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Cipla Limited Q4FY21 Conference Call Highlights

Cipla Limited Q4FY21 Conference Call Highlights

Published on 09 June 2021 Views 35 Comments 0

FY21 Performance:

 

  • Profit has improved across all the quarters during the year.
  • The company moved a historical trend line from 16% to 19% of EBITDA to over 22% this year and expects to improve it from hereon.
  • Free cash flow generation and operating efficiency helped it to become a net cash company.
  • Pre-tax return on invested capital improved by over 750 basis points.
  • Growth in revenue is 12%
  • Total expenses increased by 2% on a sequential basis and stood at Rs 1,988 crores
  • As of 31st March 2021, the long-term debt stands at USD138 million and ZAR720 million, Working capital loans of $49 million, and ZAR75 million.
  • Outstanding derivatives and the hedge for receivables are $ 175 million and ZAR684 million as of March’21 apart from additional loans in Australian dollar and GBP.
  • “One India Strategy” continues to see seamless execution and grew 15% for the year.
  • The prescription business grew 14% for the full year.
  • Cipla consistently ranked 2nd with the market share of 8.1% in chronic therapies and grew by 12% versus market growth of 8% from MAT March '21.
  • Trade generic business continues to do well with full year growth of 18% adjusted for transfers to the consumer business.
  • Consumer Health Business scaled up to over Rs 360 crores in Revenue.
  • Full-year ETR was 27%, PAT is at Rs 413 crores or 9% of sales.
  • In the US Generics & lung leadership space, the US Generics core formulation sales for a full-year stand at US$551 million.
  • The European business grew 17% on a full-year basis.
  • Business scaled up by almost 21% in the emerging markets.

 

 

Q4FY21 Performance:

 

  • EBITDA margins expanded by 240 basis points year-on-year basis despite the fact that Q4 is seasonally a weak quarter & covid cases were on a decline for the most part of the quarter.
  • Overall Income from operations recorded a year-on-year growth of 5% and stands at Rs 4,606 crores.
  • Tax charge for the quarter is Rs 128 crores and ETR is lower at 24%
  • Company’s One India business performed in line with their expectations, growing 4% for the quarter
  • Gross margin after material cost stood at about 60%, across by 200 basis points impact due to charge on material cost pertaining to some of the inventories of products build during covid period but couldn’t liquidate, it also includes certain overhead charge-off and the one-time shelf stock adjustment for Albuterol.
  • Employee cost declined by 4% over the sequential quarter and stood at Rs 815 crores for the quarter, other expenses increased 7% sequentially and stand at Rs 1,123 crores.
  • In line with the “One India Strategy”, the Cipladine brand was transferred to CHL from the Trade Generics business during the quarter.
  • In the US Generics & lung leadership space, the US Generics core formulation sales for the quarter was US$138 million
  • The South African private business reported a strong 13% growth over last year for the quarter in local currency.
  • In markets outside South Africa, rest of Saharan business grew by 10% in dollar terms and decline in the CGA business performance was in line with the expectations.
  • Expansion of a partnership for four biosimilars in a strategic market of Australia
  • The European business grew by 7% for the quarter.
  • In emerging markets, business scaled up by 4% for the quarter

 

Research & Development and Products:

  • Total R&D investment is about Rs 277 crores.
  • Unlocking of respiratory portfolio with launch and ramp up of Albuterol

 

 

FY22 Outlook:

  • Strong tailwinds across company’s India portfolio which is likely to play out in Q1 & onwards, includes a surge in demand for covid drugs and expected pickup in the antibody cocktail among others once it is launched.
  • Strong demand trigger for core respiratory product including Budesonide which is now a part of the ICMR protocol. This will help drive core portfolio growth in FY'22.
  • Moved a historical trend line from 16% to 19% of EBITDA to over 22% this year and they believe improvement from hereon.
  • Focus continues on complex launch engine along with driving growth in the institutional channel
  • Long-term priorities remain intact including leveraging the emerging opportunities across markets and maintaining market-beating growth in branding and branding generic franchises of India, South Africa and also augmenting consumer wellness franchise in both these markets
  • Continue high vigil on cost and cash management amid the uncertain trajectory of the pandemic, expanding lung leadership globally and maximizing the value opportunities in US complex generics space, focus on regulatory compliance across manufacturing locations and embracing best-in-class growing benchmarked ESG practices
  • Accelerating digital transformation to capitalize opportunities and growth opportunities across continents and also building a sustainable talent pipeline for the company's future plan over the next three to five years.

 

COVID Related Decisions

  • Continues to be at forefront in the global fight against the pandemic
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