Perrigo Company Plc · NYSE:PRGO
Perrigo — Q4 2023 Earnings Presentation
40 slides from Perrigo's earnings presentation, Feb 27, 2024
Slide 1: Fourth Quarter 2023 Earnings Results
Adding HR photos Fourth Quarter 2023 Earnings Results February 27, 2024
Slide 2: Bradley Joseph, VP Investor Relations & Corporate Communications
Bradley Joseph, VP Investor Relations & Corporate Communications
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation are “forward-looking statements.” These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels o
Slide 4: Patrick Lockwood-Taylor, President & CEO
Patrick Lockwood-Taylor, President & CEO
Slide 5: Fiscal Year 2023 Financial Highlights
Fiscal Year 2023 Financial Highlights Net Sales Adj. Gross Margin $4.7B 38.8% +4.6% YoY +260bps YoY Adj. Operating Margin 12.3% +130bps YoY Adj. EPS Operating Cash Flow Conversion $2.58 +25% YoY 115% 5 1. See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts.
Slide 6: FY'23 Topline Growth was Broad-Based, Including Acquisitions
FY’23 Topline Growth was Broad-Based, Including Acquisitions; Q4 Impacted by Infant Formula & SKU Prioritization FY’23 Perrigo Category Growth Q4’23 Perrigo Category Growth ($ change in millions, constant currency) ($ change in millions, constant currency) Skin Care +$56 Skin Care -$3 Impacted Q4 or
Slide 7: Progressing Margin Accretive Initiatives
Progressing Margin Accretive Initiatives Delivering Synergies From Delivering Benefits from Supply HRA Acquisition Chain Reinvention Program • Achieved $30M in annualized cost synergies at • Achieved FY’23 net adj. gross profit savings of the end of FY’23; expect an additional $25M by $40M; cash cos
Slide 8: Clear Operational and Cash Flow Priorities for 2024
Clear Operational and Cash Flow Priorities for 2024 Power Our Business Strategic Deliver Consumer- Lead Category with Our World-Class, Evolve to One Principles Preferred Brands & Growth with Our Quality Assured Operating Model Innovation Customers Supply Chain Augment and Strengthen Execute and Achi
Slide 9: Augment and Strengthen Infant Formula
Augment and Strengthen Infant Formula • Infant formula manufacturing guidelines have evolved Taking • Brought in outside experts to help address situation Uncompromising • Working through self-imposed remediation plan with Action clear actions • Anticipate business stabilizing and returning to growt
Slide 10: Project Energize – A Global Investment & Efficiency Program
Project Energize – A Global Investment & Efficiency Program to Drive Next Evolution of Capabilities & Organizational Agility Project Energize Mitigate Impact of Enable One Perrigo Increase Augmenting and Growth Strategy Organizational Agility Strengthening Infant Formula • Drive global capabilities
Slide 11: Project Energize – Expected Efficiencies and Savings
Project Energize – A Global Investment & Efficiency Program to Drive Next Evolution of Capabilities & Organizational Agility Areas of Expected Efficiencies Cumulative Net Savings and 1X Costs by Year ($ in million) $120 Role $100 Reduction Corporate CSCA $80 Non-Role Savings, 35% 35% Reduction 40% $
Slide 12: Build Our Business by Launching Opill With Excellence
Build Our Business by Launching Opill® With Excellence In Store / At Shelf & Out Digital / Retail Pharmacy of Aisle Media Shelf Signage In Aisle Fixture Retailer On-Platform Advertising Pharmacist Kit Brand Page Social & Influencer Counter Easel Card & Display Unit Sampling, Ratings & Reviews Pharma
Slide 13: Strong 2024 Adj. EPS Growth Outlook, Offset by Infant Formula
Strong 2024 Adj. EPS Growth Outlook, Offset by Infant Formula Perrigo 2023 – 2024 Adj. EPS Walk $2.58 $2.50 - $2.65 + HRA Synergies + Supply Chain Reinvention Mid-Teens % Adj. EPS Growth, ex-Infant Formula 13 1. Guidance based upon U.S. dollar/euro exchange rate of $1.08/€1.00 as of 2/16/24.
Slide 14: Blueprint to Consumerize, Simplify and Scale One Perrigo
Blueprint to Consumerize, Simplify and Scale One Perrigo New Vision and Purpose To Provide the Best Self-Care for Everyone Make Lives Better Through Trusted Health and Wellness Solutions, Accessible to All Strategic Principles to Power Our Business Deliver Consumer- Lead Category with Our World-Clas
Slide 15: Blended-Branded Business: Perrigo U.K. Framework for Repeatable Growth
Blended-Branded Business: Our Perrigo U.K. Business Provides the Framework for a Repeatable Growth Model National Brands • Portfolio of branded, better value Blended- and store brand solutions Branded Business • Consumer-preferred offerings that leverage scale and innovation • Aligned to retailer Be
Slide 16: Key Takeaways
Key Takeaways • Achieve 2024 Operational Drivers • Augment and strengthen infant formula • Execute Project Energize investments and efficiencies • Launch Opill® with excellence • Drive growth plans • Deliver Supply Chain Reinvention savings • Capture HRA synergies • Continue to Consumerize, Simplify
Slide 17: Eduardo Bezerra, EVP & CFO
Eduardo Bezerra, EVP & CFO
Slide 18: Fiscal Year 2023 Non-GAAP Adjustments
Fiscal Year 2023 Non-GAAP Adjustments 18
Slide 19: Fourth Quarter & Fiscal Year 2023 Earnings Results
Fourth Quarter & Fiscal Year 2023 Earnings Results Fourth Quarter Results Fiscal 2023 Results Constant Constant Perrigo Q4 2023 $ Change YoY % Change YoY Currency % Full Year 2023 $ Change YoY % Change YoY Currency % ($ in millions, except margin) Change Change Net Sales $1,157 $2 0.1% (1.2%) $4,656
Slide 20: Net Sales Bridge – Q4 and Full Year
Net Sales Bridge – Q4 and Full Year +0.1% YoY +1.7% $1,155 +1.4% $1,157 +0.6% -2.3% -1.3% Q4 2023 Total Perrigo YoY Organic Growth -0.6% Net Sales Bridge +4.6% YoY +3.5% +4.4% +0.1% $4,656 $4,452 -1.8% -1.5% Full Year 2023 Total Perrigo YoY Organic Growth +1.7% Net Sales Bridge Note: amounts may not
Slide 21: Margin Expansion On-Track With 2023 Investor Day Targets
Margin Expansion On-Track With 2023 Investor Day Targets Perrigo Quarterly Adj. Gross & Perrigo FY’23 Adj. Gross & Operating Margin Operating Margin +260 bps 38.8% 40.0% 39.8% 39.0% 38.4% 19.0% 36.2% 38.0% 37.5% 17.0% 37.0% 14.4% 15.0% 36.0% 13.5% 35.0% 13.0% FY'22 FY'23 33.4% 34.0% 10.1% 33.0% 11.0
Slide 22: Adjusted Earnings Per Share Growth vs. Prior Year
Adjusted Earnings Per Share Growth vs. Prior Year +14.7% YoY Q4 2023 Total Perrigo YoY Adj. EPS Bridge +24.6% YoY Full Year 2023 Total Perrigo YoY + HRA Acquisition and Synergies + Supply Chain Reinvention Program Adj. EPS Bridge - HRA Distributor Transitions Note: amounts may not add due to roundin
Slide 23: Strong 2024 Adj. EPS Growth Outlook, Offset by Infant Formula
Strong 2024 Adj. EPS Growth Outlook, Offset by Infant Formula Perrigo 2024 Adj. EPS Outlook $2.90 - $3.00 $2.58 $2.50 - $2.65 Infant Formula driving ~($0.65) headwind to 2024 adj. EPS compared to our Preliminary 2024 Outlook discussed in November 2023 23 1. Guidance based upon U.S. dollar/euro excha
Slide 24: On-Track to Reduce Net Leverage to ~3.8x - ~4.0x by End of 2024
On-Track to Reduce Net Leverage to ~3.8x - ~4.0x by the end of 2024 Projected 2024 Sources & Uses of Cash In millions ($) $550M - $650M $700M - $800M $751M $550M - $600M $601M Net Net Expected Cash Est. Net Leverage1 Leverage1 Conversion of Leverage 5.5x 4.5x 90% - 100%2 ~3.8x - ~4.0x Leverage Reduc
Slide 25: Fiscal 2024 Outlook as of 2/27/24
Fiscal 2024 Outlook as of 2/27/24 Metric Outlook Comments + New products + Margin recovery pricing actions Organic Net Sales Growth YoY 1.0% - 3.0% + Absence of HRA distributor transitions - Impact from infant formula - SKU prioritization of -1ppt Reported Net Sales Growth YoY Flat - Expected exited
Slide 26: Adj. EPS in 2024 Skewed to 2H Driven Primarily by Infant Formula
Adj. EPS in 2024 Skewed to 2H Driven Primarily by Infant Formula Projected 2024 Adj. EPS Quarterly Phasing 1H Adj. EPS ~30% 2H Adj. EPS ~70% $2.50 - $2.65 Q1’24: Expect ~50% decline vs. prior year due primarily to infant formula remediation actions 26 1. Guidance based upon U.S. dollar/euro exchange
Slide 27: Q&A
Make Lives Better Through Trusted Health and Wellness Solutions, Accessible to All Q&A
Slide 28: Table I Reconciliation of Non-GAAP Measures
TABLE I PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 28
Slide 29: Table I (Continued) Reconciliation of Non-GAAP Measures
TABLE I (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 29
Slide 30: Table II Reconciliation of Non-GAAP Measures
TABLE II PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 30
Slide 31: Table II (Continued) Reconciliation of Non-GAAP Measures
TABLE II (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 31
Slide 32: Table III Reconciliation of Non-GAAP Measures
TABLE III PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 32
Slide 33: Table III (Continued) Reconciliation of Non-GAAP Measures
TABLE III (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 33
Slide 34: Table IV Reconciliation of Non-GAAP Measures
TABLE IV PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 34
Slide 35: Table IV (Continued) Reconciliation of Non-GAAP Measures
TABLE IV (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 35
Slide 36: Table V Reconciliation of Non-GAAP Measures
TABLE V PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 36
Slide 37: Table VI Reconciliation of Non-GAAP Measures
TABLE VI PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 37
Slide 38: Table VI (Continued) Reconciliation of Non-GAAP Measures
TABLE VI (CONTINUED) PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 38
Slide 39: Table VII Reconciliation of Non-GAAP Measures
TABLE VII PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 39
Slide 40: Table VIII Reconciliation of Non-GAAP Measures
TABLE VIII PERRIGO COMPANY PLC RECONCILIATION OF NON-GAAP MEASURES (in millions, except per share amounts) (unaudited) 40