Sequent Scientific Limited has informed the Exchange about Investor Presentation
Proven Ability In Life Sciences
May 23, 2023
To, BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai – 400 001.
Scrip code: 512529
Dear Sir/ Madam,
Sub: Investor Presentation
National Stock Exchange of India Limited Listing Department Exchange Plaza, Bandra‐Kurla Complex, Bandra (East), Mumbai – 400 051.
Symbol: SEQUENT
Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith the Investor Presentation on Audited Standalone and Consolidated Financial Results for the quarter and year ended March 31, 2023.
This is for your information and records.
Thanking you,
Yours faithfully, For Sequent Scientific Limited
Krunal Shah Company Secretary & Compliance Officer Encl.: A/a
Registered Office: 301, 3rd Floor, Dosti Pinnacle, Plot No. E7, Road No. 22, Wagle Industrial Estate, Thane (W), Mumbai - 400604, Maharashtra, India Tel No.: +91-22-4111-4777 I CIN: L99999MH1985PLC036685 Website: http://www.sequent.in I Email Id: investorrelations@sequent.in
SeQuent Scientific Limited
Earnings Presentation Q4 & FY23 24th May 2023
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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 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. The Company does not undertake any
obligation to update forward-looking statements to reflect events or circumstances after the date thereof.
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Sequent announces Q4 FY 23 results. Company to restructure European operations
In Q4 FY23, we have continued to make structural adjustments, so that we are present and ready to win in the most attractive markets and customer segments. Our recent actions are showing results. Despite the headwinds in some markets , the overall formulation business has grown at 9.9% on CC basis for the full year. While the devastating earthquake in Turkey did not damage our facilities, it has impacted the demand in the Turkey market since the clinic and distribution infrastructure is yet to be restored.
In continuation with our strategy to improve profitability , the manufacturing operations in our plant in Germany have been discontinued and will move to alternative low cost sites. We expect to see the benefit in the coming quarters.
While the overall market for Vet APIs was subdued in Q4 FY 23, we continue to receive over 70% of our API revenues from customers in regulated markets and anticipate a gradual pickup in the coming quarters. The focus remains on deepening our engagement with top animal health companies worldwide. During the year FY 23, we accelerated our filings , registering 5 VMFs and 3 CEPs Our API business has started a significant initiative to improve long term competitiveness. We have invested in additional capacity for new business and expanded our R&D team to meet the requirements of new partnerships with leading Animal Health companies.
The results of the quarter reflect a one time charge on the closure of manufacturing in Germany and the impact of recent events on Turkey. This sets up the company for stronger , sustained growth and profitability.
Rajaram Narayanan, Managing Director
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FY 23 : Overall growth of 2% in a challenging year
~10% cc growth for Formulations. Business restructuring in Europe
Emerging Markets delivered robust growth of 16% cc, driving overall Formulations
Subdued sales of APIs
Mahad site awarded the EcoVadis Sustainability Silver Medal
API : Focus on Top 10 AH customers. Regulated markets contribute to 72% of sales
New comprehensive cost reduction and process efficiency improvement program
APIs - Accelerating new product pipeline : 8 new filings ( 5 USVMF + 3 CEPs
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Revenue performance by Geography
All values in ₹ Mn
Revenue Distribution
Q4 FY23 Q3 FY23 QoQ Gr%
Formulations
Europe
Emerging Markets
India
APIs
Other Sales
Global Sales
QoQ Gr% (In cc) (6.3%)
4.1%
(1.1%)
9.1%
(4.1%)
(10.5%)
(25.7%)
(25.7%)
Q4 FY22 YoY Gr%
2,493
1,024
1,253
217
2.6%
11.9%
(4.1%)
(2.0%)
YoY Gr% (In cc) 2.9%
7.0%
(0.8%)
(2.0%)
2,588
1,050
1,252
286
1,072
(12.1%)
(12.2%)
1,273
(26.1%)
(31.8%)
25
NM
NM
70
NM
NM
FY23
FY22
YoY Gr%
10,009
4,147
4,807
1,055
3,808
102
9,686
4,205
4,461
1,021
4,314
128
3.3%
(1.4%)
7.8%
3.4%
NM
2,559
1,146
1,201
213
941
10
3,511
3,685
(4.7%)
(8.4%)
3,837
(8.5%)
(10.2%)
13,920
14,128
(1.5%)
YoY Gr% (In cc) 9.9%
1.7%
15.9%
3.4%
NM
2.2%
(11.7%)
(15.4%)
Adjustment* - Ind AS 29
156
69
289
-
Reported Sales
3,667
3,753
(2.3%)
(8.0%)
3,837
(4.4%)
(9.9%)
14,209
14,128
0.6%
2.2%
Following strong growth in Q3, Q4 revenue was lower by 8% cc vs. Q3 FY23.Despite multiple headwinds across geographies, in FY23, recorded a growth of 2.2% y-o-y in cc terms Formulations Business :-
Europe clocked 7% yoy growth in Q4. FY23 was relatively flat with growth of 1.7% over FY22. Implemented strategic initiatives to streamline operations and optimize cost
structures.
Emerging Markets segment continues its growth trajectory despite a muted LATAM sales during Q4 FY 23. In FY23, the region delivered a robust 15.9% cc growth despite
major headwinds in Turkey.
API business : Top 10 customers continue to contribute ~58% of sales. Comprehensive margin and operations improvement program underway. New investment in capacity
expansion and R&D capability
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cc - Constant Currency
*Adjustment on account of hyperinflation in Turkey as per Ind AS 29
NM – Not Material
Formulations : Sustaining growth momentum.
Key Updates
EUROPE- Return to growth with launch of new Phyto range. Structural adjustments to improve margins - - Manufacturing in Germany discontinued and operations to shift to alternative low cost locations.
- Margin accretive from Q3 FY 24
EMERGING MARKETS – -
Nourrie integration completed in Brazil . New platform created for companion animals. Turkey business impacted by inflationary pressures and the recent earthquake.
INDIA – -
Cattle business continues to grow by ~10% despite challenges in rural markets. Expansion of team for accelerated growth in FY 24
Revenues
All values in ₹ Mn
14%
8,824
9,686
10,009
6,789
1,878
2,451
2,494
2,559
Q4 FY20
FY20
Q4 FY21
FY21
Q4 FY22
FY22
Q4 FY23
FY23
cc- Constant Currency
FDFs
1000+
Manufacturing facilities
6
R&D Centres
4
Countries with marketing presence
80+
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API : Continued strength in regulated markets
Key Updates
Pricing pressures and currency challenges in some markets had an adverse impact on
demand
Regulated markets contribute ~ 72% of the revenue Strong portfolio- 8 fillings during the year . ( 5 USVMF + 3 CEPs ) API business now has total 29 USVMFs + 18 CEPs New investment in capacity expansion for leading AH customers R&D capacity expansion Comprehensive margin and operations improvement program ( Project Pragati )
underway. Benefits to kick in from Q2 FY 24.
Commercial APIs
30+
Manufacturing facilities
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Revenues
All values in ₹ Mn
4,004
4,565
4,314
3,808
R&D Centre
1
1,072
1,118
1,273
941
Q4 FY20 FY20
Q4 FY21 FY21
Q4 FY22 FY22
Q4 FY23 FY23
Sales to Regulated Markets
70%+
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Financials
Consolidated Financials
All values in ₹ Mn
Particulars
Revenue from Operations Material Consumption Gross Margin % Employee Benefit Expenses Operating Expenses EBITDA (pre ESOP) % ESOP cost EBITDA % Exceptional Items / Acquisition cost* IndAS 29 Adjustment Exchange Gain / (Loss) Other Income Finance Cost Depreciation Earnings Before Tax Taxes Earnings After Tax Minority Interest Earnings after Minority Interest
Q4 FY23 Unaudited 3,667 (2,217) 1,449 39.5% (570) (751) 128 3.5% (76) 52 1.4% (616) (56) (30) 17 (109) (147) (888) (36) (924) 11 (936)
* Q3 FY23 ₹10 Mn acquisition related cost
Q3 FY23 Unaudited 3,753 (2,174) 1,579 42.1% (580) (722) 277 7.4% (89) 188 5.0% (10) (28) (46) 29 (97) (137) (102) 4 (98) (9) (89)
Q4 FY22 Unaudited 3,837 (2,188) 1,649 43.0% (519) (744) 386 10.1% (53) 333 8.7% - - 23 15 (60) (125) 186 (86) 100 11 90
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FY23 Audited 14,209 (8,338) 5,871 41.3% (2,230) (2,886) 756 5.3% (354) 402 2.8% (658) (158) (114) 64 (355) (557) (1,377) 157 (1,220) (8) (1,212)
FY22 Audited 14,128 (7,930) 6,198 43.9% (1,985) (2,791) 1,423 10.1% (329) 1,094 7.7% - - 63 45 (158) (515) 529 (83) 446 38 408
•
Impact on gross margin due to reduction in Inventory
• OPEX controlled
despite inflationary pressure
•
Exceptional items driven by closure of plant in Germany and impact of recent events in Turkey
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Adjusted EBITDA at ₹ 110 crs
Amt in Rs Mn
Particulars
Revenue
EBITDA (Pre ESOP)
One offs
Improvement in Inventory days
Business restructuring
Turkey earthquake impact
Hyper inflation
Discontinued Operations in Germany
Adjusted EBITDA
FY23
14,209
756
102
60
29
13
28
217
1103
All values in ₹ Mn
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Key Balance sheet Items
All values in ₹ Mn
Particulars
Mar-23*
Dec- 22*
Mar-22``
Balance Sheet Highlights
Shareholders Funds
Minority Interest
Net Debt
Investments
Tangible Assets
Intangible Assets
Working Capital
Put / Buyout Liabilities
6,981
500
3,561
0
3,622
3,085
4,261
-
7,715
482
3,631
0
3,780
3,186
4,804
-
6,919
480
2,542
368
3,263
2,498
4,222
^159
Operational initiatives - working capital days
reduced by 11 days
Net Debt is marginally down
*Mar’23 & Dec’22 reported numbers are adjusted for impact of hyperinflation accounting in Turkey as per IndAS 29 - ‘Accounting for Hyperinflationary economies’
^ Buyout Liabilities of ₹ 159 Mn in Mar’22 paid on account of Nourrie acquisition
`` Mar’22 restated on account of Nourrie amalgamation
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For details, feel free to contact:
Krunal Shah
Company Secretary
+91 22 4111 4779
investorrelations@sequent.in
Abhishek Singhal
Nachiket Kale
Investor Relations Consultant
Investor Relations Advisor
abhishek.s@sequent.in
+91 9920940808
nachiket.kale@linkintime.co.in
Registered Office: 301/A, ‘Dosti Pinnacle', Plot No. E7, Road No. 22, Wagle Industrial Area, Thane (W), Maharashtra, India
Websites: www.sequent.in, www.alivira.co | CIN: L99999MH1985PLC036685 | BSE Code:512529 | NSE: SEQUENT | ISIN:
INE807F01027
Certain statements in this document that are not historical facts are forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. SeQuent Scientific Ltd. will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
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Thank You