Herbalife Ltd. · NYSE:HLF
Herbalife — Q1 2023 Earnings Presentation
19 slides from Herbalife's earnings presentation, May 2, 2023
Slide 1: Q1 2023 Earnings Presentation
Q1 2023 Earnings Presentation May 2, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-loo
Slide 3: Strategic Update
Q1 2023 Strategic Update Michael O. Johnson Chairman & CEO
Slide 4: Business & Financial Update
Q1 2023 Business & Financial Update Alex Amezquita CFO
Slide 5: Key Financial Highlights
Q1 2023 EARNINGS PRESENTATION Key Financial Highlights 1. Herbalife reports Q1 2023 reported net sales down 6.3% YoY; down 2.6% YoY on constant currency basis1 • YoY reported net sales trends improved from Q4 2022 YoY trends 2. Q1 gross profit margin of 76.2% negatively impacted by ~150 bps FX headw
Slide 6: Results – Financial Highlights
Q1 2023 EARNINGS PRESENTATION Q1 2023 Results – Financial Highlights Net Sales Adjusted EBITDA1 Adjusted Diluted EPS1 (6.3%) $129M $0.54 vs Q1 2022 Q1 2023 Q1 2023 YoY Reported Net Sales Trends Improved in Q1 370 bps 10.3% ~$67M Currency headwind Q1 2023 Q1 2023 vs Q1 2022 Adj EBITDA1 Margin Debt Pa
Slide 7: Q1 Drivers of Net Sales Change
Q1 2023 EARNINGS PRESENTATION Net Sales Q1 Drivers of Net Sales Change (% Change vs Prior Year) 13.0% (1.1%) (2.6%) (3.7%) (6.3%) (14.5%) Country Mix Local Currency Reported Volume Pricing FX and Other Net Sales1 Net Sales 1 Non-GAAP Measure. Refer to Appendix for discussion of why we believe adjust
Slide 8: Adjusted EBITDA Margin Bridge
Q1 2023 EARNINGS PRESENTATION Adjusted EDITDA1 Margin Bridge Q1 Drivers of Adjusted EBITDA1 Margin Change (% Change vs Prior Year) 4.8% 13.9% (2.2%) (0.6%) (2.2%) 10.3% (1.0%) (2.4%) Inventory Promotional Q1 2022 Pricing Input Costs Reserves Other FX Q1 2023 Related Spend & Other COGS 1 Non-GAAP Mea
Slide 9: Active Sales Leaders Remain Above 2019 Levels
Q1 2023 EARNINGS PRESENTATION Active Sales Leaders Remain Above 2019 Levels Active Sales Leaders 600,000 493K 500,000 480K 462K 400,000 300,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2019 2020 2021 2022 2023 9
Slide 10: New Distributors and Preferred Customers Slightly Below Q1 2022
Q1 2023 EARNINGS PRESENTATION New Distributors and Preferred Customers Slightly Below Q1 2022 New Distributors and Preferred Customers 1,000,000 800,000 670K 660K 600,000 618K 400,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2019 2020 2021 2022 2023 10
Slide 11: Q1 Regional Scorecard
Q1 2023 EARNINGS PRESENTATION Q1 Regional Scorecard Local Currency Reported Net Sales Net Sales1 Q1 2023 Q1 2022 YoY % Change YoY % Change $ million Asia Pacific 413.6 407.7 +1% +9% North America 297.2 326.2 (9%) (9%) EMEA 268.1 295.0 (9%) (3%) Latin America2 205.5 201.3 +2% +0% China 67.7 105.6 (36
Slide 12: Transformation Program Update
Q1 2023 EARNINGS PRESENTATION Transformation Program Update • Initiated in 2021 to strategically optimize global processes for future growth • Significant progress in Q1; actions to date result in ~$35M of savings in 2023; on track to exceed $70M of total program run rate savings in 2024 and beyond
Slide 13: Capital Structure Update
Q1 2023 EARNINGS PRESENTATION Capital Structure Update • Strategically paid down debt by ~$67M during Q1 2023, including all amounts outstanding under 2018 Revolving Credit Facility • $454 million of cash on hand at Mar 31 ‘23 • Compliant with all debt covenants as of Mar 31’ 23 • Gross leverage rat
Slide 14: Q&A
Q1 2023 EARNINGS PRESENTATION Q&A 14
Slide 15: Appendix
Q1 2023 EARNINGS PRESENTATION Appendix 15
Slide 16: Supplemental Information
Q1 2023 EARNINGS PRESENTATION Supplemental Information Non-GAAP Financial Measures Adjusted EBITDA and Adjusted Diluted EPS In addition to its reported results calculated in accordance with GAAP, the Company has included in this presentation adjusted EBITDA and adjusted diluted EPS, performance meas
Slide 17: Reconciliation of Reported Net Income to Adjusted EBITDA
Q1 2023 EARNINGS PRESENTATION Reconciliation of Reported Net Income to Adjusted EBITDA THREE MONTHS ENDED MARCH 31 $ million 2023 2022 Net income, as reported 29.3 98.2 Interest expense, net 39.4 29.7 Income taxes 1.8 25.2 Depreciation and amortization 27.6 29.2 EBITDA 98.1 182.3 Net expenses relate
Slide 18: Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS
Q1 2023 EARNINGS PRESENTATION Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS THREE MONTHS ENDED MARCH 31 $ per share 2023 2022 Diluted earnings per share, as reported 0.29 0.96 Net expenses related to COVID-19 pandemic ― 0.02 Expenses related to Transformation Program 0.27 0.02 Digit
Slide 19: Herbalife
Herbalife’