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1 Indosat IR - New Template v23 1220.pptx
1
PT Indosat Tbk FY 2013 Highlights
2 Indosat IR - New Template v23 1220.pptx 2 Indosat IR - New Template v23 1220.pptx
2 Indosat Presentation FY 2013 Highlights
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Agenda
Financial and Operational Highlights
Management Focus and Key Updates
Supplemental Information
3 Indosat IR - New Template v23 1220.pptx
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Financial and Operational Highlights
4 Indosat IR - New Template v23 1220.pptx 4 Indosat IR - New Template v23 1220.pptx
4 Indosat Presentation FY 2013 Highlights
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FY13 YoY Overview
Consolidated Revenue growth of 6.4% to IDR 23,855 billion
EBITDA decreased 1.6% to IDR 10,376 billion, EBITDA Margin of 43.5%
Loss Attributable to Owners of The Company of IDR 2,782 billion
Free Cash Flow decreased to -IDR 675 billion
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4Q13 QoQ Overview
Consolidated Revenue decreased 0.6% to IDR 6,056 billion
EBITDA decreased 9.2% to IDR 2,410 billion, EBITDA Margin of 39.8%
Loss Attributable to Owners of The Company of IDR 1,016 billion
Free Cash Flow decreased to -IDR 1,045 billion
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Financial highlights
22,419 Operating Revenue
EBITDA
EBITDA Margin
Profit /Loss Attributable to Owners of the Company
23,855
FY-12 FY-13 YoY
6.4%
10,540 10,376 -1.6%
47.0% 43.5% -3.5ppt
375 -2,782 -841.7%
6,091 6,056
3Q-13 4Q-13 QoQ
-0.6%
2,655 2,410 -9.2%
43.6% 39.8% -3.8ppt
-1,535 -1,016 -33.8%
in IDR billion
• Revenue growth and EBITDA margin FY2013 in line with guidance
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7 Indosat Presentation FY 2013 Highlights
706 845 780 820 833 833
350 328
7
Strong performance in fixed data and voice
Operating Revenue Breakdown
in IDR billion
3Q-13
-0.6% QoQ -1.4% YoY
4Q13
6,091 5,920
2Q-13 1Q-13 4Q-12 3Q-12*
Cellular
Fixed Data
Fixed Voice
-6.4% / 24.1%
0.0% / -1.5%
-0.3% / -2.8%
• Relatively steady cellular performance despite network modernization is in progress • Strong IDD incoming growth due to seasonality and higher FX in 4Q13
QoQ / YoY 6,019 6,143 5,788
280 257
4,751 5,034 5,035 4,908 4,820
278 264
*Restated due to tower transaction and service concession arrangement
4,895
6,056
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Cellular revenue performance
Voice
SMS
Data
VAS
-9.1%
4Q13 YoY
-5.8%
37.1%
54.0%
-2.7%
4Q13 QoQ
5.3%
-6.9%
2.4%
Revenue impacted by lower usage
Revenue affected by lower usage and recent less discount SMS offering
Data growth profile improving on incremental data users and aggressive campaign to drive usage
VAS growth driven by strong demand for content
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9 Indosat Presentation FY 2013 Highlights
55.5 58.5
55.9 56.5 53.8 59.6
9
Cellular customer base
4Q-13
+1.9% YoY +10.8% QoQ
3Q-13 2Q-14 1Q-13 4Q-12 3Q-12
Number of cellular customers
in million
4Q-13 3Q-12 3Q-13 2Q-13 1Q-13 4Q-12
Net customer additions
in million
• Positive net customers addition due to aggressive acquisition campaign during 4Q13 festive
4.5
3.0
-2.5
0.5
-2.7
5.8
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10 Indosat Presentation FY 2013 Highlights
115 111
95 92 96 89 125
119 127
136 133 137
18.1 18.6 16.0 15.2 15.6 14.8
10
Stable ARPU & Positive ARPM
Voice traffic and MOU
-20.2% YoY
4Q-13
-5.2% QoQ
3Q-13 2Q-13 1Q-13 4Q-12 3Q-12
Voice Traffic
in billion minutes in minute/subscriber
MOU
• ARPU is stable while ARPM increase due to higher voice tariff in certain areas • Total voice traffic decrease affected by lower MOU/customer
ARPU and ARPM
30.3 26.8 26.5 27.3 28.5 27.7
3Q-13 2Q-13 1Q-13 4Q-12 3Q-12
-2.9% QoQ +3.1% YoY
4Q-13
ARPU
in thousand IDR (ARPU) in IDR (ARPM)
ARPM
in IDR/minute
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11 Indosat Presentation FY 2013 Highlights
71 73 67 69
71 67
4,031 4,500 5,257 5,904
6,485
12,871
11
Substantial data usage growth in 4Q
Data usage
in TByte
+98.5% QoQ +186.0% YoY
4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12
SMS delivered
in billion
-7.5% YoY
4Q-13 3Q-13
-4.6% QoQ
2Q-13 1Q-13 4Q-12 3Q-12
• Data usage growth improving from data centric campaigns and an increasingly modernized network
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Operational expenses
Cost of Service (CoS)
Depreciation and Amortization
Personnel
Marketing
as percentage of revenue
General and Administration
Total Expenses
3Q-12* 4Q-12 1Q-13
40.6%
2Q-13
39.5%
5.9%
4.1%
2.4%
92.6%
• CoS impacted by regulatory fees and maintenance • Personnel and G&A increased due to restructuring, professional and legal fees
39.8%
40.5%
6.1%
4.5%
3.0%
93.8%
Total Operating Expenses 53.1% 53.3%
4Q-13
41.2%
36.5%
6.6%
3.7%
3.1%
91.2%
54.7%
*Restated due to tower transaction and service concession arrangement
3Q-13
41.6%
37.0%
7.1%
2.9%
3.0%
91.5%
54.6%
41.7%
37.8%
6.7%
4.2%
3.8%
94.2%
56.4%
42.4%
38.9%
8.6%
4.0%
5.2%
99.1%
60.2%
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13 Indosat Presentation FY 2013 Highlights
2,824 2,869 2,629 2,682 2,655 2,410
13
EBITDA performance
EBITDA and EBITDA margin
-9.2% QoQ -16.0% YoY
4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12*
EBITDA
in IDR billion
45.4% 46.7% 46.9%
EBITDA Margin
• 4Q EBITDA (YoY) impacted by increased restructuring costs, CoS, professional and legal fees
• YTD EBITDA margin in line with guidance
45.3% 43.6%
*Restated due to tower transaction and service concession arrangement
39.8%
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14 Indosat Presentation FY 2013 Highlights
Normalized net profit bridge
969
375
-2,782 -2,782
914
455
1,356
1,885
14
Normalized net profit*
Net profit
-841.7% YoY -61.3% YoY
FY-13 FY-12 FY-11**
in IDR billion in IDR billion FY13
• Net profit affected by substantial FX loss and change in network equipment useful life
Normalized Net– FX
Loss
Reported
* Net profit is Profit Attribution to Owners of the Company ** Restated due to tower transaction and service concession arrangement
Change in
Useful Life
Tax
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15 Indosat Presentation FY 2013 Highlights
2.53 2.43
2.67
24,498 25,598 27,689
2.30
2.06
2.45
22,274 21,680 25,455
15
Balance sheet
Gross debt* and gross debt/EBITDA Net debt* and net debt/EBITDA
FY-12 FY-11 FY-13
+8.2% YoY
Gross Debt
in IDR billion
Gross Debt/EBITDA
FY-13 FY-11 FY-12
+17.4% YoY
Net Debt Net Debt/EBITDA
in IDR billion
• Increased net debt due to higher FX
* IDR 3.4tn and IDR 3.9tn of obligation under finance lease are included in FY12 and FY13 respectively
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16 Indosat Presentation FY 2013 Highlights
22.2 21.5
45.1 46.5
41.3
29.6
1,334 1,322
2,612 2,750 2,516
1,792
16
Free Cash Flow
Free cash flow
in IDR billion
3,528
-447 -499
390 479
-1,045
4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12*
Capex and Capex/Revenue
4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12
Capex
in IDR billion
Capex/Revenue
• Network modernization and higher FX driving higher cash capex
*Restated due to tower transaction and service concession arrangement
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17 Indosat Presentation FY 2013 Highlights
774
661
843 798
497 442
17
Network roll-out
Number of BTS
17,211 17,334 17,452 17,668 18,214 18,871
4,431 4,596 4,645 4,781 4,993 5,409
+4.6% QoQ +10.7% YoY
4Q-13
21,930
3Q-13
21,642
2Q-13 1Q-13 4Q-12 3Q-12
2G 3G
Cellular Revenue per BTS
In IDR million
FY 2013 FY 2012
XL
Indosat
Telkomsel*
• Network modernization program mainly focusing on existing footprint in key market areas • Continuing the modernization in key market areas outside Java in 2014
22,097 22,449 23,207 24,280
*Using 9M13 Figures
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Q4 in summary
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Management Focus and Key Updates
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Near term management focus
Execute well on network modernization to improve network quality and customer experience
Drive strong uptake, usage and monetization of our data services
Improve cost efficiencies to enable investments in growth
Transform culture with focus on quick wins
Developing adjacent and new businesses
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2014 Guidance
FY 2013 Actual FY 2014 Guidance
Consolidated Revenue Growth 6.4% In line with Industry or better
EBITDA Margin 43.5% Low-Mid 40’s
Cash CAPEX IDR 9.67 trillion IDR 8-9 trillion
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Thank You
Any further questions?
Upcoming events 1Q 2014 Results
Indosat Investor Relations Jl. Medan Merdeka Barat No. 21 Jakarta - 10110 Tel: +62 21 30442615 [email protected]
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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
• Please be also advised that the information provided herein are merely issued to coincide with the release of Ooredoo QSC (formerly known as Qatar Telecom QSC) results for the year ended 31 December 2013, as the Company’s indirect majority shareholder that consolidates Indosat’s results in its financial statements. Subject to the completion of, including but not limited to the audit by the Public Accountant Firm on the Company’s consolidated financial statements which are prepared in accordance with the Indonesian Financial Accounting Standards (IFAS), Indosat expects to file and release its consolidated financial statements for the year ended 31 December 2013 on 30 April 2014 at the latest (“Indosat’s Official Release”). Accordingly, the information provided herein may differ from what is contained in Indosat's Official Release.
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Supplemental Information
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Credit ratings maintained
In June 2013, Fitch Ratings has affirmed PT Indosat Tbk's (Indosat) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'BBB'. The agency has also affirmed the Indonesia-based company's National Long-Term Rating at 'AAA(idn)'. The Outlook is Stable on the IDR and the National Long-Term Rating. Fitch has also assigned a foreign-currency senior unsecured rating of 'BBB'.
On 4 February 2014, Standard and Poor’s (“S&P”) said today that its rating and outlook on PT Indosat Tbk. (BB+/Stable/--; axBBB+/--) are not affected by the downgrade of the company's parent Ooredoo Q.S.C. (A-/Stable/A-1). Their rating on Indosat does not factor in any notching uplift from their assessment that the company is "strategically important" to its parent. The lowering of the rating on Ooredoo results in the lowering of the group credit profile of Indosat to 'a-' from 'a'. The foreign currency sovereign rating on Indonesia (BB+/Stable/B; axBBB+/axA-2) continues to constrain the rating on Indosat
On 14 March 2013, PEFINDO affirmed its ratings of “idAA+” for PT Indosat Tbk. (ISAT or the Company) and its Bonds V/2007, Bonds VI/2008, Bonds VII/2009, and Bonds VIII/2012, and “idAA+(sy)” for its Sukuk Ijarah II/2007, Sukuk Ijarah III/2008, Sukuk Ijarah IV/2009, and Sukuk Ijarah V/2012. The outlook of the rating is “Stable”. The ratings reflect the strong support from the major shareholder, the Company’s stable market position, and its stable operating performance. However, the ratings are offset by the Company’s aggressive capital structure and intense competition within the telecommunication industry.
In August 2013, Moody’s released its credit opinion on Indosat, affirmed Indosat Ba1 ratings and
Stable outlook. The stable outlook reflects Moody’s expectation that Indosat will retain its market
position amid increasing competition for data services, and leverage, in terms of adjusted
debt/EBITDA will remain in line with the rating level, at 2.5-3.0x over the near term.
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Debt maturity profile
Debt maturity profile*
In IDR trillion
0.84 0.84 0.76 0.48 0.25 0.25
7.92 5.46
1.07 1.22 1.52 0.50 1.50
1.50
2020 2019 2018 2014 2022 2017 2016 2015
IDR
USD in IDR
* Excluding obligation under capital lease
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Spectrum overview for top 5 cellular operators
10.0
900 Mhz
7.5
7.5
Indosat
Telkomsel
XL Axiata
20.0
1800 Mhz
22.5
7.5
10.0
2100 Mhz
15.0
15.0
in Mhz
- 15.0 10.0 Axis
Hutchison - 10.0 10.0
3.6
850 Mhz
5.0 – 7.5*
-
-
-
* Telkom and Bakrie Telekom have the same spectrum, differentiated by its operational areas