Kenvue Inc. · NYSE:KVUE
Kenvue — Q2 2024 Earnings Presentation
37 slides from Kenvue's earnings presentation, Aug 6, 2024
Slide 1: Welcome
Welcome a HYDRO Newtmggena* BOOST WATER CREAy
Slide 2: Second Quarter 2024 Earnings Results
Second Quarter 2024 Earnings Results
Slide 3: Introduction
Introduction Thibaut Mongon Paul Ruh Jim Giannakouros Chief Executive Chief Financial Interim Head of Officer Officer Investor Relations I kenvue
Slide 4: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements about management’s expectations of Kenvue’s future operating and financial performance, p
Slide 5: Q2 2024 Highlights
Q2 2024 Highlights — +1.5% 3 a = Organic growth’, on top of +7.7% in Q2 2023 een0 = Adjusted gross profit margin! increased 410 bps over PY quarter 57.5% > 61.6% Benadryl ALLERGY Increasing brand activation investment +v20% vs. PY vs. +~15% previously planned Non-GAAP financial measure; refer to rec
Slide 6: Kenvue in Action
Kenvue in Action S) First half results show the value of our carefully curated portfolio of iconic brands covering a full spectrum of health needs Increasing investment in consumer and healthcare professional engagement, in-store presence and prominence, and amplification of innovation S) Expect to
Slide 7: Q2 2024 Portfolio Performance
Q2 2024 Portfolio Performance Q2 2024 Q22023 Q22024 Net Net Organic Sales Sales Growth’ Total Kenvue $4.0B $4.0B +1.5% vs +7.7% PY Self Care $1.6B $1.7B (0.2)% vs +14.2% PY Highlights Transforming to unleash the full potential of our portfolio + Continued share gains despite lower category growth vs
Slide 8: Actions to Stabilize U.S. Skin Health & Beauty
Actions to Stabilize U.S. Skin Health & Beauty S) Improving in-store presence and prominence through increased investments on promotions and displays (S) Increasing detailing and sampling with dermatologists 6) Increasing media investments with a strong pivot to social media influencers © Amplifying
Slide 9: Our Progress as an Independent Company
| K€ kenvue Our Progress as an Independent Company ‘S) Inaugural Healthy Lives Mission report published S) Two new independent Directors appointed to the Board 6) First quarterly dividend increase declared as an independent company
Slide 10: Q2 2024 Financial Performance
Q2 2024 Financial Performance
Slide 11: Q2 2024 Reported Net Sales & Organic Growth
Q2 2024 Reported Net Sales & Organic Growth' +1.5% Organic Growth On Top of +7.7% in Q2 2023 (— >) 21% $4.0B OB ocx) $4. (1.8%) Q2 2023 Value Volume Foreign Q2 2024 Net Sales Realization? Exchange Net Sales N yy, ‘Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures in
Slide 12: Self Care: Continued Share Gains
Self Care: Continued Share Gains Key Highlights $1.6B Net Sales Organic Drivers * Continued share gains Reported fomtinn? despite lower category Pp (1.6)% Value Realization +1.1% growth vs. PY vs +12.2% PY vs +10.6% PY ¢ Allergy performance late Organic! ° Volume ° in Q2 offset slow start to (0.2) %
Slide 13: Skin Health & Beauty: Stabilization Plan On Track
Skin Health & Beauty: Stabilization Plan On Track Key Highlights $1.1B Net Sales Organic Drivers * Continued execution oe of our stabilization plan Reported (3.8)% Value Realization2 +1.5% vs +1.9% PY vs +6.6% PY * Q2 y/y volume trend improvement vs. Q1 y/y Organic’ 9 Volume 9 + Sun Care performance
Slide 14: Essential Health: Broad Based Growth
Essential Health: Broad Based Growth Key Highlights $1.3B Net Sales Organic Drivers * Balanced growth between en volume and value realization Reported +4.9% Value Realization’ +4.1% ; vs +0.5% PY vs +10.7% PY * Growth across all categories 7 ‘ and regions Organic’ +7.6% Volume +3.5% + Strong growth
Slide 15: Q2 2024 Adjusted Gross Profit Margin and Adjusted Operating Income Margin
Q2 2024 Adjusted Gross Profit Margin and Adjusted Operating Income Margin Performance Adjusted Gross Profit Margin’ Q2 2024 Reported Gross| Profit Margin 59.1% Q2 2023 Q2 2024 +410 bps y/y 61.6% 57.5% Adjusted Operating Income Margin’ Q2 2024 Reported Operating Income Margin 3.9% UU & -30 bps y/y 23
Slide 16: Q2 2024 Net Income and Earnings Per Share
Q2 2024 Net Income and Earnings Per Share $611M § $574M 0.03 Reported Diluted $430M $0.32 Adjusted Diluted! $58M ——EEs LUC Q2 2023 Q2 2024 Q2 2023 Q2 2024 Ne J \ J \ ‘iliations of non-GAAP financial measures included in accompanying schedules to this presentation and to the earnings release availabl
Slide 17: 2024 Guidance Summary
2024 Guidance Summary Reported Net 9 9 Sales Growth 1.0% - 3.0% Unchanged 1.0% - 3.0% Organic Growth! 2.0% - 4.0% Unchanged 2.0% - 4.0% Adjusted Operating 21% - 22% Gross margin pacing ahead of plans; Slightly below 2023 Income Margin! accelerated brand investments offsetting reported neerest $380 -
Slide 18: Thibaut Mongon, Paul Ruh, Jim Giannakouros
Thibaut Mongon Paul Ruh Jim Giannakouros Chief Executive Chief Financial Interim Head of Officer Officer Investor Relations I kenvue
Slide 19: Slide 19
Slide 20: Appendix
Appendix
Slide 21: 2023 Organic Growth Considerations
2023 Organic Growth’ Considerations Self-Care Organic Growth ® ® Higher incidences of cough, > cold and flu outside the U.S. Retailer inventory re-build, following Q4’22 demand surge 15.3% 14.2% © Delayed season and lower incidence levels 6.7% (2.0%) Skin Health OO® Retailer inventory re-build, foll
Slide 22: Organic Growth
Organic Growth Fiscal Three Months Ended June 30, 2024 vs July 2, 2023 Impact of foreign Reported Net sales change currency Organic growth@ (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ (26) (1.6) % $ (22) $ (4) (0.2) % Skin Health and Beauty (44) (3.8) 7) (27) (2
Slide 23: Organic Growth
Organic Growth Fiscal Three Months Ended July 2, 2023 vs July 3, 2022 Impact of foreign Reported Net sales change currency Organic growth@ (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 180 12.2 % $ (30) $ 210 14.2 % Skin Health and Beauty 21 1.9 (17) 38 3.4 Essent
Slide 24: Organic Growth
Organic Growth Fiscal Six Months Ended June 30, 2024 vs July 2, 2023( Impact of foreign Reported Net sales change currency Organic growth®) (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 32 10 % $ (33) $ 65 2.0 % Skin Health and Beauty (01) (4.5) (24) 7) (3.4) Esse
Slide 25: Organic Growth
Organic Growth Fiscal Six Months Ended July 2, 2023 vs July 3, 2022 Impact of foreign Reported Net sales change currency Organic growth®@ (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 355 12.1 % $ (80) $ 435 14.8 % Skin Health and Beauty 120 5.6 (52) 172 8.0 Essen
Slide 26: Total Segment Net Sales and Adjusted Operating Income
Total Segment Net Sales and Adjusted Operating Income Net Sales Net Sales Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited; Dollars in Millions) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023 Self Care 1,635 1,661 3,333 3,301 Skin Health and Beauty 1,103 1,147 2,157 2,258 Essentia
Slide 27: Non-GAAP Reconciliations (Q2 2024)
Non-GAAP Reconciliations (Q2 2024) Fiscal Three Months Ended June 30, 2024 (Unaudited; Dollars in Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA
Slide 28: Non-GAAP Reconciliations (Q2 2023)
Non-GAAP Reconciliations (Q2 2023) Fiscal Three Months Ended July 2, 2023 (Unaudited; Dollarsin Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA (n
Slide 29: Non-GAAP Reconciliations (Q2 2024)
Non-GAAP Reconciliations (Q2 2024) (Unaudited; Dollars in Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA (non-GAAP) EBITDA margin Detail of Adjus
Slide 30: Non-GAAP Reconciliations (Q2 2023)
Non-GAAP Reconciliations (Q2 2023) Fiscal Six Months Ended July 2, 2023 (Unaudited; Dollarsin Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA (non
Slide 31: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023 Effective tax rate 10.8 % 32.7 % 28.0 % 28.0 % Adjustments: Tax-effect on special item adjustments (2.9) (10.6) (3.1) (2.4) Dr. Ci:Labo® Impairment 17.3 — 1
Slide 32: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Year 2024 (Unaudited) Forecast Effective tax rate 26.5% - 27.5% Adjustments: Tax-effect on special item adjustments (1.5) 0.5 Taxes related to Deferred Markets K€ kenvue 32
Slide 33: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023 Diluted earnings per share $ 0.03 $ 0.23 $ 018 $ 0.51 Adjustments: Separation-related costs 0.04 0.06 0.08 0.1 Restructuring and operating model opt
Slide 34: Free Cash Flow
Free Cash Flow Fiscal Six Months Ended (Unaudited; Dollars in Billions) June 30, 2024 July 2, 2023 Net cash flows from operating activities $ 07 $ 1.5 Purchases of property, plant, and equipment (0.2) (0.1) K€ kenvue oA
Slide 35: 2024 Guidance Non-GAAP Reconciliations
2024 Guidance Non-GAAP Reconciliations Kenvue is not able to provide the most directly comparable GAAP measures or reconcile Adjusted diluted earnings per share, Adjusted operating income margin, or Organic growth to comparable GAAP measures on a forward-looking basis without unreasonable efforts gi
Slide 36: Research and Development
Research and Development (Unaudited; Dollars in Millions) Research & Development K€ kenvue Fiscal Three Months Ended Fiscal Six Months Ended June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023 105 $ 99 $ 205 $ 188 36
Slide 37: Kenvue
B€ kenvue