Itissalat Al Maghrib IAM S A : Maroc Telecom PR-Results Q3 2020 19/10/2020

PRESS RELEASE

Rabat, October 19, 2020

CONSOLIDATED RESULTS AS AT SEPTEMBER 30, 2020

Resilient results despite a difficult context:

• 4.3% increase in the Group's total customer base at 70.5 million subscribers;
• Adjusted Group EBITDA margin improved by 0.2 pt (on a like-for-like basis) reaching 52.2% thanks to good cost control;
• International activities showing good resilience thanks to Mobile Data;
• Continued growth in Fixed-Line activities in Morocco driven by growth in Data.

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

"Amid the global health crisis and a tougher competition, the international diversification strategy initiated by Maroc Telecom several years ago is once again proving its success. The international assets enable the Group to improve its resilience in this difficult economic environment.

Maroc Telecom has also shown a strong adaptability in handling the effects of the crisis through the adoption of cost optimization plans and

optimized investment management since the beginning of the pandemic.

The Group is also pursuing its modernization of infrastructure and services to offer to its customers the best quality and the broadest coverage in all countries in which it operates. As a committed operator, Maroc Telecom is positioned to be a catalyst for digitalization and closing the digital divide."

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	GROUP CONSOLIDATED ADJUSTED RESULTS*
		Q3-2019	Q3-2020	Change		Change on a		9M-2019	9M-2020	Change		Change on a
(IFRS in MAD million)						like-for-like						like-for-like
					basis						basis
							(1)						(1)
Revenues	9,465	9,174	-3.1%	-3.5%		27,308	27,498	+0.7%	-1.2%
Adjusted EBITA	4,989	4,758	-4.6%	-5.0%		14,398	14,361	-0.3%	-0.8%
Margin (%)	52.7%	51.9%	-0.8 pt		-0.8 pt		52.7%	52.2%	-0.5 pt		+0.2 pt
Adjusted EBITA	3,126	2,879	-7.9%	-8.1%		8,989	8,714	-3.1%	-2.6%
Margin (%)	33.0%	31.4%	-1.7 pt		-1.6 pt		32.9%	31.7%	-1.2 pt		-0.5 pt
Group share of	1,625	1,520	-6.5%	-6.3%		4,647	4,526	-2.6%	-1.4%
adjusted Net
Income
Margin (%)	17.2%	16.6%	-0.6 pt		-0.5 pt		17.0%	16.5%	-0.6 pt		-0.0 pt
CAPEX(2)	1,377	846	-38.6%	-38.8%		4,605	2,032	-55.9%	-57.8%
Of which frequencies		11						1 321	11
& licenses
CAPEX/revenues	14.6%	9.1%	-5.5 pt		-5.5 pt	12.0%	7.3%	-4.7 pt		-4.7 pt
(excluding
frequencies &
licenses)
Adjusted CFFO	3,438	4,121	+19.9%	+19.5%		9,166	11,221	+22.4%	+21.2%
Net Debt	20,188	20,809	+3.1%	+2.8%		20,188	20,809	+3.1%	+2.8%
Net Debt/EBITDA(3)	1.0x	1.0x						1.1x	1.0x

*The adjustments to financial indicators are presented in Note 1

• Customer base

The Group's customer base continued to grow (+4.3% year-on-year) reaching 70.5 million at the end of September 2020, driven by the increase in the customer bases of subsidiaries (+7.3%), Fixed Lines (+6.7%) and Fixed-Line Broadband (+10.4%) customer bases in Morocco.

• Revenues

During the first nine months of the year 2020, Maroc Telecom Group generated total revenues(4) of MAD 27,498 million, up 0.7% (-1.2% on a like-for-like basis(1)). The good resilience of the International activities partially offset the decline in revenues in Morocco which was penalized by the effects of the COVID-19 health crisis.

• Earnings from operations before depreciation and amortization

Maroc Telecom Group's adjusted earnings from operations before depreciation and amortization (EBITDA) reached MAD 14,361 million at the end of September 2020, down slightly by 0.3% (- 0.8% on a like-for-like basis(1)) thanks to a 6.7% increase (+5.0% on a like-for-like basis(1)) in adjusted EBITDA from International activities which partially offset the decrease in adjusted

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EBITDA in Morocco. The adjusted EBITDA margin increased by 0.2 pt on a like-for-like basis(1) to 52.2%.

• Earnings from operations

At the end of the first nine months of 2020, Maroc Telecom Group's adjusted earnings from operations (EBITA)(5) amounted to MAD 8,714 million, down 3.1% (-2.6% on a like-for-like basis(1)) due to an increase in amortization.

• Group share of Net Income

The adjusted Group share of Net Income was MAD 4,526 million, down 2.6% (-1.4% on a like- for-like basis(1)).

• Investments

As a result of effective management of investments(2) adapted to the current crisis, Capex (excluding frequencies and licenses) was down 38.5% at the end of September 2020.

• Cash Flow

Adjusted cash flow from operations (CFFO)(6) amounted to MAD 11,221 million, up 22.4% (+21.2% on a like-for-like basis(1)) due to the decline in Capex.

At the end of September 2020, the Group's consolidated net debt(7) represents 1.0x its annualized EBITDA(3).

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OVERVIEW OF THE GROUP'S ACTIVITIES

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

• Morocco

	(IFRS in MAD million)	Q3-2019	Q3-2020	Change	9M-2019	9M-2020	Change
	Revenues	5,599	5,205	-7.0%	16,312	15,729	-3.6%
	Mobile	3,760	3,354	-10.8%	10,719	10,132	-5.5%
	Services	3,729	3,288	-11.8%	10,523	9,925	-5.7%
	Equipment	31	65	ns	195	207	+6.2%
	Fixed-line	2,298	2,367	+3.0%	6,955	7,093	+2.0%
	Of which Fixed-line Data*	762	901	+18.2%	2,300	2,641	+14.8%
	Eliminations and other income	-458	-515		-1,361	-1,496
	Adjusted EBITDA	3,209	2,991	-6.8%	9,345	8,971	-4.0%
	Margin (%)	57.3%	57.5%	+0.2 pt	57.3%	57.0%	-0.3 pt
	Adjusted EBITA	2,207	2,019	-8.5%	6,377	6,056	-5.0%
	Margin (%)	39.4%	38.8%	-0.6 pt	39.1%	38.5%	-0.6 pt
	CAPEX(2)	856	318	-62.9%	1,733	882	-49.1%
	Of which frequencies & licenses
	CAPEX/revenues (excluding	15.3%	6.1%	-9.2 pt	10.6%	5.6%	-5.0 pt
	frequencies & licenses)
	Adjusted CFFO	2,606	2,797	+7.3%	6,424	7,054	+9.8%
	Net Debt	13,739	14,314	+4.2%	13,739	14,314	+4.2%
	Net Debt/EBITDA(3)	1.1x	1.0x		1.1x	1.1x

*Fixed-line Data includes Internet, TV over ADSL and Corporate Data services

Revenues from activities in Morocco reached MAD 15,729 million for the first nine months of 2020, down 3.6% due to the decline in Mobile revenues. Deprived of significant income from tourism and Moroccans living abroad, the Mobile segment continued to suffer from the effects of the COVID-19 crisis, especially regarding incoming international traffic and roaming. This decline was mitigated by the increase in Fixed-Line revenues which rose by 2.0% over the 9-month period (+3.0% in the third quarter of 2020 alone).

Over the same period, the adjusted earnings from operations before depreciation and amortization (EBITDA) contracted by 4.0% year-on-year to MAD 8,971 million. The adjusted EBITDA margin was 57.0%, a slight decrease of 0.3 pt.

Adjusted earnings from operations (EBITA)(5) reached MAD 6,056 million, down 5.0% year-on- year due to the decline in adjusted EBITDA. The adjusted EBITA margin was 38.5%, down 0.6 pt.

Adjusted cash flow from operations (CFFO)(6) in Morocco was up 9.8%.

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