Itissalat Al Maghrib IAM S A : Maroc Telecom - PR Q3 2022 Results 25/10/2022

PRESS RELEASE

Rabat, October 25, 2022

CONSOLIDATED RESULTS AT 30 SEPTEMBER 2022

Resilient performance in the third quarter, partly due to a good summer season:

• 3.9% growth in the Group customer base to nearly 76 million customers;
• Improvement of 0.3%* in Group consolidated revenues, driven by a summer seasonality effect in Morocco (+2.8% in Q3 2022) and by a 1.5%* increase in subsidiaries' activities;
• Reinforcement of the Group high level of profitability with an adjusted EBITDA margin of 52.5% (+0.8 pt*);
• Increase of the Group adjusted net income by 5.3%* to reach MAD 4.52 billion at the end of September 2022;
• High level of Group investments (excluding frequencies and licences) maintained, representing 20.5% of revenues, in order to support the sustained level of Fixed-line and Mobile Data usage;
• Net Debt under control which represents 0.9x EBITDA.

In the third quarter of 2022, Maroc Telecom Group resumed revenue growth despite an inflationary context and regulatory pressures.

In Morocco, the impact of the summer season, combined with growth in Fixed-Line activities, offset the trend observed in Mobile Data.

The African subsidiaries continue to make a strong contribution to Group earnings; they maintain a positive momentum in a difficult macroeconomic, competitive and regulatory environment. At the same time, good cost management has improved the Group's profitability.

Maroc Telecom Group relies on the quality of its network and services and maintains an efficient investment policy, which enables it to support the development of usage in all the markets where it operates.

* Applying constant exchange rates between the Moroccan dirham (MAD), Mauritanian ouguiya (MRU) and CFA franc

1

Group adjusted consolidated results*:

										Change at
(IFRS in MAD millions)		Q3 2021			Q3 2022		Change			constant
						exchange
										rates (1)
Revenues	9,006		9,240	2.6%		2.2%
Adjusted EBITDA	4,669		4,901	5.0%		4.6%
Margin (%)	51.8%		53.0%		1.2 pt		1.2 pt
Adjusted EBITA	2,933		3,131	6.8%		6.3%
Margin (%)	32.6%		33.9%		1.3 pt		1.3 pt
Adjusted net income Group	1,468		1,651	12.5%		12.3%
share
Margin (%)	16.3%		17.9%		1.6 pt		1.6 pt
CAPEX(2)	1,571		1,777	13.1%		12.1%
Of which frequencies and	123		0
licences
CAPEX/revenues (excluding	16.1%		19.2%		3.1 pt		3.0 pt
frequencies and licences)
Adjusted CFFO	2,909		2,833	-2.6%		-3.2%
Net Debt	16,972		17,166	1.1%		1.4%
Net Debt/EBITDA(3)		0.9x		0.8x

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

								Change at
	9M 2021		9M 2022			Change		constant
					exchange
								rates (1)
26,786	26,808		0.1%	0.3%
13,829	14,072		1.8%	1.9%
51.6%	52.5%			0.9 pt		0.8 pt
8,504	8,872		4.3%	4.4%
31.7%	33.1%			1.3 pt		1.3 pt
4,300	4,520		5.1%	5.3%
16.1%	16.9%			0.8 pt		0.8 pt
3,687	5,497		49.1%	49.3%
123	0
13.3%	20.5%			7.2 pt		7.2 pt
8,387	8,159		-2.7%	-2.7%
16,972	17,166		1.1%	1.4%
	0.9x		0.9x

• Customer base

The Group's customer base continues to grow, with a year-on-year increase of 3.9%, and amounted to nearly 76 million customers as of September 30, 2022, driven mainly by 6.2% growth in the International customer base.

• Revenues

The Maroc Telecom Group posted consolidated revenues(4) of MAD 26,808 million for the nine months to September 30, 2022, up 0.1% (+0.3% at constant exchange rates(1)).

International business continued to grow, with an increase of 1.0% (+1.5% at constant exchange rates(1)) offsetting the slight decline in revenues in Morocco (-0.5%).

• Earnings from operations before depreciation and amortization

In the nine months to September 30, 2022, consolidated adjusted earnings from operations before depreciation and amortization (EBITDA) amounted to MAD 14,072 million, up 1.8% (+1.9% at constant exchange rates(1)) compared to 2021, driven by revenues growth and a proactive cost control policy in Morocco and the Moov Africa subsidiaries.

The EBITDA margin increased by 0.9 pt (+0.8 pt at constant exchange rates(1)) compared to 2021, taking it to the high level of 52.5%.

2

• Earnings from operations

Consolidated adjusted earnings from operations (EBITA)(5) for the first nine months of 2022 amounted to MAD 8,872 million, up 4.3% (+4.4% at constant exchange rates(1)).

The operating margin was 33.1%, an improvement of 1.3 pt.

• Group share of net income

Adjusted Group share of net income for the nine months to September 30, 2022 amounted to MAD 4,520 million, up 5.3% at constant exchange rates(1) compared to 2021.

• CAPEX

Capital expenditure(2) excluding frequencies and licenses amounted to MAD 5,497 million and represented 20.5% of consolidated revenues.

• Cash flow

Over the first nine months of 2022, adjusted cash flows from operations (CFFO(6)) amounted to MAD 8,159 million, down 2.7% compared to the same period in 2021.

• Highlights

Following the notification on July 22, 2022 of the decision of the ANRT's Management Committee relating to the liquidation of the penalty imposed on Maroc Telecom in connection with the January 17, 2020 decision relating to unbundling, Maroc Telecom proceeded to pay the amount of the penalty set at MAD 2.45 billion.

The appeal filed with the Court of Appeal against the said decision is still under investigation.

3

Group business review:

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

Morocco

(IFRS in MAD millions)	Q3 2021	Q3 2022	Change
Revenues	5,104	5,247	2.8%
Mobile	3,213	3,245	1.0%
Services	3,083	3,021	-2.0%
Equipment	130	224	72.9%
Fixed-Line	2,355	2,461	4.5%
Of which Fixed Data*	951	1,027	8.1%
Elimination and other income	-464	-459
Adjusted EBITDA	2,873	3,031	5.5%
Margin (%)	56.3%	57.8%	1.5 pt
Adjusted EBITA	1,964	2,138	8.8%
Margin (%)	38.5%	40.7%	2.3 pt

9M 2021	9M 2022	Change
14,878	14,808	-0.5%
9,198	8,930	-2.9%
8,850	8,518	-3.7%
348	411	18.2%
7,057	7,239	2.6%
2,789	3,000	7.6%
-1,377	-1,360
8,262	8,395	1.6%
55.5%	56.7%	1.2 pt
5,489	5,763	5.0%
36.9%	38.9%	2.0 pt

CAPEX(2)	578	623	7.9%	1,877	2,381	26.9%
Of which frequencies and licences	0	0		0	0
CAPEX/revenues (excluding	11.3%	11.9%	0.6 pt	12.6%	16.1%	3.5 pt
frequencies and licences)
Adjusted CFFO	1,863	2,266	21.6%	4,601	5,456	18.6%
Net Debt	11,541	10,667	-7.6%	11,541	10,667	-7.6%
Net Debt/EBITDA(3)	1.0x	0.8x			1.0x	0.9x

* Fixed Data includes Internet, ADSL TV and Data services to companies.

Thanks to the combination of a good summer season and continued growth in Fixed Data, revenues in Morocco for the first nine months of 2022 amounted to MAD 14,808 million, down slightly (-0.5%) compared to 2021.

Over the same period, adjusted EBITDA totaled MAD 8,395 million, up 1.6% compared to 2021. The adjusted EBITDA margin remained high at 56.7%, gaining 1,2 pt.

Adjusted earnings from operations (EBITA)(5) amounted to MAD 5,763 million, up 5.0% year-on-year driven by the improvement in EBITDA and a decrease in depreciations and amortizations expenses. The adjusted EBITA margin was 38.9%, up 2.0 pt.

Nine-month 2022 adjusted cash flows from operations (CFFO)(6) amounted to MAD 5,456 million, up 18.6%.

4

Mobile

	Unit	09/30/2021		09/30/2022		Change
Customer base(8)	(000)	20,033		19,925		-0.5%
Prepaid	(000)	17,694		17,521		-1.0%
Postpaid	(000)	2,339		2,404		2.8%
Of which Internet 3G/4G+(9)	(000)	11,517		11,041		-4.1%
ARPU(10)	(MAD/mois)	49.5		46.9		-5.2%

As of September 30, 2022, the Mobile customer base(8) stood at 19.9 million, down slightly by 0.5% compared to September 2021.

Mobile revenues slowed their decline to 2.9% and amounted to MAD 8,930 million for the nine months to September 30, 2022.

Blended ARPU(10) for the first nine months of 2022 amounted to MAD 46.9, down 5.2% compared to the same period in 2021.

Fixed-line and Internet

	Unit	09/30/2021	09/30/2022	Change
Fixed line	(000)	1,984	1,937	-2.3%
High Speed Access(11)	(000)	1,739	1,710	-1.7%

The Fixed-line customer base fell by 2.3% year-on-year to nearly 2 million lines as of September 30, 2022. The broadband(11) customer base represents 1.7 million subscribers, with a substantial increase in the FTTH customer base (+39.7%).

Fixed-line and Internet activities generated revenues of MAD 7,239 million, up 2.6%, driven mainly by Data (+7.6%) and FTTH services (+36.8%), offsetting the decline in Voice.

5