Orange Overdelivers in First Half of 2025; Fair Value Estimate of EUR 14.30

Orange operates in several countries, but its strongest region is France, where it enjoys a comfortable position as the incumbent operator and has good relationships with the government, which owns 23% of the company. Orange's strategy in France is simple: Try to defend market share from competitors, especially the Iliad, which is the most aggressive. Orange normally offsets slight customer losses with low-single-digit price increases, maintaining revenue flattish. Orange has been the main installer of fiber-optic cables in France, which results in better unit economics for the company in the long term as the payment scheme set by French regulators favors players that took more risks in the buildout phase. Orange has maintained a relatively stable market share in the mobile segment for the past decade but with shrinking average revenue per user caused by Iliad’s entrance, which has pruned the company’s revenue over time. Over the past decade, Orange has maintained its EBITDA margins in France, offsetting low revenue growth with cost reductions. We expect this strategy to continue in the future.