Sequent Scientific Limited has informed the Exchange about Investor Presentation
Proven Ability In Life Sciences
February 15, 2024
BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai – 400 001.
National Stock Exchange of India Limited Listing Department Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai – 400 051.
Scrip code: 512529
Dear Sir/ Madam,
Symbol: SEQUENT
Subject: Press Release and Investor Presentation on Unaudited Standalone and Consolidated Financial Results for the quarter and nine months ended December 31, 2023.
Pursuant to Regulation 30 (read with Part A of Schedule III) we are enclosing herewith the Investor Presentation on Unaudited Standalone and Consolidated Financial Results for the quarter and nine months ended December 31, 2023.
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
SeQuent Scientific Limited Earnings Presentation Q3 FY24
February 2024
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 Scientific – At a glance
30+ Years of Market Excellence
India’s Only USFDA approved API facility supplying Animal Health APIs
*
7 State of the art manufacturing facilities
Largest Animal Health company from India
5 Global R&D centres
9 Strategic acquisitions
100+ Countries with marketing presence
We Offer: • API • Formulations • Analytical Services
1,000+ Product registrations across 12 dosage forms
1,500+ Globally diversified workforce
$100M+ Invested in R&D, Manufacturing capabilities and building market presence
*Discontinued manufacturing operations at Tarapur facility effective 13th July 2023
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Sequent Scientific – Q3 FY24 Earnings Release
I am pleased to share that our transformation program to reshape our operations, optimize costs and enhance profitability has begun to deliver and reflect in the financials. EBITDA margin (pre-ESOP costs) for Q3FY24 stood at 9.2%, with EBITDA growing 15% sequentially and 9% on y-o-y basis. This is in line with our goal to exit this financial year with double digit margins. Adjusting for discontinued unprofitable business units and currency accounting adjustments in Turkey, our revenues grew 1.3% sequentially in INR terms and 2.5% in constant currency terms, setting the base for higher growth in the coming period.
Our Formulations business delivered another strong quarter, growing sequentially at +5.3% on constant currency basis. Within this, the European portfolio continued to outperform (+6.8% q-o-q) on the back of targeted investments. Our pricing interventions in Turkey are yielding good results, as we manage the volatile macro environment.
Project Pragati, our cost excellence program, delivered a strong improvement in API gross margins (+150 bps vs previous quarter). API volumes were muted this quarter due to shifting of some customer requirements to Q4 FY24. We continue to be selective about the quality of business, prioritizing long term sustainable growth.
We remain excited about the opportunity in the Animal Health sector and continue to look at inorganic avenues in API and Formulations. The optimization of our footprint, margin expansion initiatives and investments in new products should accelerate all parts our business.
Rajaram Narayanan MD & CEO
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Q3 FY24: Key Highlights
Business Results
• Pre-ESOP cost EBITDA growth of 15% q-o-q / 9% y-o-y • EBITDA margin pre-ESOP costs at 9.2%; expanded by 160 q-o-q / 180 bps y-o-y; on track
to deliver double digit margins in Q4
• Revenue growth adjusted for discontinued business and Turkey currency accounting impact at +1.3% q-o-q; Formulations business +5% q-o-q in translated terms; Overall +2.5% q- o-q and Formulations +6.9% q-o-q in constant currency terms
Formulations
• Europe: Next leg of growth underway with 6.5% q-o-q / 20.5% y-o-y growth; operating
efficiencies and mix improvement aiding margins
• Emerging Markets: Pricing actions in Turkey driving recovery; proactively evaluating
•
further hikes given macro and currency volatility India Formulations: New brand launches and scale ups helped offset delay in resumption of distribution product
• Remain selective and disciplined in price sensitive markets while accelerating
partnerships in Regulated Markets
API
• Project Pragati: Strong execution of cost excellence initiatives drove margin
expansion; further improvement expected in Q4 / FY25
• API segment gross margin expanded by ~150 bps over Q2 FY24
SeQuent Scientific Limited
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Q3 FY24: Continuing margin expansion
7.4% 277
42.1%
3.5% 128
39.5%
2.8% 93 41.5%
7.6% 263
45.1%
9.2% 302
45.2%
3753
3667
3332
3460
3294
4500
4000
3500
3000
2500
2000
1500
1000
500
0
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Revenue (INR mn)
Gross Margin
EBITDA % (pre ESOP cost); EBITDA (INR mn)
SeQuent Scientific Limited
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Q3 FY24: Revenue Performance – by geography
All values in ₹ Mn
Revenue Distribution
Q3 FY24 Q2 FY24 QnQ Gr%
Formulations
Europe
Emerging Markets
India
APIs
Other Sales
Global Sales
Adjustment* - Ind AS 29
Reported Sales
2,510
1,269
963
278
690
43
3,243
51
3,294
2,532
1,191
1,068
273
804
18
3,354
106
3,460
QnQ Gr% (In cc) 5.3%
6.8%
4.6%
1.7%
Q3 FY23 YoY Gr%
2,591
1,053
1,252
286
(3.1%)
20.5%
(23.1%)
(2.9%)
YoY Gr% (In cc) 2.5%
13.3%
(5.5%)
(2.9%)
9M FY24 9M FY23 YoY Gr%
7,520
3,631
3,084
805
7,456
3,010
3,604
843
0.9%
20.6%
(14.4%)
(4.5%)
YoY Gr% (In cc) 0.6%
10.7%
(6.7%)
(4.5%)
(0.9%)
6.5%
(9.8%)
1.7%
(14.1%)
(14.2%)
1,072
(35.6%)
(35.9%)
2,301
2,866
(19.7%)
(22.1%)
140.5%
140.5%
22
93.5%
93.5%
96
86
(3.3%)#
1.4%#
3,685
(12.0%)
(8.0%)
9,917
10,409
10.6%
(4.7%)
10.6%
(5.5%)
(4.8%)
(3.3%)
3,753
(12.2%)
(8.3%)
10,085
10,542
(4.3%)
(5.1%)
69
168
134
#Sequential revenue growth adjusted for discontinued businesses & currency accounting in Turkey: Overall: +1.3%; Formulations: +5.2% in translated INR terms // Overall +2.5%; Formulation +6.9% in constant currency terms
•
•
•
Europe: Improved demand for manufactured Pharma products and Phytosolutions range combined with higher focus on high growth categories
Emerging Markets: Sequential uptick in CC terms in Turkey led by aggressive price hikes coupled with revamped salesforce incentives, offset considerably by currency depreciation
India: Q-o-q / Y-o-y performance muted due to discontinuance of a distribution product; partly offset by new product launches and scale ups
• API: Sequential sales decline mainly on account of a) Orders in some key accounts in Regulated Markets expected in Q3 moved to Q4 b) pricing
pressure in a deworming product in Less Regulated Markets
*Adjustment on account of hyperinflation in Turkey as per Ind AS 29
SeQuent Scientific Limited
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Q3 and 9M FY24 Financials
Q3 and 9M FY24 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 IndAS 29 Adjustment* Exchange Gain / (Loss) Other Income Finance Cost Depreciation Earnings Before Tax Taxes Earnings After Tax Minority Interest Earnings after Minority Interest
Q3 Q2 Q3 FY23 FY24 FY24 3,753 3,460 3,294 (2,174) (1,898) (1,806) 1,487 1,579 1,562 45.2% 45.1% 42.1% (580) (602) (527) (659) (722) (697) 277 263 302 9.2% 7.6% 7.4% (52) (89) (62) 188 201 250 7.6% 5.8% 5.0% (10) 81 (28) (25) (46) (25) 16 29 (97) (126) (137) (154) (102) (31) 4 (38) (98) (69) 15 (9) (89) (84)
28 (6) (21) 45 (126) (155) 15 92 107 24 83
Grw QnQ % -5%
9%
-6%
-5%
15%
24%
9M 9M Grw YoY % FY23 FY24 -12% 10,085 10,542 (6,120) (5,652) 4,434 4,422 44.0% 41.9% (1,660) (1,706) (2,069) (2,134) 628 658 6.5% 6.0% (177) (278) 350 480 4.8% 3.3% (42) (127) (102) (58) (84) (131) 47 70 (246) (356) (410) (451) (489) 148% 115% (573) 193 264 (295) 255% 209% (309) (20) (276)
199% 193% (350)
18%
41
Grw YoY % -4%
0%
5%
37%
-17%
-5%
-27%
Q3 CY vs Q3 LY •
310 bps of yoy Gross Margin improvement: o Formulations: Mix improvement and price interventions in Europe and Turkey respectively
o API: Project Pragati
related cost optimization initiatives
• Base correction in
operating expenses and employee costs on account of multiple restructuring initiatives over last 3-4 quarters
•
Q3 FY24 - Other income comprises of profit on sale of Ambarnath land
*Adjustment on account of hyperinflation in Turkey as per Ind AS 29
SeQuent Scientific Limited
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For details, feel free to contact:
Phillip Trott
Company Secretary
Abhishek Singhal
Nachiket Kale
Investor Relations Consultant
Investor Relations Advisor
+91 22 4111 4777
abhishek.s@sequent.in
+91 9920940808
investorrelations@sequent.in
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.
SeQuent Scientific Limited
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Thank You
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