Sun Pharmaceutical Industries Limited · NSE:SUNPHARMA

Sun Pharmaceutical Industries — Investor Presentation (September 2017)

56 slides from Sun Pharmaceutical Industries's investor presentation, September 2017

  1. Slide 1: Creating Lasting Value

    Creating Lasting Value Investor Presentation – September 2017 NSE:SUNPHARMA | BSE:524715 | Bloomberg:SUNP IN | Reuters:SUN.BO WWW.SUNPHARMA.COM

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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 (151 ANDAs & 5 NDAs awaiting Leading position in high growth chronic therapies approval) Specializes in technically complex

  7. 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

  8. Slide 8: Our Specialty Initiatives

    Our Specialty Initiatives • In-licensed Tildrakizumab (a monoclonal antibody targeting IL-23) from MSD for treating chronic plaque psoriasis- Filed with US FDA and EMA for European market. • Acquired Ocular Technologies – Gives access to global rights for Seciera – for treating Dry Eye Disease. Anno

  9. Slide 9: Highly Diversified Revenue Base

    Highly Diversified Revenue Base Emerging Markets 15% Western Europe & Other Markets # 9% India Branded Formulations API & Others 26% 5% FY17 Sales Rs 302 billion US Formulations 45% # Includes Western Europe, Canada, Japan , Australia, New Zealand and other markets. © Sun Pharmaceutical Industries L

  10. Slide 10: Impressive Track Record of Growth

    Impressive Track Record of Growth (All Figures in INR Billion) 302.6 87.8 69.6 Adjusted 32.5 26.0 Sales EBITDA Net Profit 80.1 CAGR CAGR 7.8 CAGR 21.4 6.7 6.9 29% 1.9 29% 1.7 28% FY02 FY07 FY12 FY17 FY02 FY07 FY12 FY17 FY02 FY07 FY12 FY17 70.8 33.9 29.0 15.2 Operating Free Cash 10.8 Adjusted 22.3 Ca

  11. Slide 11: Consistent profitability and returns

    Consistent profitability and returns Gross Margin # EBITDA Margin Net Margin (adjusted) 83% 44% 45% 35% 82% 32% 75% 77% 73% 29% 29% 23% 27% 18% 19% FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 ROCE ROE Market Cap (USD Bn) 27% 27% 31% 35 26% 30 25 16% 19% 20% 14% 15% 18%

  12. 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% 75% 44% 45% 73% 41% 66% 35% 29% 33% 32% 63% 63% 29% 62% 62% 28% 61% 23% 22% 23% 20% 19% 19% 19% 18% 17% 14% 14% 12% 13% 10% 7% FY12 FY13 FY14 FY15 F

  13. 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 •

  14. 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

  15. 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% 27% 15% 16% 350 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 300 Taro Assets of: Dusa 250 URL Bryan Ranbaxy Hungary InSite Vision 200 Able Labs Ocular Tech Chattem Odomzo 150 100 50 - FY94

  16. Slide 16: US Business

    US Business 45% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16

  17. 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 584 ANDAs & 42 NDAs filed and 433 ANDAs & 37 Comprehensive Portfolio NDAs approved across

  18. Slide 18: 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 137 138 FY98-FY10 • Ramp-up in US business 135 • Launched many complex generics & FY08 onwards few FTFs • Acquired Taro Pharma – Entry into FY10 dermatology market 98 • A

  19. Slide 19: ANDA Pipeline - Significant ramp up

    ANDA Pipeline - Significant ramp up ANDAs Filed and Approved 433 ANDA Approvals by Therapeutic Area 597 584 584 105 572 103 478 449 438 427 433 413 397 344 63 311 250 46 30 28 21 15 12 10 Gastro Allergy Antibiotic CNS CVS Metabolism Other Skin Pain Oncology FY12 FY13 FY14 FY15 FY16 FY17 Jun-17 Cumul

  20. Slide 20: India Branded Generic Business

    India Branded Generic Business 26% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 20

  21. 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

  22. Slide 22: Largest Pharma Company in India

    Largest Pharma Company in India Market Share Branded Generic Sales in India as of 12 Months ended June 2017 (US$ in mn) Sun Pharma 8.6% 1,509 1,088 Abbott 6.2% 823 Cipla 4.7% 772 Zydus + Biochem 4.4% 648 Mankind 3.7% 609 Alkem + Cachet + Indchemie 3.5% 587 Lupin 3.3% 530 Glaxo 3.0% 501 Macleods 2.8%

  23. 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 Others 77 Opthalmology 2% 6% Cardiology 71 Respiratory 4% 19% 67 Vitamins / Minerals / Nutrients, 4% Gynaecology,

  24. 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 increased from 2.4% in 2000 to 8.1% in • Covering over 600,000* doctors 2016 (IMS Data for Dec’16) * Does not exclude ov

  25. Slide 25: Leadership in key therapeutic areas

    Leadership in key therapeutic areas* Number 1 Ranking with 11 Doctor Categories* Prescription Ranking Specialist June ’14 June ‘15 June ‘16 June ‘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 2

  26. Slide 26: Best-in-class field force productivity

    Best-in-class field force productivity Sales Per Representative (Rs. Mn) Field Force Productivity 11.1 11.0 10.1 Sun • Rs 8.3 Mn/ MR 9.2 Pharma 8.3 7.5 Industry 7.4 • Rs 5.2 Mn/ MR Average* * Approximation based on brokerage reports • Well trained and scientifically oriented sales representatives te

  27. Slide 27: Emerging Markets

    Emerging Markets 15% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 27

  28. 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

  29. Slide 29: Western Europe, Canada, Japan, ANZ & Other Markets

    Western Europe, Canada, Japan, ANZ & Other Markets 9% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29

  30. 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

  31. Slide 31: Global Consumer Healthcare Business

    Global Consumer Healthcare Business © Sun Pharmaceutical Industries Limited. All Rights Reserved. 31

  32. 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 • Core markets include. India, Russia, Romania, Nigeria, South Africa & Myanmar Market Focus • Growth markets include U

  33. Slide 33: Active Pharmaceutical Ingredients (API) Business

    Active Pharmaceutical Ingredients (API) Business 5% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33

  34. 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

  35. Slide 35: Research & Development

    Research & Development © Sun Pharmaceutical Industries Limited. All Rights Reserved. 35

  36. Slide 36: Research & Development

    Research & Development Cumulative R&D Spend of over Rs 100 billion to date • R&D spend at 7.6% of Net Sales for FY17 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 • 2

  37. Slide 37: R&D Investments

    R&D Investments R&D Investments Filings and Approvals 5.8% 5.6% 6.3% 6.5% 7.2% 8.3% 7.6% ANDA NDA/BLA DMF/CEP Patents 23.0 23.1 584 430 1023 42 19.6 433 751 289 10.4 7.0 36 4.4 3.3 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Filed Filed Filed Filed R&D Investments (Rs Bn) R&D Investments (% of Sales) As of J

  38. Slide 38: Global Manufacturing Presence

    Global Manufacturing Presence © Sun Pharmaceutical Industries Limited. All Rights Reserved. 38

  39. Slide 39: Global Manufacturing Presence

    Global Manufacturing Presence World Class Manufacturing Infrastructure • 41 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

  40. Slide 40: Global Manufacturing Footprint

    Global Manufacturing Footprint Tiszavasvari Haifa Penza (Hungary) (Israel) (Russia) Ontario (Canada) (US) Cluj (Romania) Billerica, MA Giza, (Egypt) New Jersey(US) Lagos (Nigeria) Kuala Lumpur Tennessee (Malaysia) Be-Tabs, South Africa) Cranbury Bangladesh Plant Port Fairy (Australia) Wilmington M.A

  41. Slide 41: Finished Dosage Manufacturing

    Finished Dosage Manufacturing 27 Finished dosage manufacturing sites • India : 13, US : 4 • 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 Topicals Tablets

  42. 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

  43. 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

  44. Slide 44: Financials

    Financials © Sun Pharmaceutical Industries Limited. All Rights Reserved. 44

  45. Slide 45: Financials

    Financials Market Capitalisation Rs. 1,207 billion / US$ 18 billion ( All Figures in Rs. Mn ) FY13 YoY FY14 YoY FY15* YoY FY16* YoY FY17* YoY P&L Summary Sales 1,12,389 40% 1,60,044 42% 2,72,451 70% 2,78,881 2% 3,02,642 9% Gross Profit 91,592 44% 1,32,250 44% 2,05,059 55% 2,15,577 5% 2,21,335 3% EBI

  46. Slide 46: Sales Break-up

    Sales Break-up In INR Billion In USD Million Sales 275 279 303 4,501 4,262 4,512 175 245 16 381 225 385 11 15 26 330 23 22 611 675 45 548 37 36 2244 2066 2051 138 137 135 71 77 1090 1093 1155 67 FY15 FY16 FY17 FY15 FY16 FY17 India Formulations US Formulations #Exchange Rate : US$1 = Rs 61.13 (for FY

  47. Slide 47: EBITDA Trend

    EBITDA Trend In INR Billion Sales 81 112 160 272 279 303 % of Sales 21% 19% 17% 25% 23% 27% 14% 13% 15% 16% 17% 16% 24% 25% 24% 30% 33% 28% 41% 44% 44% 29% 27% 29% FY12 FY13 FY14 FY15 FY16 FY17 EBITDA Other Expenditure Personnel Costs Material Costs © Sun Pharmaceutical Industries Limited. All Right

  48. Slide 48: Cash Flow

    Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 71 34 67 33 33 31 56 25 40 34 15 22 FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY16 FY17 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48

  49. Slide 49: Financial Ratios

    Financial Ratios FY13 FY14 FY15 FY16 FY17 Growth (%) Sales 40.4 42.4 70.2 2.4 8.5 Gross Profit 43.9 44.4 55.1 5.1 2.7 EBITDA 50.9 45.0 8.5 (2.1) 16.1 Net Profit 12.3 5.3 44.5 0.1 53.2 Net Profit (Adjusted) 34.3 # 58.7 # (15.6) # 9.5 # 33.1 Margins (%) Gross Margin 81.5 82.6 75.3 77.3 73.1 EBITDA Mar

  50. Slide 50: Key Financials Q1 FY18

    Key Financials Q1 FY18 ( All Figures in Rs. Mn ) Q1 FY18 Q1 FY17 CHANGE FY17 Gross Sales 61,667 80,067 -23% 3,02,642 Gross Profit 44,893 61,597 -27% 2,21,335 Gross Margin 73% 77% 73% EBITDA 10,535 26,714 -61% 87,751 EBITDA Margin 17% 33% 29% Net Profit -4,249 20,337 -121% 69,644 Net margin -7% 25% 2

  51. Slide 51: Sales Breakup Q1 FY18

    Sales Breakup Q1 FY18 ( All Figures in Rs. Mn ) Q1 FY18 Q1 FY17 CHANGE FY17 Formulation India 17,608 18,543 -5% 77,491 US 22,646 40,706 -44% 1,37,588 Emerging Markets 10,804 10,311 5% 45,299 ROW 7,424 5,625 32% 25,832 Sub-total 58,482 75,185 -22% 2,86,210 Bulk 3,089 4,698 -34% 15,979 Others 95 183 -

  52. 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

  53. 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

  54. Slide 54: FY18 Guidance

    FY18 Guidance Consolidated Revenues • Single digit decline over FY17 EBITDA • EBITDA Margin approximately 20%-22% for H2 FY18 R&D Investments • Approximately 9%-10% of revenues to be invested in R&D • Target US$ 300 million in synergy benefits from the Ranbaxy Ranbaxy Integration Synergy acquisition

  55. 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

  56. 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

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