#1Zydus Lifesciences Limited Earnings Presentation 20th May, 2022 zydus Dedicated To Life 1#2Disclaimer and Safe Harbor Statement zydus Dedicated To Life THIS PRESENTATION (PRESENTATION) IS NOT AN OFFER TO SELL ANY SECURITIES OR A SOLICITATION TO BUY ANY SECURITIES OF ZYDUS LIFESCIENCES LIMITED OR ITS SUBSIDIARIES OR JOINT VENTURES (TOGETHER, THE "COMPANY"). The material that follows is a Presentation of general background information about the Company's activities as at the date of the Presentation or as otherwise indicated. It is information given in summary form and does not purport to be complete and it cannot be guaranteed that such information is true and accurate. This Presentation has been prepared by and is the sole responsibility of the Company. By accessing this Presentation, you are agreeing to be bound by the trading restrictions. 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The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this Presentation, the information contained herein is based on management information and estimates. This document is just a Presentation and is not intended to be a "prospectus" or "offer document" or a "private placement offer letter" (as defined or referred to, as the case may be, under the Companies Act, 2013). It is clarified that this Presentation is not intended to be a document offering for subscription or sale of any securities or inviting offers from the Indian public (including any section thereof) or from persons residing in any other jurisdiction including the United States for the subscription to or sale of any securities including the Company's equity shares. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. None of the Company's securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended, except pursuant to an exemption from registration there from. This document has not been and will not be reviewed or approved by a regulatory authority in India or by any stock exchange in India. This document and its contents should not be forwarded or delivered or transmitted in any manner to any person other than its intended recipient, and should not be reproduced in any manner whatsoever. 2#3* Q4 FY22: Financial Performance Total Revenues* Rs. 38,638 mn 5% YoY EBITDA & Margin %# Rs. 8,612 mn 22.3% of revenues 1% YoY R&D Rs. 2,697 mn 7% of revenues Net Profit ex. One-offs Exceptional & Disc. Ops ^ Rs. 5,250 mn 12% YoY Total Revenues include net sales and other operating income. Revenue Break-up (Rs. mn) and YoY Growth EM 2,750 10% EU 469 ΑΡΙ Alliances 1,363 1% -2% 633 Total 37,418, 5% 138% India Form 11,640 14% Key Highlights of Q4 FY22 Ex-COVID related business, total revenues grew 7% yoy. zydus Dedicated To Life India formulations business continued to display robust performance led by strong momentum in branded portfolio. Launched Desidustat (OxemiaTM) in India for the treatment of anemia in patients with Chronic Kidney Disease (CKD). It is the second NCE launched, discovered and developed in-house. On the Specialty front in the US, entered into an asset purchase agreement with BridgeBio Pharma for acquisition of NULIBRY™ Research & Development (R&D) spend: at Rs.2,697 mn (7% of revenues). Net debt: Rs. -570 mn (at 31-Mar'22) vs INR 34,862 mn (at 31-Mar'21). Capex for the quarter: Rs. 2,668 mn and for FY22: Rs. 11,218 mn. Key Board Meeting Updates The Board approved buy-back of upto Rs. 7,500 mn at Rs. 650 per equity share (90% premium to closing share price of 19th May, 2022). The Board recommended a dividend of 250%. Note: US 14,233 -4% Consumer # Adjusted for one-time COVID related inventory provision of Rs. 1,435 mn in Q4 FY22 Wellness, 6,330 6% ^ Adjusted for one-time COVID related inventory provision, exceptional and non-recurring items as well as profit/ loss from discontinued operations. 3#4Key Financial Metrics (1/2) Total Revenues (Rs. mn) 38,638 36,703 36,398 Gross Profit (Rs. mn) zydus Dedicated To Life 152652 24,339 144035 23,064 23,680 96,014 97,200 Q4FY21 Q3FY22 Q4FY22 FY21 FY22 Q4FY21 Q3FY22 Q4FY22 FY21 FY22 Total R&D (Rs. mn) and % to Revenues EBITDA ex. one-offs (Rs. mn) and Margin % 6.2% 7.0% 7.0% 7.8% 6.8% 23.1% 20.6% 22.3% 23.5% 23.1% 2,697 11,196 2,553 8,495 8,612 33,871 35,239 10,406 2,266 7,516 Q4FY21 Q3FY22 Q4FY22 FY21 FY22 Q4FY21 Q3FY22 Q4FY22 FY21 FY22 4#5Key Financial Metrics (2/2) PAT ex. Exceptional, one-offs and discontinued ops.(Rs. mn) 5,069 5,250 20581 4,684 Q4FY21 Q3FY22 1.03 0.87 22988 Capex (Rs. mn) zydus Dedicated To Life 3,100 2,795 2,668 7,634 FY21 FY22 Q4FY21 Q3FY22 Q4FY22 Net debt/ EBITDA 0.11 0.09 (0.02) Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q4FY22 FY21 Net Working Capital* (Rs. mn) 11,218 FY22 48,765 49,188 46,289 43,756 41,577 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 5 UT *Net working capital includes Inventory, Trade receivables and Trade payables.#6India Formulations business Branded business continued to display strong growth India Formulations Sales Q4 FY22 Revenue (Rs. mn) 10,232 10,785 11,640 Contribution 31% India Formulations Sales (Rs. mn) 48,125 40,429 Q4FY21 Q3FY22 Q4FY22 FY21 FY22 YOY 13.8% Q4 FY22 Gr. FY22 Gr. 19.0% QoQ 7.9% Large brands - a key growth driver TA-wise Break-up* # of Brands Others Anti- infectives 15% 27% 1000+ 8 Cardiac 15% " ◉ Highlights for the quarter zydus Dedicated To Life Ex. COVID opportunities, Gx portfolio and divested products, the branded prescription business grew by 19% YoY. Growth was well represented by volume expansion as well as better realization. Gained market share in key therapies viz. anti-diabetic, cardiovascular and gynecology on a YoY basis#. On the Super Specialty front, Retained leadership position in Nephrology segment* and ➤ Fastest growing Company in India in Oncology segment. With first in market launches like Ujvira™ and Exmeptia TM, biologics business has one of the largest portfolios and is among the fastest growing companies in respective therapeutic areas. Brand Value 500 to 1000 22 Respi 11% (Rs. Mn)* GI Pain 250 to 500 36 10% Gynae 6% 11% Derma 5% *Source: AWACS MAT March 22 #Source: AWACS Jan - Mar 2022 qtr. 6#7Consumer Wellness Focus on execution to accelerate the growth Consumer Wellness Sales (Rs. mn) Q4 FY22 Revenue Contribution Consumer Wellness Sales (Rs. mn) 5,984 3,822 6,330 18,409 17% 19,788 Q4FY21 Q3FY22 Q4FY22 FY21 FY22 Q4 FY22 Gr. { YOY 5.8% FY22 Gr. 7.5% QoQ 65.6% Key brands continued to maintain leadership position #1 Sugar Free Glucon-D #1 nycil #1 Leading Brands Indicates category rank #1 everyuth naturals #1 Nutralite Complan zydus Dedicated To Life Highlights for the quarter Retained leadership position in 5 out of 6 brands in their respective categories. Business environment remained challenging due to inflationary pressure on input costs. Gross margins improved sequentially on the back of price increase taken in various brands and cost improvement measures. 7#8US Formulations business Consolidating the position amidst challenging environment 14,876 US Formulations Sales (Rs. mn) 14,892 14,233 Q4 FY22 Revenue Contribution US Formulations Sales (Rs. mn) " 63,505 58,138 38% $ 204 mn $ 199 mn $ 189 mn $ 856 $ 780 ◉ mn mn Q4FY21 Q3FY22 Q4FY22 FY21 FY22 YOY -4.3% Q4 FY22 Gr. FY22 Gr. -8.5% QoQ -4.4% Continued investment to build the generics pipeline ANDAS Q4 FY22 FY22 Cumulative Filings 1 26 420 Approvals 5 28 312 ^ inclusive of 10 tentative approvals. zydus Dedicated To Life Highlights for the quarter Maintained top 3 ranking in 60% of the product families in the US. Received final approval for 5 new products and launched 4 new products during the quarter. On the Specialty front, acquired NULIBRY™ (Fosdenopterin for Injection). The product is approved by the USFDA to reduce the risk of mortality in patients with molybdenum cofactor deficiency (MOCD) Type A, an ultra-rare, life- threatening pediatric genetic disorder. 8#9Emerging Markets Formulations business Base business continued to display growth EM Formulations Sales (Rs. mn) 2,914 2,750 2,499 Q4 FY22 Revenue Contribution EM Formulations Sales (Rs. mn) " 11,921 10,167 7% zydus Dedicated To Life ◉ Highlights for the quarter Excluding COVID opportunities, the business grew by 29% on a YoY basis. Robust performance in key markets of Latin America, Philippines and Vietnam drove overall performance of the business. However, the situation remained challenging for business growth in Sri Lanka in the light of ongoing political crisis. We remained vigilant to secure our receivables and offset the impact of currency decline through price hikes. Q4FY21 Q3FY22 Q4FY22 FY21 FY22 YOY 10.0% Q4 FY22 Gr. FY22 Gr. 17.3% QoQ -5.6% 6#10• " • Updates on Innovation NCE: Saroglitazar Magnesium zydus Dedicated To Life Global pivotal Phase II(b)/III CT viz. EPICS-III™ to evaluate the efficacy and safety of the molecule in patients with PBC is currently going on for the US market. Patient enrolment ongoing for EVIDENCES-X, another global pivotal Phase II(b) CT to evaluate the efficacy and safety of the molecule in subjects with NASH and Fibrosis indications. NCE: Desidustat • Received marketing authorization from DCGI for the molecule for the treatment of anemia in patients with CKD. The molecule has been launched in India in March, 2022 under the brand name Oxemia TM. It is our 2nd NCE developed exclusively from lab to market. On the global development front, Phase III clinical trials underway in China for management of anemia in CKD patients. NCE: ZY19489 (Anti-malarial) The molecule is fast acting and effective against both P. falciparum and P. vivax strains of malarial parasites. It is being developed to provide an effective alternative to the current front-line antimalarial drugs, as artemisinin-based combination therapies (ACTS) are under immediate threat of resistance. Phase I study in healthy volunteers demonstrated long-half life and good safety profile. CT = Clinical Trial; NASH = Non-Alcoholic Steatohepatitis, PBC = Primary Biliary Cholangitis, DCGI = Drug Controller General of India, CKD = Chronic Kidney Disease 10#11. Updates on Innovation NCE: ZYIL1 (NLRP3 inhibitor) zydus Dedicated To Life Initiated Phase II(a) CTs in Australia to study the safety, tolerability, pharmacokinetics and pharmacodynamics of the molecule in patients with CAPS in Australia. ⚫ The molecule is an oral NLRP3 inflammasome inhibitor targeted at selectively supressing inflammation. Biosimilars ⚫ Submitted marketing authorization to DCGI for Rituximab and submitted an application to initiate Phase III clinical trials for one mAb during the quarter. Received permission from RCGM to initiate pre-clinical toxicity study for one product during the quarter. ⚫ On the emerging markets front, received cGMP approval for the manufacturing facility from the Mexican regulatory authority COFEPRIS for 3 products during the quarter. . . 505(b)(2) and Specialty initiatives During the quarter, concluded pIND meeting with USFDA for 1 product in orphan space and received pNDA follow-up response for another product during the quarter. During the year, received tentative approval for 1 NDA, received a clearance from the USFDA for an IND application for a pain management product and concluded 3 pNDA meetings and 2 pIND meetings with USFDA. CAPS = Cryopyrin- Associated Periodic Syndrome, CTs = Clinical Trials, IND = Investigational New Drug, NDA = New Drug Applications, RCGM = Review Committee on Genetic Manipulation, mAb = monoclonal antibody 11#12Zydus at a Glance >$2 Global Revenues¹ 5th bn Largest generic Co. in US in terms of prescription³ Over Revenues from branded 50% business (India, EM and Wellness) Among Top 3 In 60% of product families marketed in US³ 00 1st $4.5 bn Market Capitalization² 12 Brands among Top 300 in India4 1st 36 Mfg. sites Producing >28 bn pills annually 1. 123 2. 3. Assuming exchange rate of Rs. 74.5 per USD As on 19th May, 2022, exchange rate of Rs. 77.65 per USD IQVIA, Regulatory Insights, MAT March 2022 TRX 23 K Zydans globally incl. 1400 scientists (R&D) 22 4. As per AWACS MAT March 2022 zydus Dedicated To Life R&D Centers For NCE, APIs, Gx formulations, Biosimilars and Vaccines Approved product for NASH in India - (Bilypsa®- Saroglitazar) OSD formulation for anemia associated with CKD - OxemiaTM (Desidustat) Biosimilars in portfolio including 13 launched in India 12#13Consolidated Financial Performance (reported) zydus Dedicated To Life Q4 04 YoY 03 000 Rs. mn FY22 FY21 Gr. FY22 Total Income from Ops. Gross Contribution (GC) FY21 38,638 36,703 23,680 24,339 gr. FY22 gr. Gross Margin % 61.3% 66.3% 5.3% 36,398 -2.7% 23,064 63.4% Employee benefits expenses * R&D expenses Other operating expenses EBITDA 8,405 8,267 7,177 8,495 -15.5% 5,401 5,311 2,697 2,266 19.0% 1.7% 1.7% 5,287 2.2% 2,553 5.6% 7,708 9.0% 6.2% 1,52,652 1,44,035 6.0% 2.7% 97,200 96,014 1.2% 63.7% 66.7% 21,974 20,954 4.9% 10,406 11,196 -7.1% 31,413 29,993 4.7% Comments for 04 FY22: GC impacted by inventory provision of Rs. 1.4 bn. one-time 7,516 -4.5% 33,407 33,870 -1.4% EBITDA Margin % 18.6% 23.1% 20.6% 21.9% 23.5% Other Income Finance cost 791 385 -304 360.2% 607 30.3% 2,247 456 392.8% • Adj. for one-time Depreciation and amortization Profit before exceptional items 5,729 232 65.9% 1,854 1,753 5.8% 6,206 -7.7% 6,042 311 23.8% 1,270 1,588 -20.0% 1,770 4.7% 7,130 6,696 6.5% -5.2% 27,254 26,042 4.7% Profit after exceptional items 5,729 5,475 Tax expenses 1,092 -2,060 4.6% 6,042 153.0% 1,094 -5.2% 28,381 23,991 18.3% Share of profit from JVs 46 Profit from discontinued operations # -150 Minority Interest 559 Reported Net Profit 3,974 38 21.1% -219 31.5% 564 -0.9% 6,790 -41.5% -0.2% 223 -79.4% -65 -130.8% 102 448.0% 5,004 -20.6% 5,117 1,936 164.3% 462 22,457 1,310 44,873 474 -2.5% -680 Opex increased QoQ due to increased marketing spend (incl. Wellness) and freight cost. inventory provision, Q4 FY22 EBITDA was Rs. 8,612 mn (22.3% margin). Adj. Net Profit for Q4 FY22 was Rs. 5,250 mn, up 12% YoY. 514 154.9% 21,335 110.3% * Excludes Research related expenses # Discontinued operations refer to divested India-centric Animal Health Business and discontinuation of Nesher and Hercon business. 13#14Details of Other Incomes and Exchange rate Fluctuations Other Operating Income Rs. mn Q4 FY22 Q4 YOY YOY FY22 FY21 FY21 gr. gr. Export Incentive 98 98 -0.1% 470 1,164 -59.7% Exchange Rate Fluctuations 582 1,553 Processing Income 76 64 18.8% 309 237 30.4% Others 464 732 -36.7% 2,044 1,384 47.7% Total other operating income 1,220 894 36.4% 4,376 2,785 57.1% Other Income Q4 Q4 YOY YOY Rs. mn FY22 FY21 FY22 FY21 gr. gr. Dividend and Interest Income Exchange Rate Fluctuations 269 69 288.8% 696 499 39.3% 200 104 92.3% 646 121 433.9% Profit on sale of Investments Others 240 10 2385.2% 751 89 747.6% 82 -487 Total other income 791 -304 116.8% 360.5% 155 2,247 -252 161.3% 456 392.4% Details of foreign exchange fluctuations Q4 Q4 Rs. mn FY22 FY21 A. On operating transactions (above EBIDTA line) -516 84 YOY gr. -713.7% FY22 FY21 a. Included in other operating income -582 b. Included in cost of goods c. Included in other operating expenses B. On other non-operating income 66 50 34 31.4% -100.0% -1,468 -1,553 85 164 YOY gr. -995.6% - 19 145 350.0% -100.0% -200 -104 -92.3% -646 -121 -433.9% C. On foreign currency borrowings (part of interest cost) 71 12 491.7% 71 -53 234.0% Total Foreign Currency Fluctuations (+ = loss, - = gain) -645 -8-8066.5% -2,043 -10-20127.2% zydus Dedicated To Life 14#15Thank you For any queries, please contact Arvind Bothra [email protected] +91-79-71800839 For more information, please visit www.zyduslife.com zydus Dedicated To Life Registered Office: Zydus Corporate Park, Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, Sarkhej-Gandhinagar Highway, Ahmedabad - 382 481 Gujarat, India