FINANCIAL REPORT - Maroc Telecom

1 1 FINANCIAL REPORT First Half of 2015 2 Preliminary remarks: This FINANCIAL REPORT and the unaudited condensed FINANCIAL statements for the half year ended June 30, 2015 were approved by the Management Board on July 10th, 2015. They were submitted to the Supervisory Board on July 22, 2015, after review by the Audit Committee at its meeting on July 22, 2015. This REPORT should be read in conjunction with the Management Board s REPORT for the year ended December 31, 2014 as published in Registration Document as filed with the Securities Regulator (AMF) on April 10, 2015 ( the 2014 Registration Document ). 3 CONTENTS HIGHLIGHTS 1. CERTIFICATIONS Person responsible for the interim REPORT 7 Certification of the interim REPORT 7 Persons responsible for the audit of the FINANCIAL statements 7 2. ACTIVITY REPORT FOR THE FIRST HALF OF 2015 Description of activities 10 Related-party transactions 15 Recent development and guidance 18 3.

2 FINANCIAL REPORT Consolidated FINANCIAL Data 22 Income statement and FINANCIAL position 24 Consolidated FINANCIAL statements and notes 29 4 Highlights January 2015 Maroc Telecom completes its acquisition of Etisalat s subsidiaries in Benin, C te d Ivoire, Gabon, Niger, the Central African Republic and Togo on January 26, 2015, for 474 million. Maroc Telecom increases the price of its Bienvenue Jawal tariff (from MAD 30 to MAD 50) but adds more airtime, download volume and SMS messages. Maroc Telecom enhances its prepaid MAD 100 Pass Permanent tariff, with 5 hours of airtime, 3 GB of 3G internet access, 1,000 SMS messages valid for one month and MAD 100 of credit valid for one year. Maroc Telecom adds unlimited free calls and SMS messages to certain, predefined numbers, and increases data allowances for all individual and controlled rate mobile customers and business plans for professionals and companies. Maroc Telecom includes 3 hours and 5 hours of free national calls to mobiles as part of its Phony DUO and MT Box offers.

3 In Niger, mobile call termination rates are lowered from XOF 35/min to XOF 25/min. Mali adopts asymmetric mobile call termination rates in favor of the operator Alpha Telecom (a new entrant to the market) for 4 years (40% in the first year, 30% in the second year, 20% in the third year and 10% in the fourth year). In C te d Ivoire, mobile call termination rates are lowered from XOF 28 to XOF 24/min (excluding tax) for mobiles and landlines. In Togo, a tax is introduced on incoming international calls, charged at XOF 25/min. February 2015 Maroc Telecom launches Mon Cloud [ My Cloud ], the first 100% Moroccan online storage service, offering users secure online storage hosted in Morocco. In Morocco, the National Telecommunication Regulatory Authority s (ANRT) decision of February 4, 2015, sets the tariffs of the main services included in Maroc Telecom s unbundling offer (physical unbundling, virtual unbundling and fiber-optic link).

4 In Gabon, mobile termination rates are lowered from XAF 30/min to XAF 18/min and asymmetric mobile termination rates no longer apply, with retroactive effect from January 1, 2015. March 2015 Maroc Telecom further develops its OTT services with the inclusion at the end of March 2015 of free calls using WhatsApp. In Gabon, a 3G/4G license is awarded to Gabon Telecom , which entered into force on March 2, 2015 and is valid for 10 years. April 2015 Maroc Telecom expands the Nomadis offer to the new Moov subsidiaries, enabling all Maroc Telecom group customers to use the roaming service at reduced rates across all of the Group s mobile networks. In Morocco, general guidelines were adopted by the government on April 10, 2015, for the ongoing development of the telecommunications sector by 2018. 5 In Morocco, a 20-year 4G license was awarded to Maroc Telecom on April 11, 2015, renewable for MAD 1 billion (including tax).

5 Deadline expiration for customer identification imposed by the regulator and the launch of a call for tenders by the latter for the appointment of an auditing firm to perform a compliance audit of park management among operators. May 2015 Maroc Telecom launches the permanent quadruple top-up offer for prepaid mobile customers, replacing the double and triple top-up deals. In Mali, a decree is published on identification, stipulating that the sale of pre-activated SIM cards is to be prohibited from mid-August 2015, and that the identities of all subscribers must be registered within 12 months. June 2015 Maroc Telecom enhances its postpaid mobile offers with the addition of 20 hours of airtime and increased data volumes, ranging from 4 GB to 45 GB. Maroc Telecom launches two new unlimited mobile offers, with prices starting from MAD 199. Maroc Telecom reviews the structure of its MAD 50 and MAD 100 Pass Permanent tariffs, by adding more airtime, SMS messages and 3G internet.

6 Maroc Telecom improves the ForfaiFix range for business and professional customers, with the addition of more than 20 hours of airtime to national and international landlines and mobiles in zones 1 and 2. In Niger, the tax on international calls increases from XOF 35/min to XOF with effect from June 1, 2015. In Mali, the TARTOP tax for accessing telecommunications networks is increased from 2% to 5%, and the tax base is expanded to total revenues. In Niger, operators promotions are limited to 2% of their volume of traffic. 6 1. CERTIFICATIONS 7 In this document, " Maroc Telecom " or the Company refers to the company Itissalat Al-Maghrib, and the Group refers to the group constituted by the Company and all of its directly and indirectly owned subsidiaries. PERSON RESPONSIBLE FOR THE INTERIM REPORT Mr. Abdeslam Ahizoune Chairman of the Management Board CERTIFICATION OF THE INTERIM REPORT I hereby attest, to my knowledge, that the condensed interim FINANCIAL statements are established in accordance with applicable accounting standards and give a true and fair view of the income and FINANCIAL position and results of the company and all of the consolidated companies, and that the interim management REPORT gives a true and fair view of the significant events having occurred during the first six months of the year, and their impact on the condensed interim FINANCIAL statements, the main related-party transactions as well as a description of the principal risks and uncertainties for the remaining six months of the year.

7 Mr. Abdeslam Ahizoune Chairman of the Management Board PERSONS RESPONSABLES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Statutory Auditors KPMG Maroc , represented by Mr. Fouad Lahgazi 11, avenue Bir Kacem, Souissi 10 100 Rabat, Morocco Mr. Lahgazi was first appointed by the general meeting of April 12, 2007. His current term, renewed in 2013 for three years, shall expire at the close of the ordinary shareholders meeting held to act on the FINANCIAL statements for the year ending December 31, 2015. Mr. Abdelaziz Almechatt 83 avenue Hassan II 20100 Casablanca, Morocco Mr. Almechatt was first appointed in 1998, through the bylaws. His current term, renewed in 2011 and in 2014 for three years, shall expire at the close of the ordinary shareholders meeting held to act on the FINANCIAL statements for the year ending December 31, 2016. 8 Statutory auditors REPORT on FINANCIAL reporting for the first half of 2015 Peri od from J anuary 1 to J une 30, 2015 To the Shareholders, In our capacity as statutory auditors and in accordance with the assignment given to us by you in your shareholders' meetings, we have: carried out a limited review of the summary consolidated FINANCIAL statements of Itissalat Al-Maghrib (IAM) for the six-month period from January 1 to June 30, 2015 as enclosed with this REPORT , and examined information provided in the interim REPORT .

8 The Management Board was responsible for the preparation of these summary first-half consolidated FINANCIAL statements. Our responsibility is to express our conclusion on them based on our limited review. We have conducted our limited review in accordance with international standards on auditing. A limited review consists mainly of holding discussions with senior managers in charge of accounting and finance, and carrying out analysis work. This work is less extensive than that required by an audit according to international auditing standards. As a result, a limited review provides a moderate level of assurance, a lower level of assurance than that provided by an audit, that the FINANCIAL statements as a whole are free of material misstatement. On the basis of our limited review, we have not seen any significant anomalies that would make any material aspect of the summary interim consolidated FINANCIAL statements non-compliant with IAS 34 (IFRS standard relating to interim FINANCIAL reporting, as adopted by the European Union).

9 We have also examined comments contained in the interim REPORT on the summary interim consolidated FINANCIAL statements on which we carried out our limited review, in accordance with international auditing standards. We are satisfied that the information is presented fairly and corresponds to the summary consolidated half-year FINANCIAL statements. July 22, 2015 The Statutory Auditors KPMG Abdelaziz ALMEHATT Fouad LAHGAZI Abdelaziz ALMECHATT Partner Partner 9 2. ACTIVITY REPORT FOR THE FIRST HALF OF 2015 10 DESCRIPTION OF ACTIVITIES IFRS in MAD millions H1-2014 H1-2015 change Change like for like(1) Revenue 14,564 16,583 + + EBITDA 8,034 8,413 + ( ) Margin (%) ( pts) ( pts) EBITA 5,460 5,351 (2,0%) ( ) Margin (%) ( pts) ( pt) Net income (Group share) 3,073 2,827 (8,0%) Margin (%) ( pts) - CAPEX (2) 2,048 2,716 + - CAPEX / revenues + pts - CFFO 5,091 4,706 ( ) - Net Debt 9,564 15,125 + - Net Debt /EBITDA - - Customer base The Group's customer base totaled nearly 51 million at 30 June 2015, up 32% year-on-year following the consolidation of six new African subsidiaries into the consolidated Group since 26 January 2015.

10 International subsidiaries posted significant growth in their customer bases, with an overall increase of , on a like-for-like basis. Revenues As of 30 June 2015, Maroc Telecom group had consolidated revenues (3) of MAD 16, 583 million, up compared to the first half of 2014, due to the consolidation of the six African subsidiaries into the consolidated Group. On a like-for-like basis(1) revenues were stable with a decline of revenues in Morocco offset by a increase in revenues of the international subsidiaries. Earnings from operations before depreciation and amortization In the first half of 2015, earnings from operations before depreciation and amortization (EBITDA) of the Maroc Telecom group amounted to MAD 8,413 million, up ( on a like-for-like basis).This decrease on a like-for-like basis reflects the decline in EBITDA in Morocco, which was partially offset by the increase in EBITDA in the International subsidiaries.