Financial Result FY11

Advanced Info Service Plc.

9 February 2012

Key Highlights

AIS achieved 14% revenue growth in 2011, supported by changing customer lifestyle to
more data centric and AIS
AIS strong foothold in voice market while handset market
continued to grow.

Despite data capacity expansion and rebranding activities, operating efficiency

remained, witnessed by a stable cash opex to total revenue at 14.8%. EBITDA
improved 9.5% YoY while service EBITDA margin remained stable.

By launching 3G on 900MHz in mid 2011, AIS recorded growing subscribers, reaching

9mn at year end
end. Non-messaging
Non messaging revenue contributed nearly 15% of revenue
revenue.

Moving into 2012, under the NBTC (new regulator), Thai telecom industry will face a
structural change which will
9 unlock concession expiry
9 create level playing field and bring a new capex cycle
9 ensure long term business future
p
to hold the p
public hearing
g for the spectrum/telecom/broadcast
p
master
NBTC expect
plan in Feb 2011.

FY2012 Guidance
Service revenue ex.IC

Non-voice revenue

5 - 6% YoY

Sales revenue

25% YoY

strong demand for mobile

internet
slower voice revenue growth

10%+

more affordable smart devices

upbeat trend of social networks
richer applications to enhance
customer experinece

wide range of devices offered

pushing 3G devices

Marketing expenses

Amortization

EBITDA margin

CAPEX

2% - 2.5%

7% YoY

44%

Bt8bn

to total revenue
continued rebranding
activities
mild competition

fully amortized assets

limited new investments

dilution effect from

growing handset business
remained
i d costt efficiency
ffi i

strengthen 3G-900MHz
footprints
focus
f
on data
d t capacity
it

4Q11 Key Financial Highlights

Financial Highlights

4Q10

3Q11

4Q11

% yoy

% qoq

23,044

24,343

25,869

12.3%

6.3%

Non-voice

4,075

5,077

5,451

34%

7.4%

Sales revenue

3,313

2,918

3,272

1.2%

12%

EBITDA

13,722

13,981

14,331

4.4%

2.5%

EBITDA margin

45.5%

45.1%

43.2%

231bps

187bps

Service margin ex.IC

49.5%

48.4%

46.8%

269bps

161bps

Free cash flow

12,067

12,282

12,341

2.3%

0.5%

1,655

1,699

1,991

20%

17%

(Bt million)

Service revenue ex.IC

(EBITDA-CAPEX)
(EBITDA
CAPEX)

Capex

FY11 Key Financial Highlights

Financial Highlights

FY10

FY11

% yoy

Service revenue ex.IC

87,516

97,911

12%

N
Non-voice
i

15 040
15,040

19 736
19,736

31%

9,349

13,180

41%

EBITDA

51,720

56,623

9.5%

EBITDA margin

46.5%

44.8%

167bps

Service margin

*49.0%

48.6%

40bps

Free cash flow (EBITDA-CAPEX)

46,897

50,916

8.6%

4,823

5,707

18%

(Bt million)

Sales revenue

Capex

*excluding one-time network related item in 2Q10

4Q11 Revenues by segment

Voice revenue

Btmillion

Non-voice revenue

+9%
9% yoy
+6% qoq

Btmillion

IR revenue

+34%
34% yoy
+7% qoq

Btmillion
-26%
26% yoy
3.4% qoq

high usage during festive seasons

prepaid:
id successful
f l ttariff
iff package
k
and
d
organic growth in regional market
postpaid: improved quality subs

Surged data demand

provide
id b
better
tt mobile
bil iinternet
t
t
experience via 3G ,WiFi ,and EDGE+

QoQ, high seasonality of tourism

YoY, global price pressure

IDD&Others revenue

Net sales

Net IC

Btmillion
+7% yoy
+1.3% qoq

higher traffic and expanded

subscriber base of IDD services

Btmillion
-24% yoy
-11% qoq

QoQ
QoQ, flooding impacts on unit sales
YoY, despite higher unit sales, margin
dropped from declining price of devices.

Btmillion
-49% yoy
11% qoq

AIS continued to offer all-network

promotions.
6

FY11 Revenues by segment

Voice revenue

Btmillion

Non-voice revenue

+8.3% yoy

Btmillion

IR revenue

+31% yoy

Btmillion
-6% yoy

strong footprint in Bangkok &

regional
i
l market
k t
Localized price plans

rising importance of mobile

i
internet
iin customers d
daily
il lif
life
strengthen seamless data network

decreasing trend of revenue from

f i roaming
foreign
i d
due to global
l b l price
i
pressure despite expanding traffic
and tourists.

IDD&Others revenue

Net sales

Net IC

Btmillion
+10% yoy

larger IDD subs base and usage

from successful marketing
campaign.

Btmillion
+14% yoy

growing demand for smart devices

expansion of non-smartphone in
new emergent market

Btmillion
-25% yoy

net IC receipts continued on a

declining trend
retroactive net receipts from HUTCHCAT recorded in 3Q10
7

Data demand continued to increase

Non-voice revenue

We witness a continual growth in data.

After launching 3G on 900MHz in mid
2011, 3G subscribers grew strongly,
reaching 1.2mn and driving total data
users to 9mn.

*Non-voice
Non voice services = SMS
SMS+Ringback
Ringback tone+Enterprise+Mobile
tone Enterprise Mobile data
data+others
others

Mobile data continued to be the key growth

driver and grew strongly both in terms of
usage and user. This was due to
social networking trends
data device adoption

Data growth indicators

D t subscriber
Data
b
ib
(millionsubscriber)

Mobile
M
bil data
d t revenue
(Btmillion)

+39%YoY

Non-messaging revenue*
(%toservicerevenueex.IC)

+71%YoY

14.6%
11.3%

*Non-messeging services = Total non-voice (SMS+ Ringback tone)

Deliver impressive customer experience

through quality
CUSTOMEREXPERIENCE
D i
Device

N t
Network
k

1,884 bts

A li ti
Application

S
Service
i

nationwide

70k hotspots

wide range of quality

d i
devices
bundling with
customized package

seamless
mobile internet
experience through
3G+WiFi+EDGE+

enhanced
localized apps
customized apps
exclusive contents

~700 device experts,

various privileges for
AIS customers

ARPU lifted up from seasonality and

strong data consumption
Net adds

MOU

(000)

(minutes/sub/month)

ARPU (incl IC)

(Bt/sub/month)

Subscribers reached 33.5mn, largely grew from

data users and organic growth from regional
market. Churn dropped due to gaining quality
subs and extended termination period due to the
flood, resulting in strong net adds.
ARPU increased from higher data needs and
festive seasons.
MOU increased from popular all-network calls
and seasonality.

10

Maintained cost efficiency

Cash OPEX
During the year, AIS refreshed the brand image
as well as deployed
p y 3G 900MHz and nationwide
+
EDGE . Consequently, marketing expense, SG&A
and network opex increased. In addition, staff cost
rose from special reward in 3Q11.

(% to total revenue)

+16%yoy

AIS cost efficiency continued with14.8% of cash

opex to total revenue, and stable comparing to
last year (excluding one-time item).
1) Cash OPEX = NW OPEX + SG&A
SG&A, ex D&A
2) SG&A = Marketing expense + Administrative expense

Network OPEX

Btmillion

Marketing expense

+19%yoy

Bt360mn one-time item in 2010

3G-900MHz and data capacity expansion

Btmillion
+22%yoy

Rebranding activities

SG&A*ex. Marketing & Depre

Btmillion
+11%yoy

Higher staff cost from special reward

11

Strong
g EBITDA growth
g
FY11 Breakdown of EBITDA

(Bt million/% yoy)

EBITDA
+10% yoy

Despite network expansion focusing on data capacity, EBITDA grew 9.5% in 2011. The growth
was from solid revenue streams, offsetting by Bt360mn one-time reversal item, rebranding
cost,
t network
t
k opex and
d hi
higher
h staff
t ff cost.
t
Excluding handset business, service EBITDA margin was fairly stable at 48.6%
EBITDA margin declined to 44.8%
44 8% from 46.5%
46 5% last year due to
9 dilution from growing lower margin handset business
9 higher revenue sharing on DPC roaming as part of overall data network expansion.
9 Bt360mn one
one-time
time reversal in 2Q10

Despite Bt2.8bn one-time tax adjustment,

net profit improved
Net profit/margin

(Btmillion/%)
+8% yoy

Net profit improved 8% YoY in 2011,

resulting
lti from
f
improved
i
d revenue, llower
depreciation, offsetting by one-time tax
adjustment, higher network opex, and staff
cost.
Excluding DPC goodwill and Bt2.8bn onetime deferred tax adjustment, recurring net
profit went up 21% from robust EBITDA
whereas amortization dropped
dropped.

Recurring net profit/margin

(Btmillion/%)
+21% yoy

AIS recorded the impairment loss of DPC

goodwill of Bt1.5bn in 2011, resulting in zero
outstanding balance of DPC goodwill on
Statements of financial position.
With the strong revenue generation and
effective cost control
control, AIS recurring net
profit margin steadily improved over the
past three years.

13

AIS generated healthy FCF of Bt51bn

Free cash flow
+9% yoy

AIS generated healthy FCF of

Bt51bn resulting from strong
Bt51bn,
revenue growth, maintained cost
efficiency, and low capex.
In 2012, capex will be spent mainly
on strengthening data capacity and
quality of existing 3G-900MHz
network to provide better customer
experience.

Capex
We believe that the strong cash
flow generation will bring us
competitive advantage for
anticipated 2.1GHz license auction.

14

Repayment of Bt14bn debt

Debt repayment

(Btbillion)

Capital structure
Net debt/Equity
q y

Debt outstanding

(Btbillion)
-36% yoy

Net debt/EBITDA

ROE

In 2011, AIS repaid Bt14bn debt and secured

Bt1.2bn new loan, Bt600mn of which will be
due in 2015 and the rest will be due in 2016.
Average cost of debt declined to 4.5% from
4.8% last year.
The strong net profit and the low retained
earning resulted in a significant increase of
ROE
We remained low gearing and healthy balance
sheet to support future growth potential and
shareholder
h h ld returns.
t
15

Disclaimers
Some statements made in this material are forward-looking statements with the relevant
assumptions,
p
, which are subject
j
to various risks and uncertainties. These include statements with
respect to our corporate plans, strategies and beliefs and other statements that are not historical
facts. These statements can be identified by the use of forward-looking terminology such as may,
will, expect, anticipate, intend, estimate, continue plan or other similar words.
The statements are based on our managements assumptions and beliefs in light of the information
currently available to us. These assumptions involve risks and uncertainties which may cause the
actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward
forward-looking
looking statements. Please note
that the company and executives/staff do not control and cannot guarantee the relevance, timeliness,
or accuracy of these statements.

AIS INVESTOR RELATIONS CONTACT

http://investor.ais.co.th
investor@ais.co.th
TEL. +662 2995014

16