Viatris(VTRS) - 2024 Q4 - Annual Results

Financial Performance - Viatris reported total revenues of $14.7 billion for 2024, a decline of 5% compared to 2023, with operational revenue growth of 2% when excluding divestitures[3]. - U.S. GAAP net loss for 2024 was $(634) million, with adjusted EPS of $2.65 per share, a decrease of 10% from 2023[3]. - Total net sales in developed markets declined by 3%, while emerging markets saw a decline of 12% in 2024[5]. - Fourth quarter 2024 total net sales were $3.5 billion, up 1% on a divestiture-adjusted operational basis compared to fourth-quarter 2023 results[14]. - Total revenues for the year ended December 31, 2024, were $14,739.3 million, down from $15,426.9 million in 2023[36]. - The company reported a net loss of $516.5 million for Q4 2024, compared to a net loss of $765.6 million in Q4 2023[36]. - Adjusted EBITDA for the year ended December 31, 2024, was $4,669.4 million, down from $5,124.1 million in 2023, reflecting a decrease of 8.9%[46]. - Total revenue from key global products for the year ended December 31, 2024, was $1,468.8 million, a decrease of 5.8% from $1,559.3 million in 2023[41]. Cash Flow and Debt Management - The company achieved new product revenues of $582 million in 2024 and free cash flow of $2.0 billion, exceeding its guidance[2]. - U.S. GAAP net cash provided by operating activities was $483 million in the fourth quarter and $2.3 billion for the year, with free cash flow of $685 million in the fourth quarter and $2.6 billion for the year[14]. - Viatris ended 2024 with a gross leverage ratio of 2.9x after repaying $3.7 billion of debt[2]. - The company paid down approximately $1.4 billion in debt during the fourth quarter, achieving a long-term gross leverage target of 2.9x[14]. - Total reported debt as of December 31, 2024, was $14,039.5 million, with a gross debt to adjusted EBITDA ratio of 2.9x[55]. - Long-term debt decreased from $16,188.1 million in 2023 to $14,038.9 million in 2024[39]. Future Guidance and Expectations - Financial guidance for 2025 includes total revenues estimated between $13.5 billion and $14 billion, with a midpoint of $13.75 billion[18]. - Adjusted EBITDA for 2025 is projected to be between $3.9 billion and $4.2 billion, with a midpoint of $4.05 billion[18]. - Adjusted EPS for 2025 is expected to range from $2.12 to $2.26, with a midpoint of $2.19[18]. - The company expects to deliver $450 million to $550 million in new product revenues in 2025[31]. - The company expects U.S. GAAP net cash provided by operating activities for 2025 to be between $2.2 billion and $2.5 billion, with a midpoint of approximately $2.35 billion[17]. Operational Challenges - The company expects a negative impact of approximately $500 million on total revenues and $385 million on adjusted EBITDA in 2025 due to the FDA warning letter and import alert related to its Indore facility[11]. - The anticipated negative impact from the Indore facility is approximately $500 million to total revenues and $385 million to adjusted EBITDA[17]. - Viatris is implementing a comprehensive remediation plan for its Indore facility, with expectations for completion in a few months[12]. - The company has implemented a comprehensive remediation plan following an FDA inspection, with efforts more than halfway completed[31]. Research and Development - The company anticipates six Phase 3 data readouts and important late-stage development milestones for selatogrel, cenerimod, and sotagliflozin in 2025[3]. - Research and development expenses included $2.8 million in special items for the year ended December 31, 2024[46]. - Research and development (R&D) expenses for the three months ended December 31, 2024, were $206.5 million, representing 6% of total revenues, compared to 5% in the same period of 2023[50]. Shareholder Returns - Viatris plans to return $500 million to $650 million in capital to shareholders through share repurchases in 2025[3]. - The company plans to prioritize capital return in 2025, including $500 million to $650 million in share repurchases[30]. Miscellaneous - The company recorded a goodwill impairment charge of $321.0 million for the year ended December 31, 2024, related to the JANZ reporting unit[45]. - The company incurred acquisition and divestiture-related costs of $361.0 million for the year ended December 31, 2024[44]. - Adjusted earnings from operations for the three months ended December 31, 2024, were $870.6 million, down from $986.6 million in 2023[51].