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.