return to growth of outgoing strong revenue … · h1 2016 h1 2017 3g 2g 86.6% 89.0% 99.5% 99.5% 4g...

SUCCESS OF THE VOLUNTARY

REDUNDANCY PLAN IN MOROCCO

1,026 beneficiaries

ACCELERATED DEPLOYMENT OF 4G+ IN

MOROCCO:

80% POPULATION COVERAGE RATE

INCREASE OF 1.4 PT IN THE GROUP

EBITDA MARGIN TO 50%

RETURN TO GROWTH OF OUTGOING

MOBILE REVENUE IN MOROCCO THANKS

TO SUCCESS WITH DATA

+1.6%

HIGHLIGHTS

I 3 I

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

21.0 21.4

32.0 33.7

H1 2016 H1 2017

OPERATIONAL AND FINANCIAL ACTIVITIES

I GROWTH IN CUSTOMER BASE I (million) I GROWTH OF OUTGOING SERVICES REVENUE I (MAD million)

International

Maroc

I 4 I

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

H1 2016 H1 2017

+2.3%

+1.8%

+2.1%*

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

53.0 55.0 +3.8%

+5.1%

+1.9%

SUCCESS OF INTERNATIONAL DEVELOPMENT STRATEGY

% GROUP CUSTOMER BASE

% GROUP REVENUES

% EBITDA

H1 2016

I 5 I

H2 2016

61%

43%

35%

H1 2017

61%

44%

37%

60%

44%

33%

Morocco

International

REGULATORY HIGHLIGHTS

IN MOROCCO

Reinstatement by the regulator of a 20% asymmetry in Mobile call terminations starting March 1, 2017

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

Inwi Orange Maroc

Maroc Telecom

0.1399 DH/Mn

0.1399 DH/Mn 0.1399 DH/Mn

0.1169 DH/Mn

January 1, 2013 March 1, 2017

RESULTS OF THE FIRST HALF OF 2017

H1 2017 ACHIEVEMENTS

Slight drop in revenues following impact of latest regulatory measures

Stable EBITDA

-2.3%

+0.4%

17.7%

I 7 I

CAPEX of approximately 23% of revenues, excluding frequencies or licenses

UPDATING OF OUTLOOK FOR 2017 At constant scope and exchange rates

MOROCCO – MOBILE / RETURN TO GROWTH IN OUTGOING SERVICE REVENUES

-7.8%

-11.3%

-8.1%

-6.0% -5.2%

-2.0%

-6.3%

+2.9% +1.6%

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

H2 16/15 H1 17/16

4,986 5,064

1,749 1,371

199 117

H1 2016 H1 2017

MOROCCO– MOBILE

16,466 16,635

1,713 1,776

S1 2016 S1 2017

+3.7%

+1.0%

18,411 18,179

Prepaid Postpaid

H1 2016 H1 2017

+1.3% 6,552

6,934 -5.5%

60.1 56.9

S1 2016 S1 2017H1 2016 H1 2017

I MOBILE CUSTOMER BASE I (000)

-5.2%

I ARPU I (MAD/month)

I MOBILE REVENUE I (MMAD)

I 10 I

Outgoing revenue Equipment Incoming revenue

-21.6%

+1.6%

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

H1 2016 H1 2017

MOROCCO – DATA MOBILE CONTINUED SURGE IN MOBILE DATA

5,518 6,897

1,426

1,475

S1 2016 S1 2017

+3.4%

+25.0%

8,372

6,944

H1 2016 H1 2017

16,6%

+20.6%

H1 2016 H1 2017

I MOBILE INTERNET CUSTOMER BASE I (000) I DATA TRAFFIC I (GB)

I 11 I

+82%

38% 45% Penetration rate*

* Calculated on the Maroc Telecom overall base

I REVENUE DATA I (000)

+57%

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

MAROC TELECOM IS THE CLEAR LEADER IN MOBILE INTERNET WITH A

47.5% MARKET SHARE AT THE END OF MARCH 2017

Prepaid

Postpaid

MOROCCO – FIXED AND INTERNET

1,617 1,678 1,197 1,306

H1 2016 H1 2017

+3.8%

+9.1%

Data* Voice (including transit) LL intra Maroc Telecom

+0.3%

-6.9%

+10.4%

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

4,451 4,471 -0.5%

ADSL Fixed-line

I 12 I

I FIXED-LINE & INTERNET REVENUE I (MAD million) I FIXED-LINE & ADSL CUSTOMER BASE ** I (000)

*Fixed Data combines Internet, TV over ADSL and business Data services;

** Including low speed and leased connections.

2,150 2,001

1,197 1,322

1,124 1,127

H1 2016 H1 2017

12,684 15,532

18,963 17,722

H1 2016* H1 2017

INTERNATIONAL I MOBILE CUSTOMER BASE I (000) I CHANGE IN REVENUES I

I 13 I

Q1 2016 Q1 2017

New subsidiaries

Historical subsidiaries

26% 28%

44% 43%

Global 35% 35%

I MARKET SHARES I (%)

H1 2016 H1 2017

7,678 7,582 +0.0%**

-4.3%

+8.0%

Source: Dataxis Q1 2017


New subsidiaries

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

31,647 33,254

+5.1%

-6.5%

+22.5%

**At constant exchange rates

*The merger between Gabon Telecom and Moov Gabon in 2016 led to the consolidation of their historical data.

MOROCCO - NETWORK MODERNIZATION

I CAPEX I (MAD million) I COVERAGE I (as % of population)

H1 2016 H1 2017

3G

2G

86.6% 89.0%

99.5% 99.5%

4G 70.0% 80.0%

349 346

834 1,128

369 319

H1 2016 H1 2017

1,552 1,793 +15,5%

14.6% 17.8%

I 14 I

CAPEX/ REVENUES

Other Very-High-Speed Fixed-Line Very-High-Speed Mobile

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

INTERNATIONAL - NETWORK MODERNIZATION

I CAPEX (excl. licenses) I (MAD million) I CHANGE IN RADIO SITES I

17.4% 16.2%

2,829 3,177

2,398 2,564

H1 2016 H1 2017

+12%

+7%

696 683

639 545

H1 2016 H1 2017

I 15 I


New subsidiaries

CAPEX/ REVENUES

-8.0% 1,335

1,228

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

5,227 5,741

+10%

3,408 3,092

H1 2016 H1 2017

60% 58%

MOROCCO – MAINTAINING HIGH MARGINS

MAD million H1 2016 H1 2017 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%

O/w licenses and

frequencies 0 0

CAPEX /Revenues

(excl. licenses and

frequencies)

14.6% 17.8% +3.2 pt

Adjusted CFFO * 3,408 3,092 -9.3%

% EBITDA 60.1% 57.7% -2.4 pt

NET DEBT 13,955 14,493 +3.9%

Net debt/EBITDA 1.2x 1.4x

Adjusted CFFO /

EBITDA (%)

I MAINTAINING GOOD CASH GENERATION I (MMAD)

despite the increase in CAPEX

-9.3% Ajusted

CFFO

EBITDA

I 17 I

I EBITDA MARGIN I (%)

* Please see Appendix 1

EBITDA Margin

Almost stable

at 53.1%

Cost of sales -7.4% OPEX -2.3%

1,832 1,435

H1 2016 H1 2017

INTERNATIONAL


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

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 888 -

CAPEX /Revenues

(excl. licenses and

frequencies)

17.4% 16.0% -1.4 pt

Adjusted CFFO* 1,832 1,435 -21.7%

% EBITDA 64.2% 45.3% -18.9 pt

NET DEBT 5,609 6,164 +9.9%


I EBITDA MARGIN I (%)

37,2%

H1 2016 H1 2017

+0.9 pt

41,8%

+1.4 pt

+2.3 pt

Adjusted CFFO /

EBITDA (%)

64% 45%

Adjusted

CFFO

EBITDA

-22%

I 18 I


+1.1 %

Revenue growth at constant

exchange rates and excluding the

decrease in mobile termination rates

I REVENUES I

Gross margin OPEX

2016 non-recurring

items

I LOW CASH GENERATION I (MAD million)

Due to seasonality of the WCR

+41 +185

H1 2016 Group share of

adjusted net income

Change

Financial

Result

H1 2017 Group share of

adjusted net income

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

I ADJUSTED GROUP SHARE OF NET INCOME I (MAD million)

I 19 I

Change

Income

Tax

-51

Change

Minorities


Change

Adjusted

EBITA

-19

2,766 2,923 +5.9%**

** At constant exchange rates

MAROC TELECOM GROUP CONSOLIDATED CASH FLOW


EBITDA 8,525 8,521 +0.0%

CAPEX 3,775 3,021 -20,0%

O/w licenses and

frequencies 888 -

CAPEX / Revenues

(excluding licenses and

frequencies)

16.4% 17.7% +1.3 pt

Adjusted CFFO* 5,240 4,526 -13.6%

% EBITDA 61.5% 53.1%

Financial expenses -70 -190

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%


I 20 I


0.7x

ND/EBITDA

1.0x

ND/EBITDA

Financial

expenses Income tax

paid Dividends to

minority

shareholders Dividends to

shareholders

Other

Dec. 2016 H1 2017

-5,588

-442 -1,651

-1,018

-307

Adjusted CFFO**

+7.5% Exceptional

Elements* + 4,526

-190

-12,289

-16,959

I NET DEBT I (MAD million)

INTERNATIONAL

• 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

2017 OUTLOOK

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

2017 HIGHLIGHTS

IN MOROCCO

• 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

APPENDIX 1: CHANGE FROM ADJUSTED FINANCIAL INDICATORS TO PUBLISHED FINANCIAL INDICATORS

I 24 I

( H1 2016 H1 2017

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

MACROECONOMIC ENVIRONMENT

I 25 I

4.5%

1.2%

4.5%

Sources: Ministry of Economy and Finance

PIB Actual GDP growth

2015 2016 2017e

5.3% 5.2%

0,0%

5,0%

PIB Actual GDP growth

2015 2016 2017e

MOROCCO INTERNATIONAL

Sources: IMF Data - April 2017

5.6%

Recovery of economic growth as a result of a good agricultural year ahead

Inflation remains under control

Sustained economic growth

Inflation under control overall

MOROCCO - GLOBAL TELECOM MARKET

Source: ANRT Q1 2017

I MOBILE: A MARKET IN DECLINE I

I FIXED LINE: EXCLUDING MOBILE,

THE MARKET CONTINUES TO GROW I I ADSL: EXCLUDING MOBILE, THE MARKET CONTINUES TO GROW I

I MOBILE: FLEXIBILITY IS INSUFFICIENT AGAINST

THE SHARP DECLINE IN PRICES I

Mobile market (million

customers)

Penetration rate (%)

43.0

41.5 41.8

127% 123% 123%

2015 2016 Q1 2017

101 113 110

0.27

0.23 0.22

Outgoing usage

(minute/customer/month)

Price per outgoing mobile minute (MAD/min)

2015 2016 Q1 2017

1,132 1,229 1,268

3.2%

3.6% 3.7%

2015 2016 Q1 2017

ADSL market (000) Penetration rate (%)

1.8 1.8 1.8

0.5 0.3 0.3

6.6% 6.1% 6.1%

2015 2016 Q1 2017

Restricted mobility (million

customers)

Penetration rate (%) Fixed line market (million

customers)

I 26 I

I 27 I

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 market share:

58%


Population:

18.9 million

GDP: $12.3 bn



43%


Population:

17.4 million

GDP: $14.3 bn



39%*


Population:

11.4 million

GDP: $8.8 bn



40%


MO

RO

CC

O

MA

UR

ITA

NIA

BU

RK

INA

FA

SO

MA

LI

BE

NIN

Population:

5.0 million

GDP: $2.0 bn



14%


Population:

25.0 million

GDP: $36.9 bn

Mobile penetration:

123%


23%


Population:

18.8 million

GDP: $7.7 bn



20%


Population:

7.7 million

GDP: $4.6 bn



47%


Population:

1.9 million

GDP: $14.2 bn

Mobile penetration:

156%


57%


CE

NT

RA

L A

FR

ICA

IVO

RY

CO

AS

T

NIG

ER

TO

GO

GA

BO

N

Source: Dataxis – Q1 2017, IMF – April 2017 and ANRT – Q1 2017;

* Sonatel data – Q4 2016

I 28 I

REGULATORY ENVIRONMENT IN MOROCCO

January 1, 2011 July 1, 2011 January 1, 2012 July 1, 2012 January 1, 2013

0.9232

0.6601

0.4152

0.2534

0.7485

0.5390

0.3390

0.2289

0.6238

0.4679

0.2943

0.2066 0.1399

Maroc Telecom Orange Maroc

Inwi

Call termination rate

MAD/min

March 1, 2017

0.1399

0.1169

Between 2011 and 2013, Mobile call termination rates are a linear average of the peak and Off-peak rates.

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

http://www.cdvm.gov.ma/





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http://www.iam.ma/

http://www.iam.ma/

http://www.iam.ma/

http://www.iam.ma/

http://www.iam.ma/

return to growth of outgoing strong revenue … · h1 2016 h1 2017 3g 2g 86.6% 89.0% 99.5% 99.5% 4g...

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