Itissalat Al Maghrib IAM S A : Maroc Telecom - PR FY2021 Results 17/02/2022

PRESS RELEASE

Rabat, 17 February 2022

CONSOLIDATED RESULTS AT 31 DECEMBER 2021

Operating results in line with objectives, driven by the performance of the subsidiaries:

• The Group's customer base grew by 1.8% reaching more than 74 million customers;
• High profitability maintained with the Group's adjusted EBITDA margin at 51.9%;
• Group share of Net Income up 11.1% at constant exchange rates* (and adjusted Group share of Net Income up 0.5% at constant exchange rates*);
• Acceleration of the Group's investments (excluding frequencies and licences) which represent 15.3% of revenues at end-2021;
• Growth in the revenues of the Moov Africa subsidiaries (+1.5% at constant exchange rates*), driven by Mobile Data and Mobile Money services;
• Sustained growth in Fixed Data revenues in Morocco (+7.6%).

Proposed distribution of MAD 4.2 billion, or MAD 4.78 per share, representing a return of 3.5%**.

Maroc Telecom Group's outlook for 2022, at constant scope and exchange rates:

• Decrease in revenues;
• Decrease in EBITDA;
• CAPEX of approximately 20% of revenues, excluding frequencies and licences.

In 2021, the Maroc Telecom Group demonstrated its resilience and adaptability across all its markets in the face of the ongoing health crisis, ending in line with all the operational and financial objectives.

Ongoing efforts to control costs are enabling the Group to maintain its margins, and the digital transformation and innovation projects remain a priority in order to support the expansion of the customer base and the growth of Data, particularly in the subsidiaries.

These achievements confirm the relevance of the Group's investment policy in its networks, both in the domestic and international markets, and reinforce the Group's strategy based on differentiation through performance and quality of service.

*Maintaining a constant exchange rate between the Moroccan dirham (MAD), the Mauritanian ouguiya (MRU) and the CFA franc.

** Based on the share price of February,16th 2022 (MAD 136.75)

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ADJUSTED* CONSOLIDATED RESULTS OF THE GROUP

				Change at
(IFRS in MAD millions)	Q4 2020	Q4 2021	Change	constant
exchange
				rates (1)
Revenues	9,271	9,004	-2.9%	-1.8%

Adjusted EBITDA	4,740	4,760	0.4%	1.3%
Margin (%)	51.1%	52.9%	1.7 pt	1.6 pt
Adjusted EBITA	2,886	3,082	6.8%	7.5%
Margin (%)	31.1%	34.2%	3.1 pt	3.0 pt
Adjusted Group share of	1,475	1,714	16.2%	16.7%
Net Income
Margin (%)	15.9%	19.0%	3.1 pt	3.0 pt
CAPEX(2)	1,417	1,928	36.1%	37.4%
Of which frequencies and	124	1
licences
CAPEX/revenues (excluding	13.9%	21.4%	7.5 pt	7.5 pt
frequencies and licences)
Adjusted CFFO	4,498	3,736	-16.9%	-16.3%
Net debt	17,619	14,397	-18.3%	-17.6%
Net debt/EBITDA(3)	0,9x	0.7x

								Change at
	2020		2021			Change		constant
					exchange
								rates (1)
36,769	35,790	-2.7%	-2.0%
19,100	18,589	-2.7%	-2.2%
51.9%	51.9%		-0.0 pt	-0.1 pt
11,598	11,586	-0.1%	0.4%
31.5%	32.4%		0.8 pt	0.8 pt
6,001	6,014	0.2%	0.5%
16.3%	16.8%		0.5 pt	0.4 pt
3,448	5,615	62.8%	64.0%
135	123
9.0%	15.3%		6.3 pt	6.3 pt
15,719	12,110	-23.0%	-22.5%
17,619	14,397	-18.3%	-17.6%
	0.8x	0.7x

*The adjustments to the financial indicators are detailed in Appendix 1.

• Customer base

The Group's customer base reached more than 74 million customers in 2021 and recorded an increase of 1.8%, driven in particular by the growth of the subsidiaries' customer base.

• Revenues

The Maroc Telecom Group generated revenues(4) of nearly MAD 36 billion in 2021, down 2.7% (-2.0% at constant exchange rates(1)). The good performance of the revenues of the Moov Africa subsidiaries and Fixed Broadband in Morocco partially offset the slowdown in Mobile activities in Morocco, still impacted by the competitive and regulatory environment.

• Earnings from operations before depreciation and amortization

At the end of December 2021, the adjusted earnings from operations before depreciation and amortization (EBITDA) of the Maroc Telecom Group stood at MAD 18,589 million, down 2.7% (-2.2% at constant exchange rates(1)). Adjusted EBITDA margin remains high at 51.9%, stable over the year.

In the fourth quarter, the Group's adjusted EBITDA increased by 1.3% at constant exchange rates(1) to MAD 4,760 million thanks to rigorous cost management.

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• Earnings from operations

At the end of 2021, the adjusted earnings from operations (EBITA)(5) of the Maroc Telecom Group stood at MAD 11, 586 million, up 0.4% at constant exchange rates(1), thanks to lower depreciation. The adjusted EBITA margin rose by 0.8 pt to 32.4%.

• Net Income - Group share

Group share of Net Income sharply rose (+11.1% at constant exchange rates (1)).

Adjusted Group share of Net Income rose by 0.5% at constant exchange rates(1) thanks to the sharp increase in net income from the activities of the Moov Africa subsidiaries.

• Investments

Investments(2) excluding frequencies and licences are sharply increasing to support a desire to strengthen Fixed and Mobile network infrastructures and represent 15.3% of revenues, in line with the objective announced for the year.

• Cash flow

Adjusted cash flows from operations (CFFO)(6) fell by 22.5% at constant exchange rates(1), reaching MAD 12,110 million due in particular to the increase in investments.

At 31 December 2021, the consolidated net debt(7) of the Maroc Telecom Group represented 0.7 times(3) the Group's annual EBITDA.

• Highlights
• • On 16 December 2021, Itissalat Al-Maghrib S.A received a notice from the Rabat Commercial Court regarding a complaint filed by Wana on unbundling and is seeking compensation amounting to MAD 6,845 million. The company will use all legal means to defend its interests.
  • The 2022 Finance Act in Morocco provides for a new social solidarity contribution on profits for companies with a net profit of MAD 1 million or more. The rates of this contribution will increase from 3.5% in 2021 to 5% in 2022 for Maroc Telecom.
  • In Mali, under the REMACOTEM dispute (association of mobile network consumers in Mali), the Civil Court had dismissed the plaintiff in 2013, for the alleged damages suffered. On November 3, 2021, the Bamako Court of Appeal set the total amount of damages claimed by REMACOTEM from 2011 to 2020 at 2,823 million dirhams, including 933 million dirhams for Sotelma. The latter has replied through its lawyers and a hearing has been requested to annul the said judgment as well as its execution.
• Events after the end of the reporting period:
• • On 10 January 2022, Itissalat Al-Maghrib S.A received a report from the ANRT, pointing the partial compliance with certain injunctions in the January 17, 2020 decision. After an in-depth and detailed analysis of the aforementioned report, a response contesting the ANRT's findings was filed within the legal deadline of one month.

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• Dividend

At the General Meeting of Shareholders of 29 April 2022, the Supervisory Board of Maroc Telecom will propose the distribution of a dividend of MAD 4.78 per share, representing a total amount of MAD 4.2 billion.

• Maroc Telecom Group's outlook for 2022

Based on recent market developments and insofar as no new major exceptional event disrupts the Group's activity, Maroc Telecom forecasts for 2022, at constant scope and exchange rates:

• Decrease in revenues;
• Decrease in EBITDA;
• CAPEX of approximately 20% of revenues, excluding frequencies and licences.

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REVIEW OF THE GROUP'S ACTIVITIES

The adjustments to the "Morocco" and "International" financial indicators are detailed in Appendix 1.

• Morocco

(IFRS in MAD millions)	Q4 2020		Q4 2021		Change
Revenues	5,152	5,028	-2.4%
Mobile	3,219	3,072	-4.6%
Services	3,084	2,834	-8.1%
Equipment	135	238	75.9%
Fixed	2,424	2,416	-0.3%
Of which Fixed Data*	903	965	6.9%
Elimination and other income	-491	-460
Adjusted EBITDA	2,979	2,972	-0.3%
Margin (%)	57.8%	59.1%	1.3 pt
Adjusted EBITA	2,024	2,110	4.2%
Margin (%)	39.3%	42.0%	2.7 pt
CAPEX(2)	584	754	29.1%
Of which frequencies and	0		0
licences
CAPEX/revenues (excluding	11.3%	15.0%	3.7 pt
frequencies and licences)
Adjusted CFFO	3,246	2,578	-20.6%
Net debt	11,515	9,350	-18.8%
Net debt/EBITDA(3)	0.9x	0.7x

2020	2021	Change
20,881	19,906	-4.7%
13,351	12,270	-8.1%
13,009	11,684	-10.2%
342	586	71.1%
9,517	9,474	-0.5%
3,490	3,754	7.6%
-1,987	-1,837
11,950	11,234	-6.0%
57.2%	56.4%	-0.8 pt
8,079	7,599	-5.9%
38.7%	38.2%	-0.5 pt
1,466	2,630	79.4%
0	0
7.0%	13.2%	6.2 pt
10,300	7,179	-30.3%
11,515	9,350	-18.8%
0.9x	0.8x

• Fixed Data includes the Internet, TV on ADSL and Data services to companies. A calculation method has been changed for an element of the Fixed Data affecting the background.

Revenues from the Group's activities in Morocco were down 4.7% compared with 2020, mainly affected by the decline in the Mobile business. The momentum in Fixed Data (+7.6%) partially offset the fall in Mobile revenues, which continue to be impacted by competitive and regulatory constraints.

At the end of 2021, adjusted earnings from operations before depreciation and amortization (EBITDA) amounted to MAD 11,234 million, down 6.0% compared with 2020. The adjusted EBITDA margin rate remained high at 56.4%.

Adjusted earnings from operations (EBITA)(5) reached MAD 7,599 million, down 5.9%. It represents an adjusted margin rate of 38.2%.

Adjusted cash flows from operations (CFFO)(6) fell by 30.3% to MAD 7,179 million due to the increase in investments.

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