39
Contents
Macro overview 5
Redefining our strategy 8
Our growth potential 12
FY 2019 highlights 27
Company snapshot 4
Financial highlights (2017-2019) 34
2
Disclaimer
This document has been prepared by Telecom Egypt (the “Company”) solely for the use at the analyst/investor presentation, held in connection with the Company. The information
contained in this document has not been independently verified. This document contains statements related to our future business and financial performance and future events or
developments involving Telecom Egypt that may constitute forward-looking statements. Such statements are based on the current expectations and certain assumptions of
Telecom Egypt's management, of which many are beyond Telecom Egypt's control. Such assumptions are subject to a number of risks and uncertainties. Should any of these risks or
uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results may (negatively or positively) vary materially from those
described explicitly or implicitly in the relevant forward-looking statement. Telecom Egypt neither intends, nor assumes any obligation, to update or revise these forward-looking
statements in light of developments, which differ from those anticipated.
This document does not constitute an offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares of the Company and neither it nor any
part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This presentation has been made to you solely for information
purposes and is subject to amendment. This presentation (or any part of it) may not be reproduced or redistributed, passed on, or the contents otherwise divulged, directly or
indirectly, to any other person or published in whole or in part for any purpose without the prior written consent of the Company.
3
Company snapshot
Heritage transformed
4
TE’s incorporation
• Founded in 1854 with the first telegraph line in Egypt
• Incorporated in 1998 replacing the former Arab Republic of Egypt
National Telecommunication Organization (ARENTO)
• Listed in 2005 on Egypt and London Stock Exchanges
• Acquired a 45% stake in Vodafone Egypt in 2003 to 2006
• Rebranded the retail business to WE in 2017 with the launch of
mobile services
Ownership: Highly diversified solid institutional shareholder base
Market Cap of USD 1.3bn | ETEL EY/ ETEL.CA (as of February 2020)
Free float
composition
Breakdown of
institutions
Government,
80%
Free float,
20%Institutional,
16%
Retail, 4%
USA34%
Europe21%
Egypt17%
GCC15%
South Africa
9%
ROW4%
Macro overview
5
26%
11%
19%
29%
3%
12%Illiterate
Literate
Primary
Secondary
High school
University degree
Demographic indicators
Young population to continue to drive growth
Illiteracy ↓ from 30% in 2016
74% of population is literate
Population (mn) Age distribution (% of population)
Educational attainment (% of population) Unemployment rate (% of population)
Source: CAPMAS 2019 censusSource: CAPMAS 2017 census
Source: CAPMAS 2017 census Source: Ministry of Finance
25%
19%
17%
15%
10%
8%
5%2%
0-9
10-19
20-29
30-39
40-49
50-59
60-69
70+
c2mn new customers in
the market every year
61% of population
below 30 years
13.0% 12.8% 12.7%12.0%
8.9%
2013/14 2014/15 2015/16 2016/17 2017/18
6
92.2
94.2
96.2
98.2
99.8
7.2% 8.4%
12.4%
13.9%
25.9%
32.3%31.9% 33.3%
19.9%
11.6%
10.9%
8.6%8.3% 8.9%
6.4%
2.6% 2.4%
9.8%
11.3%
12.3%
15.3%
17.3%
19.3% 18.3%
17.3%16.3%
14.8%
13.8%12.8%
Real GDP growth (%)
Macro indicators
A broad set of healthy indicators across the year
Average USD to EGP rate
CBE discount rate Core inflation (YoY)
Source: IMF Source: Central Bank of Egypt
Source: Central Bank of Egypt Source: Central Bank of Egypt
7
4.4 4.34.1
5.35.5
5.9 6.0 6.0 6.0
7.9 8.1 8.9 8.9
14.8
17.8 18.1
17.8 17.8 17.7 17.8 17.9 18.0 17.6 17.1
16.6 16.2
Redefining our strategy
8
Adel Hamed
Managing Director &
Chief Executive Officer
Mohamed Shamroukh
Senior Vice President
Chief Financial Officer
Mohamed Abo-Taleb
Vice President
Chief Commercial Officer
Essam Abdeldayem
Vice President for Human
Resources
Seif Allah Mounib
Vice President for International
Wholesale
Our leadership team
Caliber from the mobile & fixed industries with local & int ’l experience
Antar Kandil
Vice President
Chief Information Officer
Abdelsatar Elsheikh
Vice President for Regional
Affairs
Mohamed Alfowey
Vice President for Technical
Affairs9
Heading towards…
A telco demonstrating its ability to seize new opportunities
The premium
digital hubDigital WE
The leading
ICT provider
Offering our customers best
value, data-centric value
propositions
Expanding from an
established international
route to an eminent regional
digital hub
Embracing digital
transformation internally to
empower our customers &
employees
Financial &
Operational
Excellence
Expanding efficiency &
optimization measures to
enhance profitability
10
WE digital transformation
Our strategy is driven by creating a comprehensive digital ecosystem to optimize
resources and boost the ICT economy
Digital transformation ecosystem
Data centers
& cloud IOTDigital
platforms OTT
Digital transformation process
WE digital
strategy &
objectives
Digital team &
governance
Internal digital
transformation
Digital
market
disruption
Complete
digital
inclusion
Apps
& solutions
Cloud platforms
World class data center
facilities
Network connectivity
Submarine cables & fiber connectivity
‘WE Digital’
Capitalizing on our assets
11
Our growth potential
12
6,616
14,283
FY 2016 FY 2019
FY 2019
EGP 14.3bn
+27% YoY
• Underpenetrated data market leading to a
growing fixed & mobile customer base
• Improved broadband connectivity and continuous
demand for higher usage enhances ARPU
• Protocols with government entities for digital
transformation:
− NUCA
− Ministries i.e. schools project
− Digital transformation initiative to connect
Egyptian governorates with fiber
• New cities
Retail segment
Growth drivers at a glance
• Growing mobile customer base
• Growing fixed voice customers driven
by fixed broadband connectivity
Voice Data
Other
Retail revenue growth
( in EGP mn)
29%
CAGR
13
EGP 9.4bn
+33% YoY
EGP 3.6bn
+16% YoY
EGP 1.2bn
+14% YoY
Best value
recharge
platform
‘WE Internet’
(1st
FBB revamp) +
postpaid mobile
launch
Widening our retail portfolio
Moving beyond traditional telecom services
Sep 2016 Sep 2017 Feb 2018
Nov 2018 Aug 2018 Apr 2018
July 2019 Nov 2019 Coming next
4G mobile
license
acquisition
Prepaid
mobile
launch
Fully convergent
product
‘Indigo Plus’
‘Level Up’
PlayStation
packages
‘WE SPACE’
(2nd
FBB revamp)
‘WE Pay ’
WE digital wallet
‘WE IPTV’
1st
nationwide
IPTV license
14
WE SPACE
A new shift in our fixed broadband offering
Comparison of
the entry level bundle
Up to30 Mbps
EGP 120
140 GB
July 2019
Up to5 Mbps
EGP 110
100 GB
April 2018
Speed
Price
Quota
Launch date
15
2,809
3,382
4,070
5,237
5,807
982 1,057 1,127 1,297 1,469
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
WE
Others
3,791
4,439
5,197
6,535
7,276
6,555 6,465
7,145
7,865
8,760
31.1
28.7
29.6
30.5 31.2
27.0
29.0
31.0
33.0
35.0
37.0
39.0
0
1,0 00
2,0 00
3,0 00
4,0 00
5,0 00
6,0 00
7,0 00
8,0 00
9,0 00
10, 000
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Subscribers (in 000's)
ARPU
2,809
3,382
4,070
5,237
5,807
76.0
83.1
98.3
103.5
111.0
70.0
80.0
90.0
100.0
110.0
120.0
130.0
0
1,0 00
2,0 00
3,0 00
4,0 00
5,0 00
6,0 00
7,0 00
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Subscribers (in 000's)
ARPU
Market fixed broadband subscribers
(in 000’s)
Market fixed voice and data household penetration
WE fixed voice
Fixed services
Growing customer base with healthy ARPU
WE fixed broadband
16
28.7% 27.7%30.0%
32.4%
35.5%
16.6%19.0%
21.8%
26.9%
29.5%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Fixed line
Broadband
2,408 2,244 2,462 3,108 3,611
2,625 3,631
5,049
7,085
9,429
440
741
779
1,086
1,243
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Other
Data
Voice
25%
36%
27%
21%
2,204 3,096
4,456
6,370
8,448
421
536
593
716
981
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Managed Services
Broadband
Data revenue
(in EGP mn)
38%
39%
40%
33%
Retail revenue growth driven by data
(in EGP mn)
Fixed services (cont ’d)
Accelerating our fiber replacement project to grasp market opportunities
70% 85%
2018a 2019a 2020e
100%
Fiber access network capacity
(in 000’ homes)
% of households reached with fiber
(excluding the last mile)
17
5,180
9,692
12,608
17,567
27,715
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
38,354 39,622 44,082 39,647 40,028
33,056 33,883 34,117
29,475 28,098
22,236
33,900 32,300
27,500 26,400
2,300
3,861 5,129
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Mobile market subscribers
(In 000’s)
Mobile market
A growing customer base
*Etisalat restated its customer base starting FY 2016
3.3
Source: Operators’ disclosures
WE's mobile subscribers
(In 000’s)
Mobile data market subscribers
(in 000’s)
Source: MCIT & Operators’ disclosures
Mobile market voice and data penetration
18
3,861
4,247 4,260
4,575
5,129
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
102%
114%117%
102% 100%
33% 34%37% 39% 43%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Voice penetration
Data penetration
26,300 28,650
32,790 35,060
39,000
3,820 3,280
3,260 3,210
3,600
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
USB
Mobile data
Source: MCIT
7,334
11,522
FY 2016 FY 2019
EGP 3.0bn
-15% YoY
EGP 4.4bn
Flat YoY
• Largest international network footprint in the
region
• Preferred East-West international route
• Positioning Telecom Egypt as an eminent digital
hub
+39% YoY
Wholesale segment
Growth drivers at a glance
• Sole provider of international calls to MNOs
• 4-5 year agreements
Domestic
International Carrier Affairs
International Cables &
Networks
• Egypt’s infrastructure builder
• 3-10 year agreements
• Indirect play on data market growth
Wholesale revenue
( in EGP mn)
FY 2019
EGP 11.5bn
Flat YoY
16%
CAGR
19
EGP 4.2bn
+16% YoY
Egypt
Iraq
Indonesia
Thailand
Myanmar
Morocco
Algeria
France
Qatar
India
Pakistan
Iran
Oman
Yemen
Saudi Arabia
Turkey
Syria
Lebanon
Sudan
Ethiopia
Somalia
Libya
Mozambique
Madagascar
Tanzania
Kenya
Greece
Tunisia
Djibouti
Sri Lanka
Jordan
Maldives
Taiwan
Brunei
VietnamPhilippine
Japan
Korea
Belgium
UK
Singapore
Germany
China
Cyprus
Italy
Portugal
Eritrea
Bangladesh
Australia
U.A.E
Malaysia
SEAMEWE-3
SEAMEWE-4
FLAG
FALCON-HAWK
IMEWE
EIG
SEACOM
TATA
ALETAR/BRYTAR
TE North
GBI
Taba-Aqaba
AAE1
SEAMEWE -5
Alexandros
Trans border Terrestrial Cables with Libya & Sudan
MENA Cable
Our cable network
offers reach and reliability
20
47 62
338 207
910
165 236
368 386
458
467
655
961
2,316 913
128
173
439
588
704
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Cable Projects
Ancillary Services (O&M)
Capacity Sales
International Customer Support
6 6 19 12
54 21 23
21 22
27 61 65
54
130 54
17 17 25
33
42
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Cable Projects
Ancillary Services (O&M)
Capacity Sales
International Customer Support
76 41
62 45 47
311
277 212
204 214
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
International Direct Dialing (IDD)
Transit
Int’l Carriers revenue breakdown in EGP
(in mn)
International services
Growth across the majority of our business lines
Int’l Customers & Networks revenue breakdown in EGP
(in mn)
Int’l Carriers revenue breakdown in USD*
(in mn)
* Based on full year average USD exchange rates * Based on full year average USD exchange rates 21
582 410
1,099 801 788
2,396 2,794
3,769
3,623 3,595
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
International Direct Dialing (IDD)
Transit
Int’l Customers & Networks revenue breakdown in USD*
(in mn)
Agreements with domestic MNOs
Securing long-term revenue streams
Securing longer-term agreements with
domestic mobile operators
Boosting our wholesale revenue stream by
monetizing our infrastructure investmentsOur main goals 1 2
International Services 12bn
1.5bnTransmission Services 10.85bn
Transmission Services
International Services 3bn
3bn
1.5bn
International Services4bn
Transmission Services 1.5bn
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2028
1.5bn
1.5bn
3bn
22
669
2,833
FY 2016 FY 2019
23
Income from Vodafone
(EGP mn)
62%
CAGR
* Including the EGP 0.5bn from the VIS sale to Vodafone Group.
*
Vodafone investment pays off in 2019
• TE reached an agreement with Vodafone to collect
EGP 5.5bn, representing +90% of its share of
Vodafone’s retained earnings as of Mar 18.
• EGP 4.8bn was received in March 2019 while the
remaining EGP 0.7bn will be received in June 2020.
• The proceeds received in March were used to settle
TE’s EGP denominated debt.
EGP 4.8bn
EGP 0.7bn
EGP 0.5bn
Dividends distribution
• TE received an extraordinary dividend of EGP
0.5bn, representing its share of the Vodafone
International Services (VIS) sale to Vodafone Group.
• The proceeds were used to finance the extension
of TE’s early retirement program (ERP).
March 2019
June 2020
November 2019
2019 agreements & events
Strategic moves, paving the way for the future
Announced a change in the BoD by a decree from the Egyptian
Prime Minister.
2019 business calendar
Announced the BoD’s approval to proceed with a voluntary early
retirement program for TE employees.
Signed high-speed bitstream services agreement with Orange
Egypt.
Telecom Egypt ’s Ordinary General Assembly (GA) appointed its
BoD for a new term of three years. It approved the change of two
independent board members.
Signed two 10-year transmission and infrastructure agreements
with Vodafone Egypt valued at EGP 10.85bn and reached an
agreement on dividend distribution.
Signed MOUs with Huawei, Ericsson, Nokia, CISCO and Microsoft at
MWC Barcelona 2019 to assess and develop TE’s network.
Signed a binding letter of intent (LoI) with PEACE and its parent
HENGTONG OPTIC-ELECTRIC valued at USD 20mn offering PEACE
redundancy in exchange for competitive pricing on fiber optic
cables.
Published an all-encompassing integrated annual report about
2018 operations and strategic directions.
Signed a landing party agreement with Pakistan & East Africa
Connecting Europe (PEACE) Cable International Network Co. and
PCCW Global valued at USD 45mn.
24
The company launched ‘WE SPACE’, a new shift in its fixed
broadband offering in line with its large project to develop its
network capabilities and improve the quality of internet services in
Egypt.
Ap
rM
ar
Jul
Fe
bJa
nM
ar
2019 agreements & events (cont ’d)
Strategic moves, paving the way for the future
2019 business calendar
Signed an agreement with Banque Misr to launch ‘WE Pay ’. The
service is designed to enable customers to safely and securely
send, receive and store money using a smartphone application.
Signed two virtual fixed voice agreements and two bitstream
agreements with Etisalat Misr to enable it to provide fixed voice
services, utilizing Telecom Egypt’s network, and new VDSL
technology to its customers.
Telecom Egypt and the Administrative Capital for Urban
Development (ACUD) signed an agreement to build and operate
telecom networks in the new administrative capital and to provide
smart and security services networks.
Signed a strategic partnership agreement with Cable Network
Egypt (CNE) to provide Telecom Egypt’s customers with Internet
Protocol television services (IPTV) in collaboration with various
content providers.
25
WE launched its digital wallet under the commercial name 'WE
Pay', enabling its customers to enjoy a wide-range of electronic
payment facilities.
Jul
No
vSe
p
Telecom Egypt and the Saudi Telecom Company (STC) signed a
deal to provide STC with bundled capacities on Telecom Egypt's TE
North and MENA cables.
Signing an EGP 1.1bn contract for the 1st phase of the initiative to
connect governmental entities in 5 governorates (Luxor, Aswan,
South Sinai, Ismailia, and Suez) in addition to connecting other
governmental access points across Egypt with fiber
De
c
Vodafone Egypt developments
26
Vodafone Group announced that it has signed a
Memorandum of Understanding with Saudi Telecom
Company (STC) in relation to a potential sale of Vodafone's
55% shareholding in Vodafone Egypt to STC for a cash
consideration of USD 2.4bn.
The FRA asserted that the potential
acquisition is subject to the provisions
of Chapter Twelve of the Executive
Regulations of the Egyptian Capital
Market Law No. 95/1992 regarding
tender offers.
Vodafone Egypt contacted the
Egyptian Competition Authority (ECA) to
determine whether Telecom Egypt’s
right of first refusal granted to the
company in Vodafone Egypt’s articles
of association, if exercised, would be
compatible with the Competition
Protection Law.
Telecom Egypt’s BoD approved to
engage with EFG Hermes and Citi as
investment advisors and Al Tamimi &
Co. as its legal advisor.
Feb 05 Feb 13 Feb 19
Jan 29
2020 business calendar
27
FY 2019 highlights
FY 2019 results highlights
Retail revenue dominates the top line
25.8bn+13% YoY
5.8bn-0.7% YoY
Adjusted 7. bn
+21% YoY
4.4bn+33% YoY
Adjusted 5.0bn
+46% YoY
Revenue
(EGP bn)
EBITDA
(EGP bn)
Customers
(mn)
Net profit
(EGP bn)
Fixed
Mobile
Voice Data
EBITDA margin of 23%
Adjusted margin of 28%
Net profit margin of 17%
Adjusted margin 19%
8.8+11% YoY
5.8+11% YoY
5.1+33% YoY
Consolidated revenue grew 13% YoY, landing
at EGP 25.8bn, fuelled by higher data-related
revenues across Home, Enterprise and
Domestic business units.
Customer base grew across the board.
Mobile revenue constituted c20% of top line
growth.
EBITDA came in at EGP 5.8bn, flat YoY.
Excluding the ERP cost of EGP 1.3bn, EBITDA
would reach EGP 7.1bn, recording a margin of
28%, within our full year guidance.
Interest expense remained flat in spite of the
19% rise in gross debt resulting from the
successful debt restructuring, which led to an
effective interest rate of 7.1%.
Net profit reached EGP 4.4bn, +33% YoY,
driven by strong top line performance, higher
FX gains and higher investment income from
Vodafone. Normalizing for the ERP and the
sale of VIS, net income would have reached
EGP 5.0bn.
FY 2019: reaping the fruits of strong data
momentum and investments
* Adjusted for ERP total cost of EGP 1.3bn .
1 Education reform program
Pha
se
1Pha
se
2
Q3 2018: Connected 2,550 schools with fiber within 2
months, recognizing EGP 482mn.
Q1 2019: Provided data SIMs for students in their first year
of high school.
2 1st
phase of the digital transformation initiative
Pilo
tPha
se
1
Q1 2019: Connected government service buildings in
Port Said with fiber to provide citizens with digital
services.
Connecting 5 more governorates with fiber (Luxor, Aswan,
South Sinai, Ismailia, and Suez) in addition to connecting
other governmental access points across Egypt.
613kdata SIMs
4 daysto distribute the SIM
cards
8,000
TE employees
working on the
project
4,547
Access pointsTotal contract value
with due date 2020
further monetization
from service
subscriptions
further monetization
from connectivity
subscriptions
Projects highlights
Further steps towards nation-wide digital transformation
The offer: Data bundle price is EGP 5 for the 1st
GB then each student has to
subscribe to one of WE’s existing data bundles
EGP 392mn
Recognized revenue
during FY 2019
29
EGP 1.1bn
• D&A increased 36% YoY due to our expedited project to develop network
infrastructure.
• Operating profit, normalized for the ERP, increased 13% in spite of the
hike in D&A expenses due to strong operational growth.
• Income from VFE climbed 29% YoY on the back of high organic growth &
one-offs recognized in Q3 2019.
• Interest expense remained flat in spite of the 19% growth in gross debt on
the successful debt restructuring leading the effective interest rate to
decline to 7.1% from an adjusted 9.1% last year (after excluding the
syndicated loan’s administrative fees).
• FX gains of EGP 1.6bn neutralized interest and financing costs.
• Normalized for the ERP, employee costs increased on the reintroduction of
the loyalty pension fund, the bonus in Q1 and the annual increase in salaries.
• Advertising costs declined 10% YoY, representing 3% of top line.
• Call costs as a % of revenue remained stable YoY at 19%.
Income statement (FY 2019)
Re
ve
nue
EBITD
AO
the
r
OPEX
Ne
t p
rofit
• Retail revenue rose 27% YoY owing to higher data and voice revenues,
which constituted 68% and 17% of top line growth, respectively.
• Wholesale revenue came in at EGP 11.5bn, flat YoY, driven by higher
domestic revenue that is fuelled by the mounting demand for data
services by MNOs. This neutralized the decline in IC&N revenue due to the
base effect of the Bharti deal signed in 2018.
Exp
ense
s
No
n-o
pe
ratio
na
l
• EBITDA reached EGP 5.8bn, flat YoY. Normalized for the ERP, EBIDTA grew
21% recording a margin of 28%, within our guidance.
• Normalized for the ERP, the VIS sale and the syndicated loan’s admission
fees, net profit grew 46% YoY on FX gains, strong operational performance
and higher investment income from Vodafone.
Adj. refers to adjusted
*COGS exclude employee costs & call costs. S&D and G&A exclude employee costs & D&A
Note: All financial figures reported are based on the consolidated financials under The Egyptian Accounting Standards
In EGP mn FY 2019 FY 2018 YoY Q4 2019 Q3 2019 Q4 2018 QoQ YoY
Revenue 25,805 22,771 13% 6,793 6,316 5,413 8% 26%
Home 10,474 8,064 30% 2,817 2,717 2,215 4% 27%
Enterprise 3,809 3,215 18% 1,249 959 852 30% 47%
Domestic 4,155 3,571 16% 894 1,010 818 -11% 9%
ICA 4,383 4,424 -1% 1,002 1,111 1,077 -10% -7%
IC&N 2,984 3,496 -15% 830 519 450 60% 84%
Employee cost (7,757) (5,217) 49% (1,480) (2,066) (1,578) -28% -6%
Employee cost (Adj.) (6,490) (5,217) 24% (1,690) (1,594) (1,578) 6% 7%
Call costs (4,832) (4,295) 12% (1,168) (1,306) (1,123) -11% 4%
CoGS* (5,206) (5,371) -3% (1,483) (1,352) (1,563) 10% -5%
S&D* (1,499) (1,398) 7% (342) (336) (380) 2% -10%
G&A* (678) (615) 10% (187) (192) (221) -2% -15%
EBITDA 5,834 5,876 -1% 2,133 1,063 547 101% 290%
Margin 23% 26% (320 bps) 31% 17% 10% 1,457 bps 2,130 bps
EBITDA (Adj.) 7,100 5,876 21% 1,924 1,535 547 25% 252%
Margin 28% 26% 171 bps 28% 24% 10% 401 bps 1,821 bps
Other (expense) / income 321 147 119% 126 132 (79) -5% 261%
Depreciation (2,908) (2,021) 44% (884) (800) (506) 10% 74%
Amortization (697) (629) 11% (180) (191) (182) -6% -1%
Operating profit 2,549 3,373 -24% 1,196 204 (220) 486% 644%
Margin 10% 15% (493bps) 18% 3% -4% 1,437 bps 2,167 bps
Income from investments 2,833 2,201 29% 645 1,063 650 -39% -1%
Net finance (cost) / income 1,115 (288) 487% 2 355 2 -99% 21%
Net interest (exp.) / income (1,001) (1,024) -2% (292) (261) (439) 12% -34%
Tax (1,091) (958) 14% (370) (270) (200) 37% 85%
Net Profit 4,399 3,297 33% 1,179 1,089 (209) 8% 664%
Margin 17% 14% 257 bps 17% 17% -4% 12 bps 2,122 bps
EPS 2.10 1.50 40% 0.57 0.64 -0.23 -11% 348%
Revenue by business unit (FY 2019)
Retail services & specifically data drive revenue growth
Home &
Consumer DomesticEnterprise
International
Carriers Affairs
International
Customers & Networks
31
2,627
3,215
3,809
2017 2018 2019
+45.0%
+18.5%
3,304
3,571
4,155
2017 2018 2019
+25.8%
+16.4%
4,868
4,4244,383
2017 2018 2019
-10.0%
-0.9%
2,106
3,496
2,984
2017 2018 2019
+41.7%
-14.6%
5,662
8,064
10,474
2017 2018 2019
+85.0%
+29.9%
FY 2019
Home & Consumer Enterprise
Domestic International Carriers Affairs
International Customers & Networks
FY 2019 performance:
Retail revenue grew 27% YoY, representing 55% of top line with data revenue growing 33% YoY.
Home & Consumer increased 30% YoY on the back of higher data revenue, which constituted 85% of the business
unit’s total growth.
Enterprise climbed 18% YoY, mainly driven by the growing demand for managed services and fixed voice revenue
growth.
Mobile revenue grew 61%, driving 20% of overall top line growth on a growing customer base and healthy ARPU.
Wholesale landed at EGP 11.5bn, stable YoY, as domestic revenue surged (+16% YoY), neutralizing the decline in
IC&N (-15% YoY) revenue due to the base effect of the Bharti deal signed in 2018.
The continuing demand for data from MNO customers and our successful bitstream products that support their fixed
broadband growth drove Domestic Wholesale growth.
ICA came in almost flat YoY, despite the appreciation of the EGP against the USD, due to higher international
incoming traffic.
Q4 2019
3,159
4,731
7,336
8,499
12,720
5,294
…
26%
34%
40%37%
49%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
2,00 0
4,00 0
6,00 0
8,00 0
10,0 00
12,0 00
14,0 00
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Capex License Capex/sales
147
(2,603) (2,456)
(5,075)
(1,508)
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
1,597
4,338 4,649
3,496 2,991
1,704
1,258
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
4,249
5,199
2,609 3,312
6,088
8,028
9,665
5,294
1,420780 748 21% 24%
33%
35% 37%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
2,00 0
4,00 0
6,00 0
8,00 0
10,0 00
12,0 00
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Capex License Capex/sales
Cash flow analysis
Cash capex
(EGP mn)
Net cash from operating activities
(EGP mn)
Note: All financial figures reported are based on consolidated financials under The Egyptian Accounting Standards.
FCFF
(EGP mn)
In-service capex
(EGP mn)
* Including the one-off settlement payment to Etisalat of EGP 919mn and the EGP 784mn representing the settlement of the
MENA cable loan
** Including dividends received from Vodafone of EGP 5.1bn
* Including the one-off settlement payment to Etisalat of EGP 919mn and the EGP 1.78bn for the acquisition of MENA
cable
** Including ERP cost of EGP 1.3bn
Access Network
Transmission
International cable
Customer care
Others
62
(97)
1,191
797 871
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
2,587 1,180 638
998
1,459
-389 -3,342
-7,293
-13,854 -16,452
-2,197 2,161 6,656 12,855 14,993
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Net debt
Cash Total debt
-0.6x
0.6x
1.3x
2.2x 2.1x
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Balance sheet highlights
FCFE
(EGP mn)
Net debt
(EGP mn)
Net debt/ EBITDA
(Based on annualized EBITDA)
Breakdown of Capex in-service
* Normalizing EBITDA for ERP total cost of EGP 1.3bn.
Financial highlights (2017-2019)
34
Revenue
(EGP mn)
EBITDA
(EGP mn)
Net profit
(EGP mn)
Operating Profit
(EGP mn)
Financial highlights
Double digit EBITDA growth helps maintain net profit in spite of heavy investments
35
18,567
22,771
25,805
FY 2017 FY 2018 FY 2019
+39.0%
+13.3%
5,184
5,8765,834
FY 2017 FY 2018 FY 2019
+12.5%
-0.7%
2,023
3,373
2,549
FY 2017 FY 2018 FY 2019
+26.0%
-24.4%
3,052
3,297
4,399
FY 2017 FY 2018 FY 2019
+44.1%
+33.4%
* EPS after appropriations
Historical 3 year income statement summary
Note: All financial figures reported are based on the consolidated financials under the Egyptian Accounting Standards
in EGP mn 2017 2018 2019Growth y/y
2018 2019
Revenue 18,567 22,771 25,805 23% 13%
Home & Consumer 5,662 8,064 10,474 42% 30%
Enterprise 2,627 3,215 3,809 22% 18%
Domestic Wholesale 3,304 3,571 4,155 8% 16%
International Carriers 4,868 4,424 4,383 -9% -1%
International Customers & Networks 2,106 3,496 2,984 66% -15%
Total employee cost (5,061) (5,216) (7,757) 3% 49%
Call costs (4,152) (4,295) (4,832) 3% 12%
COGS (excl. above expenses) (3,138) (5,371) (5,206) 71% -3%
S&D (excl. salaries, D&A) (533) (1,398) (1,499) 162% 7%
G&A (excl. salaries, D&A) (499) (615) (678) 23% 10%
EBITDA 5,184 5,876 5,834 13% -1%
Margin 28% 26% 23% (212 bps) (320 bps)
Other (income)/expenses (1,056) 147 321 114% 119%
Depreciation (1,841) (2,021) (2,908) 10% 44%
Amortization (264) (629) (697) 138% 11%
Operating profit 2,023 3,373 2,549 67% -24%
Margin 11% 15% 10% 391 bps (493 bps)
Income from investments 2,337 2,201 2,833 -6% 29%
Net finance (cost)/income (382) (288) 1,115 -25% 487%
Net interest (expense)/income (264) (1,024) (1,001) 288% -2%
Tax (659) (958) (1,091) 45% 14%
Net profit 3,052 3,297 4,399 8% 33%
Margin 16% 14% 17% (196 bps) 257 bps
EPS 1.38 1.50 2.10 9% 40%*
36
0.41
1.65
(0.11) 0.36
2.79
0.75
1.00
0.25 0.25 0.25
(0 .50)
-
0.5 0
1.0 0
1.5 0
2.0 0
2.5 0
3.0 0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
EPS
DPS
1.40
1.20
1.38 1.50
2.10
0.41
1.65
-0.11
0.36
2.79
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Consolidated
Standalone
Dividend analysis
We aim to distribute a continuous stream of dividends, balancing distribution with
the reinvestment of our cash flows in Capex, which we view as the pillar for growth
EPS after appropriations
(in EGP)
EPS before appropriations
(in EGP)
Note: All financial figures reported are based on consolidated & standalone financials under The Egyptian Accounting Standards.
Payout ratio
(%)
Dividend distribution on standalone financials (based on regulations)
(in EGP)
37
1.76
1.56
1.79 1.93
2.58
0.74
1.99
0.27
0.73
3.18
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Consolidated
Standalone
54%
83%
18% 17%12%
182%
60%
236%
69%
9%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Consolidated
Standalone
Our performance in context
Adjusted KPI’s meet our guidance in light of heavy investments
Revenue Growth
YoY
EBITDA margin (%)
CAPEX / sales (%)
FY 2019
actual
13%
23%
In-service: 49%
Cash: 37%
Low double
digit
Mid to high 20s
In-service: 30%
FY 2019
adjusted
%
28%
In-service: 49%
Cash: 37%
FY 2020
budget
* Normalizing EBITDA margin for the ERP total cost of EGP 1.3bn.
FY 2019
budget
Mid to high
single digit
Mid to high 20s
In-service: 30%
Thank you
Investor relations team
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