PT XL Axiata Tbk : Focus on FMC Business Acceleration XL Axiata Maintained Performance Growth Momentum

• Succeeded in achieving Revenue of IDR 23.88 trillion, growing 10% YoY and Normalized net profit of IDR 1.02 trillion, growing 4% YoY
• Sped up strong momentum in Fixed Mobile Convergence, with Home customers reaching to 206 thousand and Convergence penetration close to 70%
• Blended mobile ARPU maintained at IDR 42 thousand with subscribers at 57.5 million

Jakarta, 22 November 2023.PT XL Axiata Tbk (XL Axiata) succeeded in continuing the trend of profitability growth throughout the first 9 months of 2023, with strong growth in Revenue of 10% YoY to IDR 23.88 trillion, EBITDA 13% YoY to IDR 11.76 trillion, and EBITDA Margin to become 49%. Meanwhile, net profit after normalization (NPAT) reached IDR 1.02 trillion. Data and digital services revenue reached IDR 21.72 trillion, or around 91% of total Revenue. Furthermore, XL Axiata is increasingly optimistic about the future of its Fixed Broad Band (FBB) and Fixed Mobile Convergence (FMC) services as they continue to show significant traction, as we grew our FMC base customers.

The President Director and CEO of XL Axiata, Dian Siswarini, said, "In the midst of challenges and the intense competition of the telecommunication industry, we continued to achieve encouraging performance. In the nine-month period of this year, XL Axiata was able to maintain profitability that grew positively compared to the same period last year. The challenges ahead will persist. For this reason, we will continue to carry out various initiatives, including encouraging and accelerating the growth of the FBB and FMC businesses, which continue to show highly encouraging potential.

Dian emphasized that until the third quarter of 2023, there were 206 thousand Home service customers, with the significant addition of more than 52 thousand in three months. This achievement is attributable to the expansion of the XL SATU Fiber network, which has now reached 75 cities/regencies, including 12 additional cities/regencies in the last three months. On the other hand, XL Axiata was able to continue to increase convergence service penetration to 69% of Home service subscribers.

With a total number of subscribers reaching 57.5 million by the end of the third quarter of 2023, XL Axiata's mobile ARPU was recorded at IDR 40 thousand for prepaid services, IDR 90 thousand for postpaid, and IDR 42 thousand on blended basis. The increase in blended ARPU is in line with the company's focus on gaining and maintaining quality customers.

XL Axiata managed to maintain the stability of its operating expenses. The costs related to sales and marketing were lower compared to the same period the previous year, in line with the implementation of the digitalization strategy. Meanwhile, other cost components decreased compared to the previous quarter, such as interconnection costs and other direct expenses, labor costs, and supplies and overhead costs. Infrastructure expansion costs were in line with the growth of number of sites. Overall, the YoY operating expenses were maintained below revenue growth.

Furthermore, XL Axiata's digital transformation strategy, including developing customer experiences through MyXL and AXISNet applications, continues to show its effectiveness. Both apps have maintained optimal usage by customers throughout the first nine months of 2023. More than 27 million customers are actively using MyXL and AXISNet, with Monthly Active User (MAU) growth reaching 77% since December 2021.

The usage rate of MyXL and AXISNet shows the improved customer experience and monetization of XL Axiata through a better understanding of customer needs. As the users of two apps continue to grow, analysis on customer trends and behavior will be elevated, enabling the company to provide the right offers to the right customers at the right time.

One of the keys to XL Axiata's growth is the personalization of offers and services. This strategy has been implemented in the past nine months. As a result, net promoter score (NPS) data continued to improve significantly, driving service usage, and ultimately helping to increase revenue.

The result of implementing a digital-based strategy through data analytics has also enabled XL Axiata to invest in high-value areas and build networks, including to meet demand from all customer segments. The data analytics also allow XL Axiata to evaluate key performance indicators (KPIs) in all aspects related to customers, marketing campaigns, and customer loyalty so that the company can design the right strategies to face challenges and opportunities at the right time.

XL Axiata's financial position remained healthy as of the end of September 2023; gross debt was recorded at IDR 9.67 trillion, with a gearing ratio of net debt to EBITDA (including finance lease) of 2.67x. Net debt was recorded at IDR 7.4 trillion. XL Axiata has no USD-denominated debt. 37% of current borrowings have floating interest rates, and 63% have fixed interest rates. Free Cash Flow (FCF) was at a stable level, with an increase of 53% to IDR 6.21 trillion.

Network Performance Continues to Improve

XL Axiata continues to improve its network quality as the core support for convergence services and has succeeded in improving network performance and customer experience. XL Axiata's commitment to strengthening its network is reflected in the allocation of capital expenditure (CapEx) of IDR 8 trillion, the majority of which is to support network expansion needs.

By the end of September 2023, XL Axiata's total BTS had reached 158,225 BTS, including 103,408 units of 4G BTS. The number of BTS increased by 7% compared to the same period the previous year, with the level of connection to fiber optic networks reaching 61% (fiberized).

The continued investment and network strategy have successfully improved the quality of network experience to support higher service usage. This is reflected in service traffic that grew by more than 21% YoY, reaching 7,109 Petabytes.

Continue to Accelerate FMC Services

The strong collaboration between XL Axiata and Link Net is expected to increase the penetration of convergence services in Indonesia. In the next five years, both parties will expand service coverage to 8 million home passes. XL Axiata and Link Net have signed a cooperation agreement to build and operate the first 1 million homes passed network covering many cities/regencies in Indonesia.

With the addition of 1 million homes passed, XL Axiata will accelerate the penetration of XL SATU service convergence. In this collaboration, XL Axiata has prepared the planning and design of target markets that can serve the needs of convergence services. Meanwhile, Link Net will carry out network design and capacity to meet the needs of XL Axiata's target market.

XL Axiata now continues to develop products for the corporate and small and medium enterprise (SME) segments. The development of FMC services in corporations and SMEs will be combined with the increasing need for Information and Communication Technology (ICT), the Internet of Things (IoT), and Big Data services.

As of the end of September 2023, XL Axiata's FMC service penetration rate has reached 69%, where XL Home customers have switched to XL SATU customers, indicating strong demand for this convergence product. Currently, XL Axiata also has XL Home and XL SATU fiber coverage in 75 cities/regencies.

During this nine-month period, XL Axiata has also won appreciation from within and outside the country, including the Indonesia Technology Excellence Award for ICT Telecommunication - International Asian Technology Excellence Awards; Top 50 Big Capitalization Public Listed Company & Best Role of Stakeholders - 4th IICD Corporate Governance Award 2023; Best Award for External Relations Category with Smart Mining Innovation: Digitalization for Greener Future - IDX Channel Anugerah Inovasi Indonesia (ICAII) 2023; Best Companies to Work for in Asia - Indonesia Chapter, and Digital Transformation from HR Asia Best Companies to Work for in Asia Awards 2023; Broadband Telecom Company of the Year - Indonesia and Marketing & Brand Initiative of the Year - Indonesia for XL Home from Asian Telecom Awards 2023; Main Index, High Growth and High Market Capitalization Awards - TEMPO Index- IDNFinancials 52.