Q3, FY 2010 - Torrent Pharmaceuticals Limited

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Torrent Pharmaceuticals Ltd
Investor Presentation
March 2010
Caveat
This information may contain certain forward-looking statements/ details in
the current scenario, which is extremely dynamic and increasingly fraught
with risks and uncertainties. Actual results, performances, achievements or
sequence of events may be materially different from the views expressed
herein. Investors/shareholders/public are hence cautioned not to place
undue reliance on these statements/ details, and are advised to conduct
their own investigation and analysis of the information contained or referred
to in this section before taking any action with regard to their own specific
objectives. Further, the discussion following herein reflects the perceptions
on major issues as on date and the opinions expressed here are subject to
change without notice. The Company undertakes no obligation to publicly
update or revise any of the opinions or forward-looking statements
expressed in this section, consequent to new information, future events or
otherwise.
Contents
1.
Performance Highlights
2.
Financials
3.
Business Segments
4.
–
India
–
International
Facilities – Expansion Plan
Q3 09-10 Highlights
• Revenue at Rs. 4801 Mn vs. Rs 4326 Mn
– Revenue growth of 11% on the back of sustained growth from major markets.
– International sales boosted by noticeable performance in US and Brazilian
operations.
• PBT at Rs. 966 Mn vs. Rs 529 Mn
– Growth of 83% fuelled by:
• Stable margins in Indian operations led by improved product mix and lower input
costs.
• Margin expansion in International operations on the back of higher volumes and
favorable currency movement.
Financials
Sales Progression
Particulars
India
Gwth %
International
Gwth %
Latin America
Germany (Heumann)
USA
Europe (excl Germany)
Rest of World
Russia & CIS
Contract Manufacturing
Gwth %
Total Sales
Gwth %
Rs. Mn
Q3
Q3
YTD Dec YTD Dec
09 - 10 08 - 09
09 - 10
08 - 09
1,820
1,584
5,599
4,861
15%
15%
2,386
2,172
6,811
5,856
10%
16%
813
607
2,242
2,018
661
787
1,951
1,872
269
80
665
159
274
287
786
712
266
229
819
600
103
182
348
496
417
437
1,392
1,162
-5%
20%
4,642
4,209
13,845
11,926
10%
16%
08 - 09
6,240
7%
7,970
38%
2,566
2,573
278
1,011
885
658
1,601
9%
15,865
21%
P&L
Particulars
Net Sales
Operating Income
Total Revenues
Cogs
% Revenues
SG&A Spend
% Revenues
R&D Spend
% Revenues
PBT
% Revenues
Tax
% PBT
PAT
% Revenues
PAT (Adj for MAT)
Rs. Mn
Q3
09 - 10
4,642
121
4,763
1,730
36%
1,663
35%
404
8%
966
20%
136
14%
830
17%
830
Q3
YTD Dec YTD Dec
08 - 09
09 - 10
08 - 09
4,209
13,845
11,926
115
499
326
4,324
14,344
12,252
1,677
5,161
4,695
39%
36%
38%
1,711
5,163
4,834
40%
36%
39%
408
1,208
1,139
9%
8%
9%
529
2,811
1,583
12%
20%
13%
22
1,091
101
4%
39%
6%
507
1,721
1,483
12%
12%
12%
451
2,249
1,324
•YTD 09-10 includes one time out-licensing income of Rs 15 crs in Q2 09–10
08 - 09
15,865
430
16,295
6,355
39%
6,474
40%
1,543
9%
1,923
12%
78
4%
1,844
11%
1,652
Balance Sheet
Particulars
SOURCE OF FUNDS:
Shareholders' Funds
Loan Funds
NET DEFERRED TAX LIABILITY
Rs. Mn
31.Mar.09
%
31.Dec.09
%
∆
6509
4826
584
55%
40%
5%
8273
4711
537
61%
35%
4%
11919
100%
13522
100%
1,603
5647
190
47%
2%
6153
190
46%
1%
507
-
2645
2666
344
1578
4656
22%
22%
3%
13%
39%
2897
3177
325
1066
4730
21%
23%
2%
8%
35%
251
511
(19)
(513)
74
NET CURRENT ASSETS
2577
22%
2734
20%
157
Cash, Bank & Current Investments
3504
29%
4444
33%
940
100%
1,603
TOTAL
APPLICATION OF FUNDS:
Net Fixed Assets
Long Term Investments
WORKING CAPITAL:
Inventories
Sundry Debtors
Other Current Assets
Loans & Advances
Less: Current Liab. & Prov.
TOTAL
11919
100%
13522
1,764
(115)
(47)
Business Segments
India
India
Highlights & Growth Drivers
India
Revenues
% Growth
Q3
09 - 10
1820
15%
Q3
YTD Dec YTD Dec
08 - 09
09 - 10
08 - 09
1584
5599
4861
15%
Rs. Mn
08 - 09
6240
7%
• Highlights
• Stable margins on the back of improved product mix coupled with lower input costs offset
by higher marketing spend.
• Continued improvement in quarterly sales growth.
08-09 Q1 : 1%; Q2 : 3%; Q3 12%; Q4 17% ----- 09-10 Q1 15%; Q2 15%; Q3 15%
• 60% of sales from Cardiac (Rank No. 1) and CNS (Rank No.3)
• Torrent growing at 21% vs. Covered Market growth of 19% on MAT Nov 09 basis
• Launched new division “Sensa” catering to Gynecology
• Growth drivers
• Building Specific Franchises
• Penetration into Tier I & Tier II to VI cities / rural markets
• Brand building thru increased Specialty Coverage & Creeping expansion in Customer Base.
• New Product Introductions & portfolio development
• Developing new TAs Respiratory & Derma.
Business Segments
International Operations
International Operations – Expanding Share
FY 05 - Turnover
Cont. Manf
18%
India
56%
ROW
7%
Europe (excl
Germany)
Russia
4%
3%
Brazil
12%
FY 09 - Turnover
Cont. Manf
10%
ROW
6%
USA
2%
India
40%
Germany
16% Europe (excl
Germany)
6%
Russia
4%
Growing share of International – up from 26% to 50%
Brazil
16%
Latam
Highlights & Growth Drivers
Brazil
Revenues
% Growth
Rs. Mn
Q3
Q3
YTD Dec YTD Dec
08 - 09
09 - 10 08 - 09 09 - 10 08 - 09
830
619
2286
2048
2605
34%
12%
46%
• Highlights
– Reai sales growth of 7% (volume growth 5%, new introductions 3%, price de growth of
6% due to price cuts on select products offset by price rise of 5%)
– Appx. 90% of sales from Cardiac and CNS.
– Largest Indian player in the Brazilian pharmaceutical market
• Growth Drivers
– Existing Products & Introduction of new products (40 new launches by 2013-14)
– Differentiated Products (1 product in pipeline to be launched by 2010-11)
– Entry into Mexico beginning FY 11
USA
Highlights & Growth Drivers
USA
Revenues
Rs. Mn
Q3
Q3
YTD Dec YTD Dec
08 - 09
09 - 10 08 - 09 09 - 10 08 - 09
278
82
689
165
289
• Highlights
– Higher top line due to
• Increased volumes from Citalopram, Risperidone, Zolpidem & Topiramate.
• Contributes nearly 80% of total sales.
• Market Share  Citalopram 27%, Risperidon ~ 10%, Zolpidem ~ 12%, Topiramate ~
8%
– 13 ANDAs approved till date. 2 ANDAs filed during the quarter.
• Growth Drivers
– Control over API costs with in house production.
– 27 ANDAs pending for approval & 35 ANDAs under development.
Germany - Heumann
Market Developments & Management Actions
• Market Developments
- Major healthcare reforms introduced in Jan 2004 and further reforms introduced in
July 2007
- Shift of power from Doctors / Pharmacies to Insurance Companies.
- Clout of Insurance companies has gone up with ability to do direct supply contract
with pharma companies at lower prices  Insurance companies and Pharmacists
drive market
- Market dynamics have changed completely compared with the time of acquisition due
to changes in regulatory environment
• Management Actions
– Business model restructured with minimum field force leading to variable cost driven
model with minimal fixed cost. (staff of 66 people after restructuring from over 200 at
the time of acquisition)
– Reduced promotional spend resulting in increased margins.
– Entered into contracts with sick funds.
– Shift of production from Germany to India  30% of the total sales value shifted by
March 09
Germany - Heumann
Highlights & Growth Drivers
Germany
(Heumann)
Q3
09 - 10
Revenues
659
% Growth
-18%
Rs. Mn
Q3
YTD Dec YTD Dec
08 - 09
08 - 09 09 - 10 08 - 09
801
1995
1935
3%
2659
19%
• Highlights
– Euro revenues (adjusted for one off income in Q3 FY 09) de grew by 15% with volume
de growth of 5.5%, price de-growth of 12.2% and new introduction growth of 2.7%.
– Covered Market Unit Growth ~3.9% Heumann De Growth : 1.8%
– Adjusting for one time gain in Q3 FY 09 margins for Q3 FY 10 have improved in
absolute terms on the back of site shifts and favourable product mix.
– AOK with MS 14%, TK with MS 6% and IK with MS 2% awarded tenders during the
quarter;
• Torrent was awarded 5 products each in AOK and TKK with 9 products in IK
– Participated in DAK (10% MS).
• Growth Drivers
– New Product Introductions
– Aggressively bidding for tenders floated by sick funds
– Shift of manufacturing base to India to boost competitiveness in bidding
Europe (excl Germany)
Highlights & Growth Drivers
Europe
(exc Germany)
Q3
09 - 10
Q3
08 - 09
Revenues
348
357
% Growth
-2%
Rs. Mn
YTD Dec
09 - 10
958
YTD Dec
08 - 09
889
8%
08 - 09
1245
52%
• Highlights
- Ropinirole, Indapamide and Lamotrigine contributes nearly 80% of total sales.
- Higher gross margins due to favorable product mix.
• Growth Drivers
- New Product Pipeline – 30 products till 2012-13 with genericized market size of
approximately USD 2.5 bio.
- Increasing geographical through direct field force presence in UK in the immediate term.
Highlights & Growth Drivers
ROW
Revenues
% Growth
Q3
Q3
09 - 10
08 - 09
281
240
17%
ROW
Rs. Mn
YTD Dec YTD Dec
08 - 09
09 - 10
08 - 09
864
630
925
37%
32%
• Highlights
– Higher topline (22% adjusted for currency) as well as profitability on the back of:
- Increased sales from Philippines & SEA territories.
- Higher gross margins due to improved product mix.
• Growth Drivers
- Entry into semi-regulated markets like Thailand (Market Size of over USD 2 bio) –
Revenues expected to flow from FY12.
- Increased focus on existing territories with direct field force presence viz Philippines, Sri
lanka, Vietnam & Myanmar
- Scale up of operations in regulated markets like Australia & semi-regulated markets like
South Africa.
- Minimize development costs by leveraging on R&D costs incurred for developed markets
Facilities – Expansion Plan
Facilities – Expansion Plan
Sikkim
Chatral
Chatral
•
•
•
Nature: New Formulation
Nature: Formulation Capacity
Enhancement
Facility
Nature: API Capacity
Enhancement
•
Project Cost: Rs. 135 crores
•
Project Cost: Rs. 56 crores
•
Project Cost: Rs. 113 crores
•
Planned capacities: 3000
•
Planned capacities: 1800 million
•
Planned capacities: 60 TPA
million tablets p.a.
•
Timelines for completion:
•
Justification:
•
IT and Excise exemption for 10
•
plus separate facility for exhibit
Timelines for completion: 2010-
batch manufacturing
•
11
2010-2011
•
tablets / capsules p.a.
•
2010-11
Justification:
–
With growing international
Timelines for completion:
•
Justification:
–
years
sales capacity constraint in
With growing domestic market,
existing facility is anticipated
US / EU, API capacity
Baddi plant is expected to
in 2-3 years
constraint is anticipated 23 years
achieve 100% capacity
utilization in 2-3 years
With growing volumes in
–
Greater control over API
Costs
Dahez SEZ
•
Nature: Formulation & API Capacity Enhancement
•
Project Cost: Rs. 339 crores
•
Planned capacities: 15 TPA plus 4000 million tablets / capsules p.a.
•
Timelines for completion: 2012-13
•
Justification:
– With growing volumes in US / EU, API + Formulation capacity constraint is anticipated 2-3 years
Thank You
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