Perrigo Company Plc · NYSE:PRGO
Perrigo — Q1 2021 Earnings Presentation
34 slides from Perrigo's earnings presentation, May 11, 2021
Slide 1: First Quarter 2021 Financial Results
First Quarter 2021 Financial Results May 11, 2021
Slide 2: Bradley Joseph, VP Investor Relations and Corporate Communications
Bradley Joseph, VP Investor Relations and 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 the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels o
Slide 4: Murray S. Kessler, President & CEO
Murray S. Kessler, President & CEO
Slide 5: Our Aggressive Plan to Transform from a Healthcare Company to a Consumer Self-Care Company
Our Aggressive Plan to Transform from a Healthcare Company to a Consumer Self-Care Company… To make lives better by bringing Quality, Affordable Self-Care Products that consumers trust everywhere they are sold. 5
Slide 6: Transformation Started Two Years Ago, Nearing Completion One Year Ahead of Schedule
That Started Two Years Ago, is Now Nearing Completion 1 Year Ahead of Schedule Portfolio Businesses Uncertainty Revitalized & Poised to Build Value Reconfigured Returned to Growth Being Reduced • Selling Generic Rx • Built $500MM New Product • Dialogue Opened with Irish • Perrigo now a Focused CPG P
Slide 7: As Expected, Q1:21 Results Down Due to Two COVID-19 Driven Reasons
As Expected, Q1:21 Results Down Due to Two COVID-19 Driven Reasons Perrigo Performance Financial Highlights ✓ Organic net sales down 10.9% - impacted by: Net Sales $1.01B 1. an estimated -6.8 percentage YoY % Change -6.8% points from pandemic-related pantry load benefit last year, and Adjusted Opera
Slide 8: Entire Quarterly Decline Occurred in March
Entire Quarterly Decline Occurred in March As We Lapped 2020 COVID-19 Related Demand Surge Perrigo Net Sales % Change Versus Year Ago 2021 2020 January/February +3.8% +9.5% COVID Demand Surge Impact March -23.4% +28.5% Q1 -6.8% +16.2% 8
Slide 9: Business Remains Strong: 2-Yr Net Sales CAGR +4.1%
Importantly, Business Remains Strong As Evidenced by 2-Yr Net Sales CAGR +4.1%, Even With Historically Weak Cough/Cold Season PERRIGO NET SALES Reported Net Sales 2-Yr +4.1% 2-Year CAGR CAGR Consumer +4.1% $163 $69 Cough/Cold Impact -4.5% $ millions $134 $941 Consumer $920 Ex-Cough/Cold +8.6% $799 O
Slide 10: Q1 Impacted by Cold/Cough; CSCA and CSCI 2-yr Net Sales CAGRs
Q1 Impacted by Cold/Cough & Prior Year Demand Surge; 2-yr Net Sales CAGRs Strong: CSCA +4.9% and CSCI +2.6% CSCA CSCI -8.6% Reported NS Growth -3.4% Reported NS Growth Q1YoY Q1YoY -11.8% Organic -9.1% Organic Reported Net Sales Reported Net Sales Growth 2-Yr CAGR Growth 2-Yr CAGR CSCA +4.9% CSCI +2.
Slide 11: Weak Cough/Cold Result of Record Low Flu Levels
While Weak Cough/Cold Was The Result Of Record Low Flu Levels in the U.S. and Europe Due To COVID-19 Related Lock-downs… U.S. Flu Activity* E.U. Flu Activity** ADULT FLU Weekly Incidence 5M Weekly Incidence 4M Illness 60% 3M Down 2M ~98%50%YoY 1M M 40% 30% 2018-2019 2019-2020 2020-2021 20% PEDIATRIC
Slide 12: IQVIA Predicting Elevated Cough/Cold Heading into Spring/Summer
That Is Not Expected To Continue; IQVIA FAN Data Predicting Elevated Cough/Cold Heading into Spring/Summer All Ages 2020/2021 Cough Cold Season Trend Millions 45 40 2020-2021 35 Affected Population in millions 30 2019-2020 25 2018-2019 20 3-Year Average 15 Projection (High) 10 Projection (Medium) 5
Slide 13: IQVIA Estimates Normalized 2021/22 Season
In Fact, IQVIA Estimates ‘Normalized’ 2021/22 Season; Perrigo Estimates Partial Recovery, Which Supports Strong 2021 Second Half Estimates 50,000,000 2019/20 2020/21 2021/22 Cough/Cold Cough/Cold Cough/Cold Season 45,000,000 Season Season Projection 40,000,000 35,000,000 30,000,000 25,000,000 20,000
Slide 14: 2021 New Product Launches Support Strong Second Half Forecasts
Perrigo 2021 New Product Launches Also Support Strong Second Half Forecasts CORE OTC ORAL CARE BURT’S BEES® Licensing Agreement • Offer a comprehensive line of organic baby formulas and NUTRITION innovative nature-based remedies under the iconic Burt’s Bees® brand • Combines Perrigo’s R&D, NRT regul
Slide 15: H2 Operating Income More Heavily Weighted, Back to Normal Phasing
While H2 Operating Income is More Heavily Weighted, This Reflects ‘Back to Normal’ Pre-COVID-19 Earnings Phasing Other Phasing Adjusted Operating Income Phasing Considerations • Perrigo estimating 2021/22 H1 H2 Cough/Cold Illnesses will be Between Normal 2019/20 and 2019 Actual 44% 56% Historically
Slide 16: Perrigo is Reaffirming its Guidance from Continuing Operations
Therefore, Perrigo is Reaffirming its Guidance from Continuing Operations Adjusted EPS Upside with ~$2B in Guidance Range: $2.50 Cash on Hand After Rx to $2.70, +7% YoY Transaction Close • +5% Adjusted Operating Income Growth vs. • Disciplined M&A 2020 • De-lever Balance Sheet • 2021 Adjusted Effect
Slide 17: Perrigo Transformed – A Growing, Pure-Play Consumer Self-Care Company
Perrigo Transformed – A Growing, Pure-Play Consumer Self-Care Company with Significant Upside Optionality • Focused, pure-play consumer company • Strong balance sheet with ~$2B in pro forma cash • Making progress with reducing uncertainty • Highly defensible business model • Differentiated in the ma
Slide 18: Ray Silcock, EVP & CFO
Ray Silcock, EVP & CFO
Slide 19: Continuing Operations Summary – Q1:2021
Continuing Operations Summary – Q1:2021 Consolidated Restructuring, Impairment 3 Months Ending April 3, 2021 Charges, and Income from Other continuing Income from Diluted (in millions, except per share amounts) DSG&A Operating Operating Interest operations before Income Tax continuing Earnings per (
Slide 20: Perrigo – Q1 2021
Perrigo – Q1 2021 Q1 YoY $ Organic % Perrigo 2021 Change Change Net Sales $1.0B ($73M) (10.9%) Adjusted Gross Profit $392M ($24M) Adjusted Gross Margin % 38.8% 40 bps Adjusted Operating Income $118M ($33M) Adjusted Operating Margin % 11.7% (230) bps 1. Organic net sales growth excludes the effects o
Slide 21: CSC Americas – Q1 2021
CSC Americas – Q1 2021 Q1 YoY $ Organic % CSC Americas 2021 Change Change Net Sales $641M ($60M) (11.8%) Adjusted Gross Profit $201M ($19M) Adjusted Gross Margin % 31.4% Flat Adjusted Operating Income $111M ($27M) Adjusted Operating Margin % 17.3% (230) bps 1. Organic net sales growth excludes the e
Slide 22: CSC International – Q1 2021
CSC International – Q1 2021 Q1 YoY $ Organic % CSC International 2021 Change Change Net Sales $370M ($13M) (9.2%) Adjusted Gross Profit $191M ($6M) Adjusted Gross Margin % 51.6% 30 bps Adjusted Operating Income $60M ($4M) Adjusted Operating Margin % 16.3% (40) bps 1. Organic net sales growth exclude
Slide 23: Balance Sheet and Liquidity Remain Strong
Balance Sheet and Liquidity Remain Strong Select Balance Sheet & Liquidity Measures 4/3/2021 12/31/2020 Total Company Cash & Cash Equivalents $481M $642M Total Debt $3.6B $3.6B Net Debt $3.1B $2.9B 23
Slide 24: To make lives better by bringing Quality, Affordable Self-Care Products
To make lives better by bringing Quality, Affordable Self-Care Products that consumers trust everywhere they are sold
Slide 25: Table I: Reconciliation of Non-GAAP Measures
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION APPENDIX (in millions, except per share amounts) (unaudited) Three Months Ended April 3, 2021 Restructuring, Impairment Charges, and Income Diluted Other Income from Earnings Net Gross R&D DSG&A Operati
Slide 26: Table I (Continued): Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended March 28, 2020 Interest, Income Other, and from Diluted Change in Income continuing Earnings Net Gross R&D DSG&A Operat
Slide 27: Table II: Reconciliation of Non-GAAP Measures, Segment Information
TABLE II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Three Months Ended Three Months Ended April 3, 2021 March 28, 2020 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Consumer Self-Care Americas Sales Profit Expense Expe
Slide 28: Table II (Continued): Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Six Months Ended June 29, December 31, June 27, December 31, Consolidated Continuing Operations Operating Income 2019 2019 2020 2020 Repo
Slide 29: Table III: Adjusted Net Sales Growth, Selected Segments
TABLE III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended April 3, March 28, Total FX Constant 2021 2020 Change Change Currency Change Reported Net sales Consolidated Continuing Operations $ 1,010.0 $
Slide 30: Table III (Continued): Adjusted Net Sales Growth
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended March 30, April 3, 2019-2021 2019 2021 Change 2019-2021 CAGR Reported Net sales Consolidated Continuing Operations $ 932.6 $ 1,010.
Slide 31: Table III (Continued): Adjusted Net Sales Growth
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended March 30, April 3, 2019-2021 2019 2021 Change 2019-2021 CAGR Reported Net sales CSCA $ 581.8 $ 640.5 $ 58.7 4.9% Less: Cough, cold,
Slide 32: Table III (Continued): Adjusted Net Sales Growth, Constant Currency
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Adjusted Net Sales - Constant Currency Twelve Months Ended Adjusted Constant December 31, December 31, December 31, December 31, Currency 2015-2018 20
Slide 33: Table IV: Reconciliation of Non-GAAP Measures
TABLE IV PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) Three Months Ended April 3, March 28, Total 2021 2020 Change Consolidated Continuing Operations adjusted EPS $ 0.50 $ 0.67 (25.4)% Adjusted gross profit CSCI $ 190.8 $ 196.5 (2.9)% Ad
Slide 34: Table V: Reported Net Sales by Product Category
TABLE V PERRIGO COMPANY PLC REPORTED NET SALES BY PRODUCT CATEGORY (in millions) (unaudited) Three Months Ended April 3, March 28, 2021 2020 CSCA(1) Upper respiratory $ 114.0 $ 154.6 Digestive health 113.5 106.9 Pain and sleep-aids 92.4 120.4 Nutrition 92.0 102.2 Healthy lifestyle 75.5 85.8 Oral sel