Providing Affordable and Innovative medicines for healthier lives Q2 FY2020 Earnings Presentation 1 www.lincolnpharma.com
Highlights Q2 FY2020 vs. Q1 FY2020 Management Perspective "We are pleased to report robust financial performance during the quarter. The o Total Income of Rs. 1,152 million, up 17.4% growth has been attributed to a strong performance in domestic and international markets. Our exports sales (FOB) increased 10.95%. During the o EBITDA of Rs. 272 million, up 33.7% quarter our profitability has been enhanced supported by higher revenue contribution from products manufactured in house, better margin products, EBITDA margin of 23.6%, up 288 bps increased revenue from higher margin markets. o PBT of Rs. 249 million, up 39.2% Going forward, our widespread geographic reach, increasing exports revenue, healthy customer and product base coupled with focus on own manufacturing PBT margin of 21.6%, improved 338 bps will continue to support our business. With best in class R&D capabilities o PAT of Rs. 189 million, up 49.3% supported by strong industry experience and improving market dynamics, we are confident of achieving improved performance and maximize shareholders' PAT margin of 16.4%, increased 350 bps wealth in the near to medium term. “ o Net Debt of Rs. 98 million Mr. Mahendra G. Patel, Managing Director Total Debt / Equity of 0.13x and Net Debt to LTM EBITDA of 0.14x Q2 FY2020 Earnings Presentation 2
Performance Overview Consolidated Financial Performance Q2 y-o-y Q1 q-o-q Half Year y-o-y Particulars FY2020 FY2019 Growth (%) FY2020 Growth (%) FY2020 FY2019 Growth (%) Net Revenue 1,152.1 1,070.4 7.6% 981.1 17.4% 2,133 2,092 2.0% EBITDA 272.0 235.2 15.7% 203.4 33.7% 475 491 (3.2)% Margin (%) 23.6% 22.0% 20.7% 22.3% 23.5% PBT 248.5 202.6 22.7% 178.5 39.2% 427 429 (0.5)% Margin (%) 21.6% 18.9% 18.2% 20.0% 20.5% Profit After Tax (PAT) 189.1 150.0 26.1% 127 49.3% 316 311 1.7% Margin (%) 16.4% 14.0% 12.9% 14.8% 14.9% Basic EPS (Rs.) 9.46 7.50 26.1% 6.33 49.4% 15.79 15.53 1.7% Note: • Financials are as per IND-AS • On YoY basis financials are not comparable due to change in statutory accounting treatment Q2 FY2020 Earnings Presentation 3
Performance Overview Revenue Breakup General Anti Infectives 21.0% 21.5% Respiratory Systems 22.1% Therapeutic Area 25.8% Alimentary Tract and Metabolism Genito Urinary System and Sex Hormones 0.5% 2.8% 0.1% Musculo-Skeletal System Q2 FY20 Q2 FY19 0.3% 2.9% 8.4% Parasitology 0.2% 9.9% Blood and Blood Forming Organs 15.2% 7.3% 12.3% Cardiovascular System 9.9% 1.8% Central Nervous System 2.1% 19.1% 16.8% Others Geography International 43.5% 54.3% 45.7% 56.5% Q2 FY20 Q2 FY19 Domestic Q2 FY2020 Earnings Presentation 4
Performance Trend Total Income (Rs. million) and Y-o-Y Growth (%) 7.6% 15.5% 15.4% (3.9)% 2.2% 1,070.4 848.1 784.5 981.1 1,152.1 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 EBITDA (Rs. million) and Margin (%) 23.6% 22.0% 20.7% 16.5% 13.1% 235.2 139.9 103.1 203.4 272.0 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 PAT (Rs. million) and Margin (%) 16.4% 14.0% 12.9% 10.8% 10.8% 150.0 91.5 84.5 126.7 189.1 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Financials are as per IND-AS Q2 FY2020 Earnings Presentation 5
Performance Trend Net Debt / LTM EBITDA Total Debt / Net Worth 0.54x 0.18x 0.18x 0.47x 0.15x 0.13x 0.13x 0.37x 0.36x 0.14x Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 ROCE 1 RONW 2 24.3% 23.7% 21.6% 19.6% 19.5% 20.6% 17.9% 18.8% 17.7% 16.0% Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Financials are as per IND-AS Note: 1. ROCE calculated as LTM EBIT/ Capital Employed 2. RONW calculated as LTM Net Profit/ Net Worth Q2 FY2020 Earnings Presentation 6
Leverage Profile Credit Rating (Rs. million) Mar-2019 Sep-2019 o CRISIL Long Term Debt 17 5 Long term bank facilities: A-/Stable Short Term Debt 301 362 Short term bank facilities: A2+ Total Debt 318 367 o ICRA Less: Cash & Cash Equivalents 55 269 Long term bank facilities: A- Net Debt / (Net Cash) 263 98 Short term bank facilities: A2+ Net Worth 2,493 2,773 Note Balance sheet numbers are as are as per IND-AS Q2 FY2020 Earnings Presentation 7
Recent Developments Secured a patent for Diclofenac Rectal Spray 1 • Recently the company has been awarded with a patent for its liquid Diclofenac Metered-Dose Rectal Spray (Diclofenac Rectal Spray) • The company has necessary approvals from Drug Controller General of India (DCGI) and planning to launch it in the Indian market by January 2020. The Company is also planning to apply for a Global Patent for this novel solution International operations 2 • Aggressively started the business in Francophone African countries and some of the South East Asia Countries • Got many registration in different countries like East and West Africa, South East Asia and Latin America Developed many new NDDS formulations and introduced as a first time in India 3 • Ondansetron Hydrochloride Oral Spray ( DOMI-UP) • Paracetamol 1000 mg Programmed Release Tablet (PA-12) • Micronized Progesterone Vaginal Spray (PROLIN) • Namcold DX Oral Suspension • Caroverine Injection & Capsule (TINNEX): First one to introduce TINNEX for the relief of Tinnitus, tie up with PHAFAG-AG, Switzerland Q2 FY2020 Earnings Presentation 8
Recent Developments Amalgamation between Lincoln Parenteral Limited and Lincoln Pharmaceuticals Limited 4 • Recently board of directors of the company approved the scheme of amalgamation between Lincoln Parenteral Limited ("Transferor Company") and Lincoln Pharmaceuticals Limited ("Transferee Company"). Lincoln Parenteral Limited is subsidiary company of Lincoln Pharmaceuticals Limited engaged in the business of small Parenteral Injection Products • The corporate restructuring will bring lot of synergies for the both the company and will lead to increased competitive strength, cost reduction and efficiencies, productivity gains, and logistic advantages, thereby significantly contributing to future growth Becomes the producer of renewable power energy for captive consumption 5 • In addition to two windmills, the Company has also set up a new Solar Plant of 1 MW at factory’s rooftop with a capacity of producing 15 Lakh Power Unit PA Setting up API production unit 6 • Applied to Pollution Control Board for permission of APIs Unit Q2 FY2020 Earnings Presentation 9
Research & Development Research Facilities R&D Expenditure (Rs. mn) and as % of Sales 4.0% 3.2% 2.4% 2.0% 2.7% 148.1 Senior Scientist 15 117.3 Junior Scientist 18 1.6% 88.5 79.5 Analysts 18 72.6 Regulatory Personnel 12 34.3 Administrative Personnel 9 Others 6 FY14 FY15 FY16 FY17 FY18 FY19 Total 78 Q2 FY2020 Earnings Presentation 10
A Leading Pharmaceutical Company Research & Development Department Market Presence Presence in Presence in 4 Patents granted 1,700 Registered products 60+ 25 25 Patents applications 700 in pipeline Countries States across India 72 nd 300+ 15+ 650+ Field staff Rank in AIOCD Formulations developed Therapeutic areas [Market data, March 2019] 15,000+ Prescribers 30+ 500+ 21+ C&F agents 5,000+ Retailers Scientists SKUs Q2 FY2020 Earnings Presentation 11
Key Milestones Targeting Many New Becomes Public Covered 80% Received WHO – Installed Windmill Developed & Launch 3 products which are Countries in West Africa & GMP for plant / Limited Company of all India 600 KVA launched 2 more first time in India. Entered in Latin America production unit from a Partnership Market NDDS products more (regulated) African and Latin American countries 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2010-11 2008-09 2001 2000 1997-98 1 MW Solar roof top plant 1995-96 installed 1990 Targeting Regulated Market Inspection 1984-85 1979 1979 Launched Next Generation Progesterone Therapy “ Prolin Spray” R&D Center Developed & Installed Windmill Started export to Domestic started; Export Started Launched 3 NDDS 2.1 MW Tanzania and network Operations house certificate products Mauritius across nation received Q2 FY2020 Earnings Presentation 12
Global Footprint Presence over 60 + Countries in Europe, Latin America, Africa, Asia Pacific, South East Asia and 25 States across India Jammu Uttaranchal Chandigarh Delhi Europe : Ambala Ghaziabad France Lucknow Guwahati Jaipur Patna Ranchi Ahmedabad Kolkata Indore Raipur Nagpur Cuttack Vijayawada Chennai South & Central Bangalore Asia : Afghanistan, Armenia, Africa: Angola, Benin, Botswana, America : Bolivia, Azerbaijan, Bhutan, Cambodia, Burkina Faso, Burundi, Cameroon, Chile, Costa Rica, Kochi Fiji, Hong Kong, Iraq, Lebanon, Ethiopia, Gabon, Ghana, Ivory Coast, Ecuador, El-Salvador, Kazakhstan, Mauritius, Myanmar, Kenya, Madagascar, Malawi, Mali, Guatemala, Guyana, Nepal, Philippines, Sri Lanka, Mozambique, Niger, Nigeria, Senegal, Honduras, Jamaica, Thailand, Turkmenistan, International Presence Seychelles, Sierra Leone, Somalia, South Panama, Peru, Uzbekistan, Vietnam, Yemen C&F Agent Location in India Sudan, Sudan, Tanzania, Togo, Uganda, Suriname, Trinidad & Zambia, Zimbabwe, Zanzibar Tobago Q2 FY2020 Earnings Presentation 13
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