Equity Research Innitiation report

Tuesday,14 March 2017 HOLD Mayora Indah (MYOR IJ) Initiate Rich valuation, enticing outlook

Last price (IDR) 2,130 We expect Mayora to book solid earnings growth of 13% CAGR in 2015‐18F, supported by both higher sales volumes and selling prices of its affordably Target Price (IDR) 2,100 priced products. The large contribution from exports – about half of Mayora’s Upside/Downside ‐1.4% sales – will help to sustain growth going forward. At the current share price, Previous Target Price (IDR) ‐ however, the stock trades at a demanding valuation. As such, we initiate coverage on the company with a HOLD recommendation and TP of Rp2,100. Stock Statistics Revenues supported by export sales. Around 50% of Mayora’s FY16 revenues Sector Consumer were contributed by exports to Asia, Africa and the Middle East – the key Bloomberg Ticker MYOR IJ growth driver in the past three years (+21.6% yoy CAGR). For 2017, the World No of Shrs (mn) 22,358 Bank expects the outlook for these countries to remain positive, with weakness in global growth and external demand offset by robust domestic consumption Mkt. Cap (IDR bn/USDmn) 47,624/3,566 and investment. This, in turn, bodes well for Mayora’s export revenues going Avg. daily T/O (IDR bn/USDmn) 2.1/0.2 forward.

Major shareholders Ample room to grow. Nielsen foresees higher consumer products turnover this UNITA BRANINDO PT 32.9% year with improved growth of 10% yoy (2016: 8%), supported by continued expansion by retailers and better macro‐economic conditions. Mayora is one of NORGES BANK 1.1% many home‐grown FMCG manufacturers that offers products at very Estimated free float (%) 40.5 affordable prices (starting from Rp2,000/sachet to less than Rp10,000/pack) in local flavors that are generally preferred by Indonesian consumers. As such, the EPS Consensus (IDR) resilient demand for these kinds of products should be sustained. 2016F 2017F 2018F Solid earnings growth of 13% CAGR in 2015‐18F. Continued expansion to Danareksa 60.6 68.7 78.8 increase the capacity by 10‐15% will help support higher sales volume growth Consensus 58.5 69.4 81.5 going forward. Coupled with inflation‐based selling price adjustments, we Danareksa/Cons 3.6% (1.0%) (3.3%) estimate that Mayora will book 16.8% revenues CAGR in 2015‐18F. At the gross level, however, higher commodity prices will translate into lower 2017‐18F MYOR relative to JCI Index gross margins of 26.5‐26.7%. Nonetheless, continued manageable opex and a lower cost of debt should help the company to book solid 2015‐18F earnings growth of 13%. For 2017‐18, we expect the net margin to range from 7.4‐7.5%. MYOR (LHS) Relative to JCI (RHS) Rp/share 80 Rich valuation, initiate coverage with a HOLD. With a proven track record in 2,200 FMCG, we believe that Mayora can sustain its earnings growth going forward. 60 A significant contribution from exports will boost revenues and mitigate cost 1,800 40 pressures in the event of currency volatility. However, MYOR is currently trading at a rich valuation of 31x FY17F PE versus its peers’ 21.7x (excluding 1,400 20 HMSP and UNVR). We initiate coverage with a HOLD recommendation and a TP of Rp2,100 (FY17F PE 31.3x – or slightly above its 5‐year average of 29.1x) based 1,000 0 on a blended valuation from DCF and PE.

9/5/16 6/6/16 4/7/16 1/8/16 14/3/16 11/4/16 29/8/16 26/9/16 16/1/17 13/2/17 13/3/17 24/10/16 21/11/16 19/12/16

Source : Bloomberg Key Financials

2014A 2015A 2016F 2017F 2018F Year to 31 Dec Revenue, (Rpbn) 14,169 14,819 18,055 20,642 23,598 EBITDA, (Rpbn) 1,302 2,331 2,762 3,038 3,392

EBITDA Growth, (%) (22.0) 79.1 18.5 10.0 11.6

Net profit (Rpbn) 403 1,220 1,354 1,537 1,761 EPS (Rp) 18.0 54.6 60.6 68.7 78.8 Natalia Sutanto EPS growth (%) (59.5) 202.4 11.0 13.5 14.5 (62‐21) 29 555 888 ext 3508 BVPS, (Rp) 179.3 227.1 275.4 330.5 393.7 [email protected] DPS, (Rp) 9.2 6.7 12.3 13.6 15.5 PER (x) 118.0 39.0 35.2 31.0 27.0

PBV (x) 11.4 9.0 7.4 6.2 5.2 Dividend yield (%) 0.4 0.3 0.6 0.7 0.8 EV/EBITDA (x) 38.2 20.6 17.3 15.6 13.8 Source : MYOR, Danareksa Estimates

www.danareksa.com See important disclosure at the back of this report 1

Valuation

We believe Mayora can sustain its earnings growth going forward, supported by a balanced contribution from domestic sales and exports. With strong brand equity, demand for its affordably priced products is resilient. We forecast rapid growth in its top line by 16.8% CAGR in 2015‐18F followed by low double‐digit growth until 2026. As we expect stable commodity prices, we also anticipate stable gross margins in the range of 26‐27% during our forecast period. Around 50‐60% of the company’s opex have been spent on Advertising and Promotions over the past two years. This is unlikely to change in the medium term. As such, we expect opex/revenues of around 11‐12% in the period from 2017‐20, increasing to 13‐14% in 2021‐26 as the company focuses on brand awareness and sustaining its sales growth.

Based on our DCF valuation, we estimate MYOR’s fair value at Rp2,197 with 4% terminal growth and WACC of 10.1% (Risk free rate of 7.3%, Cost of debt of 9.8% and Equity risk premium of 5%). Over the past five years, MYOR has traded at an average PE of 29.1x. Using the mid value of our DCF valuation and the average 5‐year PE, we arrive at a TP of Rp2,100.

Over the past year, the company has raised the guidance for its top line and bottom line twice. This owed to the strong demand for its products with the company’s selling prices only slightly adjusted. Given its strong performance, MYOR has outperformed other stocks under our coverage (relative to the JCI the stock has gained 70% over the past 12 months and 29% ytd). At the current share price, MYOR is trading at FY17F PE of 31x, slightly above its average 5‐year PE. Whilst we believe that the company’s fundamentals are still sound, we also take the view that all the good news is already priced in. As such, we initiate coverage on Mayora with a HOLD.

Exhibit 1. Valuation

2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F EBIT 2,450 2,766 3,078 3,572 4,307 4,969 5,921 6,463 7,268 (‐) Tax (515) (590) (695) (825) (1,009) (1,181) (1,422) (1,565) (1,770) (+) Depreciation and Amortization 588 626 697 811 901 974 1,032 864 699 (‐) ∆WC (587) (667) (718) (741) (814) (923) (1,077) (1,230) (1,394) (‐) Capex (836) (643) (707) (836) (643) (707) (836) (964) (707) FCFF 1,100 1,492 1,654 1,982 2,742 3,133 3,618 3,568 4,097

Discount Factor 1.00 0.91 0.83 0.75 0.68 0.62 0.56 0.51 0.46

Discounted FCFF 1,100 1,356 1,365 1,487 1,868 1,940 2,035 1,824 1,903

Value of FCFF 14,878 Terminal value 32,645

Enterprise Value 47,523 Net Cash/ (Net Debt) 1,591

Equity Value 49,114 Number of shares(mn) 22,359

Equity value per share 2,197

PE Blended 30.5 2,100 PE 29.1 2,001 DCF 2,197

Source: Danareksa Sekuritas, Bloomberg

www.danareksa.com See important disclosure at the back of this report 2

Exhibit 2. Forward PE band 60.0

50.0

40.0

30.0

20.0

10.0

‐ 6/1/2012 6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017

PE Average Std. Dev. +1 Std. Dev. ‐1 Std. Dev. +2 Std. Dev. ‐2

Source: Danareksa Sekuritas, Bloomberg

Exhibit 3. Peers comparison Price, Target MarketEPS ‐‐‐‐‐ P/E, x ‐‐‐ ‐‐‐‐‐ P/B, x ‐‐‐ EV/EBITDA ROE, % Ticker Rec Rp Price, Rp Cap, Rptn 2017F 2017F 2017F 2017F 2017F HMSP HOLD 4,030 3,850 468.8 8.0% 37.0 13.6 26.1 37.1 UNVR BUY 42,400 47,000 323.5 8.2% 46.0 59.1 31.2 128.3 GGRM BUY 63,000 79,500 121.2 8.2% 17.7 2.7 11.1 15.5 ICBP BUY 8,325 10,850 97.1 21.9% 22.4 5.4 20.2 23.1 KLBF SELL 1,485 1,400 69.6 10.4% 28.5 5.2 18.5 18.3 INDF BUY 7,950 9,650 69.8 13.8% 14.8 2.2 7.3 14.7 MYOR HOLD 2,130 2,100 47.6 13.5% 31.0 6.4 14.6 21.5 KINO SELL 2,760 2,800 3.9 4.3% 20.0 1.9 12.4 9.9 Weighted average 1,201.5 9.9% 34.2 22.6 55.2 Exclude UNVR, HMSP 13.4% 21.7 4.1 18.3

Source: Bloomberg (as of March 13, 2017), Danareksa Sekuritas

Exhibit 4. MYOR Relative share price performance 80.0 69.5 70.0

60.0

50.0 41.2 40.0 33.2 28.9 30.0 18.4 20.0

10.0

‐ 1M (%) 3M (%) 6M (%) Ytd 12M(%)

Source: Bloomberg

www.danareksa.com See important disclosure at the back of this report 3

Risks

Competition Competition may stiffen in the F&B industry as more new players come into the market, either local or multinational companies. As such, Mayora will be pressed to maintain its market share through advertising and promotions whilst also undertaking product innovation.

Raw materials – prices and supply Mayora uses five main raw materials in its production process: sugar, wheat flour, coffee and palm oil. If raw material prices suddenly surge, margins will be hit. Supply side risks are worth noting. In particular, natural disasters, crop failure and transportation problems may disturb the supply of raw materials.

Delays in purchasing power recovery We foresee a recovery in purchasing power from an uptick in the pace of economic growth to 5.1% this year. Nonetheless, weaker‐than‐expected purchasing power may still hold back sales volume growth this year.

Continued soft economic growth in countries targeted for exports Mayora exports its products to major countries in Asia, Africa and the Middle East. By the end of 2016, exports accounted for 49% of the total top line. As a result, slower economic growth in these countries would likely have a negative impact on the company’s export revenues, in our view.

www.danareksa.com See important disclosure at the back of this report 4

Exhibit 5. Sugar price (USD/lb) Exhibit 6. Wheat price (USD/bushel)

25 700

600 20

500

15 400

10 300 15 15 15 15 15 15 16 16 16 16 16 16 17 17 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 15 15 15 15 15 15 16 16 16 16 16 16 17 17 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 01 03 05 07 09 11 01 03 05 07 09 11 01 03 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 01 03 05 07 09 11 01 03 05 07 09 11 01 03 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02

Source: Bloomberg Source: Bloomberg

Exhibit 7. Coffee price (USD/lb) Exhibit 8. Palm oil price (MYR/MT)

25 3,500

3,000 20

2,500 15 2,000

10 1,500 15 15 15 15 15 15 16 16 16 16 16 16 17 17 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 15 15 15 15 15 15 16 16 16 16 16 16 17 17 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 01 03 05 07 09 11 01 03 05 07 09 11 01 03 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 01 03 05 07 09 11 01 03 05 07 09 11 01 03 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 02 Source: Bloomberg Source: Bloomberg

www.danareksa.com See important disclosure at the back of this report 5

Continue solid performance ahead

Solid earnings growth of 13% CAGR in 2015‐18F

Over the past three years, the revenues of MYOR have grown a brisk 14.5% CAGR, supported by strong exports, which have accounted for around half of the company’s total revenues since 2014. In the domestic market, the realization of more infrastructure projects has helped to sustain solid revenues growth. In early 2000, the company started to export its products to major Asian countries, the United States, Australia and Europe, with only a very small contribution at the beginning. Over time, however, exports have risen strongly due to stronger demand, close cooperation with several overseas distributors/buyers and continued promotions.

This year, we expect the company to book 14.3% yoy top line growth, backed by higher sales volume and inflation‐based selling price adjustments. When we recently met the company, they said that expansion would continue this year with capacity raised by 10‐15% to tap higher expected demand in the coming years.

The major raw materials used in the company’s products are sugar, wheat flour, coffee and palm oil. Higher prices of raw materials would translate into a higher cost of production, which would be passed onto consumers in the form of price increases or smaller package sizes. However, we expect raw material prices to remain stable in the coming years, thereby allowing Mayora to sustain its FY17‐18F gross margin at 26.5‐26.7%. On the operating front, we expect the company to maintain its advertising and promotional spending in an effort to maintain market share. We estimate that the company will book 2015‐18F earnings CAGR of 13%.

Exhibit 9. Balance revenue from domestic and export (Rp bn)

20,000

16,000 14,169 14,819 12,018 12,000 10,511 9,454 7,224 8,000

4,000

‐ 2010 2011 2012 2013 2014 2015

Domestic Export

Source: Company

www.danareksa.com See important disclosure at the back of this report 6

Exhibit 10. Revenue and margins Rp tn 30.0 60% 23.6 25.0 50% 20.6 20.0 18.1 40% 14.2 14.8 15.0 12.0 30% 10.5 10.0 20%

5.0 10%

‐ 0% 2012 2013 2014 2015 2016 2017F 2018F Food processing (LHS) Coffee and Chocolate (LHS) Gross margin (RHS) Operating margin (RHS)

Source: Company, Danareksa

Sensitivity analysis

In 2017, we expect both the food processing and coffee/chocolate divisions to book improved sales volume growth with inflation‐based selling price adjustments. Higher volumes of 5% in both divisions would lead to 4.6% and 5.3% higher FY17F revenues and earnings, respectively.

Assuming higher raw material prices, we estimate that MYOR will book a slightly lower FY17F gross margin of 26.5% (FY16F: 26.7%). However, any 0.1% decline in our gross margin assumption will result in 1.2% lower FY17F earnings, which should be mitigated by 0.1% higher selling prices in both divisions.

Exhibit 11. Sensitivity analysis to volume and gross margins % changes in Sensitivity to Revenue Net profit +5% higher volume in food processing 2.2% 2.0% +5% higher volume in coffee &chocolate 2.4% 3.3% +5% higher volume in food and coffee 4.6% 5.3% ‐0.1% lower gross margin assumption 0.0% ‐1.2%

Source: Danareksa

www.danareksa.com See important disclosure at the back of this report 7

Mayora Indah

A well‐known FMCG company in Indonesia Mayora is a well‐known (reputable) Fast Moving Consumer Goods company in Indonesia which produces biscuits, wafers, chocolate, coffee, candies and nutritional products. Research from the USDA confirms that traditional and modern snack foods (such as confectionary, pastries, cakes, biscuits, ice cream or sweet and savory snacks) are very popular among Indonesians. It is also worth noting that local flavors are generally preferred. This gives local food manufacturers the opportunity to come up with new products using a combination of local and imported flavors.

Exhibit 12. Brands under Mayora Indah (MYOR IJ)

Source: Company

By the end of 2016, Mayora was operating nine factories in six locations, all in Java. From Java, all products are distributed (by Inbisco Niagatama Semesta – an affiliated company) throughout Indonesia and to export markets. To ensure product availability, the company has warehouses/depots in each province. Around 70% of the total products are distributed to general trade retailers while the remaining 30% are distributed to modern traders.

Industry and competition

Indonesia’s F&B business has good potential The food and beverages industry in Indonesia offers good potential, supported by a large and growing population, burgeoning middle class and improving economic conditions. Coupled with better purchasing power and aggressive expansion undertaken by retailers, the F&B industry therefore has sound prospects in the coming years.

Data from the Central Bureau of Statistics (BPS) shows that in the past 10 years, the average per capita expenditure on food and beverages was around 51% of total expenditure. Research by AC Nielsen reveals a similar finding, with around 48% of the total expenditure of Indonesia’s middle class allocated toward FMCG products, especially food and beverages.

According to Nielsen, consumer products turnover will be higher this year with growth of 10% yoy (2016: 8%), supported by the continued expansion of retailers and improving macro‐economic conditions. Coupled with soft inflation, this bodes well for sales of consumer products. In 2016, the turnover of 55 categories of FMCG products reached Rp380.16tn, up 8% yoy. This is less than 2015’s increase of 11.6% yoy, as high inflation led to significant hikes in selling prices that year.

www.danareksa.com See important disclosure at the back of this report 8

As such, we believe Mayora has plenty of potential to grow further, especially since its snacks and instant coffee have very affordable prices (coffee sachets sell for less than Rp3,000 each and snacks less than Rp10,000/pack). In our view, consumer spending on snacks and instant coffee will remain buoyant although spending on nonessential items may decline.

Exhibit 13. Monthly expenditure on Food – as % to total expenditure

55.0% 51.4% 51.1% 49.4% 50.7% 50.0% 44.9% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 2010 2011 2012 2013 2014

Source: CEIC

Exhibit 14. Selling prices for MYOR and competitors’ products Products Company Price/pack (IDR) Energen Cereal ‐ 5 sachet MYOR 8,140 Ceremic Cereal ‐ 5 sachet Santos 6,500 Roma Malkist Merah ‐ 150gr MYOR 7,175 Khong guan malkist crackers ‐ 135gr Khong Guan 5,850 Roma Marie ‐ 115gr MYOR 6,913 Marie Regal ‐ 125gr Jaya Abadi 12,550 Beng‐beng 32gr MYOR 3,555 Top 32gr Delfi 3,900 Torabika Capucino ‐ 10 sachet MYOR 22,770 Gooday Capucino ‐ 10 sachet Santos 17,698 Torabika Susu ‐ 10 sachet MYOR 12,978 Kapal Api Kopi Susu ‐ 10 sachet Santos 12,728 Indocafe Coffeemix ‐ 10 sachet Sari Incofood 12,048 Nescafe Original ‐ 10 sachet Nestle 14,563 Top Coffee Kopi Susu ‐ 10 sachet Wings 8,938

Source: Danareksa’ survey

www.danareksa.com See important disclosure at the back of this report 9

Competition

Considering that the F&B industry is a highly lucrative business, Mayora faces stiff competition from both local and foreign FMCG companies. It is estimated that the market size for biscuit products may reach Rp18tn in 2016, up from Rp14.9tn in 2013 (6.3% CAGR in 2013‐16). In this segment, Mayora faces competition from local FMCG firms (including Khong Guan, Garuda Food, Orang Tua Group, etc) as well as from foreign companies (Arnott’s, Danone, Nabisco, etc). At present, there are more than 100 companies operating in this industry.

Exhibit 15. The market size of biscuit in Indonesia (Rp tn) 20.0 18.0 17.6 18.0 16.4 16.0 15.0

14.0

12.0

10.0

8.0 2013 2014 2015 2016E

Source: Nielsen Advertising Information Service, SWA

Exhibit 16. Brand share of biscuit market in Indonesia – 2015* NissinGood Time Marie Regal 4% 3% 4% Oreo 7%

Monde Roma 8% 46%

Biskuat 11%

Khong Guan 17%

Source: SWA, ICSA survey 2015 *Non‐wafer

www.danareksa.com See important disclosure at the back of this report 10

In the coffee business, the Association of Indonesian Coffee Exporters (AEKI) said that Indonesia’s coffee consumption is increasing by 8% annually. It is estimated that total coffee consumption in Indonesia may reach 350,000 tons in 2016, of which 90% will be absorbed by instant coffee producers. The report by the United States Department of Agriculture (USDA) claims that Indonesia’s instant coffee producers are raising production to meet the growing domestic coffee demand (+11% in the past three years).

According to Mintel Research, Indonesians prefer instant coffee or ready‐to‐drink coffee for simple reasons: it is affordable, easy to find and convenient to make. Based on its research of 33,000 new household products conducted every month in the world’s 62 major economies, the growth of packaged retail coffee in Indonesia reached 19.6% CAGR in 2011‐2016, or more than in Turkey, India, Vietnam and Chile.

With robust/potential growth in the coffee business, Mayora also competes with several instant coffee manufacturers i.e. Santos Jaya Abadi (Brand: Kapal Api), Nestle (Brande: Nescafe), Wings Group (Brand: Top Coffee), and Sari Incofood (Brand: Indocafe).

Exhibit 17. The 2011‐16 CAGR of packaged retail coffee consumption (%)

Source: Mintel Research, Jakarta Globe

Exhibit 18. Instant coffee products from MYOR and competitors Product Producer Price/sachet (Rp) Torabika Cappucino MYOR 2,277 Gooday Cappucino Santos 1,770 Torabika Susu MYOR 1,298 Kapal Api Kopi Susu Santos 1,273 Indocafe Coffeemix Sari Incofood 1,205 Nescafe Original Nestle 1,456 Top Coffee Kopi Susu Wings 894 Source: Danareksa Survey

www.danareksa.com See important disclosure at the back of this report 11

Exhibit 19. Income Statement Year to 31 Dec (IDRbn) 2014A 2015A 2016F 2017F 2018F Revenue 14,169 14,819 18,055 20,642 23,598 COGS (11,634) (10,620) (13,236) (15,162) (17,297) Gross profit 2,535 4,198 4,819 5,480 6,301 EBITDA 1,302 2,331 2,762 3,038 3,392 Oper. profit 891 1,863 2,223 2,450 2,766 Interest income 33 17 15 16 20 Interest expense (379) (399) (339) (351) (319) Forex Gain/(Loss) (19) 152 (54) (21) (69) Income From Assoc. Co’s 0 0 0 0 0 Other Income (Expenses) 4 8 0 0 0 Pre‐tax profit 529 1,640 1,845 2,094 2,399 Income tax (120) (390) (454) (515) (590) Minority interest (6) (30) (37) (42) (48) Net profit 403 1,220 1,354 1,537 1,761 Core Net Profit 422 1,068 1,409 1,558 1,829

Exhibit 20. Balance Sheet Year to 31 Dec (IDRbn) 2014A 2015A 2016F 2017F 2018F Cash & cash equivalent 713 1,682 2,148 1,750 2,215 Receivables 3,081 3,379 4,117 4,707 5,381 Inventory 1,967 1,763 2,198 2,517 2,872 Other Curr. Asset 748 630 767 877 1,003 Fixed assets ‐ Net 3,585 3,771 3,954 4,201 4,218 Other non‐curr.asset 197 118 128 139 146 Total asset 10,291 11,343 13,312 14,193 15,835

ST Debt 1,977 1,348 2,620 2,346 2,082 Payables 955 1,163 1,449 1,660 1,893 Other Curr. Liabilities 182 641 781 893 1,021 Long Term Debt 2,626 2,461 1,509 995 995 Other LT. Liabilities 450 536 653 747 854 Total Liabilities 6,191 6,148 7,012 6,641 6,845 Shareholder's Funds 4,008 5,077 6,157 7,389 8,803 Minority interests 93 117 143 163 186 Total Equity & Liabilities 10,291 11,343 13,312 14,193 15,835

www.danareksa.com See important disclosure at the back of this report 12

Exhibit 21.Cash Flow Year to 31 Dec (IDRbn) 2014A 2015A 2016F 2017F 2018F Net income 403 1,220 1,354 1,537 1,761 Depreciation and Amort. 411 469 540 588 626 Change in Working Capital (1,199) 572 (746) (587) (667) OtherOper. Cash Flow (48) 573 296 313 274 Operating Cash Flow (432) 2,833 1,445 1,852 1,993

Capex (918) (562) (727) (841) (643) Others Inv. Cash Flow 33 17 15 16 20 Investing Cash Flow (885) (545) (712) (826) (623)

Net change in debt 730 (795) 321 (788) (264) New Capital 9 25 26 20 23 Dividend payment (206) (149) (275) (305) (346) Other Fin. Cash Flow (363) (399) (339) (351) (319) Financing Cash Flow 170 (1,319) (267) (1,423) (906)

Net Change in Cash (1,148) 969 465 (397) 465 Cash ‐ begin of the year 1,860 713 1,682 2,148 1,750 Cash ‐ end of the year 713 1,682 2,148 1,750 2,215

Exhibit 22. Key Ratios Year to 31 Dec 2014A 2015A 2016F 2017F 2018F Growth (%) Sales 17.9 4.6 21.8 14.3 14.3 EBITDA (22.0) 79.1 18.5 10.0 11.6 Operating profit (31.7) 109.1 19.3 10.2 12.9 Net profit (59.5) 202.4 11.0 13.5 14.5 Profitability (%) Gross margin 17.9 28.3 26.7 26.5 26.7 EBITDA margin 9.2 15.7 15.3 14.7 14.4 Operating margin 6.3 12.6 12.3 11.9 11.7 Net margin 2.8 8.2 7.5 7.4 7.5 ROAA 4.0 11.3 11.0 11.2 11.7 ROAE 10.3 26.9 24.1 22.7 21.7 Leverage Net Gearing (x) 1.0 0.4 0.3 0.2 0.1 Interest Coverage (x) 2.3 4.7 6.6 7.0 8.7

Source : MYOR, Danareksa Estimates

www.danareksa.com See important disclosure at the back of this report 13

www.danareksa.com See important disclosure at the back of this report 14