1H 2014 RESULTS

ANALYST BRIEFING

27 August 2014

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forecasts with due care and attention and consider all best estimates and assumptions when taken as a whole to be reasonable at the time of

preparing the presentation. However, the Company’s forecasts presented in this presentation may vary from actual financial results, and these

variations may be material and, accordingly, neither the Company nor its directors or officers can give any assurance that the forecast

performance in the forecasts or any forward-looking statement contained in this presentation will be achieved. Details of the forecasts and the

assumptions on which they are based are set out in the presentation.

This presentation may not be copied or otherwise reproduced without the written consent of TM.

Disclaimer

2

Performance Overview

Financial review

Operating highlights

Concluding remarks

3

Key Highlights 1H2014 vs. 1H2013

Continued Capex efficiency: Total capex/revenue ratio: 10.0% vs 12.5% in 1H2013

Reported EBIT grew 4.4% to RM655.7mn

Revenue grew 8.0% to RM5.44bn, driven by Internet & Other Telecommunications revenue

Reported PBT 24.9% higher, at RM589.0mn

Broadband customers grew by 4.6%

Strong overall performance

4

Key Operating Indicators

Key Highlights 2Q2014 vs. 2Q2013

Financial Performance

5

• Operating revenue increased by 8.0%, to RM2.82bn

• Reported EBIT increased by 2.8%, to RM338.9mn; Normalised EBIT increased by 4.7%, to RM344.8mn • Reported PATAMI higher 0.1%, to RM214.1mn; Normalised PATAMI lower by 12.4%, due to absence of HSBB tax incentive.

• Internet revenue surged 14.0% to RM726.9mn driven by total broadband growth and HyppTV content; Data revenue up by 6.3% to RM644.2mn

• UniFi customer base up 16.8% close to 674,000 customers; Overall broadband customer base grew by 4.6%

Performance Overview Financial review Operating highlights

Concluding remarks

6

Note: For Normalised EBIT and Normalised PATAMI refer Slides 8 and 9 •Excludes FX (Gain )/Loss

RMmn

Reported

2Q14 1Q14 % Change

QoQ 2Q13

% Change YoY

1H14 1H13 % Change

1H14 vs 1H13

Revenue 2,821.8 2,620.0 +7.7 2,613.8 +8.0 5,441.8 5,038.4 +8.0

Other Operating Income

30.5 50.2 -39.2 22.5 +35.6 80.7 53.2 +51.7

EBITDA 899.1 896.7 +0.3 860.6 +4.5 1,795.8 1,667.3 +7.7

Depn & Amort. 560.2 579.9 -3.4 530.8 +5.5 1,140.1 1,039.5 +9.7

EBIT 338.9 316.8 +7.0 329.8 +2.8 655.7 627.8 +4.4

Other Gains / (Loss) (1.2) (0.5) ->100.0 3.0 ->100.0 (1.7) 2.9 ->100.0

Net Finance Cost* 37.4 40.5 -7.7 56.4 -33.7 77.9 106.0 -26.5

FX (Gain) / Loss (7.1) (2.9) +>100.0 34.1 +>100.0 (10.0) 52.7 +>100.0

Profit Before Tax (PBT) 309.4 279.6 +10.7 241.9 +27.9 589.0 471.4 +24.9

PATAMI 214.1 210.6 +1.7 213.9 +0.1 424.7 427.1 -0.6

Normalised PATAMI 214.1 185.3 +15.5 244.5 -12.4 399.4 478.5 -16.5

Group Results 1H2014

7

Normalised EBIT

In RM mn 2Q14 1Q14 2Q13 1H14 1H13

Reported EBIT 338.9 316.8 329.8 655.7 627.8

Non Operational

FX (Gain)/Loss on International trade settlement 5.8 (1.2) (0.7) 4.6 1.3

Loss on Sale of Assets 0.1 0.2 0.2 0.3 0.3

Negative Goodwill on acquisition of a new subsidiary - (21.9) - (21.9) -

Normalised EBIT 344.8 293.9 329.3 638.7 629.4

Normalised EBIT Margin 12.1% 11.1% 12.5% 11.6% 12.4%

Reported EBIT Margin 11.9% 11.9% 12.5% 11.9% 12.3%

EBIT is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost EBIT Margin is calculated as percentage of EBIT against Total Revenue Normalised EBIT Margin is calculated as percentage of Normalised EBIT against Normalised Total Revenue (Operating Revenue + Oth. Operating Income – Loss on Sale of Assets – Negative Goodwill on acquisition of new subsidiary)

8

Higher EBIT due to higher revenue

Normalised PBT

In RM mn 2Q14 1Q14 2Q13 1H14 1H13

Reported PBT 309.4 279.6 241.9 589.0 471.4

Non Operational

FX (Gain)/Loss on International trade settlement 5.8 (1.2) (0.7) 4.6 1.3

Other (Gain)/Losses & Impairment* 1.3 0.7 (2.8) 2.0 (2.6)

Unrealised FX (Gain)/Loss on Long Term loans

(7.1) (2.9) 34.1 (10.0) 52.7

Negative Goodwill on acquisition of a new subsidiary - (21.9) - (21.9) -

Normalised PBT 309.4 254.3 272.5 563.7 522.8

9

* Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for sale) investments.

PBT grew by 7.8% due to higher revenue

10

Cost % of Revenue1

Note: The classification of cost is as per financial reporting

(Please refer to Appendix for quarterly details & breakdown)

Revenue = Operating Revenue + Other Operating Income 1

RM mn RM mn

Total Cost / Revenue ( %)

RM4,463.8

87.7%

RM4,866.8

88.1%

% of Revenue

Higher content and D&A cost

1H 2014 vs. 1H 2013 •Higher D&A due to accelerated

depreciation of USP assets, higher asset base •Higher Manpower cost due to higher staff benefits •Higher Bad Debt due to tighter credit treatment policy

103 110

3576

47

77

0

50

100

150

200

250

300

1H13 1H14Access Core Network Support System*

350268

184

158

97

119

0

100

200

300

400

500

600

700

1H13 1H14

Access Core Network Support System*

Capex/Revenue ratio at 10% Group Capital Expenditure

11 *Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)

HSBB Capex

Note : BAU – Business As Usual

RM mn

631

446

12.5

BAU Capex

185

3.7

Capex / Revenue ( %)

282

263

4.8

545

10.0

5.2 8.9

Total Capex

30 June 14 31 Dec 13 30 June 14 31 Dec 13Return on Invested Capital 7.21% 7.68% Gross Debt to EBITDA 1.89 1.92

Return on Equity 11.74% 14.80% Net Debt/EBITDA 1.12 1.04

Return on Assets 6.42% 6.27% Gross Debt/ Equity 0.96 0.90

Current Ratio 1.30 0.99 Net Debt/ Equity 0.55 0.55

WACC 7.03% 6.67% Net Assets/Share (sen) 203.4 199.5

30 June 14

Group Cash Flow & Key Financial Ratios

31 Dec 13

RM mn 1H14 1H13

Cash & cash equivalent at start 2,514.5 3,738.3

Cashflows from operating activities 822.6 620.5

Cashflows used-in investing activities (808.4) (1,098.5)

Capex 545.0 631.0

Cashflows from financing activities 490.3 187.6

Effect of exchange rate changes (0.3) (2.0)

Cash & cash equivalent at end 3,018.7 3,445.9

Free cash-flow (EBITDA – Capex) 1,250.8 1,036.3

1

Based on Normalised PATAMI 2

1

31 Dec 13 30 June 14

2

Based on Normalised EBIT 1

12

Performance Overview

Financial review

Operating highlights

Concluding remarks

13

RM mn

Group Total Revenue by Product

Data

RM mn

RM mn RM mn

Voice

Others*

Internet 1H14

1H13

RM mn

RM mn

RM5,442mn

RM5,038mn

*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)

Strong growth in Internet and Others; Non-voice revenue 68% of Group

+14.0%

+0.1%

14

-4.5%

+2.2%

-2.5% +13.3%

+6.4%

+6.3% +5.0% +28.1%

+34.5%

+29.1%

1,957 1,983 2,137 3,811 4,120

2Q13 1Q14 2Q14 1H13 1H14

Revenue growth across all lines of business

15

Global & Wholesale

Group Total Revenue by Line of Business

1H14 1H13 RM5,442mn RM5,038mn

* Others comprise revenue from VADS, Property Development, TM R&D, TMIM, UTSB and MKL

Retail

RM mn RM mn RM mn

Others*

Retail (C+S+E+G): 76% Retail (C+S+E+G): 75%

+9.2%

+7.7%

+9.0%

+15.7%

-3.7%

-5.1%

+8.1% +6.6% +9.5%

Retail 75%

Global & Wholesale

16%

Others 9%

Retail 76%

Global & Wholesale

15%

Others 9%

Net adds (in thousand)

In thousand

In thousand

+4.6%

+1.0%

Physical Highlights

Broadband Customer Growth

Fixed Line Customer Growth

4,370

2,109

Net adds (in thousand)

532

UniFi

16

*Call Usage Only ** Streamyx Net ARPU *** Blended ARPU

ARPU

577

+45 +44

2,153

4,377

In thousand

+30

607

2,184

+31

4,377

2,215

+31 +28

635

4,373

+16.8%

+3.2%

-1.2%

-0.4%

2,230

+15 +18

653

4,338

Continued growth in broadband customers

+21

2,251

+20

673

4,321

ARPU (RM) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Fixed Line (DEL)* 31 32 31 33 30 31

Streamyx Broadband** 80 82 83 85 86 85

UniFi*** 178 180 183 185 188 187

Performance Overview

Financial review

Operating highlights

Concluding remarks

17

18

2014 Game Changing Year: Towards Information and Innovation Exchange

Wireless service via 4G Innovative Products and Services

Attractive IPTV Channels and Packages

Key Takeaways

19

Financial Performance • TM Group operating revenue up by 8.0% vs. 1H2013 • Reported EBIT increased by 4.4%, to RM655.7mn • PBT increased by 24.9% to RM589.0mn

Broadband Champion

• UniFi remains strong: close to 674,000 customers as at 1H2014, more than 685,000 at present

• HSBB (Streamyx 4 & 8 Mbps) in non-Unifi areas continues to grow

• >1mn or 45% of total broadband customers are on HSBB

• Towards converged communications: TMgo, with the P1 transaction nearing completion

Shareholder Return • Interim dividend of 9.5 sen per share or approximately RM348.4mn to be paid to shareholders

Appendices

20

Normalised EBITDA

In RM mn 2Q14 1Q14 2Q13 1H14 1H13

Reported EBITDA 899.1 896.7 860.6 1,795.8 1,667.3

Non Operational

FX (Gain)/Loss on International trade settlement 5.8 (1.2) (0.7) 4.6 1.3

Loss on Sale of Assets 0.1 0.2 0.2 0.3 0.3

Negative Goodwill on acquisition of a new subsidiary - (21.9) - (21.9) -

Normalised EBITDA 905.0 873.8 860.1 1,778.8 1,668.9

Normalised EBITDA Margin 31.7% 33.0% 32.6% 32.3% 32.8%

Reported EBITDA Margin 31.5% 33.6% 32.6% 32.5% 32.7%

EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & Impairment). EBITDA Margin is calculated as percentage of EBITDA against Total Revenue Normalised EBITDA Margin is calculated as percentage of Normalised EBITDA against Normalised Total Revenue (Operating Revenue + Oth. Operating Income – Loss on Sale of Assets – Negative Goodwill on acquisition of a new subsidiary)

Higher EBITDA due to higher revenue

21

Normalised PATAMI

In RM mn 2Q14 1Q14 2Q13 1H14 1H13

Reported PATAMI 214.1 210.6 213.9 424.7 427.1

Non Operational

FX (Gain)/Loss on International trade settlement 5.8 (1.2) (0.7) 4.6 1.3

Other (Gain)/Losses & Impairment* 1.3 0.7 (2.8) 2.0 (2.6)

Unrealised FX (Gain)/Loss on Long Term loans

(7.1) (2.9) 34.1 (10.0) 52.7

Negative Goodwill on acquisition of a new subsidiary - (21.9) - (21.9) -

Normalised PATAMI** 214.1 185.3 244.5 399.4 478.5

22

* Comprise of fair value (FV) changes of FVTPL (FV through P&L) investment gain/loss on disposal for AFS (available for sale) investments. ** Current year tax charge without tax incentives: 1H14: RM145.6mil, 1H13: RM134.9mil Current year tax incentives: 1H14: Nil, 1H13: RM108.0mil (HSBB) tax incentive expired in Sept 13

Higher tax expense from absence of HSBB incentive

2Q14 1Q14 2Q13 1H14 1H13

Comments (1H2014 vs. 1H2013)

Operating Revenue (RM mil) 2,821.8 2,620.0 2,613.8 5,441.8 5,038.4 -

Other Operating Income (RM mil)

30.5 50.2 22.5 80.7 53.2 -

Direct Costs % 16.0 16.8 15.9 16.4 16.7 Higher content and interconnect outpayment RM mil. 455.8 447.8 417.9 903.6 847.9

Manpower % 22.1 22.4 21.2 22.3 21.8 Higher salaries, and staff benefits

RM mil. 631.6 599.4 558.1 1,231.0 1,109.3

Supplies & Materials % 6.5 5.7 6.7 6.1 6.2 Higher cable cost and lower cost of sale RM mil. 184.1 152.3 176.7 336.4 313.4

Bad & Doubtful Debts % 2.0 1.4 0.4 1.7 0.8 Higher due to tighter credit treatment policy RM mil. 57.6 36.4 9.7 94.0 41.1

Marketing Expenses % 3.3 3.0 3.9 3.2 3.6 Lower A&P spend

RM mil. 95.5 78.8 103.0 174.3 183.9

Maintenance Cost % 7.1 6.8 7.2 6.9 6.6 Higher customer projects and USP maintenance RM mil. 202.0 181.1 189.0 383.1 336.1

Other Operating Costs % 11.5 10.4 12.2 10.9 11.6 Higher electricity cost

RM mil. 326.6 277.7 321.3 604.3 592.6

Depreciation & Amortisation % 19.6 21.7 20.1 20.6 20.4 Higher due to accelerated depreciation of USP assets and higher asset base RM mil. 560.2 579.9 530.8 1,140.1 1,039.5

Total (RM mil) 2,513.4 2,353.4 2,306.5 4,866.8 4,463.8 -

Total (%) 88.1 88.1 87.5 88.1 87.7 -

Cost % of Revenue

23

7,136.7

162.6

8,076.7

4,865.0

1,151.0

1,999.5

51.4

9.8

15,376.0

5,722.2

1,847.7

440.9

2,514.9

918.7

5,770.5

3,172.8

1,590.2

1,007.5

(48.3)

14,572.0

852.3

15,376.0

Group Balance Sheet

24

As at 31 Dec 2013

7,458.0

159.4

8,837.6

5,570.6

1,245.3

1,952.1

49.3

20.3

16,455.0

6,958.2

2,594.6

481.6

3,026.8

855.2

5,366.1

2,694.2

1,563.8

1,108.1

1,592.1

14,002.7

860.2

16,455.0

Shareholders’ Funds

Non-Controlling Interests

Deferred & Long Term Liabilities

Long Term Borrowings

Deferred Tax

Deferred Income

Derivative financial liabilities

Other payables

Current Assets

Trade Receivables

Other Receivables

Cash & Bank Balances

Others

Current Liabilities

Trade and Other Payables

Short Term Borrowings

Others

Net Current Assets/(Liabilities)*

Property Plant & Equipment

Other Non-Current Assets

RM Million As at 30 June 2014

*Due to reclassification of long term debt due within the next 12 months to current liability (RM1.5bn)

RETAIL

25

RM mn +7.7%

+9.2%

Revenue by Product

1,983 2,137

1,957

3,811 4,120

+8.1%

163 150 160 317 310

266 265 308

513 573

32 26 33

51 59

2Q13 1Q14 2Q14 1H13 1H14

Others

Data

Voice

Others : Include internet

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination

Revenue by Product

RM mn +15.7%

+9.0%

388 449 412

786 837

+6.5%

GLOBAL & WHOLESALE

THANK YOU Any queries please email to : investor@tm.com.my

•Investor Relations • Level 11 (South Wing) •Menara TM •JlnPantaiBharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388