4q11 - analyst deck - final

7/31/2019 4Q11 - Analyst Deck - Final

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FY 2011 RESULTS

ANALYST BRIEFING24 February 2012


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This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any securities

and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract or commitment or

investmentdecision.

This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed to

have agreed and confirmed to Telekom Malaysia Berhad (the Company) that: (a) you agree not to trade in any securities of the Company or its

respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain absolute confidentiality

regarding the information disclosed in this presentation until the public disclosure of such information, or unless you have been otherwise

notified by the Company.

Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation does not

take into consideration the investment objectives, financial situation or particular needs of any particular investor.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the

information, opinions and conclusions contained in this presentation. None of the Company and its affiliates and related bodies corporate, and

their respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault ornegligence) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it.

This presentation contains projections and forward-looking statements relating to the Companys business and the sectors in which the

Company operates. These forward-looking statements include statements relating to the Companys performance. These statements reflect the

current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It is important to note

that actual results could differ materially from those anticipated in these forward looking statements. The Company does not undertake to inform

you of any matters or informationwhich may come to light or be brought to the Companys attentionafter the date hereof.

The forecasts and other forward-looking statements set out in this presentation are based on a number of estimates and assumptions that are

subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to

change and in many cases outside the control of the Company. The directors and officers of the Company believe that they have prepared the

forecasts with due care and attention and consider all best estimates and assumptions when taken as a whole to be reasonable at the time of

preparing the presentation. However, the Companys forecasts presented in this presentation may vary from actual financial results, and these

variations may be material and, accordingly, neither the Company nor its directors or officers can give any assurance that the forecast

performance in the forecasts or any forward-looking statement contained in this presentation will be achieved. Details of the forecasts and the

assumptions on which they are based are set out in the presentation.

This presentation may not be copied or otherwise reproduced without the written consent of TM.

Disclaimer


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Performance Overview

Financial review

Operating highlights

Concluding remarks

3


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Key Highlights FY 2011 Achieved all Headline KPIs for 2ndyear

4

Revenue growth of 4.1% vs. FY2010 to RM9.15bn

Normalised EBITDA Margin at 33.5%

Customer Satisfaction Measure 70

FY2011

Headline KPI

FY2011

Achievement

2.5%

32%

4.1%

33.5%

>70

Broadband leadership continues: Total customer base of over 1.9mn

Over 230,000 Unifi customers activated, takeup rate >20%

Internet & Multimedia Revenue grew >20% in FY2011

BAU Capex/Revenue improved to 12.4% compared to 12.8% last year

Achieved 1.16mn premises passed with FY2011 HSBB Capex of RM1.4bn, lower than budgeted

Final single-tier dividend of 9.8 sen per share

Proposed capital repayment of 30 sen per share via capital reduction


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Key Operating Indicators

Key Highlights 4Q 2011

Financial Performance

Positive growth across the board

QoQ and YoY

4Q11 vs

3Q11

5

Operating revenue grew by 5.4% QoQ and 5.5% YoY to RM2,447.2mn

- Revenue led by Internet & Multimedia, at 4.2% growth QoQ and

23.8% growth YoY

Normalised EBITDA up 0.6% QoQ and 1.5% YoY to RM808.1mn

Normalised PATAMI up 74.9% QoQ and 0.7% YoY to RM240.1mn

Broadband subscribership grew 2.8% QoQ and 12.3% YoY to 1.92mncustomers.

TM Wifi hotspot zones increased by 14.4% QoQ and 80.3% YoY, to

19,799 sites

4Q11 vs

4Q10


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1.1

4.2

12.4

60.1%

10.6%

1.11.21.4

Cash Balance (RM bn) 2.1 3.5 3.5

2008

Capital Expenditure,

excluding HSBB(RM bn)

Our capital

management

approach is

guided by two

major principles :

Striving to

optimize capitalproductivity

and ROIC

Creating

shareholder

value with

strongcommitment to

dividend policy

1 TRS: Source Bloomberg

2 After interim dividend paid in September 2011 (RM351mn), and final gross dividend 2010 & capital distribution paid in June 2011 (RM1,037.4mn)

3 NormalisedEBIT / Total Revenue

16.7

14.1

2009 2010

12.8

Focus on Shareholder Value CreationGrowing enterprise value through improving

return on capital

1Total Return to

Shareholder (TRS)

7.7% 42.9% 24.0%

EBIT Margin 10.8%10.9% 10.6%3

Capex / Revenue ratio( %)

6

FY2011

2


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Financial review


Concluding remarks

7


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Note: EBITDA Margin is calculated as percentage of EBITDA against Revenue + Other Operating Income

For Normalised EBITDA and Normalised PATAMI refer Slides 10 & 11

Excludes FX (Gain )/Loss

RMmn

ReportedComments

(FY11 vs FY10)4Q11 3Q11

% Change

QoQ4Q10

% Change

YoYFY11 FY10

% Change

FY11 vs

FY10

Revenue 2,447.2 2,321.7 +5.4 2,320.6 +5.5 9,150.7 8,791.0 +4.1

Higher Internet & Multimedia

and Others revenue

Other Operating

Income37.0 27.8 +33.1 52.7 -29.8 120.9 152.9 -20.9 -

EBITDA 796.1 812.5 -2.0 758.6 +4.9 3,086.4 2,924.3 +5.5Higher revenue and lower

operating cost

EBITDA margin 32.0% 34.6% -2.6pp 32.0% 0.0pp 33.3% 32.7% +0.6pp -

Normalised EBITDA 808.1 803.3 +0.6 795.9 +1.5 3,108.4 2,958.5 +5.1 -

Normalised EBITDA

Margin32.5% 34.2% -1.7pp 33.5% -1.0pp 33.5% 33.1% +0.4pp -

Depn & Amort. 535.9 580.7 -7.7 565.7 -5.3 2,128.0 1,995.8 +6.6Higher asset base and provision

for asset write-off

Other Gains 5.5 278.3 -98.0 215.4 -97.4 286.5 373.3 -23.3 -

Net Finance Cost* 50.6 50.9 -0.6 57.9 -12.6 185.2 245.2 -24.5Better yield income and lower

interest expense

FX (Gain) / Loss (14.4) 122.5 +111.8 15.8 +191.1 58.6 (303.7) -119.3USD strengthened vs. RM by

3.5%

Profit Before Tax 229.6 337.2 -31.9 334.8 -31.4 1,001.2 1,360.2 -26.4 -

PATAMI 598.3 302.2 +98.0 400.7 +49.3 1,191.0 1,206.5 -1.3Unrealisedforex loss on USD

debts nett of last mile tax

incentive

Normalised PATAMI 240.1 137.3 +74.9 238.4 +0.7 634.8 563.7 +12.6 -

Group Results 4Q11 & FY2011

8


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In RM mn 4Q11 3Q11 4Q10 FY11 FY10

Reported EBITDA 796.1 812.5 758.6 3,086.4 2,924.3Non Operational

ESOS (Income) - net - - - - (5.0)

Loss on Sale of Assets 0.3 0.2 1.0 1.3 2.1

FX (Gain)/Loss on International trade

Settlement

12.9 (9.4) 20.9 21.9 21.7

AFS Impairment/(Write back) Receivables (1.2) - 15.4 (1.2) 15.4

Normalised EBITDA 808.1 803.3 795.9 3,108.4 2,958.5

Normalised EBITDA Margin 32.5% 34.2% 33.5% 33.5% 33.1%

Reported EBITDA Margin 32.0% 34.6% 32.0% 33.3% 32.7%

Normalised EBITDA

EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & Impairment).

EBITDA Margin is calculated as percentage of EBITDA against Total Revenue

9

Improving margins due to higher operating revenue


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In RM mn 4Q11 3Q11 4Q10 FY11 FY10

Reported PATAMI 598.3 302.2 400.7 1,191.0 1,206.5

Non Operational

ESOS (Income) - net - - - - (5.0)

FX (Gain)/Loss on International trade

settlement12.9 (9.4) 20.9 21.9 21.7

(Gain)/Loss on Sale of Assets and Investments* (5.2) (278.1) (214.4) (285.2) (371.2)

Unrealised FX (Gain)/Loss on Long Term loans (14.5) 122.6 15.8 58.5 (303.7)

Impairment of AFS receivables (1.2) - 15.4 (1.2) 15.4

Last Mile Tax Incentives for prior years (350.2) - - (350.2) -

Normalised PATAMI 240.1 137.3 238.4 634.8 563.7

Normalised PATAMI

* Comprise fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for sale) investments, mainly

due to disposal of Axiata shares (2010: Axiata & Measat)

10


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22.3 23.0

20.4 18.0

18.9 19.8

11.6 11.3

5.6 6.3

5.7 6.1

4.3 4.40.7 0.8

FY10 FY11

Bad Debt

Marketing ExpensesSupplies & material

Maintenance Cost

Other operating cost

Manpower cost

Direct cost

Dep & Amortisation

Revenue = Operating Revenue + Other Operating Income

Cost % of Revenue1

Note: The classification of cost is as per financial reporting

(Please refer to Appendix for quarterly details & breakdown)

Cost/revenue ratios maintained YoY

1

11

RM mnRM mn

Total Cost / Revenue ( %)

RM8,015.4

89.6%

RM8,313.2

89.7%

FY 2011 vs. FY 2010

Higher Depreciation & Amortisationmainly due to higher asset

base, provision for asset write-off

nett of change of useful life impact

Lower Direct Cost mainly due to

lower domestic interconnect and

international outpayment

Higher Manpower cost mainly due

to higher staff benefits

Higher Maintenance Cost mainly due

to NGN, new IP core maintenance

contracts and equipment rental

Higher Marketing Expenses mainly

due to higher commissions in line

with Unifi growth

% of Revenue


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1,102 1,060

838 976

772 527

0

500

1,000

1,500

2,000

2,500

3,000

FY10 FY11

Access Core Network Support System*

511401

308343

309 395

0

200

400

600

800

10001200

FY10 FY11


591 659

530633

463 132

0

200

400

600

800

1000

1200

1400

1600

1800

FY10 FY11


Group Capital Expenditure

** Gross capex to be shared with Government equally1H2010 capex has been restated to include IPTV

Note: Government coinvestment treated as deferred income, to be amortised

progressively to match against the depreciation of assets

*Include Application, Support System &Others (building, landimprovement, moveable plants,

application & otherassets)

Capex/Revenue ratios continued to improve

12

Total Capex

HSBB Capex**

Note : BAU Business As Usual

RM mn

2,712

1,584

30.8

BAU Capex

1,128

12.8

Capex / Revenue ( %)

1,424

1,139

12.4

2,563

28.0

15.618.0


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30 June 11 31 Dec 10 30 June 11 31 Dec 10

Return on Invested Capital 6.10% 6.03% Gross Debt to EBITDA 1.93 2.09

Return on Equity 8.65% 7.67% Net Debt/EBITDA 0.69 0.90

Return on Assets 4.65% 4.73% Gross Debt/ Equity 0.92 0.72

Current Ratio 1.65 1.62 Net Debt/ Equity 0.32 0.27

WACC 6.33% 6.58% Net Assets/Share (sen) 194.8 216.1

2

2 Based on Normalised PATAMI, comparative forDec10 is amended to be consistent with current year computation

31 Dec 11

Group Cash Flow & Key Financial Ratios

31 Dec 10

RM mn FY11 FY10

Cash & cash equivalent at start 3.488.0 3,490.2

Cashflows from operating activities 3,030.7 2,973.4

Cashflows from / (used-in) investing activities (1,338.0) (1,446.9)

Capex* 1,808.5 2,198.9

Cashflows from financing activities (962.5) (1,534.2)

Effect of exchange rate changes (5.6) 5.5

Cash & cash equivalent at end 4,212.6 3,488.0

Free cash-flow (EBITDA Capex) 1,277.9 725.4

net of HSBB grant received from Government (FY11 RM754.5mn, FY10 - RM513.1mn)

Strong Balance Sheet to support future

business requirements

1

Based on Normalised EBIT1

1

13

31 Dec 1031 Dec 11


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Financial review


Concluding remarks

14


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Voice

41%

Data

20%

Internet

22%

Others

17%

Voice

44%

Data

20%

Internet

19%

Others

17%

441 400506

1,5211,597

4Q10 3Q11 4Q11 FY10 FY11

437519 541

1,653 2,001

4Q10 3Q11 4Q11 FY10 FY11

490 456 4831,754 1,819

4Q10 3Q11 4Q11 FY10 FY11

953 947 9173,863 3,734

4Q10 3Q11 4Q11 FY10 FY11

Group Total Revenue by Product

15

Data

RM mn

RM mn RM mn

Voice

Others

InternetFY11

FY10

RM mnRM mn

RM mn

RM9,151mn

RM8,791mn

-3.2%-3.8% -3.3%

+4.2%

+23.8% +21.1%

+5.9%

-1.4% +3.7%

+26.5%

+14.7% +5.0%

Revenue growth driven by Internet, YoY growth >20%


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Retail

77%

Global

10%

Wholesale

9%

Others

4%

115 98 93

338 343

4Q10 3Q11 4Q11 FY10 FY11

276215

256

915 845

4Q10 3Q11 4Q11 FY10 FY11

193 191 201

755 770

4Q10 3Q11 4Q11 FY10 FY11

585 629 6392,264 2,459

446 458 473

1,772 1,838358 370 368

1,4311,462

347 361 417

1,3161,433

4Q10 3Q11 4Q11 FY10 FY11

Consumer SME Enterprise Government

Retail

79%

Global

9%

Wholesale

8%

Others

4%

Group Total Revenue by Line of Business

16

FY11

FY10

RM9,151mn

RM8,791mn

* Others comprise revenue from Property Development, TM R&D, TMIM, UTSB and MKL

Retail Wholesale

RM mn

RM mnRM mn

RM mn

1,8971,8171,736

Note: Due to lower bandwidth sales

Global Others*

+19.1%

-7.2% -7.7%

6,7837,192

-5.1%

-19.1% +1.5%

+4.4%+9.3% +6.0%

+5.2%

+4.1% +2.0%

Retail contribution to group revenue increases,

led by Consumer & Govt


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Net adds (in thousand)

1,212 1,261 1,311 1,3931,417 1,425 1,393 1,374

273 280285 287

291 296 314 3124 1433 64 109

164 237

-

400

800

1,200

1,600

2,000

2,400

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

Residential Business UniFi

2,763 2,775 2,794 2,799 2,710 2,692 2,633 2,566

1,553 1,558 1,533 1,535 1,607 1,596 1,568 1,546

4 14 33 64 109 164 237

0

1,000

2,000

3,000

4,000

5,000

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11Residential Business UniFi

In thousand

In thousand

-0.4%

+12.3%

-0.4%

1,485

+2.8%

4,316

Physical Highlights

Broadband Customer Growth

Fixed Line Customer Growth

WiFi Hotspot Zones

+80.3%

+14.4%

*Call Usage Only ** Streamyx Gross ARPU only ^ Streamyx Net ARPU

1,545

+60

4,337 4,341

+65

1,610

+103

1,713

4,367

Note: inclusive of NBI initiative

17

Broadband growth driven by Unifi

+59

1,772

4,381

ARPU (RM) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

Fixed Line (DEL)* 35 35 35 34 33 34 34 34

Streamyx Broadband** 82 81 77 78 77^ 77^ 78^ 78^

1,830

+58

4,397

1,871

+41

4,365 4,349

+52

1,923

2,245 2,533 2,432

10,98213,251

16,111 17,31319,799

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11


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19/28


Financial review


Concluding remarks

19


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Key Takeaways

Financial Performance

Focus on Excellence

Shareholder Value

Broadband Champion

Customer-centricity

Achievement of all Headline KPIs

Revenue growth of 4.1% vs. FY2010; KPI: 2.5% growth

Normalised EBITDA margin of 33.5%; KPI: 32%

Internet & Multimedia revenue as main driver Continuous focus on profitability and cost

Achievement of new Headline KPI

TRI*M index score of >70; KPI: 70

Strong commitment to delivering enhanced customer experience and

quality improvement programmes

Continued operational improvements

Higher operating revenue, capex efficiency and better EBITDA margin

HSBB rollout targets achieved 1.16mn premises passed;

fastest rollout in region

Malaysias broadband champion

1.92mn total broadband (Streamyx and Unifi) customers

Unifi takeup rate at >20% (over 236,000 customers) wider coverage, increased installation efficiency

HSBB a global success story

20

Commitment to create shareholder value

Total dividend payout of RM700mn (including interim dividend of

RM350.6mn paid in September 2011)

Capital repayment of 30 sen per share by way of capital reduction

totalling RM1.073bn


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Increased competition-Challenges and opportunities for TM

Outlook 2012

Transformation towards Information Exchange

-Leverage on strengths and capabilities, ICT-BPO powerhouse

Key Headline KPIs2012 2014

Revenue growth (%)

EBITDA Margin (%)

Customer Satisfaction Measure

5.0 5.0

32 Mid 30s

72 72

Continue to ride the broadband growth momentum

-Enhance customer experience, product offering and service delivery

-Maintain position as Malaysias Broadband Champion


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Appendices


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4Q11 3Q11 4Q10 FY11 FY10 FY11 vs FY10

Operating Revenue (RM mil) 2,447.2 2,321.7 2,320.6 9,150.7 8,791.0 -

Other Operating Income

(RM mil)37.0 27.8 52.7 120.9 152.9 -

Direct Costs % 16.8 18.0 19.4 18.0 20.4 Lower interconnect and internationaloutpaymentRM mil. 417.3 423.4 460.1 1,665.9 1,825.4

Manpower % 19.1 19.5 20.9 19.8 18.9 Higher staff benefits, higher welfarefund paymentsRM mil. 475.4 458.3 497.2 1,838.4 1,692.9

Supplies & Materials % 6.7 5.9 7.4 6.1 5.7 Higher customer acquisition cost,customer projects and cable costRM mil. 165.9 139.5 176.0 570.1 514.1

Bad & Doubtful Debts % 0.8 0.3 0.8 0.8 0.7 Higher trade bad debt at ConsumerRM mil. 19.8 6.8 18.3 72.8 66.9

Marketing Expenses % 5.2 4.7 3.7 4.4 4.3Higher commissions, lower A&P

RM mil. 129.7 109.7 87.8 407.7 385.7

Maintenance Cost % 7.4 6.9 5.1 6.3 5.6 Higher maintenance cost for NGN, newIP core maintancecontracts, equipment

rentalRM mil. 184.8 162.4 121.4 587.0 498.9

Other Operating Costs % 11.9 10.1 10.7 11.3 11.6

Lower building rentalRM mil. 295.2 236.9 253.9 1,043.3 1,035.7

Depreciation & Amortisation % 21.6 24.7 23.8 23.0 22.3 Higher asset base, new asset additionsand asset impairmentRM mil. 535.9 580.7 565.7 2,128.0 1,995.8

Total (RM mil) 2,224.0 2,117.7 2,180.4 8,313.2 8,015.4 -

Total (%) 89.5 90.1 91.9 89.7 89.6 -

Cost % of Revenue

23


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6,968.8162.9

10,053.9

6,402.7

1,559.6

2,072.7

18.9

17,185.6

6,925.6

1,444.6

506.8

4,213.0

761.2

4,186.2

3,552.1

7.7626.4

2,739.4

13,613.0

833.2

17,185.6

7,709.4150.8

8,630.3

5,506.0

1,664.2

1,432.1

28.0

16,490.5

6,938.5

1,801.5

527.8

3,488.5

1,120.7

4,289.5

3,639.2

26.0624.3

2,649.0

13,112.1

729.4

16,490.5

Shareholders FundsNon-Controlling Interests

Deferred & Long Term Liabilities

Long Term Borrowings

Deferred Tax

Deferred Income

Derivative financial liabilities

Current Assets

Trade Receivables

Other Receivables

Cash & Bank Balances

Others

Current Liabilities

Trade and Other Payables

Short Term BorrowingsOthers

Net Current Assets

Property Plant & Equipment

Other Non-Current Assets

RM MillionAs at 31 Dec 2011 As at 31 Dec 2010

Group Balance Sheet

24


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3,177 3,081

871 982

1,637 1,982

1,4541,589

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FY10 FY11

Others

Internet

Data

Voice

787 775 752

215 266 230

431514 535

394 374520

0

600

1200

1800

2400

4Q10 3Q11 4Q11

Others

Internet

Data

Voice

Consumer

33%

SME

26%

Enterprise

21%

Government

20%

Consumer

34%

SME

26%

Enterprise

20%

Government

20%

Total Revenue By Products

RM mn +4.4%

1,736

FY11

+9.3%

RETAIL

Revenue by ProductRevenue by Business Unit

FY10

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination

RM mn

RM mn

RM7,192mn

RM6,783mn

25

RM mn +6.0%

6,7837,192

1,8171,897

WHOLESALE


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256 224

566 597

65 85

0

200

400

600

800

1000

FY10 FY11

Others

Data

Voice

58 54 54

154 151 155

23 22 23

0

50

100

150

200

250

4Q10 3Q11 4Q11

Others

Data

Voice

ASP

17%

MC

83%

ASP

16%

MC

84%

MC : Malaysian Carrier

ASP : Application Service Provider

Others : Include internet

WHOLESALE

FY11

FY10

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination 26

RM mn +2.0%

755 770

Revenue by ProductRevenue by Customer Segment

RM mn +5.2%

193

+4.1%

191 201


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446 478

82 70

411 344

288

0

200

400

600

800

1000

1200

FY10 FY11

Others

Data

IRU Sales (Data)

Voice

111143 126

82 1056

86

66

104

5

2

2

0

50

100

150

200

250

300

350

4Q10 3Q11 4Q11

Others

Data

IRU Sales (Data)

Voice

Africa &

Middle East

6%America

13%

Europe

10%

South Asia

34%

North Asia

17%

Oceania

10%

Others10%

Africa &

Middle East

9%

America

7%

Europe

11%

South Asia

38%

North Asia

14%

Oceania7%

Others

14%

FY11

FY10

Others : Include internet

GLOBAL

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination27

Revenue by RegionRevenue by Product

RM mn -7.7%

915

845

RM mn +19.1%

276

-7.2%

215

256


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THANK YOUAny queries please email to : [email protected]

4q11 - analyst deck - final

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