Maroc Telecom : Press Release-Results H1 2017_EN 24/07/2017

PRESS RELEASE

Rabat, July 24, 2017

Highlights:

» 3.8% increase in the Group's customer base with over 55 million customers;

» 2.1% increase in consolidated outbound service revenues;

» The EBITDA margin rate improved by 1.4 pt to 50%, thanks to ongoing cost optimization measures;

» 5.9% increase in Group share of adjusted* net income at constant exchange rates;

» Return to growth of mobile outbound revenues thanks to the good momentum of Mobile internet;

» Acceleration of the roll-out of 4G+ in Morocco, which covered 80% of the population at the end of June 2017;

» Continued development of Fixed Data, where revenues increased by 10% thanks to the success of ADSL and fiber-optic high speed offers;

» Continuation of the recovery plan for Moov subsidiaries which generated positive net income on an overall basis.

Updating of 2017 outlook at constant scope and exchange rates

► Slight decrease in revenues due to the new regulatory measures;

► Stable EBITDA;

► CAPEX of approximately 23% 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:

"The financial results of this first half reflect the dynamism of the Maroc Telecom Group across all of its markets. In Morocco, the success of very high-speed mobile and fixed line, confirms the relevance of its strategy, based on the deployment of its infrastructures as well as their reinforcement in order to support the

acceleration of the usage growth. African subsidiaries continue to gain market share and support the Group's earnings growth. Cost- optimization efforts are ongoing and are helping to improve the Group's high level of profitability, which is one of the highest in the sector".

*adjusted from the impact of restructuring charges in 2017 and disposal of real estate asset in 2016 (cf: appendix 1)

GROUP ADJUSTED* CONSOLIDATED RESULTS

*Adjustments to the financial indicators are detailed in Appendix 1.

► Customer base

The Group's customer base amounted to over 55 million customers on June 30, 2017, an increase of 3.8% in one year, driven by an expansion in the Mobile customer bases in Niger, the Ivory Coast, and Togo, as well as by the sustained growth of the Fixed-Line and high speed customer numbers in Morocco.

► Revenues

The Maroc Telecom Group generated consolidated revenues(3) of MAD 17,091 million on June 30, 2017, a decrease of 2.8% (-2.3% at constant exchange rates) compared with the first half of 2016, primarily due to the deregulation of IP telephony in Morocco as from November 2016 and the decrease in call termination rates in Morocco and in the African subsidiaries' activities. The Group's outbound services revenues increased by 2.1%, thanks to the growth of customer and usage increase in particular data.

► Operating income before depreciation and amortization

The Maroc Telecom Group's operating income before depreciation and amortization (EBITDA) increased by 0.4% to MAD 8,521 million at constant exchange rates (operating income was stable at current exchange rates). The EBITDA margin rate was up 1.4 pts in one year, and reached a high level of 49.9% thanks to significant efforts to control and optimize costs, and to the favorable impact of decreases in Mobile call termination rates at the African subsidiaries.

► Operating income

The Maroc Telecom group's consolidated adjusted operating income (EBITA)(4) in the first half of 2017 amounted to MAD 5,287 million, 0.1% up at constant exchange rates due to 0.4% increase in EBITDA and despite a decrease of 1.9% in depreciation charge resulting from the major investment effort made in Morocco and in the African subsidiaries. The operating margin increased by 0.7 pt (at constant exchange rate) to reach 30.9%.

► Group share of net income

The group share of adjusted net income raised by 5.7% (+5.9% at constant exchange rates) compared to the same period of the previous year, thanks to the sharp increase in the net income of the African subsidiaries' activities in particular the success of the restructuring of the new Moov subsidiaries, which are now showing a positive result.

► Cash flow

The adjusted cash flow from operations (CFFO)(5) amounted to MAD 4,526 million, 13.6% down from the same period of the previous year, due to the large ongoing investment programs.

The Maroc Telecom group's consolidated net debt(6) amounted to MAD 17 billion at the end of June 2017, an increase of 7.5% over one year, primarily as the result of exceptional outflows (restructuring charges and licenses) and of the payment of MAD 6 billion dividends to all shareholders of Maroc Telecom group.

► Exceptional highlights

The first half of the year was marked by the finalization of the voluntary redundancy plan in Morocco and African subsidiaries employees' reductions to 1,068 employees to date, for a total cost of MAD 620 million, of which MAD 235 million in 2017. Total disbursements related to these initial plans amounted to MAD 580 million in the first half of 2017; the remaining amount will be disbursed in the third quarter of 2017.

The first six months of 2017 were marked by the payment of MAD 410 million corresponding to the second part of the global license obtained in Ivory Cost in March 2016 for an amount of MAD1.6 billion, and the disbursement of MAD 28 million for the second and final part of the 3G license in Togo.

The accounts for the first half of 2016 included the disposal of real estate asset with a capital gain of MAD 297 million (cash impact of MAD 317 million) and the payment of the first tranche of the 3G license in Togo for an amount of 33 million dirhams.

► Appointments to the Supervisory Board, Audit Committee and Management Board

The Supervisory Board of Maroc Telecom co-opted M. Abdelouafi Laftit to replace

M. Mohamed Hassad as a member of the Supervisory Board.

The Supervisory Board has also nominated M. Mohammed Samir Tazi as a member of the Audit Committee to replace M. Abdelhak Harrak.

The Supervisory Board also appointed François Vitte as a member of the Management Board of Maroc Telecom to replace Oussama El Rifai with an effective date of October 2, 2017.

► Updating of the 2017 outlook for 2017 at constant scope and exchange rates

Maroc Telecom has updated its forecasts for 2017 at constant scope and exchange rates, based on the recent changes in the market, and to the extent that no further major exceptional event disrupts the Group's activities.

• Slight decrease in revenues due the new regulatory measures;

• Stable EBITDA;

• CAPEX of approximately 23% of revenues, excluding frequencies and licenses.