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Company Performance Company Performance Company Performance YTD September 2008 Contents Part 1 Kalbe at a Glance Part 2 Pharmaceutical Industry Overview Part 3 Business Overview A. Prescription Pharmaceuticals B. Nutritionals C. Consumer Health D. Distribution and Packaging Part 4 Operational Overview Part 5 Growth Drivers Part 6 Financial Overview Part 7 Recent Activities PtPart 8 FtFuture OtlkOutlook 2 Part 1 Kalbe at a Glance 3 Comppyggany Highlights Largest Publicly-Listed ♦ More than 42-year old pharmaceutical company with long track record of profitable growth. Pharmaceutical ♦ After the merger with PT Dankos Laboratories Tbk. and PT Enseval effective on December 16, Company in Southeast 2005, Kalbe has become the largest publicly-listed pharmaceutical company in Southeast Asia with approximately US$ 1 billion market capitalization in the past year. Asia 3 ♦ Lttltif2Large target population of 235 million in In dones ia, an d 570 million in Sou theas t As ia. Substantial Market ♦ OTC and prescription pharma in the Indonesian and Southeast Asian markets expected to grow Opportunity annually at 10% and 13% respectively over the next several years. ♦ The market leader in Indonesian prescription pharma market with 13% market share as well as a Market Leading leader in consumer health market with 16% OTC market share, 9% share in nutrition market and Positions in Indonesia 30% in energy drink market for the first semester in year 2008. ♦ Unrivaled health distribution network which directlyyy and indirectly covers more than 1 million outlets. Strong, Diversified, ♦ Consumer health portfolio which includes 13 market leading OTC brands in 7 main therapeutic categories, the market leading brand in pregnant nutrition and clinical foods, and the leading energy High Growth Product drink in Indonesia. Portfolio ♦ Prescription pharma portfolio of 284 products and over 500 SKUs. Highly Experienced ♦ Averaggge senior management tenure of over 20 y ears at Kalbe,,p providing strateg ic continuity and depth of senior management bench. Senior Management ♦ Average industry experience of over 20 years developing, manufacturing, marketing and selling Team consumer health and pharmaceutical products. ♦ Broad based growth across all business segments with consolidated revenues and net income have Strong Financial Track grown at 14% and 13%, respectively, from 2003-2007. Record ♦ Strong balance sheet with net cash position of almost 1 trillion Rupiah as of September 30, 2008. Substantial Growth ♦ Consumer health new product development. ♦ Development of prescription pharmaceutical portfolio. Opportunities ♦ Continued expansion in Southeast Asia. 4 Historical Data Kalbe was established in 1966 and has a long track record of profitable growth Inception and Entrepreneurial Excellence, Sustainable Growth, Enhanced Focus and Consolidation Driven Expansion Going Global 1996–2005 1966–1995 2007–2015 1966 1977 1981 1985 1989 1991 1993 1994 1996 1997 2005 2007 1966: 1977: 1985: 1989: 1991: 1994: 2005: 2007-2010 Business Focus Company Dankos Lab Acquired Igar Jaya Kalbe Farma ♦ Entered Consolidation of ♦ Expand regional footprint founded Bintang and IPO energy drink Kalbe Group ♦ Build global brands and infrastructure Toedjoe & Dankos business ♦ Scale through mergers and Hexpharm IPOs ♦ EPM IPO 1996: 1997: acquisitions Disposed of ♦ Disposed of Kalbe’s 1981: ♦ Proprietary drug development 50% of food remaining 50% ownership ♦ Global partnerships and networks Spin-off the 1993: business (PT in PT Bukit Manikam Sakti distribution ♦ Acquired Bukit Manikam to Arnotts business to PT Sanggghiang Sakti) to ♦ Disposed glass packaging Enseval due to Perkasa and Arnotts division to Schott consolidated government ♦ Acquired Woods regulation nutritional Peppermint brand business to Sanghiang ♦ Acquired 80% of Saka Perkasa Farma Long Track Record of Sustainable Revenue Growth 900 8000 800 7000 700 6000 600 (IDR b 5000 500 4000 D mm) D 400 n) SS 3000 (U 300 200 2000 100 1000 0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Sales USD Sales IDR Note: Audited financials. Figures since 2005 are post-merger figures. 5 Corporate Overview Established in 1966 is a public company since 1991 and listed on the Indonesia Stock Exchange, Kalbe Farma is now the largest publicly-listed pharmaceutical company in Southeast Asia • Kalbe markets and sells its ppjroducts in 6 major markets in Southeast Asia which in aggregate represent a population of almost 570 million. • Over 15,000 employees and a marketing and sales force near of 6,000 covering 80% of the Indonesian consumer health and 100% of the Indonesian prescription pharmaceutical market. • Sales contribution of Kalbe’s 4 business segments in the 3rd Quarter of 2008: – prescription pharmaceuticals 28.2% – nutritionals 23.2% – consumer health 14.1% – distribution and packaging 25.2% 6 Corporate Overview 4 Divisions of Kalbe Group KALBE GROUP Prescription Consumer Distribution & Nutritionals Pharmaceuticals Health Packaging Energy Drink OTC Pharmaceuticals 7 Business Overview Kalbe Farma is the market leader in prescription pharmaceuticals, nutritionals and consumer health products in Indonesia Prescription Distribution & Nutritionals Consumer Health Pharmaceuti ca ls PkiPackaging • Licensed products • Pregnancy nutrition • OTC Pharmaceuticals • Consumer health • Branded generics • Baby milk products • Energy Drink • Prescription pharma Key • Unbranded generics • Baby biscuits • Medical instruments PdProduc t • Baby cereals and diagnostics Categories • Clinical food • Consumer products • Fine chemical raw materials Nuubember 1 in Indo doesanesian A market leade r in • Nuubember 1 in • Largest pha rmaceut ica l s prescription Indonesian nutrition Indonesian OTC distribution network in Market pharmaceuticals market market and in high end pharmaceuticals market Indonesia Position in nutrition market • Number 1 in • 40 distribution centers Indonesian energy • Indirectly and directly Key drinks market covers more than 1 mm Markets outlets Revenue IDR 1,570.3 billion IDR 1,417.8 billion IDR 1,268.8 billion IDR 1,460.8 billion YTD Sep 2008 8 Corporate Subsidiaries Pharmaceuticals Nutritionals Distribution & Consumer Health Bintang Toedjoe Sanghiang Perkasa EPMT 99.90% ownership 99.99% ownership 58.19% ownership Dankos Farma Kalbe Morinaga Tri Sapta Jaya 99.98% ownership 70.00% ownership 58.18% ownership Finusolprima Farma Bifarma Adiluhung Milenia Dharma Insani 99.988% ownership 99.20% ownership 57.61% ownership Hexpharm Jaya Labs Enseval Medika Prima 99.60% ownership 57.61% ownership Saka Farma Labs Global Chemindo Megatrading 80.00% ownership 58.18% ownership Innogene Kalbiotech Pte. Ltd Packaging 90.79% ownership Kageo Kalbe International Pte. Ltd 63.10% ownership 100.00% ownership Kalbe Vision Pte. Ltd Avesta Continental Pack 100.00% ownership 48.25% ownership Cordlife Indoneisa Indogravure 30.00% ownership 24.61% ownership Pharma Metric Labs 34.45% ownership Orange Kalbe Ltd 30.00% ownership 9 Awards & Achievements Klb’Kalbe’s excellen t per formance is recogni zed b y a numb er of organi zati ons through the following awards Year 2008: • Kalbe Group received 3 ICSA 2008 medalion. • PT Bintang Toedjoe received K3 Award for implementing K3 System Management consistently for more than 10 years andidtifitdldfl5tiid received certificate and gold flags 5 times in a row. Year 2007: •“Original Product of Indonesia” for Extra Joss from Bisnis Indonesia. •Value Creator Award 2007 (Ranked 22th from 100) from SWA Magazine. •Nominator of Metro TV MDGs Award for the child mortality reduction program, Nov 26, 2007. •One of the “Most Admired ASEAN Enterprises ” and the winner of ASEAN Business Awards for CSR category in the event held by ASEAN Advisory Business Council on Nov 18, 2007. •“Pioneer of Corporate Social Responsibility Award” from Bekasi District Authority. •“Honorable City Tax Payer Award” from Central Jakarta district city Mayor on Aug 23, 2007. •Investor Award 2007 (Ranked 24th of 100 Best Companies, and ranked 2nd in cigarette, pharmacy, and household appliances sector) from Investor Magazine. Year 2006: •“Trusted Company Award” and “Best Company in the Consumer Industry Award” from IICG (Indonesian Institute for Corporate Governance). • “Top 10 Value Creator 2006” for companies with assets >Rp 1 trillion from SWA Magazine, Markplus & Co. •Asia’s Best Managgped Companies Poll Awards 2005 from AsiaMoney. •Investor Award 2006 (the best in cigarette, pharmacy, and household appliances sector) from Investor Daily and Investor Magazine. •CEO of the year 2006 award for Kalbe’s President Director, Johannes Setijono from Bisnis Indonesia. • “Best ”Second Liner” Company to Invest from Bisnis Indonesia. •“Best Company promoting Education awareness in the whole of West Java District 2006" from Governor of West Java, Danny Setiawan. 10 Part 2 Pharmaceutical Industry Overview 11 Pharmaceutical Industry in Indonesia • In 2007, the size of local pharmaceutical market was IDR 24.6 trillion (approx. USD2.8 billion) or grew by 9.2% and is expected to grow around 9.1% in 2008. • The market comprised of 60% Prescription Pharmaceutical products and 40% Over the Counter (OTC) products. •Thelevelof competition is quite high with around 200 pharmaceutical companies, including approximately 30 MNCs. • Government has implemented Patent Law and Product Registration based on WTO’ standard and has continued to provide medical treatments for the poor at hospitals and community health centers. • The price increase of pharmaceutical products is lower than
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