Zydus Lifesciences Limited has informed the Exchange about Investor Presentation
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February 3, 2023
Listing Department BSE LIMITED P J Towers, Dalal Street, Fort, Mumbai–400 001
Listing Department NATIONAL STOCK EXCHANGE OF INDIA LIMITED Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai–400 051
Re:
Investor Presentation
Dear Sir,
Code: 532321
Code: ZYDUSLIFE
Please find attached the Investor Presentation on the unaudited financial results for the quarter / nine months ended on December 31, 2022.
Please find the same in order.
Thanking you,
Yours faithfully, For, ZYDUS LIFESCIENCES LIMITED
DHAVAL N. SONI COMPANY SECRETARY
Encl.: As above
Zvdus Lifesciences Limited (formerly know n as Cadila Hea lthcare Limited) Regd . Office : 'Zydus Co r porate Park', Scheme No. 63 , Survey No. 536, Khoraj (Gandhinagar), Nr. Va ishnodevi Circle, 5. G. Highway, Ahmedabad-382 48 1, Gu jarat. India . I Phone : +91-79-71800000, +91-79-48040000 website: www.zyduslife.com I CIN : L24230GJ 1995P LC025878
Zydus Lifesciences Limited Earnings Presentation 3rd February, 2023
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Disclaimer and Safe Harbor Statement
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THIS PRESENTATION (PRESENTATION) IS NOT AN OFFER TO SELL ANY SECURITIES OR A SOLICITATION TO BUY ANY SECURITIES OF ZYDUS LIFESCIENCES LIMITED OR ITS SUBSIDIARIES OR JOINT VENTURES (TOGETHER, THE “COMPANY”). The material that follows is a Presentation of general background information about the Company’s activities as at the date of the Presentation or as otherwise indicated. It is information given in summary form and does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation has been prepared by and is the sole responsibility of the Company. By accessing this Presentation, you are agreeing to be bound by the trading restrictions. It is for general information purposes only and should not be considered as a recommendation that any investor should subscribe / purchase the Company shares. This Presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “projects”, “expects”, “intends”, “may”, “will”, “seeks” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, aims, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Presentation and include statements regarding the Company’s intentions, beliefs or current expectations concerning, amongst other things, its results or operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward- looking statements are not guarantees of future performance including those relating to general business plans and strategy of the Company, its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. No representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts, if any, are correct or that the objectives of the Company will be achieved. There are some important factors that could cause material differences to Company’s actual results. These include (i) our ability to successfully implement our strategy (ii) our growth and expansion plans (iii) changes in regulatory norms applicable to the Company (iv) technological changes (v) investment income (vi) cash flow projections etc.
The Company, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this Presentation, unless otherwise specified is only current as of the date of this Presentation. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this Presentation, the information contained herein is based on management information and estimates. This document is just a Presentation and is not intended to be a “prospectus” or “offer document” or a “private placement offer letter” (as defined or referred to, as the case may be, under the Companies Act, 2013). It is clarified that this Presentation is not intended to be a document offering for subscription or sale of any securities or inviting offers from the Indian public (including any section thereof) or from persons residing in any other jurisdiction including the United States for the subscription to or sale of any securities including the Company’s equity shares. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of the Company’s securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended, except pursuant to an exemption from registration there from. This document has not been and will not be reviewed or approved by a regulatory authority in India or by any stock exchange in India. This document and its contents should not be forwarded or delivered or transmitted in any manner to any person other than its intended recipient, and should not be reproduced in any manner whatsoever.
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Q3 FY23: At a Glance
Revenues from Operations*
' ' ' :
Rs. 43,623 mn 20% YoY ' L------------------------------------------------------------~ ' '
' ' ' ' ' ' ' ' ' '
' ' ' '
EBITDA & Margin % ,-------------------------------------------------------------. ' ' ' ' Rs. 9,560 mn ' ' ' ' ' ' ' ' ' ' ' ' ' ' 21.9% of revenues ' ' ' ' ' ' ' ' ' ' 27%YoY ' ' ' '
L- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
'
R&D ,------------------------------------------------------
' ' ' ' ' ' ' ' ' ' ' ' ' ' ' L------------------------------------------------------
Rs. 3,435 mn 7.9% of revenues
Net Profit ,- ------------------------------------------------------ ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '
Rs. 6,229 mn 24% YoY
L- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _,
Business-wise Sales Break-up (Rs. mn) and YoY Growth
API 4% ▲14%
EU 2% ▲4%
Alliances 1% ▼55%
EM 7% ▲6%
Total 41,598 ▲18%
US 46% ▲29%
India Form 30% ▲14%
Consumer Wellness 10% ▲8%
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Highlights of Q3 FY23
❑ Total revenues grew 20% yoy, led by robust growth across businesses.
❑ India formulations business sustained strong momentum and grew 14%
yoy (ex-COVID growth was 16%).
❑ Consumer Wellness business maintained a dominating market position
in key brands despite the difficult environment.
❑ US formulations business continued to grow on a sequential basis, aided by volume expansion in base portfolio and some impact of seasonality.
❑ Emerging markets business continued to perform well across
geographies and grew in double digit on a COVID adjusted base.
❑ EBITDA margin stood at 21.9%, up 130 bps yoy and 220 bps qoq.
❑ Net debt: Rs. 6,037 mn (at 31-Dec’22) vs (-)Rs. 632 mn (at 31-Mar’22).
❑ Capex (organic) for the quarter: Rs. 2,554 mn.
❑ Net debt to EBITDA: 0.18x (at 31-Dec’22) vs (-) 0.02x (at 31-Mar’22)
Note: * Revenues from Operations include Net Sales and Other Operating Income.
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Key Financial Metrics (1/2)
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Total Revenues (Rs. mn)
Gross Profit (Rs. mn) and Gross Margin %
36,398
38,638
40,727
41,347
43,623
63.4%
61.3%
62.9%
61.4%
23,064
23,680
25,634
25,403
65.4%
28,519
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
Total R&D (Rs. mn) and % to Revenues
EBITDA (Rs. mn) and EBITDA Margin %
7.0%
7.0%
7.0%
6.1%
7.9%
3,435
2,553
2,697
2,842
2,534
7,516
7,176
20.6%
18.6%
20.5%
19.7%
21.9%
8,330
8,153
9,560
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
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Key Financial Metrics (2/2)
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PAT ex. Exceptional, One-offs and Discontinued ops.(Rs. mn)
Organic Capex (Rs. mn)
5,069
5,250
5,295
6,087
6,225
3,100
2,668
2,828
2,554
2,157
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
Net Debt/ EBITDA
Net Working Capital* (Rs. mn)
48,765
49,219
51,218
53,270
56,290
0.17
0.18
0.09
-0.02
-0.18
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
*Net working capital includes Inventory, Trade receivables and Trade payables.
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
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India Formulations business
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Sustained growth driven by robust performance across key therapies
Highlights for the quarter
Revenues (Rs. mn)
10,785
11,640
11,251
12,648
12,316
Q3 FY23 Revenue Contribution
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
30%
Q3 FY23 Gr.
YoY
QoQ
14.2%
C ) C )
-2.6%
Brand building - a key growth driver
Therapy-wise Break-up*
Brand Value (Rs. Mn)*
1000+
500 to 1000
250 to 500
# of Brands
11
24
39
▪
▪
▪
▪
The business grew by 14% YoY, ex-COVID opportunities, the growth was 16% YoY.
The business Outpaced the market growth during the quarter.
Gained market share and improved ranking in gynecology, anti-diabetic and nutraceutical portfolio on a YoY basis#.
Lipaglyn® brand continued to enhance the reach as it expanded the patient base by 45% in CY22.
The brand has now benefitted almost 1.5 million patients since its launch.
*Source: AWACS MAT Dec 22 #Source: AWACS Oct – Dec 22
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Anti-infectives13%Cardiac16%Derma5%GI11%Gynae6%Pain8%Respi10%Onco9%Others22% Consumer Wellness
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Delivering the growth on the back of strong brand equity
Highlights for the quarter
Revenues (Rs. mn)
6,330
6,916
3,822
4,227
4,120
Q3 FY23 Revenue Contribution
TO% 10%
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
Q3 FY23 Gr.
YoY
QoQ
7.8%
-2.5%
Key brands continued to hold dominant market share - ~ Sugar Free.
G/ucon·D~ "--.._ ~ / ~
I
\
59.9%
35.1%
95.8%
6.4%
41.8%
78.4%
4.5%
Brand Name
Market Share#
▪
▪
▪
Inflation, which hurt margins over the last few quarters, is cooling down in key inputs except milk, where it still remains high.
Undertook appropriate price increase to counter inflation, impact of which will reflect from next quarter.
Despite challenging macro environment, continued to gain market share in key brands viz. Glucon-D, Nycil and EverYuth (Scrub and Peel-Off).
Facial Cleansing *
Scrub
Peel Off
#Source: Nielsen and IQVIA MAT December 2022 report * Facial cleansing segment includes Face wash, Scrub and Peel-off.
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US Formulations business
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Delivering sustained growth on a sequential basis
Highlights for the quarter
Revenues (Rs. mn)
14,892
14,233
15,592
17,084
Q3 FY23 Revenue Contribution
19,250
$199 mn
$189 mn
$202 mn
$214 mn
$235 mn
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q3 FY23
46%
Q3 FY23 Gr.
YoY
QoQ
29.3%
12.7%
Continued investment to build the generics pipeline
ANDA filings and approvals - Q3 FY23 ^
14
ANDA filings and approvals - 9M FY23
37
9
20
ANDA filings and approvals - Cumulative
440
341
▪
▪
▪
▪
Received 14 new product approvals (incl. 3 tentative approvals) and launched 6 new products.
Approvals for the quarter include final approval for Estradiol Transdermal System (Twice Weekly), the first transdermal approval from Moraiya site.
In January, 2023, launched Topiramate ER capsules (gTrokendi) as the first generic player.
Filed 9 ANDAs during the quarter.
Filings include first ANDA filed from the new oral solids formulations manufacturing facility in Ahmedabad SEZ (SEZ II).
99 ANDAs pending approval with the USFDA.
Filings
Approvals
Filings
Approvals
Filings
Approvals
^ includes 3 tentative approvals.
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Emerging Markets Formulations business
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Base business continued to display robust growth
Highlights for the quarter
Revenues (Rs. mn)
2,914
2,750
3,155
3,308
3,078
Q3 FY23 Revenue Contribution
-
7%
▪
▪
The business grew by 15% YoY, excluding revenue of COVID related products from the base.
Maintained growth momentum on the back of robust performance across key markets.
Q3 FY22
Q4 FY22
Q1 FY23
Q2 FY23
Q2 FY23
Q3 FY23 Gr.
YoY
QoQ
5.6%
-7.0%
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Updates on Innovation
NCE: Saroglitazar Magnesium
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• The molecule is undergoing Phase II(b)/ III clinical trials for PBC indication for the US market. It received approval from the
MoH of Spain, Iceland and Argentina to conduct Phase II(b)/ III clinical trials for this indication.
• Enrolled 54 patients so far for clinical trials of the molecule in the US for PCOS and NAFLD indications. At present, it is the
only trial going on in the world for these indications.
NCE: ZY19489 (Anti-malarial)
• Initiated Phase II clinical trials in India for ZY19489, which is a novel, potential single-dose cure anti-malarial drug candidate.
Biologics and Vaccines
▪
Initiated clinical trials in India for biosimilars of two mAbs in the oncology space.
▪ Received approval from the DCGI to initiate Phase II clinical trials for one vaccine candidate.
Specialty Initiatives
▪ Filed an NDA for one of the products in the area of metabolic disorder through 505(b)(2) route.
PBC - Primary Biliary Cholangitis, MoH - Ministry of Health, PCOS - Polycystic Ovary syndrome, NAFLD - Non-Alcoholic Fatty Liver Disease, mAb - monoclonal Antibodies DCGI - Drug Controller General of India, NDA – New Drug Application
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Zydus at a Glance
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>$2 bn
Global Revenues1
5th
Largest generic Co. in US in terms of prescription3
7
R&D Centers For NCE, APIs, Gx formulations, Biosimilars and Vaccines
Approx. 50%
Revenues from branded business (India, EM and Wellness)
Among Top 3
In 60% of product families marketed in US4
1st
Approved product for NASH in India - (Bilypsa® - Saroglitazar)
$5.4 1st bn
Market Capitalization2
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Brands among Top 300 in India5
1st 1st
OSD formulation for anemia associated with CKD – OxemiaTM (Desidustat)
35 Mfg. sites Producing
Biosimilars (pipeline & launched) & 7 novel >28 bn pills annually products (pipeline)
23 K
Biosimilars (pipeline & Zydans globally incl. launched) & 7 novel 1400 scientists (R&D) products (pipeline)
22 Biosimilars in portfolio
Biosimilars (pipeline & including 13 launched in launched) & 7 novel India products (pipeline)
1. 2. 3.
In FY22, assuming exchange rate of Rs. 74.5 per USD As on 2nd February,2023, exchange rate of Rs. 82 per USD IQVIA MAT December 2022 TRx
4. IQVIA MAT December 2022 TRx 5. As per AWACS MAT December 2022
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Consolidated Financial Performance (reported)
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•
•
•
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Comments for Q3 FY23
YoY growth in total income from
operations, led by robust growth
across businesses.
YoY improvement in GC margin,
largely attributable to robust
growth
in
India
and
US
formulations businesses.
YoY growth in other operating
expenses is due to lower base
and certain one-time REMS set-
up cost
incurred during the
quarter for an upcoming launch.
Net Profit for the quarter stood
at Rs. 6,225 mn, up 23% y-o-y
(on a comparable base).
* Excludes Research related expenses # Profit/ (loss) from discontinued operations in FY23 refers to discontinuation of Nesher and Hercon business while in FY22, it refers to profit on divestment of India-centric Animal Health Business and discontinuation of Nesher and Hercon business.
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Rs. mnQ3 FY23Q3 FY22YoYgr.Q2FY23QoQgr. 9MFY23 9MFY22YoYgr.Total Income from Ops.43,623 36,398 19.8%41,347 5.5%1,25,697 1,14,014 10.2%Gross Contribution (GC)28,519 23,064 23.7%25,403 12.3%79,556 73,520 8.2%Gross Margin %65.4%63.4%61.4%63.3%64.5%Employee benefits expenses *6,293 5,287 19.0%5,997 4.9%18,331 16,572 10.6%R&D expenses3,435 2,553 34.6%2,534 35.6%8,811 7,710 14.3%Other operating expenses9,231 7,708 19.8%8,719 5.9%26,371 23,008 14.6%EBITDA9,560 7,516 27.2%8,153 17.3%26,043 26,230 -0.7%EBITDA Margin %21.9%20.6%19.7%20.7%23.0%Other Income385 607 -36.6%444 -13.3%1,488 1,456 2.2%Finance cost328 311 5.5%351 -6.6%1,022 885 15.5%Depreciation and amortization1,816 1,770 2.6%1,818 -0.1%5,441 5,276 3.1%PBT before exceptional items7,801 6,042 29.1%6,428 21.4%21,068 21,525 -2.1%Exceptional Expenses/ (Incomes)- - - 29 -1,127 102.6%Profit before Tax7,801 6,042 29.1%6,428 21.4%21,039 22,652 -7.1%Tax expenses1,952 1,094 78.4%1,370 42.5%4,506 4,025 12.0%Share of profit from JVs459 223 105.8%148 210.1%828 416 99.0%Profit/(loss) from discontinued ops. #4 -65 106.2%55 -92.7%-24 22,607 Minority Interest83 102 -18.6%36 130.6%700 751 -6.8%Reported Net Profit6,229 5,004 24.5%5,225 19.2%16,637 40,899 -59.3% Details of Exchange Rate Fluctuations
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Rs. mnQ3 FY23Q3 FY22YoYgr. %9MFY239MFY22YoYgr. %A. On operating transactions (above EBITDA line)-1,096 -181 -505.7%-3,639 -952 -282.3%a. Included in other operating income-1,052 -181 -481.2%-3,429 -971 -253.1%b. Included in COGS-44 -210 19 -1191.4%c. Included in other operating expensesB. On other income-17 -131 87.0%-253 -446 43.3%C. On foreign currency borrowings (part of finance cost)- - 1 - Total Exchange Rate Fluctuations ('+' = loss, '-' = gain)-1,113 -312 -256.8%-3,891 -1,398 -178.3% Thank you
For any queries, please contact Arvind Bothra Arvind.Bothra@zyduslife.com +91-79-71800839
For more information, please visit: www.zyduslife.com
www.linkedin.com/company/zyduslife
Registered Office:
Zydus Corporate Park, Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, Sarkhej-Gandhinagar Highway, Ahmedabad – 382 481 Gujarat, India