Inves estor tor Pr Presenta esentatio tion Advanced anced Info o Servi vices ces Plc. May y 2020 20 1
Agenda 1Q20 Performance • Leading to 5G era • 2020 outlook • 2
1Q 1Q20 20 Per erformance ormance 3
1Q20 Performance Mobile revenue was negatively affected by price • % Contribution Service revenue (Bt mn) competition and COVID-19 impact. Postpaid growth to service revenue ex. IC&TOT ex. IC&TOT Flat YoY was offset by prepaid decline. Revenue from -1.1% YoY +27% YoY international roaming and prepaid tourist SIM faced significant drop from faded travelers. FBB revenue grew double digit as subscriber base • FBB 5.0% continued to grow, albeit at slower rate. Mobile 3.4% Other 92% • EBITDA growing from net cost reduction from TOT partnership D&A grew YoY from network expansion and the • acquisition of 2600MHz in Feb. • Interest expense dropped slightly from 4Q19 repayment Profitability (Bt mn) and TFRS16 effect -33% YoY +3.8% YoY +3.8% YoY +12% YoY FX loss from unrealized loss as Baht depreciation on • Spectrum Usd 2,279mn +13%YoY NPAT reported negative growth from higher • depreciation and FX loss -1.9% YoY -7.5% YoY -11% YoY 5
Mobile revenue impacted from roaming and competition Mobile Revenue (Bt mn) % Revenue Contribution mobile business +8.7% YoY -6.9% YoY -34% YoY -1.1% YoY 1Q19 1Q20 Prepaid Postpaid 43% 47% 3% IR&IDD 2% 54% 51% Mobile net adds (thousand) Mobile ARPU (bt/month/user) Postpaid Postpaid and prepaid five consecutive quarters Prepaid Postpaid 354 350 250 208 -0.8% YoY 537 537 106 529 531 525 33 -2.2% QoQ (32) 182 179 174 173 Prepaid (115) 162 (276) -6.6% YoY (891) -6.4% QoQ 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Subscribers % Change Postpaid +7.0%YoY, +0.4%QoQ • Prepaid ARPU pressured by continued unlimited fixed speed plan at Bt200 and Bt150. Prepaid -2.8%YoY, -2.7%QoQ • Prepaid revenue was affected from less traveler segment and continued unlimited • Postpaid ARPU impacted from new unlimited speed plan at Bt300, launched in late- data pricing. Subscribers dropped from tourist SIM started in early Feb. Feb in response to competition Postpaid revenue grew high single digit YoY, slowing down from double digit • growth in FY19. Net add affected by shop close led to less subscribers acquisition. 5
COVID-19 impact on traveler revenue and handset sales Core service revenue significantly declined YoY in Mar-20 COVID-19 situation and weak economy put pressure %YoY Service revenue on ARPU and new postpaid acquisition Postpaid acquisition (‘000) 2.6% 2.2% 498 500 464 461 Jan-20 Feb-20 Mar-20 -32% YoY 337 -33% QoQ -4.1% • In Mar-20, Service revenue declined 4.1% YoY as mobile revenue dropped 1Q19 2Q19 3Q19 4Q19 1Q20 5.5% YoY while fixed broadband revenue increased 26% YoY. Handset sale slowdown in the latter half of Mar-20, when IR and prepaid tourist SIM revenue dropped partial lockdown was implemented Unit sales (‘000) IR and prepaid tourist SIM revenue (Bt mn) 1,040 1,036 957 919 -43% YoY 684 -34% YoY -44% QoQ -29% QoQ 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 IR and prepaid tourist SIM contribution 2.3% 2.3% 2.3% 2.0% 1.3% Handset subsidies dropped in Mar-20 as AIS shops and channels in shopping malls were closed 1Q19 2Q19 3Q19 4Q19 1Q20 6
Demand for home broadband emerged late March FBB business impacted by competition & COVID-19 FBB subscriber growth slowdown Decelerated revenue growth 27% 32% 30% 27% 26% 1,090 1,038 937 855 795 +3.9% QoQ 1,640 1,579 1,475 1,380 1,288 Net addition (‘000) 101 FBB revenue (Bt mn) 82 Ending subscriber 65 60 53 YoY growth (‘000 ) 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 • AIS fibre had a decelerated growth of 27% YoY and 3.9% QoQ • Net add slowed down as AIS Fibre withdrew aggressive discount offered in an attempt to uplift ARPU. Offer more affordable Working from Home Package ARPU softened amid competitive pricing -8.7% YoY Bt399 Max speed 4G Internet Unlimited for 3 months 563 558 549 -3.6% QoQ 533 for Office 365 and Zoom Max speed internet mobile SIM 514 100/100Mbps 1GB* ARPU (Bt/sub/month) 1Q19 2Q19 3Q19 4Q19 1Q20 • As the city lockdown emerged during the last week of March, Working • FBB APRU continued downward trend as the competition elevated with from Home Package were introduced to support the customer demand smaller package, Bt399 for 100/100Mbps, introduced in the market . and resulted in higher subscription rate in late March. 7
Enterprise business supported by EDS and Cloud Enterprise non-mobile services is on higher demand 1Q20 Enterprise revenue Non-mobile, +10% YoY 27% Bt3.2bn Mobile, -0.6% QoQ 1,000 73% +6.4% YoY, -2.6% QoQ Enterprise non-mobile 500 revenue (Bt mn) - 1Q19 2Q19 3Q19 4Q19 1Q20 Enterprise mobile services pressured by COVID-19 Non-airtime services include +5.1% YoY ICT 3,000 Data -3.3% QoQ CLOUD EDS Solution center 2,000 1,000 Enterprise mobile Higher demand in EDS and Cloud revenue* (Bt mn) - • In 1Q20, lower new data links implemented as site 1Q19 2Q19 3Q19 4Q19 1Q20 inaccessible, but since late-March, more requests of work from home’s bandwidth have increased. • Enterprise mobile services were impacted by the COVID-19, • For Cloud services, there was a high demand for WFH resulting in a QoQ drop in revenue. • AIS has mitigated this impact by launching minimal packages services e.g., Team for Thailand (Office 365), Virtual desktop infrastructure. for customer retention and extending credit term. *This revenue is embedded in mobile service revenue 8
Ensure continuity of service during COVID-19 New acquisition channel Top up & Payment channel Product and service %amount via online channel 1) Reinforce and accelerate • AIS online store • Pop-up store • Telesales • >40% Other business partners in retail >60% space • Work from home package: targeting mass consumer and students on both mobile and broadband offerings. < prepaid postpaid> • VDO package • Bundled COVID-19 insurance with data or %amount via online & self-service 2) FBB subscription AIS' COVID responses • The payment deferral for 1-3 months with no >75% >70% interest • The extension of validity for 1-3 months • The launch of new and more affordable packages for affected customers < prepaid postpaid > as of Mar-20 1) Online channel: Mobile banking/mPAY app/myAIS/RLP/recurring DD,CC 2) Self-service channel: mPay Vending/ATM 9
1Q20 Cost breakdown (Pre-TFRS16) 1Q19 Change 1Q20 %Change ( 19,817 ) ( 20,385 ) ▲ 2.9% 568 Cost of service Increased mainly from network expansion ▲ 0.4% Flat following core service revenue ( 1,403 ) ( 1,409 ) Regulatory fee 6 ( 8,691 ) ( 9,712 ) ▲ 12% Depreciation & Amortization 1,021 4G network, FBB and 2600Mhz license ( 7,371 ) ▼ 2.7% -197 Network OPEX & TOT partnership (gross) (7,173) Lower rental cost offset by higher network OPEX ( 5,139 ) -601 ▼ 12% (4,538) Network OPEX & TOT partnership (net of rev.) Lower rental cost after settling disputes with TOT ( 2,352 ) ( 2,090 ) ▼ 11% Other costs of services -262 Lower prepaid commission ( 7,159 ) ( 6,419 ) ▼ 10% Cost of SIM and device sales -740 Dropped from lower device sales ( 6,262 ) ( 6,288 ) ▲ 0.4% 26 SG&A Higher admin expenses offset by marketing expenses ( 1,934 ) ▼ 8.9% Marketing Expense -172 (1,762) Lower marketing activities in 1Q20 ( 4,328 ) ( 4,526 ) ▲ 4.6% 198 Admin and others Higher bad debt provision and staff cost Net foreign exchange gain ( loss ) 84 ▼ 602% 506 (422) FX loss from Baht depreciation of A/P for CAPEX Other income ( expense ) 203 ▲ 34% 68 271 Reverse accrued expenses ( 1,217 ) ( 1,201 ) ▼ 1.3% Finance cost -15 Lower interest-bearing debt from debt repayment Common size 41.4% Cost of service 40.7% SG&A 14.7% (Net cost of TOT partnership) 14.5% 1Q19 1Q20 1Q19 1Q20 10
Strong Balance sheet and cash flow to support investment Balance Sheet 1Q20 Cash flow (Bt bn) (Bt bn) Cash increase Cash decrease Right-of-use asset Bt65bn right others A/P Operating Investing Financing Net cash incurred from long term spectrum of use contracts mainly including license 21 39 2100MHz agreement and payable 65 23.0 tower rental 80 10.9 spectrum Assets Liabilities 5.9 2.9 118 2.0 license interest- 0.5 0.6 0.2 94 310 bearing B/S Cash Lease Income Cash Operating cash flow tax paid CAPEX Finance cost increased Spectrum license Investment in JV liabilities paid 375 debt 1Q20 PPE 64 Equity lease Lease liability Bt64bn 122 65 liability incurred at the beginning 32 period was the amount 40 others A/R 18 25 of the right of use. 31 cash retained earnings others Operating cash flow was in healthy level to support CAPEX, debt repayment, and dividend payment. 1.5x 0.7x Investing cash flow was Bt8.1bn, which included Interest bearing debt spectrum license payment of Bt2.0bn Net debt to EBITDA to Equity Average finance costs = 3.0% p.a. • Maintained investment grade credit ratings 0.4x 42% • Fitch: national rating AA+ (THA), outlook stable • S&P: BBB+, outlook stable Return on Equity Current ratio 11
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