ICBP

Since government decreased subsidy for fuel in last of 2014, the inflation rate started to hike in to higher rate. The circumstance has been worst as the Fed started to increase its fund rate in first quarter of 2015. The psychological effect damaged rupiah currency rate to US dollar. Now rupiah currency is approximately at 12,000 – 13,000 per US dollar. 

As the result of that, the price of goods and services commonly increase and the labor unions in several places ask to the government to increase minimum wages payment to improve their purchasing power.

 Since the average total cost exceeds the marginal revenue, there will be a gap which is its economic loss in the short run. There may be an economic loss for company in oligopoly market type when its average total cost increase due to higher total fixed cost and higher total variable cost.  The cost of fuel for energy plantation has increased and so did with the cost of wages.

INDOFOOD CONSUMER BRANDED PRODUCT - ICBP

The company has done several acquisitions of several brands such as club, Pepsi and the Ichi  Ocha, each of the products is reputable product in each market. The company is controlled by its parent company PT Indofood sukses makmur which is owned by salim group and families. The president director is Anthony salim which is also the hold the same position in its parent company.

The company used its fund from IPO for shareholder loan payment and financing the capital expenditure. According to annual report of 2013, the remaining balance of its fund was 1.97 trillion rupiah which was unused. 

Instant noodle is still the favorite product of the company, in 2013, its contribution to revenue was 67.8 % of total revenue. The second largest contribution was its dairy product with 18.6 % of total revenue. The new segment in 2013 was beverage segment which had given 0.9 % of sales contribution.

The key driver of sales growth is instant noodle product division. It is always introducing new taste and new product which is made based on demand from recent market. In 2013, the sales growth is 16 % up than sales of 2012. The sales growth in 2012 was 11.4 % and it was slower than 2013.

The gross margin of 2013 had fallen from about 27 % in to 26 % so did with net profit margin from about 10 % in to about 9 % as we can see those ratios in the table at below. The higher cost of fixed cost and variable cost may decrease the gross margin due to higher inflation rate.

The cash cycle ratio was slightly changing but it was still stable, it is indicated that the company has strong position in the market.

The acquisition of brands such as club and pepsi are expected increase the income growth and decrease its dependency to noodle sales segment for sales contribution which was more than 50 % of total sales.

	2012	2013	2014F	2015F	2016F
Cash	5,487,171.0	5,526,173.0	6,544,136.8	8,062,533.7	9,824,464.9
Short Term Investment	21,280.0	72,000.0	72,000.0	72,000.0	72,000.0
Trade Receivable	648,037.0	738,533.0	819,771.6	909,946.5	1,010,040.6
Inventories	1,816,459.0	2,868,722.0	3,222,130.1	3,576,564.4	3,969,986.5
Other Current Asset	1,949,715.0	2,116,287.0	2,349,078.6	2,607,477.2	2,894,299.7
Total  Curr Asset	9,922,662.0	11,321,715.0	13,007,117.1	15,228,521.8	17,770,791.8
NPPE	3,869,239.0	4,844,407.0	5,587,955.3	6,061,444.7	6,490,320.8
Other Non Curr Asset	4,027,983.0	5,101,348.0	5,662,496.3	6,285,370.9	6,976,761.7
Total Non Curr Asset	7,897,222.0	9,945,755.0	11,250,451.6	12,346,815.6	13,467,082.5
Total Asset	17,819,884.0	21,267,470.0	24,257,568.7	27,575,337.5	31,237,874.3
Short Term Debt	582,625.0	979,380.0	1,000,000.0	1,000,000.0	1,000,000.0
Account Payable	1,193,345.0	1,628,821.0	1,829,481.3	2,030,724.2	2,254,103.9
Curr Portion of Long term debt	39,745.0	157,370.0	200,000.0	230,000.0	250,000.0
Other Curr Liabilities	1,832,354.0	1,931,012.0	2,143,423.3	2,379,199.9	2,640,911.9
Total Curr Liabilities	3,648,069.0	4,696,583.0	5,172,904.6	5,639,924.1	6,145,015.8
Long Term Debt	640,613.0	1,383,292.0	1,500,000.0	1,700,000.0	1,900,000.0
Deferred Taxes	530,291.0	498,504.0	498,504.0	498,504.0	498,504.0
Other Non Curr Liabilities	1,016,550.0	1,423,360.0	1,579,929.6	1,753,721.9	1,946,631.3
Total Non Curr Liabilities	2,187,454.0	3,305,156.0	3,578,433.6	3,952,225.9	4,345,135.3
Total Liabilities	5,835,523.0	8,001,739.0	8,751,338.2	9,592,150.0	10,490,151.0
Minorities	572,186.0	678,949.0	678,949.0	678,949.0	678,949.0
Common Share	583,095.0	583,095.0	583,095.0	583,095.0	583,095.0
Additional Paid Up Capital	5,985,469.0	5,985,469.0	5,985,469.0	5,985,469.0	5,985,469.0
Retained Earning	4,837,947.0	5,978,662.0	8,219,161.5	10,696,118.5	13,460,654.3
Other	5,664.0	39,556.0	39,556.0	39,556.0	39,556.0
Share holder Equity	11,412,175.0	12,586,782.0	14,827,281.5	17,304,238.5	20,068,774.3
S Equity & Minority Interest	11,984,361.0	13,265,731.0	15,506,230.5	17,983,187.5	20,747,723.3
Total SE,MI & Liabilities	17,819,884.0	21,267,470.0	24,257,568.7	27,575,337.5	31,237,874.3
Revenue	21,716,913.0	25,094,681.0	27,855,095.9	30,919,156.5	34,320,263.7
COGS	-15,666,785.0	-18,351,931.0	-20,612,771.0	-22,880,175.8	-25,396,995.1
Gross Profit	6,050,128.0	6,742,750.0	7,242,324.9	8,038,980.7	8,923,268.6
Operating Expense	-2,920,894.0	-3,643,809.0	-4,044,628.0	-4,489,537.1	-4,983,386.1
Depreciation n amortization	-283,543.0	-364,569.0	-456,451.7	-526,510.6	-571,123.9
Other Income / - expense	235,840.0	399,592.0	443,547.1	492,337.3	546,494.4
Interest Expense	-53,697.0	-165,225.0	-208,801.7	-225,200.0	-243,200.0
Pretax Income	3,027,834.0	2,968,739.0	2,975,990.7	3,290,070.3	3,672,052.9
Taxes	-745,463.0	-733,699.0	-735,491.2	-813,113.3	-907,517.1
Net Income	2,282,371.0	2,235,040.0	2,240,499.5	2,476,957.0	2,764,535.8
Financial Ratio	2012	2013	2014F	2015F	2016F
ROA	12.8	10.5	9.2	9.0	8.8
ROE	20.0	17.8	15.1	14.3	13.8
Gross Margin	27.9	26.9	26.0	26.0	26.0
Profit Margin	10.5	8.9	8.0	8.0	8.1
Current Ratio	2.7	2.4	2.5	2.7	2.9
Debt to asset	0.1	0.1	0.1	0.1	0.1
Interest Coverage	62.7	21.2	17.4	17.9	18.4
Dividend Pay Out Ratio	47.9	-	-	-	-
Days Payable	27.8	32.4	32.4	32.4	32.4
Days Inventory	42.3	57.1	57.1	57.1	57.1
Days Receivable	10.9	10.7	10.7	10.7	10.7
Free Cash Flow		-264,387.0	838,005.8	1,288,396.9	1,541,931.2
EBITDA	3,365,074.0	3,498,533.0	3,641,244.1	4,041,780.9	4,486,376.8
EPS	374.0	382.0	384.2	424.8	474.1
Revenue Growth	11.4	15.6	11.0	11.0	11.0