spil nov-09 ir presentation usd

8/14/2019 SPIL Nov-09 IR Presentation USD

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Sun Pharmaceutical Industries Limited

Corporate Office: Acme Plaza, Andheri Kurla Road, Andheri (E), Mumbai - 400 059.

Tel: 91-22-66969696 Fax: 91-22- 28212010 www.sunpharma.com

Creating Lasting Value

Investor PresentationNov 2009


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Creating Lasting Value - Investor Presentation 2

Disclaimer

Except for the historical information contained herein, statements in this presentation

and the subsequent discussions, which include words or phrases such aswill,aim,

will likely result,would,believe,may,expect,will continue,anticipate,

estimate,intend,plan,contemplate,seek to,future,objective,goal,

likely,project,should,potential,will pursue and similar expressions or

variations of such expressions may constitute "forward-looking statements". These

forward-looking statements involve a number of risks, uncertainties and other factors

that could cause actual results to differ materially from those suggested by the

forward-looking statements. These risks and uncertainties include, but are not limited

to our ability to successfully implement our strategy, our growth and expansion plans,

obtain regulatory approvals, our provisioning policies, technological changes,

investment and business income, cash flow projections, our exposure to market risks

as well as other risks. Sun Pharmaceutical Industries Limited does not undertake any

obligation to update forward-looking statements to reflect events or circumstances

after the date thereof.


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Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations

GeographiesAPI, FinishedDosage &Manufacturing

Research &Development

Management& Governance

Financials

2

3

4

5


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5/44Creating Lasting Value - Investor Presentation5

Revenue Composition

45%

35%9%

11%

India

Branded Generics

5 Year CAGR 25%

US Generics

5 Year CAGR 47%

APIs5 Year CAGR 20%

International Branded

Generics (ex-US)5 Year CAGR 42%

Finished Dosagesales 89%5 year CAGR 34%

Internationalsales 53%5 year CAGR 43%

2008-09 Annual sales : USD 954 million

5 Year CAGR 32%


6/44Creating Lasting Value - Investor Presentation6

Creating Value, Continuously

1983

Began with5 products

1993

First Research CentreSPARC, Baroda

1994

IPO - Rs. 550 Mnraised

1995

First APIPlant Panoli

1997

Went Global,$7.5Mn investedin Caraco

2004

USD 350mnFCCB raised

2007

Demergerof innovativeR&D to SPARC

The growth continues

2009

5 Key operatingsubsidiaries8,000+ Employees

Invested Rs. 16 Bn.in Research

19 Manufacturing plants in3 Continents

More than 50% of sales from international markets

PART OFSun Pharma Today

83 09


7/44Creating Lasting Value - Investor Presentation 7

Key Operating Subsidiaries

Caraco Pharmaceutical

Laboratories

Develops, manufactures, market

and distributes generic andprivate label pharmaceuticals

and markets them throughout

the United States.

Chattem

Chemicals, Inc.

Narcotic raw material

importer and manufacturerof controlled substances

with a facility in Tennessee,

US

Sun Pharmaceutical Industries Limited

Sun Pharmaceutical

(Bangladesh)

Owns and operates a pharmaceutical factory and

makes pharmaceutical products that are sold in

the local market.

Sun Pharmaceutical

Industries, Inc. (SPI)

US based wholly owned subsidiary

of Sun Pharmaceutical IndustriesLimited, India.

Alkaloida Chemical

Co. Exclusive Group Ltd

ICN Hungary acquired in 2005, now renamed;

one of the few units worldwide, authorized to

make controlled substances



Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

34

5



Strategy and Approach

Create sustainablerevenue streams

Focus: Chronic therapies

Differentiation: Technically

complex products

Speed to market

Seek cost leadership

Vertical integration :

Development through

Manufacturing (API and

Finished Dosage) to Marketing

Optimize operational costs

Balance profitability andinvestments for future

Acquisitions yielding high ROI

Development of complex generics


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Growing SteadilyConsistent top-line and bottom-line growth;

continuing the trend despite increasing size

Net Sales Net Profit

127

32160

96-97 97-98 98-99 99-00 00-01

264

88300

00-01 01-02 02-03 03-04 04-05

95

9323961

,100

04-05 05-06 06-07 07-08 08-09

450


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Sustained ProfitabilitySuperior business model

Margins consistently higher than peers*

-20%

-10%

0%

10%

20%

30%

40%

50%

04-05 05-06 06-07 07-08 08-09

44% 43%

-20%

-10%

0%

10%

20%

30%

40%

50%

04-05 05-06 06-07 07-08 08-09

80%

40%

50%

60%

70%

80%

04-05 05-06 06-07 07-08 08-09

85%Gross Margin EBITDA Margin Net Margin

Sun Pharma Range of other Top 10 Pharma Cos. AverageGross margin= (Net SalesMaterial Cost) / Net Sales * 100

* Other top 10 Indian Pharma companies include Ranbaxy, DRL, Cipla, Piramal Healthcare, Lupin,

Wockhardt, Cadila, Aurobindo, Glenmark and Torrent


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Successful At AcquisitionsAcquired 14 high potential yet under-performing businesses*; successful

turnarounds

Net Sales (MINR) Operating Margin(%) Operating Profit (MINR)

0

50

100

150

200

250

95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-040

9

18

27

36

45

8 Early Acquisitions


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Key Acquisitions & Rationale

Year Acquisitions Country Rationale

2008 Acquired Chattem Chemicals, Inc. Tennessee, USImport registration with DEA, API Plantapproved by DEA in Tennessee, US

2005 Assets of Able labs New Jersey, US Dosage form plant (NJ, US) and IP

2005 Formulation plant in Bryan Ohio, US Dosage form plant (Ohio, US)

2005 Acquired ICN Hungary Hungary API and dosage form plant (Hungary)

2004 Womens Health Brands US Brands in womens health (US)

2004 Merged Phlox Pharma Baroda, India API Plant

2000Merged Pradeep DrugCompany Ltd (PDCL)

Chennai, India API Plant

1999 Merged Milmet Labs India Ophthalmology brands

1998 Brands from Natco India Respiratory brands

1997 Acquired Caraco Detroit, US Dosage form Plant

1997Merged Tamilnadu Dadha

Pharmaceuticals Ltd (TDPL)Chennai, India

Gynecology and oncology brands; API

and dosage form plant

1996 Acquired MJ Pharma Halol, IndiaDosage form plant (now USFDAapproved)

1996 Acquired Gujrat Lyka Ankleshwar, India API plant

1996 Bulk Drug plant from Knoll Pharma Ahmednagar, India API plant (now USFDA approved)


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Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

34

5


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India Branded Generics : Strong Base

Market Share3.6%

Leadership in chronic

segment;

Top 3 in over 50% of more

than 500 brands

Neuro-Psychiatry

29%

Cardiology

20%Diabetology

11%

Gastroenterology

11%

Gynaecology &

Urology - 7%

Musculo-Skeletal

& Pain - 4%

Antiasthamatic &

Antiallergic4%

Ophthalmology - 4%Others10%

Therapywise Break-up


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Relentless Customer Focus

60

100

140

180

220

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sun Ranbaxy

Nicholas Cadila Dr. Reddy

Cipla

1998 Market Share indexed to 100 for all companies

Therapy focused marketing

2,500+ sales representatives

covering 130,000 specialist doctors

Strong increase in

prescription and

sales market share


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Therapy Focused MarketingDelivering promotional message to specialty customers.

Cardiology, DiabetologyGastroenterology,

Orthopedics

Oncology

Rheumatology,Dermatology

Asthma,COPD

InterventionalCardiology

Fertility, Gynecology,Urology

Psychiatry, Neurology GynecologyOphthalmology


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Well diversified growth Growth not dependent solely on launch of new products

Over 60% of growth from products launched prior to 2005

(20%)

0%

20%

40%

60%

80%

Dr Reddy's Lupin Cipla Piramal Ranbaxy Cadila Sun

Source: ORG IMS, Nomura Research


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No Blockbuster Risk

Top 10 brands contribute 21% of sales

Top 50 brands contribute 55% of sales growth

0%

20%

40%

60%

80%

100%

Ranbaxy Dr Reddy's Cipla Cadila Piramal Sun Lupin

Other products Top 50 productsSource: ORG IMS, Nomura Research


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US Generics

Integrated generic manufacturer

with flexibility for manufacture

onshore / offshore

The 76% owned US generics subsidiary,

markets own and Sun Pharma ANDAs

Sun Pharmaceutical

Industries, Inc. (SPI)

Caraco Pharmaceutical

Laboratories Ltd.

A wholly owned subsidiary of

Sun Pharma in US

ApprovalsTherapy wise summary

Endocrine, 1

Gastro, 1

Urology, 1

Allergy, 2

Antibiotic, 2

Cough / Cold, 3

Metabolism, 6

Oncology, 10

CVS, 12

Pain, 13

CNS, 28


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ANDA Pipeline : Significant ramp up

Products filed and Approved Status

As of Sep 09, ANDAs for 108products await approval

(including 10 tentative approvals)

81 Products pending

(with 6 tentative approval)

Sun Pharma

27 Products pending

(with 4 tentative approval)

Caraco

40

59

95

142

176

187

1520

29

53

69

79

0

50

100

150

200

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Sep-09

Cumulative Products Filed Cumulative Products Approved


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US Generics

Bethanechol Chloride Tabs

Bicalutamide Tablets

Caffeine Citrate Injection

Caffeine Citrate Oral Solution

Carbidopa Levodopa Tablets

Carbidopa Levodopa OD Tablets

Cephalexin Capsules

Gemfibrozil Tabs

Hydrocodone APAP Tabs

Ketorolac Tromethamine Injection

20 ANDA Approvals in last 12 months

Leuprolide acetate Injection

Oxaliplatin for Injection

Oxycodone HCl Tabs

Pamidronate Disodium for Injection

Promethazine HCl Oral Solution

Promethazine HCl Tabs

Quinapril Tablets USP

Sumatriptan Succinate Tablets

Topiramate Tablets

Vecuronium Bromide for Injection


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Caraco Update

On Sept 29, 2009 Caraco entered into a Consent decree with FDA

Decree provides a series of measures that, when satisfied, will permit Caraco to

resume manufacturing and distributing Caraco has retained independent cGMP experts for review of the Company's

operations and to facilitate a successful result

Caraco's cessation of manufacturing operations will continue until it receives

written notification from independent experts and the FDA

Earlier, Caraco reduced its workforce by 430 employees for anindefinite period to align its expenses with the cessation of its

manufacturing operations

i k


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Europe Generic Markets

Plan to enter key markets

Working on complex generic

products, including injectables

Filings from Indian site

Acquired an API and Finished Dosage

manufacturing company in Hungarywith controlled substance capacity

Focus Countries

I t ti l B d d G i M k t


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International Branded Generic Markets

Less Regulated Markets

Product basket width and

technology based products as

growth drivers

Replicating the speciality template

30+ countries, 1600 products registered

and 1000 awaiting registration

400 strong local sales force promotes

brands to doctors

CIS Countries

China

Sri Lanka

Map Not to Scale

Mexico

South AfricaOther Markets

Focus Markets

Brazil

Myanmar

P d t R i t ti


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Product RegistrationsExtending products and brands to newer territories

1409

2004

2662

980

1262

1646

0

500

1000

1500

2000

2500

3000

Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

Products Filed Products Registered

S i lit API


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Speciality API

High Margin Regulated Markets

Business largely with end users inregulated markets

Over 160 speciality APIs across 8 plants

Strong regulatory capability

144 DMF / CEP approvedor awaiting approval

84 approved

St ong Reg lato Capabilit


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Strong Regulatory CapabilityInternational level quality processes and documentation

75

90

133

3340

81

0

50

100

150

Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

DMF/CEP Filed DMF/CEP Approved

Manufacturing Locations


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Manufacturing LocationsPlants across four continents enables us to compete with a tight

handle on cost and time to market across the geographies

Jammu

Ahmednagar

Maduranthakam

BangladeshPlant

Sikkim Plant

Americas

Cranbury

Detroit

Bryan

Tennessee

Goinia(Brazil)

Iztapalapa(Mexico)

Tiszavasvari(Hungary)

Europe

API and Formulations API Formulations

Halol

Ankleshwar

Panoli

DadraSilvasa

Karkhadi

India

Finished Dosage Manufacturing


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Finished Dosage Manufacturing

13 Manufacturing sites

worldwide

India : 6, US : 3

Over 750,000 sq. ft. area

Capacities available for a variety of

finished dosage

Tablets /

Capsules

Semisolids

Liquides

Suppository

Injectables / Sterile

Vials Dry powder

Ampoules Eye drops

Pre-filled Syringes MDI

Gels Aerosols

Lyophilized Units

API Manufacturing


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API Manufacturing

8 World class locations with all sites

ISO 14001, ISO 9002 approved India : 6, US : 1, Hungary : 1

Reactor capacity 1200 KL with over

650,000 sq ft area

Over 25 API processes

scaled up annually

APIKey Plants

Panoli & Ahmednagar(both India) International regulatory

approvals: USFDA, European

Stand alone units for

peptides, anticancers,

steroids, sex hormones

Hungary &

Tennessee (US)

Controlled substances

manufacture

Agenda


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Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

3

4

5

Research and Development


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Research and Development

Generic R&D spend around 8% of net sales

Strong research teams in generics, finished

dosage development, biological support,chemistry

2 R&D centers with about 600 scientists Mumbai

Balancingthe risk

Medium term

Drug delivery systems

Immediate term

ANDA, DMF, Products for India

Baroda

R&D Infrastructure


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Pharmacokinetics

Clinical Research

Analytical Method

DevelopmentFormulation

Development

Organic Synthesis

State of the art

research Labs

R&D Infrastructure

Baroda

16 acre campus with nearly

330,000 sq. ft research area

Mumbai

50,000 Sq. ft research campus

Develops Dosage forms and

generics for US, Europe

Worldclass equipment for instrumental, chemical and

microbiological analysis; Equipment include: NMR, XRD,

LC-MS/MS, HPLCs etc.

Agenda


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Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

3

4

5

Corporate Governance


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Corporate Governance

Our philosophy on corporate governance envisages

working towards high levels of transparency,accountability and consistent value systems across

all facets of operations

Committee chaired by Keki Mistry

comprises Hasmukh Shah and

S. Mohanchand Dadha

Audit ComitteeEminent Independent Directors

Hasmukh Shah

Chairman Gujarat Gas

Former Chairman and

Managing Director, IPCL

Keki Mistry

Managing Director,

HDFC

S. MohanchandDadha

Former Chairman &

Managing Director, TDPL

Ashwin DaniVice Chairman and

Managing Director,

Asian Paints Ltd.

Agenda


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Agenda

Revenue

Composition

1

Strategy &Approach

History &Profile

Growth

KeyAcquisitions

BusinessOperations




Financials

2

3

4

5

Shareholding Pattern


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Shareholding Patternas on Sept 30, 2009

Rs 1,000 Invested in

the 1994 IPO is

currently worth morethan Rs. 120,000.

Earned dividend of

Rs. 4,000Mutual Funds3%

Promoter andpromoter group

64%

Bodies Corporate5%

Individuals and Others6%

Financial Inst / Banks3%

FIIs / Foreign Banks19%

Financials


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FinancialsMarket capitalization USD 6 billion* Figures in USD million

2004-05 2005-06 2006-07 2007-08 2008-09

P&L Summary

Net Sales 264 370 472 833 932

Gross Profit 192 260 344 654 745

EBITDA 93 111 148 385 407

Net Profit 88 129 173 369 396

R&D Spend 32 45 62 74 72

Fully Diluted EPS (USD) 0.5 0.6 0.9 1.8 1.9

BS Summary

Shareholders Funds 258 356 636 1,249 1,393

Loan Funds 417 420 256 36 35

Net Fixed Assets 142 201 232 276 320

Investments 148 79 58 189 368

Cash and Bank Balances 270 344 317 310 330

Inventories 73 115 152 193 193

Sundry Debtors 57 81 156 355 174

Sundry Creditors 24 25 22 60 50

Cash Flow Summary

Net Cash from Operating Activities 84 42 53 125 472

Net Cash used in Asset Creation Activities 37 76 44 50 129

*Exchange Rate : 1 USD = Rs 48

Financial Ratios


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Financial Ratios

2004-05 2005-06 2006-07 2007-08 2008-09

Growth (%)

Net Sales 25.5 38.1 30.5 57.1 27.3

Gross Profit 22.2 33.3 35.7 69.0 29.6

EBITDA 5.9 17.9 36.8 130.7 20.2

Net Profit 25.5 44.7 36.8 89.6 22.2

Margins (%)

Gross Margin 72.7 70.2 73.0 78.5 79.9

EBITDA Margin (%) 35.2 30.0 31.5 46.2 43.6

Net Margin 33.4 35.0 36.7 44.3 42.5

Return (%)

Return on Average Capital Employed 20.0 18.5 22.4 33.0 29.4

Return on Average Net Worth 48.6 45.6 37.0 38.3 30.2

Others

Debt / Equity 1.61 1.18 0.40 0.03 0.03

R&D Spend % of Net Sales 12.0 12.3 13.0 8.9 7.8

Revenue 8.5 9.4 11.4 8.5 0.5

Capital 3.5 2.9 1.6 0.4 7.3

Q2 and H1 FY10 Update


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Q p

Q2 FY10 Q2 FY09* Change H1 FY10 H1 FY09* Change FY 0809

Net Sales 245.1 243.6 0.6% 407.0 457.9 (11.1%) 931.8

Gross Profit 186.0 187.0 (0.5%) 294.4 362.4 (18.8%) 744.9

Gross Margin 75.9% 76.8% 72.3% 79.1% 79.9%

EBITDA 92.5 111.3 (16.9%) 111.8 222.0 (46.5%) 406.5

EBITDA Margin 37.7% 45.7% 29.2% 48.5% 43.6%

Net Profit 93.9 106.1 (11.5%) 127.4 209.2 (39.1%) 396.5

Net margin 38.3% 43.5% 31.3% 45.7% 42.5%

R&D 12.8 18.3 (29.7%) 28.7 33.6 (14.4%) 72.4

R&D as % of Net Sales 5.2% 7.5% 7.1% 7.3% 7.8%

EPS (Diluted) INR 0.5 0.5 (11.5%) 0.6 1.0 (39.1%) 1.9

Figures in USD million

International sales are 56% and India sales at 44% of total sales

*Exchange rates taken as per the recent corresponding period

Taro Update


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p

Latest

Background

Taro sent Sun Pharma a notice for purported termination of the merger agreement

saying US $10.25 per share, was too low in view of the dramatic turnaround

Sun Pharmas cash injections of approx. $60 million last year was a major factor,

otherwise Taro would have virtually negative cash

On Aug 27 2008, Tel-Aviv Court rejected Taros contention that Sun Pharma should

have conducted a special tender offer under Israeli Law

Taro appealed this decision in the Supreme Court, a decision on which is awaited


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For updates and specific queries, please visit www.sunpharma.com

or feel free to contact

Uday Baldota

Tel : +91 22 6645 5645, Ext 605

Tel Direct : +91 22 66455605

Mobile : +91 98670 10529

[email protected]

Mira Desai

Tel : +91 22 6645 5645, Ext 606

Tel Direct : +91 22 66455606

Mobile : +91 98219 23797

[email protected]

2009 Sun Pharmaceutical Industries Limited., All Rights Reserved.SUN Pharma, The Sun Pharmaceutical Industries Logo are trademarks of Sun Pharmaceutical Industries Limited.

In addition to Company data, data from IMSORG, CMARC, Stock Exchanges and industry publications has been used for this presentation.

All rupee reported financial numbers used in this presentation pre-2003 are converted into USD at exchange rate prevailing in 2003 and post-2003 financials are converted at

the prevailing exchange rates in respective years/quarters (Except Market Cap) for the convenience of the readers.

This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred, adapted, abridged, copied or

reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and company names and logos mentioned

herein are the trademarks or registered trademarks of their respective owners.

spil nov-09 ir presentation usd

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