XL Axiata Tbk PT : Transformation Delivered Results, Strengthening Financial Position Through Rights Issue

XL'S TRANSFORMATION DELIVERED RESULTS, STRENGTHENING FINANCIAL POSITION THROUGH RIGHTS ISSUE

• Third consecutive quarter of revenue and EBITDA growth
• Addition of 500k subs bringing total subs to 42m
• XL announces rights issue to repay USD shareholder loan

Jakarta, 01 February 2016 - PT XL Axiata Tbk. (XL) today announced its audited results for the 2015 financial year ended 31 December 2015 as well its plan to conduct on a rights issue with proceeds from the capital raising to repay XL's USD 500 million shareholder's loan.

President Director/CEO of XL, Dian Siswarini said 'We have ended 2015 on a positive note with further improvements in our operating and financial performance and we hope to build on the foundations we have laid this year and deliver a stronger performance in 2016.'

XL posted its third consecutive quarter of revenue growth with 2% QoQ in 4Q 15 driven by growth in the core usage revenue of 2% QoQ with a solid performance by the Data (up 15% QoQ) segment.

The biggest improvement was in Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) which increased 6% QoQ to Rp 2.3 trillion resulting in an EBITDA margin of 39% up 1 percentage point QoQ. The increase was mainly due to positive impacts from the reshape of the customer base to focus on the more profitable subscribers as well as efforts to improve profitability of the product portfolio. This is also the third consecutive quarter of EBITDA and EBITDA margin improvement.

XL continues to focus on being the leader in mobile internet in Indonesia. In line with this and the increased adoption of data enabled phones and reason to use have led to continued strong growth in data traffic. Data traffic grew by 54% YoY in 2015 compared with the same period last year with total Data users at 22.5 million or 54% of the total base.

The growth of smartphones has successfully driven the increase in Data adoption in Indonesia. XL's smartphone penetration has grown to a penetration of 42% of its base as at end 2015. XL smartphone users grew 10% YoY and reached 17.7 million users.

During the quarter, XL introduced HotRod 4G packages which offers LTE quotas at affordable prices following the commercial nationwide launch of 4G LTE services on the 1,800 MHz spectrum so that customers can experience high-speed quality internet services. Throughout the year, XL also continued to drive customer adoption of 4G enabled handsets in-line with its transformation agenda of targeting higher-value subscribers by offering bundling options with various smartphones from Apple, Samsung, Xiaomi, Alcatel, Lenovo, LG, and Sharp

XL ran successful marketing campaigns such as '60 Mazda, 60 Days, 60 Winners' to increase and encourage customer reload activity during the year with attractive prizes. Further, XL increased distribution activity via modern channels by introducing 'Harga Pas' for sales at convenience stores such as Indomaret and 7-Eleven as well as introducing more options for reloads.

4G LTE is a key part of XL's mobile internet leadership strategy to meet consumer's demand for high-speed internet. Thus XL's 4G LTE footprint is now at 3,134 sites as at end 2015 with presence in over 35 cities and areas. XL also continues to invest in improving its network quality and coverage with more than 18,000 3G Node Bs at the end of 2015 taking total BTS site footprint to 58,879.

During 2015, XL had a paid capex of Rp 4.1 trillion on efforts to expand its Data infrastructure and mobile services which was funded via internally generated funds. Total debt decreased to Rp27.0 trillion from Rp29.6 trillion as at the end of 2014 while Net Debt/EBITDA increased slightly from 2.6x to 2.8x.

For the 2015 period, XL recorded a net loss of Rp 25 billion mainly due to forex impacts from the strengthening of the USD. Adjusting for these impacts, XL would have recorded a normalized net profit of Rp 51 billion.

XL started 2015 with the implementation of its '3R - Revamp, Rise & Reinvent' transformation agenda implemented at the start of 2015. To recap, the transformation involves: Revamp - to shift subscriber acquisition (from largely 'no value' to 'value' subs) & distribution strategies as well as a total overhaul of the product portfolio to improve yields. Rise - moving the XL brand up the value ladder and via a dual-brand strategy with Axis to address different segments of the market. Reinvent - going beyond today's business model.

The rationale for this transformation is to adapt to the changing market dynamics and focus on value creation as XL seeks to build a more sustainable business for the future.

XL has ended the year on a strong note as its transformation agenda continues to deliver promising results evidenced by improving operational and financial metrics. This underpins XL's belief that the decision to embark on this strategy was the right one and 2016 will be a year to build on the foundations laid in 2015.

XL also announced its intention to embark on a rights issue with the net proceeds from the rights issue to be used to repay XL's USD 500 million shareholder's loan.

The capital raising has been structured as a rights issue in order to allow existing shareholders of XL to participate in the future growth of the Company. To demonstrate its continued commitment as major shareholder of XL, Axiata Group, who currently owns approximately 66.4% of XL, has expressed its intention to fully subscribe for its pro rata rights entitlement under the rights issue. Any remaining shares not subscribed for other shareholders in the rights issue are expected to be fully underwritten.

Commenting on the rights issue, President Director and CEO of XL, Dian Siswarini said 'We have seen solid progress and momentum with our transformation agenda launched in 2015. In addition, we have proactively embarked on Balance Sheet Management Initiatives to strengthen our financial position and reduce exposure to foreign exchange volatility. The rights issue is an important step in strengthening our foundation as we embark on the next chapter in our transformation agenda. Net proceeds from the rights issue will be used to repay our U.S. dollar denominated shareholder's loan.'

The rights issue is subject to shareholder approval through an extraordinary general shareholders meeting ('EGM'), scheduled for 10 March 2016, as well as obtaining an effective letter from the Financial Service Authority ('Otoritas Jasa Keuangan/OJK') with respect a registration statement to be submitted by the Company. The capital raising is anticipated to be completed by 1H 2016. The rights price will be jointly determined and fixed by the Board of XL Axiata and Standby Purchasers and is expected to be no more than 20% discount to the TERP* as of the price fixing date. The terms of the rights issue, including the price of shares relating to the rights offering and the final number of shares to be offered will be announced in due course.

Credit Suisse and Mandiri Sekuritas have been appointed as financial advisors for the rights issue.

About PT XL Axiata Tbk.

PT XL Axiata Tbk. is one of the major cellular providers in Indonesia. PT XL Axiata Tbk. is (66.4%) owned by Axiata Group Berhad through Axiata Investments (Indonesia) Sdn Bhd and public (33.6%), and is part of Axiata Group ('Group'). The Group's mobile subsidiaries and associates operate under the brand name 'Celcom' in Malaysia, 'Dialog' in Sri Lanka, 'Robi' in Bangladesh, 'Smart' in Cambodia, 'Idea' in India and 'M1' in Singapore.

For further information, please contact:

Turina Farouk

Vice President Corporate CommunicationXL

Telp : 628170108000

Email : TURINAF@xl.co.id

PT XL Axiata Tbk issued this content on 01 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 06 February 2016 02:33:13 UTC

Original Document: http://www.xl.co.id/corporate/id/investor/informasi/xl-transformation