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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
January 2015
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 Q3 and 9 Months FY15 Financial Results”, January 29, 2015. |
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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 Q3 and 9 Months FY15 Financial Results
| Q3 FY15 Revenues at
(YoY growth of 9%)
Q3 FY15 EBITDA at
(27% of revenues) |
9M FY15 Revenues at
(YoY growth of 12%)
9M FY15 EBITDA at
(26% of revenues) |
Hyderabad, India, January 29, 2015: Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter and nine months ended December 31, 2014 under International Financial Reporting Standards (IFRS).
Key Highlights (Q3 FY15)
| • | Consolidated revenues at
38.4 billion, year-on-year growth of 9%. |
| • | Revenues from the Global Generics (GG) segment at
31.7 billion, YoY growth of 8%. |
| • | Revenues from the Pharmaceutical Services and Active Ingredients (PSAI) segment at
6.1 billion. YoY growth of 21%. |
| • | Gross Profit Margin at 58.2% in Q3FY15 versus 60.5% as in Q3 FY 14. |
| • | Research & Development (R&D) expenses at
4.3 billion, 11.2% to revenues versus 8.4% to revenues as in Q3 FY14. |
| • | Selling, general & administrative (SG&A) expenses at
11.2 billion, 29.0% to revenues. |
| • | EBITDA at
10.5 billion, 27% to revenues. |
| • | Profit after tax at
5.7 billion, 15% to revenues. |
| • | During the quarter the company launched 13 new generic products, filed 18 new product registrations and 14 DMFs globally. |
During the quarter, the Company completed the acquisition of Habitrol® franchise (an over-the-counter nicotine replacement therapy transdermal patch) from Novartis Consumer Health Inc. and began marketing the product in the U.S. Total consideration paid was U.S.$ 80 million.
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All amounts in millions, except EPS
All US dollar amounts based on convenience translation rate of I USD =
63.04
Dr. Reddy’s Laboratories Limited and Subsidiaries
Unaudited Consolidated Income Statement
| Particulars |
Q3 FY15 | Q3 FY14 | Growth % |
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| ($) | (Rs.) | % | ($) | (Rs.) | % | |||||||||||||||||||||||
| Revenues |
610 | 38,431 | 100 | 561 | 35,338 | 100 | 9 | |||||||||||||||||||||
| Cost of revenues |
255 | 16,079 | 41.8 | 221 | 13,946 | 39.5 | 15 | |||||||||||||||||||||
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| Gross profit |
355 | 22,352 | 58.2 | 339 | 21,391 | 60.5 | 4 | |||||||||||||||||||||
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| Operating Expenses |
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| Selling, general & administrative expenses |
177 | 11,151 | 29.0 | 158 | 9,945 | 28.1 | 12 | |||||||||||||||||||||
| Research and development expenses |
68 | 4,316 | 11.2 | 47 | 2,979 | 8.4 | 45 | |||||||||||||||||||||
| Other (income)/expense, net |
(5 | ) | (341 | ) | (0.9 | ) | (3 | ) | (177 | ) | (0.5 | ) | 93 | |||||||||||||||
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| Results from operating activities |
115 | 7,226 | 18.8 | 137 | 8,644 | 24.5 | (16 | ) | ||||||||||||||||||||
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| Finance (expense)/income, net |
16 | 1,013 | 2.6 | 0 | 15 | 0 | ||||||||||||||||||||||
| Share of profit of equity accounted investees, net of tax |
1 | 47 | 0.1 | 1 | 46 | 0.1 | 0 | |||||||||||||||||||||
| Profit before tax |
131 | 8,286 | 21.6 | 138 | 8,705 | 24.6 | (5 | ) | ||||||||||||||||||||
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| Tax expense |
40 | 2,541 | 6.6 | 40 | 2,521 | 7.1 | 1 | |||||||||||||||||||||
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| Profit for the period |
91 | 5,745 | 15 | 98 | 6,184 | 17.5 | (7 | ) | ||||||||||||||||||||
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| Diluted Earnings Per Share (EPS) |
0.53 | 33.61 | 0.57 | 36.25 | (7 | ) | ||||||||||||||||||||||
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EBITDA Computation
| Particulars |
Q3 FY15 | Q3 FY14 | ||||||||||||||
| ($) | (Rs.) | ($) | (Rs.) | |||||||||||||
| Profit before tax |
131 | 8,286 | 138 | 8,705 | ||||||||||||
| Interest (income) / expense net* |
(5 | ) | (347 | ) | 1 | 48 | ||||||||||
| Depreciation |
23 | 1,462 | 19 | 1,208 | ||||||||||||
| Amortization |
9 | 579 | 9 | 586 | ||||||||||||
| Impairment / (reversal of impairment) adjustment |
8 | 534 | (8 | ) | (497 | ) | ||||||||||
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| EBITDA |
167 | 10,515 | 159 | 10,049 | ||||||||||||
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| EBITDA (% to sales) |
27.3 | 28.4 | ||||||||||||||
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| * | includes profit of sales of investments |
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All US dollar amounts based on convenience translation rate of 1 USD =
63.04
SEGMENTAL ANALYSIS
Global Generics
Revenues are at
31.7 billion, year-on-year growth of 8%, primarily driven by Branded Markets.
| • | Revenues from North America at
16.8 billion, year-on-year growth of 4%. Sequential growth in constant currency at 17%, primarily on account of: |
| • | Sustained performance of FY14 ‘limited competition’ launches namely decitabine, azacitidine, and divalproex sodium ER. |
| • | Progress on market share expansion of key molecules namely ziprasidone, amlodipine-atorvastatin and sumatriptan auto injector. |
| • | 6 new products launched during the quarter. |
| • | 2 ANDA filings during the quarter. Cumulatively, 68 ANDAs are pending for approval with the USFDA of which 43 are Para IVs, and we believe 13 to have ‘First To File’ status. |
| • | Revenues from Emerging Markets at
8.6 billion, year-on-year growth of 16%. |
| • | Revenues from Russia at
4.0 billion, year-on-year decline of 9% primarily on account of the Rouble depreciation. In constant currency, the growth is ~27% on the back of healthy sales. |
| • | Emerging Markets, Ex-Russia at
4.6 billion recorded year-on-year growth of 51% primarily driven by strong performance in Venezuela on the back of continued volume upsides. |
| • | Revenues from India for at
4.3 billion, year-on-year growth of 11%. |
| • | Growth is driven by continued focus on new product launches and prescription growth. |
Pharmaceutical Services and Active Ingredients (PSAI)
| • | Revenues from PSAI at
6.1 billion, year-on-year growth of 21%. |
| • | During the quarter 14 DMFs were filed globally, filed 9 in the ROW and 5 in Europe. The cumulative number of DMF filings as of December 31, 2014 is 720. |
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INCOME STATEMENT HIGHLIGHTS:
| • | Gross profit margin at 58.2% registered ~230 basis points decline vs Q3 FY14 primarily on account of unfavourable currency impact. Gross profit margin for GG and PSAI business segments are at 65.9% and 17.2% respectively. |
| • | SG&A expenses, excluding impairment adjustments, marginally grew by 2%. This increase is largely due to annual increments, additional manpower deployment in the past 12 months and other sales and marketing spend for events specific to this quarter offset by the favourable impact of Emerging Market currency depreciation. |
| • | R&D expenses at
4.3 billion, year-on-year growth of 45%. 11.2% of revenues in Q3 FY15 as compared to 8.4% of revenues in Q3 FY14. The increase is in line with our planned scale-up in development activities. |
| • | Consequent to the decline in the recoverable amounts of certain product / customer contracts related intangible assets, an impairment charge of
534 million was recorded during the quarter. |
| • | Net Finance income at
1,013 million compared to
15 million in Q3 FY14. The increase is on account of : |
| • | Incremental forex benefit of
604 million |
| • | Incremental profit on sales of investments of
174 million |
| • | Net increase in interest income of
221 million |
| • | EBITDA at
10.5 billion, year-on-year growth of 5%; 27% of revenues. |
| • | Profit after Tax at
5.7 billion, year-on-year decline of 7%; 15% of revenues. |
| • | Diluted earnings per share in Q3 FY 15 at
33.61 |
| • | Capital expenditure for Q3 FY15 is
2.65 billion. |
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Appendix 1: Key Balance Sheet Items
| Particulars |
As on 31st Dec 14 | As on 30th Sep 14 | ||||||||||||||
| ($) | (Rs.) | ($) | (Rs.) | |||||||||||||
| Cash and cash equivalents and Other current investments |
456 | 28,736 | 456 | 28,737 | ||||||||||||
| Trade receivables |
638 | 40,224 | 598 | 37,722 | ||||||||||||
| Inventories |
461 | 29,038 | 446 | 28,123 | ||||||||||||
| Property, plant and equipment |
760 | 47,887 | 739 | 46,559 | ||||||||||||
| Goodwill and Other Intangible assets |
283 | 17,820 | 216 | 13,648 | ||||||||||||
| Loans and borrowings (current & non-current) |
629 | 39,656 | 616 | 38,854 | ||||||||||||
| Trade payables |
196 | 12,333 | 204 | 12,843 | ||||||||||||
| Equity |
1,667 | 105,107 | 1,570 | 99,004 | ||||||||||||
Appendix 2: Revenue Mix by Segment
| Particulars |
Q3 FY15 | Q3 FY14 | Growth % |
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| ($) | (Rs.) | % | ($) | (Rs.) | % | |||||||||||||||||||||||
| Global Generics |
503 | 31,692 | 82 | 466 | 29,396 | 83 | 8 | |||||||||||||||||||||
| North America |
16,819 | 53 | 16,223 | 55 | 4 | |||||||||||||||||||||||
| Europe |
1,947 | 6 | 1,862 | 6 | 5 | |||||||||||||||||||||||
| India |
4,328 | 14 | 3,913 | 13 | 11 | |||||||||||||||||||||||
| Russia & Other CIS |
4,766 | 15 | 5,296 | 18 | (10 | ) | ||||||||||||||||||||||
| Rest of World |
3,832 | 12 | 2,102 | 7 | 82 | |||||||||||||||||||||||
| PSAI |
97 | 6,112 | 16 | 80 | 5,062 | 14 | 21 | |||||||||||||||||||||
| North America |
1,360 | 22 | 780 | 15 | 74 | |||||||||||||||||||||||
| Europe |
2,055 | 34 | 1,948 | 38 | 5 | |||||||||||||||||||||||
| India |
948 | 16 | 945 | 19 | 0 | |||||||||||||||||||||||
| Rest of World |
1,749 | 29 | 1,388 | 27 | 26 | |||||||||||||||||||||||
| Proprietary Products & Others |
10 | 626 | 2 | 14 | 880 | 2 | (29 | ) | ||||||||||||||||||||
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| Total |
610 | 38,431 | 100 | 561 | 35,338 | 100 | 9 | |||||||||||||||||||||
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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
Ashish Girotra (USA) at ashishg@drreddys.com / +1 609-375-9805
Media:
Shilpi Lathia at shilpil@drreddys.com / +91-40-49002447
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: January 30, 2015 | Name: | Sandeep Poddar | ||||||
| Title: | Company Secretary | |||||||
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