TBS Company Presentation 1H 2017 (2)

1

Disclaimer

These materials have been prepared by PT Toba Bara Sejahtra Tbk (the “Company”).

These materials may contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances.

These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate professional advice.

Table of Contents

2

Company Profile

Performance Highlights

3

1

Strategy to Venture into Power

3

i

Sulbagut-1 Project

4

Performance Highlights

_{Performance Highlights}

 Location: Kutai, Kalimantan Timur

 Hak Guna Usaha (“HGU”) covers 8,633 ha, where 2,701 ha has been planted

 CPO mill with capacity of 30 tons Fresh Fruit Bunch (“FFB”)per hour

 GLP and MCL established in February 2016 and March 2017 respectively for development of steam (coal) fired power plant project (“CFPP")with capacity of 2x50 MW each

 25 year Power Purchase Agreement (“PPA”) through

Independent Power Producer (“IPP”) scheme with PLN as single offtaker

 TBE established in December 2016 for investment in power generation business

5

Toba Bara Sejahtra In Brief

 Location: Kutai Kartanegara, Kalimantan Timur

 Total Concession: 7,087 ha

 JORC-compliant proved and probable reserves of 147 MM tons and measured, indicated and inferred resources of 236 MM tons

 Coal brands with mid to upper range calorific values ranging from 4,700-5,900 Kcal/kg GAR

 Prime location provides operational cost edge to grow as a logistical & operational center for the area

Coal Mining

Palm Oil Plantation & Mill

Toba Bara Sejahtra(Toba) has 5 (“five”) subsidiaries engaged in:

Note:

1. PLN: PT Perusahaan Listrik Negara (Persero)

Ownership Structure

License

Area

Davit Togar Pandjaitan

PT Bara Makmur Abadi

PT Toba Sejahtra PT Sinergi Sukses Roby Budi Prakoso Utama

61.91% 10.00% 6.25% 5.10%

PT Toba Bumi Energi (䇾TBE䇿)

99.99% 99.99%

3.64%

51.00% 99.99%

Public *)

12.35%

90.00% 80.00%

Highland Strategic Holdings Pte. Ltd.

0.75%

• On 25th_{January 2017, PT Toba Sejahtra}(“TS”), the majority shareholder of PT Toba Bara _{Sejahtra Tbk}(“Company”) with 71.79%

divested majority 61.79% share ownership to new shareholder, Highland Strategic Holdings Pte. Ltd. (“HSH”) • HSH is a Singapore-based investment company, mainly focused in the energy sector

• With HSH and TS sharing the same business alignment, HSH is expected to add further value to the future development of the Company 6

*) Incl. Baring Private Equity as anchor investor

90.00%

20-year Production Operation Mining Permit (䇾IUP-OP䇿) expiring in December 2029

2,990 ha

IUP-OP extension was completed in March 2013 (First out of 2 extensions: in 2023, with tenor of 10 years each)

683 ha

13-year IUP-OP expires in December 2023

3,414 ha

Plantation permit of PT Perkebunan Kaltim Utama I (PKU) expires in 2036

IUP-P for downstream processing

8,633 ha (Right to Use Land)

GLP’s PPA with PLN(1) for 25- year contract

~60 ha

MCL’s PPA with PLN(1

for 25- year contract

~30 - 40 ha

Off-take (“take or pay”) by PLN for 25 years Planted Area: 2,701 ha Off-take (“take or pay”)

by PLN for 25 years

Reserve

Reserves: 117 MT - JORC Resources: 156 MT - JORC

Reserve: 22 MT - JORC Resources: 37 MT - JORC

Reserves : 8 MT - JORC Resources: 43 MT - JORC

Strategic Mine Locations

Muara Berau

Muara Jawa Makassar Strait

~55 km (total ~120 km)

Balikpapan Samarinda

~65 km Major

City Jetty

Transhipment Point

TMU –IM Hauling Road

Kutai Energi

TMU

ABN IM

Major city to north is less than 50 km

Adjacent locations for all

3 mines

Close proximity to jetty and transhipment point

of Muara Jawa Distance from pit to jetty, with closest one ~5 km and furthest ~25

km ~5 km

IM jetty

ABN jetty

Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties), giving significant operating leverage vs other concessions in surrounding areas

25 km

TMU

IM

ABN

TMU

Overland & Barge Loading Jetty: Speed

of 1,800 TPH High Built CPP Cap

up to 10 Mn TPA Short Coal Hauling

Distance < 5km

Hauling Road to Connect with ABN

CPP Capacity : 6 Mn

Tons/Annum (TPA) Conveyor to Jetty

Short Coal Hauling Distance ~4km

Infrastructure & Operational Capabilities

Toba’s Concessions

ROM Stockpile

8 Note:PT Adimitra Baratama Nusantara (ABN)

PT Indomining (IM)

PPA signing with PLN for Sulut-3

Power Project

Engineering Procurement Contract (EPC) signing with SEPC* for

Sulbagut-1 Power Project

Contracts and Awards Earned in 1H17

7 April 2 May 7 July 11 July 14 July

Project Financing Signing with Bank Mandiri worth US$ 171.8 mn

for Sulbagut-1 Power Project

Material Information

9 Financing Date with

PLN for Sulbagut-1 Power Project

Special Transaction Loan Facility and Non-Cash Loan of US$ 50 mn

with Bank Mandiri

* Shanghai Electric Power Construction Co. Ltd.

 ABN receivedGold PROPER Enviromental Award from

Provincial Govt for 3 consecutive years

 IMand TMU receivedGreen

PROPER Enviromental Award for 2 consecutive years

 IMreceivedcertificates forISO 14001, OHSAS 18001 and ISO 9001

 ABN received Award from

Customs Officeof East Kalimantan as “Ideal”

Company

 TMU received Pratama Award

10

Performance Highlights

4.1 Mt

2010 2011 2012 2013 2014 2015 2016 2017 est.

Toba Consolidated NEWC Price

30.1% 32.9%

5.7% 13.9% 13.5%

15.4% 15.2% _marginStable EBITDA Margin

Production Profile

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Source: Coal price from GlobalCoal

Amidst coal price volatility over the past several years and to sustain the Company’s survival mode, Toba

Operational Performance

Quarterly Production & SR

Production in Thousand Tons

Production Summary

MT: Million Ton

2Q16 2Q17 Change Comment

Sales Volume

SR (x)

1.7 1.1

13.8 14.3

(35.3)%

10.5%

Sales volume tracked its 2Q17 production volume

SR edged up due to impact from mining operations during prolonged wet weather conditions

1.3 1.2 (17.9)% Production volume in 2Q17 was below guidance due to _{prolonged rainfall during the period}

Production Volume

Production Summary

MT: Million Tons

 Quarterly production volume of 1.2 mn tons in 2Q17 came in below 2017 quarterly guidance of 1.25 -1.50 mn tons

 2Q17 SR rose to 14.3x from 13.7x in 1Q17 due primarily to heavier than expected rainfall, which impacted production

 Production should normalize in subsequent quarters

 2017 guidance for SR is estimated at 12x - 13x in line with mine plan

12 13.8x

12.8x 12.6x 13.7x 14.3x 12.0x - 13.0x

0.0

2Q16 3Q16 4Q16 1Q17 2Q17 Quarterly

Guidance

TMU IM ABN SR (Consolidated)

1.3 1.4 _1.2

1.1

Consolidated Performance

Operational 1H16 1H17 Change

Production Volume 2.8 2.3 -17.9%

Sales Volume 3.1 2.2 -29.0%

Stripping Ratio (SR) 13.1 14.0 6.9%

Sales 139.0 127.9 -8.0%

EBITDA* 22.0 28.4 29.1%

Profit for the Period 9.3 14.6 57.0%

Financial 1H16 1H17 Change

Note: Based on unaudited financial statements

(*) EBITDA = Gross profit –selling expenses –G&A + depreciation and amortization + other non-cash items

45.4

13

NEWC Index 50.9 80.6 58.3%

Average Selling Price (ASP) 57.3 26.2%

Mn ton

FOB Cash Cost US$/ton 34.9 38.8 11.2%

15.8%

EBITDA Margin 22.2%

Gross Profit Margin

Financial Ratios 1H16 1H17

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Sales Volume, NEWC Index & ASP

(million tons and US$/ton)

Sales, Cost of Goods Sold and Gross Profit

Margin (US$ million and %)

EBITDA/ton and EBITDA Margin

(US$/ton and %)

Increase in ASP per ton directly filters to higher

gross profit margin and EBITDA margin

ASP Positively Impacts Margins

3.3

1H15 1H16 1H17

Sales Volume NEWC Index ASP

1H15 1H16 1H17

Sales

Cost of Goods Sold

Gross Profit Margin

1H15 1H16 1H17

Balance Sheet

Consolidated Balance Sheet In Million US$

Net Debt to EBITDA2) In Million US$

 Total assets and total liabilities rose similarly due to rise in interest bearing debt from Bank Mandiri’s US$ 50 mn loan facility. This was for refinancing syndicated loan, investment, and corporate purposes where US$ 40 mn of proceeds was used by June 2017

 Total equity value improved due to current earnings over the period

 Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at < 0.5x

Note:

(1) Interest Bearing Debt: Bank loans + Financing lease

(2) EBITDA : Based on last 12 months 15

276.3

Total Assets 261.6 5.6%

Interest Bearing Debt1) 51.3 61.3 19.5%

Total Liabilities 113.8 120.8 6.1%

Shareholders Equity 147.7 154.8 5.2%

Balance Sheet Dec’ 16 Jun’ 17 Change

Capital Expenditure

CAPEX Realization until June 2017

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Realized CAPEX as of 1H17 :

US$ 5.3 mn in mining-related

activity and power project from

2017 target : US$ 60

–

65 mn (inc.

Investment in power project)

Advance for purchase of fixed

asset 75%

Exploration and land acquisition

15%

Vehicles 4%

Machinery and heavy equipment

3% Conveyor

2%

96%

Traders End-users

30

2014 2015 2016 1H17

NEWC ASP HBA

Rise in 1H17 ASP vs full year 2016 ASP > rise in NEWC over same period due to better contracted prices mainly secured in 2H16

ASP Performance vs Benchmark

17 US$/ton

 In 2014-2015, spread between NEWC and ASP narrowed due to optimizing marketing initiative at mainly

fixed price to premium customers in Japan, Korea, Taiwan, and Malaysia

 Majority of 2016 sales volume was fixed at price during 1H16 period. Sudden coal price surge in 2H16

Diversified Export Market Base

1H15 1H16 1H17

China Korea Thailand Taiwan Japan

30.8% Hong Kong Bangladesh Others

Million tons

Export Market Focus 1H15 - 1H17

1H17 Export Market - More ASEAN Driven

 Given China’s economic situation in 2015, focus shifted towards export markets whose economies showed

stable demand prospects ie. Korea, Japan, Taiwan, India, and at later stages ASEAN ie. Thailand, Malaysia, and Vietnam (showing positive traction)

 Diversification towards countries ex.China remained a highlight for 2016

 In 1H17 and going forward, ASEAN markets will play more important role in sourcing coal from its proximate

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 In 1H15 and 1H16, sales constribution consistently derived from mainly 5600 GAR products

 Rescheduling of partial sales delivery of 5600 GAR products to 2H17 period has contributed to decline in the 5600 GAR in 1H17 product composition as compared to previous periods

Product Composition (GAR) by % - 1H17

Product Composition (GAR) : 1H15 - 1H17

Product Composition by Quality

24.8%

4800 & 5000

5600 HS

5200

5600 RS

5800

5900 LS

Others

Million Tons

32% 36%

1H15 1H16 1H17

Snapshot of 2017F

Operation

Prod Vol (mn ton)

SR (x) 12x - 13x

5 - 6

2015

12.3x 6.1

NEWC Coal Price (US$/ton) 59.2 66.1

Mine Plan Execution

2017 production and SR are targeted similar to those in 2016 of 5 - 6 million tons and 12x - 13x respectively

Marketing Strategy

The Company continues managing well-diversified market destinations and customer base, maintaining product quality and timely delivery, as well as optimizing the current favorable coal price into theCompany’sASP

Capital Expenditure

Total CAPEX for 2017 is estimated at US$ 60 - 65 million, of which 85% - 90% will be allocated for EPC phase of the power project (Sulbagut-1), with the balance for the mining business, i.e. land acquisition, and infrastructure/heavy equipment

Sourcing of Other Power Projects

In translating the Company’s vision, the Company will continuously seek for opportunities in sourcing new power projects (fossil fuel and non fossil fuel based such as renewables)

through participation in IPP tenders as well as through acquisition of existing power assets 20

12x - 13x 5 - 6

2017 F

65 - 70

2016

Building, Infra, Heavy Equip

~5%

21

Performance Highlights

_{Performance Highlights}

2

Strategy to Venture into Power

Business Growth and Sustainabiity

Transformation

• Acquisition of mine(s) around existing mining concessions

• Acquisition of mine(s) to support coal-related power projects

• Active participation as IPP* in PLN tenders • Assessment of

developing renewables • Identification of

strategic partner with vast track record • Expansion of power

project capacity (MW) Coal Mine

• Optimization of existing mine plan • Optimization of infrastructure sharing • Cost management

• Diversification of markets and customer base

• Active participation in CSR

Company Strategy

Integrated

Energy

Company

Fossil Fuel and

Renewables Power

Present

Future

Company Initiatives

Coal

Mining

Company

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Why Toba Can Realize this Goal?

 Extensive experience in executing project from greenfield to brownfield in coal mining, CFPP and gas-fired power plant development and operation  Sulbagut-1 CFPP project (2x50 MW) – Financial close was reached on 14

July 2017, the first reached on schedule this year by any IPP. Expected COD in mid 2020

 Second 2x50 MW Sulut-3 CFPP project was signed on 7 April 2017 with expected COD in 2020

 Our partners for the projects are well established and vastly experienced

in construction and operation of power plants in many countries

 Having strong partners enable us to de-risk the construction phase of the projects

Substantial

Power-Related

Milestones

Have Been

Achieved

Experienced

Partners with

Proven Track

Record

 Currently, Toba Sejahtra (Toba’s Shareholder) has one operating power plant asset: 2 x 41 MW Senipah Gas Power Plant, COD in 1Q-2015; and previously 2 x 15 MW Palu CFPP; reached COD in 2007 (already divested in 4Q16)

 Possessing vast learning curve of knowing what to and not to do in planning to execution of project management. This enables Toba to

mitigate and minimize project risk

Leveraging

Toba Sejahtra

Group’s

Toba Participation Process in IPP Tenders

IPP Tender Participation 2014-2015

• Toba has actively participated in PLN tenders including 6 IPP bidding projects initiated in 2014-2015. For

gas-fired projects, Toba decided not to continue with the bidding process due to IRR calculation

• Going forward, Toba is targeting non-coal projects, including gas and renewables-based projects

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Project Name Company Name Capacity

Toba

Stake (%) Status

Sulbagut -1 PT Gorontalo Listrik Perdana 2 x 50 80% Signed PPA in July 2016

Sulut-3 PT Minahasa Cahaya Lestari 2 x 50 90% Signed PPA in April 2017

Gas-fired Power Plant 1 x 500 5% Refrained from bidding process

Gas-fired Power Plant 1 x 250 5% Refrained from bidding process

Gas-fired Power Plant 1 x 100 24% Refrained from bidding process

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Our Project Selection Process

Targeting return of equity IRR and Project IRR

Ability to identify, assess, and manage completion risk, technical and non-technical risk such as social assessment for land acquisition to ensure the project can be completed within specified time schedule

Financial capability to participate in targeted tender projects where PLN sets specific requirements to meet

Majority control for certain size of IPP projects

Appetite to have minority portion with good and credible partner in larger size projects

• Credible partner with vast experience and proven technology

• Can bring long-term value-add to organization and local people including transfer knowledge

• Have good networking capability with PLN and power stakeholders

Parameters for Project Selection

Leveraging Toba Sejahtra

Group’s

Experience in Power Plant Development

Sumatra

Kalimantan

Java

Sulawesi

Malaysia

East Kalimantan

Senipah Power Plant

Central Sulawesi

Palu Power Plant

PLTG Senipah 2 x 41 MW

PJPP *) 2x15 + 2x18 MW

 In operation, COD in Q1 2015

 Combined Cycle System is under PPA finalization for additional 35 MW

 Total potential supply: 115 MW

 In operation, COD in 2007

 Expansion 2x18 MW is COD 2016

 Total potential supply: 66 MW

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SULBAGUT-1 2 x 50 MW

Financial Close: 14 July 2017, the first reached on schedule

this year by any IPP

NEW PROJECTS (Expected COD in 2020)

* Dviested to private buyer in 4Q 2016

SULUT-3 2 x 50 MW

PPA in place, in process for Commencement of

Sulbagut-1 Project

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General Description of Sulbagut-1 Project

Project

Location :

North

Gorontalo

Regency,

Sulawesi

Sulbagut-1 Coal-Fired Power Project is part of 35

G

W Program

• 2 x 50 MW

Capacity

(Nett)

• Build-Own-Operate-Transfer

(BOOT)

Contract

Scheme

• 25 Years

Contract

Period

29

Financial Close of Sulbagut-1 Project

Principle License

Land Acquisition Tariff Approval

EPC Contract

Financing Agreement

30

2017

2020

Site Preparation

2018

2019

Construction

Next after Financial Close...

Sulut-3 Project

32

Project

Location :

North

Minahasa

Regency,

Sulawesi

Sulut-3 Coal-Fired Power Project is part of 35

G

W Program

• 2 x 50 MW

Net

Capacity

• Build-Own-Operate-Transfer

(BOOT)

Contract

Scheme

• 25 Years

Contract

Period

• 33 months post Commencement

of Work

COD

Target

• US$ 205-215 million

Project

Value

33

Signing of PPA for Sulut-3 Project

Handing of Token of Appreciation to PLN, 7 April 2017