Kenvue Inc. · NYSE:KVUE
Kenvue — Consumer Analyst Group of New York (CAGNY) 2024 Conference
48 slides from Kenvue's conference presentation, Feb 23, 2024
Slide 1: Made of all the Brands You Love
Made of all the Brands You Love
Slide 2: Disclaimer
Disclaimer Cautionary note on forward-looking statements claims; changes to applicable laws and regulations and other requirements imposed by This presentation contains “forward-looking statements” as defined in the Private stakeholders; challenges to intellectual property; changes in behavior and s
Slide 3: Made of all the Brands You Love
Made of all the Brands You Love
Slide 4: Realize the extraordinary power of everyday care
Realize the extraordinary power of everyday care Video to play
Slide 5: CAGNY
CAGNY February 23, 2024 Thibaut Mongon Chief Executive Officer Paul Ruh Chief Financial Officer Tina Romani Head of Investor Relations
Slide 6: Slide 6
Slide 7: Our Transformation Agenda
Our Transformation Agenda: 2024 Strategic Priorities Portfolio Overview Financial Overview Q&A 7
Slide 8: Our Continued Transformation
Our Transformation Our Continued Transformation 2023 2024 J&J Launched Accelerating Continuing Identifying Finalized Established Consumer new public brand exiting operational separation processes efficiencies Health company investment TSAs 8
Slide 9: 2024 Strategic Priorities
2024 Strategic Priorities K€ kenvue
Slide 10: 2024 Strategic Priorities
2024 Strategic Priorities 10
Slide 11: Operating at the Intersection of Healthcare & Consumer Goods
2024 Strategic Priorities Operating at the Intersection of Healthcare & Consumer Goods Consumer Healthcare Goods 11
Slide 12: Our 5 Pillars to Reach More Consumers
2024 Strategic Priorities Our 5 Pillars to Reach More Consumers 12
Slide 13: Creating Relevant Brand Experiences
2024 Strategic Priorities: Reach More Consumers Creating Relevant Brand Experiences 13
Slide 14: Increasing Engagement with Healthcare Professionals
2024 Strategic Priorities: Reach More Consumers Increasing #1 Doctor #1 Pediatrician #1 Dentist Engagement recommended recommended recommended with Healthcare Professionals 14
Slide 15: Executing Ideal Shopper Experiences
2024 Strategic Priorities: Reach More Consumers Executing Ideal Shopper Experiences 15
Slide 16: Continuous Cadence of Innovation
2024 Strategic Priorities: Reach More Consumers Continuous Cadence of Innovation 16
Slide 17: Ensuring Product Availability Where Consumers Are
2024 Strategic Priorities: Reach More Consumers Ensuring Product Availability Where Consumers Are 17
Slide 18: Our 5 Pillars to Reach More Consumers
2024 Strategic Priorities Our 5 Pillars to Reach More Consumers 18
Slide 19: Free Up Resources to Invest Behind Our Brands
2024 Strategic Priorities: Free Up Resources to Invest Behind Our Brands Free Up Resources to Invest Behind Our Brands Gross margin expansion Leverage Fuel operational efficiencies growth Fit for purpose 19
Slide 20: Foster a Culture of Performance & Impact
2024 Strategic Priorities: Foster a Culture of Performance & Impact Foster a Culture of Performance & Impact New performance & incentive system 20
Slide 21: Portfolio Overview
Portfolio Overview K€ kenvue
Slide 22: Diversified & Balanced Portfolio of Trusted Iconic Brands
Portfolio Overview Diversified & Balanced Portfolio of Trusted Iconic Brands Segment Sales1 Our 15 Priority Brands 28% 42% 30% Skin Health Essential Self & Beauty Health Care 1 Net Sales for Full Year 2023 22
Slide 23: Skin Health & Beauty
Portfolio Overview Skin Health & Beauty Clear strengths & opportunities to improve North America EMEA Full year 2023 0.4% 6.2% U.S. in-store Successful innovation & $4.4B Net sales executional missteps quarter over quarter organic growth1 improvement LATAM APAC 1.8% 25.5% -6.5% Continued double-digi
Slide 24: Taking Action to Stabilize U.S. Skin Health & Beauty
Portfolio Overview Taking Action to Stabilize U.S. Skin Health & Beauty Increasing in-store presence and prominence Elevating consumer & healthcare professional engagement Amplifying innovation 24
Slide 25: Skin Health & Beauty
Portfolio Overview Skin Health & Beauty From product innovation to marketing campaigns 25
Slide 26: Essential Health
Portfolio Overview Essential Health Executing value realization & premiumization strategies Full year 2023 $4.6B Net sales 3.6% Organic growth 1 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in the Appendix to this presentation and available at invest
Slide 27: Essential Health
Portfolio Overview Essential Health From product innovation to marketing campaigns 27
Slide 28: Self Care
Portfolio Overview Self Care Sustained revenue & share gains in 2023 Full year 2023 $6.5B Net sales 8.4% Organic growth 1 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in the Appendix to this presentation and available at investors.kenvue.com. 28
Slide 29: Self Care
Portfolio Overview Self Care From product innovation to marketing campaigns 29
Slide 30: Kenvue is Uniquely Positioned to Win
Key Takeaways Kenvue is Uniquely Positioned to Win • Reaching more consumers • Freeing-up resources to invest behind our brands • Fostering a culture of performance & impact 30
Slide 31: Financial Overview
Financial Overview K€ kenvue
Slide 32: Full-Year 2024 Guidance Summary
Financial Overview Full-Year 2024 Guidance Summary FY 2024 Organic growth1 2.0% - 4.0% Adjusted operating income margin1 Slightly below 2023 Adjusted diluted earnings per share1,2 $1.10 - $1.20 1 Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in the Appe
Slide 33: 2023 Organic Growth Considerations
Financial Overview 2023 Organic Growth1 Considerations Q1’23 Q2’23 Q3’23 Q4’23 Higher incidences of cough, cold Delayed season and and flu outside the U.S. lower incidence levels Self-Care Retailer inventory re-build, following Q4’22 demand surge Organic growth 15.3% 14.2% 6.7% (2.0%) Retailer inven
Slide 34: Significant Adjusted Gross Profit Margin Expansion
Financial Overview Significant Adjusted Gross Profit Margin1 Expansion Adjusted gross profit margin1 improvement Sources of 2024 expansion of 230 bps over 5-year horizon Adjusted Gross Profit Margin1 60.0% • Carry-over pricing 59.0% 59% ~59% • Value realization 58.4% 58.0% 58.1% • Premiumization 57.
Slide 35: 2024 Adjusted Diluted EPS Considerations
Financial Overview 2024 Adjusted Diluted EPS1 Considerations $1.29 $1.20 $(0.02) $1.15 Standalone $(0.04) $(0.04) Midpoint public co Interest Normalized $(0.04) $1.10 costs expense tax rate Share count 2024 vs 2023 Like-for-like view 2023 Adjusted 2024 Adjusted 2024 Adjusted diluted EPS1 diluted EPS
Slide 36: Commitment to Disciplined Capital Stewardship
Financial Overview Commitment to Disciplined Capital Stewardship Invest in our iconic brands for profitable growth Robust durable cash flow Healthy balance Attractive Disciplined Share sheet dividend policy M&A repurchases • Strong liquidity • Quarterly dividend • Continuously • Initiated share posi
Slide 37: Our Commitment to Long-term Value Creation
Financial Overview Our Commitment to Long-term Value Creation Durable Strong Reliable cash Disciplined top-line growth profitability flow generation financial policy Organic growth1 Earnings growth Durable cash flow Disciplined capital competitive with outpacing organic generation and strong allocat
Slide 38: Q&A
Q&A Thibaut Mongon Chief Executive Officer Paul Ruh Chief Financial Officer Tina Romani Head of Investor Relations
Slide 39: Appendix
Appendix 39
Slide 40: Organic Growth
Organic Growth Fiscal Twelve Months Ended December 31, 2023 vs January 1, 2023 (1) Impact of foreign Reported Net sales change currency Organic growth (2) (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 421 7.0 % $ (84) $ 505 8.4 % Skin Health and Beauty 28 0.6 (52)
Slide 41: Organic Growth
Organic Growth Fiscal Twelve Months Ended January 1, 2023 vs January 2, 2022 Impact of foreign Acquisitions and Reported Net Sales change currency divestitures Organic growth(1) (Unaudited; Dollars in Millions) Amount Percent Amount Amount Amount Percent Self Care $ 387 6.9 % $ (226) $ — $ 613 10.9
Slide 42: Total Segment Net Sales and Total Adjusted Operating Income
Total Segment Net Sales and Total Adjusted Operating Income Net Sales Net Sales Fiscal Three Months Ended Fiscal Twelve Months Ended (Unaudited; Dollars in Millions) December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Self Care 1,537 1,568 6,451 6,030 Skin Health and Beauty 1,001 1,0
Slide 43: Non-GAAP Reconciliations (FY’23)
Non-GAAP Reconciliations (FY’23) Fiscal Twelve Months Ended December 31, 2023 (Unaudited; Dollars in Millions) As Reported Adjustments Reference As Adjusted Net sales $ 15,444 — $ 15,444 Gross profit $ 8,643 $ 375 (a),(b),(c),(d) $ 9,018 Gross profit margin 56.0 % 58.4 % Operating income $ 2,512 $ 9
Slide 44: Non-GAAP Reconciliations (FY’22)
Non-GAAP Reconciliations (FY’22) Fiscal Twelve Months Ended January 1, 2023 (Unaudited; Dollars in Millions) As Reported Adjustments Reference As Adjusted Net sales $ 14,950 — $ 14,950 Gross profit $ 8,285 $ 403 (a),(b) $ 8,688 Gross profit margin 55.4 % 58.1 % Operating income $ 2,675 $ 673 (a)-(e)
Slide 45: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Three Months Ended Fiscal Twelve Months Ended (Unaudited) December 31, 2023 January 1, 2023 December 31, 2023 January 1, 2023 Effective tax rate 8.4 % 29.5 % 24.0 % 21.7 % Adjustments: Tax-effect on special item adjustments 7.9 1.3 (1.0) 1.6 Removal of tax benefits
Slide 46: Free Cash Flow
Free Cash Flow Fiscal Twelve Months Ended (Unaudited; Dollars in Billions) December 31, 2023 Net cash flows from operating activities $ 3.2 Purchases of property, plant, and equipment (0.5) Free cash flow (non-GAAP) $ 2.7 46
Slide 47: Dividend Payout and Gross Leverage Ratios
Dividend Payout and Gross Leverage Ratios (Unaudited; Dollars in Millions) Fiscal Twelve Months Ended December 31, 2023 Adjusted net income Dividend payout ratio(2) Dividends paid Annualized dividends(1) (Non-GAAP) (Non-GAAP) $766 $1,532 $2,383 64% (Unaudited; Dollars in Millions) 2023 Adjusted EBIT
Slide 48: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Fiscal Three Months Ended Fiscal Twelve Months Ended (Unaudited) December 31, 2023 December 31, 2023 Diluted earnings per share $ 0.17 $ 0.90 Adjustments: Separation-related costs 0.07 0.25 Operating model optimization initiatives and restructuring expense 0.02 0.
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