PITTSBURGH, Feb. 22, 2021 /PRNewswire/ -- Viatris Inc. (NASDAQ: VTRS) today announced its 2021 financial guidance and reaffirmed its commitment to rapid de-leveraging, to enhancing and growing free cash flows, particularly following the phasing out of one-time and other stand up costs, to initiating a dividend, and to delivering total shareholder return (TSR).
2021 Financial Guidance | ||
Range (Billions) | Midpoint (Billions) | |
Revenue | $17.2 - $17.8 | $17.5 |
Adjusted EBIDTA (1) | $6.0 - $6.4 | $6.2 |
Free Cash Flow (1) | $2.0 - $2.3 | $2.15 |
(1) Non-GAAP financial measures. Please see "Non-GAAP Financial Measures" for additional information. The 2021 Free Cash Flow guidance includes $1.5 billion cash cost to achieve synergies and other one-time cash costs. | ||
Viatris CEO Michael Goettler said, "The strategic rationale for creating Viatris is as compelling today as when we announced the transaction to create this new company in July 2019. We launched Viatris with a TSR-focused operating model and a commitment to maintaining a strong balance sheet. As we previously stated, our company's priorities in the first three years as we stand up Viatris will be predominately focused on rebalancing the business, generating strong and growing free cash flows, and rapidly de-leveraging.
"We are confident that our financial guidance for 2021 is the right starting point for Viatris and continue to expect 2021 to be our trough year in terms of revenue, adjusted EBITDA and free cash flow, reflecting a balanced view of both near-term tailwinds and headwinds, particularly given the delay in closing of the combination between Mylan and Pfizer's Upjohn business," Goettler said.
Goettler continued, "Our Global Healthcare Gateway® will fuel our future growth by leveraging our own diverse portfolio and pipeline, as well as those of our current and future partners through our unmatched global infrastructure, and significant scientific, manufacturing and commercial capabilities, all while executing on our mission to empower people worldwide to live healthier at every stage of life. We also look forward to meeting our commitment to provide a longer-term financial outlook in the coming months."
Viatris president Rajiv Malik said, "Since we launched Viatris approximately 90 days ago, we have taken swift and decisive action to rebalance and position our business to succeed and compete in the current environment. This includes our multi-year global restructuring program we expect will accelerate the achievement of our $1 billion in cost synergies in three years, instead of our initial four-year timeframe, and will position us to continue to optimize our unique platform over the long term. We have made significant progress on this program, including taking steps to optimize our commercial and functional infrastructure, consolidate manufacturing sites and implement centers of excellence to enhance innovation and efficiency. We expect this work will enable us to create a more flexible, efficient Viatris better positioned to achieve our long-term objectives. We are looking forward to maximizing our anticipated new product launches, including biosimilars and complex generics, through our enhanced combined global manufacturing and commercial platforms."
Initiating 2021 Dividend and Reaffirming Capital Allocation Priorities
The Viatris Board has undertaken a comprehensive review of management's operating plan for 2021 and unanimously supports the Company's priorities for the next few years, including its priorities for capital allocation and initiating an annualized dividend of at least 25% of free cash flow for 2021. Based on the mid-point of Viatris' 2021 free cash flow guidance of $2.15 billion, the Board expects the Company to pay an annualized dividend of approximately $540 million, or $0.44 per share, with the expectation to grow the dividend amount thereafter. Due to the timing of the initiation of the dividend we expect to make three payments in 2021 totaling approximately $400 million. The Company expects the first quarterly dividend of $0.11 per share to be declared in May 2021 and distributed in June 2021, subject to the Board's first quarter 2021 review.
The Company expanded its commitment to debt paydown and to maintaining its investment grade credit rating, and now expects to repay approximately $6.5 billion in debt by the end of 2023. In addition, the Company is targeting a long-term leverage ratio of 2.5x, with a range of 2.2x to 2.8x. The Company also continues to be committed not to institute any share repurchase programs until the leverage ratio is at least