PRESS RELEASE

Rabat, October 23, 2017

CONSOLIDATED RESULTS FOR THE FIRST NINE MONTHS OF 2017

Highlights:

» 8% increase in the Group's customer base which exceeds 56 million customers;

» 2.3% increase in consolidated Outgoing Services revenues;

» EBITDA margin up 1.3 points, to reach 50% at constant exchange rates;

» Group share of adjusted* net income up 4.2% at constant exchange rates;

» Confirmation of return to growth of Outgoing Mobile revenues in Morocco, thanks to the strong enthusiasm for Mobile Internet;

» Acceleration of the roll-out of Very High Speed networks in Morocco to meet strong demand;

» Sustained growth of new subsidiaries: 11% revenue growth and 42% EBITDA growth at constant exchange rates, for the first nine months of 2017.

2017 outlook maintained, at constant scope and exchange rates:

Slight decrease in revenues due to 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 results of the third quarter confirm the improvement in trends observed in the first half of the year and validate the Group's strategic choices that are the International development and the accelerated rollout of Very High Speed Fixed-Line and Mobile networks to support the

growing use of Data. The implementation of the massive investment and modernization plans of the new African subsidiaries is ongoing, and is beginning to bear fruit in terms of growth and contribution to the Group's performance."

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

1

GROUP ADJUSTED* CONSOLIDATED RESULTS

IFRS in MAD million

9M-2016

9M-2017

Change

Change at constant

exchange rates(1)

Revenues

26,674

26,020

-2.5%

-2.3%

EBITDA

12,934

12,960

+0.2%

+0.4%

Margin (%)

48.5%

49.8%

+1.3 pts

+1.3 pts

Adjusted EBITA

8,064

8,088

0.3%

+0.5%

Margin (%)

30.2%

31.1%

+0.9 pts

+0.9 pts

Group share of adjusted net income -

4,302

4,482

+4.2%

+4.2%

Margin (%)

16.1%

17.2%

+1.1 pts

+1.1 pts

CAPEX(2)

5,170

5,430

+5.0%

Of which frequencies & licenses

888

149

CAPEX/revenues (excluding frequencies & licenses)

16.0%

20.3%

+4.3 pts

Adjusted CFFO

7,767

7,870

+1.3%

  • Details of the financial indicator adjustments are provided in Appendix 1.

    Customer base

    The Group's customer base amounted to over 56 million customers at September 30, 2017, an increase of 7.7% year-on-year, driven by an expansion in the Mobile customer bases in Niger, Togo and Ivory Coast, as well as by the sustained growth of the Mobile and Fixed-Line broadband customer bases in Morocco.

    Revenues

    Maroc Telecom Group's revenues for the first nine months of 2017 amounted to MAD 26,020 million, down slightly by 2.5% (-2.3% at constant exchange rates). This change was due to a decline in incoming revenues following the liberalization of IP telephony in November 2016 in Morocco and the decrease in mobile termination rates in Morocco and in the African subsidiaries. Revenues from Outgoing Services were up 2.3% thanks to the growth in the customer base and increased Data usage.

    Earnings from operations before depreciation and amortization

    At end-September 2017, Maroc Telecom Group's earnings from operations before depreciation and amortization (EBITDA) amounted to MAD 12,960 million, up 0.2% (+0.4% at constant exchange rates). The 12.2% growth in EBITDA (+12.8% at constant exchange rates) from International operations more than offset the 5.8% decline in EBITDA in Morocco.

    The EBITDA margin was up 1.3 pts year-on-year, and reached a high level of 49.8% thanks to significant efforts to optimize costs, and to the favorable impact of decreases in Mobile termination rates at the Sub-Saharan subsidiaries.

    Earnings from operations

    At end-September 2017, Maroc Telecom Group's consolidated adjusted earnings from operations (EBITA)(4) amounted to MAD 8,088 million, up 0.3% from the same period in 2016 (+0.5% at constant exchange rates) thanks to the increase in EBITDA. The adjusted EBITA margin rose by 0.9 pts at constant exchange rates to 31.1%.

    Group share of net income

    The Group's share of adjusted net income amounted to MAD 4,482 million, up 4.2% at constant exchange rates compared to the same period of 2016, thanks to the strong increase in net income from International operations driven by the success of the restructuring of the new Moov subsidiaries which are now showing an overall positive net result.

    Cash flow

    In the first nine months of 2017, adjusted cash flow from operations (CFFO)(5) was MAD 7,870 million, up 1.3% from the first nine months of 2016, driven by an improvement in CFFO in Morocco despite the intensification of the pace of capital investment.

    REVIEW OF THE GROUP' S ACTIVITIES

    Details of the financial indicator adjustments for "Morocco" and "International" are provided in Appendix 1.

    • Morocco

IFRS in MAD million

9M-2016

9M-2017

Change

Revenues

16,216

15,316

-5.6%

Mobile

10,717

9,999

-6.7%

Services

10,452

9,851

-5.7%

Equipment

265

147

-44.5%

Fixed-Line

6,740

6,696

-0.7%

Of which Fixed-Line Data*

1,798

1,980

+10.1%

Eliminations and other income

-1,241

-1,379

EBITDA

8,630

8,133

-5.8%

Margin (%)

53.2%

53.1%

-0.1 pts

Adjusted EBITA

5,829

5,320

-8.7%

Margin (%)

35.9%

34.7%

-1.2 pts

CAPEX

2,355

3,127

+32.8%

Of which frequencies & licenses

CAPEX/revenues (excluding frequencies

& licenses)

14.5%

20.4%

+5.9 pts

Adjusted CFFO

4,902

5,328

+8.7%

*Fixed-Line Data includes Internet, ADSL TV and corporate Data services

Revenues from operating activities in Morocco was MAD 15,316 million for the first nine months of the year, down 5.6%, following the reintroduction of asymmetric mobile termination rates in March 2017 and the liberalization of IP telephony in November 2016.

Revenues from Outgoing Services grew by 1.2%, sustained by the success of Mobile and Fixed-Line Data services, whose revenues registered strong growth of 55% and 10.1% respectively.

Earnings from operations before depreciation and amortization (EBITDA) for the first nine months of 2017 amounted to MAD 8,133 million, down 5.8% compared with the same period of 2016 due to the decline in revenues. The EBITDA margin was almost stable (-0,1 pts) thanks to the 0.5 pts improvement in the gross margin and the 3.4% decline in operating costs reflecting the success of the voluntary redundancy plan that benefited to 1,026 employees.

Maroc Telecom - Itissalat Al-Maghrib published this content on 23 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 23 October 2017 00:06:00 UTC.

Original documenthttp://www.iam.ma/Lists/TelechargementFinance/Attachments/1032/Maroc Telecom_PR-Results Q3 2017_EN.pdf

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