Organon & Co. · NYSE:OGN
Organon & — Q3 2021 Earnings Presentation
23 slides from Organon &'s earnings presentation, Nov 10, 2021
Slide 1: Organon Q3 2021 Earnings
Organon Q3 2021 Earnings if: ORGANON’”
Slide 2: Disclaimer statement
Disclaimer statement This text should be viewed in conjunction with Organon’s Q3 2021 earnings call Safe Harbor for Forward-Looking Statements Except for the historical information herein, this presentation of Organon & Co. (the “company”) includes “forward-looking statements” within the meaning of
Slide 3: Disclaimer statement, cont.
Disclaimer statement, cont. Non-GAAP Information This presentation includes information based on financial measures that are not recognized under generally accepted accounting principles in the United States (“GAAP”), such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Sh
Slide 4: Third quarter 2021 highlights
Third quarter 2021 highlights • Organon's first independent full quarter • July 2021, Organon and ObsEva enter licensing agreement on investigational ebopiprant • Declared inaugural dividend Q3 2021 • $1,600 million Revenue • $636 million Adjusted EBITDA(1) • $1.67 Adjusted EPS(1) from continuing op
Slide 5: Business development underway
Business development underway Proposed acquisition of Endometriosis Forendo Affects up to 170 million patients, or up to November 2021 10% of women of reproductive age Licensing of investigational Pre-term labor ebopiprant 15 million babies (11.1% of all live July 2021 births) born pre-term every ye
Slide 6: Broad and diverse portfolio
Broad and diverse portfolio Women’s Health Biosimilars Established Brands ™ ® Number of products 11 5 49 6
Slide 7: Geographic revenue performance
Geographic revenue performance Actual Ex FX $ mil Q3-21 Q3-20 VPY VPY Europe and Canada 410 426 (4)% (7)% United States 346 371 (7)% (7)% Asia Pacific and Japan 287 354 (19)% (19)% ~75% of sales China 252 225 12% 4% generated Latin America, Middle East, ex-US 238 228 4% 3% Russia and Africa Other (1
Slide 8: Q3 Revenue bridge
Q3 Revenue bridge -1% reported -3% ex-FX $ mil 1,613 1,600 ~70 ~35 ~50 ~60 ~20 ~75 ~20 Q3 2020 LOE China VBP Price COVID-19 Volume Other* FX Q3 2021 (*) Other Includes manufacturing sales to Merck and third parties 8
Slide 9: Women's Health
Women’s Health • Nexplanon® lapping strong Q3 2020 comp; double digit Q4 growth expected • Executing on BD strategy in WH • Strong growth in fertility Women’s Ex FX 2021 2020 Ex FX Revenues $ mil Q3-21 Q3-20 Act VPY Act VPY Health VPY YTD YTD VPY Nexplanon® 175 189 (7)% (8)% 543 515 5% 4% Follistim®
Slide 10: Biosimilars
Biosimilars • Renflexis® – continues to grow 4 years post launch • Ontruzant® – timing related favorability • Hadlima™ – launched ex-US in Q2 Biosimilars Revenues $ mil Q3-21 Q3-20 Act VPY Ex FX 2021 2020 Act VPY Ex FX VPY YTD YTD VPY Renflexis® 54 38 44% 43% 136 96 41% 39% Ontruzant® 56 37 48% 47%
Slide 11: Established brands
Established brands • Limited LOE headwinds going forward • China retail growth up 20% helping to offset VBP • Volume excluding the impact of LOE is flat to 2020 Established Ex FX 2021 2020 Ex FX Revenues $ mil Q3-21 Q3-20 Act VPY Act VPY Brands VPY YTD YTD VPY Cardiovascular 397 439 (9)% (11)% 1,217
Slide 12: Q3 and YTD 2021
Q3 and YTD 2021 $ mil (except EPS) Q3-21 Q3-20 Actual VPY 2021 YTD 2020 YTD Actual VPY Revenue 1,600 1,613 (1)% 4,701 4,919 (4)% Cost of Goods Sold 609 535 14% 1,783 1,533 16% Gross profit 991 1,078 (8)% 2,918 3,386 (14)% Gross margin 61.9% 66.8% 62.1% 68.8% Non-GAAP Adjusted Gross profit(1) 1,038 1
Slide 13: 3rd Quarter Balance Sheet/Cash Flow and Metrics
3rd Quarter Balance Sheet/Cash Flow and Metrics $ mil September 30, 2021 Cash and Cash Equivalents $1,008 Gross Debt 9,298 Net Debt 8,290 Q2 YTD Q3 YTD Net Cash Provided by Operating Activities 1,745 2,113 Capital Expenditures 97 133 Free Cash Flow 1,648 1,980 Between June 30, 2021, and Sept 30, 202
Slide 14: Revenue drivers consistent with prior guidance
Revenue drivers consistent with prior guidance $billions $6.6 (1) (0.3) – (0.4) (0.2) +0.2 $6.2 – $6.3 (1) (0.1) – (0.2) +0.1 - +0.2 0.0 2020 LOE China Price COVID-19 Performance FX impact (2) 2021 E Actuals VBP (1) Reflects full-year pro forma revenue for both 2020 & 2021 including other revenues,
Slide 15: Affirming full year 2021 proforma guidance
Affirming full year 2021 proforma guidance Non-GAAP, proforma as if OGN Prior Guidance Revised Guidance was standalone Jan 1, 2021 November 11, 2021 Revenue $6.1B - $6.4B $6.2B -$6.3B Gross Margin (*) Low to mid-60% range No change SG&A as % of revenue (*) Mid-20% range No change R&D as % of revenue
Slide 16: Q&A
Q&A O “i ORGANON’
Slide 17: Appendix
Appendix O “i ORGANON’
Slide 18: Third quarter and YTD revenue
Third quarter and YTD revenue Actual Ex FX 2021 2020 Actual Ex FX $ mil Q3-21 Q3-20 VPY VPY YTD YTD VPY VPY Women’s Health 381 424 (10)% (11)% 1,197 1,164 3% 1% Biosimilars 140 99 41% 39% 306 227 35% 30% Est. Brands 1,027 1,088 (6)% (8)% 3,030 3,478 (13)% (17)% Other(1) 52 2 NM NM 168 50 NM NM Total
Slide 19: Gross margin reconciliation
Gross margin reconciliation $ mil Q3-21 Q3-20 2021 YTD 2020 YTD Revenue 1,600 1,613 4,701 4,919 Cost of Goods Sold 609 535 1,783 1,533 Gross Profit 991 1,078 2,918 3,386 Gross Margin 61.9% 66.8% 62.1% 68.8% Amortization 27 23 69 65 One-time costs(1) 17 — 27 — Stock-based compensation 3 5 8 14 Non-GA
Slide 20: Net Income to Adjusted EBITDA reconciliation
Net Income to Adjusted EBITDA reconciliation $ mil Q3-21 Q3-20 Net income from continuing operations before income tax 389 681 Depreciation 25 17 Amortization(1) 27 23 Interest expense 98 — EBITDA 539 721 Restructuring costs 1 12 One-time costs(2) 56 7 Acquired in-process research and development(3)
Slide 21: Net Income to Adjusted EBITDA reconciliation
Net Income to Adjusted EBITDA reconciliation $ mil 2021 YTD 2020 YTD Net income from continuing operations before income tax 1,293 2,227 Depreciation 64 42 Amortization(1) 69 65 Interest expense 160 — EBITDA 1,586 2,334 Restructuring costs 3 43 One-time costs(2) 171 30 Acquired in-process research a
Slide 22: Net Income to Adjusted Net Income reconciliation
Net Income to Adjusted Net Income reconciliation $ mil (except EPS) Q3-21 Q3-20 Net income from continuing operations before income tax 389 681 Amortization(1) 27 23 Restructuring costs 1 12 One-time costs(2) 56 7 Acquired in-process research and development(3) 25 — Stock-based compensation 15 11 To
Slide 23: Net Income to Adjusted Net Income reconciliation
Net Income to Adjusted Net Income reconciliation $ mil (except EPS) 2021 YTD 2020 YTD Net income from continuing operations before income tax 1,293 2,227 Amortization(1) 69 65 Restructuring costs 3 43 One-time costs(2) 171 30 Acquired in-process research and development(3) 25 — Stock-based compensat