Neuland Laboratories Ltd. · NSE:NEULANDLAB
Neuland Laboratories — Q3 FY2022 Earnings Presentation
46 slides from Neuland Laboratories's earnings presentation, Feb 1, 2022
Slide 1: Outcome of Board Meeting cover letter
A NEULAND 1r•~ . WI-J[RE Lll'l'ORTtlNln· B[COME\ REALITY Neuland Laboratories Limited 11th Floor {5th Office Level), Phoenix IVY Building, Plot No.S73A-li!, Rood No.82, Jubilee Hilb, Hyderabad - 500033, Telangana, India. February 1, 2022 Tel: 040 67611600 / 67611 700 Email: neuland@neulandlabs.com w
Slide 2: Independent Auditor's Review Report (standalone)
1101 /B, Manjeera Trinity Corporate JNTU-Hitech City Road, Kukatpally MS KA & Associates Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 Chartered Accountants Independent Auditor's Review Report on unaudited quarterly and year to date standalone financial results of the Company pursua
Slide 3: Auditor's Review Report (continued)
MSKA & Associates Chartered Accountants disclosed in terms of the Regulation including the manner in which it is to be disclosed, or that it contains any material misstatement. For MSKA & Associates Chartered Accountants ICAI Firm Registration No. 105047W Amit Kumar Agarwal Partner Membership No.: 2
Slide 4: Statement of Standalone Financial Results
,{ .A NEULAND Neul,md Laboralories Limited 11th floor (5tri Offii:;e Level), Phoenix ~I'( fiuiidhg, P,ot No.573A-!II, Road No.82, )ubilee Hills, Hyder;,b,d • ~()0033, Tel,1ngaoa, rodla. Tel: 040 67611600 / 67611700 Email: rieuland@neuiandlabs.c.om www.neti1zndlabs.coni NEULAND LAB0RATORl€S LIMITED 1
Slide 5: Notes to standalone financial results
NOTES; 1 Th~ f111ancral ~Its for the q,.t4rter and nine month ended 31 lleceniber 2021 have been ,..,.,;ewe,1 by the Audit Committee ar<I approved by th(! lloard of Directors at lhe! meetir,g held on 01 February 2022. 1 Toe financial results have been prepared 1n accorda,,ce With the Indian Accounti
Slide 6: Independent Auditor's Review Report (consolidated)
1101 /B, Manjeera Trinity Corporate JNTU-Hitech City Road, Kukatpatly MSKA 8: Associates Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 Chartered Accountants Independent Auditor's Review Report on Consolidated Unaudited Quarterly and year to date financial results of the Group, its A
Slide 7: Auditor's Review Report (continued)
MSKA & 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 causes us to believe that the accompanying ,Statement are prepared in accordance with the recognition and measurement principles la
Slide 8: Statement of Consolidated Financial Results
WHIRFOf'l'(YR.TUNiTt Ri:COMfS RF.AUTV Neuland Laboratories Limited f •:h Hcor (5th Oftke l.ev~i). Phoenix NY Building, Plot No573,0,-·lll, Ro.d No,82, Jubile;, Hill;, iiyderabad ·· 50<!033, 1el<Jngana, India. Tei: 040 6761 1600.!67611700 Err.ail: neuland@nelJand!abs.com wvvw.nr.uiandiab,.ccro NEULAN
Slide 9: Notes to consolidated financial results
-~ --<fi✓!h NEULAND NOTES; 1 The financial results for the quarter and nine month ended 31 December 2021 have been r,ivlewed by the Audit Committee and approved by the lloard of Directors at thelf meeting held on 01 February 2022. 2 The financial results haVl! been prepared in accordance with the In
Slide 10: Neuland Q3FY22 income at Rs.238.4 crore, EBITDA Rs. 34.2 crore
Neuland Q3FY22 income at Rs.238.4 crore EBITDA at Rs. 34.2 crore Hyderabad, India, February 1, 2022 – Neuland Laboratories Limited (NLL) (NSE: NEULANDLAB; BSE:524558), a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and custom manufacturing sol
Slide 11: About Neuland Laboratories Limited
Zoom Link 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 38 years, Neuland Labs has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with customers
Slide 12: Earnings Presentation Q3 FY22
Earnings Presentation Q3 FY 22 BSE CODE : 524558 | NSE SYMBOL : NEULANDLAB | BLOOMBERG: NLL:IN | REUTERS: NEUL.NS
Slide 13: Safe Harbour
Safe Harbour 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", "
Slide 14: Table of Contents
Table of Contents Q3 & 9M FY-22 1 HIGHLIGHTS 2 BUSINESS OVERVIEW 3 CAPABILITIES 4 FINANCIALS 5 OUTLOOK 3
Slide 15: Q3 & 9M FY-22 Highlights
Q3 & 9M FY-22 HIGHLIGHTS
Slide 16: Management Speak
Management Speak SUCHETH DAVULURI, VICE-CHAIRMAN & CEO “The quarter gone past was impacted by a lower than anticipated revenue primarily due to the weak performance of the Prime business which was 20% lower than the quarterly average over the previous year. We have been impacted by customers’ issues
Slide 17: Key Highlights 9M FY22
Key Highlights 9M FY22 Business Highlights Financial Highlights ❖ Growth from development projects ❖ Total income was Rs. 699.4 crore in was offset by Inventory destocking and 9MFY22, an increase of 0.8% lower offtake at customers’ end ❖ EBITDA margin decreased by 270 bps ❖ Unit 3 ramping up driving
Slide 18: Key Highlights Q3 FY22
Key Highlights Q3 FY22 Business Highlights Financial Highlights ❖ In Prime API, Labetalol performed well ❖ Total income was Rs. 238.4 crore in Q3FY22, even as there was a decrease in a decrease of 2.9% over Q3 FY21 revenues ❖ EBITDA margin decreased by 470 bps from ❖ Specialty had a decent quarter w
Slide 19: Profit & Loss Snapshot (Standalone)
Profit & Loss Snapshot (Standalone) YoY QoQ YoY Particulars (Rs. Cr) Q3FY22 Q2FY22 Q3FY21 9MFY22 9MFY21 (%) (%) (%) Total Income 238.4 258.1 (7.7)% 245.6 (2.9) % 699.4 693.7 0.8% EBITDA 34.2 43.1 (20.6)% 46.7 (26.8)% 104.9 122.5 (14.3)% EBITDA Margin 14.3% 16.7% (240) Bps 19.0% (470) Bps 15.0% 17.7%
Slide 20: Financials (Standalone)
Financials (Standalone) Revenue (Rs. Cr) EBITDA (Rs. Cr) and EBITDA Margin (%) 699 259 258 43 238 694 40 16.7% 203 15.4% 123 14.3% 13.6% 34 17.7% 28 105 15.0% Q4FY21 Q1FY22 Q2FY22 Q3FY22 9MFY21 9MFY22 Q4FY21 Q1FY22 Q2FY22 Q3FY22 9MFY21 9MFY22 EPS (Rs) PAT (Rs. Cr) 9.1% 16 49 6.6% 63 6.0% 7.9% 13 5.3
Slide 21: Key Operating Metrics – Business Salience
Key Operating Metrics – Business Salience YoY Analysis Quarter on Quarter Movement 2% 4% 8% 3% 5% 4% 30% 22% 30% 23% 27% 40% 22% 22% 21% 24% 23% 20% 49% 53% 46% 42% 45% 36% 9M FY21 9M FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Prime Specialty CMS Others 10
Slide 22: Business Salience (Overall Company)
Business Salience (Overall Company) PRODUCT YoY Analysis QoQ Movement 56% 58% 60% 61% TOP 10 55% 57% TOP 5 42% 40% 39% % of Total revenue 39% 39% 42% 9M FY21 9M FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 CUSTOMER YoY Analysis QoQ Movement 52% 52% 53% 54% 49% 46% 40% 41% 36% 31% 39% 37% 9M FY21 9M FY22 Q4
Slide 23: Business Salience (Prime)
Business Salience (Prime) 9M 9M Q4 Q1 Q3 46% 42% Q2 FY-21 FY-22 49% FY22 53% 45% FY22 36% FY21 FY22 PRODUCT YoY Analysis QoQ Movement 94% 92% 96% 95% TOP 10 92% 98% TOP 5 (of Prime revenue) 72% 76% 77% 78% 70% 71% 9M FY21 9M FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 CUSTOMER YoY Analysis QoQ Movement 68%
Slide 24: Business Salience (Specialty)
Business Salience (Specialty) 9M 9M Q4 Q1 Q2 Q3 FY-21 22% FY-22 24% 21% FY22 22% 23% 20% FY21 FY22 FY22 YoY Analysis QoQ Movement TOP 10 PRODUCT TOP 5 85% 91% 91% 89% (of Specialty 76% 83% Revenue) 49% 64% 67% 56% 60% 67% 9M FY21 9M FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 CUSTOMER YoY Analysis QoQ Move
Slide 25: Business Salience (CMS)
Business Salience (CMS) 9M 9M Q4 Q1 Q2 Q3 FY-21 30% FY-22 30% FY21 23% FY22 22% FY22 27% 40% FY22 PRODUCT YoY Analysis QoQ Movement TOP 10 99% 99% TOP 5 97% (of CMS revenue) 82% 87% 84% 92% 76% 83% 84% 67% 65% 9M FY21 9M FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 CUSTOMER YoY Analysis QoQ Movement 99% 99%
Slide 26: Key Operating Metrics – CMS Revenue Split
Key Operating Metrics – CMS Revenue Split Rs. In Cr Commercial Development YoY Analysis Quarter on Quarter Movement 210 209 75 95 116 70 38 60 14 21 44 134 94 23 56 57 39 21 9M FY21 9M FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 15
Slide 27: Number of Active CMS Projects
Number of Active CMS Projects Q3 FY22 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 15 3 8 5 10 7 48 Intermediate 7 5 2 0 8 11 33 Grand Total 22 8 10 5 18 18 81 Q3 FY21 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 14 4 6 3 10 6 43 Intermediate 7 4 2 3 8 9 33 Gran
Slide 28: Business Overview
BUSINESS OVERVIEW
Slide 29: Our Journey – Key Milestones
Our Journey – Key Milestones 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 of advanced Centre Established niche API’s & approved Intermediates 100 Mn+
Slide 30: Generic Drug Substance (GDS)
Generic Drug Substance (GDS) We started as a Prime API ..Added Specialty molecules for manufacturer… complex products.. Capability Capability ✓ 3 US FDA and EU GMP compliant ✓ High end complex chemistry capabilities manufacturing facilities ✓ Backend support by R&D department ✓ Collective capacity:
Slide 31: 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 32: Capabilities
CAPABILITIES
Slide 33: Scaled up Manufacturing Facilities over the years
Scaled up Manufacturing Facilities over the years Hyderabad Location of All Units 230 KL 338 KL 299 KL UNIT 1 UNIT 2 UNIT 3 BONTHAPALLY PASHAMYLARAM GADDAPOTHARAM 1986 1994 2017 Year of Establishment Mirtazapine, Sotalol HCL, Levetiracetam, Ciprofloxacin HCL, Levofloxacin, Salmeterol, Products inclu
Slide 34: Backed up by sound R&D capabilities
Backed up by sound R&D capabilities 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 NDA or commercial stage expansion drug
Slide 35: New capabilities built
New capabilities built FBRM HAZARDOUS & WET LABORATORY Dedicated area Particle size for hazardous check for chemical polymorph management achievement and wet lab expansion PEPTIDE LAB PID LABORATORY, To address 9800 sq. ft. new UNIT-III product quality lab with issues, additional 7 impurities hoods
Slide 36: Regulatory Filings Across Geographies
Regulatory Filings Across Geographies 30 Filings with Health Canada 10 20 Japanese DMF filed China DMF filed 60 DMFs with USFDA 19 220 filings with 22 ROW filings including Turkey, KFDA Korea filings with TGA Mexico, Brazil etc ~495 27 EUDMF filings across Germany, CEPs Received for different 903+ F
Slide 37: Global Presence
Global Presence EUROPE NORTH AMERICA 39% APAC 34% 6% JAPAN MENA INDIA 5% 4% 6% BD Office in LATAM Princeton, New Jersey 6% Since 2004 Our BD Office in JAPAN Since 2007 % Refers to 9M FY22 Sales by End market 26
Slide 38: Neuland Today: Snapshot
Neuland Today: Snapshot Legacy Scale Capability Reach Expertise: 38+ years backed 3 Mfg. Facilities: by robust quality Regulatory Product/ Projects Presence systems, approved with 867 portfolio: 100+ APIs 80+ countries regulatory & KL capacity across therapeutic compliance categories framework R&D:
Slide 39: Financials
FINANCIALS
Slide 40: Continuous Growth…
Continuous Growth… Rs. In Cr FINANCIAL PERFORMANCE 163 HIGHLIGHTS 953 767 ▪ Revenue CAGR of 19.2% for FY 19-21 699 led by growth in all 3 businesses 670 105 105 80 ▪ EBITDA growth of 62.8% CAGR in FY 19-21 due to balanced contribution 61 from both GDS and CMS business 42 16 16 ▪ Shift to CMS and Spe
Slide 41: Stable Balance Sheet..
Stable Balance Sheet.. Particulars Mar-19 Mar-20 Mar-21 Dec-21 Current Ratio (x) ROCE (%) (Rs. Cr) 1.50 11.93 Shareholders 1.47 696 706 782 816 1.42 7.60 8.30 ' funds 1.37 3.89 Net Debt 194 214 152 175 2019 2020 2021 9MFY22 2019 2020 2021 9MFY22 Investments 8 8 7 4 Fixed Asset Turnover (x) Debt to E
Slide 42: Macroeconomic factors influencing Neuland
Macroeconomic factors influencing Neuland 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 drug approvals Environmental audit
Slide 43: Outlook
OUTLOOK
Slide 44: ..Laying Foundation for our Growth Strategy
..Laying Foundation for our Growth Strategy CREATE AN ORGANIZATION THAT RESULTS IN VALUE FOR ALL STAKEHOLDERS BUSINESS SCALE Extend capabilities to Invest into capacity to organically build a augment sales and sustainable GDS accelerate business and CMS business growth CHEMISTRY RELATIONSHIPS Deploy
Slide 45: Contact Us
Contact Us For over 38 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. Neuland Labs Neuland Labs has deve
Slide 46: Thank You
A A UO J NEULAND
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