#100000 50000 Creating Lasting Value Investor Presentation - November 2015 NSE:SUNPHARMA | BSE:524715 | Bloomberg:SUNP IN | Reuters:SUN.BO WWW.SUNPHARMA.COM SUN PHARMA#2Disclaimer 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 or variations 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. Sun Pharmaceutical Industries Limited does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof. © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 2#3Contents 1 Sun Pharma at a glance 2 Long-term Strategy 3 Global Specialty Initiatives 4 5 Revenue Composition, History & Acquisition Track Record Business Operations, R&D, Manufacturing 6 Corporate Governance 7 8 Financials - P&L, Balance Sheet, Cash Flows & Ratios Key Milestones Targeted © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 3#4Sun Pharma at a glance US India 5th Largest Global Specialty Generic Company Emerging Markets Europe Manufacturing Footprint Market Presence Product Portfolio Employees Quality Compliance R&D and Manufacturing Addressable Segments Ranked 5th in US* / Largest Indian Pharma Company in US • No. 1 Pharma Company in India • Largest Indian Pharma Company in Emerging Markets • Expanding presence in Europe 50 manufacturing sites across the world • Presence in more than 150 countries across branded and generic markets • Portfolio of more than 2,000 products across the world • 30,000+ global employee base • Multiple facilities approved by various regulatory authorities across the world including USFDA • ⚫ Capabilities across dosage forms like injectables, sprays, ointments, creams, liquids, tablets and capsules • Specialty products, branded generics, complex generics, pure generics & APIS SUN PHARMA * Source: Evaluate Pharma for 12 months ended Dec 2014 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 4#5World's 5th Largest Specialty Generic Pharma Co SUN PHARMA 2014 Worldwide Generic Sales (US$ in billions) 9.8 Teva 8.5 Sandoz 6.4 Actavis 6.4 Mylan Sun+ Ranbaxy Sun - 3.0 Ranbaxy - 2.1 5.1 3.0 Aspen Hospira 2.6 Fresenius 2.4 Sanofi 2.3 Ranbaxy 2.1 Lupin 2.0 Dr Reddy's 1.8 Cipla 1.7 STADA 1.6 © Sun Pharmaceutical Industries Limited. All Rights Reserved. Source: Evaluate Pharma, Company filings 5#6SUN PHARMA Western Europe & Other Markets # 8% API & Others Sun Pharma today US Formulations 5th largest generics company in US* with one of the largest ANDAs pipeline (154 ANDAs awaiting approval) Presence in generics, Specialty and branded segments with more than 440 approved products FY15 sales: US$ 2,244 mn (2) India 25% International 75% Geographical sales split Market cap: US$ 33 bn (1) India Branded Generics No.1 ranked with 13 classes of doctor categories Leading position in high growth chronic therapies ⚫ Specializes in technically complex products FY15 sales: US$ 1,099 mn (2) Gross Sales: US$ 4,510 mn (2) EBITDA: US$ 1,295 (29% margin) (2) R&D Investment: 7.2% of Net Sales Globalized supply chain 55% owned by promoter group Strong balance sheet, low debt Strong product pipeline Revenue Break-up Emerging Markets 14% India Branded Generics 24% US Formulation 50% 4% Note: Emerging Markets Presence in over 100 countries across Africa, Americas, Asia and Eastern & Central Europe Key focus markets - Brazil, Mexico, Russia, Romania, South Africa, and complementary & affiliated markets FY15 sales: US$ 611 mn (2) (1) As of October, 31, 2015 using spot exchange rate of INR/USD = 65.22. (2) Using average exchange rate for FY15 of INR/USD = 61.13 # Includes Western Europe, Canada, Australia & New Zealand, Japan and other markets. All sales numbers in US$ for 12 months ended March 31, 2015. * Source: Evaluate Pharma for 12 months ended Dec 2014 © Sun Pharmaceutical Industries Limited. All Rights Reserved. Western Europe, Canada, ANZ & others Presence across majority of markets in Western Europe, Canada and A&NZ Product portfolio includes differentiated offerings for hospitals, injectables and generics for retail market FY15 sales: US$ 381 mn (2) 160#7Driving Long Term Growth Enhance share of specialty business globally Achieve differentiation by focusing on technically complex products Focus on key markets - achieve critical mass ° Speed to market Ensure sustained compliance with global regulatory standards Create sustainable Cost revenue streams leadership Increasing contribution of specialty and complex products Future investments directed towards differentiated products + Balance profitability & investments for future Business development © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA Vertically integrated operations Optimize operational costs Use acquisitions to bridge critical capability gaps Focus on access to products, technology, market presence Ensure acquisitions yield high return on Investment Focus on payback timelines 7#8Our Specialty Initiatives. Ramping up Specialty Pipeline SUN PHARMA • In-licensed MK-3222 (a monoclonal antibody undergoing Phase-III trials targeting IL-23) from MSD for treating chronic plaque psoriasis • Entered into a joint venture with Intrexon Corporation for developing gene-based therapies for ocular diseases • Acquired Dusa Pharma in US – Gets access to patented drug-device combination useful for treating Actinic Keratosis, a dermatology ailment • Acquired InSite Vision - Focuses on developing new specialty ophthalmic products, has three late stage programs. Branded Businesses in US, India and ROW • Ranked no. 3 branded dermatology company in the US market • Market leader in specialty chronic segments in India • Amongst the largest Indian companies in branded emerging markets Complex Generics in US • Firmly established as the no. 1 supplier of generic dermatology products in the US • Current product offering in US includes many specialty generics across different dosage forms. Future product development targeted at complex generics • One of the few companies globally to have farm-to-market capabilities for controlled substances • Key focus areas include dermatology, ophthalmic, oncology, controlled substances, amongst others © Sun Pharmaceutical Industries Limited. All Rights Reserved. 8#9Highly Diversified Revenue Base Sun Pharma (Pre Ranbaxy Acquisition) Rest of World## 12% API & Others 5% 5 year CAGR: 11% India Branded Formulations 23% 5 year CAGR: 38% US Formulations 60% 5 year CAGR: 45% FY14 Sales** Rs 162 billion SUN PHARMA Sun Pharma (Post Ranbaxy Acquisition) Emerging Markets 14% 5 year CAGR: 14% India Branded Formulations 24% Western FY15 Sales* Europe & Other Markets # 8% API & Others 4% Rs 276 billion US Formulations 50% ** Sales for Sun Pharma (excluding Ranbaxy) for 12 months ended Mar' 14. ## Includes all formulations sales excluding US and India * Sales for Sun Pharma (including Ranbaxy) for 12 months ended Mar' 15. # Includes Western Europe, Canada, Australia & New Zealand, Japan and other markets. © Sun Pharmaceutical Industries Limited. All Rights Reserved. 9#10Impressive Track Record of Growth (All Figures in INR Billion) 272.8 Net Sales 39.3 CAGR 11.9 4.4 32% FYOO FY05 FY10 FY15 53.2 Operating Cash Flow 7.8 3.7 0.7 CAGR 34% FYOO FY05 FY10 FY15 78.2 EBITDA 13.6 4.2 1.1 CAGR 33% 4.0 0.8 FYOO FY05 FY10 FY15 29.5 13.1 47.8 FYOO FY05 FY10 FY15 19.9 SUN PHARMA Adjusted Net Profit CAGR 31% Free Cash Flow Adjusted 5.6 EPS (Rs) 5.0 CAGR CAGR 1.7 2.1 37% 0.4 31% 0.4 FYOO FY05 FY10 FY15 © Sun Pharmaceutical Industries Limited. All Rights Reserved. FYOO FY05 FY10 FY15 FY15 numbers include the impact of Ranbaxy merger 10#11Consistent profitability and returns Gross Margin # EBITDA Margin 82% 83% 44% 45% 41% 75% 34% 74% 80% ill Net Margin (adjusted) 35% 32% 32% 32% 29% SUN PHARMA 18% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 ROCE 28% 27% 24% 20% FY11 FY12 FY13 FY14 ROE 31% 26% 24% 18% 21% FY15 # Gross margin = (Net Sales- Material Cost)/ Net Sales * 100 ROCE & ROE exclude one-time exceptional charges Sun Pharmaceutical Industries Limited. All Rights Reserved. 20% Market Cap (USD Bn) 35 20 16 12 10 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY15 numbers include the impact of Ranbaxy merger 11#12Sustained Profitability Vs. Peers Superior business model Margins consistently higher than peers# Gross Margin EBITDA Margin 75% 73% 83% 82% 80% 75% 63% 61% 62% 62% 59% 60% 34% 34% Net Margin 44% 45% 35% 34% 33% 32% 32% 41% SUN PHARMA 18% 29% 14% 14% 12% 13% 9% 7% 22% 20% 20% 19% 19% 17% FY10 FY11 FY12 FY13 FY14 FY15* FY10 FY11 FY12 FY13 FY14 FY15* FY10 FY11 FY12 FY13 FY14 FY15* Sun Pharma Range of Top 10 Indian Pharma Cos. Average Gross margin= (Net Sales - Material Cost) / Net Sales * 100 #Top 10 Indian Pharma company include Aurobindo, Cadila Healthcare, Cipla, DRL, Glenmark, Ipca, Lupin, Ranbaxy, Torrent and Wockhardt. Sun Pharmaceutical Industries Limited. All Rights Reserved. FY15 numbers include the impact of Ranbaxy merger 12#13Creating Value, Continuously... Began with 5 products SUN PHARMA URL PHARMA TARO DUSA a SUN PHARMA company RANBAXY LABORATORIES LIMITED - IPO Rs. 550 Mn raised Acquired URL Acquired Taro Acquired Dusa Acquired Ranbaxy Pharma Year 1983 1993 1994 1997 2010 2011 2012 2013 2014 2015 Market Cap (US$ Bn) as 0.1 0.1 7.8 10.1 12.3 15.6 19.7 34.6 of Mar, 31 of respective years CARACO First Research Centre SPARC, Baroda $7.5Mn invested in Caraco Sun Pharma Today 30,000+ Employees Invested Rs. 70 billion in R&D till date © Sun Pharmaceutical Industries Limited. All Rights Reserved. MERCK INTREXON JV for Emerging JV for Ocular Therapy Markets MERCK Agreement with Merck for in- licensing MK-3222 gsk InSite Vision Solutions for Sight Acquired GSK's Opiates Business & InSite Vision ophthalmic portfolio BSE SENSEX NIFTY туб Stock of the nation Part of NSE Nifty & BSE Sensex in India 50 Manufacturing facilities in 6 Continents 75% of sales from international markets 13#14Key Deals & Rationale SUN PHARMA Year Deals Country 2015 Acquired InSite Vision Inc. US 2015 Acquisition of GSK's Opiates Business Global Markets 2015 Distribution agreement with AstraZeneca India 2015 Sun Pharma - Ranbaxy Merger Global Markets 2014 In-licensing agreement with Merck for MK-3222 a biologic for psoriasis Global Markets 2014 Acquired Pharmalucence US 2013 Formation of Sun-Intrexon JV Global Markets 2013 Acquired URL's generic business US 2012 Acquired DUSA Pharma, Inc. US Rationale Strengthens branded ophthalmic portfolio in U.S. Vertical Integration for controlled substances business Distribution services agreement in India for brand "Axcer"Ⓡ (brand of ticagrelor, used for the treatment of acute coronary syndrome) 5th largest Global Specialty Generic Pharma Company, No.1 Pharma Company in India & Strong positioning in Emerging Markets Strengthening the specialty product pipeline Sterile injectable capacity in the US, supported by strong R&D capabilities JV for ocular therapies Adds 107 products to US portfolio Access to branded derma product 2011 Formation of Sun-MSD JV Emerging Markets Develop and commercialize technology based combinations products Acquired Taro Pharmaceutical 2010 Israel Industries Ltd. 2008 Acquired Chattem Chemicals, Inc. Tennessee, US Assets of Able Labs 2005 Formulation plant in Bryan New Jersey, US Ohio, US Dermatology & Topical Product Manufacturing Plant at Israel & Canada Import registration with DEA, API Plant approved by DEA in Tennessee, US Dosage form plant (NJ, US) and IP Dosage form plant (Ohio, US) 1997 Acquired Caraco Detroit, US Entry into US Market Sun Pharmaceutical Industries Limited. All Rights Reserved. 14#1550 50 100 150 200 FY94 FY95 FY96 FY97 ROCE 300 250 FY98 Successful track record of turning around acquisitions SUN PHARMA 27% 26% 23% 35% 41% 19% 22% 30% 20% 27% 18% 8 Early Acquisitions 4 Acquisitions Recent Acquisitions Net Sales (Rs Bn) © Sun Pharmaceutical Industries Limited. All Rights Reserved. EBITDA (Rs Bn) FY99 FYOO FY01 FY02 FY03 FY04 FY05 FY06 Chattem Assets of: Taro Dusa Bryan URL Hungary Ranbaxy Able Labs *FY15 numbers include the impact of Ranbaxy merger 15 FY15*#16US Business 50% of Revenues SUN PHARMA © Sun Pharmaceutical Industries Limited. All Rights Reserved. 16#17US Business at a glance 5th Largest Pharma Company in the US Generics Market Dermatology Segment Comprehensive Portfolio Robust Pipeline • Largest generic dermatology company and 3rd largest branded dermatology company in the US • Wide basket of 599 ANDAS filed & 445 approved ANDAs across multiple therapies • 154 ANDAs pending FDA approval, including a combination of complex generics, FTF opportunities and pure generics Market Presence • Presence in generics, branded & OTC segments Flexible Manufacturing Dosage Forms • Integrated manufacturer with flexibility for manufacturing onshore/offshore • Liquids, Creams, Ointments, Gels, Sprays, Injectable, Tablets, Capsules, Drug-Device combination © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA * Source: Evaluate Pharma for 12 months ended Dec 2014 17#18US Business - Significant Ramp-up in Sales SUN PHARMA 10 year CAGR 47% 35 23 14 5 15 3 4 11 FY05 FY06 FY07 FY05 - FY14 numbers exclude Ranbaxy financials * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. Sales in Rs billion! 98 137 FY98 Key Milestones in US FY98-FY10 • FY08 onwards FY10 • • Entry in US through Caraco acquisition Ramp-up in US business Launched many complex generics & few FTFs • Acquired Taro Pharma – Entry into dermatology market =2 62 • FY13 Acquired DUSA - Entry in FY13 • . FY14 FY15 • branded specialty market Acquired URL's generic business Acquired Pharmalucence -access to sterile injectable capacity Acquired InSite Vision - Strengthen ophthalmic portfolio FY13 FY14 FY15* 18#19ANDA Pipeline - Significant ramp up ANDAS Filed and Approved SUN PHARMA 445 ANDA Approvals by Therapeutic Area 597 599 106 98 478 449 438 445 397 377 344 311 250 225 207 84 FY10 FY11 FY12 FY13 FY14 FY15 Sep-15 Cumulative Products Filed Cumulative Products Approved (Taro numbers added since Mar 2011, URL numbers added since Mar 2013 & Ranbaxy numbers added for March'15) Sun Pharmaceutical Industries Limited. All Rights Reserved. 61 Pain 40 40 34 30 50 20 20 13 13 30 30 Antibiotic Allergy Oncology Gastro Metabolism Other (As of Sept'15) 19#20India Branded Generic Business 24% of Revenues SUN PHARMA 20 © Sun Pharmaceutical Industries Limited. All Rights Reserved.#21India Business at a glance Market Position** Prescription Ranking## Chronic Segment • No. 1 in India • No. 1 ranked with 8.9% market share • Growth of 15% versus average industry growth of 14% • No. 1 ranked by prescriptions with 13 different classes of doctors Market leader in the chronic segment Acute Segment • Strong positioning in the acute segment SUN PHARMA Product Offering Strong Brand Positioning** De-risked Growth** Extensive Sales Force **- As per AIOCD AWACS data for 12 months ended Sept'15 ## - As per SMSRC data for June'15 © Sun Pharmaceutical Industries Limited. All Rights Reserved. • Specializes in technically complex products and offers a complete therapy basket • 30 brands in the country's top 300 pharmaceutical brands • Top 10 Brands contribute approx. 15% of India revenues • Growth driven by a basket of brands & not few key brands • 9,000+ strong field force covering over 600,000* doctors * Does not exclude overlaps 21#22Largest Pharma Company in India SUN PHARMA (Market Share) Last 12 Months of Branded Generic Sales in India as of Sept 2015 (US$ in mn) 1,334 Sun Pharma+Ranbaxy - 8.9% Abbott 6.3% - Sun Pharma - 5.6% Cipla - 5.0% Zydus Biochem - 4.2% 939 839 743 630 Mankind - 3.5% 525 Lupin - 3.5% 519 Alkem + Cachet + Indchemie -3.5% 518 Glaxo - 3.3% 496 Ranbaxy- 3.3% 495 Pfizer - 3.0% 451 Macleods 2.9% 434 Ints - 2.8% 415 © Sun Pharmaceutical Industries Limited. All Rights Reserved. Source: AIOCD AWACS MAT Sept 2015 22#23India Business - Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 30 brands in top 300 brands of country 7 10 FY05 FY06 10 year CAGR 26% 112 12 15 20 20 17 24 29 20 Sales in Rs Billion Therapeutic Revenue Break-up 30 37 FY13 FY14 FY15* FY05 - FY14 numbers exclude Ranbaxy financials * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. 67 Others, 6% Opthalmology, 3% Neuro-Psychiatry, 18% Respiratory, 4% Dermatology, 4% Gynaecology, 4% Vitamins/ Minerals / Nutrients, 4% Pain / Analgesics, 7% Ophthalmology 9% SUN PHARMA Market Share 8.9% Cardiology, 17% Anti-Infective 12% Gastroenterology, 12% As per AIOCD AWACS - Sept'15 23#24Strong Customer Focus Drives Market Share Gains SUN 200 150 100 50 50 Therapy focused marketing 9,000+ sales representatives Covering over 600,000* doctors Strong increase in market share Sun pharma market share has consistently increased from 2.1% in 2000 to 4.8% in 2014 Including Ranbaxy, current market share is 8.1% (IMS Data for Sept'15) 8.1% * Does not exclude overlaps 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: IMS -Cipla Ranbaxy -Sun -Cadila Lupin DRL Torrent Wockhardt -Ipca © Sun Pharmaceutical Industries Limited. All Rights Reserved. 24 PHARMA#25Specialist Oct '14 Psychiatrists 1 Leadership in key therapeutic areas* Number 1 Ranking with 13 Doctor Categories* Ranking (Sun Pharma) Ranking (Sun + Ranbaxy) June '15 1 Specialist Psychiatrists Neurologists 1 Neurologists 1 Cardiologists 1 Cardiologists 1 Orthopaedic 1 Orthopaedic 1 Ophthalmologists 1 Ophthalmologists 1 Gastroenterologists 1 Gastroenterologists 1 Nephrologists 1 Nephrologists 1 Diabetologists 2 Diabetologists 1 Consulting Physicians 5 Improved Consulting Physicians 1 Dermatologists 6 Rankings Dermatologists 1 due to Urologists 6 Ranbaxy Urologists 1 Chest Physicians 5 acquisition Chest Physicians 1 Oncologists Oncologists 1 *Ranks based on prescription share Source-Strategic Marketing Solutions and Research Centre (SMSRC) Prescription Data Creating Lasting Value - Investor Presentation SUN PHARMA 25#26Best-in-class field force productivity Sales Per Representative (Rs. Mn) FY10 FY14 numbers exclude Ranbaxy * FY15 numbers include the impact of Ranbaxy merger 7.1 9.2 11.1 11.0 10.1 7.5* * FY10 FY11 FY12 FY13 FY14 FY15* Sales Per Representative (Rs. Mn) © Sun Pharmaceutical Industries Limited. All Rights Reserved. Field Force Productivity Sun Pharma • ⚫ Rs 7.5 Mn/ MR Industry Average* • Rs 5.2 Mn/ MR Approximation based on brokerage reports SUN PHARMA Well trained and scientifically oriented sales representatives team with strong performance track record Field force with highest productivity amongst key players in India 26#27Emerging Markets 14% of Revenues SUN PHARMA © Sun Pharmaceutical Industries Limited. All Rights Reserved. 27#28Emerging Markets Business at a glance Largest Indian Company in Emerging Markets Global footprint • Presence in over 100 markets SUN PHARMA • Focus Markets Product Portfolio Customer Focus Brazil, Mexico, Russia, Romania, South Africa and complementary & affiliated markets • Extensive basket of branded products • Strong relationships with doctors and medical practitioners . Sales Force . Over 2,300 Sales Representatives • Opportunity Local Manufacturing © Sun Pharmaceutical Industries Limited. All Rights Reserved. To cross-sell products between Sun Pharma and Ranbaxy marketing infrastructure • Across 10 countries 28#29Western Europe, Canada, ANZ & Other Markets SUN PHARMA 8% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29#30Western Europe & Other Markets at a glance SUN PHARMA Market Presence Product Portfolio Focus Sales Force Amongst the leading Indian Companies . . Across all major markets in Western Europe, Canada, A&NZ and few other markets • Expanding basket of products including injectables and hospital products as well as products for retail market . • Development and commercialization of complex generics and differentiated products to drive sustainable and profitable growth Local Manufacturing © Sun Pharmaceutical Industries Limited. All Rights Reserved. • Distribution led model . At Canada, Hungary & Ireland + Servicing from India facilities 30#31Global Consumer Healthcare Business SUN PHARMA REVITAL Daily Health Supplement W REVITAL OMA N Daily Health Supplement VITAMINS 30 Tablets CALCIUM RANBAXY ERALS IRON RANBAXY VERALS D REVITAL) SENIOR Daily Health Supplement ORANBAXY SOFLAVONES VITAMINS © Sun Pharmaceutical Industries Limited. All Rights Reserved. RANBAXY VOLINI CHERICOF OUGH FORMULA RANBAXY CHERICOF COUGH FORMULA Natural Way To Healthy Heart & Digestion RANBAXY Garlic Pearls With Sweet Cherry Flavour Garlic Pearls 31 Natural Way to my Heart & Digeston 100 Garc Park#32Global Consumer Healthcare Business at a glance India An Attractive Opportunity • Amongst the top 10 consumer healthcare companies Global Presence • Market Focus Strong Brand Equity • Operates in about 20 countries 5 core markets viz., India, Russia, Romania, Nigeria and Myanmar • 4 growth markets viz., Ukraine, Poland, South Africa and Sri Lanka • 5 Brands are category leaders across 3 markets - India, Romania and Nigeria Sales Force • Promoted through dedicated sales force in each market Strong Positioning • Amongst top 10 consumer healthcare companies in India, Romania, Nigeria & Myanmar © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 32#33Active Pharmaceutical Ingredients (API) Business 4% of Revenues SUN PHARMA 33 © Sun Pharmaceutical Industries Limited. All Rights Reserved.#34API Business Backward Integration - Strategic Importance Strategic Importance Customers • Backward integration provides cost competitiveness and supply reliability • Large generic and innovator companies . Product Portfolio · • Approximately 300 APIS Pipeline Development Regulatory approvals Manufacturing • More than 25 APIs scaled up annually • 273 DMF/CEP approvals to date 401 DMF/CEP Filings to date Across 14 facilities © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 34#35Research & Development SUN PHARMA SAMSUNG 0000 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 35 Sym#36Research & Development Cumulative R&D Spend of Rs 70 billion to date R&D Spend • . Capabilities • R&D spend at 7.2% of Net Sales for FY15* Strong cash flows & large scale to support R&D investments Strong research teams in generics, finished dosage development, biological support, chemistry Organization IPR Support • 2,000 scientists globally with capabilities across dosage forms like orals, liquids, ointments, gels, sprays, injectables • Strong team of intellectual property experts supporting R&D (internal and external lawyers) Focus * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. • Developing non infringing formulations and development of specialty/complex products SUN PHARMA 36#37R&D Investments R&D Expenditure 7.8% 6.2% 5.8% 5.6% 6.3% 6.5% 7.2% 7.0 4.4 3.3 3.3 2.5 10.4 Filings and Approvals ANDA 599 19.6 445 SUN PHARMA Patents DMF/CEP 401 1443 273 1024 FY09 FY10 FY11 FY12 FY13 FY14 FY15* Filed Approved Filed Approved Filed Granted R&D Exp (% of Net Sales) R&D Expenses (Rs Bn) FY09 - FY14 numbers exclude Ranbaxy financials * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. As of Sept 30, 2015 37#38Global Manufacturing Presence SUN PHARMA 38 © Sun Pharmaceutical Industries Limited. All Rights Reserved.#39Global Manufacturing Presence World Class Manufacturing Infrastructure Extensive Global Footprint • 50 manufacturing facilities across India, the Americas, Asia, Africa and Europe SUN PHARMA Integrated Network Capabilities High Quality Dosage Forms • Vertically integrated network across four continents enabling high quality, low cost and a quick market entry across the geographies • One of the few companies that has set up completely integrated manufacturing capability for the production of oncology, hormones, peptides, controlled substances and steroidal drugs ⚫High quality manufacturing facilities. Many of the plants have received approvals from US FDA, UK MHRA and various other regulatory authorities • Ability to manufacture a variety of dosage forms - Orals, Creams, Ointments, Injectables, Sprays, Liquids © Sun Pharmaceutical Industries Limited. All Rights Reserved. 39#40Global Manufacturing Footprint Ontario (Canada). (US) Aurora Billerica, MA Brayn Tennessee Philadelphia Cranbury Wilmington M.A- Iztapalapa (Mexico) Casablanca (Morocco),- Cashel (Ireland)____ --New Jersey(US) Lagos (Nigeria). Be-Tabs, South Africa) Rio de Janeiro (India) (Brazil) Baddi-1 Baddi-2 Batamandi Mohali Toansa Goiânia (Brazil) Malanpur Dewas Paonta Sun Pharma's Manufacturing facilities Ranbaxy's Manufacturing Facilities Goa Formulation Plant API Plant Tiszavasvari Haifa (Hungury) (Israel) Formulation & API Plant © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA Cluj (Romania) Giza, (Egypt) Kuala Lumpur (Malaysia) Bangladesh Plant Port Fairy (Australia) --Latrobe, (Australia) (India) Jammu (2 units) Halol -Karkhadi Sikkim (2 units) Silvassa Ankleshwar Panoli Dadra Ahmednagar - Maduranthakam Dahej 40#41Finished Dosage Manufacturing Sun Pharma - 20 Manufacturing sites India 8, US: 6 Canada, Brazil, Mexico, Hungary, Israel, Bangladesh 1 each Capacities available for a variety of finished dosages Ranbaxy 16 Manufacturing sites India 7, US: 1 Ireland, South Africa, Malaysia, Romania, Brazil, Morocco, Egypt and Nigeria : 1 each Orals Tablets/Capsules Injectables / Sterile Topicals Vials Semisolids Ampoules Dry powder Eye drops Creams Ointments Liquids Pre-filled Syringes MDI Suppository Gels Aerosols Lyophilized Units © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 41#42API Manufacturing Sun Pharma - 11 locations India 6, Australia: 2, Israel: 1, US: 1, India: 3 Hungary : 1 Panoli & Ahmednagar (both India) International regulatory approvals: USFDA, European Stand alone units for peptides, anti-cancer, steroids, sex hormones. © Sun Pharmaceutical Industries Limited. All Rights Reserved. ΑΡΙ Key Plants Ranbaxy - 3 locations Australia, Hungary & Tennessee (US) Controlled substances manufacture SUN PHARMA 42#43Corporate Governance Our philosophy on corporate governance envisages working towards high levels of transparency, accountability and consistent value systems across all facets of operations Chairman Israel Makov Former President & CEO of Teva Pharma. Industries Ltd. Independent Directors & Members of Audit Committee Ashwin Dani Non-Executive Vice Chairman, Asian Paints Ltd. Keki Mistry Vice Chairman & CEO, HDFC Ltd. Independent Director Rekha Sethi Director General All India Management Association (AIMA) © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA Hasmukh Shah Former Chairman of Gujarat Gas & Former Chairman & Managing Director, IPCL S. Mohanchand Dadha Former Chairman & Managing Director, TDPL 43#44Financials dreamstime dreamstime dreamstime © Sun Pharmaceutical Industries Limited. All Rights Reserved. reamstime 44 SUN PHARMA Download mar graphics at www.psdgraphics.com#45Financials Market Capitalisation Rs. 2,140 billion / US$ 33 billion SUN PHARMA (All Figures in Rs. Mn) FY11 YOY FY12 YOY FY13 YOY FY14 YOY FY15* P&L Summary Net Sales 57,229 43% 80,057 40% 112,389 40% 160,044 42% 272,865 Gross Profit 42,577 46% 63,644 49% 91,592 44% 132,250 44% 205,473 EBITDA 19,518 43% 32,507 67% 49,063 51% 71,141 45% 78,166 Net Profit 18,161 34% 26,567 46% 29,830 12% 31,415 5% 45,394 Net Profit (Adjusted) 18,161 34% 26,567 46% 35,666# 34% 56,589 # 59% 47,771# R&D Spend 3,313 26% 4,449 34% 7,042 58% 10,418 48% 19,550 BS Summary Mar'11 YoY Mar'12 Shareholders Funds 94,833 Loan Funds 3,651 Net Fixed Assets 27,568 Investments 22,298 21% 122,358 113% 2,650 64% 32,742 -30% 22,129 YoY Mar'13 29% 149,897 -27% 1,982 19% 50,771 -1% YoY Mar'14 YOY Mar'15* 23% 185,250 24% 255,897 -25% 24,890 75,963 55% 58,242 15% 110,201 24,116 9% 27,860 16% 27,163 Cash and Bank Balances 22,046 333% 33,672 53% 40,587 21% 75,902 87% 109,980 Inventory 14,895 39% 20,870 40% 25,778 24% 31,230 21% 56,680 Sundry Debtors 11,049 -6% 20,787 88% Sundry Creditors 6,454 102% 9,927 24,122 54% 10,580 16% 22,004 7% -9% 53,123 13,283 26% 31,538 All figures from FY11 to FY14 exclude Ranbaxy aqcuisition which is effective from 01 April 2014 * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. Exchange Rate: For Market Capitalisation US$1 = Rs 65.22 (As on 31 Oct 2015) # Adjusted for Rs 5.83 bn provision related to generic Protonix settlement for the year 2012-13 and adjusted for Rs 25.17 bn provision related to generic Protonix settlement for the year 2013-14 and adjusted for Rs 2.4 bn for settlement provision for Texas Medicaid Program litigation for 2014-15 45#46Sales Break-up In INR Billion Gross Sales 40 58 81 114 162 276 Taro Consolidation 11 Full year consolidation for URL & Dusa 61 URL & Dusa part- consolidation In USD Million 2,099 2,682 4,510 175 992 8 135 19 316 137 2244 140 281 1620 1132 15 85 98 11 17 5632 6699 17 11 62 35 67 1098 37 24 29 30 546 611 FY10 FY11 FY12 FY13 FY14 Rest of World FY15* API+Others FY13 FY14 FY15* India Formulations US Formulations Rest of world includes all formulations sales excluding US & India FY10 - FY14 numbers exclude Ranbaxy financials * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA #Exchange Rate: US$1 = Rs 54.36 (for FY13) US$1 = Rs 60.41 (for FY14) US$1 = Rs 61.13 (for FY15) 46#47EBITDA Trend In INR Billion Net 39 57 80 Sales 112 160 273 % of Net Sales 21% 19% 17% 27% 26% 25% 13% 14% 15% 12% 14% 16% 24% 25% 24% 27% 26% 30% 44% 44% 41% 34% 34% 29% FY10 FY11 FY12 FY13 FY14 FY15* EBITDA Other Expenditure Personnel Costs Material Costs FY10 - FY14 numbers exclude Ranbaxy financials * FY15 numbers include the impact of Ranbaxy merger © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA Key drivers include Taro, generic Doxil, Doxycycline & other low competition products in US Impact of Ranbaxy acquisition, & temporary supply constraints at Halol facility 47#48Cash Flow Net Cash From Operating Activities (Rs Bn) 8 24 24 22 34 40 40 53 Free Cash Flow (Rs Bn) 5 19 15 25 SUN PHARMA 31 30 FY10 FY11 FY12 FY13 FY14 FY15 FY10 FY11 FY12 FY13 FY14 FY15 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48#49Financial Ratios Growth (%) SUN PHARMA FY11 FY12 FY13 FY14 FY15 Net Sales Gross Profit EBITDA 42.8 39.9 40.4 42.4 70.5 46.3 49.5 43.9 44.4 55.4 43.2 66.5 50.9 45.0 9.9 Net Profit 34.4 46.3 12.3 5.3 44.5 Net Profit (Adjusted) 34.4 46.3 34.3# 58.7# (15.6)# Margins (%) Gross Margin 74.4 79.5 81.5 82.6 75.3 EBITDA Margin (%) 34.1 40.6 43.7 44.5 28.6 Net Margin 31.7 33.2 26.5 19.6 16.6 Net Margin (Adjusted) 31.7 33.2 31.7# 35.4# 17.5# Return (%) ROCE 20.3 23.8 26.7 26.9 17.8 ROE Others Debt/Equity Fully Diluted EPS (Rs) Post bonus Fully Diluted EPS (Rs) Post bonus (Adjusted) R&D Spend % of Net Sales Revenue Capital 21.0 23.8 25.7 30.9 20.4 0.04 0.02 0.01 0.13 0.30 8.8 12.8 14.4 15.2 18.9 8.8 12.8 17.2# 27.3 # 19.9 # 5.8 5.6 6.3 6.5 7.2 5.4 5.1 5.9 6.2 6.7 0.4 0.5 0.4 0.3 0.4 © Sun Pharmaceutical Industries Limited. All Rights Reserved. # Adjusted for Rs 5.83 bn provision related to generic Protonix settlement for the year 2012-13. Adjusted for Rs 25.17 bn provision related to generic Protonix settlement for the year 2013-14. Adjusted for Rs 2.4 bn for settlement provision for Texas Medicaid Program litigation for 2014-15. 49#50Key Financials Q2 FY16 Q2 FY16 (All Figures in Rs. Mn) Q2 FY15 CHANGE -15% SUN PHARMA Net Sales Gross Profit Gross Margin EBITDA 68,033 79,793 52,450 61,621 -15% 77% 77% 18,994 30,061 -37% EBITDA Margin 28% 38% Net Profit 11,067 20,502 -46% Net margin 16% 26% R&D 4,981 4,363 14% R&D as % of Net Sales 7.3% 5.5% EPS (Diluted) INR 4.6 8.5 -46% © Sun Pharmaceutical Industries Limited. All Rights Reserved. 50#51Sales Breakup Q2 & H1 FY16 (All Figures in Rs. Mn) SUN PHARMA Q2 FY16 Q2 FY15 CHANGE H1 FY16 H1 FY15 CHANGE Formulation India 18,187 18,013 1% 36,024 34,074 6% US 33,158 42,630 -22% 64,064 72,860 -12% Emerging Markets 9,089 10,147 -10% 17,537 19,578 -10% ROW 4,968 6,635 -25% 10,716 12,499 Sub-total 65,402 77,424 -16% 128,342 139,012 -8% Bulk Others 3,146 2,790 13% 5,860 4,852 21% 142 334 -58% 356 509 -30% Gross Sales 68,689 80,549 -15% 134,558 144,372 -7% © Sun Pharmaceutical Industries Limited. All Rights Reserved. 51#52Key Milestones targeted for future SUN PHARMA • Enhance share of specialty/branded business US Business • Continue to focus on complex generics and high entry barrier segments • Ensure broad product offering to customers across multiple dosage forms Gain critical mass in key therapeutic segments India Business ROW Business •Improve productivity of India business • Maintain leadership position in a fiercely competitive market . Continuously innovate to ensure high brand equity with doctors • Gain critical mass in key emerging markets • Enhance product basket in emerging markets • Improve profitability in developed European markets © Sun Pharmaceutical Industries Limited. All Rights Reserved. 52 42#53Key Milestones targeted for future Global Consumer • Maintain leadership in existing markets through focus on innovative solutions • Enhance presence in high growth markets Healthcare R&D • Develop more products through expanded R&D team for global markets Focus on developing complex products across multiple dosage forms SUN PHARMA Regulatory/ Quality • Ensuring 24x7 compliance to cGMP is imperative for a global business • Continuously enhance systems, processes, human capabilities to ensure compliance with global regulatory standards . • Ensure resolution of consent decree at Ranbaxy's facilities Financial • Target sustainable and profitable growth • Deliver on the US$ 300 million synergy benefits from Ranbaxy acquisition by FY18 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 53#54FY16 Guidance Consolidated Revenues • To remain flat or show a decline over FY15. Consolidated Profits • In addition to the above revenue impact, profits may be adversely impacted due to certain expenses/charges arising out of integration as well as cGMP remedial actions. Ranbaxy integration Synergy Investing for Future © Sun Pharmaceutical Industries Limited. All Rights Reserved. • To incur certain integration charges in order to generate long- term synergies • Target US$ 300 million in synergy benefits from the Ranbaxy acquisition by FY18 • Invest in R&D and in building critical talent for enhancing our ophthalmic and OTC teams in US as well as for forming a dedicated team for MK-3222 SUN PHARMA 54#55Sun Pharma at a glance US India 5th Largest Global Specialty Generic Company Emerging Markets Europe Manufacturing Footprint Market Presence Product Portfolio Employees Quality Compliance R&D and Manufacturing Addressable Segments Ranked 5th in US* / Largest Indian Pharma Company in US • No. 1 Pharma Company in India • Largest Indian Pharma Company in Emerging Markets • Expanding presence in Europe 50 manufacturing sites across the world • Presence in more than 150 countries across branded and generic markets • Portfolio of more than 2,000 products across the world • 30,000+ global employee base • Multiple facilities approved by various regulatory authorities across the world including USFDA • ⚫ Capabilities across dosage forms like injectables, sprays, ointments, creams, liquids, tablets and capsules • Specialty products, branded generics, complex generics, pure generics & APIS SUN PHARMA * Source: Evaluate Pharma for 12 months ended Dec 2014 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 55#56SUN PHARMA Thank You! For more information please contact: Investors: Nimish Desai Tel: +91 22 4324 4324, Ext 2778 Tel Direct +91 22 43242778 Mobile: +91 98203 30182 [email protected] Corporate Address: Media: Frederick Castro Tel: +91 22 4324 4324, Ext 2777 Tel Direct: +91 22 43242777 Mobile: +91 99206 65176 [email protected] SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2015 Sun Pharmaceutical Industries Limited., All Rights Reserved. "SUN Pharma", The Sun Pharmaceutical Industries Logo are trademarks of Sun Pharmaceutical Industries Limited. 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. NSE:SUNPHARMA, BSE: 524715, Reuters: SUN.BO, Bloomberg: SUNP IN CIN: L24230GJ1993 PLC019050 www.sunpharma.com © Sun Pharmaceutical Industries Limited. All Rights Reserved. 56