Financial Results 2018

0 consolidation scope – general information

The consolidated financial statements include the accounts of Sonatel and all its directly or indirectly controlled subsidiaries (see page 36). Subsidiaries are incorporated using the full consolidation method or the equity method of consolidation. Orange Sierra Leone owned at 50% is consolidated using the full consolidation method in accordance with the shareholders’ agreement. Orange Services Group “OSG” owned at 47% by Sonatel and its subsidiaries is accounted for in the consolidation scope using the equity method of consolidation as of June 2018.

Transactions, balances and reciprocal incomes between integrated companies are eliminated.

The consolidated financial statements are presented in XOF. Assets, liabilities and income statements of subsidiaries out of XOF zone are converted at the exchange rate prevailing at the closing period.

The Group’s consolidated financial statements are prepared in accordance with the West African System of Accounting (SYSCOA), with a revised version effective since January 1, 2018 (SYSCOHADA).

Sonatel 2018 Financial Results 1 warning

This presentation contains information which may be deemed as forecasted information.

Though the Company considers the statements and information rely on reasonable assumptions on the publication date of the present release, they are by nature subject to risks and uncertainties, which may give rise to a difference between the actual figures and those reported or induced in these statements or information.

Sonatel cannot guarantee, or be held liable for the accuracy, thoroughness, coherence and effectiveness of any of the statements or information presented in this release.

Sonatel 2018 Financial Results 2 contents

Highlights

Operational results

Financial results

Perspectives

Appendices

Sonatel 2018 Financial Results 3

Highlights Key messages Key financial figures Key operational figures Environment and business #1 Network coverage Highlights per country Contribution to the economy Corporate Social Responsibility Commercial ads

Sonatel 2018 Financial results Key messages 5 Continuing transformation of the business Net income model, oriented Strong commercial preserved thanks to data centric and positions preserved the growth relays on mobile despite a slight decline in despite an increase financial services in amortizations subscribers’ base growth due to recruitment based on value-oriented Continued growth in 3 A continuously subscribers in Mali turnover and maintained mutating environment EBITDA growth in with structuring evolutions in the absolute value telecom sector 1 across all perimeters

2 4

Sonatel : 2018 Financial Results 5 Key financial figures

1 022 462,6 202,3 194,2 268,4 Billion XOF Billion XOF Billion XOF Billion XOF Billion XOF +5% +2.2% stable +5.7% -0.2%

Turnover EBITDA Net income Free cash flow CAPEX A 9.8 billion XOF A 0.1 billion XOF 0.7 billion XOF decrease The bar for the 1 000 billion increase in terms of increase in absolute 10.6 billion XOF in free cash flow (-0.3%) XOF turnover reached with absolute value but a value. increase in investments due to a higher growth of a 5% evolution supported slight decrease in (in absolute value). the investments by data and Orange Money Stabilization of net EBITDA growth compared to EBITDA income following the The CAPEX/Turnover compared to 2017 (2.2% (5.7% vs 2.2%) 6.3% decrease ratio remains stable at vs 2.8%). recorded in 2017. 19%. 1.2 basis points decrease of the EBITDA rate at 45.3%.

Sonatel : 2018 Financial Results 6 Key operational figures

29.7 29.1 10.8 5.6 219.1 Million Million Million Million thousand -1.7% -2% +17.5% +26.1% +34%

FMI subscribers Mobile Data Orange Money Internet (Fixed lines + Mobile + Internet) subscribers subscribers subscribers subscribers (voix, sms et SVA) (Internet Mobile) (ADSL + Fibre + Flybox Evolution of the FMI base +Wimax) 2% drop in the mobile Strengthening Continuously growing mostly impacted by the subscribers’ base contribution from data activity (+1.2 Million active Growth by +34% slowdown in recruitments compared to 2017 due to a thanks to a competitive subscribers, +36.1% compared to 2017 in Mali following the end of decrease in customer base advantage on increase in turnover largely drawn by the bonuses at activation and in Mali with their new connectivity notably with compared to 2017) and convergence and the a refocus for base recruitment approach the 4G in Senegal, Mali improvement in attractiveness of offers management around value centered around value. and Bissau. profitability. around ADSL, the flybox and fiber. Excluding Mali, the mobile subscribers’ base increased by +8.9%.

Sonatel : 2018 Financial Results 7 Environment & Context

Competition Country Regulations

• Finalization of TIGO Senegal takeover, acquisition of 4G • Security context still tense in the North of Mali, re-election of • 4G frequency allocation in Sierra Leone frequencies the outgoing president, establishment of a new government • Retroactive decrease in tariffs for national interconnection in • Strong commercial positions maintained (volume and value) • Political stalemate in Bissau, governmental instability Senegal with a return to symmetry (9F/11F to 6F/6F per • Start of activities for the 3rd operator (QCELL) in Sierra • Political tensions and crisis in many social sectors in Guinea minute) Leone • Democratic transition in Sierra Leone, establishment of a • New interconnection tariff signed by the regulator in Mali: 11 • Start of activities for the 3rd operator (TELECEL) in Mali new administration XOF/Min in 2018 and 2 XOF/Text • 4G launch by the competitors in Mali and Sierra Leone • Significant increase in OTTs and the SIMBOX fraud • Sustainable development funds (0.5% of turnover) applicable • Termination of activities of INTERCEL in Guinea since mid-February 2018 in Mali • Leadership conquest and confirmation of Orange in the area • Launch by the regulator in Senegal of the unbundling of the of domestic transfer (Senegal) local loop for other operators and ISPs to take advantage of Sonatel’s wired network. • LTE/TDD frequency allocation (Senegal) • Ongoing discussions in Guinea on 4G frequencies Revenues and charges • Establishment of the CST tax in replacement of the Offers CODETTE and PST taxes with an 1% increase in taxation (goes from 4% to 5% of turnover excluding interconnection • Revenues maintained fees – Senegal) • 4G+ launch in Senegal and Mali • Significant growth in turnover drawn by the strengthening of • Launch of Orange Energy (Mali, Guinea and Senegal) the contribution from mobile data and Orange Money • Launch of the optical fiber in Mali • Regulatory and accounting impacts • Launch of LTE/TDD in Mali • Savings on direct costs (international outgoing, distributor • Accompaniment in the digital emergence in Senegal, commissions, terminals) thus allowing to maintain a deployment of Act II of the Internet revolution (engagement sustained level in the EBITDA margin generated taken in 2017 for the decrease in mobile internet by 50% by • Proper management of direct costs, significant fiscal impacts 2019 was realized in 2018) on the evolution of indirect costs CAPEX and financing • Launch of international Orange Money transfer from France to Guinea • Development of data usage and voice bundles • Increase in investments within the Group • Ongoing disbursement for license acquisitions (Sierra Leone, Economy Mali, Senegal) • Sustained debt level (Senegal and Mali) related to external Customer experience treasury factors (short and medium term credit) • Increased fiscal pressure all in the countries of presence • Establishment of medium term financing for a coverage of • Favorable economic climate in Senegal and Mali • Confirmation for the COPC certification in Senegal treasury needs accentuated by exceptional disbursements • Economic gloom in Bissau (licenses, frequencies, CAPEX) • NPS leadership in Senegal and improving • Foreign exchange challenges with the Leone and the • 4G coverage in all the regional capitals in Senegal Guinean franc • Contract with the new MSP Huawei, improvement of the NUR indicator (Mali) Sonatel : 2018 Financial Results 8 Network coverage

SIERRA SENEGAL MALI GUINEA BISSAU LEONE

Mobile penetration 105% 106% 101% 79% 54%

2G Population coverage (%) 97.9% 94% 95% 90% 83.8%

3G Population coverage (%) 92.2% 66% 56% 69% 41%

4G Population coverage (%) 62.0% 31% N/A 34% N/A

3G Active subscribers (in million) 3.6 3.9 1.3 0.2 0.8

4G Active subscribers (in thousand) 708 229 N/A 27 N/A

Data penetration 40.7% 37.0% 18.4% 19.0% 41.0%

4G penetration rate 19.7% 5.7% N/A 3.9% N/A

Fiber (equipped households) 79 426 3 274 N/A N/A N/A

Sonatel : 2018 Financial Results 9 Senegal

Base mobile Network Position Volume market share Population 8,78.7 million 15.7 million +390,5+390.5 K (+4,7%)(+4.7%) Delta mobilebase mobile base 2G leader

Orange Money pénétrationmobile 3G 53% base penetrationmobile 4G -1.4 pts 2.0 million 105% 4G+

penetration data Maintained turnover growth throughout 2018 thanks to the strengthening of Inflation penetrationdata the contribution from mobile data and Orange Money (leader in domestic 2.2% transfer). Strengthening of investments on growing activities. Expansion of 40,7%40.7% the competitive scope with mobile finances and ISPs (Internet Service Providers). CAPEX Orange penetration Money 84.784.7 milliards billion XOF FCFA Orangepenetration Money

-1,5%/1.5%/YoY 22,7%22.7%

Sonatel : 2018 Financial Results 10 Mali

Base mobile Network Position Volume market share Population 10.5 million 19 million --2.12.1 millionmillion ((--16.5%)16.5%) Delta mobilebase mobile base leader Orange Money penetrationmobile 2G 56% base penetrationmobile 3G -4.5 pts 106% 2.1 million 106% 4G

Inflation penetration data Inflation 1.6% penetrationdata 1.6% 4G 337%7% Strong commercial positions maintained in terms of both volume and value. Significant improvement in 3G coverage. Deployment of high speed internet via LTE solutions (4G. TDD) and fiber. Increasing fiscal pressure. CAPEX Orange penetration Money Orange Money Turnover growth impacted by the change in accounting method for the 57.257.2 milliards billion XOF FCFA penetration Orange Money activity. 19.9% ++13.3%/13.3%/YoY 19.9%

Sonatel : 2018 Financial Results 11 Guinea

Base mobile Network Position Volume market share Population 7,37.3 million 11,911.9 million +485,2+485.2 K (+7.2%)(+7,2%) DeltaDelta baseparc mobilemobile 2G leader Orangebase Money penetration mobile 63% +1.1 pts Orangebase Money penetrationmobile 3G 1,21.2 million 101%101%

Inflation penetration data Inflation 8,5% penetrationdata 8.5% 3G 32,9% Consolidation of the strong commercial positions. Development of the 32.9% Orange Money activity. Major stakes around the availability of resources (frequencies, numbering) and the finalization of negotiation on licenses CAPEX Orange penetration Money (concession, 4G). Welcomed growth in financial results. 33,533.5 milliards billion XOF FCFA Orangepenetration Money

+22,6%/+22.6%/YoY 16%16%

Sonatel : 2018 Financial Results 12 Bissau

Base mobile Network Position Volume market share Population 682.7682,7 thousand mille 1,51.5 million +36,1+36.1 K (+5.6%)(+5,6%) Delta mobilebase mobile base leader 2G Orangebase Money penetrationmobile Orangebase Money penetrationmobile 3G 56% 2 200 79% 4G +0.4 pts

penetrationdata InflationInflation penetrationdata 2%2% Consolidation of the strong commercial positions in terms of volume and 4G 19% value. Pursued development of 4G coverage and Orange Money penetration. Participation of Orange to Guinea-Bissau major project to CAPEX Orange penetration Money connect to the ACE submarine cable. Financial results impacted by the weak economy. 5,25.2 milliards billion XOF FCFA Orangepenetration Money

+12,8%/+12.8%/YoY 3,3%3.3%

Sonatel : 2018 Financial Results 13 Sierra Leone

Base mobile Network Position Volume market share Population 2 million 7,8 million +469,9 K (+40.1%)(+40,1%) Delta mobilebase mobile base 2G Challenger Orangebase Money penetration mobile Orangebase Money penetrationmobile 45% second +4.5 pts 0,4 million 54% 3G

penetration Inflation data Inflation data 6,3% penetration 6,3% 4G 41% The dynamic of conquest maintained in the region with the CAPEX opening of new sites. Discussions with the regulator (taxes …). Orange penetration Money Acquisition of 4G license 13,613,6 milliards billion XOF FCFA Orangepenetration Money

-11,1%/YoY 18,9%18.9%

Sonatel : 2018 Financial Results 14 Contribution to the economy

paid out as duties, taxes, royalties, social Contribution to the + 500 contributions, custom duties and dividends budgetary revenues in the countries of presence Billion XOF

of turnover generated to the profit of Contribution to the local businesses in the countries of + 242 private sector presence Billion XOF

Job + 160 000 thanks to a wide commercial distribution creation Indirect jobs + 4 500 network and dynamic partners Direct jobs

of contribution to the balance of payments Exports from foreign telecom operators 130 Billion XOF

Sonatel : 2018 Financial Results 15 2018 Corporate Social responsibility

Sonatel employees with their Fight against plastic Recruitment for the second families planted close to 200 pollution: Inauguration of cohort of learners (100 in class 000 propagules with their Récuplast booths by the and 200 via online courses) for a partner Nebeday and with the Minister for the training in jobs in digital support of Sonatel’s sports and Environment technology. cultural association Environmental education Let’s Meet up #3 held on “Super coders” workshops for the for 150 children of Sonatel October 18 at Sonatel’s children of Sonatel employees at employees during their stay headquarter under the theme: Sonatel Academy, workshops in Saly with the expert Pr. “APIs, business accelerators”. animated by the learners from the Adams Tidjani The “POESAM” prizes for 1st cohort Senegal were presented to the laureates. Pursuit of the “Sonatel Clean Hosting at Sonatel of a Cities” concept or “And defar Awareness-building for children workshop with the signatories sunu gox” in the localities of between the ages of 12 and 16 of the Diversity charter: E- Matam, Dabia and Grand years old on digital literacy by Health and environmental Yoff initiating them to computer actions coding in a simple and entertaining manner.

24th edition of the “Month of With the equipment provided to Solidarity”, the Orange Mali June 2018, Orange Bissau our Digital Schools, foundation invested 131 assists deprived children. Food schoolchildren from around the million XOF in partnership donations were distributed to 6 African continent can participate with the Ministry of Solidarity orphanages in 2018. to the Wiki challenge contest and Humanitarian Action. hosted in Guinea.

Sonatel : 2018 Financial Results 16 2018 Commercial ads

The KeurguiBox pack is:

• A 3G/4G WIFI modem and a dedicated SIM card • A 30 Go welcome pass with the « Satisfied or your money back guaranteed » under 15 days model • An initial credit of 2 500 XOF with the option to call a fixed line • An on-demand or subscription-based billing system : 35 000 F CFA

Sonatel : 2018 Financial Results 17

Operational results Customer base Mobile customers #2 ARPU Mobile data Orange Money

Sonatel 2018 Financial Results Customer base : fixed line, mobile and Internet Subscribers 2016 2017 2018 17/16 18/17 Fined line Subscribers base (in thousand)

Fixed line 277 859 285 294 302 243 2.7% 5.9% 278 285 302 2016 2017 2018 Mobile 27 319 568 29 736 083 29 146 650 8.8% -2%

Mobile Subscribers Internet 143 620 144 753* 219 144 0.8% 51% (in million)

TOTAL 27 741 047 30 166 130 29 668 037 8.7% -1.7% 27.3 29.7 29.1 o Mobile : 2% decrease in base due to the important drop in base in Mali (-16.5%) due to recruitment being 2016 2017 2018 refocused on value, but attenuated by the increase in base in the other countries of presence

Mobile : good performance with a +5.9% increase compared to 2017 and supported by connectivity via flybox an fiber Internet Subscribers (in thousand) o High speed Internet : 51% growth compared to 2017, mostly drawn from the convergence and the attractiveness of offers around ADSL, flybox and fiber notably in Senegal; and, the phased migration of subscribers (Mali, Guinea) from WIMAX to 3G (flybox), combined with a good recruitment dynamic in 144 145 219 Bissau for the flybox. 2016 2017 2018

* Excluding WIMAX and flybox subscribers Sonatel : 2018 Financial Results 19 Mobile subscribers base

Subscribers 2016 2017 2018 17/16 18/17 7% base 2% 30% Senegal 7 900 150 8 344 083 8 734 542 5.6% 4.7% 25% Mali 11 262 654 12 539 918 10 468 834 11.3% -16.5%

Guinea 6 032 667 6 783 073 7 268 259 12.4% 7.2%

Bissau 600 384 646 573 682 701 7.7% 5.6%

Sierra Leone 1 523 713 1 422 436 1 992 314 -6.6% 40.1% 36% Senegal Mali Guinea TOTAL 27 319 568 29 736 083 29 146 650 8.8% -2% Bissau Sierra Leone o Senegal : Back to a subscribers’ base from prior to the identifications thanks a better control of the churn, an increase in acquisitions and a good commercial dynamic around 4G, thus explaining the 4.7% growth. o Mali : 16.5% decrease in base as a result of the end of the massive recruitments to the profit of acquiring value-oriented subscribers. o Guinea : Maintained recruitment pace thanks to the opening of new sites combined with 3G coverage in all 304 sub-prefectures and sustained commercial animations despite customer identification constraints. o Bissau : Evolution of the base (+5.6%) thanks the dynamism in the new offers in mobile data and Orange Money usages. o Sierra Leone : The subscribers’ base increased by +40.1% thanks to a coverage extension, a new dynamic of conquest leaning on the expansion of network of agencies and on innovative offers (bundles)

Sonatel : 2018 Financial Results 20 ARPU

Average monthly Segment 2016 2017 2018 17/16 18/17 ARPU Senegal Fixed line 95 084 94 838 73 579 -0.3% -22% XOF Mobile prepaid 2 661 2 794 3 063 5% 9.6% Mali Mobile prepaid 1 912 1 618 1 930 -15.4% 19.3% XOF Guinea Mobile prepaid 26 006 26 448 26 452 1.7% 0.0% GNF Bissau Mobile prepaid 2 842 2 832 2 701 -0.4% -4.6% XOF Sierra Leone Mobile prepaid 18 230 19 542 18 729 7.2% -4.2% SLL o Senegal : Appreciation in Senegal related to the important increase in mobile top ups thanks to the revenues generated by mobile data, the strengthening of the contribution from Orange Money usages, value-added services and thanks to the sale of terminals, despite a decrease in international incoming revenues. o Mali : Progression in ARPU mostly pulled by stable revenues in the face of a significant decrease in base (preservation of the value-oriented and top up oriented base) o Guinea : Stable ARPU following a growth in base and revenues in the same proportions, translating a good management of the number of offers. o Bissau : Decrease in ARPU mostly related to a higher increase in subscribers’ base than in revenues, the level of gratuity associated with the explosion in offers and the decrease in international incoming traffic. o Sierra Leone : Decrease in ARPU due to a more significant growth in base than in revenues.

Sonatel : 2018 Financial Results 21 Mobile Data

Mobile data Contribution to Turnover Weight on group turnover ARPU turnover growth

192 1 483 18.7% 114% Billion XOF XOF +4.8 pts +1.9 pts +41.3% +20.3%

Active mobile data Customer base Active 4G subscribers delta subscribers

10.8 1.6 1 328 Million Million thousand +17.5% +17.5% +88.2%

Sonatel : 2018 Financial Results 22 Orange Money

Contribution to Turnover Value of transactions Weight on group turnover turnover growth

62.8 8 000 6.1% 33.9% Billion XOF Billion XOF +1.4 pts +5.8 pts +36.1% +53.8%

Active Subscribers subscribers Volume of transactions Value of transactions / GDP

13.1 5.6 800,6 24.5% Million Million Million +11.6% +26.1% +70.6% +4.1 pts

Sonatel : 2018 Financial Results 23

Financial results Financial results Turnover #3 Margins CAPEX

Sonatel 2018 Financial Results Financial results

18/17 In billion XOF 2016 2017 2017 PF* 2018 17/16 18/17 PF* Turnover 905 972.9 972.9 1022 7.5% 5% 5% EBITDA 440.5 452.8 451.9 462.6 2.8% 2.2% 2.4% EBITDA margin 48.7% 46.5% 46.4% 45.3% -2.1 pts -1.3 pts -1.1 pts Operating results 323.2 307.8 306.9 312.3 -4.8% 3.3% 3.6% Operating margin 35.7% 31.6% 31.5% 30.6% -4.1 pts -1 pt -0.9 pt Net income 215.9 202.2 201.5 202.3 -6.3% 0.0% 0.4% Net margin 23.9% 20.8% 20.7% 19.8% -3.1 pts -1.0 pt -0.9 pt CAPEX 153.9 183.7 183.7 194.2 19.4% 5.7% 5.7% CAPEX rate 17% 18.9% 18.9% 19% 1.9 pts 0.1 pt 0.1 pt Free Cash Flow 286.6 269 268.2 268.3 -6.1% -0.2% -0.04%

Solid financial performances despite the slowing impact from unfavorable fiscal and regulatory measures. Stabilization of free cash flow compared to 2017 (pro forma).

* Nominal 2017 Pro forma following the SYSCOHADA reform Sonatel : 2018 Financial Results 25 Turnover

Contribution to turnover by activity Contribution to turnover per country Weight in Growth 4% activity 2% Fixed line 7.1% 3% 18% Mobile 49% 1% 42% 19% 41% Group Mobile data Turnover VAS 4% 5%

Orange Money 6% 36% 34% International Wholesale 13.% -20% Senegal Mali Guinea Others 1.5% 11% Bissau Sierra Leone

Maintained presence in Senegal and the strengthening in Guinea of the main consolidated financial indicators of the Group. Mali’s contribution slowing due to the change in accounting method in the calculation of turnover and Orange Money. 49.1 billion XOF turnover growth, mainly thanks to Senegal and Guinea. The growth is supported by mobile data and Orange Money, ADSL and integration, despite the decrease in international incoming and fixed voice.

Sonatel : 2018 Financial Results 26 Margins

EBITDA margin Operating margin Net margin

48.7% 46.5% 45.3% 35.7% 31.6% 30.6% 23.9% 20.8% 19.8%

2016 2017 2018 2016 2017 2018 2016 2017 2018

Average 1 basis point decrease in margins as a result of fiscal and regulatory impacts as well as the strengthening of low margin revenue lines (mobile data, Orange Money and value-added services).

Sonatel : 2018 Financial Results 27 Investments

Investment breakdown per activity Investment breakdown per country In Billion XOF

Variation 14 Investment 2017 2018 5 In Million XOF 2018/2017

33 Network 156 171 158 176 1.3% 85

Others 27 573 36 115 30.9%

57 TOTAL 183 744 194 291 5.7% Senegal Mali Guinea CAPEX rate 18.9% 19% 0.1 pt Bissau Sierra Leone

2018 investments for the Sonatel Group totaled 194.3 billion XOF with a 5.7% growth (+10 billion XOF) with a CAPEX/Turnover ratio stable at 19%. 2018 CAPEX focused mainly on network, particularly in Mali, Senegal and Guinea with the aim to improve the quality of service and extend our strategic advantage on fixed and mobile very high speed connectivity. CAPEX in areas outside of network increased by 30.9% thanks to IT (8.8%), services platforms (48.8%) and other assets (50.8%).

Sonatel : 2018 Financial Results 28

Perspectives 2019 Perspectives #4

Sonatel 2018 Financial results 2019 Perspectives

• 2018 has been marked by a favorable economic environment in the XOF zone diluted by impacting fiscal and regulatory measures

• Despite growing competition in our main markets (Senegal and Mali), the Group has been able to maintained its strong commercial positions in terms of both volume and value thanks to a good recruitment dynamic and control over the churn

• The Group will pursue with the development of very high speed internet through all the fixed line and mobile technologies as well as the enrichment of its mobile financial services offer; and, will take part in the digital transformation and in the strengthening of our contribution for an emerging digital economy in our countries of presence.

• Securing core revenues through the acceleration in the penetration of special offers and the expansion of corridors on the wholesale segment, a strong target on value and costs optimization should allow the Group to enhance its trajectories of profitability.

• The Group reaffirms its ambition to offer to its customers an incomparable experience, through a recognized technical and commercial QoS for quality (NPS leader).

30 Sonatel : 2018 Financial Results

Appendices 2018 Financial statements Statement of conformity 2018 dividend draft resolution #5

Sonatel 2018 Financial results 31 32 33 2018 Consolidated financial statements

1. Note to readers

2. Consolidation scope

3. Consolidated financial statements

4. Notes on consolidated accounts

5. Accounting methods and principles

34 Sonatel : 2018 Financial Results Note to the reader – consolidation scope

• The consolidated financial statements include the accounts of Sonatel and all its directly or indirectly controlled subsidiaries. Subsidiaries are incorporated using the full consolidation method. Orange Sierra Leone owned at 50% is consolidated using the full consolidation method in accordance with the shareholders’ agreement.

• Orange Services Group is accounted for in the consolidation scope using the equity method of consolidation.

• Transactions, balances and reciprocal incomes between integrated companies are eliminated.

• The consolidated financial statements are presented in XOF. Assets, liabilities and income statements of subsidiaries out of XOF zone are converted at the exchange rate prevailing at the closing period.

• The Group’s consolidated financial statements are prepared in accordance with the Revised West African System of Accounting (SYSCOA).

• With the implementation of the reformed SYSCOHADA as of January 1st 2018, the accounts closed on December 2017 have been re-accounted for in compliance with the new reform and thus allow for comparability between the two accounting years. On the presentation of the financial statements of December 31, 2018, 2017 is represented on 2 columns: R = Nominal 2017, P = 2017 Pro forma, in other words re-accounted for according to the SYSCOHADA reform.

35 Sonatel : 2018 Financial Results Note to the reader – consolidation scope

Entry in 2018

36 Sonatel : 2018 Financial Results Assets (in million XOF)

ASSETS GROSS AMORT/PROV NET 12/31/18 NET 12/31/17 P NET 12/31/17 R FIXED ASSETS

FIXED CHARES 0 0 0 898

INTANGIBLE ASSETS 501 831 214 258 287 573 296 394 297 606

GOODWILL 73 983 11 919 62 063 72 781 72 781 OTHER INTANGIBLE ASSETS 427 848 202 339 225 509 223 612 224 825

TANGIBLE ASSETS 1 844 087 1 137 289 706 798 652 255 652 255

ADVANCES AND INSTALLMENTS 0 0 0 0 0

FINANCIAL ASSETS 164 282 930 163 352 155 950 155 950

DEFERRED TAXES 18 741 0 18 741 19 393 19 393 EQUITY AFFILIATES 3 995 0 3 995 0 0 PARTIPATION AND LINKED DEBTS 5 686 583 5 103 9 416 9 416 LOANS AND OTHER FINANCIAL ASSETS 135 860 348 135 513 127 141 127 141

TOTAL (I) 2 510 200 1 352 478 1 157 722 1 104 599 1 106 709

CURRENT ASSETS

INVENTORY 14 345 1 188 13 157 14 238 14 236

RECEIVABLES AND ASSIMILATED FUNCTIONS 315 602 30 548 285 054 275 081 243 380

RECEIVABLES 160 039 30 303 129 735 121 237 120 951 OTHER RECEIVABLES 155 564 245 155 319 153 844 122 428 TOTAL (II) 329 948 31 736 298 212 289 319 257 616

ASSETS - CASH FLOW TOTAL (III) 317 439 0 317 439 231 339 231 339

TOTAL FIXED ASSETS 3 157 587 1 384 214 1 773 373 1 625 257 1 595 664 37 Sonatel : 2018 Financial Results Liabilities (in million XOF)

LIABILITIES NET 12/31/18 NET 12/31/17 P NET 12/31/17 R

EQUITY

EQUITY 50 000 50 000 50 000 ADDITIONAL PAID IN CAPITAL AND CONSOLIDATED RESERVES 403 276 407 353 407 353 CONVERSION VARIANCE 819 -3 688 -3 688 NET RESULT (part of the consolidated company) 172 467 171 801 172 454 OTHER EQUITY 0 0 0 PART OF THE CONSOLIDATED COMPANY 626 561 625 466 626 119 PART OF MINORITY 90 865 89 752 89 822 EQUITY OF TOTAL CONSOLIDATED TOTAL (A) 717 426 715 218 715 941

FINANCIAL DEBTS AND ASSIMILATED RESSOURCES

DEFERRED TAXES 649 661 661 LOANS AND FINANCIAL DEBTS 190 053 158 329 158 329 FINANCIAL PROVISIONS FOR CONTINGENIES AND CHARGES 72 293 61 020 59 694

TOTAL (B) 262 995 220 010 218 685

TOTAL STABLE EQUITY I = (A + B) 980 421 935 229 934 626

CURRENT LIABILITIES

ACCOUNTS PAYABLES AND RELATED ACCOUNTS 264 233 273 017 273 017 OTHER DEBTS 304 730 270 056 241 065

TOTAL (II) 568 963 543 072 514 082

LIABILITIES - CASH FLOW TOTAL(III) 223 989 146 956 146 956

TOTAL LIABILITIES 1 773 373 1 625 257 1 595 664 38 Sonatel : 2018 Financial Results Income statement (in million XOF)

CONSOLIDATED INCOME STATEMENT 12/31/2018 12/31/2017 12/31/2017 R TURNOVER 1 021 956 972 905 972 905 STOCKED PRODUCTION - - - IMMOBILIZED PRODUCTION 2 040 4 687 4 687 OTHER OPERATING REVENUE 37 175 21 602 16 800 I - PRODUCTION FOR THE YEAR 1 061 170 999 194 994 393 CONSUMED PURCHASES 63 338 61 746 61 237 EXTERNAL SERVICES AND OTHER CONSUMPTIONS 416 938 390 339 390 869 II - CONSUPTION FOR THE YEAR 480 276 452 085 452 106 VALUE-ADDED OF THE ACTIVITIES 580 895 547 109 542 287 STAFF COSTS 108 417 94 069 93 625 GROSS OPERATING PROFIT 472 477 453 040 448 662 DEPRECIATION AND PROVISIONS 168 955 161 192 160 593 REVERSALS PRODUCTS 8 764 15 088 19 718 OPERATING PROFIT 312 286 306 936 307 787 FINANCIAL REVENUES 11 236 10 312 10 312 FINANCIAL EXPENSES 24 753 18 962 18 971 ORDINARY ACTIVITIES RESULT 298 769 298 285 299 128 O.O.A. RESULTS - 3 380 - 1 662 - 1 662 RESULTS BEFORE TAX 295 390 296 624 297 467 TAXES DUE ON RESULTS 95 567 93 502 93 622 DEFERRED TAX 2 474 - 1 659 - 1 659 NET RESULT OF INTEGRATED COMPANIES 202 297 201 463 202 186 SHARE IN NET INCOME OF EQUITY AFFILIATES - 46 - - NET RESULT OF THE INTEGRATED COMPANY 202 251 201 463 202 186 PART OF MINORITY 29 784 29 662 29 732 PART OF THE CONSOLIDATED COMPANY 172 467 171 801 172 454 39 Sonatel : 2018 Financial Results TAFIRE I (in million XOF) AMOUNT AMOUNT (million XOF) (million XOF) GOP 470 137 (SA) FINANCIAL FEES 16 976 (TT) OPERATING EXPENSE TRANSFER 2 340 (SC) EXCHANGE RATE LOSS 5 880 (UA) FINANCIAL INCOME 5 531 (SL) EXPENSES OUTSIDE ORDINARY ACTIVITIES 320 (UE) FINANCIAL EXPENSES TRANSFER 1 (SQ) PARTICIPATION 0 (UC) EXCHANGE RATE PROFIT 5 329 (SR) INCOME TAX 95 567 (UL) O.O.A PRODUCTS 1 875 (UN) O.O.A EXPENSE TRANSFER 0

Total (I) 118 743 Total (II) 485 214

CAFG: Total(II) - Total(I) 366 471

FINANCING FROM CASH FLOW Dividends distributed during the fiscal year 195 404 AF = GCF – Dividends distributed during the fiscal year 171 067

WORKING CAPITAL NEED CHANGES (N.W.C)

Change N.W.C = Inventory Changes + Debt Changes + Notes Payable Changes

Inventory Changes Uses Resources N - (N-1) (increase +) (decrease -) (BC) Goods 0 0 (BD) RAW MATERIAL AND OTHER SUPPLIES 0 1 103 (BE) IN PROGRESS 0 0 (BF) MANUFACTURED PRODUCTS 0 0

40 (A) INVENTORY GLOBAL NET CHANGES Sonatel : Résultats0 Financiers 2018 1 103 TAFIRE I – next (in million XOF)

CHANGE IN RECEIVABLES Uses Resources (increase +) (decrease -) SUPPLIERS, ADVANCES PAID 5 718 0 CUSTOMERS 0 55 479 OTHER RECEIVABLES 60 352 0 CONVERSION GAP - ASSETS 0 1 583 TOTAL 66 070 57 063 (B)GLOBAL NET CHANGE IN RECEIVABLES 9 008 0

DEBT CHANGE Uses Resources (increase +) (decrease -) CUSTOMERS, ADVANCES PAID 0 589 TRADE SUPPLIERS 63 445 0 TAX LIABILITIES 0 32 526 SOCIAL LIABILITIES 3 108 0 OTHER LIABILITIES 0 66 739 CONVERSION GAP – LIABILITIES 36 0 PROVISIONS FOR CONTINGENCIES 171 0 TOTAL 66 761 99 854 (C)GLOBAL NET CHANGE IN DEBT 0 33 094

VARIATION DU BFE= A + B- C 0 25 188

OPERATING CASH SURPLUS OCS = GOP – N.W.C CHANGE – IMMOBILIZED PRODUCTION 2018 2017 GOP 470 137 448 662 - CHANGES IN NWC (NETWORKING CAPITAL) 25 188 16 943 - IMMOBILIZED PRODUCTION -2 040 -4 687 GOP 493 286 460 919 41 Sonatel : 2018 Financial Results TAFIRE II (in million XOF)

2018 2017 Uses Resources U - ; R + I-INVESTMENTS AND DISINVESTMENTS Fixed charges (increase during period) 0 0 Internal growth Acquisition/Transfers of intangible assets 22 042 0 -187 002 Acquisition/Transfers of tangible assets 195 562 7 784 -176 612 External growth Acquisition/Transfers of financial assets 24 835 21 430 -4 416 TOTAL INVESTMENTS 213 225 0 -368 031 II-CHANGE IN OPERATING WORKING CAPITAL NEED 0 25 188 16 943 A-ECONOMIC USES TO BE FINANCED FF+GG 188 037 0 -351 087 III-USES/RESOURCES (B.F.; O.O.A) 8 365 0 35 414 IV-RESTRAINED FINANCIAL USES 12 510 -25 388 Refund (based on payment schedule) of loans and financial debts B-TOTAL USES TO BE FINANCED 208 912 0 -341 061 V-INTERNAL FINANCING Dividends (uses) / CGF (resources) 195 404 366 471 159 534 VI-EQUITY FINANCING Increase in capital by new contribution 2 322 7 700 Investments from grants 0 0 Equity withdrawals 0 0 42 Sonatel : 2018 Financial Results TAFIRE II – next (in million XOF) 2018 2017 Uses Resources U - ; R +

VII-FINANCING BY NEW LOANS Loans 0 44 403 206 198 Other financing debts 0 0 -1

C-NET FINANCING RESOURCES 0 217 792 373 430

D-EXCESS OR SHORTAGE OF RESOURCES FUNDING (C-B) 0 9 067 32 369 VIII-CASH VARIATION Net cash At the end of the period + or - 93 450 0 -84 383 At the beginning of the period + or - 84 383 0 -52 014 Cash change (+ if uses; - if resource) 9 067 0 -32 369

CONTROL (Based on N and N-1 balance sheet volumes) Uses Resources 12/31/201 12/31/201 8 8 Working Capital change: WC (N) – WC (N-1) 5 990 0 Working Capital Need change: WCN (N) – WCN (N-1) 0 15 057 Cash change (T): T(N) – T(N-1) 9 067 0 TOTAL 15 057 15 057 43 Statement of changes in equity (in million XOF)

Balance Social equity Other Count Final Before Issuance of share to Balance after Distribution Cash In-kind Incorporated Decrease Increase Decrease Conversion Account Distribution distribution distribution reserves variance Transfer

Equity 50 000 -2 385 2 385 50 000 Issuance, merger, contribution premium 3 320 69 3 388 Re-evaluation variance -3 689 4 507 819 Legal reserve 22 709 106 222 23 036 Statutory and contractual reserves 0 0 Other reserve 462 063 -4 486 1 338 1 747 460 662 Carried over balance -20 648 0 -3 -2 079 -22 730 Previous year result not yet allocated 0 0 Result for the year 202 186 202 251 -195 404 -6 782 202 251 Investment grant 0 0 Regulated provisions 0 0

TOTAL 715 941 0 0 0 0 202 251 -199 890 -876 0 717 426 44 Table of changes, consolidated debts and off balance sheet consolidated commitments (in million XOF)

Balance Incurred Incorpo- Net Other Balance Collateral beginning debts Payments rated conversion movements end of of secured of year to equity variance year debts (1) (2) (3) (4) (5) (6) (7)

Convertible bond debts Other bonds debts Loans and debt credit institutions 156 492 43 185 14 775 51 184 954 Various financial loans and debts 1 837 3 329 57 -10 0 5 099

TOTAL 158 329 46 514 14 832 0 41 0 190 053

OFF BALANCE SHEET CONSOLIDATED COMMITMENTS Engagements Given Received (1) (1) Secured commitments With real collaterals 743 Other secured commitments 6 047 5 082

Mutual commitments In terms of leasing Definite orders

45 Sonatel : 2018 Financial Results Turnover breakdown table (in million XOF)

2018 2017 Turnover % of turnover Turnover % of turnover A)Sales allocation by activity

Fixed lines 28 854 2.82% 30 202 3.1% Mobile lines including data 733 481 71.77% 670 788 68.95% Orange Money 62 793 6.14% 46 149 4.74% Fixed internet line 43 560 4.26% 39 979 4.11% National interconnection 29 943 2.93% 34 427 3.54% International interconnection 97 357 9.53% 124 580 12.80% Other wholesale (LL, Roaming, Operators) 10 762 1.05% 13 124 1.35% Data and integration 11 593 1.13% 11 219 1.15% Other income 3 613 0.35% 2 437 0.25%

Total 1 021 956 100% 972 905 100%

B)Sales allocation by geographic areas

Africa (ECOWAS) 723 106 70.76% 693 550 71.29% Africa (outside ECOWAS) 214 448 20.98% 162 101 16.66% Asia 2 051 0.2% 2 025 0.21% America 1 092 0.11% 1 779 0.18% Europe 81 258 7.95% 113 450 11.66%

TOTAL 1 021 956 100% 972 905 100% 46

Workforce per category

2018 2017 Workforce Payroll Workforce Payroll

Staff under payroll 3 133 101 194 3 035 87 715

Manager and senior executives 1 587 61 870 1 473 50 201 Middle managers 1 046 28 044 1 022 26 982 Foremen 381 9 105 476 9 577 Employees and workers 119 2 175 64 955

Temporary staff 1 483 7 223 1 309 5 910

TOTALS 4 616 108 418 4 344 93 625

47 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

1- Immobilized charges 2018 2017 0 898 They correspond to the acquisition cost of fixed assets. With the SYSCOHADA reform, the balance was transferred to the transitional account 475100, then spread accross expense accounts by origin.

2 - Intagible assets Gross Amort. Net 2018 Net 2017 Software licenses, Patents, Trademarks 424 756 -202 917 221 839 221 747 Business intangibles 3 092 578 3 670 3 077 Goodwill 73 983 -11 919 62 063 72 781 501 831 -214 258 287 573 297 606

This item is constituted of licenses to operate telecom networks for the mobile and the fixed lines, software licenses, patents and trademarks, as well as assets for Sonatel Mobiles, Sonatel Business Solutions and Orange Guinea. The increase is due to the acquisition of licenses and software by Sonatel, Sonatel Mobiles and Orange Mali. The 73 983 million in goodwill corresponds to the difference between the acquisition cost of Orange Sierra Leone and our shares in ownership in the mentioned subsidiary. In gross value, it decreased by 6 389 million, corresponding to the discount on the acquisition price received from Bharti.

48 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

3 - Tangible assets

Gross Amort Net 2018 Net 2017 - Land and enhancement work 8 045 -19 8 026 6 506 - Buildings and facilities 90 462 -72 853 17 609 18 974 - Operating equipment: switching, transmission lines and networks, energy 1 630 299 -978 560 651 739 605 881 - Office furniture and equipment 87 211 -66 985 20 226 13 091 - Vehicles 28 070 -18 871 9 199 7 803 1 844 087 -1 137 289 706 798 652 255

The increase in tangible assets from 2017 to 2018 is related to the strengthening of the investment programs thus resulting in the advancement of the following items (netted): - Land and development work: +1 520 million, - Buildings and installations: -1 365 million, - Transmission: +46 702 million, - Switching: +2 417 million, - Data networks: -1 367 million, - Energy: +5 016 million, - Lines and networks: -17 million, - Others: -6 893 million, - Vehicles: +1 396 million, - Office furniture and equipment: +7 135 million.

49 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

4 - Advances and installments on Fixed Assets 2018 2017 0 0 Advance payments are paid amounts to suppliers at the start of work. 5 - Financial Assets Gross Prov. Net 2018 Net 2017 - Non-consolidated securities 5 686 -583 5 103 9 416 - Investment in equity affiliates 3 995 0 3 995 - Staff loans 127 377 -347 127 031 123 404 - GOS loan 2 0 2 0 - Bonds 16 0 16 688 - Deposits and guarantees paid 8 466 -1 8 465 3 048 - Deferred taxes - Assets 18 741 0 18 741 19 393 164 282 -930 163 352 155 950

Change in non-consolidated securities (see detail for 6th point - non consolidated securities) is due to integration of GOS (Orange Services Group) in the consolidation scope.

The item Staff loans correspond to loans granted to employees.

The decrease in bonds is explained by coupons reimbursement on government bonds in Senegal.

Deposits and guarantees increased by 5 417 million due to the security deposits transferred to Huawei by Orange Mali for the project to outsource network maintenance; and security deposits transferred by Orange Guinea to Total (supply in fuel) and IPT Powertech Guinea SA (ESCO project) for the amount of 2 742 million.

Deferred taxes – assets are a result of the temporary differences between the accounting and tax results. 50 Notes on the consolidated accounts (in million XOF unless otherwise specified)

6 - Non-Consolidated securities Gross Prov. Net 2018 Net 2017 SCGB SA 3 0 3 0 AMC (OSL) 1 0 1 0 Canal Horizons 5 0 5 5 Rascom 794 0 794 794 Ico 533 -533 0 0 Technopole 8 0 8 8 Jeune Afrique 100 -50 50 50 Orange Services Group 0 0 0 4 420 Guilab 3 785 0 3 785 3 681 Teranga Capital 446 0 446 446 GIM UEMOA 12 0 12 12 5 686 -583 5 103 9 416

7 - Net inventory Gross Prov 2018 2017 14 345 -1 188 13 157 14 236 Gross inventory essentially consists: - fuel: 8 million - lines and networks supplies : 3 322 million - terminals for subscribers: 4 866 million - phone cards: 2 651 million - peritelephony: 1 106 million - internet keys: 226 million - office furniture: 132 million - in-route inventory: 2 040 million The decrease is explained partly by the disposal of terminals (-1 584 million), phone cards (-763 million), and peritelephony (-200 million), and the other hand by the storage of lines and network supplies (+840 million) and of in-route inventory (+840 million). Inventories considered dead (disqualified), dormant (unused for a year) and defective are depreciated at a 100%. 51 Notes on the consolidated accounts (in million XOF unless otherwise specified)

8 - Net Accounts Receivable Gross Prov 2018 2017 - Receivables residential customers 53 643 -27 156 26 487 34 562 - Receivables Clients State 10 958 0 10 958 13 196 - Receivabless Clients Operators 67 500 -3 148 64 352 43 542 - Services to be billed 27 938 0 27 938 29 652 160 039 -30 303 129 735 120 951

The decrease in residential clients receivables is a result of an improvement in collection.

Receivables state (Government of Senegal) is still decreasing with the government plans to decrease its phone bill.

The increase in receivables operators results from a collection problem with the operators TIGO, EXPRESSO and HAYO in Senegal.

Services to be billed take into account billing for December or the fourth quarter for 2018 for mobile and fixed lines, internet, business solutions, hubbing, roaming, as well as national and international interconnection.

Doubtful debts are 100% provisioned based on seniority: - fixed line residential clients for over 6 months, - mobile clients for over 90 days, - operators (Africa, Latin America and Asia) for over 12 years and on a case-by-case basis for other countries.

Receivables are considered as bad debts and written off after 5 years apart for operators subject to the discretion of the portfolio managers.

52 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

9 - Other Net Receivables Gross Prov 2018 2017 - Advances and payments to suppliers 10 701 0 10 701 5 472 - Advance and payments to staff 600 -53 547 685 - State taxes and taxes receivable 86 416 0 86 416 75 297 - Current accounts of the group's companies 1 658 0 1 658 5 966 - Other debtors 53 662 -192 53 470 32 379 - Regulatory account - Asset (conversion differences) 2 528 0 2 528 2 629 155 564 -245 155 319 122 428

The increase in advances and payments to suppliers is attributable to credit notes accounted for from international operators by Sonatel Mobiles (2 963 million), Orange Guinea (1 363 million), suppliers advances for OSL (8 931 million), plus an advance of 1 168 paid by Sonatel to Main One for the project for the submarine cable.

The considerable increase in taxes is largely due to IS and IRVM advances paid in the different countries of presence and to tax credits.

The payment by Orange SA of an old receivable on Sonatel justifies the decrease in the balance in the Group’s companies current accounts.

The increase by 21 091 million in other debtors is explained by the acquisition of shares to be distributed to the staff in Senegal (+1 865 million), the increase in CSM receivables (+1 417 million) due to rejected settlements that were to the profit of Sonatel, because of issues related to bank details (resolution in-progress), the transitional account associated with the SYSCOHADA reform (1 706 million), operators netting in OSL (8 945 million) as well as ATD.

NB: Foreign currency receivables are valued at closing price. 53 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

10 - Net Cash Assets 2018 2017 - Banks 218 856 157 578 - UV Orange Money in circulation (electronic money) 88 780 66 286 - Cash register 1 216 534 - Treasury 5 465 3 386 - Investment assets 3 123 3 556 317 439 231 339 There is a increase of 61 091 million in bank balances.

UV Orange Money in circulation is growing thanks to the development of e-money issuance and distribution to satisfy demand.

The increase in balance in Treasury results from an outsourcing of the collection for roaming to the clearing house.

The decrease in investment assets is explained by the evolution of the equity portfolio mechanism.

54 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified) 11 - Equity 2018 2017 - Capital 50 000 50 000 - Unavailable reserves 23 037 22 710 - Other reserves 412 178 413 579 - Regulated reserves 48 484 48 484 - Share premium, issuance and fusion 3 387 3 319 - Conversion gap 819 -3 688 - Retained earnings -22 730 -20 648 - Profit attributable to parent company 172 467 172 454 - Quote minority 29 784 29 732 717 426 715 941 Unavailable reserves correspond to the legal reserve capped at 20% of the social capital of each company.

Other reserves are free reserves amounted annually during profit allocations.

Regulated reserves only account for the provision for the renewal of tools and equipment.

The exchange differences are due to the impacts in conversion of the opening capital of Orange Guinea (Guinean Franc) and of Orange Sierra Leone (Leone).

The balance for retained earnings corresponds to the net losses of Orange Finances Mobiles Senegal and Orange Sierra Leone.

Overall, change in equity from 2017 to 2018 results from the allocations of profits in reserves and a non-Group dividends distribution for the amount of 195 404 million. 55 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

12 - Financial liabilities and Assimimilate Ressources 2018 2017 - Deferred taxes - liabilities 649 661

Deferred taxes – liabilities are generated by the tax adjustment of the gains to be reinvested from the disposal of buildings.

13 - Loans and Financial Debts 2018 2017 - Bank loans 185 506 152 043 - Security deposits 1 912 1 837 - Accrued interest 2 634 4 449 190 053 158 329

The increase in bank loans is due to subscription to new funding in Mali (+45 billion), in Sierra Leone (Orange shares) and to the reimbursements paid by Sonatel for 14 745 million.

Security deposits consist of payments made by clients as an advance on consumption for taken subscriptions.

56 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

14 - Provisions of risks and charges 2018 2017 - provisions for disputes 9 989 3 270 - provisions for risks 3 635 4 232 - pension provisions 20 915 18 517 - provisions for other charges 37 754 33 674 72 293 59 694 Provisions for risks and charges increased due to: - provisions for fiscal risk at Sonatel; - change in calculation method for retirement provisions following the SYSCOHADA reform that calls for the evaluation of the retirement commitments using the actuarial method. An actuarial firm accompanied the entities of the Sonatel Group in the before mentioned process; - provisions for the spread of the acquisition costs for the complementary shares distributed to the staff. 15 - Accounts payable 2018 2017 Trade suppliers 199 630 199 801 Invesment suppliers 64 603 73 216 264 233 273 017

Trade payables globally decreased with reliability works notably in Senegal with the switch to unconfirmed long-outstanding balances.

NB: The contract term for supplier credit is on average 60 days upon receiving the invoice.

57 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified) 16 - Other liabilities 2018 2017 - Social and tax liabilities 161 589 131 560 - Current accounts 3 127 1 460 - Customers - advances received 7 886 7 269 - Other payables 131 880 100 500 - Regulatory account liabilities (conversion differences) 249 277 304 730 241 065

The decrease in social liabilities by 3 073 million is mainly due to full payment of December performance bonus, contrary to previous years during which only advances were paid.

Tax liabilities comes up to 149 720 million.

The increase in the current accounts is attributable mainly to the Orange SA account balance in Sierra Leone.

Payables Clients increased by 1 649 million as credits granted to operators decreased following the implementation of net rates.

The increase in other liabilities results from Orange Money's payables with the emission of electronic money and the operators netting in OSL.

17 - Treasury Liabilities 2018 2017 Banks 223 989 146 956

The increase in bank credit balance 77 032 million results from a recourse to spot credit. 58 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified) 18 - Turnover

Turnover is comprised of: 2017 2018 Var. - Fixed line 28 854 30 202 -4,5% - Mobile (data included) 733 481 670 788 9,3% - Orange Money 62 793 46 149 36,1% - Internet fixed lines 43 560 39 979 9,0% - National Interconnection 29 943 34 427 -13,0% - International interconnection 97 357 124 580 -21,9% - Other wholesale (LL, Roaming, Operators) 10 762 13 124 -18,0% - Data and Integration 11 593 11 219 3,3% - Other revenues 3 613 2 434 48,4% 1 021 956 972 902 5,0%

The consolidated turnover increased by 5% as a result of: - 4.5% decrease in the fixed line due to a continuous drop of its activities; - 9.3% growth with the mobile thanks to a sustained strong commercial position, the development of usages (data, VAS); - powerful growth of Orange Money by 36.1%; veritable growth relays, growth in Orange Money compensate for the loss in Voice and Text; - 9% progression of the internet fixed line through the development of Internet offers; - 13% decrease in national interconnection pushed by the retroactive decrease in tariffs in Senegal and Mali; - stronger decrease in international interconnection (21,9%) linked to the decrease in international incoming traffic with the augmentation of OTT; - 18% decrease in other wholesale products driven by operator’s Roaming in Senegal and Sierra Leone, and leased lines in Senegal; - 3.3% hike for integration; - increase in other revenues +48.4%. 59 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified) 19 - Consumptions

Consumptions for the year are: 2018 2017 Var. - Purchases 61 094 59 122 3% - Transport 2 244 2 114 6% - External services 345 745 335 081 3% - Taxes 46 093 39 746 16% - Other expenses 25 099 16 042 56% 480 276 452 106 6%

The increase in purchases is attributable mainly to the increase in consumption fuel and electricity in the technical sites in Guinea, Mali and Senegal to a lesser extent. The purchase of terminals increased in Senegal to accompany the development of fiber, as well as the vulgarization of data usage; same goes for the modems (livebox, flybox). The purchase of phone cards decreased notably in Senegal, Mali and Guinea with the development of e-charge. The development of the integration offer also brought an increase in the purchase of lines and network supplies.

The small increase in transport costs is due to travel expenses.

The variation in external services is a decrease in relative terms (+11% in 2017 and +3% in 2018). The significant activities that explain the increase in external services are: - an increase in the outsourcing and maintenance of the networks following the externalization of some activities: ANO royalties in Mali, ANO and GNOC royalties in Guinea and the deployment of fiber in Senegal, - an increase in commercial fees, notably those related to Orange Money (service fees on transactions, distributor service fees indexed on turnover), - a decrease in international revenues with the decline in international incoming traffic and volume as a result of the OTT, - a decrease in expenses for leased satellites with the optimization of bandwidth, - repayments for VAS to SMS+ partners and other service platforms increased following the development of value added services and the growth of data, - an increase in guarding and security charges, notably in Mali with an on-site management of security with the transfer of ANO to Huawei, - an increase in honorary paid to computer experts, - an increase in other charges indexed on turnover notably management fees paid to Orange, brand fees. The increase in taxes is explained by a boost in the following charges indexed on turnover: TARTOP in Mali, TARTEL in Guinea and CST in Senegal (1% rate increase) despite the gain realized in Senegal on the deductibility of V.A.T for OFMS.

The increase in other expenses is due to a depreciation of "para official" clients and receivables on the CSU operator in Senegal. 60 Notes on the consolidated accounts (in million XOF unless otherwise specified)

20 - Other charges 2018 2017 Var. - Staff costs 108 417 93 625 16% - Depreciation, amortization and provisions 168 955 160 593 5% - Financial expenses 24 753 18 971 30% - Expenses excluding Ordinary Activity of Corporation tax 13 084 19 168 -32% 315 210 292 357 8%

The increase in staff expenses comes mainly from Senegal and is due to a three-year increase in salaries, retirement and pre-retirement benefits. Correlatively, career-end special bonus equivalent to the complementary shares for career-end increased, as well as performance bonuses and provisions for vacations calculated on payroll.

Depreciation increased in all countries of presence. This can be explained by a sustained level in investments in these last years to support growth in data and meet the requirements for quality of service in the different countries. The increase in provisions is due to a change in the evaluation method for the retirement provision with the SYSCOHADA reform (actuarial method), the provision for fiscal risk in Senegal, and attenuated by the provision for the loyalty bonus (impact of the regulation effect on "PE" shares in 2017.

Financial expenses increased by 5 782 million due to the bank loan taken in Mali, loans granted by Orange SA to OSL and the recourse of Sonatel to spot credits.

O.O.A expenses went down by 6 084 million after the strong increase recorded in 2017.

61 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

21 - Other income 2018 2017 Var. - Other operating income 37 175 16 800 121% - Reversals of provisions and expense transfers 8 764 19 718 -56% - Immobilized production 2 040 4 687 -56% - Financial income 11 236 10 312 9% - Products out of Ordinary Activity 9 659 17 507 -45% 68 874 69 024 0%

The increase in other operating income is due to numerous adjustments completed during the year, and effects from the decrease in 2017.

Reversals of provisions corresponds to the annulment of redundant provisions from 2017. The can be explained by their significant level in 2017.

The decrease in immobilized production is a result of charges related to information technology project no longer being systematically immobilized .

Financial income comes from financial investments.

Revenue outside the Ordinary activity decreased with the decline in income from sales of fixed assets.

62 Sonatel : 2018 Financial Results Notes on the consolidated accounts (in million XOF unless otherwise specified)

22 - Off-balance sheet commitments

In 2018, the Group received and distributed off balance sheet commitments as follows:

a) - Guarantees received 2018 2017 - Guarantees from providers 5 082 2 843 - Staff pledged shares 743 843 5 826 3 686

b) - Guarantees given 2018 2017 - Blocked term accounts for AFD Dakar 94 0 300 - Customs credit deposits 1 400 700 - Market bid deposits 4 647 1 007 - Irrevocable lease term deposit 0 795 - Certificate of financial standing 0 5 400 6 047 8 202 23 - Events after balance sheet date

NRT

63 Sonatel : 2018 Financial Results Accounting methods and principles

• Consolidation principles . Intangible assets Subsidiaries under exclusive control are consolidated They are amortized over a five-year period. using the full consolidation method. Cf. page 5: consolidation scope Disassociated software (invoiced separately • Financial statements presentation from the computer equipment) are capitalized Financial statements are prepared in accordance and amortized on a estimated useful life of 3 with the SYSCOA method: balance sheet, income years. statement, cash flow statement (TAFIRE), notes, appendices. Exchange differences to distribute are evaluated in accordance with foreign currency operations principles. • Basis of preparation of financial statements Financial statements are prepared on a historical cost basis and presented according to the principles and methods accepted in the countries of presence. They comply with the West African Accounting System (SYSCOA) in place since January 1st, 1998.

64 Sonatel : 2018 Financial Results Accounting methods and principles

• Tangible assets . Other current assets They are evaluated at their acquisition cost which They consist of home loans and personnel vehicles, consists of the purchasing price and approach expenses government loans to the staff to acquire shares of and amortized under the straight line approach over the the group (10%), security and guarantee deposits below specified estimated periods: paid on water and electricity subscriptions as well as prepaid rents and equity.

The assets are recorded and evaluated at their historical cost.

On securities, depreciation provisions are taken into account when the closing value is inferior to the historical cost.

Closing value is either the stock price of the listed securities; or net asset value for the unlisted securities. Fixed assets in progress are recorded at their acquisition cost and re-classed as tangible once in service.

65 Sonatel : 2018 Financial Results Accounting methods and principles

• Inventories . Receivables Inventories are evaluated at the weighted  Accounting services to Local customers average cost of purchase. Services to local customers are invoiced in XOF Retained value for local purchases on the issue date of the bill and recorded in the 41 corresponds to the non-revisable historical accounts. Unbilled services by the closing date are cost cited as annex in the market contract. recorded in the 418 accounts (Accrued income). Purchasing cost of imported products corresponds to market plus customs duties Sold top-up cards that are unused are recorded as and transit fees. deferred revenue. Depreciation provisions are applied at a 100% on defective, dormant (inventory that Doubtful debts from residential clients are registered no activity for a year) and dead depreciated at a 100% when: (declassified or unused inventory for 3 years) left unpaid for more than 6 months for the fixed inventories. line; left unpaid for more than 90 days on the mobile

66 Sonatel : 2018 Financial Results Accounting methods and principles

 Accounting for revenue from International Exchange rate gains and losses are recorded in the traffic balance sheet in accounts 478 and 479 “conversion • Traffic balances are recorded on a monthly, bi- variance”. monthly or quarterly basis depending on the Receivables from the foreign correspondent are account balance for the month, two-month depreciated on a case-by-case basis depending on the period or quarter, as a credit or debit line once creditworthiness of the correspondent. accepted by the concerned foreign correspondent. . Foreign currency transactions Foreign currency operations are converted at the A provision is calculated year-end for all traffic exchange rate prevailing on the date they are recorded. balances not yet accepted. They are recorded in Foreign exchange differences are recorded as currency 418300 accounts (Accrued income) when the gains or losses on the settlement date. balance is in favor of Sonatel and as Accrued liabilities otherwise in the Accrued expenses Foreign currency accounts are converted at the payable account (408400). exchange rate prevailing on closing date. Potential currency gains are recorded as exchange rate gains or losses rather than as revenues. Unrealized exchange rate losses give rise to a provision for risks.

67 Sonatel : 2018 Financial Results Accounting methods and principles

 Income statement . Provisions for risks liabilities and charges

Unrealized exchange rate losses on operations  Disputes over a year old are recorded as liabilities in the “Provision for exchange rate losses” account All potential risks associated with litigations with third and the counterpart is reported to the assets in parties are provisioned according the information account 478 “Exchange rate differences”. provided by group’s legal services. Unjustified provisions are accounted for in the income statement. Unrealized exchange rate losses on less than a year-old operations are recorded in 679 with a  Retirement benefits credit to account 499. Due employee benefits at the time of retirement or in Losses in the cash accounts are reported in the the case of a contractual framework are subject to a income to offset the Cash account. provision for expenses. With the SUSCOHADA reform • Investment grants effective since January 1st, 2018, the provision was They are transferred to the Accruals and evaluated according to the actuarial method. deferred liabilities. The offset is recorded on the Deferred taxes income statement. Deferred taxes are recorded to offset to the temporary effect of revenues and expenses due to tax considerations. The liability method is applied.

68 Sonatel : 2018 Financial Results Accounting methods and principles

• Electronic money

Orange Money is a mobile payment offering marketed by e-money institutions “EMI” certified by BCEAO or the central bank of Guinea It consists of issuing and distributing electronic money or units of value that can be used for commercial transactions. Currency in circulation is recorded in the 514xxx cash account and offset as debts posted to the 472xxx accounts by category (vendors, biller, merchants and end-consumer). Issued money not distributed stay in the “EMI” main cash account. Paid commissions are posted as expenses and offset as revenues.

69 Sonatel : 2018 Financial Results 2018 Dividend draft resolution

DRAFT RESOLUTION : FISCAL YEAR 2018 INCOME ASSIGNMENT

• The Shareholders’ Assembly approves the proposal of the Board of Directors and will allocate the entire profit of SONATEL SA for the year ended December 31st, 2018 to dividends. • In addition, the Shareholders’ Assembly decides to take XOF 59,727,203,951 from free reserves for dividends pay-out. • Consequently, the Ordinary Shareholders’ Assembly sets the gross dividend due on each share at XOF 1,667. • After deduction of the IRVM withholding tax of 10%, XOF 1,500 net dividend will be paid per share from May 14th, 2019.

70 Sonatel : 2018 Financial Results t h a n k y o u