Perrigo Company Plc · NYSE:PRGO
Perrigo — Q1 2020 Earnings Presentation
35 slides from Perrigo's earnings presentation, Apr 30, 2020
Slide 1: First Quarter 2020 Financial Results
First Quarter 2020 Financial Results April 30, 2020
Slide 2: 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 3: Bradley Joseph, VP Investor Relations and Corporate Communications
Bradley Joseph, VP Investor Relations and Corporate Communications 3
Slide 4: Murray S. Kessler, President & CEO
Murray S. Kessler, President & CEO 4
Slide 5: Seasoned Leadership & +11,000 Dedicated Employees Meeting the Needs of Society
Seasoned Leadership & +11,000 Dedicated Employees Meeting the Needs of Society PRIORITIES 1. Employee safety and business continuity 2. Appreciating frontline employees 3. Supporting the communities where we work and live 5
Slide 6: COVID-19: Restricting and Prioritizing Production – All Facilities Running
COVID-19: Restricting and Prioritizing Production – All Facilities Running • Restricted access to facilities • Business continuity protocols • Eliminated non-essential travel • Prioritized production • $4M in frontline employee bonuses 6
Slide 7: COVID-19: Community Response – $1.5M in Donations
COVID-19: Community Response – $1.5M in Donations Formulated & donated >500K units of hand sanitizer Feeding America American Red Cross Oral Electrolyte Solution Kids Food Basket Allegan County Food Pantry 7 Donation
Slide 8: A Special Thank You to All Our Front-Line Employees!
A Special Thank You to All Our Front-Line Employees!
Slide 9: Key Achievements in Q1 2020
Key Achievements in Q1 2020 • On track with our FY20 operational objectives while advancing transformation to a Consumer Self- Care Company • Identified and investing in 5 key global growth platforms • Core OTC, Oral Health, Science-Based Naturals, Nutrition and Smoking Cessation • Closed Dr. Fresh
Slide 10: Key Financial Results for Q1 2020
Key Financial Results for Q1 2020 Delivered Reported Net Sales Growth of 14%; Excluding Exited Businesses & Currency, Net Sales Grew 18% • Overall financial performance exceeded expectations in the quarter: • Q1 reported net sales of $1.34B, an increase of 14% YoY, with 11% organic growth • Q1 adjus
Slide 11: All Businesses Contributed to Net Sales Growth
All Businesses Contributed to Net Sales Growth Q1 2020 Net Sales Growth YoY, Excluding Exited Businesses & Currency Perrigo Consolidated 18% Worldwide Consumer 21% CSC Americas 25% CSC International 14% Rx Pharmaceuticals 6% 0% 5% 10% 15% 20% 25% 30% *See attached Appendix for reconciliation of Adju
Slide 12: CSC Americas Reported Net Sales Grew 20% YoY
CSC Americas Reported Net Sales Grew 20% YoY Excluding Exited Businesses & Currency, Net Sales Grew 25% Q1 2020 Reported Net Sales Change YoY Total CSCA $119 OTC $79 Oral Health $55 Nutrition $5 Exited Animal Health -$20 -$40 -$20 $0 $20 $40 $60 $80 $100 $120 $140 *See attached Appendix for reconcil
Slide 13: COVID-19 Impact on Q1 2020 CSCA Organic Net Sales Growth
COVID-19 Impact on Q1 2020 CSCA Organic Net Sales Growth Unknown How Much was Pantry Loading vs. Consumed CSCA Organic Net Sales Growth YoY** • Strong business performance pre-COVID 30% 28% • Q1 Store brand penetration vs. national 25% brand increased 60 basis points*** 20% • Flu illness levels elev
Slide 14: E-Commerce Investment is Paying Off!
E-Commerce Investment is Paying Off! CSCA Ecommerce as a % to Net Sales 6% 5.3% 5% CSCA E-Commerce Net Sales Growth 1Q20 vs. 3.8% 4% 3.4% 1Q19: 2.9% 3.0% 3% 2% +112% 1% 0% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 14
Slide 15: CSC International Net Sales Grew 14% YoY, Excluding Exited Businesses and Currency
CSC International Net Sales Grew 14% YoY, Excluding Exited Businesses and Currency CSCI Net Sales Growth YoY, Excluding Exited Businesses & Currency $383M +14% $347M Q1 2019 Q1 2020 *See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts 15 **Exited businesses and
Slide 16: Generic Albuterol Sulfate Launch Drove Rx Net Sales
Generic Albuterol Sulfate Launch Drove Rx Net Sales +6% $258M $242M $44M $214M 2019 2020 Base Rx Sales Generic Albuterol Sulfate 16
Slide 17: 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 17
Slide 18: Ray Silcock, EVP & CFO
Ray Silcock, EVP & CFO 18
Slide 19: Consolidated Summary – Q1 2020
Consolidated Summary – Q1 2020 Restructuring, Consolidated Impairment Interest, Other, and Diluted 3 Months Ending March 28, 2020 Net Gross R&D Expense DSG&A Charges, and Operating Change in Income Tax Net Earnings per (in millions, except per share amounts) Sales Profit Expense Other Income Expense
Slide 20: Worldwide Consumer Summary – Q1 2020
Worldwide Consumer Summary – Q1 2020 Strong Net Sales; Adj. GM Impacted by Purposeful Store Brand Expansion; Adj. OM Leverage & Project Momentum Savings % Change Ex. Worldwide Consumer Summary Q1 Q1 $ % Exited Businesses ($ in millions) 2020 2019 Change Change & Currency Net Sales $1.1B $933M $151M
Slide 21: Rx Summary – Q1 2020
Rx Summary – Q1 2020 Strong Net Sales with Generic Albuterol Sulfate Launch; Margins Impacted by Pricing, including Testosterone 1.62% Rx Summary Q1 Q1 $ % ($ in millions) 2020 2019 Change Change Net Sales $258M $242M $16M 6% Adjusted Gross Profit $109M $118M ($9M) (7%) Adjusted Gross Margin % 42.3%
Slide 22: Balance Sheet and Liquidity Remain Strong
Balance Sheet and Liquidity Remain Strong Strong Performance Before and During Global Pandemic Select Balance Sheet & Liquidity Measures 3/28/2020 12/31/2019 Cash & Cash Equivalents $510M $354M Total Debt $3.5B $3.4B Quarterly Cash Conversion as % of Adj. Net 110% 62% Income 22 *See attached Appendi
Slide 23: 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 23
Slide 24: Table I: Reconciliation of Non-GAAP Measures
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Three Months Ended March 28, 2020 Restructuring , Impairment Interest, Charges, and Other, and Diluted Other Change in Income Net Earnings Ne
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) Three Months Ended March 30, 2019 Restructuring , Impairment Interest, Charges, and Other, and Diluted Other Change in Income Earnings Net
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 December 31, 2019 Restructuring , Impairment Interest, Charges, and Other, and Income Other Operating Change in Tax Net
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) Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Worldwide Consumer* Sales Profit Expense Expense Inc
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) Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Operatin Operatin Net Gross R&D DSG&A g Net Gross R&D DSG&A g Consumer Self-Care Americas Sales Prof
Slide 29: 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) Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Prescription Pharmaceuticals Sales Profi
Slide 30: 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 Constant March 28, March 30, Total FX Currency 2020 2019 Change Change Change Net sales Consolidated $ 1,341.0 $ 1,174.5 14.2% 1.1% 15.3% CSCA
Slide 31: 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) Two Months Ended Constant February 29, March 2, Total FX Currency 2020 2019 Change Change Change Net sales CSCA $ 429.4 $ 374.9 14.5% —% 14.5% Less: a
Slide 32: 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 March 28, March 30, Total 2020 2019 Change Consolidated adjusted EPS $ 1.14 $ 1.07 6.5% Adjusted gross profit Worldwide Consumer $ 416.3 $ 378.6 10.0% CSCA $ 219.8
Slide 33: Table IV (Continued): Adjusted Profit Measure Growth
TABLE IV (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED PROFIT MEASURE GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended Constant March 28, March 30, Total FX Currency 2020 2019 Change Change Change Adjusted gross profit Worldwide Consumer CSCA $ 2
Slide 34: Table V: Reconciliation of Non-GAAP Measures
TABLE V PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions) (unaudited) Three Months Ended March 28, 2020 Operating cash flow $ 171.8 Adjusted net income $ 156.7 Cash conversion ratio 110% Three Months Ended December 31, 2019 Operating cash flow $ 89.5 Adjusted net income $ 144.8 C
Slide 35: Table VI: Net Sales by Product Category
TABLE VI PERRIGO COMPANY PLC NET SALES BY PRODUCT CATEGORY (in millions) (unaudited) Three Months Ended March 28, March 30, 2020 2019 CSCA(1) Upper respiratory $ 154.6 $ 132.8 Pain and sleep-aids 120.4 91.3 Digestive health 106.9 102.3 Nutrition 102.2 99.6 Healthy lifestyle 85.8 76.0 Oral self-care