Neuland Laboratories Ltd. · NSE:NEULANDLAB
Neuland Laboratories — Q4 FY22 Earnings Presentation
51 slides from Neuland Laboratories's earnings presentation, May 10, 2022
Slide 1: Outcome of Board Meeting
WHERE OPPORTUN IT'f l\~COMES REALIIT Neuland Laboratories Limited 11th Floor, (5th Office Level), Phoenix IVY Building, May 10, 2022 Plot No. 573A-111, Road No.82, Jubilee Hills, Hyderabad-500033, To To Telangana, India BSE Limited The National Stock Exchange of India Ltd Tel: 040 67611600/ 67611700
Slide 2: Independent Auditor's Report on Standalone Financial Results
1101 /B, Manjeera Trinity Corporate MS KA & Associates JNTU·Hitech Cit y Road, Kukatpally Te!angana State, Hyderabad 500072, !NOIA Chartered Accountants Tel: +91 40 6814 2999 Independent Auditor's Report on Quarterly Standalone Financial Results and Year to Date Standalone Financial Results pursuant
Slide 3: Auditor's Report (continued)
responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and e
Slide 4: Auditor's Report (continued)
obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represent the underly
Slide 5: Statement of Standalone Financial Results
I _/{ NEVLAND WIIER[ OPl'ORTIJNITY 8KOMES nEALITY Neuland Laboratories Limited 11th Floor, (5th Office level), Phoenix IVY Building, Plot No. 573A-111, Road No.82, Jubilee Hills, Hyderabad-500033, Telangana, India Tel: 040 67611600 / 676 11700 Email: neuland@neulandlabs.com www.neulandlabs.com NEULA
Slide 6: Notes to Standalone Financial Results
NOTES: The financial results for the quarter and year ended 31 March 2022 have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting hetd on 10 May 2022. 2 The financial results have been prepared in accordance with the Indian Accounting Standards (Ind AS) pres
Slide 7: Standalone Assets and Liabilities
NEULAND LABORATORIES LIMITED STATEMENT OF STANDALONE ASSETS AND LIABILITIES AS ON 31 MARCH 2022 (Amount in lakhs of,, unless otherwise stated) ' As at As at Particulars 31.03.2022 31.03.2021 (Audited) (Audited) Assets Non-current assets Property, plant and equipment 45,712.21 40,172.16 Capital work
Slide 8: Standalone Statement of Cash Flows
~"~ ' NEULAND NEULAND LABORATORIES LIMITED STANDALONE STATEMENT OF CASH FLOWS (Amount in /akhs off, unless otherwise stated) Year ended Year ended Particulars 31.03.2022 31.03.2021 (Audited) (Audited) Cash flow from operating activities Profit before tax 8,173.98 10,496.21 Adjustments: Depreciation
Slide 9: Independent Auditor's Report on Consolidated Financial Results
1101 /B, Manjeera Trinity Corporate MSKA & Associates JNTU-Hitech City Road, Kukatpally Tetangana State, Hyderabad 500072, INDIA Tel: +91 40 6814 2999 Chartered Accountants Independent Auditor' s Report on Quarterly Consolidated Financial Results and Year to Date Consolidated Financial Results pursu
Slide 10: Board of Directors' Responsibilities for the Consolidated Financial Results
Board of Directors' Responsibilities for the Consolidated Financial Results These Statement, which is the responsibility of the Holding Company's Management and approved by the Holding Company's Board of Directors, have been prepared on the basis of the consolidated annual financial statements. The
Slide 11: Auditor's Report (continued)
controls with reference to financial statements in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. • Conclude on the appropriatene
Slide 12: Auditor's Report (continued)
prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Holding Company's management has converted the financial statemen
Slide 13: Statement of Consolidated Financial Results
I _/{ NEULAND WHElli OPPOIUUNITY OECOM ES REALITY Neuland laboratories Limited 11th Floor, (5th Office Level), Phoenix IVY Building, Plot No. 573A-III, Road No.82, Jubilee Hills, Hyderabad-500033, Telangana, India Tel : 040 67611600 / 67611700 Email : neuland@neulandlabs.com www.ne ulandlabs.com NEU
Slide 14: Notes to Consolidated Financial Results
NOTES: The financial results for the quarter and year ended 31 March 2022 have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 10 May 2022. 2 The financial results have been prepared in accordance with the Indian Accounting Standards (Ind AS) pres
Slide 15: Consolidated Assets and Liabilities
NEULANO LABORATORIES LIMITED STATEMENT OF CONSOLIDATED ASSETS ANO LIABILITIES AS ON 31 MARCH 2022 (Amount in lakhs off, unless otherwise stated) As at As at Particulars 31.03.2022 31.03.2021 (Audited) (Audited) Assets Non-current assets Property, plant and equipment 45,712.23 40,173.45 Capital work
Slide 16: Consolidated Statement of Cash Flows
NEULAND LABORATORIES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (Amount in /akhs of if, unless otherwise stated) Year ended Year Ended Particulars 31.03.2022 31.03.2021 (Audited) (Audited) Cash flow from operating activities Profit before tax 8,216.25 10,533.35 Adjustments: Depreciation and amorti
Slide 17: Neuland FY22 income at Rs.953.2 crore, EBITDA at Rs. 144.3 crore
Neuland FY22 income at Rs.953.2 crore EBITDA at Rs. 144.3 crore Hyderabad, India, May 10, 2022 – Neuland Laboratories Limited (NLL) (NSE: NEULANDLAB; BSE:524558), a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and custom manufacturing solution
Slide 18: About Neuland Laboratories Limited
Please note that the transcript of the conference call will be uploaded on the company website in due course. About Neuland Laboratories Limited For over 38 years, Neuland Labs has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with customers in close
Slide 19: Earnings Presentation Q4 FY22
Earnings Presentation Q4 FY 22 BSE CODE : 524558 | NSE SYMBOL : NEULANDLAB | BLOOMBERG: NLL:IN | REUTERS: NEUL.NS
Slide 20: Safe Harbour
Safe Harbour 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", "
Slide 21: Table of Contents
Table of Contents Q4 & FY-22 1 HIGHLIGHTS 2 BUSINESS OVERVIEW 3 CAPABILITIES 4 FINANCIALS 5 OUTLOOK 3
Slide 22: Q4 & FY-22 Highlights
Q4 & FY-22 HIGHLIGHTS
Slide 23: Management Speak
Management Speak SUCHETH DAVULURI “The past financial year was marked by a flat revenue, owing principally to weak GDS offtake from our customers. Given our focus on building execution excellence, we remain confident about the long-term prospects of all our businesses despite facing certain technica
Slide 24: Key Highlights FY22
Key Highlights FY22 Business Highlights Financial Highlights ❖ Growth from development projects ❖ Total income was Rs. 953.2 crore in was offset by Inventory destocking and FY22, as compared to Rs. 953.0 in lower offtake at customers’ end crore in FY21* ❖ Focus on creating execution & project ❖ EBIT
Slide 25: Key Highlights Q4 FY22
Key Highlights Q4 FY22 Business Highlights Financial Highlights ❖ In Prime segment, Mirtazapine, ❖ Total income was Rs. 256.5 crore in Labetalol & Levofloxacin performed Q4FY22, a decrease of 1.1% YoY* well. ❖ EBITDA margin decreased by 10 bps ❖ Specialty had a decent growth quarter from 15.4% to 15
Slide 26: Profit & Loss Snapshot (Standalone)
Profit & Loss Snapshot (Standalone) YoY QoQ YoY Particulars (Rs. Cr) Q4FY22 Q3FY22 Q4FY21 FY22 FY21 (%) (%) (%) Total Income 256.5 238.4 7.6% 259.3* (1.1) % 953.2 953.0* 0.0% EBITDA 39.3 34.2 15.1% 40.0 (1.7)% 144.3 162.5 (11.2)% EBITDA Margin 15.3% 14.3% 100 Bps 15.4% (10) Bps 15.1% 17.1% (200) Bps
Slide 27: Financials (Standalone)
Financials (Standalone) Revenue (Rs. Cr) 953 * 953 EBITDA (Rs. Cr) and EBITDA Margin (%) 258 257 238 180 163 16.7% 203 43 39 17.1% 160 15.3% 144 13.6% 14.3% 34 140 15.1% 28 120 100 80 Q1FY22 Q2FY22 Q3FY22 Q4FY22 FY21 FY22 60 Certain items classified as revenue in Q1 &Q3 have been reclassified as exp
Slide 28: Key Operating Metrics
Key Operating Metrics YoY Analysis Quarter on Quarter Movement 4% 3% 4% 4% 3% 5% 28% 22% 30% 27% 28% 40% 22% 22% 23% 24% 25% 20% 53% 47% 43% 45% 43% 36% FY 21 FY 22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Prime Speciality CMS Others 10
Slide 29: Business Salience (Overall Company)
Business Salience (Overall Company) PRODUCT YoY Analysis QoQ Movement 64% 54% 58% 60% 61% TOP 10 57% TOP 5 40% 39% 43% % of Total revenue 42% 38% 41% FY 21 FY 22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 CUSTOMER YoY Analysis QoQ Movement 52% 53% 54% 53% 49% 47% 36% 41% 36% 37% 41% 39% FY 21 FY 22 Q1 FY22 Q2
Slide 30: Business Salience (Prime)
Business Salience (Prime) Q1 Q2 Q4 FY-21 47% FY-22 43% Q3 53% FY22 45% 36% FY22 43% FY22 FY22 PRODUCT YoY Analysis QoQ Movement 96% 95% 97% 92% 98% 92% TOP 10 TOP 5 (of Prime revenue) 78% 74% 73% 71% 70% 67% FY 21 FY 22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 CUSTOMER YoY Analysis QoQ Movement 63% 59% 60% 6
Slide 31: Business Salience (Specialty)
Business Salience (Specialty) Q1 Q2 Q3 Q4 FY-21 22% FY-22 24% 22% FY22 23% 20% 25% FY22 FY22 FY22 YoY Analysis QoQ Movement TOP 10 PRODUCT TOP 5 83% 82% 91% 91% 89% 86% (of Specialty Revenue) 57% 60% 66% 64% 67% 61% FY 21 FY 22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 CUSTOMER YoY Analysis QoQ Movement 56% 6
Slide 32: Business Salience (CMS)
Business Salience (CMS) Q1 Q2 Q3 Q4 FY-21 28% FY-22 30% 22% FY22 27% 40% 28% FY21 FY22 FY22 PRODUCT YoY Analysis QoQ Movement TOP 10 99% 99% TOP 5 97% (of CMS revenue) 82% 85% 80% 92% 75% 71% 83% 84% 61% FY 21 FY 22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 CUSTOMER YoY Analysis QoQ Movement 99% 99% 97% 89% 8
Slide 33: Key Operating Metrics – CMS Revenue Split
Key Operating Metrics – CMS Revenue Split Rs. In Cr Commercial Development YoY Analysis Quarter on Quarter Movement 282 269 114 95 136 70 72 38 44 14 38 168 133 23 56 57 34 21 FY21 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 15
Slide 34: Number of Active CMS Projects
Number of Active CMS Projects Q4 FY22 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 14 3 7 7 8 8 47 Intermediate 7 5 2 0 8 12 34 Grand Total 21 8 9 7 16 20 81 Q4 FY21 Pre-Clinical P-1 P-2 P-3 Development Commercial Grand Total API 15 3 7 3 12 6 46 Intermediate 7 4 2 0 8 11 32 Grand
Slide 35: Business Overview
BUSINESS OVERVIEW
Slide 36: Our Journey – Key Milestones
Our Journey – Key Milestones Laying Strong Foundation Deepening Our Capabilities Increased Sustainable Growth 1984 - 2003 2004 - 2012 2013 - Today Successfully 1984 1986 1994 1997 2004 2007 2008 2009 cleared 15 USFDA Incorporated First API sale of Neuland First USA Japan R&D Centre PMDA, Japan inspe
Slide 37: Generic Drug Substance (GDS)
Generic Drug Substance (GDS) We started as a Prime API ..Added Speciality molecules for manufacturer… complex products.. Capability Capability ✓ 3 US FDA and EU GMP compliant ✓ High end complex chemistry capabilities manufacturing facilities ✓ Backend support by R&D department ✓ Collective capacity:
Slide 38: On path to being a preferred partner in CMS..
On path to being a preferred partner in CMS.. Services ✓ Manufacturing API to customer specifications ✓ Designing and developing manufacturing processes ✓ Process optimization for competitiveness ✓ Complete CMC partner for the API ✓ Patent protection for processes Business Approach ✓ Local presence
Slide 39: Capabilities
CAPABILITIES
Slide 40: Scaled up Manufacturing Facilities over the years
Scaled up Manufacturing Facilities over the years UNIT-1 233 KL Bonthapally, Hyderabad UNIT-2 363 KL Pashamylaram, Hyderabad UNIT-3 305 KL Gaddapotharam, Hyderabad Year of 1986 1994 2017* Establishment Block - 1, 2, 3, 4, H, KL & S 34 Block-1, 2, 3, FC, NMSM, Mini Block - 1, 2, 4, 5 Blocks plant6 Hy
Slide 41: Backed up by sound R&D capabilities
Backed up by sound R&D capabilities R&D Facility, Hyderabad Infrastructure Significant R&D Achievements • 15 Development Labs with space for • Several NCE APIs added in NDA or commercial stage expansion drugs • 60 Fume hoods • Support for multiple APIs each year in Phase 2 • Analytical Labs and Phas
Slide 42: New capabilities built
New capabilities built FBRM HAZARDOUS & WET LABORATORY Dedicated area Particle size for hazardous check for chemical polymorph management achievement and wet lab expansion PEPTIDE LAB PID LABORATORY, To address 9800 sq. ft. new UNIT-III product quality lab with issues, additional 7 impurities hoods
Slide 43: Global Presence
Global Presence NORTH AMERICA EUROPE APAC 37% 42% 5% JAPAN MENA INDIA 4% 5% 4% BD Office in LATAM Princeton, New Jersey 4% Since 2004 Our BD Office in JAPAN Since 2007 % Refers to FY22 Sales by End market 25
Slide 44: Regulatory Filings Across Geographies
Regulatory Filings Across Geographies 30 Filings with Health Canada 10 20 Japanese DMF filed China DMF filed 62 DMFs with USFDA 19 231 filings with 22 ROW filings including Turkey, KFDA Korea filings with TGA Mexico, Brazil etc ~495 27 EUDMF filings across Germany, CEPs Received for different 916+ F
Slide 45: Financials
FINANCIALS
Slide 46: Continuous Growth…
Continuous Growth… Rs. In Cr FINANCIAL PERFORMANCE 163 HIGHLIGHTS 953 953 144 767 ▪ Revenue CAGR of 12.5% for FY 19-22 led by growth in all 3 businesses 670 105 80 ▪ EBITDA growth of 33.0% CAGR in FY 19-22 due to balanced contribution 61 from both GDS and CMS business 64 16 16 ▪ Shift to CMS and Spe
Slide 47: Stable Balance Sheet..
Stable Balance Sheet.. Particulars Mar-19 Mar-20 Mar-21 Mar-22 Current Ratio (x) ROCE (%) (Rs. Cr) 1.57 11.93 Shareholders 1.47 8.55 696 706 782 836 1.37 1.42 7.60 ' funds 3.89 Net Debt 194 214 152 212 2019 2020 2021 2022 2019 2020 2021 2022 Investments 8 8 7 4 Fixed Asset Turnover (x) Debt to Equit
Slide 48: Outlook
OUTLOOK
Slide 49: ..Laying Foundation for our Growth Strategy
..Laying Foundation for our Growth Strategy CREATE AN ORGANIZATION THAT RESULTS IN VALUE FOR ALL STAKEHOLDERS BUSINESS SCALE Extend capabilities to Invest into capacity to organically build a augment sales and sustainable GDS accelerate business and CMS business growth CHEMISTRY RELATIONSHIPS Deploy
Slide 50: Contact Us
Contact Us For over 38 Years, Neuland Laboratories Ltd. For further information contact (BSE:524558, NSE: NEULANDLAB) has been at the forefront of manufacturing APIs through its cGMP manufacturing facilities, working with customers in close IR Desk to 80 countries. Neuland Labs Neuland Labs has deve
Slide 51: Thank You
I _/{ NEULAND WH ER.E OPPORTUNITY BECOMES REALITY Thank You Confidential. © 2021 Neuland Laboratories Ltd. All rights reserved.