2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference...

32
2018 J.P. Morgan Healthcare Conference January 9, 2018

Transcript of 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference...

Page 1: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

2018 J.P. Morgan Healthcare Conference

January 9, 2018

Page 2: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

2

Certain statements in this presentation are "forward-looking statements." These statements relate to future events or the Company's future financial

performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or

achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases,

forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend,"

"believe," "estimate," "predict," "potential" or the negative of those terms or other comparable terminology. The Company has based these forward-looking

statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates

and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of

which are beyond the Company's control, including: the timing, amount and cost of any share repurchases; future impairment charges; the success of

management transition; customer acceptance of new products; competition from other industry participants, some of whom have greater marketing

resources or larger market shares in certain product categories than the Company does; pricing pressures from customers and consumers; potential third-

party claims and litigation, including litigation relating to the Company's restatement of previously-filed financial information; potential impacts of ongoing or

future government investigations and regulatory initiatives; resolution of uncertain tax positions; the impact of U.S. tax reform legislation and healthcare

policy; general economic conditions; fluctuations in currency exchange rates and interest rates; the consummation of announced acquisitions or

dispositions, and the Company's ability to realize the desired benefits thereof; and the Company's ability to execute and achieve the desired benefits of

announced cost-reduction efforts and other initiatives. In addition, the Company may be unable to remediate one or more previously identified material

weaknesses in its internal control over financial reporting. Furthermore, the Company may incur additional tax liabilities in respect of 2016 and prior years

or be found to have breached certain provisions of Irish company law in connection with the Company’s restatement of previously filed financial

statements; which may result in additional expenses and penalties. These and other important factors, including those discussed under "Risk Factors" in

the Company's Form 10-K for the year ended December 31, 2016, as well as the Company's subsequent filings with the United States Securities and

Exchange Commission, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-

looking statements. The forward-looking statements in this presentation are made only as of the date hereof, and unless otherwise required by applicable

securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new

information, future events or otherwise.

Non-GAAP Measures

This presentation contains non-GAAP measures. The reconciliation of those measures to the most comparable GAAP measures is included at the end of

this presentation. A copy of this presentation, including the reconciliations, is available on the Company’s website at www.perrigo.com.

Forward – Looking Statements

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Uwe RöhrhoffIncoming President &

Chief Executive Officer

Seasoned Global Leader With Impressive Performance Track Record

“I am excited to begin my role as CEO and lead Perrigo’s experienced

management team, who have been instrumental in positioning the

Company’s consumer OTC and prescription pharmaceutical businesses. I

have long admired Perrigo’s operational excellence and its mission to

deliver high-quality, affordable healthcare products that improve the lives of

patients and families.”

Experienced public CEO: Customer-centric, strategic leader

whose focus on operational excellence transformed Gerresheimer

AG, a leading manufacturer of pharmaceutical packaging products

Experienced public board member: Audit Committee

Chairman of Catalent, Inc. (NYSE: CTLT) and Deputy

Chairman of Klöckner&Co SE (ETR:KCO); plans to step

down from both boards

Proven track record: Drove growth while managing a complex

global operating platform

Total shareholder return1 as

Gerresheimer AG CEO

~225%

1 Total shareholder return calculated from Bloomberg from announcement of Röhrhoff’s election as CEO on February 9, 2010 through announcement of his successors appointment on March 3, 2017

Global leadership: Held key leadership roles in Europe and

North America; led American subsidiary

Instrumental in determining Gerresheimer AG’s strategic focus,

transforming and reshaping the corporate portfolio and delivering on

operational projects

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Improving Lives of

Patients & FamiliesOperational

Excellence

Unique Business

Model

Quality Affordable

Healthcare Products®

Save consumers more

than $7B annually

130-year legacy of doing the right thing

Diversified store brand and branded consumer OTC healthcare, and Rx

platforms

Leader in Quality

Affordable Healthcare

The Perrigo Advantage

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Strategic Initiatives Delivering Results

Strategic Alternatives Processes for: API India – South Africa – Russia – Argentina –

Partnership for Rx branded portfolio

Segment Performance:Improved CHC International profitability –

Continued execution in CHC Americas –

Strong execution on Rx pipeline

Completed Divestiture of:Tysabri® – U.S. VMS business – API Israel –European sports nutrition brand – Pet treats plant

Improved Results

Page 6: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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Cough, Cold

& Allergy Analgesic

Personal Care/ Derma-

therapeutic

Extended

Topical

Animal

Health

Infant

Nutrition

Lifestyle/

Smoking

Cessation

Dermatological Ophthalmic

Global Store Brand OTC EU Branded OTC US Prescription Pharmaceuticals

Simplified Portfolio Enables Greater Focus on Core Growth Categories

CHC

Americas

CHC

International

Prescription

Pharmaceuticals

~50% ~20%~30%

* Based on percentage of 2017 Q3 net sales

Page 7: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

7 (1) See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts

✓ CHC Americas adjusted operating

margin consistently above 20%

✓ CHC International adjusted operating

margin of mid-teen percentage

✓ RX adjusted operating margin

sustaining 40%

19.4% 19.4%21.5% 21.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Q4 2016 Q1 2017 Q2 2017 Q3 2017

Consolidated Adjusted Operating Margin

22.2%

20.2%21.0%

23.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Q4 2016 Q1 2017 Q2 2017 Q3 2017

CHCA Adjusted Operating Margin

8.7%

13.8%14.6%

16.4%

0.0%

5.0%

10.0%

15.0%

20.0%

Q4 2016 Q1 2017 Q2 2017 Q3 2017

CHCI Adjusted Operating Margin

43.2%41.0%

46.5%

42.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Q4 2016 Q1 2017 Q2 2017 Q3 2017

Rx Adjusted Operating Margin

Durable & Unique Business ModelContinuing to Deliver Solid Adjusted Operating Margins(1)

Page 8: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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2.0%

0.0%

3.4%

1.1%

3.0%

2013 2014 2015 2016 2017 2018 +

Source: IRI MULO 2017

SB Launches:

SB NRT Mini Lozenge

Major

Impacts:National Brand Return

2016 SB

Launches:

SB FlonaseSB

Drivers:

2nd NB Recalls & Returns

National Brand Recall

2017

SB Launches:

SB Nexium

CHC AmericasExecuting in a Dynamic Market

U.S. Store Brand OTC Dollar Growth

SB NasacortSB Nasonex

SB Differin

SB Mucinex

2018 +

Page 9: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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✓ Continued consumer acceptance of

store brands

✓ Full year effect of successful 2017

new product launches

✓ Supply chain scale and efficiencies

✓ Potentially 2017/2018 cough, cold and

flu season

✓ Competitive environment in certain OTC categories

✓ Slowing traditional retail

environment

Headwinds Tailwinds

CHC Americas2018 Headwinds & Tailwinds

Executing strategic plan as store brand market leader

Page 10: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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Cough, Cold, Allergy, Analgesics

Anti-Parasites

Lifestyle

VMS

Personal Care

Store Brand & Other OTC Brands

Other

CHC International – European Branded OTCC

OM

PE

TIT

IVE

AD

VA

NTA

GE

S

Extensive Branded OTC

Portfolio(1)

EU Platform Reaching

200K+ Pharmacies

Country Focused Structure

Leading Local Brands

Marketing & Innovation

Country leaders able to

leverage unique

branded OTC portfolio

(1) Based on CHCI Segment Net Sales for first 9 months 2017

Page 11: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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CHC International – Branded Growth InitiativesStrategy to Outperform Market Growth

Expand Scale in OTC & Natural Health

Strengthen Lifestyle Positions

Drive Regional Dermatology & VMS

Maintain Leadership in Niche Categories

• Grow OTC position through A&P and innovation investments

• Accelerate natural health assets through A&P and adjacency

innovation

• Solidify leadership position in weight management under a

single brand

• Grow smoking cessation assets through innovation and digital

marketing

• Drive regional brands in Dermatology and VMS through targeted

A&P and new products

• Focus on fundamentals and new product development to

maintain leadership position in niche categories

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✓ Continued execution on focused business

strategy

✓ Continued execution of insourcing strategy

and improvement of cost structure

✓ Continued new product innovation &

capitalize on inorganic bolt-on opportunities

✓ Investments to continue

improving business capabilities

✓ Selective portfolio

rationalization

CHC International2018 Headwinds & Tailwinds

Disciplined execution across the business drives

sustainable performance results

Headwinds Tailwinds

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✓ ANDAs represent $3B in branded sales

✓ 6 confirmed first-to-file ANDAs

✓ Testosterone Topical Solution 2% (Axiron®)

✓ Ivermectin Cream, 1% (Soolantra®)

✓ Ingenol Mebutate Gel 0.015% & 0.05%

(Picato®)

3 Paragraph IV Litigations

20 ANDAs Pending FDA Approval

(1) QuintilesIMS - NSP database TTM June 2017 (Combination of branded & generic sales data)

✓ Focused on difficult to manufacture extended

topicals

✓ Balanced, diversified portfolio

✓ Delivering solid adjusted operating margin

✓ Unique product selection process

Differentiated Business

✓ Generic ProAir®

✓ Working to deliver this first-to-market

generic product in late 2018

✓ Re-filed response to CRL with FDA

Business Outlook

✓ Potential market opportunities represent

greater than $48B(1)

Meaningful Pipeline Opportunities

Rx Pharmaceuticals – A Truly Differentiated Business Extended Topicals Portfolio with Meaningful Opportunities

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✓ Full-year effect of successful 2017 new

product launches

✓ Generic ProAir®

✓ Continued investment in future pipeline

✓ Industry pricing pressures

✓ Purchasing power of buying

consortiums

Prescription Pharmaceuticals (RX) 2018 Headwinds & Tailwinds

Continue to execute unique product selection

process and drive new product pipeline

Headwinds Tailwinds

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Balance Sheet Strength

Approximately $550 million in

total debt due through 2020

Repurchased ~2.7 million

shares in 2017(1)

$776M*

Total Cash as

of 9/30/2017

$3.7B*

Total Debt as

of 9/30/2017

Repaid $2.6 billion of debt in

2017

(1) As of 9/30/2017

Well positioned to capitalize

on bolt-on M&A opportunities

* Does not include ~$370M debt maturity repaid in December 2017

Page 16: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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Perrigo Value Proposition Focused Execution into 2018

Diversified OTC and Rx platforms

Growing pipeline of inorganic bolt-on opportunities

FDA commissioner comments on the potential for new Rx-to-OTC

switch categories

Actions taken are enabling growth in challenging end markets:

✓ CHCA ~1% net sales growth (1) through 3Q17 on a constant currency basis, excluding divested businesses

✓ CHCI ~2% net sales growth (1) through 3Q17 on a constant currency basis, excluding divested businesses

✓ RX guidance expectation of ~2% net sales growth(1) for 2H 17 on a constant currency basis, excluding Entocort®

Initial impact of U.S. tax reform expected to increase adjusted effective tax

rate ~200-300 basis points beginning in 2018

✓ No material impact expected to operating cash flows

(1) See attached Appendix for reconciliation of Adjusted (Non-GAAP) to Reported (GAAP) amounts

Page 17: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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Bradley Joseph

Vice President

Global Investor Relations and Corporate Communications

(269) 686-3373

[email protected]

Page 18: 2018 J.P. Morgan Healthcare Conference January 9, 2018 · 2018 J.P. Morgan Healthcare Conference January 9, 2018. 2 Certain statements in this presentation are "forward-looking statements."

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Three Months Ended September 30, 2017

ConsolidatedNet

SalesGross Profit

R&D Expense

DSG&A Expense

Restructuring, Impairment

Charges, and Other Operating

IncomeOperating Income

Interest, Other, and Change in financial assets

Income Tax

ExpenseNet

Income

Diluted Earnings per Share

Reported $ 1,231.3 $ 497.8 $ 38.4 $ 288.3 $ 8.7 $ 162.4 $ 33.7 $ 84.2 $ 44.5 $ 0.31

As a % of reported net sales 40.4% 3.1% 23.4% 13.2% 2.7% 6.8% 3.6%

Effective tax rate 65.5%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ — $ 55.3 $ (0.3) $ (34.5) $ — $ 90.1 $ — $ — $ 90.1 $ 0.63

Change in financial assets — — — — — — (2.6) — 2.6 0.02

Impairment charges — — — — (7.8) 7.8 — — 7.8 0.06

Restructuring charges — — — — (3.8) 3.8 — — 3.8 0.03

Operating results attributable to held-for-sale business* (16.5) (9.4) (2.4) (4.2) — (2.8) 1.3 — (4.1) (0.03)

Gain/Loss on divestitures — — — — — 1.9 — (1.9) (0.01)

Acquisition charges and contingent consideration adjustments — — — — 2.9 (2.9) — — (2.9) (0.02)

Non-GAAP tax adjustments** — — — — — — — (57.3) 57.3 0.40

Adjusted $ 1,214.8 $ 543.7 $ 35.7 $ 249.6 $ — $ 258.4 $ 34.3 $ 26.9 $ 197.2 $ 1.39

As a % of adjusted net sales 44.8% 2.9% 20.6% 21.3% 2.8% 2.2% 16.2%

Effective tax rate 12.0%

Diluted weighted average shares outstanding

Reported 141.7

*Held-for-sale business includes the Israel API business.

**The non-GAAP tax adjustments include the following: (1) $(23.2) million of tax effects of pretax non-GAAP adjustments that are calculated based upon the specific rate of the applicable jurisdiction of the pretax item; (2) a $36.2 million effect on non-GAAP income taxes related to the interim tax accounting requirements within ASC 740, Income Taxes; (3) $10.0 million net impact related to valuation allowances on deferred tax assets commensurate with non-GAAP pre-tax measures; (4) $(5.4) million of tax adjustments related to the divestiture of the Tysabri® financial asset; (5) $12.8 million related to an IRS audit settlement; and (6) $26.9 million of tax related to the sale of our Israel API business.

Appendix

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Three Months Ended July 1, 2017

ConsolidatedNet

SalesGross Profit

Operating Income

Reported $ 1,237.9 $ 504.6 $ 148.8

As a % of net sales 40.8% 12.0%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 55.6 $ 88.7

Impairment charges — 27.4

Restructuring charges — 12.1

Gain on divestitures — (1.1)

Unusual litigation — (8.8)

Acquisition charges and contingent consideration adjustments — (0.6)

Adjusted $ 560.2 $ 266.5

As a % of net sales 45.3% 21.5%

Appendix

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Three Months Ended April 1, 2017

ConsolidatedNet

SalesGross Profit

Operating Income

Reported $ 1,194.0 $ 464.4 $ 128.5

As a % of net sales 38.9% 10.8%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 55.1 $ 86.6

Impairment charges — 12.2

Gain on divestitures — (21.8)

Restructuring charges — 38.7

Operating results attributable to held-for-sale business* 1.1 1.7

Acquisition and integration-related expense (income) — (14.3)

Adjusted $ 520.6 $ 231.6

As a % of net sales 43.6% 19.4%

*Held-for-sale business includes the India API business.

Appendix

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Three Months Ended December 31, 2016

ConsolidatedNet

SalesGross Profit

Operating Income (Loss)

Reported $ 1,331.2 $ 487.7 $ (484.6)

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 62.0 $ 94.9

Impairment charges — 602.2

Unusual litigation — 18.4

Restructuring charges — 13.1

Operating results attributable to held-for-sale businesses* 4.2 11.5

Acquisition and integration-related charges — 3.0

Adjusted $ 553.9 $ 258.5

As a % of net sales 41.6% 19.4%

*Held-for-sale businesses include the European sports brand and the India API business.

Appendix

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Three Months Ended Three Months Ended

September 30, 2017 October 1, 2016

Consumer Healthcare AmericasNet

SalesGross Profit

R&D Expense

DSG&A Expense

Operating Income

Net Sales

Gross Profit

R&D Expense

DSG&A Expense

Operating Income

Reported $ 598.8 $ 206.1 $ 13.8 $ 70.4 $ 124.3 $ 611.2 $ 199.2 $ 18.3 $ 74.6 $ 99.0

As a % of reported net sales 34.4% 2.3% 11.8% 20.8% 32.6% 3.0% 12.2% 16.2%

Adjustments:

Amortization expense primarily related to acquired intangible assets $ 12.1 $ (4.8) $ 16.9 $ — $ 12.5 $ — $ (5.0) $ 17.6

Impairment charges — — 0.5 — — — — 3.7

Operating results attributable to held-for-sale business* — — — (21.0) (3.4) (0.2) (3.1) (0.1)

Restructuring charges — — (0.8) — — — — 3.9

Acquisition charges and contingent consideration adjustments — — (2.0) — 0.8 — (0.6) 1.1

Adjusted $ 218.2 $ 65.6 $ 138.9 $ 590.2 $ 209.1 $ 18.1 $ 65.9 $ 125.2

As a % of reported net sales (2017) / As a % of adjusted net sales (2016) 36.4% 10.9% 23.2% 35.4% 3.1% 11.2% 21.2%

*Held-for-sale business includes the U.S. VMS business, which was sold in Q3 2016.Three Months Ended Three Months Ended

September 30, 2017 October 1, 2016

Consumer Healthcare InternationalNet

SalesGross Profit

R&D Expense

DSG&A Expense

Operating Income

Net Sales

Gross Profit

R&D Expense

DSG&A Expense

Operating Income (Loss)

Reported $ 365.4 $ 165.9 $ 10.5 $ 147.1 $ 4.6 $ 377.4 $ 155.2 $ 10.7 $ 152.9 $ (1,615.5)

As a % of reported net sales 45.4% 2.9% 40.3% 1.2% 41.1% 2.8% 40.5% (428.1)%

Adjustments:

Amortization expense primarily related to acquired intangible assets $ 21.9 $ (0.3) $ (29.6) $ 51.8 $ — $ 16.9 $ (0.3) $ (28.9) $ 46.3

Impairment charges — — — — — — — — 1,604.5

Operating results attributable to held-for-sale business* — — — — (0.2) 0.2 — (2.8) 3.0

Restructuring charges — — — 3.6 — — — — 2.5

Acquisition charges and contingent consideration adjustments — — — — — — — 0.2 (0.3)

Adjusted $ 187.8 $ 10.2 $ 117.5 $ 60.0 $ 377.2 $ 172.3 $ 10.4 $ 121.4 $ 40.5

As a % of reported net sales (2017) / As a % of adjusted net sales (2016) 51.4% 2.8% 32.2% 16.4% 45.7% 2.7% 32.2% 10.7%

*Held-for-sale business includes the European sports brand, which was sold in Q4 2016.

Appendix

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Three Months Ended Three Months Ended

September 30, 2017 October 1, 2016

Prescription PharmaceuticalsNet

SalesGross Profit

R&D Expense

DSG&A Expense

Operating Income

Net Sales

Gross Profit

R&D Expense

DSG&A Expense

Operating Income

Reported $ 250.6 $ 116.7 $ 12.2 $ 19.2 $ 82.1 $ 251.9 $ 120.9 $ 19.5 $ 27.1 $ 74.4

As a % of net sales 46.6% 4.9% 7.7% 32.8% 48.0% 7.7% 10.7% 29.5%

Adjustments:

Amortization expense primarily related to acquired intangible assets $ 20.9 $ (0.1) $ 21.0 $ 27.1 $ (0.1) $ 27.1

Restructuring charges — — 0.1 — — —

Impairment charges — — 4.0 — — —

Acquisition charges and contingent consideration adjustments — — (0.9) — (5.0) 5.0

Adjusted $ 137.6 $ 19.1 $ 106.3 $ 148.0 $ 22.0 $ 106.5

As a % of net sales 54.9% 7.6% 42.4% 58.7% 8.7% 42.3%

Appendix

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Three Months Ended Three Months Ended

July 1, 2017 July 2, 2016

Consumer Healthcare AmericasNet

SalesGross Profit

Operating Income

Net Sales

Gross Profit

Operating Income

Reported $ 604.9 $ 203.8 $ 104.2 $ 629.9 $ 220.0 $ 116.8

As a % of net sales 33.7% 17.2% 34.9% 18.5%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 12.1 $ 17.0 $ — $ 12.5 $ 17.6

Impairment charges — 4.1 — — 6.2

Operating results attributable to held-for-sale business* — — (42.1) (7.2) (3.1)

Restructuring charges — 4.3 — — 0.3

Acquisition charges and contingent consideration adjustments — (2.6) — 1.0 1.0

Adjusted $ 215.9 $ 127.0 $ 587.8 $ 226.3 $ 138.8

As a % of reported net sales (2017) / As a % of adjusted net sales (2016) 35.7% 21.0% 38.5% 23.6%

*Held-for-sale business includes the U.S. VMS business, which was sold in Q3 2016.

Appendix

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Three Months Ended Three Months Ended

April 1, 2017 April 2, 2016

Consumer Healthcare AmericasNet

SalesGross Profit

Operating Income

Net Sales

Gross Profit

Operating Income

Reported $ 582.8 $ 188.4 $ 75.0 $ 639.1 $ 196.0 $ 100.6

As a % of reported net sales 32.3% 12.9% 30.7% 15.7%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 12.4 $ 17.1 $ — $ 12.8 $ 18.1

Impairment charges — — — — —

Operating results attributable to held-for-sale business* — — (47.1) (7.0) (2.5)

Restructuring charges — 23.7 — — 1.5

Acquisition and integration-related charges — 1.7 — 2.8 3.0

Adjusted $ 200.8 $ 117.5 $ 592.0 $ 204.6 $ 120.7

As a % of reported net sales (2017) / As a % of adjusted net sales (2016) 34.5% 20.2% 34.6% 20.4%

*Held-for-sale business includes the U.S. VMS business, which was sold in Q3 2016.

Appendix

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Three Months Ended Three Months Ended

December 31, 2016 December 31, 2015

Consumer Healthcare AmericasNet

SalesGross Profit

Operating Income

Net Sales

Gross Profit

Operating Income

Reported $ 626.8 $ 210.0 $ 83.3 $ 643.2 $ 206.2 $ 92.8

As a % of net sales 33.5% 13.3% 32.1% 14.4%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 12.6 $ 17.7 $ 12.2 $ 17.9

Unusual litigation — 10.2 — 0.3

Impairment charges — 27.1 — 1.5

Restructuring charges — (0.1) — 12.8

Acquisition and integration-related charges — 1.2 — —

Adjusted $ 222.6 $ 139.4 $ 218.4 $ 125.3

As a % of net sales 35.5% 22.2% 34.0% 19.5%

For Comparative Purposes*

Reported $ 643.2

Operating results attributable to held-for-sale businesses* (44.3)

Adjusted $ 598.9

*Q4 2015 net sales adjustment made for comparison purposes only and does not change any other prior year financial information or metrics since the U.S. VMS business was not held-for-sale in 2015. Q4 2015 gross margin and operating margin use reported net sales as the denominator.

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27

Three Months Ended Three Months Ended

April 1, 2017 April 2, 2016

Consumer Healthcare InternationalNet

SalesGross Profit

Operating Income

Net Sales Gross Profit

Operating Income (Loss)

Reported $ 374.9 $ 169.5 $ 0.2 $ 439.4 $ 199.3 $ (396.4)

As a % of net sales 45.2% 0.1% 45.4% (90.2)%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 20.1 $ 46.9 $ 13.1 $ 42.9

Impairment charges — 1.1 — 403.9

Restructuring charges — 2.9 — 3.1

Operating results attributable to held-for-sale business* 0.5 0.5 — —

Acquisition and integration-related charges — — — 1.3

Adjusted $ 190.1 $ 51.6 $ 212.4 $ 54.8

As a % of net sales 50.7% 13.8% 48.3% 12.5%

*Held-for-sale business includes the European sports brand, which was sold in Q4 2016.

Three Months Ended Three Months Ended

July 1, 2017 July 2, 2016

Consumer Healthcare InternationalNet

SalesGross Profit

Operating Income

Net Sales

Gross Profit

Operating Income

Reported $ 376.5 $ 174.0 $ 3.9 $ 415.9 $ 187.6 $ 0.6

As a % of net sales 46.2% 1.0% 45.1% 0.1%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 20.8 $ 48.9 $ — $ 17.1 $ 46.6

Impairment charges — 3.7 — — —

Unusual litigation — (8.8) — — —

Operating results attributable to held-for-sale business* — — (0.1) 0.7 4.8

Restructuring charges — 6.6 — — 4.8

Acquisition charges and contingent consideration adjustments — 0.6 — — (0.2)

Adjusted $ 194.8 $ 54.9 $ 415.8 $ 205.4 $ 56.6

As a % of net sales 51.7% 14.6% 49.4% 13.6%

*Held-for-sale business includes the European sports brand, which was sold in Q4 2016.

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Three Months Ended

December 31, 2016

Consumer Healthcare InternationalNet

SalesGross Profit

Operating Income (Loss)

Reported $ 419.5 $ 151.3 $ (76.1)

As a % of net sales 36.1% (18.1)%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 20.8 $ 48.4

Impairment charges — 34.1

Restructuring charges — 10.5

Unusual litigation — 8.2

Operating results attributable to held-for-sale business* 3.6 10.3

Acquisition and integration-related charges — 1.0

Adjusted $ 175.7 $ 36.4

As a % of net sales 41.9% 8.7%

*Held-for-sale business includes the European sports brand, which was sold in Q4 2016.

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Three Months Ended

April 1, 2017

Prescription PharmaceuticalsNet

SalesGross Profit

Operating Income

Reported $ 217.4 $ 96.3 $ 88.2

As a % of net sales 44.3% 40.5%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 22.0 $ 22.1

Gain on divestitures — (21.8)

Restructuring charges — 5.6

Impairment charges — 11.1

Acquisition and integration-related charges — (16.1)

Adjusted $ 118.3 $ 89.1

As a % of net sales 54.4% 41.0%

Three Months Ended

July 1, 2017

Prescription PharmaceuticalsNet

SalesGross Profit

Operating Income

Reported $ 240.4 $ 119.1 $ 69.3

As a % of net sales 49.6% 28.8%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 22.3 $ 22.4

Gain on divestitures — (1.1)

Restructuring charges — 0.2

Impairment charges — 19.6

Acquisition charges and contingent consideration adjustments — 1.4

Adjusted $ 141.4 $ 111.8

As a % of net sales 58.8% 46.5%

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Three Months Ended

December 31, 2016

Prescription PharmaceuticalsNet

SalesGross Profit

Operating Income

Reported $ 265.9 $ 121.0 $ (258.5)

As a % of net sales 45.5% (97.3)%

Adjustments:

Amortization expense related primarily to acquired intangible assets $ 28.0 $ 28.1

Restructuring charges — 2.1

Impairment charges 342.4

Acquisition and integration-related charges — 0.9

Adjusted $ 149.0 $ 115.0

As a % of net sales 56.1% 43.2%

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31

Consumer-facing businesses

Three months ended

October 1, 2016

Consolidated reported net sales $ 1,231.3

CHCA reported net sales $ 598.8

CHCI reported net sales 365.4

Total consumer-facing businesses $ 964.2

78%

CHCA adjusted net sales growth over the past nine months

Three months endedNet sales

Three months ended Net sales Total change

April 1, 2017 582.8 April 2, 2016* 592.0 (2)%

July 1, 2017 604.9 July 2, 2016* 587.8 3%

September 30, 2017 598.8 October 1, 2016* 590.2 1%

$ 1,786.5 $ 1,770.0 1%

*Net sales are adjusted to exclude sales attributable to held-for-sale businesses. See Table II for non-GAAP reconciliations.

CHCI net sales less Belgium Distribution net sales

Three Months Ended

October 1, 2016 December 31, 2016

CHCI reported net sales $ 377.4 $ 419.5

Less: Belgium Distribution net sales (42.4) (81.5)

$ 335.0 $ 338.0

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32

Appendix

Nine Months Ended

September 30, 2017

2017 RX reported net sales guidance $ 965.0

Less: Q1 2017 actual sales (217.4)

Less: Q2 2017 actual sales (240.4)

Less: Q2 and Q3 2017 Entocort® net sales (8.8)

RX Q3 - Q4 net sales excluding Entocort® net sales $ 498.4

2016 RX reported net sales YTD $ 1,042.8

Less: Q1 2016 actual sales $ (248.2)

Less: Q2 2016 actual sales $ (276.9)

Less: Q2 and Q3 2016 Entocort® net sales (25.7)

RX Q3 - Q4 net sales excluding Entocort® net sales $ 492.0

RX net sales growth excluding Entocort® 1.3%

Nine Months Ended

September 30, 2017

October 1, 2016

Total Change

FX Change

Constant Currency Change

CHCA* $ 1,786.4 $ 1,770.1 1% —% 1%

CHCI* $ 1,116.8 $ 1,232.4 (9)% 2% (7)%

Less: Belgium distribution net sales (10.6) (118.4)

$ 1,106.2 $ 1,114.0 (1)% 3% 2%

*2016 net sales are adjusted to exclude sales attributable to held-for-sale businesses. See Tables I and II for non-GAAP reconciliations.