Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release

Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Abu Dhabi, March 4 th 2014: Etisalat announced today its consolidated financial statements for the twelve months ending 31 st December 2013. Financial Highlights for FY 2013 Aggregate net subscribers grew by nine million to 148 million in FY2013; Full-year consolidated revenues grew to AED 38.9 billion; representing an 18% increase from 2012; Double digit growth in EBITDA to AED 18.9 billion representing a 12% increase year on year; Net profit after Federal Royalty up by 5% to AED 7.1 billion; Consolidated capital expenditures increased by 52% to AED 6.3 billion; Improved financial flexibility with net cash balance of AED 9.6 billion; Proposed final dividend of 35 fils per share bringing full year proposed dividend to 70 fils per share; and Total dividend payout of 70 fils per share for 2013, which is consistent with the payout for 2012, represents dividend payout ratio of 78% and a dividend yield of 5.8%. Financial Highlights for Q4 2013 Four million net new subscribers added during the fourth quarter of 2013; Fourth-quarter consolidated revenues of AED 9.8 billion, up 15% YoY; Consolidated EBITDA of AED 4.4 billion increased YoY by 2%; Net profit after Federal Royalty increased by 70% to AED 1.4 billion; and Consolidated capital expenditures of AED 2.1 billion, an increase of 46% YoY. Key Developments in FY 2013 Etisalat and Vivendi signed a share purchase agreement relating to the acquisition of Vivendi s 53% stake in Maroc Telecom; Acquired a Universal Mobile Service License in Benin; Ufone launched Mobile Financial Services Upaisa ; Etisalat launched its mobile commerce platform Flous in 9 of its operating markets to reach a total of 11 countries; Etisalat joined Machine-to-Machine (M2M) World Alliance; and Agreement with China Telecom Europe to use Etisalat s Smarthub in the region Statement from H.E Eissa Al Suwaidi, Chairman of Etisalat Group Etisalat Chairman H.E. Eissa al-suwaidi said: 2013 has been a year of tremendous progress for Etisalat. We continued to develop our core services within existing markets while, at the same time, expanding our footprint in new international markets. The results for the year reflect substantial advances in our strategy, demonstrated by subscriber growth, supporting revenue and EBITDA increases of 18% and 12% respectively. Given such strong financial performance, the board decided to recommend total dividend payout of 70 fils per share for the year 2013. Page 1

Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Etisalat Group is in a strong position to embrace the changes that are enveloping the telecoms industry and have enabled it to continue to add value to customers, shareholders and the communities in which we operate. We will continue to focus on providing a unique experience and superior service in the future. By putting customers at the heart of everything we do, we are enabling our current success and planting the seeds of future growth. Etisalat s growth to become one of the industry s largest companies brings new opportunities. As we think about what the future holds for Etisalat and our investors, we know that our continued growth will be driven by our ability to innovate and by our aptitude for identifying new investment opportunities. Our progress in these regards during 2013 gives me confidence in our future. Finally, I would like to thank the leadership of the UAE for their continued and unwavering support, our employees for their dedication and most of all our customers for their loyalty and faith in our services. On the back of such a successful year, we are looking into the future with confidence that we will continue our emergence as one of the best telecoms operators in the world. Statement from Ahmad A Julfar, CEO of Etisalat Group Ahmad Abdulkarim Julfar, Group Chief Executive Officer, Etisalat, commented: Etisalat has achieved considerable progress in 2013. We have maintained positive momentum within our financial results and we have continued to invest in both the scale and service provision of the Group. Our singular focus in 2014 and beyond is to Aspire Forward. While profitability and value creation remain our core areas of focus, Etisalat s strategy is for the long term. The consolidated capital expenditure put in place during 2013 has further reinforced our platform for growth into the future. Etisalat is now the enabler of many innovative services, most noticeably in government. A clear example of this is the electronic government which we have seen in the UAE for many years and which was reinforced further by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President & Prime Minister of UAE, Ruler of Dubai in his mobile government vision. We are delighted with the progress being made in the UAE and we are working with many ministries on different turn-key projects. Some of these are based on our experiences in other markets, especially in the fields of Identity, Health, Education and Finance. All this is testament to our visionary government and the healthy growth which has created potential far beyond expectations. Etisalat has proved that mobile finance technologies can be secure and life-changing across its footprint in places such as Afghanistan, Tanzania and recently in Sri Lanka, Egypt and Niger. Mobile money technology is now at a very mature level, is extremely secure and offers significant benefits for communities, particularly those with lower incomes. In the UAE, we continued to cement our position as the leading operator in the country despite further competitive pressures. We have continued to be the dominant force in mobiles, driven by our competitive pricing, innovative service offerings and the high quality of our network. Continued improvements in customer service have also engendered a spirit of loyalty among our customers. We also have strong growth in the data and internet segments, and revenues will continue to grow as we Page 2

Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release benefit from our investment in infrastructure, including the establishment of the world s most extensive Fiber- To-The-Home (FTTH) network. By utilising best technological and innovative solutions globally available, we are connecting government, businesses and individuals to the services they demand at exceptionally fast speeds. There have also been many other positive developments this year; higher revenues, additional operations and successful initiatives. However, we must always focus on the goal of long-term success through innovation, strong performance and progress. Innovation is at the heart of all we do. For this company to continue to grow, we need to innovate and integrate new technologies to exceed our customers increasing demand and expectations. To bring in the next era of super-speed internet connectivity, Etisalat Group and Huawei will work together to trial ultra-fast 40Gbps GPON Technology across Etisalat Group footprint in the coming four years. Etisalat Group and Huawei are also cooperating in the development of 5th generation (5G) mobile broadband. We still have a lot of work to do to build our capabilities and launch services in areas such as M2M, e- commerce, video and cloud services. With the support of our Government, shareholders, employees and customers, I am confident that Etisalat will do so and that it will deliver on its strategy of becoming a leading international telecommunications provider. Update on Maroc Telecom Transaction On November 4, 2013, Etisalat and Vivendi signed a Share Purchase Agreement for the acquisition of Société de Participations Dans Les Telecommunications ( SPT ), which directly owns Vivendi s 53% stake in Itissalat Al- Maghrib ( Maroc Telecom ). The Sale and Purchase Agreement contains a total purchase price for SPT of Euro 4.2 billion (equivalent to AED 21.3 billion), of which Euro 3.9 billion is attributable to the 53% stake in Maroc Telecom. The remainder of the consideration (Euro 0.3 billion) is attributable to the dividend received by SPT from Maroc Telecom in respect of the 2012 financial year, equivalent to MAD 7.40 per share, which has been retained by SPT. Closing of the transaction is subject to a number of conditions. These conditions include, among others, the execution of a shareholders agreement with the Kingdom of Morocco regarding Maroc Telecom and securing competition and regulatory approvals in the Kingdom of Morocco and certain other jurisdictions in Maroc Telecom s footprint. Closing of the transaction is expected before the end of May 2014. Page 3

160 140 120 100 80 60 40 20 0 Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Q4 12 Q3 13 Q4 13 QoQ Growth YoY Growth FY 12 FY 13 YoY Growth Subs (m) 139 144 148 +3% +7% 139 148 +7% Revenue (AED m) 8,479 9,594 9,774 +2% +15% 32,946 38,853 +18% EBITDA (AED m) 4,279 4,617 4,372-5% 2% 16,855 18,901 +12% EBITDA Margin 50% 48% 45% -3pp -6pp 51% 49% -3pp Net Profit 854 1,825 1,453-20% +70% 6,742 7,078 +5% Net Profit Margin 10% 19% 15% -4pp +5pp 20% 18% -2pp EPS (AED) 0.11 0.23 0.18-20% +70% 0.85 0.90 +5% Subscribers 139 144 148 Etisalat Group aggregate subscriber number grew by 7% on an annual basis to 148 million in 2013 and a 3% quarter over quarter growth by December 2013. The net addition of 9 million subscribers in the year was mainly a factor of good subscriber growth in the UAE, Saudi Arabia, Egypt, Nigeria, Benin and Togo markets. Global Subscribers (m) In the UAE, the active subscriber base grew to 10.4 million subscribers in 2013 representing YoY growth of 16% and QoQ growth of 2%. Attractive promotional campaigns and new products and services led to the mobile subscriber base growing at 19% to 8.4 million subscribers from 7.0 million. Fixed line subscribers declined to million representing a 5% decrease from the previous period. However, this is mainly attributed to the transition of customers to the elife segment (i.e. double play and triple play). The elife segment had a growth rate of 30% for the year to 0.7 million customers. Africa cluster aggregate subscriber base, increased to 28.9 million at the end of December 2013 representing YoY increase of 7%. Asia cluster aggregate subscriber base reached 36.3 million at the end of December 2013, declining by 1 %. Page 4

12. 0 10. 0 8.0 45. 0 40. 0 35. 0 30. 0 25. 0 20. 0 15. 0 10. 0 8.0 7.0 3.0 Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Revenues 8.5 9.6 9.8 Etisalat Group s full year consolidated revenue increased YoY by 18% to AED 38.9 billion driven by strong performance of domestic operations and the consolidation of Pakistan operations. Consolidated revenue growth during Q4 13 was AED 9.8 billion representing an increase of 15% in comparison to the same period of last year. Revenue (AED Billion) 38.9 32.9 FY'12 FY'13 Revenue (AED Billion) In the UAE, revenue for the full year grew by 9% to AED 24.8 billion as a result of subscriber growth, increase in demand for data services and higher handsets sales. Revenues of AED 6.3 billion in Q4 13 were 7% higher than the previous period. Full year revenue from international operations increased by 47% YoY to AED 13.8 billion, representing 36% of consolidated revenues. While in Q4 13 revenue increased by 43% to AED 3.4 billion in Q4 13. In Egypt, annual revenue of AED 4.7 billion was down 7% from prior year mainly impacted by currency devaluation. However, revenue in local currency evidenced single digit growth due to an increase in the post-paid customer base, growth in the data segment and handset sales. Similarly, in Q4 13 revenue increased by 2% to AED 1.3 billion due to higher terminal sales. Africa Cluster consolidated revenue grew by less than 1% to AED 2.8 billion in 2013. Performance was mainly impacted by competitive pressure in Ivory Coast and currency devaluation in Sudan. In Q4 13 revenue for the Africa cluster was flat at AED 0.7 billion. In 2013 the Asia Cluster benefited from the inclusion of full year results of Pakistan operations with revenue growth for the year increasing three-fold to AED 6.3 billion. In Q4 13, revenue was AED 1.4 billion. Excluding Pakistan operations, full year and Q4 13 revenue would have declined by 4% and 5% respectively. Operating Expenses 6.1 6.9 Consolidated operating expenses for 2013 was AED 24.6 billion, an increase of 26% from the previous year. Q4 13 consolidated operating expenses was AED 6.7 billion, an increase of 33% YoY. This increase is mainly due to the consolidation of PTCL Group, and higher cost of sales due to growth in handset sales. Key components of operating expenses are: Operating Expenses (AED Billion) Staff expenses increased to AED 5.1 billion for 2013 and AED 1.4 billion in Q4 13 representing a YoY increase of 15% and 9% respectively. While as a percentage of revenues staff costs decreased one point to 13% in the full year and also decreased by one point to 14% for Q4 13. The increase in staff costs was mainly driven by consolidation of operations in Pakistan. Page 5

30. 0 25. 0 20. 0 15. 0 10. 0 4.5 3.5 3.0 2.5 1.5 0.5 20. 0 18. 0 16. 0 14. 0 12. 0 10. 0 8.0 Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release 19.5 24.6 Direct cost of Sales for the full year increased by 22% to AED 8.7 billion and for Q4 13 decreased by 15% to AED 2.2 billion. As a percentage of revenue, direct costs remained flat at 22% for 2013. While in Q4 13, as a percentage of revenues direct costs decreased by 8 points to 23%. FY'12 FY'13 Operating Expenses (AED Billion) Depreciation and Amortization expense increased by 36% in 2013 to AED 4.6 billion and for Q4 13 increased by 53% to AED 1.2 billion. As a percentage of revenues in 2013, depreciation and amortization expenses increased by 2 points to 12% and for Q4 13 it increased by 3 points to 13%. Other operating expenses increased by 36% to AED 6.1 billion in 2013 representing 25% of revenues and for Q4 13 grew four-fold to AED 1.7 billion as a result of consolidation of Pakistan and high network and marketing expenses. EBITDA 4.3 4.6 4.4 EBITDA (AED Billion) 18.9 16.9 FY'12 FY'13 EBITDA (AED Billion) Group Consolidated EBITDA for 2013 grew to AED 18.9 billion representing a YoY growth of 12%. EBITDA growth was mainly due to increase in revenue and flow through to EBITDA. EBITDA margin declined by 3 points to 49% in FY 13. In Q4 13 consolidated EBITDA was AED 4.4 billion representing a YoY increase of 2%. EBITDA margin in Q4 13 was 45% representing a 6 point decrease YoY. This decline was mainly due to higher interconnect & termination costs, higher proportion of low margin handset sales, higher staff costs, network and marketing expenses as well as diluting impact of consolidation of Pakistan operations in 2013. In the UAE, EBITDA in 2013 increased YoY by 4% to AED 1 billion leading to an EBITDA margin of 57% in comparison to 59% in the previous year. For Q4 13 EBITDA margin was 53%, 5 points lower than the same period of last year. This decline is attributed to a higher proportion of low margin devices costs and higher interconnection costs. EBITDA of international consolidated operations in 2013 increased YoY by 41% to AED 4.1 billion resulting in 17% contribution to consolidated EBITDA. In Q4 13, EBITDA for international consolidated operations grew YoY 43% to AED 0.9 billion. In Egypt, EBITDA for 2013 declined by 19% to AED 1.6 billion due to higher network costs supporting network expansion, higher cost of sales and marketing expenses, and a one-off provision for an interconnection dispute with another mobile operator. This resulted in EBITDA margin declining by 5 points to 34%. Adjusting for the impact of the one-off, EBITDA Margin would have been 36%. In Africa cluster, EBITDA for FY 13 declined YoY by 25% to AED 0.5 billion and EBITDA margin fell by 6 points to 19%. In Q4 13 EBITDA declined to AED 73 million mainly due to one-off provision in Atlantique operations. Adjusting for this provision EBITDA margin in FY 13 would have been 22% and 23% in Q4 13. In Asia Page 6

1.8 1.6 1.4 1.2 0.8 0.6 0.4 0.2 7.0 3.0 1.8 1.6 1.4 1.2 0.8 0.6 0.4 0.2 0 0.9 0 0.8 0 0.7 0 0.6 0 0.5 0 0.4 0 0.3 0 0.2 0 0.1 0 0 Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release cluster, EBITDA for FY 13 increased to AED 1.9 billion and EBITDA margin increased to 31%. In Q4 13 EBITDA was AED 0.4 billion with an EBITDA margin of 31% up from 15% in the previous year. This is as a result of the consolidation of operations in Pakistan. Federal Royalty 1.8 0.6 0.5 Royalty (AED Billion) 6.5 6.1 In December 2012 a new royalty mechanism for telecom operators was established by the Federal Government in the UAE. As per the new royalty mechanism, Etisalat is required to pay 15% royalty fee on the UAE regulated revenues and 35% of net profits after deduction of 15% royalty fee on UAE regulated revenues. Royalty on foreign profits are netted off with the corporate taxes paid/payable in foreign country. Full year royalty in 2013 amounted to AED 6.1 billion, declining by 5% YoY. This resulted in an effective royalty rate of 46.3% in comparison to 48.9% in the prior year. In Q4 13 royalty amounted to AED 0.5 billion representing a decline of 6% YoY. FY'12 FY'13 Royalty (AED Billion) Net Profit and EPS 1.8 1.5 0.9 0.11 0.23 0.18 Net Profit (AED Billion) EPS (fils) Consolidated net profit after Federal Royalty increased year-over-year by 5% to AED 7.1 billion in 2013. In Q4 13 net profit after Federal Royalty was AED 1.5 billion, an increase of 70% YoY. Despite higher depreciation and amortization charges, taxes and lower finance income, net profit improved due to higher share of results of associates, and lower impairment charges and other losses, and lower Federal Royalty. Earnings per share (EPS) increased to 90 fils in FY 13 and in Q4 13 it increased to 18 fils. On 4 th of March 2014 the Board of Directors has resolved to propose a final dividend for the second half of 2013 at the rate of 35 fils per share, bringing the full year dividend to 70 fils per share. This proposal is subject to Page 7

2.5 1.5 0.5 Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release 8.0 7.0 3.0 6.7 85 7.1 90 100 95 90 85 80 75 shareholder approval at the Annual General Meeting scheduled for the 26 th March 2014. Final dividend to be paid on 13 th of April 2014 to the shareholders registered as at the closing of the register on Sunday, 6 th April 2014. 70 FY'12 FY'13 65 Net Profit (AED Billion) EPS (fils) CAPEX 2.1 1.5 1.3 CAPEX (AED Billion) Consolidated capital expenditures increased YoY by 52% to AED 6.3 billion resulting in capital intensity ratio of 16% in 2013. Capital expenditure during the year focused on network expansion, network capacity and universal mobile license acquisition in Benin. Consolidated capital expenditures for Q4 13 increased YoY by 46% to AED 2.1 billion resulting in capital intensity ratio of 22%, up 5 points from prior year. In the UAE, capital expenditures in 2013 increased by 12% to AED billion while capital intensity ratio remained stable at 8%. For Q4 13 capital expenditures was AED 0.5 billion declining by 4% over the same period of last year. Capital expenditure focused on ensuring network leadership by enhancing network quality and coverage. 7.0 3.0 4.2 13% 6.3 16% 100 95 90 85 80 Capital expenditures in consolidated international operations in 2013 increased by 94% to AED 4.3 billion and in Q4 13 grew by 79% to AED 1.6 billion and represented 77% of total capital expenditures in Q4 13. In Egypt, full year capital expenditures increased by 5% to AED 1.2 billion as compared to the same period of last year resulting in a capital intensity ratio of 26%. In Q4 13 capital expenditure was AED 0.5 billion and capital intensity ratio was 36%. FY'12 FY'13 CAPEX (AED Billion) Capital Intensity 75 70 65 In Africa cluster, capital expenditures in 2013 increased significantly by 156% to AED 1.2 billion due to universal mobile license acquisition in Benin and acceleration of network deployment in Benin and Togo. This resulted in a capital intensity ratio of 44%. Adjusting for capital expenditures for the universal mobile licence acquisition in Benin; capital intensity ratio would have been 31%. In Q4 13 capital expenditures was AED 0.4 billion resulting in a capital intensity ratio of 61%. In Asia cluster, capital expenditures increased more than two-fold to AED 1.8 billion for the year and AED 0.7 billion for the quarter due to the consolidation of operations in Pakistan. In Page 8

7.0 3.0 Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Q4 13 Capital intensity ratio of 51% was impacted for acquisition of additional EVO spectrum in Pakistan. Adjusting for this additional EVO spectrum acquisition the capital intensity ratio would have been 44%. Debt 5.8 6.1 5.9 Total consolidated debt marginally increased by 1% to AED 5.9 billion as of 31 st December 2013. All of the existing debt is related to international operations to finance investments in networks and 68% of the balance is for long term maturity. Debt (AED Billion) Consolidated cash balance reached AED 15,450 million as of 31 st December 2013 leading to a positive net cash of AED 9,579 million after deducting the debt balance. Currency mix for external borrowings is 40% in US dollars, 24% in Egyptian Pounds, 23% in Euros and 14% in various currencies. Page 9

Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Profit and Loss Summary (AED m) Q4 12 Q3 13 Q4 13 QoQ YoY Revenue 8,479 9,594 9,774 +2% +15% EBITDA 4,279 4,617 4,372-5% +2% EBITDA Margin 50% 48% 44% -3pp -6pp Federal Royalty 564 1,844 532-71% -6% Net Profit after Federal Royalty 854 1,825 1,453-20% +70% Net Profit Margin 10% 19% 15% -4pp +5pp Balance Sheet Summary (AED m) FY 12 FY 13 Cash & Cash Equivalents 13,934 15,450 Total Assets 84,606 85,716 Total Debt 5,806 5,872 Net Cash 8,128 9,579 Total Equity 49,913 49,593 Cash flow Summary (AED m) FY 12 FY 13 Operating 10,486 12,974 Investing (225) (4,854) Financing (6,327) (6,585) Net change in cash 3,934 1,535 Effect of FX rate changes 28 (19) Ending cash balance 13,934 15,450 Page 10

Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release Reconciliation of Non-IFRS Financial Measurements We believe that EBITDA is a measurement commonly used by companies, analysts and investors in the telecommunications industry, which enhances the understanding of our cash generation ability and liquidity position, and assists in the evaluation of our capacity to meet our financial obligations. We also use EBITDA as an internal measurement tool and, accordingly, we believe that the presentation of EBITDA provides useful and relevant information to analysts and investors. Our EBITDA definition includes revenue, staff costs, direct cost of sales, regulatory expenses, operating lease rentals, repairs and maintenance, general financial expenses, and other operating expenses. EBITDA is not a measure of financial performance under IFRS, and should not be construed as a substitute for net earnings (loss) as a measure of performance or cash flow from operations as a measure of liquidity. The following table provides a reconciliation of EBITDA, which is a non-ifrs financial measurement, to Operating Profit before Federal Royalty, which we believe is the most directly comparable financial measurement calculated and presented in accordance with IFRS. AED m Q4 12 Q3 13 Q4 13 EBITDA 4,283 4,617 4,372 Depreciation & Amortization (821) (1,111) (1,253) Exchange gain/(loss) (36) 1 (47) Share of Associates and JVs results 379 441 562 Operating Profit Before Federal Royalty 3,805 3,947 3,634 Disclaimer Emirates Telecommunications Corporation and its subsidiaries ( Etisalat or the Company ) have prepared this presentation ( Presentation ) in good faith, however, no warranty or representation, express or implied is made as to the adequacy, correctness, completeness or accuracy of any numbers, statements, opinions or estimates, or other information contained in this Presentation. The information contained in this Presentation is an overview, and should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Where this Presentation contains summaries of documents, those summaries should not be relied upon and the actual documentation must be referred to for its full effect. This Presentation includes certain forward-looking statements. Such forward looking statements are not guarantees of future performance and involve risks of uncertainties. Actual results may differ materially from these forward looking statements. Page 11

Emirates Telecommunications Corporation Etisalat FY 13 Earnings Release About Etisalat Etisalat is an international, blue-chip organisation with operations in 15 countries across the Middle East, Africa and Asia. It is one of the leading telecom operators with one of the largest market capitalization among Middle East, African and Asian telcos. It is a highly rated telecom company with ratings from Standard & Poor s, Moody s and Fitch (Aa3/AA-/A+); with low leverage and strong UAE Government support. Etisalat became one of the world s fastest growing telecom operators; with customer numbers growing from 4 million to over 148 million in less than 10 years. Its international acquisition programme began in earnest in 2004 through the award of the second mobile license, and the first 3G license in Saudi Arabia. Since then the company has witnessed rapid expansion, across the Middle East, Africa and Asia through acquisitions and organic growth. Etisalat now has access to a population of close to 700 million people, with Thuraya; its satellite network provider covering over two thirds of the planet s surface. Etisalat shareholding structure consists of 60% held by the Emirates Investment Authority and 40% free float. Etisalat (Ticker: Etisalat) is quoted in the Abu Dhabi Stock Exchange (ADX). Investors: Investor Relations Email: ir@etisalat.ae Website: www.etisalat.com Page 12