Indosat 1Q16 Final

PT. Indosat Tbk.
First Quarter 2016 Results

Reborn Update

New Stream to focus on
Why
Change?





Increase Attractive to help the business
Quality perception and retention challenges
Faster growth, renewed sense of purpose

Market and consumers are evolving…

DIGITALIZATION is a new opportunity for us to win the market
We can leverage the Ooredoo brand to capture this opportunity

Innovative & global brand association

Technical & funding support

Data and digital leadership

The New Indosat Ooredoo Positioning & Streams

We are building Indonesia's

1

greater
Liberating products
& services
Affordability &
Accessibility

What does
this mean?


leading digital telco, enabling access and…

2

A data strong
network
4G LTE for Everybody

3

We treat our
customer like a friend

New Behavior & Customercentric Experience

✓ New look & feel! New logo & designs, reskinned Galeri/ outlets/ office/ materials
✓ Digital customer experience! Revamped digital touchpoints, Apps Corner
✓ New culture & behavior! Can-do attitude, Reform mindset: positive & curious


PT Indosat Tbk – 1Q 2016 Results

3

1

Liberating products & services

From High Variety package offer…

PT Indosat Tbk – 1Q 2016 Results

..Becoming Clear and Simple
package

4

2

A Data Strong Network


Indosat Ooredoo won Speedtest
Award for Fastest Mobile Network and
Fastest 4G Network in Indonesia
based on the results of tests
performed on Speedtest.net and
Speedtest mobile applications.
Network performance test results show
21.54 Mbps download speed and 9.43
Mbps upload speed
Speedtest rank cellular network based
on average download performance
with the fastest technology available in
Indonesia.

PT Indosat Tbk – 1Q 2016 Results

5

3


We treat our customer like a friend
0815XXXXXXX

Enrich customers touch point
for easiness and ability to
customize their own needs
PT Indosat Tbk – 1Q 2016 Results

6

Mobile Financial Services

Serving all customer segments

Mobile Banking

Telco Wallet

Micro Savings, loans


Pay with QR

OTT Wallet

Cash Management

Remittance

Mobile POS

PT Indosat Tbk – 1Q 2016 Results

Micro insurance

8

MFS trend

Transaction

Volume (in Million)

5.3

Number of Agent
Locations

154K

42

(Dec-14)

222K

(Dec-14)

(Dec-15)

(Dec-15)


Dec-15

IDR 2,500 Bn

63%

900%

Jan-15
IDR 64Bn

Number of Subscribers
(in Million)

Jan-14
IDR 27Bn

1,3
(Dec-14)


2,5
(Dec-15)

84%

PT Indosat Tbk – 1Q 2016 Results

Transaction Value
(in trillion IDR)

0,19
(Dec-14)

2,5
(Dec-15)

1000%

Active Agents


12k

115k

(Dec-14)

(Dec-15)

614%

9

Building biggest ever eco-payment system
Cash in
Cash out
Chain Stores

ATM Switching


Service
Payment
Billers

Airtime

Insurance

FIs

Online
Merchant
In Store
Payment
Transfer &
Remittance
MTO

Pay with
QR Codes
PT Indosat Tbk – 1Q 2016 Results

MNO
Classic Pizza Cone
Coffee Kulture
E-Claire Coffee
Rasa Sabananyo
Heidy’s Kitchen
Soho Conv. Store
Uncle Yaya’s
Steak

10

Financial and
Operational Highlights

1Q16 YoY Overview

Consolidated Revenue increased 11.8%
from IDR 6,093 billion to IDR 6,813 billion

EBITDA increased 13.7% from IDR 2,604
billion to IDR 2,961 billion, EBITDA Margin
reached 43.5%
Profit Attributable to Owners of The Parent
increased from a loss of IDR 456 billion to a
profit of IDR 217 billion
Free Cash Flow decreased from IDR 587
billion to IDR 463 billion

PT Indosat Tbk – 1Q 2016 Results

12

1Q16 QoQ Overview

Consolidated Revenue decreased 5.2%
from IDR 7,187 billion to IDR 6,813 billion
EBITDA increased 1.9% from IDR 2,906
billion to IDR 2,961 billion, EBITDA Margin
reached 43.5%
Profit Attributable to Owners of The Parent
increased from a loss of IDR 188 billion to a
profit of IDR 217 billion
Free Cash Flow increased from IDR -1,509
billion to IDR 463 billion

PT Indosat Tbk – 1Q 2016 Results

13

Financial Highlights

1Q-15

1Q-16

YoY

4Q-15

1Q-16

QoQ

Operating Revenue

6,093

6,813

11.8%

7,187

6,813

-5.2%

EBITDA

2,604

2,961

13.7%

2,906

2,961

1.9%

42.7%

43.5%

0.8ppt

40.4%

43.5%

3.1ppt

217 147.7%

-188

in IDR billion

EBITDA Margin
Profit (Loss)Attributable
to Owners of the Parent




-456

217 215.8%

Revenue and EBITDA continued to grow, supported by strong growth in cellular
revenue and cost management initiative that starts to deliver the result.
Bottom line has entered into positive territory due to stabilized currency.
PT Indosat Tbk – 1Q 2016 Results

14

Segment Revenue Overview

in IDR billion

Operating Revenue Breakdown
+11.8% YoY

QoQ / YoY

6,527

6,962

7,187

271

272

286

921

997

900

936

4,903

5,321

5,768

5,904

5,676

1Q-15

2Q-15

4Q-15

1Q-16

6,093
290

Fixed Voice





-5.2% QoQ

Fixed Data

3Q-15

6,813
228

-20.1% / -21.4%

908

-8.9% / +1.0%

-3.9% / +15.8%

Cellular

Strong data cellular revenue growth has driven up overall cellular business performance
IDR appreciation drove IDD revenue down and eventually brought down Fixed voice revenue QoQ and YoY.
Project related to government was stop caused a lower Fixed data revenue QoQ. However, revenue growth
YoY is still maintained.
PT Indosat Tbk – 1Q 2016 Results

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Cellular Revenue Performance

Voice

YoY

QoQ

8.2%

-6.2%

SMS

13.3%

-8.3%

Data

45.5%

7.4%

VAS

21.8%

5.8%

PT Indosat Tbk – 1Q 2016 Results

- Healthy growth in all services YoY
- Seasonality impacted voice and sms revenue,
but data, supported by 4G network and
offering, continued to grow

Increased VAS usage from various gaming &
content packages

16

Cellular Customer Base

Number of cellular customers
in million

in million
+4.9% YoY

66.5

Net cellular customers additions

68.5

69.0

+0.1% QoQ
69.7

69.8

3.3

2.0
0.5

1Q-15



2Q-15

3Q-15

4Q-15

1Q-16

1Q-15

2Q-15

3Q-15

0.8

4Q-15

0.1

1Q-16

Number of customer continued to grow, shifting from acquisition mode to
monetization mode.

PT Indosat Tbk – 1Q 2016 Results

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Improving ARPU

ARPU and ARPM
in thousand IDR
(ARPU)
140

145

Voice Traffic and MOU
in IDR
(ARPM)

143

135

in billion minutes
(Voice Traffic)

137
67

+9.9% YoY

in minute/subscriber
(MOU)

67

70

76

-5.3% QoQ
+9.8% YoY

-7.3% QoQ

24.0

25.3

26.9

27.9

26.4

13.2

13.5

14.6

15.6

14.5

1Q-15

2Q-15

3Q-15

4Q-15

1Q-16

1Q-15

2Q-15

3Q-15

4Q-15

1Q-16

ARPU




69

ARPM

Voice Traffic

MOU

ARPU grew inline with customer addition YoY
Voice traffic was growing due to our expansion in outside of Java area
PT Indosat Tbk – 1Q 2016 Results

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Strong Data Usage

Data Usage

SMS Delivered

in TByte

in billion
+60.5% YoY
55,871

-6.8% YoY

+11.7% QoQ
57,276

-11.6% QoQ

63,987
56

60

62

1Q-15

2Q-15

3Q-15

46,027

59
52

39,880

1Q-15




2Q-15

3Q-15

4Q-15

1Q-16

4Q-15

1Q-16

Increase in data traffic continued driven by 4G data plan focused
SMS declined due to seasonality

PT Indosat Tbk – 1Q 2016 Results

19

Operational expenses

as percentage of revenue

1Q-15

2Q-15

3Q-15

4Q-15

1Q-16

42.9%

42.1%

40.5%

42.1%

40.4%

Personnel

7.4%

6.9%

6.8%

7.6%

7.8%

Marketing

3.0%

4.6%

3.8%

6.8%

4.7%

General and Administration

3.8%

4.2%

2.9%

3.0%

3.7%

57.3%

57.7%

54.0%

59.6%

56.5%

33.9%

32.2%

29.8%

35.1%

32.6%

91.2%

89.9%

83.8%

94.7%

89.1%

Cost of Service (CoS)

Total Operating Expenses
Depreciation and Amortization
Total Expenses




Moderated operational expenses
G&A ratio was higher due to professional fees related to new marketing strategy and
campaign being implemented
PT Indosat Tbk – 1Q 2016 Results

20

EBITDA performance

EBITDA and EBITDA margin
in IDR billion
42.7%

46.0%
42.3%

40.4%
+13.7% YoY

2,604

2,758

1Q-15
2Q-15
EBITDA

3,205

3Q-15

43.5%

+1.9% QoQ
2,906

2,961

EBITDA performance is supported by
strong revenue growth combined with
strict cost management initiative that
started to deliver result

4Q-15
1Q-16
EBITDA Margin

PT Indosat Tbk – 1Q 2016 Results

21

Net profit

Net profit
in IDR billion
-157.2% YoY

+147.7% YoY

797



Strong revenue growth, good cost
management and stabilized currency
resulted in positive net profit

217

-456

1Q-14*

1Q-15

1Q-16

* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015

PT Indosat Tbk – 1Q 2016 Results

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Balance sheet

Gross debt* and gross debt/EBITDA
in IDR billion

Net debt* and net debt/EBITDA
in IDR billion

2.73
2.58
2.19

2.25

1.97

-5.4% YoY
27,174

1Q-14
Gross Debt

27,398

1Q-15

2.39

-2.5% YoY

25,913

23,649

23,924

23,331

1Q-16

1Q-14

1Q-15

1Q-16

Gross Debt/EBITDA

Net Debt

Net Debt/EBITDA

* IDR 3.73tn, IDR 4.07tn and IDR 3.76tn of obligation under finance lease are included in 1Q14, 1Q15 and 1Q16 respectively




Gearing level continuously improved
Reducing US debt portion is progressing
PT Indosat Tbk – 1Q 2016 Results

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Free cash flow & Capex

Free cash flow

Capex and Capex/Revenue
in %

in IDR billion

in IDR billion

37.6
26.8
23.2
1,096

1,051

481



1,414

1,372

1Q-15

2Q-15

1,869

24.4
1,663

463

-1,509

1Q-15

21.1

2,699

2Q-15

3Q-15

4Q-15

1Q-16

Capex

3Q-15

4Q-15

1Q-16

Capex/Revenue

Moderated capex to revenue ratio as a result of price negotiation supported by
Ooredoo, the parent

PT Indosat Tbk – 1Q 2016 Results

24

Network & Data User

Number of BTS
+3.2% QoQ

+28.2% YoY




50,687
3,361

52,326
3,544

22,671

23,730

25,068

22,902

23,525

23,596

23,714

2Q-15

3Q-15

4Q-15

1Q-16

40,831
75

43,075
106

46,361
165

18,544

20,067

22,212

1Q-15
4G

Data User

3G

In million

+6.0% YoY

30.1

29.5

1Q-15

2Q-15

32.2

3Q-15

-8.0% QoQ

34.0

4Q-15

31.2

1Q-16

2G

Strong network performance to support data service
Shifting the focus from acquisition toward monetization

PT Indosat Tbk – 1Q 2016 Results

25

Management focus
& Key updates

Management Focus
● 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 2016 Results

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2016 Guidance

FY 2015 Actual

FY 2016 Guidance

Consolidated Revenue Growth

11.1%

In line with market

EBITDA Margin*

42.9%

Low to Mid 40’s

IDR 7.3 trillion

IDR 6.5 – 7.5 trillion

CAPEX

* Restated due to implementation of PSAK 24 (revised 2013) effective 1 January 2015

PT Indosat Tbk – 1Q 2016 Results

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Thank You
Investor Relations & Corporate Secretary
Jl. Medan Merdeka Barat No. 21
Jakarta - 10110
Tel: +62 21 30442615
Investor@indosatooredoo.com

Supplemental
Information

IM2 case development
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.

PT Indosat Tbk – 1Q 2016 Results

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.
31

Credit ratings
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 foreigncurrency senior unsecured rating at ‘BBB’. Fitch has also affirmed the National Long-Term
Rating at ‘AAA(idn)’. The Outlook on the ratings is Stable.
On 25 January 2016, Standard & Poor's Ratings Services (“S&P”) affirmed its 'BB+‘ longterm 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 21 October 2015, Moody's Investors Service says that PT Indosat Tbk's (Ba1 stable)
1H 2015 results were in line with their expectations, with continued improvement in
operating performance from the second half of 2014. The stable outlook reflects Moody's
expectation that Indosat will maintain its position as a leading mobile operator in
Indonesia amid increasing competition for data services, and leverage, in terms of
adjusted debt/EBITDA will remain in the 2.5x -3.0x range for the next 12 - 15 months as
Indosat continues its high capex for network modernization.
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.
PT Indosat Tbk – 1Q 2016 Results

32

Debt maturity profile*

In IDR trillion

3.83
4.38

2.92

2.27
2.08

1.21

2016

2.46

2017

0.27

0.27

0.95

2018

2019

2020

IDR

0.36

2021

2022

0.36

0.81

2024

2025

* Excluding obligation under capital lease

USD in IDR

PT Indosat Tbk – 1Q 2016 Results

33

Spectrum overview

in Mhz

Number of BTS850 Mhz
Indosat

900 Mhz

1800 Mhz

2100 Mhz

2300 Mhz

2.5

10.0

20.0

10.0

15.0**

3.5 – 5.0*

7.5

22.5

15.0

15.0**

XL Axiata

-

7.5

22.5

15.0

-

Hutchison

-

-

10.0

10.0

-

Telkomsel

* Telkom and Bakrie Telekom have the same spectrum, differentiated by its operational areas
** Indosat/IM2: West Java exclude Bogor, Depok & Bekasi ; Telkom/Telkomsel: Maluku & North Maluku

PT Indosat Tbk – 1Q 2016 Results

34

Disclaimer


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
PT Indosat Tbk – 1Q 2016 Results

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