Perrigo Company Plc · NYSE:PRGO
Perrigo — Q3 2022 Earnings Presentation
35 slides from Perrigo's earnings presentation, Nov 8, 2022
Slide 1: Third Quarter 2022 Financial Results
Adding HR photos Third Quarter 2022 Financial Results November 8, 2022
Slide 2: Bradley Joseph, VP Investor Relations & Corporate Communications
Bradley Joseph, VP Investor Relations & Corporate Communications
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation 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 o
Slide 4: Murray S. Kessler, President & CEO
Murray S. Kessler, President & CEO
Slide 5: Q3 Growth Driven by Solid Fundamentals
Q3 Growth Driven by Solid Fundamentals Perrigo YoY Financial Highlights Q3 2022 YTD 2022 Organic Net Sales Growth +8% +11% Constant Currency Net Sales Growth +12% +14% Adj. Op. Income Growth +19% -3% Constant Currency Adj. Op. Inc. Growth +32% +6% Adj. EPS Growth +24% -9% Constant Currency Adj. EPS
Slide 6: Strong Revenue Growth Continues
Strong Revenue Growth Continues Quarterly Growth YoY Q3 YTD Net Sales (constant currency) 3-Year Stack +20.2% +9.7% +12.3% +6.9% (constant currency) +5.7% +3.1% CSCA -0.3% +4.4%(organic) CSCI Total -9.1% 3-Year CAGR (YTD Q3’19-YTD Q3’22) Q1:21 Q2:21 Q3:21 Q4:21 Q1:22 Q2:22 Q3:22 6 1. See attached Ap
Slide 7: Q3 Net Sales Growth Driven by the Addition of HRA, Strategic Pricing & Share Gains
Q3 Net Sales Growth Driven by the Addition of HRA, Strategic Pricing & Share Gains Q3 2022 Net Sales Growth YoY Q3 2022 Perrigo Category (constant currency) Net Sales Growth YoY (constant currency) 28.6% Women's Health 100.6% Skin Care 28.1% Upper respiratory 19.0% 12.3% Nutrition 18.1% Oral Care 7.
Slide 8: Importantly, Perrigo is Growing Market Share Globally
Importantly, Perrigo is Growing Market Share Globally Perrigo Q3 Market Share Change YoY1 +0.3 pts +0.3 pts +0.6 pts Of Of U.S. Store Of U.S. U.S. OTC Brand OTC E-commerce +1.5 pts +2.6 pts +1.9 pts +0.6 pts Of U.S. Oral Of U.S. Of Of European Care Nutrition Europe OTC2 E-commerce3 1. Source: IRI MU
Slide 9: …And U.S. Store Brand is Gaining Share From National Brand
…And U.S. Store Brand is Gaining Share From National Brand Total Store Brands Versus Total National Brands U.S. OTC Category Dollar Share Pt. Change YoY 4% Omni-channel, 4-week periods 3% 2% 1% 0% -1% -2% -3% -4% 1/1/2022 2/1/2022 3/1/2022 4/1/2022 5/1/2022 6/1/2022 7/1/2022 8/1/2022 9/1/2022 10/1/2
Slide 10: Perrigo U.S. OTC Outpacing Category Growth in Q3, Which Is Normalizing Post COVID
Perrigo U.S. OTC Outpacing Category Growth in Q3, Which Is Normalizing Post COVID, However Below Forecasted Levels Current Perrigo Percent $ Change Versus Year Ago Revenue Dynamics First Half 3rd Qtr Omni-Channel Omni-Channel • Normalizing Category Trends Total U.S. OTC Consumer Takeaway1 +13.4% +2.
Slide 11: Unfavorable Currency Translation, Further Input Cost Increases & Labor Shortages Are Impacting Perrigo
Additionally, Unfavorable Currency Translation, Further Input Cost Increases & Labor Shortages Are Impacting Perrigo DYNAMIC MACRO-ECONOMIC FACTORS Foreign Exchange Inflation Driven Translation Cost Increases Unfavorable 2022 impacts versus Prior year of: • Currency translation: ~$230M net sales, ~$
Slide 12: Leading to Updated 2022 Guidance
Leading to Updated 2022 Guidance Reaffirming Organic Net Sales Growth YoY Outlook to 9.0%-10.0% Reaffirming USD Net Sales Growth YoY Outlook of 8.5%-9.5% • Benefits from purchase of Gateway plant and U.S. & Canadian Good Start® brand offset by continuing unfavorable currency translation Updating Adj
Slide 13: Perrigo Strategic Initiatives and Further Pricing Actions to Offset Headwinds
Perrigo Strategic Initiatives and Further Pricing Actions to Offset Headwinds HRA Growth on-track; raising cost synergy estimate to 1 €50M from €40M by end of 2024. One-time cost Integration estimate of ~€30M to adj. operating income or ~$0.18 adj. EPS in 2023 Gross Margin On track for Q4’22 adjuste
Slide 14: First Phase of Supply Chain Reinvention Initiated: Infant Formula Manufacturing
First Phase of Supply Chain Reinvention Initiated: Expanding & Strengthening U.S. Manufacturing of Infant Formula Purchase of Gateway Infant Formula Plant, along INFANT FORMULA with U.S. and Canadian rights to the Good Start® Infant Formula Brand • Strategic investment of $170M; expect $50M+ adj. op
Slide 15: Key Takeaways
KEY TAKEAWAYS • Business fundamentals remain strong, gaining market share globally • Adjusted gross margin recovery on-track and continue to expect Q4’22 >37% • HRA integration remains on track; synergies raised to €50M from €40M by end of 2024; expect 2023 adj. EPS impact of ~$0.18 to capture distr
Slide 16: Eduardo Bezerra, EVP & CFO
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Slide 17: Third Quarter 2022 GAAP to Non-GAAP Reconciliation
Third Quarter 2022 GAAP to Non-GAAP Reconciliation n/m 17
Slide 18: Perrigo – Third Quarter 2022
Perrigo – Third Quarter 2022 Constant Perrigo Q3 2022 YoY $ Change YoY % Change Currency % Organic % Change ($ in millions, except margin) Change Net Sales $1,100 $57 5.5% 12.3% 7.7% Adjusted Gross Profit $401 $43 11.8% 22.3% Adjusted Gross Profit Margin % 36.5% --- 210 bps 310 bps Adjusted Operatin
Slide 19: CSC Americas – Third Quarter 2022
CSC Americas – Third Quarter 2022 CSCA Q3 2022 YoY $ Change YoY % Change Organic % Change ($ in millions, except margin) Net Sales $722 $28 4.0% 7.3% Adjusted Gross Profit $203 $10 5.4% Adjusted Gross Profit Margin % 28.2% --- 40 bps Adjusted Operating Income $104 ($1) (1.3%) Adjusted Operating Marg
Slide 20: CSC International – Third Quarter 2022
CSC International – Third Quarter 2022 Constant CSCI Q3 2022 YoY $ Change YoY % Change Currency % Organic % Change Change ($ in millions, except margin) Net Sales $378 $29 8.4% 28.6% 8.3% Adjusted Gross Profit $198 $32 19.4% 41.5% Adjusted Gross Profit Margin % 52.4% --- 480 bps 480 bps Adjusted Ope
Slide 21: Increasing HRA Synergy Target to €50M from €40M by the end of 2024
Increasing HRA Synergy Target to €50M from €40M by the end of 2024 €50 Million €60 Million of synergies total cost to achieve synergies Optimize 1. ~€30M related to expected sales Insource overlapping overlapping fixed returns as part of the distributor transition; logistics, selling cost infrastruc
Slide 22: To make lives better by bringing quality, affordable Self-Care Products
To make lives better by bringing quality, affordable Self-Care Products that consumers trust everywhere they are sold
Slide 23: Appendix
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES APPENDIX SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) 23
Slide 24: 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) 24
Slide 25: 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) 25
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) 26
Slide 27: Table II Reconciliation of Non-GAAP Measures
TABLE II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) 27
Slide 28: 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) 28
Slide 29: Adjusted Net Sales Growth – Consolidated and Segment Information
TABLE III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH – CONSOLIDATED AND SEGMENT INFORMATION (in millions) (unaudited) 29
Slide 30: Adjusted Net Sales Growth – Consolidated and Segment Information
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH – CONSOLIDATED AND SEGMENT INFORMATION (in millions) (unaudited) 30
Slide 31: Adjusted Net Sales Growth – Consolidated and Segment Information
TABLE IV PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH – CONSOLIDATED AND SEGMENT INFORMATION (in millions) (unaudited) 31
Slide 32: Table V Reconciliation of Non-GAAP Measures
TABLE V PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION (in millions) (unaudited) 32
Slide 33: Table VI Reconciliation of Non-GAAP Measures
TABLE VI PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION (in millions) (unaudited) 33
Slide 34: Adjusted Net Sales Growth – Consolidated
TABLE VII PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH – CONSOLIDATED (in millions) (unaudited) 34
Slide 35: Adjusted Net Sales Growth – Consolidated
TABLE VII PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH – CONSOLIDATED (in millions) (unaudited) 35