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IM 2024 CAM AN Final - International Business
- 2. 2023 CAM RECOMMENDATIONS : STATUS UPDATE S.NO RECOMMENDATIONS STATUS 1 Make more Global brands and MMDCs/ MDCs Increased the number of MDCs from 38 to 43; increased the number of MMDCs from 5 to 7 2 Detailed performance analysis needs to be done for business mix in Brazil & France (including B2B); Take care of loss making business and evaluate it separately Ongoing: Portfolio focus on differentiated products in Brazil and Day-1 launches in France to improve overall margins Partnered business vertical assumed better momentum in Brazil and France 3 Brazil : Overall 2023 budgeted growth needs to be discussed Aligned and incorporated in budget 4 France and Spain : Make Strategy to be present in 80% of Portfolio coverage in both the markets Ongoing – Reached almost 60% in both markets (up from sub-50% three years ago). Filings planned (IH/IL) to reach ~80% by 2026 5 Need rigorous work in France (we were doing good earlier but not now) : Study if we can start selling dossiers to other markets Ongoing – Operational matters related to availability considerably reduced Hospital entry strategy being crafted French dossier filings in FWA, Vietnam, etc. being considered 6 Spain : Revise 2023 budget Aligned and incorporated in budget
- 3. SALES YEAR 2023 : SALES PERFORMANCE OVERVIEW - IM Performance Growth 22% CAGR (2019-23) 13% 22% 1562 1903 1909 2022 (ACT) 2023 (BUD) 2023 (ACT) SALES BREAKUP 1529 1671 1679 33 128 161 0 104 69 2022 (ACT) 2023 (BUD) 2023 (ACT) Base business New Prod.2022 New Prod.2023 Perf. % Cont % Growth % (Y-O-Y) CAGR (2019-23) Base business 100% 88% 10% 8% NP 2022 126% 8% 388% - NP 2023 66% 4% - - 100% (in INR Cr.)
- 4. SALES YEAR 2023 : SALES PERFORMANCE OVERVIEW - EMB Performance Growth 21% CAGR (2019-23) 13% 21% 1301 1570 1580 2022 (ACT) 2023 (BUD) 2023 (ACT) SALES BREAKUP 1279 1401 1386 23 99 136 0 70 58 2022 (ACT) 2023 (BUD) 2023 (ACT) Base business New Prod.2022 New Prod.2023 Perf. % Cont % Growth % (Y-O-Y) CAGR (2019-23) Base business 99% 88% 8% 8% NP 2022 137% 9% 491% - NP 2023 83% 3% - - 101% (in INR Cr.)
- 5. SALES YEAR 2023 : SALES PERFORMANCE OVERVIEW - EU Performance Growth 17% CAGR (2019-23) 9% 20% 32 38 37 2022 (ACT) 2023 (BUD) 2023 (ACT) SALES BREAKUP 30 31 33 1 3 3 0 4 1 2022 (ACT) 2023 (BUD) 2023 (ACT) Base business New Prod.2022 New Prod.2023 Perf. % Cont % Growth % (Y-O-Y) CAGR (2019-23) Base business 107% 89% 8% 4% NP 2022 85% 8% 131% - NP 2023 31% 3% - 98% (in EUR Mn)
- 6. YEAR 2023 : EBITDA AND PBT PERFORMANCE OVERVIEW - IM EBITDA before Corporate Allocation EBITDA after Corporate Allocation PBT 156 217 237 2022 (ACT) 2023 (BUD) 2023 (ACT) Value Trends 51% 12% 39% 68% % to sales 11% 10% Performance Growth CAGR (2019- 23) Value Trends 72% 10% 54% 52% % to sales 9% 7% Performance Growth CAGR (2019- 23) Value Trends 129% 6% 103% 103% % to sales 6% 3% Performance Growth CAGR (2019- 23) 106 162 182 2022 (ACT) 2023 (BUD) 2023 (ACT) 52 106 119 2022 (ACT) 2023 (BUD) 2023 (ACT) 109% 112% 113% (in INR Cr.)
- 7. SALES BUDGET 2024 : SALES OVERVIEW - IM 1562 1909 2255 2022 (ACT) 2023 (ACT) 2024 (BUD) Growth 18% CAGR (2021-23) CAGR (2019-24) 14% 22% SALES BREAKUP 1562 1840 1996 69 111 148 2022 (ACT) 2023 (ACT) 2024 (BUD) Base business New Prod.2023 New Prod.2024 Cont % Growth % (Y-O-Y) CAGR (2019-24) Base business 89% 8% 11% NP 2023 5% 61% - NP 2024 6% - - 2023 2024 Contribution from Innovation & Exclusive Products 0.5% 0.7% (in INR Cr.)
- 8. SALES BUDGET 2024 : SALES OVERVIEW - EM 1301 1580 1835 2022 (ACT) 2023 (ACT) 2024 (BUD) Growth 16% CAGR (2021-23) CAGR (2019-24) 14% 21% SALES BREAKUP 1301 1522 1631 58 82 122 2022 (ACT) 2023 (ACT) 2024 (BUD) Base business New Prod.2023 New Prod.2024 Cont % Growth % (Y-O-Y) CAGR (2019-24) Base business 89% 7% 10% NP 2023 4% 41% - NP 2024 7% - - 2023 2024 Contribution from Innovation & Exclusive Products 0.6% 1% (in INR Cr.)
- 9. SALES BUDGET 2024 : SALES OVERVIEW - EU 32 37 47 2022 (ACT) 2023 (ACT) 2024 (BUD) Growth 27% CAGR (2021-23) CAGR (2019-24) 12% 17% SALES BREAKUP 32 36 40 1 3 3 2022 (ACT) 2023 (ACT) 2024 (BUD) Base business New Prod.2023 New Prod.2024 Cont % Growth % (Y-O-Y) CAGR (2019-24) Base business 87% 13% 9% NP 2023 7% 167% - NP 2024 6% - - 2023 2024 Contribution from Innovation & Exclusive Products - - (in EUR Mn)
- 10. YEAR 2024 : EBITDA AND PBT OVERVIEW - IM EBITDA before Corporate Allocation EBITDA after Corporate Allocation PBT 156 237 286 2022 (ACT) 2023 (ACT) 2024 (BUD) Value Trends 21% 13% 51% 57% % to sales 12% 10% Growth CAGR (2019- 24) Value Trends 20% 10% 72% 44% % to sales 10% 7% Growth CAGR (2019- 24) Value Trends 30% 7% 129% 82% % to sales 6% 3% Growth CAGR (2019- 24) 106 182 218 2022 (ACT) 2023 (ACT) 2024 (BUD) 52 119 155 2022 (ACT) 2023 (ACT) 2024 (BUD)
- 11. INNOVATION & EXCLUSIVE PORTFOLIO Innovative product: As per guidelines shared Total innovative : includes pdts launched before 22 too Products (in resp curr 000s) 2023 % Perf 2024 B Gth% Zytrim R (Myanmar USD) 861 266% 1,076 25% Levexx 750 (Mexico) 3,651 150% 5,825 60% Julitam IV (Philippines) 4,120 54% 6,300 53% Risperidone Liq. (Philippines) 1,188 78% 1,800 52% LAUNCHED PRODUCTS Products (in resp curr 000s) 2024 B Launch month Revenue Potential at peak Esocid OTC 20mg, (South Africa) 2,004 Jun-24 8,000 Tramazac Co ODT, (South Africa) 1,272 Oct-24 4,000 Firsito ODT (Mexico) 3,864 Jul-24 11,900 Segmir 7.5 (Mexico) 2,207 Apr-24 8,000 Lipaglyn (Philippines and Myanmar) Q3-Q4 2024 3000-4000 TO BE LAUNCHED IN 2024 KEY INITIATIVES PLANNED Five differentiated generics (FTL) filed in Brazil and Mexico to strengthen the core Nine more products (FTL / differentiated generics) under development for filing in EM Strong focus on filing Day-1 launches in EM (in focus therapies) and EU (for portfolio coverage)
- 12. PROGRESS ON ENGINE-2 Ideas finalized - New markets Peak revenue potential (2028 – in mn USD) Likely EBITDA % Investment outlay (in mn USD) Revenues start year Current status Australia 10 25% 0.5 2022 • Filed 3 Dossiers in 2023; Approval Expected in H1 2024 • Focus on Complex Generics • Focus on Filing for Day 1 launch/1st Generic • TGA Audit Cleared for Moraiya China 13 25% 0.6 2025 • 1 Dossier Filed • 9 New Products added with Existing and new Partner • Focus of high value Oncology products • Aspiration to file 18 Dossier in 2024 Saudi 14 30% 0.7 2025 • 21 Dossiers submitted and 2 are in pipeline for 2023 • 3 Products submitted for 1st time; 6 Products submitted as 1st Generic & 2 Products are as 2nd Generic Latin America (ex Brazil/Mexico) 5 20% 0.2 2022 • Initiated Filings in 9 Markets in RoLA • Focusing on CNS, CVS, Oncology and Endocrinology Portfolio • 52 Filings in 2023; Planned 35+ filing in 2024 UK 38 20-25% 2024 • 6 filings in 2023 • 61 filings planned in 2024 Alidac Myanmar 5 20% 0.5 2024 • 6-8 filings planned in 2024 Total 85 2.5
- 13. THANK YOU
Editor's Notes
- Allow me to express my profound gratitude to the exceptional dedication exhibited by my team and our cross-functional collaborators. Inspired by our theme of Genesis 2.0, we embarked on a transformative journey in 2023, integrating Europe into EM and ushering in the inception of a formidable NCE…New Corporate Entity, "International Markets". External disruptions have become a common occurrence for our business (norm than an exception), be it the economic crisis in Sri Lanka that we started 2023 with, geopolitical crisis in Myanmar and Sudan that prevailed all through the year, or global inflationary headwinds. And to top it up, the internal headwinds that we faced on the branded business of Brazil. But the exemplary “in spite of” Zydan spirit that our team was able to collectively demonstrate, helped us not only surmount challenges, but propel us to surpass our targets, registering 20%+ growth on our core business for the 2nd year in succession.
- Before moving to the analysis of our 2023 & 2024 numbers, let me address the key action items that were provided to us as guidance during the last meeting Our commitment to creating more global brands and MMDCs/MDCs remains an ongoing pursuit. I'm delighted to report that this year, we successfully introduced 5 new MDCs, bringing the total to an impressive 43, along with 2 new MMDCs, bringing the total to 7. Together with global brands, they constitute almost 35% of our business, amounting to over 550 INR Cr Referring to business mix for Brazil and France, our thrust continues on filing and commercialization of differentiated products in Brazil, and Day-1 launches in Europe, to enhance quality of our business. Addressing points 3 and 6, which are related to 2023 budget – both aspects were seamlessly incorporated into the budget. Recognizing the strategic significance of France and Spain as integral markets, substantial progress has been made in recent years & efforts are on track to surpass the directive provided. On France, building additional revenue streams is the foremost priority - both hospital segment – for which significant work is underway – and exploiting our French portfolio in EM – FWA and Vietnam Moving on to our performance overview - slides pertaining to 2023 & 2024 have been structured & sequenced as the consolidated International Markets (in INR Cr.), EM (in INR Cr.), and then Europe (in EUR Mn).
- In 2023, we not only notched an encore of the noteworthy performance of 2022 but surpassed expectations culminating into consolidated revenues of 1909 Crs. The synchronized success of both our rockets – EM and EU - propelled us to a higher growth orbit, where we registered an impressive growth of 22%. What makes this 22% growth even more significant is that it is built upon a high of 26% growth in core business last year. On the right side of the slide, you can see the major growth driver was Base Business with 10% growth, augmented further by 8% from new products of 2022. The lone deviation highlighted in red pertains to NP 2023, primarily attributed to the non-approval or deferred launches
- In line with the consolidated performance, EM was the major force which pulled IM across the finish line. EM recorded 101% performance, taking the final sales figure to 1580 INR Cr and experienced a healthy 21% growth rate over last year The narrative of NP performance for EM mirrors the insights discussed in the preceding slide.
- 2023 witnessed a pivotal turning point for Europe—a region that experienced a notable shift in the tide. Following an extended period of subdued expansion, the concerted efforts invested in Europe yielded significant results, culminating in 17% growth, almost double of its last three years’ CAGR. Although we narrowly missed the 100% milestone, given the strategic growth initiatives in pipeline for Europe, the region is poised to successfully sustain the double digit growth of 2023 in 2024. The sluggish NP performance in EU was majorly due to deferred launches, for which necessary interventions are in order for a smooth off take in early 2024.
- Our prudent approach in utilizing our budget and leveraging operational efficiencies across markets has resulted into year 2023, scaling a new summit on profitability. We were able to achieve a performance of 110%+ on both EBITDA and PBT, with PBT being more than doubled over last year’s results. Particularly, the ongoing enhancement in the quality of our business is evident in the rising % to sales ratio on both the EBITDA and PBT fronts. This underscores our commitment to not just achieving financial milestones but a more inclusive vision of delivering value-accretive growth.
- In our aspirations for 2024, we are setting the stage for another monumental year by convincingly surpassing the 2000 Cr mark. Our objective is to achieve net delta of 350 crs, representing 18% growth over 2023 & consistent with the business delta added in previous years. Further, if we consolidate revenues from the recently acquired LM business in UK, our topline aspirations are set to touch 2500 crs. Base business will continue to be the major growth driver with 8% of the total 18% coming from the same, and the remaining from new products of 2023 & 2024. With this budget rolled out, our 2019-24 CAGR comes to 14%, 1% higher than our Zynext expectations. Since, product level innovation is still in state of infancy, commercial outcomes appear modest for 2023-24. The same will grow exponentially in the coming years once product filings turn into approvals
- In anticipation of a stable & favorable operating ecosystem and continued momentum for EM in 2024, we have assumed a 16% Year-over-Year growth, taking the revenue to 1835 INR Cr – exactly 3 times the size of the business in 2016. Our meticulous planning and execution in filing have charted the course for considerable new launches in 2024. This strategic approach plays a significant role in attaining our targeted growth, with the anticipated positive traction of NP 2023 in the coming year adding a robust layer to our growth trajectory.
- As previously emphasized, 2023 demonstrated an early indication of a trend reversal in Europe – foremost objective going forward is to sustain & build on this further. Considering the strategic growth initiatives currently underway, we have set an fairly ambitious growth target of 27%. This goal is projected to elevate our revenue to closer to 50 million euros mark by the end of 2024. Almost half of the growth will be contributed from the base business and the rest will be split between NP 2023 and NP 2024
- Moving on to profitability for 2024, 18% growth in sales will translate to 20% growth in EBITDA and 30% growth in PBT, which in turn amounts to figures of 218 INR Cr and 155 INR Cr respectively. In line with our ongoing effort on improving the quality of our businesses, we shall continue striving to further increase the % to sales ratio in 2024. Shifting our focus to Europe, 2024 will be an inflexion point (distinctive year) for us, where in our aspiration is to cut our operating losses by half. A noteworthy milestone in this trajectory is the concerted effort to render Spain EBITDA neutral, a testament to achieving financial equilibrium in this market.
- With our base well established and operations well oiled, our intent is deeply engrained on development & commercialization of incrementally modified products in focus therapies to protect & grow our core. With some of our innovative launches performing well, the “Innovation Forum” initiative has enabled churn out few exclusive product propositions across EM and Day-1 opportunities in EU for 2024 and beyond. The most striking mention is the launch of Zytrim R in Myanmar. In less than 18 months, Zytrim R got close to becoming an MDC with the entire franchisee posting revenues of 3 mn USD. Finally, one of the most awaited event in EM this year, would be launch of our first proprietary product - Lipaglyn - in key markets of Philippines & Myanmar. On resolution of regulatory/administrative matters in H1, Lipaglyn should ultimately reach the patients during the course of 2024.
- With the re-organisation of our operating groups in 2020, we made a conscious choice of entering into new markets to diversify our revenue streams. Coupled with the directives from the Chair last year on Engine 2, we strategically identified five new markets as our foremost Engine 2 initiatives. In these markets, we executed a comprehensive deployment of resources that garnered encouraging traction. Notably, significant number of filings have commenced in all of these markets, with Australia and Latin America (excluding Brazil/Mexico) swiftly transitioning to revenue recognition on basis of our last few years of planning. UK is another territorial extension for IM that holds significant promise – on both counts – our organic plans for Zydus UK & the synergies we intend to leverage from the acquired entity of LM In Myanmar, with the intent of targeting LDCs for exports finally bearing fruit, we plan to make multi-fold progress on the filing & revenue front. Engine 2 initiatives stand as pillars of promise for the future growth of our International Markets division. When I look forward to what’s in store for International Markets in 2024, I can’t help but derive a lot of hope and inspiration from the wonderful journey we have traversed till date with our convincing performance in recent times. The objective for my team is to Initiate Innovation in all that we do, Enable Empowerment for our teams and Evolve into a business that consistently delivers value accretive growth. 2024 will certainly be an year of Impact in terms of Driving Transformation.