Kalbe Farma Tbk PT : Maintaining Recovery Momentum

Maintaining Recovery Momentum

Press Release No. 036/KFCP-DIR/PR/X/17

Jakarta, October 31, 2017 - PT Kalbe Farma Tbk and Subsidiaries ('Kalbe' or 'the Company') today announced its third quarter 2017 results. Net sales grew by 5.0% to reach Rp 15,090 billion from Rp 14,376 billion in the same period in 2016.

'Up to the third quarter of 2017, the Company booked a positive sales growth compared to the previous year, driven by volume,' stated Bernadus Karmin Winata, Kalbe's Finance Director and Corporate Secretary. 'In the midst of decelerating economy, the Company is facing challenges in most business divisions mostly attributed to weak consumption. The Company is still aiming to sustain growth by maintaining consistent marketing activities and cost efficiency. Going forward, Indonesia's gradual economic recovery is expected to support our growth.'

The Company booked net sales of Rp 15,090 billion up to the third quarter of 2017, or growing by 5.0% compared to the same period in 2016 of Rp 14,376 billion. Sales growth was mostly driven by increase in demand volume.

Gross profit was up by 4.7% to Rp 7,364 billion. The gross margin remained stable at 48.8% from 48.9% in the nine month period last year, on the back of Rupiah stability this year compared to the level recorded in the same period last year. To maintain margin going forward, the Company will continue to combine product mix management and pricing policy.

Operating income ratio reached 15.6%, growing by 3.7% compared to the same period last year. The Company will continue to manage its marketing and sales effectiveness and monitor other operating expenses to maintain operating profit growth.

Our net profit increased by 4.5% to reach Rp 1,779 billion from Rp 1,703 billion in of the nine month period of 2016. Net profit increase was mostly supported by growth in revenue and income before income tax expense.

Despite the challenging environment, the Company maintains net sales and earnings growth target of 8% -10%. The operating profit margin is expected in the range of 14.5% - 15.5%. The Company allocates capital expenditure budget of Rp 1.2 trillion, mostly for production and distribution capacity expansion. Our dividend policy is maintained at the level of around 40% - 50% payout ratio, by taking into account the cash availability and internal fund requirement. The Company has paid out a dividend of 45% of 2016 net income.

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), nutritionals division (ChilKid, Prenagen, Diabetasol, etc), and distribution division. Kalbe currently has more than 30subsidiaries and 10 production facilities with international standards, supported by around 17,000 employees and 6,000 sales and marketing personnel, spread in 72branches across Indonesia. Since 1991, Kalbe's shares have been listed on the Indonesia Stock Exchange (IDX: KLBF).