Corporate Briefing Session AGP Limited 21st December 2020

Corporate Briefing Session

AGP Limited

21st December 2020

TAB

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OF

CO

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EN

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Corporate Information

Industry Updates

Financial Performance Jan – Sep 2020

Quarterly Analysis of Revenue

Market Leaders Brands (In respective molecules)

Quarterly Analysis of profitability

Regulatory Updates

Inorganic Growth Opportunities

Award and Certificates

Employee Wellbeing Initiatives Amidst Covid 19

CSR Initiatives

CORPORATE INFORMATION

Pattern of Shareholding

Board of Directors

AitkenStuart Pakistan (Pvt.) Limited 52.98%

Muller & Phipps (Pakistan) (Pvt.) Limited 13.54%

Baltoro Growth Fund 9.57%

Aspin Pharma (Pvt.) Limited 4.79%

Others 19.12%

Mr. Tariq Moinuddin Khan Chairman

Ms. Nusrat Munshi CEO & Managing Director

Mr. Naved Abid Khan Independent Director

Mr. Zafar Iqbal Sobani Independent Director

Mr. Kamran Nishat Non - Executive Director

Mr. Mahmud Yar Hiraj Non - Executive Director

Mr. M. Kamran Mirza Non - Executive Director

Entity Rating

Entity Rating:Long-Term A+Short-Term A1Outlook Stable

“The ratings reflect AGP's strong business fundamentals. The pharmaceutical

industry has witnessed a higher rate of sustained growth over the years. While

product pricing has been a challenge, the new CPI-linked pricing criteria has

allowed an increase in prices with respect to inflation, indicating a positive sign.

At the same time, AGP's core profitability is strong; any downward revision in

margins must remain range-bound.”

Extract from PACRA’s Rating Report Oct-2020

Meezan Bank Limited have reviewed

the accounts of AGP and found them to

be in compliance with Karachi Meezan

Islamic Index – 30 Criteria set out by

Pakistan Stock Exchange

Shariah Compliance

PHARMACEUTICAL INDUSTRY UPDATES

Source: IMS Q3-2020

Revenue is at trade price excluding institutional sales and exports

33.4

30.5 29.728.1

26.8

21.0

16.0 15.214.0 13.6 13.5

11.6 10.8 10.6 10.2 10.2 9.68.2 7.8 7.4 7.3 7.2

6.1 6.0 5.9

OBS group stands at

17th position.

AGP’s contribution in

revenue is PKR 6 Bn.

As at Sep MAT 2020, overall pharma industry at PKR 485 Billion [USD 3.02 Billion] with 5Y CAGR of 11%

AGP’s 5Y CAGR at 13%;

In 2020 industry growth is mainly led by medicines used in Covid-19 management - such as Panadol, CAC 1000+, Azomax etc.

Prescription based medicines faced challenges as OPDs/clinics remained closed for almost six (6) months;

Top 25 companies constitute around 75% of the total market share;

Around 70% of the market share is with local companies; &

Top 25 corporates, in terms of revenue and growth rate are shown below in the bar diagrams.

FINANCIAL PERFORMANCE 9 MONTHS ENDED SEP 2020

AGP earned a revenue of PKR 5 Billion with net profit of PKR 1.2 Billion

translating into EPS of PKR 4.17, signifying a growth of 10% over LY 9M;

Declared an interim cash dividend of PKR 1.0/share;

Q3 performance has been robust, revenue grew by 29.7% on YoY basis and

28.3% on QoQ basis;

Gross margins were recorded at 54% vs 58% in 2019. Decline was due to (1)

PKR devaluation (162 in 2020 vs 150 in 2019 average rate to 1 USD) and a one-

off provision of Covid-19 antibody testing kits due to rapidly evolving testing

technology. Ignoring this on-off provision gross margin is 56%.

Revenue growth over LY9.4%

Gross profit margin54%

EBITDA margin33%

Net profit margin23%

Return on equity14.5%

3,104 3,537 4,017 4,561 4,991

1,102 1,188

1,365 1,692

2016 2017 2018 2019 2020

3M 9MREVENUE (PKR IN MILLION)

9M : 74%

3M : 26%

9M : 75%

3M : 25%

9M : 75%

3M : 25%

9M : 73%

3M : 27%

QUARTERLY ANALYSIS OF REVENUE

Particulars Jan-Sep 2020 Jan-Sep 2019 Var % Q1 Q2 Q3 Total (9M)

Net Sales 4,991 4,561 9.4%

Quarter wise analysis

The Company started

the year continuing its

growth trajectory,

however March

onwards growth was

impacted due to lock

down across the

country to contain

Covid-19 pandemic.

Net revenue was 9%

higher in Q1, 2020 vs

Q1, 2019.

AGPs domestic

portfolio primarily

consists of prescription

based model which

remained under

pressure due to

corona virus outbreak.

Export sales remained

suppressed due to

borders closure.

Net revenue declined

by 8% in Q2, 2020 vs

Q2,2019.

With the resumption of

regular healthcare

services, owing to

slowdown in Covid-19

cases, Q3 sales

delivered an

impressive

performance.

Net revenue showed a

growth of 30% vs Q3,

2019 with QoQ growth

of more than 28%.

YTD Jan-Sep 2020,

sales grew by 9.4%

driven primarily by

strong volumetric

growth in local sales

as well as exports.

1,611 1,756 1,548 1,417 1,402 1,818

4,561 4,991

2019 2020 2019 2020 2019 2020 2019 2020

CECLOR

612 736895

11011399

2016 2017 2018 2019 2020

684 693 789966 926

2016 2017 2018 2019 2020

446 510621

819 912

2016 2017 2018 2019 2020

336 353 383460 481

2016 2017 2018 2019 2020

MARKET LEADERS BRANDS [IN RESPECTIVE MOLECULES]

RIGIX

OSNATE-D ANAFORTAN PLUS

Source: IMS Q3-2020

Revenue is PKR in Million at trade price excluding institutional sales and exports

5Y CAGR %

Brand Rigix 23.0

Molecule Cetirizine 19.5

5Y CAGR %

Brand OSNATE 19.6

Molecule COLECAL

CIFEROL

13.7

5Y CAGR %

Brand Ceclor 7.9

Molecule Cefaclor 8.0

5Y CAGR %

Brand Anafortan 9.4

Molecule PHLOROG

LUCINOL

9.7


Gross Profit 2,692 2,635 2.2%

GP % 54% 58% Declined due to PKR devaluation and a one-off provisioning of Covid-19 antibody testing kits

EBITDA 1,643 1,580 4.0%

EBITDA % 33% 35% Managed well to contain expenses and maintain EBITDA % at 33%

QUARTERLY ANALYSIS OF PROFITABILITY

933 972 904 773 798 948

2,635 2,692

2019 2020 2019 2020 2019 2020 2019 2020

587 628 498 456 496 559

1,580 1,643

2019 2020 2019 2020 2019 2020 2019 2020


Operating

Profit1,536 1,485 3.5%

OP % 31% 33% Managed well to contain expenses and maintain OP% at 31%

Profit Before

Tax 1,414 1,318 7%

PBT % 28% 29% Managed well to contain expenses and maintain PBT at 28%

502 544 413 380 403 490

1,318 1,414

2019 2020 2019 2020 2019 2020 2019 2020


556 592 467 422 463 522

1,485 1,536

2019 2020 2019 2020 2019 2020 2019 2020


Tax 246 254 -3.5%

Effective Rate 17% 19% Efficient tax management helped to reduce effective tax rate to 17%

PAT 1,169 1,064 9.9%

PAT % 23% 23% Despite tough business environment PAT % is maintained at 23%

77 110 95

60 83 76

254 246

2019 2020 2019 2020 2019 2020 2019 2020

425 435 318 320 321

414

1,064 1,169

2019 2020 2019 2020 2019 2020 2019 2020


REGULATORY UPDATES

• Annual price increase has been implemented on production batches going into production from 1st

Oct and reaching the secondary market end October/ early November

• This will augment sales in the last quarter of the year

Annual Price Increase

• Five AGP products were approved after 2 years by DRAP after its issuance of SRO-967(i) as it

was approved from the Federal Cabinet of Pakistan including 3 Anti HIV drugs (Avonza,

Dolutegravir & Trezav), 1 Anti-Cancer drug (Abevmy) and 1 Hematpoietic drug (Fulphila).

Registration letters are now awaited

• This will help AGP to further strengthen and penetrate in specialized portfolio

Price fixation of new molecules/products

• Since early 2019, there have been periodic disruptions in APIs and Excipients imports from India

• Pursuing proactive inventory management, AGP has developed alternate vendor sources for 90%

of its raw material supplies from India and the remaining are under stability process and testing.

• The Company mitigated the risk by building inventory levels to ensure supply continuity in the

short to medium term.

Import restrictions from India

INORGANIC GROWTH OPPORTUNITIES

It has always been the core

strategy of OBS Group to explore

inorganic growth opportunities;

In line with overall strategy of the

Group and as publicly announced

on June 22, 2020, the Company is

evaluating potential inorganic

growth and acquisition related

investment opportunities;

As authorized by the Board, the Company is in the process of evaluating potential inorganic growth opportunities and conducting feasibility studies;

As soon as any potential opportunity is finalized and approved by the Board, the Company will make appropriate disclosures and disseminate relevant information in accordance with applicable laws.

Being a listed company and

following good practices of

corporate governance, the

Company is barred from sharing

any piece of information unless

any opportunity is finalized and

appropriately disseminated to the

Commission and the Exchange.

AWARD & CERTIFICATES

BEST CORPORATE REPORT AWARD 2019AGP secured 3rd position in Pharma Sector in BCR award 2019.

The competition is held by joint committee of ICAP and ICMAP with

the objective to recognize excellence in corporate reporting, promote

accountability & transparency, and recognize responsible reporting

by companies covering economic, environment and social

performance of the business.

Global Diversity and Inclusion Benchmarks AwardThis year, the Company won the Global Diversity and Inclusion

Benchmarks (GDIB) Award in recognition for its proactive efforts to

infuse diversity and inclusion in work environment. The award was

conferred to the Company at the HR Metrics’ Annual Diversity &

Inclusion Conference and Awards ceremony.

EMPLOYEE WELLBEING INITIATIVES AMIDST COVID 19

Employee Testing

Covid-19 testing of allemployees was conducted toensure their heath andsafety.

Random testing of selectedemployees are conductedon a fortnightly basis.

Needs based tests are alsocarried out continuously.

Company bears the cost ofPCRs & medical treatment.

Precautionary Measures

Employee Screening

Walk through sanitization facility

Availability of face masks and hand sanitizers at Company premises

Bi-weekly disinfectant spray of offices

Other Benefits

Employees were encouraged to work from home in the lock down period, wherever possible

Transport facility was extended to male workers to ensure labor mobility

Additional shifts to ensure social distancing

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Online / virtual consultancies and health awareness sessions on social media

platforms

Initiated a Tree Plantation Campaign under the theme of “Each One Plant

One”

AGP Partnered with Pakistan Cycling Federation to sponsor a cycling race for

cyclists from all over Sindh

AGP sponsored Breast Cancer Awareness Event at Governor House

chaired by the First Lady – Ms. Samina Ali

Distribution of sanitizer and antibody test kits to Indus Hospital and

Government of Punjab

Donated Sanitizers and PPEs to Darul Sukoon

Donated Anesthesia Machine with Ventilator at the Gynecology ward of Jinnah Postgraduate Medical Centre

Distribution of Ration to underprivileged individuals inside

and outside the organization.

THANK YOU

Corporate Briefing Session AGP Limited 21st December 2020

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