PT. Indosat Tbk.
First Quarter 2016 Results
Reborn Update
3
New Stream to focus on
PT Indosat Tbk – 1Q 2016 Results
Market and consumers are evolving…
DIGITALIZATION is a new opportunity for us to win the market
Why
Change?
• Increase Attractive to help the business
• Quality perception and retention challenges
• Faster growth, renewed sense of purpose
We can leverage the Ooredoo brand to capture this opportunity
Innovative & global brand association Technical & funding support Data and digital leadership
The New Indosat Ooredoo Positioning & Streams
We are building Indonesia's leading digital telco, enabling access and…
greater Liberating products
& services 1 Affordability &
Accessibility 4G LTE for Everybody
New Behavior & Customer-
centric Experience
A data strong
network 2 We treat our
customer like a friend 3
✓ New look & feel! New logo & designs, reskinned Galeri/ outlets/ office/ materials
✓ Digital customer experience! Revamped digital touchpoints, Apps Corner
✓ New culture & behavior! Can-do attitude, Reform mindset: positive & curious
What does
this mean?
4
Liberating products & services
PT Indosat Tbk – 1Q 2016 Results
From High Variety package offer… ..Becoming Clear and Simple
package
1
5 PT Indosat Tbk – 1Q 2016 Results
A Data Strong Network 2
Indosat Ooredoo won Speedtest
Award for Fastest Mobile Network and
Fastest 4G Network in Indonesia
based on the results of tests
performed on Speedtest.net and
Speedtest mobile applications.
Network performance test results show
21.54 Mbps download speed and 9.43
Mbps upload speed
Speedtest rank cellular network based
on average download performance
with the fastest technology available in
Indonesia.
6 PT Indosat Tbk – 1Q 2016 Results
We treat our customer like a friend 3
0815XXXXXXX
Enrich customers touch point for easiness and ability to customize their own needs
Mobile Financial Services
8
Serving all customer segments
PT Indosat Tbk – 1Q 2016 Results
Mobile Banking Telco Wallet Micro Savings, loans
Cash Management
Micro insurance
Pay with QR
Remittance Mobile POS
OTT Wallet
9
MFS trend
PT Indosat Tbk – 1Q 2016 Results
Jan-14
Jan-15
Dec-15
IDR 27Bn
IDR 64Bn
IDR 2,500 Bn 5.3 42
Transaction Volume (in Million)
(Dec-14) (Dec-15)
900%
Number of Agent
Locations
154K 222K (Dec-14) (Dec-15)
63%
Number of Subscribers (in Million)
1,3
2,5 (Dec-14) (Dec-15)
84%
Active Agents
12k 115k (Dec-14) (Dec-15)
614%
Transaction Value (in trillion IDR)
2,5 (Dec-14) (Dec-15)
0,19
1000%
10
Building biggest ever eco-payment system
PT Indosat Tbk – 1Q 2016 Results
Chain Stores
Cash in
Cash out
Service Payment
Online Merchant
In Store Payment
Transfer & Remittance
ATM Switching
Airtime Billers
MTO MNO
Insurance FIs
Pay with QR Codes
Classic Pizza Cone
Coffee Kulture
E-Claire Coffee
Rasa Sabananyo
Heidy’s Kitchen
Soho Conv. Store
Uncle Yaya’s
Steak
Financial and
Operational Highlights
12
1Q16 YoY Overview
Consolidated Revenue increased 11.8% from IDR 6,093 billion to IDR 6,813 billion
EBITDA increased 13.7% from IDR 2,604 billion to IDR 2,961 billion, EBITDA Margin reached 43.5%
Profit Attributable to Owners of The Parent increased from a loss of IDR 456 billion to a profit of IDR 217 billion
Free Cash Flow decreased from IDR 587 billion to IDR 463 billion
PT Indosat Tbk – 1Q 2016 Results
13
1Q16 QoQ Overview
Consolidated Revenue decreased 5.2% from IDR 7,187 billion to IDR 6,813 billion
EBITDA increased 1.9% from IDR 2,906 billion to IDR 2,961 billion, EBITDA Margin reached 43.5%
Profit Attributable to Owners of The Parent increased from a loss of IDR 188 billion to a profit of IDR 217 billion
Free Cash Flow increased from IDR -1,509 billion to IDR 463 billion
PT Indosat Tbk – 1Q 2016 Results
Operating Revenue
EBITDA
EBITDA Margin
Profit (Loss)Attributable to Owners of the Parent
6,813
1Q-15 1Q-16 YoY
11.8%
2,961 13.7%
43.5% 0.8ppt
217 147.7%
6,813
4Q-15 1Q-16 QoQ
-5.2%
2,961 1.9%
43.5% 3.1ppt
217 215.8%
in IDR billion
6,093
2,604
42.7%
-456
7,187
2,906
40.4%
-188
Financial Highlights
14 PT Indosat Tbk – 1Q 2016 Results
• Revenue and EBITDA continued to grow, supported by strong growth in cellular revenue and cost management initiative that starts to deliver the result.
• Bottom line has entered into positive territory due to stabilized currency.
900 936 921 997 908
290 271 272 286
228
in IDR billion -5.2% QoQ +11.8% YoY
1Q-15
Cellular Fixed Data Fixed Voice
-20.1% / -21.4%
-8.9% / +1.0%
-3.9% / +15.8%
QoQ / YoY
2Q-15
4,903 5,321
6,093
3Q-15
5,768
6,527
Operating Revenue Breakdown
5,904
6,962
Segment Revenue Overview
4Q-15
7,187
15 PT Indosat Tbk – 1Q 2016 Results
5,676
6,813
1Q-16
• Strong data cellular revenue growth has driven up overall cellular business performance • IDR appreciation drove IDD revenue down and eventually brought down Fixed voice revenue QoQ and YoY. • Project related to government was stop caused a lower Fixed data revenue QoQ. However, revenue growth
YoY is still maintained.
Voice
SMS
Data
VAS
8.2%
YoY
13.3%
45.5%
21.8%
-6.2%
QoQ
-8.3%
7.4%
5.8% Increased VAS usage from various gaming & content packages
Cellular Revenue Performance
16 PT Indosat Tbk – 1Q 2016 Results
- Healthy growth in all services YoY - Seasonality impacted voice and sms revenue,
but data, supported by 4G network and offering, continued to grow
66.5 68.5 69.0 69.7 69.8
2Q-15
+4.9% YoY +0.1% QoQ
1Q-15
Number of cellular customers in million
2Q-15 1Q-15
in million
3.3
2.0
0.5 0.8
0.1
3Q-15 3Q-15
Net cellular customers additions
• Number of customer continued to grow, shifting from acquisition mode to monetization mode.
4Q-15 4Q-15
Cellular Customer Base
17 PT Indosat Tbk – 1Q 2016 Results
1Q-16 1Q-16
ARPU and ARPM Voice Traffic and MOU
• ARPU grew inline with customer addition YoY • Voice traffic was growing due to our expansion in outside of Java area
67 67 70 76
69
140 145 143 135 137
13.2 13.5 14.6 15.6 14.5
+9.8% YoY
2Q-15
-7.3% QoQ
1Q-15
Voice Traffic
in billion minutes (Voice Traffic)
in minute/subscriber (MOU)
MOU
24.0 25.3 26.9 27.9 26.4
1Q-15
-5.3% QoQ +9.9% YoY
2Q-15
ARPU
in thousand IDR (ARPU)
ARPM
3Q-15 3Q-15 4Q-15 4Q-15
in IDR (ARPM)
Improving ARPU
18 PT Indosat Tbk – 1Q 2016 Results
1Q-16 1Q-16
Data Usage SMS Delivered
• Increase in data traffic continued driven by 4G data plan focused • SMS declined due to seasonality
56 60 62 59 52
39,880
46,027
55,871 57,276 63,987
in TByte
+11.7% QoQ +60.5% YoY
2Q-15 1Q-15
in billion
-6.8% YoY
1Q-15
-11.6% QoQ
3Q-15 2Q-15 4Q-15 3Q-15
Strong Data Usage
4Q-15
19 PT Indosat Tbk – 1Q 2016 Results
1Q-16 1Q-16
• Moderated operational expenses • G&A ratio was higher due to professional fees related to new marketing strategy and
campaign being implemented
Cost of Service (CoS)
Depreciation and Amortization
Personnel
Marketing
as percentage of revenue
General and Administration
Total Expenses
Total Operating Expenses
1Q-15
42.9%
33.9%
7.4%
3.0%
3.8%
91.2%
57.3%
2Q-15
42.1%
32.2%
6.9%
4.6%
4.2%
89.9%
57.7%
3Q-15
40.5%
29.8%
6.8%
3.8%
2.9%
83.8%
54.0%
Operational expenses
4Q-15
42.1%
35.1%
7.6%
6.8%
3.0%
94.7%
59.6%
20 PT Indosat Tbk – 1Q 2016 Results
1Q-16
40.4%
32.6%
7.8%
4.7%
3.7%
89.1%
56.5%
2,604 2,758
3,205 2,906 2,961
EBITDA and EBITDA margin
+1.9% QoQ +13.7% YoY
1Q-15
EBITDA
in IDR billion
EBITDA Margin
42.7%
2Q-15
EBITDA performance is supported by strong revenue growth combined with strict cost management initiative that started to deliver result
3Q-15
42.3% 46.0%
EBITDA performance
4Q-15
40.4%
21 PT Indosat Tbk – 1Q 2016 Results
43.5%
1Q-16
Net profit
• Strong revenue growth, good cost management and stabilized currency resulted in positive net profit
797
-456
217
+147.7% YoY -157.2% YoY
1Q-16 1Q-15 1Q-14*
in IDR billion
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
Net profit
22 PT Indosat Tbk – 1Q 2016 Results
2.25 2.39
1.97
23,649 23,924 23,331
2.58 2.73
2.19
Gross debt* and gross debt/EBITDA Net debt* and net debt/EBITDA
• Gearing level continuously improved • Reducing US debt portion is progressing
* IDR 3.73tn, IDR 4.07tn and IDR 3.76tn of obligation under finance lease are included in 1Q14, 1Q15 and 1Q16 respectively
27,174 27,398 25,913
1Q-15 1Q-14 1Q-16
-5.4% YoY
Gross Debt
in IDR billion
Gross Debt/EBITDA
1Q-16 1Q-14 1Q-15
Net Debt Net Debt/EBITDA
in IDR billion
Balance sheet
-2.5% YoY
23 PT Indosat Tbk – 1Q 2016 Results
23.2 21.1
26.8
37.6
24.4
1,414 1,372 1,869
2,699
1,663
Free cash flow Capex and Capex/Revenue
• Moderated capex to revenue ratio as a result of price negotiation supported by Ooredoo, the parent
in IDR billion
481
1,096 1,051
-1,509
463
2Q-15 1Q-15
2Q-15 1Q-15
Capex
in IDR billion
Capex/Revenue 3Q-15
3Q-15
4Q-15
4Q-15
Free cash flow & Capex
24 PT Indosat Tbk – 1Q 2016 Results
1Q-16
1Q-16
in %
Number of BTS Data User
• Strong network performance to support data service • Shifting the focus from acquisition toward monetization
22,212 22,902 23,525 23,596 23,714
18,544 20,067 22,671 23,730 25,068
75 106 165
3,361 3,544
+3.2% QoQ +28.2% YoY
1Q-15 1Q-16
2G 3G
In million
2Q-15
52,326
40,831
3Q-15
43,075 46,361
2Q-15 1Q-15 3Q-15 4Q-15
29.5 30.1 32.2
34.0 31.2
-8.0% QoQ +6.0% YoY
Network & Data User
4Q-15
50,687
4G
25 PT Indosat Tbk – 1Q 2016 Results
1Q-16
Management focus
& Key updates
Management Focus
27 PT Indosat Tbk – 1Q 2016 Results
● Continue to transform Indosat Ooredoo to
become the leading digital telco in
Indonesia, both from a product offering
perspective as well as the way it interacts
with its stake holders
● Continue to build operational excellence
and efficiency as part of the company
culture
● To explore industry synergies to become
more efficient and effective
● To further strengthen the corporate (b2b)
offering to build a stable base through
connectivity and services.
FY 2015 Actual FY 2016 Guidance
Consolidated Revenue Growth 11.1% In line with market
EBITDA Margin* 42.9% Low to Mid 40’s
CAPEX IDR 7.3 trillion IDR 6.5 – 7.5 trillion
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
2016 Guidance
28 PT Indosat Tbk – 1Q 2016 Results
Thank You Investor Relations & Corporate Secretary Jl. Medan Merdeka Barat No. 21 Jakarta - 10110 Tel: +62 21 30442615 [email protected]
Supplemental
Information
On September 16, 2014, the South Jakarta Attorney Office (“Kejaksaan
Negeri Jakarta Selatan”), without preliminary notification, executed the
Supreme Court’s Decision on Mr. Indar Atmanto. The execution was
done based on a quotation of the Supreme Court’s Decision, which
states, among others, that (i) Mr. Indar Atmanto is found guilty and
sentenced to eight years imprisonment and charged with penalty of
Rp300,000,000,- (if the penalty is not paid, Mr. Indar Atmanto would
serve an additional six months imprisonment), and (ii) IM2 pay the
losses sustained by the State amounting to Rp1,358,343,346,674,-.
Subsequently, on January 16, 2015, Mr.Indar Atmanto and/or his lawyer
or IM2 received the document on the Supreme Court’s decision
regarding the litigation case. As of the issuance date of the consolidated
financial statements, Mr. Indar Atmanto and IM2 plan to conduct further
legal act by submitting a reconsideration request peninjauan kembali
(”PK”).
On March 16, 2015, Mr. Indar Atmanto’s submission of Judicial Review
[Peninjauan Kembali (”PK”)] was officially registered at the Corruption
Court under No. 08/AKTA.PID.SUS/PK/TPK/2015/PN.Jkt.Pst.
On November 4, 2015, the Supreme Court’s official website announced
that the Judicial Review filed by Mr. Indar Atmanto was rejected based
on Supreme Court’s decision dated October 20, 2015. However, no
detailed information regarding the exact content of such Supreme
Court’s decision was available. As of the issuance date of the interim
consolidated financial statements, the official copy of such Supreme
Court’s decision hasn’t been received.
IM2 case development
31 PT Indosat Tbk – 1Q 2016 Results
On 25 January 2016, Standard & Poor's Ratings Services (“S&P”) affirmed its 'BB+‘ long-
term corporate credit rating on PT Indosat Tbk. The outlook is positive. S&P also affirmed
their 'axBBB+' long-term ASEAN regional scale rating on the Indonesia-based
telecommunications company. S&P affirmed the rating because they expect Indosat to
maintain its solid No.2 position in Indonesia's growing cellular market. The positive outlook
reflects their view that the company's financial risk profile will improve over the next 12-18
months.
On 28 September 2015, PEFINDO has affirmed its “idAAA” ratings for PT Indosat Tbk
(ISAT) and its Shelf-Registered Bond I/2014-2016, Bonds V/2007 Serie B, Bonds VII/2009
Serie B, and Bonds VIII/2012. PEFINDO has also affirmed its “idAAA(sy)” ratings for ISAT’s
Sukuk Ijarah I/2014-2016, Sukuk Ijarah IV/2009 Serie B, and Sukuk Ijarah V/2012. The
outlook for the corporate rating is “stable”. The ratings reflect ISAT’s strong support from its
majority shareholder, strong market position, and stable operating performance.
On 21 October 2015, Moody's Investors Service says that PT Indosat Tbk's (Ba1 stable)
1H 2015 results were in line with their expectations, with continued improvement in
operating performance from the second half of 2014. The stable outlook reflects Moody's
expectation that Indosat will maintain its position as a leading mobile operator in
Indonesia amid increasing competition for data services, and leverage, in terms of
adjusted debt/EBITDA will remain in the 2.5x -3.0x range for the next 12 - 15 months as
Indosat continues its high capex for network modernization.
On 15 March 2016, Fitch Ratings has upgraded the Long-Term Local-Currency Issuer
Default Rating (LC IDR) of Indonesia’s second-largest telecommunications operator, PT
Indosat Tbk (Indosat Ooredoo), to ‘BBB+’ from ‘BBB’. The agency has simultaneously
affirmed Indosat Ooredoo’s Long-Term Foreign-Currency IDR (FC IDR) and its foreign-
currency senior unsecured rating at ‘BBB’. Fitch has also affirmed the National Long-Term
Rating at ‘AAA(idn)’. The Outlook on the ratings is Stable.
Credit ratings
32 PT Indosat Tbk – 1Q 2016 Results
1.21
2.92
0.27 0.27
4.38
3.83
2.46 2.27
0.95 0.36 2.08
0.36 0.81
In IDR trillion
2020 2019 2022 2018 2017 2016
IDR
USD in IDR
2021 2025
* Excluding obligation under capital lease
2024
Debt maturity profile*
33 PT Indosat Tbk – 1Q 2016 Results
Number of BTS
10.0
900 Mhz
7.5
7.5
Indosat
Telkomsel
XL Axiata
20.0
1800 Mhz
22.5
22.5
10.0
2100 Mhz
15.0
15.0
in Mhz
Hutchison - 10.0 10.0
2.5
850 Mhz
3.5 – 5.0*
-
-
* Telkom and Bakrie Telekom have the same spectrum, differentiated by its operational areas
15.0**
2300 Mhz
15.0**
-
-
** Indosat/IM2: West Java exclude Bogor, Depok & Bekasi ; Telkom/Telkomsel: Maluku & North Maluku
Spectrum overview
34 PT Indosat Tbk – 1Q 2016 Results
• PT Indosat Tbk ( “Indosat” or “Company” ) cautions investors that certain statements contained in this document state its management's intentions, hopes, beliefs, expectations, or predictions of the future are forward-looking statements
• The Company wishes to caution the reader that forward-looking statements are not historical facts and are only estimates or predictions. Actual results may differ materially from those projected as a result of risks and uncertainties including, but not limited to:
• The Company’s ability to manage domestic and international growth and maintain a high level of customer service
• Future sales growth
• Market acceptance of the Company’s product and service offerings
• The Company’s ability to secure adequate financing or equity capital to fund our operations
• Network expansion
• Performance of the Company’s network and equipment
• The Company’s ability to enter into strategic alliances or transactions
• Cooperation of incumbent local exchange carriers in provisioning lines and interconnecting our equipment
• Regulatory approval processes
• Changes in technology
• Price competition
• Other market conditions and associated risks
• The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information, or otherwise
Disclaimer
PT Indosat Tbk – 1Q 2016 Results 35