#1Laurus Labs Limited Corporate Office 2nd Floor, Serene Chambers, Road No. 7 Banjara Hills, Hyderabad - 500034, Telangana, India T +91 40 6659 4333, 3980 4333, 2342 0500/501 F +91 40 6659 4320/3980 4320 8 LAURUS Labs AUR Knowledge. Innovation. Excellence October 29, 2020 To The Corporate Relations Department BSE Limited Phiroz Jeejeebhoy Towers, 25th Floor, Dalal Street Mumbai 400001 Code: 540222 To The Listing Department National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (East) Mumbai 400 051 Code: LAURUSLABS Dear Sirs, Sub: Investors/Analysts Presentation Please find enclosed the presentation to the Investors/Analysts on the Unaudited Financial Results of the Company for the Quarter and Half year ended September 30, 2020, for the Investors/Analysts call scheduled on October 30, 2020, which was already intimated on October 26, 2020. The presentation is also being uploaded on the website of the Company www.lauruslabs.com. Please take the information on record. Thanking you, Yours sincerely, For Laurus Labs Limited LABS Hyderabad) LIMITED V.V. Ravi Kumar Executive Director & * Chief Financial Officer Encl: As above Registered Office: Plot No:21, Jawaharlal Nehru Pharma City, Parawada, Visakhapatnam - 531021, Andhra Pradesh, India. CIN: L24239AP2005PLC047518 T +91 891 660 1222, 306 1222, F +91 891 660 1270, 306 1270, E [email protected] W lauruslabs.com LAURUS Generics LAURUS Generics LAURUS Synthesis LAURUS Ingredients Active Pharmaceutical Ingredients & Intermediates Finished Dosage Forms Contract Development & Manufacturing Services Specialty Ingredients for Nutraceutical & Allied Industry#2LAURUS Labs Knowledge. Innovation Excellence LAURUS LABS LIMITED Q2 & H1 FY21 INVESTOR PRESENTATION October 29, 2020 BSE: 540222 NSE: LAURUSLABS#3Disclaimer This presentation contains statements that constitute "forward looking statements" including and without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to our future business developments and economic performance. While these forward looking statements represent our judgment and future expectations concerning the development of our business, such statements reflect various assumptions concerning future developments and a number of risks, uncertainties and other important factors that could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, regulatory and legislative developments which could adversely affect our business and financial performance. Laurus Labs undertakes no obligation to publicly revise any forward looking statements to reflect future events or circumstances. No part of this presentation may be reproduced, quoted or circulated without prior written approval from Laurus Labs Limited. 2 LAURUS Labs Knowledge Innovation. Excelence#4Financial Snapshot - Q2 FY21 Revenue (YoY Gr 60 %) Cr EBITDA (YOY Gr 172%) -MARGIN % 33% 29% 1,139 974 23% 21% 839 20% 712 729 378 285 193 139 150 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 21% IPAT (YOY Gr 325%) Margin % 18% 242 13% 10% 172 8% 110 57 74 EPS (face value 2/- per share) (YoY Gr 309%)* 2.1 1.4 1.1 3.2 4.5 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 * The equity shares of the Company of 10/- each sub-divided into 5 equity shares of 2/- each w.e.f. September 30, 2020, accordingly EPS has been restated. 3 | LAURUS Labs Knowledge Innovation. Excelence#5Business Snapshot LAURUS Generics - API Active Pharmaceutical Ingredients & Intermediates Overview • Development, manufacture and sale of APIs and Advanced Intermediates Leadership in various High Value and High Volume APIs with sizeable Global Market share. High potent manufacturing capability in Five manufacturing units. . LAURUS Generics -FDF Finished Dosage Forms Developing and manufacturing oral solid formulations for LMIC, North America & EU Markets. Backed by in house API strengths . LAURUS Synthesis Contract Development & Manufacturing Services Contract development and manufacturing services for global pharmaceutical companies and several late stage projects executed Steroids and Hormone manufacturing capability Sale and manufacture of specialty ingredients for use in nutraceuticals, dietary supplements and cosmeceutical products with natural extraction capability Product and Service Offerings Filings • Infrastructure • Anti-Viral • Anti-diabetic • CVS • PPls • Oncology Commercialized 60+ products • 61 DMFS filed • 4 Manufacturing facilities, (3,425 KL) (1) (2) ~1,000 KL under expansion (1) Includes ingredients products excluding Unit 2 API & Kilo lab capacity Anti-Viral Anti-diabetic • CVS PPls CNS Filed 26 ANDAS with USFDA and 8 Final approvals and 8 tentative approvals In addition completed 2 products validation • Field 12 dossiers in Canada, 9 in Europe, 8 with WHO, 2 in South Africa, 2 in India & 12 products filed in various ROW markets. 5 bn Units/year capacity Capacity enhancement under progress . (2) APIs, Ingredients and Synthesis (other than Aspen supplies) are manufactured at Unit 1,3,4 & 6 Commercial scale contract manufacturing Clinical phase supplies • Analytical and research services . Nutraceuticals, dietary supplements and cosmeceutical products API validation planned in Unit 05 Custom development of ophthalmic portfolio initiated Dedicated manufacturing (Unit - 5) Capacity (137 KL) for steroidal and hormonal intermediates Set up a dedicated block in Unit 4 for high potent phytochemicals APIs Incorporated Laurus Synthesis Pvt. Ltd (LSPL) Capacity (149 KL) 4 LAURUS Labs Knowledge Innovation. Excelence#6467 Segmental Revenue Breakup Generics API 571 522 424 359 160 Generics FDF 292 267 352 452 85 78 Cr Synthesis 148 116 100 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 FY20 FY20 FY20 FY21 FY21 FY20 FY20 FY20 FY21 FY21 FY20 FY20 Q3 Q4 FY20 Q1 Q2 FY21 FY21 Generic API division showcased a healthy growth of 22% YoY Anti Viral segment recorded growth of 20% YoY Q2 FY 21 Contribution 40% Generic FDF Revenue Showcased a robust growth of 183% YoY 50% The growth was led by higher LMIC Market volumes and increased volumes from North America and EU Commenced marketing of in-licensed products in the USA to leverage front-end capabilities 10% Custom Synthesis division recorded a strong growth of 36% YoY ■Generics API ■ Synthesis ■Generics FDF 5 LAURUS Labs Knowledge Innovation. Excelence#7Generic API Division 317 Anti Viral API 214 273 336 379 60 60 Onco API 47 47 59 51 86 Other API 98 90 92 Cr 135 106 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 • Anti Viral API revenue showed a growth of 20% (YoY) Onco API revenue showed a growth of 43% (YoY) Other API revenue showed a growth of 18% (YoY) Q2 FY 21 Contribution 19% ■ Anti Viral 15% ■ Onco 66% ■ Others 6 LAURUS Labs Knowledge Innovation. Excelence#8Generic FDF Division 160 292 267 352 452 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Generic FDF revenue showcased a robust growth of 183% YoY • RoW Markets - Launched TLE 400 in the LMIC market Cr North America - Sales were driven by increased volumes in the US. Launched TLE400 & TLE 600 in US Commenced marketing of products of other manufactures by leveraging our own front end Europe – Entered into a long term partnership with a leading generic player in EU region for Contract Manufacturing Opportunities Two products marketed using own front end 7 LAURUS Labs Knowledge Innovation. Excelence#9Synthesis (CDMO) Division 85 78 148 100 116 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY22 • Revenue from Custom Synthesis division showed a growth of 36% (YoY) Total Number of Active Projects in the CDMO division stood at 49 as on Q2 FY21 Incorporated Wholly Owned Subsidiary to give increased focus and eventually dedicated R&D and Manufacturing Working with Large Global Innovator Pharmaceutical Companies, mid and small Biotech Companies Commercial supplies on-going for 4 products Cr 8 LAURUS Labs Knowledge Innovation. Excelence#105 year Division wise Revenue Contribution Generic 2% 7% 9% 10% FDF 3% 13% 8% 8% 8% 29% 6% 9% 38% 8% Custom 10% Synthesis 14% 10% Other API 11% 11% 7% 82% 77% 74% 7% 66% Onco API Anti Viral ΑΡΙ 39% 34% FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 H1 9 LAURUS Labs Knowledge Innovation. Excelence#115 years Return Ratios Pre Tax Return on Capital Employed(1) (%) 37.5% 16.5% 13.7% 8.2% Return on Equity(2) (%) 41.8% 17.4% 14.1% 11.9% 6.2% 15.3% Net Debt/EBIDTA (3) (x) 2.8x 2.2x 1.9x 1.9x 0.8x FY17 FY 18 FY 19 FY 20 H1 FY21 FY17 FY 18 FY 19 FY 20 H1 FY21 FY17 FY 18 FY 19 FY 20 H1 FY21 Note: Based on consolidated financials as per Ind AS H1 FY 21 ratios are calculated based on annualized numbers (1) Pre-tax RoCE is calculated as EBIT/Average Capital Employed. Capital employed is defined as Net Worth + Long Term and Short Term Borrowings + Current Portion of Long Term Borrowing - Cash (2) RoE is calculated as PAT/Average Net Worth (3) Net Debt means total debt less cash balance as on 30th September 2020 10 LAURUS Labs Knowledge Innovation. Excelence#12COVID - 19 Response Q2 FY21 saw normal levels of production, with rigorous safety, hygiene and cleaning protocols at all Manufacturing Facilities. Operations were at a steady state at Corporate Office and R&D center with all the scientist working onsite. A thorough thermal scanning and sanitization protocol was Safety and wellbeing introduced at all the plants and of our people offices. Monitoring employees for signs & symptoms through voluntary disclosure. 2m Social distancing in canteens and in company and in transport. Laurus Labs Priorities in the uncertain times of Pandemic Vehicles transporting employees were sanitized thrice a day. Transport shift system to reduce density on site. Regular Testing was also introduced for employees. Work from home where possible and other protection measures for employees allowed operations to return to normal levels. Focus on Operating efficiencies Resilient supply chain in place. We continue to have normal supply levels for all our products and believe it will remain at normal levels throughout the pandemic. Manufacturing facilities currently operating at almost full capacity Laurus Labs contributions to help the government respond to Covid-19 containment ~ Rs. 55 million for H1 FY21 We provided financial incentives to our Employees Laurus Labs Donated 480,000 doses of Hydroxychloroquine (HCQ) to the governments of Telangana, Andhra Pradesh, and Kerala in addition to a financial contribution of Rs. 5 million to each AP & Telangana States. Provided food to the needy and poor. Also provided PPES to frontline workers in the police department and medical colleges who are treating Covid-19 patients and containment centers. 11 LAURUS Labs Knowledge Innovation. Excelence#13Manufacturing Facilities at Parawada, Vizag Unit-I Unit-III Unit-V • • LAURUS . • . • Located at Jawaharlal Nehru Pharma City, Vishakhapatnam, India. • • • . API manufacturing facility and includes capacity for ingredients, synthesis and contract manufacturing. Commenced operations in 2007. 328 reactors with 1,226 Kilo Liters capacity. Received approvals from US FDA, WHO-Geneva, NIP - Hungary, KFDA, COFEPRIS, PMDA, ANVISA & JAZMP Slovenia. - Located at Jawaharlal Nehru Pharma City, Vishakhapatnam, India. API manufacturing facility and includes capacity for ingredients, synthesis and contract manufacturing. Commenced operations in 2015. 228 reactors with 1,726 Kilo Litres capacity. Received approvals from USFDA, WHO - Geneva, NIP - Hungary, COFEPRIS, KFDA, ANVISA & JAZMP Slovenia. Located at Jawaharlal Nehru Pharma City, Vishakhapatnam, India. (SEZ) A dedicated Hormone and Steroid facility for Aspen Commenced operations in 2017. • 46 reactors with 137 Kilo Litres capacity. 12 LAURUS Labs Knowledge Innovation. Excelence#14Manufacturing Facilities at Achutapuram, Vizag Unit-II Unit-IV Unit-VI • Located at APIIC, Achutapuram, Visakhapatnam, India. (SEZ) • FDF and API manufacturing facility • • Commenced operations in 2017. - FDF capacity of 5 bn tablets/capsules per year. Capacity expansion initiated and will be operational by December 2020 • API block with 12 reactors with 83 Kilo Liters capacity. . Received approvals from BVG Hamburg Germany, USFDA, WHO - Geneva, JAZMP Slovenia, ANVISA and various African Countries - • • Located at APIIC, Achutapuram, Visakhapatnam, India. • . API manufacturing facility and includes capacity for Ingredients, Synthesis and Contract Manufacturing. Commercial operations in 2018 . 53 reactors with 208 Kilo Liters capacity • Received approval from WHO, USFDA and COFEPRIS - Mexico Located at APIIC, Achutapuram, Visakhapatnam, India. • API manufacturing facility. • Commercial operations in 2018 46 reactors with 265 Kilo Liters capacity. • Received approval from USFDA 13 LAURUS Labs Knowledge Innovation. Excelence#15Quality Focus & Regulatory Audits Facility Key Agencies Recent Inspection Year Kilo Lab - R&D Unit 1 Unit 2 Unit 3 USFDA 2016 EIR received USFDA, WHO - Geneva, ANVISA, COFEPRIS - Mexico and JZAMP Slovenia - 2019 20EIR Received, and cGMP certification received USFDA, WHO - Geneva, BGV Hamburg, ANVISA, JZAMP - Slovenia & Various African Countries USFDA, WHO - Geneva, ANVISA, COFEPRIS-Mexico and JZAMP Slovenia 2019 20-EIR Received, and cGMP certification received 2019 - 20 - EIR received, and cGMP certification received Laurus' Philosophy "One Quality Standard for all markets" Unit 4 WHO, USFDA & COFEPRIS - Mexico 2019-20EIR received & CGMP certification received Unit 5 Unit 6 USFDA No DMFs Filed 2019 EIR received 14 LAURUS Labs Knowledge Innovation. Excelence#16Strong R&D Capabilities R&D Centre - Hyd 166 160 134 LAURUS 114 85 85 7.4% 7.1% 5.6% 5.7% 4.8% Current Filings Status 4.0% FY16 FY17 FY18 FY 19 FY 20 FY 21 H1 R&D Spend Cr -% of Revenue Therapy US ANDA Europe Canada Patents DMFS Filed Patents Granted ARV 15 4 5 Anti-Diabetic 3 3 2 CVS 3 Cumulative Filings 61 264 130 CNS 1 1 1 Others 4 1 4 Total 26 9 12 15 LAURUS Labs Knowledge Innovation. Excelence#17Outlook for FY21 & Beyond Healthy Revenue visibility on the back of robust Order Book Changing business mix to drive growth Capacity augmentation to result in better return ratios • • • • • Partnership with Global Fund offers higher volume contracts with reasonable predictability in FDF Tender business. Have a healthy order book for FY 21 & beyond in FDF CMO business with a strategic partner in EU Robust growth in Other API segment to continue on the back of higher order book visibility from key therapeutic segments like CVS, Anti Diabetic and PPIs Several new customers added with programs in various clinical phases Incorporated a Wholly Owned subsidiary to give increased focus and eventually dedicated R&D and Manufacturing for Synthesis Business Other therapeutic areas and Oncology to offer consistent opportunities to broaden scope, with ongoing new product introduction • • • Generic FDF segment contributed ~38% in H1 FY 21 to total revenue as against just 2% in FY19 Non ARV API business to contribute significantly showcasing the speed of diversification of revenues. The change in revenue & product mix to generate better profitability & margins Synthesis business to show gains in line with new customer additions in CDMO Incremental contribution from Ingredients business. Acquired Aspen's South African Subsidiary, in order to get a foothold in worlds' largest Generic Accessible ARV market • • • Among top 5 in India in terms of Reactor capacities All the green field expansion have turned Cash positive in FY20 with near maximum utilization Continue to undertake Brown Field Capex programs for Capacity addition in • line with strong order book visibility and business outlook Brown Field capex in existing sites to have shorter payback period and ROCE accretive Doubling our FDF capacity by FY22 Acquired assets of an API Unit in Vizag to be used for backward integration and pre-clinical chemistry Initiating green field expansion for all the divisions (API, FDF and Synthesis) • • • 16 LAURUS Labs Knowledge Innovation. Excelence#18Key Milestones • • Crossed INR 20 billion of revenue Investment of INR Set up the R&D Centre at IKP, Knowledge Park, Hyderabad 600 mn by FIL Capital . Investment of INR 3000 mn by Warburg Pincus Incorporated First • Subsidiary in USA. • Successfully listed on BSE &NSE Management and . Forged partnership • Filed first ANDA for US market • Promoters. with ASPEN for CRAMS • Acquired 100% stake • in Sriam Labs Pvt Ltd. 2006 Commenced commercial operations from Unit 4 Incorporated a subsidiary in Germany Commenced FDF supplies. 2018 2019-20 2016 2017 2014 2015 2013 2012 2007 • Commenced commercial Crossed INR 10 billion operations at Unit 1 of revenues • Commenced commercial operations at Unit 3, Forged partnership with NATCO Commenced commercial operations at Unit 2 Commenced commercial supplies from Unit 5 for Aspen Incorporated • Incorporated Laurus Synthesis Pvt. Ltd & acquired assets of an API Unit in Vizag Acquired Aspen's South Africa Subsidiary Laurus Generics SA(PTY) Limited Entered into Strategic partnership with Global Fund for 3.5 years. Highest on-time delivery in FDF orders subsidiaries in UK & USA • • • Maiden EIR received for Unit 4 • Laurus Synthesis Inc USA is merged with Laurus Generics Inc USA. 17 LAURUS Labs Knowledge Innovation. Excelence#19Board of Directors & Leadership Team Executive Directors Name Dr Satyanarayana Chava Background ■Whole-time Director, Founder and Chief Executive Officer ■Whole-time Director and CFO Ravi Kumar V V Dr Lakshmana Rao CV ■Whole-time Director and Head, Quality Non-Executive Directors Name Dr. M. Venu Gopala Rao Chandrakanth Chereddi Aruna Rajendra Bhinge Dr. Rajesh Koshy Chandy Dr. Ravindranath Kancherla Background ■Non Executive Chairman and Independent Director ■Non-Executive Director, Former Head of Generic FDF and Strategy at Laurus Labs Limited ■Independent Director; Former Head of Food Security Agenda, APAC at Syngenta India Limited Independent Director; Professor of Marketing at the London Business School ■Independent Director and Founder-Member and Treasurer of ELSA of Asia in Singapore and Chairman of Global Hospitals Dr. Satyanarayana Chava Founder & CEO Mr V.V Ravi Kumar ED & CFO Dr. Lakshmana Rao C V ED & Head, Quality Dr. V Uma Maheswer Rao Exec. VP & Head, API & R&D Mr. S. Srinivasa Rao Exec. VP - Operations Mr. Krishna Chaitanya Chava Corporate Development, Synthesis G. Venkateshwar Reddy CS & AVP - Legal & Secretarial 18 LAURUS Labs Knowledge Innovation. Excelence#20Ownership Structure Corporate Structure Laurus Labs Limited India Sriam Labs Pvt Ltd. India Laurus Holdings Ltd. UK Laurus Synthesis Pvt. Ltd Laurus Generics SA (PTY) Limited ^Laurus Generics Inc. Laurus Generics GmbH. USA 32.12% 3.3% Germany Shareholding pattern 20.7% * 3.2% 40.7% Promoter and Promoter Group Mutual Funds Foreign Portfolio Investors QIBs All are 100% Subsidiaries Non- Institutions (Individuals + Others) 19 * As of 30th Sept 2020 ^ Laurus Synthesis Inc USA is merged with Laurus Generics Inc USA from Sept 30th 2020 LAURUS Labs Knowledge Innovation. Excelence#21Results Conference Call Results conference call on Friday October 30, 2020 at 11:00 AM IST Details of the conference call are as follows: Timing Conference dial-in Universal Dial-In India Local access Number Singapore Hong Kong USA UK 11:00 am IST on Friday, October 30, 2020 +91 22 6280 1214 +91 7045671221 Available all over India +6531575746 +85230186877 +13233868721 +442034785524 20 20 LAURUS Labs Knowledge Innovation. Excelence#22Contact us About Laurus Labs Ltd. Laurus Labs is a leading research driven Pharmaceutical manufacturing Company in India. We have grown to become one of the leading manufacturers of API for Anti-Retroviral (ARV), Oncology, Cardiovascular, Anti-Diabetics, Anti-Asthma and Gastroenterology .We are thriving on growth opportunities in formulation manufacturing to service all leading markets of North America, Europe and Low Middle Income Countries (LMIC). We are driving growth opportunities in Contract Development and Manufacturing through our Synthesis business. Most of our manufacturing facilities are approved by major regulatory authorities USFDA, WHO-Geneva, UK-MHRA etc. Our approach remains to identify and invest ahead of time with strategic investments in State-of-the- Art R&D and Manufacturing Infrastructure enabling us to become a quality supplier of high volume products. Corporate Identification No: L24239AP2005PLC047518. SPECIAL QUARTERLY ISSUE FORTUNE 500 INDIA'S LARGEST CORPORATIONS THE CHINA 500 THE BRIC & OVETS 200 Great Place To Work.Ⓡt Certified NOV 2019-OCT 2020 INDIA Laurus Labs continues to be in the Fortune 500 Companies List in India since 2017 Laurus Labs is certified as "Great Place to Work" for the second consecutive year 2019 For more information about us, please visit www.lauruslabs.com or contact: Monish Shah Tel: +91 040 6659 4366 Email: [email protected] 21 LAURUS Labs Knowledge Innovation. Excelence#23Thank You