Q4 Operating Result Conference Call 6 March 2003 Participants: Mr. Sigve Brekke Mr. Grant Ferguson Mr. Petter-Borre Furberg Mr. Premon Pinskul Ms. Kulvadee Kanjanabose
In Summary Improving, sustainable top line revenue growth Postpaid subscriber base stable Prepaid revenues increasing Operating costs and capital expenditure under control Competitive landscape stable Regulatory change underway Investor Relations: IR@DTAC.co.th Page 2 Tel. (66) 2 202-8000 ext. 31831, 31846-7
2002 Operating Result 12,000 EBITDA grew by 15% compared to 2001. 11,500 11,000 10,496 10,500 10,000 Mil.Bt. 9,500 9,150 +64% -26% +184% 9,000 +10% 8,500 8,000 7,500 7,000 EBITDA 01 Services Handsets&Sim SG&A and Net Prov.of bad debt EBITDA 02 Cards OP-others Investor Relations: IR@DTAC.co.th Page 3 Tel. (66) 2 202-8000 ext. 31831,31846-7
Q4 Service Revenues Growth trend experiences in Q402 have continued into Q103. Based on period-to-date performance, we anticipate revenue growth in excess of 5% in Q103. Investor Relations: IR@DTAC.co.th Page 4 Tel. (66) 2 202-8000 ext. 31831,31846-7
Q402 Operating Result 2,700 2,600 2,500 Mil. Bt. 2,400 2,300 2,408 +4% +77% +1% -270% +8% 2,478 2,200 2,100 2,000 EBITDA Q302 Serv ices Net OP-others SG&A Handsets&Sim cards Prov.of bad debt EBITDA Q402 EBITDA grew 3%, after the effect of charges for obsolete stock provision of THB 105 million from UD and distribution margin of THB 75 million payable to UD in Q402. Normalizing the effect to this, EBITDA growth would have been 10%. Investor Relations: IR@DTAC.co.th Page 5 Tel. (66) 2 202-8000 ext. 31831,31846-7
Q4 Cost of Services 3,380 3,455 3,500 3,300 +8% Mil. Bt. 3,100 2,900 2,700 2,500-12% +29% +32% 2,300 2,100 1,900 1,700 1,500 Cost of Concessionary services-q302 fees Production of prepaid card +Sales commission Others-Cell site & Roaming charge Amortization of deferred rights Cost of services-q402 Excluding the amortization of deferred rights, cost of services increased by only 2%. Investor Relations: IR@DTAC.co.th Page 6 Tel. (66) 2 202-8000 ext. 31831,31846-7
Q4 SG&A 1,800 1,717 1,767 1,700 1,600 1,500-17% +4% 15% 8% Mil. Bt. 1,400 1,300 1,200 1,100 1,000 900 SG&A-Q302 Selling & marketing exp. Depreciation & Amort. General Admin Provision of doubtful acc. SG&A-Q402 Excluding the provision of doubtful accounts, SG&A increased by only 1%. Investor Relations: IR@DTAC.co.th Page 7 Tel. (66) 2 202-8000 ext. 31831,31846-7
Sources and Uses of Fund (at 31 Dec. 2002) Sources of Fund Cash beginning Operating cashflow(bf.interest) ECA financing Baht Bond #3 Total source of funds Million Baht 3,093 13,661 6,070 5,000 27,824 Uses of Fund CAPEX* Net financing costs Principal Repayment Total use of funds Cash ending Million Baht 14,483 2,871 8,973 26,327 1,497 *Including changes in account payables for capital items. YTD, new commitments were THB 13,405 million. Investor Relations: IR@DTAC.co.th Page 8 Tel. (66) 2 202-8000 ext. 30964-5, 30968
Financial Profile Weighted average cost of fund as at 31 December 2002 was 5.83%. Undrawn facilities Baht Syndicated Loan THB 4 bn. FEC Tranch-B THB 1.38 bn. NIB THB 1.27 bn. Total THB 6.65 bn. Note : (A) = Amortized repayment (B) = Bullet repayment Investor Relations: IR@DTAC.co.th Page 9 Tel. (66) 2 202-8000 ext. 31831,31846-7
Debt Refinancing The debt refinancing was an integral part of DTAC s proactive liability management plan, focusing on cost optimization, repayment profile and risk management. A) THB 4 Billion Syndicated loan One of best local corporate deals in 2002 that can achieved a benchmark interest rate of THBFIX+1.65% with a 6 year tenor. B) THB 5 Billion Debenture Market leading bond deal with a 5.8% fixed coupon, 7 year bullet repayment and an A- credit rating. 10.00% 9.00% 8.00% Refinancing 7.00% Floating 46% Fixed 54% Rate (%) 6.00% 5.00% ECGD Baht Bond #1 4.00% Baht Bond #2 NIB 3.00% Yankee 2006 - ffloating New Syndicated Loans Yankee 2006 - Fixed 2.00% FEC Baht Bond #3 1.00% Syndicated Loans #1 Syndicated Loans #2 0.00% 1 2 3 4 5 6 THB Swap Rate Avg. Interest Rate = 5.35 % Refinancing 7 Investor Relations: IR@DTAC.co.th Tel. (66) 2 202-8000 ext. 31831,31846-7 Page10
Postpaid Subscribers Subs 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Subs 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Churn-Voluntary Churn-Forced New Subscriptions The new subscriptions in February were effected by the number of days. Daily sales show the same upward trend as in January. Total and voluntary churn have continued to decrease. Majority of the churn is forced; therefore, it has no effect on current period revenue. Voluntary churn continues to decrease due to the implementation of CRM programs. Investor Relations: IR@DTAC.co.th Page 11 Tel. (66) 2 202-8000 ext. 31831, 31846-7
Billable VS Non-billable Subscribers Subs 1,400,000 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Billable sub Non-billable Subs Non-billable subscribers are customers who have been suspended as they have an overdue payment. The change in non-billable subscribers is a combined result of; - CRM strategy to recover the non-billable subscribers to become active customers - Active prevention of taking on fraudulent customers - proactive management in subscriber base by shortening postpaid churn period There was a net increase in billable subscribers in February. Investor Relations: IR@DTAC.co.th Page 12 Tel. (66) 2 202-8000 ext. 31831, 31846-7
Prepaid Customers Subs 4,600,000 50% 4,500,000 45% 4,400,000 40% 4,300,000 35% 4,200,000 30% 4,100,000 25% 4,000,000 20% 3,900,000 3,800,000 15% 3,700,000 10% 3,600,000 5% 3,500,000 0% Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Total Prepaid Subs Churn % Annualized Churn Prepaid churn significantly increased in Jan 03 and Feb 03, and is expected to be high also in March 03 because starter kits partly were sold as refill vouchers during mid year 02. However, these subscriptions have been silent for several months and the churn is not affecting revenues. Prepaid churn is also driven by an increasing rotation from prepaid to postpaid services. New refill voucher structure with shorter validity introduced in Nov 02 significant shortened the churn period for new prepaid customers. Investor Relations: IR@DTAC.co.th Page 13 Tel. (66) 2 202-8000 ext. 31831, 31846-7
Prepaid ARPU THB 250 200 150 100 50 0 236 223 223 169 200 171 October November December Gross ARPU Net ARPU Average daily prepaid revenues and the number of active callers have shown a consistent increase since Nov. 02 which continues into Q103. The gross prepaid ARPU increased by 6% MoM in Dec 02, and due to the decreasing amortization of promotional airtime, net prepaid ARPU increased by 17% in Dec 02. Unamortized airtime promotion at end 2002 amounted to THB 32 million. Investor Relations: IR@DTAC.co.th Page 14 Tel. (66) 2 202-8000 ext. 31831, 31846-7
Prepaid Daily Revenue Daily revenue report (usage based) Daily prepaid revenues have shown a CAGR of 12% since the beginning of Nov. 02. 01/11/02 01/03/03 30 day average Trendline Investor Relations: IR@DTAC.co.th Page 15 Tel. (66) 2 202-8000 ext. 31831, 31846-7
No. of Active Prepaid Subs 01/11/02 01/03/03 30 day average Trendline Existing active customers are becoming more active. New customers are more active than average customers. Investor Relations: IR@DTAC.co.th Page 16 Tel. (66) 2 202-8000 ext. 31831, 31846-7
Sales of 200 Bt. Voucher Card Transactions 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Nov-02 Dec-02 Jan-03 Feb-03 200 Bt. Voucher card Others * A decrease in sales was effected by the no. of days in Feb. * Voucher sales are a leading indicator and show a strong improving trend. 200 Bt. voucher card dominates voucher sales, resulting in better ARPU due to the shorter validity period. Reduction in validity period has also had the effect of increasing the rate of refill. Investor Relations: IR@DTAC.co.th Page 17 Tel. (66) 2 202-8000 ext. 31831, 31846-7
Disclaimer This presentation contains certain forward-looking statements. These forward looking statements generally can be identified by use of statements that include words or phrases such as DTAC or its management believes, expects, anticipates, intends, plans, foresees, or other words or phrases of similar import. Similarly, statements that describe DTAC s objectives, plans or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Investor Relations: IR@DTAC.co.th Page 18 Tel. (66) 2 202-8000 ext. 31831,31846-7