Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Q1 2019 Earnings Presentation
61 slides from Bausch Health Companies's earnings presentation, May 6, 2019
Slide 1: Financial Results
Financial Results BAUSCH: Health ; — :
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking information and statements, within the meaning of Securities Administrators, which risks and uncertainties are incorporated herein by reference. applicable securities laws (collectively, “forward-looking statements”), including, b
Slide 3: Non-GAAP Information
Non-GAAP Information To supplement the financial measures prepared in accordance with U.S. generally GAAP) to projected GAAP net income (loss), due to the inherent difficulty in forecasting accepted accounting principles (GAAP), the Company uses certain non-GAAP financial and quantifying certain amo
Slide 4: Today's Topics
Today’s 1 Opening Remarks & 1Q19 Highlights Topics 2 1Q19 Financial Results 3 FY 2019 Guidance Segment Highlights 4 & 2019 Catalysts 3
Slide 5: Pivoting to Offense
Pivoting to Offense Highest Quarter of Organic Growth1,2 for Total Company Since 3Q15 Core Business Execution New Product Approvals and Launches • 5% total Company organic revenue growth1,2 versus • DUOBRII™ (FDA Approved; Launch Expected June 2019) 1Q18; Highest quarter of total Company organic • B
Slide 6: 1Q Highlights
1Q 19 Highlights 1Q19 Revenue 1Q19 EBITA (% Organic Change (non-GAAP) 2 Y/Y) 1,2,3 Bausch + Lomb $1,118M $319M ~77% /International 8% of Bausch Health’s total revenue is generated from the Bausch + Lomb/International and the Salix segments, which saw combined 7% organic revenue growth 1,2 $445M Sali
Slide 7: Bausch Health: Unique Health Care Solution
Bausch Health: Unique Health Care Solution ~60% of Bausch Health’s revenue is not Durable Revenue Flow exposed to U.S. branded prescription pricing • ~77% of total revenue is generated from the Bausch + Lomb/International and the Salix Medical devices, OTC, segments, which saw combined 7% organic pr
Slide 8: 1Q Financial Results
1Q 19 Financial Results Three Months Ended Favorable (Unfavorable) Constant Organic 3.31.19 3.31.18 Reported Currency 1,2 Change1,3 Revenues $2,016M $1,995M 1% 4% 5% GAAP Net Loss ($52M) ($2,581M) Adj. Net Income (non-GAAP) 1 $358M $312M 15% 29% Diluted Shares Outstanding 356.2M 353.2M GAAP EPS ($0.
Slide 9: 1Q Financial Results: Bausch + Lomb/International
1Q 19 Financial Results4 Bausch + Lomb/International Three Months Ended Favorable (Unfavorable) 3.31.19 3.31.18 Reported Constant Currency1,2 Organic Change1,3 +8% Global Vision Care Revenue $203M $195M 4% 9% 9% Bausch + Lomb/International segment organic revenue Global Surgical Revenue $167M $171M
Slide 10: 1Q Financial Results: Salix
1Q 19 Financial Results4 Salix Three Months Ended Favorable (Unfavorable) 3.31.19 3.31.18 Reported Constant Currency1,2 Organic Change1,3 +5% Salix segment organic Salix Revenue $445M $422M 5% 5% 5% revenue growth 1,3 versus Total Segment Revenue $445M $422M 5% 5% 5% 1Q18, despite the UCERIS ® Adj.
Slide 11: 1Q Financial Results: Ortho Dermatologics
1Q 19 Financial Results4 Ortho Dermatologics Three Months Ended Favorable (Unfavorable) 3.31.19 3.31.18 Reported Constant Currency1,2 Organic Change1,3 +34% Ortho Dermatologics Revenue 5 $100M $111M (10%) (10%) (10%) Global Solta organic revenue growth 1,3 versus 1Q18, Global Solta Revenue $38M $29M
Slide 12: 1Q Financial Results: Diversified Products
1Q 19 Financial Results4 Diversified Products Three Months Ended Favorable (Unfavorable) 3.31.19 3.31.18 Reported Constant Currency1,2 Organic Change1,3 +16% Generics organic revenue Neuro & Other Revenue $186M $209M (11%) (11%) (11%) growth 1,3 versus 1Q18 Generics Revenue 5 $104M $90M 16% 16% 16%
Slide 13: 1Q Balance Sheet Summary
1Q 19 Balance Sheet Summary As of As of As of As of As of 3.31.19 12.31.18 9.30.18 6.30.18 3.31.18 Cash, cash equivalents and $784M $723M $973M $838M $909M restricted cash Revolving credit drawn $0M $75M $75M $325M $250M Senior Secured Debt2 $11,147M $10,950M $9,526M $9,890M $8,565M Senior Unsecured
Slide 14: 1Q Cash Flow Summary
1Q 19 Cash Flow Summary Three Months Three Months Ended 3.31.19 Ended 3.31.18 Net loss 1 ($48M) ($2,579M) $413M of cash generated from Net cash provided by operating operations during $413M $438M activities 1Q19, in line with company expectations Net cash used in investing activities ($203M) ($48M)
Slide 15: Full-Year 2019 Revenue and Adjusted EBITDA Guidance
Full-Year 2019 Revenue and Adjusted EBITDA (non-GAAP)1 Guidance3,4 Prior Guidance Current Guidance (February 2019) (May 2019) Total Revenues $8.30B - $8.50B $8.35B - $8.55B Adjusted EBITDA (non-GAAP) 1 $3.35B - $3.50B $3.40B - $3.55B Raised full-year 2019 Prior Guidance Current Guidance Key Assumpti
Slide 16: Raised Full-Year 2019 Guidance Bridge
Raised Full-Year 2019 Revenue and Adjusted EBITDA (non-GAAP)1 Guidance Bridge2,3 2019 Feb. Currency Base 2019 May LOE TRULANCE® Guidance Impact Performance Guidance Revenue Revenue Raised Full-Year 2019 $8.55B Revenue Guidance Approx. to Range Based on $8.50B +$25M to Approx. Approx. Approx. $8.35B
Slide 17: Bausch + Lomb/International Update
Bausch + Lomb/International Update1,4 1Q19 Revenues: $1,118M Key Highlights 4Q18 3Q18 2Q18 1Q18 Segment saw 8% organic revenue growth 2,3 in 1Q19 vs. Revenues Revenues Revenues Revenues 1Q18, due to increase in volume across all business units $1,205M $1,147M $1,209M $1,103M primarily driven by Glob
Slide 18: LUMIFY Launch Exceeding Expectations
LUMIFY® Launch Exceeding Expectations % of Weekly Market Share in Redness Reliever Category1 #1 in Redness Reliever category with ~28% market share1 38.6% 31.8% 28.4% 26.0% Physician-recommended #1 22.4% product in the Redness Reliever category2 14.4% 10.6% 11.4% 9.2% Satisfaction rating in a 95% re
Slide 19: Bausch + Lomb/International Update
Bausch + Lomb/International Update1,7 1Q19 Revenues: $1,118M 4Q18 3Q18 2Q18 1Q18 Global Vision Care saw 9% organic revenue growth 2,3 Revenues Revenues Revenues Revenues in 1Q19 vs. 1Q18, driven by volume across BioTrue® ONEday and ULTRA ® $1,205M $1,147M $1,209M $1,103M International Vision Care Gl
Slide 20: Salix Update
Salix Update1 1Q19 Revenues: $445M Key Highlights 4Q18 3Q18 2Q18 1Q18 5% organic revenue growth 2,3 in 1Q19 vs. 1Q18, primarily Revenues Revenues Revenues Revenues driven by XIFAXAN ® $426M $460M $441M $422M • Eighth consecutive quarter of organic revenue growth 2,3 • Completed the acquisition of ce
Slide 21: TRULANCE: Bolt-on Acquisition Completed
TRULANCE®: Bolt-on Acquisition Completed Completed the acquisition of certain assets of Synergy Pharmaceuticals • TRULANCE® for adults with chronic idiopathic constipation and irritable bowel syndrome with constipation (IBS-C) • Competitive Advantage: (1) More patient friendly dosing (once a day wit
Slide 22: Ortho Dermatologics Update
Ortho Dermatologics Update3,6,7 1Q19 Revenues: $138M Key Highlights 4Q18 Revenues 3Q18 Revenues 2Q18 Revenues 1Q18 Revenues 1% total segment organic revenue decline 1,2 in 1Q19 $159M $176M $141M $140M vs. 1Q18 • SILIQ™: Reported $5M in U.S. sales during 1Q19; BRYHALI ® Launch: Early Read TRx scripts
Slide 23: DUOBRII: Now Approved
DUOBRII™: Now Approved Long Duration of Use: Safety was established in a long-term study of up to 24 weeks of continuous use and up to 52 Weeks of as needed use1 What Differentiates DUOBRII™? • Unique Combination Product: First and only topical lotion combining halobetasol propionate and tazarotene
Slide 24: Significant Seven
Significant Seven <$100M Over $1B in annualized 2017 2018 2019 2020 2021 2022 Expected annualized revenues as of ~$75M >$150M ~$300M 2 peak total revenues by end of 2017 the end of 2022 Product Launch Date Highlight Achieved a monthly TRx retail dollar market share of >35% in the Sept. 2016 opioid-i
Slide 25: 2019: Pivot to Offense, Year of Growth
2019: Pivot to Offense Year of Growth for Bausch Health3 • Expect reported revenue for total company to grow in 2019 vs. 2018, at or above the mid-point of guidance and at current FX rates • Expected cash generated from operations of $1.5B to $1.6B • >$1B to be used to reduce debt and/or for “bolt-o
Slide 26: Appendix
25 Appendix BAUSCH Health
Slide 27: Key Product LOE Q1 2019 Impact
Key Product LOE Q1 2019 Impact Product Line with Actual or LOE Rev/Profit LOE Rev/Profit Change Business Unit Anticipated LOE Date1 Q1 2018 Actual Q1 2019 Actual Q1 2018 vs. Q1 2019 Revenue Profit Revenue Profit Revenue Profit • Lotemax Suspension® 2Q19 Ophtho Rx • Lotemax Gel® 2H 2019 – 1H 2020 (no
Slide 28: Key Product LOE 2019 Impact
Key Product LOE 2019 Impact Product Line with Actual or LOE Rev/Profit LOE Rev/Profit Change Business Unit Anticipated LOE Date1 Prior Forecast Current Forecast Prior vs Current Forecast Revenue Profit Revenue Profit Revenue Profit • Lotemax Suspension® 2Q19 Ophtho Rx • Lotemax Gel® 2H 2019 – 1H 202
Slide 29: Key Product LOE 2019 Impact vs. 2018
Key Product LOE 2019 Impact vs. 2018 Product Line with Actual or LOE Rev/Profit LOE Rev/Profit Change Business Unit Anticipated LOE Date1 2018 Actual 2019 Forecast 2018 vs 2019 Forecast Revenue Profit Revenue Profit Revenue Profit • Lotemax Suspension® 2Q19 Ophtho Rx • Lotemax Gel® 2H 2019 – 1H 2020
Slide 30: Selected U.S. Businesses Pipeline Inventory Trending
Selected U.S. Businesses Pipeline Inventory Trending (1Q19) Months on Hand As of As of As of As of Business Change Change Dec. 31, March 31, Dec. 31, March 31, Units 1Q18 1Q19 2017 2018 2018 2019 Derm 1.39 1.35 (0.04) 1.26 1.33 0.07 Neuro 1.62 1.62 0.00 1.08 1.06 (0.02) Ophtho 1.21 1.26 0.05 0.89 0.
Slide 31: Reduced Debt and Extended Maturities
Reduced Debt and Extended Maturities Long-Term Debt Maturity Profile as of May 6, 20191 2025 2019 2020 2021 2022 2023 2024 Total and beyond Debt $0M $0M $0M $1,250M $5,308M $2,000M $14,280M $22,838M Maturities Mandatory $0M $303M $303M $303M $303M $303M $114M $1,629M Amortization Total $0M $303M $30
Slide 32: Near-term Pipeline Expansion Plans and Innovation
2019: Pivot to Offense Near-term Pipeline Expansion Plans and Innovation Product Status Description Vision Care Bausch + Lomb ULTRA® Multifocal for Monthly silicone hydrogel lens builds upon the success of Bausch + Lomb ULTRA ® for Presbyopia Launch Mid-20191 Astigmatism and Bausch + Lomb ULTRA® for
Slide 33: IBS-D Expansion and Beyond
2019: Pivot to Offense IBS-D Expansion and Beyond Rifaximin Pipeline Clinical Status Formulation Indication Target Market (Ready) Rifaximin SSD Acute OHE5 Phase 2 156K HE hospitalizations in 2014 and growing1 Post Operative Crohn’s 780,000 with Crohn's disease; estimated 75% will need Rifaximin EIR
Slide 34: Extensive Pipeline Designed to Fuel Growth
2019: Pivot to Offense Extensive Pipeline Designed to Fuel Growth Product Status Description Psoriasis New potent to super potent topical corticosteroid treatment for plaque psoriasis; safety has been established in BRYHALI™ Launched Nov. 2018 clinical trials with dosing for up to 8 weeks with no in
Slide 35: 1Q Top Products – Total Bausch Health
1Q 19 Top 10 Products – Total BAUSCH Health1 Top 10 products/franchises revenues, trailing five quarters Rank Product/Franchises 1Q19 4Q18 3Q18 2Q18 1Q18 1 XIFAXAN® $306M $308M $318M $294M $275M 2 SofLens® $70M $78M $75M $77M $73M 3 WELLBUTRIN® $66M $63M $67M $69M $64M 4 Ocuvite® + PreserVision® $64
Slide 36: 1Q Top Products – B+L/International
1Q 19 Top 10 Products – B+L/International1 Top 10 products/franchises revenues, trailing five quarters Rank Product/Franchises 1Q19 4Q18 3Q18 2Q18 1Q18 1 SofLens® $70M $78M $75M $77M $73M 2 Ocuvite® + PreserVision® $64M $89M $79M $76M $61M 3 renu® $48M $57M $57M $59M $51M 4 Biotrue® ONEday $42M $37M
Slide 37: 1Q Top Products – Salix
1Q 19 Top 10 Products – Salix1 Top 10 products/franchises revenues, trailing five quarters Rank Product/Franchises 1Q19 4Q18 3Q18 2Q18 1Q18 1 XIFAXAN® $306M $308M $318M $294M $275M 2 GLUMETZA® $38M $23M $40M $25M $25M 3 APRISO® $36M $43M $41M $40M $38M 4 RELISTOR® $26M $21M $32M $24M $20M 5 UCERIS®
Slide 38: 1Q Top Products – Ortho Dermatologics
1Q 19 Top 10 Products – Ortho Dermatologics2 Top 10 products/franchises revenues, trailing five quarters Rank Product/Franchises 1Q19 4Q18 3Q18 2Q18 1Q18 1 THERMAGE® $27M $28M $19M $19M $18M 2 ONEXTON® $12M $8M $12M $8M $10M 3 RETIN-A MICRO® .06 & .08 $12M $7M $9M $9M $7M 4 JUBLIA® $11M $17M $15M $1
Slide 39: 1Q Top Products – Diversified Products
1Q 19 Top 10 Products – Diversified Products1,2 Top 10 products/franchises revenues, trailing five quarters Rank Product/Franchises 1Q19 4Q18 3Q18 2Q18 1Q18 1 WELLBUTRIN® $58M $59M $64M $67M $62M 2 CUPRIMINE® $25M $28M $26M $18M $16M 3 ARESTIN® $21M $25M $21M $26M $24M 4 APLENZIN® $16M $16M $13M $13
Slide 40: 1Q19 Other Financial Information
1Q19 Other Financial Information Three Months Ended Favorable (Unfavorable) Constant March 31, 2019 March 31, 2018 Reported Currency1,2 Cash Interest Expense $389M $393M 1% 1% Net Interest Expense $402M $413M 3% 2% Non-cash adjustments Depreciation $43M $43M 0% (5%) Non-cash share-based Comp $24M $2
Slide 41: Non-GAAP Adjustments EPS Impact (Quarter-to-Date)
Non-GAAP Adjustments EPS Impact (Quarter-to-Date) Quarter to Date Ended Quarter to Date Ended March 31, 2019 March 31, 2018 Income Earnings Per Income Earnings Per $ in millions, except per share impact (Expense) Share Impact (Expense) Share Impact Net loss GAAP $ (52) $ (0.15) $ (2,581) $ (7.36) Am
Slide 42: Bausch + Lomb / Int'l Segment Trailing Five Quarters
Bausch + Lomb / Int’l Segment Trailing Five Quarters1,2 Bausch + Lomb / International 1Q19 4Q18 3Q18 2Q18 1Q18 Global Vision Care Revenue $203M $203M $209M $207M $195M Global Surgical Revenue $167M $186M $159M $182M $171M Global Consumer Revenue $324M $368M $354M $369M $330M Global Ophtho Rx Revenue
Slide 43: Salix Segment Trailing Five Quarters
Salix Segment Trailing Five Quarters1 Salix 1Q192 4Q183 3Q183 2Q183 1Q183 Salix Revenue $445M $426M $460M $441M $422M Segment Revenue $445M $426M $460M $441M $422M Adj. Segment Gross Profit (non-GAAP)2,3.4 $381M $370M $392M $377M $355M (excluding amortization and impairments of intangible assets) Ad
Slide 44: Ortho Dermatologics Segment Trailing Five Quarters
Ortho Dermatologics Segment Trailing Five Quarters1,2 Ortho Dermatologics 1Q19 4Q18 3Q18 2Q18 1Q18 Ortho Dermatologics Revenue3 $100M $114M $147M $109M $111M Global Solta Revenue $38M $45M $29M $32M $29M Segment Revenue3 $138M $159M $176M $141M $140M Segment Gross Profit5 (excluding amortization and
Slide 45: Diversified Products Segment Trailing Five Quarters
Diversified Products Segment Trailing Five Quarters1 Diversified Products 1Q19 4Q18 3Q18 2Q18 1Q18 Neuro & Other Revenue $186M $186M $211M $216M $209M Generics Revenue2 $104M $115M $117M $90M $90M Dentistry Revenue2 $25M $30M $25M $31M $31M Segment Revenue2 $315M $331M $353M $337M $330M Segment Gros
Slide 46: Financial Summary – Adjusted (non-GAAP)
Financial Summary – Adjusted (non-GAAP) Presentation Reconciliation ($M) (Quarter-to-Date) Q1 2019 Gross Gross Selling & G&A and R&D Operating Operating Profit2 Margin Advertising Other Expense Expense Income Qtr 1 2019 GAAP $ 1,479 73.4% $ 462 $ 125 $ 117 $ 704 $ 287 Amortization of finite-lived in
Slide 47: Financial Summary – Adjusted (non-GAAP)
Financial Summary – Adjusted (non-GAAP) Presentation Reconciliation ($M) (Quarter-to-Date) Q1 2019 Salix Gross Gross Selling & G&A and R&D Operating Operating Profit2 Margin Advertising Other Expense Expense Income Qtr 1 2019 GAAP $ 380 85.4% $ 73 $ 11 $ 8 $ 92 $ 288 Acquisition-related costs and ad
Slide 48: Financial Summary – Amortization and Impairments of Intangible Assets
Financial Summary – Amortization and Impairments of Intangible Assets (Quarter-to-Date)1 Amortization of intangible assets Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Bausch + Lomb / International 120 123 126 132 136 Salix 242 240 360 424 424 Ortho Dermatologics 73 74 75 88 84 Diversified Products 54 65
Slide 49: Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA
Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA ($M) (Quarter-to-Date) Three Months Ended March 31, 2019 2018 Net loss attributable to Bausch Health Companies Inc. $ (52) $ (2,581) Interest expense, net 402 413 Benefit from income taxes (74) (115) Depreciation and amortization 532
Slide 50: Reconciliation of Reported Growth to Organic Growth
Reconciliation of Reported Growth to Organic Growth ($M) (Quarter-to-Date)1 Calculation of Organic Revenue Three Months Ended Three Months Ended Change in March 31, 2019 March 31, 2018 Organic Revenue Organic Organic Revenue Changes in Revenue Revenue Revenue as Exchange (Non-GAAP) as Divestitures a
Slide 51: Reconciliation of Reported Growth to Organic Growth
Reconciliation of Reported Growth to Organic Growth ($M) Calculation of Organic Revenue Three Months Ended Three Months Ended Change in March 31, 2019 March 31, 2018 Organic Revenue Changes Organic Organic Revenue in Revenue Revenue Revenue as Exchange (Non-GAAP) as Divestitures and (Non-GAAP) Repor
Slide 52: Reconciliation of Reported Growth to Organic Growth
Reconciliation of Reported Growth to Organic Growth ($M) Calculation of Organic Revenue Calculation of Organic Revenue Three Months Ended Three Months Ended Change in Three Months Ended Three Months Ended Change in December 31, 2018 December 31, 2017 Organic Revenue September 30, 2018 September 30,
Slide 53: Reconciliation of TTM Adjusted EBITDA
Reconciliation of TTM1 adjusted EBITDA2 ($M) TTM TTM TTM TTM TTM Mar-19 Dec-18 Sep-18 Jun-18 Mar-18 (b) Net loss attributable to Bausch Health Companies Inc. $ (1,619) $ (4,148) $ (3,291) $ (1,640) $ (805) Interest expense, net 1,663 1,674 1,707 1,746 1,770 Benefit from income taxes 31 (10) (1,242)
Slide 54: 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 (loss) income (its most Adjusted EBITDA (no
Slide 55: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Adjusted EBITDA reflects adjustments based on development acquired, the Company does not believe that they Adjusted EBITDA (non-GAAP) are a representation of the Company’s research and development the following items: efforts during the pe
Slide 56: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Share-based Compensation: The Company has excluded the in connection with recent legal and governmental proceedings, Adjusted EBITDA (non-GAAP) impact of costs relating to share-based compensation. The investigations and information reques
Slide 57: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Adjusted EBITA reportable segments, and the Company in total, without the impact of Adjusted EBITDA (non-GAAP) foreign currency exchange fluctuations, and fair value adjustments to Management uses this non-GAAP measure (the most directly i
Slide 58: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Adjusted Net Income (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 which is GA
Slide 59: 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 60: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Organic Revenue, Organic Growth and Organic Change • Acquisitions, divestitures and discontinuations: In order to Adjusted EBITDA (non-GAAP) present period-over-period organic revenues (non-GAAP) on a Organic growth or change, a non-GAAP m
Slide 61: 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
Bausch Health Companies — Q1 2019 Earnings Presentation on 6ix