The Orange board of directors accepted, on the evening of Wednesday November 24, the resignation of its CEO Stéphane Richard. This will be effective on January 31, 2022. In the morning, the Paris Court of Appeal sentenced the boss of the French telecoms operator to a one-year suspended sentence and a € 50,000 fine for complicity in the misappropriation of property. public. And this within the framework of the controversial arbitration of 2008 (Stéphane Richard was then chief of staff of the Minister of the Economy Christine Lagarde) which had granted 403 million euros to Bernard Tapie to settle his dispute with the Credit Lyonnais on the sale of Adidas in 1992.
The CEO, who will therefore not stand for his succession as president with two-headed management, was released from the charge of complicity in fraud and announced that he planned to appeal to the Supreme Court.
An assessment to be qualified
Almost eleven years after his appointment as CEO of Orange in early 2011 (then still known as France Telecom), the HEC and ENA graduate will leave behind a shared record. The group, in which the French state is an almost 23% shareholder (through the participation of the government and Bpifrance), has never seen its share take off sustainably over the period, which has also not been tender with telecom operators.
Like Patrick Drahi at Altice and Xavier Niel at Iliad, who both withdrew their company from the stock market this year, Stéphane Richard believes that the markets undervalue his group. In particular because of the heavy investments to be made for the deployment of 5G and optical fiber, but also of increased competition from Gafam in the telecoms field. The fact remains that after peaks of € 16 in 2015 and 2016, the Orange title is now worth less than € 10. Its market capitalization is just over 26 billion euros, while that of Deutsche Telekom, rare telecoms to resist, exceeds 84 billion euros.
Failures: Djingo, Orange Bank …
During his three terms at the head of Orange, Stéphane Richard will not have managed to really diversify Orange’s activities either. The connected speaker Djingo, unplugged in March 2021, for example experienced a resounding failure. Then, Orange Bank, whose operator recently bought the remaining shares of Groupama, for lack of having found a new shareholder, is still far from being profitable. Online banking now has 1.6 million users, according to figures from the group. But the losses accumulated since its launch in 2017, in the order of 750 million euros, are considerable. Not a year has passed without the establishment escaping financial support.
This year, Orange was also marked by the breakdown of emergency numbers, which caused the loss of 11% of calls made to 15, 17, 18 and 112 on June 2, 2021 – leading to several dramatic situations. Then, despite an increase in turnover of 1.5% to 20.9 billion euros, Orange recorded 2.6 billion euros in net losses in the first half of 2021. This is mainly due to the Spanish market , where the group claims to undergo “deterioration of the competitive market environment” and the “persistence of the health crisis which is delaying the economic rebound”.
However, successes are to be noted. The latest, Orange’s very good record in terms of the quality of mobile services. The Regulatory Authority for Electronic Communications, Posts and Press Distribution (Arcep) recently crowned Orange in this segment, in particular for the deployment of 5G.
In addition, Orange was in the summer of 2021 the leading fiber optic internet service provider in France with more than 5.2 million customers, ahead of SFR (3.6 million, a large part of which with coaxial termination), Free (3.3 million) and Bouygues Telecom (1.9 million).
Stéphane Richard can also congratulate himself on having led a group that has created a technological nugget specializing in cybersecurity: Orange Cyberdefense. According to Challenges, the subsidiary, which however loses its managing director Michel Van Den Berghe, was valued at 2 billion euros in 2020 with a turnover of 750 million euros.
Finally, Orange is experiencing good performance in its Africa business, “main engine of growth” of the group, according to its latest financial results. On this continent, revenues were up 12% in the third quarter, driven in particular by mobile data, “a booming activity”, pointed out Orange. Today, the operator claims more than 40 million 4G customers, 33.6% more than last year.
After the departure of Stéphane Richard, the trail of governance made up of a CEO recruited internally and a president from outside, as the State would like, seems to be emerging.
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