Project Iron

Discussion Material

This document is confidential and is intended solely for the use and information of the party to whom it is addressed.
Company Profile

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Products

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 Selected Past Projects
Iron

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Historical Financials

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Historical Financials

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Historical Financials

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Historical Financials

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Historical Financials

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 Historical Financials - Expenses
60,000

53,505
50,441
50,000 49,266

15,387 22,206
18,933
40,000 Others

34,248

5,828
30,000
6,677
8,450 Utility
16,690

20,000 15,823
12,872 Bank Fees, Provision &
12,140
4,422 Penalty
1,449
10,000
Wages and Salary
12,228 11,688 10,710 11,960

0
2012 2013 2014 2015

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Capital Needs 2017

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 Investment Thesis*
x% X% X%
Asia Summit RDPT Others

GOALS
Appraisal Investors Family 1. Earmark injection
Asset and Equity X% X% to future projects
2. Maintain debt
3. Increase utilisation
+ 400 4. Increase efficiency
IRON NOW IRON NOW IRON AFTER
5. Cost
1,100 900 1,200 900 1,600 900 competitiveness
6. Focus on EBITDA
200 300 700

Pre Money IPO Placement

Valuation Valuation Valuation
IRON AFTER IRON AFTER+ IRON AFTER+
1,600 900 1,600 900 1,600 900
700 700 1.5X BV 700 2X BV
1,050 1,400
*in billion rupiah
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 Investment Thesis
• Iron went into liquidity issue in 2016 due to the slow down of infrastructure
activities and investments.
• Iron’s investments, ASRM factory and the “The Steel” office building in Jakarta
failed to bring enough cash flow to the company. Therefore the company
restructured the working capital and investment loan from its lenders.
• However, with the increase value of the property, there is an excess asset
value vs liabilities. Therefore the company needs to restructure its capital,
inject fresh equity and rebuilding its business.
• Iron would need equity injection of IDR 400 billion to cover working capital
needs in the net 3 years as well as reserve for interest and principal payment.
Once the credit rating recovered, Iron would be able to increase debt
financing and continue using bank financing for its working capital needs.
• The fresh capital injection will be used in financing projects, increasing EBITDA
while maintaining EBITDA margin, and strengthen its capital position.
• In three years, Iron would be in a lot better position and ready to provide an
exit opportunity for its investors; both in IPO or private placement.
• Iron produces highly specialised products which are irreplaceable to
infrastructure SOEs. This fact provides a unique selling point for the exit.
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 Iron Business Model
Other Holdco/ Super Holding
Investors Public
Individual Indoco

Minority Bridges/
Toll Road
Service/Maintenance Iron Group, Ownership Infrastructure
Company Tbk Power
Powerplant
Transmission
Provide Capacity
to Fabrication Group
End-User/Retail EPC Companies Fabrication Semi Upstream
Sales JV/Cooperation* Group Raw Material
Modular
Iron Iron ASRM
House

Auto-Parking Iron – MISI Iron – MISI HBRM

Prefab Lowering inventory

Iron – SM Iron – BLG
Products JIT/Low COGS

Down Stream Upstream

*Chinese EPC partners: 1.Grid state china 2. Hypec Power China 3.CGGC
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 RDPT – Bahana

Pension Funds Pension Funds Pension Funds EXIT

BUMN Karya
RDPT Family Infra SOE

Equity + MCB

IRON Integration of
Business

Property
Assets
Fabrication EPC ASRM

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 ISSP.JK Comparisons
Company Industry Sector Iron Current Target
PER 9.53 25.72 19.33 PER 15
Price to Sales 0.53 1.09 100.64 Price to Sales
Price to Book 0.64 1.28 2.43 Price to Book 1.5
Price to CF 5.40 10.60 27.66 Price to CF
LT Debt/Equity 8.82 271.96 40.58 LT Debt/Equity
Gross Margin 21.11 19.91 28.43 Gross Margin
EBITDA Margin 22.50 - - EBITDA Margin
Net Margin 5.50 -7.80 9.89 Net Margin
Inventory Turn 1.26 3.02 5.21 Inventory Turn
ROA 3.16 -2.17 7.63 ROA
ROE 7.03 -5.30 11.38 ROE
ROI 5.80 -3.72 9.22 ROI

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ISSP.JK Historical Price

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 Appendix

This document is confidential and is intended solely for the use and information of the party to whom it is addressed.
 6. Industry Overview
Steel Demand in Indonesia

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 7. Industry Overview
PLN Fast Track Program

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 8. Industry Overview
Prefabricated House and Building

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9. Major Contract 2017

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10. Major Hot Prospect 2017

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11. Major Project Prospect 2017

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 12. Sumatra 500KV Backbone System
In the end of 2015, the Company was awarded ~ IDR 1 Trillion contract from a prominent state owned
enterprise to supply 500 kV transmission lines in Sumatera.

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 13. Regular Sales Projection 2017
The projection of regular sales in 2017 is based on the company historical
performance for the last 2 years

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15. City of Surabaya Infrastructure

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16. City of Surabaya Development Plan

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18. Property Valuation – Head Office

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 Thank You
Questions and Inquiries:
andresylvestre@thesylvestre.net

This document is confidential and is intended solely for the use and information of the party to whom it is addressed.