Bristol-myers Squibb Company · NYSE:BMY
Bristol-myers Squibb — Merger or Acquisition (November 2009)
38 slides from Bristol-myers Squibb's merger presentation, Nov 19, 2009
Slide 1: Mead Johnson Nutrition Company Investor Road Show Presentation
Investor Presentation November 2009 Mead Johnson Nutrition Company Investor Road Show Presentation Filed by Mead Johnson Nutrition Company Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Bristol-Myers Squibb Company Subject Company’s Commission File No.: 1-1136
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation about the company’s future plans and prospects, including statements about our financial position, business strategy and research pipeline, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.
Slide 3: The Exchange Offer
The Exchange Offer Issuer: Mead Johnson Nutrition Company (“MJN” or “Mead Johnson”) Offer to Exchange: Up to 170.0 million shares of MJN Class A common stock for outstanding shares of Bristol- Myers Squibb Company (“BMS”) common stock Exchange Ratio: Upper limit of 0.6027 shares of MJN per share of
Slide 4: Presenters
Presenters Steve Golsby President and Chief Executive Officer Pete Leemputte Senior Vice President and Chief Financial Officer
Slide 5: Mead Johnson Heritage and Focus
Mead Johnson Heritage and Focus Our Mission to create nutritional brands and products trusted to give infants and children the best start in life Edward Mead Johnson, Sr., with his son, Ted clinically supported infant feeding product in the U.S. (1911) st
Slide 6: Mead Johnson Today
Mead Johnson Today Our Vision to be the world’s premier pediatric nutrition company A global leader in pediatric nutrition INFANT NUTRITION (0–12 MONTHS) Rank Abbott Nestl Danone Wyeth Company CHILDREN’S NUTRITION (>12 MONTHS) Rank Nestl Danone Abbott Wyeth Company Source: Annual AC Nielsen Value Sh
Slide 7: Mead Johnson Formula for Growth
Mead Johnson Formula for Growth
Slide 8: Attractive Growth Industry
Attractive Growth Industry $0 $10 $20 $30 $40 2009E 2014E Global industry sales Source: ERC Infant Children’s Sales by Country, September 2009. Asia leading industry growth $14.0 $23.1 $32.2 Total Change in Market Size 2009E – 2014E 100% $9.1 % of Total $ Growth $BN Asia Latin America North America
Slide 9: Growth Driven by Strong Fundamentals
Growth Driven by Strong Fundamentals Consumers value the nutritional benefits of premium products Role of early nutrition in lifelong health More women in the workforce Increasing middle-class births in emerging countries
Slide 10: Iconic Global Brands
Iconic Global Brands Complete nutrition for 100% peace of mind Recommended by pediatricians and trusted by moms to nourish every infant’s and child’s potential Creating superior, innovative, science- based nutritional products trusted to give infants and children the best start in life for more than
Slide 11: The Enfa Brand Architecture
The Enfa Brand Architecture Prenatal to school age
Slide 12: Comprehensive Product Portfolio
Comprehensive Product Portfolio Routine Children’s Specialty Solutions Meeting all pediatric nutritional needs For routine feeding For mild intolerance / allergies For children’s nutritional supplementation For prematurity, severe intolerance, allergies and metabolic disorders
Slide 13: Demand Creation
Demand Creation Medical / Consumer / Retail
Slide 14: Portfolio of Stable Markets…
Portfolio of Stable Markets…
Slide 15: …With Strength in Emerging Markets
…With Strength in Emerging Markets MALAYSIA CHINA VIETNAM PHILIPPINES INDONESIA THAILAND PERU COLOMBIA BRAZIL VENEZUELA MEXICO RUSSIA INDIA
Slide 16: U.S. Growth Strategy: 4 Pillar Growth Strategy
U.S. market share 1 stabilized in Q3 2009 by unit U.S. Growth Strategy Mead Johnson 4 Pillar Growth Strategy 3 4 1 2 Innovation Toddler Business Consumer Messaging Medical / Retail Strategy 1. Nielsen Retail Audits for the 13 weeks ending October 24, 2009. • Investing at record levels • Message reso
Slide 17: China: Our 2nd Largest Market
China: Our 2 nd Largest Market 1. Excludes Hong Kong. Mead Johnson in China $322 MM NET SALES • Launched operations in 1994 • EBIT break-even in 2000 • Mead Johnson’s “best start in life” brand message resonates with parents • Systematic geographic expansion into 100+ of the largest cities • Further
Slide 18: Other Growth Markets
Other Growth Markets • 6 of Mead Johnson’s top 10 markets • Success underpinned by market growth and market share gains Rest of Asia Latin America • Investing behind momentum • Strong brand portfolio • Economic prospects and demographic trends are favorable ASIA / LATIN AMERICA NET SALES EX-CHINA ~$
Slide 19: Seed Opportunities: India and Russia
Seed Opportunities MJN Approach Replicate Proven Business Model Bring Science-Based Nutrition to Markets Build Scale Systematic Expansion of Distribution Footprint India • 25 million annual births with growing middle class • Complex, highly regulated market • Significant latent demand potential • Es
Slide 20: Proven Leader in Innovation
Proven Leader in Innovation Accelerating pace of innovation in – over new products Enfagrow with Flavor Enhancement Pouches for Greater Value / Less Waste Increased DHA and Prebiotics / Fiber Enfamil LIPIL with Prebiotics: Triple Health Guard Nutramigen LIPIL with Probiotic LGG Night Time Powder for
Slide 21: Innovations Provide Tangible Developmental Benefits
Innovations Provide Tangible Developmental Benefits CONTROL 1 ~ 20/40 VISION ENFAMIL LIPIL ~ 20/28 VISION Control Enfamil LIPIL 1. Same formulation but without DHA and ARA. 2. Defined as wheezing, asthma or atopic dermatitis. Control Enfamil LIPIL ALLERGIC MANIFESTATIONS IN FIRST THREE YEARS OF LIFE
Slide 22: Years of Product Quality and Productivity
100 Years of Product Quality and Productivity MJN SPRAY DRYER AND PACKAGING MJN GLOBAL LIQUIDS CONTRACT MJN SPRAY DRYER MJN PACKAGING THIRD-PARTY PACKAGING USA MEXICO BRAZIL MALAYSIA PHILIPPINES CHINA THAILAND NETHERLANDS AUSTRALIA Highlights Efficient and flexible manufacturing process Culture of p
Slide 23: Diverse and Experienced Leadership
Diverse and Experienced Leadership Steve Golsby President and CEO MJN: 12 years Career: 32 years UK Bill P’Pool SVP, Gen. Counsel / Secretary MJN: 5 years Career: 19 years USA Charles Urbain President, Asia / Europe MJN: 13 years Career: 26 years South Africa Pete Leemputte SVP, CFO MJN: 1 year Care
Slide 24: Financial Review
Financial Review ………...………….............................................................................................................................................................................................................................…………………………
Slide 25: Compelling Financial Performance
Compelling Financial Performance $2,847 $2,541 $2,309 $1,500 $2,000 $2,500 $3,000 $735 $645 $675 $500 $600 $700 $800 1. Adjusted to exclude $36 million related to a number of operating model changes and delays in establishing new operating subsidiaries in Europe, Mexico and Brazil in connection with
Slide 26: 2009 September YTD Performance
2009 September YTD Performance Note: Nine-month results not audited. 1. Adjusted to exclude $25 million in 2008 related to operating model changes and delays in establishing new operating subsidiaries in Europe, Mexico and Brazil in connection with Mead Johnson’s separation from BMS. 2. Adjusted to
Slide 27: Constant Dollar Sales Growth
Constant Dollar Sales Growth 9.0% 1.9% 3.2% 1.5% 2005-2008 CAGR 4.2% 3.8% Balanced growth over time between pricing and volume 1.7% 3.2% 3.4% 8.5% 10.7% 5.1% 6.6% 10.0% PRICE VOLUME 1. Adjusted to exclude the Adult Nutrition business, which was sold in 2004. Volume growth was 7.3% on a reported basi
Slide 28: Cost of Goods Sold
Cost of Goods Sold Dairy accounts for about one-quarter of approximately $1 billion annual COGS Conversion and Other Dairy Agricultural Products Other Raw Materials Packaging
Slide 29: Dairy Prices and Gross Margin Trends
Dairy Prices and Gross Margin Trends $0 $1 $2 $3 $4 $5 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 50% 55% 60% 65% 70% Note: All data shown on a GAAP basis. Nine-month results not audited. 1. Weighted average for Oceania, Europe and North America non-fat / skim milk
Slide 30: Supply Chain Productivity
Supply Chain Productivity Productivity improvements contribute to our industry-leading margins Target is 3% COGS reduction each year $30 $33 $32 $32 $37 ESTIMATED ANNUAL REDUCTION IN COGS
Slide 31: Operating Expense Spending
Operating Expense Spending A&P % OF NET SALES 13.4% 2009 YTD 12.8% 12.4% SALES FORCE ADDITIONS Investing in key emerging markets, including China and “seed” countries R&D SPENDING $73 $67 $62 $51 $43 Investments for sustainable growth Note: All data shown on a GAAP basis.
Slide 32: Transition to Stand-Alone
Transition to Stand-Alone Still to Come • Tax • IT • Back Office Accounting • Indirect Procurement • Installation of SAP Platform • Replacement of BMS Shared Services with IBM Accomplished in 2009 • Human Resources • Legal • Internal Audit • Treasury • Financial Controls and Reporting • Investor Rel
Slide 33: Pro Forma Capitalization
Pro Forma Capitalization Anticipate after-tax interest expense savings of about $0.07 to $0.09 per share in 2010, including fixed to floating rate swaps • Fully repaid $1.74BN debt owed to BMS • Refinanced at attractive rates • Doubled average duration from 6 to 12 years NOVEMBER DEBT REFINANCING 1.
Slide 34: Strong and Stable Free Cash Flow
Strong and Stable Free Cash Flow $ in Millions 2007 2008 2009 2008 September YTD Full Year Net Earnings Depreciation and Amortization Change in Working Capital Other Net Cash from Operations Capital Expenditures Free Cash Flow $430 $51 ($33) $31 $479 ($78) $400 $401 $52 $20 $16 $489 ($81) $408 $343
Slide 35: Mead Johnson Strategy for Growth
Mead Johnson Strategy for Growth Market Share Gains Adjacencies New / Expanded Geographies Market Growth
Slide 36: Investment Highlights
Investment Highlights QUALITY & PRODUCTIVITY GROWTH INDUSTRY LEADING BRANDS GLOBAL REACH INNOVATION PIPELINE EXPERIENCED LEADERSHIP FINANCIAL PERFORMANCE • Global leader in pediatric nutrition, an attractive growth industry • “Enfa” family of brands is the #1 global brand franchise in pediatric nutr
Slide 37: Appendix
Appendix
Slide 38: Reconciliation of GAAP to Non-GAAP Net Sales and EBIT
Reconciliation of GAAP to Non-GAAP Net Sales Earnings Before Interest and Income Taxes (EBIT) Year Ended December 31, 9 Months Ended September 30, $ in millions GAAP $2,345 $2,576 $2,882 $2,175 $2,112 Adjustments: Operating Model (36) (36) (36) (25) Adjusted Non-GAAP $2,309 $2,541 $2,847 $2,149 $2,1
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