Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Valeant Pharmaceuticals International — Q1 2015 Earnings Presentation
29 slides from Bausch Health Companies's earnings presentation, Apr 29, 2015
Slide 1: Valeant Pharmaceuticals International, Inc. First Quarter 2015 Financial Results
Valeant Pharmaceuticals International, Inc. First Quarter 2015 Financial Results Conference Call April 29, 2015
Slide 2: Forward-looking Statements
Forward-looking Statements Forward-looking Statements Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements regarding the expected integration of the Dendreon and Salix businesses, the amount and timing of expected synergies
Slide 3: Agenda
Agenda 1. First Quarter 2015 Results 2. Business Performance 3. Dendreon and Salix Integration 4. Financial Summary and 2015 Guidance 2
Slide 4: Q1 Highlights (1/2)
Q1 Highlights (1/2) Continued outperformance of U.S. businesses, driven by recent product launches, fueled top line and bottom line results Exceeded Q1 Guidance despite losing $140 million of revenues and $0.12 Cash EPS due to the rising U.S. dollar Excluding negative impact from foreign excha
Slide 5: Q1 Highlights (2/2)
Q1 Highlights (2/2) Increasing 2015 Cash EPS guidance to $10.90 - $11.20 Based on outperformance of Legacy Valeant, coupled with contributions from Salix and Dendreon Total company organic growth > 10% (same store) Q2 through Q4; Bausch + Lomb organic growth ~ 10% full year 2015 Reconfirming
Slide 6: Q1 2015 Financial Results
Q1 2015 Financial Results Adjusted Q1 2015 Q1 2014 Y/Y% Y/Y%(a),(b) Total Revenue $2.19 B $1.89 B 16% 27% Cash EPS $2.36 $1.76 34% 50% Salix Acquisition Related Includes ($0.01) impact from incremental shares issued Excludes ($0.02) impact from cash interest expense for debt issued prior to clos
Slide 7: Q1 2015 Organic Growth
Q1 2015 Organic Growth Same Store Sales – Y/Y growth rates for businesses that have been owned for one year or more Q1 2015 Total U.S. 26% Total Developed 18% Total Emerging Markets 7% Total Company 15% Pro Forma – Y/Y growth rates for entire business, including businesses that have been acquired wi
Slide 8: Bausch + Lomb Organic Growth
Bausch + Lomb Organic Growth Country/Region Q1 2015 Product Sales Y/Y% United States $321 14% Consumer $111 4% Rx Pharma $116 32% Surgical $48 0% Contact Lens $48 17% Other Developed Markets $240 -4% Emerging Markets $184 7% Total (a) $745 6% Other Developed Markets impacted by Japan’s -14% Y/Y due
Slide 9: Q1 2015 Top Brands
Q1 2015 Top 20 Brands Top 20 products revenue of $857M in Q1 2015, representing 40% of total revenue Largest product contributed ~3% of Q1 revenue Top 10 products contributed 27% of Q1 revenue Top 20 products, excluding newly acquired products (Provenge, Isuprel, Nitropress), grew 36% Q1 201
Slide 10: Q1 2015 Top Brands (1/2)
Q1 2015 Top 20 Brands (1/2) ($M) Product Q1 14 Q2 Q3 Q4 Q1 15 1) Isuprel® - - - - $72 2) Wellbutrin® $69 $72 $80 $82 $68 3) Jublia® - $3 $12 $54 $62 4) Nitropress® - - - - $62 5) Ocuvite®/PreserVision® $60 $66 $62 $62 $60 6) Xenazine® $50 $54 $56 $52 $57 7) Solodyn® $51 $43 $54 $61 $57 8) Targretin®
Slide 11: Q1 2015 Top Brands (2/2)
Q1 2015 Top 20 Brands (2/2) ($M) Product Q1 Q2 Q3 Q4 Q1 11) Virazole® $13 $7 $3 $17 $33 12) Arestin® $15 $30 $30 $38 $32 13) CeraVe® $22 $26 $21 $27 $30 14) Provenge® - - - - $30 15) Retin-A® Franchise $18 $19 $30 $30 $28 16) BioTrue® Solution $24 $27 $26 $25 $28 17) Elidel® $26 $25 $22 $31 $26 18)
Slide 12: U.S. Dermatology Highlights
U.S. Dermatology Highlights All promoted products had positive organic growth Driven by new product launches, dermatology grew 38% Y/Y Jublia Jublia TRxs Up 87% Q/Q resulting from sales force and DTC efforts New Jublia Tennis Commercial aired April 20 th featuring John McEnroe Jublia 8mL
Slide 13: U.S. Eye Health Highlights
U.S. Eye Health Highlights Contact Lenses Growth driven by the success of Biotrue ONEday Biggest revenue quarter for Biotrue ONEday since launch, growing >100% Y/Y Biotrue ONEday Toric approved Bausch + Lomb Ultra continues to be well received by healthcare professionals and is currently s
Slide 14: Other U.S. Business Highlights
Other U.S. Business Highlights Neuro & Other/Generics Organic growth driven by Xenazine, Ammonul and Virazole Consumer Strong organic revenue growth from CeraVe (40%), Preservision (20%), Occuvite (15%) and Soothe XP (19%) Lens care grew 17% Y/Y driven by 24% growth in BioTrue Multipurpose
Slide 15: Rest of World Business Highlights
Rest of World Business Highlights Emerging Markets - Europe/Middle East, $212M Revenues, 6% Y/Y Organic Growth Strong organic growth in Poland (29%) and the Middle East (26%) Russia organic growth negative given strong consumer buying in Q4 14 ahead of retail price increases Emerging Markets
Slide 16: Dendreon Integration
Dendreon Integration Dendreon off to a strong start Revenue on plan Profitable in Q1 as a result of restructuring of the business All synergies identified with total plan of ~ $130 million+ (including manufacturing) 90% of synergies on a run rate basis to be achieved by year-end Gross ma
Slide 17: Salix Integration (1/3)
Salix Integration (1/3) Completed acquisition on April 1, 2015 New Leadership team appointed Bill Bertrand: General Manager, former COO Salix John Temperato: Head of Sales, previously held senior sales positions at Salix Tom Hadley: Head of Marketing, former marketing lead for Jublia and L
Slide 18: Recent Salix TRx Trends (2/3)
Recent Salix TRx Trends (2/3) +19% y/y Sources: SHS PHAST and Company Data 17
Slide 19: Salix Integration (3/3)
Salix Integration (3/3) Expanded and refocused sales forces Maintaining three specialty GI sales forces with some realignment Expanding Hospital and Federal teams which will also promote select Valeant products Creating new sales force to provide greater focus on pain covering Relistor and V
Slide 20: Key R&D Milestones for 2015
Key R&D Milestones for 2015 Product Category Action Status Additional studies requested EnVista Toric Eye Health File PMA 1H 2015 To Be Filed mid- 2016 Luminesse™ (Brimonidine) Eye Health File NDA 1H 2015 Filed NDA in March Vesneo (glaucoma) Eye Health File NDA 1H 2015 On Track Lotemax Gel Next Gen
Slide 21: Financial Outlook
Financial Outlook Howard Schiller
Slide 22: Financial Summary
Financial Summary Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Total Revenue $1,886M $2,041M $2,056M $2,280M $2,191M Cost of Goods Sold% (% of product sales) 26% 28% 26% 24% 25% SG&A% (% of total revenue) 26% 25% 24% 23% 26% R&D Expense $61M $66M $59M $59M $56M Operating Margin (% of total revenue) (excl
Slide 23: Geographic breakdown
Geographic breakdown Based on actuals & projected 2016 revenue Q1 14 Q1 15 2016 Est. 8% 4% 6% 4% 12% 3% 5% 10% 7% 6% 6% 4% 64% 8% 12% 7% 8% 19% 53% 9% 49% 71% 9% 64% 10% 13% 9% 20% United States Emerging Europe, Africa, & Middle East Asia Western Europe Canada / Australia Latin America 22
Slide 24: Restructuring and Integration Expenses
Restructuring and Integration Expenses Q1 restructuring and integration expenses of $65M As projected, pre-2015 transactions represented < $25M; Majority related to Bausch + Lomb Waterford plant 2015 transactions represented $41M in the quarter of which Dendreon was $35M Q2 restructuring and
Slide 25: Cash Flow from Operations
Cash Flow from Operations Q1 2015 Adjusted Net Income $809 million GAAP Cash Flow from Operations $491 million Adjusted Cash Flow from Operations $708 million Cash Conversion 88% Adjusted cash flow from operations excludes build up of A/R related to Marathon where we did not purchase A/R Under t
Slide 26: Balance Sheet
Balance Sheet Post- Salix: $31.2B total debt Weighted average cost of debt: 5.1% ~ 40% bank / 60% bonds Revolver currently undrawn Bonds for Salix acquisition consolidated on Balance Sheet in Q1 even though transaction had not yet closed ~ $10.1 B bonds closed into escrow on March 27th
Slide 27: Updated 2015 Guidance (1/2)
Updated 2015 Guidance (1/2) New 2015 Previous 2015 Revenues $10.4 - $10.6 billion $9.2 - $9.3 billion Cash EPS $10.90 - $11.20 per share $10.10 - $10.40 per share Organic growth > 10% (same store) expected Q2 through Q4 Bausch + Lomb organic growth ~10% for full year 2015 Timing of synergy cap
Slide 28: Updated 2015 Guidance (2/2)
Updated 2015 Guidance (2/2) Salix revenue of ~$1.0 billion Does not assume IBS-D approval; we will update guidance post approval Assumes inventory levels reduced to 1.5 months or less by year end Operating cash flow Legacy Valeant will continue to target greater than 90% cash conversion
Slide 29: Valeant Pharmaceuticals International, Inc.
Valeant Pharmaceuticals International, Inc. First Quarter 2015 Financial Results Conference Call April 29, 2015
Valeant Pharmaceuticals International — Q1 2015 Earnings Presentation on 6ix