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
Organon Q4 and Full Year 2021 Earnings
Slide 2: Disclaimer statement
Disclaimer statement This text should be viewed in conjunction with Organon’s Full Year/Q4 2021 earnings call 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 provisions
Slide 3: Disclaimer statement, cont.
Disclaimer statement, cont. Non-GAAP Information This presentation includes information based on financial measures that are not recognized under generally accepted accounting principles in the United States (“GAAP”), such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Sh
Slide 4: Delivered on Year One expectations
Delivered on Year One expectations $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% 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 Contraception Marvelon™ and Mercilon™ Expanding contraception portfolio by recapturing February 2022 commercial rights to certain currently marketed products in Asia Acquisition of Forendo Pharma Endometriosis Completed in December 2021 Affects up to 170 million pat
Slide 7: Growth pillars delivered; Established Brands stabilized
Growth pillars delivered; Established Brands stabilized Q4-20 Actual Ex FX 2021 2020 Actual Ex FX $ mil Q4-21 (pre-spin) VPY VPY (mid-year spin) (pre-spin) VPY VPY Women’s Health 415 390 6% 6% 1,612 1,555 4% 2% Biosimilars 118 103 15% 14% 424 330 28% 25% Established Brands 1,037 1,062 (2)% (2)% 4,06
Slide 8: Q4 revenue: volume mostly offsets VBP and LOE
Q4 revenue: volume mostly offsets VBP and LOE (1%) reported (1%) ex-FX $ mil $1,613 $1,604 ~30 ~70 ~10 ~50 ~35 ~20 ~10 (1) (1) Other includes manufacturing sales to Merck and other third parties, and allocated amounts from pre-spin revenue hedging activities through the date of separation. 8
Slide 9: Women's Health
Women’s Health • Record Nexplanon sales in Q4 2021 • Executing on BD strategy in WH • Strong full year growth in Fertility Women’s Ex FX Ex FX Revenues $ mil Q4-21 Q4-20 Act VPY 2021 2020 Act VPY Health VPY VPY Nexplanon® 226 165 37% 37% 769 680 13% 12% Follistim® 59 57 4% 3% 237 193 23% 19% NuvaRin
Slide 10: Biosimilars
Biosimilars • Renflexis® – continues to show strong growth four years post launch • Ontruzant growth in US tempered by EU competition and Brazil tender timing • Aybintio® and Hadlima® – launched ex-US Biosimilars Revenues $ mil Q4-21 Q4-20 Act VPY Ex FX 2021 2020 Act VPY Ex FX VPY VPY Renflexis® 51
Slide 11: Established Brands
Established Brands • Stabilization of revenue in Q4 2021 • Limited LOE headwinds going forward • China retail growth up double digits Established Ex FX Ex FX Revenues $ mil Q4-21 Q4-20 Act VPY 2021 2020 Act VPY Brands VPY VPY Cardiovascular 398 434 (8)% (8)% 1,616 1,873 (14)% (17)% Respiratory 273 2
Slide 12: Solid performance in China despite VBP headwinds
Solid performance in China despite VBP headwinds 2021 2020 Actual Ex FX $ mil (mid-year spin) (pre-spin) VPY VPY Europe and Canada 1,741 1,726 1% (4)% United States 1,383 1,408 (2)% (2)% ~75% of Asia Pacific and Japan 1,173 1,535 (24)% (25)% sales generated China 933 873 7% (1)% ex-US Latin America,
Slide 13: FY 2021 performance in line with expectations
FY 2021 performance in line with expectations $ mil (except EPS) Q4-21 Q4-20 Actual VPY 2021 2020 Actual VPY (pre-spin) (mid-year spin) (pre-spin) 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 margin 62.7% 63.
Slide 14: Lowered leverage in 2021
Lowered leverage in 2021 $100 million voluntary debt repayment in Q4 – net leverage as of December 31, 2021 ~3.5x $ mil June 30, 2021 September 30, 2021 December 31,2021 Reported cash and cash 730 1,008 737 equivalents Cash from Merck for IOM-exit (400) (320) (0) inventory(1) Cash available to Organ
Slide 15: 2021 an inflection year for performance
2021 an inflection year for performance (3%) reported $ mil (6%) ex-FX $6,532 ~300 $6,304 ~190 ~170 ~80 ~140 ~20 ~130 (1) (1) Other includes manufacturing sales to Merck and other third parties, and allocated amounts from pre-spin revenue hedging activities 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 $ millions +600 − +700 (100) − (200) (100) − (200) $6,304 ~(100) $6,100 – $6,400 ~(100) ~(200) FX ~200-300 bps headwind to growth in 2022 (1) (2) (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 $M, provided on a Non- FY 2021 guidance as of 2021 Actuals 2022 Guidance GAAP basis, except November 11, 2021 Revenue 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) Mid-20%
Slide 18: Q&A
Q&A O “i ORGANON’
Slide 19: Appendix
Appendix O “i ORGANON’
Slide 20: Gross margin reconciliation
Gross margin reconciliation $ mil Q4-21 Q4-20 2021 2020 (pre-spin) (mid-year spin) (pre-spin) Revenue 1,604 1,613 6,304 6,532 Cost of sales 599 586 2,382 2,119 Gross profit 1,005 1,027 3,922 4,413 Gross margin 62.7% 63.7% 62.2% 67.6% Amortization 34 21 103 86 One-time costs(1) 17 - 45 - Stock-based
Slide 21: Net Income to Adjusted EBITDA reconciliation
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 research and de
Slide 22: Net Income to Adjusted EBITDA reconciliation
Net Income to Adjusted EBITDA reconciliation $ mil 2021 2020 (mid-year spin) (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 Acquired
Slide 23: Net Income to Adjusted Net Income reconciliation
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-based compensat
Slide 24: Net Income to Adjusted Net Income reconciliation
Net Income to Adjusted Net Income reconciliation $ mil (except EPS) 2021 2020 (mid-year spin) (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 development(3) 104 -
Slide 25: Broad and diverse portfolio
Broad and diverse portfolio Women’s Health Biosimilars Established Brands ™ ® Number of products 11 5 49 25