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Company Presentation for 1H2024 Results
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Materi dalam presentasi ini telah disiapkan oleh PT Steel Pipe Industry Indonesia Tbk (“Spindo”) dan merupakan informasi bersifat umum
tentang kinerja bisnis Spindo terkini pada tanggal presentasi dan dapat berubah tanpa pemberitahuan sebelumnya. Informasi ini diberikan
dalam bentuk ringkasan dan tidak dimaksudkan untuk dianggap sebagai laporan lengkap. Informasi dalam presentasi ini, termasuk perkiraan
informasi keuangan, tidak boleh dianggap sebagai saran atau rekomendasi kepada investor atau calon investor sehubungan dengan
keputusan memegang, membeli atau menjual sekuritas atau produk atau instrumen keuangan lainnya dan tidak mempertimbangkan tujuan
investasi khusus, situasi atau kebutuhan keuangan. Sebelum bertindak berdasarkan informasi apa pun, pembaca harus mempertimbangkan
kesesuaian informasi yang berkaitan dengan hal-hal ini, dokumen penawaran yang relevan dan khususnya, pembaca harus mencari nasihat
keuangan independen. Presentasi ini dapat berisi pernyataan berwawasan ke depan termasuk pernyataan mengenai niat, keyakinan, atau
harapan kami saat ini sehubungan dengan bisnis dan operasi Spindo, kondisi pasar, hasil operasi dan kondisi keuangan, kecukupan modal,
ketentuan khusus, dan praktik manajemen risiko. Pembaca diperingatkan untuk tidak menempatkan kepercayaan yang tidak semestinya
pada pernyataan berwawasan ke depan ini; kinerja masa lalu bukan merupakan indikasi kinerja masa depan yang dapat diandalkan. Spindo
tidak memiliki kewajiban apa pun untuk secara terbuka merilis hasil dari setiap revisi terhadap pernyataan berwawasan ke depan ini untuk
mencerminkan peristiwa atau keadaan setelah tanggal pernyataan ini untuk mencerminkan terjadinya peristiwa yang tidak terduga. Kami
melepaskan tanggung jawab atau kewajiban apa pun yang timbul yang dapat ditanggung atau diderita oleh siapa pun sebagai akibat dari
bertindak berdasarkan kepercayaan pada seluruh atau sebagian dari isi laporan ini dan Spindo dan / atau perusahaan afiliasinya dan / atau
masing-masing karyawan dan / atau agen tidak menerima tanggung jawab atas kesalahan, kelalaian atau sebaliknya, dalam laporan ini dan
ketidakakuratan apa pun di sini atau kekurangan di sini yang mungkin terjadi
The materials in this presentation have been prepared by PT Steel Pipe Industry of Indonesia Tbk (“Spindo”) and are general background
information about Spindo business performances current as at the date of this presentation and are subject to change without prior notice.
This information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial
information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or
selling securities or other financial products or instruments and does not consider their particular investment objectives, financial situation or
needs. Before acting on any information, readers should consider the appropriateness of the information having regard to these matters, any
relevant offer document and, readers should seek independent financial advice. This presentation may contain forward looking statements
including statements regarding our intent, belief or current expectations with respect to Spindo businesses and operations, market conditions,
results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not
to place undue reliance on these forward-looking statements; past performance is not a reliable indication of future performance. Spindo does
not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof to reflect the occurrence of unanticipated events. We disclaim any responsibility or liability whatsoever
arising which may be brought or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this
report and neither Spindo and/or its affiliated companies and/or their respective employees and/or agents accepts liability for any errors,
omissions, negligent or otherwise, in this report and any inaccuracy herein or omission here from which might otherwise arise.
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PT Steel Pipe Industry Indonesia Tbk
("SPINDO"/"the Company") is
engaged in the manufacturing of steel
pipes.
The Company has been operating since
1971 in Surabaya and continues to grow
to this day..
Resource Vision Mission
Over 1000 employees Improving o Supporting the vision with
and 6 production units Quality of Life continuous improvement.
o Quality products.
o Market diversification.
The types of quality products produced by the Company Didukung dengan sertifikasi internasional
include:
ISO TS Quality Management
Automotive Pipe in Karawang
Occupational Health and Safety
Management
Stainless
Carbon Steel Pipe Strip & Plate Services*
Steel Pipe ISO 14001 International
Standard for Environmental
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*Services including Coating, Shearing, Slitting dan Material Lab Testing
Management System
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Pekanbaru
Representative Samarinda Makassar PT Cakra Bhakti
Office Public *
Warehouse Warehouse Para Putra (CBPP)
55.9% 44.1%
90.0%
Spindo Karawang 50.0%
Production Unit 5 PT SPINDO
PT Sanko Steel
Engineering
Indonesia
Industry
Spindo Surabaya
Bandung/ *includes treasury shares of 1.68% &
West Jakarta Production Unit 1, 2, 3
Pemberton Asia Opportunities Fund of
Warehouse
Spindo Sidoarjo 6.96%
Production Unit 6
Jakarta Spindo Pasuruan
Representative Office Production Unit 4
Semarang Surabaya
Representative Office Warehouse
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Educational Background
Educational Background
He completed his education at the Faculty of Economics,
Parahyangan Catholic University, Bandung in 1985 and obtained a Graduated in June 1999 from Duke University School of Law,
Masters of Management from the Prasetya Mulya Business School in J.D., with honor Durham, North Carolina, USA
1992. Graduated in June 1996 from Harvard University,
Mathematics, with honor Cambridge, Massachusetts, USA
Professional Experience Professional Experience
His previous positions includes : 2004 – 2009, President Director of Welly Tantono is the Group General Counsel at Secretlab,
Makmur Widjaja PT Makinta Securities; 2000 – 2004 Managing Director of PT Makinta leading gaming chair maker for professional esports teams.
Welly Tantono
President Securities; 1994 – 1999, Corporate Finance Director of PT Bhakti Legal Career is a former IP litigator at top New York and
Commissioner Independent
Investama, Tbk., an Indonesian investment company; 1992 – 1994, California law firms, handling high-stakes cases.
(Independent Commissioner
Head of Corporate Finance of PT. Bali Securities.
Commissioner) She transitioned to tech and healthcare sectors and is well-
Educational Background versed in capital markets and cross-border ventures and has
Bachelor of Mechanical Engineering fromi University of held senior roles in Singapore and the US as a co-founder of
Massachusetts, USA in 1996 Singapore's early healthcare cooperative.
Professional Experience She graduated with honors from both Harvard as well as
Duke University and is the past president of the Association
1997 – 1998 : MEP Program Mattel Indonesia of Corporate Counsel, Singapore Chapter and Member of
1998 – 1999 : System Engineer Ericsson Indonesia Legal Subcommittee to Fencing Singapore.
1999 – 2000 : Trader for Myanmar and Singapore Market at Itochu
Her current appointment is as Lecturer at National University
Entario Widjaja Susanto Steel Asia of Singapore's School of Computing.
Commissioner 2000 – 2005 : Marketing Manager PT Saranacentral Bajatama Tbk
2005 – Sekarang : Director PT Saranacentral Bajatama Tbk
Educational Background
Bachelor of Economics from Airlangga University, Surabaya in
1984
Attended a professional business course by Arthur Andersen in St.
Charles, Chicago, USA and became a member of The Indonesian
Institute of Accountants.
Professional Experience
Bing H. Poernomosidi
Independent Commissioner Officiate as Member of Audit Committee in PT Steel Pipe Industry
1
of Indonesia Tbk (2012 – 2022)
Independent Commissioner in PT SekarLaut Tbk 2007 – 2019
Managing Partner (Surabaya Office) of Ernst & Young, Hanadi,
Sarwoko & Sandjaja (2002 – 2006) 6 6
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Educational Background Educational Background
He completed his high school education in 1961.. He earned a master’s degree from Institut Teknologi Sepuluh
Professional Experience November in 2006
Previously, he worked for PT Radjin from 1972 to 1997 as Professional Experience
a President Director, which merged with PT SPINDO, Tbk. he started his career in steel industry since 2003 as OT Production
in 1998 Unit 2 and the latest as Operational Deputy Director in 2023
Ibnu Susanto Nico Gunawan
President Director
Director
Educational Background
Educational Background He earned a Bachelor of Engineering and Industrial Management
He graduated from Waseda University, Japan in 1989, at the University of 17 Agustus 1945 Surabaya in 1990, previously
majoring in Electronic Communication. he also completed his Diploma III in Statistics at the Sepuluh
Nopember Institute of Technology Surabaya in 1987.
Professional Experience
Professional Experience
Previously, he worked for PT Radjin from 1993 until 1998
as director. 1992 – 1999 MIS Manager PT. Pelayaran Nusantara Meratus
The Hanny 1999 – 2001 MIS Manager PT. Steel Pipe Industry of Indonesia
Purnomo 2001 – 2008 Senior Manager MIS PT. Steel Pipe Industry of
Tedja Sukmana Hudianto Indonesia
Director
Vice President 2009 – 2016 Senior Manager SAP PT. Steel Pipe Industry of
Director Indonesia Tbk
Educational Background 2016 – 2018 Deputy General Manager SAP PT. Steel Pipe
Industry of Indonesia Tbk
He completed his high school education in 1964
Professional Experience
Previously, he held the position as Commissioner of PT
Radjin since 1972 until 1997, which merged with our
company in 1998. From 2002 until 2011, he held the
position as Director of PT Saranacentral Bajatama, Tbk., an
Indonesian steel manufacturer.
Soediarto Soerjoprahono
Director
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Our Products
Spiral pipes (non Black pipes (non
API) Water pipes API)
Carbon steel Cutting, Steel pipe Construction, Electric and Utility Strips + plates
poles
and stainless Infrastructure, and
bending, and products Utilities
steel coils welding
Main products Mechanical tubes of various shapes
Black pipe (API & non-API), water pipes,
HFW High Frequency mechanical pipes, furniture pipes, steel
Welding
poles
Automotive
Furniture pipes Stainless steel pipes
SSAW Spiral Submerged Spiral pipes
Arc Welding (API & non-API)
Furniture
Tungsten Inert Industrial and ornament stainless steel
TIG
Gas Welding pipes Spiral pipes Black pipes
(API) (API)
4
4
Galvanizing, shearing, slitting, QAQC Oil & Gas
Service tests
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Distribution Channel
More than
2,000 – Approx.
5,000 3,000 Active End-users
70%
Customers Registered Customers
Approx.
Distributors
30%
Selected Key-Customers
Construction,
Infrastructure, and Furniture Pipe Automotive Pipe Oil & Gas Pipe
Utilities Pipe
64% 17% 17% 2%
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Flexibility to import raw
National Steel Pipe Market Implementation of Quality
materials from the global ESG Initiatives
Leader Operations
steel market
• Quality pipe manufacturing with • Implementing an Environmental • Global Steel Market Access for • Implementation of GCG
the latest technology. Management System in Raw Materials Practices
accordance with ISO
• Export of certified fire protection • Differentiation from Competitors • Routine CSR Activities and
14001:2015
systems to the US and Canada. Relying on Local HRC Other Social Initiatives
• Ensuring Occupational Health Producers
• High-quality thick-walled
and Safety Practices in
seamless stainless steel pipes. • Leveraging Scale for Structural
compliance with ISO
Cost Advantages
• 'Blow Galvanize' technology for 45001:2018
uniform coating and superior
quality.
• Galvanized pipes with
enhanced tensile strength and
elongation.
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Standing Out Amid Competition Across Sectors Largest Pipe Manufacturer in Indonesia by Revenue
• SPINDO's primary competitors include PT
6256
6455
5379
Krakatau Pipe Industries (KPI) – a subsidiary of
4886
PT Krakatau Steel (Persero) Tbk, and PT Bakrie
4468
Pipe – a subsidiary of PT Bakrie Brothers Tbk.
3759
3626
3776
3663
3340
3235
• Uniquely, SPINDO competes across all sectors,
2459
2454
2393
unlike other competitors who typically
1511
1384
1378
concentrate on one or two sectors.
1202
989
922
769
2017 2018 2019 2020 2021 2022 2023
SPINDO Bakrie Group Krakatau Steel Group
Construction, Oil and Gas
Furniture Automotive
Infrastructure, Utilities (API Standard)
Strong
Weak
Industries
SPINDO
Manufacturers
SPINDO
Manufacturers
SPINDO
Manufacturers
SPINDO
Manufacturers
Industries
Other Smaller
Other Smaller
Industries
Other Smaller
Industries
Other Smaller
Krakatau Pipe
Krakatau Pipe
Krakatau Pipe
Krakatau Pipe
Bakrie Pipe
Bakrie Pipe
Bakrie Pipe
Bakrie Pipe
ISTW
Manufacturers
Note :
Figure in Table 1 is obtained from respective companies Annual Report as of 06/06/2023 BNBR.IJ and KRAS.IJ have not submitted their annual report (delayed)
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Company estimates
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Demand Normalizing
2nd Quarter of 2024 saw a recovery in demand. Sales volume was growing 5.8% QoQ dan 8.13% YoY. Sales Value was
up only 3.65% QoQ and 4.62% YoY due to adjustment in ASP as global steel price decrease. Overall, however, 1st Half
total sales was 9.7% lower than 1H2023 mostly due to adjustement in ASP.
In the 2nd Quarter of 2024, we saw increase in demand of steel pipe as compared to 1Q2024, as Indonesia safely and
smoothly conducted presidential election only in 1 round. Some people still wait and see until MK confirmed the winner on
22 April 2024.
Global Steel Price is under Pressure
During 1H2024 global steel price was in downtrend. In beginning of 2024, China HRC Steel Price was almost reaching
USD 600 per Ton FOB. However, at the end of 1H2024, the price was c. USD521 per Ton FOB (Data from www.lme.com)
currently, the indicated price is even lower at USD495 per Ton. The price decline was largely because of the laggard
China recovery and intense India steel mill production (+7.4% YoY). Although China steel production down -1.1% YoY,
otal Global steel production was up 0.5%
Margins is inline with Projection
Due to strong demand and ability to quickly average down inventory pricing, we able to expand Gross Profit Margin.
Additionally, due to efficiency effort and successful improvement on capital structure, we able to reduce Financial
Expenses c. 18% YoY. The saving on financial cost further expand Net Profit margin to 7.5% (vs 6.6% in 1H2023)this
improvement makes our Net profit projection is inline with our projection for FY2024
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Continued Margin Improvement
As the result of persistent selling and optimal purchasing strategy, we managed to continue margin expansion trend.
Currently our GPM was 17.6% which is higher than 1H2023 at 15.1% and FY 2023 at 16.5%. With historically
stronger 2H performance, we believe we can further improve our GPM and NPM exceeding our target GPM and
NPM of 17% and 8% respectively for FY2024
Profitability Margin Boosted by Operational Efficiency
With the reduced leverage, ISSP manage to reduce also its financing cost by -22.8% (QoQ) or 18.4% (YoY) this also
support net margin expansion to 7.5% which inline with our FY 2024 target
Revenue and Margin 2018 - 2025F Profitability Margin 2018-2025F
9,000 8,500
1,600.0
8,000
7,300
1,400.0
7,000 20.8%
6,455.3
6,256
1,200.0 17.6% 17.0% 17.5%
6,000 16.5%
5,379 14.8%
4,886 1,000.0 14.1%
5,000 12.1%
4,468 11.9%
3,776 800.0 9.1% 8.5%
4,000 722.5 7.7% 7.5% 8.0%
498.1 2,796.8 584.0 600.0 4.7% 4.9%
3,000 486.8 3.8%
400.0 1.1%
2,000
185.7 305.8
1,000 209.6 200.0 2018 2019 2020 2021 2022 2023 1H2024 2024F 2025F
48.7 175.9
0 0.0 Net Profit Margin Gross Profit Margin
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2018 2019 2020 2021 2022 2023 1H2024 2024F 2025F
Revenue Net Profit
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Liquidity & Leverage Ratios Focusing on Working Capital and Liquidity
233% • The Current Ratio continue to improve to 233%, while
215% the DER improved at 59%, effectively REDUCING
203%
DEBT Ratio
151% 141% 139%
160% 168%
• The Quick Ratio fluctuates due to the opportunistic use
of cash to lower interest expenses.
123%
107%
82% 87% 79% 73% 67% 59%
54% 62%
39% 39% 45% 48%
35% 37%
2018 2019 2020 2021 2022 2023 1Q2024 1H2024
Current Ratio Quick Ratio Debt Equity Ratio
Enhancing Financial Position
Debt, Interest & EBITDA • Pefindo Upgrade credit rating to A in November
2023
8.1 • The company aims to improve its solvency ratio to
6.2 achieve a domestic A+ (Single A plus) rating within
5.4 5.5 year 2025/2026.
4.6 4.6
•
4.2
3.5 3.4 3.4 Attaining a better rating is expected to result in
2.3 2.1 reduced costs of funds and adjustments to maturity
1.7 3.5
terms.
• The primary focus is on enhancing the financial
2018 2019 2020 2021 2022 2023 1H2024 position and creditworthiness
DEBT to EBITDA Ratio (x) EBITDA to Interest (x) . 15
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Diversifying and Balancing the funding sources
• In July 2024 We successfully placed IDR 1 Trillion bonds, with 3, 5 an 7 years tenor. Effectively lengthening the duration of
liabilities, and improve our cash flow structure. The Bonds bear coupon of 7%, 7,35% and 7,35% respectively. As of 30 July
2024, 10years Indonesia Govt Bond Yield was 6,948%
• Along with reduced refinancing risk, minimized cost of fund risk with fixed coupon instrument issuance, and consistent
reduction in overall debt as result of continuous inventory as well as collection management system, we confident can
obtain better rating in the near future.
Funding Composition LT/ST Composition (%)
(in IDR Billions) 100%
Funding Source
90% 20% Diversification (%)
26% 28%
80% 42% 100%
999.3 70% 55%
782.9 549.4 654.5 856.0 80%
835.2 1,356.4 60%
578.9 60%
1,703.7 50%
40% 80% 40%
74% 72%
2,579.4 2,542.9 2,760.7 2,606.9 2,497.4 30% 58%
2,162.3 2,152.8 20%
1,893.7 20% 45%
1,418.7
10% 0%
0% 2020 2021 2022 2023 2024F
2018 2019 2020 2021 2022 2023 1H2024 2024F 2025F
Bank Loans Finance Leases Capital Market
ST Debt LT Debt
ST Debt LT Debt 16
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• Continuing the trend, in 1H2024 ISSP booked (+)
Cash Flow from operation reaching c. IDR 805
Billion. Conservatively the cash is used to reduce
ISSP Leverage.
• However, it is needed to note, that previous year
limited or even negative cashflow is sometimes due
to early repayment of LC liabilities. This is done in
order to save some interest expense
• We do hope that this continuous and consistent
improvement in Cash Flow from Operation activity
can address our investor’s concern.
.
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ROE & ROA Capital Efficiency to Improve ROA/ROE
12.9%
• Temporary slightly reduced ROA and ROE is due to
10.8% the seasonality factors in annualization ratio
8.9% calculation
6.9%
7.4%
6.2%
• With the reduction of Inventory level as demand
6.0% normalize in 2H2024, we believe we can achieve
5.0% 5.4%
4.1% desired ROE and ROA as per company target
2.9% 2.8%
1.7%
0.8%
2018 2019 2020 2021 2022 2023 1H2024
ROE ROA
Dividend Yield Resumption of Annual Dividends
5.30%
• The company is distributing 2024 dividen today of
IDR15/share, reflecting c.21% DPR and 5.35% Div
Yield..
• The absence of dividends in 2018 - 2020 was due
3.3% to the company undergoing a turnaround and
facing COVID-19 issues.
2.3%
1.9% • The disbursement of dividends will adhere to
prevailing regulations and consider upcoming
0.7% macroeconomic developments.
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2017 2018 2019 2020 2021 2022 2023 1H2024
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Highly Diversified Product Mix (1H2024)
Increased sales of API and Stainless Steel Pipe
• API products recorded 60% sales increase YoY.this confirms Black Pipes (non API) 19.1%
company strategy to invest in bigger diameter pipe machine Spiral Pipes (non API) 18.7%
to cater more API demand is effective Mechanical Pipes 16.5%
• With new investment of new stainless steel pipe up to 8 Inch, Water Pipes 12.9%
the stainless steel pipe sales increased 32% YoY. The Furniture Pipes 10.4%
management confident that with the presense of Tsingshan in Strips and Plates 7.1%
Morowali as one of world prominent stainless steel upstream Stainless Pipes 6.1%
player, Spindo can benefit and push its stainless steel
Black Pipes (API) 5.2%
products and services.
Poles 3.6%
• We also add our plate cutting capability, and now able to cut Service & Others 0.4%
(shearing) stainless steel plate up to 12mm Spiral Pipes (API) 0.0%
• Construction, infrastructure, and utilities pipes remain the
backbone of our product mix.
2018 2019 2020 2021 2022 2023 1H2024
Oil & Gas 0% 0% 0% 1% 3% 2% 4%
Furniture 14% 16% 19% 18% 18% 17% 20%
Automotive 19% 19% 17% 16% 17% 17% 18%
Construction,
67% 65% 64% 65% 62% 64% 58%
Infrastructure & Utilities
Total Sales Vol (000 Ton) 341.3 375.4 302.4 302.8 325.3 364.5 157.4 19
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Flexible Raw Material Sourcing is a Key Top Suppliers
Competitive Advantage 1Q2023 (inside) and 1Q2024 (outside)
• During this quarter, the company took advantage of 1.40% 4.30%
price decreases from offshore suppliers while
balancing purchases from local suppliers to shorten 0.50%
delivery times and secure raw materials for projects. 1.50%
4%
• As the global steel price is currently experiencing a
decreasing trend, the company plans to exercise 0.0%
more prudent purchasing strategies. 23%
3.1% 9.7%
3.6%
24.3%
JFE 24.5%
Purchase of Materials Tsinghan
Baowu Group
KS 30.8%
45%
70.8%
Posco
AM/NS 65.20%
Nippon Steel
55%
Others
29.2%
1H2024 1H2023 20
20
Local Import
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Local & Import HRC Price VS our Black Pipe ASP
20,000
18,000
16640
16,000
14,000
12,000
11000
10,000
9396
8,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2022 2023 2024
Black Pipe Sales Price (in IDR/kg) HRC Steel: Import (in IDR/kg) HRC Steel: Local (in IDR/kg)
Source : www.lme.com, company calculation
Reduced Volatility
Although global steel price is generally still on the downtrend, the volatility has been significantly reduced. Multiple
factors affecting global steel price remain weak, such as China economy growth, cooling down of economy in US due 21
to imposed high interest rate, war in global main shipping line, and supply chain disruption.
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Spindo is targeting to reach 500,000 Ton sales by 2025
2022 2023 2024 2025
8” Stainless Steel Pipe
NEW MAJOR
PRODUCT LINE Up to 2.5 inch API Pipe
Big Diameter Carbon Steel Pipe
New Export Opportunity,
SALES & Depo +2 further increase to Oil and
MARKETING Gas Sector
Establish Rep Office in Ind. Major Cities
HUMAN
Major Improvement in HR Aspect
RESOURCES
Relocation of Unit 1,2,3,4 to Factory
Improve Inventory & SCM
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OPERATIONAL
Transformation to 4.0 Industry
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New Product Development
• Enhancing Stainless Steel Pipe Capability: Now up to 8 inches
unlike any other steel pipe that decline in 1Q2024, Stainless Steel piep able to increase its sales tonnage. This shows a strong
market of which ISSP need to exploit fully.
• ERW Pipe Expansion: Big Diameter ERW pipe, 5,000 - 20,000 tons monthly sales projected in 2026 (up to 75% additional
monthly sales vs 2023)
Unit VII will also be equipped with large diameter machine, enabling us to produce new product lineup that is previously
supplied by our competitor. This new large diameter products are mainly used by Oil and Gas Industry, as well as construction
and export market
Issuance of Sustainability Bonds which is guaranteed by CGIF/ADB
• As part of its Sustainability financing strategy, and also to demonstrate ISSP commitment to Sustainability theme, we will issue
Sustainability Linked Bonds, in accordance to POJK 18/2023. this combination is mainly aimed to reduce cost of fund and
further stretch our financing and therefore minimizing refinancing risks. The issuance is targeted to be up to IDR 1 Trillion with
AAA Rating
Continuation of our turnaround strategies
• As we see that current stategy is effective to improve branding and increase sales, we will continue and more intensely
approach our end users. This approach will also make way for new users previously using seamless pipe, and other non-
standard pipes
• Accelerating process to reach industry 4.0 which provide more efficiencies and competitive advantages
Actively pursuing our Vision : Improving quality of life
• Spindo will put more attention to its Inclusivity, Diversity and Equality issues in 2024. this year we will launch a focused thematic
CSR such as providing clean water for people in remote areas, provide vacancy for certain disability, and better equality in
ISSP. 24
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Unit 7 Progress - Warehouse
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Several region reporting better growth • Eventhough US Inflation rate is still above Fed target, but the decline of inflation rate since march 2024 provide hope for Fed rate cut before this year end. • US PPI also show a healthy growth of 2.5% showing that there is still purchase power albeit sustained high inflationary period. • US Jobless claim also fell below excpectation, although it is still above its annual average. US labor market is still historically tight, but it has softened since its post-pandemic peak • EU Area is able to maintain low inflation rate at 2.6% • While the PPI change is still in negative zone, but the number is reduced, showing some ability to pass on the price increase to the customer as compared to March 2024 Majority of the global economist have more optimistic view • According to WEF Chief Economic outlook in May 2024, Uncertainty persists, but signs of brightening are reflected in the latest survey, with a sharp fall in the share of chief economists expecting global conditions to weaken this year, from 56% in January to 17% • The most notable uptick is expected in the US, with the share of respondents expecting moderate or stronger growth in 2024 rising to 97% from 59% in January
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ADD A FOOTER 28
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Geopolitic is the main source of Uncertainty • Still from WEF Chief Economist outlook, There is near unanimity among respondents (97%) that geopolitics will be a source of global economic volatility in the remainder of 2024 • With almost half of the world’s population heading to the polls this year, a large majority (83%) also expect domestic politics to be a source of volatility China Economy growth is still sluggish • The Chinese economy expanded 4.7% yoy in Q2 of 2024, missing market forecasts of 5.1% and slowing from a 5.3% growth in Q1 • Goldman cut its 2024 GDP growth estimate from 5 per cent to 4.9 per cent, while JPMorgan slashed its forecast from 5.2 per cent to 4.7 per cent. Oxford Economics said its full-year target had been lowered to 4.8 per cent, “a mild undershoot of the official growth target”
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Global steel price is still in downtrend • Mostly due to oversupply and China laggard economy growth. Approx. 75% of global steel mills are blast furnace that is very difficult (or impossible) to lower its production rate, due to uts construction Meanwhile, the raw material for steel is in relatively stable pricing. This condition makes things are very hard for upstream player, as the profit is diminishing fast Indonesia is still providing strong demand Indonesia Steel Consumption is still very low at 60 Kg per kapita. This condition provide opportunity amidst global slow economi growth. Recently in upstream sector establish 3 new steel mills, namely Lautan Steel, New Asia Steel and Dexin carbon steel. ADD A FOOTER 30
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5
Page 32
Solar Panel Installation in Plant IV & VI
Accumulated Cost Saving for 25 Years
PLN Tariff Discount for 25 Years* IDR 8-25 Billion
12-18% Accumulated CO2 Reduction in 25
Years
*PLN Tariff assumption 6% CAGR growth
7,536-16,658 tons
Immediate Solar Panel Installation in
Plant I, III & V
Implementation of GCG Practices
Code of Conduct
Regular CSR activity and Other Social
Vendor Code of Conduct
Initiatives
Whistleblowing mechanism
Empowering the employment of the local community
Audit Committee
Establishing a Training Centre
KP5 Committee
Published the Sustainability Report 2020
Board Manual
32
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Acceleration on ESG Initiatives In 2024, Spindo accelerate its action towards ESG initiatives. Such acceleration implemented in the Operation Team KPI, where all departments have target to reduce 10% carbon footprint of Scope 1 and 2. Spindo also initiate additional CSR activity to support Global Sustainability Development Goals, especially goal 6 that is providing fresh water for people with difficult access. This CSR is targeted to be launch on August 2024 Issuance of Spindo Sustainability Linked Bond 1 year 2024 With the issuance of SLB, Spindo also committed to generate more renewable energy by install more solar panels in our factories. With the target set conservatively at 35% increase in 7 years, we believe that we can achieve more. The planning of implementation are as follows : ADD A FOOTER 33
Page 34
ESG related Projects supplied with our products
Potable Water distribution, Fiber optic poles, Data centre
construction, Hydropower, Waste Treatments, Geothermal Projects,
Bridges & Ports in remote areas
Estimated Sales Value Annually : Approx. >IDR 2,5 Trillion
EV (Electric Cars & Motorcycles)
Estimated Sales Value Annually : Approx. >IDR 2,5 Trillion
Electric Bus Caroserie, Green House Construction,
Agriculture Piping, Bicycle Frame, Solar Panel Frame
Estimated Sales Value Annually : Approx. IDR 200 Billion
Natural Gas house distribution
Estimated Sales Value Annually : Approx. IDR 100 billion
34
34
Page 35
6
Page 36
Despite Challenges, SPINDO's Successful Outcomes Indicate a Strategic Trajectory
▪ Expansion of Sales Force
▪ Diversification of Funding Sources
▪ Marketing strategies targeting end-users and technical consultants
▪ Evaluation and enhancement of HR practices
▪ Improvement in operational aspects with an emphasis on IT-assisted processes
▪ Concentration on Green Manufacturing processes
Amid Global Uncertainty, Indonesia's Commodity-Based Economy Offers Relative Stability
▪ Despite global uncertainty, we believe Indonesia is relatively well-positioned due to its commodity-based economy.
▪ The threat of interest rate hikes and inflation persists, posing risks to domestic purchasing power.
▪ A more conservative approach is warranted to strengthen financial posture, in anticipation of potential economic downturns.
In light of the opportunities and challenges previously mentioned, our goal remains to attain a 10-20%
increase in sales volume and Net Profit compared to Fiscal Year 2023.
We are conservatively targeting Gross Margin and Net Margin at 17% and 8%, respectively.
36
36
Page 37
7
Page 38
Logistics Infrastructure Oil and Gas Machinery Proyek Lewoleba 2024 JAB Bendungan Paselloreng – Wajo Coal Crushing System Dan Loading Proyek REO 2024 Project Timor Leste Terminal di Tanah Grogot Proyek Ba’a 2024 Project Infra Site Tuhup Proyek Sumbawa Timur Mining Dermaga FT Luwuk & FT Raha di Proyek Outer Ring Road IKN Proyek Nickel Kendari Sulawesi Tenggara Intalasi Pengolahan Air Brayan Kapasitas Proyek Adaro B2B Project Dermaga SOFIFI Maluku Utara 500lt/dt Tanki Adaro 2 x 2500 KL Proyek Dermaga Namlea 2024 di Maluku Proyek KIK Kendal Project PT KPC Proyek Dermaga Sapudi 2024 di Sumenep Pipeline IAE Gresik Project Pertamina Proyek Lanjutan Pembangunan Faspel Proyek COO Pipa Papua Laut Agats - Papua Proyek Pipe Line IAE Gresik Proyek Dermaga Site Rimau – Lampung Batu Hijau Expansion Project Selatan Proyek DPPU Bandara Dhoho Kediri Project Dermaga MIDAI – Kep. Riau Pembangunan Jalan Baru Kretek - Girijati Proyek Dermaga Pasipalele Proyek Jembatan SIDRAP di Sulawesi Upgrading pipa discharge dermaga FT Selatan Terminal Tual Proyek Pipeline PT. LNG Proyek Pembangunan Dermaga Kap. Pembangunan jaringan air baku IKK Tiris, 50.000 di FT Biak Probolinggo Proyek Dermaga NTB Stadion Kanjuruhan Proyek Shiplift Block A-B PT. PAL Proyek PT Gudang Garam
Page 39
• Setting committed policy on (Dividend Payment Ratio) DPR to achieve target of 25% - 30% DPR
• Communicating internal effort to achieve ROE of 10% to 15%
• Engage with International Securities House / Investment Consultants / Research Companies in order to
increase exposure to international fund manager to achieve targeted 6x EV/EBITDA
• Intensify engagement with domestic stock community, influencer, KOL and other related party to improve
awareness about ISSP progress
• Continues approach to Research & Analyst to promote fundamental improvement and to enchance market
Liquidity
39
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facebook.com/spindosteelpipe
youtube.com/c/spindosteelpipe
@spindosteelpipe
linkedin.com/company/spindo
For more information please contact:
PT Steel Pipe Industry of Indonesia Tbk.
Gd. Baja Lantai 7B
Jl. Pangeran Jayakarta no 55 Jakarta
Indonesia
Up:
Johanes W Edward
Corporate Secretary & Investor Relations
Chief Strategy & Business Development Officer
Email: johanes.edward@spindo.co.id
Ph: +62-21 6231 3502 ext. 6062
Page 41
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Page 42
The early days
1971 Established through incorporation of Indonesia by PT Gayantara, Itochu Corporation and Kawasaki
Steel Corporation
1990 Ibnu Susanto (President Commissioner) acquired 90% of the shares in SPINDO
1991 PT Radjin established the Pasuruan facility, commencing our production of spiral welded pipes
1996 Obtained API (5L 0313) certification for our spiral welding process
1998 Merged with PT Radjin, with PT Steel Pipe Industry of Indonesia being the surviving company
2000s
2005 Established our Karawang facility
2007 Obtained ISO TS Quality Management System for automotive pipes in the Karawang facility
2009 Became approved supplier of pipe for two-wheeler frames to Yamaha
2010s
2011 Accredited with Occupational Health and Safety Management System ("OHSAS") certification
2013 Initial Public Offering of our Company on 28 January 2013 which raised US$88m
2014 Commenced operations of the Sidoarjo plant
2015 Official opening of our Karawang expansion plant
2015 Signing of memorandum of understanding for procurement of raw material between our Company, JFE Steel Corporation
("JFE") and Marubeni-Itochu Steel Inc. ("MISI")
2016 Selected as Best 40 Companies by the Indonesian Analyst Association
2016 Became a member of the Kompas 100 index
2016 Commenced operation of warehouses in Bandung and Jakarta
2017 Commenced operation of warehouse in Samarinda, Kalimantan
2018 First export of Underwriter Laboratory Certified Pipes to Canada and America
2019 Opening of Samarinda Depot to serve customers in the East Kalimantan area
Launching digital channel on Instagram, LinkedIn, and Youtube Channel
More recently
2020 Obtained ISO 14001-an international standard for environmental management system that ensures that business processes and
products produced by the Company have fulfilled its commitment to the environment
2021 Celebrating 50 years of PT Steel Pipe Industry of Indonesia Tbk 42 42
2022 Installation of big diameter SS Pipe Machine (up to 8”)
2023 Grand opening of Makassar Depo, The issuance of PUB II consisting of Bonds and Sukuk.
Page 43
Spindo’s Position in the Value Chain Our Products and Key Markets
Spiral pipes (non Black pipes (non
API) Water pipes API)
Construction, Electric and Utility Strips + plates
poles
Infrastructure, and
Carbon and Cutting, Steel pipe Utilities
stainless-steel bending, and products
coils welding
Mechanical tubes of various shapes
Key Products
HFW High Frequency
Welding SSAW Spiral Submerged
Arc Welding Automotive
Furniture pipes Stainless steel pipes
Black pipes, water pipes,
Spiral pipes
mechanical pipes, API pipes,
(API & non-API)
furniture pipes, steel poles
Tungsten Inert Furniture
TIG Gas Welding Service
Spiral pipes Black pipes
(API) (API)
Industrial and ornament Galvanizing, shearing, 4
stainless steel pipes slitting, QAQC tests 4
Oil & Gas
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Established in 1971 as a foreign investment corporation by PT Gayantara, Itochu
Corporation, and Kawasaki Steel Corporation
Pekanbaru
Representative Samarinda Makassar PT Cakra Bhakti
Office Public *
Warehouse Warehouse Para Putra (CBPP)
55.9% 44.1%
90.0% 50.0% 20.0%
Spindo Karawang
Production Unit 5 PT SPINDO
PT Sanko Steel
Engineering
Indonesia
PT Poses**
Industry
Spindo Sidoarjo
Bandung/ *includes treasury shares of 1.68% &
West Jakarta Production Unit 1, 2, 3
Pemberton Asia Opportunities Fund of
Warehouse
Spindo Sidoarjo 6.96%
Production Unit 6
** inoperative
Jakarta Spindo Pasuruan
Representative Office Production Unit 4
Semarang Surabaya
Representative Office Warehouse
44 44
Page 45
Distribution Channel
More than
Approx.
5,000 End-users
70%
Customers Registered
Approx.
Distributors
30%
2,000 –
3,000 Active
Customers
SELECTED KEY-CUSTOMERS
56% 22% 19% 2% 45
Page 46
Standing Out Amid Competition Across Sectors Largest Pipe Manufacturer in Indonesia by Revenue
6455
• SPINDO's primary competitors include PT
6256
(IDR bn)
Krakatau Pipe Industries (KPI) – a subsidiary of
5379
4886
PT Krakatau Steel (Persero) Tbk, and PT Bakrie
4468
Pipe – a subsidiary of PT Bakrie Brothers Tbk.
3759
3776
3626
3663
3340
•
3235
Uniquely, SPINDO competes across all sectors,
2459
2454
2393
unlike other competitors who typically
concentrate on one or two sectors.
1511
1384
1202
989
922
769
2017 2018 2019 2020 2021 2022 2023
SPINDO Bakrie Group Krakatau Steel Group
Construction, Oil and Gas
Furniture Automotive
Infrastructure, Utilities (API Standard)
Strong
Weak
Industries
SPINDO
Manufacturers
SPINDO
Manufacturers
SPINDO
Manufacturers
SPINDO
Manufacturers
Industries
Other Smaller
Other Smaller
Industries
Other Smaller
Industries
Other Smaller
Krakatau Pipe
Krakatau Pipe
Krakatau Pipe
Krakatau Pipe
Bakrie Pipe
Bakrie Pipe
Bakrie Pipe
Bakrie Pipe
ISTW
Manufacturers
Note :
Figure in Table 1 is obtained from respective companies Annual Report as of 06/06/2023 BNBR.IJ and KRAS.IJ have not submitted their annual report (delayed)
46
Company estimates
Page 47
SPINDO's Unique Capabilities
• Certified Export for US and Canada Fire Sprinkler Systems
• Spiral Welded Pipe Manufacturing: Large Diameter and Thickness
• High-Quality Thick Wall Stainless Steel Unthreaded Pipes
• 'Blow Galvanize' Technology for Uniform Coating and Superior Quality
• Galvanized Pipe with Enhanced Tensile Strength and Elongation
Commitment to minimising environmental and having a positive social impact
• Supporting Skilled Labor Initiatives with SPINDO LSP
• Ensuring ISO 45001:2018 Compliant Occupational Health & Safety Practices
• Implementing ISO 14001:2015 Compliant Environmental Management System
The flexibility to import raw materials from global steel markets
• Global Steel Market Access for Raw Materials
• Differentiating from Competitors Captive to Local HRC Producers
• Leveraging Scale for Structural Cost Advantage
47 47
47
Names mentioned 40 people and organisations named in the text · linked when the evidence is strong
unresolved
org
Steel Pipe Industry Indonesia Tbk
p.2 ×4
unresolved
org
PT Steel Pipe Industry
p.2 ×9
unresolved
org
Indonesia Tbk
p.2 ×6
unresolved
org
PT Cakra Bhakti Office
p.5 ×2
unresolved
org
PT SPINDO
p.5 ×3
unresolved
org
PT Sanko Steel Engineering Indonesia Industry Spindo Surabaya
p.5
unresolved
org
PT Makinta Securities
p.6
unresolved
org
PT Makinta
p.6
unresolved
org
PT Bhakti
p.6
unresolved
org
PT. Bali Securities.
p.6
unresolved
person
H. Poernomosidi Independent
p.6
unresolved
person
Officiate
· Commissioner
p.6
unresolved
org
SekarLaut Tbk
p.6 ×2
unresolved
org
PT Radjin
p.7 ×5
unresolved
org
PT. Pelayaran Nusantara Meratus The Hanny
p.7
unresolved
org
PT Bakrie
p.11 ×2
unresolved
org
PT KPC Proyek Dermaga Sapudi
p.38
unresolved
org
PT. LNG Proyek Pembangunan Dermaga
p.38
unresolved
org
PT. PAL
p.38
unresolved
org
PT Gudang Garam
p.38
unresolved
org
PT Gayantara
p.42 ×2
unresolved
org
Kawasaki Steel Corporation
p.42 ×2
unresolved
org
JFE Steel Corporation
p.42
unresolved
org
Marubeni-Itochu Steel Inc.
p.42
unresolved
org
PT Sanko Steel Engineering Indonesia
p.44
unresolved
org
PT Poses
p.44
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