Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Valeant Pharmaceuticals International — Debt Investor Presentation (May 2012)
38 slides from Bausch Health Companies's debt investor presentation, May 31, 2012
Slide 1: Valeant Pharmaceuticals International, Inc. Investor Presentation
Exhibit 99.1 Valeant Pharmaceuticals International, Inc. Investor Presentation May 2012
Slide 2: Special Notice Regarding Publicly Available Information
Special Notice Regarding Publicly Available Information THE BORROWER HAS REPRESENTED AND WARRANTED TO THE ARRANGER THAT THE INFORMATION IN THIS DOCUMENT DOES NOT CONSTITUTE OR CONTAIN ANY MATERIAL NON-PUBLIC INFORMATION WITH RESPECT TO THE BORROWER OR THE TARGET OR ANY PARTY RELATED THERETO (COLLECT
Slide 3: 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 CLOSING OF PENDING TRANSACTIONS, EXPECTED REVENUE AND SYNERGIES, PRODUCT APPROVALS AND LAUNCHES AND FI
Slide 4: Agenda
Agenda Executive Summary & Transaction Overview Business Overview Key Investment Considerations Historical Financial Overview Questions and Answers 4
Slide 5: Transaction Overview
Transaction Overview
Slide 6: Transaction Overview
Transaction Overview Valeant Pharmaceuticals International, Inc. (“Valeant” or the “Company”) is a multinational specialty pharmaceutical company with a diverse global product portfolio Valeant has continued to demonstrate strong financial performance For the LTM period ended March 31, 2012, the Com
Slide 7: Sources and Uses
Sources and Uses ($ in millions) Sources Uses Cash to Balance sheet for General Corporate Incremental Term Loan B $500 $230 Purposes, Including Acquisitions Revolver Repayment 70 Natur Produkt Acquisition 180 OID, Fees and Expenses 20 Total Sources $500 Total Uses $500 7
Slide 8: Pro Forma Capitalization
Pro Forma Capitalization ($ in millions) 03-31-2012 05-31-2012E % of x LTM 3/31/2012 Amount PF Amount Capitalization PF EBITDA¹ Coupon Maturity Cash² $330 $407 Revolver ($275 million) 0 0 L+275 April 20, 2016 Term Loan A 2,160 2,160 L+275 April 20, 2016 Term Loan B 591 591 L+275 February 13, 2019 Ne
Slide 9: Key Transaction Highlights
Key Transaction Highlights Diversified Specialty Pharmaceutical Company Uniquely Positioned Product Portfolio Favorable Industry Dynamics Focused R&D Spend with Strong Pipeline of Future Products Successful Integration Track Record Significant Free Cash Flow Generation Capital Structure with Signifi
Slide 10: Business Overview
Business Overview
Slide 11: Overview of Valeant
Overview of Valeant Headquartered in Montreal, Quebec, Valeant is a multinational specialty pharmaceutical company with a diverse global product portfolio The Company has over 900 products and over 5,800 SKUs, with no product contributing more than 10% of total revenue In September 2010, Valeant Pha
Slide 12: Valeant's Operating Philosophy
Valeant’s Operating Philosophy Minimal headquarters staff Low cost operating structure All managers work in addition to manage, including CEO True performance-based pay Avoid discovery Don’t bet on science, bet on management Litmus test all development efforts through partnering Low cost, low risk p
Slide 13: Valeant's Operating Philosophy (cont.)
Valeant’s Operating Philosophy (cont.) Spending on future indications before drug is approved Be prudent about investing Building sales force—which is a commodity—ahead of demand ahead of need – curse of the industry Infrastructure – either geographic, corporate Deployment of capital is most importa
Slide 14: Valeant's Key Marketed Products
Valeant’s Key Marketed Products 1 Product Sales by Segment Dermatology Products focused on patients suffering from actinic Q1 2012 Q1 2011 keratoses, skin cancer, acne, psoriasis, skin-aging and pigmentation U.S. Emerging Emerging Neurology Markets Platform has grown through the acquisitions of Vita
Slide 15: Geographic Diversity
Geographic Diversity Tailored Market Approach by Region Valeant Canada Valeant Europe Specialty Pharma Branded Generics Valeant US Specialty Pharma Valeant South East Asia Specialty Pharma Valeant Latin America Branded Generics Valeant Latin America Branded Generics Valeant Australia Specialty Pharm
Slide 16: Consistent Financial Performance
Consistent Financial Performance ($ in millions) Q1 2012 organic product growth of 11% Strong organic growth across key dermatology brands EBITDA Revenue $2,755 Sep-2010: Transformative merger of Legacy Valeant with Biovail $2,463 $1,928 Feb-08: Mr. Michael Pearson hired as CEO of Legacy Valeant $83
Slide 17: 2012 YTD Achievements
2012 YTD Achievements Successful acquisition agenda Announced 9 transactions year to date ~$625 million in total purchase price; averaged <2.0x sales Expanded growth platforms in Russia and Brazil Multiple integrations completed and ongoing Several underway: Europe, US Dermatology and Australia R&D
Slide 18: New Product Pipeline
New Product Pipeline Geography Key Pipeline Highlights US/Global • IDP 108: Onychomychosis (PIII) • IDP 107: Oral acne (PII) • IDP 118: Psoriasis (PI) • Multiple life cycle management Canada • Opana: Pain • Multiple OTC programs Australia • Opana: Pain • Ziana: Acne • Multiple OTC programs • iNova p
Slide 19: Acquisition Updates
Acquisition Updates Announced YTD 2012 Swiss Herbal Remedies (Canada) – (Expected to close by June) Probiotica (Brazil) – Closed EyeTech (U.S.) – Closed Pele Nova (Brazil) – Closed Pedinol (U.S.) – Closed Natur Produkt (Russia) – (Expected to close mid-year) Gerot Lannach (Russia) – Closed Atlantis
Slide 20: Progress on 2012 Synergy Program
Progress on 2012 Synergy Program Run rate Run rate expected by Year- expected by mid- end year $230+ million* Run Rate May 3, 2012 $200 million Run Rate Feb 23, 2012 $165 million $135 million * Includes acquisitions announced and closed in 2012 20
Slide 21: Annual Financial Guidance for 2012
Annual Financial Guidance for 2012 Previous Guidance As of May 3, 2012* Revenue $3.1 - $3.4 billion Revenue > $3.4 - 3.6 billion $3.95 - $4.20 Adjusted Cash $4.45 - $4.70 Adjusted Cash EPS EPS > $1.2 billion in Adjusted > $1.4 billion in Adjusted Cash Flow from Operations Cash Flow from Operations r
Slide 22: Investment Considerations
Investment Considerations
Slide 23: Key Transaction Highlights
Key Transaction Highlights Diversified Specialty Pharmaceutical Company Uniquely Positioned Product Portfolio Favorable Industry Dynamics Focused R&D Spend with Strong Pipeline of Future Products Successful Integration Track Record Significant Free Cash Flow Generation Capital Structure with Signifi
Slide 24: Diversified Specialty Pharmaceutical Company
Diversified Specialty Pharmaceutical Company More than 900 products marketed with over 5,800 SKUs Vast array of therapeutic categories including neurology, dermatology, and a broad generics business Highly diversified revenue stream No product contributing more than 10% of total revenue Limited near
Slide 25: Uniquely Positioned Product Portfolio
Uniquely Positioned Product Portfolio Product portfolio contains few products that necessitate large R&D or promotional spend Existing marketed products and sizeable generics business mitigate the risk of market share erosion due to generic competition Product Segment Comments Emerging Markets Centr
Slide 26: Favorable Industry Dynamics
Favorable Industry Dynamics Large and growing market 2010 Global pharmaceutical market sales of $875 billion Market expected to grow at a 3 - 6% compound rate to ~$1.1 trillion by 2015 Aging demographics will continue to drive global healthcare spend Near-term opportunities for generic and specialty
Slide 27: Focused R&D Spend with Targeted Pipeline of Future Products
Focused R&D Spend with Targeted Pipeline of Future Products Valeant’s “Leveraged R&D” allows the company to progress development programs while limiting R&D spend and increasing the probability of success and effectiveness for the compounds in its pipeline The Company strategically partners and in-l
Slide 28: Successful Integration Track Record
Successful Integration Track Record Proven integration process drives significant synergies and improved organic growth The senior management team has significant experience managing integrations, having completed ~30 product and / or company acquisitions of various sizes over the past 4 years, incl
Slide 29: Significant Free Cash Flow Generation
Significant Free Cash Flow Generation Ability to Generate Cash Valeant’s top-line growth, high operating margins, modest capital expenditures and $48 working capital requirements result in significant free cash flow generation $59 2011 Free Cash Flow of $866 million $22 1 (excluding synergies) Pro f
Slide 30: Capital Structure with Significant Equity Value and Modest Leverage
Capital Structure with Significant Equity Value and Modest Leverage ($ in millions) Conservatively capitalized with total debt to capitalization of 34% Pro Forma Senior Secured Leverage of 1.7x and Total Leverage of 3.9x 1 2 Specialty Pharma Landscape Significant Enterprise Value Coverage $28,091 $2
Slide 31: Experienced Management Team
Experienced Management Team Valeant has a strong management team with substantial industry experience Valeant is led by Chairman and Chief Executive Officer J. Michael Pearson Pearson previously served as Head of the Global Pharmaceutical Practice and head of the Mid- Atlantic region of McKinsey & C
Slide 32: Historical Financial Overview
Historical Financial Overview
Slide 33: Pro Forma Financial Review
Pro Forma Financial Review ($ in millions) 1 Revenue Adjusted EBITDA 1 2 Adjusted EBITDA – CAPEX Free Cash Flow Valeant Biovail Synergies Source: Public Company Filings Note: Historical financials for Valeant exclude certain pro forma run rate adjustments for completed acquisitions for which financi
Slide 34: Quarterly Revenue Trends
Quarterly Revenue Trends ($ in millions) Consistent quarter over quarter performance $856 $688 609 $601 $565 $515 $495 $464 $452 Q1 Q2 Q3 Q4 Pro Forma 2010 2011A 2012A Note: Includes out-license of Cloderm in Q1’2011 and divestiture of dermatology products in Q1’12 34
Slide 35: First Quarter Performance
First Quarter Performance ($ in millions) Total Revenue $856 11% organic revenue growth in 1Q 2012 (excluding the impact of foreign exchange and acquired sales) $565 Strong volume increases across all segments outside of U.S. Neurology 74% gross profit margin in Q1 2012 — Sequential increases in cos
Slide 36: Q1 2012 Cash Flow Bridge
Q1 2012 Cash Flow Bridge ($ in millions) $350 $113 $302 $322 $11 $87 $8 $330 $164 Cash Net Cash Net Issuance Restructuring/ December Cash Flow Securities Acquisitions CapEx Other² March LT Debt Integration/ 2011 Generated¹ Repurchases 2012 Legal Settlements ¹ Includes impact of divestiture of IDP-11
Slide 37: Pro Forma EBITDA Reconciliation
Pro Forma EBITDA Reconciliation March 31, 2012 LTM EBITDA ($ millions) GAAP Operating Income $287 + Restructuring and Other Acquisition Related Costs¹ 180 + Acquired In-Process R&D 107 + Legal Settlements 15 + Purchase Price Step-Ups² 164 + Stock-Based Compensation Expense 33 + Depreciation and Amor
Slide 38: Questions and Answers
Questions and Answers
Valeant Pharmaceuticals International — Debt Investor Presentation (May 2012) on 6ix