Cohance Lifesciences Ltd · NSE:COHANCE
Cohance Lifesciences — Suven Pharmaceuticals — Q2 FY24 Earnings Presentation
35 slides from Cohance Lifesciences's earnings presentation, November 2023
Slide 1: Suven Pharmaceuticals Ltd. Investors Presentation November 2023
Suven Pharmaceuticals Ltd. …Towards a Brighter Tomorrow Investors Presentation November 2023
Slide 2: Risk Statement
Except for historical information, all of the statements, expectations and assumptions, including expectations and assumptions, contained in this presentation may be forward-looking statements that involve a number of risks and uncertainties. Although Suven attempts to be accurate in making these fo
Slide 3: Why Suven is uniquely positioned to win
Why Suven is uniquely positioned to win ⚫ Global Pharma CDMO is ~$135B+ market (with ~7% CAGR) of which small molecule outsourced APIs & Intermediates is ~$70B. Majority of new molecule approvals are small molecules. o CDMO is more defensible sub-segment given sticky client base; has seen secular gr
Slide 4: Customer feedback has been positive. Confident to ride out near term macro challenges
Team firmly in the saddle, transition smooth and Customer feedback has been positive. Confident to ride out near terms macro challenges ⚫ In the first 45 days, transition to the new management is completed smoothly and we feel good about the progress o We have augmented the senior leadership with pr
Slide 5: Key Priorities For Next 6 Months
Key Priorities For Next 6 Months Deepen and leverage existing customer relationships 1 Action the feedback post the recent face-to-face meetings and deliver on the RFQs; emerge as ‘Partner of Choice’ for our key customers Evaluate New Product Opportunities in Clinical and Commercial Phase Build out
Slide 6: Table of Contents
Table of Contents Pharma CDMO Sector 07 Overview Specialty Chem CDMO Sector 12 Overview Business Overview 14 New Leadership Team 23 Q2 and H1 FY24 operating and 27 financial performance Pg. 6
Slide 7: Pharma CDMO Sector Overview
Pharma CDMO Sector Overview
Slide 8: A $70 Bn+ is the addressable market
Small Molecule CDMO A $70 Bn+ is the addressable market Estimated Market Sizes (in $ Bn) 102 Captive API Outsourced 51 Intermediate 70 On-Patent 147 19 35 Total 51+19 = 70 51 35 Outsourced API Addressable Market Off-Patent Total Spend on Small Molecule CMC Pg. 8 Source: Industry Research
Slide 9: Global CDMO Industry: Small Molecule CDMO Expected Growth of ~7% driven by Macro Tailwinds
Global CDMO Industry: Small Molecule CDMO Expected Growth of ~7% driven by Macro Tailwinds A Small Molecule Pipeline continues to grow B Small Molecule Approvals remain despite growth in Biologics the majority Clinical Phase Pipeline (Phase-1 to Pre-Registration) US FDA New Molecule Approvals Trend
Slide 10: Increased Outsourcing to Asia: India expected to be the biggest beneficiary
Small Molecule CDMO Increased Outsourcing to Asia : India expected to be the biggest beneficiary Both India and China are expected to CAGR (E): increase share of Addressable Market CY22-27 Shift of Outsourcing to Asia (Development + Commercial mfg) ~7% Margin pressures driven by increased manufactur
Slide 11: Key Takeaways from CPHI (Oct'23, Barcelona) and Customer Meetings (Nov'23, US/EU)
Key Takeaways from CPHI (Oct’23, Barcelona) and Customer Meetings (Nov’23, US/EU) SUVEN RELIABLE PARTNER OPEN TO EXPANSION NEW MOLECULE FOCUS Suven acknowledged as a Several key customers have COVID had led to slow-down reliable supply partner with expressed interest in on new development which is s
Slide 12: Specialty Chem CDMO Sector Overview
Specialty Chem CDMO Sector Overview
Slide 13: Agrochemical Industry is going through macro-headwinds; has come back strongly in the past
Specialty Chemicals Market Overview Agrochemical Industry is going through macro-headwinds; has come back strongly in the past INVENTORY DESTOCKING Destocking at a large-scale due to inventory pile-up with customers Stocking Levels in customer channel inventory expected to return to normalcy over ne
Slide 14: Business Overview
Business Overview
Slide 15: Suven Pharma: India's Leading Innovator Focused CDMO Company
Suven Pharma: India’s Leading Innovator Focused CDMO Company STRONG FINANCIAL TRACK-RECORD OVER 20+ YEARS DEEP CUSTOMER RELATIONSHIPS WITH MARQUEE BIG PHARMA EXTENSIVE DEPTH AND WIDTH OF CHEMISTRY CAPABILITIES MULTIPLE ENGINES OF GROWTH Pg. 15
Slide 16: Historically consistent Growth
Historically consistent Growth Consistently scaled and grown business in the 16-20% range across multiple 5 year periods Established Track-Record of Consistent Growth 16% 14000 12000 10000 Revenue (INR Mn) 19% 8000 6000 4000 16% 21% 2000 0 FY03 FY08 FY08 FY13 FY23 FY18 FY13 FY18 Source: Internal Pg.
Slide 17: Marquee long tenured Customer Base
Marquee long tenured Customer Base 15+ 20+ >90% Our top 10 pharma Specialty Chemical Revenues from Pharma customers customers average and Spec Chem Large average tenure tenure Cap customers 100+ 75%+ 13 Active Phase 1- Projects with Active commercial 3 projects global innovators projects where Suven
Slide 18: We have built extensive Depth and Width of Chemistry Capabilities
We have built extensive Depth and Width of Chemistry Capabilities 34 400+ 880+ Future Years Experience Scientists Projects Executed Evaluating new tech • Alkylations • Asymmetric synthesis • Metallation– MeLi / n n-BuLi / • Acylation • Carbohydrates LDA/HMDS • Seeking customer • Amidation • Grignard
Slide 19: Multiple Engines of Growth Across Business Verticals
Multiple Engines of Growth Across Business Verticals H1 FY24 - Consolidated Pharma CDMO Specialty Chemicals Formulations And Others 64% 21% 9% • Core Business Vertical • 25+ Years of Relationship with an Agro • Strong Relationship with Rising Major Pharma • Long Term Relationship with Big Pharma • 3
Slide 20: We aim to rapidly scale Suven Pharma into a globally respected CDMO player
We aim to rapidly scale Suven Pharma into a globally respected CDMO player backed by our strategic pillars Scaling work Develop select Nurture world Add new Optimise with existing new customers class talent technologies Operations customers • Continue on our Deepen and leverage Winning business Inve
Slide 21: M&A will be a key driver for Value creation
M&A will be a key driver for Value creation Focus Priorities for M&A CDMO TECHNOLOGY SPECIALTY CHEMICALS PLATFORMS CDMOs with strong presence in CDMOs focused on unique Specialty Chemicals with technology capabilities (eg: complementary customer base Oligonucleotides, HPAPIs) and products MULTI-SPEC
Slide 22: We will set ESG goals to ensure long term sustainability of business
We will set ESG goals to ensure long term sustainability of business Illustrative parameters Wastewater recycling Renewable energy usage Specific goals with timelines will be set in coming months Fresh water consumption reduction 22 GHG emission reduction Pg. 22
Slide 23: New Leadership Team
New Leadership Team …to drive next phase of growth journey Executive leadership with global techno-commercial expertise to Accelerate Growth
Slide 24: Our new Board of Directors with deep and diverse experience
Our new Board of Directors with deep and diverse experience Annaswamy V. Prasada Raju, Pankaj Patwari Shweta Vaidheesh PhD Jalan Executive Managing Non-Executive Non-Executive Chairperson Director Director Director • 35+ years of diverse experience in • Served as Executive Director at • Managing Dir
Slide 25: Augmented our Executive Leadership Team with key leaders from the Industry
Augmented our Executive Leadership Team with key leaders from the Industry Dr. Sudhir Kumar Singh Mr. Gaurav Bahadur Mr. Raju Komaravolu Mr. Brian Shaughnessy Chief Executive Officer Chief Human Resource Officer Chief Strategy Officer Chief Commercial Officer • Previously worked with • Previously wo
Slide 26: Advisory Council: Industry Leaders with Rich Global Experience
Advisory Council: Industry Leaders with Rich Global Experience Mr. Venkateswarlu Jasti Mr. Abhijit Mukherjee Mr. James C Mullen Mr. Stefan Stoffel Chairman, Advisory Council Advisor Advisor Advisor • 33+ years work ex • 35+ years work-ex • 40+ years work-ex • Recognized CDMO leader with 40+ years' e
Slide 27: Q2 and H1 FY24 Operating and Financial Performance
Q2 and H1 FY24 Operating and Financial Performance
Slide 28: H1 FY24 Performance & Outlook for H2FY24 & Mid-term
H1 FY24 Performance & Outlook for H2FY24 & Mid-term ⚫ H1 Performance: 3.6% Ebitda growth; despite revenue softness o Operational revenues at Rs 579 cr down 6% (YoY), o EBITDA margins at 47% of rev, grew 3.6% (YoY) o Adjusted PAT at Rs 200 cr up 11% (YoY) o Pharma CDMO ex Covid grew 38% ⚫ FY24 H2 Out
Slide 29: EBITDA growth of ~4% YoY in H1 FY24; Stable Margins Despite Softness in Revenue
EBITDA growth of ~4% YoY in H1 FY24; Stable Margins Despite Softness in Revenue; Pharma CDMO seeing good growth, Spec Chem impacted by destocking Consolidated Financials Operational Revenue (INR Mn) Adjusted EBITDA (INR Mn) Margin (%) Adjusted PAT (INR Mn) Margin (%) 6,172 5,786 35% 47% 42% 29% 11.4
Slide 30: 3.6% EBITDA Growth in H1; Stable Margins Despite Softness in Revenue
3.6% EBITDA Growth in H1; Stable Margins Despite Softness in Revenue INR million CAGR Consolidated P&L Snapshot FY20 FY21 FY22 FY23 Q2FY23 Q2FY24 H1FY23 H1FY24 FY20-23 Q2 YoY H1 YoY Revenue 8,338 10,097 13,202 13,403 2,784 2,311 6,172 5,786 17.1% -17.0% -6.3% COGS (2,292) (3,019) (3,991) (4,091) (86
Slide 31: Strong Balance Sheet with Steady Cash Generation
Strong Balance Sheet with Steady Cash Generation INR million Consolidated Balance Sheet Snapshot Mar-20 Mar-21 Mar-22 Mar-23 Sep-22 Sep-23 Property, plant and equipment (PPE) 3,531 4,371 5,306 5,842 5,910 5,717 Right of use asset (RoU) 2 9 17 14 169 169 172 Capital work-in-progress 1,016 961 300 1,6
Slide 32: Consistently Healthy Financial and Return Metrics
Consistently Healthy Financial and Return Metrics 2 2 Key Ratios FY20 FY21 FY22 FY23 H1FY23 H1FY24 Basis Net Working Capital (as days of sales) 97 80 114 98 102 115 Core NWC / Revenue * 365 PPE (as % of sales) 42.3% 43.3% 40.2% 43.6% 47.9% 49.4% Closing PPE / Revenue Capex spend during the year (INR
Slide 33: Contact Information
Contact Information Cyndrella Carvalho, Head - Investor Relations, Suven Pharmaceutical Ltd Tel: +91 9823615656 Email: cyndrella.carvalho@suvenpharm.com Gavin Desa / Rishab Barar CDR - India Tel: +91 98206 37649/ +91 77770 35061 Email: gavin@cdr-india.com / rishab@cdr-india.com Pg. 33
Slide 34: Appendix - Adequate Capacity to serve current and future demand
Appendix - Adequate Capacity to serve current and future demand Pashamylaram, Suryapet, Jeedimetla, Banjara Hills, Vizag, Andhra Telangana, India Telangana, India Telangana, India Hyderabad, India Pradesh, India API & Formulation Facility Intermediate Mfg. Facility R&D–Pilot Plant Corporate Office o
Slide 35: Thank You
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Suven Pharmaceuticals — Q2 FY24 Earnings Presentation on 6ix