Slide 1: Finance: Financial objectives, capital allocation, & long-term value creation
Finance Financial objectives, capital allocation, & long-term value creation Marc Dunoyer, Executive Director, Chief Financial Officer
Slide 2: $53bn returned to shareholders over 10 years...
$53bn returned to shareholders over 10 years... 2004 – 2013 cash distributions ($bn): $27.8bn in dividends $25.4bn in share buybacks 6.0 4.1 4.2 3.7 3.7 3.4 3.5 3.0 3.0 2.6 2.7 2.6 2.6 2.2 2.2 1.7 1.4 0.6 - - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Dividends Buybacks Source: FactSet 2 – Fi
Slide 3: ... while delivering competitive total shareholder return
... while delivering competitive total shareholder return Index annual growth rate (%) 350 300 12.9% 250 9.7% 200 7.2% 150 100 50 0 AstraZeneca Peers average FTSE 100 Note: Peers line data represents an average of the total shareholder return for those companies which AstraZeneca classifies as its p
Slide 4: Competitive dividend growth & yield
Competitive dividend growth & yield Relative DPS growth 10 years Dividend yield 10 years 350 7.0% AstraZeneca 6.0% average: 4.5% 300 5.0% 250 4.0% 200 3.0% Peers average: 3.9% 2.0% 150 1.0% 100 0.0% AstraZeneca Peers AstraZeneca Peers Note: Peers line data represents an average of the total sharehol
Slide 5: Return to growth: Well underway; expected to continue driving value
Return to growth: Well underway; expected to continue driving value 4-year forward rolling revenue CAGR 15% Market consensus (current) Actual 10% 5% 0% -5% 2014E-2018E CAGR -10% Illustrative Source: Annual reports, research forecasts 5 – Finance
Slide 6: 2013-2017: Growth platforms expected to continue delivering
2013-2017: Growth platforms expected to continue delivering $ Revenue Growth Late-stage $ Revenue 2013 platforms pipeline 2017 Established products, Crestor, Nexium, Seroquel LoE in US and EU Illustrative 2013 revenue is net sales as reported. Targets are at constant exchange rates, reflecting net s
Slide 7: 2017-2023: Accelerating pipeline expected to take over
2017-2023: Accelerating pipeline expected to take over 2023 Late-stage Revenue pipeline Target: >$45bn Growth platforms Established products $ Revenue $ Revenue 2013 2017 Illustrative 2013 revenue is net sales as reported. Targets are at constant exchange rates, reflecting net sales. 7 – Finance
Slide 8: Disciplined value-creating framework
Disciplined value-creating framework • R&D • Business Development Established Growth Cash Pipeline products platforms flow • Progressive dividend • 2015-2016: policy • Brilinta – 8-10 NME / LE • Efficient • Diabetes approvals capital – 14-16 NME / LE structure • Respiratory submissions • Emerging Ma
Slide 9: Incentives aligned with shareholder value creation
Incentives aligned with shareholder value creation LTI plans STI PSP*** AZIP*** Achieve scientific ✔ ✔ Delivery of pipeline leadership – (30%) (25%) ✔ ✔ Delivery of sales Return to growth – (30%) (25%) growth Shareholder value creation Achieve group ✔ ✔* Delivery of financial – financial targets (40
Slide 10: Investment focused on core therapeutic areas (TAs)
Investment focused on core therapeutic areas (TAs) R&D & Business Development across all science units ~38% ~21% ~33% ~8% (combined) Small Protein Biologics Immuno-therapies Devices molecules engineering 10 – Finance
Slide 11: Late-stage pipeline replenishment
Late-stage pipeline replenishment • 9 NME Phase III starts since 2013 vs. 14 13-15 original goal of ~5–7 NME Phase III & Registration NME 11 pipeline volume (#) 9-10 • 10 potential NME submission 8 opportunities between 6 now and 2016 8 6 • Acceleration and simplification of best programmes 2012 201
Slide 12: Late-stage pipeline has valuable NMEs
Late-stage pipeline has valuable NMEs AZD1772 (tenapanor) tralokinumab Lynparza (PARP) BRCA NHE3 inhibitor ESRD-Pi/CKD IL-13 severe asthma ovarian, gastric, breast (2013) AZD9293 mavrilimumab AZD9291 (EGFRm T790M) BSECDR Alzheimer’s GM-CSFR rheumatoid arthritis NSCLC (2015) PT010 brodalumab* (IL17R)
Slide 13: Summary
Summary • Strong shareholder value creation in the last 10 years – $53bn returned – ~13% annual TSR – Superior dividend yield (4.5%) and growth (x3) • Revenue growth at a visible inflection point • Disciplined value-creating framework – Confirmation of progressive dividend policy • Long-term value c
Slide 14: Q&A
Q&A Marc Dunoyer, moderator Luke Miels Briggs Morrison