PT Indocement Tunggal Prakarsa Tbk · IDX:INTP
PT Indocement Tunggal Prakarsa Tbk — Indocement Tunggal Prakarsa — Q3 2017 Earnings Presentation
30 slides from PT Indocement Tunggal Prakarsa Tbk's earnings presentation, Nov 13, 2017
Slide 1: Indocement Tunggal Prakarsa Tbk Q3 2017 Results
Slide 1 - November 13, 2017 Indocement Tunggal Prakarsa Tbk Q3 2017 Results
Slide 2: Indocement Fact Sheet
Indocement Fact Sheet 13 Kilns 38 batching plants 18 distributors 19 mio ton annual 5 mio m3 annual 18,500 retailers clinker capacity RMC production 172 warehouses 24.5 mio ton annual capacity cement mill capacity 632 truck mixers 2.8 mio ton annual aggregates production capacity
Slide 3: Highlight of Indonesia Macro Economic
Highlight of Indonesia Macro Economic UPSIDES: Strong Reserves Lower Unemployment Top performance equity market in Asia DOWNSIDES: Stable against USD Increase Government challenged by current Debt due to Infra lower lending rate, the Slow Down Fed rate, and US Tax cut Export Slide 3 - November 13, 2
Slide 4: Deficit in State Budget Prompts Government to Prioritize Infrastructure Spending
Deficit in State Budget Prompts Government to Prioritize Infrastructure Spending Plan to Build 35,000 MW Power Plants to be Reviewed Revenue Expenditure IDR Trillion IDR Trillion Actual as a % of Budget Deficit as a % of Revenue Slide 4 - November 13, 2017 * Realized figures up to August 2017 Indoce
Slide 5: Indonesian Cement Industry 2017 Landscape
Indonesian Cement Industry 2017 Landscape Lafarge Indonesia 1.5 mio ton Semen Bosowa 0.2 mio ton (g) 4.4 mio ton 3.0 mio ton (g) Anhui Conch 4.5 mio ton 2.2 mio ton (g) Indocement 24.9 mio ton Semen Indonesia 7.2 mio ton Semen Indonesia 0.9 mio ton (g) 7.4 mio ton Semen Baturaja Semen Kupang/Merah P
Slide 6: Oversupplied market in Indonesia
Oversupplied market in Indonesia: Supply build-up in recent years, excluding export, 40 Mt overcapacity (FC2017) Overcapacity of 40 Mt in FY2017f Consumption per Capita kg/capita Philippines 240 Indonesia 243 Thailand 443 Vietnam 611 Malaysia 751 Brunei 899 Singapore 1,380 Demand growing at an assum
Slide 7: Oversupplied market in Indonesia (including export)
Oversupplied market in Indonesia: Supply build-up in recent years, including export, 35 Mt overcapacity (FC2017) Export decreased during high domestic utilization and increased during low domestic utilization Slide 7 - November 13, 2017 Indocement Tunggal Prakarsa Tbk Q3 2017 Results Source: Asosias
Slide 8: 9 new players in the last 5 years and at least 1 more showed interest
Supply Side: 9 new players in the last 5 years and at least 1 more showed interest in entering Indonesia market 9 new players in 2012-2016 with current Timeline of cement new entrants commissioning year combined4 capacity of ~15 Mt Today 2012 2013 2014 2015 2016 2017 2018 2019 2020 SS Planned commis
Slide 9: Better Growth Outlook in Central & East Java and Sumatera
Regional shift of Demand: Better Growth Outlook in Central & East Java and Sumatera Market shares based on cement domestic sales (2016, 9M17) Indonesia: 61% , +6.6% Kalimantan: 61.6Mt 47.4Mt 67% , -5.8% Sulawesi: 43% , -1.5% 15% 15% 4.2Mt 2.9Mt 5.5Mt 3.8Mt 26% 25% 13.5Mt 10.0Mt 8% 7% 2% 1% 27% 24% 2
Slide 10: Strong progress of heavy equipment order is another leading indicator for cement demand
Drivers of Cement demand: Strong progress of heavy equipment order is another leading indicator for cement demand Cement demand improves in line with lower mortgage rate and positive trade balance Mortgage Weighted by relatively high Investment Loan % Demand Bio USD Support by positive trade balance
Slide 11: New infrastructure development in greater Jakarta to create high bulk demand
7 new infrastructure development in greater Jakarta to create high bulk demand 6 7 Juishin 1 1.8mt Astra 2 4 Holcim 5.8 mt 3 Purwakarta Indocement 5 quarry 18.4 mt Pamoyanan future quarry Slide 11 - November 13, 2017 Indocement Tunggal Prakarsa Tbk Q3 2017 Results
Slide 12: Industrial Estates in Greater Jakarta
Multiplier effects after Infrastructure established: Industrial Estates in Greater Jakarta Conch 2.2 mt Juishin Merah Putih 1.8mt 6.3 mt Holcim 5.8 mt Indocement 18.4 mt Est. of overall area of 16,500 ha Est. cement consumption 230 kg per sqm Jakarta, Banten, West Java demand: 2016: 16.2 mt 9M17: 12
Slide 13: Rebalance Portfolio and focus on home market
Indocement‟s Strategies under Current Tight Competition: Rebalance Portfolio and focus on home market Java Presence Grows • To reduce logistics cost and to defend market share at home markets sales are targeted towards home market • Central Java is one of the fastest growing market and underserved (
Slide 14: More bulk sales focus as Jakarta & West Java Projects started
Indocement‟s Strategies under Current Tight Competition: More bulk sales focus - as Jakarta & West Java Projects started In thousand tons Bag/Bulk sales composition Jan - Dec 20,000 • High bulk volume in Jakarta 18,000 • Indocement benefits from 3,517 3,931 proximity to Jakarta & West 16,000 20% 21%
Slide 15: Continuous focus on cost control with disciplined spending on promotional activities
Indocement‟s Strategies under Current Tight Competition: Continuous focus on cost control with disciplined spending on promotional activities Composition of Manufacturing Cost as % Fixed Cost Control – IDR Bio Trend 1,685 1,800 1,597 1,466 1,600 50% 45.1% 1,400 +14.9% 1,200 40% 1,000 30% -11.0% 23.3
Slide 16: Continue in Cost Leadership to maintain a decent margin in Q3 2017
Continue in Cost Leadership to maintain a decent margin in 3Q 2017 New market entrants leading to higher competition and pricing pressure but Indocement maintains better margin compared to peers INTP Gross margin development INTP EBITDA margin development 50.0% 40.0% 40.0% 35.0% 34.5% 34.0% 34.9% 30
Slide 17: Financial Result
Financial Result Consolidated Statement of Comprehensive Income 9M 2017 9M 2016 Variance Description Bio IDR Bio IDR Bio IDR % Total Sales Volume (thousand tons) 12,908 12,265 642.1 5.2% Domestic Sales Volume (thousand tons) 12,767 11,966 800.4 6.7% Export Sales Volume (thousand tons) 141 299 -158.3
Slide 18: Balance Sheet
Balance Sheet Consolidated Statement of Financial Position 9M 2017 9M 2016 Sep 17 vs Sep 16 FY2016 Description Bio IDR Bio IDR Bio IDR % Bio IDR Current Assets 11,883.7 12,816.3 -932.5 -7.3% 14,424.6 Non-Current Assets 15,569.8 15,168.6 401.2 2.6% 15,726.0 Current Liabilities 2,527.6 1,767.1 760.5 4
Slide 19: Shut Down Old Kilns and Run the most efficient kilns
Indocement‟s Strategies under Current Tight Competition: Shut Down Old Kilns and Run the most efficient kilns Run P14 production (10,000 tpd) in full-swing in 2017 will help to reduce further production cost by about USD 4-5 per ton 640 534 1,024 1,238 1,472 3,520 1,216 1,344 2,400 2,400 3,200 4,571
Slide 20: Lower Logistics Cost and Optimized Geographical Positioning
Indocement‟s Strategies under Current Tight Competition: Lower Logistics Cost and Optimized Geographical Positioning PontianakTerminal Samarinda Terminal Tarjun Factory 1 plant with production capacity of 2.6mt Tj. Priok Terminal Cigading Terminal Citeureup Factory Palimanan Factory Surabaya Sepanja
Slide 21: New Terminal Palembang - Progress Oct 2017
New Terminal Palembang - Progress Oct 2017 2 silos cement @ 5,000 ton 70 % (Civil & Mechanical) (total cap. 10,000 ton) Packing 1 packer of 120 ton/hour house on progress Silo 1 & 2 foundations on 1 line of bulk loading progress system 1 warehouse: 1,458 M2 Truck scale cap. 80 ton Area 3
Slide 22: New Terminal Lampung - Progress Oct 2017
New Terminal Lampung – Progress Oct 2017 3 steel silos cement @ 4,000 ton (total cap. 12,000 ton) 1 packer of 180 ton/hour 40 % (Jetty Works) 1 line of bulk loading system 1 Truck scale cap. 100 ton 1 Warehouse 1,000 M2 Area 4.2 Ha 1 Jetty Port Operating Target Q1 2019 Slide 22 - Nov
Slide 23: Vertical Integration in Ready-Mix Concrete & Aggregates
Indocement‟s Strategies under Current Tight Competition: Vertical Integration in Ready-Mix Concrete & Aggregates Strengthening Ready-Mix Concrete business particularly high-grade quality in order to meet the increase demand of infrastructure development in Indonesia. 5,000 000m3 000 tons 2,849 3,000
Slide 24: Product Differentiation: RAJAWALI as fighting brand
Indocement‟s Strategies under Current Tight Competition: Product Differentiation by introducing new brand of RAJAWALI as “fighting brand” Through its existing distribution channel, Rajawali was initially launched on Oct 10, 2016 in three cities in 2016. Currently Rajawali is offered in 30 cities: Ja
Slide 25: SuperSlag Cement - The most environmental friendly product
Indocement‟s Strategies under Current Tight Competition: SuperSlag Cement – The most environmental friendly product Durable and Ecofriendly Product • Slag cement is a product of S.No. Embodied CO2 Emission for CO2 Emission % Reduction consistent quality Raw Material (kg/Tonne) Compared to OPC Type I
Slide 26: End-User Program to Boost Customer Loyalty in Weak Demand Period
Indocement‟s Strategies under Current Tight Competition: End-User Program to Boost Customer Loyalty in Weak Demand Period Slide 26 - November 13, 2017 source: www.sementigaroda.com Indocement Tunggal Prakarsa Tbk Q3 2017 Results
Slide 27: Outlook of Indonesian Cement Market
Outlook of Indonesian Cement Market Market Condition National cement consumption growth started to turn positive and expected to grow around 7% in 2017 (versus negative growth of -0.6% in 2016) and 5-6% in 2018 Consumption in 2018 will still be driven by infrastructure projects and some of commercia
Slide 28: Indocement's Action Plan
Indocement’s Action Plan Run P14 production (10,000 tpd) in full-swing in 2018 will help to reduce further production cost by about USD 3-4 per ton Optimize product mix from 13 line of cement production will bring competitive advantages of Indocement to introduce different types of cement (OPC, PCC,
Slide 29: Thank You
42 Years Building Indonesia KOKOH THANK YOU Slide 29 - November 13, 2017 Indocement Tunggal Prakarsa Tbk Q3 2017 Results
Slide 30: Important Notice
Important Notice Disclaimer This presentation contains general information which provided without any representations or warranties, express or implied and does not constitute or form part of, and is not made in connection with, any offer for sale or subscription of or solicitation, recommendation,
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