AstraZeneca PLC · LSE:AZN
AstraZeneca — Debt Investor Presentation (February 2020)
41 slides from AstraZeneca's debt investor presentation, Feb 14, 2020
Slide 1: Fixed-income investor update
Fixed-income investor update 14 February 2020
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 Continued strong top-line growth Set for operating leverage and cash generation Maintaining innovation and pipeline delivery Financial priorities on track 4
Slide 5: Business update
Astrazeneca What science can do Business update
Slide 6: 2019: sales showed persistent growth
2019: sales showed persistent growth 15% sales growth; new medicines up by 62% Strong sales New medicines1 now growth continued 42% of total sales $m 19% 2019: 1,600 18% 1,400 14% +$3.8bn 1,200 Product sales growth, per cent 9% 9% 8% incremental sales of new medicines compared to 2018 1,000 Diabetes
Slide 7: Increasingly balanced and diversified company
AstraZeneca Increasingly balanced and diversified company Nearly half of sales More than one third of sales Nine blockbusters: reduced now in specialty care generated in Emerging markets reliance on single medicines 9 6 47% 5 5 35% 31% 25% 21% 25% 14% 15% 2013 2015 2017 2019 2013 2015 2017 2019 2013
Slide 8: 2019: double-digit growth in all therapy areas, EMs
2019: double-digit growth in all therapy areas, EMs1 Q4 2019 change ratio 2019 change ratio $m % % $m % % Product sales 6,250 9 100 23,565 15 100 Oncology 2,274 29 36 8,667 47 37 New CVRM 1,168 7 19 4,376 12 19 Respiratory 1,537 14 25 5,391 13 23 Other medicines 1,271 (16) 20 5,131 (13) 22 Emerging
Slide 9: Oncology: 47% sales growth in 2019; annualising ~$9bn
Oncology: 47% sales growth in 2019; annualising ~$9bn 2020 is anticipated to be another year of significant growth in sales As anticipated, Q4 growth temporarily offset by New medicines Tagrisso, Imfinzi, Lynparza $m Faslodex US generics; Tagrisso price/adjustments and Calquence added $2.9bn in 2019
Slide 10: BioPharmaceuticals: New CVRM and Respiratory
BioPharmaceuticals: New CVRM and Respiratory Increasing growth across all major medicines 13% growth Solid franchises with $m in 2019 strong growth in 2019 3,000 • Farxiga: strong position in growing class; unique CV data, including in HF 2,500 • Brilinta: global growth continued 2,000 1,500 • Fasen
Slide 11: Emerging markets: broad performance from diverse portfolio
Emerging markets Broad performance from diverse portfolio of countries Total EMs +24% - ex-China EMs +12% - China +35% Sales continued to grow ahead of the long-term Diversified growth: AP1 +10% - MEA2 +8% - LA3 +16% - Russia +40% ambition of mid to high single-digit growth 10% 12% • New medicines +
Slide 12: 2020 guidance confirms strong operating leverage
2020 guidance confirms strong operating leverage Total revenue Core EPS Increase by a high single-digit to Increase by a mid- to a low double-digit percentage1 high-teens percentage1 1. Depending on the impact of the Covid-19 epidemic. All guidance assumes an unfavourable impact from China lasting u
Slide 13: Ambition Zero Carbon
Ambition Zero Carbon • AstraZeneca aims to eliminate CO2 emissions by 2025 and become carbon negative by 2030 • $1bn programme will include the launch of next-generation respiratory inhalers and a wide range of energy initiatives to reduce climate impact to zero • AstraZeneca has joined the Sustaina
Slide 14: 2019: another year of very significant news flow
2019: another year of very significant news flow Positive pipeline progression supports sustainable growth Forxiga Forxiga Qternmet XR Lynparza Lynparza 21 T1D1 T1D T2D breast cancer OC 1L (SOLO-1) approval (EU) approval (JP) approval (US) approval (EU) approval (EU) Breztri Bevespi Lynparza Forxiga
Slide 15: Late-stage pipeline events in the 2020-2021 timeframe
Late-stage pipeline events in the 2020-2021 timeframe Busy news flow continues; underpinning consistent sales growth H1 2020 H2 2020 2021 Regulatory Imfinzi - SCLC (ED) (US) Imfinzi - SCLC (ED) (EU, JP) Calquence - CLL (JP) Lynparza Lynparza decision - OC (1L) (PAOLA-1) (US) - OC (1L) (PAOLA-1) (EU)
Slide 16: Financial update
Astrazeneca What science can do
Slide 17: Reported profit and loss
Reported profit and loss 2019 change % total Q4 2019 change % total $m % revenue $m % revenue Product sales 23,565 15 97 6,250 9 94 Collaboration revenue 819 (20) 3 414 (36) 6 Total revenue 24,384 13 100 6,664 5 100 Gross margin 79.1% 2.1 pp2 78.0% 5.1 pp Operating expenses1 18,080 14 74 5,209 12 78
Slide 18: Core profit and loss
Core profit and loss 2019 change % total Q4 2019 change % total $m % revenue $m % revenue Product sales 23,565 15 97 6,250 9 94 Collaboration revenue 819 (20) 3 414 (36) 6 Total revenue 24,384 13 100 6,664 5 100 Gross margin 79.8% (0.2) pp 77.5% (2.4) pp Operating expenses1 14,748 7 60 4,211 7 63 -
Slide 19: Cash flow
Cash flow 13% improvement in operating cash flow Net debt reduced to $11.9bn Cash-flow headlines $bn 2019 versus 2018 • Net cash from operating activities 0.7 $2,969m versus $2,618m 3.5 0.2 Improved ‘organic’ profit 3.6 Lower disposals Improvements in working capital 2.2 13.0 13.7 6.7 11.9 Higher ta
Slide 20: Finance priorities
Finance priorities FY results supportive Deleveraging / dividend growth Revenue growth • As cash flow improves, deleveraging and progressive dividend policy +13% growth in total revenue in 2019 Operating leverage • 60% ratio of core operating expenses Cash-flow growth to total revenue (from 64% in 2
Slide 21: Net debt position
Net debt position 31-Dec-19 31-Dec-18 $m $m Gross debt (18,227) (19,113) Cash & cash equivalents 5,369 4,831 Other investments 911 895 Net derivative financial instruments 43 384 Closing net debt1 (11,904) (13,003) IFRS 16 lease adjustment (720) Adjusted closing net debt (13,723) 1. Net debt is a no
Slide 22: Liquidity, debt and rating summary
Liquidity, debt and rating summary • Strong liquidity at 31 December 2019 • Group cash and investments of $6.3bn • 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 Utilisation as at
Slide 23: Smooth bond maturity profile with ten-year average life
Smooth bond maturity profile with ten-year average life Debt Maturity Profile at 31 December 2019 1 3,000 2,500 2,000 $m 1,500 1,000 500 0 2020 2021 2022 2023 2024 2025 2027 2028 2029 2031 2037 2042 2045 2048 USD EUR GBP Overdraft, leases, bank collateral 1. Notional bond values. FX converted at 31
Slide 24: Summary
Astrazeneca What science can do
Slide 25: Key messages
Key messages Continued strong top-line growth Set for operating leverage and cash generation Maintaining innovation and pipeline delivery Financial priorities on track 25
Slide 26: Fixed-income investor update
Fixed-income investor update 14 February 2020
Slide 27: Appendix
AstraZeneca What science can do Appendix
Slide 28: Geographic growth
Geographic growth Strong performance in all major regions China 35% 21% of Product Sales Europe 2% US 18% of 13% Japan 26% 33% of Product Sales 11% of Product Sales Product Sales Emerging Markets (ex-China) 14% of 12% Product Sales FY 2019 Regional Product Sales as reported Growth rates for FY 2019
Slide 29: Lung cancer: Tagrisso
Lung cancer: Tagrisso 1st-line standard of care in US, JP; reimbursements underway elsewhere Strong growth Approved in 80 countries (1st-line $m +74% in 2019 use) and 87 countries (2nd-line use) 1,000 900 • US +46% (40% of total) Sequential growth reduced by higher only 18 reimbursements out of 800
Slide 30: Lung cancer: Imfinzi
Lung cancer: Imfinzi Continued expansion in ex-US countries US peak sales PACIFIC (treatment of unresectable, 2020 to provide new $m above $1bn p.a. Stage III NSCLC) becoming new SoC1 growth opportunities 450 • Approved in 61 countries plus • PACIFIC opportunities 400 15 countries in bladder cancer2
Slide 31: Lynparza
Lynparza The leading PARP inhibitor globally; more than 30,000 patients treated Ten quarters of strong Approved in 73 countries (ovarian) Merck1 collaboration: $m growth: +89% in 2019 58 (breast) and 1 (pancreatic cancer) $2.6bn revenue received; $m $5.3bn future potential 400 • US +81% (52% of tota
Slide 32: Oncology: new launch medicines
Oncology: new launch medicines Strong launches of Calquence, Enhertu Calquence Enhertu $m Now approved in 3 countries (CLL) and 12 countries (MCL) (trastuzumab deruxtecan) 60 • Global $164m; US $162m • US approval on 20 December 2019 55 First sales from Daiichi Sankyo to 50 • US CLL wholesalers on 3
Slide 33: 'What's next' in Oncology
‘What’s next’ in Oncology Good progress across Phase I/II Oncology capivasertib (AKT1 inhibitor) breast, prostate cancers ✓ monalizumab (NKG2a6 mAb7) head & neck, colorectal cancers ✓ Phase III Phase III Phase II Phase III started decision adavosertib (WEE12 inhibitor) oleclumab (CD738 mAb) solid tu
Slide 34: BioPharmaceuticals: New CVRM
BioPharmaceuticals: New CVRM Blockbusters Farxiga and Brilinta continued global growth Diabetes growth of 6% driven by Farxiga Continued growth in $m SGLT21 now the fastest-growing class of any T2D medicine by volume $m Brilinta sales in 2019 800 • Farxiga +14% • Brilinta +23%: continued solid 700 U
Slide 35: BioPharmaceuticals: Respiratory
BioPharmaceuticals: Respiratory Sales growth of 13%; Fasenra, Pulmicort, EMs leading Respiratory delivered Performance supported by portfolio mix across regions $m strong performance Symbicort back to stability in 2019 1,800 • US +17% • Europe -5% 1,600 Fasenra (+121%) offset by Symbicort (- Lower S
Slide 36: BioPharmaceuticals: new launch medicines
BioPharmaceuticals: new launch medicines Portfolio of new medicines across uses and markets Fasenra now approved in 52 Breztri Lokelma countries; reimbursed in 36 COPD Hyperkalaemia • US $482m • Japan • Global $14m; Q4 $8m Leading new biologic medicine in new- Initial uptake ahead of previous Majori
Slide 37: 'What's next' in BioPharmaceuticals
‘What’s next’ in BioPharmaceuticals Early to mid-stage pipeline progressing well New CVRM cotadutide (GLP-11/glucagon co- ✓ Respiratory PT027 (SABA/ICS7) ✓ agonist) - NASH2 Phase II asthma started; Phase III Phase II Phase III ✓ Fast Track started AZD5718 (FLAP3 inhibitor) (US) AZD7594 (inhaled/nebu
Slide 38: FY 2019 Reconciliation of Reported to Core Financial Measures
FY 2019 Reconciliation of Reported to Core Financial Measures Intangible Asset Diabetes Reported Restructuring Amortisation & Other1 Core2 Alliance Impairments $m $m $m $m $m $m Gross Profit 19,463 73 87 - - 19,623 Distribution Expense (339) - - - - (339) R&D Expense (6,059) 101 638 - - (5,320) SG&A
Slide 39: Q4 2019 Reconciliation of Reported to Core Financial Measures
Q4 2019 Reconciliation of Reported to Core Financial Measures Intangible Asset Diabetes Reported Restructuring Amortisation & Other1 Core2 Alliance Impairments $m $m $m $m $m $m Gross Profit 5,286 (49) 18 - - 5,255 Distribution Expense (92) - - - - (92) R&D Expense (2,091) 19 578 - - (1,494) SG&A Ex
Slide 40: 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 41: Use of AstraZeneca conference call, webcast and presentation slides
Use of AstraZeneca conference call, webcast and 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. Th
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