Bausch Health Companies Inc. · TSX:BHC
Bausch Health Companies — Q4 2022 Earnings Presentation
62 slides from Bausch Health Companies's earnings presentation, Feb 23, 2023
Slide 1: 4Q22 and FY22 Earnings Presentation
4Q22 and FY22 Earnings Presentation February 23, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking information and statements, within They also include risks and uncertainties related to the challenges the the meaning of applicable securities laws (collectively, “forward-looking Company faces as a result of the closing of the i
Slide 3: Non-GAAP Information
Non-GAAP Information To supplement the financial measures prepared in accordance with U.S. Expense, projected Adjusted Tax Rate to projected GAAP tax rate and generally accepted accounting principles (GAAP), the Company uses certain projected organic growth (non-GAAP) to projected reported revenue g
Slide 4: Agenda
Strategy & 4Q22 & FY22 1 Business Update 2 Financial Results Agenda 3 2023 Guidance 4 2023 Priorities 4
Slide 5: Strategy & Business Update
1 Strategy & Business Update 5
Slide 6: Delivered on Our Strategic Priorities in 2022
Delivered Achieved solid financial and commercial on Our performance for the fourth quarter Strategic Priorities in Continued to make progress on our strategic alternatives 20221 Created long-term value for stakeholders 1.See Slide 2 for further information on forward looking statements. 6
Slide 7: 2022 Results Bausch Health (excl. B+L)
2022 Results Bausch Health (excl. B+L) Q4 Reported: Flat Organic1: 2% | FY Reported: (7%) Organic1: (1%) Salix Q4 Reported: 4% Organic1: 4% FY Reported: 1% Organic1: 1% International Q4 Reported: (5%) Organic1: 2% FY Reported: (15%) Organic1: 5% • Targeted commercial strategies and • Continue to gro
Slide 8: Strategic Alternatives Progress
Strategic Alternatives Progress1 Since B+L IPO on May 10, 2022: De-levered Bausch Health (excl. B+L) significantly through debt exchange and multiple open market repurchase initiatives - debt principal net of unrestricted cash reduced by $3.2B post IPO Unrestricted B+L from BHC covenants Net leverag
Slide 9: Looking Forward: Creating Long-Term Value
Looking Forward: Creating Long-Term Value1 Salix: investing for growth Solta Medical: returning to growth Increasing investment to activate Expansion of DTC campaign in the US consumers for both IBS-D and HE Expansion and strengthening of our sales Expanding our sales force footprint in the
Slide 10: 4Q22 & FY22 Financial Results
2 4Q22 & FY22 Financial Results 10
Slide 11: 4Q22 Revenue
Consolidated 4Q22 Revenue Revenue change vs 4Q21, in millions USD Bausch Health Bausch Health Bausch + Lomb Consolidated (excl. B+L) $2,193 $2,196 21% 18% 8% $1,197 49% 19% $996 63% 22% Vision Care 4Q22 4Q21 Salix International Surgical Solta Medical Diversified Products Ophthalmic Pharmaceuticals R
Slide 12: FY22 Revenue
Consolidated FY22 Revenue Revenue change vs FY21, in millions USD Bausch Health Bausch Health Bausch + Lomb Consolidated (excl. B+L) $8,124 $8,434 18% 22% 7% $4,356 48% 19% $3,768 63% 23% Vision Care FY22 FY21 Salix International Surgical Solta Medical Diversified Products Ophthalmic Pharmaceuticals
Slide 13: 4Q22 Bausch Health (excl. B+L) Revenue
Unconsolidated 4Q22 Bausch Health (excl. B+L) Revenue Revenue change vs 4Q21, in millions USD Salix International Solta Medical Diversified 11% 82% 24% 23% 12% 48% $581 $261 $99 $256 50% 6% 6% 28% 77% 27% 6% Xifaxan® Relistor® Consoles Consumables Neuro Ortho Derm EMEA Latam Canada Trulance® Other G
Slide 14: FY22 Bausch Health (excl. B+L) Revenue
Unconsolidated FY22 Bausch Health (excl. B+L) Revenue Revenue change vs FY21, in millions USD Salix International Solta Medical Diversified 10% 24% 24% 81% 13% 47% $2,090 5% $988 $300 $978 52% 7% 25% 29% 76% 7% Xifaxan® Trulance® Consoles Consumables Neuro Ortho Derm EMEA Latam Canada Relistor® Othe
Slide 15: 4Q22 Bausch Health (excl. B+L) Highlights by Segment
Unconsolidated 4Q22 Bausch Health (excl. B+L) Highlights by Segment Revenue change vs 4Q21, in millions USD Salix International 4Q22 Revenue: $581M 4Q22 Revenue: $261M Reported: 4%, Organic2: 4% Reported: (5%), Organic2: 2% Xifaxan ® retail TRx1 volume flat Strong growth in Europe and LATAM Xi
Slide 16: FY22 Bausch Health (excl. B+L) Highlights by Segment
Unconsolidated FY22 Bausch Health (excl. B+L) Highlights by Segment Revenue change vs FY21, in millions USD Salix International FY22 Revenue: $2,090M FY22 Revenue: $988M Reported: 1%, Organic2: 1% Reported: (15%), Organic2: 5% Xifaxan ® retail TRx1 volume flat Strong growth in Canada and Europe
Slide 17: 4Q22 Bausch + Lomb Revenue
Unconsolidated 4Q22 Bausch + Lomb Revenue Revenue change vs 4Q21, in millions USD Ophthalmic Revenue Vision Care Surgical Pharmaceuticals $996 $1,001 20% 35% 39% $626 53% $188 $182 65% 61% 27% Implantables Equipment 4Q22 4Q21 Consumer Contact Lens Consumables/Other U.S. International Reported 0% 0%
Slide 18: FY22 Bausch + Lomb Revenue
Unconsolidated FY22 Bausch + Lomb revenue Revenue change vs FY21, in millions USD Ophthalmic Revenue Vision Care Surgical Pharmaceuticals $3,768 $3,765 27% 37% 40% $2,373 53% $718 $677 63% 60% 20% Implantables Equipment FY22 FY21 Contact Lens Consumer Consumables/Other U.S. International Reported 0%
Slide 19: 4Q22 and FY22 Revenue Performance
Consolidated 4Q22 and FY22 Revenue Performance 4Q22 4Q21 Reported Organic1 FY22 FY21 Reported Organic1 Salix $581M $559M 4% 4% $2,090M $2,074M 1% 1% International2 $261M $276M (5%) 2% $988M $1,166M (15%) 5% Solta Medical2 $99M $89M 11% 20% $300M $308M (3%) 2% Diversified2 $256M $271M (6%) (6%) $978M
Slide 20: 4Q22 GAAP Financial Results
Consolidated 4Q22 GAAP Financial Results Favorable Three Months Ended (Unfavorable) 12.31.22 12.31.21 Reported Revenues $2,193M $2,196M 0% GAAP Gross Profit $1,228M $1,229M 0% GAAP Gross Margin 56.0% 56.0% 0 bps Selling, A&P $450M $454M 1% GAAP G&A $216M $226M 4% R&D $142M $117M (21%) GAAP Total Ope
Slide 21: 4Q22 Non-GAAP Financial Results
Consolidated 4Q22 Non-GAAP1 Financial Results Three Months Ended Favorable (Unfavorable) Constant 12.31.22 12.31.21 Change Currency1 Revenues $2,193M $2,196M 0% 3% Adj. Gross Profit1 $1,541M $1,570M (2%) 1% Adj. Gross Margin1 70.3% 71.5% (120 bps) Selling, A&P (same as reported) $450M $454M 1% (3%)
Slide 22: Balance Sheet Summary
Consolidated Balance Sheet Summary As of As of As of As of As of 12.31.22 9.30.22 6.30.22 3.31.22 12.31.21 Cash, cash equivalents1 $591M $497M $1,879M $2,460M $2,119M Revolving Credit Drawn5 $470M $450M $425M $0M $285M Senior Secured Debt (principal amount)2 $13,300M $13,388M $10,275M $8,473M $7,958
Slide 23: Long-Term Debt Maturity Profile
Consolidated Long-Term Debt Maturity Profile In millions USD As of December 31, 20221,2 $M Total 2023 2024 2025 2026 2027 2028 2029 2030 2031 Restricted Revolver $470 - - - - $470 - - - - Term Loan $1,937 - - - - $1,938 - - - - Secured Notes $6,906 - - $1,680 - $1,500 $3,374 - $352 - Unsecured Notes
Slide 24: Bausch Health (excl. B+L) Debt Maturity Profile
Unconsolidated Bausch Health (excl. B+L) Debt Maturity Profile1,2,4 As of December 31, 2022, in millions $6,000 $4,990 Bausch Health (excl. B+L) $5,000 Debt $4,550 $4,000 Total: $16.6B2 • Restricted: $15.6B • Unrestricted: $1B3 $3,000 $2,764 Debt down ~$0.5B in 4Q22 vs 3Q22 $2,000 $1,609 Executed op
Slide 25: 2023 Guidance
3 2023 Guidance 25
Slide 26: Bausch Health (excl. B+L) 2023 February Guidance
Unconsolidated Bausch Health (excl. B+L) 2023 February Guidance1,2 All ranges are approximate and in USD LOEs/ Base 2023 Feb 2022 Actual Currency Impact Divestitures and Dis-synergies Investment Performance Guidance Discontinuations Revenue2 +$185M Bausch + Lomb +$10M $[X]B - $[X]B $4.45B Bausch Hea
Slide 27: Bausch Health (excl. B+L) Full-Year Outlook
Unconsolidated Bausch Health (excl. B+L) Full-Year Outlook3 All assumptions are approximate and in USD 2023 Feb Guidance Total Revenues $4.45B - $4.60B Adjusted EBITDA (non-GAAP)1 $2.30B - $2.40B Adjusted Operating Cash Flow (non-GAAP)1 ~$625M Key Assumptions 2023 Feb Guidance Adjusted Gross Margin
Slide 28: 2023 Priorities
4 2023 Priorities 28
Slide 29: 2023 Bausch Health (excl. B+L) Priorities
2023 Bausch Health (excl. B+L) Priorities1 Growth Performance Focus Unlocking Value Execute with Cultivate a Intensify focus Innovate & operational high-performance, and operating rigor evaluate strategic excellence across results-oriented behind R&D alternatives the enterprise culture and business
Slide 30: Powering up our potential
BAUSCH Health Powering up our potential
Slide 31: Appendix
BAUSCH: Health Appendix I
Slide 32: Inventory in Select U.S. Businesses (QTD)
Inventory in Select U.S. Businesses (QTD)1 Months on Hand As of As of As of As of Business Change Change Sep 30, Dec 31, Sep 30, Dec 31, Units 2021 2021 4Q21 2022 2022 4Q22 Ortho 1.25 1.03 (0.22) 1.18 1.07 (0.11) Dermatologics Neurology 1.02 1.17 0.15 1.14 1.17 0.03 Salix 1.00 0.99 (0.01) 0.96 1.02
Slide 33: Inventory in Select U.S. Businesses (YTD)
Inventory in Select U.S. Businesses (YTD)1 Months on Hand As of As of As of As of Business Change Change Dec 31, Dec 31, Dec 31, Dec 31, Units 2020 2021 YTD 2021 2021 2022 YTD 2022 Ortho 0.72 1.03 0.31 1.03 1.07 0.04 Dermatologics Neurology 0.56 1.17 0.61 1.17 1.17 0 Salix 0.74 0.99 0.25 0.99 1.02 0
Slide 34: FY22 GAAP Financial Results
Consolidated FY22 GAAP financial results Favorable Twelve Months Ended (Unfavorable) 12.31.22 12.31.21 Reported Revenues $8,124M $8,434M (4%) GAAP Gross Profit $4,530M $4,431M 2% GAAP Gross Margin 55.8% 52.5% 330 bps Selling, A&P $1,806M $1,801M 0% GAAP G&A $819M $823M 0% R&D $529M $465M (14%) GAAP
Slide 35: FY22 Non-GAAP Financial Results
Consolidated FY22 Non-GAAP Financial Results Twelve Months Ended Favorable (Unfavorable) Constant 12.31.22 12.31.21 Reported Currency1 Revenues $8,124M $8,434M (4%) (1%) Adj. Gross Profit 1 $5,760M $6,040M (5%) (2%) Adj. Gross Margin 1 70.9% 71.6% (70 bps) Selling, A&P (same as reported) $1,806M $1,
Slide 36: 4Q22 Segment Profit
Unconsolidated 4Q22 Segment Profit1 Solta Diversified 4Q22 Salix International Total Medical Products Segment Revenue $581M $261M $99M $256M $1,197M Segment Profit1 $422M $82M $47M $162M $713M Solta Diversified 4Q21 Salix International Total Medical Products Segment Revenue $559M $276M $89M $271M $1
Slide 37: FY22 Segment Profit
Unconsolidated FY22 Segment Profit1 Solta Diversified FY22 Salix International Total Medical Products Segment Revenue $2,090M $988M $300M $978M $4,356M Segment Profit1 $1,489M $324M $135M $612M $2,560M Solta Diversified FY21 Salix International Total Medical Products Segment Revenue $2,074M $1,166M
Slide 38: 4Q22 Other Financial Information
Consolidated 4Q22 Other Financial Information In millions USD unless otherwise indicated Three Months Ended Favorable (Unfavorable) December 31, December 31, Constant Reported 2022 2021 Currency1 Cash Interest Paid $295M $363M 19% 19% Net Interest Expense (GAAP) $301M $342M 12% 12% Non-cash adjustme
Slide 39: FY22 Other Financial Information
Consolidated FY22 Other Financial Information In millions USD unless otherwise indicated Twelve Months Ended Favorable (Unfavorable) December 31, December 30, Constant Reported 2022 2021 Currency1 Cash Interest Paid $1,540M $1,419M (9%) (9%) Net Interest Expense (GAAP) $1,450M $1,419M (2%) (2%) Non-
Slide 40: 4Q22 Non-GAAP Adjustments EPS Impact
Consolidated 4Q22 Non-GAAP Adjustments EPS Impact In millions USD unless otherwise indicated Three Months Ended December 31, 2022 December 31, 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) share Impact Net income (loss) ($410) ($1.13) $72 $0.20 Non-GAAP adjustments:1
Slide 41: FY22 Non-GAAP Adjustments EPS Impact
Consolidated FY22 Non-GAAP Adjustments EPS Impact In millions USD unless otherwise indicated Twelve Months Ended December 31, 2022 December 31, 2021 Income Earnings per Income Earnings per (Expense) Share Impact (Expense) share Impact Net income (loss) ($212) ($0.59) ($937) ($2.61) Non-GAAP adjustme
Slide 42: 4Q22 Reconciliation of Reported Operating Income to Adjusted EBITA
Consolidated 4Q22 Reconciliation of Reported Operating Income to Adjusted EBITA (Non-GAAP)1 In millions USD unless otherwise indicated Q4 2022 Q4 2021 Gross Gross Selling & G&A and R&D Operating Operating Gross Gross Selling and G&A and R&D Operating Operating Profit Margin Advertising Other Expense
Slide 43: FY22 Reconciliation of Reported Operating Income to Adjusted EBITA
Consolidated FY22 Reconciliation of Reported Operating Income to Adjusted EBITA (Non-GAAP)1 In millions USD unless otherwise indicated YTD December 2022 YTD December 2021 Gross Gross Selling & G&A and R&D Operating Operating Gross Gross Selling and G&A and R&D Operating Operating Profit Margin Adver
Slide 44: 4Q22 & FY22 Reconciliation of Net Income (Loss) to Adjusted EBITDA
4Q22 & FY22 Reconciliation of Reported Net Income (Loss) to EBITDA1 and Adjusted EBITDA1 In millions USD Three months ended Dec 31, Twelve months ended Dec 31, 2022 2021 2022 2021 Net (loss) income ($410) $72 ($212) ($937) Interest expense, net 301 342 1,450 1,419 Provision for (benefit from) income
Slide 45: 2022 Organic Revenue Growth (non-GAAP) by Segment
2022 Organic Revenue Growth (non-GAAP)1 by Segment Organic Growth 1Q22 2Q22 1H22 3Q22 4Q22 2H22 FY22 Salix (2%) (3%) (2%) 3% 4% 4% 1% International2 8% 2% 5% 10% 2% 6% 5% Solta Medical2 0% (22%) (11%) 4% 20% 14% 2% Diversified Products2 (16%) (11%) (14%) (17%) (6%) (12%) (13%) Total Bausch (3%) (5%)
Slide 46: 1Q22 Reconciliation of Reported Revenue to Organic Revenue
1Q22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Three Months Ended Change in Change in Reported Organic March 31, 2022 March 31, 2021 Revenue Revenue1 Changes in Revenue Organic Revenue Exchange Organic Revenue as Divestitures Revenue as reported Rates
Slide 47: 2Q22 Reconciliation of Reported Revenue to Organic Revenue
2Q22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Three Months Ended Change in Change in Reported Organic June 30, 2022 June 30, 2021 Revenue Revenue1 Changes in Organic Revenue Divestitures Organic Revenue Exchange Revenue (Non- as and Revenue (Non- as
Slide 48: 1H22 Reconciliation of Reported Revenue to Organic Revenue
1H22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Six Months Ended Change in Change in Reported Organic June 30, 2022 June 30, 2021 Revenue Revenue1 Changes in Organic Revenue Divestitures Organic Revenue Exchange Revenue (Non- as and Revenue as reported
Slide 49: 3Q22 Reconciliation of Reported Revenue to Organic Revenue
3Q22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Three Months Ended Change in Change in Reported Organic September 30, 2022 September 30, 2021 Revenue Revenue1 Changes in Organic Divestitures Organic Revenue Exchange Revenue Revenue and Revenue (Non- as
Slide 50: 4Q22 Reconciliation of Reported Revenue to Organic Revenue
4Q22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Three Months Ended Change in Change in Reported Organic December 31, 2022 December 31, 2021 Revenue Revenue1 Changes in Organic Organic Revenue as Exchange Revenue Revenue Divestitures and Revenue reporte
Slide 51: 2H22 Reconciliation of Reported Revenue to Organic Revenue
2H22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Six Months Ended Change in Change in Reported Organic December 31, 2022 December 31, 2021 Revenue Revenue1 Changes in Organic Revenue Divestitures Organic Revenue Exchange Revenue as and Revenue (Non- as
Slide 52: FY22 Reconciliation of Reported Revenue to Organic Revenue
FY22 Reconciliation of Reported Revenue to Organic Revenue1,2 and Organic Revenue Growth1,3 For Twelve Months Ended Change in Change in Reported Organic December 31, 2022 December 31, 2021 Revenue Revenue1 Revenue Changes in Organic Revenue Divestitures Organic as Exchange Revenue as and Revenue rep
Slide 53: 4Q22 and FY22 Reconciliation of Cash from Operating Activities
4Q22 and FY22 Reconciliation of Reported Cash Provided by Operating Activities to Adjusted Cash Flows from Operations (Non-GAAP)1 In millions USD Three Months Ended Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Cash provided by (used in) operating activities $475 $24 ($728) $1,42
Slide 54: Reconciliation of Operating Cash Flow excluding Bausch + Lomb
4Q22 and FY22 Reconciliation of reported cash provided by operating activities to adjusted cash flows from operations excluding Bausch + Lomb (non-GAAP)1 In millions USD Three Months Ended Twelve Months Ended December 31, 2022 December 31, 2022 Bausch Health Bausch Health Bausch Health Bausch Health
Slide 55: Trailing Twelve Months Adjusted EBITDA
Trailing Twelve Months Adjusted EBITDA1 In millions USD Trailing Twelve Months Ended Dec-22 Sep-22 Jun-22 Mar-22 Dec-21 Net (loss) income ($212) $270 $139 ($396) ($937) Interest expense, net 1,450 1,491 1,458 1,413 1,419 Provision for (benefit from) income taxes 83 (21) (30) (119) (87) Depreciation
Slide 56: Reconciliation of Net (Loss) Income to Adjusted EBITDA (excl. B+L)
Reconciliation of Reported Net (Loss) Income to Adjusted EBITDA (excl. B+L)1 Year Ended December 31, 2022 Year Ended December 31, 2021 Bausch Bausch Bausch Bausch Health Health Health Health Companies Excluding Companies Excluding (in millions) Inc. B+L B+L Inc. B+L B+L Net (loss) income $ (212) $ 1
Slide 57: Non-GAAP Appendix
Non-GAAP Appendix Description of Non-GAAP Financial Measures Restructuring and integration costs: The Company has incurred restructuring costs as it To supplement the financial measures prepared in accordance with U.S. GAAP, the Company implemented certain strategies, which involved, among other thi
Slide 58: Non-GAAP Appendix
Non-GAAP Appendix Acquisition-related costs and adjustments excluding amortization of intangible assets: matters, and net (gain) loss on sales of assets. The Company has also excluded expenses The Company has excluded the impact of acquisition-related contingent consideration non- associated with in
Slide 59: Non-GAAP Appendix
Non-GAAP Appendix Adjusted Net Income and Adjusted Net Income Attributable to Bausch Health Organic Growth/Change and Organic Revenue Adjusted net income (loss) (non-GAAP) is Net Income (its most directly comparable GAAP Organic revenue and organic revenue change are non-GAAP measures. Non-GAAP meas
Slide 60: Non-GAAP Appendix
Non-GAAP Appendix Acquisitions, divestitures and discontinuations: In order to present period-over-period Adjusted Gross Profit/Adjusted Segment Gross Profit and Adjusted organic revenue (non-GAAP) growth/change on a comparable basis, revenues associated with Gross Margin/Adjusted Segment Gross Marg
Slide 61: Non-GAAP Appendix
Non-GAAP Appendix Adjusted SG&A Expenses and Adjusted G&A Expenses Adjusted SG&A expenses (non-GAAP) represents selling, general and administrative expenses The Company believes that Total Adjusted Operating Expenses (non-GAAP) is useful to investors as (“SG&A expenses”) (its most directly comparabl
Slide 62: Non-GAAP Appendix
Non-GAAP Appendix Constant Currency the actual financial performance of the Company and to forecast future results as part of its guidance. Changes in the relative values of non-U.S. currencies to the U.S. dollar may affect the Company’s Management believes these metrics are a useful measure to eval
Bausch Health Companies — Q4 2022 Earnings Presentation on 6ix