Hikal Limited · NSE:HIKAL
Hikal — Investor Presentation (November 2017)
42 slides from Hikal's investor presentation, November 2017
Slide 1: November 2017 Presentation
HiKAL November 2017 Presentation
Slide 2: Safe Harbor
Safe Harbor HiKA xk 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 securi
Slide 3: Company Overview
x Company Overview i KA xk 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 India
Slide 4: Hybrid Business Model
a Hybrid Business Model HrKAL 1 Pharmaceuticals * Contract & Custom Manufacturing + Generics + Human Health * Animal Health + Strong Relationships with Innovators, Mid size Pharma, Biotech * Custom Synthesis and & Generic Companies Contract Manufacturing of Agrochemicals, Intermediates, Biocides and
Slide 5: Evolution
Evolution HiKAL Crop Protection R&D Commenced _ operations —_—_— with a plant in Mahad. Established R&D center in Pune to focus on R&D and Second Plant augment pharmaceuticals commissioned in Taloja and crop protection along with Merck, USA processes : 2 Pharmaceuticals Diversified into ~ pharmaceut
Slide 6: Timeline
a Timeline i KA xk 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 Manufacturin
Slide 7: Global Regulatory Compliances
Global Regulatory Compliances
Slide 8: Regulatory Milestones
Regulatory Milestones 2004 US FDA approval of Bangalore Pharmaceutical manufacturing site 2008 Second successful US FDA Audit of Bangalore facility 2011 Bangalore clears its 3rd successful US FDA audit 2012 Panoli certified by the US FDA Panoli & Bangalore sites receive PMDA approval 2013 Panoli & B
Slide 9: Board of Directors
Board of Directors Jai Hiremath Sameer Hiremath Baba Kalyani Amit Kalyani Dr. Wolfgang Welter Chairman & MD President & Joint MD Dr. Axel Kleemann Sugandha Hiremath Prakash Mehta Kannan Unni Shivkumar Kheny
Slide 10: Management Team
Management Team Jai Hiremath Chairman & MD Sameer Hiremath President & Joint MD Anish Swadi Dr. Sudhir Nambiar Strategy Research & Technology Strategy Manoj Mehrotra Pharmaceuticals Kumar Inamdar Crop Protection Sham Wahalekar Finance HiKAL Kumaar Priyaranjan HR Hikal Limited 201
Slide 11: Scientific Advisory Board
x Scientific Advisory Board H ] K. A xk Dr. Goverdhan Mehta Prof. K Nagarajan Prof. Axel Kleemann 1 He holds a D.Sc. from the University of Marseilles, France; Ph.D. In Organic Chemistry from Pune * University - National Chemical Laboratory; and a Ph.D. from Michigan State University and Ohio ! Stat
Slide 12: Focused Strategy
Ae Focused Strategy HrKAL To be a leading reliable & high quality sustainable CDMO player globally + Aggressive growth in Pharmaceuticals , Animal Health & Crop Protection + Support NCE &Gx Molecules Serving a large range of Customers Develop own portfolio of products as next wave of Hikal growth °
Slide 13: Value Chain
Value Chain HiKAL Expertise in Custom Synthesis and Contract Research with capabilities scaling up from Gram to Kilo and Ton level of Production Lead molecule Launch identified . On patent Off patent Discovery research Pre launch growing mature Off patent Discovery Development Full scale Manufacturi
Slide 14: Contract Development & Manufacturing
as Contract Development & Manufacturing if KA xk Hikal’s Business Model is to provide Services and Support across the Value Chain Early : [PKS develop Phase | Phase II awinteln iisenyelt= development ar +4 years Extension Physical Product Development Varying degrees of pre-transfer involvement Manuf
Slide 15: Hikal - Locations
Hikal - Locations Pharmaceuticals ee Research & Development Pune HiKAL Crop Protection © Hikal Limited 2017 15
Slide 16: Manufacturing Capabilities
x Manufacturing Capabilities i KA xk Pune R&D Center in Pune becomes operational Bangalore & Panoli First new API plant commissioned at Bangalore. Multi-purpose pharma intermediate plant commissioned at Panoli Bangalore Acquired R&D and manufacturing site; enters the Pharmaceutical Business Panoli A
Slide 17: Pharmaceuticals
Pharmaceuticals H 7 K. AL Overview * Contract Development & Custom Manufacturing (CDMO) projects in Intermediates and APIs + World’s largest supplier of Gabapentin, API for Neuropathic use + Developing own Generic Portfolio + Strong Customer Relationships with Large Global Generic & Innovator Cos. R
Slide 18: Pharmaceuticals - Facility Overview
x Pharmaceuticals - Facility Overview H ] K. A zk 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 +
Slide 19: Existing Contracts
Ae Existing Contracts HrKAL European Innovator Client Track record of meeting quality requirements in Japan established Several contract manufacturing opportunities in discussion for intermediates and advanced intermediates Several products that have come through R&D have also progressed to the semi
Slide 20: Future Strategy
Future Strategy H 7 K. A xk New Relationships Existing Contracts + Added New innovator and biotech customers for early stage molecules for contract development + Start with a specific product and expand horizontally Existing + European Innovator Contracts + USA based Food Ingredient Projects in vari
Slide 21: Crop Protection
Crop Protection H fy K. A xk Overview * Custom Synthesis and Contract manufacturing of Agrochemicals, Intermediates and Specialty Chemicals + World's largest supplier of Thiabendazole (TBZ) * On Patent Molecule Manufacturer * Strong Relationships with Global Leading Agrochemical Companies + Strong J
Slide 22: Crop Protection - Facility Overview
Crop Protection - Facility Overview HiKAL Taloja, MH Products: Crop Protection Als & Intermediates Accreditations : ISO 9001, ISO 14001, OHSAS 18001 & ISO 17025 (GLP) Manufactures Fungicides, Insecticides and Intermediates The site manufactures on patent active ingredients for innovator companies Ma
Slide 23: Key Relationships
Key Relationships The product is used on grapes, potatoes, tobacco and vegetables. The wide use of this product Thiabendazole Gl=D would help the A molecule to grow over several Versatile product years used to control mold and other ati» diseases in fruits and vegetables caused due to Product fungi,
Slide 24: Future Strategy
Future Strategy Diversifying Products & Clients Several projects have been completed on development and pilot plant level Diversifying Products & Clients Clients - Japanese, European and mid- size Specialty Chemical Companies Proprietary Products Products - Advanced Intermediates to final Actives an
Slide 25: Research & Development Update
x Research & Development Update H ] K. A xk Research Molecules in various stages of Phase II & III - Building a pipeline for future commercial supplies Investments in R&D R&D - Benefits Accrued —=—As % to Sales [J R&D (Rs. mn 350 5% 5% * Developed a new API using an enzymatic process which is both c
Slide 26: Our R & D Efforts
Our R & D Efforts Crop Protection Pharmaceuticals Animal Health HiKAL Several early stage projects in pipeline majority of these are from innovator clients in Japan & Europe Completed piloting and validation of two on-patent herbicides for Japanese clients and an intermediate herbicide for an on-pat
Slide 27: R&D - Facility Overview
R&D - Facility Overview PUNE, MH a, JP HisAL ina HiKAL Provides process research of APIs and intermediates involving multi-step synthesis = Successful track record in developing non-infringing processes and scaling up from lab to kilo to commercialization Supports clients with: = Route Scouting = Co
Slide 28: Research & Development Expertise
Research & Development Expertise Facilities ensures seamless scale up from Lab to Commercialization Bangalore Manufacturing Activities R&D Pune Mahad Hikal Limited 2017 28
Slide 29: Intellectual Capital
Intellectual Capital HiKAL We are creating a Sustainable Culture with the help of our team of Experienced Scientists and Specialists Qualification Graduate 6% Others Diploma 18% 9% Th 5% PhD 2% Post Graduat 4% Engineers, 15% No. of Employees (as on 315 March’2017) : 1,319 Location Taloja Bangalore 1
Slide 30: Animal Health - A Natural Progression
Animal Health - A Natural Progression Exclusively contract manufactured for a leading US innovator company Pursuing allied niche opportunities in steroids Flexible Chemical Development Completed the kilo lab trials of a product which we expect to validate in the next financial year An alternative ec
Slide 31: Key Strengths
Key Strengths Hybrid Business Model — ee New Experienced Management Team HiKAL ~ “Ss \ Regulatory Compliances Strong Research & Development . Ay \ 1 1 ! t i 9: a i Ever Growing Product Portfolio © Hikal Limited 2017 31
Slide 32: Growth Drivers
Growth Drivers HiKAL Uniquely positioned to become an integral part of Pharmaceutical and Crop Protection Supply Chain Blocks Built "Asset Creation = Relationships = Research & Development Growth Drivers Expansion of Product Portfolio Increase in Volumes Margin Enhancement Hikal Limited 2017 32
Slide 33: Financials
Financials
Slide 34: Operational Highlights
a Operational Highlights HrKAL We expect growth in both our divisions with increased volumes from our existing products which provides sustainability to Revenues Rs. Million Standalone Revenues Standalone EBITDA 10159 1,974 1, 14965 8.719 7 y ¢ ee 2 | | | | FyO8 FYO9 FYIO FYI] FYI2 FYI3 FYI4 FYIS FY
Slide 35: Operational Highlights
a Operational Highlights HrKAL Higher EBITDA Margin on account of Higher Margin Products, Quality Conscious Customers and Efficient Operations Rs. Million Pharmaceuticals Revenue Crop Protection Revenue 2 <> y 447 ‘ 3.210 2759 | | L FYOB FYO9 FYIO FY FYI2 FYIS FYI4 FYIS FYIG FYIT FYO8 FYO9 FYIO FYI]
Slide 36: Capital Expenditure
a Capital Expenditure HrKAL Major Asset Creation gives us an ability to scale-up operations rapidly by making small incremental investments Rs. Million Cashflow from Operations Capital Expenditure |, 1.274 1 , 1, 1256 1177 1132 [ FyO8 FYO9 FYIO FYIl FYI2 FYI3) FYI4 FYIS FYI6 FYI7 FyO8 FYO9 FYIO FYI
Slide 37: Standalone Profit & Loss - Quarterly & Half Yearly
a Standalone Profit & Loss - Quarterly & Half Yearly Hi KA z Rs. Million Q2 FY18 Q2 FY17 H1 FY18 Net Sales 2,923 2,378 23% 5,590 4,638 21% Expenditure 2,385 1,906 4,556 3,730 EBITDA 538 472 14% 1,034 908 14% Margin 18.4% 19.8% 18.5% 19.6% Other Income 4 9 20 18 Depreciation 215 172 427 350 Finance C
Slide 38: Standalone Profit & Loss - Annual
Standalone Profit & Loss - Annual Rs. Million Net Sales Expenditure EBITDA Margin Other Income Depreciation Finance Costs PBT Tax Net Profit Margin FY17 10,139 6.6% FY16 9,257 HiKAL Y-o-Y 10% 9% 56% 62% © Hikal Limited 2017 38
Slide 39: Standalone Balance Sheet
a Standalone Balance Sheet i KA xk Assets (Rs. Million) Sept 17 Liabilities (Rs. Million) Sept 17 Total Non Current Assets 8,139 Shareholders Fund 6,280 Fixed Assets 7,254 . . Share Capital 164 Tangible Assets 6,427 Intangible Assets 6 Other Equity 6,116 Intangible Assets Under Development 18 Total
Slide 40: Annual Dividend Payout
Annual Dividend Payout Dividend Payout including FYIO FYIT FYIZ FYI3 FYI4* FYIS FYI6 FYI7 Mi cps MM pps The Company declared a Total Dividend of Rs. 1.2/- per share (60% of the FV); including 30% interim dividend *~- Includes exceptional income of Rs. 2.75 per share (Rs 226 mn net of tax received fr
Slide 41: Contact Us
Contact Us HIKAL Company : Hikal Limited CIN: L24200MH1988PTC048028 Mr. Sham V. Wahalekar sham_wahalekar@hikal.com www.hikal.com HiKAL SG A Strategic Growth Advisors Investor Relations Advisors : Strategic Growth Advisors Pvt. Ltd. CIN: U74140MH2010PTC204285 Ms. Payal Dave / Mr. Jigar Kavaiya +91-98
Slide 42: HMiKAL
HMiKAL