Perrigo Company Plc · NYSE:PRGO
Perrigo — Q2 2021 Earnings Presentation
37 slides from Perrigo's earnings presentation, Aug 11, 2021
Slide 1: Second Quarter 2021 Financial Results
Second Quarter 2021 Financial Results August 11, 2021
Slide 2: Bradley Joseph, VP Investor Relations and Corporate Communications
Bradley Joseph, VP Investor Relations and Corporate Communications
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements in this press release are “forward-looking statements.” These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels
Slide 4: Murray S. Kessler, President & CEO
Murray S. Kessler, President & CEO
Slide 5: Topline Returned to Growth in Q2; Earnings Negatively Impacted
Topline Returned to Growth in Q2; Earnings Negatively Impacted By Return To Pre-COVID A&P Levels, Lower Volumes & Higher Input Costs Second Quarter Performance Financial Highlights ✓ Net Sales were up 3.4% (+0.5% organic) as base business growth outside Net Sales $981M cough/cold, favorable currency
Slide 6: Sales Growth Accelerated in May & June After Lapping Pantry Load
After Lapping the April 2020 Pandemic-Related Pantry Load, Sales Growth Accelerated in May & June Perrigo Net Sales $ millions $500 -1.1% Reported -4.1% Organic $400 $376 +7.5% Reported $372 +5.1% Reported +4.2% Organic +1.7% Organic $322 $300 $300 $287 $273 $200 $100 $0 April May June 2020 Sales 20
Slide 7: Rebounding Strongly in Both CSCI and CSCA
Rebounding Strongly in Both CSCI and CSCA CSCI Net Sales Change YoY by Month $300 +1.0% +5.7% +5.0% CSCI YoY Q2 $250 Organic Organic Organic Organic Growth +4.3% $200 $150 $120 $130 $121 Cough/Cold Impact -1.3% $107 $107 $94 $100 CSCI Organic less $50 Cough/Cold Impact +5.6% $0 April May June $ mill
Slide 8: All Businesses, Except CSCA's OTC Business, Grew Strongly
All Businesses, Except CSCA’s OTC Business, Grew Strongly Compared to Last Year Second Quarter Net Sales Growth YoY CSCI Branded 15.8% CSCI Store Brand 33.0% CSCA Oral Care 17.9% CSCA Nutrition 10.7% CSCA OTC -7.0% 8
Slide 9: Consumer Take Away Rebounded Sharply Across the U.S. and Europe
As Consumer Take Away Rebounded Sharply Across the U.S. and Europe in the Quarter 25% 20.3% 20% 16.5% 15% % Growth Index vs. PY US 10% 5% 2.8% 4.0% 3.0% 4.6% COVID Demand COVID Surge Surge 0.4% Consumer 0% -5.8% -6.5% Comparison -5% Consumer Take Away -10% Take Away Normalizing (IRI MULO) 1 -15% -20
Slide 10: CSCA OTC Decline Was Shipments Coming Back Into Balance with Consumption
CSCA OTC Decline was the Result of Shipments Coming Back Into Balance with Consumption CSCA OTC Consumer Take Away (IRI MULO) vs. CSCA OTC Net Sales (Shipments) 13-Week Rolling Sales % Change vs. YAGO 30% 26.3% Retail Customers Replenishing Historically Weak Sharp Increase in 21.2% Inventories After
Slide 11: CSCA OTC Shipments Expected To Follow Consumer Take Away Rebound
CSCA OTC Shipments Expected To Follow Recent Robust Rebound In Consumer Take Away Positive Trends Across All Store Brand OTC Categories… Sales % Change According to IRI MULO as of July 11th Calendar Last 13 Trend Category YTD Weeks Allergy -3.2% 9.9% Cough/Cold -31.9% 34.6% Digestive Health 1.4% 7.1
Slide 12: Strong Cough Cold Rebound Supports Strong Second Half Forecast
Strong Cough Cold Rebound Supported by Rise in Illnesses; Supports Strong Second Half Forecast All Ages 2020/2021 Cough/Cold Season Trend Millions 40 Cough/Cold Incidence Trending Above Prior Year 35 Affected Population in millions 30 25 20 15 10 5 0 8/15/2020 9/15/2020 10/15/2020 11/15/2020 12/15/2
Slide 13: Reaffirming Guidance Expectations for 2021, Lower End of Range
Therefore, Reaffirming our Guidance Expectations for 2021, Albeit to the Lower End of the Range Reaffirming Adjusted EPS Guidance Range From Continuing Operations $2.50 to $2.70 Per Diluted Share 2H Growth Drivers Key Assumptions ✓ New product launches ✓ 2H Factory shipments align with ✓ Project Mom
Slide 14: Significant Progress Toward Restoring Certainty
Significant Progress Toward Restoring Certainty Perrigo 8-K filing on THE IRISH TIMES July 13, 2021: • Perrigo’s CEO met with the Irish Times to discuss Perrigo’s business and to provide an update on the ongoing dialogue between Perrigo and the Irish Revenue regarding the pending appeal of the Notic
Slide 15: Rx Generic Divestiture Completed Leaving Perrigo With Significant Cash
Importantly, Rx Generic Divestiture Completed Leaving Perrigo With Significant Cash to Invest With the Consumer Perrigo is a Leader in Transformation Now Self-Care with Durable Complete… Global Platforms Diversified Across Global OTC Categories Perrigo Completes Divestiture of Generic Rx Business fo
Slide 16: Significant Upside Opportunity Through Disciplined M&A
Significant Upside Opportunity Through Disciplined M&A Our 5 Growth Pillars Guide Areas of Interest 1 2 3 4 5 Science-Based Core OTC NRT Nutrition Oral Care Naturals North America Europe Private/Value Label & Contract Pack Branded Focus Focus Net Sales Growth / Margin Accretive ROIC > WACC Candidate
Slide 17: Perrigo is Poised for a Strong Second Half of 2021 and Beyond
Perrigo is Poised for a Strong Second Half of 2021 and Beyond! ✓ Consumer take away rebounding sharply ✓ Cough/cold illnesses are increasing ahead of the 2021/2022 season ✓ Pricing actions and productivity increases primarily offsetting input costs ✓ Progress continues in reducing uncertainty ✓ Stro
Slide 18: Ray Silcock, EVP & CFO
Ray Silcock, EVP & CFO
Slide 19: Continuing Operations Summary – Q2:2021
Continuing Operations Summary – Q2:2021 *Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the "Non-GAAP tax adjustments" line item. **The non-GAAP tax adjustments are primarily due to: (1) $10.7 million of tax expense related to pre
Slide 20: Perrigo – Q2 2021
Perrigo – Q2 2021 Q2 YoY $ Organic % Perrigo 2021 Change Change Net Sales $981 $32 0.5% Adjusted Gross Profit $377 $4 Adjusted Gross Profit Margin % 38.4% -90 bps Adjusted Operating Income $118 -$14 Adjusted Operating Margin % 12.0% -190 bps 1. Organic net sales growth excludes the effects of acquis
Slide 21: CSC Americas – Q2 2021
CSC Americas – Q2 2021 Q2 YoY $ Organic % CSC Americas 2021 Change Change Net Sales $622 -$5 -1.4% Adjusted Gross Profit $197 -$9 Adjusted Gross Profit Margin % 31.7% -120 bps Adjusted Operating Income $107 -$17 Adjusted Operating Margin % 17.2% -260 bps 1. Organic net sales growth excludes the effe
Slide 22: CSC International – Q2 2021
CSC International – Q2 2021 Q2 YoY $ Organic % CSC International 2021 Change Change Net Sales $359 $38 4.3% Adjusted Gross Profit $179 $13 Adjusted Gross Profit Margin % 49.9% -180 bps Adjusted Operating Income $47 -$3 Adjusted Operating Margin % 13.1% -250 bps 22 1. Organic net sales growth exclude
Slide 23: Balance Sheet
Balance Sheet TOTAL COMPANY CASH & CASH EQUIVALENTS As of 7/3/2021 As of 4/3/2021 $336M $481M 23
Slide 24: Mission: Quality, Affordable Self-Care Products
To make lives better by bringing Quality, Affordable Self-Care Products that consumers trust everywhere they are sold
Slide 25: Appendix: Reconciliation of Non-GAAP Measures
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES APPENDIX SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended July 3, 2021 Restructuring, Impairment Diluted Charges, and Income Income Earnings Other Operating Tax (loss) from (Loss)
Slide 26: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended June 27, 2020 Restructuring, Impairment Interest, Income Charges, and Other, and from Diluted Other Change in Income co
Slide 27: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Six Months Ended July 3, 2021 Restructuring, Impairment Income Charges, and Income (loss) from Diluted Other Operating Tax continuing Earn
Slide 28: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Six Months Ended June 27, 2020 Restructuring, Impairment Interest, Income Charges, and Other, and from Other Change in Income continuing D
Slide 29: Table II Reconciliation of Non-GAAP Measures
TABLE II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Three Months Ended Three Months Ended July 3, 2021 June 27, 2020 Operating Net Gross R&D DSG&A Income Net Gross R&D DSG&A Operating Consumer Self-Care Americas Sales Profit Expense
Slide 30: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Six Months Ended Six Months Ended July 3, 2021 June 27, 2020 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Consumer Self-Care Americas Sales Profit Expens
Slide 31: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Six Months Ended Six Months Ended July 3, 2021 June 27, 2020 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Consumer Self-Care International Sales Profit E
Slide 32: Table III Adjusted Net Sales Growth - Selected Segments
TABLE III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended July 3, June 27, Total FX Constant 2021 2020 Change Change Currency Change Reported Net sales Consolidated Continuing Operations $ 981.1 $ 948.
Slide 33: Table III (Continued) Adjusted Net Sales Growth
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) One Month Ended May 8, May 2, Total FX Constant 2021 2020 Change Change Currency Change Reported Net sales Consolidated Continuing Operations $ 371.7
Slide 34: Table III (Continued) Adjusted Net Sales Growth
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) One Month Ended May 8, May 2, Total FX Constant 2021 2020 Change Change Currency Change Reported Net sales CSCA $ 241.6 $ 256.2 (5.7)% (0.6)% (6.3)% O
Slide 35: Table III (Continued) Adjusted Net Sales Growth
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) One Month Ended May 8, May 2, Total FX Constant 2021 2020 Change Change Currency Change Reported Net sales CSCI $ 130.1 $ 119.6 8.8% (3.7)% (0.3)% Les
Slide 36: Table IV Reconciliation of Non-GAAP Measures
TABLE IV PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) Three Months Ended July 3, June 27, Total 2021 2020 Change Consolidated Continuing Operations adjusted EPS $ 0.50 $ 0.59 (15.3)% Adjusted gross profit CSCI $ 179.1 $ 165.9 8.0% Adjust
Slide 37: Table V Reported Net Sales by Product Category
TABLE V PERRIGO COMPANY PLC REPORTED NET SALES BY PRODUCT CATEGORY (in millions) (unaudited) Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, 2021 2020 2021 2020 CSCA(1) Upper respiratory $ 102.4 $ 116.7 $ 216.4 $ 271.3 Digestive health 110.4 112.1 223.9 219.0 Nutrition 95.6 88.