2011 Interim Results

For the period ended June 30, 2011

August 12 2011 12, Hong Kong

Forward-Looking Statements
This presentation may contain "forward-looking statements" that are not historical in nature. These forward-looking statements, which include, without limitation statements regarding PCCW s future results of limitation, PCCW's operations, financial condition or business prospects, are based on the current beliefs, assumptions, expectations, estimates, and projections of the directors and management of PCCW about the business, the industry and the markets in which PCCW operates. These statements are not guarantees of future performance and are subject to risks uncertainties and risks, other factors, some of which are beyond PCCW's control and are difficult to predict. Actual results could differ materially from those expressed, implied or f forecasted in th t d i these f forward-looking statements for a variety of factors. d l ki t t t f i t ff t

Overview
Alex Arena
Group Managing Director

2011 H1 Financial Performance

(US$ million)

Core Business* Business

H110 H111
% change

Consolidated
H110 H111
% change

Revenue EBITDA Profit

Attributable to Equity Holders

1,376 432 85

1,402 453 100

+ 2% + 5%

1,513 477 98

1,562 484 106

+ 3% + 1%

+ 17%

+ 8%

The Board has declared an interim dividend of 5.3 HK cents per share
* Core business includes telecom, media and ICT businesses

An Attractive Dividend Yield Play

Total Dividend Yield Interim Dividend Yield

3.66%

3.52%

3.91% 3 91%

4.40% 4 40%

Special dividend: HK$1.30 per share distributed in May 2009

6.00% 4.51%

1.14% 1 14%

1.26%

1.31% 1 31%

1.36% 1 36%

1.46% 1 46%

1.83% 1 83%

1.73% 1 73%

2004
DPS (HK$)
Interim Final Special S i l Total $0.055 $0.096 $ -

2005

2006

2007

2008

2009

2010

H111
+ 4%

$0.065 $0.120 $ -

$0.065 $0.120 $ -

$0.065 $0.135 $ -

$0.070 $ -

$0.051 $0.102 $ -

$0.053

$0.133 $ -

$1.300 $1.370

$0.151

$0.185

$0.185

$0.200

$0.133

$0.153

Maintaining a Solid Payout Ratio

100% 90% 74% 52%
Special dividend: HK$1.30 per share distributed in May 2009

Interim payout ratio: 60% 58% 47%

Interim payout ratio: 72%

2004
DPS (HK$)
Interim Final Special S i l Total $0.055 $0.096 $ -

2005

2006

2007

2008

2009

2010

H111
+ 4%

$0.065 $0.120 $ -

$0.065 $0.120 $ -

$0.065 $0.135 $ -

$0.070 $ -

$0.051 $0.102 $ -

$0.053

$0.133 $ -

$1.300 $1.370

$0.151

$0.185

$0.185

$0.200

$0.133

$0.153

Financial Review
Susanna Hui
Group Chief Financial Officer

Core Business Solid Revenue Growth with Strong EBITDA

(US$ million) Core Business* PCPD

Revenue

EBITDA
453

1,342

1,376

1,402 1 402

421

432

31%
EBITDA Margin

31%

32%

296 H109
core revenue

137 H110

160 H111

39 H109

45 H110

31 H111

Strong fundamentals of core segments led to higher PCPD revenue edged up due to higher property
selling prices achieved * Core business includes telecom media and ICT businesses telecom,

Core EBITDA growth momentum continued with

enhanced EBITDA margin

Delivering Greater Value for Shareholders

Profit Attributable to Equity Holders
(US$ million) Core Business* PCPD

106 98 84

Earnings Per Share 11.33 HK cents (H110: 11.30 HK cents)

Core profit jumped 17%

73

85

100

Higher EBITDA contributions from all core business segments Lower finance costs

11

13

H1'09

H1'10

H1'11

* Core business includes telecom, media and ICT businesses

Outstanding Track Record - Tangible Evidence of our Leadership Position and Successful Quadplay Strategy
(US$ million)

Core Revenue

Core EBITDA
906

2,821 2,638
TSS

2,674

2,752 834 753

860

861

2,356 2 356
Mobile TV & Content PCCW Solutions

Other Businesses

1,376

1,402

432

453

898
Eliminations

953
32%

956

904
32%

904 436 437

32% 33%

32%
Core EBITDA Margin
20
(40) (24)

31%

31%

46

19

(20)

25
(11)

31

27

34

31
30

13

19

(118)

(101)

(141)

(105)

(105)

(42)

28 14 30

(56)

2006

2007

2008

2009

2010

H1 10 H110

H1 11 H111

2006

2007

2008

2009

2010

H110

H111

A High-margin Stronghold plus Fast Growing Businesses

EBITDA Margin
100% TSS TV & Content 80% Mobile PCCW Solutions 60%

40%

40% 24% 19% 10%

TSS high margin business providing strong and steady cash flow growth Both Mobile and TV & Content businesses continuing their accelerating growth

20%

0%

-20%

-40%

2006

2007

2008

2009

2010

H1'11

10

TSS Transformation Strategy Supports Strong Cashflow

TSS Revenue TSS EBITDA
(US$ million) (US$ million)
+ 8% + 18% + 3% steady -14%

1,057
Others International Local Data Broadband Network Local Telephony
230 232 122 200 273

1,067
247 237 123 214 246

1,100
266 281 127 214 212

439

436

437

H109

H110

H111
H109 H110 H111

Solid revenue growth driven by structural transformation from voice to data New generations of eye X set to fuel further uplift of stabilized fixed-line ARPU Firm broadband revenue - retention/ acquisition strategy in progress for
high speed, high ARPU customers high-speed high-ARPU customers, paving way for further growth Healthy growth for local data in the improved business environment Robust performance in international telecom business due to high bandwidth demand and Reach integration Strong CPE sales and more telecom projects amid local economic recovery

C ti d rebalancing upheld solid Continued b l i h ld lid

EBITDA and cash flow

11

Mobile Business Enters Accelerated Growth Period

(US$ million)

Mobile Revenue

Mobile EBITDA

H109

H1 10 H110

H1 11 H111

Services revenue rose 11% on increased data usage by a

larger 3G customer base with higher ARPU

EBITDA increased on higher 3G data usage Margin improvement also due to unique
integrated network and lower incremental operating costs

3G data revenue up 77% as smartphones and tablets p p

populate the market

Post-paid exit ARPU uplifted y-o-y to HK$160 from HK$134 Migrating post-paid 2G customers to 3G network improved
efficiency and ARPU
12

Telecom Business Growing on Multiple Drivers

TSS + Mobile Revenue

TSS + Mobile EBITDA M bil

1,218 1,163
Mobile Others International Local Data + Broadband Local Telephony p y

465 455 455 +43%

1,174

+10%

Mobile

+ 8%
TSS

Growth drivers gathering steam

H109

H110

H111

H109

H110

H111

13

Solid Strategy Execution Delivering Results & Profitability

(US$ million)

TV & Content Revenue

TV & Content EBITDA

140

151

152
FY 2010 EBITDA US$30m

H1 09 H1'09 H1 10 H1'10 H1 11 H1'11 Financial performance reflects successful execution of strategies to grow ARPU and expand customer base

H109

H110

H111

Revenue stable and growing despite non-renewal of BPL ARPU boosted by more exclusive sports programming and other
premium content, leveraging our multi-screen strategy

Strategic decision to not pursue BPL at

uneconomic prices saves cost cost, significantly enhancing profitability

Continued to develop unique IPTV interactive capabilities such as

interactive game shows Strength in self-produced local programming offers new growth potential
14

Standing to Gain from Rising Services Demand

(US$ million)

PCCW Solutions Revenue

PCCW Solutions EBITDA

139 116

142

H1'09

H1'10

H1'11

A leading full service IT provider with strong capabilities in offering

complete end-to-end data center, infrastructure, hardware, software, business process, and cloud computing services

Both EBITDA and EBITDA margin grew

in step with revenue

Steady revenue growth with contracts gained across various

sectors in Hong Kong and mainland China, and from expanding data center hosting services

S Supported b robust project pipeline t d by b t j t i li

15

Optimal Cost Management for Business Growth

(US$ million)

Core Operating Expenses

Core Opex to Revenue Ratio

343 312

341
26% 23% 24%

H109

H110

H111

Staff costs rose in line with business

growth

Higher publicity and promotion Increased rentals on shops and

marketing venues

H109

H110

H111

Managing cost in a challenging environment while investing for business growth

16

Financial Performance
(US$ million)

Group

Core

H110 1,513 1 513 (703) (333) (241) 4 (102) (2) 136 (27)
20%

H111 1,562 1 562 (705) (373) (251) 13 (94) (1) 151 (38)
25%

H110
+ 3%

H111 1,402 1 402 (608) (341) (248) 11 (85) ( ) (1) 130 (28)
21%

Revenue R Cost of sales Operating expenses Depreciation & Amortization Net other gains and restructuring costs Net finance costs Associates and JVs Profit before income tax Income tax
Effective tax rate

1,376 1 376 (632) (312) (239) 4 (92) ( ) (2) 103 (15)

15%

+ 2%

Profit for the period Non-controlling interests Profit attributable to equity holders of the Company EBITDA Earnings per share (in HK cents)

109 (11) 98 477 11.30

113 (7) 106 484 11.33

+ 8% + 1%

88 (3) 85 432

102 (2) 100 453

+ 17% + 5%

17

Disciplined and Predictable Growth-Oriented Capex Regime

(US$ million)

411

Core Business Capex

Capex focuses on business

streams with higher ARPU and better return (e.g. mobile and high speed broadband networks)

208

228 113

Capex is demand-driven and

variable, as infrastructure is already in place

Capex to revenue ratio well

2008
Core Business Capex to Revenue Ratio:

2009 8%

2010 8%

H111 8%

within guidance

15%

(In addition, the Group received US$81m fixed assets from Reach integration)

18

Strong & Steady Operating Cash Flow

Core business operating cash flow minus capex* capex
(US$ million)

678 653 449

340

2008

2009

2010

H1'11

With strong half-year performance, full-year target is on track

* Core business EBITDA minus core business capex

19

Ample Liquidity with Significant Interest Savings In Sight

Core Business Net Debt (1) (2)
(US$ million) (US$ million) Long-term Revolving Credit & Term Loan Facilities US$ Bonds

June 30, 2011

Gross debt: US$4,529m Net debt: US$3,481m ,

US$1,278m undrawn facility

US$75m undrawn facility

952 1,000 500 2010 2011 2012 2013 430 2014 500 2015

500 641 2016

2008

2009

2010

2011
Ample liquidity with US$1.35 billion undrawn to meet foreseeable obligations and fund future growth Effective interest rate 3.8% (excluding finance fee) ~2.5% expected post re-financing of the 2011 bond Average debt maturity 2.8 years

(1) Net debt refers to the principal amount of short-term and long-term borrowings, minus cash and cash equivalents and certain restricted cash (2) Net debt for the Group excludes PCPD

20

Well-managed Debt Level

PCCW Group Net Debt(1)/EBITDA(2) HKTGH(3) Net Debt(1)/EBITDA(2)

2009

2010

2011

2009

2010

2011

(1) Net debt refers to the principal amount of short-term and long-term borrowings, minus cash and cash equivalents and certain restricted cash (2) Based on net debt as at period end divided by EBITDA for the 12-month period HKT ratings - Moody's: Baa2; S&P s: BBB Moody s: S&P's: (3) HKTGH denotes HKT Group Holdings Limited

21

Business Review
Alex Arena
Group Managing Director

22

Quadplay Update
Fixed line
Stable customer base
maintained

Broadband
11% y-o-y customers
growth

Fiber to the Home (FTTH)

services launched widely

Introducing Androidbased eye X

uHub consumer cloud

launched

Mobile
3G customers up 45% y o y y-o-y
while EBITDA +43% y-o-y

Media
Customer base and ARPU
grew despite BPL departure

3G data revenue grew to 62%

of service revenue

EBITDA achieved US$30m

in H111

New: RoamSave & Customer

Service Apps

23

Stable Fixed-line Business

Solid customer base maintained since 2004
(000)

Residential Lines Business Lines

1,543 1,423 1 423 1,400 1 400 1,407 1 407 1,407 1 407 1,408 1 408 1,406 1 406 1,407 1 407 1,408 1 408

1,236

1,144

1,164

1,180

1,183

1,195

1,182

1,183

1,217

2003

2004

2005

2006

2007

2008

2009

2010

H1'11

24

Evolving from Voice to Multimedia Communications

eye X : Android-based series addressing different segments
2007 2009 2011 Now

Voice + Data
Color screen Monochrome screen

eye X eye 2 eye

Wi-Fi enabled Touch Screen Quad Play Apps now TV Decoder Additional feature:

Voice Only

Android platform
Similar user experience as Android's mobile handsets Access to Googles Android market for ~250k Apps, including Facebook Access to Googles services: YouTube, Google Maps, Google Search, Gmail

NGFL DEL
PSTN
25

Fixed-line SMS Interactive Info

Video Call now TV Streaming Secured Transactions Octopus Card Reader MMS

Voice + Data + Video Call + Content Apps & Transactions

Full IP-based NGN Deployment

Executing to a Comprehensive Strategy

Market Leader in Broadband

Broadband customers grow 11% despite intensive price competition with churn retained to less than 1% Our unique p p q propositioning of fixed and wireless broadband continues to be a strong differentiator g g
(000)

Wholesale Business Consumer 953

88 80

1,117 998
99 94

1,176
104

1,302 1,305 1,297 1,298 1,237 1,275

107 110 113 113 114 114

1,367 1 367
115

1,437
116

857

840 798 715

952

1,005 1,060 1 005 1 060

1,099 ,

1,126

1,136

1,146

1,148

1,215

1,285

H1

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

2005
26

2006

2007

2008

2009

2010

2011

Rapid Growth of High Speed Broadband

FTTB Ready (80%)* (80%)
(supporting speeds up to 100Mbps)

1.5M or above (98%)

FTTH Ready (52.5%)**

(supporting speeds up to 1000Mbps)

*FTTB Ready means FTTH service can be available within 29 d R d i b il bl i hi days of receiving a service order, b ildi management access permitting. I B ildi VDSL-2 up f i i i d building i i In-Building VDSL 2 to 100 Mbps is also normally available in FTTB ready buildings and can be available within 4 days of receiving a service order. Figures at end of July 2011 ** FTTH Ready means FTTH service can be available within 4 days of receiving a service order

Our Strategy: Leadership in high speed broadband via multiple technologies

(PON, xDSL (PON xDSL, wireless) and diversified speeds
27

Exponential Growth of High Speed Broadband Customers

The mass launch of FTTH service attracting new customers and existing customers for service upgrade 72,000 NETVIGATOR customers enjoying FTTH service at the end of July 2011 Testing Phase y H ers No. of monthly new FTTH custome
30,000

Mass Launch
72,000 cumulative FTTH customers at end of July 2011
80,000

(> 1G capable service)

No. of monthly new FTTH customers No. of cumulative FTTH customers

60,000 20,000 20 000

40,000

10,000 20,000

Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul10 10 10 10 10 10 11 11 11 11 11 11 11

28

No. of cumula ative FTTH customers H s

Unique and Successful Broadband Strategy

Grow ARPU
1000M

Incre eased Speed S

200M to 500M

VDSL 2
100M 50M 30M ADSL2+
18M

Differentiate
Auto Network Selector

ADSL
1.5-8M Over 9000 hotspots Ubiquitous wireless platform

NETVIGATOR Everywhere up to 42M

Increased Mobility
29

Introducing Consumer Cloud Services Adding Value to High Speed Broadband

Convenience Compatibility Easy to Use y Security

A private storage server enables all your photos, music library, videos and documents to be stored and retrieved anytime Supports different smartphones and tablets Multiple devices can be kept in sync for uninterrupted access Video formats adjusted to your smartphone and tablet automatically for easy viewing j y p y y g Maximum security is assured as all files go directly to a local server without the need to routing through the Internet overseas

Not a dumb pipe strategy

30

International Telecom Business a Growth Portfolio

International Telecom Services Revenue
Wholesale Connectivity IDD + LAC

Strong growth in wholesale connectivity services as global bandwidth demand increasing and wholesale voice traffic remains stable PCCW Global has further strengthened its network coverage and service availability with interconnection agreements among overseas service providers and carriers, opening up new service opportunities i i i t iti

+ 28%

-11%

Ability to globally interconnect MPLS VPN and Ethernet facilitates global penetration of next layer applications such as the first High-Definition Video Conferencing Efficiencies gained from the Reach integration have provided better operating margin to PCCW

H1'09

H1'10

H1'11

31

Expanding PCCW Globals MPLS VPN Coverage

MPLS VPN stands for Multiprotocol Label Switching Virtual Private Networks

Worldwide coverage across more than 1 500 cities and over 110 countries serving 1,500
enterprises and global carriers

Global interconnections assure enterprise customer connectivity and applications such as

HD video conferencing are Quality of Service guaranteed across networks
32

PCCW mobile Targets High-end Customers

- 3G subscriber base up 45% y-o-y - Total subscriber base reached 1.5m, up 3% y-o-y - Post paid exit ARPU increased y o y to HK$160 from HK$134 Post-paid y-o-y - Newly acquired smart-phone subscribers recorded ARPU around HK$400 3G base +45% y-o-y

3G 2G Post-paid 2G Prepaid
(000)

55 516

119 462

206

288

414

470

529

606

667

880

460

459

440

430

376

319

250

456

491

43

282

290

350

376

405

429

459 4 9

508

517

544

567

583

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

2005

2006

2007

2008

2009

2010

2011

Focusing resources on quality and high-end users of smart devices to drive up profitability
33

Wireless Data Usage and Revenue Update

Growing 3G data revenue accounting for 62% of 3G service revenue
3G Data Revenue

+77% y-o-y

3G data revenue in H111 grew by 77% y-o-y Over 90% of our new handset-plan subscribers are smartphone users b ib h

H108

H109

H110

H111

34

Pioneer in Capturing Trendy Tablets Market

PCCW mobiles leadership in tablets market continues leveraging unique strength of our fixed, wireless and mobile networks
Ubiquitous connection
Only PCCW provides combinations of home and out-of-home connection services

Choices of Plans
PCCWs unique offerings of a variety of service plans differentiate from competitors

Variety of Tablets
PCCW leveraging from wide relationships with both PC and handset vendors

1. Mobile HSPA SIM

At Home
2. Pocket Wi-Fi 3. PCCW Wi-Fi

Out-of-Home

4. NETVIGATOR Home Wireless

35

Meeting the Challenges of Mobile Data Growth

Smart devices are bandwidth hungry Industrial standard moving from 7.2M to 21M Ever-increasing challenges for mobile operators
21M HSPA+ Ready

PCCW has anticipated the market development and leveraged on our unique mobile HSPA+ fixed and Wi Fi networks to provide the best network solutions HSPA+, fixed, Wi-Fi to meet mobile data demand, and an unparalleled customer experience
42M DC-HSPA+ mobile network 1000M+ fiber backhaul Over 9000 PCCW Wi-Fi hotspots including Wi Fi h t t i l di exclusive MTR coverage

36

Providing Affordable Roaming Propositions

Incoming call Incoming call

RoamSave R S At just HK$8/day :

First-in-market voice roaming app utilizing Wi-Fi fixed networks

Data Roaming 90% off : ff

More affordable pay-as-you-go data roaming charge plans

Data Roaming Day Pass At just HK$98 /day :

Unlimited data roaming at top travel hotspots

37

PCCW Media
Janice Lee
Managing Director, TV & New Media

38

Overview of PCCW Media

Largest pay television service in Hong Kong* with over 1 Million subscribers A significant producer of popular C ese language p og a s g ca t p oduce o popu a Chinese a guage programming g (including news, financial news, sports, entertainment programming, music concerts and events)

New Media & Directories Business

Content and video-streaming services video streaming HKs largest digital music subscription service Web-based Yellow Pages yp.com.hk

* By revenue
39

39

Track Record in Growing

Customer and ARPU Growth
ARPU rebounded post-BPL with more exclusive sports programming and other premium content and achieving subscriber growth Solid subscriber management , superior customer service, and overall strong content rewarded with customer l d d ith t loyalty lt
Installed Base Installed base ARPU (HK$/ month)

(000)

153 125 55 67 80 87 94

169

171

171

174

169

165

167

27

758 549 269 147 361 441 608

818

882

927

953

992 1,001 1,028 1,039

1,088

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

H2

H1

2003
40

2004

2005

2006

2007

2008

2009

2010

2011

Solid Execution Delivering Results & Profitability

Revenue
(US$ million)

H1
287 301 306
151 1 1 (H1)

2011 Interim Results

Financial performance reflects successful execution of s strategies Cost Savings Realized Strategic decision to not pursue BPL at uneconomic prices p p significantly enhances profitability H1 2011 revenue stable and growing

218 152

2007

2008

2009

2010

2011 1H

EBITDA
(US$ million)
30 1

H1
30

despite non renewal of BPL. non-renewal

Strategic investment in unique interactive

6 (H1)

(11) (20)

production and content enhancements builds ARPU at a fraction of BPL savings

2009 2010 2011 1H

2007

2008

41

Achieving Sustainable Growth in Hong Kong

1.

GrowARPUthroughPremiumContentandInnovative
Services

2. 3. 3

MultiScreenStrategytoexpandaddressablemarket gy p OriginalReal TimeInteractiveProductionthat Original RealTime Interactive Production that UniquelyDifferentiatesnowTVandincreasesARPU

42

Achieving Sustainable Growth in Hong Kong

1.

Grow ARPU through Premium Content and Innovative Services

MegaSportsPackenhancedwithnewworld classpropertiesincludingTennisGrandSlams andATP,NBA,PGATour,MUTV&ESPNHD (TopUppriceatHK$50 $135permth) RugbyWorldCup2011(HK$388eventpass) g y p ( $ p ) SetantaRugbyChannel(HK$128) UEFAEURO2012 (abilitytoincreaseMSPprice)

HongKongsfirstPayPerViewVODservice HongKongsfirstPayPerViewVODserviceofferingcurrentandtop Hollywoodstudiosmoviesfrom20thCenturyFox,Paramount Pi t W B d NBC U i l Pictures,WarnerBrosandNBCUniversal AvailablesamedayasDVDreleaseinHK,viewingonbothIPTVandon PC (payperviewatHK$25$30permovie) SDandHDformats,with5.1Dolbysurroundsound

New Contents include Pay TV and Online rights Fetching incremental ARPU
43

Achieving Sustainable Growth in Hong Kong

2.

Multi-Screen Strategy

Provides convenient multiple-device viewing to capture viewers digital consumption multiple device viewers

Expand addressable market beyond households to individual subscriptions As we renew and acquire new content, we will enrich our multiple screen offering with online and mobile rights for more content
Web sports.now.com t news.now.com movie.now.com Mobile

Tablet

Smart TV

Connected game console

44

Achieving Sustainable Growth in Hong Kong

3.

Original Real-Time Interactive Production Uniquely Differentiates Now TV and increases ARPU

Adding to the family of produced channels . . .

19 now branded locally

(Coming in Sept 2011)

Entertainment News Channel

Exclusive stories, scripted and reality programs Innovative interactive features allowing audiences to get involved when following their favorite entertainment news!

Asias First Interactive Game Show

Enabling Customer Participation in Large Numbers with Remote Control

Strength in self-produced local programming offers new growth potential self produced
45

Business Outlook

Delivering on our promise . . .

2010 - US$30M EBITDA ( $ (Full Year) ) 2011 - Delivered US$30M EBITDA in 1H, and On Track to Deliver on Full Year Plan

46

PCCW Solutions S l ti
An IT Service Company

George Fok G F k
Managing Di t PCCW S l ti M i Director, Solutions

Business Transformation
47

Data Center

Cloud Computing

Outsourcing

Digital Commerce

Industry-Recognized Market Leader

HK Professional IT Services Market Share (2010) China and HK Professional IT Services Market Share (2010) Selected Awards and Recognition

#17 in Leader Category (2011) g Global Outsourcing 100 #1 of China IT Outsourcing service enterprise (China Software and Services Outsourcing Network, 2010) Network

Best IT Outsourcing Award (2005 2011) 2011) Breakthrough Implementation Awards (US) for HKSAR HKID card APICTA Awards (Asia) for p y HKSAR ePassport System

Source:Gartner,Inc.,MarketShare:ITServices,2010,KathrynHaleetal,March31,2011 Source: Gartner Inc Market Share: IT Services 2010 Kathryn Hale et al March 31 2011
48

Huge and Rapidly Growing Market

China + HK Professional IT Service Market
(US$ Billi ) Billion)

HugedemandforChinadatacentersdrives Huge demand for China data centers drives 24%CAGRtoreachUS$2.6Bby2015(IDC) ChinaoffshoreITservicesposeasalternative toIndia,toreachUS$4.3Bin2015,CAGR 19.7%(IDC) 12 FiveYearPlanurgeddevelopmentof 12th Five Year Plan urged development of smartcities,eGovernment andcloud computinginitiatives Forresterforecastsmultichannel(mobileand F f li h l ( bil d tablet)experiencewilldrivedigitalcommerce; analytictoolsforpredictivemodeling;and socialnetworktobroadenchannelsand customerreach

Development&Integration ITManagement

Consulting ProcessManagement

Source:Gartner,Inc.,MarketShare:ITServices,2010,KathrynHaleetal,March31,2011
49

Long-Term Relationships with Blue-Chip Clients

700+clientsacrossdiverserangeofindustries Repeatbusinesseswithlongtermcontractsofanaverage8+years

Public Sector

Retail & Manufacturing

Media & Communications

Financial Services

Transportation

50

Solid Business Growth

Revenue
(US$ million)

239

236

270

Steadyrevenuegrowthwithcontractsfor projectdevelopmentandlongtermrecurring servicesfromvarioussectorsofbluechip customers

2010

2008

2009
EBITDA

(US$ million)

gg g p y StronggrowthinEBITDAgivenproductivity gainandleverageofChinaresourcepoolof4 OffshoreDevelopmentCentersinBeijing, Shanghai,Guangzhou,andXian Solidcashflowcontributionasthebusiness requiresminimalcapexinvestment

25

27

31

2008
51

2009

2010

51

2011 H1 Core Performance

Core Business*
H1 10 H110 H1 11 H111
% change

(US$ million)

Revenue EBITDA Net Profit

1,376 432 85

1,402 453 100

+ 2% + 5%

+ 17%

* Core business includes telecom, media and ICT businesses telecom

52