Jakarta, March 30, 2012 – PT Kalbe Farma Tbk (“Kalbe” or “the Company”) today announced the Company’s performance for the year 2011 based on Audited Consolidated Financial Statements for the year ending December 31, 2011 of PT Kalbe Farma Tbk and Subsidiaries.
Kalbe recorded consolidated net profit of Rp 1.48 Trillion for year 2011, an increase of approximately 15.2% compared to Rp 1.28 Trillion net profit in the previous year. Earnings per share increased by approximately 15.2%, to Rp 158 per share from Rp 137 per share.
Kalbe booked net sales of Rp 10.91 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 to be 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 50.9% in 2011 from 50.5% in 2010. Since the 4th quarter of 2011, the Company’s business segment composition changed along with the increase in contribution of Distribution and Logistics Division with lower gross profit margin. To minimize the impact of lower margin due to the change in segment composition, the Company is consistently implementing production costs control and improving the marketing strategies effectiveness.
“Year 2011 was quite a challenging year for the Company, particularly in achieving sales growth target” said Vidjongtius, Kalbe’s Finance Director and Corporate Secretary. “The Company in 2011 focused on sales volume growth in line with positive macro economic indicators improvement, while closely monitoring the depreciation trend of the Rupiah exchange rate at the end of the year. For full year 2011, the Company managed to record gross profit margin improvement”, Vidjongtius explained.
In relation with the implementation of SFAS No. 1 effective since January 1, 2011 regarding presentation of financial statements, income statement no longer presents income from operations separately, but rather directly to the income before income tax benefit (expense). To provide a comparison with 2010 presentation, if income from operations were to be stated separately, the ratio of income from operations in year 2011 would have increased to 18.1% from 17.5% in the preceding year. This was mainly attributed to improvements in gross profit margin. In addition, operating expenses as a percentage of net sales also decreased to 32.8% from 33.0% in year 2010. The ratio of selling expense to net sales amounted to 26.6%, higher compared to 26.4% in 2010. Meanwhile, the ratio of general and administrative expense and research and development expense to net sales amounted to 5.4% and 0.8% respectively, lower compared to 5.7% and 0.9% in 2010.
Performance of Each Division
Prescription Pharmaceuticals Division recorded net sales of Rp 2.8 Trillion in 2011,with sales growth of 7.7% compared to the previous year. The sales growth in 2011 was lower compared to the previous year, as the Company focused on sales volume growth.
Relying on complete product range for all economic segments, comprising of licensed drugs, generics and unbranded generics that are distributed through hospitals, pharmacies and drug stores through integrated distribution network and marketing teams focusing on each segment, Kalbe maintained its leading position in the Indonesian prescription pharmaceuticals market with 13% market share among 200 pharmaceuticals players in Indonesia (source: IMS Health 2011).
In anticipation of the increasing demand for unbranded generic products as a result of the upcoming national healthcare insurance system, Kalbe has completed the construction of its generic product manufacturing facility in Cikarang. The new facility has obtained Indonesian Food and Drug Administration Supervisory Body (BPOM) certification and has been inaugurated by the Minister of Health of the Republic of Indonesia Ibu dr. Endang R. Sedyaningsih, MPH, Dr, PH on February 28, 2012. To strengthen the portfolio of
prescription products, Kalbe plans to solidify its position in the high-growth potential cancer drug segment which has been continuously growing. With the cancer drug facility, the Company aims to increase the availability of cancer drugs for Indonesians at more affordable prices.
Consumer Health Division booked net sales of Rp 1.8 Trillion, recording positive growth of 8.3% in 2011, after a downtrend in the last few years. Improvement in the performance of the Consumer Health Division was driven by the contribution of the over-the-counter products growth, as well as the recovery of the energy drink product, Extra Joss. In the Consumer Health Division, Kalbe will continue to develop its new potential segment, the healthy ready-to-drink products, with natural coconut water product Fatigon Hydro and fruits and vegetables juices Tipco. These products have shown positive sales growth and the Company will continue to improve competence in the management of supply chain and distribution while also exploring the possibility of strengthening the production facility. The Company will continue expanding its product portfolio, from conventional over-the-counter to consumer health products using natural and herbal ingredients.
The Nutritionals Division recorded net sales of Rp 2.4 Trillion with a growth of 5.5% in year 2011. The sales growth was below those in the preceding years, which could mainly be attributed to the Company’s strategy in 2011 to maintain price in order to gain market share. The Nutritionals Division showcases a complete range of powdered milk products for all age groups and needs. In light of product development, the Company will continue the strategy to enter into the middle segment where the Company has identified a potential growth with the growing middle income segment in Indonesia with its rising purchasing power. Kalbe will also continue to expand the market by developing new potential segments where Kalbe can leverage synergy with the Prescription Pharmaceuticals Division, such as milk product for Diabetic patients. In terms of marketing, Kalbe will continue to engage in direct-to-consumer activities such as 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 through Nutrition Home Delivery (NHD) free-of-charge delivery service. For the time being, Kalbe e-store serves delivery only for Jakarta and its surrounding areas.
Availability of products throughout Indonesia is indeed a must for Kalbe to achieve sustainable growth in the pharmaceuticals and consumer health market in Indonesia. Kalbe has been supported by the most extensive distribution network in Indonesia for pharmaceuticals products, which is run by Kalbe’s subsidiary, PT Enseval Putera Megatrading Tbk (“EPMT”). Currently Kalbe owns majority ownership with a 91.75% stake after increasing its ownership in September 2011 from a previous 84.17% stake.
In year 2011, the Distribution and Logistics Division recorded net sales of Rp 3.9 Trillion, with sales growth of 6.0% 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. If the sales of the packaging business were to be excluded, the Distribution and Logistics Division would have recorded a positive growth of 12.8%.
The growth of the Distribution and Logistics Division sales 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 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 line with a positive macro economic development, the Company perceives a more optimistic view on 2012 performance, especially in terms of price increase. In 2012, the Company targets to achieve sales growth of 18% - 20%, with operating profit margin of approximately 16.0% - 16.5%. Earnings per share is forecasted to range from Rp 173 to Rp 180 per share, reflecting an increase of 10% - 15% 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).