2007 First half Results Presentation August 2, 2007
2007 First halfResults
PresentationAugust 2, 2007
1
August 2007
First half highlights
Business review
Financial results
Outlook
2
August 2007
Maroc Telecom consolidates its leadership despite the competition intensification
Mobile :Customer base: 11.7 million customers / +31% vs June 2006Market share(*): 66.4%
Internet :Customer base: 444 k lines / +34% vs June 200640% of fixed lines(**)
Market share(*): 93%
Fixe :Customer base: 1.28 million lines / -2% vs June 2006 Market share(*) (excl. limited mobility): 99.7%
(incl. Limited mobility) : 66.0%
(*) Source ANRT at June 30, 2007 (**) excluding public telephony and limited mobility
OutlookBusiness review Financial resultsHighlights
3
August 2007
A succesfull international development
Africa: leading operators in their marketsMauritel since 2001Acquisition of a 51% Onatel stake in Burkina Faso: December 2006Acquisition of a 51% Gabon Telecom stake: February 2007Maroc Telecom continues to prospect other opportunities in the region
Europe : communitarian linksLaunch of Mobisud (MVNO)
In France on 01/12/2006In Belgium on 02/05/2007
MVNO projects in other European countries (Spain, Italy, Netherland, Maghreb)Points of presence to catch international traffic
OutlookBusiness review Financial resultsHighlights
4
August 2007
More than 15 million of customers
Maroc Telecom Group
Morocco
Mobile11, 7
66,4% leader57,8%
Fixed1,3
100% leader4,3%
Internet0,4
98% leader39%*
•Customer (m)•Market share•Penetration
Mauritanie
• Customer (k)• Market share• Penetration
Mobile767
70% leader33.6%
Fixed36
100% leader1.1%
Internet5
100% leader14%*
Burkina Faso
• Customer (k)• Market share• Penetration
Mobile463
36% / 2nd
7.5%
Fixed107
100% leader0.7%
Internet8
100% leader7%*
Gabon
• Customer (k)• Market share• Penetration
Mobile263
32% / 2nd
54.4%
Fixed22
100% leader2.6%
Internet1
100% leader5%*
(*) compared to fixed-linesCustomers, market share and penetration in Morocco at June-end 2007 / Customers, market share and penetration other countries at Dec-end 2006 (source ITU, MTC, Mauritel)
France – Belgium (MVNO)
Mobile41 Customer (k)
OutlookBusiness review Financial resultsHighlights
5
August 2007
First half results: encouraging trend
Revenues 13,007 MADm / +19.5% +10.1% on comparable basis
Operating income 5,999 MADm / +33.6%+34.5% on comparable basis
Operating margin: 46.1% / +8.1 points on comparable basis
Net income group share 3,850 MADm / +28.4%Net margin: 29.6% / +2.1 points
Cash Flow – Activity 5,442 MADm / +24.1%
OutlookBusiness review Financial resultsHighlights
6
August 2007
First half highlights
Business review
Financial results
Outlook
7
August 2007
Mobile in Morocco: highlights
New abundance offers to increase usage
Launch of many new offers : mobile email, push-to-talk, Blackberry services, Internet broadband using 3G…
Mobisud: development of a community offer
Decrease of access charges
Intensification and diversification of promotions
MobileOutlookBusiness review Financial resultsHighlights
8
August 2007
Mobile in Morocco: Growth and leadership
(*) Source : ANRT (**) including Forfaits sans engagement
Market growth remains strong
Maroc Telecom strengthens its prepaid market share and increases its postpaidmarket share (+5.6 pts)
Churn increase with customer base growth and access charges decrease
MobileOutlookBusiness review Financial resultsHighlights
Customers, '000 30/06/2006 31/12/2006 30/06/2007 Var yoy
Customer base 8,924 10,707 11,713 31.3%Postpaid** 371 410 463 31.5%Prepaid 8,553 10,297 11,250 24.8%
Market share* 67.4% 66.9% 66.4% -1.0 ptsPostpaid** 56.1% 59.4% 61.7% 5.6 ptsPrepaid 68.0% 67.2% 66.6% -1.4 ptsNet adds 80.6% 68.4% 61.6% -14.0 pts
Churn 16.6% 20.3% 23.9% 7.3 ptsPostpaid 13.1% 13.4% 12.8% -0.3 ptsPrepaid 16.7% 20.5% 24.2% 7.5 pts
9
August 2007
694
93 117
706
89 113
716
83 107
Postpaid* Prepaid** Blended
H1-06
H1-07
FY-06
Mobile in Morocco: ARPU and usage
Slowdown of ARPU decrease, with the customer base growth: -8.5% in H1-07 vs -10% in 2006
Usage increase, mainly postpaid, with unlimited offersand aggressive promotions on scratch cards
Outgoing Usage(Minutes/ustomer/month)
ARPU (MAD/customer/month)
462
2139
508
2140
642
2954
Postpaid* Prepaid** Blended
MobileOutlookBusiness review Financial resultsHighlights
(*) Including Forfaits sans engagements (**)Active customer base
10
August 2007
Mobile subsidiaries: huge growth of customer bases
The global customer base of African subsidiaries reached nearly 1.5 million customers, up 40% yoy.
(*) customer base at December end 2006
+48%
+50%
+9%
Mauritel Mobiles
Onatel / Telmob
Gabon / Libertis
Mobile customer base (thousand)
MobileOutlookBusiness review Financial resultsHighlights
518767
309
463
263
241*
June 06 June 07
11
August 2007
Mobile revenues structure and margins
A strong revenues growth coming from a robust customer base increase
Enhanced margins by more than 7 points due to acquisition costs control and new subsidiaries margins enhancement
(*) reassessment of international interconnection revenues (**) at constant currency rate
MobileOutlookBusiness review Financial resultsHighlights
en MADm - IFRS H1-2007Published Comparable basis
Gross revenues 7,079 7,487 8,888 19.0%
Maroc Telecom* 6,746 6,746 7,900 17.1%Mauritel Mobiles 333 333 420 35.1%
Onatel (Telmob) - 255 328 26.6%
Gabon Telecom (Libertis) - 153 223 43.5%
Mobisud (France + Belgique) - 17 -
Operating income* 3,228 3,307 4,588 39.1%
% of revenues 46.0% 44.2% 51.6% 7.4 pts
H1-2006 %change comparable basis**
12
August 2007
Fixed-line & Internet in Morocco : highlights
New products:New ‘Phony’ unlimited tariff plan
ADSL+ Launch delivering a broadband up to 20 Mo
IPTV : new 60 channels offer
New prices cuts: ADSL : from 17% to 33% depending on speed
International leased lines: -15%
‘Téléboutiques’
‘Atlas Offshore’ underwater cable to be laid between Morocco (Asilah) and France (Marseille)
Fixed & Internet
OutlookBusiness review Financial resultsHighlights
13
August 2007
Fixed-line in Morocco : customer base consolidation
(*) Source : ANRT, excl. Limited mobility
Growth of the residential customer base since Q4-2006 with new unlimited offers
Consolidation of Maroc Telecom position in the corporate segment
Fixed & Internet
OutlookBusiness review Financial resultsHighlights
lines '000 30/06/2006 31/12/2006 30/06/2007 Var yoy
Maroc Telecom number of lines 1,310 1,266 1,280 -2.3%
Residential 850 813 820 -3.5%
Corporate 299 296 301 0.7%
Public telephony 161 157 159 -1.2%
Penetration rate* 4.4% 4.2% 4.2% -0.2 pt
14
August 2007
Internet in Morocco: ADSL still soaring
ADSL growth by nearly 35% in an annual basis
Internet customer base(thousand)
Broadband
Narrowband
7 7 6
325384
438
10
242
Dec-05 June-06 Dec-06 June-07
252
332
391444
Fixed & Internet
OutlookBusiness review Financial resultsHighlights
15
August 2007
Fixed subsidiaries: weak growth except in Burkina
The total customer base of subsidiaries in Africa reached nearly 165,000
Growth only in Burkina Faso
36 36
96 107
2222*
juin 06 juin 07
-
+11.4%
-
Mauritel SA
Onatel
Gabon Telecom
Fixed customer base (thousand)
Fixed & Internet
OutlookBusiness review Financial resultsHighlights
(*) customer base at December end 2006
16
August 2007
Fixed and Internet revenues structure and margins
Morocco: Impact of LL tariff cut and of international interconnectionrevenues reassessment Mauritania: Negative impact of the exchange rate (-7%)Burkina Faso : growth in correlation with customer base increaseGabon : customer base reliability still going
Fixed & Internet
OutlookBusiness review Financial resultsHighlights
en MADm - IFRS H1-2007Published Comparable basis
Gross revenues 5,077 5,698 5,532 -2.9%
Maroc Telecom* 4,918 4,918 4,727 -3.9%Mauritel 159 159 165 11.0%
Onatel - 363 410 10.8%
Gabon Télécom - 258 230 -12.2%
Operating income* 1,263 1,165 1,411 21.2%
% of revenues 25% 20% 26% 5 pts
H1-2006 %change comparable basis**
(*) reassessment of international interconnection revenues (**) at constant currency rate
17
August 2007
First half highlights
Business review
Financial results
Outlook
18
August 2007
Scope of consolidation and other features
Change in the scope of consolidation:Fully consolidation of :
Onatel: since 1/1/ 2007Gabon Telecom : since 1/3/2007Mobisud Belgique : since 1/4/2007
Other elements:Release of the unused part of the provision for the voluntary redundancy plan: 100 MADm
OutlookBusiness review Financial resultsHighlights
19
August 2007
Growing revenues
5,077
7,079
10,888
H1-2006
-2.9%5,532Fixed and Internet (gross)*
19.0%8,888Mobile (gross)*
10.1%13,007Consolidated revenues
Var. comparable basis**H1-2007MADm – IFRS
Double-digit growth of Mobile revenues with the customer base increase, despite a 8.5% ARPU decrease in Morocco
Slight decrease of Fixed and Internet revenues, with the negative impacts of international interconnection revenues reassessment and LL tariff cut
Subsidiaries contribution reached 12.5% of Group gross revenues
OutlookBusiness review Financial resultsHighlights
(*) reassessment of international interconnection revenues (**) at constant currency rate
20
August 2007
45.6%51.6%
41.2%46.1%
24.9% 25.5%
S1-06 S1-07
Mobile
Consolidated
Fixed &Internet
Margins stand at a high level
1,262
3,228
4,491
H1-06
21.2%1,411Fixed and Internet *
39.1%4,588Mobile *
34.5%5,999Operating income
Var. comparable
basis**H1-07MADm – IFRS
The consolidated margin remains very high, and positive effect in H1-2007of the voluntary redundancy plan
Excluding effects of the voluntary redundancy plan:The operating income is up 23.6% on a comparable basisThe operating margin reached 45.1%, up 1.3 pt
The enhancement of Mobile margins is the result of the costs acquisition control, in a context of the customer base huge growth
Subsidiaries contribution reached 4% of Group operating income
Operating margins
OutlookBusiness review Financial resultsHighlights
(*) reassessment of international interconnection revenues (**) at constant currency rate
21
August 2007
17.3%
13.9% 13.6%
9.1%
13.0%
12.0%
H1-06 H1-07
Fixed &Internet
Consolidated
Mobile
Growing capex
661
851
1,512
H1-06
45.1%959Fixed and Internet
39.1%1,184Mobile
41.7%2,143Capex
% Var.H1-07MADm - IFRS
Maroc Telecom continues to highly invest in Morocco, capex represent13% of revenues
The growth of Fixed capex is partly linked to the sub-marine cable (240 MADm)
In H1-2007, subsidiaries contribution represents 23% of Group capex
Capex/Revenues
OutlookBusiness review Financial resultsHighlights
22
August 2007
A net cash position of MAD -2.7 billion
The net cash position is negative with:the distribution of 100% of 2006 income, i.e. MAD 6.9 billionthe capex growthrecent acquisitions
Utilisation of a small part of the MAD 4 billion overdraft facilities to face needs
OutlookBusiness review Financial resultsHighlights
Value %
Cash flow – Activity 4,385 5,442 1,057 24.1%
Cash flow – Investment -1,518 -2,322 -804 53.0%o/w: Capex -1,512 -2,143 -631 41.7%
Acquisition -10 -334 -324 ns
Cash flow – Financing -9,636 -2,961 6,675 nso/w: Dividends -6143 -6950 -807 13.2%
Share capital reduction -3516 - - ns
Change in borrowings -35 3968 4,003 ns
Cash position at the end of period 804 2,741 1,937 262.0%
Financial debt -82 -5,498 -5,416 ns
Net cash position 722 -2,757 -3,479 ns
MADm - IFRS H1-06 H1-07Variation
23
August 2007
First half highlights
Business review
Financial results
Outlook
24
August 2007
Perspectives
Morocco, a growing country
Favourable economic data…2007 forecats > 4% (excl. agriculture)
Inflation under control < 3%
Decrease of unemployment rate: 10%
…supported by ambitious projects…
Infrastructure, Offshoring, Tourism…Partly financed by foreign investors
Africa, a high potential
Promising economic forecasts :More than 5.5%/year within the next three years (source : World bank)
A Mobile penetration to grow rapidly :Less than 4% in Sub-Saharan Africa in 2006 (source : ITU)
A field of growth and profitability with :Synergies to be implementedAnd management methods to be enhanced
OutlookBusiness review Financial resultsHighlights
25
August 2007
Outlooks for 2007 end
Within the same scope,
taking into account new acquisitions:
Consolidated revenues growth will exceed 16%
(will exceed 8% on a comparable basis)
Consolidated operating income will exceed 18%
(will exceed 20% on a comparable basis)
OutlookBusiness review Financial resultsHighlights
26
August 2007
Disclaimer
This presentation contains forward-looking statements regarding Maroc Telecom. This information cannot be considered
as historical data and reflects management’s opinions on the expected impact on earnings of its strategy as well as its
forecasts related to new or existing programmes, technological developments or market conditions.
Although Maroc Telecom believes that its expectations are based on reasonable assumptions, these statements are
subject to risks and uncertainties that could cause actual results to differ. It can give no assurance that these expectations
will be achieved or that the actual results will be as set out herein. Key factors that could cause differences between the
expected and actual results include strategic, financial and operational initiatives by Maroc Telecom, changes in the
competitive environment, regulatory changes in the telecom market, and risks and uncertainties linked to currency
fluctuations, technological trends, economic activity and international operations.
The forward-looking statements contained in this document are based on opinions valid at the date of the report only.