Financial results

Quarter 3 2020

Disclaimer

This presentation contains information that may be deemed to be forecast.

Regarding the outlook, although the Company believes that these declarations and information are based on reasonable assumptions at the date of publication of this press release, they are by their nature subject to risks and uncertainties, which could give rise to a difference between the actual figures and those indicated or implied in these declarations and information.

SONATEL cannot guarantee or be responsible for the accuracy, completeness, consistency or effectiveness of any of the statements or information given in this press release relating to forecast data.

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Summary

1 2 3

Key numbers Q3 2020

Highlights per country

Perspectives

3

+7.3%

34.9 million

Customers (Landline,

Mobile and

Internet)

+7.1%34.4 million

Mobile customers

12.1 million

+8.1%

Data mobile customers

7.9 million

+25.5%

Orange Money customers

+34.3%291 thousand

Operational indicators

Continued growth of the customer base despite the slowing effects of COVID19 (restrictions on field actions) and the difficulties on recruitment in Mali (currently being covered under the boost customer plan).

A growing number of mobile phone users, driven largely by the good recruitment in Sierra Leone and Senegal.

Data

penetration

35%

Orange money penetration

THD landline customers

23%

(ADSL - Fiber

4

Flybox - Wimax)

Financial indicators

+3.2%

+9.6%

+19.2%

-2.0%

-3.3%

895 billion

Turnover

380 billion

EBITDA

236 billion

Free Cash Flow

140 billion

Net income

143 billion

CAPEX

Turnover

Growth in turnover YoY (+28 billion XOF) still driven by mobile activity (data and orange money) mainly in Guinea, Mali and Sierra Leone covering the decrease in Senegal resulting from the competitor's response effect and the COVID19 crisis.

Delay on the objectives, particularly in retail following operational delays, particularly in Senegal (data, voice) and to a lesser extent in Mali and Bissau (data and international wholesale).

EBITDA

Improvement of the operating margin (+33.2 billion XOF) mainly due on different efforts to control operating costs overall, despite an increase in direct costs but also the revenue improved in Q3, particularly in Guinea and Sierra Leone.

Net income

Decreased by 2% despite the improvement in EBITDA absorbed by the increase in amortization and financial expenses

Free Cash Flow

On the rise (+38 billion FCFA), linked to the good generation of margin but also to the withdrawal from Capex

Ratio

EBITDA

42.5%

+2.5 pts

Net

Margin

16%

Ratio

CAPEX / CA

16%

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Summary

1 2 3

Key numbers Q3 2020

Highlights per country

Perspectives

6

Senegal

Leader

1 55.9% of market share (+2.3 pts)

Results marked by a complicated economic and health context (Covid-19), combined with an increase in competition accelerating the destruction of value with the arrival of disruptive players on the market.

Maintaining and strengthening leadership in volume and value despite a difficult environment around the mixed feelings of new illimix offers.

  • Start of an economic recovery following the relaxation of measures with a favorable evolution of the pandemic;
  • ECOWAS area: States asked to implement the Roaming Regulation;
  • Closure of land borders with Guinea (electoral context);
  • ARTP injunction to stop Covid solidarity offers;
  • Evolution of the Illimix range of offers with mixed feelings and reviews from the general public; launch of a range of illimix packages
  • complementary on August 31;
  • Reaching the symbolic milestone of 10 million subscribers;
  • Success and record raising of Sonatel's bond loan to the BRVM for 100 billion FCFA
  • Signature of the Convention and launch of Promobile, the first Senegalese MVNO hosted by Orange and Launch of activities
  • Extension of preventive measures with gradual return of staff to Sonatel sites
  • New entrants and challengers on the Mobile Money market taking advantage of the Covid context
  • Sale of the competitor to Helios Tower of its passive infrastructure portfolio for CFA Francs 105 billion

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2G 3G 4G/4G+

78% of 4G population coverage

Mobile penetration

108%

Data penetration

39% (active customers)

Mobile money penetration

27% (active customers)

Mali

Leader

1 55.5% of market share (-4.1 pts)

Political tensions led to the departure of President Ibrahim Boubacar Keita in August 2020, and the establishment of a transition team for an 18-month period composed of a President, a Vice President and a First minister. The security is still precarious in the north and center of the country.

Despite this context, Orange Mali has maintained its investments, particularly in mobile broadband (3G / 4G) and in FTTH fiber. 4G coverage has improved significantly with 63% of the population covered by the end of September 2020.

These investments made it possible to maintain the leadership in volume and value. The operating margin is stable, in a context of increasing regulatory pressure (promotion supervision, decrease in MTR).

§ Resignation of President IBK and coming to power of the CNSP.

§ Appointment of a retired soldier as transitional president with the junta president as vice-president. Appointment of a civilian prime minister and formation of a transitional government;

§ Lifting of the ECOWAS embargo (opening of land borders and resumption of financial transactions by the BCEAO);

§ Stability of Corona virus cases with very few daily cases;

§ Volume market share at 62.9% and market share value at 69.4% at the end of 2019 Q4 (source: AMRTP report for the 4th quarter of 2019);

§ Very good performance in the recruitment of new residential FTTH customers § Entry of new asymmetric interconnection charges

§ - Towards Orange: from 5.7 FCFA in 2019 to 2.5 FCFA / min in 2020.

§ - To Malitel: from 7 FCFA in 2019 to 3 FCFA / min in 2020. § End of teleworking since August 31;

§ Orange Mali named fastest landline Internet access provider in Mali.

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2G 3G 4G/4G+

63% of 4G population coverage

Mobile penetration

105%

Data penetration

36% (active customers)

Mobile money penetration

21% (active customers)

Guinea

1

Leader

59% of market share (+2,5 pts)

Solid operational and financial performances in a context of the Covid crisis.

Acceleration of turnover growth and improvement of the operating margin.

2G 3G 4G/4G+

Strengthening of commercial positions supported by the crossing of the 8

million customer mark. Maintenance of the investment effort, extension of the

46% of 4G population coverage

country's network coverage and connection to the National Backbone.

§ Orange leader in the services offered to customers: Voice, Data and SMS following the

Mobile penetration

network audit commissioned by ARPT

108%

  • Confirmation of Orange's leadership following the 2nd quarter report of the ARPT
  • Resumption of growth in Mobile, Data and Orange money stocks

§ Crossing the threshold of 8 million mobile subscribers and 500,000 Data 4G customers;

Data penetration

§ Launch of 4G +

§ Inauguration of 5 franchises in Conakry and in the region (Dabompa, Labé, Pita, Coyah

36,3% (active customers)

and Boké)

  • Inauguration and commercial launch of the National Backbone;

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Mobile money penetration

18,9% (active customers)

Bissau

2

Challenger

47.4% of market share (-8.6 pts)

Return to political stability. Economic slowdown and Covid crisis impact

financial results. Decline in volume market share

2G 3G 4G+

34% of 4G population coverage

  • Confirmation of the victory of President Cissokho EMballo by the Supreme Court and return to normal functioning of the institutions
  • Economic crisis with the impact of the cashew campaign hard hit by Covid 19 (GDP growth revised from 5% to -1.5%)
  • Rainy wintering with heavy showers in August (5,000,000 houses destroyed)
  • Launch of major projects for the new government (rehabilitation work on major roads, the Port and the Bissau Airport).
  • New taxes in the 2020 finance law.
  • Resumption of work on the submarine cable following the Covid 19 shutdown.
  • Relaunch of the traffic management and control project by the Regulatory Agency (without surcharge).
  • Relaunch of the case for the takeover of the incumbent operator Guinea Telecom by the State.
  • Distribution of donations in partnership with the Orange Foundation for the prevention of Covid 19.
  • Signature of the Orange convention for the establishment of a digital house in favor of disadvantaged women.

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Mobile penetration

87%

Data 4G penetration

37% (active customers)

Mobile money penetration

15% (active customers)

Sierra Leone

1

Leader

50.8% of market share (+2.6 pts)

Maintaining leadership in volume despite the slowing effects of COVID. Solid

financial performance driven by good commercial performance and sustained

revenue growth. Investment efforts that continue to support the growth of the

2G 3G 4G/4G+

activity. To point out the heavy tax and regulatory pressure and tougher

competition.

36% of 4G population coverage

  • Finalization of the deployment plan for the sites planned for 2020, with the new sites contributing

50% of revenue growth

Mobile penetration

§ Launch of an innovative solution for rapid loans via Orange Money.

65%

§ More aggressive competition with the launch of several new sites from the two main competitors

and abundant data offerings.

§ Good recruitment momentum, marketing actions with the Spak youth offering, the Orange Lek U

loyalty program.

Data penetration

§ Launch of "Boot Camp" operations aimed at increasing our customer market share in Freetown,

Portloko and Tonkonlili.

19% (active customers)

§ Redesign of Orange Money Merchant offers and a new partnership with SL Commercial Bank.

§ Launch of a second partnership for Orange Energy in Bo, and continued growth of the E-Education

offer

§ Further deterioration of the exchange rate compared to the EURO and USD.

Mobile money

penetration

11

29% (active customers)

Summary

1 2 3

Key numbers Q3 2020

Highlights per country

Perspectives

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Perspectives

Faced with the arrival of new players, particularly in the Senegalese market, SONATEL will maintain its value-oriented strategy while strengthening its competitive advantage on very high speed fixed and mobile connectivity.

To finance its investment program in Senegal, the company successfully launched a bond loan during this quarter. This loan results from SONATEL's desire to diversify its sources of financing and in no way changes the ambition to control the group's balance sheet

structure.

§In order to improve profitability trajectories, a cost control program has been implemented and will be reinforced in all of the group's operations

§Subject to major events that may change the course of activity in our countries of operation, the SONATEL Group plans to:

  • Sustained revenue growth, driven by performance on mobile data, Orange Money mainly in Guinea, Mali and Sierra Leone
  • Sustained growth in operating margin thanks in particular to cost control programs
  • A gradual decrease in the leverage ratio NET DEBT / EBITDA from 1.15 to 0.94 over 2020-2023

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Many Thanks !

S O N A T E L . S N

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SONATEL - Société Nationale des Télécommunications du Sénégal SA published this content on 26 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2020 10:54:04 UTC