Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA

Sun Pharmaceutical Industries — Investor Presentation (May 2018)

56 slides from Sun Pharmaceutical Industries's investor presentation, May 2018

  1. Slide 1: Creating Lasting Value

    Creating Lasting Value Investor Presentation – May 2018 NSE:SUNPHARMA | BSE:524715 | Bloomberg:SUNP IN | Reuters:SUN.BO WWW.SUNPHARMA.COM

  2. Slide 2: Disclaimer

    Disclaimer 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”, “pl

  3. Slide 3: Contents

    Contents 1 Sun Pharma at a glance 2 Long-term Strategy 3 Global Specialty Initiatives 4 Revenue Composition, History & Acquisition Track Record 5 Business Operations, R&D, Manufacturing 6 Corporate Governance 7 Financials – P&L, Balance Sheet, Cash Flows & Ratios 8 Key Milestones Targeted © Sun Phar

  4. Slide 4: Sun Pharma at a glance

    Sun Pharma at a glance 5th Largest Global Specialty Generic Company US • Ranked 5th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Europe • Expanding presence in Europe Manufacturing

  5. Slide 5: World's 5th Largest Specialty Generic Pharma Co

    World’s 5th Largest Specialty Generic Pharma Co 0.0 2.02017 Worldwide 4.0 Generic Sales 6.0 (US$ in billions) 8.0 10.0 12.0 Teva 11.2 Mylan 11.2 Novartis 8.8 Pfizer 5.2 Sun Pharma 4.1 Fresenius 3.0 Lupin 2.4 Endo 2.3 Aurobindo 2.1 Aspen Pharmacare 2.0 Sanofi 2.0 Dr. Reddy 1.7 Nichi-Iko Pharma 1.6 Ap

  6. Slide 6: Sun Pharma today

    Sun Pharma today US Formulations India Branded Generics 5th largest generics company in US* with a strong No.1 ranked with 13 classes of doctor categories pipeline (139 ANDAs & 3 NDAs awaiting approval) Leading position in high growth chronic therapies Presence in generics, Specialty and branded seg

  7. Slide 7: Driving Long Term Growth

    Driving Long Term Growth • Vertically integrated operations • Enhance share of specialty business globally • Optimize operational costs • Achieve differentiation by focusing on technically complex products • Focus on key markets – achieve critical mass • Speed to market • Ensure sustained compliance

  8. Slide 8: Our Specialty Initiatives

    Our Specialty Initiatives • In-licensed Ilumya (a monoclonal antibody targeting IL-23) from MSD for treating chronic plaque psoriasis- Biologics License Application (BLA) Filed with US FDA and EMA for European market. USFDA approval received in March 2018. Launch preparations are ongoing. • Acquired

  9. Slide 9: Highly Diversified Revenue Base

    Highly Diversified Revenue Base Emerging Markets 19% Western Europe & Other Markets # 11% API & Others 5% India Branded FY18 Sales Formulations Rs 261 billion 31% US Formulations 34% # Includes Western Europe, Canada, Japan , Australia, New Zealand and other markets. © Sun Pharmaceutical Industries

  10. Slide 10: Impressive Track Record of Growth

    Impressive Track Record of Growth (All Figures in INR Billion) 260.7 51.8 35.7 49.1 33.7 112.4 14.9 Adjusted Sales 15.5 EBITDA Net Profit 33.6 CAGR CAGR CAGR 2.8 2.5 8.3 26% 22% 19% FY03 FY08 FY13 FY18 FY03 FY08 FY13 FY18 FY03 FY08 FY13 FY18 70.8 33.9 14.9 14.0 15.2 Operating Free Cash 6.2 Adjusted

  11. Slide 11: Consistent profitability and returns

    Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin (adjusted) 83% 45% 35% 75% 77% 73% 72% 29% 29% 23% 27% 18% 19% 20% 13% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 ROCE ROE Market Cap (USD Bn) 27% 31% 35 30 25 16% 19% 20% 14% 15% 18% 20 18 8

  12. Slide 12: Sustained Profitability Vs. Peers

    Sustained Profitability Vs. Peers Superior business model Margins consistently higher than peers# Gross Margin EBITDA Margin Net Margin 83% 82% 77% 44% 45% 75% 73% 72% 35% 32% 66% 64% 29% 29% 63% 63% 28% 62% 62% 23% 19% 22% 23% 18% 20% 14% 14% 14% 19% 19% 19% 12% 13% 10% 8% 18% FY13 FY14 FY15 FY16 F

  13. Slide 13: Creating Value, Continuously…

    Creating Value, Continuously… • Licensing agreement with Almirall for Tildrakizumab in Europe for Psoriasis • Announced positive results from Phase-3 trials for Tildrakizumab $7.5Mn • Entry into Japan -Acquired 14 brands from Novartis Began with 5 Acquired Dusa Acquired URL • Acquired Biosintez in R

  14. Slide 14: Key Deals & Rationale

    Key Deals & Rationale Year Deals Country Rationale Acquired global rights for OTX-101 & 2016 Global Enhances specialty pipeline. Odomzo 2016 Acquired Biosintez Russia Local manufacturing capability to enhance presence in Russian market Licensing agreement with Almirall for 2016 Europe Strengthening

  15. Slide 15: Successful track record of turning around acquisitions

    Successful track record of turning around acquisitions ROCE 27% 26% 23% 35% 41% 19% 22% 30% 20% 27% 14% 16% 8% 350 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 300 Assets of: Taro Bryan Dusa 250 Hungary URL Able Labs Ranbaxy Chattem InSite Vision 200 Ocular Tech Odomzo 150 Yonsa 100 50 -

  16. Slide 16: US Business

    US Business 34% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16

  17. Slide 17: US Business at a glance

    US Business at a glance 5th Largest Pharma Company in the US Generics Market * • Largest generic dermatology company and amongst top 5 Dermatology Segment branded dermatology company in the US • Wide basket of 561 ANDAs & 42 NDAs filed and 422 ANDAs & 39 Comprehensive Portfolio NDAs approved across

  18. Slide 18: US Business - Significant Ramp-up in Sales

    US Business - Significant Ramp-up in Sales Key Milestones in US Sales in Rs billion 10 year CAGR 20% FY98 • Entry in US through Caraco acquisition • Acquired Taro Pharma – Entry into US 137 138 FY10 dermatology market 135 • Acquired DUSA - Entry in branded FY13 specialty market FY13 • Acquired URL’s

  19. Slide 19: ANDA Pipeline - Significant ramp up

    ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 422 ANDA Approvals by Therapeutic Area 597 110 572 584 561 97 478 449 438 413 427 422 397 344 60 311 250 46 30 26 19 15 12 7 Gastro Allergy Antibiotic CNS CVS Metabolism Other Skin Pain Oncology FY12 FY13 FY14 FY15 FY16 FY17 FY18 Cumulativ

  20. Slide 20: India Branded Generic Business

    India Branded Generic Business 31% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 20

  21. Slide 21: India Business at a glance

    India Business at a glance No. 1 in India • No. 1 ranked with 8.5% market share Market Position** • Growth of 6% equal to average industry growth of 6% Prescription Ranking## • No. 1 ranked by prescriptions with 13 different classes of doctors Chronic Segment • Market leader in the chronic segment A

  22. Slide 22: Largest Pharma Company in India

    Largest Pharma Company in India Market Share Branded Generic Sales in India as of 12 Months ended Mar 2018 (US$ in mn) Sun Pharma 8.5% 1,572 1,155 Abbott + Abbott HC + Novo 6.2% 850 Cipla 4.6% 770 Zydus + Biochem 4.2% 672 Mankind 3.6% 669 Lupin 3.6 641 Alkem + Cachet + Indchemie 3.5% 586 Torrent 3.2

  23. Slide 23: India Business – Sales ramp-up

    India Business – Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 32 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up 10 year CAGR 18% Others Opthalmology 2% 6% 80 Cardiology 77 Respiratory 4% 18% 71 Vitamins / 67 Minerals / Nutrien

  24. Slide 24: Strong Customer Focus Drives Market Share Gains

    Strong Customer Focus Drives Market Share Gains Therapy focused marketing Strong increase in market share • 9,200+ sales representatives • Sun pharma market share has consistently increased from 2.4% in 2000 to 8.0% in • Covering over 600,000* doctors 2017 (IMS Data for March’18) * Does not exclude

  25. Slide 25: Leadership in key therapeutic areas

    Leadership in key therapeutic areas* Number 1 Ranking with 13 Doctor Categories* Prescription Ranking Specialist Feb ’15 Feb ‘16 Feb ‘17 Feb ‘18 Psychiatrists 1 1 1 1 Neurologists 1 1 1 1 Cardiologists 1 1 1 1 Orthopaedic 1 1 1 1 Gastroenterologists 1 1 1 1 Nephrologists 1 1 1 1 Diabetologists 1 1 1

  26. Slide 26: Best-in-class field force productivity

    Best-in-class field force productivity Sales Per Representative (Rs. Mn) Field Force Productivity 11.1 11.0 Impact of Ranbaxy 10.1 Acquisition Sun • Rs 8.6 Mn/ MR Pharma 8.6 7.5 7.8 Industry 7.4 • Rs 5.2 Mn/ MR Average* * Approximation based on brokerage reports • Well trained and scientifically ori

  27. Slide 27: Emerging Markets

    Emerging Markets 18% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 27

  28. Slide 28: Emerging Markets Business at a glance

    Emerging Markets Business at a glance Largest Indian Company in Emerging Markets Global footprint • Presence in over 100 markets • Brazil, Mexico, Russia, Romania, South Africa and complementary Focus Markets & affiliated markets Product Portfolio • Extensive basket of branded products Customer Focu

  29. Slide 29: Western Europe, Canada, Japan, ANZ & Other Markets

    Western Europe, Canada, Japan, ANZ & Other Markets 11% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29

  30. Slide 30: Western Europe & Other Markets at a glance

    Western Europe & Other Markets at a glance Amongst the leading Indian Companies • Across all major markets in Western Europe, Canada, A&NZ, Japan Market Presence and few other markets • Expanding basket of products including injectables and hospital Product Portfolio products as well as products for

  31. Slide 31: Global Consumer Healthcare Business

    Global Consumer Healthcare Business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 31

  32. Slide 32: Global Consumer Healthcare Business at a glance

    Global Consumer Healthcare Business at a glance An Attractive Opportunity India • Amongst the top 10 consumer healthcare companies Global Presence • Operates in about 20+ countries • Core markets include. India, Russia, Romania, Nigeria, South Africa & Myanmar Market Focus • Growth markets include U

  33. Slide 33: Active Pharmaceutical Ingredients (API) Business

    Active Pharmaceutical Ingredients (API) Business 6% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33

  34. Slide 34: API Business

    API Business Backward Integration – Strategic Importance • Backward integration provides cost competitiveness and supply Strategic Importance reliability Customers • Large generic and innovator companies Product Portfolio • Approximately 300 APIs Pipeline Development • Approx. 20 APIs scaled up annu

  35. Slide 35: Research & Development

    Research & Development © Sun Pharmaceutical Industries Limited. All Rights Reserved. 35

  36. Slide 36: Research & Development

    Research & Development Cumulative R&D Spend of over Rs 130 billion to date • R&D spend at 8.6% of Net Sales for FY18 R&D Spend • Strong cash flows & large scale to support R&D investments • Strong research teams in generics, finished dosage development, Capabilities biological support, chemistry • 2

  37. Slide 37: R&D Investments

    R&D Investments R&D Investments Filings and Approvals 5.6% 6.3% 6.5% 7.2% 8.3% 7.6% 8.6% ANDA NDA/BLA DMF/CEP Patents 23.0 23.1 22.5 561 396 1106 42 19.6 422 291 10.4 1065 7.0 39 4.4 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Filed Approved Filed Approved Filed Approved Filed Granted R&D Investments (Rs Bn)

  38. Slide 38: Global Manufacturing Presence

    Global Manufacturing Presence © Sun Pharmaceutical Industries Limited. All Rights Reserved. 38

  39. Slide 39: Global Manufacturing Presence

    Global Manufacturing Presence World Class Manufacturing Infrastructure • 41 manufacturing facilities across India, the Americas, Asia, Africa, Extensive Global Footprint Australia and Europe • Vertically integrated network across six continents enabling high Integrated Network quality, low cost and

  40. Slide 40: Global Manufacturing Footprint

    Global Manufacturing Footprint Tiszavasvari Haifa Penza (Hungary) (Israel) (Russia) Ontario (Canada) (US) Cluj (Romania) Billerica, MA Giza, (Egypt) New Jersey(US) Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Cranbury Bangladesh Plant Port Fairy (Australia) Wilmington M.A

  41. Slide 41: Finished Dosage Manufacturing

    Finished Dosage Manufacturing 27 Finished dosage manufacturing sites • India : 13, US : 4 • Canada, Hungary , Israel, Bangladesh, South Africa, Malaysia, Romania, Egypt, Nigeria and Russia : 1 each • Capacities available for a variety of finished dosages Orals Injectables / Sterile Topicals Tablets

  42. Slide 42: API Manufacturing

    API Manufacturing 14 API manufacturing locations • India : 9, Australia : 2, Israel : 1, US : 1, Hungary : 1 Panoli & Ahmednagar Australia, Hungary & (both India) Tennessee (US) • International regulatory approvals: USFDA, API • Controlled substances European Key Plants manufacture • Stand alone uni

  43. Slide 43: Corporate Governance

    Corporate Governance Chairman Our philosophy on corporate governance envisages Israel Makov working towards high levels of transparency, Former President & CEO of Teva accountability and consistent value systems across Pharma. Industries Ltd. all facets of operations Independent Director Independent

  44. Slide 44: Financials

    Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44

  45. Slide 45: Financials

    Financials Market Capitalisation Rs. 1,170 billion / US$ 17 billion ( All Figures in Rs. Mn ) FY14 YoY FY15 YoY FY16 YoY FY17 YoY FY18 YoY P&L Summary Sales 1,60,044 42% 2,72,451 70% 2,78,881 2% 3,02,642 9% 2,60,659 -14% Gross Profit 1,32,250 44% 2,05,059 55% 2,15,577 5% 2,21,335 3% 1,86,413 -16% EB

  46. Slide 46: Sales Break-up

    Sales Break-up In INR Billion In USD Million Sales 279 303 261 4,262 4,511 4,044 245 16 225 385 15 26 330 229 22 15 675 461 45 548 36 30 751 48 2066 2051 138 135 1357 87 77 80 1093 1155 1246 71 FY16 FY17 FY18 FY16 FY17 FY18 India Formulations US Formulations #Exchange Rate : US$1 = Rs 65.43 (for FY1

  47. Slide 47: EBITDA Trend

    EBITDA Trend In INR Billion Sales 112 160 272 279 303 261 % of Sales 19% 17% 25% 23% 27% 28% 14% 13% 16% 17% 16% 21% 24% 25% 30% 33% 28% 31% 44% 44% 29% 27% 29% 20% FY13 FY14 FY15 FY16 FY17 FY18 EBITDA Other Expenditure Personnel Costs Material Costs © Sun Pharmaceutical Industries Limited. All Righ

  48. Slide 48: Cash Flow

    Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 71 34 67 33 33 31 56 25 40 34 15 22 FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY16 FY17 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48

  49. Slide 49: Financial Ratios

    Financial Ratios FY14 FY15 FY16 FY17 FY18 Gr ow th (%) Sales 42.4 70.2 2.4 8.5 (13.9) Gross Profit 44.4 55.1 5.1 2.7 (15.8) EBITDA 45.0 8.5 (2.1) 16.1 (40.9) Net Profit 5.3 44.5 0.1 53.2 (69.0) Net Profit (Adjusted) 58.7 # (15.6) # 9.5 # 33.1 (51.7) # Margins (%) Gross Margin 82.6 75.3 77.3 73.1 71.

  50. Slide 50: Key Financials Q4 & FY18

    Key Financials Q4 & FY18 ( All Figures in Rs. Mn ) Q4 FY18 Q4 FY17 CHANGE FY18 FY17 CHANGE Gross Sales 67,110 68,252 -2% 2,60,660 3,02,642 -14% Gross Profit 49,410 46,300 7% 1,86,413 2,21,335 -16% Gross Margin 74% 68% 72% 73% EBITDA 14,174 12,357 15% 51,846 75,394 -31% EBITDA Margin 21% 18% 20% 25%

  51. Slide 51: Sales Breakup Q4 & FY18

    Sales Breakup Q4 & FY18 ( All Figures in Rs. Mn ) Q4 FY18 Q4 FY17 CHANGE FY18 FY17 CHANGE Formulation India 19,626 19,164 2% 80,293 77,491 4% US 23,716 25,545 -7% 87,466 1,37,588 -36% Emerging Markets 12,794 12,127 5% 48,392 45,299 7% ROW 7,437 7,323 2% 29,740 25,832 15% Sub-total 63,573 64,159 -1%

  52. Slide 52: Key Milestones targeted for future

    Key Milestones targeted for future • Enhance share of specialty/branded business US • Continue to focus on complex generics and high entry barrier segments Business • Ensure broad product offering to customers across multiple dosage forms • Gain critical mass in key therapeutic segments • Improve pr

  53. Slide 53: Key Milestones targeted for future

    Key Milestones targeted for future Global Consumer • Maintain leadership in existing markets through focus on innovative solutions • Enhance presence in high growth markets Healthcare • Develop more products through expanded R&D team for global markets R&D • Focus on developing complex products acro

  54. Slide 54: FY19 Guidance

    FY19 Guidance Consolidated Revenues • Low double digit growth over FY18 R&D Investments • Approximately 8%-9% of revenues to be invested in R&D Investing for Future • Invest in R&D and in building the specialty business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 54

  55. Slide 55: Sun Pharma at a glance

    Sun Pharma at a glance 5th Largest Global Specialty Generic Company US • Ranked 5th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Europe • Expanding presence in Europe Manufacturing

  56. Slide 56: Thank You

    Thank You! For more information please contact: Investors: Nimish Desai Thank You Tel : +91 22 4324 4324, Ext 2778 Tel Direct +91 22 43242778 nimish.desai@sunpharma.com Corporate Address: SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2017 Sun Pharmaceutical Indus

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