FY 2011 RESULTS

ANALYST BRIEFING
24 February 2012

Disclaimer
This presentation is not and does not constitute an offer, invitation, solicitation or recommendation to subscribe for, or purchase, any securities and neither this presentation nor anything contained in it shall form the basis of, or be relied on in connection with any contract or commitment or investment decision. This presentation has been prepared solely for use at this presentation. By your continued attendance at this presentation, you are deemed to have agreed and confirmed to Telekom Malaysia Berhad (the Company) that: (a) you agree not to trade in any securities of the Company or its respective affiliates until the public disclosure of the information contained herein; and (b) you agree to maintain absolute confidentiality regarding the information disclosed in this presentation until the public disclosure of such information, or unless you have been otherwise notified by the Company. Reliance should not be placed on the information or opinions contained in this presentation or on its completeness. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. None of the Company and its affiliates and related bodies corporate, and their respective officers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or negligence) for any loss arising from any use of this presentation or its contents or otherwise arising in connection with it. This presentation contains projections and forward-looking statements relating to the Companys business and the sectors in which the Company operates. These forward-looking statements include statements relating to the Companys performance. These statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. It is important to note that actual results could differ materially from those anticipated in these forward looking statements. The Company does not undertake to inform you of any matters or information which may come to light or be brought to the Companys attention after the date hereof. The forecasts and other forward-looking statements set out in this presentation are based on a number of estimates and assumptions that are subject to business, economic and competitive uncertainties and contingencies, with respect to future business decisions, which are subject to change and in many cases outside the control of the Company. The directors and officers of the Company believe that they have prepared the forecasts with due care and attention and consider all best estimates and assumptions when taken as a whole to be reasonable at the time of preparing the presentation. However, the Companys forecasts presented in this presentation may vary from actual financial results, and these variations may be material and, accordingly, neither the Company nor its directors or officers can give any assurance that the forecast performance in the forecasts or any forward-looking statement contained in this presentation will be achieved. Details of the forecasts and the assumptions on which they are based are set out in the presentation. This presentation may not be copied or otherwise reproduced without the written consent of TM.

Performance Overview Financial review Operating highlights Concluding remarks

Key Highlights FY 2011

Achieved all Headline KPIs for 2nd year

FY2011 Headline KPI

FY2011 Achievement

Revenue growth of 4.1% vs. FY2010 to RM9.15bn Normalised EBITDA Margin at 33.5%

2.5%
32%

4.1%

33.5% >70

Customer Satisfaction Measure

70

Internet & Multimedia Revenue grew >20% in FY2011 BAU Capex/Revenue improved to 12.4% compared to 12.8% last year Achieved 1.16mn premises passed with FY2011 HSBB Capex of RM1.4bn, lower than budgeted
Broadband leadership continues: Total customer base of over 1.9mn Over 230,000 Unifi customers activated, takeup rate >20% Final single-tier dividend of 9.8 sen per share Proposed capital repayment of 30 sen per share via capital reduction

Key Highlights 4Q 2011

Positive growth across the board QoQ and YoY

4Q11 vs 4Q10
4Q11 vs 3Q11

Financial Performance
Operating revenue grew by 5.4% QoQ and 5.5% YoY to RM2,447.2mn - Revenue led by Internet & Multimedia, at 4.2% growth QoQ and

23.8% growth YoY

Normalised EBITDA up 0.6% QoQ and 1.5% YoY to RM808.1mn

Normalised PATAMI up 74.9% QoQ and 0.7% YoY to RM240.1mn

Key Operating Indicators

Broadband subscribership grew 2.8% QoQ and 12.3% YoY to 1.92mn customers. TM Wifi hotspot zones increased by 14.4% QoQ and 80.3% YoY, to 19,799 sites

Focus on Shareholder Value Creation

Growing enterprise value through improving return on capital

Our capital management approach is guided by two major principles :

2008

2009

2010

FY2011

Total Return to 1 Shareholder (TRS)

7.7%

42.9%

24.0%

60.1%

Striving to
optimize capital productivity and ROIC
Cash Balance (RM bn)

2.1

3.5

3.5

4.2 2

Creating
shareholder value with strong commitment to dividend policy

EBIT Margin 3

10.9%

10.6%

10.8%

10.6%

Capital Expenditure, excluding HSBB

(RM bn)

16.7 1.4

14.1 1.2

12.8 1.1

12.4 1.1 Capex / Revenue ratio( %)

1 TRS: Source Bloomberg 2 After interim dividend paid in September 2011 (RM351mn), and final gross dividend 2010 & capital distribution paid in June 2011 (RM1,037.4mn) 3 Normalised EBIT / Total Revenue

 Performance Overview Financial review

Operating highlights Concluding remarks

Group Results 4Q11 & FY2011

Reported
RMmn

4Q11
2,447.2 37.0 796.1 32.0% 808.1 32.5% 535.9

3Q11
2,321.7 27.8 812.5 34.6% 803.3 34.2% 580.7

% Change QoQ
+5.4 +33.1 -2.0 -2.6pp +0.6 -1.7pp -7.7

4Q10
2,320.6 52.7 758.6 32.0% 795.9 33.5% 565.7

% Change YoY
+5.5 -29.8 +4.9 0.0pp +1.5 -1.0pp -5.3

FY11
9,150.7 120.9 3,086.4 33.3% 3,108.4 33.5% 2,128.0

FY10
8,791.0 152.9 2,924.3 32.7% 2,958.5 33.1% 1,995.8

% Change FY11 vs FY10

+4.1 -20.9 +5.5 +0.6pp +5.1 +0.4pp +6.6

Comments (FY11 vs FY10)

Revenue Other Operating Income EBITDA

Higher Internet & Multimedia and Others revenue Higher revenue and lower operating cost Higher asset base and provision for asset write-off

EBITDA margin
Normalised EBITDA

Normalised EBITDA Margin

Depn & Amort. Other Gains Net Finance Cost* FX (Gain) / Loss Profit Before Tax PATAMI Normalised PATAMI

5.5 50.6
(14.4) 229.6 598.3 240.1

278.3 50.9
122.5 337.2 302.2 137.3

-98.0 -0.6
+111.8 -31.9 +98.0 +74.9

215.4 57.9
15.8 334.8 400.7 238.4

-97.4 -12.6
+191.1 -31.4 +49.3 +0.7

286.5 185.2
58.6 1,001.2 1,191.0 634.8

373.3 245.2
(303.7) 1,360.2 1,206.5 563.7

-23.3 -24.5
-119.3 -26.4 -1.3 +12.6

Better yield income and lower interest expense USD strengthened vs. RM by 3.5%
-

Unrealised forex loss on USD debts nett of last mile tax incentive
-

Note: EBITDA Margin is calculated as percentage of EBITDA against Revenue + Other Operating Income For Normalised EBITDA and Normalised PATAMI refer Slides 10 & 11 Excludes FX (Gain )/Loss

Normalised EBITDA
In RM mn Reported EBITDA Non Operational ESOS (Income) - net

Improving margins due to higher operating revenue

4Q11 796.1 3Q11 812.5 4Q10 758.6 FY11 3,086.4 FY10 2,924.3

(5.0)

Loss on Sale of Assets

FX (Gain)/Loss on International trade Settlement AFS Impairment/(Write back) Receivables Normalised EBITDA Normalised EBITDA Margin Reported EBITDA Margin

0.3
12.9 (1.2) 808.1 32.5% 32.0%

0.2
(9.4) 803.3 34.2% 34.6%

1.0
20.9 15.4 795.9 33.5% 32.0%

1.3
21.9 (1.2) 3,108.4 33.5% 33.3%

2.1
21.7 15.4 2,958.5 33.1% 32.7%

EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & Impairment). EBITDA Margin is calculated as percentage of EBITDA against Total Revenue

Normalised PATAMI
In RM mn 4Q11 3Q11 4Q10 FY11 FY10

Reported PATAMI
Non Operational ESOS (Income) - net

598.3

302.2

400.7

1,191.0

1,206.5

12.9

(9.4)

20.9

21.9

(5.0) 21.7

FX (Gain)/Loss on International trade settlement (Gain)/Loss on Sale of Assets and Investments*

Unrealised FX (Gain)/Loss on Long Term loans Impairment of AFS receivables Last Mile Tax Incentives for prior years Normalised PATAMI

(5.2)
(14.5) (1.2) (350.2) 240.1

(278.1)
122.6 137.3

(214.4)
15.8 15.4 238.4

(285.2)
58.5 (1.2) (350.2) 634.8

(371.2)
(303.7) 15.4 563.7

* Comprise fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for sale) investments, mainly due to disposal of Axiata shares (2010: Axiata & Measat)

10

Cost % of Revenue1

Cost/revenue ratios maintained YoY

RM mn

RM8,015.4 89.6%
0.7 4.3 5.7 5.6 11.6

RM8,313.2 89.7%
0.8 4.4 6.1 6.3
% of Revenue

FY 2011 vs. FY 2010 Higher Depreciation & Amortisation mainly due to higher asset base, provision for asset write-off nett of change of useful life impact Lower Direct Cost mainly due to lower domestic interconnect and international outpayment Higher Manpower cost mainly due to higher staff benefits Higher Maintenance Cost mainly due to NGN, new IP core maintenance contracts and equipment rental Higher Marketing Expenses mainly due to higher commissions in line with Unifi growth
(Please refer to Appendix for quarterly details & breakdown)

11.3

Bad Debt Marketing Expenses

18.9

Supplies & material

19.8

Maintenance Cost

Other operating cost

Manpower cost

20.4

18.0

Direct cost Dep & Amortisation

22.3

23.0

FY10

FY11

Total Cost / Revenue ( %)

1

Revenue = Operating Revenue + Other Operating Income Note: The classification of cost is as per financial reporting

11

Group Capital Expenditure

Capex/Revenue ratios continued to improve

BAU Capex

12.8

12.4

Total Capex

1200 1000 800

1,128 309 308 511

1,139 395 343 401 FY11

Support System*

RM mn
30.8 28.0

600
400 200 0 2,563
Access

3,000 2,500

2,712

FY10 Note : BAU Business As Usual

Core Network

772 2,000 1,500 838

527

HSBB Capex**
976 1800 1600 1400 1200 1000 800 600 400 200 0
18.0
15.6

1,000
500 0 FY10
Access Core Network

1,584

1,102

463

1,424 132 633

1,060

530

FY11
Support System*

591

659

FY10
Access Core Network

FY11
Support System*

Capex / Revenue ( %)
*Include Application, Support System &Others (building, land improvement, moveable plants, application & other assets)

** Gross capex to be shared with Government equally 1H2010 capex has been restated to include IPTV Note: Government coinvestment treated as deferred income, to be amortised progressively to match against the depreciation of assets

12

Group Cash Flow & Key Financial Ratios

RM mn

Strong Balance Sheet to support future business requirements

FY11 3.488.0 3,030.7 (1,338.0) 1,808.5 (962.5) (5.6) FY10 3,490.2 2,973.4 (1,446.9) 2,198.9 (1,534.2) 5.5

Cash & cash equivalent at start Cashflows from operating activities Cashflows from / (used-in) investing activities
Capex*

Cashflows from financing activities Effect of exchange rate changes

Cash & cash equivalent at end Free cash-flow (EBITDA Capex)

4,212.6 1,277.9

3,488.0 725.4

net of HSBB grant received from Government (FY11 RM754.5mn, FY10 - RM513.1mn)
31 Dec 11

30 June 11 31 Dec 10 10 31 Dec

6.10% 8.65% 4.65% 1.65 6.33% 6.03% 7.67% 4.73% 1.62 6.58% Gross Debt to EBITDA Net Debt/EBITDA Gross Debt/ Equity Net Debt/ Equity Net Assets/Share (sen)

31 30 June 11 Dec 11

31 Dec 10 10 31 Dec

Return on Invested Capital Return on Equity2 Return on Assets 1 Current Ratio WACC

1.93 0.69 0.92 0.32 194.8

2.09 0.90 0.72 0.27 216.1

1 Based on Normalised EBIT 2 Based on Normalised PATAMI, comparative for Dec10 is amended to be consistent with current year computation

13

 Performance Overview Financial review Operating highlights

Concluding remarks

14

Group Total Revenue by Product

Voice
RM mn

Revenue growth driven by Internet, YoY growth >20%

Internet
-3.3%
RM mn

RM mn
+23.8% +4.2% +21.1%

FY11

RM9,151mn

-3.8% -3.2%

Others 17%
953 3,863 3,734 437 519 1,653 2,001 Internet 22% Data 20%
4Q10 3Q11 4Q11 FY10 FY11 4Q10 3Q11 4Q11 FY10 FY11

947

917

Voice 41%

541

Data
RM mn RM mn

Others
+3.7%
+14.7% +26.5% +5.0%

-1.4% +5.9%

RM mn

FY10
Others 17%

RM8,791mn

1,754 490 456

1,819 441 400 506

1,521

1,597

483

Internet 19% Data 20%

Voice 44%

4Q10

3Q11

4Q11

FY10

FY11

4Q10

3Q11

4Q11

FY10

FY11

15

Group Total Revenue by Line of Business Retail contribution to group revenue increases,
led by Consumer & Govt FY11
+2.0%

Retail
RM mn RM mn

Wholesale
+6.0% 6,783 7,192 +4.1% +5.2%

RM9,151mn

+9.3% +4.4%

Others Wholesale 4% 8% Global 9%

1,736

1,817

1,897

1,316 1,431 1,772 2,264

FY10

1,433 1,462 1,838 2,459

FY11

347 358 446

585
4Q10

361 370 458 629

3Q11

417 368 473 639

4Q11

755 193 191 201

770

Retail 79%
4Q10 3Q11 4Q11 FY10 FY11

Consumer

SME

Enterprise

Government

Global
RM mn
RM mn

Others*
-7.7% -19.1%
-5.1% +1.5%

FY10
Wholesale 9% Global 10% Others 4%

RM8,791mn

-7.2% +19.1%

915 276 215 256

845 115 98

338

343

93
Retail 77%

4Q10

3Q11

4Q11

FY10

FY11

4Q10

3Q11

4Q11

FY10

FY11

Note: Due to lower bandwidth sales

* Others comprise revenue from Property Development, TM R&D, TMIM, UTSB and MKL

16

Physical Highlights
Broadband Customer Growth
In thousand

Broadband growth driven by Unifi

WiFi Hotspot Zones

+12.3% +2.8% 1,830 1,871 1,923

+80.3%
+14.4%

2,400 2,000 1,600 1,200 800

1,485
1,545 1,610 1,713 1,772

273
+60

4 280
+65

14 285
+103

33 287
+59

64 291
+58

109 296
+41

164 314
+52

237 312 17,313 19,799 13,251 16,111 10,982 2,245 2,533

400
-

1,212

1,261

1,311

1,393

1,417

1,425

1,393

1,374

2,432

1Q10

2Q10

3Q10

4Q10

1Q11
Business

2Q11
UniFi

3Q11

4Q11

Net adds (in thousand) Note: inclusive of NBI initiative Residential

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

Fixed Line Customer Growth

-0.4% In thousand -0.4% 4,316 4,337 4,341

ARPU (RM) Fixed Line (DEL)* Streamyx Broadband**

*Call Usage Only

1Q10 35 82

2Q10 35 81

3Q10 35 77

4Q10 34 78

1Q11 33 77^

2Q11 34 77^

3Q11 34 78^

4Q11 34 78^

5,000 4,000

4,367

4,381

4,397

4,365

4,349

4 1,553 1,558

14 1,533

33

64 1,607

109 1,596

164 1,568

237
1,546

** Streamyx Gross ARPU only

^ Streamyx Net ARPU

1,535

3,000 2,000 1,000 2,763 2,775

2,794

2,799

2,710

2,692

2,633

2,566

0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11

Residential Business UniFi

17

UniFi leading & shaping the future

Unifi takeup continues to exceed expectations

+618.9%

UniFi update as at 22 February 2012

+43.9%
236,501

164,375

Delivered 1,179,000 premises passed covering 79 exchanges

13,901

109,019 32,896 63,541

34,659

24,479

15,912 201,842

4,125 28,771

8,385
55,156 +31 +45 1Q11 2Q11 93,107 139,896 +55 3Q11

Activated more than 283,000 customers - highest in Southeast Asia, Top 10 in Asia Pacific (source: FTTH Council Asia Pacific)
HSBB ARPU as at 31 Dec 2011 is RM184 Signed HSBB Services Agreement with with 11 property developers to deploy HSBB network infrastructure and services to new housing developments

4,051

1,445

12,456 +19 3,603 +10

2Q10 3Q10

448

+72 4Q11

4Q10

Net adds (in thousand)

Residential
ARPU (RM) Unifi (Blended) 1Q11 188

Business
2Q11 186 3Q11 184 4Q11 184

18

 Performance Overview Financial review

Operating highlights
Concluding remarks

19

Key Takeaways
Achievement of all Headline KPIs Revenue growth of 4.1% vs. FY2010; KPI: 2.5% growth Normalised EBITDA margin of 33.5%; KPI: 32% Internet & Multimedia revenue as main driver Continuous focus on profitability and cost Achievement of new Headline KPI TRI*M index score of >70; KPI: 70 Strong commitment to delivering enhanced customer experience and quality improvement programmes

Financial Performance

Customer-centricity

Focus on Excellence

Continued operational improvements Higher operating revenue, capex efficiency and better EBITDA margin HSBB rollout targets achieved 1.16mn premises passed; fastest rollout in region
Malaysias broadband champion 1.92mn total broadband (Streamyx and Unifi) customers Unifi takeup rate at >20% (over 236,000 customers) wider coverage, increased installation efficiency HSBB a global success story Commitment to create shareholder value Total dividend payout of RM700mn (including interim dividend of RM350.6mn paid in September 2011) Capital repayment of 30 sen per share by way of capital reduction totalling RM1.073bn

Broadband Champion

Shareholder Value

20

Outlook 2012

Continue to ride the broadband growth momentum -Enhance customer experience, product offering and service delivery -Maintain position as Malaysias Broadband Champion

Transformation towards Information Exchange -Leverage on strengths and capabilities, ICT-BPO powerhouse

Increased competition -Challenges and opportunities for TM Key Headline KPIs

2012
5.0

2014
5.0

Revenue growth (%)

EBITDA Margin (%)

32

Mid 30s

Customer Satisfaction Measure

72

72

21

Appendices

Cost % of Revenue
4Q11
Operating Revenue (RM mil) 2,447.2 37.0 16.8

3Q11
2,321.7 27.8 18.0

4Q10
2,320.6 52.7 19.4

FY11
9,150.7 120.9 18.0

FY10
8,791.0 152.9 20.4

FY11 vs FY10
Lower interconnect and international outpayment Higher staff benefits, higher welfare fund payments Higher customer acquisition cost, customer projects and cable cost Higher trade bad debt at Consumer

Other Operating Income (RM mil)

Direct Costs %

RM mil.
Manpower % RM mil. Supplies & Materials % RM mil.

417.3
19.1 475.4 6.7 165.9

423.4
19.5 458.3 5.9 139.5

460.1
20.9 497.2 7.4 176.0

1,665.9
19.8 1,838.4 6.1 570.1

1,825.4
18.9 1,692.9 5.7 514.1

Bad & Doubtful Debts %

RM mil.

0.8
19.8

0.3
6.8

0.8
18.3

0.8
72.8

0.7
66.9

Marketing Expenses %
RM mil.

5.2
129.7

4.7
109.7

3.7
87.8

4.4
407.7

4.3
385.7

Higher commissions, lower A&P

Maintenance Cost %
RM mil. Other Operating Costs % RM mil. Depreciation & Amortisation % RM mil. Total (RM mil)

7.4
184.8 11.9 295.2 21.6 535.9 2,224.0

6.9
162.4 10.1 236.9 24.7 580.7 2,117.7

5.1
121.4 10.7 253.9 23.8 565.7 2,180.4

6.3
587.0 11.3 1,043.3 23.0 2,128.0 8,313.2

5.6
498.9 11.6 1,035.7 22.3 1,995.8 8,015.4

Higher maintenance cost for NGN, new IP core maintance contracts, equipment rental

Lower building rental Higher asset base, new asset additions and asset impairment -

Total (%)

89.5

90.1

91.9

89.7

89.6

23

Group Balance Sheet

RM Million

As at 31 Dec 2011
6,968.8 162.9 10,053.9 6,402.7 1,559.6 2,072.7 18.9 17,185.6

As at 31 Dec 2010
7,709.4 150.8 8,630.3 5,506.0 1,664.2 1,432.1 28.0 16,490.5
6,938.5 1,801.5 527.8 3,488.5 1,120.7 4,289.5 3,639.2 26.0 624.3 2,649.0 13,112.1 729.4 16,490.5

Shareholders Funds Non-Controlling Interests Deferred & Long Term Liabilities Long Term Borrowings Deferred Tax Deferred Income Derivative financial liabilities

Current Assets Trade Receivables Other Receivables Cash & Bank Balances Others Current Liabilities Trade and Other Payables Short Term Borrowings Others Net Current Assets Property Plant & Equipment Other Non-Current Assets

6,925.6 1,444.6 506.8 4,213.0 761.2 4,186.2 3,552.1 7.7 626.4 2,739.4 13,613.0 833.2 17,185.6

24

RETAIL Total Revenue By Products

Revenue by Product
RM mn 8,000 6,783 1,454 1,637 871 +6.0% 7,192 1,589 1,982 982 Others Internet Data Voice Government 20% RM mn

Revenue by Business Unit

FY11

RM7,192mn

7,000
6,000 5,000 4,000 3,000

Consumer 34% Enterprise 20%

SME 26%

2,000
1,000 0

3,177

3,081

FY10 +9.3% RM mn 2400 1,736 1800 394 1200 431 215 600 787 0 4Q10 3Q11 775

FY11

+4.4% RM mn

FY10

RM6,783mn

1,817
374 514 266

1,897 520 535 230 752 Others Internet Data Voice Government 20%

Consumer 33%

Enterprise 21% SME 26%

4Q11

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination

25

WHOLESALE
Revenue by Product
RM mn 1000 800 600 400 +2.0%

Revenue by Customer Segment

770 85 ASP 17%

755 65

FY11

566

597

Others Data Voice

200
256 0 FY10 +4.1% RM mn 250 200 150 100 50 58 0 4Q10 3Q11 4Q11 54 54 193 23 191 22 +5.2% 201 23 FY11 224

MC 83%

FY10
ASP 16%

Others
154

151

155

Data Voice MC 84%

MC : Malaysian Carrier ASP : Application Service Provider

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination Others : Include internet

26

GLOBAL
Revenue by Product
RM mn 1200 1000 -7.7%

Revenue by Region
FY11
845 8 344
70 Others Data IRU Sales (Data) Voice Europe 10% North Asia 17% Oceania 10% Others 10% Africa & Middle East 6% America 13%

915 28 411
82

800
600 400 200 0

446

478

South Asia 34%

FY10 -7.2% RM mn 350 300 250 276 5 86 215 2 66 82 10

FY11

FY10
+19.1% 256 2 104 Others Data IRU Sales (Data) Voice Oceania 7% Others 14% Africa & Middle East 9% America 7% Europe 11%

200
150 100 50 0 4Q10

56

North Asia 14% South Asia 38%

111

143

126

3Q11

4Q11

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination Others : Include internet

27

THANK YOU
Any queries please email to : investor@tm.com.my

Investor Relations Level 11 (South Wing) Menara TM JlnPantaiBharu 50672 Kuala Lumpur, Malaysia Tel (603) 2240 4848/ 7366 / 7388