2017 ANNUAL RESULTS Financial analysts presentation

Transcription

1 2017 ANNUAL RESULTS analysts presentation

2 HIGHLIGHTS

3 HIGHLIGHTS Return to growth of consolidated revenues in Q4, up +3.3% at constant exchange rates Improved Group profitability: EBITDA margin up +1.2 pts to 49.1% Sustained growth in Group share of adjusted net income +4.4% Very strong performance by the new subsidiaries with +12% revenue growth at constant exchange rates Accelerated rollout of 4G+ in Morocco 93% population coverage 78% growth in mobile data traffic Surge in Fixed-Line and Internet business in Morocco +8.9% revenue growth in Q4 3

4 MACRO: MACROECONOMIC ENVIRONMENT MOROCCO INTERNATIONAL 3.4% 4.6% 3.2% 5.5% 5.5% 5.7% 2018 GDP Real GDP growth 2018 GDP Real GDP growth Gradual deregulation of the dirham, with limited impact on its exchange rate Inflation under control Exchange risk under control thanks to the CFA franc being tied to the Euro Sustained economic growth Inflation overall under control 4 Sources: Ministry of the Economy and of Finance Sources: IMF Data October 2017

5 OPERATING AND FINANCING ACTIVITIES CUSTOMER BASE GROWTH (Million) GROWTH IN CONSOLIDATED GROUP REVENUES AT CONSTANT EXCHANGE RATES (%) % Morocco International +8.0% +1.7% +5.1% +2.6% +2.2% -0.2% -1.9% -2.8% -2.2% +3.3% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 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 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 5

6 SUCCESS OF INTERNATIONAL DEVELOPMENT STRATEGY Morocco International 2015 % Group customer base 59% 61% 62% % Group revenues 41% 43% 45% % EBITDA 33% 35% 37% 6

7 REGULATORY HIGHLIGHTS IN MOROCCO Liberalization of VoIP since November 2016 ANRT reintroduces 20% asymmetry in Mobile call termination rates against Maroc Telecom AT SUBSIDIARIES January 1, 2013 March 1, 2017 MAD /min 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 3 rd 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 20% MAD /min MAD /min MAD /min Inwi Orange Maroc Maroc Telecom 7

8 2017 ANNUAL RESULTS ABOVE ANNOUNCED GUIDANCE OUTLOOK published in July 2017 At constant scope and exchange rates FY 2017 ACHIEVEMENTS Slight decrease in revenues after the impact of regulatory measures -0.9% Stable EBITDA +1.5% CAPEX approximately 23% of revenues, excluding frequencies, licenses 22.9% 8

9 DIVIDEND UP 1.9% IN LINE WITH RESULTS GROWTH Proposal to distribute MAD 6.48/share 100% of Net Profit REPRESENTING A YIELD OF 4,4%* *Based on the share price on February 16, 2018 (MAD ). 9

10 BUSINESS REVIEW

11 MOROCCO MOBILE REVENUE GROWTH IN OUTGOING SERVICES (%) +4.4% +1.3% +2.1% +1.1% +5.6% -1.0% -6.1% -6.5% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 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

12 MOROCCO MOBILE MOBILE BASE (000) MOBILE REVENUE (MAD million) +0.9% 18,375 18,533 1,729 1, % 14, % 13, % 16,645 16, % +1.9% Prepaid Postpaid ARPU (MAD/month) -5.0% Outgoing services revenues Incoming services revenues Growth in mobile customer base Growth in Postpaid Mobile customer base which represents more than 9% of the customer base Decline in incoming revenues Equipment Resulting from the liberalization of VoIP since November 2016 and the reintroduction of the asymmetry in call terminations since March 1,

13 MOROCCO CONTINUING SURGE IN MOBILE DATA MOBILE INTERNET BASE (000) DATA TRAFFIC 43% 51% Penetration Rate* 7,844 1, % 9,481 1, % +78% 16.6% 7,981 6,410 Prepaid Postpaid +24.5% 40% 24% DATA REVENUES Of which 4G traffic 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 * Calculation based on Maroc Telecom total customer base +53% 13

14 MOROCCO FIXED-LINE AND INTERNET STRONG GROWTH OF DATA REVENUES FIXED-LINE AND INTERNET REVENUE (MAD million) DATA REVENUE GROWTH (%) 8, % 8,962 2,237 2, % Focus on Data revenue 2,427 2, % 4,165 4, % -3.1% +11.3% +4.5% +9.5% +4.1% +7.1% +13.6% +9.5% +8,8% Voice (including transit) Data* Success of Double Play offers enrichment Popularity of FTTH offers *Fixed-line data includes Internet, ADSL TV, and Data services to businesses; ** Includes low-speed and leased connections. Intra-LL Maroc Telecom Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 FIXED-LINE & ADSL CUSTOMER BASE** (000) Fixed-Line ADSL % %

15 INTERNATIONAL CONTINUES TO DEMONSTRATE SUSTAINED GROWTH MOBILE CUSTOMER BASE (000) 32,370 17, % 34,967 18,073 14,593 16, % +15.8% +12.7% REVENUE GROWTH AT CONSTANT EXCHANGE RATES (MAD million) +9.2% +4.8% +2.4% -0.7% +0.6% +4.7% +5.0% New subsidiaries Historical subsidiaries Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 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 15

16 MOROCCO - NETWORK MODERNIZATION CAPEX (excluding frequencies & licenses) (MAD million) COVERAGE (as % of population) 18.4% 22.1% CAPEX/ REVENUES 3, % 4, G 99.5% 99.5% 1,972 2,224 3G 87% 96% 1,200 1,279 4G 73% 93% Very-High-Speed Fixed-Line Very-High-Speed Mobile Other 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 16

17 INTERNATIONAL ACCELERATING INVESTMENT TO SUPPORT THE GROWTH OF SUBSIDIARIES CAPEX (excluding licenses) (MAD million) 20.8% 22.2% 3, % 3,487 CAPEX/ REVENUES CHANGE IN RADIO SITES 5, % 5,967 1,723 1, % 2,526 2, % 1,466 1, % 3,097 3, % New subsidiaries Historical subsidiaries 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 17

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19 MOROCCO INCREASE IN MARGINS AND CASH GENERATION MAD million Change EBITDA MARGIN UP (%) REVENUES 21,244 20, % EBITDA 11,004 10, % Margin (%) 51.8% 52.8% +1.0 pt +0.5 pt +0.5 pt OPEX Gross margin 51.8% 52.8% +1.0 pt Adjusted EBITA* 7,157 6, % Margin (%) 33.7% 34.0% +0.3 pt CAPEX 3,905 4, % o/w licenses & frequencies 61 CAPEX/REVENUES (excl. licenses & frequencies) 18.4% 22.1% +3.7 pt Adjusted CFFO* 7,124 7, % % EBITDA 64.7% 67.2% +2.5 pt CONTINUING STRONG CASH GENERATION despite CAPEX increase (MAD million) 65% 68% 11,004 10,804 Adjusted CFFO EBITDA NET DEBT 10,937 11, % Net debt / EBITDA ,124 7, % *See Appendix 1 Adjusted CFFO / EBITDA (%) 19

20 INTERNATIONAL RESULTS IN STRONG GROWTH MAD million Change Change at constant exchange rates REVENUES 15,326 15, % +2.4% EBITDA 5,905 6, % +7.6% Margin (%) 38.5% 40.4% +1.9 pt +1.9 pt Adjusted EBITA* 3,268 3, % +10.2% Margin (%) 21.3% 22.9% +1.6 pt +1.6 pt CAPEX 4,077 3, % o/w licenses and frequencies CAPEX/REVENUES (excl. licenses & frequencies) 20.8% 22.2% +1.4 pt Adjusted CFFO* 3,563 3, % 38.5% EBITDA MARGIN UP (%) Gross Margin marge Marge brute OPEX marge SOLID CASH GENERATION (MAD million) 60% 5, pt +1.4 pt OPEX 58% 6, % Adjusted CFFO +1.9 pt EBITDA % EBITDA 60.3% 58.2% -2.1 pt NET DEBT 4,670 5, % 3,563 3, % Net debt / EBITDA *See Appendix 1 Adjusted CFFO / EBITDA (%) 20

21 MAROC TELECOM GROUP CONSOLIDATED RESULTS MAD million Change Change at constant exchange rates REVENUES 35,252 34, % -0.9 % EBITDA 16,909 17, % +1.5 % Margin (%) 48.0% 49.1% 1.1 pt 1.2 pt Adjusted EBITA 10,426 10, % +1.2 % Margin (%) 29.6% 30.2% +0.6 pt +0.6 pt Income % Corp. inc. tax -3,426-3, % Minorities % Group share of adjusted net income* 5,622 5, % +4.1% Margin (%) 15.9% 16.8% +0.8 pt +0.8 pt 5, Group share of adjusted net income GROUP SHARE OF ADJUSTED NET INCOME (MAD million) Change in adjusted EBITA Change in Result Change Corp. inc. tax Change minority interests +4,4% 5,622 5,622 5, Group share of adjusted net income *See Appendix 1 21

22 MAROC TELECOM GROUP CONSOLIDATED CASH FLOW MAD million Change EBITDA 16,909 17, % CAPEX 7,983 8, % o/w licenses & frequencies CAPEX/revenues (excl. licenses & frequencies) 20.1% 22.9% +2.8 pt Adjusted CFFO* 10,686 11, % % EBITDA 63.2% 64.2% +1.0 pt expenses % Income tax paid -3,388-3, % Adjusted CFAIT* 6,880 7, % % EBITDA 40.7% 41.1% 0.4 pt NET DEBT 12,289 13, % Net debt / EBITDA CFFO adjusted* Non-recurring items* NET DEBT (MAD million) Dec Dec , ,019-1,259 Income tax expenses paid ,170 Minority interests Dividends to shareholders Other - 5, ,042 0,7x EBITDA 0,8x EBITDA *See Appendix 1 22

23 OUTLOOK

24 OUTLOOK FOR 2018 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 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 Group outlook for 2018 at constant scope and exchange rates Stable revenues Stable EBITDA CAPEX approximately 23% of revenues, excluding frequencies and licenses 24

25 APPENDICES

26 APPENDIX 1: CHANGE FROM ADJUSTED FINANCIAL INDICATORS TO PUBLISHED FINANCIAL INDICATORS ( ( 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 Restructuring costs 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 After-tax restructuring charges 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 Restructuring costs License payments Published CFFO 7,124 3,847 10,970 6,679 3,081 9,761 26

27 APPENDIX 2: MOROCCO - GLOBAL TELECOM MARKET MOBILE MARKET MOBILE MARKET : PRICE AND USAGE 127% 123% 126% 0,27 0,23 0,23 43,0 41,5 43, Customer base (M of customers) Penetration rate (%) % +5.8% +11.9% -4.4% 2015 Outgoing usage Price per outgoing mobile minute (MAD/min) (mins/customer/month) FIXED-LINE MARKET HIGH-SPEED MARKET +20% 6.6% 6.1% 5.9% 0,5 0,3 0,2 3.2% 3.6% 3.9% 1,8 1,8 1,9 +1.6% +4.1% 1,132 1,229 1, Fixed-line market (M customers) Restricted mobility (M customers) Penetration rate (%) Source: ANRT, Q High-speed market (000) Penetration rate (%) 27

28 APPENDIX 3: REGULATORY ENVIRONMENT IN MOROCCO Mobile termination rates MAD/min Inwi Orange Maroc Maroc Telecom % January 1, 2011 July 1, 2011 January 1, 2012 July 1, 2012 January 1, 2013 March 1, 2017 Between 2011 and 2013, Mobile call termination rates were on average linear at peak hours and off-peak hours 28

29 APPENDIX 4: SCOPE OF CONSOLIDATION OF MAROC TELECOM GROUP 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 Source: Dataxis Q3 2017, IMF October 2017 and ANRT Q4 2017; 29

30 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. 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] ( and the Autorité des Marchés Financiers [French Markets Authority] ( These documents are also available in French on our website ( 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 et seq. of the French Markets Authority s General Regulations. 30