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Sequent Scientific Ltd.

BSE: 512529 Sector: Health care
NSE: SEQUENT ISIN Code: INE807F01027
BSE 09:57 | 05 Jun 85.15 -0.70
(-0.82%)
OPEN

85.40

HIGH

85.40

LOW

85.15

NSE 09:54 | 05 Jun 85.35 -0.20
(-0.23%)
OPEN

86.00

HIGH

86.20

LOW

85.10

OPEN 85.40
PREVIOUS CLOSE 85.85
VOLUME 250
52-Week high 99.35
52-Week low 52.00
P/E 99.01
Mkt Cap.(Rs cr) 2,115
Buy Price 85.25
Buy Qty 229.00
Sell Price 85.40
Sell Qty 625.00
OPEN 85.40
CLOSE 85.85
VOLUME 250
52-Week high 99.35
52-Week low 52.00
P/E 99.01
Mkt Cap.(Rs cr) 2,115
Buy Price 85.25
Buy Qty 229.00
Sell Price 85.40
Sell Qty 625.00

Sequent Scientific Ltd. (SEQUENT) - Chairman Speech

Company chairman speech

Dear Shareholders

It gives me great pleasure to present to you SeQuent's Annual Report for FY19 ourfirst full year of operations as a pure-play animal health company foundations of whichwere laid over the last four years. The past year gave us an insight into our distinctivebusiness model and the compounding effect of what unbridled 'Ambition' can deliver whensupported by powerful 'Execution'. With an annual run rate of US$ 150 million and apresence in 100+ countries we have emerged as the largest and the first fully integratedglobal animal health company from India.

We began this journey with a vision of creating a world-class animal health companyand today this ambition is fulfilled as we ended the financial year with a performancecommensurate with our commitment. It is a validation of our unique business model as alsoour execution capabilities that we have achieved this in a challenging environment ofmultiple headwinds including supply chain challenges in the Eurozone Brexit uncertaintyas well as Turkey which suffered both regulatory and currency headwinds for a large partof the year. This has been a year of strong performance wherein our revenue and EBITDAgrew by 22% and 52% respectively with a 250 bps margin improvement and a 5.6x growth inPAT fuelled by execution excellence across both APIs and formulations. We havesignificantly scaled up our capabilities during the financial year with the addition of aninjectable manufacturing facility in EU expanding our formulations R&D capabilitiesand commercialisation of two products in the US from our API facility in Vizag. During thefinancial year we made five US filings and three CEP filings in an endeavour to scale upthe value curve following our global strategy. Our acquisition of EU GMP approved APIfacility at Mahad Maharashtra complements our facilities at Vizag and Tarapur providingus with a comprehensive infrastructure to significantly scale this business in the mediumterm.

One of the key highlights of this year was the acquisition of Bremer in Germany with aclear focus on shaping our injectables strategy for regulated markets. Bremer is a nicheveterinary health company with a focus on cattle and swine segments. Bremer has aportfolio of over 400 registered products across Europe Far East MENA Russia and Africaoperating in vitamins antibiotics and hormones. This acquisition not only consolidatesour position in the European market but also completes our extensive manufacturingfootprint in EU across injectables orals solids powder range with front-end presence intop 7 of the 10 EU markets.

In my opinion the Bremer acquisition is a culmination of a journey that started in2014 when we outlined our vision to create a global animal health company from Indiathrough a judicious mix of organic growth and inorganic acquisitions. It was also prudentof our Company to let go of businesses which were not in line with our stated goals. TheSeQuent that you see today has metamorphosed from an India-centric API-led firm servingthe unregulated markets to a global animal health company underpinned by a verticallyintegrated strategy focus on formulations and worldwide footprint. This transformationhas been catalysed by our strategic investments in building our Vizag API facility as wellas the inorganic acquisitions across the globe complemented by the successful integrationof these acquisitions. The stage is now set for our Company to focus on superior financialoutcomes through relentless execution and I believe that the same is already visible.

On the formulations front our business has shown tremendous growth on the back ofperformance across all geographies. Our growth was driven by improved market shares acrosskey products as also new product introductions. The growth must be seen against thebackdrop of headwinds in Turkey where we not only had to grapple with a new measure tocontrol abuse of anti-microbials which impacted sales but also had to take hits due todepreciation in the local currency. I am happy to state that our Turkish facility alsoreceived EU GMP during the current year bolstering our prospects in the regulated marketsin the EU region.

The pipeline in the formulation segment looks robust with over 35 products at variousstages of development. This has been the toughest part of our journey given the uniquechallenges of our industry - absence of IQVIA data for product selection as also relevanthuman capital in this space. Our target is to make over 20 new filings in the US marketsover the next three years. Strategically we have significantly bolstered our investmentsin product development programme in formulations which was launched two years ago and weare confident that this will be a key growth driver going forward. We have establishedstrong R&D capabilities in India and Spain which complements our manufacturingfootprints in India Spain Turkey Germany and Brazil. To maintain the R&D momentumwe have not only expanded the R&D team in India but also developed capabilities toexecute ecotoxicity and bioequivalence studies for animals in India.

Furthering our ambition to be amongst the global top ten companies in the coming yearswe have strengthened our leadership team by inducting a senior resource for our globalinjectable business. We should be completing our leadership hiring for the US marketshortly. We believe a capable and robust management bandwidth is one of the keydeterminants of our ability to deliver strong performance as committed and pride ourselveswith the global management team that we have built.

I want to thank our employees who have been a key factor contributing to overall growthand hope that their contribution will take our Company to the next orbit. I also wish tothank our investors who have stood by us like a rock while we built our Company brick bybrick to what you see today. I would be failing in my duty if I did not thank our valuedcustomers who have been the raison d'etre.

With a differentiated strategy favourable environment and building blocks aligned weare well on course to create sustainable value for our stakeholders. The performance infiscal 2019 and our visibility for the near term give us the confidence to emerge as aglobal player in the animal health space in the medium term. We believe that relentlessExecution is the key driver and we are confident that we will achieve the ambitioustargets we have defined for the next few years.

Warm regards

Manish