Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA

Sun Pharmaceutical Industries — Investor Presentation (June 2015)

55 slides from Sun Pharmaceutical Industries's investor presentation, June 2015

  1. Slide 1: Creating Lasting Value

    Creating Lasting Value Investor Presentation - June 2015 NSE:SUNPHARMA | BSE:524715 | Bloomberg:SUNP IN | Reuters:SUN.BO WWW.SUNPHARMA.COM

  2. Slide 2: Disclaimer

    Disclaimer 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”, “pl

  3. Slide 3: Contents

    Contents 1 Sun Pharma at a glance 2 Long-term Strategy 3 Global Specialty Initiatives 4 Revenue Composition, History & Acquisition Track Record 5 Business Operations, R&D, Manufacturing 6 Corporate Governance 7 Financials – P&L, Balance Sheet, Cash Flows & Ratios 8 Key Milestones Targeted © Sun Phar

  4. Slide 4: Sun Pharma at a glance

    Sun Pharma at a glance 5th Largest Global Specialty Generic Company US • Ranked 5th in US / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India Emerging Markets • Largest Indian Pharma Company in Emerging Markets Europe • Expanding presence in Europe Manufacturing Footprint • 4

  5. Slide 5: World's 5th Largest Specialty Generic Pharma Co

    World’s 5th Largest Specialty Generic Pharma Co 2014 Worldwide Generic Sales (US$ in billions) Teva 9.8 Sandoz 8.5 Actavis 6.4 Mylan 6.4 Sun + Ranbaxy Sun - 3.0 Ranbaxy - 2.1 5.1 Aspen 3.0 Hospira 2.6 Fresenius 2.4 Sanofi 2.3 Ranbaxy 2.1 Lupin 2.0 Dr Reddy's 1.8 Cipla 1.7 STADA 1.6 Source: Evaluate

  6. Slide 6: Sun Pharma today

    Sun Pharma today US Formulations India Branded Generics  5th largest generics company in US with one of the  No.1 ranked with 12 classes of doctor categories largest ANDAs pipeline (159 ANDAs awaiting approval)  Leading position in high growth chronic therapies  Presence in generics, Specialty a

  7. Slide 7: Driving Long Term Growth

    Driving Long Term Growth • Vertically integrated operations • Enhance share of specialty business globally • Optimize operational costs • Achieve differentiation by focusing on technically complex products • Focus on key markets – achieve critical mass • Speed to market • Ensure sustained compliance

  8. Slide 8: Our Specialty Initiatives

    Our Specialty Initiatives • In-licensed MK-3222 (a monoclonal antibody undergoing Phase-III trials targeting IL-23) from MSD for treating chronic plaque psoriasis Ramping up • Entered into a joint venture with Intrexon Corporation for developing gene-based Specialty therapies for ocular diseases Pip

  9. Slide 9: Highly Diversified Revenue Base

    Highly Diversified Revenue Base Sun Pharma (Pre Ranbaxy Acquisition) Sun Pharma (Post Ranbaxy Acquisition) API & Others Emerging 5% India Branded Markets Western 5 year CAGR: 11% Formulations 14% Europe & Rest of 23% Other World## 5 year CAGR: 14% Markets # India Branded 12% 8% 5 year CAGR: 38% Form

  10. Slide 10: Impressive Track Record of Growth

    Impressive Track Record of Growth (All Figures in INR Billion) 272.8 79.2 47.8 Adjusted Net Sales EBITDA 13.1 Net Profit 39.3 CAGR 13.6 CAGR CAGR 4.2 4.0 4.4 11.9 32% 1.1 33% 0.8 31% FY00 FY05 FY10 FY15 FY00 FY05 FY10 FY15 FY00 FY05 FY10 FY15 39.6 30.5 19.9 21.6 15.5 Operating Free Cash Adjusted Cas

  11. Slide 11: Consistent profitability and returns

    Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin 83% 44% 45% 35% 82% 41% 32% 32% 80% 32% 75% 34% 74% 29% 18% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 ROCE ROE Market Cap (USD Bn) 27% 28% 31% 35 24% 26% 20% 24% 18% 21% 20% 20 16 12 10 FY11

  12. Slide 12: Sustained Profitability Vs. Peers

    Sustained Profitability Vs. Peers Superior business model Margins consistently higher than peers# Gross Margin EBITDA Margin Net Margin 83% 82% 80% 44% 45% 35% 75% 34% 33% 75% 32% 32% 41% 73% 34% 34% 18% 29% 14% 14% 63% 12% 13% 62% 62% 9% 61% 60% 7% 59% 22% 20% 20% 19% 19% 17% FY10 FY11 FY12 FY13 FY

  13. Slide 13: Creating Value, Continuously…

    Creating Value, Continuously… Began with 5 Acquired URL Acquired Ranbaxy IPO - Rs. 550 Mn Acquired Taro Acquired Dusa products Pharma raised Year 1983 1993 1994 1997 2010 2011 2012 2013 2014 2015 Market Cap (US$ Bn) as 0.1 0.1 7.8 10.1 12.3 15.6 19.7 34.6 of Mar, 31 of respective years First Researc

  14. Slide 14: Key Deals & Rationale

    Key Deals & Rationale Year Deals Country Rationale Distribution agreement with Distribution services agreement in India for brand “Axcer”® (brand of 2015 India AstraZeneca ticagrelor, used for the treatment of acute coronary syndrome) 5th largest Global Specialty Generic Pharma Company, No.1 Pharma

  15. Slide 15: Successful track record of turning around acquisitions

    Successful track record of turning around acquisitions ROCE 27% 26% 23% 35% 41% 19% 22% 30% 20% 27% 18% 300 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 250 Assets of: Taro Dusa 200 Bryan URL Hungary Ranbaxy Able Labs 150 Chattem 100 50 - FY04 FY15* FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01

  16. Slide 16: US Business

    US Business 50% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16

  17. Slide 17: US Business at a glance

    US Business at a glance 5th Largest Pharma Company in the US Generics Market • Largest generic dermatology company and 3rd largest branded Dermatology Segment dermatology company in the US • Wide basket of 597 ANDAs filed & 438 approved ANDAs across Comprehensive Portfolio multiple therapies • 159 A

  18. Slide 18: US Business - Significant Ramp-up in Sales

    US Business - Significant Ramp-up in Sales Sales in Rs billion 137 Key Milestones in US • Entry in US through Caraco FY98 acquisition 98 FY98-FY10 • Ramp-up in US business • Launched many complex FY08 onwards generics & few FTFs 62 • Acquired Taro Pharma – Entry FY10 into dermatology market 35 • Acq

  19. Slide 19: ANDA Pipeline - Significant ramp up

    ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 438 ANDA Approvals by Therapeutic Area 597 103 98 478 449 438 397 377 344 61 311 250 225 39 207 177 34 30 27 20 69 84 13 13 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Antibiotic Gastro Pain CNS Skin Allergy CVS Other Metabolism Oncology Cumulative

  20. Slide 20: India Branded Generic Business

    India Branded Generic Business 24% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 20

  21. Slide 21: India Business at a glance

    India Business at a glance No. 1 in India • No. 1 ranked with 8.9% market share Market Position** • Growth of 12% versus average industry growth of 13% Prescription Ranking## • No. 1 ranked by prescriptions with 12 different classes of doctors Chronic Segment • Market leader in the chronic segment A

  22. Slide 22: Largest Pharma Company in India

    Largest Pharma Company in India (Market Share) Last 12 Months of Branded Generic Sales in India as of March 2015 (US$ in mn) Sun Pharma+Ranbaxy - 8.9% 1,259 Abbott - 6.2% 880 Sun Pharma - 5.5% 768 Cipla - 5.0% 710 Zydus Cadila - 4.2% 596 Mankind - 3.6% 510 Alkem + Cachet + Indchemie -3.6% 504 Glaxo

  23. Slide 23: India Business – Sales ramp-up

    India Business – Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 30 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up 67 Others, 7% Neuro-Psychiatry, Opthalmology, 18% 3% Respiratory, 4% Dermatology, 4% Gynaecology, 4% 37 Vitamins /

  24. Slide 24: Strong Customer Focus Drives Market Share Gains

    Strong Customer Focus Drives Market Share Gains Therapy focused marketing Strong increase in market share • 9,000+ sales representatives • Sun pharma market share has consistently increased from 2.1% in • Covering over 600,000* doctors 2000 to 4.8% in 2014 • Including Ranbaxy, current market 8.3% sh

  25. Slide 25: Leadership in key therapeutic areas

    Leadership in key therapeutic areas* Number 1 Ranking with 12 Doctor Categories* Ranking (Sun Pharma) Ranking (Sun + Ranbaxy) Specialist Oct ‘14 Specialist Feb ‘15 Psychiatrists 1 Psychiatrists 1 Neurologists 1 Neurologists 1 Cardiologists 1 Cardiologists 1 Orthopaedic 1 Orthopaedic 1 Ophthalmologis

  26. Slide 26: Best-in-class field force productivity

    Best-in-class field force productivity Sales Per Representative (Rs. Mn) Field Force Productivity FY10 – FY14 numbers exclude Ranbaxy * FY15 numbers include the impact of Ranbaxy merger Sun 11.1 11.0 • Rs 7.5 Mn/ MR Pharma 10.1 9.2 Industry • Rs 5.5 Mn/ MR Average* 7.5* 7.1 * Based on brokerage repo

  27. Slide 27: Emerging Markets

    Emerging Markets 14% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 27

  28. Slide 28: Emerging Markets Business at a glance

    Emerging Markets Business at a glance Largest Indian Company in Emerging Markets Global footprint • Presence in over 50 markets • Brazil, Mexico, Russia, Romania, South Africa and complementary Focus Markets & affiliated markets Product Portfolio • Extensive basket of branded products Customer Focus

  29. Slide 29: Western Europe, Canada, ANZ & Other Markets

    Western Europe, Canada, ANZ & Other Markets 8% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29

  30. Slide 30: Western Europe & Other Markets at a glance

    Western Europe & Other Markets at a glance Amongst the leading Indian Companies • Across all major markets in Western Europe, Canada, A&NZ and Market Presence few other markets • Expanding basket of products including injectables and hospital Product Portfolio products as well as products for retail

  31. Slide 31: Global Consumer Healthcare Business

    Global Consumer Healthcare Business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 31

  32. Slide 32: Global Consumer Healthcare Business at a glance

    Global Consumer Healthcare Business at a glance An Attractive Opportunity India • Amongst the top 10 consumer healthcare companies Global Presence • Operates in about 20 countries • 5 core markets viz., India, Russia, Romania, Nigeria and Myanmar Market Focus • 4 growth markets viz., Ukraine, Poland

  33. Slide 33: Active Pharmaceutical Ingredients (API) Business

    Active Pharmaceutical Ingredients (API) Business 4% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33

  34. Slide 34: API Business

    API Business Backward Integration – Strategic Importance • Backward integration provides cost competitiveness and supply Strategic Importance reliability Customers • Large generic and innovator companies Product Portfolio • Approximately 300 APIs Pipeline Development • More than 25 APIs scaled up an

  35. Slide 35: Research & Development

    Research & Development © Sun Pharmaceutical Industries Limited. All Rights Reserved. 35

  36. Slide 36: Research & Development

    Research & Development Cumulative R&D Spend of Rs 64 billion to date • R&D spend at 7.2% of Net Sales for FY15* R&D Spend • Strong cash flows & large scale to support R&D investments • Strong research teams in generics, finished dosage development, Capabilities biological support, chemistry • 1,800

  37. Slide 37: R&D Investments

    R&D Investments R&D Expenditure Filings and Approvals 7.8% 6.2% 5.8% 5.6% 6.3% 6.5% 7.2% ANDA DMF/CEP Patents 597 396 1598 19.6 438 270 951 10.4 7.0 4.4 3.3 3.3 2.5 FY09 FY10 FY11 FY12 FY13 FY14 FY15* Filed Approved Filed Approved Filed Granted R&D Expenses (Rs Bn) R&D Exp (% of Net Sales) FY09 – FY

  38. Slide 38: Global Manufacturing Presence

    Global Manufacturing Presence © Sun Pharmaceutical Industries Limited. All Rights Reserved. 38

  39. Slide 39: Global Manufacturing Presence

    Global Manufacturing Presence World Class Manufacturing Infrastructure • 45 manufacturing facilities across India, the Americas, Asia, Africa Extensive Global Footprint and Europe • Vertically integrated network across four continents enabling high Integrated Network quality, low cost and a quick ma

  40. Slide 40: Global Manufacturing Footprint

    Global Manufacturing Footprint Tiszavasvari Haifa (Hungury) (Israel) Ontario (Canada) Casablanca (Morocco) (US) Cashel (Ireland) Aurora Cluj (Romania) New Jersey(US) Billerica, MA Giza, (Egypt) Brayn Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Philadelphia Rio de Cranbur

  41. Slide 41: Finished Dosage Manufacturing

    Finished Dosage Manufacturing Sun Pharma - 18 Manufacturing sites Ranbaxy - 16 Manufacturing sites • India : 6, US : 6 • India : 7, US : 1 • Canada, Brazil, Mexico, Hungary , Israel, • Ireland, South Africa, Malaysia, Bangladesh : 1 each Romania, Brazil, Morocco, Egypt and • Capacities available for

  42. Slide 42: API Manufacturing

    API Manufacturing Sun Pharma - 8 locations Ranbaxy - 3 locations • India : 5, Israel : 1, US : 1, Hungary : 1 • India : 3 Panoli & Ahmednagar Hungary & (both India)‫‏‬ Tennessee (US) • International regulatory approvals: USFDA, API • Controlled substances European Key Plants manufacture • Stand alon

  43. Slide 43: Corporate Governance

    Corporate Governance Our philosophy on corporate governance envisages working towards high levels of transparency, accountability and consistent value systems across all facets of operations Chairman Independent Directors & Members of Audit Committee Israel Makov Ashwin Dani Keki Mistry Former Presi

  44. Slide 44: Financials

    Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44

  45. Slide 45: Financials

    Financials Market Capitalisation Rs. 2,300 billion / US$ 36 billion ( All Figures in Rs. Mn ) FY11 YoY FY12 YoY FY13 YoY FY14 YoY FY15* P&L Summary Net Sales 57,229 43% 80,057 40% 112,389 40% 160,044 42% 272,865 Gross Profit 42,577 46% 63,644 49% 91,592 44% 132,250 44% 205,473 EBITDA 19,518 43% 32,5

  46. Slide 46: Sales Break-up

    Sales Break-up In INR Billion In USD Million Gross 40 58 81 114 162 276 2,099 2,682 4,510 Sales 11 175 Full year consolidation for URL & Dusa 61 992 URL & Dusa part- consolidation 8 135 Taro 19 316 137 2244 Consolidation 140 8 281 15 98 1620 6 11 1132 5 62 6 6 35 6 23 67 1098 11 37 611 24 29 30 546

  47. Slide 47: EBITDA Trend

    EBITDA Trend In INR Billion Net 39 57 80 112 160 273 Sales % of Net Sales 21% 19% 17% 27% 26% 25% 14% 13% 15% 12% 14% 16% 25% Key drivers include Taro, generic 24% 24% Doxil, Doxycycline & other low 27% 26% competition products in US 30% 41% 44% 44% Impact of Ranbaxy acquisition 34% 34% 29% FY10 FY1

  48. Slide 48: Cash Flow

    Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 40 31 34 25 19 24 22 15 8 5 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 All numbers above exclude Ranbaxy financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48

  49. Slide 49: Financial Ratios

    Financial Ratios FY11 FY12 FY13 FY14 FY15 Growth (%) Net Sales 42.8 39.9 40.4 42.4 70.5 Gross Profit 46.3 49.5 43.9 44.4 55.4 EBITDA 43.2 66.5 50.9 45.0 11.3 Net Profit 34.4 46.3 12.3 5.3 44.5 Net Profit (Adjusted) 34.4 46.3 34.3 # 58.7* (15.6)** Margins (%) Gross Margin 74.4 79.5 81.5 82.6 75.3 EBI

  50. Slide 50: Key Financials Q4 & FY15

    Key Financials Q4 & FY15 ( All Figures in Rs. Mn ) Q4 FY15 Q4 FY14 FY15 FY14 Net Sales 61,449 40,436 272,865 160,043 Gross Profit 45,475 33,724 205,473 132,251 Gross Margin 74% 83% 75% 83% EBITDA 8,802 17,856 79,167 71,140 EBITDA Margin 14% 44% 29% 44% Net Profit 8,881 15,871 45,406 31,412 Net margi

  51. Slide 51: Sales Breakup Q4 & FY15

    Sales Breakup Q4 & FY15 ( All Figures in Rs. Mn ) Q4 FY15 Q4 FY14 FY15 FY14 Formulation India 15,690 9,465 67,166 36,918 US 30,477 24,861 137,196 97,844 Emerging Markets 7,706 2,112 37,326 10,308 ROW 5,242 2,334 23,320 8,777 Sub-total 59,115 38,773 265,007 153,847 Bulk 2,860 2,223 9,910 8,010 Others

  52. Slide 52: Key Milestones targeted for future

    Key Milestones targeted for future • Enhance share of specialty/branded business US • Continue to focus on complex generics and high entry barrier segments Business • Ensure broad product offering to customers across multiple dosage forms • Gain critical mass in key therapeutic segments • Improve pr

  53. Slide 53: Key Milestones targeted for future

    Key Milestones targeted for future Global Consumer • Maintain leadership in existing markets through focus on innovative solutions • Enhance presence in high growth markets Healthcare • Develop more products through expanded R&D team for global markets R&D • Focus on developing complex products acro

  54. Slide 54: Sun Pharma at a glance

    Sun Pharma at a glance 5th Largest Global Specialty Generic Company US • Ranked 5th in US / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India Emerging Markets • Largest Indian Pharma Company in Emerging Markets Europe • Expanding presence in Europe Manufacturing Footprint • 4

  55. Slide 55: Thank You

    Thank You! For more information please contact: Investors: Media: Thank You Nimish Desai Frederick Castro Tel : +91 22 4324 4324, Ext 2778 Tel : +91 22 4324 4324, Ext 2777 Tel Direct +91 22 43242778 Tel Direct : +91 22 43242777 Mobile : +91 98203 30182 Mobile : +91 99206 65176 nimish.desai@sunpharma

Sun Pharmaceutical Industries — Investor Presentation (June 2015) on 6ix