Organon & Co. · NYSE:OGN
Organon & — Q2 2022 Earnings Presentation
25 slides from Organon &'s earnings presentation, Aug 4, 2022
Slide 1: Organon Q2 2022 Earnings
Organon Q2 2022 Earnings = ORGANON”
Slide 2: Disclaimer statement: Safe Harbor for Forward-Looking Statements
Disclaimer statement 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. Private Securities Litigation Reform Act of 1995, including, but not limi
Slide 3: Disclaimer statement, cont. Non-GAAP Information
Disclaimer statement, cont. Non - GAAP Information This presentation contains “non - GAAP financial measures,” which are financial measures that either exclude or include amounts th at are not excluded or included in the most directly comparable measures calculated and presented in accordance with U
Slide 4: Second quarter 2022 highlights
Second quarter 2022 highlights 4 • All franchises show growth Ex - FX • Improved trajectory for Established Brands • Expanded biosimilars portfolio with additional R&D collaborator; Shanghai Henlius Biotech Inc. • Revenues of $1,585 million • $512 million Adjusted EBITDA, inclusive of $97M in acquir
Slide 5: Balancing commercial and pipeline business development
Balancing commercial and pipeline business development Commercialized/soon to be commercialized assets Building a pipeline • March 2022 - Licensing agreement for Xaciato Œ • July 2022 - Licensing agreement for a novel investigational non - hormonal, on - demand contraceptive candidate with Cirqle Bi
Slide 6: Revenue bridge: solid volume growth, limited LOE and VBP impact
- 1% reported +5% ex - FX $ mil 1,585 1,595 6 Solid volume growth, limited LOE and VBP impact (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, and allocated amounts from pre - spin r
Slide 7: All geographic areas grew ex-FX
All geographic areas grew ex - FX $ mil Q2 - 22 Q2 - 21 (mid - year spin) Actual VPY Ex FX VPY Europe and Canada 443 470 (6)% 4% United States 351 339 4% 4% Asia Pacific and Japan 291 309 (6)% 4% China 244 236 3% 4% Latin America, Middle East, Russia and Africa 216 190 14% 16% Other (1) 40 51 (22)%
Slide 8: Women's Health
Women’s Health Women’s Health Revenues $ mil Q2 - 2022 Q2 - 2021 (mid - year spin) Act VPY Ex FX VPY 2022 YTD 2021 YTD (mid - year spin) Act VPY Ex FX VPY Top Contraception Products Nexplanon ® 195 184 6% 8% 366 368 — % 1% NuvaRing ® 42 53 (21)% (18)% 83 98 (16)% (12)% Cerazette Œ 15 18 (16)% (9)% 3
Slide 9: Biosimilars
Biosimilars Biosimilars Revenues $ mil Q2 - 2022 Q2 - 2021 (mid - year spin) Act VPY Ex FX VPY 2022 YTD 2021 YTD (mid - year spin) Act VPY Ex FX VPY Renflexis ® 59 43 38% 39% 105 81 30% 30% Ontruzant ® 35 22 57% 61% 57 45 28% 33% Brenzys Œ 14 11 28% 34% 28 21 34% 39% Aybintio Œ 9 8 14% 27% 19 16 20%
Slide 10: Established Brands
Established Brands Established brands Revenues $ mil Q2 - 2022 Q2 - 2021 (mid - year spin) Act VPY Ex FX VPY 2022 YTD 2021 YTD (mid - year spin) Act VPY Ex FX VPY Cardiovascular 412 430 (4)% 3% 822 819 — % 7% Respiratory 254 248 2% 8% 559 484 16% 21% Non - Opioid Pain, Bone & Dermatology 209 218 (4)
Slide 11: New IPR&D treatment ~$100M impact to Q2 Adj. EBITDA
New IPR&D treatment ~$100M impact to Q2 Adj. EBITDA $ mil Q2 - 22 Q2 - 21 (mid - year spin) Actual VPY 2022 YTD 2021 YTD (mid - year spin) Actual VPY Revenues 1,585 1,595 (1)% 3,152 3,101 2% Cost of sales 588 583 1% 1,149 1,174 (2)% Gross profit 997 1,012 (1)% 2,003 1,927 4% Non - GAAP Adjusted Gros
Slide 12: Balancing commercial and pipeline business development
Balancing commercial and pipeline business development Commercialized/soon to be commercialized assets Building a pipeline • March 2022 - Licensing agreement for Xaciato Œ • July 2022 - Licensing agreement for a novel investigational non - hormonal, on - demand contraceptive candidate with Cirqle Bi
Slide 13: $100 million voluntary debt repayment in Q2
13 $ mil $100 million voluntary debt repayment in Q2 - Bank covenant (*) net leverage ratio ~3.5x Debt capitalization as of June 30, 2022 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Reported cash and cash equivalents 730 1,008 737 694 545 Cash for IOM - exit inven
Slide 14: FX headwinds persist, masking solid volume growth
$ mil 14 FX headwinds persist, masking solid volume growth (1) (2) $6,304 $6,100 – $6,300 <(100) ~(50) ~(200) +600 - +700 ~(100) (350) − (400 ) FX ~550 - 650 bps headwind to growth in 2022 (1) Other includes manufacturing sales to Merck & Co., Inc., Rahway, NJ, USA and other third parties, and alloc
Slide 15: FY 2022 guidance recast for IPR&D and FX; no change operationally
FY 2022 guidance recast for IPR&D and FX; no change operationally 15 $M, provided on a Non - GAAP basis, except Revenues Guidance provided May 5, 2022 FX impact IPR&D Guidance provided as of August 4, 2022 Revenues $6,100 - $6,400 from 300 - 475 bps to 550 - 650 bps $6,100 - $6,300 Adjusted gross ma
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: Established Brands sizeable and stable base of revenue
Established Brands sizeable and stable base of revenue $ mil 18
Slide 19: Franchise performance
Franchise performance $ mil Q2 - 2022 Q2 - 2021 (mid - year spin) Actual VPY Ex FX VPY 2022 YTD 2021 YTD (mid - year spin) Actual VPY Ex FX VPY Women’s Health 408 417 (2)% 1% 786 816 (4)% (1)% Biosimilars 119 86 39% 42% 217 166 31% 34% Est. Brands 1,018 1,045 (2)% 4% 2,072 2,002 3% 10% Other (1) 40
Slide 20: Gross margin reconciliation
Gross margin reconciliation $ mil Q2 - 2022 Q2 - 2021 (mid - year spin) YTD 2022 YTD 2021 (mid - year spin) Revenues 1,585 1,595 3,152 3,101 Cost of sales 588 583 1,149 1,174 Gross Profit 997 1,012 2,003 1,927 Gross Margin 62.9% 63.4% 63.5% 62.1% Amortization 28 22 56 42 One - time costs (1) 19 10 2
Slide 21: Income from continuing operations before income taxes to Adjusted EBITDA
Income from continuing operations before income taxes to Adjusted EBITDA $ mil Q2 - 2022 Q2 - 2021 (mid - year spin) Income from continuing operations before income taxes 287 437 Depreciation 22 21 Amortization (1) 28 22 Interest expense 98 62 EBITDA 435 542 Restructuring costs — 1 One - time costs
Slide 22: Income from continuing operations before income taxes to Adjusted EBITDA (YTD)
Income from continuing operations before income taxes to Adjusted EBITDA $ mil 2022 YTD 2021 YTD (mid - year spin) Income from continuing operations before income taxes 729 904 Depreciation 47 39 Amortization (1) 56 42 Interest expense 195 62 EBITDA 1,027 1,047 Restructuring costs — 2 One - time cos
Slide 23: Income from continuing operations before income taxes to Adjusted Net Income
Income from continuing operations before income taxes to Adjusted Net Income $ mil (except EPS) Q2 - 2022 Q2 - 2021 (mid - year spin) Income from continuing operations before income taxes 287 437 Amortization (1) 28 22 Restructuring costs — 1 One - time costs (2) 58 66 Stock - based compensation 19
Slide 24: Income from continuing operations before income taxes to Adjusted Net Income (YTD)
Income from continuing operations before income taxes to Adjusted Net Income $ mil (except EPS) 2022 YTD 2021 YTD (mid - year spin) Income from continuing operations before income taxes 729 904 Amortization (1) 56 42 Restructuring costs — 2 One - time costs (2) 98 115 Stock - based compensation 34 2
Slide 25: Broad and diverse portfolio
Number of products 13 5 49 Women’s Health Biosimilars Established Brands Broad and diverse portfolio 25