INVESTOR

INVESTORPRESENTATION
PRESENTATION
1Q
FY2018
2017
Agenda

1 Company Overview

2 Key Investment Highlights

3 KKR’s Investment in the Company

4 Financial and Operational Highlights

1
1. Company Overview

2
Company overview
Core competencies across the value chain

Upstream Midstream Downstream

Feed Breeding Commercial farming Processing

Poultry

Beef

Aquaculture

3
Industrialized approach drives operational and financial
benefits
A Scale
– 2nd largest feed and DoC producer in Indonesia with
significant scale across the value chain:
 17 feed mills, 68 breeding farms and 25
hatcheries across Indonesia
 Over 100 company farms and over 9,000 contract
farms
– Consolidated procurement of raw materials with the
broader Japfa Group
C Biosecurity & animal health
– Advanced biosecurity measures for disease
prevention and control, comprising (i) isolation; (ii)
sanitation and disinfection; and (iii) traffic control
– Stringent process adherence to prevent diseases
– In-house vaccine R&D and production unit, PT
Vaksindo, improves efficacy and shortens response
time to disease outbreaks
B Technology & genetics
– Exclusive relationship with Aviagen for the sourcing of
grandparent stock with superior genetics which is
tailored for the Indonesian climate
– Advanced feed technology for quality control and
optimal feed conversion ratios
– Modern farming techniques and industry best
practices to further drive efficiency
D Standardization
– Ability to replicate farming best practices and
infrastructural design across feed mills, breeding
farms and hatcheries
– Mechanized production processes and established
SOPs allow for consistency
– Opportunity to tap human resources across the Japfa
Group facilitates standardization
4
Japfa: Well positioned for long-term growth
Poultry leader with growing presence in other proteins

− Cattle fattening
business in Indonesia
− Core business and stable segment of
the value chain
− Cost plus pricing model allows the
− Aquaculture is primarily a Company to pass on any adverse
feed business with some Others commodity / FX price movement
Cattle
farming overlay 4%
3% − 2nd largest player in Indonesia
− Protein diversification Aquaculture
strategy for varying 6%
consumer preferences

Poultry Feed Poultry-related activity:

Commercial 45%
Farming and 87% of total revenue
Consumer
Products
31%
− Comprises of both in-house and Stable and growing
contract farms; growing proportion of core business
in-house farms to enhance Day Old Chick
traceability 11% FY 2017 revenue: IDR 29.6 Trillion
− DOC and Commercial Farming help
drive sales volume for feed business
− Shift downstream via investing in − 2nd largest day-old chick (“DoC”)
more slaughterhouses in order to producer in Indonesia
reduce exposure to fluctuating farm Diversification efforts
gate prices
to position company
for long-term growth

Note: The % sales contributions from operational segments shown above are based on gross sales, which exclude elimination adjustments between segments.

5
2. Key Investment Highlights

6
Investment highlights

1 Attractive industry dynamics driven by strong structural growth in protein consumption

2 Leading integrated poultry national champion with nationwide footprint

3 Core feed business offers stable profitability

4 Leading Market Positions in Multiple Protein Staples

5 Experienced and tenured management team

7
1 Attractive industry dynamics driven by strong structural
growth in protein consumption
 Ample room for sustained growth in business locations with one of the lowest poultry consumption
per capita rates in Asia.

 Strong projected growth in GDP per capita to underpin growing protein consumption

 “Meat-of-choice” given poultry’s relative affordability, religious neutrality, consumer preference and
increasing penetration and popularity of quick service restaurants

 Potential upside as Indonesians’ diet evolve to include more meat-based protein from the currently
carbohydrate-heavy diets
Positive correlation between GDP per capita and Poultry
Poultry Meat Consumption meat consumption (2015)
per capita in Asia
(kg per capita - 2015) Rising Consumption in Emerging Asian Markets

60
Malaysia 47.5
Consumption / Capita (Kg) United States
50 Malaysia
Philippines 11.7
40 Saudi Arabia
Brazil
Argentina
Indonesia 10.1 Canada
Singapore
30 South Africa
Mexico
Vietnam 9.9
20 Philippines

China 9.3 10 Vietnam

Indonesia
India
0
0 10,000 20,000 30,000 40,000 50,000 60,000
GDP / Capita (USD)
Source: Frost & Sullivan Estimates, 2017 Source: OECD, UN, Frost & Sullivan Estimates, 2017

8
2 Leading integrated poultry national champion with
nationwide footprint
2nd largest Indonesian poultry feed and DoC Nationwide footprint with presence in all major
producer islands
Poultry feed production capacity market share (%)
Poultry Breeding Farms & Poultry Feedmills
34%
31%
Japfa is the largest indigenous
22% Indonesian poultry player

6% 4%

CP Japfa CJ Malindo Others

DoC production capacity share (%)

41%

25%
21%

8% 6%

CP Japfa Malindo Sierad Others

 Attractive industry dynamics with CP and Japfa jointly
controlling >50% of the feed and DOC markets
 Significant economies of scale given procurement volume
of raw materials, especially in conjunction with the broader
Japfa Group
 Logistical feat given that Indonesia is an archipelago; serves as
a barrier to entry and helps defend the Company’s market
position
 Wide geographical reach offers unparalleled access to both
poultry farmers and domestic corn producers

 Heritage of 40 years in the poultry industry provides brand
recognition
Source: Frost and Sullivan (May 2014), Company information
 Key to tapping pockets of demand across the country given the
highly localized market, which is a result of (i) preference for
live birds; and (ii) underdeveloped cold chain and
transportation infrastructure

9
3 Core feed business offers stable profitability
Constitutes >50% of Group’s operating profit
Despite volatile commodity prices… …and weakening IDR

220 15,500

200

180
13,000
160

140

120
10,500
100

80

60 8,000
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

Soybean Meal Corn

…the Group’s feed business has been able to consistently deliver stable gross margins, underscoring the
ability to effectively pass on adverse currency and commodity price movements

20% Average: 14%

LTM Gross Margin (%)

16%

12%

8%

4%

0%

Source: Bloomberg, Company information

10
 Segmental Trends: PT Japfa Tbk (Poultry)
Revenue (IDR Billion) Operating Profit (IDR Billion) Operating Profit Margin (%)
20%
34,545 3,500 17.5%
35,000 3,191
30,923 15%
11.6%
13.4%
30,000 28,396 28,592 3,000 348 10.9% 12.3%
12,240 2,585 10%
6.9% 10.8% 9.7%
25,000 10,899 2,500 690 304
9,412 10,270 1,909 7.3%
5%
1,517 5.3%
3.7%
20,000 4,468 2,000 548 3.2% 2.5%
3,955 383
2,523 3,157
0%
-0.5%
15,000 1,500
-5%
10,000 1,000 2,153 -4.1%
17,837 1,910 1,733
16,461 15,165 16,069 1,655 -10%
5,000 500
-15% -13.9%
0 0
FY2014 FY2015 FY2016 FY2017 (129)
(350) -20%
(43) FY2014 FY2015 FY2016 FY2017
Feed Breeding Commercial farms -500
FY2014 FY2015 FY2016 FY2017 Feed Breeding
Feed Breeding Commercial farms Commercial Farms PT Japfa Tbk

Feed business continues to be the stable pillar of our profitability

 The poultry business (feed, breeding and commercial farms) represented the bulk of PT Japfa Tbk’s revenue in FY2017
 FY2016 was an exceptional year when particular market conditions gave rise to the exceptionally high poultry feed operating margin of
13.4%. This margin had since returned to a creditable level of 9.7% in FY2017, despite the high domestic corn price environment
throughout the year
 Revenue and profitability in FY2014 to FY2015 were affected by the poultry market downturn
 Our ability to generally pass on raw material costs increases in our feed selling prices is reflected in our stable feed operating margins,
even during the periods of Rupiah volatility and the poultry market downturn

Note: The revenue figures for the poultry operational units shown above include inter-segment sales.

11
4 Japfa Ltd: A Leading Pan-Asian Industrialized Agri-Food Company

WHAT WE DO WHERE WE ARE WHY WE DO IT

We produce quality We employ over 3 billion people living
protein staples, dairy, 34,000 people across in our target markets
and packaged food that Singapore, Indonesia, More than 40% of the
nourish millions of Vietnam, Myanmar, world’s total
people India and China population

A leading pan-Asian, industrialised agri-food company dedicated to

feeding emerging Asia with essential proteins

12
 4
Leading Market Positions in Multiple Protein Staples
Leading upstream regional market positions
Milk Yield1 China 36 kg/day #1

Poultry Feed Production Capacity2 Indonesia 24% #2

DOC Production2 Indonesia 29% #2

DOC Production3 Vietnam 20% #3

Poultry Feed Production Capacity3 Myanmar 31% #2

DOC Production Capacity3 Myanmar 21% #2

Leading downstream consumers brands that are key drivers for future growth
Dairy Frozen Consumer Food4 Ambient Temperature Consumer Food4

#1 #2 #3
Others
Heinz ABC
15% PT CP Others
16%
Indonesia 46%
Sierad
Produce 37% Maya Muncar
17% 16%

Canning
Foods
13%
31% 9%
Greenfields, #1 brand of Fresh
Pasteurized Milk in Indonesia5
1. Source: CY2015 and FY2015/FY2016 data from various 5. PT Austasia Food calculation and claim based on value and volume sales
public-listed dairy farming companies operating in China. data provided by Nielsen Scan Track Service for Pasteurized Milk category for
2. Source: Frost & Sullivan Analysis, 2015 data. the 12 months ending September 2016 for Indonesia market.(Copyright ©
2016, Nielsen).. 13
3. Source: Company estimates, 2016 data.
4. Source: Frost & Sullivan Analysis, 2013 data.
5 Experienced and tenured management team
Proven track record of guiding the Company through various cycles
Board of Commissioners

Syamsir Siregar Hendrick Kolonas Jaka Prasetya Retno Astuti Ignatius Herry Achmad Syaifudin
President Vice President Commissioner Wibisono Wibowo Haq
Commissioner Commissioner (KKR’s Nominee) Independent Independent Independent
Commissioner Commissioner Commissioner
Year of agri Year of agri Year of finance
experience: 13 experience: 22 experience: 16 Year of agri Year of agri Year of agri
experience: 17 experience: 19 experience: 26
Board of Directors
Handojo Santosa Bambang Koesbyanto Tan Yong Nang Rachmat Indrajaya
President Budi Hendarto Setyadharma Director Independent
Director Vice President Director Director
Director
Year of agri Year of agri Year of agri Year of agri Year of agri
experience: 31 experience: 39 experience: 29 experience: 10 experience: 10

 Company  Established poultry  Regional expansion  Merger with PT

1971

1982

2003

2012
established as PT breeding operations initiative started with Multibreeder, a 73% owned
Java Pelletizing to complement feed establishment of new subsidiary to bring together
Factory Ltd business feedmill the group’s poultry feed and
breeding operations
 Issued IDR1.5 trillion Japfa
 PT Japfa Tbk  PT Japfa Tbk’s first Rupiah  Issuance of

2017
1989
1975

2007

 Poultry Bond I
listed on Bond issuance which raised $250mn 5-Yr
feed USD Bond
Jakarta and Rp500 billion  PT Japfa

2013
business  Received
Surabaya Tbk’s

2016
started  IDR 3 trillion
2008

Stock  Establishment of new protein first USD capital

production line through acquisition of a injection of committed
Exchanges Bond
beef feed lotter issuance IDR702bn unsecured
which from KKR bank term
 Acquired Vaksindo Satwa
raised through loan
Nusantara, an animal
vaccine manufacturer $225mm PMTHMETD

Timeline of Japfa Comfeed: Over 40 years of ‘best-in-class’ poultry production

14
3. KKR’s Investment in the Company

15
KKR’s Investment in the Company
KKR Overview
 Leading global investment firm with ~US$153bn of assets
under management across a wide range of asset classes
including private equity, special situations etc.
 Offers suite of value-added capabilities to portfolio
companies to drive long-term sustainable value creation
 Deep agricultural sector expertise in Asia, having
invested behind several companies which focus on high
quality food produce:
Asia Dairy
KKR’s Value Add and Progress to Date
1 Balance Sheet Optimization: Leverage KKR’s in-house
capital markets expertise to determine optimal capital
solution; KKR to be actively involved in ongoing
refinancing discussions
2 Enhance Liquidity: Institutionalize shareholder base and
to increase and improve research coverage through
proactive communication
3 Operational Improvements: Leverage KKR’s operational
experience in the sector to drive improvements and to
explore ways to “import” lessons learned from KKR’s
poultry investment in China, Fujian Sunner
Transaction Overview
 KKR acquired ~12% stake in the Company through a
combination of primary and secondary share purchase;
shares purchased were subject to a one-year lock-up
 Primary proceeds from KKR’s investment was used to
strengthen the Company’s balance sheet through
deleveraging
 Jaka Prasetya, Member at KKR, has been appointed to
join the Board of Commissioners
 Successful refinancing of IDR and USD bonds
 Improved engagement with credit rating agencies,
research analysts and institutional investors
 Increased institutional interest in the Company following
KKR’s investment
 Help management to identify cost saving opportunities
and design several initiatives to capture them
16
4. Financial and Operational Highlights

17
 PT Japfa Tbk – Financial Performance

Revenue Operating Profit EBITDA PAT

Rp Billion Rp Billion Rp Billion Rp Billion

1Q 2018 7,860.9 868.9 1,044.9 463.2

+18.7% y-o-y +135.3% y-o-y +106.1% y-o-y +297.1% y-o-y

1Q 2017 6,624.7 369.4 506.9 116.6

The poultry business recorded higher sales volumes and profitability across Feed, DOC and Broilers

 Revenue rose 18.7%, driven by substantial growth in sales volumes across the poultry division; in particular, sales volume for
feed increased 14.5%

 Overall, Operating Profit rose Rp499.6 Billion, or 135.3%, year-on-year due to:
 Improvement in poultry feed margin on lower raw material costs

 Higher ASPs for DOC and Broilers; commercial farming business achieved a turnaround from an operating loss of
IDR70.5 billion to an operating profit of Rp246.7 billion

 Due to the continuing government policies over beef prices, beef prices remained low. Operating losses from the beef
business widened from Rp2.9 billion to Rp19.9 billion

18
PT Japfa Tbk – Stable rolling operating profit

 PT Japfa Tbk is as an agri-food business will always be subject to cyclicality which directly impacts its revenue and
profitability. Cyclicality is dependent on a variety of external factors which are beyond the Company’s control,
including the seasonality of harvest and festivals, as well as macroeconomic factors that affect purchasing power
and government policies.

 Feed remains as a stable pillar of profitability.

 On a rolling basis, the operating profit has been fairly stable over last year.

Operating profit (IDR Billion)

3,213
2,776 2,921 2,796
2,534 2,684

2,058 2,170
2,013

Ending Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18
Sluggish growth in Asian economies

Three months ended Rolling12 months ended

19
 Proven financial track record
Net Revenues Operating Profit EBITDA Net Profit
(IDR Billion) (IDR Billion) (IDR Billion) (IDR Billion)
7,860.9

6,624.7

1,044.9
868.9

506.9 463.2
369.4

116.6

1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018

Total Assets Net Debt / Equity (%) CAPEX TOTAL DEBT

(IDR Billion) (IDR Billion) (IDR Billion)

21,034.1 21,016.7

7,238.3
49.8% 5,933.0
42.1%

587

219

1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018 1Q 2017 1Q 2018

Note: Based on Company’s 1Q 2018 Financial Results

20
Capex FY 2016 – 1Q 2018

(IDR Billion)

1,537

787

587

FY 2016 FY 2017 1Q 2018

21
Thank You

22