emirates telecommunications · pdf fileptcl, pakistan licence type mobile, fixed and internet...

1

Etisalat Group

10th Annual EFG Hermes One on One Conference 2014

March 10th – 11th , 2014 - Dubai

Etisalat Group

ADX Conference

18th – 19th March 2014, New York

Agenda

2

1. Etisalat at a Glance

2. 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.

3

Disclaimer

1. Etisalat at a Glance

Etisalat Snapshot

5

148 million Aggregate Subscribers(1)

10.6 USD billion Revenue

60% Owned by Emirates Investment Authority(2)

1.5 USD billion Dividend

15 Countries in Operation

5.1 USD billion EBITDA

680 million People Under Licence

1.9 USD billion Net Profit

Aa3/AA-/A+ High Investment Grade Rating

16 %

Capex Intensity

1.7 USD billion Capex

26 USD billion Market Capitalisation

Note: Based on 2013 actual financials and operating metrics. (1) Aggregate subscribers including subsidiaries and associates. (2) 100% owned by Federal Government of the United Arab Emirates.

24 28

17 19

2012 2013

Aggregate Consolidated

58 67

33 39

2012 2013

Aspiring to be the most admired emerging markets telecom group

139 148

2012 2013

Subscriber (m)

Revenue (AED bn)

EBITDA (AED bn)

Robust EBITDA growth resulting in one of the best EBITDA margins in the telecom sector

Further cost efficiency and optimization can support margin levels

9 million net new customers joined Etisalat Group increasing our subscriber base to 148 million

Continued subscriber acquisition expected mainly in Africa and Asia, as voice opportunities still exist

Strong revenue growth experienced in our markets supported by quality network, innovative products and attractive promotions

Reinforced market leadership in the UAE

Launched m-commerce services in nine new operations to reach eleven countries

16%

18%

16%

12%

Consolidated

Growth Y/Y % Aggregate

Growth Y/Y %

7%

6

Investing in state of the art technologies while focusing on shareholders return

CapEx (AED bn)

EPS & DPS (AED) / DY (%)

Increased returns to shareholders

Dividends payout ratio exceeding 78%

One of the highest dividends yield in the region

Network quality a key differentiator for profitable growth

Continued major strategic investments for future growth ― expanded LTE and Fiber networks in UAE and Saudi Arabia ― Acquired and deployed 3G networks in Asia and Africa

Best network quality in the UAE, Egypt, Nigeria and other markets

0.85 0.90

0.7 0.7

2012 2013

EPS DPS

8

13

4

6

2012 2013

Aggregate Consolidated

7.3% 5.8%

59%

52%

Consolidated

Growth Y/Y % Aggregate

Growth Y/Y %

Dividend

Yield % 7

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

8

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

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

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

4

5

2

$92bn

$36bn

$29bn

$33bn

$32bn

$26bn

$23bn

$19bn

$19bn

$17bn

SABIC

QNB

Al Rajhi

STC

Industries Qatar

Etisalat

Kingdom

Mobily

NBAD

FGB

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

10

$36bn

$33bn

$26bn

$19bn

$19bn

$17bn

$12bn

$11bn

$11bn

$11bn

$10bn

$7bn

$4bn

$4bn

$3bn

MTN

STC

Etilsalat

Mobily

Bharti

Vodacom

Ooredoo

Turkcell

Turk Telecom

Maroc Telecom

Zain

Du

Telecom Egypt

Orascom

Wataniya

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

Source: Bloomberg Data as at 06-March-2014

(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:

148 million

Covered Population:

680 million

Operating Countries:

15

Consolidated 2013 Revenue:

AED 39 billion

Consolidated 2013 EBITDA:

AED 19 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)

Note: Etisalat market positions per WCIS

Consolidated 2013 Net Profit:

AED 7 billion

2

Strong Financial Profile and Consistent Track Record of Shareholder Remuneration

12

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

3.6

4.3 4.7 4.7

5.5 5.5

2008 2009 2010 2011 2012 2013

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

0.6 0.6 0.6 0.6 0.7

3

7.5

10.5

13.0

2011 2012 2013

13% 13%

16%

2011 2012 2013

3.3

8.1

9.6

2011 2012 2013

41.5% 48.8%

62.2%

81.2% 82.1% 78.2%

2008 2009 2010 2011 2012 2013

0.7

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

13

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

4

0.21x

0.48x 0.51x

2011 2012 2013

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

14

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

5

Hatem Bamatraf Chief Technology Officer Etisalat Group Appointed CTO in September

2013

Prior to this appointment, was Executive VP of Enterprise Business at Du

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

15

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

Own and manage controlling stakes in well positioned operators in

target markets and ensure successful integration of

new acquisition, balancing growth and returns

Differentiated Service Offering

Provide differentiated,

innovative telecom service, media and

entertainment offerings – leveraging broadband

Infrastructure and network of partnerships whilst defending core

business (voice

Superior Customer Experience

Serve customers pro-

actively and consistently, with a common set of

brand values based on in-depth customer

understanding and trusted relationships

Operational

Excellence and Efficiency

Manage with a strong focus on efficiency and

effectiveness in all operational and

support processes at Group and in OpCos

“One Company”

Operate consistently across portfolio

with a common set of processes and systems

leveraging Etisalat Group scale economies

Str

ate

gic

Pil

lars

16

Our OpCo portfolio: Further growth potential in several sizeable markets

CA

R A

fgh

an

ista

n

Sri

La

nk

a

27%

CD

I

Su

da

n (

fixed

)

8%

Tan

zan

ia

16%

Pakis

tan

(fi

xed

)

85%

UAE (fixed) Pakistan (mobile)

20% 16%

Ben

in

Ga

bo

n

Nig

er

To

go

Egypt (mobile)

29%

UAE (mobile)

64%

Nigeria (mobile)

11%

67%

KSA (mobile)

38%

Etisalat OpCo value share (%)

Market Value vs. Etisalat OpCo \value share (market in USD billion, OpCo value share in %) (2013)*

Note: Market share in certain markets are based on estimates as not all market players release end of year results

17

Update on Maroc Telecom transaction

Etisalat and Vivendi have signed the SPA for the acquisition of Vivendi’s 53% stake in Maroc Telecom on 4 November 2013

Etisalat to pay MAD 92.6 per share, payable in Euro 3.9 bn at Closing

6.2 x 2013 EV/EBITDA

Etisalat to also pay cash for Vivendi’s share of the 2012 dividends Euro 0.3 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 before end of May 2014

January 17th

Etisalat submitted non binding offer

April 24th

Etisalat submitted binding offer

May 28th

Shareholders approval for financing

July 23rd

Vivendi grants Etisalat

exclusivity

May 2014

Expected closing

Nov4th

Etisalat and Vivendi

sign SPA

Overview of Maroc Telecom

18

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

34.7m mobile subscribers, USD 8.5/month mobile ARPU, 1.6mn fixed-line subscribers, 837k broadband

subscribers in Morocco

€2.5bn 2013 revenues, € 1.4bn 2013 EBITDA - 57% EBITDA margin

Dual listed on Euronext Paris and Casablanca stock exchange

Strong local management with significant telecom operating experience

Strategic rationale

19

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 (46m

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

Priorities in 2014

Deliver on 2014 financial outlook

Reinforce market leadership in the UAE and Pakistan

Be the operator of choice across all market segments in the core markets

Tap into the ICT potential in our prime markets

Increase value share in the high value customers and enterprise segments

Continue to invest in network quality for future growth and differentiation

Grow m-commerce and services digital revenue streams

Complete acquisition of 53% stake in Maroc Telecom

Improve synergy value across the footprint (Procurement, wholesale, Roaming, Customer Experience)

1

2

3

4

5

6

7

8

9

20

2. Financial Review

Etisalat Group

22

Q4’12 Q3’13 Q4’13 QoQ

Growth YoY

Growth FY’12 FY’13

YoY Growth

Subs (m) (1) (2) 139 144 148 +3% +7% 139 148 +7%

Revenue (AED m) 8,479 9,594 9,774 +2% +15% 32,946 38,853 +18%

EBITDA (AED m) 4,279 4,617 4,372 -5% 2% 16,855 18,901 +12%

EBITDA Margin 50% 48% 45% -3pp -6pp 51% 49% -3pp

Net Profit 854 1,825 1,453 -20% +70% 6,742 7,078 +5%

Net Profit Margin 10% 19% 15% -4pp +5pp 20% 18% -2pp

EPS (AED) 0.11 0.23 0.18 -20% +70% 0.85 0.90 +5%

Strong Y/Y subscriber growth across most operations

Solid revenue growth driven by strong performance in the domestic market and consolidation of operations in Pakistan

EBITDA margin declined Y/Y mainly due to higher proportion of low margin handsets and higher interconnection costs

Despite higher depreciation charges, taxes and lower finance income, net profit improved due to higher share of results and lower impairment and other losses

(1) Subscriber numbers calculated as aggregate number of GSM, CDMA, fixed, fixed broadband and WLL lines generating revenue during the last 90 days.

Highlights

Domestic vs. Int’l

32,946

38,853 2,017

(333)

4,705

(499)

FY'12 UAE Egypt Asia Africa Other FY'13

18

Group Revenue

23

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

In FY’13, consolidated revenues grew by 18% Y/Y attributed to strong performance of the UAE operations and Asia Cluster

Revenues from international operations grew by 47% and contributed 36% of consolidated revenues for FY’13.

— Revenue growth in Egypt impacted by currency devaluation

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

— Revenue growth in Africa Cluster is flat impacted by currency devaluation in Sudan and competitive pressure in Ivory Coast

Highlights

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

Revenue by Cluster (FY’13)

UAE 64%

Int’l 36%

Others <1%

International

8,479 9,594 9,774

32,946

38,853

3%

20% 15%

2%

18%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue YoY growth %

Pakistan 34%

Egypt 34%

Afgh. 8%

AT 16%

Others 2%

Group EBITDA

24

In 2013, consolidated EBITDA grew to AED 18.9 bn representing Y/Y growth of 12%

EBITDA margin declined by 2 points to 49% mainly due to higher cost of sales and interconnection costs and diluted impact of consolidation of operations in Pakistan

EBITDA of consolidated international operations increased Y/Y by 41%, resulting in 22% contribution to Group EBITDA

— Egypt impacted by currency devaluation and higher operating costs

— Asia Cluster benefited from the consolidation of Pakistan

— Africa Cluster impacted by higher cost of sales, network costs, operating expense and currency devaluation

4,279 4,617 4,372

16,855 18,901

50% 48%

45% 51% 49%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

EBITDA EBITDA Margin

16,855

18,901

(388)

1,737

(176)

281

FY'12 UAE Egypt Asia Africa Other FY'13

592

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

Highlights

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

EBITDA by Cluster (FY’13)

Domestic vs. Int’l International

Egypt 40%

Pakistan 41%

AT 12%

Others

6%

UAE 74%

Inter- National

22%

Others 4%

Group CAPEX

25

1,470 1,269 2,148

4,164

6,334

17% 13%

22%

13%

16%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue

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

In 2013 Consolidated Capex increased Y/Y by 52% resulting in a Capex/Revenue ratio of 16%. This increase was mainly due to international operations

Consolidated Capex was impacted by consolidation of operations in Pakistan and acquisition of Universal Mobile License in Benin. Adjusting for these, Capex/Revenue ratio would have been 12%

Capital investment in the UAE focused on leadership in network coverage and ensuring best quality mobile and fixed networks

Capital investment in international operations grew by 94% Y/Y and represented 67% of total capex in 2013:

− Lower capex spend in Egypt

− Asia Cluster impacted by consolidation of Pakistan operations representing 28% of Group consolidated capex

− Substantial increase in Africa Cluster due to acceleration in network deployment in Ivory coast and Benin

Highlights

CAPEX by Cluster (FY’13)

Domestic vs. Int’l International

Afgh

. 4%

Inter- National

67%

UAE 32%

Others <1%

Pakistan 33%

Egypt 29%

AT 28%

Others 10%

Repayment Schedule (AED m) Net cash position (AED m) FY’12 FY’13

Operating 10,486 12,974

Investing (225) (4,854)

Financing (6,327) (6,585)

Net change in cash 3,934 1,535

Effect of FX rate changes 28 (19)

Ending cash balance 13,934 15,450

Borrowings by Operation FY’13 (AED m)

1,782 1,635

736 579

464 351 324

Egypt AT Afgh. EIP Pakistan Tanzania Sri Lanka

Group Balance Sheet & Cash Flows

26

Balance Sheet (AED m) Dec’12 Dec’13

Cash & Cash Equivalent 13,934 15,450

Total Assets 84,606 85,716

Total Debt 5,806 5,872

Net Cash 8,128 9,579

Total Equity 49,913 49,593

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

(2) Advances from non controlling interest from minority shareholders of Etisalat Pakistan International.

(1) (2)

1,405

1,112

3,355

FY'14 FY'15 FY'16 & Beyond

Group Dividends: Proposed dividends for 2013 of AED 70 fils per share

27

Dividend Payout Ratio (%) Dividend Yield (1)

Dividends Per Share (AED) Cash Dividends (AED m)

1,977 1,977 2,767

2,767 3,558

2,767

2011 2012 2013

Interim Final

5,535 5,535

4,744

6.1%

7.3%

5.8%

2011 2012 2013

0.60

0.70 0.70

2011 2012 2013

81.2% 82.1% 78.2%

2011 2012 2013

(1) Dividend yield is based on share price as of August 15th 2013 and March 3rd 2014

Proposed dividends are subject to the shareholders approval on the AGM scheduled on March 26th, 2014

Final dividends payment will commence on April 13th, 2014

14.0

19.0

32.9

Domestic Regulated Revenues

Non-Telecom and Int’l revenues

Total Revenues FY’12

2.9

6.4

Royalty FY’12 Foreign taxes

0.0

Royalty on Int’l net

profits @ 35%

0.9

Royalty on domestic net

profits @ 35%

2.7

Royalty on regulated domestic

revenues @ 15%

Federal Royalty Computation FY 2012 & FY 2013

19.0

19.9

38.9

Domestic Regulated Revenues

Non-Telecom and Int’l revenues

Total Revenues FY’13

6.1

3.0

Royalty FY’13 Foreign taxes

0.1

Royalty on Int’l net

profits @ 35%

0.9

Royalty on domestic net

profits @ 35%

2.3

Royalty on regulated domestic

revenues @ 15%

Ro

ya

lty F

Y’1

3 (A

ED

bn

) R

oya

lty F

Y’1

2 (A

ED

bn

)

29

Country by Country Financial Review

UAE: Operational excellence driven by focus on execution

30

Q4’12 Q3’13 Q4’13 QoQ

Growth YoY

Growth FY’12 FY’13

YoY Growth

Subs(1) (m) 9.0 10.2 10.4 +2% +16% 9.0 10.4 +16%

Revenue (AED m) 5,851 6,165 6,288 +2% +7% 22,747 24,763 +9%

EBITDA (AED m) 3,398 3,578 3,361 -6% -1% 13,456 14,047 +4%

EBITDA Margin 58% 58% 53% -5pp -5pp 59% 57% -1pp

Net Profit 1,448 1,575 1,461 -7% +1% 5,907 6,094 +3%

Net Profit Margin 25% 26% 23% -2pp -2pp 26% 25% -1pp

CAPEX 530 404 508 +26% -4% 1,795 2,014 +12%

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

Solid double digit Y/Y growth in subscribers driven by mobile and eLife

segments

Strong Y/Y revenue growth driven by higher data, e-life, and mobile market-

share winback

EBITDA margin was impacted by higher cost of sales; international

interconnection, device costs, and channel commissions

Net profit improvement Y/Y despite higher depreciation and lower interest

income;

Capex/Revenue ratio is stable at 8% - focus on capacity enhancement,

network expansion, and 4G rollout

(1) Subscriber numbers calculated as aggregate number of GSM, fixed, fixed broadband and eLife lines generating revenue during the last 90 days.

Highlights Macro and Market Snapshot (2013)

Population (m) 9.4

GDP per Capita($) 45,745

GDP Growth (%) 4.1

Penetration Rate (%) M 191; F 25

ARPU ($) 31.0

Number of Players 2

Etisalat Position 1

Source: IMF, TeleGeography Reports, BMI, WCIS

1.11 1.25 1.31

5.96 7.01 7.14

136 124 122

Q4'12 Q3'13 Q4'13

Postpaid Prepaid Blended ARPU

UAE: Subscriber Growth in High Value Segments

31

1.10 1.06 1.04

107 108

133

Q4'12 Q3'13 Q4'13

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)

0.51 0.65 0.67

341 363 372

Q4'12 Q3'13 Q4'13

E-Life (2P & 3P) ARPL

0.81 0.89 0.90

429 458 464

Q4'12 Q3'13 Q4'13

Fixed BB ARPL

53.8% 46.2%

UAE: The Leading Telecom Operator

32

Mobile Market Share (%)

Subscribers

Fixed Market Share(1) (%)

Revenue Subscribers Revenue

FY’13 EBITDA Margin (%) Q4’13 ARPU (AED)

Mobile Fixed

Total:15.7m Total: AED 20.4 bn Total:2.0m Total: AED10.2bn

Source: Latest company filings (1) Fixed line subscribers include Etisalat fixed broadband and eLife double and triple play subscribers.

83.8%

16.2%

57.0%

39.7% 122

106

1

133

1

NA

86.0%

14.0%

63.7% 36.3%

Egypt: Maintained growth in local currency despite challenging macro environment

33

Maintained subscriber growth despite economic slowdown

Double digit revenue growth Y/Y in local currency due to an increase in the post-paid customer base, data segment and handset sales;

Growth in reporting currency impacted by currency devaluation

EBITDA margin impacted by higher proportion of low margin handset sales, higher network costs and marketing expenses and one-off provision for disputes on interconnection rates

― Adjusting for this item, EBITDA in 2013 would have been 36%.

Capital spending focused on network expansion and reached 26% of revenue in 2013.

Highlights

Total Market Subscribers (1) (m)

Macro and Market Snapshot (2013)

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

83

97 97

17%

24% 24%

FY'11 FY'12 FY'13

Subscribers Market Share %

Population (m) 83.0

GDP per Capita($) 3,134

GDP Growth (%) 1.9

Penetration Rate (%) 118

ARPU ($) 5.1

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

1,303 1,115 1,335

5,075 4,742

47%

37%

30%

39%

34%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue EBITDA %

621

362 479

1,174 1,229

48% 32% 36%

23% 26%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue


38% 36%

34.1

35.8

36.3

FY'11 FY'12 FY'13

Asia: Steady margin improvements Afghanistan, Pakistan(1) and Sri Lanka

34

Slow down in Subscriber acquisition

In 2013 Asia cluster benefited from the consolidation of operations in

Pakistan with revenue growth for the year increasing three-fold to AED 6.3

billion. Excluding Pakistan:

— Revenue growth Y/Y in 2013 would have been negative 4%

— EBITDA margin would have been 15%

Higher Capex mainly due to operations in Pakistan

Highlights

Subscribers (m)



(1) Consolidation of Pakistan operations effective 1 Jan 2013.

Afghanistan Pakistan Sri Lanka

Population (m) 30.6 184.0 21.3

GDP per Capita ($) 770 1,223 3,140

GDP Growth (%) 7.5 3.6 6.4

Penetration Rate (%) 72 M 73 / F 3 113

ARPU ($) 5.0 2.2 2.4

Number of Players (Mobile) 4 5 5

Etisalat Position 3 F1/M3 3

396

1,569 1,407 1,564

6,269

15%

27% 31%

11%

31%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue EBITDA %

126 298

714 566

1,801

32%

19%

51%

36%

29%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue


25.1

27.6

28.2

FY'11 FY'12 FY'13

Pakistan: Top-line expansion and cost efficiencies

35

Y/Y growth in subscribers base driven by mobile and EVO segments

Single digit revenue growth in local currency mainly driven by increase in data revenues and international clearing house (ICH) operations

― Revenue growth in 2013 was negatively impacted by newly introduced Government sales tax on international incoming traffic

Margin impacted by GST and higher network and marketing expenses

In 2013, Capex spending increased Y/Y by 27% mainly due to spectrum acquisition for EVO, resulting in a capital intensity ratio of 29%

3G/4G licenses auction expected mid April 2014

Highlights

Subscribers (m)



Population (m) 184.0

GDP per Capita ($) 1,223

GDP Growth (%) 3.6

Penetration Rate (%) M 73 / F 3

ARPU ($) 2.2

Number of Players (Mobile/ Fixed) M 5 / F 15

Etisalat Position Fixed 1 / Mobile 3

1,281 1,200

1,057

4,653 4,761

42% 37% 39%

28%

35%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue EBITDA %

315

189

559

1,094

1,392

25%

16%

53%

24% 29%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue


9.4

12.2 11.9

FY'11 FY'12 FY'13

Africa: Investing in 2G & 3G networks Ivory Coast, Benin, Togo, Gabon, Niger, CAR(1), Tanzania, & Sudan

36

Subscriber growth impacted by SIM registration in Tanzania. However, maintained strong subscriber acquisition in Benin, Togo and Gabon.

Revenue growth Y/Y is flat impacted by operations in Ivory Coast & currency devaluation in Sudan

In 2013 EBITDA margin declined Y/Y by 7 points due to non-recurring items/provision in Atlantique.

― Adjusting for these items, EBITDA margin would have been 22%

Significant increase in capital investment due to acquisition of Universal Mobile License in Benin and acceleration of network deployment in Benin and Ivory Coast.

― Adjusting Capex for the Universal Mobile license acquisition in Benin, Capex / revenue would have been 31%

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, BMI, WCIS

Atlantique Telecom Countries(2)

Tanzania

Sudan (3)

Population (m) 62.5 50.0 34.0

GDP per Capita ($) 3,299 679 1,450

GDP Growth (%) 5.7 7.2 1.4

Penetration Rate (%) 65 54 1

ARPU ($) 6.0 4.4 4.8

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

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

709 699 706

2,775 2,793

19% 18%

10%

26%

19%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue EBITDA %

162 184

429 485

1,240

23% 26%

61%

17%

44%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue

22% 23%

31%

10.8

14.9

17.0

FY'11 FY'12 FY'13

Nigeria: Network quality driving customer and revenue growth

37

Subscriber base grew Y/Y by 14% driven by new products

Double digit revenue growth of 16% despite MTR cut, driven by subscriber acquisition and data segment

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

― EBITDA margin in 2013 impacted by non recurring items during Q3’13; Adjusting for these items, EBITDA margin would have been 4%

Capital spending in 2013 focused on network quality and coverage expansion

Highlights

Subscribers (m)



Population (m) 173.6


GDP Growth (%) 6.7


ARPU ($) 6.9

Number of Players 4

Etisalat Position 4


809 822 935

2,957

3,341

6%

(9%)

4%

6%

1%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue EBITDA %

384 378 536

1,533 1,487

48% 46%

57% 52%

45%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue

2%

4%

38

6,660 6,343 7,103

23,255 24,838

38% 37% 36%

36% 37%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

Revenue EBITDA %

955 1,114 1,435

2,571

5,319

14% 18%

20%

11%

21%

Q4'12 Q3'13 Q4'13 FY'12 FY'13

CAPEX CAPEX/Revenue

Saudi Arabia: Profitable Growth with Increasing Dividend Pay-out

Mobily maintained its strong performance and posted solid results in 2013

— Revenues grew Y/Y by 7% with EBITDA margin increasing by 1 point to 37%

— Data revenues represents 28% of total revenues for FY2013 and is expected to exceed 32% in 2014

Capex spending focused on ensuring leadership in 3G and LTE

― 4G network coverage is 80% of population compared to 3g of 96%

Dividend of AED 994 million received from Mobily for FY 2013 in addition to 10% stock dividends related to Q4’12

Highlights

Mobily Dividends Paid

Macro and Market Snapshot


Population (m) 29.0


GDP Growth (%) 3.8


ARPU ($) 18.3

Number of Players (Mobile) 3

Mobily Position 2

3.25

4.15

4.80

FY'11 FY'12 FY'13

DPS (SAR)

Source: IMF, TeleGeography Reports, WCIS

803

600

Total dividends to Etisalat (AEDm)

994

2013 Actual Against Guidance (1) : Delivered on financial guidance

39

Revenue Growth %

EBITDA Margin%

CAPEX / Revenue Ratio

17% - 18%

49% - 50%

15% - 17%

18%

49%

16%

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

Financial Objective Guidance 2013 Actual FY 2013

2014 Outlook (1) : Management’s Guidance

40

Revenue Growth %

EBITDA Margin%

CAPEX / Revenue Ratio

2% - 3%

47% - 49%

16% - 19%

Financial Objective Outlook 2014

(1) All figures represent consolidated numbers and does not include any impact from a potential M&A transaction during 2014. (2) Capex / Revenue Ratio guidance does not include potential acquisition of 3G/4G licenses in Pakistan.

41

Etisalat Investor Relations Email: [email protected]

Website: www.etisalat.com/html/ir

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