Zydus Lifesciences Limited has informed the Exchange about Investor Presentation
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August 11, 2023
Listing Department BSE LIMITED P J Towers, Dalal Street, Mumbai–400 001
Listing Department NATIONAL STOCK EXCHANGE OF INDIA LIMITED Exchange Plaza, C/1, Block G, 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 ended on June 30, 2023.
Please find the same in order.
Thanking you,
Yours faithfully, For, ZYDUS LIFESCIENCES LIMITED
DHAVAL N. SONI COMPANY SECRETARY
Encl.: As above
Zydus Lifesciences Limited (formerly known as Cadila Healthcare Limited) Regd . Office : 'Zydu s Corporate Park', Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar) , Nr. Vaishnodevi Circle. S. G. Hig hway. Ahmedabad-382 481. Gujarat. India. I Phon e: +9 1-79-718 00000 , +91-79-48 0 4 0000 website: www.zyd uslife.com I CIN : L2423 0GJ1995PLC0 25878
Zydus Lifesciences Limited Earnings Presentation: Q1 FY24
11th August, 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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Q1 FY24: At a Glance
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R&D
Highlights of Q1 FY24
Revenues from Operations
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' ' ' ' ' ' ' ' ' ' ' ' ' '
Rs. 51,396 mn 30% YoY ~ ------------------------------------------------------------ '
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Rs. 3,239 mn 6.3% of revenues
EBITDA & Margin %
' ' ' ' Rs. 15,053 mn ' ' ' ' ' ' ' ' ' ' ' ' ' ' 29.3% of revenues ' ' ' ' ' ' ' ' ' ' 81%YoY ' ' ' ' ' ' L------------------------------------------------------------ -
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Net Profit ex. Exceptional
Rs. 11,011 mn 111% YoY
L- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _,
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❑ Total revenues grew 30% YoY, led by US and EM& EU formulations
businesses.
❑ Branded formulations business in India delivered 10% growth Yoy.
Excluding the impact of NLEM led price reduction, growth was 12% YoY.
❑ Consumer Wellness business continued to hold leadership position in 5
out of 6 brands in their respective categories.
❑ US formulations business continued to grow on a sequential basis, aided
by volume expansion in existing products and new launches.
Business-wise Sales Break-up (Rs. mn) and YoY Growth
❑ All major geographies of Emerging markets and Europe business posted
strong growth.
API 3%
Alliances 1% ▲13% ▲5%
EM & EU 10% ▲30%
Total 50,528 ▲29%
US 48% ▲57%
India Form 24% ▲9%
Consumer Wellness 14% ▲0.3%
❑ EBITDA margin stood at 29.3%, up 830 bps YoY and 420 bps QoQ.
❑ Capex (organic) for the quarter: Rs. 2,203 mn.
❑ Net debt to EBITDA: (-) 0.19x (at 30-Jun’23) vs (-) 0.14x (at 31-Mar’23)
Regulatory Updates
❑ Oral Solid Dosage (OSD) facility II in Ahmedabad SEZ completed the
USFDA Pre-Approval inspection without any observations.
❑ Biologics fill-finish facility and Animal health formulations manufacturing
facility completed the USFDA inspections without any observations.
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Key Financial Metrics (1/2)
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Total Revenues (Rs. mn)
Gross Profit (Rs. mn) and Gross Margin %
39,644
40,053
42,571
50,106
51,396
33,146
34,652
61.9%
60.2%
64.5%
66.2%
67.4%
24,551
24,109
27,468
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Total R&D (Rs. mn) and % to Revenues
EBITDA (Rs. mn) and EBITDA Margin %
7.2%
6.3%
8.1%
7.1%
6.3%
21.0%
20.4%
22.5%
25.1%
29.3%
2,842
2,534
3,445
3,541
3,239
8,330
8,153
9,560
15,053
12,556
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
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Key Financial Metrics (2/2)
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PAT ex. Exceptional (Rs. mn)
Organic Capex (Rs. mn)
5,212
5,225
6,229
11,011
8,979
2,828
2,554
2,157
2,040
2,203
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Net Debt/ EBITDA
Net Working Capital* (Rs. mn)
0.17
0.18
51,218
53,270
56,290
57,051
63,906
Q1 FY23
Q2 FY23
Q3 FY23
Q4FY23
Q1 FY24
-0.18
-0.14
(0.19)
*Net working capital includes Inventory, Trade receivables and Trade payables.
Q1 FY23
Q2 FY23
Q3 FY23
Q4FY23
Q1 FY24
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India Formulations business
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Sustained growth momentum driven by focused execution
Highlights for the quarter
India Formulations Sales (Rs. mn)
12,648
12,316
12,896
12,270
Q1 FY24 Revenue Contribution
11,251
24%
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY24 Gr.
YoY
QoQ
9.1%
-4.9%
Brand building - a key growth driver
Therapy-wise Break-up*
Brand Value (Rs. Mn)*
1000+
500 to 1000
250 to 500
# of Brands
12
25
37
▪
▪
▪
▪
▪
Branded business grew by 10% YoY. Excluding the impact of NLEM led price reduction, the growth was 12% YoY.
Continued to work towards strengthening the presence in focused therapy areas.
During the quarter, Lipaglyn® brand was ranked 47th largest brand in the Indian Pharmaceutical Market (IPM), a gain of 19 positions over the previous year.
Bilypsa® and UjviraTM brands continued to register volume expansion through various patient support programs and activities. On the Super Specialty front,
➢ Retained leadership position in Nephrology
segment and
➢ In Oncology, continued to grow at the fastest
pace.
*Source: AWACS MAT June 23
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Anti-infectives13%Cardiac16%Derma5%GI10%Gynae6%Pain8%Respi11%Onco9%Others22% Consumer Wellness
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Leveraging strong brand equity to navigate through challenging times
Highlights for the quarter
▪
▪
▪
Unseasonal rains during the first half of the quarter impacted the offtake of a key summer-oriented brand Glucon-D®.
Rest of the portfolio posted near double digit growth.
Inflationary pressure on gross margin eased on account of moderation in commodity prices on a sequential basis.
Consumer Wellness Sales (Rs. mn)
6,916
7,075
6,936
Q1 FY24 Revenue Contribution
4,227
4,120
,..I/Ju/_ 14% ' /0
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY24 Gr.
YoY
QoQ
0.3%
-2.0%
Key brands continued to hold dominant market share - ~ Sugar Free.
G/ucon·D~ "--.._ ~ / ~
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59.9%
35.5%
96.2%
6.2%
42.4%
78.7%
4.5%
Brand Name
Market Share#
Facial Cleansing *
Scrub
Peel Off
#Source: Nielsen and IQVIA MAT June 2023 report * Facial cleansing segment includes Face wash, Scrub and Peel-off.
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US Formulations business
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Delivering sustained sequential growth through the year
Highlights for the quarter
US Formulations Sales (Rs. mn)
15,592
17,084
19,250
22,525
24,541
$ 202 mn
$ 214 mn
$ 235 mn
$ 275 mn
$ 298 mn
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY24 Gr.
YoY
QoQ
57.4%
9.0%
Q1 FY24 Revenue Contribution
48%
Continued investment to build the generics pipeline
ANDA filings and approvals - Q1 FY24
20
^
ANDA filings and approvals - Cumulative
444
382
^
▪
▪
▪
▪
▪
Registered strong YoY growth driven by new launches and improvement in base business.
On a sequential basis too, the business grew on a high base of previous quarter.
Received 20 new product approvals (incl. 3 tentative approvals) and launched 4 new products.
Filed 4 ANDAs during the quarter.
62 ANDAs pending approval with the USFDA.
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Filings
^ includes 3 tentative approvals in Q1 FY24 and 26 tentative approvals on a cumulative basis.
Approvals
Filings
Approvals
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Emerging Markets & Europe Formulations business
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Base business continued to display robust growth
Highlights for the quarter
EM & EU Formulations Sales (Rs. mn)
Q1 FY24 Revenue Contribution
3,769
3,849
3,783
4,393
4,893
TO% 10%
▪
▪
The business continued its growth journey and posted a robust 30% growth YoY.
All the major markets delivered healthy growth during the quarter
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q1 FY24 Gr.
YoY
QoQ
29.8%
11.4%
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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 and Phase II(b) clinical trials for NASH indication for the US market. Recruited over 80% of the patients for PBC trials. Patient recruitment is going on as per the plan for NASH trials.
• To generate real world evidence, initiated Phase IV clinical trials in India in NAFLD patients with comorbidities. The trials will enrol approximately 1500 patients. Primary endpoint is to measure the change in liver stiffness from baseline to week 52. The study duration is approximately 56 weeks.
Biosimilars
• Biosimilars of two mAbs are undergoing clinical trials in India.
• Completed the recruitment of patients for one of the molecules.
Vaccines
▪ Commissioned the newly constructed Measles and Rubella (MR) drug substance manufacturing facility.
▪
Initiated Phase II clinical trials of Hepatitis E vaccine.
PBC – Primary Biliary Cholangitis, NASH – Non Alcoholic Steatohepatitis, NAFLD –, mAb – monoclonal antibody
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Zydus at a Glance
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~$2.15 bn
Global Revenues1
5th
Largest generic Co. in US in terms of prescription3
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R&D Centers For NCE, APIs, Gx formulations, Biosimilars and Vaccines
>40% Revenues from India Geography (Formulations and wellness) in FY23
Among Top 3
In 65% of product families marketed in US4
1st
Approved product for NASH in India - (Bilypsa® - Saroglitazar)
$8.0 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)
36 Mfg. sites having
capabilities across dosage forms
Biosimilars (pipeline & launched) & 7 novel products (pipeline)
24 K
Biosimilars (pipeline & Zydans globally incl. launched) & 7 novel >1400 scientists (R&D) products (pipeline)
23 Biosimilars in portfolio
Biosimilars (pipeline & (incl. 2 ADCs), launched launched) & 7 novel 13 products in India products (pipeline)
1. 2. 3.
In FY23, assuming exchange rate of Rs. 80.4 per USD As on 10th August,2023, exchange rate of Rs. 82.8 per USD IQVIA MAT June 2023 TRx
4. IQVIA MAT March 2023 TRx 5. As per AWACS MAT June 2023
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Consolidated Financial Performance (reported)
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,..
* Excludes Research related expenses
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Rs. mnQ1 FY24Q1 FY23YoYgr.Q4 FY23QoQgr.Total Income from Ops.51,396 39,644 29.6%50,106 2.6%Gross Contribution (GC)34,652 24,551 41.1%33,146 4.5%Gross Margin %67.4%61.9%66.2%Employee benefits expenses *6,524 6,042 8.0%6,507 0.3%R&D expenses3,239 2,842 14.0%3,541 -8.5%Other operating expenses9,565 8,420 13.6%9,957 -3.9%Net [gain]/loss on foreign currency transactions271 -1,083 125.0%585 -53.8%EBITDA15,053 8,330 80.7%12,556 19.9%EBITDA Margin %29.3%21.0%25.1%Other Income360 659 -45.4%378 -4.8%Finance cost181 343 -47.2%277 -34.7%Depreciation and amortization1,798 1,807 -0.5%1,786 0.7%PBT before exceptional items13,434 6,839 96.4%10,871 23.6%Exceptional Expenses/ (Incomes)142 29 389.7%6,013 -97.6%Profit before Tax13,292 6,810 95.2%4,858 173.6%Tax expenses2,161 1,184 82.5%1,372 57.5%Share of profit from JVs215 221 -2.7%118 82.2%Profit/(loss) from discontinued ops. #-10 -83 88.0%-22 54.5%Minority Interest467 581 -19.6%616 -24.2%Reported Net Profit10,869 5,183 109.7%2,966 266.4% Details of Exchange Rate Fluctuations
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Rs. mnQ1 FY24Q1 FY23YoYgr. %A. On operating transactions (above EBITDA line)274 -1,169 123.5%a. Included in COGS3 -86 104%b. Part of other operating expenses (shown separately)271 -1,083 B. On other income- -149 100.0%C. On foreign currency borrowings (part of finance cost)4 1 300.0%Total Exchange Rate Fluctuations ('+' = loss, '-' = gain)278 -1,317 121.1% Thank you
For any queries, please contact Arvind Bothra Arvind.Bothra@zyduslife.com +91-22-62711905
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