9M17 MPM Company Highlights and Financial Results (Ticker: MPMX) - - PowerPoint PPT Presentation

9M17

MPM Company Highlights and Financial Results (Ticker: MPMX) November 2017

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MPM: FROM “PIPELINE” TO “PLATFORM” BUSINESS

OUR CREDO Progressive Thinking Active Ownership Collaboration OUR VISION

To positively impact lives through smart mobility and social integration

OUR MISSION To create ecosystems of the best ideas (game changing innovation) delivered through the most relevant products and services (understanding people better) in the most effective ways (optimized business models & cross selling), by the most talented people (high performance culture) in our industry

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TABLE OF CONTENT

01 MPM: Company Highlights 02 Consolidated Financial Results: 9M17 Updates 03 Business Segment Performance

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MPM IN A SNAPSHOT: LEADING SMART MOBILITY COMPANY IN INDONESIA

• Est. in 1987 by W. Soeryadjaya as

2W distribution business for Honda

• Expertise and leading market

positions in consumer automotive (2W & 4W) supply chain and value chain

• Recognized by industry as 2017

Top 50 Best Company in Indonesia (Forbes) and other various awards

Market expertise With 30 year of experience

• BOC & BOD has over 100 years of

management and governance with industry experts, independent commissioners, and professionals in place

• Listed in IDX (Ticker: MPMX) in

2013, raising Rp 1.5T from public (22% enlarged TSO)

• Total Equity @ Rp 5.0T with cash

balance @ Rp 1.7T (September 17)*

Strong Corporate Governance & Financials

• 4 main business segments, each with

growth potential

• Network and presence across

archipelago serving 10MM+ individual customers, 1,000+ corporate clients, and 10,000+ 3rd party channels

• 8,000+ employees with high

performance culture

Significant Growth Potentials

Resource: MPMX, as of 30 September 2017 *Figures are post MPMF deconsolidation

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MPM BUSINESS: COLLECTIVE POWER

Rp 17.7T

FY16 Revenue

77% 10% 6% 7%

Distribution & Retail

• 2W Honda distribution in E. Java + NTT

with 288 dealer relationships, serving ~4.6MM active customers

• 2W Honda 3S dealerships with 40
• utlets across Indonesia
• 4W Nissan & Datsun 3S dealerships

with 5 outlets across Indonesia

Consumer Parts

• 2W & 4W engine lubricant principal &

parts distribution company

• 3,300+ Federal Oil Centers & 10,000+ 3rd

party workshops nationwide, serving 10MM+ customers per year

Auto Services

• Independent 4W rental/lease company

with 13K+ fleet, serving 1,000+ corporates

• Fleet & logistic management services

Financial Services*

• Independent 2W, 4W, lease financing

business with 86 outlets nationwide, serving 130K+ customers

• Non-life general insurance including

2W, 4W, cargo, & property with 26

• ffices & 6 service points nationwide

Resource: MPMX, as of 30 Sep 2017 * MPMFinance was deconsolidated from MPM since May 2017

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GOVERNANCE AND MANAGEMENT

48.6% 15.3% 6.8% 29.3%

PT Saratoga Investama Sedaya Tbk Morninglight Investment S.a.r.l Claris Investment Pte. Ltd. Public & Others

Board of Commissioners

Strong mix of operational, strategy, M&A, and governance expertise

Board of Directors

Over 100 years of combined professional experience Rudy Halim

Group CEO

Troy Parwata

Group CFO

Agung Kusumo

Managing Director

Titien Supeno

HR Director

Andi Esfandiari

Director

Edwin Soeryadjaya

Chairman

Tossin Himawan

Commissioner

Danny Walla

Commissioner

Lee Chul Joo

Commissioner

Istama Siddharta

Independent Commissioner

Simon Halim

Independent Commissioner

Shareholding

Resource: MPMX, as of 30 Sep 2017

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MPM GROUP NETWORK: PRESENCE ACROSS INDONESIA

Resource: MPMX, as of 30 Sep 2017

26 MPMInsurance Offices & Outlets 48 FKT Distributors for Federal Oil & Federal Mobil 35 MPMRent Offices & Service Points 5 MPMAuto Dealers 86 MPMFinance Offices & Outlets 40 MPMotor Retail Outlets 288 MPMulia Dealers

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TABLE OF CONTENT

01 MPM: Company Highlights 02 Consolidated Financial Results: 9M17 Updates 03 Business Segment Performance

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9M17 REVENUES: SEGMENT CONTRIBUTION & MOVEMENT

Revenues 9M17

Rp 11.9T

4.3% QoQ, -3.8% YoY 80% 11% 8% 1%

• 6%
• 2%

+21% +45%

• 4%

(637) (25) 173 43 (20) %YoY 9M16 9M17 11,919B 12,384B

YoY revenue growth

Distribution & Retail Consumer Parts Auto Services *Financial Services Elimination

Revenues Growth % YOY, in Rp billion

Summary

 Total Revenue though slightly down on a YoY basis, performed resiliently against weak consumer purchasing power in 2017.  Strong growth from Auto Services and Financial Services.  2W Sales improved on a quarterly basis, though still slightly down on a YoY basis.  Lubricant Sales followed similar trend of improving revenue on a quarterly basis but slightly down on a YoY basis.

* MPMInsurance only

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%YOY

• 1%
• 15%

+70% +54% +25% (2) (34) 12 16 33 290B 9M16 9M17 363B 69 +567% +50%

YoY NPATMI growth

9M17 NPATMI: SEGMENT CONTRIBUTION & MOVEMENT

*8% 10% 41% 41%

0% 10% 20% 30% 40% 50%

Financial Services Auto Services Consumer Parts Distribution & Retail

NPATMI 9M17

Rp 363B -79.4% QoQ, 25.4% YoY

Distribution & Retail Consumer Parts Auto Services **Financial Services Discontinued Operation Head Office

NPATMI Growth % YOY, in Rp billion

Summary

 NPATMI grew 25% YoY driven by combination of improvement in operational efficiency and one-off gain in MPMF divestment.  Higher operational efficiency contributed to the significant increase in profitability for Auto Services.  Improved asset quality and strong business growth drove the solid profitability in Financial Services.  Despite lower revenue, the profitability of 2W business managed to grow due to significant OPEX savings.

• 143%

(21) Minority Interest

*Includes Discontinued Operation (MPMFinance) 7% and MPMInsurance 1% ** Includes MPMInsurance only

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9M17 Financial Highlights

Summary

 Gross margin, EBITDA margin and Net margin all increased compared to the same period last year.  CAPEX spending continues to come down, in line with the key focus of 2017.  Strong balance sheet with healthy leverage ratios.  ROE and ROA ratio have improved significantly.

* Annualized figure

Net Debt/EBITDA* Net Debt/Equity ROE* ROA* FCCR 9M17 0.8x 0.2x 10.1% 5.0% 3.8x 9M16 4.2x 0.9x 6.9% 2.7% 3.7x Key Ratios P&L Highlights Net Revenues Gross Profit NPATMI EBITDA CAPEX 9M17 11,919 1,368 363 1,095 423 QoQ% 4.3% 1.6%

• 79.4%
• 23.5%

31.7% YoY%

• 3.8%
• 0.1%

25.4% 17.2%

• 31.0%

%Rev N/A 11.5% 3.0% 9.2% 3.6%

(In Rp Billion)

Cash and Cash Equiv. Total Asset Bank Funding BV of Equity 9M17 1,719 10,176 2,921 5,036 QoQ% 30.8% 4.4% 803.0%

• 1.2%

YoY% 31.1%

• 30.4%
• 20.3%
• 12.8%

B/S Highlights

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KEY FOCUS 2017: (1) COST LEADERSHIP

Financial Highlights (in Rp billion) Summary

 Major OPEX items: C&B, A&P, T&S, have decreased YoY in line with the key focus of 2017.  Continue monitoring Revenue per Headcount as part of productivity benchmark.  Average COF excluding early refinancing costs of Bonds (non-recurring), continues downward trend. Total Opex

• Compensation & Benefit
• Advertising & Promotion
• Transportation & Storage
• Provision

Revenue/HC Average COF 9M17 819 324 155 60 19 4.2 8.5% QoQ% 1.0% 0.5% 9.1%

• 0.8%
• 5.6%

YoY%

• 0.4%
• 2.3%
• 11.4%
• 9.8%

85.6% %Rev 6.9% 2.7% 1.3% 0.5% 0.2%

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KEY FOCUS 2017: (2) OPERATING CASH FLOW

Summary

 Keep up the momentum of producing positive and growing cash flow.  CF from Investing grow significantly due to the proceeds from MPMF divestment.  Continue to monitor Cash Conversion Cycle.

9M17 Cash Flow (in Rp billion)

Balance as of December 31st Operating Activities Investing Activities Financing Activities Balance as of September 30th

* Net off with the Beginning balance of Disc. Operation.

• Beg. Balance of Disc. Op.
• Adj. Beg. Balance*

CF from Operating CF from Investing CF from Financing Ending Balance 9M17 (83) 1,202 822 365 (671) 1,719 YoY%

• 11.8%

206.4%

• 18.6%

31.1%

9M17 9M16

1,484 735 (344) (566) 1,311 1,202 822 365 (671) 1,719

AR Days AP Days Inventory Days 9M17 16.8 27.7 16.0 YoY%

• 0.8%
• 0.8%

6.4% Operational Highlights 9M16 16.9 27.9 15.0

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KEY FOCUS 2017: (3) COLLABORATIVE ECONOMY & NEW GROWTH

Collaborative Economy- ACE Performance

 Improving cross-selling and up-selling between

• perating companies, aligned with the Accelerated

Collaborative Economy initiatives.

New Growth-MPM Planet-The Power of Network Effects

 Rally Point App is the “window” to our MPM planet.  Stretch Dollar is key to the value proposition of MPM planet.  New business-online 4W multi-brand platform launched in August.

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Bidbox: 4W Online Multi-brand Platform

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RECENT KEY EVENTS: Aug – Oct 2017

MPMInsurance awarded 1st for Best Financial Performance General Insurance Company with Rp 400-600B asset by Warta Ekonomi

Aug’17 Sep’17

MPM Group awarded Most Powerful Companies 2017, Category: Wholesale, Sector: Trade, Services & Investment by Warta Ekonomi

Oct’17

MPMulia is ranked 1st in Astra Honda Technical Skill Contest 2017, category Service Advisor

Oct’17

FKT received 2 Indonesia Best Brand Award 2017 for The Most Valuable Brand in Indonesia category Motorcycle Lubricant and Matic Motorcycle Lubricant MPM Group is listed on Forbes Indonesia “50 Best

• f the Best Companies

2017” for consecutive years

Oct’17

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TABLE OF CONTENT

01 MPM: Company Highlights 02 Consolidated Financial Results: 9M17 Updates 03 Business Segment Performance

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9M16 9M17 Sales Volume (Unit in thousands, YoY%) 902 912 864 FY15 FY16 TTM

• 5%

Revenue (in Billions of Rupiah, YoY%) +1% 261 338 339 FY15 FY16 TTM +30% Mulia 129 132 133 FY15 FY16 TTM +2% MSO FY15 FY16 TTM 14,459 14,119 +7% 13,544 +1%

• 2%

+1% NPAT (in Billions of Rupiah, YoY%)

2W DISTRIBUTION & RETAIL :

CONTINUE LEADERSHIP IN E. JAVA AND NTT

9M16 9M17 9M16 9M17 9M16 9M17 677 629 96 98 10,394 10,734

• 7%

+2%

• 3%

+1% 241 240 Mulia + MSO Mulia + MSO 9M17 Highlights

• Lower sales volume was driven by weak consumer purchasing

power due to poor harvest as a result of unfavorable weather in the region.

• NPAT increased slightly due to OPEX savings from operational

efficiencies.

• In addition, market share continues to increase in the region.

Key Initiatives

• Launch of 6 new models and revamped 11 models during 2017.
• Increase in promotional activities to consumer, dealers and

financing companies.

• Additional warehouse to lower rental costs and optimize

distribution network.

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• 85
• 102
• 91

4W DEALERSHIP :

IMPROVE SALES PRODUCTIVITY & SERVICE LEVEL

Sales Volume (Units, YoY%) FY15 FY16 TTM

• 57%

+29%

• 19%

260

• 5%

9,823 NPAT (in Billions of Rupiah, YoY%) Revenue (in Billions of Rupiah, YoY%) FY15 FY16 TTM FY15 FY16 TTM 773 435 +20% 643

• 44%

9M16 9M17 9M16 9M17 642

• 72
• 61

9M16 9M17 4,093 1,401 304

• 66%
• 53%

3,680 4,755 2,063 48

• 16*
• 16*

*One-off loss from sale of fixed asset.

9M17 Highlights

• Sales Volume and Revenue decline due to lack of new products

from Nissan and Datsun and lower number of dealerships due to scaling down of operations.

• NPAT affected by one-off impairment due to sale of Pluit

dealership. Key Initiatives

• Focus on operational efficiency and sales productivity as well

as after-sales service quality to the customers.

• New multi-brand 4W initiative via Bidbox.
• 7%

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9M16 9M17

• 3%

CONSUMER PARTS:

STRENGTHEN CHANNEL & NEW PRODUCT DEVELOPMENT

Sales Volume (Units in thousands of liters, YoY%) FY15 FY16 TTM +7% 260 9,823 NPAT (in Billions of Rupiah, YoY%) Revenue (in Billions of Rupiah, YoY%)

• 5%

FY15 FY16 TTM 1,675 1,632 1,582

• 3%

59,200 63,341 60,298

• 10%

9M16 9M17

• 6%

44,938

• 10%

48 253 +6% 47,981 1,262 1,219 272 244 TTM FY16 FY15 9M16 9M17

• 12%

230 202 9M17 Highlights

• Lower sales volume is mainly due to slow market condition.
• NPAT is lower as compared to last year due to higher
• utsourcing fees.
• Market share continues to grow for 2W lubricants.

Key Initiatives

• New Cilegon Plant commenced in August 2017
• Blending capacity increased to 100 million litres per annum.
• Lower workforce requirements with automation.
• Federal Mobil (4W)
• Focus on market growth outside of Jakarta and Surabaya.
• Improve B2B channels.

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+103% 1 13

• 33

AUTO SERVICES:

MAINTAIN OPERATIONAL EXCELLENCE & CASH FLOW

Fleet Size (Units, YoY%) FY15 FY16 TTM +1% 260 NPAT (in Billions of Rupiah, YoY%) Revenue (in Billions of Rupiah, YoY%)

• 7%

FY15 FY16 TTM 1,091 1,072 1,123 1,264

• 3%

+16% 13,935 14,137 13,154 +1,200% 9M16 9M17

• 8%

9M16 9M17 +21% 818 16 28 9M16 9M17

+79%

14,299 13,154 TTM FY16 FY15 991 9M17 Highlights

• Revenue increased due to higher disposal value of used cars.
• Strong NPAT growth driven by OPEX effiencies and finance cost

savings. Key Initiatives

• Continuous improvement on operational efficiency and

utilization of the fleet.

• Improve the portfolio of corporate clients, including new
• fferings to customers.

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31 41 59 FY15 FY16 TTM FY15 FY16 TTM 385 458 259 41 42

MPMINSURANCE:

INCREASE PENETRATION GROUP & NON-GROUP BUSINESSES

Gross Premium (in Billions of Rupiah, YoY%) +49% 31 9,823 NPAT (in Billions of Rupiah, YoY%) +19% +32% +44% 27 5 34 8 9M16 9M17 28 46 9M16 9M17 +62% +27% 9M17 Highlights

• Gross premium grew steadily driven by increase in new

policies especially for the MV and Fire segment.

• NPAT increase was primarily due to higher underwriting and

investment income. Key Initiatives

• Increase market penetration in MPM Group business as

well as non-affiliated businesses.

• Plans to increase network penetration via opening up new

branches (Pontianak and Lampung).

• Working together closely with strategic brokers both online

and offline to grow portfolio and acquire new clients.

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9M17 Highlights 1,185 1,265 1,164 +2% +7%

MPMFINANCE:

SELECTIVE GROWTH WHILE MAINTAINING FOCUS ON ASSET QUALITY

• Asset quality improved YoY basis as reflected by NPL level.
• New Booking growth was driven by new 2W, 4W financing and

Finance lease businesses.

• Increased NPAT was due to higher gross profit, OPEX

efficiencies and improved asset quality. Key Initiatives

• Constantly looking for the most competitive funding in order to

support the growth of new bookings.

• Work together with various 4W brands to increase channel and

leads to grow the business. New Booking (in Billions of Rupiah, YoY%)

FY15 FY16 TTM

+37% 9,823 NPAT (in Billions of Rupiah, YoY%) Revenue (in Billions of Rupiah, YoY%) +23% 2,934 4,015 4,944 9M16 9M17 +33% 3,765 9M16 9M17 906 82 140 27 +198% +71% 7 65 9M16 9M17 +789% 2,836 +10% 826 TTM FY16 FY15 TTM FY16 FY15 3.2% 3.2% 2.7% 2.3% 2.6% 2.8% Jun'16 Sept'16 Dec'16 Mar'17 Jun'17 Sept'17

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DISCLAIMER

• These materials have been prepared by PT Mitra Pinasthika Mustika Tbk (the

“Company”, “MPM”) and have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials. The Company or any of its affiliates, advisers or representatives accepts no liability whatsoever for any loss howsoever arising from any information presented or contained in these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed.

• These materials may contain statements that constitute forward-looking
• statements. These statements include descriptions regarding the intent, belief or

current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances.

• These materials are for information purposes only and do not constitute or form part
• f an offer, solicitation or invitation of any offer to buy or subscribe for any securities
• f the Company, in any jurisdiction, nor should it or any part of it form the basis of, or

be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate professional advice.