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KLBF, higher payments ahead
🎯 💊 📈 Rp2,048
Last 12-month cashflow +Rp 1,812BN
November 1st, 2020
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Sales
Sales growth slowed in the 3Q to -3% YoY from 0% in the 2Q. Sales at Rp 5.5TN were 7% below forecast & seasonally -5% from the 2Q. Distribution had negative growth, nutrition, prescription (+39%!) & consumer had positive growth. Sales will be seasonally higher in the 4Q & we predict growth of +1.9% this next 12 months to Rp 23.3TN.
Cashflow
Cashflow was also lower in the 2Q, but well above our forecast at Rp 831BN excluding working capital. Investment spending has slowed to below Rp 200BN from Rp 473BN a year ago. We use Rp 207BN investment spending which together with our higher sales forecast gives an average quarterly free cashflow forecast of Rp 640BN in this next 12 months.
Sales growth slowed in the 3Q to -3% YoY from 0% in the 2Q. Sales at Rp 5.5TN were 7% below forecast & seasonally -5% from the 2Q. Distribution had negative growth, nutrition, prescription (+39%!) & consumer had positive growth. Sales will be seasonally higher in the 4Q & we predict growth of +1.9% this next 12 months to Rp 23.3TN.
Cashflow
Cashflow was also lower in the 2Q, but well above our forecast at Rp 831BN excluding working capital. Investment spending has slowed to below Rp 200BN from Rp 473BN a year ago. We use Rp 207BN investment spending which together with our higher sales forecast gives an average quarterly free cashflow forecast of Rp 640BN in this next 12 months.
Prescription sales jump, higher cashflow & dividend, shares to breakout...
Balance sheet
The stronger than expected cashflow means the already high net cash keeps on rising. Net cash was at Rp 2,952BN as of the 3Q, up from Rp 2,320BN in the 2Q, Rp 1,879BN a year ago. With our cashflow forecast & a dividend payment of Rp 2,275NN, net cash will still rise further to Rp 3,237BN IN 12 months time.
Profit
Despite the slightly lower sales, net profit was higher than a year ago at Rp 664BN. This is because the cash cost ratio net profit depreciation minus sales as a % of sales has improved significantly, down to 85%. We use the same 85% to predict that the next 12 months net profit will rise +6.7% to Rp 2,843BN.
Value
KLBF has been paying out t capital, Rp 6,283BN so far. This can now accelerate because of the net cash. At Rp 71.5TN, it’s 11.4X capital paid, 3.06X sales, 3.21X assets, 3.87X equity with a profitability of 15% & 3.2% yield. Our cashflow forecast is now Rp 2,560BN. At 1.6% with a 0.5X adjustment gives a higher target price Rp2,048.
The stronger than expected cashflow means the already high net cash keeps on rising. Net cash was at Rp 2,952BN as of the 3Q, up from Rp 2,320BN in the 2Q, Rp 1,879BN a year ago. With our cashflow forecast & a dividend payment of Rp 2,275NN, net cash will still rise further to Rp 3,237BN IN 12 months time.
Profit
Despite the slightly lower sales, net profit was higher than a year ago at Rp 664BN. This is because the cash cost ratio net profit depreciation minus sales as a % of sales has improved significantly, down to 85%. We use the same 85% to predict that the next 12 months net profit will rise +6.7% to Rp 2,843BN.
Value
KLBF has been paying out t capital, Rp 6,283BN so far. This can now accelerate because of the net cash. At Rp 71.5TN, it’s 11.4X capital paid, 3.06X sales, 3.21X assets, 3.87X equity with a profitability of 15% & 3.2% yield. Our cashflow forecast is now Rp 2,560BN. At 1.6% with a 0.5X adjustment gives a higher target price Rp2,048.
