Not all collagen is the same, it’s time to choose the right one
Analyst Gathering
February 2015 Table of Contents
MACRO OVERVIEW 3
BUSINESS OVERVIEW 6
INDICATIVE 2014 RESULTS & 2015 OUTLOOK 14
Excellence in Execution 2 Not all collagen is the same, it’s time to choose the right one
Section 1 Macro Overview Macro Overview
2014 Macro highlights 2015 Macro outlook
Weakening Rupiah, but with less ASEAN Economic Community volatility Rupiah – US Dollar (Exchange Rates on Transaction)
12.5%*
• International expansion opportunities • Non tariff barriers in pharma industry *based on average Rising inflation of 8.36% (yoy) Inflation reached 8.36% (y-o-y) triggered by Infrastructure improvement in longer term fuel price increase on Nov 2014 Political uncertainty 4 Legislative Election & Presidential Election
Excellence in Execution Healthcare Industry
The new national health insurance roll-out
2014 Highlights • JKN covered more than 133 million people, higher than targeted coverage of 120 million people 2015 Outlook • Integration of formal sector workers into JKN • Discussion of Coordination of Benefits(COB)
JKN has been implemented since Jan 1, 2014. Increased health spending in 2015 government budget 67.5 71.1 JKN Coverage *in trillion Rp 3.5% of 52.7 46.6 Gov’t 41.0 Budget 33.0 2019 2015 Target Target 250 2014 170 million 133 million people million people 2010 2011 2012 2013 2014 2015 people (APBNP) (APBN)
Excellence in Execution Not all collagen is the same, it’s time to choose the right one
Section 2 Business Overview Strategic Intent
We are an Innovative Health Care Business providing Health Care Products & Its WBAWI Related Services
Mission To improve health for a better life
To be the best Indonesian Global Health Care company driven by innovation, strong Vision brands and excellent management
1.Sustainable Growth Strategy 2.Innovation & Productivity 3.World Class Competence & Organization
We believe in : Trust, Mindfulness, Innovation, Strive to be the Values best, Interconnectedness
Excellence in Execution 7 Our Strategies
1. Strengthen business portfolio through innovation and M&A
2. Improve marketing and sales effectiveness
CORPORATE BRANDING
Morinaga Mall to Mall 2014, Diabetasol 3J Campaign attracting more than 288,000 & Healthy Activities in visitors World Diabetes Day
Excellence in Execution 8 Our Strategies 3. Accelerate “Go Global” implementation
4. Develop future leaders with competence and “Kalbe Panca Sradha” character
Kalbe Middle Kalbe Learning Management Center Program
5. Strengthen quality assurance, compliance, and corporate social responsibilities
Excellence in Execution 9 2014 Key Achievements & Activities
Strengthening production and distribution network
Started commercial production of Upgraded distribution facilities oncology production facilities at Pulogadung
Bandar Lampung
Tangerang Increased production lines and capacities
Surabaya
Excellence in Execution 10 2014 Key Achievements & Activities
Strengthening product portfolio through innovation
New Product Launches Research & Development
Stem Cell and Cancer Institute
Excellence in Execution 11 2014 Key Achievements & Activities
International expansion
Fitbar TV Commercial Diabetasol Product Sampling Woods Winter Wholesale Displays
Philippines South Africa
Extra Joss Cup Procold Booth & Sponsorship Mixagrip Store Mixagrip Taxi Branding Kalbe Ethical Product Booth - Branding Medical Forum
Excellence in Execution 12 2014 Key Achievements & Activities
Getting closer to our consumers
Integrated Service to Consumers Direct to Consumer (DTC) Activities 2014
Kalbe Customer Care Kalbe Home Delivery Kalbe e-Store
KALCare Experiential Store Kalbe Family Rewards Card Morinaga Entrasol Mobile Application Utilization
KalbeMed Mommychi Diabetes Solution Fatigon Hydro Coco Mobile Application Mom & Child Center Mobile Mobile Application Application
Excellence in Execution 13 Not all collagen is the same, it’s time to choose the right one
Section 3 Indicative 2014 Results & 2015 Outlook Consolidated Sales
Consistent Top Line Growth of Internal Kalbe Products
Net Sales (in Rp Bn)
+8.5% 31 Dec 2013 31 Dec 2014 (Audited) (Unaudited) 17,365 16,002 +20.8% +16.7% +11.9% -5.2%
5,836 5,531 4,581 3,869 4,329 3,792 2,505 2,924
Prescription Consumer Health Nutritionals Distribution & Consolidation Pharmaceuticals Logistics
Excellence in Execution 15 Consolidated Operating Performance
Stable Operating Margin
Gross Profit Margin Operating Expenses to Net Sales Ratios + 10.4% 48.0% 48.8% 32.1% 32.9% 7,679 8,474 0.8% 0.8% 4.8% 5.2% Selling & Marketing 31 Dec 2013 31 Dec 2014 (Audited) (Unaudited) 26.4% 26.9% General & Operating Profit Margin Administrative + 8.0% Research & 15.9% 15.9% Development 2,549 2,754 31 Dec 2013 31 Dec 2014 (Audited) (Unaudited)
• Intensive marketing efforts to drive brand awareness • R & D to support product development 31 Dec 2013 31 Dec 2014 (Audited) (Unaudited)
Excellence in Execution 16 Consolidated Net Earnings
Consistent Earnings Growth
Income Before Tax Net Income (in Rp bn) (in Rp bn) + 7.0% 15.9% 16.1% +6.9 % 2,753 2,573 12.0% 11.8% 1,920 2,051
31 Dec 2013 31 Dec 2014 31 Dec 2013 31 Dec 2014 (Audited) (Unaudited) (Audited) (Unaudited)
• Income before tax margin declined from 16.1% in FY 2013 • Net income margin declined from 12.0% in FY 2013 to to 15.9% in FY 2014 mostly due to higher interest expense 11.8% in FY 2014. and miscellaneous expenses.
Excellence in Execution 17 Working Capital Management
Improving Days of Inventory
Improving inventory level due 158 to stabilizing raw material price No. of days in 2014 129 131 129 120 108 142 114 132 122 126 110 115 107 Net Operating Cycle has been decreased by 29 days from 158 50 48 48 49 days in 2008 to 129 days in 43 45 44 2014 45 57 50 38 35 41 27 End-to-end supply chain 31 Dec 2008 31 Dec 2009 31 Dec 2010 31 Dec 2011 31 Dec 2012 31 Dec 2013 31 Dec 2014 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) management would be continuously implemented to Days of Account Receivables Days of Inventories overcome any fluctuation in Days of Account Payables Net Operating Cycle inventory
Excellence in Execution 18 Solid Financial Position
Rp 1.62 Trillion of Net Cash Position
Total Debt and Gearing Ratio Cash & Net Cash Balance 2,291 2,151 1,919 1,902 1,877 1,860 1,623 1,562 1,655 1,426 600 15.0% 1,222 500 Total Debt in Rp Billion 7.9% 7.2% 843 400 Gearing Ratio 10.0% 300 2.3% 2.9% 3.2% 200 0.5% 5.0% 100 340 25 141 205 584 296 0 0.0% 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 (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 994 783 852 60% 20.0 51% 51% 80% 15.0 42% 60% 470 469 26% 10.0 19.0 19.0 40% 278 14.0 17.0 5.0 5.0 20% 0.0 0% 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2014 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Unaudited) Cash Dividend* (Rp/share) Dividend Payout Ratio (%) *For Fiscal Year *Cash dividend are adjusted for stock split impact
Excellence in Execution 19 Outlook 2015
Earnings Guidance 2015 *
1. Year-on-year Sales Growth 11% - 13% 2. Operating Profit Margin 16% - 17% 3. Earnings per Share growth of 14% - 16% 4. Dividend payout ratio minimum 50%
* Excluding the impact of product recall
Capex Rp 1 – 1.3 Tn for production capacity and distribution network expansion.
Excellence in Execution 20 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 21