Maroc Telecom Sa · CSEMA:IAM
Maroc Telecom Sa — IPO Roadshow (November 2004)
42 slides from Maroc Telecom Sa's IPO roadshow presentation, November 2004
Slide 1: Roadshow Presentation November 2004
Roadshow Presentation November 2004
Slide 2: Disclaimer
Disclaimer This document has been prepared by Maroc Telecom (the “Company”) solely for use at the investor presentation in the context of the contemplated offering. Neither this document nor any copy of it may be sent, transmitted or distributed, directly or indirectly, into the United States, Canad
Slide 3: Presentation of the Management
Introduction Presentation of the Management Abdeslam Ahizoune François Lucas Chief Executive Officer Managing Director Fixed Line and Internet Division Chairman of the Member of the Team Management Board Management Board Blue Mohammed El Hajji Karim Regragui Director Director Regulation Division Cen
Slide 4: Overview of the Offering
Introduction Overview of the Offering v Issue: Up to 130,985,210 shares v Selling Shareholder: Kingdom of Morocco v Distribution: Moroccan retail Moroccan and international institutions v Listings: Casablanca and Paris Stock Exchanges v Over-allotment Option: Up to 17,085,027 shares (15% of shares s
Slide 5: Timetable
Introduction Timetable v Roadshows 22 November – 7 December v Pricing 8 December v First day of trading 13 December v Closing 16 December 4
Slide 6: Introduction to Maroc Telecom
Introduction to Maroc Telecom
Slide 7: Shareholding Structure
Introduction to Maroc Telecom Shareholding Structure Pre-Offering Post-Offering(1) After sale of 16% to VU(1) Kingdom of Vivendi Vivendi Kingdom of Morocco Universal Universal Morocco 34.1% Vivendi 35.0% 35.0% 50.1% Universal 51.0% Kingdom of Morocco 65.0% Free Float Free Float 14.9% 14.9% v Support
Slide 8: The Moroccan Telecommunications Market: A Country with Strong Potential
Introduction to Maroc Telecom The Moroccan Telecommunications Market A Country with Strong Potential A Favorable Environment Liberalizing and Improving Economy v Favorable demographics v Improving the investment framework u ~ 30 million, +1.6% growth p.a. u Young population: ~ 51% under 25(1) v Free
Slide 9: The Moroccan Telecommunications Market: A Fast Growing Industry
Introduction to Maroc Telecom The Moroccan Telecommunications Market A Fast Growing Industry v A MAD19 billion telecom market … Telecoms Market Growth(1) (MADm) v … growing at a fast pace of 11.5% CAGR 18,883 (2001-2003) 17,048 v Market penetration as of June 30, 2004 15,202 u Fixed line: 4% (2) u M
Slide 10: Market Leadership
Introduction to Maroc Telecom Market Leadership Mobile Communication Services Fixed Line and Internet v Leader in Morocco v Sole holder of a fixed line operator license in v 70% market share (1) Morocco Position v Coverage of almost the entire v 94% ADSL(1) market share population v Limited competit
Slide 11: Consolidated Key Financials
Introduction to Maroc Telecom Consolidated Key Financials (in MADm) 31-Dec-01 31-Dec-02 31-Dec-03 30-Jun-04 30-Sep-04 Consolidated sales 14,268 15,411 15,894 8,464 13,304 Operating profit 3,770 5,922 6,949 3,633 5,843 % sales 26% 38% 44% 43% 44% (1) Dividends payment 824 730 2,500 5,124 (Net debt) /
Slide 12: Our strategy: Retaining Our Leadership Position on the Moroccan Telecoms Market
Introduction to Maroc Telecom Our strategy: Retaining Our Leadership Position on the Moroccan Telecoms Market v Stimulate growth in the mobile market v Reinforce its competitiveness on fixed-line with a view to the Three Main Axes forthcoming opening of this segment to competition v Remain the main
Slide 13: Regulatory Framework
Regulatory Framework ey aSIYLas! 5. Maroc Telecom *«
Slide 14: Key Regulatory Issues
Regulatory Framework Key Regulatory Issues v Freedom to set prices, except for Universal Service rates and Tariffs Interconnection rates v Specific obligations for operators with significant market power (market share > 20%) Interconnection v Mobile termination rates set by ANRT as of March 2000 v C
Slide 15: Ongoing Liberalization of the Moroccan Telecommunications Market
Regulatory Framework Ongoing Liberalization of the Moroccan Telecommunications Market v Invitation to tender for fixed-line licenses in Q1 2005 Allocation of u 2 international licenses Fixed Line and Internet New Fixed Line u 2 backbones licenses Licenses u 2 local loop licenses The international li
Slide 16: Mobile Division
Mobile Division ey aSIYLas! 5. Maroc Telecom *«
Slide 17: A Strong Growing Market
Mobile Division A Strong Growing Market v Very strong growth of the mobile market Number of Mobile Customers in Morocco since 1999 ('000) 26.5% v Explosion of the mobile market thanks to: 24.9% 20.9% u Introduction of prepaid service by 16.3% Maroc Telecom u Arrival of the competition 9.9% 7,332 7,8
Slide 18: Maroc Telecom - the Leader
Mobile Division Maroc Telecom - the Leader v Leadership maintained despite the Maroc Telecom Customer Base liberalization of the market ('000) 74.2% 71.1% 70.3% (1) 76.7% v Market share stabilised at 70.3% as of June 6,034 30, 2004 244 5,214 4,597 209 v Strong growth of customer base since the 169 b
Slide 19: A Favorable ARPU Evolution
Mobile Division A Favorable ARPU Evolution ARPU (MAD/customer/month) ARPU Growth Strategy Prepaid MOU/Month: 18(1) 100 93 96 97 v Migration from prepaid to postpaid 2002 2003 30-Sept-2003 30-Sept-2004 v Stimulation of usage Postpaid MOU/Month: 332(1) 837 824 835 800 v Launch of new additional servic
Slide 20: Efficient Customer Acquisition and Retention Policy
Mobile Division Efficient Customer Acquisition and Retention Policy Efficient Acquisition Policy Steady Effort at Customer Retention v Subsidy levels under control v Prepaid u Recurring promotions v Wide range of handsets v Postpaid v Active communication policy u Retention system with points (compe
Slide 21: Outlook for Maroc Telecom's Mobile Division
Mobile Division Outlook for Maroc Telecom’s Mobile Division v A market which remains very dynamic: u First 9 months of 2004 clearly demonstrated the elasticity of the market u Penetration is likely to reach 40% (1) in the medium-term v Maroc Telecom has held onto the advantages on which it built its
Slide 22: Fixed Line and Internet Division
Fixed Line and Internet Division
Slide 23: Fixed Line Market Evolution
Fixed Line and Internet Division Fixed Line Market Evolution v 1.3 million lines as of September 30, Evolution of Access Lines(2) 2004 … ('000) CAGR(3) 5.8% v ... providing 60% of the total voice (4) outgoing fixed and mobile traffic 1,312 1,219 1,140 1,127 4.5% 265 256 237 249 97 20.6% Penetration
Slide 24: 3 Key Segments
Fixed Line and Internet Division 3 Key Segments v 15% household penetration Residential v Fixed-to-mobile erosion reduced from 2003 v El Manzil packages and “Forfaits Plafonnés” (capped packages) v Teleboutiques: over 20,000 outlets Public Telephony v Pursue rapid growth of Maroc Telecom’s public ph
Slide 25: Tariff Rebalancing Started a While Ago
Fixed Line and Internet Division Tariff Rebalancing Started a While Ago v Continuing decreases in call prices (domestic and international) since 1994 v Increase in rental fees v Simplification of the tariff grid structure u Local, domestic, fixed to mobile and international (8 geographical areas) v
Slide 26: Focus on New Growth Areas – ADSL Expansion and Data Connectivity Services
Fixed Line and Internet Division Focus on New Growth Areas – ADSL Expansion and Data Connectivity Services Strong ADSL Lines Growth Focus on Data Services v Data transmission services towards large 42,201 accounts 26,567 u Revenue growth potential through increase in data capacity (broadband) 2,572
Slide 27: Outlook for Fixed Line and Internet Division
Fixed Line and Internet Division Outlook for Fixed Line and Internet Division v Further expand of fixed-line communications (voice, data and Internet) in Morocco u Potential for growth in access lines v Reinforce competitiveness (offering, prices, services) u Face increasing competition u Reinforce
Slide 28: Key Financials
Key Financials ey aSIYLas! 5. Maroc Telecom *«
Slide 29: Key Consolidated Financials
Key Financials Key Consolidated Financials v Sales growing steadily v High level of margins Consolidated Sales Operating Profit and Net Income (MADm) (MADm) 38% 44% 41% 43% CAGR: 5.5% 26% 32% 30% 29% 21% 15,411 15,894 14,268 8% 10.3% 6,949 5,922 5,085 8,464 7,676 3,770 3,633 3,232 3,167 2,285 2,472
Slide 30: Mobile: Strong Growth and High Margins
Key Financials Mobile: Strong Growth and High Margins (in MADm) 31-Dec-01 31-Dec-02 31-Dec-03 30-Jun-03 30-Jun-04 Gross sales 6,760 7,734 8,388 3,981 4,707 % change 14% 8% 18% EBITDA 1,749 3,082 3,554 1,646 2,330 % margin 26% 40% 42% 41% 50% Operating profit 1,058 2,347 2,676 1,248 1,790 % margin 16
Slide 31: Fixed Line: Maintain High Profitability and Cash Flow Generation
Key Financials Fixed Line: Maintain High Profitability and Cash Flow Generation (in MADm) 31-Dec-01 31-Dec-02 31-Dec-03 30-Jun-03 30-Jun-04 Gross sales 10,417 11,054 11,210 5,492 5,377 (1) % change 6% 1% -2% EBITDA 4,088 5,084 5,564 2,632 2,487 % margin 39% 46% 50% 48% 46% Operating profit 2,712 3,5
Slide 32: Strong Payout Capacity
Key Financials Strong Payout Capacity Strong Cash Flow Generation Capacity(1) Strong Financial Structure (MADm) (MADm) Net cash position: MAD3.5 bn 6,000 5,348 (2) 6,093 5,826 4,817 5,000 3,865 (3) 4,000 3,514 3,413 3,000 2,483 2,000 (1,400) 1,000 2001 2001 2002 2002 2003 2003 Jun-04 Jun-04 0 2001 2
Slide 33: Objectives for 2004
Key Financials Objectives for 2004 Sales v Growth rate between 8 and 10% EBITDA/ Op. Profit v Growth rate between 8 and 10% Operational v Stable compared to 2003 Cash Flow(1) 32 (1) Operational cash-flow : EBITDA-capex-change in working capital
Slide 34: High Growth Prospects and Attractive Yield
Conclusion High Growth Prospects and Attractive Yield v Morocco: an attractive investment environment: u Stable political environment u High growth potential of GDP per capita u Limited monetary risk thanks to strong correlation of national economy to euro v A solid incumbent operator ... u Leadersh
Slide 35: Appendices
Appendices ey aSIYLas! 5. Maroc Telecom *«
Slide 36: Maroc Telecom: a Few Milestones
Appendices Maroc Telecom: a Few Milestones v 1984: Promulgation of law creating state agency ONPT (Office National des Postes et Télécommunications – National Agency for Postal and Telecommunication Services) v 1987: Digitization of fixed network and deployment of first mobile phone network under NM
Slide 37: Adequate Retail Strategy Thanks to Complementary Fit of Distribution Networks
Appendices: Mobile Division Adequate Retail Strategy Thanks to Complementary Fit of Distribution Networks Direct distribution network Indirect distribution network Added value 269 Maroc Telecom branches: of sold - 21 Maroc Telecom Mobile branches products - 203 generalist branches - 13 corporate bra
Slide 38: Mobile Network
Appendices: Mobile Division Mobile Network Optimal Network Coverage Outlook v Optimal coverage: v Increase in capacity in accordance to u Over 3,500 base stations covering customer base and traffic evolution almost the whole of the population as v Launch of new services of June 30, 2004 v Extension
Slide 39: A Modern, Evolutionary, Secured and Monitored Fixed Network
Appendices: Fixed Division A Modern, Evolutionary, Secured and Monitored Fixed Network Modern, Evolutionary and Secured Outlook v Transmission v Optimizing networks u Fiber-optic cable predominance in u Consolidation of switching exchanges urban and inter-urban areas (from 106 to 54) u SDH technolog
Slide 40: Consolidated Balance Sheet
Appendices: Key Financials Consolidated Balance Sheet (in MADm) 31-Dec-01 31-Dec-02 31-Dec-03 30-Jun-04 Goodwill 191 149 143 140 Fixed assets 14,146 13,487 13,014 13,014 Operating assets 5,632 5,761 5,848 6,515 Cash and cash equivalents 1,877 6,116 7,700 4,967 Total assets 21,846 25,513 26,705 24,63
Slide 41: Consolidated Profit and Loss Account
Appendices: Key Financials Consolidated Profit and Loss Account (in MADm) 31-Dec-01 31-Dec-02 31-Dec-03 30-Jun-03 30-Jun-04 Consolidated sales 14,268 15,411 15,894 7,676 8,464 % change 8% 3% 0% 10% EBITDA 5,837 8,166 9,118 4,278 4,817 % sales 41% 53% 57% 56% 57% Operating profit 3,770 5,922 6,949 3,
Slide 42: ey aSIYLas! 5.
ey aSIYLas! 5. Maroc Telecom *«