Slide 1: Investor Presentation Q2 and H1 FY20
Investor Presentation Q2 and H1 FY20 12th November 2019 BSE: 524404 | NSE: MARKSANS | ISIN: INE750C01026 ©2019 – Marksans Pharma Limited, All Rights Reserved.
Slide 2: Forward looking statement
Forward looking statement Certain statements in this presentation concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks an
Slide 3: Agenda
Agenda ▪ Company at a glance ▪ Long-term strategy ▪ Research & development ▪ Segmental revenue composition ▪ Operational review and financials ▪ Quarterly review – Q2 FY20 ▪ Investment rationale ©2019 – Marksans Pharma Limited, All Rights Reserved. 3
Slide 4: Company at a glance
Company at a glance ©2019 – Marksans Pharma Limited, All Rights Reserved. 4
Slide 5: Company overview
Company overview Business Description Business Model • 94% of revenues comes from regulated • Marksans Pharma Ltd., headquartered at Mumbai, is engaged in Research, markets Manufacturing & Marketing of generic pharmaceutical formulation • Key focus areas lie in the OTC & prescription (Rx) drugs • Fo
Slide 6: Marksans Pharma Evolution
Marksans Pharma Evolution Investment Phase Consolidation Phase Recovery Phase Growth Phase FY05 - 09 FY10 - 12 FY13 - 16 FY17 - 19 • Acquired 3 companies: • Integration of acquired • Acquired Time-Cap • The Company crossed Rs 1. Nova Pharmaceuticals companies was running Laboratories Inc. 1000 crore
Slide 7: Business Model
Business Model Focus on Regulated Forward integrated Wider product basket Markets business model • Marksans commenced business • Marksans commenced • Marksans commenced its journey with CRAMS directed at the UK operations as a formulations with products addressing the pain and Australian markets man
Slide 8: Company structure
Company structure Marksans Pharma (UK) Limited Marksans Holdings Limited 85+ product Distribution of quality licenses; generic pharma; only OTC; Wholesale Regional sales development Manufacturer of distributor of Manufacturer of range of across Asia (China, Japan, OTC Liquids & generic pharma OTC &
Slide 9: Manufacturing capabilities
Manufacturing capabilities Goa, India Southport, UK Farmingdale, USA • Manufactures oral solid tablets and soft • Manufactures non-sterile liquids, • Manufactures soft gels, tablets and gelatin capsules ointments and powder products capsules • One of the biggest manufacturing facility • Supplies to
Slide 10: Long-term strategy
Long-term strategy ©2019 – Marksans Pharma Limited, All Rights Reserved. 10
Slide 11: Strategic focus on regulated markets
Strategic focus on regulated markets Marksans Pharma generates ~95% of its revenues from regulated markets • Marksans Pharma entered strategic tie-ups and acquired key players in major markets to expand its global footprint • Company can generate higher margins by eliminating third parties from the
Slide 12: Niche formulations with few competitors
Niche formulations with few competitors Marksans Pharma is currently one of the most active Indian firms focused in Softgel segment • Differentiated offerings: Focused on softgel capsules with a view to build a differentiated set of offerings in the crowded generics market • Limited competition - Gi
Slide 13: Forward integrated business model
Forward integrated business model R&D and Manufacturing Goa & Mumbai* (India) Southport (UK) Farmingdale (US) Supply chain and EXPORT distribution Australasia EMEA UK & Europe North America / Canada ROW End Consumers Retail chains Pharmacy stores Hospitals *Mumbai has only R&D center in Navi Mumbai
Slide 14: Research & development
Research & development ©2019 – Marksans Pharma Limited, All Rights Reserved. 14
Slide 15: R&D continues to be the backbone of the Marksans
R&D continues to be the backbone of the Marksans In FY19, total R&D expenditure as a percentage of total standalone revenue was 3.37 % R&D Expenditure (₹ Lakhs) R&D activities comprises of: 1,455.1 • Developing generic products and pharmaceutical formulations 806.2 • Identifying niche areas (such as
Slide 16: Segmental revenue composition
Segmental revenue composition ©2019 – Marksans Pharma Limited, All Rights Reserved. 16
Slide 17: The US, North America has increased its share in revenue
The US, North America has increased its share in revenue over the past years REVENUE MIX Europe, UK US, North America Australia, NZ RoW Company’s business is 3% 7% 6% 4% 6% classified under 4 heads: 11% 12% 14% 11% 12% • North America/ US generics 20% • Europe/UK generics 36% 45% 41% 41% • Australia
Slide 18: The UK is the highest contributor to revenues
The UK is the highest contributor to Marksans Pharma’ s revenues Overview of the market • The UK pharmaceutical market is estimated to grow from ~USD 29 billion in 2015 to ~USD 43 billion by 2020, at a CAGR of 8.4%, driven primarily by a robust life sciences 413.0 industry Company presence Total rev
Slide 19: The United States
Marksans is among a few Indian players with a proprietary marketing presence in the US Overview of the market • The US holds over 30-40% of the global pharmaceutical market. It is expected to reach USD 190.4 billion by 2024, at a The projected CAGR of 10.6% during 2019-2024, due to favoring United 4
Slide 20: Australia and New Zealand
Australia and NZ region registered highest growth among regulated markets in FY19 Overview of the market • Australia’s pharmaceutical market is set to rise from >$22.85 billion in 2016 to $25.2 billion by 2020 registering a CAGR of Australia 2% and New 119.9 Company presence Total Revenues • Zealand
Slide 21: Rest of the world
After harnessing the regulated markets, Marksans is venturing out in the emerging countries Overview of the markets • ROW includes markets of South East Asia, MENA, Russian Federation & Africa Rest of 60.3 Company presence Total Revenues • the world (र Cr.) Targeting four major clusters such as Sout
Slide 22: Operational review and financials
Operational review and financials ©2019 – Marksans Pharma Limited, All Rights Reserved. 22
Slide 23: Consolidated revenue crossed INR 1000 Cr. in FY19
Consolidated revenue crossed INR 1000 Cr. in FY19 Topline driven by key geographies Revenue (₹ Cr.) 13.9% • The revenue growth in FY19 was driven by FY19 1,004.69 increasing market share in the US & North American region CAGR FY18 913.05 US Region: • Revenue from the US market grew 10.76% over FY18,
Slide 24: EBITDA margin increased during FY19
EBITDA margin increased by 418 bps during FY19 Steady growth in the profitability EBITDA (₹ Cr.) EBITDA Margin (%) • Gross margin improved from 42.7% during FY18 13.6% to 50.2% in FY19 due to better product mix in US FY19 136.77 62.5% 9.5% • The company reported a ~410 bps increase in 6.7% FY18 86.8
Slide 25: Balance Sheet Trends as on 31st March, 2019
Balance Sheet Trends as on 31st March, 2019 Particulars RoE RoCE Net Debt to EBITDA Mar-19 Mar-18 (₹ Cr.). 18.3% 17.4% 0.89 Net Worth 542.48 470.86 12.7% 12.0% 0.49 Capital 571.08 497.51 Employed Net debt 66.37 77.54 FY18 FY19 FY18 FY19 FY18 FY19 Cash & Bank Highlights 33.54 39.88 Balance • Marksans
Slide 26: Balance Sheet Trends as on 30th September, 2019
Balance Sheet Trends as on 30th September, 2019 Particulars RoE* RoCE* Net Debt to EBITDA* Sep-19 Sep-18 (₹ Cr.). 18.7% 0.47 13.9% 15.2% Net Worth 587.10 519.73 10.7% 0.19 Capital 623.62 553.53 Employed Net debt 26.28 50.33 H1FY19 H1FY20 H1FY19 H1FY20 H1FY19 H1FY20 *Annualised Cash & Bank 47.30 35.0
Slide 27: Quarterly Review – Q2 FY20
Quarterly Review – Q2 FY20 ©2019 – Marksans Pharma Limited, All Rights Reserved. 27
Slide 28: Growth in Profitability
Growth in Profitability YoY% YoY% YoY Growth YoY Growth Q2FY20 Q2FY19 (Constant 1HFY20 1HFY19 (Constant (%) (%) Rs. Cr. currency) currency) Total Revenue 264.28 268.24 -1.48% 6.90% 511.49 506.73 0.94% 9.38% EBITDA 41.45 36.32 14.12% 20.15% 76.05 75.04 1.34% 6.70% EBITDA Margin% 15.68% 13.54% 214 bps
Slide 29: Business Review
Business Review YoY% YoY% YoY Growth YoY Growth Mix Q2FY20 Q2FY19 (Constant 1HFY20 1HFY19 (Constant (%) (%) (H1 FY20) % currency) currency) Rs. Cr. Europe, UK 124.37 133.86 -7.09% 2.76% 225.24 242.10 -6.96% 2.90% 44.04% US & North America 99.79 99.11 0.69% 6.01% 203.36 191.19 6.37% 11.99% 39.76% Aus
Slide 30: Financials
Financials PARTICULARS (₹ Cr.) Q2’20 Q1’20 Q2’19 H1'20 H1'19 FY19 FY18 Total Revenue 264.3 247.2 268.3 511.5 506.7 1,004.7 921.2 Material Consumption 136.8 125.4 130.8 262.1 248.3 500.3 528.0 Gross Profit 127.5 121.8 137.5 249.4 258.5 504.4 393.2 Gross Margin % 48.3% 49.3% 51.3% 48.8% 51.0% 50.2% 42
Slide 31: Investment Rationale
Investment Rationale ©2019 – Marksans Pharma Limited, All Rights Reserved. 31
Slide 32: Investment Rationale
The US, the UK and Company is widening its Australia are the key products portfolio in the Marksans’ markets with all of complex and high-margin them being now empowered generics segment with all regulatory approvals Marksans is among a few Marksans is among a mid and small-sized pharma handful of I
Slide 33: Investor Relations Team at Marksans Pharma
Investor Relations Team at Marksans Pharma Jitendra Sharma, CFO Swati Sablok Marksans Pharma Ltd Christensen Investor Relations Tel: +91 022 40012000 Tel : +91 22 4215 0210 jitendra@marksanspharma.com ssablok@christensenir.com Corporate Office: 11th Floor Grandeur, Off Veera Desai Road, Opp Gundecha