Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q1 2022 Earnings Presentation
37 slides from Teva Pharmaceutical Industries's earnings presentation, May 3, 2022
Slide 1: First Quarter 2022 Results
Teva Pharmaceutical Industries Ltd. First Quarter 2022 Results May 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 $3.7 billion − AUSTEDO® – Prescriptions continue to grow − Adjusted EBITDA of $1.1 billion − AJOVY® – Market share increased to 30% in Europe and 24% in the U.S. − GAAP diluted Loss Per Share of $0.86; Non-GAAP diluted EPS of $0.55 − Europe – Generics and
Slide 5: Opioid Litigation Updates
Opioid Litigation Updates Individual State Settlements - Rhode Island (March 21, 2022) - $21 million over 13 years, plus attorneys’ fees and costs, plus $78.5 million in generic Narcan® spray and Suboxone® at WAC, including state and all subdivisions - Florida (March 30, 2022) - $177 million over 15
Slide 6: Revenue Development
Revenue Development $ millions 4,454 4,357 307 344 4,100 3,978 3,982 3,910 3,887 3,870 302 565 316 572 289 298 262 3,661 335 527 275 529 490 485 488 530 492 1,237 1,402 1,116 1,214 1,268 1,001 1,184 1,220 1,156 2,300 2,082 2,047 2,017 1,989 1,943 2,003 Other Activities 1,875 1,737 International Mark
Slide 7: AUSTEDO
® AUSTEDO® AUSTEDO® U.S. Revenues By Quarter AUSTEDO® U.S. TRx Count Per Quarter Highlights ($ million) 282 50,000 ̶ U.S. sales of $154 million in Q1 44,668 45,000 2022, an increase of 6% vs. Q1 2021 40,000 201 185 35,000 168 174 ̶ ~45K prescriptions were 161 30,000 154 dispensed in Q1 2022 vs. 35K
Slide 8: AJOVY
AJOVY® AJOVY® U.S. QTR Normalized TRx AJOVY EU Monthly Volume market share Highlights 250,000 234,963 35.0% ̶ Net global sales of $72 million in Q1 2022: 30% ̶ North America - $36 million 30.0% 200,000 ̶ Europe - $30 million 25.0% ̶ International Markets - $6 million 150,000 20% 20.0% ̶ United State
Slide 9: Teva Specialty & Biosimilar Pipeline
Teva Specialty & Biosimilar Pipeline By development stage – as of April 20, 2022 Under Regulatory Preclinical Phase 1 Phase 2 Phase 3 Pre Submission Review TEV-56278 TEV-44749 TEV-48574 Fasinumab2 Digihaler® Biosimilar to Humira® TEV-56285 Inflammatory Bowel Oncology Schizophrenia Osteoarthritic Pai
Slide 10: Teva Biosimilars
Teva Biosimilars Humira® biosimilar (adalimumab) 13 biosimilars in development: Biosimilar portfolio • Settled entry date July 2023, pending FDA approval – 7 in-house programs addressing ~80% in value of • Potential differentiators: – 5 biosimilars with Alvotech biologic products going off • High co
Slide 11: Operating Margin Expansion
Operating Margin Expansion Non-GAAP operating margin % 28.5% 27.5% - 28.0% 28.0% 28.0% 27.8% 27.7% 27.7% 27.5% Q1-22 27.0% 26.5% 26.3% 26.0% 25.9% 25.5% 25.0% 24.5% 24.5% 24.0% 2017 2018 2019 2020 2021 2022 Guidance* 2023 Target | 11 | * Estimated margin based on 2022 guidance
Slide 12: Net Debt Development
Net Debt Development $ billions $36.0 $34.0 $34.0 $32.0 $30.0 $28.0 $26.0 $24.0 $22.0 $20.7 $20.0 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 | 12 |
Slide 13: Our upcoming 2021 ESG Progress Report demonstrates further integration with business strategy
Our upcoming 2021 ESG Progress Report demonstrates further integration with business strategy and increased accountability Executives’ $5B sustainability- 13 ambitious targets compensation linked linked bond to select ESG targets Further alignment with New disclosures, Strengthened ESG leading repor
Slide 14: 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 15: Eli Kalif, EVP & Chief Financial Officer
Eli Kalif EVP & Chief Financial Officer
Slide 16: Q1 2022 Summary
Q1 2022 Summary $ millions, except EPS Q1 2022 Q1 2021 Q1 2022 Q1 2021 GAAP Non-GAAP Revenues* 3,661 3,982 3,661 3,982 Operating (loss) income (713) 434 1,013 1,077 Net income (loss) attributable to (955) 77 609 699 Teva (0.86) 0.07 0.55 0.63 Earnings (loss) per share ($)** 1,107 million 1,107 milli
Slide 17: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q1 2022 Comments Legal settlements 1,124 Mainly related to an update of the estimated opioid settlement provision Amortization 200 Quarterly run-rate Impairment of long-lived assets 165 Mainly product rights Restructuring 57 Contingent Consideration 33 Equity Compensa
Slide 18: Q1 2022 Non-GAAP Summary
Q1 2022 Non-GAAP Summary $ billions, except EPS Q1 2022 Q1 2021 Change Revenues* 3.7 4.0 (8%) 2.0 2.1 (7%) Gross profit 54.2% 53.8% 0.4% 1.0 1.1 (6%) Operating income 27.7% 27.1% 0.6% Adjusted EBITDA 1.1 1.2 (6%) Net income attributable to Teva 0.6 0.7 (13%) 0.55 0.63 (0.08) EPS ($) 1,112 million 1,
Slide 19: Spend Base
Spend Base $ millions -257 (-9%) -183 Net of FX 2,905 2,648 1,838 (63%) 1,675 (63%) 1,067 973 COGS (37%) (37%) OPEX Q1 2021 Q1 2022 Revenues 3,982 3,661 GP% 53.8% 54.2% OP% 27.1% 27.7% | 19 |
Slide 20: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 795 716 625 582 551 506 471 117 59 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 | 20 |
Slide 21: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions 23.2 22.7 21.7 Net Debt 20.9 20.7 4.7 4.8 4.8 4.9 4.8 EBITDA MAT Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Net Debt / EBITDA MAT* 4.90 4.73 4.51 4.25 4.29 Leverage 69% 69% 67% 67% 69% | 21 | *Teva's Net Debt/EBITDA MAT covenant ratio limits are 4.5x for Q2 and Q3 2022
Slide 22: 2022 Non-GAAP Outlook
2022 Non-GAAP Outlook $ billions, except EPS May 2022 Outlook February 2022 Outlook 2021 Actual Revenues 15.4 – 16.0 15.6 – 16.2 15.9 COPAXONE ($m) ~750 ~850 1,005 AUSTEDO ($m) ~1,000 ~1,000 808 AJOVY ($m) ~400 ~400 313 Operating Income 4.2 – 4.5 4.2 – 4.5 4.4 EBITDA 4.7 – 5.0 4.7 – 5.0 4.9 2.40 – 2
Slide 23: Q&A
Q&A
Slide 24: Additional Information
Additional Information teva
Slide 25: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q1 2022 Q1 2021 $ millions, except EPS Q1 2022 Q1 2021 Change Margins Margins Revenues 3,661 3,982 (8%) COGS 1,921 52.5% 2,104 52.8% (9%) Gross profit 1,740 47.5% 1,878 47.2% (7%) R&D 225 6.2% 254 6.4% (11%) S&M 584 15.9% 585 14.7% 0% G&A 296 8.1% 290 7.3% 2% Legal se
Slide 26: Q1 2022 Foreign Exchange Impact
Q1 2022 Foreign Exchange Impact $ millions Q1 2022 Q1 2021 Diff FX Effect Diff net FX Revenues 3,661 3,982 (321) (133) (187) Operating income (loss) (713) 434 (1,147) (56) (1,091) GAAP Operating income 1,013 1,077 (64) (59) (5) Non-GAAP | 26 |
Slide 27: Net Revenue and Profitability (Non-GAAP)
Net Revenue and Profitability (Non-GAAP) $ millions 4,454 4,357 4,100 3,978 3,982 3,870 3,910 3,887 3,661 53.1% 52.4% 53.8% 53.3% 53.6% 56.1% 54.2% 52.0% 52.3% 28.5% 27.1% 26.8% 30.4% 27.7% 25.3% 25.8% 25.6% 26.4% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Net Revenues G
Slide 28: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 North America Segment 1,989 1,943 1,875 2,003 1,737 Generic products 1,053 951 859 905 899 AJOVY® 31 46 46 53 36 AUSTEDO® 146 174 201 282 154 BENDEKA®/TREANDA® 91 106 95 93 82 COPAXONE® 164 152 133 129 86 Anda 289 31
Slide 29: Profits and EPS (Non-GAAP)
Profits and EPS (Non-GAAP) $ millions, EPS in $ 1,244 1,248 1,140 1,077 1,025 1,034 1,042 979 1,013 835 854 753 699 651 651 605 637 609 0.76 0.68 0.77 0.55 0.58 0.63 0.59 0.59 0.55 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Net Income Operating Profit EPS | 29 |
Slide 30: Spend Base Trend (Non-GAAP)
Spend Base Trend (Non-GAAP) Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 $ millions Act Act Act Act Act COGS 1,838 1,826 1,804 1,798 1,675 S&M 549 582 567 600 552 R&D 244 243 217 229 221 G&A 278 231 275 244 252 Other income (5) (6) (18) (19) (52) Total 2,905 2,876 2,845 2,852 2,648 | 30 |
Slide 31: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions -$64m (-6%) -$5m Net of FX 0% 11 (175) 57 43 1,077 1,013 Q1-21 North America Europe International Markets Other Activities Q1-22 | 31 |
Slide 32: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions 1,248 29 (2%) 1,077 131 (10%) 1,034 1,042 1,013 41 (4%) 47 (5%) 38 (4%) 122 (11%) 51 (5%) 123 (12%) 152 (15%) 420 (34%) 179 (18%) 338 (31%) 343 (33%) 394 (38%) 381 (38%) 668 577 521 (54%) (54%) 458 402 Other Activities (50%) (44%) (40%) International Ma
Slide 33: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA* $ millions 1,373 1,206 1,162 1,170 1,135 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 | 33 | * Adjusted EBITDA is defined as operating income excluding depreciation and amortization expenses and certain other items
Slide 34: Q1 2022 Adjusted EBITDA to Free Cash Flow
Q1 2022 Adjusted EBITDA to Free Cash Flow $ millions (1,018) (90%) (217) (200) (95) 1,135 (220) (66) 18 (157) (386) 305 117 (49) Adjusted Interest Tax payments AR Inventory AP & Other Securitization* Operating Securitization Asset sales, Free EBITDA payments, cash flow reclass net; cash flow net Cap
Slide 35: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions Mar 31, 2022 Dec 31, 2021 Diff Cash and Cash Equivalents 2.2 2.2 0.0 AR Trade 4.3 4.5 (0.3) Pre-paid Expenses and Other Current Assets 2.0 2.1 (0.0) Inventory 4.0 3.8 0.2 Fixed Assets 5.9 6.0 (0.0) Intangible Assets 7.1 7.5 (0.3) Goodwill 20.0 20.0 (0.1) Other L
Slide 36: Q1 2022 Debt Movements
Q1 2022 Debt Movements $ Billions (0.1) (2.2) 23.0 22.9 20.7 Dec 31, FX March 31, Cash balance March 31, 2021 2022 2022 Gross Debt Gross Debt Net Debt | 36 |
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