Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (April 2017)
56 slides from Sun Pharmaceutical Industries's investor presentation, April 2017
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – April 2017 NSE:SUNPHARMA | BSE:524715 | Bloomberg:SUNP IN | Reuters:SUN.BO WWW.SUNPHARMA.COM
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
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
Slide 4: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company US • Ranked 4th 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
Slide 5: World's 4th Largest Specialty Generic Pharma Co
World’s 4th Largest Specialty Generic Pharma Co 2016 Worldwide Generic Sales (US$ in billions) Teva 9.9 Mylan 9.6 Novartis 9.0 Sun Pharma 4.6 Allergan 4.2 Pfizer 3.5 Endo International 2.5 Fresenius 2.5 Lupin 2.5 Sanofi 2.1 Aspen Pharmacare 2.0 Aurobindo 1.9 Cipla 1.7 Dr. Reddy 1.7 Nichi-Iko Pharma
Slide 6: Sun Pharma today
Sun Pharma today US Formulations India Branded Generics 4th largest generics company in US* with one of the No.1 ranked with 11 classes of doctor categories strongest pipeline (149 ANDAs & 4 NDAs awaiting Leading position in high growth chronic therapies approval) Specializes in technically complex
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
Slide 8: Our Specialty Initiatives
Our Specialty Initiatives • In-licensed Tildrakizumab (a monoclonal antibody targeting IL-23) from MSD for treating chronic plaque psoriasis- Announced positive results from Phase-3 clinical trials in May’16 • Acquired Ocular Technologies – Gives access to global rights for Seciera – for treating Dr
Slide 9: Highly Diversified Revenue Base
Highly Diversified Revenue Base Emerging Markets 13% Western Europe & Other Markets # 8% India Branded Formulations 26% API & Others FY16 Sales 5% Rs 280 billion US Formulations 48% # Includes Western Europe, Canada, Australia & New Zealand, Japan and other markets. © Sun Pharmaceutical Industries L
Slide 10: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in INR Billion) 277.4 78.0 54.0 Adjusted 18.2 Net Sales EBITDA Net Profit 19.5 57.2 CAGR CAGR 5.7 CAGR 16.4 4.9 5.6 30% 1.5 30% 1.4 28% FY01 FY06 FY11 FY16 FY01 FY06 FY11 FY16 FY01 FY06 FY11 FY16 67.7 33.9 22.4 19.4 23.9 Operating Free Cash 7.5 Adjusted
Slide 11: Consistent profitability and returns
Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin (adjusted) 83% 44% 45% 35% 82% 41% 32% 32% 80% 75% 77% 29% 28% 18% 19% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 ROCE ROE Market Cap (USD Bn) 27% 27% 31% 35 24% 30 26% 24% 15% 19% 19% 20 15%
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% 80% 77% 45% 35% 44% 33% 75% 32% 32% 75% 41% 34% 19% 67% 18% 28% 14% 14% 13% 14% 29% 12% 63% 62% 62% 61% 7% 60% 22% 23% 20% 20% 19% 19% FY11 FY12 FY13 FY14 F
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 • Entry into Japan -Acquired 14 brands from Began with 5 Acquired URL Novartis IPO - Rs. 550 Mn Acquired Taro Acquired Dusa •
Slide 14: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale Acquired global rights for Seciera & 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
Slide 15: Successful track record of turning around acquisitions
Successful track record of turning around acquisitions ROCE 24% 25% 26% 27% 38% 37% 18% 34% 18% 24% 27% 15% 15% 350 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 300 Taro Assets of: Dusa 250 URL Bryan Ranbaxy Hungary InSite Vision 200 Able Labs Chattem 150 100 50 - FY94 FY95 FY96 FY97 FY98
Slide 16: US Business
US Business 48% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16
Slide 17: US Business at a glance
US Business at a glance 4th 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 573 ANDAs & 40 NDAs filed and 424 ANDAs & 36 Comprehensive Portfolio NDAs approved across
Slide 18: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Key Milestones in US Sales in Rs billion FY98 • Entry in US through Caraco acquisition 137 135 FY98-FY10 • Ramp-up in US business • Launched many complex generics & FY08 onwards few FTFs • Acquired Taro Pharma – Entry into 98 FY10 dermatology market • Acqui
Slide 19: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 424 ANDA Approvals by Therapeutic Area 597 573 102 102 478 449 438 424 397 377 344 63 311 250 44 225 207 30 26 21 84 14 12 10 CNS CVS Oncology Metabolism Gastro Pain Allergy Other Skin Antibiotic FY10 FY11 FY12 FY13 FY14 FY15 Dec-16 Cumula
Slide 20: India Branded Generic Business
India Branded Generic Business 26% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 20
Slide 21: India Business at a glance
India Business at a glance No. 1 in India • No. 1 ranked with 8.6% market share Market Position** • Growth of 11% in-line with average industry growth of 10% Prescription Ranking## • No. 1 ranked by prescriptions with 11 different classes of doctors Chronic Segment • Market leader in the chronic seg
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 2017 (US$ in mn) Sun Pharma - 8.6% 1,422 1,021 Abbott - 6.2% 787 Cipla - 4.8% 701 Zydus + Biochem - 4.2% 608 Mankind - 3.7% 586 Alkem + Cachet + Indchemie -3.5% 547 Lupin - 3.3% 499 Glaxo - 3.1% 4
Slide 23: India Business – Sales ramp-up
India Business – Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 31 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up 73 Others 67 Opthalmology 2% 6% Cardiology Respiratory 4% 19% Vitamins / Minerals / Nutrients, 4% Gynaecology, 4%
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 8.1% in • Covering over 600,000* doctors 2016 (IMS Data for Dec’16) * Does not exclude ov
Slide 25: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 11 Doctor Categories* Prescription Ranking Specialist Feb ’14 Feb ‘15 Feb ‘16 Feb ‘17 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
Slide 26: Best-in-class field force productivity
Best-in-class field force productivity Sales Per Representative (Rs. Mn) Field Force Productivity FY10 – FY14 numbers exclude Ranbaxy * FY15 & FY16 numbers include the impact of Ranbaxy merger Sun 11.1 11.0 • Rs 7.8 Mn/ MR Pharma 10.1 9.2 Industry • Rs 5.2 Mn/ MR 7.8 Average* 7.1 7.5 * Approximation
Slide 27: Emerging Markets
Emerging Markets 13% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 27
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
Slide 29: Western Europe, Canada, Japan, ANZ & Other Markets
Western Europe, Canada, Japan, ANZ & Other Markets 8% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29
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
Slide 31: Global Consumer Healthcare Business
Global Consumer Healthcare Business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 31
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 • 4 core markets viz., India, Russia, Romania, and Nigeria Market Focus • 4 growth markets viz., Ukraine, Poland, South
Slide 33: Active Pharmaceutical Ingredients (API) Business
Active Pharmaceutical Ingredients (API) Business 5% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33
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
Slide 35: Research & Development
Research & Development © Sun Pharmaceutical Industries Limited. All Rights Reserved. 35
Slide 36: Research & Development
Research & Development Cumulative R&D Spend of Rs 100 billion to date • R&D spend at 8.3% of Net Sales for FY16* 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 • 2,000
Slide 37: R&D Investments
R&D Investments R&D Expenditure Filings and Approvals 5.6% 5.8% 5.6% 6.3% 6.5% 7.2% 8.3% ANDA DMF/CEP Patents 23.0 573 419 1120 19.6 424 773 306 10.4 7.0 4.4 3.3 2.5 FY10 FY11 FY12 FY13 FY14 FY15* FY16* Filed Approved Filed Approved Filed Granted R&D Expenses (Rs Bn) R&D Exp (% of Net Sales) FY09 –
Slide 38: Global Manufacturing Presence
Global Manufacturing Presence © Sun Pharmaceutical Industries Limited. All Rights Reserved. 38
Slide 39: Global Manufacturing Presence
Global Manufacturing Presence World Class Manufacturing Infrastructure • 42 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
Slide 40: Global Manufacturing Footprint
Global Manufacturing Footprint Tiszavasvari Haifa Penza (Hungury) (Israel) (Russia) Ontario (Canada) (US) Cluj (Romania) New Jersey(US) Billerica, MA Giza, (Egypt) Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Cranbury Bangladesh Plant Port Fairy (Australia) Wilmington M.A
Slide 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing 28 Finished dosage manufacturing sites • India : 13, US : 4 • Canada, Mexico, 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
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
Slide 43: Corporate Governance
Corporate Governance Our philosophy on corporate governance envisages working towards high levels of transparency, accountability and consistent value systems across all facets of operations Chairman Independent Directors & Members of Audit Committee Israel Makov Ashwin Dani Keki Mistry Former Presi
Slide 44: Financials
Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44
Slide 45: Financials
Financials Market Capitalisation Rs. 1,650 billion / US$ 25 billion ( All Figures in Rs. Mn ) FY12 YoY FY13 YoY FY14 YoY FY15* YoY FY16* YoY P&L Summary Net Sales 80,057 40% 1,12,389 40% 1,60,044 42% 2,72,451 70% 2,77,442 2% Gross Profit 63,644 49% 91,592 44% 1,32,250 44% 2,05,059 55% 2,12,610 4% EB
Slide 46: Sales Break-up
Sales Break-up In INR Billion In USD Million Gross 58 81 114 162 275 280 2,682 4,502 4,278 Sales 175 Full year consolidation 11 15 225 for URL & Dusa 992 61 57 878 URL & Dusa part- consolidation 135 8 Taro 316 19 135 2244 Consolidation 137 2066 8 15 98 1620 6 5 11 62 6 35 23 67 73 1090 1109 29 30 37
Slide 47: EBITDA Trend
EBITDA Trend In INR Billion Net 57 81 112 160 272 277 Sales % of Net Sales 21% 19% 17% 26% 25% 24% 14% 13% 15% 14% 16% 17% 24% 25% Key drivers include Taro, generic 24% 26% Doxil, Doxycycline & other low 30% 31% competition products in US 44% 44% Impact of Ranbaxy acquisition, & 41% 34% temporary su
Slide 48: Cash Flow
Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 34 68 33 31 56 25 40 19 34 15 24 22 FY11 FY12 FY13 FY14 FY15 FY16 FY11 FY12 FY13 FY14 FY15 FY16 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48
Slide 49: Financial Ratios
Financial Ratios FY12 FY13 FY14 FY15 FY16 Growth (%) Net Sales 39.9 40.4 42.4 70.2 1.8 Gross Profit 49.5 43.9 44.4 55.1 3.7 EBITDA 66.5 50.9 45.0 8.5 1.0 Net Profit 46.3 12.3 5.3 44.5 3.9 Net Profit (Adjusted) 46.3 34.3 # 58.7 # (15.6) # 13.1 # Margins (%) Gross Margin 79.5 81.5 82.6 75.3 76.6 EBITD
Slide 50: Key Financials Q3 & 9m FY17
Key Financials Q3 & 9m FY17 ( All Figures in Rs. Mn ) Q3 FY17 Q3 FY16 CHANGE 9m FY17 9m FY16 CHANGE Gross Sales 76,832 70,871 8% 2,34,391 2,04,721 14% Gross Profit 54,346 53,543 1% 1,75,035 1,55,503 13% Gross Margin 71% 76% 75% 76% EBITDA 22,237 22,104 1% 75,750 56,014 35% EBITDA Margin 29% 31% 32%
Slide 51: Sales Breakup Q3 & 9m FY17
Sales Breakup Q3 & 9m FY17 ( All Figures in Rs. Mn ) Q3 FY17 Q3 FY16 CHANGE 9m FY17 9m FY16 CHANGE Formulation India 19,694 18,746 5% 58,327 54,063 8% US 34,193 32,003 7% 1,12,043 96,066 17% Emerging Markets 11,599 9,941 17% 33,172 27,478 21% ROW 7,603 5,570 37% 18,509 16,286 14% Sub-total 73,087 66
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
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
Slide 54: FY17 Guidance
FY17 Guidance Consolidated Revenues • To grow by 8-10% over FY16 R&D Investments • Approximately 9% of revenues to be invested in R&D • Target US$ 300 million in synergy benefits from the Ranbaxy Ranbaxy Integration Synergy acquisition by FY18 Investing for Future • Invest in R&D and in building the
Slide 55: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company US • Ranked 4th 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
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 Mobile : +91 98203 30182 nimish.desai@sunpharma.com Corporate Address: SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2016
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