Johnson & Johnson · NYSE:JNJ
Johnson & Johnson — Q2 2020 Earnings Presentation
26 slides from Johnson & Johnson's earnings presentation, Jul 16, 2020
Slide 1: 2nd Quarter 2020 Results
2nd Quarter 2020 Results ohwwonafohenn 2nd Quarter 2020 Sales $3.3 Worldwide Consumer Health Sales Worldwide Worldwide 4 Gree Excluding acquisitions/ , Decreased wv y Billion Consumer Health worldwide reported sales decreased (7.0)% 18.3B (10.8)% | smu” (8.8)9 P or (8.6)% operationally’ Primary offs
Slide 2: 2nd Quarter 2020 Earnings Call
nd 2 Quarter 2020 Earnings Call July 16, 2020
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 Sales Performance and Earnings Review 2 COVID-19 Vaccine Update 3 Capital Allocation and Guidance 4 Q&A Alex Gorsky Paul Stoffels, M.D. Joaquin Duato Chairman and Vice Chairman of the Vice Chairman of the Chief Executive Officer Executive Committee & Executive Committee Chief Scientific Off
Slide 6: 2nd Quarter 2020 Sales
2nd Quarter 2020 Sales % CHANGE Dollars in Billions Regional Sales Results Q2 2020 Q2 2019 Reported Operational1 U.S. $9.5 $10.4 (8.3)% (8.3)% Europe 4.1 4.7 (14.2) (11.5) Western Hemisphere 1.1 1.5 (22.1) (8.9) (ex U.S.) Asia-Pacific, Africa 3.6 4.0 (9.3) (7.7) International 8.8 10.2 (13.4) (9.6) W
Slide 7: 2nd Quarter 2020 Financial Highlights
2nd Quarter 2020 Financial Highlights Dollars in Billions, except EPS Reported %; Operational %1 Sales GAAP Earnings GAAP EPS $20.6 $5.6 $2.08 $18.3 $3.6 $1.36 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 (10.8)%; (9.0)%1 (35.3)% (34.6)% Adjusted Earnings2 Adjusted EPS2 $7.0 $2.58 $4.4 $1.67 Q2 2
Slide 8: Consumer Health Highlights – 2nd Quarter 2020
Consumer Health Highlights – 2nd Quarter 2020 OTC and Oral Care strength offset by COVID-19 impact Reported: WW (7.0)%, U.S. 1.3%, Int’l (13.4)% Key Drivers of Operational Performance1 Operational1: WW (3.6)%, U.S. 1.3%, Int’l (7.4)% • Increase primarily due to market and share growth driven by COVI
Slide 9: Pharmaceutical Highlights – 2nd Quarter 2020
Pharmaceutical Highlights – 2nd Quarter 2020 Growth across most therapeutic areas despite COVID-19 impacts Reported: WW 2.1%, U.S. 5.8%, Int’l (2.4)% Key Drivers of Operational Performance1 • Growth driven by strong uptake of STELARA in Crohn’s Disease and Ulcerative Colitis, Operational1: WW 3.9%,
Slide 10: Medical Devices Highlights – 2nd Quarter 2020
Medical Devices Highlights – 2nd Quarter 2020 Sales decline driven by the negative impact of COVID-19 Reported: WW (33.9)%, U.S. (39.6)%, Int’l (28.8)% Key Drivers of Operational Performance1 Operational1: WW (32.7)%, U.S. (39.6)%, Int’l (26.4)% Interventional • Driven by the negative impact of COVI
Slide 11: Condensed Consolidated Statement of Earnings
Condensed Consolidated Statement of Earnings 2nd Quarter 2020 Amount 2020 % to Sales Amount 2019 % to Sales % Increase (Unaudited; Dollar and Shares in Millions Except Per Share Figures) (Decrease) Sales to customers $18,336 100.0 $20,562 100.0 (10.8) Cost of products sold 6,579 35.9 6,940 33.8 (5.2
Slide 12: Adjusted Income Before Tax by Segment
1 Adjusted Income Before Tax by Segment 2nd Quarter 2020 % to Sales 2Q 2020 2Q 2019 Pharmaceutical 44.1% 41.6% Medical Devices 1.2% 57.5% Consumer Health 24.0% 20.9% Total 29.1% 41.9% Pharmaceutical Medical Devices3 Consumer Health Expenses Not Allocated to Segments 1 Non-GAAP measure; excludes amor
Slide 13: COVID-19 Vaccine R&D and Manufacturing Update
COVID-19 Vaccine R&D and Manufacturing Update
Slide 14: Goluenafoluuen
Goluenafoluuen
Slide 15: Capital Allocation Strategy
Capital Allocation Strategy Dollars in Billions Q2 2020 Cash and Marketable Capital Allocation $19.1 Securities HIGHER PRIORITY Debt ($30.4) Organic growth business needs Net Debt ($11.3) Free cash flow1 Free Cash Flow2 ~$5.5 Note: values may have been rounded Q2 2020: Competitive dividends Investme
Slide 16: Macroeconomic Perspective
Macroeconomic Perspective The impact of the pandemic is very fluid and likely to continue evolving Healthcare Encouraging trends for many procedures approaching pre- COVID-19 levels Industry Office Improving office visits compared to earlier stages of the pandemic Visits Public educational materials
Slide 17: 2020 Guidance
2020 Guidance Informed Assumptions • Utilized external expert assessments related to the macroeconomic impact of COVID-19 • Discussions with hospital systems, administrators, and surgeons on preparedness and treatment paradigm • Extensive analytics on weekly hospital trends by account Pharmaceutical
Slide 18: Medical Devices: Q2 Monthly Trends
Medical Devices: Q2 Monthly Trends Variance vs. Original Expectations to Start the Year (January Guidance) Franchise June Q2 Contact Lenses (30%) (40%) Surgical Vision (45%) (55%) Biosurgery / Endocutters / Energy (20%) (30%) Wound Closure (20%) (30%) Hips (10%) (40%) Knees (25%) (55%) Spine (15%) (
Slide 19: Medical Devices: COVID-19 Framework
Medical Devices: COVID-19 Framework Full Year 2020 Operational Sales Impact inclusive of Q2 YTD Actuals: ($3.75B) to ($5.25B) Q1 Q2 Q3 Q4 Initial Impact Significant Impact Stabilization Recovery • China represented more than 40% • China declined (5%) vs. original Countries Impacted: of total MD impa
Slide 20: Medical Devices: Procedural Guidance Update
Medical Devices: Procedural Guidance Update Full Year 2020 Operational Sales Impact inclusive of Q2 YTD Actuals: ($3.75B) to ($5.25B) 120 % 2020 Original Expectations Attainment 100 80 Original Expectations 60 Actuals April Guidance 40 July Guidance 20 0 January February March April May June July Au
Slide 21: 2020 Guidance
2020 Guidance July April Comments Adjusted Operational (0.8%) - 1.0% (3.0%) - 0.5% Improved Medical Devices outlook Sales1,2 $81.0 - $82.5B $79.2 - $82.2B Operational Sales2 (1.3%) - 0.5% (3.5%) - 0.0% Net Impact Acq./Div: ~0.5% $79.9B - $81.4B $77.5B - $80.5B Estimated Reported Sales 3 (2.6%) - (0.
Slide 22: 2021 Considerations
2021 Considerations Enterprise Consumer Health Pharmaceuticals Medical Devices ‒ Expect strong EPS ‒ Focus on delivering ‒ Plan to continue above ‒ Assume procedures to growth on an solid growth in market growth be largely permissible operational basis stronghold categories throughout the year ‒ No
Slide 23: Notable New Announcements in Quarter 2020
nd Notable New Announcements in 2 Quarter 20201 Medical Devices • Other: – Biosense Webster unveils late-breaking results from PRECEPT study in patients with persistent atrial fibrillation Pharmaceuticals • Regulatory Approvals: – IMBRUVICA (ibrutinib) – U.S. Food and Drug Administration (FDA) appro
Slide 24: VELYS Digital Surgery
VELYS Digital Surgery
Slide 25: Q&A
Q&A Alex Gorsky Joaquin Duato Paul Stoffels, M.D. Joseph J. Wolk Chairman and Vice Chairman of the Vice Chairman of the Executive Vice President, Chief Executive Officer Executive Committee Executive Committee & Chief Financial Officer Chief Scientific Officer
Slide 26: Goluenafoluuen
Goluenafoluuen