Granules India Limited · NSE:GRANULES
Granules India — Q2 FY2021 Earnings Presentation
27 slides from Granules India's earnings presentation, Oct 20, 2020
Slide 1: Cover letter to stock exchanges
REGISTERED OFFICE GRANULES INDIA LTD., 2nd Floor, 3rd Block, My Home Hub, Madhapur, Hyderabad – 500 081, Telangana, INDIA. Tel: +91 40 30660000, Fax: +91 40 23115145, mail@granulesindia.com, www.granulesindia.com CIN: L24110TG1991PLC012471 Dated October 20, 2020 To, National Stock Exchange of India
Slide 2: Investor Presentation Granules India Limited Q2FY21
Investor Presentation Granules India Limited Q2FY21
Slide 3: Safe harbor
Safe harbor The Presentation is to provide the general background information about the Company’s activities as at the date of the Presentation. The information contained herein is for general information purposes only and based on estimates and should not be considered as a recommendation that any
Slide 4: Table of Contents
1 Q2FY21 Highlights 2 Company Overview Table of Contents 3 Growth Drivers, Market Opportunities 4 Key Focus Areas in FY21 5 5-year Financial Highlights 6 Leadership Team Granules India Limited. 3
Slide 5: Q2FY21: Consolidated Financial Highlights
Q2FY21: Consolidated Financial Highlights (₹ Mn) 1 Revenues Gross Profit and Gross Profit Margins EBITDA and EBITDA Margins Revenue from operations in 4,970 2,564 8,581 Q2FY21 grew by 22.7% YoY 6,995 mainly on an account of new 3,401 launches and increase in 1,436 29.9% market share of existing 57.9
Slide 6: Q2FY21: EBITDA & Adjusted EBITDA
Q2FY21: EBITDA & Adjusted EBITDA (₹ Mn) Reported EBITDA and EBITDA Margins *Adjusted EBITDA and EBITDA Margins 2,564 2,587 1,836 2,081 1,436 29.9% 1,436 30.2% 28.3% 25.0% 20.5% 20.5% Q2FY20 Q1FY21 Q2FY21 Q2FY20 Q1FY21 Q2FY21 ❑ *Adjusted EBITDA and EBITDA margin in Q2FY21 and Q1FY21 is excluding COVI
Slide 7: Geographical Mix
Increasing contribution from higher-margin FDs, generics, while remaining backward integrated in APIs Strong growth momentum witnessed across geographies Finish Dosage and PFI segments grew 22% & 33% YOY (₹ Mn) Segment Revenue 8,581 Geographical Mix 6,995 8,581 6,995 4,719 4,301 3,695 3,515 1,536 1,
Slide 8: Continuous Improvement In Financial Metrics
Continuous Improvement In Financial Metrics (₹ Mn) Net Debt & Net debt-to-EBITDA (x) ROE (%) Free Cash Flow 8,265 7,888 29.3% 1,099 1.6x 6,133 22.2% 6,058 5,998 1.4x 19.9% 590 24.4% 522 1.2x 354 373 19.8% 0.8x 0.7x Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q2FY20 Q3FY20 Q
Slide 9: Business Structure
Business Structure 2 All are wholly-owned Subsidiaries Granules India Ltd (GIL) Granules Granules USA Granules Europe Pharmaceuticals Inc (GUSA) (GPI) Ltd (GEL) Granules Consumer Health (GCH) • GIL: Presence across the entire pharmaceutical manufacturing value chain from API to finished dosages • GU
Slide 10: Multiple Drivers Provide Visibility For Long-Term Growth
Multiple Drivers Provide Visibility For Long-Term Growth 3 Core US New Products Business Generics ✓ Focus on volume-based products ✓ Filing new ANDAs (7-8 such as Paracetamol, Metformin ✓ Fully-integrated ANDAs per year; 2-4 HCl, Ibuprofen (core). Other infrastructure including R&D, dossiers per yea
Slide 11: Expanding the Core business to Non US markets
Expanding the Core business to Non US markets FY20 FY21 FY23 ROW ROW ROW 21% 16% 17% USA LATAM 50% USA LATAM 43% LATAM USA 11% 12% 8% 51% Europe Europe 28% Europe 23% 20% Note: *Core molecules includes Paracetamol, Ibuprofen and Metformin. Core molecules will keep increasing in absolute terms on an
Slide 12: US Generics: Granules Pharmaceuticals Inc. (GPI)
US Generics: Granules Pharmaceuticals Inc. (GPI) Overview 1 Gained traction with a first to generic product; Methergine in June 2018. Set up a front end sales and marketing division and launched 11 ✓ Fully-integrated infrastructure from R&D, products under the GPI label: “Control your own destiny” m
Slide 13: US Generics: Granules USA (GUSA)
US Generics: Granules USA (GUSA) ❑ B2B: Marketing & Distribution arm for APIs, PFIs and FDs (Rx & OTC) from GIL with a top-line of $48 Mn in FY20 ❑ B2C: Granules Consumer Health; our front-end division for private label OTC products ❑ Incorporated in 2003 to set up a sales and marketing arm for real
Slide 14: US Generics: Opportunity by market size and dosage form in FDs
US Generics: Opportunity by market size and dosage form in FDs FY23 FY21 By OTC and Rx FY20 +17 +23 OTC New products added New products added 15% OTC Rx 29% No of 36% No of Rx No of products: products: 33 71% products: 56 OTC 16 64% Rx 85% $1,472 Mn $ 4,089 Mn $10,747 Mn By Dosage Form FY21 FY23 FY2
Slide 15: US Generics: Opportunity from Core and Non-core products expansion
US Generics: Opportunity from Core and Non-core products expansion By Core and Non-Core FY20 FY21 FY23 *Core *Core Products Products 25% 24% Non-core *Core #No of products #No of Products #No of products: 56 products: products: 33 51% 49% 16 Non-core Non-core Products Products 75% 76% $1,472 Mn $ 4,
Slide 16: Multi APIs/Oncology
Multi APIs/Oncology ❑ Two Multi-product and multi-stage API-to-FD 1 manufacturing facilities in Vizag Multi-product API manufacturing facility with a focus on vertical ❑ Unit IV: Directly relates to our core business with ~15 integration APIs, fully commercialized and profitable 2 Customer Centricit
Slide 17: Global Opportunity by market size: Unit 4 & 5 Multi-API/Oncology
Global Opportunity by market size: Unit 4 & 5 Multi-API/Oncology FY20 FY21 FY23 +7 +13 Vertically Vertically Intergrated Intergarted Vertically APIs APIs Intergrated 24% 21% New APIs APIs No of APIs: No of APIs: 58% No of APIs: 42% 08 15 28 New APIs New APIs 76% 79% $20,217 Mn $26,288 Mn $48,257 Mn
Slide 18: New capacity expansion: MUPS technology
New capacity expansion: MUPS technology What is MUPS technology? • Tablets, Capsules and other dosage forms which are prepared by compaction, encapsulation or blending of modified release coated pellets are based on MUPS (multi-unit pellet system) technology. • Pellets are produced for the purpose o
Slide 19: Evolving business strategy for R&D
Evolving business strategy for R&D Core Business Emerging Business GPI High Volume and Low Medium Volume and Medium Low Volume and High Value products Value products Value Products ➢ First line of treatment ➢ New Products filing through ➢ Focus on R&D R&D at GIL ➢ Less R&D and more ➢ Controlled Subs
Slide 20: Key focus areas for FY21
4 Key focus areas for FY21 Key focus areas for FY21 1 To ensure timely launches of 9 products expected in FY21 while also increasing the market share of existing products by passing on cost benefits realized through operational efficiencies 2 Placeholder To ensure employee safety while increasing pr
Slide 21: Building on solid base: 5-year trajectory
Building on solid base; unlocking value underway: 5-year trajectory 5 4-year CAGR 19% Gross Profit and Gross Profit Margins (₹ Mn) 25,986 52.6% 50.7% 22,792 44.9% 47.0% Revenue 16,918 14,353 10,236 13,829 13,175 47.6% 7,955 7,556 6,579 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 4-year CAGR 17
Slide 22: Increasing share from FDs while remaining backward integrated in APIs
Increasing share from FDs while remaining backward integrated in APIs: 4 year trajectory (₹ Mn) Higher revenue contribution coming from regulated market, which contributed 73% to total revenue 13,829 16,918 25,986 14,353 22,792 13,879 6,612 6,010 11,113 5,055 5,393 4,573 4,029 4,083 3,795 3,550 3,36
Slide 23: Improving returns; focus on FCF generation: 4 year trajectory
Improving returns; focus on FCF generation: 4 year trajectory Net Debt & Net debt-to-EBITDA (x) Cash-to-Cash cycle (days) (₹ Mn) 8,704 9,082 135 125 Free Cash Flow (FCF) 114 109 6,138 3.1x 6,058 2.4x 2.1x 2,645 1.2x Mar'17 Mar'18 Mar'19 Mar'20 Mar'17 Mar'18 Mar'19 Mar'20 Mar'17 Mar'18 Mar'19 Mar'20
Slide 24: Strong regulatory compliance history
Strong regulatory compliance history Installed Inspection Value chain Facility location Approvals Outcome capacity Date Bonthapally 34,560 TPA U.S. FDA, EDQM, WHO, COFEPRIS, INFARMED July-19 Clear API Jeedimetla 4,800 TPA U.S. FDA, EDQM, COFEPRIS, WHO, CDCSO March-18 Clear Vizag (Unit IV) 290 KL U.S
Slide 25: Leadership team
Leadership team 6 C Krishna Prasad Mr Prasad’s journey as pharma entrepreneur began in 1984, when he set up a paracetamol API manufacturing facility that focused on capital and process efficiency. Pharmaceutical formulations intermediates (PFIs) as a cost efficient product for Chairman and Managing
Slide 26: Glossary
Glossary API: Active Pharmaceutical Ingredient PFI: Pharmaceuticals Formulation Intermediates FD: Finished Dosage OTC: Over the counter drugs Rx: Prescription drugs IR: Immediate Release ER: Extended Release CII: Control substances PFOS: Powder for oral suspensions/solutions MUPS: Multi-unit pellet
Slide 27: Thank you
Thank you Granules India Investor Relations team Granules India Ltd Krishna Raghunathan (VP, Finance) Floor 2 Block 3 My Home Hub Madhapur Granules India Ltd Hyderabad 500081 krishna.raghunathan@granulesindia.com CIN: L24110TG1991PLC012471 Voice: +91 40 30660000/30663600 Fax: +91 40 Richa Singh 2311