STRATEGIC DIRECTION 2011 - KALBE GROUP

Not all collagen is the same,

it’s time to choose the right one

Analyst Gathering

February 2015

Excellence in Execution

Table of Contents

2

BUSINESS OVERVIEW 6

INDICATIVE 2014 RESULTS & 2015 OUTLOOK 14

MACRO OVERVIEW 3

Section 1



Macro Overview


2014 Macro highlights

Macro Overview

4

Rupiah – US Dollar

(Exchange Rates on Transaction)

Weakening Rupiah, but with less

volatility

2015 Macro outlook

Rising inflation of 8.36% (yoy)

Political uncertainty

Inflation reached 8.36% (y-o-y) triggered by

fuel price increase on Nov 2014

Legislative Election &

Presidential Election

Infrastructure improvement in longer term

ASEAN Economic Community

• International expansion opportunities

• Non tariff barriers in pharma industry*based on average

12.5%*


133 million people

Target 170 million people

Target 250 million people

The new national health insurance roll-out

Healthcare Industry

JKN has been implemented since Jan 1, 2014.

JKN Coverage

2015 Outlook

• Integration of formal sector workers into JKN

• Discussion of Coordination of Benefits(COB)

2014 Highlights

• JKN covered more than 133 million

people, higher than targeted coverage of

120 million people

Increased health spending in 2015

government budget

33.041.0

46.652.7

67.571.1

2010 2011 2012 2013 2014 (APBNP)

2015 (APBN)

3.5% of

Gov’t

Budget

*in trillion Rp

20192015

2014

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Section 2

Business Overview

Excellence in Execution 7

Strategic Intent

WBAWI

To be the best Indonesian Global Health Care company driven by innovation, strong brands and excellent management

To improve health for a better life

We are an Innovative Health Care Business providing Health Care Products & Its Related Services

1.Sustainable Growth

2.Innovation & Productivity

3.World Class Competence & Organization

Mission

Vision

Strategy

Values We believe in : Trust, Mindfulness, Innovation, Strive to be the

best, Interconnectedness


1. Strengthen business portfolio through innovation and M&A

Our Strategies

8

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


5. Strengthen quality assurance, compliance, and corporate social responsibilities

Our Strategies3. Accelerate “Go Global” implementation

4. Develop future leaders with competence and “Kalbe Panca Sradha” character

Kalbe Middle

Management

Program

Kalbe Learning

Center


2014 Key Achievements & Activities

Upgraded distribution facilitiesStarted commercial production of

oncology production facilities at Pulogadung

Increased production lines and capacities

Bandar Lampung

Tangerang

Surabaya

Strengthening production and distribution network


Strengthening product portfolio through innovation

11

New Product Launches Research & Development


Stem Cell and

Cancer Institute


International expansion

12


Extra Joss Cup Procold Booth & Sponsorship Mixagrip Store

Branding

Mixagrip Taxi Branding Kalbe Ethical Product Booth -

Medical Forum

Fitbar TV Commercial Diabetasol Product Sampling Woods Winter Wholesale Displays

Philippines

Nigeria Myanmar Vietnam

South Africa


Getting closer to our consumers


13

Kalbe e-Store

Kalbe Home Delivery

Kalbe Family Rewards CardKALCare

Experiential Store

Kalbe Customer Care

Integrated Service to Consumers

KalbeMed

Mobile Application

Mommychi

Mom & Child

Mobile Application

Mobile Application Utilization

Diabetes Solution

Center Mobile

Application

Direct to Consumer (DTC)

Activities 2014

Morinaga Entrasol

Fatigon Hydro Coco



Section 3

Indicative 2014 Results

& 2015 Outlook


3,869 2,505

3,792

5,836

16,002

4,329 2,924

4,581 5,531

17,365

Prescription Pharmaceuticals

Consumer Health Nutritionals Distribution & Logistics

Consolidation

31 Dec 2013 (Audited)

31 Dec 2014(Unaudited)

Consolidated Sales

15

Consistent Top Line Growth of Internal Kalbe Products

+11.9%+16.7%

+20.8%

-5.2%

+8.5%

Net Sales (in Rp Bn)


48.0% 48.8%



8,474

26.4% 26.9%

4.8% 5.2%0.8% 0.8%



Selling & Marketing

General & Administrative

Research & Development

15.9% 15.9%



2,754

Consolidated Operating Performance

16

Stable Operating Margin

• Intensive marketing efforts to drive brand awareness

• R & D to support product development

Gross Profit Margin Operating Expenses to Net Sales Ratios

32.1% 32.9%

Operating Profit Margin

7,679

2,549

+ 10.4%

+ 8.0%


2,573 2,753



1,920 2,051



• 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.

Consolidated Net Earnings

17

Consistent Earnings Growth

Income Before Tax

(in Rp bn)

Net Income

(in Rp bn)

+ 7.0%

• Net income margin declined from 12.0% in FY 2013 to

11.8% in FY 2014.

+6.9 %16.1% 15.9%

12.0% 11.8%


43 45 44 50

48 48 49

142

122 110 115 107

132 126

27 38 35

57 41

50 45

158

129 120 108 114

131 129







31 Dec 2014 (Unaudited)

Days of Account Receivables Days of Inventories

Days of Account Payables Net Operating Cycle

Working Capital Management

18

Improving Days of Inventory

End-to-end supply chain

management would be

continuously implemented to

overcome any fluctuation in

inventory

Net Operating Cycle has been

decreased by 29 days from 158

days in 2008 to 129 days in

2014

Improving inventory level due

to stabilizing raw material price

in 2014No. of days


Solid Financial Position

19

Total Debt and Gearing Ratio Cash & Net Cash Balance

Rp 1.62 Trillion of Net Cash Position

Dividend Payment Capital Expenditure

* Capital Expenditure in Rp Billion

340 25 141 205 584 296

7.9%

0.5%2.3% 2.9%

7.2%

3.2%

0.0%

5.0%

10.0%

15.0%

0100200300400500600

2009 (Audited)

2010 (Audited)

2011 (Audited)

2012 (Audited)

2013 (Audited)

2014 (Unaudited)

Total Debt in Rp Billion

Gearing Ratio

1,562 1,902

2,291 1,860

1,426

1,919

1,222

1,877 2,151

1,655

843

1,623

2009 (Audited)

2010 (Audited)

2011 (Audited)

2012 (Audited)

2013 (Audited)

2014 (Unaudited)

Cash and Cash Equivalent in Rp Billion Net Cash in Rp Billion

5.014.0

19.0 19.0 17.0 26%

51%60%

51%42%

0%20%40%60%80%

0.05.0

10.015.020.0

2009 (Audited)

2010 (Audited)

2011 (Audited)

2012 (Audited)

2013(Audited)

Cash Dividend* (Rp/share) Dividend Payout Ratio (%)

278 470 469

783 994

852

2009 (Audited)

2010 (Audited)

2011 (Audited)

2012 (Audited)

2013(Audited)

2014 (Unaudited)

*For Fiscal Year *Cash dividend are adjusted for stock split impact


Capex Rp 1 – 1.3 Tn for production capacity and distribution network expansion.

Outlook 2015

20

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%

Earnings Guidance 2015 *

* Excluding the impact of product recall


THANK YOUFor 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

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STRATEGIC DIRECTION 2011 - KALBE GROUP

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