PT Toba Bara Sejahtra Tbk ( “ Toba ” ) PT Toba Bara Sejahtra Tbk (TOBA) Company Presentation Company Presentation April 2017 1 September 2017
Disclaimer These materials have been prepared by PT Toba Bara Sejahtra Tbk (the “Company”) . 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 of an offer, solicitation or invitation of any offer to buy or subscribe for any securities of 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. 2
Table of Contents 1 Company Profile 2 Performance Highlights 3 Strategy to Venture into Power i Sulbagut-1 Project ii Sulut-3 Project 3
Performance Highlights Performance Highlights 2 Company Profile 1 4
PT Toba Bara Sejahtra Tbk in Brief Coal Mining Palm Oil Plantation & Mill East Kalimantan Kalimanta n Location: Kutai Kartanegara, Kalimantan Timur Hak Guna Usaha (HGU) covers 8.633 ha. where 2.701 ha has been planted Location: Kutai Kartanegara, Kalimantan Timur Power Generation Total Concession: 7.087 ha Gorontalo GLP and MCL established in February 2016 and North Sulawesi March 2017 respectively for development of steam (coal) fired power plant project (CFPP) with capacity of 2x50 MW each 25 year Power Purchase Agreement (PPA) through Independent Power Producer (IPP) scheme with PLN as single offtaker 5
Ownership Structure Highland Strategic Davit Togar PT Bara Makmur PT Sinergi Sukses PT Toba Sejahtra Roby Budi Prakoso Public *) Holdings Pte. Ltd. Pandjaitan Abadi Utama 61.91% 10.00% 0.75% 6.25% 5.10% 3.64% 12.35% *) Incl. Baring Private Equity as anchor investor 99.60% 99.99% PT Toba Bumi Energi ( “ TBE ” ) 90.00% 60.00% 90.00% 99.99% 51.00% 99.99% GLP’s PPA with PLN (1) 20-year Production IUP-OP extension was 13-year IUP-OP expires Plantation permit of PT MCL’s PPA with PLN (1 Operation Mining Permit completed in March in December 2023 Perkebunan Kaltim for 25- year contract for 25- year contract (IUP-OP) expiring in 2013 (First out of 2 Utama I (PKU) expires License December 2029 extensions: in 2023. in 2036 with tenor of 10 years IUP-P for downstream each) processing 2.990 ha 683 ha 3.414 ha ~60 ha ~30 - 40 ha 8.633 ha (Right to Use Area Land) Reserves: 117 MT - JORC Reserve: 22 MT - JORC Reserves : 8 MT - JORC Planted Area: 2.701 Off-take (take or pay) Off-take (take or pay) Reserve ha by PLN for 25 years by PLN for 25 years Resources: 156 MT - JORC Resources: 37 MT - JORC Resources: 43 MT - JORC Note: 1. PLN: PT Perusahaan Listrik Negara (Persero) 6
Strategic Mine Locations TMU – IM Major Jetty Transhipment Hauling Road Muara Berau City Point Major city to north Samarinda is less than 50 km Distance from pit to jetty. with closest one ~55 km ~5 km and furthest (total ~120 km) ~25 km IM ~5 km ABN 25 km IM jetty Close proximity to TMU Makassar Strait ABN jetty jetty and transhipment point of Muara Jawa Adjacent locations for all 3 mines Balikpapan ~65 km Muara Jawa Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties) giving significant operating leverage vs other concessions in surrounding areas 7
Infrastructure & Operational Capabilities CPP Capacity : 6 Mn Short Coal Hauling Conveyor to Jetty Tons/Annum (TPA) Distance < 5km Short Coal Hauling Distance ~4km High Built CPP Cap up to 10 Mn TPA Hauling Road to Connect with ABN Overland & Barge Loading Jetty: Speed TOBA ’s Concessions of 1.800 TPH Note : PT Adimitra Baratama Nusantara (ABN) PT Indomining (IM) PT Trisensa Mineral Utama (TMU) ROM Stockpile 8
Material Information Contracts and Awards Earned in 9M17 PPA signing with Engineering Procurement Contract Financing Date with PLN for Sulut-3 (EPC) signing with SEPC* for PLN for Sulbagut-1 Power Project Sulbagut-1 Power Project Power Project 7 April 2 May 7 July 11 July 14 July Special Transaction Loan Facility Project Financing Signing with and Non-Cash Loan of US$ 50 Bank Mandiri worth US$ 171.8 mn mn with Bank Mandiri for Sulbagut-1 Power Project * Shanghai Electric Power Construction Co. Ltd. ABN received Award from Customs ABN received Gold PROPER Office of East Kalimantan as “Ideal” Enviromental Award from Provincial Company Govt for 3 consecutive years TMU received Pratama Award from IM and TMU received Green PROPER Ministry of Energy. Mines. & Enviromental Award for 2 consecutive Resoucres (MEMR) years IM received certificates for ISO 14001. OHSAS 18001 and ISO 9001 9
Performance Highlights 2 10
Production Profile Amidst coal price volatility over the past several years and to sustain the Company’s survival mode, Toba has undergone cost efficiency initiatives as shown by stable EBITDA margin EBITDA Margin Toba Consolidated NEWC Price 32.9% 30.1% Stable 15.4% 15.2% 13.9% 13.5% 10 140 margin 5.7% 9 8.1 Mt 120 8 $99 $97 $121 100 6.5 Mt 7 6.1 Mt 5.0-6.0 Mt 5.6 Mt 5.5 Mt 6 $71 5.2 Mt 80 5 $85 $65-70 4.1 Mt 60 4 $66 $59 3 40 2 20 1 0 0 2010 2011 2012 2013 2014 2015 2016 2017 est. 11 Source: Coal price from GlobalCoal
Operational Performance Quarterly Production & SR Production in Thousand Tons 13.7x 14.3x 12.6x 12.8x Q-o-q production volume has 12.6x 12.0x - 13.0x remained stable and in line with 1.25 - 1.50 2017 quarterly guidance of 1.25 - 1.4 1.4 1.4 1.50 mn tons 1.2 1.1 3Q17 SR stabilized at 12.6x, on track of achieving annual SR guidance of 12x - 13x 3Q16 4Q16 1Q17 2Q17 3Q17 Quarterly Higher SR in 2Q17 impacted by wet Guidance weather TMU IM ABN SR (Consolidated) Production Summary Production Summary MT: Million Ton MT: Million Tons 3Q16 3Q17 Change Comment Production (0.0)% 1.4 1.4 Production volume in 3Q17 was still in line with target Volume Sales Volume 1.3 9.8% 1.2 Sales volume tracked its 3Q17 production volume SR (x) 12.8 12.6 (1.4)% SR in 3Q17 was still in line with target 12
Realization Consolidated 9M 2017 “Sustainability & Resilience” Δ % Operational 9M16 9M17 US$/ton NEWC Index 56.4 85.2 51.1 % Focused on profitable production output ASP US$/ton 44.8 59.2 32.1 % Production Vol 3.7 (11.9)% through optimization of : mn ton 4.2 Sales Vol mn ton 4.3 3.5 (18.6)% • Infrastructure and connectivity sharing Stripping Ratio 13.5 3.8 % 13.0 x (hauling road and coal processing plant) • Joint mine plan Δ % Financial 9M16 9M17 • Coal sale pricing driven by relationship. US$ mn 211.3 192.1 Sales 10.0 % 27.0 51.9 92.2 % consistency in scheduled delivery and EBITDA US$ mn 9.7 29.0 Net Profit 199.0 % product quality US$ mn 6.3 133.3 % 14.7 EBITDA/Ton US$/ton • Well-diversified market destinations and customer base Financial Ratios 9M16 9M17 29.9% 19.2% Gross Profit Margin EBITDA Margin 14.1% 24.6% Note: 13 (1) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
Evolution of FOB Cash Cost Quarterly FOB Cash Cost In US$/ton 120 15x 14.3x 13.8x 13.8x 13.7x 12.8x 12.6x 12.6x 12.5x 12.5x 12.4x 12.5x 12.1x 12.0x 100 12x 81.5 94.5 79.7 94.7 80 68.4 67.3 65.8 9x 63.8 59.6 59.0 52.6 60 51.5 50.3 6x 51 50 40 46 42 42 41 41 38 37 35 35 34 34 3x 20 51 50 47 43 41 38 35 35 35 34 37 40 41 0 0x 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 FOB cash cost Adj. FOB cash cost NEWC SR Despite fluctuation in NEWC price, TOBA has maintained relatively stable SR and cash cost through proper mine planning and cost management initiatives Although cash cost rose 17.1% from 2Q16 to 3Q17, coal price increased much higher by 83.3% over same period. This reflects much higher ASP expansion than cash cost rise itself Notes: (1) FOB Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization (2) Adj. FOB cash costs = COGS. including selling & marketing expense and royalty – depreciation & amortization of exploration & development and excluding 14 deferred stripping cost
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