- 2023 revenues of $15.8 billion reflect an increase of 7% in
local currency terms, compared to 2022
- AUSTEDO® - exceeding $1.2 billion in annual revenues, up 28%
from 2022; strong growth expected to continue in 2024 with expected
revenues of ~$1.5 billion;
- AJOVY® - global annual revenues of $435 million, up 16% from
2022;
- Generics business continues to stabilize, back to revenue
growth
- Q4 2023 and full year 2023 figures include the impact of the
$500 million upfront payment received in connection with the
collaboration on our anti-TL1A asset
- Ongoing net debt reduction – reduced to $16.6 billion as of
December 31, 2023
- Pivot to Growth strategy in action:
- Teva api Intended divestiture will allow us to focus on our
core business strengths and capital allocation towards growth
engines and innovation
- Exclusive collaboration with Sanofi on anti TL1-A (TEV-‘574)
entered into in October 2023
- Funding agreement with Royalty Pharma on olanzapine LAI
(TEV-’749)
- License agreement with Biolojic Design on a BD9 multibody for
potential treatment of Atopic Dermatitis and Asthma
- 2024 Business Outlook:
- Revenues of $15.7 - $16.3 billion
- Non-GAAP operating income of $4.0-$4.5 billion
- Adjusted EBITDA of $4.5 - $5.0 billion
- Non-GAAP diluted EPS of $2.20 - $2.50
- Free cash flow of $1.7 - $2.0 billion
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today
reported results for the year and the quarter ended December 31,
2023.
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the full release here:
https://www.businesswire.com/news/home/20240131547177/en/
- Q4 2023 and Full Year 2023 Highlights:
Q4
2023
FY
2023
Revenues
$4.5 billion
$15.8 billion
GAAP diluted earnings (loss) per share
$0.41
$(0.50)
Non-GAAP diluted EPS
$1.00
$2.56
Cash flow generated from operating
activities
$1,184 million
$1,368 million
Free cash flow
$1,486 million
$2,387 million
Mr. Richard Francis, Teva's President and CEO, said:
"2023 has been a year of significant advances for Teva, a year in
which we gained momentum on our Pivot to Growth strategy, and
achieved strong growth on our key innovative brands, accelerated
our late-stage pipeline assets, and brought our generics business
back to growth.
Mr. Francis continued, "In 2024, we look forward to seeing
continued progress across our key innovative growth drivers, while
also executing on our high-value, complex generics business with
new product launches, and achieving the exciting clinical
milestones of our late-stage pipeline assets."
Pivot to Growth Strategy
In May 2023, we introduced our new “Pivot to Growth” strategy,
which is based on four key pillars: (i) delivering on our growth
engines, mainly AUSTEDO, AJOVY, UZEDY® and our late-stage pipeline
of biosimilars; (ii) stepping up innovation through delivering on
our late-stage innovative pipeline assets as well as building up
our early-stage pipeline organically and potentially through
business development activities; (iii) sustaining our generics
medicines powerhouse with a global commercial footprint, focused
portfolio, pipeline and manufacturing footprint; and (iv) focusing
our business by optimizing our portfolio and global manufacturing
footprint to enable strategic capital deployment to accelerate our
near and long-term growth engines and reorganizing certain of our
business units to a more optimal structure, while also reorganizing
key business units to enhance operational efficiency.
Revision of Previously Reported Consolidated Financial
Statements
In connection with the preparation of our consolidated financial
statements as of and for the fiscal year ended December 31, 2023,
we determined that there were errors in a single contingent
consideration liability and related expenses in connection with
estimated future royalty payments, along with corresponding
deferred tax adjustments, that aggregated into an understatement of
$132 million in the contingent consideration liability, of which
$98 million related to 2022 and $34 million related to 2023. These
errors resulted from the exclusion of royalty payments that should
have been included in the fair value re-measurement calculation of
the contingent consideration liability at each reporting period, as
of and for the year ended December 31, 2022 and the quarterly and
year-to-date periods ended June 30, September 30 and December 31,
2022, and March 31, June 30 and September 30, 2023. These errors
did not impact our actual royalty payments, as well as our total
cash flows from operating activities, financing activities and
investing activities for the periods stated above.
We assessed the materiality of these errors, individually and in
the aggregate, considering both qualitative and quantitative
factors, and determined that these errors were not material to any
of the prior periods. However, the aggregate amount of errors in
2022 is material to the consolidated statements of income (loss)
for fiscal year 2023. Therefore, we have corrected these errors as
a revision to our previously issued consolidated financial
statements. This revision did not impact our non-GAAP results.
In connection with these errors, management identified a
material weakness in our internal controls over financial reporting
as of December 31, 2023. We are in the process of implementing a
remediation plan to address the material weakness.
The tables below present the impact of the revision on
previously reported line items discussed within this press
release:
Three months ended
Year ended,
December 31, 2022
December 31, 2022
As previously reported
Adjustment
As revised
As previously reported
Adjustment
As revised
Other asset impairments, restructuring and
other items
132
85
217
414
98
512
Operating income (loss)
(855
)
(85
)
(940
)
(2,099
)
(98
)
(2,197
)
Income (loss) before income taxes
(1,100
)
(85
)
(1,185
)
(3,065
)
(98
)
(3,163
)
Income taxes (benefit)
154
(5
)
149
(638
)
(5
)
(643
)
Net income (loss)
(1,254
)
(80
)
(1,333
)
(2,406
)
(93
)
(2,499
)
Net income (loss) attributable to Teva
(1,221
)
(80
)
(1,301
)
(2,353
)
(93
)
(2,446
)
Earnings (loss) per share attributable to
ordinary shareholders:
Basic
(1.10
)
(0.07
)
(1.17
)
(2.12
)
(0.08
)
(2.20
)
Diluted
(1.10
)
(0.07
)
(1.17
)
(2.12
)
(0.08
)
(2.20
)
2023 Annual Consolidated
Results
The data presented in this press release with respect to
operating income (loss), income (loss) before income taxes, income
taxes (benefit), net income (loss) attributable to Teva and
earnings (loss) per share for prior periods have been revised to
reflect a revision in relation to a contingent consideration and
related expenses as explained above.
Revenues in 2023 were $15,846 million, an increase of 6%,
in U.S. dollars or 7% in local currency terms, compared to 2022.
This increase was mainly due to an upfront payment received in
connection with the collaboration on our anti-TL1A asset, higher
revenues from generic products in our International Markets and
Europe segments, higher revenues from our innovative products
AUSTEDO and AJOVY, the sale of certain product rights in our Europe
segment, as well as higher revenues from Anda, partially offset by
lower revenues from COPAXONE®, API sales to third parties, BENDEKA®
and TREANDA®, and generic products in our North America
segment.
Exchange rate movements during 2023, including hedging
effects, negatively impacted revenues by $172 million, operating
income by $111 million and non-GAAP operating income by $108
million, each as compared to 2022.
Gross profit was $7,645 million in 2023, an increase of
10% compared to 2022. Gross profit margin was 48.2% in 2023,
compared to 46.7% in 2022. The increase in gross profit margin was
mainly due to an upfront payment received in connection with the
collaboration on our anti-TL1A asset and higher revenues from
AUSTEDO in our North America segment, as well as the sale of
certain product rights in our Europe segment, partially offset by
higher cost of goods sold, mainly driven by higher costs due to
inflationary and other macroeconomic pressures, and lower revenues
from COPAXONE. Non-GAAP gross profit was $8,470
million in 2023, an increase of 5.1% compared to 2022.
Non-GAAP gross profit margin was 53.5% in 2023,
compared to 54.0% in 2022. The decrease in non-GAAP gross profit
margin was mainly due to higher cost of goods sold, mainly due to
inflationary and other macroeconomic pressures and lower revenues
from COPAXONE, partially offset by an upfront payment received in
connection with the collaboration on our anti-TL1A asset and higher
revenues from AUSTEDO in our North America segment, as well as the
sale of certain product rights in our Europe segment.
Research and Development (R&D) expenses, net
in 2023 were $953 million, an increase of 14% compared to $838
million in 2022, as we continue to execute on our Pivot to Growth
strategy. Our higher R&D expenses, net, in 2023, compared to
2022, were mainly due to an increase related to our late-stage
innovative pipeline in neuroscience (mainly neuropsychiatry), in
immunology and immuno-oncology, partially offset by a decline in
various generics projects, as well as lower R&D expenses
related to our biosimilar products pipeline. Additionally, in 2022
our R&D expenses were lower due to an adjustment in payments
pursuant to a contract with one of our R&D partners. Our
R&D expenses, net in 2023 were also impacted by reimbursements
from our strategic partnerships entered into in 2023.
Selling and Marketing (S&M) expenses in 2023
were $2,336 million, an increase of 3% compared to 2022.
General and Administrative (G&A) expenses in 2023
were $1,162 million, a decrease of 2% compared to 2022.
Other income in 2023 was $49 million, compared to $107
million in 2022.
Operating income was $433 million in 2023, compared to
operating loss of $2,197 million in 2022. Operating income as a
percentage of revenues was 2.7% in 2023, compared to operating loss
as a percentage of revenues of 14.7% in 2022. This increase was
mainly due to higher goodwill impairment charges and legal
settlements and loss contingencies in 2022. Non-GAAP operating
income was $4,361 million in 2023, or 27.5% of revenues
compared to $4,139 million, or 27.7% of revenues in 2022. The
decrease in non-GAAP operating margin was mainly impacted by lower
gross profit margin, as discussed above, partially offset by lower
operating expenses as a percentage of revenues.
Adjusted EBITDA was $4,818 million in 2023, compared to
$4,598 million in 2022.
In 2023, financial expenses, net were $1,057 million,
compared to $966 million in 2022. Financial expenses in 2023 were
mainly comprised of net-interest expenses of $961 million.
Financial expenses in 2022 were mainly comprised of net-interest
expenses of $921 million.
In 2023, we recognized a tax benefit of $7 million, or
1%, on a pre-tax loss of $624 million. In 2022, we recognized a tax
benefit of $643 million, or 20%, on a pre-tax loss of $3,163
million. Our tax rate for 2023 was lower than in 2022 mainly due to
higher goodwill impairment charges in 2022 that did not have a
corresponding tax effect. Non-GAAP tax rate for 2023
was 13.0%, compared to 11.7% in 2022. Our non-GAAP tax rate in 2023
was mainly affected by the mix of products we sold, net deferred
tax benefits from intellectual property related integration plans
and carryforward losses, adjustment to valuation allowances on
deferred tax assets and interest expense disallowances.
Net loss attributable to Teva and loss per share
in 2023 were $559 million and $0.50, respectively, compared to net
loss attributable to Teva of $2,446 million and loss per share of
$2.20 in 2022. This change in net income was mainly due to higher
goodwill impairment charges and legal settlements and loss
contingencies in 2022, partially offset by higher tax benefits in
2022. Non-GAAP net income attributable to Teva and
non-GAAP diluted earnings per share in 2023 were $2,898
million and $2.56, respectively, compared to $2,812 million and
$2.52 in 2022.
As of December 31, 2023 and 2022, the fully diluted share
count for purposes of calculating our market capitalization was
approximately 1,157 million and 1,143 million shares,
respectively.
Non-GAAP information: net non-GAAP adjustments in 2023
were $3,458 million. Non-GAAP net income attributable to Teva and
non-GAAP diluted EPS for the year were adjusted to exclude the
following items:
- Amortization of purchased intangible assets totaling $616
million, of which $549 million is included in cost of goods sold
and the remaining $67 million in S&M expenses;
- Legal settlements and loss contingencies of $1,043
million;
- Goodwill impairment charges of $700 million;
- Impairment of long-lived assets of $378 million.
- Restructuring expenses of $111 million;
- Costs related to regulatory actions taken in facilities of $4
million;
- Equity compensation expenses of $121 million;
- Contingent consideration expenses of $548 million;
- Gain on sale of business of $3 million;
- Accelerated depreciation of $80 million;
- Financial expenses of $66 million;
- Items attributable to non-controlling interests of $92
million;
- Other non-GAAP items of $330 million; and
- Corresponding tax effects and unusual tax items amounted to
income of $446 million.
We believe that excluding such items facilitates investors’
understanding of our business including underlying performance
trends, thereby improving the comparability of our business
performance results between reporting periods.
For a reconciliation of the U.S. GAAP results to the adjusted
non-GAAP figures and for additional information, see the tables
below and the information included under “Non-GAAP Financial
Measures.” Investors should consider non-GAAP financial measures in
addition to, and not as replacement for, or superior to, measures
of financial performance prepared in accordance with GAAP.
Cash flow generated from operating activities in 2023 was
$1,368 million, compared to $1,590 million in 2022. The decrease in
2023 resulted mainly from the sale of accounts receivables under
our U.S. securitization facility during 2022 and higher payments of
legal settlements in connection with the opioids litigation in
2023, partially offset by changes in working capital items,
including positive impacts of accounts payables and accounts
receivables in 2023, as well as higher tax payments in 2022.
During 2023, we generated free cash flow of $2,387
million, which we define as comprising $1,368 million in cash flow
generated from operating activities, $1,477 million in beneficial
interest collected in exchange for securitized accounts receivables
(under our EU securitization program) and $68 million proceeds from
sale of businesses and long lived assets, partially offset by $526
million in cash used for capital investments. During 2022, we
generated free cash flow of $2,243 million, which we define as
comprising $1,590 million in cash flow generated from operating
activities, $1,140 million in beneficial interest collected in
exchange for securitized accounts receivables and $68 million
proceeds from sale of businesses and long lived assets, partially
offset by $548 million in cash used for capital investments and $7
million in cash used for acquisition of businesses, net of cash
acquired. The increase in 2023 resulted mainly from higher
beneficial interest collected in exchange for securitized accounts
receivables under our EU securitization, partially offset by lower
cash flow generated from operating activities.
As of December 31, 2023, our debt was $19,833 million, compared
to $21,212 million as of December 31, 2022. This decrease was
mainly due to $1,646 million senior notes repaid at maturity,
partially offset by $302 million of exchange rate fluctuations.
Additionally, during the first quarter of 2023, we repurchased
$2,506 million aggregate principal amount of notes upon
consummation of a cash tender offer, and issued $2,445 million of
sustainability-linked senior notes net of issuance costs. In July
2023, a total amount of $700 million was withdrawn under our $1.8
billion unsecured syndicated sustainability-linked revolving credit
facility, entered into in April 2022, as amended in February 2023
("RCF"), of which $200 million was repaid in September 2023 and the
remaining amount of $500 million was repaid in the fourth quarter
of 2023. As of December 31, 2023 and as of the date of this press
release, no amounts were outstanding under the RCF. The portion of
total debt classified as short-term as of December 31, 2023 was 8%,
compared to 10% as of December 31, 2022. Our average debt maturity
was approximately 5.9 years as of December 31, 2023, compared to
5.8 years as of December 31, 2022.
In October 2023, Israel was attacked by a terrorist organization
and entered a state of war. As of the date of this press release,
the situation is evolving. Israel is included in Teva’s
International Markets segment results. Teva’s global headquarters
and several manufacturing and R&D facilities are located in
Israel. Currently, such activities in Israel remain largely
unaffected. Teva continues to maintain contingency plans with
backup production locations for key products. During the year ended
December 31, 2023, the impact of this war on Teva’s results of
operations and financial condition was immaterial, but such impact
may increase, which could be material, as a result of the
continuation, escalation or expansion of such war.
Fourth Quarter 2023 Consolidated
Results
The data presented in this press release with respect to
operating income (loss), income (loss) before income taxes, income
taxes (benefit), net income (loss) attributable to Teva and
earnings (loss) per share for prior periods have been revised to
reflect a revision in relation to a contingent consideration and
related expenses as explained above.
Revenues in the fourth quarter of 2023 were $4,457
million, an increase of 15% in U.S. dollars or 14% in local
currency terms compared to the fourth quarter of 2022. This
increase was mainly due to an upfront payment received in
connection with the collaboration on our anti-TL1A asset, the sale
of certain product rights in our Europe segment, higher revenues
from generic products in our International Markets segment and from
AUSTEDO in our North America segment, partially offset by lower
revenues from generic products and Anda in our North America
segment, and from COPAXONE.
Exchange rate movements during the fourth quarter of
2023, net of hedging effects, positively impacted our revenues by
$17 million, compared to the fourth quarter of 2022. Exchange rate
movements during the fourth quarter of 2023, net of hedging
effects, positively impacted our operating income and non-GAAP
operating income by $11 million and $12 million, respectively,
compared to the fourth quarter of 2022.
Gross profit in the fourth quarter of 2023 was $2,416
million, an increase of 36% compared to $1,770 million in the
fourth quarter of 2022. Gross profit margin was 54.2% in the fourth
quarter of 2023, compared to 45.6% in the fourth quarter of 2022.
Non-GAAP gross profit was $2,592 million in the fourth
quarter of 2023, an increase of 23% compared to the fourth quarter
of 2022. Non-GAAP gross profit margin was 58.2% in the fourth
quarter of 2023, compared to 54.2% in the fourth quarter of 2022.
The increase in both gross profit margin and non-GAAP gross profit
margin was mainly driven by an upfront payment received in
connection with the collaboration on our anti-TL1A asset and a
favorable mix of products in our North America segment, as well as
the sale of certain product rights in our Europe segment, partially
offset by higher cost of goods sold, mainly driven by higher costs
due to inflationary and other macroeconomic pressures.
Research and Development (R&D) expenses, net
in the fourth quarter of 2023 were $227 million, an increase of 8%
compared to $210 million in the fourth quarter of 2022, as we
continue to execute on our Pivot to Growth strategy. The increase
in R&D expenses, net in the fourth quarter of 2023 was mainly
due to an increase related to our late-stage innovative pipeline in
neuroscience (mainly neuropsychiatry), in immunology and
immuno-oncology, partially offset by a decline in various generics
projects, as well as lower R&D expenses related to our
biosimilar products pipeline. Our R&D expenses, net in the
fourth quarter of 2023 were also impacted by reimbursements from
our strategic partnerships entered into in 2023.
Selling and Marketing (S&M) expenses in the
fourth quarter of 2023 were $610 million, an increase of 11%
compared to the fourth quarter of 2022.
General and Administrative (G&A) expenses in the
fourth quarter of 2023 were $291 million, an increase of 1%
compared to the fourth quarter of 2022.
Other income in the fourth quarter of 2023 was $6
million, compared to $19 million in the fourth quarter of 2022.
Operating income in the fourth quarter of 2023 was $755
million, compared to an operating loss of $940 million in the
fourth quarter of 2022. Operating income as a percentage of
revenues was 17.0% in the fourth quarter of 2023, compared to
operating loss of 24.2% in the fourth quarter of 2022. This
increase was mainly due to goodwill impairment charges in the
fourth quarter of 2022 and higher gross profit in the fourth
quarter of 2023, partially offset by higher other assets
impairments, restructuring and other items in the fourth quarter of
2023. Non-GAAP operating income in the fourth quarter of
2023 was $1,546 million representing a non-GAAP operating margin of
34.7% compared to non-GAAP operating income of $1,130 million
representing a non-GAAP operating margin of 29.1% in the fourth
quarter of 2022. The increase in non-GAAP operating margin in the
fourth quarter of 2023 was mainly impacted by higher non-GAAP gross
profit margin, as discussed above, as well as lower operating
expenses as a percentage of revenues.
Adjusted EBITDA was $1,660 million in the fourth quarter
of 2023, an increase of 34%, compared to $1,240 million in the
fourth quarter of 2022.
Financial expenses, net in the fourth quarter of 2023
were $249 million, compared to $245 million in the fourth quarter
of 2022. Financial expenses, net in the fourth quarter of 2023 and
2022, were mainly comprised of net interest expenses of $238
million and $222 million, respectively.
In the fourth quarter of 2023, we recognized a tax
expense of $43 million on a pre-tax income of $507 million,
mainly due to adjustments to valuation allowances on deferred tax
assets. In the fourth quarter of 2022, we recognized a tax expense
of $149 million on a pre-tax loss of $1,185 million. Non-GAAP
tax rate in the fourth quarter of 2023 was 13.1%, compared to
11.0% in the fourth quarter of 2022. Our non-GAAP tax rate in the
fourth quarter of 2023 was mainly affected by the generation of
profits in various jurisdictions with different tax rates,
adjustments to valuation allowances on deferred tax assets,
interest expense disallowances, tax benefits in Israel and other
countries, as well as infrequent or non-recurring items. Our
non-GAAP tax rate in the fourth quarter of 2022 was mainly affected
by the mix of products we sold, interest expense disallowances and
adjustments to valuation allowances on deferred tax assets.
Net income attributable to Teva and diluted earnings
per share in the fourth quarter of 2023 were $461 million and
$0.41, respectively, compared to net loss of $1,301 million and
loss per share of $1.17, respectively, in the fourth quarter of
2022. The higher net income in the fourth quarter of 2023 was
mainly due to higher operating income in 2023, as discussed above.
Non-GAAP net income attributable to Teva and non-GAAP
diluted earnings per share in the fourth quarter of 2023
were $1,135 million and $1.00, respectively, compared to $791
million and $0.71, respectively, in the fourth quarter of 2022.
Non-GAAP information: net non-GAAP adjustments in the
fourth quarter of 2023 were $674 million. Non-GAAP net income
attributable to Teva and non-GAAP diluted EPS for the fourth
quarter were adjusted to exclude the following items:
- Amortization of purchased intangible assets of $144 million, of
which $129 million is included in cost of sales and the remaining
$16 million in S&M expenses;
- Legal settlements and loss contingencies of $34 million;
- Impairment of long-lived assets of $68 million;
- Restructuring expenses of $18 million;
- Costs related to regulatory actions taken in facilities of $2
million;
- Equity compensation expenses of $28 million;
- Contingent consideration expenses of $408 million;
- Accelerated depreciation of $6 million;
- Financial expenses of $13 million;
- Items attributable to non-controlling interests in an amount of
$1 million;
- Other non-GAAP items of $81 million; and
- Corresponding tax effects and unusual tax items of $128
million.
We believe that excluding such items facilitates investors'
understanding of our business including underlying performance
trends, thereby improving the comparability of our business
performance results between reporting periods. For further
information, see the tables below for a reconciliation of the U.S.
GAAP results to the adjusted non-GAAP figures and the information
under “Non-GAAP Financial Measures.” Investors should consider
non-GAAP financial measures in addition to, and not as replacement
for, or superior to, measures of financial performance prepared in
accordance with GAAP.
Cash flow generated from operating activities during the
fourth quarter of 2023 was $1,184 million, compared to $973 million
in the fourth quarter of 2022. The increase in the fourth quarter
of 2023 resulted mainly from changes in working capital items,
including positive impacts of accounts receivables and accounts
payables, partially offset by the sale of accounts receivables
under our U.S. securitization facility during 2022 and higher
payments of legal settlements in connection with the opioids
litigation. Cash flow generated from operating activities in the
fourth quarter of 2023 included an upfront payment of $500 million
received in connection with the collaboration on our anti-TL1A
asset.
During the fourth quarter of 2023, we generated free cash
flow of $1,486 million, which we define as comprising $1,184
million in cash flow generated from operating activities, $421
million in beneficial interest collected in exchange for
securitized accounts receivables (under our EU securitization
program), partially offset by $120 million in cash used for capital
investments, compared to $1,140 million in the fourth quarter of
2022. The increase resulted mainly from higher cash flow generated
from operating activities.
Segment Results for the Fourth Quarter
of 2023
North America Segment
Our North America segment includes the United States and Canada.
As part of a recent shift in executive management responsibilities,
commencing January 1, 2024, Canada will be reported as part of our
International Markets segment.
The following table presents revenues, expenses and profit for
our North America segment for the three months ended December 31,
2023 and 2022:
Three months ended December
31,
2023
2022
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
2,365
100%
$
2,002
100%
Gross profit
1,470
62.2%
1,085
54.2%
R&D expenses
147
6.2%
131
6.6%
S&M expenses
261
11.0%
209
10.4%
G&A expenses
97
4.1%
113
5.7%
Other income
(1
)
§
(2
)
§
Segment profit*
$
966
40.9%
$
633
31.6%
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than 0.5%.
Revenues from our North America segment in the fourth
quarter of 2023 were $2,365 million, an increase of 18% compared to
the fourth quarter of 2022, mainly due to an upfront payment in
connection with the collaboration on our anti-TL1A asset and higher
revenues from AUSTEDO, partially offset by a lower revenues from
generic products, COPAXONE and BENDEKA and TREANDA, as well as from
Anda.
Revenues in the United States, our largest market, were
$2,265 million in the fourth quarter of 2023, an increase of $352
million, or 18%, compared to the fourth quarter of 2022.
Revenues by Major Products and Activities
The following table presents revenues for our North America
segment by major products and activities for the three months ended
December 31, 2023 and 2022:
Three months ended
December 31,
Percentage
Change
2023
2022
2023-2022
(U.S. $ in millions)
Generic products
$
754
$
818
(8%)
AJOVY
63
75
(17%)
AUSTEDO
408
344
18%
BENDEKA and TREANDA
53
75
(29%)
COPAXONE
78
101
(24%)
Anda
394
450
(13%)
Other
617
138
347%
Total
$
2,365
$
2,002
18%
* Other revenues mainly related to an
upfront payment of $500 million received in the fourth quarter of
2023 in connection with the collaboration on our anti-TL1A
asset.
Generic products revenues in our North America segment in
the fourth quarter of 2023 decreased by 8% to $754 million,
compared to the fourth quarter of 2022, mainly due to increased
competition to parts of our portfolio.
In the fourth quarter of 2023, our total prescriptions were
approximately 78 million representing 8% of total U.S. generic
prescriptions according to IQVIA data.
AJOVY revenues in our North America segment in the fourth
quarter of 2023 were $63 million compared to $75 million in the
fourth quarter of 2022. This decrease was mainly due to lower
volumes and unfavorable net pricing.
AUSTEDO revenues in our North America segment in the
fourth quarter of 2023 were $408 million, compared to $344 million
in the fourth quarter of 2022. This increase was mainly due to
growth in volume including the launch of AUSTEDO XR in May
2023.
BENDEKA and TREANDA combined revenues in our North
America segment in the fourth quarter of 2023 decreased by 29% to
$53 million, compared to the fourth quarter of 2022, mainly due to
generic bendamustine products entry into the market.
COPAXONE revenues in our North America segment in the
fourth quarter of 2023 decreased by 24% to $78 million, compared to
the fourth quarter of 2022, mainly due to generic competition in
the United States and a decrease in glatiramer acetate market share
due to availability of alternative therapies.
Anda revenues in our North America segment in the fourth
quarter of 2023 decreased by 13% to $394 million, compared to the
fourth quarter of 2022, mainly due to lower demand.
North America Gross Profit
Gross profit from our North America segment in the fourth
quarter of 2023 was $1,470 million, an increase of 36% compared to
the fourth quarter of 2022.
Gross profit margin for our North America segment in the
fourth quarter of 2023 increased to 62.2%, compared to 54.2% in the
fourth quarter of 2022. This increase was mainly due to an upfront
payment in connection with the collaboration on our anti-TL1A asset
as discussed above, partially offset by higher costs due to
inflationary and other macroeconomic pressures.
North America Profit
Profit from our North America segment consists of gross profit
less R&D expenses, S&M expenses, G&A expenses and any
other income related to this segment. Segment profit does not
include amortization and certain other items.
Profit from our North America segment in the fourth quarter of
2023 was $966 million, an increase of 53% compared to $633 million
in the fourth quarter of 2022. Profit increased mainly due to
higher revenues, partially offset by higher S&M expenses.
Europe Segment
Our Europe segment includes the European Union, the United
Kingdom and certain other European countries.
The following table presents revenues, expenses and profit for
our Europe segment for the three months ended December 31, 2023 and
2022:
Three months ended December
31,
2023
2022
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,344
100%
$
1,129
100%
Gross profit
783
58.3%
669
59.3%
R&D expenses
52
3.9%
55
4.9%
S&M expenses
203
15.1%
187
16.6%
G&A expenses
67
5.0%
63
5.6%
Other income
§
§
(2
)
§
Segment profit*
$
461
34.3%
$
366
32.4%
___________
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our Europe segment in the fourth quarter of
2023 were $1,344 million, an increase of $215 million, or 19%,
compared to the fourth quarter of 2022. In local currency terms,
revenues increased by 10%, mainly due to higher revenues from OTC
products and AJOVY, partially offset by lower revenues from
COPAXONE and certain other respiratory products. Our higher
revenues in the fourth quarter of 2023 were also driven by the sale
of certain product rights.
In the fourth quarter of 2023, revenues were positively impacted
by exchange rate fluctuations of $100 million, including hedging
effects, compared to the fourth quarter of 2022. Revenues in the
fourth quarter of 2023 included $20 million from a negative hedging
impact, which are included in “Other” in the table below.
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by
major products and activities for the three months ended December
31, 2023 and 2022:
Three months ended
December 31,
Percentage
Change
2023
2022
2023-2022
(U.S. $ in millions)
Generic products
$
938
$
914
3%
AJOVY
45
35
31%
COPAXONE
56
61
(8%)
Respiratory products
70
75
(7%)
Other
234
43
443%
Total
$
1,344
$
1,129
19%
* "Other" revenues were mainly related to
the sale of certain product rights.
Generic products revenues (including OTC and biosimilar
products) in our Europe segment in the fourth quarter of 2023,
increased by 3% to $938 million, compared to the fourth quarter of
2022. In local currency terms, revenues decreased by 3%, mainly due
to price reductions related to generic products launched in 2022,
partially offset by OTC price increases.
AJOVY revenues in our Europe segment in the fourth
quarter of 2023 increased by 31% to $45 million, compared to the
fourth quarter of 2022. In local currency terms, revenues increased
by 26%, due to higher volumes.
COPAXONE revenues in our Europe segment in the fourth
quarter of 2023 decreased by 8% to $56 million, compared to the
fourth quarter of 2022. In local currency terms, revenues decreased
by 13% mainly due to price reductions and a decline in volumes
resulting from competing glatiramer acetate products and
availability of alternative therapies.
Respiratory products revenues in our Europe
segment in the fourth quarter of 2023 decreased by 7% to $70
million, compared to the fourth quarter of 2022. In local currency
terms, revenues decreased by 12%, mainly due to net price
reductions and lower volumes.
Europe Gross Profit
Gross profit from our Europe segment in the fourth
quarter of 2023 was $783 million, an increase of 17% compared to
$669 million in the fourth quarter of 2022.
Gross profit margin for our Europe segment in the fourth
quarter of 2023 decreased to 58.3%, compared to 59.3% in the fourth
quarter of 2022. This decrease was mainly due to higher cost of
goods sold mainly due to inflationary and other macroeconomic
pressures, and a negative impact of hedging activities, partially
offset by revenues from the sale of certain product rights in the
fourth quarter of 2023.
Europe Profit
Profit from our Europe segment consists of gross profit less
R&D expenses, S&M expenses, G&A expenses and any other
income related to this segment. Segment profit does not include
amortization and certain other items.
Profit from our Europe segment in the fourth quarter of
2023 was $461 million, an increase of 26% compared to $366 million
in the fourth quarter of 2022. This increase was mainly due to
higher gross profit.
International Markets Segment
Our International Markets segment includes all countries other
than those in our North America and Europe segments.
As part of a recent shift in executive management
responsibilities, commencing January 1, 2024, Canada will be
reported under our International Markets segment and will no longer
be included as part of our North America segment.
The following table presents revenues, expenses and profit for
our International Markets segment for the three months ended
December 31, 2023 and 2022:
Three months ended December
31,
2023
2022
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
502
100%
$
482
100%
Gross profit
272
54.3%
253
52.6%
R&D expenses
20
3.9%
18
3.7%
S&M expenses
110
21.9%
112
23.2%
G&A expenses
30
6.0%
30
6.3%
Other income
(4
)
(0.8%)
§
§
Segment profit*
$
116
23.2%
$
93
19.4%
__________
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our International Markets segment in the
fourth quarter of 2023 were $502 million, an increase of $20
million, or 4%, compared to the fourth quarter of 2022. In local
currency terms, revenues increased by 22% compared to the fourth
quarter of 2022, mainly due to higher revenues in most markets,
partially offset by regulatory price reductions and generic
competition to off-patented products in Japan.
Revenues by Major Products and Activities
The following table presents revenues for our International
Markets segment by major products and activities for the three
months ended December 31, 2023 and 2022:
Three months ended
December 31,
Percentage
Change
2023
2022
2023-2022
(U.S. $ in millions)
Generic products
$
420
$
411
2%
AJOVY
13
13
§
COPAXONE
7
7
§
Other
62
51
23%
Total
$
502
$
482
4%
§ Represents an amount less than 0.5%.
Generic products revenues in our International Markets
segment, including OTC products, were $420 million in the fourth
quarter of 2023, an increase of 2% compared to the fourth quarter
of 2022. In local currency terms, revenues increased by 24%, mainly
due to higher revenues in most markets, partially offset by
regulatory price reductions and generic competition to off-patented
products in Japan.
AJOVY was launched by the end of 2023 in certain
countries within our International Markets segment, including in
Japan, Australia, Israel, South Korea, Brazil and others. We are
moving forward with plans to launch AJOVY in other markets. AJOVY
revenues in our International Markets segment in the fourth quarter
of 2023 were $13 million, flat compared to the fourth quarter of
2022. In local currency terms, revenues increased by 7%.
COPAXONE revenues in our International Markets segment in
the fourth quarter of 2023 were $7 million, flat compared to the
fourth quarter of 2022. In local currency terms, revenues increased
by 34%.
AUSTEDO was launched in 2021 in China and Israel and in
Brazil in 2022, for the treatment of chorea associated with
Huntington’s disease and for the treatment of tardive
dyskinesia.
International Markets Gross Profit
Gross profit from our International Markets segment in
the fourth quarter of 2023 was $272 million, an increase of 8%
compared to $253 million in the fourth quarter of 2022.
Gross profit margin for our International Markets segment
in the fourth quarter of 2023 increased to 54.3%, compared to 52.6%
in the fourth quarter of 2022 mainly due to price increases largely
as a result of higher costs due to inflationary pressure, a
favorable mix of products sold, and a positive hedging impact.
International Markets Profit
Profit from our International Markets segment consists of gross
profit less R&D expenses, S&M expenses, G&A expenses
and any other income related to this segment. Segment profit does
not include amortization and certain other items.
Profit from our International Markets segment in the
fourth quarter of 2023 was $116 million, compared to $93 million in
the fourth quarter of 2022. This increase was mainly due to higher
gross profit.
Other Activities
We have other sources of revenues, primarily the sale of active
pharmaceutical ingredients ("APIs") to third parties, certain
contract manufacturing services and an out-licensing platform
offering a portfolio of products to other pharmaceutical companies
through our affiliate Medis. Our other activities are not included
in our North America, Europe or International Markets segments.
Our revenues from other activities in the fourth quarter
of 2023 were $246 million, a decrease of 10% compared to the fourth
quarter of 2022. In local currency terms revenues decreased by
11%.
API sales to third parties in the fourth quarter of 2023
were $153 million, a decrease of 9% in both U.S. dollars and local
currency terms, compared to the fourth quarter of 2022.
On January 31, 2024, we announced that we intend to divest our
API business (including its R&D, manufacturing and commercial
activities) through a sale, which divestment is expected to be
completed in the first half of 2025. The intention to divest is in
alignment with our Pivot to Growth strategy. However, there can be
no assurance regarding the ultimate timing or structure of the
potential divestiture or that a divestiture will be agreed or
completed at all.
2024 Non-GAAP Outlook
$ billions, except diluted EPS or as
noted
2024 Outlook
Revenues*
$15.7 – $16.3
AUSTEDO ($m)*
~1,500
AJOVY ($m)*
~500
UZEDY ($m)*
~80
COPAXONE ($m)*
~400
Operating Income
4.0 – 4.5
Adjusted EBITDA
4.5 – 5.0
Finance Expenses ($m)
~1,000
Tax Rate
14% – 17%
Diluted EPS ($)
2.20-2.50
Free Cash Flow**
1.7 - 2.0
CAPEX*
~0.5
Foreign Exchange
Volatile swings in FX can
negatively
impact revenue and income
* Revenues and CAPEX presented on a GAAP
basis.
** Free Cash Flow includes cash flow
generated from operating activities net of capital expenditures and
deferred purchase price cash component collected for securitized
trade receivables
Annual Report on Form 10-K
Teva's Annual Report on Form 10-K for the year ended December
31, 2023, which will be filed with the SEC, will include a complete
analysis of the financial results for 2023 and will be available on
Teva’s website: http://ir.tevapharm.com, as well as on the SEC’s
website: http://www.sec.gov.
Conference Call
Teva will host a conference call and live webcast along with a
slide presentation on Wednesday, January 31, 2024 at 8:00 a.m. ET
to discuss its fourth quarter and annual 2023 results and overall
business environment. A question & answer session will
follow.
In order to participate, please register in advance here to
obtain a local or toll-free phone number and your personal pin.
A live webcast of the call will be available on Teva's website
at: http://ir.tevapharm.com/.
Following the conclusion of the call, a replay of the webcast
will be available within 24 hours on Teva’s website.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a
global pharmaceutical leader with a category-defying portfolio,
harnessing our generics expertise and stepping up innovation to
continue the momentum behind the discovery, delivery, and expanded
development of modern medicine. For over 120 years, Teva's
commitment to bettering health has never wavered. Today, the
company’s global network of capabilities enables its 37,000
employees across 58 markets to push the boundaries of scientific
innovation and deliver quality medicines to help improve health
outcomes of millions of patients every day. To learn more about how
Teva is all in for better health, visit www.tevapharm.com.
Some amounts in this press release may not add up due to
rounding. All percentages have been calculated using unrounded
amounts.
Non-GAAP Financial Measures
This press release contains certain financial information that
differs from what is reported under accounting principles generally
accepted in the United States ("GAAP"). These non-GAAP financial
measures, including, but not limited to, non-GAAP operating income,
non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross
profit margin, Adjusted EBITDA, free cash flow, non-GAAP tax rate,
non-GAAP net income (loss) attributable to Teva and non-GAAP
diluted EPS, are presented in order to facilitate investors'
understanding of our business. We utilize certain non-GAAP
financial measures to evaluate performance, in conjunction with
other performance metrics. The following are examples of how we
utilize the non-GAAP measures: our management and board of
directors use the non-GAAP measures to evaluate our operational
performance, to compare against work plans and budgets, and
ultimately to evaluate the performance of management; our annual
budgets are prepared on a non-GAAP basis; and senior management’s
annual compensation is derived, in part, using these non-GAAP
measures. See the attached tables for a reconciliation of the GAAP
results to the adjusted non-GAAP measures. Investors should
consider non-GAAP financial measures in addition to, and not as
replacements for, or superior to, measures of financial performance
prepared in accordance with GAAP. We are not providing forward
looking guidance for GAAP reported financial measures or a
quantitative reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable GAAP measure because we
are unable to predict with reasonable certainty the ultimate
outcome of certain significant items including, but not limited to,
the amortization of purchased intangible assets, legal settlements
and loss contingencies, impairment of long-lived assets and
goodwill impairment, without unreasonable effort. These items are
uncertain, depend on various factors, and could be material to our
results computed in accordance with GAAP.
Cautionary Note Regarding Forward-Looking Statements
This press release 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
uncertainties, both known and unknown, that could cause our future
results, performance or achievements to differ significantly from
that expressed or implied by such forward-looking statements. You
can identify these forward-looking statements by the use of words
such as “should,” “expect,” “anticipate,” “estimate,” “target,”
“may,” “project,” “guidance,” “intend,” “plan,” “believe” and other
words and terms of similar meaning and expression in connection
with any discussion of future operating or financial performance.
Important factors that could cause or contribute to such
differences include risks relating to:
- our ability to successfully compete in the marketplace,
including: that we are substantially dependent on our generic
products; concentration of our customer base and commercial
alliances among our customers; delays in launches of new generic
products; our ability to develop and commercialize
biopharmaceutical products; competition for our innovative
medicines; our ability to achieve expected results from investments
in our product pipeline; our ability to develop and commercialize
additional pharmaceutical products; our ability to successfully
launch and execute our new Pivot to Growth strategy, including to
expand our innovative and biosimilar medicines pipeline and
profitably commercialize the innovative medicines and biosimilar
portfolio, whether organically or through business development, and
to sustain and focus our portfolio of generics medicines; and the
effectiveness of our patents and other measures to protect our
intellectual property rights, including any potential challenges to
our Orange Book patent listings in the U.S.;
- our substantial indebtedness, which may limit our ability to
incur additional indebtedness, engage in additional transactions or
make new investments, may result in a future downgrade of our
credit ratings; and our inability to raise debt or borrow funds in
amounts or on terms that are favorable to us.
- our business and operations in general, including: the impact
of global economic conditions and other macroeconomic developments
and the governmental and societal responses thereto; the widespread
outbreak of an illness or any other communicable disease, or any
other public health crisis; effectiveness of our optimization
efforts; our ability to attract, hire, integrate and retain highly
skilled personnel; interruptions in our supply chain or problems
with internal or third party manufacturing; disruptions of
information technology systems; breaches of our data security;
challenges associated with conducting business globally, including
political or economic instability, major hostilities or terrorism,
such as the ongoing conflict between Russia and Ukraine and the
state of war declared in Israel; costs and delays resulting from
the extensive pharmaceutical regulation to which we are subject;
our ability to successfully bid for suitable acquisition targets or
licensing opportunities, or to consummate and integrate
acquisitions; the effect of governmental and civil proceedings and
litigation which we are, or in the future become, party to; and our
prospects and opportunities for growth if we sell assets or
business units and close or divest plants and facilities, as well
as our ability to successfully and cost-effectively consummate such
sales and divestitures;
- compliance, regulatory and litigation matters, including:
failure to comply with complex legal and regulatory environments;
the effects of governmental and civil proceedings and litigation
which we are, or in the future become, party to; the effects of
reforms in healthcare regulation and reductions in pharmaceutical
pricing, reimbursement and coverage; increased legal and regulatory
action in connection with public concern over the abuse of opioid
medications; our ability to timely make payments required under our
nationwide opioids settlement agreement and provide our generic
version of Narcan® (naloxone hydrochloride nasal spray) in the
amounts and at the times required under the terms of such
agreement; scrutiny from competition and pricing authorities around
the world, including our ability to comply with and operate under
our deferred prosecution agreement with the U.S. Department of
Justice; potential liability for intellectual property right
infringement; product liability claims; failure to comply with
complex Medicare, Medicaid and other governmental programs
reporting and payment obligations; compliance with anti-corruption,
sanctions and trade control laws; environmental risks; and the
impact of Environmental, Social and Governance issues;
- the impact of the state of war declared in Israel and the
military activity in the region, including the risk of disruptions
to our operations and facilities, such as our manufacturing and
R&D facilities, located in Israel, the impact of our employees
who are military reservists being called to active military duty,
and the impact of the war on the economic, social and political
stability of Israel;
- other financial and economic risks, including: our exposure to
currency fluctuations and restrictions as well as credit risks;
potential impairments of our long-lived assets; the impact of
geopolitical conflicts including the state of war declared in
Israel and the conflict between Russia and Ukraine; potential
significant increases in tax liabilities; the effect on our overall
effective tax rate of the termination or expiration of governmental
programs or tax benefits, or of a change in our business; and our
ability to remediate any material weaknesses;
and other factors discussed in this press release, and in our
Annual Report on Form 10-K for the year ended December 31, 2023,
including in the sections captioned "Risk Factors” and “Forward
Looking Statements.” Forward-looking statements speak only as of
the date on which they are made, and we assume no obligation to
update or revise any forward-looking statements or other
information contained herein, whether as a result of new
information, future events or otherwise. You are cautioned not to
put undue reliance on these forward-looking statements.
Consolidated Statements of
Income (U.S. dollars in millions, except share and per
share data) (Unaudited)
Three months ended Year
ended December 31, December 31,
2023
2022
2023
2022
Net revenues
4,457
3,884
15,846
14,925
Cost of sales
2,041
2,113
8,200
7,952
Gross profit
2,416
1,770
7,645
6,973
Research and development expenses, net
227
210
953
838
Selling and marketing expenses
610
549
2,336
2,265
General and administrative expenses
291
289
1,162
1,180
Intangible assets impairment
61
132
350
355
Goodwill impairment
-
1,300
700
2,045
Other asset impairments, restructuring and other items
443
217
718
512
Legal settlements and loss contingencies
34
34
1,043
2,082
Other income
(6
)
(19
)
(49
)
(107
)
Operating income (loss)
755
(940
)
433
(2,197
)
Financial expenses – net
249
245
1,057
966
Income (loss) before income taxes
507
(1,185
)
(624
)
(3,163
)
Income taxes (benefit)
43
149
(7
)
(643
)
Share in (profits) losses of associated companies, net
(1
)
-
(2
)
(21
)
Net income (loss)
465
(1,333
)
(615
)
(2,499
)
Net income (loss) attributable to non-controlling interests
4
(32
)
(56
)
(53
)
Net income (loss) attributable to Teva
461
(1,301
)
(559
)
(2,446
)
Earnings (loss) per share
attributable to Teva: Basic ($)
0.41
(1.17
)
(0.50
)
(2.20
)
Diluted ($)
0.41
(1.17
)
(0.50
)
(2.20
)
Weighted average number of shares (in millions):
Basic
1,121
1,111
1,119
1,110
Diluted
1,137
1,111
1,119
1,110
Non-GAAP net income attributable to Teva for
diluted earnings per share:*
1,135
791
2,898
2,812
Non-GAAP earnings per share attributable to Teva:*
Diluted ($)
1.00
0.71
2.56
2.52
Non-GAAP average number of shares (in millions):
Diluted
1,137
1,121
1,131
1,115
* See reconciliation attached.
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
(Unaudited) December 31,
December 31,
2023
2022
ASSETS Current assets: Cash and cash equivalents
3,226
2,801
Accounts receivables, net of allowance for credit losses of $95
million and $91 million as of December 31, 2023 and December 31,
2022
3,408
3,696
Inventories
4,021
3,833
Prepaid expenses
1,255
1,162
Other current assets
504
549
Assets held for sale
70
10
Total current assets
12,485
12,051
Deferred income taxes
1,812
1,458
Other non-current assets
470
441
Property, plant and equipment, net
5,750
5,739
Operating lease right-of-use assets
397
419
Identifiable intangible assets, net
5,387
6,270
Goodwill
17,177
17,633
Total assets
43,479
44,011
LIABILITIES & EQUITY Current liabilities:
Short-term debt
1,672
2,109
Sales reserves and allowances
3,535
3,750
Trade payables
2,602
1,887
Employee-related obligations
611
566
Accrued expenses
2,771
2,151
Other current liabilities
1,056
1,005
Total current liabilities
12,247
11,469
Long-term liabilities: Deferred income taxes
606
548
Other taxes and long-term liabilities
4,019
3,945
Senior notes and loans
18,161
19,103
Operating lease liabilities
320
349
Total long-term liabilities
23,106
23,944
Equity: Teva shareholders’ equity:
7,506
7,804
Non-controlling interests
620
794
Total equity
8,126
8,598
Total liabilities and equity
43,479
44,011
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in
millions) (Unaudited)
Year ended Three months
ended December 31, December 31,
2023
2022
2023
2022
Operating activities: Net income (loss) $
(615
)
$
(2,499
)
$
465
$
(1,333
)
Impairment of goodwill, long-lived assets and assets held for sale
1,078
2,447
68
1,445
Depreciation and amortization
1,153
1,308
266
306
Net change in operating assets and liabilities
(72
)
1,355
292
329
Deferred income taxes — net and uncertain tax positions
(317
)
(1,064
)
34
155
Stock-based compensation
121
124
28
36
Net loss (gain) from investments
and from sale of business and long lived assets
(41
)
10
(10
)
9
Other items
61
(91
)
41
26
Net cash provided by (used in) operating activities
1,368
1,590
1,184
973
Investing activities: Beneficial interest collected
in exchange for securitized trade receivables
1,477
1,140
421
286
Purchases of property, plant and equipment and intangible assets
(526
)
(548
)
(120
)
(142
)
Proceeds from sale of business and long lived assets
68
68
-
23
Purchases of investments and other assets
(46
)
(1
)
(2
)
-
Proceeds from sale of investments
-
4
-
2
Acquisitions of businesses, net of cash acquired
-
(7
)
-
-
Other investing activities
(5
)
-
2
1
Net cash provided by (used in) investing activities
968
656
301
170
Financing activities: Repayment of senior notes and
loans and other long term liabilities
(4,152
)
(1,369
)
-
(713
)
Proceeds from senior notes, net of issuance costs
2,451
-
-
-
Proceeds from short term debt
700
-
-
-
Repayment of short term debt
(700
)
-
(500
)
-
Other financing activities
(212
)
(118
)
(76
)
-
Net cash provided by (used in) financing activities
(1,913
)
(1,487
)
(576
)
(713
)
Translation adjustment on cash and cash equivalents
(30
)
(123
)
68
146
Net change in cash, cash equivalents and restricted cash $
393
$
636
$
977
$
575
Balance of cash, cash equivalents and restricted cash at
beginning of year
2,834
2,198
2,250
2,258
Balance of cash, cash equivalents and restricted cash at end of
year
3,227
2,834
3,227
2,834
Reconciliation of cash, cash equivalents and
restricted cash reported in the consolidated balance sheets:
Cash and cash equivalents
3,226
2,801
3,226
2,801
Total cash, cash equivalents and restricted cash shown in the
statements of cash flows
1
33
1
33
3,227
2,834
3,227
2,834
Reconciliation of gross profit to Non-GAAP gross
profit Three months ended Year ended December 31,
December 31, ($ in millions)
2023
2022
2023
2022
GAAP gross profit ($)
2,416
1,770
($)
7,645
6,973
GAAP gross profit margin
54.2%
45.6%
48.2%
46.7%
Increase (decrease) for excluded items: Amortization of purchased
intangible assets
129
136
549
649
Costs related to regulatory actions taken in facilities
2
1
4
7
Equity compensation
4
4
19
21
Accelerated Depreciation
6
39
80
115
Other non-GAAP items(1)
35
154
173
290
Non-GAAP gross profit ($)
2,592
2,105
($)
8,470
8,056
Non-GAAP gross profit margin(2)
58.2%
54.2%
53.5%
54.0%
(1) Other non-GAAP items include other exceptional items
that we believe are sufficiently large that their exclusion is
important to facilitate an understanding of trends in our financial
results, primarily related to the rationalization of our plants,
certain inventory write-offs and other unusual events. (2) Non-GAAP
gross profit margin is non-GAAP gross profit as a percentage of
revenue.
Reconciliation of operating income (loss) to Non-GAAP
operating income (loss) Three months ended Year ended,
December 31, December 31, ($ in millions)
2023
2022
2023
2022
GAAP operating income (loss)(3) ($)
755
(940)
($)
433
(2,197)
GAAP operating margin(3)
17.0%
(24.2%)
2.7%
(14.7%)
Increase (decrease) for excluded items: Amortization of purchased
intangible assets
144
156
616
732
Legal settlements and loss contingencies
34
34
1,043
2,082
Goodwill impairment
-
1,300
700
2,045
Impairment of long-lived assets
68
145
378
402
Restructuring costs
18
30
111
146
Costs related to regulatory actions taken in facilities
2
1
4
7
Equity compensation
28
36
121
124
Contingent consideration(3)
408
148
548
261
Gain on sale of business
-
(15)
(3)
(47)
Accelerated depreciation
6
39
80
117
Other non-GAAP items(1)
81
196
330
465
Non-GAAP operating income (loss) ($)
1,546
1,130
($)
4,361
4,139
Non-GAAP operating margin(2)
34.7%
29.1%
27.5%
27.7%
(1) Other non-GAAP items include other exceptional items
that we believe are sufficiently large that their exclusion is
important to facilitate an understanding of trends in our financial
results, primarily related to the rationalization of our plants,
certain inventory write-offs, material litigation fees and other
unusual events. (2) Non-GAAP operating margin is Non-GAAP operating
income as a percentage of revenues. (3) The data presented for
prior periods have been revised to reflect a revision in the
presentation of these items in the consolidated financial
statements. See note 1b to our consolidated financial statements
for additional information.
Reconciliation of net income
(loss) attributable to Teva to Non-GAAP net income (loss)
attributable to Teva Three months ended Year ended
December 31, December 31, ($ in millions except per share amounts)
2023
2022
2023
2022
GAAP Net income (loss) attributable to Teva(5) ($)
461
(1,301)
($)
(559)
(2,446)
Increase (decrease) for excluded items: Amortization of purchased
intangible assets
144
156
616
732
Legal settlements and loss contingencies
34
34
1,043
2,082
Goodwill impairment
-
1,300
700
2,045
Impairment of long-lived assets
68
145
378
402
Restructuring expenses
18
30
111
146
Costs related to regulatory actions taken in facilities
2
1
4
7
Equity compensation expenses
28
36
121
124
Contingent consideration expenses(5)
408
148
548
261
Gain on sale of business
-
(15)
(3)
(47)
Accelerated depreciation
6
39
80
117
Financial expenses
13
14
66
61
Share in profits (losses) of associated companies - net
-
-
-
(22)
Items attributable to non-controlling interests
(1)
(43)
(92)
(96)
Other non-GAAP items(1)
81
196
330
465
Corresponding tax effects and unusual tax items(5)
(128)
51
(446)
(1,021)
(4)
Non-GAAP net income attributable to Teva ($)
1,135
791
($)
2,898
2,812
Non-GAAP tax rate(2)
13.1%
11.0%
13.0%
11.7%
GAAP diluted earnings (loss) per share attributable to Teva
($)
0.41
(1.17)
($)
(0.50)
(2.20)
EPS difference(3)
0.59
1.88
3.06
4.73
Non-GAAP Diluted EPS attributable to Teva(3) ($)
1.00
0.71
($)
2.56
2.52
Non-GAAP average number of shares (in millions)(3)
1,137
1,121
1,131
1,115
(1) Other non-GAAP items include other exceptional items
that we believe are sufficiently large that their exclusion is
important to facilitate an understanding of trends in our financial
results, primarily related to the rationalization of our plants,
certain inventory write-offs, material litigation fees and other
unusual events. (2) Non-GAAP tax rate is tax expenses excluding the
impact of non-GAAP tax adjustments presented above as a percentage
of income (loss) before income taxes excluding the impact of
non-GAAP adjustments presented above. (3) EPS difference and
diluted non-GAAP EPS are calculated by dividing our non-GAAP net
income attributable to Teva by our non-GAAP diluted weighted
average number of shares. (4) Includes a portion of the realization
of a loss related to an investment in one of our U.S. subsidiaries
as well as corresponding tax effects on non-GAAP items. (5) The
data presented for prior periods have been revised to reflect a
revision in the presentation of these items in the consolidated
financial statements. See note 1b to our consolidated financial
statements for additional information.
Reconciliation of
net income (loss) to adjusted EBITDA Three months ended
Year ended December 31, December 31, ($ in millions)
2023
2022
2023
2022
Net income (loss) ($)
465
(1,333)
($)
(615)
(2,499)
Increase (decrease) for excluded items: Financial expenses
249
245
1,057
966
Income taxes
43
149
(7)
(643)
Share in losses of associated companies- net
(1)
-
(2)
(21)
Depreciation
120
150
537
576
Amortization
144
156
616
732
EBITDA ($)
1,020
(634)
($)
1,585
(889)
Legal settlements and loss contingencies
34
34
1,043
2,082
Goodwill impairment
-
1,300
700
2,045
Impairment of long lived assets
68
145
378
402
Restructuring costs
18
30
111
146
Costs related to regulatory actions taken in facilities
2
1
4
7
Equity compensation
28
36
121
124
Contingent consideration(1)
408
148
548
261
Gain on sale of business
-
(15)
(3)
(47)
Other non-GAAP items (2)
81
196
330
465
Adjusted EBITDA ($)
1,660
1,240
($)
4,818
4,598
(1) The data presented for prior periods have been revised
to reflect a revision in the presentation of these items in the
consolidated financial statements. See note 1b to our consolidated
financial statements for additional information. (2) Includes other
items primarily related to the rationalization of our plants,
certain inventory write-offs, material litigation fees and other
unusual events.
Segment Information (Unaudited)
North America Europe International Markets
Three months ended December
31,
Three months ended December
31,
Three months ended December
31,
2023
2022
2023
2022
2023
2022
(U.S. $ in millions) (U.S. $ in millions)
(U.S. $ in millions) Revenues $
2,365
$
2,002
$
1,344
$
1,129
$
502
$
482
Gross profit
1,470
1,085
783
669
272
253
R&D expenses
147
131
52
55
20
18
S&M expenses
261
209
203
187
110
112
G&A expenses
97
113
67
63
30
30
Other (income) expense
(1
)
(2
)
§
(2
)
(4
)
§
Segment profit $
966
$
633
$
461
$
366
$
116
$
93
§ Represents an amount less than $0.5 million.
Segment Information (Unaudited)
North America
Europe International Markets Year ended December
31, Year ended December 31, Year ended December
31,
2023
2022
2023
2022
2023
2022
(U.S. $ in millions) (U.S. $ in millions)
(U.S. $ in millions) Revenues $
8,124
$
7,452
$
4,837
$
4,525
$
1,958
$
1,903
Gross profit
4,421
3,926
2,726
2,700
1,050
1,033
R&D expenses
625
532
220
213
83
72
S&M expenses
1,005
941
767
748
420
405
G&A expenses
403
474
263
246
118
119
Other (income) expense
(8
)
(15
)
(2
)
(3
)
(35
)
(43
)
Segment profit $
2,396
$
1,993
$
1,478
$
1,496
$
464
$
479
Reconciliation of our segment profit to
consolidated income before income taxes Three months
ended December 31,
2023
2022
(U.S.$ in millions) North America profit $
966
$
633
Europe profit
461
366
International Markets profit
116
93
Total segment profit
1,544
1,093
Profit (loss) of other activities
2
37
Total segment profit
1,546
1,130
Amounts not allocated to segments: Amortization
144
156
Other asset impairments, restructuring and other items(1)
443
217
Goodwill impairment
-
1,300
Intangible asset impairments
61
132
Legal settlements and loss contingencies
34
34
Other unallocated amounts
108
231
Consolidated operating income (loss)(1)
756
(940
)
Financial expenses - net
249
245
Consolidated income (loss) before income taxes(1) $
507
$
(1,185
)
(1) The data presented for prior period have been revised to
reflect a revision in the presentation of these items in the
consolidated financial statements. See note 1b to our consolidated
financial statements for additional information.
Reconciliation
of our segment profit to consolidated income before income
taxes Year ended December 31,
2023
2022
(U.S.$ in millions) North America profit $
2,396
$
1,993
Europe profit
1,478
1,496
International Markets profit
464
479
Total segment profit
4,338
3,968
Profit (loss) of other activities
24
172
Total segment profit
4,361
4,139
Amounts not allocated to segments: Amortization
616
732
Other asset impairments, restructuring and other items(1)
718
512
Goodwill impairment
700
2,045
Intangible asset impairments
350
355
Legal settlements and loss contingencies
1,043
2,082
Other unallocated amounts
502
610
Consolidated operating income (loss)(1)
433
(2,197
)
Financial expenses - net
1,057
966
Consolidated income (loss) before income taxes(1) $
(624
)
$
(3,163
)
(1) The data presented for prior period have been
revised to reflect a revision in the presentation of these items in
the consolidated financial statements. See note 1b to our
consolidated financial statements for additional information.
Revenues by Activity and
Geographical Area
Year ended December 31,
Percentage Change
2023
2022
2022-2023 (U.S.$ in millions) North America
segment Generics products $
3,475
3,549
(2
%)
AJOVY
230
218
6
%
AUSTEDO
1,225
963
27
%
BENDEKA/TREANDA
241
316
(24
%)
COPAXONE
320
387
(17
%)
Anda
1,577
1,471
7
%
Other
1,056
549
92
%
Total
8,124
7,452
9
%
Year ended December 31,
Percentage Change
2023
2022
2022-2023 (U.S.$ in millions) Europe segment
Generics products $
3,664
$
3,466
6
%
AJOVY
160
124
29
%
COPAXONE
231
268
(14
%)
Respiratory products
265
273
(3
%)
Other
516
393
31
%
Total
4,837
4,525
7
%
Year ended December 31,
Percentage Change
2023
2022
2022-2023 (U.S.$ in millions) International
Markets segment Generics products $
1,594
$
1,586
1
%
AJOVY
44
35
25
%
COPAXONE
39
36
9
%
Other
281
246
14
%
Total
1,958
1,903
3
%
Revenues by Activity and Geographical Area
Three months ended December 31,
Percentage Change
2023
2022
2022-2023 (U.S.$ in millions) North America
segment Generics products $
754
$
818
(8
%)
AJOVY
63
75
(17
%)
AUSTEDO
408
344
18
%
BENDEKA/TREANDA
53
75
(29
%)
COPAXONE
78
101
(24
%)
Anda
394
450
(13
%)
Other
617
138
347
%
Total
2,365
2,002
18
%
Three months ended December 31,
Percentage Change
2023
2022
2022-2023 (U.S.$ in millions) Europe segment
Generics products $
938
$
914
3
%
AJOVY
45
35
31
%
COPAXONE
56
61
(8
%)
Respiratory products
70
75
(7
%)
Other
234
43
443
%
Total
1,344
1,129
19
%
Three months ended December 31,
Percentage Change
2023
2022
2022-2023 (U.S.$ in millions) International
Markets segment Generics products $
420
$
411
2
%
AJOVY
13
13
§
COPAXONE
7
7
§
Other
62
51
23
%
Total
502
482
4
%
§ Represents an amount less than 0.5%.
Free
cash flow reconciliation Year ended December 31,
2023
2022
(U.S. $ in millions) Net cash provided by
operating activities
1,368
1,590
Beneficial interest collected in exchange for securitized trade
receivables
1,477
1,140
Purchases of property, plant and equipment and intangible assets
(526
)
(548
)
Proceeds from sale of business and long lived assets
68
68
Acquisition of subsidiary, net of cash acquired
-
(7
)
Free cash flow $
2,387
$
2,243
Free cash flow reconciliation
Three months ended December
31,
2023
2022
(U.S. $ in millions) Net cash provided by
operating activities
1,184
973
Beneficial interest collected in exchange for securitized accounts
receivables
421
286
Purchases of property, plant and equipment and intangible assets
(120
)
(142
)
Proceeds from sale of business and long lived assets
-
23
Free cash flow $
1,486
$
1,140
View source
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IR Contacts
Ran Meir (215) 591-8912
Yael Ashman +972 (3) 914 8262 Sanjeev Sharma
(267) 658-2700
PR Contacts
Kelley Dougherty (973) 832-2810 Eden Klein +972 (3)
906 2645
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