Perrigo Company (PRGO) FY Conference Transcript

Summary of Perrigo Company (PRGO) FY Conference - June 10, 2025 Company Overview - Perrigo is a global leader in the self-care market, holding over 50% of the US store brand share and ranking among the top 10 branded companies in Europe [4][5] - The company offers a diverse range of products across various price points, catering to different economic cycles and consumer habits [5][6] Core Business Strategy - Perrigo's strategy is anchored on three imperatives: stabilize, streamline, and strengthen [6][7] - The focus is on returning the US store brand to growth, ensuring reliable quality in infant formula supply, and driving innovation in high-growth brands [7][8] - The company aims for incremental revenue growth of $100 to $200 million by 2027, with a target of reducing net leverage below three times by the end of the year [8][12] Market Position and Performance - Perrigo's portfolio is diversified, with 40% of sales from branded products and 60% from store brand contributions [8][9] - The company is the largest OTC manufacturer by volume in the US and UK, with products present in nearly two-thirds of US households and over 80% of UK households [9][10] - Recent store brand volume share in the US increased by 110 basis points in May, indicating strong market performance [14] Financial Outlook - The company is trading at a significant discount compared to consumer health peers, presenting a value opportunity [11] - Expected double-digit adjusted EPS growth in 2025, with a high single-digit PE multiple [15] - Plans to improve free cash flow to net sales ratio by 200 basis points over three years, focusing on inventory optimization and operational efficiency [55][56] Challenges and Opportunities - The macro environment remains fluid, with pressures on consumer spending affecting OTC categories [13][29] - Trade-down behavior is observed in various categories, but Perrigo's position as a store brand provider offers a defensive advantage [13][29] - The infant formula business is recovering, with plans to launch 60 new SKUs to enhance market share [40][41] Regulatory and Tariff Considerations - The company anticipates a 1% increase in COGS due to tariffs, amounting to approximately $35 million in 2025 [48] - Ongoing strategic reviews of the oral care and derma cosmetic businesses to optimize portfolio focus [51][53] Conclusion - Perrigo is well-positioned to leverage its unique market position and diversified portfolio to drive growth and shareholder value, while navigating challenges in the consumer landscape and regulatory environment [22][54]