CORPORATE PRESENTATION Non Deal Roadshow February 2018 STRONGER FACING CHALLENGES
COMPANY AT A GLANCE The 2nd largest tin producer in the world Building on an impressive tin history of almost 200 years Listed at the Indonesia Stock Exchange (IDX) since 1995 Registered in the London Metal Exchange (LME) for Banka Tin & Mentok Tin The only member company of ITRI with offshore mining operation 2
VISION AND MISSION PT TIMAH Tbk is one of the largest mining and tin mining companies in the world established since the 18th century which later in 1976 became a Limited Liability Company and subsequently registered as a Public Company in 1995 VISION MISSION To be a leading enviromental friendly mining company in the world Building strong, supreme and dignified human resources Implementing the proper and right good governance for mining Optimizing the value of the company and contribution to the shareholders as well as social responsibility PT TIMAH Tbk www.timah.com 3
BOARD OF DIRECTORS M. Riza Pahlevi Tabrani President Director Experienced in Corporate Finance sector over 20 years, before join in PT TIMAH Tbk he was in PT Perusahaan Gas Negara Tbk as a Chief Financial Officer and also become a president commissioner in subsidiaries of PT Perusahaan Gas Negara Tbk. Emil Ermindra Chief Financial Officer Experienced in Banking sector over 23 years, before join in PT TIMAH Tbk he was in PT Bank Negara Indonesia (Persero) Tbk as an EVP Strategic Planning Division Head, EVP Management Office Head, and VP Regional Chief Executive Officer. Alwin Albar Director of Operation Trenggono Sutioso Director of Business Development Experienced in PT TIMAH Tbk over 17 years with several positions such as Head of Business Development, Head of Regional Engineering and Production Experienced in Mining over 17 years, before join in PT TIMAH Tbk he was in PT Rio Tinto Indonesia as Exploration Geologist, PT ANTAM Tbk with several positions such as VP Exploration, Head of Project Development, SVP Corporate Strategic Development, Corporate Secretary. Muhammad Rizki Director of Human Resources Experienced in PT TIMAH Tbk over 20 years with several positions such as Head of Offshore Operation, Head of Logistic, Head of Metallurgy. PT TIMAH Tbk www.timah.com 4
CORPORATE STRUCTURE 1 65% 35% 2 3 4 99,99% 99,99% 99,99% 99,99% 100% 50% 50% 99,80% 99,99% 99,99% 99,99% 1 2 3 4 Pilar 1 : Tin mining Pilar 2 : Downstream Pilar 3 : Non tin mining Pilar 4 : Based on competency 99,99% 99,99% PT TIMAH Tbk www.timah.com 5
TIN INDUSTRIES OVERVIEW PT TIMAH Tbk www.timah.com 6
FINANCIAL DEVELOPMENT INDICATOR EBITDA In IDR billion 1,393 1,528 1,077 1,191 1,524 748 + 74 % 1,046 *) 1,300 2010 2011 2012 2013 2014 2015 2016 2017 NET INCOME In IDR billion 947 896 431 581 673 102 + 390 % 252 *)400-500 2010 2011 2012 2013 2014 2015 2016 2017 *) Unaudited/estimated numbers PT TIMAH Tbk www.timah.com 7
9M 2017 FINANCIAL PERFORMANCE Revenue Rp6,621 billion Gross margin 17% Rp300 billion EBITDA Rp969 billion STRONGER FACING CHALLENGES As of 9M 2017 PT TIMAH recorded net profit for the year Rp.300 billion driven by improved operational performance and continue in efficiency. Net profit for the year is increased 5 times compared to last period in 2016 PT TIMAH Tbk www.timah.com 8
9M 2017 NET PROFIT ANALYSIS Variance YoY In billion IDR 2000 +2,029 +1,483 1500 1000 500 +139 +4 +66 +86 301 0 51 Net income 9M 2016 Revenue Production cost Opex Depre. & Amort. Others Tax Net income 9M 2017 The increase of TINS revenue in the previous year was driven by the increase in sales volume by 16% supported by the increase of average refined tin price 19%. On the other hand, the increase of production cost was in line with the increase of refined tin production and royalty payments along with the increase of our sales revenue PT.TIMAH Tbk www.timah.com 9
9M 2017 FINANCIAL SUMMARY Revenue In IDR billion 10,000 8,000 6,000 4,000 2,000-7,822 EBITDA In IDR billion 2,000 1,500 1,000 500-6,239 7,518 6,874 6,968 4,592 6,621 FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 1,077 1,191 1,524 784 1,047 FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 638 969 Net income In IDR billion 44% 490% 800 600 400 200 0 432 581 673 PT TIMAH Tbk www.timah.com 10 102 FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 EPS Rupiah/shares 52% 471% 120 100 80 60 40 20 0 86 102 90 14 FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 252 34 51 7 301 40
QUARTERLY FINANCIAL SUMMARY Revenue In IDR billion Gross profit (in IDR billion) & margin (%) 2,500 2,000 1,500 1,000 2,253 2,047 2,319 1,796 29% 500 - Q1 2017 Q2 2017 Q3 2016 Q3 2017 600 500 400 300 200 100 0 18% 15% 15% 298 333 318 64% 22% 522 Q1 2017 Q2 2017 Q3 2016 Q3 2017 25% 20% 15% 10% 5% 0% EBITDA (in IDR billion) & margin (%) 500 400 300 200 100 0 12% 255 15% 17% 332 16% 297 381 28% Q1 2017 Q2 2017 Q3 2016 Q3 2017 20% 15% 10% 5% 0% Net income In IDR billion 200 150 100 50 0 3.20% 66 3.80% 85 4.70% 84 38% 6.50% 150 Q1 2017 Q2 2017 Q3 2016 Q3 2017 8.00% 6.00% 4.00% 2.00% 0.00% PT. TIMAH Tbk www.timah.com 11
CASH MARGIN PER TONNES In thousand USD/tonnes 25 20 15 10 19.6 19.5 18.8 The highest average tin price 15.5 The lower average tin price 16.7 16.5 18.8 5 1.8 3.1 2.8 0.6 1.6 0.7 1.7 0 FY2012 FY2013 FY2014 FY2015 FY2016 9M 2016 9M 2017 Cash margin Delivered cost* *) Delivered cost: production cost + marketing cost + administrative cost Stable production cost and as of 9M2017 the increase of production cost was in line with the increase of refined tin production and royalty payments along with the increase of our sales revenue. PT.TIMAH Tbk www.timah.com 12
CAPITAL EXPENDITURE Capex In billion IDR 600 500 400 300 200 100-535 129 137 46 185 38 Refined tin production increased 43% 539 489 143 252 91 108 82 37 174 102 16 23 FY 2016 9M 2016 9M 2017 MAJOR EXPANSION PROJECTS 9M 2017 Exploration & Production: Major expansion for open the new area onshore mining in Bangka and Belitung, and regular exploration activities Construction in progress: Construction in progress related to development of production capacity, recondition and replacement machinery including in fuming development Building & office Machinery Exploration & production Equipment CIP PT.TIMAH Tbk www.timah.com 13
DEBT PROFILE AND COST OF FUND Debt Profile (In billion IDR) Cost of fund analysis 12.00% Issued Obligation and Sukuk with lower interest rate 1500 10.00% 8.00% 6.60% 8.18% 9.49% 9.79% 9.41% 8.47% 6.00% 1355 2334 2115 1733 2156 4.00% 2.00% 2.38% 2.70% 2.35% 2.20% 2.00% 2.34% 264 FY2012 FY2013 FY2014 FY2015 FY2016 9M2017 Short term loan Long term loan 0.00% 2012 2013 2014 2015 2016 2017 Average IDR Rate Average USD Rate Improving in cash for debt service and lower cost of debt with issued IDR bonds and sukuk ijarah which is long term period with maturity payment on September 2020 and 2022. These bonds and sukuk ijarah were rated A+ by Pefindo PT.TIMAH Tbk www.timah.com 14
9M 2017 OPERATION PERFORMANCE Tin ore production 23,854mt Refined tin production 22,837mt Refined tin sales 21,588mt Average selling price $20,557/t STRONGER FACING CHALLENGES Striving to become a more effective company, TINS has taken advantage from the tin commodity price hike by effectively increasing volume of tin ore production PT.TIMAH Tbk www.timah.com 15
OPERATION OVERVIEW Reserves 335,909 319,120 Province Total IUP Total area (Ha) Note 264,806 251,705 Bangka, Babel 20 81.824 Tin ingot Bangka Barat, Babel 45 93.954 Tin ingot 71,103 67,415 FY2016 9M2017 Onshore Offshore Resources 737,546 747,479 490,660 472,224 246,886 275,255 Bangka Selatan, Babel 18 38.265 Tin ingot Bangka Tengah, Babel 8 26.884 Tin ingot Belitung, Babel 9 13.262 Tin ingot Belitung Timur, Babel 11 61.278 Tin ingot Bangka Belitung, Lintas Kabupaten 10 112.827 Tin ingot & iron ore Karimun, Kepri 4 18.875 Tin ingot Riau 2 6.540 Tin ingot Riau dan Kepri, Lintas Kabupaten 1 19.594 Tin ingot TOTAL 128 473.303 FY2016 9M2017 Onshore Offshore PT.TIMAH Tbk www.timah.com 16
9M 2017 OPERATION SUMMARY Tin ore production In metric tonnes 40,000 30,000 20,000 10,000 29,776 26,204 32,319 26,361 24,121 15,973 23,854 Refined tin production In metric tonnes 49% 43% 40,000 30,000 20,000 10,000 29,512 23,718 27,550 27,431 23,756 15,995 22,837 - FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 - FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 40,000 30,000 20,000 10,000 - Refined tin sales In metric tonnes 34,934 23,237 26,907 30,087 26,677 18,600 21,588 FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 Average selling price In USD 16% 26,714 19% 30,000 25,000 20,000 15,000 10,000 5,000-21,505 21,686 16,186 18,408 17,296 20,557 FY2012 FY2013 FY2014 FY2015 FY2016 9M2016 9M2017 PT.TIMAH Tbk www.timah.com 17
QUARTERLY OPERATION SUMMARY Tin ore production In metric tonnes 10,000 8,000 6,000 4,000 2,000-7,675 8,403 6,865 7,776 Q1 2017 Q2 2017 Q3 2016 Q3 2017 Refined tin sales In metric tonnes 13% 4% 7,600 7,400 7,200 7,000 6,800 6,600 6,963 7,441 6,918 7,184 Q1 2017 Q2 2017 Q3 2016 Q3 2017 Refined tin production In metric tonnes 10,000 8,000 6,963 23% 7,942 7,932 6,475 6,000 4,000 2,000 - Q1 2017 Q2 2017 Q3 2016 Q4 2017 Average selling price $/tonnes 21,000 20,000 19,000 18,000 17,000 16,000 15,000 20,428 20,432 17,296 19% 20,557 Q1 2017 Q2 2017 Q3 2016 Q4 2017 PT.TIMAH Tbk www.timah.com 18
2017 ESTIMATED REFINED TIN PRODUCTION 30,277 MT REFINED TIN SALES 29,000 MT REVENUE Rp.9,000 billion NET INCOME Rp.400 Rp.500 billion PT.TIMAH Tbk www.timah.com 19
STRATEGY EXECUTION IN 2017 TIN RESERVES OPERATIONAL FINANCE HUMAN RESOURCES BUSINESS D EVELOPMENT Signing of joint Development of Issued Bonds and Training, Fuming and Ausmelt venture agreement production capacity Sukuk amounting to certification, development with Topwide Ventures in Nigeria Re-evaluted of tin resources and reserves in onshore and offshore Established 2 more units of inland mining Exploitation of primary reserves in Bangka Belitung Rp.1.5 billion managerial and leadership reached 93% of the target as of October 2017 Bore Hole Mining Signed a strategic partnership with Yunan Tin Group PT.TIMAH Tbk www.timah.com 20
STRATEGY IN 2018 1 Increasing tin ore recovery 2 Re-engineering technology and enlargement productivity 3 Established of new mining area 4 Cost efficiency 6 Maintaining good relationship between stakeholders and customers PT.TIMAH Tbk www.timah.com 21
Contact and Further Information Amin Haris Sugiarto Corporate Secretary Corporatesecretary@pttimah.co.id PT.TIMAH Tbk www.timah.com 22
APPENDIX 1 - REFINED TIN APPLICATION PT.TIMAH Tbk www.timah.com 23
APPENDIX 2 - FUMING PLANT & AUSMELT Current Our present capacity is approximately 54,000 ton per annum, of which 12,000 ton located in Kundur and 42,000 ton located in Muntok Kundur Capacity 12,000mt/years Mentok Capacity 42,000mt/years New technology With the newly adopted technology, our capacity shall be significantly increased with total number of 76,000 per annum and the technology's are converted our tin ore low grade to high grade as a requirements minimum. Fuming plant: Capacity: 85 tin ore slag per day/around 31,000mt per years to produce refined tin. Estimated finish this years Ausmelt: Capacity: 45,000mt per years. Estimated 2020 PT.TIMAH Tbk www.timah.com 24
APPENDIX 3 COST AND REVENUE PERCENTAGE 9M2017 % Revenue Tin metal and tin solder 5,915,532 89% Tin chemical 529,827 8% Hospital services 167,251 3% Shipping dockyard services 6,480 0% Others services 2,025 0% Total revenue 6,621,115 100% Cost of revenue Raw material of tin ore 3,515,570 64% Salaries and allowance 479,573 9% Depreciation and amortization 360,338 7% Fuel 356,067 7% Roylaty 183,621 3% Sparepart used 147,735 3% Third parties services 131,075 2% Raw material of tin chemical 72,396 1% Transportation 20,124 0% Taxes 57,399 1% Direct materials used 12,499 0% Others 195,390 4% Tota cost of production 5,531,787 101% Inventory - 62,487-1% Total cost of revenue 5,469,300 100% Source: audited financial statements Sept 2017 PT.TIMAH Tbk www.timah.com 25
APPENDIX 4 SALES DESTINATION Sales destination as of September 2017 Domestic 11% Eropa 22% America 7% Asia 60% Sales percentage as of 2017 Long term contract 80% SPOT 20% Asia Eropa America Domestic PT.TIMAH Tbk www.timah.com 26