Bausch Health(US:BHC)2022-02-23 19:02Financial Data and Key Metrics Changes - The company achieved total organic revenue growth of 6% and reported revenue growth of 5% compared to 2020, with strong adjusted cash flows from operations exceeding $1.6 billion [11][30] - Adjusted EBITDA for the full year was $3.472 billion, up 3% on a constant currency basis from 2020, which was at the high end of the final guidance range for 2021 [30][41] - The company repaid $1.3 billion of debt in 2021, resulting in a net leverage of 6.5x as of the end of Q4 2021 [34][36] Business Line Data and Key Metrics Changes - Bausch & Lomb (B&L) segment reported Q4 revenue of $1 billion, up 7% organically, with Global Vision Care business growing 9% [15][16] - Salix segment revenue for Q4 was $559 million, up 6% from Q4 2020, driven by XIFAXAN, which grew 9% [23][24] - International Rx segment revenue was up 7% organically, with strong performance in Canada and Poland [25] Market Data and Key Metrics Changes - The International Rx segment reported Q4 revenue of $276 million, with Canada up 13% and Poland up 16% organically [25] - The Global Surgical business grew 22% organically for the full year compared to 2020, reflecting recovery in surgical procedures across major markets [18] - The Global Consumer business grew 6% organically for the full year, with LUMIFY achieving over $100 million in annual revenue [20][42] Company Strategy and Development Direction - The company is targeting net leverage for Bausch & Lomb of less than 2.5x and 6.5% to 6.7% for Bausch Pharma at the time of the spin-off [9][10] - Plans to launch IPOs for Bausch & Lomb and Solta Medical are substantially complete, with preparations ongoing subject to market conditions [8][57] - The company aims to separate into three publicly traded entities, focusing on unlocking shareholder value and driving growth in distinct markets [64][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong underlying momentum of the business, expecting solid organic revenue growth and adjusted EBITDA growth in 2022 [41][87] - The company is taking proactive steps to mitigate gross margin pressure driven by inflation and supply chain issues [38] - Management highlighted the importance of maximizing shareholder value while being cautious about market conditions for the upcoming IPOs [100] Other Important Information - The company will report financial results in three segments starting Q1 2022: Bausch Pharma, Bausch & Lomb, and Solta Medical [10] - Adjusted gross margin for the full year was 71.6%, slightly above guidance, with expectations for a gross margin of roughly 72% in 2022 [28][38] - The company plans to continue leveraging its integrated eye care platform to drive product performance and market share [42][48] Q&A Session Summary Question: Timing of IPOs and operational priorities post-separation - Management indicated that they are ready for IPOs by mid to end of March, depending on market conditions, and emphasized the importance of maximizing shareholder value [69][71] - Post-separation, the focus will be on executing the business strategy, launching new products, and exploring inorganic growth opportunities [73][74] Question: Solta dynamics and growth expectations - Management noted that Solta achieved 22% reported growth in 2021, with strong demand and a focus on maintaining premium pricing [78][82] - The company expects to achieve 15% to 18% growth in 2022, supported by strong demand and a robust product pipeline [80][83] Question: Impact of IPO capital raising on separation plans - Management stated that if IPOs do not raise expected capital, they will continue to focus on organic deleveraging while remaining flexible with leverage targets [99][100] - The company is confident in its ability to generate cash flow to support debt reduction and future growth initiatives [86][87]