H1 2017 TELECOM MARKET OVERVIEW 4

PERFORMANCE UNDER REVIEW –H1 2017 6

FULLY INTEGRATED OPERATIONS & OTHER INVESTMENTS 12

APPENDICES 14

Content 3 Disclaimer

This document has been prepared by (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 and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information set out herein is subject to updating, completion, revision, verification and amendment and such information may change materially. The Company is under no obligation to update or keep current the information contained in this material or in the presentation to which it relates and any opinions expressed in them is subject to change without notice. None of the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document or its contents, or otherwise arising in connection with this document.

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 your information and background 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 (excluding the relevant person’s professional advisors) or published in whole or in part for any purpose without the prior written consent of the Company.

This presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm analysts expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation. Egypt Telecom Market Overview 5 Telecom Market– Growing Market

ADSL Subscribers Base te’s Subscribers Breakdown as at 30th June. 2017 (In 000’s Subscribers) (In 000s Subscribers) Population Penetration (7.2%) Home Enterprise Household Penetration ( 33.6) te 4,770 Others 4,200 3,652 3,509 3,183 2,871 1,077 1,063 1,136 2,391 2,445 1,082 1,109 5,952 1,832 5,639 5,573 5,535 1,472 5,159

919 1,039 1,064 1,017 1,118 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 Mobile & USB Modem Subscriptions In Egypt* (In Millions)

Mobile Internet Subscriptions USB Modem Subscriptions

28.65 30.45 25.88 27.37 26.18 Mobile Market Subscribers Base* * (In 000’s Subscribers) Population Penetration (107.5%)

3.52 3.41 3.34 3.28 3.30

Jan. / Mar. 2016 Apr./Jun.2016 Jul./Sep.2016 Oct. / Dec.2016 Jan. / Mar.2017 23,893 24,271 22,706 22,467 22,776 International Capacity of the Internet* (Pulse billion/ sec.)

International capacity of the Internet 40,608 41,938 39,506 39,499 42,233

1,191.63 1,134.25 1,204.14 1,032.77 829.77 33,457 34,404 33,236 33,607 33,802

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Jan./Mar.2016 Apr./Jun.2016 Jul./Sep.2016 Oct. / Dec.2016 Jan. / Mar.2017 * Source:MCIT website as at 6/9/2017. * * Source: MCIT website as at 31/5/2017. Performance Under Review – H1 2017 7 H1 2017 Performance Highlights Year-on-Year Change Revenue 8,828m 38.8%

EBITDA 2,864m 39.4%

EBITDA Margin 32.4% 0.1PP

NPAT 2,608m 12.6%

NPAT Margin 29.5% 7PP

Capex 1,783m 78%

Capex /Revenue 20.2% 4PP

H1 2017 Highlights • Revenues for H1 2016 were EGP 8,828 million, representing an increase of 38.8% year-on-year. • EBITDA for H1 2017 amounted to EGP 2,864 million EGP, up 39.5% on the same period of 2016. • The business generated NPAT of EGP 2,608 million in H1 2017, reflecting a 12.6% increase in the same period of 2016.The increase is a strong reflection of the top-line growth of the business and its ability to generate healthy margins. • CAPEX spend for the first six month period in 2017 amounted to EGP 1,783 million.

Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 8 Revenue Mix

Revenue Mix (In EGP Millions)% Contribution Revenue CAGR (H1 2013-H1 2017) : 12.6%

5,490 6,432 5,786 6,359 8,828

5% 5% 8% 5% 18% 24% 27% 30% 22% 31% 29% 27% 31% 29% H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 24% HS-BU 15% 17% 14% ES-BU 15% 24% 23% 18% DW-BU 20% 19% 20% ICA-BU IC&N-BU

The Growth Story • As a leading telecom operator in the region, we have gradually – as strategically planned 3 years ago – adopted te’s line of business to be more focused on growing the retail business, while maintaining the growth in the wholesale business. • TE is proud to announce that it has grown its Retail business by 24% YoY, driven by the huge demand for Broad Band (BB) services in both the home and enterprise segments, which will directly contribute to healthier margins going forward. • This growth in the Retail line of business had its direct contribution to the growth in Top line by 39% YoY. • Contribution (Revenue Mix) of the Wholesale Business Units (Bus) to the Top line increased from 51% in H1 2016 to 56% in H1 2017, empowering the EBITDA Margin by a growth of 39% YoY.

Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 9 Financial Highlights

TE Consolidated Analysis / Margin (In EGP Millions, In Percent %) Revenue CAGR (FY2012-FY2016) : 8.9%

37% 10,032 11,138 12,158 28% 12,184 14,133 26% 33% 32% 25% 28% 22% 26% 26% 27% 19% 22% 16%

12%

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

EBITDA EBIT NPAT

Revenues EBITDA EBIT NPAT (In EGP Millons) (In EGP Millons) (In EGP Millons) (In EGP Millons)

3,283 8,828 2,608 2,864 2,315 2,535 6,432 6,359 2,214 5,786 2,054 1,753 5,490 1,787 1,809 1,576 1,645

1,132 932 763

H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 10 Key Performance Indicators (KPIs) (Quarter Only)

Fixed Data ARPU Fixed Voice ARPU (In EGP / Month) (In EGP / Month)

31 120 31 30 100 30 29 80 29 60 28 28 40 27 27 20 26 26 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2015 2016 2017

te’s ADSL Market Share (In percent %) te’s ADSL Net Adds 78% (In 000’s Subscribers ) 76% 300 74% 250 72% 200 70% 150 68% 100 66%

64% 50

62% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -50 2015 2016 2017 2015 2016 2017

* Fixed Voice ARPU includes Home & Enterprise revenues (Subscription + VAS + Voice Calls) , and revenue from Incoming International to Fixed Calls. 11 Capital Expenditure (CAPEX)

Capital Expenditure (CAPEX) (In EGP Millions)

Capex • Capital expenditure (CAPEX) in H1 2017 reached Capex/Sales

2,000 30% EGP 1,783 million, 20% of total revenues . 1,783 1,800

1,600

1,400 1,007 20% • The company will maintain its strategy of investing in 1,200 1,002 20% 1,000 high-speed data networks to capture mobile data 800 674 17% 16%

10% 600 293 growth, including the rollout of 4G network.

400 10% 200 5%

- 0% H1 2013 H1 2014 H1 2015 H1 2016 H1 2017

Operational Highlights ( CAPEX - Actual H1 2017 ) Operational Highlights ( CAPEX - Guidance 2017 ) (In EGP Millions / In Percent %) (In EGP Millions / In Percent %)

35% 32% 1,784 7,735

65% 68%

Network Modernization 4G Rollout &Network Modernization Other Other Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. Fully Integrated Operations & Other Investments Fully Integrated Operations & Other 13 Investments Information

Fully Integrated Operations Affiliates

MERC * 49.00% TE France SAS 100.00% Technology Development Fund 46.15%

Vodafone Egypt 44.95% TE Data 99.99% Egypt Trust 35.71%

TE Investment Holding 99.95% T Associates

TE Information Technology 97.66% Ideavelopers 18.75%

CITC 10.00% Centra 58.76% Arab Co – PC Manufacturing 10.00%

Note: te has 2% indirect ownership in MERC through TE Data, Making total ownership in MERC 51%. Appendices 15 Telecom Egypt’s Line of Business

te’s business has now been organized into customer facing units in order to focus on growth

Lines of Business Business Unit (BU)

BU Characteristics

Retail Wholesale

Home Services Enterprise Solutions Domestic Wholesale International Carriers International Customers (HS-BU) (ES-BU) (DW-BU) Affairs & Networks (ICA-BU) (IC&N-BU) Traditional voice services and High Speed Internet Services Versatile wholesale services International voice operations, Egypt's unique geography, high speed Internet (ADSL) (ADSL) and Enterprise including thanks to te’s bilateral relations connecting the Red and Med through home landlines. Integrated applications leasing, as well as data with international carriers and Seas, make te’s network a solutions for both Private transfer for mobile companies, as well as a focus unique global resource Companies and Govern- companies and internet on diversity of inbound traffic connecting Euro-Asia and mental Organizations and providers. sources. Euro-E-Africa infrastructure. Institutions.

Growth based on demographics Enterprise is repositioning from MNOs and ISPs use te’s Develop and grow The world depends on te and ability to spend more on being a connectivity provider, extensive and unique fiber based international and regional Hub heritage for international telecoms. to a total solution provider. This network for transmission business, as well as communications. Latency and 19.8 million homes and 500 is expected to level up in the services. developing adjacent voice diversity support te’s offering. thousand new potential next five years. The uptake in mobile services (HCD-ITFS). households created per year. Particular demand for total subscribers and mobile Implementing “Least Cost 72% of home revenue is data telecom. technology has seen an increase Routing” module. based. in bandwidth and transmission demand. 16 Income Statement Summary

Summary Income Statement 6 Months Period Ending June YoY Quarter Only QoQ YoY In EGP Millions H1 2017 H1 2016 % Change Q2 2017 Q1 2017 Q2 2016 % Change % Change Revenue 8,828 6,359 38.82% 4,637 4,191 3,294 10.63% 40.74% Home Services 2,596 2,009 29.2% 1,331 1,265 1,009 5.2% 31.8% Enterprise Solutions 1,272 1,122 13.3% 718 554 570 29.6% 25.9% Domestic Wholesale 1,756 1,534 14.4% 868 888 813 -2.2% 6.8% International Carriers Affairs 2,512 1,388 81.0% 1,326 1,186 742 11.7% 78.6% International Customers & Networks 693 306 126.4% 394 299 160 32.0% 146.4%

EBITDA 2,864 2,054 39.54% 1,479 1,385 1,066 6.78% 38.70% Margin 32.44% 23.29% 31.89% 33.04% 32.36%

EBIT 3,283 2,214 48.24% 1,553 1,730 1,129 -10.21% 37.56% Margin 37.18% 34.82% 33.49% 41.27% 34.27%

Profit Before Tax & Minority Interest 3,140 2,682 17.10% 1,533 1,608 1,181 -4.66% 29.81%

Margin 35.57% 42.17% 33.06% 38.36% 35.84%

Net Profit 2,608 2,315 12.64% 1,268 1,340 1,039 -5.37% 21.98% Margin 29.54% 36.40% 27.34% 31.97% 31.55%

EPS 1.53 1.36 12.64% 0.74 0.78 0.61 -5.37% 21.98% Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 17 Balance Sheet Summary

Balance Sheet Summary YoY % Change In EGP Millions H1 2017 FY 2016

Current Assets 9,485 8,488 11.75%

Net Fixed Assets 14,742 14,238 3.54%

Long - Term Investments 10,682 9,534 12.04%

Other Long -Term Assets 12,884 9,228 39.62%

Total Assets 47,793 41,488 15.20%

Curent Liabilities (Exc. STD) 8,113 7,648 6.1%

Bank Short-Term Borrowings 0 0

CPLTD 6,414 2,716 136.21%

Long -Term Debt 611 626 -2.40%

Other Non-Current Liabilities 2,610 753 246.84%

Total Liabilities 17,748 11,742 51.15%

Total Equity & Minority Interest 30,045 29,745 1.01%

Total Liabilities & Equity 47,793 41,488 15.20%

Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 18 Income Statement Bridge – H1 2017

Income Statement Bridge (In EGP Billions - % of service) 8.83 (2.17)

24.6% (2.03) 23.0% (1.77)

20.0% 3.28 2.86 2.61 37.2% 29.5% 32.4

Service Revenue Personnel Cost Interconnection Other Opex EBITDA EBIT NPAT Cost

• Salaries and Wages. • Incoming • General & Admin Interconnection Cost. Expenses. • Company Share of Social Insurance. • Outgoing • Selling & Distribution Interconnection Cost. Expenses. • Employee Holidays. • Other Direct Costs.

Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 19 shareholders Return

Net Cash From Operating Activities Net Debt– YoY Analysis (In EGP Millions) (In EGP Millions) 2,484 2,165 Net Debt (5,776) (5,179) (3,344) (2,197) 2,085 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 8,000

1,296 6,000 1,068

4,000 6,413 5,762 321 2,000 3,810 2,587 1,257 - -637 -582 -466 -389 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 -2,000 -3,342

-4,000 Cash Total Dedt

Return Metrics – YoY Analysis Payout Ratio– YoY Analysis (In EGP Millions) (In Percent %)

Dividends Per Share Data Net Profit In EGP FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 104% 106% DPS 1.30 1.00 0.56 0.75 1.00 EPS 1.25 1.43 0.53 1.40 1.20 83% 70% 2,958 2,997 2,620 2,670 54% 2,219 1,707 1,707 1,417 1,280 956

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Note: All financial figures reported are based on Consolidated financials under The Egyptian Accounting Standards. 20 te’s Submarine Cable Opportunity

International Customers BU Growth Pillars Project Contractual Progress (HY13-HY17) (In USD Millions)

Position te as a regional Asia And East Africa gateway to Europe for traffic originating from Asian, Middle-Eastern and African countries 102.3 , 53.1 , 66% 34% 1 Diversify te International Service Portfolio • Extend te’s international service portfolio by developing new value added services • Leverage partnerships with global operators to enhance international brand image

2 Expand te International Reach Cable Projects • Expand te international footprint by deploying PoPs and expanding Ancillary Services & Capacity Sales &Int Customer Support customer base • Identify opportunities for new business development (e.g. te-North expansion or deployment of new cable system) In 2017, te will continue to recognize IRU Revenues from the different • Seek partnerships with international carriers to enter new markets submarine cable projects which is considered services of high margins, and revenues from associated ancillary services and capacity sales and 3 Enhance Sales Capabilities International Customer Support . • Develop sales capabilities and enhance international account management • As part of te’s focus on customer centricity, the sales & business development division has been restructured to three key geographic Regions (Arica, Asia and Europe &Rest of world)

Leverage te’s national backbone and international infrastructure to support te’s international business

Source: National Bank of Egypt (Consolidated financial Statements ) U$D 1 = EGP 18.14( 28/6/2017) te’s International Business Growth 21 Potential

te International Connectivity Telecom Egypt’s Shareholding 22 Structure – As at June 28 2017

te’s Shareholding Structure Per Continent te’s Shareholding Structure Per Region (In Millions)

MENA • Telecom Egypt is 80% owned by the government and 20% Free Float. 45.8% %20 • The 20% Free Flow is owned by both %80 Free Float individual and institutional Shareholders. Government Ll; • By law, Egyptian government should hold not less than 51% stake in Telecom Egypt Mediterranean

31.6%

North Europe Asia America 91.3m 72.2m 51.4m North 26.7% 21.2% 15.0% Africa 30.8%

Middle East 45.8%

Gulf South Africa* Australia America 0.0m 116.2m 10.3m 13.9% 0.0% 34.0% 3.0%

* Excluding Egypt Government which represents 80% of Total te shares Mohamed Kamal Investor Relations Director

202 3131 5219

Shaymaa Hasheesh General Manager of Investor Relations

202 3131 5215

[email protected] ir.te.eg

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