sonatel Group remains the main count on the commitment of its employees and contributor to budget revenues of countries the support of its key stakeholders such as the with presence with 374 billion XOF in various Government of Senegal and the Orange group. contributions. Sonatel intends to be the preferred partner of The regulatory and competitive environment the Government of Senegal for the emergence is getting tougher but the Sonatel Group will of the digital economy in the Senegal Emergent strengthen its investments in all countries of Plan (SEP) and the challenge of digital inclusion presence and deploy new innovative services in all countries of presence. so as to support its expansion and maintain its leadership in the telecommunications sector to face the competition. The dynamics of conquest will be supported by the group including strengthening the quality of technical service, extension and modernization of the network and by the establishment 9 Sonatel 2014 annualrapport report annuel of activities 10 annual report of activities Sonatel 2014 GOOD GOVERNANCE PLEDGE FOR TRANSPARENCY Few words on governance >Since May 5, 2014, the date of entry into force of the new OHADA Uniform Act (Organisation for the Harmonization of Business Law in Africa) relating to Commercial Companies and Economic Interest Group (EIG), all corporations have a legal obligation to bring to the attention of their shareholders a certain amount of information including on the governance of their company. These are the items 547-1, 831-2 and 831-3 of the above mentioned Uniform Act that determine the new rules. Sonatel did not wait for the new arrangements to share with its shareholders its governance rules for since 2009, its governance is comprehensively presented in its annual report for its shareholders. Here is the new version taking into account these new aforementioned legal provisions. 1.1 Shareholders’ participation modalities at the General Meeting he right to attend General Meetings is subject to Regardless of the number of shares held, shareholders registration of the shareholder’s name on the share may participate in or be represented at the Extraordinary Tregister, five days before the meeting. General Meetings. The accounting entry of the shares on behalf of the Any shareholder may be represented by their spouse shareholder or the interim on his behalf, on the third or by an agent of his choice, shareholder or not a business day preceding the Meeting at midnight, local shareholder himself. time, in the share bearer records kept by the Stock Exchange Securities (BRVM) also justifies the right to Every shareholder has as many voting rights as shares participate in General Meetings. he owns and represents. Any shareholder (or group of shareholders) representing The representative of a shareholder has the voting rights at least one hundred (100) shares may attend or be of its mandate under the same conditions and the same represented at Annual General Meetings. limit. 11 Sonatel 2014 annual report of activities 1.2 Update on the status of the employee participation in the capital as of 31 December 2014 onatel gives a special importance to the On 31 December 2014, the Sonatel Group has 2,700 shareholder of its staff and it is for this purpose employees, including 1,751 in Senegal. Sthat since its IPO in 1998, all staff is a shareholder.