Perrigo Company Plc · NYSE:PRGO
Perrigo — Q4 2020 Earnings Presentation
52 slides from Perrigo's earnings presentation, Mar 1, 2021
Slide 1: Fourth Quarter & Fiscal Year 2020 Financial Results
Fourth Quarter & Fiscal Year 2020 Financial Results March 1, 2021
Slide 2: Bradley Joseph, VP Investor Relations and Corporate Communications
Bradley Joseph, VP Investor Relations and Corporate Communications
Slide 3: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation are “forward-looking statements.” These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels o
Slide 4: Murray S. Kessler, President & CEO
Murray S. Kessler, President & CEO
Slide 5: Started Transformation to a Consumer Self-Care Company in May 2019
Started Transformation to a Consumer Self-Care Company in May 2019 To make lives better by bringing Quality, Affordable Self-Care Products that consumers trust everywhere they are sold. 5
Slide 6: Thank You to Our Teammates Around the World
Thank You to Our Teammates Around the World! 6
Slide 7: Made Significant Progress in Year 2 of Our Consumer Self-Care Transformation
Made Significant Progress in Year 2 of Our Consumer Self-Care Transformation in 2020; COVID-19 Did Not Slow Us Down! • Portfolio reconfiguration complete, including Rx separation, and 6 consumer bolt-ons 1 • Restored strong revenue growth Reconfigure the portfolio • 30% of PRGO owned by consumer inv
Slide 8: Perrigo is Growing Again Driven by WW Consumer
Perrigo is Growing Again Driven by WW Consumer, Investments Have Been Made, Certainty will be Restored; The Company is Poised to Create Value PERRIGO NET SALES $ millions Start of $6,000 Transformation CAGR +6.3% $5,000 CAGR -0.7% $4,000 $3,000 $2,000 $1,000 $0 2015 2016 2017 2018 2019 2020 CSCA CSC
Slide 9: Solid 2020 Performance Despite $0.35 In EPS Headwinds
Solid 2020 Performance Despite $0.35 In EPS Headwinds (COVID-19 Costs, Divestitures, Global Cough Cold Declines in Q4) Consolidated Net Sales YoY Adjusted EPS YoY YTD Financial Highlights Consolidated net sales grew 6.4%, excluding divested businesses & currency; organic net sales were up YTD $5.1
Slide 10: Almost non-existent Flu Season, Down Dramatically Versus Baseline
Almost non-existent Flu Season, Down Dramatically Versus Baseline and Prior Year in the U.S. and Europe U.S. Flu Activity* E.U. Flu Activity** ADULT FLU 5M WEEKLY US ILI INCIDENCE 4M 3M 2M 1M M 2018‐2019 2019‐2020 2020‐2021 PEDIATRIC FLU 5M WEEKLY US ILI INCIDENCE 4M 3M 2M 1M M 2018‐2019 2019‐2020 2
Slide 11: Resulting in Severe Category Consumption Declines in Cough/Cold Products
Resulting in Severe Category Consumption Declines in Cough/Cold Products U.S. Total Market vs. Perrigo Consumption – Cough & Cold* 200 181.6 180 160 175.1 140 120 105.9 108.1 106.3 103.2 95.9 100.1 100 83.7 107.9 109.5 106.2 103.9 73.4 69.3 73.3 80 96.0 62.8 56.9 95.3 58.2 60 82.0 66.1 72.8 68.6 70.
Slide 12: WW Consumer Grew 6.0% and Achieved Record Net Sales in 2020
Even with a Challenged Cough/Cold Season, WW Consumer Grew 6.0% and Achieved Record Net Sales in 2020 FY2020 WORLDWIDE CONSUMER NET SALES +6.0% $ millions +2.3% (Organic) New Products +3.8% +$170M eCommerce Growth +109% 1. See attached Appendix for details. 2. FY19 Net sales and comparisons include
Slide 13: Led by 9% Net Sales Growth in CSCA
Led by 9% Net Sales Growth in CSCA, Also a Fiscal Year Record FY2020 CONSUMER SELF-CARE AMERICAS NET SALES +9.0% $ millions +3.4% (Organic) +5.0% New Products e-Commerce Growth Market Share Gains(4) +$72M +154% +100 basis points 1. See attached Appendix for details. 2. FY19 Net sales and comparisons
Slide 14: CSCI Was More Impacted by COVID-19
CSCI Was More Impacted by COVID-19, But Still Delivered a Solid Topline Performance in 2020 FY2020 CONSUMER SELF-CARE INTERNATIONAL NET SALES +0.8% $ millions +0.2% (Organic) +2.0% New Products e-Commerce Growth Market Share Gains(4) +$98M +58% Flat 1. See attached Appendix for details. 2. FY19 Net
Slide 15: Rx Growth Driven by New Products
Rx Growth Driven by New Products, More than Offsetting Base Business Declines from Lock-Down Related Reduction in Scripts FY 2020 RX NET SALES +0.8% $ millions 15
Slide 16: Ray Silcock, EVP & CFO
Ray Silcock, EVP & CFO
Slide 17: Consolidated Summary – Full Year 2020
Consolidated Summary – Full Year 2020 Restructuring, Consolidated Impairment Interest, Diluted Other, and Net 12 Months Ending December 31, 2020 Net Gross R&D Expense DSG&A Charges, and Operating Change in Income Tax Income Earnings (in millions, except per share amounts) Sales Profit Expense Other
Slide 18: Consolidated Perrigo – Q4/FY 2020
Consolidated Perrigo – Q4/FY 2020 % Change Ex. % Change Ex. Q4 YoY $ Divested FY YoY $ Divested Consolidated Perrigo 2020 Change Businesses & 2020 Change Businesses & Currency Currency Net Sales $1.3B ($33M) (2.4%) $5.1B $241M 6.4% Adjusted Gross Profit $514M ($16M) $2.0B $13M Adjusted Gross Margin
Slide 19: Worldwide Consumer – Q4/FY 2020
Worldwide Consumer – Q4/FY 2020 % Change Ex. % Change Ex. Q4 YoY $ Divested FY YoY $ Divested Worldwide Consumer 2020 Change Businesses & 2020 Change Businesses & Currency Currency Net Sales $1.1B ($14M) (1.0%) $4.1B $233M 7.9% Adjusted Gross Profit $408M ($11M) $1.6B $35M Adjusted Gross Margin % 38
Slide 20: CSC Americas – Q4/FY 2020
CSC Americas – Q4/FY 2020 % Change Ex. % Change Ex. Q4 YoY $ Divested FY YoY $ Divested CSC Americas 2020 Change Businesses & 2020 Change Businesses & Currency Currency Net Sales $701M ($10M) (1.1%) $2.7B $222M 10.3% Adjusted Gross Profit $232M ($8M) $880M $51M Adjusted Gross Margin % 33.0% (80) bps
Slide 21: CSC International – Q4/FY 2020
CSC International – Q4/FY 2020 % Change Ex. % Change Ex. Q4 YoY Divested FY YoY Divested CSC International 2020 Change Businesses & 2020 Change Businesses & Currency Currency Net Sales $352M ($4M) (0.8%) $1.4B $11M 3.6% Adjusted Gross Profit $176M ($3M) $710M ($16M) Adjusted Gross Margin % 50.0% (40
Slide 22: Rx – Q4/FY 2020
Rx – Q4/FY 2020 Q4 YoY YoY % FY YoY YoY % Rx Pharmaceuticals 2020 Change Change 2020 Change Change Ex. Currency Ex. Currency Net Sales $236M ($20M) (8.2%) $975M $8M 0.4% Adjusted Gross Profit $106M ($4M) $400M ($22M) Adjusted Gross Margin % 44.9% 170 bps 41.0% (260) bps Adjusted Operating Income $69
Slide 23: Balance Sheet and Liquidity Remain Strong
Balance Sheet and Liquidity Remain Strong Select Balance Sheet & Liquidity Measures 12/31/2020 9/26/2020 Cash & Cash Equivalents $642M $849M Total Debt $3.6B $3.6B Net Debt $2.9B $2.7B YTD Cash Conversion Ratio* = 115% 23 *See attached Appendix for details.
Slide 24: Murray S. Kessler, President & CEO
Murray S. Kessler, President & CEO
Slide 25: Announced Sale of Rx Pharmaceuticals To Altaris
Announced Sale of Rx Pharmaceuticals To Altaris – Final Major Step in Portfolio Reconfiguration Transaction Terms • $1.55B total transaction value (cash plus other considerations) • FY20 net sales: $870M, excluding albuterol Financial Impact • FY20 adjusted operating income: $215M, excluding albuter
Slide 26: Transitioning Perrigo to a Growing, Pure-Play Consumer Self-Care Company
Transitioning Perrigo to a Growing, Pure-Play Consumer Self- Care Company with Significant Financial Optionality Well Diversified Across Global Well Diversified Across Perrigo Consumer Profile OTC Categories Store/Value/Brand Offerings Oral Self- E.U Top 10 U.S. Store/Value Upper Care Respiratory Br
Slide 27: Committed to Delivering 3/5/7 For Stand-Alone Consumer
Committed to Delivering 3/5/7 For Stand-Alone Consumer – Translates to Adjusted EPS Target for 2021 of $2.50 to $2.70 $2.50 to $2.70 Adj. EPS Business Upside with Guidance +7% YoY >$2B in Cash • +5% Adjusted Operating Income Growth vs. • Disciplined M&A 2020 • De-lever Balance Sheet • 2021 Adjusted
Slide 28: Key Drivers of FY2021 Consumer Guidance
Key Drivers of FY2021 Consumer Guidance +3% +5% Adjusted +2% +7% Adj. EPS Revenue Operating Additional Growth Growth Income Adj. EPS • Historic 4-5% Unit • Project Momentum Cost • Q4’20 Share Growth Driven By Savings Repurchases Category Growth, New Products, E-Commerce, • Increased Gross Margin • C
Slide 29: Perrigo now a Top Tier, Pure-Play Consumer Self Care Leader
Perrigo now a Top Tier, Pure-Play Consumer Self Care Leader Poised to Deliver Significant Value Creation We Have Delivered On Our …And Committed to Making Perrigo a Promise to Transform Perrigo… Strong Go-Forward Growth Top-Tier CPG Company Perrigo Guidance vs. CPG Peers Consensus(3) Demonstrated
Slide 30: Appendix: Selected Consolidated Information
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES APPENDIX SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended December 31, 2020 Restructuring, Interest, Impairment Other, and Income Diluted Charges, and Operating Change in Tax Net E
Slide 31: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Three Months Ended December 31, 2019 Restructuring, Impairment Interest, Charges, and Other, and Income Diluted Other Operating Change in
Slide 32: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2020 Restructuring, Interest, Impairment Other, and Diluted Charges, and Change in Income Net Earnings Ne
Slide 33: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED CONSOLIDATED INFORMATION (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, 2019 Restructuring, Interest, Impairment Other, and Diluted Charges, and Change in Income Earnings Net Gr
Slide 34: Table II Reconciliation of Non-GAAP Measures
TABLE II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Three Months Ended Three Months Ended December 31, 2020 December 31, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Worldwide Consumer* Sales Profit Expense Expen
Slide 35: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Twelve Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Worldwide Consumer* Sales Profit
Slide 36: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Three Months Ended Three Months Ended December 31, 2020 December 31, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Consumer Self-Care Americas Sales
Slide 37: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Three Months Ended Three Months Ended December 31, 2020 December 31, 2019 Operating Net Gross R&D DSG&A Income Net Gross R&D DSG&A Operating Consumer Self-Care Internat
Slide 38: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Three Months Ended Three Months Ended December 31, 2020 December 31, 2019 Operating Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Income Prescription Pharmaceutical
Slide 39: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Twelve Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Consumer Self-Care Americas Sale
Slide 40: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Twelve Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 Net Gross R&D DSG&A Operating Net Gross R&D DSG&A Operating Consumer Self-Care International
Slide 41: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES SELECTED SEGMENT INFORMATION (in millions) (unaudited) Twelve Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 Operating Net Gross R&D DSG&A Income Net Gross R&D DSG&A Operating Prescription Pharmaceutic
Slide 42: Table III Reconciliation of Non-GAAP Measures
TABLE III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended December 31, December 31, Total FX Constant Currency 2020 2019 Change Change Change Reported Net sales Consolidated $ 1,289.5 $ 1,322.8 (2.5)%
Slide 43: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Three Months Ended December 31, December 31, Total FX Constant Currency 2020 2019 Change Change Change Reported Net sales CSCI $ 352.4 $ 356.4 (1.1)%
Slide 44: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Twelve Months Ended December 31, December 31, Total FX Constant Currency 2020 2019 Change Change Change Adjusted Net Sales RX $ 975.1 $ 967.5 0.8% (0.
Slide 45: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Twelve Months Ended December 31, December 31, Total FX Constant Currency 2020 2019 Change Change Change Adjusted Net Sales CSCA net sales as so adjust
Slide 46: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - SELECTED SEGMENTS (in millions) (unaudited) Twelve Months Ended December 31, December 31, Total FX Constant Currency 2019 2018 Change Change Change Net sales Worldwide Consumer CSCA $ 2,411.6 $
Slide 47: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - CONSOLIDATED and SEGMENTS (in millions) (unaudited) Adjusted Net Sales - Constant Currency Twelve Months Ended Adjusted Constant December 31, December 31, December 31, December 31, Currency 2015
Slide 48: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES ADJUSTED NET SALES GROWTH - CONSOLIDATED and SEGMENTS (in millions) (unaudited) Adjusted Net Sales - Constant Currency Twelve Months Ended Adjusted Constant December 31, December 31, December 31, Currency 2018-2020 2018 20
Slide 49: Table IV Reconciliation of Non-GAAP Measures
TABLE IV PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) Three Months Ended December 31, December 31, Total 2020 2019 Change Consolidated adjusted EPS $ 0.93 $ 1.06 (12.3)% Adjusted gross profit Consolidated $ 514.2 $ 529.8 (2.9)% Worldwide
Slide 50: Table IV (Continued) Reconciliation of Non-GAAP Measures
TABLE IV (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) Twelve Months Ended December 31, December 31, Total 2020 2019 Change Consolidated adjusted EPS $ 4.02 $ 4.03 (0.2)% Adjusted gross margin Consolidated 39.3 % 41.0 % (170)
Slide 51: Table V Reconciliation of Non-GAAP Measures
TABLE V PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions) (unaudited) Twelve Months Ended December 31, 2020 Operating cash flow $ 636.2 Adjusted net income $ 552.2 Cash conversion ratio 115 % 52
Slide 52: Table VI Reported Net Sales by Product Category
TABLE VI PERRIGO COMPANY PLC REPORTED NET SALES BY PRODUCT CATEGORY (in millions) (unaudited) Year Ended December 31, December 31, December 31, 2020 2019 2018 CSCA(1) Upper respiratory $ 489.5 $ 515.2 $ 492.5 Digestive health 452.6 413.9 403.6 Pain and sleep-aids 424.7 383.6 388.1 Nutrition 387.4 39