Slide 1: PT Integra Indocabinet Tbk Investor Presentation 1Q22
PT INTEGRA INDOCABINET TBK Integrated Wood-Based Company Investor Presentation 1Q22 Desa Betro, Kecamatan Sedati Sidoarjo 61253 – Indonesia Phone: +62 31 8910434, +62 31 8910435, +62 31 8910436 Faximile: +62 31 8911391 E-mail: corsec.integra@iil.co.id Website: www.integrafurniture.co.id
Slide 2: Table of contents
Table of contents Corporate Business ESG, sustainability Growth Financial Introduction overview overview and safety drivers overview Company profile Milestones Business model and UN Sustainable Opportunity in US Sales order update growth strategy Development Goals protectionism Investment case Corpo
Slide 3: Company profile
Company profile Establishment date 19 May 1989 Listing date 21 June 2017 Security code WOOD IJ Industry, trade, and processing services of wood-based furniture and other wood products, forest concessions, as well as retail Business field and distribution of furniture and home decorations through the
Slide 4: Investment case
Investment case Efficient operations Largest vertically-integrated timber products manufacturer, which results in margin improvement due to cost efficiencies. Immense growth potential Taking advantage of the US-China trade war opportunity and AD & CVD implementation on China’s timber products, Integ
Slide 5: Table of contents
Table of contents Corporate Business ESG, sustainability Growth Financial Introduction overview overview and safety drivers overview Company profile Milestones Business model and UN Sustainable Opportunity in US Sales order update growth strategy Development Goals protectionism Investment case Corpo
Slide 6: Milestones
Milestones Relocation of Interkraft’s factory to an 8-ha site in Lamongan; establishment Establishment of Converted ICOVID-19 Issued shelf of Woodone Integra Integriya Dekorindo Barecore Challenges; keep registered Bond (wooden doors); Acquisition of (furniture distribution and production growing ex
Slide 7: Corporate structure
Corporate structure PT. INTEGRA INDO LESTARI PUBLIC 71.9% 28.1% Forestry Manufacturing Retail & Distribution PT Narkata Rimba PT Intertrend Utama PT Integriya Dekorindo PT Belayan River Timber PT Interkraft PT Intera Indonesia 7
Slide 8: Board of Commissioners
Board of Commissioners Hendro Rusli President Commissioner President Commissioner since 2016 Director at PT Interkraft, PT Belayan River Timber, and PT Narkata Rimba Commissioner at PT Intera Indonesia. Previously served as President Commissioner at PT Intertrend Utama (2013-2016), Director
Slide 9: Board of Directors
Board of Directors Halim Rusli President Director President Director since 1989 and one of the founders of the Company Received his Bachelor of Business Administration degree from Redlands University, United States in 1985 Meity Lin Lin Vice President Director Vice President since 2016 Presi
Slide 10: Shareholder structure
Shareholder structure As of 31 March 2022: No. Name Number of Shares % of Shares 1 PT Integra Indo Lestari 4,573,835,000 71.9 2 Public float 1,788,665,000 28.1 Total shares 6,362,500,000 100.0 10
Slide 11: Commitment to minority shareholders
Commitment to minority shareholders As a listed Company, we are committed to creating value for minority shareholders and acting in their best interests through: Fair Disclosure The Company is committed to fairly disclosing information to all our shareholders. Voting in General Meeting All our share
Slide 12: Table of contents
Table of contents Corporate Business ESG, sustainability Growth Financial Introduction overview overview and safety drivers overview Company profile Milestones Business model and UN Sustainable Opportunity in US Sales order update growth strategy Development Goals protectionism Investment case Corpo
Slide 13: Business model and growth strategy
Business model and growth strategy 2022 business plan Financial Strategy US-China Trade War & Anti- Providing financial support to Dumping Opportunities ensure growth Improving financial structure WOOD should benefit from wooden More competitive financing cost products impacted by the Anti-Dum
Slide 14: Business model and growth strategy
Business model and growth strategy Strategy in facing 2022 challenges Increasing competitiveness WOOD is making sure both material and labor costs are competitive versus those of regional competitors by moving to more efficient levels of production processes Preparing material resources WOOD is prep
Slide 15: Business model and growth strategy: cutting middlemen
Business model and growth strategy Forest Successful Foundation: Manufacturer • Our strategy is to help our customers to be successful by cutting all the middlemen in current existing supply chain • The creation of synergetic Broker partnership between vertically integrated wooden manufacturer and l
Slide 16: Business model and growth strategy
Business model and growth strategy Non Competing Non Affiliated Company Customers Non affiliated to Integra Group Penetrating on non competing to existing customers 1 2 3 4 5 Minimizing Fixed Cost Less Sensitive Product Own Brand on E-Commerce Channel • Only Sales and Marketing initial set up Starti
Slide 17: Product portfolio
Product portfolio Knock-down furniture Fully-assembled furniture Building components Millwork Plywood Wall paneling Window blinds Doors 17
Slide 18: Product portfolio: Knocked Down Furniture
Product portfolio Knocked Down Furniture Photo courtesy of TARGET 18
Slide 19: Product portfolio: Knocked Down Furniture
Product portfolio Knocked Down Furniture Photo courtesy of TARGET 19
Slide 20: Product portfolio: Fully Assembled Furniture
Product portfolio Fully Assembled Furniture 20
Slide 21: Product portfolio: Fully Assembled Furniture
Product portfolio Fully Assembled Furniture 21
Slide 22: Product portfolio: Baby Furniture
Product portfolio Baby Furniture 22
Slide 23: Product portfolio: Bunk Bed Furniture
Product portfolio Bunk Bed Furniture 23
Slide 24: Product portfolio: Natural Fiber Furniture
Product portfolio Natural Fiber Furniture Photo courtesy of TARGET & IKEA 24
Slide 25: Product portfolio: Kitchen Cabinet
Product portfolio Kitchen Cabinet 25
Slide 26: Product portfolio: Vanity Cabinet
Product portfolio Vanity Cabinet 26
Slide 27: Product portfolio: Government projects
Product portfolio Government projects: Mid-low housing and Government projects: boarding house furniture School furniture On Friday, 04 January 2019, Indonesian President Jokowi Widodo inaugurated 3 apartment towers, in which one was a student apartment named “STKIP PGRI” in Tulungagung, East Jakart
Slide 28: Product portfolio: Millwork Products
Product portfolio Millwork Products 28
Slide 29: Product portfolio: Hobby Board / Laminated Board
Product portfolio Hobby Board /Laminated Board 29
Slide 30: Product portfolio: Plywood & LVL
Product portfolio Plywood & LVL 30
Slide 31: Product portfolio: Truck Flooring
Product portfolio Truck Flooring 31
Slide 32: Product portfolio
Product portfolio 04,04, 04,4, (titers ali FW WLW WU 32
Slide 33: Vertically-integrated operations
Vertically-integrated operations Forestry (FSC Certified) o Logs (Shorea / Meranti) o 2 forestry concessions of over 163,425 ha Forest mgmt, planning, with capacity of 90,000 m3 per year Forest resources Heavy equipment Logs pond and and harvesting and infrastructure grading Distribution & Retail o
Slide 34: Value chain
Value chain Forestry Manufacturing Log yard Fully-assembled Knock down Building furniture furniture components Dry sawn timber Dry sawn timber Dry sawn timber Sawmill process warehouse warehouse warehouse Wet sawn timber Processing Processing Processing warehouse Sanding Final sanding Packing Kiln d
Slide 35: Geographic footprint and key customers
Geographic footprint and key customers Morgan Truck Body LLC Liberty Wood International LLC US Lumber Direct Composite Technology International Top 10 Customers Alexandria Moulding, INC Export 2021 US Lumber Direct Cotsco Wholesale Corporation Starlight Forever PTE, LTD Target Store Hampton Lumber -
Slide 36: Production capacity
Production capacity Installed capacity (in m3) Integra Indocabinet Intera Interkraft Intertrend Total BC: BC: BC: BC: BC: Year Furniture BC: FJLB Furniture Furniture Furniture Wooden Furniture BC Millwork Millwork Millwork Plywood Blind 2018 19,688 43,000 6,125 35,833 7,088 8,750 25,927 - 22,000 41,
Slide 37: Production area
Production area Area utilization (in ha) Integra Indocabinet Intera Interkraft Intertrend WII Total BC: BC: BC: BC: Products Furniture BC: FJLB Furniture Furniture Furniture Wooden Doors Millwork Millwork Plywood Blind Betro, 16 5 - 2 - - - - - 2 25 Sidoarjo Gedangan, - - 2.6 - - - - - - - 2.6 Sidoa
Slide 38: Production facilities: PT Integra Indocabinet
Production facilities PT Integra Indocabinet Address: Sidoarjo Area: 21 ha No. of employees: 1,268 38
Slide 39: Production facilities: PT Intera Indonesia
Production facilities PT Intera Indonesia Address: Sidoarjo Area: 7.6 ha No. of employees: 166 39
Slide 40: Production facilities: PT Interkraft
Production facilities PT Interkraft Address: Lamongan Area: 10 ha No. of employees: 428 40
Slide 41: Production facilities: PT Intertrend Utama
Production facilities PT Intertrend Utama Address: Sidoarjo Area: 14 ha No. of employees: 419 41
Slide 42: Impact of COVID-19
Impact of COVID-19 Safety and prevention efforts to protect our employees, such as: Public service announcements on sanitation and general recommendation to minimize contact and transmission Temperature checks upon entry Sanitation, protection and immune boosters Early social distancing tr
Slide 43: Table of contents
Table of contents Corporate Business ESG, sustainability Growth Financial Introduction overview overview and safety drivers overview Company profile Milestones Business model and UN Sustainable Opportunity in US Sales order update growth strategy Development Goals protectionism Investment case Corpo
Slide 44: UN Sustainable Development Goals
UN Sustainable Development Goals Following the Company’s sustainability strategies and initiatives, we contribute to the following SDGs: Equal remuneration Recycle and reuse Given large Energy efficiency Source only legal and for women and men. our water. opportunity to through usage of ce
Slide 45: Preserving our environment
Preserving our environment Sustainable sourcing Our core principle in managing two of our forest concessions is to conduct responsible tropical natural management in line with both FSC and National guidelines to maintain our status as the well-managed tropical natural forest. Hence, we obtained both
Slide 46: Preserving our environment: Climate
Preserving our environment Climate We believe climate change poses a threat to our planet and its impact has become more visible. At Integra, we address this issue through energy efficiency by reducing energy usage. In our manufacturing division, in line with our spirit to realize a zero-waste strat
Slide 47: Preserving our environment: Manufacturing
Preserving our environment Manufacturing Health & Safety We place health & safety as our first priority to realize Zero Accident strategy in our working environment. Moreover, to be a supplier for international buyers, providing healthy & safe working environment at our production facilities is esse
Slide 48: Nurturing our talent
Nurturing our talent 95% No. of employees Retention rate No. of trainings FY2021 1,952 24 Competitive Benefits At Integra, we value our employees who become part of our family and grow with the company. Understanding the economic growth and increasing inflation, we provide wages and benefits that me
Slide 49: Governance
Governance Integra adheres to the following good corporate governance (GCG) principles: Transparency Accountability Responsibility Independence Fairness Ease of access to Clarity of functions, Compliance in the Professionally managed Fair and equal treatment complete, accurate and structure, systems
Slide 50: Governance
Governance Governance structure General Meeting of Shareholders GMS – The Government regulation no.40/2007 on Limited Liability Companies (GMS) require a company to held GMS and placed it as the highest organ in the Company structure. Both BOC and BOD are responsible to the GMS. The latest GMS was h
Slide 51: Governance
Governance Whistleblowing policy The violation reporting system or also known as the Whistleblowing System was established in order to encourage the employees to report violations based on a reward system. The approach used by the Company to maintain management discipline aligns with the Company’s i
Slide 52: Certifications and awards
Certifications and awards Forest Stewardship Council is an international BSCI is an initiative of the Foreign Trade Association SVLK certification is required by Indonesian law non-governmental organization dedicated to (FTA), the leading business association of European and for all wood products ex
Slide 53: COVID-19 safety and prevention efforts
COVID-19 safety and prevention efforts Public services announcements Temperature checks upon entry PSAs are put on public & visible spaces to outline sanitation and general recommendations to minimize contact and transmission. Sanitation, protection and immune boosters Social distancing training and
Slide 54: Carbon Credit
Carbon Credit A carbon credit is a unit of exchange that businesses, organizations and individuals can use to offset their greenhouse gas emissions. One carbon credit is equivalent to one metric ton of greenhouse gases removed from the atmosphere. A carbon credit and a carbon offset are synonymous t
Slide 55: Carbon Credit
Carbon Credit 2018 2019 2020 2021 (through Aug) Voluntary Carbon Market Volume Price/ ton Volume Price/ ton Volume Price/ ton Volume Price/ ton Size by Project Category (MtCO2e) (USD) (MtCO2e) (USD) (MtCO2e) (USD) (MtCO2e) (USD) Forestry & Land Use 50.70 3.20 36.70 4.33 48.10 5.60 115.00 4.73 Renewa
Slide 56: Carbon Credit
Carbon Credit Carbon Prices as of April 2022 Integra current forest area of 163,425ha Tropical Forest from Logged to Protected Forest has the potential emission reduction of 2.1 MtCO2e per year. Additionally, the Company also acquired forest concession area of 18,130ha with potential emission reduct
Slide 57: Table of contents
Table of contents Corporate Business ESG, sustainability Growth Financial Introduction overview overview and safety drivers overview Company profile Milestones Business model and UN Sustainable Opportunity in US Sales order update growth strategy Development Goals protectionism Investment case Corpo
Slide 58: Opportunity in US protectionism
Opportunity in US protectionism In addition to US trade war tariffs implemented on imported Chinese products which started in 06 July 2018, China also faced additional anti-dumping (AD) and anti-subsidy (CVD) duties that cause its products becoming less competitive compared to the other countries. W
Slide 59: Opportunity in US protectionism
Opportunity in US protectionism US Imposed AD and CVD on Chinese wood moldings and millwork products On 16 February 2021, the US Commerce Department Issued final Antidumping and Antisubsidy Determinations on Wood Moldings and Millwork Products from China (21,22). DOC imposed final antidumping duties
Slide 60: Opportunity in US protectionism
Opportunity in US protectionism US-imposed AD and CVD duties on Chinese wooden cabinets and vanities products US imports of wooden cabinets and vanities product from China reach USD4.7b in 2018 but dropped significantly in 2020 to USD1.7bn or drop by -45.5% y/y. As of 06 March 2019, the American Kit
Slide 61: Export tariff to US
Export tariff to US China Others Potential Products Market Trade war Anti dumping duty Anti subsidy duty General GSP tariff Wood Mouldings 25% 45.49 - 231.60% 20.56% - 252.29% 3.2% Free USD1.9bn & Millwork Wooden Cabinets 25% 48.5% - 262.18% 20.93% - 293.45% Free Free USD11.1bn & Vanities Hardwood 2
Slide 62: Opportunity in US-China tensions
Opportunity in US-China tensions As of 2M22, US wooden furniture imports grew by 3.1% YoY with Indonesia contribution grew from 4.4% in 2M21 to 5.5% in 2M22. Additionally Indonesia wooden furniture exports to US recorded the highest growth compare to other regional competitors of 30.2% YoY. US w
Slide 63: Opportunity in US-China tensions
Opportunity in US-China tensions Wooden Furniture Exporters to US (in USDmn) 7,000 6,251 6,000 5,516 5,292 5,134 5,000 4,597 4,228 4,000 3,243 3,442 3,537 2,947 3,000 2,563 2,165 2,000 1,381 1,451 695471 733498 923 629 863 1,000 619450 519 - 2016 2017 2018 2019 2020 2021 China Vietnam Malaysia Indon
Slide 64: Global furniture trading
Global furniture trading Major furniture importing countries (in USDmn), 2014-2021 35,000 US remains the leading furniture importer with the value of 30,000 USD31.9bn imported in 2021, which grew by 23.9% y/y 25,000 The largest value of furniture type imported is the wooden 20,000 furniture whic
Slide 65: Business outlook
Business outlook Integra will continue to benefit from: Market expansion Anti-Dumping and Anti-Subsidy tariffs implementation on Chinese exports (particularly wood-based products) by the US will remain as an open opportunity for Integra to keep expanding its market share in US market. Limited
Slide 66: Table of contents
Table of contents Corporate Business ESG, sustainability Growth Financial Introduction overview overview and safety drivers overview Company profile Milestones Business model and UN Sustainable Opportunity in US Sales order update growth strategy Development Goals protectionism Investment case Corpo
Slide 67: Highest 1Q22 Earnings Result
Highest 1Q22 Earnings Result Revenue Op. profit (IDRbn) (IDRbn) 116.6% 4.2% -0.9% 2,500 QoQ 400 70.5% YoY 1,976 1,895 1,976 322 325 QoQ 322 2,000 YoY 300 1,500 189 912 200 1,000 500 100 - - 1Q21 1Q22 4Q21 1Q21 1Q21 1Q22 4Q21 1Q21 Net profit (IDRbn) 103.0% 15.3% 250 • The Company hit another all time
Slide 68: Sales by segment 1Q22 vs 1Q21
Sales by segment 1Q22 vs 1Q21 0.9% 0.9% 1.8% Forestry Retail Forestry 96.2% 1.0% 82.7% 2.1% Manufacturing Manufacturing Manufacturing Manufacturing (export) (export) (domestic) (domestic) 1Q22 1Q21 in IDR 1Q22 (Unaudited) 1Q21 (Unaudited) Growth Manufacture Export 1,900,165,851,575 886,547,757,310 1
Slide 69: Sales by region 1Q22 vs 1Q21
Sales by region 1Q22 VS 1Q21 1Q22 93% 2% 1%4% 1Q21 92% 3%2%3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% in IDR 1Q22 1Q21 Growth America 1,843,315,987,572 842,739,457,070 118.7% US sales showed strong growth of 118.7% YoY, while other regions like Asian, Europe and domestic market Asia 34,991,343,2
Slide 70: Sales by segment 2021 vs 2020
Sales by segment 2021 vs 2020 1.7% Forestry 4.1% 95.2% Forestry 82.7% 3.1% Manufacturing Manufacturing Manufacturing (export) 13.2% (export) (domestic) Manufacturing (domestic) 2021 2020 in IDR 2021 (Audited) 2020(Audited) Growth Manufacture Export 5,153,697,873,821 2,423,132,599,171 112.7% Our 2021
Slide 71: Sales by region FY21 vs FY20
Sales by region FY21 VS FY20 2021 92% 2%2% 5% 2020 75% 5% 3% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% in IDR 2021 (Audited) 2020 (Audited) Growth US sales showed strong growth of 131% y/y, while other America 5,075,248,338,447 2,196,919,994,012 131.0% regions dropped Asia 105,587,242,656 152,
Slide 72: Financial highlights
Financial highlights in IDR’b 2017 2018 2019 2020 2021 1Q21 1Q22 Sales 1,734 2,101 2,136 2,929 5,416 912 1,976 1Q22 sales growth was strong with 116.6% Gross profit 561 739 744 986 1,917 301 661 growth due to strong demand from US market. GPM 32.3% 35.2% 34.8% 33.6% 35.4% 33.0% 33.4% Operating profi
Slide 73: Balance sheet
Balance sheet in IDR’b 2016 2017 2018 2019 2020 2021 Cash & ST investments 30,450 54,484 64,216 22,265 40,487 116,906 Inventories 893,017 1,172,715 1,431,983 1,739,014 2,065,822 2,603,605 Account receivable 187,912 165,131 460,194 928,901 686,716 705,994 Others 216,324 274,066 369,674 310,126 645,98
Slide 74: Capex and production capacity
Capex and production capacity Capex (IDR’m) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Manufacturing 115,811 85% 201,382 97% 270,633 98.8% 95,763 99.5% 100,163 85.7% Forestry 15,263 11% 5,675 2% 813 0.3% 42 0.0% 14,238 14.3% Commerce 4,580 3% 5,273 1% 2,385 0.9% 401 0.4% - - Total 135,654 212,330 273,8
Slide 75: Capital structure
Capital structure Debt IDR facilities USD facilities Total debt in IDR Short term debt facility 1,420,415,123,125 8,000,000 1,461,304,681,504 Long term debt facility 553,678,586,463 - 553,678,586,463 Bonds 450,000,000,000 - 450,000,000,000 Sukuk 150,000,000,000 - 150,000,000,000 Total debt facility
Slide 76: 2022 Earnings guidance
2022 Earnings guidance 25% sales growth y/y 10-12% net profit margin 14-35% EPS growth y/y Integra allocated IDR250bn capex in 2022 for expansion and maintenance capex 76
Slide 77: Thank you!
THANK YOU! Desa Betro, Kecamatan Sedati Sidoarjo 61253 – Indonesia Phone: +62 31 8910434, +62 31 8910435, +62 31 8910436 Faximile: +62 31 8911391 E-mail: corsec.integra@iil.co.id Website: www.integrafurniture.co.id