Q2 2010

analyst briefing

Henrik Clausen, CEOStefan Carlsson, CFO

20th July 2010

Q2 in brief

2

good revenue momentum, especially for postpaid, mobile internet & mobile broadband

smart devices enabler for mobile internet & entry into new segments

improving opex/revenue trend; delivering on targeted cost savings

solid EBITDA despite increased handset bundles

strong cash-flow generation; upholding shareholder returns

3

3.5% q-o-q revenue growth

43.3% EBITDA margin

flat PAT q-o-q

RM445 mil OpCF

35 sen/share net second interim dividend

Q2 financial highlights

Q210 Q-on-Q vs Q110 Y-o-Y vs Q209

Customer base 8.1 mil +2.5% (7.9 mil) +12.5% (7.2mil)

Revenue RM1,335 mil +3.5% (RM1,290 mil) +10.8% (RM1,205 mil)

EBITDA RM578 mil +0.3% (RM576 mil) +10.7% (RM522 mil)

EBITDA margin 43.3% -1.3pp (44.6%) 0.0pp (43.3%)

PAT RM278 mil +0.0% (RM278 mil) +18.8% (RM234 mil)

Operating cash-flow RM445 mil -9.4% (RM491 mil) +15.6% (RM385 mil)

Q2 key numbers

4

Balancing acquisition & CRM focus

Q109 Q209 Q309 Q409 Q110 Q210

+2% total subs +2% prepaid

+4% postpaid

7155 7230 7393 7720 7947 8104

5990 6054 6193 6485 6677 6779

1165 1176 1200 1235 1270 1326

added 157k new customers

maintaining prepaid & improving postpaid momentum aided by handset bundles

strong traction in mobile internet & mobile broadband

postpaid (‘000)prepaid (‘000)

*broadband customers included in prepaid & postpaid subs respectively

5

+12% total subs +12% prepaid

+13% postpaid

Q209 Q309 Q409 Q110 Q210

mobile broadband subs (‘000)

mobile internet subs (‘000)

77

43

18160

460

2102

2721

5

+30% total internet +58% mobile broadhand

+29% mobile internet

122

5 178 503 2179 2843

Q109 Q209 Q309 Q409 Q110 Q210 Q109 Q209 Q309 Q409 Q110 Q210 Q109 Q209 Q309 Q409 Q110 Q210

Prepaid stable amidst increasing competition

price pressure affecting ARPM & ARPU; partially offset by prepaid mobile internet uptake

added 102k new customers; impacted by higher rotational churn

27 64 139 292 192 102 162 158 173 176 178 192 50 49 49 48 48 47

-47% net adds

+22% MOU

+8% MOU

-4% ARPU

-2% ARPU

+59% net adds

29 28 26 25 24 22

prepaid net adds (‘000) prepaid MOU (mins) prepaid ARPU (RM)

ARPM (sen/min)

6

Q109 Q209 Q309 Q409 Q110 Q210 Q109 Q209 Q309 Q409 Q110 Q210 Q109 Q209 Q309 Q409 Q110 Q210

Strong postpaid momentum

higher usage & ARPU driven by smart device plans/bundles

added 55k new customers, focus on customer quality

continued reduction in credit losses & churn

66 11 24 35 35 55 476 480 516 508 496 504 84 82 86 83 82 83

+409% net adds

+60% net adds

+5% MOU

+2% MOU

+1% ARPU

+1% ARPU

12 12 11 11 11 12

postpaid net adds (‘000) postpaid MOU (mins) postpaid ARPU (RM)

ARPM (sen/min)

7

Q2 revenue up on postpaid, mobile internet & mobile broadband

Q109 Q209 Q309 Q409 Q110 Q210

q-o-q, postpaid revenue grew by 16%; maintaining prepaid revenue from Q1

postpaid revenue growth enhanced by handset bundles & mobile internet/mobile broadband

1218 1205 1239 1248 1290 1335

+11% total revenue

+3% total revenue

total revenue (RM mil)

Q109 Q209 Q309 Q409 Q110 Q210

mobile postpaid (RM mil)mobile prepaid (RM mil)

1204 1188 1226 1230 1274 1326

302 303 319 321 328 379

902 885 907 909 946 947

+7% prepaid+25% postpaid

+0% prepaid+16% postpaid

8

74.9% 74.5% 74.0% 73.9% 74.3% 71.4%

% prepaid/revenue

25.1% 25.5% 26.0% 26.1% 25.7% 28.6%

% postpaid/revenue

Q109 Q209 Q309 Q409 Q110 Q210

+5% data revenue

data revenue (RM mil)

Q109 Q209 Q309 Q409 Q110 Q210

VAS (RM mil)messaging (RM mil)

45 43 41 44 38 35

172 162 166 166 173 168

Robust data revenue growth

more customers on the 3G/HSPA network & increased focus on smart devices/data plans driving growth

~35% 3G/HSPA network population coverage

246 234 241 249 262 274

+17% data revenue

20.4% 19.7% 19.7% 20.3% 20.6% 20.7%

% of mobile revenue

+145% mobile internet & mobile broadband+4% messaging

-19% VAS

+39% mobile internet & mobile broadband-3% messaging

-8% VAS

9

29 29 34 39 51 71

mobile internet & mobile broadband (RM mil)

Q109 Q209 Q309 Q409 Q110 Q210

ebitda (RM mil)

Q109 Q209 Q309 Q409 Q110 Q210

275 234 244 246 278 278

Solid EBITDA despite increased handset bundles

~2pp impact on EBITDA margin from handset bundles in Q2

PAT in-line with EBITDA development

544 522 528 531 576 578

44.6% 43.3% 42.7% 42.6% 44.6% 43.3%

ebitda margin pat (RM mil) dep & amort (RM mil)

+0% EBITDA

+11% EBITDA

+0% PAT

+19% PAT

10

165 191 188 187 191 193

Opex/revenue trend improving

11

operational efficiency program delivering targeted savings

margin pressure from increased handset bundles & price competition

• increased efficiencies seen especially in O&M, staff and S&M costs

Q109 Q209 Q309 Q409 Q110 Q210

COGS (%/rev) mobile internet /mobile broadband costs (%/rev)

31.6% 31.9% 32.2% 30.8% 29.7% 28.5%

22.6% 22.9% 23.1% 24.3% 23.6% 26.2%

1.3% 2.0% 2.1% 2.4% 2.3% 2.5%

opex (%/rev)

53

O&M (%rev)

others (% rev)

Q109 Q209 Q309 Q409 Q110 Q210

staff (%rev)

S&M (%rev)

9.8% 10.8% 10.5% 10.1% 9.8% 9.4%

7.1% 7.1% 7.5% 5.8% 5.7% 5.8%

6.0% 5.8% 5.7% 5.6% 4.9% 5.0%

10.1% 10.3% 9.9% 9.9% 9.7% 9.7%

Q109 Q209 Q309 Q409 Q110 Q210

capex (RM mil)

Q109 Q209 Q309 Q409 Q110 Q210

398 385 321 303 491 445

12.0% 11.3% 16.7% 18.3% 6.5% 10.0%

% capex/revenue operating cash-flow (ebitda – capex) (RM mil)

Rapid 3G/HSPA deployment to capture growth

3G/HSPA network population coverage to increase substantially in 2H 2010

selective 2G capacity & quality investments

higher capex in 2H 2010

above expected OpCF margin YTD

146 137 207 228 85 133

12

Capital management update

cumulative net payout ~RM6.4bil

(all figures denote net dividend/share in sen)

13

# annualised ; * OpCF = EBITDA – Capex, # based on RM23.56 share price

* Q210 has not taken into account payment of 2nd interim dividend declared

2005 2006 2007 2008 2009# 2010*

interim finalcapital return special dividend

75 140.5 181 188 178 70

42 73 78 75

38.5 58 53

75 60 50 57 103 70

# 2009 – commence quarterly dividend payment in Q409;

•#2009 dividend = 1st interim 49 sen + 2nd interim 54 sen

•2010 dividend = 1st interim = 35 sen + 2nd interim 35 sen

(RM mil) Q210 Q110 2009 2008

Interest-bearing debts 1,022.5 1,122.2 921.7 397.8

Cash & equivalents 680.4 682.5 430.1 331.3

#ROE 80.3% 80.7% 65.8% 60.1%

#Net debt-to-EBITDA 0.15x 0.19x 0.23x 0.03x

#Net debt-to Equity 0.25x 0.32x 0.32x 0.04x

*#OpCF/share (sen) 228.8 252.7 180.9 164.4

#OpCF yield 9.7% 10.7% 7.7% 7.0%

Capital Structure 20:80 25:75 25:75 3:97

#Dividend yield 5.9% 5.9% 7.6% 8.0%

Payout ratio 98.0% 98.0% 138.3% 128.1%

14

revision of MTR & FTR rates

spectrum re-farming

Regulatory update

execute well on profitable growth initiatives, especially mobile internet & mobile broadband

take operational efficiency to the next level

maintain network investment focus on mobile internet, capacity & quality

enhance cash-flow; ensure attractive shareholders returns

15

Medium term priorities

2010 outlook maintained

16

industry revenue growth ~5%; DiGi aims to be above

stable EBITDA margin; cost savings reducing impact from increased handset bundles

capex around ‘09 level

OpCF above ‘09 level (> 28% OpCFmargin)

Appendices

HY2010 HY2009 Y-o-Y vs 2009

Customer base 8.1 mil 7.2 mil +12.5%

Revenue RM2,625 mil RM2,423 mil +8.3%

EBITDA RM1,155 mil RM1,065 mil +8.4%

EBITDA margin 44.0% 43.9% +0.1pp

PAT RM557 mil RM510 mil +9.2%

Operating cash-flow RM937 mil RM782 mil +19.8%

YTD 2010 key numbers

18

HY2010 HY2009 Y-o-Y vs 2009

Prepaid ARPU RM47 RM50 -6.0%

Postpaid ARPU RM83 RM83 0%

Blended ARPU RM53 RM55 -3.7%

Prepaid Revenue RM1,893 mil RM1,787 mil +5.9%

Postpaid Revenue RM707 mil RM605 mil +16.8%

Data Revenue RM536 mil RM480 mil +11.6%

YTD 2010 key numbers (cont’d)

19

Q109 Q209 Q309 Q409 Q110 Q210 Q109 Q209 Q309 Q409 Q110 Q210 Q109 Q209 Q309 Q409 Q110 Q210

212 210 228 228 227 240 56 54 55 54 53 53 23 22 21 20 20 19

+14% MOU

+6% MOU

-2% ARPU

0% ARPU

-14% ARPM

-5% ARPM

blended MOU (mins) blended ARPU (RM) blended ARPM (sen/min)

Blended MOU, ARPU & ARPM

20

(RM mil) Q210 Q110 Q409 Q309 Q209 Q109EBITDA 578.4 575.8 531.2 528.4 521.5 543.5

Depreciation & Amortisation

(192.7) (190.6) (186.8) (188.3) (190.9) (165.1)

EBIT 385.7 385.2 344.4 340.1 330.6 378.4

Net finance (costs)/income– finance costs

– interest income

PBT

Taxation

PAT

EPS (sen)

(7.7)(12.9)

5.2

378.0

(99.6)

278.4

35.8

(6.7)(10.2)

3.5

378.5

(100.2)

278.3

35.8

(7.5)(11.3)

3.8

336.9

(90.5)

246.4

31.7

(6.9)(10.1)

3.2

333.2

(89.1)

244.1

31.4

(6.7)(9.4)

2.7

323.9

(89.4)

234.5

30.2

(5.9)(9.8)

3.9

372.5

(97.0)

275.5

35.4

Reported Profit & Loss

21

(RM mil) Q210 Q110 Q409 Q309 Q209 Q109COGS- cost of materials

363.656.5

314.615.5

313.919.8

294.912.9

283.013.9

279.115.5

- traffic charges 307.1 299.1 294.1 282.0 269.1 263.6

OPEX- sales & marketing

• advertising & promotions

• commissions

398.9125.7

42.7

83.0

401.8126.4

41.0

85.4

403.1125.6

40.5

85.1

416.4130.7

47.8

82.9

402.0121.5

42.2

79.3

402.1119.8

41.6

78.2

- staff costs 66.8 63.2 69.4 70.1 70.5 73.4

- operations & maintenance 77.5 86.9 84.5 92.6 85.0 86.3

- other expenses• USP fund and license fees

• bad & doubtful debts provision

• others

TOTAL

128.974.6

14.3

40.0

762.5

125.372.3

18.0

35.0

716.4

123.669.2

18.4

36.0

717.0

123.065.5

25.5

32.0

711.3

125.066.9

15.6

42.5

685.0

122.664.0

11.0

47.6

681.2

COGS & Opex breakdown

22

(RM mil) Q210 Q110 Q409 Q309 Q209 Q109Cash at start 682.5 430.2 617.7 398.1 593.8 331.3

Cash-flow from operations 529.4 494.3 480.1 453.6 414.0 445.1

Changes in working capital (31.0) 59.1 89.7 51.3 35.5 (314.1)

Cash-flow used in investing activities

- Capex

(128.4)

(133.2)

(81.2)

(84.6)

(223.9)

(227.9)

(204.3)

(207.5)

(133.1)

(136.9)

(142.3)

(146.1)

Cash-flow used in financing activities

(372.1) (219.9) (533.4) (81.0) (512.1) 273.8

Net change in cash (2.1) 252.3 (187.5) 219.6 (195.7) 262.5

Cash at end 680.4 682.5 430.2 617.7 398.1 593.8

Operational cash-flow (EBITDA – Capex)

445.2 491.2 303.3 320.9 384.6 397.4

Cash-flow

23

This presentation and the following discussion may contain forward looking statements by DiGi.Com Berhad (“DiGi”) related to financial trends for future periods.

Some of the statements contained in this presentation or arising from this discussion which are not of historical facts are statements of future expectations with respect to financial conditions, results of operations and businesses, and related plans and objectives. Such forward looking statements are based on DiGi’s current views and assumptions including, but not limited to, prevailing economic and market conditions and currently available information. These statements involve known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not and, should not be construed, as a representation as to future performance or achievements of DiGi. In particular, such statements should not be regarded as a forecast or projection of future performance of DiGi. It should be noted that the actual performance or achievements of DiGi may vary significantly from such statements.

Disclaimer

thank you

see you next quarter