Perrigo Company Plc · NYSE:PRGO
Perrigo — Investor Day (February 2023)
168 slides from Perrigo's investor day presentation, Feb 28, 2023
Slide 1: Optimizing & Accelerating Strategic Plan Phase 2
Optimizing & Accelerating Strategic Plan Phase 2 February 28, 2023
Slide 2: Bradley Joseph
Bradley Joseph VP, Global Investor Relations & Corporate Communications
Slide 3: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation are “forward-looking statements.” These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our, or our industry’s actual results,
Slide 4: Agenda
AGENDA Introduction and Safe Harbor Brad Joseph Our Transformation Journey Murray Kessler Lessons Learned & Strategic Questions From Our Journey Murray Kessler 5-Minute Break Answers To Inform Perrigo’s Strategic Direction Svend Andersen Jim Dillard Alison Ives Ron Janish Grainne Quinn Eduardo Bezer
Slide 5: Murray Kessler
Murray Kessler President & Chief Executive Officer
Slide 6: Our Transformation Journey
AGENDA Our Transformation Journey Lessons Learned & Strategic Questions From Our Journey Answers To Inform Perrigo’s Strategic Direction Translating Strategic Direction Into Shareholder Value Bringing It All Together For A Bright Perrigo Future
Slide 7: Perrigo's Transformation Strategy Was Launched In May 2019
Perrigo’s Transformation Strategy Was Launched In May 2019 To Address Long-term Declines In The Business Perrigo Net Sales1,2 Perrigo Adj. Operating Income1,2 (2015 - 2018, ex-currency) (2015 - 2018, ex-currency) RX RX RX Flat RX Consumer Consumer Self-Care Self-Care Consumer Consumer Self-Care Self
Slide 8: The Transformation Began With A New Vision & Consumer Self-Care Focus
The Transformation Began With A New Vision & Consumer Self- Care Focus, Which Opened Our Frame Of Reference For Growth Our Vision To make lives better by bringing quality, affordable self-care products that consumers trust everywhere they are sold. 8 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 9: A '3/5/7' Long-term Growth Algorithm
A ‘3/5/7’ Long-term Growth Algorithm, In-line With Consumer Peers, Was The Financial Objective To Be Accomplished Across Two Phases – Growth First! Perrigo Consumer Self-Care Strategy Phasing Phase 1 Phase 2 Transformation Optimizing & Accelerating KEY PRIORITIES KEY PRIORITIES • Reconfigure the Por
Slide 10: We Accomplished What We Set Out To Do In Phase 1
We Accomplished What We Set Out To Do In Phase 1 Reconfigured Portfolio Revitalized Business & Reduced Uncertainty Returned to Growth • Sold Generic Rx • Built >$500M New Product pipeline • Favorably settled Irish Tax NOA • Sold Latin America Ops. • Launched $610M in consumer new • Athena IRS case t
Slide 11: Net Sales Growth Returned, Adj. Operating Income Stabilized
We Returned Perrigo To Strong Net Sales Growth, And Adj. Operating Income Was Stabilized While We Invested To Modernize Perrigo Consumer Net Sales1,2 Perrigo Consumer Adj. Operating Income1,2 (2018 - 2022, ex-currency) (2018 - 2022, ex-currency) Flat 2018 2022 2018 2022 11 Perrigo - Strategy Offsite
Slide 12: Restoring Perrigo's Winning Historical Growth Formula
Which Was Accomplished By Restoring Perrigo’s Winning Historical Growth Formula Transformation Winning Years Losing Years Years Revenue Growth Components 2009-20151,2 2015-20181,2 2018-20221,3,4 Acquisitions $590M $30M $660M Rx-To-OTC Switches $90M $105M $25M New Products $395M $55M $430M Base Busin
Slide 13: Net Sales Growth Has Replaced Lost Rx Revenue
Net Sales Growth Has Been So Robust That It Has More Than Replaced The Lost Revenue From The Rx Divestiture Perrigo Consumer Self-Care Net Sales Growth1,2 (2018 - 2022, ex-currency) Innovation RX Bolt-ons Legacy Legacy Consumer Consumer Self-Care Self-Care 2018 2022 1. SeePerrigo - Strategy attached
Slide 14: We Diversified Our Portfolio Across Self-care Categories
We Diversified Our Portfolio Across Important Self-care Categories…. Diversified Across Global OTC Categories (FY2022 net sales) With Leading Brands & Businesses Including1,2… #1 Foot Blister #1 Natural #1 Head Lice #2 Cold Sore Cough/Cold/Allergy Digestive Health, New 12% Oral Care, VMS, 9% DE/FR/S
Slide 15: Diversified Across Store Brands And National Brands
We Diversified Our Portfolio Across Store Brands And National Brands…. Diversified Across Branded & Store Strong Store Brand Partnerships Brand Offerings1,2,3 ~50% Branded ~40% Branded ~60% ~50% Strong National Brands Store Brand Store Brand 2018 2023 Net Net Sales Sales Guidance (Mid-point) 1. SeeP
Slide 16: Diversified Across Geographies
And We Further Diversified Our Portfolio Across Geographies Diversified Across Geographies1,2,3 Distribution in ~80 Countries Europe and ROW Europe and ROW North North America America 2018 2023 Net Net Sales Sales Guidance (Mid-point) 1. SeePerrigo - Strategy attached Appendix Offsite of for reconci
Slide 17: Leading, Pure Play, Global Consumer Self-care Company
Perrigo Has Transformed Into A Leading, Pure Play, Global Consumer Self-care Company… 17 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 18: Living Its Vision Of 'Making Lives Better'
…That Is Living Its Vision Of ‘Making Lives Better’ With Products That Are On Trend And Relevant! ACCESSIBILITY AFFORDABILITY RELIABILITY SUSTAINABILITY PROFITABILITY Our OTC products Each $1 spent on OTC Our relentless focus on Our OTC products are We are focused on provide expanded products saves
Slide 19: Massive Scale And Ability To Manage Complexity
With Massive Scale And Ability To Manage Complexity ~80 Countries of Distribution 21 Manufacturing and Packaging Facilities DOSAGE FORMS √ Tablets/Caplets √ Suppositories √ Gums ~200 Brands √ Capsules √ Creams/Ointments √ Infant Formula √ Solubles √ Powders √ Ophthalmics √ Solutions √ Lozenges √ Ora
Slide 20: Financial Objectives Delayed By Macro-economic Factors
While Strategic Objectives Set Out In 2019 Were Achieved, Financial Objectives Were Delayed By Unprecedented Macro-economic Factors Impact of Foreign Global Supply Covid-19 Labor Russia/ Ukraine Currency Chain Disruption Pandemic Shortages War2 Translation3 & Inflation4 Impacted net sales by Dramati
Slide 21: Q4 & Fiscal 2022 Financial Highlights
As Shown In Yesterday’s Earnings Release, Perrigo Was Back On- Track And Exceeded Its Long-term Algorithm Of 3/5/7 In 2022 Perrigo Q4 & Fiscal 2022 Financial Highlights1 (% change vs. year-ago) Net Sales Adjusted Operating Adjusted Diluted Growth Income Growth EPS Growth Constant Constant Constant U
Slide 22: Q4 Share Gains And Strong Demand In Most Categories
And, Exited The Year With Q4 Share Gains And Strong Demand In Almost All Categories Where We Compete Perrigo Q4 2022 Sell-out Data Performance1 (dollar % change & dollar share point change vs. year-ago) Consumer Self-care CSCA Americas ConsumerCSCI Self-care International $ Share △ $ Share △ Pain 19
Slide 23: Adjusted Gross Margins Almost Fully Recovered
Worth Noting, Perrigo Exited 2022 With Adjusted Gross Margins Almost Fully Recovered To Pre-COVID Levels Perrigo 2022 Adj. Gross Margin Recovery1,2 (Q1 2022 vs. Q4 2022) CSCA Adj. Gross Margin CSCI Adj. Gross Margin Perrigo Adj. Gross Margin OTC: +660 bps +200 bps +500 bps +550 bps Nutrition: +1,600
Slide 24: Perrigo Compared Favorably To Consumer Peers In 2022
And Also Worth Noting, Perrigo Compared Favorably Relative To Consumer Peers In 2022 On Almost Every Metric Adj. Gross Div. Yield Rank Net Sales Org. Net Sales(2) Adj. Op. Income Adj. EPS (% chg. vs PY) (% chg. vs PY) (% chg. vs PY) (% chg. vs PY) Margin (2022 DPS / (bps chg. vs PY) current price) #
Slide 25: We Expect Adjusted EPS To Grow 26% In 2023
Moreover, We Expect Adjusted EPS To Grow 26% In 2023 Perrigo Adjusted EPS Bridge1 $2.66 - $2.88 $2.50 - $2.70 ($0.16 - $0.18) $2.07 25 Perrigo - Strategy Offsite v40 ... footer 1. See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts. BOS
Slide 26: First Year Of A 3 Year Plan To Optimize & Accelerate
Which Is The First Year Of A 3 Year Plan To Optimize & Accelerate The New Perrigo Executive Summary: Perrigo Strategic Plan Our Self-Care strategy and vision is correct We transformed the business, returning Perrigo to top-line growth External factors limited adj. OI growth, but we have learned and
Slide 27: Lessons Learned & Strategic Questions
AGENDA Our Transformation Journey Lessons Learned & Strategic Questions From Our Journey Answers To Inform Perrigo’s Strategic Direction Translating Strategic Direction Into Shareholder Value Bringing It All Together For A Bright Perrigo Future
Slide 28: 5 Key Lessons Learned
5 Key Lessons Were Learned During Our Transformation Execution 1 Our focus on consumer self-care has shown to be correct and should be maintained Bolt-on M&A provided strong growth, and access to new & growing segments while we were 2 reigniting organic growth 3 There are several tools available for
Slide 29: Lesson 1: Key Insights
Key Insights Lesson #1: • Self-care is trending and gaining momentum, emerging as a new independent industry within consumer products Our focus on consumer self-care • Self-care is a large market1 at $400B+, with strong has shown to be forecasted growth2 of ~4% CAGR correct and should be maintained
Slide 30: Consumer Self-care Market Is Large And Growing
The Consumer Self-care Market Is Large And Continues To Grow Total Addressable Self-Care Market1 Forecasted Total OTC Market Growth2 CAGR CAGR 2017 - 2022 2022 - 2027 Europe +2.8% +4.8% $400B+ North +3.1% +4.0% America Global +3.8% +5.9% 30 Perrigo - Strategy Offsite v40 ... footer 1. Source: Nichol
Slide 31: Fundamentals For Self-Care Products Have Never Been Stronger
Fundamentals For Self-Care Products Have Never Been Stronger World Populations are Aging Meaningfully Older Populations Spend More on Health Overall Per Capita Spend is Growing 1. Note: North America region includes United States, Canada, Bermuda, Greenland, and Saint Pierre and Miquelon; Europe reg
Slide 32: Perrigo Competes Within Growing Self-Care Categories
Perrigo Competes Within Growing Self-Care Categories Global Product Category Growth1,2 (CAGR 2017 - 2022E) 9.5% 5.0% 5.0% 4.3% 3.7% 2.9% 2.3% 2.4% 1.1% Daily & Pain and Vitamins, Digestive Skin and Upper Healthy Oral Care Nutrition Further enabled Emergency Sleep-aids minerals, and Health Personal R
Slide 33: Established Leader In The OTC Space
And, Is An Established Leader In The OTC Space U.S. OTC Market Share Leaders EU OTC Market Share Leaders (Retail Omnichannel Revenue L13 weeks ending 1/1/23; $ millions)1 (Retail Revenue MAT Q3’22; $ millions)2 >$1B >$2B Does not include Skin Care Category >$200M >$600M 33 Perrigo - Strategy Offsite
Slide 34: A Standalone Self-care Industry Has Emerged
Of Note, Since Perrigo Announced Its Focus On Self-care In 2019, A Standalone Industry Has Emerged1 Expanding Universe of Pure-Play With Potential to Continue to Expand Public Self-Care Players Completed its Transformation into Completed Internal a Global Consumer Self-Care Restructuring of Consumer
Slide 35: Lesson #1 – Conclusion
Lesson #1 – Conclusion Lesson Learned: Strategic Question: Our focus on Can Perrigo compete consumer self-care has effectively with the new, shown to be correct pure-play self-care and should be companies? maintained
Slide 36: Lesson 2: Key Insights
Key Insights Lesson #2: • We exceeded +3% revenue growth in both consumer segments1, despite the impact of the pandemic Bolt-on M&A • M&A contributed $660M of revenue2 in 2022, which enabled provided strong access to new and growing categories, and delivered strong adj. growth, and access operating
Slide 37: Perrigo Exceeded +3% Revenue Growth
Through Uncertainty Of The Pandemic, Perrigo Exceeded +3% Revenue Growth CSCA and CSCI exceeded +3%1,2 Global Branded and SB exceeded +3%1,2 $ billions $ billions CAGR CAGR ‘18 – ‘22 ‘18 – ‘22 $4.7 +7% $4.7 +7% $4.0 $4.1 $4.0 $4.1 $3.8 $3.8 $3.6 +7% $3.6 CSCI Branded +11% CSCA +7% Store +4% Brand 20
Slide 38: Bolt-On Acquisitions Added $660M Net Sales In 2022
Bolt-On Acquisitions Added Net Sales of $660M In 2022 While Perrigo Was Reigniting Organic Growth Legacy Perrigo & Acquisition Net Sales1,2 $ billions CAGR ‘18 – ‘22 $4.7 +7% $4.0 $4.1 Total Perrigo $3.8 $3.6 +3% Organic Perrigo 2018 2019 2020 2021 2022 Legacy Perrigo Bolt-ons 38 Perrigo - Strategy
Slide 39: Acquisitions Added New Categories And Leading Global Brands
Importantly, Acquisitions Added New Categories And Leading Global Brands Oral Care Blister Care Scar Care Women’s Health Primary Brands Highlights #1 in flossers & floss picks in U.S.1 #1 in foot care blister treatments #1 recommended brand in the U.S. Undisputed category leader in #1 in toothbrush
Slide 40: Bolt-On Acquisitions Provided Strong Return To Investors
Bolt-On Acquisitions Have Provided A Strong Return To Investors And Position Perrigo For Long-Term Growth Financial Benefits Bolt-on Acquisitions Strategic Benefits from Acquisitions Added Women’s Health HRA Category, Bolstered Skin Care Category Adj. operating income: • Projected CAGR of more Gatew
Slide 41: Innovation Launched $610M In New & Refreshed Products
Concurrently, Innovation Was Ramped Up Dramatically And Launched $610M In New & Refreshed Products (~$340M In New Products) From 2020-2022 Net Sales by Innovation Type (Cumulative 2020-2022) $ millions $610M New Products Refreshed Products 41 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 42: Innovation Program Can Be Even More Productive
And, We Learned How Our Innovation Program Can Be Even More Productive! Global New Product Pipeline Projects vs. Avg. Year 3 Potential Revenue (# of pipeline projects and expected year 3 revenue as of 6/2022) 389 $1,148M ~60% of Projects 10% Represented Less Than 10% of Pipeline Value 61% 90% 39% #
Slide 43: eComm Investments Contributed More Than $500M In Net Sales
Investments In eComm Contributed More Than $500M In Net Sales And Perrigo Is Now A Major Player In eComm Perrigo’s eCommerce Net Sales Growth (2018-2022 CAGR)1,2 $ millions $539 $93 2018 2019 2020 2021 2022 % of Total Net Sales 2.5% 4.0% 8.1% 10.5% 12.2% 43 Perrigo - Strategy Offsite v40 ... footer
Slide 44: Strategic Pillars Growth Prioritization Drove Organic Growth
Our Strategic Pillars Growth Prioritization Also Successfully Drove Organic Growth Albeit There Is Room For Refinement Strategic Growth Pillars Performance1 Core OTC Science Based Oral Care Nutrition NRT (Excl. NRT, VMS) Naturals/VMS 2022 Reported Net Sales $2.8B $396M $520M $362M $323M CSCA Organic
Slide 45: Inflation Justified Price Increases Implemented
And Encouragingly, Perrigo Has Recently Been Able To Implement Inflation Justified Price Increases Perrigo Net Price Increase / (Decrease)1 (as a % of net sales) Total Perrigo CSCA CSCI 5.0% 3.8% 3.2% 1.4% 0.7% 0.4% (-0.1%) (-0.6%) Average 2021 2022 Average 2021 2022 (-1.7%) ('18 - '20) ('18 - '20)
Slide 46: Lesson #2 – Conclusion
Lesson #2 – Conclusion Lesson Learned: Bolt-on M&A provided Strategic Question: strong growth, and Can Perrigo continue to access to new & reliably grow organic growing segments while revenue at 3%+ over the we were reigniting long-term? organic growth
Slide 47: Lesson 3: Key Insights
Key Insights Lesson #3: • Great progress has been made on controlling operating expenses through Project Momentum There are several • However, COVID, inflation, and global supply tools available for chain disruption hurt gross margins Perrigo to fully recover and expand • Management offset much of t
Slide 48: Project Momentum Delivered $80M+ Operating Expense Savings
Project Momentum Delivered Annualized Run Rate of More than $80M in Operating Expense Savings So Far Perrigo Adjusted SG&A1,2 (as a % of net sales) 21.2% 21.0% 20.7% 19.8% 19.0% 2018 2019 2020 2021 2022 48 1. Perrigo - Strategy Offsite v40 ... See attached Appendix for reconciliation of Adjusted (No
Slide 49: Supply Chain Factors Hurt Adj. Gross Margin
Conversely, Supply Chain Related External Factors Hurt Our Adj. Gross Margin, Which Has Been Mostly Recaptured Perrigo Adjusted Gross Margin1 2019 - 2021 Q1 2022 - Q4 2022 40.3% 38.9% 38.4% 36.5% 36.5% 36.5% 33.4% 2019 2020 2021 Q1'22 Q2'22 Q3'22 Q4'22 49 Perrigo - Strategy Offsite v40 ... footer 1.
Slide 50: Adjusted Gross Margin Recovered Quickly In 2022
Adjusted Gross Margin Recovered Quickly In 2022 From Two Main Areas Perrigo 2022 Adjusted Gross Margin Recovery1 +400 bps +100 bps 50 Perrigo - Strategy Offsite v40 ... footer 1. See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts. BOS
Slide 51: Pandemic Illuminated Supply Chain Savings Opportunities
Encouragingly, The Pandemic Illuminated Global Supply Chain Savings Opportunities Which Can Drive Further Margin Expansion Customer Service SKU Proliferation Inconsistent Concentrated Suboptimal manufacturing / Issue Challenges and & Declining Application of supplier base Excess Inventory Revenue /
Slide 52: $200M-$300M Adj. OI Opportunity From Supply Chain Reinvention
Perrigo Has Identified A $200M-$300M1 Adj. OI Opportunity By Reinventing Our Global Supply Chain Over Next 5 Years Perrigo’s Supply Chain Reinvention Program 1 2 3 4 Winning Planning Sourcing Manufacturing Portfolio Evolution Optimization Optimization Reducing portfolio Improving Integrated Diversif
Slide 53: Supply Chain Reinvention Can Drive Plant Productivity And Revenues
Supply Chain Reinvention Also Has The Potential To Drive Plant Productivity And Meaningfully Increase Revenues Supply Chain Constraints in Have Led to Missed Revenue Certain Products Opportunities of: Minoxodil Polyethylene Glycol Physiomer >$200M (2019 – 2022) Cough/Cold Infant Liquid Products Form
Slide 54: Lesson #3 – Conclusion
Lesson #3 – Conclusion Lesson Learned: Strategic Question: There are several tools Can Perrigo achieve & available to Perrigo to sustain 40%+ adj. fully recover and gross margin? expand margins
Slide 55: Lesson 4: Key Insights
Key Insights Lesson #4: • We expect ESG will continue to grow in importance ESG has become embedded in our organizational DNA, • Perrigo has made significant progress on ESG but must continue initiatives to evolve • Perrigo’s commitment to ESG has significantly benefited the business
Slide 56: McKinsey Survey: ESG Values Increasingly Important To Younger Consumers
McKinsey Survey: While Value is Paramount, ESG Values Are Increasingly Important Among Younger Consumers Importance of Purpose in Consumer Decisions1,2 (% of respondents indicating “very important”) Baby Boomers (n = 782) Generation X (n = 483) Millennials (n = 719) Generation Z (n = 176) Respondent
Slide 57: Perrigo Has A Long History Of ESG Sustainability
Perrigo Has A Long History And Cares Deeply About ESG Sustainability Began reporting >10 years ago to provide transparency into Perrigo employees and our ethical supply chain In 2015, we released our sustainability goals of reducing greenhouse gas emissions, waste, energy and water use Today, Perrig
Slide 58: We Have Made Significant ESG Strides
ESG And, We Have Made Significant Strides1 Our 3-Prong Environmental Sustainability Strategy Progress made against our sustainability goals 22% 1.7M lbs 4 Reduced CO2e Reduced Sites achieving emissions packaging zero waste to since 2015 weight since landfill Operations Packaging & Climate & Plastics
Slide 59: Commitment To Diversity, Equity & Inclusion
Perrigo Also Has An Ongoing Commitment To Diversity, Equity & ESG Inclusion (DEI) With Colleagues & Consumers At The Forefront 2021 Focused on, DEI awareness & education focus including just in 2019 time learning and implemented a 2023 uniform global anti-harassment/ New 2023-2026 DEI strategic Crea
Slide 60: DEI Is A Major Focus And Priority
ESG DEI Is A Major Focus And Priority For Perrigo 48% 51% >30 Our Strategy Focuses Female Female Hires Countries on 3 Key Areas: Representation • Education & awareness • Talent practices • Governance & metrics 23% 33% 36% U.S. People of Color U.S. People of Board of Directors are Representation Colo
Slide 61: Commitment At The Highest Levels Of The Company
Including A Commitment At The Highest Levels Of The ESG Company Level of Diversity1 (as a % of total) Board of Operating Global Female Directors Committee Leaders 36% 40% 43% Today 2019 20% 9% 41% 61 Perrigo - Strategy Offsite v40 ... footer 1. As of December 2022. BOS
Slide 62: Supporting The Communities Where We Work And Live
Supporting The Communities Where We Work And Live Is ESG Also An Important Priority Perrigo 2022 Donations1 $252K $360K Associate Donation Healthcare and Matching Perrigo Foundation focused Donations on 3 strategic areas: $1.9M Cash Donations $430K • Healthcare Education Cash • Education Donations $
Slide 63: Good Governance A Major Priority For The Board
Good Governance And Oversight Has Always Been A Major ESG Priority For Perrigo’s Board Of Directors Annual Elections for Separate Chairman No Poison Pill No Shareholder Each Board Member & CEO on Perrigo’s Rights Plan Board of Directors No Company Loans Pay for Performance Majority Voting for Annual
Slide 64: Lesson #4 – Conclusion
Lesson #4 – Conclusion Lesson Learned: Strategic Question: ESG has become How can Perrigo’s embedded in our commitment to ESG organizational DNA, but continue to set us apart? must continue to evolve
Slide 65: Lesson 5: Key Insights
Key Insights Lesson #5: • Successful integration is key to delivering on the strategic and financial benefits of the Now is the time for acquired assets Perrigo to shift from M&A to executional • The current manner to optimize the Perrigo excellence and capital structure is by deleveraging the stren
Slide 66: Successful Integration Of HRA & Gateway Is Critical
Successful Integration Of HRA & Gateway Are Critical To Delivering $150M+ Adj. OI In 2023 And An Additional €50M of Synergies In 2024 13 Workstreams Tracking HRA Integration Workstream Status CSCI Distributor Model €50 Million People (Work Council Approvals) Ops & Procurement Chief Medical Office of
Slide 67: Reducing 5x+ Net Leverage Ratio Will Contribute To Earnings Growth
Reducing Perrigo’s Current 5x+ Net Leverage Ratio Will Also Contribute To Earnings Growth Additional Interest Expenses of ~$25M (2021 vs. 2022)1 2021 Act. Structure2 2022 Act. Structure3 Total Debt ~$3.5B ~$4.1B Interest Rate ~3.5% ~4.5% Interest & ~$125M ~$150M Other Expense $25M Net Leverage Ratio
Slide 68: Committed To A Consistent & Growing Dividend
While Our Plan Is To Reduce Leverage, Perrigo Remains Committed To A Consistent & Growing Dividend Perrigo Annual Dividends Per Share $1.04 $0.96 $0.90 $0.82 $0.76 $0.64 $0.58 $0.48 2015 2016 2017 2018 2019 2020 2021 2022 68 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 69: Lesson #5 – Conclusion
Lesson #5 – Conclusion Lesson Learned: Now is the time for Strategic Question: Perrigo to shift from How will Perrigo achieve its M&A to executional goal to reduce leverage? excellence and strengthen its Balance Sheet
Slide 70: Summary: Lessons Learned & Key Strategic Questions
Summary: Lessons Learned & Key Strategic Questions Lessons Learned… …and Key Strategic Questions Our focus on consumer self-care has 1 Can Perrigo compete effectively with the shown to be correct and should be new, pure-play self-care companies? maintained Bolt-on M&A provided strong growth, and 2 C
Slide 71: Answers To Inform Perrigo's Strategic Direction
AGENDA Our Transformation Journey Lessons Learned & Strategic Questions From Our Journey Answers To Inform Perrigo’s Strategic Direction Translating Strategic Direction Into Shareholder Value Bringing It All Together For A Bright Perrigo Future
Slide 72: Svend Andersen, Jim Dillard
Svend Andersen Jim Dillard EVP & President, EVP & President, Consumer Self-Care International Consumer Self-Care Americas
Slide 73: Answering These Key Questions Informs Strategic Direction
Answering These Key Questions Informs Perrigo’s Strategic Direction Key Strategic Questions Can Perrigo compete effectively with the new, pure-play self-care companies? Can Perrigo continue to reliably grow organic revenue at 3%+ over the long-term? Can Perrigo achieve & sustain 40%+ adj. gross marg
Slide 74: Self-Care Was Projected To Continue Solid Growth
Even Prior To The Emergence Of A New Dedicated Industry, Self- Care Was Projected To Continue Solid Growth Self-Care Market Projected Growth (2022 - 2025 CAGR) 6.2% 5.7% 5.1% 3.8% Global N. America W. Europe E. Europe 74 Perrigo - Strategy Offsite v40 ... footer BOS Source: Euromonitor:: Self-care m
Slide 75: Newly Independent Self-Care Companies Should Accelerate Category Growth
Newly Independent Self-Care Companies Should Drive Penetration Across Markets And Accelerate Category Growth Upsides from New Industry Formation ✓ National Brand competition will drive category growth with brand building initiatives ✓ Branded innovation will enable fast follow innovation on Store Br
Slide 76: Capabilities Allow Perrigo To Compete Effectively With Peers
We Also Believe Perrigo’s Capabilities Will Allow It To Compete Effectively With Self-Care Peers Store Brand Market Fast Follow Perrigo Led Rx-To- Broad Product Leadership Innovation in SB OTC Switches Portfolio Perrigo’s ~49% Share of US SB OTC1 Global Brand Strong eCommerce Leader In Scalable Buil
Slide 77: Unique Portfolio Bodes Well For Any Consumer Environment
And Perrigo’s Unique Store Brand, Value Brand, and Branded Portfolio Bodes Well For Any Consumer Environment McKinsey Pulse Survey: Consumers Are ‘Trading Down’1,2 74 Actions Taken to ‘Trade Down' Share of Respondents Who Traded 60 Down 44 37 26 21 Adjusted Delayed Changed Changed Used Share of quan
Slide 78: New Industry Coverage May Broaden Investor Base
And Finally, New Industry Coverage Has The Opportunity To Further Broaden Perrigo’s Investor Base From Healthcare-Specific Shareholders… …to Generalist / Consumer-Focused Shareholders 2018 2022 Index, 35% Index, 40% Generalist / Generalist / Consumer, 19% Consumer, 49% Healthcare, 46% Healthcare, 11
Slide 79: Answering These Key Questions Informs Strategic Direction
Answering These Key Questions Informs Perrigo’s Strategic Direction Key Strategic Questions Can Perrigo compete effectively with the new, pure-play self-care companies? Can Perrigo continue to reliably grow organic revenue at 3%+ over the long-term? Can Perrigo achieve & sustain 40%+ adj. gross marg
Slide 80: Optimize Strategic Pillars And Accelerate Growth
Reconfiguring Our Product Portfolio Provided An Opportunity To Optimize Our Strategic Pillars And Accelerate Growth Continue Original OTC OTC Oral Care Oral Care Nutrition Nutrition Science Based Naturals Science Based Naturals Add NRT Women’s Health Moving NRT into OTC where it is managed Skin Care
Slide 81: Core OTC Remains A Strategic Pillar
Core OTC Remains A Strategic Pillar Market • OTC is expected to grow at ~4% annually1 through 2025 Outlook • Global population is aging, creating growing need for self-care products Market Drivers • Rx-to-OTC switches and product innovation will continue to drive growth • OTC is core to Perrigo’s bu
Slide 82: NRT Has Been Folded Back Into Core OTC
NRT Has Been Folded Back Into Core OTC Market • NRT is expected to grow ~4%1 annually through 2025 Outlook • Limited change in the number of consumers entering the Market category Drivers • Existing players employing disruptive technologies and distribution capabilities are gaining traction Perrigo
Slide 83: Oral Care Remains A Strategic Pillar
Oral Care Remains A Strategic Pillar Market • Strong growth of ~6%1 expected for the Oral Care market through 2025 Outlook • Continuous promotion of oral care as self-care and essential to overall health Market • Increasing importance of personal aesthetics Drivers • Growing inclination towards prem
Slide 84: Nutrition (Infant Formula) Remains A Strategic Pillar
Nutrition (Infant Formula) Remains A Strategic Pillar Market • Industry growth of ~3%1 expected through 2025 Outlook • Increased acceptance of formula supplementation with breastfeeding2 Market • Growth in smaller, new brands focused on organics and naturals Drivers • Eased requirements for internat
Slide 85: Science-based Naturals Remains A Strategic Pillar
Science-based Naturals Also Remains A Strategic Pillar Market • Herbals/ Natural Supplements is expected to grow ~4%1 Outlook annually through 2025 • Consumer importance for natural products is rising2 (e.g., 33% consider “organic” essential when deciding which health and Market beauty products to b
Slide 86: Strong Global Portfolio Of Women's Health Brands
With The HRA Acquisition, Perrigo Now Has A Strong Global Portfolio Of Women’s Health Brands Totaling >$150M In Net Sales Rx-to-OTC Switch of Daily Contraception Perrigo Women’s Health Portfolio is a Significant Growth Opportunity Recently Approved In The U.K. 86 Perrigo - Strategy Offsite v40 ... f
Slide 87: Opill – Opportunity In The $3.7B Daily Oral Contraceptive Market
Opill® – A Huge Opportunity To Enter The $3.7B Daily Oral Contraceptive Market In The U.S. Strong Unmet Need1,2 Nearly half of the 6.1 million pregnancies in the U.S. The Potential First Ever are unintended Rx-to-OTC Switch of Daily • Impact women of all income levels, ages, racial/ethnic Birth Cont
Slide 88: Opill Has Support Of Major Health Organizations
Opill Has The Support Of Major Health Organizations And 70% Of Women “The American College of Obstetricians and Gynecologists supports over- the-counter access to hormonal contraception without age restrictions.” “AAFP supports OTC access to oral contraception without a prescription.” “The American
Slide 89: Women's Health Added As A Strategic Pillar
Given The Massive Opportunity, Women’s Health Has Been Added As A Strategic Pillar • Daily Oral and Emergency Contraceptive segments are sizeable and expected to Market grow 9% and 3%1, respectively, over the next several years Outlook • Women’s health category emerging within self-care, requiring e
Slide 90: Skin Care Is Now Our Second Largest Category
Also As A Result Of The HRA Acquisition, Skin Care Is Now Our Second Largest And Fastest Growing Category Perrigo 2022 Net Sales by Category Women's Science Based Health, Naturals, 3% 7% Includes Gateway & Goodstart® Brands Nutrition, for 2 months 12% Oral Care, 9% Core OTC, 56% The global Skin Care
Slide 91: Iconic Portfolio Of Brands In Skin Care
Perrigo Has An Iconic Portfolio Of Brands In Skin Care 91 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 92: Skin Care Added As A Strategic Pillar
With Significant Growth Potential, Skin Care Has Been Added As A Strategic Pillar Market • Strong growth of 6%1 expected for the Skin Care market through 2025 Outlook Market • Increasing preference for premium products with proven efficacy and ‘less Drivers is more’ approach for skin care routines •
Slide 93: Strategic Pillars Provide Opportunity For Organic Growth Above 3%
Perrigo’s Strategic Pillars Provide A Strong Opportunity For Organic Topline Growth To Exceed Our Long-term Target Of 3% Value of 1 Share Pt. to Go Forward Strategic Pillars Market Outlook (‘22-‘25)1 Perrigo2 OTC ~4% $260M Oral Care ~6% $35M Nutrition ~3% $20M Science Based ~4% $30M Naturals Women’s
Slide 94: Alison Ives
Alison Ives EVP & Chief Scientific Officer
Slide 95: Accelerated Growth Supported By Foundational Enablers
Accelerated Organic Growth Will Be Supported By 3 Foundational Enablers 1 2 3 Global Marketing Innovation eComm / Digital 95 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 96: Global Marketing Focus On Key Growth Opportunities
The Formation Of Global Marketing Will Provide Focus On 3 Key Growth Opportunities Global VP Global VP Global Management Women’s Health Skin Care Marketing Oral Care Global Marketing, Global Brands Global Marketing Digital and Femtech Skin Care Marketing Plackers® Global Commercial Regional Brands G
Slide 97: Compeed Is An Iconic Brand On A Strong Growth Journey
Compeed® Is One Example Of An Iconic Brand On A Strong Growth Journey Supported By Innovation, A Global Team And Perrigo Global Reach! From a blisters specialist To a skin healing expert From a seasonal brand To an all year round must have From a distress appeal To planned purchase From pharmacy To
Slide 98: Optimizing Innovation System For Greater Pipeline Efficiency
Perrigo Is Optimizing Its Innovation System To Drive Greater Pipeline Efficiency For Accelerated Growth S T R AT E G I C , R O B U S T A B I L I T Y T O I N C U B AT E W I N N I N G O R G A N I Z AT I O N I N N O VAT I O N P I P E L I N E A N D S C A L E I N N O VAT I O N A N D C U LT U R E Clarity
Slide 99: Resources Focused On Higher Value Pipeline Projects
Resources Have Been Focused On Higher Value Pipeline Projects To Drive Greater Efficiency And Productivity Number of Global New Product Projects 400 350 300 • Higher innovation thresholds reduced new 250 product pipeline complexity by 26% 200 • 91% of our New Product Pipeline now 150 oriented to our
Slide 100: Pipeline Primed To Deliver Accelerated Growth
The Pipeline Is Primed To Deliver Accelerated Growth With Significant Close-in Opportunity Incremental Adjacent Transformational 100 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 101: Global Rx-to-OTC Switch Pipeline Revitalized
The Global Rx-to-OTC Switch Pipeline Has Been Revitalized, Bringing Broad Transformational Innovation Opportunity1,2,3 Perrigo Brand +++ Perrigo will be ready to fast-follow National Brand Switches: Store Brand 2022 2027+ 1. Source: Public references to the potential of products to switch from Rx-to
Slide 102: Progress With Ingredient And Technology Platforms Such As CBD
Additionally, We Are Making Progress With Key Ingredient And Technology Platforms Such As Our Investments In High Quality CBD Ingredient Quality Standard Reached First Cosmetic Executions In The Pipeline Science Skin Based Care Naturals Invested significantly in cGMP infrastructure and reliable supp
Slide 103: Winning Organization And Culture
And We’ve Built A Winning Organization And Culture Critical To A Sustained And Successful Effort Michelle Bateson Inga Koehler VP CSCA R&D and VP CSCI Regulatory Scientific Affairs Affairs Joined October 2022 Joined October 2021 (previously Haleon) (previously Pfizer) Sharon Goodall Valerie Gallaghe
Slide 104: Jim Dillard
Jim Dillard EVP & President, Consumer Self-Care Americas
Slide 105: eCommerce Projected To Grow To More Than $900M By 2025
Perrigo Has Been Investing In eCommerce, Which Is Now Projected To Grow To More Than $900M By 2025 Key Investment Areas Projected eCommerce Net Sales • Evolution of technology & tools to enhance consumer experience • Amazon strategic growth initiatives and activities • Channel diversification and gr
Slide 106: Investing In Advanced Digital Capabilities Globally
And, We Are Now Investing In Advanced Digital Capabilities Globally 2022 2023 2024 2025 LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 Nascent Developing Intermediate Advanced Master Developed Retail.com growth A+ Content strategies; Multidimensional Website Amazon Growth Development Segmentation of segmen
Slide 107: Optimized Growth Framework Drives Accelerated Organic Growth
In Summary, With This Optimized Growth Framework, We Are Confident In Our Ability To Drive Accelerated Organic Growth Without Additional M&A Strategic OTC Science Based Naturals Pillars Oral Care Women’s Health Nutrition Skin Care Enablers Global Marketing Innovation eComm / Digital 107 Perrigo - St
Slide 108: Ron Janish
Ron Janish EVP of Global Operations & Supply Chain
Slide 109: Answering These Key Questions Informs Strategic Direction
Answering These Key Questions Informs Perrigo’s Strategic Direction Key Strategic Questions Can Perrigo compete effectively with the new, pure-play self-care companies? Can Perrigo continue to reliably grow organic revenue at 3%+ over the long-term? Can Perrigo achieve & sustain 40%+ adj. gross marg
Slide 110: Broad Set Of Tools To Rebuild Adjusted Gross Margin
Perrigo Is Utilizing A Broad Set Of Tools To Continue To Rebuild Adjusted Gross Margin Global Supply HRA & Infant Formula Pricing & Supply 1 2 3 Chain Reinvention Acquisitions Chain Normalization • Transformation underway, • HRA and Gateway & U.S. & • Carry-over pricing to with workstreams Canadian
Slide 111: $200M-$300M Adj. OI Opportunity From Supply Chain Reinvention
We Have Identified A $200M - $300M1 Adj. OI Opportunity By Reinventing Our Global Supply Chain Over Next 5 Years Perrigo’s Supply Chain Reinvention Program 1 2 3 4 Winning Planning Sourcing Manufacturing Portfolio Evolution Optimization Optimization Reducing portfolio Improving Integrated Diversifyi
Slide 112: $150M-$200M Realized By End Of 2025
Of Which, A Significant Portion, $150M - $200M1, Can Be Realized By The End Of 2025 2022 2023 2024 2025 2026 2027 2028 1 Winning Portfolio 2 Planning Evolution 3 Sourcing Optimization 4 Manufacturing Optimization 4B Nutrition Asset Modernization (Nestle Gateway Asset) Full Potential Annualized $150M
Slide 113: Winning Portfolio Reduces Complexity And Increases Productivity
Winning Portfolio Will Reduce Overall Product Complexity & Increase Manufacturing Productivity, Relieve Pressure On Labor and Unlock Capacity Product changeovers are the largest drag on CSCA productivity: A single Perrigo store-brand product can be sold Reducing complexity will reduce in hundreds of
Slide 114: Consumers Do Not Consider Count Size, Packaging Or Flavor Important
OTC Consumers Do Not Consider Count Size, Packaging Or Flavor Important – All Drivers Of Perrigo Complexity Q: Is store brand product equivalency Over 60% say important or extremely important to national brands important in OTC? Q: What features are an important 1. Active ingredient 2. “Compare to”
Slide 115: Consumers Choose Store Brand Based On Value & NBE
We Need To Help Retailers Understand Consumers Choose Store Brand Based On Value & NBE, Not Uniqueness Vs. Other Retailers 1. Better value for the money for national brands Q: What are your criteria when selecting 2. Store brands that are equivalent to national brands a retailer for OTC purchases? 3
Slide 116: Complexity Can Be Reduced In CSCI SKUs
Complexity Can Also Be Reduced In CSCI, Where A Sizeable Portion Of SKU’s Are Not Contributing Real Profit CSCI: Proliferation of Low Margin SKUs Has Created Complexity 100% 1,500+ SKUs contribute only 1% of std. profit 50% 0% 0 1,000 2,000 3,000 4,000 5,000 116 Perrigo - Strategy Offsite v40 ... fo
Slide 117: Planning Evolution Can Address High Waste
Planning Evolution Can Address Unacceptably High Waste CSCA Example: Resources are being directed to produce and buy materials that get thrown away Key Focus Areas ~$60M/ year • Implementing a new, more robust forecast algorithm to reduce forecast error ~50% of waste addressable • Enhancing inventor
Slide 118: Planning Evolution Reduces Working Capital
Planning Evolution Will Also Drive An Additional Benefit Of A Reduction In Working Capital From Improved Forecasting & Planning CSCA Example: OTC working capital full potential upside of $40M Commentary • Full potential algorithm (13% - 23% error -$40M improvement) drives an ~18-day reduction in day
Slide 119: Gateway IF Acquisition Expands Capacity And Fortifies Supply
The Gateway IF Acquisition Expands Capacity and Fortifies Supply, With A $50M Adj. OI Benefit Anticipated In 2023 Infant Formula Network Infant Formula Manufacturing Capabilities • Multiple Formulations – Non-GE, Non-GMO, Organic, Kosher, Soy, Milk Based, EH • Flexible Packaging – Multiple Fill Weig
Slide 120: Enhanced Global Supply Chain Organization
An Enhanced Global Supply Chain Organization Has Been Put In Place To Deliver The Supply Chain Reinvention Roadmap New to Perrigo (last 12 months) Global Supply Chain New In Role VP Global VP SVP CSCA Supply SVP CSCI Supply VP Global VP Global Results VP Global Engineering & Clearwater/HRA Sr. Direc
Slide 121: Initiatives Expected To Recapture Adj. Gross Margin To ~40% By 2025
Combined, These Initiatives Are Expected to Recapture Adj. Gross Margin to ~40% by 2025; With Further Potential Improvement Post-2025 1 Global Supply 2 HRA & IF 3 Pricing & Supply Chain Reinvention Acquisition Chain Normalization ~40.0% 36.2% 121 Perrigo - Strategy Offsite v40 ... footer 1. See atta
Slide 122: Grainne Quinn
Grainne Quinn EVP & Chief Medical Officer
Slide 123: Answering These Key Questions Informs Strategic Direction
Answering These Key Questions Informs Perrigo’s Strategic Direction Key Strategic Questions Can Perrigo compete effectively with the new, pure-play self-care companies? Can Perrigo continue to reliably grow organic revenue at 3%+ over the long-term? Can Perrigo achieve & sustain 40%+ adj. gross marg
Slide 124: ESG Strategy Involves 4 Key Areas
Perrigo ESG Strategy Involves 4 Key Areas Of Our Business O PERATIONS & PACKAGING & C LIMATE P LASTICS S UPPLY P EOPLE C HAIN 124 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 125: Specific Goals The Entire Organization Is Committed To
With Specific Goals That The Entire Organization Is Committed To 1. Net-Zero greenhouse gas emissions by 2040 OPERATIONS & 2. Operate with 100% renewable electricity by 2026 CLIMATE 3. 42% greenhouse gas reduction by 2030 4. 10% reduction in energy, water & waste by 2026 (2020 baseline) 1. Achieve 8
Slide 126: Enhanced DEI Strategy Builds Culture Of Belonging
And, Our Enhanced DEI Strategy Will Help Us Build A Winning Culture Through ‘Belonging’ Our Goal for Belonging Ensuring all colleagues feel welcomed, valued, respected, heard, and desire to stay in our thriving, global community Build Manage Enable Leaders & Inclusive Mindsets Talent Equitably Embed
Slide 127: 2023 DEI Actions
2023 DEI Actions Will Move Us from Awareness to Action at All Levels Grow & leverage our Business Inclusion Publish Perrigo’s 2nd DEI Groups (B-I-Gs) Annual Report 3 New B-I-Gs Launch in Q1’23 • LGBTQ+ • Women • Multicultural Integrate new value of Improve resources to Curiosity through global culti
Slide 128: Our ESG Guidepost Is The Feedback We Receive
And, Our ESG Guidepost Is The Feedback We Receive Recent Feedback on Our ESG Strategy “Perrigo punches above its weight class with ESG.” - Shareholder “We are communicating to the organization and to our consumers that we recognize the unique voice and perspective of women in - Perrigo Employee the
Slide 129: Eduardo Bezerra
Eduardo Bezerra EVP & Chief Financial Officer
Slide 130: Answering These Key Questions Informs Strategic Direction
Answering These Key Questions Informs Perrigo’s Strategic Direction Key Strategic Questions Can Perrigo compete effectively with the new, pure-play self-care companies? Can Perrigo continue to reliably grow organic revenue at 3%+ over the long-term? Can Perrigo achieve & sustain 40%+ adj. gross marg
Slide 131: Capital Allocation Priorities For 2023–2025 Are Shifting
Perrigo Capital Allocation Priorities For 2023 – 2025 Are Shifting Perrigo Capital Allocation Priorities 2019-2022 2023-2025 • Grow Dividend • Grow Dividend • Strategic M&A • Deleverage (pay down debt) • Reinvest in the Business • Reinvest in the Business • Opportunistic M&A 131 Perrigo - Strategy O
Slide 132: Committed To A Strong And Growing Dividend
As Always, Perrigo Remains Committed To A Strong And Growing Dividend Perrigo Historical Dividend Per Share Continued Dividend Growth in 2023 5% YoY Growth $1.04 $1.09 • 2023 dividend per share raised $0.96 5% to $1.09 per share $0.90 $0.76 $0.82 • Represents a dividend yield of $0.64 3.0%1 $0.58 $0
Slide 133: Priority Is To Pay Down Debt And Achieve <3.0x Leverage
Beyond Dividends, Perrigo’s Priority Is To Pay Down Debt And Achieve <3.0x Leverage By End Of 2025 Year End 2022 Committed to Leverage Reduction • Committed to repaying $700M notes that come due in 2024 Current Debt: $4.1B • Utilize balance sheet and cash flow generation to Current Cash: $0.6B oppor
Slide 134: Continued Investment In Infrastructure To Support Growth
Of Course, We Will Continue To Invest In Our Infrastructure To Support Our Key Growth Areas, As Needed Projected Capital Investments of $500M - $600M to Support Growth (2023 - 2025) Includes investments to support growth, Supply including innovation, Asset Chain automation & Reliability Reinvention
Slide 135: Cash Generation Expected To Fund Debt Reduction, Dividend And Growth
Cash Generation Expected To Fund Debt Reduction, A Strong Dividend And Growth Investments Perrigo Sources & Uses of Cash (2023-2025) $ millions $1.6B - $1.8B $1.7B - $1.8B $601M $500M - $600M Expected Cash Conversion of ~100%1 135 Perrigo - Strategy Offsite v40 ... footer 1. See attached Appendix fo
Slide 136: Answering These Key Questions Informs Strategic Direction
Answering These Key Questions Informs Perrigo’s Strategic Direction Key Strategic Questions Can Perrigo compete effectively with the new, pure-play self-care companies? Can Perrigo continue to reliably grow organic revenue at 3%+ over the long-term? Can Perrigo achieve & sustain 40%+ adj. gross marg
Slide 137: Translating Strategic Direction Into Shareholder Value
AGENDA Our Transformation Journey Lessons Learned & Strategic Questions From Our Journey Answers To Inform Perrigo’s Strategic Direction Translating Strategic Direction Into Shareholder Value Bringing It All Together For A Bright Perrigo Future
Slide 138: Delivering Financial Results & Building Shareholder Value
Delivering Financial Results & Building Shareholder Value Delivered strong top and bottom-line growth, along with 2022 >100% cash conversion1 Outperform the long-term growth algorithm of 3/5/7 via: 2023 - 2025 • Top-line growth • Full margin restoration/ growth • Deleveraging benefit to the bottom-l
Slide 139: Perrigo Exceeded Its 3/5/7 Algorithm In 2022
As Mentioned, Perrigo Exceeded Its Long-Term Algorithm Of 3/5/7 In 2022 Perrigo Q4 & Fiscal 2022 Financial Highlights1 (% change vs. year-ago) Cash Highlights: Net Sales Adjusted Operating Adjusted Diluted Income Growth EPS Growth Constant Currency Constant Currency Constant Currency USD USD USD Gro
Slide 140: Expect To Outperform Long-Term 3/5/7 Growth Algorithm
We Expect To Outperform Our Long-Term 3/5/7 Growth Algorithm Over The Next 3 Years Long-Term Growth Growth Target Long-term Growth Algorithm 2023 – 2025 Algorithm 2026+ Organic Net 3% Low-Mid Single Digit % 3% Sales Growth Adj. Operating 5% Mid-Teens % 5% Income Growth Adj. Diluted 7% Mid-High Teens
Slide 141: Adj. Gross Margin Returning To Near Pre-Covid Levels By 2025
Additionally, We Expect Strong 2022 Fundamentals To Continue, Returning Adj. Gross Margin To Near Pre-Covid Levels By 2025 Perrigo Toolbox • Strategic pricing actions Adjusted Gross Margin Target • Supply chain normalization • Benefit of acquisitions 20221 2025 (HRA and Gateway & GoodStart®) 36.2% ~
Slide 142: Adj. Operating Margin Expansion Target Of +300 To +500bps
Key Growth Initiatives Also Support Meaningful Adj. Operating Margin Expansion Target of +300bps to +500bps Adjusted Operating Margin Walk1 (2022 - 2025) ~1-3% 14% - 16% ~1% ~11% ~0-1% ~1% 142 Perrigo - Strategy Offsite v40 ... footer 1. See attached Appendix for reconciliation of Adjusted (Non-GAAP
Slide 143: Debt Reduction & Lower Interest Expense Enhance Adj. EPS Growth
While Debt Reduction & Lower Interest Expense Will Further Enhance Adj. EPS Growth (2023 - 2025) 2022 Act. Structure2 2023 Est. Structure3 2024 Target 2025 Structure4 Total Debt ~$4.1B ~$4.1B ~$3.4B Int. & ~$150M ~$180M ~$150M Other Exp $30M $30M Net Leverage 5.5x ~4.5x <3.0x Ratio 1. See attached A
Slide 144: Outperformance Of Long-Term Growth Algorithm Over Next 3 Years
Leading To Outperformance Of Our Long-Term 3/5/7 Growth Algorithm Over The Next 3 Years Long-Term Growth Growth Target Growth Drivers Algorithm 2023 – 2025 2023 – 2025 • Strategic pricing actions • Volume growth Organic Net • Innovation/eCommerce 3% Low-Mid Single Digit % • Market share gains Sales
Slide 145: Another Year Of Double-Digit Topline Growth In 2023
Expecting Another Year Of Double-Digit Topline Growth In 2023 Net Sales Growth Drivers (2022 - 2023) Organic Growth All-in Net 3% - 6% Sales Growth 7% - 11% $4.5B 145 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 146: Convert Topline Growth To 20%+ Adj. EPS Growth
And to Convert this Strong Topline Growth to 20%+ Adj. EPS Growth Adjusted EPS Growth Drivers1 (2022 - 2023) $2.66 - $2.88 $2.50 - $2.70 ($0.16 - $0.18) $2.07 146 Perrigo - Strategy Offsite v40 ... footer 1. See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts.
Slide 147: 2023 Adjusted EPS Guidance Quarterly Phasing
Adj. EPS Anticipated to Grow Double-Digits YoY and Expected to Follow a Similar Quarterly Trend as in 2022 2023 Adjusted EPS Guidance Quarterly Phasing1 Phasing Assumptions: • Advertising & 2H ~60% of full year $2.50 - $2.70 Promotional spend more heavily weighted to 1H • Higher employee costs in 1H
Slide 148: Expecting Strong Topline And Bottom Line Growth In 2023
In Closing, Expecting Strong Topline and Bottom Line Growth, Along With Margin Expansion, In 2023 2023 Guidance1,2 In Summary Target Amount • Acquisitions: HRA annualizes May 1, 2023; Gateway infant formula annualizes November 1, 2023 Reported Net Sales 7.0% - 11.0% • Divestitures: Latin American bu
Slide 149: Bringing It All Together For A Bright Perrigo Future
AGENDA Our Transformation Journey Lessons Learned & Strategic Questions From Our Journey Answers To Inform Perrigo’s Strategic Direction Translating Strategic Direction Into Shareholder Value Bringing It All Together For A Bright Perrigo Future
Slide 150: Murray Kessler
Murray Kessler President & Chief Executive Officer
Slide 151: Summary: A Clear Path To Outsized Growth
Summary: A Clear Path To Outsized Growth Executive Summary: Perrigo Strategic Plan Our Self-Care strategy and vision is correct We transformed the business, returning Perrigo to top-line growth External factors limited adj. OI growth, but we have learned and made adjustments We are uniquely position
Slide 152: Once Again, Perrigo Is A Compelling Value
Once Again, We Believe Perrigo Is A Compelling Value Org. Net Adj. (2) Op. Adj. Gross Div. Yield Rank Net Sales Adj. EPS NTM P/E (% chg. vs PY) Sales(2) Income (% chg. vs PY) Margin (2022 DPS / (% chg. vs PY) (% chg. vs PY) (bps chg. vs PY) current price) #1 TreeHouse(1) TreeHouse(1) Reckitt TreeHou
Slide 153: Perrigo Is Making Lives Better
And Most Importantly, Perrigo Is Making Lives Better! Our Vision To make lives better by bringing quality, affordable self-care products that consumers trust everywhere they are sold. 153 Perrigo - Strategy Offsite v40 ... footer BOS
Slide 154: Appendix: Table I
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2015 N
Slide 155: Appendix: Table I (Continued) – CSCA
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES APPENDIX SELECTED CONSOLIDATED AND SEGMENT INFORMATION (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Decembe
Slide 156: Appendix: Table I (Continued) – CSCI
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Decembe
Slide 157: Appendix: Table I (Continued) – Rx
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2019 December 31, 2018 December 31, 2015 Operating Operating Operating Rx Net Sales
Slide 158: Appendix: Table I (Continued)
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2018 December 31, 2015 Operating Operating Net Sales Net Sales Income Income (1) Adj
Slide 159: Appendix: Table II
TABLE II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended Consolidated Net Sales Growth December 31, 2022 December 31, 2021 Change Reported Net Sales $ 4,452 $ 4,139 8% Currency
Slide 160: Appendix: Table II (Continued)
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended Consolidated Cash Conversion December 31, 2022 Net cash from operating activities $ 307 Reported loss from c
Slide 161: Appendix: Table II (Continued)
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Full Year Twelve Months Ended 2023 Guidance December 31, 2022 December 31, 2021 EPS EPS EPS Reported $0.50 - $0.70 $ (0.97) $ (0
Slide 162: Appendix: Table III
TABLE III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) (1) Currency impact is calculated using the exchange rates used to translate our financial statements in 2018 to show what othe
Slide 163: Appendix: Table IV
TABLE IV PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) (1) Currency impact is calculated using the exchange rates used to translate our financial statements in the comparable prior ye
Slide 164: Appendix: Table IV (Continued)
TABLE IV (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Three Months Ended CSCA December 31, 2022 April 2, 2022 Change Reported Net Sales $ 766 $ 710 Gross Profit 232 173 A
Slide 165: Appendix: Table V
TABLE V PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) 2023 Net Sales Twelve Months Ended Net Sales Guidance (Mid-point) December 31, 2018 CAGR Store Branded - Reported $ 2,257 $ 2,248
Slide 166: Appendix: Table V (Continued)
TABLE V (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED AND SEGMENT INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended Net Sales December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 20
Slide 167: Appendix: Table VI
TABLE VI PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 Net Sales - Reported $ 4,452 $
Slide 168: Appendix: Table VII
TABLE VII PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2022 December 31, 2021 Reported income (loss) from continuing operations $ (131) $ (131) Income tax expens