Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q1 2021 Earnings Presentation
37 slides from Teva Pharmaceutical Industries's earnings presentation, Apr 28, 2021
Slide 1: First Quarter 2021 Results
Teva Pharmaceutical Industries Ltd. First Quarter 2021 Results April 28, 2021
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: Q1 2021 Financial Highlights
Q1 2021 Financial Highlights − Revenues of $4 billion − Adjusted EBITDA of $1.2 billion − GAAP diluted EPS of $0.07; Non-GAAP diluted EPS of $0.63 − Net debt reduced to $23.2 billion − 2021 outlook reaffirmed |4|
Slide 5: Revenue Development
Revenue Development $ millions 4,468 4,454 4,357 4,149 4,177 4,093 332 344 307 3,978 3,982 317 342 314 3,870 578 565 316 572 289 335 521 582 565 529 490 488 1,184 1,237 1,402 1,264 1,183 1,163 1,214 1,001 1,116 2,373 2,300 2,047 2,071 2,051 2,082 2,047 2,017 1,989 Other Activities International Mark
Slide 6: AUSTEDO
AUSTEDO® AUSTEDO® Revenues By Quarter AUSTEDO® TRx Count Per Quarter Highlights ($ million) 185 U.S. sales of $146 million in Q1 40,000 161 168 2021, an increase of ~20% vs. Q1 35,101 2020 35,000 146 136 30,000 Decline from Q4 2020 attributable 122 to volume of orders in December 25,000 105 vs.
Slide 7: AJOVY Maintaining U.S. NBRx Share
AJOVY® Maintaining U.S. NBRx Share AJOVY® Weekly Normalized TRx Count AJOVY® Monthly NBRx Share* Highlights 20,000 • Net global sales of $48 million in Q1 18,000 2021: • North America - $31 million 16,000 25% 25% • Europe - $16 million 14,000 24%24%25%24% 24% 22% 23% • International Markets - $1 mil
Slide 8: AJOVY Increasing Market Share in Europe
AJOVY® Increasing Market Share in Europe EU anti-CGRP Monthly Volumes AJOVY® EU Monthly Volume market share Highlights • Anti-CGRP market in Europe continues to grow in volume and shows 108% 70,000 MAT 21.6% 60,000 19.8% • AJOVY has been launched in 19 18.4% European markets with full 17.9% 50,000 1
Slide 9: Truxima - Key Teva Biosimilar Continues Growth
Truxima® - Key Teva Biosimilar Continues Growth Truxima Market Shares within rituximab IV, Q1 2021 Highlights 28 26.2% 26 24.4% Reached 26% market share 23.4% in March 2021 24 22.2% 22 20.6% 19.5% 22.7% Remains only rituximab 20 Volume Market Share in % 20.1% 20.6% biosimilar indicated for 18 16
Slide 10: Teva Specialty & Biosimilar Product Pipeline
Teva Specialty & Biosimilar Product Pipeline by development stage – April 2021 Under Regulatory Pre-clinical Phase 1 Phase 2 Phase 3 Pre Submission Review TEV-54242 Fremanezumab2 Fremanezumab2 Fasinumab3 Digihaler® Biosimilar to Humira® TEV-54142 Oncology Status Migrainosus Fibromyalgia Osteoarthrit
Slide 11: Operating Margin Expansion
Operating Margin Expansion Non-GAAP operating margin % 28.5% 28.0% 28.0% 27.8% 27.5% 27.0% 27.1% 26.8% 26.5% 26.3% 25.9% Q1’21 26.0% 25.5% 25.0% 24.5% 24.5% 24.0% 2017 2018 2019 2020 2021 Guidance* 2023 Target | 11 | * Estimated margin based on 2021 guidance
Slide 12: 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 13: ESG is Everyone's Business at Teva
ESG is Everyone’s Business at Teva
Slide 14: Eli Kalif, EVP & Chief Financial Officer
Eli Kalif EVP & Chief Financial Officer
Slide 15: Q1 2021 Summary
Q1 2021 Summary $ millions, except EPS Q1 2021 Q1 2020 Q1 2021 Q1 2020 GAAP Non-GAAP Revenues 3,982 4,357 3,982 4,357 Operating income 434 191 1,077 1,244 Net income attributable to Teva 77 69 699 835 0.07 0.06 0.63 0.76 Earnings per share ($)* 1,107 million 1,096 million 1,107 million 1,096 million
Slide 16: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q1 2021 Comments Amortization 242 Quarterly run-rate Impairment of assets, and accelerated depreciation 134 Mainly U.S. IPR&D and product rights Legal settlements 104 Mainly related to a provision for a potential patent settlement Restructuring 81 Financial Expenses 6
Slide 17: Q1 2021 Non-GAAP Summary
Q1 2020 Non-GAAP Summary $ billions, except EPS Q1 2021 Q1 2020 Change Revenues 4.0 4.4 -9% 2.1 2.3 Gross profit 0.8% 53.8% 53.1% 1.1 1.2 Operating income -1.5% 27.1% 28.5% EBITDA 1.2 1.4 -12% Net income 0.7 0.8 -16% 0.63 0.76 EPS ($) 1,107 million 1,096 million -17% shares shares Free cash flow* 0.
Slide 18: Spend Base – Q1 2021 vs. Q1 2020
Spend Base – Q1 2021 vs. Q1 2020 -209 (-7%) $ millions 3,114 2,905 2,046 1,838 (66%) (63%) 1,068 1,067 COGS (34%) (37%) OPEX Q1 2020 Q1 2021 Revenues 4,357 3,982 GP% 53.1% 53.8% OP% 28.5% 27.1% | 18 |
Slide 19: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 974 551 551 582 506 471 360 168 59 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 | 19 |
Slide 20: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions Net Debt 24.3 23.9 23.8 23.7 23.2 4.9 4.9 4.8 4.9 4.7 EBITDA MAT Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net Debt / EBITDA MAT* 4.95 4.90 4.92 4.83 4.90 Leverage 64% 64% 71% 70% 69% | 20 | * Teva's Net Debt/EBITDA MAT covenant ratio limits are 5.5x for H1 2021 and 5
Slide 21: Reaffirming 2021 Non-GAAP Outlook
Reaffirming 2021 Non-GAAP Outlook $ billions, except EPS 2021 Outlook 2020 Actual Revenues* 16.4 - 16.8 16.7 COPAXONE ~$1,050 million $1,337 million AUSTEDO ~$950 million $638 million AJOVY ~$300 million $183 million Operating Income 4.3 - 4.6 4.4 EBITDA 4.8 - 5.1 4.9 EPS ($) 2.50 - 2.70 2.57 1,105
Slide 22: Q&A
Q&A
Slide 23: Additional Information
Additional Information teva
Slide 24: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q1 2021 Q1 2020 $ millions, except EPS Q1 2021 Q1 2020 Change Margins Margins Revenues 3,982 4,357 (9%) COGS 2,104 52.8% 2,294 52.7% (8%) Gross profit 1,878 47.2% 2,063 47.3% (9%) R&D 254 6.4% 221 5.1% 15% S&M 585 14.7% 613 14.1% (5%) G&A 290 7.3% 304 7.0% (5%) Legal
Slide 25: Q1 2021 Foreign Exchange Impact
Q1 2021 Foreign Exchange Impact $ millions Q1 2021 Q1 2020 Diff FX Effect Diff net FX Revenues 3,982 4,357 (376) 74 (449) Operating income (loss) 434 191 242 (14) 256 GAAP Operating income 1,077 1,244 (167) (10) (156) Non-GAAP | 25 |
Slide 26: Net Revenue and Profitability (Non-GAAP)
Net Revenue and Profitability (Non-GAAP) $ millions 4,468 4,454 4,357 4,149 4,177 4,093 3,978 3,982 3,870 51.8% 52.4% 51.4% 50.6% 53.1% 52.0% 52.4% 52.3% 53.8% 24.6% 24.2% 25.7% 23.8% 28.5% 25.3% 25.8% 25.6% 27.1% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net Revenues G
Slide 27: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 North America Segment 2,082 2,047 2,017 2,300 1,989 Generic products 952 923 928 1,206 1,053 AJOVY® 29 34 35 36 31 ® AUSTEDO 122 161 168 185 146 BENDEKA ®/TREANDA ® 105 103 105 102 91 ® COPAXONE 198 238 236 213 164 P
Slide 28: Profits and EPS (Non-GAAP)
Profits and EPS (Non-GAAP) $ millions, EPS in $ 1,244 1,140 1,061 1,077 1,019 1,011 1,051 1,025 979 835 683 753 699 654 653 637 605 637 0.76 0.68 0.63 0.60 0.60 0.58 0.62 0.55 0.58 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net Income Operating Profit EPS | 28 |
Slide 29: Spend Base Trend (Non-GAAP)
Spend Base Trend (Non-GAAP) $ millions Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 COGS 2,046 1,859 1,894 2,126 1,838 S&M 570 559 566 627 549 R&D 221 233 233 254 244 G&A 290 245 269 312 278 Other income (13) (6) (8) (5) (5) Total 3,114 2,891 2,953 3,313 2,905 | 29 |
Slide 30: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions -167 (-13%) -156 Net of FX (-13%) 27 -164 -34 5 1,244 1,077 Q1-20 North America Europe International Markets Other Activities Q1-21 | 30 |
Slide 31: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions 1,244 36 (3%) 1,140 156 (13%) 33 (3%) 1,077 1,025 96 (8%) 41 (4%) 979 28 (3%) 66 (7%) 122 (11%) 125 (12%) 273 97 (10%) )24%( 502 )40%( 312 338 244 )31%( )25%( )30%( 738 550 573 560 )65%( 577 )44%( )59%( )55%( )54%( Other Activities International Markets
Slide 32: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA $ millions 1,375 1,277 1,206 1,108 1,153 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 | 32 | * Adjusted EBITDA is defined as operating income excluding depreciation and amortization expenses and certain other items
Slide 33: Q1 2021 Adjusted EBITDA to Free Cash Flow
Q1 2021 Adjusted EBITDA to Free Cash Flow $ millions (1,147) (-95%) (263) (139) (308) 1,206 (189) (130) (49) 138 (150) 59 (533) 476 (405) Adjusted Interest Tax payments AP AR Inventory Other Securitization* Operating Securitization Asset sales; Free EBITDA payments, Trade & net cash flow reclass Cap
Slide 34: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions Mar 31, 2021 Dec 31, 2020 Diff Cash and Cash Equivalents 1.7 2.2 (0.4) AR Trade 4.6 4.6 (0.0) Pre-paid Expenses and Other Current Assets 1.7 1.8 (0.2) Inventory 4.4 4.4 0.0 Fixed Assets 6.1 6.3 (0.2) Intangible Assets 8.4 8.9 (0.5) Goodwill 20.3 20.6 (0.3) Other
Slide 35: Q1 2021 Debt Movements
Q1 2021 Debt Movements $ billions -0.5 -0.4 -1.7 25.9 25.0 23.2 Dec 31, Convertible Notes FX Mar 31, Cash balance Mar 31, 2020 Redemption 2021 2021 Gross Debt Gross Debt Net Debt | 35 |
Slide 36: Teva 2020 ESG Performance
Teva 2020 ESG Performance 2020 Score 2020 Sector Ranking Previous Score Previous Sector Ranking 65 Top 10% 63 Top 14% 36 Top 30% 33 Top 45% A- Top 38% B Top 64% C Bottom 18% Not scored Not scored C Top 40% D+ N/A 3.4 Top 29% 3.9 Top 12% B Bottom 22% B Bottom 22% 56 Top 23% 56 Top 17% 22 Top 22% 9 To
Slide 37: Slide 37
Teva Pharmaceutical Industries — Q1 2021 Earnings Presentation on 6ix