Gaining Momentum

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Gaining Momentum Gaining Momentum As we launch our new GAIN corporate strategy, designed to propel the Company for faster, more profitable growth over the coming years. We remain committed to delivering increasing value for Shareholders, customers and employees, while aligning with the Kingdom’s Vision 2030 and ICT Strategy 2023. Annual Report 2019 Financial highlights Table of contents 2019 at a glance Revenues EBITDA and EBITDA margin Overview Highest annual revenues in the last About Mobily 08 Year in review 10 +13.4% A snapshot of Mobily’s financial and operating highlights 37% +9.2% 1 13,450 4,947 4 years Geographic footprint 12 Shareholders information 14 for a year of transformation and accelerating growth. 11,865 4,531 38% Highest annual EBITDA in the last 11,351 3,646 32% Strategic Review 6 years Chairman’s statement 18 2 Theme of the year 20 CEO’s statement 22 First net profit in the last Market review 24 Operational Cash Flow Deleveraging (Net Debt and (EBITDA-CAPEX) Net Debt/EBITDA) CFO’s review 26 5 years Business model 28 (6.4%) +27.8% Strategy and KPIs 30 10,569 2.45x Vision 2,187 Net debt to EBITDA ratio at under Business review 32 Empower the Digital Economy to Unlock Possibilities 11,288 2.49x 1,712 2.45x Environmental, Social and Governance Empower: our winning role in the envisioned future Environmental 1,378 12,687 3.48x The Digital Economy: The long-term future that we envision 3 Protecting our environment 47 Social To Unlock Possibilities: the value we add to this envisioned future Investing in our people 48 Serving our community and our Kingdom 49 Net profit/ (Loss) Governance (SAR million) 2019 Board of Directors 50 (123) 31 Executive Management 62 (SAR million) 2018 Related party transactions 65 Values (123) Compensation and remuneration 67 (SAR million) 2017 About Mobily 71 (709) Margin Important events 73 Forward-looking statements 74 Agile Social responsibility activities 75 We are open, flexible, and make every second count. Shareholders 76 Dividend policy 78 Risks 80 Operating highlights Accounting standards applied in financial statements 83 Courageous Summary of assets, liabilities and business results 84 We are brave enough to take bold steps and Loans 87 Statutory payments 90 determined to see them through. Appointment of new Saudi national SAR 7.6 5G Lawsuits and penalties 91 +70% Annual review of the effectiveness of internal control procedures 92 billion Network Corporate governance compliance 94 Clear Mobile Download CEO & CFO Speeds for Hajj Murabaha Facility Rollout Began Declarations of the Board of Directors 97 We keep things black and white. Refinancing Financial Statements Independent auditors’ report 100 Consolidated statement of financial position 104 New Vision, 4 Caring + 17pt. #1 #1 Consolidated statement of profit or loss 105 Strategy and Consolidated statement of comprehensive income 106 We treat you as an individual and value diversity Employee in Social Media Consolidated statement of changes in equity 107 Customer Care Ranking* Corporate Values in thought and perspective. Engagement Score Response Time* Consolidated statement of cash flows 108 Notes to the consolidated financial statements 109 *Source: CITC reports Overview About Mobily 08 Year in review 10 Georgraphic footprint 12 Shareholder information 14 01 Overview About Mobily As the winning bidder for Saudi Arabia’s second Global System for Mobile communications At launch, Mobily ended a monopoly in Saudi Arabia’s Mobily delivers integrated services for three customer (GSM) license in 2004, Etihad Etisalat (Mobily) was established by a consortium led by wireless industry by providing mobile telecommunications groups: individuals, business, and carriers. It does so by services nationwide. Acquiring over one million subscribers leveraging its wireless network, which is among the largest Etisalat, the UAE-based telecom conglomerate. The Company’s major shareholders are in its first 90 days of operation in 2005, Mobily was named by coverage in Saudi Arabia and the Middle East, as well Etisalat Emirates Group (27.99%) and the General Organization for Social Insurance the Middle East and North Africa’s fastest growing mobile as through one of the region’s widest fiber-to-the-home operator in 2006, the same year it launched 3.5G services, (FTTH) networks and one of the largest data center systems (6.91%). The remaining shares are owned by institutional and retail investors. with 4G services following in 2011. worldwide. Since its launch, Mobily has grown both organically and The Company’s network comprises its own infrastructure, through strategic acquisitions. In 2008, it acquired Bayanat complemented by those of Bayanat al-Oula and SNFN. This al-Oula, a licensed data service provider, and later that year is the Kingdom’s newest fiber-optic network, with access it acquired an absolute majority stake in Zajil, the leading to all major cities and more than 33,000 km of roads. The Saudi internet service provider. The Company owns 66% network has been expanded to connect to neighboring of the Saudi National Fiber Network (SNFN), one of the countries including Yemen, the United Arab Emirates, world’s largest fiber-optic networks, which enables Mobily to Bahrain, Qatar, Kuwait and Jordan. rely on strong backhauling capacity to offer its customers comprehensive communication, mobile and broadband Since its IPO in 2004, Mobily has been listed on Saudi services. Arabia’s Tadawul stock exchange. It has a share capital of SAR 7,700 million, comprising 770 million shares of SAR 10.00 each, paid in full as at 31 December 2019. 8 Mobily | Annual Report 2019 9 01 Overview Year in review 15 December Signing of Refinancing Murabaha 24 January Facility agreement Mobily signed a SAR 7.6 billion refinancing Launch of first Joint ICT Academy in the Kingdom Murabaha Facility Agreement with a group Mobily and Huawei signed an agreement to create the first 19 November of Saudi Banks, including Riyad Bank Joint ICT Academy in the Kingdom, which aims to develop (Agent), Arab National Bank, Banque Saudi 300 Huawei certified ICT specialists for Mobily before Signing of Alinma Bank Fransi, Saudi British Bank and SAMBA 2020. It will give college students who have demonstrated Financing agreement Financial Group, with the purpose of interest in the ICT sector an opportunity to become 19 May Mobily signed a financing agreement replacing the existing syndicate financing Huawei-certified ICT professionals, serving to minimize the with Alinma Bank for SAR 3 billion and reducing the cost of financing with 28 April Appointment of new CFO better financing Terms and Conditions. gap between the availability of ICT industry talent and what Mobily appointed Khaled Abanami as over 10 years to replace existing debt, will be needed to fulfil the Kingdom’s Vision 2030. Start of 5G Network Testing the Company’s Chief Financial Officer and for general corporate purposes, Mobily successfully conducted 5G (fifth generation) (CFO), replacing Kais Ben Hamida, including capital expenditure. site tests in cooperation with Ericsson, reaching to empower national talent to lead speeds in excess of 1 Gbps (over 1,000 megabits the Company’s key roles. Abanami per second). The tests are the first such tests in has significant experience in leading the Haram area of Makkah, which has one of the finance functions with extensive highest concentrations of mobile users in the knowledge of the telecom sector, world. Upon deployment, 5G will boost customer financial restructuring, finance, cost experience and spur a new round of growth and reduction, IFRS implementation, and innovation. digital transformation, which will help the Company in its coming phase of growth and value creation. Recognition of our achievements 14 May During 2019, we were proud to receive a number of high-profile awards and recognitions, honoring the progress we’ve made in consistently delivering market leading service to our Approval of Bayanat Telecom Company Merger customers. These included: Mobily shareholders approved the merger of Bayanat Telecom 24 February Company (the merged company) with its rights and obligations, HRH Prince Khaled Al Faisal honoring Mobily for its strategic partnership in the campaign including all intellectual rights represented in names, trademarks, • “Hajj is Worship and Civilized Behavior”. Appointment of new CEO all assets with their contents, all projects, contracts, and works that Mobily announced the appointment of Eng. Salman the merged company is a part of, and including all technical and • The Minister of Communications and Information Technology honoring Mobily for its Abdulaziz R. Al Badran to the position of CEO administrative elements and licenses that Bayanat owns in Mobily outstanding role in the Universal Service Fund (USF) project. effective 1 April 2019, as part of promoting talented (the merging company). This comes after Mobily’s acquisition of • The Communications Authority honoring Mobily for its contribution to the success of the and experienced Saudi executives and consistent the entire shares of the National Company for Business Solutions operational plan for the Hajj season. with Government vision. He takes over from in Bayanat Telecom Company, which represent 1500 shares out of The Saudi Minister of Labor and Social Development honoring Mobily for its contribution Eng. Ahmed AbouDoma, who consistently made • 150,000 shares, and converting Bayanat Telecom Company as one with Ekhaa program. improvements in the operational and financial person partnership in accordance
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