Q3 FY 2009 PROFIT BEFORE TAX RS. 1,601 MN
EBITDA AT 13%
Gurgaon, India. October 26, 2009: The Board of Directors of Ranbaxy Laboratories Limited (RLL) at their meeting held today, took on record the unaudited results for the quarter ended September 30, 2009.
Key Financial Highlights:
Consolidated Financial Performance for the quarter ended September 30, 2009 (Q3’09)
• Consolidated net sales were USD 356 Mn (Rs. 17,205 Mn), a de-growth of 18% over Q3’08.
• Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) was USD 45 Mn (Rs. 2,221 Mn), a margin of 13% to sales.
• Profit Before Tax was USD 33 Mn (Rs. 1,601 Mn).
• Profit After Tax was USD 24 Mn (Rs. 1,166 Mn).
Consolidated Financial Performance for Nine months ended September 30, 2009
• Consolidated net sales were USD 1,037 Mn (Rs. 50,742 Mn).
• Earnings before Interest, Depreciation, Tax & Amortization (EBITDA) was USD 32 Mn (Rs. 1,563 Mn).
• Profit Before Tax was USD 15 Mn (Rs. 709 Mn).
• Profit After Tax was USD 10 Mn (Rs. 487 Mn).
Commenting on the business results for the quarter, Mr. Atul Sobti, CEO and Managing Director, Ranbaxy, said, “We are pleased with the consistent quarter-on-quarter improvement in financial performance this year, in spite of continuing challenges in some key markets. Revenue growth in some strategic geographical markets, and a sharp focus on cost efficiency have been the underlying themes this quarter. With good achievements on these fronts, we are confident that we are on the path to recovery. We are also seeing greater traction in realizing synergies with Daiichi Sankyo, in building a stronger future for Ranbaxy.”
Key Highlights/Developments
· Trend in improvement of financial performance was aided by continued cost containment measures undertaken by the Company. The Company returned to double-digit EBITDA margin, for the first time since Q2’08.
· Sales in developed markets were at USD 109 Mn (Rs. 5,257 Mn), lower by 30% over Q3’08, primarily on account of lower sales in USA.
· Sales in emerging markets were at USD 220 Mn (Rs. 10,678 Mn), at similar levels as Q3’08, accounted for 62% of revenues.
· The Company entered into an agreement with Validus Pharmaceuticals, to market and distribute an authorized generic version of Rocaltrol® in USA.
· In India, Ranbaxy launched a protein supplement, ‘Revitalite’, marking its entry into the lucrative protein supplements market.
· Extracting synergies from the hybrid business model of Ranbaxy and Daiichi Sankyo, the Company launched Evista® in Romania, an osteoporosis drug from Daiichi Sankyo. In Mexico, the Company has set-up a new division to specifically market Daiichi Sankyo products.
· The Company entered into a strategic in-licensing agreement with Medy-Tox Inc., South Korea, to import and market its product, Neuronox (purified Botulinum Toxin Type-A), in India.
· Ranbaxy received the Best Exporter Award, from the Pharmaceuticals Export Promotion Council (Pharmexcil), India, for its consistent performance in pharmaceutical exports over the years.
· The Company made its first USFDA filing from its new facility located at its SEZ in Mohali.
· The Company continues to cooperate with USFDA towards early resolution of observations made by that regulator.
· Due to marginal movement of the US Dollar during the quarter, there was no significant forex impact on the Company’s results for the quarter.
Consolidated Results (Ranbaxy Laboratories Limited and Subsidiaries)
Quarter ended September 30, 2009
In Q3’09, consolidated sales were at USD 356 Mn (Rs. 17,205 Mn) [Q3’08: USD 431 Mn; Rs.18,884 Mn], a de-growth of 18%. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) was USD 45 Mn (Rs. 2,221 Mn) [Q3’08: USD (27) Mn; Rs. (1,001) Mn], reflecting an EBITDA margin of 13%. Profit after tax was at USD 24 Mn (Rs. 1,166 Mn) [Q3’08: USD (96) Mn (Rs. (3,945) Mn].
Global Sales
Revenues in emerging markets were USD 220 Mn, at similar levels as Q3’08, and contributed 62% to consolidated sales. Developed markets de-grew by 30%, primarily on account of loss of sales in USA because of the Import Alert and Application Integrity Policy imposed by the USFDA.
• North America: The region recorded sales of USD 61 Mn (Rs. 2,955 Mn) during the quarter, a de-growth of 43%.
- In USA, sales during the quarter were USD 44 Mn (Rs. 2,138 Mn), a de-growth of 53% over Q3’08. This was primarily on account of ongoing USFDA issues and the discontinuation of Omeprazole authorized generic. The Company received final approval for Glycopyrrolate and Sumatriptan tablets 25/50mg. The Company also launched the authorized generic for Validus’ Rocaltrol®.
- Canada continued to demonstrate robust growth. Sales grew by 14% to USD 16.9 Mn (Rs. 817 Mn) during the quarter. The Company launched Ropinirole and received approval for Amlodipine. On MAT Aug’09 basis, the Company commands 19% share of the represented market and is ranked 7th in the generic segment.
• Europe (including Romania) recorded sales of USD 67 Mn (Rs. 3,265 Mn), a de-growth of 10%. Excluding Romania, the de-growth was 2%. However, compared with the trailing quarter (Q2’09), sales grew 5% despite an intensely competitive business environment in Western Europe.
• In Romania, the Company maintained its Number 1 ranking in the generics+OTC segment with a market share of 12.9% (MAT Aug’09). During the period, Evista®, an osteoporosis drug from Daiichi Sankyo, was introduced by Ranbaxy in the Romanian market. However, sales for the quarter at USD 17 Mn (Rs. 838 Mn) were down 25% due to disruption in trade arising out of (i) new pricing regulations that affected the generics industry, and (ii) severe liquidity crunch in the trade channels. Ranbaxy continued its prudent credit management policy to minimize the impact of the liquidity crunch.
• Asia, Middle East and CIS region recorded sales of USD 131 Mn (Rs. 6,346 Mn) during the quarter, almost at similar levels as Q3’08. India, Malaysia, and Middle East registered growth during the quarter. Liquidity crunch and softer demand being experienced in several countries especially CIS, put downward pressure sales. The region is already under pressure due to steep currency depreciation.
- Sales in India (excluding Consumer Healthcare business) grew by 2% to Rs. 3,617 Mn (USD 74.7 Mn) during the quarter and 11% on YTD Sep’09 basis. Overall, the Company maintained its 2nd rank in the Indian Pharmaceutical market with a market share of 4.9% (MAT Aug’09). Branded business in India grew 16.2% vs. market growth of 14.6% on QTD Aug’09 basis.
- The CIS region recorded sales of USD 23 Mn (Rs. 1,119 Mn) during the quarter, lower by 14%. Russia maintained similar level of sales with 1% growth. Ukraine recorded a 39% de-growth. Sales in the region were under pressure primarily on account of channel de-stocking, credit crunch, government policies on trade margins, price revisions, and seasonal slackness.
- The Asia Pacific region recorded sales of USD 26 Mn (Rs. 1,275 Mn) during the quarter, a growth of 7%. A similar positive trend was visible in multiple markets.
- Sales in the Middle East grew by 18% during the quarter.
• Sales in Africa during the quarter grew by 16% to USD 36 Mn (Rs. 1,758 Mn).
- South Africa continued the positive trend exhibiting strong growth: sales touched USD 22 Mn (Rs. 1,082 Mn), a growth of 34%. On YTD Sep’09 basis, sales grew by 55%. In South Africa, Ranbaxy now commands an 8.7% market share in the represented market (MAT Aug’09) and is ranked 5th in the generic segment.
- In Nigeria, despite tight liquidity, forex controls and high interest rates, the Company managed to garner a similar level of sales as Q3’08 at USD 5.6 Mn (Rs. 270 Mn).
• The Latin America region recorded sales of USD 21 Mn (Rs. 1,038 Mn) during the quarter, similar to Q3’08.
- Sales in Brazil at USD 14 Mn (Rs. 679 Mn), were at the same level as Q3’08. Excluding tender business, sales grew 50%. At market level, growth was 23% (MAT Aug’09). In Brazil, the Company commands a 4% market share (MAT Aug’09) and is the 6th largest generic player.
- In Mexico, the Company has set-up a new marketing division to focus on Daiichi Sankyo’s products. This is the first time in Latin America that Ranbaxy and Daiichi Sankyo are leveraging mutual synergies generated through the Hybrid Business Model. Sales were up by 38% in the quarter.
• The Global Consumer Healthcare business recorded sales of USD 12 Mn (Rs. 563 Mn) during the quarter, a growth of 24%. The Company commands 10.6% share (MAT Aug’09) of the represented market in India and was ranked 2nd in the corresponding segment during the same period. All key brands witnessed strong sales growth. Flagship brands Revital and Volini further increased their market share to 88.1% and 34% respectively. A strong brand, Revital is ranked 13th in the Indian Pharmaceutical market (MAT Aug’09).
Research & Development
Work under alliances with GlaxoSmithKline and Merck in the area of New Drug Discovery Research continued to progress well.
The Company made 72 product filings worldwide and received 177 approvals during the quarter. This takes the total number of filings to 244 with 310 approvals during the year.
Despite issues in major markets and liquidity crunch in several others, on overall basis, trend of improvement in financial performance continued in Q3’09 with profits registering good improvement quarter on quarter. Results were helped by revenue growth in some key markets, and a focus on cost efficiency.
Ranbaxy Laboratories Limited, India's largest pharmaceutical company, is an integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. Ranbaxy’s continued focus on R&D has resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. The Company’s foray into Novel Drug Delivery Systems has led to proprietary "platform technologies," resulting in a number of products under development. The Company is serving its customers in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 11 countries.
