Slide 1: Second Quarter 2023 Earnings Call
Second Quarter 2023 Earnings Call July 20, 2023
Slide 2: Disclaimer
Disclaimer 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 Inc.’s (“Kenvue”) future operating a
Slide 3: Introduction
Introduction Thibaut Mongon Paul Ruh Tina Romani Chief Executive Chief Financial Head of Investor Officer and Director Officer Relations
Slide 4: Listed NYSE
LISTED NYSE.
Slide 5: Agenda
Agenda Second Quarter 01 2023 Highlights Thibaut Mongon Q2 2023 02 Financial Results Paul Ruh Full Year 03 2023 Guidance Paul Ruh Q&A 04 Thibaut Mongon & Paul Ruh 5
Slide 6: Q2 2023 Financial Highlights
Q2 2023 Reported Net Sales Increased 5.4% to $4.0 Billion with Organic Growth1 of 7.7% Financial Highlights Robust Net Sales and Organic Growth1 Across Segments and Geographic Regions Robust growth across the portfolio through strong value Full Year 2023 Organic Growth1 realization, consumer-led Exp
Slide 7: Q2 2023 Portfolio Highlights
Q2 2023 Portfolio Highlights Increased demand in Pain Care and Cough, Cold and Flu products such as Tylenol® and Motrin® Innovation, improved supply and strong commercial execution drove sustained market share growth for Neutrogena® Sun Care BAND-AID® Brand Adhesive Bandages recognized as “America’s
Slide 8: Kenvue's Competitive Advantage
Kenvue's Competitive Advantage Longstanding engagement with healthcare professionals Dentists #1 Dentist Recommended Mouthwash in the U.S. Doctors #1 Doctor Recommended Adult Pain Medication and Nurses in the U.S. Deep connection with consumers built on trust Dermatologists #1 Dermatologist Recommen
Slide 9: Science-Backed Innovation
Science-Backed Innovation 9
Slide 10: Strong & Agile Operating Model
Strong & Agile Operating Model • World’s largest pure-play Consumer Health company by revenue • Synergies across portfolio • Agility and flexibility 10
Slide 11: Looking Ahead
Looking Ahead • Deliver full year organic growth1 between 5.5% - 6.5% • Drive category relevance and brand equity through new product launches with science-backed claims • Continue strengthening supply chain resiliency model 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financia
Slide 12: Q2 2023 Financial Results
Q2 2023 Financial Results I€ kenvue
Slide 13: Q2 2023 Net Sales and Organic Growth
Q2 2023 Net Sales and Organic Growth1 Organic 7.7% Growth Growth Drivers 5.4% vs. 2022 • Value realization across the portfolio Reported Organic1 • Strong demand for pain care and cough, cold and flu care • Sequential share gains in 9.4% Suncare Organic 1 Growth • Volume about flat3, (1.7)% excludin
Slide 14: Q2 2023 Net Sales and Organic Growth by Segment
Q2 2023 Net Sales and Organic Growth1 Self Care Skin Health & Beauty Essential Health 14.2% 3.4% 3.8% 12.2% 1.9% 0.5% Reported Organic Reported Organic Reported Organic Organic Drivers Organic Drivers Organic Drivers Value Realization2 Value Realization2 Value Realization2 +10.6% +6.6% +10.7% Volume
Slide 15: Q2 Gross Profit Margin
Q2 Gross Profit Margin Reported Gross Profit Margin Adjusted Gross Profit Margin1 Drivers 59.3% • Value realization2 57.5% 56.7% • Supply chain productivity 55.5% improvements • Negative impact of foreign currency Q2 2022 Q2 2023 Q2 2022 Q2 2023 • Continued input cost inflation 1 Non-GAAP financial
Slide 16: Q2 EBITDA Margin
Q2 EBITDA Margin1 EBITDA Margin1 Adjusted EBITDA Margin1 Drivers • Value Realization2 26.8% 24.5% • Supply chain productivity 24.6% improvements 20.9% • Continued input cost inflation • Negative impact of foreign currency Q2 2022 Q2 2023 Q2 2022 Q2 2023 • Incremental ongoing public company costs 1 N
Slide 17: Q2 Net Income and Earnings per Share
Q2 Net Income and Earnings per Share Reported Net Income Adjusted Net Income1 Earnings per Share $732 Reported $0.23 $604 $581 $430 Adjusted1 $0.32 Q2 2022 Q2 2023 Q2 2022 Q2 2023 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in accompanying schedules
Slide 18: Commitment to Disciplined Capital Stewardship
Commitment to Disciplined Capital Stewardship Invest in our iconic brands to grow profitably Robust durable cash flow Healthy Attractive Disciplined Share balance sheet dividend policy M&A repurchases • Strong liquidity position • Initiated quarterly • Continue to evaluate • Offset dilution cash div
Slide 19: Full-Year 2023 Guidance
Full-Year 2023 Guidance Fiscal 2023 Reported Net Sales Growth 4.5% - 5.5% Organic Growth1 5.5% - 6.5% Reported Interest Expense, Net ~$270M Adjusted Interest Expense, Net1 ~$300M Reported Effective Tax Rate 34.5% - 35.5% Adjusted Effective Tax Rate1 24.5% - 25.5% Adjusted Earnings per share1 $1.26 -
Slide 20: Our Commitment to Long-Term Value Creation
Our Commitment to Long-Term Value Creation Our long-term targets Durable Strong Reliable Prudent Compelling top-line profitability cash flow financial total growth generation policy shareholder return Organic revenue Adjusted earnings Durable cash flow Disciplined capital growth growth outpacing gen
Slide 21: Realize the Extraordinary Power of Everyday Care
Realize the Extraordinary Power of Everyday Care World’s largest Clear sources Robust financial pure-play consumer of competitive profile and disciplined health company1 advantage financial policy • World class, global portfolio built over the • Deep connection with consumers built • Efficient cost
Slide 22: Q&A
Q&A Thibaut Mongon Paul Ruh Chief Executive Chief Financial Officer and Director Officer
Slide 23: Appendix
Appendix
Slide 24: Segment Net Sales and Adjusted Operating Income
Segment Net Sales and Adjusted Operating Income Fiscal Three Months Ended Fiscal Six Months Ended (Dollars in Millions) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Segment Net Sales Self Care $ 1,661 $ 1481 $ 3,301 $ 2,946 ‘Skin Health and Beauty 1,147 1,126 2,258 2,138 Essential Health 1,20
Slide 25: Organic Growth
Organic Growth Fiscal Three Months Ended July 2, 2023 vs July 3, 2022 Reported Net Sales change Impact of foreign currency Organic growth @ (Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 180 122 % $ (30) $ 210 4.2 % 21 19 a7) 38 34 Skin Health and Beauty Essential Health 6 os
Slide 26: Organic Growth
Organic Growth Fiscal Six Months Ended July 2, 2023 vs July 3, 2022 Reported Net Sales change Impact of foreign currency Organic growth ©) (Dollars in Amount Percent Amount Amount Percent Self Care $ 355 121% $ (80) $ 435 148 % Skin Health and Beauty 120 56 (52) 172 80 Essential Health (6) (0.3) (97
Slide 27: Adjusted Gross Profit
Adjusted Gross Profit Fiscal Three Months Ended Fiscal Six Months Ended (Dollars in Millions) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Adjustments to components of Cost of sales: Amortization of intangible assets 80 89 161 Adjusted gross profit margin (non-GAAP) 57.5 % 593 % 57.4 % 58.3 %
Slide 28: Adjusted EBITDA
Adjusted EBITDA Fiscal Three Months Ended Fiscal Six Months Ended (Dollars in Millions) July 2, 2023 duly 3, 2022 July 2, 2023 July 3, 2022 Net income $ 430 $ 604 $ 760 $ 1,132 Interest expense, net 53 = 54 _ Provision for taxes 209 m 488 255 Depreciation and amortization 148 161 300 a Adjustments:
Slide 29: Adjusted Net Income
Adjusted Net Income Fiscal Three Months Ended Fiscal Six Months Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 $ 430 $ 604 760 $ 1,132 Adjustments: Separation-related costs“ 102 49 200 59 Restructuring expense - 24 - 38 Unrealized gain on securities - = 7 = Amortization and impairment of
Slide 30: Thank You
Thank You 30
Slide 31: Kenvue
R€ kenvue