CORPORATE PRESENTATION October 2014

Snapshot of Indonesia: Biggest Archipelago in The World GDP 2013

USD 868.35 billion

GDP per kapita

USD 1,810.31

Population

245.6 million (4th biggest population)

Land area

1,904,443 sq km

Sea area

3,116,163 sq km

Coast line

81,000 km

A young population with rising middle class accounting for more than 56% of the population

2

Prospects and Challenges Prospects • Indonesia is one of the fastest growing economies among G20 countries

• GDP growth in 2013 recorded 5.78% slightly lower than 6.2% recorded in 2012 • Significant FDI inflows and interest of foreign firms to invest in Indonesia • Stable political environment with vibrant democracy • Resilient financial markets with strong macro economic fundamentals

Challenges • Indonesia needs structural reform on infrastructure • Logistics and supply chain remains a challenge in this large archipalego • More progress needed on Infrastructure : sea ports, airports, toll road, railways, electricty and telecommunications • Implementation challenges : land clearing, project design, clear coordination between central and local governments and long term financing

3

Infrastructure Bottlenecks and Impact on Costs Logistics cost highest in region and needs improvement  Lack of efficient infrastructure results in high operational costs  Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia (MP3EI) is a nation wide integrated infrastructure development initiative set up in 2011 to implement infrastructure projects  Combination of government projects as well as through Public Private Partnerships (PPP)

Competitiveness of Logistic Industry Country

Rank

Indonesia Competitiveness in Infrastructrure 2013 Rank Pillar of Infra (out of 148 countries)

Singapore

1

Overall Infrastructure

82

Malaysia

29

Quality of roads

78

Thailand

38

Railroads

44

Philippines

52

Ports Infrastructure

89

Vietnam

53

Air transport

68

Indonesia

59

Quality of Electricity

89

Cambodia

129

Fixed telephone lines

82

Source: World Economic Forum, The Global competitiveness report

4

Vision The leading provider of logistic services and supply chain solutions for bulk chemical & energy distribution in Indonesia

5

Business Model Logistic Services and Supply Chain Solutions Extensive Infrastructure across Indonesia

 Distribution of Basic Chemicals and Petroleum  Third party logistics and inventory management

Added Value to Customers  Largest bulk logistics and supply chain network in private sector  Largest national private distributor of petroleum products to industrial customers

 Since 2010, appointed by Government to distribute subsidized petroleum nationwide  Largest basic chemical distributor in Indonesia with leading market share  The only private sector company appointed by government to distribute subsidized petroleum  Investing in Indonesia’s largest Integrated Port and Industrial Estate to serve Indonesian industry

6

Over 50 years of Leadership in Logistics

2013 2010 - 2012 2000’s

1994 GO PUBLIC 1980’s 1970’s

1960’s Chemicals trading business was founded at Surabaya.

The business was incorporated as PT Aneka Kimia Raya on November 28, 1977.

AKR commenced building of storage tanks for basic chemicals and warehouses in several major ports in Indonesia.

AKR conducted IPO and its shares were listed on Indonesia Stock Exchange on October 3, 1994.

• The first national private company to import and distribute nonsubsidized petroleum in Indonesia in 2005. • AKR acquired and commenced operation of ports in China in 2006. • AKR expanded its logistic infrastructure.

• The first national private company to distribute subsidized petroleum in Indonesia. • 1st Phase of Jakarta Tank Terminal, AKR’s subsidiary in tank terminal business at Tanjung Priok, was inaugurated in 2010.

• AKR built more petrol stations in Sumatera, Java, Bali, Kalimantan and Sulawesi.

• AKR and Pelindo III jointly develop Java Integrated Industrial and Ports Estate (JIIPE) which integrates industrial estate and deep sea port at Gresik – East Java.

• AKR expanded its logistic infrastructure.

7

Extensive Supply Chain Network in Indonesia

Medan Bitung

Pontianak Perawang

Samarinda Muara Tewe

Palembang

Banjarmasin Stagen

Lampung Satui Banten

Jakarta Semarang Surabaya

Makassar

Bandung Bali

Logistic Facilities

Total / Capacity

Sea ports in Indonesia

11 ports

River Ports in Indonesia

6 ports

River Ports in China

5 ports

Storage Tanks Terminal

578,000 KL

Self-propelled Oil Barges and Vessels

11 units

Warehouses

25 units

Trucks Harbor Mobile Crane

± 350 units 8 units

8

Storage Tank Terminals in Major Ports

Jakarta Tank Terminal, Tanjung Priok - Jakarta

Stagen, Pulau Laut – Kalimantan

250,000KL; 51% owned by AKR

80,000 KL

Tanjung Perak, Surabaya 92,500 KL

Ciwandan 36,700 KL

9

Efficient Sea and Land Transportation Units Sea Transportation

SPOB AKRA 60

SPOB AKRA 70

SPOB AKRA 80

Currently AKR owns 11 units of barges capable of sailing through shallow rivers. Land Transportation

Operational trucks

Trucks to serve third party

AKR owns around 350 trucks to serve logistics for internal and third party.

10

Bulk Handling and Port Operations in Indonesia

Warehouse

Dry bulk and container port at Tanjung Perak

Port handling and warehouse operations at Surabaya conducted by AKR’s subsidiary, PT Usaha Era Pratama Nusantara.

11

Large River Ports Operations in Pearl River China Container port at Guigang

Port operations at Pearl River, Guigang, Guangxi province

Coal port at Guigang

12

Manufacturing Facilities in Indonesia and China

Sorbitol Manufacturing – Liuzhou China

Adhesive Plant - Surabaya

China: Khalista (Liuzhou) Chemical Industries Ltd Indonesia: PT Arjuna Utama Kimia

13

Coal Mining and Logistics

Coal Mining

Coal hauling roads and ports

Operations in Central Kalimantan, Indonesia

14

Products: Trading and Distribution Leading Distributor of Basic Chemicals and Petroleum Products

Basic Chemicals:

Petroleum:

Caustic Soda Hydrochloric Acid PVC Resin Soda Ash Sodium Sulfate Sulfuric Acid Methanol Hydrogen Peroxide Sodium Hypoc

High Speed Diesel Fuel Oil Industrial Diesel Oil Motor Gasoline

15

Basic Chemicals Distribution Principals

Asahimas Chemicals

Basic Chemicals Sales (Rp billion)

2,990

Solvay USA

3,084

2,648

1,641

2009

1,934 1,595

2010

2011

2012

2013

6M14

• Established and maintain long-term relationship with principals and customers • Commission based business model: stable margins, profitable business • Demand grows in line with Indonesia economic growth. • Industries served: - textile - fertilizer - pulp and paper - plywood - consumer goods - food

- pharmaceutical - chemical - etc 16

Petroleum: Efficient and Cost Effective Solutions • Unique business model with effective risk management and stable margins • End to end management of supply chain including import terminals, trucks, Self Propelled Oil Barges ensuring timely deliveries to customers • Efficient Fuel Management solutions with extensive use of Information Technology to control, report and billing operations • Sourcing of petroleum products from overseas refineries as per customer requirements

Procurement from refinery

Storage tank terminals

Transportation units

Information technology

17

Downstream Petroleum Market Update •

Indonesia despite having oil production fields and is among the top 25 oil-producing nations in the world, has turned into a net importer of petroleum since 2003.

•

Current refining capacity is insufficient to meet demand growth. Since the construction of the Balongan refinery in 1994, no refineries have been built in Indonesia.

•

Petroleum consumption reached more than 1.6 million bbl/d in 2013 while domestic refinery could meet only about 64% of domestic oil products consumption. Oil product imports met the remaining demand.

•

A strong economy, population growth and state subsidies for fuels have worked together to push domestic oil demand beyond supply.

Declining Oil Production vs Increasing Consumption

Indonesian Downstream Petroleum Volumes Million KL

Year

2010

2011

2012

2013

Subsidized fuel

38.2

41.7

45.1

47.4

Nonsubsidized fuel

27.0

29.7

30.0

31.0

Total Demand

65.2

71.4

75.1

78.4

2014: Subsidy volume 46 million KL

18

Petroleum Distribution Projected Segment Wise Breakdown 2014

Total Petroleum Revenues (Rp billion)

Power, 12% Subsidized Retail, 20%

17,296

17,671

14,915 Coal Mining, 35%

Industrial, 15%

8,894

7,474 5,029

Non-coal Mining, 18%

2009

2010

2011

2012

2013

6M14

• Stable business model, effective risk management and stable margin

• Growth from 2005 to 2013 driven by expanding customer base in industrial, mining and power sector across Indonesia • With increased allocation of subsidized fuel to be distributed in 2014, expect continued growth driven by entry into retail segment 19

Subsidized Petroleum Update

20

Public Service Obligation (PSO) Mandate Allocated Volume Quota (thousands of KL) 640

• BPH Migas allotted 640,000 KL of subsidized petroleum to AKR during 2014 • Evaluating AKR’s extensive logistic infrastructure

268

and capability to deliver across Indonesia, BPH Migas has been increasing AKR’s allocation to

distribute subsidized fuel • Compensation for PSO products MOPS + Margin – Regulated Retail Price

57

2010

DODO (Dealer Owned Dealer Operated) CODO (Company Owned Dealer Operated) COCO (Company Owned Company Operated)

103

2011

2012

2013

2014

Total 131 petrol stations to distribute subsidized petroleum nationwide.

• Retail outlets opened with franchisees using models:

103

Region

Number of Petrol

Java

54

Sumatera

41

Kalimantan

33

Bali

2

Sulawesi

1

Total

131

21

Expansion of Petrol Stations in Java

AKR has built 54 petrol stations in Java in 2014 and 38 of them are located along Jalur Pantai Utara (Pantura).

22

New Petrol Stations

SPBKB Melak

SPBKB Gringsing Batang

SPBKB Cempaka

SPBKB Sekadau

SPBN Bajomulyo - Pati

SPBN Jambean - Pekalongan

23

New Petrol Stations

SPBN Moro Demak

SPBN sendang Sikucing - Kendal

SPBN Tambaklorok - Semarang

SPBN Tegal Sari – Tegal

SPBN Losari - Brebes

SPBN Mlonggo - Jepara

24

Innovative IT Solutions to Control Operations Recognized by regulatory authorities as an effective tool for control and accounting of fuel supplies

Transmission of transaction data Real time using SMS

AKR

On line Access / data retrieval and report of daily sales

BPH Migas

Car registration number

Outlet SPBKB/SPBN

Finance Ministry

25

Fuel Subsidy Reduction Strategies Likely Course of Actions

Impact on AKR Business

Limiting fuel subsidy:

Limitation on subsidized fuel distribution will create higher

 Subsidized diesel is not sold on

demand for non-subsidized fuel.

Central Jakarta (per Aug 1, 2014)  Subsidized diesel is not sold by petrol

If government removed fuel subsidy, AKR with its extensive

stations at some particular areas

logistics infrastructure and petrol stations network would

during 6 pm to 6 am (per Aug 4,

benefit from higher potential sales volume.

2014)  Subsidized gasoline is not sold by

World Bank economist for Indonesia Ndiame Diop hoped that

petrol stations along the highways

the next President dare to remove fuel subsidy, thus economic

(per Aug 6, 2014)

conditions would be better – Tempo website Jul 21, 2014.

Increasing the price of subsidized

Better operating cash inflow and faster average collection

fuel

period.

Improving accountability on

With innovative technology solutions integrated with

subsidized fuel distribution

regulatory authorities, AKR is ready to provide accountability.

26

Financial 6M14 Performance

27

Sustainable Growth in Revenue and Profits Sales and Revenues (Rp billion)

21,674

Gross Profit (Rp billion)

22,338

1,261

18,806

1,368

1,052 801 11,258

10,321

480

7,489

2009

621

2010

2011

2012

2013

6M14

2009

2010

Operating Profit (Rp billion)

830 725

2011

2012

2013

6M14

Net Income (Rp billion)

768 619

649

648

493

288

2009

357

2010

291

2011

2012

2013

6M14

2009

376

325

2010

2011*

2012

2013

6M14

* Excluding extraordinary gain from divestment of Rp 1,689.95 billion

28

Strong Financial Position for Future Growth Financial Position

30-Jun-14 30-Jun-13 31-Dec-13

Current assets Cash Trade receivables Inventories Other current assets

7,401.1 918.4 4,324.6 1,755.6 402.4

6,586.8 1,524.1 3,312.2 1,046.0 704.4

7,723.3 820.1 4,265.3 1,823.2 814.7

Non-current assets Property, plant and equipment Industrial estate land inventory under development Other non-current assets

7,420.0 4,233.2

5,468.3 3,457.3

6,909.8 4,226.7

1,674.1

952.1

1,434.9

1,512.6

1,058.9

1,248.2

14,821.0 12,055.1

14,633.1

TOTAL ASSETS

Liabilities Trade payables Loans Bond payables Other liabilities

9,171.0 4,141.8 2,883.7 1,491.6 653.9

7,087.7 3,416.2 1,729.1 1,489.8 452.6

9,270.0 3,631.1 3,657.2 1,488.7 493.0

Equity

5,075.3

4,404.6

4,773.1

574.7

562.8

590.1

14,821.0 12,055.1

14,633.1

Non-controlling interest TOTAL LIABILITIES AND EQUITY

 Working capital ratios continue to be monitored; increase in trade receivable mainly from subsidies due from the Government.

 Industrial estate land inventory under development amounting Rp 1,674.1 billion represents the land cost of nearly 1,000 ha acquired and being developed.  Net gearing reduced to 0.7 times.

Working Capital Management

Unit

6M14

6M13

2013

x

1.5

1.8

1.5

Receivable period

days

70

57

70

Inventory period

days

31

19

32

Payable period

days

72

62

63

Total asset turnover

29

Improvement in Margins and Lower Gearing Ratios

Unit

6M14

6M13

2013

Profitability

Net Gearing

Gross margin

%

7.1

6.0

6.1

Operating margin

%

4.4

3.8

3.4

Net margin

%

3.3

3.3

2.9

Return On Asset *

%

5.1

5.8

4.4

Return On Equity *

%

14.8

15.9

13.6

0.9 0.8

Leverage

0.7 0.5

0.5 0.4 0.3

0.1

0.1

6M12

9M12

-0.1

Current ratio

x

1.1

1.4

1.2

Asset / equity

x

2.6

2.4

2.7

Net gearing

x

0.7

0.4

0.9

3M12

2012

3M13

6M13

9M13

2013

3M14

6M14

* annualized

30

Sustainable Growth in Revenue and Profits Statements of Income (Rp billion) Sales and Revenues

Gross Profit

6M14

6M13

11,258.2 10,616.6

increase 6.0%

800.7

638.8 25.3%

Gross Margin

7.1%

6.0%

Operating expenses

-307.6

-232.8

Profit from Operations

493.1

406.0 21.5%

4.4%

3.8%

Operating Margin Finance income (costs) Other income (expenses) Profit before tax Tax

-33.6

-2.6

4.4

1.5

464.0

404.9 14.6%

-99.9

-68.7

Profit before non-controlling interest Non-controlling interest

364.1

336.2

11.9

14.8

Profit for the period attributable to equity holders of the parent entity

376.0

350.9

3.3%

3.3%

Net Margin

 Profit margin improved due to tighter control on pricing.  Operating expenses increased under new labor regulation where drivers and outsourced employees were added to company payroll commencing from 2nd half of 2013.  Interest expense increased from Rp 36.3 billion (6M13) to be Rp 58.6 billion (6M14) due to higher requirement of working capital.

8.3%

7.1%

31

Segment Wise Performance Sales and Revenues by Segment (Rp billion) TRADING AND DISTRIBUTION Petroleum Basic chemical Sub-total

6M14

6M13

8,894.0 1,595.1 10,489.2

8,317.4 1,519.1 9,836.4

6.9% 5.0% 6.6%

MANUFACTURING Sorbitol, starch and starch derivatives Adhesives Sub-total

162.1 253.6 415.7

148.1 205.6 353.8

9.4% 23.3% 17.5%

LOGISTICS SERVICES - third parties Port operations and transportation Storage rental Sub-total

196.9 107.1 304.0

201.3 134.3 335.6

-2.2% -20.2% -9.4%

49.3

90.8

-45.7%

11,258.2 10,616.6

6.0%

COAL MINING AND TRADING TOTAL

Increase

32

Q2 ‘14 - Record Quarterly Performance Sales and Revenue (Rp billion)

Gross Profit (Rp billion)

Net Income (Rp billion) 7.7% 6.3%

5.7%

6.5%

6.6%

5.9% 6.0% 5.4%

5.4%

EBITDA margin

4.6%

4.6%

3.2%

3.1%

2.9%

Net margin

3.9%

3.7%

Gross margin

3.5%

2.0%

Q1-13

Q2-13

Q3-13

Q4-13

Q1-14

Q2-14

33

Next Growth Opportunity: Java Integrated Industrial and Ports Estate

34

JIIPE Provides Logistics and Energy Solutions PURPOSES OF JIIPE 1.

Contribute to lower the logistic cost of Indonesia

2.

Provide competitive energy

3.

Support Indonesian companies to be global suppliers utilizing JIIPE’s deep sea port

Factories and bulk warehouses Water treatment and waste management Large scale Industrial Estate 1,761 Ha

Electricity and utilities Gas and energy terminal

BKMS Industrial Estate

Railway sidings

INTEGRATED

BMS Port Deep sea port (-16 draft) Container terminal

Bulk and clean port Energy terminal

35

Public – Private Partnership Developer: PT AKR CORPORINDO Tbk

PT PELABUHAN INDONESIA III

A public listed company, leading in integrated logistic services and bulk chemical & energy distribution in Indonesia

A state owned enterprise handling all the public ports in Central Java, East Java, Bali, South Kalimantan, Central Kalimantan and Nusa Tenggara

PT USAHA ERA PRATAMA NUSANTARA

PT BERLIAN JASA TERMINAL INDONESIA

A subsidiary of PT AKR Corporindo Tbk

A subsidiary of PT Pelabuhan Indonesia III

Masterplanner: NIPPON KOEI CO. LTD. PT INDOKOEI INTERNATIONAL 36

Gresik : Ideal location to set up manufacturing companies Gresik

• Located at Gresik, 30 km outside Surabaya, Indonesia’s second largest city. • Bordered by a long coastline fronting deep sea, connected by Rail and Toll roads as well as the Port. • Surabaya is the manufacturing hub for Eastern part of Indonesia and also home to consumer goods manufacturers. • Gresik is now the preferred destination for manufacturing units to set base – with host of Smelters, Cement and Fertilizer plants already operating.

Madura Strait

• Situated at the mouth of the Strait of Madura, the project has access to deep water and sheltered from open sea by the Island of Madura. 37 37

MASTER PLAN

38

Master Plan ZONING AREA MARK

ZONE

AREA ( Ha )

PERCENTA GE (%)

RESIDENTIAL ESTATE INDUSTRIAL ESTATE SEA PORT ESTATE

765.77

26

1,761.40

61

406.10

13

TOTAL

2,933.27

100

39

MASTER PLAN IN STAGES

40

Well-Planned Industrial Estate with Excellent Facilities

41

Industrial Estate Development Update Access Road from main entrance to sea side completed

Land Upgradation

Tanggok Bridge across the river is complete

Entrance

Access Road > 7 km

Land Upgradation 42

Deep Water Sea Port for Bulk and Energy

View of Madura Straits with overlay of proposed port reclamation proposed jetty length 6,000 m

• Deep sea port of draft -16 meters, capable of handling large size vessels • Sheltered with natural break water: Madura island. • Creates recurring income opportunities: - port operations - coal terminals - gas and energy distribution

from

the

following

business

• Dutch contractor company Van Oord has already 43 commenced reclamation and channel widening works

Phase 1 of sea port expected to be completed by Q1 2015 Bridge and Trestle

The trestle connecting the port and jetty is under construction.

Phase I Sea reclamation is proceeding. Currently, the newly formed island for port is 80 ha.

Jetty

The piling work for jetty is on going.

44

Aerial Photograph of Project

Jetty PT Maspion

Access road from industrial estate

Reclamation

45

Sea Port: Land Reclamation Progress

46

Sea Port: 80 ha land reclaimed - Port

47

Port Reclamation

48

Geotube

49

Geotube

50

Geotube

51 51

Trestle

52

Trestle

53

Port Bridge

54

Developing a Recurring Income Model • JIIPE Project business plan is to create value to stakeholders in the long run

Energy and Recurring Income

• Real estate sales will generate significant and profitable revenues • Plans to build power generation plants, LNG receiving terminals and coal distribution facilities jointly with partners • Opportunity to enter into new business such as gas distribution and expand current business

Energy Gas

Recurring Income

(New)

(New)

Joint Venture - Power plants - Oil & Gas Terminals - Water supplies - Coal terminals - Railway depot - Port operations

Real Estate Sales

• Envisages a recurring and superior revenue stream comprising of:  Distribution of energy, raw materials and products  Recurring income from Industrial Estate  Logistics income from warehousing, railway terminal operations, port operations  Fees and other income from provision of utilities

Overall a superior return to stakeholders 55

Corporate Information

56

Shareholding Structure and Share Performance Share Performance AKRA JSX Composite Index

1 month -4.86% -3.85%

1 year +14.17% +14.66%

5 years +346.52% +99.58%

7,000

Majority Shareholders

160,000,000

140,000,000

6,000

120,000,000

5,000

100,000,000 4,000 80,000,000 3,000 60,000,000 2,000

40,000,000

1,000

0 Jan-08

20,000,000

0 Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Source: www.ft.com (Oct 7, 2014)

Shareholders per Oct 9, 2014 PT Arthakencana Rayatama

Shares

Ownership

2,298,640,320

58.73%

28,330,374

0.73%

Public

1,586,666,980

40.54%

Total

3,913,637,674

100.00%

Management

Soegiarto Adikoesoemo Chairman & Founder

Haryanto Adikoesoemo President & Group CEO

57

Consistent Dividend Payout above 30% Year

Cash Dividend per share

Net Income (Rp bn)

2008 2009 2010 2011 2012 2013 2014 **

21 25 32 360 65 65 50

210.0 274.7 310.9 2293.4 * 649.3 648.3

Total Dividend Dividend (Rp bn) Payout Ratio

65.6 94.6 122.3 1,372.7 251.1 252.6

* Including extraordinary gain on divestment

31.2% 34.4% 39.3% 59.9% 38.7% 39.0%

59.9%

** Interim dividend 39.3% 31.2%

2008

34.4%

2009

2010

2011

38.7%

39.0%

2012

2013

58

Recognized for Corporate Governance Best Investor Relations: PT AKR Corporindo Tbk 2nd

Rank Most Admired Companies 2014 Category Trade and Services by Fortune Indonesia

Asia’s Best CFO (Investor Relations): Suresh Vembu by Corporate Governance Asia Excellence Recognitions Awards 2014

Asia’s Icon on Corporate Governance by Corporate Governance Asia

Asian Corporate Director Recognition Awards to Haryanto Adikoesoemo by Corporate Governance Asia

59

Thank You V Suresh Director +62 21 531 1177 [email protected]

PT AKR Corporindo Tbk Wisma AKR Lantai 8 Jl. Panjang No. 5 Kebon Jeruk Jakarta Barat 11530 Indonesia www.akr.co.id

60

Disclaimer These materials have been prepared by PT AKR Corporindo Tbk (the “Company”) and have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials. The Company or any of its affiliates, advisers or representatives accept no liability whatsoever for any loss howsover arising from any information presentated or contained in these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. These materials 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. Such forwardlooking 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.

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