Everyone, thank you for taking the time to participate in today's call. We appreciate your continued interest in Avian and welcome you to our Q2 2026 Earnings Call. First, we apologize for the delayed publication of our Q2 2026 results. The additional time was required to conduct a limited review of the financial statements in preparation for potential corporate actions. The company has confirmed its participation in the bidding process for AkzoNobel, with a particular focus on its Indonesian business. Should there be any material developments requiring disclosure, we will communicate them to the market in accordance with the applicable laws and regulations. For your information, we uploaded the presentation materials to our website yesterday. Please note that all comparisons are to the same period of 2025, unless otherwise stated. The plan for today is to start with a quick presentation, followed by a one-hour Q&A session.
If you have any questions during the presentation, please use the Q&A chat box and we will answer them during the Q&A session. For those who cannot join us now, the webcast of this event will be uploaded to our website not later than tomorrow. Thank you again for being here today. Allow me to start by introducing myself. My name is Andreas Timothy Hadikrisno. I am the Head of Investor Relations at Avian Brands and will be moderating the earnings call today. We are joined today by three other presenters, starting with Mr. Ruslan Tanoko, the Vice President Director of our company, followed by Mr. Robert Tanoko, the Operations and Development Director, and finally, Mr. Kurnia Hadi, the Finance Director. Avian Brands recorded a total revenue of $126 million, delivering a consolidated gross margin of 45.9%, an EBITDA margin of 27.2%, and a net profit margin of 19.5%.
These results reflect the resilience of our unique business model and the disciplined execution of our strategy despite a challenging operating environment. Avian Brands continue to gain market share while ensuring the growth and sustainability remain balanced priorities. Our ultimate objective is to create long-term value for all stakeholders through sustainable and profitable growth. This page summarizes Avian Brands Q2 2026 performance compared to the same period last year. The company delivered double-digit growth in a quarter marked by heightened global uncertainty and persistent demand softness across most end markets. Our growth investments continue to yield tangible results with strong double-digit sales recorded in both the Architectural Solutions and Trading Goods segments. However, raw material price volatility and movements in the U.S. dollar against Indonesian rupiah exchange rate remain key challenges for the industry. To offset these pressures, Avian Brands implemented two price increases during the quarter.
The first price increase was implemented in April 2026, ranging from 7%-10%, followed by an additional increase of around 5%-8% in May across the Wall Paint, Wood & Iron Paint, Waterproofing, and Wood Care products. During Q2, Avian Brands strengthened our product portfolio by introducing two new products as presented in this slide. These launches demonstrate our continued commitment to innovation and our ability to address evolving customer needs. With the support of our extensive distribution network and integrated sales systems, we are able to bring new products to market more effectively and accelerate penetration across key segments. Product innovation continues to be a core driver in our growth strategy.
Through these launches, Avian Brands aim to capture opportunities in high-potential segments, strengthen its market position, and offer customers a more complete range of solutions across different application and price points. Avian Brands further strengthened its distribution network with the opening of one wholly-owned distribution center during the quarter. This expansion reinforces our logistics infrastructure and supports faster, more reliable product delivery across our nationwide network. Our distribution capability remains an important differentiator for Avian Brands, enabling us to maintain strong service levels while supporting deeper market penetration. Beyond this, our distribution network also acts as a defensive mode against intensifying competition and ongoing market challenges. By maintaining strong control over our logistics and customer reach, we are better positioned to accelerate market share gains and respond quickly to changing demand condition. Despite ongoing market headwinds, Avian Brands maintains strong growth momentum.
During the quarter, total sales rose by 19.7%, reaching IDR 2.2 trillion . This brought consolidated sales for the first half to IDR 4.59 trillion , representing growth of 18.2%. Customer engagement continued to expand, with transactions recorded across more than 57,700 retail outlets, marking an increase of over 1,600 customers. Against a softer market demand and ongoing industry challenges, Avian Brands remains focused on being a reliable partner by ensuring product availability, consistent service quality, and relevant solutions across price segments. This customer-centric approach continues to strengthen our competitive position and support sustainable growth in the long term. I will now pass to Pak Hadi to continue the presentation.
Yeah, thank you, Andreas, and good afternoon, everyone. The sales mix shown on this slide reflect the strength of Avian Brands' business model. Architectural Solutions continued to be the main pillar of our revenue, contributing 79% of total sales. Within the segment, the Wall Paint, Wood & Iron Paint, and Waterproofing categories remained the strongest performers. It's recording robust double-digit growth during the quarter. Traditional retail outlet remained the largest customer group, accounting for 92.2% of total revenue. This figure underlines the strength of our retailer network and our deep penetration in the traditional building material channel. Meanwhile, our wholly-owned distribution center accounted for around 90.8% of total revenue, reinforcing their role as the primary channel supporting our nationwide sales execution, service, reliability, and customer reach. Avian Brands recorded consolidated gross profit of IDR 1 trillion in Q2, translating to a gross margin of 45.9%.
Despite ongoing raw material cost pressure, Avian Brands continued to demonstrate margin resilience through strategic pricing pass-through and continuous optimization initiative. For the first half of the year, consolidated gross profit reached IDR 2 trillion , with gross margin remaining solid at 45.4%. In Q2, Avian Brands recorded consolidated EBITDA of IDR 606 billion , representing an EBITDA margin of 27.2%. For the first half, consolidated EBITDA stood at IDR 1.2 trillion with an EBITDA margin of 27.9%. Moving on to the bottom line, Avian Brands reported net profit of IDR 435 billion in Q2, translating to a net profit margin of 19.5%. For the first half, net profit reached IDR 938 billion , reflecting a solid net profit margin of 20.4%. Despite a more challenging cost environment, the company maintained stable profitability.
First half margin were broadly in line with the company's full year 2025 performance, underscoring the resilience of its margin profile. This was supported by a strategic initiative, including pricing pass-through mechanism, further reinforced by our in-house raw material capabilities and continuous cost optimization effort, which together help mitigate input cost fluctuation and preserve margin stability. The Architectural Solutions segment continue its growth trajectory in the second quarter, marking its eighth consecutive quarter of positive performance despite a challenging economic backdrop. In Q2, the segment delivered double-digit sales growth of 22.4%, supported by a 4% increase in volume. For the first half, segment sales reached IDR 3.6 trillion , representing 18.8% increase. Over the same period, volume grew by 8.6%. Within the segment, the Wall Paint maintained its strong performance, delivering double-digit growth during the quarter. Avian Brands continue to gain market share and strengthen its position in this segment.
On to the next slide. The Architectural Solutions segment have offered 53,500 transacting retail outlet in the first half, an increase of more than 1,600 customers. Beyond expanding its customer base, Avian Brands remain focused on strengthening the quality of its partnership by providing high-quality service, consistent product availability, and practical support to help customer grow their business. We will continue to support our existing and new customers by being the most reliable and consistent business partner in our industry. In Q2, the Trading Goods segment achieved 10.9% growth. It was the 10th straight quarter of double-digit growth in this business. In the first half, sales were up by 15.8%, reaching IDR 957 billion . In the first half, the Trading Goods segment recorded more than 48,400 transacting retail outlet, an increase of over 2,500 outlets, and equivalent to 84% of total consolidated customers.
The segment continues to create strong commercial synergy by complementing Avian Brands core product offering and increasing the value delivered to retail partners. This page provide a breakdown of gross profit performance by segment. In Q2, The Architectural Solutions segment recorded gross profit of IDR 904 billion with a gross margin of 52%. For the first half, gross profit reached IDR 1.8 trillion , translating to a gross margin of 51.6%. Meanwhile, the Trading Goods segment generated gross profit of IDR 121 billion in Q2, representing a gross margin of 24.5%. For the first half, gross profit stood at IDR 208 billion with a gross margin of 21.8%. The increase in gross margin for the Trading Goods segment in Q2 was driven by two price adjustment implemented in the pipe category in April and May. The segment temporarily benefited from the lagging effect of inventory purchase before the price increase.
This effect is expected to normalize as we enter the second half of the year. I will now pass to Pak Robert to continue the presentation.
Thank you, Pak Hadi. Good afternoon, everyone. Turning to our cost structure, Avian Brands maintained a stable operating expense profile during the first half. General and administrative expenses remained at around 3% of total sales, while sales and marketing expenses accounted for 17.2%, reflecting continued discipline in managing operating costs while supporting business growth. At the same time, higher raw material costs compounded by the recent depreciation of Indonesian rupiah against the U.S. dollar have placed additional pressure on input costs. Historically, Avian Brands has managed raw materials volatility effectively through a combination of disciplined procurement strategies, operational efficiencies, and selective pricing adjustment. We will continue to closely monitor market developments and adapt our operational and commercial strategies as needed. Importantly, our longstanding focus on building strong relationships with strategic suppliers remains a key competitive advantage.
We believe these partnerships will continue to support supply stability, cost management, and overall business resilience going forward. Moving to our capital management overview, Avian Brands continued to maintain disciplined working capital management in the first half, with working capital accounted for around 27% of total sales. Capital expenditure for the first half amounted to IDR 232 billion , equivalent to around 5% of sale, and with routine capital expenditure accounting for approximately 2.6%. Investment priorities remained focused on initiatives that support the company's long-term growth, including the continued rollout of tinting machines across retail outlets. Supported by a strong free cash flow generation, Avian Brands remains committed to its dividend policy of distributing at least 50% of total net profit to shareholders. With a healthy balance sheet and strong liquidity position, Avian Brands has the financial flexibility to pursue strategic acquisitions opportunities that can create long-term value.
This reflects the company's ongoing commitment to maintaining a balanced capital allocation approach, supporting the future growth while consistently delivering attractive shareholder returns. If we turn our attention to the figure on the far right, you will see that there is a slight decline in our on-time collection of account receivables. This provides another indication of a challenging operating environment. However, we take pride in the fact that retail outlets continue to place Avian Brands at the top of their payment priorities, reflecting the strength of our customer relationships and our position as a trusted partner for them. The company increased its full year 2026 value guidance to between 10%-14%, while maintaining volume guidance at the same level.
This adjustment primarily reflects the increase in average selling prices, which grew by 9.4% in the first half, while also taking into account the prevailing uncertainties in the macroeconomic environment and their potential impact on consumer purchasing power. We will continue to monitor market conditions carefully and maintain a prudent and balanced approach while remaining focused on the factors within our control. Regardless of the market condition, Avian Brands remains well-positioned to continue gaining market share. Avian Brands is proud to be recognized at the TOP CSR Awards 2026 as the only paint and coatings company in Indonesia to receive this recognition for our outstanding CSR performance. The company also successfully maintained its recognition as a constituent of FTSE Russell ESG rating in 2026, further strengthened by a significant improvement in ESG performance, reaching a percentile rank of 88.
This position Avian Brands among the top 12% of global companies in the building materials and fixture subsectors, with ESG performance significantly exceeding both subsector and industry averages. That concludes our Q2 2026 presentation. Thank you very much for joining today's earning call. I will now pass to Andreas to moderate the Q&A session.