PT - Krakatau Steel Pt. Gunawan Dianjaya Steel Pt. Jaya Pari Steel

FINANCIAL MANAGEMENT AND POLICY
FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

PT.KRAKATAU STEEL
PT. GUNAWAN DIANJAYA STEEL
PT. JAYA PARI STEEL
SYNDICATE 3
2 9 1 2 1 4 3 0 ANISA RIZKITALIANI
2 9 1 2 1 4 5 0 MUHAMMAD IQBAL IRFANI
2 9 1 2 1 4 8 8 WILDAN SYAHID NUGRAHA
2 9 1 2 1 7 0 2 ADELINA TAY
H E TODAY'S AGENDA

Krakatau Steel - A
L O
BUMN Financial Scoring
Compound Annual Growth Rate
L
Trend Analysis
Krakatau Steel - B
Moody's Framework
KRAKATAU STEEL A
BUMN SCORING FINANCIAL ASPECT
PT. Krakatau Steel PT. Jayapari Steel PT. Gunawan Dianajaya Steel

Ratios 2010 Score Ratios 2010 Score Ratios 2010 Score
ROE 15,04% 20 ROE 9,48% 14 ROE 25,12% 20
ROI 20,32% 15 ROI 14,68% 12 ROI 34,24% 15
Cash Ratio 73,76% 5 Cash Ratio 12,17% 2 Cash Ratio 0,89% 0
Current Ratio 157,29% 5 Current Ratio 276,83% 5 Current Ratio 169,03% 5
Collection Period 69,98 4,5 Collection Period 79,87 4,5 Collection Period 19,19 5
Inventory Turnover 209,41 2,40 Inventory Turnover 99,58 4 Inventory Turnover 118,86 4
Total Asset Turnover 67,45% 3 Total Asset Turnover 104,01% 4 Total Asset Turnover 159,15% 5
Total Equity/Total Asset 49,73% 9 Total Equity/Total Asset 72,98% 7,5 Total Equity/Total Asset 60,09% 8
DuPont
2010 (Q2) Score DuPont Formula 2010 Score DuPont Formula 2010 Score
Formula
Profit Margin
0,11 N/A Profit Margin Ratio 0,07 N/A Profit Margin Ratio 0,08 N/A
Ratio
Total Asset Turnover 0,67 N/A Total Asset Turnover 1,04 N/A Total Asset Turnover 1,59 N/A
Equity Multiplier 2,01 N/A Equity Multiplier 1,37 N/A Equity Multiplier 1,66 N/A
ROE 15,04% 18 ROE 9,48% 7 ROE 21,34% 20
Total Score 63,9 Total Score 53 Total Score 62
Rating AA Rating A Rating AA

There are 8 financial ratios where each of ratios has specific weight
contributed to the overall score.

BUMN
FINANCIAL
SCORING
In BUMN Scoring Framework,
performance of company is based on
three aspects, financial
aspect which contributes 70% of the total Since Bambang only wants to do a measurement on the financial aspect,
score, Operational and administration Bambang readjusted the score for health classification as displayed below:
aspect with contribution of 15% each. For
the financial aspect, the ministry of
state-owned company has approved
several financial ratios that are
considered to be important in assessing a
financial performance of a company.
COMPOUND ANNUAL GROWTH RATE
TO ASSESS THE GROWTH RATE EACH YEAR, A CALCULATION NAMED COMPOUND ANNUAL GROWTH
RATE (CAGR) IS INVENTED. CAGR IS THE YEAR-OVER-YEAR GROWTH RATE OF AN INVESTMENT OVER A
SPECIFIED PERIOD OF TIME
CAGR (3 Years) PT. Krakatau Steel PT. Gunawan Dianjaya Steel PT. Jayapari Steel

EPS 20.76% -5.12% -16.67%
Sales -24.16% -12.69% -16.42%
Net Income 29.49% 24.97% -16.67%
Equity 6.85% N/A 3.62%
GPM 16.94% -8.45% -6.12%
OPM 27.01% -12.18% -12.54%
NPM 70.73% -12.18% -0.30%
COGS/Revenue 17.32% 1.74% 1.06%
Op.Exp./Revenue 4.70% 0.97% 20.30%
ROA 35.75% 48.81% -17.48%
ROE 21.18% N/A -19.58%
Debt/Equity -17.90% N/A 43.82%
Debt/Capital -8.03% N/A 21.94%
TREND ANALYSIS
PT. Krakatau Steel PT. Gunawan Dianjaya Steel PT. Jayapari Steel
Ratios
2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010
In analyzing the performance trend of a company,
Revenue

Bambang will use several ratios which can be


GPM 11.95% 13.16% 7.01% 21.05% 21.01% 18.54% -11.45% 14.22% 16.17% 15.75% 11.69% 13.03%
classified into four main aspects. Those aspects are
OPM 0.17% 6.59% 4.69% 13.51% 14.86% 13.80% -16.63% 9.35% 12.82% 13.42% 6.70% 8.98%
revenue, return, market and debt
NPM 2.11% 2.23% 2.92% 11.09% 14.86% 13.80% -16.63% 9.35% 9.60% 6.71% 0.63% 6.65%
performance.
COGS/Revenue 0.88 0.87 0.93 1.40 0.79 0.81 1.11 0.86 0.84 0.84 0.88 0.87
Op.Exp./Revenue 0.07 0.07 0.07 0.08 0.06 0.05 0.05 0.05 0.03 0.02 0.05 0.04
Market

EPS 31 46 49 81 38 25 -26 21 55.42 65.54 2.56 37.93
Book Value per

0.52 0.26 0.30 0.08 n/a n/a 0.12 0.19 0.10 0.08 96.63 0.28
Share
Return

ROA 2.82% 2.99% 3.87% 7.48% 18.19% 3.97% -15.45% 13.08% 15.46% 12.31% 0.20% 6.92%
ROE 6.18% 8.45% 8.52% 15.04% n/a n/a -31.65% 25.12% 18.84% 18.22% 0.40% 9.48%
Debt

Debt/Equity 1.19 1.83 1.20 1.01 n/a n/a 1.05 0.67 0.22 0.48 1.05 1.43
Debt/Capital 0.54 0.65 0.55 0.50 n/a n/a 0.51 0.40 0.18 0.32 0.51 0.59
KRAKATAU STEEL B
LOCAL COMPANY
PT. Krakatau Steel
Factor 1 (Scale and Diversity) Factor Weight Rating Calculation Score Aggregate Factor Weight

Size ( Net Consolidated Sales) 25% B $1,736,546,580.95 1 0.25
Business Profile 10% A 5 4 0.4
Factor 2 (Operating Performance and Volatility) Factor Weight Rating Calculation Score Aggregate Factor Weight
Ebit Margin (3 Year Average) 10% Ba 6.20% 2 0.2
Return on Tangible Assets (3 Year Average) 5% Baa 7.10% 3 0.15
CFO/Net Sales (3 Years Average) 10% A 31.95% 4 0.4
Factor 3 (Event Risk and Risk Tolerance) Factor Weight Rating Calculation Score Aggregate Factor Weight
Debt/Capital (recent year) 15% Baa 47.15% 3 0.45
Debt/EBITDA (3 Year Average) 10% Caa 5.85 0 0
Factor 4 (Leverage and Interest Coverage) Factor Weight Rating Calculation Score Aggregate Factor Weight
EBIT/Interest (3 Year Average) 5% Ba 3.01 2 0.1
CFO-Div/Debt (3 Year Average) 5% Caa 9.28% 0 0
FCF/Debt (3 Year Average) 5% Caa -4.95% 0 0
Total

1.95
Ba2
PT. GUNAWAN DIANJAYA STEEL
PT. Gunawan Dianjaya Steel

Size ( Net Consolidated Sales) 25% Caa $199,898,538.87 0 0
Business Profile 10% Baa 3 3 0.3
Ebit Margin (3 Year Average) 10% Baa 9.70% 3 0.3
Return on Tangible Assets (3 Year Average) 5% Aa 15.01% 5 0.25
CFO/Net Sales 10% Caa 916.79% 0 0
Debt/Capital 15% A 39.91% 4 0.6
Debt/EBITDA (3 Year Average) 10% B 4.03 1 0.1
EBIT/Interest (3 Year Average) 5% Baa 5.04 3 0.15
CFO-Div/Debt (3 Year Average) 5% Caa 4.45% 0 0
FCF/Debt (3 Year Average) 5% Baa 11.61% 3 0.15
Total

1.85
Ba 2
PT. JAYA PARI STEEL
PT. Jaya Pari Steel
Size ( Net Consolidated Sales) 25% Caa $50,004,909.41 0 0


Business Profile 10% Ba 2 2 0.2
Ebit Margin (3 Year Average) 10% Baa 10.65% 3 0.3
Return on Tangible Assets (3 Year Average) 5% A 13.38% 4 0.2
CFO/Net Sales 10% Ba 63.61% 2 0.2
Debt/Capital 15% Aa 27.02% 5 0.75
Debt/EBITDA (3 Year Average) 10% Baa 2.04 3 0.3
EBIT/Interest (3 Year Average) 5% Aaa 64.76 6 0.3
CFO-Div/Debt (3 Year Average) 5% Aa 54.28% 5 0.25
FCF/Debt (3 Year Average) 5% Aaa 56.04% 6 0.3
Total

2.8
Baa 3
POSCO
INTERNATIONAL COMPANY
POSCO
$
Size ( Net Consolidated Sales) 25% Aaa 6 1,5

53.430.000.000,00
Business Profile 10% Aa 7 5 0,5
Aggregate
Factor 2 (Operating Performance and Volatility) Factor Weight Rating Calculation Score
Factor Weight
Ebit Margin (3 Year Average) 10% Baa 11,93% 3 0,3
Return on Tangible Assets (3

5% A 10,05% 4 0,2
Year Average)
CFO/Net Sales 10% Aaa 86,83% 2 0,2
Aggregate
Factor 3 (Event Risk and Risk Tolerance) Factor Weight Rating Calculation Score
Factor Weight
Debt/Capital 15% Baa 48,64% 3 0,45
Debt/EBITDA (3 Year Average) 10% Baa 2,94 3 0,3
Aggregate
Factor 4 (Leverage and Interest Coverage) Factor Weight Rating Calculation Score
Factor Weight
EBIT/Interest (3 Year Average) 5% Aa 11,12 5 0,25
CFO-Div/Debt (3 Year Average) 5% Ba 19,87% 2 0,1
FCF/Debt (3 Year Average) 5% Baa 10,90% 3 0,15
Total 3,95
A2
ARCELLOR MITAL
Arcellor Mital
Size ( Net Consolidated Sales) 25% Aaa $ 78.025.000.000,00 6 1,5


Business Profile 10% Aa 7 5 0,5
Aggregate
Factor Weight
Ebit Margin (3 Year Average) 10% Ba 5,50% 2 0,2

5% Ba 3,76% 2 0,1
Year Average)
CFO/Net Sales 10% A 39,05% 4 0,4
Aggregate
Factor Weight
Debt/Capital 15% Ba 52,31% 2 0,3
Debt/EBITDA (3 Year Average) 10% Caa 7,21 0 0
Aggregate
Factor Weight
EBIT/Interest (3 Year Average) 5% Ba 2,55 2 0,1
CFO-Div/Debt (3 Year Average) 5% B 12,18% 1 0,05
FCF/Debt (3 Year Average) 5% Ba 1,29% 1 0,1
Total 3,2
Baa 2
U.S. STEEL
U.S. Steel

Size ( Net Consolidated Sales) 25% A $ 17.374.000.000,00 4 1
Business Profile 10% A 6 4 0,4
Aggregate
Factor Weight
Ebit Margin (3 Year Average) 10% B 2,49% 1 0,1

5% Ba 2,77% 2 0,1
Year Average)
CFO/Net Sales 10% Caa 345,29% 0 0
Aggregate
Factor Weight
Debt/Capital 15% Ba 74,91% 2 0,3
Debt/EBITDA (3 Year Average) 10% Caa 12,19 0 0
Aggregate
Factor Weight
EBIT/Interest (3 Year Average) 5% B 2,49 1 0,05
CFO-Div/Debt (3 Year Average) 5% Caa 3,64% 0 0
FCF/Debt (3 Year Average) 5% B 1,04% 1 0,05
Total 2
Ba 2
MOODY'S FRAMEWORK
To assess the Moody’s assessment, financial statements of 2008, 2009 and 2010 are needed. Some of the ratios in
Moody’s Global Steel measurement are using data of three years while other ratios only use the data of 2010.
In this rating methodology, there are four To analyze using Moody’s there are seven rating categories. Those categories

categories that Moody is focusing. Those vary from Caa to Aaa. Caa is the worst rating that a company can achieve
categories are: Size and Business Profile; while the Aaa rating is the highest one. Score attached for each rating is also
Operating Performance and Volatility; vary, from zero to six. Below are the indicated rating categories in Moody’s.
Financial Policies; Financial Strength. The four
categories will be broken down into ten sub
factors. Below are the key rating factors
MOODY’S GLOBAL STEEL METHODOLOGY FACTOR GRID
including the weight score of each category:
LISTENING.
THANK YOU FOR
B
E
Y

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FINANCIAL MANAGEMENT AND POLICY

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Compound Annual Growth Rate

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

ROE 15,04% 20 ROE 9,48% 14 ROE 25,12% 20

ROI 20,32% 15 ROI 14,68% 12 ROI 34,24% 15

Cash Ratio 73,76% 5 Cash Ratio 12,17% 2 Cash Ratio 0,89% 0

Current Ratio 157,29% 5 Current Ratio 276,83% 5 Current Ratio 169,03% 5

ROE 15,04% 18 ROE 9,48% 7 ROE 21,34% 20

Total Score 63,9 Total Score 53 Total Score 62

Rating AA Rating A Rating AA

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Bambang will use several ratios which can be

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

EPS 31 46 49 81 38 25 -26 21 55.42 65.54 2.56 37.93

Book Value per

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Business Profile 10% A 5 4 0.4

Ebit Margin (3 Year Average) 10% Ba 6.20% 2 0.2

Return on Tangible Assets (3 Year Average) 5% Baa 7.10% 3 0.15

CFO/Net Sales (3 Years Average) 10% A 31.95% 4 0.4

Debt/Capital (recent year) 15% Baa 47.15% 3 0.45

Debt/EBITDA (3 Year Average) 10% Caa 5.85 0 0

EBIT/Interest (3 Year Average) 5% Ba 3.01 2 0.1

CFO-Div/Debt (3 Year Average) 5% Caa 9.28% 0 0

FCF/Debt (3 Year Average) 5% Caa -4.95% 0 0

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Business Profile 10% Baa 3 3 0.3

Ebit Margin (3 Year Average) 10% Baa 9.70% 3 0.3

Return on Tangible Assets (3 Year Average) 5% Aa 15.01% 5 0.25

CFO/Net Sales 10% Caa 916.79% 0 0

Debt/Capital 15% A 39.91% 4 0.6

Debt/EBITDA (3 Year Average) 10% B 4.03 1 0.1

EBIT/Interest (3 Year Average) 5% Baa 5.04 3 0.15

CFO-Div/Debt (3 Year Average) 5% Caa 4.45% 0 0

FCF/Debt (3 Year Average) 5% Baa 11.61% 3 0.15

Size ( Net Consolidated Sales) 25% Caa $50,004,909.41 0 0

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Ebit Margin (3 Year Average) 10% Baa 10.65% 3 0.3

Return on Tangible Assets (3 Year Average) 5% A 13.38% 4 0.2

CFO/Net Sales 10% Ba 63.61% 2 0.2

Debt/Capital 15% Aa 27.02% 5 0.75

Debt/EBITDA (3 Year Average) 10% Baa 2.04 3 0.3

EBIT/Interest (3 Year Average) 5% Aaa 64.76 6 0.3

CFO-Div/Debt (3 Year Average) 5% Aa 54.28% 5 0.25

FCF/Debt (3 Year Average) 5% Aaa 56.04% 6 0.3

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Business Profile 10% Aa 7 5 0,5

Ebit Margin (3 Year Average) 10% Baa 11,93% 3 0,3

Return on Tangible Assets (3

CFO/Net Sales 10% Aaa 86,83% 2 0,2

Debt/Capital 15% Baa 48,64% 3 0,45

Debt/EBITDA (3 Year Average) 10% Baa 2,94 3 0,3

EBIT/Interest (3 Year Average) 5% Aa 11,12 5 0,25

CFO-Div/Debt (3 Year Average) 5% Ba 19,87% 2 0,1

FCF/Debt (3 Year Average) 5% Baa 10,90% 3 0,15

Size ( Net Consolidated Sales) 25% Aaa $ 78.025.000.000,00 6 1,5

FINANCIAL MANAGEMENT AND POLICY/SYNDICATE 3/YP66C

Ebit Margin (3 Year Average) 10% Ba 5,50% 2 0,2