Johnson & Johnson · NYSE:JNJ
Johnson & Johnson — Q1 2020 Earnings Presentation
40 slides from Johnson & Johnson's earnings presentation, Apr 14, 2020
Slide 1: 1st Quarter 2020 Results
fohnucnafofuron 1st Quarter 2020 Results 1st Quarter 2020 Sales Worldwide Increased a. $20.7B 3.3% Diluted Earnings Per Share $2.17 Increased «. 56.1% Worldwide Increased a. 5.6% ited Earnings Per Share* estitures on an Excluding acquisitions/ operational basis Adjusted $2.30 | Increased « 9.5% d es
Slide 2: 1st Quarter 2020 Earnings Call
st 1 Quarter 2020 Earnings Call April 14, 2020
Slide 3: Cautionary Note on Forward-looking Statements
Cautionary Note on Forward-looking Statements This presentation contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strate
Slide 4: Strategic Partnerships, Collaborations & Licensing Arrangements
Strategic Partnerships, Collaborations & Licensing Arrangements During the course of this morning’s presentation, we will discuss a number of products and compounds developed in collaboration with strategic partners or licensed from other companies. The following is an acknowledgement of those relat
Slide 5: Agenda
Agenda 1 CEO Perspective on COVID-19 2 COVID-19 Vaccine Update 3 Sales Performance and Earnings Review 4 Capital Allocation and Guidance 5 Q&A Alex Gorsky Paul Stoffels, M.D. Joaquin Duato Chairman and Vice Chairman of the Vice Chairman of the Chief Executive Officer Executive Committee & Executive
Slide 6: Goluenafohweon
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Slide 7: Consecutive years of dividend increases
consecutive 58 years of dividend increases Inclusive of the April 2020 dividend declaration 7
Slide 8: We blend heart, science and ingenuity to change the trajectory of health
We blend Y), Science and Ingenuity to profoundly change the trajectory of health for humanity. folwuenafolmen
Slide 9: $250M Commitment to Support Frontline Health Workers
$250M Commitment to Support Frontline Health Workers over 10 years Plus an additional $50M 9
Slide 10: Pharmaceuticals Consumer Health Medical Devices
Pharmaceuticals Consumer Health Medical Devices 10
Slide 11: Pharmaceuticals Consumer Health
Pharmaceuticals Consumer Health 11
Slide 12: Medical Devices
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Slide 13: Unparalleled Scientific Expertise: Lead COVID-19 vaccine candidate
Unparalleled Scientific Expertise Lead COVID-19 vaccine candidate Available for emergency use in early 2021 13
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Slide 15: Our Credo
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Slide 16: We have mobilized a multi-pronged response to COVID-19
We have mobilized a multi-pronged response to COVID-19 Unprecedented > 1.6 MM cases A vaccine is critical to global health crisis > 100,000 deaths* eradicating the pandemic Screening our late-stage and Developing a vaccine Exploring immuno-modulators to protect marketed antiviral compound library, l
Slide 17: Key attributes of Janssen vaccine platform position us for leadership
Key attributes of Janssen vaccine platform position us for leadership WHO criteria for vaccine platform Key attributes of J&J Prioritization WHO – Vectored DNA RNA Vaccine Ad26® vector technology: potent, long-lasting Geneva – Jan 2020 cellular and humoral immunity 1 dose regimen Low or no risk of “
Slide 18: Designing a vaccine
Designing a vaccine COVID-19 Adenovirus January – March 2020 • January 2020: SARS-CoV-2 sequence available • Vaccine design commences Snipping of Injection of spike spike protein protein into Adenovirus • SARS-CoV-2 spike protein inserted into Ad26 vector • Multiple vaccine candidates constructed •
Slide 19: Road to the Janssen vaccine
Road to the Janssen vaccine: Accelerating R&D and manufacturing in parallel to get to 1B doses Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Select lead Vaccine Research & development, upscaling, clinical testing vaccine candidate available March 30, 2020 June 2020 September 2020 December 2020 Q1 2021 Ann
Slide 20: 1st Quarter 2020 Sales
1st Quarter 2020 Sales % CHANGE Dollars in Billions Regional Sales Results Q1 2020 Q1 2019 Reported Operational1 U.S. $10.7 $10.1 5.6% 5.6% Europe 4.8 4.6 4.7 7.5 Western Hemisphere 1.5 1.5 (0.1) 8.5 (ex U.S.) Asia-Pacific, Africa 3.7 3.8 (3.1) (1.9) International 10.0 9.9 1.0 4.0 Worldwide (WW) $20
Slide 21: 1st Quarter 2020 Financial Highlights
1st Quarter 2020 Financial Highlights Dollars in Billions, except EPS Reported %; Operational %1 Sales GAAP Earnings GAAP EPS $20.7 $20.0 $5.8 $2.17 $3.7 $1.39 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 3.3%; 4.8%1 54.6% 56.1% Adjusted Earnings2 Adjusted EPS2 $6.2 $2.30 $5.7 $2.10 Q1 2020 Q1 20
Slide 22: Consumer Health Highlights – 1st Quarter 2020
Consumer Health Highlights – 1st Quarter 2020 Solid growth across multiple franchises Reported: WW 9.2%, U.S. 21.0%, Int’l 0.3% Key Drivers of Operational Performance1 Operational1: WW 11.3%, U.S. 21.0%, Int’l 3.9% • Decline due to Baby Center divestiture, SKU rationalization and COVID-19 Baby Care
Slide 23: Pharmaceutical Highlights – 1st Quarter 2020
Pharmaceutical Highlights – 1st Quarter 2020 Strong growth across multiple therapeutic areas Key Drivers of Operational Performance1 Reported: WW 8.7%, U.S. 8.6%, Int’l 8.8% • Growth driven by strong uptake of STELARA in Crohn’s Disease and increased COVID-19 related demand, strength in TREMFYA in P
Slide 24: Medical Devices Highlights – 1st Quarter 2020
Medical Devices Highlights – 1st Quarter 2020 Sales decline driven by the negative impact of COVID-19 Reported: WW (8.2)%, U.S. (6.8)%, Int’l (9.4)% Key Drivers of Operational Performance1 Operational1: WW (6.9)%, U.S. (6.8)%, Int’l (6.9)% Interventional • Growth driven by Atrial Fibrillation proced
Slide 25: Medical Devices Highlights – 1st Quarter 2020
Medical Devices Highlights – 1st Quarter 2020 Sales decline driven by the negative impact of COVID-19 WW Sales $MM ■ Reported Growth ■ Operational Growth1 Vision Vision Care $1,067 (5.5)%, (4.5)% Contact Lenses/Other Surgical $814 $253 (1.3)%, (0.3)% (16.9)%, (15.9)% Orthopaedics Orthopaedics $2,038
Slide 26: Condensed Consolidated Statement of Earnings
Condensed Consolidated Statement of Earnings 1st Quarter 2020 Amount 2020 % to Sales Amount 2019 % to Sales % Increase (Unaudited; Dollar and Shares in Millions Except Per Share Figures) (Decrease) Sales to customers $20,691 100.0 $20,021 100.0 3.3 Cost of products sold 7,062 34.1 6,615 33.0 6.8 Gro
Slide 27: Adjusted Income Before Tax by Segment
1 Adjusted Income Before Tax by Segment 1st Quarter 2020 % to Sales 1Q 2020 1Q 2019 Pharmaceutical 45.3% 41.7% Medical Devices 24.2% 29.6% Consumer 24.5% 25.0% Total 35.0% 34.3% Pharmaceutical Medical Devices Consumer Health Expenses Not Allocated to Segments 2 1 Non-GAAP measure; excludes amortizat
Slide 28: Notable New Announcements in 1st Quarter 2020
st Notable New Announcements in 1 Quarter 20201 Pharmaceuticals • Regulatory Approvals: – STELARA (ustekinumab) – European Commission (EC) approval of expanded use for the treatment of pediatric patients (ages 6–11) with moderate to severe plaque psoriasis – ERLEADA (apalutamide) – EC granted market
Slide 29: Goluenafoluuen
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Slide 30: Business Continuity
Business Continuity Robust business continuity plans across our network Manufacturing Commercial Capabilities Research & Development Closely monitor and maintain critical Support healthcare providers Maintain our clinical operation inventory virtually and directly engage in areas priorities, protect
Slide 31: Capital Allocation Strategy
Capital Allocation Strategy Dollars in Billions Q1 2020 Cash and Marketable Capital Allocation $18.1 Securities HIGHER PRIORITY Debt ($27.6) Organic growth business needs Net Debt ($9.5) Free cash flow1 Free Cash Flow2 ~$3.0 Note: values may have been rounded Q1 2020: Competitive dividends Investmen
Slide 32: 2020 Guidance Assumptions
2020 Guidance Assumptions Enterprise • Inclusive of the macroeconomic impact of COVID-19 • The relative shape of the COVID-19 curve to be an acute, shorter term impact • Virus does not return in the fall at the same intensity levels we are currently experiencing • Recovery for procedures begins at t
Slide 33: Medical Devices: COVID-19 Framework
Medical Devices: COVID-19 Framework Q1 Q2 Q3 Q4 Initial Significant Stabilization Recovery Impact Impact 33
Slide 34: Medical Devices: COVID-19 Framework
Medical Devices: COVID-19 Framework Data Utilized • Q1 actual results in impacted regions • Coronavirus reported cases by country • Surgeon surveys and insights from our field force • Epidemiology data combined with infectious diseases, economic and other scientific experts’ opinions Key ASPAC Marke
Slide 35: Medical Devices: COVID-19 Framework
Medical Devices: COVID-19 Framework Approximately 1/3 of Procedures are Urgent or Non-Elective Franchise Urgent % Deferrable % Contact Lens N/A N/A Surgical Vision 10% 90% Biosurgery / Energy / General Surgery 40% 60% Endocutters 35% 65% ENT 10% 90% Aesthetics 5% 95% Hips / Knees / Other Ortho 10% 9
Slide 36: Medical Devices: COVID-19 Framework
Medical Devices: COVID-19 Framework Full Year 2020 Operational Sales Impact inclusive of Q1 Actuals: (-$4B) to (-$7B) Q1 Q2 Q3 Q4 Initial Impact Significant Impact Stabilization Recovery • China represented more than 40% • Impacts are less significant • Normalize and begin to recover • Continue to r
Slide 37: 2020 Guidance
2020 Guidance April January Comments Adjusted Operational (3.0%) - 0.5% 5.0% - 6.0% Sales1,2 $79.2 - $82.2B $85.8 - $86.6B Operational Sales2 (3.5%) - 0.0% 4.5% - 5.5% Net Impact Acq./Div: ~0.5% $77.5B - $80.5B $85.4B - $86.2B Estimated Reported Sales 3 (5.5%) - (2.0%) 4.0% - 5.0% FX ($1.7B) or (2.0
Slide 38: 2020 EPS Guidance Update
1 2020 EPS Guidance Update ~(10%) ~(3%) Base Business Net Other COVID-19 Adjusted Adjusted COVID-19 Impact Related Impacts Operational2,4 Reported3,4 $7.65 – $8.05 $7.50 – $7.90 (11.9%) – (7.3%) (13.6%) – (9.0%) $9.03 $9.08 $8.17 $7.85 $7.70 3 3 Euro Average Rate: April 2020 = $1.09 38 1 Represents
Slide 39: Q&A
Q&A Alex Gorsky Joaquin Duato Paul Stoffels, M.D. Joseph J. Wolk Chairman and Vice Chairman of the Vice Chairman of the Executive Vice President, Chief Executive Officer Executive Committee Executive Committee & Chief Financial Officer Chief Scientific Officer
Slide 40: Goluenafoluuen
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