TELEKOM MALAYSIA BERHAD · 2017-04-28 · This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed

TELEKOM MALAYSIA BERHADCONNECT COMMUNICATE COLLABORATE

Non-deal RoadshowLondon, Paris and Frankfurt

24-27th March 2015

This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any

securities and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract

or commitment or investment decision.

This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are

deemed to have agreed and confirmed to Telekom Malaysia Berhad (the “Company”) that: (a) you agree not to trade in any securities of

the Company or its respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain

absolute confidentiality regarding the information disclosed in this presentation until the public disclosure of such information, or unless

you have been otherwise notified by the Company.

Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation

does not take into consideration the investment objectives, financial situation or particular needs of any particular investor.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information,

opinions and conclusions contained in this presentation. None of the Company and its affiliates and related bodies corporate, and their

respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or

negligence) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it.

This presentation contains projections and “forward-looking statements” relating to the Company’s business and the sectors in which the

Company operates. These forward-looking statements include statements relating to the Company’s performance. These statements

reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It

is important to note that actual results could differ materially from those anticipated in these forward looking statements. The Company

does not undertake to inform you of any matters or information which may come to light or be brought to the Company’s attention after

the date hereof.

The forecasts and other forward-looking statements set out in this presentation are based on a number of estimates and assumptions

that are subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which

are subject to change and in many cases outside the control of the Company. The directors and officers of the Company believe that

they have prepared the forecasts with due care and attention and consider all best estimates and assumptions when taken as a whole to

be reasonable at the time of preparing the presentation. However, the Company’s forecasts presented in this presentation may vary from

actual financial results, and these variations may be material and, accordingly, neither the Company nor its directors or officers can give

any assurance that the forecast performance in the forecasts or any forward-looking statement contained in this presentation will be

achieved. Details of the forecasts and the assumptions on which they are based are set out in the presentation.

This presentation may not be copied or otherwise reproduced without the written consent of the Company.

Disclaimer

2

2

3

•About TM

4

•Group Results : 3- Year Performance

1 •Country & Industry Overview

5

•High Speed Broadband Update

•Convergence

6 •2015 Outlook and Business Priorities

3

4

Country & Industry Overview as at 4Q2014

Tota

l Ho

use

ho

lds

in

Mal

aysi

a

7.03 million

Age

De

mo

grap

hic

<20 years old = 35%

20-39 years old = 35%

40-59 years old = 21%

>60 years old = 9%

Bro

adb

and

p

en

etra

tio

n r

ate

in

Mal

aysi

a

70.2% Ce

llula

r p

en

etra

tio

n

rate

in M

alay

sia

148.5%

Country & Industry Overview as at 3Q20141

Voice Revenue

20% market share

Market share: RM4.05bn

Broadband Revenue

28%market share

Market size: RM2.56bn

Data Revenue2

71% market share

Market size: RM1.06bn

Fixed Line

95%physical market share

Market size: 3.69mn

Fixed Broadband

92% physical market share

Market size: 2.4mn

1 Official 4Q2014 data unavailable at the time of publication2 Data as at 2H2013

Source: MCMC, DOS, Company Financial Results; Group Regulatory & BMI Team Analysis

Cap

ital

Str

uct

ure

CREDIT RATING

TOTAL RETURN TO SHAREHOLDERS

• Authorised Capital: RM3,528,003,015.00• Issued and Paid-up Capital: RM2,603,561,225.30• Date of Incorporation: 12 October 1984• Date of Listing: 7 November 1990

79.70%FBMKLCI1

398.32%TM1

53.18%AXIATA2

101.60%MAXIS3

303.64%DIGI1

• A3Moody’s

• A-S&P

• A-Fitch

• AAARAM

SHARE PRICE PERFORMANCE

• 20 March 2015: RM7.01

• 22 April 2008: RM3.05

TM Share Price

• TM Share Price: +2.0%

• FBMKLCI: +2.4%

YTD Growth

Source: Bloomberg1 For the period 22 April 2008 – 20 March 20152 For the period 25 April 2008 – 20 March 20153 For the period 18 November 2009 – 20 March 2015

Khazanah29%

EPF14%

Amanah Raya14%

Foreign 15%

Free Float28%

Khazanah

EPF

Amanah Raya

Foreign

Free Float

* As at 27 February 2015Note: EPF stands for Employees Provident Fund BoardSource: TM Website (www.tm.com.my)

TM Shareholders*

5

About TM

6

1946 1964 1987 1990 2005 2008Establishment of Malayan Telecommunication Department

Jabatan Talikom Malaysia

Corporatisation of Syarikat Telekom Malaysia Berhad

Listing of Telekom Malaysia

Re-branding of TM

Demerger of fixed and mobile

1st Reinvention of TM

1st Technology Inflection point –from analog to digital

2nd Reinvention of TM

2nd Technology Inflection point –from legacy digital to IP-based

HSBB Project

Malaysia’s leading ISP with >2.2 million

broadband customers

Malaysia’s broadband champion and leading integrated information

and communication company with over 60

years of experience

Malaysia’s premier BPO provider

Malaysia’s largest fixed data provider with >50%

market share

Enhanced global capacity

7

Group Results: 3-Year Performance

1,1871,372 1,2941,150

1,359 1,387

FY2012 FY2013 FY2014

EBIT Normalised EBIT

9,994

10,629

11,235

FY2012 FY2013 FY2014

Revenue

3,233

3,532 3,636

3,196 3,159

3,725

FY2012 FY2013 FY2014

EBITDA Normalised EBITDA

1,264

1,012832881

1,039941

FY2012 FY2013 FY2014

PATAMI Normalised PATAMI

31.8%

31.6%

32.9%

32.7%

31.9%

32.8%

EBITDA Margin Normalised EBITDA Margin

Revenue EBIT

EBITDA PATAMI

RM mn RM mn

RM mn RM mn

+6.4% +5.7%+15.6% (Normalised +18.2%) -5.7% (Normalised +2.0%)

+9.2% (Normalised +10.1%) +2.9% (Normalised +5.9%)

-19.9% (Normalised +17.9%) -17.8% (Normalised -9.4%)

8

Total Revenue by Product: 3-Year Performance

Internet

+12.8% +11.9%

2,372 2,676 2,995

F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4

Data

+13.9% +3.7%

2,2052,512 2,606

F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4

Voice

-2.4% -4.1%

3,706 3,618 3,469

F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4

Voice37%

Data 22%

Internet 24%

Others17%

Voice

Data

Internet

Others

Voice34%

Data 24%

Internet 25%

Others17%

Voice

Data

Internet

Others

Voice31%

Data 23%

Internet 27%

Others19% Voice

Data

Internet

Others

FY2012 FY2013 FY2014

1,711 1,8232,165

F Y 2 0 1 2 F Y 2 0 1 3 F Y 2 0 1 4

Others*

+18.8%+6.5%

RM mn RM mn RM mn RM mn

Non-voice Revenue now >69% of Group Revenue

*”Others” comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages

9

Capex & Opex: 3-Year Performance

338 269 330

278

129

285

276

299

339

FY2012 FY2013 FY2014

Access Core Network Support System*

Business As Usual (BAU) Capex

HSBB Capex**

781479 364

645

516377

228

171

141

FY2012 FY2013 FY2014


954892

697

882

1,654

1,166

8.9 6.6 8.5

16.6 11.0 7.9

BAU Capex / Revenue

Note: **gross CAPEX HSBB Capex / Revenue

*Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)

Cost % of Revenue1

20.1 20.1 20.5

17.0 17.2 16.5

19.9 21.0 21.0

11.6 10.9 11.0

8.5 7.1 7.4

6.3 6.4 6.9

4.2 3.7 3.20.6 0.8 2.0

FY2012 FY2013 FY2014

Bad Debt

Marketing Expenses

Supplies & Materials

Maintenance Cost

Other Operating Cost

Manpower Cost

Direct Cost

Dep & Amortisation

RM8,972.0 RM9,378.3 RM10,095.1

88.6%87.2%88.3%

RM mn

RM mn

Total Cost / Revenue ( %)

1 Revenue = Operating Revenue + Other Operating Income

Note: The classification of cost is as per financial reporting

10

Group Physical Highlights : 3-Year Performance

Broadband

1,583 1,580 1,502

483 635 729

FY2012 FY2013 FY2014

Streamyx UniFi

DEL

3,876 3,738 3,527

483 635 729

FY2012 FY2013 FY2014

DEL UniFi

UniFi

406530

604

77

105

125

FY2012 FY2013 FY2014

UniFi Residential UniFi Business

In thousand

In thousand

In thousand

+7.2%

2,2312,066 2,215

+0.7%

+0.3%

4,2564,359 4,373

-2.7%

729

483

635

+31.6% +14.8%

11

High Speed Broadband Update

Delivered >1.624mn ports covering 106 exchanges

Activated more than 750,000 customers translating to 46% take-up

>1mn or 48% of customers on high speed broadband (4Mbps and above)

121 IPTV Channels

Wide range of HyppTV packages for home, business, hospitality and multi-devices

Announced HSBB Phase 2 & Sub Urban Broadband (SUBB) projects in February 2015

#1 Fixed Line

WiFi # 1 Fixed Broadband

Mobile Data IPTV

Acquisition of P1 accelerates TM’s aspiration to be

No.1 Converged Communications

Services Provider

Combined base:

~2,000 sites

Valuable spectrum assets

Extensive Fibre network

Extensive customer base: ~ 4mn fixed line of which ~ 2mn are broadband; and ~ 500k wireless customers

12

Convergence

12

13

To realise our

INFORMATION &

INNOVATION

EXCHANGE

aspiration

TM

Direct

IPVPN

MetroE

and expand our

services BEYOND

CONNECTIVITY

OFFICE | NOMADIC | HOME | BEYOND…

Shop In A Box™

• Rollout of HSBB 2, Sub-Urban Broadband• Investments for future growth

CONVERGENCE CHAMPION delivering

INFORMATION & INNOVATION EXCHANGE

2015 Outlook and Business Priorities

14

THANK YOU

Investor RelationsLevel 11 (South Wing), Menara TMJalan Pantai Baharu50672 Kuala LumpurMalaysiaTel: (603) 2240 4848/ 7366 / [email protected]

15

Appendix

16 16

17

2015 2017

Revenue Growth

EBIT Growth

Customer Satisfaction Measure1

4-4.5% 5-5.5%

4-4.5 % 5-5.5%

72 72

*Note: Headline KPI are for TM excluding P1, HSBB 2, SUBB & other mega projects

1 Using TRiM index measuring end to end customer experience at all touch points. TRiM (Measuring, Managing and Monitoring) is a standardized indicator system. It analyzes, measures and portrays stakeholder relationships on the basis of standardized indicators. The TRI*M Index is an indicator of the status quo of a particular relationship. The index is made up of four points of view on the stakeholder relationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and a company's competitive advantage. The information is based on surveys/interviews on a sample customer base.”

Headline KPI

Telekom Malaysia Berhad ("the Company" or "TM") issues a statement to reiterate its stand on the Company's dividend policy. The

Company’s dividend policy as announced at the time of the demerger between TM and TM International Berhad (TMI) remains

valid. The policy states as follows:

“In determining the dividend payout ratio in respect of any financial year after the Proposed Demerger, our Company intends to

adopt a progressive dividend policy which enables us to provide stable and sustainable dividends to our shareholders while

maintaining an efficient capital structure and ensuring sufficiency of funding for future growth.

Upon completion of the Proposed Demerger, our Company intends to distribute yearly dividends of RM700 million or up to 90% of

our normalised PATAMI, whichever is higher.

Dividends will be paid only if approved by our Board out of funds available for such distribution. The actual amount and timing of

dividend payments will depend upon our level of cash and retained earnings, results of operations, business prospects,

monetization of non-core assets, projected levels of capital expenditure and other investment plans, current and expected

obligations and such other matters as our Board may deem relevant.”

This policy remains unchanged for 2009 and beyond. The Company is currently able to meet this dividend policy, because:

• The Company has sufficient consolidated cash and bank balances of RM1.144 billion as at 30 September 2008, and it is

confident that TMI is able to meet its obligation due to TM of RM4.025 billion by April 2009.

• In the event of a downturn in performance due to unforeseen circumstances, the Company wishes to state that its recurring cash

generation ability is sufficient to meet its current dividend policy.

• TM’s retained earnings is also sufficient to support this current dividend policy in the event of unforeseen shortfalls in normalised

PATAMI.

Given the unprecedented volatility in global markets, the Company will continue to examine the likely impact on its business,

cashflow generation, capital structure and methods in which excess cash beyond the dividend policy and prudent level of cash

required for operations, can be efficiently distributed to our shareholders.

Moving forward, TM is focused on building a strong foundation for its future growth and operational excellence.

TELEKOM MALAYSIA BERHAD (Bursa Malaysia Announcement Reference No TM-081113-37325)

Date Announced :13/11/2008 18

Reiteration of Dividend Policy

19

Shareholder Returns (2010-2014)

2020

2,980 2,636 3,157

10,629 11,235

4 Q 1 3 3 Q 1 4 4 Q 1 4 F Y 1 3 F Y 1 4

Revenue

380 306443

1,359 1,387

4 Q 1 3 3 Q 1 4 4 Q 1 4 F Y 1 3 F Y 1 4

Normalised EBIT

Key FY2014 Highlights

Revenue grew 5.7% vs FY2013

Driven by Internet, Data & Others which grew 11.9% , 3.7%

and 18.8% respectively

Normalised EBIT higher by 2.0% vs FY2013

Higher operating revenue

Normalised PATAMI was 9.4% lower vs FY2013 due to higher

tax expense from the absence of HSBB tax incentive (FY2013:

RM163mn)

+6.0%

+19.8%

+5.7%

290 192350

1,039 941

4 Q 1 3 3 Q 1 4 4 Q 1 4 F Y 1 3 F Y 1 4

Normalised PATAMI

+16.6%

+44.9%

+2.0%

+20.9%

+82.8%

-9.4%

218189344

1,012 832

RM mn

RM mn

RM mn

Reported PATAMI

21

Group Total Revenue by Product

911812

889

3,6183,469

4Q13 3Q14 4Q14 FY13 FY14

Voice

709 714

828

2,676

2,995

4Q13 3Q14 4Q14 FY13 FY14

Internet

687

586

771

2,512 2,606

4Q13 3Q14 4Q14 FY13 FY14

Data

673

524

670

1,823

2,165

4Q13 3Q14 4Q14 FY13 FY14

Others*

Voice31%

Data 23%

Internet 27%

Others19%

Voice34%

Data 24%

Internet 25%

Others17%

RM10,629mn

FY2014

FY2013

-2.5%

+9.4%

-4.1%

+16.8%

+16.0%

+11.9%

+12.2%

+31.6%

+3.7%-0.4%

+27.7%

+18.8%

RM11,235mn

*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)

Note : Unless stated otherwise all figures stated shall be inclusive of P1

RM mn RM mn

RM mn RM mn

2,2082,051

2,240

7,9658,411

4Q13 3Q14 4Q14 FY13 FY14

+9.3%

22

Group Total Revenue by Lines of Business

Retail Global & Wholesale Others*


478

361

577

1,706 1,776

4Q13 3Q14 4Q14 FY13 FY14

294

224

339

9581,048

4Q13 3Q14 4Q14 FY13 FY14

Retail75%

Global & Wholesale

16%

Others9%

FY2014

Retail75%

Global & Wholesale

16%

Others9%

RM10,629mn

FY2013

RM11,235mn

+1.5%

+5.6%

+20.7%

+60.0%

+4.1%+15.6%

+51.2%

+9.4%

Retail (C+S+E+G): 75% Retail (C+S+E+G): 75%

* Others comprise revenue from VADS, Property Development, TM R&D, TMIM, UTSB, MKL & P1

RM mn RM mn RM mn

23

FY2014 Highlights: CAPEX & OPEX

Total Capex

748 694

645 662

470 480

FY13 FY14


RM mn

20.1 20.5

17.2 16.5

21.0 21.0

10.9 11.0

7.1 7.4

6.4 6.9

3.7 3.20.8 2.0

FY13 FY14

Bad debt

Marketing expenses

Supplies & material

Maintenance cost

Other operating cost

Manpower cost

Direct cost

Dep & Amortisation

Total Cost / Revenue ( %)

Cost % of Revenue1

1 Revenue = Operating Revenue + Other Operating Income

Note: The classification of cost is as per financial reporting

87.2% 88.6%

RM9,378.3 RM10,095.1

RM mn

1,863 1,836

17.5% 16.3%

269 330

129

286299

338

FY13 FY14


BAU Capex

479 364

516

377

171

141

FY13 FY14


HSBB Capex

697

954 1,166

882

6.6% 8.5% 11.0% 7.9%

Capex / Revenue (%)

Capex / Revenue (%) Capex / Revenue (%)


% of Revenue

RM mn RM mn

7,136.7

162.6

8,076.7

4,865.0

1,151.0

1,999.5

51.4

9.8

15,376.0

5,722.2

1,847.7

440.9

2,514.9

918.7

5,770.5

3,172.8

1,590.2

1,007.5

(48.3)

14,572.0

852.3

15,376.0

7,571.1

388.8

9,806.1

6,251.4

1,258.0

1,823.1

337.8

135.8

17,766.0

6,481.2

2,237.2

588.1

2,985.8

670.1

4,857.2

3,605.2

197.0

1,055.0

1,624.0

14,785.1

1,356.9

17,766.0

Shareholders’ Funds

Non-Controlling Interests

Deferred & Long Term Liabilities

Long Term Borrowings

Deferred Tax

Deferred Income

Derivative financial instruments**

Trade and other payables

Current Assets

Trade Receivables

Other Receivables

Cash & Bank Balances

Others

Current Liabilities

Trade and Other Payables

Short Term Borrowings

Others

Net Current Assets/(Liabilities)*

Property Plant & Equipment

Other Non-Current Assets

RM Million

*Due to reclassification of long term debt due within the next 12 months to current liability (RM1.5bn)** Includes the put option obligation (RM267.6m) to buy Non Controlling Interest shares


FY2014 Highlights: Group Balance Sheet

As at 31 Dec 2014 As at 31 Dec 2013

24

31 Dec 14 31 Dec 13 31 Dec 14 31 Dec 13Return on Invested Capital 7.72% 7.68% Gross Debt to EBITDA 1.77 1.92

Return on Equity 12.80% 14.80% Net Debt/EBITDA 1.02 1.04

Return on Assets 6.34% 6.27% Gross Debt/ Equity 0.85 0.90

Current Ratio 1.33 0.99 Net Debt/ Equity 0.46 0.55

WACC 7.54% 6.67% Net Assets/Share (sen) 203.6 199.5

31 Dec 1431 Dec 13

1

Based on Normalised PATAMI2

1

31 Dec 1331 Dec 14

2

Based on Normalised EBIT1


FY2014 Highlights: Debt Profile & Key Financial Ratios

25

26

Physical Highlights

Broadband

1,292 1,292 1,296 1,246 1,242

288 284 282 267 260

635 653 673 700 729

4Q13 1Q14 2Q14 3Q14 4Q14

Streamyx Residential Streamyx Business UniFi

UniFi

530 544 559 580 604

105 109 114 120 125

4Q13 1Q14 2Q14 3Q14 4Q14

UniFi Residential UniFi Business

+0.7%

+0.8%

2,215 2,230 2,251 2,213 2,231

In thousand

+15 +21 -38 +18

635 653 673 700 729

+14.8%

+4.1%

+20 +27+18

+29

Net adds (in thousand)

Net adds (in thousand)

In thousand

Broadband growth in FY2014 was driven by UniFi

48% of total broadband customers are on speeds of 4Mbps & above

UniFi grew 14.8% YoY in 2014, translating to 45% take-up rate

Steady growth throughout 2014 mainly due to aggressive upselling activities

HyppTV now consists 121 channels

27

Physical Highlights

DEL

ARPU

2,296 2,262 2,239 2,181 2,154

1,442 1,423 1,409 1,386 1,373

635 653 673 700 729

4Q13 1Q14 2Q14 3Q14 4Q14

Fixed Line Residential Fixed Line Business UniFi

-2.7%

-0.3%

4,373 4,338 4,321 4,267 4,256

In thousand

ARPU (RM) 4Q13 1Q14 2Q14 3Q14 4Q14

Fixed Line (DEL)* 33 30 31 30 31

StreamyxBroadband**

85 86 85 81 90

UniFi*** 185 188 187 189 192

*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU

Higher ARPU across all segments

Reducing rate of decline

Dual- and triple-play broadband packages

Areas are indicative and not to scale

KUALA TERENGGANU

©

©

©

©

©

©

©

©

KANGAR

ALOR STAR

IPOH

SHAH ALAM

MELAKA

KUANTAN

KOTA BHARU

KUALA LUMPUR

©

Klang

Valley

◘

◘

◘

◘

◘

◘◘

◘

◘

◘◘

◘

◘

◘

◘

©

◘◘◘◘

◘

◘

◘

◘

◘

◘◘

◘

◘

◘

◘

◘

©

©KOTA KINABALU

KUCHING

◘

◘

◘

◘

©◘

◘◘

◘

◘

Less populated areas

Zone 2 – BBGP

Zone 1 – HSBB

LEGEND

High economic impact areas

Urban/Semi-urban and rural

Industrial parks/FTZs

covered

SEREMBAN

JOHOR BAHRU

Northern

Corridor

Economic

Region

Iskandar

Malaysia

GEORGETOWN

Zone 3

Zone 3

Zone 3 – USP

HSBB deployment areas

28

Any queries please email to : Rohaila Mohamed Basir

Investor RelationsTelekom Malaysia Berhad

[email protected]

•Investor Relations• Level 11 (South Wing)• Menara TM•Jln Pantai Baharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388

29

Documents

TELEKOM MALAYSIA BERHAD · 2017-04-28 · This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed