company profile full year 2017 - panbrotherstbk.com info memo full year 2017r.pdf · marketing and...

COMPANY PROFILE full year 2017

PT. PAN BROTHERS Tbk. & SUBSIDIARIES

1

PT. Pan Brothers Tbk. & Subsidiaries

CONTENTS

COMPANY OVERVIEW 3

FINANCIAL OVERVIEW 19

APPENDIX 23

2


COMPANY OVERVIEW

3


PT. PAN BROTHERS Tbk.Vision:

TO BE AN INTEGRATED AND WORLDWIDE APPAREL SUPPLIER

• Indonesia’s largest listed garment manufacturer.

• Well-established business founded in 1980 andlisted on the Indonesia Stock Exchange since1990.

• Strong export focused-markets include US,Europe, Asia, Canada, Australia and NewZealand.

• Long-standing relationships with numerous topglobal fashion and apparel brands, whilemaintaining a strong CSR/work ethics.

• Plants located in Tangerang, West Java andCentral Java with 26,626 machines and

production capacity of 90 million pieces ofgarment by the end of 2016 and 2017.

• Selective expansion to both upstream anddownstream segments.

4


GROUP STRUCTURE

PT. Trisetijo Manunggal

Utama

27.98%

PT. Ganda Sawit

Utama

19.86%

Public

52.16%

PT. Pan Brothers Tbk

PT. Pancaprima Ekabrothers (99.91%) PT. Eco Smart Garment Indonesia (85.00%)

PT. Hollit International (51.04%) Cosmic Gear Limited (51.00%)

PT. Ocean Asia Industry (51.00%) PT. Prima Sejati Sejahtera (99.00%)

Continent 8 Pte. Ltd. (51.00%) PT. Teodore Pan Garmindo (51.00%)

PT. Apparelindo Prima Sentosa (99.00%) PT. Victory Pan Multitex (51.00%)

PT. Berkah Indo Garment (99.00%)

PB. Island Pte. Ltd. (51.00%)

PB International B.V. (100.00%)

5


GROUP OVERVIEW

Business Garment Manufacturing

Group Companies

PT Pan

Brothers

Tbk“PBT”

PT Pancaprima

Ekabrothers

“PPEB”

PT Eco Smart

Garment

Indonesia

“ESGI”“PSS”

PT Teodore

Pan Garmindo

“TPG”

PT Berkah Indo

Garment

“BIG”

Brief Description

• Started in1980.

• ManufacturesWovenGarmentssuch asPadded andLight WeightJackets,Pants, Shortsand CasualPants.

• Acquired in2005.

• ManufacturesTechnical,Functionaland ActiveWear Jacketsand OuterWear suitedfor SnowBoarding,Skiing,Jogging,Hiking, andother Sportsand OutdoorActivities

• Established in2013 as a JVwithMitsubishi.

• Planned tobuild 6garmentmanufacturingfacilities

• 4 Facilitiesalready builtin 2014.

• And expansionof ESGIexpected tofinish by 2019.

• Manufactureswovengarment

• Established in2014.

• ManufacturesTechnical,Functionaland ActiveWear Jacketsand OuterWear suitedfor SnowBoarding,Skiing,Jogging,Hiking, andother Sportsand OutdoorActivities


• ManufacturesCut and SewnKnit Garmentssuch as PoloShirts, GolfShirts, TrackSuits, SweatSuits


• ManufacturesWoven Garmentsuch as CasualShirts, Tops,Casual Bottoms,Casual Shorts,Denims,GarmentDyeing.

6


GROUP OVERVIEW

Business

Group Companies

Brief Description

Product Development and Marketing

“Hollit”

PT Hollit

International

• Acquired in 2011.

• A product development company focusing on the development and creation of latest trends in styling, finishing and material.

• Also manages the collection and production of world renowned fashion brands.

Continent 8 Pte Ltd

“C8”

Cosmic Gear

Limited

“Cosmic”

• Incorporated in Singapore.

• Engages in sourcing activities that will allow the Group’s products to reach more international markets.


• Incorporated in Hong Kong to help the group better cater the international market.

• Engages in product development and material sourcing.

PB Island Pte. Ltd

“PBL”

PBLPB International

B.V.

PB Fashion B.V.

“PBF”

• Incorporated in Singapore.

• Engages in sourcing activities that will allow the Group’s products to reach more international markets.


• Incorporated in Netherlands

• PBF engaged in business as Apparel Buying Agent and Trading Company, and set-up to support Europe activities.

7


GROUP OVERVIEW

Business

Group Companies

Brief Description

Sewing & Embroidery

Thread

PT Victory

Pan Multitex

“VPM”

• Established in 2014.

• Produces various Sewing and embroidery thread.

Fabric Supply

PT Ocean Asia

Industry“OAI”

• Started in 2012.

• Produces various kinds of knit fabrics, such as single knits and double knits (Single Jersey and Lycra Single Jersey, Pique and Lacoste, Fleece / French Terry Interloop / Lycra Interloop, Jacquard Jersey) and flat knits.

Retail & Others

PT Apparelindo

Prima Sentosa

“APS”

• Started in 2013.

• Incorporated in Indonesia to engage in apparel retail business

• Launched its women’s fashion brand, ZOE label in 2013.

• JV men’s fashion brand , Salt n Pepper in 2015.

8


PBRX MILESTONE

2013

2007

1980

2005

2012

2011Established PBT (Cut &

Sewn Knit OEM Factory)

a) Expansion of PPEB at

Boyolali (Woven

Factory)

b) Expansion of PBT at

Sragen (Woven

Factory)

Acquired PPEB (Light &

Heavy Woven Jacket

Factory)

Set up OAI (Apparel

material

manufacturer)

a) Expansion of PBT at

Boyolali (Woven

Factory)

b) Expansion of PPEB at

Boyolali

(Woven Factory)

a) Set up APS (Apparel Retail &

Brand etc)

b) Set up ESGI (Woven Factory)

Set up Cosmic Gear

(Product Development)

2014

2016

a) Set up Berkah Indo Garment at

Ungaran and Demak (Woven

Factory)

b) Set up PB International BV

(Buying Agent and Marketing

Office )

c) TPG Tasik expansion

Acquired Hollit

(Product Development

Company))

Set up PB Island Pte. Ltd.

(Product Development)

2017

a) Set up TPG at Bandung

(Cut & Sewn Knit Factory)

b) Set up VPM at Bandung

(Sewing and Embroidery

thread)

c) Set up PSS at Boyolali

(Woven Factory)

2015

9

PT. Pan Brothers Tbk. & Subsidiaries10


INDUSTRY OUTLOOK

Strong Outlook Despite Global Uncertainties

• Textile and garment exports from Indonesia are expected to growfrom US$13.2bn in 2015 to US$ 75.3bn in 2030

• Proportion of Indonesian exports in total global demand to rise from 1.8% in 2015 to 5% in 2030.

Indonesian Government Support on Textile &

Garment Industry

• Economic policies packaged issued for labor intensive industries;tax incentives, electricity tariff discounts and employee taxdeduction, income tax incentive on expansion and new investment

• FTA with the European Union expected to be signed in 2018• Government has expressed support of strengthening domestic

manufacturing industry and reducing dependence on commodity-based exports

Key Asian Garment Suppliers Face Growth

Constraints

• China faces rising labor cost and lack of labor supply.

• India & Bangladesh are constrained by inadequate infrastructure and rising labor wages.

• Vietnam & Cambodia have smaller workforce relative to Indonesiaand are constrained by rising labor cost.

Indonesian Retail Outlook

• Indonesia has huge population of more than 260 million.

• In 2030, it is expected the middle class income earners willcontribute up to US$ 1.7bn to the country’s GDP (86% of the totalGDP).

Source: KemenPerin; Index Valuation Division API Publication; Goverment Policy Package;BPS

11


INTEGRATED BUSINESS MODEL

Raw Material Production

Textile Manufacturing

Apparel Manufacturing

Branded Apparel Players

Retailers

FibreProduction

Spinning, Fabric weaving, knitting,

finishing

Designing, cutting, sewing, buttonholing, ironing

Marketing and distribution

Retail Outlets

� � � �

Upstream expansion Garment Manufacturing Downstream expansion

• Actively pursuing JV / M&A

opportunities into fabric mills sector.

• Joint Venture with Mitsubishi to set up

6 factories in Central Java area, with 4

factories already built in 2014, and

another 2 factories in 2019

• Set up Prima Sejati Sejahtera in

Boyolali in Central Java in 2014

• Set up Teodore Pan Garmindo in West

Java in 2014, expansion at Tasikmalaya

in 2016 and another expansion in 2018.

• Set up product development company.

• Established Apparelindo Prima Sentosa

to increase presence in apparel retail

business, with in-house brand, ZOE

Label, SnP, FTL, Asylum and Wastu.

• JV / M&A with some local brands and

multi-brand retailer.

12


KEY PILLARS OF FURTHER GROWTHUpstream – Category

Expansion

• Expansion into new sectors, such as:

• Fabric mills (synthetic woven fabric)

• Target route: JV or M&A

Manufacturing Expansion

• Domestic

• JV with Mitsubishi (ESGI) increasing capacity to another 21 million pcs with total 48 million pcs by 2019.

• TPG (Teodore Pan Garmindo) expansion at West Java

• BIG (Berkah Indo Garment) at Central Java

• Year 2019 setup capacity expected 117 million pcs.

• Regional

• Expansion to other countries to increase diversification and better reach the addressed markets.

• Target countries: Vietnam and other prospect countries.

Downstream – Channel Expansion

• Continuous expansion of brand, ZOE Label, SnP, FTL, Asylum and Wastu.

• Joint venture with local and overseas partners for retail brands.

• Collaboration with global fashion brand.

• Planning to enter the e-commerce sector.

• Target route: JV or M&A

Product Optimalization

• Automation in some process.

• Increasing capability in garment embroidery facility, garment printing facility, and garment wash / laundry facility.

13


GARMENT MANUFACTURING

Production and distribution spread across key Asian markets

Marketing Office

Rep offices

Plants

Indonesia

Singapore

Hong KongTaiwan

Indonesia

Tangerang

BoyolaliSragen

UngaranDemak

Vietnam

Manufacturing Capabilities in Indonesia years 2016 and 2017

CategoryTotal Machines

(Units)Manufacturing

Capacity (‘000pcs)

Mix catagories (Technical , Woven Garment and Cut & Sewn Knit)

26,626 90,000

The largest garment manufacturing capabilities in Indonesia

Key production facilities

Indonesia production facilities are situated across Tangerang in Banten; Bandung and Tasikmalaya in West Java; Boyolali, Sragen, Demak, Ungaran in Central Java

Strategically positioned throughout Asia with offices in Taiwan, Singapore and Hong Kong to serve customers in regional & global markets

Maintains close proximity to both customers’ regional offices in Hong Kong and Singapore as well as key fabric suppliers in Taiwan

14


ACCREDITATIONS AND AWARDACCREDITATIONS

�ISO 9001:2008

�ISO 9001:2015

�ISO 14001

�WRAP

�GSV

�SA 8000

�OHSAS

�C-TPAT

SA 8000 ISO 14001:2004 ISO 9001:2015 ISO 9001:2008

Note: ISO 9001 : Quality Management System ISO 14001 : Environment Management System WRAP : Workplace Environment Management SystemGSV similar to C-TPAT : Global Security Verification ProgramSA 8000 : Social Accountability Management System OHSAS 18001 : Occupational Health & Safety Management System

15


ACCREDITATIONS AND AWARDAWARDS

Indonesia Export Award 2016

Green Industry Award 2017

Top 5 GCG in Textile & Garment Award 2017

The Top 50 Companies2017

TOP CSR 2017 on Garment and Textile Industry

Excelence Public Company 2017

Most Innovative Business 2017

Asia Corporate Excelence & Sustainablility 2017

100 Fastest Growing Company 2017

Green Industry Award 2017 from Tangerang Government

16


• Sending sewing trainers to Vocational Training Center• Holding Science and Technology Olympics regularly• Donating for a total 3000 scholarship to highly performed

high school students in Central Java (step one 2014 -2017)

• Scholarship package for 100 students in University ofIndonesia for bachelor degree (2017 - 2021)

• Organizing Employment programs on Synergy investmenttogether with Madrasah and PonPes

• Receive students for internships both technical andmanagement.

• Sponsoring medical trip to Papua presented by The HOPE• Organizing health education such as cancer, HIV, etc• Donating to natural disaster victims• Coordinating blood donor regularly

CORPORATE SOCIAL RESPONSIBILITY


CORPORATE SOCIAL RESPONSIBILITY

Sending sewing trainers toVocational Training Center

Scholarship package for 100students in University ofIndonesia for bachelor degree(2017 - 2021)

Organizing health education suchas cancer, HIV, etc

Holding Science and TechnologyOlympics regularly (2015-2016)

Donating for a total 3000 scholarshipto highly performed high schoolstudents in Central Java (2014 - 2017)

Organizing Employmentprograms on Synergyinvestment together withMadrasah and PonPes

Sponsoring medical trip to Papuapresented by The HOPE

Donating to natural disastervictims

Coordinating blood donor regularly


FINANCIAL OVERVIEW


GLOBAL PRESENCE – BY SALES

2013 2014 2015 2016 2017

30.46% 25.47% 28.29%26.40% 26.00%

30.43%

28.97% 19.88% 16.83% 16.78%

38.78%44.44%

50.79%55.70% 52.63%

0.33% 1.12% 1.05% 1.07% 4.59%

OTHERS

ASIA

EUROPE

USA


FINANCIAL HIGHLIGHT

SALES (US$m) GROSS PROFIT (US$m) / SALES

339.7 338.5 418.6

482.2 549.4

2013 2014 2015 2016 2017

41.8 39.6 53.6

65.3 76.6

2013 2014 2015 2016 2017

(%) 12.3% 11.7% 12.8% 13.5% 13.9%

EBITDA (US$m) / SALES NET INCOME (US$m) / SALES

26.1 21.7

28.5

38.9 42.2

2013 2014 2015 2016 2017

10.4 9.3 8.6

13.3

7.8

2013 2014 2015 2016 2017

(%) 7.7% 6.4% 6.8% 8.1% 7.7% (%) 3.1% 2.8% 2.1% 2.8% 1.4%


FINANCIAL HIGHLIGHT

TOTAL DEBT & CASH (US$m) DEBT / EQUITY (x)

78.7 95.4

140.4

205.4 240.0

38.4

127.8

73.6 78.4 79.6

2013 2014 2015 2016 2017

0.8

0.5

0.7

0.9 1.0

2013 2014 2015 2016 2017

Total Cash

Total Debt

TOTAL ASSETS (US$m) OUTSTANDING SHARES (mn shares)

233.8

367.3 442.8

519.5 573.4

2013 2014 2015 2016 2017

3,084.90

6,478.30 6,478.30 6,478.30 6,478.30

2013 2014 2015 2016 2017


APPENDIX


SUMMARY – Income Statement(US$m) 2013 2014 2015 2016 2017

Net sales 339.7 338.5 418.6 482.2 549.4

% growth 118.5 99.6 123.6 115.2 113.9

COGS -297.9 -299 -365 -416.9 -472.7

% of sales -87.7 -88.3 -87.2 -86.4 -86.1

Gross profit 41.8 39.6 53.6 65.3 76.6

% margin 12.3 11.7 12.8 13.5 13.9

Selling expenses -5.5 -5.3 -8.5 -13.3 -17.3

% of sales -1.6 -1.6 -2.0 -2.7 -3.2

G&A -17.5 -20.8 -28 -29.9 -31.3

% sales -5.2 -6.1 -6.7 -6.2 -5.7

Operating profit 18.8 13.4 17.1 22.0 28.0

% margin 5.5 3.9 4.1 4.5 2.8

% growth 134.5 74.0 127.5 112.2 127.4

Net interest expense -4.7 -0.9 -3..8 -6.3 -15.5

Other income (expenses) 0.3 1.5 -1.8 2.6 -1.6

Profit before tax 12.7 12.9 11.5 18.3 11.0

Income tax expense -2.3 -3.6 -2.9 -4.9 -3.1

Profit for the year 10.4 9.3 8.6 13.3 7.8

% margin 3.1 2.7 2.0 2.8 1.4

% growth 150.7 96.7 92.4 154.1 58.8

Net Profit (Loss) attributable to equity holders

10.5 9.6 9.4 14.6 9.3

% margin 3.1 3.0 2.2 3.1 1.7


SUMMARY – Balance Sheet

(US$m) 2013* 2014* 2015 2016 2017

Cash and bank balances 38.4 127.8 73.6 78.3 79.6

Trade receivables 45.3 51.8 65.7 80.5 95.6

Inventories 55.6 67.4 88.6 101.6 119.4

Other current assets 30.9 37.2 82.6 126.2 144.4

Total current assets 170.2 284.2 310.6 386.6 439.0

Tangible assets 56.8 75.8 122.9 123.4 121.3

Intangible assets 3.4 3.2 3.1 4.9 5.1

Other 3.7 4.1 6.3 4.6 7.9

Total non-current assets 63.9 83.0 132.3 132.9 134.3

Total assets 234.1 367.3 442.8 519.5 573.4

Short-term borrowings 0.0 12.4 5.5 15.9 1.8

Trade payables 45.7 48.8 60.4 57.9 59.0

Other current liabilities 5.1 13.2 20.4 28.9 34.9

Total current liabilities 50.8 74.4 86.3 102.7 95.8

Long-term borrowings (Syndication, Bonds, Etc) 78.5 82.9 134.9 182.2 237.0

Other long-term liabilities 6.6 8.5 5.7 6.9 5.7

Total non-current liabilities 85.1 91.4 140.6 189.1 242.7

Total liabilities 135.9 165.8 226.9 291.8 338.6

Shareholders' funds

Total shareholders' funds 95.7 186.2 197.0 210.7 220.3

Non-controlling interest 2.5 15.3 18.9 16.9 14.5

* As restated on PSAK No.24 (Revised 2013)


RETAIL

Z O E label

ZOE label side with STYLE over trends, thinkTIMELESS is never outdated. ZOE label don’tbelieve MINIMALISM as underdressed – ZOE label isconfident to let our personality shines and use ourclothes to enhance it. For us, the charm is in theMIX. The essence is EFFORTLESS CHIC.

ZOE label is an INDONESIAN BRAND, but ZOE labelsource our fabrics from around the world. Ourdesign, sourcing & production teams serve not usonly, but also well-known international brands.ZOE label take pride in our VALUE & QUALITY.

� Website: www.zoelabel.com

� Instg: @ zoethelabel


RETAIL

Founded in 2017, Wastu is an Indonesian brandspecializing in the elegantly understated piece andcrafted from the ideas of an Indonesian fashiondesigner, Auguste Soesastro. Taken from JavaneseSanskrit, Wastu means 'Architecture', which hasbeen Auguste's interest and has inspired him toharmonize architectural lines, geometry, andstructures into wearable items. Wastu embodies away of life in stylish collections affordable for anybudget.

� Website: www.shopwastu.com

� Instg: @wastu_studio


RETAIL

Salt n Pepper is a contemporary men casualbrand for upper middle class.

Inspired by designs and trends in the USA andEurope, Salt n Pepper is tailored to bring thelatest trends in a perfect fitting for Asian sizes.

It’s a catchy brand, unisex, global meaning andeasy for people to remember

Just like how food is tasteless without salt andpepper, we believe that clothes need to havedetails added to make it look great

Other brands are FTL and Asylum

Website: http://saltnpepperstore.com/

Instg: @saltnpepper_id and @asylumintl


GARMENT MAKING PROCESS

Warehouse Fabric Inspection Lab Test

CuttingSewing


PT. Pan Brothers Tbk.Address : Jl. Siliwangi No. 178, Jatiuwung, Tangerang 15133, IndonesiaPhone : 6221-5900 718 Fax : 6221-5900 717Email : [email protected]/ [email protected] : www.panbrotherstbk.com


STRICLY PRIVATE AND CONFIDENTIALDISCLAIMERThis document is intended to be general information for discussion purposes only and does not create any legally binding obligations on the part of PBRX. The informationcontained in this document is based on materials we believe to be reliable, however we do not represent that it accurate, current, complete, or error free. Information inthis document constitute our judgment as of the period of preparing the document and are subject to change without notice. Any opinion in this information may notnecessarily represent the opinion of PBRX or any entity in the PBRX and Group. Any person and entity receiving this information shall treat the information as confidentialand not misuse, copy, disclose, or distribute, in whole or in part, without PBRX express written permission. PBRX disclaims all liability for any direct, indirect, consequentialor other losses or damages incurred by anyone that may arise from any reliance on this document or for the reliability, accuracy, completeness or timeliness thereof.

company profile full year 2017 - panbrotherstbk.com info memo full year 2017r.pdf · marketing and...

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