Jakarta, February 16, 2012 – PT Kalbe Farma Tbk (“Kalbe” or “the Company”) today announced the Company’s indicative performance for the year 2011. Kalbe recorded an indicative consolidated net profit of Rp 1.46 Trillion for year 2011, an increase of approximately 13.8% compared to the Rp 1.28 Trillion figure for the same period last year. Earnings per share increased by approximately 13.8%, to Rp 156 per share from Rp 137 per share.
Kalbe booked net sales of Rp 10.90 Trillion for the year 2011, up by 6.7% compared to Rp 10.22 Trillion for the year 2010. With the divestment of the Company’s packaging business in August 2010, the Company did not record any net sales from the Packaging Division in year 2011. If net sales of the Packaging Division were excluded from total consolidated sales in 2010, the Company would have recorded net sales growth of 9.0%.
The Company recorded an increase in gross profit margin to 50.8% in 2011 from 50.5% in 2010. Starting in the 4th quarter of 2011, the Company recorded a change in business segment composition since the 4th quarter in 2011, which was related to the increase in contribution of Distribution and Logistics Division with lower gross profit margin. To mitigate the impact of lower margin, the Company consistently controls production costs among others through the lean manufacturing program and sustainable improvement in business process through the Continuous Improvement (Conim) program to achieve better effectiveness and efficiency.
“Higher contribution from the Distribution and Logistics Division due to the addition of a new third party principal will change the existing business mix. As the Distribution and Logistics business conveys lower margin, in the short term we expect to see a slight overall margin contraction as an impact of this change of business mix. However, we are confident that this strategy will bring positive results in the long run. In the next few years, we forecast that the Prescription Pharmaceuticals, Consumer Health and Nutritionals Division will grow above the market and therefore we will be able to resume the existing business mix and improve margin level. Further, the addition of third party principals will support one of our key long term strategies, to achieve aggressive top line growth,” stated Vidjongtius, Kalbe’s Finance Director and Corporate Secretary.
As a percentage of net sales, operating profit margin increased to 17.9% in year 2011 from 17.5% in year 2010. Operating expenses remained stable at approximately 33% to net sales.
Performance of Each Division
Prescription Pharmaceuticals Division recorded moderately well sales growth in 2011. Sales growth of pharmaceuticals products was entirely driven by volume growth. Kalbe has completed the construction of its generic product manufacturing facility in Cikarang and is also currently building a production facility for oncology products; both will contribute to expanding Kalbe’s prescription pharmaceuticals product portfolio to anticipate market opportunities. The generic production facility has obtained certification from the Indonesian food and drug administration supervisory body (BPOM) and is ready for production.
Consumer Health Division also recorded positive growth in 2011, after a downtrend in the last few years. Recovery of the energy drink product Extra Joss performance provided positive contribution to total Consumer Health Division net sales. Over-the-counter products, and new products such as natural coconut water drink Fatigon Hydro as well as fruits and vegetables juices Tipco continued to record steady growth. The Company will continue expanding product portfolio, from conventional over-the-counter to consumer health products using natural and herbal ingredients.
The Nutritionals Division continued to implement direct-to-consumer marketing activities, such as through mall-to-mall roadshows and the launching of Kalbe e-store. Kalbe e-store is an online shopping website created to provide convenience to consumers in purchasing Kalbe nutritionals products with free-of-charge delivery service. For the time being, Kalbe e-store serves delivery for Jakarta and the surrounding areas. Through Nutrition Home Delivery (NHD) service, consumers can order Kalbe Nutritionals products by contacting telephone number 500-880 with free-of-charge delivery service.
Distribution of Kalbe products is conducted by PT Enseval Putera Megatrading Tbk (“EPMT”), which commands the largest distribution network in Indonesia for pharmaceuticals products. EPMT is majority- owned by the Company, with a 91.75% stake, after the Company increased its ownership in September 2011 from 84.17% previously.
In year 2011, the Distribution and Logistics Division recorded positive sales growth compared to 2010. In 2010, the Company still recorded the sales contribution from PT Kageo Igar Jaya Tbk, the packaging arm of Kalbe. In August 2010, the Company conducted a divestment of PT Kageo Igar Jaya Tbk shares.
The sales growth of the Distribution and Logistics Division reflected the positive impact of the addition of PT Abbott Indonesia (“Abbott”) as a new principal of EPMT. As of the end of September 2011, EPMT has entered into a distribution agreement with PT Abbott Indonesia to distribute Abbott’s nutritional products in Indonesia in the trade channel. Distribution and Logistics Division has booked the additional sales of PT Abbott Indonesia since the 4th quarter of 2011.
In 2012, the Company’s strategies are geared towards driving aggressive top line growth. The strategies in more details are as follows:
1.To increase sales and marketing effectiveness, among others through branding management, as well as focused and integrated sales and marketing program.
2.To strengthen business portfolio through new product development, new business model and merger and acquisition.
3.To expand and deepen market penetration, in Indonesia and ASEAN.
4.To ensure excellence in execution through continuous learning.
In the Prescription Pharmaceuticals Division, the Company’ will increase its foothold in the generic segment. The Company aims to expand production capacity to reach economies of scale and high efficiency. In the Consumer Health Division, the Company will continue the strategy to develop new products using natural and herbal ingredients. In the Nutritionals Division, the Company will continue the product development strategy to meet the needs of certain segments, by leveraging on synergy with Prescription Pharmaceuticals Division. Distribution and Logistics Division will be strengthened whereby the Company will continue the expansion plan to widen network and deepen market penetration.
Through execution of the above strategies, Kalbe hopes to build Global Brands with high sales potentials in every business unit to support the achievement of healthy and sustainable sales growth.
In 2012, the Company targets to achieve sales growth of 15% - 20%, with operating profit margin of 15% - 16%. Earnings per share is forecast to range from Rp 164 to Rp 172 per share, reflecting an increase of 5% - 10% compared to 2011.
Kalbe at a Glance
PT Kalbe Farma Tbk. (“Kalbe”) is one of the largest publicly-listed pharmaceutical companies in Southeast Asia. Kalbe has a broad and strong portfolio of brands in prescription pharmaceuticals (Cefspan, Brainact, Broadced, etc), OTC pharmaceuticals (Woods, Promag, Mixagrip, Komix, etc), energy drinks (Extra Joss, E-Juss) and nutritional products (Milna, Prenagen, Diabetasol, etc), complemented with a robust distribution arm covering much of the Indonesian archipelago. Since 1991, Kalbe’s shares have been listed on the Indonesia Stock Exchange (IDX: KLBF).