pt. indosat tbk. · pt indosat tbk – 1q 2016 results 14 • revenue and ebitda continued to grow,...

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


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.


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


Mobile Banking Telco Wallet Micro Savings, loans

Cash Management

Micro insurance

Pay with QR

Remittance Mobile POS

OTT Wallet

9

MFS trend


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


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

http://sevenskys.blogspot.com/2013/05/cara-isi-pulsa-voucher-fisik-all.html

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


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


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


• 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


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


- 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


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


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


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%


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%


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


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


23.2 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


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


1Q-16

Management focus

& Key updates

Management Focus


● 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


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


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


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*


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


• 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

pt. indosat tbk. · pt indosat tbk – 1q 2016 results 14 • revenue and ebitda continued to grow,...

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