Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q3 2016 Earnings Presentation
37 slides from Teva Pharmaceutical Industries's earnings presentation, Nov 15, 2016
Slide 1: Third Quarter 2016 Results
Teva Pharmaceutical Industries Third Quarter 2016 Results November 15, 2016 1
Slide 2: Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: The following discussion and analysis contains forward-looking statements, which are based on management’s current beliefs and expectations and involve a number of known and unknown risks and uncertainties that co
Slide 3: Erez Vigodman, President & CEO
Erez Vigodman President & CEO
Slide 4: Q3 2016 Non-GAAP P&L Highlights
Q3 2016 Non-GAAP P&L Highlights $ billion, except EPS Q3 2016 Q3 2015 Change Revenues 5.6 4.8 +15% Operating Income 1.8 1.6 +16% 32.2% 32.1% EBITDA 1.9 1.7 +16% Net Income 1.4 1.2 +17% EPS ($) 1.31 1.35 (3%) 1,044M shares 862M shares Cash flow from Operations 1.5 1.1 +34% Free cash flow 3.0 Free cas
Slide 5: Siggi Olafsson, President & CEO, Global Generic Medicines
Siggi Olafsson President & CEO, Global Generic Medicines
Slide 6: Q3 2016 - Generics Medicines Segment Highlights
Q3 2016 - Generics Medicines Segment Highlights $ billion, except EPS Q3 2016 Q3 2015 Change Revenues 2.9 2.2 +32% Gross profit 1.5 1.0 +46% Gross profit margin 50.5% 45.6% Segment profit 0.9 0.6 +50% Segment profitability 29.9% 26.2% Segment profit consists of gross profit, less S&M and R&D expense
Slide 7: Excellence in execution remains key focus
Excellence in execution remains key focus Operational network Smooth closing of rationalization plan is Actavis transaction being finalized with no business interruptions Synergy targets are Anda integration on track to be met plan finalized and embarked on R&D delivers record R&D network number of
Slide 8: Continuously expanding Teva's industry leading pipeline
Continuously expanding Teva’s industry leading pipeline US First-to-file performance in 2016 YTD* Global Pipeline – Files under review** 23 47 FTFs posted on FDA website (As of November 9, 2016) Region Product Teva’s FTF submissions account for more than 80% of the value opportunities 16 North Ameri
Slide 9: Eyal Desheh, EVP, Chief Financial Officer
Eyal Desheh EVP, Chief Financial Officer
Slide 10: Q3 2016 Results
Q3 2016 Results
Slide 11: Q3 2016 GAAP P&L Highlights
Q3 2016 GAAP P&L Highlights $ million, except EPS Q3 2016 Q3 2015 Change Revenues 5,563 4,823 +15% Operating Income 765 1,010 (24%) 13.8% 20.9% Net Income 412 103 +300% EPS ($) 0.35 0.12 +198% 984M shares 862M shares 11
Slide 12: Q3 2016 Non-GAAP P&L Highlights
Q3 2016 Non-GAAP P&L Highlights $ billion, except EPS Q3 2016 Q3 2015 Change Revenues 5.6 4.8 +15% Operating Income 1.8 1.6 +16% 32.2% 32.1% EBITDA 1.9 1.7 +16% Net Income 1.4 1.2 +17% EPS ($) 1.31 1.35 (3%) 1,044M shares 862M shares Cash flow from Operations 1.5 1.1 +34% Free cash flow excluding di
Slide 13: Cash Flow Trends
Cash Flow Trends $ million Cash Flow from 1.1 1.6 1.4 1.0 1.5 Operations 246 215 171 111 Asset Purchase, Net 167 Free Cash Flow* 1,369 1,205 1,246 982 796 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 * Free cash flow excludes proceeds from divestitures related to Actavis Generics of $1,724 million in Q3
Slide 14: Q3 2016 Non GAAP Adjustments
Q3 2016 Non GAAP Adjustments $ million Q3 2016 Description Legal settlements 533 Including FCPA charge of approximately $520M Amortization 429 Actavis ($237M), Teva ($192M) IPR&D and contingent consideration 286 Regeneron ($250M), Bendeka™ ($43M) Inventory step-up 152 Restructuring 115 Mainly relate
Slide 15: Liquidity Trends
Liquidity Trends $ billion 36.9 Debt 9.9 10.2 10.9 11.7 Equity 32.0 37.0 29.9 30.6 22.9 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Leverage 34% 25% 25% 25% 50% Debt/EBITDA 1.76 1.50 1.54 1.66 5.38 15
Slide 16: EBITDA
EBITDA $ billion 1.9 1.7 1.6 1.6 1.7 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Adjusted EBITDA is based on non-GAAP operating income, which excludes amortization and certain other items, and excluding depreciation expenses. 16
Slide 17: Quarterly Revenues
Quarterly Revenues $ million 943 -32 -105 -121 56 US 593 Ex US 349 5,563 4,823 Q3-15 Actavis* Teva Generics* Divestitures Specialty OTC, FX Q3-16 and Other * Including divestitures and revenues from manufacturing services related to divested products. All data, except FX, are net of the impact of fo
Slide 18: Quarterly Revenue Breakdown by Region
Quarterly Revenue Breakdown by Region $ million 5,563 4,823 1,290 (23%) ROW 890 (18%) Europe 1,410 (25%) US 1,199 (25%) 2,734 (57%) 2,863 (52%) Q3-15 Q3-16 18
Slide 19: Quarterly Revenue Breakdown by Business Line
Quarterly Revenue Breakdown by Business Line $ million 5,563 4,823 611 (11%) 443 (9%) OTC and Other 987 (18%) Specialty 1,093 (23%) 1,061 (19%) MS Specialty Generics 1,085 (22%) 2,904 (52%) 2,202 (46%) Q3-15 Q3-16 19
Slide 20: Quarterly Operating Profit
Quarterly Operating Profit $ million -118 54 308 1,794 1,550 Q3-15 Generics Specialty OTC, G&A, Q3-16 FX and other Operating Profit is presented on a non-GAAP basis. Segment and business line profit consists of gross profit, less S&M and R&D expenses related to the segment or business line, but excl
Slide 21: Quarterly Business Line Profit
Quarterly Business Line Profit $ million 2,098 1,858 134 (7%) OTC and Other 58 (3%) 211 (10%) Specialty 346 (19%) MS Specialty Generics 886 (42%) 876 (47%) 867 (41%) 578 (31%) Q3-15 Q3-16 Operating Profit is presented on a non-GAAP basis. Segment and business line profit consists of gross profit, le
Slide 22: Generics Segment Gross Profit and Profit Margin Evolution
Generics Segment Gross Profit and Profit* Margin Evolution Gross Profit 50.5% Margin 46.0% 46.7% 45.6% 44.8% Profit Margin 29.9% 26.2% 26.9% 26.8% 25.5% Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 * Segment profit consists of gross profit, less S&M and R&D expenses related to the segment. Segment profit does not
Slide 23: Copaxone revenues and US market shares
Copaxone® revenues and US market shares $ million / market share 1,085 960 1,006 1,141 1,061 1,200 35% 186 30% 1,000 207 187 185 200 25% 800 20% 600 15% 955 878 821 874 400 760 10% 200 5% 0 0% Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 US Ex-US US TRx MS* Copaxone® family US TRx MS* Copaxone® 40mg Market share d
Slide 24: Q3 YTD 2016 Results
Q3 YTD 2016 Results
Slide 25: YTD 2016 P&L Highlights
YTD 2016 P&L Highlights YTD 2016 YTD 2015 YTD 2016 YTD 2015 $ million, except EPS Change Change Non-GAAP Non-GAAP GAAP GAAP Revenues 15,411 14,771 +4% 15,411 14,771 +4% Operating Income 4,903 4,693 +4% 2,291 2,421 (5%) 31.8% 31.8% 14.9% 16.4% EBITDA 5,257 5,023 +5% 3,458 3,390 +2% Net Income 3,764 3
Slide 26: YTD 2016 Revenue Breakdown by Business Line
YTD 2016 Revenue Breakdown by Business Line $ million 15,411 14,771 1,258 (9%) 1,572 (10%) OTC and Other 3,161 (21%) 3,263 (21%) Specialty MS Specialty 3,063 (21%) 3,208 (21%) Generics 7,289 (49%) 7,368 (48%) YTD-15 YTD-16 26
Slide 27: YTD Business Line Profit
YTD Business Line Profit $ million 5,800 5,600 198 (3%) OTC and Other 164 (3%) 918 (16%) Specialty 958 (17%) MS Specialty Generics 2,372 (42%) 2,619 (45%) 2,106 (38%) 2,065 (36%) YTD-15 YTD-16 Segment and business line profit consists of gross profit, less S&M and R&D expenses related to the segment
Slide 28: Quarterly Dividend
Quarterly Dividend
Slide 29: Teva's Dividend History
Teva’s Dividend History Q3 2016 dividend per ordinary share of $0.34; dividend per MCPS of $17.50 450 $0.40 Total Dividend ($m) $ per Share 405 410 400 376 $0.35 350 324 $0.30 299 294 291 290 288 289 290 300 281 276 272 268 264 $0.25 250 230 237 214 $0.20 203 203 204 190 200 172 174 164 167 $0.15 15
Slide 30: Financial Outlook
Financial Outlook
Slide 31: FY 2016 Financial Outlook
FY 2016 Financial Outlook FY 2016 Q4 2016 Outlook Outlook Revenues 21.6-21.9 6.2-6.5 $ billions Non GAAP EPS 5.10-5.20 1.34-1.44 $ Weighted average number of shares, 1,020 1,077 in millions Cash flow from Operations 4.8-5.0 1.0-1.2 $ billions 31
Slide 32: Q&A
Q&A
Slide 33: Additional Information
Additional Information
Slide 34: Q3 2016 GAAP Income Data
Q3 2016 GAAP Income Data Q3-16 Q3-15 $ million, except EPS Q3-16 Q3-15 Change Margins Margins Revenues 5,563 4,823 +15% COGS 2,762 49.6% 2,052 42.5% +35% Gross Profit 2,801 50.4% 2,771 57.5% +1% R&D 663 11.9% 361 7.5% +84% S&M 940 16.9% 780 16.2% +21% G&A 310 5.6% 316 6.6% (2%) Legal settlements and
Slide 35: Q3 2016 Non GAAP Income Data
Q3 2016 Non GAAP Income Data Q3-16 Q3-15 $ million, except EPS Q3-16 Q3-15 Change Margins Margins Revenues 5,563 4,823 +15% COGS 2,170 39.0% 1,844 38.2% +18% Gross Profit 3,393 61.0% 2,979 61.8% +14% R&D 406 7.3% 356 7.4% +14% S&M 889 16.0% 766 15.9% +16% G&A 304 5.5% 307 6.4% (1%) Operating Income
Slide 36: YTD 2016 GAAP Income Data
YTD 2016 GAAP Income Data YTD-16 YTD-15 $ million, except EPS YTD-16 YTD-15 Change Margins Margins Revenues 15,411 14,771 +4% COGS 6,942 45.0% 6,262 42.4% +11% Gross Profit 8,469 55.0% 8,509 57.6% (0.5%) R&D 1,427 9.3% 1,079 7.3% +32% S&M 2,731 17.7% 2,562 17.3% +7% G&A 925 6.0% 948 6.4% (2%) Legal
Slide 37: YTD 2016 Non GAAP Income Data
YTD 2016 Non GAAP Income Data YTD-16 YTD-15 $ million, except EPS YTD-16 YTD-15 Change margins margins Revenues 15,411 14,771 +4% COGS 5,852 38.0% 5,610 38.0% +4% Gross Profit 9,559 62.0% 9,161 62.0% +4% R&D 1,151 7.5% 1,041 7.0% +11% S&M 2,608 16.9% 2,520 17.1% +3% G&A 897 5.8% 907 6.1% (1%) Operat
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