Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q3 2017 Earnings Presentation
28 slides from Teva Pharmaceutical Industries's earnings presentation, Nov 2, 2017
Slide 1: Third Quarter 2017 Results
Teva Pharmaceutical Industries Ltd. Third Quarter November 2, 2017 2017 Results
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: Q3 2017 Results
Q3 2017 Results 3
Slide 4: Q3 2017 Summary
Q3 2017 Summary $ millions, except EPS Q3 2017 Q3 2016 Q3 2017 Q3 2016 GAAP Non-GAAP Revenues 5,610 5,563 5,610 5,563 Operating income 378 765 1,470 1,794 6.7% 13.8% 26.2% 32.2% Net income 595 412 1,077 1,364 attributable to Teva EPS ($) 0.52 0.35 1.00 1.31 1,017M shares 984M shares 1,017M shares 1,
Slide 5: Q3 2017 Non-GAAP Summary
Q3 2017 Non-GAAP Summary $ billions, except EPS Q3 2017 Q3 2016 Change Revenues 5.6 5.6 +1% Operating income 1.5 1.8 (18%) 26.2% 32.2% EBITDA 1.6 1.9 (16%) Net income 1.1 1.4 (21%) EPS ($) 1.00 1.31 (24%) 1,017M shares 1,044M shares Cash flow from operations 1.1 1.5 (24%) Free cash flow 0.9 1.2 (26%
Slide 6: Q3 2017 Non-GAAP Adjustments
Q3 2017 Non-GAAP Adjustments $ millions Q3 2017 Details Product rights and R&D assets primarily related to the Impairment 408 Actavis Generics acquisition ($351m) Amortization 357 Other R&D Expenses 150 Restructuring, acquisition and 103 integration expenses Other adjustments 93 Including the effect
Slide 7: Balance Sheet
Balance Sheet $ billions Sep 30, 2017 Jun 30, 2017 Diff Cash and Cash Equivalents 0.7 0.6 0.1 Other Financial assets 0.2 0.3 -0.1 AR Trade 7.4 7.3 0.1 Pre-paid Expenses and Other Current Assets 3.1 1.5 1.6 Inventory 5.1 5.1 - Fixed Assets 8.0 8.0 - Goodwill 39.4 40.0 -0.6 Intangible Assets 20.9 21.7
Slide 8: Balance Sheet
Balance Sheet $ billions Sep 30, 2017 Jun 30, 2017 Diff AP Trade 2.4 2.2 0.2 SR&A 7.7 7.6 0.1 AP Other 4.2 4.4 -0.2 Total Debt (ST+LT) 34.7 35.1 -0.4 Other Long Term Liabilities 6.9 7.5 -0.6 Minority 1.6 1.6 - Teva Shareholders’ Equity 28.7 28.0 0.7 Total Liabilities & Equity 86.1 86.4 -0.3 8 Totals
Slide 9: Q3 2017 Foreign Exchange & Venezuela Impact
Q3 2017 Foreign Exchange & Venezuela Impact $ millions Q3 2017 Q3 2016 Diff FX Effect Venezuela Revenues 5,610 5,563 47 74 (243) Operating income 378 765 (387) (7) (25) GAAP Operating income 1,470 1,794 (324) (2) (15) Non-GAAP In light of the political and economic conditions in Venezuela, we exclud
Slide 10: Quarterly EBITDA
Quarterly EBITDA $ billions 2.09 1.93 1.77 1.75 1.63 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 EBITDA is based on non-GAAP operating income (which excludes amortization and certain other items) and excludes depreciation expenses. 10
Slide 11: Cash Flow
Cash Flow $ millions Cash flow from 1,461 1,425 470 741 1,117 Operations 215 319 197 1,246 174 1,106 920 Asset Purchase, Net 198 567 Free Cash Flow* 272 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 * Proceeds from divestitures related to Actavis Generics were $1.7 billion in Q3 2016 and $0.7 billion in Q
Slide 12: Liquidity
Liquidity $ billions 36.9 35.8 34.6 35.1 34.7 Gross Debt 6.9 7.3 7.5 7.5 7.2 EBITDA MAT Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Net Debt/EBITDA 5.15 4.74 4.51 4.57 4.70 Leverage 50% 51% 49% 54% 53% Teva’s Net Debt/EBITDA covenants were amended to 5.0x until Q4 2018 , gradually decreasing from then o
Slide 13: Quarterly Revenues
Quarterly Revenues $ millions -169 299 -102 52 -80 47 5,563 5,610 Q3 - 16 US Gx EU & RoW Gx MS Specialty Specialty Other FX & VZ Q3 - 17 All data, except Fx and VZ, are net of the impact of foreign exchange fluctuations. 13
Slide 14: Copaxone revenues and US market shares
Copaxone® revenues and US market shares $ millions / % market share 1,061 1,015 970 1,023 987 1,200 35% 1,000 30% 187 180 186 185 188 25% 800 20% 600 15% 400 874 829 843 782 802 10% 200 5% 0 0% Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 US Ex-US US TRx MS* Copaxone® family US TRx MS* Copaxone® 40mg Market share
Slide 15: Quarterly Revenue Breakdown by Region
Quarterly Revenue Breakdown by Region $ millions 5,563 5,610 1,290 (23%) 1,109 (20%) ROW Europe US 1,512 (27%) 1,410 (25%) 2,863 (52%) 2,989 (53%) Q3-16 Q3-17 15
Slide 16: Quarterly Revenue Breakdown by Business Line
Quarterly Revenue Breakdown by Business Line $ millions 5,563 5,610 256 (4%) 569 (10%) Other 987 (18%) 1,047 (18%) Specialty MS Specialty 1,061 (19%) Generics 987 (18%) 3,259 (59%) 3,007 (54%) Q3-16 Q3-17 16
Slide 17: Quarterly Non-GAAP Operating Profit
Quarterly Non-GAAP Operating Profit $ millions -320 109 -30 -19 -65 1,794 1,470 Q3-16 Generics MS Specialty G&A Other, inc Fx Q3-17 17
Slide 18: Financial Outlook
Financial Outlook 18
Slide 19: Financial Outlook
Financial Outlook August 2nd Q4 2017 FY 2017 guidance Revenues 5.3 – 5.4 22.2 – 22.3 22.8 - 23.2 ($ billions) Non-GAAP EPS 0.70 – 0.80 3.77 – 3.87 4.30 – 4.50 ($) 1,017M shares 1,017M shares 1,017M shares Cash flow from operations 0.85 – 1.0 3.15 – 3.3 4.4 - 4.6 ($ billions) 19
Slide 20: Q&A
Q&A
Slide 21: Additional Information
Additional Information
Slide 22: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement $ millions, except EPS Q3-17 Q3-17 Q3-16 Q3-16 Change Margins Margins Revenues 5,610 5,563 +1% COGS 2,967 52.9% 2,762 49.6% +7% Gross profit 2,643 47.1% 2,801 50.4% (6%) R&D 545 9.7% 663 11.9% (18%) S&M 860 15.3% 940 16.9% (9%) G&A 330 5.9% 310 5.6% +6% Legal settleme
Slide 23: Quarterly Non-GAAP Income Statement
Quarterly Non-GAAP Income Statement $ millions, except EPS Q3-17 Q3-17 Q3-16 Q3-16 Change Margins Margins Revenues 5,610 5,563 +1% COGS 2,636 47.0% 2,170 39.0% +21% Gross profit 2,974 53.0% 3,393 61.0% (12%) R&D 381 6.8% 406 7.3% (6%) S&M 805 14.3% 889 16.0% (9%) G&A 318 5.7% 304 5.5% )5%) Operating
Slide 24: YTD Revenue Breakdown by Business Line
YTD Revenue Breakdown by Business Line $ millions 16,926 15,411 1,664 (10%) 666 (4%) Other 3,139 (19%) Specialty 3,263 (21%) MS Specialty 2,980 (18%) Generics 3,208 (21%) 9,143 (54%) 8,274 (54%) YTD-16 YTD-17 Percentages may not add up to 100% due to rounding. 24
Slide 25: YTD Business Line Profit
YTD Business Line Profit $ millions 5,800 13 (1%) 5,502 61 (1%) Other 918 (16%) 959 (17%) Specialty MS Specialty Generics 2,619 (45%) 2,393 (44%) 2,235 (39%) 2,089 (38%) YTD-16 YTD-17 Profit is presented on a non-GAAP basis. Segment and business line profit consists of gross profit, less S&M and R&D
Slide 26: YTD GAAP Income Statement
YTD GAAP Income Statement $ millions, except EPS YTD-17 YTD-17 YTD-16 YTD-16 Change Margins Margins Revenues 16,926 15,411 +10% COGS 8,643 51.1% 6,942 45.0% +25% Gross profit 8,283 48.9% 8,469 55.0% (2%) R&D 1,488 8.8% 1,427 9.3% +4% S&M 2,791 16.5% 2,731 17.7% +2% G&A 838 5.0% 925 6.0% (9%) Legal s
Slide 27: YTD 2017 Non-GAAP Adjustments
YTD 2017 Non-GAAP Adjustments $ millions YTD 2017 Details Goodwill impairment 6,100 US generics Amortization 1,088 Impairment 564 Legal settlements 324 Carvedilol patent litigation reserve ($235m) Restructuring, acquisition and integration expenses 387 Contingent consideration 179 Bendeka® ($113m) O
Slide 28: YTD Non-GAAP Income Statement
YTD Non-GAAP Income Statement $ millions, except EPS YTD-17 YTD-17 YTD-16 YTD-16 Change Margins Margins Revenues 16,926 15,411 +10% COGS 7,529 44.5% 5,852 38.0% +29% Gross profit 9,397 55.5% 9,559 62.0% (2%) R&D 1,277 7.5% 1,151 7.5% +11% S&M 2,618 15.5% 2,608 16.9% +0% G&A 814 4.8% 897 5.8% )9%) Op
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