Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Investor Presentation (January 2017)
29 slides from Teva Pharmaceutical Industries's investor presentation, Jan 6, 2017
Slide 1: 2017 Financial Outlook
Teva Pharmaceutical Industries Ltd. 2017 Financial Outlook January 6, 2017 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: This presentation 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 could cause our future
Slide 3: 2017 Financial Outlook - Agenda
2017 Financial Outlook - Agenda Erez Vigodman, President & CEO Eyal Desheh, Group Executive VP and CFO Q&A with Management Team
Slide 4: Erez Vigodman, President & CEO
Erez Vigodman, President & CEO
Slide 5: Non-GAAP financial highlights
Non-GAAP financial highlights 2017 Business 2016 Guidance* Outlook Revenues 21.6-21.9 23.8-24.5 $ billions Operating income 6.8-7.0 7.4-7.8 $ billions EBITDA 7.3-7.5 8.0-8.4 $ billions Net income 5.2-5.3 5.3-5.7 $ billions EPS 5.10-5.20 4.90-5.30 $ Weighted average number of shares, in millions 1,02
Slide 6: Revenue Breakdown by Business Line
Revenue Breakdown by Business Line $ billions +2.4 (+11%) 23.8-24.5 21.6-21.9 2.1 - 2.3 (~9%) Other 1.2 (5%) 4.0 - 4.2 (~17%) Specialty 4.4 (21%) MS Specialty 3.8 – 3.9 (~16%) Generics 4.2 (19%) inc OTC 13.9 - 14.3 (~58%) 12.0 (55%) 2016 E 2017 E 6
Slide 7: Profit Breakdown by Business Line
Profit* Breakdown by Business Line $ billions +0.5 (+6%) 8.4-8.8 8.0-8.2 0.1 (~1%) 0.1 (1%) 1.1 – 1.3 (~14%) Other 1.25 – 1.3 (15%) Specialty 3.05 – 3.1 (~36%) MS Specialty 3.4 – 3.45 (42%) Generics inc OTC 4.1 – 4.3 (~49%) 3.3 – 3.4 (41%) 2016 2016 E E 2017 EE 2017 * Segment profit is comprised of
Slide 8: Our Top Priorities for 2017
Our Top Priorities for 2017 Full Execution Extract deal Deliver on the Defend Cash generation of key generics synergies & Drive promise of our Copaxone® and debt pay launches additional Specialty down globally and efficiencies pipeline further throughout the expansion of organization pipeline 8
Slide 9: Significant Increase in Generics Profit and Profitability
Significant Increase in Generics Profit and Profitability 48%-49% 47% 46.5%-47.5% 42% $4.1-$4.3b Gross Profit 41% $3.3-$3.4b $2.9b $2.3b 30%-31% Generics Profit $1.9b 28% 27.5%-28.5% Profitability 22% 17% 2013 2014 2015 2016E 2017E • * Segment profit is comprised of gross profit, less S&M and R&D ex
Slide 10: Teva Generics Leading Global Platform
Teva Generics Leading Global Platform Geographic Diversification and Strong Profitability Across All Regions 2017 Revenues Europe # 1 Market Position United States 26-28% Consistent bottom line #1 Market Position growth 43-45% Robust pipeline & new launches critical to Growth Markets growth beyond p
Slide 11: Broad Gx Pipeline Provides Robust Pool of New Product Opportunities in 2017
Broad Gx Pipeline Provides Robust Pool of New Product Opportunities in 2017 1,000+ New Product Launches Planned Globally U.S. launches expected to generate revenues of > $750 million in 2017 Date certain launches Teva Gx Sales Potential • Azilect® • Byetta® • Viagra® • Additional 80+ New <$10m 52 pr
Slide 12: Delivering $1.3B in Synergies and Additional Cost Reductions in 2017
Delivering $1.3B in Synergies and Additional Cost Reductions in 2017 $ billion 2016 (Estimate) 2017 Guidance COGS <0.1 0.2 R&D <0.1 0.3 S&M <0.1 0.5 G&A <0.1 0.3 Total Operational Synergies & Additional Cost Reductions 0.3 1.3 Tax Savings 0.2 0.55 Negative Impact of (0.2) (0.6) Divestitures 12
Slide 13: Major Specialty Milestones in 2017
Major Specialty Milestones in 2017 5 important clinical results; 5 major submissions; 7 expected approvals Clinical results Major submissions Expected Approvals TEV-48125 in Episodic TEV-48125 in Episodic PIII BLA Migraine NDA SD-809 HD Migraine TEV-48125 in Chronic TEV-48125 in Chronic PIII Migrain
Slide 14: Copaxone in 2017
Copaxone® in 2017 Base Case Downside Case • Total Copaxone® revenues of $3.8 - $3.9b: • Potential impact of 2 generic competitors to Copaxone® 40 mg launching in Feb 17 in • U.S. revenues of $3.1- $3.2b the U.S. is expected to reduce: • Non-U.S. revenues of $0.7- $0.9b • Revenues by $1.0 - $1.2b • A
Slide 15: Strong Focus on Cash Flow Generation and Deleveraging
Strong Focus on Cash Flow Generation and Deleveraging $ billions Gross Debt 36.9 35.8 30.5 Sep 30, 16A Dec 31, 16E Dec 31, 17E Debt/EBITDA 5.38 4.88 3.64 15
Slide 16: Eyal Desheh, Group Executive VP & CFO
Eyal Desheh, Group Executive VP & CFO
Slide 17: 2017 Assumptions
2017 Assumptions • First full year of Actavis Generics integration • Cost reduction and synergies acceleration • Copaxone® 40mg exclusivity maintained throughout 2017 in base plan • New specialty product launches expected in 2017: • SD-809 for Huntington Disease in Q2 2017 • SD-809 for Tardive Dyski
Slide 18: Non-GAAP financial highlights
Non-GAAP financial highlights 2017 Business 2016 Guidance* Outlook Revenues 21.6-21.9 23.8-24.5 $ billions Operating income 6.8-7.0 7.4-7.8 $ billions EBITDA 7.3-7.5 8.0-8.4 $ billions Net income 5.2-5.3 5.3-5.7 $ billions EPS 5.10-5.20 4.90-5.30 $ Weighted average number of shares, in millions 1,02
Slide 19: 2017 Assumptions - Foreign Exchange Impact
2017 Assumptions - Foreign Exchange Impact 2017 2016 Business Change FX Effect Net of FX Guidance* Outlook Revenues 21.6-21.9 23.8-24.5 2.2-2.6 (0.8) 3.0-3.4 $ billions Operating income* 6.8-7.0 7.4-7.8 0.6-0.8 (0.2) 0.8-1.0 $ billions * Provided November 15th 2016 From December 1, 2016 , we use a b
Slide 20: 2017 non-GAAP P&L outlook
2017 non-GAAP P&L outlook 2016 Guidance* 2017 Outlook Net Revenues ($B) 21.6-21.9 23.8-24.5 Gross Profit (%) 61%-61.5% 57%-58% R&D ($B) 1.6-1.7 1.75-1.85 S&M ($B) 3.55-3.65 3.4-3.55 G&A ($B) 1.2-1.3 1.0-1.1 Operating Income ($B) 6.8-7.0 7.4-7.8 Finance Expenses ($B) 0.4 0.8-0.85 Tax (%) 18% 17%-18%
Slide 21: Revenue breakdown by market
Revenue breakdown by market $ billions +2.4 +11% 23.8-24.5 21.6-21.9 ROW 5.1 - 5.3 (~21%) Europe 5.0 (23%) US 5.5 - 5.8 (~23%) 5.4 (25%) 13.2 - 13.8 (~55%) 11.4 (52%) 2016 E 2017 E 21
Slide 22: Revenue Breakdown by Business Line
Revenue Breakdown by Business Line $ billions +2.4 (+11%) 23.8-24.5 21.6-21.9 2.1 - 2.3 (~9%) Other 1.2 (5%) 4.0 - 4.2 (~17%) Specialty 4.4 (21%) MS Specialty 3.8 – 3.9 (~16%) Generics 4.2 (19%) inc OTC 13.9 - 14.3 (~58%) 12.0 (55%) 2016 E 2017 E 22
Slide 23: Revenue Bridge – 2016-2017
Revenue Bridge – 2016-2017 $ billions +2.7 +2.4 (+12%) +11% 1.0 1.0 0.8 23.8-24.5 0.3 0.2 2.8 21.6-21.9 2.2 2016 E Generics, MS Specialty Specialty Other FX 2017 E inc OTC 23
Slide 24: EBITDA Evolution
EBITDA Evolution $ billions 8.0 – 8.4 7.3 – 7.5 6.6 2015 2016 E 2017E Adjusted EBITDA is based on non-GAAP operating income, which excludes amortization and certain other items, and excluding depreciation expenses. 24
Slide 25: 2017 Business lines outlook
2017 Business lines outlook Generics, Other Total MS Specialty Others inc OTC Specialty Net Revenues 23.8 – 24.5 13.9 – 14.3 4.0 – 4.2 3.8 – 3.9 2.1 – 2.3 ($B) Segment Profit* 8.4 – 8.8 4.1 – 4.3 1.1 – 1.3 3.05 – 3.1 0.1 – 0.1 ($B) * Segment profit is comprised of gross profit, less S&M and R&D expe
Slide 26: 2017 Key Specialty Medicines Outlook
2017 Key Specialty Medicines Outlook $ millions FY2017 Outlook Assumptions Copaxone® 3,800-3,900 No generic 40mg Bendeka™ & Treanda® 600-660 No generic ProAir® family 440-540 Generic in Q3 Qvar® family 450-490 No generic Azilect® 110-190 Generic in Q1 26
Slide 27: Cash flow outlook
Cash flow outlook $ billions Cash flow from Operations Free Cash Flow 6.3-6.7 5.5 5.7-6.1 5.9-6.0 4.9 4.8-5.0 2015 A 2016 E 2017 E 27
Slide 28: 2017 Financial summary
2017 Financial summary • Affected by full-year inclusion of Actavis and Anda 11% revenue growth • Including foreign exchange headwinds of $0.8 billion • Focus on extracting synergies and expanding cost Robust cost reduction reduction activities • Driving an improvement in profitability to over 30% •
Slide 29: Q&A
Q&A
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