Company Presentation 1Q 2013
PT Toba Bara Sejahtra Tbk ( Toba )
Company Presentation
First Quarter 20131
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra (the “Company”).
These materials may contain statements that constitute forward-looking statements. These statements
include descriptions regarding the intent, belief or current expectations of the Company or its officers with
respect to the consolidated results of operations and financial condition of the Company. These statements
can be recognized by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or
words of similar meaning. Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ from those in the forward-looking statements
as a result of various factors and assumptions. The Company has no obligation and does not undertake to
revise forward-looking statements to reflect future events or circumstances.
These materials are for information purposes only and do not constitute or form part of an offer, solicitation
or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor
should it or any part of it form the basis of, or be relied upon in any connection with, any contract,
commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities
of the Company should be made after seeking appropriate professional advice.
2
Content
1
Corporate Profile
2
Operational Profile
3
Business Overview
4
Financial Highlights
5
CSR & Environmental Highlights
3
1
Corporate Profile
4
Toba in Brief
Toba comprises three coal companies, Adimitra Baratama Nusantara (ABN), Indomining (IM) and Trisensa
Mineral Utama (TMU), which hold adjacent concession areas located in East Kalimantan, Indonesia
• Substantial and diversified thermal coal
reserves and resources
o JORC-compliant proved and probable reserves of
147 MM tonnes and measured, indicated and
inferred resources of 236 MM tonnes
o Coal brands with calorific values ranging from
4,700 - 5,800 Kcal / kg GAR
• Strong growth profile
o Produced 5.2 MM tonnes of coal in 2011 and grew to
produce around 5.6 MM tonnes of coal in 2012
o Prime location provides the operational cost edge to
grow as a logistical & operational center for the area
o Continued exploration effort to increase our Reserves and
Resources. Current reserves only account for 52% of our
total area has been explored
Dec 2012 Revenue
Dec 2012 EBITDA
Reserves
Resources
%
%
%
%
TMU
5.4%
TMU
3%
TMU
18.2%
IM
15.0%
IM
23%
IM
31%
IM
15.7%
ABN
69%
ABN
66.1%
ABN
74%
Total: US$ 396 MM
ABN
79.6%
Total: US$ 31 MM (1)
Note: (1) Includes net income attributable to minority interest (ABN and IM only)
Total: 147 MM Tonnes
Total: 236 MM Tonnes
5
Ownership Structure
Davit Togar Pandjaitan (1)
PT Toba Sejahtra ( TS )
71.8%
PT Bara Makmur Abadi
0.8%
PT Sinergi Sukses Utama
6.2%
5.1%
Roby Budi Prakoso
3.6%
Public
12.5%
ABN Minorities
49.0%
99.99% (2)
PT Toba Bumi Energi ( TBE )
51.0%
License
Area
• 20-year Production Operation Mining
Permit ( IUPOP ) expiring in December
2029
• IUPOP was converted from a Kuasa
Pertambangan ( KP ) in 2009
• 2,990 ha
Reserve • Reserves: 117MT- JORC
• Resources: 156MT- JORC
Notes:
1. Son of TS founder, Luhut B. Pandjaitan
2. Figures are rounded
99.99% (2)
• IUPOP expiring in June 2013
– IUPOP was converted from a KP in 2010
• IUPOP extension has been completed in
March 2013 (First extension until 2023)
99.99% (2)
• 13-year IUPOP expiring in December
2023
• IUPOP was converted from a KP in
2010
• 683 ha
• 3,414 ha
• Reserve: 22 MT- JORC
• Resources: 37MT- JORC
• Reserves 8 MT- JORC / 15 MT (Internal
estimate)
• Resources: 43 MT- JORC
6
Majority Shareholder
Toba believes it benefits from Toba Sejahtra’s experience in the Indonesian coal sector as well as its
leadership and experience
Controlling Shareholder with Established Track Record…
… Helmed by an Experienced Leader
• A privately owned group founded in 2004 with interests in energy
and plantations
• General (Ret.) Luhut B. Pandjaitan is the key shareholder and
founder of Toba Sejahtra group. He is currently the chairman of TS
• Its business segments are as follow:
• Mr. Luhut had a long and illustrious career in the civic service
before turning to the commercial sector. Over the course of thirty
years in the Army Special Forces, Mr. Luhut rose to become a fourstar general
– Energy: Owns 5 coal mining concessions through Toba and PT
Kutai Energi. All of TS' mines are characterized by low production
costs and favorable proximity to ports
– Oil & Gas: In the exploration phase of the 4,567 sq miles South
East Madura Block through subsidiary E&P company PT Energi
Mineral Langgeng
– Power Plant: Operates a 30 MW coal-fired power plant in Palu,
Central Sulawesi and is developing a 120 MW greenfield power
plant in Senipah, East Kalimantan
– Agribusiness: A 25% stake in a 12,000 ha palm oil plantation in
East Kalimantan
– In 1999, Mr. Luhut retired from the military service to serve as
Ambassador for the Republic of Indonesia to Singapore
– In 2000, he was appointed Minister of Industry and Trade of the
Republic of Indonesia
• Thereafter, Mr. Luhut applied his knowledge and leadership skills to
establish TS in 2004, building it from the ground up into a major
business group with interests in energy oil and gas, power and
agribusiness
7
Initial Public Offering
Listed on IDX
Number of shares offered
IPO Proceed
Anchor Investor
Ticker Code
06 July 2012
210.681.000 shares or 10.47%
Rp. 400,293,900,000
Barings Private Equity (8% at IPO)
TOBA
8
Key Milestones
Strong track record of acquisitions, development of greenfield mines, rapid production ramp-up and
experience to adjust operation in a down-market
2007
2009
2011
2013
• IM commenced
production
• ABN & IM production
reached 2m tons
• TMU commenced
production
• IM successfully
extended IUPOP
until 2023
• Toba production
hit 5m tons
2007
2008
2009
2010
2011
2012
2013
2008
2010
2012
• ABN commenced
production
• TS acquired the remaining share
for IM from minority shareholder
• Toba acquired the minorities’
shares in TBE and TMU
• Operational
adjustment due to
a drop in coal
market
• Toba acquired 51.0% of ABN,
52.5% of TBE (IM’s shareholding
company) and 51.0% of TMU
• IPO/Listed on IDX, 6th July
2012
• Toba production hit 4m tons
• Eliminated overlapping issues
with plantation company (PKU)
9
2
Operational Profile
10
Solid Operating Track Record
Toba is transitioning from Greenfield into growing major player
Production Growth
MT = Million Tonnes
6
~5,8
– 6,4
~ 6,5
ABN
IM
TMU
5,6
5,3
0.3
0.0
5
1.0
3,9
4
1.4
0.9
3
2,0
2
3.8
0.9
1
0
4.4
3.1
Forecast
Forecast
7
0,8
0,2
0.7
0.1
1.1
2007
2008
2009
Source: Company data
TMU
2010
Indomining
2011
2012
2013
ABN
• Toba started exploration on ABN & IM in 2006 and TMU in 2008
• Production grew at 65% CAGR from initial size of 800k in 2008 to 5.6 MT in 2012
• Toba is focusing on Continuous Production Growth and this is supported with available
infrastructure capacity of 13 MT of coal
• Additional 3 MT worth of capacity is expected to be realized in 3-4Q13 to become total 16 MT
• Production growth will be driven by TMU and Additional CAPEX will help fuel growth in TMU
11
Prime Location Gives Significant Advantage in Cost
Prime Location
0
12
24
36
Major City
48
Jetty
kilometers
Muara
Berau
Transshipment Point
4
3
Major city is
less than 50
km
Furthest pit to
jetty 25km | with
closest one ~5km
Samarinda
~55 Km
(total ~120 Km)
Mahakam River
NDM Jetty
2
17km
IM
ABN
ABN
TMU
~ 5 km
IM Jetty
Close proximity
transhipment
point & jetty
Makassar Strait
ABN Jetty
Kutai Energy
17km
1
Adjacent
locations for all
3 mines
~65 Km
Muara Jawa
All infrastructures are owned by Toba’s giving significant operating
leverage vs other concessions in surrounding areas
12
Substantial Reserves and Resources to
Support Production Expansion
Reserves and resources upside from the conversion of resources to reserves and further exploration of
concession areas
Reserves (1)
Resources (1)
MM Tonnes
MM Tonnes
IM
15.0%
TMU
5.4%
Coal Reserves and Resources (1)(2) (JORC)
Coal Reserves
TMU
18.2%
(MM
Tonnes)
IM
15.7%
ABN
79.6%
Total: 147 MM Tonnes
ABN
66.1%
Coal Resources
Proved
Probable
Total
Reserves
Measured
Indicated
Inferred
Total
Resources
ABN
70
47
117
73
70
13
156
IM
11
10
22
24
10
4
37
TMU
5
4
8
9
8
26
43
Total
86
61
147
106
88
43
236
Total: 236 MM Tonnes
Notes:
1. Differences in totals are due to rounding
2. The Runge Report for ABN is as of 31 December 2011, the PT SMG Consulting Report for IM is as of 1 January 2012 and the Marston Report for TMU is as
of 31 October 2011
13
Significant Portion of Area still Unexplored
IM
ABN
TMU
Note:
Areas already explored
• Explored 3,704 of 7,087 hectares of its concession areas (52% of total concession area) and drilled 3,512
boreholes as of 31 December 2011
• Additional JORC coal reserves and resources expected to be discovered, especially at TMU where only 680
hectares out of 3,414 hectares of the concession (20% of TMU concession area) have been explored
14
Strong Relationships with Multinational Customers
Major customers provide the stable
business support for Toba’s marketing…
… minimum marketing fees because Toba
handles our own marketing internally
Major Customers
Toba’s Marketing Operations
Central Marketing Operations of all 3
subsidiaries
Internally developed customer base that
allows Toba to have low marketing costs
Balance mix of long term contracts, short
term and spot
Active participation in reputable
conference and trade shows to promote
the Toba brand
DRAGON ENERGY GROUP
Enhance marketing strategy to sell
directly to end-users
15
3
Business Overview
16
Recent Coal Market Update
China’s Economic Recovery
Coal Prices Rebound
Range-bound US$88 -95/ton
2012
2012
2013
Source: Bloomberg
Source: Platts
•
Coal Prices have bounced back from
high 70’s in 4Q 2012 and are rangebound at US$88 – 95/ton in early 2013
•
China’s economic recovery rebounded in
4Q 2012 as China is the largest buyer in
the global seaborne market
17
Strategic Initiatives to Manage Changing Environment
Returning future
Profitability
Level
Strategic Initiatives / Response to Changing Coal Prices
1
Manage cash costs: Lower SR,
Shorten Dump Distance
2
3
Construct hauling road from
TMU to IM
Share current infrastructures :
CPP & Jetty & lower costs
4
Centralize fuel supply
5
6
Optimize sales through hedging
activities
Increase our reserves through
acquisition and exploration
18
Toba’s Milestone 2013
• IM entered into
new Mining
Contract with
RPP for 5 years
Jan’13
• Hauling Road TMU – IM
has been completed
ahead of schedule
• New CPP in IM
expected to be
completed
• TMU Production ready
for ramp up to 80 - 100 K
tons/mo
• Indomining
Capacity expected
to increase up to 6
MMTPA
Apr’13
2007
May’13
2008
• TMU set up mine
operations in
block 4
Sept’13
………..
2009
2010
Oct’13
2011
2012
• 2nd underpass in
ABN expected to
be completed
• Border-mining in
ABN & IM
commenced
Toba is on track in integrating its operation and infrastructure
capabilities
19
Business Strategies
1
2
3
4
5
Integration of three
(3) mines
Organically increase
coal production levels
Increase coal reserve
and resource
Strengthen existing
and develop new
customer
relationships
Continue to focus on
health and safety,
environmental track
record and
commitment to CSR
• Benchmarking and
sharing between
departments and
functions
• Expand coal production
through increased
production and mine
development activities
• Optimize and
coordinate mine
planning and logistics
• Strengthen
relationships with third
party mining
contractors and work
closely with them to
improve their
productivity
• Continue exploration
activities to increase
proven and probable
reserves as only 52%
has been explored to
JORC standard
• Supply a higher
proportion of sales
volume to end users,
while maintaining
relationships with
existing coal traders
• Consider opportunities
to acquire coal
concessions with
significant reserves
• Target customers in
Japan, Taiwan, South
Korea, China, Vietnam
and Hong Kong, South
East Asia and India
• Centrally coordinate
and streamline
corporate finance,
legal, human resource
and CSR functions
• Maintain and enhance
high international
operating standards,
utilize automated
mining methods to
minimize accidents and
enhance safety
• Foster community ties
through development
programs as well as job
creation
• Joint mine plan and
infrastructure sharing
Growing Reserves and Maintain Profitability at Different Cycles
20
4
Operational & Financial Highlights
21
Toba Bara Operational Performance
Quarterly Production & Stripping Ratio
Thousand Tonnes
Stripping Ratio continues
to decline
Pre-stripping activity was lower in
1Q13 vs 1Q12, causing lower SR
on yoy basis. Yoy production was
higher due to lower rainfall while
dump distance fell from 2.3km in
1Q12 to 1.6km in 1Q13
Production Summary
1Q12
1Q13
Change
Comments
Source: Company data
Sales
(million ton)
Production
(million ton)
Stripping
Ratio (x)
1.1
1.4
27%
Sales are mainly contributed by ABN and remain flat at 5.5
million tonnes per year for two consecutive years
Production rose 18% to 1.3 milllion due to lower rainfall.
Contributions: from ABN 0.93 million tons, from IM 0.28
million tons and from TMU: 0.08 million tons
1.1
1.3
18%
17.7
15.2
-14%
Stripping ratio was higher in 2012 primarily due to prestripping activities in 1H 2012 in all three (3) mines, and
delay caused by higher rainfall
22
ABN Operational Performance
Production & Stripping Ratio
Thousand Tonnes
IM
Production volume
1,500
Stripping Ratio
17.6x
16.8x
ABN
13.7x
16.6x
17.1x
15x
14.2x
14.5x
1,000
TMU
20x
12.6x
11.1x
774
768
10x
1,141
1,078
884
1,078
1,224
1,225
925
500
5x
1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012
1Q2013
Key Highlights
PT Kutai Energi
Despite significant changes in coal market price, production
grew 17 % YoY. ABN Operation in 1H2012 was impacted by
higher mining SR and higher rainfall
Operational advantage & focus
2
1
Short coal hauling
distance 4km
3
High Built Crusher
Cap 10 mm ton/year
Barge Loading Jetty
Loading Speed of up to
1,800 ton/hour
4
Under Pass:
Capitalizing on Infra
Strength
23
IM Operational Performance
Production & Stripping Ratio
Thousand Tonnes
Production volume
500
Stripping Ratio
14.6x
ABN
14.5x
10.5x
10.1x
250
8.6x
TMU
291
15x
13.1x
394
8.9x
378
11.2x
10x
8.1x
347
190
236
265
272
278
0
5x
1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013
Dump
Distance(m)
2,809
2,822
2,530
2,550
2,564
2,547
2,179
2,178
1,724
PT Kutai Energi
Key Highlights
IM operation was impacted by higher mining SR and lower level
of equipment productivity from contractor
IM appointed PT RPP Contractor Indonesia replacing SIS
starting January 2013
IUPOP has been extended until 2023
Operational advantage & focus
2
1
Short coal
hauling dist. < 5km
4
3
CPP Ramp up to
6MM TPY
Conveyor for TMU
& Others
Cross Border
Mining with ABN
24
TMU Operational Performance
Production & Stripping Ratio
Thousand Tonnes
IM
Production volume
100
ABN
Stripping Ratio
45.6x
17.0x
75
50
10.8x
50x
11.2x
14.4x
24.5x
30x
25
20x
39
23
0
PT Kutai Energi
40x
59
85
90
84
10x
1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013
0
0
0
Key Highlights
TMU started pre-striping in 4Q 2011 until 2Q 2012. High level
of rainfall caused higher stripping ratio
Further drilling is expected to increase reserves. Our internal
estimation expects additional reserves of approximately 7
million tons, hence totaling 15 million tons
Operational advantage & focus
2
1
Build ~16km
Road to ABN
3
Exploration in
West Block
Integrate CPP
Ops with IM
25
Snapshot of Financial Performance –
1Q 2013 vs 1Q 2012
1Q 2012
1Q 2013 Change %
•
Coal Production Volume
increased 17% QoQ mainly due
to lower rainfall and better
overall stripping ratio
•
Sales Volume increased by 27%
due to increase in production
volume and clearance of our
2012 ending inventory
•
FOB vessel cash costs
decreased by 18% due to lower
stripping ratio and shorter
dumping distance
•
EBITDA decreased by 38%
mainly due decrease in ASP of
23%
Operation
Sales Volume
million ton
1,1
1,4
27%
Coal production
million ton
1,1
1,3
17%
Striping Ratio
x
17,7
15,1
-15%
NEWC Index
US$/ton
114
93
-18%
Sales
US$'000
97.563
94.942
-3%
Gross Profit
US$'000
21.077
14.389
-32%
Operating Profit
US$'000
14.061
7.742
-45%
EBITDA
US$'000
15.131
9.445
-38%
Net Income
Net Income after Minority
Interest
US$'000
US$'000
10.658
5.100
5.972
3.210
-44%
-37%
Financials
Ratio
Gross Profit Margin
%
21,6%
15,2%
-30%
EBITDA Margin
%
14,4%
8,2%
-43%
Net Profit Margin
%
11%
6%
-42%
US$/ton
86,5
66,2
-24%
US$/ton
67,1
55,1
-18%
(a)
Per Ton Basis
ASP
FOB Vessel Cash Cost
Notes (a)
(a)
FOB vessel Costs: COGS, Selling Expenses excluding depreciation
and amortization
(b) 1Q 2013 Financials is unaudited
26
Debt and Cash Position
Net Debt Position
US$ Mn
Net Debt to Equity
Net Cash
2%
34%
6%
11%
Net Cash
27
5
CSR & Environmental Highlights
28
Toba is Committed to Being a Responsible
Corporate Citizen
• Toba is continuously developing and implementing its corporate social responsibility programs
– Creating educational opportunities for local communities including renovating schools, training teachers,
providing post-graduate educational assistance and creating a literacy program for adults and a scholarship
program for school-aged children
– Providing health services to the local communities
– Helping groups of farmers plant crops of vegetables and bamboo and assisting with land rehabilitation
– Creating local employment opportunities by sourcing some of the Company’s site workforce from the
neighboring areas
Providing Health Services
Creating Educational Opportunities
Helping Farmers Plant Crops
29
Awards
Ernst & Young Social
Entrepreneur of the
Year 2011
East Kalimantan Green
Proper Mining Award
ABN
East Kalimantan Blue
Proper Mining Award
Indomining
30
Appendix
31
ABN: Coal Concession Overview
Overview
• Area: 2,990 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
IM
• Type of license: IUPOP
• Expiry date: 1 December 2029
• Commencement of production: September 2008
• 2012 production: 4.4 MM tonnes
ABN
• Mining consultant: PT Runge Indonesia
ABN
Jetty
Operations
TMU
• Current production capacity (31 December 2012):
– Crusher: 10 MM tonnes p.a.
– Conveyor: 10 MM tonnes p.a.
• Produces two varieties of blended thermal coal
– ABN 52: Marketed
CV(1)
of 5,200 kcal / kg GAR
– ABN 55: Marketed CV of 5,500 kcal / kg GAR
– ABN 58 : Marketed CV of 5,800 kcal / kg GAR
• Substantially all of the owners of the land within ABN’s
concession area have been compensated and ABN has been
granted the exclusive right to mine those areas
Marketing
• Historically sold between 50%-100% of its annual production through
long-term (longer than 1 year) with coal trading companies
– The remainder were sold on the spot market
32
Note:
1. Calorific value
IM: Coal Concession Overview
Overview
IM
Jetty
• Area: 683 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
IM
• Type of license: IUPOP
• Expiry date: 22 June 2013 (in the process of renewing its
IUPOP; expects to receive renewal confirmation through 2022
by end of 1st quarter 2013)
• Production commencement: August 2007
ABN
• 2012 production: 1 MM tonnes
• Mining consultant: PT SMG Consultants
TMU
Operations
• Current production capacity (31 December 2012):
– Crusher: 3.0 MM tonnes p.a.
– Conveyor: 4.5 MM tonnes p.a.
• Produced one variety of blended thermal coal “Indomining”
with marketed CV(1) of 5,700 kcal / kg GAR in 2012
– May produce additional varieties of blended thermal coal in
the future
• Has compensated the majority all of the owners of the land
within its concession area for their land and has been granted
the exclusive right to mine those areas
Marketing
• Historically sold approximately 50% of its annual production through
short-term (one year or shorter) contracts with coal trading companies
– Clients include Glencore, Flame, Peabody, Dragon, Aempire
• The remainder are sold on the spot market
33
Note:
1. Calorific value
TMU: Coal Concession Overview
Overview
• Area: 3,414 ha
• Location: Loa Janan, Muara Jawa and Sanga-Sanga,
Kutai Kartanegara, East Kalimantan
• Type of license: IUPOP
Jetty NDM
• Expiry date: 14 December 2023
• Commencement of production: October 2011
• 2012 coal production: ~257,000 tonnes
IM
Sungai Sangasanga
• Mining consultant: Marston & Marston
ABN
Operations & Marketing
• Current production capacity (31 December 2012):
Planned haul road
to ABN and IM (25 km)
TMU
– Crusher: 1.4 MM tonnes p.a.
• Produces one variety of blended thermal coal “Trisensa47”, with marketed CV(1) of 4,700 kcal / kg GAR
– May produce additional varieties of blended thermal
coal in the future
Planned haul
road and jetty
(17 km)
Pulau Seribu
Jetty KE
Sungai Dondang
34
Note:
1. Calorific value
Company Presentation
First Quarter 20131
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra (the “Company”).
These materials may contain statements that constitute forward-looking statements. These statements
include descriptions regarding the intent, belief or current expectations of the Company or its officers with
respect to the consolidated results of operations and financial condition of the Company. These statements
can be recognized by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or
words of similar meaning. Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ from those in the forward-looking statements
as a result of various factors and assumptions. The Company has no obligation and does not undertake to
revise forward-looking statements to reflect future events or circumstances.
These materials are for information purposes only and do not constitute or form part of an offer, solicitation
or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor
should it or any part of it form the basis of, or be relied upon in any connection with, any contract,
commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities
of the Company should be made after seeking appropriate professional advice.
2
Content
1
Corporate Profile
2
Operational Profile
3
Business Overview
4
Financial Highlights
5
CSR & Environmental Highlights
3
1
Corporate Profile
4
Toba in Brief
Toba comprises three coal companies, Adimitra Baratama Nusantara (ABN), Indomining (IM) and Trisensa
Mineral Utama (TMU), which hold adjacent concession areas located in East Kalimantan, Indonesia
• Substantial and diversified thermal coal
reserves and resources
o JORC-compliant proved and probable reserves of
147 MM tonnes and measured, indicated and
inferred resources of 236 MM tonnes
o Coal brands with calorific values ranging from
4,700 - 5,800 Kcal / kg GAR
• Strong growth profile
o Produced 5.2 MM tonnes of coal in 2011 and grew to
produce around 5.6 MM tonnes of coal in 2012
o Prime location provides the operational cost edge to
grow as a logistical & operational center for the area
o Continued exploration effort to increase our Reserves and
Resources. Current reserves only account for 52% of our
total area has been explored
Dec 2012 Revenue
Dec 2012 EBITDA
Reserves
Resources
%
%
%
%
TMU
5.4%
TMU
3%
TMU
18.2%
IM
15.0%
IM
23%
IM
31%
IM
15.7%
ABN
69%
ABN
66.1%
ABN
74%
Total: US$ 396 MM
ABN
79.6%
Total: US$ 31 MM (1)
Note: (1) Includes net income attributable to minority interest (ABN and IM only)
Total: 147 MM Tonnes
Total: 236 MM Tonnes
5
Ownership Structure
Davit Togar Pandjaitan (1)
PT Toba Sejahtra ( TS )
71.8%
PT Bara Makmur Abadi
0.8%
PT Sinergi Sukses Utama
6.2%
5.1%
Roby Budi Prakoso
3.6%
Public
12.5%
ABN Minorities
49.0%
99.99% (2)
PT Toba Bumi Energi ( TBE )
51.0%
License
Area
• 20-year Production Operation Mining
Permit ( IUPOP ) expiring in December
2029
• IUPOP was converted from a Kuasa
Pertambangan ( KP ) in 2009
• 2,990 ha
Reserve • Reserves: 117MT- JORC
• Resources: 156MT- JORC
Notes:
1. Son of TS founder, Luhut B. Pandjaitan
2. Figures are rounded
99.99% (2)
• IUPOP expiring in June 2013
– IUPOP was converted from a KP in 2010
• IUPOP extension has been completed in
March 2013 (First extension until 2023)
99.99% (2)
• 13-year IUPOP expiring in December
2023
• IUPOP was converted from a KP in
2010
• 683 ha
• 3,414 ha
• Reserve: 22 MT- JORC
• Resources: 37MT- JORC
• Reserves 8 MT- JORC / 15 MT (Internal
estimate)
• Resources: 43 MT- JORC
6
Majority Shareholder
Toba believes it benefits from Toba Sejahtra’s experience in the Indonesian coal sector as well as its
leadership and experience
Controlling Shareholder with Established Track Record…
… Helmed by an Experienced Leader
• A privately owned group founded in 2004 with interests in energy
and plantations
• General (Ret.) Luhut B. Pandjaitan is the key shareholder and
founder of Toba Sejahtra group. He is currently the chairman of TS
• Its business segments are as follow:
• Mr. Luhut had a long and illustrious career in the civic service
before turning to the commercial sector. Over the course of thirty
years in the Army Special Forces, Mr. Luhut rose to become a fourstar general
– Energy: Owns 5 coal mining concessions through Toba and PT
Kutai Energi. All of TS' mines are characterized by low production
costs and favorable proximity to ports
– Oil & Gas: In the exploration phase of the 4,567 sq miles South
East Madura Block through subsidiary E&P company PT Energi
Mineral Langgeng
– Power Plant: Operates a 30 MW coal-fired power plant in Palu,
Central Sulawesi and is developing a 120 MW greenfield power
plant in Senipah, East Kalimantan
– Agribusiness: A 25% stake in a 12,000 ha palm oil plantation in
East Kalimantan
– In 1999, Mr. Luhut retired from the military service to serve as
Ambassador for the Republic of Indonesia to Singapore
– In 2000, he was appointed Minister of Industry and Trade of the
Republic of Indonesia
• Thereafter, Mr. Luhut applied his knowledge and leadership skills to
establish TS in 2004, building it from the ground up into a major
business group with interests in energy oil and gas, power and
agribusiness
7
Initial Public Offering
Listed on IDX
Number of shares offered
IPO Proceed
Anchor Investor
Ticker Code
06 July 2012
210.681.000 shares or 10.47%
Rp. 400,293,900,000
Barings Private Equity (8% at IPO)
TOBA
8
Key Milestones
Strong track record of acquisitions, development of greenfield mines, rapid production ramp-up and
experience to adjust operation in a down-market
2007
2009
2011
2013
• IM commenced
production
• ABN & IM production
reached 2m tons
• TMU commenced
production
• IM successfully
extended IUPOP
until 2023
• Toba production
hit 5m tons
2007
2008
2009
2010
2011
2012
2013
2008
2010
2012
• ABN commenced
production
• TS acquired the remaining share
for IM from minority shareholder
• Toba acquired the minorities’
shares in TBE and TMU
• Operational
adjustment due to
a drop in coal
market
• Toba acquired 51.0% of ABN,
52.5% of TBE (IM’s shareholding
company) and 51.0% of TMU
• IPO/Listed on IDX, 6th July
2012
• Toba production hit 4m tons
• Eliminated overlapping issues
with plantation company (PKU)
9
2
Operational Profile
10
Solid Operating Track Record
Toba is transitioning from Greenfield into growing major player
Production Growth
MT = Million Tonnes
6
~5,8
– 6,4
~ 6,5
ABN
IM
TMU
5,6
5,3
0.3
0.0
5
1.0
3,9
4
1.4
0.9
3
2,0
2
3.8
0.9
1
0
4.4
3.1
Forecast
Forecast
7
0,8
0,2
0.7
0.1
1.1
2007
2008
2009
Source: Company data
TMU
2010
Indomining
2011
2012
2013
ABN
• Toba started exploration on ABN & IM in 2006 and TMU in 2008
• Production grew at 65% CAGR from initial size of 800k in 2008 to 5.6 MT in 2012
• Toba is focusing on Continuous Production Growth and this is supported with available
infrastructure capacity of 13 MT of coal
• Additional 3 MT worth of capacity is expected to be realized in 3-4Q13 to become total 16 MT
• Production growth will be driven by TMU and Additional CAPEX will help fuel growth in TMU
11
Prime Location Gives Significant Advantage in Cost
Prime Location
0
12
24
36
Major City
48
Jetty
kilometers
Muara
Berau
Transshipment Point
4
3
Major city is
less than 50
km
Furthest pit to
jetty 25km | with
closest one ~5km
Samarinda
~55 Km
(total ~120 Km)
Mahakam River
NDM Jetty
2
17km
IM
ABN
ABN
TMU
~ 5 km
IM Jetty
Close proximity
transhipment
point & jetty
Makassar Strait
ABN Jetty
Kutai Energy
17km
1
Adjacent
locations for all
3 mines
~65 Km
Muara Jawa
All infrastructures are owned by Toba’s giving significant operating
leverage vs other concessions in surrounding areas
12
Substantial Reserves and Resources to
Support Production Expansion
Reserves and resources upside from the conversion of resources to reserves and further exploration of
concession areas
Reserves (1)
Resources (1)
MM Tonnes
MM Tonnes
IM
15.0%
TMU
5.4%
Coal Reserves and Resources (1)(2) (JORC)
Coal Reserves
TMU
18.2%
(MM
Tonnes)
IM
15.7%
ABN
79.6%
Total: 147 MM Tonnes
ABN
66.1%
Coal Resources
Proved
Probable
Total
Reserves
Measured
Indicated
Inferred
Total
Resources
ABN
70
47
117
73
70
13
156
IM
11
10
22
24
10
4
37
TMU
5
4
8
9
8
26
43
Total
86
61
147
106
88
43
236
Total: 236 MM Tonnes
Notes:
1. Differences in totals are due to rounding
2. The Runge Report for ABN is as of 31 December 2011, the PT SMG Consulting Report for IM is as of 1 January 2012 and the Marston Report for TMU is as
of 31 October 2011
13
Significant Portion of Area still Unexplored
IM
ABN
TMU
Note:
Areas already explored
• Explored 3,704 of 7,087 hectares of its concession areas (52% of total concession area) and drilled 3,512
boreholes as of 31 December 2011
• Additional JORC coal reserves and resources expected to be discovered, especially at TMU where only 680
hectares out of 3,414 hectares of the concession (20% of TMU concession area) have been explored
14
Strong Relationships with Multinational Customers
Major customers provide the stable
business support for Toba’s marketing…
… minimum marketing fees because Toba
handles our own marketing internally
Major Customers
Toba’s Marketing Operations
Central Marketing Operations of all 3
subsidiaries
Internally developed customer base that
allows Toba to have low marketing costs
Balance mix of long term contracts, short
term and spot
Active participation in reputable
conference and trade shows to promote
the Toba brand
DRAGON ENERGY GROUP
Enhance marketing strategy to sell
directly to end-users
15
3
Business Overview
16
Recent Coal Market Update
China’s Economic Recovery
Coal Prices Rebound
Range-bound US$88 -95/ton
2012
2012
2013
Source: Bloomberg
Source: Platts
•
Coal Prices have bounced back from
high 70’s in 4Q 2012 and are rangebound at US$88 – 95/ton in early 2013
•
China’s economic recovery rebounded in
4Q 2012 as China is the largest buyer in
the global seaborne market
17
Strategic Initiatives to Manage Changing Environment
Returning future
Profitability
Level
Strategic Initiatives / Response to Changing Coal Prices
1
Manage cash costs: Lower SR,
Shorten Dump Distance
2
3
Construct hauling road from
TMU to IM
Share current infrastructures :
CPP & Jetty & lower costs
4
Centralize fuel supply
5
6
Optimize sales through hedging
activities
Increase our reserves through
acquisition and exploration
18
Toba’s Milestone 2013
• IM entered into
new Mining
Contract with
RPP for 5 years
Jan’13
• Hauling Road TMU – IM
has been completed
ahead of schedule
• New CPP in IM
expected to be
completed
• TMU Production ready
for ramp up to 80 - 100 K
tons/mo
• Indomining
Capacity expected
to increase up to 6
MMTPA
Apr’13
2007
May’13
2008
• TMU set up mine
operations in
block 4
Sept’13
………..
2009
2010
Oct’13
2011
2012
• 2nd underpass in
ABN expected to
be completed
• Border-mining in
ABN & IM
commenced
Toba is on track in integrating its operation and infrastructure
capabilities
19
Business Strategies
1
2
3
4
5
Integration of three
(3) mines
Organically increase
coal production levels
Increase coal reserve
and resource
Strengthen existing
and develop new
customer
relationships
Continue to focus on
health and safety,
environmental track
record and
commitment to CSR
• Benchmarking and
sharing between
departments and
functions
• Expand coal production
through increased
production and mine
development activities
• Optimize and
coordinate mine
planning and logistics
• Strengthen
relationships with third
party mining
contractors and work
closely with them to
improve their
productivity
• Continue exploration
activities to increase
proven and probable
reserves as only 52%
has been explored to
JORC standard
• Supply a higher
proportion of sales
volume to end users,
while maintaining
relationships with
existing coal traders
• Consider opportunities
to acquire coal
concessions with
significant reserves
• Target customers in
Japan, Taiwan, South
Korea, China, Vietnam
and Hong Kong, South
East Asia and India
• Centrally coordinate
and streamline
corporate finance,
legal, human resource
and CSR functions
• Maintain and enhance
high international
operating standards,
utilize automated
mining methods to
minimize accidents and
enhance safety
• Foster community ties
through development
programs as well as job
creation
• Joint mine plan and
infrastructure sharing
Growing Reserves and Maintain Profitability at Different Cycles
20
4
Operational & Financial Highlights
21
Toba Bara Operational Performance
Quarterly Production & Stripping Ratio
Thousand Tonnes
Stripping Ratio continues
to decline
Pre-stripping activity was lower in
1Q13 vs 1Q12, causing lower SR
on yoy basis. Yoy production was
higher due to lower rainfall while
dump distance fell from 2.3km in
1Q12 to 1.6km in 1Q13
Production Summary
1Q12
1Q13
Change
Comments
Source: Company data
Sales
(million ton)
Production
(million ton)
Stripping
Ratio (x)
1.1
1.4
27%
Sales are mainly contributed by ABN and remain flat at 5.5
million tonnes per year for two consecutive years
Production rose 18% to 1.3 milllion due to lower rainfall.
Contributions: from ABN 0.93 million tons, from IM 0.28
million tons and from TMU: 0.08 million tons
1.1
1.3
18%
17.7
15.2
-14%
Stripping ratio was higher in 2012 primarily due to prestripping activities in 1H 2012 in all three (3) mines, and
delay caused by higher rainfall
22
ABN Operational Performance
Production & Stripping Ratio
Thousand Tonnes
IM
Production volume
1,500
Stripping Ratio
17.6x
16.8x
ABN
13.7x
16.6x
17.1x
15x
14.2x
14.5x
1,000
TMU
20x
12.6x
11.1x
774
768
10x
1,141
1,078
884
1,078
1,224
1,225
925
500
5x
1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012
1Q2013
Key Highlights
PT Kutai Energi
Despite significant changes in coal market price, production
grew 17 % YoY. ABN Operation in 1H2012 was impacted by
higher mining SR and higher rainfall
Operational advantage & focus
2
1
Short coal hauling
distance 4km
3
High Built Crusher
Cap 10 mm ton/year
Barge Loading Jetty
Loading Speed of up to
1,800 ton/hour
4
Under Pass:
Capitalizing on Infra
Strength
23
IM Operational Performance
Production & Stripping Ratio
Thousand Tonnes
Production volume
500
Stripping Ratio
14.6x
ABN
14.5x
10.5x
10.1x
250
8.6x
TMU
291
15x
13.1x
394
8.9x
378
11.2x
10x
8.1x
347
190
236
265
272
278
0
5x
1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013
Dump
Distance(m)
2,809
2,822
2,530
2,550
2,564
2,547
2,179
2,178
1,724
PT Kutai Energi
Key Highlights
IM operation was impacted by higher mining SR and lower level
of equipment productivity from contractor
IM appointed PT RPP Contractor Indonesia replacing SIS
starting January 2013
IUPOP has been extended until 2023
Operational advantage & focus
2
1
Short coal
hauling dist. < 5km
4
3
CPP Ramp up to
6MM TPY
Conveyor for TMU
& Others
Cross Border
Mining with ABN
24
TMU Operational Performance
Production & Stripping Ratio
Thousand Tonnes
IM
Production volume
100
ABN
Stripping Ratio
45.6x
17.0x
75
50
10.8x
50x
11.2x
14.4x
24.5x
30x
25
20x
39
23
0
PT Kutai Energi
40x
59
85
90
84
10x
1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013
0
0
0
Key Highlights
TMU started pre-striping in 4Q 2011 until 2Q 2012. High level
of rainfall caused higher stripping ratio
Further drilling is expected to increase reserves. Our internal
estimation expects additional reserves of approximately 7
million tons, hence totaling 15 million tons
Operational advantage & focus
2
1
Build ~16km
Road to ABN
3
Exploration in
West Block
Integrate CPP
Ops with IM
25
Snapshot of Financial Performance –
1Q 2013 vs 1Q 2012
1Q 2012
1Q 2013 Change %
•
Coal Production Volume
increased 17% QoQ mainly due
to lower rainfall and better
overall stripping ratio
•
Sales Volume increased by 27%
due to increase in production
volume and clearance of our
2012 ending inventory
•
FOB vessel cash costs
decreased by 18% due to lower
stripping ratio and shorter
dumping distance
•
EBITDA decreased by 38%
mainly due decrease in ASP of
23%
Operation
Sales Volume
million ton
1,1
1,4
27%
Coal production
million ton
1,1
1,3
17%
Striping Ratio
x
17,7
15,1
-15%
NEWC Index
US$/ton
114
93
-18%
Sales
US$'000
97.563
94.942
-3%
Gross Profit
US$'000
21.077
14.389
-32%
Operating Profit
US$'000
14.061
7.742
-45%
EBITDA
US$'000
15.131
9.445
-38%
Net Income
Net Income after Minority
Interest
US$'000
US$'000
10.658
5.100
5.972
3.210
-44%
-37%
Financials
Ratio
Gross Profit Margin
%
21,6%
15,2%
-30%
EBITDA Margin
%
14,4%
8,2%
-43%
Net Profit Margin
%
11%
6%
-42%
US$/ton
86,5
66,2
-24%
US$/ton
67,1
55,1
-18%
(a)
Per Ton Basis
ASP
FOB Vessel Cash Cost
Notes (a)
(a)
FOB vessel Costs: COGS, Selling Expenses excluding depreciation
and amortization
(b) 1Q 2013 Financials is unaudited
26
Debt and Cash Position
Net Debt Position
US$ Mn
Net Debt to Equity
Net Cash
2%
34%
6%
11%
Net Cash
27
5
CSR & Environmental Highlights
28
Toba is Committed to Being a Responsible
Corporate Citizen
• Toba is continuously developing and implementing its corporate social responsibility programs
– Creating educational opportunities for local communities including renovating schools, training teachers,
providing post-graduate educational assistance and creating a literacy program for adults and a scholarship
program for school-aged children
– Providing health services to the local communities
– Helping groups of farmers plant crops of vegetables and bamboo and assisting with land rehabilitation
– Creating local employment opportunities by sourcing some of the Company’s site workforce from the
neighboring areas
Providing Health Services
Creating Educational Opportunities
Helping Farmers Plant Crops
29
Awards
Ernst & Young Social
Entrepreneur of the
Year 2011
East Kalimantan Green
Proper Mining Award
ABN
East Kalimantan Blue
Proper Mining Award
Indomining
30
Appendix
31
ABN: Coal Concession Overview
Overview
• Area: 2,990 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
IM
• Type of license: IUPOP
• Expiry date: 1 December 2029
• Commencement of production: September 2008
• 2012 production: 4.4 MM tonnes
ABN
• Mining consultant: PT Runge Indonesia
ABN
Jetty
Operations
TMU
• Current production capacity (31 December 2012):
– Crusher: 10 MM tonnes p.a.
– Conveyor: 10 MM tonnes p.a.
• Produces two varieties of blended thermal coal
– ABN 52: Marketed
CV(1)
of 5,200 kcal / kg GAR
– ABN 55: Marketed CV of 5,500 kcal / kg GAR
– ABN 58 : Marketed CV of 5,800 kcal / kg GAR
• Substantially all of the owners of the land within ABN’s
concession area have been compensated and ABN has been
granted the exclusive right to mine those areas
Marketing
• Historically sold between 50%-100% of its annual production through
long-term (longer than 1 year) with coal trading companies
– The remainder were sold on the spot market
32
Note:
1. Calorific value
IM: Coal Concession Overview
Overview
IM
Jetty
• Area: 683 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
IM
• Type of license: IUPOP
• Expiry date: 22 June 2013 (in the process of renewing its
IUPOP; expects to receive renewal confirmation through 2022
by end of 1st quarter 2013)
• Production commencement: August 2007
ABN
• 2012 production: 1 MM tonnes
• Mining consultant: PT SMG Consultants
TMU
Operations
• Current production capacity (31 December 2012):
– Crusher: 3.0 MM tonnes p.a.
– Conveyor: 4.5 MM tonnes p.a.
• Produced one variety of blended thermal coal “Indomining”
with marketed CV(1) of 5,700 kcal / kg GAR in 2012
– May produce additional varieties of blended thermal coal in
the future
• Has compensated the majority all of the owners of the land
within its concession area for their land and has been granted
the exclusive right to mine those areas
Marketing
• Historically sold approximately 50% of its annual production through
short-term (one year or shorter) contracts with coal trading companies
– Clients include Glencore, Flame, Peabody, Dragon, Aempire
• The remainder are sold on the spot market
33
Note:
1. Calorific value
TMU: Coal Concession Overview
Overview
• Area: 3,414 ha
• Location: Loa Janan, Muara Jawa and Sanga-Sanga,
Kutai Kartanegara, East Kalimantan
• Type of license: IUPOP
Jetty NDM
• Expiry date: 14 December 2023
• Commencement of production: October 2011
• 2012 coal production: ~257,000 tonnes
IM
Sungai Sangasanga
• Mining consultant: Marston & Marston
ABN
Operations & Marketing
• Current production capacity (31 December 2012):
Planned haul road
to ABN and IM (25 km)
TMU
– Crusher: 1.4 MM tonnes p.a.
• Produces one variety of blended thermal coal “Trisensa47”, with marketed CV(1) of 4,700 kcal / kg GAR
– May produce additional varieties of blended thermal
coal in the future
Planned haul
road and jetty
(17 km)
Pulau Seribu
Jetty KE
Sungai Dondang
34
Note:
1. Calorific value