ACNielsen ConsumptioReport2017 Inv

INDONESIA MARKET
- WAITING FOR
THE WAVE
Mar 2017
Growth model Indonesia:
Consumption + Investment
GDP CONTRIBUTION BY SECTOR GDP SECTOR GROWTH
CONSUMPTION
HOUSEHOLD
5.1 5.5 5.4 5.1 4.7 5.0 5.0 4.9 4.9 5.0 5.0
4.3
32
2010 2011 2012 2013 2014 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Q3’16 55
6.9 6.6 7.3
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
5.5 6.3
GOVERNMEN
T SPENDING
4.0 4.5
2.0 2.2 2.3 2.9
9
-3.0
Export/GDP : 18% 2010 2011 2012 2013 2014 | Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Import/GDP : 17%
Net Export : 1%
INVESTMENT
8.9 9.1
HH Consumption Gov. Spending 6.7 6.9
5.3 4.4 4.6 5.6 5.1
4.1 3.6 4.1
Investment Net Export/Import
Others
2010 2011 2012 2013 2014 | Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 2
Source: BPS
ht ©2016 The Nielsen Company. Confidential and proprietary.
NO APPETITE
FIT BUT
3
GDP growth has been oscillating
GDP Growth (%) Inflation MAT (%)
2011 - 2014 2015 2016

8.4 8.4
FY 4.8 Target FY 5.3 7.3
6.2 6.0 Actual FY 5.02% 6.8
5.6 6.4
5.0
4.7 4.7 4.7
5.0 4.9 5.2 5.0 4.9
4.3 4.5
3.8
3.4 3.4
3.1 3.0
FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY FY MAR JUN SEP DEC MAR JUN SEP DEC

11 12 13 14 15 15 15 15 16 16 16 16 11 12 13 14 15 15 15 15 16 16 16 16
Sources: Bank of Indonesia and BPS

Sources: Bank of Indonesia 4
CCI Indonesia Q4 2016
still in world TOP 5
down 2 point
Indonesia goes to
4th from 3rd, by USA
Note: Survey is based on respondents with Internet access. China survey results reflect a mixed methodology. Index levels above and below 100 indicate degrees of
optimism/pessimism.
Source: Nielsen Global Survey of Consumer Confidence & Spending Intentions, Q4 2016
Consumer Confidence Survey – Q4 – 2016 Field Dates: Oct 31 – Nov 18, 2016 5
Newly RISING CONCERNS : TOLERANCE and POLITICS
Q3 2016 Q4 2016
THE ECONOMY (31%) THE ECONOMY (26%)
WORK/LIFE BALANCE TOLERANCE TOWARDS

(21%) DIFFERENT RELIGIONS (25%)
TERRORISM (17%) POLITICAL STABILITY (25%)
PARENT’S WELFARE & WORK/LIFE BALANCE

HAPPINESS (16%) (15%)
POLITICAL STABILITY (13%) TERRORISM (13%)
6
Top 5 saving strategies : LESS, DELAY
Q3 2016 Q4 2016
DELAY UPGRADING SPEND LESS ON NEW
TECHNOLOGY (47%) CLOTHES (49%)
SPEND LESS ON NEW CUT DOWN ON OUT-OF-HOME

CLOTHES (47%) ENTERTAINMENT (46%)
DELAY THE REPLACEMENT OF DELAY UPGRADING

MAJOR HOUSEHOLD ITEMS (42%) TECHNOLOGY (43%)
CUT DOWN ON OUT-OF-HOME CUT DOWN ON HOLIDAYS/

ENTERTAINMENT (47%) SHORT BREAKS (40%)
CUT DOWN ON HOLIDAYS/ CUT DOWN ON TAKE-AWAY

SHORT BREAKS (42%) MEALS (35%)
7
FMCG volume growth has diminished in H2

Retail Audit Indonesia Total | 55 Categories | Growth | FY 2015 to FY 2016
14.715.6 13.613.1
11.5 11.111.411.811.211.2 12.2
10.9 10.111.1
6.9 9.710.1
2.7 7.7 0.6 0.6 1.0 1.8 5.5 7.0 3.8 5.0 7.6 7.7 5.9 8.5
3.8 5.1 8.3 8.1 5.8 5.5 4.0
3.4 11.210.811.210.29.5 9.1 8.7 1.6 2.6 5.2 6.1 3.8 1.6 5.0 1.8 2.0 3.0
8.8
4.4 5.4 7.1 7.1 6.3 6.0 5.3 5.0 5.0 4.4 4.0 3.9 4.4 3.4 4.0 3.6 0.4
3.7 3.8
-0.1 -0.8
16
De 5
15
M 6
No 6
Au 5
M 5
M 5
15
6
15
'16
6
15
16
6
5
'16
15
16
No 5
M 6
16
5
r' 1
1
g'1
1
t'1
l-1
l' 1
-1
r-1
t-1
c'1
-1
c-1
v'1
b-
p-
n'
g-
v-
n-
n-
b'
p'
n'
20
20
ar
ay
ar
ay
Ap
Oc
Ju
Ju
Ap
Au
Oc
De
Ja
Fe
Se
Fe
Se
Ju
Ju
Ja
8
Traditional trade (GT) good performance has faded too.
Most alarming is the weakening national MT growth …

Retail Audit Total Indonesia Modern Trade | 55 Categories
17.6 13.1
9.8 8.6 11.7 9.8 10.3
14.4 6.1 6.2 6.4 5.8 7.5 5.8
3.6 8.9 11.1 4.2
4.6 2.2 6.3 7.0 2.3 4.8
6.2 4.1 2.4 0.8 2.2
3.9 3.2 2.9 3.9 3.6 3.3 2.0 3.9 2.3 3.4 2.7 3.4 3.5
Total Indonesia General Trade | 55 Categories
13.3 11.0 14.0 9.5 10.0 10.1

7.2 8.4 5.9
2.4 5.6 4.2
4.3 7.7 3.1 4.4 5.5 3.8
6.0
3.9 1.1
10.9 2.5 6.6 6.3 1.6 2.0 0.3 0.1
4.7 5.3 5.1 4.6 4.0 4.0 4.1 3.9 3.9 3.8 3.8
-0.1 -2.7
2015 2016 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16
9
Minimarket : The growth engine is also loosing steam

Scan Track Indonesia Mini KA | 113 Categories
21.4 24.3
20.0 19.3 19.5
16.0 14.4 18.8 11.8 10.0 9.2 9.9
8.0 6.9
15.8 6.1 19.3 17.0 16.4 16.4 16.7 19.7 1.9 7.8 6.3 4.6 5.5 5.9 3.8
0.2 8.3 2.1 1.9 3.5 2.9 2.8 4.6 0.8
1.1 4.0 3.7 3.4 3.8 4.0 3.1
Indonesia Super KA | 113 Categories
5.9 2.3 13.7
1.5 0.2 0.8 1.2
17.5 -0.9
7.9 -2.8 -3.3 -0.8 12.3 -3.9 -0.1
0.7
0.8 1.8 -4.9
-4.6 2.1
1.6 -2.9 1.3
1.0 1.4 2.7 -2.6
0.2 -6.6 2.5 2.5 -1.4 2.9 -0.6
1.6 -2.1 1.8
-11.6 -8.7 -18.6 -8.3
-18.4 -5.8
Indonesia Hyper KA | 113 Categories

5.7 3.8 10.3 7.3
0.4 12.4 11.0
4.9 6.2 5.2
0.8 2.2
-4.4 -1.7
-2.4 -2.1 -0.7-1.6 1.9
-1.6 -6.7 -2.1 -3.8 -2.8 -3.7 -1.3 -5.4
-3.4 -0.2 -6.2
-3.0
-2.4 -2.9 -8.3 -2.0 -8.7 -3.2
-2.2 -3.8 -1.5 -14.9 -5.7 -8.9
-9.6
2015 2016 -18.7 Agt-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 10
March 2017 still BAD
Retail Audit Total Indonesia Market | 55 Categories

11.3 13.6 13.1 10.1 7.7
7.7 7.6 9.7 5.9 8.5
5.8 5.5 4.0 6.2
3.9 8.3 8.1
3.4 6.2 2.6 5.2 6.1 3.8 1.6 5.0 1.8 2.0 0.4 3.0 2.3
2.9 2.6
4.4 5.1 0.6
3.3 5.3 5.0 5.0 4.4 4.0 3.9 4.4 3.4 4.0 3.6 3.7 3.8 3.9 -0.3
3.2 -0.2
2.8
-0.8
Total Indonesia Modern Trade | 55 Categories
17.6
11.8 11.7 13.1
8.6 9.8 10.3
3.7 14.4 6.1 6.2 6.4 5.8 7.5 4.2 5.8 4.4 5.6
4.6 8.3 8.9 2.2 6.3 7.0 11.1 2.3 2.4 4.8 3.4 2.2 1.1
3.9 3.5 0.7
3.0 3.2 2.9 3.9 3.6 3.3 2.0 3.9 4.1
2.3 3.4 2.7 0.8 3.5 1.0 2.7 3.2
3.4 -1.6 2.5
Total Indonesia General Trade | 55 Categories
14.0
11.0 11.0
7.2 8.4 9.5 10.0 10.1
7.6
5.0 4.1 4.3 7.7 3.1 4.4 5.5 3.8 5.6 6.0 5.9 4.2 3.9 4.3
2.5 1.1 3.5 0.9 0.7
4.7 6.0 0.6
3.5 6.6 6.3 5.3 5.1 4.6 4.0 1.6
4.0
2.0
4.1 3.9 0.3
3.9 0.1
3.8 3.8 4.1 3.4 2.6
-0.1 -2.7 -2.0
2016 Q116 Q117 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16 Oct'16 Nov'16 Dec'16 Jan'17 Feb'17 Mar'17 11
Q1 ad spending is also extremely low
14%
7%
8% 35.0
31.4 11%
-1% 26.8 17%
27.1 32.0 Q4
28.1 29.2 10%
7% 4% Q3
26.3
Q2
36.2
12% 29.8 31.9 Q1
26.7 7% 13%
31.5 2% 32.1
22.3 14% 25.6 -1% 25.5 24%
2013 2014 2015 2016 2017

Source: Nielsen Advertising Information Services (AIS) 2012 – Q1 2017
Commercial product ad spending on TV & print based on gross rate card (doesn’t calculate discount, promo, bonus, etc.), in Rp Trillion 12
Q1 2017 is the WORST : 3.9%
Retail Audit Indonesia Total Grocery | Total 55 FMCG Categories | Q117 vs Q116
55 FMCG FOOD NON FOOD
11.3 11.2 11.6
7.7 8.2
6.7 6.0
6.2
3.9 6.3 4.7
3.3
0.6
4.0
1.2
1.9 2.2
4.4 5.1 4.3 4.9 4.7 5.6
3.3 3.5 2.9
-0.7
2016 Q116 Q117 2016 Q116 Q117 2016 Q116 Q117
Unit Value Change Volume Change Nominal Growth
13
Instant noodle, beverages hit minus growth
Indonesia Total Grocery | Total 55 FMCG Categories | Q117 vs. Q116
-3.4
Instant Noodles Volume Growth % 4.7
0.5
-0.6
Coffee Value Growth % 8.8
7.0
-0.3
Powder Milk Average Price Increase -13.2
-1.1
10.2
Biscuit 5.4
11.1
10.4
Cooking Oil 4.0
22.0
-0.9
Mineral water 8.8
5.4
-10.5
Tea-RTD 4.7
-7.4
7.8
Baby Diapers -4.8
6.4
15.1
Liquid Milk 6.5
16.7
2.9
Snack 6.6
8.7 14
Other categories follow minus growth
Indonesia Total Grocery | Total 55 FMCG Categories | Q117 vs. Q116
1.3
Sweetened Condensed Milk Volume Growth % 1.0
1.5
-3.0
Skincare Value Growth % 5.5
2.9
-2.6
Toilet Soap Average Price Increase 8.2
0.7
-2.6
Shampoo 7.0
-1.9
-1.7
Detergent 0.6
-0.5
1.6
Stock Soup 7.0
3.8
-2.3
Cologne 5.5
2.6
0.8
Candies 4.4
4.7
-1.2
Toothpaste 3.9
2.5
8.4
Chocolate 9.2
8.4 15
All channels are having bad growth
Retail Audit Indonesia Total Grocery | Total 55 FMCG Categories | Q117 vs. Q116
Indonesia 3.9
Super/Hyper -0.7
Modern Trade 3.7

Minimarket 5.9
Traditional Trade 4.1
16
average
Q1 2017 growth rate is way too low than yearly
17
Q1’17 (3.9%) is worse than 2009 USA crisis
8.4%
11% 11%
Inflation 17% +11.1%
+ 11% +9.6%
+ 4.7%
+ 21.1%
+ 15.2%
+ 17.7%+ 14.3%
+ 13.8%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
18
2009 slowdown 4.5% will repeat ?
6.3 6.5
6.1 6.1 6.2
5.7 5.5 5.6
4.8 5.0 5.0 4.9 5.0
4.5 4.5
3.6
01 02 03 O4 O5 06 07 08 O9 10 11 12 13 14 15 16
19
2017?
Economic growth
How to save
20
ANOTHER QUICK SAVE

• Consumption incentive > No price increases of utilities, gas
• Tax scare > increase trust instead, no buzz just execute silently
• Local investment > No new regulation especially against ease of doing
business
• Wait and see > Tone down in tolerance issue and politics; TNI Polri
be firm and show authority
• Supply chain guarantee > importing raw material products must be
smooth
• Loosing purchase power mid low > government spending, other
incentives
21
Channel growth forecast

extremely low H2 2016 make high H2 2017; acceleration start in Q2
FY 2015 Q1 '15 Q2 ' 15 Q3 '15 Q4' 15 FY 2016 Q1 '16 Q2 '16 Q3 '16 Q4' 16 FY 2017 Q1 Q2 Q3 Q4
National 11.6 7.7 9 4 9 11 13
Indonesia General
Trade
13.3 12.6 13.9 13.2 13.6 7.2 11.0 7.8 7.2 3.0 8 3 7 8 9
Indonesia Modern
Trade
9.8 11.0 11.0 9.1 8.3 8.6 11.8 11.1 6.1 5.8 13 6 14 15 14
Super Hyper 6.6 11.7 9.2 4.5 1.8 -1.0 -0.3 0.4 -3.4 -0.5 2 -2 4 3 6
Mini 11.6 10.6 12.0 11.7 11.8 13.7 18.8 17.2 11.0 9.0 16.8 9 20 20 18
National growth move from flat low single in Q1 to high Q4 Minimarket KA will regain normal growth 25% EOY
GT growth accelerate to high single digit EOY (due to H2 16) Super KA will also return to high single digit by EOY
MT growth same pattern, higher towards EOY Hyper KA will more positive low single digit by EOY
22
GUSTY Q2: LEBARAN
23
2017 festive growth estimate :will got get lower than
2016’s 13%
Scan Track Total Key Account | 75 Festive Categories
Unit Value Change

Volume Change
Festive 2016
8.9
2017 Growth
13-15% 13.4% 4.5
Festive 2016
Festive 2015 period: W/E 17/05/2015 – W/E 02/08/2015

Festive 2016 period: W/E 01/05/2016 – W/E 17/07/2016
38.7 29.8 20.6 16.3

FEST 2012 FEST 2013 FEST 2014 FEST 2015
Source: Nielsen Retail Measurement Services 24
2015 model
I pick this one

Which model is 2017 ?
2016 model
25
POSITIVE OUTLOOK ELEMENTS
• Low inflation (4% - 5%) will provide volume growth opportunity

• MT KA expansion plan (10%-12%) create growth platform
• Commodity (over 50%) increasing price create more purchase power in
Sumatra, Kalimantan
• Continue East Indonesia economic development thru infrastructure,
mining, agriculture, tourism
• April DKI election results, may end of political noise
• Tax Amnesty ends march 31st , freedom to spend (big ticket items ,
property etc)
26

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INDONESIA MARKET

2011 - 2014 2015 2016

FY FY FY FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY FY MAR JUN SEP DEC MAR JUN SEP DEC

Sources: Bank of Indonesia and BPS

WORK/LIFE BALANCE TOLERANCE TOWARDS

TERRORISM (17%) POLITICAL STABILITY (25%)

PARENT’S WELFARE & WORK/LIFE BALANCE

POLITICAL STABILITY (13%) TERRORISM (13%)

SPEND LESS ON NEW CUT DOWN ON OUT-OF-HOME

DELAY THE REPLACEMENT OF DELAY UPGRADING

MAJOR HOUSEHOLD ITEMS (42%) TECHNOLOGY (43%)

CUT DOWN ON OUT-OF-HOME CUT DOWN ON HOLIDAYS/

CUT DOWN ON HOLIDAYS/ CUT DOWN ON TAKE-AWAY

FMCG volume growth has diminished in H2

Most alarming is the weakening national MT growth …

Total Indonesia General Trade | 55 Categories

13.3 11.0 14.0 9.5 10.0 10.1

Minimarket : The growth engine is also loosing steam

Indonesia Hyper KA | 113 Categories

Retail Audit Total Indonesia Market | 55 Categories

Q1 ad spending is also extremely low

2013 2014 2015 2016 2017

55 FMCG FOOD NON FOOD

11.3 11.2 11.6

Unit Value Change Volume Change Nominal Growth

Indonesia Total Grocery | Total 55 FMCG Categories | Q117 vs. Q116

Indonesia Total Grocery | Total 55 FMCG Categories | Q117 vs. Q116

All channels are having bad growth

Modern Trade 3.7

Traditional Trade 4.1

Q1’17 (3.9%) is worse than 2009 USA crisis

2009 slowdown 4.5% will repeat ?

ANOTHER QUICK SAVE

Channel growth forecast

National 11.6 7.7 9 4 9 11 13

GUSTY Q2: LEBARAN

Unit Value Change

Festive 2015 period: W/E 17/05/2015 – W/E 02/08/2015

38.7 29.8 20.6 16.3

I pick this one

POSITIVE OUTLOOK ELEMENTS

• Low inflation (4% - 5%) will provide volume growth opportunity

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