PT. PAN BROTHERS Tbk. & SUBSIDIARIES...9 PT. Pan Brothers Tbk. & Subsidiaries 2013 2007 1980 2005 2012 2011 Established PBT (Cut & Sewn Knit OEM Factory) a) Expansion Woven Factory

1

COMPANY PROFILE 2019 Q 2

PT. PAN BROTHERS Tbk. & SUBSIDIARIES

PT. Pan Brothers Tbk. & Subsidiaries

CONTENTS

COMPANY OVERVIEW 3

FINANCIAL OVERVIEW 19

APPENDIX 23

2

PT. Pan Brothers Tbk. & Subsidiaries3

COMPANY OVERVIEW


PT. PAN BROTHERS Tbk.Vision:TO BE AN INTEGRATED AND WORLDWIDE APPAREL SUPPLIER

• Indonesia’s largest listed garmentmanufacturer.

• Well-established business founded in 1980and listed on the Indonesia Stock Exchangesince 1990.

• Intense focus on exports – markets includeUS, Europe, Asia, Canada, Australia andNew Zealand.

• Long-standing relationships with numeroustop global fashion and apparel brands, whilemaintaining strong work ethics and CSR.

• Plants located in Banten, West Java andCentral Java targeted production capacity of117 million pcs garment annually in 2021.

• Selective expansion in both upstream anddownstream segments.


GROUP STRUCTURE

PT. Trisetijo ManunggalUtama27.98%

PT. Ganda SawitUtama19.86%

Public52.16%

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%)

PT. Apparelindo Prima Sentosa (99.00%)

Continent 8 Pte. Ltd. (65.21%) PT. Teodore Pan Garmindo (51.00%)

PT. Victory Pan Multitex (51.00%)

PT. Berkah Indo Garment (99.00%) PB International B.V. (100.00%)

PB. Island Pte. Ltd. (51.00%)


GROUP OVERVIEW

Business

Group Companies

Description

Garment Manufacturing

PT Pan

Brothers Tbk

“PBT”

PT Pancaprima

Ekabrothers

PT Eco Smart

Garment

Indonesia

“PPEB”“ESGI” “PSS”

PT Teodore

Pan Garmindo

“TPG”

PT Berkah Indo

Garment

“BIG”

• Established in

1980.

• Manufactures

woven and

cut & sewn

knits

garments,

such as

padded and

light weight

jackets,

pants, short,

casual pants,

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 6

garment

manufacturing

facilities

• 4 Facilities

already built

in 2014 and

next expansion

expected to

be done in

2021.

• Manufactures

woven

garments such

as ultra light

down, parka,

bottom, etc

• 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&sewn

knits and light

woven

garments,

such as polo

shirts,golf

shirts,track

suits,sweat

suit,board

shorts,swim

shorts; and

light weight

jackets,

casual pants.

• Established in

2016.

• Manufactures

Woven Garment

such as Casual

Shirts,Tops,

Jackets, Casual

Bottoms, Casual

Shorts, Denims.


GROUP OVERVIEW

Business

Group Companies

Description

Product Development and Marketing

• 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

• Incorporated in Singapore.

• Engages in sourcing activities that allow the group’s products to reach wider international markets.


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

• Engages in product development and material sourcing.


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



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


• Incorporated in Netherlands

• PBF is in the business as an agent and engages in garment trading activities. PBF was set up to support the group’s activities in

Europe.

PT Hollit

International

“Hollit”

Continent 8 Pte Ltd

“C8”

Cosmic Gear

Limited

“Cosmic”

PBA PBL

PB Apparel Pte. Ltd PB Island Pte. Ltd

“PBA” “PBL”

PB Fashion B.V.

“PBF”

PBF


GROUP OVERVIEW

Business

Group Companies

Description

Sewing &

Embroidery

ThreadFabric Supply Retail & Others

PT Victory

Pan Multitex

“VPM”

PT Ocean Asia

Industry“OAI”

PT Apparelindo

Prima Sentosa

“APS”

• Established in 2014.

• Produces various sewing and embroidery thread.

• Established 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 2013 engage in apparel retail and other businesses

• Launched its women’s fashion brand, ZOE label, ZOE Black and Sokya.

• JV men’s fashion brand : S n P, Asylum , F T L, etc. in 2015.

• Launched women’s brand Wastu in 2017.


2013

2007

1980

2005

2012

2011Established PBT (Cut &

Sewn Knit OEM Factory)

a) Expansion Woven

Factory at Boyolali

b) Expansion Woven

Factory at Sragen

Acquired PPEB (Light &

Heavy Woven Jacket

Factory)

a) Set up OAI (Knit

Fabric Mills)

b) Set up Continent 8

(Product Dev)

Expansion Woven

Factories at Boyolali

a) Set up APS (Apparel Retail &

Brand etc)

b) Set up ESGI (Woven Factory)

PBRX MILESTONE

Acquired Hollit

(Product Development

Company))

Started PB Apparel

(Product Dev)

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)

d) Set up Cosmic Gear

(Product Development)

2014

a) Set up BIG (Woven Factory)

b) Set up PB International BV

(Buying Agent and Marketing

Office )

c) TPG Tasik 1st expansion

2016

Set up PB Island Pte. Ltd.

(Product Development)

2017

2015


CUSTOMERS


INDUSTRY OUTLOOK

Strong Outlook Despite Global Uncertainties

• Textile and garment exports from Indonesia are expected to grow from US$11.9bn in 2016 (https://ekonomi.kompas.com/read/2017 /04/12/194441726/) to US$ 75.3bn in 2030.

• Proportion of Indonesian exports in total global demand to rise from 1.7% in 2018 to 5% in 2030.

Indonesian Government Support on Textile &

Garment Industry

• Economic Policy Packages issued for labor intensive industries providingcorporate & payroll tax incentives, electricity tariff discounts.

• FTA IA-CEPA with Australia already signed in March 4, 2019 and with theEuropean Union expected to be signed soon in 2019.

• Government has expressed support to strengthen the domesticmanufacturing industry and reducing dependence on commodity basedexports

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 Indonesia and areconstrained by rising labor cost.

Indonesian Retail Outlook

• Indonesia has huge population of more than 260 million people.

• In 2030, it is expected the middle class income earners will reach 141 miopeople.

Source: KemenPerin; Index Valuation Division API Publication; Goverment Policy Package;PWC Outlook; Boston Consulting; BPS


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 expansionDownstream expansionApparel Manufacturing

• Actively pursuing JV / M&A /

collaboration in fabric mills (synthetic

woven fabric ) 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 targeted in 2021

• Set up Teodore Pan Garmindo in West

Java in 2014, expansion at Tasikmalaya

in 2016 and another expansion in 2019.

• Set up product development company.

• Established Apparelindo Prima Sentosa

to increase presence in apparel retail

business, with in-house brand, ZOE

Label and ZOE Black, SnP, FTL, Asylum,

Sokya and Wastu.

• JV / M&A with some local brands and

multi-brand retailer.


KEY PILLARS OF GROWTH

Upstream – Backward Vertical integration

Manufacturing Expansion

Downstream – Channel Expansion

Process Optimalization

• Expansion into new sectors, such as:

• Fabric mills (synthetic woven fabric)

• Target route: JV or M&A or Collaboration with Fabric mills.

• Domestic

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

• TPG (Teodore Pan Garmindo) expansion at West Java

• Automation in some production process in all garment facilities

• Year 2021 total targeted setup capacity 117 million pcs.

• Regional

• Expansion to other countries to improveaccess to target markets and avail of local competitive advantages.

• Target countries: Vietnam and other prospect countries.

• Continuous expansion of brands, ZOE Label/ ZOE Black, Sokya, SnP, FTL, Asylum and Wastu.

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

• Collaboration with global fashion brand.

• Running the e-commerce sector.

• Target route: JV or M&A

• Automation in some process.

• Digitalization

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


GARMENT MANUFACTURING

Production and distribution spread across key Asian markets Key production facilities

Marketing Office

Rep offices

Plants

Indonesia

Singapore

Hong Kong

Taiwan

Indonesia

Tangerang

BoyolaliSragen

Ungaran

Vietnam

Manufacturing Garment Capabilities in Indonesia years 2019

CategoryManufacturing

Capacity (‘000pcs)

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

96,000Eq polo shirts

The largest garment manufacturing capabilities in Indonesia

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

Fully support by secondary process such as: Garment Embroidery facility, Garment Printing facility, Garment Wash / Laundry facility

Support by Fabric mills producing various kinds of knit fabrics; and Sewing and Embroidery Thread. factory

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


ACCREDITATIONS

�ISO 9001:2015

�ISO 14001

�WRAP

�GSV

�SA 8000

�OHSAS

�C-TPAT

�BWI

�EDGE

SA 8000 ISO 9001 EDGE GENDER EQUALITY

Note:

ISO 9001 : Quality Management System

ISO 14001 : Environment Management System

WRAP : Workplace Environment Management System

GSV similar to C-TPAT : Global Security Verification Program

SA 8000 : Social Accountability Management System

OHSAS 18001 : Occupational Health & Safety Management System

Member of Better Work Indonesia (BWI): On improving working conditions in the

garment industry.

EDGE : Gender Equality Certification

ISO 14001


AWARDS

4.0 IndustryAward 2019

Green Industry

Award 2018

Top 5 GCG in Textile & Garment

Award 2018

The Top 50 Companies

2017

Indonesia Export Award

2018

TOP CSR 2018on Garment and Textile Industry

Enterprise Risk

Management 2018

The Best Indonesian TPT Public Company

2019

The Most Innovative Material Design

Award 2018

The Best Human

Capital Award 2019


CORPORATE SOCIAL RESPONSIBILITY

• Providing sewing Trainers to Vocational Training Center

• Conducting Science and Technology Olympics regularly

• Awarding Scholarships to 3000 high performing High School

students from Central Java

• Awarding Scholarships to 100 University of Indonesia Students for

the bachelor degree program (2017 - 2021)

• Organizing Employment programs on Synergy investment in

association with Madrasahs and PonPes

• Receiving students on internships both technical and

management.

• Sponsoring medical trip to Papua organized by “The HOPE”

• Organizing health education through awareness programs for

cancer, HIV, etc

• Donation to victims of natural disaster.

• Organizing blood donor camps on regular basis.


CORPORATE SOCIAL RESPONSIBILITY

Organizing blood donation camps on a regular basis

Awarding PT Pan Brothers Tbkas TOP CSR 2018

Sponsoring medical trip to Papua organized by “The Hope”

Awarding Scholarships to 100 University of Indonesia Students for the bachelor’s degree program (2017 – 2021)

Organizing employment programs on Synergy investment in association with Madrasahs and PonPes

Awarding Scholarships to 3000 high performing students from Central Java High Schools (2014 – 2017)

Donating to Lombok Earthquake 2018Donating to Palu Sulawesi 2018 Eartquake and Tsunami

Donating to victims of BantenTsunami 2018


FINANCIAL OVERVIEW


GLOBAL PRESENCE – BY SALES

2014 2015 2016 2017 2018

25.47% 28.29% 26.40% 26.00% 25.46%

28.97% 19.88%16.83%

16.78% 15.23%

44.44%50.79%

55.70% 52.63% 56.67%

1.12% 1.05% 1.07% 4.59%2.64%

OTHERS

ASIA

EUROPE

USA


FINANCIAL HIGHLIGHTS

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

418.6 482.2

549.4 611.4

284.8

2015 2016 2017 2018 2019 Q2

53.6 65.3

76.6 81.3

38.1

2015 2016 2017 2018 2019 Q2

(%) 12.8% 13.5% 13.9% 13.3% 13.4%

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

28.5

38.9 42.2

52.1

26.5

2015 2016 2017 2018 2019 Q2

8.6

13.3

7.8

16.3

8.5

2015 2016 2017 2018 2019 Q2

(%)(%) 2.1% 2.8% 1.4% 2.7% 3.0%6.8% 8.1% 7.7% 8.5% 9.3%


FINANCIAL HIGHLIGHTS

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

140.4

205.4

240.0 257.0

305.7

73.6 78.4 79.6 72.4 73.1

2015 2016 2017 2018 2019 Q2

0.7

0.9 1.0 1.0

1.2

2015 2016 2017 2018 2019 Q2

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

442.8

519.5 573.4 579.1

636.3

2015 2016 2017 2018 2019 Q2

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

2015 2016 2017 2018 2019 Q2


APPENDIX


SUMMARY – Consolidate Statements of Profit or Loss

(US$m) 2015 2016 2017 2018 2019 Q2

Net sales 418.6 482.2 549.4 611.4 284.8

% growth 123.6 115.2 113.9 111.3

COGS (365) (416.9) (472.7) (530.1) (246.7)

% of sales (87.2) (86.4) (86.1) (86.7) (86.6)

Gross profit 53.6 65.3 76.6 81.3 38.1

% margin 12.8 13.5 13.9 13.3 13.4

Selling expenses (8.5) (13.3) (17.3) (13.6) (5.3)

% of sales (2.0) (2.7) (3.2) (2.2) (1.8)

G&A (28.0) (29.9) (31.3) (31.2) (13.7)

% sales (6.7) (6.2) (5.7) (5.1) (4.8)

Operating profit 17.1 22.0 28.0 36.5 19.2

% margin 4.1 4.5 5.1 6.0 6.7

% growth 127.5 112.2 127.4 130.2

Net interest expense (3..8) (6.3) (15.5) (19.2) (8.6)

Other income (expenses) (1.8) 2.6 (1.6) (3.3) (0.6)

Profit before tax 11.5 18.3 11.0 20.5 11.2

Income tax expense (2.9) (4.9) (3.1) (4.3) (3.9)

Profit for the year 8.6 13.3 7.8 16.3 8.5

% margin 2.0 2.8 1.4 2.7 3.0

% growth 92.4 154.1 58.8 208.0

Net Profit (Loss) attributable to equity holders

9.4 14.6 9.3 18.3 8.5

% margin 2.2 3.1 1.7 3.0 3.0


SUMMARY – Financial Position

(US$m) 2015 2016 2017 2018 2019 Q2

Cash and bank balances 73.6 78.3 79.6 72.4 73.1

Trade receivables 65.7 80.5 95.6 107.4 114.8

Inventories 88.6 101.6 119.4 128.4 162.0

Other current assets 82.6 126.2 144.4 142.8 155.6

Total current assets 310.6 386.6 439.0 451.0 505.5

Tangible assets 122.9 123.4 121.3 114.0 117.2

Intangible assets 3.1 4.9 5.1 5.0 4.9

Other 6.3 4.6 7.9 9.0 8.6

Total non-current assets 132.3 132.9 134.3 128.1 130.8

Total assets 442.8 519.5 573.4 579.1 636.3

Short-term borrowings 5.5 15.9 1.8 2.8 2.1

Trade payables 60.4 57.9 59.2 39.7 38.5

Other current liabilities 20.4 28.9 34.9 27.4 29.7

Total current liabilities 86.3 102.7 95.8 69.8 70.3

Long-term borrowings (Syndication, Bonds, Etc) 134.9 182.2 237.0 253.6 302.9

Other long-term liabilities 5.7 6.9 5.7 5.0 5.0

Total non-current liabilities 140.6 189.1 242.7 258.6 307.9

Total liabilities 226.9 291.8 338.6 328.5 378.2

Shareholders' funds

Total shareholders' funds 197.0 210.7 220.3 238.0 245.6

Non-controlling interest 18.9 16.9 14.5 12.6 12.6


RETAIL

Z O E black & Z O E label

ZOE label & ZOE black side with STYLE overtrends, think TIMELESS is never outdated.ZOE don’t believe MINIMALISM asunderdressed – ZOE is confident to let ourpersonality shines and use our clothes toenhance it. For us, the charm is in the MIX.The essence is EFFORTLESS CHIC.

ZOE is an INDONESIAN BRAND, but ZOEsource our fabrics from around the world.Our design, sourcing & production teamsserve not us only, but also well-knowninternational brands. ZOE take pride in ourVALUE & QUALITY.

� Website: www.zoelabel.com

� Instg: @ zoethelabel


RETAIL

Founded in 2017, Wastu is an Indonesian

brand specializing in the elegantly

understated piece and crafted from the ideas

of an Indonesian fashion designer, Auguste

Soesastro. Taken from Javanese Sanskrit,

Wastu means 'Architecture', which has been

Auguste's interest and has inspired him to

harmonize architectural lines, geometry, and

structures into wearable items. Wastu

embodies a way of life in stylish collections

affordable for any budget.

� 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

Inspection Metal Detection Embroidery/Print


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

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

Corporate Secretary Email : [email protected]/ [email protected]

Marketing Email : [email protected]

Website : www.panbrotherstbk.comVideo profile : https://youtu.be/DxXT9J4EKDE


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.

Documents

PT. PAN BROTHERS Tbk. & SUBSIDIARIES...9 PT. Pan Brothers Tbk. & Subsidiaries 2013 2007 1980 2005 2012 2011 Established PBT (Cut & Sewn Knit OEM Factory) a) Expansion Woven Factory