Kenvue Inc. · NYSE:KVUE
Kenvue — Q2 2024 Earnings Presentation
37 slides from Kenvue's earnings presentation, Aug 8, 2024
Slide 1: Welcome
Welcome a HYDRO Newtmggena* BOOST WATER CREAy
Slide 2: Second Quarter 2024 Earnings Results
Second Quarter 2024 Earnings Results
Slide 3: Introduction
Introduction Thibaut Mongon Paul Ruh Jim Giannakouros Chief Executive Chief Financial Interim Head of Officer Officer Investor Relations
Slide 4: 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, statements about management’s expectations of Kenvue’s future operating and financial performance, p
Slide 5: Q2 2024 Highlights
Q2 2024 Highlights 2 +1.5% Organic growth’, on top of +7.7% in Q2 2023 Adjusted gross profit margin’ increased 410 bps over PY quarter 57.5% > 61.6% Benadryl ALLERGY Increasing brand activation investment +n20% vs. PY vs. +~15% previously planned K€ kenvue
Slide 6: Kenvue in Action
Kenvue in Action 6) First half results show the value of our carefully curated portfolio of iconic brands covering a full spectrum of health needs ©) Increasing investment in consumer and healthcare professional engagement, in-store presence and prominence, and amplification of innovation S) Expect
Slide 7: Q2 2024 Portfolio Performance
Q2 2024 Portfolio Performance Q22024 Q22023 Q22024 Net Net Organic Sales Sales Growth! Total Kenvue $4.0B $4.0B +1.5% vs +7.7% PY Self Care $1.6B $1.7B (0.2)% vs +14.2% PY Highlights Transforming to unleash the full potential of our portfolio + Continued share gains despite lower category growth vs.
Slide 8: Actions to Stabilize U.S. Skin Health & Beauty
Actions to Stabilize U.S. Skin Health & Beauty 6) Improving in-store presence and prominence through increased investments on promotions and displays ‘S) Increasing detailing and sampling with dermatologists Ss) Increasing media investments with a strong pivot to social media influencers S) Amplifyi
Slide 9: Our Progress as an Independent Company
| K€ kenvue Our Progress as an Independent Company ‘S)) Inaugural Healthy Lives Mission report published 6) Two new independent Directors appointed to the Board 6) First quarterly dividend increase declared as an independent company
Slide 10: Q2 2024 Financial Performance
Q2 2024 Financial Performance
Slide 11: Q2 2024 Reported Net Sales & Organic Growth
Q2 2024 Reported Net Sales & Organic Growth’ +1.5% Organic Growth On Top of +7.7% in Q2 2023 (— > 21% 6%) $4. (1.8%) Q2 2023 Value Volume Foreign Q2 2024 Net Sales Realization? Exchange Net Sales XX J 1Non-GAAP financial measure; refer to reconciliations of non-GAAP financial measures included in ac
Slide 12: Self Care: Continued Share Gains
Self Care: Continued Share Gains Key Highlights Ne $1.6B Net Sales Organic Drivers Reported (1 6)% Value Realization? +1.1% vs +12.2% PY vs +10.6% PY Organic! (0.2)% Volume (1 .3)% vs +14.2% PY vs +3.6% PY Continued share gains despite lower category growth vs. PY Allergy performance late in Q2 offs
Slide 13: Skin Health & Beauty: Stabilization Plan On Track
Skin Health & Beauty: Stabilization Plan On Track Key Highlights $1.1B Net Sales Organic Drivers * Continued execution Reported (3.8)% Value Realization? +1.5% of our stabilization plan vs +1.9% PY vs +6.6% PY * Q2y/y volume trend improvement vs. Q1 y/y Organic! {oJ Volume 9 + Sun Care performance (
Slide 14: Essential Health: Broad Based Growth
Essential Health: Broad Based Growth Key Highlights $1.3B Net Sales Organic Drivers + Balanced growth between Reported 44.9% Value Realization? +4.1% volume and value realization vs +0.5% PY vs +10.7% PY * Growth across all categories and regions Organic’ +7.6% Volume +3.5% + Strong growth of vs +3.
Slide 15: Q2 2024 Adjusted Gross Profit Margin and Adjusted Operating Income Margin
Q2 2024 Adjusted Gross Profit Margin and Adjusted Operating Income Margin Performance Adjusted Gross Profit Margin’ Q2 2023 +410 bps y/y Q2 2024 61.6% Operating Income \ Margin 3.9% 57.5% Q2 2024 Reported Gross| Profit Margin 59.1% Adjusted Operating ; -30 bps y/y Income Margin’ 23.1% 22.8% 2 2024 R
Slide 16: Q2 2024 Net Income and Earnings Per Share
Q2 2024 Net Income and Earnings Per Share Ne $430M Q2 2023 J Q2 2023 $611M $0.03 Reported Diluted $0.32 Adjusted Diluted! Q2 2024 J \ K€ kenvue 1 Non-GAAP financial measure; refer to reconciliations of nonGAAP financial measures included in accompanying schedules to this presentation and to the earn
Slide 17: 2024 Guidance Summary
2024 Guidance Summary Reported Net 1.0% - 3.0% + Unchanged 1.0% - 3.0% Organic Growth! 2.0% - 4.0% + Unchanged 2.0% - 4.0% AdvtedOvectng arg. zeny *‘Srnamaringueng headless blo 209 eooreee nuerest $380-$400M - Lower borrowings YTD ~$400M Adjusted Effective 25.5% -26.5% | - Unchanged 25.5% - 26.5% Ad
Slide 18: Thibaut Mongon, Paul Ruh, Jim Giannakouros
Thibaut Mongon Paul Ruh Jim Giannakouros Chief Executive Chief Financial Interim Head of Officer Officer Investor Relations
Slide 19: Slide 19
Slide 20: Appendix
Appendix K€ kenvue
Slide 21: 2023 Organic Growth Considerations
2023 Organic Growth’ Considerations @ Higher incidences of cough, © Delayed season and lower cold and flu outside the U.S. incidence levels Self-Care @ Petailer inventory re-build, following Q4'22 demand surge Organic Growth 15.3% 14.2% 6.7% (2.0%) Retailer inventory re-build, ‘ , x . ® following su
Slide 22: Organic Growth
Organic Growth Fiscal Three Months Ended June 30, 2024 vs July 2, 20230) Impact of foreign Reported Net sales change currency Organic growth® (Unaudited; Dollarsin Millions) Amount Percent Amount Amount Percent Self Care $ (26) (1.6)% $ (22) $ (4) (0.2) % Skin Health and Beauty (44) (3.8) (17) (27)
Slide 23: Organic Growth
Organic Growth Fiscal Three Months Ended July 2, 2023 vs July 3, 20220) Impact of foreign Reported Net sales change currency Organic growth (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 180 12.2 % $ (30) $ 210 14.2 % Skin Health and Beauty 21 19 (17) 38 3.4 Essent
Slide 24: Organic Growth
Organic Growth Fiscal Six Months Ended June 30, 2024 vs July 2, 2023" Impact of foreign Reported Net sales change currency Organic growth{@) (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 32 10 % $ (33) $ 65 2.0 % Skin Health and Beauty (101) (4.5) (24) 7) (3.4) Es
Slide 25: Organic Growth
Organic Growth Fiscal Six Months Ended July 2, 2023 vs July 3, 2022 Impact of foreign Reported Net sales change currency Organic growth’ (Unaudited; Dollars in Millions) Amount Percent Amount Amount Percent Self Care $ 355 12.1% $ (80) $ 435 148 % Skin Health and Beauty 120 5.6 (52) 172 8.0 Essentia
Slide 26: Total Segment Net Sales and Adjusted Operating Income
Total Segment Net Sales and Adjusted Operating Income Net Sales Net Sales (Unaudited; Dollars in Millions) June 30, 2024 duly 2, 2023 Self Care 1.635 1661 3,333 3,301 Skin Health and Beauty 1,103 1147 2,157 2,258 Essential Health ee 1208 z us A ems Adjusted Operating Income Adjusted Operating Income
Slide 27: Non-GAAP Reconciliations (Q2 2024)
Non-GAAP Reconciliations (Q2 2024) Fiscal Three Months Ended June 30, 2024 (Unaudited; Dollars in Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA
Slide 28: Non-GAAP Reconciliations (Q2 2023)
Non-GAAP Reconciliations (Q2 2023) Fiscal Three Months Ended July 2, 2023 (Unaudited; Dollars in Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA (
Slide 29: Non-GAAP Reconciliations (Q2 2024)
Non-GAAP Reconciliations (Q2 2024) (Unaudited; Dollars in Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA (non-GAAP) EBITDA margin Detail of Adjus
Slide 30: Non-GAAP Reconciliations (Q2 2023)
Non-GAAP Reconciliations (Q2 2023) Fiscal Six Months Ended July 2, 2023 (Unaudited; Dollars in Millions) Net sales Gross profit Gross profit margin Operating income Operating income margin Net Income Net income margin Interest expense, net Provision for taxes Depreciation and amortization EBITDA (no
Slide 31: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited) June 30, 2024 duly 2, 2023 June 30, 2024 July 2, 2023 Effective tax rate 10.8 % 32.7 % 28.0 % 28.0 % Adjustments: Tax-effect on special item adjustments (2.9) (10.6) (3.1) (2.4) Dr. Ci:Labo® Impairment 17.3 _ 1
Slide 32: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate Fiscal Year 2024 (Unaudited) Forecast Effective tax rate 26.5% - 27.5% Adjustments: Tax-effect on special item adjustments (1.5) 0.5 Taxes related to Deferred Markets K€ kenvue
Slide 33: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Fiscal Three Months Ended Fiscal Six Months Ended (Unaudited) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023 Diluted earnings per share $ 0.03 $ 0.23 $ 018 $ 0.51 Adjustments: Separation-related costs 0.04 0.06 0.08 0.11 Restructuring and operating model op
Slide 34: Free Cash Flow
Free Cash Flow Fiscal Six Months Ended (Unaudited; Dollars in Billions) June 30, 2024 July 2, 2023 Net cash flows from operating activities $ 07 $ 15 Purchases of property, plant, and equipment (0.2) (0.1) K€ kenvue 2
Slide 35: 2024 Guidance Non-GAAP Reconciliations
2024 Guidance Non-GAAP Reconciliations Kenvue is not able to provide the most directly comparable GAAP measures or reconcile Adjusted diluted earnings per share, Adjusted operating income margin, or Organic growth to comparable GAAP measures on a forward-looking basis without unreasonable efforts gi
Slide 36: Research and Development
Research and Development (Unaudited; Dollars in Millions) Research & Development K€ kenvue Fiscal Three Months Ended Fiscal Six Months Ended June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023 105 $ 99 $ 205 $ 188 36
Slide 37: Kenvue
B€ kenvue