Neuland Laboratories Ltd. · NSE:NEULANDLAB
Neuland Laboratories — Q1 FY22 Earnings Presentation
44 slides from Neuland Laboratories's earnings presentation, Aug 3, 2021
Slide 1: Exchange cover letter: outcome of board meeting
~"~ NEULAND WI IHU: OPPO!ffUNITY BECOMES RfALITY Neuland Laboratories Limited 11th Floor (5th Office Level), Phoenix IVY Building, Plot No.573A-III, Road No.82, Jubilee Hills, Hyderabad - 500033, Telangana, India. August 3, 2021 Tel: 040 67611600 / 6761 1700 Email: neuland@neulandlabs.com To To www.
Slide 2: Independent Auditor's Review Report (standalone)
1101/B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 & Associates Chartered Accountants Independent Auditor’s Review Report on unaudited quarterly standalone financial results of the Company pursuant to the Regulatio
Slide 3: Statement of Standalone Financial Results
WllF.RE OPPORTUNflY ~KOMlS REALITY Neuland Laboratories Limited 11th Floor (5th Office Level), Phoenix IVY Building, Plot No.573A-III, Road No.82, Jubilee Hills, Hyderabad - 500033, Telangana, India. Tel: 040 67611600 / 67611700 Email: neuland@neuland labs.com www.neulandlabs.com NEULAND LABORATORIE
Slide 4: Notes to standalone financial results
NOTES: 1 The financial results for the quarter 30 June 2021 have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 03 August 2021. 2 The financial results have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed unde
Slide 5: Independent Auditor's Review Report (consolidated)
1101/B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 & Associates Chartered Accountants Independent Auditor’s Review Report on Consolidated Unaudited Quarterly financial results of the Group pursuant to the Regulatio
Slide 6: Auditor's Review Report (continued)
1101/B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 & Associates Chartered Accountants 5. Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that
Slide 7: Statement of Consolidated Financial Results
. {~ /\ / . ~~ NEULAND WI IEllE OPPORTUNITY fif.COMT-$ RT-AUTY Neu land Laboratories Limited 11 th Floor (5th Office Level), Phoenix IVY Building, Plot No.5 73A-III, Road No.82, Jubilee Hills, Hyderabad -500033, Telangana, India. Tel: 040 67611600 / 6761 1700 Email: neuland@neulandlabs.com www.neula
Slide 8: Notes to consolidated financial results
/ ~~a NEVLAND NOTES: The financial results for the quarter ended 30 June 2021 have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 03 August 2021. 2 The financial results have been prepared In accordance with the Indian Accounting Standards {Ind A
Slide 9: Press release: Q1FY22 income at Rs.202.9 crore
WHERE OPPORTUNITY BECOMES REALITY Neuland Q1FY22 income at Rs.202.9 crore EBITDA at Rs. 27.7 crore Hyderabad, India, August 3, 2021 – Neuland Laboratories Limited (NLL) (NSE: NEULANDLAB; BSE:524558), a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermedia
Slide 10: About Neuland Laboratories Limited
_ /~ ~ NEULAND Please note that the transcript of the conference call will be uploaded on the company website in due course. About Neuland Laboratories Limited For over 37 years, Neuland Labs has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with cust
Slide 11: Earnings Presentation Q1 FY22
WHEltE OPPOltTUNITY BECOMES ltEALITY Earnings Presentation Q1 FY 22 BSE CODE : 524558 | NSE SYMBOL : NEULANDLAB | BLOOMBERG: NLL:IN | REUTERS: NEUL.NS
Slide 12: Safe Harbour
Safe Harbour WH ERE O PPORTUN ITY BECOMES REALI TY 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",
Slide 13: Table of Contents
Table of Contents Q1 FY-22 WH ERE O PPORTUN ITY BECOMES REALI TY 1 HIGHLIGHTS 2 BUSINESS OVERVIEW 3 ' CAPABILITIES I , -~- I x:J.. ~ 4 FINANCIALS 5 OUTLOOK 3
Slide 14: Q1 FY-22 Highlights
Q1 FY-22 HIGHLIGHTS
Slide 15: Management Speak
Management Speak WH ERE O PPORTUN ITY BECOMES REALI TY SUCHETH DAVULURI Vice-Chairman & Chief Executive Officer “This quarter’s results are a one off in terms of performance. We witnessed inventory destocking from certain customers amid the pandemic, combined with certain business complexities resul
Slide 16: Key Highlights
Key Highlights Q1 FY22 WH ERE O PPORTUN ITY BECOMES REALI TY Business Highlights Financial Highlights ❖ Prime APIs witnessed growth led by ❖ Total income was Rs. 202.9 crore in Labetalol, Levofloxacin & Enalapril Q1FY22 as against Rs. 206.1 crore in Q1FY21 ❖ In the Specialty segment, Ezetimibe and E
Slide 17: Profit & Loss Snapshot (Standalone)
Profit & Loss Snapshot (Standalone) WH ERE O PPORTUN ITY BECOMES REALI TY QoQ YoY Particulars (Rs. Cr) Q1FY22 Q4FY21 Q1FY21 (%) (%) Total Income 202.9 259.3 (21.7)% 206.1 (1.5)% EBITDA 27.7 40.0 (30.9)% 34.4 (19.7)% EBITDA Margin 13.6% 15.4% (180) bps 16.7% (310) bps Profit Before Tax 12.0 24.3 (50.
Slide 18: Financials (Standalone)
Financials (Standalone) Revenue (Rs. Cr) EBITDA (Rs. Cr) and EBITDA Margin (%) WHERE O PPORTUN ITY BECOMES REA LI TY 19.0% 47 259 17.1% 41 15.4% 40 242 246 13.6% 203 28 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY21 Q3FY21 Q4FY21 Q1FY22 EPS (Rs) PAT (Rs. Cr) f/ ; --- ... ' 10.9% I I 21 ' .... __ .,,,. ,, \ 8.8%
Slide 19: Key Operating Metrics
Key Operating Metrics WH ERE O PPORTUN ITY BECOMES REALI TY YoY Analysis Quarter on Quarter Movement 2% 3% 2% 2% 8% 3% 22% 22% 22% 31% 37% 23% 28% 22% 22% 20% 21% 18% 48% 53% 53% 47% 43% 49% Q1 FY-21 Q1 FY-22 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 ■ Prime ■ Niche/Speciality ■ CMS ■ Others ■ Prime ■ Niche/S
Slide 20: Business Salience (Overall Company)
Business Salience (Overall Company) PRODUCT YoY Analysis QoQ Movement WH ERE O PPORTUN ITY BECOMES REALI TY , ,-------- .... ' , .---------- ' 59% 60% 61% 60% I 60% ' 55% TOP 10 TOP 5 % of Total revenue 39% 42% 43% 39% 42% 38% Q1 FY21 Q1 FY22., , Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 ., ________ ' .... __
Slide 21: Business Salience (Prime)
Business Salience (Prime) * Q1 FY-21 ( ) () 48% Q1 FY-22 53% Q2 FY21 () 47% Q3 FY21 () () 43% Q4 FY21 49% Q1 FY22 () 53% ···················································································································································································
Slide 22: Business Salience (Niche/Speciality)
Business Salience (Niche/Speciality) * PRODUCT Q1 FY-21 0 028% Q1 FY-22 YoY Analysis 22% Q2 FY21 0 00 20% Q3 FY21 19% Q4 FY21 21% QoQ Movement Q1 FY22 22% TOP 10 TOP 5 ,. .,.-------- .... ' I ,. ,-------- .... ' 90% 91% (of Niche/Speciality 87% 91% 89% 83% Revenue) 64% 64% 67% 63% 64% 56% Q1 FY21 Q1
Slide 23: Business Salience (CMS)
Business Salience (CMS) * PRODUCT Q1 FY-21 0 022% YoY Analysis Q1 FY-22 ,-------- 22% '\ Q2 FY21 0 0 0 0 31% Q3 FY21 37% Q4 FY21 QoQ Movement 23% Q1 FY22 22% WH ERE O PPORTUN ITY BECOMES REALI TY TOP 10 TOP 5 ; 99% ,.-------- .... ' 97% ; I 99% \ (of CMS revenue) 86% 88% 84% 92% 89% 70% 72% 65% 92%
Slide 24: Key Operating Metrics – CMS Revenue Split
Key Operating Metrics – CMS Revenue Split Rs. In Cr WHERE O PPORTUN ITY BECOMES REA LI TY Commercial ■ Development YoY Analysis Quarter on Quarter Movement 90 77 45 60 , .,,,.-------- .... ' , -------- .... ' I ' 50 43 44 21 I 44 21 23 23 45 39 27 22 21 21 Q1 FY21 Q1 FY22 Q2 FY21 Q3 FY21 Q4 FY21 Q1
Slide 25: Number of Active CMS Projects
Number of Active CMS Projects WH ERE O PPORTUN ITY BECOMES REALI TY Q1 FY22 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 15 3 7 3 12 6 46 Intermediate 7 4 2 0 8 11 32 Grand Total 22 7 9 3 20 17 78 Q1 FY21 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 12 4 5 4 9 6
Slide 26: Well Placed for a Post-Covid World
Well Placed for a Post- Covid World WHERE O PPORTUN ITY BECOMES REA LI TY Employee and operational repercussions Employee Management proactively addressed ._________,•----G Supply Chain Optimization Supply chain consolidation and vendor collaboration to ensure minimal disruption Investing in pharma
Slide 27: Business Overview
BUSINESS OVERVIEW
Slide 28: Our Journey – Key Milestones
Our Journey – Key Milestones ~{ I ,I '/ - - - - - - - - - NEULAND WH ERE O PPORTUN ITY BECOMES REALI TY Laying Strong Foundation Deepening our Capabilities Increased Sustainable Growth 1984 - 2003 2004 - 2012 2013 -Today Strategic alignment of R&D Acquisition Separate R&D business towards Facility o
Slide 29: Generic Drug Substance (GDS)
Generic Drug Substance (GDS) We started as a Prime API ..Added Speciality molecules for complex products.. WH ERE O PPORTUN ITY BECOMES REALI TY manufacturer… Capability Capability ✓ 3 US FDA and EU GMP compliant ✓ High end complex chemistry capabilities manufacturing facilities ✓ Backend support by
Slide 30: On path to being a preferred partner in CMS
On path to being a preferred partner in CMS.. Services ✓ Manufacturing API to customer specifications ✓ Designing and developing manufacturing processes ✓ Process optimization for competitiveness ✓ Complete CMC partner for the API ✓ Patent protection for processes Business Approach ✓ Local presence
Slide 31: Capabilities
CAPABILITIES
Slide 32: Scaled up Manufacturing Facilities over the years
Scaled up Manufacturing Facilities over the years ~{ I ,I '/ - - - - - - - - - - - - - - - - - NEULAND WH ERE O PPORTUN ITY BECOMES REALI TY Hyderabad Location of All Units 233 KL 356 KL 271 KL UNIT 1 UNIT 2 UNIT 3 BONTHAPALLY PASHAMYLARAM GADDAPOTHARAM Year of 1986 1994 2017 Establishment Mirtazapi
Slide 33: Backed up by sound R&D capabilities
Backed up by sound R&D capabilities WH ERE O PPORTUN ITY BECOMES REALI TY R&D Facility, Hyderabad Neuland’s R&D facility had been inspected by USDFA in February 2016 without any observations Infrastructure Significant R&D Achievements • 15 Development Labs with space for • Several NCE APIs added in
Slide 34: Regulatory Filings Across Geographies
Regulatory Filings Across Geographies WHERE OPPORTUN ITY BECOMES REALITY l♦I Health NMPA Canada Ill~ l§ ~ .IIUH!llf.S 30 NalionaJ Meci,cal ProC11.1c11 Adminis1rat1on Filings with Health Canada 10 20 Japanese DMF filed China DMF filed 57 • Australian Go\'crnmcnt DMFs with Korea Food & □ rug Administr
Slide 35: Global Presence
Global Presence WH ERE O PPORTUN ITY BECOMES REALI TY EUROPE NORTH AMERICA 36% APAC 38% 6% JAPAN MENA INDIA 4% 2% 6% I I I I I I I LATAM I I BD Office in I I I Princeton, New I 8% I I Jersey I I I I Since 2004 I I I I I I I I I Our BD Office in JAPAN I I I I I Since 2007 I I L-----------------------
Slide 36: Neuland Today: Snapshot
Neuland Today: Snapshot WH ERE O PPORTUN ITY BECOMES REALI TY Legacy Scale Capability Reach -, •.- - , - Expertise: 37+ years backed 3 Mfg. Facilities: by robust quality Regulatory Product/ Projects Presence systems, approved with 860 portfolio: 100+ APIs 80+ countries regulatory & KL capacity acros
Slide 37: Financials
FINANCIALS
Slide 38: Continuous Growth
Continuous Growth… WH ERE O PPORTUN ITY BECOMES REALI TY Rs. In Cr 163 FINANCIAL PERFORMANCE 953 HIGHLIGHTS 767 ▪ Revenue CAGR of 19.2% for FY 19-21 670 105 led by growth in all 3 businesses 80 ▪ EBITDA growth of 62.8% CAGR in FY 61 19-21 due to balanced contribution from both GDS and CMS business 2
Slide 39: Stable Balance Sheet
Stable Balance Sheet.. WH ERE O PPORTUN ITY BECOMES REALI TY Particulars Mar-19 Mar-20 Mar-21 Jun-21 Current Ratio (x) ROCE (%) (Rs. Cr) 1.47 11.93 Shareholders 1.42 696 706 782 791 7.60 ' funds 1.37 1.37 5.89 3.89 Net Debt 194 214 152 172 2019 2020 2021 Q1FY22 2019 2020 2021 Q1FY22 Investments 8 8
Slide 40: Macroeconomic factors influencing Neuland
Macroeconomic factors influencing Neuland WHERE OPPORTUNITY BECOMES REALITY IMPACT NEULAND RESPONSE Government regulation: ▪ Consistent regulatory audits ▪ Successfully cleared all USFDA audits since inception approvals, audits ▪ Increased scrutiny prior to drug approvals ▪ Consistent record of new
Slide 41: Outlook
OUTLOOK
Slide 42: Laying Foundation for our Growth Strategy
..Laying Foundation for our Growth Strategy ~{ I ,I '/ - - - - - - - - - - - - - - - - - NEULAND CREATE AN ORGANIZATION THAT RESULTS IN VALUE FOR ALL STAKEHOLDERS WH ERE O PPORTUN ITY BECOMES REALI TY BUSINESS SCALE Extend capabilities to Invest into capacity to organically build a augment sales and
Slide 43: Contact Us
Contact Us WHERE OPPORTUN ln' BECOMES REALITY For over 37 Years, Neuland Laboratories Ltd. For further information contact (BSE:524558, NSE: NEULANDLAB) has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with customers in close IR Desk to 80 countries.
Slide 44: Thank You
I _,/;{ NEULAND WH ER.E OPPOR.TUNITY BECOMES R.EALITY Thank You Confidential. © 2021 Neuland Laboratories Ltd. All rights reserved.