Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Q3 2022 Earnings Presentation
48 slides from Bausch Health Companies's earnings presentation, Nov 3, 2022
Slide 1: Third Quarter 2022 Earnings Call
Third Quarter 2022 Earnings Call November 3, 2022
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking information and statements, within They also include risks and uncertainties related to the challenges the the meaning of applicable securities laws (collectively, “forward-looking Company faces as a result of the closing of the i
Slide 3: Non-GAAP information
Non-GAAP information To supplement the financial measures prepared in accordance with U.S. Expense, projected Adjusted Tax Rate to projected GAAP tax rate and generally accepted accounting principles (GAAP), the Company uses certain projected organic growth (non-GAAP) to projected reported revenue g
Slide 4: Agenda
Key 1 developments 2 3Q financial results Agenda Actions taken FY 2022 3 guidance 4 and path forward 4
Slide 5: Key developments
Key developments BAUSCH:
Slide 6: Key developments
Delivered sequential sales improvement for Bausch Pharma and Solta this quarter Key Reduced debt principal by $2.5B through very successful debt developments1 exchange offer Continue to evaluate potential options to maximize value Vigorously defend our intellectual property in the Xifaxan® patent li
Slide 7: Key actions underway
Key actions underway1 Salix International • Activate patients and caregivers through • Grow key markets (Poland, Mexico, targeted commercial strategies Canada) with existing brands and new • Establish Xifaxan® as the treatment of products choice with tailored HCP2 campaigns • Expand branded generic
Slide 8: Third quarter financial results
2 Third quarter financial results 8
Slide 9: 3Q22 Revenue
Consolidated 3Q22 Revenue Revenue change vs 3Q21, in millions USD Bausch Health Bausch Pharma + Solta Bausch + Lomb Consolidated $2,046 $2,111 22% 18% 7% $1,104 48% 18% $942 64% 23% Vision Care 3Q22 3Q21 Salix International Surgical Solta Medical Diversified Products Ophthalmic Pharmaceuticals Repor
Slide 10: 3Q22 Bausch Pharma + Solta revenue
Unconsolidated 3Q22 Bausch Pharma + Solta revenue Revenue change vs 3Q21, in millions USD Salix International Solta Medical2 Diversified Products 10% 26% 21% 81% 11% 46% $544 $250 $72 $238 53% 6% 7% 26% 6% 28% 79% Xifaxan® Trulance® Console Consumable Neuro Ortho Derm EMEA Latam Canada Relistor® Oth
Slide 11: Bausch Pharma + Solta highlights by segment
Unconsolidated Bausch Pharma + Solta highlights by segment Revenue change vs 3Q21, in millions USD Salix International 3Q 2022 Revenue: $544M 3Q 2022 Revenue: $250M Reported: 3%, Organic2: 3% Reported: (8%), Organic2: 10% Xifaxan® TRx1 growth flat, with positive script growth during the Strong g
Slide 12: 3Q22 Bausch + Lomb revenue
Unconsolidated 3Q22 Bausch + Lomb revenue Revenue change vs 3Q21, in millions USD Ophthalmic Revenue Vision Care Surgical Pharmaceuticals $942 $949 27% 37% 39% $598 54% $172 $172 63% 61% 19% 3Q22 3Q21 Implantables Equipment Change 3Q22 vs 3Q21: Contact Lens Consumer Consumables/Other U.S. Internatio
Slide 13: 3Q22/YTD Revenue performance
Consolidated 3Q22/YTD Revenue performance 3Q22 3Q21 Reported Organic1 YTD22 YTD21 Reported Organic1 Salix $544M $527M 3% 3% $1,509M $1,515M 0% 0% International2 $250M $271M (8%) 10% $727M $890M (18%) 7% Solta Medical2 $72M $74M (3%) 4% $201M $219M (8%) (5%) Diversified Products2 $238M $290M (18%) (1
Slide 14: 3Q22 GAAP financial results
Consolidated 3Q22 GAAP financial results Favorable Three Months Ended (Unfavorable) 9.30.22 9.30.21 Reported Revenues $2,046M $2,111M (3%) GAAP Gross Profit $1,171M $1,173M 0% GAAP Gross Margin 57.2% 55.6% 160 bps Selling, A&P $448M $459M 2% GAAP G&A $213M $194M (10%) R&D $133M $121M (10%) GAAP Tota
Slide 15: 3Q22 Non-GAAP financial results
Consolidated 3Q22 Non-GAAP financial results Three Months Ended Favorable (Unfavorable) Constant 9.30.22 9.30.21 Change Currency1 Revenues $2,046M $2,111M (3%) 1% Adj. Gross Profit1,2 $1,462M $1,529M (4%) (2%) Adj. Gross Margin 1 71.5% 72.4% (90 bps) Selling, A&P (same as reported) $448M $459M 2% (2
Slide 16: Balance sheet summary
Consolidated Balance sheet summary 9.30.22 9.30.21 12.31.21 Cash, cash equivalents1 $497M $1,904M $2,119M Revolving Credit Drawn5 $450M $0M $285M Senior Secured Debt (principal amount)2 $13,388M $7,673M $7,958M Senior Unsecured Debt (principal amount)2 $6,186M $14,912M $14,912M Total Consolidated De
Slide 17: Long term debt maturity profile
Unconsolidated Long term debt maturity profile In millions USD As of September 30, 20221,2 $M Total 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Restricted Revolver $450 - - - - - $450 - - - - Term Loan $1,938 - - - - - $1,938 - - - - Secured Notes $6,976 - - - $1,750 - $1,500 $3,374 - $352 - U
Slide 18: Bausch Pharma + Solta debt maturity profile
Unconsolidated Bausch Pharma + Solta debt maturity profile1,2,4 As of September 30, 2022, in millions $6,000 TOTAL BAUSCH $5,059 PHARMA + SOLTA DEBT $5,000 $4,538 Total: $17.1B2 $4,000 • Restricted: $16.1B • Unrestricted: $1.0B3 $3,000 $2,834 $5.6B of existing notes exchanged; $2.5B debt reduction d
Slide 19: FY 2022 guidance
3 FY 2022 guidance 19
Slide 20: Updated 2022 guidance
Consolidated Updated 2022 guidance1,2 All ranges are approximate and in USD Prior Guidance Bausch + Lomb Updated Guidance $8.05B - $8.22B ($50M) $8.00B - $8.17B Bausch + Lomb Bausch + Lomb $3.75B - $3.80B $3.70B - $3.75B Revenue 2 Bausch Pharma + Solta Bausch Pharma + Solta $4.30B - $4.42B $4.30B -
Slide 21: Bausch Pharma + Solta full-year outlook
Unconsolidated Bausch Pharma + Solta full-year outlook3 All assumptions are approximate and in USD Prior Guidance Current Guidance Total Revenues $4.30B - $4.42B $4.30B - $4.42B Adjusted EBITDA (non-GAAP) 1 $2.28B - $2.34B $2.28B - $2.34B Key Assumptions Prior Guidance Current Guidance Adjusted Gros
Slide 22: Actions taken and path forward
4 Actions taken and path forward 22
Slide 23: 2022 Bausch Pharma + Solta priorities
2022 Bausch Pharma + Solta priorities1 Drive growth through Accelerate growth engines of Salix and International 1 operational excellence across the enterprise Maximize cash-generation of Diversified Products Drive growth in Solta Medical Intensify focus and 2 Advance our R&D pipeline with n
Slide 24: Key takeaways
Key takeaways1 Continue to drive growth, profitability and improve our balance sheet Vigorously defend our intellectual property and address patient needs with Xifaxan® Continue to evaluate potential options to maximize value for our stakeholders 1.See Slide 2 for further information on forward-look
Slide 25: Powering up our potential
BAUSCH Health Powering up our potential
Slide 26: Appendix
BAUSCH: Health Appendix Mees) ei
Slide 27: Inventory in select U.S. businesses (QTD)
Inventory in select U.S. businesses (QTD)1 Months on Hand As of As of As of As of Business Change Change June 30, September 30, June 30, September 30, Units 3Q21 3Q22 2021 2021 2022 2022 Ortho 0.98 1.25 0.27 1.19 1.18 (0.01) Dermatologics Neurology 0.99 1.02 0.03 1.08 1.14 0.06 Salix 0.81 1.00 0.19
Slide 28: Inventory in select U.S. businesses (YTD)
Inventory in select U.S. businesses (YTD)1 Months on Hand As of As of As of As of Business Change Change December 31, September 30, December 31, September 30, Units YTD 2021 YTD 2022 2020 2021 2021 2022 Ortho 0.72 1.25 0.53 1.03 1.18 0.15 Dermatologics Neurology 0.56 1.02 0.46 1.17 1.14 (0.03) Salix
Slide 29: YTD GAAP financial results
Consolidated YTD GAAP financial results Favorable Nine Months Ended (Unfavorable) 9.30.22 9.30.21 Reported Revenues $5,931M $6,238M (5%) GAAP Gross Profit $3,302M $3,202M 3% GAAP Gross Margin 55.7% 51.3% 440 bps Selling, A&P $1,356M $1,347M (1%) GAAP G&A $603M $597M (1%) R&D $387M $348M (11%) GAAP T
Slide 30: YTD Non-GAAP financial results
Consolidated YTD Non-GAAP financial results Nine Months Ended Favorable (Unfavorable) Constant 9.30.22 9.30.21 Reported Currency1 Revenues $5,931M $6,238M (5%) (2%) Adj. Gross Profit 1,2 $4,219M $4,470M (6%) (3%) Adj. Gross Margin 1 71.1% 71.7% (60 bps) Selling, A&P (same as reported) $1,356M $1,347
Slide 31: Segment Profit
Unconsolidated Segment Profit1 Solta Diversified 3Q 2022 Salix International Total Medical Products Segment Revenue $544M $250M $72M $238M $1,104M Segment Profit1 $391M $85M $33M $151M $660M Solta Diversified 3Q 2021 Salix International Total Medical Products Segment Revenue $527M $271M $74M $290M $
Slide 32: 3Q22 Other financial information
3Q22 Other financial information In millions USD unless otherwise indicated Three Months Ended Favorable (Unfavorable) September 30, September 30, Constant Reported 2022 2021 Currency1 Cash Interest Expense $374M $333M (12%) (12%) Net Interest Expense $382M $349M (9%) (9%) Non-cash adjustments Depre
Slide 33: YTD Other financial information
YTD Other financial information In millions USD unless otherwise indicated Nine Months Ended Favorable (Unfavorable) September 30, September 30, Constant Reported 2022 2021 Currency1 Cash Interest Expense $1,118M $1,040M (8%) (8%) Net Interest Expense $1,149M $1,077M (7%) (7%) Non-cash adjustments D
Slide 34: 3Q22 Non-GAAP adjustments EPS impact
3Q22 Non-GAAP adjustments EPS impact In millions USD unless otherwise indicated Three Months Ended September 30, 2022 September 30, 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) share Impact Net income (loss) $403 $1.11 $191 $0.52 Non-GAAP adjustments:1 Amortization o
Slide 35: YTD Non-GAAP adjustments EPS impact
YTD Non-GAAP adjustments EPS impact In millions USD unless otherwise indicated Nine Months Ended September 30, 2022 September 30, 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) share Impact Net income (loss) $198 $0.54 ($1,009) ($2.81) Non-GAAP adjustments:1 Amortizati
Slide 36: Q3 Reconciliation of reported operating income to adjusted EBITA
Q3 Reconciliation of reported operating income to adjusted EBITA (non-GAAP)1 In millions USD Q3 2022 Q3 2021 Gross Gross Selling & G&A and R&D Operating Operating Gross Gross Selling and G&A and R&D Operating Operating Profit Margin Advertising Other Expense Expense Income Profit Margin Advertising
Slide 37: YTD Reconciliation of reported operating income to adjusted EBITA
YTD Reconciliation of reported operating income to adjusted EBITA (non-GAAP)1 In millions USD September YTD 2022 September YTD 2021 Gross Gross Selling & G&A and R&D Operating Operating Gross Gross Selling and G&A and R&D Operating Operating Profit Margin Advertising Other Expense Expense Income Pro
Slide 38: Q3 & YTD Reconciliation of net income to EBITDA and adjusted EBITDA
Q3 & YTD Reconciliation of reported net income (loss) to EBITDA1 and adjusted EBITDA1 In millions USD Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Net income (loss) attributable to Bausch Health Companies Inc. $403 $191 $198 ($1,009) Interest expense, net 382
Slide 39: 3Q22 reconciliation of reported revenue to organic revenue
3Q22 reconciliation of reported revenue to organic revenue1,2 and organic revenue growth1,3 For Three Months Ended Change in Change in Reported Organic September 30, 2022 September 30, 2021 Revenue Revenue1 Organic Organic Revenue Changes in Revenue Revenue Divestitures Revenue as Exchange (Non- as
Slide 40: YTD reconciliation of reported revenue to organic revenue
YTD reconciliation of reported revenue to organic revenue1,2 and organic revenue growth1,3 For Nine Months Ended Change in Change in Reported Organic September 30, 2022 September 30, 2021 Revenue Revenue1 Organic Organic Revenue Changes in Revenue Revenue Divestitures Revenue as Exchange (Non- as an
Slide 41: Reconciliation of operating cash flow to adj. cash flows from operations
Reconciliation of reported cash provided by operating activities to adj. cash flows from operations (non-GAAP)1 In millions USD Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Cash (used in) provided by operating activities ($1,263) $564 ($1,203) $1,402 Payments
Slide 42: Trailing twelve months adjusted EBITDA
Trailing twelve months adjusted EBITDA1 In millions USD Trailing Twelve Months Ended Sep-22 Jun-22 Mar-22 Dec-21 Sep-21 Net income (loss) $270 $139 $ (396) $(937) $(1,161) Interest expense, net 1,491 1,458 1,413 1,419 1,454 Benefit from income taxes (21) (30) (119) (87) (278) Depreciation and amorti
Slide 43: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Restructuring and integration costs: The Company has incurred restructuring costs as it To supplement the financial measures prepared in accordance with U.S. GAAP, the Company implemented certain strategies, which involved, among other thi
Slide 44: Non-GAAP Appendix
Non-GAAP Appendix Acquisition-related costs and adjustments excluding amortization of intangible assets: matters, and net (gain) loss on sales of assets. The Company has also excluded expenses The Company has excluded the impact of acquisition-related contingent consideration non- associated with in
Slide 45: Non-GAAP Appendix
Non-GAAP Appendix Adjusted Net Income and Adjusted Net Income Attributable to Bausch Health Organic Growth/Change and Organic Revenue Adjusted net income (loss) (non-GAAP) is Net Income (its most directly comparable GAAP Organic revenue and organic revenue change are non-GAAP measures. Non-GAAP meas
Slide 46: Non-GAAP Appendix
Non-GAAP Appendix Acquisitions, divestitures and discontinuations: In order to present period-over-period Adjusted Gross Profit/Adjusted Segment Gross Profit and Adjusted organic revenue (non-GAAP) growth/change on a comparable basis, revenues associated with Gross Margin/Adjusted Segment Gross Marg
Slide 47: Non-GAAP Appendix
Non-GAAP Appendix Adjusted SG&A Expenses and Adjusted G&A Expenses Adjusted SG&A expenses (non-GAAP) represents selling, general and administrative expenses The Company believes that Total Adjusted Operating Expenses (non-GAAP) is useful to investors as (“SG&A expenses”) (its most directly comparabl
Slide 48: Non-GAAP Appendix
Non-GAAP Appendix Constant Currency Changes in the relative values of non-U.S. currencies to the U.S. dollar may affect the Company’s financial results and financial position. To assist investors in evaluating the Company’s performance, we have adjusted for foreign currency effects. Constant currenc
Bausch Health Companies — Q3 2022 Earnings Presentation on 6ix