Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (September 2017)
56 slides from Sun Pharmaceutical Industries's investor presentation, September 2017
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – Sept 2017 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 4th Largest Global Specialty Generic Company US • Ranked 4th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Europe • Expanding presence in Europe Manufacturing
Slide 5: World's 4th Largest Specialty Generic Pharma Co
World’s 4th Largest Specialty Generic Pharma Co 2016 Worldwide Generic Sales (US$ in billions) Teva 9.9 Mylan 9.6 Novartis 9.0 Sun Pharma 4.6 Allergan 4.2 Pfizer 3.5 Endo International 2.5 Fresenius 2.5 Lupin 2.5 Sanofi 2.1 Aspen Pharmacare 2.0 Aurobindo 1.9 Cipla 1.7 Dr. Reddy 1.7 Nichi-Iko Pharma
Slide 6: Sun Pharma today
Sun Pharma today US Formulations India Branded Generics 4th largest generics company in US* with one of the No.1 ranked with 11 classes of doctor categories strongest pipeline (151 ANDAs & 5 NDAs awaiting Leading position in high growth chronic therapies approval) Specializes in technically complex
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 targeting IL-23) from MSD for treating chronic plaque psoriasis- Filed with US FDA and EMA for European market. • Acquired Ocular Technologies – Gives access to global rights for Seciera – for treating Dry Eye Disease. Anno
Slide 9: Highly Diversified Revenue Base
Highly Diversified Revenue Base Emerging Markets 15% Western Europe & Other Markets # 9% India Branded Formulations API & Others 26% 5% FY17 Sales USD 4.5 billion US Formulations 45% # Includes Western Europe, Canada, Japan , Australia, New Zealand and other markets. © Sun Pharmaceutical Industries
Slide 10: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in USD Million) 4512 1308 1038 679 540 1672 Adjusted Net Sales EBITDA Net Profit 472 CAGR 148 CAGR 173 CAGR 144 26% 41 26% 35 25% FY02 FY07 FY12 FY17 FY02 FY07 FY12 FY17 FY02 FY07 FY12 FY17 1055 505 0.4 318 0.2 467 Operating Free Cash 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% 32% 75% 77% 73% 29% 29% 23% 27% 18% 19% FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 ROCE ROE Market Cap (USD Bn) 27% 27% 31% 35 26% 30 25 16% 19% 20% 15% 15% 18%
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% 75% 44% 45% 73% 41% 66% 35% 29% 33% 32% 63% 63% 29% 62% 62% 28% 61% 23% 22% 23% 20% 19% 19% 19% 18% 17% 14% 14% 12% 13% 10% 7% FY12 FY13 FY14 FY15 F
Slide 13: Creating Value, Continuously…
Creating Value, Continuously… • Licensing agreement with Almirall for Tildrakizumab in Europe for Psoriasis • Announced positive results from Phase-3 trials for Tildrakizumab • Entry into Japan -Acquired 14 brands from Began with 5 Acquired URL Novartis IPO - Rs. 550 Mn Acquired Taro Acquired Dusa •
Slide 14: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale Acquired global rights for Seciera & 2016 Global Enhances specialty pipeline. Odomzo 2016 Acquired Biosintez Russia Local manufacturing capability to enhance presence in Russian market Licensing agreement with Almirall for 2016 Europe Strengthening
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% 16% 5,000 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 4,500 Taro 4,000 Assets of: Dusa URL 3,500 Bryan Ranbaxy Hungary InSite Vision 3,000 Able Labs 2,500 Chattem 2,000 1,500 1,000
Slide 16: US Business
US Business 45% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16
Slide 17: US Business at a glance
US Business at a glance 4th Largest Pharma Company in the US Generics Market * • Largest generic dermatology company and amongst top 5 Dermatology Segment branded dermatology company in the US • Wide basket of 584 ANDAs & 42 NDAs filed and 433 ANDAs & 37 Comprehensive Portfolio NDAs approved across
Slide 18: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Sales in USD Million Key Milestones in US FY98 • Entry in US through Caraco acquisition 2,244 FY98-FY10 • Ramp-up in US business 2,066 2,051 • Launched many complex generics & 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 433 ANDA Approvals by Therapeutic Area 597 584 105 572 103 478 449 438 433 413 397 377 344 63 311 250 46 225 30 28 21 15 12 10 Gastro Allergy Antibiotic CNS CVS Metabolism Other Skin Pain Oncology FY11 FY12 FY13 FY14 FY15 FY16 Jun-17 Cumul
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 8.6% market share Market Position** • Growth of 11% in-line with average industry growth of 10% Prescription Ranking## • No. 1 ranked by prescriptions with 11 different classes of doctors Chronic Segment • Market leader in the chronic seg
Slide 22: Largest Pharma Company in India
Largest Pharma Company in India Market Share Branded Generic Sales in India as of 12 Months ended Mar 2017 (US$ in mn) Sun Pharma 8.6% 1,509 1,088 Abbott 6.2% 823 Cipla 4.7% 772 Zydus + Biochem 4.4% 648 Mankind 3.7% 609 Alkem + Cachet + Indchemie 3.5% 587 Lupin 3.3% 530 Glaxo 3.0% 501 Macleods 2.8%
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 Others 77 Opthalmology 2% 6% Cardiology 71 Respiratory 4% 19% 67 Vitamins / Minerals / Nutrients, 4% 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 • 9,200+ sales representatives • Sun pharma market share has consistently increased from 2.4% in 2000 to 8.1% in • Covering over 600,000* doctors 2016 (IMS Data for Dec’16) * Does not exclude ov
Slide 25: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 11 Doctor Categories* Prescription Ranking Specialist June ’14 June ‘15 June ‘16 June ‘17 Psychiatrists 1 1 1 1 Neurologists 1 1 1 1 Cardiologists 1 1 1 1 Orthopaedic 1 1 1 1 Gastroenterologists 1 1 1 1 Nephrologists 1 1 1 1 Diabetologists 2
Slide 26: Best-in-class field force productivity
Best-in-class field force productivity Sales Per Representative (USD ‘000) Field Force Productivity 232 Sun • USD 123,751 / MR Pharma 202 186 182 Industry • USD 89,972 / MR Average* * Based on brokerage reports 123 124 123 • Well trained and scientifically oriented sales representatives team with st
Slide 27: Emerging Markets
Emerging Markets 15% 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, Japan, ANZ & Other Markets
Western Europe, Canada, Japan, ANZ & Other Markets 9% 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, Japan Market Presence and few other markets • Expanding basket of products including injectables and hospital Product Portfolio products as well as products for
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 • Core markets include. India, Russia, Romania, Nigeria, South Africa & Myanmar Market Focus • Growth markets include U
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 • Approx. 20 APIs scaled up annu
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 USD 1.6 billion to date • R&D spend at 7.6% of Net Sales for FY17 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 5.8% 5.6% 6.3% 6.5% 7.2% 8.3% 7.6% ANDA NDA/BLA DMF/CEP Patents 352 584 42 430 1023 345 320 433 751 289 173 130 36 93 73 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Filed Filed Filed Filed R&D Expenses (USD Mn) R&D Exp (% of Net Sales) As of June 30, 2017
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 • 41 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 Penza (Hungary) (Israel) (Russia) Ontario (Canada) (US) Cluj (Romania) Billerica, MA Giza, (Egypt) New Jersey(US) Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Cranbury Bangladesh Plant Port Fairy (Australia) Wilmington M.A
Slide 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing 27 Finished dosage manufacturing sites • India : 13, US : 4 • Canada, Hungary , Israel, Bangladesh, South Africa, Malaysia, Romania, Egypt, Nigeria and Russia : 1 each • Capacities available for a variety of finished dosages Orals Injectables / Sterile Topicals Tablets
Slide 42: API Manufacturing
API Manufacturing 14 API manufacturing locations • India : 9, Australia : 2, Israel : 1, US : 1, Hungary : 1 Panoli & Ahmednagar Australia, Hungary & (both India) Tennessee (US) • International regulatory approvals: USFDA, API • Controlled substances European Key Plants manufacture • Stand alone uni
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. 1,207 billion / US$ 18 billion ( All Figures in USD. Mn ) FY13 YoY FY14 YoY FY15 YoY FY16 YoY FY17 YoY P&L Summary Sales 2,067 24% 2,649 28% 4,457 68% 4,262 -4% 4,512 6% Gross Profit 1,685 27% 2,189 30% 3,354 53% 3,295 -2% 3,300 0% EBITDA 903 33% 1,178 30% 1,263
Slide 46: Sales Break-up
Sales Break-up In INR Billion In USD Million Sales 275 279 303 4,501 4,262 4,512 175 245 16 381 225 385 11 15 26 330 23 22 611 675 45 548 37 36 2244 2066 2051 138 137 135 71 77 1090 1093 1155 67 FY15 FY16 FY17 FY15 FY16 FY17 India Formulations US Formulations #Exchange Rate : US$1 = Rs 61.13 (for FY
Slide 47: EBITDA Trend
EBITDA Trend In USD Billion Sales 1.7 2.1 2.7 4.5 4.3 4.5 % of Sales 21% 19% 17% 25% 23% 27% 14% 13% 15% 16% 17% 16% 24% 25% 24% 30% 33% 28% 41% 44% 44% 29% 27% 29% FY12 FY13 FY14 FY15 FY16 FY17 EBITDA Other Expenditure Personnel Costs Material Costs © Sun Pharmaceutical Industries Limited. All Righ
Slide 48: Cash Flow
Cash Flow Net Cash From Operating Activities (USD Mn) Free Cash Flow (USD Mn) 1,022 1,035 536 919 505 505 502 655 617 462 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 All numbers above exclude Ranbaxy financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48
Slide 49: Financial Ratios
Financial Ratios FY13 FY14 FY15 FY16 FY17 Growth (%) Sales 23.6 28.1 68.2 (4.4) 5.9 Gross Profit 26.7 29.9 53.2 (1.8) 0.2 EBITDA 32.9 30.5 7.2 (8.5) 13.2 Net Profit (1.1) (5.2) 42.8 (6.4) 49.5 Net Profit (Adjusted) 18.2 # 42.8 # (16.6) # 2.3 # 29.9 Margins (%) Gross Margin 81.5 82.6 75.3 77.3 73.1 E
Slide 50: Key Financials Q1 FY18
Key Financials Q1 FY18 ( All Figures in USD Mn ) Q1 FY18 Q1 FY17 CHANGE FY17 Sales 957 1,197 -20% 4,512 Gross Profit 696 921 -24% 3,300 Gross Margin 73% 77% 73% EBITDA 163 399 -59% 1,308 EBITDA Margin 17% 33% 29% Net Profit -66 304 -122% 1,038 Net margin -7% 25% 23% Net Profit (Adjusted) 82 304 -73%
Slide 51: Sales Breakup Q1 FY18
Sales Breakup Q1 FY18 ( All Figures in USD. Mn ) Q1 FY18 Q1 FY17 CHANGE FY17 Formulation India 273 275 -1% 1,155 US 351 603 -42% 2,051 Emerging Markets 168 153 10% 675 ROW 115 83 38% 385 Sub-total 907 1,114 -19% 4,267 Bulk 48 70 -31% 238 Others 1 3 -46% 7 Gross Sales 957 1,187 -19% 4,512 US Formulat
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: FY18 Guidance
FY18 Guidance Consolidated Revenues • May decline by single digit over FY17 • EBITDA Margin approximately 20%-22% over the remaining EBITDA period R&D Investments • Approximately 9%-10% of revenues to be invested in R&D • Target US$ 300 million in synergy benefits from the Ranbaxy Ranbaxy Integratio
Slide 55: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company US • Ranked 4th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Europe • Expanding presence in Europe Manufacturing
Slide 56: Thank You
Thank You! For more information please contact: Investors: Nimish Desai Thank You Tel : +91 22 4324 4324, Ext 2778 Tel Direct +91 22 43242778 nimish.desai@sunpharma.com Corporate Address: SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2016 Sun Pharmaceutical Indus
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