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Indofood: Organizational Structure

Dan Wang Sheenu Gupta
Team: Credit Team: Credit
BI Credit Analyst BI Senior Associate Analyst

Indofood Provides Half of First Pacific Group's FY22 Profit

(Bloomberg Intelligence) -- Indofood is a key source of cash for its ultimate parent First Pacific , which
is 45% owned by Anthoni Salim. It contributed 49% of the group profit in FY22. First Pacific operates
as an investment-holding company and relies on dividends from its key subsidiaries and associates to
service its debt and cash obligations, especially Indofood (Baa3/BBB-), PLDT Inc (Baa2/BBB+) and
Metro Pacific. (03/21/23)

1. First Pacific Rely on Dividends From Indofood, PLDT and MPIC

Indofood and other consumer businesses contributed about 49% of First Pacific's profit in FY22.
Indofood is a part of First Pacific's complex group, with cross-holdings and related-party transactions
between the group entities. It has potential governance concerns, given FP's 45.1% ownership by
Anthoni Salim. These risks are mitigated by Indofood and key group companies' listed status, which
requires them to comply with exchange rules and disclosure requirements.

FP relies on dividend income from Indofood, PLDT and MPIC to service holding company's debt of
$1.5 billion. FP uses the dividends proceed to invest in its portfolio businesses. FP's businesses
diversify across industries including consumer, telecoms, utilities and commodity which could show
more resilience during credit cycles due to low correlations between them. (03/21/23)

First Pacific's Organizational Chart

Source: Bloomberg Intelligence

2. Pinehill Deal Drives Up Leverage, But Average Acquisition Small

The Pinehill acquisition in 2020 drove Indofood's debt/Ebitda to 3.0x-3.5x. Leverage may remain
above 3x due to high capex and dividends in 2022. Indofood funded the $3 billion acquisition through
cash and $2 billion of loans. Future acquisitions or stake increases in subsidiaries may drive up
leverage. However M&A sizes maybe much smaller, e.g. $20-30 million according to historical
precedent.

This report may not be modified or altered in any way. The BLOOMBERG PROFESSIONAL service and BLOOMBERG Data are owned and
distributed locally by Bloomberg Finance LP ("BFLP") and its subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India,
Japan and Korea (the ("BFLP Countries"). BFLP is a wholly-owned subsidiary of Bloomberg LP ("BLP"). BLP provides BFLP with all the global
marketing and operational support and service for the Services and distributes the Services either directly or through a non-BFLP
subsidiary in the BLP Countries. BFLP, BLP and their affiliates do not provide investment advice, and nothing herein shall constitute an offer
of financial instruments by BFLP, BLP or their affiliates.

Bloomberg® 03/21/2023 04:26:50

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Indofood enjoys synergies through vertical integration with related companies, which provide
security of supplies, better quality visibility, and enables access to an distribution network across
Indonesia, creating cost advantages. However, that integration exposes Indofood to related-party and
governance risks due to the financial policies and operational decisions of Indofood group and
ultimate parent First Pacific. (05/26/22)

Indofood Owned Subsidiaries

Source: Bloomberg Intelligence

To contact the analyst for this research:

Dan Wang at dwang626@bloomberg.net

This report may not be modified or altered in any way. The BLOOMBERG PROFESSIONAL service and BLOOMBERG Data are owned and
distributed locally by Bloomberg Finance LP ("BFLP") and its subsidiaries in all jurisdictions other than Argentina, Bermuda, China, India,
Japan and Korea (the ("BFLP Countries"). BFLP is a wholly-owned subsidiary of Bloomberg LP ("BLP"). BLP provides BFLP with all the global
marketing and operational support and service for the Services and distributes the Services either directly or through a non-BFLP
subsidiary in the BLP Countries. BFLP, BLP and their affiliates do not provide investment advice, and nothing herein shall constitute an offer
of financial instruments by BFLP, BLP or their affiliates.

Bloomberg® 03/21/2023 04:26:50