PT Indocement Tunggal Prakarsa Tbk · IDX:INTP
PT Indocement Tunggal Prakarsa Tbk — H1 2019 Earnings Presentation
32 slides from PT Indocement Tunggal Prakarsa Tbk's earnings presentation, Aug 19, 2019
Slide 1: PT Indocement Tunggal Prakarsa Tbk H1 2019 Financial Results
INDOCEMENT PT Indocement Tunggal Prakarsa Tbk H1 2019 Financial Results Tarjun Factory – South Kalimantan
Slide 2: Agenda
Agenda Current Financial Indocement Domestic Investment Outlook Update Q2 Fact Sheet Market Strategy 2019 2019 Condition Slide 2 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
Slide 3: Indonesia at a Glance
Indonesia at a Glance Balikpapan - Samarinda Manado - Bitung Medan – Binjai Pekanbaru - Dumai Palembang - Inderalaya Makassar Airport Toll Toll Road (Operation) Trans Java Bali Mandara Toll Road (Construction Stage) Lampung - Terbanggi Besar Source: Indonesia Toll Road Network (2019), Ministry of Pu
Slide 4: Indocement: Overview H1 2019
Indocement: Overview H1 2019 Strong position with further upside potential Booked sales volume of -1.7%, surpassing national growth of -2.3% Market share increase from 26.1% to 26.3% Net Revenues increased by +7.7% to IDR 7.0 trillion due to higher average selling price by +6.9% coupled with h
Slide 5: Strong Footprint in West Java as a Key Advantage
Strong Footprint in West Java as a Key Advantage Integrated CEM plant AGG plant Country capital ANDAMAN SEA (Jakarta) Asset base CEM terminal RMC plant 25.5 mt CEM capacity BRUNEI MALAYSIA 2.8 mt AGG capacity 42 RMC plants Cement Palembang Consumption YTD Pontianak Samarinda Others 2019 9% Sulawesi
Slide 6: Agenda
Agenda Current Financial Indocement Domestic Investment Outlook Update Q1 Fact Sheet Market Strategy 2019 2019 Condition Slide 6 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
Slide 7: Indonesia Cement Industry 2019 Landscape
Indonesia Cement Industry 2019 Landscape Sumatera: 17.7 Kalimantan: 5.8 Sulawesi: 14.1 Indonesia: 114.8 SI: 10.4 (I) SI: 7.4 (I) INTP: 2.8 (I) Integrated: 102.2 SBI: 1.8 (I) BSM: 4.4 (I) CCI: 3.0 (I) Grinding Mill: 12.6 SMBR: 3.9 (I) CCI: 2.3 (I) BSM: 1.2 (GM) MP: 0.4 (I) Wes
Slide 8: Indonesia Cement Industry 2019 Capacity Share
Indonesia Cement Industry 2019 Capacity Share Capacity in million Tons per Annum (Capacity Share) 1. Semen Indonesia + SBI: 51.7 (45.1%) 75.9 94.3 108.0 111.5 114.8 (SBI: ex. LHI) 2. Indocement: 25.5 (22.2%) 5 16 21 22 6 25 3. Conch: 11.2 (9.7%) 10 12 12 12 4. Bosowa: 7.4 (6.4%) 5. Cemindo Gemilang:
Slide 9: Regional Shift of Demand
Regional Shift of Demand: Better Growth Outlook in Central Java and Sumatera Market shares based on cement domestic sales (YTD June 2018, YTD June 2019) Indonesia: 51% , -2.3% Data in Box: Utilization Rate and Growth Rates YoY per area for YTD June 2019 Kalimantan: 30.0Mt 29.4Mt 67% , -1.3% Sulawesi
Slide 10: Rainy season, election and holiday dampened H1 cement domestic demand
Rainy season combined with General Election and long school holiday dampened H1 cement domestic demand Q1 Q2 Q3 Q4 Indonesia monthly sales volume (kt) 6,453 7,188 6,533 6,777 6,419 6,471 6,101 5,696 4,884 5,658 5,205 5,337 5,622 4,821 5,149 5,186 3,729 4,795 National 3,334 Election 2019 2018 +31% 20
Slide 11: Outside Java better than Java
Outside Java better than Java Java vs. Outside Java 80,000 In thousand tons 83% - Bag Java 70,000 86% - Bag 17% - Bulk 14% - Bulk Outside Java 60,000 30,531 +6% 50,000 28,885 +2% 27,544 28,194 +2% 40,000 83% - Bag 17% - Bulk 30,000 13,246 13,049 -1% 20,000 37,464 +12% 39,010 +4% 34,451 33,446 -3% 56
Slide 12: Increasing bulk volume since 2017
Increasing bulk volume since 2017 Bag vs. Bulk Volume 80,000 72% - Java In thousand tons 73% - Java 28% - Outside Java Bag 70,000 27% - Outside Java Bulk 60,000 18,769 +11% 16,938 +14% 14,501 14,794 +2% 50,000 40,000 71% - Java 29% - Outside Java 30,000 49,412 +5% 50,772 +3% 7,797 7,721 -1% 47,494 4
Slide 13: Agenda
Agenda Current Financial Indocement Domestic Investment Outlook Update H1 Fact Sheet Market Strategy 2019 2019 Condition Slide 13 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
Slide 14: Financial Highlights
Financial Highlights Financial Attributes Net Revenues increased by +7.7% to IDR 7.0 trillion Gross Profit improved by +26.1% to IDR 2.1 trillion vs. IDR 1.7 trillion Cost of Revenues in H1 2019 increased by +1.2% due to higher sales volume of +0.7% combined with higher Cost of Revenues per to
Slide 15: More bulk sales focus of Indocement
More bulk sales focus of Indocement - as Jakarta & West Java Projects started Bag/Bulk Sales Composition 20,000 In thousand tons Bag 18,000 Bulk 16,000 4,658 +11% 4,109 -6% 4,203 +9% 14,000 +5% 3,860 12,000 10,000 8,000 -11% -3% +4% +3% 13,415 1,972 1,916 -3% 6,000 12,943 12,518 12,891 75% 74% 76% 7
Slide 16: Challenging Years, but The Worst is Left Behind
Challenging Years, but The Worst is Left Behind Relatively Stable Pricing in H1 2019 Jun ‘18 to Jun ’19 increase of +10.4% Source: average of Tiga Roda selling price surveyed across retailers in Java Our dual-brand strategy has successfully stopped a falling trend in pricing! Slide 16 - August 19, 2
Slide 17: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income H1 2019 H1 2018 Variance Description IDR Bio IDR Bio IDR Bio % EBITDA margin expansion from Total Sales Volume (thousand tons) 8,405 8,347 58 0.7% 13.5% to 16.9% attributed to: Domestic Sales Volume (thousand tons) 8,321 8,318 3 0.0% Export Sales Volume
Slide 18: Strategic cost allocation to capitalize on growth market
Strategic cost allocation to capitalize on growth market Composition of Manufacturing Cost Operating Expenses 6M17 6M18 6M19 Selling Expense G&A Expense In Bio Trend 1,202 1,143 43.9% 1,027 47.0% 22.8% +11.4% +5.1% 22.3% 326 325 355 22.7% 11.0% 20.3% 10.0% -0.3% +9.3% 23.2% 11.4% 44.4% 21.0% Raw Mat
Slide 19: Energy Cost Savings
Energy Cost Savings 2,400 More LCV and Bio IDR 71 15 Alt. Fuel 2,200 2,127 -190 2,000 1,937 276 1,800 1,600 1,400 1,200 1,000 H1 2018 Inflation Volume Impact Price Impact H1 2019 Energy cost expected to remains below prior year Slide 19 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019
Slide 20: Continue in Cost Leadership to Maintain a Decent Margin
Continue in Cost Leadership to Maintain a Decent Margin Pricing discipline and stronger demand point to sustained recovery period Strategic effort to capitalize on future growth while still managing fixed cost INTP Gross Margin Development INTP EBITDA Margin Development 43.2% 40.3% 41.4% 40.0% 33.9%
Slide 21: Quarterly Result
Quarterly Result Q3 ‘18 Q4 ‘18 Q1 ‘19 Q2 ’19 • Higher volume by +9% • IDR appreciation • Higher blended ASP as a • Despite lower volume YoY of • Higher blended ASP achieved • Declining coal price continuation from Q3 2018, -1.7%, it had surpassed the due to second tier players as second tier players
Slide 22: Vertical Integration in Ready-Mix Concrete & Aggregates
Indocement’s Strategies under Current Tight Competition: Vertical Integration in Ready-Mix Concrete & Aggregates Focused Ready-Mix Concrete business particularly high-grade quality in order to meet the increase demand of infrastructure development in Indonesia. RMC Sales Volume – ‘000 m3 AGG Sales V
Slide 23: Major ReadyMix Projects
Major ReadyMix Projects • Major projects from Commercial/Private Sectors, thereof: • PIK 2 • Indonesia One • Menara Jakarta • Rajawali Place • Kingland Avenue Depok Antasari – Toll Road Jakarta Cikampek Elevated Tanjung Jati Power Plant – Toll Road Batang Power Plant Cisumdawu – Toll Road Cirebon 2
Slide 24: Balance Sheet
Balance Sheet Jun 30, 2019 Dec 31, 2018 Variance Description IDR Bio IDR Bio Bio IDR % Current Assets 10,836.6 12,315.8 -1,479.2 -12.0% Non-Current Assets 15,016.3 15,472.8 -456.5 -3.0% Current Liabilities 3,338.8 3,925.6 -586.8 -14.9% Non-Current Liabilities 677.4 641.3 36.1 5.6% Equity 21,836.7 23
Slide 25: Agenda
Agenda Current Financial Indocement Domestic Investment Outlook Update Q1 Fact Sheet Market Strategy 2019 2019 Condition Slide 25 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
Slide 26: Vision 2020 – To be the prominent cement producer in Indonesia
Vision 2020 – To be the prominent cement producer in Indonesia Highest operating margin in the industry Turn around in selling price Cost leadership Highest customer satisfaction & increase market share “Sales is a Science” program to increase our sales and create customer value “Custome
Slide 27: Growth drivers
Clear drivers of future growth Strong volume momentum and outlook Unique market position of Growth Improving supply – Indocement drivers demand dynamics Pricing stabilized and improving Slide 27 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
Slide 28: Controlling Dust Emission
Controlling Dust Emission Replace Kiln Electrostatic Precipitators (EP) to Bag House to reduce dust emission Target of dust emission by installing bag house <10 mg/Nm³ (Government regulation <65-75 mg/Nm³) Total capex spending 2017 – 2019 for Bag House: IDR 280.2 bio Filter Bag Installation
Slide 29: Cost Efficiency Measure
Cost Efficiency Measure Increasing Usage of Alternative Fuel 100% 2.3 98% 3.4 3.2 5.8 96% 7.5 94% 8% LCV 92% 97.7 90% 96.6 96.8 66% LCV 94.2 88% 92.5 86% 84% 2015 2016 2017 2018 Q2 2019 Fossil Fuels Alternative Fuels • Focus on reducing coal as primary source of fuel source • Clear strategy on cost
Slide 30: Agenda
Agenda Current Financial Indocement Domestic Investment Outlook Update Q1 Fact Sheet Market Strategy 2019 2019 Condition Slide 30 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
Slide 31: Outlook of Indonesian Cement Market
Outlook of Indonesian Cement Market National cement consumption growth started to turn positive and grew by 5% in 2018 (vs. 7.6% in 2017) however for H1 2019 vs. same period last year it took downturn of -2.3%. By YTD July 2019, it continued to show recovery but still showed negative of growth of -1
Slide 32: Thank You
THANK YOU Better shelter for better life… Slide 32 - August 19, 2019 PT Indocement Tunggal Prakarsa Tbk – H1 2019 Financial Results
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