## ICBP, record high Cashflow

Current, target price Rp9,200, 15,557 (+68%)

Last, next 12-months cashflow -Rp 25.6, +5.8 trillion

March 24th, 2021

1 minute read

Sales

Cashflow

1 minute read

Sales

- Sales surged 17% in the fourth quarter to Rp 12.74 trillion which is 15% above our forecast!
- This is after a -2% decline in the third quarter & brings the average quarterly average growth to 8%.
- We assume average growth of 4% in this next 12 months & sales to reach Rp 14.6 trillion by the fourth quarter of 2021.

Cashflow

- Cashflow was also extremely strong at Rp 2.73 trillion in the fourth quarter from Rp 328 billion in the third.
- This brings average quarterly Cashflow to Rp 838 billion (excluding the M&A).
- We use investment spending of Rp 668 billion, which with higher sales gives a higher average quarterly free Cashflow of Rp 1.45 trillion in this next 12 months.

## Record sales, record cashflow, de leveraging, higher target price...

Balance sheet

Profit

Value

- With positive cashflow the net cash minus total liabilities improved to -Rp 43,7 trillion in the fourth quarter from -Rp 47.2 trillion in the third quarter & -Rp 3.7 trillion a year ago pre-M&A.
- With our forecast higher cashflow & assuming a dividend payout of Rp 2.05 trillion...
- ...net cash will improve to -Rp 39.9 trillion in 12 months time.

Profit

- Fourth quarter net profit jumped to Rp 3.1 trillion on a large FX gain, up from Rp 753 billion in the third quarter.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was lower at 83%.
- We use the average 85% costs to predict a next 12 months profit of Rp 9.5 trillion.

Value

- ICBP post M&A has raised Rp 15 trillion of capital in the last six years.
- At the current market value of Rp 107 trillion, it’s 1.9X sales, only 1X assets, 2X equity with a 12.4% profitability & a 1.9% yield.
- Our cashflow forecast is Rp 5.8 trillion. At 1.6% with a 0.5X adjustment, gives a higher target price of Rp15,557.