Financial Data and Key Metrics Changes - For the full year 2025, the company reported a 2% increase in operating income and a 7% increase in EPS, finishing at $2.75, aligning with revised guidance [8][11] - CORE Perrigo operating income grew by 7%, with CORE EPS up 14% [8] - In Q4 2025, CORE organic net sales declined by 2%, while CORE operating income decreased by $4 million or 2%, resulting in CORE EPS of $0.76, a decline of $0.02 [8][11] Business Line Data and Key Metrics Changes - CSCI's full year core organic net sales decreased by 0.2%, while fourth quarter core organic net sales decreased by 1.4% due to consumer softness in the OTC category [18] - CSCA's full year core organic net sales increased by 3%, but fourth quarter core organic net sales decreased by 2.4%, driven by lower contract manufacturing revenue [19] - All-in net sales for the infant formula segment declined by approximately 25% in Q4 and 10% for the full year [19] Market Data and Key Metrics Changes - The U.S. OTC market experienced a 5.1% decline in dollar sales over the last 13 weeks compared to the previous year, with a 4.3% decline in Q4 and a 1.2% decline for the full year 2025 [11] - Despite market challenges, the company gained solid market share across most categories, reversing years of decline [5][6] Company Strategy and Development Direction - The company is focused on its Three-S plan to simplify, streamline, and strengthen the business, with new reporting segments to be introduced in Q1 2026 [4][10] - The strategy includes enhancing consumer-centric innovation, geographic expansion, and strengthening retailer partnerships [12][13] - The company aims to improve operational efficiency through a two-year operational enhancement program, targeting annualized pre-tax savings of $80 million to $100 million [22][24] Management's Comments on Operating Environment and Future Outlook - Management views 2026 as a transition year, expecting temporary headwinds but confident in long-term growth potential [12][13] - The company anticipates CORE Perrigo organic net sales growth in 2026 to range from -3.5% to +0.5%, with core EPS projected between $2.25 and $2.55 [12][23] - Management highlighted the importance of addressing under absorption and inventory levels, particularly in the infant formula segment [12][61] Other Important Information - The company recorded a goodwill impairment charge of $1.3 billion in 2025, which does not impact its strategy or cash flows [16] - The company ended 2025 with $532 million in cash and a net leverage ratio of 4 times, slightly above projections [20] Q&A Session Summary Question: Outlook for 2026 and pressures in the first half - Management indicated that the decline is largely transitory, with expectations for stabilization and share growth in the second half of 2026 [32][34] Question: Liquidity and leverage position - The company plans to use proceeds from the dermacosmetics sale to reduce debt while maintaining dividend commitments [36] Question: Recovery of margins in the OTC business - Management expects margin recovery to be transitory, with improvements anticipated in the second half of 2026 and into 2027 [42] Question: Infant formula business and strategic review - The strategic review is ongoing, with management assessing options for optimization and potential divestments [44] Question: Categories with negative growth - The cough and cold categories are currently underperforming, while preventative categories like VMS are doing better [47] Question: Capital allocation and dividend priorities - The company remains committed to its capital allocation priorities, including maintaining dividends while reducing leverage [50][51]

Core Insights - The company delivered FY2025 adjusted EPS at the midpoint of the updated outlook range, indicating stable performance despite market challenges [1] - The '3-S Plan' is advancing with Perrigo Store Brand OTC and key brands gaining market share in 2025, despite soft category consumption [1] - A new operational enhancement program is being launched, expected to deliver pre-tax annualized savings of $80 million to $100 million [1] - The company will transition to new reporting segments beginning Q1 2026, aligning with its commercial operating model [1] - FY2026 'All In' outlook has been issued, along with the introduction of FY2026 'CORE' outlook, which excludes infant formula and previously announced divestitures [1] Financial Performance - For Q4 2025, net sales were reported at $1.11 billion, reflecting a year-over-year decline of 2.5% [1] - Favorable foreign exchange contributed positively by 2.3%, but this was more than offset by organic net sales decline of 4.5% and the impact of divestitures and exited products, which accounted for a 0.4% decrease [1]