ubs indonesia conference - mpm...

UBS Indonesia Conference 25 February 2014

AGENDA

2

I. Company Overview

II. 9M13 Results & FY13 Outlook

III. Company Updates

IV. Use of Proceeds

3

A LEADING AUTOMOTIVE COMPANY IN INDONESIA

15.3%

Revenue 100% = IDR10,311 bn

Net profit after tax 100% = IDR411 bn

43%

29%

9%

19%

9M13 Performance

Distribution & Retail Auto Consumer Parts Auto Services Financial Services

100% 100% 100% 55-100%(b)

PT Saratoga Investama Sedaya Tbk (“Saratoga”)

Morninglight Investments S.à.r.l. (“Morninglight”)

Public and Individual Shareholders(a)

45.1%

39.6%

(c)

(c)

Honda 2W main dealer in East Java & East Nusa Tenggara, top 2 national

Honda motorcycle retail dealer

(a) Includes 14.3% of Individual shareholders in PT Rasi Unggul Bestari

(b) 100% for MPMFinance; 60% for SAF; 55% for MPMInsurance

(c) Motor Distributor is under our 100% subsidiary, Mulia; Motor Sales is an operating division within MPM

No 1 Motorcycle lubricant oil manufacturer and distributor

nationwide

No 2 B2B vehicle rental operator in Indonesia

Car financing company

Motorcycle financing company

Auto and cargo insurance company

76%

11%

6% 7%

Shareholding and Organization Structure (as of 31 December 2013)

1 of 2 Nissan car retail nationwide dealership

Financial Services

Auto Services

Consumer Parts

Distribution & Retail

BEST-IN-CLASS MANAGEMENT TEAM

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Board of Directors Board of Commissioners

5

Mitra Pinasthika Mulia (“Mulia”) Mustika Sales Operations (“MSO”)

Distributor of Honda motorcycles in East Java and East Nusa Tenggara

Retail sales and services of motorcycles

Rapid sales volume growth, driven by aggressive expansion… Consistent market share capture, supported by…

…best-in-class warehousing and supply chain operations …and well-managed retail dealership network

Honda M/S in East Java (%)

Motorcycle sales ‘000 units


Number of retail outlets 47 51 63 66 67 17 22 31 38 40

415 (a) 62 (a)

(b)

736656611504

905+16%

2013 2012 2011 2010 2009

99867554

110

+19%

2013 2012 2011 2010 2009

MULIA AND MSO ARE AMONG THE BEST DISTRIBUTION AND RETAIL FRANCHISES FOR HONDA MOTORCYCLES IN INDONESIA

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• Mulia is significantly outperforming the market. 9M12 to 9M13 sales volume growth:

• 2W Market: 9% - Honda: 13%

• Strong performance despite headwinds:

₋ Increase in Syariah down payment requirement in April

₋ Increase in BBM price in June

• Units sold in the month of July reached a record high of 90.8K motorcycles

• Total dealership increased to 40 dealers

• In 2013, MPMMotor opened 2 new dealers

Makassar Pontianak

OUTPERFORMING THE MARKET


+26%

754 600

+23%

905 736

9M13 Milestones

IDR billion

5,924 7,838

+32%

9M12 9M13

Revenue

+25%

FY12 FY13E

10,132 8,128

IDR billion

213

+33%

9M13 9M12

160

Net Profit After Tax

292

+32%

FY13E FY12

221

81 92

10M13 10M12

+14%

99

+11%

FY13

110

FY12

MPMMotor

Mulia

Operational Performance

7

Federal Karyatama (“FKT”)

Producer and manufacturer of Federal Oil motorcycle lubricant oil. Also does blending and packaging for AHM Oil, the OEM motorcycle oil brand for Honda motorcycles

Sales Volume KL

32.124

+9%

60,632

2013

56,393 52,713 45,270 43,370

2009 2011 2010 2012

(a) 2 months outlook

FEDERAL OIL IS A LEADING BRAND IN MOTORCYCLE LUBRICANTS NATIONALLY

Strong Product Portfolio

Attractive Growth Profile

Best in Class Production Facility

1

2

3

Non-Matic Products Matic Products

Sports type, Cubs Scooters

High performance Everyday use Everyday use

8

FEDERAL OIL ADDRESSABLE MARKET IS ALL MOTORCYCLE 2 – 10 YEARS OLD By end of 2013, there will be 86 Million motorcycles in population (both active / inactive circulation)

9 (a) Does not take into account reduction from minority interest

• MPM completed the acquisition of the 17% minority shareholding in FKT on 10 June 2013, making FKT a 100% subsidiary of MPM

• Through effective marketing, matic product sales volume in 1H13 has increased by 144% compared to 1H12. In 9M13 matic volume increased by 109% YoY

• Product portfolio shift to further emphasize the higher growth matic segment, including new matic product (Y-matic) development

• Brand positioning rejuvenation

• Tap into 4W lubricant business

• Production plant expansion plan is moving into feasibility study

GOOD VOLUME GROWTH AND EFFICIENT OPERATIONS LED TO STRONG FINANCIAL PERFORMANCE

Total Sales Volume KL

47,958

+8%

10M13

51,949

10M12

FKT Operational Performance

+8%

FY13

60,632

FY12

56,393

IDR billion

1,115

9M12

975

+14%

9M13

Revenue

1,286

+14%

FY13E

1,469

FY12

IDR billion +12%

163

9M12 9M13

183

Net Profit After Tax(a)

216

+7%

FY13E FY12

202

9M13 Milestones

Key Initiatives in 9M13

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Exceptional Growth in Fleet Size

Fleet size Number of cars

Provider of full suite of transportation solutions such as vehicle rental, driver service, fleet management, car pooling, and auto body repair

Wide Geographic Presence

12,104


(b) Sample customers. MPMRent has over 1,200 customers as of 31 October 2013

(c) Source: MPMRent Data as of 31 October 2013

+39%

2013

13,502

2012

7,991

2011

6,196

2010

4,490

2009

3,578

Reputable Corporate Clients(b)

12,104

Loyal Customer Profile(c)

Mitra Pinasthika Mustika Rent (“MPMR”)

1% 16%

27% 56% > 5-10 years

> 10 years

> 1-5 years

<= 1 year

MPMR IS THE NATION 2ND LARGEST VEHICLE RENTAL COMPANY

12,104

11

• Top 5 customers

• Top new customers

• Construction of driving school building is expected to complete by end of 2013 with operations to start on 1 April 2014

COMBINATION OF ORGANIC AND NON-ORGANIC GROWTH HAS ACCELERATED MPMRENT’S INTO THE #2 POSITION

Total Fleet Size

+85%

10M13

13,339

10M12

7,207

MPMRent Operational Performance

+69%

FY13

13,502

FY12

7,991

IDR billion +77%

9M13

717

9M12

406

Revenue

FY12

563

+66%

FY13E

937

IDR billion

44 53

9M13

+20%

9M12


6180

+31%

FY13E FY12

9M13 Milestones


KARYA BUDI MANDIRI

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• Focus on new and used car purchases as well as used car and motorcycle refinancing

• Strong relationship with funding providers as well as numerous retail car dealers and showrooms

• 48 branches, 12 sales offices, and 93 outlets as of 10M13

• Focus on new Honda motorcycle, used motorcycle financing, and electronic goods financing

• Partnership with JACCS, a leading Japanese consumer finance company, to lower overall funding cost

• 36 branches in 6 provinces as of 10M13

• Offers vehicle, cargo, and property insurance

• Established to leverage on broader insurance opportunities within MPM

• Reinsurance treaty with Swiss Reinsurance

• 6 representative offices

Loan Portfolio, IDR billion Loan Portfolio, IDR billion

88.5% 95.9% 87.0%

88.4%


MPM HAS THREE FINANCIAL SERVICES SUBSIDIARIES TO COMPLEMENT ITS OPERATIONS

+1,380%

FY13E

74

56

18(a)

FY12

5

Gross Premium, IDR billion

3.3%

FY12

2,864

43.9%

32.9%

19.8% 3.4%

FY11

2,242

45.9%

28.5%

23.7% 1.8%

22%

FY13(a)

3,353

45.6%

35.7%

15.4%

Used car financing

Finance lease

New car financing

Used 2W financing

FY13(a)

1,306

90.0%

9.0% 1.0%

FY12

951

88.4%

8.2% 3.4%

FY11

1,061

95.9%

3.2%

0.9%

11%

New 2W financing

Used 2W financing

Electronic goods

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• Total network grew from 45 branches , 6 sales offices, and 96 outlets in 9M12 to 48 branches, 11 sales offices , and 85 outlets in 9M13

• Weighted average Interest rates on new bookings has decreased from 20.1% in 9M12 to 19.1% in 9M13

• The loan portfolio growth has increased NPL ratio > 90 days from 1.8% in 9M12 to 2.5% in 9M13

• Increase collection efforts to reduce NPL ratio to below 2.0%

• System data improvement especially to track NPL

• Centralized of Desk Collection (Desk-Coll)

STRONG PERFORMANCE UNDERLINED BY GROWTH IN NEW BOOKINGS

New Booking IDR billion

1,904

+3%

1013

1,965

10M12

MPMFinance Operational Performance

+3%

FY12

2,286 2,361

FY13

IDR billion +18%

495 418

9M12 9M13

Revenue

FY13E

+26%

FY12

549 694

IDR billion

7571

+6%

9M12 9M13


FY13E

104

FY12

100

+5%

9M13 Milestones


14

• SAF has successfully turned around from a net loss into a profitable company

• # of new accounts increased 67% from 44,806 in 9M12 to 74,623 in 9M13

• Weighted average Interest rates on new bookings has increased from 25.1% in 9M12 to 31.7% in 9M13

• NPL ratio > 90 days has decreased significantly from 3.7% in 9M12 to 2.0% in 9M13

• Target to open 12 new Point of Sales , 8 in East Java, and 4 in greater Jakarta

• Maintain NPL ratio > 90 days at 2.0% in FY13

New Booking IDR billion

10M13

844

463

+82%

10M12

SAF Operational Performance

552

FY12 FY13

+86%

1,027

IDR billion

223

+32%

9M13 9M12

169

Revenue

180

303

FY13E FY12

+68%

IDR billion

281

9M12

+567%

9M13


37

-6

FY12

+716%

FY13E

9M13 Milestones


A SUCCESSFUL TURNAROUND FROM 2012

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MPM HAS CLEAR STRATEGY TO GROW ITS BUSINESSES AND TO FURTHER CAPTURE NEW OPPORTUNITIES WITHIN AUTOMOTIVE INDUSTRY

Indonesia’s automotive industry is attractive and generated over $59 bn of sales in 2011

MPM has a clear strategy to capture growth

Car manufacturing ($12.7 bn)

Car distribution ($13.1 bn)

Car retail ($14.8 bn)

2W manufacturing ($11.2 bn)

2W distribution ($11.9 bn)

2W retail ($13.5 bn)

Spare parts ($1.1 bn)

Lubricant oil ($1.7 bn)

Batteries ($1.1 bn)

Tires ($2.1 bn)

Car rental ($2.4 bn)

Taxi ($0.5 bn)

Motorcycle financing ($2.0 bn)

Car financing ($1.5 bn)

Vehicle insurance ($1.2 bn)

Used motorcycle resale ($7.5 bn)

Used car resale ($9.7 bn)

New Car Sale

New 2W Sale

Auto Consumer Parts

Auto Services

Other

Auto Financial Services

Push inorganic growth

Reinforce a seamless nationwide platform

Invest aggressively in our top performers

Maintain and protect leadership positions in our “cash generators”

Develop businesses with strong market growth rate, but not yet in leading positions

• Develop a truly integrated nationwide platform Identity and brand building

Cross-selling of products and services

Sharing of resources

Proximity to customers

Engine of Growth

Cash Cow

Financing Support

• Push inorganic growth Bolt-ons for existing sub-segments

Acquisitions and start ups into new sub-segments

• Actively manage our portfolio 1

2

3

All amounts in this diagram are converted to US$ at the average 2011 exchange rate of US$1 = IDR 8,000.

Source: Frost & Sullivan, management

II. 9M13 RESULTS & FY13 OUTLOOK

FY2013 OUTLOOK

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Key metrics 9M12 9M13 % 2012 2013E %

Profit & Loss (IDR billion)

Net revenue 7,887 10,311 30.7% 10,777 13,715 ~27%

Gross profit 1,171 1,513 29.2% 1,618

GP margin 14.8% 14.7% 15.0%

Net profit from continuing operations

340 440 29.4% 405

NP margin 4.3% 4.3% 3.8%

Net profit after minority interest

309 411 33.0% 374 520 ~39%

• Gross profit and net profit margin continues to improve due to stronger contribution from higher margin businesses units (automobile consumer goods, rental, and finance units)

FY2013 OUTLOOK (CONTINUED)

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Key metrics FY12 9M13

Balance sheet (IDR billion)

Cash 1,192 1,201

ST & LT loans 1,911 1,678

MCNs(a) 1,010 -

Bank funding for SAF and MPMFinance(b) 3,216 3,485

Book value of equity 1,837 4,344

• Despite the Company’s rapid growth over the last two years, MPM’s net debt level(c) is expected to be at a comfortable level of IDR1,179 billion (US$118 million) by end of FY13

- This implies net debt to equity ratio of approximately 0.3x

(a) MCNs had been converted into common shares of MPM at IPO

(b) Only commenced consolidation of MPMFinance borrowings in FY12 onwards

(c) ST & LT loans less cash

III. COMPANY UPDATES

III. COMPANY UPDATES

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OUR NEW PROMISING BUSINESS: NISSAN & DATSUN

• On 23 August 2013, MPMX through its subsidiary, PT Mitra Pinasthika Mustika Auto (“MPM Auto”) signed Dealer Sales and Service Agreement (“DSA”) with PT Nissan Motor Distributor Indonesia (“NMDI”)

• MPMX to open 7 dealers in 2014 and aims to sell 53,000 Nissan & Datsun cars by 2017

Car sales units

53,000

34,000

16,000

2,500

2016F 2015F 2017F 2014F

20

OUR NEW PROMISING BUSINESS: NISSAN & DATSUN (CONTINUED)

• LCGC : Datsun GO & Go+ is a game changer

• Nissan Power 88 plan targets 200K units sales in 2016, half of 200K is expected from Datsun – Datsun is the roadmap for the company's profitable growth – Datsun will bring more innovation and excitement to our products and

services as well as cleaner, more affordable cars for everyone in Indonesia, in line with the energy and environmental challenges of the 21st century

5 Seat GO 5+2 Seat GO+

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• Federal Y-Matic Spesialis Dingin: FKT launched its new product for Yamaha riders – By today, there are 8.7 million Yamaha automatic motorcycles in Indonesia which

consumed around 35 million liter per year.

– Y-Matic products entered the market smoothly and our market response towards the products is very positive. Launched by the end of September 2013, YTD 10M13 sales is 183,400 liter.

FKT’S NEW PROMISING PRODUCT: FEDERAL Y-MATIC SPESIALIS DINGIN

22

Achieved sale break record for first half 2013

period :

May 2013 - 76,320 units

June 2013 - 81,435 units

MULIA WON SALE BREAK AWARDS

23

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OTHER UPDATES

• PT Federal Karyatama (Federal Oil) selected as the first award winner of Employer of Choice (EOC) 2013 – survey conducted by Hay Group in cooperation with SWA magazine • MPMX added into MSCI Global

Small Cap Indices, which take place as of the close of 26 November 2013. Here is the complete changes 13 securities added :

IV. USE OF PROCEEDS

APPENDIX

26

MPM has used up 53% of the proceeds raised in the IPO

MPMAuto build dealers

MPMRent purchase new cars

FKT factory

Loan repayment

MPMRent acquisition

of SAK (1,280 cars)

FKT 17% stake

acquisition

Net IPO proceeds

Status:

100%

In IDR billion, (%) denotes percentage of net IPO proceeds

• 970,000,000 shares (21.7% of enlarged TSO) were offered to public market at IDR1,500 per share

• The 2013E P/E valuation is about 10.7X, with MPMX price at IDR 1,300

175

275

45

115

225

220

300

1,355

MPMRent organic & inorganic

opportunities

(22%)

(16%)

(17%)

(20%)

(3%)

(13%)*

(8%)

Has been executed

* Subject to EGM approval on 10 December 2013

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MPM BOARD OF COMMISSIONERS AND DIRECTORS

Board of Directors Board of Commissioners

28

OUTPERFORMING THE MARKET

East Java is attractive and having a great motorcycle market because

GDP Contribution from Various Industries in East Java(a)

Agriculture

Trade, Hotel, Resto

Manufacturing

Transportation

Construction

Electricity

Finance

Mining

Services

1%

15%

27%

2%

5%

30%

5%

9%

6%

1. East Java is second largest contributor towards Indonesian economy; while GDP per capita ranked as tenth biggest compared to other provinces (a)

2. Its large size as second most populous province and diverse industry; in 2012 , East Java’s economy grew at 7.3% faster than national economy growth at 6.5% and aim 7.5% in 2013(b)

3. Honda’s market share in East Java (managed through Mulia) was always above Honda’s market share nationally between 2007 and 2012(c)

(a) Source: BPS

(b) Bank Indonesia – Surabaya

(c) Based on police registration data

1

2

1,069

66%

25%

9%

2011

989

63%

29%

9%

2010

1,173

51%

40%

9% 979

47%

43%

10%

2008

915

49%

37%

14%

2007

733

47%

35%

18%

2012 2009

Yamaha

Others

Honda

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Disclaimer

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• 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 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.

ubs indonesia conference - mpm...

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