Company Presentation PT Solusi Tunas Pratama Tbk April 2018 - PowerPoint PPT Presentation

Company Presentation PT Solusi Tunas Pratama Tbk April 2018

Disclaimer These materials have been prepared by PT Solusi Tunas Pratama, Tbk (“ STP ” or the “Company”) and have not been independently verified. These materials are highly confidential and are being given solely for your information and for your use. By accepting these materials you agree that you will, and will cause your directors, officers, employees, agents and representatives to keep these materials strictly confidential and that these materials may not be (i) copied, photocopied or duplicated in any form by any means in whole or in part, or (ii) redistributed or passed on, directly or indirectly, to any other person in whole or in part, for any purpose. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials. Neither the Company nor any of its affiliates, financial and legal advisers or their respective directors, officers, employees and representatives accepts any liability whatsoever for any loss arising from any information presented or contained in these materials. The information presented or contained in these materials is as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. The Company has no obligation to update the materials. These materials contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” “outlook” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. THESE MATERIALS ARE FOR INFORMATION PURPOSES ONLY AND DO NOT CONSTITUTE OR FORM PART OF AN OFFER, SOLICITATION OR INVITATION TO BUY OR SUBSCRIBE FOR ANY SECURITIES OF THE COMPANY IN ANY JURISDICTION, NOR SHOULD THESE MATERIALS OR ANY PART OF THEM FORM THE BASIS OF, OR BE RELIED UPON IN ANY CONNECTION WITH, ANY CONTRACT, COMMITMENT OR INVESTMENT DECISION WHATSOEVER. 1

Table of Content Company Overview 3 Growth Strategy 14 Industry Overview 19 Appendix 25 2

Company Overview 3

Indonesia’s premier wireless data network infrastructure provider 6,333 towers and 562 microcell poles with 11,774 tenants ~89% of 2,847 km fiber revenue from optic network the top-4 telcos 1 38 indoor DAS 2017 EBITDA sites with 63 margin of 86.2% tenants Note: 1 Revenues from Telkom Group includes Telkomsel, Mitratel, and resellers with Telkomsel as the end customer 4

Key investment highlights 1 Prime provider of tower and fiber telecom infrastructure in Indonesia 2 Strong execution track record of both organic and inorganic growth Entrenched customer relationships underpinning significant high 3 quality contracted revenue backlog 4 Data network / LTE infrastructure services are our key differentiators 5 Consistent growth with industry-leading profitability metrics 6 Well-utilized balance sheet 7 Strong management team 5

Prime provider of tower and fiber telecom infrastructure in Indonesia 1 Tower, microcell and DAS Fiber 2,847 km Fiber Others 8% Java Medan 102 Sumatra 69% 23% Batam – Singapore 84 69% 6,333 Towers of towers in Java 1 Kalimantan (28% in Jakarta) 562 Microcells Sumatra Bandung Jatim – Kalsel 38 Distributed Banten – Lampung 465 483 Antenna Systems 71 Java Surabaya 68 Greater Jakarta 1,574 Land fiber asset Submarines fiber asset  First listed TowerCo in Indonesia to obtain license to lease out space on microcell poles (10-year contract) and possess fiber optics backbone to connect microcell poles supporting aggressive urban 3G / LTE rollout by mobile telecommunication operators  Comprehensive solution includes microcell poles, DAS and fiber optic network , with magnitude and proportion expected to increase  Potential new business opportunities for providing wholesale fiber connection to broadband and pay TV operators Note: 1 Java includes both Java and Bali Island as well as Greater Jakarta; Diagram refers to towers and microcells 6

Strong execution track record… 2 Towers Tenants Revenue (IDR Bn) 11,774 6,895 1,908 > 6.2x > 7.7x > 6.7x increase in increase in increase in towers tenants revenues 1,121 286 1,539 2010 2017 2010 2017 2010 2017 7

…of both organic and inorganic growth 2 Build-to-suits (“BTS”) towers 1 Acquired towers 418 3,642 329 244 1,274 238 116 521 493 50 35 Pre-2012 2012 2013 2014 2015 2016 2017 Pre-2012 2012 2013 2014 Note: 1 In gross tower additions p.a. Indonesia's third largest listed independent tower portfolio with 1,430 build-to-suit ("B2S") towers completed and 5,930 acquired towers 8

Entrenched customer relationships underpinning significant high quality 3 backlog 2017 Revenue breakdown (%) Tenancies expiry schedule 0 – 2 years Others 10.9% 11.3% 7+ years 6.6% 47.5% 41.1% 11,774 3 – 4 years Revenue 23.4% 20.5% Tenancies 5 – 6 years 18.2% 20.5%  Key customers are Indonesia’s four largest and most creditworthy mobile telecommunication operators contributing ~89% of revenue  89% of total tenancies are due for renewal from 2020 and beyond  Our lease rates are fully reflective of current market rates and c. 98% of our leases are IDR denominated (remaining 2% USD denominated) 9

Data network / LTE infrastructure services are our key differentiators 4 STP’s data network / LTE infra related products and services Wi-fi access IBS / Indoor Mobile point & Fiber to the Our MCP ISP services capabilities DAS backhaul hotspot home services leasing Telecom Telecom Telecom operators operators Customer Telecom Telecom Enterprise operators operators operators customers Ad agencies Cable TVs base ISP ISP ISP Increasing revenue contribution from non-conventional tower business (microcell poles + fiber) (Revenue contribution from microcell poles + fiber) 1  Upfront capital expenditure to build out backbone fiber network infrastructure has been completed 10.2% 10.2%  Lower payback period for microcell poles 7.5% 6.3%  Revenue contribution from microcell poles and fiber has been relatively stable in the last two years 2014 2015 2016 2017 Note: 1 Revenue on a pro-forma basis, taking into account full year effect of acquisition of 3,500 XL towers for 2014 and excluding revenues from Bakrie Telecom and Telkom Flexi 10

Consistent growth with industry-leading profitability metrics 5 Strong growth trajectory with industry-leading profitability metrics (IDR Bn) (IDR Bn) 2,000 90.0% 85.9% 86.3% 85.3% 112 85.3% 1,800 82.9% 1,600 112 1,400 80.0% 1,200 99 1,908 1,821 1,000 1,674 89 99 1,646 800 1,554 1,422 89 70.0% 600 973 751 400 789 604 200 0 60.0% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Revenue Flexi EBITDA Flexi EBITDA Margin Consistently growing EBITDA over the last four years and remain steady in 4Q17 (IDR Bn) Exclusion of XL towers Telkom Flexi acquisition 28 28 28 28 25 25 417 25 412 415 400 395 396 25 390 373 366 358 350 349 216 197 195 180 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 EBITDA Flexi 11

Well-utilized balance sheet 6 4Q17 net debt build-up Prudent risk management policy IDR Bn  FX hedges in place to mitigate volatility in currency and interest rate 4.9x (0.3x) (0.2x) 4.4x 7,852  74% of all outstanding debt is hedged against interest rate 7,082 (490) fluctuation risk 2 (280)  53% of all outstanding debt is USD denominated 2 which is 100% hedged against FX risk for principal and interest payments Unhedged FX Hedges Cash and Cash Net Debt Gross Debt Equivalents # Multiple of LQA EBITDA Deleveraging profile Debt maturity profile (as % of total outstanding) 2 Net debt / LQA EBITDA 1 (x) 76.5% 9.6% 5.5x 4.8% 4.8% 3.4% 4.4x 1.0% 2014 2017 2018 2019 2020 2021 2022 2023 Notes: 1 Net debt refers to gross debt stated at hedge rate less cash; 2 Debt has been refinanced with a new loan in March 2018 with balloon payment by 2023, hedge and maturity profiles are for new debt. 12