Thread by @ValueEducator

#Sequent 2021 Annual Report Details 🐕🐶
@unseenvalue @punitbansal14

Sequent Scientific just published their Annual Report for FY2021. Here are some of the key highlights.
1. 65% of revenue came from regulated markets whereas 35% came from less regulated markets.

Of this, 66% revenue was from formulations and 34% was from API.
2. Figures: ₹905Cr from Formulations and ₹456Cr from API
The business generated over ₹150Cr in cash from operations alone.
CFO/EBITDA for the year stood at 73.27%

3. Revenues for the formulation business were as follows : 46% Europe(3.8% yoy growth), 18% Turkey(37.3% yoy growth), 17% LATAM(78.5% yoy growth), 10% Emerging Markets(31.3% yoy decline), 9% India(98.4% yoy growth)

4. Cash and cash equivalents on the balance sheet - ₹53.7Cr
Short term and long term borrowing on the balance sheet - ₹196.6Cr
Amount spent on capex for the year - ₹52.83Cr

5. They now have 30 commercialized APIs and 1000+ finished dosage formulations across 12 dosage forms
6. Key highlights in the formulation business:
i) Commercialised Tulathromycin, first India R&D developed product, with major commercial success in Europe

ii)Launched Citramox LA, first long-acting injectable & Halofusol, in-house developed oral solution for European markets. Approval was received in less than 12 months of filing
iii)Operationalised multi-year,multi-product distribution arrangement with Zoetis for the Indian market

iv)Submitted first filings in US, Canada, and Australia
v)Started upgradation of the facility in Bremer, Germany for US commercialisation. Thus upgradation will take the capacity to 4X but has been delayed due to COVID related complications.

vi)Currently working on enhancing the Beta-lactam and oral solids manufacturing capacities at the Turkish facility which will be completed in 2022 which will help to meet growing demand from the European market.

7. Key highlights in the API business:
i)Commercialised 3 APIs and submitted 4 USVMF filings
ii)Completed the first phase of expansion at Vizag to and initiated the second phase of expansion which is expected to be completed by the end of this year

iii)Completed de-bottlenecking at Mahad to enhance Albendazole capacities
iv)Signed long-term arrangement with a major animal health company for CDMO and product supplies with co-investments at Vizag

v)Initiated in house manufacturing of key starting materials (KSMs) for backward integration, to mitigate the impact of supply chain disruption and geopolitical challenges
8.R&D pipeline: 35+ products in the pipeline for formulations and 8+ products for API

9.Formulations pipeline:
i)By species: 81% production animals 19% companion animals
ii)By dosage form: 55% injectable, 26% powder/premix, 13% liquid, 6% Solid
10.They now have 4 new board members: Milind Sarwate (Independent Director), Neeraj Bhardwaj(Carlyle nominee),

Gregory John Andrews(Carlyle nominee), Rahul Mukim(Carlyle nominee) and Dr. Fabian Kausche(Carlyle nominee). They bring in a lot of experience in building businesses and expertise in R&D as well as the animal health business.

11.They engaged with Stonehaven Consulting, a specialist firm in the Animal Health space, to help formulate a growth strategy and also hired PwC to help strategise operations for efficiency and cost.

Both projects have been completed and they have a blueprint for how the future business will look.
12.They consolidated the minority interest in Turkey, Belgium and the Netherlands during the year and expect to consolidate Brazil’s business later in the current financial year.

This was largely funded by liquidation of the Strides stake(about ₹157Cr).