1 q13 presentation final v001_g5vnb4


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1 q13 presentation final v001_g5vnb4

  1. 1. First Quarter 2013Financial ResultsConference CallMay 2, 2013
  2. 2. 1Forward-looking StatementsForward-looking StatementsCertain statements made in this presentation may constitute forward-looking statements, including, but not limited to,statements regarding the performance of our business, synergies, timing of timing of product exclusivity and financialguidance for 2013. Forward-looking statements may be identified by the use of the words “anticipates,” “expects,”“intends,” “plans,” “could,” “should,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” or “continue” andvariations or similar expressions. These statements are based upon the current expectations and beliefs of managementand are subject to certain risks and uncertainties that could cause actual results to differ materially from those described inthe forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertaintiesdiscussed in the Companys most recent annual or quarterly report filed with the Securities and Exchange Commission("SEC") and other risks and uncertainties detailed from time to time in the Companys filings with the SEC and the CanadianSecurities Administrators ("CSA"), which factors are incorporated herein by reference. Readers are cautioned not to placeundue reliance on any of these forward-looking statements. The Company undertakes no obligation to update any of theseforward-looking statements to reflect events or circumstances after the date of this presentation or to reflect actualoutcomes.Non-GAAP InformationTo supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), theCompany uses non-GAAP financial measures that exclude certain items, such as amortization of inventory step-up, stock-based compensation step-up, restructuring and acquisition-related costsTBD, acquired in-process research anddevelopment ("IPR&D"), legal settlements, amortization and other non-cash charges, amortization of deferred financingcosts, debt discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt, and (gain) loss oninvestments, net, and adjusts tax expense to cash taxes. Management uses non-GAAP financial measures internally forstrategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financialmeasures, management intends to provide investors with a meaningful, consistent comparison of the company’s coreoperating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance withGAAP; therefore, the information is not necessarily comparable to other companies and should be considered as asupplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.Note 1: The guidance in this presentation is only effective as of the date given,May 2, 2013, and will not be updated or affirmed unless and until the Companypublicly announces updated or affirmed guidance.
  3. 3. 2Agenda1. First Quarter Results2. Financial and Deal Updates3. 2013 Guidance Update
  4. 4. 3Strong 1Q Earnings and CashGeneration PerformanceQ1 2013 Q1 2012Q1 2013vs2012Product Sales $1.039 B $751M 38%Total Revenue $1.068 B $790M 1 35%Cash EPS $1.30 $0.91 1 43%Adjusted Cash Flow $345 M $255 M 1 35%1 Excludes gains on the divestiture of two dermatology products and a foreign exchange gain related to the acquisition ofiNova in the first quarter of 2012
  5. 5. 41Q 2013 Organic GrowthSame Store SalesAs Reported Excluding Generic ImpactU.S. Promoted 1 6% 12%U.S. Neuro 2 -10% -10%Canada / Australia -11% 5%Central/Eastern Europe 11% 11%Latin America 7% 7%South East Asia/South Africa 28% 28%Pro FormaU.S. Promoted 1 0% 2%U.S. Neuro 2 -4% -4%Canada / Australia -11% 2%Central/Eastern Europe 11% 11%Latin America 7% 7%South East Asia/South Africa 28% 28%1 Going forward, organic growth will be reported excluding the impact of Zovirax genericization2 US Neuro & Other EBITA contribution was flat
  6. 6. 5Key U.S. Brands Performance vs. BudgetAcanyaArestinAcneFreeCeraVeZianaSolodynZyclaraDysportRestylanePerlane
  7. 7. 6Customer Focus – Senior Management Conferences Attended To Date (with one-on-one meetings) Maui Derm & Maui Derm NP + PA Winter Clinical Derm (Hawaii Derm) ABAM (American-Brazil Aesthetic Meeting) Noah Worcester Derm Society AAD Winter Meeting (American Academy of Dermatology) ASAPS (American Society for Aesthetic Plastic Surgery) South Beach Symposium AAD Industry Summit Cosmetic Update (Canada) Real World Dermatology for Residents Customer Dinner Meetings Conducted To Date in U.S. New York City San Francisco Los Angeles Phoenix Ft. Lauderdale / Miami Washington DC Chicago Scheduled / In Process: Houston, Dallas, Orange County (CA), Atlanta, and many more Customer Dinner Meetings started in Canada Vancouver, Toronto, Montreal, Calgary Leadership through American Skin Association Honored as “Dermatology company of the Year”
  8. 8. 7Emerging Markets - Strong GrowthEastern/CentralEuropeLatinAmericaSouth EastAsia/SouthAfrica($ in millions)Q1 2013Organic GrowthTotal Product Sales - LTMQ1’ 13Q1’ 13Q1’ 13
  9. 9. Financial and DealUpdatesHoward Schiller
  10. 10. 9Financial SummaryQ1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013Product Sales $751M $743M $853M $942M $1,039MOngoing Service/Alliance Revenue $39M $32 M $31M $44 M $29MTotal Revenue excl. “one-timers” $790M $775M $884M $986M $1,068MOne-time items $66 M $45 M N/A N/A N/ATotal Revenue $856M $820M $884M $986M $1,068MCost of Goods Sold% (% of product sales) 1 25% 24% 23% 24% 22%SG&A% (% of total revenue) 19% 22% 20% 20% 23%R&D Expense $22M $18M $19M $20M $24MOperating Margin (% of total revenue)(excluding amortization) 55% 52% 54% 53% 52%Cash EPS (Reported) $1.14 $1.01 $1.15 $1.22 $1.30w/o one-time items $0.91 $0.87 $1.15 $1.22 $1.30Adjusted Cash Flow fromOperations 2 $255M $307M $241M $423M $345MFully Diluted Share Count 316 M 313 M 312 M 312 M 312 M1 Q1 2012 COGS has been restated to show impact of contract mfg moved to Service/Alliance (previously stated at 26%)2 Q1 2012 adjusted cash flow excludes $66 M from divestiture of IDP-111 and generic Efudex
  11. 11. 10Medicis Deal Upsides >$300 million synergies run rate expected byyear end Up from >$225 million original estimate Ziana extended to July 2016 from 2013 Zyclara extended to January 2019 from 2013 -2015 Over achieved corporate structureefficiencies
  12. 12. 11Q1 2013 LTD Medicis Project Related Costs($ in millions)Restructuring Related Costs Amount PaidSeverance Payments $99.5Acquisition Related Costs Paid to 3rdParties $24.1Integration Related Consulting, Duplicative Labor,Transition Services, and Other$14.3Costs Incurred to date to Achieve Synergies $138.0Restructuring costs should besignificantly less than $275 million
  13. 13. 12Update on Obagi Closed transaction April 25 All personnel notified of status April 26 Consolidated Irvine office into Long BeachApril 28 Current sales force of ~95 people Synergy run rate of at least $50 millionexpected
  14. 14. 13Annual Financial Guidance for 2013Previous Guidance Revenue $4.4 - $4.8billion $5.45 - $5.75* AdjustedCash EPS $1.5 - $1.75 billion inAdjusted Cash Flowfrom OperationsAs of May 2, 2013 Revenue $4.4 - $4.8billion $5.55 - $5.85 AdjustedCash EPS $1.5 - $1.75 billion inAdjusted Cash Flow fromOperationsSee Note 1 regarding guidance* Does not include $0.30 - $0.40 impact from Zovirax generic
  15. 15. First Quarter 2013Financial ResultsConference CallMay 2, 2013