AstraZeneca PLC · LSE:AZN
AstraZeneca — Debt Investor Presentation (February 2019)
44 slides from AstraZeneca's debt investor presentation, Feb 21, 2019
Slide 1: Fixed-Income Investor Update
Fixed-Income Investor Update 21 February 2019
Slide 2: Forward-looking statements
Forward-looking statements In order, among other things, to utilise the 'safe harbour' provisions of the US Private Securities Litigation Reform Act 1995, we are providing the following cautionary statement: this document contains certain forward-looking statements with respect to the operations, pe
Slide 3: Disclaimer and Non-GAAP Measures
Disclaimer This presentation is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which an offer, solicitation, or sale is unlawful. Non-GAAP Measures This presentation contains financial meas
Slide 4: Key messages
Key messages Delivering on our promises – returned to sustainable growth Pipeline continues to deliver – underpinning sales growth Continued strong focus on cash generation and cost discipline Finance priorities – sales and profit growth, cash generation and deleveraging 4
Slide 5: Business Update
AstraZeneca @ What science can do
Slide 6: What we set out to do
What we set out to do…. Strategic priorities from 2013 Achieve 1 Return 2 Be a great 3 scientific to growth place to work leadership 6
Slide 7: AstraZeneca returned to sustainable growth in sales
AstraZeneca returned to sustainable growth in sales Pipeline-driven transformation has delivered on the promises Business and financials Product sales increased by 8% in Q4 and by 4% in the year • Strong performance of New Medicines1 (+81%) and $2.8bn incremental sales vs. 2017 • Oncology (+49%), Ne
Slide 8: Sales: inflection point reached
Sales: inflection point reached Strong sales growth set to continue Encouraging return to growth Key medicines driving growth in 2019 Tagrisso Imfinzi ongoing launches in ongoing launches in EGFRm NSCLC 1L unresect., StageIII NSCLC Product sales growth, percent Lynparza ongoing launches of tablet in
Slide 9: Sales: New Medicines drove return to growth
Sales: New Medicines drove return to growth FY 2018: $2.8bn in incremental sales; growth of 81% $m Q4 2018: FY 2018: +$1.0bn +$2.8bn 1,000 900 incremental sales of New Medicines incremental sales of New Medicines 800 compared to Q4 2017 compared to FY 2017 700 600 500 400 300 200 100 0 Calquence Bri
Slide 10: Sales: growth across all main therapy areas
Sales: growth across all main therapy areas Oncology, New CVRM, China all performed strongly Q4 2018 % product FY 2018 % product % change % change $m sales $m sales Product sales 5,768 8 100 21,049 4 100 Oncology 1,767 61 31 6,028 49 29 New CVRM 1,103 11 19 4,004 12 19 Respiratory 1,362 5 24 4,911 3
Slide 11: New, simplified organisation
New, simplified Oncology organisation Oncology Research & Development Increase focus on Manufacturing Business main therapy areas Emerging markets & Japan Agile decision-making and resource allocation BioPharma Collaboration between BioPharma R&D and business 11
Slide 12: Oncology: Establishing new standards of care
Oncology Establishing new standards of care Total Oncology sales New medicines Lynparza, Tagrisso, $m +49% FY; +61% Q4 Imfinzi and Calquence added $1.9bn 2,000 • Tagrisso quickly moving ahead to become the no. 1 1,750 1,500 AstraZeneca medicine in 2019 1,250 1,000 • Imfinzi strong US uptake; ex-US o
Slide 13: New CVRM and Respiratory
New CVRM and Respiratory Strong businesses with several blockbusters, now and in the future Combined sales: Strong franchises and $m +7% FY, +8% Q4 encouraging launches 2,500 • Farxiga: leading SGLT2 inhibitor with differentiated CV1 2,250 outcomes data, global growth and more data next year 2,000 1
Slide 14: Emerging markets
Emerging markets China consistently outperforming China continued very strongly (+25%) Sales continued to grow ahead of the long-term Ex-China growth (+1%) impacted by divestments commitment of mid to high single-digit growth 12% 12% 16% Emerging markets • Ex-China growth +1% Emerging markets 13% 8%
Slide 15: 2019 guidance confirms the growth outlook
2019 guidance confirms the growth outlook Product sales Core EPS A high single-digit percentage increase $3.50 to $3.70 Guidance at CER. 15
Slide 16: Late-stage pipeline events in the 2019, 2020 timeframe
Late-stage pipeline events in the 2019, 2020 timeframe Busy news flow continues; underpinning consistent sales growth H1 2019 H2 2019 2020 Regulatory Tagrisso - EGFRm NSCLC 1L (CN) Imfinzi - unresectable, Stage III NSCLC (CN) - Lynparza - breast cancer (EU) Lynparza - ovarian cancer 1L(SOLO-1)(EU, J
Slide 17: What's next?
‘What’s next’? Rich mid-stage pipeline; selected new molecular entities underway Oncology New CVRM Respiratory capivasertib (AKT1 inhibitor) monalizumab(NKG2a5 mAb6) cotadutide(GLP-110/glucagon PT027 (SABA/ICS16) breast, prostate cancers head & neck, colorectal co-agonist) - NASH11 asthma Phase III
Slide 18: Financial update
AstraZeneca What science can do Financial update
Slide 19: Reported profit and loss
Reported profit and loss FY 2018 % total Q4 2018 % total % change % change $m revenue $m revenue Product sales 21,049 4 95 5,768 8 90 Externalisation revenue 1,041 (55) 5 649 126 10 Total revenue 22,090 (2) 100 6,417 14 100 Gross margin 76.6% (3) pp1 - 71.6% (6) pp - Operating expenses2 16,294 (1) 7
Slide 20: Core profit and loss
Core profit and loss FY 2018 % total Q4 2018 % total % change % change $m revenue $m revenue Product sales 21,049 4 95 5,768 8 90 Externalisation revenue 1,041 (55) 5 649 126 10 Total revenue 22,090 (2) 100 6,417 14 100 Gross margin 79.5% (2) pp - 78.6% (1) pp - Operating expenses1 14,248 4 64 3,995
Slide 21: Externalisation revenue
Externalisation revenue Q4 underpinned by Merck collaboration Significant Q4 revenue highlights the importance Highlights from $m and ongoing nature of the Merck collaboration externalisation revenue 1,600 1,400 • Significant Q4 externalisation revenue from Merck 1,200 collaboration 1,000 • $400m op
Slide 22: Total core operating expenses increased by 4%
Total core operating expenses increased by 4% Growth in line with sales; operating leverage from 2019 Core R&D: benefitting from productivity initiatives Operating expenses remain in $m focus, with leverage from 2019 1,500 • Core R&D expenses • FY 2018: declined by 3%. Continued high activity 0 leve
Slide 23: Financial priorities
Financial priorities Deleveraging / Sales dividend growth growth Cash-flow Profit growth growth 23
Slide 24: Cash flow: Net debt stable in the year
Cash flow Net debt stable in the year Development in net debt position Other key cash flow observations $bn • Net cash flow from operations reduced 12.7 7.1 3.5 13.0 • Provisions related to legal settlements 0.7 1.0 0.6 1.5 • Launch support for new medicines • Net cash inflow before financing activi
Slide 25: Net debt position
Net debt position 31-Dec-18 31-Dec-17 $m $m Gross debt (19,113) (17,807) Cash & cash equivalents 4,831 3,324 Other investments 895 1,300 Net derivative financial 384 504 instruments Closing net debt1 (13,003) (12,679) 1. Net debt is a non-GAAP measure. The equivalent GAAP measure to net debt is ‘lia
Slide 26: Liquidity, debt and rating summary
Liquidity, debt and rating summary • Strong liquidity at 31 December 2018 ➢ Group cash and investments of $5.7bn ➢ Undrawn $4.1bn committed bank facilities ($3.4bn of which mature in 2022) • Access to diverse sources of funding through US and European debt programme, USCP programme Rating Utilisatio
Slide 27: Smooth bond maturity profile with ten-year average life
Smooth bond maturity profile with ten-year average life Debt Maturity Profile at 31 December 20181 3,000 2,500 2,000 $m 1,500 1,000 500 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2031 2037 2042 2045 2048 USD EUR GBP Commercial Paper Overdrafts and bank collateral 1 Notional bond values
Slide 28: Summary
Astrazeneca What science can do Summary
Slide 29: Key messages
Key messages Delivering on our promises – returned to sustainable growth Pipeline continues to deliver – underpinning sales growth Continued strong focus on cash generation and cost discipline Finance priorities – sales and profit growth, cash generation and deleveraging 29
Slide 30: Fixed-Income Investor Update
Fixed-Income Investor Update 21 February 2019
Slide 31: Appendix
AstraZeneca What science can do Appendix
Slide 32: Geographic growth
Geographic growth Emerging markets continued their strong performance 25% China 18% of Europe 10% Product Sales US 21% of Product Sales Japan 11% 33% of 11% 10% of Product Product Sales Sales Emerging Rest of Markets World (ex-China) 1% Established 15% of (ex-Japan) 6% Product Sales 4% of FY 2018 Re
Slide 33: Lung cancer: Tagrisso
Lung cancer: Tagrisso 1st-line standard of care in US, JP; EU + RoW launches underway Strong performance in Worldwide approvals: >80 countries (2nd- $m all markets: +98% in Q4 line use) and ~60 countries (1st-line use) 700 600 • US +115% • Established RoW +43% Most-prescribed medicine in 1st- Japan
Slide 34: Lung cancer: Imfinzi
Lung cancer: Imfinzi Strong uptake; US sales increased US sales increased PACIFIC (unresectable, Stage III US patient infusions $m NSCLC) becoming new SoC1 continue to increase 300 900 • ~40 global approvals obtained 800 US, average daily patient infusions 250 • Sales $633m; $262m in Q4 700 Lung can
Slide 35: Lynparza
Lynparza Leading PARP inhibitor treating more patients Six quarters of strong Leading PARP inhibitor approved in >60 countries $m growth: +113% in Q4 across indications in ovarian and breast cancer 250 • US +145% • Established RoW $61m Broad label in 2nd-line ovarian Successful ovarian and breast 20
Slide 36: Haematology: Calquence and Lumoxiti
Haematology: Calquence and Lumoxiti Building momentum in US; global MCL expansion underway Calquence highlights Lumoxiti $m 30 • Sales $62m, US only • First sales recorded in Q4 2018 25 • Continued good uptake • 3rd-line hairy cell leukaemia ~40% BTK1 inhibitor new-patient (HCL); small indication wi
Slide 37: New CVRM
New CVRM Blockbusters Farxiga and Brilinta sustained strong performances Good Diabetes growth, with Q4 reduced Continued growth $m by US gross-to net adjustments in 2017 $m in Brilinta sales Farxiga +30% • Brilinta +21%: growth across all • US (+21%); market and SGLT2 major regions; Q4 benefit of 1,
Slide 38: Respiratory
Respiratory Fasenra and Pulmicort sales offsetting the Symbicort performance Respiratory delivered Symbicort, leading ICS+LABA Fasenra sales now $m improved performance medicine globally by volume annualising at $0.5bn +3% 1,500 5,000 +5% +3% US -6% US $218m, with $89m in Q4 +4% • Symbicort (-22%);
Slide 39: 2018 year-end pipeline update
2018 year-end pipeline update Significant news flow supports sustainable growth Lynparza Fasenra Lynparza Imfinzi Lynparza Imfinzi Lynparza Tagrisso Lumoxiti Lynparza breast cancer severe asthma ovarian cancer 2L unr. SIII NSCLC breast cancer unr. SIII NSCLC ovarian cancer 2L EGFRm NSCLC HCL 3L ovar
Slide 40: Readiness for the UK leaving the EU (Brexit)
Readiness for the UK leaving the EU (Brexit) Significant preparations to handle different scenarios Safeguarding access to Securing product medicines for patients supply chain • EU medicines testing standards • Additional stock moved to EU accepted in the UK if no deal/no distribution centres transi
Slide 41: FY 2018 Reconciliation of Reported to Core Financial Measures
FY 2018 Reconciliation of Reported to Core Financial Measures Intangible Asset Diabetes Reported Restructuring Other1 Core2 Amortisation & Alliance Impairments $m $m $m $m $m $m Gross Profit 17,154 432 187 - - 17,773 Distribution Expense (331) - - - - (331) R&D Expense (5,932) 94 572 - - (5,266) SG&
Slide 42: Q4 2018 Reconciliation of Reported to Core Financial Measures
Q4 2018 Reconciliation of Reported to Core Financial Measures Intangible Asset Diabetes Reported Restructuring Other1 Core2 Amortisation & Alliance Impairments $m $m $m $m $m $m Gross Profit 4,780 355 48 - - 5,183 Distribution Expense (93) - - - - (93) R&D Expense (2,012) (1) 547 - - (1,466) SG&A Ex
Slide 43: Prudent treasury risk-management policies
Prudent treasury risk-management policies The Company operates with a centralised Treasury structure so that key Treasury risks are managed at a Group level. Investment policy • Security and liquidity • Financial counterparty limits Foreign Exchange Policy • Foreign Exchange exposures managed centra
Slide 44: Use of AstraZeneca presentation slides
Use of AstraZenca presentation slides This presentation is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which an offer, solicitation, or sale is unlawful. The presentation slides (“AstraZ
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