Fourth Quarter and Year                    End 2012 Financial                    Results Conference CallFebruary 28, 2013
Forward-looking StatementsForward-looking StatementsCertain statements made in this presentation may constitute forward-lo...
Agenda 1. Fourth Quarter & Year End 2012 Results 2. Operations Update 3. Financial Update                                 ...
Fourth Quarter and Year End 2012Results                      Q4 2012   %      2012      % Product Sales        $947 M    4...
2012 Organic Growth                            Same Store Sales*                                                          ...
Adjusted Cash Flow From Operations                                                    $423      $322           $308       ...
2012 Performance v. GuidanceOriginal Expectations                  Final Results   Revenue $3.1-$3.4 billion      Revenu...
Top Performing Units in 2012   Poland      Market shrank 6% while Valeant grew 3%      Fastest growing pharmaceutical c...
Other Business Updates   Business Development     Natur Produkt closed February 1     Acquired OTC assets from Lek-am i...
Financial UpdateHoward Schiller
Financial Summary                                                    Q4 2011    Q4 2012    FY 2011    FY 2012      Product...
Revenue & Cash EPS Trend Analysis                                         Q1 11      Q2 11      Q3 11     Q4 11      Q1 12...
Q4 Medicis Project Related Costs    ($ in millions)              Restructuring Related Costs                              ...
2012 Revenue Bridge                                     $1,023             $35         $161          $39            $101  ...
Cash Flow Initiatives   We have set working capital targets for each    business unit   We are diligently tracking all r...
Fourth Quarter and Year                    End 2012 Financial                    Results Conference CallFebruary 28, 2013
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4Q 2012 Presentation

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4Q 2012 Presentation

  1. 1. Fourth Quarter and Year End 2012 Financial Results Conference CallFebruary 28, 2013
  2. 2. Forward-looking StatementsForward-looking StatementsCertain statements made in this presentation may constitute forward-looking statements, including, but not limited to,statements regarding expected gain of future market share, product sales growth, synergies, cash flow initiatives andobjectives and product approvals and launches. 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” and variations or similar expressions. These statements are based upon the current expectations and beliefsof management and are subject to certain risks and uncertainties that could cause actual results to differ materially fromthose described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks anduncertainties discussed in the Companys most recent annual or quarterly report filed with the Securities and ExchangeCommission ("SEC") and other risks and uncertainties detailed from time to time in the Companys filings with the SEC andthe Canadian Securities Administrators ("CSA"), which factors are incorporated herein by reference. Readers are cautionednot to place undue reliance on any of these forward-looking statements. The Company undertakes no obligation to updateany of these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflectactual outcomes.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,amortization of alliance product assets & pp&e step up, stock-based compensation step-up, contingent consideration fairvalue adjustments, restructuring, acquisition-related and other costs, acquired in-process research and development("IPR&D"), legal settlements outside the ordinary course of business, the impact of currency fluctuations, amortization andother non-cash charges, amortization of deferred financing costs, debt discounts and ASC 470-20 (FSP APB 14-1) interest,loss on extinguishment of debt, (gain) loss on assets held for sale/impairment, net, (gain) loss on investments, net, andadjusts tax expense to cash taxes. Management uses non-GAAP financial measures internally for strategic decision making,forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, managementintends to provide investors with a meaningful, consistent comparison of the company’s core operating results and trendsfor the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP. Therefore, theinformation is not necessarily comparable to other companies and should be considered as a supplement to, not asubstitute for, or superior to, the corresponding measures calculated in accordance with GAAP. 1
  3. 3. Agenda 1. Fourth Quarter & Year End 2012 Results 2. Operations Update 3. Financial Update 2
  4. 4. Fourth Quarter and Year End 2012Results Q4 2012 % 2012 % Product Sales $947 M 45% $3,310 M 47% Total Revenue $986 M 43% $3,547 M 44% Cash EPS $1.22 30% $4.51 54% Cash EPS Excluding Medicis interest $1.34 43% $4.63 58% expense Adjusted Cash Flow from Operations $423 M 67% $1,294 M 40% 3
  5. 5. 2012 Organic Growth Same Store Sales* Q4 2012 FY 2012 U.S. Derm/Promoted 17% 32% U.S. Neuro 3% -4% Canada / Australia 1 -12% -1% Emerging Markets 12% 11% Total 7% 8% Pro Forma* Q4 2012 FY 2012 U.S. Derm/Promoted 15% 25% U.S. Neuro 3% -4% Canada / Australia 2 -6% 1% Emerging Markets 15% 13% Total 9% 10% * Adjusts for the impact of foreign exchange, acquisitions, divestitures/discontinuations, and includes JV revenues1 Excluding Cesamet, the Canadian / Australian segment delivered Q4 5% organic growth (same store) and 6% (pro forma)2 Excluding Cesamet, the Canadian / Australian segment delivered 2012 12% organic growth (same store) and 9% (pro forma) 4
  6. 6. Adjusted Cash Flow From Operations $423 $322 $308 Excluded Items: • Legal Settlements • Restructuring/Acquisition $241 Related Costs • Tax Benefit from Stock Options • Effect of ASC 470-20 1st Qtr* 2nd Qtr* 3rd Qtr 4th Qtr Total 2012 Adjusted Cash Flow from Operations = $1.3 Billion* Includes $66M Q1 dermatology divestitures and $45M Q2 milestone payment from GSK 5
  7. 7. 2012 Performance v. GuidanceOriginal Expectations Final Results Revenue $3.1-$3.4 billion  Revenue $3.5 billion Cash EPS $3.95 - $4.20  Cash EPS $4.51 >$1.2 billion in Adjusted  $1.3 billion in Adjusted Cash Flow from Cash Flow from Operations Operations  Organic Growth:  8% same store sales  10% pro forma 6
  8. 8. Top Performing Units in 2012 Poland  Market shrank 6% while Valeant grew 3%  Fastest growing pharmaceutical company in Poland; 1 of only 2 pharmaceutical companies that delivered positive organic growth in 2012  Continue to gain market share as the overall Polish market returns to growth in 2013 South East Asia/South Africa  Delivered growth of 20% in constant currency  Both operations realize operating margins above 40% U.S. Neurology & Other  After 6 quarters of decreases, delivered positive growth in Q412  Wellbutrin XL scripts have now leveled off; expect growth in products sales in 2013 U.S. Dermatology  Double digit growth in key Rx dermatology brands - Elidel, Zovirax, Xerese, Acanya, Retin–A Micro  Other non-dermatology Rx business units also grew double digit - OraPharma, ophthalmology, podiatry, aesthetics, consumer Mexico  Delivered greater than 10% organic growth (pro forma)  Successfully added Atlantis acquisition to the portfolio 7
  9. 9. Other Business Updates Business Development  Natur Produkt closed February 1  Acquired OTC assets from Lek-am in Poland February 12  Acquired Targretin from Eisai February 21 Medicis Integration Update  Integration on track – pursuing legal / R&D synergies  Sales force now fully trained and back in the field  Continue to see more upsides than downsides to original deal model R&D / Product Updates  Luliconazole PDUFA date set for December 11, 2013  Dysport launched in Canada  Efinaconazole on track for May 23 PDUFA date  2 Emervel fillers to be filed in 2013  MetroGel 1.3% Hydrogel (Bacterial Vaginosis) to be filed 1H 2013 We will wait until Q1 2013 conference call to update financial guidance 8
  10. 10. Financial UpdateHoward Schiller
  11. 11. Financial Summary Q4 2011 Q4 2012 FY 2011 FY 2012 Product Sales $654M $947M $2,255M $3,310M Ongoing Service/Alliance Revenue $34M $39M $132 M $126M Total Revenue excl. “one-timers” $688M $986M $2,387M $3,436M One-time items N/A N/A $76M $111M Total Revenue $688M $986M $2,463M $3,547M Cost of Goods Sold% 2 (% of product sales) 25% 25% 27% 24% SG&A% 2 (% of total revenue) 20% 20% 21% 20% R&D Expense $17M $20M $65M $79M EBITA Margin 1 (% of total revenue) 54% 53% 51% 53% Cash EPS (Reported) $0.94 $1.22 $2.93 $4.51 w/o one-time items $0.87 $1.22 $2.64 $4.14 Adjusted Cash Flow from Operations $253M $423M $925M $1,294M Fully Diluted Share Count 317 M 312M 326 M 313M1 Excludes all non-operating expenses2 10 Excludes adjustments per Press Tables 2a & 2b
  12. 12. Revenue & Cash EPS Trend Analysis Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12Reported Revenues ($M) $565 $609 $601 $688 $856 $820 $884 $986Sale Cloderm/5FU/IDP111 -$36 -$66Milestones -$40 -$45Revenue excl. one-time items ($M) $529 $569 $601 $688 $790 $775 $884 $986Revenue Growth (vs PY) 17% 15% 28% 34% 49% 36% 47% 43%Reported Cash EPS $0.62 $0.73 $0.66 $0.94 $1.14 $1.01 $1.15 $1.22Sale Cloderm/5FU/IDP111 (margin) -$0.05 -$0.15Milestones -$0.12 -$0.14Gain on Cephalon Shares -$0.06One-time Fx Gains -$0.06 -$0.08Cash EPS excl. one-time items $0.56 $0.54 $0.66 $0.87 $0.91 $0.87 $1.15 $1.22Cash EPS Growth (vs Prior Year)* 28% 17% 65% 75% 61% 61% 75% 40%Base Business Cash Earnings ($M) $188 $179 $212 $277 $287 $269 $357 $380Cash Earnings / Revenue 36% 31% 35% 40% 36% 35% 40% 39%Cash Earnings / Revenue (LTM) 32% 32% 34% 36% 36% 37% 38% 38%* Cash EPS excluding one-time items was $1.34 (54% growth vs Q4 ’11) excluding Medicis related financing. 11
  13. 13. Q4 Medicis Project Related Costs ($ in millions) Restructuring Related Costs Amount Paid Severance Payments $78.0 Acquisition Related Costs Paid to 3rd Parties $23.7 Integration Related Consulting, Duplicative Labor, Transition Services, and Other $3.5 Costs Incurred to date to Achieve Synergies $105.2 Pre-acquisition Related Costs Amount Paid Stock Based Compensation 1 $134.7 Medicis Advisory & Legal Fees $47.0 Total $181.71Accelerated vesting of Medicis stock based compensation of $76M expensed and paid upon closing and payment ofMedicis stock appreciation rights and other compensation of $58M that was accrued by Medicis prior to close and paidpost-close 12
  14. 14. 2012 Revenue Bridge $1,023 $35 $161 $39 $101 $327 $3,547 $2,463 2011 Rev B ase Growt h A cquisit ions One-Tim ers* Generics Divest itures Foreign Exchange 2012 Rev* One-time items Include incremental revenue received from one-time items of $111M received in 2012 over$76M received in 2011 13
  15. 15. Cash Flow Initiatives We have set working capital targets for each business unit We are diligently tracking all restructuring costs  More disciplined approach for the deal model and restructuring efforts We are performing monthly working capital reviews with each unit Cash Flow objectives have been built into the GM’s compensation structure 14
  16. 16. Fourth Quarter and Year End 2012 Financial Results Conference CallFebruary 28, 2013
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