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Creating Lasting Value

Creating Lasting Value. Investor Presentation June 2009. Disclaimer.

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Creating Lasting Value

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  1. Creating Lasting Value Investor Presentation June 2009 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 as “will”, “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.

  3. Revenue Composition 2008-09 Annual sales : Rs 43,751 million, 5 year CAGR 33% US Generics 5 year CAGR 47% India Branded Generics 5 year CAGR 28% International (ex-US)‏ Generics 5 year CAGR 42% Finished Dosage sales 89% 5 year CAGR 35% International sales 53% 5 year CAGR 43% API 5 year CAGR 20% 2008-09 Consolidated

  4. Strategy and Approach Create sustainable revenue 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 Optimise operational costs Balance profitability and investments for future Acquisitions yielding high ROI Development of complex generics

  5. Growing Steadily Revenue doubles and Net profit triples in 4 years; continuing the trend despite increasing size Prior to 01-02 Standalone; rest consolidated

  6. Sustained Profitability Superior business model Margins consistently higher than peers * Gross Margin gap EBITDA Margin gap Net Margin gap Gross margin= (Net Sales – Material Cost) / Net Sales * 100 • Other top 10 Indian Pharma companies include Ranbaxy, DRL, Cipla, Piramal Healthcare, Lupin, Wockhardt, Cadila, Aurobindo, Glenmark and Torrent

  7. Successful At Acquisitions Acquired 14 high potential yet under-performing businesses*; successful turnarounds 8 early acquisitions * Includes companies, plants or brands

  8. Business Operations Investor Presentation

  9. India Branded Generics : Strong Base Market share 3.5% Leadership in chronic segment; top 3 in over 50% of more than 450 brands No “blockbuster” risk : Top 10 brands contribute 26% of sales

  10. Relentless Customer Focus Therapy focused marketing by 2500 sales representatives covering 125,000 specialist doctors Strong increase in prescription and sales market share Ranks based on prescription share 1998 Market Share indexed to 100 for all companies

  11. US Generics : The highest priority market • Integrated generic manufacturer with flexibility for manufacture onshore / offshore • Caraco, the 76% owned US generics subsidiary, markets own and Sun Pharma ANDAs

  12. ANDA Pipeline : Significant ramp up • As of Mar 09, ANDAs for 108 products await approval (including 7 tentative approvals)‏ • 83 products from Sun Pharma (with 3 tentative approval)‏ • 25 products from Caraco (with 4 tentative approval)‏

  13. 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 Hungary with controlled substance capacity

  14. International Branded Generic Markets Less Regulated Markets Product basket width and technology based products as growths Replicating the speciality template 30 countries, 1600 products registered and 1000 awaiting registration 400 strong local sales force promotes brands to doctors Focus countries / regions : CIS, China, South-east Asia, South Africa, Brazil, Mexico

  15. Speciality API High Margin Regulated Markets Business largely with end users in regulated markets Over 150 speciality APIs across 7 plants Strong regulatory capability 129 DMF / CEP approved or awaiting approval

  16. Finished Dosage Manufacturing 10 manufacturing sites compliant with international regulatory standards India : 5, US : 3 Over 750,000 sq. ft. area Capacities available for a variety of finished dosage

  17. 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 • Panoli and Ahmednagar (both India)‏ • International regulatory approvals: USFDA, European • Stand alone units for peptides, anticancers, steroids sex hormones • Hungary & Tennessee (US) • Controlled substances manufacture

  18. Research & Development Investor Presentation

  19. Research and Development • Generic R&D spend around 8% of net sales • Strong research teams in generics, finished dosage development, biological support, chemistry • Balancing the risk • Immediate term : ANDA, DMF, Products for India • Medium term : Drug delivery systems • 2 R&D centers with over 500 scientists

  20. Financial Highlights Investor Presentation

  21. Financials Rs million Market capitalisation Rs. 250 billion / USD 5 billion* Consolidated *Exchange Rate, 1 USD = Rs. 51

  22. Financial Ratios

  23. Guidance for FY10 • Sales to grow by 13-15%, at constant exchange rates • R&D Spend at 7-8% of Net Sales • File ANDAs for 30 products • Capex at Rs. 1.7 billion

  24. For updates and specific queries, please visit www.sunpharma.com or feel free to contact In addition to Company data, data from IMS – ORG, CMARC, Stock Exchanges and industry publications has been used for this presentation. Thank you Uday Baldota Tel : +91 22 6645 5645, Ext 605 Tel Direct : +91 22 66455605 Mobile : +91 98670 10529 uday.baldota@sunpharma.com Mira Desai Tel : +91 22 6645 5645, Ext 606 Tel Direct : +91 22 66455606 Mobile : +91 98219 23797 miradesai@sunpharma.com Investor Presentation

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