Maroc Telecom : PR-Q3 2019 Results_EN 21/10/2019

PRESS RELEASE

Rabat, October 21, 2019

CONSOLIDATED RESULTS AT SEPTEMBER 30, 2019

Improvements all round:

• Group customer bases up to nearly 68 million customers;
• Increase in Group revenues (up 0.9% on a like-for-like basis*) thanks to Mobile Data;
• Steady increase in Consolidated EBITDA (up 4.9% on a like-for-like basis*) thanks to continued cost-optimization efforts;
• Group share of adjusted Net Income up 1.3% on a like-for-likebasis*;
• Adjusted Consolidated Cash Flow From Operations up 18.0% (like-for-like basis*) with capital expenditure at 12.0% of consolidated revenues.

Outlook for 2019 maintained, at constant scope and exchange rates and excluding IFRS16:

• Stable revenues;
• Stable EBITDA;
• CAPEX approximately 15% of revenues, excluding frequencies and licenses.

To mark the publication of this press release, Abdeslam Ahizoune, Chairman of the Management Board, made the following comments:

"Maroc Telecom group maintains its growth trend with increased revenues, from Data in particular, and its margin improvement thanks to cost optimization. These results strengthen the Group in achieving its annual objectives and confirm the profitability and the relevancy of its business model.

Reference player in all its markets, Maroc Telecom continues to support the changes brought by the digital transformation through infrastructures deployment and enhanced offers to make technological innovation accessible to the largest number of users."

*Like-for-like basis refers to the consolidation of Tigo Chad, unchanged MAD/Ouguiya/ CFA Franc exchange rates and the impact of the neutralization of the application of IFRS 16

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GROUP ADJUSTED* CONSOLIDATED RESULTS

Q3-2018

Q3-2019

Change

Like-for-

9M-2018

9M-2019

Change

Like-for-like

(IFRS in MAD million)

like change

change

(1)

(1)

Revenues

9,198

9,465

+2.9%

+1.0%

27,137

27,308

+0.6%

+0.9%

EBITDA

4,615

4,989

+8.1%

+4.4%

13,474

14,398

+6.9%

+4.9%

Margin (%)

50.2%

52.7%

+2.5 pt

+1.7 pt

49.7%

52.7%

+3.1 pt

+1.9 pt

Adjusted EBITA

2,923

3,126

+7.0%

+6.1%

8,462

8,989

+6.2%

+6.3%

Margin (%)

31.8%

33.0%

+1.3 pt

+1.6 pt

31.2%

32.9%

+1.7 pt

+1.7 pt

Group Share of

1,620

1,625

+0.3%

+0.4%

4,611

4,647

+0.8%

+1.3%

adjusted Net Income

Margin (%)

17.6%

17.2%

-0.4 pt

-0.1 pt

17.0%

17.0%

0.0 pt

+0.1 pt

CAPEX(2)

1,053

1,377

+30.8%

+30.3%

4,652

4,605

-1.0%

+0.6%

Of which frequencies

477

1,321

and licenses

CAPEX/CA (excluding

11.5%

14.6%

+3.1 pt

+3.0 pt

15.4%

12.0%

-3.4 pt

-3.4 pt

frequencies and

licenses)

Adjusted CFFO

3,197

3,438

+7.5%

+0.1%

7,427

9,166

+23.4%

+18.0%

Net Debt

15,560

20,188

+29.7%

+18.5%

15,560

20,188

+29.7%

+18.5%

Net Debt/EBITDA(3)

0.8x

1.0x

0.9x

1.1x

* Financial indicator adjustments are set out in Appendix 1.

• Customer base

The Group customer base reached 67.6 million at September 30, 2019, up 10.6% year-on-year on a like-for-like basis, driven mainly by a 15.0% growth in the international mobile customer base, the scope of which has been expanded compared with the same period in 2018 with the integration of Tigo Tchad on July 1, 2019.

• Revenues

At end September 2019, Maroc Telecom Group's revenues(4) stood at MAD 27,308 million, up 0.6% (+0.9% on a like-for-like basis(1)), thanks to increased revenues from activities in Morocco (up 1.3%).

• Earnings from operations before depreciation and amortization

Thanks to a decrease in OPEX on a like-for-like(1) basis, and to a gross margin increase, Maroc Telecom Group's EBITDA reached MAD 14,398 million at end September 2019, up 6.9% (+4.9% on a like-for-like basis(1)). The EBITDA margin reached the high level of 52.7% (+1.9 pt on a like- for-like basis(1)).

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• Earnings from operations

Maroc Telecom Group's adjusted EBITA(5) was up 6.2% compared with the same period in 2018 (+6.3% on a like-for-like basis(1)) to MAD 8,989 million. This increase is mainly a result of an increase in EBITDA. The adjusted operating margin is up by 1.7 pt (on a like-for-like basis(1)) to 32.9%.

• Net Income - Group Share

For the first nine months of 2019, the Group share of adjusted Net Income is up 1.3% on a like- for-like(1) basis mainly thanks to improved activities in Morocco.

• Capital expenditures

Capital expenditure(2) excluding frequencies and licenses were down 21.4% (-20.5% on a like- for-like basis(1)) and accounted for 12.0% of revenues.

• Cash Flow

Adjusted Cash Flows From Operations (CFFO)(6) stood at MAD 9,166 million, up 23.4% (+18.0% on a like-for-like basis(1)) thanks to the increase in EBITDA combined with the streamlining of capital expenditure.

• Highlights

Sixth agreement signed by the Government and Maroc Telecom, under which terms Maroc Telecom commits to implementing a program of capital expenditure worth MAD 10 billion over the next three years (2019-2021).

Tigo Chad integration into the consolidation scope of the group's accounts from July 1, 2019.

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REVIEW OF GROUP OPERATIONS

Adjustments to "Morocco" and "International" financial indicators are set out in Appendix 1.

• Morocco

	Q3-2018	Q3-2019	Change		Like-for-like		9M-2018	9M-2019		Change		Like-for-like
(IFRS in MAD million)						change							change
					(1)							(1)
Revenues
5,533	5,599	+1.2%				16,095	16,312	+1.3%
Mobile	3,717	3,760	+1.1%				10,501	10,719	+2,1%
Services	3,685	3,729	+1.2%				10,330	10,523		+1.9%
Equipment	33	31	-6.0%				171	195		+14.2%
Fixed lines	2,273	2,298	+1.1%				6,939	6,955	+0.2%
Of Which Data Fixed*
708	762	+7.6%				2,180	2,300		+5.5%
Eliminations and other	-457	-458						-1,345	- 1,361
revenues
EBITDA	3,018	3,209	+6.4%	+4.2%		8,558	9,345	+9.2%	+7.3%
Margin	54.5%	57.3%		+2.8 pt		+1.6 pt		53.2%	57.3%		+4.1 pt		+3.1 pt
Adjusted EBITA	2,065	2,207	+6.9%	+6.0%		5,743	6,377	+11.0%	+10.6%
Margin (%)
37.3%	39.4%		+2.1 pt		+1.8 pt		35.7%	39.1%		+3.4 pt		+3.3 pt
CAPEX(2)	414	856		n/a				1,790	1,733	-3.2%
Of which frequencies
and licenses
CAPEX/CA (excluding	7.5%	15.3%		+7.8 pt				11.1%	10.6%		-0.5 pt
frequencies and
licenses)
Adjusted CFFO	2,302	2,606	+13.2%	+10.3%		5,489	6,424	+17.1%	+14.1%
Net Debt	12,136	13,739	+13.2%	+6.2%		12,136	13,739	+13.2%	+6.2%
Net Debt/EBITDA(3)
1.0x	1.1x						1.1x	1.1x

*Fixed Data includes the internet, broadband TV and data services to businesses

At end September 2019, Morocco's operations generated MAD 16,312 million in revenues, up 1.3%, thanks to steady growth in Mobile Data.

EBITDA for the first nine months of 2019 reached MAD 9,345 million, up 9.2% (+7.3% on a like- for-like basis(1)). This increase is mainly a result of the reduction in operating costs and thus further improving the EBITDA margin to reach the high level of 57.3% (+3.1 pt compared with the same period of the previous year on a like-for-like basis(1)).

As a result of the increase in EBITDA, adjusted EBITA reached MAD 6,377 million, an 11.0% increase, (+10.6% on a like-for-like basis(1)), leading to an adjusted EBITA margin of 39.1% (+3.3 pt on a like-for-like basis(1)).

Adjusted Cash Flows From Operations in Morocco were up 14.1% (on a like-for-like basis(1)) to MAD 6,424 million.

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Mobile

	Unit	9M-2018		9M-2019	Change
Mobile
Customers(7)	(000)	19,670		20,281	+3.1%
Prepaid	(000)	17,783		18,031	+1.4%
postpaid	(000)	1,887		2,250	+19.2%
Of which 3G/4G+ internet(8)	(000)	11,408		12,328	+8.1%
ARPU(9)	(MAD/month)	59.1		58.7	-0.7%

At September 30, 2019, the Mobile customer(7) base included 20.3 million customers, up 3.1% year-on-year, driven by the combined growth of postpaid and prepaid bases of +19.2% and +1.4% respectively.

Mobile revenues were up 2.1% to MAD 10,719 million. The surge in Mobile Data more than offset the decrease in international incoming revenues.

Blended ARPU(9) for the first nine months of 2019, was MAD 58.7, a slight drop of 0.7% year-on- year.

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