Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Q1 2022 Earnings Presentation
53 slides from Bausch Health Companies's earnings presentation, May 10, 2022
Slide 1: 1Q22 Financial Results
1Q 22 Financial Results
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking information and statements, within the meaning of and effectiveness of vaccines for COVID-19 (including with respect to current or future variants and applicable securities laws (collectively, “forward-looking statements”), includ
Slide 3: Non-GAAP Information
Non-GAAP Information Revenue Agency and/or the U.S. Internal Revenue Service will be sought or obtained), the ability of made certain assumptions in assessing the anticipated impacts of the COVID-19 pandemic on the the Company and the separated entity to satisfy the conditions required to maintain t
Slide 4: Today's Update Topics
Strategic Alternatives 1 Today’s Update 1Q22 Highlights & 2 Financial Results Topics 3 FY 2022 Guidance 4 Business Results 3
Slide 5: Strategic Alternatives Update
Strategic Alternatives Update 4
Slide 6: Unlocking Shareholder Value Across Three Attractive Businesses
Unlocking Shareholder Value Across Three 1Q 22 Attractive Businesses4 1 Bausch Health Companies Inc. (NYSE/TSX: BHC) Bausch Pharma Listed on NYSE/TSX: BLCO Upon IPO2 3, will be Global, diversified company listed on Nasdaq: SLTA Flexibility to monetize2 an focused on gastroenterology, additional 10%
Slide 7: Executing Strategic Alternatives to Drive Shareholder Value
Executing Strategic Alternatives to Drive 1Q 22 Shareholder Value1 Complete financial segmentation of Bausch + Lomb and Solta Medical Appoint leadership of Bausch Pharma, Bausch + Lomb and Solta Medical Significant debt paydown of ~$2B for Bausch Health since announcement of strategic alternatives p
Slide 8: Focused on Leverage Improvement and Delivering Shareholder Value
1Q 22 Focused on Leverage Improvement and Delivering Shareholder Value1 Cash generated from Amoun divestiture completed IPO of Bausch + Lomb completed5 Bausch Pharma + Solta2 Bausch + Lomb debt raise completed5 Net Leverage Targeting ~6.5x-6.7x IPO of Solta Medical3 at time of B+L spin-off Remaining
Slide 9: 1Q22 Highlights & Financial Results
1Q22 Highlights & Financial Results 8
Slide 10: 1Q22 Revenue Results
1Q 22 1Q22 Revenue Results Three Months Ended Favorable (Unfavorable) 3.31.22 3.31.21 Reported Organic Change 1 Salix Segment $464M $472M (2%) (2%) International 2 Segment $244M $306M (20%) 8% Diversified Products 2 Segment $249M $296M (16%) (16%) Neuro $128M $154M (17%) (17%) Generics $38M $50M (24
Slide 11: Bausch Pharma/Solta 1Q22 Highlights
1Q 22 Bausch Pharma/Solta1 1Q22 Highlights Salix Revenue Breakdown • Salix 1Q reported revenue decline -2%, driven by lower volumes due to LOE of certain products and the non-recurrence of 1Q21 wholesaler inventory build of ~$50 million • Increased TRx volume driven by Trulance® (+14%), Relistor® or
Slide 12: Salix 1Q22 Highlights
1Q 22 Salix 1Q22 Highlights • Revenue growth of 1% • Headwind due to non-recurrence of 1Q21 wholesaler inventory build of ~$50 million Xifaxan NRx Growth Trend - Primary Care2 • PCP shifting focus to treating COVID-19 27,000 (* includes Primary Care Physician, NPs and PAs) patients during Omicron su
Slide 13: Salix: Market Share Gains
1Q 22 Salix: Market Share Gains TRx Market share1,2,3 Xifaxan® Trulance® Relistor® 90% 10% 20% 85.3% 8% 6.8% 7.3% 14.5% 14.6% 84.5% 15% 85% 6% 10% 4% 80% 5% 2% 75% 0% 0% Q1'21 Q1'22 Q1'21 Q1'22 Q1'21 Q1'22 NRx Market share1,2,3 Xifaxan® Trulance® Relistor® 90% 10% 20% 86.6% 87.4% 15.5% 16.3% 8% 7.1%
Slide 14: International 1Q22 Highlights
1Q 22 International2 1Q22 Highlights Key products growing faster than the market 1Q22 Reported Revenue: Revenue Breakdown by Region3 (20%) Amoun divestiture completed in 3Q21 Asia EMEA, Russia, CIS Pacific 51.0% 1Q22 Organic Revenue1: +8% 0.1% Canada 22.3% Canada Evolution Index4 FY21 - 100 Latin Am
Slide 15: Solta Medical 1Q22 Highlights
1Q 22 Solta Medical4 1Q22 Highlights Highlights Solta Medical Revenue Breakdown2 • COVID lockdowns in China (~30% of sales) and microchip supply constraints, accounting for estimated 17% of headwind to growth • Consumable demand remained strong with 6% organic revenue growth1,2 and 7% reported reven
Slide 16: Bausch + Lomb 1Q22 Highlights
1Q 22 Bausch + Lomb2 1Q22 Highlights Global Vision Care Bausch + Lomb Reported Revenue Breakdown • Global Vision Care saw 1% reported revenue growth and 4% organic revenue growth1 • Global Vision Care (ex-China) saw 3% reported revenue Global growth and 8% organic revenue growth1 Ophtho Rx • U.S.: 1
Slide 17: Bausch + Lomb 1Q22 Highlights
1Q 22 Bausch + Lomb3 1Q22 Highlights Global Surgical • Global Surgical saw 7% reported revenue growth and 13% organic revenue growth1, driven by increased demand and the backlog in procedures • Product growth was driven by an increase in capital equipment consumables • U.S.: 2% reported revenue grow
Slide 18: Bausch + Lomb Continued Growth
1Q 22 Bausch + Lomb Continued Growth Bausch + Lomb U.S. Contact Lens U.S. Bausch + Lomb Consumer Vyzulta® U.S. TRx Trend2 Market Share1 Consumption % Change Year-Over-Year3 60% 7,000 14.8% 6,000 40% COVID-19 14.5% Pantry 14.0% 5,000 Loading 12.6% 20% 11.8% 4,000 3,000 0% 9.7% 8.9% 9.0% 2,000 Lapping
Slide 19: GAAP Financial Results
1Q 22 GAAP Financial Results Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.22 3.31.21 Reported Currency 1 Change1 Revenues $1,918M $2,027M (5%) (3%) 0% GAAP Gross Profit $1,049M $948M 11% 13% GAAP Gross Margin 54.7% 46.8% 790 bps Selling, A&P $435M $418M (4%) (6%) GAAP G&A $187M $
Slide 20: Non-GAAP Financial Results
1Q 22 Non-GAAP Financial Results Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.22 3.31.21 Reported Currency 1 Change1 Revenues $1,918M $2,027M (5%) (3%) 0% Adj. Gross Profit 1,2 $1,367M $1,453M (6%) (4%) Adj. Gross Margin 1 71.3% 71.7% (40 bps) Selling, A&P (same as reported) $435
Slide 21: Cash Flow Summary
1Q 22 Cash Flow Summary Three Three Months Months Ended 3.31.22 Ended 3.31.21 Net loss 1 ($66M) ($607M) Net cash (used in) provided by ($63M) $443M operating activities $63M of cash used for Net cash used in investing operations (GAAP) during ($56M) ($56M) 1Q22; $325M3,4 adjusted activities cash flo
Slide 22: Balance Sheet Summary
1Q 22 Balance Sheet Summary As of As of As of As of As of 3.31.22 12.31.21 9.30.21 6.30.21 3.31.21 Cash, cash equivalents, restricted $2,460M1 $2,119M1 $1,904M1 $1,856M1,6 $1,893M1,6 cash and other settlement deposits Revolving Credit Drawn $0M $285M $0M $0M $0M Senior Secured Debt2 $8,473M $7,958M
Slide 23: Unconsolidated Bausch Pharma Debt Reduction and Capital Structure Update
1Q 22 Unconsolidated Bausch Pharma Debt Reduction and Capital Structure Update Post Q1 2022 (as of May 10, 2022): 1 Total debt reduced by approx. ~$3.4 billion1 (15%) to ~$20.0 billion 2 Debt maturity profile improved — obligations through 2025 reduced by $5.8 billion 3 Hedged against rising interes
Slide 24: Unconsolidated Bausch Pharma Debt Maturity Profile
1Q 22 Unconsolidated Bausch Pharma Debt Maturity Profile1,2 as of May 10, 2022 As of March 31, 2022 As of May 10, 20222 in millions (POST B&L IPO) 10000 $9,523 10000 in millions 9000 9000 8000 8000 7000 7000 6000 6000 $5,538 5000 5000 $3,612 $3,612 4000 $3,250 $3,250 4000 $3,375 $3,250 3000 3000 $1,
Slide 25: B+L Debt Maturity Profile
1Q 22 B+L Debt Maturity Profile 1 As of May 10, 2022 Total Debt: $2,500M (Secured Term Loan B) $2,500 $2,381 $2,000 $1,500 $1,000 $500 $25 $25 $25 $13 $25 $0 2022 2023 2024 2025 2026 2027 TOTAL DEBT TOTAL DEBTTerm Loans $2.5B Term Loans Mandatory Amortization Total debt down ~$3.4 billion and ~$5.8B
Slide 26: FY 2022 Guidance – Total Bausch Health
FY 2022 Guidance – Total Bausch Health 25
Slide 27: Updated Full Year 2022 Guidance
1Q 22 Updated Full Year 2022 Guidance2 All assumptions are approximate and in USD Feb. COVID/ Base Dis- Updated FX Impact Pre dis- Guidance Inflation performance synergies Guidance synergy $8.40B $8.25B $8.25B to -$135M -$65M +$25M to to Revenue 2 $8.60B $8.40B $8.40B . $3.45B -$20M $3.325B -$100M $
Slide 28: Full-Year Outlook
1Q 22 Full-Year Outlook3 Prior Guidance Current Guidance Exclude dis-synergies Include dis-synergies Total Revenues $8.40B - $8.60B $8.25B - $8.40B Adjusted EBITDA (non-GAAP) 1,6 $3.45B - $3.60B $3.225B - $3.375B Current Guidance Adj. cash flows from Key Assumptions (February 2022) operations 1 (May
Slide 29: Priorities
Priorities BAUSCH Health
Slide 30: Progress in Late-Stage Product Development
1Q 22 Progress in Late-Stage Product Development1 Bausch Pharma/Solta Medical • Amiselimod S1P2 Modulator3 – Completed the thorough QT study which evaluated the cardiac safety profile; results were positive. Initiated Phase 2 study in Q2 2021 for mild to moderate Ulcerative Colitis (83 patients enro
Slide 31: Pipeline and Portfolio Expansion: Late Stage Development
1Q 22 Pipeline and Portfolio Expansion: Late Stage Development1 Product Status / Upcoming Milestone Launched in Japan, U.S., Australia, Hong Kong, South Korea, Singapore and Canada; SiHy Daily Launching SVS into 30+ countries and multi-focal into 5+ countries Biotrue Hydration Plus Multi-purpose Sol
Slide 32: Four Novel Rifaximin Formulations
1Q 22 Four Novel Rifaximin Formulations 2019 2020 2021 2022 2023 2024 2025 2026 2027 Rifaximin solid soluble dispersion (SSD) in a tablet1 Phase 3 NDA Approval RED-C Trial Started Expected Combination of rifaximin with a mucolytic agent1 Phase 2 Phase 3 NDA Approval Irritable Bowel Trial Start Trial
Slide 33: 2022 Priorities
1Q 22 2022 Priorities 1 Drive growth through operational excellence across the enterprise: ▪ Accelerate growth engines of Salix and International Pharma ▪ Stabilize key cash generating businesses of Derm, Neuro, & Generics ▪ Recovery of procedures in Asia Pacific, availability of inventory, and expa
Slide 34: Appendix
33 BAUSCH Health Appendix
Slide 35: New Segment Structure
New Segment Structure Previous Current Segment Business Lines Ticker: BHC Salix • Salix Salix • Salix International • International International Rx • International Rx • Neuro • Generics Ortho • Ortho Dermatologics Diversified Products • Dentistry Dermatologics • Global Solta • Ortho Dermatologics •
Slide 36: Selected U.S. Businesses Inventory Trending (YTD)
1Q 22 Selected U.S. Businesses Inventory Trending (YTD)1 Months on Hand As of As of As of As of Business Change Change Dec 31, Mar 31, Dec 31, Mar 31, Units 1Q21 1Q22 2020 2021 2021 2022 Derm 0.72 0.87 0.15 1.03 1.12 0.09 Neuro 0.56 0.82 0.26 1.17 1.10 (0.07) Ophtho2 0.73 0.91 0.18 0.97 0.86 (0.11)
Slide 37: Unconsolidated Bausch Health Long Term Debt Maturity Profile (ex B+L)
Unconsolidated Bausch Health 1Q 22 Long Term Debt Maturity Profile (ex B+L) As of March 31, 20221 $M Total 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Revolver $0 - - - - - - - - - - Term Loan $3,623 - - - $3,623 - - - - - - Secured Notes $4,850 - - - $1,750 - $1,500 $1,600 - - - Unsecured Not
Slide 38: B+L Long Term Debt Maturity Profile
1Q 22 B+ L Long Term Debt Maturity Profile As of May 10, 20221 $M Total 2022 2023 2024 2025 2026 2027 Revolver (Undrawn) $500 - - - - - - Term Loan $2,381 - - - - - $2,381 Mandatory Amortization $119 $13 $25 $25 $25 $25 $6 Total $2,500 $13 $25 $25 $25 $25 $2,387 1. Debt values are shown at principal
Slide 39: Other Financial Information
1Q 22 Other Financial Information Three Months Ended Favorable (Unfavorable) Constant Mar. 31, 2022 Mar. 31, 2021 Reported Currency1,2 Cash Interest Expense $348M $355M 2% 2% Net Interest Expense $360M $366M 2% 2% Non-cash adjustments Depreciation $42M $46M 9% 7% Non-cash share-based Comp $32M $31M
Slide 40: Non-GAAP Appendix
Non-GAAP Appendix 39
Slide 41: Non-GAAP Adjustments EPS Impact ($M)
1Q 22 Non-GAAP Adjustments EPS Impact ($M)2 Three Months Ended March 31, 2022 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) Share Impact Net income (loss) attributable to Bausch Health Companies Inc. $ (69) $ (0.19) $ (610) $ (1.71) Non-GAAP adjustments: Amortization
Slide 42: Reconciliation of Reported Operating Income to Adjusted EBITA
Reconciliation of Reported Operating Income to 1Q 22 Adjusted EBITA (non-GAAP)1 ($M) (Year-to-Date) YTD 2022 Gross Gross Selling & G&A and R&D Operating Operating Profit Margin Advertising Other Expense Expense income 2022 GAAP $ 1,049 54.7% $ 435 $ 187 $ 127 $ 749 $ 285 Amortization of intangible a
Slide 43: Reconciliation of Reported Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of Reported Net Income (Loss) to EBITDA 1Q 22 (non-GAAP)1 and Adjusted EBITDA (non-GAAP)1 ($M) Three Months Ended March 31, 2022 2021 Net loss attributable to Bausch Health Companies Inc. $(69) $(610) Interest expense, net 360 366 (Benefit from) provision for income taxes (16) 16 Depr
Slide 44: Reconciliation of Reported Revenue to Organic Revenue (Year-to-Date)
Reconciliation of Reported Revenue to Organic Revenue1,2 1Q 22 and Organic Revenue Growth1,2 ($M) (Year-to-Date)4 Calculation of Organic Revenue for the Three Months Ended Change Change March 31, 2022 March 31, 2021 in Reported Revenue in Organic Revenue Organic Organic Revenue Changes in Revenue Re
Slide 45: Reconciliation of Reported Revenue to Organic Revenue
Reconciliation of Reported Revenue to Organic Revenue1,2 1Q 22 and Organic Revenue Growth1,2 ($M) Calculation of Organic Revenue for the Three Months Ended Change in Change in March 31, 2022 March 31, 2021 Reported Revenue Organic Revenue Organic Revenue Changes in Organic Revenue Revenue as Exchang
Slide 46: Reconciliation of Net Cash from Operating Activities to Adj. Cash Flows
Reconciliation of Reported Net Cash Provided by Operating 1Q 22 Activities to Adj. Cash Flows from Operations (non-GAAP)1 ($M) Three Months Ended March 31, 2022 2021 Cash provided by operating activities $ (63) $ 443 Payments of legacy legal settlements, net of insurance proceeds 349 118 Payments of
Slide 47: TTM Adjusted EBITDA ($M)
1Q 22 TTM1 Adjusted EBITDA2 ($M) For the Twelve Trailing Months Ended Mar-22 Dec-21 Sep-21 Jun-21 Mar-21 Net loss attributable to Bausch Health Companies Inc. $ (407) $ (948) $ (1,170) $ (1,287) $ (1,018) Interest expense, net 1,413 1,419 1,454 1,477 1,498 Benefit from income taxes (119) (87) (278)
Slide 48: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures from) provision for income taxes, depreciation and amortization and the following items: To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GA
Slide 49: Non-GAAP Appendix
Non-GAAP Appendix Share-based Compensation: The Company has excluded costs relating to share-based relocation and/or modification. As these costs arise from events outside of the ordinary compensation. The Company believes that the exclusion of share -based compensation course of continuing operatio
Slide 50: Non-GAAP Appendix
Non-GAAP Appendix Adjusted Net Income Organic Growth/Change and Organic Revenue Historically, management has used Adjusted net income (non -GAAP) (the most directly Organic growth/change, a non-GAAP ratio, is defined as a change on a period-over-period basis comparable GAAP financial measure for whi
Slide 51: Non-GAAP Appendix
Non-GAAP Appendix Adjusted EBITA and Adjusted EBITA Margin Adjusted Gross Profit/Adjusted Segment Gross Profit and Adjusted Adjusted EBITA represents Operating income (loss) (its most directly comparable GAAP financial Gross Margin/Adjusted Segment Gross Margin measure) adjusted to exclude amortizat
Slide 52: Non-GAAP Appendix
Non-GAAP Appendix Adjusted SG&A Expenses and Adjusted G&A Expenses actual financial performance of the Company and to forecast future results as part of its guidance. Adjusted SG&A expenses (non-GAAP) represents selling, general and administrative expenses Management believes that Total Adjusted Ope
Slide 53: Non-GAAP Appendix
Non-GAAP Appendix Constant Currency Changes in the relative values of non-U.S. currencies to the U.S. dollar may affect the Company’s financial results and financial position. To assist investors in evaluating the Company’s performance, we have adjusted for foreign currency effects. Constant currenc
Bausch Health Companies — Q1 2022 Earnings Presentation on 6ix