Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q3 2022 Earnings Presentation
39 slides from Teva Pharmaceutical Industries's earnings presentation, Nov 3, 2022
Slide 1: Third Quarter 2022 Results
Teva Pharmaceutical Industries Ltd. Third Quarter 2022 Results November 3, 2022
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: Highlights
Highlights Financial Business − Revenues of $3.6 billion − AUSTEDO® – 30% U.S. revenue growth; on track to reach − Adjusted EBITDA of $1.1 billion ~$1 billion 2022 annual revenues − GAAP diluted Earning Per Share of $0.05; non- − AJOVY® – Continued growth in revenues and market share GAAP diluted EP
Slide 5: Opioid Litigation Updates
Opioid Litigation Updates ̶ Substantial progress toward a nationwide settlement: ̶ In July 2022, the parties reached an agreement in principle on the financial terms of a nationwide settlement similar in structure to the nationwide settlements of other defendants. ̶ During the third quarter of 2022,
Slide 6: Revenue Development
Revenue Development $ millions 4,454 344 4,100 3,978 3,982 3,910 3,887 302 3,786 316 572 289 298 262 3,661 257 3,595 527 275 241 529 490 485 530 454 492 475 1,237 1,116 1,214 1,268 1,184 1,220 1,171 1,156 1,069 2,300 2,017 1,989 1,943 1,875 2,003 1,904 1,809 Other Activities 1,737 International Mark
Slide 7: AUSTEDO
® AUSTEDO® AUSTEDO® Revenues By Quarter AUSTEDO® TRx Count Per Quarter Highlights ($ million) 282 60,000 260 ̶ U.S. sales of $260 million in Q3 2022, 51,236 an increase of 30% vs. Q3 2021 50,000 201 204 185 ̶ ~51K prescriptions were dispensed in 40,000 168 174 Q3 2022 vs. ~41K in Q3 2021, an 161 154
Slide 8: AJOVY
AJOVY® AJOVY® U.S. QTR Normalized TRx AJOVY EU Monthly Volume Market Share Highlights ̶ Net global sales of $93 million in Q3 2022: 300,000 ̶ North America - $57 million 253,751 ̶ Europe - $30 million 32.9% 250,000 ̶ International Markets - $6 million 200,000 28% ̶ United States 150,000 ̶ Monthly no
Slide 9: Operating Margin Expansion
Operating Margin Expansion Non-GAAP operating margin % 28.5% 28.0% 28.0% 27.8% 27.7% 27.5% 27.3% 27.0% 26.5% 26.3% Q3 YTD 2021 26.8% 26.0% 25.9% 25.5% 25.0% 24.5% 24.5% 24.0% 2017 2018 2019 2020 2021 Q3 YTD 2022 2023 Target |9|
Slide 10: Net Debt Development
Net Debt Development $ billions $34.0 $34.0 $32.0 $30.0 $28.0 $26.0 $24.0 $22.0 $20.0 $19.0 $18.0 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 | 10 |
Slide 11: Teva Specialty & Biosimilar Pipeline
Teva Specialty & Biosimilar Pipeline By development stage – as of October 31, 2022 Under Regulatory Preclinical Phase 1 Phase 2 Phase 3 Pre Submission Review TEV-56278 TEV-53408 TEV-48574 TEV-44749 Digihaler® Biosimilar to Humira® TEV-56285 Inflammatory Bowel Oncology Gastrointestinal Schizophrenia
Slide 12: Continued Improvement on ESG Ratings
Continued Improvement on ESG Ratings 2022 Score Previous Score 53 41 29.5 (medium risk) 31.1 (high risk) B (3.9) B (3.5) 42 37 3.7 3.6 | 12 |
Slide 13: 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(1)(3)(4) Revenue growth(5) margin(2)(3) EBITDA(3) 30% 2.0X 80% Committed to utilizing cash flow to pay down debt; we do not plan to raise equity (1) Free cash flo
Slide 14: Eli Kalif, EVP & Chief Financial Officer
Eli Kalif EVP & Chief Financial Officer
Slide 15: Q3 2022 Summary
Q3 2022 Summary $ millions, except EPS Q3 2022 Q3 2021 Q3 2022 Q3 2021 GAAP Non-GAAP Revenues* 3,595 3,887 3,595 3,887 Operating income 419 623 977 1,042 Net income attributable to Teva 56 292 658 651 0.05 0.26 0.59 0.59 Earnings per share ($)** 1,119 million 1,109 million 1,119 million 1,109 millio
Slide 16: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q3 2022 Comments Mainly related to an update of the opioids settlement provision as well as a Legal settlements and loss contingencies 195 provision related to the U.S. generic drug antitrust litigation Amortization 165 Quarterly run-rate Accelerated depreciation 45 I
Slide 17: Q3 2022 Non-GAAP Summary
Q3 2022 Non-GAAP Summary $ billions, except EPS Q3 2022 Q3 2021 Change Q3 YTD 2022 Q3 YTD 2021 Change Revenues(*)(**) 3.6 3.9 (8%) 11.0 11.8 (6%) 1.9 2.1 (9%) 6.0 6.3 (6%) Gross profit 53.0% 53.6% (0.6%) 53.9% 53.6% 0.3% 1.0 1.0 (6%) 3.0 3.2 (5%) Operating income 27.2% 26.8% 0.4% 27.3% 26.8% 0.5% Ad
Slide 18: Spend Base
Spend Base $ millions -594 (-7%) -212 Net of FX (-2%) 8,625 -227 (-8%) 8,032 -70 Net of FX (-2%) 2,845 2,618 5,467 (63%) 5,090 (63%) 1,804 1,689 (63%) (65%) 3,158 2,941 COGS 1,041 928 (37%) (37%) OPEX (37%) (35%) Q3 2021 Q3 2022 YTD 2021 YTD 2022 Revenues 3,887 3,595 11,778 11,041 GP% 53.6% 53.0% 53
Slide 19: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 795 716 685 625 506 471 301 117 59 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 | 19 |
Slide 20: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions 21.7 Net Debt 20.9 20.7 20.0 19.0 4.8 4.9 4.8 4.8 4.7 EBITDA MAT Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net Debt / EBITDA MAT* 4.51 4.25 4.29 4.16 4.02 Leverage 67% 67% 69% 69% 69% | 20 | *Teva's Net Debt/EBITDA MAT covenant ratio limits are 4.5x for Q1 2022 - Q3 2
Slide 21: 2022 Non-GAAP Outlook
2022 Non-GAAP Outlook $ billions, except EPS November 2022 Outlook July 2022 Outlook 2021 Actual Revenues* 14.8 – 15.4 15.0 – 15.6 15.9 COPAXONE ($m)* ~700 ~700 1,005 AUSTEDO ($m)* ~1,000 ~1,000 808 AJOVY ($m)* ~400 ~400 313 Operating Income 4.2 – 4.5 4.2 – 4.5 4.4 Adjusted EBITDA 4.7 – 5.0 4.7 – 5.
Slide 22: Q&A
Q&A | 22 |
Slide 23: Additional Information
Additional Information
Slide 24: Q3 YTD 2022 Summary
Q3 YTD 2022 Summary $ millions, except EPS Q3 YTD 2022 Q3 YTD 2021 Q3 YTD 2022 Q3 YTD 2021 GAAP Non-GAAP Revenues(*)(**) 11,041 11,778 11,041 11,778 Operating income (loss) (1,244) 1,638 3,010 3,153 Net income (loss) attributable to Teva (1,132) 576 2,021 2,001 (1.02) 0.52 1.81 1.81 Earnings (loss)
Slide 25: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q3 2022 Q3 2021 $ millions, except EPS Q3 2022 Q3 2021 Change Margins Margins Revenues 3,595 3,887 (8%) COGS 1,926 53.6% 2,093 53.8% (8%) Gross profit 1,669 46.4% 1,794 46.2% (7%) R&D 175 4.9% 222 5.7% (21%) S&M 539 15.0% 597 15.4% (10%) G&A 283 7.9% 291 7.5% (3%) Leg
Slide 26: Q3 YTD 2022 GAAP Income Statement
Q3 YTD 2022 GAAP Income Statement YTD 2022 YTD 2021 $ millions, except EPS YTD 2022 YTD 2021 Change Margins Margins Revenues 11,041 11,778 (6%) COGS 5,839 52.9% 6,234 52.9% (6%) Gross profit 5,203 47.1% 5,544 47.1% (6%) R&D 628 5.7% 723 6.1% (13%) S&M 1,716 15.5% 1,798 15.3% (5%) G&A 892 8.1% 822 7.
Slide 27: Q3 2022 Foreign Exchange Impact
Q3 2022 Foreign Exchange Impact $ millions Q3 2022 Q3 2021 Diff FX Effect Diff net FX Revenues 3,595 3,887 (292) (215) (77) Operating income 419 623 (204) (53) (152) GAAP Operating income 977 1,042 (65) (58) (7) Non-GAAP | 27 |
Slide 28: Net Revenue and Non-GAAP Profitability
Net Revenue and Non-GAAP Profitability $ millions 4,454 4,100 3,978 3,982 3,910 3,887 3,786 3,661 3,595 52.4% 53.8% 53.3% 53.6% 56.1% 54.2% 54.4% 53.0% 52.3% 27.1% 26.8% 30.4% 27.7% 26.9% 27.2% 25.8% 25.6% 26.4% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net Revenues Non
Slide 29: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 North America Segment 1,875 2,003 1,737 1,904 1,809 Generic products 859 905 899 1,026 806 AJOVY® 46 53 36 49 57 AUSTEDO® 201 282 154 204 260 BENDEKA®/TREANDA® 95 93 82 83 77 COPAXONE® 133 129 86 94 105 Anda 363 355
Slide 30: Non-GAAP Profits and EPS
Non-GAAP Profits and EPS $ millions, EPS in $ 1,248 1,140 1,077 1,019 1,025 1,034 1,042 1,013 977 854 753 754 699 651 651 658 637 609 0.58 0.68 0.63 0.59 0.77 0.68 0.59 0.55 0.59 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Non-GAAP Net Income Non-GAAP Operating Income Non
Slide 31: Non-GAAP Spend Base Trend
Non-GAAP Spend Base Trend $ millions Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 COGS 1,804 1,798 1,675 1,726 1,689 S&M 567 600 552 563 510 R&D 217 229 221 222 171 G&A 275 244 252 258 250 Other income (18) (19) (52) (3) (2) Total 2,845 2,852 2,648 2,766 2,618 | 31 |
Slide 32: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions -$65m (-6%) -$7m Net of FX (-1%) 18 -33 -41 -9 1,042 977 Q3-21 North America Europe International Markets Other Activities Q3-22 | 32 |
Slide 33: Q3 YTD 2022 Non-GAAP Operating Income
Q3 YTD 2022 Non-GAAP Operating Income $ millions -$143m (-5%) -$15m Net of FX (0%) -197 -12 10 55 3,153 3,010 YTD-21 North America Europe International Markets Other Activities YTD-22 | 33 |
Slide 34: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions 1,248 29 (2%) 131 (10%) 131 (10%) 1,042 1,013 1,019 977 38 (4%) 29 51 (5%) 55 (5%) 152 (15%) 420 95 (9%) 112 (3%) (34%) 179 (18%) (11%) 394 389 360 (38%) 381 (38%) (37%) (38%) 668 (54%) 481 477 458 402 Other Activities (44%) (47%) (49%) (40%) Internatio
Slide 35: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA* $ millions 1,373 1,170 1,135 1,134 1,089 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 | 35 | * Adjusted EBITDA is defined as non-GAAP net income (loss), excluding non-GAAP financial expenses, non-GAAP share in (profit) losses of associated companies, non-GAAP income taxes and n
Slide 36: Q3 2022 Adjusted EBITDA to Free Cash Flow
Q3 2022 Adjusted EBITDA to Free Cash Flow $ millions (404) (37%) 39 503 (528) (173) (110) 2 (122) (276) 262 1,089 685 543 Adjusted Interest Tax payments AR Inventory AP & Other Securitization* Operating Securitization Asset sales, Free EBITDA payments, cash flow reclass net; cash flow net Capex gros
Slide 37: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions Sep 30, 2022 Jun 30, 2022 Diff Cash and Cash Equivalents 2.2 2.1 0.2 AR Trade 3.7 4.5 (0.7) Pre-paid Expenses and Other Current Assets 1.6 1.6 0.1 Inventory 3.9 4.0 (0.2) Fixed Assets 5.6 5.7 (0.2) Intangible Assets 6.4 6.7 (0.3) Goodwill 18.4 18.8 (0.4) Other L
Slide 38: Q3 2022 Debt Movements
Q3 2022 Debt Movements $ billions 22.1 0.4 0.5 21.3 (2.2) 19.0 Jun 30, Debt repayment FX Sep 30, Cash balance Sep 30, 2022 2022 2022 | 38 |
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