Slide 1: Earnings Conference Call Fiscal Q2 2023
Earnings Conference Call Fiscal Q2 2023 May 12, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement Regarding Forward-Looking Statements This presentation contains express or implied "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements
Slide 3: Agenda and Presenters
Agenda and Presenters Dev Kurdikar Today’s topics: Chief Executive Officer embecta overview Strategic priorities Jake Elguicze Chief Financial Officer Enterprise highlights Revenue and earnings review Guidance Pravesh Khandelwal Vice President, Investor Relations Q&A 3
Slide 4: Mission and Vision
Mission To develop and provide solutions that make life better for people living with diabetes Advance every day together Vision A life unlimited by diabetes 4
Slide 5: Strategic Priorities for Fiscal Year 2023
Strategic Priorities for Fiscal Year 2023 Strengthen base business • Maintain core injection business revenue • Navigate through operating environment; manage costs Separate and stand-up • Continue to execute on ERP implementation • Manage through the temporary suspension of manufacturing operations
Slide 6: Q2 Fiscal Year 2023 Enterprise Highlights
Q2 Fiscal Year 2023 Enterprise Highlights • Continued execution leads to strong results that exceeded our internal expectations • Published inaugural environmental, social, and governance (ESG) strategy report highlighting ESG initiatives and progress • Held embecta’s first industry-sponsored educat
Slide 7: Tidepool Partnership to Advance our Strategic Priorities
Tidepool Partnership to Advance our Strategic Priorities • embecta and Tidepool have entered into a collaboration agreement to develop an automated insulin delivery algorithm in connection with the continued development of embecta’s type 2 diabetes closed-loop proprietary patch pump system • Tidepoo
Slide 8: Q2 FY23 vs. Q2 FY22 Revenue
Q2 FY23 vs. Q2 FY22 Revenue Dollars in Millions Three Months Ended % Increase / Decrease As-Reported Foreign Currency Constant Currency March 31, 2023 March 31, 2022 Revenue Growth Impact Revenue Growth U.S. $146.4 $141.3 3.6% ꟷ 3.6% International $130.7 $133.2 (1.9%) (6.3%) 4.4% Total $277.1 $274.5
Slide 9: Q2 FY23 Financial Highlights
Q2 FY23 Financial Highlights Q2 FY23 revenue of $277.1 million, up 0.9% on an as-reported basis; up 4.0% on a constant currency basis, as compared to the Revenue prior year period Gross Q2 FY23 GAAP gross profit and margin of $189.8 million and 68.5%, compared to $191.2 million and 69.7% in the prio
Slide 10: Fiscal Year 2023 Financial Guidance
Fiscal Year 2023 Financial Guidance Dollars in Millions, Current Previous (1) except per share and percentages Low High Low High Revenue $1,101 $1,113 $1,084 $1,107 As-Reported % (2.5%) (1.5%) (4.0%) (2.0%) Constant Currency % 0.0% 1.0% (1.5%) 0.5% F/X % (2.5%) (2.5%) Contract Manufacturing $7.5 $10
Slide 11: Thank you
Thank you
Slide 12: Appendix
Appendix embecta’
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures In evaluating our operating performance, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures including (i) earnings before interest, taxes, depreciation, and amortization (“EBITDA”), (ii) Adjusted EBITDA
Slide 14: Adjusted Gross Profit Margin Reconciliation
Adjusted Gross Profit Margin Reconciliation Dollars in Millions, except percentages Three Months Ended Six Months Ended March 31, 2023 (1) March 31, 2023 (1) Gross Profit $189.8 $378.6 Gross Profit Margin 68.5% 68.5% Stock-based compensation expense 0.1 0.1 Amortization of intangible assets (2) 0.2
Slide 15: Adjusted Operating Income Margin Reconciliation
Adjusted Operating Income Margin Reconciliation Dollars in Millions, except percentages Three Months Ended Six Months Ended March 31, 2023 (1) March 31, 2023 (1) GAAP Operating Income $55.6 $144.4 GAAP Operating Income Margin 20.1% 26.1% Amortization of intangible assets (2) 0.2 0.3 One-time stand u
Slide 16: Adjusted Operating Income Margin Reconciliation – Continued
Adjusted Operating Income Margin Reconciliation – Continued (1) Prior to the Separation on April 1, 2022, the Company’s historical combined financial statements were prepared on a standalone basis. These results did not purport to reflect what the Company’s results of operations, comprehensive incom
Slide 17: Adjusted Net Income Per Diluted Share Reconciliation
Adjusted Net Income Per Diluted Share Reconciliation Dollars in Millions, except per share amounts Three Months Ended Six Months Ended March 31, 2023 (1) March 31, 2023 (1) Income Before Income Taxes $24.5 $80.6 Adjustments: Amortization of intangible assets (2) 0.2 0.3 One-time stand up costs (3) 2
Slide 18: Adjusted Net Income Per Diluted Share Reconciliation – Continued
Adjusted Net Income Per Diluted Share Reconciliation – Continued (1) Prior to the Separation on April 1, 2022, the Company’s historical combined financial statements were prepared on a standalone basis. These results did not purport to reflect what the Company’s results of operations, comprehensive
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Dollars in Millions, except percentages Three Months Ended Six Months Ended March 31, March 31, March 31, March 31, 2023 2022 2023 2022 GAAP Net Income $14.0 $79.6 $49.2 $178.4 Interest expense, net 26.8 4.9 52.4 4.9 Income taxes 10.5 14.3 31.4 32.1 Depreciation and am
Slide 20: Adjusted EBITDA Reconciliation – Continued
Adjusted EBITDA Reconciliation – Continued (1) Represents stock-based compensation expense incurred during the three and six months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2023, $4.7 million is recorded in Selling and administrative expense, $0.6 million is
Slide 21: Fiscal Year 2023 Updated Financial Guidance Assumptions
Fiscal Year 2023 Updated Financial Guidance Assumptions Dollars in Millions, except percentages Current Previous Interest Expense, Net ~ $113 ~ $115 Adjusted Tax Rate ~ 25% ~ 25% Weighted Average Shares (in millions) ~ 57.7 ~ 57.7 Foreign Exchange EUR/USD ~ 1.06 ~ 1.06 USD/YEN ~ 136 ~ 134 USD/CNY ~