pitchbook us template · luxury car3 6.2% source: euromonitor report as of july 2012 ¹ refers to...

Due Diligence Meeting & Public Expose

Company Presentation


Agenda

1

2. Industry overview

3. Investment highlights

4. Financial highlights

1. Business overview

5. Appendix


Presentation2

Teamwork & Discipline

Motivation & Inspiration

Care & Commitment

Persistence

1. Business Overview

2


Ta

ks

i R

eg

ula

r Ta

ks

i P

rem

ium

V

AT

B

Express Group Today

3

One of the leading transportation operator in

Indonesia

24+ years of business operations

11,000+ regular taxi fleet in H1Y2014

Supported by more than 11,000 primary and

13,000 reserve drivers


Independent

Commissioner

S.Y. Wenas

Independent

Commissioner

Paul Capelle

President

Commissioner

Stephen K. Sulistyo

Commissioner Commissioner

Tan Tjoe Liang Darjoto Setyawan

Commissioner

Board of Director& Commissioners

Professional management with various experience in transportation industry

President Director

Daniel Podiman

Director

Herwan Gozali

Director

David Santoso

Independent

Director

Shafruhan Sinungan

4


Evolution of Express Group

5

2009 2010 2011 2012 2013

Greater Jakarta, Bali, Lombok, Bandung

Track

Record

Business

Evolution

Commission-based Partnership-scheme

Regular Taxi

VATB2 & Premium Taxi3

Salary + Commission

Greater Jakarta, Surabaya, Semarang and Medan

Fleet size

Profile

10

1,000+

3,198 4,922

6,002

10,000+1

24+ years of

track record

with the same

management

A

Pioneering

business model

with integrated

offering

B

Fleet profile

demonstrates

ability to grow

and expand

C 1,000 fold increase in fleet size since inception

Premier Transportation Operator with a proven operating and growth track record in Indonesia

1989 2002 2008 2010 2011 2012

Start commercial operation UNDP recognition

Start / invent partnership scheme Begin major expansion

Note: 1 Unit by end of 2013 2 On a Salary scheme; 3 On a Commission scheme

2013

8,035

IPO

2014

Launching Bus & Eagle Taxi

Bond’s Issuance

Due Diligence Meeting & Public Expose 6

Express Group Corporate Overview

Regular Taxi Premium Taxi VATB

100%

Bali, Bandung,

Jakarta

Bali,

Lombok

TAXIS Car Rental Eagle High Limousine

service Product offering

Approx. 85% of YTD December 2013

Revenue Approx. 15% of YTD December 2013

Revenue

Approx. 85% of 6 month period 2014

Revenue (unaudited)

Approx. 15% of 6 month period 2014

Revenue (unaudited)

100% 20% *

100% 20% *

Jakarta Jakarta

* The remaining 80% shareholding is owned by a third party, PT Mahkota Imperia


Business

Segments

Re

gu

lar

Ta

xi

Pre

miu

m T

ax

i

More than 10,500 fleet as of June 2014

Operates principally in Greater Jakarta, Surabaya,

Semarang, Medan and Padang

In preparation for expansion to other cities

108 licensed premium taxis as of December 2013

through associated company

Additional 300 units will be operated by end of year

2014 through our subsidiary

Taxi service provided under the Tiara Express line

Operate in Greater Jakarta area

7

Snapshot of Express’ Business Operations…

New brand “Eagle Taxi” is exclusively ready to serve

hotels and other shelters

300 fleets as of June 2014 and there will be

additional 200 fleets operated by end of year 2014.


Lim

o &

Car

Ren

tal

Bu

s

Comprises primarily of limousine services in

Bandung, Bali and Lombok, operated by a

subsidiary and through an associated company

Commenced operations in Greater Jakarta and

Bandung in 2012

New business line started in 2014

and 100 units will be ready for

operation by end of year 2014

Bus service provided under the

Eagle High line

Operate as tourism bus in Greater

Jakarta area, mostly serve corporate,

school and tourism agency

Consist of medium size (25 seats)

and big size (47 – 59 seats)

8

Snapshot of Express’ Business Operations…

Business

Segments

V

A

T

B


Medan

Semarang Bali Surabaya

Padang Rapidly growing population in key cities

Increasing business travels due to strong

economic growth

Increased intra-city transportation as

other key cities grow

Expected strong growth in tourist areas

like Bali and Lombok etc

9

… and its geographical locations

Strategically located business operations with strong growth potential

Key Highlights

Regular

AGLE HIGH

Car Rental

Limousine

Bandung

Car Rental

Limousine

Regular

Regular Potential City

Balikpapan

Lombok

Jadetabek


Hotels with Express Tiara, Limousine and Eagle Taxi

We continuously serve the following 5-stars Hotels in Jakarta, Bandung, Bali and Lombok.

We will expand to many other hotels to serve our customers better.


Presentation2



Care & Commitment

Persistence

2. Industry Overview

11


Huge untapped market potential

0.24

3.12

5.20

Indonesia Malaysia Singapore

Large untapped potential in Indonesia

Demand for ground transportation has continued to

show an upward trend in recent years

Indonesia’s ridership in the taxi industry has grown at

an average of approximately 12.3% since 2007 to 2011

Expected growth in ridership from 2012E to 2016E is

at a CAGR of 18.2% which is higher than historical

rates

Indonesia still has large untapped potential in the

ground transportation sector vis-à-vis other Southeast

Asian countries

Taxi per 1,000 people in SEA as of year-end 20111

Source: Global Insight, Euromonitor report as of July 2012

Note; 1 Based on 59.1K taxis in Indonesia, 90.0K taxis in Malaysia, and 27.0K taxis in Singapore; Based on 242.3mm population in Indonesia, 28.9mm population in Malaysia, and 5.2mm

population in Singapore

213 241 259 292 338 393

456 538

637

766

2007 2008 2009 2010 2011 2012E2013E2014E2015E2016E

50 52 52 57 59 71

81 94

109

128

2007 2008 2009 2010 2011 2012E2013E2014E2015E2016E

Demand (taxi ridership in mm)

Supply (taxi fleet size in ‘000s)


Favorable structural dynamics

Licenses Auction

High level of funding

Challenge in finding good drivers

Grant tax facility to claim back luxury tax

incurred for taxi companies

Increase parking tariff to limit the usage of

private vehicles

Lack of reliable rapid mass transportation

Trouble from traffic congestions deters

commuters to use own vehicles

Government

stimulate

growth

Barriers to

entry

Lack of public

transport

systems

Grant tax facility to claim back luxury tax

incurred for taxi companies

Increase parking tariff to limit the usage of

private vehicles

Government

stimulate

growth


Announcement for winners of the

licenses auction

Verification of documents, selection

and scoring level by the government

Submission of documents by the

participants

14

Barriers to Entry in Indonesia Market

Setting of requirements and related

data for auction participants

Announcement for auction of taxi

licenses in media by the government

A u c t i o n P r o c e s s

The requirements set by the government depend on the quota and current

taxi industry condition. However, it is generally categorized into 3 types:

Category A: High standard of requirements (500 licenses granted)

Usually only Express Group and another major company

could pass the requirements

Category B: Medium standard of requirements (300 licenses granted)

Usually only Express Group and other 3 major companies


Category C: Low standard of requirements (100 licenses granted)

Usually Express Group and many other taxi companies


At this stage, it is also required to submit the following data:

1. Bank guarantee

Amount = No. of licenses X Car Price (On-the-road)

2. Potential drivers data

No. of drivers = No. of licenses X 2

3. Company Profile

- Reputable board of directors and commissioners

- Good testimonial from car vendors

- Adequate infrastructure and pool development

New taxi companies will have difficulty to comply with all of the above

auction requirements. As a result, it will be tough for them compete in

the market with small number of units taxi that they have.


Scouting Strategy for New Taxi Drivers

PKB

Brand Ambassador

Community Radio

Medical Program

Roadshow

(Program Kemitraan Bersama)

To motivate existing drivers to continuously help

the Company looking for new drivers

In certain events, our top performer

drivers speak on behalf of the Company

to persuade good candidates of new taxi

driver

Spreading recruitment news throughout certain

radio channels to boost the awareness of some

communities that we are targeting to

Serving our taxi drivers at every pool with regular

medical checkup and medical facilities to maintain

their health and fitness

Bus as facilitation for roadshow to Driver’s

village helps to accommodate entertainment/

marketing campaign as well as to promote

recruitment of new taxi drivers

15


Overview of Indonesia taxi industry

Standard Saloon2

93.8%

Breakdown by vehicle type and geography

Key players overview

% of 2011 market size

Greater Jakarta

65.7%

Bali

5.6%

Others

28.7%

Luxury Car3

6.2%

Source: Euromonitor report as of July 2012

¹ Refers to the consumer spend on Taxi Services stemming from both “Standard Saloon” and “Luxury Car” types; 2 “Standard Saloon” is defined to be a regular car, below 2000cc; 3 “Luxury

Car” is defined to be a high-end car, above 2000cc; 4 As of year end 2011

By vehicle type By geography

Fleet (‘000s)4 Business model

Commission based

Partnership scheme

15.7

8.0

1,982 2,346 2,635 3,232 4,114 5,066

6,183 7,639

9,405

11,767

2007 2008 2009 2010 2011 2012E2013E2014E2015E2016E

Market size¹ (in Rp.bn)

Competitive landscape

0% 10% 20% 30% 40%

% of 2011 fleet – Indonesia taxi market

Approx. 45% of

market share

controlled by

top 4 players

0.22 0.22 0.22 0.24 0.24 0.29 0.33 0.38 0.43 0.50

Taxis per 1,000 people

10.2%

Company A

Company B

Company C

Company A


Presentation2



Care & Commitment

Persistence

3. Investment Highlights

17


Investment Highlights

Pioneering

business

model with

partnership

scheme

Enhancement of service

quality with newest

innovation

One of the leading taxi provide

with premium brand image and

excellent services

Business

with strong

and stable

cash flow

stream

Solid support from major

shareholder

Strong platform with proven track

record

18

We offer opportunities for

our investor to take part in

the rapid growth of

Indonesian Economic

Development, especially in

land transportation

services


1

19

Express’ second largest market share has translated premium brand equity

Awards received for premium brand imaging and top customer services

Indonesia New Best Emiten 2013 from Warta Ekonomi

Silver Brand Champion of Taxi Operator in Jakarta, from Markplus Insight and Marketeers Magazine

The Best Innovation in Marketing and The Best in Social Marketing from Marketing Magazine

Indonesia Superbrand 2013 from Superbrands Indonesia

SPEx2 2013 Award, The Best in Inclusive Strategy, from GML and Fortune Indonesia

The Most Impressive SME Report 2012 from UNCSR

Market position as an industry leader translates into key tangible benefits to Express


1

20

Express’ second largest market share has translated premium brand equity

Awards received for premium brand imaging and top customer services

One of the Express Group’s driver achieve an award

#2 AKUT National 2014 (National award for taxi drivers across Indonesia)


2

21

Pioneering business model

Provides security deposit and pays a fixed revenue stream to company

Reward eligible driver with the option to purchase the vehicle after 5 – 7 years if certain criteria are met

Purchases and operates the taxi

Provides training and facilities

PARTNERSHIP SCHEME MODEL

Ex

pre

ss D

rive

rs

Express Group Customers / Drivers

Drivers

+ Strong sense of ownership forging

entrepreneurial mindset

+ Opportunity to own a vehicle creates motivation

to perform

+ High motivation by drivers to earn additional

income

+ Opportunity to train and upgrade improving

overall customer service

Customers

+ High quality services and service consistency

+ High vehicle utilization rate with strong

emphasis on driver performance

+ Attracts strong pool of quality of drivers with

high retention rates

+ Well maintained fleet to serve its customers

+ Drivers highly motivated to provide high

quality service - creates strong equity

branding for company

Alignment of key incentives between parties translates into a consistently high quality of service to customers

Pioneering business model aligns and marries the key incentives of all key parties resulting in successful end results


Enhancement of Quality Services with Newest Innovation 3

Multi Purpose Vehicle

Regular Taxi

Payment with Express Card or BCA Flazz could be used

for

Centralized

Call Center

(021) 500-122

Innovation for the Enhancement of Quality Services

22


4

23

Strong scalable platform with a proven growth track record

Regular Taxi Fleet Size

EBITDA (Rp.mm)

Simple & Scalable platform

Obtain driver licenses Operational and

income generating fleet

Income to Express Converting awarded

taxi licenses to

utilized new fleet

Income to Express

directly correlated to

scale of operations

Simple, scalable business model which directly correlates income from our regular taxi operations to the size of our fleet

3,198 4,922 6,002

8,035 10,029 11,000

2009 2010 2011 2012 2013 H1Y2014

120 159 232

327 442

254

-

100

200

300

400

500

2009 2010 2011 2012 2013 H1Y2014*

38%


5

24

Resilient and stable cash business

Note: 1 As of December 2013 ; 2 From regular taxi drivers

Pioneering cash management system provides us with a sustainable and positive source of working capital and allows for stable and attractive EBITDA margins

Key highlights

Stable cash inflows

Initial security deposit of Rp.7.5mm1 collected

Daily collection of fixed driver tariff fee of Rp.240,0001,2 provides stable cash inflows

Rp.40,0001,2 collected on a daily basis as contribution towards maintenance reserve

Pricing flexibility

Ability to revise deposit amount and introduce different tariffs across drivers and vehicles

depending on market conditions

Fixed operational costs

Bulk of the operational costs include wages and salaries for staff and insurance costs for the

taxis

Regular taxi business segments also do not bear the fuel and maintenance costs


…coupled with strong sponsor support

Strong domestic network

Strong foothold in various

strategic sectors in Indonesia

(Hotels, property, agriculture,

infrastructure and mining)

Turn around of Bentoel1

Significantly increased

the value of Semen

Gresik1

Established 1st privately owned GSM provider (XL)

Established 1st free-to-air television provider (RCTI)

Developed Express into No. 2 player in Indonesia

Manages a portfolio of

investments in hotels,

property, agriculture,

infrastructure and

mining

Track record

of value

creation

Strong

domestic

access in

Indonesia

Proven

capital

allocation /

execution

expertise

Innovative

&

entrepreneurial

creativity

Strong

linkage to

international &

local

investors

6

Relationships with

multinational companies

across a variety of

industries

Note: 1 Indonesian publicly listed company


Our strategic roadmap going forward

EXPAND VALUE ADD SPECTRUM ACCELERATE MARKET POSITION

INCREASED FOCUS ON

TECHNOLOGY & HUMAN

RESOURCES

Further expand market share in

Greater Jakarta and other regions

through fleet expansion

Fortify market position in tourist

destinations (Bali, Lombok,

Bandung)

Further expand into Premium and

value-added

transportation businesses

Diversify into chartered bus

business to further integrate service

offering

Equip GPS and calling service

gadgets into the taxi fleet

Roll out of pre-paid services to

expand corporate base

Training for drivers and

employees

1 2

3


Presentation2



Care & Commitment

Persistence

4. Financial Highlights

27


Regular Taxi 85%

VATB 15%

Regular Taxi 88%

VATB 12%

FY2013A

Key Revenue Drivers

Revenue

drivers

Revenue

No. of

License

Fleet

Fixed tariffs

Regular Taxi Segments

Ridership

Volume Tariffs

VATB Segments Revenue Breakdown

Regular taxi will continue to form

bulk of the contribution in the near

term despite planned VATB

expansion initiative

Current fixed tariffs: Rp240,000

Historical tariff growth a good measure

of forward rates

Fleet size increase to more than

10,800 by June 2014 with revenue

constitutes approx. 85% for 6 month

period ended June 2014

Relatively predictable revenue given

secured fixed tariffs which will start

contributing at the moment when taxi

fleet become operational

Rental revenue constitutes approx. 15%

of FY13A revenue

VATB revenue constitutes approx. 15%

for revenue of 6 month period ended 30

June 2014

Historical revenue split between

regular and VATB a good measure of

contribution in the near term

FY2012A

Revenue


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Regular ExpressTiara Express

Eagle High

47.7%

19.4% 24.4%

52.3%

80.6% 75.6% Direct Cost

Indirect Cost

29

Margin Comparison of Business Segment

The margin diagram below

is based on the cost

calculation worksheet with

the following assumptions:

Regular Express Tiara Express Eagle High

Type of vehicle: Toyota Etios Toyota Alphard Mercedes-Benz Big Bus

No. of vehicles: 100 200 100

Useful live (years): 6 5 10


Key Financial Summary

Significant increase in our financial profile resulting from the aggressive expansion in fleet size starting from 2010

Revenue (Rp billion)

Gross Profit (Rp billion)

Source: Company audited financial statements

* Unaudied numbers as per June 2014

Aggresive expansion resulted an increasing of Revenue and Gross Profit, showing a promising development of our Company

188

219

338

521

687

409

2009 2010 2011 2012 2013 H1Y2014*

38%

25 56

138 184

220

136

2009 2010 2011 2012 2013 H1Y2014*

72%


Key Financial Summary

As we’re reached total unit of 11,000 on Regular taxi, growth of Net Income shows a promising development of our Company

EBITDA (Rp billion)

Net Income (Rp billion)

Source: Company audited financial statements;

* Unaudied numbers as per June 2014

120 159 232

327 442

254

2009 2010 2011 2012 2013 H1Y2014*

38%

3 35 60

79

133

79

2009 2010 2011 2012 2013 H1Y2014*

161%


Return on Assets Return on Equity

0,9%

5,4% 6,0%

4,5%

6,2%

2009 2010 2011 2012 2013

6,0%

25,0%

29,1%

11,6%

16,6%

2009 2010 2011 2012 2013

Return of Investment

The growing profile of Return of Investment

as well as the increasing of Company’s ability in creating profitability

will be supported by the positive growing of transportation sector in Indonesia

32

IPO

IPO


Additional Fund from Issuance of Bonds

33

Purchase of Vehicles

Purchase of Land and

Infrastructure

Utilization Plan on Bond Funds

40%

60%

Principal: IDR 1,000,000,000,000

(1 Trillion Rupiah)

Issuance date: 17 June 2014

Period: 5 years

Interest rate: 12.25% p.a.

Interest payment: Quarterly

Term of payment: Bullet Payment

Rating: idA (Single A) *

* Rated by PT Pemeringkat Efek Indonesia


Key Takeaways

Pioneering partnership model that aligns interest

Young and well-maintained taxi fleet

Strong scalable platform with a proven growth track record

Large & growing pool of drivers to increase market position

Resilient and growing cash flow profile

Innovative cash management system

Strong management with a proven operational record

Strong sponsor with a proven track record to add value

34


Achievements in 2014

a. Additional 150 bus units and 300 premium taxi units

b. Launching of Multi-Purpose Vehicle (“MPV”) taxi

c. New brand - Eagle Taxi (commission based taxi)

d. Utilization of mall’s parking lot as taxi depot

e. Centralization of Call Center

f. Launching of Express Card

g. Launching of Express Now (mobile apps)

h. Installation of Cash Handling Machine at taxi depots

i. Use of shipping container as office at taxi depot

j. Purchase of lands as taxi depot

k. Commencement of IT based projects to support operational activities

l. Implementation of Multi-Level-Marketing Hiring Program (Program Kemitraan Berjenjang)

We keep on expanding our business through recent activities in 2014 as follow:


Additional Bus and Premium Taxi

Additional new units for “Eagle High” bus and “Tiara Express” premium taxi will increase the revenue

contribution from VATB business line.

We are in the process of adding 130 units of big bus and 20 units of medium bus. Besides, new brand

“Illusion” is also in progress for Premium Bus Coach.

Additional 300 units of premium taxi are also underway with

more variety types of car; they are

Toyota Alphard, Nissan Elgrand, Mercedes E-200,

Mercedes C-series and BMW 320d.

This is to support the potential addition of 200 new airport

stickers for premium taxi and also the development of

premium taxi industry in Jakarta.


Launching of Multi-Purpose Vehicle (“MPV”) Taxi

PT Satria Express Perdana (“SEP”), in Semarang (Central Java),

operated using Toyota Avanza as regular taxi.

There are 200 units of regular taxi operated in Semarang, so far.

Express Group’s new subsidiary in 2014, PT Express Sabana Utama

(“ESU”), has commenced its operation in Padang (West Sumatera) using

Suzuki Ertiga as regular taxi.

There are 100 units of regular taxi operated in Padang, so far.

Public Need and demand for spacious trunk

Company High resale value of the car


Eagle Taxi has operated since early 2014.

We have 297 units by end of August 2014.

Utilization of Mall’s Parking Lot as Taxi Depot

Taxi depots for Eagle Taxi are now located at empty parking

lot of malls. At the moment, 97 units are located at

Kuningan City and 200 units at WTC Mangga Dua.

Having taxi depot at these malls’ parking lot, Company

could reduce the costs for land leveling, pool infrastructure

and any related permit fees.

New Brand - Eagle Taxi (commission based taxi)


All of the Call Center activities are now centralized in Yogyakarta

(near Central Java).

This will help to reduce operational costs since the minimum salary

rate in Yogyakarta regional effective from 2014 is IDR 1,173,300

per month. This is lower than DKI Jakarta’s current minimum salary

rate at IDR 2,441,000 per month.

Launching of Express Card

Express Card was launched in June 2014.

We have approached several corporates for the sale of this

card. At the moment, demonstration activities are underway to

Rajawali Group entities (i.e. Rajawali TV and BW Plantation).

Centralization of Call Center


Launching of Express Now (Mobile Apps)

We have launched Mobile Applications “Taksi Express” and “Express Now” to the market. This

applications ease our customers to book taxi through their smartphones.

Taksi Express facilitates customer to book a taxi at a later time and location that they wish, while

Express Now helps to book a taxi straightaway and at the current location of the respective customer.

On September 14, 2014, the Grand Launching was taken place for Express Now during the Car Free

Day in Jakarta and we successfully get additional 1,000 downloaders just from this event.


We have installed the cash handling machines at our

25 taxi depots since September 2014. These

machines operate 24-hours and become a solution for

drivers to anytime deposit their daily taxi fixed tariff to

the cashier at every taxi depots.

As part of cost saving initiatives, we have also

used the shipping containers as office at our

taxi depots as follow:

1. Narogong 5. Cipondoh

2. Cipayung 6. Bekasi

3. Ciater 7. Joglo

4. Ciganjur 8. Batu Ceper

Installation of Cash Handling Machine at Taxi Depots

Use of Shipping Container as Office at Taxi Depot


Purchase of Lands as Taxi Depot

In 2014, the Company is in progress of buying

2 lands at:

1. Tangerang (1.2 hectares)

2. Cibubur (9.0 hectares)

Those lands will be used for:

1. Taxi depots for Eagle Taxi (commission based

taxi) and Eagle High (bus)

2. Training site for taxi drivers


Implementation of Multi-Level-Marketing Hiring Program Program Kemitraan Berjenjang (PKB)

PKB is a driver recruitment system which adopts the multi-level-marketing system, with minimum of

2 binaries and depth of 10 levels down. This program is open to internal staff (including existing drivers)

and public.

Having this program will not only help the Company to find new drivers, but also offer an opportunity

for additional income to the existing drivers and public sponsors.

The following potential bonuses await:

1. Recruitment bonus (maximum of IDR 97 million)

2. Operational bonus (maximum of IDR 30 million per month)

3. Point bonus (free domestic or international tour travel packages)


Presentation2

PT Express Transindo Utama Tbk

Gedung Express

Jl. Sukarjo Wiryopranoto No.11

Jakarta 11160

Telepon : (021) 2650 7000

Faksmili : (021) 2650 7008

Email : [email protected]

Website : www.expressgroup.co.id

44

pitchbook us template · luxury car3 6.2% source: euromonitor report as of july 2012 ¹ refers to...

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