Dialog Axiata PLCSri Lanka's Premier Connectivity Provider

Q4 2017/FY 2017 Results

an axiata company

divi/doc title/ author initials -dd-mm-yy 2company confidential

Dialog Group Performance

Dialog Axiata Company Performance

Subsidiary Performance

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Group Concluded FY 2017 Delivering Growth Across all Key Parameters• FY 2017 Group Revenue at Rs94.2Bn, growth of 9% YTD• FY 2017 Group EBITDA at Rs33.9n, growth of 16% YTD; Group EBITDA Margin at 36.0%, growth of 2.3pp YTD• FY 2017 Group PAT grew 19% YTD to reach Rs10.8Bn

Q4 2017 Performance Impacted by Moderate Data Revenue Growth and Increased Marketing Spend• Q4 Group Revenue at Rs24.8Bn, growth moderated to 2% QoQ: Up 9% YoY• Q4 Group EBITDA at Rs9.1Bn declined by 3% QoQ: Up 23% YoY• Q4 Group PAT at Rs3.2Bn declined by 15% QoQ : Up >100% YoY

FY 2017 Capex Directed Towards Expanding Data Network• 4G and Fixed LTE population coverage reached 43% and 53% respectively• Capex of Rs27.3Bn – up 18% YTD; Capex Intensity of 29%

All Business Units Delivered Strong Performance• Dialog Mobile continued to grow underpinned by Data adoption – Data Growth of 39% YTD and 1% QoQ• Dialog Broadband Networks (DBN) – Fourth consecutive quarter of positive PAT (Rs1.8Bn for FY 2017)• Dialog Television (DTV) – Aggressive cost initiatives driving EBITDA growth of 49% YTD

Strong Subscriber Growth • Mobile subscriber base of over 12.7Mn – up by 8% YTD• TV subscriber base of 981k, 142k net adds during the year

Cash dividend of Forty Six Cents (Rs0.46) per Share Totaling Rs3.7Bn• 35% DPO Recommended for Shareholder Approval

Driving Digital Transformation• Narrowband Internet of Things (NB-IoT) – First to launch in South Asia, enables seamless connectivity amongst devices • USD 15Mn Digital Innovation Fund Launched – Support emerging companies in the field of digital based services

Dialog Posts PAT of Rs10.8Bn up 19% Driven by Revenue Growth (9%) & Cost ManagementCash Dividend of 46 Cents per Share Recommended for Shareholder Approval

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Group Financial Summary

All key financial indicators improved significantly YTD with revenue growing at 9% whilst EBITDA and PAT grew 16% and 19% respectively

QoQ performance in Q4 - impacted by moderate growth in data traffic and increase in cost; Q4 Profitability further impacted by increase in depreciation and net finance cost

Rs Mn FY 2017 YTD Q4 17 QoQ YoY

Revenue 94,196 9% 24,801 2% 9%

EBITDA 33,866 16% 9,115 -3% 23%

PAT 10,785 19% 3,171 -15% >100%

EBITDA Margin 36.0% 2.3pp 36.8% -2.0pp 4.2pp

PAT Margin 11.4% 1.0pp 12.8% -2.6pp 7.3pp

ROIC 15.4% 0.0pp 15.4% +0.4pp 0.0pp

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Group Revenue Continued its Growth Trajectory, Recording a Growth of 9% YTDand 2% QoQ

24,801 24,218 22,775

94,196 86,745

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

+2%

+9% +9%

Strong Growth in Mobile Revenue YTD up 10%, with Mobile Data Revenue growing 39% YTD driven byincreased smartphone penetration and 4G conversion; QoQ growth moderated to 1% due to constraineddata traffic growth

International Revenue declined 7% YTD and 5% QoQ due to significant reduction in termination minutes,partly mitigated by growth in wholesale business

Aggressive customer acquisition and reconnections driving Fixed Home Broadband Revenue growth of 11%QoQ and 53% YTD

Television Revenue growth challenged due to declining postpaid ARPU amidst affordability pressure

Growth Across Key Business Segments Driving Revenue Performance

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(Rs Mn)

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9,115 9,400 7,422

33,86629,212

36.8% 38.8%32.6%

36.0% 33.7%25.0%

35.0%

45.0%

55.0%

65.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

EBITDA EBITDA Margin

+23%

-3%

PAT Growth of 19% YTD; PAT Margin up +1pp; QoQ Q4 PAT Impacted by Drop in EBITDA and Higher Non Operating Costs

3,171 3,721

1,251

10,785 9,041

12.8%15.4%

5.5%11.4% 10.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

-

600

1,200

1,800

2,400

3,000

3,600

4,200

4,800

5,400

6,000

6,600

7,200

7,800

8,400

9,000

9,600

10,200

10,800

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

PAT PAT Margin

+153%

-15%

Q4 17

Rs15,686MnTotal Cost

2.8%

As % of revenue

25.2%

14.6%

11.5%

9.3%

-0.2%

63.2%

Bad Debt

Overheads

Staff Cost

Network Cost

Sales & Marketing

Direct Expenses

Q3 17

Rs14,818Mn

As % of revenue

25.1%

12.7%

12.7%

8.4%

0.8%

1.5%

61.2%

Q4 16

Rs15,353Mn

As % of revenue

27.8%

15.0%

12.9%

8.1%

1.4%

2.2%

67.4%

YoY

-1%

6%

-3%

26%

-114%

2.2%

31%

QoQ

3%

18%

-7%

13%

97%

5.8%

-123%

Growth in Profitability Delivered via Revenue Growth and Cost Efficiencies;EBITDA Margin Improved by 2.3pp YTD

(Rs Mn)

Total Cost to Revenue Ratio Improved by 2.3pp Driven by Disciplined Cost ManagementRealised Cost Saving of Over Rs4Bn YTD

+16%(Rs Mn)

+19%

FY 2017

Rs60,330Mn

As % of revenue

25.6%

14.2%

12.6%

8.4%

0.7%

2.5%

64.0%

YTD

0%

8%

10%

15%

-40%

4.9%

15%

Strong YTD EBITDA Growth and Improved EBITDA Margin; QoQ Q4 EBITDA Impacted by Higher Cost

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10,188 6,608

10,431

27,323 23,173

-

5,00 0

10,0 00

15,0 00

20,0 00

25,0 00

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

41% 27% 46% 29% 27%

(3,371)

1,393

(4,644)

(269) 83 -14%6%

-20%

-0.3% 0.1%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

(7,000)

(5,000)

(3,000)

(1,000)

1,000

3,000

5,000

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

OFCF As % of revenue

Focused Capex Investments to Support Rapid Growth in Data - Rs27.3Bn Investedin FY 2017, Up 18%; Capex Intensity at 29%

* Capex excluding CPE (Customer Premises Equipment) investments

Capex Investments Directed Towards Expanding Data Network; Mobile 4G LTE and Fixed LTE PoP Coverage Reached 43% and 53%

-2%

+54%

CapexIntensity

(Rs Mn)

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

Negative OFCF due to Increased Capex Investments in Q4

+27%

>-100%

(Rs Mn)

+18%

>-100%

ROIC Maintained at 15.4% in FY 2017

16.2 19.2 13.6 19.6 23.2 27.3

14.2%

10.9%10.3%

12.3%

15.4%15.4%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

0.00%

500.00%

1000.00%

1500.00%

2000.00%

2500.00%

3000.00%

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Capex* ROIC

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Group’s Net Debt to EBITDA Remained Healthy Below 0.90x with ImprovedProfitability and Working Capital Management

(Rs Mn)31 Dec 17 30 Sep 17 31 Dec 16

Gross Debt 33,470 33,417 32,562

Net Debt 28,185 29,468 26,152

Cash and Cash Equivalents 5,285 3,949 6,410

Gross Debt / Equity (x) 0.54 0.57 0.60

Gross Debt/ EBITDA (x) 0.99 1.01 1.11

Net Debt/ EBITDA (x) 0.83 0.89 0.90

Group continued to maintain a structurally strong balance sheet, with Net Debt to EBITDA maintained at 0.83x

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Proposed Dividend Payout of 35% - Dividend Yield of 3.5%, TSR of 27.5% in 2017Dividend Payout Increased from 39 Cents in FY 2016 to 46 Cents Per Share in FY 2017

▪ The Board of Directors of Dialog Axiata PLC, resolved to propose for consideration by the Shareholders of the Company,a cash dividend to ordinary shareholders amounting to forty six cents (46 cents) per share totaling to Rs3.7Bn

▪ Dividend payout increased on a per share basis from 39 cents in FY 2016 to 46 cents in FY 2017;✓ Considering investment requirements to serve the nation’s demand for Mobile, Fixed, Broadband and Digital

Television services✓ Dividend payout ratio of 35% of FY2017 Group Net Profits✓ Dividend yield of 3.5% based on a closing share price of Rs13.0 as at 29th December 2017

▪ The dates of the AGM and the dividend payment will be notified in due course

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2.6

3.2

3.7

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2012 2013 2014 2015 2016 2017

(Rs Bn)

33c/share

29c/share

13c/share

32c/share

39c/share

46c/share

Dividend Payout Translating to an Attractive Dividend Per Share (DPS) & Dividend Yield

Total Shareholder Returns (TSR) at 27.5% in 2017, Relative to Total Market Return (based on ASPI) of 2.7%

9.6%12.4%

51.0%

-18.6%

1.1%

27.5%

2012 2013 2014 2015 2016 2017

Total Shareholder Return (TSR) Trend (2012-17)

35%35%50%35%*45%45%

3.5%3.0%1.0%3.2%4.0%

Dividend payout (DPO)

Dividend Yield (DY)

9* DPO on one-off tax adjusted Profit in FY 2014

3.7%

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Dialog Group Performance

Dialog Axiata Company Performance

Subsidiary Performance

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10,572 11,008 11,158 11,350 11,498

1,253 1,260 1,271 1,314 1,299

Q4 16 Q1 17 Q2 17 Q3 17 Q4 170

2,0 00

4,0 00

6,0 00

8,0 00

10, 000

12, 000

Postpaid Subs Prepaid Subs

20,171 20,055 19,007

77,59672,951

15, 000

25, 000

35, 000

45, 000

55, 000

65, 000

75, 000

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

(Rs Mn) +6%

+1%

Q4 PAT Impacted by Increase in Depreciation, Net Finance Cost and Forex Losses

+6%

Dialog Axiata PLC (Company)Revenue Growth of 6% Driven by Subscriber Growth (up 8%) and Data (up 39%)

Aggressive Subscriber Acquisition led to the Growth in Subscribers

12,26811,825 12,429 12,66412,797

Total subs growth +1% QoQ; +8% YTD

Postpaid subs growth -1% QoQ; +4% YTD

Prepaid subs growth +1% QoQ; +9% YTD

Mobile MOU and ARPU Declined QoQ while Data ARPUs Remained Stable

393 375 383 398 392

128 123

120 122 118 -3%-5%

2%4%

-2%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

-

50

100

150

200

250

300

350

400

450

Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Blended ARPU Blended MOU Blended ARPU Growth

FY 2017 YTD Q4 2017 QoQ YoY

EBITDA 27,001 +8% 7,441 +1% +21%

PAT 10,501 +2% 3,103 -6% +60%

EBITDA Margin % 34.8% 0.5pp 36.9% +0.1pp +4.4pp

PAT Margin % 13.5% -0.6pp 15.4% -1.2pp +5.2pp

Strong Data Growth Driving Increase in Revenue Albeit Moderated in Q4

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Dialog Group Performance

Dialog Axiata Company Performance

Subsidiary Performance

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FY 2017 YTD Q4 2017 QoQ YoY

EBITDA 572 +49% 195 -4% >+100%

PAT -736 -14% -103 +2% +65%

EBITDA Margin % +9.5% +3.2pp +13.1% -0.4pp +8.2pp

PAT Margin % -12.3% -1.7pp -6.9% +0.1pp +12.9pp

Dialog TelevisionYTD EBITDA up 49%, Driven by Stable Revenues and Aggressive Cost Focus

1,488 1,499 1,508

6,002 6,085

1,0 00

2,0 00

3,0 00

4,0 00

5,0 00

6,0 00

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

(Rs Mn)

-1%

-1%

TV Revenue Remained Stable Despite Downward Pressure on Postpaid ARPU due to High Taxation (49%) and Resulting

Affordability Pressures; Subscription Revenue up 2% QoQ and 3% YTD

EBITDA Improved by 49% YTD on the back of Aggressive Cost Initiatives albeit Net Loss Increased by 14% YTD on the back of Higher Depreciation and Forex Losses

431 426 427 421 435

408 440 484 505546

Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

Post paid Pre Paid

Prepaid Subscriber Base Continued to Register Strong Growth of 34% YTD and 8% QoQ

Total subs growth +6% QoQ; +17% YTDPostpaid subs growth +3% QoQ; +1% YTDPrepaid subs growth +8% QoQ; +34% YTD

911867839926 981

(in ‘000s)

-1%

(Rs Mn)

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3,260 3,1662,563

12,367

9,323

1,0 00

3,0 00

5,0 00

7,0 00

9,0 00

11, 000

13, 000

Q4 17 Q3 17 Q4 16 FY 2017 FY 2016

Dialog Broadband Networks – Fixed BusinessRevenue Growth Underpinned by Home Broadband (HBB) on the back of Network CoverageEnhancements and Aggressive Market Capture

(Rs Mn)

+27%

+3%

Strong Growth in HBB Revenue Driving YTD and QoQ Revenue Improvement

+33%

(Rs Mn) FY 2017 YTD Q4 2017 QoQ YoY

EBITDA 6,930 +74% 1,859 -3% +52%

PAT 1,769 >+100% 562 -12% >+100%

EBITDA Margin % 56.0% +13.3pp 57.0% -3.6pp +9.3pp

PAT Margin % 14.3% +18.4pp 17.2% -3.0pp +29.8pp

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Thank You

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