Orange increases annual projections due to the deal in Spain and growth in Africa.

      On Tuesday, Orange increased its financial projections for the full year after achieving record growth in the first half and fully consolidating its Spanish operations for the first time. The French company now anticipates its EBITDAaL, the key profit metric closely monitored in the industry, to exceed 4% growth by 2026, an upgrade from its previous expectation of above 3%. Additionally, it raised its organic cash flow target for the telecom division to approximately €4.3 billion, up from around €4 billion.

      This revision was driven by two main factors that had been gaining momentum throughout the year: rapid growth in Africa and the Middle East, and the integration of its Spanish business, where market consolidation has resulted in fewer owners among Spanish operators. As a result, first-half revenue rose by 3.5% to €20.9 billion, and EBITDAaL increased by 5.0% to €6.1 billion, both marking record achievements for that period.

      Net income reached €3.6 billion, while adjusted net income, excluding one-off items, grew by 11.8% to €1.35 billion. The group’s organic cash flow amounted to €2.2 billion, an increase of €497 million compared to the same period last year.

      The growth in Africa and the Middle East was particularly significant, with revenue rising by 13.9% and EBITDAaL by 16.1%, significantly outpacing France, where revenue only increased by 1.2%. This region has emerged as Orange’s most prominent growth area, driven by mobile data and Orange Money, its mobile financial services division, which operates in over a dozen markets, reflecting the broader momentum of African technology development. This region is evolving into a substantial counterbalance to Orange’s mature and gradually evolving European base.

      In France, which remains Orange’s largest market, growth has been slower yet steady, with EBITDAaL increasing by 2.4% driven by fiber and convergent packages that combine mobile and broadband services. Although the domestic market no longer dictates growth, its return to moderate profit growth has instilled confidence in management to raise full-year expectations without relying solely on Spain and Africa.

      Spain plays a newer role in the overall strategy. Earlier this year, Orange agreed to acquire the remaining 50% of MasOrange, the largest operator in the country, from the investment group Lorca for €4.25 billion. The European Commission approved the deal in April, and it closed in June, allowing Orange to fully consolidate the business rather than reporting it as a joint venture.

      MasOrange was formed in 2024 through the merger of Orange’s Spanish segment and rival MásMóvil, rapidly becoming the leading operator in the country by subscriber count. This development impacts reported financials; in June, the first month of full consolidation, Spanish EBITDAaL rose by 2.2%, and a complete year of MasOrange within the financial statements is expected to significantly boost Orange’s results into 2027.

      The Spanish market was previously characterized by intense competition and heavy discounts prior to the merger, so the improvement is as much about stabilizing prices as it is about increased scale. With MasOrange boasting the largest customer base in Spain, Orange can now capture the entirety of the merger synergies without sharing them.

      However, the reported growth this year is partly reflective of the integration of a larger business rather than accelerated underlying performance, a nuance highlighted in the group’s organic figures.

      In other regions, Orange’s European operations outside France, bolstered by strong performance in Belgium, saw revenue grow by 4.1% and EBITDAaL by 6.1%. Capital expenditure remained disciplined at around 15% of revenue as European 5G networks continue to mature, and new satellite connectivity solutions begin to penetrate the market.

      CEO Christel Heydemann remarked that the record results for the first half confirm that the company's ambitions are “rooted in solid execution.” Orange announced a 2026 dividend of €0.79 per share, with an interim payment of €0.30 scheduled for December 3, and reaffirmed its eCAPEX to revenue ratio of approximately 15%, indicating a commitment to controlled network spending.

      Whether these improved targets are met will depend on maintaining double-digit growth in Africa and the successful integration of Spain, with further insights expected with third-quarter results in the fall.