Quarter 1 2006 Analyst Teleconference Morten Lundal, CEO Johan - PowerPoint PPT Presentation

Quarter 1 2006 Analyst Teleconference Morten Lundal, CEO Johan Dennelind, CFO 3 May 2006

Q106 – steady progress STATEMENTS FROM APRIL 5th Q106 Q405 Lower subscriber growth and +6% +15% lower net adds 292,000 608,000 RM51 prepaid RM55 prepaid Lower ARPU RM96 postpaid RM99 postpaid Positive but lower revenue growth +4% +11% EBITDA margins showing strength 45.3% 43.6% PAT consequently also strong RM185 mil RM157 mil 2

Q106 – key numbers show strength Q106 Q-on-Q vs Q405 Y-o-Y vs Q105 Customer base 5.09 mil + 6% (4.79 mil) +47% (3.46 mil) Revenue RM861 mil +4% (RM828 mil) + 38% (RM626 mil) EBITDA RM390 mil +8% (RM361 mil) +42% (RM275 mil) EBITDA margin 45.3 % +1.7pp (43.6%) +1.3pp (44.0%) PAT RM185 mil +18% (RM157 mil) +219% (RM58 mil) EPS 24.6 sen 20.9 sen 7.7 sen 3

Competitive market Market dynamics • competitive in all aspects • strong emphasis on events for share of voice/mind • higher levels of activities in prepaid vis-à-vis postpaid DiGi focus • acquisition driven mainly by VAS, not price • segmented approach to events/acquisitions/promotions • targeted approach to sectors with low market share • pushing a relevant data strategy • revitalising the propositions for corporates Value • innovative propositions • simple • best value 4

Recent innovations by DiGi 5

DiGi - perspectives going forward � Competitive performance in Q1 and aiming to keep up the speed � Expecting intensified competition � Fully committed to the mobile broadband future � Proactive capital management initiatives – increase shareholders’ value 6

key numbers

Subscribers surpassed 5 million mark Custome rs +47% +6% • 292k net additions • Key drivers: 5086 4795 promotions, enhanced data 4187 strategy, targeted 3765 3461 segment marketing ? 24.6% 3239 and coverage 23.9% expansion 22.8% 22.2% 21.9% • Expects stable SIM card market share Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 Customers (‘000) Market share 8

Good growth pace for pre- and postpaid +44% Prepaid Subsc ribe rs +89% Postpaid +6% Prepaid +8% Postpaid • Prepaid growth pace satisfactory 382 • Postpaid growth 353 slowed down 307 3901 4704 4442 241 202 3880 172 • Market responsive 3525 3259 to proposition: 3067 lowest barriers, highest value, simplicity and innovation Q4 Q1 Q2 Q3 Q4 Q1 Q4 2004 Q1 2004 Q2 2005 Q3 2005 Q4 2005 Q1 2006 2004 2005 2005 2005 2005 2006 Postpaid (‘000) Prepaid (‘000) Active users (‘000) 9

AMPU decline marginally 0% Prepaid -18% Postpaid AMPU -1% Blended -5% Prepaid -2% Postpaid • Traditionally slower -4% Blended Q1 drive down AMPU 499 465 471 439 389 380 • Outgoing minutes lower due to fewer days 175 169 170 163 162 165 • Postpaid AMPU is stable (reflection of 146 145 150 156 152 145 quality of new customers) Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 Prepaid (mins) Postpaid (mins) Blended (mins) 10

Stable price but lower usage = lower ARPU 0% Prepaid -32% Postpaid ARPU -4% Blended -7% Prepaid -3% Postpaid • Blended ARPU -7% Blended decline due to shorter quarter and new access price 143 142 128 111 99 96 • Postpaid ARPU stable despite festive period 58 59 59 58 56 54 54 51 54 54 55 51 Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 Prepaid (RM) Postpaid (RM) Blended (RM) 11

Data revenue – higher non-SMS contributions +56% Da ta re ve nue s +10% • SMS still key 147 contributor 134 • Seeing higher 118 contributions from 101 non-SMS 94 86 applications • EDGE expansion position to capture new trend 16.3% 16.7% 16.0% 17.0% 17.3% 18.2% Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 Data Revenue (RM mil) % of Mobile Revenue 12

Revenue growth still solid +38% Re ve nue +4% • Strong growth 861 momentum 828 continue but at 745 slower pace 686 626 606 • New customers pushed revenue to new high • Continuous improvement in 22.5% 18.4% 18.0% 20.0% 21.1% ? revenue market share 17.7% Q4 Q1 Q2 Q3 Q4 Q1 Q4 2004 2004 2005 2005 Q1 2004 Q2 2005 Q3 2005 2005 Q4 2005 2005 Q1 2006 2006 Revenue (RM mil) Estimated Mobile Revenue Market share (%) 13

Steady contributions from mobile revenue +43% +4% Mobile re ve nue s 540 571 640 700 784 817 • 43% growth in mobile revenue 106 98 • Mobile revenue now 90 85 95% of total 78 70 • New access price impacting mobile revenue negatively 460 483 546 599 676 700 Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 Postpaid (RM mil) Others (RM mil) Prepaid (RM mil) 14

EBITDA growing strongly E BIT DA +42% +8% • Strong incremental EBITDA Q4 to Q1 268 275 297 327 361 390 • Driven by higher revenue and lower A&P 44.2% 44.0% 43.2% 43.9% 43.6% 45.3% Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 EBITDA (RM mil) EBITDA Margin (%) 15

EBITDA margin strengthens EBITDA margin Q405 43.6% E BIT DA ma rg in +0.9% (Cost of materials @ 2.5%) • Relatively slower +0.2% (Traffic charges @ 19.6%) sales & marketing activities this quarter +1.4% (Sales & Marketing @ 12.1 %) -0.2% (Staff costs @ 5.2%) • Cost of materials affected by -1.1% (Ops & Maint @ 6.6%) seasonality +0.5% (Other expenses @ 8.7%) 45.3% EBITDA margin Q106 @ denotes % of revenue in Q106 16

Strong growth in PAT PAT (RM mil) Q106 Q405 % chg • Stronger PAT due to EBITDA 390.0 360.8 +8.1 higher revenue and EBITDA growth Depreciation & Amortization (138.0) (145.4) +5.1 EBIT 252.0 215.4 +17.0 • Depreciation Net finance income 5.3 3.2 +65.6 normalised after (3.7 ) (3.7) 0.0 - Finance costs accelerated effect 9.0 6.9 +30.4 last year - Interest income PBT 257.3 218.6 +17.7 • PAT and EPS Taxation (72.6) (62.0) -17.1 increase 18% q-o-q PAT 184.7 156.6 +17.9 EPS (sen) 24.6 20.9 17

Roll out program on track Ca pe x (RM mil) 333 • Network investment 249 and expansion on track 182 • Coverage now at 82% nationwide 126 106 • 51% capex on coverage; 19% on 66 capacity and balance on maintenance Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2005 2005 2005 2006 18

High cash generation capacity F re e c a sh- flow (RM mil) Q106 Q405 Cash at start 1,183.0 888.9 • Strong operational cash Cash-flow from operations 383.7 339.6 flow Changes in working capital (37.3) 279.2 Cash-flow used in investing activities (116.5) (324.7) • 1st capital (125.6) (333.0) - Capex repayment payout Cash-flow used in financing activities 0.0 0.0 in Q2 Net change in cash 229.9 294.1 • Cash flow Cash at end 1,412.9 1,183.0 expected to remain strong Operational cash-flow (EBITDA – Capex) 264.4 27.8 19

Strong balance sheet (RM mil) 31 Mar 2006 31 Dec 2005 Ba la nc e she e t Property, plant & equipment 2,690.7 2,701.4 • Restated in line Intangible Assets 110.1 111.8 with adoption of Other Non- current Assets 13.4 13.4 new/revised FRSs Current Assets 1,639.2 1,405.6 - Cash and its equivalent 1,412.9 1,183.0 • Computer software 4,453.4 4,232.2 as intangible assets and Financed by:- leasehold land as Shareholders’ Funds 2,432.8 2,248.1 prepaid lease Non-current Liabilities 677.6 681.5 payments - Long-term borrowings 300.0 300.0 Current Liabilities 1,343.0 1,302.6 • Net current assets - Short-term borrowings 0.0 0.0 strengthen further 4,453.4 4,232.2 20

Improvements in key ratios Ke y ra tios Q106 Q405 ROE (%) 7.6% 7.0% • Current ratio ROCE (%) 8.1% 7.4% improving Current ratio (x) 1.2x 1.1x Net debt-to-equity (%) Net cash Net cash • Strong cash flow Net debt-to-EBITDA (x) Net cash Net cash parameters Interest Coverage NA NA FCF/share 35.3 sen 3.7 sen FCF yield (%)* 3.1% 0.3% Capex/Sales (%) 14.6% 40.3% * Based on share price of RM11.30 (closing on 2 May 2006) 21

updates and outlook