Herbalife Ltd. · NYSE:HLF
Herbalife — Q2 2024 Earnings Presentation
27 slides from Herbalife's earnings presentation, Jul 31, 2024
Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation July 31, 2024 Heather Jackson Arianna Errigo United States Italy (Flag Bearer) Gravel Racing Fencing and Ultra Running
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-loo
Slide 3: Strategic Update
Q2 2024 Strategic Update Michael Johnson Chairman & CEO Q2 2024 Earnings | 3
Slide 4: CEO Highlights
CEO Highlights • Q2 2024 net sales of $1.3B, down 2.5% YoY, including 270 bps of FX headwinds o Net sales up 0.2% YoY on constant currency basis1 • Q2 adjusted EBITDA2 of $180M exceeds guidance; raised FY 2024 expectations o Q2 adjusted EBITDA2 and adjusted EBITDA2 margin of 14.1% highest in seven q
Slide 5: Recent Product Launches
Recent Product Launches North America North America North America Brazil Protein Chips Herbal Aloe Concentrate Herbalife24 Herbalife24 Formula 1 Nutri Soup & Beverage Enhancers Prepare Creatine Beans with Bacon 8g Pea Protein, gluten-free, Expansion of single-serve options to Supports healthy blood
Slide 6: Recent Skin Care Product Launches
Recent Skin Care Product Launches India Japan vritilife® Beauty Ceramides Facial Cleanser Facial Toner Moisturizer Facial Serum Combines Neem and Combines Aloe, Cucumber, Combines Almond, Aloe Combines Olive, Almond, Beauty-from-within softgel capsule, Turmeric; purifies and and Alum to boost Vera,
Slide 7: Business Update
Q2 2024 Business Update Stephan Gratziani President Q2 2024 Earnings | 7
Slide 8: New Distributor Trends
New Distributor Trends Worldwide Marketing Plan Level Q2 2024 Q2 2024 Q2 2024 Q2 2024 vs Q1 2024 vs Q2 2023 vs Q1 2024 vs Q2 2023 North America +15% +23% President’s Team +66% +72% Sales Leader Millionaire Team +62% +54% Latin America +30% +34% Global Expansion Team +48% +40% EMEA +15% +9% World Tea
Slide 9: Financial Update
Q2 2024 Financial Update John DeSimone CFO Q2 2024 Earnings | 9
Slide 10: Q2 2024 Financial Highlights
Q2 2024 Financial Highlights Net Sales Adjusted EBITDA1 Capital Expenditures $1.3B (2.5)% $180M +6.1% $36M vs Q2 2023 vs Q2 2023 Adjusted EBITDA1 Margin FX Headwinds of 270 bps Drove Decline 14.1% ~$5M Capitalized SaaS Implementation Costs +0.2% YoY at Constant Currency2 +120 bps vs Q2 2023 • Gross
Slide 11: Net Sales Bridge
Net Sales Bridge $ million (2.5)% +0.2% (2.7)% 1,314.0 86.3 2.5 1,316.7 1,281.1 (7.4) (35.6) (78.7) Q2 2023 Q2 2024 Q2 2024 Reported Volume Pricing Country Mix Other Local Currency FX Reported Net Sales Net Sales1 Net Sales (1) Non-GAAP Measure. Refer to Appendix for discussion of why we believe adj
Slide 12: Regional Net Sales
Regional Net Sales Local Currency Reported Net Sales Net Sales1 Q2 2024 Q2 2023 YoY % Change YoY % Change $ million North America 283.2 303.6 (7)% (7)% Latin America 211.7 207.0 +2% +5% EMEA 287.8 289.6 (1)% +4% Asia Pacific 416.7 425.8 (2)% +2% China 81.7 88.0 (7)% (4)% Worldwide 1,281.1 1,314.0 (2
Slide 13: Adjusted EBITDA Bridge
Adjusted EBITDA1 Bridge $ million % = Adjusted EBITDA1 Margin +6.1% 51.8 6.9 1.6 180.0 169.6 (7.2) (14.5) (6.1) (1.2) (10.7) (10.2) 12.9% 14.1% Input Employee Technology China Gov’t Q2 2023 Volume Pricing Salaries Other FX Q2 2024 Costs Bonus Costs Grant Income (1) Non-GAAP Measure. Refer to Appendi
Slide 14: Capital Structure
Capital Structure Debt Maturities • Repaid ~$90M under revolving credit facility post Apr ‘24 as of Jun 30 ‘242 $1.6B senior secured refinancing $ million 2025 7.875% Sr. Notes 310 • ~$80M outstanding under revolving credit facility as of Jun 30; Revolver ~$275M available for borrowing1 2028 Convert
Slide 15: Outlook
Outlook Third Quarter Full-Year 2024 Guidance 2024 Guidance 2024 Guidance 2023 Results 2023 Results $ million REVISED (as of May 1 ‘24) Net Sales (4.5)% to 0% YoY 1,281.3 (3.5)% to +1.5% YoY 0% to +5% YoY 5,062.4 Adjusted EBITDA1 125 – 155 163.3 560 – 600 550 – 590 570.6 Capital Expenditures 35 – 45
Slide 16: Appendix
Appendix Q2 2024 Earnings | 16
Slide 17: Supplemental Information
Supplemental Information Non-GAAP Financial Measures (unaudited) Adjusted SG&A, Adjusted EBITDA, Credit Agreement EBITDA, Adjusted Net Income and Adjusted Diluted EPS In addition to its reported results calculated in accordance with U.S. GAAP, the Company has included in this presentation adjusted S
Slide 18: YTD 2024 Financial Highlights
YTD 2024 Financial Highlights Net Sales Adjusted EBITDA1 Capital Expenditures $2.5B (0.8)% $318M +6.6% $69M vs YTD 2023 vs YTD 2023 Adjusted EBITDA1 Margin +1.3% YoY at Constant Currency2 12.5% ~$10M Capitalized SaaS Implementation Costs +90 bps vs YTD 2023 • Gross profit margin of 77.7%, up 110 bps
Slide 19: YTD Net Sales Bridge
YTD Net Sales Bridge $ million (0.8)% +1.3% (2.1)% 165.5 5.9 2,598.8 2,566.1 2,545.4 (15.0) (53.4) (123.7) YTD 2023 YTD 2024 YTD 2024 Reported Volume Pricing Country Mix Other Local Currency FX Reported Net Sales Net Sales1 Net Sales (1) Non-GAAP Measure. Refer to Supplemental Information included h
Slide 20: YTD Regional Net Sales
YTD Regional Net Sales Local Currency Reported Net Sales Net Sales1 YTD 2024 YTD 2023 YoY % Change YoY % Change $ million North America 549.0 600.8 (9)% (9)% Latin America 425.9 412.5 +3% +3% EMEA 565.7 557.7 +1% +5% Asia Pacific 847.9 839.4 +1% +4% China 156.9 155.7 +1% +5% Worldwide 2,545.4 2,566.
Slide 21: YTD Adjusted EBITDA Bridge
YTD Adjusted EBITDA1 Bridge $ million % = Adjusted EBITDA1 Margin +6.6% 99.3 8.5 15.3 318.3 298.5 (17.4) (33.3) (12.9) (10.1) (15.2) (14.4) +6.2 Lower inventory write-downs 11.6% 12.5% Input Employee Technology China Gov’t YTD 2023 Volume Pricing Salaries Other FX YTD 2024 Costs Bonus Costs Grant In
Slide 22: Reconciliation of SG&A to Adjusted SG&A
Reconciliation of SG&A to Adjusted SG&A $ million Q2 2024 Q2 2023 YTD 2024 YTD 2023 Net Sales 1,281.1 1,314.0 2,545.4 2,566.1 Selling, general, and administrative expenses (SG&A) 502.3 460.5 994.5 936.4 SG&A as a percentage of net sales 39.2% 35.0% 39.1% 36.5% Expenses related to Restructuring Progr
Slide 23: Reconciliation of Net Income to Adjusted EBITDA to Credit Agreement EBITDA and Total Leverage Ratio
Reconciliation of Net Income to Adjusted EBITDA to Credit Agreement EBITDA and Total Leverage Ratio Quarters TTM Year to Date Full Year $ million Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Jun 2024 2024 2023 2023 Net Sales 1,314.0 1,281.3 1,215.0 1,264.3 1,281.1 5,041.7 2,545.4 2,566.1 5,062.4 Net inco
Slide 24: Reconciliation of Net Income to Adjusted Net Income
Reconciliation of Net Income to Adjusted Net Income $ million Q2 2024 Q2 2023 YTD 2024 YTD 2023 Net income 4.7 59.9 29.0 89.2 Expenses related to Restructuring Program 48.8 ― 65.5 ― Expenses related to Transformation Program 3.5 10.1 9.4 37.4 Digital technology program costs 6.0 7.0 17.0 10.5 Loss o
Slide 25: Reconciliation of Diluted EPS to Adjusted Diluted EPS
Reconciliation of Diluted EPS to Adjusted Diluted EPS $ per share Q2 2024 Q2 2023 YTD 2024 YTD 2023 Diluted earnings per share 0.05 0.60 0.29 0.89 Expenses related to Restructuring Program 0.48 ― 0.65 ― Expenses related to Transformation Program 0.03 0.10 0.09 0.37 Digital technology program costs 0
Slide 26: FX Translation Impact
FX Translation Impact $ million, except EPS Net Sales EBITDA Net Income Diluted EPS1 Q2 2024 as reported 1,281.1 102.5 4.7 0.05 Non-GAAP adjustments2 ― 77.5 50.1 0.49 Q2 2024 adjusted 1,281.1 180.0 54.8 0.54 FX rate adjustments3 35.6 10.7 7.3 0.07 Q2 2024 FX Adjusted 1,316.7 190.7 62.1 0.61 YTD 2024
Slide 27: Herbalife
Herbalife”