Orange Earnings: France Holding Up Well Despite Increased Promotional Activity

No-moat Orange reported third-quarter revenue of 9.99 billion and EBITDAaL of 3.34 billion, a 1.6% and 2.7% year-over-year growth, respectively. Results were a touch ahead of FactSet consensus and firmly on track to achieve the firm's 2024 guidance of low-single-digit growth in EBITDAaL. France stood out positively this quarter, growing revenue 1.3%. organically. Although Iliad and SFR have recently increased their promotional activity, Orange is holding up well so far. Both Iliad and SFR have launched cheaper plans in the lower end part of the market, where customers are more price sensitive. Management said its response to this threat is to make an effort to try to retain customers, which is manifesting in low churn rates. SFR has launched some converged price promotions, but Orange's France converged grew 4.6% year on year, mainly driven by price increases of 5.3%. With no changes to our estimates, we maintain our EUR 13.40 fair value estimate.