Lupin Quarter II, FY2019 – Results

Mumbai: Pharma major Lupin Limited reported its financial performance for the second quarter and six months ended September 30^th, 2018. These results were taken on record by the Board of Directors at a meeting held in Mumbai today.

Key Financial & Performance Highlights

Sales for the quarter grew by 3.1% to Rs. 38,909 m. compared to Rs. 37,746 m. in Q1 FY2019
- Sales for quarter increased by 0.4% compared to Rs. 38,742 m. in Q2 FY2018
- H1 FY2019: Sales were Rs. 76,655 m. compared to Rs. 76,810 m. in H1 FY2018

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) for the quarter grew by 9.7% to Rs. 7,803 m. (20.1% of sales) compared to Rs. 7,112 m. (18.8% of sales) in Q1 FY2019
- EBITDA for the quarter decreased by 15.8% compared to 9,271 m. in Q2 FY2018
- H1 FY2019: EBITDA was 14,915 m. compared to Rs. 17,274 m. in H1 FY2018

Net profits for the quarter grew by 31.2 % to Rs. 2,660 m. compared to Rs. 2,028 m. in Q1 FY2019
- Net profits for the quarter decreased by 41.5% compared to Rs. 4,550 m. in Q2 FY2018
- H1 FY2019: Net profits were Rs. 4,687 m. compared to Rs. 8,131 m. in H1 FY2018

Investment in Research for the quarter was Rs. 3,758 m., 9.7% of sales

Commenting on the results, Mr. Nilesh Gupta, Managing Director, Lupin Limited said, “This quarter we saw promising developments on the specialty front with the Solosec launch in full swing and a positive CHMP opinion for NaMuscla. Aided by forex and markets like the US starting to stabilize, we are now getting back on growth mode. We have made meaningful progress on our cost optimization efforts and these should start playing out from the next fiscal. Our growth will be fueled by new product launches in the near term and meaningful evolution of products in the complex generic, biosimilar and specialty space in the mid to long-term.”

Consolidated Unaudited Financial Results – Quarter II, FY2019

Amount in Rs. m.
Particulars	Q2 FY2019	% of sales	Q1 FY2019	% of sales	QoQ Growth %	Q2 FY2018	% of sales	YoY Growth %
Sales	38,909	100.0%	37,746	100.0%	3.1%	38,742	100.0%	0.4%
Other operating income	601	1.5%	814	2.2%	-26.2%	778	2.0%	-22.8%
Total Revenue from operations	39,510	*101.5%*	38,560	*102.2%*	*2.5%*	39,520	*102.0%*	*0.0%*

Material cost	13,928	35.8%	14,442	38.3%	-3.6%	12,865	33.2%	8.3%
Gross Profit (Excl. Other operating income)	24,981	*64.2%*	23,304	*61.7%*	*7.2%*	25,877	*66.8%*	*-3.5%*

Employee cost	7,938	20.4%	7,494	19.9%	5.9%	7,250	18.7%	9.5%
Manufacturing & Other expenses	12,148	31.2%	11,354	30.1%	7.0%	10,874	28.1%	11.7%
Other Income	2,307	5.9%	1,842	4.9%	25.2%	740	1.9%	211.8%
EBITDA	7,803	*20.1%*	7,112	*18.8%*	*9.7%*	9,271	*23.9%*	*-15.8%*

Depreciation & Amortization	2,655	6.8%	2,590	6.9%	2.5%	2,722	7.0%	-2.5%
EBIT	5,148	*13.2%*	4,522	*12.0%*	*13.8%*	6,549	*16.9%*	*-21.4%*

Finance cost	738	1.9%	687	1.8%	7.4%	479	1.2%	54.1%
PBT	4,410	*11.3%*	3,835	*10.2%*	*15.0%*	6,070	*15.7%*	*-27.3%*

Current tax	1,843		1,468			1,468
Deferred tax	-114		343			72
Tax	1,729	*4.4%*	1,811	*4.8%*	*-4.5%*	1,540	*4.0%*	*12.2%*
PAT	2,681	6.9%	2,024	5.4%	32.5%	4,530	11.7%	-40.8%
(+) Share of Profit from Joint Controlled entity	4		7			39
(-) Non-Controlling Interest	25		3			19
Net Profit	2,660	*6.8%*	2,028	*5.4%*	*31.2%*	4,550	*11.7%*	*-41.5%*

Income Statement highlights – Q2 FY2019

Material cost decreased by 246 bp to 35.8% of sales, at Rs. 13,928 m. compared to Rs. 14,442 m. in

Q1 FY2019

Personnel cost increased by 55 bp to 20.4% of sales, at Rs. 7,938 m. compared to Rs. 7,494 m. in Q1 FY2019
Manufacturing and other expenses increased by 114 bp to 31.2% of sales at Rs. 12,148 m. compared to Rs. 11,354 m. in Q1 FY2019
Investment in Research for the quarter was Rs. 3,758 m. representing 9.7% of sales.

Balance Sheet highlights

Operating working capital increased to Rs. 59,853 m. as on September 30^th, 2018 compared to Rs. 56,395 m. as on June 30^th, 2018. The working capital number of days stands at 141 days as on September 30^th, 2018 compared to 133 days as on June 30^th, 2018.
Capital Expenditure for the quarter was Rs. 1,767 m.
Net Debt-Equity ratio for the company stands at 0.45:1

Sales Mix

Particulars	Q2 FY2019	Q1 FY2019	QoQ growth %	Q2 FY2018	YoY growth %
Formulations	35,562	34,165	4.1%	36,092	-1.5%
North America	12,487	11,858	5.3%	13,611	-8.3%
India	12,032	11,924	0.9%	11,593	3.8%
APAC	6,199	6,077	2.0%	6,357	-2.5%
EMEA	2,949	2,760	6.9%	2,758	6.9%
LATAM	1,459	1,256	16.1%	1,395	4.6%
ROW	436	290	50.0%	378	15.3%
API	3,347	3,581	-6.5%	2,650	26.3%
Total	38,909	37,746	3.1%	38,742	0.4%

Operational Highlights

North America

Lupin’s North America sales for Q2 FY2019 were Rs. 12,487 m. compared sales of Rs. 11,858 m. during Q1 FY2019 and Rs. 13,611 m. during Q2 FY2018; accounting for 32% of Lupin’s global sales.

Q2 FY2019 sales were USD 171 m. compared to USD 168 m. during Q1 FY2019 and USD 204 m. during

Q2 FY2018

The Company launched 5 products in the US market during the quarter. The Company now has 162 products in the US generics market.
Lupin is the 3^rd largest pharmaceutical player in the US by prescriptions for the Total Market (IQVIA MAT September 2018)
Lupin is now the market leader in 64 products in the US generics market and amongst the Top 3 in 111 of its products (market share by prescriptions, IQVIA September 2018)

India

Lupin’s India formulation sales for Q2 FY2019 grew by 0.9% to Rs. 12,032 m. as compared to Rs. 11,924 m. in Q1 FY2019 and by 3.8% as compared to Rs 11,593 m. in Q2 FY2018.

India formulation sales for H1 FY2019 grew by 14.5% to Rs. 23,956 m. as compared to Rs. 20,918 m. during H1 FY2018.

Lupin is the 5^th largest company in the Indian Pharmaceutical Market (IQVIA MAT September 2018).

Asia-Pacific (APAC)

Lupin’s APAC sales were at Rs. 6,199 m. during Q2 FY2019 compared to sales of Rs. 6,077 m. in Q1 FY2019 and Rs. 6,357 m. in Q2 FY2018.

Lupin’s Japan sales were JPY 8,151 m. during Q2 FY2019 compared to JPY 8,129 m. in Q1 FY2019 and JPY 8,685 m. in Q2 FY2018.

Lupin remains the 6^th largest generic player in Japan (IQVIA MAT September 2018).

Lupin’s Philippines sales were PHP 383 m. during Q2 FY2019 compared to PHP 352 m. in Q1 FY2019 and PHP 504 m. in Q2 FY2018.

Europe, Middle-East and Africa (EMEA)

Lupin’s EMEA sales were Rs. 2,949 m for Q2 FY2019 compared to sales of Rs. 2,760 m. in Q1 FY2019 and Rs. 2,758 m. in Q2 FY2018.

Lupin’s South Africa sales were ZAR 283 m. during Q2 FY2019 compared to ZAR 261 m. in Q1 FY2019 an ZAR 270 m. in Q2 FY2018.

Lupin remains the 4^thlargest generic player in the South African market (IQVIA MAT September 2018).

Lupin’s Germany sales were Euro 7.3 m. during Q2 FY2019 compared to Euro 7.5 m. in Q1 FY2019 and Euro 7.6 m. in Q2 FY2018.

Latin America (LATAM)

Lupin’s LATAM sales were Rs. 1,459 m. during Q2 FY2019 compared to Rs. 1,256 m. in Q1 FY2019 and Rs. 1,395 m. in Q2 FY2018.

Lupin’s Brazil sales were BRL 42 m. during Q2 FY2019 compared to BRL 25 m. in Q1 FY2019 and BRL 40 m. in Q2 FY2018.

Lupin’s Mexico sales were MXN 164 m. during Q2 FY2019 compared to MXN 159 m. in Q1 FY2019 and MXN 154 m. in Q2 FY2018.

Global API

Global API sales were Rs. 3,347 m. during Q2 FY2019 as compared to Rs. 3,581 m. during Q1 FY2019 and Rs. 2,650 m. during Q2 FY2018; accounting for 9% of Lupin’s global sales.

Global API sales for H1 FY2019 grew by 27.3% to Rs. 6,928 m. as compared to Rs. 5,442 m. during H1 FY2018.

Research and Development

Revenue Expenditure on R&D during Q2 FY2019 amounted to Rs. 3,758 m., 9.7% of sales as against Rs. 3,753 m., 9.9% of sales during Q1 FY2019 and Rs. 4,739 m., 12.2% of sales during Q2 FY2018.

Lupin filed 4 ANDA and received 7 approvals from the US FDA during the quarter. Cumulative ANDA filings with the US FDA stood at 405 as of September 30^th, 2018, with the company having received 247 approvals to date.

The Company now has 39 First-to-Files (FTF) filings including 14 exclusive FTF opportunities. Cumulative DMF filings stands at 192 as of September 30^th, 2018.

Cumulative filings with European authorities now stands at 59 with the company having received 57 approvals to date.

About Lupin Limited

Lupin is an innovation led transnational pharmaceutical company developing and delivering a wide range of branded & generic formulations, biotechnology products and APIs globally. The Company is a significant player in the Cardiovascular, Diabetology, Asthma, Pediatric, CNS, GI, Anti-Infective and NSAID space and holds global leadership position in the Anti-TB segment.

Lupin is the 13^th largest generics pharmaceutical company in terms of market capitalization (30^th September 2018, Bloomberg) and the 8^th largest generics pharmaceutical company in terms of revenues (30^th June 2018, Bloomberg LTM) globally. The Company is the 3^rd largest pharmaceutical player in the US by prescriptions for the Total Market (IQVIA MAT September 2018); 3^rd largest Indian pharmaceutical company by global revenues (30^th June 2018, Bloomberg LTM); 6^th largest generic pharmaceutical player in Japan (IQVIA MAT September 2018) and 5^th largest company in the Indian Pharmaceutical Market (IQVIA MAT September 2018).

For the financial year ended 31^st March, 2018, Lupin’s Consolidated sales and Net profits before exceptional items were at Rs. 155,598 million (USD 2.41 billion) and Rs. 13,934 million (USD 216 million) respectively. Please visit http://www.lupin.com for more information. You could also follow us on Twitter – www.twitter.com/lupinglobal

CIN: L24100MH1983PLC029442 Registered Office: Lupin Ltd, 3^rd Floor, Kalpataru Inspire, Off Western Express Highway, Santacruz (East), Mumbai 400 055.

For further information or queries please contact –

Pooja Thakran VP – Corporate Communications Email: poojathakran@lupin.com Ph: +91-22-66402531 / 8291013225

Arvind Bothra Head – Investor Relations Email: arvindbothra@lupin.com Ph: +91-22-6640213

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