PT. Indosat Tbk. Nine Months 2016 Results

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1 PT. Indosat Tbk. Nine Months 2016 Results

2 49 th Anniversary 20 November November

3 Indosat Ooredoo reborn After 1 year

4 Leading the market with innovations Innovative content-enriched offerings, simple and fair tariff schemes attract more and better customers to us 4

5 High-impact and distinctive branding Continuous M3 Ooredoo and 4Gplus campaigns with strong visibility and recognition drive brand preference and differentiation 5

6 Simplified and superior customer experience Create a more open, streamlined and agile products and way of doing things; inject the digital spirit 6

7 Financial and Operational Highlights

8 9M16 YoY Overview Consolidated Revenue increased 9.9% from IDR 19,582 billion to IDR 21,525 billion EBITDA increased 10.5% from IDR 8,568 billion to IDR 9,466 billion, EBITDA Margin reached 44.0% Profit Attributable to Owners of The Parent increased from a loss of IDR 1,122 billion to a profit of IDR 845 billion Free Cash Flow decreased from IDR 2,953 billion to IDR 2,647 billion 8

9 3Q16 QoQ Overview Consolidated Revenue increased 6.4% from IDR 7,129 billion to IDR 7,583 billion EBITDA increased 11.2% from IDR 3,080 billion to IDR 3,425 billion, EBITDA Margin reached 45.2% Profit Attributable to Owners of The Parent increased 97.9% from IDR 211 billion to IDR 417 billion Free Cash Flow increased from IDR 877 billion to IDR 1,307 billion 9

Financial Highlights in IDR billion 9M-15 9M-16 YoY 2Q-16 3Q-16 QoQ Operating Revenue 19,582 21,525 9.9% 7,129 7,583 6.4% EBITDA 8,568 9,466 10.5% 3,080 3,425 11.2% EBITDA Margin 43.8% 44.0% 0.

10 Financial Highlights in IDR billion 9M-15 9M-16 YoY 2Q-16 3Q-16 QoQ Operating Revenue 19,582 21, % 7,129 7, % EBITDA 8,568 9, % 3,080 3, % EBITDA Margin 43.8% 44.0% 0.2ppt 43.2% 45.2% 2ppt Profit (Loss)Attributable to Owners of the Parent -1, % % Strong growth in revenue combine with successful cost control initiative and stable currency rate contribute to strong growth in EBITDA and positive bottom line. 10

11 Segment Revenue Overview in IDR billion Operating Revenue Breakdown 6, , % YoY 6, % QoQ 7,129 7, QoQ / YoY +5.3% / -12.8% % / +13.3% 5,768 5,904 5,676 5,914 6, % / +9.2% 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 Fixed Voice Fixed Data Cellular Quarterly cellular revenue in 3Q-16 grew due to seasonality Ramadan and Hajj. Initiative in fixed data segment to provide IT service that was launched back in 1Q-16 started to deliver a result to support revenue growth. 11

12 Cellular Revenue Performance 9M-16 YoY 3Q-16 QoQ Voice SMS Data 2.9% 2.4% 52.2% 2.9% 8.0% 0.3% - Healthy growth in all services YoY and QoQ. - Initiative to optimize revenue generated by traditional business was able to prevent sharp decline from data cannibalization. VAS 32.7% 13.2% Digital business initiatives pushed VAS revenue growth 12

13 Cellular Customer Base in million Number of cellular customers +18.3% YoY +1.4% QoQ in million Net cellular customers additions Q-15 4Q-15 1Q-16 2Q-16 3Q-16 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 Momentum continued due to Ramadan and Hajj season, raised number of data users. 13

14 ARPU maintained in thousand IDR (ARPU) ARPU and ARPM in IDR (ARPM) in billion minutes (Voice Traffic) Voice Traffic and MOU in minute/subscriber (MOU) % YoY % QoQ % YoY +6.6% QoQ Q-15 4Q-15 1Q-16 2Q-16 3Q-16 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 ARPU ARPM Voice Traffic MOU ARPU slightly declined on QoQ basis due to aggressive campaign in ex-java market. However, ARPU as of 9M-16 YoY maintained. Voice traffic increased due to our expansion in ex-java area continues. 14

15 Strong Data Usage Data Usage SMS Delivered in TByte in billion % YoY +56.0% QoQ -21.2% YoY -11.6% QoQ 93, , ,871 57,276 63,987 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 Data traffic spiked due to aggressive campaign during Ramadan and Hajj season. SMS traffic continued to decline as trend shifting toward messaging application. 15

16 Operational expenses as percentage of revenue 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 Cost of Service (CoS) 40.5% 42.1% 40.4% 41.4% 40.6% Personnel 6.8% 7.6% 7.8% 7.3% 6.8% Marketing 3.8% 6.8% 4.7% 4.9% 4.0% General and Administration 2.9% 3.0% 3.7% 3.2% 3.5% Total Operating Expenses 54.0% 59.6% 56.5% 56.8% 54.9% Depreciation and Amortization 29.8% 35.1% 32.6% 31.3% 29.9% Total Expenses 83.8% 94.7% 89.1% 88.1% 84.8% Moderated operational expenses Continued improvement in operational process 16

17 EBITDA performance EBITDA and EBITDA margin in IDR billion 46.0% 40.4% 43.5% 43.2% 45.2% +6.9% YoY +11.2% QoQ Quarterly EBITDA in 3Q-16 in line with guidance. 3,205 2,906 2,961 3,080 3,425 3Q-15 4Q-15 EBITDA 1Q-16 2Q-16 3Q-16 EBITDA Margin 17

18 Net profit in IDR billion Net profit +15.6% YoY % YoY 845 Improvement in operational level combine with stable currency movement and low USD debt resulted positive net profit. -1,330 9M-14* -1,122 9M-15 9M-16 * Restated due to implementation of PSAK 24 (revised 2013) effective 1 January

19 Balance sheet Gross debt* and gross debt/ebitda in IDR billion in IDR billion Net debt* and net debt/ebitda % YoY 25,676 27,002 23, % YoY ,340 23,273 21,120 9M-14 9M-15 9M-16 9M-14 9M-15 9M-16 Gross Debt Gross Debt/EBITDA Net Debt Net Debt/EBITDA * IDR 3.95tn, IDR 4.24tn and IDR 3.46tn of obligation under finance lease are included in 9M14, 9M15 and 9M16 respectively Gearing level continuously improved US debt portion has come down to 12% level 19

20 Free cash flow & Capex Free cash flow Capex and Capex/Revenue in IDR billion in IDR billion in % , , ,869 2, , , ,910 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16-1,392 3Q-15* 4Q-15* 1Q-16 2Q-16 3Q-16 * Reclassification from repayment of obligation under finance lease Capex Capex/Revenue FCF is steadily growing, supported by improved operating CF generation and moderated capex. Capex disbursement is in line with guidance toward end of year. 20

21 Network & Data User Number of BTS Data User +16.9% YoY +1.6% QoQ In million +22.4% YoY +12.3% QoQ 46, ,687 52,326 53,333 54,212 3,361 3,544 3,724 4, ,671 23,730 25,068 25,816 26,273 23,525 23,596 23,714 23,793 23,859 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 4G 3G 2G 4G coverage has reached 94 cities and counting Data users are steadily growing with 1.3Gb/month usage on average. 21

22 Management focus & Key updates

23 Competition in Data today in IDR / MB RPMB* Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 * RPMB: Revenue Per Megabyte We observe a trend of decreasing data yields in the market with Indosat data yields also significantly decreasing over the last two quarters. The yield reduction reflects the intensifying competition in the market with major players offering significant bonus quotas of data to secure market share. Starting in 4Q-16 Indosat Ooredoo is reducing the bonus quotas of data from the currently high levels to more moderate levels to effectively bring the data yields. We hope that the other market players will also realign behind this positive trend and contribute to a healthier and more rational market. 23

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

24 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. 24

25 2016 Guidance 9M-16 Actual FY 2016 Guidance Consolidated Revenue Growth 9.9% In line with market EBITDA Margin 44.0% Low to Mid 40 s CAPEX IDR 5.7 trillion IDR trillion 25

26 Thank You Investor Relations & Corporate Secretary Jl. Medan Merdeka Barat No. 21 Jakarta Tel: Investor@indosatooredoo.com

27 Supplemental Information

IM2 case development On September 16, 2014, the South Jakarta Attorney Office ( Kejaksaan Negeri Jakarta Selatan ), without preliminary notification, executed the Supreme Court s Decision on Mr.

28 IM2 case development 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, 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. 28

The change in outlook to positive reflects the substantial improvement evident in Indosat's operational and financial profiles, with the company -- over the last four quarters -- reporting YoY

29 Credit ratings On 1 June 2016, Moody's Investors Service has affirmed Indosat Tbk. (P.T.)'s Ba1 corporate family rating. At the same time, Moody's has changed the rating outlook to positive from stable. The change in outlook to positive reflects the substantial improvement evident in Indosat's operational and financial profiles, with the company -- over the last four quarters -- reporting YoY revenue growth of 11%-13%, above the sector average in Indonesia of about 9%. 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 foreigncurrency senior unsecured rating at BBB. Fitch has also affirmed the National Long-Term Rating at AAA(idn). The Outlook on the ratings is Stable. On 25 January 2016, Standard & Poor's Ratings Services ( S&P ) affirmed its 'BB+ longterm 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 months. On 12 August 2016, PEFINDO has affirmed its idaaa ratings for PT Indosat Tbk (ISAT) and its Shelf Registration Bond I/ including its proposed fourth phase issuance of up to IDR3.2 trillion; 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 Shelf Registration Sukuk Ijarah I/ , including its proposed fourth phase issuance of up to IDR288 billion; Sukuk Ijarah IV/2009 Serie B; and Sukuk Ijarah V/2012. The outlook for the corporate rating is stable. 29

30 Debt maturity profile* In IDR trillion IDR USD in IDR * Excluding obligation under capital lease 30

Spectrum overview in Mhz Number of BTS 850 Mhz 900 Mhz 1800 Mhz

0* Valid until 2020 2020 2020 2019 & 2026 2019 Telkomsel 2 x 4.

31 Spectrum overview in Mhz Number of BTS 850 Mhz 900 Mhz 1800 Mhz 2100 Mhz 2300 Mhz Indosat 2 x x x x * Valid until & Telkomsel 2 x x x x * XL Axiata - 2 x x x Hutchison x x * Indosat/IM2: West Java exclude Bogor, Depok & Bekasi ; Telkom/Telkomsel: Maluku & North Maluku 31

32 Disclaimer 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 32

PT Indosat Tbk 1Q 2015 Results

PT Indosat Tbk 1Q 2015 Results Agenda Financial and Operational Highlights Management Focus and Key Updates Supplemental Information 2 Financial and Operational Highlights 3 1Q15 QoQ Overview Consolidated