Maroc Telecom SaCSEMA: IAM

Maroc Telecom PR-Q3 2024 Results 25/10/2024

Oct 25, 2024 at 4:46 AM UTC · Issued by Maroc Telecom SA

PRESS RELEASE

Rabat, October 25, 2024

CONSOLIDATED RESULTS AS AT SEPTEMBER 30, 2024

Strong operational performances:

Group customer base increases by 6.1% to 79.7 million customers;
Consolidated revenues up 0.7%*, mainly driven by Moov Africa subsidiaries (+4.0%*);
Strong growth in Mobile Data revenues for Moov Africa subsidiaries (+15.7%*) and Fiber Optic in Morocco (+34%), offsetting lower ADSL and Mobile revenues in Morocco;
High profitability maintained with a Group EBITDA margin of 51.8%;
Group investment (excluding frequencies and licenses) at a sustained level, representing 19.1% of revenues;
Increase in Group net debt impacted by the payment relating to the Wana Corporate dispute, but which remains under control at 1.2x EBITDA.

The Maroc Telecom Group's achievements in the third quarter 2024 were marked by the positive momentum of the Moov Africa subsidiaries' activities and by sustained efforts to optimize costs. Despite a still intense competitive environment, the Group was able to maintain revenue growth and a high level of profitability.

The Group's policy of significant investment, combined with the adaptation of its service offering, is encouraging the development of very high-speed Internet access and usage. It is also paving the way for the arrival of new generations of technology, both in the countries where the Group operates and in Morocco.

* Constant MAD/ouguiya/CFA franc exchange rate.

Group adjusted consolidated results*:

							Change at
(IFRS in MAD millions)		Q3 2023	Q3 2024			Change	constant
				exchange

							rates(1)
Revenues	9,279	9,201	-0.8%		0.3%

Adjusted EBITDA	4,948	4,746	-4.1%		-3.2%
Margin (%)	53.3%	51.6%		-1.7 pt	-1.8 pt

Adjusted EBITA	3,178	2,994	-5.8%		-5.1%
Margin (%)	34.3%	32.5%		-1.7 pt	-1.8 pt

Adjusted net income -	1,694	1,552	-8.4%		-8.0%
Group share

Margin (%)	18.3%	16.9%		-1.4 pt	-1.5 pt

CAPEX(2)	2,777	2,028	-27.0%		-25.7%
Of which frequencies and	0	0
licenses

CAPEX/Revenues
(excluding frequencies and	29.9%	22.0%		-7.9 pt	-7.8 pt
licenses)

Adjusted CFFO	2,139	2,928	36.9%		38.0%

Net debt	17,410	22,999	32.1%		35.4%
Net debt/EBITDA(3)		0.8x	1.2x

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

						Change at
	9M 2023		9M 2024		Change	constant
					exchange

						rates(1)
27,679	27,461	-0.8%		0.7%

14,527	14,225	-2.1%		-0.9%
52.5%	51.8%		-0.7 pt		-0.8 pt

9,230	8,929	-3.3%		-2.2%
33.3%	32.5%		-0.8 pt		-0.9 pt

4,629	4,495	-2.9%		-2.3%
16.7%	16.4%		-0.4 pt		-0.5 pt

5,722	5,260	-8.1%		-6.5%
0	22
20.7%	19.1%		-1.6 pt		-1.6 pt

7,176	7,768	8.2%		9.6%

17,410	22,999	32.1%		35.4%
	0.8x		1.2x

Customer base

The Group's customer base keeps growing (+6.1% year-on-year) reaching 79.7 million at the end of September 2024, driven by the increase in the customer bases of subsidiaries (+9.6%).

Revenues

During the first nine months of the year 2024, the Maroc Telecom Group generated consolidated revenues(4) of MAD 27,461 million, up 0.7%(1) year-on-year. Business growth at Moov Africa subsidiaries (+4.0%(1)) offset lower revenues in Morocco (-2.2%).

Earnings from operations before depreciation and amortization

At September 30, 2024, the consolidated adjusted earnings from operations before depreciation and amortization (EBITDA) of the Maroc Telecom Group amounted to MAD 14,225 million, down slightly by 0.9%(1).

The adjusted EBITDA margin remains high at 51.8%.

Earnings from operations

Consolidated adjusted earnings from operations (EBITA)(5) for the first nine months of 2024 totaled MAD 8,929 million, down 2.2%(1). The adjusted EBITA margin stood at 32.5%.

Net income Group share

Adjusted net income Group share for the nine months to September 30, 2024 amounted to MAD 4,495 million, down 2.3%(1).

CAPEX

CAPEX(2) excluding frequencies and licenses represented 19.1% of Group revenues, in line with the full-year target.

Cash flows from operations

Over the first nine months of 2024, adjusted cash flows from operations (CFFO(6)) amounted to MAD 7,768 million, up 9.6%(1) compared to the same period in 2023.

Highlight

The Casablanca Commercial Court of Appeal confirmed the judgment handed down by the Rabat Commercial Court ordering IAM to pay Wana Corporate MAD 6.368 billion, fully recognized in the accounts and settled at the end of September 2024.

The Company lodged an appeal before the Court Of Cassation against the Court of Appeal's ruling.

Group business review :

The adjustments to the "Morocco" and "Moov Africa Subsidiaries" financial indicators are explained in Appendix 1.

Morocco

(IFRS in MAD millions)	Q3 2023	Q3 2024	Change		9M 2023	9M 2024	Change

Revenues	5,069	4,906	-3.2%	14,749	14,427	-2.2%

Mobile	3,132	2,855	-8.9%	8,870	8,328	-6.1%
Services	2,990	2,733	-8.6%	8,359	7,955	-4.8%
Equipment and other revenues	142	122	-14.2%	511	374	-26.8%

Fixed-Line	2,382	2,495	4.8%
Of which Fixed Data*	1,031	1,212	17.6%
Elimination and other income	-446	-445

Adjusted EBITDA	3,018	2,829	-6.3%
Margin (%)	59.5%	57.7%	-1.9 pt

Adjusted EBITA	2,165	2,008	-7.3%
Margin (%)	42.7%	40.9%	-1.8 pt

CAPEX(2)	958	783	-18.2%
Of which frequencies and	0	0
licenses

CAPEX/Revenues (excluding	18.9%	16.0%	-2.9 pt
frequencies and licenses)

7,207	7,419	2.9%
3,167	3,499	10.5%
-1,329	-1,321

8,435	8,231	-2.4%
57.2%	57.1%	-0.1 pt

5,849	5,752	-1.7%
39.7%	39.9%	0.2 pt

2,385	2,339	-2.0%
0	0
16.2%	16.2%	0.0 pt

Adjusted CFFO	1,717	2,185	27.3%	4,527	5,098	12.6%

Net debt	8,609	14,040	63.1%	8,609	14,040	63.1%
Net debt/EBITDA(3)	0.7x	1.2x			0.7x	1.2x

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

Business operations in Morocco generated revenues of MAD 14,427 million in the first nine months of 2024, down 2.2%, due to the decline in Mobile revenues (-6.1%), partially offset by the rise in Fixed Data activities (+10.5%).

Over the same period, adjusted earnings from operations before depreciation and amortization (EBITDA) amounted to MAD 8,231 million, down 2.4% year-on-year, in line with the decline in revenues. The adjusted EBITDA margin remained high at 57.1%.

Adjusted earnings from operations (EBITA)(5) amounted to MAD 5,752 million, down 1.7%. The adjusted EBITA margin rose by 0.2 pt to 39.9%.

Adjusted cash flows from operations (CFFO)(6) for the first nine months of 2024 in Morocco rose by 12.6% to MAD 5,098 million.

Mobile

	Unit	9/30/2023


Customer base(8)	(000)	19,978
Prepaid	(000)	17,492
Postpaid	(000)	2,486
Of which Internet 3G/4G+(9)	(000)	11,807
ARPU(10)	(MAD/month)	46.1*

9/30/2024

19,857

17,281

2,576

11,863

43.9

Change

-0.6%

-1.2%

3.6%

0.5%

-4.8%

* Data as at september 30 have been restated following a change in calculation methodology.

At September 30, 2024, the Mobile customer base(8) totaled almost 19.9 million customers, continuing to benefit from the strong momentum of the postpaid segment, which expanded by 3.6%.

Mobile revenues fell 6.1% versus the same period in 2023 to MAD 8,328 million.

ARPU(10) for the first nine months of 2024 amounted to MAD 43.9, down 4.8% year-on-year.

Fixed-Line and Internet

	Unit	9/30/2023


Fixed-Line	(000)	1,819
Broadband access(11)	(000)	1,598

9/30/2024

1,673

1,471

Change

-8.0%

-7.9%

The Fixed-line customer base stood at almost 1.7 million lines at end-September 2024. Growth in the FTTH customer base (+34%) partially offset the decline in the ADSL customer base.

The Fixed and Internet businesses generated revenues of MAD 7.4 billion, up 2.9% year-on-year. Fixed Data growth (+10.5%) more than offset the decline in Voice.

Moov Africa subsidiaries

Financial indicators

											Change at							Change at
(IFRS in MAD millions)		Q3 2023			Q3 2024			Change		constant			9M 2023		9M 2024	Change	constant
						exchange								exchange

											rates(1)							rates(1)
Revenues	4,485	4,584		2.2%	4.5%		13,765	13,910	1.1%		4.0%
Of which Mobile services	4,129	4,171		1.0%	3.2%		12,703	12,716	0.1%		3.0%

Adjusted EBITDA	1,930	1,918		-0.6%	1.5%		6,093	5,994	-1.6%		1.2%
Margin (%)	43.0%	41.8%			-1.2 pt		-1.2 pt	44.3%	43.1%			-1.2 pt	-1.2 pt

Adjusted EBITA	1,014	986		-2.7%	-0.5%		3,381	3,177	-6.0%		-3.2%
Margin (%)	22.6%	21.5%			-1.1 pt		-1.1 pt	24.6%	22.8%			-1.7 pt	-1.7 pt

CAPEX(2)	1,819	1,245		-31.6%	-29.7%		3,336	2,922	-12.4%		-9.8%
Of which frequencies and	0	0							0	22
licenses

CAPEX/Revenues
(excluding frequencies and	40.6%	27.2%			-13.4 pt		-13.3 pt	24.2%	20.8%			-3.4 pt	-3.4 pt
licenses)

Adjusted CFFO	422	743		76.1%	81.5%		2,649	2,669	0.8%		4.3%

Net debt	8,865	9,026		1.8%	8.2%		8,865	9,026	1.8%		8.2%
Net debt/EBITDA(3)			1.1x			1.1x							1.0x		1.1x

In the first nine months of 2024, revenues from Moov Africa subsidiaries rose by 4.0%(1) to MAD 13,910 million, thanks to strong momentum in Mobile Data (+15.7%(1)), Fixed Internet (+22.9%(1)) and Mobile Money (+6,5%(1)). Excluding the reduction in call termination rates, subsidiaries' revenues were up 4.5%(1).

Adjusted earnings from operations before depreciation and amortization (EBITDA) rose by 1.2%(1) to MAD 5,994 million, giving an adjusted EBITDA margin of 43.1%.

Adjusted earnings from operations (EBITA)(5) amounted to MAD 3,177 million, down 3.2%(1), due to higher depreciation and amortization charges following major investments programs.

Adjusted net cash flows from operations (CFFO)(6) rose 4.3%(1) to MAD 2,669 million, despite a sustained level of investments (excluding frequencies and licenses) representing 20.8% of revenues.

Operating indicators

	Unit	9/30/2023	9/30/2024	Change

Mobile

Customer base(8)	(000)	51,145	56,050
Mauritania		2,642	2,503	-5.3%
Burkina Faso		11,339	11,928	5.2%
Gabon		1,486	1,649	11.0%
Mali		8,358	8,393	0.4%
Côte d'Ivoire		9,704	11,747	21.0%
Benin		5,489	6,135	11.8%
Togo		2,882	2,952	2.4%
Niger		3,008	3,760	25.0%
Central African		230	275	19.5%
Republic

Chad		6,007	6,710	11.7%

Fixed-Line

Customer base	(000)	383	400

Mauritania		38	15	-60.2%
Burkina Faso		75	69	-7.5%
Gabon		52	63	20.4%
Mali		218	253	16.3%

Fixed Broadband

Base(11)	(000)	189	255
Mauritania		22	37	69.3%
Burkina Faso		21	43	103.8%
Gabon		49	60	22.8%
Mali		97	115	18.8%

Notes:

Constant MAD/ouguiya/CFA franc exchange rate.
Capital expenditure corresponds to acquisitions of property, plant and equipment and intangible assets recognized during the period.
The net debt/EBITDA ratio excludes the impact of IFRS 16, and takes into account the annualization of EBITDA.
Maroc Telecom consolidates in its financial statements Casanet and the Moov Africa subsidiaries in Mauritania, Burkina
Faso, Gabon, Mali, Côte d'Ivoire, Benin, Togo, Niger, Central African Republic and Chad.
EBITA corresponds to operating profit before amortization of intangible assets related to business combinations, impairment of goodwill and other intangible assets related to business combinations and other income and expenses related to financial investment transactions and transactions with shareholders (except when they are recognized directly in equity).
CFFO comprises the net cash flows from operating activities before taxes as presented in the cash flow statement, as well as dividends received from associates and non-consolidated equity interests. It also includes net capital expenditure, which corresponds to net cash outflows on acquisitions and disposals of property, plant and equipment and intangible assets.
Borrowings and other current and non-current liabilities less cash (and cash equivalents) including cash blocked for bank loans.
The active customer base consists of prepaid customers who have made or received a voice call (excluding calls from the public telecommunication network operator concerned or its Customer Relations Centers) or sent an SMS/MMS or who have used the Data services (excluding exchanges of technical data with the public telecommunication network operator concerned) in the past three months, and non-terminated postpaid customers.
The active customer base of the 3G and 4G+ Mobile Internet includes holders of a postpaid subscription contract (whether or not coupled with a voice offer) and holders of a prepaid subscription to the Internet service who have carried out at least one recharge during the past three months or whose credit is valid and who have used the service during this period.
ARPU (average revenues per user) is defined as revenues generated by incoming and outgoing calls and data services net of promotions, excluding roaming and equipment sales, divided by the average number of users in the period. In this instance, blended ARPU covers both the prepaid and postpaid segments.
The broadband customer base includes ADSL, FTTH and leased connections and also includes CDMA in Mali.

Important Warning:

Forward-lookingstatements. This press release contains forward-looking statements and items relating to the financial position, results of operations, strategy and outlook of Maroc Telecom and the impacts of certain operations. Although Maroc Telecom believes that these forward- looking statements are based on reasonable assumptions, they do not constitute guarantees as to the future performance of the company. Actual results may be very different from forward-looking statements due to a number of known or unknown risks and uncertainties, most of which are beyond our control, including the risks described in public documents filed by Maroc Telecom with the Moroccan Capital Market Authority (www.ammc.ma) and the French Financial Markets Authority (www.amf-france.org), also available in French on our website (www.iam.ma). This press release contains forward-looking information that can only be assessed on the day it is distributed. Maroc Telecom makes no commitment to supplement, update or modify these forward-looking statements due to new information, a future event or any other reason, subject to applicable

regulations, in particular Article 2.19 et seq. of the circular of the Moroccan Capital Market Authority and Article 223-1et seq. of the General Regulation of the French Financial Markets Authority.

Maroc Telecom is a global telecommunications operator in Morocco, a leader in all its business segments: Fixed-Line, Mobile and Internet. It has expanded internationally and is now present in eleven African countries. Maroc Telecom is listed on both the Casablanca and Paris exchanges, and its majority shareholders are the Société de Participation dans les Télécommunications (SPT*) (53%) and the Kingdom of Morocco (22%).

* SPT is a Moroccan company controlled by Etisalat.

	Contacts

Investor Relations	Press Relations
relations.investisseurs@iam.ma	relations.presse@iam.ma

Appendix 1: Bridge between adjusted financial indicators and 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 better illustrate the Group's performance by excluding exceptional items.

				9M 2023						9M 2024

(in MAD millions)		Morocco		Subsidiaries			Group		Morocco		Subsidiaries			Group

Adjusted EBITDA	8,435		6,093	14,527	8,231		5,994		14,225
Published EBITDA	8,435		6,093	14,527	8,231		5,994		14,225

Adjusted EBITA	5,849		3,381	9,230	5,752		3,177		8,929
Wana Corporate Dispute								-6,039				-6,039
Published EBITA	5,849		3,381	9,230	-287		3,177		2,890

Adjusted net income - Group share						4,629						4,495
Increase in corporate tax rate						-67						-62
Earthquake fund donation						-481
Wana Corporate Dispute													-4,115
Published net income - Group share						4,081						318

Adjusted CFFO	4,527		2,649	7,176	5,098		2,669		7,768
Payment of license										-22		-22
Published CFFO	4,527		2,649	7,176	5,098		2,647		7,746

Appendix 2: Impact of IFRS 16

At the end of September 2024, the impacts on the main indicators of the Maroc Telecom Group were as follows:

9M 20239M 2024

(in MAD millions)		Morocco		Subsidiaries		Group		Morocco	Subsidiaries		Group

Adjusted EBITDA	203		235	438	209		228	437
Adjusted EBITA	10		37	47	7		33	40
Adjusted net income - Group share					-5					-18

Adjusted CFFO	203		235	438	209		228	437
Net debt	781		845	1,627	883		847	1,730