Hikal Limited · NSE:HIKAL
Hikal — Investor Presentation (November 2015)
42 slides from Hikal's investor presentation, November 2015
Slide 1: Hikal Limited Investor Presentation November 2015
Hikal Limited Investor Presentation November 2015
Slide 2: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Hikal Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and
Slide 3: Company Overview
Company Overview Leading Sustainable Technology driven company serving the Crop Protection & Pharmaceutical Industries Amongst the few Global Company to offer customized, cost effective and sustainable solutions from R&D to Commercial Manufacturing One of very few global and only Indian Company
Slide 4: Hybrid Business Model
Hybrid Business Model 1 Pharmaceuticals • Contract & Custom 2 Crop Protection Manufacturing • Custom Synthesis and Contract • Generics Manufacturing of • Human Health Agrochemicals, Intermediates, • Animal Health Biocides and Specialty • Strong Relationships with Chemicals Innovators, Mid size Pharm
Slide 5: Evolution
Evolution Crop Protection R&D Commenced operations with a plant in Mahad. Established R&D center in Pune to focus on R&D and augment Second Plant commissioned in pharmaceuticals and crop Taloja along with Merck, USA protection processes Pharmaceuticals Diversified into pharmaceuticals business by ac
Slide 6: Timeline
Timeline Year Milestones 1988 Hikal is incorporated 1991 First Manufacturing site at Mahad begins operations - Signed a long term supply agreement with Hoescht India 1995 Signed a long term manufacturing and supply agreement with Merck, U.S., for a large volume Agvet Active Ingredient 1997 Manufactu
Slide 7: Global Regulatory Compliances
Global Regulatory Compliances 7
Slide 8: Regulatory Milestones
Regulatory Milestones US FDA approval of Bangalore Pharmaceutical manufacturing site 2 0 0 4 Second successful US FDA Audit of Bangalore facility 2008 Bangalore clears its 3rd successful US FDA audit 2011 2012 Panoli certified by the US FDA Panoli & Bangalore sites receive PMDA approval 2013 2014 Pa
Slide 9: Board of Directors
Board of Directors Jai Hiremath Sameer Hiremath Baba Kalyani Dr. Wolfgang Welter Prof. Axel Kleemann Chairman & MD President & Joint MD Sugandha Hiremath Prakash Mehta Kannan Unni Shivkumar Kheny Amit Kalyani 9
Slide 10: Management Team
Management Team Jai Hiremath Sameer Hiremath Chairman & MD President & Joint MD Dr. P. Nightingale Manoj Mehrotra Kumar Inamdar Sham Wahalekar Anish Swadi Kumaar Priyaranjan R&D Pharmaceuticals Crop Protection Finance Bus. Dvlp. & Strategy Human Resources 10
Slide 11: Scientific Advisory Board
Scientific Advisory Board He holds a D.Sc. from the University of Marseilles, France; Ph.D. In Organic Chemistry from Pune University - National Chemical Laboratory; and a Ph.D. from Michigan State University and Ohio State University USA. Dr. Goverdhan 01 Mehta He is a National Research Professor,
Slide 12: Focused Strategy
Focused Strategy To be a leading reliable & high quality sustainable CDMO player globally Aggressive Growth • Aggressive growth in Pharmaceuticals , Animal Health & Crop Protection • Support NCE & Gx Molecules Serving a large range of Customers Strategy Relationships Develop Own Portfolio • Develop
Slide 13: Value Chain
Value Chain Expertise in Custom Synthesis and Contract Research with capabilities scaling up from Gram to Kilo and Ton level of Production Lead molecule Launch identified Expiry On patent Off patent mature Discovery research Pre launch growing Off patent Discovery Development Full scale Manufacturin
Slide 14: Contract Development & Manufacturing
Contract Development & Manufacturing Hikal’s Business Model is to provide Services and Support across the Value Chain Early Launch Lifecycle Pre-development developm Phase I Phase II Phase III +4 years Extension ent Physical Product Development Varying degrees of ongoing improvements Varying degrees
Slide 15: Hikal – Locations
Hikal – Locations Pharmaceuticals Crop Protection Mahad Bangalore Research & Development Pune Taloja Panoli Panoli 15
Slide 16: Manufacturing Capabilities
Manufacturing Capabilities Pune R&D Center in Pune becomes operational 2009 Bangalore & Panoli First new API plant commissioned at 2003 Bangalore. Multi-purpose pharma intermediate plant commissioned at Panoli. Bangalore Acquired R&D and manufacturing site; enters the Pharmaceutical Business 2001 Pa
Slide 17: Pharmaceuticals
Pharmaceuticals Overview • Contract Development & Custom Manufacturing (CDMO) projects in Intermediates and APIs • World’s largest supplier of Gabapentin, API for Neuropathic use • Developing own Generic Portfolio • Strong Customer Relationships with Large Global Generic & Innovator Cos. USFDA Appro
Slide 18: Pharmaceuticals – Facility Overview
Pharmaceuticals – Facility Overview Jigani, Products : API’s & Bulk Drug Intermediates Bangalore Accreditations: USFDA, KFDA, TGA, PMDA (Japan) & ISO 9001, ISO 14001, OHSAS 18001 Offers scale up capabilities and can provide validation and launch quantities under cGMP conditions Audited frequ
Slide 19: Existing Contracts
Existing Contracts European Long-term contract manufacturing agreements with a European innovator client to Innovator commercially manufacture molecules gaining momentum Client Strong Cost Position is offered by us and the molecule is expected to grow further Dialogues are on for several other
Slide 20: Future Strategy
Future Strategy Existing Contracts New Relationships • Start with a specific product • Added New innovator and expand horizontally and biotech customers • European Innovator Existing for early stage molecules for contract development • USA based Food Ingredient • Japan - Several contract Contracts •
Slide 21: Crop Protection
Crop Protection Overview • Custom Synthesis and Contract manufacturing of Agrochemicals, Intermediates and Specialty Chemicals • World’s largest supplier of Thiabendazole (TBZ) • On Patent Molecule Manufacturer • Strong Relationships with Global Leading Agrochemical Companies • Strong Japanese Prese
Slide 22: Crop Protection – Facility Overview
Crop Protection – Facility Overview Taloja, Products: Crop Protection AIs & Intermediates MH Accreditations : ISO 9001, ISO 14001, OHSAS 18001 & ISO 17025 (GLP) Manufactures Fungicides, Insecticides and Intermediates. The site manufactures on patent active ingredients for innovator companies
Slide 23: Key Relationships
Key Relationships The product is used On-Patent Fully Product for Successfully Thiabendazole on grapes, commercialized in completed the lab potatoes, tobacco New 2013 and volumes Japanese trials of an and vegetables. Generation are expected to grow in the years to Innovator Intermediate The wide use
Slide 24: Future Strategy
Future Strategy Diversifying Products & Clients Proprietary Products • Several projects have been • Started manufacturing & completed on development selling our own products and pilot plant level Diversifying developed by our R&D such as Quinalphos, Diuron and • Clients - Japanese, European and mid-
Slide 25: Research & Development Update
Research & Development Update Research Molecules in various stages of Phase II & III - Building a pipeline for future commercial supplies Investments in R&D 350 As % to Sales 5% 5% R&D – Benefits Accrued Deploying R&D - Internal pipeline 300 R&D (Rs. mn) 4% 4% 4% 250 Developed processes for seve
Slide 26: Our R & D Efforts
Our R & D Efforts • Majority of projects are from innovator clients in Japan and Europe • Commercialized an insecticide for an Innovator Company • Completed process development for an on-patent herbicide for another Innovator Client • Validated an API product using enzymatic technology developed by
Slide 27: R&D – Facility Overview
R&D – Facility Overview Pune, MH Provides process research of APIs and intermediates involving multi-step synthesis Successful track record in developing non- infringing processes and scaling up from lab to kilo to commercialization Supports clients with: Route Scouting Contract Research &
Slide 28: Research & Development Expertise
Research & Development Expertise Facilities ensures seamless scale up from Lab to Commercialization Bangalore Activities R&D Pune Mahad Panoli Taloja Manufacturing Drug Discovery Support Analytical method Development Process Research Process Development Process Improvement Kilogr
Slide 29: Intellectual Capital
Intellectual Capital We are creating a Sustainable Culture with the help of our team of Experienced Scientists and Specialists Qualification Department Ph. D Corporate Pune 2% Office 13% MSc Bangaluru 7% 22% 1% Mahad 11% Others 34% Engineers Taloja 12% Jigani 22% 36% Graduates Panoli 30% 10% No. of
Slide 30: Animal Health – A Natural Progression
Animal Health – A Natural Progression Flexible Existing Chemical Manufacturing Commercial Development Facilities Products Animal US Based Several Japanese Health Client Other Client API Molecules Exclusively contract Completed the kilo lab trials Completed the pilot trials of Products are a mix of m
Slide 31: Key Strengths
Key Strengths Hybrid Business Model New Experienced Management Team Regulatory Compliances Strong Research & Development Established Relations with Clients Ever Growing Product Portfolio 31
Slide 32: Growth Drivers
Growth Drivers Uniquely positioned to become an integral part of Pharmaceutical and Crop Protection Supply Chain Blocks Built Growth Drivers Asset Creation Expansion of Product Portfolio Relationships Increase in Volumes Research & Development Margin Enhancement 32
Slide 33: Operational Highlights
Operational Highlights We expect growth in both our divisions with increased volumes from our existing products which provides sustainability to Revenues Standalone Revenues Standalone EBITDA Rs. Million +12% +16% 8,719 1,884 1,910 1,883 1,841 8,292 1,790 6,942 6,604 1,326 1,283 5,360 4,780 4,935 83
Slide 34: Operational Highlights
Operational Highlights Higher EBITDA Margin on account of Higher Margin Products, Quality Conscious Customers and Efficient Operations Pharmaceuticals Revenue Crop Protection Revenue Rs. Million +20% 5,375 4,754 3,538 4,477 +11% 3,344 3,716 2,888 3,570 3,210 2,465 2,759 2,021 1,791 1,734 1,580 1,540
Slide 35: Capital Expenditure
Capital Expenditure Major Asset Creation Completed. This gives us an ability to scale-up operations rapidly by making small incremental investments Cashflow from Operations Capital Expenditure Rs. Million 1,546 2,884 1,367 1,256 1,132 1,029 1,023 613 1,177 757 701 338 645 519 457 521 FY08 FY09 FY10
Slide 36: Standalone Profit & Loss
Standalone Profit & Loss Rs. Million Q2 FY2016 Q1 FY2016 Q-o-Q H1 FY2016 H1 FY2015 Y-o-Y Net Sales 2,040 1,915 7% 3,955 4,333 -9% Expenditure 1,649 1,552 3,200 3,434 EBITDA 391 363 8% 754 899 -16% Margin 19.17% 18.97% 19.07% 20.74% Other Income 3 5 7 12 Depreciation 165 164 329 299 Finance Costs 115
Slide 37: Standalone Profit & Loss
Standalone Profit & Loss Rs. Million FY2015 FY2014 Y-o-Y Net Sales 8,719 8,292 5% Expenditure 6,893 6,419 EBITDA 1,825 1,873 -3% Margin 20.90% 22.60% Other Income 16 341 Depreciation 642 550 Finance Costs 600 680 PBT 599 983 -39% Tax 194 342 Net Profit 405 641* -37% Net Profit (excl. exceptional Inc
Slide 38: Standalone Balance Sheet
Standalone Balance Sheet Rs. Million Sep-15 Mar-15 Rs. Million Sep-15 Mar-15 Shareholder’s Fund 5,401 5,335 Non-Current assets 8,028 7,921 Share Capital 164 164 Fixed Assets 6,913 7,010 Reserves & Surplus 5,237 5,170 Long-Term Loans & Advances 1084 879 Non-Current Investments 31 31 Deferred Tax Asse
Slide 39: Consolidated Profit & Loss
Consolidated Profit & Loss Rs. Million FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 Net Sales 8,719 8,292 6,604 7,078 5,023 5,390 Expenditure 6,894 6,374 4,839 5,245 3,830 3,677 EBITDA 1,824 1,918 1,766 1,833 1,193 1,713 Margin 20.9% 23.1% 26.7% 25.9% 23.8% 31.8% Other Income 16 341 63 14 33 2 Deprecia
Slide 40: Annual Dividend Payout
Annual Dividend Payout Dividend 22% 22% 18% 16% 11% 20% Payout 7.77 7.32 6.58 5.39 4.92 3.07 1.60 1.20 1.20 0.90 1.00 0.50 FY10 FY11 FY12 FY13 FY14 FY15 EPS DPS Rs . Per Share Board approves Total Dividend of Rs. 1 per share for Face Value of Rs. 2 in FY2015 40
Slide 41: Shareholding Pattern
Shareholding Pattern Shareholding as on Sept 30, 2015 Few Large Shareholders As % of Total No. Non-Promoter Shareholders of Shares IFC 8.27% International Finance Corporation 8.27% FII 4.47% Reliance Mutual Fund 8.03% DII 9.80% Promoters Danske Invest Management Company 68.77% 2.37% Bodies S.A. Corp
Slide 42: For further information, please contact
For further information, please contact: Company : Investor Relations Advisors : Hikal Limited Strategic Growth Advisors Pvt. Ltd. CIN: L24200MH1988PTC048028 CIN: U74140MH2010PTC204285 Mr. Sham V. Wahalekar Ms. Payal Dave / Ms. Ekta Bhalja sham_wahalekar@hikal.com dpayal@sgapl.net / bekta@sgapl.net