Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (February 2020)
56 slides from Sun Pharmaceutical Industries's investor presentation, February 2020
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – February 2020 NSE:SUNPHARMA | BSE:524715 | Bloomberg:SUNP IN | Reuters:SUN.BO WWW.SUNPHARMA.COM
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
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
Slide 4: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company* US • Ranked 9th in US Generics Market## India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Rest of World • Expanding presence in Rest of World Manufacturing Footpr
Slide 5: World's 4th Largest Specialty Generic Pharma Co
World’s 4th Largest Specialty Generic Pharma Co 0.0 2.0 Worldwide 2018 4.0Generic Sales 6.0 8.0 (US$ in billions) 10.0 12.0 Mylan 10.8 Teva 8.9 Novartis 8.6 Sun Pharma + Taro 3.9 Pfizer 3.5 Fresenius 3.2 Aurobindo 2.3 Lupin 2.2 Aspen 2.0 Amneal 1.8 Sanofi 1.8 Apotex 1.7 Dr. Reddy 1.6 STADA 1.6 Sawai
Slide 6: Sun Pharma today
Sun Pharma today US Formulations India Branded Generics 9th largest generics company in US* with a strong No.1 ranked with 10 classes of doctor categories pipeline (94 ANDAs & 4 NDAs awaiting approval) Leading position in high growth chronic therapies Presence in generics, Specialty branded segments
Slide 7: Driving Long Term Growth
Driving Long Term Growth • Optimize operational costs • Enhance share of specialty business globally • Vertically integrated operations • Achieve differentiation by focusing on technically complex products • Focus on key markets – achieve critical mass • Speed to market • Ensure sustained compliance
Slide 8: Our Specialty Portfolio
Our Specialty Portfolio • Indication - For plaque psoriasis • Launched in US in October 2018 • Phased launch in Europe by Almirall starting December 2018 onwards • Launched in Australia in December 2018 Ilumya/ • Long term clinical data shows that the significant response rate seen in 52 & 64 Ilumet
Slide 9: Our Specialty Portfolio
Our Specialty Portfolio • Indication - For LABCC (locally advanced basal cell carcinoma) Odomzo • Currently marketed in US, Germany, France, Denmark, Switzerland, Australia and Israel • Indication - For metastatic castration resistant prostate cancer in combination with Yonsa methylprednisolone • La
Slide 10: Highly Diversified Revenue Base
Highly Diversified Revenue Base Emerging Markets 19% Western Europe & Other Markets # 12% API & Others 6% India Branded FY19 Sales Formulations Rs.289 billion 26% US Formulations 37% # Includes Western Europe, Canada, Japan , Australia, New Zealand and other markets. © Sun Pharmaceutical Industries
Slide 11: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in INR Billion) 286.9 71.1 56.6 59.3 38.8 160.0 Adjusted Sales EBITDA 18.2 Net Profit 18.6 42.7 CAGR CAGR CAGR 25% 3.9 20% 3.1 18% 9.8 FY04 FY09 FY14 FY19 FY04 FY09 FY14 FY19 FY04 FY09 FY14 FY19 39.6 30.5 23.6 16.2 15.5 21.6 22.0 Operating Free Cash Adj
Slide 12: Consistent profitability and returns
Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin (adjusted) 77% 23% 75% 73% 73% 72% 29% 29% 19% 27% 18% 20% 21% 13% 14% FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 ROCE ROE Market Cap (USD Bn) 19% 20% 35 16% 18% 30 15% 14% 25 9% 18 8% 9% 9%
Slide 13: Profitability
Profitability Gross Margin EBITDA Margin Net Margin 77% 75% 73% 73% 72% 29% 29% 28% 66% 64% 64% 63% 63% 23% 23% 21% 19% 20% 18% 19% 19% 18% 13% 14% 19% 13% 14% 10% 8% 8% FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Gross margin= (Net Sales – Material Cost) / Net Sales *
Slide 14: Creating Value, Continuously…
Creating Value, Continuously… Agreement with Merck for in- Acquired Began with 5 Acquired Dusa Acquired InSite Acquired Pola licensing Biosintez in Russia products Vision ophthalmic Pharma in Japan Tildrakizumab portfolio Year 1983 1994 2010 2012 2013 2014 2015 2016 2018 2019 Mkt Cap (US$ Bn) 0.1 7.
Slide 15: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale Licensing agreement with CMS for Greater 2019 Access to Greater China market Tildrakizumab, Cequa & 8 generic products China 2018 Acquired Pola Pharma in Japan Japan Access to Japanese dermatology market. Acquired global rights for Cequa & 2016 Glob
Slide 16: 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% 14% 16% 9% 350 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 300 Assets of: Taro Bryan Dusa 250 Hungary URL Able Labs Ranbaxy Chattem InSite Vision 200 Odomzo Yonsa 150 100 50 - FY94 FY95 FY
Slide 17: US Business
US Business 37% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 17
Slide 18: US Business at a glance
US Business at a glance 9th Largest Pharma Company in the US Generics Market * Dermatology Segment • Ranked 2nd by prescriptions## in the US dermatology market • Wide basket of 575 ANDAs & 59 NDAs filed and 481 ANDAs & 55 Comprehensive Portfolio NDAs approved across multiple therapies Robust Pipelin
Slide 19: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Key Milestones in US Sales in Rs billion FY98 •Entry in US through Caraco acquisition 10 year CAGR - 21% •Acquired Taro Pharma – Entry into US FY10 137 138 dermatology market 135 •Acquired DUSA - Entry in branded specialty FY13 market •Acquired InSite Visio
Slide 20: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved (Cumulative) ANDA Approvals by Therapeutic Area 597 584 572 571 575 122 561 107 478 481 438 453 413 427 422 344 65 47 49 31 19 15 13 13 CNS CVS Oncology Metabolism Others Gastro Skin Pain Allergy Antibiotic FY14 FY15 FY16 FY17 FY18 FY19 9m
Slide 21: India Branded Generic Business
India Branded Generic Business 26% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 21
Slide 22: India Business at a glance
India Business at a glance No. 1 in India Market Position** • No. 1 ranked with 8.2% market share Prescription Ranking## • No. 1 ranked by prescriptions with 10 different classes of doctors Chronic Segment • Market leader in the chronic segment Acute Segment • Strong positioning in the acute segment
Slide 23: Largest Pharma Company in India
Largest Pharma Company in India Market Share Branded Generic Sales in India as of 12 Months ended Dec 2019 (US$ in mn) 1,624 Sun Pharma 8.2% 1,238 Abbott + Abbott HC + Novo 6.2% 924 Cipla 4.6% 828 Zydus + Biochem 4.2% 769 Lupin 3.9% 752 Mankind 3.8% 709 Alkem + Cachet + Indchemie 3.6% 614 Torrent 3.
Slide 24: India Business – Sales ramp-up
India Business – Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 29 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up 10 year CAGR -14% Others Impact of Opthalmology 3% 4% Cardiology 80 Ranbaxy 77 Urology 3% 18% Acquisition 73 Gynae
Slide 25: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 10 Doctor Categories* Prescription Ranking Specialist Oct ‘15 Oct ‘16 Oct ‘17 Oct ’18 Oct ‘19 Psychiatrists 1 1 1 1 1 Neurologists 1 1 1 1 1 Cardiologists 1 1 1 1 1 Orthopaedic 1 1 1 1 1 Gastroenterologists 1 1 1 1 1 Nephrologists 1 1 1 1 1
Slide 26: Best-in-class field force productivity
Best-in-class field force productivity Sales Per Representative (Rs. Mn) Field Force Productivity 11.0 Impact of Ranbaxy 10.1 Acquisition Sun • Rs 8.8 Mn/ MR Pharma 8.6 8.8 8.3 7.8 Industry 7.4 • Rs 5.2 Mn/ MR Average* * Approximation based on brokerage reports • Well trained and scientifically orie
Slide 27: Emerging Markets
Emerging Markets 19% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 27
Slide 28: Emerging Markets Business at a glance
Emerging Markets Business at a glance Largest Indian Company in Emerging Markets Global footprint • Presence in about 80 markets • Brazil, Mexico, Russia, Romania, South Africa and complementary Focus Markets & affiliated markets Product Portfolio • Extensive basket of branded products Customer Focu
Slide 29: Western Europe, Canada, Japan, ANZ & Other Markets
Western Europe, Canada, Japan, ANZ & Other Markets 12% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29
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, Japan Market Presence and few other markets • Expanding basket of products including injectables and hospital Product Portfolio products as well as products for
Slide 31: Global Consumer Healthcare Business
Global Consumer Healthcare Business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 31
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 • Romania, Russia, South Africa, Nigeria, Myanmar, Ukraine, Poland, Focus Markets Thailand, Belarus, Kazakhstan, Morocc
Slide 33: Active Pharmaceutical Ingredients (API) Business
Active Pharmaceutical Ingredients (API) Business 6% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33
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 • Approx. 20 APIs scaled up annu
Slide 35: Research & Development
Research & Development © Sun Pharmaceutical Industries Limited. All Rights Reserved. 35
Slide 36: Research & Development
Research & Development Cumulative R&D Spend of over Rs 165 billion to date • R&D spend at 7% of sales for FY19 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 • Approx.
Slide 37: R&D Investments
R&D Investments R&D Investments Filings and Approvals 6.3% 6.5% 7.2% 8.3% 7.6% 8.6% 6.9% ANDA NDA/BLA DMF/CEP Patents 23.0 23.1 22.5 575 59 426 975 19.6 19.8 481 55 885 321 10.4 7.0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Filed Approved Filed Approved Filed Approved Filed Granted R&D Investments (Rs Bn)
Slide 38: Global Manufacturing Presence
Global Manufacturing Presence © Sun Pharmaceutical Industries Limited. All Rights Reserved. 38
Slide 39: Global Manufacturing Presence
Global Manufacturing Presence World Class Manufacturing Infrastructure • 43 manufacturing facilities across India, the Americas, Asia, Africa, Extensive Global Footprint Australia and Europe • Vertically integrated network across six continents enabling high Integrated Network quality, low cost and
Slide 40: Global Manufacturing Footprint
Global Manufacturing Footprint Tiszavasvari Haifa Penza (Hungary) (Israel) (Russia) Ontario (Canada) Cluj (Romania) (US) Giza, (Egypt) Billerica, MA New Jersey(US) Lagos (Nigeria) Saitama, Japan (2 units) (2 units) Kuala Lumpur Be-Tabs, South Africa) (Malaysia) Tennessee Gazipur, Bangladesh Port Fai
Slide 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing 29 Finished dosage manufacturing sites • India : 14, US : 3, Japan : 2 • Canada, Hungary , Israel, Bangladesh, South Africa, Malaysia, Romania, Egypt, Nigeria and Russia : 1 each • Capacities available for a variety of finished dosages Orals Injectables / Sterile Topica
Slide 42: API Manufacturing
API Manufacturing 14 API manufacturing locations • India : 9, Australia : 2, Israel : 1, US : 1, Hungary : 1 Panoli & Ahmednagar Australia, Hungary & (both India) Tennessee (US) • International regulatory approvals: USFDA, API • Controlled substances European Key Plants manufacture • Stand alone uni
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 Israel Makov Former President & CEO of Teva Pharma. Industries Ltd. Independent Director Independent
Slide 44: Financials
Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44
Slide 45: Financials
Financials Market Capitalisation Rs. 1,000 billion / US$ 14 billion ( All Figures in Rs. Mn ) FY15 YoY FY16 YoY FY17 YoY FY18 YoY FY19** YoY P&L Summary Sales 2,72,451 70% 2,78,881 2% 3,02,642 9% 2,60,659 -14% 2,86,863 10% Gross Profit 2,05,059 55% 2,15,577 5% 2,21,335 3% 1,86,413 -16% 2,08,173 12%
Slide 46: Sales Break-up
Sales Break-up In INR Billion In USD Million Sales 303 261 287 4,511 4,044 4,101 245 16 385 26 18 229 264 15 35 675 461 494 45 30 54 751 767 48 138 2051 1357 87 107 1526 77 80 1155 1246 73 1051 FY17 FY18 FY19 FY17 FY18 FY19 India Formulations US Formulations #Exchange Rate : US$1 = Rs 67.07 (for FY1
Slide 47: EBITDA Trend
EBITDA Trend In INR Billion Sales 272 279 303 261 287 % of Sales 25% 23% 27% 28% 27% 16% 17% 16% 21% 21% 30% 33% 28% 31% 31% 29% 27% 29% 20% 21% FY15 FY16 FY17 FY18 FY19 EBITDA Other Expenditure Personnel Costs Material Costs © Sun Pharmaceutical Industries Limited. All Rights Reserved. 47
Slide 48: Cash Flow
Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 71 67 34 56 33 33 31 40 39 20 22 FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 (10) © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48
Slide 49: Financial Ratios
Financial Ratios FY15 FY16 FY17 FY18 FY19 ** Gro w th (%) Sales 70.2 2.4 8.5 (13.9) 10.1 Gross Profit 55.1 5.1 2.7 (15.8) 11.7 EBITDA 8.5 (2.1) 16.1 (40.9) 14.3 Net Profit 44.5 0.1 53.2 (69.9) 27.2 Net Profit (Adjusted) (15.6) # 9.5 # 33.1 (52.6)# 17.5 # Marg ins (%) Gross Margin 75.3 77.3 73.1 71.5
Slide 50: Key Financials Q3 & 9m FY20
Key Financials Q3 & 9m FY20 ( All Figures in Rs. Mn ) Q3 FY20 Q3 FY19 CHANGE 9m FY20 9m FY19 CHANGE Gross Sales 80,387 76,567 5.0% 2,42,471 2,16,420 12.0% Gross Profit 58,387 54,911 6.3% 1,73,215 1,56,118 11.0% Gross Margin 72.6% 71.7% 71.4% 72.1% EBITDA 17,252 20,694 -16.6% 52,213 50,308 3.8% EBITD
Slide 51: Sales Breakup Q3 & 9m FY20
Sales Breakup Q3 & 9m FY20 ( All Figures in Rs. Mn ) Q3 FY20 Q3 FY19 CHANGE 9m FY20** 9m FY19 CHANGE Formulation India 25,170 22,353 13% 73,454 62,470 18% US 24,924 26,059 -4% 78,296 75,475 4% Emerging Markets 13,901 14,618 -5% 41,504 41,425 0% ROW 11,035 8,981 23% 33,997 23,774 43% Sub-total 75,031
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 • Improve productivity of India business India • Maintain lea
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 • Focus on developing complex products across multiple dosage forms R&D • Invest to further build on specialty pipel
Slide 54: FY20 Guidance
FY20 Guidance Consolidated Revenues • Low to mid teen growth over FY19 R&D Investments • Approximately 6%-8% of revenues to be invested in R&D Investing for Future • Invest in R&D and in building the specialty business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 54
Slide 55: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company* US • Ranked 9th in US Generics Market## India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Rest of World • Expanding presence in Rest of World Manufacturing Footpr
Slide 56: Thank You
Thank You! For more information please contact: Investors: Nimish Desai Thank You Tel : +91 22 4324 4324, Ext 2778 Tel Direct +91 22 43242778 nimish.desai@sunpharma.com Corporate Address: SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2017 Sun Pharmaceutical Indus
Sun Pharmaceutical Industries — Investor Presentation (February 2020) on 6ix