Buy Dec 2017 TP (IDR) 51,875 Consensus Price (IDR) 44,455 TP to Consensus Price +16.7% vs. Last Price +18.8%

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Please see the last page for rating criteria & important disclaimer

Company Update Q4 16 | Mar 30, 2017

Merek Terbaik di Indonesia

Buy

Dec 2017 TP (IDR)

51,875

Consensus Price (IDR)

44,455

TP to Consensus Price

+16.7%

vs. Last Price

+18.8%

Shares data

Last Price (IDR)

43,650

Price date as of

Mar 29, 2017

52 wk range (Hi/Lo)

47,800/37,825

Free float (%)

15.0 Outstanding sh.(mn)

7,630

Market Cap (IDR bn)

333,050

Market Cap (USD mn)

25,009

Avg. Trd Vol - 3M (mn)

1.57 Avg. Trd Val - 3M (bn)

63.34 Foreign Ownership

4.6%

Consumer Staples

Household & Personal Products

Bloomberg

UNVR IJ

Reuters

UNVR.JK

Joni Wintarja

+62 21 797 6202, ext:138

Joni.wintarja@nhsec.co.id

Unilever Indonesia, Tbk | Summary (IDR bn)

2015/12A

2016/12A

2017/12E

2018/12E

Sales

36,484

40,054

44,149 48,765

Sales growth

5.7%

9.8%

10.2%

10.5%

EBITDA

8,431

9,249

10,087 11,143

Net profit

5,852

6,391

6,986 7,670

EPS (IDR)

767

838 916 1,005

EPS growth

-1.3%

9.2%

9.3%

9.8%

BVPS (IDR)

633

617 695 784

EBITDA margin

23.1%

22.8%

22.9%

NPM

16.0%

15.8%

15.7%

ROE

122.2%

134.1%

139.7%

135.9%

ROA

39.0%

39.4%

39.7%

39.4%

ROIC

94.6%

95.2%

92.2%

86.1%

P/E

48.2x

46.3x

47.7x

43.4x

P/BV

58.5x

62.9x

62.8x

55.7x

EV/EBITDA

33.6x

32.2x

33.3x

30.2x

DPS (IDR)

758

799 838 916

Dividend yield

2.0%

2.1%

1.9%

2.1%

Source: Company Data, Bloomberg, NHKS Research

Share Price Performance

YTD

1M

3M

12M

Abs. Ret. 12.4% 3.5%

9.1%

1.6%

Rel. Ret.

6.4% -0.3%

3.7%

-15.4%

Peningkatan Pengeluaran Konsumen

2016 menjadi tahun yang menggembirakan untuk UNVR. Tercatat total

penjualan meningkat 9,8% dibandingkan penjualan pada 2015. Penjualan

pada divisi Home and Personal Care (HPC) meningkat 9% dan penjualan

pada divisi Food and Refreshment (FR) meningkat 11,7%.

Perbaikan pertumbuhan ini paling signifikan dicetak oleh divisi (HPC). Pada

2015, divisi ini hanya mencatatkan pertumbuhan 3,2%. Sepanjang 2016,

peningkatan pengeluaran konsumen mempengaruhi daya beli dan minat

terhadap produk UNVR.

Menjaga Citra Merek

Kami memperkirakan penjualan UNVR akan tumbuh 10,2% pada 2017.

Untuk menjaga pertumbuhan menerus, kuncinya terdapat pada inovasi

produk serta target iklan yang solid. UNVR terus memanfaatkan berbagai

kanal iklan baik melalui jalur konvensional seperti televisi maupun jalur

teknologi terbaru seperti media sosial.

Target Harga Rp51.875

Kami menggunakan estimasi forward P/E sebesar 51,6x yang merupakan

+1SD dari rata-rata selama 2 tahun sebagai basis metode valuasi untuk

memperoleh target harga Desember 2017. Target harga ini berimplikasi P/E

2017E 56,6x. Saat ini, UNVR diperdagangkan secara diskon pada P/E 2017E

47,7x.

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Performance Highlights

Source: Company, NHKS research

Revenue Breakdown | FY 2013 - FY 2017E

Produk Terkenal di Dua Divisi

Pendapatan UNVR dibagi menjadi 2 divisi, yakni divisi HPC serta divisi FR. HPC

berkontribusi 70% terhadap total penjualan, sedangkan divisi FR

berkontribusi 30% terhadap total penjualan.

UNVR memiliki produk HPC yang terkenal, seperti Rinso, Sunlight, Superpell,

Domestos, dan Wipol, sabun Dove dan Lux, shampoo Sunsilk, Zwistal,

Lifebuoy, Clear dan pasta gigi Closeup. Sementara itu, untuk produk FR,

UNVR memiliki 7 merek terkenal, seperti Blueband, Liptop, Royco, Wall’s,

Bango, Buavita, dan Sariwangi.

UNVR memiliki banyak merek terkenal

yang menjadi produk konsumsi harian

oleh masyarakat Indonesia.

Source: Company, NHKS research

HPC Revenue and GPM | FY 2013 - FY 2017E

Bergantung pada CPO

Divisi HPC memiliki margin kotor yang lebih tinggi dibandingkan dengan divisi

FR. Sejak 2015, terdapat peningkatan margin kotor dari divisi HPC.

Peningkatan ini didukung oleh harga CPO yang cenderung turun. Divisi HPC

memiliki kaitan yang erat dengan harga bahan baku produk turunan sawit

seperti Palm Kernel, yang disebut Oleochemical.

Source: Company, NHKS research

FR Revenue and GPM | FY 2013 - FY 2017E

Margin kotor divisi HPC terkait erat

dengan harga CPO.

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Source: Company, NHKS research

HPC vs Indonesia GDP Growth | FY 2013 - FY 2017E

Source: Company, NHKS research

Revenue and Net Profit Growth | FY 2013 - FY 2017E

Kinerja Terkait Pertumbuhan PDB

Secara umum kinerja UNVR sangat merefleksikan kondisi fundamental

Indonesia. Secara historis, pertumbuhan pendapatan UNVR sangat terkait

erat dengan pertumbuhan ekonomi Indonesia.

Keterkaitan ini disebabkan oleh sekitar 55% PDB Indonesia yang berasal

dari konsumsi domestik. Dari konsumsi domestik tersebut, sebagian besar

pengeluaran penduduk masih dibelanjakan untuk kebutuhan pokok

sandang dan pangan. UNVR memiliki citra merek yang sangat kuat untuk

produk HPC dan FR yang bekualitas.

K i n e r j a

U N V R

m e r e f l e k s i k a n

pertumbuhan konsumsi domestik di

Indonesia.

Source: Company, NHKS research

Dividend Payout Ratio | FY 2013 - FY 2017E

Dividen yang Konsisten

Dengan ratio keuangan yang kuat, UNVR merupakan salah satu emiten di

Bursa Efek Indonesia yang mampu untuk secara konsisten membagikan

dividen sekitar 100% dari laba bersih setiap tahunnya. Rasio keuangan

yang kuat menjadikan UNVR pilihan saham yang baik untuk investor yang

mencari dividen rutin yang maksimal.

Dividen Payout Ratio tetap konsisten

di sekitar 100%.

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Multiple Valuation

Forward P/E band | Last 2 years

Source: NHKS research

Dynamic Forward P/E band | Last 2 years

Source: NHKS research

Rating and target price update

Target Price Revision

Date

Rating

Target Price

Last Price

Consensus

vs Last Price

vs Consensus

01/06/2017

Buy

47,900 (Dec 2017)

40,550

43,835

+18.1%

+9.3%

3/30/2017

Buy

51,875 (Dec 2017)

43,650

44,455

+18.8%

+16.7%

Source: NHKS research, Bloomberg

Closing and Target Price

Source: NHKS research

Analyst Coverage Rating

Source: Bloomberg

NH Korindo Sekuritas Indonesia (NHKS) stock ratings

Period: End of year target price

Rating system: Based on a stock’s absolute return from the date of publication

Strong Buy: high conviction Buy rated stocks

Buy: greater than 15%

Hold: between -15% and +15%

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Financial Summary

DISCLAIMER

This report and any electronic access hereto are restricted and intended only for the clients and related entity of PT NH Korindo Sekuritas Indonesia. This report is only for information and recipient use. It is not reproduced, copied, or made available for others. Under no circumstances is it considered as a selling offer or solicitation of securities buying. Any recommendation contained herein may not suitable for all investors. Although the information here is obtained from reliable sources, it accuracy and completeness cannot be guaranteed. PT NH Korindo Sekuritas Indonesia, its affiliated companies, respective employees, and agents disclaim any responsibility and liability for claims, proceedings, action, losses, expenses, damages, or costs filed against or suffered by any person as a result of acting pursuant to the contents hereof. Neither is PT NH Korindo Sekuritas Indonesia, its affiliated companies, employees, nor agents liable for errors, omissions, misstatements, negligence, inaccuracy arising herefrom.

UNVR Summary

Last Price (IDR) 43,650

Target Price (IDR) 51,875 2015/12A 2016/12A 2017/12E 2018/12E

Rating: Buy ROE 122.2% 134.1% 139.7% 135.9%

ROA 39.0% 39.4% 39.7% 39.4% ROIC 94.6% 95.2% 92.2% 86.1% EBITDA/Equi ty 176.1% 194.1% 201.7% 197.5%

in IDR Bn 2015/12A 2016/12A 2017/12E 2018/12E EBITDA/As s ets 39.0% 39.4% 39.7% 39.4%

Sales 36,484 40,054 44,149 48,765 Ca s h Di vi dend IDR bn) 5,784 6,096 6,391 6,986

Growth (% y/y) 5.7% 9.8% 10.2% 10.5% Di vi dend Yi el d (%) 2.0% 2.1% 1.9% 2.1%

Cost of Revenue (17,835) (19,595) (21,628) (23,911) Pa yout Ra ti o (%) 97.6% 104.2% 100.0% 100.0%

Gross Profit 18,649 20,459 22,521 24,854 DER 35.2% 50.9% 58.0% 65.0%

Gross Margin 51.1% 51.1% 51.0% 51.0% Net Gea ri ng 36.0% 51.9% 59.1% 66.1%

Opera ti ng Expens es (10,722) (11,761) (12,969) (14,322) LT Debt to Equi ty 0.0% 0.0% 0.0% 0.0%

EBIT 7,927 8,698 9,552 10,532 Ca pi ta l i za ti on Ra ti o 26.0% 33.7% 36.7% 39.4%

EBIT Margin 21.7% 21.7% 21.6% 21.6% Equi ty Ra ti o 30.7% 28.1% 28.7% 29.3%

Depreci a ti on 505 551 535 611 Debt Ra ti o 10.8% 14.3% 16.7% 19.0%

EBITDA 8,431 9,249 10,087 11,143 Fi na nci a l Levera ge 298.3% 330.1% 334.8% 327.1%

EBITDA Margin 23.1% 23.1% 22.8% 22.9% Current Ra ti o 65.4% 60.6% 58.8% 58.0%

Interes t Expens es (121) (160) (226) (290) Qui ck Ra ti o 38.2% 37.5% 37.9% 39.0%

EBT 7,829 8,571 9,359 10,280 Ca s h Ra ti o 6.2% 3.4% 2.9% 2.9% Income Ta x (121) (160) (226) (290) Cash Conversion Cycle (18.9) (13.7) (7.8) (4.3) Mi nori ty Interes t - - - - Pa r Va l ue (IDR) 10 10 10 10

Net Profit 5,852 6,391 6,986 7,670 Tota l Sha res (mn) 7,630 7,630 7,630 7,630

Growth (% y/y) -1.3% 9.2% 9.3% 9.8% Sha re Pri ce (IDR) 37,000 38,800 43,650 43,650

Net Profit Margin 16.0% 16.0% 15.8% 15.7% Ma rket Ca p (IDR tn) 282.3 296.0 333.0 333.0

In IDR bn 2015/12A 2016/12A 2017/12E 2018/12E 2015/12A 2016/12A 2017/12E 2018/12E

Ca s h 628 374 351 382 Pri ce /Ea rni ngs 48.2x 46.3x 47.7x 43.4x Recei va bl es 3,245 3,708 4,197 4,809 Pri ce /Book Va l ue 58.5x 62.9x 62.8x 55.7x Inventori es 2,298 2,318 2,311 2,339 Pri ce/Sa l es 7.7x 7.4x 7.5x 6.8x

Total Current Assets 6,623 6,588 7,047 7,718 PE/EPS Growth -38.2x 5.0x 5.1x 4.4x

Net Fi xed As s ets 8,321 9,529 10,748 12,075 EV/EBITDA 33.6x 32.2x 33.3x 30.2x Other Non Current As s ets 786 628 657 656 EV/EBIT 35.8x 34.3x 35.2x 32.0x

Total Assets 15,730 16,746 18,452 20,449 EV (IDR bn) 283,392 298,063 335,772 336,557

Pa ya bl es 4,842 4,642 4,785 4,851 Sa l es CAGR (3-Yr) 10.1% 9.2% 8.6% 10.2% ST Ba nk Loa n 1,700 2,393 3,074 3,889 EPS CAGR (3-Yr) 6.5% 6.1% 5.6% 9.4%

Other Current Liab. 3,585 3,843 4,130 4,562 Ba s i c EPS (IDR) 767 838 916 1,005 LT Debt - - - - Di l uted EPS (IDR) 767 838 916 1,005 Other Non Current Li a b. 775 1,163 1,163 1,163 BVPS (IDR) 633 617 695 784

Total Liabilities 10,903 12,041 13,152 14,465 Sa l es PS (IDR) 4,782 5,250 5,786 6,391

Shareholders' Equity 4,827 4,704 5,300 5,983 DPS (IDR) 758 799 838 916

In IDR bn 2015/12A 2016/12A 2017/12E 2018/12E 2015/12A 2016/12A 2017/12E 2018/12E

Net Income 5,852 6,391 6,986 7,670 DCF (IDR bn)

Deprec & Amorti za ti on 505 551 535 611 NOPAT 5,925 6,485 7,130 7,857 Chg. In Worki ng Ca pi ta l (57) (257) (51) (143) +Depr./Amor. 505 551 535 611

CFO 6,299 6,684 7,470 8,138 -CAPEX (1,472) (1,788) (1,754) (1,938) Ca pex (1,472) (1,788) (1,754) (1,938) -Incr. (Decr.) i n Worki ng Ca p. (57) (257) (51) (143)

CFI (1,429) (1,779) (1,783) (1,936) (Unl evered) FCFF 4,899 4,991 5,860 6,388 Di vi dends Pa i d (5,592) (5,843) (6,391) (6,986) WACC

Net Borrowi ng (PMT) 450 693 681 815 Cos t of Debt (Ta x Adj.) 9.5% 8.1% 7.3% 7.2%

CFF (5,101) (5,159) (5,710) (6,171) Cos t of Equi ty (COE) 10.4% 9.8% 12.7% 12.7%

Net Changes in Cash (231) (254) (23) 31 WACC (%) 10.4% 9.8% 12.7% 12.6%

RIM

Sprea d (FROE-COE) (%) 112.9% 122.6% 135.8% 132.0% Res i dua l Income (IDR bn) 5,358 5,919 6,388 6,996

By Geography % Shareholders % Equi ty Cha rge (IDR bn) 494 471 598 674

Indones i a 95.4 Uni l ever Ind. Hol di ng 85.0 EVA

Uni ted Sta tes 1.9 Schroder Inves tment 0.7 Inves ted Ca pi ta l (IDR bn) 5,997 6,527 7,097 8,374 Luxembourg 0.8 Bl a ckrock 0.6 ROIC-WACC (%) 88.4% 89.6% 87.8% 81.2% Bri ta i n 0.7 Aberdeen 0.6 EVA (IDR bn) 5,301 5,849 6,232 6,798