Table of Contents
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
October 2013
Commission File Number – 1-15182
DR. REDDY’S LABORATORIES LIMITED
(Name of Registrant)
8-2-337, Road No. 3, Banjara Hills
Hyderabad, Andhra Pradesh 500 034, India
+91-40-4900-2900
(Address of Principal Executive Offices)
Indicate by check mark whether registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b):
Not applicable.
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(1) Press Release, “Dr. Reddy’s Q2 & H1 FY14 Financial Results”, October 31, 2013.
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| Press Release |
| |
| Dr. Reddy’s Laboratories Ltd. | ||
| 8-2-337, Road No. 3 | ||
| Banjara Hills, Hyderabad - 500 034 | ||
| Andhra Pradesh, India | ||
| Tel: 91-40-4900-2900 | ||
| Fax: 91-40-4900-2999 | ||
| www.drreddys.com | ||
Dr. Reddy’s Q2 & H1 FY14 Financial Results
Q2 FY14 Revenues at
33.6 billion |
H1 FY14 Revenues at
62.0 billion | |
| (YoY growth of 17%) | (YoY growth of 14%) | |
| Q2 FY14 EBITDA at
9.5 billion |
H1 FY14 EBITDA at
15.2 billion | |
| (YoY growth of 27%) | (YoY growth of 22%) | |
Hyderabad, India, October 31, 2013: Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter ended September 30, 2013 under International Financial Reporting Standards (IFRS).
Key Highlights (Q2 FY14)
| • | Consolidated revenues at
33.6 billion, YoY growth of 17%. |
| • | Revenues from the Global Generics (GG) segment at
26.5 billion, YoY growth of 32%. Growth driven by North America, Russia & other Emerging Markets. |
| • | Revenues from the Pharmaceutical Services and Active Ingredients (PSAI) segment at
6.4 billion, YoY decline of 19%. |
| • | Research & Development (R&D) expenses at
3.0 billion, 9% to revenues versus 6.1% to revenues as in Q2 FY13. |
| • | Selling, general & administrative (SG&A) expenses at
9.7 billion, 29% to revenues versus 27.8% to revenues as in Q2 FY13. |
| • | EBITDA at
9.5 billion, 28.3% to revenues versus 25.9% to revenues as in Q2 FY13. |
| • | PAT at
6.9 billion, 20.6% to revenues versus 13.6% to revenues as in Q2 FY13. |
| • | During the quarter, the company launched 19 new generic products, filed 13 new product registrations and filed 8 DMFs globally. |
Note: Q2 FY 13 Income Statement considered is as submitted to the US SEC in the form 6K.
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| All figures in millions, except EPS | All US dollar figures based on convenience translation rate of 1USD =
62.58 |
Dr. Reddy’s Laboratories Limited and Subsidiaries
Unaudited Consolidated Income Statement
| Particulars |
Q2 FY14 | Q2 FY13 | Growth % |
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| ($) | (
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% | ($) | (
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% | |||||||||||||||||||||||
| Revenues |
537 | 33,575 | 100.0 | 460 | 28,809 | 100.0 | 17 | |||||||||||||||||||||
| Cost of revenues |
225 | 14,106 | 42.0 | 219 | 13,708 | 47.6 | 3 | |||||||||||||||||||||
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| Gross profit |
311 | 19,469 | 58.0 | 241 | 15,101 | 52.4 | 29 | |||||||||||||||||||||
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| Operating Expenses |
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| Selling, general & administrative expenses |
156 | 9,737 | 29.0 | 128 | 8,013 | 27.8 | 21 | |||||||||||||||||||||
| Research and development expenses |
48 | 3,009 | 9.0 | 28 | 1,759 | 6.1 | 71 | |||||||||||||||||||||
| Impairment loss on intangible assets |
8 | 507 | 1.8 | |||||||||||||||||||||||||
| Impairment loss on goodwill |
3 | 181 | 0.6 | |||||||||||||||||||||||||
| Other operating income |
(10 | ) | (637 | ) | (1.9 | ) | (6 | ) | (397 | ) | (1.4 | ) | 60 | |||||||||||||||
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| Results from operating activities |
118 | 7,360 | 21.9 | 80 | 5,038 | 17.5 | 46 | |||||||||||||||||||||
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| Net finance income |
(5 | ) | (291 | ) | (0.9 | ) | (6 | ) | (371 | ) | (1.3 | ) | (22 | ) | ||||||||||||||
| Share of profit of equity accounted investees |
(1 | ) | (44 | ) | (0.1 | ) | (0 | ) | (28 | ) | (0.1 | ) | 56 | |||||||||||||||
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| Profit before income tax |
123 | 7,695 | 22.9 | 87 | 5,437 | 18.9 | 42 | |||||||||||||||||||||
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| Income tax expense |
13 | 792 | 2.4 | 24 | 1,512 | 5.2 | (48 | ) | ||||||||||||||||||||
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| Profit for the period |
110 | 6,903 | 20.6 | 63 | 3,925 | 13.6 | 76 | |||||||||||||||||||||
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| Diluted Earnings per share |
0.65 | 40.5 | 0.37 | 23.1 | 75 | |||||||||||||||||||||||
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EBITDA Computation:
| Particulars |
Q2 FY14 | Q2 FY13 | ||||||||||||||
| ($) | (
) |
($) | (
) |
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| Profit before income tax |
123 | 7,695 | 87 | 5,437 | ||||||||||||
| Interest (income)/expense |
1 | 71 | (1 | ) | (31 | ) | ||||||||||
| Depreciation |
19 | 1,171 | 15 | 943 | ||||||||||||
| Amortization |
9 | 562 | 7 | 433 | ||||||||||||
| Impairment |
— | — | 11 | 688 | ||||||||||||
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| EBITDA |
152 | 9,499 | 119 | 7,470 | ||||||||||||
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SEGMENTAL ANALYSIS
Global Generics
Revenues from Global Generics segment for
Q2 FY14 at
26.5 billion, YoY growth of 32% driven by North America, Russia and other Emerging Market territories.
| • | Revenues from North America for Q2 FY14 at
13.2 billion, YoY growth of 43%. Growth largely driven by:- |
| • | Products launched in limited competition space namely finasteride 1mg, isotretinoin, zoledronic acid (5mg/100mL), zoledronic acid (4mg/5ml) etc during previous quarters post Sep’2012 and 4 new products which were launched during the quarter - azacitidine, decitabine, donepezil 23mg, and divalproex ER tabs. |
| • | Significant traction in market share of key existing products namely fondaparinux, omeprazole DR etc |
| • | During the quarter, 4 ANDAs were filed. Cumulatively, 62 ANDAs are pending for approval with the USFDA of which 39 are Para IVs and we believe 9 have ‘First To File’ status. |
| • | Revenues from Emerging Markets (which include Russia, CIS countries and RoW territories) for Q2 FY14 at
7.3 billion, YoY growth of 42%. |
| • | Revenues from Russia at
4.6 billion, YoY growth of 44%. Growth was largely driven by volume uptake in the current quarter on account of seasonal impact. |
| • | Revenues from CIS markets at
0.9 billion, YoY growth of 39%. Growth was largely driven by volume uptake of existing products and introduction of new products in Ukraine. |
| • | Revenues from RoW territories stood at
1.8 billion, YoY growth of 36%. |
| • | Revenues from India for Q2 FY14 at
4.2 billion, YoY growth of 8.5%. |
| • | Resilient growth after considering trade disruptions and impact of the revised prices under new pharma pricing policy. |
| • | Revenues from Europe for Q2 FY14 at
1.8 billion, remained flat YoY. |
Pharmaceutical Services and Active Ingredients (PSAI)
| • | Revenues from PSAI for Q2 FY14 at
6.4 billion, YoY decline of 19%. Degrowth on the back of lower number of ‘launch molecules’ to our customers during the quarter. |
| • | During the quarter, 8 DMFs were filed globally, including 1 in the US and 1 in Europe. The cumulative number of DMF filings as of September 30, 2013 is 590. |
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INCOME STATEMENT HIGHLIGHTS:
| • | Gross profit margin at 58% in Q2 FY14 improved by nearly 560 basis points versus Q2 FY13. Gross profit margin for Global Generics and PSAI business segments are at 66.1% and 24.6% respectively. |
GG gross margin improved primarily on account of higher contribution from new product launches in North America, where as PSAI gross margin declined, primarily on the back of lower number of launch molecules to our customers and relatively higher overheads during the quarter.
| • | SG&A expenses including amortization in Q2FY14 at
9.7 billion, YoY growth of 21%. The increase is primarily towards select brand building activities in the Emerging Market territories. |
| • | R&D expenses stood at
3.0 billion, YoY growth of 71%; 9% to revenues in Q2 FY14 as compared to 6.1% to revenues in Q2 FY13. |
| • | Net Finance income at
291 million in Q2 FY14 compared to the net finance income of
371 million in Q2 FY13. The change is on account of : |
| • | Net incremental forex impact of
23 million |
| • | Incremental net interest expense of
103 million |
| • | EBITDA for Q2 FY14 at
9.5 billion, YoY growth of 27%; 28.3% to revenues. |
| • | Profit after Tax in Q2 FY14 at
6.9 billion, YoY growth of 76%. |
| • | Diluted earnings per share in Q2 FY 14 at
40.5 |
| • | Capital expenditure for Q2 FY14 is
3.8 billion. |
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All US dollar figures based on convenience translation rate of 1USD =
62.58
Appendix 1: Key Balance Sheet Items
| (in millions) | ||||||||||||||||
| Particulars |
As on 30th Sep 2013 | As on 30th June 2013 | ||||||||||||||
| ($) | (
) |
($) | (
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| Cash and cash equivalents and current investments |
435 | 27,202 | 478 | 29,907 | ||||||||||||
| Trade receivables |
532 | 33,291 | 466 | 29,168 | ||||||||||||
| Inventories |
381 | 23,874 | 360 | 22,536 | ||||||||||||
| Property, plant and equipment |
679 | 42,477 | 629 | 39,393 | ||||||||||||
| Goodwill and Other Intangible assets |
244 | 15,274 | 236 | 14,787 | ||||||||||||
| Loans and borrowings (current & non-current) |
786 | 49,200 | 702 | 43,937 | ||||||||||||
| Trade payables |
173 | 10,828 | 161 | 10,076 | ||||||||||||
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| Total Equity |
1,248 | 78,086 | 1,199 | 75,051 | ||||||||||||
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Appendix 2: Revenue Mix by Segment
| (in millions) | ||||||||||||||||||||||||||||
| Q2 FY14 | Q2 FY13 | Growth % |
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| ($) | (
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% | ($) | (
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% | |||||||||||||||||||||||
| Global Generics |
424 | 26,548 | 79 | 321 | 20,103 | 70 | 32 | |||||||||||||||||||||
| North America |
13,244 | 50 | 9,270 | 46 | 43 | |||||||||||||||||||||||
| Europe |
1,761 | 6 | 1,777 | 9 | (1 | ) | ||||||||||||||||||||||
| India |
4,207 | 16 | 3,879 | 19 | 8 | |||||||||||||||||||||||
| Russia & Other CIS |
5,516 | 21 | 3,841 | 19 | 44 | |||||||||||||||||||||||
| RoW |
1,820 | 7 | 1,336 | 7 | 36 | |||||||||||||||||||||||
| PSAI |
102 | 6,403 | 19 | 126 | 7,875 | 27 | (19 | ) | ||||||||||||||||||||
| North America |
944 | 15 | 1,353 | 17 | (30 | ) | ||||||||||||||||||||||
| Europe |
2,358 | 37 | 2,906 | 37 | (19 | ) | ||||||||||||||||||||||
| India |
1,071 | 17 | 1,148 | 15 | (7 | ) | ||||||||||||||||||||||
| RoW |
2,030 | 31 | 2,468 | 31 | (18 | ) | ||||||||||||||||||||||
| Proprietary Products & Others |
10 | 624 | 2 | 13 | 831 | 3 | (25 | ) | ||||||||||||||||||||
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| Total |
536 | 33,575 | 100 | 460 | 28,809 | 100 | 17 | |||||||||||||||||||||
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| All figures in millions, except EPS | All US dollar figures based on convenience translation rate of 1USD =
62.58 |
Appendix 3: Consolidated Income Statement
| Particulars |
H1 FY14 | H1 FY13 | Growth % |
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| ($) | (
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% | ($) | (
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% | |||||||||||||||||||||||
| Revenues |
991 | 62,024 | 100.0 | 866 | 54,215 | 100.0 | 14 | |||||||||||||||||||||
| Cost of revenues |
440 | 27,536 | 44.4 | 409 | 25,574 | 47.2 | 8 | |||||||||||||||||||||
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| Gross profit |
551 | 34,488 | 55.6 | 458 | 28,641 | 52.8 | 20 | |||||||||||||||||||||
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| Operating Expenses |
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| Selling, general & administrative expenses |
296 | 18,530 | 29.9 | 260 | 16,291 | 30.0 | 14 | |||||||||||||||||||||
| Research and development expenses |
87 | 5,438 | 8.8 | 53 | 3,322 | 6.1 | 64 | |||||||||||||||||||||
| Impairment loss on intangible assets |
8 | 507 | 0.9 | |||||||||||||||||||||||||
| Impairment loss on goodwill |
3 | 181 | 0.3 | |||||||||||||||||||||||||
| Other operating income |
(16 | ) | (1012 | ) | (1.6 | ) | (10 | ) | (615 | ) | (1.1 | ) | 65 | |||||||||||||||
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| Results from operating activities |
184 | 11,532 | 18.6 | 143 | 8,956 | 16.5 | 29 | |||||||||||||||||||||
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| Net finance income |
(4 | ) | (221 | ) | (0.4 | ) | (3 | ) | (159 | ) | (0.3 | ) | 39 | |||||||||||||||
| Share of profit of equity accounted investees |
(1 | ) | (79 | ) | (0.1 | ) | (1 | ) | (47 | ) | (0.1 | ) | 69 | |||||||||||||||
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| Profit before income tax |
189 | 11,832 | 19.1 | 146 | 9,162 | 16.9 | 29 | |||||||||||||||||||||
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| Income tax expense |
21 | 1,320 | 2.1 | 30 | 1,877 | 3.5 | (30 | ) | ||||||||||||||||||||
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| Profit for the period |
168 | 10,512 | 17.0 | 116 | 7,285 | 13.4 | 44 | |||||||||||||||||||||
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| Diluted EPS |
0.98 | 61.6 | 0.68 | 42.8 | 44 | |||||||||||||||||||||||
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Appendix 4: EBITDA Computation:
| Particulars |
H1 FY14 | H1 FY13 | ||||||||||||||
| ($) | (
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($) | (
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| Profit before income tax |
189 | 11,832 | 146 | 9,163 | ||||||||||||
| Interest (income) / expense |
0 | 11 | (0 | ) | (29 | ) | ||||||||||
| Depreciation |
37 | 2,288 | 29 | 1,839 | ||||||||||||
| Amortization |
17 | 1,058 | 13 | 833 | ||||||||||||
| Impairment |
11 | 688 | ||||||||||||||
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| EBITDA |
243 | 15,189 | 200 | 12,494 | ||||||||||||
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Disclaimer
This press release includes forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, our ability to successfully implement our strategy, the market acceptance of and demand for our products, our growth and expansion, technological change and our exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future.
About Dr. Reddy’s
Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products – Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Major therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management and anti-infective. Major markets include India, USA, Russia-CIS and Europe apart from other select geographies within Emerging Markets.
For more information, log on to: www.drreddys.com
CONTACT INFORMATION
Investors and Financial Analysts:
Kedar Upadhye at kedaru@drreddys.com / +91-40-66834297
Saunak Savla at saunaks@drreddys.com / +91-40-49002135
Milan Kalawadia (USA) at mkalawadia@drreddys.com / +1 908-203-4931
Media:
S Rajan at rajans@drreddys.com / +91-40-49002445
Note: All discussions in this release are based on unaudited consolidated IFRS financials.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DR. REDDY’S LABORATORIES LIMITED (Registrant) | ||||||
| By: | /s/ Sandeep Poddar | |||||
| Date: October 31, 2013 | Name: | Sandeep Poddar | ||||
| Title: | Company Secretary | |||||
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