Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Merger or Acquisition (March 2010)
32 slides from Teva Pharmaceutical Industries's merger presentation, Mar 19, 2010
Slide 1: Teva to acquire ratiopharm
Teva to acquire ratiopharm 19 March 2010
Slide 2: Teva Safe Harbor Statement
Teva Safe Harbor Statement Teva's Safe Harbor Statement under the U. S. Private Securities Litigation Reform Act of 1995: The statements, analyses and other information contained herein relating to the proposed acquisition and anticipated synergies, effect on earning and financial and operating perf
Slide 3: Compelling Value Creation
Compelling Value Creation + Excellent strategic fit Extends global market leadership Positions Teva as the #1 generics company in EU Attractive economics Supports Teva’s 2015 growth strategy 3
Slide 4: Strategic Rationale / European Leadership / Financials
STRATEGIC RATIONALE EUROPEAN LEADERSHIP FINANCIALS 4
Slide 5: Strategic Rationale
STRATEGIC RATIONALE EUROPEAN LEADERSHIP FINANCIALS 5
Slide 6: Teva's strategic targets for 2015
Teva’s strategic targets for 2015 Revenues $31 bn Net income $6.8 bn Net profitability 22% 6
Slide 7: Europe is an important growth engine for Teva
Europe is an important growth engine for Teva 2015 sales 2009-2015 our European goal targets CAGR North $15bn 9.5% America Europe $9bn 18.6% International $7bn 23.2% Total $31bn 14.3% 7
Slide 8: ratiopharm – an outstanding and leading company
ratiopharm – an outstanding and leading company Established in 1881 Germany #2 in generics $2.3 billion (€1.6bn) sales in 2009 Direct presence in 26 countries Portfolio of over 500 molecules in 10,000 different presentations in a wide range of dosage forms Over 5,000 employees worldwide
Slide 9: Teva's global lead will grow significantly
Teva’s global lead will grow significantly 2009 Global Peer Group Sales $16.2 B $13.9 B $7.8 B $5.1 B $2.8 B $2.3 B $2.2B $1.7 B Sandoz Mylan Watson Stada Ranbaxy Source: Company filings and analysts’ reports 9
Slide 10: Compelling value creation
Compelling value creation Significantly enhance Teva’s global leadership Clear leader of European generics market Strong #2 in Germany strategic fit #1 in 10 EU markets; Top 3 in 7 EU markets Well-established Biosimilar operations Accretive within the 3rd quarter after closing Attractive
Slide 11: Teva's acquisition strategy
Teva’s acquisition strategy Targets Criteria Market share in attractive Strategic fit geographies Compelling economics Niche specialty products Accretive within one year 11
Slide 12: Successful M&A track record
Successful M&A track record Index, 1995 = 100 IVAX (global) Barr (global) Bentley Dorom (Spain) Sales Net (Italy) 4,500 income CoGenesys CAGR CAGR (technology) 4,000 RDL 22% 30% (India – API) 3,500 Honeywell Sicor 3,000 (Italy) (global) 2,500 APS Berk Novopharm Bayer Classics (UK) (Canada) (France)
Slide 13: European Leadership
STRATEGIC RATIONALE EUROPEAN LEADERSHIP FINANCIALS 13
Slide 14: Strategic fit with significant value creation
Strategic fit with significant value creation Indisputable leadership, #1 in Europe #2 in Germany Balanced across countries, customers and products Strong operational platform 14
Slide 15: Teva - The European market leader after the acquisition
Teva - The European market leader after the acquisition Population Ranking UK 61 M No.1 Italy 58M No.1 Spain 40 M No.1 Large population of Netherlands 15 M ~500M inhabitants No.1 Hungary 10 M No.1 Aging & wealthy Germany 82 M population No. 2 Czech Republic 11 M No. 2 France 61 M No. 3 Poland 38 M N
Slide 16: Teva - The European market leader after the acquisition
Teva - The European market leader after the acquisition UK No.1 • Strong Pan-European footprint Italy No.1 • #1 in 10 EU countries Spain No.1 • Top 3 in additional 7 EU countries Netherlands No.1 Hungary No.1 Germany No. 2 Outstanding platform for future growth Czech Republic No. 2 France No. 3 Pola
Slide 17: Leadership position in Germany
Leadership position in Germany % of generics market value, 2009 Largest market in Europe, #2 in the world 35% Germany 65% Rest of Europe Market size of ~$8.8B* gross sales 17 * Retail, Hospital and OTC; Fx 1.371
Slide 18: Leadership position in Germany: tender vs non-tender
Leadership position in Germany % of generics market value, 2009 Largest market in Europe, #2 in the world 25% Tenders Market size of ~$8.8B* gross sales 75% Non-tender Non-tender segment still larger than the #2 market, France 18 * Retail, Hospital and OTC; Fx 1.371
Slide 19: In other strategic markets Teva will nearly double its business
In other strategic markets Teva will nearly double its business • Population 58M • New combination will become the undisputed market leader Italy • Obtain full pharmacy coverage • Leverage relationships with pharmacies and regional constituents • Population 40M Spain • New combined entity will be th
Slide 20: Sustainable growth fueled by an attractive portfolio of businesses
Sustainable growth fueled by an attractive portfolio of businesses Generics Gx Branded Gx Well-known OTC Hospital - Injectables Specialty & BioGenerics Innovative – Copaxone® & Azilect® 20
Slide 21: Biosimilars platform of Teva further enhanced by ratiopharm
Biosimilars platform of Teva further enhanced by ratiopharm Products Products • Short-acting EPO • TevaGrastim • FSH – fits in WHC franchise • TEV-TROPIN • GCSF – access in Germany Current R&D portfolio and Current R&D portfolio late stage development Neugranin and 2 MaBs Infrastructure Infrastructu
Slide 22: A strong brand – well-known by European customers
A strong brand – well-known by European customers Teva has a multi-branded strategy Teva is committed to promoting across Europe and developing the ratiopharm brand in the future Selected examples: 22
Slide 23: Creates greater customer access
Creates greater customer access Pharmacists Complementary customer base, e.g. France and Germany More shelf share and attention from retailers and chains Access to well-known OTC portfolio Physicians Greater outreach through specialist sales forces, e.g. Germany and Spain Leverage on a str
Slide 24: Financials
STRATEGIC RATIONALE EUROPEAN LEADERSHIP FINANCIALS 24
Slide 25: Financial considerations
Financial considerations Enterprise value €3.6 billion, no debt. ~$3.0bn from cash on hand (at closing) Financing ~$2.0bn from lines of credit (interest under 2%) Leverage remains at 28% post closing Balance sheet Back to current 23% in 2-3 quarters Moody’s – reaffirmed A3; S&P – upgrade to A- Closi
Slide 26: Highly attractive financial outcome
Highly attractive financial outcome Pro-forma figures based on 2009 Scale and growth 2009 Pro-Forma Revenues of $16.2 billion Strengthening Europe: Over $5 billion revenues our balanced Europe: 32% of total revenues business model Accretive to Immediately on non-GAAP basis GAAP earnings By the 3rd q
Slide 27: Maintaining strong balance sheet & credit profile
Maintaining strong balance sheet & credit profile Selected balance sheet indicators 12/31/09 12/31/09 actual pro-forma Strong liquidity position: Total debt $ 5.6 bn $ 7.6 bn $1bn cash-on-hand Equity post closing $ 19.2 bn $ 19.2 bn Debt / 2009 Balance sheet flexibility EBITDA 1.32 1.64 provides liq
Slide 28: Significant synergy opportunity
Significant synergy opportunity >$400m (€300m) Additional UPSIDE over next 3 years •Consolidation/rationalization • Revenue synergies of production sites in Teva’s global operations • Additional long-term operational and vertical •Unification of R&D pipeline, integration elimination of duplication •
Slide 29: Impact on financial leverage
Impact on financial leverage $bn ~28 ~28 24.8 24.5 24.5 25.1 24.8 ~8 ~6.5 5.8 5.6 Debt 8.4 8.4 6.7 19.3 ~20 ~21.5 17.8 19.2 Equity 16.4 16.1 Q 4 08 Q 1 09 Q 2 09 Q 3 09 Q 4 09 At 2-3 clos ing quarters Leverage 34% 34% 27% 23% 23% 28% 23% 29
Slide 30: Financial Summary
Financial Summary + EPS accretive by the third quarter after closing Significant synergy opportunities Maintains strong balance sheet and credit profile Continue to execute on our strategy 30
Slide 31: Compelling Value Creation
Compelling Value Creation + Excellent strategic fit Extends global market leadership Positions Teva as the #1 generics company in EU Attractive economics Supports Teva’s 2015 growth strategy 31
Slide 32: Thank you
EVERYONE! 1
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