Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (April 2017)
56 slides from Sun Pharmaceutical Industries's investor presentation, April 2017
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation – April 2017 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 4th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Europe • Expanding presence in Europe Manufacturing
Slide 5: World's 4th Largest Specialty Generic Pharma Co
World’s 4th Largest Specialty Generic Pharma Co 2016 Worldwide Generic Sales (US$ in billions) Teva 9.9 Mylan 9.6 Novartis 9.0 Sun Pharma 4.6 Allergan 4.2 Pfizer 3.5 Endo International 2.5 Fresenius 2.5 Lupin 2.5 Sanofi 2.1 Aspen Pharmacare 2.0 Aurobindo 1.9 Cipla 1.7 Dr. Reddy 1.7 Nichi-Iko Pharma
Slide 6: Sun Pharma today
Sun Pharma today US Formulations India Branded Generics 4th largest generics company in US* with one of the No.1 ranked with 11 classes of doctor categories strongest pipeline (149 ANDAs & 4 NDAs awaiting Leading position in high growth chronic therapies approval) Specializes in technically complex
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
Slide 8: Our Specialty Initiatives
Our Specialty Initiatives • In-licensed Tildrakizumab (a monoclonal antibody targeting IL-23) from MSD for treating chronic plaque psoriasis- Announced positive results from Phase-3 clinical trials in May’16 • Acquired Ocular Technologies – Gives access to global rights for Seciera – for treating Dr
Slide 9: Highly Diversified Revenue Base
Highly Diversified Revenue Base Emerging Markets 13% Western Europe & Other Markets # 8% India Branded Formulations 26% API & Others FY16 Sales 5% USD 4.3 billion US Formulations 48% # Includes Western Europe, Canada, Australia & New Zealand, Japan and other markets. © Sun Pharmaceutical Industries
Slide 10: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in USD Million) 4240 1192 825 398 Adjusted Net Sales 428 1256 EBITDA Net Profit CAGR 111 CAGR 129 CAGR 370 122 27% 33 27% 30 25% FY01 FY06 FY11 FY16 FY01 FY06 FY11 FY16 FY01 FY06 FY11 FY16 1035 517 0.3 426 524 0.2 Operating Free Cash Adjusted Cash Flow
Slide 11: Consistent profitability and returns
Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin (adjusted) 83% 44% 45% 35% 82% 41% 32% 32% 80% 75% 77% 29% 28% 18% 19% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 ROCE ROE Market Cap (USD Bn) 27% 27% 31% 35 24% 30 26% 24% 15% 19% 19% 20 15%
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% 77% 45% 35% 44% 33% 75% 32% 32% 75% 41% 34% 19% 67% 18% 28% 14% 14% 13% 14% 29% 12% 63% 62% 62% 61% 7% 60% 22% 23% 20% 20% 19% 19% FY11 FY12 FY13 FY14 F
Slide 13: Creating Value, Continuously…
Creating Value, Continuously… • Licensing agreement with Almirall for Tildrakizumab in Europe for Psoriasis • Announced positive results from Phase-3 trials for Tildrakizumab • Entry into Japan -Acquired 14 brands from Began with 5 Acquired URL Novartis IPO - Rs. 550 Mn Acquired Taro Acquired Dusa •
Slide 14: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale Acquired global rights for Seciera & 2016 Global Enhances specialty pipeline Odomzo 2016 Acquired Biosintez Russia Local manufacturing capability to enhance presence in Russian market Licensing agreement with Almirall for 2016 Europe Strengthening t
Slide 15: Successful track record of turning around acquisitions
Successful track record of turning around acquisitions ROCE 24% 25% 26% 27% 38% 37% 18% 34% 18% 24% 27% 15% 15% 5,000 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 4,500 Taro 4,000 Assets of: Dusa URL 3,500 Bryan Ranbaxy Hungary InSite Vision 3,000 Able Labs 2,500 Chattem 2,000 1,500 1,000
Slide 16: US Business
US Business 48% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16
Slide 17: US Business at a glance
US Business at a glance 4th Largest Pharma Company in the US Generics Market * • Largest generic dermatology company and amongst top 5 Dermatology Segment branded dermatology company in the US • Wide basket of 573 ANDAs & 40 NDAs filed and 424 ANDAs & 36 Comprehensive Portfolio NDAs approved across
Slide 18: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Sales in USD Million Key Milestones in US 2,244 FY98 • Entry in US through Caraco acquisition 2,066 FY98-FY10 • Ramp-up in US business • Launched many complex generics & 1,620 FY08 onwards few FTFs • Acquired Taro Pharma – Entry into FY10 dermatology market
Slide 19: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 424 ANDA Approvals by Therapeutic Area 597 573 102 102 478 449 438 424 397 377 344 63 311 250 44 225 207 30 26 21 84 14 12 10 CNS CVS Oncology Metabolism Gastro Pain Allergy Other Skin Antibiotic FY10 FY11 FY12 FY13 FY14 FY15 Dec-16 Cumula
Slide 20: India Branded Generic Business
India Branded Generic Business 26% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 20
Slide 21: India Business at a glance
India Business at a glance No. 1 in India • No. 1 ranked with 8.6% market share Market Position** • Growth of 11% in-line with average industry growth of 10% Prescription Ranking## • No. 1 ranked by prescriptions with 11 different classes of doctors Chronic Segment • Market leader in the chronic seg
Slide 22: Largest Pharma Company in India
Largest Pharma Company in India (Market Share) Branded Generic Sales in India as of 12 Months ended Mar 2017 (US$ in mn) Sun Pharma - 8.6% 1,422 1,021 Abbott - 6.2% 787 Cipla - 4.8% 701 Zydus + Biochem - 4.2% 608 Mankind - 3.7% 586 Alkem + Cachet + Indchemie -3.5% 547 Lupin - 3.3% 499 Glaxo - 3.1% 4
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 73 Others 67 Opthalmology 3% 5% Cardiology Respiratory 4% 19% Vitamins / Minerals / Nutrients, 4% Gynaecology, 4%
Slide 24: Strong Customer Focus Drives Market Share Gains
Strong Customer Focus Drives Market Share Gains Therapy focused marketing Strong increase in market share • 9,200+ sales representatives • Sun pharma market share has consistently • Covering over 600,000* doctors increased from 2.4% in 2000 to 8.1% in 2016 (IMS Data for Dec’16) * Does not exclude ov
Slide 25: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 11 Doctor Categories* Prescription Ranking Specialist Feb ’14 Feb ‘15 Feb ‘16 Feb ‘17 Psychiatrists 1 1 1 1 Neurologists 1 1 1 1 Cardiologists 1 1 1 1 Orthopaedic 1 1 1 1 Gastroenterologists 1 1 1 1 Nephrologists 1 1 1 1 Diabetologists 1 1 1
Slide 26: Best-in-class field force productivity
Best-in-class field force productivity Sales Per Representative (USD ‘000) Field Force Productivity FY10 – FY14 numbers exclude Ranbaxy * FY15 & FY16 numbers include the impact of Ranbaxy merger Sun 232 • USD 119,323 / MR Pharma 202 186 182 Industry • USD 89,972 / MR Average* 150 * Based on brokerag
Slide 27: Emerging Markets
Emerging Markets 13% 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 over 100 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 8% 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 and Market Presence few other markets • Expanding basket of products including injectables and hospital Product Portfolio products as well as products for retail
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 • 4 core markets viz., India, Russia, Romania, and Nigeria Market Focus • 4 growth markets viz., Ukraine, Poland, South
Slide 33: Active Pharmaceutical Ingredients (API) Business
Active Pharmaceutical Ingredients (API) Business 5% 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 USD 1.5 billion till date • R&D spend at 8.3% of Net Sales for FY16* 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
Slide 37: R&D Investments
R&D Investments R&D Expenditure Filings and Approvals 5.6% 5.8% 5.6% 6.3% 6.5% 7.2% 8.3% ANDA DMF/CEP Patents 352 573 419 1120 320 424 773 306 173 130 93 73 52 FY10 FY11 FY12 FY13 FY14 FY15* FY16* Filed Approved Filed Approved Filed Granted R&D Expenses (USD Mn) R&D Exp (% of Net Sales) FY09 – FY14
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 • 42 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 (Hungury) (Israel) (Russia) Ontario (Canada) (US) Cluj (Romania) New Jersey(US) Billerica, MA Giza, (Egypt) Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Cranbury Bangladesh Plant Port Fairy (Australia) Wilmington M.A
Slide 41: Finished Dosage Manufacturing
Finished Dosage Manufacturing 28 Finished dosage manufacturing sites • India : 13, US : 4 • Canada, Mexico, Hungary , Israel, Bangladesh, South Africa, Malaysia, Romania, Egypt, Nigeria and Russia : 1 each • Capacities available for a variety of finished dosages Orals Injectables / Sterile Topicals
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 Independent Directors & Members of Audit Committee Israel Makov Ashwin Dani Keki Mistry Former Presi
Slide 44: Financials
Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44
Slide 45: Financials
Financials Market Capitalisation Rs. 1,650 billion / US$ 25 billion ( All Figures in USD. Mn ) FY12 YoY FY13 YoY FY14 YoY FY15* YoY FY16* YoY P&L Summary Net Sales 1,672 33% 2,067 24% 2,649 28% 4,457 68% 4,240 -5% Gross Profit 1,330 42% 1,685 27% 2,189 30% 3,354 53% 3,249 -3% EBITDA 679 59% 903 33%
Slide 46: Sales Break-up
Sales Break-up In USD Million In INR Billion Gross 114 162 275 280 1,696 2,099 2,682 4,502 4,278 Sales 175 11 15 225 Full year consolidation for URL & Dusa 992 61 57 878 URL & Dusa part- consolidation 135 8 Taro 316 19 Consolidation 2244 135 2066 137 140 8 281 129 15 232 1620 98 1132 725 62 1090 110
Slide 47: EBITDA Trend
EBITDA Trend In USD Billion Net 1.3 1.7 2.1 2.6 4.5 4.3 Sales % of Net Sales 21% 19% 17% 26% 25% 24% 14% 13% 15% 14% 17% 17% 25% Key drivers include Taro, generic 24% 24% Doxil, Doxycycline & other low 26% competition products in US 30% 31% 41% 44% 44% Impact of Ranbaxy acquisition 34% 29% 28% FY11
Slide 48: Cash Flow
Cash Flow Net Cash From Operating Activities (USD Mn) Free Cash Flow (USD Mn) 536 518 1,035 505 462 919 655 318 617 467 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 All numbers above exclude Ranbaxy financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48
Slide 49: Financial Ratios
Financial Ratios FY12 FY13 FY14 FY15* FY16* Grow th (%) Net Sales 33.2 23.6 28.1 68.2 (4.9) Gross Profit 42.3 26.7 29.9 53.2 (3.1) EBITDA 58.6 32.9 30.5 7.2 (5.6) Net Profit 39.3 (1.1) (5.2) 42.8 (2.9) Net Profit (Adjusted) 39.3 18.2 # 42.8 # (16.6) # 5.6 # Margins (%) Gross Margin 79.5 81.5 82.6 75
Slide 50: Key Financials Q3 & 9m FY17
Key Financials Q3 & 9m FY17 ( All Figures in USD Mn ) Q3 FY17 Q3 FY16 CHANGE 9m FY17 9m FY16 CHANGE Net Sales 1,139 1,076 6% 3,494 3,162 10% Gross Profit 806 813 -1% 2,609 2,401 9% Gross Margin 71% 76% 75% 76% EBITDA 330 336 -2% 1,129 864 31% EBITDA Margin 29% 31% 32% 27% Net Profit 218 235 -7% 856
Slide 51: Sales Breakup Q3 & 9m FY17
Sales Breakup Q3 & 9m FY17 ( All Figures in USD. Mn ) Q3 FY17 Q3 FY16 CHANGE 9m FY17 9m FY16 CHANGE Formulation India 292 285 3% 869 835 4% US 507 486 4% 1,670 1,484 13% Emerging Markets 172 151 14% 494 424 17% ROW 113 85 33% 276 252 Sub-total 1,084 1,006 8% 3,310 2,995 11% Bulk 54 67 -19% 179 158 1
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
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
Slide 54: FY17 Guidance
FY17 Guidance Consolidated Revenues • To grow by 8-10% over FY16 R&D Investments • Approximately 9% of revenues to be invested in R&D • Target US$ 300 million in synergy benefits from the Ranbaxy Ranbaxy Integration Synergy acquisition by FY18 Investing for Future • Invest in R&D and in building the
Slide 55: Sun Pharma at a glance
Sun Pharma at a glance 4th Largest Global Specialty Generic Company US • Ranked 4th in US* / Largest Indian Pharma Company in US India • No. 1 Pharma Company in India • Amongst the largest Indian Pharma Company in Emerging Emerging Markets Markets Europe • Expanding presence in Europe Manufacturing
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 Mobile : +91 98203 30182 nimish.desai@sunpharma.com Corporate Address: SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2015
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