AXIATA JOURNEY Entering The Next Phase: Building A New Generation “Telco” 23 rd Annual General Meeting Connexion@Nexus, Bangsar South City 20 May 2015 Dato’ Sri Jamaludin Ibrahim Managing Director / President & Group Chief Executive Officer company confidential
PRESENTATION OUTLINE Our Journey So Far 2014 and Q1 2015 Performance Opportunities and Challenges Strategy Moving Forward Conclusion & Key Messages AGM 2015 2
ADVANCING ASIA Revenue RM 18.7 Bil No 7 on the KLCI PATAMI RM 2.3 Bil No 8 on the KLCI* Market Cap RM 60.5 Bil Top 4 on the KLCI* Customers ~260 Mil No 2 Regional Telco* Employees 25,000 Countries 8 * As of 31 Dec 2014
Our Journey So Far
OUR JOURNEY SO FAR: Our Transformation Journey Started in 2008 With a Holistic Vision Regional Champion by 2015 Profit Best Financial Performance People Most Admired Top Employer / Talent Factory Company in ASEAN / South Asia Process World-Class Processes Planet National / Social Contribution AGM 2015 5
OUR JOURNEY SO FAR: We Are Nearing the Conclusion of Phase 2 of Our Transformation WE ARE HERE! Pre 2008 Phase 0 Phase 1 Phase 2 ≤ 2007 ‘07/’08 ‘08/’10 ‘11 - ’15 Building a Creating a Regional Forming an New Distinct Champion (Redefining Building the Independent Company Footprint the Company) Company (Defining the Company) AGM 2015 6
OUR JOURNEY SO FAR: From 2007 to 2014, We Achieved Healthy Growth in Revenue, PATAMI, ROIC and Market Cap RM18.7 bn RM2.2bn 9.0% RM60.5 bn 3.5 pp 87 % 1.6x 2.1x RM10.0 bn 6.5% RM28.3 bn RM1.4 bn ROIC** Market Revenue Normalised PATAMI* Capitalization*** Notes * PATAMI normalised for one-off asset sale gains and forex gains/losses ** ROIC is from 2008 to 2014 *** Market Cap as per Bloomberg on 31/12/2014 and compared against IPO AGM 2015 7
OUR JOURNEY SO FAR: From 2007 to 2014, We Improved Our Regional Ranking in Subscribers, Revenue and Market Capitalization No. 2 No. 3 No. 6 +5 +4 +3 No. 7 No. 7 No. 9 Market Subscribers Revenue Capitalization Notes Excludes operators and groups operating in Asia Pacific without holding entity base in the region of Southern Asia and South-Eastern Asia to reflect similar foot print to Axiata AGM 2015 8
OUR JOURNEY SO FAR: From 2007 to 2014, Our Subscribers Ranking Position Improved From #7 to #2 (Asean/South Asia) SUBSCRIBERS (Million) 2014 2007 472 1. SingTel 1. Singtel 171.5 2. Axiata 266.9 2. Telenor 55.3 3. Bharti Airtel 226.8 3. Bharti Airtel 55.2 Vodafone 185 4. 4. Telekomsel 47.9 Telenor 171 5. Reliance 41.0 5. 6. Vodafone 39.9 Telkomsel 141 6. 7. Axiata 39.8 Reliance 101 7. Note: • Regional market is defined as Asean 8. BSNL 36.8 Maxis 92 8. and South Asia • Subscribers represents mobile business (where possible) • PLDT Based on 100% subscriber accounting 9. 30.0 BSNL 79 9. for shareholdings of 20% and above for subscriber base in Southern Asia and South-Eastern Asia. 10. NTT 30.0 • MTCE is not included in Axiata’s Viettel 76 10. subscriber numbers. • Excludes operators and groups operating in Asia Pacific without holding Regional players entity base in the region of Southern Asia and South-Eastern Asia to reflect similar foot print to Axiata. AGM 2015 9
OUR JOURNEY SO FAR: From 2007 to 2014, Our Revenue Ranking Position Improved From #7 to #3 (Asean/South Asia) REVENUE (RM Billion) 2014 2007 25.55 1. Bharti 1. Telenor 17.2 22.9 2. Telenor 2. Bharti 17.2 18.7 3. Axiata 3. SingTel 15.5 18.3 4. Telkomsel Note : Telkomsel 4. 15.5 • Regional market is defined as Asean and South Asia • Revenue represents mobile business (where 16.7 5. SingTel possible) Reliance 5. 12.0 • Based on revenue accounting for shareholdings of 50% and above (or with management control) for revenue in Southern 15.1 6. AIS AIS Asia and South-Eastern Asia. 6. 10.0 • The currency exchange rate recorded was based on the average of the year. • Mobile only revenues of subsidiaries. 10.1 7. Reliance • Axiata Revenues for SingTel excludes Australia 10.0 7. operations • Revenues for Bharti excludes its African operations 8.5 8. PLDT Maxis • 7.6 Revenue for Telenor includes countries 8. Thailand, Malaysia, Bangladesh, Pakistan and India only • Excludes operators and groups operating in 7.9 9. Maxis PLDT 6.5 Asia Pacific without holding entity base in the 9. region of Southern Asia and South-Eastern Asia to reflect similar foot print to Axiata. Revenues from Japan, Korea, Taiwan, China, 5.2 10. Indosat Indosat 4.5 10. New Zealand and Australia have been excluded. * Regional players AGM 2015 10
OUR JOURNEY SO FAR: From 2007 to 2014, Our Market Capitalization Ranking Position Improved From #9 to #6 (Asean/South Asia) MARKET CAPITALIZATION (RM Billion) 2008 2014 153.5 1. Singtel 1. SingTel 93.8 2. Telenor 99.8 2. Bharti 92.8 PT Telkom 75.9 3. 3. Telenor 45.2 AIS 74.3 4. 4. PT Telkom 42.6 Bharti 73.0 5. 5. Reliance 31.9 Axiata 60.5 6. 6. PLDT 27.6 Maxis 48.1 7. 7. AIS 22.6 PLDT 45.8 8. Note : Telenor market capitalisation is for the whole 8. DiGi 16.3 group and includes European operations • Market capitalisation includes both fixed and mobile operations. DiGI 44.8 9. • 9. Telenor Group is included due to substantial Axiata 13.0 holdings in the region. • Excludes operators and groups operating in Asia Pacific without holding entity base in the Globe 16.7 10. 10. region of Southern Asia and South-Eastern Asia Indosat 9.6 to reflect similar foot print to Axiata. Regional players AGM 2015 11
OUR JOURNEY SO FAR: We Outperformed Regional Peers and Top 10 Bursa Malaysia Companies in Capital Growth… 2.5 MARKET CAP GROWTH (REBASED) 92.6% 114% 2 1 Top 10 of 68% Bursa 1.5 1 Regional 2 (16%) Telco 0.5 0 1 2 3 4 5 6 7 8 2008-IPO 2008 2009 2010 2011 2012 2013 2014 Note : Regional Telco average growth based on conversion to USD at prevailing rates for the respective years. Axiata and Top 10 Companies on KLCI average growth based on RM. Average is based on the Compounded Annual Growth Rate (CAGR) for the period. Regional Telco’s : Based on Vodafone, Singtel, Telenor, Bharti Airtel, AIS, Telkomsel, Axiata, Digi, PLDT and Indosat 1. 2. Bursa Malaysia Top 10 : The list is based on 7 of the top 10 largest market cap companies on the Bursa Malaysia as of 31/12/2014 AGM 2015 12
OUR JOURNEY SO FAR: … While Delivering Healthy Dividends at the Same Time Dividend Yield =3.3% Dividend Yield =3.2% Dividend Yield = 5.5% * Dividend Per Share = Dividend Per Share = Ordinary & Special Dividend 22 sen 22 sen Per Share = 35 sen Dividend Yield = 3.9% Dividend Per Share = 19 sen 90% 84% Dividend Yield = 2.1% 75% 80% 70% Dividend Per Share = 70% 10 sen 60% 60% 50% 40% 30% 30% 20% DPR 10% 0% 2010 2011 2012 2013 2014 * Inclusive of the special dividend paid AGM 2015 13
OUR JOURNEY SO FAR: We Have Built a Talent Pipeline, Diverse Leadership Team and Robust Development Programmes 2014 • 148 Top Talent • 700 Middle level Talent • 2:1 cover ratio of 73 leadership positions • 4 CEOs appointed internally • 4 went to key positions in other companies • 44% of key jobs filled by internal talent • external : internal hiring shifted from 78:22 to 19:81 Leadership is made up of • 61% Local , 22% footprint, 17% external • RM128m spent on talent development since 2009 AGM 2015 14
OUR JOURNEY SO FAR: We Built a Comprehensive Sustainability Programme and Reporting Based on Four Strategic Pillars Beyond Short Nurturing People Planet and Society Term Profits Process Excellence Long Term Investment Nurturing Future Greener Operations Supply Chain Management Services Beyond Leaders Commercial Motivation Customer Centricity Disaster Management and Response Culture of Integrity Digital Inclusion & Digitising Processes Digitised Ecosystems Contribution Towards Inclusivity Society Strong Governance Global Mobile Conducive Workplace Development AGM 2015 15
AYTP (Axiata Young Talent Program) Our Signature CSR Programme
OUR JOURNEY SO FAR: Disaster Management is Now an Important Part of Axiata Sustainability Programme Total Contribution RM1.2 million for flood “Celcom was the Deployed Portable Mobile Most Cellular Sites, Resilient Network Generators and during the floods” Mobile Transmitter to Minister of Communications and re-establish connectivity Multimedia, Malaysia AGM 2015 18
OUR JOURNEY SO FAR: Axiata Has Been a Long-Term Investor and a Major Economic Contributor in ASEAN and South Asia 11 27 Yrs Yrs Indonesia Malaysia Investment (2008-2014): Investment (2008-2014): USD10.1 billion USD9.8 billion Creating more than ~126,000 jobs created ~195,000 jobs created 1.3 million ~0.9% of GDP ~0.2% of GDP Job Opportunities across Asia 17 19 20 Yrs Yrs Sri Lanka Cambodia Bangladesh Yrs Investment (2008-2014): Investment (2008-20014): Investment (2008-2014): USD3.3 billion USD2.6 billion USD0.5 billion ~368,000 jobs created ~112,000 jobs created ~66,000 jobs created ~0.4% of GDP In 2014 ~1.3% of GDP in 2014 ~1.5% of GDP in 2014 No. 1 FDI Highest Tax-payer Note: Investment in the forms of capital expenditures and operating expenditires Source: KPMG Independent Analysis AGM 2015 19
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