Astrazeneca Plc · LSE:AZN
Astrazeneca — Debt Investor Presentation (August 2019)
37 slides from Astrazeneca's debt investor presentation, Aug 7, 2019
Slide 1: Fixed-income investor update
Fixed-income investor update 7 August 2019
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
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 Delivering on strong product sales growth – full year 2019 guidance updated Early success in driving operating leverage Extensive pipeline – news flow to accelerate in the second half Financial priorities on track – sales, profitability, cash and deleveraging 4
Slide 5: Business update
A AstraZeneca 2 What science can do Business update
Slide 6: H1 2019: continued strong sales growth
H1 2019: continued strong sales growth 17% sales growth; new medicines +77% Strong sales New medicines remain growth continued the key sales drivers $m 19% H1 2019: 800 +$2.0bn 700 14% 600 Product sales growth, percent 9% 8% incremental sales of new medicines compared to H1 2018 500 Diabetes Allianc
Slide 7: H1 2019: sales growth across all main therapy areas
H1 2019: sales growth across all main therapy areas Growth driven by new medicines and legacy medicines in EM Q2 2019 % product H1 2019 % product % change % change $m sales $m sales Product sales 5,718 19 100 11,183 17 100 Oncology 2,167 57 38 4,059 58 36 New CVRM 1,061 13 19 2,094 16 19 Respiratory
Slide 8: Oncology: Establishing new standards of care
Oncology Establishing new standards of care Oncology up by New medicines Lynparza, Tagrisso, $m 58% in H1 2019 Imfinzi and Calquence added $1.5bn 2,250 2,000 • Tagrisso: continued global expansion into 1st-line use 1,750 1,500 • Imfinzi: US growth moderating; ex-US growth continued up 1,250 1,000 •
Slide 9: BioPharmaceuticals: Continued growth across all major medicines
BioPharmaceuticals Continued growth across all major medicines BioPharmaceuticals Solid franchises $m up by 13% in H1 2019 with strong growth 2,500 • Farxiga: solid global position in growing class with unique CV outcomes data. Potential to expand beyond diabetes 2,000 • Brilinta: continued global g
Slide 10: Emerging markets: Strong performance across many markets
Emerging markets 2018 year-end webcast on China and Emerging markets Strong performance across many markets Performance boost by China growing ahead of recent trends Sales continued to grow ahead of the long-term Ex-China growth +10% with improvement since Q4 2018 ambition of mid to high single-digi
Slide 11: 2019 guidance updated and confirms the growth outlook
2019 guidance updated and confirms the growth outlook Product sales Core EPS Now a low double-digit percentage increase1 $3.50 to $3.70 1. Previously, guidance for product sales was for a high single-digit percentage increase. Guidance at CER. 11
Slide 12: Leading in sustainability
Leading in sustainability AstraZeneca is the first pharmaceutical company to join the global EV100 initiative • Access to healthcare Healthy Heart Africa programme recently launched in Ghana • Environmental protection Shifting to electric Commitment to EV100 for company cars vehicles will save the s
Slide 13: Late-stage pipeline events in the 2019, 2020 timeframe
Late-stage pipeline events in the 2019, 2020 timeframe Busy news flow continues; underpinning consistent sales growth H2 2019 H1 2020 H2 2020 Regulatory decision Tagrisso - NSCLC (1L, EGFRm) (CN) Lynparza - Imfinzi - unresectable, Stage III NSCLC (PACIFIC) (CN) - breast cancer (BRCAm) (CN) Lynparza
Slide 14: 'What's next': aiming for sustainable sales growth
‘What’s next’: aiming for sustainable sales growth Rich mid-stage pipeline; selected new molecular entities Oncology New CVRM Respiratory capivasertib (AKT1 inhibitor) breast, prostate cancers Phase III start in H1 2019 ✓ trastuzumab deruxtecan (HER2 ADC) - breast, gastric, other - Phase III/II Phas
Slide 15: Financial update
AstraZeneca What science can do Financial update
Slide 16: Reported profit and loss
Reported profit and loss H1 2019 % total Q2 2019 % total % change % change $m revenue $m revenue Product sales 11,183 17 99 5,718 19 98 Collaboration revenue 131 (57) 1 105 (12) 2 Total revenue 11,314 14 100 5,823 18 100 Gross margin 80.4% 1.8 pp2 81.4% 1.5 pp Operating expenses1 8,238 10 73 4,380 1
Slide 17: Core profit and loss
Core profit and loss H1 2019 % total Q2 2019 % total % change % change $m revenue $m revenue Product sales 11,183 17 99 5,718 19 98 Collaboration revenue 131 (57) 1 105 (12) 2 Total revenue 11,314 14 100 5,823 18 100 Gross margin 81.3% 1.3 pp 82.1% 0.8 pp Operating expenses1 6,922 5 61 3,553 5 61 -
Slide 18: Cash flow: Improvement in operating cash flow
Cash flow Improvement in operating cash flow Net debt Cash-flow $bn unchanged highlights • Net cash from operating activities $491m in H1 2019 versus -$75m in H1 2018 primarily due to 13.0 0.7 13.7 3.5 2.4 0.2 13.1 improvement in working capital and short-term provisions offset by higher taxes paid
Slide 19: Finance priorities
Finance priorities H1 results supportive Deleveraging / dividend growth Sales growth • As cash flow improves, deleveraging and progressive dividend policy +17% growth in product sales in H1 2019 Cash-flow growth Operating leverage • H1 2019: improvement in cash flow • 44% growth in core operating pr
Slide 20: Net debt position
Net debt position 30-Jun-19 31-Dec-18 $m $m Gross debt (19,704) (19,113) Cash & cash equivalents 5,428 4,831 Other investments 875 895 Net derivative financial instruments 321 384 Closing net debt1 (13,080) (13,003) 1. Net debt is a non-GAAP measure. The equivalent GAAP measure to net debt is ‘liabi
Slide 21: Liquidity, debt and rating summary
Liquidity, debt and rating summary • Strong liquidity at 30 June 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 Rating Utilisation as
Slide 22: Smooth bond maturity profile with ten-year average life
Smooth bond maturity profile with ten-year average life Debt Maturity Profile at 30 June 20191 3,000 2,500 2,000 $m 1,500 1,000 500 0 2019 2020 2021 2022 2023 2024 2025 2027 2028 2029 2031 2037 2042 2045 2048 USD EUR GBP Commercial Paper Overdraft, leases, bank collateral 1. Notional bond values. FX
Slide 23: Summary
AstraZeneca What science can do Summary
Slide 24: Key messages
Key messages Delivering on strong product sales growth – full year 2019 guidance updated Early success in driving operating leverage Extensive pipeline – news flow to accelerate in the second half Financial priorities on track – sales, profitability, cash and deleveraging 24
Slide 25: Fixed-income investor update
Fixed-income investor update 7 August 2019
Slide 26: Appendix
AstraZeneca What science can do
Slide 27: Geographic growth
Geographic growth Strong performance in all major regions China 35% 22% of Europe 1% Product Sales US 18% of 18% Japan 31% 33% of Product Sales 10% of Product Sales Product Sales Emerging Markets Rest of World (ex-China) Established 14% of 10% (ex-Japan) 6% Product Sales 3% of Product Sales H1 2019
Slide 28: Lung cancer: Tagrisso
Lung cancer: Tagrisso 1st-line standard of care in US and JP; launches elsewhere continued Strong performance in all Worldwide approvals: 84 countries (2nd- $m markets: +92% in H1 2019 line use) and 74 countries (1st-line use) 900 800 • US +64% (40% of total) • Europe +64% Return to sequential growt
Slide 29: Lung cancer: Imfinzi
Lung cancer: Imfinzi Opportunity outside the US continues to be realised US peak sales are PACIFIC (unresectable, Stage III US patient infusions $m expected at >$1bn NSCLC1) becoming new SoC2 continued to increase 350 1,000 • Worldwide approvals: 49 countries 900 300 (and 10 countries in bladder can
Slide 30: Lynparza: Leading PARP inhibitor treating more patients
Lynparza Leading PARP inhibitor treating more patients Eight quarters of strong Leading PARP inhibitor approved in 64 countries $m growth: +100% in H1 2019 in ovarian and in 40 countries in breast cancer 300 • US +76% (50% of total) • Europe +61% 250 Approval in 1st-line BRCAm ovarian Increased adop
Slide 31: BioPharmaceuticals: New CVRM
BioPharmaceuticals: New CVRM Blockbusters Farxiga and Brilinta continued global growth Steady Diabetes growth driven by Farxiga Continued growth $m SGLT21 the fastest-growing class of antidiabetics $m in Brilinta sales 750 1,500 • Farxiga +19% • Brilinta +26%: growth across all major +11% +6% US (+2
Slide 32: BioPharmaceuticals: Respiratory
BioPharmaceuticals: Respiratory Sales growth 10% and steady with Fasenra and Pulmicort leading Respiratory delivered Performance differentiated by Fasenra approved $m strong performance portfolio mix across geographies now in 47 countries +7% +10% 1,250 -13% 2,500 -3% • US +12% • US $208m Symbicort
Slide 33: Q2 2019: continued pipeline progress
Q2 2019: continued pipeline progress Highlights from the late-stage development Pipeline news Oncology • Imfinzi SCLC1 met Phase III primary endpoint Orphan Drug Designation (US) • Lynparza ovarian cancer (1st line, BRCAm2) regulatory approval (EU, JP) pancreatic cancer (BRCAm) regulatory submission
Slide 34: H1 2019 Reconciliation of Reported to Core Financial Measures
H1 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 9,122 52 51 - - 9,225 Distribution Expense (159) - - - - (159) R&D Expense (2,622) 64 53 - - (2,505) SG&A Exp
Slide 35: Q2 2019 Reconciliation of Reported to Core Financial Measures
Q2 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 4,760 14 26 - - 4,800 Distribution Expense (81) - - - - (81) R&D Expense (1,356) 30 46 - - (1,280) SG&A Expen
Slide 36: 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 37: 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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