Pt Indocement Tunggal Prakarsa Tbk · IDX:INTP
Pt Indocement Tunggal Prakarsa Tbk — Q3 2016 Earnings Presentation
21 slides from Pt Indocement Tunggal Prakarsa Tbk's earnings presentation, Nov 17, 2016
Slide 1: Q3 2016 Conference Call, Jakarta
Mr. Christian Kartawijaya, CEO Mr. Tju Lie Sukanto, CFO Q3 2016 Conference Call, Jakarta, November 17, 2016 Disclaimer: Information presented here is not intended for further publication
Slide 2: Indonesian Cement Industry 2016 Landscape
Indonesian Cement Industry 2016 Landscape Lafarge Indonesia 1.8 mio ton Semen Bosowa 6.2 mio ton Indocement Anhui Conch 24.3 mio ton 1.3 mio ton Semen Indonesia Semen Indonesia 8.2 mio ton 7.8 mio ton Semen Baturaja Semen Kupang/Merah Putih 2.0 mio ton 0.6 mio ton Semen Indonesia Merah Putih 14.4 mi
Slide 3: Demand/Supply Outlook: Oversupply Market
Demand/Supply Outlook: Oversupply Market in mio Tons CAGR Supply 2001-2015: 3.5% CAGR Supply 2016-2025: 5.8% CAGR Demand 2001-2015: 7.2% CAGR Demand 2016-2025: 6.4% Year Over Supply 91.9% 92.4% 2015 15.4 88.7% 85.4% 132.3 134.3 134.3 85.3% 2016 27.0 84.8% 126.8 2017 38.3 78.9% 80.2% 80.1% 121.6 134.
Slide 4: Yearly Volume & % Growth of Cement Consumption in Indonesia vs GDP
Yearly Volume & % Growth of Cement Consumption in Indonesia of 15 years vs GDP movement year by year Source: Indonesian Cement Association, BPS Statistic * 2016 GDP = Q3 2016 GDP 62.0 62.9 17.7% 59.9 58.0 55.0 15.2% 48.0 14.5% 11.4% 40.8 38.1 38.4 9.7% 34.2 31.5 31.9 30.2 27.1 27.5 25.7 7.0% 6.3% 6.
Slide 5: Growth in Cement Demand link to the declining Commodity and Coal
Growth in Cement Demand link to the declining Commodity and Coal Bio USD % Demand Growth 30.0 20% 25.0 17.7% 20.0 14.5% 15% 15.0 10.0 5.0 10% 0.0 -5.0 6.2% 5.5% 5% -10.0 3.3% 3.5% 3.0% -15.0 -20.0 0% 2010 2011 2012 2013 2014 2015 2016e Non Oil and Gas Oil and Gas Cement Demand BI/BCA Rate % % Demand
Slide 6: Java is still key market area in delivering strong results
Java is still key market area in delivering strong results On absolute terms Java remains the dominant factors in delivering strong results However, outside of Java contributes higher percentage of growth than Java for Q3 2016 Geographic composition of Sales Java (LHS) Trend Java Outside Java (R
Slide 7: Domestic Consumption Growth & Market Share per region
Domestic Consumption Growth & Market Share per region YTD October 2016 Market Growth: >15% 10-15% Up to October, Western Java still record 5-10% negative growth by -7.4% YoY. Meanwhile Outside Java growth is 4.8% 0-5% due to high growth in Sulawesi and East Indonesia which offset negative growth <0%
Slide 8: The importance of bulk sales continues
The importance of bulk sales continues Growth rate for bag sales is higher than bulk due to delay in commercial and infrastructure projects in Q3 2016 Composition of bag vs bulk sales in Q3 2016 is 76.9% vs 23.1% Indocement positions itself as a reliable partner for infrastructure projects pro
Slide 9: Continuous focus on cost control helped to partly offset negative development from pricing
Continuous focus on cost control helped to partly offset negative development from pricing Composition of Manufacturing Cost as % Fixed Cost Reduction Trend In Bio Selling Expense G&A Expense 50% 2,000 45% 1,794 40.6% 40% 1,597 1,466 1,500 35% 30% 26.9% 25% 21.7% 1,000 -11% -8% 43.1% 20% 15% 10.7% 4
Slide 10: Continue in Cost Leadership to maintain a decent margin up to Q3-2016
Continue in Cost Leadership to maintain a decent margin up to Q3-2016 New market entrants leading to higher competition and pricing pressure but Indocement delivers better margin development compared to peers INTP Gross margin development INTP EBITDA margin development 2013 2014 2015 2016 48.0% 20
Slide 11: Financial Result
Financial Result Consolidated Statement of Comprehensive Income * Operating margin reduction from 28.6% to 24.6% contributed by lower revenues by -11.9% due to strong competition on weak demand situation which impact was reduced by cost efficiency both in production (-7.2%) and administrative lines
Slide 12: Balance Sheet
Balance Sheet Consolidated Statement of Financial Position • Trade receivables are higher under current competitive market while our bulk sales also increase. • Increase in Non-Current Assets was mainly due to spending in capital expenditures and tax revaluation – difference in NBV of fixed assets b
Slide 13: Our P14 in Citeureup has already started its commissioning
Our P14 in Citeureup has already started its commissioning 1 brownfield project with capacity of 4.4 mio ton and investment cost of Rp5.5 – 6 trillion Inauguration of Cement plant on 20 October 2016 and start to produce clinker and cement (saving costs of USD7-8 per ton compared to our older kil
Slide 14: Operational Efficiency and Financing Initiative in 2016
Operational Efficiency and Financing Initiative in 2016 1. Operating the most EFFICIENT Kiln: • Kiln 1 & 2 (the oldest plants and inefficient) have stopped operations for 3 months during the first half of 2016 • Fully operate VRM and the most efficient new kilns 2. Prioritizing supply to the closest
Slide 15: New Brand of "RAJAWALI"
New Brand of “RAJAWALI” Product Place Promotion Price • PCC Type 1. • Main target is project • To grab project segment • Price strategy and Payment segment and 2nd tier market which is a niche market, we period is to compete head- segment (with low or will utilize direct to-head with 2nd Tier cement
Slide 16: Capacity Expansion & Future Investment to participate in Industry Growth
Capacity Expansion & Future Investment to participate in Industry Growth 1 unit an aero derivative gas turbine (ADGT) to supply 73 MW (including power supply from Steam Turbine to Citeureup factory) started running in Q3/2016: IDR 468.3 Bio 1 Cement and packing floating terminal in Pontianak to
Slide 17: Ready Mix Concrete Expansion
Ready Mix Concrete Expansion • Strengthening Ready-Mix Concrete business particularly high-grade quality in order to meet the increase demand of infrastructure development in Indonesia. • Current focus is on infrastructure projects and its domino-effect on development of residential, industrial area
Slide 18: Outlook for 2016 & 2017
Outlook for 2016 & 2017 Market Condition • National cement market 2016 is estimated to growth by 1.5% and consumption growth may be better around 5-6% in 2017 • Consumption in end of 2016 and 2017 will increase in line with higher used infrastructure’s budget and the starting of some commercial and
Slide 19: Challenges in Year 2016 onward
Challenges in Year 2016 onward How to win in a very tight Competitive Cement Market? • Infrastructure Cost Management Development in Java & Outside Java Efficient logistic & Distribution plus • Domino-effect for Truck Availability residential/ housing Terminals to enable penetration to development a
Slide 20: Thank You
41 Years Building Indonesia KOKOH THANK YOU Slide 20 Q3 2016 Conference Call
Slide 21: 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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