#1Ooredoo Group Capital Markets Day 2015 OpCo presentation: Algeria 25 May 2015 poredoo#2Agenda ■ 10:00-10:05 Agenda Andreas Goldau - Ooredoo Group Investor Relations ■ 10:05-10:20 Welcome, Dr. Nasser Marafih, OG CEO ■ 10:20-10:40 Strategy Update, Jeremy Sell, OG CSO ■ 10:40-11:00 Finance Update, Ajay Bahri, OG CFO ◉ 11:00-11:20, B2B - A growth engine for Ooredoo, Tom Craig, Senior Director B2B ■ 11:20-11:40 Opco presentation: Qatar ■ 11:40-12:00 Opco presentation: Algeria ■ 12:00-12:45 Q&A ■ 12:45-13:00 Meet the Ooredoo Group Team ■ 13:00-14:00 Lunch ooredoo Ooredoo Capital Markets Day | 25 May 2015 2#3Algeria in figures 10th largest country in the world, the largest in Africa and within Ooredoo Group (2.4mn Km2 ~ 5 times France) • With 38.6mn people Algeria is one of the least densely populated countries in the world (15 pop/km2) • But there are big disparities of density by region: Algiers >3750 pop/km2 • GDP/Cap (PPP): $ 7,816. Nominal GDP Growth Rate in 2014F (LC): 9.7% Population Algerian population growth Mn pops, % of the labor force Unemployment rate (%) • Very young population with 51% of people below 30 years old and 25% below 14 60 50 34.8 35.3 35.8 36.3 37.1 37.6 38.1 38.6 39.1 39.6 40.2 40 30 Very diverse and still growing (1.6% CAGR) Average Household has 5.33 members 13.8 11.3 10.2 10.0 10.0 11.0 9.8 10.8 11.3 11.5 11.6 20 10 0 -10 • Fixed Broadband Penetration is 28% of HHs 2007 2008 2009 2010 2011 2012 2013 2014 2015 F2016 F2017 F • Mobile penetration is 78% of humans with over 100% SIM penetration • Smartphone penetration has reached 20% of mobile users and 15% of total population ooredoo 97% Spoken Languages/Dialects % of population 28% 8% 2% Arabic Algerian dialect French Berber English Ooredoo Capital Markets Day | 25 May 2015 3#4Algerian mobile market history ATM Monopoly 1999-2001 Mobilis mobilie Duopoly: Market Creaming 2002 - 2003 Mobilis 3 Players 4 Brands: Market Hyper Growth 2004 - 2007 YDIEZZY Mobilis YDJEZZY mobilis mobilie Allo OTA Market Moderate Growth 2008-2013 mobilis Y DJEZZY • Old state-owned PTT creates mobile arm/brand Pure postpaid product extremely expensive only accessible to high end officials and their social network © Very small customer base: around 100k in 3 years!!! OTA launched under Djezzy's brand in Feb 2002 OTA makes mobile accessible nationwide by reducing -50% prices of the base postpaid product and launching the first prepaid offer in Algeria OTA foster's creation of first Distributors in Algeria and invests in co-marketing with them At the end of 2003 OTA reaches 88% share of a market of 1.5mn high end subs (0.5bn USD). • WTA launched under Nedjma's brand August the 25th of 2004 • OTA launched ALLO "no frills" brand August the 26th of 2004 with exactly the same color IOTA leads the market in all aspects profiting from its first mover advantage price, network, biggest distribution network and 2 brands to compete in all segments At the end of 2007 OTA reaches 67% value share of a market of 2.6bn USD compared to 13% of WTA (24mn "official" subs). NEDJMA from Wataniya Telecom owned... Diagnosis and New Strategy that led to... نجحه NEDIMA Nedjma's Turnaround and Re-branding to At the end of 2013 Ooredoo Algeria reached 30% value share of a market of 3.5bn USD (30mn "real" subs) while OTA drops to 51%. ...to Ooredoo owned And in 2014 the market enters into a new stage: 3G DEPLOYMENT and DATA SERVICES REALM Ooredoo Capital Markets Day | 25 May 2015 4#5Bn DZD Ooredoo Algeria historical performance 3 Players 4 Brands: Market Hyper Growth Market Moderate Growth (6.7% CAGR) Government money injection to the economy Data services take-off 350 300 CAGR: 26% 250 Entering the mature market phase CAGR: CAGR: 6,2% 298 1,08% 280 267 248 216 219 221 192 200 161 135 136 129 136 143 143 136 150 119 85 100 76 74 59 50 102 47 46 50 60 53 31 36 45 50 52 0 T 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Market Ooredoo Djezzy Mobilis Nedjma's Turnaround and Re-branding to Ooredoo Algeria Ooredoo Algeria has grown its revenues at a 22.3% CAGR in the 2008-2014 period, outperforming a market which has grown at 5.5% CAGR and reaching 34.3% revenue share at 2014 EoP!! Ooredoo Capital Markets Day | 25 May 2015 5#63G launch and OA's performance Ooredoo Algeria was the first to commercially launch 3G services in the country on December 13th 2013, but OA had already taken the lead through an aggressive data pre-emption strategy which started in August 2012 stretching to the limit the EDGE technology (2.5G) MI1 Revenue Shares evolution MBB2 Revenue Shares evolution 51% 49% 67% 62% 61% 61% 58% 77% 75% 81% 15% 19% 14% 37% 36% 46% 44% 37% 15% 16% 18% 19% 8% 11% 3% -2% 1% 6% -3% 6% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Est. Est. ■ Djezzy ■Mobilis ■ Ooredoo ■ Djezzy ■ Mobilis ■ Ooredoo Thanks to a very aggressive devices' subsidies strategy during 2014, OA has been able to speed up data adoption, actually creating the data market, while capturing the majority of the data active subscribers as well as the generated value. Outcome: OA still holds a 58% data revenue share after 5 quarters of commercial operation which represent 17% of overall OA's revenues when before 3G that figure was 6%. Notes: (1) MI="Mobile Internet"; (2) MBB="Mobile Broadband" ooredoo ՕՐ Ooredoo Capital Markets Day | 25 May 2015 6#7Q1 2015 financial and operational highlights Financial KPIs in bn DZD Q1 Q1 Q4 Q1 (1 US$ 93.1 dzd) YOY QoQ (Avg FX during Q1 2015) 2014 2015 2014 2015 Revenue 23,631 25,839 +9.3% 26,021 25,839 -0.7% EBITDA 9,140 9,337 +2.2% 2,614 9,337 +257.2% EBITDA Margin 38.7% 36.1% -2.6ppt 10.0% 36.1% +26.1ppt Profit / Loss 3,333 -1,505 -145% -5,124 -1,505 +70.6% Revenue Share (%) 33.3% 35.5% +2.2ppt 34.3% 35.5% +1.2ppt Data Revenue 10.4% 16.8% +6.4ppt 12.9% 16.8% +3.9ppt Weight (%) Data Market 61.7% 57.9% -3.8ppt 60.7% 57.9% -2.8ppt Revenue Share (%) ooredoo Ooredoo Capital Markets Day | 25 May 2015 7#8Strategic focus LEAD ON CUSTOMER EXPERIENCE STRENGTHEN OUR FOUNDATIONS • Keeping mobile data market leadership in Algeria ⚫Best data usage experience in Algeria with average data speed per customer far ahead of competition and substantially higher than minimum threshold set out in the T&C's of the 3G License ⚫Boosting data adoption through devices with the right price/quality balance, improving digital content and customer service through digital channels •Tight control of data pricing to not jeopardize profitability targets • Invest in state of the art network technology within the CAPEX/Revenue targets •Proactively pursue infrastructure sharing agreements with competition · • Optimize asset inventory management ACCELERATE GROWTH • Actively seeking B2B revenue growth beyond core GSM/3G business (IT services) • Proactive search of other inorganic sources of growth beyond mobile Strong focus on creating new revenue streams within digital domain via new strategic partnerships/JVs with Financial Services and e-Commerce businesses ooredoo Ooredoo Capital Markets Day | 25 May 2015 8#9Follow us Upcoming Website: ooredoo.com Email: [email protected] Twitter: @OoredoolR◇ events 2015 1H Results - August 2015 TBD Thank you