Morgan Stanley Asia Pacific Summit 2012
November 2012 Healthy, Tasty
Excellence in Execution 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 30 September 2012 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 30 September 2012 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 Excellence in Execution Investment Highlights
Largest Publicly-Listed 46-year old pharmaceutical company with long track record of profitable growth Pharmaceutical Company in The largest publicly-listed pharmaceutical company in Southeast Asia with over US$5 billion Southeast Asia market cap Large target population of 240 mm in Indonesia Substantial Market Attractive demographic profile, expansion of middle class segment with rising disposable income Opportunity The market leader in Indonesian consumer health market with 13% OTC market share, 9% share in nutrition market Market Leading Positions in Number 1 in Indonesian prescription pharma market with 12% market share Indonesia Unrivaled health distribution network which directly and indirectly covers more than 1,000,000 outlets Consumer health portfolio which includes 13 market leading OTC brands in 7 main therapeutic Strong, Diversified, High categories, the market leading brand in pregnant nutrition and clinical foods, and the leading Growth Product Portfolio energy drink in Indonesia Prescription pharma portfolio of more than 380 products and over 1000 SKUs Average senior management tenure of over 20 years at Kalbe, providing strategic continuity and depth of senior management bench Highly Experienced Senior Kalbe’s management team has in aggregate over 200 years of experience or an average industry Management Team experience of over 20 years developing, manufacturing, marketing and selling consumer health and pharmaceutical products, providing it with deep local market insight and expertise Broad based growth across all business segments with consolidated revenues and operating Strong Financial Track Record income have grown at a CAGR of 10% and 26% from 2009 - 2012 Strong balance sheet with net cash balance Consumer health new product development Substantial Growth Development of prescription pharmaceutical portfolio; and Opportunities Continued expansion in Southeast Asia
3 Excellence in Execution SECTION 1
Corporate Overview
4 Excellence in Execution 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 September
2012 is as follows: Export, 4% Prescription Distribution & Pharmaceuticals Logistics 25% 37%
Domestic, 96% Consumer Nutritionals Health 22% 17% Total Sales = Rp 9,694 Bn Total Sales = Rp 9,694 Bn • Over 10,000 employees and a marketing and sales force of 4,000 covering 80% of the Indonesian consumer health and 100% of the Indonesian prescription pharmaceuticals market
5 Excellence in Execution Corporate Strategy
Kalbe Has a 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 1981: 1995: Disposed of Kageo Igar Jaya facility comes on stream Spin-off the 1994: Disposed of 50% Established a joint venture ♦ Acquired PT Hale distribution business Entered 2006: company, Asiawide Kalbe International of food business 2005: 1966: to PT Enseval due to 1991: energy drink (PT Bukit Scale through Philippines Inc. ♦ Established a joint Consolidation Company government Kalbe Farma business Manikam Sakti) mergers and Inaugurated Panca Sradha venture company PT of Kalbe Group founded regulation IPO EPMT IPO to Arnotts acquisitions Kalbe as our Corporate Values Kalbe Milko Indonesia 1966 1977 1981 1985 1989 1991 1993 1994 1995 1997 2005 2006 2007 2010 2011 2012 1977: 1997: 2007: 2011: Dankos Lab 1985: 1989: 1993: Disposed of Kalbe’s Launch of new corporate logo EPMT Rights Issue to Acquired Igar Jaya Acquired remaining 50% as part of transformation finance expansion Bintang and Sanghiang Perkasa ownership in PT Bukit process Increased dividend Toedjoe & Dankos and consolidated Manikam Sakti to Products enter every ASEAN payout ratio to 51% Hexpharm IPOs nutritional business Arnotts countries (except Laos) to Sanghiang Disposed glass Perkasa Opening of the Stem Cell and packaging division to Cancer Institute Schott Implementation of end-to-end Acquired Woods supply chain management Peppermint brand Integrate information Acquired 80% of Saka technology systems 1400 Farma 12000 1200 10000 1000 8000 (IDRbn) 800 6000 600
(USD mm)(USD 4000 400 200 2000 0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sales USD Sales IDR
6 Excellence in Execution SECTION 2
Business Environment
7 Excellence in Execution Indonesia Pharma Market Growth
Source: IMS Health Market Prognosis, October 2011
8 Excellence in Execution Strong Economic Growth
GDP per capita (US$)
GDP 15,000 GDP 10,000
20,603 20,256 20,525
16,107 14,978 15,338 13,024 12,944 GDP 5,000 10,985 10,277 7,615 6,591 5,546 5,260 4,630 3,374
Poland Brazil Russia Mexico Turkey China Thailand Indonesia
2011 2015 GDP per capita to reach Source: Business Monitor International: Pharmaceutical & Healthcare Report, Q2 2012 USD 5,546 in 2015
9 Excellence in Execution Attractive Demographics Profile
Expansion of Middle Class Segment with Rising Disposable Income
10 Excellence in Execution Low but rising healthcare Low pharmaceuticals spending due expenditure to low penetration Healthcare Expenditure/GDP 2010 (%) Pharmaceuticals Spending 2010
5.00% 4.8% 1.2 (US Dollar) 4.50% 4.1% 119.6 3.8% 1 4.00% 3.5% 3.50% 3.3% 0.8 3.00% 2.50% 2.1% 0.6 2.00% 58.6 0.4 50.3 1.50% 1.00% 29.9 0.2 17.4 0.50% 11.4 0.00% 0 Malaysia Thailand Philippines India Singapore Indonesia Singapore Thailand Malaysia Philippines Indonesia India Total Healthcare Expenditure Pharmaceuticals Spending 300.0 1.2 70.0 1.2 (Rp Tn) 247 63 250.0 1 (Rp Tn) 221 60.0 57 196 1 200.0 0.8 173 52 153 150.0 133 0.6 50.0 46 116 0.8 101 42 100.0 86 0.4 40.0 38 34 50.0 0.2 0.6 30 30.0 - 0 24 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F 0.4 20.0
• Total healthcare spending is projected 10.0 0.2
to rise by 85% to Rp 247 Tn in 2015 - 0 from Rp 133 Tn in 2010 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F
Source: Business Monitor International: Pharmaceutical & Healthcare Report, Q3 2011 (Indonesia, Malaysia, Thailand, Philippines, India, Singapore)
11 Excellence in Execution Universal Coverage Implementation
Universal Coverage – a Driving Force for Increasing Health Expenditure
• Law on National Social Security System has been passed since 2004, but implementation regulation on Social Security Provider Body (BPJS) has just been passed in October 2011. The Government an the Parliament have passed the Social Security Provider Body (BPJS) Bill on 28 October 2011.
• There will be 2 BPJS : Commencement • BPJS Health 1 Jan 2014 • BPJS Labor 1 July 2015
12 Excellence in Execution SECTION 3
Business Overview
13 Excellence in Execution Prescription Pharmaceuticals Division
Leading the Market with Comprehensive Product Range
Total Market (ITMA) Sales Contribution By YTD 12 2011 Product Categories YTD 09 2012 b KALBE a c d 6% e GROUP 8% 4% 4% 4% 12% f Licensed 4% Products 32% Branded Generics Unbranded 58% Generics OTHERS 10% 58%
Total Market = Rp 25.0Tn Total Sales = Rp 2,412 Bn
Key Licensors
14 Excellence in Execution Prescription Pharmaceuticals Division
Gearing-up Towards the Universal Coverage
• Focus on unbranded generics: • Dedicated for unbranded generic drugs’ tablet production line to increase production efficiency and scale. • Strategic raw material sourcing
• Distribution network expansion: • Building more RDCs, branches, and upgrading facilities
• Entering into specialty drugs to achieve better margin : • Dedicated for oncology drugs. • Construction started in early April 2011 and expected to be completed in 18 months.
15 Excellence in Execution Consumer Health Division
Care for Family
Health for a Productive Life
16 Excellence in Execution Consumer Health Division
Strong Brand Equity with Leading Market Position
Market share of Kalbe’s brands YTD December 2011 Therapeutic Class Kalbe’s Products Market Share by Volume Antacid Promag, Waisan 77.4%* Anti Diarrhea Neo Entrostop 44.8%** Cough Remedies Komix, Woods, Mextril, Mixadin 39.1% Cold Remedies Mixagrip Reg, Mixagrip FB, Procold 35.9% Cerebrovit, Fatigon, Sakatonik Liver, Multivitamin & Vitamin C 42.2% Xon-Ce Children Multivitamin Cerebrofort, Sakatonik ABC 21.1% Energy Drink ExtraJoss 23.8%
Source : AC Nielsen jaguar method, based on volume (unit) Note : * urban data only ** based on AC Nielsen August 2010
17 Excellence in Execution Consumer Health Division
Leading Market Position
OTC Energy Drink YTD 12 2011 YTD 12 2011 (Unit)
b c d Others 8% 8% d 8% a 5% e 8% c 6% a 4% f 7% KALBE 4% 42% GROUP 13% b OTHERS 13% Extra Joss 50% 24%
Total Market = Rp 18.0Tn Total Market (in volume) = 2,371Mn Source : IMS Health ITMA OTC YTD 12 2011 Source : AC Nielsen YTD 12 2011
18 Excellence in Execution Consumer Health Division
Innovative New Products with Health Benefits
Hydro Coco An isotonic drink made of pure coconut water. Tipco Fruit & Vegetable Juice A healthy drink made of fruits and vegetables Original Love Juice & Pomerama Fresh bottled fruit juice made of quality fruits available in orange, guava, apple and pomegranate flavors. Pomerama is a pioneer and market leader in pomegranate juice in Indonesia. Komix DT A non-drowsy cough syrup with more convenient packaging. Bintang Toedjoe Turun Panas Anak Analgesic product for children in convenient sachet packaging. Bintang Toedjoe Masuk Angin Traditional herbal remedy for common cold symptoms. Nitros Concentrated energy drink in liquid form with convenient tube packaging. 19 Excellence in Execution 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
20 Excellence in Execution Nutritionals Division
Gaining Market Shares Against Multinational Competitors
Powder Milk Market Share YTD 12 2011 Market Share of Kalbe Nutritionals Products in its Category YTD December 2011 h i g 3% 2% Others 3% Kalbe’s Products Market Share e f 2% a 6% 3% 31% Diabetasol 79.5% d Milna 63.5% 9% Prenagen 55.4% Morinaga Chil Mil 8.4% Kalbe Morinaga BMT 8.6% Nutritionals 7.6% 9% Entrasol Morinaga Chil Kid 5.9% b c 19% 12% Zee 3.5% Morinaga Chil School 1.9% Total Market = Rp 14.8 Tn Source : AC Nielsen, based on Value (Rp) Source : AC Nielsen, based on Value (Rp)
21 Excellence in Execution Nutritionals Division
Launching of Nutritional Products
Fitbar A healthy snack bar made of oats and cereals that comes in 2 flavors, fruits and nuts, with only 110 calories per bar, Zero Cholesterol and Zero Trans Fat, enriched with Calcium, Vitamins A, B12 and C.
KidZee and Zee Powder milk for kids and tweens targeted to the middle segment, now also available in sachet packaging Nutrive Benecol Smoothie with special ingredient to lower cholesterol
Lovamil A new powder milk product for expecting and lactating mothers, targeted to the middle segment
Morinaga Soya & P-HP Customized infant formula and growing up milk for lactose intolerance and milk protein allergy.
Excellence in Execution 22 Nutritionals Division
Multi Channel Customer Touch Points Kalbe e-store - the 1st Online Nutrition Store in Indonesia
We increase brand activation and direct-to-customer activities to build closer relationships with our customers.
Excellence in Execution 23 Distribution & Logistics Division
The Most Extensive Distribution Network
RDC Branches Cities 2 65 47
24 Excellence in Execution Distribution & Logistics Division
Major Third Party Principals by Category
Fine Chemical Raw Materials
7% 3rd Party Principals 4% 23%
Kalbe Group 66% Distribution & Logistics and Health Services
25 Excellence in Execution Distribution & Logistics Division
Medical Devices, a New Growth Driver
Medical Devices is an area of potential growth, especially in the implementation of National Healthcare Insurance System where demand for medical devices is projected to grow further.
Net Sales (in Rp Bn) Major Principals Medical Devices
915 870
673 CAGR 502 30.1% 315 233
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
26 Excellence in Execution Distribution & Logistics Strategies
New Retail Health Service : Mitrasana Clinic
• Opening of Mitrasana Clinics as a one-stop service with 4-in- 1 concept, including family doctor, pharmacy, laboratory, and convenient store. • A 100% owned subsidiary of EPMT. • Operational excellence in several areas, such as supply chain management, system and in-store operation. • To date, Kalbe has opened 27 Mitrasana clinics in Jakarta and its Greater Area.
Mitrasana Clinic will play a strategic role for Kalbe in the implementation of the National Health Insurance as an outlet for Kalbe’s products through the pharmacy and doctor service.
27 Excellence in Execution Regional Expansion
Expand and deepen market penetration in ASEAN
28 Excellence in Execution Marketing and Sales Infrastructure
The Largest Sales Force for Pharma and Consumer Health in Indonesia
Prescription Distribution & Consumer Health Nutritionals Pharmaceuticals Logistics • Over 2,000 sales & • Over 2,300 medical • Approximately 1,000 • Over 1,000 marketing marketing personnel representatives marketing and sales personnel • Total of 4,000 force employees Infra- • 65 marketing branches structures throughout Indonesia • 42 branches & 23 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
29 Excellence in Execution Manufacturing Infrastructure
Operates 11 GMP Facilities Complying with International Standards
Products Building Area Facility Production Lines Licenses Certification Manufactured (m2) 9 lines of Non Beta Lactam Products ISO 9001, ISO 14001, Kalbe Farma 448 42,684 Astellas (tablet, capsule, cream, liquid oral, injection) OHSAS18001 ISO 9001, ISO 14001, Bintang Toedjoe 46 20,849 3 lines; effervescent, powder & liquid -- OHSAS18001, HACCP 3 factories; Non Beta Lactam, Penicillin & ISO 9001, ISO 14001, Dankos Farma 189 14,905 Daiichi Cephalosporin lines OHSAS18001 6 lines (4 lines sachet, 1 line tin, ISO 9001, ISO 14001, HACCP, Sanghiang Perkasa 132 11,869 Morinaga 1 line mixed sachet) OHSAS18001 ISO 9001, ISO 14001, Saka Farma 32 1,763 Liquid, Non Beta Lactam products -- OHSAS18001 Hexpharm Jaya Solid tablet & dry syrup 88 16,533 -- ISO 9001 (Cikarang) (Non Beta Lactam products) Hexpharm Jaya 143 3,400 Solid, Liquid oral & semi solid -- ISO 9001 (Cipanas) ISO 9001, ISO 14001, Fima 24 2,500 Large volume Parenteral Line Baxter OHSAS18001
Kalbe Morinaga 19 33,733 1 wet - drier line, 1 can line, 2 sachet lines Morinaga ISO 9001, ISO 22000
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
30 Excellence in Execution SECTION 4
Financial Overview
31 Excellence in Execution Financial Overview
Sustainable Revenue and Profitability Growth
Revenues Operating Income Net Income
12,000 2,500 1,600 10,000 1,400
2,000
) ) ) 1,200
8,000
Bn Bn 1,500 Bn 1,000 6,000 800
1,000
(IDR (IDR (IDR 4,000 (IDR 600 400 2,000 500 200 - - - 2009 2010 2011 YTD 09 2009 2010 2011 YTD 09 2009 2010 2011 YTD 09 2012 2012 2012
32 Excellence in Execution Solid Financial Position
Rp 1.2 Trillion of Net Cash Position
Total Debt and Gearing Ratio Cash & Net Cash Balance
2,291 11.2% 450 12.0% 2,151 1,902 400 1,877 10.0% 350 7.9% 1,562 300 8.0% 1,373 1,322 1,257 250 1,223 6.0% 200 405 917 340 150 4.0% 2.3% 100 1.8% 141 2.0% 50 0.5% 116 25 0 0.0% FY 2008 FY 2009 FY 2010 FY 2011 YTD 09 2012 FY 2008 FY 2009 FY 2010 FY 2011 YTD 09 2012 (Audited) (Audited) (Audited) (Audited) (Unaudited) (Audited) (Audited) (Audited) (Audited) (Unaudited)
Total Debt in Rp Billion Cash and Cash Equivalent in Rp Billion Gearing Ratio Net Cash in Rp Billion
33 Excellence in Execution Innovation for a Better Life
34 Excellence in Execution 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
35 Excellence in Execution