Company Update Unaudited YTD March 2015
April 2015 Forward Looking Statement
This presentation has been prepared for informational purposes only by PT Kalbe Farma Tbk. (“Kalbe” or the “Company”). This presentation has been prepared solely for use in connection with the release of 31 March 2015 unaudited results of the Company. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of their respective affiliates, and their respective commissioners, directors and employees, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. Any decision to purchase or subscribe for securities of the Company should not be made on the basis of the information contained in this presentation. The presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. This presentation and its contents are confidential unless they are or become generally available as public information in accordance with prevailing laws and regulations (other than as a result of a disclosure by you) and must not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person. This presentation does not constitute a recommendation regarding the securities of the Company. This presentation, including the information and opinions contained herein, is provided as of the date of this presentation and is subject to change without notice, including change as a result of the issuance of 31 March 2015 unaudited results of the Company . This presentation includes "forward-looking statements". These statements contain the words "anticipate", "believe", "intend", estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans, objectives relating to the Company's products and services and anticipated product launches) are forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaims any obligation or reflection of any change in the Company's expectations with regard thereto, or any change in events, conditions or circumstances on which any statement is based. Market data and certain industry forecasts used in this presentation were obtained from market research, publicly available information and industry publications which have not been independently verified, and no representation is made as to the accuracy of such information.
2 Table of Contents
Corporate Overview 4
Market Overview 7
Business Overview 11
Financial Overview 29
Strategies and Outlook 2015 35
Appendix 40
3 Not all collagen is the same, it’s SECTION 1 time to choose the right one Corporate Overview Corporate Overview
Largest Publicly-Listed Pharmaceuticals Company in Southeast Asia
• Established in 1966 and headquartered in Jakarta • A public company since 1991 and listed in the Indonesia Stock Exchange • The largest publicly-listed pharmaceuticals company in Southeast Asia • Sales breakdown by segment and by geographical location for YTD March 2015 is as follows:
Distribution & Prescription Export 5% Logistics Pharmaceuticals 27% 26%
Domestic 95% Consumer Nutritionals Health 28% 19% Total Sales = Rp 4,247 Bn Total Sales = Rp 4,247 Bn
5 Corporate Strategy
Long Track Record of Sustainable Growth
Inception and Entrepreneurial Enhanced Focus and Consolidation Regionalization Driven Expansion 1996–2005 2006–2015 1966–1995
2012: 2010: ♦ Generic production Disposed of Kageo Igar Jaya facility came on 1981: 1995: Established a joint venture stream 1994: Spin-off the Disposed of 50% company, Asiawide Kalbe ♦ Acquired PT Hale 2014: distribution business Entered 2006: Philippines Inc. 1991: of food business 2005: International Completion of 1966: to PT Enseval due to energy drink (PT Bukit Scale through Inaugurated Panca Sradha Kalbe Farma Consolidation ♦ Established a joint Kalbe’s Company government business Manikam Sakti) mergers and Kalbe as our Corporate IPO of Kalbe Group venture company PT oncology factory founded regulation EPMT IPO to Arnotts acquisitions Values Kalbe Milko Indonesia 1966 1977 1981 1985 1989 1991 1993 1994 1995 1997 2005 2006 2007 2010 2011 2012 2013 2014 1977: 1997: 2007: 2011: 2013: Strengthen 1985: 1989: 1993: Disposed of Kalbe’s Launch of new corporate EPMT Rights Issue to Cancellation of pharma Expansion to Igar Jaya Strengthening remaining 50% logo as part of finance expansion the Company’s business by consumer and nutritionals ownership in PT Bukit transformation process Increased dividend Treasury Stocks establishing health Dankos business by Manikam Sakti to Products entered every payout ratio to 50% 0f 7.7% Dankos Lab through IPOs acquiring Arnotts ASEAN countries (except acquisition of Sanghiang Perkasa Disposed glass Laos) Bintang and consolidating packaging division to nutritional business Opening of the Stem Cell Toedjoe and Schott and Cancer Institute in pharma to Sanghiang Acquired Woods Implementation of end-to- through Perkasa Peppermint brand end supply chain Hexpharm Acquired 80% of Saka management 1600 Jaya 20,000 Farma Integrated information acquisition 1400 technology systems 1200 15,000
1000 (IDRbn) 800 10,000
(USD mm)(USD 600 400 5,000 200 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sales USD Sales IDR 6 Not all collagen is the same, it’s SECTION 2 time to choose the right one Market Overview Indonesia’s Health Spending Trends
• Low healthcare expenditure to GDP ratio. Healthcare Expenditure/GDP 2013 (%) • National Health Insurance (Jaminan United States 18.0% Kesehatan Nasional or JKN) program has United Kingdom 9.6% commenced in January 2014, and covered Singapore 5.8% China 5.5% more than 50% of the population in 2014. JKN Malaysia 4.3% targets to cover the entire Indonesian Thailand 4.2% population by 2019. India 4.1% Indonesia 3.3% Total Healthcare Expenditure Source : Centers for Medicare & Medicaid Services, Office of the Actuary; United Kingdom : Healthcare Report, Economist Intelligence Unit; Kementerian Kesehatan Indonesia, China; Singapore Government Budget; Economic Survey, India; Frost & Sullivan (USD Bn) CAGR 12.5% JKN Coverage Roadmap 30.4 26.4 23.4 21.1 19.0 18.2 15.9 Private Expenditure 2019 14.5 2015 13.1 12.1 Public Expenditure 2014 Target 250 mn Target 170 people mn people 133 mn 100% coverage 10.5 12.2 people * 6.8 7.9 8.9 Source : Roadmap to National Health Insurance 2012 - 2019 2009 2010 2011 2012 2013 * Including 76.4 mn people covered by Jamkesmas program Source : Global Health Expenditure Database, WHO before the launch of JKN.
8 Pharmaceuticals Market Breakdown
Kalbe – No. 1 in the Pharma Industry Kalbe continues to lead in the highly fragmented pharmaceuticals industry with over 200 players
Pharma Market Breakdown Market Share Kalbe 13% a 6% OTC b 5% 41% c 4% d 4% Others 68% Branded & Ethicals Licensed Pharma Industry (Prescription) 84% (in trillion Rupiah) 59% 55.5 58.2 49.4 Unbranded 41.7 CAGR 16% 37.0 12.0% Total Market FY 2014 Rp 58.2Tn Source: IMS Health ITMA YTD 12 2014 Note: Restatement of 2012 IMS market data FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
9 Recent Indonesian Pharmaceuticals Regulatory
National Healthcare Insurance System
Presidential Decree No. 101 Year 2012 regarding Recipients of Health Insurance Premium Subsidy • Government will subsidize health insurance premium for poor residents Presidential Decree No. 111 Year 2013 regarding Health Insurance • Replaces Presidential Decree No. 12 Year 2013. • All Indonesians are required to be members of the Health Insurance. • First stage of implementation in 2014 will cover subsidy recipients, military members, civil servants, and formal sector workers. Second stage will cover all population members by 1 January 2019. Ministry of Health Circular No. KF/Menkes/167/III/2014 issued on 26 March 2014 • National Health Insurance is conducted through electronic purchasing method based on an e-catalogue. • Manual procurement applies for drugs outside the e-catalogue.
Price Caps on Key Generic Drugs
Ministry of Health Decree No. 436 /Menkes/SK/XI/2013 issued on 11 November 2013 • Replaces the previous Ministry of Health Decree No. 092 /Menkes/SK/II/2012 with some additional units. • Determines the selling price and retail price caps on 535 generics drugs for pharmacies, hospitals and other healthcare institutions throughout Indonesia.
Local Production Facilities Requirements
Ministry of Health Regulation No. 1010/Menkes/PER/XI/2008 issued on 3 November 2008 • Prohibits foreign pharmaceutical companies from registering drugs in Indonesia unless they have local production facilities.
10 Not all collagen is the same, it’s SECTION 3 time to choose the right one Business Overview Prescription Pharmaceuticals Division
Positive Top Line Growth
+5.1% • No. 1 player in Indonesian Prescription Pharma Market. • The largest medical representatives team in Indonesia with 1,056 1,109 more than 2,500 personnel. • Comprehensive product offerings for all income groups. • Increasing competition following national healthcare 31 Mar 2014 31 Mar 2015 insurance implementation. (Unaudited) (Unaudited) • Conducted a product recall in February. SALES in Rp Bn Licensed Market Share (ITMA) Products FY 2014 27.4% KALBE a b c d GROUP 8% 6% 4% e 4% 15% 4% f Branded 3% Generics Unbranded 58.8% OTHERS Generics 56% 13.8% Total Sales Rp 1,109 Bn
Total Market = Rp 34.6Tn • Gross Profit Margin (GPM) remained relatively stable at Source: IMS Health Prescription Pharmaceuticals 59.5% in YTD 03 2014 and at 60.0% in YTD 03 2015. YTD 12 2014
12 Prescription Pharmaceuticals Division
Growth Drivers
Penetrating further in the unbranded Strengthening presence in generics market specialty products • Selection of focused categories to achieve scale • Completed the first oncology factory in • Utilization of dedicated unbranded generic plant Indonesia in 2014 • Commercialization started in Q3 2014
Expanding licensed products from multinational • Starting building competence in stem cells companies to gain technology transfer and genomics Stem Cells and Cancer Institute
13 Consumer Health Division
Strong Brand Equity with Leading Market Position Market share of Kalbe’s brands
Therapeutic Class Kalbe’s Products Market Share 2014 Antacid Promag, Waisan 75.2% Anti Diarrhea Neo Entrostop 44.8% Cough Remedies Komix, Woods, Mextril, Mixadin 33.9% Cold Remedies Mixagrip Reg, Mixagrip FB, Procold 37.4% Multivitamin Cerebrovit, Fatigon, Sakatonik Liver 30.8% Children Multivitamin Cerebrofort, Sakatonik ABC 18.1% Energy Drink Extra Joss 27.0%
Source : AC Nielsen YTD 12 2012 and Company’s estimation 2014, in volume
14 Consumer Health Division
Stable Net Sales Performance
+12.4% • No. 1 Player in OTC market and No. 2 in 694 780 Energy Drink category.
• GPM increased from 52.6% in YTD 03 2014 to 55.1% in YTD 03 2015, mostly due to product 31 Mar 2014 31 Mar 2015 mix. (Unaudited) (Unaudited) SALES in Rp Bn OTC Energy Drink YTD 12 2014 YTD 12 2014 (Unit) b c d b a e c 7% 7% 6% f a 13% 8% 4% g 7% KALBE 3% 37% 3% d GROUP 3% 9% Others others 52% 13% Extra Joss 27% Total Market = Rp 23.6 Tn Source : IMS Health OTC YTD 12 2014 Source : AC Nielsen YTD 12 2012 and Company’s estimation 2014, in volume
15 Consumer Health Division
Innovative New Products
Hydro Coco An isotonic drink made of real coconut water Original Love Juice Fresh bottled fruit juice made of quality fruits available in pomegranate, orange, guava, apple, and soursop flavors H2 – Health and Happiness Supplement product for skin care Promag Fruity 4s Antacid tablet with fruit flavors Nitros Concentrated energy drink in liquid form with convenient tube packaging Extra Joss Blend New variant of energy drink with added powdered milk in sachet packaging Herbal Products Promag Gazero Herbal remedy to relieve flatulence Woods Herbal Herbal cough syrup Bintang Toedjoe Masuk Angin Traditional herbal remedy for common cold symptoms
16 Nutritionals Division
Complete Range of Nutritional Products • Catered to expecting & lactating mothers, babies, toddlers, children, tweens and adults.
Expecting Lactating Baby Toddler Kid Tween Teen 25+ 35+ Clinical
17 Nutritionals Division
Growth of Indonesian Powdered Milk Market
By Volume (Kg ‘000) By Value (Rp Bn)
2.2% 10.4%
19,820
187,387 183,317 17,947
FY 2013 FY 2014 FY 2013 FY 2014
Source : AC Nielsen, YTD 12 2014
18 Nutritionals Division
Consistent Net Sales Growth
+13.6% • Strong brand awareness of existing major products 1,198 1,055 Kalbe’s Products Market Share 2014 Diabetasol 88.0% Milna 68.8% 31 Mar 2014 31 Mar 2015 Prenagen 55.4% (Unaudited) (Unaudited) Morinaga Chil Mil 9.2% SALES in Rp Bn Morinaga BMT 10.9% Powdered Milk Market Share YTD 12 2014 Entrasol 9.7% g h i Others f 3% 2% 2% 2% Morinaga Chil Kid 6.8% e 2% a d 5% 29% Zee 6.5% 7% Morinaga Chil School 2.7% Kalbe Nutritionals Source : AC Nielsen, YTD 12 2014 and Company’s estimation 2014, in value 11% b • GPM declined to 54.3% in YTD 03 2015 from c 24% 13% 56.1% in YTD 03 2014, mostly due to higher Total Market = Rp 19.8 Tn raw material cost in inventory and Rupiah Source : AC Nielsen 2014, based on Value (Rp) depreciation.
19 Nutritionals Division
Launching of New Products
Diva Health drink with collagen and antioxidant for skin care
Nutrive Benecol Smoothie with special ingredient to lower cholesterol
Fitbar A healthy snack bar with low calories, zero cholesterol and zero trans fat.
Zee Powdered milk for kids and tweens targeted to the middle segment, now also available in sachet packaging
Morinaga Soya & P-HP Customized infant formula and growing up milk for lactose intolerance and milk protein allergy.
20 Nutritionals Division
Multi Channel Customer Touch Points Kalbe e-store - the 1st Online Nutrition Store in Indonesia
Nutritionals Division launched new channel of consumer order through hotline service Kalbe Home Delivery 500- 880 and online shopping through www.kalbestore.com . Kalbe Family Rewards Card offers point rewards for consumers to build consumer loyalty. KALCare Experiential Store provides various services to build customer engagement and support branding activities.
21 Distribution & Logistics Division
The Most Extensive Distribution Network
RDC Branches Cities 2 70 51
22 Distribution & Logistics Division
Net Sales Performance on Consolidated Basis -8.1% • Distribution & Logistics Division is run under PT Enseval Putera Megatrading Tbk (EPMT.JK), a publicly 1,262 1,159 listed company (91.75% owned). • Net sales represents the 3rd party product sales and distribution margin of internal product sales for consolidated accounting purposes. 31 Mar 2014 31 Mar 2015 • GPM slightly increased to 30.7% in YTD 03 2015 from 28.5% (Unaudited) (Unaudited) in YTD 03 2014. SALES in Rp Bn Distribution Business Details on Stand Alone Basis
(Figures in Rp Bn) Gross profit margin
5,000 12.0% 4,075 11.2% 4,000 10.0% Kalbe Group 74% 8.0% rd 3,000 Income before tax 3 Party Principals 14% margin 6.0% 2,000 Raw Material Trading 9% 4.0% 3.2% 1,000 456 2.0% Medical Devices 3% 131 - 0.0% Net Sales Gross Profit Income Before Tax 23 Distribution & Logistics Division
Major Third Party Principals by Category
Prescription Medical Instrument Fine Chemical Pharmaceuticals Consumer & Diagnostic Raw Materials
24 Distribution & Logistics Division
Growth Drivers
Medical Devices Retail Health Services : 83 Mitrasana Clinics Medical Devices is an area of potential • Developing Mitrasana Clinics as a growth, especially in the implementation one-stop service with 4-in-1 of National Healthcare Insurance concept, including family doctor, System where demand for medical pharmacy, laboratory, and devices is projected to grow further. convenient store. • A 100% owned subsidiary of EPMT. • To date, Kalbe has opened 83 Net Sales (in Rp Bn) Mitrasana clinics in Jakarta and its Greater Area. 1,142 969 915 870 673 742
2009 2010 2011 2012 2013 2014* * Discontinued tender business in 2014
25 Distribution & Logistics Division
Strengthening Distribution Network
• Exploring potential new 3rd party principals selectively • Continuing to expand distribution infrastructure 1. Expand into new territories in Indonesia 2. Upgrade existing branch facilities to improve service quality 3. Establish several Regional Distribution Centers (RDC) throughout Bandar Lampung Indonesia 4. Expand warehouse capacity • Collaborating with sub-distributors to gain territorial expansion
2014 overview Tangerang • New branches in Banyuwangi and Bandung • Upgraded branches in Bandar Lampung, Tangerang, Surabaya, Balikpapan and Jambi
Surabaya
26 Marketing and Sales Infrastructure
The largest sales force for Pharma and Consumer Health in Indonesia
Prescription Distribution & Consumer Health Nutritionals Pharmaceuticals Logistics • > 2,000 sales & • Over 2,500 medical • Approximately 1,100 • Over 1,100 marketing marketing personnel representatives marketing and sales personnel • Total of > 5,000 force employees Infra- • 70 marketing branches structures throughout Indonesia • 46 branches & 24 at subsidiaries • > 1,000 trucks • > 500 motorcycles
Market coverage • Directly cover • Market Coverage • 80% of consumer • 70% of GP market 200,000 outlets throughout Indonesia health market covered • Products available in •100% of prescription • 90% of specialist market Indonesia over 1mn outlets or pharma market covered Coverage • 100% of all hospitals 80% of total covered consumer health • 100% pharmacy market coverage
• Most developed • Largest marketing • Largest sales force in telemarketing team in Comments team in Indonesia Indonesia the nutritional sector
27 Manufacturing Infrastructure
Operates 9 GMP facilities complying with international standards
Products Building Area Facility Production Lines Licenses Certification Manufactured (m2) 14 lines (tablet, capsule, cream, liquid oral, ISO 9001, ISO 14001, Kalbe Farma 435 91,819 Astellas injection) OHSAS18001 ISO 9001, ISO 14001, Bintang Toedjoe 49 20,849 3 lines; effervescent, powder & liquid -- OHSAS18001, HACCP, SMK3 4 factories; Non-betalactam, Penicillin & Daiichi, ISO 9001, ISO 14001, Dankos Farma 189 23,101 Cephalosporin, Oncology lines Samyang OHSAS18001 ISO 9001, ISO 14001, HACCP, Sanghiang Perkasa 132 51,403 8 line dry - powdered miilk Morinaga OHSAS18001 ISO 9001, ISO 14001, Hexpharm Jaya 85 16,533 Solid tablet (Non-betalactam products) -- OHSAS18001 Large volume parenteral (LVP) in glass bottle ISO 9001, ISO 14001, Finusolprima Farma 26 10,700 line, LVP in flexy bag line, Haemodialysis Baxter OHSAS18001 Solution Line ISO 9001, ISO 22000, OHSAS Kalbe Morinaga 19 33,733 1 wet - drier line, 1 can line, 2 sachet lines Morinaga 18001
Orange Kalbe Ltd. - 5,000 2 lines; tablet and cream -- NAFDAC (local FDA)
Hale International 6 10,000 Semi hot-filled PET -- ISO 22000/2005 GMP, HACCP
28 Not all collagen is the same, it’s SECTION 4 time to choose the right one Financial Overview Consolidated Sales
Consistent Top Line Growth of Internal Kalbe Products
Net Sales (in Rp Bn)
4.4%
4,247 31 Mar 2014 31 Mar 2015 4,067 (Unaudited) (Unaudited)
13.6% -8.1% 5.1% 12.4% 1,262 1,056 1,109 1,055 1,198 1,159 694 780
Prescription Consumer Health Nutritionals Distribution & Consolidation Pharmaceuticals Logistics
30 Consolidated Operating Performance
Stable Operating Margin
Gross Profit Operating Expenses to Net Sales Ratios (in Rp bn) + 8.1% 49.5% 33.4% 47.8% 32.0% 0.9% 2,102 0.8% 1,945 4.7% 5.1% Selling & Marketing
31 Mar 2014 31 Mar 2015 26.5% 27.5% General & (Unaudited) (Unaudited) Administrative Operating Profit Research & (in Rp bn) Development + 6.3% 31 Mar 2014 31 Mar 2015 (Unaudited) (Unaudited) 15.8% 16.1% 643 684 • Marketing efforts to drive brand awareness • Research & development activities to support 31 Mar 2014 31 Mar 2015 product development (Unaudited) (Unaudited)
31 Consolidated Net Earnings
Positive Earnings Growth
Income Before Tax Net Income (in Rp bn) (in Rp bn)
+6.6% +7.2% 12.4% 16.2% 16.5% 12.1% 529 657 701 493
31 Mar 2014 31 Mar 2015 31 Mar 2014 31 Mar 2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
• Income before tax margin slightly increased from • Net income margin slightly increased from 12.1% in 16.2% in YTD 03 2014 to 16.5% in YTD 03 2015, mostly YTD 03 2014 to 12.4% in YTD 03 2015, in line with due to improvement in operating margin. operating profit margin.
32 Working Capital Management
Temporary Spike in Inventory
No. of days Temporary increase in 158 finished goods inventory 129 131 138 120 128 142 108 114 132 132 125 122 Net Operating Cycle has 110 115 107 been decreased by 20 days from 158 days in 2008 to 138 50 49 51 43 45 44 48 48 days in March 2015. 46 46 57 50 38 35 41 27 End-to-end supply chain
2008 2009 2010 2011 2012 2013 2014 31 Mar 2015 management would be (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) continuously implemented Days of Account Receivables Days of Inventories to overcome any Days of Account Payables Net Operating Cycle fluctuation in inventory
33 Solid Financial Position
Rp 1.9 Trillion of Net Cash Position
Total Debt and Gearing Ratio Cash & Net Cash Balance
2,291 2,151 2,201 1,902 1,877 1,860 1,895 1,895 1,954 600 Total Debt in Rp Billion 7.2% 15.0% 1,655 1,598 500 Gearing Ratio 1,311 400 584 3.2% 10.0% 300 2.5% 2.3% 2.9% 296 200 0.5% 246 5.0% 100 25 141 0 205 0.0% 2010 2011 2012 2013 2014 31 Mar 2015 2010 2011 2012 2013 2014 31 Mar 2015 (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) Cash and Cash Equivalent in Rp Billion Net Cash in Rp Billion Dividend Payment Capital Expenditure
* Capital Expenditure in Rp Billion Cash Dividend* (Rp/share) Dividend Payout Ratio (%)
20.0 60% 80% 994 51% 51% 783 852 15.0 42% 60% 26% 470 469 10.0 19.0 19.0 40% 14.0 17.0 209 5.0 5.0 20% 0.0 0% 2009 2010 2011 2012 2013 2010 2011 2012 2013 2014 31 Mar 2015 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) * For Fiscal Year * Cash dividend are adjusted for stock split impact
34 Not all collagen is the same, it’s SECTION 5 time to choose the right one Strategies & Outlook 2015 KALBE Business Strategies
Strengthen business Improve marketing & Go Global - deeper portfolio through sales effectiveness ASEAN penetration, product innovation & more product M&A offering
Enhance human Strengthen Quality capital development Assurance, Compliance & CSR
36 Corporate Actions
Dividend Payment for Fiscal Year 2013
Historical Dividends Kalbe has obtained the approval of the AGMS 20.0 60% 80% on May 14, 2014 to pay dividend of Rp 797 bn, 51% 51% 15.0 42% 60% or equivalent to Rp 17 per share. This reflects a 26% 10.0 17% 19.0 19.0 40% payout ratio of 42% for financial year 2013. 14.0 17.0 5.0 20% 2.5 5.0 Dividend has been paid on July 2, 2014. 0.0 0% 2008 2009 2010 2011 2012 2013 * Cash dividend are adjusted for stock split impact Cash Dividend* (Rp/share) Dividend Payout Ratio (%) Acquisition of PT Hale International To accelerate expansion in the ready-to-drink segment, on July 6, 2012, Kalbe completed the acquisition of PT Hale International, a health beverage manufacturing company, worth Rp 98.6 billion. Joint Venture to form PT Kalbe Milko Indonesia Kalbe signed an agreement with PT Milko Beverage Industry to form a joint venture company, PT Kalbe Milko Indonesia, to manufacture liquid nutritionals products with an estimated investment of Rp 100 – 150 Bn. Cancellation of Treasury Stocks Kalbe has obtained shareholders’ approval for treasury stock cancellation in the EGMS on May 20, 2013.
37 Corporate Social Responsibility
Looking after our stakeholders Community Development Environmental Sustainability Consumer Protection
Kalbe Junior Ristek Kalbe Scientist Award Science Award ISO 14001:2004
Certified Environmental Management System Dedicated Customer Care Team Kalbe Cares
Dr. Boen Extended Distinguished Producer Lecture Series Responsibilities Education Health Environment Infrastructure Free Medical Blood Donor Disaster Reliefs Consultations Activities
38 Outlook 2015
Revised Earnings Guidance 2015
1. Year-on-year Sales Growth 7% - 9% 2. Operating Profit Margin 16% - 17% 3. Earnings per Share Growth 9% - 11% 4. Dividend Payout Ratio 40% - 50%
Capex Rp 0.9 – 1.1 Tn for production capacity expansion and distribution network.
39 Not all collagen is the same, it’s SECTION 6 time to choose the right one Appendix 1 Financial Information YTD March 31, 2015 (Unaudited) Unaudited Financial Statement YTD 03 2015 Consolidated Balance Sheets
31 December 2014 31 March 2015 (Audited) (Unaudited) % Change ASSETS CURRENT ASSETS Cash and Cash Equivalents 1,894,609,528,205 2,200,611,092,626 16.2% Trade Receivables, Net 2,346,943,653,265 2,410,519,914,916 2.7% Other Receivables 117,957,876,451 99,779,278,055 -15.4% Other Current Financial Assets 199,389,672,567 180,418,182,397 -9.5% Inventories, Net 3,090,544,151,155 3,148,289,154,804 1.9% Prepaid Taxes and Expenses 82,698,813,413 119,609,568,080 44.6% Other Current Assets 388,661,675,136 415,172,190,156 6.8% TOTAL CURRENT ASSETS 8,120,805,370,192 8,574,399,381,034 5.6% TOTAL NON-CURRENT ASSETS 4,304,226,997,537 4,445,452,076,241 3.3% TOTAL ASSETS 12,425,032,367,729 13,019,851,457,275 4.8%
41 Unaudited Financial Statement YTD 03 2015 Consolidated Balance Sheets
31 December 2014 31 March 2015 % Change (Audited) (Unaudited) LIABILITIES CURRENT LIABILITIES Short-term Bank Loans 251,909,102,153 182,139,006,366 -27.7% Trade Payables 1,133,092,819,659 1,088,782,998,214 -3.9% Other Payables 422,739,416,901 423,859,462,077 0.3% Accrued Expenses 358,667,243,424 404,133,633,574 12.7% Short-term Liabilities for Employees' Benefit 34,921,207,677 63,133,988,246 80.8% Taxes Payable 184,590,382,675 241,805,470,763 31.0% TOTAL CURRENT LIABILITIES 2,385,920,172,489 2,403,854,559,240 0.8% TOTAL NON-CURRENT LIABILITIES 221,636,516,794 245,056,650,120 10.6% TOTAL LIABILITIES 2,607,556,689,283 2,648,911,209,360 1.6% EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT COMPANY Capital Stock -Issued and Fully Paid 468,751,221,100 468,751,221,100 0.0% Additional Paid-in Capital, Net (34,118,673,814) (34,118,673,814) 0.0% Retained Earnings 8,900,997,960,322 9,429,657,365,041 5.9% Others 46,392,656,427 61,818,977,382 33.3% Sub-total 9,382,023,164,035 9,926,108,889,709 5.8% Non-controlling Interests 435,452,514,411 444,831,358,206 2.2% EQUITY, NET 9,817,475,678,446 10,370,940,247,915 5.6% TOTAL LIABILITIES AND EQUITY 12,425,032,367,729 13,019,851,457,275 4.8%
42 Unaudited Financial Statement YTD 03 2015 Consolidated Statement of Income
31 March 2014 31 March 2015 (Unaudited) (Unaudited) % Change NET SALES 4,066,502,637,352 4,246,692,794,088 4.4% COST OF GOODS SOLD 2,121,798,032,288 2,144,656,186,648 1.1% % to NS 52.2% 50.5% -1.7% GROSS PROFIT 1,944,704,605,064 2,102,036,607,440 8.1% % to NS 47.8% 49.5% 1.7% Selling Expense (1,079,477,427,369) (1,166,017,126,432) 8.0% % to NS -26.5% -27.5% -0.9% General and Administrative Expense (189,691,565,203) (215,168,877,760) 13.4% % to NS -4.7% -5.1% -0.4% Research and Development Expense (32,185,353,085) (36,996,893,066) 14.9% % to NS -0.8% -0.9% -0.1% Interest Expense and Financial Charges (11,313,396,252) (6,632,243,520) -41.4% Interest Income 13,674,010,537 25,374,289,486 85.6% Other Operating Expenses (10,697,223,100) (19,973,178,370) 86.7% Other Operating Income 22,742,233,060 19,141,988,091 -15.8% Share in Net Losses of the Associated Entity (271,184,058) (960,799,676) 254.3% INCOME BEFORE INCOME TAX BENEFIT (EXPENSE) 657,484,699,594 700,803,766,193 6.6% % to NS 16.2% 16.5% 0.3% INCOME TAX EXPENSES, NET (151,570,649,925) (163,399,067,282) 7.8% % to NS -3.7% -3.8% -0.1%
43 Unaudited Financial Statement YTD 03 2015 Consolidated Statement of Income
31 March 2014 31 March 2015 (Unaudited) (Unaudited) % Change INCOME FOR THE PERIOD 505,914,049,669 537,404,698,911 6.2% % to NS 12.4% 12.7% 0.2% OTHER COMPREHENSIVE INCOME (EXPENSES) (16,322,861,642) 12,113,446,766 -174.2% COMPREHENSIVE INCOME FOR THE PERIOD 489,591,188,027 549,518,145,677 12.2% % to NS 12.0% 12.9% 0.9% Income for the Period Attributable to: Owners of the Parent Company 493,104,126,457 528,659,404,719 7.2% Non-controlling Interests 12,809,923,212 8,745,294,192 -31.7% Total 505,914,049,669 537,404,698,911 6.2% % to NS 12.4% 12.7% 0.2% Comprehensive Income for the Period Attributable to: Owners of the Parent Company 476,184,477,157 540,637,427,245 13.5% Non-controlling Interests 13,406,710,870 8,880,718,432 -33.8% Total 489,591,188,027 549,518,145,677 12.2% % to NS 12.0% 12.9% 0.9% Earnings Per Share Attributable to Owners of the Parent Company 11 11 7.2%
44 Unaudited Financial Statement YTD 03 2015 Consolidated Statement of Cash Flows
31 March 2014 31 March 2015 (Unaudited) (Unaudited) % Change CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers 4,279,980,271,083 4,575,803,845,302 6.9% Cash Paid to Suppliers and Employees (2,618,191,572,480) (2,768,343,323,738) 5.7% Cash provided by operations 1,661,788,698,603 1,807,460,521,564 8.8% Receipts of Claims for Income Tax Refund 10,660,455,267 - -100.0% Payments of Income Taxes (124,759,167,761) (103,649,164,777) -16.9% Payments of Other Operating Expenses, Net (1,197,149,735,389) (1,165,229,954,757) -2.7% Net Cash Provided by Operating Activities 350,540,250,720 538,581,402,030 53.6%
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sale of Other Current Financial Assets - 24,880,000,000 100.0% Interest Income Received 12,874,940,378 24,263,610,217 88.5% Proceeds from Sales of Property, Plant, and Equipment 4,625,806,845 3,402,315,322 -26.4% Acquisitions of Property, Plant and Equipment (208,113,568,562) (215,757,734,775) 3.7% Acquisitions from Other Investing Activities, Net 54,000,000 (21,636,941,156) -40168.4% Net Cash Used in Investing Activities (190,558,821,339) (184,848,750,392) -3.0%
45 Unaudited Financial Statement YTD 03 2015 Consolidated Statement of Cash Flows
31 March 2014 31 March 2015 (Unaudited) (Unaudited) % Change CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Bank Loans 819,310,494,290 297,738,477,606 -63.7% Receipts of Capital Contributions from Subsidiaries' Non-controlling Interest 4,887,332,280 - -100.0% Payments of Bank Loans (855,019,476,531) (326,390,112,931) -61.8% Payments of Interest Expense (11,973,958,358) (7,051,908,748) -41.1% Payments of Pension Funds (6,367,743,083) (6,964,544,494) 9.4% Payments of Obligations under Finance Leases (63,230,085) - -100.0% Net Cash Provided by (Used in) Financing Activities (49,226,581,487) (42,668,088,567) -13.3%
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT 110,754,847,894 311,064,563,071 -180.9% Net Effect of Changes in Foreign Exchange Rates of Foreign Currency Denominated Cash and Cash Equivalents (29,733,211,642) 21,711,405,585 -173.0% CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,356,186,110,248 1,819,421,532,492 34.2% CASH AND CASH EQUIVALENTS AT END OF YEAR 1,437,207,746,500 2,152,197,501,148 49.7%
46 Not all collagen is the same, it’s time to choose the right one
Appendix 2 JKN Information National Healthcare Insurance (Jaminan Kesehatan Nasional – JKN) Towards a universal coverage in 2019
• Mandatory for all Indonesians. • All participants to pay monthly premium to BPJS Kesehatan as administrator.
Premium Payment
Categories Monthly Premium
Poor & near Rp 19,225 / person /month Subsidized poor residents
5% of the salaries and compensations: Formal sector • 4% paid by the employers workers • 1% paid by the employees (as of July 1, 2015) Non- subsidized Informal Rp 25,500 (class III) / person /month sector Rp 42,500 (class II) / person /month workers Rp 59,500 (class I) / person /month BPJS Kesehatan Card
48 National Healthcare Insurance (Jaminan Kesehatan Nasional – JKN)
Health financing on limited resources
Healthcare Tariff Reimbursement Scheme
Capitation system / tariff Out Primary healthcare per capita Rp 3,000 – Rp Patient facilities 10,000 / person / month
Non Capitation Primary healthcare Rp 100,000 – Rp 600,000 facilities In Patient Diagnosis-related group : Secondary & fixed payment for a bundling tertiary healthcare of treatments & medicines facilities based on diagnosis
Drug Procurement
• Improving availability, cost efficiency and transparency through centralized electronic procurement • Electronic tender using price caps as ceiling price
49 THANK YOU
For further information: PT Kalbe Farma Tbk. Jalan Let.Jend. Suprapto Kav. 4 Jakarta 10510, Indonesia Tel. : 62-21-42873888 Fax. : 62-21-42873678 Email : [email protected] [email protected] [email protected] Website : www.kalbe.co.id
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