PT. Indosat Tbk. 1Q17 Final.pdf · Management Focus 21 Continue totransform Indosat Ooredoo become...

PT. Indosat Tbk.

First Quarter 2017 Results

Our Strategy Directionto be survive in this market and competition

Digital Partner

Being a strong interface

for our digital partners

Building a strong

organization with strong

execution capability

2PT Indosat Tbk – 1Q 2017 Results

3

All players are directing toward “Digital Telco”

Indonesia’s

Leading Digital

Telco

The King of

Digital

PT Indosat Tbk – 1Q 2017 Results

4

We have been doing our part in digital space


Building the best digital infrastructure in our presence (4G)

We redefine our digital partnership

We attempt to build end to end digital experience for our customer


How we differentiate to outperform the

competition

As a “Best Brother” to grow digital business

To become the best and preferred Telco partner for all digital

company (local and international). Focus on core (cellular, B2B,

FTTH) profitability, no investment/resources allocation on non core

business

To become telco company with the best Digital Touch Point for our

external stakeholder (Consumer & B2B) as well as internal staff

To have the fastest revenue growth in B2B ICT business by being

digital corporate partner

To become telco company with best digital customer experience

where we have coverage

To become the most attractive and preferred telco company to work

for the next generation

Building completely digital ecosystem

Re-incumbent ICT market place

Customer focus in our presence

Less people more caliber

https://www.google.co.id/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwisxJ6RsNfOAhXJNo8KHSX2B7MQjRwIBw&url=https://play.google.com/store/apps/details?id=co.happy5.android&bvm=bv.129759880,d.dGo&psig=AFQjCNGrQDB7PmTGK1ABSF0ZTZYEbaQvbg&ust=1472036120964723

Financial and

Operational Highlights

7

1Q17 YoY Overview

Consolidated Revenue increased 7.0% from IDR 6,813 billion to IDR 7,290 billion

EBITDA increased 4.7% from IDR 2,961 billion to IDR 3,100 billion, EBITDA Margin reached 42.5%

Profit Attributable to Owners of The Parent decreased from IDR 217 billion to IDR 174 billion

Free Cash Flow increased from IDR 463 billion to IDR 1,051 billion


8

1Q17 QoQ Overview

Consolidated Revenue decreased 4.8% from IDR 7,660 billion to IDR 7,290 billion

EBITDA decreased 8.8% from IDR 3,398 billion to IDR 3,100 billion, EBITDA Margin reached 42.5%

Profit Attributable to Owners of The Parent decreased 33.0% from IDR 260 billion to IDR 174 billion

Free Cash Flow increased from negative IDR186 billion to IDR1,051 billion


Operating Revenue

EBITDA

EBITDA Margin

Profit (Loss)Attributable to Owners of the Parent

7,290

1Q-16 1Q-17 YoY

7.0%

3,100 4.7%

42.5% -1.0ppt

174 -19.9%

7,290

1Q-17 QoQ

-4.8%

3,100 -8.8%

42.5% -1.9ppt

174 -33.0%

in IDR billion

6,813

2,961

43.5%

217

Financial Highlights

9

• Revenue growth, EBITDA margin and profitability maintained despite seasonality impact.


7,660

4Q-16

3,398

44.4%

260

909989 1,044 1,190

998

228226

238 266

241

in IDR billion

-4.8% QoQ+7.0% YoY

CellularFixed DataFixed Voice

-9.4% / +5.7%

-16.1% / +9.9%

-2.5% / +6.6%

QoQ / YoY

1Q-16

Operating Revenue Breakdown

Segment Revenue Overview

2Q-16

10

5,676

6,813

3Q-16

• Cellular revenue decline QoQ due to seasonality impact in 1Q.• Solid YoY growth in fixed data segment supported by IT services.

4Q-16

5,914

7,129


6,301

7,583

6,204

7,660

6,051

7,290

1Q-17

Voice

SMS

Data

VAS

-4.8%

1Q-17vs

1Q-16

-10.9%

40.5%

32.2%

-6.6%

1Q-17Vs

4Q-16

-11.5%

13.1%

-13.1%Digital business initiatives continued to find its form to generate growth

Cellular Revenue Performance

11

- Data took the lead in driving the cellular revenue growth.

- Voice service through apps started to replace traditional voice service.

- Data messaging service replaced traditional SMS further.


69.8

80.5 81.685.7

95.6

+37.0% YoY +11.6% QoQ

Number of cellular customersin million in million

0.1

10.7

1.1

4.0

10.0

1Q-16 1Q-16

Net cellular customers additions

2Q-16 2Q-16

Cellular Customer Base

12

3Q-16 3Q-164Q-16 4Q-16


1Q-17 1Q-17

ARPU and ARPM Voice Traffic and MOU

• Significant customers additions may take time to generate usage and eventually drive up ARPU.

• Total voice traffic was growing coming from customers additions.

69 7166 68

57137

126 124 123 125

14.5 15.6 16.6 16.6 15.3

+10.3% YoY -7.3% QoQ

Voice Traffic

in billion minutes (Voice Traffic)

in minute/subscriber (MOU)

MOU

26.4 25.5 24.2 24.5 21.7

-11.3% QoQ-17.8% YoY

ARPU

in thousand IDR (ARPU)

ARPM

1Q-161Q-16 2Q-16 2Q-16

in IDR (ARPM)

ARPU and voice usage indicator

13

3Q-16 3Q-164Q-16 4Q-16


1Q-17 1Q-17

Data Usage SMS Delivered

• Quarterly data revenue grew faster than traffic growth, showing better data monetization• SMS traffic continued to decline as trend shifting toward messaging application.

52 5549

4437

63,987

93,641

146,060

188,101

209,591

in TByte

+11.4% QoQ+227.6% YoY

in billion

-29.8% YoY -15.4% QoQ

1Q-16 2Q-16 1Q-16

Strong Data Usage

2Q-16

14

3Q-16 3Q-164Q-16 4Q-16


1Q-17 1Q-17

• Larger network coverage drove increase in cost of service expense.• Moderated operational expenses relative to revenue.

Cost of Service (CoS)

Depreciation and Amortization

Personnel

Marketing

as percentage of revenue

General and Administration

Total Expenses

Total Operating Expenses

Operational expenses

15

1Q-16

40.4%

32.6%

7.8%

4.7%

3.7%

89.1%

56.5%

2Q-16

41.4%

31.3%

7.3%

4.9%

3.2%

88.1%

56.8%


3Q-16

40.6%

29.9%

6.8%

4.0%

3.5%

84.8%

54.9%

4Q-16

40.9%

29.4%

7.2%

3.5%

4.0%

85.1%

55.6%

1Q-17

42.6%

30.5%

8.2%

3.6%

3.1%

88.0%

57.5%

2,961 3,080 3,425 3,398 3,100

EBITDA and EBITDA margin

-8.8% QoQ+4.7% YoY

EBITDA

in IDR billion

EBITDA Margin

1Q-16

EBITDA and Net Profit performance

2Q-16

16

43.5%

3Q-16 4Q-16

43.2%


45.2% 44.4%

1Q-17

42.5%

Net profit

-456

217 174

-19.9% YoY+147.7% YoY

1Q-171Q-161Q-15

in IDR billion

• EBITDA margin inline with guidance.• Profitability maintained.

2.73

2.19

1.84

27,398 25,91322,798

2.39

1.97

1.68

23,924 23,331 20,839

Gross debt* and gross debt/EBITDA Net debt* and net debt/EBITDA

• Currency mixed has improved and shall continue toward lower USD debt portionfollowed by further downward debt level

* IDR 4.07tn, IDR 3.76tn and IDR 3.44tn of obligation under finance lease are included in 1Q15, 1Q16 and 1Q17 respectively

1Q-161Q-15 1Q-17

-12.0% YoY

Gross Debt

in IDR billion

Gross Debt/EBITDA

1Q-171Q-15 1Q-16

Net Debt Net Debt/EBITDA

in IDR billion

Balance sheet

-10.7% YoY


5571,057

1,147

3,616

622

8.2

14.815.1

47.2

8.5

Free cash flow Capex and Capex/Revenue

• Capex spent for 1Q-2017 was in line with guidance

in IDR billion

463877

1,307

-186

1,051

Capex (Spent)

in IDR billion

Capex/Revenue

1Q-16 1Q-162Q-16 2Q-16

Free cash flow & Capex

18

3Q-16 3Q-16

in %

4Q-16 4Q-16


1Q-17 1Q-17

Number of BTS Data User

• 4G coverage has reached 136 cities and counting

23,714 23,793 23,859 24,042 24,219

25,068 25,816 26,273 27,724 28,510

3,544 3,724 4,080 4,717 5,446

+3.0% QoQ+11.2% YoY

3Q-16

2G3G

In million

52,326

1Q-16 1Q-16 2Q-16

31.235.1

39.440.5 41.1

+1.5% QoQ+31.7% YoY

Network & Data User

2Q-16

4G

19

3Q-164Q-16

53,333

4Q-16


54,212 56,483

1Q-17

58,175

1Q-17

Management focus

& Key updates

Management Focus

21

● 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-16 Actual

2017 Guidance

Consolidated Revenue Growth 9.0% In line with market

EBITDA Margin 44.1% Low to Mid 40’s

CAPEX IDR 7.3 trillion(Cash out)

~ IDR 6 trillion(Spent)

2017 Guidance


Thank YouInvestor Relations & Corporate SecretaryJl. Medan Merdeka Barat No. 21Jakarta - 10110Tel: +62 21 [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 January 17, 2017, S&P Global Ratings affirmed its 'BB+' long-term corporate credit

rating on PT Indosat Tbk. The outlook remains positive. At the same time, they affirmed

their 'axBBB+' long-term ASEAN regional scale rating on the Indonesia-based

telecommunications company.

On 17 March 2017, PEFINDO has affirmed its “idAAA” ratings for PT Indosat Tbk (ISAT)

and its Shelf Registration Bond I/2014-2016, Bond VIII/2012, and Bond V/2007 Serie B.

PEFINDO has also affirmed its “idAAA(sy)” ratings for ISAT’s Shelf Registration Sukuk

Ijarah I/2014-2016 and Sukuk Ijarah V/2012. PEFINDO has also assigned its “idAAA” and

“idAAA(sy)” ratings to ISAT’s Shelf Registration Bond II/2017-2019 of a maximum of IDR9

trillion and Shelf Registration Sukuk Ijarah II/2017-2019 of a maximum of IDR1 trillion,

including the first phase issuance of IDR2.7 trillion Shelf Registration Bond II/2017 and

IDR0.3 trillion Shelf Registration Sukuk Ijarah II/2017.

On 12 May 2017, Moody's Investors Service has has upgraded to Baa3 from Ba1 the

issuer rating of Indosat Tbk. (P.T.) (Indosat Ooredoo). The outlook for the rating is stable.

At the same time, Moody's has withdrawn the company's Ba1 Corporate Family Rating.

The rating upgrade reflects the continued strengthening of Indosat Ooredoo's operational

metrics as well as the ongoing stabilization of its financial profile, including lower leverage

levels.

On 10 March 2017, Fitch Ratings has upgraded PT Indosat Tbk's (Indosat Ooredoo) Long-

Term Foreign-Currency Issuer Default Rating (IDR) and foreigncurrency senior unsecured

debt rating to 'BBB+' from 'BBB' and simultaneously affirmed its LongTerm Local Currency

IDR at 'BBB+'. Fitch Ratings Indonesia has also affirmed the National LongTerm Rating at

'AAA(idn)'. The Outlook is Stable.

Credit ratings


1.58 0.27 0.27

4.74

2.46

3.82

1.50 1.10

2.08

0.12 0.36

0.81

0.26

In IDR trillion

20202019 202220182017

IDR

USD in IDR

2021 2024

* Excluding obligation under capital lease

2023

Debt maturity profile*


2025 2026

Number of BTS

2 x 10.0

900 Mhz

2 x 7.5

2 x 7.5

Indosat

Telkomsel

XL Axiata

2 x 20.0

1800 Mhz

2 x 22.5

2 x 22.5

2 x 10.0

2100 Mhz

2 x 15.0

2 x 15.0

in Mhz

Hutchison - 2 x 10.0 2 x 10.0

2 x 2.5

850 Mhz

2 x 4.5

-

-

15.0*

2300 Mhz

15.0

-

-

* Indosat/IM2: West Java exclude Bogor, Depok & Bekasi

Spectrum overview

28

2020 2020 2020 2019 & 2026 2019Valid until


• 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. 1Q17 Final.pdf · Management Focus 21 Continue totransform Indosat Ooredoo become...

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