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COMPANY PROFILE

PT. PAN BROTHERS Tbk

&

SUBSIDIARIES

With Integrity, Commitment, Precision, and Passion for The Company Enhancement

CONTENTS

COMPANY OVERVIEW 3

PT. Pan Brothers Tbk. & Subsidiaries

FINANCIAL OVERVIEW 15

APPENDIX 19

2

COMPANY OVERVIEW

3

PT. PAN BROTHERS Tbk.


Indonesia’s largest listed garment manufacturer.

Well-established business founded in 1980 and listed on the Indonesia Stock Exchange since 1990.

Strong export focus-markets include US, Europe, Asia,

Canada, and Australia.

Long-standing relationships with many leading global fashion and apparel brands, with a strong CSR/ethics focus.

Plants located in Tangerang, West Java and Central Java with 22,186

year.

Plants located in Tangerang, West Java and Central Java with 22,186machines and a production capacity of 75 million pieces of garment per

year.

Selective expansion into both upstream and downstream segments.

4

GROUP STRUCTURE


PT. PAN BROTHERS TBK.

PT. Trisetijo Manunggal

Utama

26.33%

Public

53.81%

PT. Ganda Sawit Utama

19.86%

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%)

5

GROUP OVERVIEW

• Started in 1980.

• Manufactures

Woven

Garments such

as Padded and

Light Weight

Jackets, Pants,

Shorts and

Casual Pants as

well as Cut and

Sewn Knit

Garments such

as Polo Shirts,

Golf Shirts,

Track Suits,

Sweat Suits

• Acquired in

2005.

• Manufactures

Technical,

Functional and

Active Wear

Jackets and

Outer Wear

suited for

Snow

Boarding,

Skiing, Jogging,

Hiking, and

other Sports

and Outdoor

Activities

• Established in

2013 as a JV

with

Mitsubishi.

• Planned to

build 7 garment

manufacturing

facilities

• 4 Facilities

already built in

2014.


• Established in

2014.

• Manufactures

Technical,

Functional and

Active Wear

Jackets and

Outer Wear

suited for Snow

Boarding,

Skiing, Jogging,

Hiking, and

other Sports

and Outdoor

Activities

• Established in

2014.

• Manufactures

Cut and Sewn

Knit Garments

such as Polo

Shirts, Golf

Shirts, Track

Suits, Sweat

Suits

Garment ManufacturingBusiness

Group

Companies

Brief

Description

PT Teodore

Pan Garmindo

“TPG”

PT Prima Sejati

Sejahtera

“PSS”

PT Eco Smart

Garment

Indonesia“ESGI”

PT Pancaprima

Ekabrothers

“PPEB”

PT Pan

Brothers Tbk

“PBT”

6


• Incorporated in

Indonesia to

engage in

apparel retail

business

• Launched its

women’s

fashion brand,

Zoe in 2013.

• JV men’s

fashion brand ,

Salt n Pepper in

2015.


• 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.

• 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 OVERVIEWRetailFabric Supply

Sewing &

Embroidery

Thread

Product Development and Buying AgentBusiness

Group

Companies

Brief

Description

PT Hollit

International“Hollit”


PT Apparelindo

Prima Sentosa

“APS”

PT Ocean

Asia Industry“OAI”

PT Victory

Pan Multitex“VPM”

Cosmic Gear

Limited“Cosmic”

Continent 8

Pte Ltd“C8”

7

PBRX MILESTONE


2013

2007

1980

2005

2012

2008

2011

Expansion of PPEB at

Sukabumi (Woven

Factory)

Expansion of PPEB at

Sukabumi (Woven

Factory)

Established 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


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)

a) Expansion of PBT at


b) Expansion of PPEB at

Boyolali

(Woven Factory)

a) Expansion of PBT at


b) Expansion of PPEB 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)

8

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)

CUSTOMERSCUSTOMERS By Sales Year 2015

PT. Pan Brothers Tbk. & Subsidiaries9

MITSUBISHI

INDUSTRY OUTLOOK•Textile and garment exports from Indonesia are expected to grow from 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

• Rebate 10 % on new machineries investment or replacement on textile industry

• Issued economic policies package, among others for labour intensive industries (Tax incentive, Electricity tariff discount, and employee tax deduction).

• Expected Signed Free trade Agreement with Europe in 2017

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 total GDP).

Indonesian Retail Outlook


Source: Citi Investment Research & Analysis; McKinsey Consumer Insight; Index Valuation Division API Publication; Goverment Policy Package;BPS

10

INTEGRATED BUSINESS MODEL


Fibre Production

Spinning, Fabric

weaving, knitting,

finishing

Designing, cutting,

sewing, buttonholing,

ironing

Marketing and

distributionRetail Outlets

Raw Material Production

Textile Manufacturing

Apparel Manufacturing

Branded Apparel Players

Retailers

• Actively pursuing JV / M&A opportunities

into spinning & fabric mills sector.

• Set up Victory Pan Multitex as Sewing and

Embroidery Thread manufacturer in 2014.

• Acquired Hollit International, a product

development company.

• Established Apparelindo Prima Sentosa to

increase presence in apparel retail business,

with in-house brand, ZOE & JV SnP

• JV / M&A with some local brands and multi-

brand retailer.

��

Upstream expansion Downstream expansion

�

• Joint Venture with Mitsubishi to set up 7

factories in Central Java area and already

built 4 factories in 2014, expansion expected

to finish in 2016

• Set up Prima Sejati Sejahtera in Boyolali in

Central Java in 2014

• Set up Teodore Pan Garmindo in West Java

in 2014.

Garment Manufacturing

11

KEY PILLARS OF FURTHER GROWTH

Upstream – Category Expansion

• Expansion into new sectors, such as:

• Spinning mills

• Fabric mills (synthetic woven fabric)

• Target route: JV or M&A

• VPM (Victory Pan Multitex) at West Java in 2014

Manufacturing Expansion

• Domestic

• JV with Mitsubishi (ESGI) increasing capacity up to 48 million pcs in 3 years

• TPG (Teodore Pan Garmindo) at West Java

• Target M&A 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, 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.


GARMENT MANUFACTURING


Buying agents

Rep offices

Plants

Indonesia

Singapore

Hong Kong

Taiwan

Indonesia

Tangerang

Sukabumi & Bandung

Boyolali

Sragen

CategoryTotal Machines

(Units)

Manufacturing Capacity

(‘000pcs)

Mix catagories (Technical , Woven

Garment and Cut & Sewn Knit)22,186 75,000

Production and distribution spread across key Asian markets

Manufacturing Capabilities

Strong manufacturing capabilities with production plants in Indonesia

Key production facilities

State of the art production facilities are situated across Tangerang, Sukabumi,

Bandung, Boyolali and Sragen

Strategically positioned throughout Asia with representative offices in

Taiwan, Singapore and HK to serve customers in regional & global markets

Maintains close proximity to both customers and fabric suppliers for the most

efficient coordination of orders and samples

13

ACCREDITATIONS AND AWARD


ACCREDITATIONS AWARDS

Best of The

Best Award

2015

Indonesia

Export Award

2015

�ISO 9001:2008

�ISO 14001

�WRAP

�GSV

�SA 8000

�OHSAS

�CT-PAT

SA 8000

ISO 9001:2008

ISO 14001:2004

Note:

ISO 9001 : Quality Management System

ISO 14001 : Environment Management System

WRAP : Workplace Environment Management System

GSV similar to CT-PAT : Global Security Verification Program

SA 8000 : Social Accountability Management System

OHSAS 18001 : Occupational Health & Safety Management System

Green

Industry

Award 2015

Best Textile &

Garment

Company 2014

Award

APTI

2015

Award

GCG

2015

14

Sustainable

Business Award

2013

FINANCIAL OVERVIEW

15

FINANCIAL HIGHLIGHT


SALES (US$m)

NET INCOME (US$m) / Margin %EBITDA (US$m) / Margin %

GROSS PROFIT (US$m) / Margin %

Margin

(%)11.1% 11.1% 12.3% 11.7%

Margin

(%)6.9% 7.0% 7.7% 6.4% Margin

(%)3.0% 2.4% 3.1% 2.7%

7.4 6.9

10.4 9.3 8.6

2011 2012 2013 2014 2015

17.3 20.1

26.1 21.7

28.5

2011 2012 2013 2014 2015

27.7 31.7

41.8 39.6

53.6

2011 2012 2013 2014 2015

249.0 286.6

339.7 338.5

418.6

2011 2012 2013 2014 2015

12.8%

2.0%6.8%

16

GLOBAL PRESENCE – BY SALES


2011 2012 2013 2014 2015

32.61% 30.77% 30.46%25.47%

28.27%

49.72%

35.06%30.43%

28.97% 19.87%

17.40%

33.02%38.78%

44.44%50.76%

0.27% 1.15% 0.33% 1.11% 1.05%

OTHERS

ASIA

EUROPE

USA

17

FINANCIAL HIGHLIGHT


TOTAL DEBT & CASH (US$m)

OUSTANDING SHARES (mn shares) DEBT / EBITDA (x)

DEBT / EQUITY (x)

3,063.86 3,065.61 3,084.90

6,478.30 6,478.30

2011 2012 2013 2014 2015

3.3 3.5 3.0

4.4 4.9

2011 2012 2013 2014 2015

0.7 0.8 0.8

0.5

0.7

2011 2012 2013 2014 2015

57.1 70.0

78.7

95.4

140.4

19.7 17.7

38.4

127.8

73.6

2011 2012 2013 2014 2015

Total Debt

Total Cash

18

APPENDIX

19

SUMMARY – Income Statement


(US$m) 2011 2012 2013 2014 2015

Net sales 249.0 286.6 339.7 338.5 418.6

% growth 157.5 115.1 118.5 99.6 123.6

COGS -221.3 -254.9 -297.9 -298.9 -364.9

% of sales -88.9 -88.9 -87.7 -88.3 -87.2

Gross profit 27.7 31.7 41.8 39.6 53.6

% margin 11.1 11.1 12.3 11.7 12.8

Selling expenses -4.3 -4.0 -5.5 -5.3 -8.5

% of sales -1.7 -1.4 -1.6 -1.6 -2.0

G&A -13.7 -13.8 -17.5 -20.7 -27.9

% sales -5.5 -4.8 -5.2 -6.1 -6.7

Operating profit 9.7 14.0 18.8 13.4 17.1

% margin 3.9 4.9 5.5 3.9 4.1

% growth 147.3 143.5 134.5 74.0 127.5

Net interest expense -1.5 -1.9 -4.7 -0.9 3.8

Other income (expenses) 0.0 -4.9 -6.0 -0.5 5.6

Profit before tax 9.4 9.0 12.7 12.9 11.5

Income tax expense -2.0 -2.1 -2.3 -3.6 2.9

Profit for the year 7.4 6.9 10.4 9.3 8.6

% margin 3.0 2.4 3.1 2.7 2.0

% growth 187.0 93.2 150.7 96.7 92.4

Net Profit (Loss) attributable to

equity holders7.4 7.5 10.5 9.6 9.4

% margin 3.0 2.6 3.1 3.0 2.2

20

SUMMARY – Balance Sheet


(US$m) 2011 2012 2013* 2014* 2015

Cash and bank balances 19.7 17.7 38.4 127.8 73.6

Trade receivables 35.7 52.7 45.3 51.8 65.7

Inventories 48.0 54.1 55.6 67.4 88.6

Other current assets 18.8 23.1 30.9 37.3 82.6

Total current assets 122.3 147.6 170.2 284.2 310.6

Tangible assets 43.9 53.0 56.8 75.8 122.9

Intangible assets 3.4 3.4 3.4 3.2 3.1

Other 4.4 4.3 3.7 4.0 6.5

Total non-current assets 51.6 60.7 63.9 83.0 132.3

Total assets 173.9 208.3 234.1 367.3 442.8

Short-term borrowings 56.6 69.8 0.0 8.4 5.5

Trade payables 25.6 40.3 45.7 48.8 60.4

Other current liabilities 5.9 5.3 5.1 17.1 20.4

Total current liabilities 88.1 115.4 50.8 74.4 86.3

Long-term borrowings 0.5 0.2 78.4 82.9 134.9

Other long-term liabilities 4.7 4.9 6.6 8.5 5.7

Total non-current liabilities 5.2 5.1 85 91.4 140.7

Total liabilities 93.3 120.5 135.9 165.8 226.9

Shareholders' funds

Total shareholders' funds 78.6 85.2 95.7 186.2 197.0

Non-controlling interest 2.0 2.6 2.5 15.3 18.9

* As restated on PSAK No.24 (Revised 2013) 21

RETAIL


ZOE

22

Zoe side with STYLE over trends, think TIMELESS is

never outdated. Zoe don’t believe MINIMALISM

as underdressed – Zoe 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 are an INDONESIAN BRAND, but Zoe source

our fabrics from around the world. Our design,

sourcing & production teams serve not us only,

but also well-known international brands.

Zoe take pride in our VALUE & QUALITY.

23 PT. Pan Brothers Tbk. & Subsidiaries

Salt n Pepper is a contemporary menscasual brand 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 brand in Salt n Pepper is FTL andAsylum

RETAIL

GARMENT MAKING PROCESS


Warehouse Fabric Inspection Lab Test

Cutting

Embroidery/PrintNeedle DetectionInspection

Sewing

24

PT. Pan Brothers Tbk.Address : Jl. Siliwangi No. 178, Jatiuwung, Tangerang 15133, Indonesia

Phone : 6221-5900 718 Fax : 6221-5900 717

Email : [email protected]/ [email protected]

Website : www.panbrotherstbk.com


THANK YOU


STRICLY PRIVATE AND CONFIDENTIAL

DISCLAIMER

This 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 information contained 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 in this 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 not necessarily 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 confidential and not misuse, copy, disclose, or distribute, in whole or in part, without PBRX

express written permission. PBRX disclaims all liability for any direct, indirect, consequential or 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.

26

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