Corporate PresentationPT Telekomunikasi Indonesia, TbkFirst Half 2009 Results
presented by Rinaldi Firmansyah (CEO)
NDR by Deutsche BankUnited Kingdom & Frankfrut ‐ GermanAugust 10‐12, 2009
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Disclaimer
This document contains financial conditions and result of operation, and may also contain certain projections, plans, strategies, and objectives of the Company, which would be treated as forward looking statements within the meaning of applicable law.
Forward looking statements, by their nature, involve risk and uncertainty that could cause actual results and development to differ materially from those expressed or implied in these statements.
TELKOM does not guarantee that any action, which should have been taken in reliance on this document will bring specific results as expected.
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Content
TELKOM in Brief
Telco Industry in Indonesia
Business Results (Operational & Financial) – H1/09
Business Development
TELKOM Transformation and Strategic Initiatives
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TELKOM Ownership ...
TELKOM is the largest full service and network provider in Indonesia, owned by the Government of Indonesia and Public. (Total shares = 20,159,999,280, including 1 Dwiwarna share series A)
as of June 30, 2009
Government
Public
52.47%10,320,470,711 shares
Treasury Stock
490,574,500 shares
47.53%9,348,954,069 shares
The biggest public listed company in Indonesia( Market cap : Rp.151 Tn, or 9.5% of total market cap. at IDX)
TELKOM listed at the Indonesia Stock Exchange (IDX), the New York Stock Exchange (NYSE) as well as theLondon Stock Exchange (LSE) on November
14, 1995,and also Publicly Offering Without Listing (POWL) at Tokyo Stock Exchange (TSE)
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TELKOM Core Business
Market leader with more than 90%market share
Operated by Division : Reg. Div 1-7; FWN Div; Infratel Div;
CISC Div; Enterprise Div; and Subsidiaries :
UN
CO
NSO
LC
ON
SOLI
DA
TED
New Wave Business with significant growth
Operated by:
No.1 cellular operator with more than 49% market share
Operated by:
AWI Finance B.VBalebat
Property, telco infrastructure, trade and finance services, call center and directory, andprinting
As of June 30, 2009
Others
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TELKOM’s Map of Operations
Regional ISumatera Island
Regional IIGreat Jakarta
Regional IIIWest Java
Regional IVCentral Java& DIY Regional V
East Java
Regional VIKalimantan
Regional VIIEastern IndonesiaBali, Nusa Tenggara,Sulawesi, Maluku & Papua
Covers all over Indonesia : 33 provinces and 440 districts
7 Regional Division913 Customer Service Point / PlasaTELKOM(11 shared with GraPARI)More than 317 K Warung Telkom
Subscribers in Java (70%)
4 Areas11 Regional Sales71 GraPARI (51 shared with PlasaTELKOM)271 Gerai HALO
Subscribers in Java (70%)
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Board of Directors
Rinaldi Firmansyah
President Director
Sudiro Asno
Director of Finance
Faisal Syam
Director ofHuman Capital &
General Affair
I Nyoman G Wiryanata
Director ofConsumers
Indra Utoyo
Director ofInformationTechnology
& Supply
Ermady Dahlan
Director ofNetwork &
Solution
Arief Yahya
Director ofEnterprise &Wholesale
Prasetio
Director ofCompliance &
RiskManagement
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Content
TELKOM in Brief
Telco Industry in Indonesia
Business Results (Operational & Financial) – H1/09
Business Development
TELKOM Transformation and Strategic Initiatives
9
Telco Industry - Environment Overview
Highlights on Telco Industry in Indonesia :
Environment is very dynamic
There are 11 Telco Operators
Regulation Changes
National Telephone Penetration already around 70%
Traffic Pattern Changes
Significantly increase in Data & Internet
Price war on Cellular Business
Tariff decreased significantly
Global Crisis
TELKOM’s Strategies :Strengthen the core to deliver the fundamentalExpand into adjacent to build momentum for new portfolioEmpower business units to drive growthTransform the legacy & culture
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Telco Industry - Environment Overview
9%
27%8%
56%
0-1415-1920-5960+
Population by Age
Indonesia population
Population: approx. 227 million +
Young dynamic population
There are 11 operators for more than 227 Mn population with 56 % young dynamic population…
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Penetration in Telco Industry
Amid intensifying competition, TELKOM remains market leader in all product line businesses…
TotalIndustry
± 8.7 mn ± 23 mn ± 152 mn ± 1.1 mn
CellularFixed Wireline
Fixed Wireless
Broadband Data Comm
Penetration13%
Penetration±63%
Penetration<1%
Rev. Share± 52%
TELKOM 90%BBT
Telkomsel 51%IndosatExcel Hutchinson (3)AxisSampoernaMobile‐8
TELKOM 59%IndosatBakrie Smart
TELKOM 52%ISAT Group IndosatIM2 Lintas ArtaExcel
Speedy 816 KWireless (HSDPA) ~ 150K (Telkomsel)Others : Cable etc.
Fixed Line
as of June 30 2009
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Content
TELKOM in Brief
Telco Industry in Indonesia
Business Results (Operational & Financial) – H1/09
Business Development
TELKOM Transformation and Strategic Initiatives
13
TELKOM’s transformation is on going process…
Began terminating KSO Agreement
(2001)
2001Cross ownership termination with IndosatTELKOM acquired 35% interest in Telkomselfrom Indosat
2002Implementation of duopoly
1999Telecommunication industry reforms based on UU No 36Terminated the exclusive rights of TELKOM to provide fixed-line services
1st Phase Transformation 2nd Phase Transformation
Govt transformed PERUMTEL into
PT. TELKOM (1991)
Fundamental Change :
Basic Culture Transformation
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Go Public & listed on JSX, SSX, NYSE,LSX & TSE (POWL)
1. Restructuring 12 WITEL into 7 Regional Div.
2. KSO Agreement in 5 Regional Div.
Improving the transparency and
moving toward world class best practice
2
Transformation from Asset-based Company to Customer-Centric
Company and evolving from a Telco Company
to an InfoCommCompany
Main Drivers:End of
monopoly/exclusivity right to provide fixed-
wireless services (“Local” and “Long
Distance”).
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Moving from F.M.M to T.I.M.E
business portfolio by strengthening the core
and growing new wave business
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1988 -1992
1992 -1997
GO PUBLIC! 20082002 - 2005
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Strengthen Core Business
Grow New Wave
Delivering exceptional value our customers
Competitive Sustainable Growth
Superior Value Creation
Strategy Implementation Starting 2008 : Transforming Our Business..
TELKOM has to transform its business to TIME (Telecommunication, Information, Media, and Edutainment based services) to maintain its competitive sustainable growth…
5 Integrated NGN
2 Align Cellular‐FWA & separate FWA as buss. unit
Optimize FWL Legacy1
8 Streamline subsidiary portfolio
3 Invest in Broadband
4 Integrated Enterprise Solutions
6 Expand into IT Services
7 Expand into Portal Business
9 Align Business Structure and Portfolio Management
10 Transforming Culture
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Content
TELKOM in Brief
Telco Industry in Indonesia
Business Results (Operational & Financial) – H1/09
Business Development
TELKOM Transformation and Strategic Initiatives
16
Operational Highlights Q2/09
..in almost all business segments, TELKOM has a significant customer base growth story..
Q2/08 Q2/09
Customer Base (LIS)
MoU (Bn minutes)
BTS (Unit)
Fixed Wireless 2,677 4,943 85%
Fixed Wireless 6.1 8.6 42%
Cellular 32.1 68.1 112%
Cellular 23,056 28,481 24%
22.2
Cellular (mn) 52.4 76.0 45%
Broadband Internet (‘000) 0.4 0.8 107%
Fixed Line (mn)
Growth (%)
16.1 38%
17Line in Service (LIS)
(mn)
8.78.6
Q2/08 Q2/09
1%
Fixed Line Business (1/2)
as of June 30, 2008 & 2009
141
114
Q2/08 Q2/09ARPU(Rp)
19%
Fixed Wireline
The fixed wireline business in Indonesia still provides some room for growthdespite pressure on margins…
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7.4
13.5
Q2/08 Q2/09
2,677
4,943
Q2/08 Q2/09
6.1
8.6
Q2/08 Q2/09
41
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Q2/08 Q2/09Subscribers
(mn)
83%
Fixed Line Business (2/2)
BTS(unit)
85%
as of June 30, 2008 & 2009
Minutes of Use(bn minutes)
42%
ARPU‐Blended(Rp)
43%
Fixed Wireless
19
52.4
76.0
Q2/08 Q2/09
32.1
68.1
Q2/08 Q2/09
23.1
28.5
Q2/08 Q2/09
63
47
Q2/08 Q2/09
BTS(000)
24%
ARPU ‐ Voice (Blended) (Rp 000/month)
25%
Minutes of Use(bn minutes)
112%
Cellular Business
Subscribers(mn)
45%
Telkomsel is still the clear market leader in cellular GSM with around 51% of market share…
as of June 30, 2008 & 2009
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Broadband Business (Speedy)
393
816
Q2/08 Q2/09Subscribers
(‘000)
107%
0.57
1.18
Q2/08 Q2/09Revenues(Rp. Tn)
108%
has a strong opportunity to continue growing in the new wave business…
….Speedy revenue grew significantly by 108%
as of June 30, 2008 & 2009
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Financial Highlights Q2/09
(in Rp. Tn) Q2/08 Q2/09
Total Assets 85.9 94.2 9.6%
Total Equity 30.4 34.1 12.3%
EBITDA Margin (%) 60.3 59.5 0.8%
Net Income 6.3 6.0 4.0%
Net Income/Share (Rp.) 317.83 306.04 3.7%
Total Liabilities 47.6 51.6 8.2%
30.7
Operating Expenses 17.7 19.1 7.6%
EBITDA 18.2 18.3 0.2%
Operating Revenues
Growth (%)
30.2 1.5%
In tight competition, total revenues has delivered positive result in Q2/09 …
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QoQ Comparison - Q1/09 vs Q2/09
Q1/09 Q2/09
Operating Revenues (Rp. Tn) 16.0
Operating Expenses (Rp. Tn) 9.4 9.7 2.8%
Operating Income (Rp. Tn) 5.3 6.3 18.9%
Net Income (Rp. Tn) 2.5 3.6 45.9%
EBITDA Margin (%) 58.3 60.6 1.6%
9.7EBITDA (Rp. Tn)
Growth (%)
14.7 8.6%
8.6 13.0%
…during Q2/09, financial performance showed positive results
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Our New Wave business has grownsignificantly (52.5%)….
…and the contribution to total revenues reached 9% (2009) from 6% (2008)
Legacy and New Wave Revenues Q2/09
28,389 27,894
1,822 2,779
Q2/08 Q2/09
Total (Rp. Bn)
30,211 30,673
New Wave Business
52.5%(Rp.957 bn)
Legacy Business
1.7%(Rp. 495 bn)
The decline of Legacy revenues was partially offset by an increase of New Wave revenues…
as of June 30, 2008 & 2009
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Revenue Drivers Q2/09
5.3
4.3
Q2/08
Q2/09Fixed Lines • On‐net and off‐net usage• TIC usage
19%
7.4
7.9
Q2/08
Q2/09Data, Internet &IT Services
• Internet connectivity • Speedy subscribers 107%
7%
0.5
0.5
Q2/08
Q2/09Network • Leased lines services as a result from integrated marketing and sales development
14%
12.2
13.5
Q2/08
Q2/09Cellular • Minute of Use 112%• Subscribers 45%
11%
4.4
3.9
Q2/08
Q2/09Interconnection • Change in life style• Customers preference to make on‐net call
12%
14%
44%
13%
26%
2%
as of June 30, 2008 & 2009 (In Rp. Tn)Total Revenue slightly increased by 1.5% to Rp. 30.7 Tn
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Expense Drivers Q2/09
5.1
6.0
Q2/08
Q2/09Depreciation • Depreciation expenses of Telkomsel : 25%• In line with the expansion of network infrastructures
18%
4.3
3.8
Q2/08
Q2/09Personnel • Employee’s income tax • Vocation pay, incentives & other benefits
12%
5.6
6.4
Q2/08
Q2/09Operation, Maint.& Tel. Services
• Total BTS’s : 24%• Overall network capacity : 44%• Affect: maintenance costs, frequency fees & power supply costs
14%
1.8
1.9
Q2/08
Q2/09General &Administrative
• Amortization of goodwill & intangible assets • Collection expenses • General and social contribution
6%
0.9
1.0
Q2/08
Q2/09Marketing • Marketing and promotion program • Customer education program
7%
as of June 30, 2008 & 2009 (In Rp. Tn)Personnel expenses has decreased by 12% and total expenses Rp. 19.1 Tn
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CAPEX in Q2/09
......continuing to increase on capacity, coverage and improve quality of service as well as to provide investment to develop our new wave businesses…
Q2/08 Q2/09
TELKOMRp3,345 bn
TELKOMSELRp.5,446 bn
24%
75%
37%
60%
Total (Rp. Bn)
8,323 9,090
as of June 30, 2008 & 2009
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Consolidated Debt Q2/09
Decreasing in forex debt to minimize forex loss on our bottom line
Forex Debt in US$ has decreased by 12% in Q2/09
Q2/08 Q2/09
62%
30%
75%
18%
18,29313,938Total (Rp. Bn)
8%
7%
IDR/Rupiah
U.S. Dollar
Japanese Yen
To minimize effect of forex fluctuatuion, company has reduced foreign debt mainly in US$...
8%
7%
as of June 30, 2008 & 2009
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Content
TELKOM in Brief
Telco Industry in Indonesia
Business Results (Operational & Financial)
Business Development
TELKOM Transformation and Strategic Initiatives
Thanks for your attention...
Contact Address :Investor Relations & Corporate Secretary DepartmentGrha Citra Caraka 5th flJl. Jend. Gatot Subroto Kav. 52Jakarta, 12710IndonesiaTel : +62‐21‐5215109Fax : +62‐21‐5220500Email : [email protected]
http://telkom‐indonesia.com
Any further questions?
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Business Development (1/3)
Reshetnev to build TELKOM‐3 satelite Contracts for the supply of new TEKOM satellite : TELKOM‐3
Launching on August 2011
Will offer new transponders in Ku‐band
Coverage : over South East Asia
TELKOM – Orange in network services partners agreement
TELKOM and France Telecom’s Orange Business Services Unit signed a contract
To provide advanced network services to Indonesia
TELKOM recorded on 675 of the Forbes Global 2000
In 2009, was the 3rd times2008 : rank 7292007 : rank 835
Based on the amount of income, profit, assets and market value
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Business Development (2/3)
FinanceAsia “Asia’s Best Companies 2009”
Best Managed Company (rank 2nd)
Best Corporate Governance (rank 6th)
Best Investor Relations (rank 4th)
Best Corporate Social Responsibility (rank 2nd)
Most Committed to a Strong Dividend Policy (rank 1st)
Contact Center Asia Pacific Top Performer 2009
The Best Outsourcing Partnership‐Asia Pacific 2009 (Silver)
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Business Development (3/3)
Indonesia Cellular Show 2009 The Best Operator CDMA untuk TelkomFLEXI
Top Brand Award Internet Service Provider for Speedy and Telkomnet Instan
Indonesia Institute for Corporate Directorship (IICD)
The Best Good Corporate Governance Award Non Financial Sector
Bisnis Indonesia Best Emiten for category of infrastructure, utility and transportation
CEO of the Year 2009
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Telco Operators share price at IDX *)
TELKOM share price increased by 21% …
Note :*) during period : July 15, 2008 – July 15, 2009
Rp %
6.795 8.200 1.405 21%
6.750 5.150 (1.600) ‐24%
2.100 1.280 (820) ‐39%
2.215 2.123 (92) ‐4%
July 15, 08 July 15, 09 Changes
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Subsidiaries
PT. Telekomunikasi Seluler
65% ownership(Cellular)
PT. DayamitraTelekomunikasi
99.99% ownership(Fixed Wireline - Kalimantan)
PT. Graha Sarana Duta99.99% ownership
(Property & Construction)
PT. MultimediaNusantara
99.99% ownership(Multimedia)
PT. IndonusaTelemedia
95.68% ownership(Multimedia)
PT. InfomediaNusantara51% ownership
(Telephone Directory & Call Center)
PT. Napsindo PrimatelInternational
60% ownership(Network Access Point)
PT. Pramindo IkatNusantara
99.99% ownership(Fixed Wireline - Sumatra)
PT. Pasifik SatelitNusantara
22.38% ownership(Satellite Transponder)
PT. Citra Sari Makmur25% ownership
(VSAT)
PT. Pembangunan Telekomunikasi
Indonesia3.18% ownership
(Construction & Maintenance)
PT. Batam BintanTelekomunikasi
5% ownership(Fixed Wireline – Batam & Bintan)
PT. Patra TelekomunikasiIndonesia40% ownership
(VSAT)
Consolidated Associated Companies
PT. Telkom InternationalIndonesia
99.99% ownership(Investment & Finance)
Ownership as of June 30, 2008