Hikal Limited · NSE:HIKAL
Hikal — Investor Presentation (August 2019)
41 slides from Hikal's investor presentation, August 2019
Slide 1: August 2019 Presentation
HiKAL August 2019 Presentation
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 Manufacturing • Generics • Human Health • Animal Health Pharmaceuticals • Strong Relationships 2 Crop Protection with Innovators, Mid size Pharma, Biotech & Crop Protection • Custom Synthesis and Generic Companies Contract Manufacturing of
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 Second Plant commissioned augment pharmaceuticals in Taloja along with Merck, and crop protection USA 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 © Hikal Limited
Slide 8: Regulatory Milestones
Regulatory Milestones 2018 2017 2nd Successful PMDA 2014 5th Successful approval for US FDA audit Bangalore Successfully for Bangalore facility 2013 completed facility 2012 EDQM Panoli & (European Bangalore Directorate for 2011 Panoli certified Pharma Sites Quality of by the US FDA are EU Audited Me
Slide 9: Board of Directors
Board of Directors Jai Hiremath Sameer Hiremath Baba Kalyani Amit Kalyani Dr. Wolfgang Welter Chairman & MD Joint MD & CEO Ranjit Shahani Sugandha Hiremath Prakash Mehta Kannan Unni Shivkumar Kheny Mrs Shivani Bhasin Sachdeva appointed as Additional Independent Director wef 1st August 2019. © Hikal
Slide 10: Management Team
Management Team Jai Hiremath Sameer Hiremath Chairman & MD Joint MD & CEO Anish Swadi Dr. Sudhir Nambiar Manoj Mehrotra Kumar Inamdar Sham Wahalekar Kumaar Priyaranjan Strategy & Research & Pharmaceuticals Crop Protection Finance HR Business Technology Development © Hikal Limited
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 01 Dr. Goverdhan Mehta He is a National Research Professor, E
Slide 12: Focused Strategy
Focused Strategy To be the leading global fine chemical company to the Pharmaceutical, Vision Crop Protection and Speciality Chemical Industries Aggressive Growth • Aggressive growth in Pharmaceuticals , Animal Health & Crop Protection • Support NCE & Gx Molecules Serving a large range of Customers
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 Discovery research growing mature Off patent Pre launch 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 Pre- Launch Lifecycle develop Phase I Phase II Phase III development +4 years Extension ment Physical Product Development Varying degrees of ongoing improvements Varying degree
Slide 15: Hikal – Locations
Hikal – Locations Pharmaceuticals Crop Protection Mahad Bangalore Research & Technology Pune Taloja Panoli Panoli © Hikal Limited
Slide 16: Manufacturing Capabilities
Manufacturing Capabilities Pune R&T 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&T and manufacturing site; enters the Pharmaceutical Business 2001 Pan
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. R&D, Contra
Slide 18: Pharmaceuticals – Facility Overview
Pharmaceuticals – Facility Overview Jigani, Bangalore • Products : API’s & Bulk Drug Intermediates • 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 Business in • Contract manufacture two large volume molecules, a neuropathic pain reliever and an anti- US cholesterol molecule exclusively for a leading US based innovator Company • Life-cycle extension and the volumes for both these molecules increased this year and the trend is
Slide 20: Future Strategy
Future Strategy Existing Contracts New Relationships • Start with a specific product • Added New innovator and and expand horizontally biotech customers for early • European Innovator stage molecules for contract development • USA based Food Ingredient Existing Contracts • Projects in various stages
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, MH • Products: Crop Protection AIs & Intermediates • 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 volumes of a Products Product is used to fungicide that is predominantly used control a wide range Niche plant Thiabendazole used to control On-Patent for controlling broad of insects on rape, growth the Oomycete New leaved weeds and for fruits, and as wood regulator for diseas
Slide 24: Future Strategy
Future Strategy Diversifying Products & Clients Proprietary Products • Several projects have been • Started new initiative to create completed on data for Registration of our development and pilot own product portfolio in plant level Diversifying several countries which will Products & add value to
Slide 25: Research & Technology Update
Research & Technology Update Research Molecules in various stages of Phase II & III - Building a pipeline for future commercial supplies Investments in R&T R&T – Benefits Accrued 600 6% R&D (in mn) As % to Sales 5% • Filed 2 DMFs (Dapagliflozin and Empagliflozin) as part 500 5% of our proprietary po
Slide 26: Our R & T Efforts
Our R & T Efforts • Developing a versatile product that is used as a micro biocides as well as fungicide. It has a wide range of applications as a preservative in varnishes, adhesives, inks, laundry detergents, stain removers, fabric softeners, leather processing solutions, fluid preservation and in
Slide 27: R&T – Facility Overview
R&T – 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: ▪ Process Development ▪ Analytical Deve
Slide 28: Research & Technology Expertise
Research & Technology 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 ✓ ✓ ✓ ✓ Kilogra
Slide 29: Human Resources – Our Intellectual Capital
Human Resources – Our Intellectual Capital • Experienced workforce working with global Lifesciences companies • Employees continuously trained through in-house workshops and external programs Total workforce (as on March 31st, 2019) – 2,122 Graduate, 5% Pune R&T, 11% B.Sc., 15% Taloja, 15% Others, 9
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 Filed a VMF for an Exclusive manufacturing contract Completed the pilot trials of Products are a mix of
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 © Hikal Limited
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 © Hikal Limited
Slide 33: Financials
Financials
Slide 34: Operational Highlights
Operational Highlights Rs. Million Standalone Revenues Standalone EBITDA 15,896 2,981 +20% +18% 13,001 2,418 10,339 1,972 1,828 9,257 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 © Hikal Limited
Slide 35: Operational Highlights
Operational Highlights We expect growth in both our divisions with increased volumes from our existing products which provides sustainability to Revenues Rs. Million Pharmaceuticals Revenue Crop Protection Revenue 9,391 6,505 +18% 7,528 +22% 5,473 6,106 5,691 4,233 3,565 FY16 FY17 FY18 FY19 FY16 FY1
Slide 36: Operational Highlights
Operational Highlights Higher EBIT Margin on account of Higher Margin Products, Quality Conscious Customers and Efficient Operations Rs. Million Pharmaceuticals EBIT Crop Protection EBIT 1,293 1,117 +17% +27% 986 865 805 777 745 547 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 © Hikal Limited
Slide 37: Standalone Profit & Loss – Quarter & Annual
Standalone Profit & Loss – Quarter & Annual Rs. Million Q1 FY20 Q1 FY19 Y-o-Y FY19 FY18 Y-o-Y Net Sales 4,032 3,256 24% 15,896 13,001 22% Expenditure 3,347 2,649 12,915 10,584 EBITDA 685 607 13% 2,981 2,417 23% Margin 17.0% 18.6% 18.8% 18.6% Other Income 7 14 23 45 Depreciation 203 226 929 856 Finan
Slide 38: Standalone Balance Sheet
Standalone Balance Sheet Rs. Million Assets Mar-19 Mar-18 Equities & Liabilities Mar-19 Mar-18 Total Non Current Assets 8,555 8,518 Shareholders Fund 7,562 6,694 Fixed Assets Share Capital 247 164 Tangible Assets 7,103 6,301 Intangible Assets 27 35 Other Equity 7,315 6,530 Intangible Assets Under 56
Slide 39: Annual Dividend Payout
Annual Dividend Payout Dividend Payout 26% 26% 21% 19% 14% 24% 24% 18% 19% 17% including DDT 8.36 6.27 5.70 5.18 4.88 4.39 3.59 3.35 3.28 2.05 1.60 1.20 1.20 1.00 1.00 1.20 1.20 1.20 0.90 0.50 FY10 FY11 FY12 FY13 FY14* FY15 FY16 FY17 FY18 FY19 EPS DPS ▪ Total Dividend of 60% of face value of Rs. 2 e
Slide 40: Contact Us
Contact Us Company : Investor Relations Advisors : Hikal Limited Strategic Growth Advisors Pvt. Ltd. CIN: L24200MH1988PTC048028 CIN: U74140MH2010PTC204285 Mr. Sham V. Wahalekar Ms. Payal Dave / Mr. Jigar Kavaiya +91-9819916314 / +91-9920602034 sham_wahalekar@hikal.com payal.dave@sgapl.net / jigar.ka
Slide 41: HIKAL
HIKAL