Organon & Co. · NYSE:OGN
Organon & — Q2 2022 Earnings Presentation
25 slides from Organon &'s earnings presentation, August 2022
Slide 1: Q2 2022 Earnings
Organon Q2 2022 Earnings “i ORGANON™
Slide 2: Disclaimer statement
Disclaimer statement This text should be viewed in conjunction with Organon’s Q2 2022 earnings call Safe Harbor for Forward-Looking Statements Except for historical information herein, this presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S
Slide 3: Disclaimer statement, cont.
Disclaimer statement, cont. Non-GAAP Information This presentation contains “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. g
Slide 4: Second quarter 2022 highlights
Second quarter 2022 highlights • All franchises show growth Ex-FX • Improved trajectory for Established Brands • Expanded biosimilars portfolio with additional R&D collaborator; Shanghai Henlius Biotech Inc. • Revenues of $1,585 million • $512 million Adjusted EBITDA, inclusive of $97M in acquired I
Slide 5: Balancing commercial and pipeline business development
Balancing commercial and pipeline business development Commercialized/soon to be Building a pipeline commercialized assets • July 2022 - Licensing agreement for a novel investigational non-hormonal, on-demand • March 2022 - Licensing agreement for Xaciato™ contraceptive candidate with Cirqle Biomedi
Slide 6: Solid volume growth, limited LOE and VBP impact
Solid volume growth, limited LOE and VBP impact -1% reported +5% ex-FX $ mil 1,595 ~175 ~25 ~80 1,585 ~175 ~10 ~0 ~60 FX ~ 500 bps impact (3) (1) (2) (1) LOE = Loss of Exclusivity (2) VBP = Volume Based Procurement (3) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and othe
Slide 7: All geographic areas grew ex-FX
All geographic areas grew ex-FX Q2-21 Actual Ex FX $ mil Q2-22 (mid-year spin) VPY VPY Europe and Canada 443 470 (6)% 4% United States 351 339 4% 4% ~80% of Asia Pacific and Japan 291 309 (6)% 4% sales generated China 244 236 3% 4% ex-US Latin America, Middle 216 190 14% 16% East, Russia and Africa
Slide 8: Women's Health
Women’s Health • Nexplanon grew 8% at constant currency; strong demand trends • Fertility impacted by COVID lockdowns in China and channel mix in the US Q2-2021 Act VPY Ex FX 2021 YTD Act VPY Ex FX Revenues $ mil Q2-2022 (mid- 2022 YTD (mid-year year spin) VPY spin) VPY Women’s Top Contraception Pro
Slide 9: Biosimilars
Biosimilars • Double digit growth for Renflexis and Ontruzant • US demand for biosimilars continues to grow Q2-2021 Act VPY Ex FX 2022 2021 YTD Act VPY Ex FX Revenues $ mil Q2-2022 (mid-year spin) VPY YTD (mid-year spin) VPY Biosimilars Renflexis ® 59 43 38% 39% 105 81 30% 30% Ontruzant ® 35 22 57%
Slide 10: Established brands
Established brands • Growth in most therapy areas • Improved erosion curve; tracking to flat or better growth for full year • VBP delays and competitor supply interruptions aid 1H performance Revenues $ mil Q2-2022 Q2-2021 Act VPY Ex FX 2022 2021 YTD Act VPY Ex FX (mid-year spin) VPY YTD (mid-year s
Slide 11: New IPR&D treatment ~$100M impact to Q2 Adj. EBITDA
New IPR&D treatment ~$100M impact to Q2 Adj. EBITDA $ mil Q2-22 Q2-21 Actual VPY 2022 YTD 2021 YTD Actual VPY (mid- year spin) (mid-year spin) Revenues 1,585 1,595 (1)% 3,152 3,101 2% Cost of sales 588 583 1% 1,149 1,174 (2)% Gross profit 997 1,012 (1)% 2,003 1,927 4% Non-GAAP Adjusted Gross profit
Slide 12: Balancing commercial and pipeline business development
Balancing commercial and pipeline business development Commercialized/soon to be Building a pipeline commercialized assets • July 2022 - Licensing agreement for a novel investigational non-hormonal, on-demand • March 2022 - Licensing agreement for Xaciato™ contraceptive candidate with Cirqle Biomedi
Slide 13: Debt capitalization as of June 30, 2022
Debt capitalization as of June 30, 2022 $100 million voluntary debt repayment in Q2 - Bank covenant (*) net leverage ratio ~3.5x $ mil June 30, September 30, December 31, March 31, June 30, 2021 2021 2021 2022 2022 Reported cash and cash 730 1,008 737 694 545 equivalents Cash for IOM-exit (400) (320
Slide 14: FX headwinds persist, masking solid volume growth
FX headwinds persist, masking solid volume growth $ mil +600 - +700 ~(100) (350) − (400) $6,304 <(100) ~(50) ~(200) $6,100– $6,300 FX ~550-650 bps headwind to growth in 2022 (1) (2) (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and allocated am
Slide 15: FY 2022 guidance recast for IPR&D and FX; no change operationally
FY 2022 guidance recast for IPR&D and FX; no change operationally $M, provided on a Non- GAAP Guidance provided Guidance provided as of FX impact IPR&D basis, except Revenues May 5, 2022 August 4, 2022 from 300 - 475 Revenues $6,100 - $6,400 bps to 550 - 650 $6,100 - $6,300 bps Adjusted gross margin
Slide 16: Q&A
Q&A O “i ORGANON’
Slide 17: Appendix
Appendix “iis ORGANON”
Slide 18: Established Brands sizeable and stable base of revenue
Established Brands sizeable and stable base of revenue $ mil 18
Slide 19: Franchise performance
Franchise performance Q2-2021 Ex FX 2021 YTD Ex FX $ mil Q2-2022 Actual VPY 2022 YTD Actual VPY (mid-year spin) VPY (mid-year spin) VPY Women’s Health 408 417 (2)% 1% 786 816 (4)% (1)% Biosimilars 119 86 39% 42% 217 166 31% 34% Est. Brands 1,018 1,045 (2)% 4% 2,072 2,002 3% 10% Other (1) 40 47 (17)%
Slide 20: Gross margin reconciliation
Gross margin reconciliation $ mil Q2-2022 Q2-2021 YTD 2022 YTD 2021 (mid-year spin) (mid-year spin) Revenues 1,585 1,595 3,152 3,101 Cost of sales 588 583 1,149 1,174 Gross Profit 997 1,012 2,003 1,927 Gross Margin 62.9% 63.4% 63.5% 62.1% Amortization 28 22 56 42 One-time costs (1) 19 10 24 10 Stock
Slide 21: Income from continuing operations before income taxes to Adjusted EBITDA
Income from continuing operations before income taxes to Adjusted EBITDA $ mil Q2-2022 Q2-2021 (mid-year spin) Income from continuing operations before income taxes 287 437 Depreciation 22 21 Amortization (1) 28 22 Interest expense 98 62 EBITDA 435 542 Restructuring costs — 1 One-time costs (2) 58 6
Slide 22: Income from continuing operations before income taxes to Adjusted EBITDA
Income from continuing operations before income taxes to Adjusted EBITDA $ mil 2022 YTD 2021 YTD (mid-year spin) Income from continuing operations before income taxes 729 904 Depreciation 47 39 Amortization (1) 56 42 Interest expense 195 62 EBITDA 1,027 1,047 Restructuring costs — 2 One-time costs (
Slide 23: Income from continuing operations before income taxes to Adjusted Net Income
Income from continuing operations before income taxes to Adjusted Net Income $ mil (except EPS) Q2-2022 Q2-2021 (mid-year spin) Income from continuing operations before income taxes 287 437 Amortization (1) 28 22 Restructuring costs — 1 One-time costs (2) 58 66 Stock-based compensation 19 18 Total A
Slide 24: Income from continuing operations before income taxes to Adjusted Net Income
Income from continuing operations before income taxes to Adjusted Net Income 2021 YTD $ mil (except EPS) 2022 YTD (mid-year spin) Income from continuing operations before income taxes 729 904 Amortization (1) 56 42 Restructuring costs — 2 One-time costs (2) 98 115 Stock-based compensation 34 29 Tota
Slide 25: Broad and diverse portfolio
Broad and diverse portfolio Women’s Health Biosimilars Established Brands Number of 13 5 49 products 25