Orange Belgium S.A.
Avenue du Bourget 3,
1140 Brussels
Belgium
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www.orange.be
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Annual Report
Orange Belgium 2021
Orange Belgium
Orange Belgium is one of the major telecommunication
operators on the Belgian market, with over 3 million
customers, and in Luxembourg, via its subsidiary Orange
Communications Luxembourg.
As a convergent player, it provides next generation
connectivity services to residential and business customers
through multi-gigabits mobile, cable and optic ber
networks, also relating to the Internet of Things. Its high-
performance mobile network is equipped with the latest
technologies and benets from continuous investments
preparing for the arrival of 5G. As a responsible operator,
Orange Belgium is also investing to reduce its ecological
footprint and promote sustainable and inclusive digital
practices.
Orange Belgium is a subsidiary of the Orange Group, one
of the main operators in Europe and Africa for mobile
telephony and internet access and a world leader in
telecommunication services for companies.
Orange Belgium is listed on the Brussels Stock Exchange
(OBEL).
full-time
equivalents
million mobile
postpaid customers
million € EBITDAaL (+9.1%)
Key figures
2021
1,321
2.74
353.0
945.1
million € retail
service revenues
(+4.3%)
Eco SIMs
distributed
cable
customers
usage of
Volunteering days
by employees
collection of old
devices via BuyBack
+200%
+200%
394,000
5G Labs
2
250,000
© 2021, Orange Belgium, all rights reserved. Orange is a registered
trademark. The trademarks of commercial products mentioned in
this document are registered and are the property of their various
manufacturers. The characteristics of the products and services mentioned
in this document may be changed at any time without notice. Orange
Belgium cannot be held liable for printing errors in this document. The
products of other manufacturers are mentioned for information. The
manufacturers are solely liable for any and all warranties concerning their
products. Orange Belgium cannot be held liable under any circumstances
for data transmission services, nor for the content, legality or accessibility
of these services, nor for the use made of them by the customer, whether
these services are provided by third parties or by Orange Belgium.
Ce rapport annuel est également disponible en français.
Dit jaarverslag is ook verkrijgbaar in het Nederlands.
Shareholders and investors relations
ir@orange.be
Press relations
press@orange.be
Responsible editor
Paul-Marie Dessart – Secretary General
Concept & layout
ChrisCom
Orange Belgium S.A.
Avenue du Bourget, 3,
BE-1140 Brussels – Belgium
T. +32 2 745 71 11 – www.orange.be
RCB 599 402 – TVA BE 0456 810 810
Contents
table
02
Highlights 2021
03
Letter of the Chairman
04
Our strategy
06
Market Context
08 Putting digital at the heart of our
customer relations and relying on
strong brands
12
Providing next-generation
connectivity
16
Proud to be a responsible operator
and employer
22
Orange Luxembourg
24
Management Report
37
Financial Statements
104
Corporate Governance
Statement
Annual report 2021
1
May
Orange Group’s tender offer on
the shares of Orange Belgium was
closed after the Group reached a
76,97% stake in its capital.
July
After the massive oods that hit some regions in
the country, Orange Belgium launched a national
campaign to collect and redistribute goods for the
victims. It also directly donated more than 10 tons
of material support and electronic hardware.
October
• Orange Belgium launches, as
the second European country,
Orange Money to facilitate
national and international money
transfers.
• The operator opens its
rst 5G Lab in Antwerp, to
allow companies to test the
possibilities of the technology,
and reveals new use cases.
December
Orange Belgium signs an
agreement with Nethys to acquire
75% minus one share in the cable
operator VOO.
August
Orange Belgium enriched its offer for convergent
customers with the launch of Orange TV Lite, a
service which allows viewers to stream up to 20
television channels to their smartphones, tablets and
PC’s, including Google Chromecast’s casting feature,
without a decoder.
November
The ultra-popular Go
Unlimited subscription
is revamped into
Go Extreme with a
clear focus on data
abundance, offering
60GB of mobile data
for 40 euros.
Highlights
2021
September
The Belgian market is shaken up by the launch
of hey!, Orange Belgium’s 100% digital b-brand
aimed at ultra-connected customers.
Annual report 2021
2
Letter
of the
Chairman
2021 will remain as a key year in Orange
Belgium’s now 25 year-long history. The
telecom industry has once again demonstrated
its relevance by proving to be essential for
society during the pandemic, as it has been a
key enabler for teleworking but also allowed
crowd monitoring and contact tracing,
two major weapons in the ght against
Covid-19. Performant telecom solutions and
-technologically and nancially- robust telecom
providers have proven to be essential for the
future of society.
As a Chairman, I can’t stress enough how
thankful and proud I am of our teams, but also
their families, for their restless commitment and
enormous contribution in challenging times. They
spared no efforts to always help and serve our
customers in the best possible way, which is the
core of our company culture, our DNA.
We’re now actively preparing for the future.
Theroll-out of 5G will allow us to go even further
into network performance and reliability, both
of which are essential for providing the best
possible experience and innovative services
to our customers. We will also strengthen our
position and effort on the convergent market:
itshowed to be a great success already, but we
will now be able to consolidate our position to
become an important actor on xed connectivity
services. The deal we reached with Nethys will
help us in this endeavor and could radically
change the telecom landscape in Belgium.
We’re also deepening the digitalization of our
internal processes and of our interactions with
the customers, to better anticipate and serve
their needs in the future. It already allowed us
to launch disruptive value propositions to better
segment the market, like we did with the launch
of hey!.
Like everything we do, all these moves are
always considered in a long-term perspective
with one key principle always in mind:
sustainability. Sustainability not only for our
environmental impact: we act in a responsible
way and we serve in a balanced and sustainable
way all our stakeholders: customers, employees,
shareholders, the environment…
We contribute to shape, not only the market, but
the society we’re in.
And in 2022, we’ll just keep doing that, to really
become a strategic, innovative, and responsible
leader.
Thankfully yours,
Johan Deschuyffeleer
As a Chairman, I
can’t stress enough
how thankful and
proud I am of our
teams, but also their
families, for their
restless commitment
and enormous
contribution in
challenging times.
Johan Deschuyffeleer
Chairman of the Board
Dear team members,
shareholders, partners
and customers,
Annual report 2021
3
2021 was an important year for Orange: many projects
came to fruition, including the launch of Orange
Belgium’s new brand hey! and the signing of an
agreement with Nethys to acquire 75% minus one
share of VOO. Throughout the year, the focus was
put on four key pillars: putting digital at the center of
the interactions with the customers and of the offers,
providing next-generation connectivity thanks to multi-
gigabit infrastructures (be it on xed or mobile), relying
on a strong brand generating value for the company
and being committed to act as a responsible operator
and employer. We reached signicant milestones on
all of them: the further digitalization of our processes
and the launch of hey!, the further development of 5G
with the opening of two 5G Labs, the consolidation of
the Orange brand’s positioning via its success on the
convergent market, and the launch of several initiatives
to boost the company’s CSR commitment.
2021 has therefore paved the way for the operator’s
new market positioning. The strategic ambition for
the coming years can be summed up as follows: to
become a next generation operator, a sustainable and
committed actor, driven by a repositioned Orange
brand, rst-class technological expertise and major
growth drivers.
The Orange Ahead strategic plan aims to achieve
operational excellence in four strategic areas: focus
on customer experience, growth, efciency and
responsibility.
Focus on the customer experience
Orange’s mission is to connect its customers to what
matters most to them by delivering an unparalleled
experience every day, through enriched connectivity
and services that enable them to enjoy highly
qualitative and reliable services. To achieve this
objective, the strategic plan puts as rst priority to be
“best in class” in all its core activities.
Our strategy
Capitalizing on the successes of its
previous plan Bold Inside, Orange
Belgium has now developed a new
strategy, more tting to its new status on
the market and its objective to become a
next generation operator: Orange Ahead,
#TheFutureIsOursToMake.
Orange Belgium is reinventing its customer
relationship through a phygital strategy and the
multiplying of its digital touchpoints with customers:
a unique interactive, omnichannel experience that
combines physical in-store and digital experiences.
Orange customers enjoy personalized service in stores
while hey! offers the best of digital and the customer
is in the driver’s seat. And thanks to their respective
innovations, the two brands are bound to enrich
each other, considering hey!’s innovations like the
chatbot will also benet, when relevant, to Orange’s
customers. The success of a broader digitalization
of its touchpoints is already visible with the ever-
increasing share of digital sales, and will even further
grow thanks to the future possibility to subscribe to
convergent offers via a fully digital process.
The objective is to become a next generation operator
in order to offer customers an enriched connectivity
that is more efcient in all respects, borderless and
more ecological.
While the Orange brand will focus on convergence,
enriched content and families, hey! focuses more
on mobile with a strong value proposition based on
4 pillars: 100% digital, low impact, generous and
evolutive. On the B2B market, where convergence is
also becoming bigger and bigger, Orange Belgium
supports its customers’ transformation by offering new
ways of working and putting technology at the service
of transformation projects, thanks to the launch of
new innovative services. The company will also work
on an increased integration of BKM and a growing
collaboration with other afliates from the Orange
Group such as Orange Cyberdefense, for instance, in
order to approach customers with a complete service
offer. The realization of the RAN-sharing agreement
with Proximus, which was really kicked-off in 2021,
will also further improve the performances but also the
energy-efciency of the network, to the benet of all
customers.
Growth
True to the Orange brand DNA, Orange Belgium
accelerates its growth by combining the excellence of
its networks, a segmentation that responds to market
and regional specicities, and responsible innovation.
Capitalizing on the expertise of the Orange Group,
the operator also intends to reinvent its business by
Annual report 2021
4
offering increased connectivity thanks to 5G
and strengthening its leadership in multi-gigabit
broadband infrastructures.
More broadly, Orange Belgium is adopting a
segmented approach to meet the needs of its
customers across all market segments: Orange,
the more premium brand, focuses on the top
end of the market with a portfolio of offers
enriched with value-added services, while hey!
offers an excellent alternative for the most digital
customers.
While maintaining its role and ambition as a
national operator, the operator is determined
to work more closely with the regions, taking
into account their specic socio-demographic,
cultural, territorial and political characteristics.
Efficiency
In order to guarantee an optimal quality of
service, it is essential to set high quality
standards in the way Orange Belgium operates,
both in terms of its employees, its tools and its
partners. First-class operational efciency will
enable the company to be even more effective,
agile and sustainable.
To further support the brand promise, Orange
will use state-of-the-art technology to prevent
and reduce incidents structurally over time
and will increase efciency upstream by tighter
partnerships with its suppliers.
Strengthening Orange’s efciency will also be
accelerated by 1) transforming IT and networks,
2) putting Data and AI at the heart of the
innovation model allowing to offer a reinvented
customer experience, 3) smarter networks and
better operational efciency and 4) the Orange
Group’s innovative strength.
Responsibility
Orange is responsibly committed to its
employees, customers and society in order to
build tomorrow’s society together.
There can be no economic performance
without social and environmental exemplarity.
Technological progress will not be socially
acceptable if it is not accessible to all; in
this respect, digital inclusion is an important
part of Orange’s commitment to society, as
demonstrated by the opening of an Orange
Digital Center in 2022. But Orange Belgium also
strives to reduce its environmental impact by
working hard on CO
2
emissions (the company is
already CO
2
neutral for its operations & mobility),
energy consumption, reducing of waste,… and
the promotion of sustainable practices on the
market as demonstrated by the launch of SIM
cards made of entirely recycled plastic, the
great success of the Buyback program for the
recycling or reuse of old phones, and the launch
of an Eco Rating, which will allow customers to
make educated choices and opt for the most
sustainable devices available.
By regrouping the transformational programs
of the company, we will structurally change our
business or operational model to become a “next
generation operator”.
This paves the way to become a national
multigigabit network operator for both xed and
mobile, anchoring Orange Belgium once and for
all in the Belgian telecom landscape.
Xavier Pichon
CEO of Orange Belgium
Our ambition: to
become a next
generation operator,
a sustainable
and committed
champion, driven
by a repositioned
Orange brand, first-
class technological
expertise and major
growth drivers.
Annual report 2021
5
2021 will clearly remain as a major
year in Orange Belgium’s history.
Not only was it the 25
th
birthday of
the creation of the company, the
late Mobistar, it also saw some key
launches and the concretization
of structural moves which will be
instrumental to the future of the
company.
“On a purely nancial perspective, 2021 really
has been a great year. Orange Belgium reached
extremely good operational and nancial perfor
-
mances, which distinguish it not only from the
national competition but also clearly set up an
example at the European level”, explains Xavier
Pichon, CEO of Orange Belgium. The year 2021
has also been marked by two major operations
which requested a lot of attention of Orange
Belgium’s teams. First, there was the offer from
the Orange Group, which expressed its intention
to buy the Orange Belgium’s shares it didn’t
have.This move underlined the Group’s will to be
a long term actor on the Belgian market. Orange
Belgium strictly respected its obligations as a
target company and the operation resulted in the
Orange Group reaching a 76.97% stake in the
company’s capital (reduced to 76.97% after the
cancellation of own shares in July 21).
A pivotal year
The second major move was Orange Belgium
reaching a binding agreement with Nethys
on the sale of a majority stake (75% less one
share) in VOO. An operation, which still needs to
be authorized and validated by the competi
-
tion authorities, “but which would change the
dynamics and restore balance on the Belgian
telco market and landscape, allowing Orange
Belgium to become a fully armed national com
-
petitor to Proximus and Telenet, by its leverage
on the owning of a local xed infrastructure”,
adds Xavier Pichon. However, this move is still
subject to approval and will therefore remain a
major topic in 2022.
The years 2021 and 2022 are also crucial to the
evolution of the telco landscape in Belgium, as
they are key on two major and closely related
topics: the auctions for radio spectrum and
the potential arrival of a 4
th
telco operator: the
rst guidelines of the spectrum auctions were
unveiled at the very end of 2021 and, if they
indeed foresee some reserved spectrum for a
potential new entrant, it does not guarantee the
arrival of such an operator. A scenario Orange
Belgium already qualied as not relevant,
considering the lack of economic space and the
potential impact such an arrival could have on
value creation and investments by the current
operators.
Market
context
400,000
cable customers
Annual report 2021
6
On a purely financial
perspective, 2021
really has been
a great year.
Orange Belgium
reached extremely
good operational
and financial
performances.
Growth, growth and growth
However, Orange Belgium already anticipated a
potential impact by launching hey!, a fully digital
B-brand which is aimed at digital-savvy custom
-
ers, looking for the best possible offer for real
data abundance. The new market segmentation,
where hey! focuses more on individuals, while
Orange Belgium holds a more “family/enriched
content” focus, is the best way to face an ever
more competitive market.
Thanks to a clear positioning and highly compet
-
itive prices, Orange Belgium further succeeded
in attracting convergent customers, B2B and
B2C, even trusting the whole overall growth of
this market and approaching the major milestone
of 400,000 cable customers.
On the mobile segment, the upgrade of the
Go Plus offer and the launch of Go Extreme,
Xavier Pichon
CEO of Orange Belgium
which offers real data abundance (60GB) helped
Orange Belgium further consolidate its market
share. This all, along with an important work on
the efciency of its processes and the digital
-
ization of its touchpoints with the customers,
allowed Orange Belgium to reach a signicant
growth of its EBITDAaL, to unseen levels in the
recent history of the company.
All in all, 2022 will also be a major year for the
telecom landscape as it will (nally) see the
long-awaited spectrum auctions, the roll out of
5G, the potential arrival of a 4
th
operator and the
conrmation of Orange Belgium’s as a national
operator with growing ambitions on the growth
on the mobile and xed markets.
Annual report 2021
7
Putting
digital at the
heart
of our customer
relations and relying on
strong brands
The former Mobistar, now Orange
Belgium, celebrated its 25
th
birthday in 2021: what would you
say remain from the original DNA
of the company?
Isabelle Vanden Eede:
The company has a long
and very rich history, but one thing remained
consistent: the clear willingness to do the
best for our customers, be it with disruptive
innovations such as the launch of prepaid in
Belgium or by shaking the market with highly
competitive offers. A few years ago, after
noticing a slight decrease in the quality of our
customer service, we re-instated it as a top
priority and it now impacts every single thing we
do, even for non-customer-facing operations
and processes: network, IT, … the customer
experience is at the center of it all.
Christophe Dujardin:
I think one of the
strengths of this company also has been
its commitment to offer tools and a level of
autonomy to its customers, by the mean of its
app and platform My Orange and the loyalty
program Orange Thank You. Something which
was actually recognized by the whole industry.
It offered, from the start, a great way for Orange
Belgium to care closely for its customers, and
it translated in a very high penetration of the
app – the highest within all the Orange Group
afliates. Moreover, the loyalty program offers
frequent opportunities for us to interact with our
customers, to grant them gifts, additional data
for birthdays, etc. It has also been a major step
towards the digitalization of the interactions with
the customers, offering them a lot of exibility
and allowing us to follow closely their new
habits.
2021 was the year the former Mobistar celebrated
its 25th birthday. A quarter of a century marked
by many successes and innovation, all to the
benet of the customers. Christophe Dujardin,
Chief Consumer Ofcer, and Isabelle Vanden Eede,
Chief Brand, Communication and CSR Ofcer, look
back with us on the unique positioning of Orange
Belgium toward its customers, and the way it
recently evolved to better meet their needs.
25%
market share on mobile
Annual report 2021
8
Will this focus on the digitalization
of the relationship with the
customers translate into new
projects in the future?
Christophe Dujardin:
Of course! We want to
increase the possibilities offered by My Orange
and Orange Thank You, by extending its scope
to convergent offers and offering more services
for families and not only individuals, for instance.
We will also work on our loyalty program
to further strengthen the real community of
customers it helps us create.
Does this impact the “regular”
customer service, when customers
simply call for help or support?
Christophe Dujardin:
In a way, yes it does,
because we see the number of calls decreasing
as customers can already nd many answers
in their app or on our website. But, like Isabelle
said before, our focus on customer experience
and digitalization also translates in a better
performing customer service, with our teams
able to rely on highly performing tools to offer the
best solutions to our customers in a much more
efcient way. It is clearly visible in KPI’s such as
the rst call resolution or the ratio of customers
who get in touch with someone from the
customer service within less than 2 minutes. The
satisfaction level of our customers also reached
levels which are higher than the objectives that
we had set. This new paradigm also allows us to
now use the customer service not only for “care”
purposes, but also as a growing sales channel,
something we didn’t do a few years back.
One of the major milestones
of 2021 was the launch of hey!,
the B-brand which is precisely
targeting more digital-savvy
customers. How does such a major
launch fit in the company’s overall
strategy?
Isabelle Vanden Eede:
Let’s rst put things in
perspective: our entrance on the convergent
market is a huge success, as we’re approaching
the 400,000 Love customers, and we also
managed to maintain and consolidate our
leadership on mobile customers, with more
than 25% market share. But we also identied
a segment of the market which was less served
by the offers available on the Belgian market:
individuals looking for a simple, digital and very
competitive mobile offer, with no convergence,
no options, no subsidy for devices. And as
these customers are able and willing to be
more autonomous in the handling of their
The company has a
long and very rich
history, but one thing
remained consistent:
the clear willingness
to do the best for our
customers.
Isabelle Vanden Eede
Chief Brand,
Communication and CSR
Ofcer
Annual report 2021
9
subscription, the costs we can avoid thanks to
these streamlined offers are translated in more
competitive prices and real data abundance.
Hey! is therefore a perfect complement for the
Orange brand. While the Orange brand focuses
on convergence, enriched content and families,
hey! focuses more on mobile and individuals,
with a strong value proposition based on 4
pillars: 100% digital, low impact, generous and
evolutive.
Christophe Dujardin:
Indeed. And here again,
the digital is key: with hey! we introduced an
online chat service, which allows clients to get
in touch with the customer service, but we
also introduced a similar service but which is
fully digitally handled, via a chatbot pumped
on articial intelligence. With hey! we’re really
creating a community of customers with whom
we’ll co-create the operator of the future: we’re
closely listening to their feedbacks in order to
even better understand and anticipate their
needs with new tools, experiments.
Isabelle Vanden Eede:
This dynamic we’re
creating with hey! will also have an impact on
the way the Orange brand operates: hey! is
pretty much our lab, and the innovations, such
as the chatbot, which will come out of it will also
benet, when relevant, to Orange customers.
You talked about enriching the
offers under the Orange flagship:
can you mention some milestones
of 2021?
Christophe Dujardin:
On mobile, we’re focusing
on data abundance and a signicant milestone
was the renaming of our Go Unlimited plan,
which is now Go Extreme and offers 60GB,
which is much more than what the competition
does today. But we also increased the data cap
on other subscriptions, such as the Go Plus
(from 8 to 10GB) and we will continue to adapt
our portfolio by increasing the data volumes to
meet the future needs of our clients.
On convergence, we decided to increase the
regular speed of internet connections, from
100 to 150Mbps and launched additional
services, such as Orange TV Lite, for customers
who don’t want or need a full TV package and
decoder, and also Orange Money – as the rst
European country outside France-, which is a
very useful service to send money to relatives in
other countries, and thus a great way to attract
yet another niche of customers, those from
the diasporas. Still on convergence, we’re also
enriching the TV experience with our brand-
new set top box, which integrates an internal
Chromecast and also native applications of
content providers such as Amazon, Streamz,
VRT, RTBF, etc.
60GB
Go Extreme offers real
data abundance
Annual report 2021
10
Isabelle Vanden Eede:
Through all these
moves, the goal always remains the same: stay
customer-obsessed, identify and meet their
needs. And we’ll keep doing this in 2022 and
beyond.
How does the brand keep its
consistency while extending its
scope of services?
Isabelle Vanden Eede:
The key word here
is segmentation. Thanks to an increased
segmentation of our approach of the market,
which is possible due to the larger market share
we now have, we can attract new customers
by reaching them with more specic services,
features or value propositions. This is what we
do with the launch of hey! for individuals and
digital-savvy customers. This is what we do
with the corridors Morocco and Congo for the
diasporas. This is what we do with Orange TV
Lite for customers who are not real cord-cutters
but also don’t need a full TV package, etc. Even
our communication towards the market is now
segmented with a differentiated approach from
one region to another.
Christophe Dujardin:
Indeed, we’re leveraging
the knowledge we’ve built and are still building
to approach the customers with tailor-made
offers, while staying extremely competitive on
prices. We had already made a similar move
by launching the football TV package in 2020,
but we’re now going much further. The launch
of hey! and those new services will also help
us getting even more information on the ever-
changing habits of the clients.
Isabelle Vanden Eede:
From a brand
perspective, the idea is to come to the market
with purely rational arguments and propositions
(price, quality of services, …) but also more
emotional ones. To show that there’s a purpose
to it all. And this is something we can achieve,
through the segmentation but also via other non-
commercial actions, such as our commitment
on CSR, which will be further detailed in another
chapter of this annual report, but that applies to
our commercial practices as well, as shown by
the success of the sale of refurbished devices,
of our BuyBack program. We can also rely on
the general strength of the Orange brand and its
international scope and recognition. Up until a
few years, we remained a kind of “middle-market
operator”, between the pure challenger and the
leader. By now assuming our new position on the
market, further build it, we are in a much stronger
position. And the take over of VOO, should it
be validated, will even further consolidate our
position on the Belgian market.
Javier Diaz Sagredo, Chief IT Officer of Orange Belgium,
comes back to us on the major internal changes
happening, which will have a significant impact on how the
company operates and the customer experience.
Javier, can you give us a view on the project you’re
working on and its objectives?
It is indeed a major project, which focuses on a full renewal of our IT infrastructure to let
it operate much more smoothly and generate significant gains in efficiency and internal
savings. In a nutshell, we’re streamlining our IT stacks to have the same system for
both B2C and B2B processes. It helps us rely on a more stable infrastructure, but also
reduces our time to market and the timing between a lead generation and the actual
delivery of the services.
How will this affect the customer experience?
The first impact will be internal, as this major switch streamlines our processes and will
allow to rely on the same, fast, reliable and strong system for both B2B and B2C. It will
therefore strengthen our CRM, help us better handling incidents but it also dramatically
increases the scope of services we can offer via our digital touchpoints, a key lever
to better serve ever more digital focused customers. From a customer perspective,
Orange Belgium’s support and commercial services will therefore be much more
reactive, agile and efficient.
We’re leveraging the
knowledge we’ve
built and are still
building to approach
the customers
with tailor-made
offers, while staying
extremely competitive
on prices.
Christophe Dujardin
Chief Consumer Ofcer
Annual report 2021
11
Providing next-generation
connectivity
How would you describe the
evolution of Orange Belgium’s
position on the B2B market in
2021?
Werner De Laet:
In 2020, we made a major
move by launching xed cable connectivity to
our B2B customers, with, as a rst target, the
SME segment via our Shape & Fix offers. But we
gradually introduced new services such as Cloud
Telephony, which allowed us to also attract the
mid-market and even some bigger accounts.
2021 was also the year our acquisition of BKM
started to really make a difference, as we were
able to address B2B customers ‘needs with
connectivity services on cable but also software-
dened services (SD-WAN), an innovative
combination which allows us to strengthen our
position on the market. On the innovation side,
we also launched the eSIM support for B2B
customers, which is quite a major step as the
demand was high and it simplies the managing
of a smartphone eet for our customers.
However, the pandemic forced a kind of pause
to the market: with many employees being
forced to work from home, companies often
considered it was not the best timing to change
from connectivity provider. Reason why, also,
we focused on extending the scope of services
we could offer to the corporate customers by
working closer with other afliates of the Orange
Group, such as Orange Business services,
Orange Cyberdefense or Business & Decision.
What was the impact of the
continuing pandemic context in
2021?
Werner De Laet:
While 2020 was marked
by a big and abrupt demand for connectivity
services and coaching, as companies were
forced to switch to teleworking overnight, we
had almost no strict lockdown in 2021, and
most companies were prepared. A good news
is that, thanks among others to the support of
public authorities, we didn’t observe a massive
wave of bankruptcies among our customers, like
we feared at the beginning of the crisis, and we
have no indications that this could happen in the
During 2021, Orange Belgium continued
to strengthen its technological leadership
by launching innovative services and
strongly investing in the upgrade of
its network infrastructures. Werner De
Laet, Chief Enterprise, Wholesale and
Innovation Ofcer, and Stefan Slavnicu,
Chief Technology Ofcer of Orange
Belgium come back for us on a year rich
in evolutions.
Annual report 2021
12
near future. Indirectly, we also noticed an impact
of the global shortage on chips supply, which
resulted in the delaying, but not the cancellation
of some projects we had with B2B customers.
How about 5G?
Werner De Laet:
It has been an interesting year
on 5G. We observed a major interest from the
market for our Start Walking 5G programs, in
which we accompany customers on the path
to innovation with 5G and let them test and
develop innovative and value-creating business
cases, using our 5G Stand Alone network in the
Port of Antwerp area. This dynamic reached its
summum with the opening, in October, of our
very rst 5G Lab in Antwerp. The Lab allows
any customer or stakeholder interested in 5G to
come and test the technology, discover and/or
co-develop use-cases. And we clearly noticed
a major interest, not only from businesses
but also from other stakeholders, such as
public authorities, mostly because this is the
only outdoor fully Stand Alone 5G network in
Belgium, which offers all the possibilities of the
technology. Considering the success of this
initiative, we decided to extend the project to the
Walloon region by launching a similar 5G Lab
in Liège, which will open in 2022 in the famous
La Grand Poste, a local hub for the digital and
creative economy.
Orange Belgium has also shown
quite some leadership on IoT and
M2M services: was 2021 a fruitful
year in that perspective?
Werner De Laet:
Yes, it was! First, our
smart parking solution attracted several new
customers, be it from the public sector, like
the municipality of Braine-l’Alleud, or from
the private sector such as the Waasland
shoppingcenter and Westland shopping center.
We also won -again- a major telco contract with
the national railway company (SNCB/NMBS),
which includes regular connectivity but also a
lot of IoT services, from the monitoring of the
locomotives to the devices used by the train
attendants to sell tickets.
What are your perspectives for
2022?
Werner De Laet:
We’ll further roll out 5G and
capitalize on the dynamic of our Start Walking
5G programs, which offer a great way to propose
the technology to B2B customers in a relevant
and really value-creating manner for them.
We will also have to mitigate the end of the
wholesale contract with Mobile Vikings at the
end of the 1st trimester of the year, but we’re
condent that the way our overall market share
evolves will clearly help in this endeavor. The
new federal telecom law, which imposes to offer
the same contractual conditions to residential
customers as to SME’s of less than 10 workers
will also have an impact, as it could make this
very important segment of the market much
more dynamic, with many opportunities to
seize, thanks to the quality and reliability of our
services.
In 2022, we’ll further
roll out 5G and
capitalize on the
dynamic of our Start
Walking 5G programs,
which offer a great
way to propose
the technology to
B2B customers
in a relevant and
really value-creating
manner for them.
Werner De Laet
Chief Enterprise,
Wholesale and
Innovation Ofcer
+40%
B2B convergent
customers
Annual report 2021
13
At network level, did you observe
significant trends?
Stefan Slavnicu:
The pandemic clearly affected
the increase in the trafc curve: we observed
a +50% usage year on year at rst. In the
meantime, it stabilized towards a 30% increase
year on year. We observed that the trafc
increase is now slowing down, as more people
stay home and connect to their wi to work
instead of on 4G when being on the move. There
is a clear consumption shift.
What were the main milestones
of 2021, technology-wise, in the
evolution of our networks?
Stefan Slavnicu:
An important one is the
implementation of the RAN (Radio Access
Network) sharing agreement with Proximus.
We have started a little bit more cautiously than
initially planned because it is a quite complex
project and we wanted to strictly respect
all the regulatory and competition-related
conditions, but, in the end, we accelerated
and already swapped more than 200 sites on
the new Nokia radio equipment. Thanks to this
swapping, we’ll have a single RAN solution for
2G, 3G, 4G and 5G and we’ll be able to rely
on the Nokia technology, which we found to
be the most performant but also cost-efcient.
The RAN sharing itself will increase the level
of coverage on all technologies, improve the
overall performance of the network and reduce
its energy consumption. On the core network
we nalized in 2021 the contract and ordered
the equipment for moving into 5G Stand Alone,
which will be the core of the future, also enabling
industry 4.0 services for B2B customers. In the
second part of 2022 we will be ready with the
future commercial core network which will be
based on Ericsson technology.
What about the fixed network?
Stefan Slavnicu:
We invested in upgrading our
technology, to pave the way for next-generation
services which will be deployed for all our xed
customers, whether on owned or on third-
party infrastructures. To follow the technology
evolution, we invested in state-of-the-art
technology to provide the best performances
to our xed customers, whether on cable or on
ber networks. This is why we selected both
a cable modem and a FTTH light box that are
capable to provide the xed data connectivity
of the future through WiFi 6 technology and
embedded Mesh capabilities. We are also
moving forward with our new generation of set-
top boxes, that was prepared in 2021 and will be
launched at the beginning of 2022. We moved to
an Android TV ecosystem, which is much more
modern and allows us to integrate and provide
OTT applications (those of content producers
such as VRT, RTBF, Amazon Prime,…).
Strategically we’re readjusting towards a more
customer-focused approach on the network
side. This means we’re looking to put in place
more modern means using big data to interact
directly with our customers in the near future.
We also invested in direct interconnections
with Facebook, Google and other main content
providers to ensure the best end to end
experience for the customer. We follow trafc
trends, monitor new content providers that
become more prominent such as Instagram, Tik
Tok to always anticipate their needs.
All the technology
choices of the future
are done with the
Group’s support,
in order not only
to select the latest
state-of-the-art
technology, but also
to keep our costs
under control.
Stefan Slavnicu
Chief Technology Ofcer
>1.000
sites to be swapped
to Nokia
Annual report 2021
14
How is the Orange Group
contributing in the technological
plans?
Stefan Slavnicu:
All the technology choices of
the future are done with the Group’s support, in
order not only to select the latest state-of-the-
art technology, but also to keep our costs under
control as we can leverage on their size and
scope to negotiate the best possible conditions
and prices. The Group allows us to offer the
best technologies to our customers at really
competitive prices, while we would probably
have been forced to select cheaper options
in another scenario. We can also rely on the
Group’s experience and capabilities in R&D,
the fact that they have specic laboratories and
teams who test and validate products, hardware
solutions, software releases… Moreover, they
have an extremely valuable experience and
expertise we can leverage, as they are, for
instance the European leader in the rolling out of
ber networks.
How do you look back on the way
you handled the major challenge
the floods of the 2021 summer
constituted for the network?
Stefan Slavnicu:
The oods were indeed an
extraordinary and very challenging situation.
I’m very glad that, together with our operational
partners, we were able to react quickly and, from
200 sites affected by the oods, we reduced
this number to 30 in 48 hours. So we managed
to nd a solution for 75% of the problem in only
48 hours, and reached less than 20 sites still
affected in 72 hours. We installed temporary
mobile solutions in the most affected areas such
as Verviers, Pepinster and Chaudfontaine to
ensure the coverage and the situation quickly
came back to normal. I am really thankful for the
work achieved by our teams and our partners,
who all showed a massive commitment and
demonstrated the quality of our services and
processes. Still, we will continue to invest in the
redundancy and robustness of our network to
be even more performant should such events or
other incidents occur in the future.
Annual report 2021
15
Proud to be a
responsible
operator
and employer
Orange Belgium has set as a top priority to always
act as a responsible operator, committed to respect
and protect the environment and society it is active
in, but also its employees and community. In a
quite complex context, due to the pandemic among
others, it managed to deliver and remain engaged
toward all its stakeholders in 2021.
The continuing pandemic had
a massive impact on Orange
Belgium’s organization, in terms of
teleworking for instance, yet you
were working on some important
changes in terms of human
resources: how did you manage
this specific context?
Paul-Marie Dessart, General Secretary and
acting Chief People officer:
We tried to seize
the “opportunity” of the pandemic to totally
revamp our teleworking policy, in order to allow
an increased exibility to our team members.
This, in addition to the start of our brand-new
mobility plan, and the investments we made
into hybrid working (collaborative tools and
dedicated hardware to ease the combination
of on- and off-site working) helps us achieve
two goals: helping our team members reach a
better balance between work and private life, but
also incite them to rethink their mobility, which
can have a major impact on our environmental
footprint, and so help us achieve more CSR-
related objectives. This project was impulsed
by the current regulatory context, which pushes
towards more sustainable and environment-
friendly mobility practices, but we really saw an
enthusiasm from our team members to embrace
this evolution and adapt their behaviors. But we
know we won’t be able to properly measure this
evolution until we reach a “new normal” with
regular commute to the premises from the team
members.
As for the teleworking policy,
we’re obviously in a very peculiar
context, due to Covid-19: is the
current policy (50% presence in the
office, should the sanitary context
allow it) meant to be sustainable in
a long-term perspective?
Paul-Marie Dessart:
It is. Because it was
designed based, of course on the current
sanitary situation, but also on our team members
long-term vision and demands. We based it
on the feedbacks we were receiving from the
team members themselves, and it offers a great
exibility, as we’re not talking days or weeks of
presence in the ofces. It offers the possibility,
for instance, for separated parents to better
organize their work, considering their family
obligations. This exibility is of great value for our
teams as it is also meant to consolidate the link
inside the teams, as we don’t think fully remote
working is benecial to the consolidation of
Orange Belgium’s community of employees.
50%
office presence
Annual report 2021
16
Orange Belgium has always been
proud of the concept of community
it endorsed. How did you maintain
this link in times of generalized
homeworking and reduced real-life
interactions? Did you notice an
impact on absenteeism?
Paul-Marie Dessart:
We rst focused on the
mood polls, which we did on a weekly basis
in times of heavy lockdown and then with a
more adapted schedule, and which allowed
us to better understand the psychological
situation and overall morale of our teams. We
also managed to maintain some team-building
activities, in respect of the sanitary regulations
but mostly to allow teams to get together and
increase employee’s sense of belonging.
As for the absenteeism, we didn’t observe
a massive change in 2021, which is a good
indicator that our initiatives to keep our teams
engaged and connected with each other are
fruitful.
Isabelle Vanden Eede:
We multiplied the
communication momentums with our employees
to make sure we could rely on legit feedback
on what they were going through. Also, we did
our best to help them cope with the situation.
For instance, we created a “Level up your
talents” page and Well-being hub on our internal
social network to offer our employees lots
of tips and tricks related to resilience, online
meetings, teleworking with children, but also the
ergonomics of a Home ofce, the importance of
breaks, ...
Paul-Marie Dessart:
We also reinforced the
community by creating a dedicated group on
Facebook and launching an internal campaign
with various fun challenges to help our
employees reconnect with their colleagues.
We also put in place two hotlines, one assured
by our supplier Securex and a dedicated
line for the HR department for practical but
also psychological support, along with the
organization of sessions of dialogue in small
groups and in the presence of an external
prevention advisor to support psychosocial well-
being.
We tried to seize
the “opportunity”
of the pandemic to
totally revamp our
teleworking policy,
in order to allow an
increased flexibility to
our team members.
Paul-Marie Dessart
General Secretary and
acting Chief People Ofcer
Annual report 2021
17
We know diversity has been a
major priority for Orange Belgium:
how did the company perform on
that side?
Paul-Marie Dessart:
An important achievement
is the fact that we were awarded the GEEIS
certication ((Gender Equality European
& International Standard) for an additional
two years, something we hold since 2011 in
recognition of our practices with regard to
diversity, professional equality and inclusion. The
audit highlighted the signicant efforts which
were realized over the years and a continuous
improvement, even offering us the maximum
score in several subcategories but, more
importantly, demonstrating that our engagement
was made with a long-term perspective. What
gets measured gets done, and the evaluation
helped us identify the challenges and set up
priorities. For instance, the proportion of female
directors and people managers has simply
doubled in ten years. Besides gender diversity,
we’re also working on several projects regarding
the access to the job market for people with
disabilities, for instance but also people with less
“social capital”, coming from deprived socio-
economic backgrounds, etc via, among others,
several more CSR-focused initiatives.
As for CSR initiatives, can you give
us a view on the Orange Group’s
overall strategy?
Isabelle Vanden Eede:
We started from the
observation that, as inequalities and climate
change become increasingly critical, society
will not accept a technological progress which
would not be accessible to all and with a limited
(if not a neutral) environmental impact. Which is
why we are making, as a company, a long-term
commitment to the planet and to the digital
inclusion, with solid proof points. To achieve
this, the Orange Group has set a rst goal, the
strategic plan Engage 2025, which is articulated
in two main pillars: the environment and the
digital inclusion.
On the environmental side, the nal objective
for Orange Group is to be Net Zero Carbon by
2040, 10 years in advance compared to the
objectives set by the rest of the sector. To do
so, by 2025, Orange Belgium committed to
reduce its CO
2
emissions by 22% from 2015 to
2025. The energy consumption, its improved
efciency and its renewable sources, the circular
3x
more collected
devices in 2021
Annual report 2021
18
economy through projects such as mobile and
xed devices collection, and the mobility are
integrated into Engage 2025.
As for the digital exclusion, we observed that
it may have different sources. It can be due to
geographical, economic, societal factors or
a combination. To have a real impact on the
digital inclusion, we committed to launch and/
or maintain a wide range of initiative impacting
those 3 factors. At Group level, we are closely
monitoring the network coverage to limit and
reduce the geographical exclusion factor.
We targeted to have affordable ranges of
smartphones and offers, as well as providing
workshops, guidance, and support to increase
people’s digital skills and autonomy, in order to
give them the keys to the digital world.
How do you translate these
objectives at the Belgian level?
Isabelle Vanden Eede:
On the environment side,
Orange Belgium is working on the ambitious
Net Zero Carbon objective and is already, since
2014, certied and labelled CO
2
neutral by the
independent consulting company CO
2
logic and
audited by Vinçotte. This certication is only
achievable by demonstrating serious evidence
of CO
2
emissions reductions over the years and
the compensation of the residual CO
2
emissions
not eliminated yet. However, these great results
won’t make us reduce our efforts or ambitions.
Our priority, now, is to remain CO
2
neutral and
keep our certications. To do so, we need to
constantly challenge the status quo, reevaluate
our processes and keep reducing our CO
2
emissions.
Orange Belgium also states it
is committed to a sustainable
smartphone market: how do you
operationalize such an objective?
Isabelle Vanden Eede:
A major activity is our
BuyBack program, where we allow customers to
bring back their old devices and get a voucher
for the remaining value, if any, and a little bonus.
This year has been particularly good in terms
of collecting customers’ old phones thanks
to an increased communication and a boost
campaign, where customers would receive an
additional amount when bringing an old device
in our shops: thanks to these efforts, we almost
tripled the amount of collected devices in 2021.
In addition to its direct environmental impact
(60% of the phones are reused or refurbished
and the remaining 40% are recycled), for each
phone collected, we donate €2 to the Natuurpunt
and Natagora associations. Thanks to this, we
are taking part, in the long term, in recreating an
ancient medieval forest in Belgium. The whole
project aims at the reforestation of 500 hectares
of woodland, which is not offset (the trees
planted are not planted to compensate for the
felling of other trees). This year, Orange Belgium
has contributed to the planting of 2700 trees in
this project.
On the environment
side, Orange Belgium
is working on the
ambitious Net Zero
Carbon objective
and is already, since
2014, certified and
labelled CO
2
neutral
by the independent
consulting company
CO2logic and audited
by Vinçotte.
Isabelle Vanden Eede
Chief Brand,
Communication and
CSR Ofcer
Annual report 2021
19
Do you also apply changes to your
own processes to achieve these
goals?
Isabelle Vanden Eede:
Yes of course, we
try to rethink all of our processes to evaluate
whether it is possible to make them more
sustainable. In November 2020, we were also
the rst operator in the world to launch a SIM
card made from 100% recycled and recyclable
plastic. It is thanks to the collaboration with
Thales and Veolia that we can transform plastic
from old fridges into SIM cards that meet all
quality standards. In 2021, 250,000 Eco SIMs
were distributed, which is quite signicant for
the Belgian market. To go further, in 2021, we
decided to order exclusively Eco SIM cards, so
that in 2022, we will almost triple our volumes
of Eco SIMs, and distribute 90% of our cards in
recycled plastic, keeping the ambition in 2023
to distribute only recycled plastic cards. We
also continued to work on reducing our CO
2
emissions through, among other things, our
consumption of paper and other packaging
materials. Where we can, we also make the
transition to more sustainable materials, such
as paper or cardboard instead of some PVC
products. By 2021, we have increased our use
of recycled material by more than three times.
In addition to recycled material, we ensure that
100% of our paper products are FSC and PEFC
certied, certications that guarantee sustainable
paper production and forest management. These
initiatives have enabled us to reduce our paper
and packaging volumes by 14.4%.
Paul-Marie Dessart:
As already mentioned
earlier, we also continued our efforts to reduce
the footprint linked to our employees’ mobility.
Our aim is to reduce the CO
2
e emissions linked
to the employees’ mobility by 20% between
2015 and 2025. Already before the covid crisis,
more than 1,000 of our 1,400 employees were
already using homeworking to improve their
work-life balance and decrease their ecological
footprint. This of course became mandatory
during the (semi) lockdowns, but we will keep
the lessons learned during the past 2 years to be
even more ambitious in terms of homeworking.
Next to that, we launched a tool, internally, to
compensate employees taking public transports
and the bike, to incentivize a sustainable mobility
in employees’ habits. We are also working on our
car policy, to propose more hybrid and electric
cars, and favor fuel-efcient cars. We also
encourage our employees to take smaller cars
in combination with public transport or shared
bikes subscriptions.
You also mentioned Digital
Inclusion as a major priority: were
there any achievements in 2021?
Isabelle Vanden Eede:
2021 has been an
important milestone in our digital inclusion
initiatives, with signicant progresses on the
creation of a corporate fund and an Orange
Digital Center which will become active in the
rst half of 2022. These two initiatives are key
for Orange’s commitment to bring digital to as
many people as possible. The Corporate Fund
will be a structure with a philanthropic vocation,
supporting meaningful projects in terms of
digital inclusion, in partnership with NGOs. It will
enable us to give support to young people, job
seekers, women, and elderly persons, enabling
them to increase digital skills, improve their
employability, enable their emancipation and
provide a social link. The Orange Digital Center
(ODC) will provide a free space support for
innovation, and digital skills development. It will
focus on enabling an access to high added value
in digital jobs, supporting entrepreneurs in their
projects. The ODC has been thought especially
to bring essential digital skills and boost the
employability of young people, women and more
mature people.
250,000
Eco SIMs distributed
Annual report 2021
20
In our journey for a better digital inclusion, we are
not lonely, and we can count on the support of
an entire ecosystem. We have been collaborating
with Entra for more than 20 years, with the
aim to offer a job to the people that usually
struggle to access the labour market because
of their disability. Since 2016, we are also
proud to be an active partner and a founding
member of BeCode. The aim of BeCode is to
form individuals to become developer. With its
expertise, BeCode is able to propose a training
of 7 months to become junior web developer
and then follow an internship in a company like
Orange to sharpen their skills. Hundreds of web
developers leave the program with valuable
skills and a diploma, and some have even joined
Orange Belgium in the meantime.
Next to that, we supported the Demoucelle
Parkinson organization through our participation
of the Brussels’ 20km. The HR department
participated in the DuoDay initiative, which links
companies and job seekers with a disability or
people reevaluating their professional projects. In
the coming years, the objective will be to extend
this participation to other departments.
Paul-Marie Dessart:
This year, 10 team
members also participated in the workshops
from ToekomstAtelierDel’Avenir. The aim is to
present, through creative and playful workshops,
various topics around the ICT sector, to inspire
youngsters, and give them new potential
perspectives when thinking about their future.
We nd it extremely important to give the
opportunity to our employees to engage in the
society we’re in, which is why we offer them the
possibility to take a “Volunteering Day” off for a
good cause and frequently organize CSR-related
team events. In 2021, we saw an impressive
200% increase in the usage of the Volunteering
Day, which demonstrates how committed our
employees are. They were used, among others,
to help support the victims of the summer
oods.
Isabelle Vanden Eede:
Indeed, we’re very proud
of the Orange Belgium’s community, which
showed great solidarity during these events. We
organized the collection of rst need materials
for the victims in our shops, partnered with
NGO’s and private companies to provide pet
food, nancial support, but also provided the
victims with material support and electronic
devices. Solidarity and engagement are crucial,
really an essential part of our DNA, and we’re
extremely proud to see our teams are sharing
this commitment in a very spontaneous and
natural manner.
In 2021, we saw
an impressive
200% increase in
the usage of the
Volunteering Day,
which demonstrates
how committed our
employees are.
Paul-Marie Dessart
General Secretary and
acting Chief People Ofcer
Annual report 2021
21
Orange
Luxembourg
How would you define 2021? What
were the main milestones of the
year for Orange Luxembourg?
Corinne Loze, CEO of Orange Luxembourg:
I would say that 2021 clearly was a year of
growth. A growth which was achieved thanks
to new offers, with a specic focus on the
convergent market and ber to the home
services. It also was a very digital year, with
the launch of our new e-shop and innovative
services. Our interactions with customers are
becoming more and more digital. The video
shopping is a great example: a customer is
surng on our website and can get in touch, via
a video call, with one of our sale executives to
ask questions, get advice, etc. We also recently
introduced the live video shopping, which allows
customers to connect to a live streaming of our
sales people presenting some of our offers or
devices, and they can ask questions but also
benet from specic, very short-timed and
interesting promotions.
What about the infrastructure, how
big is 5G?
Corinne Loze:
We launched our 5G services
and 2020 and 2021 was mostly for us a year
dedicated to improving our network. The
city-centers are increasingly well covered and
we also massively invested in our network in
order to improve the quality of the “legacy”
technologies such as 2G and 4G, by fully
renewing our RAN infrastructure, as it allows us
to rely on much more energy-efcient and highly
performing hardware.
Orange Luxembourg also always
showed a major interest for the
startup ecosystem: is it still the
case?
Corinne Loze:
Yes, denitely. The startup
ecosystem is particularly living and dynamic
in Luxembourg and we’re supporting several
startups by allowing them to test their services
or products with our customer base, but also to
benet from the advices of our business teams.
We are also very proud to push forward many
initiatives on virtual reality, augmented reality and
new technologies.
In 2021, Orange Luxembourg also started testing
the Li-Fi technology, an alternative to WiFi using
light to transmit data and which should prove to
be more energy-efcient.
As in 2020, Orange Luxembourg
made the most out of 2021 to
further grow and innovate, to the
benet of its customers.
I would say that 2021
clearly was a year
of growth. A growth
which was achieved
thanks to new offers,
with a specific focus
on the convergent
market and fiber to
the home services.
It also was a very
digital year, with the
launch of our new
e-shop and innovative
services
Corinne Loze
CEO of Orange Luxembourg
Annual report 2021
22
We were indeed a real
pioneer in esports,
and took a position
very early – more
than 5 years ago- by
supporting many
local events and by
becoming the main
partner of the national
federation of esport.
Orange Luxembourg is also very
active on a specific niche, which
is esports: can you give a bit of
context on this positioning?
Corinne Loze:
We were indeed a real pioneer,
and took a position very early – more than 5
years ago- by supporting many local events and
by becoming the main partner of the national
federation of esport. In 2020, we also launched
our very own league, focused on the football
game FIFA. Our goal is to really support the
ecosystem, accompany its structuration, but
also to be the technological partner, enabler of
the esport world in Luxembourg and help get
them recognized. To be noted, our interest for
football was not limited to esport, as we also
became in 2021 the sponsor of the national
football teams, feminine and masculine.
For 5 years
supporter of esport
Annual report 2021
23
Management
Report
Orange Belgium is one of the leading
telecommunication operators on the
Belgian market, with over 3 million
customers, and in Luxembourg
through its subsidiary Orange
Luxembourg.
As a convergent player, it provides next generation
connectivity services to residential customers through multi-
gigabits mobile, cable and optic ber networks, also relating
to the Internet of Things. Its high-performance mobile network
is equipped with the latest technologies and benets from
continuous investments preparing for the arrival of 5G. As
a responsible operator, Orange Belgium is also investing to
reduce its ecological footprint and promote sustainable and
inclusive digital practices.
Orange Belgium is a subsidiary of the Orange Group, one of
the main operators in Europe and Africa for mobile telephony
and internet access and a world leader in telecommunication
services for companies.
Orange Belgium is listed on the Brussels Stock Exchange
(OBEL).
The Management Report for the accounting year ended
on 31 December 2021, consisting of pages 24 to 35, has
been prepared in accordance with Articles 3:6 and 3:32 of
the Belgian Code of Companies and Associations and was
approved by the Board of Directors on 23 March 2022. It
covers both the consolidated accounts of the Orange Belgium
Group and the statutory accounts of Orange Belgium S.A. The
Corporate Governance statement on pages 104 to 121 is an
integral part of this Management Report.
1. Recent events
First quarter of 2021
Covid-19 impact
Despite the easing of Covid-19 related measures, Orange
Belgium was fully mobilised to ensure network and service
continuity and to support its customers. Network and service
continuity was critical in managing the Covid-19 crisis. The
network was capable of handling the increased trafc without
any major issues for customers. Technical teams permanently
monitored the network and reinforced it if necessary, to
guarantee seamless communication at all times.
The Covid-19 measures also impacted the company’s
nancial and operational performance during the quarter.
The Covid measures announced by the Belgian government
allowed all non-essential shops to remain open but only by
appointment. This limitation in customer visits impacted
the commercial performance, as well as the number of ICT
projects. Additionally, due to people being more restricted
in their movements, mainly roaming and SMS trafc were
impacted.
Go Unlimited limited edition
On 8 February 2021, Orange Belgium re-launched its Go
Unlimited promotion at 30 euros.
Orange Belgium selected to provide new smart parking
experience to the Waasland Shopping customers
As from the end of February customers of Waasland Shopping
were able to enjoy a brand new experience, thanks to Orange
Belgium’s smart parking solution. Based on sensors, smart
cameras and a mobile application, the smart parking solutions
allowed customers to be directly guided to available parking
spots through their mobile device.
SNCB renewed its high-level connectivity and IoT
services
The Belgian railway company SNCB once again awarded a
large-scale contract to Orange Belgium for an 8-year period.
Orange will provide connectivity for approximately 13,000
employees and 11,000 connected devices ranging from
smartphones and tablets for ticket collectors to train drivers,
screens or ticketing machines and smart parking solutions.
This involves huge monthly volumes: more than 500,000
minutes worth of voice calls, 2.2 million texts and more than
15TB of data – and rising.
Annual report 2021
24
TOP EMPLOYER for the 10
th
time
For the 10
th
time in a row, Orange Belgium was elected
TOP EMPLOYER by the Top Employers Institute. It is great
recognition of Orange Belgium’s numerous efforts to provide a
digital and caring working environment to its more than 1,400
employees.
Antoine Chouc appointed new CFO
As from 1 March 2021, Antoine Chouc became Chief Financial
Ofcer of Orange Belgium, replacing Arnaud Castille after 4
fructuous years in that role. Antoine Chouc was formerly Chief
of Staff to the CEO of Orange Group.
Decision on wholesale tariffs for access to Proximus’
fibre network
On 9 March 2021, the BIPT published its decision regarding
the wholesale tariffs for access to the Proximus bre network
(Bitstream Fiber GPON). The tariffs relate to the Proximus
FTTH deployment areas where the operator will deploy
bre alone (and not through Joint Venture). The decision
conrmed the prices that were put forward earlier and that
were based on the commercial agreement between Proximus
and alternative operators. Orange Belgium does not consider
these tariffs attractive.
Consultation on one-off charges for cable and fibre
networks
On 8 October 2020, the BIPT launched a consultation on
the one-off charges related to wholesale services on cable
networks. The consultation ended on 12 November 2020. The
decision on the one-off charges for access to cable networks
was expected during Q2 2021.
On 20 January 2021 the BIPT launched a public consultation
on the one-off charges and improved SLA repair charges for
the Proximus bitstream GPON offer.
Decision regarding reference offers for wholesale
access to the cable networks
On 25 March 2021, the CRC (conference of BIPT, CSA, VRM
and Medienrat) adopted the nal decisions on the reference
offers for the cable networks for which each regulator is
competent. These decisions contained mainly qualitative,
technical and operational requirements which must be met by
the cable operators in the context of the regulated wholesale
access. Next to dening a series of service level agreement
requirements, the decisions require cable network operators
to allow resale of wholesale input by an alternative operator
and to allow alternative operators to provide services to B2B
customers based on the regulated access.
New spectrum allocation, renewal of existing spectrum
attributions
• Extension of the licence duration for 2G and 3G
On 23 February 2021 the BIPT decided to extend the duration
of the 900, 1800 and 2100 MHz licences for a period of
6months, i.e. from 15 March 2021 until 15 September 2021.
• Attribution of new 700/900/1400/1800/2100/3500 MHz
spectrum and unclear timeframe 5G auction
On 22 January 2021 the Federal Government approved
the draft Royal Decrees and Law proposal that set up the
framework for the attribution of the 5G spectrum (700, 3400-
3800 and 1400 MHz) and the renewal of the 900, 1800 and
2100 MHz licences. The next phase was an impact analysis
regarding the differentiated spectrum attribution conditions,
and the approval by the Coordination Committee. Orange
Belgium remained concerned that the spectrum legal
framework may contain articial and discriminatory conditions
to attract a 4
th
full MNO.
• Temporary usage rights for the 3.6GHz-3.8GHz band
On 11 September 2020 several anti-5G action groups
appealed the decisions before the Market Court of Brussels,
asking to annul the decisions on the grounds of administrative
and environmental law issues. Orange Belgium, Telenet,
Proximus and Cegeka intervened in the procedures to defend
and preserve their respective temporary licence. On 15 April
2021 the Market Court decided that the case introduced by
the action groups is not admissible.
• Exclusive spectrum rights for microwave links
On 30 March 2021 the BIPT decided to grant Telenet,
Proximus and Orange Belgium a range of exclusive spectrum
rights in various spectrum bands (14-15 GHz, 25-26 GHz,
31-32 GHz, 37-38 GHz, 73-84 GHz) for the provision of
microwave links. As part of the decision, each operator will get
1 GHz exclusive spectrum in the E-band.
• Consultation on national usage rights for Citymesh
On 14 January 2021, the BIPT launched a consultation on
Citymesh’s user rights in the 3.5 GHz frequency band. In
essence, Citymesh requested to extend the list of Citymesh’s
municipalities to all municipalities on the Belgian territory.
In general, Orange Belgium considered that spectrum
allocations should go hand-in-hand with long-term visibility,
together with deployment obligations in order to ensure that
operators effectively invest in networks and use spectrum in
an efcient and effective way.
RAN sharing agreement between Orange Belgium and
Proximus
On 25 November 2019, Orange Belgium and Proximus signed
an agreement with the purpose of establishing a 50-50 joint
venture on radio mobile access network sharing, covering 2G,
3G, 4G and 5G technologies. Telenet lodged a complaint with
the national competition authority against this agreement. By
its decision on 10 January 2020 the Competition authority
provided for an additional period of 2 months during which
the BIPT could further assess the agreement. The provisional
measures decided by the Competition Authority expired on 16
March 2020 and Orange Belgium and Proximus have resumed
works for the implementation of the project.
The procedure on the merits is on-going.
Annual report 2021
25
Second quarter of 2021
Covid-19 impact
Despite the easing of Covid-19 related measures, Orange
Belgium was fully mobilised to ensure network and service
continuity and to support its customers. Network and service
continuity were critical in managing the Covid-19 crisis.
The network was capable of handling the increased trafc
without any major issues for our customers. Technical teams
permanently monitored the network and reinforced it if
necessary to guarantee seamless communication at all times.
As said in Q1’21, the Covid-19 measures also impacted the
company’s nancial and operational performance during
the quarter. The Covid measures announced by the Belgian
government allowed all non-essential shops to remain open
subject to maintaining social distancing of 1.5m and restricting
the total amount of people allowed inside shops. To a lesser
degree, the Covid-19 measures also impacted the company’s
nancial and operational performance during the quarter.
This limitation in customer visits impacted the commercial
performance, as well as the number of ICT projects.
Additionally, due to people being more restricted in their
movements, mainly roaming and SMS trafc were impacted.
Iristick, OTIV and MyPitch join the 4th season of
Orange Fab
Despite a challenging context, Orange Belgium moved
forward with Orange Fab, its acceleration programme for
start-ups. The theme of this edition: 5G and how these
start-ups and Orange Belgium could co-innovate on relevant
applications of this technology for consumers and businesses.
After a thorough preselection and pitch process, the following
3 projects will be joining the 4th season of the programme,
allowing them to innovate on 5G applications within the global
framework of the Orange Group and its 18 Orange Fabs all
over the world:
• Iristick creates industrial smart glasses to support
enterprises in their digital transformation. 5G’s low latency
capabilities will be a key enabler for the smart glasses
industry.
• OTIV’s objective is to increase the safety and efciency of
rail vehicles via autonomous driving technology. Thanks
to 5G, autonomous mobility will reach its full potential by
making critical communication instantaneous.
• MyPitch is a data-driven football community; its technology
allows players to track tness data and event data on the
pitch. 5G will allow MyPitch to grab & share more data from
players thanks to higher bandwidth.
Go Plus offer revamped
Orange Belgium increased the data bundle on its Go Plus
subscription to 10 GB from 8 GB, keeping the price of €20
unchanged.
Roll-out of open passive “fibre-to-the-premise” pilots
in Brussels
Orange Belgium announced that it will invest in the
deployment of ‘bre-to-the-premise’ (or “FTTP”) pilots in
Brussels. Orange Belgium will start the rollout in Evere and
Ixelles, where 15,000 residents and businesses will have the
opportunity to benet from an open and future-proof optical
bre network enabling multi-gigabit speeds. Orange Belgium
will benet from the skills and experience of the Orange Group
to provide a next generation open bre network which will be
accessible at passive level to any interested telecom service
operator to connect and rely on their own active network
equipment. Orange Belgium intends to leverage synergies
with local assets and partners to contribute to the Region’s
economic and digital ambitions.
Consultation on one-off charges for cable
On 24 June 2021, the CRC (BIPT, CSA, VRM, Medienrat)
published its decision on the one time fees and monthly
charge for SLA PRO for broadband on the cable network.
Thedecision was in line with the expectations.
Review of the 2018 market analysis decisions
The CRC initiated its review of the 2018 market analysis
decisions that dene the framework for the regulation of cable,
copper and bre networks in Belgium. An initial questionnaire
was published. It is expected that the new decisions will be
nalised during 2023.
BIPT price squeeze guidelines and assessment
The BIPT published an update of the communication on the
price squeeze for the xed networks on 22 June 2021. Based
on the updated guidelines, the BIPT concludes that there are
currently no price squeeze situations in the market.
New spectrum allocation, renewal of existing spectrum
attributions
• Extension of the licence duration for 2G and 3G
Given the delay with the nalisation of the new spectrum
framework, the BIPT published on 23 June 2021 a
consultation to extend the licences for a new period of
6months as of mid-September.
• Attribution of new 700/900/1400/1800/2100/3500 MHz
spectrum and unclear timeframe 5G auctio
n
The draft Royal Decrees are still being reviewed by the State
Council. It is unclear as to whether the draft texts will be
subject to further changes. In the meantime, on 17 June 2021,
the Chamber of Representatives approved the reserve prices
for the auctions in the 2G, 3G, 4G and 5G bands. The reserve
prices are the charges that apply for the reserved spectrum
for each player and are also the minimum price for the
non-reserved spectrum that is auctioned. Citymesh/Cegeka
expressed interest in participating in the auction.
On 18 July 2021, the BIPT launched a consultation on the
set of updated draft Royal Decrees. The deadline for the
consultation is 31 August 2021.
The Coordination Committee is expected to make a nal
decision by the end of October 2021, beginning of November
2021.
The auctions are now expected during Q2 2022.
• Temporary usage rights for the 3.6GHz-3.8GHz band
On 11 September 2020, several action groups against 5G
appealed the decisions before the Market Court of Brussels,
asking to annul the decisions on the grounds of administrative
and environmental law issues. Orange Belgium, Telenet,
Proximus and Cegeka intervened in the procedures to defend
and preserve their respective temporary licence. A judgment
was pronounced on 15 April 2021. The Court decided that the
claim was inadmissible.
• National usage rights for Citymesh
Following a January 2021 consultation, the BIPT published
a decision on 4 May 2021 on the extension of Citymesh’s
user rights in the 3.5 GHz band to all Belgian municipalities
(excluding the municipalities of Vresse-sur-Semois, Bièvre,
Annual report 2021
26
Gedinne and Bouillon, for which user rights have already been
granted to Gridmax). At the end of December 2020, it became
known that Cegeka had acquired control over Citymesh, while
it had already acquired Gridmax earlier in 2020.
RAN sharing agreement between Orange Belgium and
Proximus
On 25 November 2019, Orange Belgium and Proximus signed
an agreement with the purpose of establishing a 50-50 joint
venture on radio mobile access network sharing, covering 2G,
3G, 4G and 5G technologies. Telenet lodged a complaint with
the national competition authority against this agreement. By
its decision on 10 January 2020 the Competition authority
provided for an additional period of 2 months during which
the BIPT could further assess the agreement. The provisional
measures decided by the Competition Authority expired on 16
March 2020 and Orange Belgium and Proximus have resumed
works for the implementation of the project.
Whereas the procedure on the merits is ongoing, the
Competition authority is sending several requests for
information to Orange Belgium and Proximus regarding
various elements of the agreement. The outcome of the
procedure is expected in autumn.
Transposition of the EECC (European Electronic
Communications Code)
The transposition of the EECC, which redenes the framework
for the telecom regulations, into national legislation is delayed.
The draft texts, which are understood to be broadly speaking
in line with the European texts, have been reviewed by the
State Council and must now be approved by Parliament.
Third quarter of 2021
Covid-19 impact
Despite the easing of Covid-19 related measures, Orange
Belgium continues to be fully mobilised to ensure network
and service continuity and to support its customers. Network
and service continuity are critical in managing the Covid-19
crisis. The network continues to handle the increased trafc
without any major issues for our customers. Technical teams
permanently monitor the network and reinforce it if necessary
to guarantee seamless communication at all times.
The Covid measures announced by the Belgian government
allowed all non-essential shops to remain open subject to
maintaining social distancing of 1.5m and restricting the total
amount of people allowed inside shops.
#SamenSolidair #TousSolidaires launched
The heavy oods greatly disrupted the lives of many Belgian
citizens and, as a responsible operator, Orange Belgium
maintained (and restored where needed) the connectivity in
the impacted areas and also helped the affected families.
Orange Belgium decided to turn 100 shops into collection
points where the public could leave essential items to help
the people who lost their homes. Furthermore, the customers
impacted by the heavy rain fall received 5 GB mobile data.
Orange TV Lite launched
Orange TV Lite enables customers to combine a streaming
account and common TV broadcasting, without having to pay
a full subscription. Orange TV Lite enables viewers to watch a
selection of up to 20 television channels. There will be 2 offers:
one with Dutch-speaking channels and the other with French-
speaking channels.
Orange TV Lite comes with a set of extra features.
Programmes can be recorded and watched later. TV can be
streamed on a wide variety of devices and the app can be
installed on ve devices in total, making Orange TV Lite family
friendly.
Orange TV Lite is available only in a ‘Love ‘or ‘Home’ package
at a cost of €8.5 /month.
hey!, the new, 100% digital brand is launched
On 24 September 2021, Orange Belgium launched its
new and innovative b-brand geared towards digital-savvy
customers. hey! is a 100% digital brand which takes a
participative approach specially designed to meet the needs
of ultra-connected customers leading completely digitally
oriented lives. This next generation value proposition is based
on 4 pillars: 100% digital, Generous, Low impact, Evolutive.
Orange Money launched in Belgium
Thanks to a totally free mobile application, customers can
now have a mobile wallet and instantly send money to Orange
Money users in Belgium or Africa. Moreover, this service is
open to all customers, regardless of their telecom operator.
This service is a rst-ever in Europe other than France, and
further expands Orange Belgium’s wide range of services and
is a great addition to the special offers already available to the
Belgian diaspora.
First 5G Lab opened in Antwerp
Orange Belgium ofcially opened its rst Orange 5G Lab in
Antwerp, inviting companies to discover, test and develop new
innovative use cases on 5G Stand Alone network technology.
The new Orange 5G Lab will consolidate the knowledge and
expertise gathered from Orange Belgium on 5G Industry 4.0
as well as the initial co-innovation use cases delivered in the
Port of Antwerp to help develop and test new and inspiring
Industry 4.0 use cases. During the process Orange Belgium is
permanently expanding its ecosystem of partners, customers
and also start-ups. The Lab will join Orange’s international
network of seven other Labs across Europe, fostering
collaboration and innovation on an unprecedented level.
B2B Wholesale Market
On 31 March 2021, the BIPT launched a public consultation
on Proximus’ wholesale leased lines reference offer
(BROTSoLL). The consultation ended on 11 May 2021 and a
nal decision was taken on 21 September 2021.
New spectrum allocation, renewal of existing spectrum
attributions
• Extension of the licence duration for 2G and 3G
Given the delay with the nalisation of the new spectrum
framework, on 23 June 2021, the BIPT published a
consultation to extend the licences for a new period of 6
months as of mid-September. On 7 September 2021, the BIPT
published the decision on the extension for another period of
six months of the 2G and 3G licences, now until mid-March
2022.
• Attribution of new 700/900/1400/1800/2100/3500 MHz
spectrum and unclear timeframe 5G auction
BIPT also launched a public consultation on all the
frequencies to be allocated in the coming months (5G
frequencies, and 900/1800/2100 licences). This consultation
implies that any new decision on frequency allocations is
postponed until November 2021. One of the key elements
subject to discussion is the possibility of reserving a quantity
of spectrum for a potential 4
th
player.
The auctions are expected during Q2 2022.
Annual report 2021
27
•
Temporary usage rights for the 3.6GHz-3.8GHz band
Given the delays on the new spectrum allocation, the BIPT
granted temporary user rights for the 3.6GHz-3.8GHz band
on 15 July 2020 to ve operators: Orange Belgium, Proximus,
Telenet, the Flemish ICT-player Cegeka and B2B telecom
operator Entropia (who relinquished its right on 29 July 2020).
After a number of changes, today the 3 MNOs have access to
50 MHz spectrum based on temporary licences in this band.
RAN sharing agreement between Orange Belgium and
Proximus
On 25 November 2019, Orange Belgium and Proximus signed
an agreement with the purpose of establishing a 50-50 joint
venture on radio mobile access network sharing, covering 2G,
3G, 4G and 5G technologies. Telenet lodged a complaint with
the national competition authority against this agreement. By
its decision on 10 January 2020 the Competition authority
provided for an additional period of 2 months during which
the BIPT could further assess the agreement. The provisional
measures decided by the Competition Authority expired on
16 March 2020 and Orange Belgium and Proximus have
resumed works for the implementation of the project.
Whereas the procedure on the merits is ongoing, the
Competition authority is sending several requests for
information to Orange Belgium and Proximus regarding
various elements of the agreement. The outcome of the
procedure is expected by the end of the year.
Transposition of the EECC (European Electronic
Communications Code)
The transposition of the EECC, which redenes the framework
for the telecom regulations, into national legislation is delayed
until Q4 2021. The draft texts, which are understood to be
broadly speaking in line with the European texts, have been
reviewed by the State Council and must now be approved by
Parliament.
Consultation on draft communication on towerco
The BIPT launched a consultation closing on 8 October 2021,
on the interpretation of the law on rights and obligations of
“towercos” regarding antenna site sharing.
Social tariffs in the telecom sector
The federal government has initiated plans to review the
modalities (technical, nancial, operational) of the social tariff
discounts for certain user groups. A public consultation will be
launched before end of the year.
Fourth quarter of 2021
Covid-19 impact
Despite the easing of Covid-19 related measures, Orange
Belgium continues to be fully mobilised to ensure network
and service continuity and to support its customers. Network
and service continuity are critical in managing the Covid-19
crisis. The network continues to handle the increased trafc
without any major issues for our customers. Technical teams
permanently monitor the network and reinforce it if necessary
to guarantee seamless communication at all times.
The Covid measures announced by the Belgian government
allowed all non-essential shops to remain open subject to
maintaining social distancing of 1.5m and restricting the total
amount of people allowed inside shops.
Go Unlimited became Go Extreme and offers 60 GB per
month
As from 22 November 2021, Orange Belgium’s most abundant
mobile subscription becomes Go Extreme offering double
data, up from 30 to 60 GB per month, at no additional cost.
Orange Belgium announced an agreement with Nethys
to acquire 75% minus one share in VOO S.A.
Following the period of exclusive negotiations that began on
22 November 2021 and the approval of Enodia’s Board of
Directors, Orange Belgium and Nethys signed an agreement
for the acquisition by Orange Belgium of 75% less one share
of VOO S.A., on 24 December 2021.
The transaction is based on an enterprise value of €1.8
billion for 100% of the capital and corresponds to an
EBITDA multiple of 9.5x. This acquisition represents a major
step forward in Orange Belgium’s national convergent
strategy and will increase investment and competition in the
telecommunications sector for the benet of customers and
the competitiveness of the Walloon and Brussels regions.
The closing of the transaction is subject to customary
conditions precedent, including the approval of the European
Commission expected in 2022. Until such approvals and
closing of the transaction are obtained, the two companies will
continue to operate independently.
hey! will offer 25% data boost every quarter in the first
year
hey!, the new brand launched by Orange Belgium in
September, is planning to give new customers extra data
every three months in their rst year. The amount of data will
increase 25% each quarter as from February 2022.
Increased fixed broadband and TV prices
Orange Belgium raised prices for new and existing customers
as from January 2022.
2
nd
5G Lab to be opened in Liege in first half of 2022
After the inauguration of its rst 5G Lab in Antwerp in October
2021, Orange Belgium forged a partnership with the iconic
Grand Poste of Liège, veritable hub dedicated to creative
companies and innovation. The objective of the 5G Lab in
Liège is to demystify this new technology and demonstrate
its possibilities and applications. The lab will also be used
to develop and test out innovative and concrete new 5G
applications in collaboration with customers, prospects and
partners.
New spectrum allocation, renewal of existing spectrum
attributions
• Extension of the licence duration for 2G and 3G
The decision on the extension until mid-September 2021
was published on 23 February 2021. Given the delay with the
nalisation of the new spectrum framework, on 23 June 2021,
the BIPT published a consultation to extend the licences for a
new period of 6 months as of mid-September. On
7 September 2021, the BIPT published the decision on the
extension for another period of six months of the 2G and 3G
licences, now until mid-March 2022. On 19 January 2022, the
BIPT has launched a consultation on extending by another
6 months the licences that would then expire on 15
September 2022.
Annual report 2021
28
• Attribution of new 700/900/1400/1800/2100/3500 MHz
spectrum and timeframe 5G auction
On 21 October 2021, the Council of Ministers approved the
Royal Decrees that govern the 5G and spectrum renewal
auctions. The Royal Decrees were published on 23 December
2021, and contain spectrum set-asides for a new entrant
operator. The auctions will be conducted using a modular
approach, allowing a potential 4th operator to purchase only
part of the spectrum in order to target only the enterprise
market.
On 14 January 2022, the BIPT published the call for
candidates for the auction on the allocation of new 5G
spectrum and the renewal of the existing 2G and 3G
spectrum. The auction is scheduled for June 2022.
5G Security
On 2 December 2020, the BIPT launched a public consultation
on the preliminary draft law and the draft Royal Decree
concerning the security of 5G networks, in particular regarding
the constraints that apply regarding certain types of suppliers.
The consultation ended on 30 December 2020.
On 7 May 2021, (until 5 June 2021) the BIPT launched a public
consultation on a draft Royal Decree which aims to introduce
additional supplier security measures for the provision of 5G
services for full MVNOs. Additional draft Royal Decrees were
prepared aiming to introduce positioning requirements for the
5G networks and apply constraints to certain types of private
5G networks. Public consultations concerning the new draft
Royal Decrees were launched and ended on 17 December
2021.
RAN sharing agreement between Orange Belgium and
Proximus
On 25 November 2019, Orange Belgium and Proximus signed
an agreement with the purpose of establishing a 50-50 joint
venture on radio mobile access network sharing, covering 2G,
3G, 4G and 5G technologies. Telenet lodged a complaint with
the national competition authority against this agreement. By
its decision on 10 January 2020 the Competition authority
provided for an additional period of 2 months during which
the BIPT could further assess the agreement. The provisional
measures decided by the Competition Authority expired on
16 March 2020 and Orange Belgium and Proximus have
resumed works for the implementation of the project.
Whereas the procedure on the merits is ongoing, the
Competition authority has sent several requests for
information to Orange Belgium and Proximus regarding
various elements of the agreement. The outcome of the
complaint is expected in 2022.
Transposition of the EECC (European Electronic
Communications Code)
On 21 December 2021 the law transposing the EECC was
published in the Belgian State Gazette. It entered into force on
10 January 2022.
Consultation on draft communication on towerco
On 30 November 2021, the BIPT published a
“Communication” on the interpretation of the law concerning
rights and obligations of “towercos” regarding antenna site
sharing.
Social tariffs in the telecom sector
The federal government has initiated plans to review the
modalities (technical, nancial, operational) of the social tariff
discounts for certain user groups.
Over the month of December 2021, a public consultation on
the draft Decree to review the social tariffs was organised by
the BIPT. Among the new proposals are an extension of the
range of beneciaries, the automation of the allocation of the
social tariffs (which are a reduction on the retail tariff), and the
review of the nominal values of the amounts of social tariff
discounts. The social tariffs would apply for xed internet and
xed telephony mainly, with an additional social tariff for a
bespoke (more limited) group of mobile users.
Annual report 2021
29
2. Comments on the consolidated accounts
prepared according to IFRS standards
The scope of consolidation includes the following companies:
Orange Belgium S.A. (100%), the parent company, and
Orange Belgium’s subsidiaries: the Luxembourgian company
Orange Communications Luxembourg S.A. (100%), IRISnet
S.C.R.L. (28.16%), Smart Services Network S.A. (100%),
Walcom Business Solutions S.A. (100%), A3COM S.A.
(100%), A & S Partners S.A. (100%), Upsize N.V. (100%), BKM
N.V. (100%), CC@PS BV (100%) and MWingz S.R.L. (50%).
Orange Belgium S.A.
(the company’s ultimate majority
shareholder is Orange S.A.) is one of the main actors on the
telecommunications market in Belgium and Luxembourg.
Orange Belgium is listed on the Brussels Stock Exchange
(OBEL).
Orange Communications Luxembourg S.A.
, a company
organised and existing under the laws of Luxembourg,
was acquired as of 2 July 2007 by Orange Belgium S.A.
The purchase concerned 90% of the shares of Orange
Communications Luxembourg S.A. The remaining 10% of
shares were acquired on 12 November 2008. The company
has consolidated the results of Orange Communications
Luxembourg S.A. for 100%, as of 2 July 2007.
IRISnet S.C.R.L.
is a company constituted in July 2012 in
collaboration with the Brussels authorities in order to take
over the activities performed by the temporary association
Irisnet, and is responsible for the operation of the Irisnet 2
optical bre network and for the provision of xed telephony,
data transmission services (internet, e-mail) and other network
related services (video-conferencing, video surveillance, etc.).
The take-over of the activities took place on 1 November
2012. In this new legal structure, Orange Belgium S.A.
contributed in cash for 3,450,000 euros equivalent to 345,000
shares out of the 1,225,000 shares issued by the company.
Due to the deal structure, IRISnet S.C.R.L. is accounted for in
the accounts using the equity method.
Smart Services Network S.A.
(SSN) is a Belgian company
that distributes telecommunication and energy services
including those of Orange Belgium and Luminus. SSN’s route
to market is based on the principle of multi-level marketing.
SSN’s network consists of more than 1,000 independent
consultants. Smart Services Network S.A., a company
organised and existing under the laws of Belgium, was created
as of 30 September 2014. Orange Belgium S.A. contributed in
cash for 999,900 euros equivalent to 9,999 shares out of the
10,000 shares issued by the company. Atlas Services Belgium
S.A. contributed in cash for 100 euros equivalent to 1 share. In
2016, Orange Belgium S.A. contributed in cash in the capital
increase of Smart Services Network S.A. for 700,000 euros,
equivalent to 7,000 shares.
Walcom Business Solutions S.A.
, a company organised
and existing under the laws of Belgium, was created as of
13 July 2017. Walcom Business Solutions S.A. specialises
in the sales of telecommunication products and services for
the professional market. Orange Belgium S.A. contributed
in cash for 60,885 euros equivalent to 99 shares of the 100
shares issued by Walcom Business Solutions S.A. Walcom
S.A., liquidated during the accounting year 2020, contributed
in cash for 615 euros equivalent to 1 share. The results of
Walcom Business Solutions S.A are fully consolidated by the
company since 13 July 2017.
A3Com S.A.
was already an exclusive Orange Belgium agent,
specialised in telecommunications product sales and services
for residential customers through a network of 12 Orange
shops located in the Brussels region. A3Com S.A., a company
organised and existing under the laws of Belgium, was
acquired as of 30 September 2017 by Orange Belgium S.A.
The purchase concerned 100% of the 630 shares of A3Com
S.A. The results of A3Com S.A. are fully consolidated by the
company since 1 October 2017.
A&S Partners S.A.
also an existing Orange Belgium agent,
provides telecommunications services to B2B customers
within the Brussels region via a dedicated sales team of 35
professionals under the name of AS Mobility. A&S Partners
S.A., a company organised and existing under the laws of
Belgium, was acquired as of 30 September 2017 by Orange
Belgium S.A. The purchase concerned 100% of the 620
shares of A&S Partners S.A. The results of A&S Partners S.A.
are fully consolidated by the company since 1 October 2017.
Upsize N.V.
is a holding company that was acquired on
31 July 2019 for an enterprise value of €52.4 million. The
purchase concerned 100% of the 60,000 shares of Upsize
N.V. The results of Upsize N.V. are fully consolidated by the
company since 1 August 2019.
BKM N.V.
is a nationwide ICT integrator and a pioneer in cloud
UCC solutions. Upsize N.V. owns 100% of the 2,329 shares of
BKM N.V. BKM N.V. has a solid track-record in the SME and
CMA markets in Belgium. BKM N.V. has 220 specialist staff
who work in four areas of expertise: Unied Communications
& Collaboration (UCC) solutions; IT & security solutions;
Document & Visual solutions; and Connectivity solutions.
CC@PS BV
provides document and visual solutions to
SME customers via a team of 13 professionals, mainly in
West Flanders. BKM N.V. owns 100% of the 750 shares of
CC@PSBV.
MWingz S.R.L.
is a joint operation between Orange Belgium
S.A. and Proximus S.A., each owning 50% of the company
that will manage the unilateral and shared mobile radio access
network of both shareholders. In 2019 both companies
decided to build a shared mobile radio access network with
the objective to meet customers’ increasing demand for
mobile network quality and deeper indoor coverage. The
agreement will also allow a faster and more comprehensive
5G roll-out in Belgium. While sharing the common part of their
mobile radio access networks, both companies will continue
to have full control over their own core network and spectrum
assets ensuring differentiated services. MWingz S.R.L. is a
company organised and created under the laws of Belgium
and was created as of 6 December 2019.
Orange Belgium S.A. contributed in cash for 1 euro equivalent
to 1 share out of the 2 shares issued by the Company.
Proximus S.A. contributed in cash for 1 euro equivalent to
1 share. In April 2020, Orange Belgium did participate in the
capital increase of MWingz S.R.L. for 1,599,999 million euros.
Orange Belgium holds 50% of the shares of MWingz S.R.L.
This company started the operational activities as from 1 April
2020.
Annual report 2021
30
2.1 Consolidated statement of comprehensive income
In €m FY 2020 FY 2021
change
Mobile customers (excl. MVNOs) 4 906 5 232
6.6%
Revenues
1 314.9 1 363.5
3.7%Retail service revenues
905.9 945.1 4.3%
Equipment sales
132.2 141.1 6.7%
Wholesale revenues
246.2 241.9 -1.7%
Other revenues
30.5 35.3 15.6%
EBITDAaL 323.5 353.0 9.1%
% of Revenues
24.6% 25.9%
Net profit (loss) for the period
54.0 39.7 -26.4%
Earnings per share (€)
0.90 0.66 -26.5%
eCapex
1
-177.7 -204.1 14.8%
% of Revenues
13.5% 15.0%
Operating cash ow
2
145.8 148.9 2.2%
Organic cash ow
122.4 104.8 -14.4%
Net nancial debt
144.9 69.5 -52.0%
Net nancial debt / Reported EBITDAaL
0.5 0.2
1. eCapex excluding licence fees. In Q1 and Q3 2021 Orange Belgium paid 10.9 million euros on licence fees each quarter.
2. Operating cash ow dened as EBITDAaL – eCapex excluding licence fees.
In €m FY 2020 FY 2021
change
Direct costs
-549.0 -570.9 4.0%
Labour costs
-146.9 -148.6 1.1%
Indirect costs including RouA and nance lease
costs
-295.5 -290.9 -1.5%
of which RouA and finance lease costs
-52.5 -54.1
-991.4
-1 010.5
1.9%Depreciation and other expenses
Depreciation and amortization increased from €250.2 million in
2020 to €279.2 million in 2021.
Impairment of goodwill
Impairment of goodwill amounted to €14.9 million in 2021.
Goodwill is tested for impairment each year. For BKM N.V., as
the recoverable value did not exceed the carrying amount, an
impairment of €14.9 million was recorded at year end. Other
goodwill has remained unchanged.
EBIT
EBIT decreased from €69.4 million in 2020 to €55.7 million in
2021.
Financial result
Net nancial expenses decreased from €5.3 million in 2020 to
€3.2 million in 2021.
Taxes
Full-year tax expense increased from €10.1 million in 2020 to
€12.8 million in 2021.
Net profit and earnings per share
The full-year net prot for year 2021 was €39.7 million.
Earnings per share totalled €0.66 in 2021, compared to €0.90
for the previous restated year.
Revenues
Group revenues reached €1,363.5 million in 2021, up by 3.7%
in comparison to last year. Retail service revenues amounted
to €945.1 million, up by 4.3%, supported by convergent
service revenues (+15.5%) and xed revenues (+19.2%).
Additionally, equipment sales increased, while wholesale
revenues decreased mainly explained by lower SMS trafc.
Result of operating activities before depreciation and
other expenses
EBITDAaL increased by 9.1% to €353.0 million due to higher
retail services revenues and continuous cost efciencies. The
margin improved 129bp as it reached 25.9%.
Total operational expenses for the full year increased by 1.9%
to €1,010.5 million. The following provides an overview of the
different expenses:
• Direct costs increased by 4.0% to €570.9 million mainly due
to more equipment costs and cable costs, partially offset by
lower wholesale costs and other direct costs.
• Labour costs grew by 1.1% to €148.6 million partially due to
an increased activity rate and higher salary indexation.
• Indirect costs decreased by 1.5% to €290.9 million mainly
driven by cost management.
Annual report 2021
31
in €m FY 2020 FY 2021
EBITDAaL 323.5 353.0
eCapex
1
-177.7 -204.1
Operating cash flow
2
145.8 148.9
in €m FY 2020 FY 2021
Net profit (loss) before the period
54.0 39.7
Adjustments to reconcile net prot (loss) to cash generated from operations
337.0 397.9
Changes in working capital requirements
-9.3 -21.2
Other net cash out
-37.2 -48.6
Net cash provided by operating activities
344.4 367.9
eCapex -177.7 -225.9
Increase (decrease) in xed assets payables
4.1 14.7
Repayment of lease liabilities
-48.4 -51.8
Organic cash flow
122.4 104.8
1. eCapex excluding licence fees. In Q1 and Q3 2021 Orange Belgium paid 10.9 million euros on licence fees each quarter.
2. Operating cash ow dened as EBITDAaL – eCapex excluding licence fees.
2.2 Consolidated statement of financial position
Assets
Goodwill
is tested for impairment each year. For BKM N.V.,
as the recoverable value did not exceed the carrying amount,
an impairment of 14.9 million euros was recorded at year end.
Other goodwill remained unchanged.
No other impairment losses were recorded in 2021. The
carrying year-end value is €89.5million.
Intangible assets
mainly relate to mobile licences and
spectrum fees. The net carrying value at year-end was €247.4
million compared to €250.0 million at the previous year-end.
Property, plant and equipment
mainly comprises network
facilities and equipment. The net book value at year-end was
€662.8 million compared with €707.6 million at 2020 year-end.
Rights-of-use of leased assets
relates to the application of
IFRS 16, decreased from €303.8 million to 299.2 million euros
as at 31 December 2021.
Inventories
decreased by €2.7million to €24.0 million, mainly
due to out of stocks for some references related to the
electronic component crisis.
Trade receivables
decreased from €207.5 million at the
end of 2020 to €188.1 million as at 31 December 2021. This
decrease results mainly from less open Roaming invoices at
year end.
Other current assets and prepaid expenses
decreased by
€1.5 million to €12.7 million in 2021, driven mainly by lower
prepaid expenses.
Other assets
related to contracts with customers totalled
€61.7 million, a decrease of €1.5 million compared to 2020.
This variation is due to a slight decrease in the number of
subsidized contracts outstanding at year-end.
Cash and cash equivalents
decreased by €7.1 million to
€53.7 million at the end of 2021. More details on cash ows
can be found in the cash ow statement.
Total equity and liabilities
Total equity
increased by €10.3million to €624.2 million. The
change in retained earnings (€8.7 million) results mainly from
the net prot for the period (€39.7million) and the payment of
the 2020 dividend (€30.0 million).
Non-current liabilities
increased from €350.7 million at the
end of 2020 to €464.9 million at the end of 2021. Orange
Belgium S.A. and its parent company, Atlas Services Belgium
S.A. signed an agreement on 10 March 2021 regarding the
renancing of the existing Orange Belgium Revolving Credit
Facility for 120 million euros with a maturity of 5 years.
Current liabilities
decreased to €570.6 million at the end of
2021 from €787.3million at the end of 2020. This decrease
is mainly the result of the transfer of the Credit Facility
Agreement (€200 million) in 2020. Bearing in mind the fact that
the remaining period until the maturity date as at 31 December
2020 would be less than 12 months, Orange Belgium S.A.
presented this nancial liability as current in the consolidated
statement of nancial position as per 31 December 2020.
Orange Belgium signed a new RCF on 10 March 2021.
Dividends
The Board of Directors will not propose a dividend or dividend
authorisation for the nancial year 2021 at the Annual General
Meeting considering the upcoming spectrum auctions and the
balance sheet impact of the acquisition of VOO.
2.3 Liquidity and capital resources
Cash flows
Orange Belgium uses Operating cash ow and Organic cash
ow as the main performance metrics for analysing cash
generation. The table below shows the reconciliation to net
debt.
Operating cash flow
is dened as EBITDAaL less eCapex
(excluding licence fees). Operating cash ow increased
by €3.1 million mainly due to higher EBITDAaL (€29.5
million compared to 2020), partially offset by an increase in
investments of €26.4 million.
Organic cash flow
measures the net cash provided by
operating activities, less eCapex and repayment of lease
liabilities.
Organic cash ow decreased from €122.4 million to €104.8
million, mainly explained by the increase in investments in
2021 (eCapex).
Annual report 2021
32
3. Orange Belgium S.A.’s statutory accounts
2021
The statutory income statement and balance sheet are
presented on pages 98 to 102. As for the exhaustive annual
accounts of Orange Belgium S.A., please refer to the Central
Balance Sheet Ofce website (http://www.nbb.be/en). Key
changes in statutory income statement and balance sheet
are essentially identical to those discussed in section 2 of this
Management Report.
4. Events after the reporting period
On 22 March 2022, the BIPT declared that ve applications
were submitted and retained for the auction for the 900 MHz,
1800 MHz and 2100 MHz radio frequency bands, which are
mainly used for 2G, 3G and 4G applications, and that there are
equally ve candidates retained for the 3400-3800 MHz band,
which is a core band for the 5G technology. For the other
5G-related bands, the BIPT announced that 5 applicants may
obtain spectrum in the 700 MHz band, and that 3 candidates
applied and were retained for the 1400 MHz band.
The identity of the operators is not disclosed as the procedure
is anonymous until the nal outcome of the auction,
announced for June 2022.
Also on 22 March 2022, the IT-group NRB announced it is one
of the candidates for the spectrum which it would use for B2B
applications only.
None of the above mentioned events were adjusting events
and no other adjusting events arose between the balance
sheet date and the date at which the nancial statements have
been authorised for issue.
5. Outlook
Orange Belgium expects low-single digit revenue growth
in 2022 considering further uptake on its postpaid and
convergent customer base.
For 2022, the Company expects EBITDAaL between €350m
and €370m. This range takes into account:
• Covid-19 impact
• Loss of Mobile Vikings as from April 2022
• Energy costs increase
• Labour cost indexation
In addition, total eCapex is expected to be between €210m
and €230m.
The outlook 2022 does not take into account the integration
of VOO.
6. Legal disputes
The following section summarizes Orange Belgium’s legal
disputes.
Telecom masts
Since 1997, certain municipalities and four provinces have
adopted local taxes, on an annual basis, on pylons, masts or
antennas erected within their boundaries. Orange Belgium
continues to le scal objections against each tax assessment
notice received concerning these taxes. These taxes are
currently being contested in Civil Courts (Courts of First
Instance - Tax Chamber and Courts of Appeal).
Net debt
Net debt at year-end was €69.5 million, compared to €144.9
million at the end of 2020. It includes an Orange S.A. revolving
credit facility and credit lines from banks.
€m, period ended
31.12.2020 31.12.2021
Cash & cash equivalents
Cash -32.0 -24.0
Cash equivalents
-28.8 -29.8
-60.8 -53.7
Financial liabilities
Intercompany short-term borrowing
200.4 0.0
Third parties short-term borrowing
1.9 1.5
Intercompany long-term borrowing
3.4 121.8
205.8 123.3
Net debt (Financial liabilities minus cash and cash equivalents)
144.9 69.5
Net debt/Reported EBITDAaL
0.5 0.2
As at 31 December 2021, gearing remained very conservative
with a net debt/ reported EBITDAaL ratio of 0.2x.
Annual report 2021
33
The mobile operators have concluded beginning of 2021
an agreement for the period 2021-2022 with the Walloon
government. Orange Belgium engages itself to pay an amount
of 1.78 million euros over 2 years and to invest an incremental
amount of 3.6 million euros in telecom infrastructure in
the Walloon region in the period 2021-2022. An amount of
491.833,48€ was paid in December 2021 to the Walloon
region. This is the rst tranche of 0,9 million€ from which
the taxes received from local authorities for 2021 have been
deducted.
Access to Coditel Brabant (Telenet) ’s cable
network
After Orange Belgium paid the provision for the cable
wholesale access set-up fees, Coditel Brabant (Telenet)
failed to provide such access within the regulatory 6-month
period. This, in combination to the lack of progress on the
development of an effective wholesale service, prompted
Orange Belgium to initiate legal action against Coditel/Telenet
for breach of its regulatory obligations end of December
2016. As the implementation of a technical solution was still
ongoing beginning 2018, the proceedings were put on hold.
The case was reactivated and Telenet submitted briefs on 6
March 2020. Hearings took place in October 2021 and on 8
December 2021 the court decided that Telenet committed
a fault because it did not respect the regulation on granting
Orange access to its network. An expert is appointed to
calculate the damages.
Access to Telenet’s cable network – own channel
Based on the decisions on regulated access to the
cable networks Orange Belgium is entitled to offer “own
channels” to its retail TV customers, i.e. channels that are
not commercially offered by the cable operators. While VOO
provided such own channel (Eleven Sports 3) on its network,
Telenet refused to offer such access at reasonable conditions.
Beginning 2018, Orange Belgium initiated proceedings against
Telenet for breach of its regulatory obligations before the
Commercial Court of Antwerp.
On 30 May 2018 the Commercial Court of Antwerp dismissed
Orange Belgium’s claim. Orange Belgium appealed this
judgment.
On 11 April 2019 the Court of appeal found Telenet in breach
of its regulatory obligations as well as guilty of abusing its
dominant position. The Court ordered Telenet to provide
reasonable conditions within one month subject to penalty
payment of €2500/day afterwards.
Telenet appealed the decision of the Court of Appeal at the
Supreme Court which dismissed the appeal of Telenet on 7
October 2021. The Supreme Court conrmed the ndings of
the Court of Appeal regarding Telenet abusing its position on
the market and putting forward unreasonable conditions for
regulated services. As a consequence, the judgment of 11
April 2021 of the Court of Appeal of Antwerp is nal.
Orange Belgium issued a claim of €250,000 (total amount
of the penalty) against Telenet for noncompliance with the
decision of the Court of Appeal. This claim was attacked
by Telenet with the attachment judge who decided on 22
October 2020 that the claim of OBE was unfounded. Orange
Belgium appealed the judgment on 7 December 2020 at the
Court of Appeal in Antwerp. The introduction hearing took
place on 6 January 2021 on which a calendar for exchanging
submissions was xed. The pleadings are set for 23 March
2022.
Access to Telenet’s cable network – own internet
profile
Under the regulation of the access to the cable networks
alternative operators have the right to commercialise internet
proles that are not commercialised by the regulated cable
operator (“own internet proles”), i.e. an internet prole with
different upload/download speeds and/or volumes than the
internet speeds and/or volumes offered by the cable operator
to its own retail clients. Telenet refused to grant such own
prole until May 2018. Orange Belgium sent a formal notice
to Telenet in January 2019 requesting a compensation for
the damages incurred. Facing the refusal of Telenet to pay
damages, Orange Belgium introduced a damage claim
before the Enterprise Court. On 14 February 2020 the
Enterprise Court found Telenet in breach with its regulatory
obligations and granted a part of the claimed damages.
Orange Belgium decided to appeal the judgment. The Court
of Appeal conrmed on 22 December 2021 the decision of the
Enterprise Court concerning the error of Telenet.
Lycamobile
On 19 February 2016, Lycamobile Belgium Limited and
Lycamobile BVBA initiated legal proceedings against
Orange Belgium (previously Mobistar) before the Brussels
Commercial Court claiming damages for the alleged belated
commercial launch of Lycamobile’s 4G services. The case was
heard on 10 March 2017. By judgment of 12 May 2017, the
Brussels Commercial Court dismissed the claim and ordered
Lycamobile to pay Orange Belgium €18,000 as compensation
for procedural costs. The judgment was served on 3 July
2017 and Lycamobile paid the full amount. On 11 August
2017, Lycamobile led an appeal before the Brussels Court of
Appeal. An introductory hearing took place on 21 September
2017 and a calendar for the ling of trial briefs was set. Parties
have exchanged trial briefs. The case has been handled at the
hearing of 1 October 2021. By judgment of 29 October 2021,
the Brussels Court of Appeal conrmed the rst judgment and
sentenced Lycamobile to pay the procedural costs to Orange
Belgium. Unless Lycamobile would initiate proceedings
before the Supreme Court, this le should be nally settled by
this judgment.
Euphony Benelux NV in bankruptcy
On 2 April 2015, Orange Belgium was summoned by the
receivers of Euphony Benelux NV to a hearing on 17 April
2015 at the Brussels Commercial Court. The bankruptcy
receivers claim that Orange Belgium should pay a provisional
amount of one (1) euro for overdue commissions as well as
an eviction fee. In this context, the bankruptcy receivers claim
that Orange Belgium should submit all relevant documents
to allow the bankruptcy receivers to calculate the amounts
claimed.
On 17 April 2018, the Court dismissed the claim relating to the
eviction fee and appointed an expert for the claim relating to
the overdue commissions. Orange Belgium has led an appeal
at the Brussels Court of Appeals. An introductory hearing took
place and the Court of Appeals has set a calendar for the ling
of trial briefs. Parties have exchanged trial briefs. No pleading
date has been set.
Annual report 2021
34
RAN sharing
The provisional measures imposed by the Belgian Competition
Authority expired on 16 March 2020 and Orange Belgium
and Proximus have resumed works for the implementation of
the project. On 1 April 2020 both companies transferred the
relevant people to the newly created joint operation “MWingz”.
In parallel, a procedure on the merits has been initiated by the
Belgian Competition Authority. The procedure is ongoing at
the moment.
Transitpoints – interconnection links
Telenet included in its regulated reference offer of 2014 a
charge of €5k per GB internet interconnect trafc capacity.
The charges were not mentioned in any nal regulatory price
decision. This charge was not applied during 2014, 2015,
2016, 2017. Only as of 2018 Telenet started charging this
amount, for each transitpoint and each interconnect capacity
increase. Orange Belgium systematically disputed the
amounts charged for the transitpoints.
The May 2020 wholesale charges decision imposes only
a charge of ~170€/month per 100 GB. Orange Belgium
continued to refuse to pay any charges based on the old
amounts. Telenet started a legal procedure before the
enterprise court of Mechelen. The pleadings will take place on
25 March 2022.
7. Justification of the application of the going
concern accounting principles
In view of Orange Belgium Group’s nancial results in the
course of the nancial year ending 31 December 2021, the
company is not subject to the application of article 3:6 §1
(6°) of the Belgian Code of Companies and Associations
relating to provision of evidence of the application of the going
concern accounting rules.
8. Other disclosures required in accordance
with art. 3:6 and 3:32 of the Belgian Code of
Companies and Associations
Art 3:6 §1.4
– Research and development: activities are
carried out in this respect and especially in the eld of the
cable. Orange Belgium recently developed a patent and
benets from scal deductions due to its R&D activities.
Art 3:6 §1.7
– Treasury shares: reference should be made to
note 9 of the IFRS nancial statements.
Art 3:6 §1.7
– Use of nancial instruments: reference should
be made to note 8 of the IFRS nancial statements.
Art 3:6 §4/ Art 3:32 §2
– Non-nancial information disclosure.
In accordance with Art 3:6 §4 and Art 3:32 §2, Orange
Belgium S.A. is exempted from the obligation to prepare
and disclose the non-nancial information since it is also a
subsidiary of Orange S.A. who prepares a consolidated Board
of Directors’ annual report in accordance with the applicable
EU directive.
Annual report 2021
35
Annual report 2021
36
38
Consolidated financial statements
38
Consolidated statement of comprehensive income
39
Consolidated statement of nancial position
40
Consolidated cash ow statement
41
Consolidated statement of changes in equity
42
Segment information
In this document, unless otherwise indicated, the terms “the company” and
“Orange Belgium S.A.” refer to Orange Belgium Société Anonyme (formerly
Mobistar), and the terms “Orange Belgium”, “the Group” and “the Orange
Belgium Group” refer to the Orange Belgium company together with its
consolidated subsidiaries.
Consolidated financial
statements
46
Notes to the consolidated financial statements
46
Note 1: Description of business and basis of preparation
56
Note 2: Sales, trade receivables, other current and non-current assets and
impact of the health crisis linked to the Covid-19 pandemic
58
Note 3: Expenses, prepaid and inventory
63
Note 4: Goodwill
67
Note 5: Other intangible assets and property, plant and equipment
70
Note 6: Taxes and levies
72
Note 7: Interests in associates and joint ventures
72
Note 8: Financial assets, liabilities and nancial result
76
Note 9: Shareholders’ equity
77
Note 10: Commitments and contingencies
77
Note 11: (Non)-current provisions
78
Note 12: Related parties
79
Note 13: Liabilities related to contracts with customers and other assets
related to contracts with customers
81
Note 14: Lease agreements
82
Note 15: Signicant accounting policies
94
Note 16: Subsequent events
95
Note 17: Glossary
Annual report 2021
37
38
Annual report 202
1
1.
Consolidated financial statements
1.1 Consolidated statement of comprehensive income
in thousand EUR
Ref.
31.12.2021
31.12.2020
2
Retail service revenues
2
Convergent service revenues
2
Mobile only services revenues
2
Fixed only service revenues
2
IT & Integration Service
2
Equipment sales
2
Wholesale revenues
2
Other revenues
2
Revenues
3
Purchase of material
- 185 409
- 167 684
3
Other direct costs
- 376 851
- 374 644
3
Impairment loss on trade and other receivables, including contract assets
- 8 672
- 6 630
3
Direct costs
- 570 932
- 548 958
3
Labour costs
- 148 615
- 146 949
3
Commercial expenses
- 33 789
- 42 867
3
Other IT & Network expenses
- 97 359
- 95 337
3
Property expenses
- 8 508
- 14 493
3
General expenses
- 63 587
- 61 523
3
Other indirect income
3
Other indirect costs
- 60 177
- 52 882
3/14
Depreciation of right-
of
-use of leased assets
- 54 085
- 52 502
3
Indirect costs
- 288 656
- 293 211
3
Other restructuring costs (*)
- 4 035
- 5 644
5
Depreciation and amortization of other intangible assets and property, plant and equipment
- 279 206
- 250 240
4
Impairment of goodwill
- 14 937
5
Impairment of fixed assets
- 1 638
- 689
7
Share of profits (losses) of associates
Operating Profit (EBIT)
8
Financial result
- 3 232
- 5 287
8
Financial costs
- 3 232
- 5 287
8
Financial income
Profit (loss) before taxation (PBT)
6
Tax expense
- 12 774
- 10 089
Net profit (loss) for the period (*
*)
Profit (loss) attributable to equity holders of the parent
Consolidated Statement of Comprehensive Income
Net profit (loss) for the period
Other comprehensive income (cash flow hedging net of tax)
- 260
Total comprehensive income for the period
Part of the total comprehensive income attributable to equity holders of the parent
Basic earnings per share (in EUR)
Weighted average number of ordinary shares (excl. treasury shares)
Diluted earnings per share (in EUR)
Diluted weighted average number of ordinary shares (excl. treasury shares)
* Restructuring costs consist of contract termination costs,redundancy charges and acquisition & integration costs
.
** Since there are no discontinued operations, the net profit or loss of the period corresponds to the result of continued operations.
39
Annual report 2021
1.2 Consolidated statement of financial position
in thousand EUR
Ref.
31.12.2021
31.12.2020
ASSETS
4
Goodwill
5
Other intangible assets
5
Property, plant and equipment
14
Rights-
of
-use of leased assets 7
Interests in associates and joint ventures
8
Non-current financial assets
2
Other non-current assets
6
Deferred tax assets
Total non-current assets
3
Inventories
2
Trade receivables
13
Other Assets related to contracts with customers
Current financial assets
8
Current derivatives assets
2
Other current assets
6
Operating taxes and levies receivables
6
Current tax assets
3
Prepaid expenses
8
Cash and cash equivalents
Total current assets
Total Assets
EQUITY AND LIABILITIES
9
Share capital
Legal reserve
Retained earnings (excl. legal reserve)
9
Treasury shares
- 1 519
Equity attributable to the owners of the parent
Total equity
8
Non-current financial liabilities
14
Non-current lease liabilities
Non-current employee benefits
5/11
Non-current provisions for dismantling
11
Other non-current liabilities
6
Deferred tax liabilities
Total non-current liabilities
5
Current fixed assets payable
3/8
Trade payables
8
Current financial liabilities
14
Current lease liabilities
8
Current derivatives liabilities
3
Current employee benefits
5
Current provisions for dismantling
3
Current restructuring provisions
3
Other current liabilities
6
Operating taxes and levies payables
6
Current tax payables
13
Liabilities related to contracts with customers
Deferred income
Total current liabilities
Total Equity and Liabilities
40
Annual report 202
1
1.3 Consolidated cash flow statement
in thousand EUR
Ref.
31.12.2021
31.12.2020
Operating Activities
Consolidated net profit
Adjustments to reconcile net profit (loss) to cash generated from operations
3
Operating taxes and levies
5
Depreciation and amortization of other intangible assets and property, plant and equipment
3/14
Depreciation of right-
of
-use assets
4
Impairment of goodwill
5
Impairment of non-current assets
Gains (losses) on disposal
- 1 725
- 2 742
Changes in other provisions
- 1 045
- 2 349
7
Share of profits (losses) of associates and joint ventures
- 276
- 179
6
Income tax expense
8
Finance costs, net
Operational net foreign exchange and derivatives
- 27
- 51
Share-based compensation
- 152
2
Impairment loss on trade and other receivables, including contract assets
Changes in working capital requirements
3
Decrease (increase) in inventories, gross
Decrease (increase) in trade receivables, gross
3
Increase (decrease) in trade payables
- 37 718
- 18 526
13
Change in other assets related to contracts with customers
13
Change in liabilities related to contracts with customers
- 2 946
- 6 777
Changes in other assets and liabilities
- 1 232
Other net cash out
Operating taxes and levies paid
- 35 288
- 19 359
Interest paid and interest rates effects on derivatives, net
- 3 816
- 5 263
6
Income tax paid
- 9 508
- 12 604
Net cash provided by operating activities
Investing Activities
Purchases of property, plant and equipment and intangible assets
5
Purchases of property, plant and equipment and intangible assets
- 225 881
- 177 734
Increase (decrease) in fixed assets payables
Organic cash flow (*)
4
Cash paid for investments securities and acquired businesses, net of cash acquired
- 150
- 1 706
Decrease (increase) in securities and other financial assets
- 98
Net cash used in investing activities
- 211 318
- 175 399
Financing Activities
8
Long-term debt redemptions and repayments
- 81 897
- 42 174
14
Repayment of lease liabilities
- 51 834
- 48 419
8
Increase (decrease) of bank overdrafts and short-term borrowings
- 6 472
Purchase of treasury shares
- 1 322
9
Dividends paid to owners of the parent company
- 30 007
- 30 007
Net cash used in financing activities
- 163 616
- 128 394
Net change in cash and cash equivalents
- 7 082
8
Cash and cash equivalents - opening balance
o/w cash
o/w cash equivalents
Cash change in cash and cash equivalents
- 7 082
8
Cash and cash equivalents - closing balance
o/w cash
o/w cash equivalents
* Net cash flow from operations less acquisitions of tangible and intangible assets plus proceeds from disposals of tangible and intangible assets minus
repayment of lease liabilities.
41
Annual report 2021
2.1 Consolidated statement of changes in equity
in thousand EUR
Ref.
Share
capital
Legal
reserve
Retained
earnings
Treasury
shares
Total
equity
Balance at 31 December 2020
- 1 519
Net profit for the period
Other comprehensive income
- 260
- 260
Total comprehensive income for the period
9
Treasury Shares
- 1 519
Employee - Share-based compensation
9
Declared dividends
- 30 007
- 30 007
Balance as at 31 December 2021
in thousand EUR
Ref.
Share
capital
Legal
reserve
Retained
earnings
Treasury
shares
Total
equity
Balance at 31 December 2019 (*), as previously reported
- 197
4
PPA adjustment Upsize N.V.
- 575
- 575
Restated balance as of 31 December 2019
- 197
Net profit for the period
Other comprehensive income
Total comprehensive income for the period
9
Treasury Shares
- 1 322
- 1 322
Employee - Share-based compensation
- 277
- 277
9
Declared dividends
- 30 007
- 30 007
Balance as at 31 December 2020
- 1 519
* The 31 December 2019 consolidated statement of financial position
has been restated, reflecting the impact of the purchase price allocation (“PPA”) for the
Upsize N.V. acquisition, which was not yet available at year-end 2019. Reference should be made to note 4.
42
Annual report 202
1
1.5 Segment information
Consolidated statement of comprehensive income for the year ended
31
December 202
1 in thousand EUR
31.12.2021
Orange
Belgium
Orange
Luxembourg
Interco
elimination
Orange
Belgium
Group
Retail service revenues
899 717
45 428
945 145
Convergent service revenues
254 975
254 975
Mobile only service revenues
541 156
37 672
578 828
Fixed only service revenues
63 322
7 756
71 078
IT & Integration service revenues
40 264
40 264
Equipment sales
127 219
13 911
141 130
Wholesale revenues
232 852
14 999
- 5 911
241 940
Other revenues
47 717
1 952
- 14 412
35 257
Total revenues
1 307 505
76 290
- 20 323
1 363 472
Direct costs
- 553 503
- 37 753
20 324
-
570 932
Labour costs
- 140 598
- 8 017
- 148 615
Indirect costs, of which
- 271 393
- 17 262
- 288 656
Operational taxes and fees
- 22 932
- 2 851
- 25 783
Depreciation of right-
of
-use of leased assets
- 49 680
- 4 405
- 54 085
Other restructuring costs
- 3 877
-
158
- 4 035
Depreciation, amortization of other intangible assets and property, plant and equipment
- 271 124
- 8 082
- 279 206
Impairment of goodwill
- 14 937
- 14 937
Impairment of fixed assets
- 1 638
- 1 638
Share of profits (losses) of associates
276
276
Operating Profit (EBIT)
50 711
5 018
55 729
Net financial income (expense)
- 3 106
-
126
- 3 232
Profit (loss) before taxation (PBT)
47 605
4 892
52 497
Tax expense
- 11 351
- 1 423
- 12 774
Net profit (loss) of the period
36 254
3 469
39 723
Reconciliation from EBITDAaL to net profit (loss) for the period for the year ended 31 December 2021
in thousand EUR
31.12.2021
Orange
Belgium
Orange
Luxembourg
Interco
elimination
Orange
Belgium
Group
EBITDAaL
339 751
13 258
353 009
Share of profits (losses) of associates
276
276
Impairment of goodwill
- 14 937
- 14 937
Impairment of fixed assets
- 1 638
- 1 638
Depreciation, amortization of other intangible assets and property, plant and equipment
- 271 124
- 8 082
- 279 206
Other restructuring costs
- 3 877
-
158
- 4 035
Finance lease costs
2 260
2 260
Operating profit (EBIT)
50 711
5 018
55 729
Financial result
- 3 106
-
126
- 3 232
Profit (loss) before taxation (PBT)
47 605
4 892
52 497
Tax expense
- 11 351
- 1 423
- 12 774
Net profit (loss) for the period
36 254
3 469
39 723
43
Annual report 2021
Consolidated statement of comprehensive income for the year ended 31 December 20
20
in thousand EUR
31.12.2020
Orange
Belgium
Orange
Luxembourg
Interco
elimination
Orange
Belgium
Group
Retail service revenues
861 208
44 731
905 939
Convergent service revenues
220 759
220 759
Mobile only service revenues
549 670
35 494
585 164
Fixed only service revenues
50 396
9 237
59 633
IT & Integration service revenues
40 383
40 383
Equipment sales
118 158
14 086
132 244
Wholesale revenues
238 983
10 810
- 3 619
246 174
Other revenues
44 103
1 235
- 14 827
30 511
Total revenues
1 262 452
70 862
- 18 446
1 314 868
Direct costs
- 532 166
- 35 238
18 446
- 548 958
Labour costs
- 138 955
- 7 994
- 146 949
Indirect costs, of which
- 276 966
- 16 245
- 293 211
Operational taxes and fees
- 14 468
- 2 560
- 17 028
Depreciation of right-
of
-use of leased assets
- 47 924
- 4 578
- 52 502
Other restructuring costs
- 5 248
-
396
- 5 644
Depreciation, amortization of other intangible assets and property, plant and equipment
- 242 408
- 7 832
- 250 240
Impairment of fixed assets
-
689
-
689
Share of profits (losses) of associates
179
179
Operating Profit (EBIT)
66 199
3 157
69 356
Net financial income (expense)
- 5 634
347
- 5 287
Profit (loss) before taxation (PBT)
60 565
3 504
64 069
Tax expense
- 10 565
476
- 10 089
Net profit (loss) for the period
50 000
3 980
53 980
Reconciliation from EBITDAaL to net profit (loss) for the period for the year ended 31 December 20
20
in thousand EUR
31.12.2020
Orange
Belgium
Orange
Luxembourg
Interco
elimination
Orange
Belgium
Group
EBITDAaL
312 114
11 385
323 499
Share of profits (losses) of associates
179
179
Impairment of fixed assets
-
689
-
689
Depreciation, amortization of other intangible assets and property, plant and equipment
- 242 408
- 7 832
- 250 240
Other restructuring costs
- 5 248
-
396
- 5 644
Finance lease costs
2 251
2 251
Operating profit (EBIT)
66 199
3 157
69 356
Financial result
- 5 634
347
- 5 287
Profit (loss) before taxation (PBT)
60 565
3 504
64 069
Tax expense
- 10 565
476
- 10 089
Net profit (loss) for the period
50 000
3 980
53 980
44
Annual report 202
1
Consolidated statement of financial position for the year ended 31 December 2021
in thousand EUR
31.12.2021
Orange
Belgium
Orange
Luxembourg
Interco
elimination
Orange
Belgium
Group
Goodwill
38 610
50 864
89 474
Other intangible assets
240 217
7 222
247 439
Property, plant and equipment
643 980
18 790
662 770
Rights-
of
-use of leased assets 286 564
12 600
299 164
Interests in associates and joint ventures
5 760
5 760
Non-current assets included in the calculation of the net financial debt
2 219
2 219
Other
479
2 022
2 501
Total non-current assets
1 217 829
91 498
1 309 327
Inventories
22 849
1 175
24 024
Trade receivables
155 128
36 008
- 3 009
188 127
Prepaid expenses
1 591
3 384
4 975
Current assets included in the calculation of the net financial debt
43 398
10 580
53 978
Other
83 063
3 197
- 7 016
79 244
Total current assets
306 028
54 344
- 10 025
350 347
Total assets
1 523 856
145 842
- 10 025
1 659 672
Total equity
624 156
624 156
Non-current employee benefits
73
73
Non-current liabilities included in the calculation of the net financial debt
121 809
121 809
Non-current lease liabilities
244 542
10 709
255 251
Other
82 271
5 523
87 794
Total non-current liabilities
448 695
16 232
464 927
Current fixed assets payable
69 956
1 698
71 654
Trade payables
228 890
32 941
- 3 009
258 822
Current employee benefits
32 457
1 653
34 110
Deferred income
191
191
Current lease liabilities
42 779
1 890
44 669
Current liabilities included in the calculation of the net financial debt
1 686
7 034
- 7 016
1 704
Others
155 321
4 119
159 440
Total current liabilities
531 280
49 335
- 10 025
570 590
Total equities and liabilities
979 974
65 567
614 131
1 659 672
45
Annual report 2021
Consolidated statement of financial position for the year ended 31 December 20
20
in thousand EUR
31.12.2020
Orange
Belgium
Orange
Luxembourg
Interco
elimination
Orange
Belgium
Group
Goodwill
53 547
50 864
104 411
Other intangible assets
241 981
7 997
249 978
Property, plant and equipment
689 335
18 256
707 591
Rights-
of
-use of leased assets 293 560
10 243
303 803
Interests in associates and joint ventures
5 485
5 485
Non-current assets included in the calculation of the net financial debt
2 253
2 253
Other
480
3 290
3 770
Total non-current assets
1 286 641
90 650
1 377 291
Inventories
24 793
1 892
26 685
Trade receivables
170 473
40 058
- 3 048
207 483
Prepaid expenses
2 418
4 391
6 809
Current assets included in the calculation of the net financial debt
50 604
10 513
61 117
Other
76 554
3 162
- 7 107
72 609
Total current assets
324 842
60 016
- 10 155
374 703
Total assets
1 611 483
150 666
- 10 155
1 751 994
Total equity
613 925
613 925
Non-current employee benefits
12
12
Non-current liabilities included in the calculation of the net financial debt
3 496
3 496
Non-current lease liabilities
251 800
7 822
259 622
Other
82 070
5 539
87 609
Total non-current liabilities
337 378
13 361
350 739
Current fixed assets payable
52 421
4 574
56 995
Trade payables
260 160
39 413
- 3 048
296 525
Current employee benefits
32 210
1 488
33 698
Deferred income
1 570
1 570
Current financial liabilities
42 009
2 420
44 429
Current liabilities included in the calculation of the net financial debt
202 623
7 105
- 7 107
202 621
Other
145 918
5 574
151 492
Total current liabilities
736 911
60 574
- 10 155
787 330
Total equity and liabilities
1 074 289
73 935
603 770
1 751 994
46
Annual report 202
1
2. Notes to the consolidated financial
statements
Note 1: Description of business and basis of preparation of the
consolidated financial statements
1.
Description of business
(the company’s ultimate majority shareholder is Orange S.A.
telecommunications market in Belgium and Luxembourg. Orange Belgium
convergent actor, the company provides mobile telecommunication, internet and TV services to residential clients, as well as
providing its partners with access to its
infrastructure and service capacities. Orange Belgium’s high
-performance mobile network
supports 2G, 3G, 4G and 4G+ technology and is the subject of on-going investments.
Orange Communications Luxembourg S.A
.
, incorporated under the laws of Luxembourg, was acquired as of 2 July 2007 by
Orange Belgium S.A. The purchase concerned 90% of the shares of Orange Communications Luxembourg S.A. The remaining
10% of shares were acquired on 12 November 2008. The results of Orange Communications Luxembourg S.A. are fully
consolidated by the company since 2 July 2007.
Smart Services Network S.A.
(SSN) is a Belgian company that distributes telecommunication and energy services including
those of Orange Belgium and Luminus.
SSN’s route to market is based on the principle of multi
-
level marketing. SSN’s network consists of more than 1,000 independent consultants.
Smart Services Network S.A., incorporated under the laws of Belgium, was created as of 30 September 2014. Orange Belgium
S.A. contributed in cash for 999,900 euros equivalent to 9,999 shares out of the 10,000 shares issued by the company. Atlas
Services Belgium S.A. contributed in cash for 100 euros equivalent to 1 share. This one share has been sold by Atlas Services
Belgium S.A. to Orange Belgium S.A. during the accounting year 2020.
In 2016, Orange Belgium S.A. contributed in cash to the capital increase of Smart Services Network S.A. for 700,000 euros,
equivalent to 7,000 shares.
IRISnet S.C.R.L.
is a company constituted in July 2012 in collaboration with the Brussels authorities in order to take over the
activities performed by the temporary association Irisnet, and is responsible for the operation of the Irisnet 2 optical fibre network
and for the provision of fixed telephony, data transmission services (internet, e-mail) and other network-related services (video-
conferencing, video surveillance, etc.).
The take-over of the activities took place on 1 November 2012. In this new legal structure, Orange Belgium S.A. contributed in
cash for 3,450,000 euros equivalent to 345,000 shares out of the 1,225,000 shares issued by the company.
Walcom Business Solutions S.A.,
incorporated under the laws of Belgium, was created as of 13 July 2017. Walcom Business
Solutions S.A. specialises in the sales of telecommunication products and services for the professional market. Orange Belgium
S.A. contributed in cash for 60,885 euros equivalent to 99 shares of the 100 shares issued by Walcom Business Solutions S.A.
Walcom S.A. contributed in cash for 615 euros equivalent to 1 share. The results of Walcom Business Solutions S.A. are fully
consolidated by the company since 13 July 2017. As a result of the dissolution and liquidation of Walcom S.A. during the
accounting year 2020 all shares are held now by Orange Belgium S.A.
A3Com S.A.
was already an exclusive Orange Belgium agent, specialised in telecommunications product sales and services for
residential customers through a network of 12 Orange shops located in the Brussels region. A3Com S.A., incorporated under the
laws of Belgium, was acquired as of 30 September 2017 by Orange Belgium S.A. The purchase concerned 100% of the 630
shares of A3Com S.A. The results of A3Com S.A. are fully consolidated by the company since 1 October 2017.
47
Annual report 2021
A&S Partners S.A.,
also an existing Orange Belgium agent, provides telecommunications services to B2B customers within the
Brussels region via a dedicated sales team of 35 professionals under the name of AS Mobility. A&S Partners S.A., incorporated
under the laws of Belgium, was acquired as of 30 September 2017 by Orange Belgium S.A. The purchase concerned 100% of the
620 shares of A&S Partners S.A. The results of A&S Partners S.A. are fully consolidated by the company since 1 October 2017.
Upsize N.V.
is a holding company that was acquired on 31
July 2019 for an enterprise value of €52.4 million. Upsize N.V. is 100%
shareholder of BKM N.V. The results of Upsize N.V. are fully consolidated by the company since 1 August 2019.
BKM N.V.
is
a nationwide ICT integrator and a pioneer in cloud UCC solutions. It has a solid track-record in the SME and CMA
markets in Belgium. BKM N.V. has 220 specialist staff who work in four areas of expertise: Unified Communications &
Collaboration (UCC) solutions; IT & security solutions; Document & Visual solutions; and Connectivity solutions. BKM N.V. is 100%
shareholder of CC@PS B.V.
CC@PS B.V.
provides document and visual solutions to low SME customers via a team of 13 professionals, mainly in West
Flanders.
MWingz S.R.L.
is a joint operation between Orange Belgium S.A. and Proximus S.A., each owning 50% of the company that will
manage the unilateral and shared mobile radio access network of both shareholders. In 2019 both companies decided to build a
shared mobile radio access network with the objective to meet cus
tomers’ increasing demand for mobile network quality and
deeper indoor coverage. The agreement will also allow a faster and more comprehensive 5G roll-out in Belgium. While sharing the
common part of their mobile radio access networks, both companies will continue to have full control over their own core network
and spectrum assets ensuring differentiated services. MWingz S.R.L. is incorporated under the laws of Belgium and was created
as of 6 December 2019. Orange Belgium S.A. contributed in cash for 1 euro equivalent to 1 share out of the 2 shares issued by the
Company. Proximus S.A. contributed in cash for 1 euro equivalent to 1 share. In April 2020, Orange Belgium participated in th
e
capital increase of MWingz S.R.L. for 1,599,999 million euros. Orange Belgium holds 50% of the shares of MWingz S.R.L. This
company started operational activities as from 1 April 2020.
On 29 June 2016, Orange Belgium S.A. subscribed in the capital of
Belgian Mobile ID S.A.
(for 6.28% or 1,745,853.92 euros),
with four banks and the two other mobile telecom operators of the country, to collaborate on the establishment of a mobile
identification system for both private and professional users. With this mobile solution, Belgian Mobile ID S.A. wants to make it
easier for anyone with a mobile phone and a bank account or an eID to digitally log in, confirm transactions and even sign
documents. In April 2018, Orange Belgium S.A. further contributed in cash to the capital increase of Belgian Mobile ID S.A. for
1,846,294.43 euros (or 10% of the total shares).
In April 2019, Orange Belgium S.A. led the series B funding of
CommuniThings S.A.
through a €1.3m investment (for a stake of
10.45%). Orange Belgium S.A. invested directly into one of its Orange-Fab scale-ups, CommuniThings, and embarks on a
commercial partnership to market state-
of
-the-art smart parking solutions. Orange Belgium S.A., Finance.Brussels S.A. and Essex
Innovation invested in total €3 million. In line with Orange’s
support of IoT solutions over its IoT networks, the investment will be
combined with a long-
term partnership to commercialise CommuniThings’ smart parking solutions across Belgium. In addition, the
investment will serve CommuniThings’ global expansion effo
rts as it spearheads the roll-out of its platform over IoT networks. In
2020, Orange Belgium participated in an additional capital increase of CommuniThings through a 0.35 million euros investment. In
April 2021, Orange Belgium participated again in the capital increase of CommuniThings through a 0.35 million euros investment.
Orange Belgium S.A. holds, directly or indirectly (e.g. through other subsidiaries), less than 20% of the voting power of Belgian
Mobile ID S.A. and CommuniThings S.A. and as such, it is presumed that Orange Belgium S.A. does not have significant influence.
Moreover, generating surplus value is not the main purpose of the investment in Belgian Mobile ID S.A. and CommuniThings S.A.
Following the period of exclusive negotiations that began on 22 November 2021 and the approval of the board of directors of
Enodia, Orange Belgium and Nethys have signed on 24 December 2021 an agreement for the acquisition by Orange Belgium of
75% less one share of
VOO S.A
. The transaction is based on an enterprise value of 1.8 billion euros for 100% of the capital. This
acquisition represents a major step forward in Orange Belgium's national convergent strategy and will increase investment and
competition in the telecommunications sector for the benefit of customers and the competitiveness of the Walloon and Brussels
regions.
VOO is a telecom operator that owns the cable network in the Walloon region and part of the Brussels region. VOO offers a
portfolio of fixed and mobile telephony, broadband Internet and television services. With the acquisition of VOO, Orange Belgium
will have a very high-speed network in Wallonia and part of Brussels, thus reinforcing the deployment of its convergent strategy at
national level.
48
Annual report 202
1
The investment plan, consisting of cable modernisation and fibre optic (FTTH) rollouts, and the pooling of the two companies'
skills will make it possible to ensure and strengthen the quality of VOO's network in the long term, serving customers and th
e
competitiveness of the Walloon and Brussels regions. Orange's industrial project, the complementary nature of its assets and
teams and the excellent working conditions within the two companies will offer attractive prospects for the employees of VOO and
Orange Belgium. Orange Belgium is committed to developing WBCC, VOO's call centre, and intends to strengthen BeTV.
Nethys will retain a minority stake in VOO and governance rights to guarantee the implementation of the industrial and social
project. Orange is offering Nethys the possibility of converting its stake in VOO into Orange Belgium shares to secure the
development of VOO and Orange Belgium through further integration between the two companies.
The enterprise value of 1.8 billion euros for 100% of the capital corresponds to an EBITDA multiple of 9.5x. This transaction will
generate significant synergies, mainly related to the transfer of VOO's MVNO business to Orange Belgium's network. Post
synergies, the EBITDA multiple amounts to 6.5x. Orange Belgium, which currently has a very low debt leverage, will finance this
transaction through an intra-Group loan.
The closing of the transaction is subject to customary conditions precedent, including the approval of the European Commissio
n
which is expected in 2022. Until such approvals and closing of the transaction are obtained, the two companies will continue to
operate independently.
2.
Scope of consolidation
The parent company and the subsidiaries listed below are included in the scope of consolidation as at 31.12.2021:
Parent company, incorporated under Belgian law
Limited company with publicly traded shares
Avenue du Bourget 3
B - 1140 Brussels
Belgium
Company identification number: BE 0456 810 810
Orange Communications Luxembourg S.A.
100% of the shares held by Orange Belgium S.A.
8, rue des Mérovingiens
L
- 8070 Bertrange
Luxembourg
Company identification number: LU 19749504
IRISnet S.C.R.L.
28.16% of the shares held by Orange Belgium S.A.
Accounted for by equity method
Avenue des Arts 21
B
- 1000 Brussels
Be
lgium
Company identification number: BE 0847 220 467
Smart Services Network S.A.
100% of the shares held by Orange Belgium S.A.
Avenue du Bourget 3
B
- 1140 Brussels
Belgium
Company identification number: BE 0563 470 723
Walcom Business Solutions S.A.
100% of the shares held by Orange Belgium S.A.
Avenue du Bourget 3
B
- 1140 Brussels
Belgium
Company identification number: BE 0678 686 036
49
Annual report 2021
A3Com S.A.
100% of the shares held by Orange Belgium S.A.
Rue Américaine 61-
65
1050 Ixelles
Belgium
Company identification number: BE 0471 336 856
A&S Partners S.A.
100% of the shares held by Orange Belgium S.A.
Rue Américaine 61-
65
1050 Ixelles
Belgium
Company identification number: BE 0885 920 794
Upsize N.V.
100% of the shares held by Orange Belgium S.A.
Herkenrodesingel 37 A
B
- 3500 Hasselt
Belgium
Company identification number: BE 0827 982 892
BKM N.V.
100% of the shares held by Upsize N.V.
Herkenrodesingel 37 A
B
- 3500 Hasselt
Belgium
Company identification number: BE 0453 298 222
CC@PS B.V.
100% of the shares held by BKM N.V.
Ommegang Zuid 20
B
–
8840 Westrozebeke
Belgium
Company identification number: BE 0867 295 509
MWINGZ S.R.L.
50% of the shares held by Orange Belgium S.A.
Simon Bolivarlaan 34
B
- 1000 Brussel
Belgium
Company identification number: BE 0738 987 372
There are no significant restrictions on the assets and liabilities of the subsidiaries, associates and joint ventures included in the
scope of consolidation.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue
to be consolidated until the date such control ceases.
Date of authorisation for issue of the financial statements
On
23
March 2022, the Board of Directors of Orange Belgium S.A. reviewed the 2021 consolidated financial statements and authorised them for issue.
The 2021 consolidated financial statements will be approved on 4 May 2022 by the General Assembly of Shareholders which still
has the power to amend the consolidated financial statements after issue.
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Annual report 202
1
3.
Basis of preparation
The consolidated financial statements are presented in thousand euros except when otherwise indicated. The Group's functional
and presentation currency is the Euro. Each entity within the Group applies this functional currency for its financial statements.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Statement of compliance
The consolidated financial statements of Orange Belgium S.A. and all its subsidiaries have been prepared in accordance with the
International Financial Reporting Standards (IFRS), as adopted by the European Union, and with the legal and regulatory
requirements applicable in Belgium.
The principles applied to prepare financial data relating to the 2021 financial year are based on:
all the standards and interpretations endorsed by the European Union compulsory as of 1 January 2021;
the recognition and measurement alternatives allowed by the IFRS:
Standard
Alternative used
IAS 1
Accretion expense on operating liabilities
(employee benefits, environmental liabilities)
Classification as financial expenses
IAS 2
Inventories
Measurement of inventories determined by the weighted
average unit cost method
IAS 7
Interest paid and received dividends
Classification as net operating cash flows
IAS 16
Property, Plant and Equipment
Measurement at amortized historical cost
IAS 38
Intangible Assets
Measurement at amortized historical cost
In the absence of any accounting standard or interpretation, management uses its judgment to define and apply an accounting
policy that will result in relevant and reliable information, such that the financial statements:
fairly present the Group’s financial position, financial performance and cash flows;
reflect the economic substance of transactions;
are neutral;
are prepared on a prudent basis; and
are complete in all material respects.
Changes to
accounting policies are described below and in note 15 “Significant accounting policies”.
Changes in accounting policy and disclosures
The accounting policies and methods of computation adopted in the preparation of the consolidated financial statements have
remained unchanged compared to those followed in the preparation of the consolidated financial statements for the year ended 31
December 2020.
EBITDAaL and eCapex remained the key performance indicators.
These operating performance indicators are used by the Group:
to manage and assess its operating and segment results; and
to implement its investment and resource allocation strategy.
The Group’s management believes that the presentation of these indicators is relevant as it provides readers with the s
ame
management indicators as those used internally.
EBITDAaL
corresponds to operating income before depreciation and amortization of fixed assets, effects resulting from business
combinations, reclassification of cumulative translation adjustment from liquidated entities, impairment of goodwill and fixed
assets, share of profits (losses) of associates and joint ventures, and after interests on debts related to financed assets and on
lease liabilities, adjusted for:
significant litigation;
specific labour expenses;
fixed assets, investments, and businesses portfolio review;
restructuring programme costs;
acquisition and integration costs;
and, where appropriate, other specific elements.
51
Annual report 2021
The measurement indicator allows for the effects of certain specific factors to be isolated, irrespective of their recurrence and the
type of income and expense, when they are linked to:
-significant litigation:
Significant litigation expenses correspond to risk reassessments regarding various litigations. Associated procedures are based on
third-party decisions (regulatory authority, court, etc.) and occurring over a different period to the activities at the source of the
litigation. By their very nature, costs are difficult to predict in terms of their source, amount and period;
-fixed assets, investments and businesses portfolio review:
The Group constantly reviews its fixed assets, investments and businesses portfolio: as part of this review, decisions to dispose of
or to sell assets are implemented, which by their very nature have an impact on the period during which they occur.
-restructuring programmes costs:
The adjustment of Group activities in line with changes in the business environment may also incur other types of transformation
costs. They include restructuring costs. These actions may have a negative effect on the period during which they are announced
and implemented. For illustrative purposes, and not limited to, this could include some of the transformation plans approved by
the internal governance bodies;
-acquisition and integration costs:
The Group also incurs costs which are directly linked to the acquisition and integration of entities. These are primarily legal and
advisory fees, registration fees and earn-outs;
-where applicable, other specific elements that are systematically specified in relation to income and/or expenses.
EBITDAaL is not a financial aggregate as defined by IFRS and is not comparable to similarly titled indicators used by other groups.
It is provided as additional information only and should not be considered as a substitute for operating income or cash flow
provided by operating activities.
eCapex
relate to acquisitions of property, plant and equipment and intangible assets excluding telecommunications licences an
d
financed assets minus the price of disposal of fixed assets. They are used internally as an indicator to allocate resources. eCapex
are not a financial aggregate defined by IFRS and may not be comparable to similarly-titled indicators used by other companies.
The Group uses organic cash flow from telecom activities as an operating performance measure for telecom activities as a whole.
Organic cash flow from telecom activities corresponds to net cash provided by operating activities minus (i) lease liabilities
repayments and debts related to financed assets repayments, (ii) purchases and sales of property, plant and equipment and
intangible assets net of the change in fixed assets payables, (iii) excluding effect of telecommunications licences paid and
excluding effect of significant litigations paid (and received). Organic cash-flow from telecom activities is not a financial aggregate
defined by IFRS and may not be comparable to similarly-titled indicators used by other companies.
New standards and interpretations applicable for the annual period beginning or after 1 January 2021
Despite their limited impact on Group operations, the following new amendments to IFRS have also been considered in the
preparation of the annual consolidated financial statements:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform
–
Phase 2
Amendments to IFRS 4 Insurance Contracts
–
Extension of the Temporary Exemption from Applying IFRS 9 to 1 January 2023 (applicable for annual periods beginning on or after 1 January 2021)
Amendment to IFRS 16 Leases: Covid-
19
-Related Rent Concessions beyond 30 June 2021 (applicable for annual periods
beginning on or after 1 April 2021)
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Annual report 202
1
Standards and interpretations published, but not yet applicable for the annual period beginning on 1 January 2021.
New or amended standards and interpretations issued up to the date of
issuance of the Group’s financial statements, but not yet
effective for 2021 financial statements, are listed below. The Group has elected not to adopt any standards or interpretations in
advance of their effective dates. None of those new or amended standards and interpretations are expected to have a material
impact on the Group’s consolidated financial statements.
Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (applicable for annual periods
beginning on or after 1 January 2022)
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts
—
Cost of Fulfilling a Contract (applicable for annual periods beginning on or after 1 January 2022)
Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework (applicable for annual periods
beginning on or after 1 January 2022)
Annual Improvements to IFRS Standards 2018
–
2020 (applicable for annual periods beginning on or after 1 January 2022)
IFRS 17 Insurance Contracts (applicable for annual periods beginning on or after 1 January 2023)
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (applicable
for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
Policies (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
Basis of preparation
In order to avoid differences in the information published by the Orange Belgium Group and its majority shareholder Orange S.A.,
the Orange Belgium Group applies a reporting format and reporting standards that are similar to the ones used by Orange S.A.
4.
Uses of estimates and judgments
The preparation of the Group's financial statements in compliance with IFRS requires management to make certain judgments,
estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
Judgments in applying accounting policies
In the process of applying the Group's accounting policies, management has not made any significant judgments and
assumptions concerning the future and other key sources of estimating uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
except for:
Significant judgments with regard to the application of IFRS 15
–
Revenue from contracts with customers Significant judgment is required in the following areas:
a) Determination of the transaction price
–
more specifically the handset price in bundled offers: The issue of the handset sales price at Orange Belgium S.A. is only applicable for bundled offers (equipment + service). For all
other offers, the performance obligation is directly related to the specific sale price. Orange Belgium S.A. excluded the evaluation
method based on market prices (IFRS 15.77) for the determination of the sales price of equipment in subsidised offers and more
specifically the standalone selling price. The standalone selling price could indeed
–
according to IFRS 15- be considered as “the
market price”. However, for Orange Belgium S.A. the standalone selling prices are impossibl
e to identify as
Extremely varying: at any given time, the same standalone equipment can be sold at different prices. The sales strategy of ou
r
shops, the type of distribution channel, … are examples of circumstances that vary the sale price from one
shop to another at
a certain time.
Volatility: Orange observes that the prices of certain handsets equipment do vary quickly, even within one month.
53
Annual report 2021
Therefore, Orange Belgium S.A. decided that the expected cost plus a margin approach method is the most pertinent calculation
for the price per specific equipment, as also used to determine the price of the offers. The starting point for calculating the upfront
amount of equipment at Orange Belgium S.A. is the cost of the equipment however this is not simply equal to the purchase price,
other elements have to be taken into consideration and are part of the “margin”. These elements are mainly logistic costs,
customs tariffs, taxes or supplier’s rebates.
b) Determination of the duration of the contract in order to allocate the transaction price to the different performance
obligations:
The definition of the duration of a contract is only relevant for the subsidised bundled offers, the only contracts for which a revenue
relocation between the performance obligatio
ns is necessary. The period of which both parties’ rights and obligations are
enforceable never exceeds the nominal period in the contract. This is because, excluding modifications in the contract,
enforceability of rights and obligations is a matter of law. Hence, the enforceable period cannot extend beyond the nominal period.
On the other hand, enforceability of rights and obligations shall take into consideration business practices according to which one
of the parties dismisses the other party of its obligation. For Orange, this is typically the case when the Group authorises or
encourages early renewals.
Early renewals are renewals before the end of the contract (contract duration mainly 24 months). Currently, Orange Belgium’s
customer strategy is to give our clients the opportunity to renew their contract with no penalty after a duration of 22 months. The
enforceable period has been set at 22 months, as a consequence, those contracts are closed after 22 months without further
action to be taken.
c) Identification of performance obligations:
A contract as per IFRS15 is made of rights and obligations between the parties. The rights take the form of promises for Orange
Belgium to transfer goods and/or services to a customer.
A contract generally explicitly states the promises to be transferred to a customer. However they may not be limited to the goods
and services that are explicitly stated in that contract, some may also be implied by business practices which create valid
customer expectations.
Access services and mobile equipment qualify as promised services and goods. The following services are however considered
immaterial:
hotline
right for non-invoiced incoming calls
access to customer care
non-invoiced reserved numbers
Sim-cards do not have a stand-alone value and have as such no impact on the determination of the performance obligation.
In addition, Orange Belgium might offer some additional services or goods, in line with specific commercial practices. We identify
all rights granted to the customer in the terms of the contract and identify those that are material for the customer in the context of
the contract.
Distinct goods and services
There are two criteria to determine whether goods and/or services are distinct:
The customer can benefit from the goods or services on its own or together with resources that are readily available.
The entity’s promise to transfer the good or service is separately identifiable from other promises in the contract.
It is clear that the mobile equipment (handset) is distinct from the access service. Those two elements therefore qualify as distinct
performance obligations within the contract.
The access service, which is made of voice, data and sms also includes distinct performance obligations. However, given that
those promises are over the same period of time (right) and paid together (obligation), there is no need to consider that they are
distinct.
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Annual report 202
1
Significant judgments with regard to the application of IFRS 16
–
Leases Significant judgment is required in the determination of non-cancellable lease term and the assessment of the exercise or not of
termination, extension and purchase options.
Critical estimates and assumptions
Estimates made at each reporting date reflect conditions that existed at those dates (e.g. market prices, interest rates and foreign
exchange rates). Although these estimates are based on management's best knowledge of current events and actions that Orange
Belgium may undertake, actual results may differ from those estimates.
Impairment of non-financial assets
The impairment test for the goodwill in relation to Orange Communications Luxembourg S.A. and Upsize N.V. is based on value in
use calculations based on a discounted cash flow model. The cash flows are derived from the financial projections for the next five
years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will
enhance the asset base of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rat
e
used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation
purposes.
The key assumptions used to determine the recoverable amount for the different cash generating units are further explained in
Note 4.
Fixed assets
–
Useful life assessment Assessing assets’ useful life according to the change in the technological, regulatory or economic environment (greater bandw
idth
technologies, radio technology migration…). Reference should be made to Note 5.
Provision for dismantling network sites
The Group has recognised a provision for dismantling network sites obligations as for the rented building situated at Avenue du
Bourget and the various antennas sites. In determining the amount of the provision, assumptions and estimates are required in
relation to discount rates and the expected cost to dismantle and remove all plants from the sites (see Note 5).
Operational taxes: pylon
Since 1997, municipalities and provinces levy local taxes on an annual basis on masts, pylons, and antennas. These taxes do not
qualify as income taxes and are recorded as operational taxes, hence negatively impacting the profit before tax.
When a tax bill is received, the related cost is recorded. In the event no tax bill is received, the cost will be based upon the tax bill
of the previous year and the pylon tax liability expires if the company does not receive a tax bill within three years. As all tax bills
are disputed, interests are calculated on the legal tax rate. When the case is closed at procedure level, basis and interests are
reversed. This method is still used in Flanders and for the Brussels Region and was also applicable for the Walloon region until
2013. Since 2014, this tax, introduced by a decree of the Walloon region, became a regional tax.
On 22 December 2016, the three mobile operators and the Walloon government concluded an agreement in principle on the issue
of taxing mobile infrastructure and to settle the dispute on the Walloon regional taxes for 2014. Orange Belgium committed to pay
an amount of 16.1 million euros over 4 years (i.e. 2016-2019) and to invest an incremental amount of 20 million euros in telecom
infrastructure in the Walloon region in the period 2016-2019. In turn, the Walloon Region undertakes to no longer levy taxes on
telecom infrastructure and to implement a legislative, regulatory, and administrative framework designed to facilitate the
deployment of this infrastructure. In addition, the Walloon Region would discourage municipalities and provinces from levying
taxes on telecom infrastructure. The operators were entitled to deduct such local taxes levied in 2016-2019 by Walloon
municipalities or provinces from the 2019 settlement and investment amounts.
The last instalment of the amount due by Orange Belgium on the basis of the 2016-2019 protocol agreement (4.5 million euros)
has not yet been paid. This is due to the fact that Orange Belgium received local tax bills from Walloon municipalities falling under
this agreement and is therefore currently in negotiation with the Walloon government to confirm the exact magnitude as well t
o
whom the last instalment should be paid. All information was provided to the Walloon Region on time. The Walloon region has no
t
yet responded.
55
Annual report 2021
The mobile operators have concluded a protocol agreement with the Walloon government for the period 2021-2022. This
agreement stipulates that the mobile operators will pay a contribution to a governmental budget fund to be set up by the Walloon
government to support the digitalization of the Walloon region, and more specifically local initiatives of Walloon municipalities or
provinces. Amount of the operator’s contribution: 5
.0 million euros (35,73% to be paid by Orange Belgium). The mobile operators
will also do additional network investments for a total amount of 11.0 million euros (35,73% for Orange Belgium). This agreement
will ensure a financially stable environment by reducing the proliferation of local taxes.
From the first tranche of 0.9 million euros payable for 2021, an amount of 0.5 million euros has been effectively paid in December
2021 to the Walloon region. Orange Belgium did indeed receive tax bills from a couple of local authorities falling under the
agreement for an amount of 0.4 million euros and did not pay the remaining balance thanks to an offsetting mechanism provided
for by the agreement.
Given the uncertainties surrounding the lawfulness and amount of the pylon taxes, and considering inter alia that this tax is not
fully payable at the beginning of each fiscal year and actually not paid, Orange Belgium continues to account for this as a risk in
accordance with IAS 37 (Provisions & contingent liabilities). However, the full year risk is estimated and recognized both as a
liability and charge at the beginning of each year. Interest charges related to the non-payment of this tax continue being recorded
monthly.
The provision for pylon tax is reassessed every quarter (see also note 3 and 6) using prudent best estimate assumptions based on
the evolution of the regional tax framework, of the different court cases and of the new tax bills received. The management revises
these estimates if the underlying circumstances evolve or in light of new information or experience. Consequently, estimates made
at 31 December 2021, may subsequently be changed.
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Annual report 202
1
Note 2: Sales, trade receivables, other current and non-current assets and
impact of the health crisis linked to the Covid-19 pandemic
in thousand EUR
31.12.2021
31.12.2020
Belgium
1 307 505
1 262 452
Retail service revenues
899 717
861 208
Convergent service revenues
254 975
220 759
Mobile only service revenues
541 156
549 670
Fixed only service revenues
63 322
50 396
IT & Integration service revenues
40 264
40 383
Equipment sales
127 219
118 158
Wholesale revenues
232 852
238 983
Other revenues
47 717
44 103
Luxembourg
76 290
70 862
Retail service revenues
45 428
44 731
Convergent service revenues
0
0
Mobile only service revenues
37 672
35 494
Fixed only service revenues
7 756
9 237
IT & Integration service revenues
0
0
Equipment sales
13 911
14 086
Wholesale revenues
14 999
10 810
Other revenues
1 952
1 235
Inter-segment eliminations
- 20 323
- 18 446
Total
1 363 472
1 314 868
Orange Belgium’s total
consolidated turnover amounted to 1,363.5 million euros in 2021, compared to 1,314.9 million euros in
2020, a significant increase of 3.7% year-
on
-year. The total retail service revenues (i.e. mobile-only services, fixed-only services, convergent services and IT & Integration services)
increased 4.3% year-
on
-year: from 905.9 million euros in 2020 to 945.1 million euros in 2021. This is the result of Orange Belgium maintaining solid commercial performance over the year supported by the recent enhancements to the Go portfolio and the
continuous growth of our convergence offers. In addition, Orange Belgium continues to differentiate itself in the market whil
e
extending the range of value propositions to satisfy customers' constantly changing needs.
This increase has mainly been driven by higher convergent service revenues (15.5%) and higher fixed only service revenues as a
result of higher cable revenues due to an increasing customer base. Equipment sales increased 6.7% year-
on
-year and the increase in other revenues can be explained by more handset sales through agents. Furthermore, the full year 2021 was negatively
impacted by lower wholesale revenues due to decrease in SMS traffic and interconnection.
Mobile postpaid customer base continues its steady growth, up 3.9% reaching 2.74 million subscribers. However, the total mobile
only service revenues declined by 1.1% year-
on
-
year to €578.8 million euros in 2021, mainly due to the continuous declin
e of the
prepaid market.
Consolidated fixed only service revenues amounts to 71.1 million euros (compared to 59.6 million euros in 2020) illustrating the
continuous commercial success of the Shape & Fix offers and the consolidation of Upsize.
57
Annual report 2021
The Coronavirus (Covid-19) pandemic
is
still a
ffecting human health, as well as the company’s business and financial situation
during year 2021. Orange Belgium identified the following major points of attention in this respect:
▪
Human health and safety:
Orange Belgium continued to closely monitoring developments in terms of this pandemic and puts
the health and safety of its staff at the forefront. Orange Belgium took all the necessary measures to protect its staff in addition
to the health instructions given by national authorities, while ensuring the conditions required for business continuity. Orange
Belgium continued with teleworking for its employees whenever the activity can be carried out remotely and the necessary
equipment is available. The long-term effects of the containment measures taken by the public authorities and relayed by
Orange Belgium are uncertain, and in particular the psychological impact on its employees of the isolation that it is likely to
cause.
▪
Business continuity:
Orange Belgium must, as a provider of essential business services, ensure the continuity of its electronic
communications services and in particular of its critical activities. In accordance with government directives, Orange Belgium
has set up a business continuity plan, which mainly covers network and information systems supervision and operation teams,
security teams, technical support, staff in data centres and intervention teams. In addition, the significant increase in traffic on
Orange Belgium’s networks poses a risk of congestion that could lead to a deterioration or even interruption of services. To
avoid such degradation or even interruptions, Orange Belgium has increased the capacity of its networks.
▪
Financial performance:
In 2021, the measures related to Covid-19 were eased with a positive impact on the commercial and
financial results of Orange Belgium. International travelling increased again, resulting in higher revenues from both visitors and
customers roaming compared to 2020. In-store restrictions were also loosened, which also translated into an increase in
handset revenues. As in year 2020, Orange Belgium did not experience any effect due to Covid-19 on bad debt.
Trade receivables
in thousand EUR
31.12.2021
31.12.2020
Trade receivables - Gross value
222 266
239 516
Allowance for doubtful debtors
- 34 139
- 32 033
Total trade receivables
188 127
207 483
Ageing Balance
in thousand EUR
31.12.2021
31.12.2020
Not past due
128 435
129 073
Less than 180 days
30 152
42 660
Between 180 days and 360 days
9 162
10 002
More than 360 days
20 378
25 748
Total trade receivables
188 127
207 483
Change in Provision for Trade receivables
in thousand EUR
2021
2020
Allowances on trade receivables - Opening balance
- 32 033
- 32 480
Net addition with impact on income statement
- 8 672
- 6 630
Losses on trade receivables
6 566
7 077
Allowances on trade receivables - Closing balance
- 34 139
- 32 033
For terms and conditions relating to related parties receivables, refer to Note 12.
Trade receivables are non-interest bearing and are generally paid via direct debits (56% of service revenues are collected by direct
debit). Trade receivables which are not paid via direct debits bear mainly a payment term of 30 days end of month.
The Group is not dependent on any major customers, none representing more than 10% of the company’s consolidated revenue
s.
The customer risk is spread over more than 4 million customers.
Total Trade receivables amounted to 188.1 million euros at the end of 2021, compared with 207.5 million euros at the end of 2020.
The decrease in trade receivables
–
gross value can mainly be explained by more open roaming discounts at year-end and by payment related to open 2020 invoices
.
Allowance for doubtful debtors
–
closing balance at year end 2021 –
increased to 34.1 million euros. This can be fully attributed to the introduction of the statistical method in Orange Luxembourg on the revised ageing customer balance as a result of the
implementation of a new billing system
.
Impairment of trade receivables is based on three methods:
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Annual report 202
1
A collective statistical method: this is based on historical losses and leads to a separate impairment rate for each aging
balance category. This analysis is performed over a homogenous group of receivables with similar credit characteristics
because they belong to a customer category (mass-market, small offices and home offices);
A stand-alone method: the assessment of impairment probability and its amount are based on a set of relevant qualitative
factors (ageing of late payment, other balances with the counterparty, rating from independent agencies,
…). This method is
used for carriers and operators (national and international), local, regional and national authorities; and
A provisioning method based on anticipated loss: IFRS 9 requires recognition of expected losses on receivables immediately
upon recognition of the financial instruments. In addition to the pre-existing provisioning system, the Group applies a simplified
approach of anticipated impairment at the time the asset is recognised. The percentage applied depends on the maximum
revenue non-recoverability rate.
The costs related to bad debts increased to 8.7 million euros in 2021 (compared to 6.6 million euros in 2020). The income
statement (see also Note 3
–
Expenses, prepaid and inventory) was impacted by the introduction of the statistical method in Orange Luxembourg on the revised ageing customer balance as a result of the implementation of a new billing system.
Since 2017, Orange Belgium S.A. entered into a factoring programme with Belfius Commercial Finance. The eligible trad
e
receivables were related to the top 400 B2B Airtime debtors (factored receivables around 1.7 million euros as at 31 December
2021).
Other assets
in thousand EUR
31.12.2021
31.12.2020
Advances and downpayments
1 992
97
Security deposits paid
701
627
Other
5 732
7 277
Total other assets
8 425
8 001
o/w other non-current assets
701
627
o/w other current assets
7 724
7 374
The non-current assets remain stable. The increase in other current assets is a combined effect of a decrease mainly related to
IRISnet and an increase in prepayments to a specific supplier (Siligence SAS).
Note 3: Expenses, prepaid and inventory
Direct costs
in thousand EUR
31.12.2021
31.12.2020
Purchase of material
- 185 409
- 167 684
Other direct costs
- 376 851
- 374 644
Impairment loss on trade and other receivables, including contract assets
- 8 672
- 6 630
Total direct costs
- 570 932
- 548 958
The direct costs in 2021 increased by 4.0% year-
on
-year to 570.9 million euros from 549.0 million euros a year earlier. Purchase of material
The costs related to the purchase of material increased by 10.6% year-
on
-year to 185.4 million euros. The costs related to the purchase of equipment (high end handsets) increased in line with the higher equipment sales (6.7%) and also the average unit
price per handset was higher than in 2020. Purchase of other equipment increased also by 1.6 million euros compared to 2020.
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Annual report 2021
Other direct cos
ts
The other direct costs mainly consisting of interconnection costs, commissions, content and connectivity costs increased slightly
by 0.6% year-
on
-year. Interconnection costs
Interconnect expense decreased by 12.5 million euros to 201.0 million euros. Roaming cost increased by 7.2 million euros due to
more traffic done by our travelling customer. SMS interconnect costs decreased by 15.5 million euros due to less traffic (13%).
Voice interconnect costs decreased by 4.3 million euros due to new regulation that has been applicable since July 2021 (decrease
in Mobile and Fixed Termination Rate).
Commissions
Commission expenses decreased by 1.7 million euros in 2021 to 31.1 million euros, due to lower commissions paid to retail
partners, in line with lower sales.
Content costs
Orange Belgium’s television content strategy is primarily based on developing partnerships with rights holders and service
publishers. Orange Belgium is mainly focused on its role of aggregating and distributing content to offer improved services to its
cu
stomers. The costs regarding television content amount to 31.1 million euros in 2021 compared to 28.1 million euros in 2020.
This increase is in line with the uptake of Orange Belgium’s digital TV offer (Love) in 2020, introducing for instance Orange
TV Lite.
Connectivity
Connectivity costs increased by 15.4 million euros in 2021 to 98.4 million euros. This is the result of the increase in wholesale
access fees related to the convergent Love offer and the continuous growth of our customer base.
Impairment loss on trade and other receivables, including contract assets
The costs related to bad debts amount to 8.7 million euros in 2021 compared to 6.6 million euros in 2020, and were mainly
impacted by the introduction of the statistical method in Orange Luxembourg on the revised ageing customer balance as a result
of the implementation of a new billing system (see also Note 2
–
Sales, trade receivables, other current and non-current assets). Prepaid expenses
in thousand EUR
31.12.2021
31.12.2020
Prepaid supplies and services
3 513
5 434
Prepaid spectrum fees
1 462
1 375
Total Prepaid expenses
4 975
6 809
The prepaid supplies and services decreased by 1.8 million euros compared to 2020 mainly related to 5G payments at Orange
Luxembourg.
Inventories
in thousand EUR
31.12.2021
31.12.2020
Gross inventories
25 676
28 679
Depreciation
- 1 652
- 1 994
Total Inventories
24 024
26 685
Inventories - Cost recognised as an expense during the period
- 182 856
- 166 094
The decrease in Gross inventories is mainly explained by the out of stocks for some references related to the worldwide electronic
component crisis.
The reserve for obsolete and slow-moving items (1.7 million euros) slightly decreased in 2021 compared to 2020.
60
Annual report 202
1
Trade payables and other current liabilities
in thousand EUR
31.12.2021
31.12.2020
Trade payables
258 822
293 525
Salaries and termination pay
2 527
3 265
Performance and profit sharing bonus, pensions
9 435
10 549
Social security contributions
6 099
3 212
Holiday pay
15 698
16 353
Other
352
319
Current employee benefits
34 110
33 698
Current restructuring provisions
1 127
1 239
Other current liabilities
7 082
3 806
Current tax payables
10 653
4 790
Deferred income
191
1 570
Trade payables are non-interest bearing and are generally settled on 30 to 60-day terms. The trade payables decreased by 37.7
million euros compared to 2020, mainly related to lower outstanding payables at year end for a number of suppliers due to lat
e
payment runs.
Current employee benefits
in
creased by 0.4 million euros in 2021 and is mainly due to the timing of payment of social security (1.
4
million euros) and the reclassification of withholding tax receivable (1.1 million euros), offset by lower provisions for holiday pay
(0.6 million euros), profit sharing bonus (0.6 million euros) and salaries and termination pay (0.7 million euros).
Total amount of trade payables in the reverse factoring programme with BNP Paribas amounted to 26.9 million euros as at 31
December 2021 compared to 17.1 million euros as at 31 December 2020. Reverse factoring is when a financial institution (BNP
Paribas
–
factoring for Orange Belgium S.A.) interposes itself between Orange Belgium and its suppliers and commits to pay the company’s invoices to the suppliers at an accelerated rate in exchange for a discount. This is a lower
-cost form of financing that
accelerates accounts receivable receipts for suppliers, while increasing the payment terms for Orange Belgium S.A.
As a consequence of the law of 18 December 2015, minimum returns are guaranteed by the employer as follows:
for the contributions paid as from 1 January 2016, a new variable minimum return based on OLO rates, with a minimum of
1.75% and a maximum of 3.75%. In view of the low rates of the OLO in the last years, the return has been initially set to
1.75%;
for the contributions paid until end December 2015, the previously applicable legal returns (3.25% and 3.75% respectively on
the employer and employee contributions) continue to apply until retirement date of the participants.
In view of the minimum returns guarantees, those plans qualify as Defined Benefit plans.
In order to make sure that the defined contribution pension plan in force guarantees the participants the minimum return required
by law at the date of departure, Orange Belgium ordered a complete actuarial computation under the Projected Unit Credit (PUC)
method. The actuary performed projections according to a pre-defined methodology and with certain assumptions. This report
indicates that the accumulated reserves are sufficient to cover any deficit and this for all scenarios. As a consequence, as of 31
December 2021, no provision has been recognised. As Orange Belgium S.A. has no unconditional right to a refund or a reduction
in future cash contributions no asset has been recognised either.
61
Annual report 2021
Please find below a reconciliation of the opening to the closing balance of the net defined benefit asset for Orange Belgium S.A
.:
Movement in net defined benefit (asset) liability
in thousand EUR
Defined benefit
obligation
Fair value of
plan assets
Effect of asset
ceiling
Net defined
(asset) liability
Balance at 1 January 2021
174 024
- 176 713
- 2 689
0
Included in profit or loss
Current service cost
1 189
Past Service credit
Interest cost (income)
1 555
- 1 604
Total
Included in OCI
Actuarial loss (gain)
Return on plan assets excluding interest income
7 111
Effect of changes in financial assumptions and
experience adjustments
- 8 409
Total
Other
Contributions paid by the employer
4 647
- 4 647
Benefits paid
- 2 587
2 693
Total
Balance at 31 December 2021
170 419
- 173 160
- 2 741
0
in thousand EUR
Defined benefit
obligation
Fair value of
plan assets
Effect of asset
ceiling
Net defined
(asset) liability
Balance at 1 January 2020
169 081
- 172 548
- 3 467
0
Included in profit or loss
Current service cost
964
Past Service credit
Interest cost (income)
1 681
- 1 744
Total
Included in OCI
Actuarial loss (gain)
Return on plan assets excluding interest income
- 2 194
Effect of changes in financial assumptions and
experience adjustments
1 954
Total
Other
Contributions paid by the employer
4 748
- 4 748
Benefits paid
- 4 404
4 521
Total
Balance at 31 December 2020
174 024
- 176 713
- 2 689
0
The contributions paid during 2021 for those plans amounted to 3.6 million euros paid by the employer and 1.0 million euros paid
by the employees. The plan assets as at 31 December 2021 consisted of 137.3 million euros individual insurance reserves, which
benefit from a weighted average guaranteed interest rate of 3.42% and 5.0 million euros reserves in collective financing fund
s.
The current restructuring provisions remained stable at 1.1 million euros in 2021.
The change in other current liabilities is mainly due to the increase in “other accounts payable”: 1.6 million euros mainly r
elated to
higher outstanding Brand fees and 1.7 million euros related to a subsidy received from BOSA.
The current tax payables
are related to the tax calculation of the current year and increased in 2021 (see also Note 6
–
Operational taxes and levies).
62
Annual report 202
1
Labour costs (excluding termination benefits)
Labour costs increased by 1.1% to 148.6 million euros in 2021, compared to 146.9 million euros a year ago. This slight
in
crease is
in line with the inflation rate (2.
44
%) and lowered by a slowdown in recruitment. Indirect costs
in thousand EUR
31.12.2021
31.12.2020
Commercial expenses
- 33 789
- 42 867
Other IT and network expenses
- 97 359
- 95 337
Property expenses
- 8 508
- 14 493
General expenses
- 63 587
- 61 523
Other indirect income
28 848
26 393
Other indirect costs
- 60 177
- 52 882
Depreciation of right-
of
-use of leased assets
- 54 085
- 52 502
Total indirect costs
- 288 656
- 293 211
of which operational taxes and fees
- 25 783
- 17 028
The indirect costs decreased 1.6% year-
on
-year to 288.7 million euros in 2021 compared to 293.2 million euros in 2020. The commercial expenses decreased by 9.1 million euros in 2021 due to a reclassification of telesales costs to CRM costs for 2.6
million euros (included in general expenses) combined with fewer media campaigns. Other IT and network expenses increased by
2.
1% year-
on
-year, mainly due to higher maintenance costs in IT and more network costs (leased lines). Property expenses decreased 41.3% year-
on
-year and are mainly related to lower expenses for network sites (related to Mwingz).
For the financial year 2021, the depreciation of right-
of
-use of leased assets amounted up to 54.1 million euro, mainly related to the reorganisation of network sites and the related contracts.
Mainly due to higher subcontracting services (related to CRM-activities), the total general expenses increased by 2.1 million euros
compared to 2020.
Other indirect income increased by 2.5 million euros year-
on
-year, mainly due to more re
-invoicing of operational and staff costs
from Mwingz.
Changes in other indirect costs can mainly be explained by the Brand and Corporate fees to Orange Group and by the
reassessment of the provision for pylon taxes, using best estimate assumptions based on the evolution of the regional tax
framework, of the different court cases and of the new tax bills received by Orange Belgium S.A.
Other restructuring costs
In 2021 Orange Belgium booked redundancy costs for 4.0 million euros. No costs related to acquisition & integration were
recorded in 2021.
In 2020 Orange Belgium booked redundancy costs for 4.6 million euros. Acquisition & integration costs amounted to 1.1 million
euros in 2020.
63
Annual report 2021
Note 4: Goodwill
Goodwill
in thousand EUR
31.12.2021
31.12.2020
Acquisition
Value
Accumulated
impairment
losses
Net carrying
amount
Acquisition
Value
Accumulated
impairment
losses
Net carrying
amount
Orange Communications Luxembourg S.A.
68 729
- 17 865
50 864
68 729
- 17 865
50 864
Others goodwill
53 547
- 14 937
38 610
53 547
0
53 547
Total goodwill
122 276
- 32 802
89 474
122 276
- 17 865
104 411
Orange Communications Luxembourg S.A.
The acquisition of Orange Communications Luxembourg S.A. was completed in two phases. 90% of the shares were acquired on
2 July 2007. The remaining 10% were acquired on 12 November 2008. The reported goodwill is fully allocated to the segment
“Luxembourg”.
Impairment test on this goodwill is performed at least at the end of each financial year to assess whether its carrying amount does
or does not exceed its recoverable amount.
The key operating assumptions used to determine the value in use are common across the Group’s business segments. These
assumptions include:
key revenue assumptions, which reflect market level, penetration rate of the offerings and market share, positioning of the
competition’s offerings and their potential impact on market price levels and their transposition to the Group’s offerings bases,
regulatory authority decisions on pricing of services to customers and on access and pricing of inter-operator services,
technology migration of networks, competition authorities’ decisions in terms of concentration or regulation o
f adjacent sectors
such as cable;
key cost assumptions, on the level of marketing expenses required to renew product lines and keep up with competition, the
ability to adjust costs to potential changes in revenues or the effects of natural attrition and committed employee departure
plans;
key assumptions on the level of capital expenditure, which may be affected by the roll-out of new technologies, by decisions of
regulatory authorities relating to licences and spectrum allocation, mobile network coverage, sharing of network elements or
obligations to open up networks to competitors.
For Orange Communications Luxembourg S.A. cash flows have been estimated on a five-year business plan (2022 to 2026)
approved by the Strategic Committee. The management of Orange Communications Luxembourg foresees a progressive increase
of adjusted EBITDA over the period as the result of (i) a continuous and sustained top line growth coming both from an increase in
market size and market share, and (ii) the continuation of its enhanced transformation programme with a tight control of operating
expenses. More precisely, the management ambitions a turnaround over this 5-year period with a 3.90% (compared to 6.23% last
year) and 6.98
%
(compared to 14.87% last year) compounded annual growth rate (CAGR) of revenues and adjusted EBITDA respectively, while capital expenses are expected to decrease by
0.
48
% (compared to 0.67% last year).
Considering a perpetuity growth rate of 1.00% (identical to 2020) and a WACC of 6.25% (compared to 6.50% last year), those
assumptions would result in a positive amount.
Sensitivity of recoverable amounts
A sensitivity analysis on those parameters was performed, using a growth rate varying from 0% to 2% and a discount rate varying
from 5.25% to 7.25%.
Because of the correlation between operating cash flow and investment capacity, sensitivity of net cash flow is used. Cash flow for
the terminal year representing a significant portion of the recoverable amount, a change of plus or minus 10% of this cash flow is
presented in case sensitivity.
64
Annual report 202
1
31 December 2021:
Headroom compared to the carrying value tested
:
million euros 12
1.9
Effect on the headroom as a result of a variation of:
▪
10% (increase/decrease) in cash flow of terminal year:
+/
- 15.1 million euros ▪
1% increase in growth rate to perpetuity: + 37.3 million euros
▪
1% decrease in growth rate to perpetuity: - 25.3 million euros
▪
1% increase in discount rate: - 30.5 million euros
▪
1% decrease in discount rate: + 44.8 million euros
Other goodwill
This corresponds to:
Mobistar Affiliate S.A.
The acquisition of Mobistar Affiliate S.A. was completed in two phases: initial purchase of 20% shares in April 1999 and purchase
of the remaining 80% shares in May 2001. The goodwill resulting from the acquisition amounts to 10.6 million euros.
The reported
goodwill is fully allocated to the segment “Belgium” (see Segment information).
Mobistar Enterprise Services S.A.
The goodwill of Mobistar Enterprise Services S.A. resulting on the acquisition on 1 April 2010 and adjusted on March 31 2011
amounts to 793 thousand euros.
The reported goodwill is fully allocated to the segment “Belgium” (see Segment information).
A&S Partners S.A.
A&S Partners S.A. was acquired as of 30 September 2017 by Orange Belgium S.A for a total consideration of 5.0 million euros.
The purchase concerned 100% of the shares. A total amount of 4.8 million euros has been allocated to goodwill for the segment
“Belgium”
(see Segment information)
.
Upsize N.V.
Upsize N.V. is a holding company that was acquired on 31 July 2019. Upsize N.V. includes BKM N.V. and CC@PS BV and is a
nationwide ICT integrator and a pioneer in cloud UCC solutions. It has a solid track-record in the SME and CMA markets in
Belgium and works in four areas of expertise: Unified Communications & Collaboration (UCC) solutions; IT & security solutions
;
Document & Visual solutions; and Connectivity solutions. The purchase concerned 100% of the 60,000 shares of Upsize N.V. An
amount of 51.6 million euros had been allocated preliminary to goodwill for the segment “Belgium” subject to finalisation of
the
purchase price allocation which was not yet finalised as at 31 December 2019.
Orange Belgium accounted for the Upsize N.V. acquisition using the acquisition method, whereby the total purchase price is
allocated to the acquired identifiable net assets based on assessments of their respective fair values, and the excess of the
purchase price over the fair values of these identifiable net assets was allocated to goodwill. The purchase price allocation was not
yet finalised as at 31 December 2019 as Upsize’s intangible assets had been measured provisionally in the IFRS opening balanc
e,
pending confirmation of an independent valuation. The assessment of the fair value of the intangible assets acquired by Orange
Belgium as part of Orange Belgium’s acquisition of Upsize N.V. (Including its subsidiaries BKM N.V. and CC@PS BV) on 31 July
2019 (Acquisition Date) has been finalised and recorded in the books since 30 June 2020.
The recognition of the fair value of the intangible assets (19.0 million euros) fully related to the acquired customer relationships
(18.0 million euros) and the Voxx-Telepo software platform (1.0 million euros). Together with the deferred tax impact of the above
mentioned adjustment (4.7 million euros), goodwill was reduced by 14.3 million euros. The recognition of the fair value of th
e
intangible assets of Upsize N.V. resulted in additional amortization expense of 0.6 million euros recognised for the period between
the acquisition date, 31 July 2019, and 31 December 2019, for which the comparative financial information has been restated.
65
Annual report 2021
A summary of the purchase price and the identifiable assets acquired and liabilities assumed for the Upsize N.V. acquisition at the
acquisition date is presented below:
in thousand EUR
IFRS Opening Balance
Fair value adjustments
Fair value of
identifiable net assets
Assets
Intangible assets
749
19 017
19 766
Property, plant and Equipment
508
508
Other financial assets
59
59
Rights-
of
-use leased assets 5 072
5 072
Inventories
4 938
4 938
Trade receivables
6 299
6 299
Other receivables
590
590
Cash and cash equivalents
1 238
1 238
Total Assets acquired
19 453
19 017
38 470
Liabilities
Deferred taxes
- 4 754
- 4 754
Provisions
-
132
-
132
Financial liabilities
- 16 495
- 16 495
Lease liabilities
- 4 680
- 4 680
Other payables
- 4 068
- 4.068
Trade payables
- 5 568
- 5 568
Current employee benefits
- 3 693
- 3 693
Total liabilities assumed
- 34 636
- 4 754
- 390
39
Fair value of identifiable net assets acquired
- 15 183
14 263
-
920
Total consideration transferred
36 450
Final goodwill arising from the acquisition
37 370
The goodwill is attributable mainly to the
synergies expected to be achieved from integrating the company into the Group’s
existing business. As a result, the final goodwill arising from the acquisition is fully allocated to the segment “Belgium” (
see
Segment information).
With regard to the total consideration transferred for the acquisition of Upsize N.V., the following should be noted:
Orange Belgium S.A. has agreed to pay the selling shareholders in two years’ time an additional consideration of 10.0 million
euros
which is linked to targets se
t in relation to the acquiree’s revenue growth, EBITDA margin as well as a maximum churn percentage
in key and operational people working for the acquiree. In this respect, Orange Belgium S.A. included 1,350 thousand euros as
contingent consideration which represented its fair value at the date of acquisition. This amount has been settled in cash during
the accounting year 2020. No further considerations have been or are expected to be paid to the selling shareholders.
Since Upsize N.V. is considered to be generating largely independent cash inflows and the integration in Orange Belgium S.A. is
not fully completed, impairment test on this goodwill is performed at least at the end of each financial year to assess whether its
carrying amount does or does not exceed its recoverable amount.
The key operating assumptions used to determine the value in use are common across the Group’s business segments. These
assumptions include:
key revenue assumptions, which reflect market level, penetration rate of the offerings and market share, positioning of the
competition’s offerings and their potential impact on market price levels and their transposition to the Group’s offerings ba
ses;
key cost assumptions, on the level of marketing expenses required to renew product lines and keep up with competition, the
ability to adjust costs to potential changes in revenues or the effects of natural attrition and committed employee departure
plans;
key assumptions on the level of capital expenditure, which may be affected by the ro
ll
-out of new technologies. 66
Annual report 202
1
The cash flows have been estimated on a five-year business plan (2022 to 2026) approved by the Strategic Committee. The
management of Upsize N.V. foresees a progressive increase of adjusted EBITDA over the period as the result of (i) a continuous
and sustained top line growth coming both from an increase in market size and market share, and (ii) the continuation of its
enhanced transformation programme with a tight control of operating expenses. More precisely, the management ambitions a
turnaround over this 5-year period with a compounded annual growth rate (CAGR) of revenues of 6.0% for BKM and 1.5% for
CCAPS and an EBITDA growth rate in the terminal value of 6.5% for BKM and 13.6% for CCAPS, while capital expenses are
expected to amount to 0.5 million euros each year for BKM
.
Considering a perpetuity growth rate of 1.5% and a WACC of 7.2% those assumptions resulted in an impairment of 14.9 million
euros.
The 2-year health crisis had a major impact on BKM operations. It has severely slowed down the sale and deployment of projects.
The expected growth has not been achieved due the impact by mandatory “work from home” policies postponing office ICT
investment. Despite close cost monitoring, margins have been also set under pressure.
The management previously targeted a 2024 12% EBITDA on revenue, now lowered to 6.5% affecting the terminal value with
impairment consequences.
Sensitivity of recoverable amounts
A sensitivity analysis on those parameters was performed, using a growth rate varying from 0.5% to 2.5% and a discount rate
varying from 6.2% to 8.2%.
Because of the correlation between operating cash flow and investment capacity, sensitivity of net cash flow is used. Cash flow for
the terminal year representing a significant portion of the recoverable amount, a change of plus or minus 10% of this cash flow is
presented in case sensitivity.
31 December 2021:
Headroom compared to the carrying value tested: 0 million euros (the impairment has resulted in the carrying amount equaling
the recoverable amount as calculated
)
Effect on the headroom as a result of a variation of:
▪
10% (increase/decrease) in cash flow of terminal year:
+/
- 3.1 million euros ▪
1% increase in growth rate to perpetuity: + 6.9 million euros
▪
1% decrease in growth rate to perpetuity: - 4.8 million euros
▪
1% increase in discount rate: - 5.8 million euros
▪
1% decrease in discount rate: + 8.3 million euros
Annual
impairment test segment “Belgium”
Impairment test on the goodwill allocated to the segment “Belgium” is performed at least at the end of each financial year to
assess whether its carrying amount does not exceed its recoverable amount. Estimating the fair value less costs to sell will take
into account Orange Belgium’s share price as quoted on the stock exchange.
Concerning the goodwill of the segment “Belgium”, when considering the relationship between the market capitalization and the
net assets of the Group as at 31 December 2021, the market capitalization was higher than the net book value. For the purpose of
this impairment test, we only considered the net assets of Orange Belgium and the Belgian subsidiaries and corrected the market
capitalization of Orange Belgium S.A. with the calculated VIU value of Orange Communications Luxembourg S.A.
67
Annual report 2021
Note 5: Other intangible assets and property, plant and equipment
Depreciation and amortization
The depreciation and amortization charge (including impairment of fixed assets) for the year was 280.8 million euros, up by 29.9
million euros compared to 2020. The level of historical depreciations is decreasing but is more than compensated by the
accelerated depreciation on dismantling sites.
Accelerated depreciations of fixed assets
The changes in useful life on intangible assets and property, plant and equipment recognised during the year were determined on
an asset by asset basis in order to consider technology and IT evolution. Obsolescence, dismantling or losses are also considered
in this exercise.
During 2021, the change in useful life and/or recognised impairment charges on property, plant and equipment totals 53.4 million
euros (compared with 17.3 million euros in 2020) and shown as expense on the line “Depreciation and amortization” and
“impairment of fixed assets” in the statement of comprehensive income.
Impact can be split as such:
Impairments on capitalized projects under construction
(m
aterial never deployed on sites, IT project never put in service, site civil works never finally deployed
)
for an amount of 1.6 million euros;
Network and other equipment for 4.9 million euros; and
Dismantling sites for an amount of 46.9 million euros
:
as a result of the RAN sharing agreement between Orange Belgium, Mwingz and Proximus, which contains a plan for the dismantling of 1,536 of Orange Belgium’s sites till the end of 2024, an
accelerated depreciation of 39.4 million euros was booked in 2021 to reflect the early decommissioning and replacement of
these sites. Furthermore, all Huawei RAN material will be replaced by Nokia, resulting in an accelerated depreciation of 7.5
million euros.
Other intangible assets
in thousand EUR
31.12.2021
31.12.2020
Net book value of other intangible assets in the opening balance
249 978
276 882
Acquisitions of other intangible assets
79 337
56 269
Additions through business combinations
0
0
Depreciation and amortization
- 81 682
- 83 173
Reclassifications and other items
0
0
Net book value of other intangible assets in the closing balance
247 439
249 978
Acquisition of other intangible assets are mainly telecommunication licences (21.8 million euros)
,
software (53.3 million euros) and internal generated software development costs (4.2 million euros).
in thousand EUR
31.12.2021
Gross
value
Accumulated
depreciation and
amortization
Accumulated
impairment
Net book
value
Telecommunication licences
151 967
- 64 631
0
87 336
Brand
4 172
0
- 4 172
0
Subscriber bases
29 139
- 15 520
0
13 619
Software
608 154
- 488 421
0
119 733
Other intangible assets
150 883
- 124 131
0
26 752
Total
944 314
- 692 703
- 4 172
247 439
in thousand EUR
31.12.2020
Gross
value
Accumulated
depreciation and
amortization
Accumulated
impairment
Net book
value
Telecommunication licences
366 261
- 271 051
0
95 210
Brand
4 172
0
- 4 172
0
Subscriber bases
29 139
- 13 724
0
15 415
Software
556 415
- 447 187
0
109 229
Other intangible assets
176 078
- 145 953
0
30 125
Total
1 132 065
- 877 915
- 4 172
249 978
68
Annual report 202
1
Telecommunication licences
Type of Licence
Acquisition
cost
Net book
value end
2021
Net book value end
2020
Useful life
in months
Remaining
months
Start
depreciation
period
UMTS 3G
149 040
0
2 185
191
0
April 2005
4G
20 020
9 844
11 668
End June
2027
65
June 2016
800 MHz
120 000
72 092
78 149
238
143
February 2014
2G renewal 5 years 3 months
76 143
0
2 211
63
0
December 2015
License 3G 1
st
Renewal 6 months
3 700
0
0
6
0
March
2021
License 3G 2
nd
Renewal 6 months
3 700
1 510
0
6
2
September 2021
License 2G 1
st
Renewal 6 months
7 189
0
0
6
0
March 2021
License 2G 2
nd
Renewal 6 months
7 189
2 935
0
6
2
September 2021
BKM PPA - unused perpetual licences Voxx
- Telepo
1 058
955
997
300
271
August 2019
Total
388
039 87 336
95 210
The two extensions of the licences for a short period of 6 months are a result of a government decision with the intention of
bridging the period until the final spectrum auction will take place, after which the licences will be awarded for a longer period. The
first extension of the 2G and 3G licenses for a period of 6 months was granted from March till September 2021 and were fully
depreciated over this 6-month period. A second 6 months extension as of September 2021 until March 2022 was granted and is
only partially depreciated as per end of 2021.
Internally generated intangible assets include software development costs generated by the Group staff.
Other intangible assets mainly relate to software acquired or developed by external suppliers. They are mainly used for the
network applications or for administrative purposes.
The useful lives of intangible assets applied in 2021 remain comparable to those used in 2020.
Investments related to original software acquisition may be fully amortized as well but upgrades of these software, still in use, are
not fully amortiz
ed. The same applies to the original site’s research costs.
Intangible assets are not subject to title restriction or pledges as security for liabilities.
Property, plant and equipment
in thousand EUR
31.12.2021
31.12.2020
Net book value of property, plant and equipment in the opening balance
707 591
747 577
Acquisitions of property, plant and equipment
146 544
121 465
Additions through business combinations
0
0
Disposals and retirements
-
20
0
Depreciation and amortization
- 197 525
- 167 067
Impairment
- 1 444
-
689
Reclassifications and other items
7 624
6 305
Net book value of property, plant and equipment in the closing balance
662 770
707 591
The amount of reclassifications and other items for the financial year 2021 is mainly related to the increase in the dismantling
provision as at 31 December 2021 mainly as a result of the combined effect of the increased dismantling cost per site and the
increase of number of sites partially offset by the increase of the discount rate. Refer also to the key assumptions used in the
section ‘Provision for dismantling’.
in thousand EUR
31.12.2021
Gross
value
Accumulated
depreciation and
amortization
Net book
value
Land and buildings
103 937
- 67 723
36 214
Networks and terminals
2 085 284
-1 485 243
600 041
IT equipment
207 440
- 187 373
20 067
Other property, plant and equipment
33 324
- 26 876
6 448
Total
2 429 985
-1 767 215
662 770
69
Annual report 2021
in thousand EUR
31.12.2020
Gross
value
Accumulated
depreciation and
amortization
Net book
value
Land and buildings
95 741
- 62 192
33 549
Networks and terminals
1 977 165
-1 321 546
655 619
IT equipment
189 685
- 176 760
12 925
Other property, plant and equipment
32 868
- 27 370
5 498
Total
2 295 459
-1 587 868
707 591
Provision for dismantling
in thousand EUR
31.12.2021
31.12.2020
Provisions for dismantling in the opening balance
82 592
77 481
Discounting with impact on income statement
192
-
83
Utilizations without impact on income statement
-
688
-
883
Changes in provision with impact on assets
7 625
6 077
Provisions for dismantling in the closing balance
89 721
82 592
o/w non-current provisions
80 656
77 094
o/w current provisions
9 065
5 498
The key assumptions used to measure the network sites dismantling provision are as follows:
31.12.2021
31.12.2020
Number of network sites, Orange Communications Luxembourg S.A. incl. (in units)
4 628
4 591
Average dismantling cost per network site
14.9
13.1
Inflation rate
2.0 %
2.0 %
Discount rate
0.253 %
-0.137 %
Although size and installation on site may slightly vary from site to site, the provision is calculated on an average dismantling cost
based on the actual costs incurred in the past for similar activities. For 2021 those costs were estimated at 14,936 euros per site
(2020 the average cost was 13,110 euros). For bigger sites, like MSC’s (Mobile Switching Centre), the provision is calculated
on
the surface area of the sites rented and an average dismantling cost per m² based on past similar experience.
Although it is not feasible to estimate the timing of the cash outflows, all network sites are assumed to be dismantled in the future.
Since 2011, the duration of the rental contracts is capped at 15 years. The approach was maintained to evaluate the provision in
2021.
The dismantling provision increased by 7.1 million euros. This is a combined effect of higher average dismantling cost per site
(from 13,110 to 14,936 euros per site) leading to an increase of the liability of 9.5 million euros; more sites net impact (additions for
1.2 million euros offset by dismantling costs for 0.7 million euros)
;
and extension of the contract for the MSC Nossegem site (increase of 0.4 million euros); partly offset by a higher discount rate resulting in a decrease of the provision of -
3.
4 million euros.
Network sites dismantling provision is adjusted when there is sufficient objective evidence that future change in technology or in
legislation will have an impact on the amount of the provision.
Besides network, the dismantling provision also includes 6.4 million euros of accruals related to buildings, Mobile Switching
Centres (MSC’s) and Point
-
of
-
Presence (POP’s).
Current fixed assets payable
Current fixed assets payable are non-interest bearing that are generally settled on 30 to 90 days term and are related to Property,
Plant and Equipment investments and increased compared to last year (71.7 million euros in 2021, compared to 57.0 million euros
a year ago) explained by an increase of outstanding invoices at year end.
70
Annual report 202
1
Note 6: Taxes and levies
Income tax in profit and loss statement
in thousand EUR
31.12.2021
31.12.2020
Current income tax
- 15 114
- 15 373
Deferred tax expense arising to the origination and reversal of temporary differences
2 340
5 285
Total tax expenses
- 12 774
- 10 089
The deferred tax expense arising to the origination and reversal of temporary differences amounting to 2.3 million euros consists of
temporary differences on fixed assets (1.4 million euros), tax losses carried forward (-1.3 million euros), and other temporary
differences (2.2 million euros, mainly consisting of dismantling, other lease liabilities and revenue from contracts with customers).
Relationship between tax expense and accounting profit
in thousand EUR
31.12.2021
31.12.2020
Earnings before income tax
52 497
64 069
Group income tax rate
25.00
25.00
Theoretical income tax
- 13 124
- 16 017
Effect of difference between local standard rate and Group rate (*)
55
37
Effect of permanent differences and other reconciling items (**)
- 6 504
2 711
Effect of tax (without base) affecting current tax (***)
3 913
417
Effect of tax (without base) affecting deferred tax
2 887
2 763
Income tax
- 12 774
- 10 089
Effective tax rate
24.3%
15.7%
* local rate (Orange Communications Luxembourg S.A.= 27.19%) and Group rate (25.00%)
** consisting of non-deductible expenses, effect of application of patent income deduction and permanent differences
*** adjustment on prior years
Tax expenses amounted to 12.8 million euros in 2021 compared to 10.1 million euros in 2020. The effective tax rate came out a
t
24.3%, which is an increase compared to the effective tax rate of 15.7% in 2020.
The theoretical amount of tax expenses decreased by 2.9 million euros in 2021, given the lower earnings before income tax. In
2021, the other non-deductible tax expenses and the losses on investments had a negative impact, partly offset by permanent
differences resulting in a net impact of 6.5 million euros (see **). Permanent differences result when an item of income and/or
expense is treated differently for book and tax purposes and the different treatment does not reverse in a subsequent year or
result in a basis difference (for example: disallowed expenses, effect on tax gain/loss on disposal of investments, asset retirement
obligation, amongst others). The effect of permanent differences and other reconciling items equal to -6.5 million euros consists of
the impairment of Upsize N.V. (-5.2 million euros), disallowed expenses (-2.5 million euros), Asset Retirement Obligation (2.8
million euros) and other permanent differences (-1.6 milli
on
euros
).
Effect of tax (without base) affecting the deferred tax amounted to 2.9 million euros in 2021.This amount mainly includes CIT
included in the manual adjustments (1.5 million euros) and the elimination of the theoretical income tax for Mwingz (1.7 million
euros).
A positive impact on the taxable year 2019 was recorded in 2020 for an amount of 4.6 million euros to record tax deductions for
investments which were approved only by the Brussels tax authorities in 2021 (a decrease of 3.5 million euros compared to 2020),
partially offset by corrections on prior year income taxes (0.7 million euros) (see ***).
71
Annual report 2021
Tax position in the statement of financial position
Movements in current tax balances
in thousand EUR
31.12.2021
31.12.2020
Net current tax - opening balance
4 462
1 995
Cash tax payments
- 9 508
- 12 604
Current income tax expense
15 114
15 373
Changes in consolidation scope, reclassification and translation adjustments
303
-
303
Net current tax - closing balance
10 371
4 462
Due to the recuperation of carried forward losses, Orange Communications Luxembourg S.A. had no significant current tax
expense.
Cash tax payments in 2021 include 12.5 million euros of prepayments for 2021.
Movements in deferred tax balances
in thousand EUR
31.12.2021
31.12.2020
Net deferred taxes - opening balance
- 5 029
- 9 500
Change in income statement
2 340
5 285
Change in other comprehensive income
-
45
-
398
Changes in consolidation scope, reclassification and translation adjustments
-
25
-
415
Net deferred taxes - closing balance
- 2 759
- 5 028
in thousand EUR
31.12.2021
31.12.2020
Assets
Liabilities
Income
statement
Assets
Liabilities
Income
statement
Fixed assets
0
4 146
1 423
0
5 569
1 302
Tax losses carryforward
5 710
0
- 1 284
6 994
0
2 869
Other temporary differences
87 076
91 398
2 201
86 169
92 623
1 114
Deferred taxes
92 786
95 544
2 340
93 163
98 192
5 285
Netting
- 90 986
- 90 986
0
- 90 021
-
90 021
0
Total
1 800
4 558
2 340
3 143
8 171
5 285
Deferred taxes recorded on Orange Belgium’s operations are essentially related
to the marked-
to
-market value of the interest rate swap contracts, to the development costs for intranet sites, to the dismantling assets depreciation and to the depreciation of SIM
cards.
The deferred tax asset on carried forward tax losses amounts to 5.7 million euros and is mainly related to Orange Communications
Luxembourg S.A. (4.6 million euros) and BKM N.V. (1.1 million euros). A deferred tax asset is only recognised when it is probable
that the tax entity will have sufficient future taxable profits to recover them. The recoverability of the deferred tax has been
assessed based on the business plans used for impairment testing.
Operating taxes and levies payables
The operating taxes and levies payables amounted to 75.5 million euros in 2021 and consist of VAT payables (10.1 million euros);
60.4 million euros taxes charged to pylons and masts - plus default interests calculated at the legal rate; and of 4.9 million euros
related to the Settlements with the Walloon Region.
Operating taxes and levies receivables
The operating taxes and levies receivables amounted to 9.2 million euros in 2021, compared to 1.4 million euros a year ago and
mainly consist of the recoverable VAT.
72
Annual report 202
1
Note 7: Interests in associates and joint ventures
In July 2012, the Group participated in the constitution of IRISnet S.C.R.L. The activity of IRISnet S.C.R.L. started on 1 November
2012. The Group owns 28.16%of IRISnet S.C.R.L. equity. The Group is represented on the Board of Directors by 2 out of 7 seats.
This company is consolidated using the equity method. The net result of the year amounts to 276 thousand euros, resulting in
a
net carrying amount as at 31 December 2021 of 5,760 thousand euros.
Note 8: Financial assets, liabilities and financial result
Financial result
in thousand EUR
31.12.2021
31.12.2020
Financial Costs
- 3 232
- 5 287
Financial Income
0
0
Total Net Financial Costs
- 3 232
- 5 287
Net financial result decreased by 2.1 million euros to -3.2 million euros in 2021 which is mainly explained by lower interest
expenses in relation to the loan with Atlas Services Belgium.
Cash and cash equivalents, financial liabilities
in thousand EUR
31.12.2021
31.12.2020
Cash and cash equivalents
Cash equivalents
- 29 778
- 28 786
Cash
- 23 957
- 32 030
Total cash and cash equivalents
- 53 735
- 60 816
Financial liabilities
Intercompany short-term borrowing
-
44
200 423
Third parties short-term borrowing
1 505
1 897
Intercompany long-term borrowing
121 809
3 437
Total borrowings
123 270
205 757
Net debt (Financial liabilities- Cash and cash equivalents)
69 536
144 941
The net financial debt at the end of 2021 amounted to 69.5
million euros, a decrease of Orange Belgium’s net financial debt
position by 75.4 million euros compared to 144.9 million euros of net financial debt at the end of December 2020. Orange Belgium
repaid 200 million euros
of
the unsecured revolving credit facility with Atlas Services Belgium that expired on 15 June 2021 and
secured a new revolving credit for 120 million euros, also with Atlas Services Belgium. Additionally, the cash and cash equivalents
decreased by 7.1 million euros compared to 2020.
Orange Belgium S.A. and its parent company, Atlas Services Belgium S.A. signed in 2015 a Revolving Credit Facility Agreement
for a total facility amount of 420 million euros with the final maturity date set at 15 June 2021.
Bearing in mind the fact that the remaining period until the maturity date as at 31 December 2020 would be less than 12 months,
Orange Belgium S.A. presented this financial liability (as per 31 December 2020: 200 million euros) as current (short term
borrowing) in the consolidated statement of financial position.
The Group Financing & Treasury teams signed an agreement on 10 March 2021 to refinance the existing Revolving Credit Facility
(RCF) between Orange Belgium S.A. and Atlas Services Belgium S.A.
The amount of the new loan is 120 million euros and is presented as long term, with a maturity of 5 years.
The repayment of the revolving credit facility and the new revolving credit facility are presented on a net basis in the cash flow
statement (see 1.3) under
“
Long-term debt redemptions and repayments”
. 
73
Annual report 2021
Changes in financial liabilities whose cash flows are disclosed in financing activities in the cash flow statement (see 1.3) are
presented below:
in thousand EUR
Other changes with no impact on cash flows
from financing activities
31.12.2020
Cash Flows
Acquisition
Foreign
exchange
movement
Other
31.12.2021
Intercompany short-term borrowing
200 423
-
467
0
0
- 200 000
-
44
Intercompany long-term borrowing
3 437
- 2 350
0
0
120 000
121 809
Third party borrowing
1 897
-
392
0
0
0
1 505
Financial risks
Liquidity risk
Orange Belgium’s results and outlook could be affected if the terms of access to funding becomes difficult
Orange Belgium is financed through long-term credit facilities granted by Orange Group entities and is thus not directly exposed
to adverse changes in market conditions. Combined with the credit facility agreement with Orange SA for an amount of 50 million
euros and the refinanced loan with Atlas Services Belgium S.A. for an amount of 120 million euros current funding is ensured until
mid-June 2026. In addition, Orange Belgium could evoke other sources of funding such as bank loans or bonds should financing
limitations be imposed by the Orange Group.
Interest rate risk
Orange Belgium’s business activities could be adversely affected by interest rate fluctuations
Although Orange Belgium’s long
-term credit facilities bear interest at variable rates, the exposure to interest rate risk is considered
low.
Credit rating risk
Downgrades of Orange Belgium’s credit rating or rating outlook could increase its borrowing costs and/or limit its
financing capacity
Orange Belgium is financed through long-term credit facilities granted by Orange Group entities until mid-2026. The current
funding agreement does not foresee rating-based funding adjustments. As of 31 December 2021 the Net debt / EBITDAaL ratio
stood at 0.2x. However, rating downgrades could negatively impact the trading terms that Orange Belgium receives from its
suppliers, thus increasing the operational financing needs and overall funding costs.
Counterparty risk on financial transactions
The insolvency or deterioration in the financial position of a bank or other institution with which Orange Belgium has a
financial agreement may have a material adverse effect on the company and its financial position
Orange Belgium does not have any derivative exposure with financial institutions nor term deposits. In addition, the credit
balances on its bank accounts are very limited given that it is operating a cash pooling structure with automatic sweeping of
excess funds to Orange S.A.
However, a default of one of its main banking partners would have a negative impact on its cash management operations. This risk
is mitigated by the fact that Orange Belgium’s Treasury policy foresees working with at least three different banking partner
s with
an investment-grade rating.
Credit risk
Customer payment defaults could adversely affect Orange Belgiu
m’s financial results and liquidity position
Orange Belgium’s credit policy foresees that all customers who wish to trade on credit terms are subject to credit verificati
on
procedures. If the risk is deemed not acceptable, payment terms are defined as prepayment or cash on delivery.
Orange considers that it has limited concentration in credit risk with respect to trade receivables due to its large and diverse
customer base (residential, professional and large business customers) operating in numerous industries. In addition, the
maximum value of the counterparty risk on these financial assets is equal to their recognised net carrying value. An analysis of net
trade receivables past due is provided in Note 2.
For loans and other receivables, amounts past due but not provisioned are not material
.
Foreign exchange risk
Exchange rate fluctuations could adversely affect Orange Belgium’s financial results and liquidity position
Given the mainly local nature of its business Orange Belgium is not exposed to significant foreign currency risk
.
74
Annual report 202
1
General risk management framework
A comprehensive, consistent and integrated risk management approach is in place to capitalize on synergies between Audit,
Control and Risk functions at all levels of the organisation. This approach is intended to provide reasonable assurance that
operating and strategic targets are met, that current laws and regulations are complied with, and that the financial information is
reliable.
The most important components of the risk management framework are discussed in detail in section 2 of the Corporate
Governance Statement.
Interest-bearing loans and borrowings
in thousand EUR
Nominal
amount end
2021
Nominal
amount end
2020
Interest
rate
Maturity
31.12.2021
31.12.2020
Unsecured revolving credit facility
agreement with Atlas Services Belgium
120 000
EURIBOR + 0.69
10.03.2026
120 000
Long-term loans
7 738
10 620
1.70% - 5.48%
31.03.2024 -
01.08.2036
1 809
3 437
Total long-term loans and borrowings
121 809
3 437
Unsecured revolving credit facility
agreement with Atlas Service Belgium
Atlas Services Belgium
37
0 000
EURIBOR + 0.95
15.06.2021*
200 000
Cash-pool related credit facility with Orange
50 000
EONIA + 0.65
on demand
60 000
EONIA + 0.
17
on demand
Uncommitted credit lines with various
banks
38 300
determined
upon withdrawal
on demand
20 900
determined
upon withdrawal
on demand
Short-term loans
3 119
2 700
0.9
5%
- 1.64% 18.05.2022 -
31.12.2022
1 505
1 897
Transactions costs on short-term loan
43
423
Total short-term loans and borrowings
1 548
202 320
* Credit facility agreement with Atlas Services Belgium has been renewed on March 10, 2021 for 120 million euros with a maturity date of 10/03/2026.
As at 31 December 2021, the Group held no hedging derivative financial instrument qualifying for hedge accounting. The carrying
amount of cash and cash equivalents, trade receivables and other assets, trade payables and other payables is deemed to
represent their fair value considering the associated short-term maturity. Other non-current financial assets are measured at
amortized costs which are deemed to represent their fair value.
Maturity
The following are the remaining contractual maturities of financial assets and liabilities at the reporting date. The amounts are
gross and undiscounted, and exclude contractual interest payments and as well as the impact of netting agreements
.
Interest are not included for the non-current financial liabilities due to the revolving nature of the credit facility and variable interest
conditions. Borrowings and repayments fluctuate over time, depending on working capital requirements.
in thousand EUR
Year ended December 2021
Amount
Within
1 year
Within
2-5 years
More than
5 years
Financial assets
Non-current financial assets
2 219
2 219
Non-current derivatives assets
Trade receivables
188 127
188 127
Current financial assets
417
417
Current derivatives assets
243
243
Cash and cash equivalents
53 735
53 735
Financial liabilities
Non-current financial liabilities
121 809
121 809
Non-current derivatives liabilities
Current financial liabilities
1 461
1 461
Current derivatives liabilities
243
243
Trade payables
258 822
258 822
in thousand EUR
75
Annual report 2021
Year ended December 2020
Amount
Within
1 year
Within
2-
5
years More than
5 years
Financial assets
Non-current financial assets
2 253
110
2 143
Non-current derivatives assets
Trade receivables
207 483
207 483
Current financial assets
361
361
Current derivatives assets
301
301
Cash and cash equivalents
60 816
60 816
Financial liabilities
Non-current financial liabilities
3 496
3 113
383
Non-current derivatives liabilities
Current financial liabilities
202 141
202 141
Current derivatives liabilities
480
480
Trade payables
296 525
296 525
Sensitivity
As indicated above, the main risk area related to external variable elements is the cost of borrowing. Considering an average long-
term debt of 103 million euros in 2021, a 0.6% variation of the floating rate would have a 0.1 million euros impact on financing
costs. Considering an average long-term debt of 106 million euros in 2020, a 0.5% variation of the floating rate would have 0.1
million euros impact on financing costs.
Fair value of financial assets and liabilities
The table below is presented according to IFRS 9:
in thousand EUR
31.12.2021
Classification under
IFRS 9
(1)
Book
value
Estimated
fair value
Level 1
and cash
Level 2
Level 3
Trade receivables
AC
188 127
188 127
188 127
Financial assets
2 636
2 636
2 636
Equity securities
FVR
2 219
2 219
2 219
Financial assets at amortized cost
AC
417
417
417
Cash and cash equivalents
53 735
53 735
53 735
Cash
AC
23 957
23 957
23 957
Cash equivalents
AC
29 778
29 778
29 778
Trade payables
AC
258 822
258 822
258 822
Financial debts
AC
123 270
123 505
123 505
1.
“AC” stands for “amortized cost”, “FVR” stands for “fair value through profit or loss”
in thousand EUR
31.12.2020
Classification under
IFRS 9
(1)
Book
value
Estimated
fair value
Level 1
and cash
Level 2
Level 3
Trade receivables
AC
207 483
207 483
207 483
Financial assets
2 614
2 614
2 614
Equity securities
FVR
2 253
2 253
2 253
Financial assets at amortized cost
AC
361
361
361
Cash and cash equivalents
60 816
60 816
60 816
Cash
AC
32 030
32 030
32 030
Cash equivalents
AC
28 786
28 786
28 786
Trade payables
AC
296 525
296 525
296 525
Financial debts
AC
205 757
205 757
205 757
Derivatives (net amount)
(2)
179
179
179
1.
“AC” stands for “amortized cost”, “FVR” stands for “fair value through profit or loss”
2.
IFRS 9 classification for derivatives instruments depends on their hedging qualification
The financial assets and liabilities measured at fair value in the statement of financial position have been classified based on three
hierarchy levels:
level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
level 2: inputs that are observable for the asset or liability, either directly or indirectly;
level 3: unobservable inputs for the asset or liability.
76
Annual report 202
1
The fair value of investment securities uses a valuation technique determined according to the most appropriate financial criteria in
each case (comparable transactions, multiples for comparable companies, shareholders’ agreement, dis
counted present value of
future cash flows).
For financial assets at amortized cost, the Group considers that the carrying amount of cash and trade receivables provide a
reasonable approximation of fair value, due to the high liquidity of these elements.
For financial liabilities at amortized cost, the fair value of financial liabilities is determined using the present value of estimated
future cash flows, discounted using rates observed by the Group at the end of the period.
The Group considers the carrying value of trade payables to be a reasonable approximation of fair value, due to the high liquidity.
The fair value of derivatives is determined using the present value of estimated future cash flows, discounted using the interest
rates observed by the Group at the end of the period.
Note 9: Shareholders’ equity
Share capital
Changes in the number of ordinary shares have taken place during 2021.
Share capital
(in thousand EUR)
Number of ordinary shares
(in units)
As at 1 January 2021
131 721
60 014 414
As at 31 December 2021
131 721
59 944 757
All ordinary shares are fully paid and have a par value of 2.197 euros. The par value changed slightly compared to 2020 (2.19
5
euros).
As at
31
December 2020, Orange Belgium held 69,657 shares acquired in the framework of the liquidity contract. Orange Belgium, as a result of the OPA and the ending of the liquidity contract, cancelled these treasury shares on 23 July 2021
.
Dividends
in thousand EUR
31.12.2021
31.12.2020
Dividends on ordinary shares (paid out in
2021)
- 30 007
Dividends on ordinary shares (paid out in
2020)
- 30 007
Total
- 30 007
- 30 007
The Orange Belgium Group policy is to balance the appropriate cash returns to equity holders with the requirement of maintaining
a balanced and sound financial position, while leaving sufficient leeway to continue to invest in its convergent strategy and the
build-out of its network. Management monitors the return on capital, as well as the level of dividends to ordinary shareholders.
Considering the upcoming spectrum auctions and the balance sheet impact of the acquisition of VOO, the Board of Directors will
not propose to the Annual General Meeting of Shareholders on 4 May 2022 to distribute in 2022 a gross ordinary dividend
regarding the financial year 2021.
Treasury shares
As a result of the OPA and the ending of the liquidity contract, Orange Belgium Group cancelled 69,657 treasury shares on 23 July
2021. As a result, Orange Belgium Group held no treasury shares at 31 December 2021. As at 31 December 2020, Orange
Belgium Group held 69,657 treasury shares.
77
Annual report 2021
Note 10: Commitments and contingencies
Operational activities commitments
in thousand EUR
Total
Less than one year
From one to five years
More than five years
Handsets purchases
323 505
141 979
181 526
0
Other goods and services purchases
103 135
47 752
27 301
28 082
Investment commitments
83 414
83 017
397
0
Operational activities commitments
510 054
272 748
209 224
28 082
Guarantees granted
in thousand EUR
Total
Less than one year
From one to five years
More than five years
Guarantees granted
29 592
377
5 368
23 847
In 2021, guarantees granted relate to network performance commitments granted to some corporate customers. No other security
(mortgage, pledge or other) has been granted on Orange Belgium assets as at 31 December 2021.
Note 11: (Non)-current provisions
in thousand EUR
31.12.2020
Additions
Utilisations
Reversal
Other effect
31.12.2021
Provisions for dismantling
82 592
1 240
-
688
0
6 577
89 721
Provisions for litigations
3 481
226
-
160
-
19
1
3 529
Total provisions
86 073
1 466
-
848
-
19
6 578
93 250
in thousand EUR
31.12.2019
Additions
Utilisations
Reversal
Other effect
31.12.2020
Provisions for dismantling
77 481
86
-
883
0
5 908
82 592
Provisions for litigations
4 346
367
-
617
-
558
-
57
3 481
Total provisions
81 827
453
- 1 500
-
558
5 851
86 073
Accruals for dismantling consist of current (9.1 million euros) and non-current provisions (80.6 million euros) (see also Note 5
–
Other intangible assets).
Provisions for litigations are recorded in other (non)-current liabilities.
Outstanding litigation
Orange Belgium is engaged in various judicial procedures whereby third-party individuals or entities are claiming repair of
damages they claim to have incurred. Each litigation is assessed on an individual basis in order to assess as to whether it is mor
e
likely than not that an outflow of resources will be necessary to settle the litigation and ensures that the assumptions to quantify
the provisions are valid.
Outstanding claims are built up during the previous years and it can be reasonably assumed that they will be subject to a Court
decision or solved by means of a settlement agreement within the coming years.
See Management report, section 6 for detailed information on the disputes.
Network sites dismantling provision
See Note 5
–
Other intangible assets and property, plant and equipment. 
78
Annual report 202
1
Waste Electrical and Electronic Equipment
According to the European Directive issued on that subject and to the IFRIC 6 interpretation, Orange Belgium is responsible for the
treatment and disposal of any waste electrical and electronic equipment (i.e. network equipment, IT hardware...) acquired on or
before 13 August 2005.
Orange Belgium is currently selling its electrical and electronic equipment waste to a WEEE certified third-party supplier at a net
selling price which meets all European Directive obligations. The agreement with this supplier also includes Orange Belgium’s
obligations for the period prior to 13 August 2005. No provision has to be recognised in this respect in Orange
Belgium’s financial
statements.
Note 12: Related parties
Relationships with affiliated enterprises
Balance sheet and income statement
in thousand EUR
31.12.2021
31.12.2020
ASSETS
Current receivables
- 33 167
- 32 454
LIABILITIES
Current interest-bearing loan
-
215
200 274
Non-current interest-bearing loan
120 000
3 496
Current trade payables
36 903
21 385
INCOME AND CHARGES
Sales
43 828
41 112
Purchases
- 74 850
- 62 326
Interests
-
833
- 2 018
The ultimate parent entity of Orange Belgium S.A. is Orange S.A., 111 quai du Président Roosevelt, CS 70222
,
92449 Issy les
Moulineaux Cedex, France.
Related party transactions
in thousand EUR
31.12.2021
Sales to
related parties
Purchases from
related parties
Amounts owed by
related parties
Amounts owed to
related parties
Orange - Traffic and services
30 149
- 40 343
- 5 033
Orange - Cash pool
-
226
- 29 778
29 241
Orange Affiliates - Traffic and services
13 679
- 17 738
1 631
7 687
Atlas Services Belgium - Loan
-
565
13
119 760
Brand fees to Orange S.A.
- 16 811
Total
43 828
- 75 683
- 33 167
156 688
in thousand EUR
31.12.2020
Sales to
related parties
Purchases from
related parties
Amounts owed by
related parties
Amounts owed to
related parties
Orange - Traffic and services
28 771
- 34 144
- 3 778
3 340
Orange - Cash pool
-
188
- 27 900
3 800
Orange Affiliates - Traffic and services
12 341
- 11 907
-
796
18 045
Atlas Services Belgium - Loan
- 1 830
20
199 970
Brand fees to Orange S.A.
- 16 275
Total
41 112
- 64 344
- 32 454
225 155
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Annual report 2021
Terms and conditions of transactions with related parties
Terms and conditions for the sale and purchase of traffic and services, to the centralised treasury management agreement and to
the revolving credit facility agreement are determined on an arm’s length basis
according to the normal market prices and
conditions.
Following the rebranding exercise in 2016, Orange Belgium benefited from a three year grace period. As from May 2019, a brand
fee is charged on a yearly basis by the ultimate parent Orange S.A. which is mainly calculated as a percentage of retail service
revenues.
There are no outstanding guarantees provided to or received from any related parties at the balance sheet date. No allowance for
doubtful debtors on amounts owed by related parties is outstanding at the balance sheet date.
Relationships with Board of Directors members and senior management
in thousand EUR
31.12.2021
31.12.2020
Short-term employees benefits
3 809
4 484
Post-employment benefits
444
432
Other long-term benefits
594
50
Termination benefits
0
0
Total
4 846
4 966
The total remuneration attributed to the Board of Directors (excluding the normal compensation of the CEO which is included i
n
the table above) is as follows:
in thousand EUR
31.12.2021
31.12.2020
Total Remuneration
335
304
Note 13: Liabilities related to contracts with customers and other assets
related to contracts with customers
Customer contract net assets and liabilities
in thousand EUR
31.12.2021
21.12.2020
Customer contract net assets
50 715
51 889
Costs of obtaining a contract
10 938
11 295
Costs to fulfill a contract
0
0
Total customer contract net assets
61 653
63 184
Prepaid telephone cards
- 14 762
- 17 265
Connection fees
-
533
-
335
Other deferred revenue
- 40 062
- 40 622
Other customer contract liabilities
-
665
-
746
Total deferred revenue related to customer contracts
- 56 022
- 58 968
Total customer contract net assets and liabilities
5 631
4 216
The following tables give an analysis of the balances of customer contract net assets:
in thousand EUR
2021
2020
Customer contract net assets - in the opening balance
(1)
51 889
51 593
Business related variations
- 1 174
296
Changes in the scope of consolidation
0
0
Reclassifications and other items
0
0
Reclassification to assets held for sale
0
0
Customer contract net assets - in the closing balance
50 715
51 889
1.
Mainly includes the new customer contract assets net of related liabilities, the transfer of the net contract assets directly to trade receivables and
impairment over the period.
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Annual report 202
1
The change in deferred income on customer contracts (prepaid telephone cards, service access fees and other unearned income)
in the statement of financial position is presented below.
in thousand EUR
2021
2020
Deferred revenue related to customer contracts - in the opening balance
58 968
65 745
Business related variations
- 2 946
- 6 777
Changes in the scope of consolidation
0
0
Reclassifications and other items
0
0
Reclassification to assets held for sale
0
0
Deferred revenue related to customer contracts - in the closing balance
56 022
58 968
Trade receivables presented in the consolidated statement of financial position represent an unconditional right to receive
consideration (primarily cash), i.e. the services and goods promised to the customer have been transferred.
By contrast, contract assets mainly refer to amounts allocated per IFRS 15 as compensation for goods or services provided to
customers for which the right to collect payment is subject to providing other services or goods under that same contract (or
group of contracts). This is the case in a bundled offer combining the sale of a mobile phone and mobile communication services
for a fixed-period, where the mobile phone is invoiced at a reduced price leading to the reallocation of a portion of amounts
invoiced for telephone communication services to the supply of the mobile phone. The excess of the amount allocated to the
mobile phone over the price invoiced is recognised as a contract asset and transferred to trade receivables as the service is
invoiced.
Contract assets, like trade receivables, are subject to impairment for credit risk. The recoverability of contract assets is also
verified, especially to cover the risk of impairment should the contract be interrupted. Recoverability may also be impacted by a
change in the legal environment governing offers.
Contract liabilities represent amounts paid by customers to Orange before receiving the goods and/or services promised in the
contract. This is typically the case for advances received from customers or amounts invoiced and paid for goods or services not
yet transferred, such as contracts payable in advance or prepaid packages (previously recognised in deferred income).
Customer contract assets and liabilities are presented, respectively, in current assets and current liabilities since they are a normal
part of the Group’s operations.
in thousand EUR
2021
2020
Costs of obtaining a contract - in the opening balance
11 295
13 161
Business related variations
-
357
- 1 866
Changes in the scope of consolidation
Reclassifications and other items
Reclassification to assets held for sale
Costs of obtaining a contract - in the closing balance
10 938
11 295
Where a telecommunications service contract is signed via a third-party distributor, this distributor may receive business provider
remuneration, generally paid in the form of a commission for each contract or invoice-indexed commission. Where the commission
is incremental and would not have been paid in the absence of the contract, the commission cost is estimated and capitalized in
the balance sheet. It should be noted that the Group has adopted the simplification measure authorised by IFRS 15 to recognis
e
the costs of obtaining contracts as an expense when they are incurred if the amortization period of the asset, it would have
recognised in respect of them, would not have exceeded a year.
The costs of obtaining fixed-period mobile service contracts are capitalized and released to profit or loss on a straight-line over the
enforceable contract term, as these costs are generally incurred each time the customer renews the fixed-period.
There are no costs to fulfil a contract in Orange Belgium S.A.
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Annual report 2021
The following table presents the transaction price assigned to unfulfilled performance obligations as at 31 December 2021.
Unfulfilled performance obligations are the services that the Group is obliged to provide to customers during the remaining fixed
term of the contract. As allowed by the simplification method procedure in IFRS 15, these disclosures are only related to
performance obligations with an internal term greater than one year.
in thousand EUR
Total
2021.12
Total
2020.12
Less than one year
Y01
61 114
70 442
Between 1 and 2 years
Y02
20 087
24 562
Between 2 and 3 years
Y03
122
159
Between 3 and 4 years
Y04
15
25
Between 4 and 5 years
Y05
More than 5 years
Y99
Total
81 338
95 188
On the allocation of the total contract transaction price to identified performance obligations, a portion of the total transaction
price can be allocated to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period. We
have elected to apply certain available practical expedients when disclosing unfulfilled performance obligations, including the
option to exclude expected revenues from unsatisfied obligations of contracts with an original expected duration of one year or
less. These contracts are primarily monthly service contracts.
In addition, certain contracts offer customers the ability to purchase additional services. These additional services are not included
in the transaction price and are recognised when the customer exercises the option (generally on a monthly basis). They are not
therefore included in unfulfilled performance obligations.
Note 14: Lease agreements
In the course of its activities, the Group regularly enters into leases as a lessee. The leases concern the following asset categories:
Land and buildings
Network and terminals
IT equipment; and
Other
Lease liabilities
As of 31 December 2021, lease liabilities amount to 299.9 million euros, including non-current lease liabilities of 255.3 million euros
and current lease liabilities of 44.7 million euros.
in thousand EUR
2021
2020
Lease liabilities
–
in the opening balance 304 051
296 229
Increase with counterpart in right-
of
-use 50 268
54 364
Decrease in liabilities following rental payments
- 51 834
- 48 419
Impact of changes in assessments
- 2 566
1 877
Lease liabilities
–
in the closing balance 299 919
304 051
O/w non-current lease liabilities
255 251
259 622
O/w current lease liabilities
44 669
44 429
The following table details the undiscounted future cash flows of lease liabilities:
in thousand EUR
31 December
2021
2022
2023
2024
2025
2026
2027 and
beyond
Undiscounted lease
liabilities
343 714
48 395
39 994
32 405
24 559
19 973
178 388
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Annual report 202
1
Right-
of
-use assets in thousand EUR
31.12.2021
Gross
value
Accumulated
depreciation
Accumulated
impairment
Net book
value
Land and buildings
407 261
- 121 046
286 215
Networks and terminals
5 779
- 4 068
1 711
IT equipment
3
0
- 3
Other right-
of
-use 21 174
- 9 917
-
19
11 238
Total right-
of
-use assets 434 217
- 135 031
-
22
299 164
in thousand EUR
31.12.2020
Gross
value
Accumulated
depreciation
Accumulated
impairment
Net book
value
Land and buildings
375 200
-82 958
292 242
Networks and terminals
5 750
-2 867
2 883
IT equipment
3
-3
Other right-
of
-use 16 238
-7 545
-
15
8 678
Total right-
of
-use assets 397 191
-93 370
-
18
303 803
in thousand EUR
2021
2020
Net book value of right-
of
-use assets -in the opening balance 303 803
297 290
Increase (new right-
of
-use assets) 54 264
57 125
Impact of changes in the scope of consolidation
Depreciation
- 54 020
-52 502
Impairment
- 4
13
Impact of changes in the assessments
- 4 879
1 877
Reclassifications and other items
Net book value of right-
of
-use assets -in the closing balance 299 164
303 803
The total expenses relating to short-term leases for which the recognition exemption is applied amounted to 0.1 million euros for
the accounting year 2021. For the accounting year 2020, the impact in this respect was also very limited and only amounts to 0.1
million euros.
Note 15: Significant accounting policies
1. Summary of significant accounting policies
1.1. Transactions in foreign currencies
On initial recognition in the functional currency, a foreign currency transaction is recorded by applying the spot exchange rate
between the functional currency and the foreign currency at the date of the transaction. At each balance sheet date, foreign
monetary assets and liabilities are translated using the closing rate.
Exchange gains and losses are recognised as operational income and expenses when they are related to the operational activities.
Exchange gains and losses are recognised as financial income and expenses only when they are related to the financing activities.
1.2. Business combinations, goodwill and goodwill impairment
Business combinations are accounted for applying the acquisition method:
the acquisition cost is measured at the acquisition date at the fair value of the consideration transferred, including all
contingent consideration. Subsequent changes in contingent consideration are accounted for either through profit or loss or
through other comprehensive income in accordance with the applicable standards;
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Annual report 2021
if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the
amounts recognised at that date;
Goodwill is the difference between the consideration transferred and the fair value of the identifiable assets and liabilities
assumed at the acquisition date and is recognised as an asset in the statement of financial position.
For each business combination with ownership interest below 100%, non-controlling interests are measured:
either at fair value: in this case, goodwill relating to non-controlling interests is recognised; or
at the non-
controlling interest’s proportionate share of the acquiree’s identifiable net assets: in this case, goodwill
is only
recognised for the share acquired.
Acquisition related costs are directly recognised in the income statement during the period in which they are incurred.
When a business combination is achieved in stages, the previously held equity interest is
re
-measured at fair value at the acquisition date through profit or loss. The attributable other comprehensive income, if any, is recognised on the same basis as
would be required if the previously held equity interests would have been disposed.
Goodwill is not amortized but tested for impairment at least annually or more frequently when there is an indication that it may be
impaired. Therefore, the evolution of general economic and financial trends, the different levels of resilience of the
telecommunication operators with respect to the decline of local economic environments, the changes in the market capitalization
values of telecommunication companies, as well as actual economic performance compared to market expectations represent
external indicators that are analysed by the Group, together with internal performance indicators, in order to assess whether an
impairment test should be performed more than once a year.
IAS 36 requires these tests to be performed at the level of each Cash Generating Unit (CGU) or groups of CGUs likely to benefit
from acquisition-related synergies. To determine whether an impairment loss should be recognised, the carrying value of the
assets and liabilities of the CGUs or groups of CGUs is compared to the recoverable amount. The recoverable amount of a CGU is
its value in use.
Value in use is the present value of the future cash flows expected to be derived from the CGUs. Cash flow projections are based
on economic and regulatory assumptions, licence renewal assump
tions and forecast trading conditions drawn up by the Group’s
management, as follows:
cash flow projections are based on five-year business plans;
cash flow projections beyond that timeframe may be extrapolated by applying a declining or flat growth rate over the next two
years (for some CGUs), followed by a growth rate to perpetuity reflecting the expected long-term growth in the market;
the cash flows obtained are discounted using appropriate rates for the type of business and the countries concerned.
Carrying values of CGUs tested include goodwill, intangible assets with indefinite useful life arising from business combinations
and assets with finite useful life (property, plant and equipment, intangible assets and net working capital, including intragroup
balances). Net book values are disclosed at the level of the CGUs and groups of CGUs, i.e. including accounting items related to
transactions with other CGUs and groups of CGUs.
For a CGU partially owned by the Group, when it includes a portion relating to non-controlling interests, the impairment loss is
allocated between the owners of the parent and the non-controlling interests on the same basis as that on which profit or loss is
allocated (i.e. ownership interest).
Impairment loss for goodwill is accounted for in the income statement and is never subsequently reversed.
The values in use of the businesses, which are most of the recoverable amounts and which support the book values of long-term
assets, are sensitive to the valuation method and the assumptions used in the models. They are also sensitive to any change in the
business environment that is different from the assumptions used. Orange Belgium recognizes assets as impaired if events or
circumstances occur that involve material adverse changes of a permanent nature affecting the economic climate or the
assumptions and targets used at the time of the acquisition. New events or adverse circumstances could conduct Orange Belgium
to review the present value of its assets and to recognize further substantial impairment losses that could have an adverse effect
on its results.
Impairment test on the goodwill allocated to the segment “Belgium” is performed at least at the end of each financial year to
assess whether its carrying amount does not exceed its recoverable amount. Estimating the fair value less costs to sell will take
into account Orange Belgium’s share price as quoted on the stock exchange.
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Annual report 202
1
1.3. Intangible assets
This asset category includes intangible assets with a finite useful life such as the cost of the telecommunication licences, the cost
of network design and development, the cost of purchased and internally generated software.
Intangible assets are measured on initial recognition at cost. The cost includes the purchase price, import duties, non-refundable
purchase taxes, after deduction of trade discounts and rebates, and any directly attributable costs of preparing the asset for its
intended use, i.e. costs of employee benefits, professional fees and testing costs.
After initial recognition, intangible assets are carried at cost less any accumulated amortization and impairment losses.
The residual value of intangible assets is assumed to be zero unless the conditions provided for by IAS 38 are met.
Intangible assets are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible
asset may be impaired.
The depreciable amount of an intangible asset with a finite useful life is allocated on a linear basis over its useful life.
The amortization of the mobile licences starts when they are ready to operate.
Amortization of the licences should start when the asset is available for use, i.e. when it is in the location and technical condition
necessary for it to be capable of operating in the manner intended by the management, even if the asset is actually not being
used. The licence will be available for use when the first geographical zone will be declared “ready to launch” by the techni
cal
team. The full amount will be amortized on a straight line basis over its remaining useful life of that date.
The GSM and UMTS licences have been granted for a period of 15 years (originally) and 20 years respectively. The GSM licence
renewal for 5 years was terminated in 2021 and replaced twice by short term license renewal for 6 months.
The 4G licence, acquired in 2011, has been granted for a period of 15 years, till the 1 of July 2027.
The 800 MHz licence was acquired in November 2013 and is valid for a period of 20 years.
The useful life of acquired and internally generated software is 5 years (network software) or 4 years (non-network software) and
their amortization starts when the software is ready for use.
The amortization period and amortization method for an intangible asset with a finite useful life are reviewed at least at each
financial year-end. Any change in the useful life or in the expected pattern of consumption of the future economic benefits
embodied in the asset, is accounted for prospectively as a change in an accounting estimate. The changes in useful life on
intangible assets recognised during the year are determined on individual asset basis. Obsolescence, dismantling or losses are
also considered in the exercise.
Amortization costs are recorded in the income statement under the heading “Depreciation and amortization of other intangible
assets and
property, plant and equipment”.
Research costs are expensed as incurred. Development expenditure on an individual project is recognised as an intangible asse
t
when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or
sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete the asset and the ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried
at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when
development is complete and the asset is available for use. It is amortized over the period of expected future benefit. During the
period of development, the asset is tested for impairment annually.
1.4. Property, plant and equipment
The following items of property, plant and equipment are classified under the tangible assets category: building, network
infrastructure and equipment, IT servers and personal computers, office furniture, leasehold improvements, equipment leased t
o
cu
stomers.
Upon recognition, tangible assets are measured at cost. The cost includes the purchase price, import duties and non-refundable
purchase taxes, after deduction of trade discounts and rebates, and any costs directly attributable to bringing the asset to the
location and condition for it to be capable of operating in the expected manner. The cost of replacing part of an item of property,
plant and equipment is recognised as an asset when incurred and if the recognition criteria are met. All other repair and
85
Annual report 2021
ma
intenance costs are recognised in profit or loss as incurred. The cost includes also the estimated cost to dismantle the network
sites and to refurbish the rented premises when such obligation exists.
The costs related to the installation & activation of the cable and that are directly attributable to bring the asset into working
condition for its intended use, are recognised as an asset.
After initial recognition, tangible assets are measured at cost less any accumulated depreciation and impairment losses.
The depreciable amount of a tangible asset is allocated on a systematic and linear basis over its useful life. The depreciation of a
tangible asset starts when it is ready to operate as intended.
The useful life of each category of tangible assets has been determined as follows:
Building 20 years
Pylons and network constructions 20 years
Optical fiber 15 years
Network equipment 5-10 years
Messaging equipment 5 years
IT servers 5 years
Personal computers 4 years
Office furniture 5-10 years
Leasehold improvements 9 years or rental period if shorter
Cable equipment 3-4 years
The residual value and the useful life of a tangible asset are reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the changes are accounted for prospectively as a change in an accounting estimate. The changes in
useful life on tangible assets recognised during the year are determined on individual asset basis. Obsolescence, dismantling or
losses are also considered in the exercise.
The costs related to the activation of the cable also includes the costs related to installation work performed at the custom
er’s
location to install the modem and are amortised over three years, based upon stable historical usage data available within the
Orange Group.
Depreciation costs are recorded in the income statement under the heading “Depreciation and amortization of other intangible
assets and property, plant and equipment”.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on de-recognition of the asset is included in the income statement in the year the asset
is derecognised.
Accelerated depreciation is the depreciation of fixed assets at a faster rate early in their useful lives and is mainly used at Orange
Belgium when management decides to take assets out of service early (ex. dismantling of technical sites). The net book value
of
th
at asset will then be depreciated over the remaining period (of service).
The asset retirement obligation (ARO) relating to the network sites is measured based on the known term of sites rental contracts,
assuming a high probability of renewal upon each renewal date and considering that the entire sites park will be dismantled in the
future. The dismantling asset is measured by using appropriate inflation and discount rates.
The Group is required to dismantle technical equipment and restore technical sites.
When the obligation arises, a dismantlement asset is recognised in compensation for the dismantling provision.
The provision is based on dismantling costs (on a per-site basis) incurred by the Group to meet its environmental commitments
over the asset dismantling and site restoration planning. The provision is assessed on the basis of the identified costs for the
current fiscal year, extrapolated for future years using the best estimate of the commitment settlement. This estimate is revised
annually and adjusted where appropriate against the asset to which it relates. The provision is present-discounted.
1.5. Impairment of tangible and intangible items other than goodwill
The Group assesses at each balance sheet date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, Orange Belgium makes an estimate of the asset'
s
recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to
sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated
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Annual report 202
1
future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. Impairment losses are recognised in the income statement in the
operating expenses under the heading “Impairment of fixed assets”
which also includes the losses on material never deployed on
sites, IT project never put in service, site civil works never finally deployed.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the
asset's or cash-generating unit's recoverable amount. A previously recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the income statement unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase.
1.6. Borrowing costs
Borrowing costs are capitalized after 1 January 2009. Evaluation of the need to capitalize borrowing costs is made at project level.
Up to end of 2008, borrowing costs were recognised as an expense in the period in which they occurred.
1.7. Government grants
A government grant is recognised when there is a reasonable assurance that the grant will be received and the conditions
attached to them are complied with.
When the grant relates to an expense item, it is recognised as income over the period necessary to match on a systematic basis to
the costs that it is intended to compensate.
Where the grant relates to an asset, the fair value is credited to the carrying amount of the asset and is released to the income
statement over the expected useful life of the relevant asset by equal annual instalments.
1.8. Taxes
Current income taxes
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax
basis of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and
the carry forward of unused tax credits and unused tax losses can be utilised except:
where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences wil
l
reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it ha
s
become probable that future taxable profit will allow the deferred tax asset to be recovered.
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Annual report 2021
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance
sheet date.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax
assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation
authority.
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case
the sales tax is recognised as part of the acquisition cost of the asset or as part of the expense item as applicable; and
receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the balance sheet.
Operational taxes: IFRIC 21
The IFRIC 21 interpretation was adopted by the European Union in the first semester 2014. It defines the obligating event that
gives rise to a liability to pay a levy (as the activity that triggers the levy) and refers to other standards to determine whether the
recognised liability gives rise to an asset or expense.
Orange Belgium applies IFRIC 21 in
the
consolidated financial statements of 31 December 2021 to a limited number of levies
whose accounting is modified by the interpretation: property withholding tax, tax on office space, tax on class 1/2/3 sites
(hazardous and/or insalubrious sites), sites tax and taxes on advertising boards, panels, etc.
1.9. Inventories
Inventories are assets held for sale in the ordinary course of business, i.e. handsets and accessories.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories comprises all costs of purchase,
cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The measurem
en
t of our inventories is determined by the weighted average method. The weighted average unit cost is the total amount that has bee
n
paid for the inventory divided by the number of units in the inventory. Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
1.10. Cash and cash equivalents
Cash and cash equivalents include cash on hand and cash deposits with a maximum term of 3 months. Cash and cash
equivalents held with financial institutions are measured at nominal value. Banks and intercompany cash pooling overdrafts ar
e
classified as short-term financial liabilities.
1.11. Own shares (liquidity contract)
The purchase of own (Orange Belgium) shares or obligations in the framework of a liquidity contract are accounted for as a
deduction from equity.
1.12. Long-term provisions
Provisions are recognised when Orange Belgium has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation.
Where Orange Belgium expects some or all of the provision to be reimbursed, the reimbursement is recognised as a separate
asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income
statement net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as a borrowing cost.
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The estimate of the dismantling costs regarding the network sites and of the refurbishment costs related to the rented premises is
recognised as an item of tangible asset. This estimate is also recognised as a provision that is measured by using appropriate
inflation and discount rates.
1.13. Employee benefits
Short-term employee benefits, such as wages, salaries, social security contributions, paid annual leave, profit-sharing and
bonuses, medical care, company cars and others are recognised during the period in which the service has been rendered by the
employee.
Short-term employee benefits are shown as liabilities as a result of a legal or constructive present obligation and when a reliable
estimate of such liabilities can be made.
As a consequence of the law of 18 December 2015, minimum returns are guaranteed by the employer as follows:
for the contributions paid as from 1 January 2016, a new variable minimum return based on OLO rates, with a minimum of
1.75% and a maximum of 3.75%. In view of the low rates of the OLO in the last years, the return has been initially set to
1.75%;
for the contributions paid until end December 2015, the previously applicable legal returns (3.25% and 3.75% respectively on
the employer and employee contributions) continue to apply until retirement date of the participants.
In view of the minimum returns guarantees, those plans qualify as Defined Benefit plans.
In order to ensure that the defined contribution pension plan in force guarantees its participants the minimum return required by
law at the date of departure regarding the access, Orange Belgium ordered a complete actuarial computation under the PUC
method.
The actuary performed projections according to a pre-defined methodology and with certain assumptions. This report indicates
that the accumulated reserves are sufficient to cover any deficit and this for all scenarios. As a consequence, as of 31 December
2021, no provision has been recognised. As Orange Belgium S.A. has no unconditional right to a refund or a reduction in future
cash contributions no asset has been recognised neither.
1.14. Leases
The new standard, IFRS 16 "Leases”, is of mandatory application since 1 January 2019.
Orange Belgium S.A. classifies as a lease, a contract that conveys to the lessee the right to control the use of an identified asset
for a given period, including a service contract if it contains a lease component.
Orange Belgium S.A. has defined four major lease contract categories:
1.
Land and buildings: these contracts mainly concern commercial (point of sale) or service activity (offices and head office)
leases, as well as leases of technical buildings not owned by the Group. Real estate leases entered into in Belgium generally
have long terms (between 7 and 11 years).
2.
Networks and terminals: the Group is required to lease a certain number of assets in connection with its mobile activities. This
is notably the case of lands to be used to install antennas, mobile sites leased from a third-party operator and certain
“TowerCos” contracts (companies operating telecom towers). Leases are also entered into as part of fixed wireline access
network activities.
3.
IT (& network) equipment: this asset category primarily comprises leases of servers and hosting space in datacenters.
4.
Other: this asset category primarily comprises leases of vehicles.
There are no real relevant differences in the four categories in the context of IFRS 16, the rules and calculation methods ar
e
identical.
Leases are recognised in the consolidated statement of financial position via an asset reflecting the right to use the leased assets
and a liability reflecting the related lease obligations. In the consolidated income statement, amortization and depreciation of the
right-
of
-use asset is presented separately from the interest expense on the lease liability. In the consolidated statement of cash
flows, cash outflows relating to interest impact operating flows, while repayments of the lease liability impact financing flows.
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Finally, Orange Belgium S.A. applies the following authorized practical expedients:
Exclusion of leases with a residual term expiring within 12 months of the first application data. This practical expedient is
applied for all contracts, including those with a tacit renewal clause at the transition date. In applying this practical expedient,
the Group calls on its judgment and experience gained in the previous years to determine whether it is reasonably certain to
exercise a renewal option, taking account of the relevant facts and circumstances.
Exclusion of leases of assets with a replacement value of less than approximately 5,000 euros;
Exclusion of initial direct costs from the measurement of the right-
of
-use asset at the date of first-time application; and
The inclusion in the opening balance sheet of provisions for onerous contracts measured as of 31 December 2018 pursuant to
IAS 37, as an alternative to impairment testing of right-
of
-use assets in the opening balance sheet.
a) Accounting policies Lease Liabilities:
Orange Belgium S.A. recognizes a liability (i.e. a lease liability) at the date the underlying asset is made available. This lease liability
is equal to the present value of fixed and fixed in-substance payments not paid at that date, plus any amounts that Orange is
reasonably certain to pay at the end of the lease, such as the exercise price of a purchase option (where it is reasonably certain to
be exercised), or penalties payable to the lessor for terminating the lease (where the termination option is reasonably certain to be
exercised).
Orange Belgium S.A. only takes into account the lease component of lease when measuring the lease liability. For certain asset
classes where the lease includes service and lease components, the Group may recognize a single contract classified as a leas
e
(i.e. without distinction between the service and lease component).
Orange systematically determines the lease term as the period during which leases cannot be canceled, plus periods covered by
any extension options that the lessee is reasonably certain to exercise and by any termination options that the lessee is reasonably
certain not to exercise.
For open-ended leases, Orange Belgium S.A. generally adopts the notice period as the enforceable period. The Group
nonetheless assesses, based on the circumstances of each lease, the enforceable period taking account of certain indicators such
as the existence of non-insignificant penalties in the event of termination by the lessee. The Group considers in particular the
economic importance of the leased asset when determining this enforceable period.
For each contract, Orange Belgium S.A. applies a discount rate determined based on the loan yield specific to each contract,
according to its term plus the Group's credit spread if the interest rate can’t be readily determined from the contract.
In order to determine the loan yield specific to each contract, Orange Belgium applies the following method:
Determination of a risk-free rate curve according to the currency and maturity based on government bond yields.
Application of Orange Belgium S.A.’s credit spread according to the currency and maturity.
Selection of the applicable rate for each lease contract, corresponding to the average maturity of the contract.
After the lease commencement date, the amount of the lease liability may be reassessed to reflect changes introduced in the
following main cases:
A change in term resulting from a contract amendment or a change in assessment of the reasonable certainty that a renewal
option will be exercised or a termination option will not be exercised;
a change in the amount of lease payments, for example following application of a new index or rate in the case of variable
payments; and
any other contractual change, for example a change to the scope of the lease or the underlying asset.
b) Accounting policies ROU assets:
A right-of use is recognised as an asset, with a corresponding lease liability. The right-
of
-use asset is equal to the amount of the lease liability at inception
Work performed by the lessee and modifications to the leased asset, as well as guarantee deposits, are not components of the
right-
of
-use asset and are recognised in accordance with other standards.
Finally, the right-
of
-use asset is depreciated in the consolidated income statement on a straight-line basis over the lease term adopted by the Group.
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c) Accounting policies Identified assets:
In certain circumstances, Orange Belgium rents a space to set up an antenna. Most often, the space is a piece of land or a
part of a rooftop or balcony etc… The identified asset is the part of land which is rented per the terms of the lease contrac
t. In
most circumstances, the lease contract does not allow the owner of the space to substitute it by another one. Consequently,
the contracts most often do not include a substitution right to the owner. All benefits from use of the part of the land rented are
obtained by Orange Belgium. In certain circumstances, Orange Belgium rents a space on the tower and/or in the shelter from a
third-party operator. This space can be defined as a dedicated space, volume or payload in the contract. The contract conveys
the right to use an identified asset. The space in the tower and granted by the third-party operator is physically identifiable.
Even in the case the space would not be explicitly specified in the contract, it will become identified at the time the spot is
made available for Orange Belgium to install its equipment. When the contract allows the owner of the tower to substitute the
space which is initially rented by Orange Belgium, this right either is generally exercisable only in very specific cases (security,
heightening of the tower…) which can
not be anticipated at the beginning of the contract, or is subject to the pre-approval of
Orange. Consequently, this substitution right is deemed not substantive for the supplier. All the economic benefits from use of
the space are obtained by Orange Belgium.
Fixed wireline: these leases mainly concern access to the local loop where Orange is a market challenger (total or partial
unbundling), as well as the lease of land transmission cables.
▪
Regarding the access to the local loop, the identified asset is the dedicated pair of copper wires installed from the
telephone exchange / central office to the customer's premises. In most cases, the purchase order forms explicitly mention
the specific pair of copper wires related to Orange. Even if the pair of copper wires is not explicitly specified in the
purchase order form, it will become identified when the subscriber’s access is granted to Orange by the incumbent. Then
Orange is able to connect the pair of copper wires from its own DSLAM to the customer premises set-top box. The full
unbundling contracts do not permit any substitution right. All the economic benefits from the use of the dedicated pairs of
copper are obtained by Orange. Indeed, Orange has the exclusive use of the dedicated pair of copper wires to deliver retail
telecommunication services (voice and broadband) to its final customer in exchange for a subscription fee, which is
determined by Orange.
However, as this is not material (only 10 lines are still in use representing a total yearly cost of approximately 2,000 euros)
for Orange Belgium S.A., these contracts are not part of the IFRS16 calculation.
▪
Regarding the lease of land transmission cables, Orange Belgium lease either a specific cable or a capacity portion of a
cable.
•
In some cases, the supplier grants Orange Belgium the use of an identified and fully dedicated cable (for example
dark fiber cable) for a determined period. Orange Belgium is responsible for directing and operating the dark fiber
with its own active network equipment and resources. The identified asset is the dedicated dark fiber installed by the
supplier from a point A to a point B. In most cases, the contracts or the purchase order forms explicitly mention the
specific dark fiber involved (usually described by an identification number). Even in the case where the dark fiber is
not explicitly specified in the purchase order form, it will become identified at the time the access is granted to
Orange by the supplier. Then Orange is able to connect its own active equipment to the dedicated dark fiber. Unless
a substantive substitution right is properly identified in a contract, Orange considers that the dedicated dark fibers are
identified assets. Furthermore, all the economic benefits from the use of the dedicated dark fiber are obtained by
Orange. Indeed, Orange has the exclusive use of the dedicated fiber cable used for core network operations
purposes.
•
In some cases, the supplier grants Orange Belgium a high speed access link connecting two geographic points for a
determined transmission capacity and period. The supplier is responsible for directing and operating the lines and
their maintenance with its own active network equipment and resources. This form of capacity arrangement does not
convey the right to use an identified asset. This form of leased lines arrangement (capacity arrangement) only
conveys to Orange a right to access a capacity (i.e. a quantity) as mentioned in the offers. This kind of agreement
does not fall within the scope of IFRS 16.
1.15. Loyalty commissions
Loyalty commissions earned by the distribution channels on post-paid contracts are recognised upfront upon contract
subscription.
1.16. Financial discounts
Financial discounts granted to customers or received from suppliers for early payments are deducted from revenue and costs of
sales as incurred.
1.17. Dividend
A dividend declared by the General Assembly of the shareholders after the balance sheet date is not recognised as a liability at
that date.
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1.18. TV content contracts
Expenses related to acquired TV distribution rights are recognised in the profit and loss statement as incurred and not capitalized
as intangible asset and consequently amortized over the term of the contract. The Company believes that it only acquires the
distribution right to air a certain channel and has no view or influence on future scheduling and content. As such, there is only a
limited ability to predict significant audiences or revenues from future airings, which implies that the acquired TV distribution rights
do not meet the requirements to be recognised as an intangible asset under IAS 38.
1.19 Segment reporting
Decisions on allocation of resources and operating segments’ performance assessment of Group components are made by the
Chief Executive Officer (main operational decision-
maker) at operating segments’ level, mainly composed by geographical
locations. Thus, the operating segments are:
Belgium; and
Luxembourg.
The use of shared resources is taken into account in segmental results based either on contractual agreements terms between
legal entities, or external benchmarks, or by allocating costs among all segments. The supply of shared resources is included in
other revenues of the service provider, and the use of the resources is included in expenses taken into account for the calculation
of the service user’s EBITDAaL (as from accounting year 2019). The cost of shared resources may be affected by changes in
contractual relationships or organisation and may therefore impact the segment results disclosed from one year to another.
1.20. Financial instruments
The standard IFRS 9 "Financial instruments" is of mandatory application since 1 January 2018.
IFRS 9 comprises three phases: classification and measurement of financial assets and liabilities, impairment of financial assets
and hedge accounting.
Classification and measurement of financial assets and liabilities
The classification proposed by IFRS 9 determines the way assets are recognised and measured. The financial asset classification
depends on the combination of the following two criteria:
the Group’s business model for managing financial assets; and
the contractual cash flow characteristics of the financial asset (whether or not solely payments of principal and interest).
Based on the combined analysis of these two criteria, IFRS 9 identifies three business models:
Financial assets measured at fair value through profit or loss (FVR)
Certain investment securities which are not consolidated or equity-accounted, and cash investments such as negotiable debt
securities and deposits, that are compliant with the Group’s risk management policy or investment strategy, may be
designated by Orange as being recognised at fair value through profit or loss. These assets are recognised at fair value at
inception and subsequently. All changes in fair value are recorded in net financial expenses.
Financial assets measured at fair value through other comprehensive income that may be reclassified (or not) to profit or los
s
(FVOCI)
Investment securities which are not consolidated or equity-accounted are, subject to exceptions, recognised as assets at fair
value through other comprehensive income that may not be reclassified to profit/loss. They are recognised at fair value at
inception and subsequently. Temporary changes in value and gains (losses) on disposals are recorded in other comprehensive
income that may not be reclassified to profit/loss.
Financial assets measured at amortized cost (AC)
This category mainly includes loans and receivables. These instruments are recognised at fair value at inception and are
subsequently measured at amortized cost using the effective interest method. If there is any objective evidence of impairment
of these assets, the value of the asset is reviewed at the end of each reporting period. An impairment loss is recognised in the
income statement when impairment tests demonstrate that the financial asset carrying amount is higher than its recoverable
amount. For trade receivables, the provisioning system also covers expected losses.
Assets previously classified as available-for-sale assets and held-
to
-maturity investments under IAS 39 are now presented in the following categories:
financial assets at fair value through profit or loss;
financial assets at fair value through other comprehensive income;
financial assets at fair value through other comprehensive income that may be reclassified to profit or loss; and
financial assets at amortized cost.
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Impairment of financial assets
IFRS 9 introduced a new expected loss model for impairment of financial assets. The new standard requires expected credit
losses to be taken into account from the initial recognition of financial instruments. In addition to the existing provision system, the
Group has elected to apply a simplified approach of anticipated impairment upon asset recognition.
Hedge accounting
Derivative instruments are measured at fair value in the statement of financial position and presented according to their maturity
date regardless of whether they qualify for hedge accounting under IFRS 9.
Interest-bearing loans and borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction
costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective
interest method.
Gains and losses are recognised in income when the liabilities are derecognised as well as through the amortization process.
Trade and other short-term payables
Trade and other short-term payables with no stated interest rate are measured at the original invoice or nominal amount when the
effect of discounting is immaterial.
Offsetting a financial asset and a financial liability
Trade receivables and payables are offset and the net amount is presented on the face of the balance sheet when such amounts
may legally be offset and a clear intention to settle them on a net basis exists.
1.21 Revenue from contracts with customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces
IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations.
Most revenue falls within the application scope of IFRS 15 “Revenue from contracts with customers”. Orange’s products and
services are offered to customers under service contracts only and contracts combining the equipment used to access services
and/or other service offers. Revenue is recognised net of VAT and other taxes collected on behalf of governments.
(1) Standalone service offers
(mobile services only, fixed services only, convergent service)
Orange Belgium S.A. proposes to Mass market and Corporate markets customers a range of fixed and mobile telephone services,
fixed and mobile Internet access services and content offers (TV). Some contracts are for a fixed term (generally 12 or 24 months),
while others may be terminated at short notice (i.e. monthly arrangements or portions of services).
Service revenue is recognised when the service is provided, based on use (e.g. minutes of traffic or bytes of data processed) or
the period (e.g. monthly service costs).
Postpaid mobile revenues are recognised without reference to actual data or voice usage/allowance. The voice or data allowanc
e
or the postpaid tariff plan does not have any impact on the calculation of the transaction price or enforceable period. For limited
data offers however, any actual excess data usage is billed and recognised as revenue as incurred.
Under some content offers, Orange may act solely as an agent enabling the supply by a third-party of goods or services to the
customer and not as a principal in the supply of the content. In such cases, revenue is recognised net of amounts transferred to
the third-party.
Contracts with customers generally do not include a material right, as the price invoiced for contracts and the services purchased
and consumed by the customer beyond the specific scope (e.g. additional consumption, options, etc.) generally reflect their
standalone selling prices. Service obligations transferred to the customer at the same pace are treated as a single obligatio
n.
When contracts include contractual clauses covering commercial discounts (initial discount on signature of the contract or
conditional on attaining a consumption threshold) or free offers (e.g. three months of subscription free of charge), Orange Belgium
SA defers these discounts or free offers over the enforceable period of the contract (period during which Orange Belgium S.A. and
the customer have a firm commitment). Where applicable, the consideration payable to the customer is recognised as a deductio
n
from revenue in accordance with the specific terms and conditions of each contract.
(2) Separate equipment sales
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Orange Belgium S.A. proposes to Mass market and Corporate market customers several ways to buy their equipment (primarily
mobile phones): equipment sales may be separate from or bundled with a service offer. When separate from a service offer, the
amount invoiced is recognised in revenue on delivery and receivable immediately or in instalment over a period of up to 24
months. Where payments are received in instalments, the offer comprises a financial component and interest is calculated and
deducted from the amount invoiced and recognised over the payment period in net finance costs. Such transactions are however
limited.
When the equipment sale is combined with a service offer, the amount allocated to the equipment (bundled sale
–
see below) is recognised in revenue on delivery and received over the service contract.
Where Orange purchases and sells equipment to indirect channels, the Group generally considers that Orange maintains control
until final resale to the end-customer (the distributor acts as an agent), even where ownership is transferred to the distributor.
Sales proceeds are therefore recognised when the end-customer takes possession of the equipment (on activation).
(3) Bundled equipment and service offers
Orange proposes numerous offers to its Mass market and Corporate market customers comprising equipment and services (e.g. a
communications contract).
Equipment revenue is recognised separately if the two components are distinct (i.e. if the customer can receive the services
separately). Where one of the components in the offer is not at its separate selling price, revenue is allocated to each component
in proportion to their individual selling prices. This is notably the case in offers combining the sale of a mobile phone at a reduced
price, where the individual selling price of the mobile phone is considered equal to its purchase cost plus a commercial margin
based on market practice.
The provision of Modems and decoders (For Internet / TV offers) is neither a separate component of the Cable access service nor
a lease, as Orange maintains control of the box and modems.
(4) Service offers to carriers
(wholesale)
The Group has mainly the following possible types of commercial agreements entered into with Operator customers for domestic
wholesale activities and International carrier offers:
Pay-
as
-you-go model: contract generally applied to “legacy” regulated activities (roaming, data solution contracts,…), where
contract services are not covered by a firm volume commitment. Revenue is recognised as the services are provided (which
corresponds to transfer of control) over the contractual term; and
Send-
or
-pay model: contract where the price, volume and term are defined. The customer has a commitment to pay the
amount indicated in the contract irrespective of actual traffic consumed over the commitment period. This contract category
notably includes certain MVNO contracts. The related revenue is recognised progressively based on actual traffic during the
period, to reflect transfer of control to the customer. In case MVNO contracts are structured with a minimum commitment,
minimum commitments are recognised as revenue unless usage exceeds the minimum commitment.
Specific revenue streams and related recognition criteria are as follows:
Sales of equipment
Sales of equipment to the distribution channels and to the final customers are recognised in revenue upon delivery. Consignment
sales are recognised in revenue upon sale to the final customer.
Revenue from the sale of prepaid cards
Sales of prepaid cards are recognised at facial value as deferred income at the time of sale and released in the profit and loss
statement as revenue upon usage.
Interconnection revenue
Traffic revenue paid by other telecommunication operators for use of our network is recognised upon usage.
Revenue sharing
Revenue arising from contracts with third-party content providers is recognised after deduction of the fees paid to them in
remuneration of the product or service delivered.
Revenue deferred until payment for which collection is not considered probable
Revenue of which the collectability is not reasonably assured at the point of sale is deferred until the payment has been received.
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1.22 Earnings per share
The Group discloses both basic earnings per share and diluted earnings per share for continuing operations:
▪
basic earnings per share
are calculated by dividing net income for the year attributable to the equity holders of the Group by
the weighted average number of ordinary shares outstanding during the period;
▪
diluted earnings per share
are calculated based on the same net income and weighted-average number of ordinary shares
outstanding after adjustment for the effects of all dilutive potential ordinary shares.
When basic earnings per share are negative, diluted earnings per share are identical to basic earnings per share. Treasury shares
owned, which deducted from the consolidated equity, do not enter into the calculation of earnings per share.
Note 16: Subsequent events
On 22 March 2022, the BIPT declared that five applications were submitted and retained for the auction for the 900 MHz, 1800 MHz
and 2100 MHz radio frequency bands, which are mainly used for 2G, 3G and 4G applications, and that there are equally five
candidates retained for the 3400-3800 MHz band, which is a core band for the 5G technology. For the other 5G-related bands, the
BIPT announced that 5 applicants may obtain spectrum in the 700 MHz band, and that 3 candidates applied and were retained for
the 1400 MHz band.
The identity of the operators is not disclosed as the procedure is anonymous until the final outcome of the auction, announced for
June 2022.
Also on 22 March 2022, the IT-group NRB announced it is one of the candidates for the spectrum which it would use for B2B
applications only.
None of the above mentioned events were adjusting events and no other adjusting events arose between the balance sheet date
and the date at which the financial statements have been authorised for issue.
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Note 17: Glossary
Financial KPIs
Revenues
revenues in line with the offer
Provide Group revenues split in convergent services, mobile only services, fixed only services, IT &
integration services, wholesale, equipment sales and other revenues.
retail service revenues
Revenue aggregation of revenues from convergent services, mobile only services, fixed only services,
IT & integration services.
convergent services
Revenues from B2C convergent offers (excluding equipment sales). A convergent offer is defined as
an offer combining at least a broadband access (xDSL, FTTx, cable or Fixed-4G (fLTE) with cell-lock)
and a mobile voice contract (excluding MVNOs: Mobile Virtual Network Operator). Convergent
services revenues do not include incoming and visitor roaming revenues.
mobile only services
Revenues from mobile offers (excluding B2C convergent offers and equipment sales) and M2M
connectivity, excluding incoming and visitors roaming revenues.
fixed only services
Revenues from fixed offers (excluding B2C convergent offers and equipment sales) including (i) fixed
broadband, (ii) fixed narrowband, and (iii) data infrastructure, managed networks, and incoming phone
calls to customer relations call centres.
IT & integration services
Revenues from collaborative services (consulting, integration, messaging, project management),
application services (customer relationship management and infrastructure applications), hosting,
cloud computing services, security services, video-conferencing and M2M services. It also includes
equipment sales associated with the supply of these services.
Wholesale
Revenues with third-party telecom operators for (i) mobile: incoming, visitor roaming, domestic mobile
interconnection (i.e. network sharing and domestic roaming agreement) and MVNO, and for (ii) fixed
carriers services.
equipment sales
Revenues from all mobile and fixed equipment sales, excluding (i) equipment sales associated with the
supply of IT & Integration services, and (ii) equipment sales to dealers and brokers.
other revenues
Include (i) equipment sales to brokers and dealers, (ii) portal, on-line advertising revenues, (iii)
corporate transversal business line activities, and (iv) other miscellaneous revenues.
Profit & Loss
Data on a comparable basis
Data based on comparable accounting principles, scope of consolidation and exchange rates are
presented for previous periods. The transition from data on an historical basis to data on a comparable
basis consists of keeping the results for the period ended and then restating the results for the
corresponding period of the preceding year for the purpose of presenting, over comparable periods,
financial data with comparable accounting principles, scope of consolidation and exchange rate.
Th
e method used is to apply to the data of the corresponding period of the preceding year, the
accounting principles and scope of consolidation for the period just ended as well as the average
exchange rate used for the income statement for the period ended.
Changes in data on a comparable basis reflect organic business changes. Data on a comparable basis
is not a financial aggregate as defined by IFRS and may not be comparable to similarly-named
indicators used by other companies.
EBITDAaL
(since 1 January 2019)
EBITDA after lease is not a financial measure as defined by IFRS. It corresponds to the net profit
before: taxes; net interest expense; share of profit/losses from associates; impairment of goodwill and
fixed assets; effects resulting from business combinations; reclassification of cumulative translation
adjustment from liquidated entities; depreciation and amortization; the effects of significant litigation,
specific labour expenses; review of the investments and business portfolio, restructuring costs.
Cash flow statement
Operating cash flow
EBITDAaL minus eCapex since 1 January 2019.
Organic cash flow
Organic cash flows correspond to net cash provided by operating activities decreased by
capex/eCapex and the repayment of lease liabilities, increased by proceeds from sale of property,
plant and equipment and intangible assets and adjusted for the payments for acquisition of
telecommunications licences.
eCapex
(since 1 January 2019)
Economic Capex is not a financial measure as defined by IFRS. It corresponds to capital expenditures
on tangible and intangible assets excluding telecommunication licences and excluding investments
through financial leases less proceeds from the disposal of fixed and intangible assets.
licences & spectrum
Cash out related to acquisitions of licences and spectrum.
change in WCR
Change in net inventories, plus change in gross trade receivables, plus change in trade payables, plus
change in other elements of WCR.
other operational items
Mainly offset of non-cash items included in adjusted EBITDA, items not included in adjusted EBITDA
but included in net cash provided by operating activities, and change in fixed asset payables.
net debt variation
Variation of net debt level.
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Annual report 202
1
Operational KPIs
Convergent
B2Cconvergent customer base
Number of B2C customers holding an offer combining at least a broadband access (xDSL, FTTx,
cable or Fixed-4G (fLTE) with cell-lock) and a mobile voice contract (excluding MVNOs).
B2C convergent ARPO
Average quarterly Revenues Per Offer (ARPO) of convergent services are calculated by dividing (a)
the revenues from convergent offers billed to the B2C customers (excluding equipment sales) over
the past three months, by (b) the weighted average number of convergent offers over the same
period. The weighted average number of convergent offers is the average of the monthly averages
during the period in question. The monthly average is the arithmetic mean of the number of
convergent offers at the start and end of the month. Convergent ARPO is expressed as monthly
revenues per convergent offer.
Mobile
mobile customer base (excl. MVNOs)
Number of customers with active simcard, including (i) M2M and (ii) business and internet
everywhere (excluding MVNOs).
Contract
Customer with whom Orange has a formal contractual agreement with the customer billed on a
monthly basis for access fees and any additional voice or data use.
Prepaid
Customer with whom Orange has written contract with the customer paying in advance any data
or voice use by purchasing vouchers in retail outlets for example.
M2M (machine-
to
-machine) Exchange of information between machines that is established between the central control
system (server) and any type of equipment, through one or several communication networks.
mobile B2C convergent customers
Number of mobile lines of B2C convergent customers.
mobile only customers
Number of mobile customers (see definition of this term) excluding mobile convergent customers
(see definition of this term).
MVNO customers
Hosted MVNO customers on Orange networks.
mobile only ARPO (quarterly)
Average quarterly Revenues Per Offer (ARPO) of mobile only services are calculated by dividing
(a) the revenues of mobile only services billed to the customers, generated over the past three
months, by (b) the weighted average number of mobile only customers (excluding M2M
customers) over the same period. The weighted average number of customers is the average of
the monthly averages during the period in question. The monthly average is the arithmetic mean
of the number of customers at the start and end of the month. Mobile only ARPO is expressed as
monthly revenues per customer.
Fixed
number of lines (copper + FTTH)
Number of fixed lines operated by Orange.
B2C broadband convergent customers
Number of B2C customers holding an offer combining at least a broadband access (xDSL, FTTx,
cable or Fixed-4G (fLTE) with
cell
-lock) and a mobile voice contract (excluding MVNOs). fixed broadband only customers
Number of fixed broadband customers excluding broadband convergent customers (see
definition of this term).
fixed only broadband ARPO (quarterly)
Average quarterly Revenues Per Offer (ARPO) of fixed only broadband services (xDSL, FTTH,
Fixed-4G (fLTE), satellite and Wimax) are calculated by dividing (a) the revenues from consumer
fixed only broadband services over the past three months, by (b) the weighted average number of
accesses over the same period. The weighted average number of accesses is the average of the
monthly averages during the period in question. The monthly average is the arithmetic mean of
the number of accesses at the start and end of the month. ARPO is expressed as monthly
revenues per access.
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Annual report 2021
98
Annual report 202
1
Orange Belgium
S.A. annual
accounts 2021
Comme
nts on Orange Belgium S.A.’s 2021
annual
accounts prepared according to Belgian accounting
standards
The statutory income statement and balance sheet
are presented hereafter. As for the exhaustive annual
accounts of Orange Belgium S.A., we refer you to
the website of the Central Balance Sheet Office
(
http://www.nbb.be
).
99
Annual report 2021
Balance sheet after appropriation
in thousand EUR
31.12.2021
31.12.2020
ASSETS
Formation expenses
240
152
Fixed assets
986 867
1 053 802
Intangible fixed assets
204 915
207 065
Tangible fixed assets
680 792
724 962
Land and buildings
296 660
363 510
Plant, machinery and equipment
311 604
299 161
Furniture and vehicles
16 816
15 587
Other tangible fixed assets
14 727
12 005
Tangible assets under construction and advance payments made
40 986
34 699
Financial fixed assets
101 159
121 775
Affiliated enterprises
91 618
112 584
Participating interests
86 206
107 172
Amounts receivable
5 412
5 412
Other enterprises linked by participating interests
9 147
8 797
Participating interests
9 147
8 797
Other financial assets
395
395
Amounts receivable and cash guarantees
395
395
Current assets
245 092
261 107
Amounts receivable after more than one year
1
111
Other amounts receivable
1
111
Stocks and contracts in progress
17 780
20 530
Stocks
17 780
20 530
Goods purchased for resale
17 780
20 530
Amounts receivable within one year
224 200
234 900
Trade debtors
155 220
173 354
Other amounts receivable
68 980
61 546
Current investments
230
2 705
Own shares
0
1 519
Other investments and deposits
230
1 186
Cash at bank and in hand
978
318
Deferred charges and accrued income
1 904
2 543
Total Assets
1 232 199
1 315 061
100
Annual report 202
1
in thousand EUR
31.12.2021
31.12.2020
EQUITY AND LIABILITIES
Equity
562 187
533 903
Capital
131 721
131 721
Issued capital
131 721
131 721
Reserves
13 172
14 691
Legal reserve
13 172
13 172
Reserves not available
0
1 519
In respect of own shares held
0
1 519
Accumulated profits (losses) (+) (-)
417 294
387 492
Investment grants
0
0
Provisions and deferred taxes
86 554
79 075
Provisions for liabilities and charges
86 554
79 075
Pensions and similar obligations
80
23
Other risks and costs
86 474
79 052
Amounts payable
583 458
702 083
Amounts payable after more than one year
120 012
13
Financial debts
120 000
0
Other loans
120 000
0
Other amounts payable
12
13
Amounts payable within one year
410 814
646 007
Current portion of amounts payable after more than one year falling due within one year:
0
200 000
Financial debts
29 272
18 217
Credit institutions
0
0
Other loans
29 272
18 217
Trade debts
275 938
300 971
Suppliers
275 938
300 971
Bills of exchange payable
0
0
Taxes, remuneration and social security
100 531
93 581
Taxes
74 224
67 780
Remuneration and social security
26 306
25 800
Other amounts payable
5 074
33 239
Accrued charges and deferred income
52 632
56 062
Total Equity and Liabilities
1 232 199
1 315 061
101
Annual report 2021
Income statement
in thousand EUR
31.12.2021
31.12.2020
Operating income
1 306 972
1 259 778
Turnover
1 255 393
1 209 033
Own construction capitalized
14 507
12 596
Other operating income
37 072
38 149
Non-recurring operating income
0
0
Operating charges
1 240 162
1 198 925
Raw materials, consumables
612 396
587 449
Purchases
609 473
583 824
Stocks: decrease (increase) (+) (-)
2 923
3 625
Services and other goods
208 953
222 112
Remuneration, social security costs and pensions
127 308
129 502
Depreciation of and amounts written off formation expenses, intangible and
tangible fixed assets
269 742
245 296
Amounts written off stocks, contracts in progress and trade debtors:
appropriations (write-backs) (+) (-)
1 184
- 5 976
Provisions for risks and charges: appropriations (uses and write-backs) (+) (-)
-
146
- 1 765
Other operating charges
20 725
22 307
Non-recurring operating charges
0
0
Operating profit (loss) (+) (-)
66 811
60 853
Financial income
613
707
Recurring financial income
413
707
Income from financial fixed assets
42
0
Income from current assets
141
535
Other financial income
230
172
Non-recurring financial income
200
0
Financial charges
22 585
6 114
Recurring financial charges
1 619
4 621
Debt charges
866
3 770
Other financial charges
753
851
Non-recurring financial charges
20 966
1 492
Profit (loss) for the period before taxes (+) (-)
44 839
55 447
Income taxes (+) (-)
13 832
13 764
Income taxes
13 832
14 831
Adjustment of income taxes and write-backs of tax provisions
0
1 068
Profit (loss) for the period (+) (-)
31 006
41 683
Profit (loss) for the period available for appropriation (+) (-)
31 006
41 683
102
Annual report 202
1
Appropriations and withdrawings
in thousand EUR
31.12.2021
31.12.2020
Profit (loss) to be appropriated (+) (-)
418 498
419 831
Profit (loss) to be appropriated (+) (-)
31 006
41 683
Profit (loss) to be carried forward (+) (-
)
387 492
378 148
Transfers from capital and reserves
0
0
From reserves
0
0
Transfers to capital and reserves
0
1 321
To other reserves
0
1 321
Profit (loss) to be carried forward (+) (-)
417 294
387 492
Profit to be distributed
1 204
31 018
Dividends
0
30 007
Other beneficiaries
1 204
1 001
103
Annual report 2021
Corporate
Governance
Statement*
1. Introduction
Orange Belgium adopted the 2020 Belgian Corporate
Governance Code (the “CGC”) as its compulsory
reference code as dened by the Belgian Code of
Companies and Associations. It is available on the
Corporate Governance Committee website (http://www.
corporategovernancecommittee.be). However, the application
of the principles of the CGC takes into account the company’s
specicities, its size, needs and ownership structure.
Orange Belgium’s Corporate Governance Charter (the
“Charter”) amended to comply with the CGC and approved
by the Board of Directors on 27 November 2019 became
effective on 6 May 2020. It is available on Orange Belgium’s
website (https://corporate.orange.be/en/nancial-information/
corporate-governance). This Charter describes the main
aspects of the company’s corporate governance, including
its governance structure and the internal rules of the Board of
Directors, the Executive Management, and other committees
set up by the Board of Directors.
The company considers that its Charter as well as this
Corporate Governance Statement reect both the spirit
and the provisions of the CGC and the relevant provisions
of the Belgian Companies and Associations Code, with the
exception of the two following deviations, as detailed in
Appendix VI of the Charter:
a. Remuneration of Non-Executive Directors
Article 7.6 of the CGC stipulates that each non-executive
director receives a part of his remuneration under the form of
shares of the Company. The Board believes nonetheless that
it is in the best interest of the Company and its stakeholders to
deviate from this provision for the following reason:
The remuneration policy of the non-executive directors is
in first instance based on the will to attract, motivate and
keep qualified directors having the profile and experience
required for business administration. In order to achieve that,
the Company operates a transparent remuneration policy
in line with market standards and taking into account the
scale, the organization and the complexity of the Company.
No performance related remuneration in connection with the
performance of the Company is anticipated for non-executive
directors, in accordance with article 7.5 of the CGC.
In order to avoid that the non-executive directors, among
which the independent directors, would be overly influenced
by the stock market price of the Company’s share, the
Company has decided not to grant a part of their remuneration
under the form of shares of the Company. The Company
believes that this deviation to the CGC allows the non-
executive directors to be the guardians of the legitimate
interests of all stakeholders of the Company and to focus on
its long-term perspectives. The Company underlines that the
directors (executive and non-executive) belonging to Orange
Group exercise their mandate free of charge and that the
latter act as well in the best interests of the Company and in a
perspective of sustainable value-creation for the shareholders
and the stakeholders as a whole. Moreover, the remuneration
policy (as described in the Remuneration Report that is
submitted to the approval of the General Meeting) has never
generated any issues or has never resulted in arbitration or
adverse behaviour. It allows to achieve a balance between the
various underlying objectives of the CGC as a whole.
b. Ownership Threshold for Executive
Management
Article 7.9 of the CGC stipulates that the Board determines
a minimal ownership threshold that the managers (i.e. the
members of the Executive Management) should hold. The
Board believes nonetheless that it is in the best interest of the
Company and its stakeholders to deviate from this provision
for the following reason:
The remuneration policy of the Executive Management is
in first instance based on the will to attract, motivate and
keep qualified executive managers having the profile and
experience required for operational business management.
In order to achieve that, the Company operates a transparent
remuneration policy in line with market standards and taking
into account the scale, the organization and the complexity of
the Company. The various components of the remuneration of
the Executive Management are described in the Remuneration
Report. In accordance with article 7.7 of the CGC, the
Board ensures that there is an appropriate balance between
fixed and variable remuneration, and cash and deferred
remuneration.
In order to match the interests of the executive managers
to the objectives of sustainable value-creation, the variable
part of the remuneration is structured to link reward to
individual performance and to the overall performance of
the Company. As the remuneration policy of the Executive
Management already had the ambition to remunerate the
members of the Executive Management in relation to the
short-term performance and the realization of the long-term
strategic ambitions of the Company, the Board has decided
*The chapter contains more information than the minimum framework requires
Annual report 2021
104
not to impose to the members of the Executive Management
to keep, in addition, a minimal amount of shares. Such an
obligation would only add little added value compared to the
remuneration policy already put in place and the monitoring
hereof could in addition create useless administrative burden.
The Board believes therefore that the current remuneration
policy (as described in the Remuneration Report that is
submitted to the approval of the General Meeting) already
encourages the Executive Management sufficiently to act in
the best interests of the Company and in a perspective of
sustainable value-creation and that it allows to achieve a good
balance between the various underlying objectives of the
provision and of the CGC as a whole.
2. Risk Management and Internal Control
A comprehensive, consistent and integrated risk management
approach is in place to capitalize on synergies between Audit,
Control and Risk functions at all levels of the organisation.
This approach is intended to provide reasonable assurance
that operating and strategic targets are met, that current
laws and regulations are complied with, and that the nancial
information is reliable.
Risk management
The framework and the process of risk management, as well
as the organization and the responsibilities relating to it are
formalised in a charter as well as a risk map, validated by the
Executive Management and approved by the Audit Committee
and the Board of Directors. Business and operational key
players in the different departments are responsible for the
identication, analysis, assessment and treatment of their
risks. The company risk map is approved at least once a
year by the Executive Management and submitted to the
Audit Committee for overall assessment of approach and
methodology.
Today, this risk map includes, but is not limited to, the
following risk clusters:
• Geopolitical instability, liquidity and macro-economic crisis
• Reputational damage
• Breach of availability, integrity or condentiality of data or
information
• Corruption, ethical breach
• Frauds
• Damage to property or other assets
• Destabilisation by a disruptive business model or innovation
(sectorial risk)
• Inability to improve the business models on convergence
• Failure or malfunction of the protability monitoring, decision
process, the project mode or the strategy
• Failure to transform or simplify processes and systems
• Human health and safety
• Errors and nancial prejudices
• Insufcient, costly, wrong or late infrastructure investment
(sectorial risk)
• Loss of or difculty to attract and retain key or rare skills
• Major business interruption
• Non-compliance with or increase of laws or regulations
• Key partnership underperformance
• Impacts of climate change
• Security (including cybersecurity)
• M&A monitoring
Internal control environment and control activities
For the purpose of managing risks, an internal control
approach and framework has been deployed for many years
at Orange Belgium. It covers aspects such as governance,
delegations of powers and signatures, policies, processes,
procedures, segregation of duties and controls to ensure
selected risk treatments (retain, reduce, transfer, avoid) are
effectively carried out.
Through its vision, its mission and its values, Orange
Belgium Group denes its corporate culture and promotes
ethical values that are reected in all its activities. There is a
charter of professional ethics at company level and a section
of the company’s intranet, accessible to all employees,
that is dedicated to compliance, ethics, corporate social
responsibility and to the company culture in general. Within
the framework of promoting ethical values, a professional
warning system allows for reporting condential information
intended to strengthen the control environment.
The human resources management and the social
responsibility of the company are described in the corporate
brochure of the annual report. The management and control
of the company and the functioning of the management
bodies are detailed in the declaration of corporate governance
contained in the annual report as well as in the company’s
articles of association. This corporate governance covers in
particular the responsibilities of these bodies, their internal
regulations as well as the main rules to be respected in the
management of the company.
The control activities are carried out rstly by the functional
or operational managers under the supervision of their
supervisors. All major processes and the controls that they
encompass are formalised. As part of the Orange Group,
this internal control environment ensures conformity with the
American Sarbanes-Oxley and Sapin II laws requirements that
must be complied with at the Orange Group level.
All documentation is regularly reviewed and duly updated.
Specic functions of assurance (i.e. fraud, revenue assurance,
data privacy, security, business continuity and crisis
management), compliance and audit (i.e. ‘Internal Audit’) have
also been set up.
The budget control covers not only the budget aspects,
but also key performance indicators. In order to ensure
adequate nancial planning and follow-up, a nancial
planning procedure which describes planning, quantication,
implementation and review of the budget in alignment with the
periodical forecasts, is closely followed up.
Information and communication
The company maintains transparent communication its
employees, in conformity with its values and based on a
multiple system integrating in particular its intranet and
periodical presentations by the Executive Management at
different levels.
Advanced data processing and control processes ensure
reliable information is made available in a timely manner, in
particular nancial reporting.
Orange Belgium Group aspires to be open and transparent
in its disclosure to the public, shareholders, customers,
employees and other stakeholders. The company publishes
detailed nancial reports providing a comprehensive set of
key performance indicators and nancial statements for each
business segment. These results are made available to the
press and to the investor and nancial analyst community
during dedicated meetings (conference calls/webcasts/
Annual report 2021
105
physical meetings). The provided information is accessible to
all and available on the company’s website (https://corporate.
orange.be).
Monitoring
In addition to the front-line control activities, specic functions
of assurance, compliance and audit are in place to ensure the
internal control environment is constantly assessed. Internal
Audit reports to the Audit Committee to ensure it can carry out
its assignments with independence and impartiality.
The Audit Committee monitors the responsiveness to audit
engagements and the follow-up of (corrective) action plans.
The Audit Committee also monitors and controls the reporting
process of the nancial information disclosed by the company
and its reporting methods. To this effect, the Audit Committee
discusses all nancial information with the Executive
Management and with the external auditor and if required,
examines specic issues with respect to this information.
The Audit Committee of the Board of Directors monitors and
reviews at least once a year with the Executive Management
the quality and effectiveness of the risk management and
the internal control environment set up by the Executive
Management. It must monitor that the main risks, such as
but not limited to fraud, revenue assurance, data protection,
security, compliance & ethics, security and legal, are properly
identied, managed and disclosed in accordance with the
framework which was approved by the Board of Directors.
For more detailed information regarding this monitoring,
reference is made to Audit Committee Terms of Reference
(Appendix III of the Corporate Governance Charter).
3. Shareholders
The following table shows Orange Belgium’s shareholder
structure as at 31 December 2021, as evidenced by the
notications received pursuant to article 14, al. 4 of the Law of
2 May 2007:
Shareholders' structure based on declarations date declaration # shares notified % stake notified % stake owned
ASB* 25/05/2021 76.94%
46 191 064
76.97%Polygon Global Partners LLP **
27/05/2021
3 215 9335.36% 5.36%
Boussard & Gavaudan Asset Management ****
18/04/2014
1 810 7143.02% 3.02%
Free oat
14.66% 14.67%
Total 100.00% 100.00%
Denominator
60 014 414
Denominator ***
59 944 757
* The position notied consists of 46,121,407 shares directly held by ASB and 69,657 treasury shares held by Orange Belgium
** Polygon owns 1,657,000 shares and 1,546,000 swaps
*** 69,657 treasury shares have been cancelled on 23 July 2021
**** Boussard & Gavaudan has declared on 11 February 2022 that it has crossed the 3% threshold downwards in January 2020. The remaining position was
sold in April 2021
Annual report 2021
106
Atlas Services Belgium – an Orange S.A. wholly-owned
subsidiary – is Orange Belgium’s main shareholder.
In compliance with Belgian legal regulations on transparency
as regards notication of shareholding thresholds of listed
companies, Orange Belgium sets notication thresholds at
3%, 5% and multiples of 5%.
Notification in compliance with the law on takeover
bids
On 24 August 2009, the company received a notication from
its ultimate parent company Orange S.A. pursuant to Article
74 §7 of the law of 1 April 2007 concerning takeover bids.
This notication detailed Orange S.A.’s ownership of Orange
Belgium.
As at 24 August 2009, Orange S.A. held indirectly 31,753,100
Orange Belgium shares. The chain of control was reconrmed
on 1 July 2013 after an internal restructuring of the Orange
Group.
As a result of a public takeover bid launched in 2021, Orange
S.A. increased its indirect ownership to 46,191,064 Orange
Belgium shares and notied Orange Belgium thereof on 26
May 2021.
The organisation chart below illustrates Orange Belgium’s
corporate structure as at 31 December 2021.
Orange
(France)
Atlas Services
Belgium
(Belgium)
Orange
Belgium
(Belgium)
Orange
Communications
Luxembourg
(Luxembourg)
Smart Services
Network
(Belgium)
IRISnet
(Belgium)
Walcom
Business
Solutions
(Belgium)
BKM
(Belgium)
CC@PS
(Belgium)
Belgian Mobile ID
(Belgium)
A3Com
(Belgium)
A&S Partners
(Belgium)
CommuniThings
(Belgium)
MWingz
(Belgium)
Upsize
(Belgium)
100%
100% 100%
76.94 %
100% 6.59 % 100% 100% 10.45% 50% 100%
100%
100%
28.16 %
Annual report 2021
107
4. Relevant information as provided by
Article 34 of the Royal Decree of
14 November 2007
Capital structure – special control rights
The share capital of Orange Belgium is represented by
59,944,757 shares without nominal value, each representing
an equal share of the capital. The shares are registered or
dematerialised.
There are no specic categories of shares and all shares have
the same voting rights with no exceptions.
The principle of the company has always been to respect the
rule “one share, one vote”. The company has decided not to
make use of the option offered by article 7:53 of the Code of
Companies and Associations to grant a double voting right to
fully paid-up shares that are registered in the share register for
at least two years without interruption in the name of the same
shareholder.
Transfer of shares
No specic restrictions have been placed on the free transfer
of shares other than those set out by law.
Exercise of voting rights
No legal or regulatory restrictions are placed on the exercise of
voting rights as regards the company’s shares.
Shareholder agreements
Orange Belgium is not aware of any shareholder agreements
which could restrict the transfer of shares and/or the exercise
of voting rights.
Appointment, renewal, resignation and dismissal
of directors
The directors are appointed or re-appointed by the General
Meeting upon proposal by the Board of Directors, which takes
into consideration the proposals made by the Remuneration
and Nomination Committee and by those shareholders
holding at least 3% of the share capital. The directors are
generally appointed for a period that does not exceed four
years in accordance with the recommendation of article 5.6
of the CGC; their mandate can be renewed by a resolution
of the General Meeting. Such renewal is subject to the
limits prescribed by law, as regards the re-appointment as
independent director.
If a directorship becomes vacant during the term of ofce, the
remaining directors have the right to appoint a replacement
director, on the recommendation of the Remuneration and
Nomination Committee. The nal appointment of the director
is submitted to the next General Meeting for approval.
The directors may be dismissed at any time by the General
Meeting.
The General Meeting held in 2021 has renewed the directors’
mandates for a term of two years.
Modification of the Articles of Association
The General Meeting may only deliberate on and decide to
amend the articles of association when the changes proposed
are set out specically in the notice convening the General
Meeting, and when the shareholders present or represented
by proxy, represent at least half the capital. If the latter
condition is not met, a second General Meeting must be
convened which shall validly deliberate and decide, regardless
of the share of capital represented by the shareholders
present or represented by proxy.
The modication shall only be accepted if approved by
three quarters of the votes cast, not counting abstentions. A
modication of the company purpose shall only be accepted if
approved by four fths of the votes cast.
Powers of the Board of Directors, in particular to
issue and buyback shares
The Board of Directors is not empowered to issue new shares
as long as the company does not make use of the authorised
capital procedure.
The Extraordinary General Meeting of 6 May 2020 has, in
accordance with and within the limitations set out in the Code
of Companies and Associations, authorised the Board of
Directors to acquire own shares of the company, by purchase
or exchange, on or outside the regulated market.
The company may only acquire shares of the company if it
does not hold more than 20% of its own shares. The purchase
price shall not be less than eighty-ve per cent (85%) or more
than one hundred and fteen per cent (115%) of the average
closing price on the regulated market on which the shares
were admitted during the 5 working days preceding the
purchase or exchange. This authorisation shall remain valid for
a period of ve (5) years as from 6 May 2020.
This authorisation extends to the acquisition (by purchase or
exchange) of shares of the company by a direct subsidiary
company, in accordance with article 7:221 and following of
the Code of Companies and Associations and under the
conditions laid down in those provisions.
The Board of Directors is also authorised to alienate or to
cancel the own shares. This authorisation extends to the
cancellation of the shares of the company acquired by a direct
subsidiary as well as to the alienation of the company’s shares
by a direct subsidiary company at a price determined by the
Board of Directors of the latter. The Board of Directors of the
company is also authorised to have the cancellation of own
shares of the company recorded by a notary public, and to
amend and co-ordinate the Articles of Association in order to
bring them in line with the relevant decisions.
On the basis if this power, the Board of Directors decided on
23 July 2021 to cancel 69,657 own shares. These shares were
acquired in the framework of the liquidity contract that was
entered into between the Company and Kepler Cheuvreux and
which was terminated on 2 September 2021.
Significant agreements that may be impacted by
a change of control of the company
Agreements to which the company is a party and which are
covered by Article 7:151 of the Code of Companies and
Associations, where applicable, are presented and approved
by the Special General Shareholders Meeting.
Agreements providing for compensation in the
event of a public takeover bid
There are no specic agreements between the company and
the members of the Board of Directors or the personnel which
provide for compensation in the event of a public takeover bid.
Annual report 2021
108
5. Composition and functioning of the Board
of Directors and its Committees
The rules governing the structure, composition, functioning
role and assessment of the Board of Directors and of its
Committees are set out in the Charter. The internal rules of the
Board of Directors (Appendix I), the Audit and Risk Committee
(Appendix III) and the Remuneration and Nomination
Committee (Appendix IV) are attached to the Charter.
The company opts for a one-tier governance structure: the
Board of Directors has the power to accomplish all required
or useful acts in order to achieve the corporate purpose of
the company, except for those acts that are reserved by law
to the General Meeting. The operational management of the
company, including without limitation the daily management,
is carried out by the Executive Management (see section 6
below).
Board of Directors
Structure and composition
The Board of Directors is comprised of a reasonable number
of directors enabling its effective functioning, while taking into
account the specicities of the company.
As at 31 December 2021, the Board of Directors consisted of
11 members:
• 10 of the 11 members of the Board of Directors are non-
executive directors;
• amongst the non-executive directors 3 directors are
independent;
• 4 members of the Board of Directors are women;
• There is no age limit within the Board of Directors.
The composition of the Board of Directors is determined
on the basis of diverse and complementary competencies,
experience and knowledge, as well as on the basis of gender
and age diversity and diversity in general. In particular, the
composition of the Board of Directors must be such that
the Board of Directors, as a whole, possess the following
competencies:
(i) “generic competencies”, namely in the eld of nance,
accounting, governance, management and organisation;
and
(ii) “industry specic competencies”, namely in the eld of
operations, technology, distribution, etc.
During 2021, the following changes occurred within the Board
of Directors:
•
The mandates of the following Directors were renewed for
a term of two years by the Ordinary General Meeting of
Shareholders on 5 May 2021: Mrs. Clarisse Heriard Dubreuil,
Mrs. Mari-Noëlle Jégo-Laveissière, K2A Management and
Investment Services BVBA represented by Mr. Wilfried
Verstraete, Leadership and Management Advisory Services
SPRL represented by Mr. Grégoire Dallemagne, Mrs. Béatrice
Mandine, Mr. Christophe Naulleau, Mr. Xavier Pichon, The
House of Value – Advisory & Solutions BVBA represented by
Mr. Johan Deschuyffeleer, Société de Conseil en Gestion et
Stratégie d’Entreprises SPRL represented by Mrs. Nadine
Rozencweig-Lemaitre and Mr. Jean-Marc Vignolles;
• Mr. Matthieu Bouchery was appointed by the Ordinary
General Meeting of Shareholders on 5 May 2021 for a term
of two years, to replace Mr. Ramon Fernandez;
• The mandate of Mrs. Martine De Rouck expired at the end of
the Ordinary General Meeting of Shareholders of 5 May 2021
and was not renewed;
• Mr. Christian Luginbühl was co-opted by the Board of
Directors with effect from 1 July 2021, to replace Mr.
Christophe Naulleau.
Name Function Nationality
Main function
BornEnd of
mandate
The House of Value - Advisory &
Solutions
(6)
Director/ Chairman Director of companies
NA Belgian
AGM 2023Xavier Pichon
(1)(2)
Executive director CEO - Orange Belgium
1967 French
AGM 2023K2A Management and Investment
Services
(3)(7)
Independent director Director of companies
NA Belgian
AGM 2023Société de Conseil en Gestion et
Stratégie d'Entreprises
(3)(4)
Independent director /
Vice-Chairman
Director of companies
NA Belgian
AGM 2023C. Heriard Dubreuil
(1)
Director
Head of Finance & Strategy
Europe - Orange S.A.
1973 French
AGM 2023
B. Mandine
(1)
Director
Head of Communication & Brand
- Orange S.A.
1968 French
AGM 2023
Ch. Luginbühl
(1)(8)
Director
Senior VP Governance & Large
Projects - Orange S.A.
1967 Swiss
AGM 2023
J.-M. Vignolles
(1)
Director French
COO Europe - Orange S.A.
1953AGM 2023
M.-N. Jégo-Laveissière
(1)
Director
Deputy CEO Europe - Orange
S.A.
1968 French
AGM 2023
M. Bouchery
(1)
Director
Head of Group Finance and
Treasury - Orange S.A.
1978 French
AGM 2023
Leadership and Management
Advisory Services (LMAS)
(3)(5)
Independent director Director of companies
NA Belgian
AGM 2021(1) Directors who represent the majority shareholder (Atlas Services Belgium).
(2) Director in charge of the daily management since 1 September 2020.
(3) The independent directors have signed a declaration stating that they comply with the criteria of independence mentioned in the Code of Companies and
Associations.
(4) The company Société de Conseil en Gestion et Stratégie d’Entreprises (SOGESTRA) is represented by Ms Nadine Lemaitre-Rozencweig.
(5) The company Leadership and Management Advisory Services (LMAS) is represented by Mr Grégoire Dallemagne.
(6) The company The House of Value - Advisory & Solutions is represented by Mr Johan Deschuyffeleer.
(7) The company K2A Management and Investment Services is represented by Mr Wilfried Verstraete.
(8) Mr Christian Luginbühl was co-opted at the board meeting of 1 July 2021 in replacement of Mr Christophe Naulleau. His nal appointment will be proposed
to the AGM to be held on 4 May 2022.
Annual report 2021
109
1. J. Deschuyffeleer
2. X. Pichon
3. W. Verstraete
7. Ch. Naulleau
8. JM. Vignolles
9. MN. Jégo-Laveissière
4. N. Lemaitre-Rozencweig
5. C. Heriard Dubreuil
6. B. Mandine
10. R. Fernandez
11. M. De Rouck
12. G. Dallemagne
13. M. Bouchery
14. C. Luginbühl
Annual report 2021
110
Functioning and role
The Board of Directors meets at least four times a year. Non-
executive directors meet at least once a year without the
CEO and the other executive directors (where applicable), in
compliance with Article 3.11 of the CGC.
The Board of Directors may only deliberate validly if at least
half its members are present or represented. The decisions are
adopted by a simple majority of the votes cast.
The Board of Directors met 14 times in 2021. Each director’s
individual attendance rate is presented in the table below.
During the year, the Board of Directors’ discussions, reviews
and decisions focused on:
• the company’s strategy and structure
• the budget and nancing
• the operational and nancial situation
• the commercial results
• the strategic projects
• the public voluntary and conditional takeover bid launched
by Orange S.A. on the shares of Orange Belgium (discussion
and review legal documentation, prospectus, independent
expert reports, etc.)
• the acquisition of VOO
• the cancellation of own shares and termination of the
liquidity contract
• the roll out and monitoring of a Covid-19 prevention plan
• the functioning and resolutions of the committees set up by
the Board of Directors
• the appointment and co-optation of new members of the
Board of Directors
• the renewal of mandates of chairman and vice-chairman of
the Board of Directors
• the appointment of a new CFO
• the evolution of the regulatory framework
• the risk management
• the assessment of the Board of Directors and the
committees
• the management of distribution channels
• the development of the B2B division
• the development of 5G / bre network
• the branding and the communication
• the network licences
• the spectrum requirements
There were no transactions or contractual relationships in
2021 between the company and its Board members giving
rise to conicts of interests.
Members of the Board
of Directors
Function 25.01 4.02 25.03 1.04 11.04 20.04 3.05 1.07 23.07 30.09 20.10 25.10 21.11 17.12
The House of Value -
Advisory & Solutions (J.
Deschuyffeleer)
Director/
Chairman
P P P P P P P P P P P P P P
Ch. Naulleau
Director
P P P P P P P P
n/a n/a n/a n/a n/a n/a
K2A Management and
Investment Services
(W. Verstraete)
Independent
director
P P P R P P P P P P P P P P
SOGESTRA (N. Lemaitre-
Rozencweig)
Independent
director/Vice-
chairman
P P P R P P P P P P P P P P
X. Pichon
Director
P P P P P P P P P P P P P P
B. Mandine
Director
P P P P P P P P R R P P P P
M. De Rouck
Independent
director
P P E P P R P
n/a n/a n/a n/a n/a n/a n/a
J.-M. Vignolles
Director
P P P P P P P P P P P P P P
Leadership and
Management Advisory
Services (G. Dallemagne)
Independent
director
P P P P P P P P R P P P P P
R. Fernandez
Director
P P P P P P P
n/a n/a n/a n/a n/a n/a n/a
C. Heriard Dubreuil
Director
(replaces F.
Gelibter)
P P P P P P P P P P P P P P
M.-N. Jégo-Laveissière
Director
(replaces V.
Le Boulanger)
P P P P P P P P P p R P P P
M. Bouchery
Director
(replaces R.
Fernandez)
n/a n/a n/a n/a n/a n/a n/a
P P P P P P P
C. Luginbühl
Director
(replaces Ch.
Naulleau)
n/a n/a n/a n/a n/a n/a n/a n/a
P P P P P P
P: Present (in person or by call)
R: validly represented
E: excused
Annual report 2021
111
Evaluation
The Board of Directors is responsible for a periodic evaluation
of its own effectiveness with a view to ensure a continuous
improvement in the governance of the company.
In this respect, and under the lead of the Chairman of the
Board of the Directors, the Board of Directors must regularly
assess (at least once every three years) its size, composition,
performance and interaction with the Executive Management.
This evaluation process has four objectives:
• assessing the operation of the Board of Directors;
• checking that the important issues are thoroughly prepared
and discussed;
• evaluating the actual contribution of each director to the
work of the Board of Directors, by his or her attendance at
the Board of Directors and Committee meetings and his or
her constructive involvement in discussions and decision-
making;
• comparing the Board of Directors’ current composition
against the Board of Directors’ desired composition.
In order to enable periodic individual evaluations, the directors
must give their full assistance to the Chairman of the Board
of Directors, the Remuneration and Nomination Committee
and any other persons, whether internal or external to the
company, entrusted with the evaluation of the directors. The
Chairman of the Board of Directors, and the performance of
his or her duties within the Board of Directors, must also be
carefully evaluated.
The non-executive directors must assess, on an annual
basis, their interaction with the Executive Management and,
if necessary, make proposals to the Chairman of the Board of
Directors with a view to facilitating improvements.
Based on the results of the evaluation, the Remuneration
and Nomination Committee, where appropriate and possibly
in consultation with external experts, submits a report
commenting the strengths and weaknesses of the Board of
Directors and make proposals to appoint new members or not
to re-elect certain members.
An extensive evaluation exercise of the Board of Directors and
its committees has started in 2020 and was nalised in 2021.
Board Committees
With a view to the efcient performance of its duties and
responsibilities, the Board of Directors has set up special
committees to analyse specic issues and to advise and
report to the Board of Directors on those issues. These
committees have an advisory role.
The new Charter, applicable as from 6 May 2020, presents
3 special committees:
• Audit and Risk Committee
• Remuneration and Nomination Committee
• Committee for the Supervision of the Governance
The rst two committees are also foreseen in the company’s
articles of association.
The Committee for the Supervision of the Governance has
been abolished with effect as from 1 July 2021 and the topics
dealt with in this committee will henceforth be dealt with by
the Audit and Risk Committee. The Charter will be amended
accordingly.
The Board of Directors pays particular attention to the
composition of each of its committees to ensure that in
appointing the members of each committee, the needs and
qualications that are required for the optimal operation of that
committee are taken into account.
Under the lead of its Chairman, the Board must regularly
assess (at least once every three years), the operation of
each committee and, in particular, its size, composition
and performance. This assessment serves the same four
objectives as those set out above to assess the Board of
Directors.
Audit and Risk Committee
The Audit and Risk Committee (the “Audit Committee”) is
comprised of at least three directors at all times. All members
of the Audit Committee must be exclusively non-executive
directors and the majority of them must be independent
directors.
As at 31 December 2021, the Audit Committee is comprised
of three directors: Société de Conseil en Gestion et Stratégie
d’Entreprises (SOGESTRA, represented by Ms. Nadine
Lemaitre-Rozencweig), Mrs. Clarisse Heriard-Dubreuil and
Leadership and Management Advisory Services (represented
by Mr. Grégoire Dallemagne).
Mrs. Martine De Rouck left the Audit Committee at the end of
her director’s mandate (5 May 2021).
Pursuant to Article 3:6, §1 (9°) of the Code of Companies and
Associations, the company must justify the independence and
expertise, in both accounting and audit matters, of at least
one of the members of the Audit Committee. Mr. Grégoire
Dallemagne, independent director, is the newly appointed
Audit Committee member who meets the independence
criteria pursuant to Article 3.5 of the CGC. His expertise in
audit and nancial matters is endorsed by an extensive career
in the telecoms industry as well as the energy sector.
The Audit Committee is responsible for preparing a long-term
audit programme covering all company activities. Without
prejudice to additional roles that the Board of Directors may
assign the Audit Committee, its role is to assist the Board of
Directors in its responsibilities with respect to:
• monitoring of the reporting process of nancial reporting;
• monitoring of the effectiveness of the internal control and
risk management systems;
• review of the budget proposals presented by the
management;
• monitoring of internal audit and its effectiveness;
• monitoring of the statutory audit of the nancial reports;
• monitoring of the nancial relations between the company
and its shareholders;
• review and monitoring of the independence of the external
auditor.
The Audit Committee must convene whenever necessary for
the proper operation of the Committee, and in any event at
least four times a year and regularly reports to the Board of
Directors. The Committee met 6 times in 2021.
Annual report 2021
112
In 2021, the main subjects discussed by the Audit Committee
were:
• annual assessment of the committee’s functioning
• periodical nancial, budget and activity reports
• internal control, including qualitative aspects
• internal audit (plan, activities, reports and conclusions)
• assessment of the external audit and report of the statutory
auditor
• risk management (annual security plan, cartography of
important risks and events, Covid-19 follow-up)
• cancelation of liquidity agreement
• annual review and report on “Fraud & Revenue Assurance”
• monitoring ACR recommendations
• GDPR and data security
• annual report on ethics, compliance and litigation, data
privacy status
• local audit mission on salary recalculation
• local audit mission on transaction with related parties
Remuneration and Nomination Committee
The Remuneration and Nomination Committee is comprised
of at least three directors at all times. All members of the
Remuneration and Nomination Committee must be exclusively
non-executive directors and the majority of them must be
independent directors.
As at 31 December 2021, the Remuneration and Nomination
Committee is comprised of ve directors: The House of
Value – Advisory Solutions (represented by Mr. Johan
Deschuyffeleer), Société de Conseil en Gestion et Stratégie
d’Entreprises (SOGESTRA, represented by Ms. Nadine
Lemaitre-Rozencweig), Mr. Christian Luginbühl (who
replaced Mr. Jean-Marc Vignolles as from 1 July 2021 on
this committee), K2A Management Investment Services
(represented by Mr. Wilfried Verstraete) and Leadership and
Management Advisory Services (represented by Mr. Grégoire
Dallemagne, who joined the committee as from 1 July 2021).
The Remuneration and Nomination Committee is
responsible for assisting the Board of Directors in dening
a remuneration policy for the company’s directors and
Executive Management. Every year, it prepares a remuneration
report for the Board of Directors. The Remuneration and
Nomination Committee ensures that procedures regarding
the appointment and renewal of directors are followed as
objectively as possible. It provides the Board of Directors with
recommendations on the appointment and remuneration of
the directors, the CEO and other members of the Executive
Management.
The Remuneration and Nomination Committee must
convene whenever necessary for the proper operation of
the committee, and in any event at least twice a year. The
committee met 5 times in 2021.
In 2021, the main subjects discussed by the Remuneration
and Nomination Committee were:
• composition and remuneration of the Board of Directors and
the Executive Management
• proposal regarding the appointment and remuneration of a
new CFO
• departure of Chief People Ofcer and proposed replacement
• proposal for appointing and co-opting directors
• analysis of the remuneration report
• endorsement of the performance bonus
• company’s teleworking policy
• assessment of the Board of Directors and its Committees
• Orange Group share plan for employees
• talent management and succession planning
Members of the Audit Committee
Function 3.02 19.04 22.07 28.09 19.10 15.12
SOGESTRA (N. Lemaitre-Rozencweig) Independent Director/ Chairman
P P P P P P
M. De Rouck Independent director
P E
n/a n/a n/a n/a
Leadership and Management Advisory
Services (G. Dallemagne)
Independent director
P P E P E P
C. Heriard Dubreuil Director (replaces F. Gelibter)
P P P P P P
P: Present (in person or by call)
R: validly represented
E: excused
Members of the Remuneration
and Nomination Committee
Function 29.01 03.02 14.06 22.07 24.11
The House of Value - Advisory & Solutions
(J. Deschuyffeleer)
Director/ Chairman
P P P P P
K2A Management and Investment Services
(W. Verstraete)
Independent director
P P P P P
SOGESTRA (N. Lemaitre-Rozencweig) Independent director
P P P P P
M. De Rouck Independent director
P P
n/a n/a n/a
J.-M. Vignolles
Director
P P P
n/a n/a
Leadership and Management Advisory
Services (G. Dallemagne)
Independent director
n/a n/a n/a
E p
C. Luginbühl
Director
(replaces J.M. Vignolles)
n/a n/a n/a
P p
P: Present (in person or by call)
R: validly represented
E: excused
Annual report 2021
113
Committee for the Supervision of the Governance
The Committee for the Supervision of the Governance is an
ad-hoc committee responsible for monitoring developments in
relation to corporate governance and to ensure their adequate
implementation in the company.
The Committee for the Supervision of the Governance has
been abolished with effect from 1 July 2021 and the topics
dealt with in this committee will henceforth be dealt with by
the Audit Committee.
The Committee for the Supervision of the Governance met
once in 2021.
In 2021, the main subject discussed by the Committee for
the Supervision of the Governance was the auto-assessment
questionnaires of the Board of Directors and its committees.
6. Composition and functioning of the
Executive Management
The rules governing the structure, composition, functioning,
role and assessment of the Executive Management are
detailed in the Charter. The Executive Management’s internal
rules are presented in the appendices (Appendix II).
Executive Management
Structure and composition
The Executive Management of the company comprises the
CEO and all persons who directly report to him and that
head a department of the company. The appointment of the
members of the Executive Management is submitted to the
Board of Directors for prior approval, on the recommendation
of the Remuneration and Nomination Committee.
Mrs. Isabel Carrion, Chief People Ofcer, left her role on the 1
st
September 2021, and was replaced on an ad interim basis by
Mr. Paul-Marie Dessart, the General Secretary.
As at 31 December 2021, the Executive Management is
comprised of 9 members:
Functioning and role
The Executive Management is responsible for managing the
company by supporting the CEO in the daily management
of the company and in the performance of his or her other
duties. Generally, the Executive Management meets weekly, or
whenever necessary for the proper operation of the Executive
Management and the company.
Members of the Corporate Governance
Function 22.02
M. De Rouck Independent director (Chairman)
P
Ch. Naulleau
Director
P
SOGESTRA (N. Lemaitre-Rozencweig) Independent director (Vice-chairman)
P
P: Present (in person or by call)
R: validly represented
E: excused
Executive Management 2021
Xavier Pichon Chief Executive Ofcer
Antoine Chouc Chief Financial Ofcer
Werner De Laet Chief Enterprise Ofcer / Chief Wholesale & Innovation Ofcer
Paul-Marie Dessart Secretary General / Chief People Ofcer ad interim*
Javier Diaz Sagredo Chief IT Ofcer
Christophe Dujardin Chief Consumer Ofcer
Stefan Slavnicu Chief Technology Ofcer
Bart Staelens Chief Transformation & Customer Experience Ofcer
Isabelle Vanden Eede Chief Brand, Communication & CSR Ofcer
*assisted by Jelle Jacquet (Deputy CPO)
Annual report 2021
114
1. X. Pichon
6. C. Dujardin 3. W. De Laet9. I. Vanden Eede
2. A. Chouc
7. S. Slavnicu 4. PM. Dessart
8. B. Staelens 5. J. Diaz Sagredo
Annual report 2021
115
8. Diversity Policy
Orange Belgium values diversity and implements various
criteria in its selection processes to account for age, gender,
educational background as well as professional experience.
The composition of the Board of Directors and of the
Executive Management is determined on the basis of
diverse and complementary competencies, experience and
knowledge.
With respect to gender diversity, when a directorship is
available, the company makes the best effort to present
candidates of both genders to ensure that at least one-third
of the Board members are of different gender than the other
members.
The Board of Directors currently has four female directors out
of a total of 11.
In the framework of the legislation regarding the publication of
information with respect to diversity, the company’s diversity
policy will be further developed and monitored by the Board of
Directors. During the year, Orange Belgium further aligned its
diversity approach with Orange S.A.’s approach. During 2021:
• We were successfully re-certied for 4 years on our equal
opportunities and inclusion policies by Bureau Veritas
following the GEEIS standard (Gender Equality European and
International Standard)
• Our employees also valued our efforts as shown by the
results of the yearly social barometer held by the Group
• We continued our focus on gender equity (8 March 2021
internal campaign, intensied well-being approach, recurrent
gender pay gap analysis, sponsoring of Young ICT woman
Boost Camp…)
• Orange Belgium was made more attractive for millennials
(further deployment of our innovative employer branding
campaign co-created with our employees…)
• Extended support was offered to all employees during
lockdown periods with special focus on wellbeing (online
sessions, extensive communication, recurrent mood polls,
online health challenge) and parents (10% parental leave,
easier access to parental leave, donation of holidays to
colleagues,…)
• In the last 10 years we have made some important changes:
we doubled the number of female directors and of female
managers and our pay gap is now amongst the lowest in the
Orange Group.
The Orange Group diversity policy aims at fostering talents
and encouraging the inclusion of all employees based on
two pillars: gender equality and equal opportunities. Orange
Belgium focuses on developing all available talents for a
unique experience by:
• Offering a diverse and inclusive work environment that
encourages all our employees to progress and to develop
their talents for a unique experience;
• Focusing on diversity in the broad sense: promoting team
diversity;
• Ensuring well-being as a key component of our equity and
inclusion strategy.
On 17 July 2019, the Group signed a Global Agreement on
workplace gender equality with the UNI global unions covering
3 main areas: gender equality in the workplace; work-life
balance; combatting discrimination and violence. In 2021
we created a bi-yearly diversity committee to follow-up on
the implementation of this agreement with all stakeholders;
Exco, personnel representatives, Condence person, CSR
representative and HR.
Orange Group main objectives for 2025:
• Programmes to support and enable job integration of
priority groups* in 100% of Orange countries (*people from
disadvantaged backgrounds, with a disability, from the
LGBT + community, juniors/seniors…)
• 30% of women on the courses run by the Orange Campus
training centre
• Maintain 85% of employees who think that Orange reects
the diversity of society* (*Results of the 2020 social
barometer)
• 25% of women in technical professions (20.5% end-2020)
• 35% of managers are women (32% end-2020)
• Orange Group GEEIS-AI* - certied (*Gender Equality
European and International)
• GEEIS certications in 26 countries
• At least 6% of employees with a disability in Orange S.A.
(France)
Equal opportunities Gender balance in all
roles
Work-life balance Raising awareness
Discrimination,
sexism, harassment &
violence
Objectives
Ensure equal
opportunities for all
regardless of gender,
age, origin, …
Ensure a balanced
representation of
women in management
levels and in technical
roles
As a key component
of workplace gender
equality and driver for
a better quality of life in
the workplace
Further strengthen
communication and
awareness-raising,
deploy initiatives
encouraging men to
play a part in gender
equality or work-life
balance
Put in place necessary
preventive actions to
combat any form of
discrimination
Group & OBE Diversity & Gender Equality ambitions 2025:
Annual report 2021
116
9. Remuneration Report
Introduction
This remuneration report concerns the 2021 nancial year.
Remuneration relating to the 2021 nancial year complies with
the remuneration policy that was applicable to that nancial
year, as explained in the remuneration report of the previous
year, and as henceforth explained in the Remuneration Policy,
that will be submitted for approval to the General Meeting of
Shareholders on 4 May 2022, and to be found on the Orange
Belgium website.
As far as needed, the remuneration policy is incorporated into
this remuneration report.
Orange Belgium has recorded a 3.6% increase in revenues
from €1,262.5m in 2020 to €1,307.5m in 2021 while EBITDAaL
has grown 8.9% (from €312.1m in 2020 to €339.8m). On the
other hand, the Organic Cash Flow has decreased by 14.3%
from €122.4m to €104.6m. Taking into consideration both
Belgian and Luxembourg scope, we observe an increase
of 3.7% in revenues from €1,314.9m in 2020 to €1,363.5m
in 2021 and a positive evolution of EBITDAaL up 9.1% from
€323.5m to €353m in 2021. Organic Cash Flow decreased
from €122.4m to €104.8m, down by 14.4%.
The Management Report chapter gives a comprehensive
overview of this evolution from 2020 to 2021. This
Management Report chapter also includes an exhaustive
list of events that occurred in 2021. 2021 has been a new
challenging year for Orange Belgium. Despite the current
sanitary context, Orange Belgium has successfully launched
hey!, its b brand. hey! is a 100% digital brand based on a
participative approach that is designed for ultra-connected
users. Another important milestone in the history of Orange
has been the signing of a deal with Nethys for the acquisition
of 75% VOO shares less 1. The closing of this transaction
is submitted to the approval of the European Commission,
expected in the coming months. On the B2B market, Orange
was the rst operator to open a 5G lab, a major step towards
the ambition to become the preferred 5G operator for the
industry. Despite the ongoing sanitary crisis, Orange Belgium’s
Executive Team has succeeded in keeping their employees or
‘team members’ (as we call them) very motivated and proud
to be part of the company via frequent communications, close
contacts, mood polls, etc. This pride to be part of Orange
Belgium is clearly reected in an increased employee Net
Promoter Score, referred to as e-NPS. From 22 at the end of
2019, it rose to 48 at the end of 2021. This is an outstanding
achievement, unsurpassed in the history of Orange Belgium
and demonstrates that despite the crisis, our team members
are committed to the company.
1. Total remuneration
The tables below contain each individual director’s total
remuneration split by component and including any
remuneration from any undertaking belonging to the same
group. Furthermore, the tables below present the relative
proportion of xed and variable remuneration.
In accordance with Article 3:6 §3, of the Belgian Code of
Companies and Associations, amounts of remuneration for the
members of the Board of Directors are disclosed individually
(table 1), and amounts of remuneration for the members of the
Executive Management are disclosed globally (table 2).
Name of
director,
position
Financial
year
Fixed remuneration Variable remuneration
Extraordi
-
nary items
Pension
expense
Total Re
-
muneration
Proportion
of fixed and
variable re
-
muneration
Base
salary
Fees
Fringe
benets
One-year
variable
Multi-year
variable
The House of
Value - Advisory
& Solutions
(1)
2021
99,000
2020 84,600
SOGESTRA
(N. Lemaitre-
Rozencweig)
(2)
2021
82,800
2020 68,400
M. De Rouck
(3)
2021
33,600
2020 62,400
Leadership and
Management
Advisory Services
(G. Dallemagne) (
4
)
2021
60,000
2020 45,600
K2A Mangement
and Investment
Services
(W. Verstraete)
(5)
2021
60,000
2020 43,200
CEO
2021 316,911
100,661 171,973 148,936 72,041 810,523
Fix: 60%
Variable: 40%
2020 375,955 99,412 329,093 50,000 71,547 926,007
Fix: 59%
Variable: 41%
TOTAL
2021
316,911
335,400
100,661 171,973 148,936 72,041 1,145,922
Fix: 72%
Variable: 28%
2020 375,955 304,200 99,412 329,093 50,000 71,547 1,230,207
Fix: 69%
Variable: 31%
(1) as President of the Board of Directors and member of the Remuneration and Nomination Committee
(2) as Vice-President of the Board of Directors, member of the Audit Committee, member of the Remuneration and Nomination Committee and member of the
Governance Supervisory Committee
(3) as member of the Audit Committee, member of the Remuneration and Nomination Committee and member of the Governance Supervisory Committee
(4) as member of the Audit Committee and member of the Remuneration and Nomination Committee
(5) as member of the Remuneration and Nomination Committee
Table 1
Annual report 2021
117
The details of the structure and components of the
remuneration of the members of the Executive Management
are explained hereunder.
Structure of the remuneration of the members of the
Executive Management
The remuneration of the members of the Executive
Management consists of the following elements:
• Yearly base remuneration (around 51% of total remuneration)
• Variable remuneration, based on short- and long-term
performance and encouraging the attainment of company
objectives (around 32% of total remuneration)
- Short-term variable remuneration called “performance
bonus”,
- Long-term variable remuneration called “Long-term
Incentive Plan 2019-2021” and “Long-term Incentive Plan
2020-2022”, “Long-term Incentive Plan 2021-2023”.
• General Meeting of Shareholders of May 2011 decided
to apply the exception provided for in article 520ter of the
Belgian Companies Code (article 7:91 of the new Belgian
Code of Companies and Associations) (combined with article
525 (article 7:121 of the new Belgian Code of Companies
and Associations) to take into account the competitive
and constantly developing context that is intrinsic to the
telecommunications sector.
• Other elements of remuneration (around 17% of total
remuneration)
- Group insurance consisting of four parts: life – death –
invalidity and exemption of premiums
- Hospital insurance
- Employee prot sharing plan
- Company car/car allowance
- Meal vouchers
Components of the remuneration of the members of
the Executive Management
The remuneration policies concerning the Executive
Management are assessed and discussed by the Nomination
and Remuneration Committee that submits its proposals for
approval to the Board of Directors.
The yearly base remuneration
The yearly base remuneration is intended to remunerate the
nature and extent of individual responsibilities.
It is based on market benchmarks while respecting internal
equity within the company.
The variable remuneration
1) The Performance bonus
The short-term variable remuneration consists of a proportion
to encourage individual performance and another part aimed
at attaining company objectives.
In 2021, the targets for the individual variable part were as
follows:
The targets for the individual part are set against the main
business priorities aligned with the company strategy. The
progress against those priorities is assessed based on
a number of indicators. The quality of management and
leadership behaviour is also taken into consideration during
the evaluation.
The targets for the collective part were as follows:
• Organic Cash Flow
• EBITDAaL (Earnings before Interest, Taxes, Depreciation and
Amortization, after Lease)
• Brand Net Promoter Score that measures the percentage
of customers who are promoters minus percentage of
customers who are detractors consolidated per main
business line
• Employee Net Promoter Score that measures to what extent
Orange Belgium employees would recommend Orange
Belgium as a good place to work (percentage of employees
who are promoters minus percentage of employees who are
detractors)
The performance bonus is granted in cash, in warrants, in
options on shares which are not connected to the company or
benets available in the Flex Income Plan.
More specically:
• A rst portion (the collective part) is paid in cash under the
form of a collective bonus CLA90 (up to the ceiling free of
taxes and normal social security charges)
• A second portion is paid in warrants or options on shares
which are not connected to the company (up to the tax
ceiling of 20% of the yearly remuneration);
• A third portion is paid in the Flexible Income Plan, resulting in
cash or benets in kind.
Other
members of
the manage
-
ment
Financial
year
1.
Fixed remuneration
2.
Variable remuneration
3.
Extraordi
-
nary items
4.
Pension
expense
5.
Total Re
-
muneration
6.
Proportion
of fixed and
variable re
-
muneration
Base salary
Fees
Fringe
benets
One-year
variable
Multi-year
variable
Executive
Committee
2021 2,058,266 301,195 827,147 444,642 371,800 4,003,050
Fix: 68%
Variable: 32%
2020 1,806,499 298,001 772,678 3,238,080
0
360,902Fix: 76%
Variable: 24%
Table 2
Annual report 2021
118
The performance criteria, their relative weighting and the actual outcome in 2021 can be summarized as follows:
Name of director,
position
1.
Performance criteria
2.
Relative
weighting
of the per
-
formance
criteria
3.
Information on Performance Targets
[optional]
4.
a) Measured perfor
-
mance
b) Actual award outcome
a) Minimum target/
threshold
performance
b) Corresponding
award
a) Maximum target /
performance
b) Corresponding
award
CEO
Individual target:
Progress against business
priorities aligned with the
business strategy as well as
management attitude and
quality of leadership
40%
a) overachieved
b) 103%
Collective target:
Organic Cash Flow
18%
a) S2/2020: achieved
S1/2021: overachieved
b) 122.5%
Collective target: EBITDAaL
18%
a) S2/2020: below target
S1/2021: below target
b) 72%
Collective target: Brand NPS
12%
a) S2/2020: below target
S1/2021: overachieved
b) 112%
Collective target: e-NPS
12%
a) S2/2020: overachieved
S1/2021: overachieved
b) 106%
Executive
Management
Individual target:
Progress against business
priorities aligned with the
business strategy as well as
management attitude and
quality of leadership
40%
a) overachieved
b) S2/2020: 108%
S1/2021: 111%
Average: 109.5%
Collective target:
Organic Cash Flow
18%
a) S2/2020: achieved
S1/2021: overachieved
b) 122.5%
Collective target: EBITDAaL
18%
a) S2/2020: below target
S1/2021: below target
b) 72%
Collective target: Brand NPS
12%
a) S2/2020: below target
S1/2021: overachieved
b) 112%
Collective target: e-NPS
12%
a) S2/2020:
overachieved
S1/2021: overachieved
b) 106%
Annual report 2021
119
2) The long-term variable remuneration
The long-term variable remuneration consists of recurring
Long-Term Incentive Plans (2019-2021, 2020-2022 and 2021-
2023) which represent 30% of yearly xed remuneration of
executive members after three years.
The LTIP is a “rolling plan” over three-year performance
periods with awards considered and decided annually by the
Nomination and Remuneration Committee.
The Nomination and Remuneration Committee decided on
three company KPI’s and targets to apply to each annual
LTIP award for the three-year performance period at the
beginning of the nancial year. Company targets are weighted
independently 50%/50%/50%, with a maximum possible
achievement for each LTIP award of 150%. Subject to the
achievement of at least one company target in any three-year
performance period, individual contribution by the executive
member can add an additional 25% to the nal result subject
to an overall maximum LTIP potential of 175% of the target
award.
LTIP awards will vest subject to company performance
measured over each three-year period with plan payments
paid in cash, in warrants or in the form of non-company share
options, or benets available in the Flex Income Plan (possibly
pension benets). In the case of payment in the form of
options, these options are frozen for one year.
In 2020, the company KPI’s decided for the 2020-2022 LTIP
award were as follows:
• Total Shareholder Return (TSR)
• Organic Cash Flow (OCF)
• Growth in Mobile Convergence: number of B2C convergent
mobile customers at the end of the relevant period
compared to the strategic plan approved by the Board of
Directors.
The 2018-2020 LTIP results in a payout of 100% for the
executive members eligible in March 2021.
In 2021, the company KPI’s decided for the 2021-2023 LTIP
award were identical as for the 2020-2022 LTIP:
• Total Shareholder Return (TSR)
• Organic Cash Flow (OCF)
• Growth in Mobile Convergence: number of B2C convergent
mobile customers at the end of the relevant period compared
to the strategic plan approved by the Board of Directors.
The 2019-2021, the 2020-2022 and 2021-2023 awards are
anticipated to vest and become payable in respectively March
2022, March 2023 and March 2024 subject to results.
Other elements of the remuneration
1) Group insurance - additional pension plan
The additional pension plan is a plan with predened
contributions. The acquired reserve consists of employers’
contributions solely.
The amounts paid into the pension plan are specied in table
1 (total remuneration).
2) Employee profit sharing plan
In accordance with the law of 22 May 2001, Orange Belgium
shares 1% of the net consolidated prot under certain
circumstances with the members of the personnel including
the members of the Executive Management. In the event the
conditions are fullled, the amount granted to each employee,
including the members of the Executive Management, is
identical regardless of the position held.
In 2019, Orange Belgium decided to share 2% of the net
consolidated prot as of the 2020 results, under certain
circumstances with the members of the personnel including
the members of the Executive Management. The percentage
could amount to a maximum of 3%, but capped overall at
€1.5m payout, depending on the achievement of results
(subject to the achievement of the nancial stretch target(s) set
above the budget).
In 2021, the General Shareholders Meeting approved the
award of a prot-sharing scheme resulting in an amount
of €850.19 gross per employee (including members of the
Executive Management), paid in June 2021.
3) Other benefits
The members of the Executive Management benet from
other advantages, in accordance with market practices
within the sector and their level of function, such as hospital
insurance, company car, meal vouchers, mobile phone with
subscription.
2. Share-based remuneration
In 2021, the Board of Directors of Orange S.A. decided to
implement a share award for the 3 year period 2021-2023
approved pursuant to the provisions of the nineteenth
resolution of the General Shareholders Meeting of 5 May
2021.
The aim of the Orange S.A. Long Term Incentive Plan is to
develop corporate loyalty amongst employees who occupy
senior positions in the Group and to align the interests of
beneciaries, the Group and shareholders.
The Board of Directors of Orange S.A. decided on 28 July
2021 to award to eligible executive members of the company
and certain other key employees rights to 2,000 Orange S.A.
shares for “Executives” and 1,000 Orange S.A. shares for
“Leaders”, subject to the terms and conditions of the 2021-
2023 award. Shares will only vest at the end of the vesting
period for the award on or after 31 March 2024, subject to
the presence conditions and achievement of the performance
conditions as assessed by the Board of Directors of Orange
S.A.
Additionally, the Board of Directors of Orange S.A. decided
on 21 April 2021 to implement an Employee Share Purchase
Offering (Offre Réservée au Personnel, ORP) in France and
internationally, intended to strengthen the Group’s employee
shareholding. Under this offering named “Together 2021”,
executive members of the company and other employees
were able to elect to purchase Orange S.A. shares at a 30%
discount to the market price and receive matching shares
up to certain limits according to the matching ratio and
terms prescribed for the offer. The shares purchased and the
matching shares received by the employees were awarded
in December 2021 and are subject to a lock up period of
ve years with the possibility of earlier release under certain
conditions. The Chief IT Ofcer and the Chief People Ofcer
each purchased 177 Orange S.A. shares at a discount to the
market price and both received 219 matching shares under
the offer being subject to the ve year lock up period.
3. Severance payments
All members of the Executive Management have an
employment contract. The Chief Consumer Business Ofcer
who joined the company in January 2020 and the Chief
Executive Ofcer who joined the company in September
2020, benet from a 12-month exit guarantee. For the other
members of the Executive Management, labour law applies
and no specic severance clauses have been agreed.
Annual report 2021
120
4. Use of the right to reclaim
No circumstances justied any reclaim in 2021.
5. Derogations and deviations from the
remuneration policy
In 2021, the Chief Executive Ofcer and the Chief IT Ofcer
beneted from the payout of the 2018-2020 LTIP due to
eligibility rights granted to them on a prorated basis on
commencement of their employment with the company. The
incentive amounts were paid in March 2021 and are included
in the gures in table 2.
6. Comparative information - evolution of
remuneration and performance
2019 2020 2021
Directors/Executive Remuneration
CEO total remuneration (in €) 740 319 926 007 810 523
Executive Management total remuneration (in €) 3 574 649 3 238 080 4 003 050
Orange’s performance
Net Prot (in m€)
33.3 54 39.7
Total Revenues (in m€) 1 340.8 1 314.9 1 363.5
EBITDAaL (in m€)
300.1 323.5 353.0
Organic Cash Flow (in m€)
112.2 122.4 104.8
Brand NPS
(*)
117.5% vs. target 97.6% vs. target 121.3% vs. target
Brand NPS
(**)
104.9% vs. target 77.6% vs. target
eNPS
(*)
110% vs target 137.5% vs. target 113.2% vs. target
eNPS
(**)
110% vs. target 143.3% vs. target
Average remuneration on a full-time basis of employees
Average remuneration per employee (in €) 68 627 69 157 71 304
(*) for Brand NPS and eNPS, the table shows the achievement vs target at the end of the 1st semester of the relevant year to be consistent with payment dates
of the performance bonus. The performance bonus paid in 2021 relates to semester 2 of 2020 and semester 1 of 2021. This change has been retroactively
applied in 2020 and 2019 for consistency reason.
(**) for Brand NPS and eNPS, the table shows the achievement vs target at the end of the second semester of the relevant year, as calculated in Annual Report
2020.
The methodology used to calculate the average remuneration
on a full-time equivalent basis of employees takes into
account: sum of the yearly base pay (monthly base salary
* 13.92) and sum of the actual variable remuneration for all
employees of Orange Belgium excluding CEO and Executive
Management divided by the sum of the Full Time Equivalent
based on the contractual work schedule. All the elements
that have been considered to calculate the CEO and Exco
remuneration on a yearly basis have been included in the
calculation: employer contribution in the meal vouchers,
prot sharing, employer contribution in the group insurance,
employer contribution in hospitalisation insurance, company
car, car allowance, benet in kind for mobile phone and
consumption vouchers in 2021. The reference period taken
was the month of December of the year in question.
Ratio between the highest remuneration and the lowest
remuneration
The ratio between the total remuneration of Orange Belgium’s
CEO and the total remuneration of the lowest paid employee
is equivalent to 22.16.
7. Information on shareholder vote
Not applicable.
10. Contractual relations with directors,
managers and companies of the Group
Every contract and every transaction between a director or
a member of the Executive Management and the company
requires prior approval from the Board of Directors, after
informing and consulting with the Audit Committee in that
respect. Such contracts or transactions should be concluded
at commercial conditions, in accordance with the prevailing
market circumstances. The prior approval of the Board of
Directors is required, even if articles 7:96 and 7:97 of the
Code of Companies and Associations are not applicable to
the said transaction or the said contract. However, services
delivered by the company in its normal course of business
and at normal market conditions (i.e. a normal “customer
relationship”) are not subject to such prior approval.
There are agreements and/or invoices regarding the
performances of the staff members and/or delivery of services
or goods between the company and several companies of the
Orange Group. These contracts and invoices are reviewed by
the Audit Committee.
11. Application of article 7:97 of the Code of
Companies and Associations during the 2021
financial year
The procedure foreseen in article 7:97 of the Code of
Companies and Associations has not been applied during the
2021 nancial year.
12. Information concerning the tasks
entrusted to the auditors
The audit of Orange Belgium’s consolidated and statutory
nancial statements is entrusted to KPMG Bedrijfsrevisoren /
Réviseurs d’Entreprises.
During 2021, the statutory auditor and linked companies
provided services for which the fees were as follows:
• Audit services €512,576
• Audit-related services €20,000
Annual report 2021
121
Statutory
auditor’s report
Statutory auditor’s report to the
general meeting of Orange Belgium
SA/NV on the consolidated nancial
statements as of and for the year
ended December 31, 2021
In the context of the statutory audit of the consolidated
nancial statements of Orange Belgium SA/NV (“the
Company”) and its subsidiaries (jointly “the Group”), we
provide you with our statutory auditor’s report. This includes
our report on the consolidated nancial statements for the
year ended December 31, 2021, as well as other legal and
regulatory requirements. Our report is one and indivisible.
We were appointed as statutory auditor by the general
meeting of May 6, 2020, in accordance with the proposal of
the board of directors issued on the recommendation of the
audit committee and as presented by the workers’ council.
Our mandate will expire on the date of the general meeting
deliberating on the annual accounts for the year ended
December 31, 2022. We have performed the statutory audit
of the consolidated nancial statements of the Group for ve
consecutive nancial years.
Report on the consolidated financial statements
Unqualified opinion
We have audited the consolidated nancial statements of
the Group as of and for the year ended December 31, 2021,
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union, and with the
legal and regulatory requirements applicable in Belgium.
These consolidated nancial statements comprise the
consolidated statement of nancial position as at December
31, 2021, the consolidated statements of comprehensive
income, changes in equity and cash ows for the year then
ended and notes, comprising a summary of signicant
accounting policies and other explanatory information. The
total of the consolidated statement of nancial position
amounts to EUR’000 1.659.672 and the consolidated
statement of comprehensive income shows a net prot for
the year of EUR’000 39.723 and total comprehensive income
attributable to equity holders of the parent of EUR’000 39.463.
In our opinion, the consolidated nancial statements give a
true and fair view of the Group’s equity and nancial position
as at December 31, 2021 and of its consolidated nancial
performance and its consolidated cash ows for the year then
ended in accordance with International Financial Reporting
Standards as adopted by the European Union, and with the
legal and regulatory requirements applicable in Belgium.
Basis for our unqualified opinion
We conducted our audit in accordance with International
Standards on Auditing (“ISAs”) as adopted in Belgium. In
addition, we have applied the ISAs as issued by the IAASB
and applicable for the current accounting year while these
have not been adopted in Belgium yet. Our responsibilities
under those standards are further described in the “Statutory
auditors’ responsibility for the audit of the consolidated
nancial statements” section of our report.
We have complied with the ethical requirements that are
relevant to our audit of the consolidated nancial statements
in Belgium, including the independence requirements.
We have obtained from the board of directors and the
Company’s ofcials the explanations and information
necessary for performing our audit.
We believe that the audit evidence we have obtained is
sufcient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most signicance in our audit of the
consolidated nancial statements of the current period. These
matters were addressed in the context of our audit of the
consolidated nancial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion
on these matters.
Revenue recognition from telecommunication activities
We refer to note 15.1.21 ‘Revenue from contracts with
customers’, note 2 ‘Sales, trade receivables, other current
and non-current assets and impact of the health crisis
linked to the Covid-19 pandemic’ and note 13 ‘Liabilities
related to contracts with customers and other assets related
to contracts with customers’ of the consolidated nancial
statements.
Description
Revenue recognition is an inherent industry risk of error
which arises from amongst others the complexity of the
telecommunication billing systems, the large amount of data
processed to determine billing and revenue, the combination
of different products sold and price and promotion changes
introduced during the year.
Our audit procedures
We gained insight into the processes surrounding the
recognition of the various revenue streams, from contract
signature and initial communication up to the invoicing and
the receipt of payments.
We took into account the high level of integration of the
various IT systems, by including IT specialists in our audit
team, and by testing the design, implementation and
effectiveness of the key automated controls of the relevant IT
systems affecting revenue recognition.
Annual report 2021
122
As part of our audit procedures, we have:
• identied the key controls implemented by Orange Belgium
in relation to the revenue cycle that were relevant for our
audit and tested their effectiveness;
• tested a sample of customer billings and compared these to
supporting evidence (e.g. customer orders or contracts and
cash received);
• tested a sample of deferred and accrued revenue ending
balances and compared these to supporting evidence;
• assessed the accounting treatment of any signicant new
products and promotions in the year; and
• assessed a selection of manual journal entries posted to
revenue accounts at year end by comparing them with our
independent calculations and estimates and by ensuring
that evidence supporting these manual entries was available.
We have also assessed the appropriateness of the information
presented in notes 2, 13 and 15.1.21 to the consolidated
nancial statements.
Goodwill valuation
We refer to note 4 ‘Goodwill’ of the consolidated nancial
statements.
Description
At December 31, 2021, the total goodwill recognized in the
consolidated statement of nancial position amounts to
EUR’000 89.474. The goodwill impairment loss recognized for
the year 2021 amounts to EUR’000 14.937.
As indicated in note 4, Orange Belgium performs an
impairment test at least annually and more frequently when
there is an indication of impairment. These tests are performed
at the level of each cash generating unit (‘CGU’) or group of
CGUs, which generally correspond to the operating segment.
An impairment loss is recognized if the recoverable amount
is lower than the carrying value. The recoverable amount is
determined by Orange Belgium, based upon the value in use.
The estimate of value in use is the present value of future
expected cash ows.
The assessment of the value in use requires numerous
estimates and judgments from management, and in particular
the assessment of the competitive, economic and nancial
environment of the countries in which Orange Belgium
operates, the ability to realize operating cash ows from
strategic plans, the level of investment to be made and the
discount and growth rates used in calculating recoverable
amounts.
Our audit procedures
We gained insight into the procedure implemented by Orange
Belgium for carrying out the annual impairment test and in
particular the review of the cash ows used in the calculation
of the recoverable amount.
With the assistance of our valuation specialists, we have
assessed the appropriateness of the method used by Orange
Belgium to calculate the recoverable amounts.
To assess the reliability of the data from the business plan
used to calculate the recoverable amount, we have in
particular:
• assessed the procedure for devising and approving business
plans;
• evaluated the management’s identication of the CGUs;
• compared cash ow forecasts with business plans from
previous nancial years;
• compared business plans from previous nancial years with
actual data over the nancial periods in question;
• challenged the key assumptions made by management
relating to revenue, EBITDA and capital expenditures with
external data when available, such as market research or
analysts’ memos;
• assessed the method used to determine the weighted
average cost of capital (‘WACC’) and the perpetual growth
rate (‘PGR’) by comparing them to the market range and to
data re-calculated with our own data sources;
• challenged the appropriateness of the sensitivity analysis
performed by management by performing further sensitivity
analyses, primarily focused on changes in operating cash
ows; and
• tested the mathematical accuracy of the cash ow models.
We have also assessed the appropriateness of the information
presented in note 4 to the consolidated nancial statements.
Board of directors’ responsibilities for the preparation
of the consolidated financial statements
The board of directors is responsible for the preparation of
these consolidated nancial statements that give a true and
fair view in accordance with International Financial Reporting
Standards as adopted by the European Union, and with the
legal and regulatory requirements applicable in Belgium, and
for such internal control as board of directors determines, is
necessary to enable the preparation of consolidated nancial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated nancial statements, the board
of directors is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the board of directors either
intends to liquidate the Group or to cease operations, or has
no realistic alternative but to do so.
Statutory auditor’s responsibilities for the audit of the
consolidated financial statements
Our objectives are to obtain reasonable assurance as to
whether the consolidated nancial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate,
they could reasonably be expected to inuence the
economic decisions of the users taken on the basis of these
consolidated nancial statements.
When performing our audit we comply with the legal,
regulatory and professional requirements applicable to audits
of the consolidated nancial statements in Belgium. The
scope of the statutory audit of the consolidated nancial
statements does not extend to providing assurance on the
future viability of the Group nor on the efciency or effectivity
of how the board of directors has conducted or will conduct
the business of the Group.
Our responsibilities regarding the going concern basis of
accounting applied by the board of directors are described
below.
Annual report 2021
123
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional skepticism
throughout the audit. We also perform the following
procedures:
• Identify and assess the risks of material misstatement of the
consolidated nancial statements, whether due to fraud or
error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufcient and
appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control;
• Obtain an understanding of internal controls relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s
internal control;
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by board of directors;
• Conclude on the appropriateness of board of directors’
use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may
cast signicant doubt on the Group’s ability to continue as
a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’
report to the related disclosures in the consolidated nancial
statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group
to cease to continue as a going concern;
• Evaluate the overall presentation, structure and content
of the consolidated nancial statements, including the
disclosures, and whether the consolidated nancial
statements represent the underlying transactions and events
in a manner that achieves fair presentation;
• Obtain sufcient appropriate audit evidence regarding the
nancial information of the entities or business activities
within the Group to express an opinion on the consolidated
nancial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with the audit committee regarding, among
other matters, the planned scope and timing of the audit and
signicant audit ndings, including any signicant deciencies
in internal control that we identify during our audit.
We also provide the audit committee with a statement that we
have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
For the matters communicated with the audit committee, we
determine those matters that were of most signicance in the
audit of the consolidated nancial statements of the current
period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter.
Other legal and regulatory requirements
Responsibilities of the Board of directors
The board of directors is responsible for the preparation and
the content of the board of directors’ annual report on the
consolidated nancial statements.
Statutory auditor’s responsibilities
In the context of our engagement and in accordance
with the Belgian standard which is complementary to the
International Standards on Auditing as applicable in Belgium,
our responsibility is to verify, in all material respects, the
board of directors’ annual report on the consolidated nancial
statements and to report on these matters.
Aspects concerning the board of directors’ annual
report on the consolidated financial statements
Based on specic work performed on the board of directors’
annual report on the consolidated nancial statements,
we are of the opinion that this report is consistent with the
consolidated nancial statements for the same period and
has been prepared in accordance with article 3:32 of the
Companies’ and Associations’ Code.
In the context of our audit of the consolidated nancial
statements, we are also responsible for considering, in
particular based on the knowledge gained throughout the
audit, whether the board of directors’ annual report on
the consolidated nancial statements contains material
misstatements, that is information incorrectly stated or
misleading. In the context of the procedures carried out, we
did not identify any material misstatements that we have to
report to you.
Information about the independence
• Our audit rm and our network have not performed any
engagement which is incompatible with the statutory audit
of the consolidated accounts and our audit rm remained
independent of the Group during the term of our mandate.
• The fees for the additional engagements which are
compatible with the statutory audit referred to in article 3:65
of the Companies’ and Associations’ Code were correctly
stated and disclosed in the notes to the consolidated
nancial statements.
European Single Electronic Format (ESEF)
In accordance with the draft standard on the audit of
compliance of the Financial Statements with the European
Single Electronic Format (hereafter “ESEF”), we have audited
as well whether the ESEF-format is in accordance with
the regulatory technical standards as laid down in the EU
Delegated Regulation nr. 2019/815 of 17 December 2018
(hereafter “Delegated Regulation”).
Annual report 2021
124
The Board of Directors is responsible for the preparation, in
accordance with the ESEF requirements, of the consolidated
nancial statements in the form of an electronic le in ESEF
format (hereafter “digital consolidated nancial statements”)
included in the annual nancial report.
It is our responsibility to obtain sufcient and appropriate
information to conclude whether the format and the tagging
of the digital consolidated nancial statements comply, in
all material respects, with the ESEF requirements under the
Delegated Regulation.
In our opinion, based on our work performed, the format
of and the tagging of information in the ofcial Dutch and
French version of the digital consolidated nancial statements
as per December 31, 2021, included in the annual nancial
report of Orange Belgium SA/NV, are, in all material respects,
prepared in compliance with the ESEF requirements under the
Delegated Regulation.
Other aspects
• Reference is made to the board of directors’ annual report
which states the board of directors’ view that the Company
is exempt from the obligation to prepare and disclose the
non-nancial information as required by article 3:32 §2 of
the Companies’ and Associations’ Code since the Company
is a subsidiary of Orange SA, who prepares a consolidated
board of directors’ annual report, that includes the non-
nancial information, in accordance with the applicable EU
directive.
• This report is consistent with our additional report to the
audit committee on the basis of Article 11 of Regulation (EU)
No 537/2014.
Zaventem, April 1, 2022
KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises
Statutory Auditor
represented by
Alexis Palm
Bedrijfsrevisor / Réviseur d’Entreprises
Annual report 2021
125
Declaration by
the
responsible
persons
We, the undersigned, Xavier Pichon, CEO, and Antoine
Chouc, CFO, declare that to our knowledge:
a) the nancial statements drawn up in accordance with
the prevailing accounting standards, give a true and
fair view of the company’s assets, liabilities, nancial
position and results of the issuer and the companies
included within its consolidation;
b) the management report contains an accurate overview
of the business activities evolution, the results and
the nancial situation of the issuer and the companies
included within its consolidation, and a description of
the main risks and uncertainties they are confronted to.
Xavier Pichon
CEO
Antoine Chouc
CFO
Annual report 2021
126
