Teva Pharmaceutical Industries Limited · TASE:TEVA

Teva Pharmaceutical Industries — Q1 2017 Earnings Presentation

30 slides from Teva Pharmaceutical Industries's earnings presentation, May 11, 2017

  1. Slide 1: First Quarter 2017 Results

    Teva Pharmaceutical Industries Ltd. First Quarter 2017 Results May 11, 2017

  2. Slide 2: Cautionary Note Regarding Forward-Looking Statements

    Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainti

  3. Slide 3: Dr. Sol J. Barer, Chairman of the Board

    Dr. Sol J. Barer Chairman of the Board

  4. Slide 4: Dr. Yitzhak Peterburg, Interim President & CEO

    Dr. Yitzhak Peterburg Interim President & CEO

  5. Slide 5: Eyal Desheh, EVP, Chief Financial Officer

    Eyal Desheh EVP, Chief Financial Officer

  6. Slide 6: Q1 2017 P&L Highlights

    Q1 2017 P&L Highlights $ millions, except EPS Q1 2017 Q1 2016 Q1 2017 Q1 2016 GAAP Non-GAAP Revenues 5,630 4,810 5,630 4,810 Operating income 895 1,165 1,621 1,526 15.9% 24.2% 28.8% 31.7% Net income 645 636 1,144 1,172 attributable to Teva EPS ($) 0.57 0.62 1.06 1.20 1,017M shares 920M shares 1,017M

  7. Slide 7: Q1 2017 Non-GAAP P&L Highlights

    Q1 2017 Non-GAAP P&L Highlights $ billions, except EPS Q1 2017 Q1 2016 Change Revenues 5.6 4.8 +17% Operating income 1.6 1.5 +6% 28.8% 31.7% EBITDA 1.8 1.6 +9% Net income 1.1 1.2 (2%) EPS ($) 1.06 1.20 (11%) 1,017M shares 979M shares Cash flow from operations 0.5 1.4 (66%) Free cash flow 0.3* 1.2 (7

  8. Slide 8: Q1 2017 Non-GAAP Adjustments

    Q1 2017 Non-GAAP Adjustments $ millions Q1 2017 Details Amortization 320 Related to synergies and additional Restructuring 130 efficiency measures Inventory step-up 64 Actavis Capital loss from currency translation 52 Related to UK divested business Acquisition and related expenses 44 including cont

  9. Slide 9: Q1 2017 Foreign Exchange & Venezuela Impact

    Q1 2017 Foreign Exchange & Venezuela Impact $ millions Q1 2017 Q1 2016 Diff FX Effect Venezuela Revenues 5,630 4,810 820 (37) (217) Operating income 895 1,165 (270) (7) (71) GAAP Operating income 1,621 1,526 95 (14) (67) Non-GAAP In light of the economic conditions in Venezuela, we exclude the chang

  10. Slide 10: Quarterly EBITDA

    Quarterly EBITDA $ billions 2.1 1.9 1.7 1.8 1.6 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 EBITDA is based on non-GAAP operating income (which excludes amortization and certain other items) and excludes 10 depreciation expenses.

  11. Slide 11: Cash Flow

    Cash Flow $ millions Cash flow from 1.4 1.0 1.5 1.4 0.5 Operations ($ billions) 215 171 319 Asset Purchase, Net 167 Free Cash Flow* 1,246 1,205 1,106 796 198 272 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 * Proceeds from divestitures related to Actavis Generics were $1.7 billion in Q3 2017 and $0.7 bil

  12. Slide 12: Liquidity

    Liquidity $ billions 36.9 35.8 34.6 Debt 10.2 10.9 Equity 32.0 37.0 35.0 35.7 30.6 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Leverage 25% 25% 50% 51% 49% Debt/EBITDA 1.54 1.66 5.38 4.87 4.63 Net Debt/EBITDA 0.63 0.58 5.13 4.72 4.49 EBITDA is based on non-GAAP operating income (which excludes amortizat

  13. Slide 13: Quarterly Revenues

    Quarterly Revenues $ millions 349 -254 -30 -81 431 404 5,630 4,810 Q1 - 16 US Gx EU & RoW Gx MS Specialty Specialty Other Fx & VZ Q1 - 17 All data, except Fx and VZ nominal, are net of the impact of foreign exchange fluctuations. 13

  14. Slide 14: Quarterly Revenue Breakdown by Region

    Quarterly Revenue Breakdown by Region $ millions 5,630 ROW Europe 4,810 933 (17%) US 918 (19%) 1,504 (27%) 1,235 (26%) 3,193 (56%) 2,657 (55%) Q1-16 Q1-17 14

  15. Slide 15: Quarterly Revenue Breakdown by Business Line

    Quarterly Revenue Breakdown by Business Line $ millions 5,630 Other 552 (10%) Specialty 4,810 MS Specialty 200 (4%) 1,050 (19%) Generics 1,146 (24%) 970 (17%) 1,006 (21%) 3,058 (54%) 2,458 (51%) Q1-16 Q1-17 15

  16. Slide 16: Quarterly Non-GAAP Operating Profit

    Quarterly Non-GAAP Operating Profit $ millions -122 208 8 1,526 1,621 Q1-16 Generics Specialty G&A, FX and other Q1-17 Segment profit consists of gross profit, less S&M and R&D expenses related to the segment, but excludes G&A expenses, amortization, and certain other items. 16

  17. Slide 17: Quarterly Business Line Profit

    Quarterly Business Line Profit $ millions 1,820 1,843 -4 (0%) 26 (2%) 296 (16%) Other 370 (20%) Specialty MS Specialty Generics 742 (40%) 805 (44%) 779 (42%) 649 (36%) Q1-16 Q1-17 Profit is presented on a non-GAAP basis. Segment and business line profit consists of gross profit, less S&M and R&D exp

  18. Slide 18: Generics Segment Gross Profit and Profit Margin

    Generics Segment Gross Profit and Profit Margin 48.8% 49.4% Gross Profit 45.7% 44.9% 44.8% Margin 30.1% 28.9% 26.4% 25.5% Profit Margin 24.0% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Segment profit consists of gross profit, less S&M and R&D expenses related to the segment, but excludes G&A expenses, amortizati

  19. Slide 19: Copaxone revenues and US market shares

    Copaxone® revenues and US market shares $ millions / % market share 1,200 1,006 1,141 1,061 1,015 970 35% 186 30% 1,000 187 185 186 188 25% 800 20% 600 15% 955 400 821 874 829 782 10% 200 5% 0 0% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 US Ex-US US TRx MS* Copaxone® family US TRx MS* Copaxone® 40mg Market shar

  20. Slide 20: Quarterly Revenues compared to Q4 2016

    Quarterly Revenues compared to Q4 2016 $ million 4 -238 -179 -449 6,492 5,630 Q4 - 16 US Gx EU & RoW Gx Specialty Other, FX and VZ Q1 - 17 20

  21. Slide 21: Quarterly Non-GAAP Operating Income compared to Q4 2016

    Quarterly Non-GAAP Operating Income compared to Q4 2016 -323 $ million (-17%) 81 68 -348 140 -265 1,944 1,621 Q4-16 Gross Profit S&M R&D G&A VZ & FX Q1-17 21

  22. Slide 22: Balance Sheet

    Balance Sheet $ billions Mar 31, 2017 Dec 31, 2016 Diff Cash and Cash Equivalents 0.9 1.0 -0.1 Other Financial assets 0.3 0.9 -0.6 AR Trade 7.3 7.5 -0.2 Pre-paid Expenses and Other Current Assets 1.7 2.8 -1.1 Inventory 5.0 5.0 0.0 Fixed Assets 8.2 8.1 0.1 Goodwill 45.0 44.4 0.6 Intangible Assets 21.

  23. Slide 23: Non-GAAP Number of Shares

    Non-GAAP Number of Shares Million shares, fully diluted 4 59 100 979 1,017 Q1 2016 Actavis Closing Others MCPS Q1 2017 23

  24. Slide 24: Quarterly Dividend

    Quarterly Dividend

  25. Slide 25: Teva's Dividend History

    Teva’s Dividend History Q1 2017 dividend per ordinary share / ADS of $0.34; dividend per MCPS of $17.50 450 $0.40 405 410 411 411 400 367 376 $0.35 350 $0.30 291 299 294 290 288 287 290 300 281 268 264 276 272 $0.25 250 230 237 214 $0.20 203 203 204 190 200 174 164 167 172 $0.15 150 $0.10 100 50 $0.

  26. Slide 26: Q&A

    Q&A

  27. Slide 27: Additional Information

    Additional Information

  28. Slide 28: Q1 2017 GAAP Income Data

    Q1 2017 GAAP Income Data Q1-17 Q1-16 $ millions, except EPS Q1-17 Q1-16 Diff Margins Margins Revenues 5,630 4,810 +17% COGS 2,811 49.9% 2,019 42.0% +39% Gross profit 2,819 50.1% 2,791 58.0% +1% R&D 457 8.1% 389 8.1% +17% S&M 971 17.2% 839 17.4% +16% G&A 236 4.2% 304 6.3% (22%) Impairments, restructu

  29. Slide 29: Q1 2017 Non-GAAP Income Data

    Q1 2017 Non-GAAP Income Data Q1-17 Q1-16 $ millions, except EPS Q1-17 Q1-16 Diff Margins Margins Revenues 5,630 4,810 +17% COGS 2,434 43.2% 1,794 37.3% +36% Gross profit 3,196 56.8% 3,016 62.7% +6% R&D 446 7.9% 375 7.8% +19% S&M 907 16.1% 821 17.1% +10% G&A 222 3.9% 294 6.1% (24%) Operating income 1

  30. Slide 30: Q1 2017 Non-GAAP Income Data

    Q1 2017 Non-GAAP Income Data Q1-17 Q1-16 $ millions, except EPS Q1-17 Q1-16 Diff Margins Margins Revenues 5,630 4,810 +17% COGS 2,434 43.2% 1,794 37.3% +36% Gross profit 3,196 56.8% 3,016 62.7% +6% R&D 446 7.9% 375 7.8% +19% S&M 907 16.1% 821 17.1% +10% G&A 222 3.9% 294 6.1% (24%) Operating income 1

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