Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — FY2015 Earnings Presentation
43 slides from Teva Pharmaceutical Industries's earnings presentation, Feb 11, 2016
Slide 1: Q4 and Full Year 2015 Results
Q4 and Full Year 2015 Results - February 11th 2016 -
Slide 2: Teva's Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995
2 Teva's Safe Harbor Statement under the U. S. Private Securities 2 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 uncertain
Slide 3: Erez Vigodman, President & CEO
3 3 Erez Vigodman, President & CEO
Slide 4: 2015: A Year of Exceptional Strategic, Operational and Financial Performance
4 4 2015: A Year of Exceptional Strategic, Operational and Financial Performance Strong Financial Results Solid Operational Execution Building A New Teva Record Operating Income Excellent execution in Generics Strategic BD: Actavis, Auspex, and EPS with significant improvement in Rimsa, Teva-Takeda
Slide 5: Strong Financial Performance in 2015
5 Strong Financial Performance in 2015 5 FY 2015 FY 2014* Nominal Growth Real Growth Revenue 19.7 20.3 -3% 4% $b Operating Income 6.2 5.8 6% 9% $b Net Income 4.7 4.4 6% $b EPS 5.46**/5.42 5.14 6% $ EBITDA 6.6 6.3 6% $b Oper. Cash Flow 5.5 5.1 8% $b Free Cash Flow 4.9 4.3 15% $b • *Includes adjustmen
Slide 6: Continued Strong Delivery Over The Last 2 Years
6 Continued Strong Delivery Over The Last 2 Years 6 Operating Cash Flow from Net Revenues EBITDA EPS Free Cash Flow income Operations $billions $billions $billions $ $billions $billions 21.0* 6.6 5.46** 20.3 20.3 6.2 5.14 5.5 6.3 19.7 5.8 5.01 5.1 5.7 4.9 5.2 4.3 3.2 2.3 2015 2015 2015 2015 2015 201
Slide 7: Delivering on Our Key Priorities for Business Development in 2015
7 Delivering on Our Key Priorities for Business Development in 2015 7 2014 Transaction Targeting Attractive Growth a Unique Pipeline Assets/ Markets Space In Portfolios the Industry + BV in Japan Complex/Hard Unique Health to Produce Solutions, In-Market or Assets or Technologies, Close to Technolog
Slide 8: Building A Promising Specialty Pipeline
8 Building A Promising Specialty Pipeline 8 MS, Movement Migraine and Disorders and Headache Neurodegeneration Pain Respiratory Migraine Novel abuse Spiromax Next generation /MDPI portfolio Solutions TV-45070 deterrent Sensors and connectivity SD-809 technologies delivery TV-48125 technologies (HD,
Slide 9: We Are Building a New Teva
9 We Are Building a New Teva 9 Continue the transformation of our business model Diversified net revenues and profit Promising specialty streams pipeline Significantly enhanced financial Solidified foundation profile unlocking value from existing assets
Slide 10: Strong Growth Prospects
10 Strong Growth Prospects 10 Estimated 2015-2018 CAGR (Including the effect of deals announced in 2015)* Sales 12.5% EBITDA 20% Cash Flow From Operations 20% Free Cash 20% Flow * CAGR is calculated using 2015 Teva standalone and 2018 pro-forma financials for combined company including synergies EBI
Slide 11: Near Term Key Value Drivers
11 Near Term Key Value Drivers 11 Integrations & Commercial Launches* Submissions Key Clinical Selective Business Synergies Milestones Development Actavis Generics deal Specialty Fluticasone salmeterol PIII: SD-809 in tardive Specialty closing and integration Vantrela® ER abuse deterrent R
Slide 12: Siggi Olafsson, President & CEO, Global Generic Medicines
12 12 Siggi Olafsson, President & CEO, Global Generic Medicines
Slide 13: Generics Continue to Show Profitability Improvement
13 Generics Continue to Show Profitability Improvement… 3000 40% Generics Segment Profit* ($M) and Margin (%) $2,682 2500 35% $2,166 2000 28% 30% $1,680 1500 25% 22% 1000 20% 17% 500 15% 0 10% Revenue ($M): $9,902 $9,814 $9,546 2013 2014 2015 * Segment profit consists of gross profit, less S&M and R
Slide 14: Pulling All Levers to Improve Performance
14 Pulling All Levers to Improve Performance 14 New Launches Portfolio mix COGS Geographic Sales & Marketing improvement presence optimization Launched 332 generic Regularly review, trim Network optimization, Terminated business S&M dropped from $1.6B products and 117 OTC and optimize the efficient
Slide 15: Still on Track to Close Actavis Generic Deal
15 Still on Track to Close Actavis Generic Deal 15 & Generics Antitrust review on-going Potential buyers for divested assets have been identified Integration plans are in place
Slide 16: US Generic Prices Continue Slight Downward Trend
16 US Generic Prices Continue Slight Downward Trend 16 Do not see the inflationary pricing discussed in the media Also do not see the sharp drop in prices other competitors have seen recently Mid-single digit decrease in 2015 Expect 2016 to maintain the current trend
Slide 17: Eyal Desheh, EVP, Chief Financial Officer
17 17 Eyal Desheh, EVP, Chief Financial Officer
Slide 18: Fourth Quarter 2015 Results
Fourth Quarter 2015 Results
Slide 19: Q4 2015 – a Solid Quarter
19 Q4 2015 – a Solid Quarter 19 Q4 2015 Q4 2014* Change Revenues 4,881 5,168 (6%) $m Operating Income 1,481 1,520 (3%) $m (30.3%) (29.4%) EPS $ 1.28 EPS adjusted to exclude Dec 15 equity offerings $ 1.32 1.33 (1%) Cash flow from Operations 1,615 1,752 (8%) $m EBITDA 1,597 1,632 (2%) $m *Includes adj
Slide 20: Foreign Exchange Impact
20 Foreign Exchange Impact 20 Q4 2015 Q4 2014 Change ($m) Fx Effect* ($m) Real Change Revenues $m 4,881 5,168 (287) (259) (28) Operating income 1,481 1,520 (39) (44) +5 $m * Includes profits from certain hedging transactions Operating Income is presented on a non-GAAP basis
Slide 21: Cash Flow Trends
21 Cash Flow Trends 21 $ million Cash From 1,752/1,952 1,354 1,480 1,093/2,063 1,615 Operations 200 269 970 Legal Settlements 246 144 141 Asset Purchase, Net 111 Free Cash Flow* 1,483 1,369 1,213 1,336 982 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 * Legal settlements refers to payments related to the
Slide 22: Liquidity Trends
22 Liquidity Trends 22 Gross debt decreased by $1.7B from Q3 15; Net debt decreased by $8.1B Debt 10.0 ($b) 10.3 12.5 11.7 11.0 Equity 29.9 ($b) 23.4 22.7 23.1 22.9 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Leverage 31% 33% 35% 34% 25% Debt/EBITDA 1.65 1.72 1.89 1.75 1.51
Slide 23: Quarterly Revenue Breakdown by Region
23 Quarterly Revenue Breakdown by Region 23 $ million 5,168 4,881 973 – 19% 1,015 – 21% 1, 387 – 27% ROW 1,224 – 25% Europe US 2,808 – 54% 2,642 – 54% Q4 14 Q4 15
Slide 24: Quarterly Revenue Breakdown by Segment
24 Quarterly Revenue Breakdown by Segment 24 $ million 5,168 4,881 456 - 8% 510 - 10% 1,122 - 22% 1,154 - 24% OTC & Other 1,121 - 22% 960 - 20% Specialty MS Specialty Generics 2,469 - 48% 2,257 - 46% Q4 14 Q4 15
Slide 25: Quarterly Profit Breakdown by Segment
25 Quarterly Profit* Breakdown by Segment 25 $ million 1,830 1,761 61 – 3% 154 – 9% 355 – 19% 318 – 18% OTC & Other 845 – 47% 713 – 40% Specialty MS Specialty Generics 569 – 31% 576 – 33% Q4 14 Q4 15 * Segment profit consists of gross profit, less S&M and R&D expenses related to the segment. Segment
Slide 26: Copaxone Revenue Evolution
26 Copaxone® Revenue Evolution 26 US demand is stable despite generic launch; Copaxone® 40mg increases share 1,200 1,107 1,121 924 1,054 1,085 960 35% 1,000 30% 307 286 184 207 192 200 25% 800 20% 600 15% 835 870 878 400 800 760 732 10% 200 5% 0 0% Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 $ million US sa
Slide 27: FY 2015
FY 2015
Slide 28: FY 2015 – Strong Results
28 FY 2015 – Strong Results 28 2015 2014* Change Revenues 19,652 20,272 (3%) $m Net Income 4,696 4,413 +6% $ EPS 5.42 $ EPS adjusted to exclude Dec 15 equity offerings 5.46 5.14 +6% $ Free Cash Flow 4,900 4,256 +15% $m EBITDA 6,621 6,262 +6% $m *Includes adjustments for equity compensation Operating
Slide 29: FY 2015 Foreign Exchange Impact
29 FY 2015 Foreign Exchange Impact 29 2015 2014 Change ($m) Fx Effect* ($m) Real Change Revenues 19,652 20,272 (620) (1,338) +718 $m Operating income 6,174 5,810 364 (163) +527 $m *Includes profits from certain hedging transactions
Slide 30: Teva's Annual EBITDA
30 Teva’s Annual EBITDA 30 $ billion 6.6 6.3 5.7 2013 2014 2015 EBITDA is based on non-GAAP operating income plus non-GAAP depreciation.
Slide 31: FY 2015 Profit Breakdown by Segment
31 FY 2015 Profit* Breakdown by Segment 31 $ million 6,987 7,361 318 – 4% 226 - 3% 1,276 - 17% 1,412 - 20% OTC & Other 3,085 - 42% Specialty 3,183 - 46% MS Specialty Generics 2,166 - 31% 2,682 - 37% 2014 2015 * Segment profit consists of gross profit, less S&M and R&D expenses related to the segment
Slide 32: Continuous Improvement of Our Generics Business
32 Continuous Improvement of Our Generics Business 32 Generics Segment Gross Profit and Profit* Margin Evolution 47.1% 43.3% 41.2% 28.1% 22.1% 17.0% FY 2013 FY2014 FY2015 Profit Margin* Gross Profit Margin * Segment profit consists of gross profit, less S&M and R&D expenses related to the segment. S
Slide 33: Quarterly Dividend
Quarterly Dividend
Slide 34: Teva's Dividend Payments
34 Teva’s Dividend Payments 34 Q4 2015 dividend per ordinary share of $0.34 350 $0.40 300 $0.35 $0.30 250 $0.25 200 $0.20 327 150 291 299 294 290 288 289 290 281 268 264 276 272 $0.15 230 237 100 203 203 204 190 214 164 167 172 174 $0.10 50 $0.05 0 $0.00 Total Dividend ($m) $ per Share Total dividen
Slide 35: Financial Outlook
Financial Outlook
Slide 36: Guidance Background
36 Guidance Background 36 Pending the closing of the Actavis Gx acquisition, we are providing revenue and non-GAAP EPS guidance for the first quarter of 2016. Full year 2016 guidance will be provided shortly after the Actavis Gx closing. We continue to work toward satisfying all conditions in
Slide 37: Q1 2016 Financial Outlook Highlights
37 Q1 2016 Financial Outlook Highlights 37 Q1 2016 Weighed average number of shares, Outlook in millions Revenues 4.7-4.9 $ billions Non GAAP EPS 1.16-1.20 978 $ Non GAAP EPS adjusted to exclude Dec 15 equity offerings 1.32-1.36 863 $ Cash flow from Operations 1.2-1.3 $ billions
Slide 38: Q&A
Q&A
Slide 39: Additional Information
Additional Information
Slide 40: FY 2015 Non-GAAP Income Data
40 FY 2015 Non-GAAP Income Data 40 $ million 2015 2014 Except EPS 2015 Margins 2014 Margins Change Revenues 19,652 20,272 (3%) COGS 7,437 37.8% 8,123 40.1% (8%) Gross Profit 12,215 62.2% 12,149 59.9% +1% R&D 1,436 7.3% 1,395 6.9% +3% S&M 3,418 17.4% 3,767 18.6% (9%) G&A 1,187 6.0% 1,177 5.8% +1% Ope
Slide 41: FY 2015 GAAP Income Data
41 FY 2015 GAAP Income Data 41 $ million 2015 2014 except EPS 2015 Margins 2014 Margins Change Revenues 19,652 20,272 (3%) COGS 8,296 42.2% 9,216 45.5% (10%) Gross Profit 11,356 57.8% 11,056 54.5% +3% R&D 1,525 7.8% 1,488 7.3% +2% S&M 3,478 17.7% 3,861 19.0% (10%) G&A 1,239 6.3% 1,217 6.0% +2% Legal
Slide 42: Q4 2015 Non-GAAP Income Data
42 Q4 2015 Non-GAAP Income Data 42 $ million Q4 15 Q4 14 Except EPS Q4 2015 margins Q4 2014 margins Change Revenues 4,881 5,168 (6%) COGS 1,827 37.4% 2,001 38.7% (9%) Gross Profit 3,054 62.6% 3,167 61.3% (4%) R&D 395 8.1% 347 6.7% +14% S&M 898 18.4% 990 19.2% (9%) G&A 280 5.7% 310 6.0% (10%) Operati
Slide 43: Q4 2015 GAAP Income Data
43 Q4 2015 GAAP Income Data 43 $ million Q4 2015 Q4 2014 Except EPS Q4-15 Margins Q4-14 Margins Change Revenues 4,881 5,168 (6%) COGS 2,034 41.7% 2,279 44.1% (11%) Gross Profit 2,847 58.3% 2,889 55.9% (1%) R&D 446 9.1% 379 7.3% +18% S&M 916 18.8% 1,006 19.5% (9%) G&A 291 6.0% 320 6.2% (9%) Legal set
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