#110000 00000 Creating Lasting Value Investor Presentation - May 2018 NSESUNPHARMA | 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 PHARMA © Sun Pharmaceutical Industries Limited. All Rights Reserved. 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 Amongst the largest Indian Pharma Company in Emerging Markets Expanding presence in Europe • 41 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 Estimates for 12 months ended Dec 2017 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 4#5World's 5th Largest Specialty Generic Pharma Co SUN PHARMA 2017 Worldwide Generic Sales (US$ in billions) 11.2 Teva Mylan Novartis 11.2 8.8 Pfizer 5.2 Sun Pharma 4.1 Fresenius 3.0 Lupin 2.4 Endo 2.3 Aurobindo 2.1 Aspen Pharmacare 2.0 Sanofi 2.0 Dr. Reddy 1.7 Nichi-Iko Pharma 1.6 Apotex 1.6 Zydus Cadila 1.6 Source: Evaluate Pharma Estimates for 12 months ended Dec 2017 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 5#6Sun Pharma today Note: US Formulations 5th largest generics company in US* with a strong pipeline (139 ANDAS & 3 NDAs awaiting approval) Presence in generics, Specialty and branded segments with more than 422 approved products FY18 sales: US$ 1,357 mn (2) India 32% FY18 International 68% Emerging Markets Geographical sales split Market cap: US$ 17 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 FY18 sales: US$ 1,246 mn (2) Gross Sales: US$ 4,044 mn (2) EBITDA: US$ 804 (21% margin) (2) R&D Investment: 8.6% of Sales Globalized supply chain 54% owned by promoter group Strong balance sheet, low debt Strong product pipeline 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 FY18 sales: US$ 751 mn (2) (1) As of May, 31, 2018 using spot exchange rate of INR/USD = 67.62 (2) Using average exchange rate for FY17 of INR/USD = 64.46 # Includes Western Europe, Canada, Australia & New Zealand, Japan and other markets. All sales numbers in US$ for 12 months ended March 31, 2018. * Source: Evaluate Pharma Estimates for 12 months ended Dec 2017 © Sun Pharmaceutical Industries Limited. All Rights Reserved. Revenue Break-up SUN PHARMA Emerging Markets 19% Western Europe & Other Markets # 11% India Branded Generics 31% FY18 API & Others 6% US Formulation 33% Western Europe, Canada, Japan ANZ & others Presence across majority of markets in Western Europe, Canada, Japan and A&NZ Product portfolio includes differentiated offerings for hospitals, injectables and generics for retail market FY18 sales: US$ 461 mn (2) 6#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 ↓ Balance profitability & investments for future Business development Increasing contribution of specialty and complex products Future investments directed towards differentiated products © 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 In-licensed Ilumya (a monoclonal antibody targeting IL-23) from MSD for treating chronic plaque psoriasis- Biologics License Application (BLA) Filed with US FDA and EMA for European market. USFDA approval received in March 2018. Launch preparations are ongoing. • Acquired Ocular Technologies - Gives access to global rights for OTX-101 - for treating Dry Eye Disease. Announced positive results from confirmatory Phase-3 trials in Jan'17. Filed NDA with USFDA in Q3 FY18. Evaluate other markets for filing OTX-101. . Acquired branded oncology product – Odomzo – in Dec'16. Product is approved in 30 countries globally including US, Europe and Australia. Currently marketed in US and Germany. • Launched BromSite - first specialty ophthalmology product in US in Nov'16 • Acquired Dusa Pharma in US - 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. • In-licensed Xelpros (ophthalmology) and Elepsia (CNS) products from SPARC © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 8#9Highly Diversified Revenue Base Emerging Markets 19% Western Europe & Other Markets # 11% India Branded Formulations FY18 Sales Rs 261 billion 31% © Sun Pharmaceutical Industries Limited. All Rights Reserved. API & Others 5% US Formulations 34% SUN PHARMA # Includes Western Europe, Canada, Japan, Australia, New Zealand and other markets. 9#10Impressive Track Record of Growth (All Figures in INR Billion) 260.7 49.1 51.8 SUN PHARMA CAGR 19% FY03 FY08 FY13 FY18 14.9 Net Profit Adjusted 8.3 33.6 112.4 FY03 FY08 FY13 FY18 Sales CAGR 26% 2.8 FY03 FY08 FY13 FY18 EBITDA CAGR 22% 2.5 15.5 TTT 33.7 35.7 70.8 22.3 Operating Cash Flow CAGR 29% 1.5 2.4 FY02 FY07 FY12 FY17 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33.9 15.2 Free Cash Flow CAGR 0.8 0.0 29% FY02 FY07 FY12 FY17 1.0 14.9 14.0 6.2 Adjusted EPS (Rs) CAGR 19% FY03 FY08 FY13 FY18 10#11Consistent profitability and returns Gross Margin # 83% 77% 75% 73% 72% EBITDA Margin 45% Net Margin (adjusted) 35% 29% 29% 27% 23% 19% 18% 20% SUN PHARMA 13% FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 ROCE 27% 14% 15% 16% 8% ROE 31% 19% 20% 18% 9% Market Cap (USD Bn) 35 30 ili 25 18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 # Gross margin = (Net Sales- Material Cost)/ Net Sales * 100 ROCE & ROE exclude one-time exceptional charges (Market Cap as on 31st March) © Sun Pharmaceutical Industries Limited. All Rights Reserved. 11#12Sustained Profitability Vs. Peers Superior business model Margins consistently higher than peers# Gross Margin 83% 82% 77% 75% 73% 72% 66% 64% 63% 63% 62% 62% EBITDA Margin Net Margin 44% 45% 29% 29% 28% 35% 32% SUN PHARMA 23% 19% 22% 23% 18% 20% 14% 14% 14% 19% 19% 19% 12% 13% 10% 8% 18% FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 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, Ranbaxy, Glenmark, Ipca, Lupin, Torrent and Wockhardt. © Sun Pharmaceutical Industries Limited. All Rights Reserved. 12#13Creating Value, Continuously... Began with 5 products CARACO DUSA • URL PHARMA a SUN PHARMA company • $7.5Mn TARO invested in Caraco Acquired Dusa Acquired URL Acquired Taro Pharma • Licensing agreement with Almirall for Tildrakizumab in Europe for Psoriasis Announced positive results from Phase-3 trials for Tildrakizumab SUN PHARMA Entry into Japan -Acquired 14 brands from Novartis Acquired Biosintez in Russia Acquired Global rights for OTX-101 & Odomzo BromSite launch in US Year 1983 1994 1997 2010 2012 2013 2014 2015 2016 2017 2018 Market Cap (US$ 0.1 0.1 7.8 12.3 15.6 19.7 34.6 30.0 25.5 18.3 Bn) as of Mar, 31 of respective years - IPO Rs. 550 Mn raised MERCK Agreement with Merck for in- licensing Tildrakizumab RANBAXY LABORATORIES LIMITED Acquired Ranbaxy Sun Pharma Today 30,000+ Employees Invested over Rs 130 Bn in R&D till date © Sun Pharmaceutical Industries Limited. All Rights Reserved. • US FDA approval InSite Vision Solutions for Sight Acquired InSite Vision ophthalmic portfolio • for Ilumya & Yonsa Announced positive Phase-3 results for OTX-101 & filed NDA with USFDA • Tildrakizumab filing in US & Europe • Launched Odomzo in US BSE SENSEX NIFTY Stock of the nation Part of NSE Nifty & BSE Sensex in India 41 Manufacturing facilities in 6 Continents 68% of sales from international markets 13#14Key Deals & Rationale Rationale SUN PHARMA Enhances specialty pipeline. Local manufacturing capability to enhance presence in Russian market Strengthening the distribution of Tildrakizumab in Europe Year Deals Country Acquired global rights for OTX-101 & 2016 Global Odomzo 2016 Acquired Biosintez Russia 2016 Licensing agreement with Almirall for Tildrakizumab for Psoriasis Europe 2016 Acquired 14 brands from Novartis Japan Entry into Japan Distribution agreement with 2016 India AstraZeneca 2015 Acquired InSite Vision Inc. US 2015 Acquisition of GSK's Opiates Business Global Markets 2015 Distribution agreement with AstraZeneca India Distribution services agreement in India for brand "Oxra" & "Oxramet"Ⓡ (brands of dipagliflozin, used for diabetes treatment) 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) Strengthen position as the 5th largest Global Specialty Generic Pharma Company, No.1 Pharma Company in India & Strong positioning in Emerging Markets Strengthening the specialty product pipeline 2015 Sun Pharma - Ranbaxy Merger Global Markets 2014 In-licensing agreement with Merck for Tildrakizumab a biologic for psoriasis Global Markets 2014 Acquired Pharmalucence US Sterile injectable capacity in the US 2013 Acquired URL's generic business US Adds 107 products to US portfolio 2012 Acquired DUSA Pharma, Inc. US Acquired Taro Pharmaceutical 2010 Israel Industries Ltd. 1997 Acquired Caraco Detroit, US Access to branded derma product Dermatology & Topical Product Manufacturing Plant at Israel & Canada Entry into US Market © Sun Pharmaceutical Industries Limited. All Rights Reserved. 14#15Successful track record of turning around acquisitions SUN PHARMA ROCE 27% 26% 23% 35% 41% 19% 22% 30% 20% 27% 14% 16% 8% 350 8 Early Acquisitions 4 Acquisitions Recent Acquisitions 300 Assets of: Taro Bryan Dusa 250 Hungary URL Able Labs Ranbaxy 200 150 100 50 FY94 • FY95 FY96 FY97 FY98 FY99 FYOO Sales (Rs Bn) EBITDA (Rs Bn) © Sun Pharmaceutical Industries Limited. All Rights Reserved. Chattem InSite Vision Ocular Tech Odomzo Yonsa FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 15#16US Business 34% 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 . * • Largest generic dermatology company and amongst top 5 branded dermatology company in the US Comprehensive Portfolio Robust Pipeline Market Presence • • Wide basket of 561 ANDAs & 42 NDAs filed and 422 ANDAS & 39 NDAS approved across multiple therapies • 139 ANDAS & 3 NDAs pending FDA approval, including a combination of complex generics, FTF opportunities and pure generics • 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 Estimates for 12 months ended Dec 2017 17#18US Business - Significant Ramp-up in Sales. Key Milestones in US SUN PHARMA Entry in US through Caraco acquisition Acquired Taro Pharma - Entry into US dermatology market Sales in Rs billion FY98 10 year CAGR 20% 137 138 FY10 135 FY13 • Acquired DUSA - Entry in branded specialty market FY13 • Acquired URL's generic business 98 . FY14 Acquired Pharmalucence -access to sterile injectable capacity 87 35 23 14 15 11 62 32 © Sun Pharmaceutical Industries Limited. All Rights Reserved. FY16 FY17 FY18 . • Acquired InSite Vision - Strengthen ophthalmic portfolio • Tildrakizumab filing in US & Europe market • Acquired Ocular Technologies giving access to OTX-101, a product for treating dry eyes. • Launched BromSite in US • Acquired Odomzo-branded oncology product from Novartis Launched Odomzo in US Settlement of Patent Litigation for Generic LinzessⓇ in US • US FDA approval for Ilumya 18#19ANDA Pipeline - Significant ramp up. ANDAS Filed and Approved 597 584 572 561 478 449 438 427 422 413 397 344 311 250 FY12 FY13 FY14 FY15 FY16 FY17 FY18 I Cumulative Products Filed Cumulative Products Approved (Cumulative no's for FY16 are lower than FY15 due to Bryan facility divestment. 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. SUN PHARMA 422 ANDA Approvals by Therapeutic Area 110 97 CVS 00 60 46 30 19 15 12 7 26 Pain Allergy Oncology Metabolism Antibiotic Gastro Other (As of March'18) 19#20India Branded Generic Business 31% of Revenues SUN PHARMA © Sun Pharmaceutical Industries Limited. All Rights Reserved. 20 20#21India Business at a glance No. 1 in India . • No. 1 ranked with 8.5% market share Market Position** SUN PHARMA Prescription Ranking## • Chronic Segment • Acute Segment Product Offering Strong Brand Positioning** De-risked Growth** Extensive Sales Force . • Growth of 6% equal to average industry growth of 6% • • No. 1 ranked by prescriptions with 13 different classes of doctors Market leader in the chronic segment Strong positioning in the acute segment • 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. 18% of India revenues Growth driven by a basket of brands - low product concentration • 9,200+ strong field force covering over 600,000* doctors ** - As per AIOCD AWACS data for 12 months ended March'18 ## As per SMSRC data for Feb'18 - © Sun Pharmaceutical Industries Limited. All Rights Reserved. * Does not exclude overlaps 21#22Largest Pharma Company in India SUN PHARMA Market Share Branded Generic Sales in India as of 12 Months ended Mar 2018 (US$ in mn) Sun Pharma 8.5% Abbott Abbott HC + Novo 6.2% Cipla 4.6% Zydus Biochem 4.2% 672 Mankind 3.6% Lupin 3.6 Alkem Cachet + Indchemie 3.5% 586 Torrent 3.2% 557 Glaxo 3.0% 527 Macleods 2.8% 518 Intas 2.8% Emcure+Zuventus 2.6% 475 669 641 770 850 1,572 1,155 © Sun Pharmaceutical Industries Limited. All Rights Reserved. Source: AIOCD AWACS MAT Mar 2018 data converted at average of Rs. 64.46/US$ 222#23India Business - Sales ramp-up Leadership in chronic segment; Strong positioning in acute segment 32 brands in top 300 brands of country Sales in Rs Billion Therapeutic Revenue Break-up 15 20 20 10 year CAGR 18% 17 24 29 30 30 37 67 71 77 80 50 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 © Sun Pharmaceutical Industries Limited. All Rights Reserved. Others Opthalmology 2% 6% Respiratory 4% Cardiology 18% Vitamins/ Minerals / SUN PHARMA Nutrients, 4% Gynaecology, 4% Dermatology, 6% Market Share 8.5% Neuro-Psychiatry 18% Pain Analgesics 7% Diabetology, 9% Anti-Infectives 10% Gastroenterology 12% • As per AIOCD AWACS – March '18 23#24Strong Customer Focus Drives Market Share Gains SUN PHARMA Therapy focused marketing 9,200+ sales representatives Covering over 600,000* doctors Strong increase in market share Sun pharma market share has consistently increased from 2.4% in 2000 to 8.0% in 2017 (IMS Data for March'18) * Does not exclude overlaps Market Share (%) as per IMS Dec MAT Year -2000 % Year -2005 % Year -2010 % Year -2015 % Year -2017 % Sun Pharma 2.4 Sun Pharma 3.3 Sun Pharma 3.7 Sun Pharma 8.0 Sun Pharma 8.0 Cipla 4.7 Cipla 5.1 Cipla 5.4 Cipla 5.2 Cipla 5.2 Lupin 2.0 Lupin 2.2 Lupin 2.7 Lupin 3.2 Lupin 3.5 Cadila 3.8 Cadila 3.7 Cadila 3.7 Cadila 3.4 Cadila 3.2 DRL 2.6 DRL 2.3 DRL 2.3 DRL 2.4 DRL 2.2 Torrent 1.8 Torrent 1.9 Torrent 2.0 Torrent 2.4 Torrent 3.3 Glenmark 1.0 Glenmark 1.2 Glenmark 1.5 Glenmark 2.0 Glenmark 2.2 Wockhardt 2.2 Wockhardt 1.9 Wockhardt 2.0 Wockhardt 1.6 Wockhardt 1.5 Ipca 1.1 Ipca 1.3 Ірса 1.4 Ipca 1.5 Ipca 1.5 Ranbaxy 4.8 Ranbaxy 4.9 Ranbaxy 4.9 Unichem 1.0 FDC 1.0 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 24#25Leadership in key therapeutic areas* Number 1 Ranking with 13 Doctor Categories* Prescription Ranking Specialist Psychiatrists Feb '15 Feb '16 Feb '17 Feb '18 1 1 1 1 Neurologists Cardiologists Orthopaedic Gastroenterologists 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Nephrologists 1 1 1 1 Diabetologists 1 1 1 1 Consulting Physicians 1 1 1 1 Dermatologists 1 1 1 1 Urologists 1 1 1 1 Oncologists 2 1 1 1 Ophthalmologists 1 1 Chest Physicians 1 1 22 1 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) 11.1 11.0 10.1 Field Force Productivity Impact of Ranbaxy Acquisition Sun Pharma Rs 8.6 Mn/ MR 8.6 7.5 7.8 7.4 Industry Average* . Rs 5.2 Mn/ MR FY12 FY13 FY14 FY15 FY16 FY17 FY18 Sales Per Representative (Rs. Mn) © Sun Pharmaceutical Industries Limited. All Rights Reserved. * 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 18% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 27 A#28Emerging Markets Business at a glance Largest Indian Company in Emerging Markets Global footprint Focus Markets • Presence in over 100 markets • Brazil, Mexico, Russia, Romania, South Africa and complementary & affiliated markets SUN PHARMA Product Portfolio . Extensive basket of branded products Customer Focus • Strong relationships with doctors and medical practitioners Sales Force Opportunity Local Manufacturing Russia Acquisition © Sun Pharmaceutical Industries Limited. All Rights Reserved. • Approximately 2,300 Sales Representatives • To cross-sell products between Sun Pharma and Ranbaxy marketing infrastructure • Across 7 countries • Acquired Biosintez to enhance presence in Russian market in Nov' 16 - Gives access to local manufacturing facility. 28#29SUN PHARMA Western Europe, Canada, Japan, ANZ & Other Markets 11% of Revenues © Sun Pharmaceutical Industries Limited. All Rights Reserved. 29 29#30Western Europe & Other Markets at a glance SUN PHARMA Market Presence Amongst the leading Indian Companies • Product Portfolio Focus • Across all major markets in Western Europe, Canada, A&NZ, Japan 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 · Distribution led model Sales Force Local Manufacturing • Japan Entry . • At Canada, Israel and Hungary + Servicing from India facilities Acquired 14 established prescription brands from Novartis in March'16 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 30#31Global Consumer Healthcare Business SUN PHARMA 100 g CLOTRIMAZOLE DUSTING POWDER ABZORB ABSORBENT DUSTING POWDER NEW ALL-ROUND NEW 360 ACTION ANTIFUNGAL ANTIBACTERIAL RANBAXY VOLİNİ © Sun Pharmaceutical Industries Limited. All Rights Reserved. REVITAL I PEPMELT Daily Health Supplement Mowersh Vitamin Glavn PEPFIZ ANSADD Natural Way To Healthy Heart & Digestion BANBAXY Garlic Pearls Garlic Pearls 31#32Global Consumer Healthcare Business at a glance SUN PHARMA India An Attractive Opportunity . Amongst the top 10 consumer healthcare companies Global Presence Market Focus • Strong Brand Equity Sales Force • Operates in about 20+ countries • • Strong Positioning © Sun Pharmaceutical Industries Limited. All Rights Reserved. • Core markets include. India, Russia, Romania, Nigeria, South Africa & Myanmar Growth markets include Ukraine, Poland, Kazakhstan, Thailand & UAE Enjoy strong brand equity in 4 countries • Promoted through dedicated sales force in each market Amongst top 10 consumer healthcare companies in India, Romania, Nigeria & Myanmar 32 2#33Active Pharmaceutical Ingredients (API) Business 6% of Revenues SUN PHARMA © Sun Pharmaceutical Industries Limited. All Rights Reserved. 33#34API Business Backward Integration - Strategic Importance Strategic Importance Customers Product Portfolio • Backward integration provides cost competitiveness and supply reliability • Large generic and innovator companies Approximately 300 APIS Pipeline Development Regulatory approvals Manufacturing Opiates Business Approx. 20 APIs scaled up annually . • 291 DMF/CEP approvals to date 396 DMF/CEP Filings to date • Across 14 facilities . Acquired GSK's Opiates business in Australia in Sept'15 © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 34#35Research & Development 10 © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA SAMSUNG 0000 35#36Research & Development Cumulative R&D Spend of over Rs 130 billion to date . R&D Spend R&D spend at 8.6% of Net Sales for FY18 • Strong cash flows & large scale to support R&D investments Capabilities Organization IPR Support Focus © Sun Pharmaceutical Industries Limited. All Rights Reserved. • Strong research teams in generics, finished dosage development, biological support, chemistry ⚫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) •Developing non infringing formulations and development of specialty/complex products SUN PHARMA 36#37R&D Investments R&D Investments Filings and Approvals SUN PHARMA NDA/BLA DMF/CEP Patents 396 1106 5.6% 6.3% 6.5% 7.2% 8.3% 7.6% 8.6% ANDA 23.0 23.1 22.5 561 42 7.0 4.4 10.4 19.6 422 39 291 1065 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Filed Approved Filed Approved Filed Approved Filed Granted R&D Investments (Rs Bn) R&D Investments (% of Sales) © Sun Pharmaceutical Industries Limited. All Rights Reserved. As of Mar 31, 2018 37#38Global Manufacturing Presence SUN PHARMA © Sun Pharmaceutical Industries Limited. All Rights Reserved. 38#39Global Manufacturing Presence World Class Manufacturing Infrastructure Extensive Global Footprint Integrated Network • 41 manufacturing facilities across India, the Americas, Asia, Africa, Australia and Europe . • Vertically integrated network across six continents enabling high quality, low cost and a quick market entry across the geographies Capabilities High Quality Dosage Forms . • 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. SUN PHARMA 39#40Global Manufacturing Footprint Ontario (Canada)- Tiszavasvari Haifa Penza (Hungary) (Israel) (Russia) SUN PHARMA (US) Billerica, MA New Jersey(US)¯¯ Tennessee Cranbury Wilmington M.A. Formulation Plant API Plant Lagos (Nigeria) Be-Tabs, South Africa) (India) Baddi Mohali Toansa Malanpur Dewas Paonta Goa Formulation & API Plant Cluj (Romania) Giza, (Egypt) Kuala Lumpur (Malaysia) Bangladesh Plant Port Fairy (Australia) --Latrobe, (Australia) (India) Jammu Halol - Karkhadi Guwahati Sikkim (2 units) -Silvassa Ankleshwar Panoli Dadra Ahmednagar -- Maduranthakam ---Dahej © Sun Pharmaceutical Industries Limited. All Rights Reserved. 40#41Finished Dosage Manufacturing 27 Finished dosage manufacturing sites •India 13, US: 4 Canada, Hungary, Israel, Bangladesh, South Africa, Malaysia, Romania, Egypt, Nigeria and Russia 1 each • Capacities available for a variety of finished dosages 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 14 API manufacturing locations India 9, Australia: 2, Israel: 1, US: 1, 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. API Key Plants Australia, Hungary & Tennessee (US) Controlled substances manufacture SUN PHARMA 22 42#43Corporate Governance SUN PHARMA Chairman Israel Makov Former President & CEO of Teva Pharma. Industries Ltd. Independent Director S. Mohanchand Dadha Former Chairman & Managing Director, TDPL Independent Director Rekha Sethi Director General All India Management Association (AIMA) © Sun Pharmaceutical Industries Limited. All Rights Reserved. Our philosophy on corporate governance envisages working towards high levels of transparency, accountability and consistent value systems across all facets of operations Independent Directors Ashwin Dani Non-Executive Vice Chairman, Asian Paints Ltd.. Independent Director Vivek C. Sehgal Chairman, Samvardhana Motherson Group & Motherson Sumi Systems Ltd. Independent Directors Keki Mistry Vice Chairman & CEO, HDFC Ltd. Independent Director Gautam B. Doshi A professional with expertise in M&A, Taxation, Accounting and Corporate and Commercial Laws. 43#44Financials dreamstime dreamstime dreamstime dreamstime © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 44 Dica www.podgraphics.com#45Financials Market Capitalisation Rs. 1,170 billion / US$ 17 billion. FY14 YOY FY15 SUN PHARMA (All Figures in Rs. Mn) YOY FY16 YOY FY17 YOY FY18 YOY P&L Summary Sales 1,60,044 Gross Profit 1,32,250 EBITDA 71,141 45% 42% 2,72,451 44% 2,05,059 77,208 70% 2,78,881 2% 3,02,642 9% 2,60,659 -14% 55% 2,15,577 5% 2,21,335 3% 1,86,413 -16% 9% 75,594 -2% 87,751 16% 51,846 -41% Net Profit 31,415 5% 45,394 44% 45,457 0% 69,644 53% 21,616 -69% Net Profit (Adjusted) 56,589 # 59% 47,771 # -16% 52,309 # 9% 69,644 33% 33,665 # -52% R&D Spend 10,418 48% 19,550 88% 23,025 18% 23,138 0% 22,489 -3% BS Summary Mar'14 Shareholders Funds 1,85,250 YOY Mar'15 24% 2,80,415 YoY Mar'16 51% 3,29,825 YOY Mar'17 18% 3,66,397 YoY Mar'18 11% 3,81,006 YoY 4% Loan Funds 24,890 75,724 204% 83,164 10% 80,910 -3% 97,518 21% Net Fixed Assets 58,242 15% 96,848 Investments 27,860 16% 35,028 66% 1,24,130 26% 18,298 28% 1,49,404 20% 1,57,110 5% Cash and Bank Balances 75,902 87% 1,09,771 45% 1,31,817 -48% 11,919 20% 1,51,408 -35% 71,430 499% 15% 99,290 -34% Inventory 31,230 21% 56,669 Sundry Debtors 22,004 Sundry Creditors 13,283 -9% 50,928 26% 32,430 131% 81% 64,225 67,757 144% 35,830 13% 68,328 6% 68,810 1% 33% 72,026 6% 78,150 9% 10% 43,954 23% 47,660 8% Exchange Rate : © Sun Pharmaceutical Industries Limited. All Rights Reserved. For Market Capitalisation US$1 = Rs 67.62(As on 31 May 2017) # Adjusted for Rs 25.17 bn provision related to generic Protonix settlement for the year FY14 and adjusted for Rs 2.4 bn for settlement provision for Texas Medicaid Program litigation for FY15 and adjusted for Rs 6.9 bn of exceptional items related to Ranbaxy integration for FY16 and adjusted for Rs 12.1 bn provision related to Modafinil settlement & deferred tax adjustment for the year FY18 45#46Sales Break-up In INR Billion Sales 279 303 261 In USD Million 4,262 4,511 4,044 245 16 225 385 15 26 330 229 22 15 675 461 45 548 30 36 138 135 48 87 88 751 2066 2051 1357 77 80 1093 1155 1246 71 FY16 India Formulations Emerging Markets FY17 FY18 FY16 IUS Formulations Rest of World API+Others © Sun Pharmaceutical Industries Limited. All Rights Reserved. FY17 FY18 = Rs 65.43 (for FY16) #Exchange Rate: US$1 US$1 Rs 67.07 (for FY17) US$1 = Rs 64.46 (for FY18) = SUN PHARMA 46#47EBITDA Trend In INR Billion Sales 112 160 272 279 303 261 % of Sales 19% 17% 23% 25% 27% 28% 13% 14% 17% 16% 16% 21% 24% 25% 30% 33% 28% 31% 44% 44% 29% 27% 29% 20% FY13 FY14 FY15 FY16 FY17 FY18 EBITDA Other Expenditure Personnel Costs Material Costs © Sun Pharmaceutical Industries Limited. All Rights Reserved. SUN PHARMA 47#48Cash Flow Net Cash From Operating Activities (Rs Bn) Free Cash Flow (Rs Bn) 22 22 34 40 40 56 56 67 71 15 25 31 SUN PHARMA 34 33 33 FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY16 FY17 © Sun Pharmaceutical Industries Limited. All Rights Reserved. 48#49Financial Ratios SUN PHARMA FY14 FY15 FY16 FY17 FY18 Growth (%) Sales 42.4 70.2 2.4 8.5 (13.9) Gross Profit 44.4 55.1 5.1 2.7 (15.8) EBITDA 45.0 8.5 (2.1) 16.1 (40.9) Net Profit 5.3 44.5 0.1 53.2 (69.0) Net Profit (Adjusted) 58.7 # (15.6) # 9.5# 33.1 (51.7)# Margins (%) Gross Margin 82.6 75.3 77.3 73.1 71.5 EBITDA Margin (%) 44.5 28.3 27.1 29.0 19.9 Net Margin 19.6 16.7 16.3 23.0 8.3 Net Margin (Adjusted) 35.4 # 17.5 # 18.8 # 23.0 12.9 # Return (%) ROCE ROE Others Debt/Equity Fully Diluted (USD) EPS 26.9 14.3 14.6 16.1 7.8 30.9 18.5 17.6 19.8 8.9 0.13 0.27 0.25 0.22 0.26 15.2 18.9 18.9 28.9 9.0 Fully Diluted EPS (USD) (Adjusted) R&D Spend % of Net Sales 27.3 # 19.9 # 21.7 # 28.9 14.0 # 6.5 7.2 8.3 7.6 8.6 Revenue Capital 6.2 6.7 8.0 7.1 7.9 0.3 0.4 0.3 0.6 0.7 # # Adjusted for Rs 25.17 bn provision related to generic Protonix settlement for the year FY14 and adjusted for Rs 2.4 bn for settlement provision for Texas Medicaid Program litigation for FY15 and adjusted for Rs 6.9 bn of exceptional items related to Ranbaxy integration for FY16 and adjusted for Rs 12.1 bn provision related to Modafinil settlement & deferred tax adjustment for the FY18. year © Sun Pharmaceutical Industries Limited. All Rights Reserved. 49#50Key Financials Q4 & FY18 SUN PHARMA Q4 FY18 Q4 FY17 CHANGE FY18 FY17 (All Figures in Rs. Mn) CHANGE Gross Sales 67,110 68,252 -2% 2,60,660 3,02,642 -14% Gross Profit 49,410 46,300 7% 1,86,413 2,21,335 -16% Gross Margin 74% 68% 72% 73% EBITDA 14,174 12,357 15% 51,846 75,394 -31% EBITDA Margin 21% 18% 20% 25% Net Profit 13,090 12,237 7% 21,616 69,644 -69% Net margin 20% 18% 8% 23% Net Profit (Adjusted) 10,504 # 12,237 -14% 33,665 # 69,644 -52% Net margin (Adjusted) 16% 18% 13% 23% R&D 7,428 6,002 24% 22,489 23,138 -3% R&D as % of Net Sales 11.1% 8.8% 8.6% 7.6% EPS (Diluted) INR 5.5 5.1 7% 9.0 29.0 -69% EPS (Diluted) INR (Adjusted) 4.4 # 5.1 -14% 14.0 # 29.0 -52% © Sun Pharmaceutical Industries Limited. All Rights Reserved. # : Adjusted for tax for Q4FY18 includes one-time benefits of Rs. 259 crores related to deferred tax. # : Adjusted for Rs 12.1 bn provision related to Modafinil settlement & deferred tax adjustment for the year FY18 50#51Sales Breakup Q4 & FY18 (All Figures in Rs. Mn) SUN PHARMA Q4 FY18 Q4 FY17 CHANGE FY18 FY17 CHANGE Formulation India 19,626 19,164 2% 80,293 77,491 4% US 23,716 25,545 -7% 87,466 1,37,588 -36% Emerging Markets 12,794 12,127 5% 48,392 45,299 7% ROW 7,437 7,323 2% 29,740 25,832 15% Sub-total 63,573 64,159 -1% 2,45,891 2,86,210 -14% Bulk Others 3,324 3,955 -16% 13,993 15,979 -12% 213 138 54% 775 454 71% Gross Sales 67,110 68,252 -2% 2,60,660 3,02,642 -14% IUS Formulations India Branded Generics Emerging Markets Western Europe & Other Markets # I API & Others © Sun Pharmaceutical Industries Limited. All Rights Reserved. 28% 29% 19% 18% Q4 Q4 FY18 FY17 11% 11% 6% 5% 37% 36% #Includes Western Europe, Canada, Japan, Australia, New Zealand and other markets 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 •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 ROW Business . Enhance product basket in emerging markets •Improve profitability in developed European markets © Sun Pharmaceutical Industries Limited. All Rights Reserved. 42 52#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 Regulatory/ Quality SUN PHARMA • Develop more products through expanded R&D team for global markets Focus on developing complex products across multiple dosage forms •Invest to further build on specialty pipeline 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 & Warning Letter at Halol Financial • Target sustainable and profitable growth Focus on ROCE © Sun Pharmaceutical Industries Limited. All Rights Reserved. 53#54FY19 Guidance Consolidated Revenues . Low double digit growth over FY18 R&D Investments • Approximately 8%-9% of revenues to be invested in R&D Investing for Future © Sun Pharmaceutical Industries Limited. All Rights Reserved. . • Invest in R&D and in building the specialty business 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 Amongst the largest Indian Pharma Company in Emerging Markets Expanding presence in Europe • 41 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 Estimates for 12 months ended Dec 2017 © 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 [email protected] Corporate Address: SUN HOUSE, CTS No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai 400063 © 2017 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. 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