pt nipress tbk (idx:nips)nipress.com/wp-content/uploads/2018/10/nipress... · introduction to pt...
Post on 28-Dec-2019
2 Views
Preview:
TRANSCRIPT
October 12th, 2018
PT Nipress Tbk (IDX:NIPS)Corporate Presentation
1
Nipress – Our Team Seasoned management with a combined tenure in Nipress of +50 years
Jackson Tandiono – President Director
Joined Nipress in 2000 after multiple roles in the USA and Singapore; appointed as President Director in 2012
BSc in Finance from University of Southern California.
Herman Slamet – Independent Director
Joined Nipress in 1997 after 15 years in senior roles in battery business, currently holds the position of Independent Director.
Bachelors in Marketing and Masters in Finance from University of Surabaya
Richard Tandiono – Director
Started his career with Nipress in 2006; appointed Director of Nipress2012 and President Director of NEO1 in 2016.
BSc and MSc in Engineering University of Southern California
Richard Tandiono
Director
Jackson Tandiono
President DIrector
Herman Selamat
Independent Director
1. NEO = PT Nipress Energi Otomotif, a majority-owned subsidiary of Nipress with operations in automotive batteries; Nipress spun-off its battery business to NEO in Jun-16
2
Agenda
Nipress: A leading player in Indonesia’s energy storage solutions
Automotive: Consistent market share gains
Industrial: Sole local producer of industrial lead acid batteries in Indonesia
Historical performance
Welcoming Johnson Controls: The global leader in automobile batteries
Growth plan
3
Introduction to PT Nipress TbkEstablished in 1970, Nipress is currently listed in IDX with a market cap of IDR608bn1
1970
Established as JV between
NippondechiKogyo Co
with PT PemudaExpress
1972-1991
Became a fully local entity
and listed in the Stock
Exchange in 1991
1992-2006
Grew product line to serve 4W and 2W under the
“NS” brand and other
private labels
2007
Entered the industrial
segment by providing
batteries for solar power
plant
2010-2014
Developed maintenance
-free (MF) batteries
Expanded its
OEM and
exporting to key markets
across the globe
2015-now
Launch of NS Maintenance-
free line
Spun-off its auto business
to NEO
JCI acquires
24.5% stake in NEO
1. Closing price as of 8-Oct-18
After years of collaboration, Johnson Controls Intl (JCI), the global leader in lead acid batteries, acquired 24.5% stake in NEO in 4Q18
4
PT Nipress Tbk
(IDX: NIPS)
• Market Cap1: IDR608bn
• Public float: 41%
• Revenues LTM18: IDR1.08tn
• ROE LTM18: 5.2%
• Production capacity:
4W: 3m batteries
2W: 5m batteries
Indst’l: 544KwH
Nipress: Key MilestonesLeading provider of energy storage solutions in Indonesia
1. Closing price 8-Oct-18; 2. Based on revenues of the 6 month period ending 30-Jun-18 (1H18)
Automotive2
(under NEO, a subsidiary)Industrial2
• OEM for notable auto brands
• 3rd largest player in replacement space
• c. 15% share of the domestic market
• Exporting to 4 continents
The only local manufacturer of
industrial lead-acid batteries in Indonesia
60%Of revenues
13%Of revenues
27%Of revenues
Renewable energy
TelcoOthers
(traction / military)
5
Agenda
Nipress: A leading player in Indonesia’s energy storage solutions
Automotive: Consistent market share gains
Industrial: Sole local producer of industrial lead acid batteries in Indonesia
Historical performance
Welcoming Johnson Controls: The global leader in automobile batteries
Growth plan
6
Nipress’ auto business (73% of total revenues)Consistent market share gains amidst soft growth of Indonesian automotive sector
Placed by auto manufacturers at
assembly; under NS brand
OEM
Export to numerous markets across 4
continents
Exports
Replacement market; divided to NS-branded
and private labels
Replacement
Contribution to auto rev’n 1H18
18%(15% 4W, 3% 2W)
58%(42% 4W, 16% 2W)
25%(24% 4W, 1% 2W)
Revenue 1H18 YoY gr.
+106% +17% -40%
Growth trendsRapid growth of NS via
market share gains, beating soft auto sector
Focus shift towards higher margin NS-branded, riding
on the back of OEM growth1
Rationalizing portfolio away from non-profitable
markets
1. Based on internal research, most buyers will opt for the same brand of batteries currently installed in their car upon replacement
1 2 3
Total auto
+0.9%YoY
softer due to drag from rationalizing
exports
7
Auto market: Soft growth of new motor vehicle sales over the past 3 years
1.230 1.208
1.0131.062 1.080
534 554
2013 2014 2015 2016 2017 1H17 1H18
New car sales in Indonesia1
(‘000 units)
New motorcycle sales Indonesia1
(‘000 units)
7.744 7.867
6.4805.931 5.886
2.7013.003
2013 2014 2015 2016 2017 1H17 1H18
1. Gaikindo and AISI data
+3.2% CAGR 15-17
Market has potential to recover; motorized vehicle ownership per capita in Indonesia is still lowvs. emerging market peers
8
OEM: NS OEM batteries grew strongly amidst soft market growth
Growth of new car sales vs. Nipress 4W OEM(‘000 units)
Growth of new moto sales vs. Nipress 2W OEM(‘000 units)
1. Gaikindo and AISI data
-3,2% 3,2% 3,8%
51,4%
8,4%
82,6%
CAGR '13-17 CAGR '15-17 YoY 1H17-18
Indonesian new car sales Nipress 4W OEM
-6,6% -4,7% 11,2%
381%
102%
38%
CAGR '13-17 CAGR '15-17 YoY 1H17-18
Indonesian new motorcycle sales Nipress 2W OEM
1
In IDR terms, NS OEM batteries grew +106% YoY 1H17-18, beating the market by a wide margin
NS OEM 2W still development phase in
‘13
9
OEM 4W: Nipress is a trusted supplier to leading auto brands; with more brands/models in the pipeline
BRANDNEO MARKET
SHARE1
NOTABLE SELECTED MODELS(Market share in brackets)
100 %
10 %
50 %
100 %
90 %
Datsun GO
(100%)
Xpander
(100%)
Wagon R
(100%)
Glory 580
(100%)
Luxio
(50%)
Datsun GO+
(100%)
Pajero Sport
(100%)
Datsun
GO Cross
(100%)
Glory 330
(100%)
GrandMax
(50%)
Futura
(100%)
Travello
(50%)10 %
Market share of 4W market is ~20%1
1
1. Most recent data
Colt diesel
(100%)
Supercab
(100%)
10
OEM 4W: Xpander became Indonesia’s #1 selling model in 1H18
After multiple years of holding the #1 spot, Toyota Avanza met a strong challenger with its
1H18 sales of 39,455 units being edged out by Mitsubishi Xpander’s 39,948 units
1
11
BRANDNEO MARKET
SHARE1
NOTABLE SELECTED MODELS(Market share in brackets)
Next
(100%)Address
(100%)
Satria FU
(100%)
Vario non
ISS
(100%)
Beneli PP
(50%)
30%
13%
10%
50%
OEM 2W: Gaining market share after its launch in 2013; other ASEAN OEMs also in pipeline
Market share ~15%; currently in talks with OEMs in Malaysia and The Philippines
1
Top 3 brands:
>90% of 2W market
1. Most recent data
Beat
(50%)
Vega R
(100%)Jupiter Z
(100%)
Mio, Fino,
X-ride,
Xeon
(30%)
12
OEM 2W: Accelerated market share gains in 2018
2,4% 2,5%
6,5%
>15.0%
Avg. FY17 Mar-18 Jun-18 Current
Nipress market share in 2W OEM(% of volume sold)
1
>6x
13
OEM: Strong gains in 2018 with more brands/models in the pipelineSuccess in OEM will help drive growth in replacement
1
49 51
69
27
59
4 5
16
7
1053 56
85
34
70
2015 2016 2017 1H17 1H18
4W 2W
Nipress’ Automotive OEM Segment Sales(IDR bn)
CAGR 15-17
YoY 1H17-18
+26%Total
4W
2W
+18%
+98%
+106%
+117%
+58%
• Success of Mitsubishi Xpander and Pajero boosted 4W sales
• Increased penetration in Honda motorcycles
2W NS OEM launched in ‘14
Key accounts in Mitsubishi, Yamaha, Honda completed testing and ramped-up orders
Catalyst for future growth:
• Growth of auto market; vehicle ownership in Indo still low
• Nipress’ proven ability to acquire strong models
14
Replacement: A bigger market, approx. 4-5x the size of OEMsNipress is the 3rd largest player in the space with potential for further gains
car battery
6Mmotorcycle battery
36M
Annual battery demand1 Annual battery demand1
Replace-
ment
battery 4.9M
OEM
battery 1.1M 30M 6MOEM
battery
1. Estimate for FY17; 2. Nipress research
2
Growth of NS-branded OEM will help boost future replacement sales as most buyers opt for the same brand of batteries as those currently installed in their vehicles2
NS market share in 4W replacement:
~12%NS market share in 2W replacement:
~5%
Replace-
ment
battery
15
Replacement: Nipress tackles the replacement market with its NS-branded and private-labeled batteries
Private-label: Nipress produces high quality batteries for notable brands
NS-branded: Launched in late ‘15, NS-branded batteries have been gaining traction
MALAYSIA JAPAN
GLOBAL BRAND
GLOBAL BRAND INDIA
2016
2017
2015
Launched 4W
passenger; 1st to
offer official warranty
Late ’17 launched NS for
2W and 4W commercial
Building NS distribution
network
Using its own brand, Nipress can capture a larger
portion of the value chain = higher margins
2
Growth focus is shifting away from private labels to NS-branded batteries
Distribution points 11 Jan-16 47 today
16
Replacement: Advantages of NS-branded batteries
Trademarked technology1
creates highly durable batteries that is more
vibration-resistant with lower discharge rates
High durability
Prices for NS-branded batteries
are up to 10% lower vs. leading brands
Value for money
First to offer manufacturer-official warranty up to 18 months, unmatched in the market (36 months to be
launched)
Manufacturer official warranty and commitment to service
2
1. Developed in partnership with Johnson Controls Intl (JCI)
Up to
10%lower price vs. leading brands
17
Replacement: Building distribution network in FY16-17; adopted from JCI’s successful models in other emerging countries
2
2015 2016 2017 2018
Dec ‘15 Dec ‘16 Dec ‘17 Jun ‘18 Sep ’18 Q4 2018
11 34 35 38 47 53
# of distribution
points
18
60 66 43 51
266 277
150175
314 326343
193226
2015 2016 2017 1H17 1H18
NS Private-label
Replacement: Higher-margin NS batteries are expected to drive growth
Nipress’ Automotive Replacement Segment Sales(combined 4W and 2W, IDR bn)
CAGR 15-17
YoY 1H17-18
+5%Total
Private label
NS-branded
-6%
NM(’15 negligible)
+17%
+16%
+19%
Focus shifting towards NS
Catalyst for growth in NS:
• Boost from growth of OEM1
• Strong product supported by ramp-up of distribution network
1. Based on research, most buyers will opt for the same brand of batteries that is already installed in their car upon replacement
Gradual scale-up of NS’ brand equity and distribution network
2
19
Exports: Nipress is an emerging player in the global battery space with presence across 4 continents
3
South America 7%
Europe3%
Africa25%
Middle east20%
Other AsIa9%
ASEAN36%
Nipress’ Presence around the Globe(FY17, volume)
Focus market
Malaysia = c. 80% of ASEAN sales
20
Exports: Decline in 1H18 due to tariffs on exports to Saudi; potential for strong recovery going forward
3
271 266307
157
92
8,2 9,9
6,9
3,4
4,4
279 276
314
161
96
2015 2016 2017 1H17 1H18
4W 2W
Nipress’ Automotive Export Segment Sales(IDR bn)
CAGR 15-17
YoY 1H17-18
+6%Total
2W
4W
-9%
+7%
-40%
+26%
-42%
Won large contract in Saudi Arabia; “introductory prices” to capture market at
the expense of margins
Changes in tariff policy in Saudi makes pricing no longer attractive; shift portfolio towards more profitable markets
Recovery potential from JCI’s network and Nipress’ regional knowledge:
• ASEAN markets for 4W
• International markets for 2W
With JCI network, monthly orders from Malaysia has doubled in 3Q18 (~30% contribution 1H18)
1. Tariffs imposed for Korean-sourced products in saudi (a certain % of Nipress’ materials are sourced from Korea)
21
Agenda
Nipress: A leading player in Indonesia’s energy storage solutions
Automotive: Consistent market share gains
Industrial: Sole local producer of industrial lead acid batteries in Indonesia
Historical performance
Welcoming Johnson Controls: The global leader in automobile batteries
Growth plan
22
Nipress’ industrial business (26% of total revenues)Drag from gov’t budget cuts to off-grid solar farms; effect has largely bottomed-out
Power storage for panels for off-grid solar farms, home
systems, street lights
Renewable Energy
Traction, military and other industrial uses
Others
Standby power for BTS towers for outages
Telco
Contribution to ind’l rev’n 1H18
27%(drop from 65% in 2016)
73%
Revenue 1H18 YoY Gr.
-25% +15%
Growth strategy & recent trends
Continued support of solar projects; focus on home systems and street lights
Maintain and grow market share in telco, expand traction (i.e. forklifts, tractors), maintain military client
Total indst’l
+0.2%YoY
softer due to drag from r.energy
23
Contribution from off-grid solar farms dropped from 65% to 27% as drag has largely bottomed-out; growth upside from other segments
• Budget cuts starting FY17; Jan-18 federal gov’t
fully halted new off-grid solar farms in favor of
roof panels1 (demand from regional gov’t and replacement still remains)
• Drag from this segment’s decline has largely bottomed-out
• Telco GDP grew 10% CAGR ’15-17; as sole local producer (vs. imports), Nipress is well
positioned to increase market share
• Spike in FY17 from large military orders of ~IDR80b Nov-Dec ’17; without these one-off big orders the segment still grew by 33% CAGR in ’15-17
R. Energy Segment Sales(IDR bn)
Telco+others Segment Sales(IDR bn)
245 248
8353 40
2015 2016 2017 1H17 1H18
97134
252
93 107
2015 2016 2017 1H17 1H18
1. Supported by statement from Dir. General of Energy (bisnis.tempo.co/read/1047167/pemerintah-hentikan-proyek-energi-bersih-apbn)
24
Agenda
Nipress: A leading player in Indonesia’s energy storage solutions
Automotive: Consistent market share gains
Industrial: Sole local producer of industrial lead acid batteries in Indonesia
Historical performance
Welcoming Johnson Controls: The global leader in automobile batteries
Growth plan
25
646 658742
388 391
341 382335
146 146
9881.040 1.077
534 538
2015 2016 2017 1H17 1H18
Automotive Industrial
Revenues: Grew 4.4% CAGR ’15-17 and 0.7% YoY 1H17-18Potential for accelerated growth from NS and new export markets; reduced drag from r. energy
CAGR 15-17
YoY 1H17-18
+4.4%Total
Industrial
Auto
-1.0%
+7.1%
+0.7%
+0.2%
+0.9%
Nipress’ Total Revenues(IDR bn)
4.4% CAGR ’15-17 and +0.7% YoY 1H17-18 mostly caused by:• Drag from r. energy – largely bottomed-out• Exports rationalized to more profitable markets
Other sectors +21% CAGR ’15-17 and +26% YoY
Positioned for mid-long term accelerated growth:• NS brand: Strong growth of OEM;
replacement riding on its tail• Drag from r. energy bottoming out• Potential of new markets with JCI
R.energyTelco+others
-42%+61%
-25%+15%
OEMReplacementExports
+26%+5%+6%
+106%+17%-40%
26
183 179167
74
95
18,5%17,2%
15,5%
13,8%
17,7%
-1,0%
4,0%
9,0%
14,0%
19,0%
24,0%
0
50
100
150
200
250
300
2015 2016 2017 1H17 1H18
Gross profit (IDR bn) Gross profit margin
Gross profit: Shift towards more profitable business mixHistorical movement in margins mostly from changes in product portfolio
Nipress’ Gross Profit
1H17 margins were dragged down by low-margin Saudi exports; compression slightly
offset by high-margin industrial orders in 2H17
Exit from Saudi and shift towards higher-
margin segments1H17 margins were dragged down by low-margin Saudi exports; compression slightly
offset by high-margin industrial orders in 2H17
27
Profit trends: EBITDA margins moves inline with GP margins from ’16Deleveraging from 1.0x DER in Dec-15 to 0.6x DER in Jun-18
139 155 13760 79
14,1% 14,9% 12,7% 11,2%14,7%
-5%
5%
15%
0
100
200
300
2015 2016 2017 1H17 1H18
Absolute value (IDRb) Profit margin
3166 44 20 22
3,1%6,3%
4,1% 3,8% 4,1%
-5%
5%
15%
0
100
200
300
2015 2016 2017 1H17 1H18
51 54 4919 33
5,2% 5,2% 4,6% 3,6%6,1%
-5%
5%
15%
0
100
200
300
2015 2016 2017 1H17 1H18
EBITDA
PAT (norm. for FX)
PAT
Opex in ’15 high as % of revenues as new factory came online; margin moves in line with GP starting ‘16
Capital structure is deleveraged from 1.0x DER in 2015 to 0.7x in 2016-17
Some FX exposure comes from Nipress’ USD loans
28
OEM Replacement Exports
Pass-through mechanism for Lead
Pricing formula with lead price + FX
component
All players exposed to the same market
dynamicsMarket leader adjusts
pricing inline with lead/FX
Pricing formula with lead price + FX
componentPricing by-project
with repricing clause for signif.
commodity movements
Pass-through mechanism for USD
n/aExports are
transacted in USD
Volatility in raw material prices and FX can largely be passed throughLead, a global commodity traded in USD, is a key material comprising 50%-60% of COGS
Automotive Industrial
29
Agenda
Nipress: A leading player in Indonesia’s energy storage solutions
Automotive: Consistent market share gains
Industrial: Sole local producer of industrial lead acid batteries in Indonesia
Historical performance
Welcoming Johnson Controls: The global leader in automobile batteries
Growth plan
30
On 4Q18, JCI completed the acquisition of a 24.5% stake in NEO
Transaction with a mix of secondary and primary shares
NEO’s EV was agreed at a value that is higher than Nipress’ current trading EV
PT Nipress Energi Otomotif(NEO)
Industrial business; automotive fully carved
out to NEO
24.5%
75.5%
1. Proceeds paid in USD
36% primary, 64% secondary
983 1.140
7,2x
18,5x
-1,01,03,05,07,09,011,013,015,017,019,0
0,000
500,000
1.000,000
1.500,000
2.000,000
2.500,000
3.000,000
3.500,000
4.000,000
Nipress EV as ofclosing 11-Oct-18
NEO's EVfrom JCI tx
Enterprise value (IDRb) EV / EBITDA FY17
Deal proceeds of USD18m1 are paid in USD and will be used for capex and general corporate
purposes
Higher EV despite auto business only contributing ~70% and ~50% Nipress’ revenues
and EBIT, respectively
31
About JCI: Global market leader in automotive batteries with minimum presence in SEA
HQ in Ireland, listed on NYSE, present in over 150 countries, with >100 years of experience in the automotive batteries
JCI, 1st place:
USD7.4bauto battery sales FY17
GS-Yuasa, 2nd place
USD2.5bauto battery sales FY17
Market-leading profitability from proprietary closed-loop
manufacturing, distribution and recycling system
Global leader in batteries by a wide margin,
powering 1 of 3 cars in the world
Relationship with notable OEMs around
the globe
~20% EBITDA margins
(vs. Nipress’ 15%)
32
JCI has a track record of successes in emerging markets through JV and organic growth
JV with Amara Raja in 1997, pioneered MF batteries in India;
consistent market share gains
vs. Exide, a dominant leader, to become the close 2nd
today
India: JV with Amara Raja
Brought the notable European brand to China in 2006 and has carved a sizeable
market share
China: Building VARTA
JV with IMSA in 1998, full ownership in 2004; now the
most recognized in Mexico and South America
Mexico: Inorganic growth
33
Amara Raja: JV with JCI has been clawing market share from a dominant player in India
Amara Raja vs Exide’s Revenue Growth(% YoY)
Consistently growing faster than Exide,
market share grew to 22%Introduce warrantied MFbatteries with JCI
Exide was a dominant player with 85% market share
8% 10%
34%
54%64%
82%
21%
12%20%
34%25%
16%23%
11% 15% 13%
4% 7%
26%17%
34%
49%
15%
17%
32%
12%21%
-1%
13%
-1%
17% 15%
FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Amara Raja Exide
2001
By 2003, Amara Raja holds 6%
market share while Exide’s share
remains stagnant
Though Exide also gains market share from small players,
now a close 2nd with 35% market share
(Exide at 40%)
Today Amara Raja trading at 14x TTM EBITDA while
Exide at 8x
34
Deal rationale: Nipress as platform to break into ASEAN and 2W
• Opening new markets
• Despite its scale, JCI has minimum presence in SEA’s 4W and global 2W battery space
• JCI’s global network + Nipress’ local knowledge = well positioned to enter new markets
• Product and technology sharing
• High-durability batteries in partnership with JCI, enabled Nipress to become the first to provide official warranty for lead-acid batteries
Best business practice (BBP) sharing
1
2
3
• World-class manufacturing, distribution, and warranty management practices
35
Agenda
Nipress: A leading player in Indonesia’s energy storage solutions
Automotive: Consistent market share gains
Industrial: Sole local producer of industrial lead acid batteries in Indonesia
Historical performance
Welcoming Johnson Controls: The global leader in automobile batteries
Growth plan
36
Expand domestic market share and penetrate new markets with JCI
Indonesia is exclusive to Nipress, all JCI operations in
Indo will be though Nipress
Leverage JCI’s best practice learned from other
markets + Nipress local knowledge
Domestic market International 2W market
Sizeable opportunity in these markets:
• ASEAN car population estimated to be 3x Indonesia
• Global motorcycle population at least 6x Indonesia; at
least a quarter of which in ASEAN
Nipress to be used as platform to for JCI to join ASEAN tariff-free zone; potential to be a regional manufacturing hub
In 2H18, JCI assistance has already opened new clients in Malaysia, doubling orders from the region
ASEAN 4W market
37
Auto sales volume expected to reach 2.4x by 2021
Target for 4W Target for 2W
2021
2.7mnbatteries
2017
1.5mn batteries
2021
5.0mn batteries
2017
1.8mn batteries
+30%CAGR
+16%CAGR
Key growth drivers:
• Recovery of auto market• Increased market share of NS OEM, which will contribute to NS replacement market
• Additional gains from high durability NS replacements + ramp-up of best practice distribution
• New markets opened in collaboration with JCI
Appendix
39
Selected P&L and Balance Sheet Items
In IDR bn FY15 FY16 FY1714-17 CAGR
1H17 1H1817-18YoY
Income statementRevenue 987.9 1,039.6 1,077.0 2.9% 533.7 537.5 0.7%% YoY -2.8% 5.2% 3.6% 0.7%Gross profits 182.7 178.6 167.4 -2.9% 73.7 94.9 28.7%% margin 18.5% 17.2% 15.5% 13.8% 17.7%EBITDA 138.9 154.5 136.7 -0.5% 59.6 79.0 32.5%% margin 14.1% 14.9% 12.7% 11.2% 14.7%EBIT 83.7 134.1 108.5 9.1% 49.9 54.1 8.3%% margin 8.5% 12.9% 10.1% 9.4% 10.1%PAT 30.7 65.7 44.1 12.9% 20.3 22.2 9.4%% margin 3.1% 6.3% 4.1% 3.8% 4.1%Norm. PAT (ex forex) 51.4 53.6 49.2 -1.5% 19.3 32.8 69.6%% margin 5.2% 5.2% 4.6% 3.6% 6.1%Balance sheetTotal asset 1,548 1,778 1,898 7.0% 1,804 1,882 4.4%Debt (interest bearing) 634 595 584 -2.7% 553 541 -2.3%Total equity 609 843 880 13.0% 862 902 4.6%Key ratiosROE 5.1% 9.0% 5.1% 4.8% 5.0%Debt/ Equity 104% 71% 66% 64% 60%Debt/ EBITDA 4.6 3.9 4.3 9.3 6.8Working capital days 127.9 121.2 116.5 92.6 91.0
DSO 119.0 111.2 111.1 113.0 112.2DIO 106.7 103.1 102.3 98.8 102.7DPO -97.8 -93.0 -96.9 -119.2 -123.9
Note: Full year ending 31-Dec
top related