Jubilant Life Sciences – Q4, FY20 results

EBITDA was at Rs 1,555 Crore, up 13 per cent YoY with margin at 27.2 per cent, as compared with 25.7 per cent in FY19

The Board of Jubilant Life Sciences company met recently to approve financial results for the quarter ended March 31, 2020.

Commenting on the company’s performance, Shyam S Bhartia, Chairman and Hari S Bhartia, Co-Chairman & Managing Director, Jubilant Life Sciences said, “We are glad to report record profits in FY20 with improvement in margins across all the business segments. The Q4FY20 performance was impressive with EBITDA growth of 58 per cent YoY. Despite the COVID-19 led challenges, we continue to experience strong demand across most of our businesses. Our leadership position in all the segments we operate in ensures positive outlook for business performance and healthy cashflow generation to reduce leverage.”

Pharmaceutical segment recorded revenue of Rs 5,714 crore during FY20 as against Rs 5,349 crore in FY19. The 7 per cent YoY revenue growth during the year was driven by better performance in all three key business lines. EBITDA was at Rs 1,555 crore, up 13 per cent YoY with margin at 27.2 per cent, as compared with 25.7 per cent in FY19.

LSI segment’s FY20 revenue was at Rs 3,179 crore as against Rs 3,545 crore last year. LSI’s FY20 EBITDA was at Rs 431 crore vs Rs 445 crore last year with margin at 13.6 per cent vs 12.6 per cent last year.

The Drug Discovery Services business’ FY20 revenue increased to Rs 262 crore from Rs 217 crore with 28.1 per cent EBITDA margin in the current year as against 8.3 per cent EBITDA margin in FY19. In view of the strong demand, we are making investments in this business to double capacities over the next 2-3 years.

In our Proprietary Drug Discovery business, we are working on more than six programmes targeting small molecule therapies in the area of oncology and auto-immune disorders with two programmes moving to the clinic next year.

During the year, the company reduced its net debt by Rs 514 crore and is focussed on further deleveraging by generating healthy levels of cashflows.

Company signed licensing agreement with Gilead Sciences to register, manufacture and sell Gilead’s investigational drug, Remdesivir, a potential therapy for COVID-19 in 127 countries including India, and is working towards launching the drug in July 2020.

The company has taken several measures to tide over the COVID-19 induced challenges. We are confident of delivering sustained growth in the medium term on the back of our leadership position in various businesses and growth strategies.

Q4’FY20 highlights

Consolidated

• Revenue at Rs 2,391 crore, as compared with Rs 2,386 crore in Q4’FY19
• EBITDA at Rs 556 crore increased 58 per cent YoY and 8 per cent sequentially. EBITDA margin at 23.3 per cent vs. 14.7 per cent in Q4’FY19 and 22.2 per cent in Q3’FY20
• Adjusted EBITDA after one-off expenses at Rs 568 crore up 46 per cent YoY from Rs 388 crore in Q4’FY19. Adjusted EBITDA margin for the quarter was 23.7 per cent vs. 16.3 per cent in Q4’FY19
• Finance costs at Rs 71 crore vs. Rs 62 crore in Q4’FY19 and Rs 72 crore in Q3’FY20
• Net profit at Rs 260 crore as compared with Rs 99 crore in Q4’FY20. EPS of Rs 16.4 vs Rs 6.4 in Q4’FY19
  • Q4’FY19 had an exceptional charge of Rs 235 crore related to settlement of IFC convertible loan
• Normalised PAT at Rs 260 crore vs Rs 135 crore in Q4’FY19. Normalised EPS at Rs 16.4 vs Rs 8.5 in Q4’FY19
• Capex in Q4’FY20 of Rs 89 crore
• Net debt on a constant currency basis lower by Rs 297 crore during Q4’FY20
• In Q4’FY20, company announced and paid an interim dividend @ 500% i.e. Rs 5 per share of Rs 1 paid up for FY20, which is the final dividend for the year as well

Segment wise analysis

1. Pharmaceuticals segment

• Pharmaceuticals revenue at Rs 1,483 crore, an increase of 6 per cent YoY and 2 per cent QoQ. Specialty Pharma and Generics segments increased by 13 per cent YoY and 17 per cent YoY, respectively. CDMO revenue decreased 13 per cent YoY due to COVID-19 related disruption at the API plant in March
• Pharmaceuticals EBITDA at Rs 429 crore, an increase of 50 per cent YoY with margin of 28.9 per ent as compared to 20.3 per cent in Q4’FY19 and 28.4 per cent in Q3’FY20
• Pharmaceuticals adjusted EBITDA at Rs 440 crore increased by 37 per cent YoY with a margin of 29.7 per cent as compared to 22.9 per cent in Q4’FY19
• R&D spent during the quarter of Rs. 42 crore – 2.9 per cent to segment sales. R&D debited to P&L is Rs. 43 crore – 2.9 per cent to segment sales
• During the quarter, the company transferred the India Branded Pharmaceuticals business to its indirect subsidiary, Jubilant Generics.

1. Life Science Ingredients segment

• LSI revenue in Q4FY20 at Rs 823 crore compared to Rs 912 crore in Q4FY19
• EBITDA at Rs 118 crore increased by 17 per cent YoY and 18 per cent QoQ with margin of 14.4 per cent as compared to 11 per cent in Q4’FY19

1. Drug Discovery & Development Solutions¹ segment

• DDDS revenue increased by 25 per cent YoY to Rs 85 crore led by growth in Drug Discovery Services business
• EBITDA at Rs 35 crore as compared to Rs 1 Crore in Q4’FY19 with margin improved to 40.7 per cent from 1.1 per cent in Q4’FY19.

1. Drug Discovery & Development Solutions include the Drug Discovery Services (Jubilant Biosys & Jubilant Chemsys) business and Proprietary Drug Discovery business (Jubilant Therapeutics)

FY20 Highlights

Consolidated

• Revenue at Rs 9,154 crore up from Rs 9,111 crore in FY19
• Reported EBITDA at Rs 1,995 Crore increased by 12 per cent YoY. EBITDA margin at 21.8 per cent against 19.5 per cent in FY19, an increase of 231 bps
• Adjusted EBITDA after one-off expenses at Rs 2,066 crore vs Rs 1,860 crore in FY19, growth of 11 per cent YoY. Adjusted EBITDA margin in FY20 was 22.6 per cent vs 20.4 per cent in FY19
• Finance costs at Rs 287 crore as compared to Rs 220 Crore in FY19.
• Net profit at Rs 898 crore up 56 per cent YoY EPS of Rs 56.4 vs Rs 36.9 in FY19
  • FY20 exceptional charge of Rs 35 crore was related to Rs 23.3 crore charge for prepayment of high yield bonds and NCDs and Rs 11.3 crore related to asset write-off. FY19 exceptional charge of Rs 280 crore was related to settlement of IFC convertible loan
• Normalised PAT at Rs 933 crore vs Rs 855 Crore in FY19. Normalised EPS at Rs 58.6 vs Rs 53.7 in FY19
• Capex in FY20 of Rs 516 crore
• Net debt lower by Rs 514 crore during FY20

Segment wise analysis

1. Pharmaceuticals segment

• Revenue at Rs 5,714 Crore, increased by 7 per cent YoY, led by growth in all three revenue segments with 7 per cent growth in specialty pharma, 5 per cent growth in CDMO and 10 per cent growth in generics
• EBITDA at Rs  1,555 crore up 13 per cent YoY with a margin of 27.2 per cent as compared to 25.7 per cent in FY19
• Adjusted EBITDA at Rs  1,619 Crore increased 11 per cent YoY with a margin of 28.3 per cent as compared to 27.2 per cent in FY19
• R&D spent during FY20 at Rs 228 crore – 4 per cent to segment sales. R&D debited to P&L is Rs 199 crore – 3.5 per cent to segment sales

1. Life Science Ingredients segment

• LSI revenue at Rs 3,179 crore vs Rs 3,545 crore during FY19. Strong growth witnessed in specialty intermediates and nutritional products
• EBITDA at Rs 431 crore with margin of 13.6 per cent as compared to 12.6 per cent in FY19.
• Adjusted EBITDA at Rs 440 crore, with a margin of 13.8 per cent as compared to 12.6 per cent in FY19

1. Drug Discovery & Development Solutions segment

• • DDDS segment revenue increased 21 per cent YoY to Rs 262 crore
  • EBITDA increased by over three times to Rs 73 crore from Rs 18 crore FY19; FY20 margin at 28.1 per cent up from 8.3 per cent in FY19

• FY20 exceptional charge of Rs 35 crore was related to Rs  23.3 crore charge for prepayment of high yield bonds and NCDs and Rs 11.3 crore related to asset write-off in Q3’FY20
• Q4’FY19 and FY19 exceptional charge of Rs 235 crore and Rs 280 crore was related to settlement of IFC convertible loan