#1ANALYST BRIEFING 1Q 2023 Results TM Dato' Imri Mokhtar Managing Director/ Group Chief Executive Officer Razidan Ghazalli Group Chief Financial Officer 25th May 2023#2TABLE OF CONTENTS 1. Industry Updates 2. 1Q 2023 Performance Review 3. Customer Segment & Product Overview - Unifi - TM One - Credence - TM Global 4. Cost, Investments & Other Financials 5. ESG 6. Conclusion 7. Appendix TM#3SOLAR PANEL PARTS INVENTORY [S-562-IV-99825] SECURED CONNECTION. DATA UPDATED TODAY 9.00 AM CHARGE CONTROLLER 327 X 02357189 SHELF NUMBER DETAILS EDIT 000000 FUSE BOX 000 000 O 120 X 1016753 SHELF NUMBER DETAILS EDIT *88* 0 O OUTPUT AC REACTOR 592 X 998103 SHELF NUMBER DETAILS EDIT DP SWITCH 249 X 489023 SHELF NUMBER DETAILS EDIT 95 3444 6953331956 9200 QUALITY CONTROL PASSED. ALL COMPONENTS ARE IN THE BEST CONDITION. REFER TO DOC-23-A/54 FOR FURTHER DETAILS. INDUSTRY UPDATES 00 00 TM#4TM Industry Updates DNB & 5G Dual Wholesale Network TM supports the move towards a two-phased 5G Dual Networks implementation Phase 1 - Road to 80% 1. DNB to continue the network rollout to achieve 80% coverage of populated area (COPA) 2. Full participation by all service providers 3. Optimisation of infrastructure and consolidation of existing resources Phase 2 - Shift to dual networks 1. Composition of service providers in Entity A and Entity B will be determined later 2. Entity A to continue operating DNB's network 3. Entity B will develop second 5G network starting as early as January 2024 As a next step, TM will participate and work together with the Dual Network Implementation Task Force to ensure 80% COPA (Phase 1) and smooth transition to dual networks (Phase 2) The objective of the Task Force is to monitor the framework and transition plan towards a dual network model for 5G which covers the aspects of legislation, technical and finance Source: KKD Minister's Announcement dated 3 May 2023 and 9 May 2023 4#51Q 2023 PERFORMANCE REVIEW Monthly B TM#61Q 2023 Highlights Revenue RM2,951.5 mil 2.0% increase YoY 0.9% decrease QoQ EBIT RM473.3 mil 15.5% decrease YoY >100% increase QoQ PATAMI RM330.1 mil 2.9% decrease YoY >100% increase QoQ CAPEX/Revenue % 14.0% 1.5pp increase YoY 18.9pp decrease QoQ Fixed Broadband Subs 3.08 mil 8.1% increase YoY 1.4% increase QoQ Embracing opportunities amidst challenges YoY revenue improvement Higher QoQ profitability Continuous growth at Unifi and TM Global TM 6#71Q 2023 Reported Results Positive YoY revenue and EBITDA RM million REVENUE +2.0% -0.9% 2,892.4 2,978.3 2,951.5 EBITDA +7.3% +3.6% 1,249.3 1,205.9 1,163.9 EBIT PATAMI -15.5% +>100.0% TM 560.4 -2.9% +>100.0% 473.3 339.9 330.1 222.3 160.2 Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 7#8Underlying EBIT Higher underlying EBIT from normalizing items EBIT walk from reported, RM million Reported EBIT 1Q 2023 FX Changes Impairment on Assets Accelerated Depn. on Assets Underlying EBIT 1Q 2023 5.4 473.3 121.0 42.0 630.9 TM 8#9T CUSTOMER SEGMENT & PRODUCT OVERVIEW unifi TM ONE TM GLOBAL Ccredence TM#10| Unıfı Maintaining Growth Trajectory Continuous growth of customer base & ARPC Revenue Trend RM million +4.3% +0.5% 3,037 3,052 3,055 3,023 3.002 Home 1,428.9 1,436.3 No of Customers SME 396 1,376.6 391 396 389 Total (in '000) 384 Q1'22 Q4'22 Q1'23 YoY increased due to: • Higher cumulative fixed broadband subscribers driven by aggressive sales, promotions & retention programs QoQ is higher due to: . Higher revenue contributed by the increase of broadband subscribers Note 257 255 ARPC 252 252 253 SME In RM/ month Home 119 117 117 115 116 . Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 TM Home ARPC increase QoQ with a growth from Broadband take-up via attractive package offerings while SME ARPC continues to grow through improvement in Broadband speed mix and solutions take-up. ARPC: Average revenue per customer (average revenue contributed by a customer based on products subscribed with Unifi) 10#11| Unıfı Maintaining Growth Trajectory Continuous growth of customer base & stabilizing ARPU Revenue Trend TM 137 RM million +4.3% +0.5% 136 132 Fixed Broadband ARPU¹ 132 132 Unifi Streamyx 1,428.9 1,436.3 95 96 113 97 100 108 1,376.6 Q1'22 Q4'22 Q1'23 YoY increased due to: • Higher cumulative fixed broadband subscribers driven by aggressive sales, promotions & retention programs QoQ is higher due to: +8.1% Fixed Broadband 2,981 3,037 2,849 2,917 Subscribers Total (in '000) . Higher revenue contributed by the increase of broadband subscribers Note 1. ARPU: Average revenue per user (average revenue contributed by a service) +1.4% 3,080 2,635 2,760 2,875 2,962 3,023 Unifi Streamyx 214 157 106 Q1'22 Q2'22 Q3'22 75. Q4'22 57 Q1'23 11#12TM Managing Headwinds ONE Navigating challenging market and shifting customer demand Revenue Trend RM million -6.7% -4.4% 773.7 755.2 Q1'22 YoY & QoQ decreased mainly due to : 721.9 Q4'22 Q1'23 ■ Impact from price reduction from large contracts Lower Customer Project due to reduction in one-off revenue realisation ༦ 5G TM ONE TM The recurring business. across key market segments remains solid with growing shift towards business solution. The delivery of key projects across industries set the pace for TM One for the coming quarters. TM One delivered Private 5G solution and hybrid cloud project that empowers Smart Industry. It is also the only service provider with a 100% completion of Point of Presence (POP) Phase 1 Project covering 233 sites across the Northern states, Sabah and Sarawak. Building on the success of TM One 5G Sphere Partner Programme launched in 4Q2022, TM One launched its Sandbox platform in March 2023, providing a secure and controlled environment for TM One's customers and partners to develop, co- create, test, and commercialise innovative smart services solutions, to amplify digitalisation for businesses, communities and the Government. 12#13C credence ATM Company | Promising B2B digital services revenue Since the launch of Credence in July 2022, Credence portfolio shows a YoY growth of 33% 2023 Offerings Credence has consolidated professional services offerings into respective solution pillars - Cloud, SaaS and Analytics in order to deliver greater value to our enterprise customers. This approach Aligns with Industry Trends: Consolidation matches enterprise customer demand for integrated solutions. Enhances Customer Experience: Offers a more cohesive suite of solutions driving better outcomes. Leverages Synergies: Optimizes resources and boosts operational efficiency. Q1 Key Achievements TM Since the launch of Credence in July 2022, the enterprise digital portfolio comprised of Cloud, SaaS, Software and Analytics delivered 19% portfolio growth¹ in FY 2022. O In Q1 2023, this portfolio has grown by 33% which is driven by: Prioritization of specific SaaS solutions, Analytics and Cloud services as the skills development and growth areas, which has shown healthy signs of growth and success. Credence showed 161% YoY growth in SaaS & Analytics and successfully delivered services through its own capability. Development of in-house capabilities around Application modernisation, Analytics and Cloud services. Some customer projects delivery include: (☑☑ Cloud Platform, Cloud Services, Managed Services SaaS, Consulting Software π Digital Upskilling ull Analytics, Application Modernization 8 PETRONAS TOURISM MALAYSIA® UMW SSM Civil SURUHANJAYA SYARIKAT MALAYSIA COMPANIES COMMISSION OF MALAYSIA (Agensi di bawah KPDNHEP) 1. 19% FY2022 portfolio growth is a downward revision from 90% that was announced in Q4 2022, mainly driven by change in accounting treatment for software sell through revenue SUNWAY 13#14TM Continuous Steady Growth YoY GLOBAL Bespoke connectivity solutions for domestic and international segments; connecting Malaysia to the world in bridging the digital divide and positioning Malaysia as regional digital hub within the region Revenue Trend RM million Domestic Revenue +3.9% ୮ +0.9% 643.7 649.2 625.1 Q1'22 QoQ increased due to: Q4'22 Q1'23 Higher IRU & International Voice (Hubbing & Bilateral) YoY increased due to: +20.4% Q1'22 Q4'22 Q1'23 International Revenue -13.0% Higher Domestic Data (5G Fibre Leasing, HSBA) • Higher Global Colocation & Voice (Hubbing) Q1'22 Q4'22 Q1'23 Catalysing digital inclusivity in Malaysia through 4G and 5G sites deployment, high- speed broadband access coverage expansion, as well nationwide as edge capabilities enrichment to propel national digital initiatives. DOMESTIC TM . Delivered close to 8,000 cumulative 4G and 5G fiberised sites to address greater demand by industry players and enrich digital infrastructure nationwide Continuously recording great achievement with highest installation peaked in March for High Speed Broadband (HSBB) Access in serving increasing requirements from domestic service providers Provisioned more than 10Tbps Remain focused on positioning Malaysia as the preferred digital hub for the ASEAN region through International Data offerings (submarine connectivity, cable Co-location, CDN) for hyperscalers, global carriers and digital players INTERNATIONAL • International Data services to Singaporean incumbent telco; connecting Malaysia to Singapore Delivered close to 1.5 MW wholesale data centre solutions for North Asia digital provider and US-based hyperscaler in IPDC Lower YoY is mainly due to planned IRU deals that will be materialised in Q2 onwards 14#15Revenue by Product YoY Revenue growth from Internet & Others VOICE ୬ INTERNET -2.7% +0.1% 584.0 567.6 568.1 +5.9% +2.9% • llll 00000 DATA -3.5% OTHERS -5.3% 1,077.4 1,108.5 1,140.5 809.4 77 794.6 766.4 +9.2% -3.3% Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 YoY decrease due to: • Lower International Voice at TM Global . Lower rental & usage at Unifi & TM One QoQ, and YoY increased due to: Higher cumulative Unifi & fixed broadband subscribers TM 492.8 476.5 436.4 Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 QoQ & YoY decreased due to: Lower IRU revenue at TM Global QoQ declined due to: Lower customer projects at TM One • Lower Enterprise data services from MyGov*Net 2.0 new pricing & model YoY increased due to: • Higher ICT revenue at TM One Higher co-location revenue at TM Global 15#16COST, INVESTMENTS & OTHER FINANCIALS TM#17TM Total Cost/Revenue % Lower YoY Direct Cost and Manpower Direct Cost, RM million -1.1% Operational Costs, RM million % Total Cost to Revenue 683.7 614.3 +10.1% 676.5 +20.3% -33.0% 625.5 94.4% 418.9 84.5% 81.3% 20.6 348.3 22.9 23.6 19.8 Q1'22 Manpower, RM million Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 21.1 24.8 21.0 Dep. & Amortisation*, RM million 14.2 12.0 -12.9% +5.5% 715.8 590.6 ד +28.6% -21.1% 983.6 ד 33.0 26.3 20.9 623.1 603.5 776.0 Q1'22 Q4'22 Q1'23 Direct cost Manpower Operational Cost Depreciation & Amortisation* Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 Notes: Including impairment 17#18Group Capital Expenditure Capex for Q12023 has reduced from previous quarter CAPEX/Revenue (%) TM CAPEX Breakdown (RM mill) 12.5% Q1'22 214 82 65 361 +14.4% 32.9% Q4'22 392 218 370 980 14.0% Q1'23 297 75 41 413 Access Core Support TM 18#19RM mn Group Cash Flow & Financial Ratios Improved Cash flow from Operations & Value Creation Cash Flows from Operating Activities Cash Flows used in Investing Activities Cash Flows used in Financing Activities Cash and Cash Equivalents at beginning of the Financial Period Effect of exchange rate changes Cash and Cash Equivalents at end of the Financial Period 1,708.7 Q1 2022 Q1 2023 769.1 670.9 -554.5 -485.7 -392.8 -446.4 1,880.0 2,344.3 6.9 -19.9 2,063.2 Free Cash Flow 1 659.0 677.7 Financial Ratios Return on Equity Return on Assets Return on Invested Capital WACC Current Ratio Gross Debt to EBITDA Net Debt/EBITDA Gross Debt/Equity Q1 20222 Q1 20232 13.87% 16.21% 4.56% 5.47% 8.67% 10.68% 8.33% 7.99% 1.15 1.17 1.69 1.42 1.19 0.95 1,02 0.93 Net Debt/Equity 0.72 0.63 201.86 199.85 Net Assets/Share (sen) Notes: 1. Free Cash Flow = EBITDA-CAPEX-Lease Repayments 2. Based on 12 months trailing figures and normalised numbers where applicable TM 19#20ENVIRONMENTAL, SOCIAL & GOVERNANCE ATS ARE STA 00 TM 20 20#21TM Group ESG Progress We are committed towards a sustainable tomorrow Our Commitments Environmental Protect & Preserve the planet via reduction of GHG emission • Carbon Emission reduction by 30% in 2024 • Carbon Emission reduction by 45% in 2030 . Net Zero emission by 2050 • Task Force on Climate-Related Financial Disclosures (TFCD) disclosure by 2023 • Social Enrich Social Prosperity and Livelihood with digital inclusiveness At least 70% of premises with high speed internet access to enable Digital Malaysia by 2025 100% mega suppliers complied with ESG by 2024, 50% mid-tier suppliers complied by 2030 Minimum of 30% women representation in Board by 2022 • • Governance Responsible conduct with highest standards of ethics, integrity and transparency A zero tolerance approach to all form of corruption Continue driving improvement & disclosure on anti-corruption (OACP & ABMS) and corporate governance agenda Our Progress Carbon Emission reduction by 12.38%¹ in Q1, 2023 (vs 12.45% in Q4 2022) through • Scope 1- Fleet optimisation • Scope 2- Energy saving/optimisation and renewable energy • Scope 3- Reduce waste through green campaigns (3R) and awareness • TCFD First TCFD report published in TM's website Bridging Connectivity with high speed internet with 71% premises passed in Q1, 2023 (vs 69% in Q4, 2022) Women representation as at Q1 2023 (no changes since Q4 2022): • 36% in Board • 31% in TM's Management bench² 40% in total TM's workforce Continuous ESG engagement with key stakeholders and progressive validation exercise with mega & mid- tier supplier as per target for ESG on- boarding 100% Warga TM & Suppliers signed TM Intergrity Pledge Progressive execution of OACP action plan, 24% completion in Q1 2023 Ongoing ABMS certification & compliance - cover high risk processes in 7 divisions Continuous tracking on ESG KPI for Pivotal Positions Tracked and rated by leading rating agencies 4 (Status-quo) FTSE4Good TM AIGA Gold Winner of the 2022 National Integrity, Governance, and Anti-Corruption Award (AIGA) 21#22CONCLUSION 22#23☑ Key Takeaways TM 2023 is expected to be a challenging year with changes in the regulatory landscape, heightened competition and other market dynamics uncertainties. We continue to embrace opportunities amidst the challenges focusing on revenue growth from all our Lines of Business: Unifi continue to increase the fixed broadband subscriber base TM Global pursuing to capture opportunities for strong demand in Domestic and International segments In addition, we maintain close cost monitoring to improve profitability while making capital investments for future business development. As a result, despite lower profitability, our financial indicators have continue to improve from the previous year. The Group is cautious of the economic landscape and customers' measured spending but remains steadfast in the final year of its 2021-2023 Transformation Programme to continue strengthening its core business to be commercially sustainable as a PLC whilst continuing to contribute to the nation's growth via its role as a GLC. As the national connectivity and digital infrastructure provider, executing the nation's fiberisation plan in support of the Government's National Digital Network (JENDELA), TM completed Phase 1 of the Point of Presence (POP) project installations, across the northern region, Sabah, and Sarawak. This new fibre optic network hub programme contributes towards improving internet experience for schools and the general public in rural areas. TM is also committed to continue playing an active role in the 5G implementation, leveraging on its nationwide fibre infrastructure, extensive digital platforms (data centre, edge nodes) and rollout experience. TM maintains its dedication to strengthening its core business despite the challenges posed by the current economic landscape and regulatory policy developments in the industry. To manage the effects from the implementation of Mandatory Standard on Access Pricing (MSAP) and sustain a relatively stable revenue for the year, the Group will exercise prudence in operational spending and prioritize investments in areas that promote business growth, such as cloud services, data centers, and the expansion of submarine cables. As TM transitions from being a Converged Telco to a Human-Centered TechCo, the Group remains committed to fostering a sustainable Digital Malaysia through technology that empowers communities, businesses, and the Government. 23#24QUESTION & ANSWERS TM 4#25APPENDICES TM 25#26Cost % Revenue comparison 1Q 2022 4Q 2022 1Q 2023 Revenue QoQ YOY (RM mn) 2,892.4 2,978.3 2,951.5 Direct Costs % 23.6% 20.6% 22.9% +10.1% -1.1% RM mn 683.7 614.3 676.5 Manpower % 24.8% 19.8% 21.1% +5.5% -12.9% RM mn 715.8 590.6 623.1 Operational Costs % 12.0% 21.0% 14.2% -33.0% +20.3% RM mn 348.3 625.5 418.9 YoY Commentary TM Lower Customer Project cost at TM One Lower IRU direct cost, in line with lower IRU revenue at TM Global Balanced with higher Commission Outpayment at Unifi from higher new installations 1Q 2022 include separation cost which may be included in future quarters for 2023 Balanced with higher salary costs Higher Maintenance Cost Higher Utilities Cost Increased License Cost Higher Advertising & Promotion Total OPEX 1,747.8 1,830.4 1,718.5 -6.1% -1.7% Dep & Amortisation % 20.9% 33.0% 26.3% Higher CAPEX -21.1% +28.6% Impairment on Assets in the current quarter RM mn 603.5 983.6 776.0 Total Cost 2,351.3 2,814.0 2,494.5 -11.3% +6.1% (RM mn) Total (%) 81.3% 94.4% 84.5% -9.9pp +3.3pp 26#27Statement of Financial Position RM mn Shareholders' Funds Non-controlling Interests As At 31 March 2023 7,977.4 As At 31 March 2022 7,617.3 Variance 4.73% -188.04% 153.9 (174.8) Deferred & Long Term Liabilities Long Term Borrowings Lease Liabilities Deferred Tax 9,306.5 10,019.6 -7.12% 4,635.1 5,331.5 -13.06% 1,602.5 1,490.5 7.51% 1,403.5 1,526.2 -8.04% Deferred Income 1,640.5 1,646.5 -0.36% Others 24.9 24.9 0.00% 17,437.8 17,462.1 -0.14% Current Assets 6,890.4 6,407.9 7.53% Trade and Other Receivables 3,000.6 2,439.4 23.01% Cash & Bank Balances 2,321.8 2,497.9 -7.05% Inventories 320.5 168.0 90.77% Others 1,247.5 1,302.6 -4.23% Current Liabilities 5,889.1 5,441.7 8.22% Trade and Other Payables 3,480.2 3,624.7 -3.99% Short Term Borrowings 631.1 381.3 65.51% Lease Liabilities Others 187.0 310.8 -39.83% 1,590.8 1,124.9 41.42% Net Current Assets/(Liabilities) 1,001.3 966.2 3.63% Non-Current Assets 16,436.5 16,495.9 -0.36% Property Plant & Equipment 13,294.6 13,272.7 0.17% Other Non-Current Assets 3,141.9 3,223.2 -2.52% 17,437.8 17,462.1 -0.14% TM 27#28Corporate Finance & Investor Relations Level 11 (North Wing), Menara TM Jalan Pantai Baharu 50672 Kuala Lumpur Malaysia www.tm.com.my/investorrelations [email protected] THANK YOU 28