Neuland Laboratories Ltd. · NSE:NEULANDLAB
Neuland Laboratories — Q4 FY21 Earnings Presentation
52 slides from Neuland Laboratories's earnings presentation, May 11, 2021
Slide 1: Outcome of Board Meeting
/k NEULAND WHERE OPPORTUNITY BECOMES REALIW Neuland Laboratories Limited May11, 2021 Sanali Info Park, 'A' Block, Ground Floor, 8-2-120/1 13 RoadNo. 2, BanjaraHills To To Hyderabad - 500 034. BSELimited The National Stock Exchangeof India Ltd Telangana,India. PhirozeJeejeebhoyTowers, Exchange Plaza,
Slide 2: Independent Auditor's Report on Standalone Results
1101 /B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad Tel: +91 40 6814 2999 sooon, INDIA & Associates Chartered Accountants Independent Auditor's Report on Quarterly Standalone Financial Results and Year to Date Standalone Financial Results pursuant to
Slide 3: Independent Auditor's Report (continued)
1101 /B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad Tel: +91 40 6814 2999 sooon, INDIA & Associates Chartered Accountants generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The Board of Directors of the Compa
Slide 4: Independent Auditor's Report (continued)
1101 /B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad 5000n, INO!A Tel: +91 40 6814 2999 & Associates Chartered Accountants • Conclude on the appropriateness of the Board of Directors use of the going concern basis of accounting and, based on the audit
Slide 5: Statement of Standalone Financial Results
NEULAND Neuland Laboratories Limited .,nal lntc Park, 'A' 31ock, un.:J c.:x:ir, 1 IH Road No.,. ean)ara H lls Hyci~abaa 500 034 :clang,1na Ind,, Te· l."10 6/c:116tXl 616' 1 ·,O Ernai~ '"~•J;il1)d.c.:nc..iland'ab: or, www.r1e1,laruJlabs.com NEULANO WORATORIES LIMITED Sanall Info Park, 'A' Block, Grou
Slide 6: Notes to Standalone Financial Results
/; N EULAND NO,-ES: The financial reS\llts for the quarter and year ended 31 March 2021 have l>een reviewed by the Audit Committee ;,ind approved by the Board of O!rt!Ctors at their meeting held on 1! May 2021. 2 The finandaf results have been prepared tn accordance with the Jncflao Accounting Stand
Slide 7: Standalone Assets and Liabilities
NI UI A N D NEULAND LABORATORIES LIMITED STATEMENT OF STANDALONE ASSETS ANO LIABILITIES AS ON 31 MARCH 2021 (Amount in iakhs of!(, unless oth<;>rwlse stated) As at As at 31 .03.2021 31.03,2020 Particulars {Audited} (Audited) Assets Non-current assets Property, plant and equipment 401n.16 33,748.77 C
Slide 8: Standalone Statement of Cash Flows
NHJLAN D HEULAND LAl30RATORI ES LIMITED STANDALONE STATEMENT OF CASH fLOWS (Amount in {akhs of f, unless otherwise stated) Year Ended Particulars 31.03,2021 31 .03.2020 (Audlte<l) (Audited) Cash flow from operating actlvit1~s Profit before tax 10,496.21 5,249.58 Adjustment$: Depredation and amortisa
Slide 9: Independent Auditor's Report on Consolidated Results
1101 /B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Tel angana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 & Associates Chartered Accountants Independent Auditor's Report on Quarterly Consolidated Financial Results and Year to Date Consolidated Financial Results pursu
Slide 10: Independent Auditor's Report (continued)
1101 /B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad Tel: +91 40 6814 2999 sooon, INDIA & Associates Chartered Accountants We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in "Other Matter" par
Slide 11: Independent Auditor's Report (continued)
1101 / B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 & Associates Chartered Accountants detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collu
Slide 12: Other Matters
1101 /B, Manjeera Trinity Corporate MSKA JNTU-Hitech City Road, Kukatpally Telangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 & Associates Chartered Accountants Other Matters 1. The Statement includes the financial Statements of aforesaid two subsidiaries whose Financial Statements refle
Slide 13: Statement of Consolidated Financial Results
NEULAND Neuland Laboratories Llmit<?d n.:.11 irlo P~,,. ft: 8hck, ,,·ou/'lCJ Floor, S-2-120/'' Road No 2, llanjara Hills Hyderabad SOO O.l4 "Tela-,gana, lnd·a. "'."el: 04067611600/6/b' /00 Erndil: neuland@neula'ldlabs.com www.neuland!abs.corn NEULANO tA80RATORIES LIMITED Sanall Info Park, 'A' Bloci<
Slide 14: Notes to Consolidated Financial Results
NFULAN D NOTES: Th~• f(nancial results for the quarter and year ended 31 March 2011 have be~n review!NI by the Audit Commttt€e and awroved by the Board of Olrcctors at their meeth111 held Qll 11 Wily 2021. z The financial results have been prepared fn accordance With the Indian Accounting Standards
Slide 15: Consolidated Assets and Liabilities
l\J [UL1\ND NEULAND LABORATORIES LIMITED STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES AS ON 31 MARCH 2021 . (Amount in lal<hs off unless otherwise stated) As at As at f>articulars 31.03.2021 31.03.2020 (Audited) (Audited) Assets Non-current assets Property, plant and equipment 40, 17'.45 33,749.
Slide 16: Consolidated Statement of Cash Flows
, (, N r ULAN D NEULAND LABORATORIES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (Amount in /akhs of .f, unless otherwise stated) Year E'nded P11rtkulars 31.03.2021 31.03.2020 (Audited) (Audited) Ca~h flow from operating activities Profit before tax 10,533.35 5,292.25 Adjustments: Depreciation and
Slide 17: Neuland FY21 income at Rs.953.0 crore; up 24.3%
Neuland FY21 income at Rs.953.0 crore; up 24.3% EBITDA margins improve by 340 bps in FY21 Hyderabad, India, May 11, 2021 – Neuland Laboratories Limited (NLL) (NSE: NEULANDLAB; BSE:524558), a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and cus
Slide 18: Q4 FY21 Earnings Call; About Neuland
Q4 FY21 Earnings Call The company will conduct a one-hour Earnings call at 17:00 hrs. IST on Tuesday, May 11, 2021 where the management will discuss the Company’s performance and answer questions from participants. To participate in this conference call, please dial the numbers provided below ten mi
Slide 19: Earnings Presentation Q4 FY21
Earnings Presentation Q4 FY 21 BSE CODE : 524558 | NSE SYMBOL : NEULANDLAB | BLOOMBERG: NLL:IN | REUTERS: NEUL.NS
Slide 20: Safe Harbour
Safe Harbour 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", "
Slide 21: Table of Contents
Table of Contents Q4 & FY-21 1 HIGHLIGHTS 2 BUSINESS OVERVIEW 3 CAPABILITIES 4 FINANCIALS 5 OUTLOOK 3
Slide 22: Q4 & FY-21 Highlights
Q4 & FY-21 HIGHLIGHTS
Slide 23: Management Speak
Management Speak SUCHETH DAVULURI Vice-Chairman & Chief Executive Officer “We are pleased with the performance of the Company in this fiscal which was on the back of challenging conditions in the aftermath of the onset of COVID19. The resilience and the commitment to rise to the occasion and execute
Slide 24: Financial Highlights
Financial Highlights Q4 FY21 ❖ Total income increased by 33.9% in Q4FY21 on account of sustained growth in GDS and CMS • Prime segment continues growth led by Levetiracetam, Mirtazapine & Labetalol • Speciality business had a stable quarter led by Dorzolamide, Deferasirox, Entacapone and Donepezil •
Slide 25: Profit & Loss Snapshot (Standalone)
Profit & Loss Snapshot (Standalone) QoQ YoY YoY Particulars (Rs. Cr) Q4FY21 Q3FY21 Q4FY20 FY21 FY20 (%) (%) (%) Total Income 259.3 245.6 5.6% 193.6 33.9% 953.0 766.6 24.3% EBITDA 40.0 46.7 (14.3)% 31.8 26.0% 162.5 105.3 54.3% (100) EBITDA Margin 15.4% 19.0% 360 bps 16.4% 17.1% 13.7% 340 bps bps Prof
Slide 26: Financials (Standalone)
Financials (Standalone) Revenue (Rs. Cr) EBITDA (Rs. Cr) and EBITDA Margin (%) 17.1% 953 163 767 13.7% 19.0% 105 259 16.7% 17.1% 15.4% 242 246 206 47 34 41 40 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY20 FY21 EPS (Rs) PAT (Rs. Cr) 10.9% 8.4% 8.8% 27 6.6% 21 7.3% 80 63 21 17
Slide 27: Key Operating Metrics
Key Operating Metrics YoY Analysis Quarter on Quarter Movement 6% 3% 2% 2% 2% 8% 28% 22% 25% 31% 23% 37% 23% 22% 28% 20% 21% 18% 46% 47% 48% 47% 43% 49% FY-20 FY-21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Prime Niche/Speciality CMS Others Prime Niche/Speciality CMS Others *Q1FY21 figures adjusted for rollba
Slide 28: Business Salience (Overall Company)
Business Salience (Overall Company) PRODUCT YoY Analysis QoQ Movement 57% 59% 61% 60% 54% 55% TOP 10 TOP 5 % of Total revenue 42% 38% 39% 43% 38% 39% FY-20 FY-21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 CUSTOMER YoY Analysis QoQ Movement 54% 57% 50% 49% 46% 44% 34% 36% 36% 43% 44% 31% Q1 FY21 Q2 FY21 Q3 FY21
Slide 29: Business Salience (Prime)
Business Salience (Prime) FY-20 FY-21 Q1 Q2 Q3 Q4 46% 47% 48% FY21 47% 43% 49% FY21 FY21 FY21 TOP 10 TOP 5 PRODUCT YoY Analysis QoQ Movement (of Prime revenue) 94% 92% 94% 93% 91% 94% 74% 74% 72% 74% 74% 77% FY-20 FY-21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 CUSTOMER YoY Analysis QoQ Movement 68% 68% 64% 6
Slide 30: Business Salience (Niche/Speciality)
Business Salience (Niche/Speciality) FY-20 FY-21 Q1 Q2 Q3 Q4 23% 22% FY21 28% FY21 20% FY21 18% FY21 21% YoY Analysis QoQ Movement TOP 10 PRODUCT TOP 5 (of Niche/Speciality 89% 87% 90% 89% 83% 83% Revenue) 69% 67% 64% 61% 63% 56% FY-20 FY-21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 CUSTOMER YoY Analysis QoQ
Slide 31: Business Salience (CMS)
Business Salience (CMS) FY-20 FY-21 Q1 Q2 Q3 Q4 25% 28% FY21 22% FY21 31% FY21 37% 23% FY21 TOP 10 YoY Analysis QoQ Movement 97% TOP 5 86% 88% 84% PRODUCT 81% 82% 89% (of CMS revenue) 70% 72% 68% 65% 61% FY-20 FY-21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 CUSTOMER YoY Analysis QoQ Movement 97% 92% 94% 83% 8
Slide 32: Key Operating Metrics – CMS Revenue Split
Key Operating Metrics – CMS Revenue Split Rs. In Cr Commercial Development YoY Analysis Quarter on Quarter Movement 269 189 136 90 77 114 45 60 50 21 42 133 21 45 39 75 22 27 FY-20 FY-21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 14
Slide 33: Number of Active CMS Projects
Number of Active CMS Projects Q4 FY21 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 15 3 7 3 12 6 46 Intermediate 7 4 2 0 8 11 32 Grand Total 22 7 9 3 20 17 78 Q4 FY20 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 12 4 5 5 9 6 41 Intermediate 7 4 2 5 8 9 35 Grand
Slide 34: Well Placed for a Post-Covid World
Well Placed for a Post- Covid World ❖ Employee and operational repercussions proactively addressed ❖ Supply chain consolidation and vendor collaboration to ensure minimal disruption ❖ Investing in pharma engineering and innovation skills coupled with research technology ❖ Added contingency personnel
Slide 35: Business Overview
BUSINESS OVERVIEW
Slide 36: Our Journey – Key Milestones
Our Journey – Key Milestones Laying Strong Foundation Deepening our Capabilities Increased Sustainable Growth 1984 - 2003 2004 - 2012 2013 -Today Strategic alignment of R&D Acquisition Separate R&D business towards Facility of advanced Centre Established niche API’s & approved Intermediates 100 Mn+
Slide 37: Generic Drug Substance (GDS)
Generic Drug Substance (GDS) We started as a Prime API ..Added Speciality molecules for manufacturer… complex products.. Capability Capability ✓ 3 US FDA and EU GMP compliant ✓ High end complex chemistry capabilities manufacturing facilities ✓ Backend support by R&D department ✓ Collective capacity:
Slide 38: On path to being a preferred partner in CMS
On path to being a preferred partner in CMS.. Services ✓ Manufacturing API to customer specifications ✓ Designing and developing manufacturing processes ✓ Process optimization for competitiveness ✓ Complete CMC partner for the API ✓ Patent protection for processes Business Approach ✓ Local presence
Slide 39: Capabilities
CAPABILITIES
Slide 40: Scaled up Manufacturing Facilities over the years
Scaled up Manufacturing Facilities over the years Hyderabad Location of All Units 222.5 KL 310.2 KL 197 KL UNIT 1 UNIT 2 UNIT 3 BONTHAPALLY PASHAMYLARAM GADDAPOTHARAM Year of 1986 1994 2017 Establishment Mirtazapine, Sotalol HCL, Levetiracetam, Ciprofloxacin HCL, Key Levofloxacin, Salmeterol, Produc
Slide 41: Backed up by sound R&D capabilities
Backed up by sound R&D capabilities R&D Facility, Hyderabad Neuland’s R&D facility had been inspected by USDFA in February 2016 without any observations Infrastructure Significant R&D Achievements • 15 Development Labs with space for • Several NCE APIs added in NDA or commercial stage expansion drug
Slide 42: Regulatory Filings Across Geographies
Regulatory Filings Across Geographies 30 Filings with Health Canada 10 20 Japanese DMF filed China DMF filed 57 DMFs with USFDA 19 220 filings with 22 ROW filings including Turkey, KFDA Korea filings with TGA Mexico, Brazil etc ~495 24 EUDMF filings across Germany, CEPs Received for different 898+ F
Slide 43: Global Presence
Global Presence EUROPE NORTH AMERICA 43% APAC 36% 6% JAPAN MENA INDIA 4% 4% 4% BD Office in LATAM Princeton, New Jersey 3% Since 2004 Our BD Office in JAPAN Since 2007 % Refers to FY-21 Sales by End market 25
Slide 44: Neuland Today: Snapshot
Neuland Today: Snapshot Legacy Scale Capability Reach Expertise: Mfg. Facilities: Product/ Projects Presence 37+ years backed 3 regulatory portfolio: 100+ APIs 80+ countries by robust quality approved with 731 across therapeutic systems, regulatory KL capacity categories & compliance framework Gener
Slide 45: Financials
FINANCIALS
Slide 46: Continuous Growth…
Continuous Growth… Rs. In Cr FINANCIAL PERFORMANCE 163 HIGHLIGHTS 953 767 ▪ Revenue CAGR of 19.2% for FY 19-21 led by growth in all 3 businesses 670 105 80 ▪ EBITDA growth of 62.8% CAGR in FY 19-21 due to balanced contribution 61 from both GDS and CMS business ▪ Shift to CMS and Speciality in overal
Slide 47: Stable Balance Sheet..
Stable Balance Sheet.. Particulars Mar-19 Mar-20 Mar-21 Current Ratio (x) ROCE (%) (Rs. Cr) 1.47 Shareholders' 1.42 11.93 696 706 782 funds 1.37 7.60 3.89 Net Debt 194 214 152 2019 2020 2021 2019 2020 2021 Investments 8 8 7 Fixed Asset Turnover (x) Debt to Equity (x) 0.37 Tangible Assets 367 391 438
Slide 48: Macroeconomic factors influencing Neuland
Macroeconomic factors influencing Neuland IMPACT NEULAND RESPONSE Government regulation: ▪ Consistent regulatory audits ▪ Successfully cleared all USFDA audits since inception approvals, audits ▪ Increased scrutiny prior to drug approvals ▪ Consistent record of new drug approvals Environmental audit
Slide 49: Outlook
OUTLOOK
Slide 50: ..Laying Foundation for our Growth Strategy
..Laying Foundation for our Growth Strategy CREATE AN ORGANIZATION THAT RESULTS IN VALUE FOR ALL STAKEHOLDERS BUSINESS SCALE Extend capabilities to Invest into capacity to organically build a augment sales and sustainable GDS accelerate business and CMS business growth CHEMISTRY RELATIONSHIPS Deploy
Slide 51: Contact Us
Contact Us For over 37 Years, Neuland Laboratories Ltd. For further information contact (BSE:524558, NSE: NEULANDLAB) has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with customers in close IR Desk to 80 countries. Neuland Labs Neuland Labs has deve
Slide 52: Thank You
Thank You Confidential. © 2021 Neuland Laboratories Ltd. All rights reserved.