Indicative 2015 Results (Unaudited)
February 2016 Table of Contents
Macro Overview 33
Business Overview 36
Indicative 2015 Results 143
2016 Outlook 203
Excellence in Execution 2 Section 1 Macro Overview Macro Overview
Macro Headwind in 2015
1. Weaker Economic Growth, with Low Inflation 3. Government Infrastructure Improvements Underway 2014 5,02% 2015 4,79% 5,14% 5,03% 5,01% 5,04% 4,92% 4,72% 4,67% 4,73% • Infrastructure projects are underway and expected to support growth ahead 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4. ASEAN Economic Community Economic growth decreased from 5.02% in 2014 to 4.79% in 2015, mostly due to weak household • International expansion opportunity consumption and lower export. • Non-tariff barriers in pharma industry Inflation declined to 3.35% y-o-y in line with lower are still present volatile food and administered price. 5. Regulatory Update 2. Further Rupiah Depreciation in 2015 Government Stimulus Package 10 13,795 - Allows 100% foreign ownership in 12,440 pharmaceuticals raw materials -10.9% - Pharmaceuticals finished goods sector remains capped at 85% Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 4
'14 '15 '15 '15 '15 '15 '15 '15 '15 '15 '15 '15 '15
Excellence in Execution 4 Healthcare Industry
National Health Insurance Progress
JKN Coverage JKN Highlights & Outlook 2019 2015 • 158 million people covered • 95% of SOEs have registered in BPJS 2014 • BPJS reported a deficit of Rp 5.85 trillion 250 mn 158 mn Source : BPJS, BPJS Online
133 mn Increased Healthcare Allocation in 2016 Government Budget
CAGR 20.6%
Source : Ministry of Finance
Excellence in Execution 5 Section 2 Business Overview Our Business
Strengthening Our Footprints as a Health Care Company
What Business We are an Innovative Health Care Business providing Health Care Products & Its Are We In Related Services
Mission To improve health for a better life
To be the best Indonesian Global Health Care company driven by innovation, Vision strong brands and excellent management
1. Sustainable Growth Strategy 2. Innovation, Quality, and Productivity 3. World Class Competence & Organization
Values We believe in : Trust, Mindfulness, Innovation, Strive to be the best, Interconnectedness
Excellence in Execution 7 Our Strategic Focus
2016 Corporate Initiatives
Business Leadership Structure & Development Portfolio
Collaborative Innovation
*ERM : Enterprise Risk Management SCM : Supply Chain Management
Excellence in Execution 8 Key Achievements & Activities
2016 Corporate Initiatives
Leadership Development Kalbe Middle Finance Officer Kalbe Training Programs Management Program Development Program Learning Center
Business Structure & Portfolio
Visit of the Minister of Research & Technology and Higher Education to SCI
Excellence in Execution 9 Key Achievements & Activities
2016 Corporate Initiatives
Business Structure & Portfolio Customer Engagement Integrated Service to Consumers Events 2015
Kalbe Customer Care Kalbe Home Delivery Kalbe e-Store
KALCare Experiential Store Kalbe Family Rewards Card Dunia Generasi Platinum Fitbar Fun Activation Morinaga Mall to Mall (FIFA) Mobile Applications Utilization
Mommychi Diabetes Solution KalbeMed AntioksiDANCE Prenagen Pregnancy Mom & Child Center Mobile Mobile Application Entrasol Education Journey Mobile Application Application
Excellence in Execution 10 Key Achievements & Activities
2016 Corporate Initiatives
Fitbar Massive Diabetasol in Nutritionist and Dietitians Business Structure & Portfolio Sampling Activities Associations of the Philippines
International Expansion Hydro Coco Product Display in UAE
Woods Horizontal Banner in KL Sentral
UAE Philippines
Malaysia
Kalbe Morinaga Pharma Actvities in Oncology Department Mixagrip in Pharmacy Pharmacy Branding Milna Massive Sampling Selling Gathering in Medical Channel
Excellence in Execution 11 Key Achievements & Activities
2016 Corporate Initiatives
Collaborative Innovation
Visit of the Minister of Industry to Biosimilar Factory Construction JV Kalbe Blackmores
JV Kalbe Genexine
Excellence in Execution 12 Key Achievements & Activities
2016 Corporate Initiatives
Enterprise Risk Management (ERM)
Quality Assurance & Financial Compliance
Supply Chain Management (SCM)
Powdered milk New liquid milk factory Distribution Infrastructure capacity expansion
Excellence in Execution 13 Section 3
Indicative 2015 Results Consolidated Operational Performance
Overall Weaker Results in Challenging Time
Net Sales - Unaudited (in Rp Bn)
3.0% 31 Dec 2014 31 Dec 2015 17.369 17.888 (Audited) (Unaudited)
-2.2% -0.8% 11.6% 4.9% 5.535 5.415 4.329 4.293 4.581 5.114 2.924 3.066
Prescription Consumer Health Nutritionals Distribution & Consolidation Pharmaceuticals Logistics
Excellence in Execution 15 Consolidated Operational Performance
Pressure on Operating Margin
Gross Profit - Unaudited Operating Expenses to Net Sales Ratios - (in Rp bn) Unaudited 1.2% 48.8% 47.9% 32.9% 33.2% 8.476 8.574 0,8% 0,9% 5,2% 5,3% Selling & Marketing
31 Dec 2014 31 Dec 2015 General & (Audited) (Unaudited) 26,9% 26,9% Administrative Operating Profit - Unaudited Research & (in Rp bn) Development
-4.3% 15,9% 31 Dec 2014 31 Dec 2015 14,8% (Audited) (Unaudited) 2,761 2,641 2,641 • Marketing efforts to drive brand awareness • Research & development activities to support product development 31 Dec 2014 31 Dec 2015 (Audited) (Unaudited)
Excellence in Execution 16 Consolidated Operational Performance
Negative Impact on Bottom Line
Income Before Tax - Unaudited Net Income - Unaudited (in Rp bn) (in Rp bn)
-2.0% -4.3%
15.9% 15.1% 11.9% 11.0% 2.764 2.709 2.065 1.975
31 Dec 2014 31 Dec 2015 31 Dec 2014 31 Dec 2015 (Audited) (Unaudited) (Audited) (Unaudited)
• Income before tax margin decreased from 15.9% in FY • Net income margin decreased from 11.9% in FY 2014 2014 to 15.1% in FY 2015, mostly due lower gross profit. to 11.0% in FY 2015, in line with lower income before tax margin.
Excellence in Execution 17 Working Capital Management
Improving Inventory Days
158 No. of days 129 131 128 120 120 142 108 114 132 122 125 116 Days of Account Receivables 110 115 107 Days of Inventories 50 43 45 44 48 48 49 48 Days of Account Payables 57 50 46 44 38 35 41 27 Net Operating Cycle
2008 2009 2010 2011 2012 2013 2014 2015 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited)
Net Operating Cycle has been End-to-end supply chain reduced by 38 days from 158 management will be implemented days to 120 days to overcome fluctuation in inventory
Excellence in Execution 18 Working Capital Management
Strong Balance Sheets
Total Debt and Gearing Ratio Cash & Net Cash Balance
7,2% 600 15,0% 2.704 2.291 2.309 500 2.151 1.895 1.895 7,9% 3,8% 1.902 1.877 1.860 400 3,2% 10,0% 1.562 1.655 1.598 300 1.222 1.311 2,3% 2,9% 584 200 0,5% 5,0% 100 340 141 205 296 394 0 25 0,0% 2009 2010 2011 2012 2013 2014 2015 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) 2009 2010 2011 2012 2013 2014 2015 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) Total Debt in Rp Billion Gearing Ratio Cash and Cash Equivalent in Rp Billion Net Cash in Rp Billion Dividend Payment Capital Expenditure
* in Rp Billion Cash Dividend* (Rp/share) Dividend Payout Ratio (%) 994 945 783 852 51% 43% 20,0 51% 60% 42% 80% 15,0 60% 470 469 10,0 40% 5,0 14,0 19,0 19,0 17,0 19,0 20% 0,0 0% 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2015 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) *For Fiscal Year *Cash dividend are adjusted for stock split impact
Excellence in Execution 19 Section 4 2016 Outlook Outlook 2016
2016 Earnings Guidance
1. Year-on-year Sales Growth 8% - 10% 2. Operating Profit Margin 14% - 15% 3. Earnings per Share Growth 8% - 10% 4. Dividend Payout Ratio 40% - 50%
Capex of Rp 1 – 1.5 Tn for production capacity and distribution network expansion.
Excellence in Execution 21 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
Excellence in Execution 22