COMPANY PROFILE 2018 Q 3 - panbrotherstbk.com · PT Teodore Pan Garmindo “TPG” PT Berkah Indo...

COMPANY PROFILE 2018 Q 3

PT. PAN BROTHERS Tbk. & SUBSIDIARIES

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PT. Pan Brothers Tbk. & Subsidiaries

CONTENTS

COMPANY OVERVIEW 3

FINANCIAL OVERVIEW 19

APPENDIX 23

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COMPANY OVERVIEW

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PT. PAN BROTHERS Tbk.Vision:TO BE AN INTEGRATED AND WORLDWIDE APPAREL SUPPLIER

• Indonesia’s largest listed garmentmanufacturer.

• Well-established business founded in1980 and listed on the Indonesia StockExchange since 1990.

• Intense focus on exports – marketsinclude US, Europe, Asia, Canada,Australia and New Zealand.

• Long-standing relationships withnumerous top global fashion and apparelbrands, while maintaining strong workethics and CSR.

• Plants located in Banten, West Java andCentral Java with 26,626 sewingmachines and a production capacity of 90millions pcs Garment annually in 2017.

• Selective expansion in both upstream anddownstream segments.

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GROUP STRUCTURE

PT. Trisetijo ManunggalUtama27.98%

PT. Ganda SawitUtama19.86%

Public52.16%

PT. Pan Brothers Tbk

PT. Pancaprima Ekabrothers (99.91%) PT. Eco Smart Garment Indonesia (85.00%)

PT. Hollit International (51.04%) Cosmic Gear Limited (51.00%)

PT. Ocean Asia Industry (51.00%) PT. Prima Sejati Sejahtera (99.00%)

Continent 8 Pte. Ltd. (51.00%) PT. Teodore Pan Garmindo (51.00%)

PT. Apparelindo Prima Sentosa (99.00%) PT. Victory Pan Multitex (51.00%)

PT. Berkah Indo Garment (99.00%)

PB. Island Pte. Ltd. (51.00%)

PB International B.V. (100.00%)

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GROUP OVERVIEW

Business Garment Manufacturing

Group Companies

PT Pan

Brothers Tbk

“PBT”

PT Pancaprima

Ekabrothers

“PPEB”

PT Eco Smart

Garment

Indonesia

“ESGI”“PSS”

PT Teodore

Pan Garmindo

“TPG”

PT Berkah Indo

Garment

“BIG”

Brief Description

• Started in

1980.

• Manufactures

woven and

cut & sewn

knits

garments,

such as

padded and

light weight

jackets,

pants, short,

casual pants,

polo shirts,

golf shirts,

track suits,

sweat suits.

• Acquired in

2005.

• Manufactures

Technical,

Functional

and Active

Wear Jackets

and Outer

Wear suited

for Snow

Boarding,

Skiing,

Jogging,

Hiking, and

other Sports

and Outdoor

Activities

• Established in

2013 as a JV

with

Mitsubishi.

• Planned to

build 6

garment

manufacturing

facilities

• 4 Facilities

already built

in 2014.

• And expansion

of ESGI

expected to

be done in

2021.

• Manufactures

woven

garments

• Established in

2014.

• Manufactures

Technical,

Functional

and Active

Wear Jackets

and Outer

Wear suited

for Snow

Boarding,

Skiing,

Jogging,

Hiking, and

other Sports

and Outdoor

Activities

• Established in

2014.

• Manufactures

cut & sewn

knits and light

woven

garments,

such as polo

shirts, golf

shirts, track

suits, sweat

suit, board

shorts, swim

shorts.

• Established in

2016.

• Manufactures

Woven Garment

such as Casual

Shirts, Tops,

Casual Bottoms,

Casual Shorts,

Denims,

Garments

Dyeing.

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GROUP OVERVIEW

Business

Group Companies

Brief Description

Product Development and Marketing

“Hollit”

PT Hollit

International

• Acquired in 2011.

• A product development company focusing on the development and creation of latest trends in styling, finishing and material.

• Also manages the collection and production of world renowned fashion brands.

Continent 8 Pte Ltd

“C8”

Cosmic Gear

Limited

“Cosmic”

• Incorporated in Singapore.

• Engages in sourcing activities that allow the group’s products to reach wider international markets.


• Incorporated in Hong Kong to help the group better cater the international market.

• Engages in product development and material sourcing.

PB Island Pte. Ltd

“PBL”

PBLPB International

B.V.

PB Fashion B.V.

“PBF”

• Incorporated in Singapore.

• Engages in sourcing activities that will allow the Group’s products to reach more international markets.


• Incorporated in Netherlands

• PBF is in the business as an agent and engages in garment trading activities. PBF was set up to support the group’s activities

in Europe.

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GROUP OVERVIEW

Business

Group Companies

Brief Description

Sewing &

Embroidery

Thread

PT Victory

Pan Multitex

“VPM”

• Established in 2014.

• Produces various Sewing and embroidery thread.

Fabric Supply

PT Ocean Asia

Industry“OAI”

• Started in 2012.

• Produces various kinds of knit fabrics, such as single knits and double knits (Single Jersey and Lycra Single Jersey, Pique and Lacoste, Fleece / French Terry Interloop / Lycra Interloop, Jacquard Jersey) and flat knits.

Retail & Others

PT Apparelindo

Prima Sentosa

“APS”

• Started in 2013 engage in apparel retail business

• Launched its women’s fashion brand, ZOE label and ZOE Black in 2013.

• JV men’s fashion brand : S n P, Asylum , F T L, etc. in 2015.

• Launched women’s brand Wastu in 2017.

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PBRX MILESTONES

2013

2007

1980

2005

2012

2011Established PBT (Cut &

Sewn Knit OEM Factory)

a) Expansion of PPEB at

Boyolali (Woven

Factory)

b) Expansion of PBT at

Sragen (Woven

Factory)

Acquired PPEB (Light &

Heavy Woven Jacket

Factory)

Set up OAI (Apparel

material

manufacturer)

a) Expansion of PBT at

Boyolali (Woven

Factory)

b) Expansion of PPEB at

Boyolali

(Woven Factory)

a) Set up APS (Apparel Retail &

Brand etc)

b) Set up ESGI (Woven Factory)

Set up Cosmic Gear

(Product Development)

2014

2016

a) Set up Berkah Indo Garment at

Ungaran and Demak (Woven

Factory)

b) Set up PB International BV

(Buying Agent and Marketing

Office )

c) TPG Tasik expansion

Acquired Hollit

(Product Development

Company))

Set up PB Island Pte. Ltd.

(Product Development)

2017

a) Set up TPG at Bandung

(Cut & Sewn Knit Factory)

b) Set up VPM at Bandung

(Sewing and Embroidery

thread)

c) Set up PSS at Boyolali

(Woven Factory)

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PT. Pan Brothers Tbk. & Subsidiaries10


INDUSTRY OUTLOOK

Strong Outlook Despite Global Uncertainties

• Textile and garment exports from Indonesia are expected to grow from US$11.9bn in 2016 (https://ekonomi.kompas.com/read/2017 /04/12/194441726/) to US$ 75.3bn in 2030.

• Proportion of Indonesian exports in total global demand to rise from 1.7% in 2016 to 5% in 2030.

Indonesian Government Support on Textile &

Garment Industry

• Economic Policy Packages issued for labor intensive industries providingcorporate & payroll tax incentives, electricity tariff discounts.

• FTA IA-CEPA with Australia expected to be signed in 2018 and with theEuropean Union expected to be signed in 2019.

• Government has expressed support to strengthen the domesticmanufacturing industry and reducing dependence on commodity basedexports

Key Asian Garment Suppliers Face Growth

Constraints

• China faces rising labor cost and lack of labor supply.

• India & Bangladesh are constrained by inadequate infrastructure and rising labor wages.

• Vietnam & Cambodia have smaller workforce relative to Indonesia and areconstrained by rising labor cost.

Indonesian Retail Outlook

• Indonesia has huge population of more than 260 Million People.

• In 2030, it is expected the middle class income earners will reach 141 miopeoples from 2016 was 74 mio peoples.

Source: KemenPerin; Index Valuation Division API Publication; Goverment Policy Package;PWC Outlook; Boston Consulting; BPS

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INTEGRATED BUSINESS MODEL

Raw Material Production

Textile Manufacturing

Apparel Manufacturing

Branded Apparel Players

Retailers

FibreProduction

Spinning, Fabric weaving, knitting,

finishing

Designing, cutting, sewing, buttonholing, ironing

Marketing and distribution

Retail Outlets

� � � �

Upstream expansion Garment Manufacturing Downstream expansion

• Actively pursuing JV / M&A /

collaboration in fabric mills (synthetic

woven fabric )sector.

• Joint Venture with Mitsubishi to set up

6 factories in Central Java area, with 4

factories already built in 2014, and

another 2 factories in 2021

• Set up Teodore Pan Garmindo in West

Java in 2014, expansion at Tasikmalaya

in 2016 and another expansion in 2018.

• Set up product development company.

• Established Apparelindo Prima Sentosa

to increase presence in apparel retail

business, with in-house brand, ZOE

Label and ZOE Black, SnP, FTL, Asylum

and Wastu.

• JV / M&A with some local brands and

multi-brand retailer.

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KEY PILLARS OF GROWTHUpstream – Backward Vertical integration

• Expansion into new sectors, such as:

• Fabric mills (synthetic woven fabric)

• Target route: JV or M&A or Collaboration with Fabric mills.

Manufacturing Expansion

• Domestic

• JV with Mitsubishi (ESGI) increasing capacity to another 21 million pcs with total 48 million pcs.

• TPG (Teodore Pan Garmindo) expansion at West Java

• Automation in some production process in all garment facilities

• Year 2019 total setup capacity expected 96million pcs.

• Regional

• Expansion to other countries to improveaccess to target markets and avail of local competitive advantages.

• Target countries: Vietnam and other prospect countries.

Downstream – Channel Expansion

• Continuous expansion of brands, ZOE Label/ ZOE Black, SnP, FTL, Asylum and Wastu.

• Joint venture with local and overseas partners for retail brands.

• Collaboration with global fashion brand.

• Planning to enter the e-commerce sector.

• Target route: JV or M&A

Process Optimalization

• Automation in some process.

• Increasing capability in garment embroidery facility, garment printing facility, and garment wash / laundry facility.

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GARMENT MANUFACTURINGProduction and distribution spread across key Asian markets

Marketing Office

Rep offices

Plants

Indonesia

Singapore

Hong Kong

Taiwan

Indonesia

Tangerang

BoyolaliSragen

UngaranDemak

Vietnam

Manufacturing Garment Capabilities in Indonesia years 2017

CategoryTotal Machines

(Units)Manufacturing

Capacity (‘000pcs)

Mix catagories (Technical , Woven Garment and Cut & Sewn Knit)

26,626 90,000

The largest garment manufacturing capabilities in Indonesia

Key production facilities

Indonesia production facilities are situated across Tangerang in Banten; Bandung and Tasikmalaya in West Java; Boyolali, Sragen, Demak, Ungaran in Central Java

Strategically positioned throughout Asia with offices in Taiwan, Singapore and Hong Kong to serve customers in regional & global markets

Maintains close proximity to both customers’ regional offices in Hong Kong and Singapore as well as key fabric suppliers in Taiwan

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Fully support by secondary process such as: Garment Embroidery facility, Garment Printing facility, Garment Wash / Laundry facility

Support by Fabric mills producing various kinds of knit fabrics; and Sewing and Embroidery Thread. factory


ACCREDITATIONS ACCREDITATIONS

�ISO 9001:2015

�ISO 14001

�WRAP

�GSV

�SA 8000

�OHSAS

�C-TPAT

�BWI

�EDGE

SA 8000 ISO 14001:2004 ISO 9001:2015

Note:

ISO 9001 : Quality Management System

ISO 14001 : Environment Management System

WRAP : Workplace Environment Management System

GSV similar to C-TPAT : Global Security Verification Program

SA 8000 : Social Accountability Management System

OHSAS 18001 : Occupational Health & Safety Management System

Member of Better Work Indonesia (BWI): On improving working conditions in the

garment industry.

EDGE : Gender Equality Certification

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EDGE GENDER EQUALITY


AWARDSAWARDS

I Asia Corporate

Excelence & Sustainablility2017

Green Industry Award 2017

Top 5 GCG in Textile & Garment Award 2018

The Top 50 Companies2017

The Best Indonesian TPT Public Company 2018

Enterprise Risk Management 2018

TOP CSR 2018on Garment and Textile Industry

Human Capital Award 2018

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The Most Innovative Material Design Award 2018

Indonesia Export Award 2018


• Providing sewing Trainers to Vocational Training Center

• Conducting Science and Technology Olympics regularly

• Awarding Scholarships to 3000 high performing High School

students from Central Java

• Awarding Scholarships to 100 University of Indonesia Students for

the bachelor degree program (2017 - 2021)

• Organizing Employment programs on Synergy investment in

association with Madrasahs and PonPes

• Receiving students on internships both technical and

management.

• Sponsoring medical trip to Papua organized by “The HOPE”

• Organizing health education through awareness programs for

cancer, HIV, etc

• Donation to victims of natural disaster in Central Java, Lombok

and Palu Sulawesi .

• Organizing blood donor camps on regular basis.

CORPORATE SOCIAL RESPONSIBILITY


CORPORATE SOCIAL RESPONSIBILITY

Organizing blood donation camps on a regular basis

Awarding PT Pan Brothers Tbkas TOP CSR 2018

Awarding Scholarships to 3000 high performing students from Central Java High Schools (2014 – 2017)

Awarding Scholarships to 100 University of Indonesia Students for the bachelor’s degree program (2017 – 2021)

Organizing employment programs on Synergy investment in association with Madrasahs and PonPes

Sponsoring medical trip to Papua organized by “The Hope”

Donating to Lombok Earthquake 2018 Donating to Palu Sulawesi 2018 Eartquake and Tsunami

Donating to victims of natural disasters in Central Java


FINANCIAL OVERVIEW


GLOBAL PRESENCE – BY SALES

2013 2014 2015 2016 2017

30.46% 25.47%28.29%

26.40% 26.00%

30.43%

28.97% 19.88% 16.83% 16.78%

38.78%44.44%

50.79%55.70% 52.63%

0.33% 1.12% 1.05% 1.07% 4.59%

OTHERS

ASIA

EUROPE

USA


FINANCIAL HIGHLIGHTS

SALES (US$m) GROSS PROFIT (US$m) / SALES

338.5 418.6

482.2 549.4

447.1

2014 2015 2016 2017 Q3 2018

39.6 53.6

65.3 76.6

62.1

2014 2015 2016 2017 Q3 2018

(%) 11.7% 12.8% 13.5% 13.9%

EBITDA (US$m) / SALES NET PROFIT (US$m) / SALES

21.7 28.5

38.9 42.2 40.6

2014 2015 2016 2017 Q3 2018

9.3 8.6

13.3

7.8

12.1

2014 2015 2016 2017 Q3 2018

(%) 6.4% 6.8% 8.1% 7.7% 9.1% (%) 2.8% 2.1% 2.8% 1.4% 2.7%

13.9%


FINANCIAL HIGHLIGHTS

TOTAL DEBT & CASH (US$m) DEBT / EQUITY (x)

95.4

140.4

205.4

240.0 276.6

127.8

73.6 78.4 79.6 78.9

2014 2015 2016 2017 Q3 2018

0.5

0.7

0.9 1.0

1.1

2014 2015 2016 2017 Q3 2018

Total Cash

Total Debt

TOTAL ASSETS (US$m) OUTSTANDING SHARES (mn shares)

367.3

442.8

519.5 573.4

603.6

2014 2015 2016 2017 Q3 2018

6,478.30 6,478.30 6,478.30 6,478.30 6,478.30

2014 2015 2016 2017 Q3 2018


APPENDIX


SUMMARY – Income Statement(US$m) 2014 2015 2016 2017 Q3 2018

Net sales 338.5 418.6 482.2 549.4 447.1

% growth 99.6 123.6 115.2 113.9

COGS (299) (365) (416.9) (472.7) (385.0)

% of sales (88.3) (87.2) (86.4) (86.1) (86.1)

Gross profit 39.6 53.6 65.3 76.6 62.1

% margin 11.7 12.8 13.5 13.9 13.9

Selling expenses (5.3) (8.5) (13.3) (17.3) (9.2)

% of sales (1.6) (2.0) (2.7) (3.2) (2.1)

G&A (20.8) (28.0) (29.9) (31.3) (22.9)

% sales (6.1) (6.7) (6.2) (5.7) (5.1)

Operating profit 13.4 17.1 22.0 28.0 30.0

% margin 3.9 4.1 4.5 5.1 6.7

% growth 74.0 127.5 112.2 127.4

Net interest expense (0.9) (3..8) (6.3) (15.5) (14.8)

Other income (expenses) 1.5 (1.8) 2.6 (1.6) (0.6)

Profit before tax 12.9 11.5 18.3 11.0 15.8

Income tax expense (3.6) (2.9) (4.9) (3.1) (3.7)

Profit for the year 9.3 8.6 13.3 7.8 12.1

% margin 2.7 2.0 2.8 1.4 2.7

% growth 96.7 92.4 154.1 58.8

Net Profit (Loss) attributable to equity holders

9.6 9.4 14.6 9.3 11.2

% margin 3.0 2.2 3.1 1.7 2.5


SUMMARY – Balance Sheet

(US$m) 2014* 2015 2016 2017 Q3 2018

Cash and bank balances 127.8 73.6 78.3 79.6 78.9

Trade receivables 51.8 65.7 80.5 95.6 105.1

Inventories 67.4 88.6 101.6 119.4 130.1

Other current assets 37.2 82.6 126.2 144.4 157.5

Total current assets 284.2 310.6 386.6 439.0 471.6

Tangible assets 75.8 122.9 123.4 121.3 118.8

Intangible assets 3.2 3.1 4.9 5.1 5.1

Other 4.1 6.3 4.6 7.9 8.0

Total non-current assets 83.0 132.3 132.9 134.3 132.0

Total assets 367.3 442.8 519.5 573.4 603.6

Short-term borrowings 12.4 5.5 15.9 1.8 1.9

Trade payables 48.8 60.4 57.9 59.2 48.4

Other current liabilities 13.2 20.4 28.9 34.9 27.7

Total current liabilities 74.4 86.3 102.7 95.8 78.0

Long-term borrowings (Syndication, Bonds, Etc) 82.9 134.9 182.2 237.0 273.6

Other long-term liabilities 8.5 5.7 6.9 5.7 5.3

Total non-current liabilities 91.4 140.6 189.1 242.7 278.9

Total liabilities 165.8 226.9 291.8 338.6 356.9

Shareholders' funds

Total shareholders' funds 186.2 197.0 210.7 220.3 231.9

Non-controlling interest 15.3 18.9 16.9 14.5 14.8

* As restated on PSAK No.24 (Revised 2013)


RETAIL

Z O E label

ZOE label side with STYLE over trends, thinkTIMELESS is never outdated. ZOE label don’tbelieve MINIMALISM as underdressed – ZOElabel is confident to let our personality shinesand use our clothes to enhance it. For us, thecharm is in the MIX. The essence isEFFORTLESS CHIC.

ZOE label is an INDONESIAN BRAND, but ZOElabel source our fabrics from around theworld. Our design, sourcing & productionteams serve not us only, but also well-knowninternational brands. ZOE label take pride inour VALUE & QUALITY.

� Website: www.zoelabel.com

� Instg: @ zoethelabel


RETAIL

Founded in 2017, Wastu is an Indonesian

brand specializing in the elegantly

understated piece and crafted from the ideas

of an Indonesian fashion designer, Auguste

Soesastro. Taken from Javanese Sanskrit,

Wastu means 'Architecture', which has been

Auguste's interest and has inspired him to

harmonize architectural lines, geometry, and

structures into wearable items. Wastu

embodies a way of life in stylish collections

affordable for any budget.

� Website: www.shopwastu.com

� Instg: @wastu_studio


RETAIL

Salt n Pepper is a contemporary men casualbrand for upper middle class.

Inspired by designs and trends in the USA andEurope, Salt n Pepper is tailored to bring thelatest trends in a perfect fitting for Asian sizes.

It’s a catchy brand, unisex, global meaning andeasy for people to remember

Just like how food is tasteless without salt andpepper, we believe that clothes need to havedetails added to make it look great

Other brands are FTL and Asylum

Website: http://saltnpepperstore.com/

Instg: @saltnpepper_id and @asylumintl


GARMENT MAKING PROCESS

Warehouse Fabric Inspection Lab Test

CuttingSewing

Inspection Metal Detection Embroidery/Print


PT. Pan Brothers Tbk.Address : Jl. Siliwangi No. 178, Jatiuwung, Tangerang 15133, Indonesia

Phone : 6221-5900 718 Fax : 6221-5900 717

Email : [email protected]/ [email protected]/ [email protected]

Website : www.panbrotherstbk.com


STRICLY PRIVATE AND CONFIDENTIALDISCLAIMERThis document is intended to be general information for discussion purposes only and does not create any legally binding obligations on the part of PBRX. The informationcontained in this document is based on materials we believe to be reliable, however we do not represent that it accurate, current, complete, or error free. Information inthis document constitute our judgment as of the period of preparing the document and are subject to change without notice. Any opinion in this information may notnecessarily represent the opinion of PBRX or any entity in the PBRX and Group. Any person and entity receiving this information shall treat the information as confidentialand not misuse, copy, disclose, or distribute, in whole or in part, without PBRX express written permission. PBRX disclaims all liability for any direct, indirect, consequentialor other losses or damages incurred by anyone that may arise from any reliance on this document or for the reliability, accuracy, completeness or timeliness thereof.

COMPANY PROFILE 2018 Q 3 - panbrotherstbk.com · PT Teodore Pan Garmindo “TPG” PT Berkah Indo...

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