Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA
Sun Pharmaceutical Industries — Investor Presentation (March 2015)
53 slides from Sun Pharmaceutical Industries's investor presentation, March 2015
Slide 1: Creating Lasting Value
Creating Lasting Value Investor Presentation - March 2015 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 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
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
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 11 classes of doctor categories largest ANDAs pipeline (149 ANDAs awaiting approval) Leading position in high growth chronic therapies Presence in generics, Specialty and brand
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 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
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 # 12% India Branded Formulations 8% 5 year C
Slide 10: Impressive Track Record of Growth
Impressive Track Record of Growth (All Figures in INR Billion) 160 71.1 56.6 Adjusted Net Sales 18.2 42.7 18.6 EBITDA Net Profit CAGR CAGR CAGR 9.8 3.9 3.1 3.3 29% 0.7 36% 0.6 36% FY99 FY04 FY09 FY14 FY99 FY04 FY09 FY14 FY99 FY04 FY09 FY14 39.6 30.5 27.3 21.6 15.5 Operating Free Cash 8.8 Adjusted Ca
Slide 11: Consistent profitability and returns
Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin 83% 44% 45% 35% 82% 34% 41% 32% 32% 32% 80% 34% 34% 74% 73% FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 ROCE ROE Market Cap (USD Bn) 27% 28% 33 31% 24% 26% 20% 20% 24% 21% 18% 20 16 12 10 8 FY
Slide 12: Sustained Profitability Vs. Peers
Sustained Profitability Vs. Peers Superior business model Margins consistently higher than peers# Gross Margin EBITDA Margin Net Margin * Pro forma margins for Sun Pharma & Ranbaxy combined for 12 months ended Dec’ 14 83% 82% 80% 44% 45% 76% 75% 35% 41% 34% 33% 73% 32% 32% 34% 34% 32% 20% 14% 14% 62
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 33.5 of Mar, 31 of respective years First Researc
Slide 14: Key Deals & Rationale
Key Deals & Rationale Year Deals Country Rationale 5th largest Global Specialty Generic Pharma Company, No.1 Pharma 2015 Sun Pharma – Ranbaxy Merger Global Markets Company in India & Strong positioning in Emerging Markets Acquisition of GSK’s Opiates Business 2015 Global Markets Vertical Integration
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% 20% 24% 28% 180 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 160 140 Assets of: Taro Dusa 120 Bryan URL Hungary 100 Able Labs Chattem 80 60 40 20 - FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03
Slide 16: US Business
US Business 50% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16
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 586 ANDAs filed & 437 approved ANDAs across Comprehensive Portfolio multiple therapies • 149 A
Slide 18: US Business - Significant Ramp-up in Sales
US Business - Significant Ramp-up in Sales Sales in Rs billion Sun Pharma Ranbaxy Key Milestones in US 36 • Entry in US through Caraco FY98 acquisition 103 98 FY98-FY10 • Ramp-up in US business • Launched many complex FY08 onwards generics & few FTFs 62 • Acquired Taro Pharma – Entry FY10 into derma
Slide 19: ANDA Pipeline - Significant ramp up
ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 437 ANDA Approvals by Therapeutic Area 586 103 98 478 449 437 397 377 344 61 311 250 225 39 207 177 34 30 26 20 69 84 13 13 Gastro Allergy Antibiotic CNS CVS Metabolism Other Skin Pain Oncology FY09 FY10 FY11 FY12 FY13 FY14 Dec'14 Cumulati
Slide 20: India Branded Generic Business
India Branded Generic Business 24% 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 9.1% market share. Market Position** • Growth of 13% versus 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 segment Ac
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 December 2014 (US$ in mn) Sun Pharma+Ranbaxy - 9.1% 1,243 Abbott - 6.2% 842 Sun Pharma - 5.5% 741 Cipla - 5.0% 679 Zydus Cadila - 4.3% 590 Ranbaxy- 3.7% 501 Mankind - 3.6% 490 Alkem + Cachet + Indch
Slide 23: India Business – Sales ramp-up
India Business – Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 31 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up Sun Pharma Ranbaxy Others, 7% Neuro-Psychiatry, 24 Opthalmology, 17% 3% Respiratory, 4% 42 Dermatology, 4% 37 Gyna
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 8.4% sh
Slide 25: Leadership in key therapeutic areas
Leadership in key therapeutic areas* Number 1 Ranking with 11 Doctor Categories* Ranking (Sun Pharma) Ranking (Sun + Ranbaxy) Specialist Oct ‘14 Specialist Oct ‘14 Psychiatrists 1 Psychiatrists 1 Neurologists 1 Neurologists 1 Cardiologists 1 Cardiologists 1 Orthopaedic 1 Orthopaedic 1 Ophthalmologis
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 * Pro forma for Sun Pharma & Ranbaxy combined for 12 months ended Dec’ 14 Sun 11.1 11.0 • Rs 7.4 Mn/ MR Pharma 10.1 9.2 Industry • Rs 5.5 Mn/ MR Average* 7.1 7.4* * B
Slide 27: Emerging Markets
Emerging Markets 14% 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 50 markets • Brazil, Mexico, Russia, Romania, South Africa and complementary Focus Markets & affiliated markets Product Portfolio • Extensive basket of branded products Customer Focus
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
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 • 5 core markets viz., India, Russia, Romania, Nigeria and Myanmar Market Focus • 4 growth markets viz., Ukraine, Poland
Slide 33: Active Pharmaceutical Ingredients (API) Business
Active Pharmaceutical Ingredients (API) Business 4% 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 • More than 25 APIs scaled up an
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 Rs 58 billion to date • R&D spend at 6.3% of Net Sales for CY14* 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
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% 6.3% ANDA DMF/CEP Patents 268 1646 17.4 586 2 97 437 1060 280 79 10.4 2 876 266 7.0 489 531 178 358 4.4 3.3 3.3 586 2.5 345 FY09 FY10 FY11 FY12 FY13 FY14 CY14* Filed Approved Filed Approved Filed Granted R&D Expenses
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 • 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
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
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
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 alone u
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. 2,100 billion / US$ 33 billion FY11 YoY FY12 YoY FY13 YoY FY14 YoY CY14* P&L Summary Net Sales 57,229 43% 80,057 40% 112,389 40% 160,044 42% 276,145 Gross Profit 42,577 46% 63,644 49% 91,592 44% 132,250 44% 208,811 EBITDA 19,518 43% 32,507 67% 49,063 51% 71,141 4
Slide 46: Sales Break-up
Sales Break-up In INR Billion In USD Million Gross 40 58 81 114 162 278 2,099 2,682 4,564 Sales 11 175 Full year consolidation for URL & Dusa 62 1022 URL & Dusa part- consolidation 8 135 Taro 19 316 139 2282 Consolidation 140 8 281 15 98 1620 6 11 1132 5 62 6 6 35 6 23 66 1085 11 37 611 24 29 30 546
Slide 47: EBITDA Trend
EBITDA Trend In INR Billion Net 39 57 80 112 160 276 Sales % of Net Sales 21% 19% 17% 27% 26% 24% 14% 13% 15% 12% 14% 16% 25% Key drivers include Taro, generic 24% 24% Doxil, Doxycycline & other low 27% 26% 28% competition products in US 41% 44% 44% Impact of Ranbaxy acquisition 34% 34% 32% FY10 FY1
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
Slide 49: Financial Ratios
Financial Ratios FY11 FY12 FY13 FY14 Growth (%) Net Sales 42.8 39.9 40.4 42.4 Gross Profit 46.3 49.5 43.9 44.4 EBITDA 43.2 66.5 50.9 45.0 Net Profit 34.4 46.3 12.3 5.3 Net Profit (Adjusted) 34.4 46.3 34.3* 58.7# Margins (%) Gross Margin 74.4 79.5 81.5 82.6 EBITDA Margin (%) 34.1 40.6 43.7 44.5 Net M
Slide 50: 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 51: 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 52: 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
Slide 53: Thank You
Thank You! For more information please contact: Investors: Media: Nimish Desai Frederick Castro Thank You 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
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