presentation to shareholders/ investors -...

0

TM InternationalPresentation to Shareholders/Investors

April 2008

PRIVATE AND CONFIDENTIAL

NOT FOR DISTRIBUTION IN THE UNITED STATES

1

Disclaimer This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any securities and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract or commitment or investment decision.

This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed to have agreed and confirmed to Telekom Malaysia Berhad and TM International Berhad (collectively, the “Company”) that: (a) you agree not to trade in any securities of the Company or its respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain absolute confidentiality regarding the information disclosed in this presentation until the public disclosure of such information, or unless you have been otherwise notified by the Company.

Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. The Company and its affiliates and related bodies corporate, and their respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or negligence and consequential damages) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it.

This presentation contains projections and “forward-looking statements” relating to the Company’s business and the sectors in which the Company operates. These forward-looking statements include statements relating to the Company’s performance. These statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It is important to note that actual results could differ materially from those anticipated in these forward looking statements. The Company does not undertake to inform you of any matters or information which may come to light or be brought to the Company’s attention after the date hereof.

The forecasts and other forward-looking statements set out in this presentation are based on a number of estimates and assumptions that are subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to change and in many cases outside the control of the Company. The directors and officers of the Company believe that they have prepared the 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 the Company.

This presentation is not an offer for sale of securities.

2

Presentation team

Dato’ Yusof Annuar Yaacob Executive Director / Group Chief Financial Officer

Azwan Khan Osman Khan Group Chief Strategy Officer

Dato’ Jamaludin Ibrahim MD, President and Group Chief Executive Officer

Feiruz Ikhwan Abdul Malek Head of Capital Markets, Investor Relations

3

Agenda

1 TM International Strengths

2 Asset Update

3 Way Forward

4

TM International strengths

Experienced management team

with extensive industry experience

8

Strong brand equity in respective

markets

5

Synergies driven from portfolio of operating entities

4

Ability to deliver enhanced

technology and innovative products

and services

7 Strong competitive positions providing

growth potential within the South and

Southeast Asian region

2

Extensive network coverage and

effective distribution network

6

Unique portfolio of controlled assets

1

Strong track record of value creation

3

TMI Berhad

5

Unique portfolio of controlled assets

TM’s presence

Legend:

Subscribers (‘000) 7,202Ownership (%) 100%

Subscribers (‘000) 1,535Ownership (%) 29.7%2

Subscribers (‘000) 7,183Ownership (%) 70.0%

Subscribers (‘000) 15,469Ownership (%) 83.8%2



Subscribers (‘000) 30Ownership (%) 49.0%

Subscribers (‘000) 311Ownership (%) 100%

Note:

1 Subscribers as of 31 Dec 072 Ownership post Acquisition from Khazanah and TM

…with close to 40 million subscribers in key high growth markets1

1

6

Strong competitive positions providing growth potential within the South and Southeast Asian region

Revenue growth (RM billion)3

EBITDA growth (RM billion)3

CAGR = 27.8%

CAGR = 48.3%

Source: Frost & SullivanNote:

1 For Punjab circle2 For Karnataka circle3 Aggregate financials post Pre-Listing Restructuring and Acquisition exercise

Market positions (Dec 2007)

Country Asset Market position

#3

#2

Market penetration

37.3%

#1 38.1%

#2 85.9%

23.4%

#21/#52 20.5%

#3 17.3%

#3 122.5%

2

Malaysia

Indonesia

India

Sri Lanka

Bangladesh

Singapore

Cambodia

Market share

16.6%

20.4%

53.4%

30.9%

22%1/10%2

12.7%

27.3%

6.18.6

10.0

2005 2006 2007

2.0

3.74.4

2005 2006 2007

7

4,677

18,042

Total investment to date ¹ Current TMI stake valuation ²

3,6225,280


606

5,073


40

1,447


659

1,430


182

612


Strong track record of value creation

Celcom (RM m) 4

3.9x

Note:

1 As of 31 December 20072 Equity valuation of TMI stake by IFA (Public Investment Bank Berhad)3 Pre Acquisition roll-up4 Post Pre-Listing Restructuring5 Market cap as of 8 April 2008

XL (RM m) 3

Dialog (RM m)

TMIB (RM m)

Spice (RM m)

TMIC (RM m)

3

36.2x

2.2x

8.4x 3.4xCurrent market value= RM3,424m5

Current market value= RM748m5

Current market value= RM3,294m5

1.5x

Total portfolio value creation in excess of RM22 billion

8

Experienced management team

Dato’ Jamaludin Ibrahim• MD, President and Group CEO, TM International

• 11 years Telecom experience

• CEO Maxis 1998-2007, CEO Digital Equipment 1993-97, 12 years IBM Malaysia

Dato’ Yusof AnnuarYaacob

• Executive Director / Group Chief Financial Officer, TM International

• 2005-2008, CEO TM International

• Chartered accountant, SG Warburg, ING Barings, Merrill Lynch

Dato’ Sri MohammedShazalli Ramly

• Chief Executive Officer, Celcom since 2005

• CEO nTV7 1998-2005, Lever brothers (1987-93), Malaysian Tobacco Company (MTC) and British American Tobacco (BAT) (1993 – 1996)

Hasnul Suhaimi• Chief Executive Officer, Excelcomindo since 2006

• CEO Indosat 2003-2006, President Director IM3, Telkomsel, Indocel

Hans Wijayasuriya• Chief Executive Officer, Dialog since 1997

• 15 years experience in Mobile Communications

Azwan Khan Osman Khan• Group Chief Strategy Officer, TM International

• 2005- 2008 SVP Corporate Strategy & Development, Celcom

• Boston Consulting Group (2000 – 2005); Shell Malaysia (1993 – 2000)

8

9

Agenda


2 Asset Update

3 Way Forward

10

1,222 1,231 1,271 1,307 1,348

4,5605,157

4Q06 1Q07 2Q07 3Q07 4Q07 FY06 FY07

Celcom — good progress, with further upside

Strategic priorities and key initiativesSolid revenue growth with over 1.1m net adds in 2007

Profitability in upward trend

♦ Strengthening the base

♦ Fixing key areas– channels

– price/packaging

– billing

– time to market

♦ Segmentation alignment across entire value chain– sharpening focus

♦ Cost reduction– network

♦ Proactive positioning for MNP+18% +4%+17%

(RM m, %)

(RM m)

+10% +3% +13%14%

Industry growth

519 542 563 585 610

1,9702,300

42.5%

44.0% 44.3%44.8% 45.2%

44.6%

43.2%

4Q06 1Q07 2Q07 3Q07 4Q07 FY06 FY07EBITDA EBITDA margin

11

387 447 457 442 481

9,141 9,653 9,74312,369

14,988

21%16%

17%17%16%

4Q06 1Q07 2Q07 3Q07 4Q07

Sub

scrib

ers

('000

)

Postpaid Prepaid Blended churn

9,528 10,100 10,200

12,81015,469

XL — focus on operational excellence; showing results

Strategic priorities and key initiativesThe minute factory model

Operational performance

♦ Perfecting the minute factory model– lean operations

– capital efficiency

♦ Regional approach– West, Jabodetabek, Central, and East

♦ Segmentation sharpening

♦ Towers monetization

ARPU: Rp49k ARPU: Rp51k ARPU: Rp51k ARPU: Rp54k

Financial performance(Rp. bn) Revenue CAGR = 45%

EBITDA CAGR = 42%+62% +21%

814946

585

36489 78117

233

1Q07 2Q07 3Q07 4Q07Rev (Rp)/min MOU/sub

39%

Industry revenue CAGR

3,059

4,682

6,460

1,7352,554

3,509

2005 2006 2007Revenue EBITDA

12

Mobile Non-mobile

Dialog — stable performance, ready for competition

Strategic priorities and key initiativesOperational performance

Financial performance (Rs m)

♦ Consolidate market position and brand leadership

♦ Multi-product / brand management

♦ Position for competition through bundling / quadruple play

♦ Billing convergence

♦ Coverage leadership

♦ Eastern province greenfield markets

+37% +7%

Revenue EBITDA

25,14931,129

1,388

530

2006 2007

25,679

32,517

13,362 14,329

(589)

382

2006 2007

13,744 13,740

Mobile growth = 24%

Non-mobile growth = 162%

Mobile growth = 7%

Non-mobile growth = -254%

484 486 519 523 569

3,6903,4412,621 2,879 3,137

0.5% 0.5% 0.5%0.6%0.6%

4Q06 1Q07 2Q07 3Q07 4Q07

Sub

scrib

ers

('000

)


3,105 3,365 3,656 3,964 4,259

22%

Industry growth

13

9,276

13,14014,390

4,4315,974

4,235

2005 2006 2007Revenue EBITDA

TMIB — profit challenge, highly competitive and regulated environment

Strategic priorities and key initiativesOperational performance

♦ Strengthen management team

♦ Business strategy review

♦ Operational efficiencies focus

♦ Review distribution

♦ Work to improve regulatory environment

♦ Resolve stakeholders’ issues

+25% +3%

Financial performance (BDT millions)Revenue CAGR = 25%EBITDA CAGR = -2%

152 166 135 121

5,610 6,092 6,588

125

6,881 7,062

1.25% 3.38%

10.86%

4.49% 3.04%

4Q06 1Q07 2Q07 3Q07 4Q07

Sub

scrib

ers

('000

)


5,762 6,258 6,723 7,006 7,183

19%

Industry revenue CAGR

14

Spice – performing well but need to address scaleKey circle statistics Financial performance

Historical subscriber growth trend (m)

8906792004 GDP per capita (US$)22%10%Spice market share (Dec 07)

INR302INR316Spice blended ARPU (Dec 07)

37,50529%15.352.7

Karnataka Punjab

22,3112004 GDP (US$m)44%Mobile penetration10.6Total circle subs (Dec 07, m)24.32001 Population (m)

Source: CMIE website (population); COAI; AUSPI (subs); CMIE Monthly Review of Economy (GDP)

Source: COAI; AUSPI

Strategic priorities and key initiatives

♦ Obtain spectrum

♦ New circles roll-out

♦ Further expansion

(INR m, %)

5.610.2

15.34.7

7.5

10.6

2005 2006 2007Karnataka Punjab

10.3

17.7

25.9

CAGR = 58%

Revenue CAGR = 41%EBITDA CAGR = -35%

57%

Industry revenue growth

6,803

9,579

1,654 2,23623.3%24.3%

2006 (Jul 05 - Jun 06) 2007 (Jan 07 - Dec 07)

Revenue EBITDAEBITDA margin

15

Spice – new circles

Attractive macro outlook

Historical subscriber growth trend (m)

7.8 11.3 15.36.3

11.2

18.1

6.1

11.8

18.1

1.9

3.7

5.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2005 2006 2007Delhi Maharashtra Andhra Pradesh Haryana

22.1

38.0

57.2

CAGR: 61%

Spice’s 4 new licenses cover a population of over 207 million people

Source: COAI; AUSPI

1,488

22,912

111%

15.3

13.8Delhi

920

93,909

19%

18.1

96.8Maharashtra

647

51,155

24%

18.1

75.7

Andhra Pradesh Haryana

9312004 GDP per capita (US$)

20,9602004 GDP (US$m)

27%Mobile penetration

5.7Total circle subs (Dec 07, m)

21.12001 Population (m)

Source: CMIE website (population); COAI; AUSPI (subs); CMIE Monthly Review of Economy (GDP)

Existing Circles

New Circles

HaryanaDelhi

Karnataka

Punjab

Andhra Pradesh

Maharashtra

New circles are contiguous with existing circles

16

Agenda


2 Asset Update

3 Way Forward

17

Unlocking TMI portfolio synergies

Value creation pillars

Unlocking value of TMI OpCos

M&A / partnerships

18

1– Compensation structure– Performance measurement

Creating a different culture

Unlocking the value of TMI portfolio — demerger benefits

2– Flexibility– Speed– Tailored approach (capital structure, KPIs, etc.)

Lean and nimble HQ

3– Management– Board– Strategies– KPIs

Focus

19

Moving from phase I, footprint building, to phase II, twin engines of growth

Increase emphasis on organic growth

Selective acquisitions and

partnerships

Portfolio synergies and efficiencies

High quality workforce

♦ Building strong competitive positions through effective branding and disciplined marketing

♦ Network coverage and quality♦ Innovative product offerings and services♦ Strengthening local management teams

♦ South and Southeast Asia♦ Opportunistic strategic acquisitions on business combinations♦ Synergies♦ Partnerships with operators with complementary capabilities

1

2

3

4♦ Talent management – recruit, develop and retain top talent in the region♦ Improve performance and compensation structure♦ Training and development♦ Mobility

♦ Corporate center to drive interco synergies♦ Procurement synergies♦ Best practice sharing

20

To conclude…

♦ Attractive portfolio of assets and compelling strengths

♦ General performance is encouraging with areas of progress– Celcom and XL continued momentum– Revamping Bangladesh– Strengthening Dialog– Resolving Spice

♦ Moving to phase II, twin engines of growth– Unlocking TMI portfolio synergies– Unlocking OpCos value

The management team is excited with the prospects of TMI

presentation to shareholders/ investors -...

Documents