STRATEGIC DIRECTION 2011 - KALBE GROUP

UBS Global Consumer Conference
Boston, March 2013
Excellence in Execution
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 31 December 2012 indicative 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 31 December 2012 indicative 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.
Excellence in Execution
2
Table of Contents
BUSINESS OVERVIEW 2012
OUR STRATEGIES IN 2013
Excellence in Execution
4
22
3
BUSINESS OVERVIEW
2012
Excellence in Execution
4
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 December 2012 is as
follows:
Export, 4%
Distribution &
Logistics
38%
Prescription
Pharmaceuticals
24%
Domestic, 96%
Nutritionals
22%
Total Sales = Rp 13.630 Bn
Consumer Health
16%
Total Sales = Rp 13.630 Bn
• Over 10,000 employees and a marketing and sales force of 4,000 covering 80% of the
Indonesian consumer health and 100% of the Indonesian prescription pharmaceuticals
market
Excellence in Execution
5
Indonesia’s Health Spending Trends
•
Total expenditure on health averaged 2.1% of
GDP over the 11 year period 1999-2009.
In Q4 2009, the new Healthcare Law has been
approved and provides guideline for Government
to increase the healthcare spending from 2% up
to 5% of GDP.
Healthcare Expenditure/GDP 2010
4.8%
5.00%
•
1
4.50%
4.1%
3.8%
4.00%
1
3.5%
3.3%
3.50%
0
3.00%
2.50%
2.1%
0
2.00%
0
1.50%
1.00%
•
0
0.50%
Law on National Social Security System has
been passed since 2004, but implementation
regulation on Social Security Provider Body
(BPJS) has just been passed in October 2011.
There will be two BPJS: BPJS Health (Jan 1,
2014) and BPJS Labor (Jul 1, 2015).
0.00%
0
Malaysia
Thailand
Philippines
India
Singapore
Indonesia
Source : Business Monitor International: Pharmaceutical & Healthcare Report, Q3 2011
(Indonesia, Malaysia, Thailand, Philippines, India, Singapore)
Share of Total Health Expenditure (%) 1999-2009
70
60
Total Healthcare Expenditure
300.0
250.0
1.2
(Rp Tn)
247
Growth of 14.1%
221
196
200.0
133
150.0
100.0
86
101
40
1
0.8
173
153
0.6
116
0.4
50.0
50
30
20
1999
2000
2001
public
2002
2003
private
2004
2005
2006
2007
0.2
-
0
2007
2008
2009
2010
2011F
2012F
2013F
2014F
Source: The World Bank
2015F
Source : Business Monitor International: Pharmaceutical & Healthcare Report, Q3 2011
(Indonesia, Malaysia, Thailand, Philippines, India, Singapore)
Excellence in Execution
2008
out-of-pocket private
6
2009
Indonesian Pharmaceuticals Market
Highly Fragmented Industry with more than 200 Pharmaceutical Players
Total Market (ITMA)
YTD 12 2011
KALBE
GROUP
13%
a
5%
b
5%
c
5%
d
5%
e
4%
OTHERS
60%
Total Market = Rp 43.1Tn
Pharmacy (IPA)
YTD 12 2011
f
3%
KALBE
GROUP
8%
a
7%
b
6%
c
5%
d
4%
Hospital (IHPA)
YTD 12 2011
e
4%
OTHERS
63%
Total Market = Rp 7.9Tn
f
3%
KALBE
GROUP
9%
a
7%
b
7%
c
5%
d
4%
f
4%
OTHERS
60%
Total Market = Rp 13.8Tn
Source : IMS Health Prescription Pharmaceuticals YTD 12 2011(Ethical + OTC)
Excellence in Execution
e
4%
7
Prescription Pharmaceuticals Division
Comprehensive Product Range Targeted to All Income Groups
Sales Contribution By
Product Categories
YTD 09 2012
Licensed
Products
Licensed
Products
32%
Unbranded
Generics
10%
Number of
Products
Branded
Generics
58%
Total Sales = Rp 2,412 Bn
Branded
Generics
Unbranded
Generics
89
254
40
Therapeutic Class
• General Anti-Infectives
• Hospital Solutions
• Oncology
• Blood and Blood Forming Organs
• Musculo-Skeletal System
• Alimentary Tract and Metabolism
• General Anti-Infectives
• Central Nervous system
• Musculo-Skeletal System
• Cardiovascular System
• Alimentary Tract and Metabolism
• General Anti-Infectives
• Alimentary Tract and Metabolism
• Cardiovascular System
• Central Nervous system
Key Licensors
Excellence in Execution
8
Prescription Pharmaceuticals Division
New Production Facilities
• Completed new
production facility for
generic drugs in
Cikarang
• Construction of
oncology plant
in Pulogadung
Excellence in Execution
9
Consumer Health Division
Strong Brand Equity with Leading Market Position
Market share of Kalbe’s brands YTD December 2011
Therapeutic Class
Kalbe’s Products
Antacid
Promag, Waisan
77.4%*
Anti Diarrhea
Neo Entrostop
44.8%**
Cough Remedies
Komix, Woods, Mextril, Mixadin
39.1%
Cold Remedies
Mixagrip Reg, Mixagrip FB, Procold
35.9%
Multivitamin & Vitamin C
Cerebrovit, Fatigon, Sakatonik Liver,
Xon-Ce
42.2%
Children Multivitamin
Cerebrofort, Sakatonik ABC
21.1%
Energy Drink
ExtraJoss
23.8%
Market Share by Volume
Source : AC Nielsen jaguar method, based on volume (unit)
Note : * urban data only
** based on AC Nielsen August 2010
Excellence in Execution
10
Nutritionals Division
Complete Range of Nutritional Products
• Catered to expecting & lactating mothers, babies, toddlers, children, tweens and adults.
Expecting
Lactating
Excellence in Execution
Baby
Toddler
Kid
Tween
Teen
25+
35+
Clinical
11
Nutritionals Division
Relatively Low Milk per Capita Consumption
Milk per Capita Consumption (kg)
-2.3%
40
35
30
25
20
1.6%
15
10
0.5%
2.7%
0
1.6%
1.1%
5
Indonesia
Thailand
Philippines
Malaysia
Vietnam
South Korea
2006
2.29
13.55
1.48
7.49
2.71
35.7
2007
2.39
12.28
1.51
8.15
2.39
34.92
2008
2.5
12.94
1.31
7.75
2.72
35.83
2009
2.57
13.68
1.52
7.46
2.87
35.73
2010
2.58
13.74
1.51
7.51
2.76
30.83
2011
2.63
14.34
1.55
7.61
2.85
30.61
2012
2.68
14.92
1.58
7.73
2.98
30.99
Source: FAPRI (Food & Agricultural Policy Research Institute) for whole milk powder, liquid milk and non fat dry milk categories
2006 – 2010 = Real Data; 2011 – 2012 = Projection
Note : %growth represents 6 years (2006-2012) CAGR
Excellence in Execution
12
Business Overview 2012
• Launched new innovative products
• Acquisition of PT Hale International
• Established a joint venture company PT Kalbe Milko Indonesia
Excellence in Execution
13
Nutritionals Division
Multi Channel Customer Touch Points
Kalbe e-store - the 1st Online Nutrition Store in Indonesia
Nutritionals Division launched new channel of consumer order through hotline service Kalbe Home
Delivery 500-880 and online shopping through www.kalbestore.com . Kalbe Family Reward Card offers point
rewards for consumers to increase Kalbe products consumption.
Excellence in Execution
14
Distribution & Logistics Division
The Most Extensive Distribution Network
Excellence in Execution
RDC
Branches
Cities
2
65
47
15
Distribution & Logistics Division
Major Third Party Principals by Category
• Expansion of distribution and logistics facilities
Banjarmasin
Jember
Surakarta
Banda Aceh
Denpasar
• Multi-channel customer touch points : Kalbe e-store, Kalbe Family
Rewards Card, Kalbe Home Delivery, Kalbe Customer Care
• Continued to improve retail health service business model :
Mitrasana Clinic
•
•
4-in-1 concept : family doctor, pharmacy, laboratory, and convenient store.
To date, Kalbe has opened 39 Mitrasana clinics in Jakarta and its Greater Area.
Excellence in Execution
16
Distribution & Logistics Division
Major Third Party Principals by Category
Prescription
Pharmaceuticals
Excellence in Execution
Consumer
Medical Instrument
& Diagnostic
Fine Chemical
Raw Materials
17
International Overview 2012
• Continued regional expansion
Long-lasting kick
Excellence in Execution
Diabetasol and Extra Joss Events in the Philippines
18
Indicative Results 2012
Strong Top Line Growth in All Segments
Net Sales (in Rp Bn)
24.9%
31 Dec 2011 (Audited)
13,630
31 Dec 2012 (Unaudited)
10,912
33.7%
18.4%
2,778
16.8%
3,288
1,842
2,151
Prescription PharmaceuticalsConsumer Health
Excellence in Execution
24.5%
5,179
2,420
3,012
Nutritionals
3,873
Distribution & Logistics
Consolidation
19
Indicative Results 2012
Improved operating expenses efficiency
Gross Profit Margin
- 3.0%
50.9%
Operating Expenses to Net Sales Ratios
32.8%
0.8%
5.4%
31.6%
-1.2%
0.7%
4.9%
Selling & Marketing
47.8%
26.6%
26.0%
General &
Administrative
Research &
Development
31 Dec 2011
(Audited)
31 Dec 2012
(Unaudited)
• Gross Profit Margin decreased by 3.0% mostly
due to change in business mix.
Excellence in Execution
31 Dec 2011
(Audited)
31 Dec 2012
(Unaudited)
• Improved Operating Expenses to Net Sales Ratio by
1.2% due to strong sales growth.
20
Indicative Results 2012
Strong Earnings Growth
Income Before Tax
Net Income
(in Rp bn)
(in Rp bn)
+15.1%
2,288
1,987
31 Dec 2011 (Audited) 31 Dec 2012 (Unaudited)
• Income before tax margin declined from
18.2% in 2011 to 16.8% in 2012
Excellence in Execution
+16.8%
1,732
1,482
31 Dec 2011 (Audited) 31 Dec 2012 (Unaudited)
• Net income margin declined from 13.6% in 2011
to 12.7% in 2012.
21
OUR STRATEGIES
IN 2013
Excellence in Execution
22
Strategies for 2013
1. Improve marketing and sales effectiveness
CORPORATE
BRANDING
2. Strengthen business portfolio through innovation and M&A
Excellence in Execution
23
Strategies for 2013
3. Go global – deeper ASEAN penetration
with more product offering
4. Expand distribution coverage
New RDC
New branches and
existing branch
capacity
expansion
Additional trucks
& motorcycles
5. Enhance human capital development
Excellence in Execution
24
Outlook 2013
Earnings Guidance 2013
1. Year-on-year Sales Growth 15% - 18%
2. Operating Profit Margin 16.0% -17.0%
3. Earnings per Share growth of 15% - 18%
4. Dividend payout ratio minimum 50%
•
Capex Rp 1 – 1.5 Tn for production capacity and distribution network expansion
•
Cancellation of Treasury Stocks - subject to shareholders’ approval in EGMS in May 2013
Excellence in Execution
25
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
jhandajani@kalbe.co.id
investor.relations@kalbe.co.id
Website
: www.kalbe.co.id
Excellence in Execution
26