Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (June 2016)
56 slides from Sun Pharmaceutical Industries's investor presentation, June 2016
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – June 2016 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 5th Largest Global Specialty Generic Company US • Ranked 5th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India Emerging Markets • Largest Indian Pharma Company in Emerging Markets Europe • Expanding presence in Europe Manufacturing Footprint •
Slide 5: World's 5th Largest Specialty Generic Pharma Co
World’s 5th Largest Specialty Generic Pharma Co 2015 Worldwide Generic Sales (US$ in billions) Teva 8.9 Novartis 8.5 Mylan 8.1 Allergan 6.6 Sun Pharma 4.6 Fresenius 3.0 Aspen Pharmacare 2.4 Sanofi 2.2 Lupin 2.0 Dr Reddy's 2.0 Hospira 1.9 Aurobindo 1.8 Endo International 1.7 Cipla 1.6 Apotex 1.5 Sour
Slide 6: Sun Pharma today
Sun Pharma today US Formulations India Branded Generics 5th largest generics company in US* with one of the No.1 ranked with 13 classes of doctor categories largest ANDAs pipeline (159 ANDAs awaiting approval) Leading position in high growth chronic therapies Presence in generics, Specialty and bran
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 undergoing Phase-III trials targeting IL-23) from MSD for treating chronic plaque psoriasis- Positive results from Phase III declared in May 2016 Ramping up • Acquired Dusa Pharma in US – Gets access to patented drug-device
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 79.6 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 53.2 29.5 22.4 Operating Free Cash 7.5 Adjusted Cash Flow
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% 29% 18% 19% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 ROCE ROE Market Cap (USD Bn) 27% 28% 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% 20% 67% 18% 29% 14% 14% 29% 12% 13% 14% 63% 62% 62% 61% 7% 60% 23% 22% 20% 20% 19% 19% FY11 FY12 FY13 FY14 F
Slide 13: Creating Value, Continuously…
Creating Value, Continuously… Began with 5 Acquired URL Acquired Ranbaxy IPO - Rs. 550 Mn Acquired Taro Acquired Dusa products Pharma raised Year 1983 1993 1994 1997 2010 2011 2012 2013 2014 2015 2016 Market Cap (US$ Bn) as 0.1 0.1 7.8 10.1 12.3 15.6 19.7 34.6 30.0 of Mar, 31 of respective years Ent
Slide 14: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale 2016 Acquired 14 brands from Novartis Japan Entry into Japan Distribution agreement with Distribution services agreement in India for brand “Oxra” & 2016 India AstraZeneca “Oxramet”® (brands of dipagliflozin, used for diabetes treatment) 2015 Acquir
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 5th Largest Pharma Company in the US Generics Market * • Largest generic dermatology company and 3rd largest branded Dermatology Segment dermatology company in the US • Wide basket of 572 ANDAs filed & 413 approved ANDAs across Comprehensive Portfolio multiple therapies • 159
Slide 18: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Sales in Rs billion Key Milestones in US 137 135 • Entry in US through Caraco FY98 acquisition FY98-FY10 • Ramp-up in US business 98 • Launched many complex generics FY08 onwards & few FTFs • Acquired Taro Pharma – Entry into FY10 dermatology market 62 • Ac
Slide 19: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 413 ANDA Approvals by Therapeutic Area 597 572 100 97 478 449 438 413 397 377 344 62 311 250 43 225 207 29 26 21 84 12 12 11 Gastro Allergy Antibiotic CNS CVS Metabolism Other Skin Pain Oncology FY10 FY11 FY12 FY13 FY14 FY15 FY16 Cumulativ
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 8.8% market share Market Position** • Growth of 15% versus average industry growth of 13% Prescription Ranking## • No. 1 ranked by prescriptions with 13 different classes of doctors Chronic Segment • Market leader in the chronic segment A
Slide 22: Largest Pharma Company in India
Largest Pharma Company in India (Market Share) Last 12 Months of Branded Generic Sales in India as of March 2016 (US$ in mn) 1,319 Sun Pharma - 8.8% 923 Abbott - 6.1% 749 Cipla - 5.0% 639 Zydus + Biochem - 4.3% 564 Mankind - 3.8% 526 Lupin - 3.5% 516 Alkem + Cachet + Indchemie -3.4% 486 Glaxo - 3.2%
Slide 23: India Business – Sales ramp-up
India Business – Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 30 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up 73 Others 67 Opthalmology 2% 6% Cardiology Respiratory 4% 18% 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 2.1% in 2000 to 8.0% in • Covering over 600,000* doctors 2016 (IMS Data for Mar’16) * Does not exclude ov
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 Psychiatrists 1 1 Neurologists 1 1 Cardiologists 1 1 Orthopaedic 1 1 Ophthalmologists 1 1 Gastroenterologists 1 1 Nephrologists 1 1 Diabetologists 1 1 Consulting Physician
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, ANZ & Other Markets
Western Europe, Canada, 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 and Market Presence few other markets • Expanding basket of products including injectables and hospital Product Portfolio products as well as products for retail
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 • More than 15-20 APIs scaled up
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 86 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 23.0 572 422 1013 19.6 413 762 298 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 • 47 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 (Hungury) (Israel) Ontario (Canada) Casablanca (Morocco) Cashel (Ireland) (US) Cluj (Romania) New Jersey(US) Billerica, MA Giza, (Egypt) Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Rio de Bangladesh Plant Cranbury Janeiro
Slide 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing Sun Pharma - 17 Manufacturing sites Ranbaxy - 16 Manufacturing sites • India : 8, US : 3 • India : 7, US : 1 • Canada, Brazil, Mexico, Hungary , Israel, • Ireland, South Africa, Malaysia, Bangladesh : 1 each Romania, Brazil, Morocco, Egypt and • Capacities available for
Slide 42: API Manufacturing
API Manufacturing Sun Pharma - 11 locations Ranbaxy - 3 locations • India : 6, Australia : 2, Israel : 1, US : 1, • India : 3 Hungary : 1 Panoli & Ahmednagar Australia, Hungary & (both India) Tennessee (US) • International regulatory approvals: USFDA, API • Controlled substances European Key Plants
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. 1,840 billion / US$ 27 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% 23% 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) 53 31 30 25 40 34 19 15 24 22 8 5 FY10 FY11 FY12 FY13 FY14 FY15 FY10 FY11 FY12 FY13 FY14 FY15 © 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 9.9 1.8 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 Q4 & FY16
Key Financials Q4 & FY16 ( All Figures in Rs. Mn ) Q4 FY16 Q4 FY15 CHANGE FY16 FY15 CHANGE Net Sales 74,139 61,002 22% 2,77,442 2,72,451 2% Gross Profit 59,618 45,362 31% 2,12,610 2,05,059 4% Gross Margin 80% 74% 77% 75% EBITDA 23,000 7,826 194% 79,561 78,166 2% EBITDA Margin 31% 13% 29% 29% Net Pro
Slide 51: Sales Breakup Q4 & FY16
Sales Breakup Q4 & FY16 ( All Figures in Rs. Mn ) Q4 FY16 Q4 FY15 CHANGE FY16 FY15 CHANGE Formulation India 18,066 15,474 17% 72,538 66,639 9% US 39,103 30,477 28% 1,35,170 1,37,195 -1% Emerging Markets 8,365 7,706 9% 35,843 37,326 -4% ROW 5,332 5,224 2% 21,618 23,320 -7% Sub-total 70,866 58,881 20%
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 5th Largest Global Specialty Generic Company US • Ranked 5th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India Emerging Markets • Largest Indian Pharma Company in Emerging Markets Europe • Expanding presence in Europe Manufacturing Footprint •
Slide 56: Thank You
Thank You! For more information please contact: Investors: Media: Nimish Desai Frederick Castro Thank You Tel : +91 22 4324 4324, Ext 2778 Tel : +91 22 4324 4324, Ext 2777 Tel Direct +91 22 43242778 Tel Direct : +91 22 43242777 Mobile : +91 98203 30182 Mobile : +91 99206 65176 nimish.desai@sunpharma
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