SPIL Nov13 IR Presentation

Creating

Lasting

ValueInvestor Presentation - November

2013BSE:524715 • NSE:SUNPHARMABloomberg: SUNP@IN • Reuters: SUN.BOwww.sunpharma.com

mailto:SUNP@IN

http://www.sunpharma.com/



DisclaimerExcept for the historical information contained and the subsequent discussions, which include

herein, statements in thiswords or phrases such as

presentation“will”, “aim”, “anticipate”,

“will likely result”, “would”,“estimate”, “intend”, “plan”,

“believe”, “may”,

“expect”,

“will continue”,“contemplate”, “seek

to”,“future”, “objective”, “goal”,“likely

”,“project”, “should”,

“potential”,

“will pursue”

and

similar

expressions

orvariations of such expressions may constituteforward-looking statements involve a number of that could cause actual results to differ materially

"forward-looking statements". Theserisks, uncertainties and other factors from those suggested by the forward-

looking statements. These risks and uncertainties include, but are not limited to ourability to successfully implement our strategy, our growth and expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investment andbusiness income, cash flow projections, our exposure torisks. Sun Pharmaceutical Industries Limited does not update forward-looking statements to reflect events or thereof.

market risks as well as otherundertake any obligation to circumstances after the date

2Creating Lasting Value - Investor Presentation

Agenda

54

32 Managemen

t& Governance

1Research &DevelopmentBusiness

OperationsStrategy &Approach

FinancialsRevenue

CompositionGrowth

GeographiesAPI, Finished Dosage & Manufacturing

HistoryProfile

&KeyAcquisitions


Agenda

54

32 Managemen

t& Governance



FinancialsRevenue

CompositionGrowth


HistoryProfile

&KeyAcquisitions


Revenue Composition2012-13 Annual Gross

Sales : Rs

114,087

million5 Yea

rCAGR

27%InternationalGenerics5 Year CAGR 47%

13%54%

APIs5 Year CAGR 17%

7%

US Formulations5 Year CAGR 34%

IndiaBranded Generics5 Year CAGR 15%

26%

Finished Dosage

Internationalsale

s93% sale

s72%

5 year CAGR 28%

5 year CAGR 34% 5

ed

Creating

Value,

Continuously…

‘14

1995

1983

2004

2010

2012Began

with5 products Acquired

DusaFirst APIPlant Panoli

USD 350mnFCCB raised

1997

2013Acquire

dTaro

1993

2007 201

11994

Acquired URLPharma

$7.5Mn investin Caraco

First Research Centre

SPARC, Baroda Demergerof innovativeR&D to SPARC

JV for EmergingMarkets

JV for OcularTherapy

IPO - Rs. 550 MnraisedSun Pharma

Today


PART OF

14,000+ Invested Rs. 35 billion 26 Manufacturing facilities

More than 70% of sales from international markets

Employees in Research in 4 Continents

‘83

Agenda

54

32 Managemen

t& Governance



FinancialsRevenue

CompositionGrowth


HistoryProfile

&KeyAcquisitions


Se•

•

Strategy and

Approach

Create sustainablerevenue streams

ek cost leadership

• Focus: ChronictherapiesDifferentiation: Technically complex products

Vertical integration :Development through Manufacturing (API and Finished Dosage) to Marketing

•

Optimize

operational

costs

• Speed

to market

Balance profitability

andinvestments for

future• Acquisitions yielding high ROI• Development of complex generics


Growing Steadilytop-line and bottom-line growth;

Consistent (Figures in Rs

billion)continuing

the

trend despite

increasing

size

112.3

97-98 02-03 07-08 12-13

97-98 02-03

07-08

12-13

97-98

02-03

07-08

12-13 9

33.6

8.32.5

15.5

2.80.6

Net Sales

EBITDA 49.1 Net Profit 30.1

14.9

2.50.5

07-08 08-09 09-10 10-11 11-12

Sustained ProfitabilitySuperior business modelMargins consistently

higher

than peers*

Gross

Margin

EBITDA

Margin

Net

Margin60

%90%

32 %40%

80%

20%

70%

0%60%

50% -20%

40% -40% 08-09 09-10 10-

1111-12 12-13

08-09 09-10 10-11 11-12

12-13

Sun Pharma

Range of other Top 10 Pharma Cos.

Average

Gross margin= (Net Sales – Material Cost) / Net Sales * 100•Other top 10 Indian Pharma company include Aurobindo,, Cadila Healthcare,•Cipla, DRL, Glenmark, Ipca, Lupin, Ranbaxy, Torrent and Wockhardt.

10

82%32

-

60%

44 %

40%

20%

0%

-20%08-09 09-10 10-11 11-12 12-13

Successful At AcquisitionsAcquired 16 high potential

yet

under-performing

businesses*;successf

ulturnarounds

10,000

45

8,000

36

6,000

27

4,000

18

2,000

9

0 095-96

96-97

97-98

98-99

99-00

00-01

01-02

02-03

03-04

Net Sales (MINR)

Operating Margin(%)

Operating Profit (MINR)


8 Early Acquisitions

Key

Deals & Rationale

2013

Acquired URL’s generic business

US Adds 107

to US portfolio

products

2011

100% ownership of Caraco

US Privatizationbased combinations productsAcquired Taro

PharmaceuticalIndustries Ltd.

Dermatology & Topical ProductManufacturing Plant at Israel & Canada201

0IsraelUS Increased generic product

offeringsForest’s Inwood business Import registration with DEA, API

Plantapproved by DEA in Tennessee, US

2008

Acquired Chattem Chemicals, Inc.

Tennessee, US

2005

Formulation plant in Bryan

Ohio, US

Dosage form plant (Ohio, US)

1998

Brands from Natco

India

Respiratory brands

Merged Tamilnadu DadhaPharmaceuticals Ltd (TDPL)

Gynecology and oncology brands; APIand dosage form plant

1997

Chennai, India

approved) 12Creating Lasting Value - Investor

Presentation

1996 Acquired MJ Pharma Halol, India Dosage form plant (now USFDA

1997 Acquired Caraco Detroit, US Dosage form Plant

2005 Acquired ICN Hungary Hungary API and dosage form plant (Hungary)

2005 Assets of Able labs New Jersey, US Dosage form plant (NJ, US) and IP

2009 Caraco acquired some products of

2011 Formation of Sun-MSD JV Emerging Markets Develop and commercialize technology

2012 Acquired DUSA Pharma, Inc. US Access to branded derma product

Year Deals Country Rationale2013 Formation of Sun-Intrexon JV US JV for ocular therapies

Agenda

54

32 Managemen

t& Governance



FinancialsRevenue

CompositionGrowth


HistoryProfile

&KeyAcquisitions


India Branded Generics

: Strong

Base

• Market Share :5.2%* 26

%• Leadership inchronic segment;Top 3 in over 50% ofmore

than

500

brands

Cardiology

* As per AIOCD AWACS –Sept’13


Others 7 % Neuro-Psychiatry

Opthalmology 5 %

Antiasthamatic & Antiallergic 4 %

Musculo-Skeletal& Pain 5 %

Gynecology & Urology 8%

Gastroenterology

14 %

Diabetology 20 %

11 %

Relentless CustomerTherapy focused marketing

FocusStrong increasein marke

tshare

• 4,000+ sales representativescoverin

g140,000

specialist

doctors

200

150

100

50200

0Cipl

a

2001

2002

2003 2004

2005 2006

2007DRL

2008

2009

2010

2011

2012

IpcaRanbaxy

Sun Cadila

Lupin

Torrent

Wockhardt

Year 2000 Market Share indexed to 100 for all companies


Therapy Focused MarketingDelivering

promotionalmessage

to specialty customers.

Gastroenterology, Orthopedics

Cardiology, Diabetology

Psychiatry, Neurology

Ophthalmology

Rheumatology,Dermatology

Asthma,COPD

Oncology

Gynecology

Fertility, Gynecology,Urology


Preferred Choice of DoctorsLeadership

in keytherapeutic areas*

Top 10 Brands contribute 20%of India

Sales

Psychiatrists

1 1Proton pump inhibitor/antiulcerant

Neurologists

1 1 PantocidCardiologis

ts1 1 Geme

rOral antidiabeticOrthopaed

ic1 1

CVS, cholesterol reducingagent

Aztor Ophthalmologists 1 1

Gastroenterologists 2 1 Proton pump inhibitor/Pantocid-

D antiulcerant Nephrologists

4 1Susten

Women's healthcare

Diabetologists

2 3 Chest Physicians 4 5 Glucore

d Oral antidiabetic Group Consulting

Physicians3 5

Levipil

CNS

Gynaecologists

4 7 Dermatologists 14 9 Istame

tAntidiabetic Oncologists 5 10 Rozav

elCVSUrologist

s8 12

Clopilet

CVS, anticlotting agent*Ranks based on prescription share

Source-Strategic Marketing Solutions and Research Centre (SMSRC) Pvt. Ltd.Creating Lasting Value - Investor Presentation

17

Brand Name Therapy areaSpecialist June ‘10 June ‘13

US GenericsIntegrated generic manufacturer with flexibility for manufacture onshore / offshore

ApprovalsTherapy wise summary

Caraco PharmaceuticalLaboratories Ltd.

Skin, 94

CNS, 82The 100% owned US generics subsidiary,markets own and Sun Pharma ANDAs

CVS, 41

Sun PharmaceuticalIndustries, Inc. (SPI)

Pain, 28

Other, 28

A wholly owned subsidiary of Sun Pharma inUS

Taro PharmaceuticalIndustries Ltd.

Allergy, 21

Oncology, 18

Metabolism, 10

The 66% owned subsidiary of Sun Pharma Cough / Cold, 6

Urology, 5URL Pharma. Inc.

A wholly owned subsidiary of Caraco in US

As on 30-Sept-2013


ANDA Pipeline : Significant

ramp upProduct

sFiled

and Approved

Status

As of Sept’13, ANDAs for 130products await approval(including 15 tentative approvals)

463449

377 Sun Pharma86 Products pending(with 10 tentative approvals)Caraco & URL25 Products pending(with 4 tentative approvals)Taro19 Products pending(with 1 tentative approvals)

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Sep-13

Cumulative Products Filed Cumulative Products Approved

(Taro numbers added since Mar 2011 & URL numbers added since Mar 2013 )Creating Lasting Value - Investor Presentation 19

333

397

311250

207 225177

8469

Europe Generic Markets

Focused key markets• Working on complex

genericproducts, including injectables• Filings from Indian site

Focus CountriesAn API and Finished

Dosagecontrolled substance capacity


manufacturing site in Hungary with

International Branded Generic Markets

Replicating the speciality pipeline

Semi Regulated Markets

Product basket width and technologybased products as growth drivers

• 45 countries

• 866 strong local sales forcepromotes brands to

doctors

CIS Countries

ChinaMexic

oMyanmar

Brazil

Sri Lanka

Focus MarketsOther Markets

South AfricaMap Not to

Scale21Creating Lasting Value - Investor

Presentation

Leveraging through Partnership

• Sun Pharma and Merck establish a Joint Venture for Emerging Markets excluding IndiaJV to bring new combinations and formulations of incrementally innovative branded generics to marketOpportunity to use SPARC Proprietary Delivery TechnologiesEqual representation in JV for Sun Pharma & MerckJV to use partners infrastructure for development, manufacturing, regulatory and commercialization.

•

••

• Sun Pharma and Intrexon Form Joint Venture to Develop New ClassTherapeutics for Ocular diseases for global marketsPipeline of potential Ocular therapies to help millions worldwide suffering from blinding diseasesEqual representation in JV for Sun Pharma and Intrexon. Both partners to share funding and revenues from the joint venture.

of

•

•


Speciality API

Strong regulatory

capability

High Margin Regulated Markets

• 247 DMF / CEP

filed

• Business largely with end users inregulated markets • 172

approved• Over

170

speciality

APIs across

8 plants (includin

gTaro)


Strong Regulatory CapabilityInternational level quality processes and documentation

24723

922520

6

Mar-09

Mar-10

Mar-11

Mar-12

Mar-13

Sep-13

DMF/CEP Filed

DMF/CEP

Approved

24

172168154155127133

8981

Iztapalapa

Integrated product dev and manufacturingnetworkVertically integrated network across four continents enabling high quality,

lowcost and a quick market entry across

the

geographies

Tiszavasvari(Hungary)

Ontario (Canada)Detroi

t Wilmington M.A.Auror

aJammu

Sikkim Plant

CranburyBrya

n Philadelphia

Israel

Tennessee Bangladesh

PlantAhmednagar(Mexico

) Maduranthakam

Goiânia(Brazil)

Halol

Ankleshwar

KarkhadiPanoli

Silvassa

Sun Pharma

Taro Pharmaceuticals

API and Formulations

API Formulations

Global networked facilities are FDA, EMEA, TGA approved

Creating Lasting Value - Investor Presentation

25

Finished Dosage Manufacturing

17 Manufacturing sitesworldwide••

India : 5, US : 6Canada, Brazil, Mexico, Hungary , Israel, Bangladesh : 1 each• Capacities available

fora variety

offinished

dosage


Tablets / CapsulesSemisolids

Liquids

Suppository

Injectables / SterileVials Dry powderAmpoules Eye dropsPre-filled Syringes

MDIGels AerosolsLyophilized Units

API Manufacturing

8 World class locations with all sitesISO 14001, ISO 9002

approved

• India : 5, Israel : 1, US :

1, Hungary :

1Over 25 API processesscaled up annually

Hungary &Tennessee (US)

Panoli & Ahmednagar(both India) API

Key Plant

s

• International regulatoryapprovals: USFDA, European

• Stand alone units for peptides, anti-cancer, steroids, sex hormones

• Controlled substances

manufacture


Agenda

54

32 Managemen

t& Governance



FinancialsRevenue

CompositionGrowth


HistoryProfile

&KeyAcquisitions


Research and Development••

Generic R&D spend around 6% of net salesStrong research teams in generics, finished dosage development, biological support, chemistry• 4 R&D centers with over 900

scientists

Immediate term

Medium termDrug delivery systems

BalancingANDA

,DMF,

Products

for India the

risk


Baroda

Mumbai

Agenda

54

32 Managemen

t& Governance



FinancialsRevenue

CompositionGrowth


HistoryProfile

&KeyAcquisitions


Corporate

Governance

ChairmanSun Pharma

IndependentDirectors

AuditCommittee


S. MohanchandDadhaFormer Chairman & Managing Director, TDPL

Ashwin Dani Vice Chairman and Managing Director, Asian Paints Ltd.

Committee chaired by Keki Mistry comprises Hasmukh Shah and S. M. Dadha

Hasmukh Shah Chairman Gujarat Gas & FormerChairman And MD, IPCL

Keki Mistry Vice Chairman And CEO, HDFC

Israel MakovFormer President& CEO of TevaPharma. Industries Ltd.

Our philosophy on corporate governance envisages working towards high levels of transparency, accountability and consistent value systems across all facets of operations

Shareholding Patternas on Sept 30, 2013

Individuals and others5 %

Bodies Corporate 5 %Financial Inst

/Banks2%

Mutual Funds 1 %

FIIs /Foreign Banks

23 %

Promoter and promoter group64 %


• Total shares outstanding : 2,071 million• Total free float (shares) : 746 million• Average daily trading volume (12 months) : 1.3 million

• Rs 1,000 Invested in

the 1994 IPO is currently worth

more than Rs. 523,000

FinancialsMarket Capitalisation

Rs. 1,261 billion / US$ 20.5 billion* Figures in Rs million

Gross Profit

34,154

29,096

42,577

63,644

91,592

Net Profit

18,177

13,511

18,161

26,567

29,830

R&D Spend

3,320

2,631

3,313

4,449

7,042

Loan Funds

1,789

1,712

3,651

2,650

1,982

Investments

18,595

31,664

22,298

22,129

24,116

Inventory

9,757

10,739

14,895

20,870

25,778

Sundry Creditors

2,543

3,194

6,454

9,927

13,579

*Exchange Rate :US$1 = Rs 61.41 (As on

31 Oct 2013)# Adjusted for Rs 5.83 bn provision related to generic Protonix

settlementfor the year 2012-13.


Sundry Debtors 8,811 11,748 11,049 20,787 27,108

Cash and Bank Balances 16,690 5,089 22,046 33,672 40,587

Net Fixed Assets 16,196 16,776 27,568 32,742 50,771

BS SummaryShareholders Funds 70,449 78,289 94,833 122,358 150,147

Net Profit (Adjusted) 18,177 13,511 18,161 26,567 #

35,666

EBITDA 18,639 13,628 19,518 32,507 49,063

2008-09 2009-10 2010-11 2011-12 2012-13P&L Summary

Net Sales 42,723 40,075 57,229 80,057 112,389

Financial

Ratios

Gross Profit

29.6

(14.8)

46.3

49.5

43.9

Net Profit

22.2

(25.7)

34.4

46.3

13.2

EBITDA Margin (%)

43.6

34.0

34.1

40.6

43.7

#Net Margin (Adjusted)

42.5

33.7

31.7

33.2

32.0

Return on Average Net Worth

30.2

18.2

21.0

24.5

22.1

Fully Diluted EPS (Rs) Post bonus

8.8 6.5 8.8 12.8

14.5

Capital

0.5 0.4 0.4 0.5 0.4

# Adjusted for Rs 5.83 bn provision related to generic Protonix settlement for the year 2012-13.


Fully Diluted EPS (Rs) Post bonus (Adjusted) 8.8 6.5 8.8 12.8 # 17.3R&D Spend % of Net Sales 7.8 6.6 5.8 5.6 6.3Revenue 7.3 6.2 5.4 5.1

5.9

OthersDebt / Equity 0.03 0.02 0.04 0.02 0.01

Return (%)Return on Average Capital Employed 31.5 19.5 23.6 30.3 35.7

Net Margin 42.5 33.7 31.7 33.2 26.8

Net Profit (Adjusted) 22.2 (25.7) 34.4 46.3 # 35.2Margins (%)Gross Margin 79.9 72.6 74.4 79.5 81.5

EBITDA 20.2 (26.9) 43.2 66.5 50.9

2008-09 2009-10 2010-11 2011-12 2012-13Growth (%)

Net Sales 27.3 (6.2) 42.8 39.9 40.4

Key

Financials

Q2& H1FY14 Figures in Rs

million

83%33,590

81%23,853

326% -92%

# Adjusted for Rs 25.17 bn provision related to generic Protonix settlement for Q1 FY14* Adjusted for Rs 5.83 bn provision related to generic Protonix settlement for the year 2012-13. 35Creating Lasting Value - Investor

Presentation

Q2 FY14 Q2 FY13 CHANGE H1 FY14 H1 FY13 CHANGE FY13Net Sales 41,921 26,572 58% 76,74

253,154

44% 112,389Gross Profit

Gross MarginEBITDA

EBITDA Margin

33,91781%

18,28344%

21,68782%

11,68544%

56%

56%

63,485 43,245 47% 91,592

41%81%

49,06344%44% 45%

Net Profit 13,623 3,196 326% 862 11,152

-92% 29,830Net margin 32% 12% 1% 21% 27%

Net Profit (Adjusted) 13,623 * 9,032 51% # 26,036 * 16,987 53% * 35,666Net margin

(Adjusted) R&D

R&D as % of Net Sales

EPS (Diluted) INREPS (Diluted) INR

(Adjusted)

32%2,231

5%6.66.6

34%1,450

5%1.54.4

34% 32% 32%

54% 4,280 2,843 51% 7,042

6% 5% 6%0.4

12.65.48.2

14.417.251% 53%

Sales

Breakup Figures in Rs

million


Q2 FY14 Q2 FY13 CHANGE H1 FY14 H1 FY13 CHANGE FY13Formulation

India US ROW

Sub-total

BulkOthers

9,495

25,880

4,924

40,2982,117

(20)

8,099

13,301

3,726

25,1251,758

125

17% 17,981 13,975 29% 29,65795% 46,194 28,712 61% 61,53832% 9,431 7,392 28% 15,271

47%8%

-91%

106,4667,549

73

60%20%

-116%

73,6064,045

14

50,0793,760

143Gross Sales 42,395 27,008 57% 77,665 53,982 44% 114,088

Recent Developments• Sun Pharma and Intrexon Form Joint Venture to Develop New

Class ofTherapeutics for Ocular Diseases• Pipeline of Potential Ocular Therapies to Help Millions Worldwide

Suffering fromBlinding Diseases• Sun Pharma settled the pending patent litigation in US regarding

genericProtonix with Wyeth & Altana Pharma AG. Sun Pharma will pay a lump-sum US$ 550 million as a part of settlement.

Received US FDA approval for generic Prandin. Sun to enjoy 180-day exclusivity by virtue of its FTF status.

Recent Acquisitions URL acquisition– Expands product offering in US through

addition of 107 products

DUSA acquisition– Gives access to branded dermatology product in US DUSA & URL acquisitions strengthen our presence in the US - focus

on growing these acquired businesses and enhancing their profitability

•

•


Revised Guidance for FY14• Sales growth guidance: Revised to 25% compared to

previousguidance of 18-20% overR&D : 6-8% of salesCapex : Rs 8 bn

FY13. Guidance

at constant

exchange

rate•

•• ANDA

sfor 25product

sto befile

d


© 2010 Sun Pharmaceutical Industries Limited., All Rights Reserved.

“SUN Pharma”, The Sun Pharmaceutical Industries Logo are trademarks of Sun Pharmaceutical Industries Limited.

In addition to Company data, data from IMS – ORG, CMARC, Stock Exchanges and industry publications has been used for this presentation.This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred,

adapted, abridged,copied or reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and

company names and logos mentioned herein are the trademarks or registered trademarks of their respective owners. 39Creating Lasting Value - Investor Presentation

For updates and specific queries, please visit www.sunpharma.com

or feel free to contactNimish Desai Mira DesaiTel : +91 22 6645 5645, Ext 5717 Tel : +91 22 6645 5645, Ext 5606Tel Direct : +91 22 66455717 Tel Direct : +91 22 66455606Mobile : +91 98203 30182 Mobile : +91 98219 23797 [email protected] [email protected]




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SPIL Nov13 IR Presentation