#125 50 25 25 25 50% 25 50 75 Investors Presentation Kuwait Telecommunications Company K.S.C.P 100 HT - 2018 VIVA#2Table of content 25 25 VIVA's History in Brief Key Milestones Vision and Values Shareholders' Structure Population & Penetration Competitive Strengths Market Share 25 50 Financial Results Financial Highlights Stock Performance Appendix - Balance Sheet & Income Statement 2 Investor Relations 50 75 100 3 45678 9 = 11 13 14 15 VIVA#325 VIVA's History in Brief 25 50 50 2007 Jun 2008 Sep 2008 Dec 2008 Dec 2014 Jun 2015 25 VIVA's Stock under KSE15 Index VIVA Stock was listed on Kuwait Stock Exchange Commercial Launch of VIVA Operations in Kuwait Public placement of VIVA shares which was 2.4x oversubscribed. distributed among c. 1 million Kuwaiti shareholders The incorporation contract and principal law of the company was adopted by the MOC and Fatwa and Legislation Dep., and documented at the Ministry of Justice Emiri decree number 187/2007 was released regarding the license of the incorporation of Kuwait Telecommunications Company. *In Compliance with the Islamic Shariah rules and principles 3 Investor Relations 50 75 100 VIVA#4Key Milestones 25 2008 50 2010 ▪ Launches commercially ■ VIVA abolishes incoming calls fees and other operators follow ■First Operator in the world to have all IP network Expand retail network and launch joint promotions with retailers. ■ VIVA wins CommsMEA Best Telecom Finance Deal. " ☐ 2012 VIVA launches Elite Program for loyal, VIP and high value customers. VIVA turns into profitability during the fourth year of operation. ■ VIVA Starts deployment of 4G LTE network 2014 Partnership with Real Madrid. Listing on KSE ■ Retained earnings turned to be positive. Ranked 2nd in terms of revenue and subscriber market share " 2016 Best Telecom Company by Arabian Business. ■Member of (ITU) ■Leading Corporate for IR Business Innovation in Risk Management 2018 ☐ Best Network Development Award at 5G MENA ■ VIVA Reap Three Accolades at ME Call Centre Awards 25 O O 25 50 2009 ■ VIVA introduces high speed Mobile Broadband in Kuwait. VIVA launches innovative prepaid offerings and acquire 500K customers in one year. 2011 ■First to introduce Apple iPhone ■ Strategic partnership with Manchester United. First to introduce newest HSPA+ (42.2 Mbps) Broadband network. 2013 Complete nationwide 4G LTE Coverage and awarded Best LTE Deployment in the Middle East. ■ Number Portability and VIVA acquires majority of ported numbers between operators. 2015 ■The first in Kuwait to introduce the all-new (VOLTE) technology. ■ VIVA Branches network reached a total of 70 across Kuwait. ■ First to introduce the LTE Advanced 2017 ■ VIP Customer Service Award ■"2017 Speedtest Award" ■ Excellence in Governance Award ■ Best Operator Network ■ 5G Innovator of the Year Awards 4 Investor Relations 50 75 100 VIVA#5Vision and Values 25 Our vision is to provide unique services and products that satisfy the aspirations of our clients and accommodate their needs, which in turn will earn us their trust. This is through presenting our customers with numerous telecommunications opportunities with the goal of boosting our relationships with them and giving them the best experience around the clock. 25 Energetic Our passion is performance, innovation, and delivering of superior quality. We are efficient, reliable, and highly responsive to our clients' needs. 25 50% 50 Engaging Transparent We are open, trustworthy and collaborative. Our Values All of our activities revolve around our customers. Fulfilling We offer a wide range of easy to understand products. Our actions create value, helping our customers lead more rewarding and enjoyable lives Our vision is embodied in a fundamental and detailed understanding of the Kuwait market and focusing on the needs of customers in everything we say and do. We have pledged to work to enrich the lives of our customers through telecommunications, entertainment and information, and data transfer services. 5 Investor Relations 50 75 100 VIVA#6Shareholders' Structure 25 25 VIVA Saudi Telecom 52% Kuwaiti Government 24% Public Shareholders 24% STC الاتصالات السعودية 25 50 " ■ STC, the leading regional telecom operator, won the bid for third mobile license in November 2007, and paid USD 980 million for the license. STC has a management agreement with VIVA. STC increased its ownership percentage from 26% to 51.8% through a VTO at the beginning of 2016. Currently, 4 out of 7 board members are representative of STC group. The Kuwaiti government holds 24% of VIVA through different governmental entities. Currently 2 out of 7 board members are representing the Kuwaiti government bodies. Public Share holders consists of companies, portfolios, funds and individuals. The public shareholders are mix between local, regional and international investors. Independent Board member elected during the AGM on 16th of May 2016. 6 Investor Relations 50 75 100 VIVA#7Population & Penetration 25 Kuwait population since 2010 is growing at the same level of 2.8% yearly and the growth is forecasted by IMF at 2.8% over the next 5 years compared to almost 1% for the global population growth. This growth coupled with rising income levels will propel growth in consumer spending. Kuwait boasts the highest telecom penetration levels in the MENA region, which stood at the end of 2016 at 227% as reported by (ITU-D) and estimates by VIVA shows that the penetration rate in Kuwait declined to reach 200% at the end of Dec 2017. Kuwait Population (Million Person) & Penetration Rate (%) 5.0 250% 40 4.0 3.0 2.0 25 1.050 3.4 3.2 56% 49% 50 0.0 2006 227% 218% 220% 200% 200% 189% 158% 157% 150% 133% 4.5 3.4 3.5 92% 3.6 3.7 3.8 3.9 4.0 4.1 4.3 100% 56% 50% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source of Population: IMF Source of Penetration rate: ITU 7 Investor Relations 50 75 100 0% 90 VIVA#8Competitive Strengths 25 STC (the largest telecom company in the region) will continue to be a major shareholder and VIVA will continue to benefit from being a member of the STC group. Through this relationship, VIVA has access to technical support, industry best practice for provision of telecom services, as well as stronger purchasing power benefiting from joint procurement and coordination of regional initiatives. VIVA has an extensive, well-developed and increasingly sophisticated direct and indirect distribution network covering all parts of Kuwait. VIVA Inaugurates New Branches to its network amounting to a total of 93 branches across Kuwait 25 Extensive distribution channels 25 50 VIVA benefits from having a modern and efficient network that is adaptable to emerging technologies. The Network backbone is modern and has been designed to facilitate scalability of new operations and the future deployment of emerging technology. Modern & Scalable Network Relationship with STC VIVA Successful Branding Customer- Centric Strategy VIVA follows a customer-centric strategy, which entails focusing on the communication needs of customers and providing differentiated service. This strategy positions VIVA as the only telecom provider in Kuwait that targets enhancing customer experience. Strong Growth & Results VIVA has a proven track record of successfully providing high-quality product and services to its customers. VIVA has grown rapidly since it commenced operations in December 2008 acquiring 2.2 million customers by the end of June 2018, which represents a market share of 31%. Since its launch in 2008, VIVA has built a valuable brand associated with excellence. VIVA is perceived as the "challenger" bringing healthy competition to the Kuwait telecom market. VIVA's entry prompted the incumbent players to make several tariff changes, focus on subscriber retention and introduce new services, thereby benefiting the consumer. 8 Investor Relations 50 75 100 VIVA#9Market Share 25 10 Total Subscriber Base in Kuwait (Mn) Total Subscirbers in kuwait (Mn) VIVA Subscribers (Mn) 7.6 7.7 7.7 7.5 7.2 6.41 5.9 5.2 4.5 5 1.6 2.2 2.4 2.5 2.4 2.3 2.3 0.8 250 2010 2011 2012 2013 1,000 800 2014 2015 2016 2017 Jun-18 Telecom Sector Revenues in Kuwait (KWD Mn) Total Telecom Revenue in Kuwait (KWD Mn) 684 690 25 627 600 50 400 9 VIVA's Revenue (KWD Mn) 841 788 12 753 717 799 451 200 277 279 288 239 61 94 137 182 149.1 2010 2011 2012 2013 Investor Relations 50 75 100 2014 2015 2016 2017 H1-2018 VIVA#10Market Share vs. peer group 25 Subscriber Market Share Jun 2018 Revenue Market Share - H1 2018 25 Ooredoo 32% c0cedoo ZAIN Zain 37% VIVA 31% Ooredoo 28% VIVA 33% VIVA 0000000 VIVA ZAIN Zain 39% EBITDA Market Share - HI 2018 Net Profit Market Share - HI 2018 0000000 Ooredoo* 5% Ooredoo 21% VIVA 32% 25 50 VIVA 50 ZAIN Zain 47% Zain 59% ZAIN VIVA 36% VIVA 10 Investor Relations *Ooredoo Kuwait Financial Results are consolidated with Fastelco Results. VIVA 50#11Financial Results 25 ☐ 25 In H1 2018, the company has applied 50 IFRS 15 'Revenue from Contracts with Customers "and IFRS 9 "Financial Instruments" which are effective from 1st January 2018 and opted for full retrospective approach. ■ VIVA customers' reached 2.35 million by end of June 2018 compared to 2.24 to the same period of 2017. ■ VIVA revenue grew by 7.6% during the H1 2018 to reach KD 149.1 million as compared to KD 138.6 million recorded during H1 2017. ■ VIVA EBITDA reached KD 37 million during H1-2018 with EBITDA Margin 24.8% as compared to KD 17.6 million and margin of 23.3% during H1-2017. ■ VIVA's net profit grew to KD 23.8 Million during H1-2018 compared to a net profit of KD 19.7 million reported during Q1-2017. Key Figures & Ratios H1-2017 (Restated) H1-2018 Change Subscribers (Mn) 2.24 2.35 5.1% Revenue (KD Mn) 138.6 149.1 7.6% EBITDA 32.3 37 14.5% EBITDA Margin (%) 23% 25% 1.5pt. Net Profit (KD Mn) 19.7 23.8 21% Net Profit Margin (%) 14.2% 16.0% 1.8pt. EPS (Fils) 39 48 21% Equity (KD Mn) 133.7 165.7 24% BVPS (Fils) 268 332 24% Subscribers (Mn) Revenue (KD Mn) Net Profit (KD Mn) 2.35 138.6 149.1 19.7 23.8 2.24 Jun-17 Jun-18 H1-2017 H1-2018 H1-2017 H1-2018 11 Investor Relations 50 75 100 VIVA#12Financial Highlights 25 Revenue (KD Million) 400 150.0 EBITDA (KD Million) EBITDA (KWD Million) EBITDA Margin (%) 300 277 279 288 239 200 47% 47% 47% 112.6 100.0 149 139 50.0 131.0 131.9 25% 25% 23% 100 71.1 32.3 37.0 0 00 0.0 2014 2015 2016 2017 H1- 2017 H1-2018 2014 2015 2016 2017 HT- 2017 H1-2018 45 45 CAPEX (KD Million) Net Profit (KD Million) Capex (KWD Million) ◆ Capex to Sales Ratio 50 43.0 42.8 40.4 39.8 40 25 30 50 15 17 7% 39 38 33 14% 14% 12% 10% 14 30 20 20 7% 10 11 IIII 23.8 19.7 0 0 T 2014 2015 2016 2017 H1- 2017 H1-2018 2014 2015 2016 2017 H1- 2017 H1-2018 12 *FY 2017, H1 2017 and H1 2018 numbers are based on the IFRS 15 'Revenue from Contracts with Customers "and IFRS 9 "Financial Instruments" which are effective from 1st January 2018 and opted for full retrospective approach. Investor Relations 50 75 100 VIVA#13Financial Highlights 25 Total Assets (KD Million) Total Debt/Equity (KD Million) Total Debt (KWD Million) 300 263 267 273 275 100 6.9 86 250 214 200 179 150 100 50 IIII 80 72 66 60 40 60 40 47 47 1.7 0.8 20 0.4 9 0 0 0 0.0 2013 2014 2015 2016 2017 Jun-2018 2013 2014 2015 2016 2017 Jun-2018 Shareholders Equity (KD Million) Book Value Per Share (KD) 0.332 0.314 0.266 180 160 140 120 93 100 25 80 50 60 50 40 10 20 0.350 166 157 0.300 133 0.250 0.200 0.150 0.100 0.050 0.019 0 2013 2014 2015 2016 2017 Jun-2018 0.100 0.186 2013 2014 2015 2016 2017 Jun-2018 *December 2017 and June 2018 numbers are based on the IFRS 15 'Revenue from Contracts with Customers "and IFRS 9 "Financial Instruments" which are effective from 1st January 2018 and opted for full retrospective approach. 13 Investor Relations 50 75 100 VIVA#1425 50 Stock Performance 25 Closing Price (KD) 0.701 PE (X) Paid up Capital (KD Million) 49.9 PB (X) Market Cap (KD Million) 350 Dividend Yield (%) Rebased 100 Index Data as of 28 June 2018 7.7 2.11 4.1% Rebased Index Since VIVA's Listing Date 14 Dec 2014 - Stock Performance vs. KSE and Telecom weighted Indices VIVA's Stock Price (KWD) KSE Weighted Index Telecom Weighted Index 180 160 140 120 100 80 60 60 Dec-14 Mar-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 50 75 100 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 14 Investor Relations سلس Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 VIVA#1525 50 Appendix 25 50 25 Balance Sheet (2014 - June 2018) Income Statement (2014 - HI 2018) 50% 15 Investor Relations VIVA 50 75 100#16Balance Sheet (2014 - June 2018) 2014 2015 2016 *2017 (restated) *June 2018 Balance Sheet ASSETS Property and equipment KD Mn KD Mn KD Mn KD Mn 113.1 125.4 137.7 145.0 143.6 Intangible assets 36.3 50.6 47.5 Other non-current assets 0.7 Non-current assets 150.1 175.9 185.2 145.0 143.6 Inventories 5.8 7.1 4.4 12.9 10.5 Prepayments and other current assets 4.7 5.4 5.0 4.7 4.3 Trade and other receivables 21.2 22.9 25.7 31.2 32.6 Contracts assets 47.2 51.6 Cash and cash equivalents 32.3 51.8 47.2 32.2 32.1 Current assets Total assets EQUITY AND LIABILITIES Share capital Statutory reserve 63.9 87.2 82.2 128.2 131.2 214.0 263.1 267.4 273.2 274.7 49.9 49.9 49.9 49.9 49.9 0.0 4.5 8.7 12.9 12.9 Voluntary reserve 4.5 8.7 12.9 12.9 Retained earnings 0.0 33.9 65.4 81.0 89.8 Total equity 49.9 92.9 132.7 156.9 165.7 Employees' end of service benefits 2.6 2.8 3.2 3.6 4.9 25 Islamic financing facilities 51.6 31.4 11.6 - Non-current liabilities 54.1 34.2 14.8 3.6 4.9 50 Islamic financing facilities Trade and other payables Current liabilities Total liabilities Total equity and liabilities 34.0 41.0 35.5 9.0 75.9 95.0 84.4 103.7 104.2 109.9 136.0 119.9 112.7 104.2 164.0 170.2 134.7 116.3 109.1 214.0 263.1 267.4 273.2 274.7 NI 16 *December 2017 and June 2018 numbers are based on the IFRS 15 'Revenue from Contracts with Customers "and IFRS 9 "Financial Instruments" which are effective from 1st January 2018 and opted for full retrospective approach. Investor Relations 75 100 VIVA#17Income Statement (2014-H1 2018) 25 *2017 Income Statement 2014 2015 KD Mn KD Mn 2016 KD Mn (Restated) *H1-2017 (Restated) *H1-2018 KD Mn KD Mn KD Mn Revenue Operating expenses 239.0 276.9 279.1 287.7 138.6 149.1 (126.3) (145.8) (147.0) (216.4) (106.3) (112) Depreciation and amortization (67.6) (82.2) (88.4) (25.9) (11.4) (12.3) Finance cost (2.2) (2.6) (1.6) (1.4) (0.8) (0.2) Other income/ (expense) (1.8) (1.0) (0.1) 1.1 0.5 0.4 Profit before contribution to KFAS, NLST, 41.0 45.2 41.9 45.0 20.6 Zakat and Board of Directors' remuneration 25 25 KFAS NLST Zakat Board of Directors' remuneration Net Profit for the year 25 Basic and diluted earnings per share (fils) 50 (0.0) (0.4) (0.4) (0.4) (0.2) (0.2) (0.1) (1.2) (1.1) (1.2) (0.6) (0.6) (0.5) (0.5) (0.4) (0.5) (0.2) (0.3) (0.2) (0.2) (0.2) (0.2) (0.07) 40.4 43.0 39.8 42.8 19.7 23.8 81 86 80 86 39 *FY 2017, H1 2017 and H1 2018 numbers are based on the IFRS 15 'Revenue from Contracts with Customers "and IFRS 9 "Financial Instruments" which are effective from 1st January 2018 and opted for full retrospective approach. 17 Investor Relations 50 75 100 48 VIVA#1825 25 50 25 Thank you 25 Investor Relations Department: E-mail: [email protected] Tel: +965 5000 1911 www.viva.com.kw 18 Investor Relations 50 75 100 VIVA