Granules India Limited · NSE:GRANULES
Granules India — Investor Presentation (December 2019)
34 slides from Granules India's investor presentation, Dec 2, 2019
Slide 1: Cover letter to stock exchanges
.GRANULES REGISTERED OFFICE GRANULES LTD., 2nd Floor, 3rd Block, My Home Hub, INDIA Madhapur, Hyderabad 500 081, Telangana, INDIA. - Tel: +9140 30660000, Fax: +9140 23115145, mail@granulesindia.com,www.granulesindia.com CIN:L24110TG1991PLC012471 Dated December 2, 2019 To, National Stock Exchange of
Slide 2: Granules India Limited Investor Presentation December 2019
Granules India Limited Unlocking potential Unleashing value Investor Presentation December 2019
Slide 3: Safe harbor
Safe harbor The Presentation is to provide the general background information about the Company’s activities as at the date of the Presentation. The information contained herein is for general information purposes only and based on estimates and should not be considered as a recommendation that any
Slide 4: Agenda
Agenda Our Company Levers for Growth Innovative Manufacturing for Scale Robust Financials; goals Key Investment Highlights Granules India Ltd 3
Slide 5: Agenda
Agenda Our Company Levers for Growth Innovative Manufacturing for Scale Robust Financials; goals Key Investment Highlights Granules India Ltd 4
Slide 6: Fast growing, integrated pharmaceutical giant
Fast growing, integrated pharmaceutical giant Core US Multi APIs/ Business Generics Oncology ✓ Focus on volume based products ✓ Fully integrated ✓ Auxiliary growth engine such as Paracetamol, infrastructure including Metformin HCl, Ibuprofen, R&D, manufacturing and ✓ Multi-product and multi- Guaifen
Slide 7: Granules at a glance
Granules at a glance Building Blocks Installed Capacity Regulatory Approvals Business Divisions Global Reach Large scale of operations 36,560 TPA of API USFDA, EDQM, EU GMP, Core business 60+ countries COFEPRIS, WHO GMP, Operational efficiencies 290 KL capacity of API US generics 250+ customers TGA,
Slide 8: What makes Granules unique?
What makes Granules unique? Sustainable base of first line of 01 defense products; limited competition with respect to integration- presence across both Rx and OTC Presence across the value chain: APIs, PFIs and FDs which builds in efficiencies at multiple levels and ensures security of supply 02 St
Slide 9: Our Vision
Our Vision To be the global leader in pharmaceutical manufacturing by process innovation and unparalleled efficiencies Granules India Ltd 8
Slide 10: Our Evolution
Our Evolution Expanding into complex generics + Global footprint Established Formative years with focus on APIs Strengthening market penetration in dominance in Core APIs, PFIs & FDs regulated markets 1984 1987 1990 1995 2000 2002 2003 2005 2006 2010 2011 2013 2014 2015 2016 2017 2018 2019 Opened fi
Slide 11: A vertically-integrated, fast-growing pharmaceutical company
A vertically-integrated, fast-growing pharmaceutical company APIs PFIs FDs Sales & Marketing Inhouse Active World’s largest Pre- Multiple Finished Dosage B2B: Work with strategic partners who sell Pharmaceutical Ingredients formulation Ingredients (FDs) forms comprising the finished dosages to end c
Slide 12: Our Global footprint; with presence over 50 countries
Our Global footprint; with presence over 50 countries Granules Europe Ltd Granules USA Inc 100% 100% subsidiary for subsidiary for EUROPE front-end front-end marketing in USA marketing in Europe the US Granules Pharmaceuticals Inc 100% subsidiary focused on advanced formulation development , with ma
Slide 13: Core management team
Core management team C Krishna Prasad Mr Prasad’s journey as pharma entrepreneur began in 1984, when he set up a paracetamol API manufacturing facility that focused on capital and process efficiency. Pharmaceutical formulations intermediates (PFIs) as a cost efficient product for global Chairman and
Slide 14: Agenda
Agenda Our Company Levers for Growth Innovative Manufacturing for Scale Robust Financials; goals Key Investment Highlights Granules India Ltd 13
Slide 15: Core Business
Core Business An Overview Growth Drivers ❑ Presence across the entire pharmaceutical manufacturing value chain from API to finished dosages Expanded to 7 molecules: Fexofenadine & Cetirizine 1 added to the existing core portfolio in FY20 ❑ Large-scale manufacturing enables not only to sustain compet
Slide 16: Economies of scale driving profitability
Economies of scale driving profitability Empowering business sustainability through….. Volume play with large On-time In full (OTIF), Progressively invested Leverage economies of batches results in reduction in resting in expanding capacities scale lower testing costs & costs and quality lower batch
Slide 17: US Generics: Granules Pharmaceuticals Inc.
US Generics: Granules Pharmaceuticals Inc. Gained traction with a first to generic product; ❑ Fully integrated infrastructure from R&D, manufacturing 1 Methergine in June 2014. Set up a front ends sales and marketing division and launched 5 products under to sales and marketing enabling “Make in Ame
Slide 18: US Generics: GUSA
US Generics: GUSA ❑ B2B: Marketing & Distribution arm for API’s, PFIs and FDs (Rx & OTC) from GIL ❑ B2C: Granules Consumer Health; our front end division for private label OTC products ❑ Incorporated in 2003 to set up a sales and marketing arm for real time communication with customers ❑ Set up to m
Slide 19: Multi APIs/Oncology
Multi APIs/Oncology ❑ Two Multi-product and multi-stage manufacturing facilities in Vizag Multi-product API and oncology manufacturing facility; ❑ Facility 1: Directly relates to our core 1 integrated API-to-FD facility for oncology business with ~15 APIs, fully commercialized and profitable Infrast
Slide 20: Financials goals to unlock value
Financials goals to unlock value (₹ Mn) Focus on reduction of debt, target ROCE target of 20%+, Free cash flow 1 1x net debt to EBITDA by FY22 2 generation Net Debt & Net debt-to-EBITDA (x) ROCE (%) FCF 8,704 9,082 3.1x 8,265 956 6,138 2.4x 2.1x 26.2% 21.7% FY17 FY18 FY19 YTD 1.6x 18.2% -1,602 15.8%
Slide 21: Joint Venture Divestments
Joint Venture Divestments Granules Omnichem Granules Biocause Investment sold to JV partner Agreement to sell investment for INR 1,098.5 mn to JV partner ❑ Entered in 2012 ❑ Entered in 2007 ❑ INR 500 mn: Book value of ❑ INR 1436.5 mn: Book value of investment as on 30 June 2019 investment as on 30 J
Slide 22: Agenda
Agenda Our Company Levers for Growth Innovative Manufacturing for Scale Robust Financials; goals Key Investment Highlights Granules India Ltd 21
Slide 23: Strong Technical Capabilities and Infrastructure
Strong Technical Capabilities and Infrastructure Value chain Facility location Installed capacity Approvals Bonthapally 34,560 TPA U.S. FDA, EDQM, WHO, COFEPRIS, INFARMED API Jeedimetla 4,800 TPA U.S. FDA, EDQM, COFEPRIS, WHO, CDCSO Vizag 290 KL U.S. FDA, KFDA, EU GMP, WHO GMP, EDQM Gagillapur 23,20
Slide 24: Manufacturing excellence driven by innovation and state-of-the-art facilities
Manufacturing excellence driven by innovation and state-of-the-art facilities ❑ Offering end-to-end product development solutions with unique analytical methods ❑ R&D equipment, which are geometrically scaled down for trouble-free scale-up of commercialization, as per the 10x principle ❑ Dossier dev
Slide 25: With our continued commitment towards R&D
With our continued commitment towards R&D We invest in R&D to develop products that create intellectual wealth and commercialize cost-effective, quality products in diversified therapeutic areas Patent Highlights No. of R&D employees - GIL No of Country Patents 207 India 55 184 163 PCT 12 149 131 Un
Slide 26: Agenda
Agenda Our Company Levers for Growth Innovative Manufacturing for Scale Robust Financials; goals Key Investment Highlights Granules India Ltd 25
Slide 27: Building on solid base; unlocking value underway
Building on solid base; unlocking value underway (₹ Mn) EBITDA and EBITDA Margins Revenue: 3Y CAGR 18.3% 22,792 21.4% 20.5% 20.3% 17.8% 16,918 17.0% 14,353 Revenue 13,829 12,948 4,107 3,088 2,893 2,815 2,622 2016 2017 2018 2019 H1FY20 2016 2017 2018 2019 H1FY20 10.3% 13.7% ~20% 3-year CAGR in revenu
Slide 28: Increasing contribution from higher-margin FDs, generics
Increasing contribution from higher-margin FDs, generics, while remaining backward integrated in APIs (₹ Mn) Higher revenue contribution coming from regulated market, which contributed 49% to total revenue 11,113 6,750 6,612 6,010 5,393 4,573 4,029 4,083 3,550 3,367 2,700 3090 2,650 2921 1,977 1,972
Slide 29: Growth led by high-volume molecules
Growth led by high-volume molecules (₹ Mn) 4,311 18,914 2,233 11,928 442 Total Addition FY17 Addition FY18 Addition FY19 Total Contribution FY16 Contribution FY19 High-volume based molecule business contribution 2,724 Revenue contribution from 11,138 8,414 core molecules Total Contribution Addition
Slide 30: Completed capex cycle to unleash value
Completed capex cycle to unleash value (₹ Mn) Capex Funding details 2,733 14,729 2,160 Funded through ₹ Mn 1,607 8,230 QIP 3,000 ECB 5,500 Warrants (Promoters’ Pledge) 2,000 Total gross Change in Change in Change in Total gross block FY16 gross block gross block gross block block FY19 Internal Accru
Slide 31: Improving returns; focus on FCF generation
Improving returns; focus on FCF generation (₹ Mn) Net Debt & Net debt-to-EBITDA (x) Cash-to-Cash cycle (days) FCF 8,704 9,082 117 119 8,265 110 956 6,138 106 3.1x 2.4x Mar'17 Mar'18 Mar'19 Sep'19 2.1x 1.6x -1,602 -382 Mar'17 Mar'18 Mar'19 Sep'19 -4,920 Mar'17 Mar'18 Mar'19 Sep'19 ROCE (%) ROE (%) Ne
Slide 32: Agenda
Agenda Our Company Levers for Growth Innovative Manufacturing for Scale Robust Financials; goals Key Investment Highlights Granules India Ltd 31
Slide 33: Key Investment Highlights
Key Investment Highlights Commercialization of Multi API/ Oncology block in Vizag Shift towards high margin Completed Capex; EBITDA business; in next 2-3 years improvement due to ~75% of revenues likely higher capacity utilization from FDs Balance Sheet strengthening continues Scale up of US generic
Slide 34: Thank you
Thank you Granules India Ltd Floor 2 Block 3 My Home Hub Madhapur Hyderabad 500081 CIN: L24110TG1991PLC012471 Voice: +91 40 30660000/30663600 Fax: +91 40 23115145/30663602 www.granulesindia.com | Sandip.Neogi@granulesindia.com, Richa10.Singh@in.ey.com 532482 GRANULES GRAN:IN GRAN:NS
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