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Kalbe’s First Quarter 2013 Sales Increased by 16.2%

Kalbe’s First Quarter 2013 Sales Increased by 16.2%

Press Release No. 008/KFCP-DIR/PR/IV/13

Jakarta, April 25, 2013 – PT Kalbe Farma Tbk and Subsidiaries (“Kalbe” or “the Company”) today announced net sales of Rp 3,490 billion for the first quarter of 2013, an increase of 16.2% compared to the first quarter of 2012 of Rp 3,005 billion.

“Sales of internal Kalbe products show healthy growth, driven by intensive and focused marketing strategy as well as strong distribution penetration,” stated Vidjongtius, Kalbe’s Finance Director and Corporate Secretary. “Taking into account the conducive market condition and strong volume growth, we have conducted selective price increase at the end of the first quarter of 2013. Additionally, we continue the initiatives to strengthen product portfolio and efficiency improvements. With promising results in first quarter of 2013, we believe Kalbe is well on its way to realize sales and net profit growth target for 2013 in the range of 15% - 18%, provided that macro economy condition remain conducive.”

Backed by continuous production cost control and relatively stable raw material price, gross profit grew by 14.7% from Rp 1,472 billion in first quarter 2012 to Rp 1,688 billion in the same period in 2013. The gross margin slightly declined from 49.0% to 48.4% in the first quarter 2013, among others related to the weakening of the Rupiah from Rp 9,180 at the end of first quarter of 2012 to Rp 9,719 at the end of the same period in 2013. Gross margin in the first quarter of 2013 improved compared to the ratio in full year 2012 of 47.9%.

In addition to cost of goods sold, the Company’s main cost components comprise of selling expense, general and administrative expense and research and development expense. The ratio of selling expense to net sales increased by 0.6% from 25.9% to 26.5% in 2013. Compared to full year 2012, the ratio of selling expense was recorded at 26.2% for the period. Meanwhile, the ratio of general and administrative expense decreased by 0.5% from 5.2% to 4.7% in 2013. Compared to full year 2012, the ratio of general and administrative expense was recorded at 4.8% for the period. The ratio of research and development expense to sales was recorded stable of 0.7%. Selling expense increase by 18.6% was attributed to the activation of marketing activities through the media and directly to consumers to drive future sales growth. The Company also took the initiative to increase marketing effectiveness, among others through Corporate Branding to leverage the strength of Kalbe brand to all Kalbe products.

With solid top line growth and comprehensive cost control, in the first three months of 2013 Kalbe recorded an increase in income before tax by 8.0% to Rp 585 billion compared to the same period last year of Rp 542 billion. The margin of income before tax was booked at 16.8%, lower compared to 18.0% in the same period in 2012, and stable compared to 16.9% of the full year audited 2012 result.

Consolidated net profit of Rp 444 billion for the first quarter of 2013, an increase of 10.1% from the same period last year of Rp 403 billion, mostly driven by sales growth. Earnings per share increased by 10.1% from Rp 9 per share to Rp 10 per share.

Performance of Each Division
Prescription Pharmaceuticals Division recorded net sales of Rp 930 billion, up by 19.2% in the same period in 2012. The Prescription Pharmaceuticals provided 27% contribution to the total net sales of the Company. Volume growth was the main driving force of sales growth, aside from new product contribution and selective price increase. The Company has anticipated the implementation of the national healthcare insurance system in 2014 by building a dedicated factory for unbranded generic product, while also constructing the production facility for cancer drugs to further strengthen the prescription product portfolio.

Consumer Health Division booked net sales of Rp 557 billion, growing by 20.1% compared to the same period in 2012. The Consumer Health Division contributed 16% to the Company’s total net sales. The healthy growth was supported by the recovery of the energy drink performance, solid growth of over-the-counter drugs as well as new products’ positive contribution. Kalbe will continue to build the health drink segment as a future growth driver by promoting the natural coconut water Hydro Coco and fruit and vegetable juice Tipco, including by improving the competence in the supply chain management, distribution, as well as exploring the possibility of strengthening production facilities.

The Nutritionals Division achieved net sales of Rp 796 billion, increasing by 22.6% from the same period in 2012. The Nutritionals Division contributed 23% to total net sales. Strong sales growth was driven by volume growth and the contribution of new products.

The Distribution and Logistics Division booked net sales of Rp 1,207 billion, up by 8.6% compared to the same period last year. Distribution and Logistics Division contributed 35% to total Company net sales.

At the end of the first quarter of 2013, Kalbe recorded healthy net operating cycle of 112 days, stable compared to the same period last year. We will continue to implement working capital management to maintain strong cash flow generation and achieve solid cash position. In the first quarter of 2013, cash position reached Rp 1.89 trillion which will be used to finance capital expenditure and dividend payment, in line with our commitment to drive future sales growth and enhance shareholders’ value.

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 (Woods, Promag, Mixagrip, Komix, 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 11 production facilities with international standards, supported by more than 15,000 employees and 4,000 sales and marketing personnel, spread in more than 65 branches across Indonesia.  Since 1991, Kalbe’s shares have been listed on the Indonesia Stock Exchange (IDX: KLBF).

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