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Maintaining Positive Outlook in Uncertain Times

Maintaining Positive Outlook in Uncertain Times

Jakarta, March 31, 2016 – PT Kalbe Farma Tbk and Subsidiaries (“Kalbe” or “the Company”) today announced the Company’s performance for the year 2015 based on the audited consolidated financial statement for the year ended December 31, 2015. Consolidated net sales was recorded at Rp 17.9 Trillion for year 2015, growing by 3% compared to the same period last year of Rp 17.4 Trillion.

“The Company’s audited results for year 2015 showed positive results, despite bearing the impact of the soft economy,” stated Vidjongtius, Kalbe’s Finance Director and Corporate Secretary. “Weaker purchasing power accompanied by structural change in the pharmaceutical industry, and the depreciation of the Rupiah exchange rate - all have pressurized revenue and margin of the Company, which still relies on imported raw materials.”

The Company booked net sales of Rp 17.9 Trillion for year 2015 or growing by 3% compared to year 2014 of Rp 17.4 Trillion.

Gross profit was recorded at Rp 8.59 Trillion or growing by 1.4% compared to year 2014. The gross profit margin declined to 48.0% from 48.8% in the previous year. This was mostly due to Rupiah depreciation by 10.9% in 2015.

Operating income reached Rp 2.65 Trillion, or equivalent to a ratio of 14.8% of net sales. Operating income ratio decreased by 1.1% compared to the previous year, mostly due to the weak top line growth. Operating expenses slightly increased with a ratio of 33.2% to net sales in 2015 compared to 32.9% in the previous year due to the increase of operating expenses. The Company allocates funding for research and development activities in order to strengthen future product portfolio. To drive sales growth, Kalbe continues to engage in marketing activities throughout Indonesia and its export markets. Going forward, Kalbe will continue to work on optimizing control and monitoring of operating expense effectiveness and efficiency.

The Company’s net income declined by 3.0% to Rp 2.00 Trillion from Rp 2.07 Trillion in 2014. Lower earning was mostly due to weak top line growth and Rupiah depreciation. Cash flow and working capital management remained under control. Net operating cycle was recorded at 122 days, better compared to 128 days at the end of 2014. The Company recorded a healthy cash balance of Rp 2.72 Trillion at the end of 2015. In addition to working capital, the available cash will be utilized to finance capital expenditure and dividend payment.

Despite the prevailing uncertainties, the Company believes that moderate economic recovery should be well within reach this year. With the hope of a modestly improving economy in 2016, the Company is targeting revenue growth of 8% - 10% with the same rate of growth for net profit. The targeted operating profit margin is stable at 14 – 15%. The Company allocates capital expenditure budget of Rp 1 – 1.5 Trillion for production and distribution capacity expansion. Our dividend policy remains at the level of around 40% - 50% payout ratio, depending on cash availability and internal fund requirement.

Kalbe at a Glance

PT Kalbe Farma Tbk. (“Kalbe”) was established in 1966 and is one of the biggest public pharmaceutical companies in Southeast Asia. Kalbe has four main divisions that handle reliable and varied brand portfolio; prescription medicines division (Cefspan, Brainact, Broadced, etc), over-the-counter medications division (Woods, Promag, Mixagrip, Komix, Fatigon, etc) as well as health drink (Hydro Coco, Extra Joss, Nitros), nutrition division (ChilKid, Prenagen, Diabetasol, etc), and distribution division. Kalbe currently has more than 20 subsidiaries and 9 production facilities with international standards, and employs more than 17,000 employees dispersed across more than 71 branches throughout Indonesia.  Since 1991, Kalbe is listed at Indonesia Stock Exchange (IDX: KLBF).

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