Our growing geographic footprint and scaling up of digital investment continue to define our presence as an industry disruptor, while delivering record net profits of AED 10.3 billion, an increase of 3% over 2022. Our strategic partnerships and acquisitions have enabled more efficient and effective services to a substantially wider customer base, adding even more diverse revenue streams across new territories.

“From global economies and governments to industrial giants and international corporations, no businesses were exempt from the pressures of inflation, foreign currency volatility, interest rates hikes, energy costs and the geo-political events of 2023. It was a perfect storm which prolonged the general reticence of 2022 to expand and invest. For e&, however, our resources and resilience to market conditions enabled us to deliver an outstanding year of organic growth, a high level of profitability, and robust cashflow generation.”

As we diversify from telecommunications into technology, we are capturing new revenue streams to ensure our growth. We have tapped into multiple pillars, including cybersecurity, IoT, cloud, Fintech and online digital services as well as investments in futuristic technologies through our venture capital vertical which will provide us with invaluable industry insights and disruptive opportunities for sustainable expansion.

Executing our strategy

During the year, we accelerated our transition to a Technology Group, effectively executing against our strategic priorities. We doubled down on core, achieving a remarkable 6.1% revenue growth in the home market, and a 10% organic growth in e& international in constant currency. Simultaneously, we improved our Net Promoter Score (NPS) in four out of five markets, indicating enhanced customer satisfaction. This performance has positioned us exceptionally well to meet the subscriber needs across our markets

Additionally, we progressed on portfolio diversification through strategic acquisitions. We announced the majority stake acquisition in PPF Telecom assets, expanding the Group‘s geographic footprint into Central and Eastern Europe (Bulgaria, Hungary, Serbia and Slovakia). Furthermore, our plans to acquire 100% of Telenor Pakistan demonstrates our commitment to strengthening our market presence in Pakistan. We accelerated diversification into digital adjacencies and new technology areas by investing USD $400 million in Careem Everything App for a majority stake, underscoring our commitment to this strategy. We also solidified our position as a regional multi-cloud managed and professional services provider through a joint venture with Bespin Global. Additionally, we acquired controlling stake in Beehive, the first regulated peer-to-peer crowdfunding platform in the MENA region, further bolstering our Fintech proposition. We also expanded our online marketplace presence by acquiring ServiceMarket, a leading online marketplace for household services, which also complements our Smiles online marketplace strengthening our digital proposition.

The digital transformation of e& in 2023 yielded substantial benefits reflected in enhancing customer experiences, operational efficiency and productivity, revenue diversification and the organisation’s overall agility. Finally, we disclosed our commitment to environmental sustainability by announcing our Group’s net-zero Scopes 1 and 2 emission targets for 2040, which have been validated by the Science-Based Targets initiative (SBTi). Additionally, we maintained our “A” rating by MSCI and became a constituent of the FTSE4Good index, further recognising our efforts toward sustainability and responsible business practices.

Despite prevailing market conditions, Group revenue increased by 2.5% in reported currency, reaching AED 53.8 billion. In constant currency, revenue demonstrated solid growth with a robust 8.3% increase, indicative of growth in both domestic and international markets. Revenue in the UAE increased by 6.1% to AED 31.5 billion, due to our focus on core revenue and diversification into digital products, complemented by increased business activities fuelled by population growth and economic expansion. As a result, we witnessed strong growth in data and digital services, increased sales of Smart Living Devices, and roaming.

In e& international, revenue increased year-on-year by 10% in constant currency to AED 19.4 billion, driven by strong growth in all key markets, representing 36% of the Group’s consolidated revenue.

Our increased focus on digital verticals is yielding results. e& enterprise vertical grew by 32% year-on-year, mainly driven by growth in cybersecurity, digital infrastructure, and IoT. In terms of e& life, our consumer digital vertical, delivered 10x organic growth in monthly active users and grew its international money transfers by 6x.

Major 2023 Launches, M&As and JVs:

• e& International’s EUR €2.15 billion binding agreement - majority stake in PPF ⁽¹⁾
• e& new strategic partnership with Vodafone Group
• USD $400 million acquisition of a majority stake in Careem Everything App
• e& enterprise acquired 63.3% of Beehive for $23.6 million
• Launch of e& money Super App
• Launch of STARZ ON
• USD 60 million for a 10% stake in the South Korean cloud management company
• Corporate venture capital arm – Maxbyte, Airalo and Ikigai labs
• PTCL Group SPA to acquire 100% stake in Telenor Pakistan(1)

Depicting resilience supported by our strong financial position

In constant currency, EBITDA increased year-on-year by 3.7%, due to strong revenue growth coupled with robust cost discipline, despite those inflationary headwinds and a challenging macro environment. In reported currency, however, EBITDA dropped slightly year-on-year by 0.3%, resulting in an EBITDA margin of 49%, largely as a result of unfavourable exchange rate movements in the Egyptian Pound and Pakistani Rupee and changes in the revenue mix.

We witnessed a strong growth in net profit, increasing 3% year-on- year to AED 10.3 billion, mainly attributable to higher dividends from Vodafone, higher income from associates, as well as lower tax expenses.

Capital spending in 2023 amounted to AED 7.3 billion, a 9% decrease year-on-year as capital investment continued to focus on providing the best experience to our customers by modernising our networks and deploying cutting-edge technologies. Our capital allocation strategy remains disciplined, ensuring optimal returns on investment.

As a result, our operating free cashflow showcased resilience and increased year-on-year by 4% to reach AED 18.8 billion on the back of solid fundamentals. The Group maintained a healthy balance sheet and liquidity position, as the cash balance stood at AED 29 billion due to strong free cash flow generation. Gross debt balance of AED 49 billion increased by AED 1 billion, compared to 2022, largely as a result of additional investment. Ultimately, this led to a net debt balance of AED 20.1 billion, translating to 0.77x Net Debt/EBITDA multiple. Given our healthy ashflow we are able to maintain our management of working capital, while providing even stronger leverage with banks and credit rating agencies. As a result, we continue to achieve our high investment grade credit ratings with S&P Global and Moody’s at ‘AA-‘ and ‘Aa3’ respectively, including a stable outlook.

The Board of Directors proposed a final dividend of 80 fils per share for the fiscal year 2023. Additionally, the board recommended a new progressive dividend policy with an incremental 3 fils every year for the fiscal years 2024, 2025, and 2026, with a floor of 80 fils per share. These proposals are subject to shareholders’ approval at the Annual General Meeting.

Strong operational performance in our geographic footprint

Our aggregate subscribers reached >170 million last year, an increase of 4% year over year, once again breaking new boundaries in the Group’s history. This translated to net additions of AED 7 million during the last 12-month period, mainly due to strong subscriber acquisition in most of our key markets.

Remarkably, our operating companies have exhibited impressive year-on-year growth rates in local currencies, with the UAE growing by 6.1%, Egypt by 19%, Pakistan by 26%, and Maroc Telecom Group by 3%. Our telecommunication verticals continue to focus on organic growth in their core businesses, emphasising profitability and strong cash flow generation.

Reaping the benefits of our relentless endeavours

As an acknowledgement of the ever-increasing range of our innovative products and services, e& received the Brand Finance Award for being recognised as the most valuable portfolio of telecommunications brands in the Middle East and Africa. Furthermore, e& UAE retained its position as the strongest brand in all categories in the MEA region and was ranked among the top three telecommunications brands globally.

It is a credit to our strategic expansion and transformation into a global technology group that e&’s portfolio of brands has grown by 16.5% to a new record of USD 17 billion. In 2024, we will aim to increase even further by maintaining our momentum across our entire spectrum of operations.

We believe that macro-economic volatility will continue into next year, in which case we will manage the key challenges as we did in 2023. We will also ensure that we continue to value our prized asset at e&, the people we work with, ensuring that they share in the Group’s success.

It was a difficult year for many in 2023, however, e& prevailed and was an outstanding example of resilience, fortitude, conviction in its strategies and ambition in its vision.

1) Subject to regulatory approval