A Brief Analysis of Customer’s Financial Statement:

Case of PT Orange Bird TbkYour Name here – Your Participant Number Here

Danamon Bankers Trainee Candidate 2019

• PT Orange Bird is a Taxi and Land Passanger Transportation Company. In order to purchase new gas & electric fleets, PT Orange Bird needs new credit facility.

• After their initial meeting with Bank X, the managements of PT Orange Bird gives their financial report for the last 4 years.

• This presentation would show how i briefly analyse potential customer’s financial statements before proceed to further credit appraisal analysis.

Strength

Early mover advantage

Strong brand &

reputation

Operator based model

Rapid expansionWeakness

High operating cost

Limited flexibility in

pricing (strictly regulated)

Lack of digital strategy &

resources

Opportunities

Ability to develop new

services in various cities

Continued expansion for

digital based sales

Collaboration accross

industriesThreats

Changes in regulations can

impact the business

Rising competition from ride-

hailing services

Shifting of consumers towards

convenience creates huge

demand

Revenue growth slower since 2014 (yoy).

Direct, operating, and depreciation expenses’ margin reached its highest in 2017.

ORANGE still shows positive figures on its profit margins.

ORANGE profitability is above average compared to similar businesses.

An increasing interest coverage ratio indicates that ORANGE able to pay its debts in the future.

2014 2015 2016 2017 Avg Min Max

Revenues Growth 21,37% 14,99% -12,36% -12,35% -0,40% -13,34% 12,83%

% Percentage to Revenues

Direct cost -56,25% -57,18% -56,94% -58,10%

GROSS PROFIT 43,75% 42,82% 43,06% 41,90% 26,22% 10,68% 36,31%

Operating exp. -8,05% -8,70% -11,16% -12,95%

EBITDA 35,70% 34,13% 31,89% 28,94% 17,26% -3,57% 42,02%

Depreciation exp. -13,57% -12,69% -15,06% -15,44%

EBIT 22,13% 21,44% 16,83% 13,50% -0,17% -28,73% 18,20%

Interest expense -5,94% -4,03% -4,44% -3,16%

Others 4,54% 2,78% 2,04% 3,03%

PRE-TAX PROFIT 20,73% 20,19% 14,42% 13,37% 9,37% -27,44% 59,66%

Income tax exp -5,18% -6,14% -4,60% -3,20%

NET PROFIT 15,55% 14,05% 9,83% 10,17% 4,93% -28,99% 43,91%

EBITDA to Interest 6,01 x 8,47 x 7,18 x 9,17 x -10,88 x -41,25 x 9,17 x

ROE 20,53% 17,76% 10,11% 8,67% 12,27% -14,17% 40,23%

ROA 10,32% 10,75% 6,46% 6,56% -1,26% -23,06% 18,32%

IndustryBlue Bird TbkOrange Bird Tbk

Debt to equity ratio shows opportunity to grow through debt.

Bank loan significantly reduced by early repayment & routine installment. Early repayment of 600 bio was done to

lower interest expense & leverage ratio in the midst of slow revenue’s growth.

DSCR declined since 2014 and reached 0,86 in 2016, but return to 1,31 in 2017.

ORANGE shows better performance compared to other companies.

stated in Rp billion 2014 2015 2016 2017

Cash and cash equivalents 951 271 592 474

Others current assets 1.221 566 1.021 771

Total Current Assets 2.171 837 1.613 1.245

Fixed assets 5.563 6.196 6.046 5.606

Others noncurrent assets 387 391 233 140

Total Noncurrent assets 5.950 6.587 6.279 5.745

TOTAL ASSETS 8.122 7.424 7.892 6.990

Current portion of LT bank loan 432 488 658 269

Other current liabillities 1.008 476 156 167

Total current liabilities 1.441 965 814 436

LT bank loan 1.314 1.281 1.186 495

Other noncurrent liabillities 813 579 638 655

Total noncurrent liabilities 2.128 1.860 1.824 1.150

TOTAL LIABILITIES 3.568 2.825 2.638 1.586

Total Equity 3.603 4.328 4.663 4.931

TOTAL LIABILITS & EQUITY 7.172 7.153 7.301 6.516

Avg Min Max

Current ratio 1,51 x 0,87 x 1,98 x 2,86 x 0,70 x 0,10 x 1,18 x

Debt to equity 0,99 x 0,65 x 0,57 x 0,32 x 0,78 x 0,12 x 2,38 x

Debt service coverage 1,34 x 1,20 x 0,86 x 1,31 x 0,10 x -1,25 x 1,31 x

Industry

CF from operation hit its lowest in 2017 due to competition.

The acquisition rate slowed but ORANGE expects to purchase big number of fleets in 2018

ORANGE made early payment and no withdrawal in 2017. Thus, obtaining new credit facility is necessary to continue expansion.

In the end of 2017, ORANGE had Rp474 bio cash, lower compared to 2016.

ORANGE ability to pay off all its outstanding debt using its operating cash has broken its records at 1,53 years.

in Rp billion 2014 2015 2016 2017

Cash receipts 4.833 5.517 4.863 4.267

Cash payments (3.686) (4.041) (3.709) (3.233)

Nett CF from Operation 1.147 1.476 1.155 1.034

Proceeds from sale of NC assets 383 353 364 380

Acquisition of fixed assets (2.282) (1.729) (901) (299)

Nett CF for Investment (1.899) (1.377) (537) 82

Share issuance & IPO 2.447 - - -

Payment of bank loans (1.877) (1.511) (688) (1.080)

Proceed of bank loans 1.211 1.153 562 -

Dividends payment (345) (504) (171) (153)

Nett CF for Financing 1.436 (863) (297) (1.233)

Nett Increase (Decrease) in Cash 684 (764) 320 (118)

Cash at the beginning of the year 267 951 271 592

Cash at the end of the year 951 187 592 474

Operating CF to Debt ratio (yrs) 3,11 1,91 2,28 1,53

For ORANGE

• To extend collaborations with different platforms and industries

• To have solid digital base and strategy

• To have positive revenue growth and lower direct & operating cost

• To purchase new cars focusing in MVP to fulfill market demand

• To obtain new credit facility with competitive rate in order to acquire new fleets

For BANK X

• Despite low performance in 2017, ORANGE still has repayment capacity.

• Based on its history, ORANGE’s management has intention and dedication to pay back the loan.

• Bank X needs to conduct in-dept term loan appraisal.

• Overall, based on this simple analysis, ORANGE is worthy of new credit facility.