corporate briefing session - 2020 - abbott laboratories

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


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)


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.


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


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


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).


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


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


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.


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


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


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


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


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

Thank you

corporate briefing session - 2020 - abbott laboratories

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