Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q4 2022 Earnings Presentation
46 slides from Teva Pharmaceutical Industries's earnings presentation, Feb 8, 2023
Slide 1: Fourth Quarter and Full Year 2022 Results
Teva Pharmaceutical Industries Ltd. Fourth Quarter and Full Year 2022 Results February 8, 2023
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains forw ard-looking statements w ithin the meaning of the Private Securities Litigation Reform Act of 1995, w hich are based on management’s current beliefs and expectations and are subject to substantial risks and uncertai
Slide 3: Richard Francis
Richard Francis President and Chief Executive Officer
Slide 4: 2022 Highlights
2022 Highlights Financial Business − Revenues of $14.9 billion − AUSTEDO® – reached $971 million globally, up 20% in the U.S. − Adjusted EBITDA of $4.6 billion − AJOVY® – continued revenue growth in the U.S. and Europe − GAAP diluted loss per share of $2.12; non-GAAP diluted − Generics – EPS of $2.5
Slide 5: Revenue Development
Revenue Development $ millions 4,100 3,982 3,910 3,887 3,884 302 3,786 289 3,661 3,595 298 262 272 257 527 275 241 490 485 482 530 454 492 475 1,214 1,268 1,129 1,184 1,220 1,171 1,156 1,069 1,989 1,943 1,875 2,003 1,904 2,002 1,737 1,809 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 20
Slide 6: Spotlight on Our Business in Europe
Spotlight on Our Business in Europe Europe Revenues and Operating Margin* Development Highlights – Growing business with solid fundamentals – High profitability 5,186 – Strong leadership position in all key markets 4,795 4,886 4,757 – Broad portfolio and pipeline 4,525 – Proven go-to-market model in
Slide 7: AUSTEDO
® AUSTEDO® AUSTEDO Revenues By Quarter AUSTEDO TRx Count Per Quarter Highlights ($ million) 60,000 344 ̶ U.S. sales: 54,832 ̶ $963 million in FY 2022, an increase 50,000 282 of 20% vs. 2021 260 ̶ $344 million in Q4 2022, an increase 40,000 of 22% vs. Q4 2021 201 204 185 30,000 161168 174 ̶ Prescript
Slide 8: Tardive Dyskinesia - Widespread and Undertreated
Tardive Dyskinesia - Widespread and Undertreated TD affects ~785,000 patients in the U.S. ~15% diagnosed ~5% receive available treatments Significant potential for long-term growth |8| Source: Cerner Enviza Patient TD and HD chorea Patient Analysis Sept 2022
Slide 9: AJOVY
AJOVY® AJOVY U.S. QTR Normalized TRx AJOVY EU Monthly Volume Market Share Highlights ̶ Net global sales of $377 million in FY 2022 and $123 million in Q4 2022: 300,000 251,992 ̶ North America – $218 million in FY 250,000 2022 and $75 million in Q4 2022 200,000 31% ̶ Europe – $124 million in FY 2022
Slide 10: Teva Innovative Medicine & Biosimilar Pipeline
Teva Innovative Medicine & Biosimilar Pipeline By development stage – as of February 1, 2023 Under Regulatory Preclinical Phase 1 Phase 2 Phase 3 Pre-Submission Review TEV-56278 TEV-53408 TEV-48574 Olanzapine LAI Digihaler® Biosimilar to Humira® TEV-56285 Inflammatory Bowel Oncology Gastrointestinal
Slide 11: Building a Schizophrenia Franchise
Building a Schizophrenia Franchise Schizophrenia Patients Atypical Antipsychotics UZEDYTM: resubmitted NDA to Population* Market 2022* the FDA in October 2022; anticipated action date in H1/23 ~2.5m affected • Desirable pharmacokinetics • Simplified administration ~2.3m diagnosed Oral • Ready to use
Slide 12: Biosimilar to Humira (adalimumab)
Biosimilar to Humira® (adalimumab) Branded Humira® market size in the United States (2021 net sales): $17.3 billion1 Potential to be the first high-concentration interchangeable adalimumab in the United States FDA anticipated decision date on Alvotech’s license application is April 13, 20232 FDA ant
Slide 13: ESG is Everyone's Business at Teva
ESG is Everyone’s Business at Teva Advancing health and Minimizing the impact Dedicating ourselves equity through our of our operations and to quality, ethics medicines products on the planet and transparency and across our business | 13 |
Slide 14: Established Improved 2027 Long-Term Financial Targets
Established Improved 2027 Long-Term Financial Targets To be achieved by year - end 2027 Operating income Net debt/Adjusted Cash-to-earnings(2)(3)(4) Revenue growth(5) margin(1)(2) EBITDA(2) 30% 2.0X 80% Committed to utilizing cash flow to pay down debt; we do not plan to raise equity 1. Operating in
Slide 15: Eli Kalif
Eli Kalif EVP and Chief Financial Officer
Slide 16: Q4 2022 Summary
Q4 2022 Summary $ millions, except EPS Q4 2022 Q4 2021 Q4 2022 Q4 2021 GAAP Non-GAAP Revenues* 3,884 4,100 3,884 4,100 Operating income (loss) (855) 78 1,130 1,248 Net income (loss) attributable to Teva (1,221) (159) 791 854 (1.10) (0.14) 0.71 0.77 Earnings (loss) per share ($)** 1,111 million 1,103
Slide 17: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q4 2022 Comments Mainly related to exchange rate fluctuations in International Markets and Goodwill impairment charge 1,300 updated projections in our Teva API business Amortization 156 Impairment of long-lived assets 145 Contingent consideration 63 Accelerated deprec
Slide 18: Q4 2022 Non-GAAP Summary
Q4 2022 Non-GAAP Summary $ billions, except EPS Q4 2022 Q4 2021 Change FY 2022 FY 2021 Change Revenues* 3.9 4.1 ( 5%) 14.9 15.9 ( 6%) 2.1 2.3 ( 9%) 8.1 8.6 ( 6%) Gross profit 54.2% 56.1% ( 1.9%) 54.0% 54.2% ( 0.3%) 1.1 1.2 ( 9%) 4.1 4.4 ( 6%) Operating income 29.1% 30.4% ( 1.4%) 27.7% 27.7% 0.1% Adj
Slide 19: Spend Base
Spend Base $ millions -691 (-6% ) -174 in local currency (-2% ) -97 (-3% ) 11,477 +38 in local currency (+1% ) 10,786 2,754 2,852 7,266 6,869 (63%) (64%) 1,779 1,798 (65%) (63%) 3,917 4,212 COGS 975 1,053 (36%) (37%) OPEX (35%) (37%) Q4 2022 Q4 2021 FY 2022 FY 2021 Revenues 3,884 4,100 14,925 15,878
Slide 20: Operating Margin Expansion
Operating Margin Expansion Non-GAAP operating margin % 28.5% 28.0% 28.0% 27.8% 27.7% 27.7% 27.5% 27.0% 26.3% 26.5% 26.0% 25.9% 25.5% 25.0% 24.5% 24.5% 24.0% 2017 2018 2019 2020 2021 2022 2023 Target | 20 |
Slide 21: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 1,140 795 716 685 625 301 117 59 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 | 21 |
Slide 22: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions Net Debt 20.9 20.7 20.0 19.0 18.4 4.9 4.8 4.8 4.7 4.6 EBITDA MAT Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net Debt / EBITDA MAT* 4.25 4.29 4.16 4.02 4.00 Leverage 67% 69% 69% 69% 71% | 22 | *Teva's Net Debt/EBITDA MAT covenant ratio limits are 4.5x for Q1 2022 - Q3 2
Slide 23: Net Debt Development
Net Debt Development $ billions $35.0 $34.0 $33.0 $31.0 $29.0 $27.0 $25.0 $23.0 $21.0 $19.0 $18.4 $17.0 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 | 23 |
Slide 24: Debt Maturities
Debt Maturities $ billions 3.5 3.4 2.9 2.1 2.1 2.0 1.9 1.6 1.0 0.8 23 24 25 26 27 28 29 30 … 36 … 46 CHF EUR USD | 24 |
Slide 25: Cash-to-Earnings
Cash-to-Earnings $ millions 2023 long-range target: 80% 2,830 2,855 2,812 2,196 2,243 2,110 75% 77% 80% FY-20 FY-21 FY-22 FY-20 FY-21 FY-22 FY-20 FY-21 FY-22 Free Cash Flow Cash-to-earnings* Non-GAAP Net Income | 25 | • * Free Cash Flow / non-GAAP Net income
Slide 26: 2023 Non-GAAP Outlook
2023 Non-GAAP Outlook $ billions, except EPS or as noted 2023 Outlook 2022 Actual Revenues* $14.8 – $15.4 $14.9 COPAXONE ($m)* ~500 691 AUSTEDO ($m)* ~1,200 971 AJOVY ($m)* ~400 377 Operating Income 4.0 – 4.4 4.1 Adjusted EBITDA 4.5 – 4.9 4.6 Finance Expenses ($m) ~1,000 904 Tax Rate 14% – 17% 11.7%
Slide 27: In Summary
In Summary Solid Q4 and full year 2022, on the backdrop of significant FX and macroeconomic headwinds AUSTEDO and AJOVY continue to drive growth Strong performance in Europe and International Markets Progress in our innovative medicine pipeline We remain committed to our long-term financial goals Lo
Slide 28: Q&A
Q&A | 28 |
Slide 29: Additional Information
Additional Information
Slide 30: FY 2022 Summary
FY 2022 Summary $ millions, except EPS FY 2022 FY 2021 FY 2022 FY 2021 GAAP Non-GAAP Revenues(*)(**) 14,925 15,878 14,925 15,878 Operating income (loss) (2,099) 1,716 4,139 4,401 Net income (loss) attributable to Teva (2,353) 417 2,812 2,855 (2.12) 0.38 2.52 2.58 Earnings (loss) per share ($)*** 1,1
Slide 31: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q4 2022 Q4 2021 $ millions, except EPS Q4 2022 Q4 2021 Change Margins Margins Revenues 3,884 4,100 ( 5%) COGS 2,113 54.4% 2,049 50.0% 3% Gross profit 1,770 45.6% 2,050 50.0% ( 14%) R&D 210 5.4% 244 5.9% ( 14%) S&M 549 14.1% 632 15.4% ( 13%) G&A 289 7.4% 276 6.7% 4% Le
Slide 32: FY 2022 GAAP Income Statement
FY 2022 GAAP Income Statement FY 2022 FY 2021 $ millions, except EPS FY 2022 FY 2021 Change Margins Margins Revenues 14,925 15,878 ( 6%) COGS 7,952 53.3% 8,284 52.2% ( 4%) Gross profit 6,973 46.7% 7,594 47.8% ( 8%) R&D 838 5.6% 967 6.1% ( 13%) S&M 2,265 15.2% 2,429 15.3% ( 7%) G&A 1,180 7.9% 1,099 6
Slide 33: Q4 2022 Foreign Exchange Impact
Q4 2022 Foreign Exchange Impact $ millions Q4 2022 Q4 2021 Diff FX Effect Diff net FX Revenues 3,884 4,100 ( 216) ( 270) 54 Operating income ( 855) 78 ( 933) ( 132) ( 801) GAAP Operating income 1,130 1,248 ( 118) ( 135) 16 Non-GAAP | 33 |
Slide 34: Net Revenue and Non-GAAP Profitability
Net Revenue and Non-GAAP Profitability $ millions 4,100 3,982 3,910 3,887 3,884 3,786 3,661 3,595 53.8% 53.3% 53.6% 56.1% 54.2% 54.4% 53.0% 54.2% 27.1% 26.8% 30.4% 27.7% 26.9% 27.2% 29.1% 26.4% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net Revenues Non-GAAP Gross Profit Margin
Slide 35: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 FY21 FY22 North America Segment 2,003 1,737 1,904 1,809 2,002 7,809 7,452 Generic products 905 899 1,026 806 818 3,769 3,549 AJOVY® 53 36 49 57 75 176 218 AUSTEDO® 282 154 204 260 344 802 963 BENDEKA®/TREANDA® 93 82
Slide 36: Non-GAAP Profits and EPS
Non-GAAP Profits and EPS $ millions, EPS in $ 1,248 1,130 1,077 1,019 1,034 1,042 1,013 977 854 754 791 699 651 651 658 609 0.77 0.68 0.71 0.63 0.59 0.59 0.55 0.59 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Non-GAAP Net Income Non-GAAP Operating Income Non-GAAP EPS | 36 |
Slide 37: Q4 2022 Non-GAAP Operating Income
Q4 2022 Non-GAAP Operating Income $ millions -$118m (-9%) +$16m in local currency (1%) (35) (53) (37) 7 1,248 1,130 Q4-21 North America Europe International Markets Other Activities Q4-22 | 37 |
Slide 38: FY 2022 Non-GAAP Operating Income
FY 2022 Non-GAAP Operating Income $ millions -$261m (-6%) +$1m in local currency (0%) (232) 2 (49) 17 4,401 4,139 FY-21 North America Europe International Markets Other Activities FY-22 | 38 |
Slide 39: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions 1,248 29 (2%) 1,130 131 (10%) 37 1,013 1,019 93 (3%) 977 (8%) 51 (5%) 55 (5%) 29 (3%) 420 95 (9%) 112 (11%) ( 34%) 179 (18%) 366 ( 32%) 389 360 381 ( 38%) ( 37%) ( 38%) 668 633 ( 54%) 481 477 ( 56%) 402 ( 47%) ( 49%) ( 40%) Q4-21 Q1-22 Q2-22 Q3-22 Q4-22
Slide 40: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA* $ millions 1,373 1,240 1,135 1,134 1,089 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 | 40 | Please see our press release reporting our financial results for the fourth quarter of 2022 and the year ended December 31, 2022 for a reconciliation of Adjusted EBITDA to its nearest G
Slide 41: Q4 2022 Adjusted EBITDA to Free Cash Flow
Q4 2022 Adjusted EBITDA to Free Cash Flow $ millions (100) (8%) 23 (142) (276) (269) 286 (107) 820 1,240 1,140 (744) 973 238 EU 71 Adjusted Interest Tax payments AR Inventory AP & Other Securitization Securitization Operating Securitization Asset sales, Free cash flow EBITDA payments, net U.S. ex-U.
Slide 42: FY 2022 Adjusted EBITDA to Free Cash Flow
FY 2022 Adjusted EBITDA to Free Cash Flow $ millions (2,355) (51%) (886) (543) (460) 60 (393) (548) 4,598 820 (195) (1,166) 1,140 (184) 2,243 1,590 Adjusted Interest Tax payments AR Inventory Legal Restructuring Securitization Securitization Operating Securitization Asset sales, Free cash EBITDA pay
Slide 43: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions Dec 31, 2022 Dec 31, 2021 Diff Cash and Cash Equivalents 2.8 2.2 0.6 AR Trade 3.7 4.5 ( 0.8) Pre-paid Expenses and Other Current Assets 1.7 2.1 ( 0.3) Inventory 3.8 3.8 0.0 Fixed Assets 5.7 6.0 ( 0.2) Intangible Assets 6.3 7.5 ( 1.2) Goodwill 17.6 20.0 ( 2.4) Ot
Slide 44: Q4 2022 Debt Movements
Q4 2022 Debt Movements $ Billions 21.3 (0.7) 0.7 21.2 (2.8) 18.4 Sep 30, Debt FX & Other Dec 31, Cash balance Dec 31, 2022 Repayment 2022 2022 Gross Debt Gross Debt Net Debt | 44 |
Slide 45: FY 2022 Debt Movements
FY 2022 Debt Movements $ Billions 23.0 (1.4) (0.5) 21.2 (2.8) 18.4 Dec 31, Debt FX & Other Dec 31, Cash balance Dec 31, 2021 Repayment 2022 2022 Gross Debt Gross Debt Net Debt | 45 |
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Teva Pharmaceutical Industries — Q4 2022 Earnings Presentation on 6ix