Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — FY2021 Earnings Presentation
50 slides from Teva Pharmaceutical Industries's earnings presentation, Feb 9, 2022
Slide 1: Fourth Quarter and Full Year 2021 Results
Teva Pharmaceutical Industries Ltd. Fourth Quarter and Full Year 2021 Results February 9, 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: 2021 Highlights
2021 Highlights Financial Business − Revenues of $15.9 billion − COVID-19 pandemic – no material impact to business continuity; fewer physician visits continue to impact − Adjusted EBITDA of $4.9 billion global prescribing patterns − GAAP diluted EPS of $0.38; Non-GAAP − Successful refinancing: $5 b
Slide 5: Opioid Litigation Updates
Opioid Litigation Updates Individual State Settlements - Texas: $150 million over 15 years, plus $75 million in generic Narcan spray at WAC, including state and all subdivisions - Louisiana: $15 million over 18 years, plus $3 million in generic Suboxone at WAC, including state and all subdivisions R
Slide 6: Revenue Development
Revenue Development $ millions 4,454 4,357 307 344 4,100 3,978 3,982 3,910 3,887 3,870 302 565 316 572 289 298 262 335 527 529 490 485 488 530 1,237 1,402 1,116 1,214 1,268 1,001 1,184 1,220 2,300 2,082 2,047 2,017 1,989 1,943 2,003 Other Activities 1,875 International Markets Europe North America Q
Slide 7: AUSTEDO
AUSTEDO® ® AUSTEDO® U.S. Revenues By Quarter AUSTEDO® U.S. TRx Count Per Quarter Highlights ($ million) 282 45,000 42,788 – U.S. sales of $802 million in 2021, 40,000 an increase of 26% vs. 2020 35,000 201 – >42K prescriptions were dispensed 185 30,000 174 in Q4 2021, vs. 35K in Q4 2020 168 161 146
Slide 8: Tardive Dyskinesia - Widespread and Undertreated
Tardive Dyskinesia - Widespread and Undertreated TD affects >500,000 patients in the U.S. <15% diagnosed <6% receive available treatments |8| Data based on Robert L. Tardive dyskinesia facts and figures, Psychiatric Times, May 30, 2019, IQVIA data and Teva estimates
Slide 9: AJOVY
AJOVY® AJOVY® U.S. QTR Normalized TRx AJOVY EU Monthly Volume market share Highlights ̶ Net global sales of $313* million in 2021: 250,000 ̶ North America - $176 million 228,626 30.0% 28.0% ̶ Europe - $87 million 200,000 ̶ International Markets - $50* million 25.0% ̶ United States 150,000 20.0% 17.8
Slide 10: Teva Specialty & Biosimilar Product Pipeline
Teva Specialty & Biosimilar Product Pipeline By development stage – as of January 30, 2022 Under Regulatory Preclinical Phase 1 Phase 2 Phase 3 Pre Submission Review TEV-56278 TEV-44749 TEV-53275 Fasinumab2 Digihaler® Biosimilar to Humira® TEV-56285 Oncology Schizophrenia Respiratory Osteoarthritic
Slide 11: Subcutaneous Risperidone LAI for Patients with Schizophrenia
Subcutaneous Risperidone LAI for Patients with Schizophrenia NDA accepted by FDA; expected action date in H1/22 Clinical efficacy Improved amenities of care Ready to use – Subcutaneous injection – Prefilled syringe – Risk of relapse was reduced by up to 80% vs. placebo (vs intramuscular) – No recons
Slide 12: Teva Biosimilars
Teva Biosimilars A broad portfolio of 13 Biosimilars in Development: biosimilars through – 7 in-house programs Truxima® partnerships and – 5 biosimilars with Alvotech reaching 28% market share organic growth – 1 biosimilar with BioEq in Q4 2021 Unique commercial Lucentis® Biosimilars Expanding biosi
Slide 13: Gross Margin Improvement: Program focused on 5 key levers
Gross Margin Improvement: Program focused on 5 key levers Network Agile operating Procurement cost Operational & E2E Supply chain optimization model and excellence Quality Excellence integration and restructuring organization Take a total Cost of Continue the focus and Ensure operational Design & di
Slide 14: Site consolidations
Site consolidations 140 120 120 111 102 99 100 87 80 Offices 80 73 64 61 60 52 53 44 Manufacturing Sites 37 40 25 25 R&D Sites 20 0 2017 2018 2019 2020 2021 Continued footprint optimization additional 8 manufacturing and 3 office sites announced to be divested/closed | 14 |
Slide 15: Spotlight on Our Business in Europe
Spotlight on Our Business in Europe Europe Revenues and Operating Profitability* Development Highlights 5,186 4,886 4,795 4,757 – Operates in 31 European markets 31% – Top 3 position in 14 generics markets – Strong generics pipeline: 588 approvals 27% 28% in 2021 and >1,350 pending with European reg
Slide 16: Operating Margin Expansion
Operating Margin Expansion Non-GAAP operating margin % 28.5% 27.5% - 28.0% 28.0% 28.0% 27.8% 27.7% 27.5% 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 | 16 | * Estimated margin based on 2022 guidance
Slide 17: 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 $20.9 $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 | 17 |
Slide 18: Successful Refinancing: $5B Sustainability-Linked Bonds
Successful Refinancing: $5B Sustainability-Linked Bonds ̶ Largest SLB of its kind ̶ First issued by a generic medicines company ̶ First in pharmaceutical industry to link both social and environmental targets ̶ Built on our strong ESG foundation and accelerates Teva’s ESG journey | 18 |
Slide 19: SLB Targets
SLB Targets Climate change – Reduce absolute Scope 1 and 2 GHG emissions by 25% by 2025 Access – Increase the number of new regulatory submissions by 150% in low-to- middle-income countries across six key therapeutic areas by 2025 – Increase access program product volume by 150% in low-to-middle-inc
Slide 20: Debt Maturity Profile - Before & After the Refinancing
Debt Maturity Profile - Before & After the Refinancing Pre-Deal* Post-Deal** $ billions $ billions 4.5 3.6 3.5 3.5 3.5 3.0 3.0 2.0 2.1 2.1 2.1 2.0 2.0 2.0 1.7 1.4 1.2 1.0 0.8 0.8 0.8 21 22 23 24 25 26 27 28 … 36 … 46 21 22 23 24 25 26 27 28 29 30 … 36 … 46 Repurchased New Issued Total Debt Maturitie
Slide 21: 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 22: Eli Kalif, EVP & Chief Financial Officer
Eli Kalif EVP & Chief Financial Officer
Slide 23: Q4 2021 Summary
Q4 2021 Summary $ millions, except EPS Q4 2021 Q4 2020 Q4 2021 Q4 2020 GAAP Non-GAAP Revenues* 4,100 4,454 4,100 4,454 Operating income 78 406 1,248 1,140 Net income (loss) attributable to Teva (159) 150 854 753 (0.14) 0.14 0.77 0.68 Earnings (loss) per share ($)** 1,103 million 1,100 million 1,108
Slide 24: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q4 2021 Comments Legal settlements 604 Mainly related to opioids litigation Amortization 188 Quarterly run-rate Impairment of long-lived assets 183 Mainly U.S. tangible assets IPR&D and product rights Restructuring 37 Equity Compensation Plans 32 Contingent Considerat
Slide 25: Q4 2021 Non-GAAP Summary
Q4 2021 Non-GAAP Summary $ billions, except EPS Q4 2021 Q4 2020 Change FY 2021 FY 2020 Change Revenues* 4.1 4.5 (8%) 15.9 16.7 (5%) 2.3 2.3 -- 8.6 8.7 (1%) Gross profit 56.1% 52.3% 3.9% 54.2% 52.4% 1.8% 1.2 1.1 9% 4.4 4.4 -- Operating income 30.4% 25.6% 4.8% 27.7% 26.3% 1.4% Adjusted EBITDA 1.4 1.3
Slide 26: Spend Base
Spend Base -794 (-6%) -971 Net of FX $ millions 12,271 11,477 -462 (-14%) -431 Net of FX 3,313 2,852 7,925 (65%) 7,266 (63%) 2,126 (64%) 1,798 (63%) 4,346 4,212 1,187 1,053 (35%) (37%) COGS (36%) (37%) OPEX Q4 2020 Q4 2021 FY 2020 FY 2021 Revenues 4,454 4,100 16,659 15,878 GP% 52.3% 56.1% 52.4% 54.2
Slide 27: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 795 716 625 582 551 506 471 59 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 | 27 |
Slide 28: Cash-to-Earnings
Cash-to-Earnings $ millions +25 +86 Long-range target: 80% 2,830 2,855 2,196 2,110 75% 77% FY-20 FY-21 FY-20 FY-21 FY-20 FY-21 Free Cash Flow Cash-to-earnings* Non-GAAP Net Income | 28 | • * Free Cash Flow / non-GAAP Net income
Slide 29: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions 23.7 23.2 22.7 21.7 Net Debt 20.9 4.9 4.7 4.8 4.8 4.9 EBITDA MAT Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Net Debt / EBITDA MAT* 4.83 4.90 4.73 4.51 4.25 Leverage 70% 69% 69% 67% 67% | 29 | * Teva's Net Debt/EBITDA MAT covenant ratio limits are 5.5x for H1 2021 and 5
Slide 30: 2022 Non-GAAP Outlook
2022 Non-GAAP Outlook $ billions, except EPS 2022 Outlook 2021 Actual Revenues 15.6 – 16.2 15.9 COPAXONE ($m) ~850 1,005 AUSTEDO ($m) ~1,000 808 AJOVY ($m) ~400 313 Operating Income 4.2 - 4.5 4.4 EBITDA 4.7 - 5.0 4.9 2.40 – 2.60 2.58 EPS ($) 1,114 million shares 1,107 million shares Free Cash Flow*
Slide 31: Q&A
Q&A
Slide 32: Additional Information
Additional Information teva
Slide 33: FY 2021 Summary
FY 2021 Summary $ millions, except EPS FY 2021 FY 2020 FY 2021 FY 2020 GAAP Non-GAAP Revenues* 15,878 16,659 15,878 16,659 Operating income (loss) 1,716 (3,572) 4,401 4,388 Net income (loss) attributable to Teva 417 (3,990) 2,855 2,830 0.38 (3.64) 2.58 2.57 Earnings (loss) per share ($)** 1,107 mill
Slide 34: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q4 2021 Q4 2020 $ millions, except EPS Q4 2021 Q4 2020 Change Margins Margins Revenues 4,100 4,454 (8%) COGS 2,049 50.0% 2,405 54.0% (15%) Gross profit 2,050 50.0% 2,048 46.0% 0% R&D 244 5.9% 293 6.6% (17%) S&M 632 15.4% 683 15.3% (7%) G&A 276 6.7% 327 7.3% (15%) Lega
Slide 35: FY 2021 GAAP Income Statement
FY 2021 GAAP Income Statement FY 2021 FY 2020 $ millions, except EPS FY 2021 FY 2020 Change Margins Margins Revenues 15,878 16,659 (5%) COGS 8,284 52.2% 8,933 53.6% (7%) Gross profit 7,594 47.8% 7,726 46.4% (2%) R&D 967 6.1% 997 6.0% (3%) S&M 2,429 15.3% 2,498 15.0% (3%) G&A 1,099 6.9% 1,173 7.0% (6
Slide 36: Q4 2021 Foreign Exchange Impact
Q4 2021 Foreign Exchange Impact $ millions Q4 2021 Q4 2020 Diff FX Effect Diff net FX Revenues 4,100 4,454 (354) (19) (335) Operating income 78 406 (328) 15 (343) GAAP Operating income 1,248 1,140 108 12 95 Non-GAAP | 36 |
Slide 37: 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 53.1% 52.4% 53.8% 53.3% 53.6% 56.1% 52.0% 52.3% 28.5% 27.1% 26.8% 30.4% 25.3% 25.8% 25.6% 26.4% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Net Revenues Gross Margin Operating Marg
Slide 38: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 FY-20 FY-21 North America Segment 2,300 1,989 1,943 1,875 2,003 8,447 7,809 Generic products 1,206 1,053 951 859 905 4,010 3,769 ® AJOVY 36 31 46 46 53 134 176 ® AUSTEDO 185 146 174 201 282 637 802 BENDEKA®/TREANDA®
Slide 39: 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 1,042 979 835 854 753 699 651 651 605 637 0.76 0.68 0.77 0.55 0.58 0.63 0.59 0.59 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Net Income Operating Profit EPS | 39 |
Slide 40: Spend Base Trend (Non-GAAP)
Spend Base Trend (Non-GAAP) Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 FY-20 FY21 $ millions Act Act Act Act Act Act Act COGS 2,126 1,838 1,826 1,804 1,798 7,925 7,266 S&M 627 549 582 567 600 2,322 2,297 R&D 254 244 243 217 229 941 933 G&A 312 278 231 275 244 1,115 1,029 Other income (5) (5) (6) (18) (19) (31) (
Slide 41: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions +108 (+9%) +95 Net of FX (+8%) (4) 35 147 (70) 1,248 1,140 Q4-20 North America Europe International Markets Other Activities Q4-21 | 41 |
Slide 42: FY Non-GAAP Operating Income
FY Non-GAAP Operating Income $ millions +13 0% -42 Net of FX (-1%) (9) 55 (196) 163 4,388 4,401 FY-20 North America Europe International Markets Other Activities FY-21 | 42 |
Slide 43: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions 1,248 29 (2%) 1,140 33 (3%) 1,077 131 (10%) 96 (8%) 1,034 1,042 41 (4%) 47 (5%) 38 (4%) 122 (11%) 273 123 (12%) 152 (15%) 420 (24%) (34%) 338 (31%) 343 (33%) 394 (38%) 738 668 (65%) 577 521 (54%) (54%) 458 Other Activities (50%) (44%) International Mark
Slide 44: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA* $ millions 1,373 1,277 1,206 1,162 1,170 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 | 44 | * Adjusted EBITDA is defined as operating income excluding depreciation and amortization expenses and certain other items
Slide 45: Q4 2021 Adjusted EBITDA to Free Cash Flow
Q4 2021 Adjusted EBITDA to Free Cash Flow $ millions (657) (48%) (233) (110) 43 (495) (116) (153) 1,373 302 370 (265) 716 456 Adjusted Interest Tax payments AR Inventory AP & Other Securitization* Operating Securitization Asset sales; Free EBITDA payments, cash flow reclass Capex gross cash flow net
Slide 46: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions Dec 31, 2021 Dec 31, 2020 Diff Cash and Cash Equivalents 2.2 2.2 (0.0) AR Trade 4.5 4.6 (0.1) Pre-paid Expenses and Other Current Assets 2.1 1.8 0.2 Inventory 3.8 4.4 (0.6) Fixed Assets 6.0 6.3 (0.3) Intangible Assets 7.5 8.9 (1.5) Goodwill 20.0 20.6 (0.6) Other
Slide 47: Q4 2021 Debt Movements
Q4 2021 Debt Movements $ billions 5.0 (4.0) (1.2) (0.3) (0.2) (2.2) 23.7 23.0 20.9 Sep 30, Debt Issuance Debt Tendered Debt RCF utilization* FX and Other Dec 31, Cash balance Dec 31, 2021 Repayment 2021 2021 Gross Debt Gross Debt Net Debt | 47 | * During the fourth quarter of 2021, we repaid the rem
Slide 48: FY 2021 Debt Movements
FY 2021 Debt Movements $ billions 5.0 (4.0) (3.2) (0.7) (2.2) 25.9 23.0 20.9 Dec 31, Debt Debt Debt FX Dec 31, Cash balance Dec 31, 2020 Issuance Tendered Repayment 2021 2021 Gross Debt Gross Debt Net Debt | 48 |
Slide 49: 2021 ESG performance
2021 ESG performance 2021 Score Previous Score 2021 Sector Ranking Previous Sector Ranking 41 36 Top 17% Top 30% 31.1* 33.3 Top 12%** Top 10% B (3.5) B (3.3) Bottom 20% Bottom 22% C+ C Top 10% Top 40% 3.6 3.4 Top 14% Top 29% 56 55 Top 23% Top 24% CLIMATE B A- N/A N/A WATER B C N/A N/A 60% 63% Bottom
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