ANNUAL RESULTS. Presentation to analysts. February 23, 2015

Transcription

1 ANNUAL 2014 RESULTS Presentation to analysts February 23, 2015

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4 Finalization of the acquisition of six new assets in Africa Growth in Group consolidated revenues Confirmation of the return to revenue growth in Morocco Continued growth in customer base Steady growth in subsidiaries results Excellent performance of Fixed-line and and Internet activities in Morocco 4

5 Macroeconomic environment Morocco International 4.4% 3.5% 4.4% 5.6% 6.6% 6.3% e e GDP in value Growth in GDP GDP in value Growth in GDP Expected improvement in growth in 2015 At a rate of 1.2%, inflation should remain under control in 2015, aided by lower prices for petroleum products. The subsidiaries recorded steady economic growth (+6.3% estimated in 2015) Inflation generally controlled (1.3% in 2014) Sources: Ministry of Finance, Bank Al Maghrib Source: IMF data October

6 Acquisition of six assets in sub-saharan Africa 9.8 million customers in M * in revenues in % from M EBITDA in % EBITDA margin in 2014 Transaction price: 474 M for shares and outstanding shareholder loans Payment terms: 102 M x4 annual tranches + 66 M for the fifth and final tranche A 4 years, 200 M$ interestfree loan from Etisalat to contribute to the investments necessary in the newly acquired subsidiaries * restated, unaudited 6

7 Operating and financial activities 8.2% growth in the Group s customer base to more than 40 million customers Continued growth in customer base despite the customer identification requirements Growth in customer base for Mobile, Fixed-line and Internet (2014 vs as %) 19.6% 17.8% +16.5% 13.6% 2.7% 8.2% 1.4% Mali Burkina Faso Gabon Mauritania Group Morocco Return to growth in consolidated revenues Return to revenue growth in Morocco beginning in Q (+0.9% in second half) Continued strong international growth with an 11.3% increase in revenues in 2014 Group s consolidated revenue growth (at constant exchange rates and as a percentage) 0.2% -1.8% -6.6% -3.7% -4.5% -4.7% -4.7% -3.4% 0.2% 1.3% 4.2% 2.7% T1 12/11 T2 12/11 T3 12/11 T4 12/11 T1 13/12 T2 13/12 T3 13/12 T4 13/12 T1 14/13 T2 14/13 T3 14/13 T4 14/13 7

8 Regulatory changes Maroc Launch of the bid tender process for 4G with deadline for submissions March 12, 2015 ANRT decision that all operations offer wholesale cost-based rates for access to their passive and active FTTH infrastructure ANRT decision requiring Maroc Telecom to make its aerial and underground infrastructure available to third-party operators at cost-based rates, without limitation on usages (4G backhaul in particular) ANRT decision requiring Maroc Telecom to provide third-party operators with several offers to access its copper local loop infrastructures at cost-based rates: physical unbundling, virtual unbundling and optical fiber links International Heavier sanctions for failure to meet Service Quality standards In Gabon and Mauritania, ban on selling unidentified SIM cards Renewal of Mauritel 2G license in July 2015 In Gabon, Gabon Telecom obtains 3G/4G* license * Award announcement pending 8

9 Success of the international growth strategy % Group Customer base Pro-forma with new subsidiaries % 45% 49% 59% % Group revenues Pro-forma with new subsidiaries % 27% 30% 40% Morocco International 9

10 2014 objectives achieved Guidance Reported Slight decrease in EBITDA -3.2% Slight increase in investments (1) (2) +2.3% (1) CAPEX for acquisitions of property, plant, equipment and intangible assets recognized over the period (2) Excluding potential acquisition of new frequencies and licenses 10

11 Maintaining a very attractive dividend yield Proposed distribution of 6.9 dirhams/share 100% of distributable earnings A dividend yield of 5.3%* dividend 15% higher in 2014 *On the basis of share price on February 20, 2015 ( MAD) 11

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13 MOROCCO // Whole telecom market Mobile: Market still growing Mobile: Insufficient elasticity despite the sharp drop in prices 120% +13% 129% 133% % % Mobile market (M customers) Penetration rate (%) Outgoing usage (min/customer/month) Fixed: excl. limited mobility, market still growing % 92 ADSL: High growth market +11% Price per outgoing mobile minute (MAD) 10% 9% 8% % +44% 3% 3% Source: ANRT % % Fixed market (M customer) Limited mobility (M customer) Penetration rate (%) ADSL market (000) Penetration rate (%) 13

14 MOROCCO // Mobile Maroc Telecom Mobile base (000) Mobile revenue (MAD millions) , % 18,230 1,380 1, % , % 15, % Postpaid 16,813 16, % 15,416 14, % Prepaid Equipment Services Continued growth in mobile customer base 3G Internet base (000) x2 4,771 1,196 2,346 1,097 3,575 3G Postpaid 3G Prepaid 1, % +186% Limited decline in Prepaid Mobile customer base despite the ban on selling pre-activated, prepaid SIM cards Continued steady growth in the Postpaid Mobil base (+8.4%) Very strong demand for 3G internet, with customer base doubling in 1 year 14

15 MOROCCO // Mobile Maroc Telecom Best usage/price elasticity Net deceleration in the decline in ARPU -27% -24% -10.0% -12.1% -5.0% +23% +16% Q Q Q Q Q Q Q Q Q Q Q Q Outgoing usage Price per outgoing minute ARPU (MAD) At quasi-equivalent price decline between 2013 and 2014, there is a net improvement in usage (+23% in 2014 vs. +16% in 2013) Slowing decline in ARPU. In 2014, mixed ARPU fell 5.0% (vs % in 2013) 15

16 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 MOROCCO // Mobile Data Maroc Telecom Rise in Prepaid 3G Internet base Introduction of Internet Pass Enhancement of the Jawal Pass x4 ARPU Data* (% ARPU) +1.8 pt 16.0% x5 11.1% +3.1 pts 14.2% Prepaid: Democratization of 3G Internet 3G base as % of Prepaid base 4% 7% 21% Prepaid Base Postpaid: Data usage up sharply +62% Strong growth in Data customer base and revenues under the impact of: Democratization of 3G Internet: introduction of the Internet Passes, enhancement of the Jawal Passes and enhancement of rate plans in Internet Volume Postpaid 3G usage (Giga/customer/month) Data monetization: cap on the provided Data volume, suspension of the connection when this volume reached *2014 data have been restated following a change in the valuation method, now based on the traffic used instead of the traffic granted. 16

17 MOROCCO // Fixed line and Internet Continued growth in Maroc Telecom Fixed line & Internet customer base Fixed line base (000) Internet base (000) +66% +20% 1,483 +7,6% % % Revue des activités 1,241 1, % 1, % % Fixed line Broadband IP VPN base +54% +23% +10% +14% Strong interest in Broadband from both es and Consumers VPN

18 MOROCCO // Fixe line and Internet Continued steady growth in Maroc Telecom Fixed line revenues Fixed line & Internet revenues (MMAD) Return to growth for Fixed line voice revenues** (%) +8.8% 7,391 8,041 1,767 +6% 2,069 1,865 2, ,287 3, % +10.4% +29.3% +0.5% -4.0% -5.1% -4.2% Inflection Point -0.5% -2.5% 3.8% 1.4% Voice Wholesale Data* LL intra Maroc Telecom -15.2% Q1 13/12 Q2 13/12 Q3 13/12 Q4 13/12 Q1 14/13 Q2 14/13 Q3 14/13 Q4 14/13 Steady growth in Fixed line and Internet business (+8.8%): Fixed line voice revenues return to growth Sharp improvement in Fixed line Data revenues driven by the Doubleplay Offers and IP VPN *Fixed line Data includes Internet, TV on ADSL and Data services to businesses **Fixed line voice revenues doesn t include wholesale income 18

19 Network modernization continues Maroc Telecom Mobile: Strong increase in voice and Data usage Rise in Single RAN site (as % of total number of Radio sites) 53% 29% 0% 33% 43% 3G trafic Voice trafic 3G base 2G base % -5% CAGR Investments to increase density and improve Mobile coverage and service quality in order to support the growth in Voice and Data traffic 881 sites installed, raising the base to 2,902 sites at the end of December 2014 Preparation for the arrival of 4G Fixe line trafic ADSL trafic ADSL base Fixe line base Fixed-line: Sharp increase in Data usages % 42% 19% 5% CAGR Rise in MSAN sites (as % of the ADSL base) 10% 44% 61% Fixed line investments focused on the development of high-speed broadband, the growth driver for Fixed line Deployment of 250 MSAN sites for an installed base of 1,774 sites at year-end 2014 Waiting for stabilization of regulatory framework to resume deployment

20 INTERNATIONAL Steady growth in subsidiaries Mobile markets continue to show high potential Revenue growth at constant exchange rate (%) 96% 100% 21.4% 22.0% % % 15.6% 10.4% 10.5% 9.3% 11.4% 10.4% 12.7% 10.9% Mobile market * (M customers) Penetration rate * (%) MT subsidiaries gaining market share Q1 12/11 Q2 12/11 Q3 12/11 Q4 12/11 7.7% Q1 13/12 Q2 13/12 Q3 13/12 Q4 13/12 Q1 14/13 Q2 14/13 Q3 14/13 Q4 14/13 Strong growth rate in International revenues maintained: 44% 48% +17% MT mobile base (M customers) Market share* (%) Excellent performance in Gabon (+21% in 2014) Very sharp growth in ARPU in Mauritania thanks to a very targeted promotions policy Despite the impact of the political crisis in Burkina Faso, very solid revenue growth (+6.5% in 2014) Steady growth maintained in Mali (+ 10.1% in 2014) * Source: Dataxis Q

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22 MOROCCO // Results M MAD Change Revenues 21,294 21, % EBITDA 12,308 11, % Margin (%) 57.8% 54.8% -3.0 pts Revenues Millions of MAD -0.8% 21,294 21,132 7,391 8, % Amortization, depreciation -3,516-3, % Restructuring costs EBITA 8,595 7, % 15,719 15, % Fixed line Mobile Margin (%) 40.4% 36.6% -3.8 pts Amortization and depreciation Millions of MAD EBITDA margin: Increase in interconnection costs and limited increase in Opex 3, % 3, ,685 Non-recurring items +4.8% 57.8% Gross Margin -1.7 pt OPEX -1.3 pt 54.8% -3.0 pts

23 MOROCCO // Cash Flow M MAD Change EBITDA 12,308 11, % CAPEX Millions of MAD CAPEX -3,601-3, % Change in WCR % Other CFFO 9,274 8, % Other 47% 1, ,295 Mobile HS broadband 39% Fixed line HS broadband 14% Strong cash generation maintained CAPEX / Revenues (%) EBITDA CFFO 76% 76% 75% -9.1% -5.3% 16% 17% 16% CFFO / EBITDA (%) 23

24 INTERNATIONAL // Results M MAD Change Change at constant exchange rate Revenues Millions of MAD Revenues 7,754 8, % 11.3% EBITDA 3,904 4, % 5.4% Margin (%) 50.4% 47.7% -2.7 pts -2.7 pts 7,079 7,754 8,630 CAGR +10.4% Amortization, deprec. -1,522-1, % 3.7% EBITA 2,383 2, % 6.3% Margin (%) 30.7% 29.3% -1.4 pt -1.4 pt Maintaining high level of EBITDA margin EBITDA margin 46,7% 50,4% 47,7% 50,4% New income tax in Burkina Faso -0.8 pt QoS fines -0.6 pt Non-recurring Items +0.6 pt 47,7% -2.7 pts -1.9 pt Cost reduction

25 INTERNATIONAL // Cash Flow M MAD Change Very good cash circulation in the Group millions of MAD EBITDA 3,904 4, % CAPEX -1,195-1, % 794 CAGR +51% Change in WCR CFFO 2,371 2, % * Net of withholding taxes Dividends paid by subsidiaries to Maroc Telecom* CAPEX / CA Very strong improvement in cash generation CFFO EBITDA 22% 15% 18% 49% 49% +45% 61% +16% 67% CFFO / EBITDA (%) 25

26 MAROC TELECOM GROUP // Results M MAD Change Change at constant exchange rate Revenues 28,559 29, % 2.1% EBITDA 16,213 15, % -3.2% Margin (%) 56.8% 53.8% -3.0 pts -3.0 pts Amortization, depreciation -5,038-5, % 7.6% Restructuring charges EBITA 10,978 10, % -6.5% Margin (%) 38.4% 35.2% -3.2 pts -3.2 pts Dep. of fixed assets acquired through business combinations % -7.3% EBIT 10,937 10, % -6.5% profit/loss % -7.8% Corporate tax -4,203-3,246-23% -23% Minority interests % -3.8% Net earnings group share 5,540 5, % 5.6% Net income attributable to Group Millions of MAD +1,032 Change EBIT -13% 5, Restructuring charges* Settlement of tax dispute 6, Change in Tax Change Result Change Minority interests 5, % * Net of tax Net earnings Net earnings G.S Net earnings group share before extr. Items group share 26

27 MAROC TELECOM GROUP // Cash Flow M MAD Change EBITDA 16,213 15, % CAPEX -4,796-4, % Change in WCR Other CFFO 11,644 11, % CFFO / EBITDA 71.8% 73.6% +1.8 pt Interest paid and received ,6% Other items of financial activity % Tax paid -3,988-3,303-17% CFAIT 7,326 7, % CFAIT / EBITDA 45.2% 50.4% +5.2 pts CAPEX / Revenues % Strong resilience of cash generation 71% CFFO / EBITDA (%) 72% -1.6% -0.9% Dividend coverage (Dividends* / CFAIT as %) CFFO Dividends 74% EBITDA CFAIT 18% 17% 17% 102% 97 % 80% *including those paid to minority 27

28 MAROC TELECOM GROUP // Net Debt Net debt remains limited after acquisition of new subsidiaries Millions of MAD Pro-forma after acquisition of the six new subsidiaries Taxes +11,541 Expenses paid -316 Dividends to minority shareholders Dividends to ,303 Shareholders ,062 Others Amount of acquisition -6,890 CFFO -5, ,366-5,123 External debt of new subsidiaries , x 0.3x 0.7x DN/EBITDA DN/EBITDA DN/EBITDA

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30 for 2015 in 2015 MOROCCO Usage stimulation and Data monetization Continue investments to launch 4G services Competitive pressures on Mobile Entrance of competitors in Broadband INTERNATIONAL Integration of the six new subsidiaries within the Group s scope of consolidation Increased investments to upgrade the networks for 2015, at constant perimeter: Stable revenues A Slight decrease in EBITDA CAPEX around 20% of revenues, excluding frequencies, licenses and 4G investments in Morocco 30

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32 Scope of consolidation of the Maroc Telecom Group MOROCCO Population: 33.7 million GDP: bn $ Penetration : 133% Market share: 41% Competitive position: 1/3 MAURITANIA Population: 3.8 million GDP: 4.3 bn $ Penetration: 91% Market share: 53% Competitive position: 1/3 BURKINA FASO Population: 17.4 million GDP: 13.3 bn $ Penetration: 72% Market share: 46% Competitive position: 1/3 MALI Population: 17.4 million GDP: 12.0 bn $ Penetration : 124% Market share: 45%** Competitive position: 2/2 BENIN CENTRAFRICA Ivory Coast NIGER Population: 10.6 million GDP: 9.2 bn $ Penetration: 92% Market share: 35% Competitive position : 1/5 Population: 4.7 million GDP: 1.7 bn $ Penetration: 30% Market share: 27% Competitive position: 3/4 Population: 24.8 million GDP: 34.0 bn $ Penetration: 78% Market share: 21% Competitive position: 3/6 Population: 17.1 million GDP: 8.3 bn $ Penetration: 32% Market share: 10% Competitive position: 3/4 TOGO Population: 7.0 million GDP: 4.8 bn $ Penetration: 59% Market share: 45% Competitive position: 2/2 GABON Population: 1.6 million GDP: 20.7 bn $ Penetration: 195% Gabon Telecom Market share: 37%* Competitive position: 2/4 Moov Market share: 15%* Competitive position: 3/4 Exchange rate 59,09 58,79 58,76 34,33 34,99 35,13 Source: Dataxis-Q3 2014, IMF-October 2014 and ANRT Q * ARCEP-Q ** Sonatel-Q FCFA/MAD MRO/MAD 32

33 Important legal notices Forward-looking statements This presentation contains forward looking statements and provisional items concerning the financial position, operating results, strategy and outlook of Maroc Telecom and the impacts of certain transactions. Even though Maroc Telecom believes that these forward-looking statements are based on reasonable assumptions, they do not constitute guarantees as to the future performance of the company. Actual results may be very different from forward-looking statements because of a number of known or unknown risks and uncertainties, most of which are outside our control, particularly the risks described in the public documents filed by Maroc Telecom with the Conseil Déontologique des Valeurs Mobilières ( and the French Autorité des Marchés Financiers ( which are also available in French on out website ( This presentation contains forward-looking information which can be assessed only on the date it is disclosed. Maroc Telecom makes no commitment to complete, update or modify these forward-looking statements because of new information, a future event or any other reason, subject to the applicable regulations, including Articles III.2.31 and ff. of the circular from the Conseil Déontologique des Valeurs Mobilières and Articles and ff. of the general regulations of the French Autorité des Marchés Financiers. 33