Bausch + Lomb (NYSE:BLCO) FY 2025 Conference December 03, 2025 09:00 AM ET Company ParticipantsBrent Saunders - CEOSam Eldessouky - CFOConference Call ParticipantsNone - AnalystNoneHello, and good morning, everybody, to day two of the Citibank Global Healthcare conference here in Miami. And I am Joanne Lynch, the medical technology analyst here. And I'm thrilled that we're going to start this session with the management of Bausch + Lomb. Brent Saunders is Chairman and CEO, and Sam, oh, I'm going to call you ...

Financial Data and Key Metrics Changes - The company is focused on achieving financial excellence, particularly improving EBITDA margins to align with or exceed competitors [5][6][11] - A three-year plan was announced, targeting a revenue growth rate of 5%-7% [13][15] - The company aims for a net leverage of 3.5 times by 2028 [18] Business Line Data and Key Metrics Changes - The Vision 27 program is designed to enhance operational efficiency and gross margins across various business lines [6][11] - The contact lens segment is expected to grow faster than the market, with a new bioactive platform, Project Halo, set to launch in 2028 [21][27] - The dry eye product portfolio, including Xiidra and Miebo, is positioned as the gold standard in the market [52] Market Data and Key Metrics Changes - The contact lens market has slowed to about 4% growth, influenced by economic conditions in Asia, particularly China [28][29] - The company anticipates a recovery in the contact lens market, projecting growth to return to 5% or higher by 2026 [29] Company Strategy and Development Direction - The company is committed to organic growth, with no M&A planned in the three-year strategy [18] - Focus on innovation is critical, with a deep pipeline of products expected to drive future growth [90] - The company aims to leverage its existing infrastructure for new product launches to maintain high margins [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation into a high-performance competitor, emphasizing the importance of innovation and operational excellence [5][6] - The management highlighted the need for a disciplined approach to spending as growth resumes [9][11] - The company is optimistic about the aging population's demand for premium IOLs, viewing it as a growth driver [89] Other Important Information - The company is focusing on enhancing its R&D efficiency, aiming to allocate more resources towards product development rather than administrative costs [50] - The introduction of new products like Lumify Luxe and the expansion of the PreserVision brand are seen as significant growth opportunities [44][46] Q&A Session Summary Question: How should investors think about the liquidity of Bausch + Lomb given its ownership structure? - Management acknowledged the 88% ownership by Bausch Health and indicated that both boards are committed to addressing liquidity issues, though the timeline is uncertain [12] Question: What are the components of the 5%-7% revenue long-range plan? - Management explained that the guidance is based on current market conditions and internal capabilities, with a balanced approach to growth [13][15] Question: How does the company view tuck-in M&A opportunities? - Management stated that no M&A is needed at this time, focusing instead on organic growth and improving the balance sheet [18] Question: What is the expected timeline for the new bioactive contact lens material? - The new product is expected to launch in 2028, with ongoing clinical studies providing positive data [24][27] Question: How does the company plan to manage its R&D budget? - The company is increasing its R&D spending to about 7.5% of revenue, focusing on high-potential programs [48][50] Question: What is the outlook for the dry eye market? - Management believes they have the best portfolio for dry eye treatment, with Xiidra and Miebo positioned as leading products [52] Question: What is the growth outlook for the surgical business? - The surgical business is expected to grow steadily, driven by an aging population and consistent demand for IOLs [89]

Summary of Bausch + Lomb Investor Day Company Overview - **Company**: Bausch + Lomb (NYSE: BLCO) - **Event**: 2025 Investor Day held on November 13, 2025 Key Industry Insights - **Market Growth**: The eye care market is durable and growing at mid-single digits, with Bausch + Lomb expecting a compound annual growth rate (CAGR) of 5%-7% through 2028 [19][22] - **Consumer Trends**: Increasing consumer interest in self-care, an aging population, and a rise in eye conditions, particularly dry eye, are driving market growth [51] Core Company Strategies - **Financial Excellence**: Emphasis on driving execution, controlling costs, and expanding margins to create sustainable value through 2028 and beyond [16][17] - **Innovation Focus**: A robust pipeline of breakthrough products is expected to deliver significant value beyond 2028, with over 60 active programs in various stages of development [18][34] Financial Targets - **Revenue Growth**: Expected above-market revenue growth with a target of 5%-7% CAGR through 2028 [19][22] - **Margin Expansion**: Targeting an adjusted EBITDA margin of 23% by 2028, reflecting a 600 basis points improvement from 2025 guidance [20][21] - **Cash Flow Generation**: Anticipating cash flow conversion to exceed 50% by 2028, with strong progress already noted in Q3 results [20][28] Product Portfolio Highlights - **Consumer Business**: Strong performance with a 5%-7% CAGR expected, driven by brands like PreserVision, Lumify, and Blink [23][51] - **Pharmaceutical Leadership**: Market leader in dry eye disease with brands Mibo and Xiidra, focusing on innovative treatments [24] - **Surgical Innovations**: Premium IOL portfolio and new product launches are driving growth in the surgical segment [24] Key Product Innovations - **PreserVision AREDS3**: A new formulation targeting all stages of age-related macular degeneration (AMD), expected to launch in 2026 [54][55] - **Lumify Lux**: A new version of the popular redness reliever incorporating hyaluronic acid for enhanced user experience [60][61] - **Blink Triple Care**: An advanced OTC dry eye drop formulation combining hyaluronic acid with nano-emulsion lipids for long-lasting hydration [64] R&D and Innovation - **R&D Transformation**: Significant restructuring to enhance capabilities, focusing on groundbreaking innovations and faster market delivery [33][34] - **Pipeline Potential**: Aiming for peak sales of $7 billion from the current pipeline, with a focus on disruptive innovations rather than incremental improvements [30][31] Market Position and Competitive Advantage - **Leadership in Consumer Eye Health**: Bausch + Lomb is the number one global consumer eye health company, outperforming peers in growth [51][52] - **Brand Trust**: Strong consumer trust in brands like PreserVision, Lumify, and Biotrue, which are highly recommended by eye care professionals [52] Conclusion - Bausch + Lomb is positioned for significant growth through innovative product development, strong financial management, and a commitment to improving eye health standards. The company is confident in its ability to deliver above-market growth and expand profitability through disciplined execution and strategic investments in R&D.

INVESTOR DAY November 13th, 2025 Disclaimers Forward-Looking Statements This presentation contains forward-looking information and statements, within the meaning of applicable securities laws (collectively, "forward-looking statements"), including, but not limited to, statements regarding future prospects and performance of Bausch + Lomb Corporation ("Bausch + Lomb", the "Company", "we", "us", or "B+L"), our 2025 full year guidance, our three year financial targets (including targets for Company and segment ...

Financial Data and Key Metrics Changes - Total company revenue for Q3 2025 was $1.281 billion, reflecting a year-over-year growth of 6% [10][11] - Adjusted EBITDA for Q3 was $243 million, up 7% year-over-year, with an adjusted EBITDA margin of 19%, representing a sequential increase of 400 basis points [14][15] - Adjusted cash flow from operations was $161 million, with adjusted free cash flow at $87 million, indicating strong cash flow generation [14][15] Business Line Data and Key Metrics Changes - Vision Care revenue for Q3 was $736 million, increasing by 6%, driven by growth in both consumer and contact lenses [10][11] - Pharmaceuticals segment revenue was $330 million, representing a 7% increase, with MIEBO generating $84 million, a 71% year-over-year increase [13][14] - Surgical segment revenue was $215 million, a 1% increase, with premium IOLs showing a 27% constant currency revenue growth [12][14] Market Data and Key Metrics Changes - The U.S. branded RX business in pharmaceuticals grew by 13%, while the international pharmaceuticals business was up 12% [13][14] - The contact lens market is expected to grow in the mid-single digits, with the company outpacing market growth [38][80] - The company reported a 9% growth in the U.S. contact lens market and a 4% growth internationally [12][14] Company Strategy and Development Direction - The company is focused on three core pillars: Selling Excellence, Operational Excellence, and Disruptive Innovation, with the addition of a fourth pillar, Financial Excellence [6][27] - The strategy aims to deliver sustained, profitable growth through innovation and operational efficiency, with a strong emphasis on cash flow optimization [7][10] - Upcoming product launches and innovations are expected to drive future growth, particularly in the dry eye treatment market [8][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the dry eye market, with MIEBO and XIIdra leading the way [18][104] - The company anticipates continued revenue growth and margin expansion, supported by disciplined cost management and operational improvements [15][29] - The management is closely monitoring tariff impacts and believes they can mitigate potential negative effects [16][78] Other Important Information - The company is maintaining its full-year revenue guidance at $5.05 billion to $5.15 billion, representing constant currency growth of approximately 5% to 7% [15][16] - Adjusted gross margin for Q3 was 61.7%, reflecting a 130 basis points decrease year-over-year, primarily due to product mix and the Invista IOL recall [13][14] Q&A Session Summary Question: Commentary on Financial Excellence pillar - The Financial Excellence pillar focuses on ensuring every dollar spent drives growth and efficiency, emphasizing disciplined execution and resource allocation [26][27] Question: Insights on contact lens market share - The company has been growing faster than the industry, attributing this to new product innovations and effective execution [38][39] Question: MIEBO and combination therapy - MIEBO's TRx growth of 110% indicates strong market potential, and combination therapies are seen as a way to enhance treatment efficacy [44][49] Question: Surgical business and Invista IOL recovery - The Invista IOL platform has shown impressive recovery, with sales reaching 82% of pre-recall levels, and the company is regaining momentum in premium IOLs [58][60] Question: Sustainability of SG&A leverage - The company aims for sustainable SG&A improvements while balancing reinvestment in growth opportunities [61][62] Question: Tariff impact and market growth outlook - The company is monitoring tariff impacts closely and believes it can manage potential challenges while maintaining a positive growth outlook [78][80]

Financial Data and Key Metrics Changes - Total company revenue for Q3 2025 was $1.281 billion, reflecting year-over-year growth of 6% [10] - Adjusted EBITDA for Q3 was $243 million, up 7% year-over-year, with an adjusted EBITDA margin of 19%, representing a sequential increase of 400 basis points [14][15] - Adjusted cash flow from operations was $161 million, with adjusted free cash flow at $87 million, indicating strong cash flow generation [14] Business Line Data and Key Metrics Changes - Vision Care revenue for Q3 was $736 million, increasing by 6%, driven by growth in both consumer and contact lenses [10] - Pharmaceuticals segment revenue was $330 million, representing a 7% increase, with MIEBO generating $84 million, a 71% year-over-year increase [13] - Surgical segment revenue was $215 million, a 1% increase, with premium IOLs showing 27% constant currency revenue growth [12][13] Market Data and Key Metrics Changes - The U.S. branded RX business in pharmaceuticals grew by 13%, while the international pharmaceuticals business was up 12% [13] - The contact lens market is growing at a mid-single-digit rate, with the company outpacing the market growth [41][80] - The company reported a 9% growth in the U.S. contact lens market and a 4% growth internationally [12] Company Strategy and Development Direction - The company is focused on four strategic pillars: Selling Excellence, Operational Excellence, Disruptive Innovation, and Financial Excellence [5][6] - The upcoming Investor Day will showcase a three-year plan aimed at delivering sustained, profitable growth [6][15] - The company aims to elevate the standard of care in eye health through innovative product launches and a strong pipeline [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the dry eye market, anticipating continued expansion due to increased awareness and education [18][100] - The company is committed to maintaining a disciplined approach to cost management while investing in R&D for future growth [15][66] - Management noted that the tariff situation remains fluid but expressed confidence in the ability to mitigate impacts [75][78] Other Important Information - Adjusted gross margin for Q3 was 61.7%, a decrease of 130 basis points year-over-year, primarily due to product mix and the Invista IOL recall [14][86] - The company is maintaining its full-year revenue guidance at $5.05 billion to $5.15 billion, representing constant currency growth of approximately 5% to 7% [15][16] Q&A Session Summary Question: Commentary on Financial Excellence pillar - Management explained that the Financial Excellence pillar focuses on ensuring every dollar spent drives growth and efficiency, emphasizing disciplined execution and resource allocation [24][26] Question: Insights on contact lens market share - Management indicated that the contact lens market is growing in the mid-single digits, with the company growing faster than the market due to new product innovations [41][42] Question: MIEBO's performance and market opportunity - Management highlighted MIEBO's strong TRx growth of 110% year-over-year, indicating a positive outlook for the dry eye treatment market [18][49] Question: Surgical business and Invista IOL recovery - Management reported impressive recovery in the Invista IOL platform, with sales reaching 82% of pre-recall levels, and expressed confidence in regaining market momentum [58][60] Question: Capital allocation strategy - Management confirmed a commitment to deleveraging while also considering reinvestment in R&D and potential M&A opportunities [108]

Financial Data and Key Metrics Changes - Total company revenue for Q2 2025 was $1,278 million, reflecting a year-over-year growth of 3% [13] - Excluding the impact of the Envista recall, total company revenue grew by 6% in the quarter [14] - Adjusted gross margin for Q2 was 60.6%, representing a 130 basis points decrease year-over-year [24] - Adjusted EBITDA for Q2, excluding acquired IPR&D, was $192 million, absorbing a one-time impact of $19 million from the investor recall [25] Business Line Data and Key Metrics Changes - Vision Care segment revenue for Q2 was $753 million, increasing by 6%, driven by growth in both consumer and contact lenses [15] - The dry eye portfolio generated $115 million in revenue in Q2, representing 19% growth [16] - Surgical segment revenue was $216 million, an increase of 1%, but would have been 15% growth excluding the recall [19] - Pharma segment revenue was $309 million in Q2, representing a decline of 1% [21] Market Data and Key Metrics Changes - U.S. contact lens revenue grew by 11%, EMEA by 11%, LATAM by 25%, Japan by 3%, and China by 7% [19] - The Daily SiHy contact lens franchise grew by 36% in Q2, continuing to be the fastest-growing brand [18] - The U.S. branded Rx business in Pharma was up 8% in Q2, driven by growth in MyBu and Xiidra [21] Company Strategy and Development Direction - The company is focused on innovation and has a robust pipeline that represents its future [7] - The strategic roadmap aims to accelerate growth and improve operational excellence [5] - The company plans to showcase potential game changers at the upcoming Investor Day [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the team's ability to overcome challenges and transform the company [42] - The company anticipates steady improvement in the U.S. Generics business in the second half of the year [24] - Management remains optimistic about the contact lens market and expects it to remain healthy [75] Other Important Information - The company raised its full-year revenue guidance to a range of $5,050 million to $5,150 million, reflecting constant currency growth of approximately 5% to 7% [26] - Adjusted EBITDA guidance was raised to a range of $860 million to $910 million [27] - The company successfully executed a refinancing of $3,100 million of its debt, extending maturities to 2031 [26] Q&A Session Summary Question: Highlights informing the decision to recommit to the company - Management expressed deep confidence in the team, products, and R&D pipeline, emphasizing the opportunity to transform the company [41] Question: Quantifying the tariff impact and strategy in Pharma - Management noted that the tariff impact is now estimated at 40 basis points for 2025, which is absorbed in the guidance [56] Question: Update on the product pipeline and future expectations - Management indicated that the contact lens R&D projects are at their best in the company's history, with significant advancements expected [98]