year in the wake of the pandemic.

The global
economy contracted sharply following movement
and travel restrictions imposed by many
governments to safeguard public safety and to
curb the spread of the highly contagious Corona
Virus Disease 2019 (“COVID-19”). The World Health
Organization has warned of deepening impacts
on public health, livelihoods, food systems and
nutrition as the pandemic continues to take its toll
around the world.
In Indonesia, the economy declined for three
straight quarters with domestic consumption
severely curtailed by public safety regulations and
measures. The situation improved towards the end
of third quarter after the government increased
its budget under the National Economic Recovery
program (Pemulihan Ekonomi Nasional or “PEN”)
to stimulate economic growth and reinforce social
security and public health.
The impact on the fast-moving consumer goods
(“FMCG”) industry was severe, however some
categories benefitted from increased in-home
consumption. The FMCG market shrunk in both
value and volume by around mid-single digit
and low-double digit year-on-year respectively,
with FMCG outlets being closed, partly offset by
increased home consumption. The weakened
purchasing power led to a lower inflation rate
averaging 1.68% and depreciation of the rupiah
against US$ to average Rp14,639 in 2020.
Consumer confidence suffered with the tightening
of purse strings in an ailing and uncertain economy.
Despite the grim economic situation, ICBP managed
to retain its position as one of the leading FMCG
players in Indonesia. We continued our growth
momentum in 2020 for the tenth consecutive
year since the IPO. Annual sales grew by 10.3%
and core profit by 12.8%, mainly driven by higher
volume. Following the acquisition of PCL the net
gearing ratio increased to 0.44 times, however
ICBP managed a healthy financial position with its
positive cash generated from operations.