Hikal Limited · NSE:HIKAL
Hikal — Investor Presentation (November 2014)
44 slides from Hikal's investor presentation, November 2014
Slide 1: Investor Presentation November 2014
Investor Presentation November 2014
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 Leverage Strong Relationships across segments to create Business Opportunities Pharmaceuticals Crop Protection Research & Development Contract & Custom Custom Synthesis and Offers Right Combination of Manufacturing Contract Manufacturing of Capabilities, Quality Generics Agroch
Slide 5: Celebrating 25 Years
() Celebrating 25 Years 25 years of Hikal
Slide 6: Milestones
Milestones Year Milestone 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 Manufact
Slide 7: Quality Compliance
Quality Compliance Audits and Approvals for the Company and its Facilities reinforces our Credibility to match Global Standards United Japan 18001 States Responsible 14001 Korea & Care 9001 Australia Rx-360 17025 7
Slide 8: Hikal's Strategy is focused
Hikal's Strategy is focused Vision To be a leading reliable & high quality sustainable CDMO player globally Aggressive growth in Pharmaceuticals Animal Health & Develop own portfolio of Crop Protection products as next wave of Hikal growth Strategy • Support NCE & Gx Molecules • Serving a large rang
Slide 9: 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 mature Discovery research Pre launch growing Off patent Discovery Development Full scale Manufacturin
Slide 10: Contract Development & Manufacturing Services Provider
Contract Development & Manufacturing Services Provider 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 degrees of pre-transfer involvement Manufacturing Commercial Manufact
Slide 11: Board of Directors
Board of Directors Jai Hiremath Sameer Hiremath Baba Kalyani Dr. Wolfgang Welter Dr. Peter Pollak Prof. Axel Kleemann Chairman & MD President & Joint MD Sugandha Hiremath Prakash Mehta Kannan Unni Shivkumar Kheny Amit Kalyani 11
Slide 12: Management Team
Management Team Jai Hiremath Sameer Hiremath Chairman & MD President & Joint MD Dr. P. Nightingale Manoj Mehrotra Satish Sohoni Ravi Khadabadi Sham Wahalekar Anish Swadi Zafrullah Khan R&D Pharmaceuticals Crop Protection Supply Chain Finance Bus. Dvlp. & Human Resources Strategy 12
Slide 13: Scientific Advisory Board
Scientific Advisory Board Padma Shri in 2000 by the He holds a D.Sc. from the University of Marseilles, France; Ph.D. President of India In Organic Chemistry from Pune University - National Chemical Laboratory; and a Ph.D. from Michigan State University and Ohio Chevalier de la Légion d'Honneur Stat
Slide 14: Hikal – Locations
Hikal – Locations Mahad Mahad Hikal Limited Taloja Crop Protection Pharmaceuticals Bangalore Headquarters: Manufacturing Manufacturing Mumbai Panoli Panoli Research & Development Pune 14
Slide 15: Pharmaceuticals – Facility Overview
Pharmaceuticals – Facility Overview Location : 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 f
Slide 16: Crop Protection – Facility Overview
Crop Protection – Facility Overview Location : Taloja, Maharashtra 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 innova
Slide 17: Research & Development
Research & Development R & D Facilities at Pune & Bangalore Supports clients with early life cycle of products : Route Scouting Small scale synthesis Process Research Kilo quantities Scale up facilities New product development R&D Facility offers : Troubleshooting support Synthesis o
Slide 18: Research & Development Expertise
Research & Development Expertise R & D is based on clear focus to build Sustainable Portfolio of Products to create opportunities for our Manufacturing Facilities Research & Development Process research of APIs and intermediates involving multi-step complex synthesis Strong Track Record of devel
Slide 19: Intellectual Capital
Intellectual Capital We are creating a Sustainable Culture with the help of our team of Experienced Scientists and Specialists Human Capital - Qualification Human Capital - Department No. of Employees 1101 19
Slide 20: Research & Development Update
Research & Development Update Research Molecules in various stages of Phase II & III - Building a pipeline for future commercial supplies Investments in R&D As % to Sales 5% R&D – Benefits Accrued 350 5% R&D (Rs. mn) 4% 300 2 Provisional Patents granted in India 4% 250 3% Received 4 Process Patents
Slide 21: Pharmaceuticals
Pharmaceuticals Contract Research Custom Synthesis APIs and Intermediates Contract Manufacturing R&D, Contract & Synthesis Lab USFDA Approved Site Pune Panoli R&D, Contract, cGMP Kilo Lab USFDA Approved Site Pune Bangalore
Slide 22: Pharmaceuticals
Pharmaceuticals Custom Manufacturing projects in Pharmaceuticals – Revenue (Rs. mn) Intermediates and APIs for Multinational Companies Manufacture of Animal health products +21% 4,754 4,477 3,570 3,716 3,201 World’s largest supplier of Gabapentin, 2,759 API for Neuropathic use 1,510 Focus in the CNS
Slide 23: New Relationships
New Relationships Building long term relationships in Europe, US and Japan Large European Innovator Customer Signed Long Term Contract Manufacturing Agreement to commercially manufacture Pharmaceutical Product for Human health. Commercial production started Validation of another API completed. C
Slide 24: Crop Protection
Crop Protection Research & Development AIs and Intermediates Custom Synthesis Contract Manufacturing Hydrogenation Plant Agro Chemical Facility Mahad Taloja Agro Chemical Plant Control Room Panoli Taloja
Slide 25: Crop Protection
Crop Protection Custom Synthesis and Contract Crop Protection – Revenue (Rs. mn) manufacturing of Agrochemicals, Intermediates and Specialty Chemicals World’s largest supplier of Thiabendazole +15% 3,538 (TBZ) 2,465 2,888 2,021 1,791 1,497 1,734 On Patent Molecule Manufacturer Growth driven by Add
Slide 26: New Relationships
New Relationships Increased number of molecules under evaluations in the pipeline and several successful products in the commercialization phase European Multinational Innovator Customer Increase in volume for Fungicide produced Increase in volume for another Intermediate produced at Mahad Facil
Slide 27: . v2
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Slide 28: Growth Drivers
Growth Drivers Uniquely positioned to become an integral part of the Pharmaceutical and Crop Protection Supply Chain Blocks Built Growth Drivers Ever Growing Diversified Demand of Business Asset Creation Products Model Expansion of Product Portfolio Established Experienced Relations Management w
Slide 29: Financial Performance
() Financial Performance 29
Slide 30: Segmental Performance
Segmental Performance We expect growth in both our divisions with increased volumes from our existing products which provides sustainability to Revenues FY2014 Revenue : Rs 8,292 mn FY2014 EBIT : Rs 1,753 mn 30
Slide 31: Operational Highlights
Operational Highlights Higher EBITDA Margin on account of Higher Margin Products, Quality Conscious Customers and Efficient Operations Rs. mn Standalone Revenues Standalone EBITDA 8,292 +18% +22% 2,052 6,942 6,604 1,709 1,768 5,361 1,489 4,780 4,935 1,316 1,349 3,007 626 FY08 FY09 FY10 FY11 FY12 FY1
Slide 32: Capital Expenditure
Capital Expenditure Major Asset Creation Completed. This gives us an ability to scale-up operations rapidly by making small incremental investments Cashflow from Operations Capital Expenditure Rs mn 1,590 1,510 1,377 1,365 1,177 1,080 834 743 736 667 535 514 386 269 FY08 FY09 FY10* FY11 FY12 FY13 FY
Slide 33: Quarterly Performance
Quarterly Performance Highest ever Quarterly revenue recorded Revenue EBITDA PAT +20% -8% +8% 2,429 585 153 536 141 2,028 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 Rs. mn 33
Slide 34: Segment Contribution
Segment Contribution Revenue EBIT 2,028 2,429 507 471 58% 66% 67% 79% 42% 34% 33% 21% Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 Rs. mn Pharmaceuticals Crop Protection 34
Slide 35: Segment Performance
Segment Performance Pharmaceuticals Revenue (Rs. Mn) EBIT (Rs. Mn) EBIT Margin (%) +4% -708 bps -21% 1,347 1,404 399 30 317 23 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 Crop Protection +50% +43% -79 bps 1,025 154 16 15 681 108 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 Q2 FY14 Q2 FY15 35
Slide 36: Standalone Quarterly Profit & Loss
Standalone Quarterly Profit & Loss Rs. Million Q2FY2015 Q2FY2014 Y-o-Y Net Sales 2,429 2,028 20% Expenditure 1,893 1,443 EBITDA 536 585 -8% Margin 22.1% 28.8% Other Income 4 7 Depreciation 151 138 Finance Costs 180 241 Exchange Loss 0 18 PBT 209 195 8% Tax 57 53 Net Profit 153 141 8% Margin 6.3% 7.0
Slide 37: Standalone Half Yearly Profit & Loss
Standalone Half Yearly Profit & Loss Rs. Million H1FY2015 H1FY2014 Y-o-Y Net Sales 4,333 3,853 12% Expenditure 3,434 2,822 EBITDA 899 1,031 -13% Margin 20.7% 26.8% Other Income 12 338* Depreciation 299 272 Finance Costs 321 414 Exchange Loss 0 20 PBT 290 663 -56% Tax 81 155 Net Profit 210 507 -59% M
Slide 38: Standalone Balance Sheet
Standalone Balance Sheet Rs. mn Sept-14 Mar-14 Rs. mn Sept-14 Mar-14 Shareholder’s Fund 5,238 5,059 Non-Current assets 7,798 7,762 Share Capital 164 164 Fixed Assets 7,031 7,053 Reserves & Surplus 5,073 4,895 Long-Term Loans & Advances 737 677 Non-Current Investments 31 31 Deferred Tax Assets 0 0 No
Slide 39: Consolidated Profit & Loss
Consolidated Profit & Loss Rs. Million FY2014 FY2013 FY2012 FY2011 FY2010 Net Sales 8,292 6,604 7,078 5,023 5,390 Expenditure 6,374 4,839 5,245 3,830 3,677 EBITDA 1,918 1,766 1,833 1,193 1,713 Margin 23.1% 26.7% 25.9% 23.8% 31.8% Other Income 341* 63 14 33 2 Depreciation 550 491 453 410 358 Finance
Slide 40: Foreign Exchange Update
Foreign Exchange Update Foreign Exchange Losses on account of Options Contract behind us. Forex Risk Management Policy in Place for Future Direct Exports constitutes ~80% of the Revenue Breakup (Rs. mn) Sales and Domestic Sales includes 8,292 deemed exports 1,235 6,942 6,604 In past, majority was
Slide 41: Annual Dividend Payout
Annual Dividend Payout Dividend 22% 22% 18% 16% 9% Payout 38.87 36.60 32.90 26.94 15.36 8.00 6.00 6.00 4.50 2.50 FY10 FY11 FY12 FY13 FY14 EPS DPS Rs . Per Share Board approves Total Dividend of Rs 4.50 per share for FY2014 41
Slide 42: Shareholding
Shareholding Shareholding as on September 30, 2014 Shareholders holding > 1% as on September 30, 2014 As % of Total No. Name of the Shareholder of Shares International Finance 8.27% Corporation Reliance Mutual Fund 7.64% Danske Invest Management 2.64% Company S.A. Government Pension Fund Ltd 1.92% S
Slide 43: For further information, please contact:
For further information, please contact: 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 sham_wahalekar@hikal.com dpayal@sgapl.net / kjigar@sgapl.n
Slide 44: Hikal
HihAL JUST THE RIGHT CHEMISTRY