Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q4 2008 Earnings Presentation
40 slides from Teva Pharmaceutical Industries's earnings presentation, Feb 17, 2009
Slide 1: Q4 2008 & FY2008 – Presentation to the Israeli Capital Market
1 Q4 2008 & FY2008 – Presentation to the Israeli Capital Market Shlomo Yanai President and CEO Teva Pharmaceutical Industries Ltd. 17 February 2009
Slide 2: Forward Looking Statements
Forward Looking Statements TODAY’S PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT BELIEFS AND EXPECTATIONS AND INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COU
Slide 3: Q4 – A Great End to A Great Year
Q4 – A Great End to A Great Year 3 Q4 2007 Q4 2008* Change Sales 2,576 2,848 +11% $m Net income 570 634 +11% $m EPS 0.69 0.76 +10% $ * Net income and EPS are non GAAP results
Slide 4: 2008 – An Extraordinary Year
2008 – An Extraordinary Year 4 2007 2008* Change Sales 9,408 11,085 +18% $m Net income 1,952 2,374 +22% $m EPS 2.38 2.86 +20% $ * Net income and EPS are non GAAP results
Slide 5: 2008 – An Extraordinary Year
2008 – An Extraordinary Year 5 Record Record Sales, Net Income & EPS Financial Record cash flow from operations: $3.2bn Results Record free cash flow: $2.2bn Extending US: Increased market share 2008: Global an extraordinary International: year Exceptional growth Leadership Europe: Improved market p
Slide 6: 2008 – An Extraordinary Year: Strategic Achievements
2008 – An Extraordinary Year 6 Major Barr Acquisition Strategic Spain: Bentley Acquisition Achievements Japan: Strategic Alliance with Kowa Biogenerics: Lonza Joint Venture Investing for CoGenesys Acquisition Leadership Tevagrastim: 1st Biosimilar Launched in EU
Slide 7: Track Record of Continuous Growth: North America
Track Record of Continuous Growth 7 North America Revenues $ million Up 19% 6,139 5,162 4,758 North America, 2,758 2,837 Pharmaceutical Sales 2004 2005 2006 2007 2008
Slide 8: Leadership in U.S. Overall market
Leadership in U.S. 8 Overall market (Brand + Generics) Market Share (%) # Company Total Rx (000's) 2007 2008 1 Teva 620,129 15.7 16.4 2 Mylan 307,922 8 8.2 3 Novartis 250,014 7.1 6.6 4 Watson 223,265 6 5.9 5 Pfizer 215,026 7 5.7 6 Merck 97,953 3.3 3.3 7 Mallinckrodt 95,434 2.5 2.6 8 Apotex 93,499 1.
Slide 9: Track Record of Continuous Growth: Europe
Track Record of Continuous Growth 9 Europe Revenues $ million Up 13% 2,782 Europe 2,462 2,014 North America 1,404 1,121 6,139 5,162 4,758 2,758 2,837 2004 2005 2006 2007 2008
Slide 10: Track Record of Continuous Growth: International
Track Record of Continuous Growth 10 International Revenues $ million Up 28% 1,561 International 1,223 1,049 2,782 2,462 Europe 2,014 484 419 1,121 1,404 6,139 North America 4,758 5,162 2,758 2,837 2004 2005 2006 2007 2008
Slide 11: Track Record of Continuous Growth: Teva Group
Track Record of Continuous Growth 11 Teva Group Revenues $ million 11,085 (Up 18%) 603 9,408 API 1,561 561 8,408 International 587 1,223 1,049 2,782 2,462 Europe 4,799 5,250 2,014 525 501 484 419 1,404 North America 1,121 6,139 4,758 5,162 2,758 2,837 2004 2005 2006 2007 2008
Slide 12: Copaxone – Global In-Market Sales
Copaxone® – Global In-Market Sales 12 $ million U.S. Non-U.S. +37% CAGR +32% 595 24% 2,262 1,713 211 884 435 1,414 43% 27% 619 1,176 166 498 394 1,378 384 1,094 26% 43% 916 269 782 2005 2006 2007 2008 Q4/07 Q4/08
Slide 13: Barr Integration: Creating even more synergies than anticipated
13 Barr Integration + Strong strategic fit Extends global market leadership Expands product portfolio and pipeline Creating even more synergies than anticipated!
Slide 14: 2008 At A Glance
2008 At A Glance 14 Record Performance Major Strategic Achievements Barr Integration Well Underway Balanced Business Model
Slide 15: Presentation by Bill Marth, President and CEO Teva North America
15 Q4 2008 & FY2008 – Presentation to the Israeli Capital Market Bill Marth President and CEO - Teva North America Teva Pharmaceutical Industries Ltd. 17 February 2009
Slide 16: Key elements of the U.S. strategy
Key elements of the U.S. strategy 16 • Significantly greater investment in R&D Product • Expand portfolio – new product launches portfolio • Heavy emphasis on Para IV filings • Leverage our scale for strategic and competitive Leadership advantage and scale • Supply chain preeminence Go-to- • Innovat
Slide 17: Leadership in U.S. generics
Leadership in U.S. generics 17 % of total Rx’s, full year, generics only 2008 Rx’s 2007 thousand 23.8 Teva 24.0 598 12.2 Mylan 11.9 307 8.9 Watson 9.4 223 7.5 Sandoz 8.2 189 3.8 Mallinckrodt 3.9 95 3.7 Apotex 2.6 93 3.6 Qualitest 3.5 90 3.3 ~1.6 million Rx’s per day Greenstone 3.4 82 3.1 50% more th
Slide 18: But also leading the total pharma market
But also leading the total pharma market 18 % of total Rx’s, full year, branded and generics 2008 Rx’s 2007 thousand Teva 16.4 620 15.7 Mylan 8.2 307 8.0 Novartis 6.6 250 7.1 Watson 5.9 223 6.0 Pfizer 5.7 215 7.0 Merck 2.6 98 3.3 Mallinckrodt 2.5 95 2.5 Apotex 2.5 93 1.7 Further expanding our 2.4 le
Slide 19: The U.S. generic industry's largest pipeline
The U.S. generic industry’s largest pipeline 19 U.S., February 5, 2009, Teva + Barr $110bn $53bn brand sales brand sales
Slide 20: Teva has the most valuable pipeline
Teva has the most valuable pipeline 20 Number of ANDAs pending, U.S., February 5, 2009 201 other 116 123 119 103 86 >60 first-to-file 85 >50 33 20 10 Teva + Barr Sandoz Mylan Watson Source: Investor earnings call transcripts and company statements
Slide 21: Large market coverage of pipeline
Large market coverage of pipeline 21 Market coverage of Teva development pipeline $290bn Opportunity 40% - $116bn 1 in 4 products in Teva – in development 22% - $64bn development have not established market yet 60% Teva - pending approval 38% - $110 bn 2008 U.S. pharma market Source: IMS, Teva estim
Slide 22: Broadest product portfolio
Broadest product portfolio 22 Number of products +90% Source: Investor earnings call transcripts and company statements
Slide 23: Benefits from a world-class supply chain
Benefits from a world-class supply chain 23 TEVA SUPPLY CHAIN COMPETITIVE EDGE • Complex global • Low cost coordination: - manufacturing sites - distribution centers • High service level • Tight integration with customer demand • Scale to support large launches information (Pantoprazole, Simvastatin
Slide 24: The generics industry is consolidating
The generics industry is consolidating 24 IMS TRx MAT 2008, % of total Faster organic growth 42% Others 65% Top 4 Big 58% #4 players 10% #3 get bigger 11% Top 4 7% #2 35% 13% 8% 12% 24% #1 - Teva 8% Better at M&A 1997 2007
Slide 25: Customers are consolidating
Customers are consolidating 25 Market share, % Major mergers since 2006 2002 2008 Others 22 21 Alberton's 6 10 Eckerd 11 12 Kroger 5 10 Wal-Mart 11 30 Rite Aid 17 CVS 27 18 Walgreens 2002 2007 7 retailers 4 retailers 78% 79%
Slide 26: Our big-to-big value proposition
Our big-to-big value proposition 26 Broadest product line: - All therapeutic areas - Most valuable products Capacity to delivery any order, even the largest ones Resources to co-invest: - Revenue initiatives (e.g., packaging) - Supply chain integration to save cost
Slide 27: Barr extends and accelerates 2012 strategy for North America
Barr extends and accelerates 2012 strategy 27 for North America Increase Teva’s Expands portfolio and pipeline leadership market share in Widens gap versus next largest competitor key markets Broadens our portfolio (e.g., hormones, high- potency), accelerating us to our 2X goal Double our prod
Slide 28: Presentation by Eyal Desheh, CFO
28 Q4 2008 & FY2008 – Presentation to the Israeli Capital Market Eyal Desheh CFO Teva Pharmaceutical Industries Ltd. 17 February 2009
Slide 29: Key figures
Key figures 29 All figures $bn, except EPS, $ Operating Sales +18% Gross profit +22% +13% Net income +20% EPS +20% profit 2.7 2.4 2.3 2006 2007 2008 * Operating income, Net income and EPS are non GAAP results for 2006 and 2008
Slide 30: Q4 sales by region
Q4 sales by region 30 Percent 2007 2008 100%=$2.6bn 100%=$2.8bn Rest of world 2 2 Latin America 2 2 4 6 4 6 Central, Eastern Europe Israel 28 51 25 Europe* 55 North America - TSP 7 6 North America - excl. TSP * EU members states, Norway and Switzerland
Slide 31: Full year sales by region
Full year sales by region 31 Percent 2007 2008 100%=$9.4bn 100%=$11.1bn Rest of world 2 2 Latin America 2 2 4 6 4 7 Central, Eastern Europe Israel Europe* 28 51 27 51 North America - TSP 7 7 North America - excl. TSP * EU members states, Norway and Switzerland
Slide 32: Foreign exchange rate effect – quarterly
Foreign exchange rate effect – quarterly 32 $ million unless stated otherwise Q4 Q4 FX FX real growth 2008 2007 effect effect growth Total sales 2,848 2,576 +11% -130 -5% +16% Operating profit 704 661 +7% -28 -4% +11% North America 1,652 1,435 +15% -17 -1% +16% Europe 668 664 +1% -88 -13% +14% Inter
Slide 33: Foreign exchange rate effect – full year
Foreign exchange rate effect – full year 33 $ million unless stated otherwise FX FX real 2008 2007 growth effect effect growth Total sales 11,085 9,408 +18% +227 2% +15% Operating profit 2,675 2,395 12% -65 -3% 14% North America 6,139 5,162 +19% +7 0% +19% Europe 2,782 2,462 +13% +146 +6% +7% Intern
Slide 34: Cash generation
Cash generation 34 969 806 179 746 132 710 90 Cash from operations 139 545 106 170 95 Net asset purchase 142 97 Dividends distributed 79 700 512 568 443 Free cash flow 324 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 $410m $366m $4,387m acquisitions acquisitions acquisitions
Slide 35: Balance sheet
Balance sheet 35 $ bn ASSETS LIABILITIES 31/12/2007 31/12/2008 31/12/2007 31/12/2008 Cash and investments 2.9 1.9 Short-term debt 1.8 2.3 Inventory, receivables 6.0 8.1 Convertible debentures 1.4 0.6 Other short-term assets 1.0 1.5 Other short-term liab. 2.1 5.6 Short-term assets 9.9 11.5 Short-term
Slide 36: Leverage – back to where we started!
Leverage – back to where we started! 36 24.7 24.7 1.2 2.9 18.8 19.4 4.9 0.7 5.5 Short-term debt 1.8 3.9 Long-term debt 3.3 18.6 14.8 16.3 Equity 13.7 31 Dec 30 Sep 31 Dec 31 Dec 2007 2008 2008 2009E Leverage 27% 24% 34% 25%
Slide 37: Dividend – 33% increase
Dividend – 33% increase 37 NIS $ million per share 140 0.65 0.60 0.60 120 0.55 0.50 100 0.45 0.45 0.40 80 0.40 0.34 127 0.35 106 60 95 97 90 0.30 75 79 72 73 0.25 40 56 59 59 0.20 20 0.15 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 12% of net income 15% of net income 17%
Slide 38: Number 10 on NASDAQ
Number 10 on NASDAQ 38 Market capitalization, $ bn, 13 February 2009 Microsoft 168 Cisco 94 Oracle 89 Apple 88 Google 86 Intel 77 Amgen 61 Qualcomm 59 Gilead 46 Teva 39 Comcast 28 RIMM 27 Amazon 27 DirecTV 24 Celgen 24
Slide 39: Outperforming peers and broader U.S. stock market
Outperforming peers and broader 39 U.S. stock market Teva DRG S&P 500 250% Teva, Health Sector, S&P 500 2/1/2003 - 11/2/ 09 200% 150% 100% 50%
Slide 40: Summary
Summary 40 A very strong ending to a better then forecasted year Foreign exchange impact: Sales for the year up, for the quarter down Reduced operating profit Very strong cash generation Low effective tax rate Solid balance sheet, better than planned leverage Increased dividend by 33
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