FY2022 Full-Year Financial Results Briefing

Good morning and warm welcome to all investors and analysts. Thank you for joining us today for Singtel's results briefing for the financial year ended 31 March 2022. On behalf of our Senior Management here we really appreciate you coming to Comcentre, for our online audience we are actually broadcasting to you from the FutureNow Innovation Centre at Comcentre in Orchard vicinity. All right, we hope you could join us in due course.

So, we have audience, this is a hybrid event. We have audience here, as well as online via Zoom. I am told that we already have more than 60 participants online, so we are good to start. The format of today's briefing is really it will be a presentation, a short presentation, by our Group Chief Executive Officer Mr Yuen Kuan Moon. Then it will be followed by a Q&A session which will start with the audience here in Comcentre, before we adjourn to invite questions from the online audience.

Just a bit of housekeeping. For online participants, later when you ask your questions, we hope you could on your video, allow us to be interacting with you. Then another rule would be, hopefully you do not mind but we are going to be recording this event for future playback purposes. So, without further ado let me bring on Moon.

Good morning, everyone, it's good to be back in physical face-to-face meetings. I understand we traditionally will conduct just an audio conference. But I thought with the opening up and post- pandemic restrictions it is good to bring everybody back into a face-to-face meeting. But also welcome to our 60 online dial-in participants.

So let me start by covering a few selected slides focusing on our key financial highlights, progress of our strategic reset announced one year ago. I will leave ample time to address any follow-up questions. The full set of slides will be available on our website.

We have seen an improved set of results in our financial year FY22 in spite of the pandemic and uncertain macro environment. NPAT grew 2.5-times on exceptional gains, mainly coming through from our ATN divestment, while underlying NPAT increased 11%. Optus, Airtel and NCS posted strong

Financial Results FY Ended 31 March 2022 27 May 2022 results, while in Singapore growth in data centres, fixed broadband and a pick-up of mobile roaming mitigated some of the structural challenges in our carriage business.

We have made good progress in our first year of our strategic reset. We grew 5G market share and developed growth engines in NCS digital services to capitalise on accelerating digitisation trend. We have also unlocked more than S$2 billion through active capital recycling to fund some of our growth initiatives.

We also introduced a robust capital management framework to ensure sustainable dividends to shareholders, and also to provide financial flexibility for growth. Entering into the new financial year we are buoyed by what we see in the horizon of a strong digitalisation momentum by enterprises, and also the lifting of Covid restrictions not just in Singapore, but everywhere else in the world.

Revenue slid 2% due to the decline in our NBN migration revenue, and also a drop in equipment sales driven primarily by supply chain disruption and chipset shortages. Australia mobile services increased with higher customer as well as higher ARPU. While NCS and data centres led the growth in ICT services.

Excluding NBN migration revenue, as well as job support schemes from the government, revenue would have been stable and EBITDA and EBIT would have risen 8% and 33% respectively.

Regional associates' profit before tax rose significantly on Airtel's earnings recovery and sustained growth momentum in Airtel Africa. Underlying net profit after tax rose a strong 11%. ROE was lifted by exceptional gains, while ROIC is currently at 5.4%. We believe it has got room for improvement, and we will have strong plans to address that.

We propose a final ordinary dividend of 4.8 cents per share, an increase of 2.4 cents, giving a total dividend to 9.3 cents a 24% increase over last year, and payout ratio of 80%.

Our financial position remains robust. We generated over S$5 billion in cash, with an increased free cash flow from Optus and special dividends from Telkomsel and S$2.1 billion in capital recycling. We reduced our net debt by S$2.3 billion, and improved other debt metrics.

Our capital management framework protects dividends without sacrificing growth. So, besides Capex for regular network, spectrum payment, interest, and the remainder of operating cash is returned to shareholders. As earning grow, so will dividends.

For growth investments like 5G, digibank or data centres, the primary source of fundings will be from asset recycling or through capital partners. This framework actually incentivises us to be capital efficient, and to have a very clear focus on ROIC. Around S$3 billion of assets have been identified as targets for recycling in the mid-term. We have continued to seek capital partners to co-drive the long-term success of some of our growth initiatives.

FY22 has been a busy year as we executed to the first year of our strategic reset. We lead in 5G with market's fastest speeds and launched differentiated services. For example, in Optus with the Living Network and in our 5G Enterprise Space on the mobile edge computing platform through Paragon.

NCS acquisitions in Australia will give it the scale and credibility to compete in a new market. The two acquisitions from NCS, Dialog and ARQ, will add approximately S$300 million of annualised revenue. We expect to create a bigger impact in Australia’s IT services market.