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Consistent Growth In Kalbe’s Core Businesses

Consistent Growth In Kalbe’s Core Businesses

Press Release No. 005/KFCP-DIR/PR/III/15

Jakarta, March 30, 2015 – PT Kalbe Farma Tbk and its subsidiaries (“Kalbe” or “the Company”) today announced the Company’s performance for the year 2014 based on the audited consolidated financial statement for the year ended December 31, 2014. Consolidated sales reached Rp 17.4 Trillion for year 2014, an increase of approximately 8.5% compared to Rp 16.0 Trillion last year.

“In line with earlier indication, Kalbe’s audited results showed sound performance in 2014 with steady growth of Kalbe’s products.” stated Vidjongtius, Kalbe’s Finance Director and Corporate Secretary. “Despite the challenging market condition, our prescription pharmaceuticals, consumer health and nutritionals products managed to sustain healthy top line growth. The slowdown in Kalbe’s overall growth was attributed mostly to the performance of the third party principals’ products in our distribution business.”

Kalbe booked net sales of Rp 17.4 Trillion for the year 2014, up by 8.5% compared to Rp 16.0 Trillion for the year 2013.

Gross profit grew by 10.4% compared to year 2013. Meanwhile, gross profit margin slightly went up to 48.8% compared to the previous year figure of 48.0% despite the continuing Rupiah depreciation by 12.5%. Changing business mix arising from slower distribution business growth has brought positive impact to margin.

Operating profit grew by 8.3%. Despite the increase in gross profit margin, the operating profit margin was relatively steady at 15.9% mostly due to higher selling & marketing expenses and research & development expenses. The Company continued to engage in marketing activities throughout Indonesia to drive brand awareness. Further, the Company continued to pursue research and development efforts to strengthen our product portfolio.

Net profit grew by 7.6% from 2013, lower compared to operating profit growth mostly as a result of higher interest and financial charges as well as other expenses.

Divisional Performance

Prescription Pharmaceuticals Division recorded sales growth of 11.9% in 2014, mostly driven by volume. Unbranded generic segment continued to book solid growth following the implementation of the National Healthcare Insurance (NHI) since January 1, 2014. The slowing down of branded generics growth in 2014 was related to the market adjustment to the NHI. Going forward, the Company will continue to develop specialty pharmaceuticals products with higher technology base such as oncology products strengthen our portfolio.

Consumer Health Division recorded steady growth of 16.7% in 2014, also mostly supported by volume growth. Extra Joss energy drink, and ready-to-drink (RTD) products continue to drive top line growth, while over-the-counter (OTC) segment provided a stable growth base. New products such as Hydro Coco, Original Love Juice, and Bintang Toedjoe Masuk Angin continued to show positive growth. The Company continue to innovate to strengthen product portfolio, including by leveraging on existing brands such as Woods Herbal, Promag Gazero, Promag Suspension, Original Love Juice and Extra Joss Blend.

Nutritionals Division booked strong sales growth of 20.8%, mostly driven by volume growth of our top-selling products - Morinaga, Prenagen, and Diabetasol. New products such as Zee, Fitbar and Diva continued to show positive growth. To increase brand awareness and to support sales growth, we continue to execute various marketing activities, particularly direct to consumer marketing activities, and to improve our services such as Kalbe e-store, Kalbe Home Delivery, Kalbe Customer Care, and Kalbe Family Rewards Card. The Company is finalizing the construction of a ready-to-drink nutritional production facility, which is expected to be completed in the second semester of 2015.

The availability of Kalbe’s products across the country is one of our major competitive edges. Distribution and Logistics division plays a vital role in ensuring the availability of Kalbe’s products throughout Indonesia. In 2014, this division recorded negative sales growth of -5.2% in 2014 which mostly reflected the slowdown in growth of third party principals. Going forward, the Company will continue to strengthen its distribution network to expand its coverage and product availability.

In 2015, the Company will consistently execute the strategies to achieve a robust and sustainable sales growth.

Manage, strengthen, and integrate product and business through product innovation, merger, and acquisition. Increase the effectiveness of marketing and sales through innovative and integrated marketing and sales programs. Accelerate “Go Global” by consistently developing global brands through collaboration and partnership.
Continuously develop leaders with competency and Kalbe Panca Sradha character.
Strengthening quality assurance, compliance, and corporate social responsibilities to ensure sustainability.

Kalbe at a Glance

PT Kalbe Farma Tbk. (“Kalbe”) was established in 1966 and is one of the largest publicly-listed pharmaceutical companies in Southeast Asia. Kalbe has four main divisions managing a broad and strong portfolio of brands; prescription pharmaceuticals division (Cefspan, Brainact, Broadced, etc), consumer health division comprising over-the-counter drugs (Promag, Mixagrip, Komix, Woods, Fatigon, etc) as well as ready-to-drink and energy drink products (Hydro Coco, Extra Joss, Nitros), nutritionals division (ChilKid, Prenagen, Diabetasol, etc), and distribution division. Kalbe currently has more than 20 subsidiaries and 10 production facilities with international standards, supported by more than 17,000 employees and 6,000 sales and marketing personnel, spread in 70 branches across Indonesia.  Since 1991, Kalbe’s shares have been listed on the Indonesia Stock Exchange (IDX: KLBF). 

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