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TELEKOM MALAYSIA BERHAD
INVEST MALAYSIA 2016 KUALA LUMPUR12-13th April 2016
Disclaimer
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.
About TM
Group Results: 3-Year Performance
HSBB2, SUBB and P1 Update
Convergence: 2016 Outlook and Business Priorities
TM TODAY…
No.180%
Market share
2.34million
broadband provider in Malaysia
broadband customers
Malaysia’s largest fixed data provider
Close to 1.9million ports
for high speed broadband deployment
397% total shareholder returnsince demerger
>28,000 employees
total payout to shareholders
since demerger*
RM
11.86 billion
TRI*M score > global average
for 5th consecutive year
>1TBGlobal
Capacity
Enhanced global network with
design capacity of 33TB
Note: Information as at 31 December 2015* Inclusive of dividend payouts and capital repayments
4
Backhaul
We offer a full suite of products and services to enable a digital lifestyle
5
Cloud Services
Managed Data Centre Solutions
Managed TelePresence Services
Managed Network & Network Integration
Access Infra
Cap
ital
Str
uct
ure
CREDIT RATING
TOTAL RETURN TO SHAREHOLDERS
• Authorised Capital: RM3,528,003,015.00• Issued and Paid-up Capital: RM2,630,554,376.00• Date of Incorporation: 12 October 1984• Date of Listing: 7 November 1990
75.26%FBMKLCI1
392.81%TM1
32.35%AXIATA2
83.96%MAXIS3
228.73%DIGI1
•A3Moody’s
•A-S&P
•AAARAM
Source: Bloomberg1 For the period 22 April 2008 – 6 April 20162 For the period 25 April 2008 – 6 April 20163 For the period 18 November 2009 – 6 April 2016
• As at 31 March 2016• EPF stands for Employees Provident Fund Board
6
Group Results: 3-Year Performance
Revenue EBIT
EBITDA PATAMI
RM mn RM mn
RM mn RM mn
+5.7% +4.3%-5.7% (Normalised +2.0%) -2.9% (Normalised -10.6%)
+2.9% (Normalised +5.9%) +1.6% (Normalised -1.3%)-17.8% (Normalised -9.4%) -15.8% (Normalised -4.9%)
Note: Unless stated otherwise, all figures shall be inclusive of P1 7
*Excluding P1: Reported EBIT: RM1.53bn (+13.7%)Norm. EBIT: RM1.52bn (+6.2%)*Excluding P1:
RM11.52bn (+3.0%)
Total Revenue by Product: 3-Year Performance
FY2013 FY2014 FY2015
*”Others” comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages
Note: Unless stated otherwise, all figures shall be inclusive of P18
30%
23%
29%
19%
34%
24%
25%
17%31%
27%
23%
19%
+3.7% +2.5%+11.9% -4.1% +1.1%
+0.6%+18.8%
RM mn RM mn RM mn RM mn
Internet Others*VoiceData
+12.4%
Change in revenue mix: non-voice revenue now 70%
InternetVoice
DataOthers
Capex & Opex: 3-Year Performance
Total Capex
2,506
Capex / Revenue (%)
*Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)
Cost % of Revenue1
10,588.2
89.4%
RM mn
Total Cost / Revenue ( %)
1 Revenue = Operating Revenue + Other Operating Income
Note: The classification of cost is as per financial reporting 9
21.4%
RM mn
9,378.3
87.2%
10,095.1
88.6%
1,863
17.5%
1,836
16.3%
41%59%
FY2013
Group Physical Highlights : 3-Year Performance
In thousand
In thousand
+0.7%
2,3402,215 2,231
+4.9%
-2.7%
4,2424,373 4,256
-0.3%
10
Broadband
DEL
56%44%
FY2015
More customers upgrading to high speed packages
Evolving UniFi customer mix: more on 10Mbps or higher
12%
88%
FY2013
46%54%
FY2015
Below 4Mbps4Mbps and above
Below 10Mbps10Mbps and above
11
High Speed Broadband Phase 2 (HSBB 2) and Sub-Urban Broadband (SUBB) Project
Expansion of high speed broadband coverage
Coverage areas Other priority economic areas includingstate capitals and selected major towns
Sub urban and rural areas nationwide
Technology VDSL2, FTTH and ETTH VDSL2, FTTH and ETTH
Speed Over 10Mbps Up to 10Mbps
Agreement details
• Roll out period: Ten (10) years• Investment:(i) Government of Malaysia RM500mn;
and(ii) TM RM1.3 billion
• Ports/premises: 390,000 by 2017.
• TM to provide HSBB Access Services,HSBB Transmission Services and/orHSBB Connection Services to accessseekers
• Roll out period: Ten (10) years• Investment:(i) Government of Malaysia
RM600mn; and(ii) (ii) TM RM1.0 billion
• Ports/premises: 420,000 by 2019.
Rollouttodate
>140,000 ports>40 exchange areas
>120,000 ports>80 exchange areas
HSBB 2 SUBB
Areas are indicative and not to scale
KUALA TERENGGANU
©
©
©
©
©
©
©
KANGAR
ALOR STAR
IPOH
SHAH ALAM
MELAKA
KUANTAN
KUALA LUMPUR
Klang
Valley
◘
◘
◘
◘
◘
◘◘
◘
◘
◘◘
◘
◘
◘
◘
©
◘◘◘◘
◘
◘
◘
◘
◘
◘◘
◘
◘
◘
◘
◘
©
©KOTA KINABALU
KUCHING
◘
◘
◘
◘
©◘
◘◘
◘
◘
Less populated areas
Zone 2 – SUBB
Zone 1 – HSBB & HSBB2
LEGEND
High economic impact areas
Urban/Semi-urban and rural
Industrial parks/FTZs
SEREMBAN
JOHOR BAHRU
Northern
Corridor
Economic
Region
Iskandar
Malaysia
Zone 3
Zone 3
Zone 3 – USP
HSBB deployment areas
103 exchange areas have been covered under HSBB 1, with 390,000 new ports to be delivered under HSBB 2
12
KOTA BHARU
PENANG
State capitals/major towns©
• All price are exclusive of GST• Only applicable through selected channels• *Limited time offer
RM199/month
Speed: 30 MbpsQuota: unlimited 24 months contract
New Broadband Packages
RM299*/month
Speed: 100 MbpsQuota: unlimited 24 months contract
FREEVoice Plan
Free 600 Minutes Voice
Calls
HyppTV
Everywhere on 2
devices
Installation &
Activation500MB/day
for TM WiFi
Cordless
Phone
HyppTV
Set-Top-Box (STB)Wireless Modem
COMPLIMENTARY
RM229/month
Speed: 50 MbpsQuota: unlimited 24 months contract
12 months access 3 months access
13
ADD-ONS Security & Surveillances Home Gadget Protection Voice IDD Parental Control
14
Completion of several milestones:• Network Core• International Roaming• Domestic Roaming• IT systems
User testing underway
On track for launch mid-2016
P1 Updates
15
The Year of Convergence – entry into mobility space
Aggressive rollout of major projects: HSBB2, SUBB
Focus on new platforms for growth
Operationally: focus on innovation, productivity enhancement, digitalization.
2016 Outlook and Business Priorities
2016 Headline KPI
2016 2018
Revenue Growth
EBIT Growth
Customer Satisfaction Measure
1 Using TRiM index measuring end to end customer experience at all touch points. TRiM (Measuring, Managing and Monitoring) is astandardized 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 thestakeholder relationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and acompany's competitive advantage. The information is based on surveys/interviews on a sample customer base.”
*Note: Headline KPI are for TM Group excluding P1
3.5-4%
Maintain 2015 RM level 3-5%
7272
3-3.5%
16
Appendix
17
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
150.9124.2
110.5
89.389.9 90.0
89.9
6.5
5.6
4.03.6
4.7
3.3 3.2
Shareholder Returns (2009-2015)
Dividend Payout Policy of RM700mn or up to 90.0% of Normalised PATAMI whichever is higher
RM mn
Payout Ratio3
(%)
Net Dividend Yield2
(%)
1 2015 1st Interim Dividend of 9.3 sen per share and 2nd Interim Dividend of 12.1 sen per share2 Net Dividend Yield based on closing share price at year end3 Excludes Capital Distributions/Repayment
Revenue grew 4.3% vs. FY2014
Driven by Internet, which grewby 12.4%
Lower normalised EBIT vs.FY2014 due to lower reportedEBIT and forex gain oninternational tradesettlement
Lower Normalised PATAMIdue to lower reportedPATAMI, as well forex impact
+9.0%
+3.1%
+15.4% (Normalised
+13.8%)
167212129
RM mn
RM mn
RM mn
Reported PATAMI
+4.3%
-10.6%
-15.8% (Normalised -4.9%)
20
Key FY2015 Highlights
Revenue
Normalised EBIT
PATAMI
Note : Unless stated otherwise all figures shall be inclusive of P1
700832
193
*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects) 21
FY2015: Group Total Revenue by Product
Others*Data
Internet
828 845 862
2,995
3,367
4Q14 3Q15 4Q15 FY2014 FY2015
889 895 880
3,469 3,507
4Q14 3Q15 4Q15 FY2014 FY2015
-1.0%
-1.7%
+4.1%
+2.0%
+1.1% +12.4%RM mn
RM mn
670
495
701
2,165 2,178
4Q14 3Q15 4Q15 FY2014 FY2015
771688
741
2,606 2,670
4Q14 3Q15 4Q15 FY2014 FY2015
+4.6%
+41.6%
+0.6%RM mn
Voice
+7.7%
-3.9%
+2.5%RM mn
FY2015
22
Others*Global & Wholesale
Note : Unless stated otherwise all figures shall be inclusive of P1
Mass Market
+3.4%
RM mn
+3.3%
+6.2%
1,2251,1541,185
4,586 4,736
FY2015: Group Total Revenue by Lines of Business
-0.7%
RM mn
+0.1%
+8.6%
1,191 1,088 1,182
4,353 4,358
Managed Accounts
-2.8%
RM mn+5.4%
+10.7%
561507577
1,776 1,871
* Others comprise revenue from VADS, Property Development, TM R&D, UTSB, MKL & P1
+6.0%
RM mn +45.6%
+24.6%
RM11,722mn
RM11,235mn
FY2014
FY2015: CAPEX & OPEX
Total Capex Total Cost/Revenue %
16.6 18.4
21.021.6
10.79.0
7.4 6.5
6.9 7.5
3.1 2.92.0 1.4
FY2014 FY2015
Direct cost
Manpower cost
Other operating cost
Maintenance cost
Supplies & material
Marketing expenses
Bad debt
88.6%
694
1,188
662
784480
533
FY2014 FY2015
Access
Core Network
Support System
89.4%
RM10,588.2RM10,095.1
16.3% 21.4%
2,506
1,836
RM mn
23
7,780.6
258.1
10,551.8
7,175.4
1,367.6
1,661.7
321.9
25.2
18,590.5
7,297.5
2,353.1
594.0
3,511.6
838.8
5,822.6
4,367.0
408.3
1,047.3
1,474.9
15,186.9
1,928.7
18,590.5
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
Group Balance Sheet
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 MillionAs at 31 Dec 2014At as 31 Dec 2015
Note : Unless stated otherwise all figures shall be inclusive of P1
24
400 325
927
12
722 757
850
692
1,200
1,586
31 3
USD13.09%
MYR86.87%
Others0.04%
Currency Mix
USD MYR Others
1 Based on Normalised EBIT2 Based on Normalised PATAMI
25
Debt Profile
Note : Unless stated otherwise all figures shall be inclusive of P1
Key Financial Ratios
31 Dec 15 31 Dec 14
Return on Invested Capital1 6.69% 7.72%
Return on Equity2 11.66% 12.80%
Return on Assets1 5.90% 6.34%
Current Ratio3 1.25 1.33
WACC 7.36% 7.54%
31 Dec 15 31 Dec 14
Gross Debt to EBITDA 1.90 1.77
Net Debt/EBITDA 1.02 1.02
Gross Debt/Equity 0.97 0.85
Net Debt/Equity 0.52 0.46
Net Assets/Share (sen) 209.2 203.6
Fixed93.41%
Floating6.59%
Fixed vs Floating
Fixed Floating
TM Group Debt Maturity Profile as at 31 December 2015
RM mn
Note: Sakura-JPY Loan: 0.91375% TMISIS Coupon: 4.87% GTC Loan: 5.60%; 5.15%
Sakura-USD Loan: 3mthL+0.91% ; MTN001 Coupon: 4.30%; GTC Loan: 5.30%
MTN2 Coupon: 4.50%; MTN4&6 Coupon: 4.20%
MTN8 Coupon: 4.0%; MTN14 Coupon: 3.95%; MTN006 Coupon: 4.23%
MTN17 Coupon: 3.95%; MTN18 Coupon: 3.93%, Other FL Coupon: 6.23%
MTN002 Coupon: 4.82%; MTN003 Coupon 4.738%; MTN 004&005 Coupon: 4.55
USD 299.5m; Coupon: 7.875% GTC Loan: 5.38% CIDA Loan : 0.00% P1 – RC and Loans
1 2
3
3
5
6
7
4
5
8
9 10 11
JPY denominatedRM denominatedUSD denominatedCDN denominated
1
2 4 76
9
8
1110
12
12
2016 2017 2018 2019 2020 2021 20232022 2024 20342025 2026
FY2015: Physical Highlights
Broadband
188 187 189192 190
+2.0%
86 85 8190 89
Cu
sto
me
rs (
In t
ho
usa
nd
)A
RP
U (
RM
)
UniFi ARPU (Blended) Streamyx Net ARPU
Fixed Line
Fixed Line (DEL) ARPU
30 31 3031 31
-0.3%
+0.5%
Cu
sto
me
rs (
In t
ho
usa
nd
)A
RP
U (
RM
)
ARPU stable at RM29
839,000 UniFi customers (46,000 net adds QoQ)
Total broadband customers at 2.34mn
Steady UniFi and Streamyx ARPU
86
190
30
87
192
2,230 2,251 2,213 2,231 2,266 2,288 2,294
+4.9%
29
4,318 4,321 4,267 4,256 4,254 4,243 4,219
2,340
4,242
89
190
29
26
Any queries please email to : Rohaila Mohamed Basir
Investor RelationsTelekom Malaysia Berhad
Level 11 (South Wing), Menara TMJalan Pantai Baharu
50672 Kuala LumpurMalaysia
THANK YOU
