Slide 1: Investor Presentation Q3 and 9M FY20
Investor Presentation Q3 and 9M FY20 11th February 2020 BSE: 524404 | NSE: MARKSANS | ISIN: INE750C01026 ©2019 – Marksans Pharma Limited, All Rights Reserved.
Slide 2: Forward looking statement
Forward looking statement Certain statements in this presentation concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks an
Slide 3: Q3FY20 Highlights
Q3FY20 Highlights 15.8% 30.2% (YoY) (YoY) Mr. Mark Saldanha Managing Director And CEO Revenue EBITDA “ We are extremely pleased with the performance of this PAT Net Debt* quarter where we have exhibited strong YoY growth in revenues of almost 16% and EBITDA of 30%. We continue with our strategy of f
Slide 4: Ratio Analysis
Ratio Analysis ROE ROCE 19.96% 18.72% 19.04% 14.55% 13.94% 13.88% 12.06% 7.45% 4.76% 2.58% Mar-17 Mar-18 Mar-19 Sep-19 Dec-19 Mar-17 Mar-18 Mar-19 Sep-19 Dec-19 Asset Turnover (x) Net Debt to EBITDA (x) 1.31 1.25 1.28 1.63 1.05 0.89 0.49 0.19 0.12 -0.05 Mar-17 Mar-18 Mar-19 Sep-19 Dec-19 Mar-17 Mar-
Slide 5: Agenda
Agenda ▪ Quarterly review – Q3 FY20 ▪ Operational review and financials ▪ Company at a glance ▪ Long-term strategy ▪ Research & development ▪ Segmental revenue composition ▪ Investment rationale ©2019 – Marksans Pharma Limited, All Rights Reserved. 5
Slide 6: Quarterly Review – Q3 FY20
Quarterly Review – Q3 FY20 ©2019 – Marksans Pharma Limited, All Rights Reserved. 6
Slide 7: Growth in Profitability
Growth in Profitability YoY% YoY% YoY Growth YoY Growth Q3FY20 Q3FY19 (Constant 9MFY20 9MFY19 (Constant (%) (%) Rs. Cr. currency) currency) Total Revenue 287.7 248.5 15.8% 24.0% 799.2 752.8 6.2% 13.7% EBITDA 47.3 36.3 30.2% 39.4% 123.4 111.4 10.7% 18.6% EBITDA Margin% 16.4% 14.6% 182 bps 182 bps 15.
Slide 8: Business Review
Business Review YoY% Mix 9MFY20 9MFY19 YoY Growth (%) (Constant (9MFY20) % currency) Rs. Cr. Europe, UK 360.8 323.1 11.7% 25.0% 45.2% US & North America 309.9 309.3 0.2% 7.3% 38.8% Australia & NZ 93.2 79.4 17.4% 27.7% 11.7% Rest of World (ROW) 35.2 41.0 -14.1% -8.0% 4.4% Consolidated Revenue from op
Slide 9: Financials
Financials Consolidated (₹ Cr.) Q3’20 Q2’20 Q3’19 9M'20 9M'19 FY19 Total Revenue 287.7 264.3 248.5 799.2 752.8 1,004.7 Material Consumption 140.2 132.7 128.3 397.2 375.3 500.3 Gross Profit 147.5 131.6 120.2 401.9 377.5 504.4 Gross Margin % 51.3% 49.8% 48.4% 50.3% 50.1% 50.2% Operating Expenses 100.2
Slide 10: Operational review and financials
Operational review and financials ©2019 – Marksans Pharma Limited, All Rights Reserved. 10
Slide 11: Consolidated revenue crossed INR 1000 Cr. in FY19
Consolidated revenue crossed INR 1000 Cr. in FY19 – Inline for robust growth in FY 20 Revenue (₹ Cr.) Topline driven by key geographies 13.9% 9MFY20 799.2 • The revenue growth in FY19 was driven by increasing market share in the US & North American region CAGR FY19 1,004.7 US Region: FY18 913.1 • Re
Slide 12: EBITDA margin increased during FY19
EBITDA margin increased by 418 bps during FY19 – strong growth expected in FY 20 EBITDA (₹ Cr.) EBITDA Margin (%) Steady growth in the profitability 9MFY20 123.4 62.5% 15.4% • Gross margin improved from 42.7% during FY18 13.6% to 50.2% in FY19 due to better product mix in US FY19 136.8 9.5% CAGR • 6
Slide 13: Balance Sheet Trends (Dec 19 vs Mar 19)
Balance Sheet Trends (Dec 19 vs Mar 19) Particulars Dec-19 Mar-19 RoE* RoCE* Net Debt to EBITDA* (₹ Cr.). 19.96% 19.04% 0.49 14.55% 13.88% Net Worth 620.9 542.5 Capital 658.9 571.1 Employed Net debt -8.1 66.4 -0.05 Mar 19 Dec 19 Mar 19 Dec 19 Mar 19 Dec 19 Cash & Bank Ratios calculated using standar
Slide 14: Company at a glance
Company at a glance ©2019 – Marksans Pharma Limited, All Rights Reserved. 14
Slide 15: Company overview
Company overview Business Description Business Model • 94% of revenues comes from regulated • Marksans Pharma Ltd., headquartered at Mumbai, is engaged in Research, markets Manufacturing & Marketing of generic pharmaceutical formulation • Key focus areas lie in the OTC & prescription (Rx) drugs • Fo
Slide 16: Marksans Pharma Evolution
Marksans Pharma Evolution Investment Phase Consolidation Phase Recovery Phase Growth Phase FY05 - 09 FY10 - 12 FY13 - 16 FY17 - 19 • Acquired 3 companies: • Integration of acquired • Acquired Time-Cap • The Company crossed Rs 1. Nova Pharmaceuticals companies was running Laboratories Inc. 1000 crore
Slide 17: Business Model
Business Model Focus on Regulated Forward integrated Wider product basket Markets business model • Marksans commenced business • Marksans commenced • Marksans commenced its journey with CRAMS directed at the UK operations as a formulations with products addressing the pain and Australian markets man
Slide 18: Company structure
Company structure Marksans Pharma (UK) Limited Marksans Holdings Limited 85+ product Distribution of quality licenses; generic pharma; only OTC; Wholesale Regional sales development Manufacturer of distributor of Manufacturer of range of across Asia (China, Japan, OTC Liquids & generic pharma OTC &
Slide 19: Manufacturing capabilities
Manufacturing capabilities Goa, India Southport, UK Farmingdale, USA • Manufactures oral solid tablets and soft • Manufactures non-sterile liquids, • Manufactures soft gels, tablets and gelatin capsules ointments and powder products capsules • One of the biggest manufacturing facility • Supplies to
Slide 20: Long-term strategy
Long-term strategy ©2019 – Marksans Pharma Limited, All Rights Reserved. 20
Slide 21: Strategic focus on regulated markets
Strategic focus on regulated markets Marksans Pharma generates ~95% of its revenues from regulated markets • Marksans Pharma entered strategic tie-ups and acquired key players in major markets to expand its global footprint • Company can generate higher margins by eliminating third parties from the
Slide 22: Niche formulations with few competitors
Niche formulations with few competitors Marksans Pharma is currently one of the most active Indian firms focused in Softgel segment • Differentiated offerings: Focused on softgel capsules with a view to build a differentiated set of offerings in the crowded generics market • Limited competition - Gi
Slide 23: Forward integrated business model
Forward integrated business model R&D and Manufacturing Goa & Mumbai* (India) Southport (UK) Farmingdale (US) Supply chain and EXPORT distribution Australasia EMEA UK & Europe North America / Canada ROW End Consumers Retail chains Pharmacy stores Hospitals *Mumbai has only R&D center in Navi Mumbai
Slide 24: Research & development
Research & development ©2019 – Marksans Pharma Limited, All Rights Reserved. 24
Slide 25: R&D continues to be the backbone of the Marksans
R&D continues to be the backbone of the Marksans In FY19, total R&D expenditure as a percentage of total standalone revenue was 3.37 % R&D Expenditure (₹ Lakhs) R&D activities comprises of: 1,455.1 • Developing generic products and pharmaceutical formulations 806.2 • Identifying niche areas (such as
Slide 26: Segmental revenue composition
Segmental revenue composition ©2019 – Marksans Pharma Limited, All Rights Reserved. 26
Slide 27: The US, North America has increased its share in revenue
The US, North America has increased its share in revenue over the past years REVENUE MIX Europe, UK US, North America Australia, NZ RoW Company’s business is 3% 7% 6% 4% 6% classified under 4 heads: 11% 12% 14% 11% 12% • North America/ US generics 20% • Europe/UK generics 36% 45% 41% 41% • Australia
Slide 28: The UK is the highest contributor to revenues
The UK is the highest contributor to Marksans Pharma’ s revenues Overview of the market • The UK pharmaceutical market is estimated to grow from ~USD 29 billion in 2015 to ~USD 43 billion by 2020, at a CAGR of 8.4%, driven primarily by a robust life sciences 413.0 industry Company presence Total rev
Slide 29: The United States
Marksans is among a few Indian players with a proprietary marketing presence in the US Overview of the market • The US holds over 30-40% of the global pharmaceutical market. It is expected to reach USD 190.4 billion by 2024, at a The projected CAGR of 10.6% during 2019-2024, due to favoring United 4
Slide 30: Australia and New Zealand
Australia and NZ region registered highest growth among regulated markets in FY19 Overview of the market • Australia’s pharmaceutical market is set to rise from >$22.85 billion in 2016 to $25.2 billion by 2020 registering a CAGR of Australia 2% and New 119.9 Company presence Total Revenues • Zealand
Slide 31: Rest of the world
After harnessing the regulated markets, Marksans is venturing out in the emerging countries Overview of the markets • ROW includes markets of South East Asia, MENA, Russian Federation & Africa Rest of 60.3 Company presence Total Revenues • the world (र Cr.) Targeting four major clusters such as Sout
Slide 32: Investment Rationale
Investment Rationale ©2019 – Marksans Pharma Limited, All Rights Reserved. 32
Slide 33: Investment Rationale
The US, the UK and Company is widening its Australia are the key products portfolio in the Marksans’ markets with all of complex and high-margin them being now empowered generics segment with all regulatory approvals Marksans is among a few Marksans is among a mid and small-sized pharma handful of I
Slide 34: Investor Relations Team at Marksans Pharma
Investor Relations Team at Marksans Pharma Jitendra Sharma, CFO Dikshita Jain Marksans Pharma Ltd Christensen Investor Relations Tel: +91 022 40012000 Tel : +91 22 4215 0210 jitendra@marksanspharma.com djain@christensenir.com Corporate Office: 11th Floor Grandeur, Off Veera Desai Road, Opp Gundecha