Corporate Briefing Session - 2020 - Abbott Laboratories
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Corporate Briefing Session - 2020
22nd December, 2020
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Table of Contents
• Company Overview
• Economic Overview
• Financial Results for 2019
• Financial Results for Q3 2020
• Q&A
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Two manufacturing facilities
1,468 Employees
> 150 Products
Company Overview
Abbott Laboratories (Pakistan) Limited
Incorporated on July 02, 1948
1962 – First manufacturing
facility set-up in Karachi
1982 – Listed as a public limited
company in Pakistan
Pharmaceuticals
Nutritional
Other segments (mainly includes diagnostics and
diabetes)
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Pakistan – Macro Economic OverviewGross Domestic Product Growth (GDP%)
Policy Rate & Inflation Rate
Pakistan Economy – Retrospective Keystones
3.60% 3.80% 3.70%4.10% 4.10%
4.50%
5.30% 5.50%
3.29%
-0.40%-1%
0%
1%
2%
3%
4%
5%
6%
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 (P)
Growth Projection for FY21:WB: 0.50%; IMF: 1.00% ADB: 2.00%; SBP: 2.00%FITCH: 1.2%; S&P: 1.30%
4%
6%
8%
10%
12%
14%
16%
Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
Monthly National CPI Policy rate
• FY20 GDP growth at -0.4% — the industrial and services sectors stalled by the coronavirus outbreak.
• Future outlook for growth bleak — estimated by IMF at 1.00% and remain uncertain in future due to coronavirus respiratory disease.
• Policy rate — remain unchanged to 7% by SBP in call to support business community and growth.
• Inflation measured at 8.30% in Nov’20 — recent positive supply side shocks to food prices. Average CPI for 5MFY20 stands at 8.75%.
• Inflation Outlook FY2021 — expected in the range of 7% -9%.
• Foreign exchange reserves — improvement driven by organic reserves building instead of foreign borrowing. FX stands at USD 20bn (SBP USD 13bn and USD 7bn commercial banks) as of 04th Dec,2020 against USD 16bn (SBP USD 9bn and USD 7bn commercial banks) same period last year.
• Workers remittance — increased by 26.89% (from USD 9.2bn to USD 11.7bn FY20 & FY21 respectively) due to formalization of remittances under the Pakistan Remittances Initiative (PRI) and use of digital channels.
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Inflow & OutflowCurrent Account Balance vs. Remittances
(FY20 & 4MFY21)Foreign Reserves & Exchange Rate
(FY20 vs 4MFY21)
0
500
1,000
1,500
2,000
2,500
3,000
(800)
(600)
(400)
(200)
-
200
400
600
Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20
Current Account RemittancesUSD - M
• Significant improvement in the current account:
• 4M-FY21 Current Account Surplus of USD 1.16bn versus
the deficit of USD 1.4bn in the same period last year.
• Surplus of USD 382mn in Oct20 versus USD 59mn in
Sept20.
• Current Account Deficit projection:
• SBP 1.0% to 2.0% of the GDP for FY21
• IMF 2.5% of the GDP for FY21
145
150
155
160
165
170
0
5,000
10,000
15,000
20,000
Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20
Total FX reserves Exchange Rate
• Rise in Foreign Exchange reserves:
• Increased to USD 20bn in Dec 2020 (last time in February
2018) due to:
• Dollar inflows caused by IMF programme and pledged
support by World Bank, ADB and AIIB.
• Market-based Exchange Rate Regime
• Better Balance of Payment Position
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Foreign Exchange Parity
USD/PKR Movement Economic Impact
110.56110.57
115.62
121.47
128.50
124.27
133.99
138.60138.40
141.40
151.45
164.06
160.05
156.63
155.36
167.19
160.37
168.37
158.17
160.14
Dec-17 May-18 Oct-18 Mar-19 Aug-19 Jan-20 Jun-20 Nov-20
1USD/PKR to close 2020 at PKR 160.50 as per commercial banks
2Roshan Digital Accounts initiative by SBP may further help in boosting inflows from non-resident Pakistanis.
3Debt Relief in the form of debt servicing suspension and new financing may amount to USD 3.2 bn.
4
Resilient flow of remittances buffers foreign exchange reverses.
5
Tax collection - PKR 1.690tr during the July-Nov FY21 exceeded projected target of PKR 1.669tr.
Financial Results - 2019
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Key Highlights – FY2019
Rs. 30.16bnSales Revenue
1.5%Sales Growth
28.3%Gross Profit
Margin
4.3%Net Profit
Margin
• Overall revenue of the Company increased by 1.5% reaching Rs. 30.16 bn.
• Decline in profitability mainly on account of devaluation of rupee and inflation.
• Price adjustments were not sufficient to offset the impact of the two factors above.
• Earnings per share was Rs. 13.28 per share (2018: Rs. 27.52 per share).
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Segment wise Revenue (PKR in millions)
Segment 2019 2018% Inc / (Dec)
Pharmaceutical 21,202 21,879 (3.1)%
Nutritional 6,204 5,349 16.0%
Others 2,750 2,491 10.4%
Total 30,156 29,719 1.5%
Revenue Analysis – FY19
➢ Pharmaceuticals declined on the back on challenging economic and regulatory environment.
➢ Nutrition sales increased by 16.0% mainly by volume growth in PediaSure.
➢ Abbott market share as per IQVIA (formerly IMS) was 5.9% for December 2019.
29,719
30,156
26,000
26,500
27,000
27,500
28,000
28,500
29,000
29,500
30,000
30,500
2018 2019
Revenue
1.5%
PK
R in
mill
ion
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Segment-wise GP (PKR in millions)
Segment 2019 GP % 2018 GP %
Pharmaceutical 6,058 28.6% 7,614 34.8%
Nutritional 1,545 24.9% 1,386 25.9%
Others 925 33.6% 801 32.2%
Total 8,528 28.3% 9,801 33.0%
Segment Gross Profit analysis – FY19
- Segment profitability had been adversely affected on account of the following:
❑ Rupee devaluation;
❑ Increase in prices of raw materials; and
❑ General inflation.
9,801
8,528
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
10,000
2018 2019
Segment GP
Financial Results – Q3 2020
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Key Highlights – Q3 2020
Rs. 24.97bnSales Revenue
12.1%Sales Growth
35.8%Gross Profit
Margin
12.4%Net Profit
Margin
• Overall revenue of the Company increased by 12.1% reaching Rs. 24.97 bn.
• Export sales declined by 30% on account of cancellation / delays in shipments due to COVID.
• Profitability driven by Product mix, Cost rationalization and Price adjustments.
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Segment wise Revenue (PKR in millions)
SegmentJan - Sep
2020Jan - Sep
2019% Inc / (Dec)
Pharmaceutical 16,916 15,674 7.9%
Nutritional 6,141 4,545 35.1%
Others 1,915 2,061 (7.1%)
Total 24,972 22,280 12.1%
Revenue Analysis – Q3 2020
➢ Pharmaceutical sales increased on account of sustained performance of established brands.
➢ Sales for Nutrition driven mainly by increase in sales of adult nutritional supplements.
➢ Others: Sales for the diagnostic division declined by 12% primarily on account of closures of OPDs during COVID.
22,280
24,972
20,000
21,000
22,000
23,000
24,000
25,000
Q3 2019 Q3 2020
Sales
12.1%
PK
R in
mill
ion
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Segment-wise GP (PKR in millions)
SegmentJan - Sep
2020GP %
Jan - Sep 2019
GP %
Pharmaceutical 5,487 32.4% 4,787 30.5%
Nutritional 2,762 45.0% 791 17.4%
Others 694 36.2% 738 35.8%
Total 8,943 35.8% 6,316 28.3%
Segment Gross Profit analysis – Q3 2020
- Segment profitability has improved on account of the following:
❑ Price increases;
❑ Product mix; and
❑ Cost-containment initiatives taken during the year.
6,316
8,943
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Q3 2019 Q3 2020
Segment GP
PK
R in
mill
ion
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Statement of Profit or Loss – Q3 2020
Description %Jan - Sep
2020%
Jan - Sep 2019
Variance – Favorable / (Unfavorable)
Rupees in millions %
Sales 100 24,972 100 22,280 2,692 12
Cost of Sales 64 16,029 72 15,964 (65) (0)
Gross Profit 36 8,943 28 6,316 2,627 42
Selling and Distribution expenses 16 3,945 18 3,928 (18) (0)
Administrative Expenses 2 481 2 477 (4) (1)
Other income 2 583 1 248 335 135
Other charges 2 565 2 450 (115) (26)
Operating Profit 18 4,535 7 1,709 2,825 165
Finance costs 0 41 0 35 (6) (17)
Profit before taxation 18 4,494 7 1,674 2,819 168
Taxation 6 1388 4 902 (485) (54)
Profit after taxation 12 3106 3 772 2,334 302
--------------------------------------------- Rupees --------------------------------------
Earnings per share 31.72 7.89 23.83 302
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Key Financial Ratios
28.4%
3.5%
35.8%
12.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Gross profit margin Net profit margin
Profit Margins
Q3 2019 Q3 2020
1.74
0.68
1.80
0.95
0.00
0.50
1.00
1.50
2.00
Current ratio Acid test ratio
Liquidity Ratio
Q3 2019 Q3 2020
Ratio Unit Sep – 2020 Sep – 2019
Profitability Ratios
Gross profit margin % 35.8 28.4
Net profit margin % 12.4 3.5
Return on Equity % 21.6 5.9
Return on assets % 13.3 3.6
Liquidity Ratios
Current ratio Times 1.80 1.7 4
Acid test ratio Times 0.95 0.68
Operating cy cle Day s 26.94 56.80
Inventory Turnover Times 2.35 2.07
Investment Ratios
Earning per share Rupees 31.7 2 7 .89
Price earnings ratio Times 18.13 33.45
Div idend per share Rupees 15 10
Market value per share Rupees 7 66.64 351.88
Market Capitalization Rs. in Mn 7 5,054 34,449
Abbott Pakistan - Analyst Briefing – Q3 2020
pk.abbott.com
Statement of Financial Position – Sep 30, 2020
DescriptionSep
2020Dec
2019Variance
Rupees in Millions %
Share capital and reserves
Issued, subscribed and paid-up capital
979 979 - -
Reserves – Capital 736 649 87 13
Reserves – Revenue 12,646 11,744 902 8
Total share capital and reserves
14,361 13,372 989 7
Deferred taxation 287 239 48 20
Long-term lease liabilities 381 298 83 28
Trade and other payables 8,193 6,711 1,482 22
Unclaimed dividend 58 49 9 18
Current maturity of lease liabilities
103 83 20 24
Total liabilities 9,022 7,380 1,642 22
Total Equity and Liabilities 23,383 20,752 2,631 13
DescriptionSep
2020Dec
2019Variance
Rupees in Millions %
Non-current assets
Property, plant and equipment 8,213 8,268 (55) (1)
Intangible assets 72 78 (6) (8)
Long-term loans and advances 71 57 14 25
Long-term deposits 8 8 0 0
Long-term prepayments 2 4 (2) (50)
Total non-current assets 8,366 8,415 (49) (1)
Stores and Spares 259 276 (17) (6)
Stock-in-trade 6,817 6,049 768 13
Trade debts 526 904 (378) (42)
Loans and advances 434 133 301 226
Trade deposits and short-term prepayments
566 559 7 1
Interest accrued 6 6 0 0
Other receivables 406 639 (233) (36)
Taxation – net 794 1013 (219) (22)
Cash and bank Balances 5,209 2,758 2451 89
Total current assets 15,017 12,337 2680 22
Total Assets 23,383 20,752 2631 13
Q & A
Thank you
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