Organon & Co. · NYSE:OGN
Organon & — Q1 2022 Earnings Presentation
24 slides from Organon &'s earnings presentation, May 5, 2022
Slide 1: Q1 2022 Earnings
Organon Q1 2022 Earnings “i ORGANON™
Slide 2: Disclaimer statement
Disclaimer statement This text should be viewed in conjunction with Organon’s Q1 2022 earnings call Safe Harbor for Forward-Looking Statements Except for historical information herein, this presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S
Slide 3: Disclaimer statement, cont.
Disclaimer statement, cont. Non-GAAP Information This presentation contains “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. g
Slide 4: First quarter 2022 highlights
First quarter 2022 highlights • Double digit growth in Biosimilars and Fertility • Capitalizing on opportunities in Established Brands • Continued business development with license for XaciatoTM • $1,567 million Revenue • $647 million Adjusted EBITDA • $1.65 Adjusted EPS from continuing operations 4
Slide 5: Established Brands sizeable and stable base of revenue
Established Brands sizeable and stable base of revenue $ mil 5
Slide 6: Building a Women's Health portfolio
Building a Women’s Health portfolio Bacterial Vaginosis Entered into licensing agreement for Xaciato™ FDA-approved for BV in females 12 and over, the most common cause of March 2022 vaginitis worldwide estimated to affect approximately 21 million women in the U.S.(1) Marvelon™ and Mercilon™ Contrace
Slide 7: Q1 revenue: volume growth more than offset LOE, price
Q1 revenue: volume growth more than offset LOE, price +4% reported +8% ex-FX $ mil ~30 ~210 ~60 1,567 1,506 ~30 ~0 ~30 (1) (2) (3) (1) LOE = Loss of Exclusivity (2) VBP = Volume-Based Procurement (3) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, an
Slide 8: Strong ex-US performance
Strong ex-US performance $ mil Q1-21 Actual Ex FX Q1-22 (pre-spin) VPY VPY Europe and Canada 436 434 — 8% United States 329 351 (6)% (6)% Asia Pacific and Japan 314 278 13% 22% ~80% of sales China 236 206 15% 13% generated Latin America, Middle ex-US 209 167 25% 34% East, Russia and Africa Other (1)
Slide 9: Women's Health
Women’s Health • Double digit fertility growth in Q1 • Q1 Nexplanon sales were impacted by customer buying patterns • Positive demand trends for Nexplanon; expect double digit growth for full year 2022 Revenues $ mil Q1-2022 Q1-2021 Act VPY Ex FX VPY Women’s Top Contraception Products Health Nexplan
Slide 10: Biosimilars
Biosimilars • Double digit growth for Renflexis • Ontruzant growth in US tempered by EU competition; approved in Canada • US demand for biosimilars continues to grow Revenues $ mil Q1-2022 Q1-2021 Act VPY Ex FX VPY Biosimilars Renflexis ® 46 38 21% 21% Ontruzant ® 22 22 — 5% Brenzys™ 14 10 40% 44% A
Slide 11: Established brands
Established brands • Limited LOE impact in Q1; no VBP impact • Benefits from one-time items • Improved outlook for 2022 Revenues $ mil Q1-2022 Q1-2021 Act VPY Ex FX VPY Established Brands Cardiovascular 410 389 5% 11% Respiratory 305 236 29% 35% Non-Opioid Pain, Bone & 201 181 11% 18% Dermatology Re
Slide 12: Timing of spend benefits Q1 Adj. EBITDA margin
Timing of spend benefits Q1 Adj. EBITDA margin $ mil Q1-22 Q1-21 (pre-spin) Actual VPY Revenue 1,567 1,506 4% Cost of sales 561 591 (5)% Gross profit 1,006 915 10% Non-GAAP Adjusted Gross profit (1) 1,042 937 11% Selling, general, and administrative 371 382 (3)% Research and development 96 67 43% Ad
Slide 13: Debt capitalization as of March 31, 2022
Debt capitalization as of March 31, 2022 Net leverage ratio ~3.6x $ mil June 30, 2021 September 30, 2021 December 31,2021 March 31, 2022 Reported cash and cash 730 1,008 737 694 equivalents Cash for IOM-exit (400) (320) (0) (0) inventory (1) Cash available to 330 688 737 694 Organon Gross Debt (2) 9
Slide 14: Revenue drivers consistent with previous guidance
Revenue drivers consistent with previous guidance $ mil +600 − +700 (50 − 100) (200 − 300) $6,304 ~(100) ~(100) $6,100– $6,400 ~(200) FX ~300 - 475 bps headwind to growth in 2022 (1) (2) (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and allocat
Slide 15: Affirming full year 2022 financial guidance
Affirming full year 2022 financial guidance $M, provided on a Non- GAAP basis, Guidance provided Guidance provided as of except Revenue February 17, 2022 May 5, 2022 Revenue $6,100 - $6,400 Unchanged Adjusted gross margin Mid-60% range Unchanged SG&A (as % of revenue) Mid-20% range Unchanged R&D (as
Slide 16: Q&A
Q&A O “i ORGANON’
Slide 17: Appendix
Appendix “iis ORGANON”
Slide 18: Established Brands exceptional Q1 performance
Established Brands exceptional Q1 performance Q1-2021 $ mil Q1-2022 Actual VPY Ex FX VPY (pre-spin) Women’s Health 378 399 (5)% (3)% Biosimilars 99 81 22% 25% 18 Est. Brands 1,053 957 10% 15% Other (1) 37 69 (45)% (46)% Total Revenue 1,567 1,506 4% 8% (1) Other includes manufacturing sales to Merck
Slide 19: Gross margin reconciliation
Gross margin reconciliation $ mil Q1-2022 Q1-2021 (pre-spin) Revenue 1,567 1,506 Cost of sales 561 591 Gross Profit 1,006 915 Gross Margin 64.2% 60.8% Amortization 28 20 One-time costs (1) 5 — Stock-based compensation 3 2 Non-GAAP Adjusted Gross Profit (2) 1,042 937 Non-GAAP Adjusted Gross Margin 66
Slide 20: Income from continuing operations before tax to Adjusted EBITDA
Income from continuing operations before tax to Adjusted EBITDA $ mil Q1-2022 Q1-2021 (pre-spin) Income from continuing operations before income taxes 442 467 Depreciation 25 18 Amortization (1) 28 20 Interest expense 97 — EBITDA 592 505 Restructuring costs — 1 One-time costs (2) 40 49 Acquired in-p
Slide 21: Income from continuing operations before tax to Adjusted Net Income
Income from continuing operations before tax to Adjusted Net Income $ mil (except EPS) Q1-2022 Q1-2021(pre-spin) Income from continuing operations before income taxes 442 467 Amortization (1) 28 20 Restructuring costs — 1 One-time costs (2) 40 49 Acquired in-process research and development — — Stoc
Slide 22: In-process R&D recast – Adjusted EBITDA
In-process R&D recast – Income from continuing operations before tax to Adjusted EBITDA Organon & Co. Reconciliation of GAAP Income from Continuing Operations Before Income Taxes to Adjusted EBITDA ($ in millions) Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 As As Impact of Impact of Impact of $ mil Repo
Slide 23: In-process R&D recast – Adjusted Net Income
In-process R&D recast – Income from continuing operations before income tax to Non-GAAP Adjusted net income Organon & Co. Reconciliation of GAAP Income from Continuing Operations Before Income Taxes to Non-GAAP Adjusted Net Income ($ in millions, except per share amounts) $ mil Q1 2021 Q2 2021 Q3 20
Slide 24: Broad and diverse portfolio
Broad and diverse portfolio Women’s Health Biosimilars Established Brands Number of 11 5 49 products 24