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COMPANY PROFILE
PT. PAN BROTHERS Tbk.& SUBSIDIARIES
With Integrity, Commitment, Precision and Passion for the Company’s Enhancement
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CONTENTS
2
COMPANY OVERVIEW 3
PT. Pan Brothers Tbk. & Subsidiaries
FINANCIAL OVERVIEW 18
APPENDIX 22
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3
COMPANY OVERVIEW
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• Indonesia’s largest listed garmentmanufacturer.
• Well-established business founded in 1980 andlisted on the Indonesia Stock Exchange since1990.
• Strong export focused-markets include US,Europe, Asia, Canada, and Australia.
• 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 andproduction capacity of 90 million pieces ofgarment by the end of 2016.
• Selective expansion to both upstream anddownstream segments.
PT. PAN BROTHERS Tbk.
Vision:TO BE AN INTEGRATED AND WORLDWIDE APPAREL SUPPLIER
PT. Pan Brothers Tbk. & Subsidiaries
4
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GROUP STRUCTURE
5 PT. Pan Brothers Tbk. & Subsidiaries
PT. PAN BROTHERS TBK.
PT. Trisetijo ManunggalUtama27.98%
Public52.16%
PT. Ganda Sawit Utama19.86%
Continent 8 Pte. Ltd. (51.00%)
PT. Hollit International (51.04%)
PT. Pancaprima Ekabrothers (99.91%)
PT. Ocean Asia Industry (51.00%)
PT. Apparelindo Prima Sentosa (99.00%)
PT. Eco Smart Garment Indonesia (85.00%)
Cosmic Gear Limited (51.00%)
PT. Prima Sejati Sejahtera (99.00%)
PT. Teodore Pan Garmindo (51.00%)
PT. Victory Pan Multitex (51.00%)
PT. Berkah Indo Garment (99.00%)
* As of August 16, 2016 PT TMU share increase from 26.33% to 27.98%
PB International B.V. (100.00%)
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GROUP OVERVIEW
6
• Started in1980.
• ManufacturesWovenGarmentssuch asPadded andLight WeightJackets,Pants, Shortsand CasualPants as wellas Cut andSewn KnitGarmentssuch as PoloShirts, GolfShirts, TrackSuits, SweatSuits
• 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 2017.
• Manufactureswovengarment
PT. Pan Brothers Tbk. & Subsidiaries
• Established in2014.
• ManufacturesTechnical,Functionaland ActiveWear Jacketsand OuterWear suitedfor SnowBoarding,Skiing,Jogging,Hiking, andother Sportsand OutdoorActivities
• Established in2014.
• ManufacturesCut and SewnKnit Garmentssuch as PoloShirts, GolfShirts, TrackSuits, SweatSuits
Garment ManufacturingBusiness
Group Companies
Brief Description
PT Teodore
Pan Garmindo
“TPG”“PSS”
PT Eco Smart
Garment
Indonesia“ESGI”
PT Pancaprima
Ekabrothers
“PPEB”
PT Pan
Brothers Tbk
“PBT”
• Established in2016.
• ManufacturesWoven Garmentsuch as CasualShirts, Tops,Casual Bottoms,Casual Shorts,Denims,GarmentDyeing.
PT Berkah Indo
Garment
“BIG”
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• Started in 2013.
• Incorporated in Indonesia to engage in apparel retail business
• Launched its women’s fashion brand, ZOE black in 2013.
• JV men’s fashion brand , Salt n Pepper in 2015.
• 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.
• Established in 2014.
• Produces various Sewing and embroidery thread.
• Incorporated in Hong Kong to help the group better cater the international market.
• Engages in product development and material sourcing.
• Incorporated in Singapore.
• Engages in sourcing activities that will allow the Group’s products to reach more international markets.
• A product development company focusing on the development and creation of latest trends in styling, finishing and material.
• 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.
GROUP OVERVIEW
7
RetailFabric SupplySewing &
Embroidery Thread
Product Development and Marketing Business
Group Companies
Brief Description
PT Hollit
International
“Hollit”
PT. Pan Brothers Tbk. & Subsidiaries
PT Apparelindo
Prima Sentosa
“APS”
PT Ocean Asia
Industry“OAI”
PT Victory
Pan Multitex
“VPM”
Cosmic Gear
Limited“Cosmic”
Continent 8
Pte Ltd
“C8”
PB International
BV
&
PB Fashion B.V
• Started in 2016.
• Engaged in business as Apparel Buying Agent and Product DevelopmentCompany, etc, set-up to support Europe activities.
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PBRX MILESTONE
8 PT. Pan Brothers Tbk. & Subsidiaries
2013
2007
1980
2005
2012
2011Established PBT (Cut &
Sewn Knit OEM Factory)
Established PBT (Cut &
Sewn Knit OEM Factory)
a) Expansion of PPEB at
Boyolali (Woven
Factory)
b) Expansion of PBT at
Sragen (Woven
Factory)
a) Expansion of PPEB at
Boyolali (Woven
Factory)
b) Expansion of PBT at
Sragen (Woven
Factory)
Acquired PPEB (Light &
Heavy Woven Jacket
Factory)
Acquired PPEB (Light &
Heavy Woven Jacket
Factory)
Set up OAI (Apparel
material
manufacturer)
Set up OAI (Apparel
material
manufacturer)
Expansion of PBT at
Boyolali (Woven Factory)
Expansion of PBT at
Boyolali (Woven Factory)
a) Set up APS (Apparel Retail
and Brand)
b) Set up ESGI (Woven Factory)
a) Set up APS (Apparel Retail
and Brand)
b) Set up ESGI (Woven Factory)
2014
Set up Cosmic Gear
(Product Development)
Set up Cosmic Gear
(Product Development)
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)
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)
2016
a) Set up Berkah Indo
Garment at Ungaran and
Demak (Woven Factory)
b) Set up PB International BV
(Buying Agent and Product
Development Company)
c) Complated manufacturing
facility TPG Tasikmalasya
a) Set up Berkah Indo
Garment at Ungaran and
Demak (Woven Factory)
b) Set up PB International BV
(Buying Agent and Product
Development Company)
c) Complated manufacturing
facility TPG Tasikmalasya
Expansion of PPEB at
Boyolali
(Woven Factory)
Expansion of PPEB at
Boyolali
(Woven Factory)
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9 PT. Pan Brothers Tbk. & Subsidiaries
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INDUSTRY OUTLOOK
• 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.
Strong Outlook Despite Global Uncertainties
• Economic policies packaged issued for labor intensive industries;tax incentives, electricity tariff discounts and employee taxdeduction
• FTA with the European Union expected to be signed in 2017• Government has expressed support of strengthening domestic
manufacturing industry and reducing dependence on commodity-based exports
Indonesian Government Support
on Textile & Garment Industry
• 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 Indonesia
and are constrained by rising labor cost.
Key Asian Garment Suppliers Face
Growth Constraints
• Indonesia has huge population of more than 260 million.• In 2030, it is expected the middle class income earners will
contribute up to US$ 1.7bn to the country’s GDP (86% of the totalGDP).
Indonesian Retail Outlook
10 PT. Pan Brothers Tbk. & Subsidiaries
Source: KemenPerin; Index Valuation Division API Publication; Goverment Policy Package;BPS
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INTEGRATED BUSINESS MODEL
11PT. Pan Brothers Tbk. & Subsidiaries
FibreProduction
Spinning, Fabric weaving, knitting,
finishing
Designing, cutting, sewing, buttonholing, ironing
Marketing and distribution
Retail Outlets
Raw Material Production
Textile Manufacturing
Apparel Manufacturing
Branded Apparel Players
Retailers
• Actively pursuing JV / M&A opportunities into fabric mills sector.
• Set up Victory Pan Multitex as Sewing and Embroidery Thread manufacturer in
2014.
• Acquired Hollit International set up some product development company.
• Established Apparelindo Prima Sentosato increase presence in apparel retail
business, with in-house brand, ZOE
black & JV SnP
• JV / M&A with some local brands and multi-brand retailer.
�� �
Upstream expansion Downstream expansion
�
• Joint Venture with Mitsubishi to set up 6 factories in Central Java area and
already built 4 factories in 2014,
expansion expected to finish in 2017
• Set up Prima Sejati Sejahtera in Boyolali in Central Java in 2014
• Set up Teodore Pan Garmindo in West Java in 2014 and 2016.
Garment Manufacturing
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KEY PILLARS OF FURTHER GROWTH
Upstream – 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 end 2017.
• TPG (Teodore Pan Garmindo) expansion at West Java
• BIG (Berkah Indo Garment) at Central Java
• 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 black, SnP, FTL, and Asylum.
• 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
• Increasing capability in embroidery facility, printing facility, and laundry facility.
12 PT. Pan Brothers Tbk. & Subsidiaries
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GARMENT MANUFACTURING
13 PT. Pan Brothers Tbk. & Subsidiaries
Marketing Office
Rep offices
Plants
Indonesia
Singapore
Hong KongTaiwan
Indonesia
Tangerang
Bandung
Boyolali
Sragen
CategoryTotal Machines
(Units)Manufacturing
Capacity (‘000pcs)
Mix catagories (Technical , Woven Garment and Cut & Sewn Knit)
26,626 90,000
Production and distribution spread across key Asian markets
Manufacturing Capabilities in years 2016
Strong manufacturing capabilities with production plants in
Indonesia
Key production facilities
State of the art production facilities are situated across West Java and Central Java
Strategically positioned throughout Asia with offic es in Taiwan, Singapore and Hong Kong to serve customers in regio nal & global markets
Maintains close proximity to both customers’ region al offices in Hong Kong and Singapore as well as key fabric suppl iers in Taiwan
Vietnam
Ungaran
Demak
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ACCREDITATIONS AND AWARD
14 PT. Pan Brothers Tbk. & Subsidiaries
ACCREDITATIONS
�ISO 9001:2008
�ISO 9001:2015
�ISO 14001
�WRAP
�GSV
�SA 8000
�OHSAS
�C-TPAT
SA 8000 ISO 9001:2008 ISO 14001:2004
Note: ISO 9001 : Quality Management System ISO 14001 : Environment Management System WRAP : Workplace Environment Management SystemGSV similar to CT-PAT : Global Security Verification ProgramSA 8000 : Social Accountability Management System OHSAS 18001 : Occupational Health & Safety Management System
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ACCREDITATIONS AND AWARD
15 PT. Pan Brothers Tbk. & Subsidiaries
AWARDS
Indonesia Export Award 2016
Indonesia Best eMarkAward 2016
Best Listed Companies 2016 in Textile and Garment
Indonesia Living Legend
Companies 2016
Green Industry Award 2016
Product quality compliance and overall performance, 2016
Boyolali IndustrialAward 2016
Corporate University
Award 2016
Green Indsutry Award 2017
from Tangerang Government
TOP CSR 2017 on Garment and Textile Industry
Award APTI 2016
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� Sending sewing trainers to Vocational Training Center
� Holding Science and Technology Olympics regularly (2015 - 2016)
� Donating for a total 3000 scholarship to highly performed high school
students in Central Java (2014 - 2017)
� Scholarship package for 100 students in University of Indonesia for
bachelor degree (2017 - 2021)
� Organizing Employment programs on Synergy investment together with
Madrasah and PonPes
� 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
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CORPORATE SOCIAL RESPONSIBILITY
PT. Pan Brothers Tbk. & Subsidiaries
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17PT. Pan Brothers Tbk. & Subsidiaries
Sponsoring medical trip to Papuapresented by The HOPE
Coordinating blood donor regularly
Organizing Employmentprograms on Synergyinvestment together withMadrasah and PonPes
Sending sewing trainers toVocational Training Center
Donating to natural disastervictims
Holding Science and TechnologyOlympics regularly (2015-2016)
Donating for a total 3000 scholarshipto highly performed high schoolstudents in Central Java (2014 - 2017)
Scholarship package for 100students in University ofIndonesia for bachelor degree(2017 - 2021)
Organizing health education suchas cancer, HIV, etc
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18
FINANCIAL OVERVIEW
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GLOBAL PRESENCE – BY SALES
19 PT. Pan Brothers Tbk. & Subsidiaries
2013 2014 2015 2016 1Q17
30.46% 25.47% 28.29% 26.40%29.73%
30.43%
28.97% 19.88% 16.83%13.87%
38.78%44.44%
50.79%55.70% 52.82%
0.33% 1.12% 1.05% 1.07% 3.58%
OTHERS
ASIA
EUROPE
USA
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FINANCIAL HIGHLIGHT
20 PT. Pan Brothers Tbk. & Subsidiaries
SALES (US$m)
NET INCOME (US$m) / SALESEBITDA (US$m) / SALES
GROSS PROFIT (US$m) / SALES
(%) 12.3% 11.7% 12.8% 13.5%
(%) 7.7% 6.4% 6.8% 8.1% (%) 3.1% 2.8% 2.1% 2.8%
10.4 9.3 8.6
13.3
1.1
2013 2014 2015 2016 1Q17
26.1 21.7
28.5
38.9
7.6
2013 2014 2015 2016 1Q17
41.8 39.6
53.6 65.3
13.5
2013 2014 2015 2016 1Q17
339.7 338.5 418.6
482.2
100.2
2013 2014 2015 2016 1Q17
13.5%
1%7.6%
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FINANCIAL HIGHLIGHT
21 PT. Pan Brothers Tbk. & Subsidiaries
TOTAL DEBT & CASH (US$m)
OUSTANDING SHARES (mn shares) NET DEBT / EBITDA (x)
DEBT / EQUITY (x)
3,084.90
6,478.30 6,478.30 6,478.30 6,478.30
2013 2014 2015 2016 1Q17
1.5
2.3
3.3
4.4
2013 2014 2015 2016 1Q17
0.8
0.5
0.7
0.9 0.9
2013 2014 2015 2016 1Q17
78.7 95.4
140.4
205.4 220.4
38.4
127.8
73.6 78.4 85.2
2013 2014 2015 2016 1Q17
Total Cash
Total Debt
-1.5
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APPENDIX
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SUMMARY – Income Statement
23PT. Pan Brothers Tbk. & Subsidiaries
(US$m) 2013 2014 2015 2016 1Q17
Net sales 339.7 338.5 418.6 482.2 100.2
% growth 118.5 99.6 123.6 115.2
COGS -297.9 -299 -365 -416.9 -86.7
% of sales -87.7 -88.3 -87.2 -86.4 -86.5
Gross profit 41.8 39.6 53.6 65.3 13.5
% margin 12.3 11.7 12.8 13.5 13.5
Selling expenses -5.5 -5.3 -8.5 -13.3 -2.1
% of sales -1.6 -1.6 -2.0 -2.7 -2.
G&A -17.5 -20.8 -28 -29.9 -7
% sales -5.2 -6.1 -6.7 -6.2 -7
Operating profit 18.8 13.4 17.1 22.0 4.4
% margin 5.5 3.9 4.1 4.5 4.3
% growth 134.5 74.0 127.5 112.2
Net interest expense -5.2 -6.7 -7.3 -8.3 -4.2
Other income (expenses) -0.8 6.2 1.6 4.5 0.9
Profit before tax 12.7 12.9 11.5 18.3 1.1
Income tax expense -2.3 -3.6 -2.9 -4.9 -0.03
Profit for the year 10.4 9.3 8.6 13.3 1.1
% margin 3.1 2.7 2.0 2.8 1
% growth 150.7 96.7 92.4 136.9
Net Profit (Loss) attributable to equity holders
10.5 9.6 9.4 14.6 2.2
% margin 3.1 3.0 2.2 3.0 2.1
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SUMMARY – Balance Sheet
24 PT. Pan Brothers Tbk. & Subsidiaries
(US$m) 2013* 2014* 2015 2016 1Q17
Cash and bank balances 38.4 127.8 73.6 78.3 85.2
Trade receivables 45.3 51.8 65.7 80.5 58.5
Inventories 55.6 67.4 88.6 101.6 122
Other current assets 30.9 37.2 82.6 126.2 125.9
Total current assets 170.2 284.2 310.6 386.6 391.6
Tangible assets 56.8 75.8 122.9 123.4 122.3
Intangible assets 3.4 3.2 3.1 4.9 4.4
Other 3.7 4.1 6.3 4.6 4.5
Total non-current assets 63.9 83.0 132.3 132.9 131.1
Total assets 234.1 367.3 442.8 519.5 522.7
Short-term borrowings 0.0 12.4 5.5 15.9 7
Trade payables 45.7 48.8 60.4 57.9 39
Other current liabilities 5.1 13.2 20.4 28.9 26
Total current liabilities 50.8 74.4 86.3 102.7 72
Long-term borrowings 78.5 82.9 134.9 182.2 213.4
Other long-term liabilities 6.6 8.5 5.7 6.9 6.7
Total non-current liabilities 85.1 91.4 140.6 189.1 220.1
Total liabilities 135.9 165.8 226.9 291.8 292.1
Shareholders' funds
Total shareholders' funds 95.7 186.2 197.0 210.7 211.4
Non-controlling interest 2.5 15.3 18.9 17 19.2
* As restated on PSAK No.24 (Revised 2013)
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RETAIL
ZOE black side with STYLE over trends, think
TIMELESS is never outdated. ZOE black don’t
believe MINIMALISM as underdressed – ZOE
black are confident to let our personality shines
and use our clothes to enhance it. For us, the
charm is in the MIX. The essence is EFFORTLESS
CHIC.
ZOE black are an INDONESIAN BRAND, but ZOE
black source our fabrics from around the world.
Our design, sourcing & production teams serve
not us only, but also well-known international
brands. ZOE black take pride in our VALUE &
QUALITY.
25PT. Pan Brothers Tbk. & Subsidiaries
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26 PT. Pan Brothers Tbk. & Subsidiaries
Salt n Pepper is a contemporary men casualbrand for upper middle class.
Inspired by designs and trends in the USAand Europe, Salt n Pepper is tailored tobring the latest trends in a perfect fitting forAsian sizes.
It’s a catchy brand, unisex, global meaningand easy for people to remember
Just like how food is tasteless without saltand pepper, we believe that clothes need tohave details added to make it look great
Other brands are FTL and Asylum
RETAIL
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GARMENT MAKING PROCESS
27 PT. Pan Brothers Tbk. & Subsidiaries
Warehouse Fabric Inspection Lab Test
Cutting
Embroidery/PrintNeedle DetectionInspection
Sewing
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28
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
PT. Pan Brothers Tbk. & Subsidiaries
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29 PT. Pan Brothers Tbk. & Subsidiaries
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.