Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (August 2020)
55 slides from Sun Pharmaceutical Industries's investor presentation, August 2020
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – August 2020 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 9th in US Generics Market## India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Rest of World • Expanding presence in Rest of World Manufacturing Footpr
Slide 5: World's 4th Largest Specialty Generic Pharma Co
World’s 4th Largest Specialty Generic Pharma Co 0.0 2.0 4.0Generic Sales 2019 Worldwide 6.0(US$ in billions) 8.0 10.0 12.0 Mylan 10.9 Teva 8.9 Novartis 8.4 Sun Pharma + Taro 4.4 Pfizer 3.4 Fresenius 3.3 Aurobindo 2.8 Lupin 2.3 Cipla 2.3 Aspen 1.9 Apotex 1.8 Dr. Reddy 1.8 Sawai 1.7 Himka 1.6 Zadus Ca
Slide 6: Sun Pharma today
Sun Pharma today US Formulations India Branded Generics 9th largest generics company in US* with a strong No.1 ranked with 11 classes of doctor categories pipeline (95 ANDAs & 6 NDAs awaiting approval) Leading position in high growth chronic therapies Presence in generics, Specialty branded segments
Slide 7: Driving Long Term Growth
Driving Long Term Growth • Optimize operational costs • Enhance share of specialty business globally • Vertically integrated operations • 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 Portfolio
Our Specialty Portfolio • Indication - For plaque psoriasis • Launched in US in October 2018 • Phased launch in Europe by Almirall starting December 2018 onwards • Launched in Australia in December 2018 Ilumya/ • Long term clinical data shows that the significant response rate seen in 52 & 64 Ilumet
Slide 9: Our Specialty Portfolio
Our Specialty Portfolio • Indication - For LABCC (locally advanced basal cell carcinoma) Odomzo • Currently marketed in US, Germany, France, Denmark, Switzerland, Australia and Israel • Indication - For metastatic castration resistant prostate cancer in combination with Yonsa methylprednisolone • La
Slide 10: Highly Diversified Revenue Base
Highly Diversified Revenue Base Emerging Markets Western Europe & 17% Other Markets # 14% API & Others 6% FY20 Sales India Branded Rs.323 billion Formulations 30% US Formulations 33% # Includes Western Europe, Canada, Japan , Australia, New Zealand and other markets. © Sun Pharmaceutical Industries
Slide 11: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in INR Billion) 323.3 77.2 47.8 272.5 64.8 40.3 Adjusted Sales EBITDA Net Profit 13.5 CAGR 13.6 CAGR CAGR 39.0 25% 4.0 17% 11.9 4.2 20% FY05 FY10 FY15 FY20 FY05 FY10 FY15 FY20 FY05 FY10 FY15 FY20 65.6 50.1 19.9 56.2 16.7 32.7 Operating Free Cash Adjuste
Slide 12: Consistent profitability and returns
Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin (adjusted) 77% 23% 29% 73% 27% 19% 72% 73% 71% 20% 21% 20% 13% 14% 13% FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 ROCE ROE Market Cap (USD Bn) 20% 30 15% 16% 18% 25 18 9% 8% 9% 16 8% 9% 9% 12
Slide 13: Profitability
Profitability Gross Margin EBITDA Margin Net Margin 77% 73% 73% 72% 71% 29% 28% 66% 64% 64% 64% 63% 22% 20% 21% 20% 23% 18% 19% 17% 16% 14% 17% 12% 13% 14% 10% 9% 9% 9% FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Gross margin= (Net Sales – Material Cost) / Net Sales *
Slide 14: Creating a Global Company
Creating a Global Company Agreement with Merck for in- Acquired Began with 5 Acquired Dusa Acquired InSite Acquired Pola licensing Biosintez in Russia products Vision ophthalmic Pharma in Japan Tildrakizumab portfolio Year 1983 1994 2010 2012 2013 2014 2015 2016 2018 2019 2020 • Entry into Japan - A
Slide 15: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale Middle Exclusive licensing agreement with East & Registration and commercialization of the product in all Middle 2020 Himka for Ilumya North East & North Africa (MENA) markets. Africa Licensing agreement with SPARC for Potential treatment for atopic
Slide 16: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale 2016 Acquired 14 brands from Novartis Japan Entry into Japan Distribution services agreement in India for brand “Oxra” & Distribution agreement with 2016 India “Oxramet”® (brands of dapagliflozin, used for diabetes AstraZeneca treatment) Distributio
Slide 17: Successful track record of turning around acquisitions
Successful track record of turning around acquisitions ROCE 24% 25% 26% 27% 38% 37% 18% 34% 20% 24% 27% 15% 8% 8% 350 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 300 Assets of: Taro Bryan Dusa Hungary URL 250 Ranbaxy Able Labs Chattem InSite Vision 200 150 100 50 - FY94 FY95 FY96 FY97 FY
Slide 18: US Business
US Business 33% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 18
Slide 19: US Business at a glance
US Business at a glance 9th Largest Pharma Company in the US Generics Market * Dermatology Segment • Ranked 2nd by prescriptions## in the US dermatology market • Wide basket of 586 ANDAs & 61 NDAs filed and 491 ANDAs & 55 Comprehensive Portfolio NDAs approved across multiple therapies Robust Pipelin
Slide 20: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Key Milestones in US Sales in Rs billion FY98 •Entry in US through Caraco acquisition 10 year CAGR - 25% •Acquired Taro Pharma – Entry into US FY10 137 138 dermatology market 135 •Acquired DUSA - Entry in branded specialty FY13 market •Acquired InSite Visio
Slide 21: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved (Cumulative) ANDA Approvals by Therapeutic Area 584 586 126 572 571 581 561 107 483 491 453 413 427 422 66 51 47 31 19 15 14 15 CNS CVS Oncology Metabolism Others Gastro Skin Pain Allergy Antibiotic FY16 FY17 FY18 FY19 FY20 Q1FY21 Cumulati
Slide 22: India Branded Generic Business
India Branded Generic Business 30% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 22
Slide 23: India Business at a glance
India Business at a glance No. 1 in India Market Position** • No. 1 ranked with 8.2% market share Prescription Ranking## • No. 1 ranked by prescriptions with 11 different classes of doctors Chronic Segment • Market leader in the chronic segment Acute Segment • Strong positioning in the acute segment
Slide 24: Largest Pharma Company in India
Largest Pharma Company in India Market Share Branded Generic Sales in India as of 12 Months ended June 2020 (US$ in mn) 1,610 Sun Pharma 8.2% 1,232 Abbott + Abbott HC + Novo 6.3% 914 Cipla 4.7% 839 Mankind 4.3% 814 Zydus + Biochem 4.1% 745 Lupin 3.8% 682 Alkem + Cachet + Indchemie 3.5% 614 Torrent 3
Slide 25: 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 10 year CAGR -19% Others Opthalmology 2% 4% Cardiology Urology 3% 18% 97 Gynaecology, 4% Impact of Ranbaxy Respira
Slide 26: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 11 Doctor Categories* Prescription Ranking Specialist Feb ‘16 Feb ‘17 Feb ‘18 Feb ’19 Feb ’20 Psychiatrists 1 1 1 1 1 Neurologists 1 1 1 1 1 Cardiologists 1 1 1 1 1 Orthopaedic 1 1 1 1 1 Gastroenterologists 1 1 1 1 1 Nephrologists 1 1 1 1 1
Slide 27: Best-in-class field force productivity
Best-in-class field force productivity Sales Per Medical Representative (Rs. Mn) • Well trained and scientifically Impact of 11.0 Ranbaxy oriented sales representatives Acquisition 10.0 team with strong performance track record 8.6 8.8 8.3 7.8 7.4 • Field force with highest productivity amongst key
Slide 28: Emerging Markets
Emerging Markets 17% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 28
Slide 29: Emerging Markets Business at a glance
Emerging Markets Business at a glance Largest Indian Company in Emerging Markets Global footprint • Presence in about 80 markets • Romania, Russia, South Africa, Brazil, Mexico and complementary Focus Markets & affiliated markets Product Portfolio • Extensive basket of branded products Customer Focu
Slide 30: Western Europe, Canada, Japan, ANZ & Other Markets
Western Europe, Canada, Japan, ANZ & Other Markets 14% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 30
Slide 31: 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 32: Global Consumer Healthcare Business
Global Consumer Healthcare Business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 32
Slide 33: 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 • Romania, Russia, South Africa, Nigeria, Myanmar, Ukraine, Poland, Focus Markets Thailand, Belarus, Kazakhstan, Morocc
Slide 34: Active Pharmaceutical Ingredients (API) Business
Active Pharmaceutical Ingredients (API) Business 6% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 34
Slide 35: 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 36: Research & Development
Research & Development © Sun Pharmaceutical Industries Limited. All Rights Reserved. 36
Slide 37: Research & Development
Research & Development Cumulative R&D Spend of over Rs 175 billion to date • R&D spend at 6.1% of sales for FY20 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 • Appro
Slide 38: R&D Investments
R&D Investments R&D Investments Filings and Approvals 6.5% 7.2% 8.3% 7.6% 8.6% 6.9% 6.1% ANDA NDA/BLA DMF/CEP Patents 23.0 23.1 22.5 61 586 434 998 19.6 19.8 19.7 491 55 895 325 10.4 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Filed Approved Filed Approved Filed Approved Filed Granted R&D Investments (Rs Bn)
Slide 39: Global Manufacturing Presence
Global Manufacturing Presence © Sun Pharmaceutical Industries Limited. All Rights Reserved. 39
Slide 40: Global Manufacturing Presence
Global Manufacturing Presence World Class Manufacturing Infrastructure • 43 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 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing 29 Finished dosage manufacturing sites • India : 14, US : 3, Japan : 2 • 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 Topica
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 Israel Makov Former President & CEO of Teva Pharma. Industries Ltd. Independent Director Independent
Slide 44: Financials
Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44
Slide 45: Financials
Financials Market Capitalisation Rs. 1,200 billion / US$ 17 billion (as of 17th Sept 2020) ( All Figures in Rs. Mn ) FY16 YoY FY17 YoY FY18 YoY FY19 ** YoY FY20 YoY P&L Summary Sales 2,78,881 2% 3,02,642 9% 2,60,659 -14% 2,86,863 10% 3,23,252 13% Gross Profit 2,15,577 5% 2,21,335 3% 1,86,413 -16% 2,
Slide 46: Sales Break-up
Sales Break-up In INR Billion In USD Million Sales 261 287 323 4,044 4,101 4,559 20 289 18 45 229 264 638 15 35 461 494 30 55 776 54 751 767 48 105 1487 1357 87 107 1526 97 1246 1369 80 73 1051 FY18 FY19 FY20 FY18 FY19 FY20 India Formulations US Formulations #Exchange Rate : US$1 = Rs 64.46 (for FY1
Slide 47: EBITDA Trend
EBITDA Trend In INR Billion Sales 279 303 261 287 323 % of Sales 23% 27% 28% 27% 29% 17% 16% 21% 21% 20% 33% 28% 31% 31% 32% 27% 29% 20% 21% 20% FY16 FY17 FY18 FY19 FY20 EBITDA Other Expenditure Personnel Costs Material Costs © Sun Pharmaceutical Industries Limited. All Rights Reserved. 47
Slide 48: Cash Flow
Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 71 67 66 50 56 33 33 34 39 20 22 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY16 FY17 FY18 FY19 FY20 (10) © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48
Slide 49: Financial Ratios
Financial Ratios FY16 FY17 FY18 FY19 ** FY20 Growth (%) Sales 2.4 8.5 (13.9) 10.1 12.7 Gross Profit 5.1 2.7 (15.8) 11.7 10.9 EBITDA (2.1) 16.1 (40.9) 14.3 9.3 Net Profit 0.1 53.2 (69.9) 27.2 41.3 Net Profit (Adjusted) 9.5 # 33.1 (52.6) # 17.5 # 3.8 # Margins (%) Gross Margin 77.3 73.1 71.5 72.6 71.4
Slide 50: Key Financials Q1 FY21
Key Financials Q1 FY21 ( All Figures in Rs. Mn ) Q1 FY21 Q1 FY20 CHANGE FY20 FY19 CHANGE Gross Sales 74,672 82,593 -9.6% 3,23,252 2,86,863 12.7% Gross Profit 54,976 58,015 -5.2% 2,30,947 2,08,173 10.9% Gross Margin 73.6% 70.2% 71.4% 72.6% EBITDA 17,255 18,806 -8.2% 64,774 59,280 9.3% EBITDA Margin 2
Slide 51: Sales Breakup Q1 FY21
Sales Breakup Q1 FY21 ( All Figures in Rs. Mn ) Q1 FY21 Q1 FY20 CHANGE FY20 FY19** CHANGE Formulation India 23,884 23,137 3% 97,102 73,483 32% US 21,364 29,474 -28% 1,05,425 1,06,713 -1% Emerging Markets 13,161 13,486 -2% 55,044 53,625 3% ROW 10,300 11,591 -11% 45,210 34,554 31% Sub-total 68,709 77,
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 • Focus on productivity enhancement India • Maintain leadersh
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 • Focus on developing complex products across multiple dosage forms R&D • Invest to further build the specialty pipe
Slide 54: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company* US • Ranked 9th in US Generics Market## India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Rest of World • Expanding presence in Rest of World Manufacturing Footpr
Slide 55: 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 © 2017 Sun Pharmaceutical Indus
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