Despite the decline in Maroc Telecom's 2021 quarterly results, they remain in line with our annual growth forecasts. In more detail, revenue, EBITDA and NIGS show annual achievement rates of 24%, 24% and 25% respectively.

An expected decline in Morocco’s activity, limited by Fixed Data
In Q1-21, Maroc Telecom shows a much anticipated drop in its revenue in Morocco of -9.5%.
This is explained by the decline in Mobile activity of -16.3% in a less favourable competitive and regulatory environment compared to the first quarter of 2020.
However, it is comforting to see the good dynamics in the Fixed Broadband activity. This posted a quarterly growth of + 11.9%, supported by the continued expansion of the ADSL Internet fleet, which grew by + 9.2% to 1.8 Mn subscribers in Q1-21.

Mobile Data and Mobile Money drive international revenue
The Group's international revenue increased by 2.0% to MAD 4.3 Bn, reaching almost 45% of consolidated revenue. International growth was supported by the solid momentum of the Data Mobile and Mobile Money services, which posted respective quarterly growth of 15.8% and 21.9%.

Significant resilience of margin levels
Despite a more restrictive regulatory and competitive environment, Maroc Telecom managed to maintain an EBITDA margin above 51.0%. This performance is attributed to the Management’s leeway in the optimization of its operating costs both in Morocco and in its African subsidiaries.

Toward a return to a DPS above MAD 6.0 starting from 2021
In our opinion, the CFFO's decline of -7.3% over this first quarter would not reflect the annual trend for 2021. The operator's ability to defend its margin levels and control of its investment levels would support cash generation. Under these conditions, the Group would be able to return to a DPS above MAD 6.0 starting from 2021, i.e. a recurring dividend yield superior to 4.0%.

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