Maroc Telecom SA IAM

CONSOLIDATED RESULTS AT 31 DECEMBER 2020

Operating results in line with objectives thanks to strong performances at the subsidiaries:      

• 8.1% growth of the Group's customer base, to nearly 73 million customers;
• Growth in the revenues of the Moov Africa subsidiaries (+1.4% on a like-for-like basis*), driven by Data Mobile and Mobile Money services;
• Sustained growth in Fixed Data in Morocco (+13.2%);
• Increased profitability with an adjusted EBITDA margin for the Group of 51.9%, an improvement of +0.7 pt on a like-for-like basis*.

Proposed dividend payment of MAD 3.5 billion, implying MAD 4.01 per share, representing a yield of 2.8%**.

Maroc Telecom Group outlook for 2021 at constant scope and exchange rates:

• Decrease in revenues;
• Decrease in EBITDA;
• CAPEX of maximum 15% of revenues, excluding frequencies and licences.

To mark the publication of this press release, Mr Abdeslam Ahizoune, Chairman of the Management Board, stated:

« In 2020, the Maroc Telecom Group posted operating results in line with objectives. Thanks to ongoing efforts to control costs and multiple innovations, the Group has maintained its margins, demonstrating thus its resilience and its strong capacity to adapt to the conditions imposed by an unprecedented health and economic crisis. 

In Morocco, despite the effects of this crisis and strong competitive pressure, the significant investments made in Broadband support its leadership and its position as forerunner operator. Internationally, the Group has chosen to bring together its subsidiaries in Africa, under a common “Moov Africa” visual identity, reflecting their good growth momentum .

The digitisation project launched by the Group continues and has proved its effectiveness in front of the constraints imposed by the pandemic. »

* The like-for-like basis illustrates the consolidation effects of Moov Africa Chad and the use of a constant exchange rate MAD/Ouguiya/Franc CFA
** Based on the share price of  February,18^th  2021 (MAD 145.30)

adjusted consolidated results* of the group

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

►   Customer base

The Group's customer base grew by 8.1% in 2020, reaching nearly 73 million customers, due to the growth of the customer bases of the Moov Africa subsidiaries and Fixed in Morocco.

►   Revenues

Maroc Telecom Group generated revenues⁽⁴⁾ of MAD 36,769 million, up 0.7% (-0.8% on a like-for-like basis⁽¹⁾). The increase in the revenues of the Moov Africa subsidiaries and Fixed Broadband in Morocco offsets the slowdown in Mobile activities in Morocco, heavily impacted by the competitive context.

In the fourth quarter alone and despite the decrease in Mobile call termination rates in Morocco in December 2020, the Group's revenues increased by 0.7% (+0.4% on a like-for-like basis⁽¹⁾), thanks to the sustained increase in the activities of the Moov Africa subsidiaries and Fixed Broadband in Morocco.

►   Earnings from operations before depreciation and amortization

At the end of December 2020, Maroc Telecom Group's adjusted earnings from operations before depreciation and amortization (EBITDA) reached MAD 19,100 million, up 0.9% (+0.5% on a like-for-like basis⁽¹⁾). The adjusted EBITDA margin was 51.9%, up 0.1 pt (+0.7 pt on a like-for-like basis⁽¹⁾), thanks to rigorous cost management.

►   Earnings from operations

At the end of 2020, Maroc Telecom Group’s adjusted earnings from operations (EBITA)⁽⁵⁾ amounted to MAD 11,598 million, up 0.8% on a like-for-like basis⁽¹⁾, thanks to the increase in EBITDA. The adjusted EBITA margin stood at 31.5%, up 0.5 pt on a like-for-like basis⁽¹⁾.

►   Group share of Net Income

The adjusted Group share of Net Income decreased slightly by 0.4% on a like-for-like basis⁽¹⁾.

►   Investments

The capital expenditures⁽²⁾ excluding frequencies and licenses, down 38.3% over one year, were adapted to the context of the health crisis and focused on meeting strong demand for Fixed Internet access, extensions of Data infrastructures, and quality of service. They represent 9.0% of revenues, a level in line with the objective announced for the year.

►   Cash flow

Adjusted Cash Flow From Operations (CFFO)⁽⁶⁾ improved by +17.8% on a like-for-like basis⁽¹⁾, reaching  MAD 15,719 million mainly due to the decrease in investments.

At 31 December 2020, Maroc Telecom Group’s consolidated net debt⁽⁷⁾ represented 0.8 times⁽³⁾ the Group's annual EBITDA.

►   Highlights of the fourth quarter

In Morocco, the ANRT is implementing a multi-annual framework for Mobile and Fixed termination rates, implying a 35% reduction in Mobile tariffs for Maroc Telecom vs. 25% for Orange and 22% for Inwi, maintaining asymmetry.

In Mauritania, Mauritel obtained a 4G licence for a total amount of MAD 124 million.

The new visual identity “Moov Africa” was launched on 1 January 2021. The ten subsidiaries of the Maroc Telecom Group (based in Mauritania, Burkina Faso, Gabon, Mali, Côte d'Ivoire, Benin, Togo, Niger, Central African Republic and Chad) are now united around a common visual identity.

►   Dividend

At the General Meeting of Shareholders of 30 April 2021, the Supervisory Board of Maroc Telecom will propose the distribution of a dividend of MAD 4.01 per share, representing a total amount of MAD 3.5 billion.

►   Maroc Telecom Group outlook for 2021 at constant scope and exchange rates:

Based on recent market developments and insofar as no new major exceptional event disrupts the Group's activity, Maroc Telecom forecasts for 2021, at constant scope and exchange rates:

• Decrease in revenues;
• Decrease in EBITDA;
• CAPEX of maximum 15% of revenues, excluding frequencies and licences.
  

                
                
review of the Group's activities

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

             ·Morocco

*Fixed Data includes the Internet, TV on ADSL and Data services to businesses

The Group's activities in Morocco generated revenues down 3.7% compared with 2019, affected in particular by the effects of the Covid-19 pandemic on Mobile activities and partially offset by the solid momentum of Fixed and Internet. This change was more marked in the fourth quarter of the year due in particular to the fall in national call termination prices, which has applied from December, 1^st 2020. 

At the end of 2020, the adjusted earnings from operations before depreciation and amortisation (EBITDA) amounted to MAD 11,950 million, down 2.8% compared with 2019. The adjusted EBITDA margin increased by 0.5 pt to a high level of 57.2%, thanks to the control of operating costs.

The adjusted earnings from operations (EBITA)⁽⁵⁾ reached MAD 8,079 million, down 2.6%. It represents an adjusted margin rate of 38.7%, up 0.5 pt.

Adjusted Cash Flow From Operations (CFFO)⁽⁶⁾ in Morocco increased by 9.3% to MAD 10,300 million due to efficient investment management adapted to the context of the crisis.

Mobile

At the end of 2020, the Mobile customer base⁽⁸⁾ totaled 19.5 million customers, down 2.8% over one year.

Mobile revenues fell by 6.5% compared to the same period in 2019, to MAD 13,351 million impacted by the Covid-19 pandemic effects and the competitive context.

The 2020 combined ARPU⁽¹⁰⁾ stood at MAD 54.3, down 6.9% over one year.

Fixed and Internet

The Fixed customer base maintained its good momentum and increased by 6.6% to 2 million lines. The Broadband customer base now has 1.7 million subscribers, up 10.4%.

The Fixed and Internet activities in Morocco continue to improve their performance and generate revenues of MAD 9,517 million, up 2.8% compared to 2019. This growth accelerated in the last three months of the year, thanks to the enthusiasm for the FTTH offers and the ADSL service.

• International

Financial indicators

The Group's international activities recorded revenues of MAD 16,883 million, up 1.4% on a like-for-like basis⁽¹⁾, explained by the recovery in post-lockdown activities and the growth in Data Mobile and Mobile Money services.

In 2020, the adjusted earnings from operations before depreciation and amortisation (EBITDA) amounted to MAD 7,150 million, up 7.9% (+6.5% on a like-for-like basis⁽¹⁾). The adjusted EBITDA margin was 42.4%, up 1.2 pt (+2.0 pt on a like-for-like basis⁽¹⁾). This performance comes from the improvement in the gross margin rate and rigorous cost management.

During the same period, the adjusted earnings from operations (EBITA)⁽⁵⁾ improved by 8.4% (+9.6% on a like-for-like basis⁽¹⁾) to MAD 3,520 million, thanks to the increase in EBITDA.

Adjusted Cash Flow From Operations (CFFO)⁽⁶⁾ from international activities improved by +38.4% on a like-for-like basis⁽¹⁾ to MAD 5,419 million.

Operating indicators

Notes:

(1) "Like-for-like" refers to the effects of consolidating Moov Africa Chad as if it had taken place on January 1, 2019, and an unchanged MAD/Ouguiya/CFA franc exchange rate.
(2) CAPEX corresponds to purchases of tangible and intangible assets recognized for the period.
(3) The ratio Net Debt/EBITDA excludes the impact of IFRS 16.
(4) Maroc Telecom consolidates in its financial statements Casanet and Moov Africa subsidiaries in Mauritania, Burkina Faso, Gabon, Mali, Côte d’Ivoire, Benin, Togo, Niger, Central African Republic and Chad since July 1, 2019.
(6) EBITA corresponds to EBIT before the amortization of intangible assets acquired through business combinations, write-downs of goodwill and other intangible assets acquired through business combinations, and other income and expenses relating to financial investment transactions and transactions with shareholders (except when recognized directly in equity).
(6) CFFO includes net cash flow from operations before tax, as set out in the cash flow statement, as well as the dividends received from companies accounted for by the equity method and non-consolidated equity investments. CFFO also includes net capital expenditure, which corresponds to net uses of cash for acquisitions and disposals of tangible and intangible assets.
(7) Loans and other current and non-current liabilities less cash and cash equivalents, including cash held in escrow for bank loans.
(8) The active customer base consists of prepaid customers who have made or received a voice call (excluding ERPT or Call-Center calls) or received an SMS/MMS or used Data services (excluding ERPT services) during the past three months, and postpaid customers who have not terminated their agreements.
(9) The active customer base for 3G and 4G+ Mobile Internet includes holders of a postpaid subscription agreement (with or without a voice offer) and holders of a prepaid Internet subscription agreement who have made at least one top-up during the past three months or whose top-up is still valid and who have used the service during that period.
(10) ARPU is defined as revenues (generated by inbound and outbound calls and by data services) net of promotional offers, excluding roaming and equipment sales, divided by the average customer base for the period. In this instance, blended ARPU covers both the prepaid and postpaid segments.
(11) The broadband customer base includes ADSL access, FTTH and leased lines as well as the CDMA customer base in Mauritania, Burkina Faso and Mali.

Important notice:
Forward-looking statements. This press release contains forward-looking statements regarding Maroc Telecom’s financial position, income from operations, strategy, and outlook, as well as the impact of certain transactions. Although Maroc Telecom believes that these forward-looking statements are based on reasonable assumptions, they do not amount to guarantees for the company’s future performance. The actual results may be very different from the forward-looking statements, due to a number of risks and uncertainties, both known and unknown. The majority of these risks are beyond our control, namely the risks described in the public documents filed by Maroc Telecom with the Moroccan Capital Markets Authority (www.ammc.ma) and the French Financial Markets Authority (www.amf-france.org), which are also available in French on our website (www.iam.ma). This press release contains forward-looking information that can only be assessed at its publication date. Maroc Telecom does not undertake to supplement, update, or alter these forward-looking statements as a result of new information, future events, or for any other reason, subject to the applicable regulations, and especially to Articles 2.19 et seq. of the circular issued by the Moroccan Capital Markets Authority and to Articles 223-1 et seq. of the French Financial Markets Authority’s General Regulations.

Maroc Telecom is a full-service telecommunications operator in Morocco and the leader in all of its Fixed-Line, Mobile and Internet business sectors. It has expanded internationally, and currently operates in 11 African countries. Maroc Telecom is listed on both the Casablanca and Paris Stock Exchanges, and its majority shareholders are Société de Participation dans les Télécommunications (SPT*) (53%), and the Kingdom of Morocco (22%).

* SPT is a company incorporated under Moroccan law and controlled by Etisalat.

Appendix 1: Transition from adjusted financial indicators to published financial indicators

Adjusted EBITDA, adjusted EBITA, Group share of adjusted Net Income, and adjusted CFFO are not strictly accounting measures, and should be considered as additional information. They are a better indicator of the Group's performance as they exclude non-recurring items.

2020 CFFO was marked by the disbursement of MAD 3,300 million linked to the full payment of the ANRT fine in Morocco as well as MAD 143 million for licences obtained in Mauritania, Gabon and Togo.

2019 CFFO included the payment of MAD 1,937 million corresponding to the licences obtained in Burkina Faso, Mali, Côte d’Ivoire and Togo as well as the widening of the bandwidth spectrum in Morocco.

Appendix 2: Impact of the adoption of IFRS 16

As at end-December 2020, the impacts of this standard on Maroc Telecom’s key indicators were as follows:

Consolidated Statement of Financial Position

Consolidated Income Statement

Consolidated Cash Flow Statement

Attachment

• Maroc Telecom_PR-FY2020_EN_VDEF