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