Astrazeneca Plc · LSE:AZN
Astrazeneca — Debt Investor Presentation (March 2018)
41 slides from Astrazeneca's debt investor presentation, Mar 23, 2018
Slide 1: Debt Investor Update
Debt Investor Update USA, 19-23 March 2018
Slide 2: Forward-looking statements
Forward-looking statements In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995, we are providing the following cautionary statement: This document contains certain forward-looking statements with respect to the operations, pe
Slide 3: Key Messages
Key Messages A New Phase of Growth - past the patent cliff An Attractive Pipeline - a busy period of launches and commercial execution Growth Platforms - underpinned by Emerging Markets and Oncology Financial Performance - supporting enhanced cash generation 3
Slide 4: Strategy Update
Astrazeneca? What science can do Strategy Update
Slide 5: Strategic priorities
Strategic priorities Achieve 1 Return 2 Be a great 3 scientific to growth place to work leadership 5
Slide 6: New Cambridge, UK R&D centre and HQ
New Cambridge, UK R&D centre and HQ Scientific collaborations key driver behind move 6
Slide 7: R&D productivity: Sustainable progress
R&D productivity: Sustainable progress A new AstraZeneca with science-based culture Scientific publications FDA BTDs granted in AZN’s Sustainable level of potential High-impact publications main therapy areas 2016-2017 new medicines in Phase II trials Medium-impact publications Other publications On
Slide 8: Focusing on three therapy areas
Focusing on three therapy areas Cardiovascular & Oncology Respiratory Metabolic Disease 8
Slide 9: Nine Pipeline Drivers to Consider
Nine Pipeline Drivers to Consider Regulatory ovarian cancer 2L lung cancer (US) - H1 2018 lung cancer (PACIFIC) (US) - H1 2018 decision (EU) - H1 2018 lung cancer (EU, JP) - H2 lung cancer (PACIFIC) (EU, JP) - H2 2018 breast cancer (JP) - 2018 H2 2018 Key Phase III ovarian cancer 1L - Imfinzi +/- tr
Slide 10: Nine Pipeline Drivers to Consider
Nine Pipeline Drivers to Consider roxadustat ZS-9 Regulatory submission - type-2 diabetes CVOT* submission - anaemia (US) - H2 2018 decision - hyperkalaemia (US, EU) decision or (DECLARE) - 2019 submission Key Phase III type-2 diabetes CVOT* (DECLARE) - H2 - - data readouts 2018 heart failure - 2019
Slide 11: Late-stage pipeline news flow in 2018 and 2019
Late-stage pipeline news flow in 2018 and 2019 Unlocking and realising the potential of new medicines H1 2018 H2 2018 2019 Regulatory decision Lynparza - ovarian cancer 2L (EU) Lynparza - breast cancer (JP) Tagrisso - lung cancer (US) Tagrisso - lung cancer (EU, JP) Imfinzi - lung cancer (PACIFIC) (
Slide 12: Product Sales: Improving momentum
Product Sales: Improving momentum US patent losses (Crestor/Nexium/Seroquel) Externalisation Other out-of-patent medicines Emerging Markets (outside Emerging Markets) (established medicines) Respiratory +6% Oncology FY 2017 Brilinta & Diabetes (+11% Q4 2017) FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 F
Slide 13: Growth across therapy areas and Emerging Markets
Growth across therapy areas and Emerging Markets Q4 2017 % Product FY 2017 % Product % change % change $m Sales $m Sales Product Sales 5,487 3 100 20,152 (5) 100 Oncology 1,120 19 20 4,024 19 20 New CVMD 1,024 21 19 3,567 9 18 Respiratory 1,334 8 24 4,706 (1) 23 Emerging Markets 1,630 9 30 6,149 8 3
Slide 14: Emerging Markets
Emerging Markets China growth accelerated Product Sales accelerated China growth was a highlight; Long-term target: Mid to high single-digit other EMs solid overall 9% 12% 12% • Mid to high single-digit growth in EMs continued Emerging Markets 8% Emerging Markets • Growth impacted by economic condit
Slide 15: Emerging Markets: Geographic platform for growth
Emerging Markets Geographic platform for growth China 15% of Europe Product Sales US 24% of Product Sales Japan 31% of 11% of Product Product Sales Sales Emerging Rest of Markets World (ex-China) Established 16% of (ex-Japan) Product Sales 4% of 2017 Product Sales as reported Product Sales 15
Slide 16: 2018: Focus on return to growth
2018: Focus on return to growth Momentum improved during 2017 Significantly-improved momentum Many opportunities to support growth in 2018 (FY 2010 - Q4 2017 Product Sales growth) Lynparza Tagrisso Imfinzi launched tablet launch in 1st line lung launch in Stage III lung launched in breast cancer can
Slide 17: On track to deliver long-term goals
On track to deliver long-term goals >$45bn in 2023 2012-2014 2015-2017 2018+ Building strong Delivering on return Sustainable delivery foundations to growth and growth Target is at constant exchange rates (2013) which is equivalent to ~$40bn at today’s exchange rates 17
Slide 18: Financial Update
AstraZeneca What science can do Financial Update
Slide 19: Reported Profit & Loss
Reported Profit & Loss FY 2017 % Total Q4 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 22,465 (2) 100 5,777 2 100 - Product Sales 20,152 (5) 90 5,487 3 95 - Externalisation Revenue 2,313 38 10 290 (12) 5 Gross Margin 79.6% (1) pp* - 77.6% (-) pp - R&D Expenses 5,757 (1) 26 1,55
Slide 20: Core Profit & Loss
Core Profit & Loss FY 2017 % Total Q4 2017 % Total % change % change $m Revenue $m Revenue Total Revenue 22,465 (2) 100 5,777 2 100 - Product Sales 20,152 (5) 90 5,487 3 95 - Externalisation Revenue 2,313 38 10 290 (12) 5 Gross Margin 81.2% (1) pp - 79.4% 1 pp - R&D Expenses 5,412 (3) 24 1,456 (4) 2
Slide 21: Externalisation Revenue: Ongoing income increasing
Externalisation Revenue Ongoing income increasing Increasing contribution from Ongoing Key observations $m Externalisation Revenue, incl. MRK 1,600 • Ongoing Externalisation Revenue of $821m in 2017 1,400 1,200 MRK collaboration benefit 1,000 800 • 2017: $1.85bn; ~$1.25bn in Externalisation Revenue
Slide 22: Continued progress and focus on cost discipline
Continued progress and focus on cost discipline Reduction in Core R&D costs: -3% FY 2017 Continued reduction in Core costs $m 1,500 1,000 • Core R&D costs 500 • FY 2017: Down by 3% 0 Investment concentrated in main therapy areas • FY 2018: Anticipated to be in the range of a low Oncology CVMD Respir
Slide 23: 2018 Guidance and unchanged capital-allocation priorities
2018 Guidance and unchanged capital-allocation priorities Unchanged capital-allocation priorities Product Sales • Investment in the business A low single-digit percentage increase • Progressive dividend policy • Strong, investment-grade credit rating Core EPS $3.30 to $3.50 • Immediately earnings-ac
Slide 24: Treasury Update
AstraZeneca What science can do Treasury Update Gy EF es (oe he & Mian OR AB TR
Slide 25: Improving operating cash flow more than offset by continued investment
Improving operating cash flow more than offset by continued investment in the pipeline and dividend payments 2017 Net Debt Waterfall 14 12 10 Net Debt ($bn) 8 6 4 2 - (2) Opening net Acerta EBITDA R&D Working Tax, Interest Gain/Disposal Other capex Dividends Closing net debt Payment before R&D capit
Slide 26: Net debt composition
Net debt composition 31-Dec-17 31-Dec-16 $m $m Gross debt (17,807) (16,808) Cash & cash equivalents 3,324 5,018 Other investments 1,300 898 Net derivative financial 504 235 instruments Net debt (12,679) (10,657) 26
Slide 27: Liquidity, debt and rating summary
Liquidity, debt and rating summary • Strong liquidity at 31 December 2017 ➢ Group cash and short term investments of $4.6 billion ➢ Undrawn $3 billion committed bank facilities (mature in 2022) • Access to diverse sources of funding through US and European debt programme, USCP programme Utilisation
Slide 28: Smooth debt maturity profile with 10 year average life
Smooth debt maturity profile with 10 year average life Debt Maturity Profile at 31 December 20171 3,000 Weighted average maturity: 10 years 2,500 2,000 1,500 $m 1,000 500 0 2018 2019 2020 2021 2022 2023 2024 2025 2027 2028 2031 2037 2042 2045 Overdraft, finance leases, derivatives Commercial Paper G
Slide 29: Key Messages
Key Messages A New Phase of Growth - past the patent cliff An Attractive Pipeline - a busy period of launches and commercial execution Growth Platforms - underpinned by Emerging Markets and Oncology Financial Performance - supporting enhanced cash generation 29
Slide 30: Debt Investor Update
Debt Investor Update March 2018
Slide 31: Appendix
AstraZeneca What science can do Appendix
Slide 32: Highlights continued: News flow continued at high speed
Highlights continued News flow continued at high speed in the period Pipeline developments Oncology • Faslodex breast cancer (combinations) Approval (US, EU) • Lynparza ovarian cancer 2L Approval (JP), Priority review (CN) breast cancer Approval (US) • Tagrisso lung cancer 1L (FLAURA) Regulatory sub
Slide 33: Respiratory: Symbicort sustained in a competitive market
Respiratory Symbicort sustained in a competitive market Steady Pulmicort growth Symbicort US and Europe Global focus: Emphasis on $m market share stable Symbicort’s competitive profile 1,500 5,000 -1% 8% US -8% 3% • Symbicort access maintained, but US 5-week NBRx 15% 33.0% market share 4,000 pricing
Slide 34: Fasenra: Our first respiratory biologic
Fasenra: Our first respiratory biologic 28-51% 1 Now approved in the US, the EU and Japan reduction in the annual asthma exacerbation rate versus placebo 116-159mL 1 significant improvement in lung function as measured by forced expiratory volume in one second (FEV1) versus placebo 75% 1 reduction i
Slide 35: New CVMD: Brilinta and Farxiga each reached >$1bn milestone
New CVMD Brilinta and Farxiga each reached >$1bn milestone Brilinta: Blockbuster Diabetes: Farxiga blockbuster Commercial focus maintained $m US NBRx continued to grow $m Global leadership ongoing on the two largest medicines 2% 800 20% 2,500 300 1,000 Brilinta +29% 2,000 -8% 21% 600 2% -1% • Sustai
Slide 36: Japan
Japan Tagrisso supported the sustained growth; Crestor offset Growth ongoing Key medicines remained Tagrisso: Back to growth $m +2% Q4; +4% FY volume-share leaders $m after Ryotanki1 lift in Q2 600 2,400 • Symbicort In-market growth; sales reduced by -11% 0% tough comparison and partner buying 70 2,
Slide 37: Oncology: Growth being delivered
Oncology Growth being delivered Oncology Product Sales $m New medicines boosting growth • Total Oncology +19% 1,200 • 20% of total Product Sales 1,000 • Faslodex approaching $1bn 800 • Six new medicines 2014-2020, with four 600 delivered 400 • Lynparza: Growth accelerating 200 • Tagrisso: Success in
Slide 38: Lynparza
Lynparza The leading PARP inhibitor with revitalised US growth Continued strong growth Strong US sales momentum MRK collaboration update $m +58% Q4; +35% FY Europe awaiting new tablet • US +11%, but +74% in Q4 • Continued integration of both Continued strong growth; development and commercial 100 la
Slide 39: Tagrisso and Imfinzi
Tagrisso and Imfinzi Q4: Accelerating growth Tagrisso Imfinzi $m 68 approvals; 16 awaited 350 • US +59% • Product sales $19m; $18m in Q4 Higher testing rates of ~70% 300 underpinned continued growth; • Current approvals preparing for 1st-line launch 2nd-line bladder cancer: US (3rd 250 in the market
Slide 40: Prudent Treasury Risk Management Policies
Prudent Treasury Risk Management Policies The Company operates with a centralised Treasury structure so that key Treasury risks are managed at a Group level. Investment policy • Security and liquidity • Financial counterparty limits Foreign Exchange Policy • Foreign Exchange exposures managed centra
Slide 41: Use of AstraZeneca webcast, conference call and presentation slides
Use of AstraZeneca webcast, conference call and presentation slides The AstraZeneca webcast, conference call and presentation slides (together the ‘AstraZeneca Materials’) are for your personal, non- commercial use only. You may not copy, reproduce, republish, post, broadcast, transmit, make availab
AstraZeneca — Debt Investor Presentation (March 2018) on 6ix