emirates telecommunications corporations ... - … · top 15 telecom companies in middle east and...

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Etisalat Group

BAML Frontier Markets Conference 2013

November 20th – 21st , 2013 - Dubai

Agenda

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1. Etisalat at a Glance

2. Key Company Highlights

3. Pillars of Etisalat’s Strategy

4. Update on Maroc Telecom

5. Financial Review

Emirates Telecommunications Corporation and its subsidiaries (“Etisalat” 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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Disclaimer

1. Etisalat at a Glance

Etisalat Snapshot

5

143 million Aggregate Subscribers(1)

9.0 USD billion Revenue

60% Owned by Emirates Investment Authority(2)

1.5 USD billion Dividend

15 Countries in Operation

4.6 USD billion EBITDA

660 million People Under Licence

1.8 USD billion Net Profit

Aa3/AA-/A+ High Investment Grade Rating

13 %

Capex Intensity

1.1 USD billion Capex

25 USD billion Market Capitalisation

Note: Based on 2012 actual financials and operating metrics. (1) Aggregate subscribers including subsidiaries and associates. (2) 100% owned by Federal Government of the United Arab Emirates.

1976 The Emirates Telecomm. Corporation is founded

1982 Etisalat launches the Middle East’s first mobile network

1989 Etisalat establishes the Etisalat University College to create a talent pool of engineers to drive its future growth

1994 The Middle East’s first GSM service is introduced in the UAE

Etisalat launches Emirates Data Clearing House 1995 Internet services are rolled out across the country, another first in the region. Etisalat opens its SIM card factory, Ebtikar

1996 Etisalat is one of the founding investors in Thuraya 1999 Etisalat Launches the Middle East’s first ADSL service Etisalat buys a stake in Tanzanian operator Zantel 2000 Etisalat introduces the E-Vision brand Etisalat Academy is established

2002 Etisalat lists shares on Abu Dhabi Stock Exchange 2003 Etisalat launches the Middle East’s first 3G network, and offers MMS services to its customers 2004 Etisalat wins second license to operate in KSA Etisalat buys a 40% stake in Canar, Sudan 2005 Etisalat acquires 26% in PTCL, Pakistan and a 50% stake in Atlantique Telecom

2006 Etisalat wins license in Egypt and Afghanistan

Etisalat offers BlackBerry in UAE

2007 Etisalat acquires a 40% stake in green-field in Nigeria

2008 Etisalat completes nation-wide fibre optic backbone

Etisalat acquires 45% of Swan Telecom, India

2009 Etisalat acquires Tigo-Sri Lanka

2011 Etisalat launches 4G in UAE

2012 Etisalat exits India & decreased stake in XL Axiata to 4.2%

2013 Submits bid to acquire a majority stake in Maroc Telecom

1976-1980 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2013

Etisalat’s Key Milestones

6

FY’2012 139m subs

FY’2000 1m subs

Mobily KSA

27.5%

Etisalat UAE

100%

Etisalat Misr

(Egypt) 66%

Etisalat Lanka 100%

Etisalat Afghanistan

100%

PTCL Pakistan 23%(1)

Moov Togo 95%

Moov Gabon 90%

Telecel Niger 100%

Acell CAR

100%

Moov Cote

d’Ivoire 85%

Canar Sudan 89%

Etisalat Nigeria 40%

Zantel Tanzania

65%

Etisalat Benin 100%

Atlantique Telecom 100%

Ufone 100%

Fixed line Associates

7

Africa Cluster Asia Cluster

Overview of Etisalat’s Portfolio

Etisalat Group

Thuraya (UAE) 28%

(1) Effective 31-Dec-2012, Etisalat changed the accounting treatment of PTCL from an associate to subsidiary and consolidated PTCL’s balance sheet statement into the Group’s financials.

Fully Integrated

2. Key Company Highlights

Key Company Highlights

9

Experienced

Management Team with

Long Track Record in the

Sector

Leading Telecom

Operator With Third

Largest Market Cap

among Middle East &

Africa Telcos Diversified Operator

with Exposure to

Attractive and High

Growth Markets Across

Africa and Asia

Leading UAE Telco and

Meaningful Contributor to

Domestic Economy and

Innovation in the Region

Strong FCF Profile

with Consistent

History of

Returning Capital to

Shareholders

Highly Rated Telco

(Aa3/AA-/A+) with Low

Leverage and Strong UAE

Government

Support

1

3

5

6

7 2

4 Operating High Quality

Networks with the

Most Advanced

Technologies

$84bn

$32bn

$30bn

$29bn

$27bn

$25bn

$23bn

$18bn

$16bn

$15bn

SABIC

QNB

Al Rajhi

STC

Industries Qatar

Etisalat

Kingdom

Mobily

Saudi Electricity Co.

NBK

Top 15 Telecom Companies in Middle East and Africa(1) Top 10 GCC Companies(1)

10

$36bn

$29bn

$25bn

$21bn

$18bn

$16bn

$13bn

$12bn

$11bn

$11bn

$10bn

$8bn

$4bn

$3bn

$3bn

MTN

STC

Etilsalat

Bharti

Mobily

Vodacom

Turkcell

Ooredoo

Zain

Turk Telecom

Maroc Telecom

Du

Orascom

Telecom Egypt

Wataniya

Leading Middle East & Africa Telecom Operator and One of the Largest Companies in the GCC Region

Source: Bloomberg Data as at 11-November-2013

(1) Ranking by Market Cap

1

Etisalat Lanka, Sri Lanka Licence type Mobile

Number of

operators

Mobile, 5

Etisalat position 3rd

Diversified Telecom Operator with an Attractive MEA and Asian Footprint

11

Aggregate Subscribers:

143 million

Covered Population:

660 million

Operating Countries:

15

Consolidated 2012 Revenue:

AED 33 billion

Consolidated 2012 EBITDA:

AED 17 billion

Etisalat, UAE

Licence type Mobile, Fixed and internet

Number of operators

2

Etisalat position 1st

Thuraya, UAE

Licence type Satellite telecommunication

Network coverage

140 countries

Etisalat Misr, Egypt Licence type Mobile & Internet Number of operators Mobile, 3


Etihad Etisalat (Mobily), Saudi Arabia Licence type Mobile & Internet

Number of operators

Mobile, 3

Etisalat position 2nd

EMTS, Etisalat Nigeria Licence type Mobile

Number of operators Mobile, 4

Etisalat position 4th

Atlantique Telecom, Moov – West Africa Licence type Mobile

Number of operators 2-6 per country

Etisalat position Top 3

Zantel, Tanzania Licence type Mobile & Internet

Number of operators

Mobile 6, Fixed 2

Etisalat position 4th (Mobile)

Canar, Sudan Licence type Fixed

Number of operators Fixed, 2

Etisalat position 2nd

Etisalat, Afghanistan Licence type Mobile

Number of

operators

Mobile, 4


PTCL, Pakistan Licence type Mobile, Fixed and

Internet Number of

operators

Mobile 5, Fixed 11

Etisalat position 3rd (Mobile), 1st (Fixed)

2

Note: Etisalat market positions per WCIS

Consolidated 2012 Net Profit:

AED 7 billion

The Leading UAE Telecom Operator

12

3

Largest telecom operator in the Middle East and UAE

— Largest listed company in the UAE with a market cap of $25n

— Six largest corporation in the GCC

Highly innovative flagship telecom operator in the UAE

— Powering the UAE to be one of the top 10 nations in the world in terms of availability of new technologies

— Pioneer in next-generation networks for both fixed-line and wireless services

— Successfully deployed fiber-optic network in the UAE with more than 1.5 million home pass and making Abu Dhabi the world’s first city that is wholly covered by FTTH

— First to market with fourth-generation long-term evolution (4G LTE) networks in the UAE and MENA

Significant contributor to the UAE economy

— 23% of the UAE Federal Government budget in 2012 through Etisalat’s royalty and dividend payments

— Enabling UAE to become a data centre hub offering near field communication, mobile financial services, M2M and enhancing the contribution of ICT to the UAE economy.

— Reputable employer in the UAE with a stable local employee base

Operating High Quality Networks with the Most Advanced Technologies

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4

Key Network Highlights

2010-2012 Cumulative Capex ($bn)

Avg. Capex as a % of Revenues

(2010-2012)

UAE Expanded the LTE network coverage to over 82% of the population Completed the highest 4G LTE speed test in the world, which reached 300 Mbps Deployed FTTH network through all UAE with 1.5 million home pass

1.6 8%

Egypt

First operator to deploy 3G network with 99% population coverage Commercial launch of 42 Mbps HSPA+ expected after completion of field testing First company in the MENA region and the second in the world to trial an 84 Mbps

HSPA+ connection

0.9 24%

Pakistan PTCL investments in network access (enabling two million copper lines) 0.9 24%

Asia First operator to acquire a 3G license and launch 3G services in Afghanistan First operator in Sri Lanka and South Asia to introduce the Duel Carrier HSPA+ network 0.7 66%

Nigeria

Nigeria network covers 77% PoPs with plans for further expansion

In 2013, Etisalat Nigeria signed a deal with Alcatel-Lucent in order to build 1,000 base transceiver stations

Achieved best quality network as per QoS indicators published by the regulator

1.0 74%

Africa

Atlantique acquired 3G licenses in Ivory Coast and Benin, which will enable faster mobile broadband connections to be launched, as well as a broader range of products and service

0.5 24%

KSA – Mobily

Continued expansion of network infrastructure with the latest and most advanced technologies

Advanced 4G network now covers more than 4,500 new sites 3.2 20%

Strong Financial Profile and Consistent Track Record of Shareholder Remuneration

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Strong Cash

Flow

Generation,

Consistent

Reinvestment

and Robust

Balance Sheet

Operating Cash Flows (AED bn) Capex / Revenue (%) Net Cash Position (AED bn)

Consistent

History of

Attractive

Shareholder

Returns

Dividend Payout Ratio Total Dividends and Dividend Per Share

5

41.5% 48.8%

62.2%

81.2% 82.1%

72.8%

2008 2009 2010 2011 2012 H1'13

(1) In 2013 Operating cash flow and net cash position were impacted by changes in the method of payment of Federal royalty.

(1)

3.6

4.3 4.7 4.7

5.5

2.8

2008 2009 2010 2011 2012 H1'13

Total Dividends (AED bn) Cash Dividend (AED / Share)

0.6 0.6 0.6 0.6 0.7

0.35

(1)

10.6 10.9

7.3

2008 2012 9M'13

14%

13%

14%

2008 2012 9M'13

5.8

8.1

5.8

2008 2012 9M'13

AA AA- A+ A A- BBB+ BBB BBB-

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

Gro

ss

De

bt

/ E

BIT

DA

Highest Rated Telco outside Asia with Strong Balance Sheet and Lowest Leverage Among Peers

15

6

EMEA Telco Ratings and Total Debt / EBITDA Etisalat’s Credit Rating and Metrics

A+/Stable/-- Notching Down from

Sovereign

AA-/Negative Watch/A-1+ +1 Notch

Aa3/Stable/-- Notching Down from

Sovereign

Credit Rating Sovereign Support

Consistently Cash

Positive Balance Sheet

Net Cash / EBITDA

Source: Company filings, Bloomberg

0.23x 0.21x

0.48x

0.31x

FY'10 FY'11 FY'12 H1'13FY’10 FY’11 FY’12 9M’13

Saleh Al Abdooli Chief Executive Officer Etisalat UAE Appointed CEO of Etisalat UAE

in April 2012

Prior to this appointment, he was CEO of Etisalat Misr

Experienced Management Team

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Ahmad Abdulkarim Julfar Chief Executive Officer Etisalat Group Appointed Group CEO in

August 2011

Prior to this appointment, was Group COO

Serkan Okandan Chief Financial Officer Etisalat Group Joined Etisalat in January

2012 as Group CFO

Prior to this appointment, was Group CFO of Turkcell

Dr. Daniel Ritz, PhD Chief Strategy Officer Etisalat Group Appointed Group CSO in

February 2012

Prior to this appointment, was CSO at Swisscom Group

Rainer Rathgeber Chief Commercial Officer Etisalat Group Appointed Group CCO in

January 2013

Prior to joining Etisalat, was SVP of Marketing in Europe of the OTE Group

Saeed Al Hamli Chief Executive Officer Etisalat Misr Appointed CEO of Etisalat Misr

in April 2012

Prior to this appointment, was CEO of Etisalat Afghanistan

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Jamal Aljarwan Chief Regional Officer/Asia Etisalat Group Appointed CRO of the Asian

cluster of EG in October 2011

Prior to this appointment, was CIIO of EG

Essa Al Haddad Chief Regional Officer/Africa Etisalat Group Appointed CRO, Africa, of the

Etisalat Group in January 2013

Prior to this appointment, was CCO of EG

Khalid Al Kaf Managing Director and Chief Executive Officer Etihad Etisalat (Mobily) Appointed CEO and MD of

Mobily in July 2005

Prior to this role, worked for over 19 years with Etisalat in various capacities

s

With a Coherent Vision, Mission & Strategy

17

7

To be the leading and most admired emerging markets telecom group

Vis

ion

M

issio

n • Provide best in class total customer experience for retail and business

• Deliver attractive returns to shareholders while investing in the company’s long term future

• Support economic development and job creation through ICT & socially responsible behavior

Attractive and Well-Balanced

Portfolio

Differentiated Service Offering

Superior Customer Experience

Operational

Excellence and Efficiency

“One Company”

Str

ate

gic

Pil

lars

3. Key Pillars of Etisalat’s Strategy

Key Pillars of Etisalat’s Strategy

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Attractive and Well-Balanced

Portfolio

Differentiated Service Offering

Superior Customer

Experience

Operational

Excellence and Efficiency

“One Company”

Strong Focus on People &

Culture

Own and manage controlling stakes in well positioned operators in target markets, balancing growth and returns

Operate consistently across portfolio with a common set of processes and systems leveraging scale economies

Provide differentiated, innovative service, media and entertainment offerings – leveraging broadband infrastructure and network of partnerships

Serve customers pro-actively and consistently, with a common set of brand values based on in-depth customer understanding and trusted relationships

Manage with a strong focus on efficiency and effectiveness in all operational and support processes at Group and in OpCos

Attract, nurture and retain management talent; streamline internal processes, delegate responsibility, hold people accountable

1 3 2

Addressed in further detail

2012 Revenue and % Growth

20

Diversified Portfolio with Attractive Growth Prospects 1 1

Notes:

(1) Bubble size reflects active subscribers number per Opco as of December 2012.

(2) AT: Atlantique Telecom Countries are Benin, Central African Republic, Cote d’Ivoire, Gabon, Niger, Togo.

-2

-1

0

1

2

3

4

5

6

7

8

4

2

0

-2

-4

16

14

12

10

8

34

50

48

46

44

42

40

38

36

6

32

30

28

26

24

22

20

18

.

..

Nigeria

Sudan Tanzania

Sri Lanka

AT

Egypt Pakistan

Saudi UAE

Afghanistan

>5bn

3-5bn

1-3bn

0.5-1bn

0.1-0.5bn

<0.1bn

<5% 5-10% 10-20% 20-30% >30%

<5% 5-10% 10-20% 20-30% >40%

Revenues

% Growth

Strategic Priorities for the Portfolio

21

1

Current Footprint

New Businesses

Consolidation in fragmented markets through mergers, acquisitions, or select divestments

Stake increases in core operations

Acquisition of licenses and spectrum to further strengthen core operations

Focus is on market-led business development, strategic partnerships and Joint Ventures

For immature markets with limited sizeable M&A, will consider tuck-in acquisitions to accelerate business development in select areas

Select New Geographies

Will consider bolt-on acquisitions, if (a) adjacent to existing core operations, (b) # 1 or 2 market position, and (c) well managed and cash-generative

Will also consider management contracts as a way to enter new markets

Very selective on greenfields (must be sizeable opportunity adjacent to core operation)

Continued Focus on Maximising New Opportunities Across Markets

22

1

Licensing

Expand mobile broadband offering through 3G/4G licence acquisition

Improve network capacity through further spectrum assignment

Processes (2G renewal, 3G & LTE, MVNO)

Selected markets

Pakistan, Benin, Togo

Pakistan, Saudi Arabia, Egypt, Sri Lanka, Togo

Access Regulation

Grow wholesale revenues through commercially negotiated agreements

Optimise costs through further infrastructure sharing opportunities

KSA, UAE, Togo

CDI, Tanzania, Afghanistan

Competition Regulation

Enable a level-playing field conducive to market growth

Nigeria, Tanzania, Egypt

MTRs Review

Improve wholesale margins, i.e. net interconnection payments

Improve retail competitiveness

All markets

Nigeria, CDI, Togo, Benin

Compliance Ensuring continued commercial and technical

readiness on licence obligations All operations with particular focus on

Nigeria, CDI, Benin, Togo, Sri Lanka, Tanzania

National Equity Partners

Consider partnerships in selected countries to optimize performance

African operations

Differentiated Service Offering Across Geographies

23

2

UAE

Broadband push − Strong fixed broadband push alongside value-based customer acquisition focusing on 2-Play and 3-Play − Unmatched LTE speeds & coverage − More competitive data tariffs − Rich device portfolio and attractive bundles

Data revenue and new digital services to provide strategic growth Focus on high-value segments and customized offerings

Egypt Strong data revenue growth; commitment to innovative solutions that drive data penetration growth Focus more on high-value subscribers in order to maintain healthy ARPU levels

Pakistan Opportunities still exist in the Pakistani market

− Large broadband opportunity − 3G license: leveraging fixed and mobile assets to effectively capture data market

Asia Large broadband opportunity in all markets First to launch 3G in Afghanistan in May 12 Maintaining / increasing 3G momentum in Afghanistan and Sri Lanka

Nigeria Focus on network quality to enable innovative solutions Opportunity to provide segmented offerings and to leverage MNP

Africa 3G launch in Ivory Coast (Dec-12) and Benin (June-13); Togo pending license negotiation Introduction of mobile package with a number of benefits to young subscribers in CDI, Benin , Togo and Gabon

KSA – Mobily Significant growth in data, business segment and handset revenues Technology-centric segments as a strategic opportunity Committed to infrastructure investment to maintain mobile broadband leadership and expand fibre optic network

Delivering High Quality Services and Superior Customer Experience

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Latest and Most Advanced

Networks

Monetising fiber investment by migrating fixed line subscribers to eLife services in the UAE

Maximizing mobile data usage in the UAE with 4G LTE Mobile Wi-Fi

Demonstrating leadership with roll-out of advanced 4G network in Saudi and HSPA+ broadband in Egypt

Innovative Products and

Solutions

Introducing value for money competitive data packages

Establishing partnership to facilitate joint projects and new product development through collaborative innovation

Launching smart handsets in the UAE (iPhone 5S and 5C, Samsung Note 3 and Galaxy S4, HTC 1X, Blackberry Curve 9320)

Enhanced Customer

Service

Launching business systems to increase efficiency and accuracy in response to customer queries in the UAE

Improving accessibility by adding 150 Atlantique service points across African footprint

Rolling out loyalty programs to ensure high quality services to high value customer base

3

Operational Excellence and Efficiency

25

3

The Customer

Quality of Service

Innovation

Operational Excellence

Integrity

Excellence

Empowerment

Teamwork

Growing People

Strong focus on customer care & support

Better reach through contact centers, distribution channels and retail shops

Be the innovator not only in terms of voice products…..

…… but also digital media services for the mobile broadband market

Drive operational efficiency through selective outsourcing & site sharing

Promote teamwork

Focus on delivering unmatched quality of network & service

Invest in people & empower them

Deploy strategic infrastructure sharing programs

Leverage scale benefits and efficiency programs

4. Update on Maroc Telecom

27

Update on Maroc Telecom transaction

Etisalat and Vivendi signed a Share Purchase Agreement on the 4th of November 2013

Etisalat to pay MAD 92.6 per share, payable in Euro 3.9 bn (AED 19.2 bn)

6.2 x 2013 EV/EBITDA

Etisalat to also pay cash for Vivendi’s share of the 2012 dividends Euro 0.3 bn (AED 1.5 bn) which will be kept in the Target Company at Closing

Transaction conditional upon (i) executing SHA with the Kingdom of Morocco and (ii) securing competition and regulatory approvals in the Kingdom of Morocco and certain other jurisdictions in Maroc Telecom’s footprint

Closing expected during Q1 2014

January 17th

Etisalat submitted

non binding offer

April 24th

Etisalat submitted

binding offer

May 28th

Shareholders

approval for financing

July 23rd

Vivendi granted

Etisalat exclusivity

Q1 2014

Expected closing

Nov 4th

Signed SPA

Overview of Maroc Telecom

28

Maroc Telecom was founded in 1998

Shareholder structure: Vivendi 53%, Kingdom of Morocco 30%, Free Float 17%

The leading telecom operator in all segments in Morocco and owns controlling stakes in four sub-Saharan incumbents (Mali, Mauritania, Gabon, Burkina Faso) covering a population of over 70 million

Highly profitable and cash generative operation with little debt

Incumbent with fixed and mobile – also IPTC and broadband

30.5m mobile subscribers, USD 7.3/month mobile ARPU, 1.6bn fixed-line subscribers, 683k broadband

subscribers in Morocco

€2.7bn 2012 revenues, € 1.5bn 2012 EBITDA - 56% EBITDA margin

Dual listed on Euronext Paris and Casablanca stock exchange

Strong local management with significant telecom operating experience

Strategic rationale

29

Additional pillar for Etisalat in Africa together with UAE, Egypt, KSA, Nigeria and Pakistan

Would create a leading French speaking West African cluster – potential to be the #1 regional operator (42m

subscribers covering a population of c.132m people in 10 Francophone countries)

Contributes additional experienced operational management with in-depth knowledge of the African market

and with particular experience of turning around incumbents

Ability to consolidate by acquiring majority control

Leading market positions with #1 and #2 positions in all markets

Minimum overlap with Etisalat’s exiting portfolio – Exception of Gabon

Significantly enhances Etisalat financial and operational profile and immediately accretive at Etisalat level

Opportunity for Etisalat to bring value e.g. reduced capex costs, mobile data expertise and digital services

Additional values through synergy potential and economies of scale in a number of areas

5. Financial Review

Etisalat Group

31

FY’10 FY’11 FY’12 FY’11-12 Growth

9 M ‘12 9 M ’13 9M ’12-13

Growth

Subs (m) (1) (2) 95 117 139 +18% 130 144 +11%

Revenue (AED m) 31,929 32,242 32,946 +2% 24,467 29,080 +19%

EBITDA (AED m) 16,561 15,882 16,855 +6% 12,556 14,519 +16%

EBITDA Margin 52% 49% 51% +2pp 51% 50% -2%

Net Profit 7,631 5,839 6,742 +15% 5,888 5,625 -4%

Net Profit Margin 24% 18% 20% +2pp 24% 19% -5pp

EPS (AED) 0.97 0.74 0.85 +15% 0.74 0.71 -4%

Maintained solid subscriber growth momentum with double digit growth

Revenue growth driven by strong performance in the domestic market

Continued data and internet revenue growth in all markets resulting from uptake of new products and services

One of the highest EBITDA margins in the global telecom sector despite changes in geographic and product mix

Improvement in net profit despite higher Federal royalties and forex losses and lower interest income

― Prior year net profit positively impacted by one-off related to partial sale of XL Axiata. Adjusting for the one-off, net profit would have increased Y/Y by 2%

(1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, dialup, fixed broadband and WLL lines generating revenue during the last 90 days. (2) Subscriber numbers reported in 2010-2012 have been adjusted to exclude XL Axiata operations due to the reclassification of XL Axiata investment as “other investments available for sale”

effective from September 2012.

Highlights

Domestic vs. Int’l International

24,467

29,079 1,580

(366)

3,693 21

(316)

9M'12 UAE Egypt Asia Africa Other 9M'13

Group Revenue

32

31,929 32,242 32,946

24,467 29,080

2% 1% 2% 2%

19%

FY'10 FY'11 FY'12 9M'12 9m'13

Revenue YoY growth %

Note: “Other revenues” consist of non-telecom revenues, management fees, etc.

Maintained revenue growth momentum with Y/Y growth of 19% driven by strong performance of domestic operations and Asia Cluster

Revenues from international operations grew by 48% and contributed 36% to consolidated Group revenue, an improvement of 7 points compared to 9M’12

— Revenue growth in Egypt impacted by currency devaluation

— Revenue growth in Asia Cluster benefited from consolidation of operations in Pakistan

— Revenue growth in Africa Cluster impacted by currency devaluation in Sudan and competitive environment in Ivory Coast

Highlights

Revenue (AED m) and YoY growth (%) Sources of Revenue growth – 9M’13 vs 9M’12 (AED m)

Revenue by Cluster (9M’13)

UAE 64%

Int’l 36%

Pakistan 36%

Egypt 33%

Afghan. 7%

Others 17%

Ivory Coast 6%

Others <1%

UAE 74%

Int’l 22%

Others 4%

Group EBITDA

33

In 9M’13, group consolidated EBITDA grew to AED 14.5bn representing YoY growth of 16%

EBITDA growth was mainly due to strong revenue growth in the UAE and Asia Clusters

In the UAE, 9M’13 EBITDA increased Y/Y by 6% to AED 10.7bn leading to EBITDA margin of 58% in comparison to 60% of the previous year

EBITDA of consolidated international operations increased Y/Y by 51% in 9M’13, resulting in 22% contribution to group EBITDA, an improvement of 5 points compared to 9M’12

― Egypt impacted by currency devaluation and higher network costs

― Asia Cluster benefited from the consolidation of Pakistan

― Africa Cluster impacted by higher operating and marketing expenses and new taxes on incoming international calls

16,561 15,882 16,855 12,576 14,530

52% 49% 51% 51% 50%

FY'10 FY'11 FY'12 9M'12 9M'13EBITDA EBITDA Margin

12,576

14,530 629

(177)

1,360

(117)

258

9M1'12 UAE Egypt Asia Africa Other 9M'13

Note: “Other EBITDA” consist of results from non-telecom operations, management fees, etc.

Highlights

EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – 9M’13 vs 9M’12 (AED m)

EBITDA by Cluster (9M’13)


Pakistan 40%

Egypt 39%

Afgh. 3%

CDI 5%

Others 11%

Group CAPEX

34

5,899

4,300 4,164 2,694

4,186

18%

13% 13% 11%

14%

FY'10 FY'11 FY'12 9M'12 9M'13

CAPEX CAPEX/Revenue

CAPEX (AED m) & CAPEX/Revenue Ratio (%)

In 2013, capital spending during the year focused on capacity and coverage and deployment of 3G networks and expanding LTE rollout

Capital investment in the UAE focused on enhancing capacity and ensuring 4G leadership

− Etisalat has deployed over three million kilometres of fibre optic across the UAE

− The company expanded the LTE network coverage to over 82% of the population

− FTTH roll out progress to exceed 1.5 million home pass

Etisalat completed the highest 4G LTE speed test in the world, which reached 500 Mbps

Capital investment in international operations grew by 105% and contributed 63% of consolidated capex in 9M’13:

― Higher capex spend in Egypt to support network expansion

― Asia Cluster impacted by consolidation of Pakistan operations representing 20% of Group consolidated capex

― Higher spending in Africa Cluster due to the Universal Mobile License acquisition in Benin and 3G network deployment in Ivory Coast

Highlights

CAPEX by Cluster (9M’13)

UAE 36%

Int’l 63%


Pakistan 31%

Egypt 28%

AT 28%

Others 13%

Highlights Net cash position (AED m) 9M’12 9M’13

Operating 8,403 7,335

Investing (56) (3,166)

Financing (5,994) (6,275)

Net change in cash 2,535 (2,107)

Effect of FX rate changes (149) 112

Ending cash balance 12,176 11,939

Borrowings by Operation (AED m)

1,856

1,594

1,097

805

380 374

Egypt AT Pakistan Afgh. Tanzania Sri Lanka

Group Balance Sheet & Cash Flows

35

Balance Sheet (AED m) FY‘12 9M’13

Cash & Cash Equivalent 13,934 11,939

Total Assets 79,951 77,933

Total Debt 5,806 6,106

Net Cash 8,128 5,833

Total Equity 46,056 44,716

(1) Atlantique Telecom Countries are Benin, Central African Republic, Cote d’Ivoire, Gabon, Niger, Togo.

(1)

Strong financial position

Cash balance and working capital impacted by payment of Federal royalties and higher dividends payment in April and August 2013

Operating cash flow impacted by royalty payments

36

Country by Country Financial Review

UAE: Solid execution drives growth

37

FY’10 FY’11 FY’12 FY’11-12 Growth

9 months ‘12

9 months ‘13

Growth

Subs(1) (m) 8.3 9.0 +8% 9.0 10.2 +13%

Revenue (AED m) 24,294 23,004 22,746 -1% 16,895 18,475 +9%

EBITDA (AED m) 15,168 13,256 13,456 +2% 10,058 10,686 +6%

EBITDA Margin 62% 58% 59% +1pp 60% 58% -2pp

Net Profit 7,419 5,969 5,907 -1% 4,459 4,633 +4%

Net Profit Margin 31% 26% 26% 0pp 26% 25% -1pp

CAPEX 2,262 1,767 1,795 +2% 1,264 1,506 +16%

CAPEX/Revenue 9% 8% 8% 0pp 7% 8% -1pp

Growth in active subscribers base steered by healthy growth in eLife and mobile subscribers

Strong revenue growth underpinned by data and wholesale segments and handsets sales

Healthy EBITDA margin at 58% despite higher proportion of low margin handset sales and higher marketing and network maintenance expenses

Improvement in net profit Y/Y despite higher Federal Royalty charges under the new royalty scheme

— Y/Y revenue growth impacted by lower interest income due to full payment of Federal Royalty in April 2013

Higher capex spend with focus on ensuring leadership in 3G/4G

(1) Subscriber numbers calculated as aggregate number of GSM, fixed, fixed broadband and eLife lines generating revenue during the last 90 days. Source: IMF, TeleGeography Reports, WCIS, TRA

Highlights Macro and Market Snapshot (2012)

Population (m) 7.9

GDP ($bn) 358.9

GDP Growth (%) 3.9

Penetration Rate (%) 180.7

ARPU ($) 34.6

Number of Players 2

Etisalat Position 1

0.75 0.81 0.79 0.89

450 458

FY'11 FY'12 Q3'12 Q3'13

Fixed BB ARPL

0.35

0.51 0.48

0.65

343 363

FY'11 FY'12 Q3'12 Q3'13

E-Life (2P & 3P) ARPL

0.94 1.11 1.23 1.25

5.40 5.96 5.82 7.01

146 136 129 124

FY'11 FY'12 Q3'12 Q3'13

Postpaid Prepaid Blended ARPU

UAE: Subscriber Growth in High Value Segments

38

1.17

1.10 1.11

1.06

116 107 111 108

FY'11 FY'12 Q3'12 Q3'13

Fixed ARPL

(1) Mobile ARPU (“Average Revenue Per User”) calculated as total mobile voice, data and roaming revenues divided by the average mobile subscribers. (2) ARPL (“Average Revenue Per Line”) calculated as fixed line revenues divided by the average fixed subscribers. (3) Fixed broadband subscriber numbers calculated as total of residential DSL (Al-Shamil), corporate DSL (Business One) and E-Life subscribers.

Mobile Subs (m) & ARPU(1) (AED)

Fixed Broadband(3) Subs (m)

Fixed Subs (m) & ARPL(2) (AED)

eLife Subs – Double & Triple-Play (m)

64%

36%

UAE: The Leading Telecom Operator

39

Mobile Market Share (%)

Subscribers

Fixed Market Share(2) (%)

Revenue Subscribers Revenue

9M’13 EBITDA Margin (%) Q3’13 ARPU (AED)

Mobile Fixed

Total:15.2m Total: AED17.2bn Total:1.8m Total: AED7.8bn

Source: Latest company filings (1) Market Share data is based on first nine month results of FY 2013 (2) Fixed line subscribers include Etisalat fixed broadband and eLife double and triple play subscribers.

54.5%

45.5%

83.4%

16.6

%

57.8%

40.5% 124

106

1

108

1

NA

86.4%

13.6%

1,571

1,129 1,174

553

750 40%

25% 23%

15%

22%

FY'10 FY'11 FY'12 9M'12 9M'13

CAPEX CAPEX/Revenue

Egypt: Political unrest impacting performance

40

Maintained market position in a difficult macro and economic environment

Strong revenue growth in local currency driven by customer acquisitions and high growth in mobile data usage, despite political unrest

Revenue growth Y/Y impacted by currency devaluation

Maintained strong EBITDA margin at mid 30’s level despite change in revenue mix towards low margin terminals and higher network costs

Continued to invest in maintenance capex and capacity upgrade

Highlights

Total Subscribers (1) (m)

Macro and Market Snapshot (2012)

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

4,114 4,500

5,075

3,773 3,407

35% 39% 39% 37% 36%

FY'10 FY'11 FY'12 9 months'12

9 months'13

Revenue EBITDA %

71

83

97 94 97

12% 17%

24% 24% 23%

FY'10 FY'11 FY'12 9M'12 9M'13

Subscribers Market Share %

Population (m) 84.6

GDP ($bn) 256.7

GDP Growth (%) 2.2


ARPU ($) 4.4

Number of Players (Mobile) 3

Etisalat Position 3

(1) Subscribers and market share data as per statistic published by the Ministry of Information and Technology as of July 2013

Source: IMF, TeleGeography Reports, WCIS

29.4

34.1 35.8 35.8 36.5

FY'10 FY'11 FY'12 9M'12 9M'13

983

1,414 1,564

1,169

(25%) (13%)

11%

10%

30%

FY'10 FY'11 FY'12 9M'12 9M'13

Revenue EBITDA %

1,379

655

566

669

1,087 140%

46%

36%

36% 22%

FY'10 FY'11 FY'12 9M'12 9M'13

CAPEX CAPEX/Revenue

Asia: Steady Revenue Growth with Improved EBITDA Margin Afghanistan, Pakistan(1) and Sri Lanka

41

In 2013 Asia Cluster benefited from consolidation of Pakistan operations. Excluding Pakistan:

— Revenue growth Y/Y would have been flat

— EBITDA Margin would have been flat at 17%

Highlights

Subscribers (m)



(1) Consolidation of Pakistan operations effective 1 Jan 2013. (2) Asia Cluster’s subscribers before consolidation of operations in Pakistan Source: IMF, TeleGeography Reports, WCIS`

Afghanistan Pakistan Sri Lanka

Population (m) 34.1 181.6 21.3

GDP ($bn) 19.9 231.9 59.4

GDP Growth (%) 10.2 3.7 6.4

Penetration Rate (%) 61.0 67.4 102.8

ARPU ($) 5.1 2.0 2.2

Number of Players (Mobile) 4 5 5

Etisalat Position 3 F1/M3 3

6.1 (2) 9.0 (2)

8.2 (2) 8.2 (2)

Higher Capex spend mainly due to Pakistan operations

4,862

23.3 25.1

27.6 27.6 28.5

FY'10 FY'11 FY'12 9M'12 9M'13

4,550 4,597 4,653

3,426

3,703 37% 33%

28%

19%

35%

FY'10 FY'11 FY'12 9M'12 9M'13

Revenue EBITDA %

1,038

917

1,094

944

833

24% 20%

24% 28% 22%

FY'10 FY'11 FY'12 9M'12 9M'13

CAPEX CAPEX/Revenue

Pakistan: Top-line and operating profit growth with improvement in margin

42

Enhanced profitability driven by continued revenue growth coupled with effective cost control measures

PTCL’s 9M’13 revenue increased by 8% compared to 9M’12

PTCL is the largest and fastest growing broadband service provider in Pakistan

— Launch of new broadband packages for wireline and wireless customers resulted in 37% increase in customers during 9M’13

Capacity of CDMA wireless network being increased by 100% with objective to provide quality service through expanded coverage in existing as well as un-served areas

Highlights

Subscribers (m)




Population (m) 181.6

GDP ($bn) 231.9

GDP Growth (%) 10.0


ARPU ($) 2.0


Etisalat Position Fixed 1 / Mobile 3

7.6

9.4

12.2 11.3

12.0

FY'10 FY'11 FY'12 9M'12 9M'13

2,141

2,549 2,775

2,066 2,087

17%

24% 26%

28%

22%

FY'10 FY'11 FY'12 9M'12 9M'13

Revenue EBITDA %

574

686

485

324

811

27% 27%

17% 16%

39%

FY'10 FY'11 FY'12 9M'12 9M'13

CAPEX CAPEX/Revenue

Africa: Deploying 3G networks to drive future growth Ivory Coast, Benin, Togo, Gabon, Niger, CAR(1), Tanzania, & Sudan

43

Strong subscriber acquisition mainly driven by growth in Ivory Coast, Benin and Togo

― Growth impacted by regulatory enforced SIM registration in Tanzania

Slower revenue growth in 9M’13 due to competitive pressures in Ivory Coast and currency devolution in Sudan

EBITDA margin impacted by introduction of a new tax on incoming international calls in West Africa and higher network rollout costs in 2013

Acquired Universal Mobile License in Benin and continued 3G network deployment in Ivory Coast

Highlights

Subscribers (m)



(1) CAR stands for Central African Republic. (2) Atlantique Telecom Countries are Benin, Central African Republic, Cote d’Ivoire, Gabon, Niger, Togo.

(3) Fixed line market data. Source: IMF, TeleGeography Reports, WCIS

Atlantique Telecom Countries(2) Tanzania Sudan

Population (m) 59.9 48.6 35.5

GDP ($bn) 62.9 28.2 59.9

GDP Growth (%) 6.7 6.8 -4.4

Penetration Rate (%) 66.3 54.1 13.3(3)

ARPU ($) 6.2 3.8 NA

Number of Players Between 2 and 7 5 2(3)

Etisalat Position In the top 3 in each country 4 1(3)

6.8

10.8

14.9 14.6 15.8

FY'10 FY'11 FY'12 9M'12 9M'13

852

2,034

2,957

2,148

2,386

(61%)

(22%)

6%

5%

-1%

FY'10 FY'11 FY'12 9M'12 9M'13

Revenue EBITDA %

895

1,300 1,533

1,148

952

105%

64%

52% 53%

40%

FY'10 FY'11 FY'12 9M'12 9m'13

CAPEX CAPEX/Revenue

Nigeria: Maintained Growth Rates in highly competitive market

44

Steady growth in subscriber base driven by innovative and unique offers

Double digits revenue growth despite MTR cut and stringent competitive environment

Lower EBITDA margin as a result of higher network costs supporting network expansion and higher marketing expenses

EBITDA margin impacted by non-recurring items in 2013. Adjusting for these items, EBITDA would have been 2%

Population coverage of network exceeding 77%

Capex focused on expanding 3G coverage and reinforcing network quality

Highlights

Subscribers (m)



Population (m) 169.1

GDP ($bn) 268.7

GDP Growth (%) 10.1


ARPU ($) 6.5

Number of Players 4

Etisalat Position 4


3%

15,789

19,771

23,311

16,633 17,792

38%

37% 36%

36% 38%

FY'10 FY'11 FY'12 9M'12 9M'13

Revenue EBITDA %

3,242 3,648

4,792

3,815

3,188

21% 18%

21% 23%

18%

FY'10 FY'11 FY'12 9M'12 9M'13

CAPEX CAPEX/Revenue

Saudi Arabia: Profitable Growth with Increasing Dividend Pay-out

45

Mobily maintained its strong performance and posted solid results in 9M’13

— Revenues grew Y/Y by 7% with EBITDA margin increasing by 1 points to 38%

— Capex spending focused on ensuring leadership in 3G and LTE

Dividend of AED 735 million received from Mobily for the first 9 months of 2013 in addition to 10% stock dividends related to Q4’12

Highlights

Mobily Dividends Paid

Macro and Market Snapshot


Population (m) 29.0

GDP ($bn) 727.3

GDP Growth (%) 8.6


ARPU ($) 25.5


Mobily Position 2

2.00

3.25

4.15

3.00

3.55

376

570

763

565

735

FY'10 FY'11 FY'12 9M'12 9M'13

DPS (SAR) Total Dividends to Etisalat (AED m)


2013 Outlook: Management’s Guidance(1)

46

Revenue Growth %

EBITDA Margin%

CAPEX / Revenue Ratio

17% - 18%

49% - 50%

15% - 17%

19%

50%

14%

(1) All figures represent consolidated numbers and include potential impact of consolidation of Pakistan operations in 2013

Financial Objective Outlook 2013 Actual 9M 2013

47

Etisalat Investor Relations Email: [email protected]

Website: www.etisalat.com/html/ir

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