PT XLSMART Telecom Sejahtera Tbk

Ladies and gentlemen, good afternoon and welcome to Excel Smart's first quarter 2026 Learning School. My name is Christopher, Head of Investor Relations, and I'll be coordinating today's call. Our presentation and financial results were released this morning and are available on our Investor Relations website. We'll begin today's call with feedback remarks from our management team, followed by a hybrid Q&A session. To ask a question, please type it in the Q&A box along with your full name and company. We will read your questions for management to address. If time permits, we may open your line for live follow-up questions. As a reminder, this session is being recorded. I would like to introduce our speakers for today's call. Mr. Rajiv Sethi, President Director and CEO. Mr. Anthony Susilo, Director and Chief Financial Officer. Mr. David Marcellus-Ossess, Director and Chief Commercial Officer for Consumer. And Mr. Verus Iqban, Director and Chief Strategy and Home Business Officer. And with that, I will hand over to Mr. Rajiv to begin the mentioned highlights. Mr. Rajiv, you may finally proceed.

Thank you, Christopher. Good afternoon, everyone. And thank you all for joining us today. Just to remind you, when we entered 2006, we spoke about our purpose, which was to connect every Indonesian for a better life. This purpose remains the foundation of our strategy. guiding us how we invest in our network, enhance our customer experience and drive sustainable growth. In the first quarter, we made solid progress in translating this purpose into execution. If I speak about integration, the execution continues to be ahead of the path with all key milestones for the quarter achieved and majority of the targeted initiatives completed as per schedule. This reduces network overlap improves operational efficiency and accelerates synergy capture. As a result, integration risk continues to decline as we move into the second half of the year. On the financial side, we are seeing improvement worth in the top-line revenue from a beta. Revenue growth in this quarter was supported by festive demand due to the trade wars in this quarter and gradual market spread. while we are also making steady progress of emerging loss cost structures. This reflects disciplined execution on both commercial and cost initiatives. On 5G network side, we accelerated the 5G rollout and the continued expansion has strengthened network quality delivering a much superior customer experience and faster speeds. This position makes us smart to handle rising data demand easily while expanding the coverage across key cities, reinforcing our 5G leadership in Indonesia. To summarize, we began the year with clear purpose and disciplined execution across integration, growth, cost and network expansion. This gives us confidence that we are on track to deliver strong performance while advancing our mission to connect every individual for a better life. If I move to the next slide, as I said, our inclusion in the first quarter is completely aligned with our purpose to connect every individual for a better life and our vision to become the most loved company, the best place to work and the most efficient service provider. For customers, we are strengthening experience to continue network integration and 5G expansion. Our focus on network leadership is delivering better quality, wider coverage and faster speeds. These improvements are increasingly validated by independent benchmarks, including the latest recommendation we had from Okla for being the fastest 5G network, reinforcing the experience we provide to our customers. For our employees, we continue to build a stronger, more unified organization. This progress has also been recognized externally, with Excel Smart being included in Times' 2026 Asia Pacific Best Companies list, and it's such an honor for us being such a young company, and it reflects our performance in employee satisfaction, financial strength, and sustainability. Finally, efficiency remains a core pillar of our execution. We are accelerating integration-led synergies, simplifying operations, and strengthening cost-specific. These efforts are building structurally a more efficient operating model with impact to be reflected in our margins over time. Overall, this quarter reflects tangible progress in delivering our purpose, enhancing customer experience through network leadership, strengthening our organization, and improving efficiency to support sustainable growth. As I mentioned earlier, integration continues to progress ahead of the plan, with strong momentum across network and synergy capture. Specifically on network integration, we've integrated more than 40,000 sites into AXS smart network, while simultaneously deploying additional 4,900 new sites, which helps improve our coverage. This reflects simultaneous execution consolidating overlapping infrastructure while expanding capacity to support future work. On synergy capture, site consolidation is advancing well, with 77% of targeted tower dismantling already completed. This is the biggest driver of cost efficiencies and operational simplification, and we remain on track if at any stage of the plan to realize integration synergies. The next step would be IT and platform transformation. IT integration programs are progressing well to enable a unified system and operations. This will be super critical to support product harmonization, further improve our customer experience and greatly enhance organizational agility. Overall, we expect the entire integration to be completed within this year, providing a strong foundation for both operational efficiency and sustainable growth. I have been speaking about our network leadership and we are very proud of where we have reached so far and we will continue to strengthen our network leadership powered by accelerated BTS deployments and rapid 5G rollouts enabling better speed, better experience for our customers. On network, our total BTS surpassed growing 12% quarter-on-quarter and more than 50% year-on-year. This expansion driven by both 5G and 4G reinforces depth and resilience of our network. On 5G, our footprint has expanded to 43 cities as of end March. We'll continue to roll out across key urban areas. We'll continue to expand 5G coverage, further strengthening our position and delivering the fastest 5G experience in the country. Importantly, this stronger network is not just about scale, it is translating into real performance. With improved quality and speed, we were able to handle a 21% surge in data traffic during Ramadan period. Overall, our investments are clearly reinforcing our network leadership, expanding coverage, enhancing experience, and supporting Indonesia's accelerating data demand. With that I will take a pause and hand over to Pa Anthony to walk us through the financial results.

Thank you Rajeev and good afternoon everyone. So let me start the first slide about the operational matrix. This quarter shows that we continue our progress in shifting forward to the quality-led growth, supported by the ARCO improvement as well as the stabilizing subscriber drives. Our mobile subscribers stood at 69.4 million. The sequential decline from the previous quarter was expected, reflecting our continuous focus on cleaning up inactive as well as the low-value SIMs. and also the impact of the pricing discipline following to the product simplification. The reduction was primarily coming from the newer subscribers with less than three months, while the long-standing subscriber base remained stable. Importantly, the pace of the decline has moderated, and we are seeing an early sign of stabilization as market preparation progresses. Our priority remains on improving subscribers' quality, in the continued ARPU improvements. Meanwhile, our blended ARPU continues to improve by 6% QonQ at 47,300 Rupiah, driven by both prepaid and postpaid track nights. This reflects the pricing discipline as a stronger data monetization following through the NAPO integration. Data traffic remains healthy at 3,867 data bytes 36% year-on-year, although slightly lower compared to the last quarter because of the less number of days in the Q1 compared to the last quarter Q4. Overall, the demand continues to grow, supported by expanding 4G and 5G coverage as well as improving the user experience. Finally, the fixed broadband subscribers were stable at 940,000, while positioning the business for more sustainable growth, and at the same time the fixed broadband output remains resilient despite the competitive market. Overall, this operational matrix reflects an early signs of stabilization, with stronger monetization and disciplined subscriber management supporting quality-led growth. Okay, move on to the next slide on the financial performance of the first quarter of 2016. We start with the revenue. We recorded 38% year-on-year positive growth in terms of revenue, so IDR 11.8 trillion rupiah. Primarily driven by the mobile business due to master preparations, which drives higher output. The performance was also contributed by Lebaran Momentum, where in this year, focus solely in Q1 2026, and on a quarter-on-quarter basis, the revenue, we will look at it, declined by 1%, which is reviewed as a broadly stable, considering the fourth quarter has more operating base. At the EBITDA level, normalized EBITDA increased by 26% year-on-year, to become 5.4 trillion rupiah. The performance was supported by solid revenue, improvement of cost efficiencies, so the EBITDA remained resilient with the normalized margin at 46%, broadly stable compared to the last quarter. The bottom line shows stronger improvement. Our normalized PAT grew by 254%, to be 1.4 trillion rupiah. or an increase around 90% quarterly basis. This was supported by lower interest expenses from the loan as well as the ROU assets. And also there is a proceed from the sale of these rental assets reflecting to the PAT group. Higher normalized PAT indicates the integration already has started to make a favorable result for the inbox of revenue growth as well as cost efficiencies. Overall, the first quarter reflects a stable financial performance with a solid revenue trajectory, resilient EBITDA, and disciplined cost management as we continue progressing through the integration phase. This slide provides a reconciliation to give a better understanding between the reported and the normalized EBITDA and VAT. Here we reflect the underlying performance At the middle level, the reported first quarter 2026 was 5.4 trillion rupiah. This includes relatively small integration related costs around 28 billion rupiah, which is primarily associated with the some costs from the rental of the central sites. The EBITDA has begun to show a sign of stabilization and increasing reflective of our underlying operational performance going forward basis. At the bottom line, we continue to recognize an accelerated depreciation around 2.1 trillion rupiah on equipment from old vendors as well as the 900 MHz spectrum as the network integration progresses. Adjusting of these market items, the normalized PAP clear review of the company's core profitability. We'll go to the next slide. Turning to our past performance, the operating expenses moderated in the first quarter following the integration drive spike in the previous quarter. Operating expenses declined by 18% due on due. to become 6.4 trillion rupiah, mainly reflecting normalization after the heavy integration-related activities happened in the Q4 2025, last year past quarter. The cost base is beginning to stabilize as integration execution progresses. Now, the interconnection and other direct expenses declined by 90% Q1Q, reflecting lower enterprise revenue due to a seasonal factor while the infrastructure costs also shows a decline by 11% quarter-on-quarter due to elevated integration-related costs, which is book in Q4 2025. Importantly, the labor costs declined sequentially as the end-state organization structure was established and already the workforce alignment already progressed. As a result, labor costs as a percentage of revenue improved from the previous quarter. In overall, the first quarter reflects a moderate cost base following the integration driven spike with improving cost discipline and early realization of operating efficiencies as we move closer to the completion of the integration. I think that's it from my side.