Herbalife Ltd. · NYSE:HLF
Herbalife — Q3 2024 Earnings Presentation
27 slides from Herbalife's earnings presentation, Oct 30, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation October 30, 2024
Slide 2: Forward-Looking Statements and Non-GAAP Measures
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
Q3 2024 Strategic Update Michael Johnson Chairman & CEO Q3 2024 Earnings | 3
Slide 4: CEO Highlights
CEO Highlights • Q3 2024 net sales of $1.2B in line with expectations o Net sales nearly flat YoY on constant currency basis1 • Q3 adjusted EBITDA2 of $167M exceeds guidance, adjusted EBITDA2 margin 13.4%, up 70 bps YoY o Raised FY 2024 adjusted EBITDA2 expectations • Strong cash generation, Q3 net
Slide 5: Recent Product Launches – EMEA
Recent Product Launches – EMEA Herbalife Gels Chewable gels with natural colors and flavors for children and adults; gluten-free and sugar-free Herbalife24 NutrientVita Kids MindVita Kids ViewVita CoQ10Vita Prolong Energy Gel Formulated with 12 Vitamins Includes Omega-3 Fatty Enriched with Lutein an
Slide 6: Product Packaging Redesign – EMEA
Product Packaging Redesign – EMEA Herbalife24 Significant Plastics Reduction Rebuild Strength • New modern packaging design and pouch format • Next phase of sustainability strategy to move from canisters to pouches • Reduces plastics use by 80% vs canister • Reduces overall carbon footprint 100 • Re
Slide 7: Business Update
Q3 2024 Business Update Stephan Gratziani President Q3 2024 Earnings | 7
Slide 8: New Distributors and Active Non-Sales Leaders Growth
New Distributors and Active Non-Sales Leaders Growth New Distributor Growth by Region Recruiting Activity by Marketing Plan Level2 % = YoY change Q3 2024 YTD 2024 % = YoY change Q3 2024 YTD 2024 North America +7% +13% President’s Team +49% +40% Sales Leader Millionaire Team +49% +34% Latin America +
Slide 9: Financial Update
Q3 2024 Financial Update John DeSimone CFO Q3 2024 Earnings | 9
Slide 10: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights Net Sales Adjusted EBITDA1 Capital Expenditures $1.2B (3.2)% $167M +2.0% $27M vs Q3 2023 vs Q3 2023 Adjusted EBITDA1 Margin 290 bps of FX Headwinds vs Q3 2023 13.4% ~$3M Capitalized SaaS Implementation Costs (0.3)% YoY at Constant Currency2 +70 bps vs Q3 2023 • Gross pro
Slide 11: Net Sales Bridge
Net Sales Bridge $ million (3.2)% (0.3)% (2.9)% 1,281.3 61.7 2.2 2.0 1,277.7 1,240.3 (37.4) (69.5) Q3 2023 Q3 2024 Q3 2024 Reported Volume Pricing Country Mix Other Local Currency FX Reported Net Sales Net Sales1 Net Sales (1) Non-GAAP Measure. Refer to Appendix for discussion of why we believe adju
Slide 12: Regional Net Sales
Regional Net Sales Local Currency Reported Net Sales Net Sales1 Q3 2024 Q3 2023 YoY % Change YoY % Change $ million North America 260.4 277.8 (6)% (6)% Latin America 207.1 212.0 (2)% +9% EMEA 261.9 261.0 +0% +2% Asia Pacific 436.1 441.0 (1)% +1% China 74.8 89.5 (16)% (17)% Worldwide 1,240.3 1,281.3
Slide 13: Adjusted EBITDA Bridge
Adjusted EBITDA1 Bridge $ million % = Adjusted EBITDA1 margin +2.0% 10.3 37.0 13.8 5.0 163.3 166.5 (5.2) (16.1) (5.4) (13.3) (14.0) (8.9) (7.2) Event Timing 12.7% 13.4% Input Employee Technology China Gov’t Q3 2023 Volume Pricing Sales Mix Salaries Other FX Q3 2024 Costs Bonus Costs Grant Income (1)
Slide 14: Capital Structure
Capital Structure • Repaid ~$85M of debt Debt Maturities • ~$400M revolving credit facility fully undrawn as of Sep 30; as of Sep 30 ‘242 ~$355M available for borrowing1 $ million 2025 7.875% Sr. Notes 310 • $403M cash on hand as of Sep 30 2028 Convertible Notes 600 2029 12.25% Sr. Notes • Reduced t
Slide 15: Outlook
Outlook Fourth Quarter Full-Year 2024 Guidance 2024 Guidance 2024 Guidance 2023 Results 2023 Results $ million REVISED (as of Jul 31 ‘24) Narrowed Net sales (3.0)% to +1.0% YoY 1,215.0 (2.0)% to (1.0)% YoY Range (3.5)% to +1.5% YoY 5,062.4 Adjusted EBITDA1 105 – 135 108.8 590 – 620 Raised 560 – 600
Slide 16: Appendix
Appendix Q3 2024 Earnings | 16
Slide 17: Supplemental Information
Supplemental Information Non-GAAP Financial Measures (unaudited) Adjusted SG&A, Adjusted EBITDA, Credit Agreement EBITDA, Adjusted Net Income and Adjusted Diluted EPS In addition to its reported results calculated in accordance with U.S. GAAP, the Company has included in this presentation adjusted S
Slide 18: YTD 2024 Financial Highlights
YTD 2024 Financial Highlights Net Sales Adjusted EBITDA1 Capital Expenditures $3.8B (1.6)% $485M +5.0% $96M vs YTD 2023 vs YTD 2023 Adjusted EBITDA1 Margin +0.8% YoY at Constant Currency2 12.8% ~$13M Capitalized SaaS Implementation Costs +80 bps vs YTD 2023 • Gross profit margin of 77.9%, up 140 bps
Slide 19: YTD Net Sales Bridge
YTD Net Sales Bridge $ million (1.6)% +0.8% (2.4)% 3,847.4 222.0 8.6 3,876.6 3,785.7 (8.2) (90.9) (193.2) YTD 2023 YTD 2024 YTD 2024 Reported Volume Pricing Country Mix Other Local Currency FX Reported Net Sales Net Sales1 Net Sales (1) Non-GAAP Measure. Refer to Supplemental Information included he
Slide 20: YTD Regional Net Sales
YTD Regional Net Sales Local Currency Reported Net Sales Net Sales1 YTD 2024 YTD 2023 YoY % Change YoY % Change $ million North America 809.4 878.6 (8)% (8)% Latin America 633.0 624.5 +1% +5% EMEA 827.6 818.7 +1% +4% Asia Pacific 1,284.0 1,280.4 +0% +3% China 231.7 245.2 (6)% (3)% Worldwide 3,785.7
Slide 21: YTD Adjusted EBITDA Bridge
YTD Adjusted EBITDA1 Bridge $ million % = Adjusted EBITDA1 margin +5.0% 133.2 18.7 12.9 461.8 484.8 (10.2) (6.3) (49.5) (18.3) (5.1) (29.2) (23.2) 12.0% 12.8% Input Employee Technology China Gov’t YTD 2023 Volume Pricing Sales Mix Salaries Other FX YTD 2024 Costs Bonus Costs Grant Income (1) Non-GAA
Slide 22: Reconciliation of SG&A to Adjusted SG&A
Reconciliation of SG&A to Adjusted SG&A $ million Q3 2024 Q3 2023 YTD 2024 YTD 2023 Net sales 1,240.3 1,281.3 3,785.7 3,847.4 Selling, general, and administrative expenses (SG&A) 444.0 455.3 1,438.5 1,391.7 SG&A as a percentage of net sales 35.8% 35.5% 38.0% 36.2% Expenses related to Restructuring P
Slide 23: Reconciliation of Net Income to Adjusted EBITDA and Total Leverage Ratio
Reconciliation of Net Income to Adjusted EBITDA to Credit Agreement EBITDA and Total Leverage Ratio Quarters TTM Year to Date Full Year $ million Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Sep 2024 2024 2023 2023 Net sales 1,281.3 1,215.0 1,264.3 1,281.1 1,240.3 5,000.7 3,785.7 3,847.4 5,062.4 Net inco
Slide 24: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income $ million Q3 2024 Q3 2023 YTD 2024 YTD 2023 Net income 47.4 42.8 76.4 132.0 Expenses related to Restructuring Program1 2.7 ― 68.2 ― Expenses related to Transformation Program1 ― 4.6 9.4 42.0 Digital technology program costs1 5.1 12.1 22.1 22.6 Gain
Slide 25: Reconciliation of Diluted EPS to Adjusted Diluted EPS
Reconciliation of Diluted EPS to Adjusted Diluted EPS $ per share Q3 2024 Q3 2023 YTD 2024 YTD 2023 Diluted earnings per share 0.46 0.43 0.75 1.32 Expenses related to Restructuring Program1 0.03 ― 0.68 ― Expenses related to Transformation Program1 ― 0.05 0.10 0.42 Digital technology program costs1 0
Slide 26: FX Translation Impact
FX Translation Impact $ million, except EPS Net Sales EBITDA Net Income Diluted EPS Q3 2024 as reported 1,240.3 157.7 47.4 0.46 Non-GAAP adjustments1 ― 8.8 10.6 0.11 Q3 2024 adjusted 1,240.3 166.5 58.0 0.57 FX rate adjustments2 37.4 14.0 10.8 0.10 Q3 2024 FX Adjusted 1,277.7 180.5 68.8 0.67 YTD 2024
Slide 27: Herbalife
Herbalife”