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20231031_AVIA_Laporan Informasi dan Fakta Material_31483586_lamp1.pdf
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PT Avia Avian Tbk
Investor Presentation
Q3 2023 Results
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Disclaimer
All investments are highly speculative in nature and involve substantial risk of loss. We encourage our investors to invest
very carefully. We also encourage investors to get personal advice from your professional investment advisor and to make
independent investigations before acting on information that we publish. Much of our information is derived directly from
information published by companies or submitted to governmental agencies on which we believe are reliable but are
without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We
do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements or
recommendations.
Past performance is not necessarily indicative of future results. All investments carry significant risk and all investment
decisions of an individual remain the specific responsibility of that individual. There is no guarantee that systems, indicators,
or signals will result in profits or that they will not result in a full loss or losses. All investors are advised to fully understand all
risks associated with any kind of investing they choose to do.
Various statements contained in this presentation, including those that express a belief, expectation or intention, as well as
those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may
include projections and estimates concerning the timing and success of strategies, plans or intentions. We have based
these forward-looking statements on our current expectations and assumptions about future events. These assumptions
include, among others, our projections and expectations regarding: market trends litigation, our ability to create an
opportunity with attractive current yields and upside. While we consider these expectations and assumptions to be
somewhat reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other
risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control
and could cause actual results to differ materially from any future results, performance or achievements expressed or
implied by these forward-looking statements. Investors should not place undue reliance on these forward-looking
statements. We undertake no obligation to update any forward-looking statements to conform to actual results or
changes in our expectations, unless required by applicable law.
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Avian Brands team
Ruslan Tanoko Robert Tanoko Kurnia Hadi Andreas Hadikrisno
Vice President Operations & Finance Director Head of Investor
Director Development Director Relations
ruslan.tanoko robert.tanoko kurnia.hadi investor.relations
@avianbrands.com @avianbrands.com @avianbrands.com @avianbrands.com
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Avian Brands Q3 2023 snapshot
SALES GROSS PROFIT EBITDA NET PROFIT
IDR 1.7 T IDR 697 B IDR 410 B IDR 334 B
( US$ 109 m ) ( US$ 46 m ) ( US$ 27 m ) ( US$ 22 m )
42.1% 24.8% 20.2%
EMPLOYEES DISTRIBUTION COVERAGE CUSTOMERS
CENTERS
38 Provinces 56,000+
8,000+ 156 99 Cities Retail outlets
Convenience translation from IDR based on the average IDR/USD exchange rate in Q3 2023 of 15,201 4
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Q3 financial performance highlights
In IDR billion Q3 2023 Q3 2022 Change ▪ Consolidated sales went up by 4.9% in
(except per share data) comparison to the same quarter last year.
Consolidated sales 1,656 1,579 4.9% ▪ Growth was led by our architectural solutions
segment, which was up by 5.1%. The trading
Architectural solutions 1,292 1,230 5.1%
goods segment was close behind, with sales
Trading goods 364 349 4.3% up by 4.3%.
Gross profit 697 594 17.5% ▪ Gross margin for the architectural solutions
segment increased to 49.1%, marking a 4.9%
Architectural solutions 634 544 16.6% improvement compared to the same quarter
Trading goods 63 50 27.5% last year.
Gross margin 42.1% 37.6% 4.5% ▪ Gross margin for the trading goods segment
was recorded at 17.4%, which is within the
Architectural solutions 49.1% 44.2% 4.9% range we’ve been targeting for this segment.
Trading goods 17.4% 14.2% 3.2% ▪ The improvement in EBITDA margin was
attributable to the gross margin
EBITDA 410 360 14.0%
improvement.
EBITDA margin 24.8% 22.8% 2.0%
Net income 334 303 10.2%
Net income margin 20.2% 19.2% 1.0%
EPS 5.4 4.9 10.2%
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Business update in Q3
▪ The decline in the inflation rate was mainly due Indonesia inflation rate & CPI(1)
to the high base effect caused by the increase
in fuel prices in 2022.
▪ Price inflation is still evident in the primary goods 5.6%
5.2% 150.0
category, holding back the recovery in paint 145.0
demand. 4.6%
140.0
▪ It is also worth noting that the CPI for furnishing
and routine household maintenance is still on the
135.0
3.6%
rise, reflecting the tangible effects of inflation. 130.0
2.9%
▪ The minimum wage’s increase in the past three 2.6% 125.0
years continues to lag building material inflation
by around 10%. 1.4% 1.6% 115.4
120.0
1.6%
112.9
▪ A similar weakness was observed in other sectors,
115.0
including ceramic tiles and FMCG, as 107.6
105.5
110.0
0.6%
demonstrated by the weak sales performance in 105.0
Q3.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
-0. 4% 100.0
▪ Despite weaker consumer purchasing power, we
have been strategically positioned to strengthen 23
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our market share owing to our wide range of
economical-priced products. Inflation
Consumer Price Index - Furnishings & routine household maintenance
(1) Bank Indonesia
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New products launched in Q3
Key Product Segments Price Range
Premium 5 4 3 2 1 Economic
Avitex Avitex Avitex Avitex
Exterior Anti Viruz Gold Avitex Wizz
Wall
No Drop No Drop No Drop No Drop
Anti Panas Plus 3in1 No Drop Basic Bitumen
Waterproofing
Avian Avian Lem Avian Non
Lem Epoxy Epoxy Hemat Sag
Wood Care &
Glue
GML500 GM510 GM270 GM480 GM220 GM380
Instant Cement
▪ Our research, development, and innovation (RDI) division is dedicated to creating products
suitable for Indonesian consumers at every income level and tailored to the current market
conditions.
▪ In this quarter, we launched 5 new products across various categories. Avitex Wizz, No Drop
Basic, and Avian Lem Epoxy Hemat belong to the more economical-priced segments.
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Distribution centers expansion
Benefits from the
continued expansion
of distribution
centers:
▪ Improve product
penetration and
provide superior
quality of service.
▪ Enhance customer
relationships.
▪ Increase inventory
management and
minimize loss
opportunities.
▪ In Q3 2023, we opened 2 wholly-owned DCs, 1 new mini DC, and 3 third-party DCs.
Wholly owned DC ▪ We own and operate 607 delivery trucks that allow us to make ~10,300 deliveries per day.
logistics & delivery
fleet ▪ Streamline delivery processes by automating logistics for a lean & and efficient system.
▪ 96%(1) 1-day delivery service fulfilment.
(1) For retail outlets within 50 km radius from a wholly-owned DC 8
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Providing unmatched service quality
~2 hours ~50% lower 30,000+ 100+
Delivery time Delivery cost Retail outlets Distribution centres
The implementation of express delivery has been introduced to elevate various aspects of the business, including:
▪ Incentivize shops to sell more products without increasing stock, leading to profit improvements.
▪ Provide outstanding value to Avian Brands’ customers by offering the best and unmatched level of service.
▪ Improve efficiency by streamlining the delivery process and reducing fuel costs and surcharges.
▪ Maintain a competitive edge and stay ahead of the competition, opening an excellent way for Avian Brands to
stand out from its close competitors.
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Consolidated business – sales & customers
Q3 sales by value YTD Q3 sales by value Q3 number of customers YTD Q3 number of
(IDR billion) (IDR billion) customers
as % of total sales as % of total sales
23.6 ~24(1) 74.1 ~74(1)
54,573 55,101
5,164 49,561 49,593
1,656 4,958
1,579
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(1) Based on management estimation 10
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Consolidated business
YTD Q3 sales by segment YTD Q3 sales by customers
Trading goods Modern retail outlets
19% 7%
23% Wall
7% Other(1)
6%
Woodcare(2)
25%
Waterproofing
20% Wood &
Metal
Architectural solutions Traditional retail outlets
81% 93%
(1) Includes roof paint, instant cement, automotive refinish and others
(2) Includes woodcare and glue
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Consolidated business - margin
Gross margin – Q3 Gross margin – YTD Q3
42.1% 40.0% 44.2%
37.6% ▪ Gross margin for the
architectural solutions
segment improved in
Q3, compared to the
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same period last
year, supported by
EBITDA margin – Q3 EBITDA margin – YTD Q3 raw material
stabilization.
22.8% 24.8% 25.8% 27.6%
▪ The improvement in
gross margin has
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further led to the
improvement in
Net income margin – Q3 Net income margin – YTD Q3
EBITDA margin.
20.2% 21.8% 22.1%
19.2%
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Architectural solutions - sales
Q3 sales by value YTD Q3 sales by value Q3 sales by volume(2) YTD Q3 sales by volume(2)
(IDR billion) (IDR billion) (metric ton) (metric ton)
as % of total sales as % of total sales as % of total sales as % of total sales
22.8 ~23(1) 74.3 ~74(1) 22.2 ~23(1) 76.0 ~73(1)
4,180 122,411
1,292 3,999 119,918
1,230 37,955
35,727
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(1) Based on management estimation 13
(2) Excluding instant cement
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Architectural solutions - customers
Q3 number of customers YTD Q3 number of
customers
as % of total customers as % of total customers
89.7 91.3 89.7 91.1
45,285 48,967 50,191
44,448
Avian Brands customer gathering, Sukabumi
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Avian Brands customer gathering, Cianjur
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Trading goods – sales & customers
Q3 sales by value YTD Q3 sales by value Q3 number of customers YTD Q3 number of
(IDR billion) (IDR billion) customers
as % of total sales as % of total sales as % of the total customers as % of the total customers
26.6 ~27(1) 73.2 ~73(1) 75.8 75.7 83.5 82.9
364 959 984 45,571 45,694
349 37,583 37,566
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(1) Based on management estimation 15
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Gross margin
Architectural solutions - Q3 Architectural solutions – YTD Q3
49.1% 50.4% ▪ Gross margin for the
44.2% 45.2% architectural solutions
segment improved,
driven by the
stabilization of raw
material prices.
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Trading goods – Q3 Trading goods – YTD Q3
17.4% 18.1% 17.8%
▪ Gross margin for the
14.2% trading goods
segment remains
relatively stable in the
third quarter.
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Well-managed cost structure
Cost Breakdown (as % of sales)
2022 YTD Q3 2023 ▪ The company decided to be
more aggressive in marketing
G & A(1) 3.2% 3.2% activities and branding efforts in
order to strengthen its brand
Sales and marketing(1)(2) 15.3% 16.3% perception across the nation.
COGS(1) 59.4% 55.8% ▪ This led to a slight increase in sales
and marketing expenses.
Total 77.9% 75.3%
COGS Breakdown (as % of sales)
2022 YTD Q3 2023 ▪ Resin, packaging, and solvent are
linked to the oil price.
Raw material 32.0% 29.4%
▪ ~35% of raw materials are
Direct labour 1.1% 1.1% imported.
▪ As we are becoming more
Factory overhead 2.5% 2.5% aggressive with our promotional
activities, especially in support of
WIP and FG 15.7% 14.0%
new product innovations, we
BTL(3) marketing expenses 8.1% 8.9%(4) have observed a slight increase in
BTL marketing expenses.
Total 59.4% 55.8%
(1) Includes depreciation and amortization
(2) Includes salaries & benefits, freight, traveling, other selling expenses, and above-the-line (TV and digital) marketing expenses
(3) Below-the-line marketing expenses are promotions for customers in the form of gold coins, rebates, and others 17
(4) BTL for new products accounts for ~1%
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Escalating marketing activities to increase brand awareness
Indonesian celebrity sports tournament, Jakarta Homedec Expo, Tangerang
Avitex Gold painting competition, Jakarta Paint Expo, Yogyakarta
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Robust cash-flow generation & AR management
Trade working capital Free cash flow and On-time collection
(IDR billion) capex
(IDR billion)
as % of total sales
Covid + inflation
29.1 29.9 pressure + fuel Inflation
subsidy reduction pressure
1,099
2,059 90.4% 89.8%
1,947
877
953 1,042
494 468
1,074 1,165
191 158
-574 -616
22 YTD Q3 23 22 YTD Q3 23 22 H1 23
AR RM inventory
FCFF Capex
FG inventory AP
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Updates on the third factory in Cirebon
▪ The new manufacturing plant in Cirebon, which
2023 2024 2025 occupies an area of ~11 hectares of land, is currently in
the final stage of landfilling process.
▪ The manufacturing facility is expected to be
commissioned by 2025 with 225,000 tonnes per annum
Capex (IDR Bil)(1) ~160 ~450 ~140
capacity.
▪ We would use the latest manufacturing technology to
produce paints and intermediate raw materials in an
Capex (% of sales) ~2% ~5% ~2% environment-friendly manner.
(1) Excluding the company’s routine Capex 20
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Guidance for 2023
Adjustments on sales projection FY 2023:
▪ Value growth 8 - 12% 4% - 6%
▪ Volume growth 2 - 6% -1% - 1%
Planned actions in Q4:
▪ Product innovation remains an integral part of our business
to address the unmet and evolving consumer needs.
▪ Accelerate tinting machine deployment in retail outlets to
support our strategy of continuous product innovations.
▪ Expansion of distribution centres aimed to increase market
penetration and provide superior service to our customers
nationwide.
▪ Numerous improvements to internal processes and ESG in
pursuit of sustainable and long-term business growth.
▪ The company plans to conduct a share buyback, which will
require the approval of shareholders through EGMS,
scheduled to be held on 7 December 2023.
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