/C O R R E C T I O N -- Perrigo Company plc/
In the news release,
Perrigo Reports Third Quarter 2024 Financial Results From Continuing Operations
Company Delivered Solid Third Quarter Financial Results, Including Meaningful Operating Income Growth and Margin Expansion
Infant Formula Business Recovery Making Significant Progress, Including
Reaffirms Fiscal 2024 Adjusted EPS Outlook
Third Quarter 2024 Highlights:
-
Net sales of
$1.1 billion declined 3.2% versus the prior year quarter. Organic2 net sales decreased 2.4%, due primarily to -2.8 percentage points from previously disclosed lost distribution of lower margin products inU.S. Store Brand. This expected impact was partially offset by organic growth of +0.4 percentage points across the rest of the business.
-
Consumer Self-Care International ("CSCI") net sales declined 1.0% compared to the prior year quarter due primarily to exited businesses and product lines of -3.2 percentage points. Organic net sales grew +1.0%, led by greater demand for cough cold products within the Upper Respiratory category.
-
Consumer Self-Care Americas ("CSCA") net sales decreased 4.6% compared to the prior year quarter, due primarily to -4.4 percentage points from previously disclosed lost distribution of lower margin products in
U.S. Store Brand. Infant formula net sales grew +3% compared to the prior year quarter and +58% growth sequentially compared to the second quarter of 2024.
-
GAAP ("reported") gross margin was 37.2%, an increase of 60 basis points compared to the prior year quarter. Non-GAAP ("adjusted") gross margin expanded 160 basis points to 41.0% primarily driven by infant formula business recovery, benefits from the Company's Supply Chain Reinvention program, and favorable mix within global store brand and across the portfolio.
-
GAAP operating income was
$80 million compared to$62 million in the prior year quarter. Adjusted operating income of$182 million increased$32 million , or 21.3%, compared to the prior year period due primarily to benefits from the Company's 'Project Energize' program (see Project Energize section below for details).
-
Reported operating margin was 7.4%, a 190 basis points increase compared to the prior year quarter. Adjusted operating margin expanded 340 basis points to 16.8% driven primarily by adjusted gross margin flow-through and benefits from Project Energize.
-
Reported diluted loss per share was
$(0.13) , compared to reported diluted earnings per share ("EPS") of$0.11 in the prior year quarter.
-
Adjusted diluted EPS was
$0.81 , compared to$0.64 in the prior year quarter, an increase of$0.17 , or 26.6%, per share.
-
Cash and cash equivalents on the balance sheet as of
September 28, 2024 , was$1.5 billion , including proceeds associated with the Company's senior notes offering closed onSeptember 17, 2024 . After the quarter ended,$700 million of such proceeds were used to fully redeem the Company's 4.375% Senior Notes Due 2026. The refinancing resulted in lowering the Company's average interest rate after executing derivatives, with no changes to the Company's total long-term debt outstanding or credit ratings.
Year-to-Date 2024 Highlights:
-
Net sales of
$3.2 billion decreased 7.5% versus the prior year period. Organic net sales decreased 6.3%, due primarily to 1) -3.7 percentage points from lower net sales in the Nutrition category stemming from actions to augment and strengthen the infant formula network, and 2) -4.7 percentage points from SKU prioritization actions, third quarter lost distribution inU.S. Store Brands, and lower global seasonal demand during the first half of the year. These factors more than offset organic net sales growth of +2.2 percentage points across the rest of the business.
-
CSCI year-to-date net sales of
$1.3 billion grew 0.4% compared to the prior year period. Organic net sales grew 3.0%, including -2.3 percentage points from lower net sales in the Upper Respiratory and Pain & Sleep Aids categories due to lower seasonal demand and supply constraints.
-
CSCA year-to-date net sales of
$1.9 billion decreased 12.1% compared to the prior year period. Organic net sales declined 11.5% stemming from -6.0 percentage points from lower net sales in the Nutrition category and -6.0 percentage points from SKU prioritization actions and third quarter lost distribution inU.S. Store Brand, in addition to lower seasonal demand during the first half of the year. These factors more than offset organic net sales growth of +0.5%.
-
GAAP operating loss was
$1 million , compared to operating income of$168 million in the prior year period. Adjusted operating income of$415 million increased 1.8%, or 2.6% on a constant currency basis2, compared to the prior year period. Adjusted operating income growth included an impact of -10.4 percentage points from actions to augment and strengthen infant formula and -3.5 percentage points from exited businesses and product lines.
-
Reported EPS was a loss of
$0.87 , as compared to EPS of$0.17 in the prior year period.
-
Adjusted diluted EPS was
$1.63 , as compared to$1.72 in the prior year period, due primarily to discrete tax benefits in the prior year of$0.11 per share. Year-to-date 2024 adjusted diluted EPS included a -$0.26 year-over-year impact from infant formula.
Fiscal Year 2024 Outlook:
-
The Company now expects its fiscal 2024 organic net sales and reported net sales outlooks towards the lower end of its previously stated ranges of organic net sales growth versus the prior year of -3% to -1% and reported net sales growth versus the prior year of -5% to -3%. The Company continues to expect gross and operating margin expansion compared to the prior year.
-
The Company reaffirms its adjusted diluted EPS outlook of
$2.50 to$2.65 .
|
|
(1) |
Volume share gains according to Circana Scanner panel latest 13-weeks ending |
(2) |
See attached Appendix for details. Change in net sales on an organic basis excludes the effects of acquisitions, divestitures, exited product lines and the impact of currency. Change in net sales on a constant currency basis excludes the impact of currency in both comparable periods. |
(3) |
All tables and data may not add due to rounding. Percentages are based on actuals. |
President and CEO,
Lockwood-Taylor continued, "We delivered strong third quarter earnings results, despite previously discussed topline impacts from lost distribution of lower margin products in
Lockwood-Taylor concluded, "While we have made meaningful progress on our fiscal 2024 operational priorities, there is still work to be done. The
Refer to Tables I through VII at the end of this press release for a reconciliation of non-GAAP adjustments to the current year and prior year periods and additional non-GAAP information. The Company's reported results are included in the attached Consolidated Statements of Operations, Balance Sheets and Statements of Cash Flows.
Project Energize
As part of the Company's sustainable, value accretive growth strategy, the Company launched Project Energize – a global investment and efficiency program to drive the next evolution of capabilities and organizational agility during the first quarter of 2024. This three-year program is expected to produce significant benefits in the Company's long-term business performance by enabling our One
Project Energize is expected to deliver annualized pre-tax savings in the range of
Third Quarter 2024 Net Sales Change Compared to Prior Year(3) |
|||||
|
Reported
|
Foreign
Exchange |
Constant |
Exited |
Organic
|
CSCA |
(4.6) % |
— % |
(4.6) % |
(0.2) % |
(4.4) % |
CSCI |
(1.0) % |
1.3 % |
(2.2) % |
(3.2) % |
1.0 % |
Total |
(3.2) % |
0.5 % |
(3.7) % |
(1.3) % |
(2.4) % |
Third Quarter 2024 Change Compared to Prior Year(3) |
|||
(in millions, except earnings per share; see attached Tables I-IV for reconciliation to GAAP) |
|||
|
Three Months Ended |
Three Months Ended |
Percentage |
|
|
|
(3.2) % |
|
|
|
|
Reported Gross Profit |
|
|
(1.7) % |
Reported Gross Margin |
37.2 % |
36.6 % |
60 bps |
Reported Operating (Loss) Income |
|
|
29.4 % |
Reported Operating Margin |
7.4 % |
5.5 % |
190 bps |
Reported Net (Loss) Income |
( |
|
(214.5) % |
Reported Diluted (Loss) Earnings Per Share |
( |
|
(218.2) % |
|
|
|
|
Adjusted Gross Profit |
|
|
0.6 % |
Adjusted Gross Margin |
41.0 % |
39.5 % |
160 bps |
Adjusted Operating Income |
|
|
21.3 % |
Adjusted Operating Margin |
16.8 % |
13.4 % |
340 bps |
Adjusted Net Income |
|
|
28.3 % |
Adjusted Diluted EPS |
|
|
26.6 % |
Net sales of
The change in organic net sales was primarily due to strategic pricing actions of +1.7 percentage points and volume/mix of -4.1 percentage points, of which -2.8 percentage points of volume/mix stemmed from previously disclosed lost distribution of lower margin products in
The
Reported gross profit of
Reported gross margin was 37.2%, an increase of 60 basis points versus the prior year quarter. Adjusted gross margin expanded 160 basis points to 41.0%, driven by the same factors as adjusted gross profit, in addition to favorable mix within global store brand and across the portfolio. Exited businesses and product lines unfavorably impacted gross margin by -40 basis points.
Reported operating income of
Reported operating margin was 7.4%, an increase of 190 basis points versus the prior year quarter, due primarily to the same factors as reported operating income. Adjusted operating margin of 16.8%, increased 340 basis points versus the prior year quarter, due primarily to gross margin flow-through in addition to the same factors as adjusted operating income. Exited businesses and product lines unfavorably impacted operating margin by -40 basis points.
Reported net loss was $18 million, or (
Third Quarter 2024 Business Segment Results from Continuing Operations
Consumer Self-Care Americas Segment (CSCA)
Third Quarter 2024 Net Sales Change Compared to Prior Year(3) |
|||||
|
Reported
|
Foreign
Exchange |
Constant |
Exited |
Organic
|
CSCA |
(4.6) % |
— % |
(4.6) % |
(0.2) % |
(4.4) % |
Third Quarter 2024 Change Compared to Prior Year(3) |
|
|||
(in millions, except earnings per share; see attached Tables I-IV for reconciliation to GAAP) |
|
|||
|
Three Months Ended |
Three Months Ended |
Percentage |
|
CSCA Net Sales |
|
|
(4.6) % |
|
|
|
|
|
|
Reported Gross Profit |
|
|
(1.4) % |
|
Reported Gross Margin |
32.9 % |
31.8 % |
110 bps |
|
Reported Operating Income |
|
|
13.8 % |
|
Reported Operating Margin |
15.4 % |
12.9 % |
250 bps |
|
|
|
|
|
|
Adjusted Gross Profit |
|
|
2.9 % |
|
Adjusted Gross Margin |
35.0 % |
32.5 % |
250 bps |
|
Adjusted Operating Income |
|
|
22.0 % |
|
Adjusted Operating Margin |
19.7 % |
15.4 % |
430 bps |
|
CSCA net sales of $671 million decreased $32 million, or 4.6%, due primarily to a decline in organic net sales of -4.4% and exited businesses and product lines of -0.2%.
Organic net sales were impacted by -4.4 percentage points from previously disclosed lost distribution of lower margin products in
Reported gross profit of $221 million decreased $3 million, or 1.4%. Adjusted gross profit increased $7 million, or 2.9%, to $235 million due primarily to greater manufacturing efficiencies in infant formula, benefits from the Company's Supply Chain Reinvention program and higher profit new products. These factors were partially offset by lower OTC sales volumes, partially due to previously disclosed lost distribution of lower margin products.
Reported gross margin of 32.9% increased 110 basis points versus the prior year quarter. Adjusted gross margin expanded 250 basis points to 35.0%, driven by the same factors as adjusted gross profit in addition to favorable mix within store brand and across the segment.
Reported operating income was $104 million compared to $91 million in the prior year quarter, an increase of 13.8%. Adjusted operating income increased $24 million, or 22.0%, to
Reported operating margin of 15.4% increased 250 basis points versus the prior year quarter. Adjusted operating margin expanded 430 basis points to 19.7% driven by the same factors as adjusted operating income.
Consumer Self-Care International Segment (CSCI)
Third Quarter 2024 Net Sales Change Compared to Prior Year(3) |
|||||
|
Reported
|
Foreign
Exchange |
Constant |
Exited |
Organic
|
CSCI |
(1.0) % |
1.3 % |
(2.2) % |
(3.2) % |
1.0 % |
Third Quarter 2024 Change Compared to Prior Year(3) |
|||
(in millions, except earnings per share; see attached Tables I-IV for reconciliation to GAAP) |
|||
|
Three Months Ended |
Three Months Ended |
Percentage |
CSCI Net Sales |
|
|
(1.0) % |
|
|
|
|
Reported Gross Profit |
|
|
(1.2) % |
Reported Gross Margin |
44.4 % |
44.5 % |
(10) bps |
Reported Operating (Loss) Income |
|
|
260.1 % |
Reported Operating Margin |
11.7 % |
3.2 % |
850 bps |
|
|
|
|
Adjusted Gross Profit |
|
|
(1.9) % |
Adjusted Gross Margin |
50.7 % |
51.2 % |
(50) bps |
Adjusted Operating Income |
|
|
15.3 % |
Adjusted Operating Margin |
22.1 % |
19.0 % |
310 bps |
CSCI net sales declined 1.0% as favorable currency translation of +1.3% and organic net sales growth of +1.0% were more than offset by -3.2% from exited businesses and product lines.
Organic net sales growth was driven by the Upper Respiratory,
Reported gross profit of
Reported gross margin of 44.4% decreased 10 basis points compared to the prior year. Adjusted gross margin declined 50 basis points to 50.7% driven by an unfavorable impact of -80 basis points from exited businesses and product lines, partially offset by favorable brand mix.
Reported operating income of
Reported operating margin was 11.7%, a 850 basis points increase versus the prior year. Adjusted operating margin expanded 310 basis points to a CSCI quarterly record of 22.1%, due primarily to operating leverage. Exited businesses and product lines unfavorably impacted adjusted operating margin by -80 basis points.
Cash Flow and Balance Sheet
Third quarter 2024 cash from operations was
Actions to Enhance the Balance Sheet
- On
September 17, 2024 , the Company closed its senior notes offering due in 2032, which generated net proceeds of approximately$1.1 billion . - During the third quarter of 2024, the Company used a portion of these proceeds to prepay approximately
$390 million of its Term Loan B dueApril 2029 . This activity is reflected in the Company's cash and cash equivalents and total debt as ofSeptember 28, 2024 . - During the fourth quarter of 2024, the Company used the remaining proceeds from its senior notes offering to fully redeem its
$700 million , 4.375% Senior Notes due in 2026. This action was not reflected in the Company's cash and cash equivalents or total debt as ofSeptember 28, 2024 . - In aggregate, these activities resulted in lowering the Company's average interest rate after executing derivatives, with no changes to the Company's total long-term debt outstanding or credit ratings.
- The Company remains committed to fully repaying its
$400 million , 3.900% Senior Notes when due inDecember 2024 .
Fiscal 2024 Outlook
The Company expects its fiscal 2024 organic net sales and total net sales outlook to be towards the lower end of their previously stated ranges of organic net sales growth outlook versus the prior year of -3% to -1% and total net sales growth outlook versus the prior year of -5% to -3%. The Company reaffirms its adjusted diluted EPS outlook of
The Company also expects:
- Gross and operating margin expansion,
- Interest expense of approximately
$180 million , - Full year adjusted tax rate of 19% to 20%, and
- Operating cash flow conversion (operating cash flow as a percentage of adjusted net income) of approximately 90% to 100%.
The Company cannot reconcile its expected organic net sales growth, adjusted diluted earnings per share to diluted earnings per share, adjusted tax rate or operating cash flow conversion under "Fiscal 2024 Outlook" without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time. These items include, but are not limited to, uncertainty of non-recurring infant formula related charges and timing and amount of restructuring charges and the income tax effects of these items or other income tax-related events.
About
Webcast and Conference Call Information
The earnings conference call will be available live via webcast to interested parties in the investor relations section of the
Forward-Looking Statements
Certain statements in this press release are "forward-looking statements." These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "forecast," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential" or the negative of those terms or other comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control, including: supply chain impacts on the Company's business, including those caused or exacerbated by armed conflict, trade and other economic sanctions and/or disease; general economic, credit, and market conditions; the impact of the war in
Non-GAAP Measures
This press release contains certain non-GAAP measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts different from the most directly comparable measure calculated and presented in accordance with
- net sales growth on an organic basis, which excludes acquisitions, divested businesses, exited product lines, and the impact of currency,
- adjusted gross profit,
- adjusted net income,
- adjusted operating income,
- adjusted operating income excluding infant formula,
- adjusted diluted earnings per share,
- constant currency net sales growth, adjusted operating income, and adjusted gross profit,
- adjusted operating margin, and
- adjusted gross margin.
These non-GAAP financial measures should be considered as supplements to the GAAP reported measures, should not be considered replacements for, or superior to the GAAP measures and may not be comparable to similarly named measures used by other companies. The Company presents these non-GAAP financial measures in order to provide transparency to our investors because they are measures that management uses to assess both management performance and the financial performance of our operations and to allocate resources. In addition, management believes that these measures may assist investors with understanding and evaluating our initiatives to drive improved financial performance and enables investors to supplementally compare our operating performance with the operating performance of our competitors including with those of our competitors having different capital structures. While we have excluded certain of these items from historical non-GAAP financial measures, there is no guarantee that the items excluded from non-GAAP financial measures will not continue into future periods. For instance, we expect to continue to experience and report restructuring-related charges associated with continued execution of our strategic initiatives.
The Company provides non-GAAP financial measures as additional information that it believes is useful to investors and analysts in evaluating the performance of the Company's ongoing operating trends, facilitating comparability between periods and, where applicable, with companies in similar industries and assessing the Company's prospects for future performance. These non-GAAP financial measures exclude items, such as impairment charges, restructuring charges, and acquisition and integration-related charges, that by their nature affect comparability of operational performance or that we believe obscure underlying business operational trends. The intangible asset amortization excluded from these non-GAAP financial measure represents the entire amount recorded within the Company's GAAP financial statements and is excluded because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. The non-GAAP measures the Company provides are consistent with how management analyzes and assesses the operating performance of the Company, and disclosing them provides investor insight into management's view of the business. Management uses these adjusted financial measures for planning and forecasting in future periods, and evaluating segment and overall operating performance. In addition, management uses certain of the profit measures as factors in determining compensation.
Non-GAAP measures related to profit measurements, which include adjusted gross profit, adjusted net income, adjusted operating income, adjusted diluted EPS, adjusted gross margin and adjusted operating margin are useful to investors as they provide them with supplemental information to enhance their understanding of the Company's underlying business performance and trends, and enhance the ability of investors and analysts to compare the Company's period-to-period financial results. Management believes that adjusted gross margin and adjusted operating margin are useful to investors, in addition to the reasons discussed above, by allowing them to more easily compare and analyze trends in the Company's peer business group and assisting them in comparing the Company's overall performance to that of its competitors. The Company also discloses net sales growth excluding the impact of currency on an organic basis. The Company believes these supplemental financial measures provide investors with consistency in financial reporting, enabling meaningful comparisons of past and present underlying operating results, and also facilitate analysis of the Company's operating performance and acquisition and divestiture trends.
A copy of this press release, including the reconciliations, is available on the Company's website at www.perrigo.com.
(269) 686-3373 / bradley.joseph@perrigo.com
(269) 686-3238 / nicholas.gallagher@perrigo.com
PERRIGO COMPANY PLC |
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|
Three Months Ended |
|
Nine Months Ended |
||||
|
|
|
|
|
|
|
|
Net sales |
$ 1,087.5 |
|
$ 1,123.8 |
|
$ 3,235.1 |
|
$ 3,498.7 |
Cost of sales |
683.1 |
|
712.6 |
|
2,078.3 |
|
2,245.6 |
Gross profit |
404.4 |
|
411.2 |
|
1,156.8 |
|
1,253.1 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Distribution |
25.2 |
|
27.8 |
|
74.7 |
|
85.0 |
Research and development |
26.0 |
|
29.6 |
|
84.4 |
|
92.9 |
Selling |
129.4 |
|
150.2 |
|
429.8 |
|
489.2 |
Administration |
116.9 |
|
126.0 |
|
373.3 |
|
393.6 |
Impairment charges |
16.2 |
|
— |
|
50.3 |
|
— |
Restructuring |
16.8 |
|
15.5 |
|
98.1 |
|
25.7 |
Other operating (income) expense, net |
(6.5) |
|
— |
|
47.5 |
|
(0.8) |
Total operating expenses |
324.0 |
|
349.1 |
|
1,158.1 |
|
1,085.6 |
|
|
|
|
|
|
|
|
Operating income (loss) |
80.4 |
|
62.1 |
|
(1.3) |
|
167.5 |
|
|
|
|
|
|
|
|
Interest expense, net |
57.6 |
|
43.5 |
|
144.7 |
|
131.1 |
Other (income) expense, net |
(4.1) |
|
(0.6) |
|
(0.5) |
|
(9.6) |
Loss on extinguishment of debt |
5.1 |
|
— |
|
5.2 |
|
— |
Income (loss) from continuing operations before income taxes |
21.8 |
|
19.2 |
|
(150.7) |
|
46.0 |
Income tax (benefit) expense |
39.4 |
|
3.8 |
|
(31.5) |
|
22.7 |
Income (loss) from continuing operations |
(17.6) |
|
15.4 |
|
(119.2) |
|
23.3 |
Loss from discontinued operations, net of tax |
(3.4) |
|
(1.2) |
|
(8.1) |
|
(3.7) |
Net income (loss) |
$ (21.0) |
|
$ 14.2 |
|
$ (127.3) |
|
$ 19.6 |
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
Continuing operations |
$ (0.13) |
|
$ 0.11 |
|
$ (0.87) |
|
$ 0.17 |
Discontinued operations |
(0.02) |
|
(0.01) |
|
(0.06) |
|
(0.03) |
Basic earnings (loss) per share |
$ (0.15) |
|
$ 0.10 |
|
$ (0.93) |
|
$ 0.14 |
Diluted |
|
|
|
|
|
|
|
Continuing operations |
$ (0.13) |
|
$ 0.11 |
|
$ (0.87) |
|
$ 0.17 |
Discontinued operations |
(0.02) |
|
(0.01) |
|
(0.06) |
|
(0.03) |
Diluted earnings (loss) per share |
$ (0.15) |
|
$ 0.1 |
|
$ (0.93) |
|
$ 0.14 |
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
|
|
Basic |
137.5 |
|
135.5 |
|
137.3 |
|
135.2 |
Diluted |
137.5 |
|
136.9 |
|
137.3 |
|
136.6 |
PERRIGO COMPANY PLC |
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|
|
|
Assets |
|
|
|
Cash, cash equivalents and restricted cash |
$ 1,463.5 |
|
$ 751.3 |
Accounts receivable, net of allowance for credit losses of |
785.9 |
|
739.6 |
Inventories |
1,133.8 |
|
1,140.9 |
Prepaid expenses and other current assets |
311.6 |
|
201.1 |
Current assets held for sale |
13.0 |
|
— |
Total current assets |
3,707.8 |
|
2,832.9 |
Property, plant and equipment, net |
909.1 |
|
916.4 |
Operating lease assets |
182.2 |
|
183.6 |
|
3,426.8 |
|
3,534.4 |
Definite-lived intangible assets, net |
2,655.4 |
|
2,980.8 |
Deferred income taxes |
22.4 |
|
25.8 |
Other non-current assets |
299.5 |
|
335.2 |
Total non-current assets |
7,495.4 |
|
7,976.2 |
Total assets |
$ 11,203.2 |
|
$ 10,809.1 |
Liabilities and Shareholders' Equity |
|
|
|
Liabilities |
|
|
|
Accounts payable |
$ 458.5 |
|
$ 477.7 |
Payroll and related taxes |
137.8 |
|
127.0 |
Accrued customer programs |
168.3 |
|
163.5 |
Other accrued liabilities |
227.0 |
|
335.4 |
Accrued income taxes |
10.0 |
|
42.1 |
Current indebtedness |
440.7 |
|
440.6 |
Current liabilities held for sale |
8.2 |
|
— |
Total current liabilities |
1,450.5 |
|
1,586.3 |
Non-current liabilities |
|
|
|
Long-term debt, less current portion |
4,312.6 |
|
3,632.8 |
Deferred income taxes |
213.8 |
|
262.3 |
Other non-current liabilities |
660.3 |
|
559.8 |
Total non-current liabilities |
5,186.7 |
|
4,454.9 |
Total liabilities |
6,637.2 |
|
6,041.2 |
Contingencies - Refer to Note 17 |
|
|
|
Shareholders' equity |
|
|
|
Controlling interests: |
|
|
|
Preferred shares, |
— |
|
— |
Ordinary shares, €0.001 par value per share, 10,000 shares authorized |
6,763.9 |
|
6,837.5 |
Accumulated other comprehensive income |
9.8 |
|
10.7 |
Retained earnings (accumulated deficit) |
(2,207.7) |
|
(2,080.3) |
Total shareholders' equity |
4,566.0 |
|
4,767.9 |
Total liabilities and shareholders' equity |
$ 11,203.2 |
|
$ 10,809.1 |
|
|
|
|
Supplemental Disclosures of Balance Sheet Information |
|
|
|
Preferred shares, issued and outstanding |
— |
|
— |
Ordinary shares, issued and outstanding |
136.5 |
|
135.5 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) |
|||
|
|
||
|
Nine Months Ended |
||
|
|
|
|
Cash Flows From Operating Activities |
|
|
|
Net income (loss) |
$ (127.3) |
|
$ 19.6 |
Adjustments to derive cash flows: |
|
|
|
Depreciation and amortization |
245.6 |
|
273.6 |
Impairment charges |
50.3 |
|
— |
Share-based compensation |
44.5 |
|
58.2 |
Restructuring charges |
43.1 |
|
25.7 |
Settlement of interest rate derivatives |
41.2 |
|
— |
Dedesignation of interest rate swap agreements |
14.4 |
|
— |
Amortization of debt discount |
1.1 |
|
1.8 |
Deferred income taxes |
(13.5) |
|
12.3 |
Gain on sale of assets |
(26.0) |
|
(4.0) |
Gain on sale of business |
(5.8) |
|
— |
Other non-cash adjustments, net |
19.2 |
|
(2.7) |
Subtotal |
286.8 |
|
384.5 |
(Decrease) increase in cash due to: |
|
|
|
Accrued income taxes |
(134.6) |
|
(54.4) |
Payroll and related taxes |
(73.9) |
|
(52.7) |
Accounts receivable |
(69.3) |
|
(70.6) |
Inventories |
(14.7) |
|
(5.5) |
Accounts payable |
(4.9) |
|
(92.9) |
Prepaid expenses and other current assets |
0.5 |
|
35.9 |
Accrued customer programs |
2.0 |
|
20.5 |
Other accrued liabilities |
22.4 |
|
13.2 |
Other operating, net |
36.0 |
|
18.8 |
Subtotal |
(236.5) |
|
(187.7) |
Net cash from operating activities |
50.3 |
|
196.8 |
Cash Flows From (For) Investing Activities |
|
|
|
Net proceeds from sale of businesses |
205.5 |
|
— |
Proceeds from sale of assets |
33.3 |
|
2.0 |
Proceeds from royalty rights |
3.5 |
|
18.3 |
Additions to property, plant and equipment |
(80.6) |
|
(75.0) |
Settlement of foreign currency derivatives |
(45.8) |
|
— |
Net cash from (for) investing activities |
115.9 |
|
(54.7) |
Cash Flows From (For) Financing Activities |
|
|
|
Issuances of long-term debt |
1,092.7 |
|
— |
Payments on long-term debt |
(420.4) |
|
(24.0) |
Cash dividends |
(112.9) |
|
(112.1) |
Other financing, net |
(16.3) |
|
(6.5) |
Net cash from (for) financing activities |
543.1 |
|
(142.6) |
Effect of exchange rate changes on cash and cash equivalents |
2.9 |
|
(1.9) |
Net increase (decrease) in cash and cash equivalents |
712.2 |
|
(2.4) |
Cash, cash equivalents and restricted cash of continuing operations, beginning of period |
751.3 |
|
600.7 |
Cash, cash equivalents and restricted cash of continuing operations, end of period |
$ 1,463.5 |
|
$ 598.3 |
See accompanying Notes to the Condensed Consolidated Financial Statements.
TABLE I |
|||||||||
|
|||||||||
|
Three Months Ended |
|
Three Months Ended |
||||||
Consolidated Continuing Operations |
Gross Profit |
Operating Income |
Income (Loss) |
Diluted |
|
Gross Profit |
Operating Income |
Income from Continuing Operations(1) |
Diluted Earnings per Share(1) |
Reported |
$ 404.4 |
$ 80.4 |
$ (17.6) |
$ (0.13) |
|
$ 411.2 |
$ 62.1 |
$ 15.4 |
$ 0.11 |
As a % of reported net sales(2) |
37.2 % |
7.4 % |
(1.6) % |
|
|
36.6 % |
5.5 % |
1.4 % |
|
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
35.0 |
57.7 |
58.3 |
0.42 |
|
32.5 |
68.3 |
68.3 |
0.50 |
Unusual litigation |
— |
24.5 |
24.5 |
0.18 |
|
— |
2.5 |
2.5 |
0.02 |
Restructuring charges and other termination benefits |
1.7 |
18.6 |
18.6 |
0.13 |
|
— |
15.1 |
15.1 |
0.11 |
Impairment charges (3) |
— |
16.2 |
16.2 |
0.12 |
|
— |
— |
— |
— |
Infant formula remediation |
4.9 |
7.3 |
7.3 |
0.05 |
|
— |
— |
— |
— |
Loss on early debt extinguishment |
— |
— |
5.1 |
0.04 |
|
— |
— |
— |
— |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
— |
— |
— |
|
— |
0.7 |
0.7 |
0.01 |
Gain on divestitures and brand sales |
— |
(25.1) |
(30.9) |
(0.22) |
|
— |
— |
— |
— |
Other (4) |
— |
2.7 |
18.5 |
0.13 |
|
|
1.7 |
1.8 |
0.01 |
Non-GAAP tax adjustments(5) |
— |
— |
11.6 |
0.08 |
|
— |
— |
(16.8) |
(0.12) |
Adjusted |
$ 446.1 |
$ 182.4 |
$ 111.6 |
$ 0.81 |
|
$ 443.6 |
$ 150.3 |
$ 87.0 |
$ 0.64 |
As a % of reported net sales(2) |
41.0 % |
16.8 % |
10.3 % |
|
|
39.5 % |
13.4 % |
7.7 % |
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding (in millions) |
|
|
|
|
|
|
|||
|
|
|
Reported |
137.5 |
|
|
|
|
136.9 |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the "Non-GAAP tax adjustments" line item. |
(2) |
Reported net sales for the three months ended |
(3) |
At |
(4) |
Other pre-tax adjustments for the three months ended |
(5) |
Non-GAAP tax adjustments for the three months ended |
TABLE I (Continued) |
|||||||||
|
|||||||||
|
Nine Months Ended |
|
Nine Months Ended |
||||||
Consolidated Continuing Operations |
Gross Profit |
Operating Income (Loss) |
Income (Loss) |
Diluted |
|
Gross Profit |
Operating Income |
Income from Continuing Operations(1) |
Diluted Earnings per Share(1) |
Reported |
$ 1,156.8 |
$ (1.3) |
$ (119.2) |
$ (0.87) |
|
$ 1,253.1 |
$ 167.5 |
$ 23.3 |
$ 0.17 |
As a % of reported net sales(2) |
35.8 % |
— % |
(3.7) % |
|
|
35.8 % |
4.8 % |
0.7 % |
|
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
101.5 |
174.2 |
175.8 |
1.28 |
|
95.1 |
203.5 |
204.6 |
1.49 |
Restructuring charges and other termination benefits |
2.0 |
100.0 |
100.0 |
0.73 |
|
0.1 |
24.3 |
24.3 |
0.18 |
Unusual litigation |
— |
88.1 |
88.1 |
0.64 |
|
— |
7.7 |
7.7 |
0.06 |
Impairment charges(3) |
— |
50.3 |
50.3 |
0.37 |
|
— |
— |
— |
— |
Infant formula remediation |
13.7 |
17.9 |
17.9 |
0.13 |
|
— |
— |
— |
— |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
1.8 |
1.8 |
0.01 |
|
— |
7.1 |
7.1 |
0.05 |
Loss on early debt extinguishment |
— |
— |
5.2 |
0.04 |
|
— |
— |
— |
— |
Gain on divestitures and investment securities |
— |
(25.1) |
(30.9) |
(0.22) |
|
— |
(4.6) |
(4.7) |
(0.03) |
Milestone payments received related to royalty rights |
— |
— |
— |
— |
|
— |
— |
(10.0) |
(0.07) |
Other(4) |
— |
8.7 |
24.5 |
0.18 |
|
(0.1) |
1.7 |
1.8 |
0.01 |
Non-GAAP tax adjustments(5) |
— |
— |
(88.3) |
(0.64) |
|
— |
— |
(19.4) |
(0.14) |
Adjusted |
$ 1,274.0 |
$ 414.6 |
$ 225.3 |
$ 1.63 |
|
$ 1,348.2 |
$ 407.2 |
$ 234.6 |
$ 1.72 |
As a % of reported net sales(2) |
39.4 % |
12.8 % |
7.0 % |
|
|
38.5 % |
11.6 % |
6.7 % |
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding (in millions) |
|
|
|
|
|
|
|||
|
|
|
Reported |
137.3 |
|
|
|
|
136.6 |
Effect of dilution as reported amount was a loss, while adjusted amount was income(6) |
0.6 |
|
|
|
|
— |
|||
|
|
|
Adjusted |
137.8 |
|
|
|
|
136.6 |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
(1) |
Individual pre-tax line item adjustments have not been tax effected, as tax expense on these items are aggregated in the "Non-GAAP tax adjustments" line item. |
(2) |
Reported net sales for the nine months ended |
(3) |
During the nine months ended |
(4) |
Other pre-tax adjustments for the nine months ended |
(5) |
Non-GAAP tax adjustments for the nine months ended |
(6) |
In the period of a net loss, reported diluted shares outstanding equal basic shares outstanding. |
TABLE II |
|||||||
|
|||||||
|
Three Months Ended |
|
Three Months Ended |
||||
Consolidated Continuing Operations |
R&D Expense |
DSG&A Expense |
Restructuring |
|
R&D Expense |
DSG&A Expense |
Restructuring |
Reported |
$ 26.0 |
$ 265.0 |
$ 33.0 |
|
$ 29.6 |
$ 304.0 |
$ 15.5 |
As a % of reported net sales(1) |
2.4 % |
24.4 % |
3.0 % |
|
2.6 % |
27.0 % |
1.4 % |
Pre-tax adjustments: |
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
(0.3) |
(22.4) |
|
|
(0.2) |
(35.5) |
— |
Unusual litigation |
— |
(24.5) |
— |
|
— |
(2.5) |
— |
Restructuring charges and other termination benefits |
— |
— |
(16.8) |
|
— |
— |
(15.0) |
Impairment charges(2) |
— |
— |
(16.2) |
|
— |
— |
— |
Infant formula remediation |
— |
(2.4) |
— |
|
— |
— |
— |
Gain on divestitures and brand sales |
— |
25.2 |
— |
|
— |
— |
— |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
— |
— |
|
— |
(0.7) |
— |
Other (3) |
— |
(2.7) |
— |
|
— |
(1.8) |
— |
Adjusted |
$ 25.6 |
$ 238.1 |
$ — |
|
$ 29.3 |
$ 263.4 |
$ 0.5 |
As a % of reported net sales (1) |
2.4 % |
21.9 % |
— % |
|
2.6 % |
23.5 % |
— % |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Reported net sales for the three months ended |
(2) |
At |
(3) |
Other pre-tax adjustments three months ended |
TABLE II (Continued) |
|||||||
|
|||||||
|
Nine Months Ended |
|
Nine Months Ended |
||||
Consolidated Continuing Operations |
R&D Expense |
DSG&A Expense |
Restructuring |
|
R&D Expense |
DSG&A Expense |
Restructuring |
Reported |
$ 84.4 |
$ 925.3 |
$ 148.4 |
|
$ 92.9 |
$ 967.8 |
$ 24.9 |
As a % of reported net sales (1) |
2.6 % |
28.6 % |
4.6 % |
|
2.7 % |
27.6 % |
0.7 % |
Pre-tax adjustments: |
|
|
|
|
|
|
|
Restructuring charges and other termination benefits |
— |
(0.2) |
(97.9) |
|
— |
(0.8) |
(23.4) |
Unusual litigation |
— |
(88.1) |
— |
|
— |
(7.7) |
— |
Amortization expense related primarily to acquired intangible assets |
(0.7) |
(71.9) |
— |
|
(0.3) |
(108.1) |
— |
Impairment charges(2) |
— |
— |
(50.3) |
|
— |
— |
— |
Infant formula remediation |
— |
(4.2) |
— |
|
— |
— |
— |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
(1.8) |
— |
|
— |
(7.1) |
— |
Gain on divestitures and investment securities |
— |
25.2 |
|
|
— |
4.6 |
— |
Other(3) |
— |
(8.7) |
— |
|
— |
(1.8) |
— |
Adjusted |
$ 83.5 |
$ 775.7 |
$ 0.2 |
|
$ 92.6 |
$ 846.9 |
$ 1.5 |
As a % of reported net sales (1) |
2.6 % |
24.0 % |
— % |
|
2.6 % |
24.2 % |
— % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Reported net sales for the nine months ended |
(2) |
During the nine months ended |
(3) |
Other pre-tax adjustments for the nine months ended |
TABLE III |
|||||
|
|||||
|
Three Months Ended |
|
Three Months Ended |
||
Consolidated Continuing Operations |
Interest |
Income Tax |
|
Interest |
Income Tax |
Reported |
$ 58.6 |
$ 39.4 |
|
$ 42.9 |
$ 3.8 |
As a % of reported net sales (1) |
5.4 % |
3.6 % |
|
3.8 % |
0.3 % |
Effective tax rate |
|
180.9 % |
|
|
19.7 % |
Pre-tax adjustments: |
|
|
|
|
|
Gain on divestitures and brand sales |
5.8 |
— |
|
— |
— |
Loss on early debt extinguishment |
(5.1) |
— |
|
— |
— |
Amortization expense related primarily to acquired intangible assets |
(0.5) |
— |
|
— |
— |
Other(2) |
(15.8) |
— |
|
(0.1) |
— |
Non-GAAP tax adjustments(3) |
— |
(11.6) |
|
— |
16.8 |
Adjusted |
$ 42.9 |
$ 27.9 |
|
$ 42.8 |
$ 20.6 |
As a % of reported net sales (1) |
3.9 % |
2.6 % |
|
3.8 % |
1.8 % |
Adjusted effective tax rate |
|
20.0 % |
|
|
19.2 % |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Reported net sales for the three months ended |
(2) |
Other pre-tax adjustments for the three months ended |
(3) |
Non-GAAP tax adjustments for the three months ended |
TABLE III (Continued) |
|||||
|
|||||
|
Nine Months Ended |
|
Nine Months Ended |
||
Consolidated Continuing Operations |
Interest |
Income Tax |
|
Interest |
Income Tax |
Reported |
$ 149.4 |
$ (31.5) |
|
$ 121.5 |
$ 22.7 |
As a % of reported net sales (1) |
4.6 % |
(1.0) % |
|
3.5 % |
0.6 % |
Effective tax rate |
|
20.9 % |
|
|
49.5 % |
Pre-tax adjustments: |
|
|
|
|
|
Amortization expense primarily related to acquired intangible assets |
(1.6) |
— |
|
(1.1) |
— |
Loss on early debt extinguishment |
(5.2) |
— |
|
— |
— |
(Gain) loss on divestitures and investment securities |
5.8 |
— |
|
0.1 |
— |
Milestone payments received related to royalty rights |
— |
— |
|
10.0 |
— |
Other(2) |
(15.8) |
— |
|
(0.1) |
— |
Non-GAAP tax adjustments(3) |
— |
88.3 |
|
— |
19.4 |
Adjusted |
$ 132.6 |
$ 56.7 |
|
$ 130.4 |
$ 42.2 |
As a % of reported net sales (1) |
4.1 % |
1.8 % |
|
3.7 % |
1.2 % |
Adjusted effective tax rate |
|
20.1 % |
|
|
15.2 % |
|
|
|
|
|
|
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Reported net sales for the nine months ended |
(2) |
Other pre-tax adjustments for the nine months ended |
(3) |
Non-GAAP tax adjustments for the nine months ended |
TABLE IV
|
|||||||||
|
|||||||||
|
Three Months Ended |
|
Three Months Ended |
||||||
Consumer Self-Care Americas |
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
|
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
Reported |
$ 220.8 |
$ 14.3 |
$ 97.5 |
$ 103.6 |
|
$ 224.0 |
$ 19.6 |
$ 111.1 |
$ 91.1 |
As a % of reported net sales(1) |
32.9 % |
2.1 % |
14.5 % |
15.4 % |
|
31.8 % |
2.8 % |
15.8 % |
12.9 % |
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
8.9 |
— |
(6.3) |
15.2 |
|
4.5 |
— |
(10.1) |
14.5 |
Infant formula remediation |
4.9 |
— |
(2.4) |
7.3 |
|
— |
— |
— |
— |
Restructuring charges and other termination benefits |
0.4 |
— |
— |
5.8 |
|
— |
— |
— |
2.1 |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
— |
— |
— |
|
— |
— |
(0.5) |
0.5 |
Adjusted |
$ 235.1 |
$ 14.3 |
$ 88.8 |
$ 131.9 |
|
$ 228.5 |
$ 19.6 |
$ 100.5 |
$ 108.1 |
As a % of reported net sales(1) |
35.0 % |
2.1 % |
13.2 % |
19.7 % |
|
32.5 % |
2.8 % |
14.3 % |
15.4 % |
|
|||||||||
|
Three Months Ended |
|
Three Months Ended |
||||||
|
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
|
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
Reported |
$ 185.0 |
$ 11.6 |
$ 99.1 |
$ 48.9 |
|
$ 187.2 |
$ 10.0 |
$ 151.2 |
$ 13.6 |
As a % of reported net sales(1) |
44.4 % |
2.8 % |
23.8 % |
11.7 % |
|
44.5 % |
2.4 % |
36.0 % |
3.2 % |
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
26.1 |
(0.3) |
(16.2) |
42.6 |
|
28.0 |
(0.2) |
(25.5) |
53.7 |
Impairment charges (2) |
— |
— |
— |
16.2 |
|
— |
— |
— |
— |
Restructuring charges and other termination benefits |
|
— |
0.2 |
9.1 |
|
— |
— |
— |
12.5 |
(Gain) loss on divestitures |
— |
(0.1) |
25.2 |
(25.1) |
|
— |
— |
— |
— |
Adjusted |
$ 211.1 |
$ 11.2 |
$ 108.2 |
$ 91.9 |
|
$ 215.1 |
$ 9.7 |
$ 125.7 |
$ 79.7 |
As a % of reported net sales(1) |
50.7 % |
2.7 % |
26.0 % |
22.1 % |
|
51.2 % |
2.3 % |
29.9 % |
19.0 % |
|
|
|
|
|
|
|
|
|
|
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
CSCA reported net sales for the three months ended |
(2) |
At |
TABLE IV (CONTINUED) |
|||||||||
|
|||||||||
|
Nine Months Ended |
|
Nine Months Ended |
||||||
Consumer Self-Care Americas |
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
|
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
Reported |
$ 564.1 |
$ 45.7 |
$ 305.9 |
$ 188.6 |
|
$ 659.3 |
$ 54.5 |
$ 328.1 |
$ 272.0 |
As a % of reported net sales (1) |
28.9 % |
2.3 % |
15.7 % |
9.7 % |
|
29.7 % |
2.5 % |
14.8 % |
12.3 % |
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
21.1 |
— |
(23.8) |
44.9 |
|
12.8 |
— |
(30.4) |
43.1 |
Restructuring charges and other termination benefits |
0.7 |
— |
— |
24.5 |
|
0.1 |
— |
— |
4.4 |
Infant formula remediation |
13.7 |
— |
(4.2) |
17.9 |
|
— |
— |
— |
— |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
— |
(0.2) |
0.2 |
|
— |
— |
(1.8) |
1.8 |
Adjusted |
$ 599.5 |
$ 45.7 |
$ 277.7 |
$ 276.1 |
|
$ 672.2 |
$ 54.5 |
$ 296.0 |
$ 321.4 |
As a % of reported net sales (1) |
30.8 % |
2.3 % |
14.2 % |
14.2 % |
|
30.3 % |
2.5 % |
13.4 % |
14.5 % |
|
|||||||||
|
Nine Months Ended |
|
Nine Months Ended |
||||||
|
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
|
Gross Profit |
R&D Expense |
DSG&A Expense |
Operating Income |
Reported |
$ 594.2 |
$ 38.7 |
$ 391.2 |
$ 65.1 |
|
$ 593.8 |
$ 38.3 |
$ 493.5 |
$ 43.6 |
As a % of reported net sales (1) |
46.2 % |
3.0 % |
30.4 % |
5.1 % |
|
46.4 % |
3.0 % |
38.5 % |
3.4 % |
Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
Amortization expense related primarily to acquired intangible assets |
80.5 |
(0.7) |
(48.1) |
129.3 |
|
82.4 |
(0.3) |
(77.7) |
160.3 |
Restructuring charges and other termination benefits |
— |
— |
— |
48.8 |
|
— |
— |
(0.8) |
19.2 |
Impairment charges (2) |
— |
— |
— |
50.3 |
|
— |
— |
— |
— |
Acquisition and integration-related charges and contingent consideration adjustments |
— |
— |
— |
— |
|
— |
— |
(1.5) |
1.5 |
(Gain) loss on divestitures |
— |
— |
25.2 |
(25.1) |
|
— |
— |
4.6 |
(4.6) |
Adjusted |
$ 674.7 |
$ 37.8 |
$ 368.1 |
$ 268.7 |
|
$ 676.1 |
$ 38.1 |
$ 418.1 |
$ 220.0 |
As a % of reported net sales (1) |
52.5 % |
2.9 % |
28.6 % |
20.9 % |
|
52.8 % |
3.0 % |
32.6 % |
17.2 % |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
CSCA reported net sales for the nine months ended |
(2) |
During the nine months ended |
TABLE V |
|||||||||||
|
|||||||||||
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||
Consolidated Continuing Operations |
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|
$ 1,087.5 |
|
$ 1,123.8 |
|
(3.2) % |
|
$ 3,235.1 |
|
$ 3,498.7 |
|
(7.5) % |
Less: Currency impact(1) |
5.1 |
|
— |
|
0.5 % |
|
(8.9) |
|
— |
|
(0.2) % |
Constant currency net sales |
$ 1,082.5 |
|
$ 1,123.8 |
|
(3.7) % |
|
$ 3,244.0 |
|
$ 3,498.7 |
|
(7.3) % |
Less: Divestitures(2) |
1.7 |
|
14.9 |
|
(1.2) % |
|
12.6 |
|
36.5 |
|
(0.6) % |
Less: Exited product lines(3) |
(0.5) |
|
0.9 |
|
(0.1) % |
|
(0.3) |
|
14.1 |
|
(0.4) % |
Organic net sales |
$ 1,081.3 |
|
$ 1,108.0 |
|
(2.4) % |
|
$ 3,231.7 |
|
$ 3,448.1 |
|
(6.3) % |
|
|||||||||||
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||
Consumer Self-Care Americas |
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|
$ 671.3 |
|
$ 703.5 |
|
(4.6) % |
|
$ 1,949.5 |
|
$ 2,217.9 |
|
(12.1) % |
Less: Currency impact(1) |
(0.2) |
|
— |
|
— % |
|
(0.4) |
|
— |
|
— % |
Constant currency net sales |
$ 671.5 |
|
$ 703.5 |
|
(4.6) % |
|
$ 1,949.9 |
|
$ 2,217.9 |
|
(12.1) % |
Less: Exited product lines(3) |
(0.5) |
|
0.9 |
|
(0.2) % |
|
(0.3) |
|
14.1 |
|
(0.6) % |
Organic net sales |
$ 672.0 |
|
$ 702.6 |
|
(4.4) % |
|
$ 1,950.2 |
|
$ 2,203.8 |
|
(11.5) % |
|
|||||||||||
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
||||
|
|
|
|
|
% Change |
|
|
|
|
|
% Change |
|
$ 416.3 |
|
$ 420.3 |
|
(1.0) % |
|
$ 1,285.5 |
|
$ 1,280.7 |
|
0.4 % |
Less: Currency impact(1) |
5.3 |
|
— |
|
1.3 % |
|
(8.5) |
|
— |
|
(0.6) % |
Constant currency net sales |
$ 411.0 |
|
$ 420.3 |
|
(2.2) % |
|
$ 1,294.1 |
|
$ 1,280.7 |
|
1.0 % |
Less: Divestitures(2) |
1.7 |
|
14.9 |
|
(3.2) % |
|
12.6 |
|
36.5 |
|
(1.9) % |
Organic net sales |
$ 409.3 |
|
$ 405.4 |
|
1.0 % |
|
$ 1,281.5 |
|
$ 1,244.2 |
|
3.0 % |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Currency impact is calculated using the exchange rates used to translate our financial statements in the comparable prior year period to show what current period US dollar results would have been if such currency exchange rates had not changed. |
(2) |
Represents divestiture of the Rare Diseases Business and branded asset sales in CSCI during the three months ended |
(3) |
Exited product lines represents strategic actions taken across multiple product categories, primarily driven by exited products within the Upper Respiratory, Skincare and Nutrition categories in CSCA. |
TABLE VI |
||||||||||||||||
|
||||||||||||||||
|
Three Months Ended |
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
||||
CSCA Net Sales(1) |
|
|
|
|
Change |
|
|
|
|
|
Change |
|
||||
Nutrition |
$ 127.1 |
|
$ 129.7 |
|
$ (2.6) |
|
(2.0) % |
|
$ 303.8 |
|
$ 436.3 |
|
$ (132.5) |
|
(30.4) % |
|
Upper Respiratory |
120.9 |
|
131.2 |
|
(10.3) |
|
(7.8) % |
|
370.0 |
|
422.2 |
|
(52.2) |
|
(12.4) % |
|
|
113.5 |
|
118.1 |
|
(4.6) |
|
(3.9) % |
|
361.7 |
|
368.2 |
|
(6.5) |
|
(1.7) % |
|
Pain and Sleep-Aids |
87.7 |
|
94.5 |
|
(6.8) |
|
(7.2) % |
|
251.9 |
|
294.6 |
|
(42.7) |
|
(14.5) % |
|
Healthy Lifestyle |
80.9 |
|
79.4 |
|
1.5 |
|
1.9 % |
|
221.3 |
|
219.3 |
|
2.0 |
|
0.9 % |
|
|
66.9 |
|
76.7 |
|
(9.8) |
|
(12.7) % |
|
204.8 |
|
235.5 |
|
(30.7) |
|
(13.0) % |
|
|
51.9 |
|
58.2 |
|
(6.3) |
|
(10.7) % |
|
158.6 |
|
189.8 |
|
(31.2) |
|
(16.4) % |
|
|
18.0 |
|
10.5 |
|
7.5 |
|
70.9 % |
|
62.0 |
|
35.6 |
|
26.4 |
|
74.2 % |
|
VMS and Other CSCA |
4.4 |
|
5.2 |
|
(0.8) |
|
(20.0) % |
|
15.4 |
|
16.4 |
|
(1.0) |
|
(6.1) % |
|
Total CSCA Net Sales |
$ 671.3 |
|
$ 703.5 |
|
$ (32.2) |
|
(4.6) % |
|
$ 1,949.5 |
|
$ 2,217.9 |
|
$ (268.4) |
|
(12.1) % |
|
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
We updated our global reporting product categories as a result of legacy sales being moved out of Other CSCA and into respective categories. These product categories have been adjusted retroactively to reflect the changes and have no impact on historical financial position, results of operations, or cash flows. |
CSCA Third Quarter Primary Category Drivers:
-
Nutrition: Net sales of
$127 million decreased 2.0% due primarily to lower net sales of oral electrolyte solutions (OES), which were partially offset by a 3% increase in net sales of infant formula products as the Company continues to refill store brand and contract customer inventories and regain market share. -
Upper Respiratory: Net sales of
$121 million decreased 7.8% due primarily to previously disclosed lost distribution of lower margin products inU.S. Store Brand and lower volume consumption in the cough cold category versus the prior year period. These impacts more than offset strong growth of Nasonex® and Triamcinolone Acetonide in the allergy category. -
Digestive Health : Net sales of$114 million decreased 3.9% due primarily to previously disclosed lost distribution of lower margin products inU.S. Store Brand and lower net sales of products in the Omeprazole family. These impacts more than offset higher net sales of Polyethylene Glycol, products within the Esomeprazole family, and Prevacid®, in addition to new business awards. -
Pain & Sleep-Aids: Net sales of
$88 million decreased 7.2% due primarily to previously disclosed lost distribution of lower margin products inU.S. Store Brand, partially offset by new business awards. -
Healthy Lifestyle: Net sales of
$81 million increased 1.9% due primarily to higher net sales of nicotine gums which benefited from new distribution at specific retail customers and market share gains. -
Oral Care : Net sales of$67 million decreased 12.7% due to lower total category consumption versus the prior year period, lower distribution at specific retail customers, and lower net sales of Plackers® dental flossers. -
Skin Care : Net sales of$52 million decreased 10.7% due primarily to lower contract manufacturing sales from one customer that is insourcing production, as expected. This dynamic more than offset growth within the Minoxidil franchise. -
Women's Health : Net sales of$18 million increased 70.9% due primarily to Opill® and higher net sales of feminine hygiene products. -
Vitamins, Minerals, and Supplements ("VMS") and Other: Net sales of
$4 million decreased 20.0%.
TABLE VI (Continued) |
|||||||||||||||||||
|
|||||||||||||||||||
|
Three Months Ended |
|
|
|
|
|
Constant Currency Change (1) |
|
Nine Months Ended |
|
|
|
|
|
Constant Currency Change (1) |
||||
CSCI Net Sales |
|
|
|
|
% Change |
|
Currency Impact (1) |
|
|
|
|
|
|
% Change |
|
Currency Impact (1) |
|
||
|
$ 91.0 |
|
$ 86.7 |
|
5.0 % |
|
(0.4) % |
|
4.6 % |
|
$ 333.5 |
|
$ 293.1 |
|
13.8 % |
|
2.9 % |
|
16.7 % |
Upper Respiratory |
86.1 |
|
78.2 |
|
10.2 % |
|
(2.2) % |
|
8.0 % |
|
206.0 |
|
227.9 |
|
(9.6) % |
|
(1.3) % |
|
(10.9) % |
Pain and Sleep-Aids |
56.9 |
|
61.1 |
|
(6.8) % |
|
(2.6) % |
|
(9.4) % |
|
158.6 |
|
163.8 |
|
(3.2) % |
|
(2.1) % |
|
(5.3) % |
Healthy Lifestyle |
53.2 |
|
52.4 |
|
1.4 % |
|
(1.5) % |
|
(0.2) % |
|
175.2 |
|
179.4 |
|
(2.3) % |
|
4.0 % |
|
1.6 % |
VMS |
43.0 |
|
46.1 |
|
(6.8) % |
|
(1.1) % |
|
(7.9) % |
|
127.4 |
|
135.4 |
|
(5.9) % |
|
(0.4) % |
|
(6.3) % |
|
32.2 |
|
28.5 |
|
13.0 % |
|
(1.3) % |
|
11.7 % |
|
101.2 |
|
89.5 |
|
13.1 % |
|
— % |
|
13.0 % |
|
23.3 |
|
24.8 |
|
(5.9) % |
|
(1.8) % |
|
(7.7) % |
|
75.0 |
|
75.5 |
|
(0.7) % |
|
(1.3) % |
|
(1.9) % |
|
30.6 |
|
42.5 |
|
(28.3) % |
|
1.1 % |
|
(27.2) % |
|
108.5 |
|
116.1 |
|
(6.5) % |
|
0.7 % |
|
(5.8) % |
Total CSCI Net Sales |
$ 416.3 |
|
$ 420.3 |
|
(1.0) % |
|
(1.3) % |
|
(2.2) % |
|
$ 1,285.4 |
|
$ 1,280.7 |
|
0.4 % |
|
0.7 % |
|
1.0 % |
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
|
(1) |
Currency impact is calculated using the exchange rates used to translate our financial statements in the comparable prior year period to show what current period US dollar results would have been if such currency exchange rates had not changed. |
CSCI Third Quarter Primary Category Drivers:
-
Skin Care : Net sales of$91 million increased 5.0%, or an increase of 4.6% excluding the impact of currency, due to strong growth in Compeed®, driven by market share gains, in addition to higher net sales within the ACO® and Sebamed® brand portfolios. The category also benefited from the absence of prior year distribution transitions. -
Upper Respiratory: Net sales of
$86 million increased 10.2%, or an increase of 8.0% excluding the impact of currency, due primarily higher net sales of Bronchenolo®, Bronchostop® and Coldrex®, which benefited from category growth and market share gains. -
Pain & Sleep-Aids: Net sales of
$57 million decreased 6.8%, or a decrease of 9.4% excluding the impact of currency, due primarily to lower net sales of Solpadeine®, due primarily to supply constraints, and lower net sales of store brand products. -
Healthy Lifestyle: Net sales of
$53 million increased 1.4%, or a decrease of 0.2% excluding the impact of currency, as higher consumption for anti-parasite products including Paranix®, were more than offset by lower category consumption in weight loss, impacting XLS Medical®. -
VMS: Net sales of
$43 million decreased 6.8%, or a decrease of 7.9% excluding the impact of currency, due primarily to promotional phasing of Davitamon® and Abtei® and overall lower category consumption. -
Women's Health : Net sales of$32 million increased 13.0%, or an increase of 11.7% excluding the impact of currency, due primarily to higher net sales of contraceptive products including EllaOne®, driven by market share gains and the absence of prior year distribution transitions. -
Oral Care : Net sales of$23 million decreased 5.9%, or a decrease of 7.7% excluding the impact of currency, due primarily to lower net sales of store brand products and Plackers®. -
Digestive Health and Other: Net sales of$31 million decreased 28.3%, or a decrease of 27.2% excluding the impact of currency, primarily due to the divestiture of the HRA Pharma Rare Diseases Business, which was partially offset by higher net sales of store brand products.
TABLE VII |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
|
|
|
|
Nine Months Ended |
|
|
|
|
||||
Consolidated Continuing Operations |
|
|
|
|
|
Total Change |
|
|
|
|
|
Total Change |
||||
Adjusted gross profit |
|
$ 446.1 |
|
$ 443.6 |
|
$ 2.5 |
|
0.6 % |
|
|
|
|
|
|
|
|
Adjusted gross margin |
|
41.0 % |
|
39.5 % |
|
|
|
160 bps |
|
|
|
|
|
|
|
|
Adjusted operating income |
|
$ 182.4 |
|
$ 150.3 |
|
$ 32.0 |
|
21.3 % |
|
$ 414.6 |
|
$ 407.2 |
|
|
|
1.8 % |
Less: Currency impact(1) |
|
|
|
|
|
|
|
|
|
(3.3) |
|
— |
|
|
|
|
Constant currency adjusted operating income |
|
|
|
|
|
|
|
|
|
$ 417.9 |
|
$ 407.2 |
|
$ 10.7 |
|
2.6 % |
Adjusted operating margin |
|
16.8 % |
|
13.4 % |
|
|
|
340 bps |
|
|
|
|
|
|
|
|
Adjusted EPS |
|
$ 0.81 |
|
$ 0.64 |
|
$ 0.17 |
|
26.6 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Self-Care Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
|
$ 235.1 |
|
$ 228.5 |
|
$ 6.6 |
|
2.9 % |
|
|
|
|
|
|
|
|
Adjusted gross margin |
|
35.0 % |
|
32.5 % |
|
|
|
250 bps |
|
|
|
|
|
|
|
|
Adjusted operating income |
|
$ 131.9 |
|
$ 108.1 |
|
$ 23.8 |
|
22.0 % |
|
|
|
|
|
|
|
|
Adjusted operating margin |
|
19.7 % |
|
15.4 % |
|
|
|
430 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit |
|
$ 211.1 |
|
$ 215.1 |
|
$ (4.0) |
|
(1.9) % |
|
|
|
|
|
|
|
|
Adjusted gross margin |
|
50.7 % |
|
51.2 % |
|
|
|
(50) bps |
|
|
|
|
|
|
|
|
Adjusted operating income |
|
$ 91.9 |
|
$ 79.7 |
|
$ 12.2 |
|
15.3 % |
|
|
|
|
|
|
|
|
Adjusted operating margin |
|
22.1 % |
|
19.0 % |
|
|
|
310 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: |
amounts may not add or recalculate due to rounding. Percentages are based on actuals. |
|
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(1) |
Currency impact is calculated using the exchange rates used to translate our financial statements in the comparable prior year period to show what current period US dollar results would have been if such currency exchange rates had not changed. |
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