Quarterly Financial Report

Grameenphone Ltd

4th Quarter, 2018

Michael Patrick Foley, CEO

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1

Disclaimer

The following presentation is being made only to, and is only directed

at, persons to whom such presentation may lawfully be

communicated (’relevant persons’). Any person who is not a relevant

person should not act or rely on this presentation or any of its

contents. Information in the following presentation relating to the

price at which relevant investments have been bought or sold in the

past or the yield on such investments cannot be relied upon as a

guide to the future performance of such investments.

This presentation does not constitute an offering of securities or

otherwise constitute an invitation or inducement to any person to

underwrite, subscribe for or otherwise acquire securities in

Grameenphone Ltd. The release, publication or distribution of this

presentation in certain jurisdictions may be restricted by law, and

therefore persons in such jurisdictions into which this presentation is

released, published or distributed should inform themselves about,

and observe, such restrictions.

Highlights 2018

4th Quarter 2018

• 34.7 Bn Revenue (+7.7% YoY)

• 62.3%** EBITDA Margin

• 11.5 Bn profit after taxes

• 6.36 Mn 4G sim replacement

Full Year 2018

• 132.8 Bn Revenue (+3.4%)

• BDT 80.7 Bn EBITDA (+5.8%)

• 46.3%* SIM market share

• 6.6% Voice Revenue Growth

• 84.2 Bn contribution to exchequer

• Final Dividend 155% of PuC

*BTRC published data as of 31 Dec 2018

**As per IAS 18

Q4 2018

QUALITY SUBSCRIBER ACQUISITION

• Network expansion drive

• Strengthened distribution

• 2.9 Mn 013 sub-base

• 4.5 Mn active users on MyGP

STABLE VOICE AND DATA PRICES

• Flexiplan price revision

• Monthly data pack revision

• 350 Min @BDT 199 voice pack

• 2GB @ BDT 38 data pack

Strong business performance driven by excellent execution

in the market

Q4 2018

Reached 5.5 Mn

4G users*

5000+ 4G

sites*

10.7 Mn 4G

devices*

37.1 Mn data

subscribers* 20%+ data

traffic on 4G

*As of 31 December 2018 Q4 2018

• On 10 Feb’19, BTRC

declared GP as an SMP

• On 18 Feb’19, we received 2

directives with 4 do’s and

don'ts and 20 areas under

consideration by BTRC

• GP is further pursuing this

matter with policy makers

SMP Regulations Tower Sharing

Licensing QoS BTRC Audit

• On 17 Dec’18 , BTRC

invited GP and the Auditor

in a tri-party meeting to

discuss selected areas of

findings.

• The next course of actions

will be decided in the

upcoming Commission

meeting.

• We are expecting a few

more discussions leading to

the closure of this audit.

• Four Licenses have been

awarded on 1st Nov ’18.

• The industry is in dialogue

with BTRC for a smooth

transition

• GP is running commercial

negotiations with licensees.

• On 11Nov ’18, BTRC has

made the QoS guidelines

public on their website.

• QoS parameters have been

set for only MNOs, PSTN and

Broadband service providers;

no parameters have been set

for NTTN operators as

requested.

• A letter with our concerns

was sent to BTRC on 10

Dec’18, requesting to re-

evaluate.

Q4 2018 – Regulatory Landscape

Priorities Going Forward

7

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Quarterly Financial Report

Grameenphone Ltd

4th Quarter, 2018

Karl Erik Broten, CFO

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8

11.3% Growth in Subscription & Traffic

Revenue*

Q4 2018 - Highlights

EBITDA growth with strong margins

12.7% Capex/Sales***

6.72 Earnings Per Share

62.3% EBITDA Margin**

*Revenues generated by own subscription (excludes interconnection)

**As per IAS 18

***Capex excluding license fees; Capex/sales = moving average last 4 quarters

12.2% normalized subscription & traffic revenue growth, FY 8.3%*

*Normalized for contract change impact for handset and content

**Daily revenues generated by own subscription (excludes interconnection) Q4 2018

Revenue (BDT Bn) and Growth (YoY)

32.2

31.2

32.6

34.3 34.7

8.0%

2.0% 0.5%

3.4%

7.7%

-2.0%

3.0%

8.0%

13.0%

18.0%

23.0%

28.0%

29.5

30.5

31.5

32.5

33.5

34.5

35.5

36.5

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2018

132.8

3.4%

• 9.9% normalized total revenue growth for Q4, FY 6.3%*

• 11.9% growth in voice revenue driven by growth in APPM and decline in outgoing minutes

• 11.3% growth in subscriber base

DSTR** (BDT Mn) and Growth (YoY)

317 319 328

348 353

12.4%

5.7% 3.3%

7.6% 11.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

250

270

290

310

330

350

370

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

337

2018

7.0%

18.9% data subscriber and 80.4% volume growth

Q4 2018 *Revenues generated by own subscription (includes interconnection)

** Minimum 150 KB usage within last 3 months

• 25.1% YoY data revenue growth driven by growth in

data users and data ARPU

Data Revenue (BDT Bn) and % of Service Revenue*

5.6 5.8 6.1 6.6

7.0

17.9% 18.7% 19.0% 19.6%

20.6%

15.0%

17.0%

19.0%

21.0%

23.0%

25.0%

27.0%

29.0%

31.0%

33.0%

35.0%

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

• Network expansion and competitive data offers

driving user growth and experience

Active Data Users** (Mn) and % of Sub-base

31.2 32.2

34.5

36.3 37.1

47.7% 47.8% 49.9% 50.9% 51%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

23.0

25.0

27.0

29.0

31.0

33.0

35.0

37.0

39.0

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

25.5

2018

19.5%

+18.1% YoY

2.0% service ARPU drop and 3.6% data ARPU growth from last

quarter

Q4 2018

Service ARPU, AMPU and APPM

• 2.4% service ARPU decline YoY

• Negative impact from VAS and local and international IC

161 155 156 161 157

247 246 245 232

212

0.65 0.63 0.64 0.69 0.74

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

ARPU (BDT) AMPU APPM (BDT)

2018

0.67

157

234

Data ARPU, AMBPU and APPMB

• 5.2% ARPU growth YoY led by growth in usage

• APPMB declined by 30.6% YoY mainly due to competitive offers

60 60 59 61 63

0.07 0.07 0.06 0.05 0.05

807 851

986

1149 1224

0

200

400

600

800

1000

1200

1400

0

20

40

60

80

100

120

140

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

ARPU (BDT) APPMB (BDT) AMBPU

2018

0.06

57

1002

-2.4% YoY

BDT 2.3 Bn normalized EBITDA uplift

Q4 2018

Opex (BDT Bn) and Margin**

• One-off positive effect of BDT 344 Mn in Q4’18

*EBITDA before other items

**As per IAS 18

***Normalized for one-off items

• 3.1 pp EBITDA margin*** improvement

11.0 11.6

11.1 11.2 11.0

34.1% 36.9% 34.0% 31.80% 33.80%

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

Opex BDT Bn Opex/Sales

0.3%

YoY

1.6%

QoQ

13.9%

YoY

1.7%

QoQ

133

2018

133

2018

2018

34.0%

+7.3% YoY

44.92

+6.5% YoY

+0.3% YoY

-1.6% QoQ

+0.3% YoY

-1.6% QoQ

EBITDA* (BDT Bn) and Margin**

19.0

18.0

19.8

21.3 21.6

58.8%

57.6%

60.6% 61.9% 62.30%

30.0%

80.0%

130.0%

180.0%

230.0%

16.0

17.0

18.0

19.0

20.0

21.0

22.0

23.0

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

EBITDA BDT Bn EBITDA Margin %

2018

60.7%

80.7

+5.8% YoY

+13.9% YoY

+1.7% QoQ

Many e-mails…sorry. On slide

13 :” One-off positive effect of

BDT 344 Mn” we should state

“One-off positive net effect of

BDT xxx Mn in Q4 and xxxMn for

FY”

Investment mainly on 2G, 3G, LTE site rollout and network modernization

Q4 2018

• 429 new 4G sites rollout along with network

modernization

• 404 2G and 497 3G sites addition

• Total number of sites stand at 2G -14,521;

3G – 14,687; 4G – 5009

• Investment to continue to provide superior network

experience

4.7

3.8

4.5 4.6

3.9

11.3% 10.7% 11.6% 13.50% 12.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

*Capex excluding license fees

Capex/sales = moving average last 4 quarters

*Capex (BDT Bn) and Capex/Sales%

2018

12.7%

16.9

6.0 6.4

10.8

8.9 9.1

18.5% 20.5%

33.2% 25.90% 26.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

NPAT BDT Bn NPAT Margin

2018

26.5%

Normalized earnings growth of 22.6%

Q4 2018

NPAT (BDT Bn) and Margin*

*On reported basis

51.8%

YoY

2.0%

QoQ

51.9%

YoY

2.1%

QoQ

35.2

12.8%

+51.8% YoY

+2.0% QoQ

2018

Earnings Per Share (BDT)

4.42 4.74

8.00

6.58 6.72

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

26.04 +51.8%

YoY 2.0% QoQ

Also we should have a couple of

bullet points on slide 15 on the

big jump in NPAT and EPS. We

had this one year ago on the

same slide :” Net one-off

negative adjustment of BDT 2.0

Bn”, so this together with the

higher EBITDA should be

highlighted. K

BDT 17.7 Bn OCF and Net debt/EBITDA of 0.03

Q4 2018

*OCF (BDT Bn) and OCF/Sales%

*OCF equals EBITDA minus Capex (excluding license) on a reported basis

**Net Debt = Short term debt + Long term debt - Cash and Cash equivalents

12 months rolling EBITDA

14.3 14.1 15.2

16.6 17.7

44.2% 45.2% 46.5% 48.30% 50.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0

5

10

15

20

Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

Net debt (BDT Bn) and Net debt/EBITDA**

1.8

3.4

9.2

14.2

2.7

0.02 0.04

0.12 0.18

0.03

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

-3.0

-1.0

1.0

3.0

5.0

7.0

9.0

11.0

13.0

15.0

Q4'17 Q1'18 Q2'18 Q3'18 Q4'182018

63.6

47.8%

Recommended 155% of PuC cash final dividend for 2018

Q4 2018

• Consistent high dividend payout

• Shareholders as of the Record Date 17 February 2019 will be entitled

• Subject to approval during 22nd AGM scheduled for 23rd April 2019

10.89

14.67 14.59

16.68

10.72

14.00

16.00

14.00

16.50

10.50

2013 2014 2015 2016 2017(Interim)

EPS DPS 129%

109%96%

105%98%

2013 2014 2015 2016 2017(Interim)

Earnings and Dividend per Share (BDT) Payout Ratio

109%

96%

105%

101%

108%

2014 2015 2016 2017 2018

14.67 14.59

16.68

20.31

26.04

16.00

14.00

17.50

20.50

28.00

2014 2015 2016 2017 2018

EPS DPS

Investment & Contribution to the Bangladesh Economy

27

15.2

19.3 21.1

14.5

34

2014 2015 2016 2017 2018

Investment BDT Bn

17.14 Bn 4G License

Fees

• 16.9 Bn Capex in 2018 mainly for new 2G, 3G, LTE sites,

modernization

• 84.2 Bn (63.4% of revenues) contributed to exchequer in

the form of taxes, VAT, duties, *4G license & tech neutrality

58.9

51.1

58.6

61.8

71.5

2014 2015 2016 2017 2018

Contribution to National Exchequer BDT Bn

12.7 Bn*

84.2

• Adoption using the modified

retrospective approach

• No significant impact in recognition of

revenue

• Recognition of Contract cost as an

impact of deferment of customer

acquisition cost

• Opening balance adjustment of

Retained earnings of BDT 2.6 Bn

Revenue from contracts with customers

Leases

• Preliminary identification of areas of

potential impact

• Most significant impact areas are BTS

sites, site sharing contracts,

Grameenphone Center/office space,

house rent etc.

• Implementation will be reflected from 1

Jan'19 using the modified retrospective

approach

Accounting Standards under IFRS

15 16

Summary

Q4 2018

New Number Series 013

BAU

Strong business performance driven by excellent execution in the market

EBITDA growth with strong margins

Quality subscriber acquisition and superior network experience will continue to drive growth

4th Quarter 2018

• Healthy growth despite challenges from external factors

• Growth in revenue with stability in voice and data prices

• Quality acquisition from new number series 013

• Earnings impact from one-off items

Full Year 2018

• Strong business performance with healthy returns despite challenges

• Growth in voice and data revenue driven by investment in 2G, 3G & 4G

• Healthy earnings growth with high dividend payout

• Our focus remains on superior network experience for customers

Q&A

21

Q&A