2017 ANNUAL RESULTS Financial analysts presentation HIGHLIGHTS - - PowerPoint PPT Presentation

Financial analysts presentation

2017 ANNUAL RESULTS

HIGHLIGHTS

HIGHLIGHTS

Business Review Financial Review Outlook Appendices Highlights

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Accelerated rollout of 4G+ in Morocco

93% population coverage 78% growth in mobile data

traffic Improved Group profitability: EBITDA

margin up

+1.2 pts to 49.1% Return to growth

• f consolidated

revenues in Q4, up

+3.3%

at constant exchange rates

Very strong performance by the new subsidiaries with +12% revenue growth

at constant exchange rates

Sustained growth in Group share of adjusted net income

+4.4%

Surge in Fixed-Line and Internet business in Morocco

+8.9% revenue growth in Q4

Gradual deregulation of the dirham, with limited impact on its exchange rate — Inflation under control

MACRO: MACROECONOMIC ENVIRONMENT

Business Review Financial Review Outlook Appendices Highlights

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GDP Real GDP growth

2016 2017 2018

GDP Real GDP growth

2016 2017 2018 5.5% 5.5% 5.7%

MOROCCO

Exchange risk under control thanks to the CFA franc being tied to the Euro — Sustained economic growth — Inflation overall under control

4.6% 3.4% 3.2%

INTERNATIONAL

Sources: Ministry of the Economy and of Finance Sources: IMF Data – October 2017

Sharp increase (5.5%) in the Group’s customer base to nearly 57 million customers — Growth of the customer base while pursuing the process of identifying customers in all countries — Sustained 16% growth in customer bases of new subsidiaries

OPERATING AND FINANCING ACTIVITIES

Business Review Financial Review Outlook Appendices Highlights

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CUSTOMER BASE GROWTH

(Million)

Return to growth of consolidated revenues in Q4 — Return to revenue growth in Morocco (+2.7%) thanks to Internet activities — Revenues of new subsidiaries up 14.5% at constant exchange rates

GROWTH IN CONSOLIDATED GROUP REVENUES AT CONSTANT EXCHANGE RATES

(%)

Morocco

+5.1% +2.6% +2.2%

• 0.2%
• 1.9%
• 2.8%
• 2.2%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 21.3 21.6 32.8 35.4 2016 2017 54.0 56.9

+5.5%

+8.0% +1.7% International +3.3%

SUCCESS OF INTERNATIONAL DEVELOPMENT STRATEGY

Business Review Financial Review Outlook Appendices Highlights

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% Group customer base

2015 2016 2017

% Group revenues % EBITDA

Morocco International

59% 41% 33% 61% 43% 35% 62% 45% 37%

REGULATORY HIGHLIGHTS

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Business Review Financial Review Outlook Appendices Highlights

IN MOROCCO

Liberalization of VoIP since November 2016

—

ANRT reintroduces 20% asymmetry in Mobile call termination rates against Maroc Telecom

AT SUBSIDIARIES

Continuing pressure by authorities for Service Quality and customers Identification — Universal license granted to Gabon Telecom and 3G frequencies to AT Centrafrique — Mobile call termination rates reduced in Mauritania, Ivory Coast and Benin — 3rd operator launched in Mali wich benefited from asymmetric call terminations — Sector contributions and taxes falling in Niger, Gabon and Benin, and rising in Mali and Ivory Coast

January 1, 2013 March 1, 2017

Inwi Orange Maroc Maroc Telecom

MAD 0.1399/min MAD 0.1399/min MAD 0.1399/min MAD 0.1169/min

20%

2017 ANNUAL RESULTS ABOVE ANNOUNCED GUIDANCE

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Business Review Financial Review Outlook Appendices Highlights

OUTLOOK published in July 2017

At constant scope and exchange rates

FY 2017 ACHIEVEMENTS Slight decrease in revenues

after the impact of regulatory measures

Stable EBITDA CAPEX approximately 23%

• f revenues, excluding

frequencies, licenses

• 0.9%

+1.5% 22.9%

DIVIDEND UP 1.9% IN LINE WITH RESULTS’ GROWTH

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Business Review Financial Review Outlook Appendices Highlights

*Based on the share price on February 16, 2018 (MAD 147.05).

REPRESENTING A YIELD OF 4,4%*

Proposal to distribute MAD 6.48/share 100% of Net Profit

BUSINESS REVIEW

MOROCCO – MOBILE

11

Business Review Financial Review Outlook Appendices Highlights REVENUE GROWTH IN OUTGOING SERVICES

(%)

Sustained revenue growth in outgoing services thanks to the surge in Mobile Internet revenue (+53% year-on-year) — In Q4 2017, noticeable slowdown in the impact of VoIP liberalization since November 2016

• 6.1%
• 6.5%

+4.4% +1.3% +2.1% +1.1%

• 1.0%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

+5.6%

MOROCCO – MOBILE

12

Business Review Financial Review Outlook Appendices Highlights MOBILE BASE

(000)

MOBILE REVENUE

(MAD million)

ARPU (MAD/month)

Growth in mobile customer base Growth in Postpaid Mobile customer base which represents more than 9% of the customer base — Decline in incoming revenues Resulting from the liberalization of VoIP since November 2016 and the reintroduction of the asymmetry in call terminations since March 1, 2017

Postpaid

16,645 16,766 1,729 1,767 2016 2017 18,375 18,533

+0.9%

+2.2% 0.7% Prepaid Equipment

2016 2017 14,115 13,335

• 5.5%
• 23.8%

Outgoing services revenues Incoming services revenues +1.9%

61.1 58.0 2016 2017

• 5.0%

MOROCCO – CONTINUING SURGE IN MOBILE DATA

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Business Review Financial Review Outlook Appendices Highlights

16.6%

Mobile Internet very popular Data penetration up to 51% Increase in data usage, thanks to 4G customers who consume 2.3x more than 3G customers

—

Maroc Telecom consolidates its leading position in Mobile Internet with 45.5% of market shares at end-December 2017

43% 51% Penetration Rate*

* Calculation based on Maroc Telecom total customer base

Of which 4G traffic

MOBILE INTERNET BASE (000) DATA TRAFFIC DATA REVENUES

Postpaid

6,410 7,981 1,434 1,501 2016 2017 7,844 9,481

+20.9%

+4.7% +24.5% Prepaid

24% 40% 2016 2017 2016 2017

+78% +53%

4,165 4,037 2,427 2,664 2,237 2,261

2016 2017

Success of Double Play offers’ enrichment — Popularity of FTTH offers

MOROCCO – FIXED-LINE AND INTERNET STRONG GROWTH OF DATA REVENUES

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Business Review Financial Review Outlook Appendices Highlights FIXED-LINE AND INTERNET REVENUE

(MAD million)

DATA REVENUE GROWTH

(%)

FIXED-LINE & ADSL CUSTOMER BASE** (000)

Focus on Data revenue

1 640 1 725 1 241 1 363

2016 2017

500 1 000 1 500 2 000

8,962 8,829

*Fixed-line data includes Internet, ADSL TV, and Data services to businesses; ** Includes low-speed and leased connections.

Data* Voice (including transit) Intra-LL Maroc Telecom +1.1% +9.8%

• 3.1%

ADSL Fixed-Line +11.3% +4.5% +9.5% +4.1% +7.1% +13.6% +9.5% +8,8%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

+5.2% +9.8%

+1.7%

+1.5%

INTERNATIONAL CONTINUES TO DEMONSTRATE SUSTAINED GROWTH

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Business Review Financial Review Outlook Appendices Highlights MOBILE CUSTOMER BASE

(000)

REVENUE GROWTH AT CONSTANT EXCHANGE RATES

(MAD million)

14,593 16,894 17,778 18,073

2016 2017 32,370 34,967

Solid revenue growth (+5,0% in 2017) — In Q4, acceleration of growth in the new subsidiaries (Ivory Coast and Benin in particular) and stabilization in historical subsidiaries

+8.0%

+15.8% +1.7% +12.7% +9.2% +4.8% +2.4%

• 0.7%

+0.6% +4.7% +5.0%

Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Historical subsidiaries New subsidiaries

MOROCCO - NETWORK MODERNIZATION

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Business Review Financial Review Outlook Appendices Highlights CAPEX (excluding frequencies & licenses)

(MAD million)

COVERAGE

(as % of population)

3G 2G 87% 96% 99.5% 99.5% 4G 73% 93%

18.4% 22.1% CAPEX/ REVENUES

1,200 1,279 1,972 2,224 734 1 025

2016 2017

Continuing investment in broadband confirming Maroc Telecom's position as the leading 4G+ operator in Morocco — Activation of 900 MHz frequency on 3G, allowing the improvement of Indoor and Outdoor coverage — Strong growth in Fixed and Mobile data traffic — Extension of the residential Fiber Optic access network to support the growing number of Fiber customers 2016 2017 +15.9%

Very-High-Speed Mobile Very-High-Speed Fixed-Line

3,905 4,528

Other

INTERNATIONAL – ACCELERATING INVESTMENT TO SUPPORT THE GROWTH OF SUBSIDIARIES

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Business Review Financial Review Outlook Appendices Highlights CAPEX (excluding licenses)

(MAD million)

CHANGE IN RADIO SITES

20.8% 22.2% CAPEX/ REVENUES

3,097 3,263 2,526 2,704

2016 2017

1,466 1,835 1,723 1,651

2016 2017 3,189 3,487 5,623 5,967

Moov Benin 4G network launched, and 3G in Niger - 3G license allocated to Central African Republic — Extensions and densification of Radio coverage supported by infrastructure upgrades — Rollout and upgrade of urban and interurban optical transmission networks to support the growth of Data and Voice usage +9.3%

• 4.2%

+25.2% Historical subsidiaries New subsidiaries

+6.1%

+7.0% +5.4%

Financial Review

7,124 7,319

2016 2017

65% 68% Adjusted CFFO / EBITDA (%)

MOROCCO – INCREASE IN MARGINS AND CASH GENERATION

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Business Review Financial Review Outlook Appendices Highlights

MAD million 2016 2017 Change REVENUES 21,244 20,481

• 3.6%

EBITDA 11,004 10,804

• 1.8%

Margin (%) 51.8% 52.8% +1.0 pt Adjusted EBITA* 7,157 6,954

• 2.8 %

Margin (%) 33.7% 34.0% +0.3 pt CAPEX 3,905 4,589 +17.5%

• /w licenses & frequencies

61 CAPEX/REVENUES (excl. licenses & frequencies) 18.4% 22.1% +3.7 pt Adjusted CFFO* 7,124 7,319 +2.7 % % EBITDA 64.7% 67.2% +2.5 pt NET DEBT 10,937 11,009 +0.7% Net debt / EBITDA 1.0 1.0

Adjusted CFFO EBITDA

+2.7%

*See Appendix 1

CONTINUING STRONG CASH GENERATION

despite CAPEX increase (MAD million)

EBITDA MARGIN UP

(%)

+1.0 pt

Gross margin OPEX

51.8% 52.8%

+0.5 pt +0.5 pt

2016 2017

11,004 10,804

INTERNATIONAL – RESULTS IN STRONG GROWTH

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Business Review Financial Review Outlook Appendices Highlights SOLID CASH GENERATION (MAD million) EBITDA MARGIN UP

(%) MAD million 2016 2017 Change Change at constant exchange rates REVENUES 15,326 15,733 +2.7% +2.4% EBITDA 5,905 6,357 +7.6% +7.6% Margin (%) 38.5% 40.4% +1.9 pt +1.9 pt Adjusted EBITA* 3,268 3,599 +10.1% +10.2% Margin (%) 21.3% 22.9% +1.6 pt +1.6 pt CAPEX 4,077 3,643

• 10.7%
• /w licenses and frequencies

888 156 CAPEX/REVENUES (excl. licenses & frequencies) 20.8% 22.2% +1.4 pt Adjusted CFFO* 3,563 3,700 +3.9% % EBITDA 60.3% 58.2%

• 2.1 pt

NET DEBT 4,670 5,767 +23.5% Net debt / EBITDA 0.8 0.9

*See Appendix 1

marge 2016 Marge brute OPEX marge 2017

38.5%

2016 2017

+1.4 pt 40.4%

Gross Margin

+0.5 pt

OPEX

3,563 3,700 Adjusted CFFO / EBITDA (%)

2016 2017

60% 58%

+3.9% +1.9 pt

Adjusted CFFO EBITDA

5,905 6,357

MAROC TELECOM GROUP – CONSOLIDATED RESULTS

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Business Review Financial Review Outlook Appendices Highlights

*See Appendix 1

5,622 MAD million 2016 2017 Change Change at constant exchange rates REVENUES 35,252 34,963

• 0.8%
• 0.9 %

EBITDA 16,909 17,160 +1.5% +1.5 % Margin (%) 48.0% 49.1% 1.1 pt 1.2 pt Adjusted EBITA 10,426 10,553 +1.2% +1.2 % Margin (%) 29.6% 30.2% +0.6 pt +0.6 pt Financial Income

• 446
• 491

+10.1 %

• Corp. inc. tax
• 3,426
• 3,276

+4.4 % Minorities

• 884
• 885

+0.1 % Group share of adjusted net income* 5,622 5,871 +4.4 % +4.1% Margin (%) 15.9% 16.8% +0.8 pt +0.8 pt

GROUP SHARE OF ADJUSTED NET INCOME

(MAD million) 5,622 5,871

2016 Group share

• f adjusted net

income

Change in Financial Result Change Corp.

• inc. tax

Change minority interests Change in adjusted EBITA

5,622 + 141

• 45

+150 +1

+4,4%

2017 Group share

• f adjusted net

income

MAROC TELECOM GROUP – CONSOLIDATED CASH FLOW

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Business Review Financial Review Outlook Appendices Highlights

*See Appendix 1

MAD million 2016 2017 Change EBITDA 16,909 17,160 +1.5% CAPEX 7,983 8,232 +3.1%

• /w licenses & frequencies

888 217 CAPEX/revenues (excl. licenses & frequencies) 20.1% 22.9% +2.8 pt Adjusted CFFO* 10,686 11,019 +3.1% % EBITDA 63.2% 64.2% +1.0 pt Financial expenses

• 418
• 793

+89.7% Income tax paid

• 3,388
• 3,170
• 6.4%

Adjusted CFAIT* 6,880 7,056 2.6% % EBITDA 40.7% 41.1% 0.4 pt NET DEBT 12,289 13,042 +6.1 % Net debt / EBITDA 0.7 0.8

Financial expenses Income tax paid Minority interests Dividends to shareholders Other CFFO adjusted* Non-recurring items*

NET DEBT

(MAD million)

0,7x EBITDA 0,8x EBITDA

• Dec. 2016
• Dec. 2017
• 12,289
• 13,042

+ 11,019

• 1,259
• 793
• 3,170
• 921
• 5,598
• 31

OUTLOOK

OUTLOOK FOR 2018

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Business Review Financial Review Outlook Appendices Highlights MOROCCO Stable Mobile call termination rates — Slowdown of the impact of VoIP on incoming revenues — Competitive pressure on Mobile — Major investment to support strong growth in Data usage — Expansion of FTTH network coverage — Launch of an international submarine fiber optic cable project

Group outlook for 2018 at constant scope and exchange rates

INTERNATIONAL Reduction in call termination rates with positive impact on margins — Continuing profitable growth thanks to sustained growth of Data business — Investment still very high to expand coverage and improve quality of service — Regulatory pressure to identify customers and Quality Of Service — Acquisition of new 4G licenses Stable revenues Stable EBITDA CAPEX approximately 23% of revenues, excluding frequencies and licenses

APPENDICES

APPENDIX 1: CHANGE FROM ADJUSTED FINANCIAL INDICATORS TO PUBLISHED FINANCIAL INDICATORS

26

Business Review Financial Review Outlook Appendices Highlights

(

2016 2017

( MAD million) Morocco International Group Morocco International Group

Adjusted EBITA

7,157 3,268 10,426 6,954 3,599 10,553

Real estate proceeds

+297 +297

Restructuring costs

• 255
• 255
• 193
• 49
• 243

Published EBITA

6,902 3,565 10,468 6,760 3,550 10,310

Adjusted net income – Group share

5,622 5,871

Real estate proceeds

+152

After-tax restructuring charges

• 176
• 165

Published net income – Group share

5,598 5,706

Adjusted CFFO

7,124 3,563 10,686 7,319 3,700 11,019

Real estate proceeds

+317 +317

Restructuring costs

• 579
• 41
• 620

License payments

• 33
• 33
• 61
• 578
• 639

Published CFFO

7,124 3,847 10,970 6,679 3,081 9,761

APPENDIX 2: MOROCCO - GLOBAL TELECOM MARKET

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Business Review Financial Review Outlook Appendices Highlights

Source: ANRT, Q4 2017

Customer base (M of customers) Penetration rate (%) 43,0 41,5 43,9

127% 123% 126%

2015 2016 2017

101 113 108

0,27 0,23 0,23

Outgoing usage (mins/customer/month) Price per outgoing mobile minute (MAD/min)

2015 2016 2017

1,132 1,229 1,325

3.2% 3.6% 3.9%

2015 2016 2017

High-speed market (000) Penetration rate (%) 1,8 1,8 1,9 0,5 0,3 0,2

6.1% 5.9%

2015 2016 2017

Restricted mobility (M customers) Penetration rate (%) Fixed-line market (M customers)

• 4.4%
• 3.5%

+11.9%

MOBILE MARKET MOBILE MARKET : PRICE AND USAGE FIXED-LINE MARKET HIGH-SPEED MARKET

6.6%

+5.8%

+1.6% +4.1% +20%

APPENDIX 3: REGULATORY ENVIRONMENT IN MOROCCO

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Business Review Financial Review Outlook Appendices Highlights

January 1, 2011 July 1, 2011 January 1, 2012 July 1, 2012 January 1, 2013

0.9232 0.6601 0.4152 0.2534 0.7485 0.5390 0.3390 0.2289 0.6238 0.4679 0.2943 0.2066 0.1399

Maroc Telecom Orange Maroc Inwi Mobile termination rates MAD/min

March 1, 2017

0.1399 0.1169 Between 2011 and 2013, Mobile call termination rates were on average linear at peak hours and off-peak hours

20%

APPENDIX 4: SCOPE OF CONSOLIDATION OF MAROC TELECOM GROUP

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Business Review Financial Review Outlook Appendices Highlights

Source: Dataxis – Q3 2017, IMF – October 2017 and ANRT – Q4 2017;

MOROCCO Population : 34,0 millions GDP : 102 Md $ Mobile penetration rate: 126% Mobile Market Share : 42% Competitive Position : 1/3 MAURITANIE Population : 3,9 millions GDP : 5,0 Md $ Mobile penetration rate : 95% Mobile Market Share : 59% Competitive position : 1/3 BURKINA FASO Population : 18,9 millions GDP : 13,2 Md $ Mobile penetration rate : 87% Mobile Market Share : 41% Competitive Position : 1/3 MALI Population : 18,9 millions GDP : 15,0 Md $ Mobile penetration rate: 105% Mobile Market Share : 34% Competitive Position : 2/2 BENIN Population : 11,4 millions GDP : 9,4 Md $ Mobile penetration rate : 81% Mobile Market Share : 42% Competitive Position : 2/4 CENTRAFRIQUE Population : 5,0 millions GDP : 2,0 Md $ Mobile penetration rate : 21% Mobile Market Share : 15% Competitive Position : 4/4 CÔTE D’IVOIRE Population : 25,0 millions GDP : 39,9 Md $ Mobile penetration rate: 134% Mobile Market Share : 23% Competitive Position : 3/3 NIGER Population : 18,8 millions GDP : 7,9 Md $ Mobile penetration rate : 39% Mobile Market Share : 24% Competitive Position : 3/4 TOGO Population : 7,7 millions GDP : 4,8 Md $ Mobile penetration rate : 79% Mobile Market Share : 47% Competitive Position : 2/2 GABON Population : 1,9 millions GDP : 14,5 Md $ Mobile penetration rate: 150% Mobile Market Share : 56% Competitive Position : 1/3

IMPORTANT LEGAL NOTICES

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Business Review Financial Review Outlook Appendices Highlights

FORWARD-LOOKING STATEMENTS —

This presentation contains forward looking statements and provisional items concerning the financial position,

• perating results, strategy and outlook of Maroc Telecom and the impacts of certain transactions. Although Maroc

Telecom believes that these forward-looking statements are based on reasonable assumptions, they do not amount to guarantees for the company’s future performance. The actual results may be very different from the forward-looking statements because of a number of risks and uncertainties, both known and unknown. The majority of these risks are beyond our control, namely the risks described in public documents filed by Maroc Telecom with the Autorité Marocaine du Marché des Capitaux [Moroccan Capital Markets Authority] (www.ammc.ma) and the Autorité des Marchés Financiers [French Financial Markets Authority] (www.amf- france.org). These documents are also available in French on our website (www.iam.ma). This presentation contains forward-looking information which can be assessed only on the date it is disclosed. Maroc Telecom does not undertake to supplement, update, or alter these forward-looking statements as a result of new information, future events, or for any other reason, subject to the applicable regulations, and especially to Articles III.2.31 et

• seq. of the circular issued by the Moroccan Capital Markets Authority and to Articles 223-1 et seq. of the French

Financial Markets Authority’s General Regulations.