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
PT Indosat Tbk – 1Q 2017 Results
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
5PT Indosat Tbk – 1Q 2017 Results
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
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
PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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.
PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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.
PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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%
PT Indosat Tbk – 1Q 2017 Results
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%
PT Indosat Tbk – 1Q 2017 Results
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
17PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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
PT Indosat Tbk – 1Q 2017 Results
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.
PT Indosat Tbk – 1Q 2017 Results
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
22PT Indosat Tbk – 1Q 2017 Results
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
25PT Indosat Tbk – 1Q 2017 Results
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
26PT Indosat Tbk – 1Q 2017 Results
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*
27PT Indosat Tbk – 1Q 2017 Results
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 – 1Q 2017 Results
• 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
29PT Indosat Tbk – 1Q 2017 Results