Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Q2 2022 Earnings Presentation
50 slides from Bausch Health Companies's earnings presentation, Aug 9, 2022
Slide 1: Second Quarter 2022 Earnings Call
Second Quarter 2022 Earnings Call August 9th, 2022
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking information and statements, within the meaning of applicable securities laws whether or not an advance ruling from the Canada Revenue Agency and/or the U.S. Internal Revenue Service will be (collectively, “forward-looking statemen
Slide 3: Non-GAAP information
Non-GAAP information To supplement the financial measures prepared in accordance with U.S. for, or superior to, the corresponding measures calculated in accordance generally accepted accounting principles (GAAP), the Company uses certain with GAAP. non-GAAP financial measures and ratios including (i
Slide 4: Agenda
1 Key developments 2 2Q financial results Agenda Actions taken 3 FY 2022 guidance 4 and path forward 4
Slide 5: Key developments
Key developments BAUSCE-
Slide 6: Key developments
Vigorously defend XIFAXAN® intellectual property Committed to creating value, Key improving our balance sheet and developments1 advancing our strategic alternatives as we work through patent litigation New leadership team focused on driving performance and has taken action to improve results 1. See
Slide 7: Second quarter financial results
2 Second quarter financial results 7
Slide 8: 2Q22 Consolidated Revenue
Consolidated 2Q22 Revenue Revenue change vs 2Q21, in millions USD Bausch Health Bausch Pharma + Solta2 Bausch + Lomb $2,100 $1,967 5% 17% 23% $1,026 49% 20% $941 63% 23% Vision Care 2Q21 2Q22 Salix Diversified Products Surgical International Solta Medical Ophthalmic Pharmaceuticals Reported (6%) Rep
Slide 9: 2Q22 Bausch Pharma + Solta revenue
Unconsolidated 2Q22 Bausch Pharma + Solta revenue Revenue change vs 2Q21, in millions USD Salix International Diversified Products Solta Medical 10% 5% 81% 26% 14% 42% $501 5% $233 $235 51% $57 6% 25% 8% 31% 95% Xifaxan® Trulance® Neuro Ortho Derm EMEA Latam Canada Console Consumable Relistor® Other
Slide 10: Bausch Pharma + Solta highlights by segment
Bausch Pharma + Solta highlights by segment Revenue change vs 2Q21: Salix International 2Q 2022 Revenue: $501M 2Q 2022 Revenue: $233M Reported: (3%), Organic2: (3%) Reported: (26%), Organic2: 2% Flat TRx1 growth in Xifaxan®, NRx1 share up ~100 bps to 88% Growth driven by Canada and Mexico $21M
Slide 11: 2Q22 Bausch + Lomb revenue
Unconsolidated 2Q22 Bausch + Lomb revenue Revenue change vs 2Q21, in millions USD Ophthalmic Revenue Vision Care Surgical Pharmaceuticals 934 941 27% 36% 41% $589 55% $184 $168 59% 64% 18% 2Q21 2Q22 Implantables Equipment Change 2Q22 vs 2Q21: Contact Lens Consumer Consumables/Other U.S. Internationa
Slide 12: 2Q22/YTD Revenue performance
Consolidated 2Q22/YTD Revenue performance 2Q22 2Q21 Reported Organic1 YTD22 YTD21 Reported Organic1 Salix $501M $516M (3%) (3%) $965M $988M (2%) (2%) International2 $233M $313M (26%) 2% $477M $619M (23%) 5% Diversified Products2 $235M $264M (11%) (11%) $484M $560M (14%) (14%) Neurology & Other $121M
Slide 13: 2Q22 GAAP financial results
Consolidated 2Q22 GAAP financial results Favorable Three Months Ended (Unfavorable) 6.30.22 6.30.21 Reported Revenues $1,967M $2,100M (6%) GAAP Gross Profit $1,082M $1,081M 0% GAAP Gross Margin 55.0% 51.5% 350 bps Selling, A&P $473M $470M (1%) GAAP G&A $203M $215M 6% R&D $127M $115M (10%) GAAP Total
Slide 14: 2Q22 Non-GAAP financial results
Consolidated 2Q22 Non-GAAP financial results Three Months Ended Favorable (Unfavorable) Constant 6.30.22 6.30.21 Change Currency1 Revenues $1,967M $2,100M (6%) (3%) Adj. Gross Profit 1 $1,390M $1,488M (7%) (4%) Adj. Gross Margin 1 70.7% 70.9% (20 bps) Selling, A&P (same as reported) $473M $470M (1%)
Slide 15: Quarterly balance sheet summary
Consolidated Quarterly balance sheet summary 6.30.22 6.30.21 12.31.21 Cash, cash equivalents1 $1,879M1 $1,856M1,5 $2,119M1 Revolving Credit Drawn $425M $0M $285M Senior Secured Debt2 $10,275M $8,273M $7,958M Senior Unsecured Debt2 $11,781M $15,412M $14,912M Total Consolidated Debt2 $22,056M $23,685M
Slide 16: Bausch Pharma + Solta debt maturity profile
Unconsolidated Bausch Pharma + Solta debt maturity profile1,2 As of June 30, 2022, in millions 6000 $5,613 TOTAL BAUSCH PHARMA + SOLTA 5000 DEBT 4000 $19.6B2 $3,536 Total debt down ~$3.8 $3,375 $2,985 billion in 2Q22 3000 vs 1Q22 and ~$5.8B decrease in mandatory payments through 20252 2000 $1,625 $1
Slide 17: FY 2022 guidance
3 FY 2022 guidance 17
Slide 18: Updated 2022 guidance
Updated 2022 guidance1,2 All ranges are approximate and in USD Bausch Pharma + Bausch Pharma + May Guidance Solta Base Updated Guidance Solta FX Impact performance $8.25B - $8.40B +$5M ($190M) $8.05B - $8.22B Bausch Pharma + Solta Bausch Pharma + Solta Revenue 2 $4.50B - $4.60B $4.30B - $4.42B Bausc
Slide 19: Bausch Pharma + Solta full-year outlook
Unconsolidated Bausch Pharma + Solta full-year outlook3,5 All assumptions are approximate and in USD Prior Guidance4 Current Guidance Total Revenues $4.50B - $4.60B $4.30B - $4.42B Adjusted EBITDA (non-GAAP)1 $2.48B - $2.60B $2.28B - $2.34B Key Assumptions May 20224 Current Guidance Adjusted Gross M
Slide 20: Actions taken and path forward
4 Actions taken and path forward 20
Slide 21: 2022 Bausch Pharma + Solta priorities
2022 Bausch Pharma + Solta priorities1 Accelerate growth engines of Salix and International 1 Drive growth through Stabilize key cash-generating businesses of Dermatology, operational excellence Neurology and Generics across the enterprise Recovery of procedures in Asia Pacific, availability o
Slide 22: Key actions underway
Key actions underway1 Salix International • Activate the patient and caregiver through • Expand branded generic product line targeted omnichannel DTC campaigns • Increase geographic footprint in key • Establish XIFAXAN® as the treatment of markets (Poland, Mexico, Canada) choice with tailored HCP ca
Slide 23: Key takeaways
Key takeaways Vigorously defend our intellectual property and address patient needs with XIFAXAN® Focus on creating value through driving growth, profitability and improving our balance sheet Resilient, motivated and working with great sense of urgency and ownership, taking a series of actions to im
Slide 24: Bausch Health
BAUSCH Health
Slide 25: Appendix
BAUSCH: Health Appendix I
Slide 26: Inventory in select U.S. businesses (QTD)
Inventory in select U.S. businesses (QTD)1 Months on Hand As of As of As of As of Business Change Change Mar 31, Jun 31, Mar 31, Jun 30, Units 2021 2021 2Q21 2022 2022 2Q22 Ortho 0.87 0.98 0.12 1.12 1.19 0.07 Dermatalogics Neurology 0.82 0.99 0.17 1.10 1.08 (0.02) Salix 0.82 0.81 (0.01) 0.98 0.94 (0
Slide 27: Inventory in select U.S. businesses (YTD)
Inventory in select U.S. Businesses (YTD)1 Months on Hand As of As of As of As of Business Change Change Dec 31, Jun 31, Dec 31, Jun 30, Units 2020 2021 2Q21 2021 2022 2Q22 Ortho 0.72 0.98 0.26 1.03 1.19 0.16 Dermatalogics Neurology 0.56 0.99 0.43 1.17 1.08 (0.09) Salix 0.74 0.81 0.07 0.99 0.94 (0.0
Slide 28: YTD GAAP financial results
Consolidated YTD GAAP financial results Favorable Six Months Ended (Unfavorable) 6.30.22 6.30.21 Reported Revenues $3,885M $4,127M (6%) GAAP Gross Profit $2,131M $2,029M 5% GAAP Gross Margin 54.9% 49.2% 570 bps Selling, A&P $908M $888M (2%) GAAP G&A $390M $403M 3% R&D $254M $227M (12%) GAAP Total Op
Slide 29: YTD Non-GAAP financial results
Consolidated YTD Non-GAAP financial results Six Months Ended Favorable (Unfavorable) Constant 6.30.22 6.30.21 Reported Currency1 Revenues $3,885M $4,127M (6%) (3%) Adj. Gross Profit 1,2 $2,757M $2,941M (6%) (4%) Adj. Gross Margin 1 71.0% 71.3% (30 bps) Selling, A&P (same as reported) $908M $888M (2%
Slide 30: Segment profit
Segment profit1 In millions USD 2Q 2022 Salix International Diversified Solta Total Segment Revenue $501M $233M $235M $57M $1,026M Segment Profit1 $354M $66M $141M $20M $581M 2Q 2021 Salix International Diversified Solta Total Segment Revenue $516M $313M $264M $73M $1,166M Segment Profit1 $370M $103
Slide 31: Long term debt maturity profile
Unconsolidated Long term debt maturity profile Bausch Pharma + Solta In millions USD 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 - - - Unse
Slide 32: Long term debt maturity profile (Bausch + Lomb)
Unconsolidated Long term debt maturity profile Bausch + Lomb In millions USD As of June 30, 20221 $M Total 2022 2023 2024 2025 2026 2027 Revolver - - - - - - - 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
Slide 33: 2Q22 Other financial information
2Q22 Other financial information In millions USD unless otherwise indicated Three Months Ended Favorable (Unfavorable) Constant June 30, 2022 June 30, 2021 Reported Currency1,2 Cash Interest Expense $396M $352M (13%) (13%) Net Interest Expense $407M $362M (12%) (12%) Non-cash adjustments Depreciatio
Slide 34: YTD Other financial information
YTD Other financial information In millions USD unless otherwise indicated Six Months Ended Favorable (Unfavorable) Constant June 30, 2022 June 30, 2021 Reported Currency1,2 Cash Interest Expense $744M $707M (5%) (5%) Net Interest Expense $767M $728M (5%) (5%) Non-cash adjustments Depreciation $87M
Slide 35: 2Q22 Non-GAAP adjustments EPS impact
2Q22 Non-GAAP adjustments EPS impact2 In millions USD unless otherwise indicated Three Months Ended June 30, 2022 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) share Impact Net loss $ (139) $ (0.38) $ (593) $ (1.65) Non-GAAP adjustments:1 Amortization of intangible as
Slide 36: YTD Non-GAAP adjustments EPS impact
YTD Non-GAAP adjustments EPS impact2 In millions USD unless otherwise indicated Six Months Ended June 30, 2022 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) share Impact Net loss $ (205) $ (0.57) $ (1,200) $ (3.35) Non-GAAP adjustments:1 Amortization of intangible ass
Slide 37: 2Q22 Reconciliation of operating income to adjusted EBITA
2Q22 Reconciliation of reported operating income to adjusted EBITA (non-GAAP)1 In millions USD Q2 2022 Q2 2021 Gross Gross Selling & G&A and R&D Operating Operating Gross Gross Selling and G&A and R&D Operating Operating Profit2 Margin2 Advertising Other Expense Expense Income Profit2 Margin2 Advert
Slide 38: YTD Reconciliation of operating income to adjusted EBITA
YTD Reconciliation of reported operating income to adjusted EBITA (non-GAAP)1 In millions USD YTD 2022 YTD 2021 Gross Gross Selling and G&A and R&D Operating Operating Gross Gross Selling and G&A and R&D Operating Operating Profit2 Margin2 Advertising Other Expense Expense Income Profit2 Margin2 Adv
Slide 39: 2Q22 Reconciliation of net income (loss) to EBITDA and adjusted EBITDA
2Q22 Reconciliation of reported net income (loss) to EBITDA1 and adjusted EBITDA1 In millions USD Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Net loss $ (139) $ (593) $ (205) $ (1,200) Interest expense, net 407 362 767 728 (Benefit from) provision for income taxes 10 (7
Slide 40: 2Q22 Reconciliation of reported revenue to organic revenue
2Q22 Reconciliation of reported revenue to organic revenue1,2 and organic revenue growth1,3 For Three Months Ended Change in Change in Reported Organic June 30, 2022 June 30, 2021 Revenue Revenue1 Organic Organic Revenue Changes in Revenue Revenue Divestitures Revenue as Exchange (Non- as and Discon
Slide 41: YTD Reconciliation of reported revenue to organic revenue
YTD Reconciliation of reported revenue to organic revenue1 and organic revenue growth1,3 For Six Months Ended Change in Change in Reported Organic June 30, 2022 June 30, 2021 Revenue Revenue1 Organic Organic Revenue Changes in Revenue Revenue Divestitures Revenue as Exchange (Non- as and Disconti- (
Slide 42: 2Q22 Reconciliation of revenue to organic revenue growth
2Q22 Reconciliation of reported revenue to organic revenue1 and organic revenue growth1 For Three Months Ended Change in Reported Change in Organic Revenue Revenue1 June 30, 2022 June 30, 2021 Provision Organic Divestiture Organic Revenue Changes in Revenue for Revenue s and Revenue as Exchange as A
Slide 43: Reconciliation of operating cash flow to adj. cash flows from operations
Reconciliation of reported cash provided by operating activities to adj. cash flows from operations (non-GAAP)1 In millions USD Three Months Ended Six Months Ended June 30 June 30 2022 2021 2022 2021 Cash provided by operating activities $123 $ 395 $ 60 $ 838 Payments of legacy legal settlements, ne
Slide 44: Trailing twelve months adjusted EBITDA
Trailing twelve months adjusted EBITDA1 In millions USD Trailing Twelve Months Ended Jun-22 Mar-22 Dec-21 Sep-21 Jun-21 Net income (loss) $ 58 $ (396) $ (937) $ (1,161) $ (1,282) Interest expense, net 1,458 1,413 1,419 1,454 1,477 Benefit from income taxes (32) (119) (87) (278) (298) Depreciation an
Slide 45: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures To supplement the financial measures prepared in accordance with U.S. generally accepted Adjusted EBITDA (non-GAAP) is Net income (loss) (its most directly comparable GAAP accounting principles (GAAP), the Company uses certain non-GAAP fin
Slide 46: Non-GAAP Appendix
Non-GAAP Appendix Share-based Compensation: The Company has excluded costs relating to share-based historical operations and forward-looking guidance and, as a result, provide useful compensation. The Company believes that the exclusion of share-based compensation supplemental information to investo
Slide 47: Non-GAAP Appendix
Non-GAAP Appendix Adjusted Net Income and Adjusted Net Income Attributable to Bausch Health Organic Growth/Change and Organic Revenue Adjusted net income (loss) (non-GAAP) (its most directly comparable GAAP financial measure), Organic revenue and organic revenue change are non-GAAP measures. Non-GAA
Slide 48: 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 49: Non-GAAP Appendix
Non-GAAP Appendix Adjusted SG&A Expenses and Adjusted G&A Expenses Adjusted SG&A expenses (non-GAAP) represents selling, general and administrative expenses The Company believes that Total Adjusted Operating Expenses (non-GAAP) is useful to investors as (“SG&A expenses”) (its most directly comparabl
Slide 50: 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 — Q2 2022 Earnings Presentation on 6ix