2024-04-17-ORAN - PA-PriceTarget Research-ORANGE Investment Status Report-107661749

Table of Contents
107661749 ORANGE Investment Status Report 2 - 11

4/17/2024 PriceTarget Research
John Lafferty
107647569 French Telcos Debt addiction: Time for rehab (...part II). Resume Orange at OW. 12 - 70
4/17/2024 Re-it Bouygues OW
JPMorgan
Mr. Akhil Dattani
ORANGE
PARIS, FRANCE
ORANGE (NYSE: ORAN)
PHONE COMM EX RADIOTELEPHONE Communication
April 17, 2024
MARKET VALUE ($BIL) $29.55 YIELD: 6.5% Price:
SHARES OUTS (MIL): 2,655 P/E: 10.1X $11.13
AVG DAILY VOL (000): 297 BETA: 0.21X
OVERALL RATING POSITIVE

____________________________________________________________________________
ORAN is expected to continue to be an important Value Builder reflecting capital __ RATING
returns that are forecasted to be above the cost of capital. ORANGE has
____________________________________________________________________ __
a current Value Trend Rating of B (Positive).
__________________________________________ __ The Value Trend Rating reflects
inconsistent signals from PTR’s two proprietary measures of a stock’s attractiveness. B
ORANGE has a good Appreciation Score of 84 but a neutral Power Rating of 44,
producing the Positive Value Trend Rating. (See PTR RatingMap, and comments
below). Appreciation Power
Score Rating
APPRECIATION SCORE (POTENTIAL PRICE CHANGE TO TARGET) 84 44
ORANGE’s stock is selling well below targeted value.
_________________________________________________ __ The current stock price
of $11.13 compares to targeted value 12 months forward of $31. ORANGE’s high PTR RatingMap,
appreciation potential results in an appreciation score of 84 (only 16% of the universe Power Positive
has greater appreciation potential.) Rating Negative
100
POWER RATING (LIKELIHOOD OF FAVORABLE PERFORMANCE)
ORANGE has a Power Rating of 44.
__________________________________ __ (This neutral Power Rating indicates that
ORANGE’s chances of enjoying favorable investment performance over the near to 50
W B
intermediate term are only average.) Factors contributing to this neutral Power Rating
include: the trend in ORANGE’s earnings estimates has been unfavorable in recent
months; and the Phone Communications Excluding RadioTelephone comparison group 0 Y
0 50 100
is in a slightly weakened position currently. An offsetting factor is recent price action Appreciation Score
has been neutral. Value Trend Rating combines
Appreciation Score and
(The Appreciation Score and Power Rating are percentile rankings relative to a universe Power Rating
of 8,000 companies. 0=lowest score; 100=highest. See last page for details.)
EARN V PRICE
SCALE V TARGETED STOCK PRICE SCALE
$7.00 V $35
$6.00
O LATEST 4 QUARTER E.P.S. V V $30
$5.60 PRICE RELATIVE TO S&P 500 PRICE TARGET $28
$5.20 $26
$4.80
$4.40 $31 $24
$22
$4.00 $20
$3.60 $18
$3.20 $16
$2.80 $14
$2.40 $12
V
$2.00 $10
$1.80 P $9
$1.60 $8
$1.40 $7
$1.20 $6
$1.00 $5.0
$0.90 $4.5
$0.80 P $4.0
$0.70 P V $3.5
$0.60 $3.0
$0.56 $2.8
$0.52 $2.6
$0.48 $2.4
$0.44 P $2.2
$0.40 $2.0
$0.36 $1.8
$0.32 $1.6
$0.28 $1.4
24.7%/7.5M 24.3%/5.6M 46.3%/6.8M –11.5%/11.4M
$0.24 –22.4%/7.0M –28.7%/4.4M $1.2
5X F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M Target
2021 2022 2023 2024 12/24
APPRECIATION SCORE V
75
50
84 75
50
25 25
POWER RATING
75 75
50
25
V
44 50
25
005943240417026941
http://pricetargetresearch.com/ticker/ORAN Copyright % 2024 Price Target Research LLC Price Target Research
ORANGE
Investment Profile
BUSINESS DESCRIPTION
Orange S.A. provides various fixed telephony and mobile telecommunications, data transmission, and other value–
added services to customers, businesses, and other telecommunications operators in France and internationally.
It operates through France; Spain and Other European Countries; The Africa and Middle East; Enterprise;
International Carriers & Shared Services; and Mobile Financial Services segments. The company offers mobile
services, such as voice, SMS, and data; fixed broadband and narrowband services, as well as fixed network business
solutions, including voice and data; and convergence packages. It also sells mobile handsets, mobile terminals,
broadband equipment, connected devices, and accessories.
ORANGE PEER LIST

Deutsche Telekom AG (OTCMKTS: DTEGY) Mitsui & Co Ltd (OTCMKTS: MITSY)
Enel Ente Nazionale Per L’Energi (OTCMKTS: ENLAY) Mullen Group Ltd (TSE: MTL.)
Engie SA (OTCMKTS: ENGIY) ORANGE (NYSE: ORAN)
Exelon Corp (NASDAQ: EXC) Outfront Media Inc (NYSE: OUT)
Kinder Morgan Inc. (NYSE: KMI) Southern Co (The) (NYSE: SO)
Koninklijke Kpn NV (OTCMKTS: KKPNY) Telefonica SA (NYSE: TEF)
Lumen Technologies Inc (NYSE: LUMN) Vodafone Group Public Limited Co (NASDAQ: VOD)
SUITABILITY
ORANGE’s "suitability" for an investor’s specific investment objectives is reflected in twelve investment variables
that together define its investment profile relative to an 6,000 company universe. These variables measure how well
ORANGE aligns with an investor’s income orientation, risk tolerance, and need for marketability/liquidity.
ORANGE’s financial strength is low. Financial strength rating is 26.
_________________________________________________________________________________________________
Relative to the S&P 500 Composite, ORANGE has moderate Value characteristics; its appeal is likely _to _
be to investors heavily oriented toward Income; the perception is that ORAN is normal risk.
______________________________________________________________________________________ __ Relative
weaknesses include: low forecasted profitability, low historical profitability, low financial strength, low historical
growth, and high earnings variability. ORANGE’s valuation is low: high dividend yield, low P/E ratio, and low
price/book ratio. ORAN has normal market capitalization.
ORAN Rank Relative to Universe (100=Highest)

ORAN 0 10 20 30 40 50 60 70 80 90 100
Value
Valuation
Yield 6.5%
PE Ratio 9.7X
Price/Asset Ratio 0.93X
Growth
Hist Growth –1.4%
Forecast Growth 16.0%
EPS Variability 68%
Profitability
Hist ROE 7.0%
Forecast ROI 9.6%
Quality
Beta 0.21X
Debt/Capital 53%
Financial Strength 26
Market Value, $Bil $30.64
(Universe Rank is ORANGE’s percentile rank relative to 8,000 company universe)
005943240417026941
Copyright % 2024 Price Target Research LLC
2
ORANGE
Cash Flow Components
CASH FLOW COMPONENTS
_________________________________________________________________________________________________
In 2022, ORANGE experienced a slight decrease in cash of –$1,156 million (–9%). Sources of cash were __
slightly lower than uses.
______________________ __ Cash generated from 2022 EBITDA totaled +$15,283 million. Non–operating uses
consumed –$1,420 million (–9% of EBITDA). Cash taxes consumed –$1,498 million (–10% of EBITDA). Re–
investment in the business amounted to –$6,045 million (–40% of EBITDA). On a net basis, debt investors received
–$2,369 million (–15% of EBITDA) while equity investors pulled out –$5,107 million (–33% of EBITDA).
2022 NON– DEBT EQUITY DECREASE

EBITDA OPERATING CASH TAXES BUSINESS INVESTORS INVESTORS IN CASH
$MIL + CASH, $MIL + $MIL + $MIL + $MIL + $MIL = $MIL
+$15,283 –$1,420 –$1,498 –$6,045 –$2,369 –$5,107 –$1,156
Y Y Y Y Y Y
Debt Preferred
Minority Interest Income Taxes Curr Assets End Cash $11,230
Change Interest Change Dividends
–$503 –$1,352 –$421 Beg Cash $12,387
–$1,396 –$973 $0 $0
Common
Unconsol Sub Earn Deferred Taxes Curr Liabilities
Change Dividends
–$2 –$146 –$727
–$3,118 –$1,989
Other Income (Exp) Net Fixed Assets

+$135 –$8,111
Non–Recur Exp (BT) LT Assets

Cash Source
–$1,050 +$3,856
Cash Use
LT Liabilities
–$641
Cash Flow Distribution traces the impact of operating cash flow _______
(EBITDA)__ and five key components on ORANGE’s cash balance. ________________
Non–Operating Cash__ includes minority interests,
unconsolidated subsidiary earnings, other income and non–recurring income before tax. _________
Cash Taxes
__ are actual cash tax payments. _______
Business
__ includes all investments in net assets.
Debt and Equity Investors
____________________ __ include all cash distributions to lenders, preferred and common stock holders. _____________
Increase In Cash
__ is net change in the cash balance between periods. Cash
Sources in blue; Uses in white.
Group Upper Quartile

Group Median V ORANGE
30% Group Lower Quartile 30%
27% V 27%
V
V
BENCHMARKS 24% V 24%
________________
ORANGE’s Cash,__ 21%
V V
21%
V
%Revenue has exhibited
______________________ __ 18% V 18%
a very small overall

_________________ __ 15% V 15%
V
uptrend over the period.
______________________ __ 12% 12%
This improvement was
9% 9%
accompanied by stability for
the Orange Peer Group. In 6% 6%
most years, ORANGE was 3% 3%
in the top quartile and 0% 0%

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
second quartile. Currently, Upper 21.5% 22.8% 26.1% 19.0% 23.3% 18.1% 21.8% 26.5% 25.1% 19.1%
ORANGE is upper quartile Median

Lower
11.8%
3.8%
17.0%
8.0%
14.0%
6.0%
11.8%
3.3%
10.8%
4.4%
9.2%
6.7%
15.5%
9.0%
13.8%
6.9%
10.0%
5.1%
9.8%
3.0%
at +24%. ORAN 14.7% 17.5% 14.0% 19.0% 20.2% 19.9% 26.2% 26.5% 25.1% 23.8%
Cash as a percent of revenue is the ratio of cash and equivalents to net revenue. On an annual basis, historical and forecasted cash as a percent of revenue for Orange
Peer Group is percentiled. High end of bar represents group upper quartile value. Lower end represents lower quartile value. Middle line represents group median.
ORANGE forecasts are represented by red diamonds.
005943240417026941
3
ORANGE
Growth Rates
HISTORICAL GROWTH AND CONSENSUS FORECAST
There are no significant differences between ORANGE’s longer term growth and growth in recent years.
ORANGE’s historical income statement growth and balance sheet growth have diverged. Revenue growth has
paralleled asset growth; earnings growth has exceeded equity growth.
_____________________
Annual revenue growth
__ has been –0.4% per year. _________________
Total asset growth
__ has been 1.5% per year. ____________
Annual E.P.S.
__
growth
______
__ has been 8.6% per year. _____________
Equity growth
__ has been 0.5% per year.
ORANGE’s
______________________________________________________________________
consensus growth rate forecast (average of Wall Street analysts)
__ is 16.0% -– substantially above
the average of the historical growth measures.
$70 REVENUE PER SHARE $70 $175 TOTAL ASSETS PER SHARE $175
$65
$60
$55
$65
$60
$55
$150 $150 FORECAST VS. HISTORY
$50 $50 $125 $125
$45 $45
$40
$35
$40
$35
$100 $100 DECELERATION
$30 $30 $75 $75 ____________________________
ORANGE’s consensus growth rate__
$25 $25 forecast (average of Wall Street
_________________________ __
O analysts)
_________ is 16.0% -– substantially
$20
O O O O O O O O
$20 $50
O O O O O
$50
O O O O O O above the average of the historical
$15 $15 O O growth measures. ___________
PTR’s growth__
rate forecast of 0.0% is substantially
_____________________________ __
$10 $10 $25 $25 below the consensus and below
__________________________ __
ANNUAL ANNUAL
Z the average of the historical growth
____________________________
________
measures.__
__
GROWTH –0.4% $15 GROWTH 1.5% $15
GROWTH
$5 $5 RATE
*4 qtrs *4 qtrs
13 14 15 16 17 18 19 20 21 22 23* to 6/23 13 14 15 16 17 18 19 20 21 22 23* to 6/23 18%
CONSENSUS O
15%
$2.50
$2.25 EARNINGS PER SHARE $2.50
$2.25
$55
$50 COMMON EQUITY PER SHARE $55
$50
$2.00 O $2.00 $45 $45
$1.75 $1.75 $40 $40
$35 $35 12%
$1.50 $1.50
$30 $30
$1.25 O $1.25
O $25 $25
9% EARNINGS O
$1.00 O $1.00
$20 $20
O O
$0.75 O O $0.75
$15 O $15 6%
O O O O O O O O O
$0.50 $0.50
O
O $10 $10
3%
EQUITY O ASSETS
$0.25 $0.25
0% REVENUE O PTR
ANNUAL $5 ANNUAL $5
O GROWTH 8.6% $4
GROWTH 0.5% $4 –3%
*4 qtrs *4 qtrs
13 14 15 16 17 18 19 20 21 22 23* to 6/23 13 14 15 16 17 18 19 20 21 22 23* to 6/23
Selected historical data property of Standard and Poor’s 05936240417FIN 26941 170
Longer term growth rates in revenue, net income, total assets, and common equity are derived from a least–squares statistical
analysis of ORANGE’s historical performance and are on _________
a per share
__ basis. (Where indicated, a significantly different shorter term
trend is also presented.) Note that the consensus growth rate forecast is the average of available Street forecasts.
REVENUE E.P.S. TOTAL ASSET COMMON EQUITY CONSENSUS

GROWTH GROWTH GROWTH GROWTH GROWTH RATE
BENCHMARKS ORAN ORAN ORAN ORAN ORAN
__________________________
Relative to the Orange Peer __ –0.4% 8.6% 1.5% 0.5% 16.0%
Group, ORANGE’s historical

___________________________ __ 3% 14% 4% 2% 18%
growth measures are generally

____________________________ __ 2% 12% 3%
1%
V 16% V
0%
second quartile.
______________ __ Equity growth 1%
10% 2%
–1%
14%
V
(0.5%) has been above median. Total 0%
V 8%
V
1% –2% 12%
asset growth (1.5%) has been at –1%

6% 0% –3% 10%
median. E.P.S. growth (8.6%) has –2%
4% –1%
–4%
8%
been at median. Revenue growth –3%
–5%
2% –2% 6%
(–0.4%) has been slightly below –4% –6%
median. _____________________
In agreement with this __ –5%
Top Quartile 2.0%
0%
Top Quartile 12.6%
–3%
Top Quartile 2.7%
–7%
Top Quartile 1.4%
4%
Top Quartile 14.0%
pattern, consensus growth forecast
________________________________ __ Median
Low Quartile
0.6%
–4.5%
Median
Low Quartile
8.6%
0.7%
Median
Low Quartile
1.5%
–2.3%
Median
Low Quartile
–1.9%
–5.9%
Median
Low Quartile
5.9%
4.9%
(16.0%) is upper quartile.

_______________________ __ Growth rates for companies in Orange Peer Group are percentiled and compared to ORAN values. High end of bar represents Orange Peer
Group upper quartile value. Lower end represents lower quartile value. Middle line represents group median. ORAN value is represented
by diamond.
05937240417FIN 269410000
005943240417026941
4
ORANGE
Profitability Measures
HISTORICAL PROFITABILITY
__________________________________________________________________________________________________
ORANGE’s return on equity has eroded modestly since 2013. The current level of 5.8% is 1.61X the low __
for the period and is –25.0% from the high.
________________________________________ __ This modest erosion was due to strong negative trend in pretax
operating return and very minor positive trend in non–operating factors.
ASSET TURNOVER, X’s 20% PRETAX MARGIN, % 20% 9% PRETAX ROA, % 9%

The productivity of 1.2X
1.0X
Revenue/Net Assets 1.2X
1.0X
18%
16%
14%
Pretax Income/Revenue 18%
16%
14%
8%
7%
Pretax Income/Net Assets 8%
7%
ORANGE’s assets declined 0.8X 0.8X 12%

10%
V
V
12%
10%
6%
5%
6%
5%
V V
over the full period 0.6X
V
0.6X
8%
V
V V V
V
V
V 8%
4%
V V V
V
V
V
4%
V V
2013–2023: asset turnover 0.4X
V V V
V V V V V 0.4X 6% 6%
3% V 3%
V
has experienced a minor 4% V 4%
2%
V
2%
V
downtrend. 0.2X
Minor overall
0.2X Volatile overall
downtrend, recent
Volatile overall
downtrend, recent
downtrend very sharp recovery 1%
very sharp recovery 1%
Reinforcing this trend, pretax 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23
V
margin has experienced 90%
80%
TAX KEEP RATE, %
After Tax/Pretax Income
90%
80%
10X
9X
8X
LEVERAGE, X’S
Net Assets/Equity
10X
9X
8X
9%
8% V
V
RETURN ON EQUITY, %
After Tax Income/Equity
9%
8%
70% V 70% 7% V 7%
a downtrend although it 60% V V
V
V V
60%
7X
6X
7X
6X
6%
5%
V V
V 6%
5%
50% V 50%
experienced a very sharp 40% 40%
5X
4X
5X
4X
4%
V
4%
recovery after the 2021 low. 30%

V V
30%
3X
V
V V V V V
V
V
V V V
3X
3% 3%
V
20% 20% 2% 2%
2X 2X
Non–operating factors Little to no V
overall Volatile overall
(income taxes and financial change, very sharp
recent improvement
Volatile overall
uptrend 1%
downtrend, recent
very sharp recovery 1%
leverage) had a very small 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23

Selected historical data property of Standard and Poor’s 005931240417FINPTX026941 110
positive influence on return Asset turnover:
_____________ __ the revenue "productivity" of a firm’s assets. _________________
Pretax profit margin:
__ the profitability of each $ of sales. _____
Pretax
__
_______________
return on assets:
__ profitability before differences in tax liability. ______________
Tax "keep" rate:
__ the percentage of pretax income retained
on equity. after taxes. _________________________
Leverage (asset/equity ratio):
__ in asset terms rather than the traditional financing focus. _______________
Return on equity:
__ ratio of
net income to common equity.
BENCHMARKS
ORANGE’s return on equity is lower quartile (5.8%) for the four quarters ended June, 2023.
______________________________________________________________________________________ __
Operating performance OPERATING

PERFORMANCE W
INCOME
TAXES W
RETURN ON
TOTAL W
CAPITAL
STRUCTURE W
RETURN ON
EQUITY
(pretax return on assets) CAPITAL CAPITAL
is below median (3.1%) ASSET PRETAX PRETAX TAX "KEEP" AFTER TAX LEVERAGE: RETURN
X = RETURN X = RETURN X ASSETS/ = ON
reflecting asset turnover that TURNOVER MARGIN
ON ASSETS
RATE
ON ASSETS EQUITY EQUITY
is at median (0.40X) and
ORANGE ORANGE ORANGE ORANGE ORANGE ORANGE ORANGE
below median pretax margin 0.40X 7.6% 3.1% 53.5% 1.6% 3.54X 5.8%
(7.6%). 0.50X 20% 9% 100% 8% 6.40X 20%
18% 95% 6.00X 18%
8% 7%
90% 5.60X
0.45X 16% 5.20X 16%
Tax "keep" rate (income 14%
7%
6%
85%
80%
6%
5%
4.80X 14%
4.40X
V
tax management) is lower 0.40X 12%
10%
5%
75%
70% 4% 4.00X
3.60X V
12%
10%
quartile (53.5%) resulting in 0.35X 8% V
4%
V
65%
60%
3% 3.20X
2.80X
8%
6% 3% 2% 6% V
after tax return on assets that 0.30X 4% 2%
55%
50%
V
1%
V 2.40X
2.00X 4%
is substantially below median. Top Quartile 0.46X Top Quartile 17.2% Top Quartile 8.2% Top Quartile 91.5% Top Quartile 6.7% Top Quartile 5.83X Top Quartile 18.0%
Median 0.40X Median 10.7% Median 4.1% Median 80.6% Median 2.9% Median 3.94X Median 9.0%
Low Quartile 0.32X Low Quartile 6.0% Low Quartile 2.4% Low Quartile 74.1% Low Quartile 1.4% Low Quartile 2.45X Low Quartile 7.2%
Financial leverage (leverage) Individual operations variables for ORANGE Peer Group are percentiled and compared to ORAN values. High end of bar
005931240417FINPTX026941
represents ORANGE Peer Group upper quartile value. Lower end represents lower quartile value. Middle line represents
is below median (3.54X). group median. ORAN value is represented by diamond.
005943240417026941
5
ORANGE
Price History and Investment Returns
PRICE HISTORY
_____________________________________________________________________________________________
Over the full time period, ORANGE’s stock price performance has been significantly below market. __ Between
June, 2013 and April, 2024, ORANGE’s stock price rose +18%; relative to the market, this was a –64% loss.
PRICE PRICE
SCALE SCALE
STOCK PRICE
PRICE RELATIVE TO S&P 500
$30 $30
$28 MAJOR PRICE MOVES $28
$26 $26
$24 $24
$22 $22
$20 $20
K K
$18 $18
$16 $16
$14 k K $14
K
$12 $12
V
$10 k $10
$9 k $9
k
$8 $8
$7 $7
$6 $6
$5.0 $5.0
$4.5 $4.5
$4.0 $4.0
$3.5 $3.5
$3.0 $3.0
$2.8 $2.8
$2.6 $2.6
$2.4 $2.4
$2.2 $2.2
$2.0 $2.0
$1.8 V
$1.8
$1.6 $1.6
$1.4 $1.4
$1.2 $1.2
92.6%/20.3M 27.5%/17.2M 23.3%/8.1M 44.8%/7.0M –14.5%/11.6M
–32.0%/10.0M –21.5%/21.4M –43.0%/29.5M –29.8%/16.2M
5X
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
TOTAL RETURNS
_______________________________________________________________________________________________
Current annual total return performance of 6.7% is below median relative to the S&P 500 Composite. __ In
addition to being below median relative to S&P 500 Composite, current annual total return performance through
February, 2024 of 6.7% is slightly below median relative to ORANGE Peer Group.
Annualized Annualized
Total Total
Return Return
32% 32%
V ORANGE
_________________________
Current 5–year total return __ 28% S&P 500 Upper Quartile
S&P 500 Median
28%
performance of 0.8% __
_____________________ is 24%
S&P 500 Lower Quartile
24%
lower quartile relative _to
______________________ _ 20% 20%
the S&P 500 Composite.
_______________________ __
16% 16%
Through February, 2024, with 12% 12%
lower quartile current 5–year 8% 8%
total return of 0.8% relative to 4% 4%
S&P 500 Composite, 0%

V
V
V
0%
V V
ORANGE’s total return –4% –4%
V
performance is below median –8% –8%
relative to ORANGE Peer 2014–
2019
2015–
2020
2016–
2021
2017–
2022
2018–
2023
5 Years
to 2/2024
Group. 5 Year Periods Ending December 31
Total returns are annualized and include price appreciation and common dividends accumulated during each period.
ORANGE returns represented by diamond; S&P 500 Composite upper quartile by upper end of bar; lower quartile
by lower end; median returns by the line.
005925240417026941
005943240417026941
6
ORANGE
Valuation Benchmarks
Relative
__________________________________________________________________________________________
to S&P 500 Composite, ORAN’s overall valuation is incomplete; no factors are available. __ Ratio
of enterprise value/assets is unavailable. Ratio of enterprise value/earnings before interest and taxes is unavailable.
Price/equity ratio is unavailable. Price/earnings ratio is unavailable. Ratio of enterprise value/revenue is unavailable.
____________________________________________________________________________________________
Relative to ORANGE Peer Group, ORAN’s overall valuation is incomplete; no factors are available. __ Ratio
of enterprise value/assets is unavailable. Ratio of enterprise value/earnings before interest and taxes is unavailable.
Price/equity ratio is unavailable. Price/earnings ratio is unavailable. Ratio of enterprise value/revenue is unavailable.
ENTERPRISE ENTERPRISE PRICE/ ENTERPRISE PRICE/

VALUE/REVENUE VALUE/EBIT EARNINGS VALUE/ASSETS EQUITY
ORAN = NA ORAN = NA ORAN = NA ORAN = NA ORAN = NA
7.00X 30.00X 40.00X 3.25X 8.00X
28.00X 3.00X
36.00X 7.00X
6.00X 26.00X 2.75X
32.00X
24.00X 2.50X 6.00X
5.00X
22.00X 28.00X 2.25X
5.00X
20.00X 2.00X
4.00X 24.00X
18.00X 1.75X
4.00X
16.00X 20.00X 1.50X
3.00X
14.00X 1.25X 3.00X
16.00X
2.00X 12.00X 1.00X
12.00X 2.00X
10.00X 0.75X
1.00X 8.00X 8.00X 0.50X 1.00X

S&P PEER S&P PEER S&P PEER S&P PEER S&P PEER
500 GRP 500 GRP 500 GRP 500 GRP 500 GRP
Individual valuation measures for each group are percentiled and compared to ORANGE values. High end of bar represents group upper
quartile value. Lower end represents lower quartile value. Middle line represents group median. ORANGE value is represented by diamond.
005929240417026941
005943240417026941
7
ORANGE
Value Targets
___________________________________________________________________________________________
ORAN is expected to continue to be an important Value Builder reflecting capital returns that are __
forecasted to be above the cost of capital.
______________________________________ __ ORANGE’s current Price Target of $31 represents a +182% change
from the current price of $11.13. This high appreciation potential results in an appreciation score of 84 (only 16%
of the universe has greater appreciation potential.) With this high Appreciation Score of 84, the neutral Power
Rating of 44 results in an Value Trend Rating of B.
PARIS,
________________________________
ORANGE’s current Price Target __ is EARN
V Price Target/Share
O V PRICE &
EQUITY
V
$31 (–13% from the 2022 Target __
_________________________________ of $1.50 O Earnings per Share
V
V V $31 $30
$1.40 Y Book Value per Share V $28
$36 but +182% from the 04/11/24
_______________________________ __ $1.30
$1.20
$1.10
Price V V
V
O o o
$26
$24
$22
Price V
Relative to S&P V
500
price of $11.13).
_______________ __ This slight fall $1.00
$0.90 V O
O
$20
$18
$0.80 Y O $16
in the Target is the result of a –5% $0.70
Y Y Y
O
Y O
Y Y Y
Y
$14
$0.60 Y Y y y $12
decrease in the equity base and a –8% $0.50
V
$10
decrease in the price/equity multiple. $0.45

$0.40 O O $9
$8
$0.35 $7
One Driver has a positive impact on $0.30 $6
the price/equity multiple, one has a $0.25

$0.22
$5.0
$4.5
O
negative impact, and one has no effect. $0.20
$0.17
$4.0
$3.5
The forecasted increase in return on $0.15

$0.14
$0.13
$3.0
$2.8
$2.6
$0.12 $2.4
equity has a very large positive impact $0.11
$0.10
$2.2
$2.0
on the price/equity multiple. The $0.09
$0.08
O $1.8
$1.6
$0.07 $1.4
forecasted growth has no impact. The $0.06 $1.2
forecasted increase in cost of equity has $0.05 $1.0
a very large negative impact. 20X 12 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 11
FORECAST GROWTH 0%
4% 4%
3% 3% _______________________________________________________________
PTR’s return on equity forecast is 9.5% -– slightly above our recent __
2% O O 2%
1% 1% forecasts.
________
__ Forecasted return on equity exhibited a slight, erratic decline
0% O O O O O O O O O 0% between 2014 and 2022. The current forecast is steady at the 2014 peak
–1% –1%
–2% –2%
of 8%.
–3% –3%
14 15 16 17 18 19 20 21 22 23 24
______________________________________________________________
PTR’s growth forecast is 0.0% -– in line with our recent forecasts.
__
Forecasted growth erratic but little changed between 2020 and 2022. The
O FORECAST ROE 9% COST OF CAPITAL 3.8%
current forecast is below the 2021 peak of 2%.
10% 10%
O O
O O O
8% O O O O O
O
8% _____________________________________________________________
PTR’s cost of equity forecast is 3.8% -– in line with recent levels. __
6% 6%
Forecasted cost of equity enjoyed a dramatic, erratic decline between
4% 4%
2014 and 2022. The current forecast is steady at the 2018 peak of 5.4%.
2% 2%
0% 0%
14 15 16 17 18 19 20 21 22 23 24
VALUATION
Existing Assets Future Investments
$35 $35
At ORANGE’s current price of $11.13, investors are placing a negative $31
value of $–9 on its future investments. This view is not supported by $30 $30
$8
the company’s most recent performance that reflected a growth rate of $25 $25
$23
0.0% per year, and a return on equity of 7.4% versus a cost of equity of $20 $20 $20
2.7%.
$15 $–9 $15
PTR’s 2024 Price Target of $31 is based on these forecasts and reflects $10
$11 $10
an estimated value of existing assets of $23 and a value of future $5 $5

investments of $8.
$0 $0
CURRENT 2024
PRICE TARGET
005943240417026941
8
ORANGE
Rating Methodology
PriceTarget Research’s ___________________
Value Trend Ratings
__ -– quantitative ratings of relative attraction -– for 6,000 stocks are
updated weekly. These Value Trend Ratings combine a stock’s current appreciation potential as reflected in its
_________________
Appreciation Score
__ and current market dynamics as measured by its _____________
Power Rating. __
Our rating methodology recognizes two realities. First, as fundamentally based and meaningful as the Price Target
and resulting Appreciation Score are, the underlying forecasts can be "off the mark" in some cases. Second, as
important as technical measures and the Power Rating can be for a company, they can sometimes carry too far,
"overshooting" warranted value, and resulting in an unusually speculative investment.
By combining deep fundamentals ___and
__ market factors, the Power Rating
Appreciation Score acts as a "governor" on the Power Rating during Appreciation Low High
periods of high investor enthusiasm and the Power Rating can signal Score B A
caution when market attitudes are out of line with forecasts and the
Forecasts
Appreciation Score. High too
Confirm
Attractive
High?
In cases where the Power Rating and Appreciation Score don’t agree
(Cells 2 and 4), the forecasts that support the Price Target and
Appreciation Score need to be reviewed for reasonableness: C D
Forecasts
Confirm
N Cell 2 stocks may well have forecasts that are Low too
Unattractive
too optimistic. Low?
N Forecasts for Cell 4 stocks may be too
pessimistic.
The Value Trend Rating separates stocks selling below warranted value into those with the potential to get "less
cheap" sooner (Cell 1) versus those with little likelihood of a significant price move over the near to intermediate
term (Cell 2). PTR’s proprietary research clearly demonstrates that when a stock’s high Appreciation Score is
corroborated by a high Power Rating (a Cell 1 company), investment results are superior to results from companies
where only the Appreciation Score or Power Rating is high (Cells 2 and 4). Integration of a disciplined stock
valuation framework and consideration of current market dynamics yields important performance benefits.
___________________
Value Trend Rating.
__ PTR’s Value Trend Rating is a letter
grade derived from the combination of the Appreciation Score Anticipated
% of Future
and Power Rating. Stocks rated as A (Highest Rating) and B _____
Rating
__ ____
Univ
__ ___________
Performance
__
(Positive Rating) -– 15% of the universe in each case -– generally
have high Appreciation Scores and high Power Ratings and are P
A (Highest Rating) 15% Strongly Outperform
expected to outperform the general market over the following P
B (Positive) 15% Outperform
P
C (Neutral) 40% Neutral
12–24 months. Those rated F (Lowest Rating) and D (Negative P
D (Negative) 15% Underperform
Rating) (15% each) are expected to under perform the general P
F (Lowest Rating) 15% Strongly Underperform
market and generally have lower Appreciation Scores and Power
Ratings. Stocks rated C (Neutral Rating and 40% of the universe)
are anticipated to perform in line with the general market.
__________________
Appreciation Score.
__ The Appreciation Score represents the degree PRICE
SCALE
to which a stock is attractively priced relative to the universe. Each $180
$170
company’s warranted market value -– or Price Target -– is derived PRICE TARGET
$160
$150
from PTR forecasts of return on equity, long term growth, and $115 $140
$130
cost of capital. The percentage change from the stock’s current V $120
$110
price to the Price Target is calculated and percentiled relative to $100
the universe (0=the lowest appreciation potential; 100=highest). In V $90
$80
the example:
$70
- -
---
V
N Price Target is $115 - ---
---
- --- $60
---
-- -
- - --
-
N Current Price is $63.50 $50
$48
$46
N Appreciation Potential = $115 / $63.50 = +81.1% $44
$42
$40
N Resulting Appreciation Score = 84 (%ile rank when $38
$36
$34
compared to the universe) $32
$30
9
ORANGE
Rating Methodology (Continued)

_____________
Power Rating.
__ The Power Rating measures the "timeliness" of a stock for purchase. Because the Price Target,
appreciation potential, and Appreciation Score are forecasts, other information is used to serve either as confirmation
of the Price Target or to highlight cases in which the forecasts are not credible. (It includes the stock’s price
performance, behavior of other companies in the same industry group, and the trend in earnings’ expectations.
Percentiled relative to a universe of 6,000 companies. 0=the lowest power rating; 100=highest.) In the case below the
weak Price and Industry Scores offset the higher Earnings’ Score resulting in a mediocre Power Rating of 34.
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
75 PRICE SCORE 75
50 50
25 V
32 25
EARNINGS SCORE
75
50
V
72 75
50
25 25
75 INDUSTRY SCORE 75
50 50
25 V 18 25
75 POWER RATING 75
50 50
25
V
34 25
______________
Rating Results.
__ In addition to the regular publication of its stock ratings, PriceTarget Research constantly assesses
how well the Value Trend Ratings perform over prior periods. Performance for each rating category and the
overall universe is measured over longer historical periods as well as for shorter intermediate periods with the
focus on three key aspects of performance. The first is how well the ratings ___________
discriminate
__ between outperforming
and underperforming stocks -– i.e., whether high rated stocks outperform the universe and low rated stocks
underperform. The second consideration is how ____________
well–ordered__ this performance data is. Well–ordered performance
occurs when A–rated stocks outperform B–rated stocks that, in turn, outperform C–rated stocks, and so on. Clearly,
the most desirable outcome is for performance data to be well–ordered over the full period as well as for each
individual year. Finally, __________
persistence
__ of ratings is measured. At each month end over the full historical periods,
each stock’s rating is recorded and the number of subsequent months in which this initial rating was maintained
calculated. From this information, the likelihood that a specific rating (A, B, C, D, or F) is sustained over future
periods is derived.
While past performance is no guarantee of future results, the evidence continues to indicate that PTR’s Overall
Rating discriminates well between stocks that outperformed and stocks that underperformed over historical time
periods. Moreover, this performance was well–ordered and consistently superior from period to period: in most
years, A–rated stocks outperformed Cs and C–rated stocks outperformed Fs. Finally, the Value Trend Rating
provided an exploitable, persistent appraisal of relative attractiveness: the average duration of individual ratings
exceeded 12 months. (For a PDF report on the Investment Performance of PriceTarget Research’s Stock Ratings,
please see: http://pricetargetresearch.com/backtest.jsp .)
DISCLAIMER
This report is a proprietary offering of Price Target Research ("PTR") and is based on proprietary databases, techniques and software developed by
PTR. The report contains publicly available information and copyrighted information obtained from third parties (including S&P Global Market Intelligence),
proprietary information, mathematical computations, and other techniques performed on this information that reflect subjective judgment. The factual
information contained herein is from sources we believe to be reliable; however such information has not been nor will be verified by us, and we make
no representations as to its accuracy, adequacy, completeness, timeliness or availability. The information and opinions in this report are current as of the
date of the report. We do not endeavor to update any changes to the information and opinions in this report. Reproduction of any information, data or
material ("Content") in any form is prohibited except with the prior written permission of the relevant party. Such party, its affiliates and suppliers ("Content
Providers") are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of
such Content. In no event shall Content Providers be liable for any damages, costs, expenses, legal fees, or losses (including lost income or lost profit and
opportunity costs) in connection with any use of the Content.
This report is not an offer to buy or sell any securities. It is for the general information of clients of PTR and other approved parties. It does not take
into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any information or rating in this report,
clients should consider whether it is suitable for their own particular circumstances. The value of securities mentioned in this report and income from them
may go up or down, and investors may realize losses on any investments. Past performance is not a guide to future performance. Future terms are not
guaranteed, and a loss of original capital may occur.
Price Target Research is not a broker dealer, does not make markets in any security, and has no investment banking services. PTR, its employees,
officers directors, or affiliates, may, from time to time, have long or short positions or holdings in the securities or other related investments of companies
mentioned herein. No PTR employee, officer, director, or advisory board member serves in a similar position for any covered company. No one at a
covered company is on the Board of Directors of PTR or any of its affiliates. Neither PTR nor any of its employees owns shares equal to one percent
or more of the company in this report. PTR hereby disclaims any liability for any inaccuracy or omission with respect to any information presented in
this report. PRICE TARGET RESEARCH SPECIFICALLY DISCLAIMS ALL WARRANTIES WITH RESPECT TO THIS REPORT, INCLUDING BUT NOT
LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Price Target Research shall not have any
liability to any party for any consequential, indirect, special, exemplary or punitive damages, arising from use of this report, whether or not PTR knew of the
likelihood of such damages.
10
J P M O R G A N Europe Equity Research
17 April 2024
French Telcos
Debt addiction: Time for rehab (...part II). Resume
Orange at OW. Re-it Bouygues OW
European Telecommunication
Services
Akhil Dattani AC
(44-20) 7134-4725
akhil.dattani@jpmorgan.com
J.P. Morgan Securities plc
In 2019 we published a thematic (here) that argued French balance sheets had become
Ankur Baheti, CFA
unsustainable. At that point industry revenues of €45bn translated into a mere €1bn (91-86) 5796-8820
of cash flow – insufficient to service an eye-watering €53bn debt pile. Whilst ankur.baheti@jpmchase.com
subsequent COVID-19 induced rate cuts provided a temporary lifeline, the more J.P. Morgan India Private Limited
recent rate rebound has brought credit concerns back into focus. Central to the debate
is Altice, where last month’s results imply leverage will rise to 6.8x (2024E), which Specialist Sales contact details:
forced management to unveil debt restructuring plans. Our Altice “deep dive” last Scott Silver - Specialist Sales -
week (here) argued that even if leverage is restructured to 4x, that still leaves little-to- European TMT
(44-20) 7134-0412
no equity cushion, and it remains difficult to envisage a successful operational scott.silver@jpmorgan.com
turnaround. As such we expect ongoing improvements in the broader competitive
environment, offering a favourable backdrop for both Orange (move to OW from NR,
Dec-25 TP €14.2) and Bouygues (reiterate OW, Dec-25 TP €49).
Debt addiction: 15 years of deflation have rebased French revenues 20%. With capex
+150% over the period, FCF is negative. Whilst operators have found ingenious ways
of monetising infrastructure and off-loading capex, there remains no credible path to
managing down a sizeable €53bn debt pile.
Altice in focus: 50% of industry debt sits with Altice. Its FY results last month
provided unexpected headlines: (1) Guidance for a “mid- to high-single-digit” FY24E
EBITDA decline. Absent remedial action, we believe leverage will hit ~7x, (2) Altice
argues it needs to delever to <4x. We assume €5.5bn in asset sales, leaving a €4.6bn
funding “shortfall”, requiring a write-down, (3) Even post restructuring, we find little-
to-no equity cushion. We worry an operational turnaround and organic deleveraging
will remain elusive.
Competition: (1) Whilst BYG, SFR and ORA continue raising core brand prices, “no
frills” have been cut. We believe the disconnect is a response to Iliad’s unwillingness
to mirror rises or concede price leadership, (2) Orange is premium priced, yet its 3x
and 4x subs bases continue to grow. We attribute this to network and customer
satisfaction leadership, (3) Altice is competitively priced, yet bleeds subs (FY23 BB
-158k, mobile -584k). Structural challenges may be at play.
Orange (OW from NR, TP €14.2): (1) French EBITDA to stablise this year, and
grow from FY25E, (2) FY24E organic group EBITDA +2.6% y/y and accelerating,
should support double-digit EPS CAGR, (3) FY25E EFCF yield 12% or 14% incl
50% Spain JV PF for synergies, (4) SoTP based TP offers 36% upside potential.
Bouygues (reiterate OW, TP €49): (1) Telcos 41% of SoTP is growing EBITDA
MSD, (2) Equans 37% of SoTP can double COPA mid-term, (3) Normalised EFCF
yield 12% and leverage just 1.7x, (4) SoTP based TP offers 37% upside potential.
See page 54 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision.
www.jpmorganmarkets.com
Akhil Dattani AC Europe Equity Research
(44-20) 7134-4725 17 April 2024 JPMORGAN
Table Of Contents
Orange: Financial Snapshot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bouygues: Financial Snapshot . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Altice: Financial Snapshot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Introduction: French Telco market . . . . . . . . . . . . . . . . . . . . . . . . . 7
Taking a closer look at Altice France. . . . . . . . . . . . . . . . . . . . . . . 11
French pricing analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mobile-only. No-frills price comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Mobile only. Core brand price comparison . . . . . . . . . . . . . . . . . . . . . . . . 21
Triple-play price comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Quad-play price comparison. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Price vs network quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Mobile network quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Customer satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Subscriber addition and market share . . . . . . . . . . . . . . . . . . . . . 34
Orange: Resume at OW (TP €14.2) . . . . . . . . . . . . . . . . . . . . . . . . . 36
Orange - Q1’24 preview (24th April) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Orange – changes to estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Orange – valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Orange – financial exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Bouygues: Reiterate OW (TP €49). . . . . . . . . . . . . . . . . . . . . . . . . . 42
Bouygues – Q1’24 preview (7th May) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Bouygues – changes in estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Bouygues - valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Bouygues – financial exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2
(44-20) 7134-4725 17 April 2024 JPMORGAN
Equity Ratings and Price Targets

Mkt Cap Rating Price Target
Company Ticker (€ mn) Price (€) Cur Prev Cur End Date Prev End Date
Orange SA ORA FP 27,870.31 10.48 OW NR 14.20 Dec-25 — —
Bouygues EN FP 13,440.33 35.89 OW n/c 49.00 Dec-25 n/c n/c
Source: Company data, Bloomberg Finance L.P., J.P. Morgan estimates. n/c = no change.All prices as of 16 Apr 24.
3
(44-20) 7134-4725 17 April 2024 JPMORGAN
Orange: Financial Snapshot

Table 1: Orange - Income statement Table 2: Orange - Cash flow statement
€ million, Pre IFRS16 € million, Pre IFRS16
2023 2024E 2025E 2026E 2027E 2023 2024E 2025E 2026E 2027E
Revenue 44,122 40,116 40,424 40,766 41,205 Telco EBITDA 13,157 12,105 12,320 12,501 12,695
y/y 1.5% -9.1% 0.8% 0.8% 1.1% Telco capex (6,780) (6,061) (5,986) (5,949) (5,896)
EBITDA 13,034 12,025 12,320 12,501 12,695 WC change 319 10 (50) (20) (20)
y/y 0.5% -7.7% 2.5% 1.5% 1.6% Interest (731) (988) (993) (965) (928)
margin 29.5% 30.0% 30.5% 30.7% 30.8% Tax (1,128) (1,226) (1,363) (1,475) (1,584)
D&A (7,312) (6,022) (5,886) (5,779) (5,709) Other (1,173) (560) (470) (440) (400)
EBIT 4,966 5,529 6,236 6,638 7,021 Organic CF 3,663 3,280 3,458 3,652 3,868
Interest (1,205) (988) (993) (965) (928) Minorities (368) (304) (309) (314) (319)
PBT 3,761 4,540 5,243 5,674 6,093 Spectrum (521) (500) (303) (253) (153)
Tax (871) (1,226) (1,363) (1,475) (1,584) Dividends (1,862) (1,941) (2,021) (2,101) (2,190)
Net profit 2,642 2,997 3,562 3,881 4,191 Other (2,614) 4,221 (179) (179) (100)
Change in ND 1,702 (4,755) (645) (805) (1,106)
EPS (€) 0.99 1.13 1.34 1.46 1.58 Net Debt (ND) 31,950 27,195 26,549 25,744 24,639
DPS (€) 0.72 0.75 0.78 0.81 0.85 ND/ EBITDA 2.4 2.2 2.2 2.1 1.9
Source: Company reports and J.P. Morgan estimates. Source: Company reports and J.P. Morgan estimates.
Table 3: Orange - Revenue breakdown Table 4: Orange - EBITDA breakdown

€ million € million, Pre IFRS16
2023 2024E 2025E 2026E 2027E 2023 2024E 2025E 2026E 2027E
France 17,730 17,664 17,584 17,653 17,775 France 6,364 6,369 6,418 6,479 6,577
Spain 4,698 - - - - Spain 1,246 - - - -
Other EU 6,877 7,336 7,455 7,550 7,632 Other EU 1,791 1,899 1,928 1,964 1,987
A&ME 7,152 7,542 7,782 7,945 8,063 A&ME 2,734 2,886 3,004 3,067 3,112
Enterprise 7,927 7,961 7,986 8,048 8,173 Enterprise 679 613 615 620 630
Totem 686 713 742 772 803 Totem 373 390 406 423 441
Other (948) (1,100) (1,125) (1,201) (1,240) Other (153) (133) (52) (52) (52)
Revenue 44,122 40,116 40,424 40,766 41,205 EBITDA 13,034 12,025 12,320 12,501 12,695
France -1.4% -0.4% -0.5% 0.4% 0.7% France 35.9% 36.1% 36.5% 36.7% 37.0%
Spain 1.1% Spain 26.5%
Other EU 8.9% 6.7% 1.6% 1.3% 1.1% Other EU 26.0% 25.9% 25.9% 26.0% 26.0%
A&ME 3.4% 5.5% 3.2% 2.1% 1.5% A&ME 38.2% 38.3% 38.6% 38.6% 38.6%
Enterprise 0.0% 0.4% 0.3% 0.8% 1.6% Enterprise 8.6% 7.7% 7.7% 7.7% 7.7%
Totem 0.3% 4.0% 4.0% 4.0% 4.0% Totem 54.4% 54.6% 54.7% 54.9% 55.0%
Change Y/Y 1.5% -9.1% 0.8% 0.8% 1.1% Margin 29.5% 30.0% 30.5% 30.7% 30.8%
Table 5: Orange - Guidance vs JPMe

€ million
Metric FY24 Guidance (ex Spain) FY24 JPMe FY25 Guidance (ex Spain) FY25 JPMe 2023A
EBITDAaL, y/y (%) Low-single digit 2.6% Low-single digit 2.5% 0.2%
eCapex, y/y (€bn) disciplined eCapex as per CMD 0.3% disciplined eCapex as per CMD -1.7% -5.9%
Organic cash flow (telecom), €bn greater than or equal to €3.3bn 3.3 €3.5bn 3.5 €3.18bn
Mid-term Net debt/ EBITDAaL (telecom) Around 2x in mid-term 2.1 Around 2x in mid-term 2.0 2.4
Dividend, €/share €0.75 payable 2025 0.75 €0.75 floor payable 2026 0.78 €0.75
Source: Company reports and J.P. Morgan estimates.
4
(44-20) 7134-4725 17 April 2024 JPMORGAN
Bouygues: Financial Snapshot

Table 6: Bouygues – Income statement Table 7: Bouygues – Cash flow statement
€ million, Pre IFRS16 € million, IFRS16
2023 2024E 2025E 2026E 2027E 2023 2024E 2025E 2026E 2027E
Revenue 56,017 57,185 58,367 59,662 61,091 EBITDA 5,191 5,426 5,858 6,232 6,555
y/y 26.4% 2.1% 2.1% 2.2% 2.4% Capex (2,117) (2,469) (2,367) (2,370) (2,384)
EBITDA 4,545 4,762 5,183 5,546 5,857 WC change 1,148 (400) - - -
margin 8.1% 8.3% 8.9% 9.3% 9.6% Interest (373) (441) (445) (463) (496)
D&A (2,496) (2,296) (2,422) (2,279) (2,311) Tax (516) (624) (734) (901) (1,008)
EBIT 2,049 2,466 2,760 3,267 3,547 Other (1,079) (841) (791) (775) (705)
Interest (373) (441) (445) (463) (496) EFCF 2,254 651 1,521 1,722 1,963
PBT 1,689 1,926 2,265 2,783 3,111 Dividends/others (1,065) (712) (712) (1,423) (1,423)
Tax (547) (624) (734) (901) (1,008) Net Debt 9,062 9,123 8,313 8,015 7,475
Net profit 1,040 1,131 1,344 1,666 1,882 ND/ EBITDA 1.7 1.7 1.4 1.3 1.1
Source: J.P. Morgan estimates and company reports. Source: J.P. Morgan estimates and company reports. Note: EFCF is post-spectrum payments
while capex is pre-spectrum payments.
Table 8: Bouygues – Revenue breakdown Table 9: Bouygues – EBIT breakdown

€ million € million, IFRS16
2023 2024E 2025E 2026E 2027E 2023 2024E 2025E 2026E 2027E
Construction 9,755 9,973 10,196 10,349 10,504 Construction 281 290 306 320 336
Immobilier 1,738 1,519 1,641 1,772 1,949 Immobilier 28 21 51 64 80
Colas 16,015 16,359 16,605 16,854 17,107 Colas 534 569 612 654 698
Equans 18,761 19,180 19,756 20,447 21,163 Equans 545 648 767 926 1,064
TF1 2,298 2,358 2,452 2,477 2,501 TF1 283 287 323 326 329
Telecom 7,727 7,927 7,856 7,910 8,023 Telecom 769 815 865 1,139 1,203
Other (277) (132) (140) (148) (157) Other (132) (103) (103) (103) (103)
Revenue 56,017 57,185 58,367 59,662 61,091 EBIT 2,308 2,526 2,820 3,327 3,607
Construction -25.9% 2.2% 2.2% 1.5% 1.5% Construction 2.9% 2.9% 3.0% 3.1% 3.2%
Immobilier -14.5% -12.6% 8.0% 8.0% 10.0% Immobilier 1.6% 1.4% 3.1% 3.6% 4.1%
Colas 3.1% 2.2% 1.5% 1.5% 1.5% Colas 3.3% 3.5% 3.7% 3.9% 4.1%
Equans N/A 2.2% 3.0% 3.5% 3.5% Equans 2.9% 3.4% 3.9% 4.5% 5.0%
TF1 -8.4% 2.6% 4.0% 1.0% 1.0% TF1 12.3% 12.2% 13.2% 13.2% 13.2%
Telecom 2.6% 2.6% -0.9% 0.7% 1.4% Telecom 10.0% 10.3% 11.0% 14.4% 15.0%
Change Y/Y 26.4% 2.1% 2.1% 2.2% 2.4% Margin 4.1% 4.4% 4.8% 5.6% 5.9%
Source: J.P. Morgan estimates and company reports. Source: J.P. Morgan estimates and company reports.
Table 10: Bouygues – JPMe vs Consensus

€ million
24Y 25Y 26Y
JPM Cons. Var. JPM Cons. Var. JPM Cons. Var.
Revenue 57,185 57,016 0.3% 58,367 58,316 0.1% 59,662 59,671 0.0%
EBITDA 4,762 4,901 -2.8% 5,183 5,227 -0.8% 5,546 5,632 -1.5%
margin, % 8.3% 8.6% 8.9% 9.0% 9.3% 9.4%
EBIT 2,526 2,425 4.2% 2,820 2,685 5.1% 3,327 2,939 13.2%
margin, % 4.4% 4.3% 4.8% 4.6% 5.6% 4.9%
Capex 2,469 2,450 0.8% 2,367 2,475 -4.4% 2,370 2,472 -4.1%
% sales 4.3% 4.3% 4.1% 4.2% 4.0% 4.1%
Net debt 6,312 7,024 -10.1% 5,502 6,553 -16.0% 5,204 5,922 -12.1%
Source: J.P. Morgan estimates, Bloomberg (Last 28 days) consensus. * Standard Bloomberg consensus.
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Altice: Financial Snapshot

Table 11: Altice France – Income statement Table 12: Altice France – Cash flow statement
€ million, Pre IFRS16 € million, Pre IFRS16
2023 2024E 2025E 2026E 2027E 2023 2024E 2025E 2026E 2027E
Revenue 11,157 10,852 10,334 10,291 10,295 EBITDA 3,922 3,644 3,469 3,524 3,526
y/y -1.3% -2.7% -4.8% -0.4% 0.0% Capex (2,340) (2,329) (2,168) (2,108) (2,058)
EBITDA 3,922 3,644 3,469 3,524 3,526 WC change (307) (50) (50) (50) (50)
margin 35.2% 33.6% 33.6% 34.2% 34.2% Interest (1,298) (1,445) (1,589) (1,656) (1,655)
D&A (3,296) (3,206) (3,053) (3,041) (3,042) Tax (86) (96) (81) (71) (66)
EBIT 626 437 416 484 484 Spectrum (26) - - (30) (30)
margin 5.6% 4.0% 4.0% 4.7% 4.7% EFCF (135) (275) (418) (390) (332)
Interest (1,474) (1,569) (1,643) (1,710) (1,709) Other (1,026) (240) (88) (88) (88)
Other (460) (460) (460) (460) (460) Change in ND 1,161 516 507 478 420
Tax (129) (125) (119) (119) (119) Net debt (ND) 24,243 24,759 25,266 25,744 26,164
Net profit (1,437) (1,716) (1,805) (1,804) (1,804) ND/EBITDA 6.2 6.8 7.3 7.3 7.4
Source: Company reports and J.P. Morgan estimates. Source: J.P. Morgan estimates, Company data. Notes: EFCF is post spectrum and capex is pre
spectrum related payments.
Table 13: Altice France – Revenue breakdown Table 14: Altice France – EBITDA and Capex breakdown
€ million € million, Pre IFRS16
2023 2024E 2025E 2026E 2027E 2023 2024E 2025E 2026E 2027E
Fixed - residential 2,620 2,577 2,535 2,526 2,480
Mobile - residential 3,766 3,661 3,584 3,609 3,615 Telecom 3,811 3,531 3,354 3,407 3,407
Equipment 709 719 728 740 742 Media 111 113 115 118 119
Business services 3,714 3,541 3,127 3,048 3,087 EBITDA 3,922 3,644 3,469 3,524 3,526
Telecom 10,807 10,498 9,973 9,924 9,924
Media 349 353 360 368 371 Telecom 35.3% 33.6% 33.6% 34.3% 34.3%
Revenue 11,157 10,852 10,334 10,291 10,295 Media 31.8% 32.0% 32.0% 32.0% 32.0%
Margin 35.2% 33.6% 33.6% 34.2% 34.2%
Fixed - residential -2.8% -1.6% -1.6% -0.3% -1.8%
Mobile - residential -1.3% -2.8% -2.1% 0.7% 0.2% Telecom 2,248 2,243 2,118 2,058 2,008
Equipment -3.3% 1.4% 1.2% 1.7% 0.3% Media 42 35 36 37 37
Business services 0.2% -4.7% -11.7% -2.5% 1.3% Capex 2,290 2,279 2,118 2,058 2,008
Change Y/Y -1.3% -2.7% -4.8% -0.4% 0.0% % of sales 20.5% 21.0% 20.5% 20.0% 19.5%
Figure 1: Altice France – Debt maturity schedule

€ million
Bonds Loans and RCF 9.9
6.3
5.7 6.4
5.7 6.3
1.2 1.3
3.5
0.0 0.5 1.3
0.0 0.7
2024 2025 2026 2027 2028 2029
Source: Company reports and J.P. Morgan estimates. USD converted to EUR as of 5 April 2024.
***Altice financials on this page are forecasted considering no asset sale (including Media business) and debt restructuring.
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Introduction: French Telco market

Mirroring an all too familiar industry playbook, the French Telco market has suffered
more than a decade of disruptive competition, regulatory intervention and capex
inflation. To make matters worse, protracted M&A talks have fostered sustained periods
of irrational promotional behaviour with operators jousting to strengthen their respective
negotiating positions.
These factors have, over the last 15 years, contributed to a cumulative 18% drop in
industry service revenues, and a 29% drop in EBITDA. Given a corresponding steep
fibre-led ramp in capex spend, we have seen a severe OpFCF decline from €13bn
(2009) to -€1bn today.
Figure 2: French Telcos – Industry revenues -18% since 2009 Figure 3: French Telcos – OpFCF has fallen from €13bn to -€1bn
€ billion € billion
55 55 54 EBITDA Capex OpFCF
52 19
48 19 18
47 46 46 45 45 17
44 44 43 44 45 16
16 15 16
14 14 14 13 13 13 14 14 15
12
13 10 11 10 10
12 8 9
7 7 7
6 10
7 8 8
5 1
4 4 3
-3 -1
-2
2023E
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2010
2011
2013
2015
2018
2020
2022
2009
2012
2014
2016
2017
2019
2021
Source: Company reports, J.P. Morgan estimates Source: Company reports, J.P. Morgan estimates
In Figure 3 above, we have estimated the industry’s OpFCF generation, using the capex
t-
b
3
1
€
afm
C
p
O
s–
lo
T
ch
ren
F
figures reported by the French regulator ARCEP. As we show below, these capex values
are much higher than those we would derive from simply aggregating the figures
reported by the BIG 4 Telcos. The key reason for this is that the regulatory data
includes: (1) capex spend “hidden” off balance sheet, e.g. that being undertaken by
Altice’s fibre JV Xpfibre, and (2) spend across independent PIN fibre builders. €13bnt-
from
Figure 4: French Telcos – A breakdown of industry capex spend

€ billion
Reported Other + off BS

14.9 14.6 14.1
13.4
12.1
10.0 10.5 5.4 5.9
4.9 5.9
9.0 3.3
7.8 1.9 2.1
7.0 1.1
0.8
0.7
8.3 8.8 8.5 9.5 8.7 8.3
7.0 7.9 8.1
6.4
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: Arcep, Company reports, J.P. Morgan estimates.
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Whilst competitive intensity will likely continue to ebb and flow, this report finds
mounting evidence to suggest the worst is now finally behind us. Contributing factors to
a more construction environment include:
Altice in focus: Last year, Altice France committed to relatively creditor-friendly

deleveraging at ~1x, with this set to be delivered through asset sales. However, last
month, alongside its FY results, management noted a deteriorating operational outlook
that was set to see leverage rise to ~7x (on a pre IFRS 16 basis). The company indicated
a need to rebase leverage to <4x, arguing “all alternatives are currently under
consideration. We do not plan to move forward on transactions that only provide partial
solutions ... and do not accomplish our goals. Existing unrestricted assets and other
sources of value will only be contributed to deleveraging efforts to the extent the return
on such contribution is appropriate,” and argued this necessitates “credit participation”.
Whilst the scale of debt reduction being targeted by Altice France is clearly substantial,
as we will discuss in detail later on in this report, it remains unclear whether this will be
enough. Factors to consider include: (1) Altice France financials are in decline. Given
Iliad’s competitive price points (which we present later in the note), and Altice’s
ongoing market share losses, it is unclear quite when, and at what level, the company’s
earnings will stabilise; (2) the new post-restructuring debt level (~4x net debt to
EBITDA) remains elevated and for us leaves little-to-no equity cushion; and (3) it
remains very difficult to calculate how Altice’s cost of debt might evolve as it emerges
from its targeted restructuring (a meaningful uplift is clearly likely, in our view).
Figure 5: French Telcos – Leverage ratio Figure 6: French Telcos – OpFCF based leverage ratio
Headline net debt to EBITDA (2023; IFRS16) Headline net debt to OpFCF (2023; IFRS16)
13x
7x
6x
5x
4x
3x 3x
2x
Orange Bouygues Altice Iliad Orange Bouygues Altice Iliad
Source: Company reports and J.P. Morgan estimates. Company data for Iliad Source: Company reports and J.P. Morgan estimates. Company data for Iliad
Earning a return: Whilst industry EBITDA is now back to growth, and capex has
peaked, we show that operator financials remain very depressed. Notably once we adjust
for off-balance-sheet capex, infrastructure monetisation and other “inorganic” effects,
we estimate Altice is bleeding cash (FY24e & FY23e: -€1.1bn), Bouygues is “only”
break-even (EFCF, FY24e: +€0.1bn, FY23e: +€0.0bn), and Iliad is modestly positive.
This leaves Orange as the only operator generating any material EFCF from its domestic
operations (FY24e: €1.5bn, FY23e:€1.4bn). We struggle to believe the industry can
continue to operate under such poor returns, especially given its sizeable debt load, and
believe there is a collective incentive to boost profitability. This argument is further
supported by the fact that the French Telco industry’s ROCE is below the current HY
cost of debt. This negative return spread creates a clear need for improving returns.
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Figure 7: French Telcos – Industry OpFCF

OpFCF of French units, € billion (2023; Pre IFRS16)
6.2
Group OpFCF France/Telecom OpFCF France EFCF
3.3
2.4
1.4 1.6 1.6 1.4
0.9
0.5
0.0 n/a
-1.1
Orange Bouygues Altice Iliad
Source: J.P. Morgan estimates. Company data for Iliad
Approaching a market equilibrium: As the charts below show, market shares across
the French Telco market are approaching what one might ordinarily consider a healthy
equilibrium. Notably: (1) Ongoing bolt-on deals have seen the market share of
wholesale operators in France fall to just ~3% across both the broadband and mobile
markets. This leaves the 4 infrastructure operators with a healthy combined 97% share,
(2) In the broadband market, the smallest network-based operator (Bouygues) has a
respectable 15% market share, whilst in mobile, market shares are even more uniform
with Iliad and Bouygues, as the smaller players, each enjoying 20% market shares. We
suspect this leaves an ever diminishing incentive for operators to compete irrationally as
they once did.
Figure 8: France -– Broadband market shares Figure 9: France – Postpaid mobile market shares
% Excluding M2M (%)
ORA BOUY ATC ILD Others ORA BOUY ATC ILD Others
3% 3% 3% 3% 3% 3% 3% 3% 4% 10% 10% 10% 10% 10% 5% 3% 3%
11%
23% 23% 23% 22% 22% 22% 22% 22% 23% 19% 19% 20%
20% 21% 21% 20% 19% 19%
24% 23% 21% 22% 22% 22% 21% 21% 20% 25% 25% 25%
21% 20% 19% 20% 21% 21%
10% 11% 12% 13% 13% 14% 14% 15% 15%
15% 16% 16% 16% 17% 17% 20% 20% 20%
40% 40% 40% 40% 40% 40% 40% 40% 39% 34% 34% 34% 33% 33% 32% 32% 32% 32%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: Company reports and J.P. Morgan estimates. Company data for Iliad Source: Company reports and J.P. Morgan estimates. Iliad using company reported total mobile
subs
French consolidation off the cards for now: Each attempt at in-market consolidation
in France has been accompanied by a marked step up in promotional activity with
operators jousting to raise their negotiating leverage. With operators acknowledging that
M&A is no longer on the cards, at least for now (political, regulatory and balance sheet
challenges), we see little risk of a resurgence in such tactical behaviour any time soon.
Constructive regulatory framework: France now enjoys what we believe is one of the
most rational and constructive regulatory frameworks in Europe. As a case in point,
whilst many European markets continue to face expensive spectrum auctions, in 2018
the French regulator renewed 900MHz, 1.8GHz and 2.1GHz licenses for “free” (in
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exchange for clear rural 4G investment commitments). Furthermore, the French fibre
regulatory regime has effectively prohibited fibre “over-builds” outside of the densely
populated regions. This should support the case for attractive mid-term fibre-based
returns.
In summary, we feel confident arguing that the French Telco market outlook should
continue to steadily improve. We acknowledge that in the mix Iliad says it remains
intent on targeting market share gains, however, with Altice unable to respond, we do
not anticipate any contagion risk, and on the contrary expect a healthy overall market
environment.
Table 15: French Telcos – Guidance
Metric Guidance JPMe FY23

Orange (ex Spain)
EBITDAaL Low-single digit in 2024 and 2025 +2.5% CAGR 1.3%
eCapex Disciplined eCapex as per CMD -0.7% CAGR -6.7%
Organic cash flow (telecom) Greater than or equal to €3.3bn in 2024, €3.5bn in 2025 In-line €3.7bn
Net debt/ EBITDAaL (telecom) Around 2x in mid-term FY25: 2.0x 2.4x
Bouygues
Group sales Slightly up y/y in 2024 2.1% 4.0%
Telecom sales billed To increase y/y in 2024
COPA Slightly up y/y in 2024 6.6%
Telecom EBITDAaL Around €2bn in 2024 €2.1bn €2.0bn
Telecom gross capex €1.5bn excluding frequencies in 2024
Altice France
Revenue Down y/y in 2024 due to slowdown in construction -5.6% -1.3%
EBITDA Mid to high single digit decline y/y in 2024 -10.1% -4.4%
Capex Reduces to €1.9bn in mid-term FY28: €1.9bn €2.3bn
Cash flow Lower capex not sufficient to offset higher interest costs in 2024 +€0.8bn* +€1.0bn*
Leverage Focus on deleveraging FY25: 4.4x 6.1x
Iliad
Revenues Ambition of €10bn in 2024 from France, Poland, and Italy N/A €9.2bn
Subscriber Ambition to reach 5th largest base in Europe
Source: Company reports. Note: COPA = Current operating profit from activities. *capex minus interest.
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Taking a closer look at Altice France

For those less familiar with the French Telco market, we summarise key FY23
financials for the four network operators: (1) Altice France generated €11.2bn in
revenues making it the 2nd largest operator with a 26% market share. Whilst Iliad and
Bouygues are growing top-lines mid- to high-single-digit, and Orange is stable, Altice is
in decline; (2) Altice France EBITDAaL was €3.9bn implying a 35% margin (Orange
35%, Iliad 40%). When comparing the four operators, again, Iliad and Bouygues are
delivering healthy growth, Orange is stable, and Altice France is suffering heavy
declines (we discuss trends in more detail below); and (3) finally, we forecast Altice
France’s OpFCF at €1.6bn implying a 15% margin.
Table 16: French Telcos - Key 2023 financials

€ millions
2023 (LCm) ORA ATC BOUY ILD Total
Revenues 18,730 11,158 7,727 6,040 43,655
% total 43% 26% 18% 14%
EBITDA 6,464 3,922 1,969 2,392 14,747
margin, % 35% 35% 25% 40% 34%
% total 44% 27% 13% 16%
Capex 3,078 2,289 1,428 1,501 8,296
% sales 16% 21% 18% 25% 19%
% total 37% 28% 17% 18%
OpFCF 3,386 1,633 541 891 6,451
% sales 18% 15% 7% 15% 15%
% total 52% 25% 8% 14%
Source: J.P.Morgan estimates. Company data for Iliad
Altice France’s financial trends look to be steadily deteriorating. As we show below,

whilst revenues grew +2.1% y/y in FY22, this weakened to -1.3% in FY23. And for
FY24, management are guiding to “down y/y” owing to a slowdown of construction
activity twinned with retail competition (JPMe -5.6%). The picture is weaker at
EBITDA. Following a modest -0.6% EBITDA decline in FY22, the company suffered -
4.4% in FY23. And for FY24E EBITDA is expected to decline “mid to high single
digit” owing to a lower construction contribution, additional FTTH wholesale costs, and
“no mechanical ability to push inflation … to consumers”. EBITDA guidance is PF for
the Media and UltraEdge sales. Hence our FY24E headline EBITDA decline of 10.1%
is actually -6.8% on a PF basis. These EBITDA declines, twinned with absent cash
generation, have seen leverage rise from 5.6x (FY22) to 6.2x (FY23). And absent
remedial action, we expect it to hit 6.8x in FY24E.
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Figure 10: Altice France – Financial trends are deteriorating Figure 11: Altice France – Without action, leverage should hit ~7x this
Change (y/y) year
Net debt to EBITDA
Revenues EBITDA 6.8

2.1% 6.2
5.6
-0.6%
-1.3%
-4.4%
-5.6%
-10.1%
2022 2023 2024E 2022 2023 2024E
Source: Company data, J.P.Morgan estimates. Source: Company data, J.P.Morgan estimates.
Given the above weak FY24 outlook, alongside its results, management announced a
hard pivot on its capital structure. Altice argued that in light of the current “interest rate
and business environment” it was now necessary to target more meaningful debt
reduction and this would require “creditor participation” in discounted transactions. This
led both Moody’s and S&P to downgrade Altice France to Caa2 from B3 and CCC+
from B- respectively. Our Credit analyst, Andrew Webb, published his take here and
here. Highlights for us include:
New leverage target: Last year, Altice France committed to relatively creditor-friendly
deleveraging at ~1x, with this set to be delivered through asset sales. However, last
month management indicated a need to lower leverage more materially to <4x. On the
results call, management noted, “all alternatives are currently under consideration. We
do not plan to move forward on transactions that only provide partial solutions ... and
do not accomplish our goals. Existing unrestricted assets and other sources of value will
only be contributed to deleveraging efforts to the extent the return on such contribution
is appropriate,” and argued this necessitates “credit participation” through “exchange
offers or tenders or repurchases”. Our credit analyst notes creditors have organised,
presenting a relatively unified front with a senior secured committee reportedly
representing €15bn of claims preparing to sign a co-operation agreement. This creates
material uncertainty on how things play out, and hence we will need to keep a close eye
on developments.
Asset sales: The company has already announced ~€2.5bn in upcoming asset sales.
Namely: (1) a 70% stake sale in UltraEdge (EV €764m); (2) the 100% sale of Altice
Media (EV €1.55bn); and (3) the sale of its 49% stake in La Poste Telecom to Bouygues
for €466m. It is also possible that Altice may sell its 49% equity stake in Xpfibre (press
reports in L’Inform suggest Altice is targeting a €10bn EV ~17x 2FY26E run-rate
EBITDA but we suspect a value closer to €9bn is more likely. Note, the unit had €3bn in
end FY23 net debt).
What does this mean? As we show below, Altice France’s new target leverage ratio of
<4x implies the need to reduce group net debt by >€10bn from €24.3bn today to <
€14bn. We estimate that even if Altice were also to sell its stake in XpFibre, all asset
sales combined would “only” net €5.5bn, implying a ~€4.6bn funding shortfall. Whilst
not a base case, and only illustrative, our credit analyst believes this could theoretically
lead Altice to target a 65% discount capture on the Holdco notes and 10% on the
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secured bonds. Furthermore, an extension of the structure may now be essential given
the maturity schedule and the damage that recent communications have likely done to
the issuer’s already limited market access.
Figure 12: Altice – Scope for €5.5bn in asset sales Figure 13: Altice – Material discount capture likely
€ million € million
Asset EV Ownership Share FY23 net debt 24,315
Altice Media 1,550 100% 1,550
-of which secured 20,124
UltraEdge 764 70% 535
-of which unsecured 4,191
La Poste Telecom 950 49% 466
Unrestricted asset sales 2,550
XpFibre 9,000 50% 3,006 FY24E EBITDA 3,644
Total potential proceeds 5,556 Implied leverage 6.7
Target leverage 4.0
Target debt reduction 9,741
Max asset sale proceeds 5,556

Implied "creditor contribution" 4,184
JPM credit team
-65% Holdco discount 2,724
-10% Secured discount 1,460
Source: Company data, J.P.Morgan estimates. Source: Company data, J.P.Morgan estimates.
Areas of uncertainty: With available cash insufficient to cover the 2025 and 2026 debt
maturities, bond holders are somewhat dependent on management selling assets and
contributing proceeds to the debt restructuring. However, with Altice France having
utilized Restricted Payments capacity to redesignate (or intending to redesignate) these
assets as unrestricted subsidiaries ahead of possible sales, such an outcome is not
necessarily guaranteed.
Moreover, our credit analyst notes that Altice France likely retains access to the RP
Builder Basket (growing at EBITDA -1.4x interest to as much as ~€15bn, per a recent
advisor call reported by Bloomberg) for Restricted Investments (which, unlike
Restricted Payments, is not limited by the ability to incur €1) which may present
opportunity to create structurally senior claims or “drop down” transactions to the
possible narrow benefit of proactive creditors or those willing to provide new money.
He notes that recent US transactions could present a cautionary template, whereby large
debt-holders band together with the company for gain, and the preservation of equity, at
the expense of smaller debt-holders. He points to several recent cases of liability
management in the US, namely: (1) Rackspace (covered by JPM credit analyst Thomas
Egan), (2) Lumen Technologies (also covered by Thomas Egan) and (3) Echostar
(covered by JPM credit analyst Michael Pace).
Against this backdrop, our credit analyst believes where things go from here could be
considerably different than the framework the company has put forth, which raises a lot
of uncertainty.
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Figure 14: Altice France – Debt maturity profile Figure 15: Altice France – Secured and unsecured bond yield evolution
€ billions %
9.9
Bonds Loans and RCF 60 SFR Sr Unsecured SFR Secured
6.3 50
5.7 6.4
40
5.7 6.3
1.2 1.3 30
3.5
0.0 0.5
0.7 1.3
0.0 20
2024 2025 2026 2027 2028 2029
10
0
Jan-24 Feb-24 Mar-24 Apr-24
Source: J.P. Morgan estimates, Company data. USD converted to EUR as of 5 April 2024 Source: Bloomberg Finance L.P.
Sector implications: Whilst the scale of debt reduction being targeted by Altice France
is clearly substantial, it nevertheless remains unclear whether this will be enough.
Factors to consider include: (1) Altice France financials are in decline. Given Iliad’s
competitive price points (which we show in our price comparison later in the note), and
Altice’s ongoing market share losses, it is unclear quite when, and at what level, the
company’s earnings will stabilise; (2) the new post restructuring debt level (~4x net debt
to EBITDA) remains elevated and for us leaves little-to-no equity cushion; and (3) it
remains very difficult to calculate how Altice’s cost of debt might evolve as it emerges
from its targeted restructuring (a meaningful uplift is clearly likely, in our view).
Below we summarise our Altice France forecasts, which are presented prior to factoring
in the targeted asset sales of Altice Media, UltraEdge or La Poste Telecom. We have
also not factored in a likely meaningful step up in future interest costs likely to result
from the recently announced accelerated deleveraging plans. As this shows, on a
standalone basis, and without remedial action, we forecast Altice France’s leverage ratio
hitting 6.8x this year, and 7.3x in 2025E. Furthermore, our forecasts imply no clear
scope for organic deleveraging, and to the contrary suggest leverage may have
continued to trickle up over time. This would have made it extremely difficult to address
its mounting wall of debt maturities.
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Table 17: Altice France – Summary financials (pre asset sales and debt restructuring)
€ millions
2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Consolidated revenues 11,301 11,158 10,852 10,334 10,291 10,295 10,348 10,402 10,456
Change (y/y) 2.1% -1.3% -2.7% -4.8% -0.4% 0.0% 0.5% 0.5% 0.5%
-of which Telecoms 10,950 10,809 10,498 9,973 9,924 9,924 9,973 10,023 10,073
Change (y/y) 2.0% -1.3% -3.2% -5.0% -1.5% 0.0% 0.5% 0.5% 0.5%
-of which Media 351 349 353 360 368 371 375 379 383
Change (y/y) 5.4% -0.6% 1.3% 2.0% 2.0% 1.0% 1.0% 1.0% 1.0%
-of which other 0 0 0 0 0 0 0 0 0
Opex -7,200 -7,236 -7,208 -6,864 -6,767 -6,769 -6,804 -6,840 -6,875
Consolidated EBITDAaL 4,101 3,922 3,644 3,469 3,524 3,526 3,544 3,562 3,581
Change (y/y) -0.6% -4.4% -7.1% -4.8% 1.6% 0.0% 0.5% 0.5% 0.5%
Margin 36.3% 35.1% 33.6% 33.6% 34.2% 34.2% 34.2% 34.2% 34.2%
Margin 36.4% 35.2% 33.6% 33.6% 34.3% 34.3% 34.3% 34.3% 34.3%
-of which Media 103 112 113 115 118 119 120 121 122
Margin 29.3% 32.1% 32.0% 32.0% 32.0% 32.0% 32.0% 32.0% 32.0%
-of which other 8 0 0 0 0 0 0 0 0
Accrued capex excl spectrum 2,364 2,289 2,279 2,118 2,058 2,008 1,966 1,976 1,882
capex to sales 21% 21% 21% 21% 20% 20% 19% 19% 18%
OpFCF 1,737 1,633 1,365 1,351 1,466 1,518 1,578 1,586 1,699
OpFCF margin 15% 15% 13% 13% 14% 15% 15% 15% 16%
Source: Company data, J.P.Morgan estimates.
Table 18: Altice France – Summary FCF and net debt forecasts (pre asset sales and debt restructuring)
€ millions
FCF and Leverage 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
EBITDAaL 4,101 3,922 3,644 3,469 3,524 3,526 3,544 3,562 3,581
Cash Capex excl spectrum -2,370 -2,340 -2,329 -2,168 -2,108 -2,058 -2,016 -2,026 -1,932
Interest -1,043 -1,298 -1,445 -1,589 -1,656 -1,655 -1,804 -2,018 -2,018
Tax -100 -86 -96 -81 -71 -66 -66 -66 -66
Change in WC and Other -345 -307 -50 -50 -50 -50 -50 -50 -50
FCFaL 243 -109 -275 -418 -360 -302 -392 -598 -485
Restructuring -127 -124 -20 0 0 0 0 0 0
Spectrum -144 -26 0 0 -30 -30 -30 -30 -30
Acquisitions and IRU -367 -78 -95 -20 -20 -20 -20 -20 -20
Asset sales 0 0 0 0 0 0
Financing flows and other -157 -824 -125 -68 -68 -68 -68 -68 -68
Change in Net Debt -552 -1,161 -516 -507 -478 -420 -510 -716 -603
Bonds, loans and RCF 23,928 24,094 24,770 24,770 24,770 24,770 24,770 24,770 24,770
Swap and other adjustments -411 595 315 315 313 313 313 313 313
Total debt 23,517 24,689 25,085 25,085 25,083 25,083 25,083 25,083 25,083
Cash and cash equivalents 368 446 326 -181 -661 -1,081 -1,592 -2,308 -2,911
Total Net debt 23,149 24,243 24,759 25,266 25,744 26,164 26,674 27,391 27,994
Net debt/EBITDA 5.6 6.2 6.8 7.3 7.3 7.4 7.5 7.7 7.8
Cost of debt (net) 4.5% 5.5% 5.9% 6.4% 6.5% 6.4% 6.8% 7.5% 7.3%
Below we present our forecasts, this time factoring in: (1) €5.6bn of asset sales
including Xpfibre, UltraEdge, Altice Media, and Le Poste Telecom; (2) a €4.6bn debt
write-down in 2025E; and (3) an amend and extend on the remaining debt, with this
leading the gross cost of debt to rise to 8.5% (the net cost in this scenario would be
closer to 8%). In this scenario, leverage falls to 4.4x end 2025E, but interesting remains
stuck at this level mid-term owing to poor cash generation and limited EBITDA growth.
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We acknowledge there is a high degree of estimation error involved in forecasting a

business that is not listed and where management access as well as disclosure is
arguably more limited. Nevertheless, we feel this analysis nevertheless offers a
helpful point to referencing the ongoing challenges Altice France will likely face
even post its targeted restructuring plans. Notaby, we do not expect Altice France’s
restructuring to enable the company to emerge capable of being a more commercially
aggressive Telco competitor (and expect the company to remain constrained).
Table 19: Altice France – Summary financials (pro forma asset sales and debt restructuring)
€ millions
2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Consolidated revenues 11,301 11,158 10,533 9,940 9,791 9,791 9,840 9,889 9,938
Change (y/y) 2.1% -1.3% -5.6% -5.6% -1.5% 0.0% 0.5% 0.5% 0.5%
Change (y/y) 2.0% -1.3% -3.2% -5.0% -1.5% 0.0% 0.5% 0.5% 0.5%
-of which Media 351 349 70 0 0 0 0 0 0
Change (y/y) 5.4% -0.6% -80.0% -100.0% 0.0% 0.0% 0.0% 0.0% 0.0%
-of which other 0 0 0 0 0 0 0 0 0
Opex -7,200 -7,236 -7,005 -6,610 -6,511 -6,511 -6,543 -6,576 -6,609
Consolidated EBITDAaL 4,101 3,922 3,527 3,330 3,280 3,280 3,296 3,313 3,329
Change (y/y) -0.6% -4.4% -10.1% -5.6% -1.5% 0.0% 0.5% 0.5% 0.5%
Margin 36.3% 35.1% 33.5% 33.5% 33.5% 33.5% 33.5% 33.5% 33.5%
Margin 36.4% 35.2% 33.5% 33.5% 33.5% 33.5% 33.5% 33.5% 33.5%
-of which Media 103 112 22 0 0 0 0 0 0
Margin 29.3% 32.1% 32.0% 32.0% 32.0% 32.0% 32.0% 32.0% 32.0%
-of which other 8 0 0 0 0 0 0 0 0
Accrued capex excl spectrum 2,364 2,289 2,212 2,038 1,958 1,909 1,870 1,879 1,789
capex to sales 21% 21% 21% 21% 20% 20% 19% 19% 18%
OpFCF 1,737 1,633 1,316 1,292 1,322 1,371 1,427 1,434 1,540
OpFCF margin 15% 15% 12% 13% 14% 14% 15% 15% 16%
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Table 20: Altice France – Summary cash flow and net debt forecasts (pro forma asset sales and debt restructuring)
€ millions
FCF and Leverage 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
EBITDAaL 4,101 3,922 3,527 3,330 3,280 3,280 3,296 3,313 3,329
Cash Capex excl spectrum -2,370 -2,340 -2,262 -2,088 -2,008 -1,959 -1,920 -1,929 -1,839
Interest -1,043 -1,298 -1,445 -1,184 -1,184 -1,184 -1,184 -1,184 -1,184
Tax -100 -86 -96 -81 -71 -66 -66 -66 -66
Change in WC and Other -345 -307 -50 -50 -50 -50 -50 -50 -50
FCFaL 243 -109 -325 -72 -33 21 77 84 191
Restructuring -127 -124 -20 0 0 0 0 0 0
Spectrum -144 -26 0 0 -30 -30 -30 -30 -30
Acquisitions and IRU -367 -78 -95 -20 -20 -20 -20 -20 -20
Asset sales 2,551 3,006
Financing flows and other -157 -824 -125 4,581 -68 -68 -68 -68 -68
Change in Net Debt -552 -1,161 1,986 7,494 -151 -97 -41 -34 73
-10,205
Bonds, loans and RCF 23,928 24,094 24,770 14,565 14,565 14,565 14,565 14,565 14,565
Swap and other adjustments -411 595 315 315 313 313 313 313 313
Total debt 23,517 24,689 25,085 14,880 14,878 14,878 14,878 14,878 14,878
Cash and cash equivalents 368 446 2,828 117 -36 -133 -173 -207 -134
Total Net debt 23,149 24,243 22,257 14,763 14,914 15,011 15,051 15,085 15,012
Net debt/EBITDA 5.6 6.2 6.3 4.4 4.5 4.6 4.6 4.6 4.5
Cost of debt (net) 4.5% 5.5% 6.2% 6.4% 8.0% 7.9% 7.9% 7.9% 7.9%
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French pricing analysis

Historically, competitive intensity was heavily skewed towards the no-frills segment.
This reflected the fact that Orange, Bouygues and SFR have chosen to use these sub-
brands to respond to the competitive threat presented by Iliad’s entry into the market.
However, as Iliad’s network quality, retail distribution footprint and customer service
capabilities have all improved, Iliad (which does not run a no-frills brand) started to
compete directly against the other operators’ core retail brands (especially in urban areas
where its network quality is strongest). Below we show that Orange’s no-frills brand
(Sosh) accounts for 20% of its retail customer base, whereas we estimate it accounts for
a higher 35% at both SFR (RED) and Bouygues (B&You).
Figure 16: Orange least exposed to no-frills

No-frills Core
35% 35% n/a

20%
Orange SFR Bouygues Iliad

Source: Company releases, J.P. Morgan estimates. Company data for Iliad. Note: Bouygues figure includes B2B subs.
The key differences between the core and no-frills brands are as follows:
• No frills brands have no commitment period and no discounted (3-month, 6-month

or 12-month) price point
• No frills brands are only sold on-line and they generally don’t include any retail
store or call centre based customer support (web chat or self service only)
• No frills operators don’t offer handset subsidies
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Mobile-only. No-frills price comparison

We compare the prices of no-frills brands of Orange (Sosh), SFR (RED) and Bouygues
(B&You) and also include Iliad’s Free Mobile brand in the comparison. Whilst we
acknowledge this is a very promotional segment, and hence one should not over-
extrapolate price changes (which can be volatile), our data nevertheless shows that
prices over the last 12 months have come down.
• In Jan-23 Sosh was offering a 120GB plan with unlimited voice and SMS for €20/
month. Today Sosh is marketing a similar offer (with a slightly higher 130GB
allowance, and now including free EU calling/SMS) for a substantially lower €12/
month.
• In Jan-23 Red and B&You were both offering a 100GB plan with unlimited voice
and SMS for €16/month. Today both operators have cut the price of these offers to
€10/month.
• In Jan-23 Iliad’s “Serie Free” tariff was offering a 110GB plan with unlimited voice
and SMS for €15/month. But after 12 months customers were automatically
upgraded to a 210GB plan priced at €20/month. Today Iliad’s “Serie Free” tariff
includes a larger 140GB with the price cut to €10/month. After 12 months customers
are migrated to a 250GB plan that is still priced at €20.
Figure 17: Mobile-only “no frills” price comparison
Effective 24m price (€/month)
19.99
16.00 15.99 17.49
14.99
11.99
9.99 9.99
Voice unlt'd unlt'd + EU unlt'd unlt'd unlt'd unlt'd Unlt'd + int'l Unlt'd
SMS unlt'd unlt'd + EU unlt'd unlt'd unlt'd unlt'd Unlt'd Unlt'd
Data 120GB 130GB 100GB 100GB 100GB 100GB 110GB (1Y) / 140GB (1Y) /
Sosh (ORA) Sosh (ORA) Red (SFR) Red (SFR) B&You B&You 210GB (>1Y) 250GB (>1Y)
Jan'23 Mar'24 Jan'23 Mar'24 (BOUY) (BOUY) Free (ILD*) Free (ILD*)
Jan'23 Mar'24 Jan'23 Mar'24
Source: Company reports.
To explore mobile-only no-frills competition in more detail, below we compare

operators offers across different price points:
No frills – low end

Entry level tariffs across the no-frills segment typically include ~20GB/month (albeit
there are material differences operator by operator). Relevant offers are summarized in
the chart below:
• Bouygues and SFR are most competitively priced. They offer 20GB of data, with
unlimited voice/SMS for just €7/month.
• Orange’s entry level no-frills plan includes just 1GB, which we consider too modest
for most consumers. Its next highest plan includes a substantial 40GB of data
(double Bouygues and SFR) and is priced at €10/month. Note Orange also includes
EU calling/SMS within its plans (something not offered by Bouygues or SFR).
• Iliad has an entry level tariff that includes a very modest 50MB of data for €2/
month. There is the option of adding a 5GB booster to this plan for just €3. However
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with the resulting data allowance still very modest when compared to peers, we
exclude this from our comparison. Instead we present Iliad’s main stream “Serie
Free” tariff which offers a far larger data allowance at an effective 24 month average
price point of €15/month.
Figure 18: No-frills mobile-only price comparison – low end
14.99
9.99
6.99 6.99
Voice unlt'd + EU unlt'd unlt'd Unlt'd

SMS unlt'd + EU unlt'd unlt'd Unlt'd
Data 40GB 20GB 20GB 140GB (1Y) / 250GB (>1Y)
Sosh Red B&You Free
ORA SFR BOUY ILD*
Source: Company reports. Note: For Iliad, the 140GB plan is valid only for 1st year, thereafter customers need to move to 250GB plan.
Prices are as of Mar’24.
No frills – high end

We define the high-end segment of the no frills market as tariffs that include ~130GB of
data. Relevant offerings are summarized in the chart below:
• Bouygues and SFR are most competitively priced. They offer 130GB of data, with
unlimited voice/SMS for just €11/month.
• Orange also has a 130GB plan, and this is priced at €12/month (€1 more than
Bouygues and SFR). The company seemingly justifies this small premium through
including EU calling/SMS in its offers (something Bouygues and SFR do not
include).
• As already outlined earlier on in this section of the report, Iliad’s main stream offer
includes 140GB for €10/month. After 12 months customers are migrated to a 250GB
plan priced at €20. This implies a 24 month average price point of €15/month.
Figure 19: No-frills mobile-only price comparison – high end
14.99
11.99 10.99 10.99

Data 130GB 130GB 130GB 140GB (1Y) / 250GB (>1Y)
Sosh Red B&You Free
ORA SFR BOUY ILD*
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Mobile only. Core brand price comparison

In this section, we compare the core brand offerings across Orange (Origami), SFR, and
Bouygues (Sensation). We also include Iliad’s Free which sits in between no-frills and
core brand. As the chart below shows, in contrast to the no-frills segment where we
have seen price cuts, in the core brand segment Orange, SFR and Bouygues have all
reduced their up-front promotional discount period from 12 to 6 months and raised
headline prices. Notably:
• Looking at its 100GB/month plan, Orange has: (i) increased the up-front discounted
price point from €15 to €17/month, (ii) lowered the discount period from 12 to 6
month, (iii) Increased the price post promotion from €30 to €32/month. We note
there are some accompanying tariff enhancements (larger data allowance and
inclusive EU calling), but this still comes with a much higher 24 month effective
price point of ~€28/month (previously €22.5/month).
• Bouygues and SFR have both raised prices by similar amounts and both currently
charge ~€27/month for a 100GB data plan (vs ~€23/month previously).
• For Iliad we continue to use the main stream offer included in our no-frills price
comparison. Note Iliad includes 140GB for €10/month. After 12 months customers
are migrated to a 250GB plan priced at €20. This implies a 24 month average price
point of €15/month (which is actually lower than it was 12 months ago).
Figure 20: Core brand mobile-only price comparison over time
28.24 27.24 23.49 27.24
22.49 22.50
17.49
14.99
Voice unlt'd unlt'd + EU unlt'd unlt'd unlt'd unlt'd Unlt'd + int'l Unlt'd
SMS unlt'd + EU unlt'd + EU unlt'd unlt'd unlt'd unlt'd Unlt'd Unlt'd
Data 80GB 100GB 80GB 100GB 100GB 100GB 110GB (1Y)/ 140GB (1Y)/
Origami Origami SFR SFR Sensation Sensation 210GB (2Y) 250GB (2Y)
(ORA) (ORA) Jan'23 Mar'24 (BOUY) (BOUY) Free (ILD*) Free (ILD*)
Jan'23 Mar'24 Jan'23 Mar'24 Jan'23 Mar'24
Now, we compare the prices of core brands of Orange (Origami), SFR and Bouygues
(Sensation) across two different tariff segments (mid end and high end). The low end
segment is not comparable due to wide variances in data allowances. Notably, Origami’s
low end tariff includes 20GB of data, whereas SFR and Sensation only offer 5GB and
1GB respectively.
Core brand – mid-end

We define the mid end as tariffs that include ~100GB of data:
• While Iliad does not have a tariff offering 100GB/month, we note its “Serie Free”
offers a larger €140GB and yet is cheaper priced than it peers. Iliad offers 140GB for
€10/month. After 12 months customers are migrated to a 250GB plan priced at €20.
This implies a 24 month average price point of €15/month.
• Bouygues and SFR offer 100GB of data at a 24 month effective price of ~€27/
month.
• Orange charges a modestly higher ~€28/month but includes EU calling/SMS.
• We note mid and high end customers generally won’t actually pay this much for a
mobile plan. This is because >50% of such customers will take a mobile plan as part
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of a convergent bundle, which typically offers attractive discounts.

Figure 21: Core brand mobile-only price comparison – mid end
28.24 27.24 27.24
14.99

Data 100GB 100GB 100GB 140GB (1Y) / 250GB (2Y)
Origami SFR Sensation Free
ORA SFR BOUY ILD
Core brand – high end

We define the high end as tariffs that include ~200GB data allowances:
• Free doesn’t offer a 200GB/month tariff. However it does have a larger 250GB/
month offering priced at just €20/month.
• Of the other 3 operators SFR is cheapest. It offers a 200GB plan for an effective
price of ~€35/month.
• Bouygues and Orange are more expensive than SFR, and each charge ~€42/month.
These higher priced plans include varying levels of international calling.
• Whilst Iliad screens very competitively priced, we note the company’s network
quality is still inferior (discussed later on in this report), it still has a weaker retail
footprint (lower number of physical shops), and it does not offer handset subsidies,
all relevant considerations for high end customers.
Figure 22: Core brand mobile-only price comparison – high end
41.99 41.74
34.99
19.99
Voice unlt'd + EU unlt'd unlt'd + fixed 120 countries Unlt'd

Data 200GB 200GB 200GB 250GB
Origami SFR Sensation Free
ORA SFR BOUY ILD
Overall, with prices having been cut across the no-frills segment, but raised across the
core brands, the price “gap” between these two segments has actually meaningfully
increased. As we show below, over a 24-month period, and on an LFL basis, customers
on core brands now typically pay far more than double the price of those on no-frills
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offerings.
Figure 23: Premium pricing on core brand vs no-frills Figure 24: Premium pricing on core brand vs no-frills
First 6 months price(€/month) 24m effective price (€/month)
No frills Core premium No frills Core premium
16.25 17.25 17.25
5.00 6.00 6.00

11.99 14.99
11.99 9.99 9.99 9.99 9.99 9.99
ORA SFR BOUY ILD ORA SFR BOUY ILD

130GB/100GB* 100GB 100GB 140GB (1Y) + 130GB/100GB* 100GB 100GB 140GB (1Y) +
250GB (>1Y) 250GB (>1Y)
Source: Company reports. Note: For ORA, the core premium is calculated with 130GB no frills Source: Company reports. Note: For ORA, the core premium is calculated with 130GB no frills
plan and 100GB core plan. For Iliad, the 140GB plan is valid only for 1st year, thereafter customers plan and 100GB core plan. For Iliad, the 140GB plan is valid only for 1st year, thereafter customers
need to move to 250GB plan. Prices are as of Mar’24. need to move to 250GB plan. Prices are as of Mar’24.
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Triple-play price comparison

Below we compare operators’ triple play bundles. With fibre now accounting for a
substantial (and growing) 67-76% of total broadband subscribers across the 4 network
based operators, we see little value in reviewing DSL pricing:
Figure 25: French Telcos – Fibre as a % of the total broadband base

% of total broadband base
Orange SFR (fibre/cable) Bouygues Free
80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 2Q23 3Q23 4Q23
We note challenges in directly comparing operators’ plans across the triple-play and
quad-play tiers given: (1) Different network technologies given SFR still used cable
(and not fibre) across much of its footprint, (2) Operator STBs can vary quite
substantially, (3) Some operators may bundle in higher-quality TV channels than others.
That all said, below we highlight that, over the last 12 months, convergent pricing
dynamics have been relatively rational. Orange, Bouygues and SFR have all reduced
their up-front promotional discount periods from 12 months to 0-6 months. That said,
Iliad has kept its promotional discount period unchanged at 12 months. To illustrate this
point, below we have compared Jan-23 price points to those prevailing today, across
what we consider to be “mainstream” tiers, namely those that typically include
broadband speeds of 2Gbps:
• Orange has hiked its price points most materially. Changes have included: (1) A
reduction in the discount period from 12 to 6 months, (2) A €4/month (13%)
increase in the promotional period price point, (3) A €2/month (4%) increase in the
headline (ongoing) post-promotional discount price point. Combined these changes
have culminated in a €7.5/month (19%) rise in Orange’s effective 24 month pricing
to a current level of €47.49/month.
• Back in Jan-23, Bouygues screened most expensively priced across this segment. Its
24 month effective price point has nevertheless still risen ~€5/month and now sits at
€47.99/month (very much in-line with Orange’s equivalent offer).
• SFR was always far more competitively priced than either Orange of Bouygues.
However despite this the company has continued to bleed customers. Against this
backdrop, it probably comes as little surprise to see the company has been less
aggressive in terms of the scale of its target price hikes (just €2.5/month).
• Iliad has made no changes to its initial discount period or subsequently post-discount
period price points. Its effective price point of €34.99/month is consequently now
substantially cheaper than that of its peers.
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Figure 26: Fibre triple-play price comparison over time

47.49 47.99
39.99 42.99
34.5 36.99 34.99 34.99
Speed upto 2Gbps upto 2Gbps 2 Gbps 2Gbps 2Gbps 2Gbps upto 5Gbps upto 5Gbps
Channels 150 140 200 200 180 180 220 230
Decoder UHD UHD 4K 4K 4K 4K 4K HDR 4K HDR
Recording 100 hrs 100 hrs 100hrs 100hrs Available 100hrs
Livebox Up Livebox Up Power Power Bbox Ultym Bbox Ultym Pop Pop
(Jan'23) (Mar'24) (Jan'23) (Mar'24) (Jan'23) (Mar'24) (Jan'23) (Mar'24)
Orange SFR Bouygues Iliad
Source: Company reports. Note: UHD and 4K are comparable in terms of video quality. Note: Orange reduced the 24m effective price of
Livebox Up to €46.49 in April by reducing the promo price.
Triple-play fibre – low end

We define the “low end” segment by those bundles that include: (1) broadband speeds
of “just” 500-1000Mbps, (2) free fixed-line calls, (3) 140-230 TV channels, and (4) a
STB. Key highlights from comparing operators tariffs across this segment include:
• Iliad offers the lowest priced 1Gbps plan at €30/month. Over the last 12 months
Iliad has modestly lowered its price point across this segment by €2.5/month (albeit
alongside this it has also reducing the video resolution to 1080p from 4K
previously). Iliad’s bundle here also offers free calls to mobile in additional to fixed
lines.
• SFR’s price point is in line with that of Iliad at €30/month. SFR includes a 4K box
(vs Iliad’s inferior 1080p), however offsetting this it includes a fewer 160 channels
(vs Iliad 230) and does not include mobile calls (which Iliad does).
• Orange and Bouygues are more expensively priced with price points of ~€39/month
(~€9 higher than SFR and Iliad). Orange screens least competitive across this
segment with its broadband speed of 500Mbps lower than the 1Gbps of peers, and it
also bundling in the lowest number of TV channels.
Figure 27: Fibre triple-play price comparison – low end
38.49 38.99
29.99 29.99
Speed upto 500Mbps 1Gbps 1Gbps upto 1Gbps

Channels 140 160 180 230
Decoder UHD 4K 4K 1080p HD
Voice F F F+M F+M
Recording no 100hrs 250GB
Livebox fibre SFR Starter Bbox Must Revolution light
Orange Altice Bouygues Iliad
Source: Company reports. Note: UHD and 4K are comparable in terms of video quality. Prices are as of Mar’24.
Triple-play fibre – mid end

We define the mid end segment by tariffs that include broadband speeds of 2Gbps, (2)
free fixed/mobile calls, (3) 140-230 TV channels, and (4) 100hrs of recording. Key
highlights from our price comparison here include:
• Iliad doesn’t have any plans that offer broadband speeds above its low-end plans
1Gbps, and 5Gbps. As such we have had to include its 5Gbps plan in the price
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comparison for this segment. However with its corresponding tariff priced at just
€35/month this is nevertheless the most tariff across this segment. Note this Iiad
tariff also includes 230 TV channels which is much higher than that of its peers.
• SFR’s 2Gbps plan is priced at just €37/month which is only marginally higher than
the Iliad tariff discussed above.
• Orange and Bouygues are meaningfully more expensive at €47-48/month. Despite
this, their offers include fewer TV channels than either SFR or Iliad.
Figure 28: Fibre triple-play price comparison – mid end
47.49 47.99
36.99 34.99
Speed upto 2Gbps 2Gbps 2Gbps upto 5Gbps

Channels 140 200 180 230
Decoder UHD 4K 4K 4K HDR
Voice F+M F+M F+M F+M
Recording 100 hrs 100hrs 100hrs
Livebox Up fibre SFR Power Bbox Ultym Pop
Orange Altice Bouygues Iliad
Source: Company reports. Notes: UHD and 4K are comparable in terms of video quality. Prices are as of Mar’24. Orange reduced the
24m effective price of Livebox Up to €46.49 in Apr’24 by reducing the promo price.
Triple-play fibre – high end

We define the high end fibre market as tariffs that include: (1) at least 5Gbps broadband
speeds, (2) free fixed/mobile calls, (3) 140-280 TV channels, and (4) a premium STB.
Highlights from comparing tariffs across this segment include:
• Iliad has the most competitively priced 5Gbps plan at €34.99/month. However
looking at 8Gbps speeds, we note Iliad and SFR are identically priced at €44.99/
month.
• Orange is least competitive with its 5Gbps plan priced at €53.5/month. This plan
also offers far fewer TV channels than that of its peers
• Bouygues does not seem to compete at this end of the market.
Figure 29: Fibre triple-play price comparison – high end
53.49 44.99 44.99
34.99
n/a
Speed upto 5Gbps 8Gbps upto 5Gbps Upto 8Gbps
Channels 140 200 230 280
Decoder UHD 4K 4K HDR 4K HDR
Voice F+M F+M F+M F+M
Recording 300 hrs 100hrs 320hrs
Livebox Max fibre SFR Premium Pop Ultra essential
Orange Altice Bouygues Iliad Iliad
Source: Company reports. Notes: UHD and 4K are comparable in terms of video quality. Prices are as of Mar’24. Orange reduced the
24m effective price of Livebox Max to €52.24 in Apr’24 by reducing the promo price.
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Quad-play price comparison

Below we compare fixed-mobile convergent price points. We note Orange discloses a
very high 49% penetration of such convergent plans across its total broadband customer
base (other operators do not report their convergence statistics).
Figure 30: Orange has a high convergence penetration

Convergent subs (% of broadband base)
48% 48% 49%
2021 2022 2023
Over the last 12 months, the convergent segment has enjoyed very rational price
movements. Notably all of Orange, Bouygues and SFR have reduced promotional
periods and hence raised 24 month average effective price points. However, Iliad (as in
the triple play market) has kept its promotional period unchanged at 12 months and its
broader price points unaltered. Key observations at a high level are:
• Orange has hiked prices most materially. Changes have included: (1) A reduction in
the discount period from 12 to 6 months, (2) A €2/month (4%) decrease in the
promotional period price point, (3) An €11/month (16%) increase in the headline
(ongoing) post-promotional discount price point. Combined these changes have
culminated in a €15/month (22%) rise in Orange’s effective 24 month pricing to a
current level of ~€70/month.
• Back in Jan-23, Bouygues screened most expensively priced across this segment. Its
24 month effective price point has nevertheless still risen ~€11/month and now sits
at ~€70/month (very much in-line with Orange’s equivalent offer).
• SFR has increased its corresponding price point by a less material+€7/month to ~
€59/month. SFR price hike is driven by a move to lower the up-front discount period
from 12 months in Jan-23 to 0-6 months today. In the mix, SFR has also increased
the up-front discounted price point, but actually reduced its pot-discount period
headline price points.
• Iliad has maintained its headline prices and hence is by far the cheapest priced
operator.
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Figure 31: Price comparison over time for mainstream quad play plans
70.23 70.23
54.99 59.23 58.98
52.00
44.98 44.98
Speed upto 2Gbps upto 2Gbps 1 Gbps 2Gbps 2Gbps 2Gbps upto 5Gbps upto 5Gbps
Channels 150 140 200 200 180 180 220 230
F+M F+M F+M F+M F+M F+M F+M F+M
Fixed voice 80GB 100GB 80GB 100GB 100 GB 100 GB Unlt'd Unlt'd
Data Open Up 80Go Open Up 100Go Power + 80GB Power + 100GB Bbox Ultym + Sens Bbox Ultym + Sens Pop + €20 Pop + Free5G
ORA (Jan'23) ORA (Mar'24) SFR (Jan'23) SFR (Mar'24) 100Go 100Go ILD (Jan'23) ILD (Mar'24)
BOUY (Jan'23) BOUY (Mar'24)
Source: Company reports. Note: Prices are as of Mar’24. Orange reduced the 24m effective price of Livebox Up Fibre to €69.73 in Apr’24 by reducing the promo price.
Quad-play fibre – low end

We define the low-end quad play-market by tariffs that include broadband speeds of
500-1000Mbps and mobile data allowances of 5-10GB. Each operator’s price points
across this segment are summarized below:
• SFR has the most competitive offering at €41/month (1Gbps broadband speeds, 160
TV channels, a mobile SIM with 5GB data).
• Iliad’s offering is €5/month more expensive. However Iliad for this higher price
point offers a higher number of TV channels, unlimited mobile data and also free
calls to both mobile and fixed-lines.
• Orange screens uncompetitive offering a lower 500Mbps broadband speed for €59/
month. Orange also only include 10GB of mobile data vs Iliad at unlimited.
• Whilst Bouygues at €61/month is most expensively priced, we note its offer includes
much higher broadband speeds than Orange (1Gbps vs 500Mbps) and a much larger
mobile data allowance (100GB vs 10GB).
Figure 32: Fibre quad-play price comparison – low end
58.73 61.23
45.98
41.23
Speed upto 500Mbps 1Gbps 1Gbps upto 1Gbps

Channels 140 160 180 230
Fixed voice F F F+M F+M
Data 10GB 5GB 100 GB Unlt'd
Open 10Go SFR Starter + 5GB Bbox Must + Sens 100Go Revolution light + Free5G
ORA SFR BOUY ILD
Source: Company reports. Note: Prices are as of Mar’24.
Quad-play fibre – mid end

We define the mid-end quad-play market by tariffs that include broadband speeds of 2-
5Gbps and a mobile data allowance of 100GB. The offerings in the mid end fibre
market are summarized in the chart below:
• Iliad is most competitive. For just €45/month it offers 5Gbps broadband speeds, 230
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TV channels and unlimited mobile data.

• SFR is next most competitive at €59/month. It offers 2Gbps broadband speeds, 200
TV channels and 100GB of mobile data.
• By comparison, Bouygues offers 2Gbps broadband speeds, 180 TV channels and
130GB of mobile data for a much higher €66/month.
• Orange is again the most expensive priced operator at €70/month. For this price it
includes 2Gbps broadband speeds, 140 TV channels and 100GB mobile data.
Figure 33: Fibre quad-play price comparison – mid end
70.23 65.98
59.23
44.98
Speed upto 2Gbps 2Gbps 2Gbps upto 5Gbps

Channels 140 200 180 230
Fixed voice F+M F+M F+M F+M
Data 100GB 100GB 130 GB Unlt'd
Open Up 100Go SFR Power + 100GB Bbox Ultym + Package 130GB Pop + Free5G
ORA SFR BOUY ILD
Source: Company reports. Note: Prices are as of Mar’24. Orange reduced the 24m effective price of Open Up 100Go to €69.73 in Apr’24
by reducing the promo price.
Quad-play fibre – high end

We define the high-end fibre market by bundles that include 5-8Gbps broadband speed
and 100GB of mobile data. The offerings in the high end fibre market are summaried
below:
• Iliad is most competitive at €45/month offering 5Gbps broadband speed, 230 TV

channels, and unlimited mobile data. For those looking for a higher 8Gbps
broadband speed, Iliad offers its premium Ultra essential + free 5G plan. This
includes 8Gbps broadband speed, 280 TV channels (including TV by Canal) and
unlimited mobile data for €55/month.
• SFR is priced at a higher €67/month. The company includes 8Gbps broadband
speeds, 200 TV channels and 100GB of mobile data.
• Orange is priced at €76/month despite offering a lower 5Gbps broadband speed, a
fewer 140 TV channels and 100GB of mobile data.
• Bouygues doesn’t compete in this segment as it doesn’t offer broadband speeds of 5-
8Gbps.
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Figure 34: Fibre quad-play price comparison – high end

76.23
67.23
54.98
44.98
n/a
Speed upto 5Gbps 8Gbps upto 5Gbps Upto 8Gbps

Channels 140 200 230 280
Fixed voice F+M F+M F+M F+M
Data 100GB 100GB Unlt'd Unlt'd
Open Max 100Go Premium + 100GB Pop + Free5G Ultra essential + Free5G
ORA SFR BOUY ILD ILD
Source: Company reports. Note: Prices are as of Mar’24. Orange reduced the 24m effective price of Open Max 100Go to €75.48 in Apr’24
by reducing the promo price. Iliad increased the 24m effective price of Elta essential + Free 5G to €57.98 in Apr’24.
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Price vs network quality

Price comparisons are clearly a helpful starting point to help us assess the relative
competitiveness of each Telco operator. However, to derive accurate conclusions from
the above data, one needs to evaluate relative price points alongside other relevant
factors such as operator's network quality and customer service statistics – factors that
we discuss over the following pages of this report.
Mobile network quality

We assess differences in mobile network quality using data compiled by the French
Telco regulator Arcep. Note that the charts below are based on one million
measurements taken between mid-May and mid-August 2023. Arcep has run a detailed
study that captures data from both indoor and outdoor (roads, metros, and trains)
environments. The results point to significant disparities in network quality that depend
on location and operator. Our key takeaways include:
• Data in residential areas: The survey shows that network quality, for low speed
connectivity, is very comparable across operators. That said, there is a noteworthy
difference when looking at mid tier speed connectivity, where Orange (scored at
87%) ranks far better than its peers (all ranked at ~80%). The difference is even
greater for high speed connectivity, where Orange scores 76%, Bouygues and SFR
score 66-67% and Iliad is the weakest coming in at 58%.
Figure 35: Residential data connection (low Figure 36: Residential data connection (mid Figure 37: Residential data connection (high
speed) speed) speed)
Download speed >3 Mbit/s Download speed >8 Mbit/s Download speed >30 Mbit/s
91%
87%
86% 87% 87%
80% 80% 81%

76%
67% 66%
58%
BOUY Free ORA SFR BOUY Free ORA SFR BOUY Free ORA SFR
Source: Arcep Source: Arcep Source: Arcep
• Data in rural, intermediate and dense areas: (1) Low speed data connections:
Orange ranks best across all regions. Whilst the difference is arguably
indistinguishable across dense and intermediate zones, across rural areas Orange’s
network leadership is tangible. The company scores highest at 83%, with this
followed by Free 79% SFR 75%, and Bouygues 71%,
• (2) Medium speed data connection: Once again Orange ranks best. In the dense
areas Bouygues and Orange rank similarly (95-96%) whereas Free screens poorly
(88%). In the intermediate regions Orange ranks 91% vs all of its peers are 83-85%.
Finally in the rural areas Orange’s leadership is even stronger. It ranks at 74% vs
Free/SFR at ~65% and Bouygues at 62%.
• (3) High speed data connections: Here we see the greatest score disparities. In dense
areas Orange and Bouygues both score ~90%. SFR is weaker at 85% whereas Iliad
ranks poorly at 71%. In the intermediate regions Orange has clear leadership with a
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score of 84%. The other operators all score 65-70%. Finally in the rural areas
Orange scores 53% and SFR scores 46%. Iliad and Bouygues are much weaker at
41%.
Figure 38: Quality of data connection (low Figure 39: Quality of data connection (mid Figure 40: Quality of data connection (high
speed) speed) speed)
Download speed >3 Mbit/s Download speed >8 Mbit/s Download speed >30 Mbit/s
96% 97% 95% 96% 91%
94% 93% 94% 92% 90%
90% 91% 90% 91%
88% 85%
84%
83% 83% 85% 85%
79%
75% 74% 71%
71% 70%
67% 65% 67%
65%
62%
53%
46%
41% 41%
Rural areas Intermediate zones Dense areas Rural areas Intermediate zones Dense areas Rural areas Intermediate zones Dense areas
• Voice quality: In terms of quality of voice calls, all the operators performed well
across the dense (92-96%) and intermediate (91-95%) with Orange’s leadership very
narrow. However across rural areas Orange has tangible leadership with a score of
85% (peers all 76-78%).
Figure 41: Quality of voice calls - Rural areas Figure 42: Quality of voice calls - Intermediate Figure 43: Quality of voice calls - Dense areas
Success rate for 2 min call without interference zones Success rate for 2 min call without interference
Success rate for 2 min call without interference
95%
96%
92% 95%
91% 91%
92% 92%
85%
78% 78%
76%
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Customer satisfaction
We base our customer satisfaction analysis on a survey conducted by CSA Institute in
late 2022 and the results published by Arcep in April 2023. The survey was conducted
among a representative sample of 4,009 French individuals. Overall, the user
satisfaction for mobile services (rated 7.8/10 on average in 2022 i.e. +0.1 y/y) as well as
fixed internet services (rated 7.6/10 on average in 2022 i.e. +0.1 y/y) improved slightly
year on year primarily due to improved rating of Orange. In mobile services, Orange
improved its rating by +0.1pt y/y as those who rate it 9-10 (top tier) increased by +5%
y/y. Similarly, in fixed internet services, it improved its rating by +0.1pt y/y as those
who rate it 9-10 (top tier) increased by +4% y/y.
The other main takeaways from the survey results are as follows:
• Mobile services – Orange and Free stood as the highest rated operators with average
rating of 8.1/10 for general customer satisfaction as more than 40% of the survey
respondents rated them in 9-10 category. Bouygues stood second with 7.7/10 rating.
SFR stood as the lowest rated operator with 7.3/10 rating as significantly large
number of respondents (~17%) rated it in lowest bucket of 0-5 category.
• Fixed internet services – The trends remain largely the same in fixed internet
access with Orange leading the pack, Free placed second, while Bouygues and SFR
held third and fourth position in general customer satisfaction. For SFR, 17% of the
respondents rated it between 0-5, while less than 7% of the respondents rated
Orange and Free in this category.
Figure 44: Customer satisfaction with mobile operator Figure 45: Customer satisfaction with fixed internet service
Generally speaking, on a scale of 0-10, how satisfied are you with your mobile Generally speaking, on a scale of 0-10, how satisfied are you with your internet
operator? service provider?
0-5 points 6-8 points 9-10 points 0-5 points 6-8 points 9-10 points
8.1 7.7 7.3 8.1 7.9 7.4 7.0 7.8
33% 24% 33% 24%

44% 41% 44% 41%
59% 59%
57% 57%
50% 52% 50% 52%
6% 10% 17% 7% 6% 10% 17% 7%

Orange Bouygues SFR Free Orange Bouygues SFR Free
Source: Arcep. Source: Arcep.
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Subscriber addition and market share

Mobile postpaid (ex M2M) market
Looking at KPI trends for last two years, it is evident that Altice has begun to suffer
accelerating losses, with Iliad, Bouygues and Orange benefiting from this churn to
varying degrees. Key takeaways in terms of mobile postpaid (ex M2M) trends are:
• Subscriber addition: In 2022 all 4 of the French Telcos grew their customer bases,
albeit Orange enjoyed the greatest gains. However going into 2023 we have seen
customer losses at Altice begin to scale (the Q4 loss of >200k was particularly
concerning). Iliad has been the key beneficiary delivering record net adds, albeit
Orange and Bougyues have also both successfully expanded their customer bases
too.
• Market share: Orange has the highest postpay mobile market share at ~32%. Its
market share has been very stable over the last 4 years, Altice ranks second placed
with a ~25% market share. We note this scale has been bolstered by acquisitions
including Prixtel (2021), Afone (2021), Coriolis (2022) and Syma Mobile (2022).
Similarly, Bouygues historically “only” had a 17% market share. However this rose
3pp in 2021 supported the acquisition of EI Telecom. Bolt on MVNO acquisitions
from Altice and Bouygues have lowered the market share of the “Other” operators
from 7% to 3%. And this will fall further should succeed in acquiring MVNO La
Poste Telecom which has 2300k subscriber, i.e. a ~2% market share of the total
mobile market. Finally Iliad’s market share declined modestly from 2017 (21%) to
2019 (19%), but in 2023 bounced back to 20%.
Figure 46: Organic postpaid (ex M2M) net adds Figure 47: Postpaid (ex M2M) market shares
(000s) %
300 6% 7% 7% 7% 8% 5% 3% 3%
200 21% 20% 19% 19% 19% 20%
21% 19%
100 25% 25% 25%
23% 23% 23% 24% 24%
0
16% 16% 16% 17% 17% 20% 20% 20%
-100
-200 34% 34% 33% 33% 32% 32% 32% 32%

-300
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 2016 2017 2018 2019 2020 2021 2022 2023
Source: Company reports Source: Company reports and J.P. Morgan estimates. Iliad based on company reported total
mobile subscriptions.
Broadband market
Key highlights from the last 2 years are summarised below:
• Subscriber addition: Iliad and Bouygues have led the market in terms of subscriber
additions. On average, ILD added +61k subs/quarter while BOUY added +58k/
quarter. These gains have come at the expense of Altice which has lost subs across 7
of the last 8 quarters, with average losses running at -30k/quarter. Orange has also
witnessed losses of -32k subs/quarter over recent periods. However we note this
reflects material declines across its broadband-only customer base (-39k subs/
quarter on average in 2023) with this mitigated by continued modest adds across its
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convergent base at +10k subs/quarter.

• Market share: Orange is the market leader with a ~39% market share. While its
market share was very stable from 2016-22, it actually lost 1pp market share in
2023. Iliad, which stands second placed with a 23% market share that has been
relatively stable over time (albeit has increased modestly in 2023). Altice on the
other hand has lost 2pp of market share over the last 4 years (22% to 20%) and
Bouygues has delivered ongoing steady market share gains from 11% in 2016 to
15% today.
Figure 48: French telcos organic net adds – Broadband Figure 49: French telcos market share – Broadband subs
Figures in thousands
150
3% 3% 3% 3% 3% 3% 3% 3%
100 23% 23% 22% 22% 22% 22% 22% 23%
50 23% 21% 22% 22% 22% 21% 21% 20%
0 11% 12% 13% 13% 14% 14% 15% 15%
-50 40% 40% 40% 40% 40% 40% 40% 39%

-100
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 2016 2017 2018 2019 2020 2021 2022 2023
Source: Company reports Source: Company reports and J.P. Morgan estimates. Company data for Iliad
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Orange: Resume at OW (TP €14.2)

After a long period of restriction, we are reinstating a rating for Orange at OW (vs N
prior to the restriction). Key drivers of our constructive view include: (1) France: We
expect Orange’s ongoing network and customer service leadership, trending market
repair, and a fading wholesale drag, to collectively support a long awaited inflection
back to revenue and EBITDA growth, (2) Enterprise: FY23 EBITDA -17% y/y marks a
trough. We expect FY24E -8%, and FY25E back to growth, (3) Overall: Inflecting
French and Enterprise trends, twinned with strong ongoing growth elsewhere, should
underpin a low double digit EPS CAGR over the next 3 years, (4) Valuation: We
consider Orange our preferred Telco “value” play. In FY25E Orange trades on 5x EV/
EBITDA, 6.5x PE, and a 12% EFCF yield (which would be an even more impressive
14% adjusting for 50% of post-synergy ORA-MAS JV EFCF).
• Q1 preview: Organically, we model revenues €9,740m +0.9% y/y and EBITDA

€2,400m +2.1% y/y. We forecast all units growing except for: (1) France (which we
model stable, though it is not inconceivable France could dip into very modest
positive territory) and (2) Enterprise where revenues should grow, but EBITDA will
decline for one further year (as previously guided).
• Spanish JV: With the merger between Orange and Masmovil now approved, we
update our model to: (1) treat the asset as held for sale in Q1; (2) deconsolidate the
unit going forward; (3) build a ORA-MAS merger model and incorporate this into
forecasts as an off-balance sheet JV; and (4) factor in the €4.4bn in cash proceeds
Orange received in Q1 as part of the agreed JV recap.
• FY24 outlook: With our model now rebased for the Spanish sale, we summarise
how our estimates compare to guidance on a post Spain sale basis. Orange guided
for “low single digit” EBITDAaL growth y/y (JPMe +2.6%), “disciplined eCapex”
(we model capex/sales 15.2% and CB capex +0.3% y/y) and organic cash flow
(telecoms) “greater or equal to €3.3bn” (JPMe €3.3bn).
• Estimates: Clean of the deconsolidation of Spain, our revenues fall 1% pa (EM FX),
EBITDA falls 0.5% pa (also EM FX), and capex falls 0.5% pa (also EM FX).
Guidance basis EFCF falls 13-14% pa (Spanish sale). But “all-in” EFCF (which
amongst other things is post minority and associates, and hence includes mid-term
ORA-MAS JV dividends) actually rises 3% pa.
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Orange - Q1’24 preview (24th April)
• Summary: We model revenues €9,740m +0.9% y/y and EBITDA €2,400m +2.1%
y/y. We forecast all units growing except for: (1) France (which we model stable,
though it is not inconceivable France could dip into very modest positive territory)
and (2) Enterprise where revenues should grow, but EBITDA will decline for one
further year (as previously guided).
• France: We expect commercial trends to remain similar to those of Q4. We model
Q1 revenues -0.1% y/y and FY24 -0.3%. At EBITDA, we model H1 -0.1%
following FY23 -3.5%.
• Enterprise: We model Q1 Enterprise revenues +0.5% but H1 EBITDA -11.9%
(FY24E -7.9%).
• A&ME: This remains Orange’s key growth driver. We model Q1 revenues +9.3%
and FY24E growth +10.6%. At EBITDA we model H1 +9.7% and FY24E +11.3%.
Table 21: Orange - Quarterly summary
€ million
1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24E
France 4,386 4,440 4,465 4,691 4,307 4,384 4,439 4,600 4,300
Europe 2,648 2,676 2,763 2,872 2,739 2,808 2,923 3,106 1,773
Spain 1,132 1,133 1,178 1,204 1,164 1,157 1,179 1,198 0
Poland 635 657 658 715 667 708 692 788 736
BeLux 339 338 351 362 349 392 489 520 485
CEE 546 553 584 596 563 554 570 605 559
Eliminations (4) (5) (8) (5) (4) (3) (7) (5) (7)
Africa & ME 1,668 1,713 1,782 1,756 1,699 1,773 1,816 1,865 1,819
Enterprise 1,945 1,943 1,906 2,136 1,951 1,994 1,901 2,081 1,955
Totem 161 167 168 188 174 168 170 174 181
IC&SS 382 390 378 390 354 410 351 364 343
Other/Elims (608) (614) (639) (682) (605) (611) (601) (612) (631)
Revenues 10,582 10,715 10,823 11,351 10,619 10,926 10,999 11,578 9,740
Organic growth 0.7% -0.4% 1.0% 1.3% 1.3% 2.6% 1.8% 1.6% 0.9%
EBITDAaL 2,620 3,314 3,582 3,448 2,590 3,305 3,596 3,544 2,400
margin, % 24.8% 30.9% 33.1% 30.4% 24.4% 30.2% 32.7% 30.6% 24.6%
Organic growth 1.0% 0.5% 0.2% 8.5% 0.5% 1.0% 1.4% 2.0% 2.1%
eCapex 1,610 1,803 1,731 2,227 1,493 1,661 1,597 2,065 1,600
% of sales 15.2% 16.8% 16.0% 19.6% 14.1% 15.2% 14.5% 17.8% 16.4%
Source: J.P. Morgan estimates, Company data.
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Orange – changes to estimates

Below, we compare our currently published estimates to those published before Q4’23
results.
• Revenues: Clean of the deconsolidation of Spain, our revenues fall 1% pa (EM FX)
• EBITDA: Falls 0.5% pa (also EM FX)
• Capex: Falls 0.5% pa (also EM FX)
• Guidance basis EFCF: Falls 13% pa (Spanish sale)
• “All-in” EFCF: (which amongst other things is post minority and associates, and
hence includes forecasted mid-term ORA-MAS JV dividends) actually rises 3% pa
• Net debt: Falls 15% near term, but only 4% pa long term (as we have raised our
mid-term Orange dividend assumptions)
Table 22: Orange – Changes to estimates
€ million
Old New Var. (%)
2024E 2025E 2026E 2030E 2024E 2025E 2026E 2030E 2024E 2025E 2026E 2030E
Total revenues 45,080 45,349 45,644 47,251 40,116 40,424 40,766 42,470 -11.0% -10.9% -10.7% -10.1%
Total revenues (LFL ex Spain) 40,384 40,626 40,892 42,380 40,116 40,424 40,766 42,470 -0.7% -0.5% -0.3% 0.2%
EBITDAaL - telecom only 13,362 13,711 13,880 14,441 12,025 12,320 12,501 13,092 -10.0% -10.1% -9.9% -9.3%
EBITDAaL (LFL ex Spain) 12,084 12,412 12,573 13,102 12,025 12,320 12,501 13,092 -0.5% -0.7% -0.6% -0.1%
Total Capex 6,884 6,787 6,693 6,612 6,091 5,986 5,949 5,913 -11.5% -11.8% -11.1% -10.6%
Capex (LFL ex Spain) 6,094 6,016 5,965 5,881 6,091 5,986 5,949 5,913 0.0% -0.5% -0.3% 0.5%
EBITDAaL - eCAPEX - Telecom only 6,478 6,924 7,187 7,830 5,934 6,334 6,552 7,179 -8.4% -8.5% -8.8% -8.3%
EBITDAaL - eCAPEX (LFL ex Spain) 5,990 6,396 6,608 7,221 5,934 6,334 6,552 7,179 -0.9% -1.0% -0.9% -0.6%
Spectrum and licences paid (320) (153) (153) (153) (500) (303) (253) (203) 56.3% 97.8% 65.2% 32.6%
Net interest paid (1,048) (1,067) (1,078) (946) (988) (993) (965) (730) -5.7% -6.9% -10.5% -22.8%
Income tax paid (1,340) (1,498) (1,570) (1,762) (1,226) (1,363) (1,475) (1,767) -8.5% -9.0% -6.0% 0.3%
Working capital (35) (15) 0 0 10 (50) (20) 0 -128.6% 233.3% na na
Minority shareholders remuneration (294) (299) (304) (324) (304) (309) (314) (334) 3.5% 3.5% 3.4% 3.2%
Other operational items (500) (330) (300) (200) (530) (450) (440) (300) 6.0% 36.4% 46.7% 50.0%
Other financial items (50) (50) (50) (50) (50) (50) (50) (50) 0.0% 0.0% 0.0% 0.0%
FCF pre spectrum 3,261 3,665 3,886 4,548 2,875 3,049 3,238 4,648 -11.8% -16.8% -16.7% 2.2%
Dividends to Orange shareholders (1,942) (1,995) (1,995) (1,995) (1,941) (2,021) (2,101) (2,260) 0.0% 1.3% 5.3% 13.3%
Net of acquisitions and disposals 0 0 0 0 4,400 0 0 0 na na na na
Subordinated bond issuances (300) (1,330) (1,400) (2,200) (300) (1,330) (1,400) (2,200) 0.0% 0.0% 0.0% 0.0%
Net financial debt 26,298 24,860 23,201 14,209 22,245 21,599 20,794 13,909 -15.4% -13.1% -10.4% -2.1%
Net debt/EBITDA 2.0 x 1.8 x 1.7 x 1.0 x 1.8 x 1.8 x 1.7 x 1.1 x -5.8% -3.3% -0.5% 8.0%
Source: J.P. Morgan estimates.
38
(44-20) 7134-4725 17 April 2024 JPMORGAN
Orange – valuation
Our Dec-25 target price of €14.2/share implies a 36% upside to current share price.
Table 23: Orange – SoTP valuation

€ million
ORA stake Value per 2024EV/

ORA stake Ent. value value % Ent. value share (€) EBITDA Valuation methodology
France 100% 40,184 40,184 55.1% 15.1 6.3 DCF, WACC 7%, terminal growth 0.5%
Poland 51% 4,024 2,040 2.8% 0.8 5.4 Market value

Belgium & Luxembourg 77% 2,844 2,188 3.0% 0.8 5.7 Market value
Central European countries 98% 3,731 3,656 5.0% 1.4 5.8 DCF, WACC 8.5%, terminal growth 1%
Europe 10,599 7,885 10.8% 3.0 5.6
A&ME 60% 14,343 8,606 11.8% 3.2 5.0 DCF, WACC 12%, terminal growth 2%
Enterprise 100% 3,273 3,273 4.5% 1.2 5.3 DCF, WACC 8.0%, terminal growth 0%
Totem 100% 6,881 6,881 9.4% 2.6 17.7 DCF, WACC 6.5%, terminal growth 2%
ICSS 100% (3,146) (3,146) -4.3% (1.2) DCF, WACC 7.0%, terminal growth 0.5%
Non-consolidated investments
Spain 50.0% 9,213 12.6% 3.5 7.8
Enterprise value 72,896 100.0% 27.4 6.1
Dec-25 net debt adjusted for hybrids (26,549) (10.0)

Proportionate net debt adjustments (3,495) (1.3)
Perpetual convertibles (350) (0.1)
Retirement obligations (2,978) (1.1)
Spectrum beyond 2024 (1,279) (0.5)
Tax assets 503 0.2
Others (925) (0.3)
Equity Value 37,823 14.2
Outstanding shares - dilluted 2,659

Fair Value (€) 14.2
Share price (€) 10.5

Upside/(downside) 36%
Source: Company reports and J.P. Morgan estimates. Share price from Bloomberg Finance L.P. at cob 16 April.
39
(44-20) 7134-4725 17 April 2024 JPMORGAN
Orange – financial exhibits
Table 24: Orange – P&L Summary

€ million
2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Revenues
France 18,461 18,092 17,983 17,730 17,664 17,584 17,653 17,775 17,899 18,032 18,173
Spain 4,951 4,720 4,647 4,698 0 0 0 0 0 0 0
Poland 2,590 2,613 2,666 2,855 3,056 3,090 3,121 3,158 3,194 3,231 3,268
Belgium & Luxembourg 1,315 1,363 1,391 1,749 2,000 2,060 2,101 2,122 2,143 2,165 2,187
Central European countries 1,746 1,904 2,280 2,292 2,308 2,332 2,356 2,379 2,403 2,427 2,452
A&ME 5,834 6,381 6,918 7,152 7,542 7,782 7,945 8,063 8,154 8,239 8,314
Enterprise 7,807 7,757 7,930 7,927 7,961 7,986 8,048 8,173 8,302 8,435 8,572
Totem 684 686 713 742 772 803 835 868 894
ICSS 1,450 1,515 1,540 1,478 1,429 1,410 1,410 1,410 1,410 1,410 1,410
Eliminations (1,864) (1,800) (2,543) (2,429) (2,523) (2,535) (2,611) (2,650) (2,690) (2,730) (2,771)
Total revenues 42,270 42,522 43,471 44,122 40,116 40,424 40,766 41,205 41,623 42,049 42,470
% change 0.1% 0.6% 2.2% 1.5% -9.1% 0.8% 0.8% 1.1% 1.0% 1.0% 1.0%
EBITDAaL
France 7,163 6,867 6,645 6,364 6,369 6,418 6,479 6,577 6,623 6,672 6,724
Spain 1,433 1,251 1,110 1,246 0 0 0 0 0 0 0
Poland 632 650 657 700 752 760 768 777 786 795 804
Belgium & Luxembourg 323 353 374 452 500 503 513 520 528 535 540
Central European countries 544 576 631 639 648 665 683 690 697 704 711
A&ME 1,964 2,265 2,584 2,734 2,886 3,004 3,067 3,112 3,147 3,180 3,209
Enterprise 1,023 970 804 679 613 615 620 630 640 650 661
Totem 371 373 390 406 423 441 460 479 495
ICSS (244) (237) (96) (30) (53) (52) (52) (52) (52) (52) (52)
EBITDAaL 12,680 12,564 12,963 13,034 12,025 12,320 12,501 12,695 12,828 12,963 13,092
% change -1.4% -0.9% 3.2% 0.5% -7.7% 2.5% 1.5% 1.6% 1.0% 1.1% 1.0%
% Margin 30.0% 29.5% 29.8% 29.5% 30.0% 30.5% 30.7% 30.8% 30.8% 30.8% 30.8%
D&A (7,134) (7,074) (7,035) (7,312) (6,022) (5,886) (5,779) (5,709) (5,711) (5,736) (5,790)
EBIT 5,520 2,521 4,801 4,966 5,529 6,236 6,638 7,021 7,207 7,358 7,526
Net financials (1,314) (782) (920) (1,205) (988) (993) (965) (928) (879) (811) (730)
PBT 4,206 1,739 3,881 3,761 4,540 5,243 5,674 6,093 6,329 6,547 6,795
Income tax 848 (962) (1,264) (871) (1,226) (1,363) (1,475) (1,584) (1,645) (1,702) (1,767)
Tax rate -20% 55% 33% 23% 27% 26% 26% 26% 26% 26% 26%
Minority interests 233 545 471 451 318 318 318 318 318 318 318
Net Income, group share 4,821 231 2,146 2,642 2,997 3,562 3,881 4,191 4,365 4,527 4,711
40
(44-20) 7134-4725 17 April 2024 JPMORGAN
Table 25: Orange – Cash flow summary

€ million
2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
EBITDAaL - Telecom only 12,840 12,695 13,080 13,157 12,105 12,320 12,501 12,695 12,828 12,963 13,092
eCAPEX - Telecom only (7,103) (7,635) (7,336) (6,780) (6,061) (5,986) (5,949) (5,896) (5,818) (5,860) (5,913)
EBITDAaL - eCAPEX - Telecom only 5,737 5,060 5,744 6,377 6,044 6,334 6,552 6,800 7,010 7,103 7,179
Spectrum and licences paid (351) (717) (981) (521) (500) (303) (253) (153) (203) (203) (203)
Net interest paid (1,127) (997) (804) (731) (988) (993) (965) (928) (879) (811) (730)
Income tax paid (1,085) (955) (1,033) (1,128) (1,226) (1,363) (1,475) (1,584) (1,645) (1,702) (1,767)
Working capital (500) 120 (284) 319 10 (50) (20) (20) 0 0 0
Minority shareholders remuneration (225) (218) (304) (368) (304) (309) (314) (319) (324) (329) (334)
Other operational items (838) (622) (630) (883) (530) (450) (440) (400) (300) (300) (300)
Other financial items (183) (250) (107) (433) (50) (50) (50) (50) (50) (50) (50)
FCCF guidance basis 2,494 2,401 3,058 3,663 3,280 3,458 3,652 3,868 4,186 4,290 4,382
FCF 3,952 910 1,646 2,318 2,375 2,746 2,985 3,295 3,759 4,358 4,444
Dividends to Orange shareholders (1,595) (2,127) (1,861) (1,862) (1,941) (2,021) (2,101) (2,190) (2,260) (2,260) (2,260)
Net of acquisitions and disposals (89) 986 (104) (1,959) 4,400 0 0 0 0 0 0
Subordinated bond issuances (292) (550) (710) (124) (300) (1,330) (1,400) (1,800) (2,200) (2,200) (2,200)
Other 1 2 (0) (75) (79) (79) (79) 0 0 0 0
Net cash variation ( (+) decrease / (-) increase) 1,977 (779) (1,029) (1,702) 4,455 (685) (595) (694) (702) (103) (16)
FCF pre spectrum 4,303 1,627 2,627 2,839 2,875 3,049 3,238 3,449 3,962 4,561 4,648
Net financial debt 23,489 24,268 25,298 27,000 22,245 21,599 20,794 19,689 18,190 16,093 13,909
Net debt/EBITDA 1.8 x 1.9 x 1.9 x 2.1 x 1.8 x 1.8 x 1.7 x 1.6 x 1.4 x 1.2 x 1.1 x
Net debt including hybrids 29,189 29,765 30,248 31,950 27,195 26,549 25,744 24,639 23,140 21,043 18,859
Net debt (inc hybrids)/EBITDA 2.3 x 2.3 x 2.3 x 2.4 x 2.2 x 2.2 x 2.1 x 1.9 x 1.8 x 1.6 x 1.4 x
41
(44-20) 7134-4725 17 April 2024 JPMORGAN
Bouygues: Reiterate OW (TP €49)

Whilst acknowledging the complexities of its conglomerate equity story, we continue to
consider Bouygues one of the most attractively valued names across our coverage
universe. Key stock highlights include: (1) We model a 3-year revenue CAGR of 2%.
This twinned with targeted broad-based margin expansion should support 3-year COPA
and EPS growth of 12% and 17% respectively, (2) The FY25E EFCF yield at 12% is
attractive, and could be further supported by the targeted acquisition of La Poste
Telecom, (3) Group leverage is falling rapidly (FY25E 1.4x) offering ample scope for
bolt-on M&A or enhanced shareholder returns, and (4) We believe forecast risks remain
skewed to the upside at Equans, which now represents 37% of our SoTP valuation.
• A unique conglomerate: Our Bouygues SoTP is composed of Telecoms (41%)

which is delivering a MSD EBITDA CAGR, Equans (37%) which has the potential
to double COPA by 2027E, and the remainder construction-related activities all of
which have margin upside. This culminates in a conglomerate that screens
misunderstood and undervalued, in our view.
• Q1 preview (7th May): (1) We forecast Q1 group revenues €12,218m, implying a y/
y growth of +1.8%. We model Telecom EBITDA to come in at €416m implying a
27.4% margin over service revenues (Q4: 34.0%). (2) We model Equans revenues
€4,530m (+3.0%), Colas €2,639m, (+1.0% y/y ), Construction €2,379m, (+3% y/y),
Telecom €1,955m, (+0.9% y/y ) and TF1 €499m (+4.0% y/y). This is diluted by
declines across Immobilier €248m (-25.0% y/y).
• Changes in estimates: (1) We increase revenues +1.2% pa for the medium term. In
the mix, a +2.8% pa upgrade in Colas and +2.5% pa upgrade in construction
revenues was partially offset by -1.3% pa downgrade in Telecom revenues. (2) EBIT
falls -8% this year and -9.7% thereafter driven by all segments ex Equans. (3)
FY24E EFCF falls -43% this year (primarily driven by WC) and -7% thereafter (-
2.2% EBITDA cuts).
• Remain OW: Our SoTP yields an unchanged Dec’25 TP of €49/share, which offers
37% upside potential. On FY24E the company trades on 11.3x PE, a 5.0% EFCF
yield, and 4.6x EV/EBITDA. By FY25E this improves to 8.9x PE, 11.8% EFCF
yield and 4.0x EV/EBITDA.
42
(44-20) 7134-4725 17 April 2024 JPMORGAN
Bouygues – Q1’24 preview (7th May)
• Summary: We forecast Q1 group revenues €12,218m, implying a y/y growth of

+1.8%. We model Telecom EBITDA to come in at €416m implying a 27.4% margin
over service revenues (Q4: 34.0%).
• Divisions: We model Equans revenues €4,530m (+3.0%), Colas €2,639m, (+1.0% y/
y ), Construction €2,379m, (+3% y/y), Telecom €1,955m, (+0.9% y/y ) and TF1
€499m (+4.0% y/y). This is diluted by declines across Immobilier €248m (-25.0% y/
y).
Table 26: Bouygues – Quarterly financial summary
€ million, unless mentioned otherwise
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24E
Construction 3,077 3,336 3,238 3,516 2,310 2,436 2,464 2,545 2,379
Immobilier 399 470 497 666 331 412 366 629 248
Colas 2,406 4,111 5,007 4,005 2,613 4,175 5,017 4,210 2,639
Equans 4,398 4,740 4,588 5,035 4,530
TF1 561 626 553 768 480 558 510 750 499
Telecom 1,796 1,840 1,895 2,001 1,937 1,869 1,894 2,027 1,955
Holding/Elim (35) (56) (44) (68) (62) (61) (87) (67) (32)
Group revenues 8,204 10,327 11,146 10,888 12,007 14,129 14,752 15,129 12,218
y/y, %
Construction 0.6% 1.7% 2.4% 7.5% 6.0% 3.2% 7.5% 3.0% 3.0%
Immobilier -11.7% -11.2% 10.0% -2.5% -17.0% -12.3% -26.4% -5.6% -25.0%
Colas 19.1% 15.1% 19.3% 16.5% 8.6% 1.6% 0.2% 5.1% 1.0%
Equans 3.4% 9.7% 5.6% 5.7% 3.0%
TF1 10.0% 1.1% 5.9% -1.0% -14.4% -10.9% -7.8% -2.3% 4.0%
Telecom 3.0% 6.5% 5.2% 0.9% 7.9% 1.6% -0.1% 1.3% 0.9%
Total revenues 6.0% 6.7% 10.4% 8.1% 3.9% 3.3% 1.4% 3.6% 1.8%
Construction 85 100 102 126 58 62 70 91 62

Immobilier 0 16 1 20 0 0 1 27 (2)
Colas (293) 133 373 247 (303) 172 433 232 (287)
Equans 98 145 134 168 115
TF1 60 129 50 77 39 111 51 82 33
Telecom 87 208 205 165 119 233 211 206 129
Holding/other (16) (17) (16) (10) (25) (28) (35) (44) (25)
Group EBIT (77) 569 715 625 (14) 695 865 762 25
43
(44-20) 7134-4725 17 April 2024 JPMORGAN
Table 27: Bouygues – Quarterly financial summary

€ million, unless mentioned otherwise
Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24E
margin, %
Construction 2.8% 3.0% 3.2% 3.6% 2.5% 2.5% 2.8% 3.6% 2.6%
Immobilier 0.0% 3.4% 0.2% 3.0% 0.0% 0.0% 0.3% 4.3% -0.8%
Colas -12.2% 3.2% 7.4% 6.2% -11.6% 4.1% 8.6% 5.5% -10.9%
Energies & Services 2.2% 3.1% 2.9% 3.3% 2.5%
TF1 10.7% 20.6% 9.0% 10.0% 8.1% 19.9% 9.9% 10.9% 6.7%
Telecom 4.8% 11.3% 10.8% 8.2% 6.1% 12.5% 11.1% 10.2% 6.6%
Total Group -0.9% 5.5% 6.4% 5.7% -0.1% 4.9% 5.9% 5.0% 0.2%
Construction 84 58 71 223 68 63 79 243 74

Immobilier 8 14 (2) 32 (9) (2) 3 18 (1)
Colas (258) 191 470 381 (275) 254 546 435 (238)
Equans 0 0 0 190 135 151 156 151 190
TF1 147 179 196 211 101 176 98 215 97
Telecom 354 476 478 465 399 529 523 518 416
Holding/other (12) (9) (21) 10 (5) (13) 2 (14) (21)
Group EBITDAaL 323 909 1,192 1,512 414 1,158 1,407 1,566 517
Construction 58 62 70 91 62
Immobilier 0 0 1 27 (2)
Colas (301) 174 435 234 (285)
Equans 98 145 134 168 115
TF1 40 112 52 83 35
Telecom 126 240 219 213 136
Holding/other (12) (15) (15) (28) (25)
Group COPA 9 718 896 788 36
Telecom - Service revenues 1,401 1,423 1,455 1,474 1,462 1,486 1,507 1,524 1,518
y/y, % 2.8% 3.1% 2.9% 3.1% 4.4% 4.4% 3.6% 3.4% 3.8%
Telecom EBITDA 354 476 478 465 399 529 523 518 416
margin over service revs, % 25.3% 34.0% 32.9% 31.5% 27.3% 35.6% 34.7% 34.0% 27.4%
y/y, % 7.3% 11.2% 7.9% 13.1% 12.7% 11.1% 9.4% 11.4% 4.2%
Telecom Capex 492 345 362 211 521 334 248 325 520
% of sales 27.4% 19.2% 19.1% 10.5% 26.9% 17.9% 13.1% 16.0% 26.6%
Group Net Profit (131) 278 390 436 (134) 359 440 375 (156)
y/y, % -723.8% -28.2% -2.3% 37.1% 2.3% 29.1% 12.8% -14.0% 16.4%
Net debt 2,111 3,705 3,656 7,440 8,779 10,573 10,238 6,251 7,411
FCF (before working capital) (345) 301 550 289 (340) 351 654 514 (340)
FCF (after working capital) (1,361) (911) 3 2,458 (1,159) (790) 715 3,561 (1,140)
44
(44-20) 7134-4725 17 April 2024 JPMORGAN
Bouygues – changes in estimates
• Revenues: We raise 2024E revenues 1%, and our long-term estimates 2% pa. In the
mix we cut estimates for Telecoms and Immobilier, leave Equans unchanged, but
raise estimates across Construction and Colas..
• EBIT: We cut 2024E and 2025E 8-10% pa. But mid term estimates are unchanged.
this reflects a move to push out the timing of the company’s target margin
improvements across Construction, Immobilier and Colas.
• Other: 2024E EFCF falls 43% mainly on a partial unwind of the strong Q4 2023
WC inflow. Mid-term EFCF falls modestly on the above EBIT cuts.
Table 28: Bouygues – Changes to estimates
€ million
Old New Var (%)
2024E 2025E 2026E 2030E 2024E 2025E 2026E 2030E 2024E 2025E 2026E 2030E
Construction 9,828 9,926 10,025 10,432 9,973 10,196 10,349 10,984 1.5% 2.7% 3.2% 5.3%
Immobilier 1,578 1,656 1,772 2,009 1,519 1,641 1,772 2,008 -3.7% -0.9% 0.0% 0.0%
Colas 15,988 16,148 16,310 16,972 16,359 16,605 16,854 17,888 2.3% 2.8% 3.3% 5.4%
Equans 19,103 19,676 20,365 23,369 19,180 19,756 20,447 23,463 0.4% 0.4% 0.4% 0.4%
TF1 2,329 2,422 2,446 2,545 2,358 2,452 2,477 2,577 1.3% 1.3% 1.3% 1.3%
Telecom 8,042 7,961 8,013 8,453 7,927 7,856 7,910 8,348 -1.4% -1.3% -1.3% -1.2%
Holding 193 193 193 193 229 229 229 229 18.7% 18.7% 18.7% 18.7%
Eliminations (361) (367) (374) (405) (361) (369) (377) (411) 0.0% 0.4% 0.7% 1.5%
Total revenues 56,699 57,615 58,749 63,568 57,185 58,367 59,662 65,088 0.9% 1.3% 1.6% 2.4%
Telecom EBITDA 2,075 2,192 2,301 2,490 2,060 2,177 2,285 2,473 -0.7% -0.7% -0.7% -0.7%
Construction 334 357 361 375 290 306 320 361 -13.3% -14.5% -11.2% -3.6%
Immobilier 36 52 64 102 21 51 64 102 -41.9% -0.9% 0.0% 0.0%
Colas 572 660 666 693 569 612 654 730 -0.5% -7.3% -1.8% 5.3%
Equans 643 764 922 1,291 648 767 926 1,296 0.7% 0.4% 0.4% 0.4%
TF1 318 319 322 335 287 323 326 339 -9.7% 1.2% 1.2% 1.2%
Telecom 893 1,021 1,139 1,330 815 865 1,139 1,329 -8.7% -15.3% 0.0% -0.1%
Holding/other (51) (51) (51) (51) (103) (103) (103) (103) 103.2% 103.2% 103.2% 103.2%
Total EBIT 2,746 3,122 3,424 4,076 2,526 2,820 3,327 4,055 -8.0% -9.7% -2.8% -0.5%
Net profit attributable to the group 1,372 1,642 1,824 2,250 1,131 1,344 1,666 2,128 -17.6% -18.2% -8.7% -5.4%
DPS - € 1.80 3.60 3.60 3.60 1.90 3.80 3.80 3.80 5.6% 5.6% 5.6% 5.6%
Capex 2,522 2,370 2,371 2,395 2,469 2,367 2,370 2,404 -2.1% -0.1% 0.0% 0.4%
Equity FCF 1,215 1,687 1,893 2,405 694 1,564 1,765 2,311 -42.9% -7.3% -6.8% -3.9%
Net debt 7,537 6,580 6,103 2,782 6,312 5,502 5,204 2,467 -16.3% -16.4% -14.7% -11.3%
Source: J.P. Morgan estimates.
45
(44-20) 7134-4725 17 April 2024 JPMORGAN
Bouygues - valuation
Our Dec-25 target price remains unchanged at €49/share which implies a 37% upside
from current share price.
Table 29: Bouygues – SotP model

€ million
Stake Total value To Bouygues Method EBITDA 2024E EV/EBITDA 2024 EBIT 2023E EBIT 2025E EV/EBIT 2025
Construction 100.0% 1,708 1,708 Multiple, 5.5x EBIT 2025E 347 4.9 270 310 5.5
Immobilier 100.0% 434 434 Multiple, 7x EBIT 2025E 27 16.3 25 62 7.0
Colas 100.0% 4,803 4,803 Multiple, 7.5x EBIT 2025E 882 5.4 363 640 7.5
Equans 100.0% 10,866 10,866 Multiple, 0.65x sales 2025E 968 920
TF1 43.0% 1,170 503 Mark to market 567 2.1 238 322 3.6
Telecom 90.5% 13,326 12,060 DCF, 7% WACC, 1% terminal growth 2,060 6.5 752 1,115 12.0
Holding 100.0% (855) (855) DCF, 6.9% WACC, -1% terminal growth (89) 9.6 (132) (103) 8.3
EV of controlled operations . 29,518
Other associates 546
Total EV . 30,079 4,762 6.3 2,049 3,267 9.2
Net debt Dec-2025E . (5,502)
Spectrum (1,000)
Equity value . 23,576
Conglomerate discount . 20%
Adjusted equity value . 18,861
number of shares . 374
Fair Value . 49.0
46
(44-20) 7134-4725 17 April 2024 JPMORGAN
Bouygues – financial exhibits
Table 30: Bouygues – Divisional summary

€ million
Summary BUs 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Revenues
Construction 13,355 12,047 12,770 13,167 9,755 9,973 10,196 10,349 10,504 10,662 10,822 10,984
Immobilier 2,706 2,032 2,116 2,032 1,738 1,519 1,641 1,772 1,949 1,969 1,989 2,008
Colas 13,688 12,297 13,226 15,529 16,015 16,359 16,605 16,854 17,107 17,363 17,624 17,888
Equans 3,757 18,761 19,180 19,756 20,447 21,163 21,903 22,670 23,463
TF1 2,337 2,082 2,427 2,508 2,298 2,358 2,452 2,477 2,501 2,526 2,552 2,577
Telecom 6,058 6,438 7,256 7,532 7,727 7,927 7,856 7,910 8,023 8,130 8,238 8,348
Holding 202 180 213 207 229 229 229 229 229 229 229 229
Eliminations (417) (382) (419) (410) (506) (361) (369) (377) (386) (394) (402) (411)
Total revenues 37,929 34,694 37,589 44,322 56,017 57,185 58,367 59,662 61,091 62,389 63,721 65,088
y/y, %
Construction 8.1% -9.8% 6.0% 3.1% -25.9% 2.2% 2.2% 1.5% 1.5% 1.5% 1.5% 1.5%
Immobilier 3.0% -24.9% 4.1% -4.0% -14.5% -12.6% 8.0% 8.0% 10.0% 1.0% 1.0% 1.0%
Colas 3.8% -10.2% 7.6% 17.4% 3.1% 2.2% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
Equans 2.2% 3.0% 3.5% 3.5% 3.5% 3.5% 3.5%
TF1 2.1% -10.9% 16.6% 3.3% -8.4% 2.6% 4.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Telecom 13.4% 6.3% 12.7% 3.8% 2.6% 2.6% -0.9% 0.7% 1.4% 1.3% 1.3% 1.3%
Holding/other 20.2% -10.9% 18.3% -2.8% 10.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Eliminations -1.0% -8.4% 9.7% -2.1% 23.4% -28.6% 2.1% 2.2% 2.4% 2.1% 2.1% 2.1%
Total revenues 6.7% -8.5% 8.3% 17.9% 26.4% 2.1% 2.1% 2.2% 2.4% 2.1% 2.1% 2.1%
Current EBIT
Construction 378 171 342 413 281 290 306 320 336 351 356 361
Immobilier 99 12 43 37 28 21 51 64 80 91 101 102
Colas 433 254 440 460 534 569 612 654 698 709 719 730
Equans 130 545 648 767 926 1,064 1,167 1,253 1,296
TF1 255 190 343 316 283 287 323 326 329 332 336 339
Telecom 540 623 572 665 769 815 865 1,139 1,203 1,241 1,305 1,329
Holding/other (29) (28) (47) (59) (132) (103) (103) (103) (103) (103) (103) (103)
Total Current EBIT 1,676 1,222 1,693 1,962 2,308 2,526 2,820 3,327 3,607 3,788 3,967 4,055
margin, %
Construction 2.8% 1.4% 2.7% 3.1% 2.9% 2.9% 3.0% 3.1% 3.2% 3.3% 3.3% 3.3%
Immobilier 3.7% 0.6% 2.0% 1.8% 1.6% 1.4% 3.1% 3.6% 4.1% 4.6% 5.1% 5.1%
Colas 3.2% 2.1% 3.3% 3.0% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 4.1% 4.1%
Equans 0.0% 0.0% 0.0% 3.5% 2.9% 3.4% 3.9% 4.5% 5.0% 5.3% 5.5% 5.5%
TF1 10.9% 9.1% 14.1% 12.6% 12.3% 12.2% 13.2% 13.2% 13.2% 13.2% 13.2% 13.2%
Telecom 8.9% 9.7% 7.9% 8.8% 10.0% 10.3% 11.0% 14.4% 15.0% 15.3% 15.8% 15.9%
Total EBIT 4.4% 3.5% 4.5% 4.4% 4.1% 4.4% 4.8% 5.6% 5.9% 6.1% 6.2% 6.2%
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Table 31: Bouygues – Summary P&L

€ million
Summary P&L 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Sales 37,929 34,694 37,589 44,322 56,017 57,185 58,367 59,662 61,091 62,389 63,721 65,088
y/y, % 6.7% -8.5% 8.3% 17.9% 26.4% 2.1% 2.1% 2.2% 2.4% 2.1% 2.1% 2.1%
EBITDA (after leases from Q1 19) 3,548 3,233 3,667 3,936 4,545 4,762 5,183 5,546 5,857 6,060 6,237 6,364
margin, % 9.4% 9.3% 9.8% 8.9% 8.1% 8.3% 8.9% 9.3% 9.6% 9.7% 9.8% 9.8%
Depreciation and amortisation (1,929) (2,065) (2,030) (2,033) (2,496) (2,296) (2,422) (2,279) (2,311) (2,332) (2,330) (2,369)
COPA 1,734 2,018 2,411 2,570 2,864 3,371 3,651 3,832 4,011 4,099
margin, % 4.6% 4.6% 4.3% 4.5% 4.9% 5.6% 6.0% 6.1% 6.3% 6.3%
Current EBIT (IFRS 16) 1,676 1,222 1,693 1,962 2,308 2,526 2,820 3,327 3,607 3,788 3,967 4,055
margin, % 4.4% 3.5% 4.5% 4.4% 4.1% 4.4% 4.8% 5.6% 5.9% 6.1% 6.2% 6.2%
y/y, % 10.9% -27.1% 38.5% 15.9% 17.6% 9.5% 11.7% 17.9% 8.4% 5.0% 4.7% 2.2%
EBIT 1,696 1,124 1,733 1,872 2,113 2,366 2,710 3,247 3,607 3,788 3,967 4,055
Cost of net debt (207) (167) (155) (198) (286) (334) (338) (357) (389) (431) (434) (435)
Profit before tax 1,422 871 1,515 1,585 1,689 1,926 2,265 2,783 3,111 3,250 3,426 3,513
Income tax expense (452) (317) (432) (424) (547) (624) (734) (901) (1,008) (1,053) (1,110) (1,138)
tax rate, % 31.8% 36.4% 28.5% 26.8% 32.4% 32.4% 32.4% 32.4% 32.4% 32.4% 32.4% 32.4%
Contribution from associates 350 216 222 (30) 59 (3) (3) (3) (3) (3) (3) (3)
Net income from continuing operations 1,320 770 1,305 1,131 1,201 1,299 1,528 1,879 2,100 2,194 2,313 2,372
Minorities (136) (74) (180) (158) (161) (168) (184) (213) (218) (226) (234) (243)
Net profit attributable to the group 1,184 696 1,125 973 1,040 1,131 1,344 1,666 1,882 1,968 2,079 2,128
Number of shares - average 374 380 381 382 378 374 374 374 374 374 374 374
EPS - € 3.17 1.83 2.95 2.55 2.75 3.02 3.59 4.45 5.03 5.26 5.55 5.68
DPS - € 1.70 1.70 1.80 1.80 1.90 1.90 3.80 3.80 3.80 3.80 3.80 3.80
Table 32: Bouygues – Summary cash flow

€ million
Summary Cash Flow 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E
EBITDA 3,956 3,658 4,080 4,439 5,191 5,426 5,858 6,232 6,555 6,770 6,959 7,098
Interest (264) (220) (207) (260) (373) (441) (445) (463) (496) (538) (541) (542)
Repayment of lease obligations (351) (372) (361) (441) (559) (557) (568) (580) (591) (603) (615) (627)
Taxes (422) (367) (397) (518) (516) (624) (734) (901) (1,008) (1,053) (1,110) (1,138)
Working capital (223) 477 204 (606) 1,148 (400) 0 0 0 0 0 0
Alstom dividend 341 0 0 0 0 0 0 0 0 0 0 0
Minority dividends (79) (41) (91) (97) (73) (81) (70) (73) (71) (69) (72) (75)
Other (279) (362) (311) (337) (447) (160) (110) (80) 0 0 0 0
Capex (net) ex-spectrum (1,602) (1,612) (1,974) (2,088) (2,117) (2,469) (2,367) (2,370) (2,384) (2,409) (2,434) (2,404)
Equity FCF 1,077 1,161 943 92 2,254 694 1,564 1,765 2,006 2,098 2,187 2,311
Spectrum 0 0 0 (133) 0 (43) (43) (43) (43) (43) (43) (43)
Dividend (631) (646) (647) (680) (671) (712) (712) (1,423) (1,423) (1,423) (1,423) (1,423)
Acquision/(Disposal) 1,001 8 731 (6,410) (210) 0 0 0 0 0 0 0
Other (271) (208) (16) 78 (80) 0 0 0 0 0 0 0
Net Debt 2,222 1,981 941 7,440 6,251 6,312 5,502 5,204 4,664 4,032 3,311 2,467
Net debt/ EBITDA 0.6 0.6 0.3 1.9 1.4 1.3 1.1 0.9 0.8 0.7 0.5 0.4
48
(44-20) 7134-4725 17 April 2024 JPMORGAN
European telecoms
Comparative multiples
Equity Research
Priced 15/04/2024 Current Target Market EFCF yield P/E Dividend yield TSR EV/EBITDA (IFRS 16) EV/OpFCF Unlevered FCF yield EBITDA
Rec Price Price cap (€bn) 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2024E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E CAGR*
BT OW 105.0 290.0 12.1 7.7% 10.1% 12.9% 5.3 4.8 3.7 7.9% 8.6% 9.4% 9.0% 4.0 3.9 3.7 10.7 9.9 9.1 7.0% 8.1% 7.3% 2.4%
Deutsche Telekom OW 21.1 31.0 103.6 11.1% 12.8% 18.4% 11.5 9.2 7.3 4.2% 4.9% 6.6% 6.2% 5.6 5.2 4.6 8.9 8.2 7.0 9.4% 10.4% 12.1% 6.9%
Elisa OW 41.1 58.0 6.6 5.9% 6.7% 7.4% 16.2 14.4 12.8 6.0% 6.7% 7.5% 5.8% 9.6 8.8 8.0 15.0 13.3 11.9 5.2% 5.9% 6.5% 3.9%
KPN OW 3.4 4.5 13.1 7.1% 7.9% 9.6% 15.1 13.0 10.6 5.3% 6.0% 6.9% 6.7% 7.4 6.8 6.3 13.8 12.4 10.9 5.6% 6.1% 6.8% 3.0%
Orange OW 10.4 14.2 27.6 10.1% 11.7% 13.7% 8.6 6.6 5.5 7.8% 8.8% 10.0% 7.6% 5.3 5.0 4.7 9.5 8.8 8.3 6.2% 7.0% 6.8% 2.1%
OTE N 14.3 17.5 5.7 9.6% 10.8% 13.1% 10.2 8.8 7.7 4.4% 4.8% 6.1% 8.2% 4.1 3.7 3.3 7.7 6.8 5.9 9.3% 10.4% 12.4% 2.1%
Proximus OW 7.4 13.0 2.4 11.3% 19.1% 25.2% 5.0 3.9 2.7 21.2% 26.8% 36.7% 21.2% 3.3 3.1 2.8 10.1 8.2 7.5 5.5% 7.6% 8.3% 2.0%
Swisscom NR 517.0 ** 27.7 5.4% 5.7% 6.1% 15.5 15.1 14.4 4.4% 4.7% 5.0% 4.4% 7.2 6.9 6.5 14.6 14.0 13.2 4.7% 5.0% 5.1% -0.5%
Telecom Italia - Blend 6.8% 5.4 5.1 4.2 14.4 13.1 9.9 4.9% 6.1% 7.1% 6.6%
Telecom Italia - Ords NR 0.2 ** 3.4 1.9% 8.3% 14.2% NM NM 26.6 0.0% 0.0% 0.0% 0.0%
Telecom Italia - Savs NR 0.2 ** 1.4 2.3% 12.0% 25.4% NM NM 14.9 15.6% 18.5% 22.7% 15.6%
Telefonica NR 3.9 ** 22.2 15.9% 13.5% 15.7% 11.3 11.1 10.4 8.6% 9.5% 5.4% 10.4% 5.1 5.0 3.9 8.2 7.9 6.2 4.7% 4.4% 5.2% 0.0%
Telekom Austria NR 7.9 ** 5.2 12.4% 14.0% 15.8% 7.2 6.4 5.7 4.8% 5.4% 6.1% 4.5% 3.2 2.8 2.4 6.0 5.1 4.2 11.1% 13.0% 15.8% 2.3%
Telenor OW 122.0 165.0 14.4 5.9% 8.4% 10.2% 14.4 11.8 9.4 8.5% 9.4% 10.5% 9.8% 7.9 7.2 6.6 13.1 10.9 9.5 4.8% 6.6% 7.2% 3.3%
Telia N 26.0 29.0 8.8 7.8% 9.2% 11.0% 16.2 13.1 10.5 8.5% 9.5% 10.8% 8.9% 5.3 4.8 4.3 9.3 8.3 7.3 7.5% 8.5% 8.5% 3.4%
Vodafone NR 67.1 ** 19.8 8.8% 10.5% 13.2% 6.9 5.5 5.3 6.2% 6.6% 7.1% 20.0% 4.4 4.2 4.3 7.7 7.4 7.3 4.7% 5.2% 5.2% 1.5%
Incumbents 274.0 7.8% 10.5% 13.2% 11.3 9.2 9.4 6.2% 6.7% 7.1% 7.9% 5.3 5.0 4.3 9.8 8.5 7.9 5.5% 6.8% 7.2% 2.3%
EFCF yield P/E Dividend yield TSR EV/EBITDA (IFRS 16) EV/OpFCF Unlevered FCF yield
Bouygues OW 36.2 49.0 13.5 4.9% 11.7% 14.8% 11.3 9.0 6.4 5.5% 11.7% 13.4% 5.5% 4.6 4.0 3.4 8.3 6.6 5.4 5.0% 10.3% 12.7% 0.0%
Eutelsat UW 3.7 3.0 0.9 40.1% 37.2% 38.7% 5.0 5.4 5.2 0.0% 0.0% 0.0% 0.0% 4.2 3.8 3.4 7.7 6.8 5.9 13.8% 14.4% 17.1% -0.7%
Liberty Global NR 16.8 ** 5.9 18.4% 22.0% 24.4% NM NM NM 0.0% 0.0% 0.0% 15.8% 5.6 5.4 5.2 12.4 11.3 10.5 4.9% 5.4% 5.4% 1.1%
NOS UW 3.6 3.4 1.9 8.1% 10.2% 2.6% 13.3 11.2 9.7 10.4% 10.0% 11.5% 8.4% 4.8 4.6 4.4 9.7 8.9 8.3 6.5% 7.6% 2.6% 1.4%
SES N 6.0 6.5 2.5 14.9% 25.3% 28.5% 8.3 7.3 6.5 9.1% 10.0% 11.1% 9.5% 4.4 3.9 3.4 9.9 6.2 5.3 8.6% 14.4% 17.0% -1.2%
Tele2 N 92.8 84.0 5.5 8.0% 8.9% 10.7% 15.9 14.0 12.1 8.0% 8.9% 9.9% 8.0% 7.6 7.0 6.4 11.4 10.5 9.0 6.4% 7.0% 8.2% 2.5%
Altnets/Cable/Satellite/Towers 37.3 8.1% 11.7% 14.8% 12.3 10.1 6.5 8.0% 8.9% 9.9% 8.4% 4.6 4.0 4.1 9.7 7.3 7.7 6.5% 8.3% 8.2% 0.0%
EFCF yield RLFCF yield Dividend yield TSR EV/EBITDA (IFRS 16) EV/OpFCF Unlevered FCF yield
Cellnex OW 30.3 53.0 21.4 -1.3% 1.0% 2.6% 7.9% 9.5% 10.6% 0.2% 0.2% 2.6% 0.2% 13.2 12.4 11.5 31.8 24.0 19.1 -0.1% 1.1% 1.9% 7.2%
INWIT OW 9.9 14.5 9.4 2.5% 3.7% 5.5% 6.0% 6.9% 8.1% 5.5% 6.2% 7.1% 6.9% 13.2 11.8 10.7 19.5 15.9 13.3 2.3% 3.2% 4.4% 7.8%
Towers 30.8 0.6% 2.4% 4.1% 7.0% 8.2% 9.3% 2.8% 3.2% 4.9% 3.5% 13.2 12.1 11.1 25.7 19.9 16.2 1.1% 2.1% 3.1% 7.5%
EFCF yield P/E EV/Sales TSR EV/EBITDA (IFRS 16) EV/OpFCF Unlevered FCF yield
Sinch OW 25.7 60.0 1.9 6.4% 9.6% 12.4% 73.2 25.6 15.5 1.0 0.8 0.7 0.0% 7.2 6.1 5.0 8.7 7.2 6.0 6.2% 9.1% 12.3% 8.6%
Truecaller OW 31.2 77.0 1.0 5.5% 6.9% 8.4% 19.0 14.6 11.6 5.0 3.7 2.5 0.0% 12.9 9.7 6.6 13.1 9.7 6.7 5.9% 7.9% 11.4% 21.3%
CPaaS 2.9 5.9% 8.3% 10.4% 46.1 20.1 13.5 3.0 2.2 1.6 0.0% 10.1 7.9 5.8 10.9 8.5 6.3 6.0% 8.5% 11.9% 14.9%
th
Source: J.P. Morgan estimates, Bloomberg Finance L.P. Share prices as at cob on 15 April 2024.
49
(44-20) 7134-4725 17 April 2024 JPMORGAN
Investment Thesis, Valuation and Risks

Orange SA (Overweight; Price Target: €14.20)
Investment Thesis
After a long period of restriction, we are reinstating a rating for Orange at OW. Key drivers
of our constructive view include: (1) France: We expect Orange’s ongoing network and
customer service leadership, trending market repair, and a fading wholesale drag, to
collectively support a long awaited inflection back to revenue and EBITDA growth, (2)
Enterprise: FY23 EBITDA -17% y/y marks a trough. We expect FY24E -8%, and FY25E
back to growth, (3) Overall: Inflecting French and Enterprise trends, twinned with strong
ongoing growth elsewhere, should underpin a low double digit EPS CAGR over the next
3 years, (4) Valuation: We consider Orange our preferred Telco “value” play. In FY25E
Orange trades on 5x EV/EBITDA, 6.5x PE, and a 12% EFCF yield (which would be an even
more impressive 14% adjusting for 50% of post-synergy ORA-MAS JV EFCF).
Valuation
We value Orange using a sum of the parts valuation, with individual division valuations
based on DCFs except for Poland and Belgium & Luxembourg which are based on market
values. The WACCs used range from 6.5% at Totem to 12% at A&ME and the terminal
growth rates range from 0 % to 2%. With that, we get to a Dec-25 target price of €14.2/share.
Risks to Rating and Price Target
• Altice restructuring leads to a stronger player which can afford to be aggressive and lead
to a more competitive French market
• Emerging market FX devaluation drags on growth at the A&ME region
• Orange uses its cash generation firepower to pursue M&A unfavoured by the market
50
(44-20) 7134-4725 17 April 2024 JPMORGAN
Investment Thesis, Valuation and Risks

Bouygues (Overweight; Price Target: €49.00)
Investment Thesis
We believe Bouygues is attractively priced and see meaningful upside potential. Whilst the
Equans deal was not well received by the market, we continue to like the growth story at
Bouygues, led by a rebounding and resilient construction division and ongoing momentum
in the Telecom business.
Valuation
We value Bouygues using a sum-of-the-parts approach, with individual division valuations
based on DCF (Telecom, Holding), EV/EBIT multiples (Construction, Immobiliser, Colas
businesses) or EV/Sales (Equans business). We mark-to-market our Alstom and TF1
valuations. We then apply a 20% conglomerate discount to our fair value of equity to derive
our Dec-25 price target of €49.
Risks to Rating and Price Target
• Further deterioration of the macro environment, especially in France, which would

weigh on the construction businesses.
• Lack of material government spending on infrastructure projects.
• Step up in competition in the French telecom market.
• Reversal of the ongoing improvement in no-frills pricing.
51
(44-20) 7134-4725 17 April 2024 JPMORGAN
Orange SA: Summary of Financials

Income Statement FY22A FY23A FY24E FY25E FY26E Cash Flow Statement FY22A FY23A FY24E FY25E FY26E
Revenue 43,471 44,122 40,116 40,424 40,766 Cash flow from operating activities 11,332 11,404 10,468 10,641 10,778
o/w Depreciation & amortization 7,035 7,312 6,022 5,886 5,779
Adj. EBITDA 12,963 13,034 12,025 12,320 12,501 o/w Changes in working capital (284) 319 10 (50) (20)
D&A (7,763) (7,105) (5,996) (5,884) (5,663)
Adj. EBIT 4,801 4,966 5,529 6,236 6,638 Cash flow from investing activities (8,317) (7,301) (6,561) (6,289) (6,202)
Net Interest (920) (1,205) (988) (993) (965) o/w Capital expenditure (7,336) (6,780) (6,061) (5,986) (5,949)
Adj. PBT 3,881 3,761 4,540 5,243 5,674 as % of sales 16.9% 15.4% 15.1% 14.8% 14.6%
Tax (1,264) (871) (1,226) (1,363) (1,475)
Minority Interest (471) (451) (318) (318) (318) Cash flow from financing activities (3,086) (4,821) 1,725 (3,789) (3,944)
Adj. Net Income 2,146 2,642 2,997 3,562 3,881 o/w Dividends paid (1,861) (1,862) (1,941) (2,021) (2,101)
o/w Shares issued/(repurchased) - - - - -
Reported EPS 0.81 0.99 1.13 1.34 1.46 o/w Net debt issued/(repaid) - - - - -
Adj. EPS 0.81 0.99 1.13 1.34 1.46
Net change in cash (70) (717) 5,634 564 632
DPS 0.70 0.72 0.75 0.78 0.81
Payout ratio 86.7% 72.5% 66.6% 58.2% 55.5% Adj. Free cash flow to firm 3,057 3,409 3,638 3,872 4,065
Shares outstanding 2,658 2,659 2,659 2,659 2,659 y/y Growth 39.5% 11.5% 6.7% 6.4% 5.0%
FCFE 2,627 2,839 2,875 3,049 3,238
Balance Sheet FY22A FY23A FY24E FY25E FY26E Ratio Analysis FY22A FY23A FY24E FY25E FY26E
Cash and cash equivalents 6,004 5,618 10,072 9,388 8,793 EBITDA margin 29.8% 29.5% 30.0% 30.5% 30.7%
Accounts receivable 6,305 6,013 6,013 6,013 6,013 EBIT margin 11.0% 11.3% 13.8% 15.4% 16.3%
Inventories - - - - - Net profit margin 4.9% 6.0% 7.5% 8.8% 9.5%
Other current assets 14,494 13,611 13,601 13,651 13,671
Current assets 26,803 25,241 29,686 29,051 28,476 Net debt/Equity 0.9 0.9 0.7 0.7 0.6
PP&E 31,640 33,193 33,220 33,286 33,399 Net debt/EBITDA 2.3 2.5 2.3 2.2 2.1
LT investments 51,207 51,617 47,656 47,895 48,222
Other non current assets 0 0 0 0 0 Interest cover (x) 14.1 10.8 12.2 12.4 13.0
Total assets 109,650 110,052 110,561 110,232 110,097 Tax rate 32.6% 23.2% 27.0% 26.0% 26.0%
Short term borrowings 14,756 15,036 14,377 13,728 13,109
Payables 9,646 9,759 9,759 9,759 9,759 Revenue y/y Growth 2.2% 1.5% (9.1%) 0.8% 0.8%
Other short term liabilities 4,821 5,731 5,731 5,731 5,731 EBITDA y/y Growth 3.2% 0.5% (7.7%) 2.5% 1.5%
Current liabilities 29,223 30,526 29,867 29,218 28,599 EPS y/y Growth 826.9% 23.1% 13.4% 18.9% 8.9%
Long-term debt 38,831 37,634 37,334 36,004 34,604
Other long term liabilities 6,640 6,793 6,793 6,793 6,793
Total liabilities 74,694 74,953 73,994 72,015 69,996
Shareholders' equity 31,783 31,825 33,280 34,921 36,801
Minority interests 3,172 3,274 3,287 3,296 3,300
Total liabilities & equity 109,649 110,052 110,561 110,232 110,097
BVPS 11.96 11.97 12.51 13.13 13.84
y/y Growth (1.8%) 0.1% 4.6% 4.9% 5.4%
Net debt/(cash) 30,248 31,950 27,195 26,549 25,744
Note: € in millions (except per-share data).Fiscal year ends Dec. o/w - out of which
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Bouygues: Summary of Financials

Income Statement FY22A FY23A FY24E FY25E FY26E Cash Flow Statement FY22A FY23A FY24E FY25E FY26E
Revenue 44,322 56,017 57,185 58,367 59,662 Cash flow from operating activities 2,978 5,376 4,242 5,014 5,251
o/w Depreciation & amortization 2,033 2,496 2,296 2,422 2,279
Adj. EBITDA 3,936 4,545 4,762 5,183 5,546 o/w Changes in working capital (606) 1,148 (400) 0 0
D&A (1,974) (2,237) (2,236) (2,362) (2,219)
Adj. EBIT 1,962 2,308 2,526 2,820 3,327 Cash flow from investing activities (8,631) (2,327) (2,513) (2,410) (2,414)
Net Interest (225) (337) (334) (338) (357) o/w Capital expenditure (2,088) (2,117) (2,469) (2,367) (2,370)
Adj. PBT 1,555 1,748 1,922 2,262 2,780 as % of sales 4.7% 3.8% 4.3% 4.1% 4.0%
Tax (424) (547) (624) (734) (901)
Minority Interest (158) (161) (168) (184) (213) Cash flow from financing activities 4,853 (3,402) (1,790) (3,795) (3,539)
Adj. Net Income 973 1,040 1,131 1,344 1,666 o/w Dividends paid 0 (646) (647) (680) 0
o/w Shares issued/(repurchased) (283) (183) 0 0 0
Reported EPS 2.55 2.75 3.02 3.59 4.45 o/w Net debt issued/(repaid) - - - - -
Adj. EPS 2.55 2.75 3.02 3.59 4.45
Net change in cash (832) (411) (61) (1,191) (701)
DPS 1.80 1.90 1.90 3.80 3.80
Payout ratio 70.6% 69.1% 62.9% 105.9% 85.4% Adj. Free cash flow to firm 265 2,503 988 1,861 2,074
Shares outstanding 382 378 374 374 374 y/y Growth (75.4%) 843.0% (60.5%) 88.3% 11.4%
FCFE 92 2,254 694 1,564 1,765
Balance Sheet FY22A FY23A FY24E FY25E FY26E Ratio Analysis FY22A FY23A FY24E FY25E FY26E
Cash and cash equivalents 5,736 5,548 9,968 8,778 8,076 EBITDA margin 8.9% 8.1% 8.3% 8.9% 9.3%
Accounts receivable 9,573 9,700 10,100 10,100 10,100 EBIT margin 4.4% 4.1% 4.4% 4.8% 5.6%
Inventories - - - - - Net profit margin 2.2% 1.9% 2.0% 2.3% 2.8%
Other current assets 14,154 13,709 9,228 9,228 9,228
Current assets 29,463 28,957 29,296 28,106 27,404 Net debt/Equity 0.5 0.4 0.1 0.3 0.3
PP&E 9,187 9,365 9,539 9,483 9,574 Net debt/EBITDA 1.9 1.4 0.4 0.6 0.7
LT investments 21,945 22,424 23,021 23,630 24,249
Other non current assets 0 0 0 0 0 Interest cover (x) 17.5 13.5 14.3 15.3 15.6
Total assets 60,595 60,746 61,856 61,218 61,228 Tax rate 27.3% 31.3% 32.4% 32.4% 32.4%
Short term borrowings 1,779 1,173 1,173 1,173 1,173
Payables 11,116 11,006 11,006 16,751 15,071 Revenue y/y Growth 17.9% 26.4% 2.1% 2.1% 2.2%
Other short term liabilities 17,022 18,178 18,178 16,178 16,178 EBITDA y/y Growth 7.3% 15.5% 4.8% 8.8% 7.0%
Current liabilities 29,917 30,357 30,357 34,102 32,422 EPS y/y Growth (13.5%) 7.9% 9.8% 18.9% 24.0%
Long-term debt 11,586 10,644 10,644 10,644 10,644
Other long term liabilities 5,160 5,633 5,633 6,133 6,633
Total liabilities 46,663 46,634 46,634 50,879 49,699
Shareholders' equity 12,212 12,408 13,431 8,434 9,483
Minority interests 1,720 1,704 1,791 1,906 2,046
Total liabilities & equity 60,595 60,746 61,856 61,218 61,228
BVPS 32.61 33.13 35.87 22.52 25.32
y/y Growth 11.9% 1.6% 8.2% (37.2%) 12.4%
Net debt/(cash) 7,629 6,269 1,849 3,039 3,741
Note: € in millions (except per-share data).Fiscal year ends Dec. o/w - out of which
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Analyst Certification: The Research Analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple Research Analysts
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Important Disclosures
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SA, Bouygues, Altice France.
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BOUYGUES. Such transaction has been made public and is subject to regulatory approvals. This research report and the information contained
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Date Rating Price (€) Price Target

(€)
05-May-21 N 10.44 13
14-Jan-22 N 9.88 12
18-Feb-22 N 10.93 12.5
20-Mar-22 NR 10.54 --
Date Rating Price (€) Price Target

(€)
26-Apr-21 OW 34.57 45
13-Aug-21 OW 33.82 51
12-Oct-21 OW 34.87 50
01-Dec-21 OW 29.95 48
14-Jan-22 OW 32.75 47
25-Feb-22 OW 31.10 48
20-Apr-22 OW 31.48 47
29-Jun-22 OW 30.65 44
05-Sep-22 OW 29.59 43
01-Dec-22 OW 29.56 42
05-Jan-23 OW 29.27 44.5
26-Apr-23 OW 32.02 47
04-Dec-23 OW 35.05 49
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated
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Coverage Universe: Dattani, Akhil: BT Group (BT.L), Bouygues (BOUY.PA), Cellnex (CLNX.MC), Deutsche Telekom (DTEGn.DE),
Eutelsat (ETL.PA), Inwit (INWT.MI), Liberty Global (LBTYA), NOS (NOS.LS), OTE (OTEr.AT), Orange SA (ORAN.PA), Proximus
(PROX.BR), SES (SESFd.PA), Sinch (SINCH.ST), Telecom Italia (TLIT.MI), Telecom Italia (Savings) (TLITn.MI), Telefonica (TEF.MC),
Telefónica Deutschland (O2Dn.DE), Telekom Austria (TELA.VI), Truecaller (TRUEb.ST), Vodafone (VOD.L)
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59

2024-04-17-ORAN - PA-PriceTarget Research-ORANGE Investment Status Report-107661749

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107661749 ORANGE Investment Status Report 2 - 11

OVERALL RATING POSITIVE

ORANGE PEER LIST

ORANGE’s financial strength is low. Financial strength rating is 26.

ORAN Rank Relative to Universe (100=Highest)

Copyright % 2024 Price Target Research LLC

2022 NON– DEBT EQUITY DECREASE

Other Income (Exp) Net Fixed Assets

Non–Recur Exp (BT) LT Assets

Group Upper Quartile

a very small overall

most years, ORANGE was 3% 3%

in the top quartile and 0% 0%

ORANGE is upper quartile Median

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REVENUE E.P.S. TOTAL ASSET COMMON EQUITY CONSENSUS

Group, ORANGE’s historical

growth measures are generally

asset growth (1.5%) has been at –1%

(16.0%) is upper quartile.

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ASSET TURNOVER, X’s 20% PRETAX MARGIN, % 20% 9% PRETAX ROA, % 9%

ORANGE’s assets declined 0.8X 0.8X 12%

Reinforcing this trend, pretax 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23

recovery after the 2021 low. 30%

leverage) had a very small 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23 13 14 15 16 17 18 19 20 21 22 23

Operating performance OPERATING

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Through February, 2024, with 12% 12%

lower quartile current 5–year 8% 8%

total return of 0.8% relative to 4% 4%

S&P 500 Composite, 0%

Group. 5 Year Periods Ending December 31

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ENTERPRISE ENTERPRISE PRICE/ ENTERPRISE PRICE/

ORAN = NA ORAN = NA ORAN = NA ORAN = NA ORAN = NA

7.00X 30.00X 40.00X 3.25X 8.00X

1.00X 8.00X 8.00X 0.50X 1.00X

Copyright % 2024 Price Target Research LLC

decrease in the price/equity multiple. $0.45

the price/equity multiple, one has a $0.25

The forecasted increase in return on $0.15

forecasted increase in cost of equity has $0.05 $1.0

an estimated value of existing assets of $23 and a value of future $5 $5

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Rating Methodology (Continued)

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Equity Ratings and Price Targets

Orange: Financial Snapshot

Table 3: Orange - Revenue breakdown Table 4: Orange - EBITDA breakdown

Table 5: Orange - Guidance vs JPMe

Bouygues: Financial Snapshot

Table 8: Bouygues – Revenue breakdown Table 9: Bouygues – EBIT breakdown

Table 10: Bouygues – JPMe vs Consensus

Altice: Financial Snapshot

Figure 1: Altice France – Debt maturity schedule

Introduction: French Telco market

Figure 4: French Telcos – A breakdown of industry capex spend

Reported Other + off BS

Altice in focus: Last year, Altice France committed to relatively creditor-friendly

Orange Bouygues Altice Iliad Orange Bouygues Altice Iliad