June 2010
Group s Background 1950 1960-85 Started as a radio repair shop in Saraburi Province north of Bangkok 1993-97 Manuf of TV & Satellite Antenna System Integration Projects 2001-5 VSAT Service Operator Paging Network Operator GSM Network Operator Mobile Handset Distributor Call Center Services Provider Multimedia Content Provider ATM Services (Cambodia) 2006-7 Captive Power Plant 23MW (Cambodia) Waste Management Services@BKK airport
Samart: Today. Market leader in C, Ku band, TV antenna & Set top boxes Top 3 System Integrator & largest satellite application provider Leading call center provider Awarded Best C C in Asia-Pacific # 2 handset brand in Thailand & #1 voice content provider Invested over $ 50 mill in ATM & Power projects In Cambodia H.M. The King, bestowed upon Royal Gardua in 2005
Business Structure Listed in 1993 976 mill shares Market cap = USD 175 mill 70% 59% TECH RELATED BUSINESS 100% SAMART Inter Holding ICT Solutions & Services Mobile multimedia 600 mill shares 4,300 mill shares (par Bt. 0.10/share) Mkt cap = $ 136 mill Mkt cap = $ 220 mill 70% 100% 100% 60% Security solutions TV/Satellite antenna manuf Call Center Waste Mgt@ new airport Unlisted business valued at Book = Baht 1,164 mill or Baht 1.2/share (as of Sept 30, 2009) 100% Air Traffic Mgt 100% Power plant 23 MW
Revenue & NP Breakdown by Businesses 2006 2007 2008 2009 Q1-2010 Total Revenue 31,002 19,649 16,286 17,305 4,532 (in Baht million) Contribution by : SIM 79% 78% 70% 52% 50% SAMTEL 9% 11% 18% 36% 38% Other Biz 12% 11% 12% 12% 12% Increasing contribution from Samtel 2006 2007 2008 2009 Q1-2010 Total Profit 1,990 574 261 455 148 Contribution by : SIM 14% 33% 25% 15% 11% SAMTEL 12% 13% 29% 47% 44% Other Biz 0% 54% 46% 38% 45% Extra Gain* 74% 0% 0% 0% 0% * Disposal of assets 5
Key Investment Theme Samart I-Mobile (SIM) Samart Telcoms (SAMTEL) - SIM launched MVNO operations (on TOT s network) in Dec 2009 - Currently 70,000 subscribers (May 10) - Target 200,000 by end 2010 - As economy recovers, I-mobile handset sales in domestic and overseas markets to grow. - Opportunity to sell 3G handsets and content in Thailand - Project backlog of Baht 6,000 mill as of Dec 31, 2009 - Expect to sign new projects worth Baht 8,000 mill in 2010 - Exploring key mega projects such as - 3G network installation for TOT (Baht 18,000 mill) - Beneficiary of Government spending on ICT sector in 2010
Healthy Project Backlog Project Name & Value Status - Thai Mobile network installation (Baht 20,000 mill) Result awaited in Q3-10 - Dept of Land Baht. 4,000 bn., Phase II Expected to sign in 2010 - Village internet (Baht 2,500 million) In Process - Softswitch (Baht 1,000 million per year) In Process -Trunk Radio (Baht 700 million) In process - IP Core project (Baht 900 million) Signed in Feb 2009-1,000,000 broadband ports ( Baht 4,000 million) Signed Mar 2009 - Check inn system outsourcing at Suvarabhumi airport Signed Sep 2009 (Baht 2,100 million) 5 year contract - Department of Land ( Baht 800 mill Phase I) Signed in Nov 2009 - AAG submarine cable CAT Signed in Feb 2010 - Ministry of Interior (Baht 2,000 million) Waiting for results
Background 1950: Started as a radio repair shop in Saraburi Province,North of Bangkok 1985: Started large scale system integration projects 1992: Awarded first NMT cellular concession in the Kingdom of Cambodia 1993: SAMART was listed in Stock Exchange of Thailand 1995-96: SAMTEL was listed in Stock Exchange of Thailand 1996-97: Samart Enters Paging services & GSM 1800 services. (Divested later in 2000) Telekom Malaysia acquires 25% in Samart 2001: Samart wins 32 yr concession to build, own & operate Air Traffic Management Services in Cambodia 2003: Samart I-Mobile a handset and content distributor company was listed in Stock Exchange of Thailand 2005: Samart was awarded Royal Garuda by H.M. The King of Thailand for its services to Thai Society 2006: Samart enters utilities Sector. - Won 10 yr contract to supply 16 MWe to subsidiary of Siam Cement in Cambodia. - Won 10 yr waste management contract at Suvarnabhumi Airport Free Float 41% Shareholding Structure 19% Telekom Malaysia Vilailuck Group 40% Total Shares Outstanding: 976 mill
Samart Inter Holding (In kingdom of Cambodia) - Monopoly Concession to manage Nationwide Air Tarffic till year 2033 - Tariff collection from airlines (inbound & over flights) - THAI, Vietnam Airlines, British Airways, Qantas Bangkok Airways, Qatar Airlines, Singapore Airlines and Malaysian Airlines are top tier clients - High growth potential from air traffic movement (inbound and outbound) Flights Revenue ($ mill) - CATS increased its tariff by 15% since July 2008 60000 50000 40000 33000 37000 16.5 41400 18 50000 20 55000 23 25 20 15 - Samart is exploring ways to unlock its value in CATS Strategy: 30000 15 10 Explore similar investment opportunities in Indo-China region 20000 10000 5 0 2004(A) 2005 (A) 2006 (A) 2007 (A) 2008 0
Samart Inter Holding Kingdom of Cambodia - 16 MWe contracted capacity beginning 2008 till 2017 - Off taker is Kampot Cement (owned by Siam Cement, Thailand) - In operation since Jan 08 potential capacity expansion by off-taker - USD 6 mill/year in revenue guaranteed per year - Fuel is supplied by off taker Kampot Strategy: Explore opportunities in utilities sector in Kingdom of Cambodia
Samart i-mobile Public Company Limited 1993: Started as a handset & pager importer to complement Samart s GSM cellular & paging operations 1997: Received license to operate Audiotext services 2002: Launched Multimedia Content services under brand name BUG 2003: Listed in Stock Exchange of Thailand and raised Baht 1,210 mill (USD 30 mill) 2004: Launched first house brand handset I-mobile VDO phone. Sold 100,000 units in six months 2005: Expanded handset business to Malaysia, Cambodia. Attained 3 rd position (15% market share) in Thailand 2006: Telekom Malaysia acquired 24.4% stake in SIM from Samart and opened up opportunities in newer markets such as Indonesia, Bangladesh & India I-mobile became second brand in Thailand with market share of 22%. 2007: Market share in Thailand =28% 2008: Winner of Prime mister s award for Thai owned brand 2009: Launch MVNO operations for TOT under I-mobile 3GX brand Shareholding Structure Free Float Telekom Malaysia Samart Corp Total Shares: 4,300 mill
Key Strengths - # 2 Brand in Thailand & Strong Product Innovation - Regional Foot print Launch Key Features # Sold - Dec 2004 First VDO phone in Thailand 100,000 - Sept 2005 First MP3 phone in Thailand 150,000 - Mar 2006 First TV phone in Thailand 30,000 - Jun 2006 First 8 mill pixel camera phone 100,000 - Jan 2007 First inbuilt FM antenna speaker phone 250,000 - Jan 2007 First phone with walkie-talkie function 100,000-2008 Dual SIM with standby function 200,000-2008 Motion sensor function 150,000-2009 Android+TV phone 20,000-2009 Gaming phone - Market Leader in voice content market 80% of voice content market Thailand Malaysia Indonesia Lao Cambodia Philippines India Bangladesh Dubai Iran Bahrain 12
Leveraging Strengths Theme: Devices, applications, services based on Mobility concept delivering enriched lifestyle experience to the end users Device Applications i-music Ringtone Full Song i-clip Wallpaper VDO Clip i-movie Movie Detail Show Time i-horo Gypsy Birthday Etc. i-sport Football, etc. Match/Result i-promotion Discount Rewards Privileges i-game Adventure,etc Multiplayer i-news Local International i-lotto Result Analysis i-food Hit Restaurant Search i-trip Hit Hotel Weather i-application Stock watch Biz info Total 40 i-mobile handset models to be launched in 2010 Upgraded versions of applications thru i-link 13
Business Structure Samart i-mobile i PLC Mobile Business Distribute i-mobile and other branded mobile handsets through Traditional Trade: Key dealer, SMD, Franchise Modern Trade: i-mobile shop and hyper market Provide Voice & Non Voice information / content through multi service channels / devices Multimedia Business Provide easy to access to content through i-link service International Business Export Successful SIM Business Model Malaysia Indonesia Vietnam, Laos, Cambodia Bangladesh India M-East International wap.bug2mobile.com 14
Product Strategy HD Phone Gaming Phone Android+TV 3G+Dual SIM+TV HD Video Streaming HD Video Playback HD Video Recorder HD Camera HD Analog TV Supports. Nintendo NES/SNES Gameboy Advanced Content friendly OS Live Streaming 3G, Dual sim 2.8 Seiko, QVGA Touch Panel Motion Sensor TV. PAL/NTSC/SECAM HF/UHF Video Call, MP3 MP4 Player 5MP Camera with LED light Java : MSN, Facebook, Opera mini, Push mail
Handset Sales & Margins Total Handsets Sales & Gross Margins Handset sales: Domestic vs Inter 4,100,000 4,000,000 3,900,000 3,800,000 3,700,000 3,600,000 3,500,000 3,400,000 3,300,000 14.00% 4,023,253 4,038,191 4,000,000 13.96% 12.80% 11.97% 3,546,517 2007 2008 2009 2010 (Est) 14.50% 14.00% 13.50% 13.00% 12.50% 12.00% 11.50% 11.00% 10.50% 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Inter 800,000 1,167,761 1,258,130 518,613 Domestic 3,200,000 3,027,904 2,855,492 2,780,011 2007 2008 2009 2010 (Est) - Margin trend is likely to be sustained in the neighborhood of 14% in 2010 - Margin enhancement in 2010 is due to availability of 3G and other feature enhancing handsets 16
Distribution Channels: 2010 2009: A total of 591 channels in domestic market (including 83 own shops) 283 distribution points in hyper market A total of 29 distributors in the international markets Company expect to increase its distribution channels by 3%-5% in 2010 17
Content Business: Unique positioning Voice BUG1900 Premium Phone Service 1900-1900-XX Tariff: 6-9 bt/min BUG1113 24/7 live directory services Tariff: 7 bt/min Non-Voice BUG2Mobile ShowDed Community Blog i-sport App Solution Subscription based applications New Business EDT Horoscope Portal International Exporting application platform to the region 18
Content Business Model We bundle content in every single handset sold thru us, thus enabling higher content usage High margin business! (GM >33%) We are a neutral content provider (access by 50 mill mobile & 10 mill fixed line users) Act as an content aggregator (work with over 100+ content/media providers) Content is accessible by all fixed line and mobile subscribers - Revenue sharing with operators - up to 50% for voice revenue - up to 20% for non-voice contents 50% content is in-house, 50% outsourced Biggest in sport content provider in Thailand 19
Content Business: Voice Business Main Revenue Stream Horoscope Sport Information Bug 1900 categories Voting & TVC Service 3% Sport 36% Information 11% Chat 7% Consultancy 1% Download 15% Entertainme t 4% Horoscope 10% Game 13% Main Revenue Stream Recurring Revenue fixed line operators Mobile operators TTT 20% Other 5% TRUE 23% O O t r h 3% a 1 n 4 % A +D e I P r S 5 C % 5 g e Directory Alert & Subscription TOT 52% D T A 2 C 8 % 20
Content Biz : 2010 Direction Voice Focus on SMS Sub (Recurring Revenue) + 3G Feature Non Voice Focus on SMS Sub (Recurring Revenue) New Revenue Stream 2G + 3G Feature CAT CDMA 3G Migration from wap to www Establish EDT & Horoworld Broadband
Strategic Direction CP CP VAS Operator with full integrated services (device, VAS,platform,app, content) CP CP CP CP MVNO CP
I-Link : Easy Access to Content High-end phone Low-end phone
Wide Range of Applications Push SNS Video Chat Mike: hi there! Riz: how r u? EDT Guide Full screen Video Chat Support sending Large-size files Find the restaurant Review the restaurant by Video On Demand How to go there? Post your review by Video On Demand Android+ Windows
MVNO: Business Model Network Provider 3G Mobile HSPA Network Network fees Telephone no. - Own handsets - Own distribution - Own content Samart i-mobile VAS Platform Service Provider Target 200,000 users in 2010
Handset Roadmap Launch over 20 models of 2G and 3G products in Q2,10 to drive market volume across all channel Q1, Y10 Q2, Y10 3G U 3500 HSDPA 7.2 Mbps, EDGE / GPRS IE 5512 HalfQWERTY Touch HSDPA 3.6Mbps, 3 MP+VGA, ViDOCall MSN, Facebook SMS / Phonebook IE 5520 IE 8500 Android, HSDPA, WiFi 5 MP MSN, Facebook i 810 Android, 7.2HSUPA HSDPA 3.6Mbps, TV TV, 8 MP 2 MP, MSN, Facebook i 858 Android, HSDPA, WiFi, TV, 5 MP, GPS 4.3 Hitz3201 DualSIM, VGA, TV GM 5220 Game IM 5230 QWERTY S 524 S 528 S531 S656 S381 DualSIM Trackpad 2G Hitz2206 DualSIM S314 S321 S326 S382 S383 Trackpad Trackpad CIF Cam Hitz 2211 Hitz 1011 CIF Cam MP3, FM, Hitz 2207 Hitz 2210 Hitz 2200 Hitz 107 Hitz 1012 Hitz1200 Hitz 1015 S690 Hitz226 Hitz2212 Hitz300 Hitz206 Hitz208 Hitz213 Hitz325 Hitz225 S350 Touch, TV DualSIM
Revenue/NP/Dividend history (all figures in baht million, except for dividend)) 18,000 Revenues 16,000 Revenue breakdown by segment 16,000 15,434 14,000 662 14,000 12,000 11,398 12,000 10,000 5,300 730 Content International Domestic 10,000 8,000 9,039 8,000 3,183 800 1,661 6,000 6,000 4,000 2,000 2,272 4,000 2,000 8,857 6,753 6,293 230 420 0 350 2007 2008 2009 Q1-2010 321 0 1,569 2007 2008 2009 Q1-2010 300 Net Profit Dividend & Payout Ratio 250 0.07 180% 200 150 100 50 114 115 27 0.06 0.05 0.04 0.03 0.02 0.01 0.062 0.062 83% 55% 169% 0.045 75% 0.02 160% 140% 120% 100% 80% 60% 40% 20% 0 2007 2008 2009 Q1-2010 0 2006 2007 2008 2009 0% 27
Samart Telcoms Public Company Limited 1995: Received VSAT concession from PTD Listed on Stock Exchange of Thailand 1996: 10 yr. Contract to implement rural telephone project in Thailand Shareholding Structure Free Float 25% 1997: Started POSEFT network 2006: Acquired system integration business from Samart Corp 2007: Won 5 yr school net project from MOE 2008: Revenue was highest since its inception 5% Bangkok Bank 70% 2009: Company wins several projects and project backlog is Baht 8,000 mill (year to date) Samart Corp Total Shares: 600 mill
Samart Telcoms: Existing Businesses Know how in VSAT network & applications: - Rural Telephony network in 4,000 villages (1996-2006) - School net network in 10,600 schools (ongoing) - Soft switch installation for TOT - Satellite/High speed network for Govt. agencies No 1. in Satellite application market POS/EFT market: - Credit card readers, Payment gateway - Fleet solutions - Services to Banks, retailers No 1. in by market Share (terminals sold) Leading SI in ICT field: - New Bangkok International Airport - Government ministries and agencies ( MOI/MOJ/MOD) Top 3 SI in Thailand (Govt projects) IT outsourcing: - Automatic Meter Reading (PEA) - Check inn system at BKK & HKT airports (AOT)
SAMTEL Business Structure Network Services System Integration E-Business IT Outsourcing Providing network services & applications Conventional/ IP Satellite Lease Line/DSL Networking Next Generation Network Broadcasting/ Business TV Video Conference,etc. Providing turnkey IT & security solutions for private / government sector Government (Ministry of Industry, Ministry of Justice, Ministry of Defense) State Enterprise Airport (NBIA) Providing specific business process application & services for business effectiveness Payment Solutions e Learning e Logistics Providing full operational services in specific industries (build and operate business) Business Solutions - Provincial Electricity Authority ERP projects ICT Maintenance services - NBIA - Other projects - Long-term projects min 5yrs tenure (monthly revenue) - Gross margins of over 25% - Funded by project finance - Turnkey projects - Budgetary allocation every year - Gross margins of over 18-20% - Funded working capital - Largest e learning system in Thailand 5 universities - Automatic meter reading system for PEA - Installation & maintenance - Check in system at BKK & HKT airport
Revenue Breakdown: Govt. Clients Dominate Corporate, 13% 2008 2009 Corporate, 7% Government, 87% E-Business, 2% Government, 93% IP Business, 12% IT Outsourcing, 16% E-Business, 5% Netw ork Service, 42% System Integration, 13% IP Business, 2% IT Outsourcing, 3% System Integration, 25% Netw ork Service, 80%
Network Services Project concept Check budget availability Key Characteristics: -The entire process takes approximately 12 months - Flexibility to carry out closed bid - Recurring revenue (service income) stream - Lower risk as contracts are guaranteed by Government bodies - Upside potential by expanding service scope and or project tenure Presentation to entry level staff Project economics/ feasibility Ongoing & Completed projects: - Rural Telephony network in 4,000 villages (1996-06, Baht 8,640 million) - School net network in 10,600 schools (2006-11, Baht 2,580 million) - Soft switch installation for TOT (Baht 1,000 million/yr) e auction Contract signing Rollout
System Integration Project concept Inputs for TOR E Auction Contract Signing Implementation Key Characteristics: -The entire process takes anywhere between 3-12 months involving issuance of TOR and e auction - Typical project value that company bid is from Bt. 70 mill to Bt. 1,000 mill - Build & Transfer projects (turnkey) - Upside from maintenance contracts - Yearly budget allocation from State agencies (the budget size is appox Baht 70 billion per year on IT/Networking) Potential projects: - Mostly from following ministries: - Ministry of Interior - Ministry of Defense - Ministry of Justice - Ministry of Labor - Supreme Commander HQ Final acceptance
System Integration Key Project Highlights (Completed & Ongoing) Suvarnabhumi Airport Design & Installation of Airport Information Management System (AIMS) in Consortium with Siemens, ABB, & Satyam (Project Value Baht 2,399 mill) Suvarnabhumi Airport Common User Terminal Equipment System (CUTE) (Project Value THB 1,000 mill) Ministry of Interior Information Super High Way Linking all provincial offices in Thailand (Baht 1,000 mill) ITV Mobile TV Broadcasting Station Ministry of Defense Communication network System (Baht 799 mill) To be completed by 2009 Department of Industrial Works Computer network systems for supporting services
IT Outsourcing Project design Budget allocation Key Characteristics: - Built, Own & Operate, or could be one time deployment - Project value range from Baht 350 million to Baht 4,000 million - Yearly budget allocation from State agencies (the budget size is appox Baht 70 billion per year on IT/Networking) E Auction Contract Signing Ongoing and Completed Projects: - Automatic meter reading (Completed 2008-9, Baht 889 million) - Phuket International Airport Check in system (2008-12, ongoing) - Bangkok International Airport Check in system (2009-13, ongoing) Implementation Potential Projects: (likely to be concluded in 2010) - Automatic meter reading phase II (Baht 600 million) - Prepaid electricity meter (Baht 1,000 million)
Project Summary 2010 Unit: Million Baht Project Backlog Summary Project Back Log Est. Revenue Recognition in 2010 Est Backlog Value End of 2009 End of 2010 Project Signed prior to 2010 12,211 5,261 2,865 2,396 Project Signed in Q1, 2010 1,586-1,476 110 Project Signed in Q2, 2010 238-228 10 Total Signed Projects 14,035 5,261 4,570 2,515 Expected signing Q2, 2010 1,275-887 389 Expected signing Q3-Q4, 2010 4,591-2,238 2,354 Total Expected Signing 5,866-3,124 2,742 Estimated major projects 19,901 5,261 7,694 5,257 Miscelleneous Projects 811 811 - Total Projects 20,712 5,261 8,505 5,257 Highlight Q1-10 Revenue increase 50%, Net Profit increase >300% (Y-O-Y) New Sign for Q1-10 > 1,500 MB Highlight Q2-10 Project signed in 2010 to date > 1,800 MB Waiting to sign > 1,200 MB Highlight Q3&Q4-10 Number of projects on the list worth > 4,500 MB Y2010 is expected to break record to 8,000 MB in revenue
Project Value in 2010 Project Back Log Est. Project Value Sign in 2010 Recognition Backlog Customer Value End of 2009 in 2010 End of 2010 Total 13,022 5,261 8,502 8,505 5,257 Key 2010 project signed to date : 1,800 MB Q1 TOT: Multi Chasiss (272 MB), DWDM Regional Network (164 MB) Super Core Phase II (195 MB) CAT: AAG (595 MB) MOI: Telephone Improvement (197 MB) Q2 TOT: DWDM Platinum (195 MB) Key customers : TOT, CAT, AOT, PEA, MEA, MOI
Revenue/NP/Dividend history (all figures in baht million, except for dividend)) 7,000 Revenues Revenue breakdown by segment 6,216 100% 6,000 90% 1,348 443 5,000 80% 70% 1,186 1,156 4,000 3,000 2,000 2,177 2,900 1,732 60% 50% 40% 30% 20% 991 1,710 4,844 1,265 Service Revenue Product Revenue 1,000 10% 0% 0 2007 2008 2009 Q1-2010 2007 2008 2009 Q1-2010 350 Net Profit Dividend & Payout Ratio 300 302 0.35 58% 60% 250 200 150 100 112 111 91 0.3 0.25 0.2 0.15 0.32 55% 55% 0.25 51% 58% 56% 54% 52% 50 0 2007 2008 2009 Q1-2010 0.1 0.05 0 0.1 0.1 2006 2007 2008 2009 50% 48% 46%
Samart Corporation PCL Consolidated Financial Performance
Consolidated Financials (all figures in baht million, except for dividend)) 25,000 19,649 Revenues Revenue breakdown by segment 20,000 15,000 16,286 17,305 100% 90% 80% 70% 2,098 1,901 2,092 546 2,117 2,835 6,193 1,707 10,000 5,000 4,532 60% 50% 40% 30% 15,434 11,119 8,754 2,203 Related Business ICT Solutions (Samtel) Mobile Multimedia (SIM) 20% 0 2007 2008 2009 Q1-2010 10% 0% 2007 2008 2009 Q1-2010 700 Net Profit Dividend Payout 600 500 400 300 200 100 0 574 455 261 148 2007 2008 2009 Q1-2010 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 74% 0.42 61% 53% 0.36 0.25 20% 0.2 2006 2007 2008 2009 80% 70% 60% 50% 40% 30% 20% 10% 0%
Consolidated EBITDA (all figures in baht million) 4500 4000 4019 3500 3000 2545 2500 2000 2183 2071 1748 1958 1500 1000 568 500 0 2004 2005 2006 2007 2008 2009 Q1-2010 - EBITDA figures in 2004-2005 included GSM operations in Cambodia - EBITDA figure in 2006 included gain on disposal of GSM Cambodia & SIM to Axiata
Revenue Target: 2010 30% top line growth in 2010 8,000 mill ICT Solutions 1,700 mill Related 1,000 mill Inter Holding 22,700 MB 12,000 mill Mobile Multimedia