Organon & Co. · NYSE:OGN
Organon & — Q4 2021 Earnings Presentation
25 slides from Organon &'s earnings presentation, Feb 17, 2022
Slide 1: Q4 and Full Year 2021 Earnings
Q4 and Full Year 2021 Earnings Organon
Slide 2: Disclaimer statement
Disclaimer statement This text should be viewed in conjunction with Organon’s Full Year/ Q 4 2021 earnings call 2 Safe Harbor for Forward - Looking Statements Except for historical information herein, this news release includes “forward - looking statements” within the meaning of the safe harbor pro
Slide 3: Disclaimer statement, cont. Non-GAAP Information
Disclaimer statement, cont. Non - GAAP Information This presentation includes information based on financial measures that are not recognized under generally accepted accountin g p rinciples in the United States (“GAAP”), such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings pe
Slide 4: 2021 Full Year Guidance vs Actual
$M Non - GAAP Guidance (as of 11/11/21) 2021 Full Year Actual Status Revenue $6,200 - $6,300 $6,304 Gross margin Low to mid - 60% range 64.7% Adjusted EBITDA margin 36.5% - 37.5% 37.7% Delivered on Year One expectations 4
Slide 5: Strong finish in 2021
Strong finish in 2021 • Growth engines ( Nexplanon ® etonogestrel implant , Fertility, and Biosimilars) all grew double digits in 2021 • Q4 2021 - Product sales show growth • Established Brands down 2% in Q4 2021 • Q4 Nexplanon growth strongest in product’s history 5
Slide 6: Building Women's Health portfolio
Building Women’s Health portfolio Marvelon Œ and Mercilon Œ February 2022 Contraception Expanding contraception portfolio by recapturing commercial rights to certain currently marketed products in Asia Acquisition of Forendo Pharma Completed in December 2021 Endometriosis Affects up to 170 million p
Slide 7: Growth pillars delivered; Established Brands stabilized
Growth pillars delivered; Established Brands stabilized $ mil Q4 - 21 Q4 - 20 (pre - spin) Actual VPY Ex FX VPY 2021 (mid - year spin) 2020 (pre - spin) Actual VPY Ex FX VPY Women’s Health 415 390 6 % 6 % 1,612 1,555 4% 2% Biosimilars 118 103 15 % 14 % 424 330 28% 25% Est ablished Brands 1,037 1,062
Slide 8: Q4 revenue: volume mostly offsets VBP and LOE
( 1 %) reported (1%) ex - FX ~10 $ mil $1,604 $1,613 ~35 ~50 ~20 ~70 ~30 ~10 Q4 revenue: volume mostly offsets VBP and LOE (1) Other includes manufacturing sales to Merck and other third parties, and allocated amounts from pre - spin revenue hedging activit ies through the date of separation. 8 (1)
Slide 9: Women's Health
Women’s Health Women’s Health Revenues $ mil Q 4 - 21 Q 4 - 20 Act VPY Ex FX VPY 2021 2020 Act VPY Ex FX VPY N explanon ® 226 165 37% 37% 769 680 13% 12% Follistim ® 59 57 4% 3% 237 193 23% 19% N uvaRing ® 44 53 (17)% (17)% 191 236 (19)% (21)% g anirelix a cetate 26 25 2% 1% 111 81 37% 32% Cerazette
Slide 10: Biosimilars
Biosimilars Biosimilars Revenues $ mil Q 4 - 21 Q 4 - 20 Act VPY Ex FX VPY 2021 2020 Act VPY Ex FX VPY Renflexis ® 51 39 30% 29% 186 135 37% 36% Ontruzant ® 26 37 (31)% (30)% 126 115 10% 7% Brenzys Œ 28 23 24% 22% 63 74 (15)% (20)% Other 13 4 NM NM 49 6 NM NM Biosimilars 118 103 15% 14% 424 330 28 %
Slide 11: Established Brands
Established Brands Revenue up/down Established B rands Revenues $ mil Q 4 - 21 Q 4 - 20 Act VPY Ex FX VPY 2021 2020 Act VPY Ex FX VPY Cardiovascular 398 434 (8)% (8)% 1,616 1,873 (14)% (17)% Respiratory 273 272 - 1% 1,009 1,151 (12)% (14)% Non - Opioid P ain, Bone & Derm. 208 199 4% 5% 830 833 - (4)
Slide 12: Revenue by region
$ mil 2021 (mid - year spin) 2020 (pre - spin) Actual VPY Ex FX VPY Europe and Canada 1,741 1,726 1 % ( 4 )% United States 1,383 1,408 ( 2 )% ( 2 )% Asia Pacific and Japan 1,173 1,535 ( 24 )% ( 25 )% China 933 873 7 % (1) % Latin America, Middle East, Russia and Africa 841 857 (2) % (2)% Other (1) 2
Slide 13: FY 2021 performance in line with expectations
FY 2021 performance in line with expectations $ mil (except EPS) Q 4 - 21 Q 4 - 20 (pre - spin) Actual VPY 2021 (mid - year spin) 2020 (pre - spin) Actual VPY Revenue 1,604 1,613 (1)% 6,304 6,532 (3)% Cost of sales 599 586 2% 2,382 2,119 12% Gross profit 1,005 1,027 (2)% 3,922 4,413 (11)% Gross marg
Slide 14: Lowered leverage in 2021
14 $ mil $100 million voluntary debt repayment in Q4 – net leverage as of December 31, 2021 ~3.5x Lowered leverage in 2021 June 30, 2021 September 30, 2021 December 31,2021 Reported c ash and c ash equivalents 730 1,008 737 Cash from Merck for IOM - exit inventory (1) (400) (320) (0) Cash available
Slide 15: 2021 an inflection year for performance
2021 an inflection year for performance (3%) reported (6%) ex - FX $ mil $6,532 $6,304 ~300 ~170 ~140 ~190 ~80 ~130 ~20 (1) (1) Other includes manufacturing sales to Merck and other third parties, and allocated amounts from pre - spin revenue hedging activit ies through the date of separation. 15
Slide 16: Volume growth can more than offset business headwinds at constant currency
Volume growth can more than offset business headwinds at constant currency $6,304 $6,100 – $6,400 ~(100) ~(100) ~(200 ) +600 − +700 (100) − (200) (100) − (200 ) $ millions (2) FX ~200 - 300 bps headwind to growth in 2022 (1) Other includes manufacturing sales to Merck and other third parties, and al
Slide 17: 2022 Guidance: Investing for future growth
2022 Guidance: Investing for future growth 17 $M, provided on a Non - GAAP basis, except Revenue FY 2021 guidance as of November 11, 2021 2021 Actuals 2022 Guidance Revenue $6,200 - $6,300 6,304 $6,100 - $6,400 Adjusted gross margin Low to mid - 60% range 64.7% Mid - 60% range SG&A (as % of revenue)
Slide 18: Q&A
Q&A “is ORGA i
Slide 19: Appendix
Appendix #O
Slide 20: Gross margin reconciliation
Gross margin reconciliation $ mil Q4 - 21 Q4 - 20 (pre - spin) 2021 (mid - year spin) 2020 (pre - spin) Revenue 1,604 1,613 6,304 6,532 Cost of sales 599 586 2,382 2,119 Gross p rofit 1,005 1,027 3,922 4,413 Gross m argin 62.7% 63.7% 62.2% 67.6% Amortization 34 21 103 86 One - time costs (1) 17 - 45
Slide 21: Net Income to Adjusted EBITDA reconciliation (Q4)
Net Income to Adjusted EBITDA reconciliation $ mil Q4 - 21 Q4 - 20 (pre - spin) Net income from continuing operations before income tax 236 525 Depreciation 28 14 Amortization (1) 34 21 Interest expense 98 - EBITDA 396 560 Restructuring costs - 17 One - time costs (2) 59 95 Acquired in - process res
Slide 22: Net Income to Adjusted EBITDA reconciliation (full year)
Net Income to Adjusted EBITDA reconciliation $ mil 2021 (mid - year spin) 2020 (pre - spin) Net income from continuing operations before income tax 1,529 2,752 Depreciation 92 56 Amortization (1) 103 86 Interest expense 258 - EBITDA 1,982 2,894 Restructuring costs 3 60 One - time costs (2) 231 126 A
Slide 23: Net Income to Adjusted Net Income reconciliation (Q4)
Net Income to Adjusted Net Income reconciliation $ mil (except EPS) Q4 - 21 Q4 - 20 (pre - spin) Net income from continuing operations before income tax 236 525 Amortization (1) 34 21 Restructuring costs - 17 One - time costs (2) 59 95 Acquired in - process research and development (3) 79 - Stock -
Slide 24: Net Income to Adjusted Net Income reconciliation (full year)
Net Income to Adjusted Net Income reconciliation $ mil (except EPS) 2021 (mid - year spin) 2020 (pre - spin) Net income from continuing operations before income tax 1,529 2,752 Amortization (1) 103 86 Restructuring costs 3 60 One - time costs (2) 231 126 Acquired in - process research and developmen
Slide 25: Broad and diverse portfolio
Number of products 11 5 49 Women’s Health Biosimilars Established Brands Broad and diverse portfolio 25 ® Œ