42 slides from Teva Pharmaceutical Industries's earnings presentation, Feb 16, 2010
Slide 1: Presentation to Israeli Capital Market Q4-09 and Full Year 2009 Results
1 Presentation to Israeli Capital Market Q4-09 and Full Year 2009 Results Shlomo Yanai, President & CEO Eyal Desheh, Chief Financial Officer February 16, 2010
Slide 2: Forward looking statements
Forward looking statements 2 TODAY’S PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING, AMONG OTHER THINGS, REGARDING OUR EXPECTED PROFITABLE GROWTH, REVENUES, NET INCOME, THE DRIVERS AND CONTRIBUTORS OF THIS GROWTH, STRATEGY AND COMPETITIVE ADVANTAGES, WHICH EXPRESS THE CURRENT BELIEFS AN
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures 3 TODAY’S PRESENTATIONS REFLECT NON-GAAP FINANCIAL MEASURES, INCLUDING OPERATING PROFIT, NET INCOME, EPS, OPERATING MARGIN, AND NET INCOME MARGIN, AND SHOULD NOT BE CONSIDERED REPLACEMENTS FOR GAAP RESULTS. WE PROVIDE SUCH NON-GAAP DATA BECAUSE MANAGEMENT BELIEVES THAT SU
Slide 4: 2009 Highlights
4 2009 HIGHLIGHTS STRATEGIC UPDATE – HIGHLIGHTS Q4 2009 AND FULL YEAR 2009 FINANCIAL RESULTS
Slide 5: Q4 2009 – strong results
Q4 2009 – strong results 5 Q4/08* Q4/09* Change Sales 2,848 3,802 +33% $m Operating income 746 1,049 +41% $m Net income 662 847 +28% $m EPS 0.80 0.94 +16% $ * Net income, operating income and EPS are non GAAP results
Slide 6: 2009 – strong results
2009 – strong results 6 2008* 2009* Change Sales 11,085 13,899 +25% $m Operating income 2,856 3,853 +35% $m Net income 2,493 3,029 +22% $m EPS 3.03 3.37 +11% $ * Net income, operating income and EPS are non GAAP results
Slide 7: 2009 – an extraordinary year
2009 – an extraordinary year 7 Record Record sales Financial Record profit levels: gross, operating and net Results Balance Record sales year 2008: an extraordinary in all geographies Business Record sales in all business lines Model Enhancing Copaxone® – solidify position as #1 MS treatment Branded
Slide 8: Enhancing leadership in the U.S. Pharma industry (brand and generic)
Enhancing leadership in the U.S. 8 Pharma industry (brand and generic) New Rx’s Total Rx’s NRxs % TRxs % (000s) Share (000s) Share 1 Teva 339,386 17.0 1 Teva 629,199 16.3 2 Mylan 143,651 7.2 2 Mylan 342,980 8.9 3 Watson 133,821 6.7 3 Pfizer 264,467 6.9 4 Pfizer 123,112 6.2 4 Novartis 241,866 6.3 5 N
Slide 9: Strategic Update – Highlights
9 2009 HIGHLIGHTS STRATEGIC UPDATE – HIGHLIGHTS Q4 2009 AND FULL YEAR 2009 FINANCIAL RESULTS
Slide 10: Teva strategy update: Targets for 2015
Teva strategy update: Targets for 2015 10 Revenues $31 bn Net income $6.8 bn Net profitability 22%
Slide 11: Maintaining Teva's mix of generics & branded
Maintaining Teva’s mix of generics & branded 11 $31bn ~30% $13.9bn Branded 30% ~70% Generics 70% 2009E 2015
Slide 12: Growth through market share
Growth through market share 12 2015 sales 2009-2015 targets CAGR North America $15bn 9.5% Europe $9bn 18.6% International $7bn 23.2% Total $31bn 14.3%
Slide 13: Two major topics
Two major topics 13 GENERICS GROWTH COPAXONE & TEVA’S BRANDED BUSINESS
Slide 14: 2 fundamental questions/topics
2 fundamental questions/topics 14 GENERICS GROWTH COPAXONE & TEVA’S BRANDED BUSINESS
Slide 15: World population growing and aging
World population growing and aging 15 World population, bn 9.1 6.5 40+ • World population is growing • Life expectancy is increasing • People are consuming more drugs <40
Slide 16: Healthcare costs growing faster than GDP
Healthcare costs growing faster than GDP 16 U.S. example Healthcare spend as % of GDP Average annual growth 1970-2008 17.0% 15.2% 5.8% 11.9% 8.8% 3.4% 7.0% 1970 1980 1990 2003 2008 GDP Healthcare Source: NCHC; OECD, US Department of Commerce
Slide 17: Growing demand for generics
Growing demand for generics 17 Market outlook for global generic sales $135-150bn $150bn in brand value New products: patent expirations $80bn Emerging Future Portfolio Developed Generics International Countries Markets Europe Current portfolio North America 2008 2015 Source: Exane BNP Paribas, IMS,
Slide 18: Biosimilars: the future
Biosimilars: the future 18 2008 worldwide sales of biologics, $bn Strategic Alliances Lonza 23 115 39 76 Teva’s Bio infrastructure 14 Sicor, IBR&D, CoGenesys Biosimilar Biosimilar Patents Patents Patents opportunity - opportunity - expired expiring expiring 2008 brand 2015 estimated before 2010 2010
Slide 19: Consolidation continues and intensifies
Consolidation continues and intensifies 19
Slide 20: Is there still room to grow in generics? YES!
Is there still room to grow in generics? YES! 20 $135-150 bn in 2015 GROWTH GROWTH GROWTH GROWTH Increasing People living Healthcare $150bn of opportunities longer and reforms and brands going in emerging consuming cost saving off-patent generics more drugs initiatives in the next markets 5 years
Slide 21: 2 Fundamental questions/topics
2 Fundamental questions/topics 21 GENERICS GROWTH COPAXONE & TEVA’S BRANDED BUSINESS
Slide 22: Teva Branded – multifaceted approach & expertise
Teva Branded – multifaceted approach & 22 expertise
Slide 23: Teva Branded – multifaceted approach & expertise
Teva Branded – multifaceted approach & 23 expertise
Slide 24: Branded products and growth opportunities
Branded products and growth opportunities 24 Marketed End phase III 2009-2012 End phase III 2012-2015 Copaxone® Innovative Multiple Sclerosis Laquinimod – Oral Multiple TV-1101 (OGX-011) Sclerosis (Phase III) Solid Tumors (Phase III) Azilect® StemEx® – Hemato-oncological DiaPep-277 – Type I Parkinso
Slide 25: Diversity across business units, products, geographies
Balance between high-growth generics & 25 higher-margin branded business ~30% branded High ~70% Higher GROWTH generic MARGINS Diversity across: BUSINESS UNITS, PRODUCTS, GEOGRAPHIES
Slide 26: Teva 2010-2015: Value creation
Teva 2010-2015: Value creation 26 9 Growth 9 High profitability Sustainable, 9 balanced business model 9 Financial Strength
Slide 27: Q4 2009 and Full Year 2009 Financial Results
27 2009 HIGHLIGHTS STRATEGIC UPDATE – HIGHLIGHTS Q4 2009 AND FULL YEAR 2009 FINANCIAL RESULTS
Slide 28: Q4 2009 – strong results
Q4 2009 – strong results 28 Q4/08* Q4/09* Change Sales 2,848 3,802 +33% $m Operating income 746 1,049 +41% $m Net income 662 847 +28% $m EPS 0.80 0.94 +18% $ Cash flow from operations 969 957 -1% $m * Net income, operating income and EPS are non GAAP results
Slide 29: Q4 – three year trend
Q4 – three year trend 29 All figures in millions $, except EPS Sales +33% Gross profit +36% Operating +41% Net income +28% EPS +18% profit 3,802 847 0.94 2,228 1,049 2,848 0.8 662 2,576 0.73 1,634 594 746 1,387 706 2007 2008 2009 2007 2008 2009 2007 2008 2009 2007 2008 2009 2007 2008 2009 * Gross pr
Slide 30: 2009 – strong results
2009 – strong results 30 2008* 2009* Change Sales 11,085 13,899 +25% $m Operating income 2,856 3,853 +35% $m Net income 2,493 3,029 +22% $m EPS 3.03 3.37 +11% $ Cash flow from operations 3,231 3,373 +4% $m * Net income, operating income and EPS are non GAAP results
Slide 31: Excellent margins
Excellent margins 31 2008* 2009* Change Sales 11,085 13,899 +25% $m Operating income 2,856 3,853 +35% $m Net income 2,493 3,029 +22% $m Gross margin 55.3 58.4 % Operating margin 25.8 27.7 % Net margin 22.1 21.8 % * Operating income, net income, gross margin, operating market and net margin are non G
Slide 32: Continuous growth track record
Continuous growth track record 32 Revenues, $ million CAGR 13,899 +21.5% 2,043 +23.7% 11,085 9,408 1,696 3,271 +11.2% International 1,335 2,976 Europe 2,645 North America 8,585 +25.7% 6,413 5,428 2007 2008 2009
Slide 33: Q4 2009 – balanced business model
Q4 2009 – balanced business model 33 By business line By geography $3.8bn $3.8bn International 15% $0.6bn Branded 26% $1.0bn Europe 24% $0.9bn Generic 74% $2.8bn North America 61% $2.3bn
Slide 34: 2009 – balanced business model
2009 – balanced business model 34 By business line By geography $13.9bn $13.9bn International Branded Europe Generic North America
Slide 35: Q4 2009 – exchange rate effect
Q4 2009 – exchange rate effect 35 $ million Q4 Q4 FX Real Growth 2009 2008 effect growth Total sales 3,802 2,848 +33% +98 +30% Operating profit 1,049 746 +41% +1 +40% North America 2,324 1,727 +35% +15 +34% Europe 925 710 +30% +75 +20% International 553 411 +35% +8 +33%
Slide 36: 2009 – exchange rate effect
2009 – exchange rate effect 36 $ million FX Real 2009 2008 Growth effect growth Total sales 13,899 11,085 +25% -572 +31% Operating profit 3,853 2,856 +35% -37 +36% North America 8,585 6,413 +34% -24 +34% Europe 3,271 2,976 +10% -352 +22% International 2,043 1,696 +20% -196 +32%
Slide 37: Quarterly cash flow
Quarterly cash flow 37 $ million 1,025 Cash from operations 969 957 Net asset purchase 195 179 179 733 Dividends distributed 90 126 658 141 136 148 127 134 Free cash flow 700 704 637 470 376 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
Slide 38: Annual cash flow
Annual cash flow 38 $ million 3,373 3,231 658 620 388 528 Cash from operations 1,813 Net asset purchase 501 Dividends distributed 299 2,223 2187 1,013 Free cash flow 2007 2008 2009
Slide 39: Consolidated balance sheet
Consolidated balance sheet 39 31 December, FY, $bn ASSETS 2008 2009 LIABILITIES 2008 2009 Cash & marketable securities 2.0 2.5 ST & LT financial debt 8.4 5.6 Inventories, A/R & other assets 9.5 9.9 SR&A, A/P & other accruals 5.6 6.3 Long-term assets 4.5 4.7 Long-term liabilities 2.5 2.6 Intangible a
Slide 40: Improved financial leverage
Improved financial leverage 40 $ bn 24.8 24.5 24.5 25.1 24.8 5.8 5.6 Debt 8.4 6.7 8.4 17.8 19.3 19.2 Equity 16.4 16.1 Dec Mar Jun Sep Dec 08 09 09 09 09 Leverage 34% 34% 27% 23% 23%
Slide 41: Teva's dividend history
Teva’s dividend history 41 $ million NIS / share 17% increase from Q3’09 200 0.75 55% increase from Q3’08 0.7 180 0.6 0.65 160 140 0.55 120 0.45 0.4 0.45 100 173 80 134 141 0.35 127 126 60 106 95 97 90 75 73 79 0.25 40 20 0.15 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 D
Slide 42: TRA PHARAACEITICAL BELETHIEE LTD.
10341 TRA PHARAACEITICAL BELETHIEE LTD.