Analyst Briefing FY16 Performance Results Jakarta, 27 February 2017 - PowerPoint PPT Presentation

Analyst Briefing FY16 Performance Results Jakarta, 27 February 2017 DISCLAIMER: The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by PT Indo Tambangraya Megah Tbk (ITMG). Nothing in this release should be construed as either an offer to buy or sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2

Highlights of 4Q16 and FY16 results Coal sales Coal sales 26.7 Mt 6.7 Mt Down 1.5 Mt Down 0.3 Mt -5% Y-Y -4% Q-Q Unit: US$ million 3Q16 4Q16 Q-Q FY15 FY16 y-y 1,589 1,367 349 409 +17% -14% T otal Revenue 22% 24% 22% 34% +12% +2% Gross Profit Margin 194 209 47 104 +122% +8% EBIT 60 131 +119% 258 272 +6% EBITDA 33 61 +85% 63 131 +107% Net Income $49.9 $59.8 +20% $56.4 $51.0 -10% ASP (USD/ton) 3

2016 in Review SIGN OF COST $272M EBITDA CORP.GOVERNANCE RECOVERY $131M NET PROFIT AWARDS CUTTING Supply constraints Obtained good Achieved from Step Improvement in corporate governance pushed price in 4Q16 to Change Productivity EBITDA and bottom the highest since 2013 awards from several and cost rationalization line profits leading institutions program SUCCESSFUL 25.6 Mt SLIGHTLY LOWER CSR SHARE BUYBACK PRODUCTION ASP Obtained award 25.6 Mt of production ASP dropped by 10% from NCSR for 67% share price despite heavy rainfall from US$56.4/t in 2015 Sustainability Report increased, supported to US$50.6/t in 2016 and mine closure in mining and metal by share buyback scheme 4

Awards and achievements in 2016 The T op 10 of T op 1st Runner-up for 50 Indonesian 3rd Best GCG for Best Indonesian Best CG for non- Best Sustainability Companies with Indonesian Public Listed Companies finance category Report in Mining Best CG Companies and Metal Performance From Anugerah From Indonesian From Indonesian From Economic From National Perusahaan Tbk Institute for Institute for Review magazine in Center for Indonesia (APTI), Corporate Corporate Sustainability cooperation with Economic Review Directorship (IICD) Directorship (IICD) IPMI Business reporting (NCSR) Magazine in School and Indonesia cooperation with Asia Institute IPMI Business School 5

2017 and beyond OPERATIONAL IMPROVEMENT Improvement of coal hauling road  PRODUCTIVITY  Optimize truck size and cycle time improvement IMPROVEMENT  Optimize barging cycle time  Expansion of port stockyard at Bontang Coal Terminal BUSINESS PROCESS ENHANCEMENT Manage procurement activity to be more efficient  PROCESS Business Process improvement and automation  ENHANCEMENT  Promote innovation and people development CAPTURE MARGINS ACROSS THE COAL VALUE CHAIN  Contractor management and more usage of internal ADDITIONAL contractors MARGINS ACROSS THE  3rd party coal trading VALUE CHAIN  Leverage ITM’s capability and infrastructure to synergize with nearby concessions  Improvement in fuel procurement and logistics CORE EXPAND CORE BUSINESS BUSINESS  Expand in-house mining contractor EXPANSION  Investment in power business – capture opportunities from growing domestic electricity demand 6

Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 7

2016 operational review Indominco • Production cost down by 29% in 2016 due to cost reduction program • Logistic cost at BoCT reduce by 15% in 2016 TD. MAYANG • Rationalized capex spending by 57% in 2016 INDOMINCO TRUBAINDO BONTANG Trubaindo - Bharinto EMBALUT • Trubaindo: Logistic cost reduce by 24% in 2016 BHARINTO • Bharinto: Production cost reduce by 13% in 2016 • Rationalized capex spending by 63% in 2016 • Trubaindo achieved Blue Level for environmental management from Ministry of Environment and Forestry of Indonesia • Bharinto achieved Zero Accident Award from Ministry of JORONG Manpower of Indonesia MINE SITE Embalut - Jorong COAL TERMINAL • Optimized mining reserves at Embalut mine • Submitted mine closure plan to government at Jorong mine 8

Operational summary 2016-2017 2016 OUTPUT : 25.6 Mt 2017 TARGET : 25.5 Mt COMMENTS  Similar production target compared to 2016 East volume Kalimantan  1Q17 production target lower YoY given lower 15.5 15.3 inventory at the end of 2016 INDOMINCO  Higher optimized stripping ratios in 2017 as a 5.8 5.2 result of coal price improvement Bunyut Port 2016 2017e TD.MAYANG TRUBAINDO 1Q17 strip ratio likely to be higher than average  2016 2017e FY2017 target. BHARINTO Samarinda 2.6 2.7 KITADIN EMBALUT 2016 2017e Balikpapan QUARTERLY OUTPUT TREND 0.8 1.1 Central 2016 2017e Unit: Mt Kalimantan 6.6 6.5 6.2 6.3 Palangkaraya 5.3 South Kalimantan Bharinto Jorong Kitadin Trubaindo Banjarmasin JORONG 1.0 1.2 2016 2017e Indominco Jorong Port 1Q16 2Q16 3Q16 4Q16 1Q17e 1Q16 2Q16 3Q16 4Q16 1Q17e 9

Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2017 target: 15.3 Mt  4Q16 production output was lower than target due Operations to heavy rainfalls affecting mine production. Ports Hauling Total average strip ratio in 2017 is expected to be  higher than 2016 due to optimized coal reserved. Stockpile West Block ROM Crusher Mine stockpile stockyard QUARTERLY OUTPUT East Block Unit: Mt 4.0 3.9 3.8 3.7 Bontang City 3.2 W BLOCK 0.5 0.4 3.2 0.4 0.8 35Km 0.3 0.4 Sea conveyor 2.5Km 3.5 3.4 3.3 Asphalt haul 3.1 2.9 E BLOCK 2.8 road Post Santan River 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e Panamax Port stock Unit: Bcm/t yard 95,000 Avg 8.8 9.1 8.5 8.9 10.9 6.9 Inland DWT SR: conveyor 4km 23.1 20.7 W BLOCK 17.7 13.8 13.4 11.1 8.3 9.3 E BLOCK 7.8 7.3 7.1 6.3 km 0 2 4 6 8 10 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e *SR based on FC coal **SR FY16 IMM: 8.3 , WB: 14.1 , EB: 7.4 10

Melak group – Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2017 target: TCM 5.2 Mt  Trubaindo: Mahakam BEK 2.7 Mt  4Q16 production achieved as according to target. River  Hauling road improvement from South Block Bunyut Port Trubaindo to Bunyut port to accommodate for larger truck aims to reduce cost and improve efficiency. Product coal conveyor, East Kalimantan Expected to be completed by 4Q17. stacking, stockpile  Bharinto: 40km  4Q16 production achieved according to target. Mine to port Operations QUARTERLY OUTPUT Barge Port Kedangpahu Hauling River Unit: Mt 2.6 2.5 PT. Trubaindo 2.2 Stockpile 2.0 0.9 1.7 0.8 1.7 BHARINTO 0.6 0.6 0.5 ROM 0.7 stockpile 1.7 1.7 1.6 North 1.4 TRUBAINDO 1.2 1.0 Block Bharinto 60km 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e south west of Unit: Bcm/t Trubaindo North South Block 1 Avg SR: Block (Dayak Besar) 6.9 6.8 5.7 6.4 5.5 BHARINTO 3.6 South Block 2 11.0 (Biangan) 9.5 8.4 8.0 8.3 TRUBAINDO 7.8 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e 0 5 10 15 20 25 km PT. Bharinto **SR FY16 TCM: 8.6 , BEK: 6.1 *SR based on FC coal 11

Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES  Kitadin Embalut: 2017 target: EMB 1.0 Mt  4Q16 production output was lower than target due to bad weather. TD. Mayang  Following the increase in production volume, strip Bontang ratio will gradually go down. city IMM WB IMM EB  Kitadin Tandung Mayang:  Continue mine closure activities including mine ROM Bontang Port stockpile rehabilitation. Embalut QUARTERLY OUTPUT 5km Mine to port Embalut Port Unit: Mt 0.8 Mahakam TDM Samarinda River 0.5 to Muara 0.3 0.3 0.2 Berau 0.1 0.1 EMB 0.3 0.3 0.3 0.2 0.1 0.1 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e East Kalimantan Unit: Bcm/t to Muara Jawa Avg SR: 20.0 Operations 13.1 Balikpapan EMB 13.2 12.9 Ports 12.6 7.9 Hauling Stockpile 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e 0 2 4 6 8 10 km Crusher *SR based on FC coal **SR FY16 EMB: 11.3 12

Jorong SCHEMATIC QUARTERLY UPDATES 4Q16 production achieved as according to target. 2017 target: 1.2 Mt  Mine closure plan already submitted and being  reviewed by government for approval. Remaining mine reserves will be depleted by 2018.  Pelaihari QUARTERLY OUTPUT Unit: Mt Haul road 0.3 0.3 0.3 0.2 0.2 0.2 20km 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e Unit: Bcm/t Avg SR: Jorong 6.4 5.1 5.0 4.6 4.3 3.9 Coal Operations terminal Java Sea 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17e Barge Port Hauling *SR based on FC coal ***SR FY16 JBG: 4.5 Stockpile 0 5 10 15 20 25 km 13

Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 14