Dr. Reddy's Laboratories Ltd. · NSE:DRREDDY

Dr. Reddy's Laboratories — Investor Presentation (November 2012)

30 slides from Dr. Reddy's Laboratories's investor presentation, November 2012

  1. Slide 1: Dr. Reddy's Investor Presentation November 2012

    Dr. Reddy’s Investor Presentation November 2012

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement This presentation contains forward-looking statements and information that involve risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and

  3. Slide 3: Company Overview

     Company Overview  Looking Back / Looking Forward  Business Updates 2

  4. Slide 4: Purpose and Strategy

    Purpose: Providing affordable and innovative medicines for healthier lives. Strategy: Leverage industry-leading science & technology, product offering and customer service with execution excellence. 3

  5. Slide 5: Overview

    Overview  Integrated business model spanning 3 segments  generics, active pharmaceutical ingredients & custom services, and proprietary products.  Strong vertically integrated portfolio of businesses, geographies & products.  Amongst the largest Indian pharmaceutical companies  Revenues of U.S.

  6. Slide 6: The Last Decade

    The Last Decade Built the foundations for a strong business. Moved up the value chain. Strengthened capabilities. Achieved scale and global presence. Acquired to aid growth. Revenues [USD Mn] 1,901 1,677 1,510 1,563 1,365 1,250  Germany & Mexico acquisitions  Authorized generic launches 546 463 44

  7. Slide 7: Minimizing Business Risk - Diversified Model

    Minimizing Business risk  Diversified Model Diversity in product service offering & geographic mix  Generics : North America // Germany // Rest of Europe Global  Branded Generics : India // Russia & CIS // Other Generics Emerging Markets // GSK Alliance  Generic Biopharmaceuticals  Active Ingre

  8. Slide 8: Our Strengths

    Our Strengths  Industry leading chemistry skills  High vertical integration • Several niche product opportunities in API • Global leader in DMF filings (552 – Sept 12) & generics (tacrolimus / lansoprazole / omeprazole mg OTC / fondaparinux / fexofenadine product family / Ibandronate / metoprolol

  9. Slide 9: Infrastructure

    Infrastructure Investing for future : 25+ bn finished dosage units Current Infrastructure  API Manufacturing : India – 6, UK – 1, Mexico – 1 [All USFDA approved]  Finished Dosages : India – 7 [2 USFDA approved] Manufacturing US – [2 USFDA approved]  Biologics Facility : India – 1 [audited by mult

  10. Slide 10: Looking Back / Looking Forward

     Company Overview  Looking Back / Looking Forward  Business Updates 9

  11. Slide 11: Recap - Efforts in the last few years (1/3)

    Recap  Efforts in the last few years (1/3) …  Building depth & focus in key markets  Reaching critical mass  NAG [>$650 mn]; India & RCIS [each > ~$250 mn]  Building Tier II markets  CIS, Venezuela & South Africa  Turn-around of Germany  Restructured betapharm field force & personnel  Maxim

  12. Slide 12: Recap - Robust improvement in financial metrics (2/3)

    Recap  Robust improvement in financial metrics (2/3) Base Revenue ($ Mn) EBITDA ($ Mn) 530 1,918 One-off profits from exclusivity sales 1,639 1,428 360 1,353 332 334 1,242 240 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 Base revenues represent revenues All figures converted at respective excl

  13. Slide 13: Recap - Efforts in the last few years (3/3)

    Recap  Efforts in the last few years (3/3) …  Bridging capability gaps & setting businesses towards growth Geography Nature Rationale Emerging Markets • GSK Alliance • EM play (Brazil, Mexico, Turkey, etc) Japan • Joint venture with Fuji Film • Japan generics Markets • Shreveport facility • Manufa

  14. Slide 14: Addressing future growth through multiple levers

    Addressing future growth through multiple levers… Beyond FY17 • Strong base business in US (large base of limited competition products) FY13 to FY17 • Continued progress in • Momentum in US driven Upto FY13 Emerging Markets by limited competition • Scale-up in North America opportunities. • Contribu

  15. Slide 15: Business Updates

     Company Overview  Looking Back / Looking Forward  Business Updates 14

  16. Slide 16: North America Generics

    North America Generics Base Revenues ($ Mn) 570 Pipeline Excluding upside revenues 417 275 301 63 pending 199 ANDAs (~$33 bn of innovator brand sales value) FY08 FY09 FY10 FY11 FY12 Upside Revenues  $156 mn $54 mn $100 mn Portfolio  30 Rx products among Top 3 ranks in market shares  Growing portf

  17. Slide 17: North America Generics

    North America Generics  Continued growth in the period upto FY17  Continued strong engagement with strategic customers Service Level excellence Strategic Focus High Quality Steady portfolio growing business  Mix of limited competition and  15-20 new launches annually complex generics products to

  18. Slide 18: Emerging Markets - Russia

    Emerging Markets  Russia Revenue ($ Mn) 232 196  6th largest branded generic 152 126 101  Robust & consistent outperformance of industry growth over the years FY08 FY09 FY10 FY11 FY12 Top 6 Rx products  Top 2 in market shares Increasing mix of OTC sales Top Products Market Share Rank Omez 61% 1

  19. Slide 19: Emerging Markets - Russia

    Emerging Markets  Russia Focus & Build portfolio in select Therapeutic areas : Focus Therapeutic areas  Gastrointestinal Pain Anti-infectives Dermatology Cardiovascular Gynaecology  Grow Mega brands Existing  Scale-up OTC portfolio (brands > $20 mn)  Build portfolio of ‘differentiated’ New & ‘d

  20. Slide 20: Emerging Markets - India

    Emerging Markets  India  Strong relationship with GP/CPs Revenue ($ Mn) 270 244 212  Coverage of > 200,000 doctors 177 168  Overall prescription ranking at 11th (Source: March-June ‘12 SMSRC data)  Strong market share in Top brands FY08 FY09 FY10 FY11 FY12 Top 10 Brands Market Share Rank Omez 5

  21. Slide 21: Emerging Markets - India

    Emerging Markets  India Focus & Build portfolio in select Therapeutic areas : Focus Therapeutic areas  Gastrointestinal Pain Anti-infectives Dermatology Cardiovascular Oncology  Grow & sustain Mega brands  Scale-up Biosimilars & Oncology Existing (brands > Rs. 30 crs) 1 new biosimilar launch ann

  22. Slide 22: Global Generics - Europe; Pharmaceutical Services & Active Ingredients

    Global Generics – Europe Revenue (€ Mn) 183 179 144 Europe 140 140  Strong cost control measures  Launch of new products outside the scope of tenders  Selective approach of picking portfolio FY08 FY09 FY10 FY11 FY12 Pharmaceutical Services & Active Ingredients Revenue ($ Mn) 497 408 430 431 413 

  23. Slide 23: Dr. Reddy's - Merck Serono Biosimilars deal

    Dr. Reddy’s – Merck Serono ‘Biosimilars’ deal -- Deal coverage -- Co- Co-development Co-manufacturing commercialization • Global deal Revenue allocations • Portfolio of biosimilar compounds in • Merck Serono Exclusive markets  oncology, primarily MAbs. Royalty arrangement • Sharing of development c

  24. Slide 24: Proprietary Products

    Proprietary Products Strategy Approach Calibrate investments and build a self- Pursue well-defined niche and semi- sustainable, commercially valuable portfolio blockbuster “Specialty” opportunities with of Specialty-oriented proprietary products limited competition Key Aspects Pipeline  Shift from

  25. Slide 25: Thank You

    Thank You For any information please contact Investor Relations Cell : Kedar Upadhye at [email protected] / +91 40 66834297 Saunak Savla at [email protected] / +91 40 49002135 Milan Kalawadia (USA) at [email protected] / +1 9082034931

  26. Slide 26: Q2 FY13 Performance

    Q2 FY13 Performance • $145 mn • $ 544 Million 27% to sales 27% YoY gr 47% YoY gr Revenue EBITDA Launches PAT & Filings • $77 mn • 4 ANDA filings & 14% to sales 10 DMFs filings 32% YoY gr The figures for the corresponding period of FY12 are adjusted for payment in relation to the Voluntary Retirement

  27. Slide 27: Revenue mix by segment

    Revenue mix by segment $ mn $ mn Q2 – Sept’12 Q2 – Sept’11 Growth% Global Generics 380 305 25 North America 175 119 47 Europe 34 40 (16) India 73 65 12 Russia & Other CIS 73 64 14 RoW 25 17 50 PSAI 149 112 33 North America 26 20 27 Europe 55 44 26 India 22 14 53 RoW 47 34 36 Proprietary Products & O

  28. Slide 28: H1 FY13 Performance

    H1 FY13 Performance • $241 mn • $ 1,024 Mn 23% to sales 28% YoY gr 35% YoY gr Revenue EBITDA Launches Adj PAT* & Filings • $148 mn • 8 ANDA filings & 14% to sales 17 DMFs filings 56% YoY gr *Adjusted for (a) impairment charges in Q2 FY13 (b) net charge for voluntary retirement scheme(‘VRS’) and (c)

  29. Slide 29: Revenue mix by segment

    Revenue mix by segment $ mn $ mn H1 – Sept’12 H1 – Sept’11 Growth% Global Generics 740 577 28 North America 325 228 43 Europe 75 76 (2) India 139 121 15 Russia & Other CIS 151 121 25 RoW 50 32 57 PSAI 253 203 25 North America 46 36 27 Europe 97 76 29 India 33 27 24 RoW 77 65 19 Proprietary Products

  30. Slide 30: Key Balance Sheet Items

    Key Balance Sheet Items $ mn Sept 2012 June 2012 Cash & Cash Equivalents 390 403 Net Operating Working Capital 713 695 Property, plant & equipment 667 653 Goodwill & Intangibles 232 257 Loans & borrowings (current & non current) 660 670 Equity & Reserves 1,197 1,127 o Capital expenditure for three m

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