HIGHLIGHTS RETURN TO GROWTH OF OUTGOING MOBILE REVENUE IN MOROCCO THANKS TO SUCCESS WITH DATA +1.6% INCREASE OF 1.4 PT IN THE GROUP EBITDA MARGIN TO 50% STRONG REVENUE GROWTH OF NEW SUBSIDIARIES +8.0% at constant exchange rates SUSTAINED GROWTH GROUP SHARE OF ADJUSTED NET INCOME +5.9% at constant exchange rates ACCELERATED DEPLOYMENT OF 4G+ IN MOROCCO: 80% POPULATION COVERAGE RATE SUCCESS OF THE VOLUNTARY REDUNDANCY PLAN IN MOROCCO 1,026 beneficiaries I 3 I
OPERATIONAL AND FINANCIAL ACTIVITIES I GROWTH IN CUSTOMER BASE I (million) I GROWTH OF OUTGOING SERVICES REVENUE I (MAD million) 53.0 +3.8% 55.0 32.0 33.7 +5.1% +2.1%* +1.8% 21.0 21.4 +1.9% +2.3% International Maroc INCREASE OF 3.8% IN GROUP CUSTOMER BASE TO MORE THAN 55 MILLION CUSTOMERS Continued growth of customer base despite the customer identification process in all countries Sustained growth of 22% in customer base of new subsidiaries In Morocco, thanks to the STRONG INCREASE IN MOBILE INTERNET where revenues grew by 57% In the subsidiaries, despite an unfavorable economic climate and the deactivation of unidentified customers *At constant exchange rates I 4 I
SUCCESS OF INTERNATIONAL DEVELOPMENT STRATEGY H1 2016 H2 2016 H1 2017 % GROUP CUSTOMER BASE 60% 61% 61% % GROUP REVENUES 44% 43% 44% Morocco International % EBITDA 33% 35% 37% I 5 I
REGULATORY HIGHLIGHTS IN MOROCCO Reinstatement by the regulator of a 20% asymmetry in Mobile call terminations starting March 1, 2017 January 1, 2013 March 1, 2017 0.1399 DH/Mn 0.1399 DH/Mn 0.1399 DH/Mn Inwi Orange Maroc 0.1169 DH/Mn Maroc Telecom Referral by Inwi regarding the implementation of unbundling Launch by the regulator of consultations for the demarcation of the pertinent markets for 2018-2020 AT SUBSIDIARIES Strengthening of constraints associated with unidentified customers: constraints on sales of SIM cards and suspension of customers Decreases in call termination rates with a positive impact on margins I 6 I
RESULTS OF THE FIRST HALF OF 2017 UPDATING OF OUTLOOK FOR 2017 At constant scope and exchange rates H1 2017 ACHIEVEMENTS Slight drop in revenues following impact of latest regulatory measures -2.3% Stable EBITDA +0.4% CAPEX of approximately 23% of revenues, excluding frequencies or licenses 17.7% I 7 I
MOROCCO MOBILE / RETURN TO GROWTH IN OUTGOING SERVICE REVENUES +2.9% +1.6% -2.0% -7.8% -8.1% -6.0% -5.2% -6.3% -11.3% H2 16/15 H1 17/16 H1 13/12 H2 13/12 H1 14/13 H2 14/13 H1 15/14 H2 15/14 H1 16/15 H2 16/15 H1 17/16 I 9 I
MOROCCO MOBILE I MOBILE CUSTOMER BASE I (000) I MOBILE REVENUE I (MMAD) 18,179 18,411 +1.3% 1,713 1,776 +3.7% 6,934-5.5% 6,552 199 117 1,749 1,371-21.6% 16,466 16,635 +1.0% 4,986 5,064 +1.6% S1 H1 2016 S1 H1 2017 Prepaid Postpaid Incoming revenue Outgoing revenue Equipment I ARPU I (MAD/month) -5.2% 60.1 56.9 S1 H1 2016 S1 H1 2017 RETURN TO GROWTH IN OUTGOING REVENUES Strong enthusiasm for Data where revenues grew 57% DROP IN INCOMING REVENUES Significant decrease in incoming international traffic since the liberalization of telephony over IP in November 2016 Decrease of 16% of the call termination rate of Maroc Telecom since March 1, 2017 I 10 I
MOROCCO DATA MOBILE CONTINUED SURGE IN MOBILE DATA I MOBILE INTERNET CUSTOMER BASE I (000) I DATA TRAFFIC I (GB) 38% 45% Penetration rate* 6,944 1,426 +20.6% 8,372 1,475 +3.4% 16,6% +82% Postpaid 5,518 6,897 +25.0% Prepaid S1 H1 2016 S1 H1 2017 STRONG SURGE FOR 3G/4G INTERNET AS A RESULT OF the expansion of the 4G+ network The strong growth in 4G usage where traffic represented 35% of Mobile Internet traffic in H1 2017 I REVENUE DATA I (000) +57% MAROC TELECOM IS THE CLEAR LEADER IN MOBILE INTERNET WITH A 47.5% MARKET SHARE AT THE END OF MARCH 2017 * Calculated on the Maroc Telecom overall base I 11 I
MOROCCO FIXED AND INTERNET I FIXED-LINE & INTERNET REVENUE I (MAD million) I FIXED-LINE & ADSL CUSTOMER BASE ** I (000) 4,471-0.5% 4,451 1,124 1,127 +0.3% 1,197 1,322 2,150 2,001 +10.4% -6.9% 1,617 1,678 1,197 1,306 +3.8% +9.1% Voice (including transit) Data* LL intra Maroc Telecom Fixed-line ADSL Continued STRONG GROWTH OF DATA REVENUES supported by the success of High-speed offers on ADSL and Fiber Optic Decrease in voice revenues due to the volatility of international transit activities with very low margins *Fixed Data combines Internet, TV over ADSL and business Data services; ** Including low speed and leased connections. I 12 I
INTERNATIONAL I MOBILE CUSTOMER BASE I (000) I CHANGE IN REVENUES I 31,647 +5.1% 33,254 7,678 7,582 +0.0%** 18,963 17,722-6.5% -4.3% 12,684 15,532 H1 2016* H1 2017 +22.5% Historical subsidiaries New subsidiaries +8.0% *The merger between Gabon Telecom and Moov Gabon in 2016 led to the consolidation of their historical data. I MARKET SHARES I (%) Q1 2016 Q1 2017 Historical subsidiaries 44% 43% New subsidiaries 26% 28% Global 35% 35% Source: Dataxis Q1 2017 I 13 I Revenue stability at subsidiaries due to the DECREASE IN CALL TERMINATION RATES (positive impact on margins) OUTGOING SERVICE REVENUES SUSTAINED GROWTH OF 1.8% despite an unfavorable macroeconomic climate and the deactivation of unidentified customers **At constant exchange rates
MOROCCO - NETWORK MODERNIZATION I CAPEX I (MAD million) 14.6% 17.8% 1,552 +15,5% 1,793 319 369 834 1,128 349 346 Very-High-Speed Fixed-Line Very-High-Speed Mobile CAPEX/ REVENUES Other 2G 3G I COVERAGE I (as % of population) 99.5% 99.5% 86.6% 89.0% 4G 70.0% 80.0% CONTINUED INVESTMENT IN HIGH SPEED WITH AN 80% 4G POPULATION COVERAGE RATE, CONFIRMING MAROC TELECOM S POSITION AS THE NUMBER ONE 4G+ OPERATOR IN MOROCCO Introduction of 900 Mhz frequencie on 3G, allowing for improved Indoor and Outdoor coverage Strong growth in international bandwidth capability and doubling of Mobile Data Network capability in one year Extension of the residential Fiber Optic access network in order to support the growth in the number of Fiber customers I 14 I
INTERNATIONAL - NETWORK MODERNIZATION I CAPEX (excl. licenses) I (MAD million) I CHANGE IN RADIO SITES I 17.4% 16.2% CAPEX/ REVENUES 5,227 +10% 5,741 1,335-8.0% 1,228 639 545 2,398 2,564 +7% 696 683 New subsidiaries Historical subsidiaries 2,829 3,177 +12% INTERNATIONAL Extensions and densification of Radio coverage together with upgrading of infrastructure Deployment and upgrading of urban and interurban optical transmission networks in order to support the growth of Data and Voice usage Launch of the Moov Benin 4G network and launch of the 3G network in Niger in progress I 15 I
MOROCCO MAINTAINING HIGH MARGINS MAD million Change REVENUES 10,615 10,076-5.1% EBITDA 5,670 5,355-5.6% Margin (%) 53.4% 53.1% -0.3 pt Adjusted EBITA* 3,824 3,493-8.6% Margin (%) 36.0% 34.7% -1.4 pt CAPEX 1,552 1,793 +15.5% I EBITDA MARGIN I (%) Cost of sales -7.4% OPEX -2.3% EBITDA Margin Almost stable at 53.1% O/w licenses and frequencies CAPEX /Revenues (excl. licenses and frequencies) 0 0 14.6% 17.8% +3.2 pt Adjusted CFFO * 3,408 3,092-9.3% I MAINTAINING GOOD CASH GENERATION I (MMAD) despite the increase in CAPEX 60% 58% Adjusted CFFO / EBITDA (%) % EBITDA 60.1% 57.7% -2.4 pt NET DEBT 13,955 14,493 +3.9% Net debt/ebitda 1.2x 1.4x -9.3% 3,408 3,092 Ajusted CFFO EBITDA * Please see Appendix 1 I 17 I
INTERNATIONAL MAD million Change Change at constant exchange rates REVENUES 7,678 7,582-1.3% +0.0% EBITDA 2,855 3,166 +10.9% +12.4% Margin (%) 37.2% 41.8% +4.6 pt +4.6 pt I REVENUES I Revenue growth at constant exchange rates and excluding the decrease in mobile termination rates I EBITDA MARGIN I (%) +1.1 % Adjusted EBITA* 1,483 1,794 +21.0% +22.7% Margin (%) 19.3% 23.7% +4.4 pt +4.4 pt CAPEX 2,223 1,228-45.6% O/w licenses and frequencies CAPEX /Revenues (excl. licenses and frequencies) 888-17.4% 16.0% -1.4 pt Adjusted CFFO* 1,832 1,435-21.7% % EBITDA 64.2% 45.3% -18.9 pt 37,2% +2.3 pt 2016 non-recurring items +0.9 pt Gross margin +1.4 pt OPEX 41,8% I LOW CASH GENERATION I (MAD million) Due to seasonality of the WCR 64% 45% Adjusted CFFO / EBITDA (%) NET DEBT 5,609 6,164 +9.9% Net debt/ebitda 1.0x 1.0x * Please see Appendix 1 1,832-22% 1,435 Adjusted CFFO EBITDA I 18 I
MAROC TELECOM GROUP CONSOLIDATED RESULTS MAD million HY1 2016 HY1 2017 Change Change at constant exchange rates REVENUES 17,593 17,091-2.8% -2.3% EBITDA 8,525 8,521 +0.0% +0.4% Margin (%) 48.5% 49.9% +1.4 pt +1.4 pt Adjusted EBITA* 5,306 5,287-0.4% +0,1% Margin (%) 30.2% 30.9% +0.8 pt +0.7 pt Financial Income -203-162 -20.2% Income Tax -1,894-1,709-9.8% Minority shareholders -420-471 +12.1% GROUP SHARE OF ADJUSTED NET INCOME 2,766 2,923 +5.7% +5.9% Margin (%) 15.7% 17.1% +1.4 pt +1.3 pt 2,766 H1 2016 Group share of adjusted net income I ADJUSTED GROUP SHARE OF NET INCOME I (MAD million) Change Adjusted EBITA -19 +41 Change Financial Result +185 Change Income Tax Change Minorities -51 2,923 +5.9%** H1 2017 Group share of adjusted net income * Please see Appendix 1 ** At constant exchange rates I 19 I
MAROC TELECOM GROUP CONSOLIDATED CASH FLOW MAD million Change EBITDA 8,525 8,521 +0.0% I NET DEBT I (MAD million) Dec. 2016 H1 2017 CAPEX 3,775 3,021-20,0% O/w licenses and frequencies CAPEX / Revenues (excluding licenses and frequencies) 888-16.4% 17.7% +1.3 pt Adjusted CFFO* 5,240 4,526-13.6% -12,289 + 4,526 Adjusted CFFO** Exceptional Elements* -1,018 Financial expenses -190 Income tax paid -1,651 Dividends to minority Dividends to shareholders shareholders -442-16,959 +7.5% % EBITDA 61.5% 53.1% Financial expenses -70-190 -5,588 Other -307 Income tax paid -1,935-1,651 Adjusted CFAIT 3,235 2,685-17,0% % EBITDA 37.9% 31.5% -6.4 pt NET DEBT 15,776 16,959 +7.5% Net debt/ebitda 0.9x 1.0x 0.7x ND/EBITDA 1.0x ND/EBITDA * Please see Appendix 1 I 20 I
2017 OUTLOOK 2017 HIGHLIGHTS IN MOROCCO INTERNATIONAL Reinstatement of a 20% asymmetry on mobile call terminations as of March 1, 2017 Liberalization of telephony over IP in November 2016 Competitive pressure on Mobile Substantial 4G investments to support strong growth of data usage Drop in call termination rates with a positive impact on margins Continuing growth in profitable returns despite an unfavorable macroeconomic environment Continued investments to increase coverage and improve quality of service Regulatory pressures on customer identification UPDATE ON THE 2017 OUTLOOK, AT CONSTANT SCOPE OF CONSOLIDATION AND EXCHANGE RATE: Slight decline in revenues due to the new regulatory measures Stable EBITDA CAPEX approximately 23% of revenues, excluding frequencies and licenses. I 22 I
APPENDIX 1: CHANGE FROM ADJUSTED FINANCIAL INDICATORS TO PUBLISHED FINANCIAL INDICATORS ( MAD million Morocco International Group Morocco International Group Adjusted EBITA 3,824 1,483 5,306 3,493 1,794 5,287 Disposal of a real estate asset +297 +297 Restructuring charges -188-47 -235 Published EBITA 3,824 1,780 5,603 3,305 1,747 5,052 Group share of adjusted net income 2,766 2,923 Disposal of a real estate asset +152 Restructuring charges after taxes -161 Group share of published net income 2,918 2,762 Adjusted CFFO 3,408 1,832 5,240 3,092 1,435 4,526 Disposal of a real estate asset +317 +317 Restructuring charges -573-7 -580 License payment -33-33 -438-438 Published CFFO 3,408 2,116 5,524 2,519 989 3,508 I 24 I
MACROECONOMIC ENVIRONMENT MOROCCO INTERNATIONAL 4.5% 4.5% 5.6% 5.3% 5.2% 5,0% 1.2% 2015 2016 2017e PIB Actual GDP growth 2015 2016 2017e PIB Actual GDP growth 0,0% Recovery of economic growth as a result of a good agricultural year ahead Inflation remains under control Sustained economic growth Inflation under control overall Sources: Ministry of Economy and Finance I 25 I Sources: IMF Data - April 2017
MOROCCO - GLOBAL TELECOM MARKET I MOBILE: A MARKET IN DECLINE I 127% 123% 123% I MOBILE: FLEXIBILITY IS INSUFFICIENT AGAINST THE SHARP DECLINE IN PRICES I 0.27 0.23 0.22 43.0 41.5 41.8 101 113 110 2015 2016 Q1 2017 Mobile market (million customers) Penetration rate (%) I FIXED LINE: EXCLUDING MOBILE, THE MARKET CONTINUES TO GROW I 2015 2016 Q1 2017 Outgoing usage Price per outgoing mobile minute (MAD/min) (minute/customer/month) I ADSL: EXCLUDING MOBILE, THE MARKET CONTINUES TO GROW I 3.6% 3.7% 6.6% 6.1% 6.1% 3.2% Fixed line market (million customers) Source: ANRT Q1 2017 0.5 0.3 0.3 1.8 1.8 1.8 2015 2016 Q1 2017 Restricted mobility (million customers) Penetration rate (%) I 26 I 1,132 1,229 1,268 2015 2016 Q1 2017 ADSL market (000) Penetration rate (%)
CENTRAL AFRICA IVORY COAST NIGER TOGO GABON MOROCCO MAURITANIA BURKINA FASO MALI BENIN SCOPE OF CONSOLIDATION OF THE MAROC TELECOM GROUP Population: 34.2 million GDP: $106 bn Mobile penetration: 123% Mobile market share: 44% Competitive position: 1/3 Population: 3.9 million GDP: $5.1 bn Mobile penetration: 93% Mobile market share: 58% Competitive position: 1/3 Population: 18.9 million GDP: $12.3 bn Mobile penetration: 83% Mobile market share: 43% Competitive position: 1/3 Population: 17.4 million GDP: $14.3 bn Mobile penetration: 95% Mobile market share: 39%* Competitive position: 2/2 Population: 11.4 million GDP: $8.8 bn Mobile penetration: 86% Mobile market share: 40% Competitive position: 2/4 Population: 5.0 million GDP: $2.0 bn Mobile penetration: 22% Mobile market share: 14% Competitive position: 4/4 Population: 25.0 million GDP: $36.9 bn Mobile penetration: 123% Mobile market share: 23% Competitive position: 3/3 Population: 18.8 million GDP: $7.7 bn Mobile penetration: 38% Mobile market share: 20% Competitive position: 3/4 Population: 7.7 million GDP: $4.6 bn Mobile penetration: 73% Mobile market share: 47% Competitive position: 2/2 Population: 1.9 million GDP: $14.2 bn Mobile penetration: 156% Mobile market share: 57% Competitive position: 1/3 Source: Dataxis Q1 2017, IMF April 2017 and ANRT Q1 2017; * Sonatel data Q4 2016 I 27 I
REGULATORY ENVIRONMENT IN MOROCCO Call termination rate MAD/min 0.9232 0.7485 0.6238 0.6601 0.5390 Inwi Orange Maroc Maroc Telecom 0.4679 0.4152 0.3390 0.2943 0.2534 0.2066 0.2289 0.1399 0.1399 0.1169 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 are a linear average of the peak and Off-peak rates. I 28 I
IMPORTANT LEGAL NOTICES FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements and elements of a forward-looking nature concerning the financial position, earnings from operations, and the strategy and outlook of Maroc Telecom, as well as the impact of certain operations. Although Maroc Telecom may base its forward-looking statements on what it considers to be reasonable assumptions, those statements do not guarantee the future performance of the Company. The actual results may materially differ from the forward-looking statements due to a number of risks and uncertainties, both known and unknown. The majority of these risks are beyond our control, in particular the risks described in public documents filed by Maroc Telecom with the Moroccan Capital Markets Authority (www.ammc.ma) and the French Financial Markets Authority (www.amf-france.org), which are also available in French on our website (www.iam.ma). This presentation contains forward-looking information that can only be assessed up to its publication date. Maroc Telecom makes no commitment to complete, update, or modify these forward-looking statements in light of new information, future events, or any other reason, subject to the applicable regulations including Articles III.2.31 et seq. of the circular of the Moroccan Capital Markets Authority and to Articles 223-1 et seq. of the General Regulations of the French Financial Markets Authority. I 29 I