PT MALINDO FEEDMILL TBK 2Q 2019 RESULT PRESENTATION 1 COMPANY - - PowerPoint PPT Presentation

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2Q 2019 RESULT PRESENTATION

PT MALINDO FEEDMILL TBK

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COMPANY OVERVIEW GUIDANCE FOR FY2019 2Q/2019 HIGHLIGHTS INVESTMENT HIGHLIGHTS

Aug 5th, 2019

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COMPANY OVERVIEW

Aug 5th, 2019

UPSTREAM MIDSTREAM DOWNSTREAM

FEED BREEDING COMMERCIAL FARMING FOOD PROCESSING

Vertically integrated business

Attractive, fast growing industry Top 3 integrated player Secured growth plan Upside from Processed food (CBP) segment

Highly experienced management with strong governance Productive age employees

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KEY INVESTMENT HIGHLIGHTS

Aug 5th, 2019

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Chicken consumption in Indonesia keeps growing and forecasted to be even stronger in 2023 Indonesia’s middle class is growing, adding 80million people in the middle class by 2020 Chicken is the most affordable animal protein after eggs Indonesia has one of the lowest chicken consumption in SE Asia

Source: Badan Pusat Statistik (2018) and Indonesia Finance Ministry (2019) , Indonesia State Budget, FAOStats, BPS, IMF, USDA, World Bank, Kompas daily, LEK Consulting, McKinsey, OECD, Company

Protein source Price/kg (IDR) Protein content Protein Price/g (IDR) Egg 23,500 12.5% 188 Chicken (broiler) 35,000 18.5% 189 Fresh milk 25,000 3.5% 714 Beef 190,000 20.0% 950 Fish 167,500 17.5% 957

47.0 46.0 16.0 9.0 10.5 13.6 2.0 38.8 10.6 5.8 2.5 3.6 1.5 0.8 Brunei Malaysia Thailand Philipines INDONESIA Vietnam Cambodia Chicken consumption per capita (kg/ year) Income per capita (USD1,000)

Investment highlight #1: Attractive, fast growing industry

217,500 242,500 264,000 265,000 271,000 15,225 45,000 58,080 60,000 80,000 2002 2010 2017 2018 2020 Indonesia total population Middle class population

('000 people)

Aug 5th, 2019

2,141 2,382 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Historical Trajectory (‘000 tons)

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Indonesia feed production capacity share (2018) Indonesia DOC production capacity share (2018)

Source: Company (2018)

35% 25% 8% 4% 8% 20% CPIN JPFA MAIN NEW HOPE CJ Others 38% 25% 7% 5% 25% CPIN JPFA MAIN NEW HOPE Others

Investment highlight #2: Top 3 integrated player and well-positioned in the market supported by strategic locations

Aug 5th, 2019

Legends Division 2019 Annual Capacity Locations Feedmill 1,500,000 MT Cakung, Cikande, Gresik, Semarang, Makassar, Lampung GPS Breeding 3.2 mn DOCs Majalengka PS Breeding 258 mn DOCs Medan, Lampung, Subang, Cikaum, Purwakarta, Wonosari, Probolinggo, Lumajang, Pontianak, Banjarmasin, Makassar, Pekanbaru, Palembang, Rembang, Broiler 77.5 mn kg Medan, Subang, Bogor Food Processing 9,000 MT Cikarang

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Broiler capacity (MT) Feed capacity (MT)

79 57

Capex (IDR bn)

64 262 23

CAGR 23,3%

116

Investment highlight #3: Growth plan with sufficient cashflow to fund capex

Projected Capex of IDR 455 bn in 2019 will enable Malindo to capture the increasing demand

• Maximize the production utilization is

expected to improve EBIT margin through economies of scale (target utilization in FY2019 : 75%-80% of optimal capacity)

• Expanding capacity to 77,500 tons in

FY2019 to support the growth in processed food & chicken consumption

DOC capacity (Mn birds)

167 77 244

CAGR 2,3%

• Expanding production capacity with a

target of 270 Mio chicks in FY2019

• Malindo

expects to add 7%

• 10%

production volume per annum to support projected market recovery. Aug 5th, 2019

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Consumer Foods capacity (MT)

Capex (IDR bn)

5 2

Investment highlight #4: Upside from Processed food (CBP) segment

Aug 5th, 2019

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Investment highlight #4: Upside from Processed food (CBP) segment

DISTRIBUTION MAP CUSTOMER AND OUTLET GROWTH

Reputation as high quality producer, solid track record with diverse customer base

Aug 5th, 2019

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Investment highlight #5: Highly experienced management with strong governance

Lau Chia Nguang Tan Lai Kai Yongkie Handaya Brian M. O ’Connor Koh Bock Swi (Raymond Koh)

President Commissioner Commissioner* Independent Commissioner* Independent Commissioner* Independent Commissioner*

Year of Poultry experience: More than 40 years Year of Manufacture experience: More than 25 years Year of Finance experience: More than 20 years Year of Finance experience: More than 40 years Year of Poultry experience: More than 25 years *): Professional Aug 5th, 2019 Tan Sri Lau Tuang Nguang Mazlan Bin A. Talib Rewin Hanrahan Lau Joo Hwa Lau Joo Keat Rudy Hartono Husin Dato’ Seri Abdul Azim Bin Mohd Zabidi

President Director Director* Director* Director Director Director* Director*

Year of Poultry experience: More than 30 years Year of Agriculture experience: More than 30 years Year of Poultry experience: More than 25 years Year of Poultry experience: More than 15 years Year of Poultry experience: More than 15 years Year of Finance experience: More than 20 years Year of Finance experience: More than 20 years

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Investment highlight #5: Highly experienced management with strong governance

*): Professional Aug 5th, 2019 Aldrin Rungkat

Feedmill Director*

Tan Sri Lau Tuang Nguang

President Director

Lau Joo Hwa

Operation Director

Lau Joo Keat

Breeder Farming Director

Rudy Hartono Husin

Finance Director*

Rewin Hanrahan

Marketing Director*

Hilda Wibowo

HR Director*

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Investment highlight #6: Productive age employees

Aug 5th, 2019

40% 37% 23%

Company's employee category by age

20 - 29 years 30 - 39 years > 40 years

DOC & Broiler Average Selling Price Government initiatives ensuring stable DOC & chicken prices and supply-demand dynamics

Q2/2019

Consumer demand projected to improve with strong support by macro conditions GDP growth: 2020 5.3 – 5.6% (2019 c. 5.3%) Feed margins to benefit from volume growth, particularly expanding to swine feed and duck feed Consumer food volume continues increasing by boosting the sales through social media

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2Q/2019 HIGHLIGHTS

Aug 5th, 2019

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EBITDA REVENUE

FINANCIAL PERFORMANCE

NET PROFIT EBIT MARGIN

Aug 5th, 2019

88,112,772 54,585,386 155,263,582 145,914,772 Q2/2018 Q2/2019 1H18 1H19

2Q (Y-Y) 1H (Y-Y) 38% 6%

1,598,789,197 1,927,343,881 3,072,632,302 3,872,160,644 Q2/2018 Q2/2019 1H18 1H19

2Q (Y-Y) 1H (Y-Y) 21% 26%

196,318,023 187,169,875 365,452,721 393,900,130 12.3% 9.7% 11.9% 10.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 Q2/2018 Q2/2019 1H18 1H19 EBITDA EBITDA (%) 8.6% 6.2% 8.1% 6.9% Q2/2018 Q2/2019 1H18 1H19

2Q (Y-Y) 1H (Y-Y) 5% 8%

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CAPEX TOTAL ASSETS

FINANCIAL PERFORMANCE

NET DEBT/ EQUITY TOTAL INTEREST BEARING DEBT

Aug 5th, 2019

107,225,327 81,851,638 160,409,439 144,801,703 Q2/2018 Q2/2019 1H18 1H19

2Q (Y-Y) 24% 1H(Y-Y) 10% 2Q (Y-Y) 12%

4,098,695,092 4,599,675,653 Q2/2018 Q2/2019

2Q (Y-Y) 9% 2Q (Y-Y) 2%

0.85 0.87 Q2/2018 Q2/2019 1,697,803,047 1,855,740,976 Q2/2018 Q2/2019

FOOD BROILER

15

14%

SALES 2Q (Y-Y)

34 %

BREEDER

SEGMENT PERFORMANCE

Aug 5th, 2019

FEEDMILL

36 %

SALES 1H (Y-Y) SALES 2Q (Y-Y)

28%

SALES 1H (Y-Y)

320.4 366.4 608.0 780.3 53.0 16.3 83.6 95.2 16.5% 4.5% 13.7% 12.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 Q2/2018 Q2/2019 1H18 1H19 342.3 314.8 608.2 598.3 35.0 (16.9) 53.7 (36.7) 10.2%

• 5.4%

8.8%

• 6.1%
• 8.0%
• 6.0%
• 4.0%
• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% (40.0) 60.0 160.0 260.0 360.0 460.0 560.0 660.0 Q2/2018 Q2/2019 1H18 1H19

SALES 2Q (Y-Y)

8 % 2 %

SALES 1H (Y-Y)

34.6 39.9 70.3 72.4 (17.5) (10.4) (25.2) (18.1)

• 50.6%
• 26.1%
• 35.8%
• 25.0%
• 60.00%
• 50.00%
• 40.00%
• 30.00%
• 20.00%
• 10.00%

0.00% (60.0) (40.0) (20.0)

• 20.0

40.0 60.0 80.0 Q2/2018 Q2/2019 1H18 1H19

SALES 2Q (Y-Y)

15 % 3 %

SALES 1H (Y-Y)

901.5 1,206.1 1,786.1 2,421.1 66.4 128.1 136.7 233.6 7.4% 10.6% 7.7% 9.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 500 1000 1500 2000 2500 3000 Q2/2018 Q2/2019 1H18 1H19

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GUIDANCE FOR FY2019

Aug 5th, 2019

EBITDA REVENUE NET PROFIT EBIT

760 920-950 11.3% 12-13% 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50%

• 200

400 600 800 1,000 2018 2019 EBITDA EBITDA Margin 6,706 7,100 – 7,300 2018 2019 284 300-330 2018 2019 (IDR million) (IDR million) (IDR million) 531 650-700 8% 8-10% 7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 100 200 300 400 500 600 700 800 2018 2019 EBIT EBIT MARGIN (IDR million)

THANK YOU

www.malindofeedmill.com Sunny Gold @sunnygoldid @sunnygoldid