Financial results presentation Six months ended 30 September 2002 7 - PowerPoint PPT Presentation

Financial results presentation Six months ended 30 September 2002 7 November 2002

Forward looking statements - important note The following presentation contains forward looking statements by the management of Singapore Telecommunications Limited ("SingTel"), relating to financial trends for future periods, compared to the results for previous periods. Some of the statements contained in this presentation that are not historical facts are statements of future expectations with respect to the financial conditions, results of operations and businesses, and related plans and objectives. Forward looking information is based on management's current views and assumptions including, but not limited to, prevailing economic and market conditions. These statements involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those in the statements as originally made. Such statements are not, and should not be construed as a representation as to future performance of SingTel. In particular, such targets should not be regarded as a forecast or projection of future performance of SingTel. It should be noted that the actual performance of SingTel may vary significantly from such targets. “$” means Singapore dollars unless otherwise indicated.

Asia’s leading communications company Lee Hsien Yang President & Chief Executive Officer

H1 FY03: Strong Optus results � Good progress towards full year goals Group performance NPAT Contribution $1,111m $549m on track pre-goodwill from associates Strong free Operational SingTel – cashflow $577m 53% cashflow EBITDA margin engine generation maintained Strong Optus – challenger Capex:revenue 38% 15% operational focused on returns reduced EBITDA growth Regional mobile – Mobile Strong earnings 152% 142% earnings driver customers growth* * Pre-exceptionals and tax

Positioned for faster growth � Medium term objective: double digit NPAT growth (pre-goodwill) 64% of proportionate revenues Revenue mix: bias to growth outside Singapore 54 Others 54 Data & mobile revenue as Belgacom 4% 9% 36 % of total* Regional SingTel 32 30 31 30 mobile 36% 13% Optus TCNZ SBC Deutsche Telstra Telecom Verizon SingTel 39% Telekom France * Based on last reported full year results except SingTel (6 months to Sep 02)

Year on year comparison of statutory results � Group numbers impacted by Optus consolidation Statutory results 6 months 6 months Increase/ (S$M) to Sep 2002 to Sep 2001 (Decrease) % Operating revenue 4,924 2,495 97% Operational EBITDA 1,850 1,342 38% Operational EBITDA margin 38% 54% N/m EBITDA* 2,568 1,683 53% Profit after tax & exceptional items - before goodwill 1,111 1,209 (8%) - after goodwill 792 1,159 (32%) * Operational EBITDA + IDA compensation + share of results of associated & joint venture companies

Sequential comparison of Group numbers shows bottom line improvement Statutory results 3 months 3 months Increase/ (S$M) to Sep 2002 to Jun 2002 (Decrease) % Operating revenue 2,462 2,461 0.1% Operational EBITDA 924 926 (0.2%) Operational EBITDA margin 38% 38% N/m EBITDA* 1,396 1,172 19% Profit after tax & exceptional items - before goodwill 577 534 8% - after goodwill 415 377 10% * Operational EBITDA + IDA compensation + share of results of associated & joint venture companies

SingTel (ex-Optus): year on year comparison SingTel (ex-Optus) 6 months 6 months Increase/ (S$m) to Sep 2002 to Sep 2001 (Decrease) % Operating revenue 2,379 2,495 (4.7%) Operating expenses (1,173) (1,131) (3.5%) Operational EBITDA* 1,262 1,342 (5.9%) Operational EBITDA margin 53% 54% N/m Capex (accrual basis) 163 1,694 (90%) *Operational EBITDA + IDA compensation + share of results of associated & joint venture companies

SingTel (ex-Optus): revenue trends International PDPN 2.5% Data revenue 63% circuits revenues Declining Revenue 1.4% Mobile revenue 8.5% churn growth International Market share International 84% 17% telephone retained revenues

Healthy margins and cashflow generation at SingPost Strong operational 46% Mail volume (million units) EBITDA margin** 412 398 398 + $173M $172M $162M Modest capex 2% to sales ratio** Revenue* Good cash generation H1 FY01 H1 FY02 H1 FY03 * Revenue – after intercompany eliminations ** Operational EBITDA margin & capex ratio for financial year ended 31 Mar 02 – before intercompany eliminations (source: SingPost statutory accounts for 31 Mar 02)

SingTel (ex-Optus): cost controls maintain margins � No. 1 brand in Singapore 53% operational EBITDA margin Strong free cash flow generation S$m 4% Total opex Operating cash* 1,033 Dividends from associates 100 13% Traffic expenses Capex (cash basis – excl C2C) (185) Capex (cash basis – C2C) (371) 5% Staff costs 577 Free cash flow** * After tax and before interest ** Before interest, dividends and investments - includes impact of C2C

Optus: clear and sustainable turnaround � Growth momentum sustained - H1 revenue up 12% year-on-year Operational EBITDA margins Capex: revenue ratio continues continue to improve to track below 20% 24% 29% 22% 19% 15% FY02* H1 FY03 FY02* Q1 FY03 Q2 FY03 Faster top Margin Cashflow line growth expansion improvements * FY02 revenues restated on basis consistent with FY03

Optus: 38% operational EBITDA growth � Good progress toward cashflow breakeven in FY04 6 months 6 months Increase/ Q2 FY03 vs Statutory results (A$M) to Sep 2002 to Sep 2001 (Decrease) % Q1 FY03 Operating revenue 2,601 2,318 12% 5% Operational EBITDA 601 435 38% 15% Operational EBITDA margin 23.1% 18.7% N/m N/m JVs (5) (62) N/m N/m EBITDA 596 373 60% 27% EBIT 128 (72) N/m 161% NPAT (76) (287) N/m 18% (31%) 398 (59%) Capex (cash basis) 971 270 (59%) (2%) Capex (accrual basis) 654

Optus Mobile: delivering profitable growth � EBITDA margins increase to 37% Share of revenue increases 7% Postpaid ARPU up 19% A$1.3bn Optus Mobile revenue Data increases 10% as % of revenue Business mobile 20% revenues up* H1FY02 H1FY03 * 3 months to Sep 02 vs 3 months to Jun 02

Optus Business and Wholesale � Corporate momentum maintained Focus on corporate Corporate data market succeeding 13% & IP grows 13% Corporate voice A$461m 22% Optus Business revenue grows Wholesale revenues 29% decline in difficult market H1 FY02 H1 FY03

Optus Consumer: cash efficient growth � Capex down 59% - sharp reduction in cash outflow* Strong revenue growth ARPU from HFC 8% network increases 21% A$592m Optus Consumer revenue 20% Off-network voice up 29% Dial-up customers up H1 FY02 H1 FY03 * Operational EBITDA less cash capex

Optus: sustainable cost control � Balanced with customer and staff satisfaction Better cost management Customer and staff successes � ‘Mobile Operator of the Year’ 2002 30% Australian Telecom Magazine Awards Costs as % of revenue 25% � Optus Business customer satisfaction 14% rating maintained 12% � No 1 ISP for customer satisfaction - AC Nielsen Sep 01 Sep 02 Sep 01 Sep 02 � Top quartile of Australian companies Selling & Admin Staff for job satisfaction

Strong performance by associates & JVs Growth in profits and dividends � Strong dividend growth - Ordinary profits up 88% YoY $100m in H1FY03 ($m) H1 FY03 Increase % Dividends received (S$m) Belgacom 117 7% 100m Telkomsel 111 N/m 67m AIS 89 29% 43m Globe 51 61% Others* (48) N/m Ordinary contr. 320 85% FY 00/01 FY 01/02 H1 FY03 Exceptionals 230 N/m Belgacom AIS & others Telkomsel Total 549 218% * Includes Optus Associates

Group aggregate mobile base: 29 million* Regional mobile earnings: up 142%** � Strong growth expected in Profitable market leaders regional markets 70 Mobile subscribers (million) 60 India 80 70 50 Telkomsel EBITDA margin % 60 Globe 40 SingTel 50 Thailand 30 40 Bharti AIS Optus Philippines 30 20 Indonesia 20 10 10 0 0 2000 2003 2006 0 20 40 60 80 100 Source: SSB market share of subscribers % * Includes 5.9M SingTel and Optus subscribers EBITDA margins as at Sep 02 except AIS & Telkomsel (Jun 02). Bharti margins based on existing consolidated operations. AIS ** Excludes exceptional gains/(losses) and taxes adjusted for non cash charges.

Working together to create value in mobile Data expertise shared Aggregate base of 29m across group helps supplier negotiations 111 37% Data as % of revenue* 42 Aggregate subs** 38 29 11% 10% 11% 17 7 2% Telstra SKT SingTel & Unicom Mobile DoCoMo China China Bharti Telkomsel SingTel assoc. Optus Globe NTT ** Based on Sep 02 data except Telstra (Jun 02) & * Based on latest publicly available information NTT Docomo (Aug 02)

Improving cashflows and strong balance sheet $750m free cash flow – 1H FY03 Progress towards leverage goals Free cash flow $m Net debt $10.6bn - SingTel ex Optus 577 - Optus 174 Net debt: EBITDA ** 2.2 x - Total 751 Dividends paid (765) Net gearing 42% Telkomsel (767) EBITDA: net 9.9 x Interest payments (282) interest cover Others* 310 * Include monetisation of short term assets & forex movements Increase in net debt 753 ** Annualised basis