Johnson & Johnson · NYSE:JNJ
Johnson & Johnson — Q4 2020 Earnings Presentation
38 slides from Johnson & Johnson's earnings presentation, Jan 26, 2021
Slide 1: Diluted Earnings Per Share
Diluted Earnings Per Share Decreased Decreased -w $5.51 | (2.1)x $8.03 Adjusted Diluted Earnings Per Sharo* (7.5)% “Our notable full year performance reflects the continued confidence from patients, physicians, customers and ‘consumers in our life-enhancing products and medicines, particularly throu
Slide 2: 4th Quarter 2020 Earnings Call
th 4 Quarter 2020 Earnings Call January 26, 2021
Slide 3: Cautionary Note on Forward-looking Statements
Cautionary Note on Forward-looking Statements This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strate
Slide 4: Strategic Partnerships, Collaborations & Licensing Arrangements
Strategic Partnerships, Collaborations & Licensing Arrangements During the course of this morning’s presentation, we will discuss a number of products and compounds developed in collaboration with strategic partners or licensed from other companies. The following is an acknowledgement of those relat
Slide 5: Agenda
Agenda 1 Enterprise Highlights 2 Sales Performance and Earnings Review 3 Capital Allocation and Guidance 4 Q&A Alex Gorsky Joseph J. Wolk Chris DelOrefice Chairman and Executive Vice President, Vice President, Chief Executive Officer Chief Financial Officer Investor Relations 5
Slide 6: Alex Gorsky
4TH QUARTER 2020 EARNINGS Alex Gorsky Chairman and Chief Executive Officer
Slide 7: Our Credo
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Slide 8: Good health is pivotal to our safety, security and prosperity
Good health is pivotal to our safety, security and prosperity as a society.
Slide 9: 9
9
Slide 10: Execution Innovation People
Execution Innovation People 10
Slide 11: 28 Platforms/Products with over $1B in Annual Sales in 2020
Execution 28 Platforms/Products with over $1B in Annual Sales in 2020 $1B+ Platforms/Products (16) $2B+ Platforms/Products (12) Vision Surgical* Energy Contact Lens Knees Hips Spine Trauma Wound Closure * Endocutters Biosurgicals Electrophysiology *Sales > $1B adjusted for the estimated impact of CO
Slide 12: Innovation
Innovation Unparalleled scientific expertise allows us to create life enhancing innovation.
Slide 13: People
People We are powered by our people, purpose and values system. 13
Slide 14: Goluenafoluuen
Goluenafoluuen
Slide 15: 4th Quarter 2020 Sales
4th Quarter 2020 Sales % CHANGE Dollars in Billions Regional Sales Results Q4 2020 Q4 2019 Reported Operational1 U.S. $11.8 $10.8 9.6% 9.6% Europe 5.3 4.7 13.0 7.7 Western Hemisphere 1.4 1.5 (6.1) 2.9 (ex U.S.) Asia-Pacific, Africa 4.0 3.8 4.6 0.7 International 10.7 10.0 7.0 4.3 Worldwide (WW) $22.5
Slide 16: 4th Quarter 2020 Financial Highlights
4th Quarter 2020 Financial Highlights Dollars in Billions, except EPS Reported %; Operational %1 Sales GAAP Earnings GAAP EPS $22.5 $20.7 $4.0 $1.50 $1.7 $0.65 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 8.3%; 7.1%1 (56.7)% (56.7)% Adjusted Earnings2 Adjusted EPS2 $5.0 $5.0 $1.88 $1.86 Q4 2020 Q
Slide 17: Full Year 2020 Sales
Full Year 2020 Sales % CHANGE Dollars in Billions Regional Sales Results 2020 2019 Reported Operational1 U.S. $43.1 $42.1 2.5% 2.5% Europe 19.0 18.5 2.8 2.0 Western Hemisphere 5.3 5.9 (10.2) 0.4 (ex U.S.) Asia-Pacific, Africa 15.1 15.6 (2.7) (3.1) International 39.5 40.0 (1.3) (0.2) Worldwide (WW) $
Slide 18: Full Year 2020 Financial Highlights
Full Year 2020 Financial Highlights Dollars in Billions, except EPS Reported %; Operational %1 Sales GAAP Earnings GAAP EPS $82.6 $82.1 $5.63 $15.1 $5.51 $14.7 2020 2019 2020 2019 2020 2019 0.6%; 1.2%1 (2.7)% (2.1)% Adjusted Earnings2 Adjusted EPS2 $23.3 $8.68 $21.4 $8.03 2020 2019 2020 2019 (8.1)%
Slide 19: Consumer Health Highlights – 4th Quarter 2020
Consumer Health Highlights – 4th Quarter 2020 Solid performance driven by Oral Care, Wound Care and recovery in Skin Health/Beauty Reported: WW 1.4%, U.S. 2.7%, Int’l 0.5% Key Drivers of Operational Performance1 • U.S. flat due to share and e-commerce/club channel growth across multiple brands Opera
Slide 20: Pharmaceutical Highlights – 4th Quarter 2020
Pharmaceutical Highlights – 4th Quarter 2020 Robust above-market performance driven by double-digit growth in 8 key products Reported: WW 16.3%, U.S. 15.3%, Int’l 17.7% Key Drivers of Operational Performance1 Operational1: WW 14.6%, U.S. 15.3%, Int’l 13.5% • Growth driven by strong uptake of STELARA
Slide 21: Medical Devices Highlights – 4th Quarter 2020
Medical Devices Highlights – 4th Quarter 2020 Decline driven by negative impact of COVID-19, partially offset by double digit growth in Interventional Solutions Key Drivers of Operational Performance1 Reported: WW (0.7)%, U.S. 1.5%, Int’l (2.6)% Interventional • Double-digit growth driven by atrial
Slide 22: Condensed Consolidated Statement of Earnings
Condensed Consolidated Statement of Earnings 4th Quarter 2020 2020 2019 % Increase (Unaudited; Dollar and Shares in Millions Except Per Share Figures) Amount % to Sales Amount % to Sales (Decrease) Sales to customers $22,475 100.0 $20,747 100.0 8.3 Cost of products sold 7,814 34.8 7,134 34.4 9.5 Gro
Slide 23: Adjusted Income Before Tax by Segment
Adjusted Income Before Tax by Segment1 4th Quarter 2020 % to Sales $5.6B $5.6B 4Q 2020 4Q 2019 Pharmaceutical 32.9% 33.8% Medical Devices 16.5% 25.5% $4.0 $3.6 Consumer Health 22.5% 18.2% Total 24.9% 27.1% $1.1 $1.7 Pharmaceutical Medical Devices $0.8 $0.6 Consumer Health ($0.3) ($0.3) 2 2020 2019 E
Slide 24: Condensed Consolidated Statement of Earnings
Condensed Consolidated Statement of Earnings Full Year 2020 2020 2019 % Increase (Unaudited; Dollar and Shares in Millions Except Per Share Figures) Amount % to Sales Amount % to Sales (Decrease) Sales to customers $82,584 100.0 $82,059 100.0 0.6 Cost of products sold 28,427 34.4 27,556 33.6 3.2 Gro
Slide 25: Adjusted Income Before Tax by Segment
Adjusted Income Before Tax by Segment1 Full Year 2020 % to Sales $28.2B YTD 2020 YTD 2019 $25.4B Pharmaceutical 42.0% 40.0% $16.9 Medical Devices 17.0% 35.4% Consumer Health 23.8% 21.4% $19.1 Total 30.8% 34.4% $9.2 Pharmaceutical $3.9 Medical Devices* $3.3 $3.0 Consumer Health ($0.9) ($0.8) 2 Expens
Slide 26: Notable New Announcements in 4th Quarter 2020
th Notable New Announcements in 4 Quarter 20201 Pharmaceuticals • Regulatory Approvals: – DARZALEX FASPRO (daratumumab and hyaluronidase-fihj) - Becomes the First FDA-Approved Treatment for Patients with Newly Diagnosed Light Chain (AL) Amyloidosis2 – CABENUVA (rilpivirine/cabotegravir) - U.S. FDA A
Slide 27: Business Review: Save the Date
Save the Date Business Review …Highlighting Pharmaceutical Pipeline and Capabilities Thursday, November 18, 2021
Slide 28: Joseph J. Wolk
Joseph J. Wolk Executive Vice President, Chief Financial Officer
Slide 29: Capital Allocation Strategy
Capital Allocation Strategy Dollars in Billions Q4 2020 Cash and Marketable Capital Allocation $25.0 Securities HIGHER PRIORITY Debt ($35.0) Organic growth business needs Net Debt ($10.0) Free cash flow1 Free Cash Flow2 ~$20.0 Note: values may have been rounded 2020: Competitive dividends Investment
Slide 30: 2021 Sales Guidance
2021 Sales Guidance Assumptions and Outlook • Stabilization of unemployment levels • Tax based on current regulations • Reduced levels of COVID-19 restrictions; • Pharm net price decreases similar to procedures largely permissible throughout year recent trends January Comments Adjusted Operational S
Slide 31: 2021 EPS Guidance
1 2021 EPS Guidance Adjusted Adjusted Operational2,4 Reported3,4 $9.25 - $9.45 $9.40 - $9.60 15.2% - 17.7% 17.1% - 19.6% ~ ~ ~ $9.35 $9.50 ~ $8.03 2020 Adjusted Sales Ops Net Income Margin Momenta Dilution 2021 Adjusted Currency3 2021 Adjusted Reported EPS Growth Improvement Operational EPS Reported
Slide 32: 2021 Guidance
2021 Guidance January Comments Adjusted Operational Sales1,2 8.0% - 9.5% Midpoint of 8.8% $88.8B - $90.0B Operational Sales2 7.5% – 9.0% Net Impact Acq./Div: ~-0.5% $90.5B - $91.7B Estimated Reported Sales 3 9.5% – 11.0% FX $1.7B or +2.0% impact Adjusted Pre-Tax Sales leverage including MD procedure
Slide 33: 2021 Segment Outlook & Quarterly Sales Phasing
2021 Segment Outlook & Quarterly Sales Phasing* Illustration intended to visualize quarterly phasing; Chart not to scale Enterprise Pharmaceutical Medical Devices Consumer Health Operational Sales Growth vs. 2020 Q1 2021 Q2 2021 2H 2021 Segment Full Year Considerations Quarterly Sales Phasing and Co
Slide 34: Q&A
Q&A Alex Gorsky Joseph J. Wolk Chris DelOrefice Chairman and Executive Vice President, Vice President, Chief Executive Officer Chief Financial Officer Investor Relations
Slide 35: Goluenafoluuen
Goluenafoluuen
Slide 36: Consumer Health Highlights – Full Year 2020
Consumer Health Highlights – Full Year 2020 Strong growth in OTC, Oral Care and Wound Care Reported: WW 1.1%, U.S. 9.0%, Int’l (4.6)% Key Drivers of Operational Performance1 Operational1: WW 3.0%, U.S. 9.0%, Int’l (1.3)% • Growth driven by U.S. COVID-19 enhanced demand for TYLENOL in the pain catego
Slide 37: Pharmaceutical Highlights – Full Year 2020
Pharmaceutical Highlights – Full Year 2020 Market leading performance despite the impacts of COVID-19 Reported: WW 8.0%, U.S. 7.8%, Int’l 8.3% Key Drivers of Operational Performance1 • Growth driven by strong uptake of STELARA in Crohn’s Disease and TREMFYA in Psoriasis, Operational1: WW 8.2%, U.S.
Slide 38: Medical Devices Highlights – Full Year 2020
Medical Devices Highlights – Full Year 2020 Decline driven by negative impacts of COVID-19 on Global Medical Device Markets Key Drivers of Operational Performance1 Reported: WW (11.6)%, U.S. (10.9)%, Int’l (12.2)% • Electrophysiology growth driven by Atrial Fibrillation share gains and market recove