MAROC_TELECOM_REGISTRATION_DOCUMENT_2017

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FINANCIAL REPORT Overview

4.2.2 COMPARISON OF RESULTS BY GEOGRAPHICAL AREA

Results by geographical area are as follows:

IFRS (in MAD million)

Changes at constant exchange rates (a)

2017

2016

Changes -0.8% +1.5% +1.1pts +1.2% +0.6pt +4.4% +0.8pt +3.1% +2.8pt +3.1% +6.1%

REVENUES

34,963 17,160 49.1% 10,553 30.2% 5,871 16.8% 8,232 22.9% 11,019 13,042 217

35,252 16,909 48.0% 10,426 29.6% 5,622 15.9% 7,983 20.1% 10,686 12,289 888

-0.9% +1.5% +1.2pts +1.2% +0.6pt +4.1% +0.8pt

Ebitda

Margin (%)

Adjusted Ebitab (c)

Margin (%)

Group share of adjusted net incomeb (c)

Margin (%)

Capexb (b)

o/w frequencies & licenses

CAPEX/revenues (excluding frequencies & licenses)

Adjusted CFFOb (c)

Net debt

Net debt/EBITDA

0.8

0.7

(a) At a constant exchange rate for the MAD, Ouguiya and CFA franc. (b) CAPEX corresponds to purchases of tangible and intangible assets recognized for the period. (c) Details of the financial indicator adjustments are provided in Appendixb1.

4.2.2.1 COMPARISON OF FINANCIAL DATA FOR FISCAL YEARS 2017 AND 2016

EARNINGS FROM OPERATIONS At 2017-end, Group consolidated adjusted earnings fromoperations (EBITA)b (2) amounted toMAD 10,553 million, up 1.2% vs. 2016 due to EBITDA growth. The adjusted EBITAmargin improved by 0.6 points to 30.2%. GROUP SHARE OF NET INCOME The Group share of adjusted net income was MAD 5,871 million, up 4.4%. This increase reflects, in Morocco, the good resistance to VoIP applications and the substantial growth in net income from International operations and particularly the newMoov subsidiaries, which overall, at December-end 2017, produce a very substantially positive net income. CASH FLOW The adjusted cash flow from operations (CFFO)b (3) amounted to MAD 11,019 million, up 3.1% from 2016-end thanks to the increase in EBITDA, the close management of Working Capital Requirement (WCR) and despite the increase in capital expenditure that represented 23% of revenues over the full year (excluding frequencies and licenses).

4.2.2.1.1 Group Consolidated results REVENUES

As of December-end 2017 Maroc Telecom Group’s consolidated revenuesb (1) amounted to MAD 34,963 million, slightly decreasing by 0.8% (-0.9% at constant exchange rates). The 2.4% increase in subsidiaries’ revenues at constant exchange rates offset the impact in Morocco of the deregulation of IP telephony since Novemberb2016 and the decline in call termination rates. Revenues from outgoing services were up 3.7% thanks mainly to the growth in the customer base and increased Data usage. EARNINGS FROM OPERATIONS BEFORE DEPRECIATION AND AMORTIZATION At 2017-end,Maroc TelecomGroup earnings fromoperations before depreciation and amortization (EBITDA) amounted to MAD 17,160 million, up 1.5% from the previous year (+1.5% at constant exchange rates). The EBITDA margin increased by 1.2 points over the year (at constant exchange rates) to 49.1% thanks to significant optimization efforts resulting in a 2.3% decrease in Group’s operating costs, as well as the impact of the decreases in Mobile call termination rates in the subsidiaries.

(1) Maroc Telecom consolidates the following companies in its financial statements: Mauritel, Onatel, Gabon Telecom, Sotelma and Casanet, as well as the new African subsidiaries (in the Ivory Coast, Benin, Togo, Niger, and the Central African Republic) and Prestige Telecom, which has provided IT services to those companies since their acquisition on 26bJanuaryb2015. (2) 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). (3) 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 booked at equity 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.

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MAROC TELECOM ____ 2017 Registration Document