TELEKOM MALAYSIA BERHAD
3Q 2009 RESULTS
20 November 2009
(TM Group – continuing operations only)*
* Results of TM Group post demerger
2
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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
16.3%8.1%
11.0% 18.2%
Voice Data Internet Others
OPERATING REVENUE
Capex
HSBB (Gross) BAU (Business As Usual)
EBITDA PATAMI
3Q08
+1.2%
697
3Q09
705
Broadband*
+13.8%
33.2
EBITDA Margin (%)
(166)
179
3Q08 3Q09
+208%
3Q08
1,229
3Q09
1,398
* Exclude hotspots
Fixed Line
3Q08
4,331
3Q 09
4,308
In thousand In thousand
34.6
Key 3Q 2009 Highlights
RM mn
RM mn
+0.5%
RM mn
3Q09 revenue up 1.9% YoY back bystrong non-voice segment
EBITDA margin in line with Headline KPI
Aggressive products bundling continue toattract new broadband customers withcontinued growth in fixed line
BAU capex being managed prudently whilst HSBB capex is in line with progress of premises passed target
TM Group – continuing operations only
YTD 08 YTD 09
+2.6%
6,1776,335
+1.9%
2,109 2,129
3Q08 3Q09
YoY
2,0622,101
793
YTD 08 YTD09
1,069
-25.0%
802
RM mn
HSBB Premises Passed Target*
11 Nov 09
90 150
1,300
Dec 09
750
Dec 10 Dec 12
In thousand
YTD
* cumulative 3
4
Performance Highlights
TM Group – continuing operations only
Note: EBITDA Margin is calculated as percentage of EBITDA against Total Revenue + Other Operating Income
* Exclude Hotspot Customers & Net of Churn
RMmn
Reported
3Q09 3Q08Growth
YoY2Q09
Growth QoQ
YTD 09 YTD 08Growth YTD
on YTD
Revenue 2,101.0 2,062.0 +1.9% 2,129.0 -1.3% 6,335.4 6,177.1 +2.6%
EBITDA 705.0 696.5 +1.2% 824.1 -14.4% 2,345.3 2,095.0 +11.9%
EBITDA margin 33.2% 34.6% -1.4pp 37.5% -4.3pp 36.4% 33.6% +2.8pp
Depreciation 489.7 529.6 -7.5% 528.5 -7.3% 1,543.4 1,555.5 -0.8%
Net Finance Cost 40.1 16.5 +143.0% 57.4 -30.1% 127.7 185.1 -31.0%
FX (Gain) Loss (45.6) 195.7 +123.3% (123.2) -63.0% 6.8 151.8 -95.5%
Profit Before Tax 217.8 (138.1) +257.7% 358.9 -39.3% 668.0 100.0 +568.0%
PATAMI 179.1 (165.8) +208.0% 266.0 -32.7% 472.8 63.3 +646.9%
Broadband*Customers ('000)
1,398 1,229 +13.7% 1,370 +2.0% 1,398 1,229 +13.7%
Fixed Line Customers ('000)
4,331 4,308 +0.5% 4,320 +0.2% 4,331 4,308 +0.5%
Current quarter revenue improved YoY due to non-voice services, however EBITDA affected by higher manpower & other operating cost
5
In RM mn 1Q09 2Q09 3Q09 3Q08 YTD Sept 09
YTD Sept 08
Reported EBITDA 816.2 824.1 705.0 696.5 2,345.3 2,095.0
Non Operational
ESOS Cost 4.5 7.4 9.3 16.9 21.2 110.5
(Appreciation)/ Diminution in value of quoted shares
(6.2) (20.4) (9.8) 19.4 (36.4) 77.4
(Gain)/ Loss on sale of Assets - (51.4) - - (51.4) (25.7)
Normalised EBITDA 814.5 759.7 704.5 732.8* 2,278.7 2,257.2*
Normalised EBITDA Margin 38.2% 34.6% 33.2% 36.4% 35.3% 36.1%
Reported EBITDA Margin 38.3% 37.5% 33.2% 34.6% 36.4% 33.6%
Normalised EBITDA
TM Group – continuing operations only
Note: *Normalised EBITDA FOR 3Q08 and YTD08 adjusted to only include non -operational items
6
Normalised PATAMI
TM Group – continuing operations only
In RM mn 1Q09 2Q09 3Q09 3Q08 YTD Sept 09
YTD Sept 08
Reported PATAMI 27.7 266.0 179.1 (165.8) 472.8 63.3
Non Operational
ESOS Cost 4.5 7.4 9.3 16.7 21.2 110.0
(Appreciation)/ Diminution in value of quoted shares
(6.2) (20.4) (9.8) 19.4 (36.4) 77.4
(Gain)/ Loss on sale of Assets - (51.4) - 88.8 (51.4) 63.1
Unrealised Forex (Gain)/ Loss on long term loans
175.5 (123.2) (45.5) 195.7 6.8 151.8
Loss on termination of financial swaps - - - - - 112.0
Refund of section 110 - - (32.6) - (32.6) (30.0)
Reversal of Excess Current / Deferred tax
(1.6) 0.6 (8.5) (28.7) (9.5) (80.6)
Normalised PATAMI 199.9 79.0 92.0 126.1* 370.9 467.0*
Note: *Normalised PATAMI FOR 3Q08 and YTD08 adjusted to only include non -operational items
1,656 1,638 1,640 1,641
180 212 185 214164 189 228 17662 66 76 70
0
500
1,000
1,500
2,000
2,500
3Q08 1Q09 2Q09 3Q09
Others
Wholesale
Global
Retail
Retail78%
Global10%
Wholesale9%
Others3%
Retail80%
Global9%
Wholesale8%
Others3%
4,944 4,919
537 611511 593185 212
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
YTD Sept 08 YTD Sept 09
Others
Wholesale
Global
Retail
7Note: Total revenue and revenue of segment is after inter-co elimination
YTD Sept 08RM mn
RM mn
+1.9%
+2.6%
Total Revenue by Line Of Business
Note: Breakdown is after inter-co elimination
TM Group – continuing operations only
7
6,3356,177
-1.3%
2,105 2,1292,062
YTD Sept 09
2,101
Positive growth from Global & Wholesale
1,078 1,034 1,001 1,002
311 367 371 354
390 385 402 417
284 319 355 328
0
500
1,000
1,500
2,000
2,500
3Q08 1Q09 2Q09 3Q09
Others
Internet
Data
Voice
3,305 3,037
939 1,092
1,085 1,204
848 1,002
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
YTD Sept 08 YTD Sept 09
Others
Internet
Data
Voice
8Note: Total revenue and revenue of segment are after inter-co elimination
RM mn
RM mn
2,062 2,105 2,129
6,3356,177
+1.9%
-1.3%
+2.6%
Total Revenue by Product
TM Group – continuing operations only
8
YTD Sept 09
2,101
YTD Sept 08
Voice54%
Data15%
Internet17%
Others14%
Voice48%
Data17%
Internet19%
Others16%
Note: Breakdown is before inter-co elimination
Demand for Internet & Data set to grow further
2,880 2,832 2,816 2,796 2,784 2,792 2,797
1,492 1,484 1,492 1,501 1,506 1,528 1,534
0
1,000
2,000
3,000
4,000
5,000
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Residential Business
907 983 1,045 1,088 1,133 1,165 1,188
160174 184 192 200 206 210
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q09
Residential Business
9
PHYSICAL HIGHLIGHTS
Fixed Customers Growth
Broadband* Customers Growth
In thousand
In thousand
+0.5%
4,316 4,308
* Exclude Hotspots
4,297 4,290 4,320
TM Group – continuing operations only
1,1571,229
1,280 1,333 1,370
+13.8%
1,398
4,331
+0.2%
1,067
4,372
+0.4%
ARPU (RM) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09Business* 78 85 79 77 74 78 73Residential* 27 25 24 23 21 21 20
Streamyx Broadband** 91 93 94 90 87 86 89
+2.0%
*Call Usage Only** Streamyx Gross ARPU only
+1.5%+0.3%+0.6%+0.5%-0.5%
+0.3%-0.4%-0.7%-0.6%-1.7%
+0.2%
Managing broadband churn will be intensified as competition heats up in the broadband space
25.4 24.4
21.6 21.4
19.3 18.4
15.914.3
5.34.5
4.53.5
2.0
2.4
YTD 08 YTD 09
Bad Debt
Marketing Expenses
Supplies & material
Other operating cost
Manpower cost
Direct cost
Depreciation
25.9 24.9 23.4
25.620.8 23.9
18.5
17.618.8
15.5
12.815.0
4.3
5.84.6
3.9
3.83.6
0.2
3.52.0
3Q08 2Q09 3Q09
Cost % Of Revenue
Total Cost / Revenue ( %)
94.0% 89.1%
Cost % of Revenue
93.9%
RM5,807.1 RM5,644.4 RM1,936.0
89.4%
RM1,902.4
RM mn
TM Group – continuing operations only
10
90.9%
RM1,908.9
536 429
382
232
152
141
793
0
200
400
600
800
1000
1200
1400
1600
1800
YTD 08 YTD 09
HSBB (Gross)
Support System
Core Network
Access
175 187 174109
184136
125145
112
68
6896
4340
69
40
5150
0
50
100
150
200
250
300
350
400
1Q08 2Q08 3Q08 1Q09 2Q09 3Q09
Access Core Network Support System
39 28 31 58
477
59
242 15115
53 156
0
100
200
300
400
500
600
4Q08 1Q09 2Q09 3Q09
Support System
Core
Access
11
GROUP CAPITAL EXPENDITURE
1,069
1
1Included Others eg: building, land, moveable plants & other assets
802
RM mn
RM mn
BAU Capex / Revenue ( %)
17.3
343 371
218
302
-25.0%
HSBB Capex
BAU Capex
RM mn
516
102
326
TM Group – continuing operations only
12.6
17.1
365
282
355
17.6 10.3 14.2 13.417.0
1,595
Capex efficiency resulted in lower spending for BAU capex
HSBB Retail Launch in Klang Valley
1
1
Note : USD 300m; USD 500m; USD 300m; Fx Rate 3.46101 2 3
USD denominated
RM denominated
2010 2013 2014 2018 2025
RM mn
1,038
2,0001,735
9251,035
1
2
3
10,248.1
226.5
8,587.3
6,965.1
1,362.0
260.2
19,061.9
9,412.4
2,127.9
763.4
4,025.0
2,095.2
400.9
3,471.3
2,812.6
34.9
623.8
5,941.1
11,772.1
1,348.7
19,061.9
6,824.4
134.4
9,298.8
6,988.2
1,489.3
821.3
16,257.6
6,154.4
2,231.3
755.2
0
2,761.8
406.1
3,211.4
2,563.1
34.5
613.8
2,943.0
11,829.7
1,484.9
16,257.6
Shareholders’ Funds
Minority Interests
Deferred & Long Term Liabilities
Long Term Borrowings
Deferred Tax
Deferred Income
Current Assets
Trade Receivables
Other Receivables
Amount due from Axiata
Cash & Bank Balances
Others
Current Liabilities
Trade and other Payables
Short Term Borrowings
Others
Net Current Assets
Property Plant & Equipment
Other Non-current Assets
RM MillionAs at 30 Sept 2009 As at 31 Dec 2008
12
1
30 Sept 09 31 Dec 08 30 Sept 09 31 Dec 08Return on Invested Capital 6.56% 4.50% Gross Debt/ Equity** 1.02 0.68
Return on Equity 5.79% 6.99% Gross Debt/ Equity*** 1.03 0.29
Return on Assets 5.09% 3.15% Net Debt/ Equity** 0.62 0.48
Current Ratio 1.91% 2.71 Net Debt/ Equity*** 0.62 0.09
Debt to EBITDA 2.24 2.45 Net Assets/Share (sen) 192.7 296.5
1
Monetisation of RM334mn staff housing loan completed in June 09
*Annualised ** Before Amount Due from Axiata ** *After Amount Due from Axiata
Group Balance Sheet & Key Financial Ratios
Paid 10sen tax exempt interim dividend (RM358mn) in September 09
31 Dec 0830 Sept 09*31 Dec 0830 Sept 09*
1 Based on Normalised PATAMI
TM Group – continuing operations onlyBalance sheet remain strong with healthy cashand reasonable gearing level
Paid RM3.8bn in IH09 of capital repayment & 2008 final dividend
•Continue to manage Capex effectively withoutcompromising quality
• Will intensify cost control initiatives
•Green efforts: Identified 4 areas of focus – waste management, energy efficiency, water efficiency and climate change•Launched teleworking•Produced inaugural Sustainability Report – accorded GRI score A+
Cost Management
Corporate Responsibility
13
• YTD Sept09 revenue up 2.6% supported by non-voice services which now contributed 52% ofrevenue•TM had spent 3.1% of YTD09 revenue to improveservice quality to customers
Revenue Improvements
• Deployment work ongoing for 44 exchangesout of 95 earmarked
• More than 4,000 staff & 50% of TM contractorstrained in HSBB
• Targeting 150,000 premises passed by year endand 1.3million by end 2012
HSBB
Key Takeaways
TM Group – continuing operations only
•RM395mn of staff housing loans has beenmonitised up to October 09
•TM hedged USD250mn from USD1,100mn debt viacross currency swaps & forward contracts
Balance Sheet Management
Appendix
15
887 829 822 791
170 189 172 194
390 385 398 415
211 243 254 247
0
200
400
600
800
1000
1200
1400
1600
1800
3Q08 1Q09 2Q09 3Q09
Voice Data Internet Others
Consumer34%
SME27%
Enterprise22%
Government17%
2,740 2,442
511555
1,0851,199
620 744
0
1,000
2,000
3,000
4,000
5,000
6,000
YTD Sept 08 YTD Sept 09
Others
Internet
Data
Voice
Total Revenue By Products
Revenue by ProductRevenue by Business Unit
RM mn
RM mn-0.5%
+0.1%
1,6401,6381,656
4,944 4,919
45% 51%
50%50%47%
55% 49%
53% 50% 50%
Note : Breakdown is before inter company elimination
TM Group – continuing operations only
16
-0.9%
YTD 09
RETAIL
1,641
48%
52%
Non Voice revenue continue to grow
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
69 77 94 83
97123
139
107
13
12
22
14
0
50
100
150
200
250
300
3Q08 1Q09 2Q09 3Q09
Voice Data Others
223 254
291
369
46
48
0
100
200
300
400
500
600
700
800
YTD Sept 08 YTD Sept 09
Others
Data
Voice
-22.8%
189
228
+6.7%
+16.0%
511
593
Revenue by Customer SegmentRevenue by Product
RM mn
RM mn
Wholesale
60%62%
40% 38%
61%
64%63%
39%36% 37%
TM Group – continuing operations only
165
17
YTD Sept 09
176
41%
59%
ASP19%
DC81%
Data to drive revenue growth
Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination
DC : Domestic CarrierASP : Application Service Provider
YTD Sept 08
ASP19%
DC81%
118 12991
127
7796
108
972
5
70
0
50
100
150
200
250
3Q08 1Q09 2Q09 3Q09
Others
Data
Voice
Africa & Middle East8%
America10%
Europe6%
South Asia45%
North Asia12%
Oceania7%
Head1%
Global Alliance11%
Global Solutions0%
343 347
239301
9
18
0
100
200
300
400
500
600
700
YTD Sept 08 YTD Sept 09
Others
Data
Voice
Africa & Middle East4%
America11%
Europe8%
South Asia36%
North Asia24%
Oceania6%
Head5%
Global Alliance6%
Global Solutions0%
212
185
+13.8%
537611
Revenue by RegionRevenue by Product
RM mn
RM mn
42%
58% 52%
48%
40%
60%
44%
56%
56%
44%
Others : Include internet
180
TM Group – continuing operations only
18
+18.9%
+15.7%
GLOBAL
YTD Sept 09
YTD Sept 08
214
55%
45%
Sustain voice & grow data revenue
YTD 2008 YTD 2009 3Q 2008 2Q 2009 3Q 2009
Revenue (RM mil) 6,177.1 6,335.4 2,062.0 2,129.0 2,101.0
Direct Costs % 21.6 21.4 25.6 20.8 23.9
RM mil. 1,334.6 1,358.3 527.0 442.8 502.6
Manpower % 19.3 18.4 18.5 17.6 18.8
RM mil. 1,190.4 1,167.4 382.4 375.8 395.3
Supplies & Materials % 5.3 4.5 4.3 5.8 4.6
RM mil. 324.4 287.8 89.3 124.3 86.5
Bad & Doubtful Debts % 2.0 2.4 0.2 3.5 2.0
RM mil. 125.7 155.1 4.1 74.4 41.8
Marketing Expenses % 4.5 3.5 3.9 3.8 3.6
RM mil. 278.0 223.5 80.2 81.6 75.4
Other Operating Costs % 15.9 14.3 15.5 12.8 15.0
RM mil. 984.7 908.6 319.4 272.4 314.7
Depreciation & Amortisation % 25.4 24.4 25.9 24.9 23.4
RM mil. 1,569.3 1,543.4 533.6 531.1 492.6
Total (RM mil) 5,807.1 5,644.4 1,936.0 1902.4 1,908.9
Total (% of Revenue) 94.0 89.1 93.9 89.4 90.9
19
Cost % Of Revenue
Overview of Malaysia Broadband Landscape
20
Not for distribution without express consent of TM
Note: Industrial Zones will be covered in accordance with HSBB rollout for the coverage areas, with final completion in 2012.
HSBB Coverage – Inner Klang Valley
21
Not for distribution without express consent of TM
HSBB rollout implementation in tandem with development build-up of Iskandar Malaysia, focused on Nusajaya, with final completion in 2012.Rollout implementation for coverage of industrial zones to begin in 2010 with final completion in 2012.
HSBB Coverage – Iskandar Malaysia
22
Sumber : Laporan Tahunan TM (2008). 1Pulse & 1Suara, GCC TM (Jan – Jun 2009)
Frost & Sullivan:Data Communications Service Provider
of the YearBroadband Service Provider of the Year
Malaysian Association of Risk and Insurance Management (MARIM) Award – Excellence
in Risk Management 2009
The Brand Laureate Award Conglomerate 2008 – 2009
Hewitt Associates Award –Malaysia Best Employer 2009
TM 2009 AWARDS & RECOGNITION
Platinum Award Reader’s Digest Trusted Brand
23
THE ENDInvestor Relations Unit
Group Finance
TM
24