Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Valeant Pharmaceuticals International — Q1 2018 Earnings Presentation
56 slides from Bausch Health Companies's earnings presentation, May 2018
Slide 1: Valeant 1Q18 Financial Results
VALEANT Pharmaceuticals International, Inc. Y Financial X Results y
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking information and statements, within the are cautioned that these statements may not be appropriate for other purposes. meaning of applicable securities laws (collectively, “forward-looking statements”), These forward-looking statem
Slide 3: Non-GAAP Information
Non-GAAP Information To supplement the financial measures prepared in accordance with U.S. generally The reconciliations of these historic non-GAAP measures to the most directly accepted accounting principles (GAAP), the Company uses certain non-GAAP comparable financial measures calculated and pres
Slide 4: Opening Remarks & 1Q18 Progress Highlights
Opening Remarks & 1. 1Q18 Progress Highlights 2. 1Q18 Financial Results 3. Updated FY 2018 Guidance 4. Segment Highlights & 2018 Catalysts 3
Slide 5: Tangible Progress Toward Transformation
Tangible Progress Toward Transformation O U R M I S S I O N : Improve people’s lives with our health care products. STABILIZE TURNAROUND TRANSFORM 2016 2017-2018 2018+ Resolving legacy issues and de-risking the balance sheet Investing in core franchises with attractive growth Launching new produc
Slide 6: Highlights During 1Q18 Through Today
Highlights During 1Q18 Through Today Executed on Core Businesses • First quarter of overall organic revenue growth 1,2 since 3Q15 for the Company • ~76% of total revenue generated from B+L/International segment and Salix business, which saw 10% organic revenue growth1,2 during 1Q18 compared to 1Q17
Slide 7: Resolved Legal Issues
Resolved Legal Issues Achieved dismissals or other positive outcomes in resolving and managing litigation and investigations in approximately 20 matters since Jan. 1, 2018 UCERIS® arbitration was decided in favor of Valeant; and the tribunal ordered Cosmo to pay the entirety of Valeant’s legal costs
Slide 8: Performance: Key 1Q18 Financial Highlights
Performance: Key 1Q18 Financial Highlights 1Q18 Revenue 1Q18 EBITA (% Organic Growth Y/Y) 1,2,3 (non-GAAP) 2 ~76% of Valeant’s Total Revenue is generated from the Bausch + Bausch + $1,103M $297M Lomb/International Segment and Lomb/International 2% the Salix Business, which saw 10% organic revenue gr
Slide 9: 1Q Financial Results
1Q 18 Financial Results Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.18 3.31.17 Reported Currency 1,2 Change1,3 Revenues $1,995M $2,109M (5%) (9%) 2% GAAP NI ($2,693M) $628M Adj. NI (non-GAAP) 1 $312M $273M 14% 11% ~353 Million Diluted Shares Outstanding GAAP EPS ($7.68) $1.79 GA
Slide 10: 1Q Segment Results Bausch + Lomb/International
1Q 18 Segment Results Bausch + Lomb/International Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.18 3.31.17 Reported Currency 1,3 Change 1,4 Global Vision Care Revenue Global Surgical Revenue 5 $195M $171M $170M $154M 15% 11% 9% 3% 9% 4% +2% Bausch + Lomb/ Global Consumer Revenue $
Slide 11: 1Q Segment Results Branded Rx
1Q 18 Segment Results Branded Rx Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.18 3.31.17 Reported Currency 1,3 Change 1,4 Salix Revenue Ortho Dermatologics Revenue 5 $422M $112M $302M $194M 40% (42%) 40% (42%) 40% (42%) +40% Salix Organic Revenue Dentistry Revenue $30M $28M 7% 7%
Slide 12: 1Q Segment Results U.S. Diversified Products
1Q 18 Segment Results U.S. Diversified Products Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.18 3.31.17 Reported Currency 1,3 Change 1,4 Neuro & Other Revenue $209M $243M (14%) (14%) (14%) Generics Revenue $90M $85M 6% 6% 6% Other Revenue 5,6 $0M $18M Total Segment Revenue 2 $299
Slide 13: 1Q Balance Sheet Summary
1Q 18 Balance Sheet Summary As of As of As of As of As of 3.31.18 12.31.17 9.30.17 6.30.17 3.31.17 Cash, cash equivalents, $909M $797M $1,969M $2,025M $1,210M and restricted cash Revolving $250M $250M $425M $525M $525M credit drawn Senior Secured $8,565M $8,771M $9,475M $10,385M $10,605M Debt2 Senio
Slide 14: Reduced Debt and Extended Maturities
Reduced Debt and Extended Maturities Long-Term Debt Maturity Profile as of May 8, 20181,2 2024 2018 2019 2020 2021 2022 2023 Total and beyond Debt Maturities $0 $0 $1,087M $3,103M $5,115M $6,098M $10,012M $25,415M Mandatory $0 $0 $0 $0 $0 $0 $0 $0 Amortization Total $0 $0 $1,087M $3,103M $5,115M $6,
Slide 15: 1Q Cash Flow Summary
1Q 18 Cash Flow Summary Three Months Ended Three Months Ended 3.31.18 3.31.17 Net income (loss) 1 ($2,691M) $629M Generated $438 million in cash flow from operations in Net cash provided by operating $438M $954M 1Q18, which was above activities expectations due to reductions in working capital and d
Slide 16: Raised Full-Year 2018 Revenue and Adjusted EBITDA Guidance
Raised Full-Year 2018 Revenue and Adjusted EBITDA (non-GAAP)1 Guidance Prior Guidance Current Guidance (February 2018) (May 2018) Total Revenues $8.10B - $8.30B $8.15B - $8.35B Adjusted EBITDA (non-GAAP) 1 $3.05B - $3.20B $3.15B - $3.30B Prior Guidance Current Guidance Key Assumptions (February 2018
Slide 17: Raised Full-Year 2018 Guidance Bridge
Raised Full-Year 2018 Revenue and Adjusted EBITDA (non-GAAP)1 Guidance Bridge 2018 Feb. LOE Date LOE Performance APRISO®, UCERIS® Base 2018 May Currency Impact (excluding APRISO®, Guidance Changes UCERIS®, ZEGERID®) and ZEGERID® Performance Guidance Revenue Revenue Approx. $8.35B $8.30B Approx. +$40
Slide 18: Bausch + Lomb/International Update
Bausch + Lomb/International Update6 1Q18 4Q17 3Q17 2Q17 1Q17 Revenues Revenues Revenues Revenues Revenues $1,103M $1,203M $1,235M $1,223M $1,134M Key Highlights • 2% organic revenue growth 1,2 versus 1Q17, driven by strong growth in Global Vision Care and Global Surgical • 15% organic revenue growth
Slide 19: LUMIFY - Launched
LUMIFY™ - Launched Example of Shelf Set Just launched LUMIFY™ (brimonidine tartrate ophthalmic solution 0.025%), the first and only over-the-counter (“OTC”) eye drop with low-dose brimonidine tartrate for the treatment of eye redness In clinical trials, LUMIFY™ eye drops demonstrated a strong sa
Slide 20: Salix Update
Salix1 Update 1Q18 4Q17 3Q17 2Q17 1Q17 Revenues Revenues Revenues Revenues Revenues $422M $425M $452M $387M $302M Key Financial Highlights • 40% revenue growth in 1Q18 compared to 1Q17, driven $1,566M $1,499M by improved operational effectiveness and investment in sales force $1,205M $566M $587M (37
Slide 21: XIFAXAN Update
XIFAXAN1 Update XIFAXAN® TRx +7% in First Thirteen Weeks of 2018 vs. First Achieved Blockbuster status 18,000 Thirteen Weeks of 20172 with >$1B in sales during 1Q18 17,383 17,000 Highlights 16,092 7% TRx unit volume growth in 1Q18 compared to 1Q17 16,000 Labor Day Key Drivers Christmas 15,000 Pr
Slide 22: Ortho Dermatologics Update
Ortho Dermatologics1,4 Update 1Q18 4Q17 3Q17 2Q17 1Q17 Revenues Revenues Revenues Revenues Revenues $112M $136M $151M $132M $194M Expanded SILIQ™ Launch Launched RETIN-A MICRO® 0.06% • Expanded launch for SILIQ™ following • Sales tracking above Company expectations successful REMS3 certification RET
Slide 23: Potential to Double Derm
Potential to Double Derm 1,4 Base Derm Performance SILIQ™ RETIN-A MICRO® 0.06% DUOBRII2,3 (IDP-118) for psoriasis ALTRENO2,3 (IDP-121) for acne BRYHALI2,3 (IDP-122) for psoriasis IDP-123 (acne)3 IDP-120 (acne)3 IDP-124 (atopic dermatitis)3 IDP-126 (acne)3 2017 2018 2019 2020 2021 2022 • Advancing to
Slide 24: Revived Businesses Drive Growth
Revived Businesses Drive Growth Global Solta Neuro & Other • 18% organic revenue growth 1,2 in 1Q18 versus 1Q17 • Brand refocus for WELLBUTRIN XL ® • Global expansion into Asia Pacific, Europe, and Sales team expansion and initiation of Telesales Middle East providing strong performance for the pr
Slide 25: Significant Seven New Product Approvals
Significant Seven New Product Approvals Expected to Drive Long-Term Growth1 1 1,2 SiHy Daily1 VYZULTA™ RELISTOR® (latanoprostene bunod (methylnatrexone bromide) ophthalmic solution) Launched September 2016 Launched December 2017 PDUFA Date: June 18, 2018 Expected Launch Date: 4Q183 >$1B <$100M expec
Slide 26: Management Commitments and Expected Targets
Management Commitments and Expected Targets Commitment Action Plan and Expected Targets Ortho Dermatologics Double Revenue Over the Next 5 Years Generate Annualized Revenues of >$1B Over the Significant Seven Next 5 Years Prioritize the Use of Cash Flow to Reduce Debt Address Debt Continue t
Slide 27: Bausch Health Companies Inc.
Bausch Health Companies Inc. NYSE/TSX: BHC (beginning July 2018) 1 “Becoming Bausch Health Companies is a major step forward in our transformation, and we believe this name more accurately represents the full scope of the Company today – a leader in the development and manufacture of a wide range of
Slide 28: Appendix
Appendix
Slide 29: Key Product LOE / Divestiture 2018 Impact (Current Forecast vs. Prior Year)
Key Product LOE / Divestiture 2018 Impact (Current Forecast vs. Prior Year) Change Business Product Line with Actual or Anticipated LOE/Divested Rev/Profit LOE/Divested Rev/Profit 2017 vs 2018 Current Unit LOE/Divestiture Date1 2017 Actual 2018 Current Forecast Forecast Revenue Profit Revenue Profit
Slide 30: Key Product LOE / Divestiture 2018 Impact (Same LOE Dates)
Key Product LOE / Divestiture 2018 Impact (Current and Prior Forecast Assume Same LOE Dates) Business Product Line with Actual or Anticipated LOE/Divested Rev/Profit LOE/Divested Rev/Profit Change Unit LOE/Divestiture Date1 2018 Prior Forecast 2018 Current Forecast Prior vs Current Forecast Revenue
Slide 31: Making Progress in Innovation
Making Progress in Innovation 2018 and Late Phase Beyond3 • New XIFAXAN® formulation (new indication) • SILIQ™ – 3Q17 In Process – 4Q17 • Vitesse®2 vitreous cutter – 4Q17 • IDP-123 (Acne) Initiated Phase 3 – H2 2017 • Thermage®2 FLX System – 4Q17 • IDP-126 (Acne Combination) Initiated Phase • VYZULT
Slide 32: Divestitures and Discontinuations included in 2017 Financials
Divestitures and Discontinuations included in 2017 Financials Adjusted EBITDA Divestiture Date Closed Revenue (non-GAAP) 1 Sprout Dec. 20, 2017 ~$5M ~($30M) Obagi Nov. 9, 2017 ~$60M ~$20M iNova Sept. 29, 2017 ~$195M ~$100M Dendreon June 28, 2017 ~$165M ~$65M Skincare Brands March 3, 2017 (CeraVe, Ac
Slide 33: 1Q18 Top Products – Total Valeant
1Q18 Top 10 Products – Total Valeant1 Top 10 products/franchises by revenues, trailing five quarters Rank Product/Franchises 1Q18 4Q17 3Q17 2Q17 1Q17 1 XIFAXAN® $275M $275M $286M $233M $185M 2 SofLens® $73M $78M $83M $76M $69M 3 WELLBUTRIN® $64M $69M $63M $61M $52M 4 Ocuvite® + PreserVision® $61M $8
Slide 34: 1Q18 Top Products – B+L / International
1Q18 Top 10 Products – B+L / International Top 10 products/franchises by revenues, trailing five quarters Rank Product/Franchises 1Q18 4Q17 3Q17 2Q17 1Q17 1 SofLens® $73M $78M $83M $76M $69M 2 Ocuvite® + PreserVision® $61M $84M $73M $71M $58M 3 renu® $51M $62M $57M $55M $51M 4 LOTEMAX® $33M $33M $32
Slide 35: 1Q18 Top Products – Branded Rx
1Q18 Top 10 Products – Branded Rx Top 10 products/franchises by revenues, trailing five quarters Rank Product/Franchises 1Q18 4Q17 3Q17 2Q17 1Q17 1 XIFAXAN® $275M $275M $286M $233M $185M 2 APRISO® $38M $34M $42M $39M $29M 3 UCERIS® $37M $37M $37M $37M $29M 4 GLUMETZA® $25M $27M $46M $37M $23M 5 ARES
Slide 36: 1Q18 Top Products – U.S. Diversified Products
1Q18 Top 10 Products – U.S. Diversified Products Top 10 products/franchises by revenues, trailing five quarters Rank Product/Franchises 1Q18 4Q17 3Q17 2Q17 1Q17 1 WELLBUTRIN® $62M $67M $61M $58M $49M 2 SYPRINE® $18M $26M $18M $27M $20M 3 ISUPREL® $17M $11M $23M $33M $38M 4 CUPRIMINE® $16M $18M $20M
Slide 37: 1Q18 Other Financial Information
1Q18 Other Financial Information1 Three Months Ended Favorable (Unfavorable) Constant Mar. 31, 2018 Mar. 31, 2017 Reported Currency1,2 Cash Interest Expense1 $393M $431M 9% 9% Net Interest Expense1 $413M $471M 12% 12% Non-cash adjustments Depreciation1 $43M $39M (10%) (3%) Non-cash share-based Comp1
Slide 38: Non-GAAP Adjustments EPS Impact (1Q18)
Non-GAAP Adjustments EPS Impact (1Q18) Year to Date Ended Year to Date Ended March 31, 2018 March 31, 2017 Income Earnings Per Income Earnings Per $ in millions, except per share impact (Expense) Share Impact (Expense) Share Impact Net Income (loss) GAAP $ (2,693) $ (7.68) $ 628 $ 1.79 Acquisition-r
Slide 39: Delivering on Commitment to Simplify Operating Model and Reduce Debt
Delivering on Commitment to Simplify Operating Model and Reduce Debt Divestiture Date Closed Divestiture Date Closed Sprout Dec. 20, 2017 Euvipharm (Vietnam) Jan. 25, 2017 Obagi Nov. 9, 2017 Ruconest Dec. 7, 2016 iNova Sept. 29, 2017 Paragon Nov. 9, 2016 ~$3.8B Dendreon June 28, 2017 in total asset
Slide 40: Bausch + Lomb / Int'l Segment Trailing Five Quarters
Bausch + Lomb / Int’l Segment Trailing Five Quarters1 Bausch + Lomb / 1Q18 4Q17 3Q17 2Q17 1Q17 International Global Vision Care Revenue $195M $187M $208M $187M $170M Global Surgical Revenue3 $171M $187M $161M $175M $154M Global Consumer Revenue $330M $377M $392M $379M $375M Global Ophtho Rx Revenue
Slide 41: Branded Rx Segment Trailing Five Quarters
Branded Rx Segment Trailing Five Quarters1 Branded Rx 1Q18 4Q17 3Q17 2Q17 1Q17 Salix Revenue $422M $425M $452M $387M $302M Ortho Dermatologics Revenue3 $112M $136M $151M $132M $194M Dentistry Revenue $30M $39M $32M $35M $28M Global Solta Revenue2 $29M $34M $26M $27M $23M All Other Revenue4 $0M $2M $
Slide 42: U.S. Diversified Products Segment Trailing Five Quarters
U.S. Diversified Products Segment Trailing Five Quarters1 U.S. Diversified Products 1Q18 4Q17 3Q17 2Q17 1Q17 Neuro & Other Revenue $209M $228M $227M $248M $243M Generics Revenue $90M $94M $82M $82M $85M Other Revenue3,4,5,6 $0M $2M $14M $14M $18M Segment Revenue2 $299M $324M $323M $344M $346M Segmen
Slide 43: Selected U.S. Businesses Pipeline Inventory Trending (1Q18)
Selected U.S. Businesses Pipeline Inventory Trending (1Q18) Months on Hand Relative Change Mar. 31, As of As of Change As of As of Change Change Business Units 2018 vs Mar. 31, Dec. 31, 2016 Mar. 31, 2017 1Q17 Dec. 31, 2017 Mar. 31, 2018 1Q18 1Q18 vs 2017 1Q17 Derm 1.34 1.44 0.10 1.39 1.35 (0.04) (0
Slide 44: Financial Summary – Adjusted (non-GAAP)
Financial Summary – Adjusted (non-GAAP) Presentation Reconciliation YTD 2018 Total Gross Selling & G&A and R&D Operating Operating Profit Advertising Other Expense Expense Income Qtr 1 2018 GAAP $ 1,422 $ 451 $ 140 $ 92 $ 683 $ (2,281) Amortization of finite-lived intangibles - 743 Asset Impairments
Slide 45: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of reported Net Income (Loss) to EBITDA and Adjusted EBITDA ($M) (Quarter-to-Date) Three Months Ended March 31, 2018 2017 Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. $ (2,693) $ 628 Interest expense, net 413 471 (Benefit from) provision for income tax
Slide 46: Reconciliation of reported Growth to Organic Growth
Reconciliation of reported Growth to Organic Growth ($M) (Quarter-to-Date) Calculation of Organic Revenue Three Months Ended Three Months Ended Change in March 31, 2018 March 31, 2017 Organic Revenue Changes in Organic Organic Revenue as Exchange Revenue (Non- Revenue as Divested Revenue (Non- Repor
Slide 47: Reconciliation of reported Growth to Organic Growth
Reconciliation of reported Growth to Organic Growth ($M) (Quarter-to-Date) Calculation of Organic Three Months Ended Three Months Ended Change in March 31, 2018 March 31, 2017 Organic Changes in Organic Organic As Exchange (Non- As (Non- Reported Rates (a) GAAP) (b) Reported Divested GAAP) (b) Amoun
Slide 48: Reconciliation of TTM adjusted EBITDA
Reconciliation of TTM1 adjusted EBITDA ($M) TTM TTM TTM TTM TTM Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Net income (loss) attributable to Valeant Pharmaceuticals International, Inc. $ (917) $ 2,404 $ 1,376 $ (1,143) $ (1,407) Interest expense, net 1,770 1,828 1,848 1,859 1,873 Benefit from income taxes (
Slide 49: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Description of Non-GAAP Financial Measures Adjusted EBITDA (non-GAAP) Adjusted EBITDA (non-GAAP) To supplement the financial measures prepared in accordance Adjusted EBITDA (non-GAAP) is GAAP net income (its most Adjusted EBITDA (non-GAAP)
Slide 50: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Adjusted EBITDA reflect adjustments based on Asset Impairments: The Company has excluded the impact of Adjusted EBITDA (non-GAAP)) impairments of finite-lived and indefinite-lived intangibles assets, the following items: as well as impairm
Slide 51: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Loss on extinguishment of debt: The Company has excluded Adjusted EBITDA (non-GAAP)) loss on extinguishment of debt as this represents a cost of Finally, to the extent not already adjusted for above, Adjusted refinancing our existing debt
Slide 52: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Adjusted EBITA Adjusted Selling, A&P/Adjusted G&A/Adjusted Adjusted EBITDA (non-GAAP) SG&A Management uses these non-GAAP measures (the most directly Adjusted EBITDA (non-GAAP) comparable GAAP financial measure for which is Total GAAP Mana
Slide 53: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Adjusted Net Income (Loss) (non-GAAP) Adjusted EBITDA (non-GAAP) Historically, management has used adjusted net income (loss) (non - Adjusted EBITDA (non-GAAP) GAAP) (the most directly comparable GAAP financial measure for Adjustments whic
Slide 54: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures In addition to certain of the adjustments made to Adjusted EBITDA and Adjusted EBITDA (non-GAAP) described above (namely restructuring and integration costs, acquired in-process research and development costs, loss on extinguishment of Adj
Slide 55: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Organic Revenue / Organic Growth / Organic Change • Acquisitions, divestitures and discontinuations: In order to Adjusted EBITDA (non-GAAP) present period-over-period organic revenues (non-GAAP) on Organic growth, a non-GAAP metric, is def
Slide 56: Constant Currency Appendix
Constant Currency Appendix Description of Non-GAAP Financial Measures Constant Currency Adjusted EBITDA (non-GAAP) Changes in the relative values of non-US currencies to the US Adjusted EBITDA (non-GAAP) dollar may affect the Company’s financial results and financial Adjustments position. To assist
Valeant Pharmaceuticals International — Q1 2018 Earnings Presentation on 6ix