PT XL AXIATA TBK. (XL) CORPORATE PRESENTATION 1H 2012
For the past 4 years, XL has continuously outperformed the competitors YoY revenue growth outperformed competitors since 2008 Improvement in Revenue Market Share 19.4% 19.8% 20.5% 51% 15.8% 16.5% 38% 39% 11.6% 27% 20% 3% 10% 16% 12% 4% 3% 12% 12% 8% 9% 7% 5% 4% 2006 to 2007 2007 to 2008 2008 to 2009 2009 to 2010 2010 to 2011 1H11 to 1H12 2007 2008 2009 2010 2011 1H 12 XL Operator A Operator B Source: Company data, Info memo Operator A, Audit report Operator B 1
Strong Financial Performance driven by data Revenue (in IDR Tn) EBITDA (in IDR Tn) & EBITDA margin (%) +13% 42% 42% 45% 53% 49% * 52% 48% 8.4 12.2 13.9 17.6 18.9 9.1 10.3 3.5 9.3 9.3 5.1 6.2 4.8 4.9 2007 2008 2009 2010 2011 1H11 1H12 Data & Vas Revenue (in IDR Bn) 2007 2008 2009 2010 2011 1H11 1H12 Net Income (in IDR Bn)** 3,269 18% 2,332 1,063 1,813 963 1,540 1,259 235 2,206 599 666 401 686 1,369 1,577 507 940 324 573 77 159 2007 2008 2009 2010 2011 1H11 1H12-2% 3,036 3,168 1,364 1,579 1,542 721 304 2007 2008 2009 2010 2011 1H11 1H12 Source: Company data Data Rev Vas Rev *Normalized EBITDA margin due to provision of severance payment FY11 Rp 269 bn is 51% **Net income excluding unrealised forex loss/gain, accelerated depreciation and provision for severance payment 2
The context is changing: Consumer behavior is shifting The 'old' game was played on Voice at competitive price The game now is multidimensional and complex Indonesia now is... Mainly voice and SMS Limited data usage No Skype Mobile yet Mostly feature phones Limited Smartphone penetration No iphone or Android Price key driver of usage Shifting communication patterns Towards Social Networking, messaging, always on, Apps,... Role of mobile phone changing in peoples lives Increasing penetration of Smartphones Content and apps more relevant Demand for good quality and reliable service 3
In 1H12, XL continues to focus on Data Shift in revenue composition Growth in overall line of Services Data 13% SMS 26% 1H 11 VAS 8% Voice 53% Data 19% SMS 28% 1H 12 VAS 3% Voice 50% Usage Revenue (Rp bn) 235 599 940 1,577 1,925 2,310 3,876 4,131 VAS -61% Data SMS +68% +20% Voice 7%... With momentum in Data Adoption 1H11 1H12 Voice SMS Data VAS Data Rev (Rpbn) 1,577 Subscribers (mn) +18% 168 617 940 38.9 20.1 +32% 45.9 26.5 Total Subs Data Subs 1H09 1H10 1H11 1H12 1H11 1H12 Source: Company data Increased data adoption with 58% of XL s subscribers are data users and tripled data traffic 4
Right Infrastructure is a Key enabler 16,729 1,690 15,039 22,191 19,349 2,709 2,044 17,305 19,482 +3,878 28,273 Nodes B 24,971 4,910 3,521 23,363 21,450 33,737 8,788 24,949 3G 150% 2G 16% 2008 2009 2010 2011 1H11 1H12 Access Backhaul Core Backbone Strongly positioned as one of the leaders in data with 8,788 Nodes B Providing superior and reliable experience in data Expanding Hot Rod 3G+ Network to major cities. Now available at 22 cities All RNC on fiber 100% of Node B will be full IP and/or fiberized IP capacity upgradable to ~155 Mbps Advanced Core Network with NGN capabilities and LTE ready Better capacity & operation management through latest IP Core transmission Nationwide backbone network linking all regions in Indonesia More than 22,000 km of Fiber Optic Transmission 5
XL focus on Customer Experience Establish a service-centric organization by forming Service Management Department in Q3 11 as guardian to drive customer experience agenda, with proper governance and processes UNIVERSE AWARENESS ADOPTION ADDICTION MONETIZATION Information and education Reason to use Experience Value to use Six -pronged program was undertaken... 6 Culture 5 Governance 1 Service strategy Sustained Improv. 4 Org. and people 2 Processes 3 Technology and tools Example: Instant internet access FTR projects to enable seamless, plug-and-play internet Instant internet access program to address issues Consumer Network Internet usage Single APN Minimizes confusion over multiple APN APN redirection Network detects wrong settings and redirects to the correct APN Proxy redirection Handset with preset competitor settings redirected to correct gateway Transparent Proxy Enables full access to websites and its functionalities Related complaints dropped from 8,600/week to 820/week 6
XL strengthens its position as a leading Data service provider Functional brand attributes Apr May Jun Apr Operator 1 Operator 2 May Jun Apr May Jun Fast Reliable 3G Network Fast data transmission Stable data transmit Supported by advanced technology 40 40 40 37 37 38 27 29 28 40 40 40 38 38 40 25 26 27 38 40 40 37 38 40 26 30 30 45 46 45 41 42 43 33 34 34 Easy access to Facebook 43 42 42 34 35 37 31 33 34 Leading Simple Easy access to Email 38 38 37 36 36 36 30 28 28 On par Easy access to Twitter 39 40 39 33 33 35 30 29 29 Good quality for smartphone 40 42 43 39 39 41 27 30 31 Transparency in price 38 39 39 33 35 37 29 31 31 Value Affordable brand 47 47 46 36 36 39 37 40 41 Flexible tariff plan 39 41 40 35 36 38 30 30 30 Cheap internet rates 41 39 38 30 30 31 31 31 32 Source: 2012 TNS brand tracking report 7
Expand to adjacent Data business Opportunities Initial Incubation Product/Partner Financial Service Commerce Entertainment Advertising ~90% of population has no access to financial services (un-banked) No leading ecosystem exists High mobile penetration (~70%) will stimulate growth in m-commerce No leading ecosystem exists Exponential growth in mobile video traffic High quality handsets enable rich entertainment contents To capture total Ad spending; benefits from interactivity and location-based Leverage strong customer analytics to offer personalized content Obtained e-money license from Central Bank Mobile Payment and Remittance platform Online payment Bill Payment Physical Payment Content and Application M-Ads: Launchedinterstitial page with various advertisers 8
Guidance 2012 Guidance Revenue growth In line with or better than the market EBITDA Margin Higher 40 s Cash out CAPEX Between IDR 7-8 Tn, of which around 60% is for data/3g service 9
Thank you