PT. Indosat Tbk.
First Half 2016 Results
2 PT Indosat Tbk – 1H 2016 Results
3 PT Indosat Tbk – 1H 2016 Results
Revenue growth 4.6% growth QoQ
Cellular Revenue growth 4.2% growth for QoQ
Data Traffic growth 46.3% growth QoQ 83.5% growth YoY
Indosat Ooredoo Juara
Data Revenue growth 20.1% growth QoQ 55.5% growth YoY
Voice & SMS Revenue growth 5.7% growth YoY
4 PT Indosat Tbk – 1H 2016 Results
Moving into LTE
40 Cities, 43 million population coverage
Jakarta
Bogor
Depok
Bekasi
Tangerang
Karawang
Bandung
Tasikmalaya
Sukabumi
Cianjur
Yogyakarta
Semarang
Solo
Purwokerto
Salatiga
Demak
Rembang
Kudus
Magelang
CIlacap
Surabaya
Malang
Mojokerto
Tuban
Gresik
Bojonegoro
Sidoarjo
Kediri
Denpasar
Badung (Kuta
/ Nusa Dua)
Padang
Bukittinggi
Batam
Lampung
Metro
Pontianak
Balikpapan
Samarinda
Banjarmasin
Makassar
Indosat Ooredoo Business
Services
6
3 Stream of Services
PT Indosat Tbk – 1H 2016 Results
Business is coming from Large Enterprise customer with focus on fixed connectivity & internet
and IT Services.
In the last 2 years, we develop B2B mobile business which related to mobile data connectivity
and application.
Fixed Connectivity
Leased Circuit
Ethernet Link
IPVPN
Fixed Internet
IP Transit
Dedicated Internet Access
IT Services
Data Center
Cloud Infrastructure as-a-Service
Disaster Recovery Center 3
7
Our business transformation journey is moving
towards being “Indonesia’s Leading Digital Telco”
PT Indosat Tbk – 1H 2016 Results
Financial and
Operational Highlights
9
1H16 YoY Overview
Consolidated Revenue increased 10.5% from IDR 12,620 billion to IDR 13,942 billion
EBITDA increased 12.6% from IDR 5,362 billion to IDR 6,040 billion, EBITDA Margin reached 43.3%
Profit Attributable to Owners of The Parent increased from a loss of IDR 734 billion to a profit of IDR 428 billion
Free Cash Flow decreased from IDR 1,792 billion to IDR 1,340 billion
PT Indosat Tbk – 1H 2016 Results
10
2Q16 QoQ Overview
Consolidated Revenue increased 4.6% from IDR 6,813 billion to IDR 7,129 billion
EBITDA increased 4.0% from IDR 2,961 billion to IDR 3,080 billion, EBITDA Margin reached 43.2%
Profit Attributable to Owners of The Parent slightly decreased from IDR 217 billion to IDR 211 billion
Free Cash Flow increased from IDR 463 billion to IDR 877 billion
PT Indosat Tbk – 1H 2016 Results
Operating Revenue
EBITDA
EBITDA Margin
Profit (Loss)Attributable to Owners of the Parent
13,942
1H-15 1H-16 YoY
10.5%
6,040 12.6%
43.3% 0.8ppt
428 158.3%
7,129
1Q-16 2Q-16 QoQ
4.6%
3,080 4.0%
43.2% -0.3ppt
211 -2.9%
in IDR billion
12,620
5,362
42.5%
-734
Financial Highlights
11
• Double digit Revenue and EBITDA growth YoY in 2 consecutive quarters supported by growth in all services (voice, SMS, data dan VAS).
• Positive bottom line maintained in line with stabilized currency and reduction of USD debt portion.
6,813
2,961
43.5%
217
PT Indosat Tbk – 1H 2016 Results
936 921 997 909 989
271 272 286 228
226
in IDR billion +4.6% QoQ +9.2% YoY
Cellular Fixed Data Fixed Voice
-1.0% / -16.5%
+8.9% / +5.7%
+4.2% / +11.2%
QoQ / YoY
2Q-15
5,321
3Q-15
5,768
6,527
Operating Revenue Breakdown
5,904
6,962
Segment Revenue Overview
4Q-15
7,187
12
5,676
6,813
1Q-16
• Strong data cellular revenue continue to grow and surpass traditional cellular services. • IDR appreciation drove IDD revenue down and eventually brought down Fixed voice
revenue QoQ and YoY.
PT Indosat Tbk – 1H 2016 Results
2Q-16
5,914
7,129
Voice
SMS
Data
VAS
5.2%
1H16 YoY
6.4%
55.5%
23.1%
0.9%
2Q16 QoQ
-3.6%
20.1%
30.8% Digital business initiatives had pushed VAS revenue growth
Cellular Revenue Performance
13
- Healthy growth in all services YoY - Data took the lead in driving the cellular
revenue growth
PT Indosat Tbk – 1H 2016 Results
68.5 69.0 69.7 69.8
80.5
2Q-15
+17.3% YoY +15.3% QoQ
Number of cellular customers in million
2Q-15
in million
2.0
0.5 0.8
0.1
10.7
3Q-15 3Q-15
Net cellular customers additions
• A combination of data campaign and specific marketing program for ex-Java market had taken the momentum in Ramadhan month
4Q-15 4Q-15
Cellular Customer Base
14
1Q-16 1Q-16
PT Indosat Tbk – 1H 2016 Results
2Q-16 2Q-16
ARPU and ARPM Voice Traffic and MOU
• ARPU growth maintained YoY in line with data users growth. • Voice traffic was growing due to our expansion in outside of Java area continues.
67 70 76 69 71
145 143 135 137
126
13.5 14.6 15.6 14.5 15.6
+15.8% YoY
2Q-15
+7.7% QoQ
Voice Traffic
in billion minutes (Voice Traffic)
in minute/subscriber (MOU)
MOU
25.3 26.9 27.9 26.4 25.5
-3.4% QoQ +0.9% YoY
2Q-15
ARPU
in thousand IDR (ARPU)
ARPM
3Q-15 3Q-15 4Q-15 4Q-15
in IDR (ARPM)
Improving ARPU
15
1Q-16 1Q-16
PT Indosat Tbk – 1H 2016 Results
2Q-16 2Q-16
Data Usage SMS Delivered
• 4G traffic started to drive data usage growth • SMS declined due shifting trend toward messaging application started to be seen.
60 62 59
52 55
46,027 55,871 57,276
63,987
93,641
in TByte
+46.3% QoQ +103.4% YoY
2Q-15
in billion
-7.8% YoY +5.6% QoQ
3Q-15 2Q-15 4Q-15 3Q-15
Strong Data Usage
4Q-15
16
1Q-16 1Q-16
PT Indosat Tbk – 1H 2016 Results
2Q-16 2Q-16
• Moderated operational expenses • Marketing ratio was higher due to Ramadhan campaign
Cost of Service (CoS)
Depreciation and Amortization
Personnel
Marketing
as percentage of revenue
General and Administration
Total Expenses
Total Operating Expenses
2Q-15
42.1%
32.2%
6.9%
4.6%
4.2%
89.9%
57.7%
3Q-15
40.5%
29.8%
6.8%
3.8%
2.9%
83.8%
54.0%
Operational expenses
4Q-15
42.1%
35.1%
7.6%
6.8%
3.0%
94.7%
59.6%
17
1Q-16
40.4%
32.6%
7.8%
4.7%
3.7%
89.1%
56.5%
PT Indosat Tbk – 1H 2016 Results
2Q-16
41.4%
31.3%
7.3%
4.9%
3.2%
88.1%
56.8%
2,758 3,205 2,906 2,961 3,080
EBITDA and EBITDA margin
+4.0% QoQ +11.7% YoY
EBITDA
in IDR billion
EBITDA Margin
2Q-15
EBITDA performance is supported by strong revenue growth combined with strict cost management initiatives.
3Q-15
42.3% 46.0%
EBITDA performance
4Q-15
40.4%
18
43.5%
1Q-16
PT Indosat Tbk – 1H 2016 Results
2Q-16
43.2%
Net profit
• Strong revenue growth, good cost management and stabilized currency resulted in positive net profit
-1,117
-734
428
+158.3% YoY +34.3% YoY
1H-16 1H-15 1H-14*
in IDR billion
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
Net profit
19 PT Indosat Tbk – 1H 2016 Results
2.54
3.13
2.03
25,598
32,437
24,690
2.32 2.22
1.85
23,379 23,017 22,438
Gross debt* and gross debt/EBITDA Net debt* and net debt/EBITDA
• Gearing level continuously improved • US debt portion has come down to 14% level
* IDR 3.84tn, IDR 4.05tn and IDR 3.61tn of obligation under finance lease are included in 1H14, 1H15 and 1H16 respectively
1H-15 1H-14 1H-16
-23.9% YoY
Gross Debt
in IDR billion
Gross Debt/EBITDA
1H-16 1H-14 1H-15
Net Debt Net Debt/EBITDA
in IDR billion
Balance sheet
-2.5% YoY
20 PT Indosat Tbk – 1H 2016 Results
21.0
26.8
37.6
24.4
29.7
1,372 1,869
2,699
1,663
2,117
Free cash flow Capex and Capex/Revenue
• FCF strengthening with improved operating CF generation and moderating capex • Capex disbursement is in line with guidance toward end of year.
in IDR billion
1,310 837
-1,067
463 877
2Q-15*
2Q-15
Capex
in IDR billion
Capex/Revenue 3Q-15*
3Q-15
4Q-15*
4Q-15
Free cash flow & Capex
21
1Q-16
1Q-16
in %
PT Indosat Tbk – 1H 2016 Results
2Q-16
2Q-16
* Reclassification from repayment of obligation under finance lease
Number of BTS Data User
• Strong network performance to support data service. • Data users is steadily growing.
22,902 23,525 23,596 23,714 23,793
20,067 22,671 23,730 25,068 25,816
106 165 3,361 3,544 3,724
+1.9% QoQ +23.8% YoY
1Q-16
2G 3G
In million
2Q-15
52,326
3Q-15
43,075 46,361
2Q-15 3Q-15 4Q-15
30.1 32.2 34.0 31.2
35.1
+12.5% QoQ +16.6% YoY
Network & Data User
4Q-15
50,687
4G
22
1Q-16
PT Indosat Tbk – 1H 2016 Results
2Q-16
53,333
2Q-16
Management focus
& Key updates
Management Focus
24
● 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 – 1H 2016 Results
FY 2015 Actual FY 2016 Guidance
Consolidated Revenue Growth 11.1% In line with market
EBITDA Margin* 42.9% Low to Mid 40’s
CAPEX IDR 7.3 trillion IDR 6.5 – 7.5 trillion
* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015
2016 Guidance
25 PT Indosat Tbk – 1H 2016 Results
Thank You Investor Relations & Corporate Secretary Jl. Medan Merdeka Barat No. 21 Jakarta - 10110 Tel: +62 21 30442615 [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
28 PT Indosat Tbk – 1H 2016 Results
On 25 January 2016, Standard & Poor's Ratings Services (“S&P”) affirmed its 'BB+‘ long-
term corporate credit rating on PT Indosat Tbk. The outlook is positive. S&P also affirmed
their 'axBBB+' long-term ASEAN regional scale rating on the Indonesia-based
telecommunications company. S&P affirmed the rating because they expect Indosat to
maintain its solid No.2 position in Indonesia's growing cellular market. The positive outlook
reflects their view that the company's financial risk profile will improve over the next 12-18
months.
On 28 September 2015, PEFINDO has affirmed its “idAAA” ratings for PT Indosat Tbk
(ISAT) and its Shelf-Registered Bond I/2014-2016, Bonds V/2007 Serie B, Bonds VII/2009
Serie B, and Bonds VIII/2012. PEFINDO has also affirmed its “idAAA(sy)” ratings for ISAT’s
Sukuk Ijarah I/2014-2016, Sukuk Ijarah IV/2009 Serie B, and Sukuk Ijarah V/2012. The
outlook for the corporate rating is “stable”. The ratings reflect ISAT’s strong support from its
majority shareholder, strong market position, and stable operating performance.
On 1 June 2016, Moody's Investors Service has affirmed Indosat Tbk. (P.T.)'s Ba1
corporate family rating. At the same time, Moody's has changed the rating outlook to
positive from stable. The change in outlook to positive reflects the substantial
improvement evident in Indosat's operational and financial profiles, with the company --
over the last four quarters -- reporting YoY revenue growth of 11%-13%, above the sector
average in Indonesia of about 9%.
On 15 March 2016, Fitch Ratings has upgraded the Long-Term Local-Currency Issuer
Default Rating (LC IDR) of Indonesia’s second-largest telecommunications operator, PT
Indosat Tbk (Indosat Ooredoo), to ‘BBB+’ from ‘BBB’. The agency has simultaneously
affirmed Indosat Ooredoo’s Long-Term Foreign-Currency IDR (FC IDR) and its foreign-
currency senior unsecured rating at ‘BBB’. Fitch has also affirmed the National Long-Term
Rating at ‘AAA(idn)’. The Outlook on the ratings is Stable.
Credit ratings
29 PT Indosat Tbk – 1H 2016 Results
0.36 2.11
0.27 0.27
2.72
5.98
2.56 2.27
0.95 0.36 2.08
0.36 0.81
In IDR trillion
2020 2019 2022 2018 2017 2016
IDR
USD in IDR
2021 2025
* Excluding obligation under capital lease
2024
Debt maturity profile*
30 PT Indosat Tbk – 1H 2016 Results
Number of BTS
10.0
900 Mhz
7.5
7.5
Indosat
Telkomsel
XL Axiata
20.0
1800 Mhz
22.5
22.5
10.0
2100 Mhz
15.0
15.0
in Mhz
Hutchison - 10.0 10.0
2.5
850 Mhz
4.5*
-
-
* Telkom and Bakrie Telekom have the same spectrum, differentiated by its operational areas
15.0**
2300 Mhz
15.0**
-
-
** Indosat/IM2: West Java exclude Bogor, Depok & Bekasi ; Telkom/Telkomsel: Maluku & North Maluku
Spectrum overview
31 PT Indosat Tbk – 1H 2016 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
32 PT Indosat Tbk – 1H 2016 Results