Neuland Laboratories Ltd. · NSE:NEULANDLAB
Neuland Laboratories — Q2 FY2017 Earnings Presentation
34 slides from Neuland Laboratories's earnings presentation, 2016
Slide 1: Investor Presentation Q2FY17
Investor Presentation Q2FY17 BSE CODE : 524558 | NSE SYMBOL : NEULANDLAB | BLOOMBERG: NLL:IN | REUTERS: NEUL.NS © 2016, Neuland Laboratories Limited. All Rights Reserved
Slide 2: Safe Harbour
Safe Harbour Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "
Slide 3: Business Overview
Business Overview © 2016, Neuland Laboratories Limited. All Rights Reserved
Slide 4: Company Overview
Company Overview Legacy Scale Capability Reach 32+ years in 2 regulatory Portfolio of 75+ pharma with approved 80+ countries of products across 10 presence robust quality manufacturing sites therapeutic systems, with ~500 KL categories regulatory and capacity 75% of revenues compliance 650+ filings
Slide 5: Our Journey
Our Journey Laying Deepening our On course to Strong Foundation capabilities profitable growth Development Expansion Execution 01 02 03 1984-2003 2004-2012 2013-Today Incorporation in 1984 and IPO Investments in capacity Strategic alignment of business in 1994 expansion towards niche APIs and
Slide 6: Business Verticals
Business Verticals Work executed exclusively for the customers on Mature APIs, typically with products at various phases high competition in the API of their life-cycle(2) Custom space Manufacturing Prime APIs Solutions (CMS) Prime APIs and Niche APIs collectively form Generic Niche APIs Drugs Subst
Slide 7: Generic Drug Substance (GDS)
Generic Drug Substance(GDS) Prime APIs Capability Business Approach Strategy Forward 2 US FDA and EU GMP Work on molecules Maintain leadership compliant either with a business position in key manufacturing leadership approach molecule facilities or partnership with Work on process Collecti
Slide 8: Custom Manufacturing Solutions (CMS)
Custom Manufacturing Solutions(CMS) Services Business Approach Strategy Forward Manufacturing API to Local presence in US Add depth in customer and Japan with technical capabilities specifications technical as well as using enzymatic Designing and commercial technology developing employees
Slide 9: Business Mix
Business Mix Revenue by Verticals Revenue by end territory ROW 11% 13% 17% 11% Japan 18% 22% 4% 27% Europe 53% 71% 65% 57% North America 31% FY-14 FY-15 FY-16 India CMS NICHE PRIME 1% 9
Slide 10: Capabilities
Capabilities © 2016, Neuland Laboratories Limited. All Rights Reserved 10
Slide 11: Two regulatory approved manufacturing facilities
Two regulatory approved manufacturing facilities Bonthapally, Hyderabad – 181.5 KL Pashamylaram, Hyderabad – 310.2 KL Year of Year of establishment 1994 1986 establishment Employee Employee strength 321 399 strength Ramipril, Mirtazapine, Enalapril Ciprofloxacin Hcl, Entacapone, Key products Maleate
Slide 12: One state of art R&D centre
One state of art R&D centre R&D Facility, Hyderabad* Infrastructure • 11 Development Labs • 60 Fume hoods • Analytical Lab • Kilo Lab dedicated for Scale up • Dedicated Labs for Peptides • Separate facility for D2 analogues Significant R&D Achievements: • Several NCE APIs added in NDA or commercial
Slide 13: Compliance Framework
Compliance Framework Quality Control EHS Quality Control facilitated with Wet Hazard and EHS Impact studies regularly Chemistry, Instrumentation & Microbiology conducted Laboratories 24X7 occupational health center with Equipped with sophisticated instruments ambulance facility like HPLCs, G
Slide 14: Regulatory Filings
Regulatory Filings 25 5 Filings with Japanese DMF Health Canada 144 51 filed ROW filings including DMFs with Turkey, Mexico, USFDA Brazil etc 11 5 filings with IDLs filed KFDA Korea ~400 EUDMF filings across Germany, 19 CEPs Received for different 650+ France, Poland, products Filings till date Ital
Slide 15: Financials
Financials © 2016, Neuland Laboratories Limited. All Rights Reserved 15
Slide 16: H1FY17 Standalone Performance
H1FY17 Standalone Performance Financial Performance Operating Highlights Total Operating income was ₹2,993.5 mn for Successfully cleared ANVISA audit for our Unit H1FY17 as compared to ₹2,519.0 mn in the II H1FY16, an increase of 19% Business momentum in Salmetrol as we EBITDA stood at ₹502.
Slide 17: Key Operating Metric
Key Operating Metric YoY Analysis Quarter on Quarter Movement 4% 22% 19% 16% 19% 23% 24% 23% 30% 26% 25% 29% 29% 29% 25% 29% 66% 53% 53% 57% 53% 47% 51% 47% Q1FY16 Q1FY17 Q2FY16 Q2FY17 Q3FY15 Q4FY16 Q1FY17 Q2FY17 CMS NICHE PRIME CMS NICHE PRIME 17
Slide 18: Key Operating Metric
Key Operating Metric CMS Business Depth 10 9 8 5 6 6 5 3 1 3 2 3 4 3 1 2 1 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Clinical Commercial *- Quantities taken for validation and launch are considered as Commercial 18
Slide 19: Historical Financials
Historical Financials Financial Performance (INR Cr) Current Ratio (x) 550 510 100 1.2 464 466 469 0.9 0.9 1.1 450 0.8 350 2012 2013 2014 2015 2016 50 150 Debt to Equity (x) -50 0 FY12 FY13 FY14 FY15 FY16 Sales 450 464 466 469 510 2.5 1.9 1.5 1.2 EBITDA 48 61 73 67 82 0.9 Net Profit 2 14 27 16 27 20
Slide 20: Future Strategy
Future Strategy © 2016, Neuland Laboratories Limited. All Rights Reserved
Slide 21: Growth Strategy for Business
Growth Strategy for Business Business Scale Extend capabilities to Invest into capacity to organically build a augment sales and sustainable GDS and CMS accelerate business growth business Chemistry Relationships Deploy advanced Leverage on Long – chemistry skills to add standing relationships with
Slide 22: Change in Corporate Structure
Change in Corporate Structure The Board of Directors of the Company at their meeting held on August 27, 2016 in-principle approved a proposal to merge Neuland Health Sciences Private Limited (Holding Company- NHSPL) and Neuland Pharma Research Private Limited (Fellow subsidiary - NPRPL) with Neuland
Slide 23: Current Group Structure
Current Group Structure Neuland Health Sciences Pvt. Ltd.(NHSPL) (Peptides Research and Marketing) Promoter Group holding: 67.11% Others holding: 32.89% Neuland Laboratories Ltd.(NLL) Neuland Pharma Research Pvt. Ltd.(NPRPL) NHSPL: 51.67% (Research and Contract Manufacturing Services) Promoters/Prom
Slide 24: Rationale of Scheme
Rationale of Scheme The amalgamation will build more stronger and sustainable business and enhance the potential for future growth. Combined entity with strong financials will have greater access to sources of funds, improved cash flows and increased net worth. Consolidation of intellectual pr
Slide 25: Transaction Structure
Transaction Structure Appointed Date April 1st, 2016 Scheme to involve share exchange 552 equity shares of NLL for every 1000 equity shares of NHSPL* Terms 410 equity shares of NLL for every 100 equity shares of NPRPL^ Intercompany shareholding will be cancelled# Pre Merger Post Merger Shareho
Slide 26: Valuation Overview
Valuation Overview Valuation analysis has been undertaken by independent Valuation firm, Deloitte Haskins & Sells Valuation methodology based on commonly used and accepted methods to the extent relevant and applicable including Comparable Companies Multiples method / Earnings Capitalisation Va
Slide 27: Expected Timelines
Expected Timelines Q3 FY17 Approval by Boards BSE and NSE of all companies approval and announcement Application to Court Convened Jurisdictional High Shareholders and Court/NCLT Creditors approval High Court Transaction approval completion Expected by Q2 FY18 27
Slide 28: Post Merger Structure
Post Merger Structure Promoters/Promoter Group: 41.29% Public: 58.71% Neuland Laboratories Inc Neuland Laboratories, K.K. NLL holding : 100% NLL holding : 100% More stronger and sustainable organization with enhanced potential for future growth 28
Slide 29: Pre and post merger shareholding
Pre and post merger shareholding Sl. Category of Shareholder Pre-merger % Post merger % No 1 Promoter & Promoter Group (a+b) 51.68 41.29 a. Neuland Health Sciences Private limited 51.67 - - Promoters & Promoter Group individuals 34.68 - - Non-Promoters 17.00 - b. Promoters & Promoter Group individua
Slide 30: For further information contact: IR Desk Neuland Labs
For further information contact: IR Desk Ankit Gupta Neuland Labs Christensen IR +91 40 3021 1600 +91 22 4215 0210 ir@Neulandlabs.com ankitgupta@christensenir.com
Slide 31: Industry structure and key drivers
Industry structure and key drivers API Industry’s Share in Global Contract Key Drivers Manufacturing Industry • Increased demand for biopharmaceutical manufacturing services Finished Dosage • Complex and potent drug development will Formulations, 33% lead to higher demand of High Potency Active Fore
Slide 32: Board and Key Management
Board and Key Management Dr. D. R. Rao D Sucheth Rao D Saharsh Rao Chairman and Managing Vice Chairman and Joint Managing Director Director CEO M.Sc. from Andhra University, Post Graduate Diploma in Technology – IIT Mechanical Engineer Engineering Graduate Kharagpur MBA in Corporate Finance
Slide 33: Board and Key Management
Board and Key Management Managing Director and Executive Vice-Chairman at Glaxo India Humayun Dhanrajgir Ex-President of Organization of Pharmaceutical Production of India Independent Director Dr. Christopher M. Ph.D. in Organic Chemistry - Purdue University, U.S.A. Cimarusti Post Doctoral Research
Slide 34: Board and Key Management
Board and Key Management Deputy Managing Director of SBI. Presently on the Boards of various companies, including SBI Capital Markets Ltd., SBI Global Factors Ltd., Tata Bharati Rao Teleservices Ltd., Delphi-TVS Diesel Systems Ltd. and Vijaya Bank. Independent Director Masters degree in statistics f
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