ETISALAT GROUP Q1 2019 RESULTS PRESENTATION · FINANCIAL HIGHLIGHTS ETISALAT GROUP FINANCIAL HIGHLIGHTS Q1 2019 Highlights • Revenue decline Y/Y is attributed to unfavorable exchange

ETISALAT GROUP

Q1 2019 RESULTS PRESENTATION

23 APRIL 2019 - ABU DHABI, UAE

Etisalat Group | Q1 2019 Results Presentation

DISCLAIMER

Emirates Telecommunications Group Company PJSC and its subsidiaries (“Etisalat

Group” or the “Company”) have prepared this presentation (“Presentation”) in good faith,

however, no warranty or representation, express or implied is made as to the adequacy,

correctness, completeness or accuracy of any numbers, statements, opinions or

estimates, or other information contained in this Presentation.

The information contained in this Presentation is an overview, and should not be

considered as the giving of investment advice by the Company or any of its shareholders,

directors, officers, agents, employees or advisers. Each party to whom this Presentation is

made available must make its own independent assessment of the Company after making

such investigations and taking such advice as may be deemed necessary.

Where this Presentation contains summaries of documents, those summaries should not

be relied upon and the actual documentation must be referred to for its full effect.

This Presentation includes certain “forward-looking statements”. Such forward looking

statements are not guarantees of future performance and involve risks of uncertainties.

Actual results may differ materially from these forward looking statements.

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1. Business Overview

Saleh Al AbdooliChief Executive OfficerEtisalat Group

FINANCIAL HIGHLIGHTS

ETISALAT GROUP FINANCIAL HIGHLIGHTS

Q1 2019 Highlights

• Revenue decline Y/Y is attributed to unfavorable exchange rate movements in Rupee and Moroccan Dirham,

Revenue grew Y/Y in constant currencies by 2%

• EBITDA increase Y/Y is driven by lower cost of sales, lower impairment for trade receivable and lower network costs

• Improvement in EBITDA margin

• Net profit Y/Y increased due to higher EBITDA

• Higher capital expenditure Y/Y attributed to international operations.

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AED Million Q1 2019 Growth YoY% Growth QoQ% Growth YoY%Constant

exchange rates (1)

Revenue 12,989 -1% +0% +2%

EBITDA 6,617 +2% 6% +4%

EBITDA Margin 51% +1pp +3pp +1pp

Net profit 2,212 +5% +9%

Net profit Margin 17% +1pp +2pp

Capex 1,586 +23% -53%

Capex/Revenue 12% +2pp -14pp


(1) Constant currency: Financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiple or divide, as appropriate, our current AED results by the current year monthly average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior year monthly average foreign exchange rates.

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ETISALAT GROUP Q1’19 FINANCIAL HIGHLIGHTS


• Expanding Etisalat Group customer base by +2%• Expanding EBITDA Margin above 50%• Maintaining profitable growth and improving operating Free Cash Flow• Performing better than our guidance in EBITDA Margin• Disciplined capital allocation as we invest in our networks

• Subscriber growth in high quality segment• Revenue growth in a competitive environment• Improvement in EBITDA margin• Continued to transform through simplification and digitalization

• Int’l portfolio impacted by unfavourable exchange rates movements• Maroc Telecom Group maintained revenue growth in both mobile and

fixed segments in Morocco• Etisalat Misr maintained robust revenue growth • Pakistan operations grew revenue in local currency and delivered strong

mobile revenue growth


2. Financial Overview

Serkan OkandanChief Financial OfficerEtisalat Group


ETISALAT GROUP FINANCIAL HIGHLIGHTS

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Revenue Breakdown Q1 2019 (AED m) EBITDA Breakdown Q1 2019 (AED m)

Y0Y Growth -1% Y0Y Growth +2%

UAE

MT Group (LC - 1%)

Egypt (LC +14%)

Pakistan (LC +11%)

+1%

-4%

+14%

-12%

UAE

MT Group (LC + 3%)

Egypt (LC +14%)

Pakistan (LC +16%)

+3%

-1%

+14%

-8%

13.0Bn

6.6Bn

Represents others


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INT’L OPERATIONS FINANCIAL HIGHLIGHTS Q1 2019

Revenue (AED m) / EBITDA (AED m) / EBITDA Margin (%)

Revenue & EBITDA (AED m) / EBITDA Margin (%) / YoY Growth %

Maroc Telecom Q1 2019 Growthin AED

Growth in MAD

Revenue 3,272 -4% -1%

EBITDA 1,768 -1% +3%

EBITDA Margin 54% +2pp +2pp

Etisalat Misr Q1 2019 Growthin AED

Growth in EGP

Revenue 755 +14% +14%

EBITDA 299 +14% +14%

EBITDA Margin 40% 0pp 0pp

Pakistan Q1 2019 Growthin AED

Growth in PKR

Revenue 881 -12% +11%

EBITDA 311 -8% +16%

EBITDA Margin 35% +2pp +2pp

15%


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REVENUE

GROUP REVENUE Revenue (AED m) and YoY growth (%) Sources of Revenue growth Q1 2019 Vs. Q1 2018 (AEDm)

Revenue by Cluster (Q1 2019)

Domestic vs. Int’l International

• In Q1’19 consolidated revenue decreased Y/Y by 1%

attributed mainly to unfavorable exchange rate movements

• Growth in the UAE mainly due to higher mobile postpaid, Internet and TV services, handsets and wholesale revenues

• Revenues from international consolidated operations decreased by 4%, resulting in 39% contribution to Group revenues, 1pp lower than prior year:

— Revenue growth in MT Group negatively impacted by currency and performance of International operations

— Revenue growth in Egypt attributed to voice, mobile broadband and national roaming

— Revenue growth in Pakistan negatively impacted by currency devaluation while grew in local currency

Highlights

5%4%-3%

UAE61%

Int'l39%

Others0%

MT Group65%

Egypt15%

Pakistan17%

Others3%


Constant Cu Y/Y % growth +3% -1% +2%

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EBITDA

GROUP EBITDA EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – Q1 2019 vs Q1 2018 (AED m)

EBITDA by Cluster (Q1 2019)

Highlights

• In Q1’19 consolidated EBITDA increased Y/Y by 2% to AED 6.6 billion.

• EBITDA in the UAE positively impacted by higher revenue and lower operating costs

• EBITDA of consolidated international operations was stable Y/Y, resulting in 36% contribution to Group EBITDA, 1pp lower than prior year:

― Negative contribution from Maroc Telecom Group attributed to currency devaluation and performance of int’l operations; grew in local currency

― Positive contribution from Egypt due to higher revenues

― Negative contribution from Pakistan impacted by currency devaluation while grew in local currency

International Domestic vs. Int’l

UAE63%

Int'l36%

Others1%

MT Group73%

Egypt13%

Pakistan13%

Others1%


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CAPEX

GROUP CAPEX CAPEX (AED m) & CAPEX/Revenue Ratio (%) Sources of Capex growth – Q1 2019 vs Q1 2018 (AED m)

CAPEX by Cluster (Q1 2019)

Domestic vs. Int’l International

1Q’19 consolidated capex increased Y/Y by 23% resulting in a Capex / Revenue ratio of 12%

Lower capital spend in the UAE focused on maintenance, and network modernization

Capital expenditure in international operations increased by 44% and contributed 73% to consolidated Group Capex

― Higher capex in MT Group attributed to international operation

― Higher capex in Egypt with focus on 4G deployment and enhancing capacity

― Higher capex spend in Pakistan attributed to fixed network modernization

Highlights

MT Group72%

Egypt14%

Pakistan12%

Others2%

UAE26%

Int'l73%


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BALANCE SHEET / CASHFLOWS

GROUP BALANCE SHEET & CASH FLOWS

Highlights

• Strengthened liquidity position with a net cash position

• Slightly lower operating cash flow due to income taxes

payments

• Lower financing cash flow mainly attributed to timing of

final dividends payment for FY2018 as compared to

prior year

Cash & bank Balances 28,361 31,373

Total Assets 125,243 130,623

Total Debt 23,526 23,575

Net Cash / (Debt) 4,835 7,799

Total Equity 57,245 56,262

Investment Grade Credit Ratings Balance Sheet (AED m) Dec-18 Mar-19

AA-/Stable

Aa3/Stable

Cash flow (AED m) Mar-18 Mar-19

Operating 4,683 4,497

Investing (1,093) (1,357)

Financing (4,835) (197)

Net change in cash (1,245) 2,943

Effect of FX rate changes (130) 71

Reclassified as held for sales (1) (2)

Ending cash balance 25,748 31,373


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DEBT PROFILE

DEBT PROFILE: DIVERSIFIED DEBT PORTFOLIO

Borrowings by Currency Q1 2019 (%)Borrowings by Operation Q1 2019 (AED m)

Repayment Schedule Q1 2019 (AED m)Debt by Source Q1 2019 (AED m)

15,469

5,152

1,629 1,326

Group MT Group Egypt Pakistan

14,924

7,622

480 549

Bonds Bank Borrowings Vendor Financing Others

8,360

1,184

8,891

5,140

Within 1 Yr 1-2 Yrs 2-5 Yrs Beyond 5 Yrs


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COUNTRY BY

COUNTRY FINANCIAL

REVIEW

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UAE: REVENUE GROWTH & IMPROVEMENT IN PROFITABILITY

UAE

EBITDA (AED m) / EBITDA %Revenue (AED m) / YoY Growth (%)

CAPEX (AED m) & CAPEX / Revenue Ration (%)Net Profit (AED m) / Profit Margin (%)


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UAE

UAE: REVENUE BREAKDOWN AND KEY KPI’s

Mobile Revenues(1) (AED m) Fixed Revenues(2) (AED m) Other Revenues(3) (AED m)

Fixed Broadband(6) Subs (m) & ARPU(7) (AED)Mobile Subs(4) (m) & ARPU(5) (AED)

(1) Mobile revenues includes mobile voice, data, rental, outbound roaming, VAS, and mobile digital services (2) Fixed revenues includes fixed voice, data, rental, VAS, internet and TV services (3) Others Revenues includes ICT, managed services, wholesale (local and int’l interconnection, transit and others), visitor roaming, handsets and miscellaneous (4) Mobile subscribers represents active subscriber who has made or received a voice or video call in the preceding 90 days, or has sent an SMS or MMS during that period(5) Mobile ARPU (“Average Revenue Per User”) calculated as total mobile revenue divided by the average mobile subscribers.(6) Fixed broadband subscriber numbers calculated as total of residential DSL (Al-Shamil), corporate DSL (Business One) and E-Life subscribers.(7) ARPL (“Average Revenue Per Line”) calculated as fixed broadband line revenues divided by the average fixed broadband subscribers.


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MAROC TELECOM GROUP

MAROC TELECOM: IMROVED PROFITABILITYMorocco, Benin, Burkina Faso, CAR, CDI, Gabon, Mali, Mauritania, Niger & Togo

Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)

CAPEX Breakdown Q1 2019Revenue Breakdown Q1 2019

Domestic vs. Int’l International Domestic vs. Int’l International

Morocco57%

Int'l43%

Historical subsidiaries

58%

New subsidiaries

42%Historical

subsidiaries85%

New subsidiaries

15%

Morocco16% Int'l

84%

Y/Y % growth


+15% -2% -4%

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EGYPT

EGYPT: STRONG REVENUE GROWTH & PROFITABILITY INCREASE

Subscribers(1) (m) Revenue (AED m) / EBITDA CAPEX (AED m) & CAPEX/Revenue Ratio (%)

HIGHLIGHTS

• Regulatory restrictions continue to negatively impact customer acquisitions

• Y/Y revenue growth across all segments

• Y/Y EBITDA growth with improvement in margin

• Capital spending increased and focused on 4G deployment and enhancement of network capacity

(1) Subscribers figures are restated to fully align with Etisalat Group definition based on 90 days active

+21% -3% +14%Y/Y % growth


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PAKISTAN

PAKISTAN: GROWTH IN LOCAL CURRENCY WITH IMPROVED MARGINS

Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)

USD / PKR FX Rate (PKR)REVENUE BREAKDOWN Q1 2019

PTCL53%

Ufone47% 111.7

134.4138.9

115.6

138.9 140.8

Q1'18 Q4'18 Q1'19

Average EoP

-3% -11% -12%Y/Y % growth


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GUIDANCE

2019 ACTUAL AGAINST GUIDANCE: BETTER PERFORMANCE IN EBITDA MARGIN


(1) EPS guidance excludes the impact of a potential share buyback

Financial KPI

ActualQ1 2019 in AED

Revenue Growth %

EBITDA Margin%

CAPEX / Revenue %

50.9%

0.25

Guidance2019 in AED

EPS (1) (AED)

12.2%

Slightly lower

48% - 49%

0.99 – 1.02

-0.9%

18% - 19%

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ETISALAT GROUP INVESTOR RELATIONS

Email: [email protected]

Website: www.etisalat.com/en/ir/index.jspr

Documents

ETISALAT GROUP Q1 2019 RESULTS PRESENTATION · FINANCIAL HIGHLIGHTS ETISALAT GROUP FINANCIAL HIGHLIGHTS Q1 2019 Highlights • Revenue decline Y/Y is attributed to unfavorable exchange