Slide 1: Earnings Conference Call Fiscal Q1 2024
Earnings Conference Call Fiscal Q1 2024 February 9, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement Regarding Forward-Looking Statements This presentation contains express or implied "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements
Slide 3: Agenda and Presenters
Agenda and Presenters Today’s topics: Dev Kurdikar Chief Executive Officer embecta Overview FY24 Strategic Priorities Business Review Jake Elguicze Chief Financial Officer Revenue and Earnings Review Guidance Pravesh Khandelwal Q&A Vice President, Investor Relations 3
Slide 4: Mission and Vision
Mission To develop and provide solutions that make life better for people living with diabetes Advance every day together Vision A life unlimited by diabetes 4
Slide 5: Strategic Priorities for Fiscal Year 2024
Strategic Priorities for Fiscal Year 2024 Strengthen and optimize core business • Maintain core injection business revenue • Navigate through operating environment; manage costs Separate and stand-up • Complete ERP implementation • Operationalize embecta systems and resources, and exit transition se
Slide 6: Q1 Fiscal Year 2024 Enterprise Highlights
Q1 Fiscal Year 2024 Enterprise Highlights • Continued execution leads to strong results that exceeded our internal expectations • Published fiscal 2024 environmental, social, and governance (ESG) strategy report highlighting ESG initiatives and progress • Six embecta abstracts accepted as posters to
Slide 7: Separation and standup progress: Implementing global ERP, shared service and distribution network
Separation and standup progress: Implementing our global ERP system, shared service and distribution network Completed To be completed Suzhou, China Holdrege, NE Dun Laoghaire, Ireland Manufacturing Local pen needle production World’s largest manufacturer World’s largest manufacturer for China and A
Slide 8: Our patch pump in development is a PWD and HCP-informed solution
Our patch pump in development is a PWD and HCP-informed solution 510(k) application under review by the FDA for the open-loop patch pump Patch pump designed for differentiated experience and to reduce the adoption barrier Designed specifically for people embecta’s embecta’s Tubeless Tubed with T2D i
Slide 9: Q1 Fiscal Year 2024 vs. Q1 Fiscal Year 2023 Revenue
Q1 Fiscal Year 2024 vs. Q1 Fiscal Year 2023 Revenue Dollars in Millions Three Months Ended % Increase / Decrease As-Reported Foreign Currency Constant Currency December 31, 2023 December 31, 2022 Revenue Growth Impact Revenue Growth U.S. $148.6 $149.3 (0.5)% ꟷ (0.5)% International $128.7 $126.4 1.8%
Slide 10: Q1 FY24 Financial Highlights
Q1 FY24 Financial Highlights Revenue Q1 FY24 revenue of $277.3 million, up 0.6% on an as-reported basis; down 0.3% on a constant currency basis, as compared to the prior year period Gross Q1 FY24 GAAP gross profit and margin of $185.9 million and 67.0%, compared to $188.8 million and 68.5% in the pr
Slide 11: Fiscal Year 2024 Updated Financial Guidance
Fiscal Year 2024 Updated Financial Guidance Dollars in Millions, Current Previous (1) except per share and percentages Low High Low High Revenue $1,094 $1,116 $1,085 $1,105 As-Reported % (2.4%) (0.4%) (3.0%) (1.0%) Constant Currency % (2.0%) 0.0% (2.0%) 0.0% F/X % (0.4%) ~ (1.0%) Contract Manufactur
Slide 12: Q&A
Q&A embecta’
Slide 13: Appendix
Appendix embecta’
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures In evaluating our operating performance, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures including (i) earnings before interest, taxes, depreciation, and amortization (“EBITDA”), (ii) Adjusted EBITDA
Slide 15: Adjusted Gross Profit Margin Reconciliation
Adjusted Gross Profit Margin Reconciliation Dollars in Millions, except percentages Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 Gross Profit $185.9 $188.8 Gross Profit Margin 67.0% 68.5% Stock-based compensation expense 0.1 — Amortization of intangible assets (1) 0.3 0.
Slide 16: Adjusted Operating Income Margin Reconciliation
Adjusted Operating Income Margin Reconciliation Dollars in Millions, except percentages Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 GAAP Operating Income $45.5 $88.8 GAAP Operating Income Margin 16.4% 32.2% Amortization of intangible assets (1) 0.3 0.1 One-time stand up
Slide 17: Adjusted Operating Income Margin Reconciliation – Continued
Adjusted Operating Income Margin Reconciliation – Continued (1) Amortization of intangible assets is recorded in Cost of products sold. (2) One-time stand up costs incurred primarily include costs to stand up the Company. For the three months ended December 31, 2023, approximately $26.4 million is r
Slide 18: Adjusted Net Income and Adjusted Net Income Per Diluted Share Reconciliation
Adjusted Net Income and Adjusted Net Income Per Diluted Share Reconciliation Dollars in Millions, except per share amounts Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 Income Before Income Taxes $14.3 $56.1 Adjustments: Amortization of intangible assets (1) 0.3 0.1 One-t
Slide 19: Adjusted Net Income Per Diluted Share Reconciliation – Continued
Adjusted Net Income Per Diluted Share Reconciliation – Continued (1) Amortization of intangible assets is recorded in Cost of products sold. (2) One-time stand up costs incurred primarily include costs to stand up the Company. For the three months ended December 31, 2023, approximately $26.4 million
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Dollars in Millions, except percentages Three Months Ended December 31, December 31, 2023 2022 GAAP Net Income $20.1 $35.2 Interest expense, net 27.7 25.6 Income taxes (5.8) 20.9 Depreciation and amortization 8.8 7.2 EBITDA $50.8 $88.9 Stock-based compensation expense
Slide 21: Adjusted EBITDA Reconciliation – Continued
Adjusted EBITDA Reconciliation – Continued (1) Represents stock-based compensation expense incurred during the three months ended December 31, 2023 and 2022, respectively. For the three months ended, December 31, 2023, $5.9 million is recorded in Selling and administrative expense, $0.9 million is r
Slide 22: Fiscal Year 2024 Financial Guidance Assumptions
Fiscal Year 2024 Financial Guidance Assumptions Dollars in Millions, except percentages Current Prior Interest Expense, Net ~ $116 ~ $116 Adjusted Tax Rate ~ 22% ~ 22% Weighted Average Shares (in millions) ~ 58.1 ~ 58.1 Foreign Exchange EUR/USD ~ 1.09 ~ 1.05 USD/YEN ~ 145 ~ 150 USD/CNY ~ 7.2 ~ 7.3 2