Kenvue Inc. · NYSE:KVUE
Kenvue — Q1 2024 Earnings Presentation
42 slides from Kenvue's earnings presentation, May 7, 2024
Slide 1: Welcome
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Slide 2: First Quarter 2024 Earnings Results
First Quarter 2024 Earnings Results May 7, 2024 2
Slide 3: Introduction
Introduction Thibaut Mongon Paul Ruh Tina Romani Chief Executive Chief Financial Head of Investor Officer Officer Relations 3
Slide 4: 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, statements about management’s expectations of Kenvue’s future operating and financial performance, p
Slide 5: Q1 2024 Highlights
Q1 2024 Highlights $3.9B Net Sales 1.9% Organic growth1 60.2% Adjusted Gross Profit Margin1 $0.28 Adjusted Diluted Earnings per Share1 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules to this presentation and to the earnings rel
Slide 6: 2024 Strategic Priorities: Our 15 Priority Brands
2024 Strategic Our 15 Priority Brands Priorities 6
Slide 7: Q1 2024 Organic growth
Q1 2024 Organic growth1 1.9% Organic growth on top of 11.2% growth in prior year Self Care Skin Health Essential Delivered & Beauty Health another strong Began executing Continued quarter of actions to momentum as Organic growth1 stabilize strong product with global business in U.S. innovation share
Slide 8: Our 5 Pillars to Reach More Consumers
Our 5 Pillars to Reach More Consumers 8
Slide 9: Self Care
Self Care Balanced portfolio continues to outperform the market 4.2% Organic growth1 Activation and innovation fuel growth 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules to this presentation and to the earnings release availab
Slide 10: Self Care: category leading innovation
Self Care Continues to launch category leading innovation 10
Slide 11: Self Care: Zyrtec
Self Care Zyrtec® building on category leadership ahead of the season 11
Slide 12: Self Care: strong performance outside the U.S.
Self Care Strong performance outside the U.S. 12
Slide 13: Essential Health
Essential Health Continued momentum as strategy to reach increased consumers and category expansion takes hold 4.9% Organic growth1 Led by Oral Care growth 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules to this presentation an
Slide 14: Essential Health: Aveeno Kids
Essential Health Category creation and rapid expansion of Aveeno® Kids 14
Slide 15: Skin Health & Beauty
Skin Health & Beauty Action plan to stabilize U.S. business underway -4.5% Organic growth1 Strong focus on strengthening in-store presence 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules to this presentation and to the earnings
Slide 16: Skin Health & Beauty: dermatologist engagement
Skin Health & Beauty Increasing engagement with dermatologists 16
Slide 17: Skin Health & Beauty: consumer engagement
Skin Health & Beauty Strengthening engagement with consumers 17
Slide 18: Fuel Growth
Free Up Resources to Invest Behind Gross margin Our Brands expansion Leverage Fuel operational efficiencies growth Our Vue Forward 18
Slide 19: Foster a Culture of Performance & Impact
Foster a Culture of Performance & Impact 19
Slide 20: 2024 Strategic Priorities: Our 15 Priority Brands
2024 Strategic Our 15 Priority Brands Priorities 20
Slide 21: Q1 2024 Reported Net Sales & Organic Growth
Q1 2024 Reported Net Sales & Organic Growth1 1.9% Organic growth on top of 11.2% in Q1 2023 +5.0% $3.9B $3.9B (3.1%) (0.8%) U.S. trade inventory dynamics. (~2%) Q1 2023 Net Sales Value Realization2 Volume Foreign Exchange Q1 2024 Net Sales 1 Non-GAAP financial measure; refer to reconciliations of no
Slide 22: Q1 2024 Net Sales and Organic Growth
Q1 2024 Net Sales and Organic Growth1 Self Care Essential Health Skin Health & Beauty $1.7B $1.1B $1.1B 4.2% 4.9% (5.1)% (4.5)% 3.5% 3.7% Reported Organic1 Reported Organic1 Reported Organic1 Organic Drivers Organic Drivers Organic Drivers Value Realization2 5.6% Value Realization2 6.8% Value Realiz
Slide 23: Q1 2024 Gross Profit Margin
Q1 2024 Gross Profit Margin 2.7% 0.2% 60.2% Transactional foreign exchange 57.3% Value realization2 Productivity initiatives Moderating inflation in logistics, energy, agrochemicals Labor pressure Q1 2023 Adjusted Q1 2024 Adjusted Gross Profit Margin1 Gross Profit Margin1 Reported Gross Profit Margi
Slide 24: Q1 2024 Operating Income Margin
Q1 2024 Operating Income Margin 2.1 % 22.0 % 21.3 % (1.4)% Operating leverage Standalone public company costs Increased brand investment Q1 2023 Adjusted Q1 2024 Adjusted Operating Income Margin1 Operating Income Margin1 Reported Operating Income Margin 16.6% Reported Operating Income Margin 14.1% 1
Slide 25: Q1 2024 Net Income and Earnings Per Share
Q1 2024 Net Income and Earnings Per Share Reported Net Income Adjusted Net Income1 Earnings per Share $633M $547M $0.15 $469M Reported Diluted $296M $0.28 Adjusted Diluted1 Q1 2023 Q1 2024 Q1 2023 Q1 2024 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included
Slide 26: 2024 Adjusted Diluted EPS
2024 Adjusted Diluted EPS1 $0.37 +7.7% Growth $(0.04) $0.28 Interest $(0.02) $0.26 Expense Standalone Public Co $(0.03) $(0.02) Costs Share Count Normalized Tax Rate 2024 vs 2023 Like-for-Like View 2023 Q1 2023 Q1 2024 Q1 Adjusted Adjusted Adjusted Diluted EPS1 Diluted EPS1 Diluted Baseline EPS1 1 N
Slide 27: Full Year 2024 Guidance Summary
Full Year 2024 Guidance Summary Reaffirmed Full Year 2024 Reported Net Sales Growth 1.0% - 3.0% Organic Growth1 2.0% - 4.0% Adjusted Operating Income Margin1 Slightly below 2023 Reported Interest Expense, Net ~$400M Adjusted Effective Tax Rate1 25.5% - 26.5% Adjusted Diluted Earnings per share1,2 $1
Slide 28: 2024 Strategic Priorities: Q1 2024 Highlights
2024 Strategic Q1 2024 Highlights Priorities Execution on our strategic priorities drove a strong start to the year Organic growth1 of 1.9% on top of 11.2% in the prior year Sustained momentum in Self Care and Essential Health, plans to stabilize Skin Health and Beauty in the U.S. underway Adjusted
Slide 29: Q&A
Q&A Thibaut Mongon Paul Ruh Tina Romani Chief Executive Chief Financial Head of Investor Officer Officer Relations 29
Slide 30: Appendix
Appendix 30
Slide 31: 2023 Organic Growth Considerations
2023 Organic Growth1 Considerations Q1’23 Q2’23 Q3’23 Q4’23 Higher incidences of cough, cold and flu Delayed season and lower outside the U.S. incidence levels Self-Care Retailer inventory re-build, following Q4’22 demand surge Organic Growth 15.3% 14.2% 6.7% (2.0%) Retailer inventory re-build, foll
Slide 32: Organic Growth
Organic Growth Fiscal Three Months Ended March 31, 2024 vs April 2, 2023(1) Impact of foreign Reported Net sales change currency Organic growth(2) (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 58 3.5 % $ (11) $ 69 4.2 % Skin Health and Beauty (57) (5.1) (7) (50) (
Slide 33: Organic Growth
Organic Growth Fiscal Three Months Ended April 2, 2023 vs April 3, 2022(1) Impact of foreign Reported Net sales change currency Organic growth(2) (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 175 11.9 % $ (50) $ 225 15.3 % Skin Health and Beauty 99 9.8 (34) 133 13
Slide 34: Total Segment Net Sales and Adjusted Operating Income
Total Segment Net Sales and Adjusted Operating Income Net Sales Fiscal Three Months Ended (Unaudited; Dollars in Millions) March 31, 2024 April 2, 2023 Self Care 1,698 1,640 Skin Health and Beauty 1,054 1,111 Essential Health 1,142 1,101 Total segment net sales $ 3,894 $ 3,852 Adjusted Operating Inc
Slide 35: Non-GAAP Reconciliations (Q1'24)
Non-GAAP Reconciliations (Q1’24) Fiscal Three Months Ended March 31, 2024 (Unaudited; Dollars in Millions) As Reported Adjustments Reference As Adjusted Net sales $ 3,894 — $ 3,894 Gross profit $ 2,242 103 (a) $ 2,345 Gross profit margin 57.6 % 60.2 % Operating income $ 550 305 (a)-(c) $ 855 Operati
Slide 36: Non-GAAP Reconciliations (Q1'23)
Non-GAAP Reconciliations (Q1’23) Fiscal Three Months Ended April 2, 2023 (Unaudited; Dollars in Millions) As Reported Adjustments Reference As Adjusted Net sales $ 3,852 — $ 3,852 Gross profit $ 2,125 81 (a) $ 2,206 Gross profit margin 55.2 % 57.3 % Operating income $ 640 179 (a)-(c) $ 819 Operating
Slide 37: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Three Months Ended (Unaudited) March 31, 2024 April 2, 2023 Effective tax rate 30.7 % 23.0 % Adjustments: Tax-effect on special item adjustments (3.1) 1.1 Removal of tax benefits from carve out methodology — 5.4 Taxes related to Deferred Markets 0.7 — Valuation all
Slide 38: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Year 2024 (Unaudited) Forecast Effective tax rate 26.5% - 27.5% Adjustments: Tax-effect on special item adjustments (1.7) Taxes related to Deferred Markets 0.7 Adjusted Effective tax rate (non-GAAP) 25.5% - 26.5% 38
Slide 39: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Fiscal Three Months Ended (Unaudited) March 31, 2024 April 2, 2023 Diluted earnings per share $ 0.15 $ 0.27 Adjustments: Separation-related costs 0.03 0.06 Restructuring and operating model optimization initiatives 0.03 — Fixed asset impairment 0.04 — Amortization
Slide 40: Free Cash Flow
Free Cash Flow Fiscal Three Months Ended (Unaudited; Dollars in Billions) March 31, 2024 April 2, 2023 Net cash flows from operating activities $ 0.3 $ 0.8 Purchases of property, plant, and equipment (0.2) (0.1) Free cash flow (non-GAAP) $ 0.1 $ 0.7 Kenvue is not able to provide the most directly co
Slide 41: Research and Development
Research and Development Fiscal Three Months Ended (Unaudited; Dollars in Millions) March 31, 2024 April 2, 2023 Research and Development $ 100 $ 89 41
Slide 42: Kenvue
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