Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (September 2015)
56 slides from Sun Pharmaceutical Industries's investor presentation, September 2015
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – September 2015 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 2014 Worldwide Generic Sales (US$ in billions) Teva 9.8 Sandoz 8.5 Actavis 6.4 Mylan 6.4 Sun + Ranbaxy Sun - 3.0 Ranbaxy - 2.1 5.1 Aspen 3.0 Hospira 2.6 Fresenius 2.4 Sanofi 2.3 Ranbaxy 2.1 Lupin 2.0 Dr Reddy's 1.8 Cipla 1.7 STADA 1.6 Source: Evaluate
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 MK-3222 (a monoclonal antibody undergoing Phase-III trials targeting IL-23) from MSD for treating chronic plaque psoriasis Ramping up • Entered into a joint venture with Intrexon Corporation for developing gene-based Specialty therapies for ocular diseases Pip
Slide 9: Highly Diversified Revenue Base
Highly Diversified Revenue Base Sun Pharma (Pre Ranbaxy Acquisition) Sun Pharma (Post Ranbaxy Acquisition) API & Others Emerging 5% India Branded Markets Western 5 year CAGR: 11% Formulations 14% Europe & Rest of 23% Other World## 5 year CAGR: 14% Markets # India Branded 12% 8% 5 year CAGR: 38% Form
Slide 10: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in USD Million) 4464 1279 781 285 Adjusted Net Sales EBITDA Net Profit 287 823 CAGR CAGR 88 CAGR 264 93 102 29% 25 30% 19 28% FY00 FY05 FY10 FY15 FY00 FY05 FY10 FY15 FY00 FY05 FY10 FY15 656 505 0.3 470 338 Operating Free Cash 0.1 Adjusted Cash Flow Flow
Slide 11: Consistent profitability and returns
Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin 83% 44% 45% 35% 82% 41% 32% 32% 80% 32% 74% 75% 34% 29% 18% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 ROCE ROE Market Cap (USD Bn as of 31st March)) 27% 28% 31% 35 24% 26% 20% 24% 18% 21% 20
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% 44% 45% 35% 34% 33% 75% 75% 32% 32% 41% 73% 34% 34% 18% 29% 14% 14% 63% 12% 13% 62% 62% 9% 61% 7% 59% 60% 22% 20% 20% 19% 19% 17% FY10 FY11 FY12 FY13 FY
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 Market Cap (US$ Bn) as 0.1 0.1 7.8 10.1 12.3 15.6 19.7 34.6 of Mar, 31 of respective years Acquisition o
Slide 14: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale 2015 Acquisition of GSK’s Opiates Business Global Markets Vertical Integration for controlled substances business Distribution agreement with Distribution services agreement in India for brand “Axcer”® (brand of 2015 India AstraZeneca ticagrelor, us
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% 18% 5,000 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 4,000 Assets of: Taro Dusa Bryan URL Hungary Ranbaxy 3,000 Able Labs Chattem 2,000 1,000 0 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY0
Slide 16: US Business
US Business 50% 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 601 ANDAs filed & 442 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 USD Million 2,244 Key Milestones in US • Entry in US through Caraco FY98 acquisition 1,620 FY98-FY10 • Ramp-up in US business • Launched many complex generics & 1,132 FY08 onwards few FTFs • Acquired Taro Pharma – Entry into FY10 dermatology market
Slide 19: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved ANDA Approvals by Therapeutic Area 597 601 104 98 478 449 438 442 397 377 344 61 311 250 225 40 207 34 29 30 20 84 13 13 Gastro Allergy Antibiotic CNS CVS Metabolism Other Skin Pain Oncology FY10 FY11 FY12 FY13 FY14 FY15 Jun-15 Cumulative
Slide 20: India Branded Generic Business
India Branded Generic Business 24% 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 8.9% market share Market Position** • Growth of 15% versus average industry growth of 14% 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 June 2015 (US$ in mn) Sun Pharma+Ranbaxy - 8.9% 1,272 Abbott - 6.2% 887 Sun Pharma - 5.5% 789 Cipla - 5.0% 715 Zydus Cadila - 4.2% 591 Mankind - 3.6% 509 Alkem + Cachet + Indchemie -3.5% 499 Glaxo -
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 USD Million 1,099 Therapeutic Revenue Break-up Others, 6% Neuro-Psychiatry, Opthalmology, 18% 3% Respiratory, 4% Dermatology, 4% 609 611 546 Gynaecology,
Slide 24: Strong Customer Focus Drives Market Share Gains
Strong Customer Focus Drives Market Share Gains Therapy focused marketing Strong increase in market share • 9,000+ sales representatives • Sun pharma market share has consistently increased from 2.1% in • Covering over 600,000* doctors 2000 to 4.8% in 2014 • Including Ranbaxy, current market 8.2% sh
Slide 25: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 13 Doctor Categories* Ranking (Sun Pharma) Ranking (Sun + Ranbaxy) Specialist Oct ‘14 Specialist June ‘15 Psychiatrists 1 Psychiatrists 1 Neurologists 1 Neurologists 1 Cardiologists 1 Cardiologists 1 Orthopaedic 1 Orthopaedic 1 Ophthalmologi
Slide 26: Best-in-class field force productivity
Best-in-class field force productivity Sales Per Representative (USD ‘000) Field Force Productivity FY10 – FY14 numbers exclude Ranbaxy * FY15 numbers include the impact of Ranbaxy merger Sun 232 • USD 122,690 / MR Pharma 202 186 182 Industry • USD 89,972 / MR Average* 150 * Based on brokerage repor
Slide 27: Emerging Markets
Emerging Markets 14% 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 • 5 core markets viz., India, Russia, Romania, Nigeria and Myanmar Market Focus • 4 growth markets viz., Ukraine, Poland
Slide 33: Active Pharmaceutical Ingredients (API) Business
Active Pharmaceutical Ingredients (API) Business 4% 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 25 APIs scaled up an
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 over USD 1 billion till date • R&D spend at 7.2% of Net Sales for FY15* 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 •
Slide 37: R&D Investments
R&D Investments R&D Expenditure Filings and Approvals 7.8% 6.2% 5.8% 5.6% 6.3% 6.5% 7.2% ANDA DMF/CEP Patents 601 396 1377 320 442 272 960 173 130 93 72 73 52 FY09 FY10 FY11 FY12 FY13 FY14 FY15* Filed Approved Filed Approved Filed Granted R&D Expenses (USD Mn) R&D Exp (% of Net Sales) FY09 – FY14 nu
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 • 50 manufacturing facilities across India, the Americas, Asia, Africa Extensive Global Footprint and Europe • Vertically integrated network across four continents enabling high Integrated Network quality, low cost and a quick ma
Slide 40: Global Manufacturing Footprint
Global Manufacturing Footprint Tiszavasvari Haifa (Hungury) (Israel) Ontario (Canada) Casablanca (Morocco) (US) Cashel (Ireland) Aurora Cluj (Romania) New Jersey(US) Billerica, MA Giza, (Egypt) Brayn Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Philadelphia Rio de Banglad
Slide 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing Sun Pharma - 20 Manufacturing sites Ranbaxy - 16 Manufacturing sites • India : 8, US : 6 • 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. 2,160 billion / US$ 33 billion ( All Figures in USD. Mn ) FY11 YoY FY12 YoY FY13 YoY FY14 YoY FY15* P&L Summary Net Sales 1,256 48% 1,672 33% 2,067 24% 2,649 28% 4,464 Gross Profit 934 52% 1,330 42% 1,685 27% 2,189 30% 3,361 EBITDA 428 49% 679 59% 903 33% 1,178 3
Slide 46: Sales Break-up
Sales Break-up In USD Million In INR Billion Gross 40 58 81 114 162 276 2,099 2,682 4,510 Sales 175 11 Full year consolidation for URL & Dusa 992 61 URL & Dusa part- consolidation 135 8 316 Taro 19 2244 137 140 Consolidation 281 8 15 1620 98 6 1132 11 5 62 6 6 35 1098 6 23 67 611 11 37 546 29 30 17
Slide 47: EBITDA Trend
EBITDA Trend In USD Billion Net 0.9 1.3 1.7 2.1 2.6 4.5 Sales % of Net Sales 21% 19% 17% 27% 26% 25% 14% 13% 15% 12% 14% 16% 25% Key drivers include Taro, generic 24% 24% Doxil, Doxycycline & other low 27% 26% competition products in US 30% 41% 44% 44% Impact of Ranbaxy acquisition 34% 34% 29% FY10
Slide 48: Cash Flow
Cash Flow Net Cash From Operating Activities (USD Mn) Free Cash Flow (USD Mn) 655 617 505 462 524 427 467 318 165 105 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 All numbers above exclude Ranbaxy financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48
Slide 49: Financial Ratios
Financial Ratios FY11 FY12 FY13 FY14 FY15 Margins (%) Gross Margin 74.4 79.5 81.5 82.6 75.3 EBITDA Margin (%) 34.1 40.6 43.7 44.5 28.6 Net Margin 31.7 33.2 26.5 19.6 16.6 Net Margin (Adjusted) 31.7 33.2 31.7 # 35.4* 17.5 ** Return (%) ROCE 20.3 23.8 26.7 26.9 17.8 ROE 21.0 23.8 25.7 30.9 20.4 Others
Slide 50: Key Financials Q1 FY16
Key Financials Q1 FY16 ( All Figures in USD Mn ) Q1 FY16 Q1 FY15 CHANGE FY15 Net Sales 1,067 1,045 2% 4,464 Gross Profit 786 773 2% 3,361 Gross Margin 74% 74% 75% EBITDA 264 316 -16% 1,279 EBITDA Margin 25% 30% 29% EBITDA (Adjusted) 298 316 -6% 1,409 EBITDA margin (Adjusted) 28% 30% 32% Net Profit 7
Slide 51: Sales Breakup Q1 FY16
Sales Breakup Q1 FY16 ( All Figures in USD. Mn ) Q1 FY16 Q1 FY15 CHANGE FY15 Formulation India 292 266 10% 1,099 US 506 500 1% 2,244 Emerging Markets 138 156 -11% 611 ROW 94 97 -3% 381 Sub-total 1,030 1,019 1% 4,335 Bulk 44 34 30% 162 Others 4 3 21% 13 Gross Sales 1,078 1,057 2% 4,510 Note – Numbers
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: FY16 Guidance
FY16 Guidance Consolidated Revenues • To remain flat or show a decline over FY15. • In addition to the above revenue impact, profits may be adversely Consolidated Profits impacted due to certain expenses/charges arising out of integration as well as cGMP remedial actions. • To incur certain integrat
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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