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20230731_AVIA_Laporan Informasi dan Fakta Material_31355559_lamp1.pdf
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PT Avia Avian Tbk
Investor Presentation
Q2 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 Q2 2023 snapshot
SALES GROSS PROFIT EBITDA NET PROFIT
IDR 1.7 T IDR 777 B IDR 495 B IDR 390 B
( US$ 116 m ) ( US$ 52 m ) ( US$ 33 m ) ( US$ 26 m )
45.0% 28.7% 22.6%
EMPLOYEES DISTRIBUTION COVERAGE CUSTOMERS
CENTERS
38 Provinces 56,000+
8,000+ 151 99 Cities Retail outlets
Convenience translation from IDR based on average IDR/USD exchange rate in Q2 2023 of 14,838 4
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Q2 financial performance highlights
In IDR billion Q2 2023 Q2 2022 Change ▪ Consolidated sales in Q2 were flat compared to
(except per share data) last year. There was a last bite for the
Consolidated sales 1,726 1,740 -0.8% architectural solutions segment last year.
▪ The trading goods segment performed better
Architectural solutions 1,397 1,428 -2.2%
than the architectural solutions segment, driven
Trading goods 330 312 5.6% by double-digit growth in the PVC pipe
category. Nevertheless, competition within the
Gross profit 777 718 8.2%
PVC pipe category remains intense.
Architectural solutions 718 659 8.9% ▪ Gross margin for the architectural solutions
Trading goods 59 59 -0.1% segment improved in Q2 supported by
stabilization of raw material prices.
Gross margin 45.0% 41.3% 3.7%
▪ In the trading goods segment, gross margin
Architectural solutions 51.4% 46.2% 5.2% continues to normalize since Q1 of this year.
Trading goods 17.9% 19.0% -1.0% ▪ The EBITDA margin improved driven by the
improvement in the gross margin.
EBITDA 495 460 7.7%
EBITDA margin 28.7% 26.4% 2.3%
Net income 390 392 -0.3%
Net income margin 22.6% 22.5% 0.1%
EPS 6.3 6.3 -0.3%
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Business update in Q2
▪ The inflation rate is declining for the first time Indonesia inflation rate & CPI(1)
since the beginning of 2022 and has touched the
4% mark. 5.6% 140.0
▪ Price inflation impacting consumers' purchasing
4.0%135.0
power is still evident in Q2, as shown by the high 4.6%
CPI for the furnishings & routine household
3.8%
130.0
maintenance category. 3.6%
▪ The increase in minimum wages in Indonesia is still 125.0
lagging behind the building material price 2.3%
inflation.
2.6% 120.0
115.1
▪ In addition, increasing layoffs have further 1.5% 111.8
115.0
weakened the purchasing power of consumers, 1.6%
especially those in the lower income brackets, as
107.0
110.0
shown by the increase in government 0.6%
105.3
unemployment insurance claims(2). 105.0
▪ The same weakness was seen in the consumer
goods and ceramic tile segments, where two Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
-0. 4% 100.0
FMCG companies reported sales declines of 12%
and 8%, respectively, and one ceramic tile 20 21 22 23
company reported a decline of 8%.
Inflation
Consumer Price Index - Furnishings & routine household maintenance
(1) Bank Indonesia
(2) Employees Social Security System (BPJS Ketenagakerjaan)
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New products launched in Q2
Marine Marine Wall
▪ Admiral Wood Filler Epoxy was ▪ Admiral Cat Kapal was launched ▪ Aries Bling was launched on May
launched on April 1, 2023. on May 1, 2023. 22, 2023.
▪ This is the first epoxy adhesive with ▪ This product has been formulated ▪ We introduced this product to
sawdust in Indonesia. to be highly resistant to seawater expand our product portfolio,
▪ More than 900 retail outlets and suitable for fishing boats. especially in the budget wall
participated in Q2 for this product. ▪ Around 500 retail outlets took part in category.
this product launch during Q2. ▪ In less than two months since its
launch, more than 4,000 retail
outlets have participated.
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Distribution centers expansion
Benefits from
continued expansion
of distribution
centers:
▪ Improve product
penetration and
provide superior
quality of service.
▪ Enhance customer
relationships.
▪ Increase inventory
management and
minimize loss
opportunity.
▪ In Q2 2023, we opened 1 wholly-owned DCs and 3 new mini DCs.
Wholly owned DC ▪ We own and operate 599 delivery trucks that allow us to make ~10,000 deliveries per day.
logistics & delivery
fleet ▪ Streamline delivery processes by automating logistics for a lean & efficient system.
▪ 95%(1) 1-day delivery service fulfilment.
(1) For retail outlets within 50 km radius from a wholly-owned DC 8
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Consolidated business segment - sales
Q2 sales by value H1 sales by value
(IDR billion) (IDR billion)
as % of total sales as % of total sales
24.6 22.6 21.1 26.0 ~23(1) 45.6 44.0 47.7 50.5 ~48(1)
1,740 1,726 3,508
3,379
3,234
1,395 1,433
1,296 2,585 2,522
19 20 21 22 23 19 20 21 22 23
(1) Based on management estimation 9
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Consolidated business segment - customers
Q2 number of customers H1 number of customers
52,736 53,045
50,769
49,591 49,168
47,220
43,938 47,374
41,261
44,255
19 20 21 22 23 19 20 21 22 23
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H1 sales split by regions
11.1% 12.0%
+24% +75% The rest of Indonesia
9.0% 6.9%
8.1%
Kalimantan Sulawesi +58%
5.1%
Sumatra
17.0%
-22%
21.8%
Java
51.8%
-9%
57.2%
▪ In Java (Jakarta region) and Sumatra islands (northern part), we are behind Indonesian GDP.
AVIA
▪ The island of Sumatra experienced headwinds from the downward trend in commodity prices.
GDP(1)
▪ In Kalimantan, Sulawesi and the rest of Indonesia, we are well ahead of Indonesian GDP.
(1) Berita Resmi Statistik – Pertumbuhan Ekonomi Indonesia Triwulan I 2023; management calculation 11
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Consolidated business segment
H1 sales by segment H1 sales by customers
Trading goods Modern retail outlets
17.7% 7.4%
1.8% Supporting
3.0% Furniture
Product(1)
12.9% Pipe 23.7% Wall
7.5% Other(2)
6.0%
Woodcare(3)
25.7%
19.5% Wood & Waterproofing
Metal
Architectural solutions Traditional retail outlets
82.3% 92.6%
(1) Includes paint-rollers, paint brushes, seal tape, sandpaper and others
(2) Includes roof paint, instant cement, automotive refinish and others
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(3) Includes woodcare and glue
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Consolidated business segment – margin
Quarterly Gross margin
41.7% 40.8% 41.3% 37.6% 42.4% 40.6% 45.3% 45.0%
FY 21 Q1 22 Q2 22 Q3 22 Q4 22 FY 22 Q1 23 Q2 23
Quarterly EBITDA margin
29.3% 27.9% 26.4% 24.9% 29.1% 28.7%
22.8% 22.3%
FY 21 Q1 22 Q2 22 Q3 22 Q4 22 FY 22 Q1 23 Q2 23
Quarterly Net income margin
21.2% 23.5% 22.5% 19.2% 20.9% 23.4% 22.6%
18.4%
FY 21 Q1 22 Q2 22 Q3 22 Q4 22 FY 22 Q1 23 Q2 23
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Architectural solutions segment - sales
Q2 sales by value H1 sales by value
(IDR billion) (IDR billion)
as % of total sales as % of total sales
25.8 23.3 21.2 26.5 ~24(1) 47.3 45.2 49.0 51.4 ~49(1)
2,888
1,428 1,397 2,769
2,599
1,159 1,123
1,052 2,128 2,035
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(1) Based on management estimation 14
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Architectural solutions segment - volume
Q2 sales by volume(2) H1 sales by volume(2)
(metric ton) (metric ton)
as % of total volume as % of total volume
26.5 23.6 21.9 28.0 ~24(1) 48.1 45.5 49.8 53.8 ~49(1)
45,322 45,050 91,805
86,684
39,492 40,417 39,571 82,152 81,963
76,094
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(1) Based on management estimation 15
(2) Excluding instant cement
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Architectural solutions segment - customers
Q2 number of customers H1 number of customers
as % of total number of customers as % of total number of customers
88.4 89.1 89.5 90.1 91.3 88.0 88.5 89.4 89.9 91.1
47,388 48,323
44,704 44,872 45,397
42,272 41,917
39,170 38,929
36,487
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Trading goods segment - sales
Q2 sales by value H1 sales by value
(IDR billion) (IDR billion)
as % of total sales as % of total sales
20.1 20.0 21.0 23.8 ~23(1) 38.9 39.7 43.1 46.6 ~43(1)
635 620
330 610
310 312
487
245 456
236
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(1) Based on management estimation 17
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Trading goods segment - customers
Q2 number of customers H1 number of customers
as % of total number of customers as % of total number of customers
71.2 73.7 72.6 73.4 73.3 78.9 80.2 79.6 80.5 80.3
42,474 42,600
36,396 36,041 40,409
34,298 38,015
32,367 34,904
29,372
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Quarterly gross margin
Architectural solutions segment
2%-3%(1)
Price increase
▪ Gross margin
3x 3%-8% 3%-5% 3%-5% 3%-5% (7 May) continues to improve
Price increase Price increase Price increase Price increase Price increase
due to stabilization of
(1 March) (1 May) (1 July) (1 Nov)
50.6% 51.4%
raw material prices.
47.8% 47.7%
45.1% 46.2% 46.3% ▪ In May, another price
44.2% hike took place only
in the solvent-based
products category.
FY 21 Q1 22 Q2 22 Q3 22 Q4 22 FY 22 Q1 23 Q2 23
Trading goods segment
10% 10% 10% - 15%
Price increase Price increase Additional discount ▪ Gross margin for the
PVC Pipe PVC Pipe PVC Pipe
(16 October) (1 January) (16 August) trading goods
21.6% segment resumes to
19.5% 19.0% 17.3% 18.1% 17.9% normal level as there
14.2% 15.2%
are no further price
adjustments.
FY 21 Q1 22 Q2 22 Q3 22 Q4 22 FY 22 Q1 23 Q2 23
(1) Specifically for solvent-based products 19
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Well-managed cost structure
Cost Breakdown (as % of sales)
2019 2020 2021 2022 1H 23
G & A(1) 3.5% 2.8% 2.7% 3.2% 3.2% ▪ The decline in COGS
as a % of sales was
Sales & Marketing(1)(2) 15.8% 16.0% 13.1% 15.3% 15.6% attributable to the
raw material
COGS(1) 58.6% 56.1% 58.3% 59.4% 54.8% stabilization.
Total 77.9% 74.9% 74.1% 77.9% 73.7%
COGS Breakdown (as % of sales)
2019 2020 2021 2022 1H 23
Raw material 30.4% 26.6% 33.9% 32.0% 30.9% ▪ Direct labour and
factory overhead
Direct labour 1.1% 1.2% 1.1% 1.1% 1.0% costs are quite
stable.
Factory overhead 2.2% 2.4% 2.4% 2.5% 2.4%
▪ BTL marketing
WIP and FG 18.2% 18.9% 14.5% 15.7% 12.2% expenses increased
slightly due to new
BTL(3) marketing expenses 6.7% 7.0% 6.4% 8.1% 8.4%(4) product launches.
Total 58.6% 56.1% 58.3% 59.4% 54.8%
(1) Includes depreciation and amortization
(2) Includes salaries & benefit, freight, traveling, other selling expenses and above the line marketing expenses
(3) Below the line marketing expenses are promotions for customers in the form of gold coins, rebates, and others 20
(4) BTL for existing products dropped to ~7%. BTL for new products account for ~1%
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Robust cash-flow generation
Trade working capital Free cash flow and capex
(IDR billion) (IDR billion)
as % of total sales
29.9 26.5 27.2 29.1 27.0
1,306
1,844 1,947 1,893 1,123 1,099
1,694 1,519
927 953 1,005
789 793 764
719
520 494 429
360 288
1,001 1,166 1,074 1,207
938
-392 167 191
-489 -574 149 141
-769 -748 104
19 20 21 22 H1 23 19 20 21 22 H1 23
Account receivables Raw materials inventory FCFF Capex
Finished goods inventory Account payables
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Management of account receivable
▪ We saw a slight decline in on-time collection in the first On-time collection
quarter, which we consider reasonable given the
business dynamics in Indonesia, where many retail
outlets are facing weaker market demand. Election year Covid Covid Covid + inflation Inflation
pressure + fuel pressure
▪ Nonetheless, we maintain our strategy of fostering subsidy reduction
high-quality relationships with customers across the
country. We believe that the priority given to us by
88.7% 89.9% 90.6% 90.4% 88.5%
retail outlets in terms of payment remains.
19 20 21 22 Q1 23
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Guidance for 2023
Sales projection FY 2023:
▪ Value growth 8 – 12%.
▪ Volume growth 2 - 6%.
Planned actions in Q3 and Q4:
▪ Innovation remains a key strategy to drive new product
launches and ensure long-term viability.
▪ Expansion of distribution centres will continue to increase
market penetration.
▪ Increasing the contribution of the project division as well as
other subsidiaries.
▪ Multiple internal operational and ESG improvements for
sustainable, long-term growth.
▪ Given our market-leading position and various strategies
that will be deployed in the second half of the year, we
remain cautious but optimistic. Weaker consumer demand
continues to be the biggest headwind for our business.
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