H1 2013 RESULTS JULY 25, 2013 1 H1 2013 results SOLID - PowerPoint PPT Presentation

H1 2013 RESULTS JULY 25, 2013 1 H1 2013 results

SOLID FUNDAMENTALS GROWTH IN VOICE AND DATA USAGE in Morocco under challenging competitive and macroeconomic conditions STEADY GROWTH in international business STRONG RISE in margins, attributable mainly to the impact of voluntary redundancy plans ACCELERATION OF UPGRADES for broadband fixed-line and mobile networks 2 H1 2013 results

Group Business Financial Outlook performances overview results ECONOMIC ENVIRONMENT GDP growth MOROCCO 5.0% 2.5% 4.6% 2.7% • A first-half notable for slowdown in consumer spending • Faster growth in 2013, boosted by an abundant grain harvest 2011 2012 2013e 2014e Source: Ministry of Finance, HCP 6.6% 6.0% INTERNATIONAL 5.0% 4.9% • Subsidiaries enjoy steady long-term economic growth • Inflation is manageable, at approximately 4.0% 2011 2012 2013e 2014e Source: Data IMF – April 2013 3 H1 2013 results

Group Business Financial Outlook performances overview results MOBILE MARKETS MAINTAIN MOMENTUM A still-growing market Price elasticity MOROCCO +13% +9% 72 64 120% 122% 113% - 22% Source: ANRT Source: ANRT 65% 51% 36.2 39.0 39.5 Q1 2012 Q4 2012 Q1 2013 Q1 2012 Q1 2013 Mobile market (clients in millions) Outbound usage (min) Penetration rate (%) Rate per minute for outbound mobile (MAD) Competition and multiple SIM cards are favorable to customer-base growth. Low levels of consumption in H1 in Morocco slowed volume growth. x% Mobile customer base (‘000) Mobile penetration rate (%) Growth of customer base +21.5% +33,5% 180% 182% 157% +12.5% +15.6% 15086 14605 96% 91% 88% 11304 8,422 8,705 7,533 Source: Dataxis 92% 89% 71% 49% 50% 3,502 44% 2,391 2,805 2,904 3,313 3,113 Q1 2012 Q4 2012 Q1 2013 Q1 2012 Q4 2012 Q1 2013 Q1 2012 Q4 2012 Q1 2013 Q1 2012 Q4 2012 Q1 2013 MAURITANIA BURKINA FASO GABON MALI 4 H1 2013 results

Group Business Financial Outlook performances overview results INTERNATIONAL GROWTH SUPPORTS GROUP PERFORMANCE Growth of customer bases (H1 13 vs. H1 12 in %) +25.4% Maroc Telecom Group had more than 35 millions +39.2% customers at June 30, 2013 +29.5% +16.7% • Morocco (+869,000 customers) customer-base growth: postpaid mobile, 16.7%; +12.5% internet, 19.8%; and fixed line, 6.4% +4.5% +2.3% • International (+3 million customers): 26.5% growth of mobile customer base Group Mali Gabon Burkina Mauritanie Group Morocco Faso Revenue growth (H1 13 vs. H1 12 like for like in %) +9.1% International revenue growth partially compensated for the slowdown in Morocco +10.3% +10.4% +9.9% +6.6% • Impact on business in Morocco from competition, weak consumer spending, and lower MTRs -4.6% -8.1% • Continued robust growth internationally, especially in Mali (+10.3% in H1 2013) Group Mali Mauritania Gabon Burkina Group Morocco Faso 5 H1 2013 results

Group Business Financial Outlook performances overview results SUCCESSFUL DEVELOPMENT STRATEGY FOR INTERNATIONAL ACTIVITIES % Customer base H1 2012 H2 2012 H1 2013 Morocco 38% 40% 43% International % Group revenues H1 2012 H2 2012 H1 2013 Morocco 23% 24% 26% International 6 H1 2013 results

Group Business Financial Outlook performances overview results SIGNIFICANT CAPITAL SPENDING FOR TOMORROW’S BROADBAND MOROC NETWORKS CO MOBILE BROADBAND TARGET: migration of 50% of 2G to single RAN (2G/3G/4G ready)  Significant gains in coverage, service quality, and cost cutting  More than 1,500 sites, or nearly two-thirds of the annual target, were deployed in H1 FIXED-LINE BROADBAND TARGET: replace obsolete fixed-line switches and DSLAM with MSAN  Continued augmentation of bandwidth with VDSL and FTTx  Bandwidth installed at June 30, 2013: 645k voice lines and 350k ADSL/VDSL lines 44% increase of international bandwidth , to 360 Gbit/s at June 30, 2013 56% of CAPEX in H1 in Morocco 7 H1 2013 results H1 2013 results

Group Business Financial Outlook performances overview results SOLID HALF-YEAR RESULTS • Full impact from voluntary redundancy plans EBITDA +0.6% carried out in 2012 • The margin from international activities rose by EBITDA margin +3.0 pts. to 58.1% 7.0 pts • Scheduled increase of CAPEX in H1 CFFO -1.9% • WCR managed through collection of receivables 8 H1 2013 results

BUSINESS OVERVIEW Financial results Outlook Annexes H1 2013 results

Group Business Financial Outlook Mobile MOROCCO performances overview results ENCOURAGE VOICE AND DATA USAGE Growth of prepaid mobile usage Data monetization • Widespread use of per-second billing • End of unlimited data volume for free mobile internet • Enhancement of prepaid time-based top-ups access included in all postpaid voice rate plans – Example: MAD 20 provides 1h + MAD 20 of – Bandwidth raised from128 kbit/s to 3.6 Mbit/s credited call time – Monthly limit of 1 Go (connection cut beyond that limit); • Extension of validity of prepaid mobile data customers can buy top-ups of 2 Go for MAD 50 10% of top-ups customers • Postpaid access at 7.2 Mbit/s topped up in – Example: a MAD 100 top-up is valid one month and 14 Mbit/s, restrained after 5 Go June vs. 15 days previously, with daily limit of 400 Mo – Bandwidth reduced to 128 kbit/s after 5 Go maintained and to 64 kbit/s after 10 Go Data in % of ARPU 13.9% 12.9% 9.4% H1 2012 H2 2012 H1 2013 10 H1 2013 results

Group Business Financial Outlook Mobile MOROCCO performances overview results CONTINUAL PRICE CUTS PARTIALLY COMPENSATED FOR BY HIGHER USAGE Rate change per minute Ongoing significant price cuts by Maroc Telecom: -36% • Continual price cuts in 2013 -43% because of intense competition in the prepaid segment Widespread adoption of per-second billing Change in outbound usage (per customer) +29% +52% Strong rise in consumption • Elasticity reduced in H1 2013 because of weak consumer spending 11 H1 2013 results

Group Business Financial Outlook Mobile MOROCCO performances overview results SOLID GROWTH OF CUSTOMER BASE Mobile customer base (‘000) 45.2%* 46.5% -1.3 pts 18,049 +3.8% 17,385 +16.7% 1,318 1,130 • Continued customer-base growth +2.9% 16,731 16,255 • Rapid growth maintained in 3G-internet customer base (+32%) 22,3% 20,5% • Continual improvement of churn rate H1 2012 H1 2013 Change H1 13 / H1 12 Prepaid Postpaid Total churn Market share * ANRT data, at March 31, 2013 ARPU (MAD) 81.4 -12.2% 71.5 • Significant impact on incoming ARPU from cuts in MTRs (-52% vs. -14.6% H1 2012) 13.9% • Lower outgoing ARPU because of price cuts that do not compensate for 9.4% -11.6% growth in voice and data usage H1 2012 H1 2013 Change H1 13 / H1 12 Sortant Entrant ARPU Data (% ARPU) 12 H1 2013 results

Group Business Financial Outlook Mobile MOROCCO performances overview results FOCUS ON MOBILE REVENUES Mobile-services revenues Mobile revenues (MAD millions) (MAD millions) Outgoing Incoming Services Equipment 8,937 -9.5% 8,085 307 8,630 197 -8.6% 7,888 -36% 1,760 1,567 -10.9% -8.6% 6,624 6,107 -7.8% H1 12 H1 13 H1 12 H1 13 • Continuation of policy focused on subsidies for handset sales 13 H1 2013 results

Group Busin ess Financial Fixed line and internet Outlook MOROCCO peformance overview results CONTINUED GROWTH FOR FIXED LINED AND INTERNET CONSUMER BASES • Enhanced unlimited plans to fixed lines, with higher prices – Unlimited evenings and weekends at MAD 156 / month  unlimited 24/7 + 1h to mobile numbers at MAD 176 / month – Three additional hours to mobile numbers with unlimited 24/7, at MAD 229 / month Revenue stabilization in fixed-line telephony Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 • Ongoing enhancement of ADSL offers that boost growth of fixed-line and internet customer bases 1-PLAY 2-PLAY 3-PLAY NEW MTBox MTDuo PhonyDuo Fixed line ADSL access Fixed line + ADSL (4M) Fixed line at 4 Mbit/s + ADSL (4M) + ADSL (4M) + unlimited calls to fixed lines + unlimited calls to fixed lines + IPTV MAD 99 / month MAD 199 / month MAD 249 / month MAD 299 / month 14 H1 2013 results

Group Business Financial Fixed line and internet Outlook MOROCCO performances overview results FOCUS ON FIXED-LINE BUSINESS Fixed-line and internet Fixed-line and internet revenues customer bases (‘000) (MAD millions) Voice Data LL intra Maroc Telecom Fixed line ADSL* 3,709 3,410 +8.8% 888 +95% 457 -4,5% 892 908 +1.8% +6.4% 1,245 1,325 755 2,061 630 +19.8% -7.2% 1,913 H1 2012 H1 2013 H1 2012 H1 2013 Change H1 13 / H1 12 **Fixed-line data comprise internet, ADSL TV, and data services for businesses. *Including narrowband and leased lines. • Faster growth of fixed-line customer base, particularly the residential segment (+12%), a result of the multiplay offers • Strong growth of the ADSL customer base. thanks to enhanced rate plans • Rapid development of data (24% of fixed-line and internet revenues), thanks to IP products 15 H1 2013 results