New solution for sore throat Company Update Unaudited YTD September 2015 October 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 30 September 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 30 September 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 New solution for sore throat 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 September 2015 is as follows: Prescription Export Distribution & 5% Logistics Pharmaceuticals 30% 24% Domestic Consumer 95% Health Nutritionals 18% 28% Total Sales = Rp 13,128 Bn Total Sales = Rp 13,128 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 facility came on 1981: 1995: Jaya stream 1994: Spin-off the Disposed of 50% Established a joint ♦ Acquired PT Hale 2014: distribution Entered 2006: venture company, Asiawide 1991: of food 2005: International Completion of 1966: business to PT energy drink business (PT Scale through Kalbe Philippines Inc. Kalbe Farma Consolidation ♦ Established a joint Kalbe’s Company Enseval due to business Bukit Manikam mergers and Inaugurated Panca Sradha IPO of Kalbe venture company PT oncology founded government EPMT IPO Sakti) to acquisitions Kalbe as our Corporate Group Kalbe Milko factory regulation Arnotts Values Indonesia 1966 1977 1981 1985 1989 1991 1993 1994 1995 1997 2005 2006 2007 2010 2011 2012 2013 2014 1977: 1997: 2007: 2011: 2013: 1985: 1989: 1993: Strengthen Disposed of Kalbe’s Launch of new corporate EPMT Rights Issue Cancellation pharma Expansion Igar Jaya Strengthening remaining 50% logo as part of to finance of the business by to consumer and nutritionals ownership in PT Bukit transformation process expansion Company’s health business by establishing Dankos Manikam Sakti to Products entered every Increased dividend Treasury Dankos Lab through IPOs acquiring Arnotts ASEAN countries (except payout ratio to 50% Stocks 0f 7.7% acquisition Sanghiang Perkasa Disposed glass Laos) of Bintang and consolidating packaging division to nutritional Opening of the Stem Cell Toedjoe Schott and Cancer Institute and in business to Acquired Woods Implementation of end-to- pharma Sanghiang Perkasa Peppermint brand end supply chain through Acquired 80% of Saka management 1600 Hexpharm 20,000 Farma Integrated information Jaya 1400 technology systems acquisition 1200 15,000 1000 bn) (IDR 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 New solution for sore throat Not all collagen is the same, it’s SECTION 2 time to choose the right one Market Overview Indonesia’s Health Spending Trends Healthcare Expenditure/GDP 2013 (%) • Low healthcare expenditure to GDP ratio. • 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 Unbranded 49,4 CAGR 16% 37,0 41,7 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 • 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 Decree No. 63 Year 2014 regarding Drug Procurement based on e-Catalogue • Procurement for National Health Care Insurance is conducted through electroning purchasing method based on e- Catalogue. BPJS Kesehatan Director of Operation’s Circular No. 32 Year 2015 regarding Coordination of Benefit • Regulating coordination of benefit (COB) mechanism for National Healthcare Insurance members with participating private health insurance. Price Caps on Key Generic Drugs Ministry of Health Decree No. 436 /Menkes/SK/XI/2013 • 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 • Prohibits foreign pharmaceutical companies from registering