Pt Integra Indocabinet Tbk · IDX:WOOD
Pt Integra Indocabinet Tbk — Investor Presentation (August 2020)
59 slides from Pt Integra Indocabinet Tbk's investor presentation, August 2020
Slide 1: PT Integra Indocabinet Tbk Investor Presentation
PT INTEGRA INDOCABINET TBK Integrated Wood-Based Company Investor Presentation August 2020 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 by segment growth strategy Development Goals protectionism Investment case Corpora
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 by segment growth strategy Development Goals protectionism Investment case Corpora
Slide 6: Milestones
Milestones Establishment of Relocation of Interkraft’s Integriya Dekorindo factory to an 8-ha site in (furniture distribution and Lamongan; establishment of Converted Barecore Acquisition of Belayan retail) and of the door Woodone Integra (wooden production facility Establishment Establishment of In
Slide 7: Corporate structure
Corporate structure PT. INTEGRA INDO LESTARI PUBLIC 68.1% 31.9% 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 30 June 2020: No. Name Number of Shares % of Shares 1 PT Integra Indo Lestari 4,298,201,535 68.1 2 PT Trimegah Sekuritas Indonesia Tbk 483,497,146 7.7 3 Public float 1,524,551,319 24.2 Total shares 6,306,250,000 100.0 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 by segment growth strategy Development Goals protectionism Investment case Corpora
Slide 13: Business model and growth strategy
Business model and growth strategy 2020 business plan US-China Trade War & Anti- Financial Strategy Dumping Opportunities ▪ Providing financial support to WOOD should benefit from wooden ensure growth products impacted by the Anti-Dumping & ▪ Improving financial structure Countervailing Policies 202
Slide 14: Business model and growth strategy
Business model and growth strategy Strategy in facing 2020 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: Product portfolio
Product portfolio Knock-down furniture Fully-assembled furniture Building components Millwork Plywood Wall paneling Window blinds Doors 15
Slide 16: Product portfolio
Product portfolio Target: Knock-down furniture Coaster/Scott Living Furniture: Setup furniture Costco: Setup furniture 16
Slide 17: Product portfolio
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 18: Product portfolio
Product portfolio Fast-growing products Window blinds Millwork Wall panel Plywood 18
Slide 19: Vertically-integrated operations
Vertically-integrated operations Forestry (FSC Certified) o Logs (Shorea / Meranti) o 2 forestry concessions of over 163,425 Forest mgmt, planning, ha with capacity of 90,000 m3 per year Forest resources Heavy equipment Logs pond and and harvesting and infrastructure grading Distribution & Retail o
Slide 20: 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 21: Geographic footprint and key customers
Geographic footprint and key customers Costco Wholesale Composite Technology Target Store Flexsteel Top 10 Customers IKEA Export 2019 Hampton Lumber Sales Alpine Furniture Coaster Company of America Wonder Wood China National Forest Products - 50 100 150 200 250 300 in IDR (bn) PT Jatim Sentra Utama
Slide 22: Production capacity
Production capacity Installed capacity (in m3) Integra Indocabinet Intera Interkraft Intertrend Total BC: BC: BC: BC: Year Furniture BC: FJLB Furniture Furniture Furniture Wooden Furniture BC Millwork Millwork Plywood Blind 2018 19,688 43,000 6,125 35,833 7,088 8,750 25,927 - 22,000 41,651 126,760 2
Slide 23: 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 24: Production facilities
Production facilities PT Integra Indocabinet Address: Sidoarjo Area: 21 ha No. of employees: 1,268 24
Slide 25: Production facilities
Production facilities PT Intera Indonesia Address: Sidoarjo Area: 7.6 ha No. of employees: 166 25
Slide 26: Production facilities
Production facilities PT Interkraft Address: Lamongan Area: 10 ha No. of employees: 428 26
Slide 27: Production facilities
Production facilities PT Intertrend Utama Address: Sidoarjo Area: 14 ha No. of employees: 419 27
Slide 28: 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 29: 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 by segment growth strategy Development Goals protectionism Investment case Corpora
Slide 30: 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 31: 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 32: Preserving our environment
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 33: Preserving our environment
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 34: Nurturing our talent
Nurturing our talent 97% No. of employees Retention rate No. of trainings FY2019 2,419 32 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 35: 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 36: 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 37: 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 38: Certifications and awards
Certifications and awards Forest Stewardship Council is an international The Company received Global Forest & Trade SVLK certification is required by Indonesian law non-governmental organization dedicated to Network (GFTN) award from WWF Indonesia in for all wood products exporter from Indonesia. pr
Slide 39: 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 40: 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 by segment growth strategy Development Goals protectionism Investment case Corpora
Slide 41: 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 42: Opportunity in US protectionism
Opportunity in US protectionism Potential AD and CVD on Brazilian and Chinese wood moldings and millwork products On 06 August 2020, the US Commerce Department Issues Preliminary Antidumping Determinations on Wood Moldings and Millwork Products from China and Brazil (21, 22). DOC imposed preliminary
Slide 43: 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 2019 to USD3bn or by -35.8% y/y. As of 06 March 2019, the American Kitchen Ca
Slide 44: Opportunity in US-China tensions
Opportunity in US-China tensions ▪ US furniture imports has been the largest among other importing countries, with wooden furniture as the most imported product. In 2018, the import value reached USD27.5b but dropped by 6.9% in 2019 to USD25.6b which was due to the tension between the US and China w
Slide 45: Global furniture trading
Global furniture trading Major furniture importing countries (2014-19) ▪ US remains the leading furniture importer with the value of USD27.4bn 30,000 imported in 2018, which grew by 8.7% y/y 25,000 ▪ The largest value of furniture type imported is the wooden furniture 20,000 which accounted for more
Slide 46: Rise in online home furnishing sales in 2020
Rise in online home furnishing sales in 2020 (9) ▪ Bed Bath & Beyond digital sales were up 16% YoY in March 2020. ▪ Wayfair sales doubled since the COVID-19 crisis started. ▪ Target has seen very strong growth in e-commerce sales of home furnishing products in 1H 2020. ▪ V12, a leading provider of p
Slide 47: Business outlook
Business outlook Integra will continue to benefit from: ▪ Market expansion ▪ China and US tensions; implementation of tariffs, AD and CVD on Chinese exports (particularly wood-based products) to the US and potentially other large exporting countries, such as Brazil and Vietnam; opportunity to take o
Slide 48: 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 by segment growth strategy Development Goals protectionism Investment case Corpora
Slide 49: Sales by segment 1H20 vs 1H19
Sales by segment 1H20 vs 1H19 2% 2% Retail and Retail and 80% distribution 69% distribution Manufacturing Manufacturing 9% (export) 14% (export) Forestry Forestry 9% Manufacturing (domestic) 15% Manufacturing (domestic) 1H20 1H19 in IDR 1H20 1H19 Growth Our export sales grew 40.3% YoY due to strong
Slide 50: Sales by segment FY19 vs FY18
Sales by segment FY19 VS FY18 2% 2% Retail and Retail and 67% Manufacturing 6% distribution distribution (export) Forestry 66% Manufacturing 16% (export) Forestry 15% 2018 25% Manufacturing 2019 Manufacturing (domestic) (domestic) in IDR 2018 2019 Growth Manufacturing – export 1,403,804,200,608 1,40
Slide 51: Sales by region 1H20 vs 1H19
Sales by region 1H20 vs 1H19 1H20 76% 7% 3% 15% 1H19 53% 11% 7% 29% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% in IDR 1H19 1H20 Growth America 513,640,801,165 861,793,672,636 67.8% US sales showed strong growth of 67.8% y/y, above expectations, while Local and other regions dropped, in Asia 107,566
Slide 52: Sales by region FY19 vs FY18
Sales by region FY19 VS FY18 2019 52% 7% 6% 34% 2018 45% 8% 14% 33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% in IDR 2018 2019 Growth US sales showed strong growth of 18.9% y/y, while other regions dropped America 942,230,609,155 1,121,022,720,939 18.9% On the other hand, domestic sales in the man
Slide 53: Top Customers 1H20
Top 10 Customers 1H20 PT Balikpapan Forest Industries Wonder Wood OI-WOOD PRODUCTS LLC Composite Technology International Ltd Flexsteel PT Kayu Lapis Murni Alpine Furniture Inc Target Costco Wholesale Corporation Hampton Lumber - 50.00 100.00 150.00 200.00 250.00 300.00 in IDR (bn) 53
Slide 54: Financial highlights
Financial highlights in IDR’b 2016 2017 2018 2019 1H19 1H20 Sales 1,323 1,734 2,101 2,136 978 1,134 1H20 sales growth was strong with 16% growth due to Gross profit 458 561 739 732 343 365 strong demand from US market. GPM 34.6% 32.3% 35.2% 34.3% 35.0% 32.2% The Company still able to maintain resili
Slide 55: Balance sheet
Balance sheet in IDR’b 2016 2017 2018 2019 1H20 Cash & ST investments 30,450 54,484 64,166 23,692 22,576 Inventories 893,017 1,172,715 1,431,983 1,775,706 1,986,524 Account receivable 187,912 165,131 460,194 936,334 715,320 Others 216,324 274,066 369,674 316,038 397,903 Current assets 1,327,702 1,66
Slide 56: Capex and production capacity
Capex and production capacity Capex (IDR’m) FY 2017 FY 2018 FY 2019 Manufacturing 115,811 85% 201,382 97% 250,000 93% Forestry 15,263 11% 5,675 2% 5,000 2% Commerce 4,580 3% 5,273 1% 15,000 5% Total 135,654 212,330 270,000 Advances 269,443 285,548 300,000 Production capacity FY 2017 FY 2018 FY 2019
Slide 57: Capital structure
Capital structure Production capacity IDR facilities USD facilities Total debt in IDR Short term debt facility 1,777,847,695,524 12,000,000 1,944,686,345,092 Long term debt facility 300,805,322,753 - 300,805,322,753 Total debt facility 2,078,653,018,277 12,000,000 2,245,491,667,844 Undrawn debt faci
Slide 58: 2020 Earnings guidance
2020 Earnings guidance 20% sales growth y/y 10-12% net profit margin 14-35% EPS growth y/y Integra allocated IDR100-120b capex in 2020 for working capital requirements and maintenance capex 58
Slide 59: 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
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