Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q2 2021 Earnings Presentation
38 slides from Teva Pharmaceutical Industries's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Results
Teva Pharmaceutical Industries Ltd. Second Quarter 2021 Results July 28, 2021
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
Slide 3: Kåre Schultz, President and Chief Executive Officer
Kåre Schultz President and Chief Executive Officer
Slide 4: Q2 2021 Financial Highlights
Q2 2021 Financial Highlights − Revenues of $3.9 billion − Adjusted EBITDA of $1.2 billion − GAAP diluted EPS of $0.19; Non-GAAP diluted EPS of $0.59 − Free cash flow of $625 million − Debt reduction continues; net debt / EBITDA of 4.73x − 2021 revenue outlook lowered to reflect ongoing impact of COV
Slide 5: Revenue Development
Revenue Development $ millions 4,468 4,454 4,357 4,177 4,093 332 344 307 3,978 3,982 3,910 342 314 3,870 578 565 316 572 289 335 298 582 565 529 490 485 488 1,184 1,237 1,402 1,183 1,163 1,214 1,001 1,116 1,184 Other Activities 2,373 2,300 International Markets 2,071 2,051 2,082 2,047 2,017 1,989 1,
Slide 6: AUSTEDO Prescriptions Continue to Grow
AUSTEDO® Prescriptions Continue to Grow AUSTEDO Revenues By Quarter AUSTEDO TRx Count Per Quarter Highlights ($ million) 185 174 • U.S. sales of $174 million in 40,000 38,014 168 Q2 2021, an increase of 8% 161 vs. Q2 2020 ($161 million) 35,000 146 136 • >38K prescriptions were 30,000 122 dispensed i
Slide 7: AJOVY Solid Net Sales Growth in Q2 2021
AJOVY® Solid Net Sales Growth in Q2 2021 AJOVY U.S. QTR Normalized TRx AJOVY EU Monthly Volume market share Highlights • Net global sales of $70 million in Q2 250,000 2021: 214,085 30.0% • North America - $46 million 200,000 25.0% 24.9% • Europe - $19 million • International Markets - $5 million 150
Slide 8: Truxima - Biosimilar Continues Growth
Truxima® - Biosimilar Continues Growth Truxima Market Shares within rituximab IV, June 2021 Highlights 28 26.2% 26.9% 25.4% 26 24.4% • Quarterly market share of 23.4% 25.2% in Q2, up vs. 24.6% 24 22.2% 22 20.6% in Q1 19.5% 22.7% 22.6% Volume Market Share in % 20 20.1% 20.6% • Rituximab market 18 16.
Slide 9: Operating Margin Expansion
Operating Margin Expansion Non-GAAP operating margin % 28.5% 28.0% 28.0% 27.8% 27.5% 27.0% 27.0% 26.7% 26.5% 26.3% H1’21 26.0% 25.9% 25.5% 25.0% 24.5% 24.5% 24.0% 2017 2018 2019 2020 2021 Guidance* 2023 Target |9| * Estimated margin based on 2021 guidance
Slide 10: Long-Term Financial Targets
Long-Term Financial Targets To be achieved by year-end 2023 Operating income margin (2)(3) Cash-to-earnings(1)(3)(4) Net debt / EBITDA (3)(5) 28% >80% <3X Committed to utilizing cash flow to pay down debt; we do not plan to raise equity (1) Free cash flow includes cash flow from operating activities
Slide 11: Teva's generic medicines saved the U.S. healthcare system $28.8 billion in 2020
Teva’s generic medicines saved the U.S. healthcare system $28.8 billion in 2020 Savings from Teva’s Generic Medicines Savings by Payer ($ billion) $0.3 $4.2 $12.8 $11.5 >$4 Billion in Direct Savings to Patients Economic activity supported 57,000+ jobs and contributed $15.7 billion to economic output
Slide 12: Teva saved healthcare systems across nine key European markets $9.6 billion in 2020
Teva saved healthcare systems across nine key European markets $9.6 billion in 2020 Sweden: $200M Economic activity Netherlands: $1.1B Poland: $112M supported nearly 105,000 jobs and UK: $4.3B Germany: $3.1B contributed $29.5 billion to Switzerland: $193M France: $421M economic output Spain: $239M B
Slide 13: Eli Kalif, EVP & Chief Financial Officer
Eli Kalif EVP & Chief Financial Officer
Slide 14: Q2 2021 Summary
Q2 2021 Summary $ millions, except EPS Q2 2021 Q2 2020 Q2 2021 Q2 2020 GAAP Non-GAAP Revenues* 3,910 3,870 3,910 3,870 Operating income 582 173 1,034 979 Net income attributable to Teva 207 140 651 605 0.19 0.13 0.59 0.55 Earnings per share ($)** 1,109 million 1,100 million 1,109 million 1,100 milli
Slide 15: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q2 2021 Comments Impairment of long-lived assets 226 Mainly U.S. IPR&D and product rights Amortization 173 Quarterly run-rate, partially offset by asset true-up Legal, Restructuring and Other 74 Financial Expenses 34 Equity Compensation Plans 29 Divested Gain (37) Con
Slide 16: Q2 2021 Non-GAAP Summary
Q2 2021 Non-GAAP Summary $ billions, except EPS Q2 2021 Q2 2020 Change H1 2021 H1 2020 Change Revenues* 3.9 3.9 1% 7.9 8.2 (4%) 2.1 2.0 4% 4.2 4.3 (2%) Gross profit 53.3% 52.0% 1.4% 53.6% 52.5% 1.0% 1.0 1.0 6% 2.1 2.2 (5%) Operating income 26.4% 25.3% 1.1% 26.7% 27.0% (0.3%) EBITDA 1.2 1.1 5% 2.4 2.
Slide 17: Spend Base
Spend Base -223 (-4%) -412 Net of FX $ millions 6,004 5,781 -15 (0%) -120 Net of FX 2,891 2,876 3,905 3,663 (65%) (63%) 1,859 1,826 (64%) (63%) 2,099 2,117 1,031 1,051 (35%) (37%) COGS (36%) (37%) OPEX Q2 2020 Q2 2021 H1 2020 H1 2021 Revenues 3,870 3,910 8,227 7,892 GP% 52.0% 53.3% 52.5% 53.6% OP% 2
Slide 18: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 974 582 625 551 551 506 471 168 59 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 | 18 |
Slide 19: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions Net Debt 23.9 23.8 23.7 23.2 22.7 4.9 4.8 4.9 4.7 4.8 EBITDA MAT Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net Debt / EBITDA MAT* 4.90 4.92 4.83 4.90 4.73 Leverage 64% 71% 70% 69% 69% | 19 | * Teva's Net Debt/EBITDA MAT covenant ratio limits are 5.5x for H1 2021 and 5
Slide 20: 2021 Non-GAAP Outlook
2021 Non-GAAP Outlook April 2021 $ billions, except EPS FY 2020 July 2021 Outlook Comments Outlook Updated range reflects impact of COVID-19 Revenues* 16.7 16.4 - 16.8 16.0 - 16.4 on customer purchasing patterns and overall utilization by patients COPAXONE® $1,337 million ~$1,050 million ~$1,050 mil
Slide 21: Q&A
Q&A
Slide 22: Additional Information
Additional Information teva
Slide 23: H1 2021 Summary
H1 2021 Summary $ millions, except EPS H1 2021 H1 2020 H1 2021 H1 2020 GAAP Non-GAAP Revenues 7,892 8,227 7,892 8,227 Operating income 1,015 364 2,111 2,223 Net income attributable to Teva 284 209 1,350 1,440 0.26 0.19 1.22 1.31 Earnings per share ($)* 1,108 million 1,098 million 1,109 million 1,098
Slide 24: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q2 2021 Q2 2020 $ millions, except EPS Q2 2021 Q2 2020 Change Margins Margins Revenues 3,910 3,870 1% COGS 2,037 52.1% 2,107 54.5% (3%) Gross profit 1,873 47.9% 1,763 45.5% 6% R&D 248 6.3% 225 5.8% 10% S&M 615 15.7% 597 15.4% 3% G&A 242 6.2% 264 6.8% (8%) Legal settle
Slide 25: H1 2021 GAAP Income Statement
H1 2021 GAAP Income Statement H1 2021 H1 2020 $ millions, except EPS H1 2021 H1 2020 Change Margins Margins Revenues 7,892 8,227 (4%) COGS 4,141 52.5% 4,402 53.5% (6%) Gross profit 3,750 47.5% 3,826 46.5% (2%) R&D 501 6.4% 446 5.4% 12% S&M 1,200 15.2% 1,210 14.7% (1%) G&A 532 6.7% 567 6.9% (6%) Lega
Slide 26: Q2 2021 Foreign Exchange Impact
Q2 2021 Foreign Exchange Impact $ millions Q2 2021 Q2 2020 Diff FX Effect Diff net FX Revenues 3,910 3,870 40 135 (95) Operating income 582 173 409 26 383 GAAP Operating income 1,034 979 54 30 24 Non-GAAP | 26 |
Slide 27: Net Revenue and Profitability (Non-GAAP)
Net Revenue and Profitability (Non-GAAP) $ millions 4,468 4,454 4,357 4,177 4,093 3,978 3,982 3,910 3,870 52.4% 51.4% 50.6% 53.1% 52.0% 52.4% 52.3% 53.8% 53.3% 24.2% 25.7% 23.8% 28.5% 25.3% 25.8% 25.6% 27.1% 26.4% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net Revenues G
Slide 28: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 North America Segment 2,047 2,017 2,300 1,989 1,943 Generic products 923 928 1,206 1,053 951 ® AJOVY 34 35 36 31 46 ® AUSTEDO 161 168 185 146 174 BENDEKA®/TREANDA® 103 105 102 91 106 ® COPAXONE 238 236 213 164 152 Pr
Slide 29: Profits and EPS (Non-GAAP)
Profits and EPS (Non-GAAP) $ millions, EPS in $ 1,244 1,140 1,061 1,077 1,011 1,051 1,025 1,034 979 835 683 753 699 653 637 605 637 651 0.76 0.68 0.60 0.58 0.62 0.55 0.58 0.63 0.59 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net Income Operating Profit EPS | 29 |
Slide 30: Spend Base Trend (Non-GAAP)
Spend Base Trend (Non-GAAP) $ millions Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 COGS 1,859 1,894 2,126 1,838 1,826 S&M 559 566 627 549 582 R&D 233 233 254 244 243 G&A 245 269 312 278 231 Other income (6) (8) (5) (5) (6) Total 2,891 2,953 3,313 2,905 2,876 | 30 |
Slide 31: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions +54 (+6%) +24 Net of FX (+2%) 27 -19 99 -52 1,034 979 Q2-20 North America Europe International Markets Other Activities Q2-21 | 31 |
Slide 32: H1 2021 Non-GAAP Operating Income
H1 2021 Non-GAAP Operating Income $ millions -112 (-5%) -132 Net of FX (-6%) -25 -65 -8 -14 2,223 2,111 H1 - 20 North America Europe International Markets Other Activities H1 - 21 | 32 |
Slide 33: Operating Income by Segments: Q2 2021 vs. Q2 2020 Actual
Operating Income by Segments: Q2 2021 vs. Q2 2020 Actual $ millions 1,140 33 (3%) 1,077 1,025 96 (8%) 41 (4%) 1,034 979 28 (3%) 47 (5%) 122 (11%) 66 (7%) 125 (12%) 123 (12%) 273 97 (10%) (24%) 338 244 312 343 (31%) (25%) (30%) (33%) 738 573 560 (65%) 577 521 (59%) (55%) (54%) (50%) Other Activities
Slide 34: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA* $ millions 1,277 1,206 1,108 1,153 1,162 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 | 34 | * Adjusted EBITDA is defined as operating income excluding depreciation and amortization expenses and certain other items
Slide 35: Q2 2021 Adjusted EBITDA to Free Cash Flow
Q2 2021 Adjusted EBITDA to Free Cash Flow $ millions (537) (46%) (191) (100) 87 5 (281) 116 1,162 (113) (464) 405 625 218 Adjusted Interest Tax payments AR Inventory AP & Other Securitization* Operating Securitization Asset sales; Free EBITDA payments, cash flow reclass Capex gross cash flow net | 3
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions Jun 30, 2021 Mar 31, 2021 Diff Cash and Cash Equivalents 2.4 1.7 0.7 AR Trade 4.5 4.6 (0.1) Pre-paid Expenses and Other Current Assets 1.5 1.7 (0.1) Inventory 4.4 4.4 (0.0) Fixed Assets 6.1 6.1 0.0 Intangible Assets 8.1 8.4 (0.3) Goodwill 20.4 20.3 0.1 Other Lon
Slide 37: Q2 2021 Debt Movements
Q2 2021 Debt Movements $ billions 0.1 -2.4 25.0 25.1 22.7 Mar 31, FX Jun 30, Cash balance Jun 30, 2021 2021 2021 Gross Debt Gross Debt Net Debt | 37 |
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